ozoa

[ G.R. No. 179743, August 02, 2010 ]

HADJA FATIMA GAGUIL MAGOYAG, JOINED BY HER HUSBAND, HADJI HASAN MADLAWI MAGOYAG, PETITIONERS, VS. HADJI ABUBACAR MARUHOM, RESPONDENT.

Facts:

Respondent Hadji Abubakar Marahum sold to Petitioner Hadji Fatima Magoyag a certain two-storey market stall located in the public market of Marawi City. The sale was evidenced by a Deed of Assignment which also stated that although there was a sale, possession will remain with the seller Hadji Maruhom and that he will pay a monthly rental. However, after several years Hadji Maruhom suddenly stopped paying rentals. Petitioner demanded payment but respondent failed to fulfill his promise and refused to vacate the premises. On August 22, 1994 petitioner filed a complaint for recovery of possession and damages with the RTC of Marawi City.

Issue:   Did the Deed of Assignment prove the existence of  a sale?

            Is the sale valid?

Decision: The Deed of Assignment is a clear indication that the transaction was really of a sale and not of a loan with an equitable mortgage. The language in the document is crystal clear, unambiguous and  needs no further interpretation.

However, the validity of the sale lies not with the interpretation of the contract. The sale was ultimately declared as invalid because the respondent, Hadji Maruhom is not the owner of the property. Records show that it is the city of Marawi who owned the property and as a mere grantee, he was expressly prohibited from  selling, donating or otherwise alienating the said property without the consent of the city government. Violation of the condition shall automatically render the sale, null and void.

One cannot give what one does not have. “Nemo dat qoud non habet”.

[ G.R. No. 131679, February 01, 2000 ]

CAVITE DEVELOPMENT BANK AND FAR EAST BANK AND TRUST COMPANY, PETITIONERS, VS. SPOUSES CYRUS LIM AND LOLITA CHAN LIM AND COURT OF APPEALS, RESPONDENTS.

Facts:

Rodolfo Guansing obtained a loan from Cavite Development Bank(CDB)  and offered as security his real estate property. For failing to pay his loan the property was foreclosed and title was issued in the name of CDB.

Now here comes Lolita Chan Lim, the respondent on this case who offered to buy the property from CDB. Mrs. Lim paid P30,000.00 as option money and was issued receipt by CDB. However , Mrs. Lim later discovered that the title of the property is being disputed by Perfecto Guansing, the father of the mortgagee Rodolfo Guansing. In fact, in a separate case it was declared that Rodolfo fraudulently secured title to the said mortgaged property and title to it was restored to Perfecto . The decision has since become final and executory.

Aggrieved by what she considered a serious misrepresentation by CDB and its mother company FEBTC, on their ability to sell the subject property, filed an action for specific performance and damage against petitioners.

Issues: Was the sale between CDB and Mrs. Lim perfected?

Is CDB liable for damges?

Is the sale valid?

Decision: Contracts are not defined by the parties thereto but by the principles of law. In determining the nature of a contract, the courts are not bound by the name or title given to it by the contracting parties. In the case at bar, the sum of P30,000.00, although denominated in the offer to purchase as “option money’ is actually in the nature of  “earnest money’ or down payment when considered with the other terms of the offer.

It is because when Mrs. Lim offered to buy the property the 10% so called “option money” forms part of the purchase price as contemplated under Art. 1482 of the Civil Code. It is clear then that the parties in this case actually entered into a contract of sale, partially consummated as to the payment of the price.

CDB cannot invoke the defense that it is a mortgagee in good faith. It only applies to private individuals and not to banking institutions. They cannot be excused from the duty of exercising the due diligence required of banking institutions. It is standard practice for banks, before approving a loan, to investigate who are the real owners thereof. Banking is affected with public interest that is why they are expected to exercise more care and prudence than private individuals.

Considering CDB’s negligence it is therefore liable for damages.

As to its validity, the doctrine of “Nemo dat quod non habet” applies. One cannot give what one does not have. The seller not being the owner the sale is void.

 

manlangit digest

[ G.R. NO. 4386, FEBRUARY 24, 1909 ]

CHANG YONG TEK, PLAINTIFF AND APPELLEE, VS. GENEROSA SANTOS, DEFENDANT AND APPELLANT.

 

FACTS:

The plaintiff sold to the defendant a certain quantity of tobacco, amounting in all to the sum of P894, P442 of the said amount was to be paid at the end of January, 1904, and that P452 of said amount was to be paid at the end of the month of September, 1905.  No part of the said amount of P894 having been paid, the plaintiff commenced an action on the 24th of January, 1907, for its recovery.

The only defense presented by the defendant was that the tobacco delivered by the plaintiff was not of good quality.The record does not show that the defendant had made any complaint to the plaintiff concerning the quality of the tobacco or that it was not the kind of tobacco which she had purchased, until after the present action had been commenced. Neither does the record disclose that the plaintiff  made any false representations with reference to the quality or kind of tobacco sold.  There is no attempt to show  that the plaintiff undertook to warrant the quality of the tobacco.

ISSUE:

Whether or not the buyer is liable for the price of the thing delivered?

RULING:

In the absence of an express warranty, a vendor of merchandise only warrants;

First.  The legal and peaceable possession of the thing sold; and

Second.  That there are no hidden faults or defects therein.  (Art. 1474, Civil Code.)

It not being proven that the plaintiff made any warranty or any misrepresentations with reference to the quality of the tobacco in question, and it having been proven that the defendant had an opportunity to and did examine the tobacco in question at the time of purchase and not having made any objection whatever' until after a lapse of more than three years and not then until after an action had been brought, and making no objection whatever as to the price agreed upon, nor as to the quantity of the tobacco delivered, in our opinion she should be held liable for the payment of the amount agreed upon.

 

 

        SECOND DIVISION

[ G.R. NO. 81541, OCTOBER 04, 1989 ]

PEOPLE OF THE PHILIPPINES, PETITIONER, VS. THE REGIONAL TRIAL COURT OF MANILA, PRESIDED BY HON. JUDGE RICARTE M. TOGONON AND APOLINARIO BATACLAN, JULIA BATACLAN, FRANCISCO SAGUILAYAN, ZENAIDA P. BATACLAN, FRANCISCA BATACLAN, NAPOLEON BATACLAN, LILIBETH BATACLAN AND ELEAZAR BATACLAN, RESPONDENTS. 

 

FACTS:

On September 20, 1980, the private respondents sold several parcels of land located in Dasmariñas, Cavite, in favor of Ricardo Silverio. These parcels were at that time registered in the names of the private respondents. One of the parcels, covered by Transfer Certificate of Title No. T-110942 of the Registry of Deeds for the province of Cavite, is the subject matter of a litigation between the private respondents and Pedro Caragao and his co-owners for reconveyance and cancellation of title and damages. Pedro Caragao then caused the annotation of a notice of lis pendens at the back of the original of the Transfer Certificate of Title (T.C.T.) of the parcel of land under litigation, on file in the Register of Deeds for the province of Cavite, without the knowledge of the private respondents. Hence, the owners’ (private respondents') copy of the title in question did not bear any annotation of such notice of lis pendens.

When the private respondents sold the two parcels of land to Silverio, including the one under litigation for reconveyance between Caragao and the private respondents, they warranted that the properties are "free from all liens and encumbrances whatsoever." 

On the basis of this express warranty vis-a-vis the notice of lis pendens duly annotated at the back of the original of the Transfer Certificate of Title (T.C.T.-110942) on file in the Registry of Deeds for the Province of Cavite. Assistant Fiscal Napoleon V. Dilao of the City of Manila filed an information for "Falsification of Public Document" against the private respondents. 

ISSUE:

Whether or not a notice of lis pendens is a lien or encumbrance within the contemplation of criminal law, in particular, the crime of falsification of public document?

 

RULING:

 

Revised Rules of Court, Rule 14, Section 24, thus:

SEC. 24. Notice of lis pendens.-- In an action affecting the title or the right of possession of real property, the plaintiff, at the time of filing the complaint, and the defendant, at the time of filing his answer, when affirmative relief is claimed in such answer, or at any time afterwards, may record in the office of the registrar of deeds of the province in which the property is situated a notice of the pendency of the action, containing the names of the parties and the object of the action or defense, and a description of the property in that province affected thereby. From the time only of filing such notice for record shall a purchaser, or incumbrancer of the property affected thereby, be deemed to have constructive notice of the pendency of the action, and only of its pendency against parties designated by their real names.

Lis pendens is a Latin term which literally means a pending suit^[12] or a pending litigation while a notice of lis pendens is an announcement to the whole world that a particular real property is in litigation, serving as a warning that one who acquires an interest over the said property does so at his own risk, or that he gambles on the result of the litigation over the said property.^[13] It is but a signal to the intending buyer or mortgagee to take care or beware and to investigate the prospect or non-prospect of the litigation succeeding before he forks down his money.

Notice of Lis pendens has been conceived and, more often than not, availed of, to protect the real rights of the registrant while the case involving such rights is pending resolution or decision. With the notice of lis pendens duly recorded, and remains uncancelled, he could rest secure that he would not lose the property or any part of it during the litigation.

"[T]he doctrine of lis pendens is founded upon reason of public policy and necessity, the purpose of which is to keep the subject matter of the litigation within the power of the Court until the judgment or the decree shall have been entered; otherwise, by successive alienations pending the litigation, its judgment or decree shall be rendered abortive and impossible of execution."^[14] The lower court is therefore correct in ruling that a notice of lis pendens being a mere cautionary notice to a prospective buyer or mortgagee of a parcel of land under litigation, then it imposes no obligation on the owner, but on the prospective buyer. It cannot conceivably be the “lien or encumbrance” contemplated by law.

On the other hand, a "lien" is a charge on property usually for the payment of some debt or obligation.^[15] A “lien” is a qualified right or a proprietary interest, which may be exercised over the property of another. It is a right which the law gives to have a debt satisfied out of a particular thing.^[16] It signifies a legal claim or charge on property, either real or personal, as a collateral or security for the payment of some debt or obligation.

Similarly, an "encumbrance is a burden upon land, depreciative of its value, such as a lien, easement, or servitude, which, though adverse to (the) interest of (the) landowner, does not conflict with his conveyance of (the) land in fee."^[17]

The following are considered encumbrances: A claim, lien, charge, or liability attached to and binding real property; e.g., a mortgage, judgment lien, lease, security interest, easement or right of way, accrued and unpaid taxes.^[18] A lien is already an existing burden or charge on the property while a notice of lis pendens, as the very term connotes, is only a notice or warning that a claim or possible charge on the property is pending determination by the court.

Consequently, the effect of a notice of lis pendens is not to establish an actual lien on the property affected. All that it does is to give notice to third persons and to the whole world that any interest they may acquire in the property pending litigation will be subject to the eventuality or result of the suit. It follows to reason, therefore, that the mere failure to state in a public document, as a notarized deed of sale, the existence of a notice of lis pendens does not constitute falsification of a public document under Article 172 of the Revised Penal Code. This is specially true in the case at bar because the notice of lis pendens is annotated only at the back of the original of the T.C.T. in the Registry of Deeds; it does not appear at the back of the owner's copy of the same T.C.T.  Be that as it may, not all claims against a property can be considered a lien within the contemplation of law. First, such claims must be in satisfaction of some debt or performance of an act under a contract. Second, the legal right to enforce such payment or performance of an act be anchored on an existing or demandable obligation and not merely dependent upon the result of a pending litigation where the claims of the parties are not yet finally determined. Such claims in a pending litigation only ripen to a "lien" within the contemplation of law when there is already a valid judgment rendered because then it becomes a judgment or judicial lien.

WHEREFORE, finding no reversible error committed by respondent court, the petition is hereby DISMISSED,

BETH CAMPOMANES

BETH CAMPOMANES

Nemo  dat quod non habet

PURITA PAHUD VS. CA
[ G.R. No. 160346, August 25, 2009 ]

FACTS:

Spouses Pedro San Agustin and Agatona Genil were able to acquire a 246-square meter parcel of land situated in Barangay Anos, Los Baños, Laguna and covered by Original Certificate of Title . Agatona Genil  and  Pedro San Agustin died  ,( both died intestate) survived by their eight (8) children: respondents,  Eufemia, Raul, Ferdinand, Zenaida, Milagros, Minerva, Isabelita and Virgilio.

 Eufemia, Ferdinand and Raul executed a Deed of Absolute Sale of Undivided Shares conveying in favor of petitioners (the Pahuds, for brevity) their respective shares . Eufemia also signed the deed on behalf of her four (4) other co-heirs, namely: Isabelita on the basis of a special power of attorney , and also for Milagros, Minerva, and Zenaida but without their apparent written authority. The deed of sale was also not notarized.

 The Pahuds paid the accounts into the Los Baños Rural Bank where the subject property was mortgaged.  The bank issued a release of mortgage and turned over the owner's copy of the OCT to the Pahuds, the Pahuds made more payments to Eufemia and her siblings.  When Eufemia and her co-heirs drafted an extra-judicial settlement of estate to facilitate the transfer of the title to the Pahuds, Virgilio refused to sign it.

 Virgilio's co-heirs filed a complaint  for judicial partition of the subject property before the RTC of Calamba, Laguna.In the course of the proceedings for judicial partition, a Compromise Agreement was signed with seven (7) of the co-heirs agreeing to sell their undivided shares to Virgilio .. The compromise agreement was, however, not approved by the trial court because Atty. Dimetrio Hilbero, lawyer for Eufemia and her six (6) co-heirs, refused to sign the agreement because he knew of the previous sale made to the Pahuds.

 Eufemia acknowledged having received the payments from Virgilio. Virgilio then sold the entire property to spouses Isagani Belarmino and Leticia Ocampo (Belarminos) . The Belarminos immediately constructed a building on the subject property.

Alarmed and bewildered by the ongoing construction on the lot they purchased, the Pahuds immediately confronted Eufemia who confirmed to them that Virgilio had sold the property to the Belarminos.Then  the Pahuds filed a complaint in intervention in the pending case for judicial partition.

Issue:

1.       Whether or not  the sale of the subject property by Eufemia and her co-heirs to the Pahuds is valid and enforceable.

2.       Whether or not the sale by co-heirs to Virgilio is void.

3.       Whether or not the sale of Virgilio to Belarminos is valid.

Ruling:

1.       The transaction needs for qualification:

           First: the sale made by Eufemia, Isabelita and her two brothers to the Pahuds  should be valid only with respect to the 4/8 portion of the subject property. Second;  the sale with respect to the 3/8 portion, representing the shares of Zenaida, Milagros, and Minerva, is void because Eufemia could not dispose of the interest of her co-heirs in the said lot absent any written authority from the latter, as explicitly required by law. It is true also there is no special power, they can file an annulment of the sale, but the true facts of which the seven admitted that they sold their shares to pahuds, they cannot assail the validity of the transaction. Instead, they just remain silent , because by allowing them to do so would be tantamount  to giving premium to their three (3) sisters” dishonest and fraudulent deed. Thus their silence of the issue bars from a making for a contrary claim and they are stopped from impugning the  validity of the sale.

 While the sale with respect to the 3/8 portion is void by express provision of law and not susceptible to ratification. The validity of the said transaction cannot be corrected on the basis of common law principle of estoppel.

The law provides:

When a sale of a piece of land or any interest therein is through an agent, the authority of the latter shall be in writing; otherwise, the sale shall be void.

 a special power of attorney is necessary for an agent to enter into a contract by which the ownership of an immovable property is transmitted or acquired, either gratuitously or for a valuable consideration.

The authority of an agent to execute a contract of sale of real estate must be conferred in writing and must give him specific authority, either to conduct the general business of the principal or to execute a binding contract containing terms and conditions which are in the contract he did execute. A special power of attorney is necessary to enter into any contract by which the ownership of an immovable is transmitted or acquired either gratuitously or for a valuable consideration. The express mandate required by law to enable an appointee of an agency  in general terms to sell must be one that expressly mentions a sale or that includes a sale as a necessary ingredient of the act mentioned. For the principal to confer the right upon an agent to sell real estate, a power of attorney must so express the powers of the agent in clear and unmistakable language. When there is any reasonable doubt that the language so used conveys such power, no such construction shall be given the document.

In  the absence of a written authority to sell a piece of land is, ipso jure, void, precisely to protect the interest of an unsuspecting owner from being prejudiced by the unwarranted act of another.

2.       the subsequent sale made by the seven co-heirs to Virgilio was void because they no longer had any interest over the subject property which they could alienate at the time of the second transaction. Nemo dat quod non habet.  Virgilio, however, could still alienate his 1/8 undivided share to the Belarminos.

3.       The sale to Bilarminos is not valid, they did not purchased the property from Virgilio in good faith.  the Belarminos were fully aware that the property was registered not in the name of the immediate transferor, Virgilio, but remained in the name of the mother title.  This fact alone is sufficient impetus to make further inquiry and, thus, negate their claim that they are purchasers for value in good faith.

 They knew that the property was still subject of partition proceedings before the trial court, and that the compromise agreement signed by the heirs was not approved by the RTC following the opposition of the counsel for Eufemia and her six other co-heirs.

 As a general rule, a purchaser of a real property is not required to make any further inquiry beyond what the certificate of title indicates on its face. But the rule excludes those who purchase with knowledge of the defect in the title of the vendor or of facts sufficient to induce a reasonable and prudent person to inquire into the status of the property.  Such purchaser cannot close his eyes to facts which should put a reasonable man on guard, and later claim that he acted in good faith on the belief that there was no defect in the title of the vendor.  His mere refusal to believe that such defect exists, or his obvious neglect by closing his eyes to the possibility of the existence of a defect in the vendor's title, will not make him an innocent purchaser for value, if afterwards it turns out that the title was, in fact, defective.  In such a case, he is deemed to have bought the property at his own risk, and any injury or prejudice occasioned by such transaction must be borne by him.

 The Belarminos, being transferees pendente lite, are deemed buyers in mala fide, and they stand exactly in the shoes of the transferor and are bound by any judgment or decree which may be rendered for or against the transferor. Furthermore, had they verified the status of the property by asking the neighboring residents, they would have been able to talk to the Pahuds who occupy an adjoining business establishment and would have known that a portion of the property had already been sold.

              The supreme court reversed and set aside the ruling of the CA and reinstated of the RTC with modification.

Nemo dat quod non habet

[ G.R. No. 187056, September 20, 2010 ]

JARABINI G. DEL ROSARIO,  VS. ASUNCION G. FERRER

Facts:
 Leopoldo and Guadalupe Gonzales executed a document entitled "Donation Mortis Causa" in favor of their two children, Asuncion and Emiliano, and their granddaughter, Jarabini (daughter of their predeceased son, Zoilo)126 sq.metter lot and house in Manila in equal shares,the deed of donation Stated:

“ It is our will that this Donation Mortis Causa shall be irrevocable and shall be respected by the surviving spouse .It is our will that Jarabini Gonzales-del Rosario and Emiliano Gonzales will continue to occupy the portions now occupied by them.
It is further our will that this DONATION MORTIS CAUSA shall not in any way affect any other distribution of other properties belonging to any of us donors whether testate or intestate and where ever situated.
It is our further will that any one surviving spouse reserves the right, ownership, possession and administration of this property herein donated and accepted and this Disposition and Donation shall be operative and effective upon the death of the DONORS.”

 The deed had no attestation clause and was witnessed by only two persons.  The named donees, however, signified their acceptance of the donation on the face of the document.

Guadalupe, the donor wife died ; later , Leopoldo, the donor husband, executed a deed of assignment of his rights and interests in subject property to their daughter Asuncion.  Leopoldo then also  died .

Jarabini filed a "petition for the probate of the  deed of donation mortis causa" before the Regional Trial Court (RTC) of Manila.  Asuncion opposed the petition, invoking his father Leopoldo's assignment of his rights and interests in the property .

Issue:

1.        Whether or not the assignment of rights and interest of the property is valid.

2.       Whether or not the donation is mortis causa or intervivos.

Ruling:

1.        Leopoldo's subsequent assignment of his rights and interests in the property to Asuncion should be regarded as void for, by then, he had no more rights to assign.  He could not give what he no longer had.  Nemo dat quod non habet. , because Leopoldo is no longer the owner of the property by way of donation to his heirs (as donation inter vivos).

  a donation inter vivos made effective upon its execution by the donors and acceptance thereof by the donees, and immediately transmitting ownership of the donated property to the latter, thus precluding a subsequent assignment thereof by one of the donors.

2.       the validity of the document as a donation inter vivos. Since the donation is irrevocable made the document as  donation inter vivos, it was immediately operative and final. , such kind of donation is deemed perfected from the moment the donor learned of the donee's acceptance of the donation.  The acceptance makes the donee the absolute owner of the property donated. Even it was stated donation mortis causa refers only to the donor s style but  the intention of the donor shall be respected as to the face of  the  donation is irrevocable.

However the donors reserved the "right, ownership, possession, and administration of the property" and made the donation operative upon their death.,by   such reservation (reddendum) even  it is irrevocable donation simply means that the donors parted with their naked title, maintaining only beneficial ownership of the donated property while they lived.

ellis report

G.R. No. 107797, August 26, 1996

SALVATIERRA VS. CA

FACTS:

            Enrique Salvatierra died intestate and without any issue. He was survived by his legitimate brothers: Tomas, Bartolome, Venancio and Macario, and sister Marcela. His estate consisted of three parcels of land.

An Extrajudicial Partition with Confirmation of Sale was executed by and among the surviving legal heirs and descendants of Enrique Salvatierra, which consisted of Lot No. 25, 26 and 27. By virtue of the sale executed by Marcela in favor of Venancio, the latter now owns 2/5 shares of the estate. By virtue of the sale by Bartolome’s heirs Catalina and Ignacia, of his undivided shares to Tomas, now deceased, represented by his widow, Catalina Azarcon, the latter now owns 2/5 shares in the said estate. Anselmo Salvatierra represented his father Macario, who had already died.

Thereafter, Venancio sold the whole of Lot No. 27 and a 149-sq. m. portion of Lot 26 to herein respondent spouses Lino Longalong and Paciencia Mariano. The Longalongs took possession of the said lots. It was discovered in 1982 (through a relocation survey) that the 149 sq. m. portion of Lot No. 26 was outside their fence. It turned out that Anselmo Salvatierra was able to obtain a title, Original Certificate of Title No. 0-4221 in his name, the title covering the whole of Lot. No. 26 which has an area of 749 sq. m.

Private respondents Longalong then filed a case with the RTC for the reconveyance of the said portion of Lot 26.

ISSUES:

1.      Whether or not there was a double sale.

2.      Which prescriptive period for actions for annulment should prevail, Art. 1391 of the New Civil Code which limits the filing of actions to four (4) years or Art. 1144 of the same Code which limits the period of the filing of actions on certain grounds to ten years?

RULING:

Petitioners rely on the theory that this is a case of double sale case of Lot No. 26 to both petitioners and respondents Longalong, et. al. A perusal of the records and evidence, reveals otherwise. Both parties did not dispute the existence and contents of the Extrajudicial Partition with Confirmation of Sale, as both presented them as their respective exhibits. The parties may not have realized it, but the deciding factor of this dispute is this very document itself. It is very clear therein that Macario Salvatierra’s share in the estate of the deceased Enrique Salvatierra is only 405 sq. m. out of the 749 sq. m. comprising Lot No. 26. Since Venancio Salvatierra, under this document, is to get a portion of Lot No. 26 in addition to Lot No. 27, then it follows that Venancio is entitled to the remaining 344 sq. m. of Lot No. 26, after deducting the 405 sq. m. share of Macario.      

The applicable provision in the case at bar is Art. 1144 of the New Civil.  Art. 1391 of the same code, referred to by petitioners is not in point. This article must be read in conjunction with Art. 1390 which refers to voidable contracts. This case at hand involves fraud committed by petitioner Anselmo Salvatierra in registering the whole of Lot No. 26 in his name, with evident bad faith. In effect, an implied trust was created by virtue of Art. 1456.

In this connection, we hold that an action for reconveyance of registered land based on an implied trust may be barred by laches. The prescriptive period for such actions is ten (10) years from the date the right of action accrued. The complaint for reconveyance was filed by the Longalong spouses on November 22, 1985, only five (5) years after the issuance of the O.C.T. No. 0-4221 over Lot No. 26 in the name of Anselmo Salvatierra. Hence prescription has not yet set in.

G.R. NO. 124242, January 21, 2005

SAN LORENZO DEVELOPMENT CORPORATION VS. CA

FACTS:

On 20 August 1986, the Spouses Lu purportedly sold the two parcels of land to respondent Pablo Babasanta. The latter made a downpayment of fifty thousand pesos (P50,000.00) as evidenced by a memorandum receipt issued by Pacita Lu of the same date. Several other payments totaling two hundred thousand pesos (P200,000.00) were made by Babasanta. He demanded the execution of a Final Deed of Sale in his favor so he may effect full payment of the purchase price; however, the spouses declined to push through with the sale.  They claimed that when he requested for a discount and they refused, he rescinded the agreement. Thus, Babasanta filed a case for Specific Performance.

On the other hand, San Lorenzo Development Corporation (SLDC) alleged that on 3 May 1989, the two parcels of land involved, namely Lot 1764-A and 1764-B, had been sold to it in a Deed of Absolute Sale with Mortgage. It alleged that it was a buyer in good faith and for value and therefore it had a better right over the property in litigation.

ISSUE:

Who between SLDC and Babasanta has a better right over the two parcels of land?

RULING:

An analysis of the facts obtaining in this case, as well as the evidence presented by the parties, irresistibly leads to the conclusion that the agreement between Babasanta and the Spouses Lu is a contract to sell and not a contract of sale.

The receipt signed by Pacita Lu merely states that she accepted the sum of fifty thousand pesos (P50,000.00) from Babasanta as partial payment of 3.6 hectares of farm lot. While there is no stipulation that the seller reserves the ownership of the property until full payment of the price which is a distinguishing feature of a contract to sell, the subsequent acts of the parties convince us that the Spouses Lu never intended to transfer ownership to Babasanta except upon full payment of the purchase price.

Babasanta’s letter dated 22 May 1989 was quite telling. He stated therein that despite his repeated requests for the execution of the final deed of sale in his favor so that he could effect full payment of the price, Pacita Lu allegedly refused to do so.  In effect, Babasanta himself recognized that ownership of the property would not be transferred to him until such time as he shall have effected full payment of the price. Doubtlessly, the receipt signed by Pacita Lu should legally be considered as a perfected contract to sell.

The perfected contract to sell imposed upon Babasanta the obligation to pay the balance of the purchase price. There being an obligation to pay the price, Babasanta should have made the proper tender of payment and consignation of the price in court as required by law.  Glaringly absent from the records is any indication that Babasanta even attempted to make the proper consignation of the amounts due, thus, the obligation on the part of the sellers to convey title never acquired obligatory force.

There was no double sale in this case because the contract in favor of Babasanta was a mere contract to sell; hence, Art. 1544 is not applicable. There was neither actual nor constructive delivery as his title is based on a mere receipt. Based on this alone, the right of SLDC must be preferred.