Alice agreed to sell a parcel of land with an area of 500 square meters registered in her name and covered by TCT No. 12345 in favor of Bernadette for the amount of ₱900,000.00. Their agreement dated October 15, 2015 reads as follows:
I, Bernadette, agree to buy the lot owned by Alice covered by TCT No. 12345 for the amount of ₱900,000.00 subject to the following schedule of payment:
Upon signing of agreement – ₱100,000.00
November 15, 2015 – ₱200,000.00
December 15, 2015 – ₱200,000.00
January 15, 2016 – ₱200,000.00
February 15, 2016 – ₱200,000.00
Title to the property shall be transferred upon full payment of ₱900,000.00 on or before February 15, 2016.
After making the initial payment of ₱100,000.00 on October 15, 2015, and the second instalment of ₱200,000.00 on November 15, 2015, Bernadette defaulted despite repeated demands from Alice.
In December 2016, Bernadette offered to pay her balance but Alice refused and told her that the land was no longer for sale. Due to the refusal, Bernadette caused the annotation of her adverse claim upon TCT No. 12345 on December 19, 2016. Later on, Bernadette discovered that Alice had sold the property to Chona on February 5, 2016, and that TCT No. 12345 had been cancelled and another one issued (TCT No. 67891) in favor of Chona as the new owner.
Bernadette sued Alice and Chona for specific performance, annulment of sale and cancellation of TCT No. 67891. Bernadette insisted that she had entered into a contract of sale with Alice; and that because Alice had engaged in double sale, TCT No. 67891 should be cancelled and another title be issued in Bernadette’s favor.
(a) Did Alice and Bernadette enter into a contract of sale of the lot covered by TCT No. 12345? Explain your answer. (4%)
(b) Did Alice engage in double sale of the property? Explain your answer. (4%)
Suggested Answer:
(a) No. Answer
Under the Civil Code and jurisprudence, in a contract of sale, title to the property passes to the buyer upon delivery of the thing sold. In contrast, in a contract to sell, ownership does not pass to the prospective buyer until full payment of the purchase price. The title of the property remains with the prospective seller. Rule
In the case at bar, the parties entered into a contract to sell. Alice as the seller reserved ownership over the property until complete payment of the purchase price by Bernadette as the buyer. Apply
Thus, Alice and Bernadette did not enter into a contract of sale. Conclusion
(b) No. Answer
Under the Civil Code and jurisprudence, a double sale contemplates at least two contracts of sale over the same property to at least two buyers. Rule
In the case at bar, the parties entered into a contract to sell, and not a contract of sale. Accordingly, there is only one contract of sale which is that between Alice and Chona Apply
Thus, Alice did not engage in double sale of the property. Conclusion
