Buyers beware when purchasing homes, condos
In Manalese v. Ferreras (Nov. 25, 2024, per J. Alfredo Benjamin S. Caguioa, Third Division, 5-0), the Supreme Court stressed the hornbook doctrine that buyers must examine very well the property, item, or goods being sold; the relevant deeds of sale; and the original record of the titles of the property they are buying.
IN REITERATING THIS PRINCIPLE, the Court cautioned buyers of real estate like lots and condominiums not to be satisfied with the verbal or written assurances of sellers and their agents. They should insist on an examination of the face of, and the entries in, the owners’ “transfer certificate of title” (TCT). More importantly, they should examine, better still scrutinize by themselves or by their lawyers and/or trusted agents, the original certificate of title (OCT) at the Office of the Register of Deeds of the province or city where the real property is located.
Sometimes, on its face, a TCT may contain unusual entries. That should be enough for buyers to desist from dealing with the asset, unless they or better still their lawyers, are satisfied with the explanation of the unusual entries. At other times, though the TCT may look genuine and authentic, there could be liens on the property which are annotated on the OCT but are not on the TCT. And even if shown on the TCT, they could be coached in technical terms and/or printed in hardly readable fonts.
The Court, in the present case, noted certain indicia of irregularities or of fraud, like (1) the sellers were already dead long before the deed of sale was executed; and (2) there is a great disparity between the price paid by the seller in acquiring the property and the price it is being resold—in this case, the acquisition price was only P250,000, yet the reselling price was an extra high P3.3 million.
Moreover, the Court instructed the Integrated Bar of the Philippines to investigate the Register of Deeds of Angeles City (Atty. Bayani Maniquis) for possible violations of the Code of Professional Responsibility for his indispensable role as a lawyer in the issuance of the TCTs covering the contested sale.
THE COURT LAMENTED that though a statute (Republic Act No. 6732) prescribes a criminal penalty on those who use fraud or deceit in obtaining a reconstituted title and on any public officer or employee who knowingly approves or assists them in securing the decision for this, there is “apparently a dearth if not absence of prosecution” against the culprits. I believe this is a wake-up call for the Department of Justice which should start an honest-to-goodness investigation of the criminal minds and hands who perpetuate these shenanigans.
In yet another case (Kaw v. Nodalo, Nov. 27, 2024, per J. Henri Jean Paul B. Inting, Third Division, 5-0) promulgated two days after Manalese v. Ferreras, Justice Caguioa, a recognized civil law expert, rendered a concurring opinion that I believe sellers and buyers of real estate must be aware of.
He explained that sales—whether of personal or real property like lots and condos—are perfected at the moment there is (1) a meeting of the minds, that is, a consent to transfer ownership of (2) a determinate thing, (3) upon a price certain in money or its equivalent.
OWING TO THE CONSENSUAL NATURE OF CONTRACTS OF SALE, a stipulation that the buyer must first pay before the seller could be compelled to transfer the ownership of the thing, would not divest an agreement of its character as a contract of sale.
Nonetheless, jurisprudence starting in 1960 created the “contract to sell” (apart from a “contract of sale”) concept in which the title remains with the seller until the full payment of the purchase price.
In a contract of sale, the intent to reserve the ownership of the thing in the seller pending payment by the buyer must be evident. As a rule, the seller’s delivery (or to use a technical term, “tradition”) of the thing transfers ownership to the buyer. Moreover, the execution of a public or notarized document is equivalent to actual or physical delivery. However, the notarized deed may clearly or inferentially reserve ownership to the seller until full payment is received.
To repeat, buyers gain ownership at the moment the three cited elements are satisfied. Consequently, they may occupy, use, rent out, repair, mortgage, pledge, or otherwise deal with property as they desire. Moreover, they cannot be evicted from the property even if they may not have paid the full price. All that the seller gets is the right to collect the full payment but not the ownership of the thing.
Jurisprudence has ruled that a deed is a “contract to sell,” not a “contract of sale,” when (1) a separate deed of absolute sale is needed upon full payment of the price, (2) the seller is granted a unilateral right to cancel the contract, and (3) when the buyer shall be a mere lessee of the property until full payment of the price.
Finally, the mere denomination of an agreement as a “contract to sell” will not necessarily determine its true nature. What would determine its nature are its provisions, not its title. In like manner, a beauty title does not necessarily determine the inner character of the lady.
