Acknowledgment Receipt Not Proof of Sale Without Clear Transfer of Ownership
The Supreme Court of the Philippines ruled that an acknowledgment receipt alone does not prove a sale unless it clearly shows intent to transfer ownership.
This landmark decision came from the Court’s Third Division, penned by Associate Justice Maria Filomena D. Singh, and involved a dispute between Pedro’s family and Berto and Berta, a married couple who had agreed to purchase inherited properties from Pedro and his relatives.
What Happened in the Case
Pedro’s family agreed to sell two inherited properties to Berto and Berta for ₱31.5 million, with a ₱5 million downpayment and a contract to sell to be prepared.
However, the only document initially presented was an acknowledgment receipt for ₱200,000, labeled as “earnest money.” This receipt became the focal point of the legal argument.
Pedro’s family canceled the agreement, claiming the couple failed to complete the downpayment and that the draft contract excluded the ₱5 million and had major changes. As a result, the document remained unsigned.
The Legal Battle
In response, Berto and Berta filed a case before the Regional Trial Court (RTC), claiming they had already paid ₱1.5 million and insisting that the delay wasn’t their fault. They asked the court to enforce the sale.
But the RTC dismissed the complaint. The court ruled that what existed was not a contract of sale but a contract to sell—a crucial distinction in real estate law. Since the downpayment was incomplete, the couple couldn’t demand the transfer of ownership.
Interestingly, the Court of Appeals reversed this ruling. It interpreted the acknowledgment receipt as having all the elements of a contract of sale: property details, price, and agreement between parties. It also pointed out that the receipt did not specify that ownership would remain with Pedro’s family until full payment.
However, when the case reached the Supreme Court, the High Tribunal sided with the RTC and declared that the agreement was not a contract of sale but a contract to sell.
Why This Matters: Contract to Sell vs. Contract of Sale
According to the Supreme Court, a contract to sell does not immediately transfer ownership. Instead, the seller simply agrees to sell the property after specific conditions are met, such as full payment. If those conditions aren’t met, the seller has no obligation to finalize the sale, and ownership remains with them.
On the other hand, a contract of sale clearly expresses the seller’s intent to immediately transfer ownership to the buyer. In this case, the acknowledgment receipt lacked such language. It simply documented payment of “earnest money” and outlined steps that had yet to be completed—including the signing of official sale documents.
The High Court also clarified that using the term “earnest money” doesn’t automatically imply a contract of sale exists. Earnest money can also be part of a contract to sell and is more of a gesture of good faith—to assure the seller of the buyer’s serious intent to proceed, assuming conditions are met.
Concurring Opinion Highlights
In his concurring opinion, Associate Justice Alfredo Benjamin S. Caguioa added that even without an explicit clause stating that ownership stays with the seller, a contract to sell can still be presumed—if the transfer of title depends on full payment and a separate deed of sale.
He also referenced previous SC rulings that reinforce the legal difference between these two types of contracts.
Conclusion
Sa madaling salita, hindi porke’t may resibo ng bayad ay automatic na may bentahan nang naganap. Kung walang malinaw na intensyon na ilipat ang pagmamay-ari, hindi ito itinuturing na contract of sale.
Kaya sa mga bibili at magbebenta ng property, mahalagang malinaw ang dokumento at hindi lang basta resibo ang hawak mo. Kung gusto mong iwasan ang gulo sa huli, make sure lahat ng kondisyon ay malinaw at pirmahan ang tamang kontrata.
This case reminds real estate buyers and sellers that what truly matters is a clear, documented agreement—not just payment or a receipt.
Source: Supreme Court of the Philippines records, G.R. No. 242366 (Pedro et al. v. Spouses Berto and Berta, February 26, 2025)
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