FIRST
DIVISION
|
SPOUSES ONNIE SERRANO AND AMPARO
HERRERA, Petitioners, - versus - GODOFREDO CAGUIAT, Respondent. |
G.R. No. 139173 Present: puno, C.J.,
Chairperson, Sandoval-Gutierrez, *AZCUNA, and GARCIA, JJ. Promulgated: February 28, 2007 |
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SANDOVAL-GUTIERREZ, J.:
Before us is a petition for review
on certiorari under Rule 45 of the 1997 Rules of Civil Procedure, as amended,
assailing the Decision[1]
of the Court of Appeals dated
Spouses Onnie and Amparo Herrera,
petitioners, are the registered owners of a lot located in Las Piñas, Metro
Manila covered by Transfer Certificate of Title No. T-9905.
Sometime in March 1990, Godofredo
Caguiat, respondent, offered to buy the lot. Petitioners agreed to sell it at P1,500.00
per square meter. Respondent then gave petitioners P100,000.00 as
partial payment. In turn, petitioners gave
respondent the corresponding receipt stating that respondent promised to pay
the balance of the purchase price on or before
Las Piñas, Metro
RECEIPT FOR PARTIAL PAYMENT OF
RECEIVED FROM MR. GODOFREDO
CAGUIAT THE AMOUNT OF ONE HUNDRED THOUSAND PESOS (P100,000.00) AS PARTIAL
PAYMENT OF OUR
MR.
CAGUIAT PROMISED TO PAY THE BALANCE OF THE PURCHASE PRICE ON OR BEFORE
SIGNED THIS 19TH DAY OF MARCH,
1990 AT LAS PIÑAS, M.M.
(SGD)
AMPARO HERRERA (SGD) ONNIE
SERRANO”[2]
On
On P100,000.00 anytime.
Again, on P100,000.00 payable to him.
In view of the cancellation of the
contract by petitioners, respondent filed with the Regional Trial Court, Branch
63,
On
x x x
In the evaluation of the evidence presented
by the parties as to the issue as to who was ready to comply with his
obligation on the verbal agreement to sell on March 23, 1990, shows that
plaintiff’s position deserves more weight and credibility. First, the P100,000.00 that plaintiff
paid whether as downpayment or earnest money showed that there was already a
perfected contract. Art. 1482 of the
Civil Code of the
‘Art. 1482. Whenever earnest money is given
in a contract of sale, it shall be considered as part of the price and as proof
of the perfection of the contract.’
Second, plaintiff was the first to react to
show his eagerness to push through with the sale by sending defendants the
letter dated
On appeal, the Court of
Appeals, in its assailed Decision of
Forthwith, petitioners
filed their motion for reconsideration but it was denied by the appellate court
in its Resolution[8] dated
Hence, the present recourse.
The basic issue to be resolved is whether the document entitled “Receipt for Partial Payment” signed by both parties earlier mentioned is a contract to sell or a contract of sale.
Petitioners contend that the Receipt is not a
perfected contract of sale as provided for in Article 1458[9] in relation to Article 1475[10] of the Civil Code. The
delivery to them of P100,000.00 as down payment cannot be considered as
proof of the perfection of a contract of sale under Article 1482[11] of the same Code since there was no clear agreement between
the parties as to the amount of consideration.
Generally, the findings of fact of
the lower courts are entitled to great weight and should not be disturbed except
for cogent reasons.14 Indeed, they
should not be changed on appeal in the absence of a clear showing that the
trial court overlooked, disregarded, or misinterpreted some facts of weight and
significance, which if considered would have altered the result of the case.[12] In the present case, we find that both the
trial court and the Court of Appeals interpreted some significant facts resulting
in an erroneous resolution of the issue involved.
In
holding that there is a perfected contract
of sale, both courts mainly relied on
the earnest money given by respondent to petitioners. They invoked Article 1482 of the Civil Code which provides that
"Whenever earnest money is given in a contract of sale, it shall be
considered as part of the price and as proof of the perfection of the
contract."
We are not convinced.
In San Miguel Properties
Philippines, Inc. v. Spouses Huang,[13]
we held that the stages of a contract of sale are: (1) negotiation,
covering the period from the time the prospective contracting parties indicate
interest in the contract to the time the contract is perfected; (2) perfection,
which takes place upon the concurrence of the essential elements of the sale,
which is the meeting of the minds of the parties as to the object of the
contract and upon the price; and (3) consummation, which begins when the
parties perform their respective undertakings under the contract of sale,
culminating in the extinguishment thereof.
With the above postulates
as guidelines, we now proceed to determine the real nature of the contract
entered into by the parties.
It is a canon in the
interpretation of contracts that the words used therein should be given their
natural and ordinary meaning unless a technical meaning was intended.[14] Thus, when petitioners declared in the said
“Receipt for Partial Payment” that they –
RECEIVED FROM MR.
GODOFREDO CAGUIAT THE AMOUNT OF ONE HUNDRED THOUSAND PESOS (P100,000.00)
AS PARTIAL PAYMENT OF OUR
MR.
CAGUIAT PROMISED TO PAY THE BALANCE OF THE PURCHASE PRICE ON OR BEFORE
there can be
no other interpretation than that they agreed to a conditional contract of
sale, consummation of which is subject only to the full payment of the purchase
price.
A contract
to sell is akin to a conditional sale where the efficacy or obligatory force of
the vendor's obligation to transfer title is subordinated to the happening of a
future and uncertain event, so that if the suspensive condition does not take
place, the parties would stand as if the conditional obligation had never
existed. The suspensive condition is
commonly full payment of the purchase price.[15]
The differences between a contract to sell and a contract of sale
are well-settled in jurisprudence. As
early as 1951, in Sing Yee v. Santos,[16] we held that:
x x x
[a] distinction must be made between a contract of sale in which title passes
to the buyer upon delivery of the thing sold and a contract to sell x x x where by agreement the
ownership is reserved in the seller and is not to pass until the full payment,
of the purchase price is made. In the
first case, non-payment of the price is a negative resolutory
condition; in the second case, full payment is a positive suspensive
condition. Being contraries, their
effect in law cannot be identical. In
the first case, the vendor has lost and cannot recover the ownership of the
land sold until and unless the contract of sale is itself resolved and set
aside. In the second case, however, the
title remains in the vendor if the vendee does not comply with the condition
precedent of making payment at the time specified in the contract.
In other words, in a contract to sell, ownership is
retained by the seller and is not to pass to the buyer until full payment of
the price.[17]
In this case, the “Receipt
for Partial Payment” shows that the true agreement between the parties is a contract
to sell.
First, ownership over the
property was retained by petitioners and was not to pass to respondent until
full payment of the purchase price. Thus,
petitioners need not push through with the sale should respondent fail to remit
the balance of the purchase price before the deadline on
Second, the agreement between
the parties was not embodied in a deed of sale. The absence of a formal deed of conveyance
is a strong indication that the parties did not intend immediate transfer of
ownership, but only a transfer after full payment of the purchase price.[19]
Third, petitioners retained
possession of the certificate of title of the lot. This is an additional indication that the
agreement did not transfer to respondent, either by actual or constructive
delivery, ownership of the property.[20]
It is true that 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.” However,
this article speaks of earnest money given in a contract of sale. In this case, the earnest money was given
in a contract to sell. The earnest
money forms part of the consideration only if the sale is consummated upon full
payment of the purchase price.[21] Now,
since the earnest money was given in a contract to sell, Article 1482, which
speaks of a contract of sale, does not apply.
As previously discussed, the suspensive condition (payment of the
balance by respondent) did not take place.
Clearly, respondent cannot compel petitioners to transfer ownership of
the property to him.
WHEREFORE,
we GRANT the instant Petition for Review. The challenged Decision of the Court of
Appeals is REVERSED
and respondent’s complaint is DISMISSED.
SO ORDERED.
ANGELINA SANDOVAL-GUTIERREZ
Associate Justice
WE CONCUR:
|
REYNATO S. PUNO Chief Justice Chairperson |
|
|
RENATO
C. CORONA Associate
Justice |
(On
official leave) ADOLFO
S. AZCUNA Associate
Justice |
|
CANCIO
C. GARCIA Associate
Justice |
|
REYNATO S. PUNO
Chief Justice
* On official leave.
[1] Penned by Associate Justice Conchita Carpio Morales (now a member of this Court) and concurred in by Associate Justice Jainal D. Rasul and Associate Justice Bernardo P. Abesamis (both retired).
[2] Exhibit “B,” Records, p. 124.
[3] Exhibit “D,” id., p. 125.
[4] Exhibit “2,” id., p. 173.
[5] Exhibit “5,” Rollo, p. 177.
[6] Records, pp. 1-4.
[7]
[8]
[9] Article 1458. 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 himself to pay therefore a price certain in money or its equivalent.
A contract of sale may be absolute or conditional.
[10] Article 1475. The contract of sale is perfected at the moment there is a 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.
[11] Article 1482. Whenever earnest money is given in a contract of sale, it shall be considered as part of the price and as proof of the perfection of the contract.
[12] Gamaliel C. Villanueva and Irene C. Villanueva v. Court of Appeals, Spouses Jose and Leonila Dela Cruz, and Spouses Guido and Felicitas Pile, G.R. No. 107624, January 28, 1997, 267 SCRA 89.
[13] G.R. No. 137290,
[14] Tan v.
Court of Appeals, G.R. No. 100942,
[15] Philippine
National Bank v. Court of Appeals and Lapaz Kaw Ngo, G.R.
No. 119580, September 26, 1996, citing Rose Packing Co., Inc. v.
Court of Appeals, 167 SCRA 309, 318 (1988) and Lim v. Court of
Appeals, 182 SCRA 564, 670 (1990), with citations.
[16] 47 O.G. 6372 (1951).
[17]
[18] Tomas K. Chua
v. Court of Appeals and Encarnacion Valdes-Choy, G.R. No. 119255,
[19]
[20]
[21]