SECOND DIVISION

[G.R. No. 120820. August 1, 2000]

SPS. FORTUNATO SANTOS and ROSALINDA R. SANTOS, petitioners, vs. COURT OF APP ALS, SPS. !ARIANO R. CAS DA and CAR! N CAS DA, respondents. D "UISU!#ING, J.$ For review on certiorari is the decision of the Court of Appeals, dated March 2 , !""#, in CA$ %&'& CV No& ()"##, which reversed and set aside the *ud+,ent of the 'e+ional -rial Court of Ma.ati, /ranch !((, in Civil Case No& "$01#"& 2etitioners 3the Santoses4 were the owners of a house and lot infor,all5 sold, with conditions, to herein private respondents 3the Casedas4& In the trial court, the Casedas had co,plained that the Santoses refused to deliver said house and lot despite repeated de,ands& -he trial court dis,issed the co,plaint for specific perfor,ance and da,a+es, 6ut in the Court of Appeals, the dis,issal was reversed, as follows7 89:E'EFO'E, in view of the fore+oin+, the decision appealed fro, is here65 'EVE'SED and SEASIDE and a new one entered7 8!& %'AN-IN% plaintiffs$appellants a period of NINE-; 3")4 DA;S fro, the date of the finalit5 of *ud+,ent within which to pa5 the 6alance of the o6li+ation in accordance with their a+ree,ent< 82& Orderin+ appellees to restore possession of the su6*ect house and lot to the appellants upon receipt of the full a,ount of the 6alance due on the purchase price< and 8(& No pronounce,ent as to costs& 8SO O'DE'ED&=>!? -he undisputed facts of this case are as follows7 -he spouses Fortunato and 'osalinda Santos owned the house and lot consistin+ of (#) s@uare ,eters located at Aot 1, /loc. , /etter Aivin+ Su6division, 2arana@ue, Metro Manila, as evidenced 65 -C- 3S$!!)2"4 2 ))# of the 'e+ister of Deeds of 2arana@ue& -he land to+ether with the house, was ,ort+a+ed with the 'ural /an. of Salinas, Inc&, to secure a loan of 2!#),)))&)) ,aturin+ on Bune !C, !" 1& So,eti,e in !" 0, 'osalinda Santos ,et Car,en Caseda, a fellow ,ar.et vendor of hers in 2asa5 Cit5 and soon 6eca,e ver5 +ood friends with her& -he duo even 6eca,e kumadres when Car,en stood as a weddin+ sponsor of 'osalindaDs nephew& On Bune !C, !" 0, the 6an. sent 'osalinda Santos a letter de,andin+ pa5,ent of 2!C,"!#& 0 in unpaid interest and other char+es& Since the Santos couple had no funds, 'osalinda offered to sell the house and lot to Car,en& After inspectin+ the real propert5, Car,en and her hus6and a+reed& CISION

So,eti,e that ,onth of Bune, Car,en and 'osalinda si+ned a docu,ent, which reads7 8'eceived the a,ount of 2#0,!))&)) as a partial pa5,ent of Mrs& Car,en Caseda to the 3total4 a,ount of (#),)))&)) 3house and lot4 that is own 3sic4 65 Mrs& 'osalinda '& Santos& 3Mrs&4 3S+d&4 Car,en Caseda direct 6u5er Mrs& Car,en Caseda 83S+d&4 'osalinda Del '& Santos Owner Mrs& 'osalinda '& Santos :ouse and Aot /etter Aivin+ Su6d& 2araEa@ue, Metro Manila Section V Don /osco St&F>2? -he other ter,s and conditions that the parties a+reed upon were for the Caseda spouses to pa57 3!4 the 6alance of the ,ort+a+e loan with the 'ural 6an. a,ountin+ to 2!(#,( #&! < 324 the real estate taGes< 3(4 the electric and water 6ills< and 304 the 6alance of the cash price to 6e paid not later than Bune !C, !" 1, which was the ,aturit5 date of the loan& >(? -he Casedas +ave an initial pa5,ent of 2#0,!))&)) and i,,ediatel5 too. possession of the propert5, which the5 then leased out& -he5 also paid in install,ents, 2 !,C"C& 0 of the ,ort+a+e loan& -he Casedas, however, in !" 1& Notwithstandin+ the state of their finances, Car,en nonetheless paid in March !""), the real estate taGes on the propert5 for !" !$!" 0& She also settled the electric 6ills fro, Dece,6er !2, !" to Bul5 !2, !" "& All these pa5,ents were ,ade in the na,e of 'osalinda Santos& In Banuar5 !" ", the Santoses, seein+ that the Casedas lac.ed the ,eans to pa5 the re,ainin+ install,ents andHor a,ortiIation of the loan, repossessed the propert5& -he Santoses then collected the rentals fro, the tenants& In Fe6ruar5 !" ", Car,en Caseda sold her fishpond in /atan+as& She then approached petitioners and offered to pa5 the 6alance of the purchase price for the house and lot& -he parties, however, could not a+ree, and the deal could not push throu+h 6ecause the Santoses wanted a hi+her price& For understanda6l5, the real estate 6oo, in Metro Manila at this ti,e, had considera6l5 *ac.ed up realt5 values& On Au+ust !!, !" ", the Casedas filed Civil Case No& "$01#", with the '-C of Ma.ati, to have the Santoses eGecute the final deed of conve5ance over the propert5, or in default thereof, to rei,6urse the a,ount of 2! ),)))&)) paid in cash and 220","))&)) paid to the rural 6an., plus interest< as well as rentals for ei+ht ,onths a,ountin+ to 2(2,)))&)), plus da,a+es and costs of suit& After trial on the ,erits, the lower court disposed of the case as follows7 89:E'EFO'E, *ud+,ent is here65 ordered7 3a4 dis,issin+ plaintiffDs 3CasedasD4 co,plaint< and 364 declarin+ the a+ree,ent ,ar.ed as AnneG FCF of the co,plaint rescinded& Costs a+ainst plaintiffs&

8SO O'DE'ED&=>0? Said *ud+,ent of dis,issal is ,ainl5 6ased on the trial courtDs findin+ that7 8Ad,ittedl5, the purchase price of the house and lot was 20 #,( #&! , i&e& 2(#),)))&)) as cash pa5,ent and 2!(#,( #&! , assu,ption of ,ort+a+e& Of it plaintiffs >Casedas? paid the followin+7 3!4 2#0,!))&)) down pa5,ent< and 324 2 !,C"0&C0 install,ent pa5,ents to the 6an. on the loan 3EGhs& E to E$!"4 or a total of 2!(#,1"0&C0& -hus, plaintiffs were short of the purchase price& -he5 cannot, therefore, de,and specific perfor,ance&= >#? -he trial court further held that the Casedas were not entitled to rei,6urse,ent of pa5,ents alread5 ,ade, reasonin+ that7 8As, earlier ,entioned, plaintiffs ,ade a total pa5,ent of 2!(#,1"0&C0 out of the purchase price of 20 #,( #&! & -he propert5 was in plaintiffsD possession fro, Bune !" 0 to Banuar5 !" " or a period of fift5$five ,onths& Durin+ that ti,e, plaintiffs leased the propert5& Car,en said the propert5 was rented for 22#&)) a da5 or 21#)&)) a ,onth at the start and in !" 1 it was increased to 22,)))&)) and 20,)))&)) a ,onth& /ut the evidence is not precise when the different a,ounts of rental too. place& /e that as it ,a5, fairness de,ands that plaintiffs ,ust pa5 defendants for their eGercise of do,inical ri+hts over the propert5 65 rentin+ it to others& -he a,ount of 22,)))&)) a ,onth would 6e reasona6le 6ased on the avera+e of 21#)&)), 22,)))&)), 20,)))&)) lease$rentals char+ed& Multipl5 22,)))&)) 65 ## ,onths, the plaintiffs ,ust pa5 defendants 2!!),)))&)) for the use of the propert5& Deductin+ this a,ount fro, the 2!(#,1"0&C0 pa5,ent of the plaintiffs on the propert5, the difference is 22#,1"0&C0& Should the plaintiffs 6e entitled to a rei,6urse,ent of this a,ountJ -he answer is in the ne+ative& /ecause of failure of plaintiffs to li@uidated the ,ort+a+e loan on ti,e, it had 6allooned fro, its ori+inal fi+ure of 2!(#,( 0&! as of Bune !" 0 to 2((1,2 )&1 as of Dece,6er (!, !" & Defendants >Santoses? had to pa5 the last a,ount to the 6an. to save the propert5 fro, foreclosure& Ao+icall5, plaintiffs ,ust share in the 6urden arisin+ fro, their failure to li@uidate the loan per their contractual co,,it,ent& :ence, the a,ount of 22#,1"0&C0 as their share in the defendantsD da,a+es in the for, of increased loan$a,ount, is reasona6le&= >C? On appeal, the appellate court, as earlier noted, reversed the lower court& -he appellate court held that rescission was not *ustified under the circu,stances and allowed the Caseda spouses a period of ninet5 da5s within which to pa5 the 6alance of the a+reed purchase price& :ence, this instant petition for review on certiorari filed 65 the Santoses& 2etitioners now su6,it the followin+ issues for our consideration7 9:E-:E' O' NO- -:E COK'- OF A22EAAS :AS BK'ISDIC-ION -O DECIDE 2'IVA-E 'ES2ONDEN-DS A22EAA IN-E'2OSIN% 2K'EA; LKES-IONS OF AA9& 9:E-:E' -:E SK/BEC- -'ANSAC-ION IS NO- A CON-'AC- OF A/SOAK-E SAAE /K- A ME'E O'AA CON-'AC- -O SEAA IN 9:IC: CASE BKDICIAA DEMAND FO' 'ESCISSION 3A'-& !#"2,>1? CIVIA CODE4 IS NO- A22AICA/AE& ASSKMIN% ARGUENDO -:A- A BKDICIAA DEMAND FO' 'ESCISSION IS 'ELKI'ED, 9:E-:E' 2E-I-IONE'SD DEMAND AND 2'A;E' FO' 'ESCISSION CON-AINED IN -:EI' ANS9E' FIAED /EFO'E -:E -'IAA SA-ISFIED -:E SAID 'ELKI'EMEN-& 9:E-:E' O' NO- -:E NON$2A;MEN- OF MO'E -:AN :AAF OF -:E EN-I'E 2K'C:ASE 2'ICE INCAKDIN% -:E NON$COM2AIANCE 9I-: -:E S-I2KAA-ION -O AILKIDA-E -:E

MO'-%A%E AOAN ON -IME 9:IC: CAKSED %'AVE DAMA%E AND 2'EBKDICE -O 2E-I-IONE'S, CONS-I-K-E SK/S-AN-IAA /'EAC: -O BKS-IF; 'ESCISSION OF A CON-'AC- -O SEAA KNDE' A'-ICAE !!"! > ? 3CIVIA CODE4& On the first issue, petitioners ar+ue that, since 6oth the parties and the appellate court adopted the findin+s of trial court, >"? no @uestions of fact were raised 6efore the Court of Appeals& Accordin+ to petitioners, CA$%&'& CV No& ()"##, involved onl5 pure @uestions of law& -he5 aver that the court a quo had no *urisdiction to hear, ,uch less decide, CA$%&'& CV No& ()"##, without runnin+ afoul of Supre,e Court Circular No& 2$") 304 >c?&>!)? -here is a @uestion of law in a +iven case when the dou6t or difference arises as to what the law is on a certain set of facts, and there is a @uestion of fact when the dou6t or difference arises as to the truth or falsehood of the alle+ed facts& >!!? /ut we note that the first assi+n,ent of error su6,itted 65 respondents for consideration 65 the appellate court dealt with the trial courtDs findin+ that herein petitioners +ot 6ac. the propert5 in @uestion 6ecause respondents did not have the ,eans to pa5 the install,ents andHor a,ortiIation of the loan& >!2? -he resolution of this @uestion involved an evaluation of proof, and not onl5 a consideration of the applica6le statutor5 and case laws& Clearl5, CA$%&'& CV No& ()"## did not involve pure @uestions of law, hence the Court of Appeals had *urisdiction and there was no violation of our Circular No& 2$")& Moreover, we find that petitioners too. an active part in the proceedin+s 6efore the Court of Appeals, 5et the5 did not raise there the issue of *urisdiction& -he5 should have raised this issue at the earliest opportunit5 6efore the Court of Appeals& A part5 ta.in+ part in the proceedin+s 6efore the appellate court and su6,ittin+ his case for as decision ou+ht not to later on attac. the courtDs decision for want of *urisdiction 6ecause the decision turns out to 6e adverse to hi,& >!(? -he second and third issues deal with the @uestion7 Did the Court of Appeals err in holdin+ that a *udicial rescission of the a+ree,ent was necessar5J In resolvin+ 6oth issues, we ,ust first ,a.e a preli,inar5 deter,ination of the nature of the contract in @uestion7 9as it a contract of sale, as insisted 65 respondents or a ,ere contract to sell, as contended 65 petitionersJ 2etitioners ar+ue that the transaction 6etween the, and respondents was a ,ere contract to sell, and not a contract of sale, since the sole docu,entar5 evidence 3EGh& D, receipt4 referrin+ to their a+ree,ent clearl5 showed that the5 did not transfer ownership of the propert5 in @uestion si,ultaneous with its deliver5 and hence re,ained its owners, pendin+ fulfill,ent of the other suspensive conditions, i&e&, full pa5,ent of the 6alance of the purchase price and the loan a,ortiIations& 2etitioners point to Manuel v. Rodriguez !"# 2hil& ! 3!"C)4 and $uzon %rokerage &o. 'nc. v. Maritime %uilding &o. 'nc. () SC'A "( 3!"124, where we held that Article !#"2 of the Civil Code is inapplica6le to a contract to sell& -he5 char+e the court a @uo with reversi6le error in holdin+ that petitioners should have *udiciall5 rescinded the a+ree,ent with respondents when the latter failed to pa5 the a,ortiIations on the 6an. loan& 'espondents insist that there was a perfected contract of sale, since upon their partial pa5,ent of the purchase price, the5 i,,ediatel5 too. possession of the propert5 as vendees, and su6se@uentl5 leased it, thus eGercisin+ all the ri+hts of ownership over the propert5& -his showed that transfer of ownership was si,ultaneous with the deliver5 of the realt5 sold, accordin+ to respondents& It ,ust 6e e,phasiIed fro, the outset that a contract is what the law defines it to 6e, ta.in+ into consideration its essential ele,ents, and not what the contractin+ parties call it& >!0? Article !0# >!#? of the Civil Code defines a contract of sale& Note that the said article eGpressl5 o6li+es the vendor to transfer ownership of the thin+ sold as an essential ele,ent of a contract of sale& -his is 6ecause the transfer of ownership in eGchan+e for a price paid or pro,ised is the ver5 essence of a contract of sale&>!C? 9e have carefull5 eGa,ined the contents of the unofficial receipt, EGh& D, with the ter,s and conditions infor,all5 a+reed upon 65 the parties, as well as the proofs su6,itted to support their

respective contentions& 9e are far fro, persuaded that there was a transfer of ownership si,ultaneousl5 with the deliver5 of the propert5 purportedl5 sold& -he records clearl5 show that, notwithstandin+ the fact that the Casedas first too. then lost possession of the disputed house and lot, the title to the propert5, -C- No& 2 ))# 3S$!!)2"4 issued 65 the 'e+ister of Deeds of 2araEa@ue, has re,ained alwa5s in the na,e of 'osalinda Santos& >!1? Note further that althou+h the parties had a+reed that the Casedas would assu,e the ,ort+a+e, all a,ortiIation pa5,ents ,ade 65 Car,en Caseda to the 6an. were in the na,e of 'osalinda Santos& >! ? 9e li.ewise find that the 6an.Ds cancellation and dischar+e of ,ort+a+e dated Banuar5 2), !""), was ,ade in favor of 'osalinda Santos&>!"? -he fore+oin+ circu,stances cate+oricall5 and clearl5 show that no valid transfer of ownership was ,ade 65 the Santoses to the Casedas& A6sent this essential ele,ent, their a+ree,ent cannot 6e dee,ed a contract of sale& 9e a+ree with petitionersD aver,ent that the a+ree,ent 6etween 'osalinda Santos and Car,en Caseda is a contract to sell& In contracts to sell, ownership is reserved 65 the vendor and is not to pass until full pa5,ent of the purchase price& -his we find full5 applica6le and understanda6le in this case, +iven that the propert5 involved is a titled realt5 under ,ort+a+e to a 6an. and would re@uire notarial and other for,alities of law 6efore transfer thereof could 6e validl5 effected& In view of our findin+ in the present case that the a+ree,ent 6etween the parties is a contract to sell, it follows that the appellate court erred when it decreed that a *udicial rescission of said a+ree,ent was necessar5& -his is 6ecause there was no rescission to spea. of in the first place& As we earlier pointed out, in a contract to sell, title re,ains with the vendor and does not pass on to the vendee until the purchase price is paid in full& -hus, in a contract to sell, the pa5,ent of the purchase price is a positive suspensive condition& Failure to pa5 the price a+reed upon is not a ,ere 6reach, casual or serious, 6ut a situation that prevents the o6li+ation of the vendor to conve5 title fro, ac@uirin+ an o6li+ator5 force&>2)? -his is entirel5 different fro, the situation in a contract of sale, where non$pa5,ent of the price is a ne+ative resolutor5 condition& -he effects in law are not identical& In a contract of sale, the vendor has lost ownership of the thin+ sold and cannot recover it, unless the contract of sale is rescinded and set aside& >2!? In a contract to sell, however, the vendor re,ains the owner for as lon+ as the vendee has not co,plied full5 with the condition of pa5in+ the purchase price& If the vendor should e*ect the vendee for failure to ,eet the condition precedent, he is enforcin+ the contract and not rescindin+ it& 9hen the petitioners in the instant case repossessed the disputed house and lot for failure of private respondents to pa5 the purchase price in full, the5 were ,erel5 enforcin+ the contract and not rescindin+ it& As petitioners correctl5 point out, the Court of Appeals erred when it ruled that petitioners should have *udiciall5 rescinded the contract pursuant to Articles !#"2 and !!"! of the Civil Code& Article !#"2 spea.s of non$pa5,ent of the purchase price as a resolutor5 condition& It does not appl5 to a contract to sell& >22? As to Article !!"!, it is su6ordinated to the provisions of Article !#"2 when applied to sales of i,,ova6le propert5& >2(? Neither provision is applica6le in the present case& As to the last issue, we need not tarr5 to ,a.e a deter,ination of whether the 6reach of contract 65 private respondents is so su6stantial as to defeat the purpose of the parties in enterin+ into the a+ree,ent and thus entitle petitioners to rescission& :avin+ ruled that there is no rescission to spea. of in this case, the @uestion is ,oot& %& R FOR , the instant petition is %'AN-ED and the assailed decision of the Court of Appeals in CA$%&'& CV No& ()"## is 'EVE'SED and SE- ASIDE& -he *ud+,ent of the 'e+ional -rial Court of Ma.ati, /ranch !((, with respect to the DISMISSAA of the co,plaint in Civil Case No& "$01#", is here65 'EINS-A-ED& No pronounce,ent as to costs& SO ORD R D. Mendoza %uena and De $eon *r. **. concur& %ellosillo *. +&hairman, on official leave&