In Lagrimas A. Boy v. Court of Appeals, the Supreme Court affirmed that a Deed of Absolute Sale transfers ownership and grants the buyer the right to possess the property. This means that once a property is sold through such a deed, the seller must vacate the premises upon the buyer’s demand. The ruling underscores the importance of honoring contractual agreements and protects the property rights of buyers who have legally purchased their property. Understanding this decision helps property owners assert their rights and provides a legal basis for eviction in cases of refusal to vacate.

From Loan to Land: Did a Sales Agreement Trump a Prior Debt Arrangement?

This case originated from a dispute over a property in Manila, initially collateral for a loan but later formalized into a Deed of Absolute Sale. Lagrimas A. Boy contested an ejectment action filed by Isagani P. Ramos and Erlinda Gasingan Ramos, who claimed ownership based on the said deed. Lagrimas argued that the sale was not fully consummated due to an unpaid balance, pointing to a subsequent agreement (Kasunduan) that purportedly modified the original sale terms. The central legal question was whether the Deed of Absolute Sale effectively transferred ownership and the right to possess the property to the Ramos spouses, or if the Kasunduan altered this agreement, allowing Lagrimas to retain possession.

The Metropolitan Trial Court (MeTC) initially ruled in favor of the Ramos spouses, focusing on the validity of the Deed of Absolute Sale, which was duly notarized and undisputed. The MeTC downplayed the Kasunduan, noting conflicting testimonies regarding its authenticity and binding effect. On appeal, the Regional Trial Court (RTC) reversed this decision, giving credence to the Kasunduan and suggesting that the matter involved a complex ownership dispute beyond the MeTC’s jurisdiction. However, the Court of Appeals (CA) sided with the Ramos spouses, reinstating the MeTC’s decision and underscoring the significance of the Deed of Absolute Sale in transferring property rights.

The Supreme Court affirmed the CA’s decision, reinforcing the principle that a Deed of Absolute Sale transfers ownership unless explicitly stated otherwise. The Court emphasized that in ejectment cases, the main issue is the right to physical possession, irrespective of ownership claims, although lower courts can provisionally resolve ownership questions to determine possession rights. The Court cited Section 16, Rule 70 of the Rules of Court, stating:

Sec.16. Resolving defense of ownership.- When the defendant raises the defense of ownership in his pleadings and the question of possession cannot be resolved without deciding the issue of ownership, the issue of ownership shall be resolved only to determine the issue of possession.

Building on this principle, the Supreme Court highlighted the finality of the CA’s factual findings regarding the Kasunduan. The Court found no basis to overturn the appellate court’s conclusion that the Kasunduan did not accurately reflect the parties’ intentions and was not a binding modification of the Deed of Absolute Sale. It has been established that petitioner sold the subject property to private respondents for the price of P31,000, as evidenced by the Deed of Absolute Sale, the due execution of which was not controverted by petitioner. The contract is absolute in nature, without any provision that title to the property is reserved in the vendor until full payment of the purchase price.

The Supreme Court also clarified the implications of the Deed of Absolute Sale under the Civil Code. The Court cited Article 1477, noting that “the ownership of the thing sold shall be transferred to the vendee upon the actual or constructive delivery thereof.” Article 1498 further states that when a sale is made through a public instrument, such as a Deed of Absolute Sale, the execution of the instrument is equivalent to delivery unless the deed specifies otherwise. Since the deed lacked stipulations against constructive delivery, ownership was effectively transferred to the Ramos spouses upon the deed’s execution. This transfer justified their right to material possession, superseding Lagrimas A. Boy’s continued occupation, which the courts deemed as mere tolerance subject to demand.

Consequently, the Supreme Court upheld the order for Lagrimas A. Boy to vacate the property and pay reasonable compensation for its use from the time the ejectment case was filed until she relinquishes possession. The decision reaffirms the enforceability of Deeds of Absolute Sale and reinforces the rights of property owners to regain possession from those who occupy it by tolerance after a valid sale. The ruling also emphasizes that verbal agreements cannot undermine documented legal contracts. The consistent rulings from the MeTC, CA, and ultimately the Supreme Court underscore the value of written documentation and the clear transfer of rights through absolute sale agreements.

FAQs

What was the key issue in this case?	The primary issue was whether a Deed of Absolute Sale effectively transferred ownership and the right to possess a property, even if a subsequent agreement (Kasunduan) suggested otherwise. The court had to determine which document held more weight in dictating property rights and possession.
What is a Deed of Absolute Sale?	A Deed of Absolute Sale is a legal document that transfers all rights and ownership of a property from the seller to the buyer. Once executed, the buyer has the right to possess the property unless otherwise stipulated in the deed.
What is the significance of the Kasunduan in this case?	The Kasunduan was an agreement presented by the petitioner to argue that the sale was not fully consummated due to an unpaid balance. However, the court deemed it unreliable and not binding, as it contradicted the terms of the Deed of Absolute Sale.
What does it mean to occupy a property by “tolerance”?	Occupying a property by tolerance means that the owner allows someone to stay without a formal agreement, lease, or rent. The occupant is expected to leave when the owner demands it, and failure to do so can lead to an ejectment case.
Can a lower court decide on ownership in an ejectment case?	Yes, lower courts can provisionally resolve questions of ownership in ejectment cases, but only to determine the issue of who has the right to possess the property. The final determination of ownership typically lies with higher courts.
What is the role of the Court of Appeals in this case?	The Court of Appeals reviewed the decision of the Regional Trial Court and sided with the private respondents, reinstating the Metropolitan Trial Court’s decision. It found that the Deed of Absolute Sale was valid and that the Kasunduan did not supersede it.
What happens if a seller refuses to vacate a property after a sale?	If a seller refuses to vacate a property after a valid sale, the buyer can file an ejectment case to regain possession. The court can order the seller to vacate the premises and pay reasonable compensation for its use during the period of unlawful occupation.
How does the Civil Code relate to this case?	The Civil Code outlines the legal principles regarding the transfer of ownership and possession through contracts like the Deed of Absolute Sale. Articles 1477 and 1498 specifically address how ownership is transferred upon the execution of such documents.

In summary, the Supreme Court’s decision in Lagrimas A. Boy v. Court of Appeals serves as a reminder of the legal weight carried by formal sales agreements. The case underscores the buyer’s right to possess a property after a Deed of Absolute Sale is executed, provided there are no explicit conditions to the contrary. Contractual obligations and property rights continue to be upheld.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: Lagrimas A. Boy v. Court of Appeals, G.R. No. 125088, April 14, 2004