G.R. No. 103577. October 7, 1996.

* bad faith and the prospective buyer cannot seek the relief of reconveyance
ROMULO A. CORONEL, ALARICO A. CORONEL, ANNETTE of the property. There is no double sale in such case. Title to the property
A. CORONEL, ANNABELLE C. GONZALES (for herself and on will transfer to the buyer after registration because there is no defect in the
owner-seller’s title per se, but the latter, of course, may be sued for
behalf of Floraida C. Tupper, as attorney-in-fact), CIELITO A.
damages by the intending buyer.
CORONEL, FLORAIDA A. ALMONTE, and CATALINA Same; Same; Same; Same; In a conditional contract of sale, upon
BALAIS MABANAG, petitioners, vs. THE COURT OF the fulfillment of the suspensive condition, the sale becomes absolute and
APPEALS, CONCEPCION D. ALCARAZ and RAMONA this will definitely affect the seller’s title thereto.—In a conditional
PATRICIA ALCARAZ, assisted by GLORIA F. NOEL as contract of sale, however, upon the fulfillment of the suspensive condition,
attorney-in-fact, respondents. the sale becomes absolute and this will definitely affect the seller’s title
thereto. In fact, if there had been
Contracts; Sales; Essential Elements of a Contract of Sale.—Sale, 18
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) 18 SUPREME COURT REPORTS ANNOTATE
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 Coronel vs. Court of Appeals
in money or its equivalent. previous delivery of the subject property, the seller’s ownership or
_______________ title to the property is automatically transferred to the buyer such that, the
seller will no longer have any title to transfer to any third person. Applying
* THIRD DIVISION. Article 1544 of the Civil Code, such second buyer of the property who
may have had actual or constructive knowledge of such defect in the
16
seller’s title, or at least was charged with the obligation to discover such
defect, cannot be a registrant in good faith. Such second buyer cannot
16 SUPREME COURT REPORTS ANNOTATED defeat the first buyer’s title. In case a title is issued to the second buyer, the
first buyer may seek reconveyance of the property subject of the sale.
Coronel vs. Court of Appeals Same; Same; Same; Same; When the sellers declared in the
Same; Same; Words and Phrases; “Contract to Sell” and “Receipt of Down Payment” that they received an amount as purchase
“Contract of Sale,” Distinguished; In a contract to sell, the prospective price for their house and lot without any reservation of title until full
seller explicitly reserves the transfer of title to the prospective buyer, payment of the entire purchase price, the natural and ordinary idea
meaning, the prospective seller does not as yet agree or consent to transfer conveyed is that they sold their property.—It is a canon in the
ownership of the property subject of the contract to sell until the interpretation of contracts that the words used therein should be given their
happening of an event.—Under this definition, a Contract to Sell may not natural and ordinary meaning unless a technical meaning was intended
be considered as a Contract of Sale because the first essential element is (Tan vs. Court of Appeals, 212 SCRA 586 [1992]). Thus, when petitioners
lacking. In a contract to sell, the prospective seller explicitly reserves the declared in the said “Receipt of Down Payment” that they — Received
transfer of title to the prospective buyer, meaning, the prospective seller from Miss Ramona Patricia Alcaraz of 146 Timog, Quezon City, the sum
does not as yet agree or consent to transfer ownership of the property of Fifty Thousand Pesos purchase price of our inherited house and lot,
subject of the contract to sell until the happening of an event, which for covered by TCT No. 1199627 of the Registry of Deeds of Quezon City, in
present purposes we shall take as the full payment of the purchase price. the total amount of P1,240,000.00. Without any reservation of title until
What the seller agrees or obliges himself to do is to fulfill his promise to full payment of the entire purchase price, the natural and ordinary idea
sell the subject property when the entire amount of the purchase price is conveyed is that they sold their property.
delivered to him. In other words the full payment of the purchase price Sale; Ownership; Succession; Rights to the succession are
partakes of a suspensive condition, the non-fulfillment of which prevents transmitted from the moment of death of the decedent.—Article 774 of the
the obligation to sell from arising and thus, ownership is retained by the Civil Code defines Succession as a mode of transferring ownership as
prospective seller without further remedies by the prospective buyer. follows: Art. 774. Succession is a mode of acquisition by virtue of which
Same; Same; Same; Same; “Contract to Sell,” Defined.—A the property, rights and obligations to the extent and value of the
contract to sell may thus be defined as a bilateral contract whereby the inheritance of a person are transmitted through his death to another or
prospective seller, while expressly reserving the ownership of the subject others by his will or by operation of law. Petitioners-sellers in the case at
property despite delivery thereof to the prospective buyer, binds himself to bar being the sons and daughters of the decedent Constancio P. Coronel
sell the said property exclusively to the prospective buyer upon fulfillment are compulsory heirs who were called to succession by operation of law.
of the condition agreed upon, that is, full payment of the purchase price. Thus, at the point their father drew his last breath, petitioners stepped into
Same; Same; Same; Same; A contract to sell may not even be his shoes insofar as the subject property is concerned, such that any rights
considered as a conditional contract of sale because in a conditional or obligations pertaining thereto became binding and enforceable upon
contract of sale, the first element of consent is present, although it is them. It is expressly provided that rights to the succession are
conditioned upon the happening of a contingent event which may or may 19
not occur.—A contract to sell as defined hereinabove, may not even be
considered as a conditional contract of sale where the seller may likewise
reserve title to the property subject of the sale until the fulfillment of a
VOL. 263, OCTOBER 7, 1996
suspensive condition, because in a conditional contract of sale, the first Coronel vs. Court of Appeals
element of consent is present, although it is conditioned upon the transmitted from the moment of death of the decedent (Article 777,
happening of a contingent event which may or may not occur. If the Civil Code; Cuison vs. Villanueva, 90 Phil. 850 [1952]).
suspensive condition is not fulfilled, the perfection of the contract of sale is Same; Same; Estoppel; Having represented themselves as the true
completely abated (cf. Homesite and Housing Corp. vs. Court of owners of the subject property at the time of sale, the sellers cannot claim
Appeals, 133 SCRA 777 [1984]). later that they were not yet the absolute owners thereof at that time.—
17
Aside from this, petitioners are precluded from raising their supposed lack
of capacity to enter into an agreement at that time and they cannot be
VOL. 263, OCTOBER 7, 1996 allowed to now take a posture contrary to that which they took when they
entered into the agreement with private respondent Ramona P. Alcaraz.
Coronel vs. Court of Appeals The Civil Code expressly states that: Art. 1431. Through estoppel an
However, if the suspensive condition is fulfilled, the contract of admission or representation is rendered conclusive upon the person making
sale is thereby perfected, such that if there had already been previous it, and cannot be denied or disproved as against the person relying thereon.
delivery of the property subject of the sale to the buyer, ownership thereto Having represented themselves as the true owners of the subject property
automatically transfers to the buyer by operation of law without any at the time of sale, petitioners cannot claim now that they were not yet the
further act having to be performed by the seller. absolute owners thereof at that time.
Same; Same; Same; Same; In a contract to sell, upon the Same; Rescission; Pleadings and Practice; Evidence; Allegations
fulfillment of the suspensive condition, ownership will not automatically must be proven by sufficient evidence — mere allegation is not an
transfer to the buyer —  the prospective seller still has to convey title to the evidence.—We do not agree with petitioners that there was a valid
prospective buyer by entering into a contract of absolute sale.—In a rescission of the contract of sale in the instant case. We note that these
contract to sell, upon the fulfillment of the suspensive condition which is supposed grounds for petitioners’ rescission, are mere allegations found
the full payment of the purchase price, ownership will not automatically only in their responsive pleadings, which by express provision of the rules,
transfer to the buyer although the property may have been previously are deemed controverted even if no reply is filed by the plaintiffs (Sec. 11,
delivered to him. The prospective seller still has to convey title to the Rule 6, Revised Rules of Court). The records are absolutely bereft of any
prospective buyer by entering into a contract of absolute sale. supporting evidence to substantiate petitioners’ allegations. We have
Same; Same; Same; Same; In a contract to sell, there being no stressed time and again that allegations must be proven by sufficient
previous sale of the property, a third person buying such property despite evidence (Ng Cho Cio vs. Ng Diong, 110 Phil. 882 [1961]; Recaro vs.
the fulfillment of the suspensive condition such as the full payment of the Embisan, 2 SCRA 598 [1961]). Mere allegation is not an evidence
purchase price cannot be deemed a buyer in bad faith and the prospective (Lagasca vs. De Vera,  79 Phil. 376 [1947]).
buyer cannot seek the relief of reconveyance of the property  — there is no Same; Same; A seller cannot unilaterally and extrajudicially
double sale in such case.—It is essential to distinguish between a contract rescind a contract of sale where there is no express stipulation authorizing
to sell and a conditional contract of sale specially in cases where the him to extrajudicially rescind.—Even assuming arguendo that Ramona P.
subject property is sold by the owner not to the party the seller contracted Alcaraz was in the United States of America on February 6, 1985, we
with, but to a third person, as in the case at bench. In a contract to sell, cannot justify petitioners-sellers’ act of unilaterally and extrajudicially
there being no previous sale of the property, a third person buying such rescinding the contract of sale, there being no express stipulation
property despite the fulfillment of the suspensive condition such as the full authorizing the sellers to extrajudicially rescind the contract of sale.
payment of the purchase price, for instance, cannot be deemed a buyer in
(cf. Dignos vs. CA, 158 SCRA 375 [1988]; Taguba vs. Vda. de De Leon, For this reason, Coronels canceled and rescinded the contract (Exh.
132 SCRA 722 [1984])20 “A”) with Ramona by depositing the down payment paid by Concepcion in
the bank in trust for Ramona Patricia Alcaraz.
20 SUPREME COURT REPORTS ANNOTATED On February 22, 1985, Concepcion, et al., filed a complaint for
specific performance against the Coronels and caused the annotation of a
Coronel vs. Court of Appeals notice of lis pendens at the back of TCT No. 327403 (Exh. “E”; Exh. “5”).
Same; In case of double sale, what finds relevance and materiality On April 2, 1985, Catalina caused the annotation of a notice of
is not whether or not the second buyer was a buyer in good faith but adverse claim covering the same property with the Registry of Deeds of
whether or not said second buyer registers such second sale in good faith, Quezon City (Exh. “F”; Exh. “6”).
that is, without knowledge of any defect in the title of the property sold.— On April 25, 1985, the Coronels executed a Deed of Absolute Sale
In a case of double sale, what finds relevance and materiality is not over the subject property in favor of Catalina (Exh. “G”; Exh. “7”).
whether or not the second buyer was a buyer in good faith but whether or On June 5, 1985, a new title over the subject property was issued in
not said second buyer registers such second sale in good faith, that is, the name of Catalina under TCT No. 351582 (Exh. “H”; Exh. “8”).
without knowledge of any defect in the title of the property sold. As clearly (Rollo, pp. 134-136)
borne out by the evidence in this case, petitioner Mabanag could not have
in good faith, registered the sale entered into on February 18, 1985 because In the course of the proceedings before the trial court (Branch
as early as February 22, 1985, a notice of lis pendens had been annotated 83, RTC, Quezon City) the parties agreed to submit the case for
on the transfer certificate of title in the names of petitioners, whereas decision solely on the basis of documentary exhibits. Thus,
petitioner Mabanag registered the said sale sometime in April, 1985. At the plaintiffs therein (now private respondents) proffered their
time of registration, therefore, petitioner Mabanag knew that the same documentary evidence accordingly marked as Exhibits “A”
property had already been previously sold to private respondents, or, at through “J,” inclusive of their corresponding submarkings.
least, she was charged with knowledge that a previous buyer is claiming
title to the same property. Petitioner Mabanag cannot close her eyes to the
Adopting these same exhibits as their own, then defendants (now
defect in petitioners’ title to the property at the time of the registration of petitioners) accordingly offered and marked them as Exhibits “1”
the property. through “10,” likewise inclusive of their corresponding
submarkings. Upon motion of the parties, the trial court gave them
PETITION for review on certiorari of a decision of the Court of thirty (30) days within which to simultaneously submit their
Appeals. respective memoranda, and an additional 15 days within which to
   The facts are stated in the opinion of the Court. submit their corresponding comment or reply thereto, after which,
  Leven S. Puno for petitioners. the case would be deemed submitted for resolution. 23
  Perfecto G. Paner for private respondents.
VOL. 263, OCTOBER 7, 1996
MELO, J.: Coronel vs. Court of Appeals
On April 14, 1988, the case was submitted for resolution
The petition before us has its roots in a complaint for specific before Judge Reynaldo Roura, who was then temporarily detailed
performance to compel herein petitioners (except the last named, to preside over Branch 82 of the RTC of Quezon City. On March
Catalina Balais Mabanag) to consummate the sale of a parcel of 1, 1989, judgment was handed down by Judge Roura from his
land with its improvements located along Roosevelt Avenue in regular bench at Macabebe, Pampanga for the Quezon City
Quezon City entered into by the parties sometime in January 1985 branch, disposing as follows:
WHEREFORE, judgment for specific performance is hereby rendered
for the price of P1,240,000.00.
ordering defendant to execute in favor of plaintiffs a deed of absolute sale
The undisputed facts of the case were summarized by covering that parcel of land embraced in and covered by Transfer
respondent court in this wise:21 Certificate of Title No. 327403 (now TCT No. 331582) of the Registry of
VOL. 263, OCTOBER 7, 1996 Deeds for Quezon City, together with all the improvements existing
thereon free from all liens and encumbrances, and once accomplished, to
Coronel vs. Court of Appeals immediately deliver the said document of sale to plaintiffs and upon
On January 19, 1985, defendants-appellants Romulo Coronel, et al. receipt thereof, the plaintiffs are ordered to pay defendants the whole
(hereinafter referred to as Coronels) executed a document entitled “Receipt balance of the purchase price amounting to P1,190,000.00 in cash.
of Down Payment” (Exh. “A”) in favor of plaintiff Ramona Patricia Transfer Certificate of Title No. 331582 of the Registry of Deeds for
Alcaraz (hereinafter referred to as Ramona) which is reproduced Quezon City in the name of intervenor is hereby canceled and declared to
hereunder: be without force and effect. Defendants and intervenor and all other
RECEIPT OF DOWN PAYMENT persons claiming under them are hereby ordered to vacate the subject
                               P1,240,000.00—Total amount property and deliver possession thereof to plaintiffs. Plaintiffs’ claim for
                                    50,000.00—Down payment damages and attorney’s fees, as well as the counterclaims of defendants
                               P1,190,000.00—Balance and intervenors are hereby dismissed.
Received from Miss Ramona Patricia Alcaraz of 146 Timog, Quezon No pronouncement as to costs.
City, the sum of Fifty Thousand Pesos purchase price of our inherited So Ordered.
house and lot, covered by TCT No. 119627 of the Registry of Deeds of Macabebe, Pampanga for Quezon City, March 1, 1989.
Quezon City, in the total amount of P1,240,000.00. (Rollo, p. 106)
We bind ourselves to effect the transfer in our names from our
deceased father, Constancio P. Coronel, the transfer certificate of title A motion for reconsideration was filed by petitioners before
immediately upon receipt of the down payment above-stated. the new presiding judge of the Quezon City RTC but the same was
On our presentation of the TCT already in or name, We will denied by Judge Estrella T. Estrada, thusly:
immediately execute the deed of absolute sale of said property and Miss The prayer contained in the instant motion, i.e., to annul the decision
Ramona Patricia Alcaraz shall immediately pay the balance of the and to render anew decision by the undersigned Presiding Judge should be
P1,190,000.00. denied for the following reasons: (1) The instant case became submitted
Clearly, the conditions appurtenant to the sale are the following: for decision as of April 14, 1988 when the parties terminated the
1. Ramona will make a down payment of Fifty Thousand presentation of their respective documentary evidence and when the
(P50,000.00) Pesos upon execution of the document aforestated; Presiding Judge at that time was Judge Reynaldo Roura. The fact that they
2.  The Coronels will cause the transfer in their names of the title of were allowed to file memoranda
the property registered in the name of their deceased father upon receipt of 24
the Fifty Thousand (P50,000.00) Pesos down payment;
3.  Upon the transfer in their names of the subject property, the 24 SUPREME COURT REPORTS ANNOTATED
Coronels will execute the deed of absolute sale in favor of Ramona and the
latter will pay the former the whole balance of One Million One Hundred Coronel vs. Court of Appeals
Ninety Thousand (P1,190,000.00) Pesos. at some future date did not change the fact that the hearing of the case
On the same date (January 15, 1985), plaintiff-appellee Concepcion was terminated before Judge Roura and therefore the same should be
D. Alcaraz, (hereinafter referred to as Concepcion), mother of Ramona, submitted to him for decision; (2) When the defendants and intervenor did
paid the down payment of Fifty Thousand (P50,000.00) Pesos (Exh. “B,” not object to the authority of Judge Reynaldo Roura to decide the case
Exh. “2”). prior to the rendition of the decision, when they met for the first time
On February 6, 1985, the property originally registered in the name of before the undersigned Presiding Judge at the hearing of a pending
the Coronel’s father was transferred in their names under TCT No. 327043 incident in Civil Case No. Q-46145 on November 11, 1988, they were
(Exh. “D”; Exh. “4”).22 deemed to have acquiesced thereto and they are now estopped from
questioning said authority of Judge Roura after they received the decision
22 SUPREME COURT REPORTS ANNOTATED in question which happens to be adverse to them; (3) While it is true that
Judge Reynaldo Roura was merely a Judge-on-detail at this Branch of the
Coronel vs. Court of Appeals Court, he was in all respects the Presiding Judge with full authority to act
On February 18, 1985, the Coronels sold the property covered by on any pending incident submitted before this Court during his
TCT No. 327043 to intervenor-appellant Catalina B. Mabanag (hereinafter incumbency. When he returned to his Official Station at Macabebe,
referred to as Catalina) for One Million Five Hundred Eighty Thousand Pampanga, he did not lose his authority to decide or resolve such cases
(P1,580,000.00) Pesos after the latter has paid Three Hundred Thousand submitted to him for decision or resolution because he continued as Judge
(P300,000.00) Pesos (Exhs. “F-3”; Exh. “6-C”). of the Regional Trial Court and is of co-equal rank with the undersigned
Presiding Judge. The standing rule and supported by jurisprudence is that a property subject of the contract to sell until the happening of an
Judge to whom a case is submitted for decision has the authority to decide event, which for present purposes we shall take as the full payment
the case notwithstanding his transfer to another branch or region of the of the purchase price. What the seller agrees or obliges himself to
same court (Sec. 9, Rule 135, Rules of Court).
do is to fulfill his promise to sell the subject property when the
Coming now to the twin prayer for reconsideration of the Decision
dated March 1, 1989 rendered in the instant case, resolution of which now entire amount of the purchase price is delivered to him. In other
pertains to the undersigned Presiding Judge, after a meticulous words the full payment of the purchase price partakes of a
examination of the documentary evidence presented by the parties, she is suspensive condition, the non-fulfillment of which prevents the
convinced that the Decision of March 1, 1989 is supported by evidence obligation to sell from arising and thus, ownership is retained by
and, therefore, should not be disturbed. the prospective seller without further remedies by the prospective
IN VIEW OF THE FOREGOING, the “Motion for Reconsideration buyer. In Roque vs. Lapuz (96 SCRA 741 [1980]), this Court had
and/or to Annul Decision and Render Anew Decision by the Incumbent occasion to rule:27
Presiding Judge” dated March 20, 1989 is hereby DENIED.
SO ORDERED. VOL. 263, OCTOBER 7, 1996
Quezon City, Philippines, July 12, 1989.
(Rollo, pp. 108-109)
Coronel vs. Court of Appeals
Hence, We hold that the contract between the petitioner and the
Petitioners thereupon interposed an appeal, but on December respondent was a contract to sell where the ownership or title is retained by
16, 1991, the Court of Appeals (Buena, Gonzaga-Reyes, Abad the seller and is not to pass until the full payment of the price, such
payment being a positive suspensive condition and failure of which is not a
Santos (P), JJ.) rendered its decision fully agreeing with the trial breach, casual or serious, but simply an event that prevented the obligation
court.25 of the vendor to convey title from acquiring binding force.
VOL. 263, OCTOBER 7, 1996
Stated positively, upon the fulfillment of the suspensive
Coronel vs. Court of Appeals condition which is the full payment of the purchase price, the
Hence, the instant petition which was filed on March 5, 1992. prospective seller’s obligation to sell the subject property by
The last pleading, private respondents’ Reply Memorandum, was entering into a contract of sale with the prospective buyer becomes
filed on September 15, 1993. The case was, however, re-raffled to demandable as provided in Article 1479 of the Civil Code which
undersigned ponente only on August 28, 1996, due to the states:
voluntary inhibition of the Justice to whom the case was last Art. 1479. A promise to buy and sell a determinate thing for a price
assigned. certain is reciprocally demandable.
While we deem it necessary to introduce certain refinements An accepted unilateral promise to buy or to sell a determinate thing
in the disquisition of respondent court in the affirmance of the trial for a price certain is binding upon the promissor if the promise is
supported by a consideration distinct from the price.
court’s decision, we definitely find the instant petition bereft of
merit. A contract to sell may thus be defined as a bilateral contract
The heart of the controversy which is the ultimate key in the whereby the prospective seller, while expressly reserving the
resolution of the other issues in the case at bar is the precise ownership of the subject property despite delivery thereof to the
determination of the legal significance of the document entitled prospective buyer, binds himself to sell the said property
“Receipt of Down Payment” which was offered in evidence by exclusively to the prospective buyer upon fulfillment of the
both parties. There is no dispute as to the fact that said document condition agreed upon, that is, full payment of the purchase price.
embodied the binding contract between Ramona Patricia Alcaraz A contract to sell as defined hereinabove, may not even be
on the one hand, and the heirs of Constancio P. Coronel on the considered as a conditional contract of sale where the seller may
other, pertaining to a particular house and lot covered by TCT No. likewise reserve title to the property subject of the sale until the
119627, as defined in Article 1305 of the Civil Code of the fulfillment of a suspensive condition, because in a conditional
Philippines which reads as follows: contract of sale, the first element of consent is present, although it
Art. 1305. A contract is a meeting of minds between two persons
is conditioned upon the happening of a contingent event which
whereby one binds himself, with respect to the other, to give something or
to render some service. may or may not occur. If the suspensive condition is not fulfilled,
the perfection of the contract of sale is completely abated
While, it is the position of private respondents that the (cf. Homesite and Housing Corp. vs. Court of Appeals, 133 SCRA
“Receipt of Down Payment” embodied a perfected contract of 777 [1984]). However, if the suspensive condition is fulfilled, the
sale, which perforce, they seek to enforce by means of an action contract of sale is thereby
for specific performance, petitioners on their part insist that what 28
the document signified was a mere executory contract to sell, 28 SUPREME COURT REPORTS ANNOTATED
subject to certain suspensive conditions, and because of the
absence of Ramona P. Alcaraz, who left for the United States of
Coronel vs. Court of Appeals
America, said contract could not possibly ripen into a contract of perfected, such that if there had already been previous delivery of
absolute sale. the property subject of the sale to the buyer, ownership thereto
Plainly, such variance in the contending parties’ contentions is automatically transfers to the buyer by operation of law without
brought about by the way each interprets the terms and/or any further act having to be performed by the seller.
conditions set forth in said private instrument. Withal, In a contract to sell, upon the fulfillment of the suspensive
26 condition which is the full payment of the purchase price,
ownership will not automatically transfer to the buyer although the
26 SUPREME COURT REPORTS ANNOTATED property may have been previously delivered to him. The
Coronel vs. Court of Appeals prospective seller still has to convey title to the prospective buyer
based on whatever relevant and admissible evidence may be by entering into a contract of absolute sale.
available on record, this Court, as were the courts below, is now It is essential to distinguish between a contract to sell and a
called upon to adjudge what the real intent of the parties was at the conditional contract of sale specially in cases where the subject
time the said document was executed. property is sold by the owner not to the party the seller contracted
The Civil Code defines a contract of sale, thus: with, but to a third person, as in the case at bench. In a contract to
Art. 1458. By the contract of sale one of the contracting parties sell, there being no previous sale of the property, a third person
obligates himself to transfer the ownership of and to deliver a determinate buying such property despite the fulfillment of the suspensive
thing, and the other to pay therefor a price certain in money or its condition such as the full payment of the purchase price, for
equivalent. instance, cannot be deemed a buyer in bad faith and the
prospective buyer cannot seek the relief of reconveyance of the
Sale, by its very nature, is a consensual contract because it is
property. There is no double sale in such case. Title to the property
perfected by mere consent. The essential elements of a contract of
will transfer to the buyer after registration because there is no
sale are the following:
a) Consent or meeting of the minds, that is, consent to transfer defect in the owner-seller’s title per se, but the latter, of course,
ownership in exchange for the price; may be sued for damages by the intending buyer.
b) Determinate subject matter; and In a conditional contract of sale, however, upon the fulfillment
c) Price certain in money or its equivalent. of the suspensive condition, the sale becomes absolute and this
will definitely affect the seller’s title thereto. In fact, if there had
Under this definition, a Contract to Sell may not be considered been previous delivery of the subject property, the seller’s
as a Contract of Sale because the first essential element is lacking. ownership or title to the property is automatically transferred to
In a contract to sell, the prospective seller explicitly reserves the the buyer such that, the seller will no longer have any title to
transfer of title to the prospective buyer, meaning, the prospective transfer to any third person. Applying Article 1544 of the Civil
seller does not as yet agree or consent to transfer ownership of the Code, such second buyer of the property who may have had actual
or constructive knowledge of such defect in the seller’s title, or at VOL. 263, OCTOBER 7, 1996
least was charged with the obligation to discover such defect,
cannot be a registrant in good faith. Such second buyer cannot Coronel vs. Court of Appeals
defeat the first buyer’s title. In case effects full payment therefor, in the contract entered into in the
29 case at bar, the sellers were the ones who were unable to enter into
VOL. 263, OCTOBER 7, 1996 a contract of absolute sale by reason of the fact that the certificate
of title to the property was still in the name of their father. It was
Coronel vs. Court of Appeals the sellers in this case who, as it were, had the impediment which
a title is issued to the second buyer, the first buyer may seek prevented, so to speak, the execution of a contract of absolute sale.
reconveyance of the property subject of the sale. What is clearly established by the plain language of the
With the above postulates as guidelines, we now proceed to subject document is that when the said “Receipt of Down
the task of deciphering the real nature of the contract entered into Payment” was prepared and signed by petitioners Romulo A.
by petitioners and private respondents. Coronel, et al., the parties had agreed to a conditional contract of
It is a canon in the interpretation of contracts that the words sale, consummation of which is subject only to the successful
used therein should be given their natural and ordinary meaning transfer of the certificate of title from the name of petitioners’
unless a technical meaning was intended (Tan vs. Court of father, Constancio P. Coronel, to their names.
Appeals, 212 SCRA 586 [1992]). Thus, when petitioners declared The Court significantly notes that this suspensive condition
in the said “Receipt of Down Payment” that they— was, in fact, fulfilled on February 6, 1985 (Exh. “D”; Exh. “4”).
Received from Miss Ramona Patricia Alcaraz of 146 Timog, Quezon Thus, on said date, the conditional contract of sale between
City, the sum of Fifty Thousand Pesos purchase price of our inherited petitioners and private respondent Ramona P. Alcaraz became
house and lot, covered by TCT No. 1199627 of the Registry of Deeds of
Quezon City, in the total amount of P1,240,000.00.
obligatory, the only act required for the consummation thereof
being the delivery of the property by means of the execution of the
without any reservation of title until full payment of the entire deed of absolute sale in a public instrument, which petitioners
purchase price, the natural and ordinary idea conveyed is that they unequivocally committed themselves to do as evidenced by the
sold their property. “Receipt of Down Payment.”
When the “Receipt of Down Payment” is considered in its Article 1475, in correlation with Article 1181, both of the
entirety, it becomes more manifest that there was a clear intent on Civil Code, plainly applies to the case at bench. Thus.
the part of petitioners to transfer title to the buyer, but since the Art. 1475. The contract of sale is perfected at the moment there is a
transfer certificate of title was still in the name of petitioner’s meeting of minds upon the thing which is the object of the contract and
upon the price.
father, they could not fully effect such transfer although the buyer From that moment, the parties may reciprocally demand performance,
was then willing and able to immediately pay the purchase price. subject to the provisions of the law governing the form of contracts.
Therefore, petitioners-sellers undertook upon receipt of the down Art. 1181. In conditional obligations, the acquisition of rights, as
payment from private respondent Ramona P. Alcaraz, to cause the well as the extinguishment or loss of those already acquired, shall depend
issuance of a new certificate of title in their names from that of upon the happening of the event which constitutes the condition.
their father, after which, they promised to present said title, now in
32
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 32 SUPREME COURT REPORTS ANNOTATED
purchase price. Coronel vs. Court of Appeals
The agreement could not have been a contract to sell because
Since the condition contemplated by the parties which is the
the sellers herein made no express reservation of ownership or
issuance of a certificate of title in petitioners’ names was fulfilled
title to the subject parcel of land. Furthermore, the circumstance
on February 6, 1985, the respective obligations of the parties under
which prevented the parties from entering into
30
the contract of sale became mutually demandable, that is,
petitioners, as sellers, were obliged to present the transfer
30 SUPREME COURT REPORTS ANNOTATED certificate of title already in their names to private respondent
Coronel vs. Court of Appeals Ramona P. Alcaraz, the buyer, and to immediately execute the
an absolute contract of sale pertained to the sellers themselves (the deed of absolute sale, while the buyer on her part, was obliged to
certificate of title was not in their names) and not the full payment forthwith pay the balance of the purchase price amounting to
of the purchase price. Under the established facts and P1,190,000.00.
circumstances of the case, the Court may safely presume that, had It is also significant to note that in the first paragraph in page
the certificate of title been in the names of petitioners-sellers at 9 of their petition, petitioners conclusively admitted that:
that time, there would have been no reason why an absolute 3. The petitioners-sellers Coronel bound themselves “to effect the
transfer in our names from our deceased father Constancio P. Coronel, the
contract of sale could not have been executed and consummated transfer certificate of title immediately upon receipt of the downpayment
right there and then. abovestated.” The sale was still subject to this suspensive condition.
Moreover, unlike in a contract to sell, petitioners in the case at (Emphasis supplied)
bar did not merely promise to sell the property to private (Rollo, p. 16)
respondent upon the fulfillment of the suspensive condition. On
the contrary, having already agreed to sell the subject property, Petitioners themselves recognized that they entered into a
they undertook to have the certificate of title changed to their contract of sale subject to a suspensive condition. Only, they
names and immediately thereafter, to execute the written deed of contend, continuing in the same paragraph, that:
absolute sale. . . . Had petitioners-sellers not complied with this condition of first
Thus, the parties did not merely enter into a contract to sell transferring the title to the property under their names, there could be no
perfected contract of sale. (Emphasis supplied)
where the sellers, after compliance by the buyer with certain terms (Ibid.)
and conditions, promised to sell the property to the latter. What
may be perceived from the respective undertakings of the parties not aware that they have set their own trap for themselves, for
to the contract is that petitioners had already agreed to sell the Article 1186 of the Civil Code expressly provides that:
house and lot they inherited from their father, completely willing Art. 1186. The condition shall be deemed fulfilled when the obligor
to transfer full ownership of the subject house and lot to the buyer voluntarily prevents its fulfillment.
if the documents were then in order. It just so happened, however,
that the transfer certificate of title was then still in the name of Besides, it should be stressed and emphasized that what is
their father. It was more expedient to first effect the change in the more controlling than these mere hypothetical arguments is the
certificate of title so as to bear their names. That is why they fact that the condition herein referred to was actually and
33
undertook to cause the issuance of a new transfer of the certificate
of title in their names upon receipt of the down payment in the VOL. 263, OCTOBER 7, 1996
amount of P50,000.00. As soon as the new certificate of title is Coronel vs. Court of Appeals
issued in their names, petitioners were committed to immediately
indisputably fulfilled on February 6, 1985, when a new title was
execute the deed of absolute sale. Only then will the obligation of
issued in the names of petitioners as evidenced by TCT No.
the buyer to pay the remainder of the purchase price arise.
327403 (Exh. “D”; Exh. “4”).
There is no doubt that unlike in a contract to sell which is
The inevitable conclusion is that on January 19, 1985, as
most commonly entered into so as to protect the seller against a
evidenced by the document denominated as “Receipt of Down
buyer who intends to buy the property in installment by
Payment” (Exh. “A”; Exh. “1”), the parties entered into a contract
withholding ownership over the property until the buyer
31
of sale subject only to the suspensive condition that the sellers
shall effect the issuance of new certificate title from that of their
father’s name to their names and that, on February 6, 1985, this Even assuming arguendo that Ramona P. Alcaraz was in the
condition was fulfilled (Exh. “D”; Exh. “4”). United States of America on February 6, 1985, we cannot justify
We, therefore, hold that, in accordance with Article 1187 petitioners-sellers’ act of unilaterally and extrajudicially
which pertinently provides— rescinding the contract of sale, there being no express stipulation
Art. 1187. The effects of conditional obligation to give, once the authorizing the sellers to extrajudically rescind the contract of sale.
condition has been fulfilled, shall retroact to the day of the constitution of (cf. Dignos vs. CA, 158 SCRA 375 [1988]; Taguba vs. Vda. de De
the obligation . . . Leon, 132 SCRA 722 [1984])
In obligations to do or not to do, the courts shall determine, in each
Moreover, petitioners are estopped from raising the alleged
case, the retroactive effect of the condition that has been complied with.
absence of Ramona P. Alcaraz because although the evidence on
the rights and obligations of the parties with respect to the record shows that the sale was in the name of Ramona P. Alcaraz
perfected contract of sale became mutually due and demandable as as the buyer, the sellers had been dealing with Concepcion D.
of the time of fulfillment or occurrence of the suspensive condition Alcaraz, Ramona’s mother, who had acted for and in behalf of her
on February 6, 1985. As of that point in time, reciprocal daughter, if not also in her own behalf. Indeed, the down payment
obligations of both seller and buyer arose. was made by Concepcion D. Alcaraz with her own personal check
Petitioners also argue that there could have been no perfected (Exh. “B”; Exh. “2”) for and in behalf of Ramona P. Alcaraz.
contract on January 19, 1985 because they were then not yet the There is no evidence showing that petitioners ever questioned
absolute owners of the inherited property. Concepcion’s authority to represent Ramona P. Alcaraz when they
We cannot sustain this argument. accepted her personal check. Neither did they raise any objection
Article 774 of the Civil Code defines Succession as a mode of as regards payment being effected by a third person. Accordingly,
transferring ownership as follows: as far as petitioners are concerned, the physical absence of
Art. 774. Succession is a mode of acquisition by virtue of which the Ramona P. Alcaraz is not a ground to rescind the contract of
property, rights and obligations to the extent and value of the inheritance sale.36
of a person are transmitted through his death to another or others by his
will or by operation of law.
36 SUPREME COURT REPORTS ANNOTATED
Coronel vs. Court of Appeals
34
Corollarily, Ramona P. Alcaraz cannot even be deemed to be
34 SUPREME COURT REPORTS ANNOTATED in default, insofar as her obligation to pay the full purchase price is
Coronel vs. Court of Appeals concerned. Petitioners who are precluded from setting up the
Petitioners-sellers in the case at bar being the sons and defense of the physical absence of Ramona P. Alcaraz as above-
daughters of the decedent Constancio P. Coronel are compulsory explained offered no proof whatsoever to show that they actually
heirs who were called to succession by operation of law. Thus, at presented the new transfer certificate of title in their names and
the point their father drew his last breath, petitioners stepped into signified their willingness and readiness to execute the deed of
his shoes insofar as the subject property is concerned, such that absolute sale in accordance with their agreement. Ramona’s
any rights or obligations pertaining thereto became binding and corresponding obligation to pay the balance of the purchase price
enforceable upon them. It is expressly provided that rights to the in the amount of P1,190,000.00 (as buyer) never became due and
succession are transmitted from the moment of death of the demandable and, therefore, she cannot be deemed to have been in
decedent (Article 777, Civil Code; Cuison vs. Villanueva, 90 Phil. default.
850 [1952]). Article 1169 of the Civil Code defines when a party in a
Be it also noted that petitioners’ claim that succession may not contract involving reciprocal obligations may be considered in
be declared unless the creditors have been paid is rendered moot default, to wit:
Art. 1169. Those obliged to deliver or to do something, incur in
by the fact that they were able to effect the transfer of the title to delay from the time the obligee judicially or extrajudicially demands from
the property from the decedent’s name to their names on February them the fulfillment of their obligation.
6, 1985. xxx
Aside from this, petitioners are precluded from raising their In reciprocal obligations, neither party incurs in delay if the other
supposed lack of capacity to enter into an agreement at that time does not comply or is not ready to comply in a proper manner with what is
and they cannot be allowed to now take a posture contrary to that incumbent upon him. From the moment one of the parties fulfill his
which they took when they entered into the agreement with private obligation, delay by the other begins. (Emphasis supplied.)
respondent Ramona P. Alcaraz. The Civil Code expressly states
There is thus neither factual nor legal basis to rescind the
that:
Art. 1431. Through estoppel an admission or representation is
contract of sale between petitioners and respondents.
rendered conclusive upon the person making it, and cannot be denied or With the foregoing conclusions, the sale to the other
disproved as against the person relying thereon. petitioner, Catalina B. Mabanag, gave rise to a case of double sale
where Article 1544 of the Civil Code will apply, to wit:
Having represented themselves as the true owners of the Art. 1544. If the same thing should have been sold to different
subject property at the time of sale, petitioners cannot claim now vendees, the ownership shall be transferred to the person who may have
that they were not yet the absolute owners thereof at that time. first taken possession thereof in good faith, if it should be movable
Petitioners also contend that although there was in fact a property.
Should if be immovable property, the ownership shall belong to the
perfected contract of sale between them and Ramona P. Alcaraz, person acquiring it who in good faith first recorded it in the Registry of
the latter breached her reciprocal obligation when she rendered Property.37
impossible the consummation thereof by going to the United
States of America, without leaving her address, telephone number, VOL. 263, OCTOBER 7, 1996
and Special Power of Attorney (Paragraphs 14 and 15, Answer
with Compulsory Counterclaim to the Amended Complaint, p. 2; Coronel vs. Court of Appeals
Rollo, p. 43), for which reason, Should there be no inscription, the ownership shall pertain to the
35 person who in good faith was first in the possession; and, in the absence
thereof to the person who presents the oldest title, provided there is good
VOL. 263, OCTOBER 7, 1996 faith.
Coronel vs. Court of Appeals
so petitioners conclude, they were correct in unilaterally The record of the case shows that the Deed of Absolute Sale
rescinding the contract of sale. dated April 25, 1985 as proof of the second contract of sale was
We do not agree with petitioners that there was a valid registered with the Registry of Deeds of Quezon City giving rise
rescission of the contract of sale in the instant case. We note that to the issuance of a new certificate of title in the name of Catalina
these supposed grounds for petitioners’ rescission, are mere B. Mabanag on June 5, 1985. Thus, the second paragraph of
allegations found only in their responsive pleadings, which by Article 1544 shall apply.
express provision of the rules, are deemed controverted even if no The above-cited provision on double sale presumes title or
reply is filed by the plaintiffs (Sec. 11, Rule 6, Revised Rules of ownership to pass to the first buyer, the exceptions being: (a) when
Court). The records are absolutely bereft of any supporting the second buyer, in good faith, registers the sale ahead of the first
evidence to substantiate petitioners’ allegations. We have stressed buyer, and (b) should there be no inscription by either of the two
time and again that allegations must be proven by sufficient buyers, when the second buyer, in good faith, acquires possession
evidence (Ng Cho Cio vs. Ng Diong, 110 Phil. 882 of the property ahead of the first buyer. Unless, the second buyer
[1961]; Recaro vs. Embisan, 2 SCRA 598 [1961]). Mere satisfies these requirements, title or ownership will not transfer to
allegation is not an evidence (Lagasca vs. De Vera, 79 Phil. 376 him to the prejudice of the first buyer.
[1947]).
 In his commentaries on the Civil Code, an accepted authority ——o0o——
on the subject, now a distinguished member of the Court, Justice
Jose C. Vitug, explains:
The governing principle is prius tempore, potior jure  (first in time,
stronger in right). Knowledge by the first buyer of the second sale cannot
defeat the first buyer’s rights except when the second buyer first registers
in good faith the second sale (Olivares vs. Gonzales,  159 SCRA 33).
Conversely, knowledge gained by the second buyer of the first sale defeats
his rights even if he is first to register, since knowledge taints his
registration with bad faith (see also Astorga vs. Court of Appeals,  G.R. No.
58530, 26 December 1984). In Cruz vs. Cabana (G.R. No. 56232, 22 June
1984, 129 SCRA 656), it was held that it is essential, to merit the
protection of Art. 1544, second paragraph, that the second realty buyer
must act in good faith in registering his deed of sale (citing Carbonell vs.
Court of Appeals, 69 SCRA 99, Crisostomo vs. CA,  G.R. No. 95843, 02
September 1992).
(J. Vitug, Compendium of Civil Law and Jurisprudence, 1993 Edition,
p. 604).

38
38 SUPREME COURT REPORTS ANNOTATED
Coronel vs. Court of Appeals
Petitioners point out that the notice of lis pendens in the case
at bar was annotated on the title of the subject property only on
February 22, 1985, whereas, the second sale between petitioners
Coronels and petitioner Mabanag was supposedly perfected prior
thereto or on February 18, 1985. The idea conveyed is that at the
time petitioner Mabanag, the second buyer, bought the property
under a clean title, she was unaware of any adverse claim or
previous sale, for which reason she is a buyer in good faith.
We are not persuaded by such agreement.
In a case of double sale, what finds relevance and materiality
is not whether or not the second buyer was a buyer in good faith
but whether or not said second buyer registers such second sale in
good faith, that is, without knowledge of any defect in the title of
the property sold.
As clearly borne out by the evidence in this case, petitioner
Mabanag could not have in good faith, registered the sale entered
into on February 18, 1985 because as early as February 22, 1985, a
notice of lis pendens had been annotated on the transfer certificate
of title in the names of petitioners, whereas petitioner Mabanag
registered the said sale sometime in April, 1985. At the time of
registration, therefore, petitioner Mabanag knew that the same
property had already been previously sold to private respondents,
or, at least, she was charged with knowledge that a previous buyer
is claiming title to the same property. Petitioner Mabanag cannot
close her eyes to the defect in petitioners’ title to the property at
the time of the registration of the property.
This Court had occasions to rule that:
If a vendee in a double sale registers the sale after he has acquired
knowledge that there was a previous sale of the same property to a third
party or that another person claims said property in a previous sale, the
registration will constitute a registration in bad faith and will not confer
upon him any right. (Salvoro vs. Tanega, 87 SCRA 349 [1978];  citing
Palarca vs. Director of Lands,  43 Phil. 146; Cagaoan vs. Cagaoan,  43
Phil. 554; Fernandez vs. Mercader,  43 Phil. 581)

39
VOL. 263, OCTOBER 7, 1996
Coronel vs. Court of Appeals
Thus, the sale of the subject parcel of land between petitioners
and Ramona P. Alcaraz, perfected on February 6, 1985, prior to
that between petitioners and Catalina B. Mabanag on February 18,
1985, was correctly upheld by both the courts below.
Although there may be ample indications that there was in fact
an agency between Ramona as principal and Concepcion, her
mother, as agent insofar as the subject contract of sale is
concerned, the issue of whether or not Concepcion was also acting
in her own behalf as a co-buyer is not squarely raised in the instant
petition, nor is such assumption disputed between mother and
daughter. Thus, We will not touch this issue and no longer disturb
the lower courts’ ruling on this point.
WHEREFORE, premises considered, the instant petition is
hereby DISMISSED and the appealed judgment AFFIRMED.
SO ORDERED.
Narvasa (C.J., Chairman), Davide, Jr. and Francisco,
JJ., concur.
Panganiban, J., No part. Close personal relation with a
party’s counsel.

Petition dismissed.

Note.—In double sales of real property, prior registration