G.R. NO. 190016, October 2, 2013
Topics:
Contract to Sell and a Conditional Deed of Sale
Doctrines:
A contract to sell is akin to a conditional sale where the efficacy or obligatory force of the vendor’s obligation to transfer title is subordinated to the happening of a future and uncertain event, so that if the suspensive condition does not take place, the parties would stand as if the conditional obligation had never existed.
Summary:
Dolores C. Ventura entered into a Contract to Sell with the spouses Endaya for the purchase on two parcels of land in Paranaque City. The contract provided that upon full payment, the spouses Endaya would execute a final deed of sale over the same in favor of Ventura. The latter was placed in possession of the property, but before the payment period expired. Ventura died.
Facts:
Dolores Ventura entered into a contract to sell with spouses Endaya for the purchase of two parcels of land owned by the latter. The contract stipulated that Dolores would initially pay a down payment of ₱103,284 upon the execution of the contract and pay the balance of ₱244,476.00within an 15-year period with 12% interest p.a. on the outstanding balance, plus a 12% interest p.a. on the arrears, and also the obligation to pay the real property taxes over the subject properties.Dolores was placed in possession of the subject properties and allowed to erect a building thereon. However, before the payment period expired, Dolores passed away.Dolores’ children filed to the RTC a complaint for specific performance, seeking to compel Sps. Endaya to execute a deed of sale over the subject properties. The petitioners claim that the total payments made by Doloresand petitioners amounted to ₱952,152.00, which is more than the agreed purchase price of ₱347,760.00, including the 12%interest p.a. thereon computed on the outstanding balance.Sps. Endaya aver that prior to the death of Dolores, several restructuring of the contract were agreed upon by the parties fixing the obligation to P3,000,000.The RTC ruled in favor of the petitioners stating that the full payment of the purchase price of the property was proven, but this was reversed by the CA which found that the petitioners were not able to fully comply with their obligations.
Issue:
Should the respondents be compelled to execute the final deed of sale over the two parcels of land in favor of petitioners?
Ruling:
No. A contract to sell is defined as 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 latter upon his fulfillment of the conditions as agreed upon, i.e. the full payment of the purchased price and / or compliance with the other obligations stated in the contract to sell. The failure of the prospective buyer to make full payment abide by his commitment stated in the contract to sell prevents the obligation on the prospective seller to execute the corresponding deed of sale from arising. Aside from the payment of the purchase price and interest on the outstanding balance, the contract to sell likewise imposed upon petitioners the obligation to pay the real property tax over the subject properties. However, the records submitted clearly show that only the payments corresponding to the principal obligation and the interest on the outstanding balance were paid. Since the petitioners failed to comply with all the obligations stipulated in the contract to sell, the respondents have no obligation to execute a deed of sale over the properties. Thus, the respondents cannot be compelled to execute a deed of sale in favor of petitioners.