RODOLFO ALFONSO AND NORMA G. ALFONSO, PETITIONERS, VS. COURT OF APPEALS, ROBERTO CHANCO AND MYRNA GARCIA CHANCO, RESPONDENTS.

Mr. and Mrs. Roberto Chanco were the
registered owners of a 239-square-meter lot in Barrio Sto.
Angel, Sta. Cruz, Laguna.  They entered
into an oral agreement with Mr. and Mrs. Rodolfo Alfonso regarding the
lot.  But as will shortly be seen, they
evidently had different notions of the precise terms of the agreement.  What is undisputed is that the Alfonsos paid P2,000.00 to the Chancos,
and that on that occasion the latter executed a private instrument of the
following tenor:

“August 21/73

Sa kinauukulan,

1.  Ako
si Roberto Chanco at Myrna Chanco ay tumanggap ng halagang (dalawang
libong piso) P2,000.00 sa mag-asawang Rodolfo Alfonso at
Norma Alfonso.

Bilang paunang bayad sa aking
lote sa Monserrat
Subdivision na kinatitirikan
ng kanilang bahay.

Sa katunayan ay pinirmahan
sa ibaba nito.

(S)  ROBERTO CHANCO                                                     (S) MYRNA G.
CHANCO

ROBERTO CHANCO                                                           MYRNA
G. CHANCO.”

It is the Alfonsos’ claim that their
understanding with the Chancos was that they would
pay to them the sum of P4,000.00, the balance of the consideration for the
transfer of the land to them, as soon as they obtained a loan from the
Philippine National Bank; that they had in fact gotten such a loan and then, on
or about October 6, 1973, offered to pay to the Chancos
that sum of P4,000.00, but the Chancos had
unjustifiably refused to accept the proffered payment and had instead sold the
property to the Namit Spouses, despite the Alfonsos‘ protests made not only to the Chancos
but also to the Namits.

It is the Chancos’ claim, on the other
hand, that they were selling their property because they were in urgent need of
money at the time; that they could thus give the Alfonsos
only one week within which to pay the balance; that when the Alfonsos failed to do so, the Chancos
told them they were cancelling their agreement and
selling the property to someone else, and tried to return the P2,000.00 they
had earlier received; that the Alfonsos refused to
accept the P2,000.00 and instead, tendered payment of an additional sum of
P2,500.00 which the Chancos, in turn, rejected; and
that the Chancos then executed a deed of sale,
conveying the land to the spouses, Serafin Namit and
Clarita Alvarez, for P6,000.00, and on the strength thereof, a new certificate
of title over the land was issued to the Namits.

The Alfonso Spouses brought suit in the Court of First Instance
of Laguna against the Chancos and the Namits to annul the sale and compel reconveyance
to them of the land in question.  Their
complaint was founded on the theory that their contract with the Chancos was one of absolute sale which could not be
unilaterally cancelled but required for its rescission demand therefor, judicially or by notarial
act, conformably with Article 1592 of the Civil Code reading as follows:

“ART. 1592.  In the sale
of immovable property, even though it may have been stipulated that upon
failure to pay the price at the time agreed upon the rescission of the contract
shall of right take place, the vendee may pay, even after the expiration of the
period, as long as no demand for rescission of the contract has been made upon
him either judicially or by a notarial act.  After the demand, the court may not grant him
a new term.”

Since, the Alfonsos argue, no such
demand for rescission of their contract
had been made by the Chancos, either judicially or by
notarial act, their tender of the balance on October
6, 1973 was timely and should have been accepted by the Chancos;
and the Chancos’ repudiation of the sale and their
second sale of the same property, this time to the Namits
— who had full knowledge of the first transaction — were illegal and void,
and rendered the Chancos and Namits
liable in damages.

After due proceedings the Trial Court^[1]
rendered judgment,^[2]
disposing as follows:

“(1) defendants Serafin and Clarita Namit to reconvey the lot covered
by Transfer Certificate of title No. T-73821 of the Registry of Deeds for the
Province of Laguna to plaintiff spouses Rodolfo and Norma G. Alfonso for
P6,000.00 upon the payment by the latter of P4,000.00, the difference of
P2,000.00 to be paid to the Namits by the Chancos, such amount having been previously received by the
latter from the Alfonsos, and

(2)  all defendants jointly
and severally to pay the plaintiffs the amount of P200.00 as actual damages,
plus costs.”

The Trial Court’s judgment was however reversed by the Court of
Appeals.  The dispositive portion of the latter’s judgment,^[3]
promulgated on November 8, 1982,^[4]
reads as follows:

“WHEREFORE, the judgment appealed from is hereby reversed and
another one rendered ordering the dismissal of the plaintiffs’ complaint and
upholding the validity of the sale of the lot in question made by the defendant
Chancos in favor of the defendant Namit
spouses, as well as the Transfer Certificate of Title No. T-73821 issued in the
names of Serafin Namit and
Clarita Alvarez.  The plaintiffs are to
be reimbursed the sum of P2,000.00 which they gave as down payment for the lot
but they are to pay the defendants attorney’s fees in the sum of P2,000.00.  In view of their relationship the parties
shall bear their own costs.”

The Appellate Court found that the evidence satisfactorily
established (1) that time was indeed of the essence in the Chancos’
agreement with the Alfonsos, the Chancos
being then in urgent need of money and hence, willing to transfer the property
only after full payment of the balance of the price in the sum of P4,000.00;
(2) that no deed of absolute sale in favor of the Alfonsos
was drawn up at the time (or any time thereafter, for that matter) — the only
writing executed being a receipt subscribed by the Chancos
simply acknowledging acceptance of P2,000.00 from the Alfonsos
as advance payment for their (the Chancos’) lot at
the Monserrat Subdivision; and (3) that actually, the
Alfonsos were not in a position to pay the full
amount of the purchase price.  On these
factual premises the Court adjudged it to be “conformable with law and
equity, and more in consonance with justice,” to uphold the extrajudicial
cancellation made by the Chancos of their agreement
with the Alfonsos, as well as the subsequent sale of
the lot to the Namit Spouses.

From this judgment the Alfonsos have
appealed to this Court, praying for reversal thereof.  Their plea must be denied.

The rule, of course, is that this Court is bound by the conclusions
of fact of the Court of Appeals, subject to certain well defined exceptions none of which exists
here.  Now, the facts declared by the
Court of Appeals to have been satisfactorily proven do not demonstrate the
existence of a contract of sale of the immovable in question but rather, a
contract to sell it; hence the legal provision invoked by the Alfonsos, Article 1592 of the Civil Code, supra,
cannot apply.

The issue raised by the Alfonsos is not
new.  This Court has already had occasion, more than once, to
pass upon that precise issue and
resolve it adversely to the Alfonsos’ position.

Manuel v. Rodriguez, 109 Phil. 1, was one such
occasion.  In Manuel, “only the price and the terms of payment were
in writing,” but the most important matter in the controversy, the alleged
transfer of title was never “reduced to any written document.  It was held that the contract should not be
considered as a written but an oral
one; not a sale but a promise to sell; and that “the absence of a formal
deed of conveyance” was a strong indication “that the parties did not
intend immediate transfer of title, but only a transfer after full payment of
the price.” Under these circumstances, the Court ruled Article 1504 of the
Civil Code of 1889 (Art. 1592 of the present Code) to be inapplicable to the
contract in controversy — a contract to sell or promise to sell — “where
title remains with the vendor
until fulfillment of a positive suspensive condition,
such as full payment of the price ** .”^[5]

And in Roque v.
Lapuz, 96 SCRA 741, the Court reiterated
the doctrine, affirmed by the “overwhelming weight of authority culminating in the Luzon Brokerage v. Maritime cases,^[6]* * that Article 1592 of the New
Civil Code does not apply to a contract to sell where title remains with the vendor
until full payment of the price as in the case at bar.”

WHEREFORE, the petition is DENIED and the judgment of the Court of Appeals subject
thereof is AFFIRMED, with costs against petitioners.

SO ORDERED.

Cruz, Gancayco, and Medialdea, JJ., concur.

Griño-Aquino, J., on official leave.

^[1]
Presided over by Hon. Ricardo J. Francisco (now Associate Justice of the
Court of Appeals)

^[2]
On July 23, 1977 (Rollo, p. 31)

^[3]
Written for the Special First Division by Acting Presiding Justice Ramon G. Gaviola Jr., with whom concurred Justices Serafin R. Cuevas and Edgardo L. Paras

^[4]
Rollo p. 97.

^[5]
Citing:  Caridad
Estates v. Santero, 71 Phil., 114, 121; Albea v. Inquimboy, 86
Phil. 476 * *; Jocson v. Capitol Subdivision,
Inc., et al., L-6573, Feb. 28, 1955;
Miranda v. Caridad Estates, L-1077 and Aspuria v. Caridad
Estates, L-2121, Oct. 3, 1950

^[6]
Luzon Brokerage Co., Inc. v. Maritime Building Co., Inc., originally
decided on January 31, 1972, 43 SCRA
93; motion for reconsideration, denied
by Resolution of Aug. 18, 1972,
46 SCRA 381, and second motion for reconsideration, denied by Resolution of Nov. 16, 1978, 86 SCRA
305