Keppel Bank Philippines v. Philip Adao

Summary

Keppel Bank acquired properties from PMRDC through dacion en pago and sought to eject Philip Adao from Unit 4 of Luxor Villas Townhouse. Adao claimed possession rights under a 1995 contract to sell with PMRDC, asserting full payment through cash and marketing services. Lower courts ruled in favor of Adao, finding the bank bound by the contract to sell and lacking proper remedy through ejectment. The Supreme Court reversed, holding that while the bank was bound by the contract due to lack of good faith, Adao failed to prove full payment of the purchase price. In a contract to sell, ownership remains with the seller until full payment. Since Adao's possession was by tolerance and became unlawful upon demand, the Court ordered him to vacate. The decision clarifies the distinction between contracts of sale and contracts to sell, the burden of proving payment, and banks' duty of due diligence in property acquisitions.