G.R. No. 145470. December 9, 2005.
SPS. LUIS V. CRUZ and AIDA CRUZ, Petitioners, vs. SPS. ALEJANDRO FERNANDO, SR., and RITA FERNANDO, Respondents.

FACTS

Respondents, spouses Fernando, filed an accion publiciana against petitioners, spouses Cruz, to recover possession of a property in Bulacan. Respondents claimed ownership by virtue of a 1987 Deed of Sale from the original owners, the Gloriosos. They alleged that prior to this sale, the Gloriosos had merely offered to sell a rear portion of the lot to petitioners under a 1983 Kasunduan (Agreement), but the transaction did not materialize due to petitioners’ failure to pay. Despite demands, petitioners refused to vacate the front portion they occupied.
Petitioners, in their defense, contended that the Kasunduan was a perfected contract of sale over the front portion of the lot, not a mere offer. They argued that their failure to pay the price was immaterial as no period for payment was fixed, and the vendors’ remedy was to seek judicial fixation of a period, not an ejectment suit. They also claimed respondents were buyers in bad faith, aware of the prior sale.

ISSUE

The core issue is whether the Kasunduan dated August 6, 1983, constituted a perfected contract of sale or merely a contract to sell, which determines the rights of the parties and the propriety of the accion publiciana.

RULING

The Supreme Court denied the petition and affirmed the lower courts’ decisions. The Kasunduan was construed as a contract to sell, not a perfected contract of sale. The legal logic hinges on the distinction between the two contracts. In a contract of sale, the vendor obligates himself to transfer ownership immediately upon perfection, and the buyer’s obligation to pay the price is demandable. In a contract to sell, ownership is reserved in the vendor and is not to pass until full payment of the price; non-payment is a negative resolutory condition.
The Court found the Kasunduan’s stipulations indicative of a contract to sell. Crucially, it stated the petitioners would transfer their house to the portion “nabili o mabibili” (bought or to be bought), implying future acquisition contingent on payment. The agreement also required the parties to share subdivision costs, a step preliminary to transfer. Since petitioners failed to pay the purchase price, the condition for the obligation to convey title never arose. Consequently, petitioners never acquired any right to the property that could prevail against the respondents, who derived title from the Gloriosos. Their continued possession was thus unlawful, justifying the accion publiciana and the order to pay reasonable rent. The Court also held that petitioners, having raised new issues like compensation for improvements only at the Supreme Court, were barred from seeking such relief.