Case Digest (G.R. No. 172733)
Facts:
Sps. Cornelio Joel I. Orden and Maria Nympha v. Orden, and Register of Deeds of Negros Oriental, G.R. No. 172733, August 20, 2008, Supreme Court Third Division, Chico‑Nazario, J., writing for the Court.
Petitioners spouses Cornelio Joel I. Orden and Maria Nympha Velardo Orden owned two parcels of land in Sibulan, Negros Oriental (TCT Nos. T‑27159 and T‑27160) and the residential house thereon. On 29 September 1994 they executed a document titled Deed of Absolute Sale purporting to sell the properties for P1,900,000.00 to spouses Arturo Aurea and Melodia C. Aurea. Simultaneously the Aureas executed a Joint Affidavit declaring that the true purchasers were spouses Ernesto P. Cobile and Susana M. Cobile, American residents of Hawaii.
Respondents Cobile paid P384,000.00 immediately and later P354,596.28, and signed a separate promissory note promising to pay P566,000.00 on or before 31 October 1994 and the balance of P950,000.00 upon transfer of title. All transaction documents were prepared by petitioners’ counsel, who suggested listing the Aureas as nominal vendees because the Cobiles were (allegedly) foreign nationals. The Cobiles ultimately paid a total of P738,596.28 but failed to pay the balance and never received title or possession. Petitioners wrote the Cobiles on 11 March 1995 advising that failure to pay within ten days would result in disposal of the property to others. On 21 May 1996 petitioners sold the properties to Fortunata Adalim Houthuijzen, who obtained registration of the titles.
On 30 September 1997 the Aureas, the Cobiles and their attorney‑in‑fact filed suit in the Regional Trial Court (Civil Case No. 12056, Branch 44) against petitioners and the Register of Deeds for enforcement of contract, damages, and injunctive relief; petitioners answered and counterclaimed for rescission and damages. The Houthuijzens were impleaded as subsequent purchasers. The trial court initially dismissed for lack of interest to prosecute but later reinstated the case; it granted the Houthuijzens’ motion to dismiss as to them, holding they were purchasers in good faith. After re‑raffle to Branch 33 and trial, the RTC on 26 April 2002 ordered petitioners to return P738,596.28 to the Cobiles with twenty percent interest per annum from filing, finding a contract of sale had been perfected but title had passed to an innocent purchaser. The RTC also declined specific performance o...(Subscriber-Only)
Issues:
- Did the parties enter into a Contract of Sale or a Contract to Sell (i.e., was transfer of ownership subject to a positive suspensive condition)?
- What are the legal consequences of the contract’s nature: may petitioners be compelled to transfer title, was judicial or notarial rescission required, and are petitioners liable to return payments with interest...(Subscriber-Only)
Ruling:
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Ratio:
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Doctrine:
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