The spouses Gomer and Leonor Ramos (“spouses Ramos”) own a parcel of land, consisting of 1,883 square meters, covered by Transfer Certificate of Title (“TCT”) No. 16535 of the Register of Deeds of Cagayan de Oro City. On 18 February 1980, the spouses Ramos made an agreement with the spouses Santiago and MindaHeruela (“spouses Heruela”) covering 306 square meters of the land (“land”). According to the spouses Ramos, the agreement is a contract of conditional sale. The spouses Heruela allege that the contract is a sale on installment basis. The spouses Ramos filed a complaint for Recovery of Ownership with Damages against the spouses Heruela.The spouses Ramos allege that out of the ₱15,300 consideration for the sale of the land, the spouses Heruela paid only ₱4,000. The last installment that the spouses Heruela paid was on 18 December 1981. The spouses Ramos assert that the spouses Heruela’s unjust refusal to pay the balance of the purchase price caused the cancellation of the Deed of Conditional Sale. In June 1982, the spouses Ramos discovered that the spouses Heruela were already occupying a portion of the land. Cherry and Raymond Pallori (“spouses Pallori”), daughter and son-in-law, respectively, of the spouses Heruela, erected another house on the land. The spouses Heruela and the spouses Pallori refused to vacate the land despite demand by the spouses Ramos.
The spouses Heruela further allege that the 306 square meters specified in the contract was reduced to 282 square meters because upon subdivision of the land, 24 square meters became part of the road. The spouses Heruela claim that in March 1982, they expressed their willingness to pay the balance of ₱11,300 but the spouses Ramos refused their offer.
The trial court ruled that the contract is a sale by installment and ordered to execute the corresponding Deed of Sale in favor of defendants after the latter have paid the remaining balance of Eleven Thousand and Three Hundred Pesos (₱11,300.00).
Whether or not ownership of the land was transferred to the respondent-spouses Heruela.
Article 1458 of the Civil Code provides that a contract of sale may be absolute or conditional. A contract of sale is absolute when title to the property passes to the vendee upon delivery of the thing sold.A deed of sale is absolute when there is no stipulation in the contract that title to the property remains with the seller until full payment of the purchase price. The sale is also absolute if there is no stipulation giving the vendor the right to cancel unilaterally the contract the moment the vendee fails to pay within a fixed period.In a conditional sale, as in a contract to sell, ownership remains with the vendor and does not pass to the vendee until full payment of the purchase price.The full payment of the purchase price partakes of a suspensive condition, and non-fulfillment of the condition prevents the obligation to sell from arising.
In this case, the agreement of the parties is embodied in a one-page, handwritten document. The document does not contain the usual terms and conditions of a formal deed of sale. The original document, elevated to this Court as part of the Records, is torn in part. Only the words “LMENT BASIS” is legible on the title. The names and addresses of the parties and the identity of the property cannot be ascertained.
The records show that the spouses Heruela did not immediately take actual, physical possession of the land. According to the spouses Ramos, in March 1981, they allowed the niece of the spouses Heruela to occupy a portion of the land. Indeed, the spouses Ramos alleged that they only discovered in June 1982 that the spouses Heruela were already occupying the land. In their answer to the complaint, the spouses Heruela and the spouses Pallori alleged that their occupation of the land is lawful because having made partial payments of the purchase price, “they already considered themselves owners” of the land. Clearly, there was no transfer of title to the spouses Heruela. The spouses Ramos retained their ownership of the land. This only shows that the parties did not intend the transfer of ownership until full payment of the purchase price.
Digest Credit: Mac Burdeos Camposuelo