Sps. Antonio & Felisa Beltran vs. Sps.
Apolonio & Loreta Cangayda
G.R. No. 225033
August 15, 2018
Facts:
Spouses Apolonio and Loreta Cangayda verbally agreed to sell the disputed property to
Spouses Antonio and Felisa Beltran for the amount of P35,000.00. The former was
able to pay around P29,000.00 but seventeen (17) years after, Spouses Beltran was
not able to settle the remaining balance, which prompted Spouses Cangayda to file an
action for recovery of possession and damages before Regional Trial Court.
Spouses Beltran contends that 1) they verbally agreed to have a contract of sale, not a
contract to sell; 2) the sale of the disputed property constitutes a sale on installment
covered by Maceda Law; and 3) In relation thereto, Spouses Cangayda should not be
granted relief since they failed to comply with the specific procedure for rescission of
sales of real estate on installment basis set forth under the statute.
The RTC ruled the case in favour of Spouses Cangayda, which was affirmed by Court
of Appeals.
Issue:
Whether or not the oral agreement entered into by parties is a contract of sale.
Ruling.
Yes, the oral agreement is a contract of sale.
Article 1458 of the Civil Code provides that in a contract of sale, one of the parties
obligates himself to transfer the ownership and to deliver a determinate thing, and the
other party has to pay a certain price thereof. In other words, a contract of sale is
consensual in nature and perfected upon the concurrence of its essential requisites.
Being a consensual contract, sale is perfected at the moment there is a meeting of
minds upon the thing which is the object of the contract and upon the price.
In the case at bar, Spouses Beltran argues that the oral agreement entered into is
contract of sale which had the effect of transferring ownership of the disputed property
upon its delivery.
Therefore, the Court held that the oral agreement between the parties is a contract of
sale because a contract of sale is consensual in nature, and it is perfected upon the
concurrence of its essential requisites.
Note:
Contract of Sale Contact to Sell
Delivery of Title
The title passes to the vendee upon the By agreement, the ownership is reserved
delivery of the thing sold. in the vendor and is not to pass until the
full payment of the price.
Recovery of Ownership
The vendor has lost and cannot recover The title is retained by the vendor until
ownership until and unless the contract the full payment of the price.
is resolved or rescinded.
Contract of Conditional Sale Contact to Sell
Condition
Suspensive Condition. The fulfilment of The condition in a contract to sell is the
which arises the obligation. payment of the full purchase price.
Topic: Contract to Sell and Contract of Sale
Romulo A. Coronel, et.al. vs. CA (G.R. No. 103577, October 7, 1996)
Facts:
Coronels and Alcaraz entered into a contract to sell. Coronels executed a document
entitled Receipt of the down payment in favour of Alcaraz.
The agreement has the following stipulations:
1. Alcaraz will pay the down payment.
2. Coronels will cause the transfer in their names of the title of the property upon
receipt of down payment.
3. Coronels will execute a deed of sale and Alcaraz will pay the whole remaining
balance.
However, Coronels made a contract of sale with a third person and rescinded the
earlier contract entered into with Alcaraz.
Respondents contend that the Receipt of the Down Payment embodied a perfected
contract of sale.
Coronels argue that the Receipt of the Down Payment was a mere executory
contract to sell, subject to certain suspensive conditions, and since Ramona Alcaraz is
not in the country, said the contract could not possibly ripen into a contract of
absolute sale.
Issue:
1. Whether or not the contract entered into by the parties is a contract to sell.
2. Whether or not the receipt of the down payment embodied a perfected contract
of sale.
3. Whether or not the sale to Catalina Mabanag is valid.
Ruling:
1. Contract to sell.
The Court held that the contract entered into by Coronel and Alcaraz is a contract to
sell.
In contract to sell, the transfer of ownership and title is upon the full payment of the
purchase price of the property. Transfer of ownership is made by executing an
absolute deed of sale in favour of the buyer.
In the case at bar, Coronels and Alcaraz entered into an agreement which provides
that Coronels will execute the deed of absolute sale in favour of Alcaraz and the latter
will pay the former the whole balance.
Therefore, the contract entered into by Coronels and Alcaraz is a contract to sell
because the stipulations thereof clearly provide that the transfer of ownership is
effected by executing a deed of absolute sale in favour of Alcaraz. It cannot be a
contract of conditional sale because in that contract, transfer of ownership is
automatically conveyed upon the fulfilment of the condition by operation of law.
———————————————————————————————————————
Topic: Article 1458; Contract of Sale and Contract to Sell
Olivarez vs. Castillo
G.R. No. 196251
9 July 2014
Facts:
Castillo and Olivarez Realty Corporation entered into a contract of conditional sale
with the following conditions:
1. Castillo agreed to sell his property to Olivarez for P19,080,490. The latter
agreed to a down payment of P5,000,000.00.
2. Olivarez agreed to pay the remaining balance in 30 equal monthly
installments.
3. Under the deed of Conditional Sale, Olivarez shall file the action against
the Philippine Tourism Authority with the full assistance of Castillo.
4. In case the action against PTA be denied, Castillo agreed to reimburse all
the amounts paid by Olivarez.
However, Castillo filed a complaint against Olivarez and Dr. Olivarez on the grounds
that 1) the latter convinced him to sell his property on the presentation that the
corporation shall be responsible in clearing the property; 2) he was made to sign the
contract with its terms not adequately explained [to him] in tagalog; 3) the Corporation
paid him only P2,500,000.00 Pesos contrary to agreed down payment; and 4) the
Corporation did not file any action against PTA to void the latter’s title to the property.
Olivarez Realty Corporation admitted that they only paid P2,500,000.00. However, the
Corporation avers that 1) Castillo failed to assist them in filing an action against PTA;
2) Castillo did not clear the property of the tenants within six months, which prompted
the Corporation to withhold the subsequent payments to [fully pay] the purchase
price.
Issue:
Whether or not the parties’ contract is contract to sell, not a contract of conditional
sale.
Ruling:
The contract executed by Castillo and Olivarez Realty Corporation is a contract to sell.
Both contracts to sell and contracts of conditional sale, title to the property remains
with the seller until the buyer fully pays the purchase price. Both contracts are
subject to the positive suspensive condition of the buyer’s full payment of the
purchase price. However, in a contract of conditional sale, the buyer automatically
acquires title to the property upon full payment of the purchase price by operation of
law. While in a contract to sell, transfer of title to the prospective buyer is not
automatic. “The prospective seller [must] convey title to the property [through] a deed
of conditional sale.”
In the case at bar, Castillo reserved his title to the property and undertook to execute
a deed of absolute sale upon Olivarez Realty Corporation’s full payment of the
purchase price. Castillo has to execute a deed of absolute sale to Olivarez Realty
Corporation upon full payment of the purchase price, the transfer is not automatic.
Therefore, the contract entered into by Castillo and Olivarez Realty Corporation is
contract to sell because the title is not automatically transferred, Castillo needs
execute a deed of absolute sale before he can transfer it to Olivarez Realty Corporation.
Nota Bene:
In a contract of conditional sale, the buyer automatically acquires title to the property
upon full payment of the purchase price. This transfer of title is “by operation of law
without any further act having to be performed by the seller.” In a contract to sell,
transfer of title to the prospective buyer is not automatic. “The prospective seller
[must] convey title to the property [through] a deed of conditional sale.”
In contracts of conditional sale, laws on sale under the Civil Code shall govern. On the
other hand, contracts to sell are not governed by law on sales, but by Civil Code
provisions on conditional obligations.
The Supreme Court generally orders the reimbursement of the installments
paid for the property when setting aside contracts to sell. Especially, if the
property’s possession has not been delivered to the prospective buyer prior to
the transfer of title.
However, in the case at bar, Castillo delivered the possession of the property to
Olivarez Realty Corporation prior to the transfer of title.
Therefore, Supreme Court held that they cannot order the reimbursment of the
installments paid by the Corporation.
Sps. Agustin vs. De Vera (G.R. No. 233455, April 3, 2019)
Facts:
Gregorio De Vera and Spouses Hipolito and Lolita Agustin executed a document
entitled “Contract to Purchase and Sale”, with the following terms and conditions:
The half of the amount of the value of the property will be paid on the Vendor
upon the execution of this contract and the balance to be paid upon release of
the land from a bank.
That the Vendor obligates himself to have the said title of the land released from
mortgage from the bank within a period one month.
That immediately upon the payment of PI5,000.00 and after the execution of
this contract[,] the Vendee can take possession of the land and may
introduce improvements and [sic] they may desire.
That upon release of the title from the bank and upon payments of the balance
of P15,000.00 by the Vendee to the Vendor, the corresponding Deed of Sale will
be executed.
Spouses Agustin paid the partial and took possession of the land, and constructed
thereon their residential house.
Issue:
Whether or not the Contract to Purchase and Sale entered into by Hipolito and
Gregorio is a contract of sale or a contract to sell.
Ruling:
It is a contract of sale.
Article 1458 of the Civil Code provides that by a contract of sale, one of the contracting
parties obligates himself to transfer the ownership and to deliver a determinate thing,
and the other has to pay therefor the price certain in money. In the contract of sale,
the title passes to the vendee upon the delivery of the thing sold.
In the case at bar, upon partial payment of Spouses Agustin, the latter took
possession of the land and constructed thereon their residential house.
Therefore, the contract to purchase and sale is a contract of sale because actions of
Spouses Agustin in tendering their partial payment and De Vera’s authority to let
Spouses Agustin immediately took possession of the property constitutes the elements
of the contract of sale.
Sps. Godinez vs. Sps. Norman (G.R. No. 225449, Feb. 26, 2020)
Facts:
Spouses Godinez argues that in the case of Olivarez, the Court allowed the prospective
seller to retain the partial payment by the prospective buyers because the latter were
placed in full possession prior to the transfer of title. Spouses Godinez avers that
Normal is in full possession of the property as they stored furniture, household
appliances, and other properties, including a care taker that occupied the premises.
However, the Spouses Norman contends that Spouses Godinez miscontrued the
jurisprudence of Olivarez, stating that the law allowed the prospective seller to retain
the partial payment because the prospective buyer illegally retained possession of the
property for fourteen (14) years and illegally withheld payments of the purchase price.
Hence, this issue.
Issue:
Whether or not the spouse Norman is entitled to return of the full partial payment
made.
Ruling:
No, Spouses Norman is not entitled to return the full partial payments made.
In the jurisprudence of Olivarez, the Court allowed the prospective seller the retention
of the partial payments made by the prospective buyer because the latter were placed
in full possession prior to the transfer of title for fourteen (14) years.
Partial payments of the purchase price on a contract to sell should be returned to the
buyer if the sale does not push through. However, partial payments may be retained
and considered as rentals by the seller if the buyer was given possession or was able
to use the property prior to transfer of title.
In the present case, the Court held that Spouses Godinez turned over the possession
of the premises to Spouses Norman after the latter has made partial payments which
enabled them to place their properties therein and allowed a caretaker to occupy the
premises.
Therefore, the Supreme Court held that Spouses Norman is not entitled to return the
full partial payments made because the partial payments made are considered as
payment rentals for the possession of the property. However, the Court still ordered
Spouses Godinez to return the remaining of the partial payment.
Topic: Article 1459
Heirs of Arturo Reyes vs. Elena Socco-Beltran (G.R. No. 176474, Nov.27, 2008)
Facts:
Elena Socco-Beltran filed an application for the purchase of the subject property
before Department of Agrarian Reform, alleging that it was adjudicated in her favour.
However, Heirs of Arturo Reyes filed their protest before the DAR on the ground that
the subject property was sold by Socco-Beltran’s brother, Miguel Socco, in favour of
Arturo Reyes, as evidenced of contract to sell. Since then, they took physical
possession of the subject property.
DAR Regional Director granted the petition of Heirs of Reyes. However, DAR Secretary
reversed the same, which was affirmed by the Court of Appeals affirmed the decision
of lower court in approving the application of Socco-Beltran to purchase the subject
property located in Bataan.
Issue:
Whether or not the contract to sell executed by Miguel Socco in favour of Arturo Reyes
is valid.
Ruling:
No.
Article 1459 provides that the thing must be licit and the vendor must have a right to
transfer ownership thereof at the time it is delivered.
In the case at bar, Miguel Socco executed the contract to sell in favour of Arturo Reyes
even though he was not yet the owner of the property and was only expecting to
inherit it.
Therefore, the contract to sell executed by Miguel Socco in favour of Arturo Reyes is
not valid because the Civil Code clearly requires that the vendor must have a right to
transfer ownership, however, at the time when the sale was made, Miguel Soco was
not yet the owner of the property and was only expecting to inherit it. Hence, there
was no valid sale made.
Topic: Article 1461
Pichel vs. Alonzo (111 SCRA 341 [1982])
Facts:
Luis Pichel and Prudencio Alonzo entered into a deed of sale for the fruits of the
coconut trees in the land of Alonzo for seven (7) years.
Alonzo filed a petition of an annulment of the deed of sale on the ground that the deed
executed is prohibited under RA 477, which awarded Alonzo of the land.
The Regional Trial Court rendered its decision in favour of Alonzo and declared the
deed of sale as null and void as the legal purpose and intent of the parties thereto is to
execute a contract of lease.
Hence, this petition.
Issue:
Whether or not the contract executed of the parties is contract of lease, not contract of
sale.
Ruling:
No, the contract executed is a contract of sale of the coconut fruits.
Article 1461 of the New Civil Code provides that things having potential existence may
be the object of the contract of sale. In relation thereto, in contract of sale, the delivery
of the thing sold transfers ownership. On the other hand, in contract of lease, there is
no transfer of ownership because it is limited only to use and enjoyment of the thing.
In the case at bar, the parties executed a deed of sale for the fruits of the coconut trees
for seven years. The contract directly stated that the instrument is only for the matters
of harvesting coconut fruits by way of deed of sale.
Therefore, the contract executed is a contract of sale because pursuant to Article
1461, the things having potential existence may be the object of the contract of sale.
Further, it is evident in the words of contract that it is executed for purposes of
harvesting the future fruits of coconut trees by way of deed of sale.
Topic: Article 1466 of the New Civil Code
Gil Puyat & Sons, Inc. vs. Arco Amusement (72 Phil. 402 [1941])
Facts:
Arco filed a complaint for reimbursement of certain amounts allegedly overpaid by it
on account of the purchase price of sound reproducing equipment and machinery
ordered by the petitioner from the Starr Piano Company.
Arco found that Gil Puyat had obtained discounts from the Starr Piano Company,
however, Gil Puyat let Arco paid the list price instead of the discounted price.
The trial court held that the contract between Arco and Gonzales Puyat & Sons, Inc.
was contract to purchase and sell. However, Court of Appeals reversed the same and
ruled that the contract between the parties is contract of agency to sell. Gonzales
Puyat & Sons, Inc. acting as agent of Arco in the purchase of the equipment in
question. Likewise, the court ordered the Petitioners to pay the Respondent alleged
overpayments.
Issue:
Whether or not the contract between Gonzales Puyat & Sons, Inc., and Arco is a
contract to purchase and sell, and agency
Ruling:
The Supreme Court held that the contract executed is contract of sale. The Court
states that contract should have been include all the things they are supposed to have
been agreed upon. What does not appear on the face of the contract should be
regarded merely as dealer’s talk or trader’s talk.
In the csae at bar, the price given by the petitioners to the respondent which is
allegedly overpriced is considered valid because of the contract of sale.
The agent is exempted from all liability in the discharge of his commission provided he
acts in accordance with the instructions received from his principal and the principal
must indemnify the agent for all damages which the latter may incur in carrying out
the agency without fault or imprudence on his part.
Topic: Article 1469
Serra vs. Court of Appeals (229 SCRA 60 [1994])
Facts:
A promise to buy and sell a determinate thing for a price certain is reciprocally
demandable. An accepted unilateral promise to buy or to sell a determinate thing for a
price certain is binding upon the promisor if the promise is supported by a
consideration distinct from the price. (Article 1479, New Civil Code) The first is a
mutual promise and each has the right to demand from the other the fulfillment of the
obligation. While the second is merely an offer of one to another, which if accepted,
would create an obligation to the offer or to make good his promise, provided the
acceptance is supported by a consideration distinct from the price.
Issue:
Whether or not “not greater than P210 per square meter” is a certain or definite price.
Ruling:
Yes, Yes, not greater than P210 per square meter is a certain or definite price.
A price is considered certain if it is so with reference to another filing certain or when
the determination thereof is left to the judgment of a specified person or persons.
Contracts are to be construed according to the sense and meaning of the terms which
the parties themselves have used.
In the case at bar, there is evidence to show that the intention of the parties is to peg
the price at P210 per square meter. This was confirmed by petitioner himself in his
testimony when he said that he agreed to sell his property for the amount of P210 per
square meter.
Therefore, “not greater than P210 per square meter” is a certain or definite price as the
seller himself agreed for the said price in selling his property.
