Coronel v. CA

ROMULO A. CORONEL, ALARICO A. CORONEL, ANNETTE A. CORONEL, ANNABELLE C. GONZALES (for herself and on behalf of Floraida C. Tupper, as attorney-in-fact), CIELITO A. CORONEL, FLORAIDA A. ALMONTE, and CATALINA BALAIS MABANAG, petitioners, vs. THE COURT OF APPEALS, CONCEPCION D. ALCARAZ and RAMONA PATRICIA ALCARAZ, assisted by GLORIA F. NOEL as attorney-in-fact, respondents.

[GR No. 103577, October 7, 1996]

MELO, J.:

Facts:

On January 19, 1985, Romulo Coronel, et al., executed a document entitled “Receipt of Down Payment” in favour of Ramona Patricia Alcaraz for P50,000.00 down payment for the total amount of P 1.24M price for an inherited house and lot, promising to execute a deed of absolute sale for said property as soon as such has been transferred in their name. The balance of P1.19M is due upon the execution of said deeds. On the same date, Concepcion Alcaraz, mother of Ramona, paid the down payment of P50,000.00. On February 6, 1985, the property originally registered in the name of Coronel’s father was transferred in their names. However, on February 18, 1985, the Coronels sold the property to Catalina Mabanag for P1,580,000.00 after the latter has paid for P30,000.00. For this reason, Coronels cancelled and rescinded the contract with Alcaraz by depositing the downpayment in the bank in trust for Alcaraz.

Alcaraz filed for specific performance against Coronels and caused the annotation of a notice of lis pendens.

Issue:

Whether or not the legal significance of the document entitled “Receipt of Down payment” constitute as a Contract of Sale or Contract to Sell.

Ruling:

The “Receipt of Down Payment” in the case at bar is a Contract of sale.

A Contract of Sale as defined by Article 1458 of the Civil Code is whereby one obligates himself to transfer ownership and to deliver a determinate thing, and the other to pay thereof a price certain in money or its equivalent. Sale, by its very nature, is a consensual contract because it is perfected by mere consent.  The essential elements of a contract of sale are the following:

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.

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 explicitly reserves the transfer of title to the prospective buyer, meaning, the prospective seller does not as yet agree or consent to transfer ownership of the property subject of the contract to sell until the happening of an event, which for present purposes we shall take as the full payment of the purchase price. When the “Receipt of Down payment” is considered in its entirety, it becomes more manifest that there was a clear intent on the part of petitioners to transfer title to the buyer, but since the transfer certificate of title was still in the name of petitioner’s father, they could not fully effect such transfer although the buyer was then willing and able to immediately pay the purchase price.  Therefore, petitioners-sellers undertook upon receipt of the down payment from private respondent Ramona P. Alcaraz, to cause the issuance of a new certificate of title in their names from that of their father, after which, they promised to present said title, now in their names, to the latter and to execute the deed of absolute sale whereupon, the latter shall, in turn, pay the entire balance of the purchase price. Furthermore, the agreement could not have been a contract to sell because the sellers herein made no express reservation of ownership or title to the subject parcel of land.