CONTRACT OF SALE v. CONTRACT TO SELL

In a CONTRACT OF SALE, the non-payment of price is a resolutory condition, i.e., the contract of sale may by such occurrence put an end to a transaction that once upon a time existed. In a CONTRACT TO SELL, the payment in full of the price is a positive suspensive condition. Hence, if the price is not paid, it is as if the obligation of the seller to deliver and to transfer ownership never became effective and binding.

In a CONTRACT OF SALE, title over the property generally passes to the buyer upon delivery. In the a CONTRACT TO SELL, ownership is retained by the seller, regardless of delivery and is not to pass until full payment of the price.

In a CONTRACT OF SALE, after delivery, the seller loses ownership and cannot recover it unless the contract is resolved or rescinded. In a CONTRACT TO SELL, since the seller retains ownership despite delivery, ousting the buyer for failure to pay is an act of enforcing the contract, not rescinding it. (Manuel v. Rodriguez, L-13435, Jul. 27, 1960)

Article 1504 of the Old Code (Art 1592, N.C.C.) requiring demand by suit or by notarial act in case the vendor of realty wants to rescind, does not apply to a contract to sell where title remains with the vendor until full payment of the price (Caridad Estates v. Santero, 71 Phil., 120-121; Aldea v. Inquimboy, 86 Phil., 1601, 47 Off. Gaz. Supp. 12 p. 131; Jocson v. Capitol Subdivision Inc., Et. Al. L-6573, February 28, 1955; Miranda v. Caridad Estates, L-2077 and Aspuria v. Caridad Estates, L-2121, October 3, 1950)

In contracts to sell, where ownership is retained by the seller and is not to pass until the full payment of the price, the failure to make such payment is not a breach, casual or serious, but simply an event that prevented the obligation of the vendor to convey title from acquiring binding force. (G.R. No. L-13435, July 27, 1960)