GR 170917; (November, 2007) (Digest)
G.R. No. 170917 ; November 28, 2007
SPOUSES NESTOR CASTILLO and ROSIE REYES-CASTILLO, Petitioners, vs. SPOUSES RUDY REYES and CONSOLACION REYES, Respondents.
FACTS
On November 8, 1997, Emmaliza Bohler and respondent spouses Rudy and Consolacion Reyes executed an Agreement for the sale of a house and lot for ₱165,000.00. The terms stipulated a partial payment of ₱130,000.00 on that date, with the ₱35,000.00 balance due on or before December 15, 1997. The respondents gave ₱20,000.00 cash and a check for ₱110,000.00, but Bohler demanded full cash payment by midnight to redeem the property from a bank. The respondents failed to produce the cash. Consequently, Bohler later sold the property to petitioner spouses Nestor and Rosie Castillo on March 2, 1998. The respondents filed a complaint for annulment of the subsequent sale, specific performance, and damages. The Regional Trial Court dismissed the complaint, declaring the November 8 Agreement a mere contract to sell, which allowed Bohler to validly sell to another party.
ISSUE
Whether the November 8, 1997 Agreement between Bohler and the respondents constituted a perfected contract of sale or merely a contract to sell.
RULING
The Supreme Court affirmed the Court of Appeals and ruled that the Agreement was a perfected contract of sale. A contract of sale is consensual and perfected upon a meeting of the minds on the object (the house and lot) and the price (₱165,000.00), which was clearly achieved upon the Agreement’s execution. The Court distinguished a contract of sale from a contract to sell. In a contract of sale, ownership transfers to the buyer upon delivery, and the seller can only recover the property through rescission. In a contract to sell, ownership is reserved by the seller until full payment, making payment a suspensive condition. The Agreement contained no express reservation of ownership by Bohler. Its terms, including the fixed price and payment schedule, indicated the parties’ intent for an absolute sale. Therefore, a perfected contract of sale existed, and Bohler’s subsequent sale to the petitioners was invalid. The petition was denied.