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[G.R. No. 119777. October 23, 1997]

THE HEIRS OF PEDRO ESCANLAR, FRANCISCO HOLGADO and the SPOUSES DR.
EDWIN A. JAYME and ELISA TAN-JAYME, petitioners,
vs.
THE HON. COURT OF APPEALS, GENEROSA MARTINEZ, CARMEN CARI-AN,
RODOLFO CARI-AN, NELLY CHUA CARI-AN, for herself and as guardian ad litem
of her minor son, LEONELL C. CARI-AN, FREDISMINDA CARI-AN, the SPOUSES
PAQUITO CHUA and NEY SARROSA-CHUA and THE REGISTER OF DEEDS OF
NEGROS OCCIDENTAL, respondents.

[G.R. No. 120690. October 23, 1997]

FRANCISCO HOLGADO and HRS. OF PEDRO ESCANLAR, namely BERNARDO,
FELY, SONIA, LILY, DYESEBEL and NOEMI all surnamed ESCANLAR, petitioners,
vs.
HON. COURT OF APPEALS, GENEROSA MARTINEZ, CARMEN CARI-AN, RODOLFO
CARI-AN, NELLY CHUA CARI-AN, for herself and as guardian ad litem of her
minor son, LEONELL C. CARI-AN and FREDISMINDA CARI-AN, and SP. PAQUITO
CHUA and NEY SARROSA CHUA and REGISTER OF DEEDS OF NEGROS
OCCIDENTAL, respondents.

Facts:
Spouses Nombre and Cari-an died without a child. Nombre’s heirs include his
nephews and grandnephews. Two parcels of land formed part of the estate of
Nombre and Cari-an. The Private Respondents, heirs of Cari-an executed a Deed of
Sale in favor of petitioners Escanlar and Holgado. Petitioners paid P50,000.00 as a
form of down payment, but was unable to pay the remaining balance (paid only 12
installments). Being former lessees, petitioners continued in possession of the said
lots, and continued to pay rent. Private Respondent later sold the said lots to the
Chua spouses. Private Respondent then filed an action for cancellation of sale
against petitioners, for failure to pay the balance. Petitioners however, sold their
rights and interests over the said lots to Jayme, and turned over possession.

The Regional Trial Court ruled that the Sale to petitioners was nullified since all the
properties of the estate had been transferred and titled to in the name of the Chua
spouses. On appeal, the Court of Appeals affirmed, questioned deed of sale (one with
petitioners) is a contract to sell because it shall become effective only upon approval
by the probate court and upon full payment of the purchase price.

Issue:
Whether or not the sale was a contract to sell and therefore, private respondents
may rescind the contract the moment the buyer fails to pay.

Held:
The sale of rights, interests and participation as to 1/2 portion pro indiviso of the
two subject lots is a contract of sale for the following reasons:

First, private respondents as sellers did not reserve unto themselves the ownership
of the property until full payment of the unpaid balance of P225,000.00.

Second, there is no stipulation giving the sellers the right to unilaterally rescind the
contract the moment the buyer fails to pay within the fixed period. Prior to the sale,
petitioners were already in possession of the subject property as lessees. Upon sale
to them of the rights, interests and participation as to the 1/2 portion pro indiviso,
they remained in possession, not in concept of lessees anymore but as owners
through symbolic delivery known as traditio brevi manu.

Under Article 1477 of the Civil Code, the ownership of the thing sold is acquired by
the vendee upon actual or constructive delivery thereof. In a contract of sale, the
non-payment of the price is a resolutory condition which extinguishes the
transaction that, for a time, existed and discharges the obligations created
thereunder. The remedy of an unpaid seller in a contract of sale is to seek either
specific performance or rescission. In contracts to sell, ownership is retained by the
seller and is not to pass until the full payment of the price. Such payment is a
positive suspensive condition, the failure of which is not a breach of contract but
simply an event that prevented the obligation of the vendor to convey title from
acquiring binding force. To illustrate, although a deed of conditional sale is
denominated as such, absent a proviso that title to the property sold is reserved in
the vendor until full payment of the purchase price nor a stipulation giving the
vendor the right to unilaterally rescind the contract the moment the vendee fails to
pay within a fixed period, by its nature, it shall be declared a deed of absolute sale.