Cruz v. Fernando
REITERATIONFacts
The Antecedents: Petitioners, Spouses Luis V. Cruz and Aida Cruz, occupied the front portion of a 710-square meter property in Baliuag, Bulacan. Respondents, Spouses Alejandro Fernando, Sr. and Rita Fernando, filed a complaint for accion publiciana against petitioners, claiming ownership of the property by purchase from the Gloriosos via a Deed of Sale dated March 9, 1987. Respondents alleged that prior to their purchase, the Gloriosos had offered to sell a portion of the property to petitioners, evidenced by a Kasunduan dated August 6, 1983, but the transaction did not materialize due to petitioners' failure to exercise their option. Petitioners refused to vacate the premises despite repeated demands. Procedural History: Petitioners' Motion to Dismiss was denied by the RTC. In their Answer, petitioners asserted that the Kasunduan was a perfected contract of sale, partially consummated by their relocation of their house, and that the Gloriosos prevented its full consummation. They also claimed respondents were buyers in bad faith. The RTC ruled in favor of respondents, ordering petitioners to vacate and pay rentals. The Court of Appeals affirmed the RTC decision. The Petition: Petitioners seek review, raising issues on whether the Kasunduan was a perfected contract of sale or a mere offer, whether accion publiciana was the proper remedy, and whether they should be held liable for rentals.
Issue(s)
Whether the Court of Appeals erred in holding that the Kasunduan was a mere offer to sell and not a perfected contract of sale. Whether the Court of Appeals erred in not holding that the remedy of the vendors was to ask the Court to fix the period for payment, not accion publiciana. Whether the Court of Appeals erred in not ordering respondents to deliver the back portion of the lot upon payment by petitioners, and whether respondents are buyers in bad faith. Whether the Court of Appeals erred in affirming the decision ordering petitioners, possessors in good faith, to pay rentals, and regarding the claim for compensation for improvements.
Ruling
The petition is DENIED. The Decision of the Court of Appeals dated October 3, 2000 in CA-G.R. CV No. 61247 is AFFIRMED.
Ratio Decidendi
On whether the Kasunduan was a perfected contract of sale or a mere offer to sell: The Court held that the Kasunduan was a contract to sell, not a contract of sale. This conclusion was based on the absence of a definite manner of payment of the purchase price, which is an essential element for a valid contract of sale. Furthermore, the stipulation that petitioners would "definitely relocate their house to the portion they bought or will buy by January 31, 1984" indicated that the sale was yet to be consummated and ownership remained with the Gloriosos. The use of the alternative term "mabibili" (will buy) further supported this interpretation. The absence of a formal deed of conveyance also indicated that an immediate transfer of ownership was not intended by the parties. On whether accion publiciana was the proper remedy and the issue of period for payment: The Court found that petitioners' arguments regarding the need for specific performance or judicial rescission, and the lack of a fixed period for payment, were raised for the first time on appeal and were thus barred by estoppel. Moreover, respondents, not being parties to the Kasunduan, had no standing to ask the court to fix a period. It would have been petitioners' recourse to seek enforcement if they believed they had an actionable contract. The Court also noted that there was no need for judicial rescission because the obligation of the Gloriosos to transfer the property had not yet arisen due to the non-fulfillment of suspensive conditions. On whether respondents are buyers in bad faith and the issue of ordering respondents to deliver the back portion of the lot: The Court rejected the claim that respondents were buyers in bad faith. Citing Coronel v. Court of Appeals, the Court explained that in a contract to sell, a third person buying the property after the fulfillment of suspensive conditions is not a buyer in bad faith, and there is no double sale. The title transfers to the buyer after registration, and the owner-seller may be sued for damages by the intending buyer. In this case, the suspensive conditions were not fulfilled, thus preventing the transfer of title to petitioners. On the liability for rentals and improvements: The Court affirmed the RTC's ruling that petitioners were bound to pay reasonable rentals for their continued occupation of the property, which was deemed unlawful after the Kasunduan became ineffective. The claim for compensation for improvements was also dismissed as it was raised for the first time on appeal, making it barred by estoppel. The Court reiterated that a person occupying another's land at the latter's forbearance without a contract is bound to vacate upon demand.
Main Doctrine
A 'Kasunduan' that lacks a definite agreement on the manner of payment of the purchase price and requires the relocation of a house by a specific date constitutes a contract to sell, not a contract of sale. Failure to comply with such suspensive conditions renders the contract ineffective and prevents the obligation to transfer title from arising.