De Leon vs. Benita T.

Ong
GR No. 170405, Feb. 2, 2010
Absolute and Conditional Sales
Facts:
On March 10, 1993, Raymundo S. De Leon (petitioner) sold 3 parcels oI land to Benita T. Ong
(respondent). The said properties were mortgaged to a Iinancial institution; Real Savings & Loan
Association Inc. (RSLAI). The parties then executed a notarized deed oI absolute sale with
assumption oI mortgage. As indicated in the deed oI mortgage, the parties stipulated that the
petitioner (de leon) shall execute a deed oI assumption oI mortgage in Iavor oI Ong (respondent)
aIter Iull payment oI the P415,000. They also agreed that the respondent (Ong) shall assume the
mortgage. The respondent then subsequently gave petitioner P415,000 as partial payment. On the
other hand, de leon handed the keys to Ong and de leon wrote a letter to inIorm RSLAI that the
mortgage will be assumed by Ong. ThereaIter, the respondent took repairs and made
improvements in the properties. Subsequently, respondent learned that the same properties were
sold to a certain Viloria aIter March 10, 1993 and changed the locks, rendering the keys given to
her useless. Respondent proceeded to RSLAI but she was inIormed that the mortgage has been
Iully paid and that the titles have been given to the said person. Respondent then Iiled a complaint
Ior speciIic perIormance and declaration oI nullity oI the second sale and damages. The petitioner
contended that respondent does not have a cause oI action against him because the sale was
subject to a condition which requires the approval oI RSLAI oI the mortgage. Petitioner reiterated
that they only entered into a contract to sell. The RTC dismissed the case. On appeal, the CA
upheld the sale to respondent and nulliIied the sale to Viloria. Petitioner moved Ior
reconsideration to the SC.
Issue:
Whether the parties entered into a contract oI sale or a contract to sell?
Held:
In a contract oI sale, the seller conveys ownership oI the property to the buyer upon the perIection
oI the contract. The non-payment oI the price is a negative resolutory condition. Contract to sell
is subject to a positive suspensive condition. The buyer does not acquire ownership oI the
property until he Iully pays the purchase price.
In the present case, the deed executed by the parties did not show that the owner intends to
reserve ownership oI the properties. The terms and conditions aIIected only the manner oI
payment and not the immediate transIer oI ownership. It was clear that the owner intended a sale
because he unqualiIiedly delivered and transIerred ownership oI the properties to the respondent.