De Leon vs. Ong Case Digest (Sales)

#5 RAYMUNDO S. DE LEON, Petitioner, vs. BENITA T. ONG.1 Respondent.
G.R. No. 170405 / February 2, 2010
FACTS:
- Petitioner DE LEON sell, transfer and convey in a manner absolute and irrevocable, unto
said respondent ONG a certain real estate together with the buildings and other improvements
existing thereon, situated in Mayamot, Antipolo, Rizal for P1.1 Million under the following
terms and conditions:
1. That upon full payment of [respondent] ONG of the amount of ₱415,000, petitioner
shall execute and sign a deed of assumption of mortgage in favor of respondent without
any further cost whatsoever;
2. That respondent Ong shall assume payment of the outstanding loan of ₱684,500 with
real savings and loan.
- Respondent gave petitioner ₱415,500 as partial payment. Petitioner then handed the keys to
the properties and wrote a letter informing RSLAI of the sale and authorizing it to accept
payment from respondent and release the certificates of title. Respondent Ong undertook
repairs and made improvements on the properties and informed RSLAI for her to assume
petitioner’s outstanding loan.
- Subsequently, Ong learned that petitioner De Leon again sold the same properties to one
Leona Viloria after March 10, 1993 and changed the locks.
- On June 18, 1993, Ong filed a complaint for specific performance, declaration of nullity of
the second sale and damages against De Leon and Viloria in the Regional Trial Court (RTC) of
Antipolo, Rizal, Branch 74. She claimed that since petitioner had previously sold the properties
to her he no longer had the right to sell the same to Viloria, fraudulently depriving her of the
properties.
- De Leon, on the other hand, insisted that respondent did not have a cause of action
against him claiming that since the transaction was subject to a condition (i.e., that RSLAI
approve the assumption of mortgage), they only entered into a contract to sell.
- RTC dismissed the complaint and sided with De Leon. The contention is that although
respondent Ong did apply for a loan from RSLAI it was not approved, thus the condition
did not arise. RTC held that the sale was not perfected and De Leon could freely dispose of
the properties.
- Ong appealed to the Court of Appeals .

- Respondent asserts that petitioner already conveyed full ownership of the subject properties
upon the execution of the deed. Consequently, because petitioner no longer owned the
properties when he sold them to Viloria, it declared the second sale null and void.
- De Leon insists that he entered into a contract to sell subject to a suspensive condition,
that is, the approval by RSLAI of respondent’s assumption of mortgage. Because RSLAI did not
allow the condition never materialized. Consequently, there was no sale.
Issue: Whether or not the parties entered into a contract of sale or a contract to sell.
(CONTRACT OF SALE)
Ruling:
- The Resolution of the CA is affirmed with modifications.
- The deed executed by the parties stated that petitioner sold the properties to respondent "in a
manner absolute and irrevocable" for a sum of ₱1.1 million.
- Nothing in said instrument implied that petitioner De Leon reserved ownership of the
properties until the full payment of the purchase price. The terms and conditions of the
deed only affected the manner of payment, not the immediate transfer of ownership.
- Article 1498 of the Civil Code provides that, as a rule, the execution of a notarized deed of
sale is equivalent to the delivery of a thing sold which the petitioner did. Petitioner also turn
over the keys of the property to the respondent and authorize the RSLAI to receive payment from
Ong and release the certificate of title to her. Clearly, it was a contract of sale the parties entered
into.
- However, the second sale to Viloria was not void for the sole reason that petitioner had
previously sold the same properties to respondent. This case involves a double sale as the
disputed properties were sold validly on two separate occasions by the same seller to the
two different buyers in good faith.
- Ong and Viloria are both found to be purchasers of good faith. However, Article 1544 of
the Civil Code provides that when neither buyer registered the sale of the properties with the
registrar of deeds, the one who took prior possession of the properties shall be the lawful owner
thereof.
- Nonetheless, respondent’s obligation to pay still persists. Otherwise, she would be unjustly
enriched at the expense of petitioner. Ong must still pay petitioner ₱684,500, the amount
stated in the deed. Petitioner, on the other hand, must deliver the certificates of title to
respondent.

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#5 RAYMUNDO S. DE LEON, Petitioner, vs. BENITA T. ONG.1 Respondent.

G.R. No. 170405 / February 2, 2010

- Ong appealed to the Court of Appeals .

- The Resolution of the CA is affirmed with modifications.

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