Heirs of Mascuñana v. Court of Appeals
REITERATIONFacts
The Antecedents: Gertrudis Wuthrich and siblings co-owned a parcel of land. Gertrudis and two others sold their shares to Jesus Mascuñana. Mascuñana sold a portion of his share to Diosdado Sumilhig via a Deed of Absolute Sale on August 12, 1961, with a balance of ₱1,000.00 payable upon survey, segregation, and issuance of a separate title to Sumilhig. Mascuñana died intestate in 1965. Sumilhig sold a portion of Lot No. 124-B (469 sq. meters) to spouses Rodolfo and Corazon Layumas in 1968. The Layumas spouses subdivided the property, resulting in Lot No. 124-B-2 (71 sq. meters) in Jesus Mascuñana's name and Lot No. 124-B-1 (469 sq. meters) in their names. The Layumas spouses took possession, allowed a chapel to be built, and permitted Aquilino Barte to stay on a portion to ward off squatters. In 1985, Corazon Layumas offered to pay the ₱1,000.00 balance to Jesus Mascuñana's heirs. Unknown to the Layumas spouses, TCT No. 8986 was issued in Jesus Mascuñana's name over Lot No. 124-B on March 17, 1986. Procedural History: The heirs of Jesus Mascuñana filed a complaint for recovery of possession and damages against Aquilino Barte, alleging ownership by successional rights and Barte's surreptitious entry. The spouses Layumas intervened, claiming ownership as buyers from Sumilhig, who bought from Mascuñana. They asserted they were the true owners and that petitioners were estopped from denying their ownership. The RTC dismissed the complaint and ruled in favor of the intervenors and defendant, ordering the dismissal of the complaint, payment of damages and attorney's fees, and compliance with the obligation to segregate the lot and execute a final deed of sale. The CA affirmed the RTC decision. The Petition: The heirs of Mascuñana filed a petition for review on certiorari, raising the sole issue of whether the sale between Jesus Mascuñana and Diosdado Sumilhig was a contract to sell or a contract of sale.
Issue(s)
Whether the Deed of Absolute Sale dated August 12, 1961, between Jesus Mascuñana and Diosdado Sumilhig was a contract to sell or a contract of sale. Whether Diosdado Sumilhig had the right to sell the property to Corazon Layumas in 1968.
Ruling
The petition is denied for lack of merit. The Court affirmed the decision of the Court of Appeals, which upheld the Regional Trial Court's ruling that the transaction between Jesus Mascuñana and Diosdado Sumilhig was a contract of sale, and that the respondents were the lawful owners of the property.
Ratio Decidendi
On whether the sale was a contract to sell or a contract of sale: The Court held that the Deed of Absolute Sale executed by Jesus Mascuñana in favor of Diosdado Sumilhig on August 12, 1961, was a perfected contract of sale. The denomination of the contract as a "Deed of Absolute Sale" and the stipulations therein clearly indicated the intention to alienate the property. The condition regarding the payment of the ₱1,000.00 balance, which was to be paid "as soon as the above-portions of Lot 124 shall have been surveyed in the name of the VENDEE and all papers pertinent and necessary to the issuance of a separate Certificate of Title in the name of the VENDEE shall have been prepared," was not a suspensive condition that prevented the perfection or effectivity of the contract. Instead, it merely provided the manner and time for the payment of the balance. The Court reiterated that in a contract of sale, ownership is transferred upon delivery, and the execution of a public instrument is equivalent to delivery unless the contrary appears. The fact that Mascuñana was not yet the registered owner at the time of the sale did not prevent the transfer of ownership between the seller and the buyer, as registration is primarily for the protection of third parties. Furthermore, the subsequent actions of Mascuñana's heirs, including an offer to buy the property from the respondents and the issuance of a title in the name of the deceased Mascuñana after the respondents had already taken possession, demonstrated an acknowledgment of Sumilhig's and the respondents' ownership. On whether Diosdado Sumilhig had the right to sell the property to Corazon Layumas: Since the Court established that the transaction between Mascuñana and Sumilhig was a perfected contract of sale, Sumilhig, as the vendee, acquired ownership over the property upon delivery. Consequently, he had the right to sell the property to Corazon Layumas. The respondents, as successors-in-interest of Sumilhig, were deemed to have acquired valid ownership and possession of the property. The Court noted that the respondents had been in actual possession of the property long before the petitioners secured a Torrens title, and that the petitioners' claim of ownership was undermined by their own actions, such as one heir offering to buy the property from the respondents.
Main Doctrine
A contract denominated as a 'Deed of Absolute Sale' is considered a contract of sale, not a contract to sell, even if the payment of the balance is conditioned upon the survey and segregation of the property and the issuance of a separate title, as long as there is no stipulation reserving ownership with the seller or granting the seller the right to unilaterally rescind the contract upon the buyer's failure to pay within a fixed period. The execution of a public instrument is equivalent to delivery, transferring ownership between the seller and buyer, even if the seller was not yet the registered owner at the time of the sale.