G.R. No. 97442 - Ocampo vs. Court of Appeals

The case involves a dispute over an 18,260-square meter lot in Tigbauan, Iloilo, originally owned by Severino Tolosa.
Two contracts were executed for the sale of the same property: an "Agreement to Sell Real Property" with Pilar T. Ocampo and a "Contract to Sell" with Magdalena S. Villaruz.
Ocampo's contract was executed on April 21, 1975, while Villaruz's contract was executed on June 3, 1977.
Ocampo made partial payments totaling P20,600.00, while Villaruz's contract stipulated a payment of P94,300.00.

Ocampo annotated an adverse claim on Tolosa's title on June 6, 1976, after discovering a mortgage on the property.
Tolosa attempted to cancel Ocampo's adverse claim and offered her a refund or a share of proceeds from a potential sale.
Ocampo expressed her willingness to pay the remaining balance of P5,400.00 for the property.
Tolosa filed a petition to cancel Ocampo's adverse claim, which was denied by the court.

The trial court dismissed Tolosa's complaint and declared the contract with Villaruz null and void, ordering Tolosa to execute a deed of sale in favor of Ocampo.
Villaruz appealed the decision to the Court of Appeals, which reversed the trial court's ruling and declared Villaruz the absolute owner of the property.
The appellate court based its decision on the premise that Ocampo's agreement was merely a contract to sell, thus allowing Tolosa to validly convey the property to Villaruz.

The Supreme Court analyzed the nature of the agreements between Tolosa and Ocampo, concluding that the "Agreement to Sell Real Property" was a perfected contract of absolute sale.
The court emphasized that the absence of a deed of absolute sale did not negate the transfer of ownership, as the contract's terms indicated an immediate transfer of rights upon payment.
The court referenced previous rulings that established criteria for distinguishing between a contract of sale and a contract to sell.

Ocampo's failure to pay the full purchase price within the stipulated period did not automatically void the contract.
The court noted that Tolosa's acceptance of late payments constituted a waiver of his right to rescind the contract.
Ocampo's offer to pay the remaining balance prior to Tolosa's alleged rescission further demonstrated her intention to fulfill her contractual obligations.

The court determined that Ocampo had a better claim to the property based on the timing of her contract and her good f...continue reading