De Leon vs Ong

 GR No. 170405 February 2, 2010

Facts:

De Leon sold 3 parcels of land to Ong. The properties were mortgaged to Real Savings and Loan Association. The parties executed a notarized deed of absolute sale with assumption of mortgage. The deed of Assumption of mortgage shall be executed in favor of Ong after the payment of 415K. Ong complied with it. De Leon handed the keys of to Ong and informed the loan company that the mortgage has been assumed by Ong. Ong made some improvements in the property. After sometime, Ong learned that the properties were sold to Viloria and changed the locks to it. Ong went to the mortgage company and learned that the mortgage was already paid and the titles were given to Viloria. Ong filed a complaint for the nullity of second sale and damages. De Leon contended that Ong does not have a cause of action against him because the sale was subject to a condition which requires the approval of the loan company and that he and Ong only entered a contract to sell.

Issue:

Whether or not the parties entered into a contract of sale

Ruling:

Yes, the parties entered into a contract of sale. In a contract of sale, the seller conveys ownership of the property to the buyer upon the perfection of the contract. The non-payment of the price is a negative resolutory condition. Contract to sell is subject to a positive suspensive condition. The buyer does not acquire ownership of the property until he fully pays the purchase price. In the present case, the deed executed by the parties did not show that the owner intends to reserve ownership of the properties. The terms and conditions affected only the manner of  payment and not the immediate transfer of ownership. It was clear that the owner intended a sale because he unqualifiedly delivered and transferred ownership of the properties to the respondent