G.R. No.

103577 October 7, 1996

ROMULO A. CORONEL, ALARICO A. CORONEL, ANNETTE A. CORONEL, ANNABELLE C.
GONZALES (for herself and on behalf of Florida C. Tupper, as attorney-in-fact), CIELITO
A. CORONEL, FLORAIDA A. ALMONTE, and CATALINA BALAIS MABANAG, petitioners,
vs.
THE COURT OF APPEALS, CONCEPCION D. ALCARAZ, and RAMONA PATRICIA
ALCARAZ, assisted by GLORIA F. NOEL as attorney-in-fact, respondents.

Facts:
The Coronels sold a parcel of land to Ramona Alcaraz with the following conditions.
1. Ramona will make a down payment of Fifty Thousand (P50,000.00) Pesos upon execution of the document
aforestated;
2. The Coronels will cause the transfer in their names of the title of the property registered in the name of their
deceased father upon receipt of the Fifty Thousand (P50,000.00) Pesos down payment;
3. Upon the transfer in their names of the subject property, the Coronels will execute the deed of absolute sale in
favor of Ramona and the latter will pay the former the whole balance of One Million One Hundred Ninety Thousand
(P1,190,000.00) Pesos.
Ramona Alcaraz made down payment of P50, 000 and the property was transferred to their names.
Thereafter, the Coronels sold the property to Catalina Mabanag after she paid P300, 000. For this reason,
Coronels canceled and rescinded the contract with Ramona by depositing the down payment paid by Concepcion in
the bank in trust for Ramona Patricia Alcaraz.
On February 22, 1985, Concepcion, et al., filed a complaint for specific performance against the Coronels and caused
the annotation of a notice of lis pendens at the back of TCT No. 327403.
Then, the Coronels executed a Deed of Absolute Sale over the subject property in favor of Catalina.
Subsequently, a new title was issued in the name of Catalina under the disputed TCT.
Issue:
Whether Receipt of Down Payment" embodied a perfected contract of sale
Held:
The petition is dismissed.
The Civil Code defines a contract of sale, thus:
Art. 1458. By the contract of sale one of the contracting parties obligates himself to transfer the
ownership of and to deliver a determinate thing, and the other to pay therefor a price certain in
money or its equivalent.
Sale, by its very nature, is a consensual contract because it is perfected by mere consent. The essential elements of
a contract of sale are the following:
a) Consent or meeting of the minds, that is, consent to transfer ownership in exchange for the
price;
b) Determinate subject matter; and
c) Price certain in money or its equivalent.
Under this definition, a Contract to Sell may not be considered as a Contract of Sale because the first essential
element is lacking. In a contract to sell, the prospective seller explicity reserves the transfer of title to the prospective
buyer, meaning, the prospective seller does not as yet agree or consent to transfer ownership of the property subject
of the contract to sell until the happening of an event, which for present purposes we shall take as the full payment of
the purchase price. What the seller agrees or obliges himself to do is to fulfill is promise to sell the subject property
when the entire amount of the purchase price is delivered to him. In other words the full payment of the purchase
price partakes of a suspensive condition, the non-fulfillment of which prevents the obligation to sell from arising and
thus, ownership is retained by the prospective seller without further remedies by the prospective buyer.
Thus, when petitioners declared in the said "Receipt of Down Payment" that they
Received from Miss Ramona Patricia Alcaraz of 146 Timog, Quezon City, the sum of Fifty
Thousand Pesos purchase price of our inherited house and lot, covered by TCT No. 1199627 of
the Registry of Deeds of Quezon City, in the total amount of P1,240,000.00.
without any reservation of title until full payment of the entire purchase price, the natural and ordinary idea
conveyed is that they sold their property. The agreement could not have been a contract to sell because the
sellers herein made no express reservation of ownership or title to the subject parcel of land.
G.R. No. 107207 November 23, 1995
VIRGILIO R. ROMERO, petitioner,
vs.
HON. COURT OF APPEALS and ENRIQUETA CHUA VDA. DE ONGSIONG, respondents.
Facts:
Private respondent Chua vda. De Ongsiong offered a parcel of lot to petitioner Romero. Private respondent
asked petitioner that he advance the amount of P50,000.00 which could be used in taking up an ejectment case
against the squatters, private respondent would agree to sell the property for only P800.00 per square
meter. Thereafter, a deed of conditional sale was contracted. One of the conditions stipulated is that the petitioner
can only pay the balance of the purchase price after the removal of the squatters in said property, then the deed of
absolute sale will be contracted.
Thereafter, private respondent sought to return P50,000 for the reason that she couldnt get rid of the
squatters.
A complaint was filed in the trial court for the rescission of the conditional sale contract but was dismissed.
On appeal, CA reversed the decision and rendered the contract null and void.
Issue:
May the vendor demand the rescission of a contract for the sale of a parcel of land for a cause traceable to
his own failure to have the squatters on the subject property evicted within the contractually-stipulated period?
Held:
The decision of CA is reversed and set aside.

In determining the real character of the contract, the title given to it by the parties is not as much significant
as its substance. For example, a deed of sale, although denominated as a deed of conditional sale, may be treated
as absolute in nature, if title to the property sold is not reserved in the vendor or if the vendor is not granted the right
to unilaterally rescind the contract predicated
on the fulfillment or non-fulfillment, as the case may be, of the prescribed condition.
A perfected contract of sale may either be absolute or conditional
12
depending on whether the
agreement is devoid of, or subject to, any condition imposed on the passing of title of the thing to be
conveyed or on the obligation of a party thereto. When ownership is retained until the fulfillment of a
positive condition the breach of the condition will simply prevent the duty to convey title from acquiring
an obligatory force. If the condition is imposed on an obligation of a party which is not complied with,
the other partymay either refuse to proceed or waive said condition (Art. 1545, Civil Code). Where, of
course, the condition is imposed upon theperfection of the contract itself, the failure of such condition
would prevent the juridical relation itself from coming into existence.
From the moment the contract is perfected, the parties are bound not only to the fulfillment of what has been
expressly stipulated but also to all the consequences which, according to their nature, may be in keeping with good
faith, usage and law. Under the agreement, private respondent is obligated to evict the squatters on the property. The
ejectment of the squatters is a condition the operative act of which sets into motion the period of compliance by
petitioner of his own obligation, i.e., to pay the balance of the purchase price. Private respondent's failure "to remove
the squatters from the property" within the stipulated period gives petitioner the right to either refuse to proceed with
the agreement or waive that condition in consonance with Article 1545 of the Civil Code.
16
This option clearly
belongs to petitioner and not to private respondent.
MANOLO P. FULE, petitioner,
vs.
THE HONORABLE COURT OF APPEALS, respondent.
Facts:
Fule was an agent of Towers Assurance Corporation who issued a check in favour of Roy Nadera. The
check was presented as a payment by Nadera but was dishonoured for the reason that said checking account was
closed already.
Petitioner waived his right to present evidence. The trial court convicted petitioner.
Held:
The decision is reversed and remand to trial court to be re-opened for proper reception of evidence.
G.R. No. 97347
JAIME G. ONG, petitioner, vs. THE HONORABLE COURT OF APPEALS, SPOUSES MIGUEL K. ROBLES and
ALEJANDRO M. ROBLES, respondents.
Facts:
Ong and spouses Robles executed an Agreement of Purchase and Sale for 2 parcels of land in
Quezon.
Petitioner Ong took possession of the subject parcels of land together with the piggery, building, ricemill,
residential house and other improvements thereon.
The petitioner complied to all the terms and conditions of the contract except that when it issued checks
to complete the payment, these were dishonoured due to insufficient funds. He made promise to pay but failed to
do so. Thereafter, the spouses filed a complaint for rescission of contract and recovery of properties with
damages.
The trial court rendered a decision in favour of spouses Robles and affirmed by CA.
Issue :
(1) whether the contract entered into by the parties may be validly rescinded under Article 1191 of the
New Civil Code; and (2) whether the parties had novated their original contract as to the time and
manner of payment.
Held:
The decision of CA is affirmed.
A careful reading of the parties Agreement of Purchase and Sale shows that it is in the
nature of a contract to sell, as distinguished from a contract of sale. In a contract of sale, the title
to the property passes to the vendee upon the delivery of the thing sold; while in a contract to
sell, ownership is, by agreement, reserved in the vendor and is not to pass to the vendee until full
payment of the purchase price.
[18]
In a contract to sell, the payment of the purchase price is a
positive suspensive condition, the failure of which is not a breach, casual or serious, but a
situation that prevents the obligation of the vendor to convey title from acquiring an obligatory
force.
[19]

Respondents in the case at bar bound themselves to deliver a deed of absolute sale and clean
title covering the two parcels of land upon full payment by the buyer of the purchase price of
P2,000,000.00. This promise to sell was subject to the fulfillment of the suspensive condition of
full payment of the purchase price by the petitioner. Petitioner, however, failed to complete payment of
the purchase price. The non-fulfillment of the condition of full payment rendered the contract to sell ineffective and
without force and effect.