G.R. NO. 134219 - SPOUSES MARIO AND ELIZABETH TORCUATOR, VS. SPOUSES REMEGIO AND GLORIA BERNABE AND SPOUSES DIOSDADO AND LOURDES SALVADOR.D E C I S I O N - Supreme Court E-Library

Ruling

Accordingly, petitioners filed their Memorandum [12] on April 19, 1999. On the other hand, in view of respondents' disappearance without notice, the Court resolved to dispense with their memorandum. [13] The trial court denied petitioners' complaint on three (3) grounds, namely: (1) the alleged nullity of the contract between the parties as it violated Ayala Corporation's condition that the construction of a house is a prerequisite to any sale of lots in Ayala Alabang Village; (2) non-payment of the purchase price; and (3) the nullity of the contract as it called for payment in United States Dollars. To these reasons, the Court of Appeals added a fourth basis for denying petitioners' appeal and that is the alleged nullity of the agreement because it deprived the government of taxes. An analysis of the facts obtaining in this case leads us to affirm the assailed decisions although from a slightly different but related thrust. Let us begin by characterizing the agreement entered into by the parties, i.e. , whether the agreement is a contract to sell as the trial court ruled, or a contract of sale as petitioners insist. The differences between a contract to sell and a contract of sale are well-settled in jurisprudence. As early as 1951, we held that in a contract of sale, title passes to the buyer upon delivery of the thing sold, while in a contract to sell, ownership is reserved in the seller and is not to pass until the full payment of the purchase price is made. In the first case, non-payment of the price is a negative resolutory condition; in the second case, full payment is a positive suspensive condition. Being contraries, their effect in law cannot be identical. In the first case, the vendor has lost and cannot recover the ownership of the land sold until and unless the contract of sale is itself resolved and set aside. In the second case, however, the title remains in the vendor if the vendee does not comply with the condition precedent of making payment at the time specified in the contract. [14] In other words, in a contract to sell, ownership is retained by the seller and is not to pass to the buyer until full payment of the price or the fulfillment of some other conditions either of which is a future and uncertain event the non-happening of which is not a breach, casual or serious, but simply an event that prevents the obligation of the vendor to convey title from acquiring binding force. [15] We have carefully examined the agreement between the parties and are far from persuaded that it was a contract of sale. Firstly, the agreement imposed upon petitioners the obligation to fully pay the agreed purchase price for the property. That ownership shall not pass to petitioners until they have fully paid the price is implicit in the agreement. Notably, respondent Remigio Bernabe testified, without objection on the part of petitioners, that he specifically informed petitioners that the transaction should be completed, i.e. , that he should rec