GR L 59266; (February, 1988) (Digest)
G.R. No. L-59266 February 29, 1988
SILVESTRE DIGNOS and ISABEL LUMUNGSOD, petitioners, vs. HON. COURT OF APPEALS and ATILANO G. JABIL, respondents.
FACTS
Petitioners Silvestre Dignos and Isabel Lumungsod were the owners of a parcel of land. On June 7, 1965, they executed a deed of sale in favor of respondent Atilano Jabil for P28,000.00. The terms included an assumption of a P12,000.00 bank debt, which Jabil paid, and a balance of P4,000.00 due on or before September 15, 1965. Jabil took possession of the property. Subsequently, on November 25, 1965, the Dignos spouses sold the same land to spouses Luciano and Jovita Cabigas for P35,000.00 and executed a corresponding deed of absolute sale. Upon discovering this second sale, Jabil filed a suit for specific performance after the Dignos spouses refused to accept his tender of the P4,000.00 balance.
ISSUE
The core issues were: (1) whether the contract between the Dignos spouses and Jabil was an absolute sale or merely a contract to sell; and (2) whether the Dignos spouses validly rescinded their contract with Jabil before selling the property to the Cabigas spouses.
RULING
The Supreme Court affirmed the Court of Appeals, ruling in favor of Jabil. On the first issue, the Court held the contract was an absolute deed of sale, not a contract to sell. The agreement’s terms, coupled with the petitioners’ act of delivering possession to Jabil and their acknowledgment of his payment of the assumed mortgage, demonstrated the parties’ intent to effect an immediate transfer of ownership, with only the payment of the balance secured by a vendor’s lien. Consequently, ownership passed to Jabil upon the execution of the deed, subject to full payment.
On the second issue, the Court ruled the alleged rescission was invalid. Applying Article 1592 of the Civil Code, the Court emphasized that in a sale of immovable property, the vendor may rescind for non-payment only by making a demand either through a notarial act or by filing a judicial suit. The petitioners failed to do either. Their reliance on a message from an alleged emissary of Jabil, which Jabil denied authorizing, did not constitute a valid legal demand. Since no valid rescission occurred, the Dignos spouses were no longer the owners when they sold the property to the Cabigas spouses, rendering that second sale void. Equity required that Jabil be allowed to pay the remaining balance to perfect his title, as his one-month delay in tendering the P4,000.00, where time was not of the essence, was not a sufficient ground for rescission. The petition was dismissed for lack of merit.