PANGAN V.

PERRERAS (Essential Requisites)

FACTS:

Spouses Pangan were the owners of the lot and two-door apartment (subject
properties)
On 1989, Consuelo agreed to sell to the respondents the subject properties for the
price of P540, 000.00. On the same day, Consuelo received P20,000.00 from the
respondents as earnest money, evidenced by a receipt that also included the terms
of the parties agreement.
Three days later, or on June 5, 1989, the parties agreed to increase the purchase price
from P540, 000.00 to P580, 000.00.
In compliance with the agreement, the respondents issued two Far East Bank and
Trust Company checks payable to Consuelo in the amounts of P200, 000.00 and P250,
000.00.
On June 15, 1989. Consuelo, however, refused to accept the checks. She
justified her refusal by saying that her children (the petitioners-heirs) co-owners of
the subject properties did not want to sell the subject properties. For the same
reason, Consuelo offered to return the P20,000.00 earnest money she received from
the respondents, but the latter rejected it. Thus, Consuelo filed a complaint for
consignation against the respondents.
FOR THE RESPONDENTS: They insisted on enforcing the agreement. They sought
to compel Consuelo and the petitioners-heirs (who were subsequently impleaded as
co-defendants) to execute a Deed of Absolute Sale over the subject properties.
FOR CONSUELO: She was justified in backing out from the agreement on the ground
that the sale was subject to the consent of the petitioners-heirs who became coowners of the property upon the death of her husband, Cayetano. Since the
petitioners-heirs disapproved of the sale, Consuelo claimed that the contract became
ineffective for lack of the requisite consent.

ISSUE:
Whether or not there was s perfected contract between the parties.
HELD:

YES. There was a perfected contract between the parties. That a thing is sold without
the consent of all the co-owners does not invalidate the sale or render it void.
Article 1318 of the Civil Code declares that no contract exists unless the following
requisites concur:
consent of the contracting parties; (Which is the requisite involved in this case)
object certain which is the subject matter of the contract; and
cause of the obligation established.
Article 493 of the Civil Code recognizes the absolute right of a co-owner to freely
dispose of his pro indiviso share as well as the fruits and other benefits arising from
that share, independently of the other co-owners. Also, The explicit terms of the
June 8, 1989 receipt provide no occasion for any reading that the agreement is
subject to the petitioners-heirs favorable consent to the sale.
Thus, when Consuelo agreed to sell to the respondents the subject properties, what
she in fact sold was her undivided interest that, as quantified by the RTC, consisted of
one-half interest, representing her conjugal share, and one-sixth interest,
representing her hereditary share.

The presence of Consuelos consent and, corollarily, the existence of a perfected

Coronel v. CA
Facts:
The case arose from a complaint for specific performance filed by private respondent Alcaraz
against petitioners to consummate the sale of a parcel of land in Quezon City.
On January 19, 1985, petitioners executed a Receipt of Down Payment of P50,000 in favor
of plaintiff Ramona Alcaraz, binding themselves to transfer the ownership of the land in their
name from their deceased father, afterwhich the balance of P1,190,000 shall be paid in full
by Alcaraz. On February 6, 1985, the property was transferred to petitioners. On February
18, 1985, petitioners sold the property to Mabanag. For this reason, Concepcion, Ramonas
mother, filed an action for specific performance.
Issue:
Whether the contract between petitioners and private respondent was that of a conditional
sale or a mere contract to sell
Held:
Sale, 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) 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 in money or its equivalent.
Under this definition, a Contract to Sell may not be considered as a Contract of Sale because
the first essential element is lacking. In a contract to sell, the prospective seller explicity
reserves the transfer of title to the prospective buyer, meaning, the prospective seller does
not as yet agree or consent to transfer ownership of the property subject of the contract to
sell until the happening of an event, which for present purposes we shall take as the full
payment of the purchase price. What the seller agrees or obliges himself to do is to fulfill his
promise to sell the subject property when the entire amount of the purchase price is
delivered to him. In other words the full payment of the purchase price partakes of a
suspensive condition, the non-fulfillment of which prevents the obligation to sell from arising
and thus, ownership is retained by the prospective seller without further remedies by the
prospective buyer. A contract to sell may thus be defined as a bilateral contract whereby the
prospective seller, while expressly reserving the ownership of the subject property despite
delivery thereof to the prospective buyer, binds himself to sell the said property exclusively
to the prospective buyer upon fulfillment of the condition agreed upon, that is, full payment
of the purchase price.
A contract to sell 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
suspensive condition, because in a conditional contract of sale, the first element of consent
is present, although it is conditioned upon the happening of a contingent event which may
or may not occur. If the suspensive condition is not fulfilled, the perfection of the contract of
sale is completely abated. However, if the suspensive condition is fulfilled, the contract of
sale is thereby perfected, such that if there had already been previous delivery of the
property subject of the sale to the buyer, ownership thereto automatically transfers to the
buyer by operation of law without any further act having to be performed by the seller. In a
contract to sell, upon the fulfillment of the suspensive condition which is the full payment of
the purchase price, ownership will not automatically transfer to the buyer although the

property may have been previously delivered to him. The prospective seller still has to
convey title to the prospective buyer by entering into a contract of absolute sale.
It is essential to distinguish between a contract to sell and a conditional contract of sale
specially in cases where the subject property is sold by the owner not to the party the seller
contracted with, but to a third person, as in the case at bench. In a contract to sell, there
being no previous sale of the property, a third person buying such property despite the
fulfillment of the suspensive condition such as the full payment of the purchase price, for
instance, cannot be deemed a buyer in bad faith and the prospective buyer cannot seek the
relief of reconveyance of the property. There is no double sale in such case. Title to the
property will transfer to the buyer after registration because there is no defect in the ownerseller's title per se, but the latter, of course, may be used for damages by the intending
buyer.
In a conditional contract of sale, however, upon the fulfillment of the suspensive condition,
the sale becomes absolute and this will definitely affect the seller's title thereto. In fact, if
there had been 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. Such second buyer of the property who may
have had actual or constructive knowledge of such defect in the 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 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.
The agreement could not have been a contract to sell because the sellers herein made no
express reservation of ownership or title to the subject parcel of land. Furthermore, the
circumstance which prevented the parties from entering into an absolute contract of sale
pertained to the sellers themselves (the certificate of title was not in their names) and not
the full payment of the purchase price. Under the established facts and circumstances of the
case, the Court may safely presume that, had the certificate of title been in the names of
petitioners-sellers at that time, there would have been no reason why an absolute contract
of sale could not have been executed and consummated right there and then.

What is clearly established by the plain language of the subject document is that when the
said "Receipt of Down Payment" was prepared and signed by petitioners Romeo A. Coronel,
et al., the parties had agreed to a conditional contract of sale, consummation of which is
subject only to the successful transfer of the certificate of title from the name of petitioners'
father, Constancio P. Coronel, to their names.
The provision on double sale presumes title or ownership to pass to the first buyer, the
exceptions being: (a) when the second buyer, in good faith, registers the sale ahead of the
first buyer, and (b) should there be no inscription by either of the two buyers, when the
second buyer, in good faith, acquires possession of the property ahead of the first buyer.
Unless, the second buyer satisfies these requirements, title or ownership will not transfer to
him to the prejudice of the first buyer. 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. If a vendee in a double sale registers that 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 pervious sale, the registration
will constitute a registration in bad faith and will not confer upon him any right.