Vive Eagle Land v. Court of Appeals

Summary

Vive Eagle Land, Inc. (VELI) sold property to Genuino Ice Co. but failed to transfer title and pay capital gains tax as demanded. The Supreme Court partially granted VELI's petition, ruling that while VELI must bear registration expenses and evict occupants under Civil Code Article 1487 (absent contrary stipulation), it was not liable for capital gains tax. The Court applied the 1977 NIRC provisions existing at the time of the 1988 sale, which exempted corporations from capital gains tax based on established BIR rulings. Only individuals were subject to capital gains tax under the then-applicable law. The decision clarifies vendor obligations in property sales and the non-retroactive application of tax laws, establishing that corporate sellers' gains are treated as ordinary income rather than capital gains under the 1977 tax regime.