TORCUATOR vs. BERNABE G.R. No. 134219, June 08, 2005

Facts: The subject of this action is Lot 17, Block 5 of the Ayala Alabang Village, Muntinlupa, Metro-Manila, The lower court found that the above parcel of land was purchased by the Salvadors, from the developers of Ayala Alabang subject  to Conditions. The Salvadors sold the parcel of land to the Defendant. The Defendant, on the other hand, without making any improvement, contracted to sell the parcel of land to the Plaintiff who  thereafter had the plans of their house prepared and offered to pay the Bernabes for the land upon delivery of the sale contract. For one reason or another, the deed of sale was never consummated nor was payment on the said sale ever effected. Subseuqently, the Defendant sold the subject land to another. As a result, the Torcuators commenced the instant action against the Bernabes and Salvadors for Specific Performance or Rescission with Damages.

Issue: Whether the Contract entered by the parties was a Contract to Sell?

Held: Yes, The differences between a contract to sell and a contract of sale is that in a contract of sale, title passes to the buyer upon delivery of the thing sold, while in a contract to sell, ownership is reserved in the seller and is not to pass until the full payment of the purchase price is made. In the first case, non-payment of the price is a negative resolutory condition; in the second case, full payment is a positive suspensive condition. Being contraries, their effect in law cannot be identical. In the first case, the vendor has lost and cannot recover the ownership of the land sold until and unless the contract of sale is itself resolved and set aside. In the second case, however, the title remains in the vendor if the vendee does not comply with the condition precedent of making payment at the time specified in the contract.