G.R. No. 186014, 26 June 2013, 699 SCRA 745

FACTS:

Petitioner is a member of the national and cultural community belonging to the Maguindanaon tribe of Isulan, Province of Sultan Kudarat and the registered owner of parcel of land located at Isulan, Sultan Kudarat, with an area of 20,030 square meters.

Sometime in 1962, a two-hectare portion of the property was sold by the petitioner to the Municipality of Isulan, Province of Sultan Kudarat through then Isulan Mayor DatuAmpatuan under a Deed of Sale to be used purposely and exclusively as a Government Center site. The respondent immediately took possession of the property and began construction of the municipal building.

39 years later, the petitioner, together with his wife, Patao Talipasan, filed a civil action for Recovery of Possession of Subject Property and/or Quieting of Title thereon and Damages against the respondent, represented by its Municipal Mayor, et al.

In his complaint, the petitioner alleged, among others, that the agreement was one to sell, which was not consummated as the purchase price was not paid.

In its answer, the respondent denied the petitioner’s allegations, claiming, among others: that the petitioner’s cause of action was already barred by laches; that the Deed of Sale was valid; and that it has been in open, continuous and exclusive possession of the property for 40 years.

ISSUE:

Whether or not there was a contract of sale or a contract to sell;

RULING:

The Deed of Sale is a Valid Contract of Sale.

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 therefore a price certain in money or its equivalent.The elements of a contract of sale are:

(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.

A contract to sell, on the other hand, is a bilateral contract whereby the prospective seller, while expressly reserving the ownership of the subject property despite delivery thereof to the prospective buyer, binds himself to sell the said property exclusively to the prospective buyer upon fulfillment of the condition agreed upon, that is, full payment of the purchase price.

In a contract of sale, the title to the property passes to the buyer upon the delivery of the thing sold, whereas in a contract to sell, the ownership is, by agreement, retained by the seller and is not to pass to the vendee until full payment of the purchase price.

The Deed of Sale executed by the petitioner and the respondent is a perfected contract of sale, all its elements being present. There was mutual agreement between them to enter into the sale, as shown by their free and voluntary signing of the contract. There was also an absolute transfer of ownership of the property by the petitioner to the respondent as shown in the stipulation: “x xx I petitioner hereby sell, transfer, cede, convey and assign as by these presents do have sold, transferred, ceded, conveyed and assigned, x xx.”There was also a determine subject matter, that is, the two-hectare parcel of land as described in the Deed of Sale. Lastly, the price or consideration was to be paid after the execution of the contract.

The fact that no express reservation of ownership or title to the property can be found in the Deed of Sale bolsters the absence of such intent, and the contract, therefore, could not be one to sell. Had the intention of the petitioner been otherwise, he could have: (1) immediately sought judicial recourse to prevent further construction of the municipal building; or (2) taken legal action to contest the agreement. The petitioner did not opt to undertake any of such recourses.

*Case digest by Earl M. Acoymo, JD-IV, Andres Bonifacio Law School, SY 2019-2020