Spouses Godofredo & Dominica Flancia v. Court of Appeals & William Ong Genato

Summary

The Supreme Court resolved a property dispute involving competing claims over the same lot. Spouses Flancia had a contract to sell with Oakland Development Corp., while Oakland separately mortgaged the property to William Ong Genato. The Court distinguished between contracts of sale and contracts to sell, ruling that under a contract to sell, Oakland retained absolute ownership and could validly mortgage the property. The registered mortgage was superior to the unregistered contract to sell. However, Oakland was liable to refund the spouses' payments and pay damages for mortgaging property despite contractual commitments. This decision clarifies the legal distinction between sale and contract to sell, and establishes the priority of registered mortgages over unregistered contracts to sell in Philippine property law.