G.R. No. 186014 (June 26, 2013)
Topics: Contract of sale/deed of sale vs. contract to sell
Summary:
Ali Akang is a citizen of the Philippines and a member of the Maguindanaon tribe. Around 1962, the petitioner sold a two-hectare portion of his property to the Municipality of Isulan. The respondent took possession of the property right away and started building the municipal facility.
A contract of sale is a bilateral contract between two parties. In a contract to sell, the ownership of the thing sold is retained by the seller. The Deed of Sale makes no clear reservations regarding ownership or title to the property. As a result, the contract cannot be one for the sale of property. A contract of sale is a consensual contract and what is required is the meeting of the minds on the object and the price for its perfection and validity.
Non-payment of the purchase price merely gave rise to a right in favor of the petitioner to demand specific performance or rescission of the contract. The respondent’s prolonged possession may not be regarded as evidence of ownership in this case, but the right to compensation has nonetheless become moot because of the petitioner’s negligence and inaction. Jura subverniunt vigilantibus sed non dormientibus. The law is on the side of the watchful, not the rights-sleepers.
Doctrines:
By the contract of sale, one of the contracting parties obligates himself to transfer the ownership of and to deliver a determinate thing, and the other to pay therefore a price certain in money or its equivalent.
A contract to sell, on the other hand, is a bilateral contract whereby the prospective seller, while expressly reserving the ownership of the subject property despite delivery thereof to the prospective buyer, binds himself to sell the said property exclusively to the prospective buyer upon fulfillment of the condition agreed upon, that is, full payment of the purchase price.
Facts:
Ali Akang (petitioner) is a citizen of the Philippines and a member of the Maguindanaon tribe. He is the registered owner of a parcel of land in Isulan, Sultan Kudarat, with a total area of 20,030 square meters. Around 1962, the petitioner sold a two-hectare portion of the property to the Municipality of Isulan, Province of Sultan Kudarat (respondent) through the then-Mayor of Isulan, Datu The respondent took possession of the property right away and started building the municipal facility.
The petitioner and his wife, Patao Talipasan, filed a civil action for Recovery of Possession of Subject Property and/or Quieting of Title thereto and Damages against the respondent, represented by its Municipal Mayor, et al., thirty-nine (39) years later or on October 26, 2001.
The respondent denied the petitioner’s allegations in its answer, claiming, among other things: that the petitioner’s cause of action was already barred by laches; that the Deed of Sale was valid; and that it has been in open, continuous, and exclusive possession of the property for forty (40) years. In his complaint, the petitioner claimed, among other things, that the agreement was one to sell, which was not consummated because the purchase price was not paid.
Issue:
- Whether the Deed of Sale dated July 18, 1962 is a valid and perfected contract of sale;
- Whether there was payment of consideration by the respondent;
- Whether the petitioner’s claim is barred by laches
- Whether the petitioner is entitled to recover ownership and possession of the property indispute.
Ruling:
The Deed of Sale is a Valid Contract of Sale.
By the contract of sale, one of the contracting parties obligates himself to transfer the ownership of and to deliver a determinate thing, and the other to pay therefore a price certain in money or its equivalent. The elements of a contract of sale are: (a) consent or meeting of the minds, that is, consent to transfer ownership in exchange for the price; (b) determine subject matter; and (c) price certain in money or its equivalent.
A contract to sell, on the other hand, is a bilateral contract whereby the prospective seller, while expressly reserving the ownership of the subject property despite delivery thereof to the prospective buyer, binds himself to sell the said property exclusively to the prospective buyer upon fulfillment of the condition agreed upon, that is, full payment of the purchase price. In a contract of sale, the title to the property passes to the buyer upon the delivery of the thing sold, whereas in a contract to sell, the ownership is, by agreement, retained by the seller and is not to pass to the vendee until full payment of the purchase price.
All the components of a finalized contract of sale are contained in the Deed of Sale that the petitioner and respondent signed. They freely and voluntarily signed the contract, demonstrating their mutual consent to enter into the deal.
There was a determined subject matter, i.e., the two-hectare parcel of land as described in the Deed of Sale, as well as an absolute transfer of ownership of the property from the petitioner to the respondent as shown in the stipulation: “I petitioner hereby sell, transfer, cede, convey and assign as by these presents do have sold, transferred, cede, convey and assigned.” The final item is the sum or consideration, which is three thousand pesos (P3,000.00) and was due after the contract was signed.
The absence of such intent is supported by the fact that the Deed of Sale makes no clear reservations regarding ownership or title to the property. As a result, the contract cannot be one for the sale of property. If the petitioner had had different intentions, he might have either launched legal action to challenge the agreement or immediately sought judicial relief to stop continued construction of the municipal building. The petitioner decided against using any of these remedies.
The Municipal Voucher produced before the RTC, which demonstrates the Respondent’s payment of Three Thousand Pesos, negates the Petitioner’s claim of non-payment (P3,000.00). Despite not having the Municipal Treasurer’s consent, the petitioner confessed that his signature appeared on the Municipal Voucher, and he is now barred from denying payment. Even if it were assumed that the petitioner was not paid, the validity of the sale contract is unaffected by this nonpayment because it is irrelevant.
A contract of sale is a consensual contract and what is required is the meeting of the minds on the object and the price for its perfection and validity. In this case, the contract was perfected the moment the petitioner and the respondent agreed on the object of the sale the two-hectare parcel of land, and the price Three Thousand Pesos (P3,000.00). Non-payment of the purchase price merely gave rise to a right in favor of the petitioner to either demand specific performance or rescission of the contract of sale. The Petitioners Claim for Recovery of Possession and Ownership is Barred by Laches.
The definition of laches is the unreasonable and unjustified delay in performing an action that, with appropriate diligence, might or ought to have been completed sooner. It should be emphasized that laches is not just about time passing by. In general, laches cannot be used to prevent the enforcement of an imprescriptible legal right or to bar an action to reclaim registered land covered by the Torrens System. However, the Court occasionally permitted laches to prevent the recovery of a titled property. As a result, even if the method of transfer was illegal, laches will prevent recovery of the property, the court decided in Romero v. Natividad.
More specifically, even if the method of transfer utilized by an accused member of a cultural minority was not authorized by the executive branch, laches will prevent the recovery of a property. In Heirs of Dicman v. Cario, the court approved Ting-el Dicman’s Deed of Conveyance of Part Rights and Interests in Agricultural Land in spite of the lack of governmental sanction. The right to reclaim possession has nonetheless been barred by the application of the equitable doctrine of laches, the Court ruled. “Despite the judicial pronouncement that the sale of real property by illiterate ethnic minorities is null and void for lack of approval of competent authorities,” the Court wrote.
Similar to the previous case, the respondent’s prolonged possession may not be regarded as evidence of ownership in this instance, but the petitioner’s right to compensation has nonetheless become moot because of the respondent’s prolonged possession as well as the petitioner’s own negligence and inaction. The petitioner’s statement that the Cotabato Ilaga-Black Shirt Troubles and martial law were to blame for his delayed filing and assertion of rights cannot be accepted by the court. The Ilaga-Black Shirt Troubles occurred from the 1970s to the 1980s, while the Martial Law regime lasted from 1972 to 1986.
As early as the third quarter of 1962, following the execution of the Deed of Sale and prior to the occurrence of these events, the petitioner may have requested judicial remedy or, at the least, made his requests to the respondent. Furthermore, he might have submitted his claim right away once Martial Law and the battle in Cotabato ended, even if, as the petitioner contends, access to courts was restricted during these years.
Because the court’s decision in Development Bank of the Philippines v. Pundogar dealt with prescription and not laches, the petitioner cannot rely on the court’s view of Martial Law as a force majeure that stopped the running of prescription. Because of the petitioner’s protracted inaction, it can be said that he consented to the sale or otherwise complied with its terms. Jura subverniunt vigilantibus sed non dormientibus. The law is on the side of the watchful, not the rights-sleepers. In the instance of the petitioner, this legal principle is applicable.