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SPOUSES HERRERA V.

CAGUIAT,
G.R. No. 139173 - February 28, 2007
Justice Sandoval-Gutierrez
Petitioners: sps Onnie Serrano & Amparo Herrera
Respondent: Godofredo Caguiat
FACTS
Petitioners are lot owners in Las Piñas. On Mar 1990, respondent offered to buy the lot and petitioners
agreed to sell it for Php1,500/m2. As partial payment, respondent paid Php100,000, and so the petitioners
respondent a receipt stating that respondent promised to pay the balance on or before 23 Mar 1990. On 28 Mar
1990, respondent wrote petitioners that he is ready to pay the balance of the contract price and requested them
to prepare a Deed of Sale.
Petitioners though informed respondent that Amparo Herrera was leaving for abroad so they were
cancelling the transaction and that respondent may recover the earnest money (Php100,000). Petitioners also
wrote him that they already delivered a manager’s check in the amount of Php100,000 to respondent’s counsel.
Thus, respondent filed a complaint for specific performance and damages with Makati RTC. RTC ruled that
there was already a perfected contract of sale between the parties and ordered petitioners to execute a final Deed
of Sale in favor of respondent. CA affirmed RTC’s decision.

ISSUE/HELD/RATIO
W/N there was a perfected contract of sale
- NO, the transaction was a contract to sell.
- After respondent paid the Php100,000, petitioners issued a receipt of partial payment, which stated that
“Mr. Caguiat promised to pay the balance of the purchase price on or before 23 Mar 1990, and that we
will execute and sign the final deed of sale on this date.”
o Interpretation: they agreed to a conditional deed of sale, which will only be consummated upon
full payment of the purchase price.
- According to the Court, contract to sell is akin to a conditional sale where the obligatory force of the
vendor’s obligation only arises upon the happening of a future and uncertain event, and that if the
condition doesn’t take place, it would be as if he obligation never existed.
- The Court discussed extensively that the receipt of partial payment showed the true agreement between
the parties.
o (1) ownership over the property retained by petitioners and didn’t have to pass it to respondent
until full payment.
o (2) agreement between the parties was not embodied in a deed of sale. The absence of a formal
deed of conveyance is a strong indication, according to the Court, that the parties did not intend
immediate transfer of ownership.
o (3) petitioners retained possession of the certificate title of the lot. This was, according to the
Court, an additional indication that the agreement didn’t transfer to the respondent the
ownership of the property - either by actual or constructive delivery.

JUDGMENT
WHEREFORE, we GRANT the instant Petition for Review. The challenged Decision of the Court of
Appeals is REVERSED and respondents complaint is DISMISSED.

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