G.R. No. 134971; March 25, 2004
HERMINIO TAYAG, petitioner, vs. AMANCIA LACSON, ROSENDO LACSON, ANTONIO LACSON, JUAN LACSON, TEODISIA LACSON-ESPINOSA and THE COURT OF APPEALS, respondents.

FACTS

The respondents, the Lacson family, were the registered owners of three tenanted agricultural parcels of land in Pampanga. On March 17, 1996, the tenants, comprising two groups of farmers and sub-tenants, individually executed Deeds of Assignment in favor of the petitioner, Herminio Tayag. These deeds assigned to Tayag their rights as tenants/tillers over their respective landholdings for a consideration of P50.00 per square meter, payable only “when the legal impediments to the sale of the property to the petitioner no longer existed.” Tayag also gained the exclusive right to buy the property if the landowners and tenants mutually agreed to sell. Tayag made partial payments to the tenants.
Subsequently, the tenants collectively decided to revoke their assignments to Tayag. Through a letter dated August 8, 1996, they notified Tayag of their decision to sell their rights directly to the landowners instead, citing a loss of trust due to a lawsuit Tayag had filed. Tayag then filed a complaint in the Regional Trial Court (RTC) to fix a period for him to pay the balance of the purchase price and to enjoin the tenants and landowners from transacting with others.

ISSUE

The core issue is whether the Deeds of Assignment executed by the tenants in favor of Tayag constitute a valid and enforceable contract of sale, or merely a contract to sell, thereby allowing the tenants to rescind their agreement before full payment.

RULING

The Supreme Court affirmed the Court of Appeals’ decision, ruling that the Deeds of Assignment did not create a perfected contract of sale but merely a contract to sell. The legal logic hinges on the distinction between these two contracts. In a contract of sale, title passes to the buyer upon delivery of the thing sold, and the non-payment of the price is a resolutory condition. In a contract to sell, ownership is retained by the seller and only passes to the buyer upon full payment of the purchase price, making payment a positive suspensive condition.
The Court examined the specific stipulations in the deeds. The payment of the full purchase price of P50.00 per square meter was expressly made contingent upon the removal of “legal impediments to the sale.” Furthermore, the deeds granted Tayag an exclusive right to buy the property only if and when the landowners and tenants mutually agreed to sell. These conditions clearly established that the transfer of ownership was not absolute and immediate but was subject to future uncertain events—the lifting of legal impediments and a future agreement to sell between the original parties. Therefore, no absolute obligation to sell on the part of the tenants, or to buy on the part of Tayag, arose upon the execution of the deeds. Since it was merely a contract to sell and the suspensive condition of full payment had not been fulfilled, the tenants, as sellers, retained ownership of their rights and were within their rights to rescind the agreement and sell those rights to the landowners instead. Tayag’s partial payments did not alter this character, as they were merely given in anticipation of a future sale.