54 SUPREME COURT

REPORTS ANNOTATED
Chua vs. Court of Appeals
G.R.No.119255.April9,2003. *

TOMAS K. CHUA, petitioner,vs.COURT OF APPEALS and ENCARNACION

VALDESCHOY,respondents.

CivilProcedure;PleadingsandPractice;Appeals;Anissuenotraisedinthecourtbelow
cannotberaisedforthefirsttimeonappeal.Anissuenotraisedinthecourtbelowcannot
beraisedforthefirsttimeonappeal,asthisisoffensivetothebasicrulesoffairplay,
justiceanddueprocess.Inaddition,whenapartydeliberatelyadoptsacertaintheory,and
the case is tried and decided on that theory in the court below, the party will not be
permittedtochangehistheoryonappeal.Topermithimtochangehistheorywillbeunfair
totheadverseparty.
Civil Law;Contracts;Sales;Contract of Sale vs. Contract to Sell;The distinction
betweenacontractofsaleandcontracttoselliswellsettled.Inacontractofsale,thetitle
tothepropertypassestothevendeeuponthedeliveryofthethingsold;inacontracttosell,
ownershipis,byagreement,reservedinthevendorandisnottopasstothevendeeuntil
fullpaymentofthepurchaseprice.Otherwisestated,inacontractofsale,thevendorloses
ownershipoverthepropertyandcannotrecoverituntilandunlessthecontractisresolved
orrescinded;whereas,inacontracttosell,titleisretainedbythevendoruntilfullpayment
oftheprice.Inthelattercontract,paymentofthepriceisapositivesuspensivecondition,
failureofwhichisnotabreachbutaneventthatpreventstheobligationofthevendorto
conveytitlefrombecomingeffective.
Same;Same;Same;EarnestMoney;Theearnestmoneyformspartoftheconsideration
onlyifthesaleisconsummateduponfullpaymentofthepurchaseprice.Itistruethat
Article 1482 of the Civil Code provides that [W]henever earnest money is given in a
contractofsale,itshallbeconsideredaspartofthepriceandproofoftheperfectionofthe
contract.However,thisarticlespeaksofearnestmoneygiveninacontractofsale.Inthis
case,theearnestmoneywasgiveninacontracttosell.TheReceiptevidencingthecontract
tosellstipulatesthattheearnestmoneyisaforfeitabledeposit,tobeforfeitedifthesaleis
notconsummatedshouldChuafailtopaythebalanceofthepurchaseprice.Theearnest
moneyformspartoftheconsiderationonlyifthesaleisconsummateduponfullpaymentof
thepurchaseprice.
Same;Same;Same;Itisonlyupontheexistenceofthecontractofsalethattheseller
becomesobligatedtotransfertheownershipofthethingsoldtothebuyer.Itisonlyupon
theexistenceofthecontractofsalethatthe
______________

*
FIRSTDIVISION.

55

VOL. 401, 55
APRIL 9, 2003
 Chua vs. Court of
Appeals
seller becomes obligated to transfer the ownership of the thing sold to the buyer.
Article 1458 of the Civil Code defines a contract of sale as follows: Art. 1458. By the
contractofsaleoneofthecontractingpartiesobligateshimselftotransfertheownership
ofandtodeliveradeterminatething,andtheothertopaythereforapricecertaininmoney
oritsequivalent.xxx.(Emphasissupplied)Priortotheexistenceofthecontractofsale,
thesellerisnotobligatedtotransferownershiptothebuyer,evenifthereisacontractto
sellbetweenthem.Itisalsoupontheexistenceofthecontractofsalethatthebuyeris
obligated to pay the purchase price to the seller. Since the transfer of ownership is in
exchangeforthepurchaseprice,theseobligationsmustbesimultaneouslyfulfilledatthe
timeoftheexecutionofthecontractofsale,intheabsenceofacontrarystipulation.
Same;Same;Same;Delivery;Thedelivery,therefore,madeinanyoftheformsprovided
inarticles1497to1505signifiesthatthetransmissionofownershipfromvendortovendee
hastakenplace.Deliveryisnotonlyanecessaryconditionfortheenjoymentofthething,
butisamodeofacquiringdominionanddeterminesthetransmissionofownership,the
birthoftherealright.Thedelivery,therefore,madeinanyoftheformsprovidedinarticles
1497to1505signifiesthatthetransmissionofownershipfromvendortovendeehastaken
place.Thedeliveryofthethingconstitutesanindispensablerequisiteforthepurposeof
acquiringownership.Ourlawdoesnotadmitthedoctrineoftransferofpropertybymere
consent;theownership,thepropertyright,isderivedonlyfromdeliveryofthething.xxx.
(Emphasissupplied)
Same;Same;Same; Same; Payment of the capital gains tax, however, is not a pre
requisitetothetransferofownershiptothelawyer.Thebuyerhasmoreinterestinhaving
thecapitalgainstaxpaidimmediatelysincethisisaprerequisitetotheissuanceofanew
Torrenstitleinhisname.Nevertheless,asfarasthegovernmentisconcerned,thecapital
gainstaxremainsaliabilityofthesellersinceitisataxonthesellersgainfromthesaleof
the real estate.Payment of the capital gains tax, however, is not a prerequisite to the
transferofownershiptothebuyer.Thetransferofownershiptakeseffectuponthesigning
andnotarizationofthedeedofabsolutesale.

PETITIONforreviewoncertiorariofadecisionoftheCourtofAppeals.

ThefactsarestatedintheopinionoftheCourt.
BenitoFabieforpetitioner.
ReynaldoA.Ruizforprivaterespondent.
56
56 SUPREME COURT
REPORTS ANNOTATED
Chua vs. Court of Appeals

CARPIO,J.:
TheCase
This is a petition for review on certiorari seeking to reverse the decision of the
1

CourtofAppealsinanactionforspecificperformance filedintheRegionalTrial
2

Court by petitioner Tomas K. Chua (Chua) against respondent Encarnacion

3

ValdesChoy(ValdesChoy).ChuasoughttocompelValdesChoytoconsummate
thesaleofherparaphernalhouseandlotinMakatiCity.TheCourtofAppeals
reversedthedecision renderedbythetrialcourtinfavorofChua.
4

TheFacts
ValdesChoyadvertisedforsaleherparaphernalhouseandlot(Property)withan
areaof718squaremeterslocatedatNo.40TampingcoStreetcomerHidalgoStreet,
SanLorenzoVillage,MakatiCity.ThePropertyiscoveredbyTransferCertificateof
TitleNo.162955(TCT)issuedbytheRegisterofDeedsofMakatiCityinthename
ofValdesChoy.Chuarespondedtotheadvertisement.Afterseveralmeetings,Chua
andValdesChoyagreedonapurchasepriceofP10,800,000.00payableincash.
On30June1989,ValdesChoyreceivedfromChuaacheckforP100,000.00.The
receipt(Receipt)evidencingthetransaction,signedbyValdesChoyasseller,and
Chuaasbuyer,reads:
30June1989

RECEIPT

RECEIVEDfromMR.TOMASK.CHUAPBComCheckNo.206011intheamount
of ONE HUNDRED THOUSAND PESOS ONLY (P100,000.00) as EARNEST
MONEY for the sale of the property located at 40 Tampingco cor. Hidalgo, San
LorenzoVillage,Makati,MetroManila(Area:718sq.meters).
______________

1
InCAG.R.CVNo.37652,dated23February1995,pennedbyAssociateJusticeArtemonD.Luna
withAssociateJusticesCancioC.GarciaandGodardoA.Jacintoconcurring.
2
CivilCaseNo.895772.
3
Branch142,Makati,NationalCapitalJudicialRegion,presidedbyJudgeSalvadorP.DeGuzman,
Jr.
4
Dated29August1991.

57
VOL. 401, APRIL 9, 57
2003
Chua vs. Court of
Appeals
The balance of TEN MILLION SEVEN HUNDRED THOUSAND
(P10,700,000.00)ispayableonorbefore15 July1989.CapitalGainsTaxforthe
5

accountoftheseller.Failuretopaybalanceonorbefore15July1989forfeitsthe
earnestmoney.Thisprovidedthatallpapersareinproperorder. 6

CONFORME:ENCARNACIONVALDES
 Seller
TOMASK.CHUA
Buyer
xxx.7

Inthemorningof13July1989,ChuasecuredfromPhilippmeBankofCommerce
(PBCom) a managers check for P480,000.00. Strangely, after securing the
managers check, Chua immediately gave PBCom a verbal stop payment order
claimingthatthismanagerscheckforP480,000.00waslostand/ormisplaced. On 8

thesameday,afterreceiptofChuasverbalorder,PBComAssistantVicePresident
Julie C. Pe notified in writing the PBCom Operations Group of Chuas stop
9

paymentorder.
In the afternoon of 13 July 1989, Chua and ValdesChoy met with their
respective counsels to execute the necessary documents and arrange the
payments. ValdesChoy as vendor and Chua as vendeesignedtwo Deeds of
10

AbsoluteSale(DeedsofSale).ThefirstDeedofSalecoveredthehouseandlotfor
the purchase price of P8,000,000.00. The second Deed of Sale covered the
11

furnishings, fixtures and movable properties contained in the house for the
purchasepriceofP2,800,000.00. Thepartiesalsocomputedthecapitalgainstaxto
12

amounttoP485,000.00.
On14July1989,thepartiesmetagainattheofficeofValdesChoyscounsel.
Chua handed to ValdesChoy the PBCom managers check for P485,000.00 so
ValdesChoycouldpaythecapital
______________

Thetypewrittenfigure30wascorrectedininkto15.
5

TheitalicizedportionswerealsohandwrittenininkandinitialedbyChua.
6

AnnexA,Records,p.7.
7

TSN,24July1990,pp.2028.
8

Exhibit8,Records,p.140.
9

TSN,25January1990,p.87.
10

ExhibitB,Records,pp.107109.
11

ExhibitC,Records,pp.110112.
12

58
58 SUPREME COURT
REPORTS ANNOTATED
Chua vs. Court of Appeals
gainstaxasshedidnothavesufficientfundstopaythetax.ValdesChoyissueda
receipt showing that Chua had a remaining balance of P10,215,000.00 after
deductingtheadvancesmadebyChua.Thisreceiptreads:
July14,1989

ReceivedfromMR.TOMASK.CHUAPBCom.CheckNo.325851intheamountofFOUR
HUNDREDEIGHTYFIVETHOUSANDPESOSONLY(P485,000.00)asPartialPayment
forthesaleofthepropertylocatedat40TampingcoCor.HidalgoSt.,SanLorenzoVillage,
Makati,MetroManila(Area718sq.meters),coveredbyTCTNo.162955oftheRegistryof
DeedsofMakati,MetroManila.
The total purchase price of the abovementioned property is TEN MILLION EIGHT
HUNDREDTHOUSANDPESOSonly,brokendownasfollows:

SELLING PRICE P10,800,000.

00
EARNES P100,000.
T 00
MONEY
PARTIAL 485,000.00
PAYMEN
T
585,000.00
BALANCE DUE TO
ENCARNACION P10,215,000.
VALDEZ-CHOY 00
PLUS P80,000.00 for
documentary
stamps paid in advance 80,000.00
by seller
P10,295,000.
00
xxx. 13

Onthesameday,14July1989,ValdesChoy,accompaniedbyChua,depositedthe
P485,000.00managerschecktoheraccountwithTradersRoyalBank,Shethen
purchasedaTradersRoyalBankmanagerscheckforP480,000.00payabletothe
CommissionerofInternalRevenueforthecapitalgainstax.ValdesChoyandChua
returnedtotheofficeofValdesChoyscounselandhandedtheTradersRoyalBank
checktothecounselwhoundertooktopaythecapitalgainstax.Itwasthenalso
that Chuashowedto ValdesChoy a PBCom managers check for P10,215,000.00
representingthebalanceofthepurchaseprice.Chua,however,didnotgivethis
PBCommanagerschecktoValdesChoybecausetheTCTwasstillregisteredinthe
nameofVal
______________

Records,p.73.
13

59
VOL. 401, APRIL 9, 59
2003
Chua vs. Court of Appeals
desChoy.ChuarequiredthatthePropertyberegisteredfirstinhisnamebeforehe
wouldturnoverthechecktoValdesChoy.ThisangeredValdesChoywhotoreup
the Deeds of Sale, claiming that what Chua required was not part of their
agreement. 14

On the same day, 14 July 1989, Chua confirmed his stop payment order by
submitting to PBCom an affidavit of loss of the PBCom Managers Check for
15

P480,000.00. PBCom Assistant VicePresident Pe, however, testified that the

managers check was nevertheless honored because Chua subsequently verbally
advised thebankthathe was liftingthe stoppaymentorder due tohis special
arrangementwiththebank. 16

On15July1989,thedeadlineforthepaymentofthebalanceofthepurchase
price,ValdesChoysuggestedtohercounselthattobreaktheimpasseChuashould
depositinescrowtheP10,215,000.00balance. Uponsuchdeposit,ValdesChoywas
17

willing to cause the issuance of a new TCT in the name of Chua even without
receivingthebalanceofthepurchaseprice.ValdesChoybelievedthiswastheonly
wayshecouldprotectherselfifthecertificateoftitleistransferredinthenameof
the buyer before she is fully paid. ValdesChoys counsel promised to relay her
suggestiontoChuaandhiscounsel,butnothingcameoutofit.
On17July1989,ChuafiledacomplaintforspecificperformanceagainstValdes
Choywhichthetrialcourtdismissedon22November1989.On29November1989,
Chuarefiledhiscomplaintforspecificperformancewithdamages.Aftertrialin
due course, the trial court rendered judgment in favor of Chua, the dispositive
portionofwhichreads:
ApplyingtheprovisionsofArticle1191ofthenewCivilCode,sincethisisanactionfor
specificperformancewheretheplaintiff,asvendee,wantstopursuethesale,andinorder
thatthefearsofthedefendantmaybeallayedandstillhavethesalematerialize,judgment
isherebyrendered:

1. I.1.OrderingthedefendanttodelivertotheCourtnotlaterthanfive(5)daysfrom
finalityofthisdecision:

______________

TSN,25January1990,p.226.
14

Exhibit9,Records,p.141.
15

TSN,24July1989,p.37.
16

TSN,5February1990,pp.3738.
17

60
60 SUPREME COURT
REPORTS ANNOTATED
Chua vs. Court of Appeals

1. a.theownersduplicatecopyofTCTNo.162955registeredinhername;
2. b.thecoveringtaxdeclarationandthelatesttaxreceiptevidencingpayment
ofrealestatetaxes;

3. c.thetwodeedsofsalepreparedbyAtty.MarkBocoboonJuly13,1989,duly
executedbydefendantinfavoroftheplaintiff,whethernotarizedornot;and

1. 2.Within five (5) days from compliance by the defendant of the above,
orderingtheplaintifftodelivertotheBranchClerkofCourtofthisCourt
the sum of P10,295,000.00 representing the balance of the consideration
(withthesumofP80,000.00forstampsalreadyincluded);

2. 3.Ordering the Branch Clerk of this Court or her duly authorized

representative:

1. a.tomakerepresentationswiththeBIRforthepaymentofcapitalgainstax
forthesaleofthehouseandlot(nottoincludethefixtures)andtopaythe
samefromthefundsdepositedwithher;

2. b.topresentthedeedofsaleexecutedinfavoroftheplaintiff,togetherwith
theownersduplicatecopyofTCTNo.162955,realestatetaxreceiptand
proofofpaymentofcapitalgainstax,totheMakatiRegisterofDeeds;

3. c.topaytherequiredregistrationfeesandstamps(ifnotyetadvancedbythe
defendant)andifneededupdatetherealestatetaxesalltobetakenfrom
thefundsdepositedwithher;and

4. d.surrendertotheplaintiffthenewTorrenstitleovertheproperty;

1. 4.Shouldthedefendantfailorrefusetosurrenderthetwodeedsofsaleover
thepropertyandthefixturesthatwerepreparedbyAtty.MarkBocoboand
executedbytheparties,theBranchClerkofCourtofthisCourtishereby
authorizedandempoweredtoprepare,signandexecutethesaiddeedsof
saleforandinbehalfofthedefendant;

2. 5.Orderingthedefendanttopaytotheplaintiff;

1. a.thesumofP100,000.00representingmoralandcompensatorydamagesfor
theplaintiff;and

2. b.thesumofP50,000.00asreimbursementforplaintiffsattorneysfeesand
costoflitigation.
 1. 6.Authorizing the Branch Clerk of Court of this Court to release to the
plaintiff,tobetakenfromthefundssaidplaintiffhasdepositedwiththe
Court,theamountscoveredatparagraph5above;

2. 7.OrderingthereleaseoftheP10,295,000.00tothedefendantafterdeducting
therefromthefollowingamounts:

61
VOL. 401, APRIL 9, 61
2003
Chua vs. Court of Appeals

1. a.thecapitalgainstaxpaidtotheBIR;

2. b.theexpensesincurredintheregistrationofthesale,updatingofrealestatetaxes,
andtransferoftitle;and

3. c.theamountspaidunderthisjudgmenttotheplaintiff.

1. 8.Ordering the defendant to surrender to the plaintiff or his representatives the

premiseswiththefurnishingsintactwithinseventytwo(72)hoursfromreceiptof
theproceedsofthesale;

2. 9.Nointerestisimposedonthepaymenttobemadebytheplaintiffbecausehehad
alwaysbeenreadytopaythebalanceandthepremiseshadbeenusedoroccupied
bythedefendantforthedurationofthiscase.

1. II.Intheeventthatspecificperformancecannotbedoneforreasonsorcausesnot
attributabletotheplaintiff,judgmentisherebyrenderedorderingthedefendant:

1. 1.To refund to the plaintiff the earnest money in the sum of P100,000.00, with
interestatthelegalratefromJune30,1989untilfullypaid;

2. 2.TorefundtotheplaintiffthesumofP485,000.00withinterestatthelegalrate
fromJuly14,1989untilfullypaid;

3. 3.TopaytotheplaintiffthesumofP700,000.00intheconceptofmoraldamagesand
theadditionalsumofP300,000.00intheconceptofexemplarydamages;and

4. 4.TopaytotheplaintiffthesumofP100,000.00asreimbursementofattorneysfees
andcostoflitigation.

SOORDERED. 18
ValdesChoyappealedtotheCourtofAppealswhichreversedthedecisionofthe
trial court. The Court of Appeals handed down a new judgment, disposing as
follows:
WHEREFORE,thedecisionappealedfromisherebyREVERSEDandSETASIDE,and
anotheroneisrendered:

1. (1)DismissingCivilCaseNo.895772;

2. (2)DeclaringtheamountofP100,000.00,representingearnestmoneyasforfeitedin
favorofdefendantappellant;

3. (3)Ordering defendantappellant to return/refund the amount of P485,000.00 to

plaintiffappelleewithoutinterest;

4. (4)Dismissingdefendantappellantscompulsorycounterclaim;and

______________

Rollo,pp.7172.
18

62
62 SUPREME COURT
REPORTS ANNOTATED
Chua vs. Court of Appeals

1. (5)Orderingtheplaintiffappelleetopaythecosts. 19

Hence,theinstantpetition.
TheTrialCourtsRuling
ThetrialcourtfoundthatthetransactionreachedanimpassewhenValdesChoy
wanted to be first paid the full consideration before a new TCT covering the
PropertyisissuedinthenameofChua.Ontheotherhand,Chuadidnotwantto
paytheconsiderationinfullunlessanewTCTisfirstissuedinhisname.Thetrial
courtfaultedValdesChoyforthisimpasse.
Thetrialcourtheldthatthepartiesenteredintoacontracttosellon30June
1989, as evidenced by the Receipt for the P100,000.00 earnest money. The trial
courtpointedoutthatthecontracttosellwassubjecttothefollowingconditions:(1)
thebalanceofP10,700,000.00waspayablenotlaterthan15July1989;(2)Valdes
ChoymaystayinthePropertyuntil13August1989;and(3)allpapersmustbein
properorderbeforefullpaymentismade.
ThetrialcourtheldthatChuacompliedwiththetermsof.thecontracttosell.
ChuashowedthathewaspreparedtopayValdesChoytheconsiderationinfullon
13 July 1989, two days before the deadline of 15 July 1989. Chua even added
P80,000.00 for the documentary stamp tax. He purchased from PBCom two
managerschecksbothpayabletoValdesChoy.ThefirstcheckforP485,000.00was
topaythecapitalgainstax.ThesecondcheckforP10,215,000.00wastopaythe
balance of the purchase price. The trial court was convinced that Chua
demonstratedhiscapacityandreadinesstopaythebalanceon13July1989with
theproductionofthePBCommanagerscheckforP10,215,000.00.
Ontheotherhand,thetrialcourtfoundthatValdesChoydidnotperformher
correlativeobligationunderthecontracttoselltoputallthepapersinorder.The
trialcourtnotedthatasof14July1989,thecapitalgainstaxhadnotbeenpaid
becauseValdesChoyscounselwhowassupposedtopaythetaxdidnotdoso.The
trialcourtdeclaredthatValdesChoywasinapositiontodeliveronlytheowners
duplicatecopyoftheTCT,thesignedDeedsofSale,thetaxdeclarations,andthe
latestrealtytaxreceipt.The
______________

Ibid.,p.62.
19

63
VOL. 401, APRIL 9, 63
2003
Chua vs. Court of Appeals
trialcourtconcludedthatthesedocumentswerealluselesswithouttheBureauof
InternalRevenuereceiptevidencingfullpaymentofthecapitalgainstaxwhichisa
prerequisitetotheissuanceofanewcertificateoftitleinChuasname.
ThetrialcourtheldthatChuasnonpaymentofthebalanceofP10,215,000.00on
theagreeddatewasduetoValdesChoysfault.
TheCourtofAppealsRuling
Inreversingthetrialcourt,theCourtofAppealsruledthatChuasstancetopay
thefullconsiderationonlyafterthePropertyisregisteredinhisnamewasnotthe
agreement of the parties. The Court of Appeals noted that there is a whale of
differencebetweenthephrasesallpapersareinproperorderaswrittenonthe
Receipt,andtransferoftitleasdemandedbyChua.
Contrarytothefindingsofthetrialcourt,theCourtofAppealsfoundthatallthe
paperswereinorderandthatChuahadnovalidreasonnottopayontheagreed
date. ValdesChoy was ina positiontodelivertheowners duplicatecopyof the
TCT, the signed Deeds of Sale, the tax declarations, and the latest realty tax
receipt.ThePropertywasalsofreefromallliensandencumbrances.
TheCourtofAppealsdeclaredthatthetrialcourterredinconsideringChuas
showing to ValdesChoy of the PBCom managers check for P10,215,000.00 as
compliancewithChuasobligationtopayonorbefore15July1989.TheCourtof
Appeals pointed out that Chua did not want to give up the check unless the
propertywasalreadyinhisname. AlthoughChuademonstratedhiscapacityto
20

pay,thiscouldnotbeequatedwithactualpaymentwhichherefusedtodo.
 TheCourtofAppealsdidnotconsiderthenonpaymentofthecapitalgainstax
asfailurebyValdesChoytoputthepapersinproperorder.TheCourtofAppeals
explainedthatthepaymentofthecapitalgainstaxhasnobearingonthevalidityof
theDeedsofSale.Itisonlyafterthedeedsaresignedandnotarizedcanthefinal
computationandpaymentofthecapitalgainstaxbemade.
TheIssues
InhisMemorandum,Chuaraisesthefollowingissues:
______________

Rollo,p.60.
20

64
64 SUPREME COURT
REPORTS ANNOTATED
Chua vs. Court of Appeals

1. 1.WHETHER THERE IS A PERFECTED CONTRACT OF SALE OF

IMMOVABLEPROPERTY;

2. 2.WHETHER VALDESCHOY MAY RESCIND THE CONTRACT IN

CONTROVERSY WITHOUT OBSERVING THE PROVISIONS OF
ARTICLE1592OFTHENEWCIVILCODE;

3. 3.WHETHERTHEWITHHOLDINGOFPAYMENTOFTHEBALANCEOF
THEPURCHASEPRICEONTHEPARTOFCHUA(ASVENDEE)WAS
JUSTIFIEDBYTHECIRCUMSTANCESOBTAININGANDMAYNOTBE
RAISED AS GROUND FOR THE AUTOMATIC RESCISSION OF THE
CONTRACTOFSALE;

4. 4.WHETHERTHEREISLEGALANDFACTUALBASISFORTHECOURT
OFAPPEALSTODECLARETHEEARNESTMONEYINTHEAMOUNT
OFP100,000.00ASFORFEITEDINFAVOROFVALDESCHOY;

5. 5.WHETHER THE TRIAL COURTS JUDGMENT IS IN ACCORD WITH

LAW, REASON AND EQUITY DESERVING OF BEING REINSTATED
ANDAFFIRMED. 21

Theissuesforourresolutionare:(a)whetherthetransactionbetweenChuaand
ValdesChoy is a perfected contract of sale or a mere contract to sell, and (b)
whether Chua can compel ValdesChoy to cause the issuance of a new TCT in
Chuasnameevenbeforepaymentofthefullpurchaseprice.
TheCourtsRuling
Thepetitionisbereftofmerit.
 There is no dispute that ValdesChoy is .the absolute owner of the Property
whichisregisteredinher nameunderTCTNo.162955,freefrom all liens and
encumbrances. She was ready, able and willing to deliver to Chua the owners
duplicatecopyoftheTCT,thesignedDeedsofSale,thetaxdeclarations,andthe
latestrealtytaxreceipt.Thereisalsonodisputethaton13July1989,ValdesChoy
receivedPBComCheckNo.206011forP100,000.00asearnestmoneyfromChua.
Likewise, there is no controversy that the Receipt for the P100,000.00 earnest
moneyembodiedthetermsofthebindingcontractbetweenValdesChoyandChua.
Further,thereisnocontroversythatasembodiedintheReceipt,ValdesChoy
and Chua agreed on the following terms: (1) the balance of P10,215,000.00 is
payableonorbefore15July1989;(2)the
______________

Ibid.,p.203.
21

65
VOL. 401, APRIL 9, 65
2003
Chua vs. Court of Appeals
capitalgainstaxisfortheaccountofValdesChoy;and(3)ifChuafailstopaythe
balanceofP10,215,000.00onorbefore15July1989,ValdesChoyhastherightto
forfeittheearnestmoney,providedthatallpapersareinproperorder.On13July
1989,ChuagaveValdesChoythePBCommanagerscheckforP485,000.00topay
thecapitalgainstax.
BoththetrialandappellatecourtsfoundthatthebalanceofP10,215,000.00was
not actually paidto ValdesChoy on the agreed date. On 13 July 1989, Chua
didshowto ValdesChoy the PBCom managers check for P10,215,000.00, with
ValdesChoy as payee. However, Chuarefusedto give this check to ValdesChoy
untilanewTCTcoveringthePropertyisregisteredinChuasname.Or,asthetrial
courtputit,untilthereisproofofpaymentofthecapitalgainstaxwhichisapre
requisitetotheissuanceofanewcertificateoftitle.
FirstandSecondIssues:ContractofSaleorContracttoSell?
ChuahasconsistentlycharacterizedhisagreementwithValdezChoy,asevidenced
bytheReceipt,asacontracttosellandnotacontractofsale.ThishasbeenChuas
persistentcontentioninhispleadingsbeforethetrialandappellatecourts.
Chua now pleads for the first time that there is a perfected contract of sale
ratherthanacontracttosell.Hecontendsthattherewasnoreservationinthe
contractofsalethatValdesChoyshallretaintitletothePropertyuntilafterthe
sale.Therewasnoagreementforanautomaticrescissionofthecontractincaseof
Chuasdefault.Hearguesforthefirsttimethathispaymentofearnestmoneyand
itsacceptancebyValdesChoyprecludesthelatterfromrejectingthebindingeffect
ofthecontractofsale.Thus,ChuaclaimsthatValdesChoymaynotvalidlyrescind
thecontractofsalewithoutfollowingArticle1592 oftheCivilCodewhichrequires
22

demand,eitherjudiciallyorbynotarialact,beforerescissionmaytakeplace.
______________

Art.1592.Inthesaleofimmovableproperty,eventhoughitmayhavebeenstipulatedthatupon
22

failuretopaythepriceatthetimeagreedupontherescissionofthecontractshallofrighttakeplace,the
vendee may pay, even after the expiration of the period, as long as no demand for rescission of the
contracthasbeenmadeuponhimeitherjudiciallyorbyanotarialact.Afterthedemand,thecourtmay
notgranthimanewterm.

66
66 SUPREME COURT
REPORTS ANNOTATED
Chua vs. Court of Appeals
Chuasnewtheoryisnotwelltakeninlightofwellsettledjurisprudence.Anissue
notraisedinthecourtbelowcannotberaisedforthefirsttimeonappeal,asthisis
offensivetothebasicrulesoffairplay,justiceanddueprocess. Inaddition,whena 23

partydeliberatelyadoptsacertaintheory,andthecaseistriedanddecidedonthat
theoryinthecourtbelow,thepartywillnotbepermittedtochangehistheoryon
appeal.Topermithimtochangehistheorywillbeunfairtotheadverseparty. 24

Nevertheless,inordertoputtorestalldoubtsonthematter,weholdthatthe
agreement between Chua and ValdesChoy, as evidenced by the Receipt, is a
contracttosellandnotacontractofsale.Thedistinctionbetweenacontractofsale
andcontracttoselliswellsettled:
Inacontractofsale,thetitletothepropertypassestothevendeeuponthedeliveryofthe
thingsold;inacontracttosell,ownershipis,byagreement,reservedinthevendorandis
nottopasstothevendeeuntilfullpaymentofthepurchaseprice.Otherwisestated,ina
contractofsale,thevendorlosesownershipoverthepropertyandcannotrecoverituntil
and unless the contract is resolved or rescinded; whereas, in a contract to sell, title is
retainedbythevendoruntilfullpaymentoftheprice.Inthelattercontract,paymentofthe
priceisapositivesuspensivecondition,failureofwhichisnotabreachbutaneventthat
preventstheobligationofthevendortoconveytitlefrombecomingeffective. 25

AperusaloftheReceiptshowsthatthetrueagreementbetweenthepartieswasa
contracttosell.OwnershipoverthePropertywasretainedbyValdesChoyandwas
nottopasstoChuauntilfullpaymentofthepurchaseprice.
First,theReceiptprovidesthattheearnestmoneyshallbeforfeitedincasethe
buyerfailstopaythebalanceofthepurchasepriceonorbefore15July1989.In
suchevent,ValdesChoycansellthePropertytootherinterestedparties.Thereis
ineffectarightreservedinfavorofValdesChoynottopushthroughwiththesale
uponChuasfailuretoremitthebalanceofthepurchaseprice
______________

Riverav.CourtofAppeals,G.R.No.44111,10August1989,176SCRA169.
23

FMICv.CourtofAppeals,G.R.No.85141,28November1989,179SCRA638.
24
 Salazarv.CourtofAppeals,G.R.No.118203,5July1996,258SCRA317.
25

67
VOL. 401, APRIL 9, 67
2003
Chua vs. Court of Appeals
beforethedeadline.Thisisinthenatureofastipulationreservingownershipinthe
selleruntilfullpaymentofthepurchaseprice.Thisisalsosimilartogivingthe
sellertherighttorescindunilaterallythecontractthemomentthebuyerfailsto
paywithinafixedperiod. 26

Second,the agreement between Chua and ValdesChoy was embodied in a

receiptratherthaninadeedofsale,ownershipnothavingpassedbetweenthem.
The signing of the Deeds of Sale came later when ValdesChoy was under the
impression that Chua was about to pay the balance of the purchase price. The
absenceofaformaldeedofconveyanceisastrongindicationthatthepartiesdid
notintendimmediatetransferofownership,butonlyatransferafterfullpayment
ofthepurchaseprice. 27

Third,ValdesChoy retained possession ofthecertificateoftitle andall other

documentsrelativetothesale.WhenChuarefusedtopayValdesChoythebalance
of the purchase price, ValdesChoy also refused to turnover to Chua these
documents. TheseareadditionalproofthattheagreementdidnottransfertoChua,
28

eitherbyactualorconstructivedelivery,ownershipoftheProperty. 29

ItistruethatArticle1482oftheCivilCodeprovidesthat[W]heneverearnest
moneyisgiveninacontractofsale,itshallbeconsideredaspartofthepriceand
proof of the perfection of the contract. However, this article speaks of earnest
moneygiveninacontractofsale.Inthiscase,theearnestmoneywasgivenina
contract to sell. The Receipt evidencing the contract to sell stipulates that the
earnestmoneyisaforfeitabledeposit,tobeforfeitedifthesaleisnotconsummated
shouldChuafailtopaythebalanceofthepurchaseprice.Theearnestmoneyforms
partoftheconsiderationonlyifthesaleisconsummateduponfullpaymentofthe
purchaseprice.Ifthereisacontractofsale,ValdesChoyshouldhavetherightto
compelChuatopaythebalanceofthepurchaseprice.Chua,however,hastheright
towalkawayfromthetransaction,withnoobligationtopaythebalance,although
hewillforfeittheearnestmoney.Clearly,thereisnocontractofsale.Theear
______________

PhilippineNationalBankv.CourtofAppeals,G.R.No.119580,26September1996,262SCRA464.
26

Alfonsov.CourtofAppeals,G.R.No.63745,8June1990,186SCRA400.
27

TSN,5February1990,pp.3334.
28

Salazarv.CourtofAppeals,supra,seenote25.
29

68
68 SUPREME COURT
 REPORTS ANNOTATED
Chua vs. Court of Appeals
nestmoneywasgiveninacontracttosell,andthusArticle1482,whichspeaksofa
contractofsale,isnotapplicable.
SincetheagreementbetweenValdesChoyandChuaisamerecontracttosell,
thefullpaymentofthepurchasepricepartakesofasuspensivecondition.Thenon
fulfillment of the condition prevents the obligation to sell from arising and
ownershipisretainedbythesellerwithoutfurtherremediesbythebuyer. Article 30

1592oftheCivilCodepermitsthebuyertopay,evenaftertheexpirationofthe
period,aslongasnodemandforrescissionofthecontracthasbeenmadeuponhim
either judicially or by notarial act. However, Article 1592 does not apply to a
contracttosellwherethesellerreservestheownershipuntilfullpaymentofthe
price. 31

Third and Fourth Issues: Withholding of Payment of the Balance

ofthePurchasePriceandForfeitureoftheEarnestMoney
Chua insists that he was ready to pay the balance of the purchase price but
withheldpaymentbecauseValdesChoydidnotfulfillhercontractualobligationto
put all the papers in proper order. Specifically, Chua claims that ValdesChoy
failedtoshowthatthecapitalgainstaxhadbeenpaidafterhehadadvancedthe
moneyforitspayment.Forthesamereason,hecontendsthatValdesChoymaynot
forfeittheearnestmoneyevenifhedidnotpayontime.
There is a variance of interpretation on the phrase all papers are in proper
orderaswrittenintheReceipt.Thereisnodisputethough,thataslongasthe
papersareinproperorder,ValdesChoyhastherighttoforfeittheearnestmoney
ifChuafailstopaythebalancebeforethedeadline.
Thetrialcourtinterpretedthephrasetoincludepaymentofthecapitalgains
tax,withtheBureauofInternalRevenuereceiptasproofofpayment.TheCourtof
Appealsheldotherwise.WequoteverbatimtherulingoftheCourtofAppealson
thismatter:
Thetrialcourtmademuchfussinconnectionwiththepaymentofthecapitalgainstax,of
whichSection33oftheNationalInternalRevenueCodeof1977,isthegoverningprovision
insofarasitscomputationisconcerned.ThetrialcourtfailedtoconsiderSection34(a)of
thesaidCode,
______________

Roquev.Lapuz,G.R.No.L32811,31March1980,96SCRA741.
30

Alfonsov.CourtofAppeals,supra,seenote27.
31

69
VOL. 401, APRIL 9, 69
2003
Chua vs. Court of Appeals
the last sentence of which provides, that [t]he amount realized from the sale or other
dispositionofpropertyshallbethesumofmoneyreceivedplusthefairmarketvalueofthe
property(otherthanmoney)received;andthatthecomputationofthecapitalgainstax
canonlybefinallyassessedbytheCommissiononInternalRevenueuponthepresentation
oftheDeedsofAbsoluteSalethemselves,withoutwhichanyprematurecomputationofthe
capitalgainstaxbecomesofnomoment.Atanyrate,thecomputationandpaymentofthe
capitalgainstaxhasnobearinginsofarasthevalidityandeffectivenessofthedeedsofsale
inquestionareconcerned,becauseitisonlyafterthecontractsofsalearefinallyexecuted
indueformandhavebeendulynotarizedthatthefinalcomputationofthecapitalgains
taxcanfollowasamatterofcourse.Indeed,exhibitD,thePBCCheckNo.325851,dated
July 13, 1989, in the amount of P485,000.00, which is considered as part of the
considerationofthesale,wasdepositedinthenameofappellant,fromwhichsheinturn,
purchased the corresponding check in the amount representing the sum to be paid for
capitalgainstaxanddrawninthenameoftheCommissionerofInternalRevenue,which
thenallayedanyfearordoubtthatthatamountwouldnotbepaidtotheGovernmentafter
all. 32

WeseenoreasontodisturbtherulingoftheCourtofAppeals.
Inacontracttosell,theobligationofthesellertosellbecomesdemandableonly
upon the happening of the suspensive condition. In this case, the suspensive
condition is thefull payment of thepurchase priceby Chua. Suchfull payment
givesrisetoChuasrighttodemandtheexecutionofthecontractofsale.
It is only upon the existence of the contract of sale that the seller becomes
obligatedtotransfertheownershipofthethingsoldtothebuyer.Article1458ofthe
CivilCodedefinesacontractofsaleasfollows:
Art.1458.Bythecontractofsaleoneofthecontractingpartiesobligateshimselftotransfer
theownershipofandtodeliveradeterminatething,andtheothertopaythereforaprice
certaininmoneyoritsequivalent.
xxx.(Emphasissupplied)

Priortotheexistenceofthecontractofsale,thesellerisnotobligatedtotransfer
ownershiptothebuyer,evenifthereisacontracttosellbetweenthem.Itisalso
upontheexistenceofthecontractofsalethatthebuyerisobligatedtopaythe
purchasepricetothe
______________

32
Rollo,pp.6061.

70
70 SUPREME COURT
REPORTS ANNOTATED
Chua vs. Court of Appeals
seller.Sincethetransferofownershipisinexchangeforthepurchaseprice,these
obligations must be simultaneously fulfilled at the time of the execution of the
contractofsale,intheabsenceofacontrarystipulation.
 Inacontractofsale,theobligationsofthesellerarespecifiedinArticle1495of
theCivilCode,asfollows:
Art.1495.Thevendorisboundtotransfertheownershipofanddeliver,aswellaswarrant
thethingwhichistheobjectofthesale.(Emphasissupplied)

Theobligationoftheselleristotransfertothebuyerownershipofthethingsold.In
thesaleofrealproperty,thesellerisnotobligatedtotransferinthenameofthe
buyeranewcertificateoftitle,butrathertotransferownershipoftherealproperty.
Thereisadifferencebetweentransferofthecertificateoftitleinthenameofthe
buyer,andtransferofownershiptothebuyer.Thebuyermaybecometheownerof
therealpropertyevenifthecertificateoftitleisstillregisteredinthenameofthe
seller. As between the seller and buyer, ownership is transferred not by the
issuanceofanewcertificateoftitleinthenameofthebuyerbutbytheexecutionof
theinstrumentofsaleinapublicdocument.
Inacontractofsale,ownershipistransferredupondeliveryofthethingsold.As
thenotedcivillawcommentatorArturoM.Tolentinoexplainsit,
Deliveryisnotonlyanecessaryconditionfortheenjoymentofthething,butisamodeof
acquiringdominionanddetermines thetransmissionofownership,thebirthofthereal
right.Thedelivery,therefore,madeinanyoftheformsprovidedinarticles1497to1505
signifies that the transmission of ownership from vendor to vendee has taken place.The
deliveryof thethingconstitutesanindispensablerequisitefor the purposeof acquiring
ownership.Ourlawdoesnotadmitthedoctrineoftransferofpropertybymereconsent;the
ownership,thepropertyright,isderivedonlyfromdeliveryofthething.xxx. (Emphasis 33

supplied)

Inacontractofsaleofrealproperty,deliveryiseffectedwhentheinstrumentof
saleisexecutedinapublicdocument.Whenthedeedofabsolutesaleissignedby
thepartiesandnotarized,then
______________

ARTUROM.TOLENTINO,CIVILCODEOFTHEPHILIPPINES,VOL.V,p.51(1992).
33

71
VOL. 401, APRIL 9, 71
2003
Chua vs. Court of Appeals
deliveryoftherealpropertyisdeemedmadebythesellertothebuyer.Article1498
oftheCivilCodeprovidesthat
Art.1498.Whenthesaleismadethroughapublicinstrument,theexecutionthereofshall
beequivalenttothedeliveryofthethingwhichistheobjectofthecontract,iffromthedeed
thecontrarydoesnotappearorcannotclearlybeinferred.
xxx.

Similarly, in a contract to sell real property, once the seller is ready, able and
willingtosignthedeedofabsolutesalebeforeanotarypublic,thesellerisina
positiontotransferownershipoftherealpropertytothebuyer.Atthispoint,the
sellercomplieswithhisundertakingtoselltherealpropertyinaccordancewiththe
contracttosell,andtoassumealltheobligationsofavendorunderacontractof
salepursuanttotherelevantarticlesoftheCivilCode.Inacontracttosell,the
seller is not obligated to transfer ownership to the buyer. Neither is the seller
obligatedtocausetheissuanceofanewcertificateoftitleinthenameofthebuyer.
However,thesellermustputallhispapersinproperordertothepointthatheisin
apositiontotransferownershipoftherealpropertytothebuyeruponthesigningof
thecontractofsale.
In the instant case, ValdesChoy was in a position to comply with all her
obligationsasasellerunderthecontracttosell.First,shealreadysignedtheDeeds
ofSaleintheofficeofhercounselinthepresenceofthebuyer.Second,shewas
preparedtoturnovertheownersduplicateoftheTCTtothebuyer,alongwiththe
taxdeclarationsandlatestrealtytaxreceipt.Clearly,atthispointValdesChoywas
ready, able and willing to transfer ownership of the Property to the buyer as
requiredbythecontracttosell,andbyArticles1458and1495oftheCivilCodeto
consummatethecontractofsale.
Chua,however,refusedtogivetoValdesChoythePBCommanagerscheckfor
the balance of the purchase price. Chua imposed the condition that a new TCT
shouldfirstbeissuedinhisname,aconditionthatisfoundneitherinthelawnorin
thecontracttosellasevidencedbytheReceipt.Thus,atthispointChuawasnot
ready,ableandwillingtopaythefullpurchasepricewhichishisobligationunder
the contract to sell. Chua was also not in a position to assume the principal
obligationofavendeeinacontractof
72
72 SUPREME COURT
REPORTS ANNOTATED
Chua vs. Court of Appeals
sale,whichisalsotopaythefullpurchasepriceattheagreedtime.Article1582of
theCivilCodeprovidesthat
Art.1582.Thevendeeisboundtoacceptdeliveryandtopaythepriceofthethingsoldat
thetimeandplacestipulatedinthecontract.
xxx.(Emphasissupplied)

Inthiscase,thecontracttosellstipulatedthatChuashouldpaythebalanceofthe
purchasepriceonorbefore15July1989.ThesignedDeedsofSalealsostipulated
thatthebuyershallpaythebalanceofthepurchasepriceuponsigningofthedeeds.
Thus,theDeedsofSale,bothsignedbyChua,stateasfollows:
DeedofAbsoluteSalecoveringthelot:

xxx
 For and in consideration of the sum of EIGHT MILLION PESOS (P8,000,000.00),
PhilippineCurrency,receiptofwhichinfullisherebyacknowledgedbytheVENDORfrom
the VENDEE,the VENDOR sells, transfers and conveys unto the VENDEE, his heirs,
successorsandassigns,thesaidparcelofland,togetherwiththeimprovementsexisting
thereon,freefromallliensandencumbrances. (Emphasissupplied)
34

DeedofAbsoluteSalecoveringthefurnishings:

xxx
ForandinconsiderationofthesumofTWOMILLIONEIGHTHUNDREDTHOUSAND
PESOS (P2,800,000.00), Philippine Currency,receipt of which in full is hereby
acknowledged by the VENDOR from the VENDEE,the VENDOR sells, transfers and
conveysuntotheVENDEE,hisheirs,successorsandassigns,thesaidfurnitures,fixtures
and other movable propertiesthereon, free from all liens and encumbrances. (Emphasis
35

supplied)

However,ontheagreeddate,Chuarefusedtopaythebalanceofthepurchaseprice
asrequiredbythecontracttosell,thesignedDeedsofSale,andArticle1582ofthe
CivilCode.Chuawasthereforeindefaultandhasonlyhimselftoblameforthe
rescissionbyValdesChoyofthecontracttosell.
______________

ExhibitB,Records,pp.5153.
34

ExhibitC,Records,pp.5454(A).
35

73
VOL. 401, APRIL 9, 73
2003
Chua vs. Court of Appeals
Evenifmeasuredunderexistingusageorcustom,ValdesChoyhadallherpapers
inproperorder.Article1376oftheCivilCodeprovidesthat:
Art.1376.Theusageorcustomoftheplaceshallbeborneinmindintheinterpretationof
theambiguitiesofacontract,andshallfilltheomissionofstipulationswhichareordinarily
established.

Customarily, in the absence of a contrary agreement, the submission by an

individualsellertothebuyerofthefollowingpaperswouldcompleteasaleofreal
estate:(1)ownersduplicatecopyoftheTorrenstitle; (2)signeddeedofabsolute
36

sale;(3)taxdeclaration;and(3)latestrealtytaxreceipt.Thebuyercanretainthe
amountforthecapitalgainstaxandpayituponauthorityoftheseller,ortheseller
canpaythetax,dependingontheagreementoftheparties.
Thebuyerhasmoreinterestinhavingthecapitalgainstaxpaidimmediately
since this is a prerequisite to the issuance of a new Torrens title in his name.
Nevertheless,asfarasthegovernmentisconcerned,thecapitalgainstaxremainsa
liabilityofthesellersinceitisataxonthesellersgainfromthesaleofthereal
estate.Payment of the capital gains tax, however, is not a prerequisite to the
transferofownershiptothebuyer.Thetransferofownershiptakeseffectuponthe
signingandnotarizationofthedeedofabsolutesale.
______________

Section53ofPDNo.1529provides:
36

Section 53.Presentation of owners duplicate upon entry of new certificate.No voluntary instrument shall be
registeredbytheRegisterofDeeds,unlesstheownersduplicatecertificateispresentedwithsuchinstrument,except
incasesexpresslyprovidedforinthisDecreeoruponorderofthecourt,forcauseshown.
The production of the owners duplicate certificate, whenever any voluntary instrument is presented for
registration,shallbeconclusiveauthorityfromtheregisteredownertotheRegisterofDeedstoenteranewcertificate
or to make a memorandum of registration in accordance with such instrument, and the new certificate or
memorandumshallbebindingupontheregisteredowneranduponallpersonsclaimingunderhim,infavorofevery
purchaserforvalueandingoodfaith.
xxx.

74
74 SUPREME COURT
REPORTS ANNOTATED
Chua vs. Court of Appeals
TherecordingofthesalewiththeproperRegistryofDeeds andthetransferofthe 37

certificateoftitleinthenameofthebuyerarenecessaryonlytobindthirdparties
tothetransferofownership. Asbetweenthesellerandthebuyer,thetransferof
38

ownershiptakeseffectupontheexecutionofapublicinstrumentconveyingthereal
estate. RegistrationofthesalewiththeRegistryofDeeds,ortheissuanceofanew
39

certificate of title, does not confer ownership on the buyer. Such registration or
issuanceofanewcertificateoftitleisnotoneofthemodesofacquiringownership. 40

Inthiscase,ValdesChoywasready,ableandwillingtosubmittoChuaallthe
papersthat customarilywouldcompletethesale,andtopayaswellthecapital
gainstax.Ontheotherhand,ChuasconditionthatanewTCTbefirstissuedinhis
name before he pays the balance of P10,215,000.00, representing 94.58% of the
purchase price, is not customary in a sale of real estate. Such a condition, not
specifiedinthecontracttosellasevidencedbytheReceipt,cannotbeconsidered
partoftheomissionsofstipulationswhichareordinarilyestablishedbyusageor
custom. What is increasingly becoming customary is to deposit in escrow the
41

balanceofthepurchasepricependingtheissuanceofanewcertificateoftitleinthe
nameofthebuyer.ValdesChoysuggestedthissolutionbutunfortunately,itdrew
noresponsefromChua.
Chuahadnoreasontofearbeingswindled.ValdesChoywaspreparedtoturn
overtohimtheownersduplicatecopyoftheTCT,thesignedDeedsofSale,thetax
declarations,andthelatestrealtytaxreceipt.Therewasnohindrancetopayingthe
capitalgainstaxasChuahimselfhadadvancedthemoneytopaythesameand
ValdesChoy had procured a managers check payable to the Bureau of Internal
Revenuecoveringtheamount.Itwasonlyamatteroftimebeforethecapitalgains
tax would be paid. Chua acted precipitately in filing the action for specific
performanceamere
______________

Garciav.CourtofAppeals,G.R.Nos.L48971and49011,22January1980,95SCRA380.
37

Sections51and52,PropertyRegistrationDecree(PDNo.1529).
38

Saptov.Fabiana,103Phil.658(1958);Abuyo,etal.v.DeSuazo,124Phil.1138(1966);Philippine
39

SuburbanDevelopmentCorp.v.AuditorGeneral,G.R.No.L19545,18April1975,63SCRA397.
Bollozosv.YuTiengSu,G.R.No.L29442,11November1987,155SCRA506.
40

Mirasolv.Yusay,etal.,120Phil.407;11SCRA410(1964).
41

75
VOL. 401, APRIL 9, 75
2003
Chua vs. Court of Appeals
twodaysafterthedeadlineof15July1989whentherewasanimpasse.Whilethis
casewasdismissedon22November1989,hedidnotwasteanytimeinrefilingthe
sameon29November1989.
Accordingly,sinceChuarefusedtopaytheconsiderationinfullontheagreed
date, which is a suspensive condition, Chua cannot compel ValdesChoy to
consummatethesaleoftheProperty.Article1181oftheCivilCodeprovidesthat
ART. 1181. In conditional obligations, the acquisition of rights, as well as the
extinguishmentorlossofthosealreadyacquiredshalldependuponthehappeningofthe
eventwhichconstitutesthecondition.

Chua acquired no right to compel ValdesChoy to transfer ownership of the

Propertytohimbecausethesuspensiveconditionthefullpaymentofthepurchase
pricedidnothappen.ThereisnocorrelativeobligationonthepartofValdesChoy
totransferownershipofthePropertytoChua.Thereisalsonoobligationonthe
partofValdesChoytocausetheissuanceofanewTCTinthenameofChuasince
unlessexpresslystipulated,thisisnotoneoftheobligationsofavendor.
WHEREFORE,theDecisionoftheCourtofAppealsinCAG.R.CVNo.37652
dated23February1995isAFFIRMEDintoto.
SOORDERED.
Davide, Jr.(C.J., Chairman),Vitug,YnaresSantiagoandAzcuna,
JJ.,concur.

Judgmentaffirmedintoto.
Note.Transfer of title or an agreement to transfer it for a price paid or
promisedtobepaidistheessenceofsale.(CommissionerofInternalRevenuevs.
CourtofAppeals,271SCRA605[1997])

o0o
76