Bar Q and A #28

a. A contract of sale may be absolute or conditional. A contract to sell is a kind of conditional sale. In an absolute sale, title to the property passes to the vendee upon the delivery of the thing sold. In both contracts to sell and contracts of conditional sale, title to the property remains with the seller despite delivery. Both contracts are subject to the positive suspensive condition of the buyer’s full payment of the purchase price or the fulfillment of the condition.

b. The interruption of the prescriptive period by written extrajudicial demand means that the said period would commence anew from the receipt of the demand.

Article 1155 of the Civil Code provides that the “prescription of actions is interrupted” inter alia, “when there is any written acknowledgment of the debt by the debtor.” This simply means that the period of prescription, when interrupted by such a written acknowledgment, begins to run anew; and whatever time of limitation might have already elapsed from the accrual of the cause of action is thereby negated and rendered inefficacious. The effect of the interruption spoken of in Article 1155 is to renew the obligation, to make prescription run again from the date of the interruption.

No. The suit will not prosper because Pablo was not unlawfully deprived of the car although he was unlawfully deprived of the price. The perfection of the sale and the delivery of the car was enough to allow Alfonso to have a right of ownership over the car, which can be lawfully transferred to Gregorio. Art. 559 applies only to a person who is in possession in good faith of the property, and not to the owner thereof. Alfonso, in the problem, was the owner, and, hence, Gabriel acquired the title to the car.

Non-payment of the price in a contract of sale does not render ineffective the obligation to deliver.

The obligation to deliver a thing is different from the obligation to pay its price. [EDCA Publishing Co. v. Santos (1990)]

The contract between A and B is a sale not an agency to sell because the price is payable by B upon 60 days from delivery even if B is unable to resell it. If B were an agent, he is not bound to pay the price if he is unable to resell it.

As a buyer, ownership passed to B upon delivery and, under Art. 1504 of the Civil Code, the thing perishes for the owner. Hence, B must still pay the price.

  1. The first buyer has the better right if his sale was first to be registered, even though the first buyer knew of the second The fact that he knew of the second sale at the time of his registration does not make him as acting in bad faith because the sale to him was ahead in time, hence, has a priority in right. What creates bad faith in the case of double sale of land is knowledge of a previous sale.

  2. The first buyer is still to be preferred, where the second sale is registered ahead of the first sale but with knowledge of the This is because the second buyer, who at the time he registered his sale knew that the property had already been sold to someone else, acted in bad faith (Article 1544).

It depends on whether or not RR is an innocent purchaser for value. Under the Torrens System, a deed or instrument operated only as a contract between the parties and as evidence of authority to the Register of Deeds to make the registration. It is the registration of the deed or the instrument that is the operative act that conveys or affects the land (Sec. 51, P.D.No. 1529).

In cases of double sale of titled land, it is a well-settled rule that the buyer who first registers the sale in good faith acquires a better right to the land (Art. 1544).

Persons dealing with property covered by Torrens title are not required to go beyond what appears on its face (Orquiola v. CA 386, G.R. No. 141463,  August  6,  2002;  Spouses  Domingo  v. Races, G.R. No. 147468, April 9, 2003). Thus, absent any showing that RR knew about, or ought to have known the prior sale of the land to PP or that he acted in bad faith, and being first to register the sale, RR acquired a good and a clean title to the property as against PP.

a) Yes, Dehlma is a purchaser in good faith. She learned about the XYZ tax declaration and foreclosure sale only after the sale to her was registered. She relied on the certificate of title of her predecessor-in-interest. Under the Torrens system, a buyer of registered lands is not required by law to inquire further than what the Torrens certificated indicates on its face. If a person proceeds to buy it relying on the title, that person is considered a buyer in good faith. The “priority in time” rule could not be invoked by XYZ Bank because the foreclosure sale of the land in favor of the bank was recorded under Act No. 3344, the law governing transactions affecting unregistered land, and thus, does not bind the land.

b) Between Dehlma and the bank, the former has a better right to the house and lot.

No, the action will not prosper. The action for rescission may be brought only by the aggrieved party to the contract. Since it was Salvador who failed to comply with his conditional obligation, he is not the aggrieved party who may file the action for rescission buy the Star Semiconductor Company. The company, however, is not opting to rescind the contract but has chosen to waive Salvador’s compliance with the condition which it can do under Art. 1545, NCC.

The sale of the parcel of land is void. There is no indication in the facts that Danny and Elsa executed a marriage settlement prior to their marriage. As the marriage was celebrated during the effectivity of the Family Code, absent a marriage settlement, the property regime between the spouses is the Absolute Community of Property. Under the Absolute Community of Property regime, the parcel of land belongs to the community property as the property he had brought into the marriage even if said property were registered in the name of Danny. Therefore, the sale of the property is void, because it was executed without the authority of the court or the written consent of the other spouse.

BPI is not correct in canceling the contract with LT. In Lina Topacio v. Court of Appeals and BPI Investment (G.R. No. 102606, July 3, 1993, 211 SCRA 291), the Supreme Court held that the earnest money is part of the purchase price and is proof of the perfection of the contract. Secondly, notarial or judicial rescission under Art. 1592 and 1991 of the Civil Code is necessary (Taguba v. De Leon, 132 SCRA 722).