PLATINUM PLANS PHILS INC V.

CUCUECO
488 SCRA 156 (2006)

FACTS: Respondent Cucueco filed a case for specific performance with damages
against petitioner Platinum Plans pursuant to an alleged contract of sale executed by
them for the purchase of a condominium unit.
According to the respondent: sometime in July 1993, he offered to buy from
petitioner Platinum Plans Phils a condominium unit he was leasing from the
latter for P 4 million payable in 2 installments of P2 million with the following
terms and conditions:
a. Cucueco will issue a check for P100,00 as earnest money
b. He will issue a post-dated check for P1.9 million to be encashed on September
30, 1993 on the condition that he will stop paying rentals for the said unit after
September 30
c. In case Platinum Plans has an outstanding loan of less than P2 million with the
bank as of December 1993, Cucueco shall assume the same and pay the difference
from the remaining P2 million
Cucueco likewise claimed that Platinum Plans accepted his offerby encashing
the checks he issued. However, he was surprised to learn that Platinum Plans
had changed the due date of the installment payment to September 30, 1993.
Respondent argued that there was a perfected sale between him and Platinum
plans and as such, he may validly demand from the petitioner to execute the
necessary deed of sale transferring ownership and title over the property in his
favor
Platinum Plans denied Cucuecos allegations and asserted that Cucuecos initial
down payment was forfeited based on the following terms and conditions:
a. The terms of payment only includes two installments (August 1993 and
September 1993)
b. In case of non-compliance on the part of the vendee, all installments made shall
be forfeited in favor of the vendor Platinum Plans
c. Ownership over the property shall not pass until payment of the full purchase
price
Petitioners anchor their argument on the claim that there was no meeting of the
minds between the two parties, as evidenced by their letter of non-acceptance.
The trial court ruled in favor of Platinum, citing that since the element of
consent was absent there was no perfected contract. The trial court ordered
 Platinum Plans to return the P2 million they had received from Cucueco, and
for Cucueco to pay Platinum Plans rentals in arrears for the use of the unit.
Upon appeal, CA held that there was a perfected contract despite the fact that
both parties never agreed on the date of payment of the remaining balance. CA
ordered Cucueco to pay the remaining balance of the purchase price and for
Platinum Plans, to execute a deed of sale over the property

ISSUE: WON the contract there is a perfected contract of sale

HELD: No, it is a contract to sell.

In a contract of sale, the vendor cannot recover ownership of the thing sold until and
unless the contract itself is resolved and set aside. Art 1592 provides:

In the sale of immovable property, even though it may have been stipulated that upon
failure to pay the price at the time agreed upon, the rescission of the contract shall of
right take place, the vendee may pay, even after the expiration of the period, as long
as no demand for rescission of the contract has been upon him either judicially
or by a notarial act. After the demand, the court may not grant him a new term.

Based on the above provision, a party who fails to invoke judicially or by notarial
act would be prevented from blocking the consummation of the same in light of
the precept that mere failure to fulfill the contract does not by itself have the
effect of rescission.

On the other hand, a contract to sell is bilateral contract whereby the prospective
seller, while expressly reserving the ownership of the subject property despite its
delivery to the prospective buyer, commits to sell the property exclusively to the
prospective buyer upon fulfillment of the condition agreed upon, i.e., full payment of
the purchase price. Full payment here is considered as a positive suspensive
condition.

As a result if the party contracting to sell, because of non-compliance with the

suspensive condition, seeks to eject the prospective buyer from, the land, the
seller is enforcing the contract and is not resolving it. The failure to pay is not a
breach of contract but an event which prevent the obligation to convey title
from materializing.
In the present case, neither side was able to produce any written evidence
documenting the actual terms of their agreement. The trial court was correct in finding
that there was no meeting of minds in this case considering that the acceptance
of the offer was not absolute and uncondition. In earlier cases, the SC held that
before a valid and binding contract of sale can exist, the manner of payment of the
purchase price must first be established.

Furthermore, the reservation of the title in the name of Platinum Plans clearly
indicates an intention of the parties to enter into a contract of sell.Where the
seller promises to execute a deed of absolute sale upon completion of the payment of
purchase price, the agreement is a contract to sell.

The court cannot, in this case, step in to cure the deficiency by fixing the period
pursuant to:
1. The relief sought by Cucueco was for specific performance to compel Platinum
Plans to receive the balance of the purchase price.
2. The relief provide in Art 1592 only applies to contracts of sale
3. Because of the differing dates set by both parties, the court would have no
basis for granting Cucueco an extension of time within which to pay the
outstanding balance

SELLER CANNOT TREAT THE CONTRACT AS CANCELLED WITHOUT SERVING

NOTICE
The act of a party in treating the contract as cancelled should be made known to the
other party because this act is subject to scrutiny and review by the courts in cased
the alleged defaulter brings the matter for judicial determination as explained in UP v.
De los Angeles. In the case at bar, there were repeated written notices sent by
Platinum Plans to Cucueco that failure to pay the balance would result in the
cancellation of the contract and forfeiture of the down payment already made. Under
these circumstance, the cancellation made by Platinum Plans is valid and reasonable
(except for the forfeiture of the down payment because Cucueco never agreed to the
same)

EFFECTS OF CONTRACT TO SELL

A contract to sell would be rendered ineffective and without force and effect by the
non-fulfillment of the buyers obligation to pay since this is a suspensive condition to
the obligation of the seller to sell and deliver the title of the property. As an effect, the
parties stand as if the conditional obligation had never existed. There can be no
rescission of an obligation that is still non-existent as the suspensive condition has
not yet occurred.

CAS RELIANCE ON LEVY HERMANOS V. GERVACIO IS MISPLACED

It was unnecessary for CA to distinguish whether the transaction between the parties
was an installment sale or a straight sale. In the first place, there is no valid and
enforceable contract to speak of.

Jovellanos v. CA,

G.R. No. 100728

June 18, 1992

Facts: Daniel Jovellanos contracted with Philamlife a lease and conditional sale agreement of a property.
When the agreement took place, Daniel was still married to his first wife, Leonor, with whom he had
three children. Leonor died on January 2, 1959. On May 30, 1967, Daniel was remarried to Annette
(respondent). On December 18, 1971, Mercy (daughter from first marriage) and her husband, built an
extension at the back of the said property. On January 8, 1975, the lease was paid and Philamlife
executed a deed of absolute sale to Daniel. The following day, he then donated the said property to his
children in the first marriage (petitioners). On September 8, 1985, Daniel died.

Annette now claims that the said property is the conjugal property belonging to the second marriage
due to the fact that the deed of absolute sale was dated during the celebration of their marriage (Jan. 8,
1975).

Issue:
1.) What kind of contract did the late Jovellanos enter with Philamlife?

Held:

The contract entered into by the late Daniel Jovellanos and Philamlife is specifically denominated as a
"Lease and Conditional Sale Agreement" over the property involved with a lease period of twenty years
at a monthly rental of P288.87, by virtue of which the former, as lessee-vendee, had only the right of
possession over the property. In a lease agreement, the lessor transfers merely the temporary use and
enjoyment of the thing leased. In fact, Daniel Jovellanos bound himself therein, among other things, to
use the property solely as a residence, take care thereof like a good father of a family, permit inspection
thereof by representatives of Philamlife in regard to the use and preservation of the property.
It is specifically provided, however, that "(i)f, at the expiration of the lease period herein agreed upon,
the LESSEE-VENDEE shall have fully faithfully complied with all his obligations herein stipulated, the
LESSOR-VENDOR shall immediately sell, transfer and convey to the LESSEE-VENDEE the property which is
the subject matter of this agreement; . . .

The conditional sale agreement in said contract is, therefore, also in the nature of a contract to sell, as
contrdistinguished from a contract of sale. In a contract to sell or a conditional sale, ownership is not
transferred upon delivery of the property but upon full payment of the purchase price. Generally,
ownership is transferred upon delivery, but even if delivered, the ownership may still be with the seller
until full payment of the price is made, if there is stipulation to this effect. The stipulation is usually
known as a pactum reservati dominii, or contractual reservation of title, and is common in sales on the
installment plan. Compliance with the stipulated payments is a suspensive condition. the failure of
which prevents the obligation of the vendor to convey title from acquiring binding force.

Hornbook lore from civilists clearly lays down the distinctions between a contract of sale in which the
title passes to the buyer upon delivery of the thing sold, and a contract to sell where, by agreement, the
ownership is reserved in the seller and is not to pass until full payment of the purchase price: In the
former, non-payment of the price is a negative resolutory condition; in the latter, full payment is a
positive suspensive condition. In the former, the vendor loses and cannot recover the ownership of the
thing sold until and unless the contract of sale is rescinded or set aside; in the latter, the title remains in
the vendor if the vendee does not comply with the condition precedent of making full payment as
specified in the contract.

Accordingly, viewed either as a lease contract or a contract to sell, or as a contractual amalgam with
facets of both, what was vested by the aforestated contract in petitioners' predecessor in interest was
merely the beneficial title to the property in question. His monthly payments were made in the concept
of rentals, but with the agreement that if he faithfully complied with all the stipulations in the contract
the same would in effect be considered as amortization payments to be applied to the predetermined
price of the said property. He consequently acquired ownership thereof only upon full payment of the
said amount hence, although he had been in possession of the premises since September 2, 1955, it was
only on January 8, 1975 that Philamlife executed the deed of absolute sale thereof in his favor.

The conditions of the aforesaid agreement also bear notice, considering the stipulations therein that
Daniel Jovellanos, as lessee-vendee, shall not

xxx xxx xxx

(b) Sublease said property to a third party;

(c) Engage in business or practice any profession within the property;

xxx xxx xxx

(f) Make any alteration or improvement on the property without the prior written consent of the
LESSOR-VENDOR;

(g) Cut down, damage, or remove any tree or shrub, or remove or quarry any stone, rock or earth within
the property, without the prior written consent of the LESSOR-VENDOR;
(h) Assign to another his right, title and interest under and by virtue of this Agreement, without the prior
written consent and approval of the LESSOR-VENDOR.

The above restrictions further bolster the conclusion that Daniel Jovellanos did not enjoy the full
attributes of ownership until the execution of the deed of sale in his favor. The law recognizes in the
owner the right to enjoy and dispose of a thing, without other limitations than those established by
law, and, under the contract, Daniel Jovellanos evidently did not possess or enjoy such rights of
ownership.

We find no legal impediment to the application in this case of the rule of retroactivity provided in the
Family Code to the effect that

Art. 256. This Code shall have retroactive effect insofar as it does not prejudice or impair vested or
acquired nights in accordance with the Civil Code or other laws.

The right of Daniel Jovellanos to the property under the contract with Philamlife was merely an inchoate
and expectant right which would ripen into a vested right only upon his acquisition of ownership which,
as aforestated, was contingent upon his full payment of the rentals and compliance with all his
contractual obligations thereunder. A vested right as an immediate fixed right of present and future
enjoyment. It is to be distinguished from a right that is expectant or contingent. It is a right which is
fixed, unalterable, absolute, complete and unconditional to the exercise of which no obstacle exists, and
which is perfect in itself and not dependent upon a contingency. Thus, for a property right to be vested,
there must be a transition from the potential or contingent to the actual, and the proprietary interest
must have attached to a thing; it must have become fixed or established and is no longer open to doubt
or controversy.

The trial court which was upheld by respondent court, correctly ruled that the cases cited by petitioners
are inapplicable to the case at bar since said cases involved friar lands which are governed by a special
law, Act 1120, which was specifically enacted for the purpose. In the sale of friar lands, upon execution
of the contract to sell, a certificate of sale is delivered to the vendee and such act is considered as a
conveyance of ownership, subject only to the resolutory condition that the sale may be rescinded if the
agreed price shall not be paid in full. In the instant case, no certificate of sale was delivered and full
payment of the rentals was a condition precedent before ownership could be transferred to the vendee.

We have earlier underscored that the deed of absolute sale was executed in 1975 by Philamlife, pursuant
to the basic contract between the parties, only after full payment of the rentals. Upon the execution of
said deed of absolute sale, full ownership was vested in Daniel Jovellanos. Since. as early as 1967, he was
already married to Annette H. Jovellanos, this property necessarily belonged to his conjugal partnership
with his said second wife.

As found by the trial court, the parties stipulated during the pre-trial conference in the case below that
the rentals/installments under the lease and conditional sale agreement were paid as follows (a) from
September 2, 1955 to January 2, 1959, by conjugal funds of the first marriage; (b) from January 3, 1959
to May 29, 1967, by capital of Daniel Jovellanos; (c) from May 30, 1967 to 1971, by conjugal funds of the
second marriage; and (d) from 1972 to January 8, 1975, by conjugal funds of the spouses Gil and Mercy
Jovellanos
Martinez. Both courts, therefore, ordered that reimbursements should be made in line with the
pertinent provision of Article 118 of the Family Code that "any amount advanced by the partnership or
by either or both spouses shall be reimbursed by the owner or owners upon liquidation of the
partnership."

ACCORDINGLY, finding no reversible error in the judgment of respondent court, the same is hereby
AFFIRMED.

UNITED MUSLIM AND CHRISTIAN URBAN POOR ASSOCIATION, INC. v BRYC-V DEVELOPMENT
CORPORATION July 31, 2009

Contract to Sell

FACTS:
Sea Foods Corporation (SFC) is the registered owner of Lot No. 300 located in Lower Calainan,
Zamboanga City and covered by TCT No. 3182 (T-576). Sometime in 1991, P UMCUPAI, an organization of
squatters occupying Lot No. 300, initiated negotiations with SFC for the purchase thereof. UMCUPAI
expressed its intention to buy the subject property using the proceeds of its pending loan application
with National Home Mortgage Finance Corporation (NHMF). Thereafter, the parties executed a Letter of
Intent to Sell by SFC and Letter of Intent to Purchase by UMCUPAI. However, the intended sale was
derailed due to UMCUPAIs inability to secure the loan from NHMF as not all its members occupying Lot
No. 300 were willing to join the undertaking. Intent on buying the subject property, UMCUPAI, in a series
of conferences with SFC, proposed the subdivision of Lot No. 300 to allow the squatter-occupants to
purchase a smaller portion thereof. ------------------------------------------------ Consequently, Lot No. 300 was
subdivided into 3 parts covered by separate titles: 1. Lot No. 300-A with an area of 41,460 square meters
under TCT No. T-117,448; 2. Lot No. 300-B with an area of 1,405 square meters under TCT No. T-117,449;
and 3. Lot No. 300-C with an area of 18,872 square meters under TCT No. T-117,450. Jan 11, 1995,
UMCUPAI purchased Lot No. 300-A for P4,350,801. In turn, Lot No. 300-B was constituted as road right
of way and donated by SFC to the local government.UMCUPAI failed to acquire Lot No. 300-C for lack of
funds. ------------------------------------------------ Mar 5, 1995, UMCUPAI negotiated anew with SFC and was
given by SFC another 3 months to purchase Lot No. 300-C. However, despite the extension, the 3- month
period lapsed with the sale not consummated because UMCUPAI still failed to obtain a loan from NHMF.
July 20, 1995,: SFC sold Lot No. 300-C for P2,547,585 to R BRYC. A year later, UMCUPAI filed with the RTC
a complaint against Rs SFC and BRYC seeking to annul the sale of Lot No. 300-C. UMCUPAI alleged that
the sale between the Rs violated its valid and subsisting agreement with SFC embodied in the LOI.
According to UMCUPAI, the LOI granted it a prior, better, and preferred right over BRYC in the purchase
of Lot No. 300-C. Rs' Answers: BRYC: UMCUPAIs complaint did not state a cause of action since UMCUPAI
had unequivocally recognized its ownership of Lot No. 300-C when UMCUPAI likewise sent BRYC a Letter
of Intent dated August 18, 1995 imploring BRYC to re-sell the subject lot. SFC; LOI is not, and cannot be
considered, a valid and subsisting contract of sale. The document was drawn and executed merely to
accommodate UMCUPAI and enable it to comply with the loan documentation requirements of NHMF.
Tthe LOI was subject to a condition i.e., payment of the acquisition price, which UMCUPAI failed to do
when it did not obtain the loan from NHMF. RTC dismissed UMCUPAI's complaint. According to the RTC,
the LOI was simply SFCs declaration of intention to sell, and not a promise to sell, the subject lot; that
the LOI was neither a promise, nor an option contract, nor an offer contemplated under A1319 of the CC,
or a bilateral contract to sell and buy. The CA, on appeal, affirmed in toto the RTCs ruling. Hence, this
petition for review on certiorari by UMCUPAI.

Issue:
IS THE LOI TO SELL AND LOI TO BUY A BILATERAL RECIPROCAL CONTRACT WITHIN THE MEANING OR
CONTEMPLATION OF Article 1479 paragraph 1 , NCC?

Held:

No (1) UMCUPAI is adamant that the CA erred when it applied paragraph 2 of A1479 instead of
paragraph 1 thereof. UMCUPAI urges us that the P1 of A1479 contemplates a bilateral reciprocal contract
which is binding on the parties. In short, although not stated plainly, UMCUPAI claims that the LOI is
equivalent to a conditional contract of sale subject only to the suspensive condition of payment of the
purchase price. UMCUPAI appears to labor under a cloud of confusion. The 1 of A1479 contemplates
the bilateral relationship of a contract to sell as distinguished from a contract of sale which may be
absolute or conditional under A1458 of the same code. (2) The case of Coronel v. CA is illuminating and
explains the distinction between a conditional contract of sale under A1458 of the Civil Code and a
bilateral contract to sell under A1479 of the same code: A contract to sell may thus be 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 prospective buyer upon fulfillment of the condition agreed upon, that is, full payment
of the purchase price. A contract to sell xxx may not even be considered as a conditional contract of sale
where the seller may likewise reserve title to the property subject of the sale until the fulfillment of a
suspensive condition, because in a conditional contract of sale, the first element of consent is present,
although it is conditioned upon the happening of a contingent event which may or may not occur. If the
suspensive condition is not fulfilled, the perfection of the contract of sale is completely abated. However,
if the suspensive condition is fulfilled, the contract of sale is thereby perfected, such that if there had
already been previous delivery of the property subject of the sale to the buyer, ownership thereto
automatically transfers to the buyer by operation of law without any further act having to be performed
by the seller. In a contract to sell, upon the fulfillment of the suspensive condition which is the full
payment of the purchase price, ownership will not automatically transfer to the buyer although the
property may have been previously delivered to him. The prospective seller still has to convey title to the
prospective buyer by entering into a contract of absolute sale. It is essential to distinguish between a
contract to sell and a conditional contract of sale specially in cases where the subject property is sold by
the owner not to the party the seller contracted with, but to a third person, as in the case at bench. In a
contract to sell, there being no previous sale of the property, a third person buying such property despite
the fulfillment of the suspensive condition such as the full payment of the purchase price, for instance,
cannot be deemed a buyer in bad faith and the prospective buyer cannot seek the relief of reconveyance
of the property. There is no double sale in such case. Title to the property will transfer to the buyer after
registration because there is no defect in the owner-sellers title per se, but the latter, of course, may be
sued for damages by the intending buyer. In a conditional contract of sale, however, upon the fulfillment
of the suspensive condition, the sale becomes absolute and this will definitely affect the sellers title
thereto. In fact, if there had been previous delivery of the subject property, the sellers ownership or title
to the property is automatically transferred to the buyer such that, the seller will no longer have any title
to transfer to any third person. Applying Article 1544 of the Civil Code, such second buyer of the
property who may have had actual or constructive knowledge of such defect in the sellers title, or at
least was charged with the obligation to discover such defect, cannot be a registrant in good faith. Such
second buyer cannot defeat the first buyers title. In case a title is issued to the second buyer, the first
buyer may seek reconveyance of the property subject of the sale. In the instant case, however, the
parties executed a LOI, which is neither a contract to sell nor a conditional contract of sale. As found by
the RTC, and upheld by the CA, the LOI was executed to accommodate UMCUPAI and facilitate its loan
application with NHMF. The 4th and 5th paragraphs of the recitals (whereas clauses) specifically provide:
WHEREAS, it appears that UMCUPAI will ultimately apply with the Home Mortgage and Finance
Corporation for a loan to pay the acquisition price of said land; WHEREAS, as one of the steps required
by the government authorities to initiate proceedings is to receive a formal manifestation of Intent to
Sell from [SFC]. Nowhere in the LOI does it state that SFC relinquishes its title over the subject property,
subject only to the condition of complete payment of the purchase price; nor, at the least, that SFC,
although expressly retaining ownership thereof, binds itself to sell the property exclusively to UMCUPAI.
The LOI to Buy and Sell is just that a manifestation of SFCs intention to sell the property and UMCUPAIs
intention to acquire the same. (3) CA: The LOI between SFC and UMCUPAI is merely a written preliminary
understanding of the parties wherein they declared their intention to enter into a contract of sale. It is
subject to the condition that UMCUPAI will apply with the Home Mortgage and Finance Corporation for
a loan to pay the acquisition price of said land. One of the requirements for such loan is a formal
manifestation of Intent to Sell from SFC. Thus, the LOI to Sell fell short of an offer contemplated in A1319
of the Civil Code because it is not a certain and definite proposal to make a contract but merely a
declaration of SFCs intention to enter into a contract. UMCUPAIs declaration of intention to buy is also
not certain and definite as it is subject to the condition that UMCUPAI shall endeavor to raise funds to
acquire subject land. The acceptance of the offer must be absolute; it must be plain and unconditional.
Moreover, the LOI does not contain a promise or commitment to enter into a contract of sale as it merely
declared the intention of the parties to enter into a contract of sale upon fulfillment of a condition that
UMCUPAI could secure a loan to pay for the price of a land. The Letter of Intent/Agreement is not an
option contract because aside from the fact that it is merely a declaration of intention to sell and to buy
subject to the condition that UMCUPAI shall raise the necessary funds to pay the price of the land, and
does not contain a binding promise to sell and buy, it is not supported by a distinct consideration distinct
from the price of the land intended to be sold and to be bought x x x No option was granted to UMCUPAI
under the Letter of Intent/Agreement to buy subject land to the exclusion of all others within a fixed
period nor was SFC bound under said Agreement to Sell exclusively to UMCUPAI only the said land within
the fixed period. DISPOSITIVE: the petition is DENIED. The Decision of the CA and the RTC are AFFIRMED.
Costs against the petitioner.
United Muslim and Christian Urban Poor Association v. Bryc-V Development Corp.
G.R. No. 179653 (Short version)
July 31, 2009

Facts: The United Muslim and Christian Urban Poor Association (UMCUPAI) manifested its intention to
purchase Lot 300 owned by Sea Foods Corporation (SFC). SFC executed a Letter of Intent to Sell and
Letter of Intent to Purchase, providing that SFC would sell the said lot at 105php per square meter and
that UMCUPAI would endeavor to raise the necessary funds for the purchase. UMCUPAI was unable to
secure a loan to allow it to purchase Lot 300, but the lot was subdivided into 3 smaller lots, of which
UMCUPAI was able to purchase one. SFC sold one of the three lots to Bryc-V Development Corp.
UMCUPAI now seeks to rescind the sale arguing, although not explicitly, that ownership had already
vested in them as the Letters of Intent partook in the nature of a Conditional Contract of Sale.

Issue:

WON the Letters of Intention could be considered a Conditional Contract of Sale.

Held:

NO. A Letter of Intent is not a contract between the parties thereto because it does not bind one party,
with respect to the other, to give something or to render some service. An intention is a mere idea, goal,
or plan. It falls show of a definite proposal, and is a mere declaration to enter into a contract. For a
contract to be perfected, the offer must be absolute; it must be plain and unconditional. This being the
case, it cannot be considered a Conditional Contract of Sale wherein ownership would have already
vested in UMCUPAI, subject only to the fulfillment of a suspensive condition. In Conditional Contract of
Sale, a third party may be considered a buyer in bad faith should it be shown that he was aware that
when he purchased the property in question, the same had already been the subject of a contract of sale
between the another buyer and the seller, in which case his right is defeated by the first buyers right.
There being no Conditional Contract of Sale- or any contract of sale for that matter, Bryc-V cannot be
held to be a buyer in bad faith.
MAUNLAD HOMES, INC., N.C. PULUMBARIT INC., N.C.P. LEASING
CORPORATION, and NEMENCIO C. PULUMBARIT, SR., Petitioners,
VS
UNION BANK OF THE PHILIPPINES and JULIE C. GO, Respondents.

Facts:
The subject matter of the case are several parcels of land forming the commercial
complex known as Maunlad Malls 1 and 2 located in Malolos, Bulacan. The properties
were previously owned and mortgaged by Maunlad Homes to the respondents. They
were foreclosed by respondents.
Before consolidation of ownership, respondents, as seller, and petitioners, as buyer,
entered into a contract to sell the said parcels of land on July 5, 2002. The
contract was essentially a buy-back agreement where the purchase price was to be
paid in installment. By virtue of the contract to sell, petitioners remained in
possession and management of the commercial complex. They also continued to
collect rental payments from the tenants of the commercial complex

ETO NA YUNG CONFLICT

On February 2004, respondents began interfering with the business operation of the
commercial complex, alleging that petitioners were not paying the installments under
the contract to sell. Respondents also convinced the tenants of the commercial
complex to pay the rentals directly to them, rather than to petitioners.
ANO NGAYON YUNG GINAWA NG PETITIONERS? HETO PAKINGGAN NATIN
On March 14, 2004, petitioners (as plaintiffs) filed a complaint for injunction with
prayer for temporary restraining order (TRO) and preliminary injunction with the RTC
in Malolos, Bulacan. They sought to prevent respondents (as defendants) from
collecting rental payments directly from the tenants of the commercial complex.
After summary hearing, the RTC issued a TRO against respondents. 5 The hearing on
the application for preliminary injunction ensued (SO NANALO SILA SI MAUNLAD
HOMES SA LOWER COURT)
ANO SABI NG LOWER COURT? BAKIT DAW NILA PINANIGAN SI MAUNLAD HOMES?
PAKINGGAN NATIN.

Clearly, at this stage, plaintiff Maunlad Malls 1 and 2 since the inception, it has the
right to remain in continuous possession subject to the final outcome of the ejectment
suit pending before the MTC of Makati. On the other hand, defendant Union Bank
cannot validly claim, even admitting the circumstances offered by it in evidence to be
true and correct, because in this jurisdiction no one has the right to obtain possession
of a piece of property without resorting to judicial remedies available under the
circumstances. To sanction defendant Union Bank's claimed ownership and
possession of the premises in question, at this time, vis - -vis its exercise of the rights
appurtenant thereto would be to permit it to contradict itself for, as already pointed
out, it has already instituted an action for ejectment against Maunlad Homes, Inc.
Good faith demands that defendant Union Bank must wait for the final
determination of the ejectment suit, it cannot take the law into its own hands
by interfering with or preventing plaintiff Maunlad Homes, Inc, from exercising
rights of possession over Malls 1 and 2 and cannot continue to prevent it from
collecting the rentals owing from the present occupants of the stalls/units
therein.
(ah so may pending ejectment case na finile si union bank against kay maunlad
homes sa MTC makati. Sabi ng court, antayin daw muna yung resolution non. Atat
kasi si union bank e.)
NATANGGAP BA NG UNION BANK YUNG SINABI NG RTC? NAKAPAG MOVE ON NA
BA SIYA? PAKINGGAN NATIN

Petitioner Union Bank of the Philippines (UBP) asserts its rights and entitlement
to an injunction considering its status as the registered and actual owner of the
subject properties, arguing that private respondents' claims are anchored on a
mere "contract to Sell" which does not vest ownership over said properties on
the private respondents unless a deed of absolute sale is executed upon full
payment of the purchase price by Maunlad Homes. Further, as We have stated in
Our April 28, 2003 Resolution, petitioners stand to suffer grave and irreparable injury
during the pendency of the instant case before this Court in terms of the collection of
monthly rentals from the subject properties should it be found that the assailed
Orders of the RTC were erroneously issued.
SO IN SHORT FRIENDS, TALO SI UNION BANK SA RTC. SYEMPRE PATALO BA
NAMAN SIYA DIBA? AKYAT SIYA NGAYON SA COURT OF APPEALS

On October 3, 2007, the CA issued a decision granting the Petition for Certiorari and
reversing the RTC decision with a fallo reading:
WHEREFORE, the instant petition is GRANTED. The assailed orders dated July 20,
2004 and September 6, 2004 as well as the order dated June 22, 2004 and the writ of
preliminary injunction issued by the RTC of Malolos, Bulacan, Branch 16, in Civil
Case No. 297-M-2004, are REVERSED and SET ASIDE for lack of factual and legal
basis. (OY AKALAIN MO BA NAMAN! NAREVERSE YUNG DECISION NG RTC!)

ANO DAW ANG RATIONALE BAKIT MALI ANG RTC SABI NI CA? PAKINGGAN
NATIN.
The CA ratiocinated:
Private respondents' invocation of the contract to sell which Maunlad previously
entered into with Union Bank and upon which they justify their right to possess and
collect rentals, is insufficient basis for issuance of a preliminary injunction in their
favor. As the Supreme Court held:
x x x the contract to sell does not by itself give respondent the right to possess
the property. Unlike in a contract of sale, here in a contract to sell, there is yet
no actual sale nor any transfer of title, until and unless, full payment is made.
The payment of the purchase price is a positive suspensive condition, the failure of
which is not a breach, casual or serious, but a situation that prevents the obligation of
the vendor to convey title from acquiring an obligatory force. Respondent must have
fully paid the price of acquire title over the property and the right to retain possession
thereof. In cases of non-payment, the unpaid seller can avail of the remedy of
ejectment since he retains ownership of the property.
In view of the absence of a clear and unmistakable right on the part of private
respondents, we cannot sustain their claim that they would suffer irreparable injury if
injunctive relief is not granted in their favor. Where the complainants' right or title
is doubtful or disputed, injunction is not proper. Thus, the possibility of
irreparable damage without proof of existing right is no ground for an injunction.
Stated differently, one who prays for issuance of injunction must show the existence of
a "clear positive right" especially calling for judicial protection. Injunction is not
designed to protect contingent or future right; nor is it a remedy to enforce an abstract
right. The duty of the court taking cognizance of a prayer for a writ of preliminary
injunction is to determine whether the requisites necessary for the grant of an
injunction are present in the case before it. The granting by the trial court despite
the absence of any legal right to be protected constitutes grave abuse of
discretion.
On the other hand, in line with the petition before the Court, we find that petitioner
Union Bank has sufficiently shown its right to the issuance of not only preliminary
injunction but also permanent injunction against the respondents.
SYEMPRE DI NAGALIT SI MAUNLAD HOMES NGAYON KASI MAS MAHAL NI CA SI
UNION BANK. NAGSUMBONG SIYA KAY BEBE NIYA SUMPREME COURT.
HENCE THIS PETITION (LOL)

ISSUE:
WHETHER OR NOT CA IS CORRECT IN REVERSING THE DECISION OF THE RTC

RULING:
HELL NO! As We see it, the CA was of the opinion that petitioners have no right to
collect rental payments from the tenants of the commercial complex because they
ceased to own the disputed property pursuant to the contract to sell. We do not agree.
It is wrong for the CA to rule that petitioners are not entitled to collect rental payments
because they are no longer the owner of the commercial complex. It is not essential
under our law on lease that the lessor be the owner of the leased property. A mere
lessee may be a lessor under a sub-lease contract. Even a mere possessor may enter
into a contract of lease as lessor.
Records disclose that petitioners never ceased to be the possessor of the commercial
complex, although there was a contract to sell the said property. They continued to
possess the disputed property before, during, and after the execution of the contract to
sell. In fact, petitioners were the ones who entered into the lease contracts with the
tenants of the commercial complex.15
Records further show that respondents entered into a contract to sell with petitioners
before consolidating ownership over the disputed property after foreclosure. The
contract to sell was essentially a buy-back agreement on installment. By virtue of the
contract to sell, petitioners continued to collect rental payments from the tenants of
the commercial complex. Respondents did not dispute this right.
It was an error for the appellate court to make a definitive conclusion that petitioner
has no right to collect rental payments from the tenants of the commercial complex.
Respondents are estopped from asserting otherwise because they allowed petitioners
to collect said rental payments after the execution of the contract to sell. Under the
terms of the contract to sell, We find no prohibition against the collection of rental
payments by petitioners. It may fairly be assumed, unless contradicted at trial, that
petitioners have the right to collect and receive rental payments from the tenants of
the commercial complex.
WHEREFORE, the petition is GRANTED. The Court of Appeals Decision
is REVERSED AND SET ASIDE. The Regional Trial Court order and writ of
preliminary injunction are REINSTATED.
SO ORDERED.
Yey!
HEIRS OF CAYETANO PANGAN and G.R. No. 157374
CONSUELO PANGAN,*

VS

SPOUSES ROGELIO PERRERAS and PRISCILLA

PERRERAS,

FACTS:

The spouses Pangan were the owners of the lot and two-door apartment (subject properties) located
at 1142 Casaas St., Sampaloc, Manila.[5] On June 2, 1989, Consuelo agreed to sell to the respondents the
subject properties for the price of P540,000.00. On the same day, Consuelo received P20,000.00 from
the respondents as earnest money, evidenced by a receipt (June 2, 1989 receipt)[6] that also included the
terms of the parties agreement.

Three days later, or on June 5, 1989, the parties agreed to increase the purchase price
from P540,000.00 to P580,000.00.

The respondents then issued two Far East Bank and Trust Company checks payable to Consuelo in the
amounts of P200,000.00 and P250,000.00 on June 15, 1989. Consuelo, however, REFUSED to accept
the checks. She justified her refusal by saying that her children (the petitioners-heirs) co-owners of the
subject properties did not want to sell the subject properties.

(LUH MAY USAPAN TAS BIGLANG AAYAW?! GIGIL SI AQOE)

For the same reason, Consuelo offered to return the P20,000.00 earnest money she received from the
respondents, but the latter rejected it. Thus, Consuelo filed a complaint for consignation against the
respondents on September 5, 1989, docketed as Civil Case No. 89-50258, before the RTC of Manila,
Branch 28.

The respondents, who insisted on enforcing the agreement, in turn instituted an action for specific
performance against Consuelo (HINDI SAPAT YUNG CONSIGNATION! SPECIFIC PERFORMANCE BOOM!)
before the same court on September 26, 1989.This case was docketed as Civil Case No. 89-50259. They
sought to compel Consuelo and the petitioners-heirs (who were subsequently impleaded as co-
defendants) to execute a Deed of Absolute Sale over the subject properties.

ANONG DEFENSE NI CONSUELO NA PAASA?

In her Answer, Consuelo claimed that she was justified in backing out from the agreement on the
ground that the sale was subject to the consent of the petitioners-heirs who became co-owners of the
property upon the death of her husband, Cayetano. Since the petitioners-heirs disapproved of the sale,
Consuelo claimed that the contract became ineffective for lack of the requisite consent. She nevertheless
expressed her willingness to return the P20,000.00 earnest money she received from the respondents.
ANO SABI NI RTC NGAYON?

The RTC ruled in the respondents favor; it upheld the existence of a perfected contract of sale, at least
insofar as the sale involved Consuelos conjugal and hereditary shares in the subject properties. The trial
court found that Consuelos receipt of the P20,000.00 earnest money was an eloquent manifestation of
the perfection of the contract. (SO PANALO SI PANGAN!)

ANO NAMAN SABI NI CA?

Consuelo and the petitioners-heirs appealed the RTC decision to the CA claiming that the trial court
erred in not finding that the agreement was subject to a suspensive condition the consent of the
petitioners-heirs to the agreement. The CA, however, resolved to dismiss the appeal and, therefore,
affirmed the RTC decision. As the RTC did, the CA found that the payment and receipt of earnest money
was the operative act that gave rise to a perfected contract, and that there was nothing in the parties
agreement that would indicate that it was subject to a suspensive condition. It declared:

Nowhere in the agreement of the parties, as contained in the June 2, 1989 receipt issued by [Consuelo]
xxx, indicates that [Consuelo] reserved titled on [sic] the property, nor does it contain any
provision subjecting the sale to a positive suspensive condition. (OY PANGAN PA DIN! PANGAN FOR THE
WIN!)

Unsatisfied (ayaw magpatalo), Consuelo filed a petition for review to the SC.

ISSUE:

1. Was there a perfected contract between the parties?

2. What is the nature of the contract between them? and

3. What is the effect of the respondents belated payment on their contract?

DOCTRINE OF THE CASE:

In a contract of sale, the title to the property passes to the vendee upon the delivery of the thing sold;
while in a contract to sell, ownership is, by agreement, reserved in the vendor and is not to pass to the
vendee until full payment of the purchase price. In a contract to sell, the payment of the purchase price
is a positive suspensive condition, the failure of which is not a breach, casual or serious, but a situation
that prevents the obligation of the vendor to convey title from acquiring an obligatory force.

RULING:

There was a perfected contract between the parties since all the essential requisites of a contract were
present
Article 1318 of the Civil Code declares that no contract exists unless the following requisites concur: (1)
consent of the contracting parties; (2) object certain which is the subject matter of the contract; and (3)
cause of the obligation established. Since the object of the parties agreement involves properties co-
owned by Consuelo and her children, the petitioners-heirs insist that their approval of the sale initiated
by their mother, Consuelo, was essential to its perfection. Accordingly, their refusal amounted to the
absence of the required element of consent.

That a thing is sold without the consent of all the co-owners does not invalidate the sale or render it
void. Article 493 of the Civil Code[8] recognizes the absolute right of a co-owner to freely dispose of
his pro indiviso share as well as the fruits and other benefits arising from that share, independently of
the other co-owners. Thus, when Consuelo agreed to sell to the respondents the subject properties,
what she in fact sold was her undivided interest that, as quantified by the RTC, consisted of one-half
interest, representing her conjugal share, and one-sixth interest, representing her hereditary share.

The petitioners-heirs nevertheless argue that Consuelos consent was predicated on their consent to the
sale, and that their disapproval resulted in the withdrawal of Consuelos consent. Yet, we find nothing in
the parties agreement or even conduct save Consuelos self-serving testimony that would indicate or
from which we can infer that Consuelos consent depended on her childrens approval of the sale. The
explicit terms of the June 8, 1989 receipt [9] provide no occasion for any reading that the agreement is
subject to the petitioners-heirs favorable consent to the sale.

The presence of Consuelos consent and, corollarily, the existence of a perfected contract between the
parties are further evidenced by the payment and receipt of P20,000.00, an earnest money by the
contracting parties common usage. The law on sales, specifically Article 1482 of the Civil Code, provides
that whenever earnest money is given in a contract of sale, it shall be considered as part of the price
and proof of the perfection of the contract. Although the presumption is not conclusive, as the parties
may treat the earnest money differently, there is nothing alleged in the present case that would give rise
to a contrary presumption. In cases where the Court reached a conclusion contrary to the presumption
declared in Article 1482, we found that the money initially paid was given to guarantee that the buyer
would not back out from the sale, considering that the parties to the sale have yet to arrive at a definite
agreement as to its terms that is, a situation where the contract has not yet been perfected.[10] These
situations do not obtain in the present case, as neither of the parties claimed that the P20,000.00 was
given merely as guarantee by the respondents, as vendees, that they would not back out from the
sale. As we have pointed out, the terms of the parties agreement are clear and explicit; indeed, all the
essential elements of a perfected contract are present in this case. While the respondents required that
the occupants vacate the subject properties prior to the payment of the second installment, the
stipulation does not affect the perfection of the contract, but only its execution.

In sum, the case contains no element, factual or legal, that negates the existence of a perfected contract
between the parties.
The characterization of the contract can be considered irrelevant in this case in light of Article 1592
and the Maceda Law, and the petitioners-heirs payment

The petitioners-heirs posit that the proper characterization of the contract entered into by the parties is
significant in order to determine the effect of the respondents breach of the contract (which purportedly
consisted of a one-day delay in the payment of part of the purchase price) and the remedies to which
they, as the non-defaulting party, are entitled.

The question of characterization of the contract involved here would necessarily call for a thorough
analysis of the parties agreement as embodied in the June 2, 1989 receipt, their contemporaneous acts,
and the circumstances surrounding the contracts perfection and execution. Unfortunately, the lower
courts factual findings provide insufficient detail for the purpose. A stipulation reserving ownership in
the vendor until full payment of the price is, under case law, typical in a contract to sell. [11] In this case,
the vendor made no reservation on the ownership of the subject properties. From this perspective, the
parties agreement may be considered a contract of sale. On the other hand, jurisprudence has similarly
established that the need to execute a deed of absolute sale upon completion of payment of the price
generally indicates that it is a contract to sell, as it implies the reservation of title in the vendor until the
vendee has completed the payment of the price. When the respondents instituted the action for specific
performance before the RTC, they prayed that Consuelo be ordered to execute a Deed of Absolute Sale;
this act may be taken to conclude that the parties only entered into a contract to sell.

Admittedly, the given facts, as found by the lower courts, and in the absence of additional details, can be
interpreted to support two conflicting conclusions. The failure of the lower courts to pry into these
matters may understandably be explained by the issues raised before them, which did not require the
additional details. Thus, they found the question of the contracts characterization immaterial in their
discussion of the facts and the law of the case. Besides, the petitioners-heirs raised the question of the
contracts characterization and the effect of the breach for the first time through the present Rule 45
petition.

Points of law, theories, issues and arguments not brought to the attention of the lower court need not
be, and ordinarily will not be, considered by the reviewing court, as they cannot be raised for the first
time at the appellate review stage. Basic considerations of fairness and due process require this rule.

At any rate, we do not find the question of characterization significant to fully pass upon the question of
default due to the respondents breach; ultimately, the breach was cured and the contract revived by the
respondents payment a day after the due date.

In cases of breach due to nonpayment, the vendor may avail of the remedy of rescission in a
contract of sale. Nevertheless, the defaulting vendee may defeat the vendors right to rescind the
contract of sale if he pays the amount due before he receives a demand for rescission, either judicially or
by a notarial act, from the vendor. This right is provided under Article 1592 of the Civil Code:
Article 1592. In the sale of immovable property, even though it may have been stipulated that upon
failure to pay the price at the time agreed upon the rescission of the contract shall of right take
place, the vendee may pay, even after the expiration of the period, as long as no demand for rescission
of the contract has been made upon him either judicially or by a notarial act. After the demand, the
court may not grant him a new term. [Emphasis supplied.]

Nonpayment of the purchase price in contracts to sell, however, does not constitute a breach; rather,
nonpayment is a condition that prevents the obligation from acquiring obligatory force and results in
its cancellation. We stated in Ong v. CA[13] that:

In a contract to sell, the payment of the purchase price is a positive suspensive condition, the failure of
which is not a breach, casual or serious, but a situation that prevents the obligation of the vendor to
convey title from acquiring obligatory force. The non-fulfillment of the condition of full payment
rendered the contract to sell ineffective and without force and effect. [Emphasis supplied.

As in the rescission of a contract of sale for nonpayment of the price, the defaulting vendee in a contract
to sell may defeat the vendors right to cancel by invoking the rights granted to him under Republic Act
No. 6552 or the Realty Installment Buyer Protection Act (also known as the Maceda Law); this law
provides for a 60-day grace period within which the defaulting vendee (who has paid less than two years
of installments) may still pay the installments due. Only after the lapse of the grace period with
continued nonpayment of the amounts due can the actual cancellation of the contract take place. The
pertinent provisions of the Maceda Law provide:

xxxx

Section 2. It is hereby declared a public policy to protect buyers of real estate on installment payments
against onerous and oppressive conditions.

Sec. 3. In all transactions or contracts involving the sale or financing of real estate on installment
payments, including residential condominium apartments but excluding industrial lots, commercial
buildings and sales to tenants under Republic Act Numbered Thirty-eight hundred forty-four as amended
by Republic Act Numbered Sixty-three hundred eighty-nine, where the buyer has paid at least two years
of installments, the buyer is entitled to the following rights in case he defaults in the payment of
succeeding installments:

xxxx

Section 4. In case where less than two years of installments were paid, the seller shall give the buyer a
grace period of not less than 60 days from the date the installment became due. If the buyer fails to
pay the installments due at the expiration of the grace period, the seller may cancel the contract after
thirty days from the receipt by the buyer of the notice of cancellation or the demand for rescission of the
contract by notarial act. [Emphasis supplied.]

Significantly, the Court has consistently held that the Maceda Law covers not only sales on installments
of real estate, but also financing of such acquisition; its Section 3 is comprehensive enough to include
both contracts of sale and contracts to sell, provided that the terms on payment of the price require at
least two installments. The contract entered into by the parties herein can very well fall under the
Maceda Law.
Based on the above discussion, we conclude that the respondents payment on June 15, 1989 of the
installment due on June 14, 1989 effectively defeated the petitioners-heirs right to have the contract
rescinded or cancelled. Whether the parties agreement is characterized as one of sale or to sell is not
relevant in light of the respondents payment within the grace period provided under Article 1592 of the
Civil Code and Section 4 of the Maceda Law. The petitioners-heirs obligation to accept the payment of
the price and to convey Consuelos conjugal and hereditary shares in the subject properties subsists.

WHEREFORE, we DENY the petitioners-heirs petition for review on certiorari, and AFFIRM the decision
of the Court of Appeals dated June 24, 2002 and its resolution dated February 20, 2003 in CA-G.R. CV
Case No. 56590. Costs against the petitioners-heirs.

SO ORDERED.

(PANALO SI PANGAN! 3-0)