#1G.R. No. 145470. December 9, 2005.

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SPS. LUIS V. CRUZ and AIDA CRUZ, petitioners, vs. SPS. ALEJANDRO FERNANDO, SR., and
RITA FERNANDO, respondents.

FACTS:
Respondents herein filed before the RTC a complaint for accion publiciana against petitioners,
demanding the latter to vacate the premises which the petitioners are occupying the front portion.
They alleged that they are the owners of the property having bought it from certain Gloriosos, who
prior to the sale of the property, offered to sell to petitioners the rear portion of the property but the
latter failed to exercise their option. That said offer to sell is embodied in a Kasunduan before the
Brgy. Captain. So it was the herein respondents who bought the whole property.

Petitioners answered that the Kasunduan is a perfected contract of sale, and that it has
already been partially consummated as they relocated their house from the rear portion of the lot to
the front portion. RTC dismissed dismissed the case for lack of merit and ordered defendants to
vacate the lot and to pay reasonable rental.

On appeal, the CA affirmed the trial court’s decision. It construed the Kasunduan as a mere
contract to sell and due to petitioner’s failure to pay the price, the Gloriosos were not obliged to
deliver to the petitioners the portion being sold.

Petitioners contentions:
1. insisted that the agreement was a perfected contract of sale, and their failure to pay the
purchase price is immaterial;
2. that respondents have no cause of action as the Kasunduan did not set a period, so there
is no breach of any obligation by petitioners.

ISSUE:
Whether or not the agreement embodied in the Kasunduan was a contract of sale.

RULING:
No. Under Article 1458 of the Civil Code, a contract of sale is a contract by which one of the
contracting parties obligates himself to transfer the ownership and to deliver a determinate thing, and
the other to pay therefor a price certain in money or its equivalent. Article 1475 of the Code further
provides that the contract of sale is perfected at the moment there is meeting of the minds upon the
thing which is the object of the contract and upon the price. From that moment the parties may
reciprocally demand performance subject to the provisions of the law governing the form of contracts.
In a contract of sale, the title to the property passes to the vendee upon the delivery of the
thing sold, as distinguished from a contract to sell where ownership is, by agreement, reserved in the
vendor and is not to pass to the vendee until full payment of the purchase price.8 Otherwise stated, in
a contract of sale, the vendor loses ownership over the property and cannot recover it until and
unless the contract is resolved or rescinded; whereas, in a contract to sell, title is retained by the
vendor until full payment of the price. In the latter contract, payment of the price is a positive
suspensive condition, failure of which is not a breach but an event that prevents the obligation of the
vendor to convey title from becoming effective.

In the instant case:

(1) the conspicuous absence of a definite manner of payment of the purchase price in the agreement
confirms the conclusion that it is a contract to sell. This is because the manner of payment of the
purchase price is an essential element before a valid and binding contract of sale can exist. The
Kasunduan does not establish any definite agreement between the parties concerning the terms of
payment. What it merely provides is the purchase price for the 213-square meter property at P40.00
per square meter;

(2) that a contract of sale is yet to be consummated and ownership of the property remained in the
Gloriosos. Otherwise, why would the alternative term “mabibili” be used if indeed the property had
already been sold to petitioners;
(3) the absence of any formal deed of conveyance is a strong indication that the parties did not intend
immediate transfer of ownership;

(4) aside from the payment of the purchase price, there existed another suspensive condition, i.e.:
that petitioners will relocate their house to the portion they bought or will buy by January 31, 1984.
This condition is a suspensive condition noncompliance of which prevented the Gloriosos from
proceeding with the sale and ultimately transferring title to petitioners; and the Kasunduan from
having obligatory force. It is established by evidence that the petitioners did not transfer their house
located in the front portion of the subject property to the rear portion which, under the Kasunduan,
they intended to buy. Thus, no obligation arose on the part of the Gloriosos to consider the subject
property as having been sold to petitioners because the latter’s non-fulfillment of the suspensive
condition rendered the contract to sell ineffective and unperfected.

(5) there is no need for a judicial rescission of the Kasunduan for the simple reason that the obligation
of the Gloriosos to transfer the property to petitioners has not yet arisen. There can be no rescission
of an obligation that is nonexistent, considering that the suspensive conditions therefor have not yet
happened.

#2G.R. No. 191696. April 10, 2013.

ROGELIO DANTIS, petitioner, vs. JULIO MAGHINANG, JR., respondent.

FACTS:
Petitioner Dantis filed a complaint for quieting of title and recovery of possession with
damages against respondent Julio Maghinang, Jr. before the RTC. He alleged that he is the
registered owner of a parcel of land, that he acquired it from through a deed of extrajudicial partition
of the estate of his deceased father, Emilio Dantis, that respondent Maghinang occupied and built a
house on the property without any right at all, and that his demand to vacate the premises fell on deaf
ears.

Respondent in his answer, he claimed that he was the actual owner of the property, that he
had been in open and continuous possession of the same for almost 30 years, and that it was sold by
Rogelio’s father, Emilio, to his father, Julio Maghinang, Sr.

Defendant Julio Maghinang, Jr., presented by plaintiff as adverse witness, testified that he has
no title over the property, he has not paid real taxes, and he presented an affidavit executed by
Ignacio Dantis, grandfather of Rogelio Dantis. The affidavit, according to affiant Ignacio Dantis,
alleged that Emilio Dantis, father of herein petitioner, agreed to sell the lot to Julio Maghinang on
installment, though he admitted that it was not signed by the alleged vendor, Emilio Dantis, and the
receipt he presented as proof of downpayment was only a photocopy.

The RTC declared Rogelio the true owner of the lot and that there is no oral contract of sale
was entered into between Emilio DAntis and Maghinang, Sr. It ruled that even if the affidavit and said
receipt were adjudged as competent evidence, still they would only serve as proofs that the purchase
price had not yet been completely paid and, hence, Rogelio was not duty-bound to deliver the
property to Julio, JR.

On appeal, the CA reversed the trial court’s decision. It held that the partial payment of the
purchase price, coupled with the delivery of the res, gave efficacy to the oral sale and brought it
outside the operation of the statute of frauds.

ISSUE:
Whether or not there is a perfected contract of sale between Emilio Dantis (fathero of
petitioner) and Julio, Sr.(father of respondent)
RULING:

By the contract of sale, one of the contracting parties obligates himself to transfer the
ownership of, and to deliver, a determinate thing, and the other to pay therefor a price certain in
money or its equivalent. It is a consensual contract that is perfected by mere consent which is
manifested by the meeting of the offer and the acceptance upon the thing and the cause which are to
constitute the contract. Until the contract of sale is perfected, it cannot, as an independent source of
obligation, serve as a binding juridical relation between the parties. The essential elements of a contract of
sale are: a) consent or meeting of the minds, that is, consent to transfer ownership in exchange for the
price; b) determinate subject matter; and c) price certain in money or its equivalent. The absence of any of
the essential elements shall negate the existence of a perfected contract of sale.

In the instant case, Julio, Jr. wanted to prove the sale by a receipt. However, it does not specify a
determinate subject matter. It does not provide a description of the property subject of the sale, including
its metes and bounds, as well as its total area. Also, it does not categorically declare the price certain in
money. Neither does it state the mode of payment of the purchase price and the period for its payment.

The manner of payment of the purchase price was an essential element before a valid and binding
contract of sale could exist. Although the Civil Code does not explicitly provide that the parties must also
agree on the terms or manner of payment for the price, the same is needed, otherwise there is no sale
because any disagreement thereto would tantamount to a failure to agree on the price.

Petition is granted.

#8

G.R. No. 148225 March 3, 2010

CARMEN DEL PRADO, Petitioner,

vs.
SPOUSES ANTONIO L. CABALLERO and LEONARDA CABALLERO, Respondents.

FACTS:
Respondents sold a lot to petitioner Carmen del Prado. In the contract, it was stated that the
land contains an area of 4,000 sq m more or less, bounded on the North by Lot No. 11903, on the East
by Lot No. 11908, on the South by Lot Nos. 11858 & 11912, and on the West by Lot No to be sold for the
price of P40,000.. 11910. When the Original Certificate of Title (OCT) was issued, the area of the lot was
declared to be 14,475 sq m, with an excess of 10,475 sq m.

Petitioner del Prado filed a Petition for Registration of Document Under Presidential Decree 1529
in order that a certificate of title be issued in her name, covering the whole lot. She alleged that the
contract of sale indicated that the sale was for a lump sum, in which case, the vendor was bound to deliver
all that was included within said boundaries even when it exceeded the area specified in the contract.

Respondents opposed that said sale was not for lump sum, and that only 4,000 sq.m.was sold to
petitioner.

RTC ruled that the parties intended the sale to be for lump sum. CA reversed the decision.

ISSUE:
Whether or not the contract of sale is one of a unit price contract.

RULING:
 No. In sales involving real estate, the parties may choose between two types of pricing
agreement: a unit price contract wherein the purchase price is determined by way of reference to a stated
rate per unit area (e.g., ₱1,000 per square meter), or a lump sum contract which states a full purchase
price for an immovable the area of which may be declared based on the estimate or where both the area
and boundaries are stated (e.g., ₱1 million for 1,000 square meters, etc.).

Where both the area and the boundaries of the immovable are declared, the area covered within
the boundaries of the immovable prevails over the stated area. In cases of conflict between areas and
boundaries, it is the latter which should prevail. What really defines a piece of ground is not the area,
calculated with more or less certainty, mentioned in its description, but the boundaries therein laid down,
as enclosing the land and indicating its limits. In a contract of sale of land in a mass, it is well established
that the specific boundaries stated in the contract must control over any statement with respect to the area
contained within its boundaries. It is not of vital consequence that a deed or contract of sale of land should
disclose the area with mathematical accuracy. It is sufficient if its extent is objectively indicated with
sufficient precision to enable one to identify it. An error as to the superficial area is immaterial. Thus, the
obligation of the vendor is to deliver everything within the boundaries, inasmuch as it is the entirety thereof
that distinguishes the determinate object.

In the instant case, the deed of sale is not one of a unit price contract. The parties agreed on the
purchase price of ₱40,000.00 for a predetermined area of 4,000 sq m, more or less, bounded on the North
by Lot No. 11903, on the East by Lot No. 11908, on the South by Lot Nos. 11858 & 11912, and on the
West by Lot No. 11910. In a contract of sale of land in a mass, the specific boundaries stated in the
contract must control over any other statement, with respect to the area contained within its boundaries.
The discrepancy of 10,475 sq m is obviously sizeable and too substantial to be overlooked. It is not a
reasonable excess or deficiency that should be deemed included in the deed of sale.

Petition is denied.