Coronel Vs CA - 103577 - October 7, 1996 - J

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CoronelvsCA:103577:October7,1996:J.Melo:ThirdDivision
[Syllabus]
THIRDDIVISION
[G.R.No.103577.October7,1996]
ROMULO A. CORONEL, ALARICO A. CORONEL, ANNETTE A. CORONEL,

ANNABELLE C. GONZALES (for herself and on behalf of Floraida C.
Tupper, as attorneyinfact), CIELITO A. CORONEL, FLORAIDA A.
ALMONTE, and CATALINA BALAIS MABANAG, petitioners, vs. THE
COURT OF APPEALS, CONCEPCION D. ALCARAZ and RAMONA
PATRICIAALCARAZ,assistedbyGLORIAF.NOELasattorneyinfact,
respondents.
DECISION
MELO,J.:
Thepetitionbeforeushasitsrootsinacomplaintforspecificperformancetocompelherein
petitioners (except the last named, Catalina Balais Mabanag) to consummate the sale of a
parceloflandwithitsimprovementslocatedalongRooseveltAvenueinQuezonCityentered
intobythepartiessometimeinJanuary1985forthepriceofP1,240,000.00.
Theundisputedfactsofthecaseweresummarizedbyrespondentcourtinthiswise:
OnJanuary19,1985,defendantsappellantsRomuloCoronel,et.al.(hereinafterreferredtoasCoronels)
executedadocumententitledReceiptofDownPayment(Exh.A)infavorofplaintiffRamonaPatricia
Alcaraz(hereinafterreferredtoasRamona)whichisreproducedhereunder:
RECEIPTOFDOWNPAYMENT
P1,240,000.00Totalamount
50,000.00Downpayment
P1,190,000.00Balance
ReceivedfromMissRamonaPatriciaAlcarazof146Timog,QuezonCity,thesumofFiftyThousand
Pesospurchasepriceofourinheritedhouseandlot,coveredbyTCTNo.119627oftheRegistryofDeeds
ofQuezonCity,inthetotalamountofP1,240,000.00.
Webindourselvestoeffectthetransferinournamesfromourdeceasedfather,ConstancioP.Coronel,
thetransfercertificateoftitleimmediatelyuponreceiptofthedownpaymentabovestated.
OnourpresentationoftheTCTalreadyinorname,Wewillimmediatelyexecutethedeedofabsolute
http://sc.judiciary.gov.ph/jurisprudence/1996/oct1996/103577.htm
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saleofsaidpropertyandMissRamonaPatriciaAlcarazshallimmediatelypaythebalanceofthe
P1,190,000.00.
Clearly,theconditionsappurtenanttothesalearethefollowing:
1.RamonawillmakeadownpaymentofFiftyThousand(P50,000.00)pesosuponexecutionofthe
documentaforestated
2.TheCoronelswillcausethetransferintheirnamesofthetitleofthepropertyregisteredinthenameof
theirdeceasedfatheruponreceiptoftheFiftyThousand(P50,000.00)Pesosdownpayment
3.Uponthetransferintheirnamesofthesubjectproperty,theCoronelswillexecutethedeedofabsolute
saleinfavorofRamonaandthelatterwillpaytheformerthewholebalanceofOneMillionOne
HundredNinetyThousand(P1,190,000.00)Pesos.
Onthesamedate(January15,1985),plaintiffappelleeConcepcionD.Alcaraz(hereinafterreferredtoas
Concepcion),motherofRamona,paidthedownpaymentofFiftyThousand(P50,000.00)Pesos(Exh.B,
Exh.2).
OnFebruary6,1985,thepropertyoriginallyregisteredinthenameoftheCoronelsfatherwas
transferredintheirnamesunderTCTNo.327043(Exh.DExh4)
OnFebruary18,1985,theCoronelssoldthepropertycoveredbyTCTNo.327043tointervenor
appellantCatalinaB.Mabanag(hereinafterreferredtoasCatalina)forOneMillionFiveHundredEighty
Thousand(P1,580,000.00)PesosafterthelatterhaspaidThreeHundredThousand(P300,000.00)Pesos
(Exhs.F3Exh.6C)
Forthisreason,Coronelscanceledandrescindedthecontract(Exh.A)withRamonabydepositingthe
downpaymentpaidbyConcepcioninthebankintrustforRamonaPatriciaAlcaraz.
OnFebruary22,1985,Concepcion,et.al.,filedacomplaintforaspecificperformanceagainstthe
CoronelsandcausedtheannotationofanoticeoflispendensatthebackofTCTNo.327403(Exh.E
Exh.5).
OnApril2,1985,Catalinacausedtheannotationofanoticeofadverseclaimcoveringthesameproperty
withtheRegistryofDeedsofQuezonCity(Exh.FExh.6).
OnApril25,1985,theCoronelsexecutedaDeedofAbsoluteSaleoverthesubjectpropertyinfavorof
Catalina(Exh.GExh.7).
OnJune5,1985,anewtitleoverthesubjectpropertywasissuedinthenameofCatalinaunderTCTNo.
351582(Exh.HExh.8).
(Rollo,pp.134136)
Inthecourseoftheproceedingsbeforethetrialcourt(Branch83,RTC,QuezonCity)the
parties agreed to submit the case for decision solely on the basis of documentary exhibits.
Thus, plaintiffs therein (now private respondents) proffered their documentary evidence
accordingly marked as Exhibits A through J, inclusive of their corresponding submarkings.
Adopting these same exhibits as their own, then defendants (now petitioners) accordingly
offered and marked them as Exhibits 1 through 10, likewise inclusive of their corresponding
submarkings.Uponmotionoftheparties,thetrialcourtgavethemthirty(30)dayswithinwhich
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tosimultaneouslysubmittheirrespectivememoranda,andanadditional15dayswithinwhich
tosubmittheircorrespondingcommentorreplythereto,afterwhich,thecasewouldbedeemed
submittedforresolution.
On April 14, 1988, the case was submitted for resolution before Judge Reynaldo Roura,
whowasthentemporarilydetailed topresideoverBranch 82 oftheRTCofQuezonCity. On
March 1, 1989, judgment was handed down by Judge Roura from his regular bench at
Macabebe,PampangafortheQuezonCitybranch,disposingasfollows:
WHEREFORE,judgmentforspecificperformanceisherebyrenderedorderingdefendanttoexecutein
favorofplaintiffsadeedofabsolutesalecoveringthatparceloflandembracedinandcoveredby
TransferCertificateofTitleNo.327403(nowTCTNo.331582)oftheRegistryofDeedsforQuezon
City,togetherwithalltheimprovementsexistingthereonfreefromallliensandencumbrances,andonce
accomplished,toimmediatelydeliverthesaiddocumentofsaletoplaintiffsanduponreceiptthereof,the
plaintiffsareorderedtopaydefendantsthewholebalanceofthepurchasepriceamountingto
P1,190,000.00incash.TransferCertificateofTitleNo.331582oftheRegistryofDeedsforQuezonCity
inthenameofintervenorisherebycanceledanddeclaredtobewithoutforceandeffect.Defendantsand
intervenorandallotherpersonsclaimingunderthemareherebyorderedtovacatethesubjectproperty
anddeliverpossessionthereoftoplaintiffs.Plaintiffsclaimfordamagesandattorneysfees,aswellasthe
counterclaimsofdefendantsandintervenorsareherebydismissed.
Nopronouncementastocosts.
SoOrdered.
Macabebe,PampangaforQuezonCity,March1,1989.
(Rollo,p.106)
Amotionforreconsiderationwasfiledbypetitionersbeforethenewpresidingjudgeofthe
QuezonCityRTCbutthesamewasdeniedbyJudgeEstrellaT.Estrada,thusly:
Theprayercontainedintheinstantmotion,i.e.,toannulthedecisionandtorenderanewdecisionbythe
undersignedPresidingJudgeshouldbedeniedforthefollowingreasons:(1)Theinstantcasebecame
submittedfordecisionasofApril14,1988whenthepartiesterminatedthepresentationoftheir
respectivedocumentaryevidenceandwhenthePresidingJudgeatthattimewasJudgeReynaldoRoura.
Thefactthattheywereallowedtofilememorandaatsomefuturedatedidnotchangethefactthatthe
hearingofthecasewasterminatedbeforeJudgeRouraandthereforethesameshouldbesubmittedto
himfordecision(2)WhenthedefendantsandintervenordidnotobjecttotheauthorityofJudge
ReynaldoRouratodecidethecasepriortotherenditionofthedecision,whentheymetforthefirsttime
beforetheundersignedPresidingJudgeatthehearingofapendingincidentinCivilCaseNo.Q46145
onNovember11,1988,theyweredeemedtohaveacquiescedtheretoandtheyarenowestoppedfrom
questioningsaidauthorityofJudgeRouraaftertheyreceivedthedecisioninquestionwhichhappensto
beadversetothem(3)WhileitistruethatJudgeReynaldoRourawasmerelyaJudgeondetailatthis
BranchoftheCourt,hewasinallrespectsthePresidingJudgewithfullauthoritytoactonanypending
incidentsubmittedbeforethisCourtduringhisincumbency.WhenhereturnedtohisOfficialStationat
Macabebe,Pampanga,hedidnotlosehisauthoritytodecideorresolvecasessubmittedtohimfor
decisionorresolutionbecausehecontinuedasJudgeoftheRegionalTrialCourtandisofcoequalrank
withtheundersignedPresidingJudge.ThestandingruleandsupportedbyjurisprudenceisthataJudgeto
whomacaseissubmittedfordecisionhastheauthoritytodecidethecasenotwithstandinghistransferto
anotherbranchorregionofthesamecourt(Sec.9,Rule135,RuleofCourt).
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ComingnowtothetwinprayerforreconsiderationoftheDecisiondatedMarch1,1989renderedinthe
instantcase,resolutionofwhichnowpertainstotheundersignedPresidingJudge,afterameticulous
examinationofthedocumentaryevidencepresentedbytheparties,sheisconvincedthattheDecisionof
March1,1989issupportedbyevidenceand,therefore,shouldnotbedisturbed.
INVIEWOFTHEFOREGOING,theMotionforReconsiderationand/ortoAnnulDecisionandRender
AnewDecisionbytheIncumbentPresidingJudgedatedMarch20,1989isherebyDENIED.
SOORDERED.
QuezonCity,Philippines,July12,1989.
(Rollo,pp.108109)
Petitioners thereupon interposed an appeal, but on December 16, 1991, the Court of
Appeals (Buena, GonzagaReyes, AbadSantos (P), JJ.) rendered its decision fully agreeing
withthetrialcourt.
Hence, the instant petition which was filed on March 5, 1992. The last pleading, private
respondentsReplyMemorandum,wasfiledonSeptember15,1993.The case was, however,
reraffledtoundersignedponenteonlyonAugust28,1996,duetothevoluntaryinhibitionofthe
Justicetowhomthecasewaslastassigned.
While we deem it necessary to introduce certain refinements in the disquisition of
respondent court in the affirmance of the trial courts decision, we definitely find the instant
petitionbereftofmerit.
Theheartofthecontroversywhichistheultimatekeyintheresolutionoftheotherissuesin
the case at bar is the precise determination of the legal significance of the document entitled
ReceiptofDownPaymentwhichwasofferedinevidencebybothparties.There is no dispute
astothefactthatthesaiddocumentembodiedthebindingcontractbetweenRamonaPatricia
Alcarazontheonehand,andtheheirsofConstancioP.Coronelontheother,pertainingtoa
particular house and lot covered by TCT No. 119627, as defined inArticle 1305 of the Civil
CodeofthePhilippineswhichreadsasfollows:
Art.1305.Acontractisameetingofmindsbetweentwopersonswherebyonebindshimself,with
respecttotheother,togivesomethingortorendersomeservice.
While,itisthepositionofprivaterespondentsthattheReceiptofDownPaymentembodied
a perfected contract of sale, which perforce, they seek to enforce by means of an action for
specific performance, petitioners on their part insist that what the document signified was a
mere executory contract to sell, subject to certain suspensive conditions, and because of the
absenceofRamonaP.Alcaraz,wholeftfortheUnitedStatesofAmerica,saidcontractcould
notpossiblyripenintoacontractofabsolutesale.
Plainly, such variance in the contending parties contention is brought about by the way
eachinterpretsthetermsand/orconditionssetforthinsaidprivateinstrument.Withal,basedon
whateverrelevantandadmissibleevidencemaybeavailableonrecord,thisCourt,aswerethe
courtsbelow,isnowcalledupontoadjudgewhattherealintentofthepartieswasatthetime
thesaiddocumentwasexecuted.
TheCivilCodedefinesacontractofsale,thus:
Art.1458.Bythecontractofsaleoneofthecontractingpartiesobligateshimselftotransferthe
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ownershipofandtodeliveradeterminatething,andtheothertopaythereforapricecertaininmoneyor
itsequivalent.
Sale,byitsverynature,isaconsensualcontractbecauseitisperfectedbymereconsent.
Theessentialelementsofacontractofsalearethefollowing:
a)Consentormeetingoftheminds,thatis,consenttotransferownershipinexchangefortheprice
b)Determinatesubjectmatterand
c)Pricecertaininmoneyoritsequivalent.
Under this definition, a Contract to Sell may not be considered as a Contract of Sale
because the first essential element is lacking. In a contract to sell, the prospective seller
explicitlyreservesthetransferoftitletotheprospectivebuyer,meaning,theprospectiveseller
doesnotasyetagreeorconsenttotransferownershipofthepropertysubjectofthecontractto
sell until the happening of an event, which for present purposes we shall take as the full
paymentofthepurchaseprice.What the seller agrees or obliges himself to do is to fulfill his
promisetosellthesubjectpropertywhentheentireamountofthepurchasepriceisdeliveredto
him.Inotherwordsthefullpaymentofthepurchasepricepartakesofasuspensivecondition,
the nonfulfillment of which prevents the obligation to sell from arising and thus, ownership is
retainedbytheprospectivesellerwithoutfurtherremediesbytheprospectivebuyer.InRoque
vs.Lapuz(96SCRA741[1980]),thisCourthadoccasiontorule:
Hence,Weholdthatthecontractbetweenthepetitionerandtherespondentwasacontracttosellwhere
theownershiportitleisretainedbythesellerandisnottopassuntilthefullpaymentoftheprice,such
paymentbeingapositivesuspensiveconditionandfailureofwhichisnotabreach,casualorserious,but
simplyaneventthatpreventedtheobligationofthevendortoconveytitlefromacquiringbindingforce.
Statedpositively,uponthefulfillmentofthesuspensiveconditionwhichisthefullpayment
ofthepurchaseprice,theprospectivesellersobligationtosellthesubjectpropertybyentering
intoacontractofsalewiththeprospectivebuyerbecomesdemandableasprovidedinArticle
1479oftheCivilCodewhichstates:
Art.1479.Apromisetobuyandselladeterminatethingforapricecertainisreciprocallydemandable.
Anacceptedunilateralpromisetobuyortoselladeterminatethingforapricecertainisbindinguponthe
promissorofthepromiseissupportedbyaconsiderationdistinctfromtheprice.
Acontracttosellmaythusbedefinedasabilateralcontractwherebytheprospectiveseller,
whileexpresslyreservingtheownershipofthesubjectpropertydespitedeliverythereoftothe
prospective buyer, binds himself to sell the said property exclusively to the prospective buyer
uponfulfillmentoftheconditionagreedupon,thatis,fullpaymentofthepurchaseprice.
A contract to sell as defined hereinabove, 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
untilthefulfillmentofasuspensivecondition,becauseinaconditionalcontractofsale,thefirst
element of consent is present, although it is conditioned upon the happening of a contingent
eventwhichmayormaynotoccur.Ifthesuspensiveconditionisnotfulfilled,theperfectionof
thecontractofsaleiscompletelyabated(cf.HomesiteandHousingCorp.vs.CourtofAppeals,
133SCRA777[1984]).However,ifthesuspensiveconditionisfulfilled,thecontractofsaleis
therebyperfected,suchthatiftherehadalreadybeenpreviousdeliveryofthepropertysubject
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ofthesaletothebuyer,ownershiptheretoautomaticallytransferstothebuyerbyoperationof
lawwithoutanyfurtheracthavingtobeperformedbytheseller.
In a contract to sell, upon the fulfillment of the suspensive condition which is the full
paymentofthepurchaseprice,ownershipwillnotautomaticallytransfertothebuyeralthough
the property may have been previously delivered to him. The prospective seller still has to
conveytitletotheprospectivebuyerbyenteringintoacontractofabsolutesale.
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
contractedwith,buttoathirdperson,asinthecaseatbench.Inacontracttosell,therebeing
noprevioussaleoftheproperty,athirdpersonbuyingsuchpropertydespitethefulfillmentof
thesuspensiveconditionsuchasthefullpaymentofthepurchaseprice,forinstance,cannotbe
deemedabuyerinbadfaithandtheprospectivebuyercannotseekthereliefofreconveyance
oftheproperty.There is no double sale in such case.Title to the property will transfer to the
buyerafterregistrationbecausethereisnodefectintheownersellerstitleperse,butthelatter,
ofcourse,maybesuedfordamagesbytheintendingbuyer.
Inaconditionalcontractofsale,however,uponthefulfillmentofthesuspensivecondition,
thesalebecomesabsoluteandthiswilldefinitelyaffectthesellerstitlethereto.Infact,ifthere
hadbeenpreviousdeliveryofthesubjectproperty,thesellersownershiportitletotheproperty
is automatically transferred to the buyer such that, the seller will no longer have any title to
transfertoanythirdperson.ApplyingArticle1544oftheCivilCode,suchsecondbuyerofthe
propertywhomayhavehadactualorconstructiveknowledgeofsuchdefectinthesellerstitle,
or at least was charged with the obligation to discover such defect, cannot be a registrant in
goodfaith.Suchsecondbuyercannotdefeatthefirstbuyerstitle.Incaseatitleisissuedtothe
secondbuyer,thefirstbuyermayseekreconveyanceofthepropertysubjectofthesale.
With the above postulates as guidelines, we now proceed to the task of deciphering the
realnatureofthecontractenteredintobypetitionersandprivaterespondents.
Itisacanonintheinterpretationofcontractsthatthewordsusedthereinshouldbegiven
theirnaturalandordinarymeaningunlessatechnicalmeaningwasintended(Tanvs.Courtof
Appeals,212SCRA586[1992]).Thus,whenpetitionersdeclaredinthesaidReceiptofDown
Paymentthatthey
ReceivedfromMissRamonaPatriciaAlcarazof146Timog,QuezonCity,thesumofFiftyThousand
Pesospurchasepriceofourinheritedhouseandlot,coveredbyTCTNo.1199627oftheRegistryof
DeedsofQuezonCity,inthetotalamountofP1,240,000.00.
without any reservation of title until full payment of the entire purchase price, the natural and
ordinaryideaconveyedisthattheysoldtheirproperty.
WhentheReceiptofDownpaymentisconsideredinitsentirety,itbecomesmoremanifest
thattherewasaclearintentonthepartofpetitionerstotransfertitletothebuyer,butsincethe
transfer certificate of title was still in the name of petitioners father, they could not fully effect
such transfer although the buyer was then willing and able to immediately pay the purchase
price.Therefore, petitionerssellers undertook upon receipt of the down payment from private
respondentRamonaP.Alcaraz,tocausetheissuanceofanewcertificateoftitleintheirnames
fromthatoftheirfather,afterwhich,theypromisedtopresentsaidtitle,nowintheirnames,to
thelatterandtoexecutethedeedofabsolutesalewhereupon,thelattershall,inturn,paythe
entirebalanceofthepurchaseprice.
Theagreementcouldnothavebeenacontracttosellbecausethesellershereinmadeno
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express reservation of ownership or title to the subject parcel of land. Furthermore, the
circumstance which prevented the parties from entering into an absolute contract of sale
pertainedtothesellersthemselves(thecertificateoftitlewasnotintheirnames)andnotthe
fullpaymentofthepurchaseprice.Undertheestablishedfactsandcircumstancesofthecase,
theCourtmaysafelypresumethat,hadthecertificateoftitlebeeninthenamesofpetitioners
sellersatthattime,therewouldhavebeennoreasonwhyanabsolutecontractofsalecould
nothavebeenexecutedandconsummatedrightthereandthen.
Moreover,unlikeinacontracttosell,petitionersinthecaseatbardidnotmerelypromise
to sell the property to private respondent upon the fulfillment of the suspensive condition. On
the contrary, having already agreed to sell the subject property, they undertook to have the
certificateoftitlechangetotheirnamesandimmediatelythereafter,toexecutethewrittendeed
ofabsolutesale.
Thus, the parties did not merely enter into a contract to sell where the sellers, after
compliancebythebuyerwithcertaintermsandconditions,promisedtosellthepropertytothe
latter.Whatmaybeperceivedfromtherespectiveundertakingsofthepartiestothecontractis
that petitioners had already agreed to sell the house and lot they inherited from their father,
completely willing to transfer ownership of the subject house and lot to the buyer if the
documentsweretheninorder.Itjustsohappened,however,thatthetransfercertificateoftitle
wasthenstillinthenameoftheirfather.Itwasmoreexpedienttofirsteffectthechangeinthe
certificateoftitlesoastobeartheirnames.Thatiswhytheyundertooktocausetheissuance
ofanewtransferofthecertificateoftitleintheirnamesuponreceiptofthedownpaymentin
the amount of P50,000.00. As soon as the new certificate of title is issued in their names,
petitionerswerecommittedtoimmediatelyexecutethedeedofabsolutesale.Onlythenwillthe
obligationofthebuyertopaytheremainderofthepurchasepricearise.
Thereisnodoubtthatunlikeinacontracttosellwhichismostcommonlyenteredintoso
as to protect the seller against a buyer who intends to buy the property in installment by
withholding ownership over the property until the buyer effects full payment therefor, in the
contractenteredintointhecaseatbar,thesellersweretheoneswhowereunabletoenterinto
acontractofabsolutesalebyreasonofthefactthatthecertificateoftitletothepropertywas
still in the name of their father. It was the sellers in this case who, as it were, had the
impedimentwhichprevented,sotospeak,theexecutionofancontractofabsolutesale.
Whatisclearlyestablishedbytheplainlanguageofthesubjectdocumentisthatwhenthe
saidReceiptofDownPaymentwaspreparedandsignedbypetitionersRomuloA.Coronel,et.
al.,thepartieshadagreedtoaconditionalcontractofsale,consummationofwhichissubject
only to the successful transfer of the certificate of title from the name of petitioners father,
ConstancioP.Coronel,totheirnames.
The Court significantly notes that this suspensive condition was, in fact, fulfilled on
February6,1985(Exh.DExh.4).Thus,onsaiddate,theconditionalcontractofsalebetween
petitionersandprivaterespondentRamonaP.Alcarazbecameobligatory,theonlyactrequired
fortheconsummationthereofbeingthedeliveryofthepropertybymeansoftheexecutionof
the deed of absolute sale in a public instrument, which petitioners unequivocally committed
themselvestodoasevidencedbytheReceiptofDownPayment.
Article 1475, in correlation withArticle 1181, both of the Civil Code, plainly applies to the
caseatbench.Thus,
Art.1475.Thecontractofsaleisperfectedatthemomentthereisameetingofmindsuponthething
whichistheobjectofthecontractandupontheprice.
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Fromthatmoment,thepartiesmayreciprocallydemandperformance,subjecttotheprovisionsofthelaw
governingtheformofcontracts.
Art.1181.Inconditionalobligations,theacquisitionofrights,aswellastheextinguishmentorlossof
thosealreadyacquired,shalldependuponthehappeningoftheeventwhichconstitutesthecondition.
Sincetheconditioncontemplatedbythepartieswhichistheissuanceofacertificateoftitle
inpetitionersnameswasfulfilledonFebruary6,1985,therespectiveobligationsoftheparties
under the contract of sale became mutually demandable, that is, petitioners, as sellers, were
obliged to present the transfer certificate of title already in their names to private respondent
RamonaP.Alcaraz,thebuyer,andtoimmediatelyexecutethedeedofabsolutesale,whilethe
buyeronherpart,wasobligedtoforthwithpaythebalanceofthepurchasepriceamountingto
P1,190,000.00.
Itisalsosignificanttonotethatinthefirstparagraphinpage9oftheirpetition,petitioners
conclusivelyadmittedthat:
3.ThepetitionerssellersCoronelboundthemselvestoeffectthetransferinournamesfromour
deceased father Constancio P. Coronel, the transfer certificate of title immediately upon
receiptofthedownpaymentabovestated".The sale was still subject to this suspensive
condition.(Emphasissupplied.)
(Rollo,p.16)
Petitioners themselves recognized that they entered into a contract of sale subject to a
suspensivecondition.Only,theycontend,continuinginthesameparagraph,that:
...Hadpetitionerssellersnotcompliedwiththisconditionoffirsttransferringthetitletotheproperty
undertheirnames,therecouldbenoperfectedcontractofsale.(Emphasissupplied.)
(Ibid.)
not aware that they have set their own trap for themselves, forArticle 1186 of the Civil Code
expresslyprovidesthat:
Art.1186.Theconditionshallbedeemedfulfilledwhentheobligorvoluntarilypreventsitsfulfillment.
Besides, it should be stressed and emphasized that what is more controlling than these
mere hypothetical arguments is the fact that the condition herein referred to was actually
andindisputablyfulfilledonFebruary6,1985,whenanewtitlewasissuedinthenamesof
petitionersasevidencedbyTCTNo.327403(Exh.DExh.4).
The inevitable conclusion is that on January 19, 1985, as evidenced by the document
denominatedasReceiptofDownPayment(Exh.AExh.1),thepartiesenteredintoacontract
of sale subject to the suspensive condition that the sellers shall effect the issuance of new
certificatetitlefromthatoftheirfathersnametotheirnamesandthat,onFebruary6,1985,this
conditionwasfulfilled(Exh.DExh.4).
We,therefore,holdthat,inaccordancewithArticle1187whichpertinentlyprovides
Art.1187.Theeffectsofconditionalobligationtogive,oncetheconditionhasbeenfulfilled,shall
retroacttothedayoftheconstitutionoftheobligation...
Inobligationstodoornottodo,thecourtsshalldetermine,ineachcase,theretroactiveeffectofthe
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conditionthathasbeencompliedwith.
therightsandobligationsofthepartieswithrespecttotheperfectedcontractofsalebecame
mutually due and demandable as of the time of fulfillment or occurrence of the suspensive
conditiononFebruary6,1985.Asofthatpointintime,reciprocalobligationsofbothsellerand
buyerarose.
Petitioners also argue there could been no perfected contract on January 19, 1985
becausetheywerethennotyettheabsoluteownersoftheinheritedproperty.
Wecannotsustainthisargument.
Article 774 of the Civil Code defines Succession as a mode of transferring ownership as
follows:
Art.774.Successionisamodeofacquisitionbyvirtueofwhichtheproperty,rightsandobligationsto
theextentandvalueoftheinheritanceofapersonaretransmittedthroughhisdeathtoanotherorothers
byhiswillorbyoperationoflaw.
Petitionerssellers in the case at bar being the sons and daughters of the decedent
ConstancioP.Coronelarecompulsoryheirswhowerecalledtosuccessionbyoperationoflaw.
Thus,atthepointtheirfatherdrewhislastbreath,petitionerssteppedintohisshoesinsofaras
thesubjectpropertyisconcerned,suchthatanyrightsorobligationspertainingtheretobecame
bindingandenforceableuponthem.It is expressly provided that rights to the succession are
transmitted from the moment of death of the decedent (Article 777, Civil Code Cuison vs.
Villanueva,90Phil.850[1952]).
Be it also noted that petitioners claim that succession may not be declared unless the
creditorshavebeenpaidisrenderedmootbythefactthattheywereabletoeffectthetransfer
ofthetitletothepropertyfromthedecedentsnametotheirnamesonFebruary6,1985.
Aside from this, petitioners are precluded from raising their supposed lack of capacity to
enterintoanagreementatthattimeandtheycannotbeallowedtonowtakeaposturecontrary
tothatwhichtheytookwhentheyenteredintotheagreementwithprivaterespondentRamona
P.Alcaraz.TheCivilCodeexpresslystatesthat:
Art.1431.Throughestoppelanadmissionorrepresentationisrenderedconclusiveupontheperson
makingit,andcannotbedeniedordisprovedasagainstthepersonrelyingthereon.
Havingrepresentedthemselvesasthetrueownersofthesubjectpropertyatthetimeofsale,
petitionerscannotclaimnowthattheywerenotyettheabsoluteownersthereofatthattime.
Petitioners also contend that although there was in fact a perfected contract of sale
between them and Ramona P. Alcaraz, the latter breach her reciprocal obligation when she
rendered impossible the consummation thereof by going to the United States of America,
withoutleavingheraddress,telephonenumber,andSpecialPowerofAttorney(Paragraphs14
and15,AnswerwithCompulsoryCounterclaimtotheAmendedComplaint,p.2Rollo,p.43),
for which reason, so petitioners conclude, they were correct in unilaterally rescinding the
contractofsale.
Wedonotagreewithpetitionersthattherewasavalidrescissionofthecontractofsalein
the instant case. We note that these supposed grounds for petitioners rescission, are mere
allegations found only in their responsive pleadings, which by express provision of the rules,
are deemed controverted even if no reply is filed by the plaintiffs (Sec. 11, Rule 6, Revised
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RulesofCourt).The records are absolutely bereft of any supporting evidence to substantiate

petitioners allegations. We have stressed time and again that allegations must be proven by
sufficient evidence (Ng Cho Cio vs. Ng Diong, 110 Phil. 882 [1961] Recaro vs. Embisan, 2
SCRA 598 [1961]). Mere allegation is not an evidence (Lagasca vs. De Vera, 79 Phil. 376
[1947]).
EvenassumingarguendothatRamonaP.AlcarazwasintheUnitedStatesofAmericaon
February 6, 1985, we cannot justify petitionerssellers act of unilaterally and extrajudicially
rescinding the contract of sale, there being no express stipulation authorizing the sellers to
extrajudiciallyrescindthecontractofsale.(cf.Dignos vs. CA, 158 SCRA 375 [1988] Taguba
vs.Vda.DeLeon,132SCRA722[1984])
Moreover,petitionersareestoppedfromraisingtheallegedabsenceofRamonaP.Alcaraz
becausealthoughtheevidenceonrecordshowsthatthesalewasinthenameofRamonaP.
Alcaraz as the buyer, the sellers had been dealing with Concepcion D. Alcaraz, Ramonas
mother,whohadactedforandinbehalfofherdaughter,ifnotalsoinherownbehalf.Indeed,
thedownpaymentwasmadebyConcepcionD.AlcarazwithherownpersonalCheck(Exh.B
Exh.2)forandinbehalfofRamonaP.Alcaraz.Thereisnoevidenceshowingthatpetitioners
ever questioned Concepcions authority to represent Ramona P.Alcaraz when they accepted
herpersonalcheck.Neitherdidtheyraiseanyobjectionasregardspaymentbeingeffectedby
a third person. Accordingly, as far as petitioners are concerned, the physical absence of
RamonaP.Alcarazisnotagroundtorescindthecontractofsale.
Corollarily, Ramona P. Alcaraz cannot even be deemed to be in default, insofar as her
obligation to pay the full purchase price is concerned. Petitioners who are precluded from
setting up the defense of the physical absence of Ramona P. Alcaraz as aboveexplained
offerednoproofwhatsoevertoshowthattheyactuallypresentedthenewtransfercertificateof
titleintheirnamesandsignifiedtheirwillingnessandreadinesstoexecutethedeedofabsolute
saleinaccordancewiththeiragreement.Ramonascorrespondingobligationtopaythebalance
of the purchase price in the amount of P1,190,000.00 (as buyer) never became due and
demandableand,therefore,shecannotbedeemedtohavebeenindefault.
Article 1169 of the Civil Code defines when a party in a contract involving reciprocal
obligationsmaybeconsideredindefault,towit:
Art.1169.Thoseobligedtodeliverortodosomething,incurindelayfromthetimetheobligee
judiciallyorextrajudiciallydemandsfromthemthefulfillmentoftheirobligation.
xxx
Inreciprocalobligations,neitherpartyincursindelayiftheotherdoesnotcomplyorisnotreadyto
complyinapropermannerwithwhatisincumbentuponhim.Fromthemomentoneoftheparties
fulfillhisobligation,delaybytheotherbegins.(Emphasissupplied.)
There is thus neither factual nor legal basis to rescind the contract of sale between
petitionersandrespondents.
Withtheforegoingconclusions,thesaletotheotherpetitioner,CatalinaB.Mabanag,gave
risetoacaseofdoublesalewhereArticle1544oftheCivilCodewillapply,towit:
Art.1544.Ifthesamethingshouldhavebeensoldtodifferentvendees,theownershipshallbe
transferredtothepersonwhomayhavefirsttakenpossessionthereofingoodfaith,ifitshouldbe
movableproperty.
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Shoulditbeimmovableproperty,theownershipshallbelongtothepersonacquiringitwhoingoodfaith
firstrecordeditintheRegistryofProperty.
Shouldtherebenoinscription,theownershipshallpertaintothepersonwhoingoodfaithwasfirstinthe
possessionand,intheabsencethereoftothepersonwhopresentstheoldesttitle,providedthereisgood
faith.
TherecordofthecaseshowsthattheDeedofAbsoluteSaledatedApril25,1985asproof
ofthesecondcontractofsalewasregisteredwiththeRegistryofDeedsofQuezonCitygiving
risetotheissuanceofanewcertificateoftitleinthenameofCatalinaB.MabanagonJune5,
1985.Thus,thesecondparagraphofArticle1544shallapply.
Theabovecitedprovisionondoublesalepresumestitleorownershiptopasstothebuyer,
theexceptionsbeing:(a)whenthesecondbuyer,ingoodfaith,registersthesaleaheadofthe
firstbuyer,and(b)shouldtherebenoinscriptionbyeitherofthetwobuyers,whenthesecond
buyer,ingoodfaith,acquirespossessionofthepropertyaheadofthefirstbuyer. Unless, the
second buyer satisfies these requirements, title or ownership will not transfer to him to the
prejudiceofthefirstbuyer.
In his commentaries on the Civil Code, an accepted authority on the subject, now a
distinguishedmemberoftheCourt,JusticeJoseC.Vitug,explains:
Thegoverningprincipleispriustempore,potiorjure(firstintime,strongerinright).Knowledgebythe
firstbuyerofthesecondsalecannotdefeatthefirstbuyersrightsexceptwhenthesecondbuyerfirst
registersingoodfaiththesecondsale(Olivaresvs.Gonzales,159SCRA33).Conversely,knowledge
gainedbythesecondbuyerofthefirstsaledefeatshisrightsevenifheisfirsttoregister,since
knowledgetaintshisregistrationwithbadfaith(seealsoAstorgavs.CourtofAppeals,G.R.No.58530,
26December1984).InCruzvs.Cabana(G.R.No.56232,22June1984,129SCRA656),itwasheldthat
itisessential,tomerittheprotectionofArt.1544,secondparagraph,thatthesecondrealtybuyermust
actingoodfaithinregisteringhisdeedofsale(citingCarbonellvs.CourtofAppeals,69SCRA99,
Crisostomovs.CA,G.R.No.95843,02September1992).
(J.Vitug,CompendiumofCivilLawandJurisprudence,1993Edition,p.604).
Petitionerspointoutthatthenoticeoflispendensinthecaseatbarwasannotatedonthe
title of the subject property only on February 22, 1985, whereas, the second sale between
petitioners Coronels and petitioner Mabanag was supposedly perfected prior thereto or on
February 18, 1985. The idea conveyed is that at the time petitioner Mabanag, the second
buyer, bought the property under a clean title, she was unaware of any adverse claim or
previoussale,forwhichreasonsheisabuyeringoodfaith.
Wearenotpersuadedbysuchargument.
In a case of double sale, what finds relevance and materiality is not whether or not the
secondbuyeringoodfaithbutwhetherornotsaidsecondbuyerregisterssuchsecondsalein
goodfaith,thatis,withoutknowledgeofanydefectinthetitleofthepropertysold.
As clearly borne out by the evidence in this case, petitioner Mabanag could not have in
goodfaith,registeredthesaleenteredintoonFebruary18,1985becauseasearlyasFebruary
22,1985,anoticeoflispendens had been annotated on the transfer certificate of title in the
names of petitioners, whereas petitioner Mabanag registered the said sale sometime inApril,
1985. At the time of registration, therefore, petitioner Mabanag knew that the same property
had already been previously sold to private respondents, or, at least, she was charged with
knowledge that a previous buyer is claiming title to the same property. Petitioner Mabanag
cannot close her eyes to the defect in petitioners title to the property at the time of the
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registrationoftheproperty.
ThisCourthadoccasionstorulethat:
Ifavendeeinadoublesaleregistersthesaleafterhehasacquiredknowledgethattherewasaprevious
saleofthesamepropertytoathirdpartyorthatanotherpersonclaimssaidpropertyinaprevioussale,
theregistrationwillconstitutearegistrationinbadfaithandwillnotconferuponhimanyright.(Salvoro
vs.Tanega,87SCRA349[1978]citingPalarcavs.DirectorofLand,43Phil.146Cagaoanvs.
Cagaoan,43Phil.554Fernandezvs.Mercader,43Phil.581.)
Thus, the sale of the subject parcel of land between petitioners and Ramona P.Alcaraz,
perfectedonFebruary6,1985,priortothatbetweenpetitionersandCatalinaB.Mabanagon
February18,1985,wascorrectlyupheldbyboththecourtsbelow.
Although there may be ample indications that there was in fact an agency between
RamonaasprincipalandConcepcion,hermother,asagentinsofarasthesubjectcontractof
saleisconcerned,theissueofwhetherornotConcepcionwasalsoactinginherownbehalfas
a cobuyer is not squarely raised in the instant petition, nor in such assumption disputed
between mother and daughter. Thus, We will not touch this issue and no longer disturb the
lowercourtsrulingonthispoint.
WHEREFORE, premises considered, the instant petition is hereby DISMISSED and the
appealedjudgmentAFFIRMED.
SOORDERED.
Narvasa,C.J.(Chairman),Davide,Jr.,andFrancisco,JJ.,concur.
Panganiban,J.,nopart.
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ROMULO A. CORONEL, ALARICO A. CORONEL, ANNETTE A. CORONEL,

RulesofCourt).The records are absolutely bereft of any supporting evidence to substantiate

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