G.R. No. 201883, 16 November 2016
Respondents, the Manzanos, were the registered owners of a parcel of land. On June 1, 2001, the Manzanos through their duly appointed attorney-in-fact and co-respondent Estabillo, executed a notarized deed of sale over the subject property with petitioners Domingo. Petitioners paid the reservation fee upon the execution of the agreement. Thereafter, they also made payments on several occasions. However, they failed to tender full payment of the balance when the deadline came.
Even then, Estabillo advised petitioners to continue their payments; thus, they made additional payments. All this time, the Manzanos remained in possession of the subject property. In December 2001, petitioners offered to pay the remaining balance, but Estabillo refused to accept payment; instead, he advised petitioners to await respondent Tita Manzano’s (Tita) arrival from abroad.
When Tita arrived, petitioners tendered payment of the balance, but the former refused to accept it. Instead, she told them that the property was no longer for sale and she was forfeiting their payments. For this reason, petitioners caused the annotation of an affidavit of adverse claim. Soon thereafter, petitioners discovered that respondent Aquino bought the subject property and a new title had been issued in her name. Their adverse claim was nevertheless carried over to Aquino’s new title.
Whether or not article 1544 of the civil code is not applicable to this case.
Article 1544 cannot apply to the present case. In a contract to sell, payment of the price is a positive suspensive condition, failure of which is not a breach of contract warranting rescission but rather just an event that prevents the prospective buyer from compelling the prospective seller to convey title. In other words, the non-fulfillment of the condition of full payment renders the contract to sell ineffective and without force and effect.x x x A contract to sell is one where the prospective seller reserves the transfer of title to the prospective buyer until the happening of an event, such as full payment of the purchase price. What the seller obliges himself to do is to sell the subject property only when the entire amount of the purchase price has already been 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’. x x x
Since failure to pay the price in full in a contract to sell renders the same ineffective and without force and effect, then there is no sale to speak of. Even petitioners’ posture that their annotation of an adverse claim on TCT No. 160752 is equivalent to registration or claim of ownership necessarily fails, on account of the fact that there was never a sale in their favor – and without a sale in their favor, they could not register or claim ownership of the subject property.
Thus, as between the parties to the instant case, there could be no double sale which would justify the application of Article 1544. Petitioners failed to pay the purchase price in full, while Aquino did, and thereafter she was able to register her purchase and obtain a new certificate of title in her name. As far as this Court is concerned, there is only one sale – and that is, the one in Aquino’s favor. “Since there is only one valid sale, the rule on double sales under Article 1544 of the Civil Code does not apply.”
*Case digest by Krishianne Louise C. Labiano, JD – 4, Andres Bonifacio College, SY 2019 – 2020