FACTS:

In the first case, the Manzanos entered into a notarized agreement with the Domingos to sell a property. The Domingos made partial payments but failed to pay the full amount by the agreed deadline. Despite this, the Manzanos' attorney advised the Domingos to continue making payments. However, when the Domingos offered to pay the remaining balance, Tita Manzano refused and declared that the property was no longer for sale. The Domingos filed a complaint for specific performance against the Manzanos and Aquino, who had purchased the property. The trial court ruled in favor of the Domingos, ordering the Manzanos to execute a deed of sale in favor of the Domingos and canceling Aquino's title.

In the second case, Aquino filed a complaint against the Manzanos and Estabillo for specific performance, alleging that she entered into a contract to buy a property from them. The trial court ruled in favor of Aquino, ordering the defendants to transfer the title and pay damages. On appeal, the Court of Appeals agreed with the defendants, finding that the contract was a contract to sell. The CA ruled that Art. 1544 of the Civil Code, which applies to double sales, does not apply in this case because a contract to sell is different from a contract of sale. Aquino appealed the CA's decision to the Supreme Court.

In the third case, the Zarates entered into a contract to sell a property to the Carlstons. The contract stated that the full payment of the purchase price was a condition for the transfer of ownership. However, the Zarates failed to pay the full amount, leading the Carlstons to file a complaint. The trial court ruled in favor of the Carlstons, ordering the transfer of ownership. On appeal, the Court of Appeals affirmed the trial court's decision. The Zarates argued that the contract was a contract to sell and non-payment of the purchase price rendered the contract ineffective.

ISSUES:

1. Whether the contract between the parties was a contract to sell.

2. Whether Article 1544 of the Civil Code is applicable to the case.

3. Whether specific performance is the proper remedy for the reconveyance of the property.

4. Whether the appellant can be considered in bad faith.

5. Whether or not Article 1544 of the Civil Code is applicable to the case.

6. Whether or not the Court of Appeals erred in not affirming the decision of the Regional Trial Court of Caloocan City.

7. Can the respondent raise the issue pertaining to Article 1544 for the first time on appeal?

RULING:

1. The contract between the parties was a contract to sell.

2. Article 1544 of the Civil Code is not applicable to the case.

3. Specific performance is not the proper remedy for the reconveyance of the property.

4. The appellant cannot be considered in bad faith.

5. The Court held that Article 1544 of the Civil Code is not applicable to the case. The Court affirmed the decision of the Court of Appeals, which upheld the validity of the sale of the subject property in favor of appellant Carmelita Aquino. The Court also ordered the defendants to reimburse the appellees the installment payments they have made on the property, as well as pay nominal damages and reasonable attorney's fees to the appellees.

6. The respondent can raise the issue pertaining to Article 1544 for the first time on appeal because the relevance of Article 1544 was tackled only in the trial court's decision.

7. Does Article 1544 apply to the present case?

8. Article 1544 does not apply to the present case. In a contract to sell, payment of the price is a positive suspensive condition, failure of which is not a breach of contract warranting rescission but rather just an event that prevents the prospective buyer from compelling the prospective seller to convey title. The non-fulfillment of the condition of full payment renders the contract to sell ineffective and without force and effect. Therefore, since there was never a sale in favor of the petitioners due to their failure to pay the purchase price in full, there could be no double sale to justify the application of Article 1544. As far as the court is concerned, there is only one valid sale, which is in favor of the respondent.

PRINCIPLES:

• A contract to sell is different from a contract of sale because in a contract to sell, the seller reserves the transfer of title to the buyer until full payment is made.

• In contracts to sell, specific performance is not the proper remedy to compel the seller to execute the deed of sale before full payment of the purchase price.

• A subsequent buyer in bad faith does not affect a prior contract to sell.

• In a contract to sell, there is no double sale if a third person purchases the property after the fulfillment of the suspensive condition.

• The Realty Installment Buyer Act (R.A. 6552) is applicable to contracts to sell realty on installments.

• The buyer in a contract to sell is entitled to reimbursement of the sums they have paid and nominal damages against the seller.

• The provisions of Republic Act No. 6552, also known as the Realty Installment Buyer Protection Act, apply to contracts to sell realty on installments.

• In transactions or contracts involving the sale or financing of real estate on installment payments, the buyer is entitled to certain rights in case of default in payment.

• Acceptance of late installments by the seller waives the original period for payment and binds the seller and his principals to comply with the consequences thereof.

• The unilateral cancellation of a contract and subsequent sale without reimbursing the buyer of their payments may warrant the grant of attorney's fees and costs to the buyer.

• In a contract to sell, payment of the price is a positive suspensive condition, failure of which renders the contract ineffective and without force and effect.

• The non-fulfillment of the condition of full payment precludes the obligation to sell from arising and retains ownership with the prospective seller.

• The rule on double sales under Article 1544 does not apply if there is only one valid sale and the other party failed to pay the purchase price in full.

• A notice of adverse claim is a warning to third parties of someone claiming an interest in the property or asserting a better right than the registered owner, but it does not hold true if the contract to sell is rendered ineffective due to non-payment of the purchase price in full.