Portic v. Cristobal 456 SCRA 577, April 22, 2005

FACTS:

In 1968, spouses Ricardo and FermaPortic acquired a parcel of land with a 3 door apartment from spouses Alcantara even though they’re aware that the land was mortgaged to the SSS. Portic defaulted in paying SSS. The Portics then executed a contract with Anastacia Cristobal and the latter agreed to buy the said property for P200k. Cristobal’s down payment was P45k and she also agreed to pay SSS.

Thereafter, a transfer Certificate of Title was executed in favor of Cristobal. However, on May 20, 1996, petitioners demanded from respondent the alleged unpaid balance of P55, 000.00, but the latter refused to pay. This prompted the petitioners to file this instant civil case against respondent to remove the cloud on the title. Petitioners claimed that they sold the subject property to respondent on the condition that respondent shall pay the balance on or before May 22, 1985; that in case of failure to pay, the sale shall be considered void and petitioners shall reimburse respondent of the amounts already paid; that respondent failed to fully pay the purchase price within the period; that on account of this failure, the sale of the subject property by petitioners to respondent is void.

Respondent on her part claimed that her title over the subject property is already indefeasible; that the true agreement of the parties is that embodied in the Deed of Absolute Sale with Assumption of Mortgage; that respondent had fully paid the purchase price; that respondent is the true owner of the subject property; that petitioners claim is already barred by laches.

ISSUE:

Whether or not there was a contract of sale in this case.

RULING:

NO. What transpired between the parties was a contract to sell. The provision of the contract characterizes the agreement between the parties as a contract to sell, not a contract of sale.  Ownership is retained by the vendors, the Portics; it will not be passed to the vendee, the Cristobals, until the full payment of the purchase price.  Such payment is a positive suspensive condition, and failure to comply with it is not a breach of obligation; it is merely an event that prevents the effectivity of the obligation of the vendor to convey the title.  In short, until the full price is paid, the vendor retains ownership. Also, the mere issuance of the Certificate of Title in favor of Cristobal did not vest ownership in her. Neither did it validate the alleged absolute purchase of the lot.  Registration does not vest, but merely serves as evidence of title.

Digest Credit: Rhymee Lanuzo