G.R. No. 236826 . March 23, 2022.
HEIRS OF HERMINIO MARQUEZ, REPRESENTED BY ALMA MARIE MARQUEZ, PETITIONERS, VS. HEIRS OF EPIFANIA M. HERNANDEZ, REPRESENTED BY LOURDES H. TIONSON, RESPONDENTS.

FACTS

Respondents, heirs of Epifania Hernandez, filed a complaint for specific performance against Herminio Marquez. Since 1955, respondents and Epifania occupied a 200-square meter portion (subject property) of a larger 1,417-square meter property in Bulacan. In 1967, the entire property was sold to Herminio. In 1985, Herminio agreed to sell the subject property to Epifania for P400 per square meter, with full payment due before the end of 1985. Epifania made an initial payment of P2,000, evidenced by a receipt, and made subsequent installment payments through a joint bank account and checks. Epifania died in 1995. In March 2000, respondents executed an Extrajudicial Settlement stating that the proceeds of the joint account constituted full payment, which Herminio signed. In 1994, Herminio had waived his rights to the entire property in favor of his heir, petitioner Alma Marie Marquez, who became the registered owner. Respondents received demand letters to vacate from Marquez in 1999 and 2000. Herminio refused to execute a deed of absolute sale, arguing the agreement converted to a lease when Epifania failed to pay in full by 1985. Marquez contended payments were rentals. The RTC ruled in favor of respondents, declaring the sale valid and ordering partition and issuance of separate titles. The CA affirmed with modifications. Petitioners sought review.

ISSUE

Whether the contract between Herminio Marquez and Epifania Hernandez was a perfected contract of sale or a contract of lease.

RULING

The Supreme Court denied the petition and affirmed the CA Decision with modification. The contract was a perfected contract of sale, not a lease. A contract of sale is perfected at the moment there is a meeting of minds upon the thing and the price. The October 23, 1985 receipt constituted a perfected contract of sale, as it contained the object (the lot) and the price (P400 per square meter), and the initial payment was accepted. The subsequent provision treating failure to pay by year-end as converting the agreement to a lease was a potestative condition dependent solely on the will of the debtor (Epifania), which is void under Article 1182 of the Civil Code. Thus, the sale remained valid. Herminio, as a co-owner, could validly alienate his proportionate share in the property. The Court affirmed the orders for Marquez to submit a subdivision plan for partition and for the Register of Deeds to cancel the title and issue new ones, but deleted the award of attorney’s fees for lack of basis.