HEIRS OF JESUS M. MASCUÑANA v. CA

FACTS:

Gertrudis Wuthrich and her six siblings co-owned a parcel of land. Over time, Gertrudis and two other co-owners sold their shares to Jesus Mascuñana. Mascuñana then sold a portion of his share to Diosdado Sumilhig. Mascuñana and Sumilhig executed a Deed of Absolute Sale for the portion of land. A survey was conducted, and the portion deeded to Sumilhig was identified as Lot No. 124-B. Mascuñana died intestate, and Sumilhig sold the portion to Corazon Layumas. Layumas subdivided the property and took possession. The heirs of Mascuñana filed a complaint for recovery of possession and damages, while Barte admitted his occupation of the property but claimed permission from Rodolfo Layumas. Spouses Layumas filed a motion to intervene, claiming ownership as buyers from Sumilhig.

In the case, the petitioners filed a complaint against Aquilino Barte and the spouses Layumas for quieting of title, annulment of documents, and recovery of possession. The spouses Layumas claimed ownership over the entire Lot No. 124-B-1 and argued that they purchased it in 1968. They alleged that the petitioners had no cause of action against Barte as they had authorized his occupation of a portion of the lot. The spouses Layumas also counterclaimed for damages.

During the trial, intervenor Rodolfo Layumas testified that he and his wife purchased the lot in 1968 without any objection from the petitioners. He allowed a religious organization to construct a chapel on the disputed lot in 1970, and Barte was allowed to occupy a portion of the lot in 1985. Rodolfo admitted that he did not fence the property immediately after purchasing it and only filed an adverse claim in 1986.

After the trial, the court ruled in favor of Barte and the spouses Layumas. The court dismissed the complaint, ordered the plaintiffs to pay moral damages and attorney's fees to the spouses Layumas, and compelled the plaintiffs to comply with the obligations under the Deed of Absolute Sale.

The petitioners appealed the decision of the trial court to the Court of Appeals, arguing that the contract between Cipriano Mascuñana and Diosdado Sumilhig was a contract to sell rather than a contract of sale. The CA affirmed the decision of the trial court, ruling that the contract was indeed a contract of sale. The CA considered the designation of the contract as a "Deed of Absolute Sale" and the various stipulations indicating the intention to transfer ownership. The CA also considered Cipriano's declarations as evidence against him and his predecessors-in-interest.

ISSUES:

  1. Whether the contract between the petitioners’ father and Sumilhig was a contract to sell or a contract of sale.

  2. Whether Diosdado Sumilhig had the right to sell the property in favor of intervenor Corazon Layumas.

  3. Whether the petitioners have legal and factual basis to assert ownership over the disputed property.

  4. Whether the respondents acquired ownership over the property through a perfected contract of sale.

  5. Whether the contract between the parties is a deed of sale or a contract to sell.

  6. Whether the condition in the deed regarding payment of the balance affects the efficacy of the contract of sale.

  7. Whether the vendor can unilaterally rescind the contract of sale.

RULING:

  1. The Court of Appeals affirmed the decision of the trial court, ruling that the contract between the petitioners’ father and Sumilhig was a contract of sale. The court considered the deed of absolute sale, the clear intention of the vendor to alienate the property, and the declarations made by the vendor that Sumilhig was already the owner of the disputed land. The court also ruled that the payment of the balance of the purchase price was only a suspensive condition and did not affect the effectivity of the contract. Furthermore, the registration of the land to be sold was not a prerequisite to a contract of sale.

  2. The petitioners' contention has no factual and legal bases. The evidence on record shows that the heirs of vendor Jesus Mascuñana acknowledged Diosdado Sumilhig as the owner of the property. The petitioners secured title over the property only after the respondents rejected their offer to buy the property. Therefore, the petitioners' claim of ownership lacks basis.

  3. Yes, the respondents acquired ownership over the property through a perfected contract of sale. The deed of sale executed by Jesus Mascuñana in favor of Diosdado Sumilhig was a perfected contract of sale. It is settled that a perfected contract of sale cannot be challenged on the ground of non-transfer of ownership of the property at the time of the perfection of the contract. The transfer of ownership takes effect upon the execution of a public instrument covering the real property. The record of the sale with the Register of Deeds and the issuance of the certificate of title in the buyer's name merely bind third parties to the sale.

  4. The contract between the parties is a deed of sale. The contract is devoid of any proviso that title is reserved or the right to unilaterally rescind is stipulated. Ownership is transferred to the buyer upon actual or constructive delivery of the property sold.

  5. The condition in the deed regarding payment of the balance does not affect the efficacy of the contract of sale. It merely provides the manner by which the total purchase price of the property is to be paid.

  6. The vendor cannot unilaterally rescind the contract of sale unless there is an express stipulation authorizing it. In the absence of such stipulation, the vendor may file an action for specific performance or judicial rescission.

PRINCIPLES:

  • Only questions of law may be raised in the Supreme Court under Rule 45 of the Rules of Court.

  • The findings and conclusions of the trial court and the Court of Appeals are conclusive on the Court, unless there is evidence that they ignored, misinterpreted, or misconstrued facts and circumstances of substance.

  • The payment of the balance of the purchase price in a contract of sale may be a suspensive condition, but it does not affect the effectivity of the contract.

  • Registration of the land to be sold is not a prerequisite to a contract of sale.

  • A perfected contract of sale cannot be challenged on the ground of non-transfer of ownership at the time of the perfection of the contract. The transfer of ownership occurs upon the execution of a public instrument covering the real property. (Article 1458, New Civil Code)

  • The record of sale with the Register of Deeds and the issuance of the certificate of title in the buyer's name bind third parties to the sale. (Doctrine of Constructive Notice)

  • In a contract of sale, ownership is transferred to the vendee upon the actual or constructive delivery of the property sold.

  • A deed of sale is considered absolute when there is no reservation of title or stipulation giving the vendor the right to unilaterally resolve the contract.

  • The non-payment of the price in a contract of sale is a resolutory condition which extinguishes the transaction and discharges the obligation created.

  • In reciprocal obligations, delay by one party begins from the moment the other party fulfills their obligation.