Professional Documents
Culture Documents
(1)
Whether or not the Deed of Sale of Real Property between El Dorado and
Carrascoso is valid thus conveyance of property must be executed
(2)
Whether or not there was a breach of warranty of non-tenancy by El Dorado
(due to people and cattle in the area)
(3)
Whether or not the Agreement to Buy and Sell is a conditional contract of sale
RULING: (1) NO; (2) NONE; (3) NO
Contract of Sale
- A reciprocal obligation
- Seller obligates itself to transfer the ownership of an deliver a determinate thing,
and the buyer obligates itself to pay therefor a price certain in money or its
equivalent
- The non-payment of the price by the buyer is a resolutory condition which
extinguishes the transaction that for a time existed, and discharges the obligations
created thereunder
- Such failure to pay the price in the manner prescribed by the contract of sale
entitles the unpaid seller to sue for collection or to rescind the contract
(1)
El Dorado already performed its obligation through the execution of the March
23, 1972 Deed of Sale of Real Property which effectively transferred ownership of
the property to Carrascoso. The latter, on the other hand, failed to perform his
correlative obligation of paying in full the contract price in the manner and within
the period agreed upon
(2)
CA: A partially unpaid seller can agree to the buyers mortgaging the subject of the sale
without changing the time fixed for the payment of the balance of the price. The two
agreements are not incompatible with each other such that when one is to be implemented,
the other has to be suspended. In the case at bench, there was NO impediment for
Carrascoso to pay the balance of the price after mortgaging the land.
The breach of an express warranty in a contract of sale makes the seller liable
for damages
Requisites:
(a)The express warranty must be an affirmation of fact or any promise by the seller
relating to the subject matter of the sale;
(b)The natural tendency of such affirmation or promise is to induce the buyer to
purchase the thing;
(c) The buyer purchases the thing relying on such affirmation or promise thereon.
(3)
Apart from such bare claim, the records are bereft of any proof that those
persons were indeed tenants. The fact of tenancy not having been priorly
established, El Dorado may not be held liable for actual damages
In a contract OF SALE:
- The title passes to the vendee upon the delivery of the thing sold
- The vendor has lost and cannot recover ownership until and unless the contract is
resolved or rescinded
In a contract TO SELL:
- Ownership is not transferred upon delivery of the property but UPON FULL PAYMENT
of the purchase price
- Title is retained by the vendor until the full payment of the price, such payment
being a positive suspensive condition and failure of which is not a breach but an
event that prevents the obligation of the vendor to convey the title from becoming
effective
- Upon fulfilment of the suspensive condition, ownership will not automatically
transfer to the buyer although the property may have been previously delivered to
him
- The prospective seller still has to convey title to the prospective buyer by entering
into a contract of absolute sale
CONDITIONAL CONTRACT OF SALE
- If the suspensive condition is fulfilled, the contract of sale is thereby perfected, such
that if there had already been previous delivery of the property subject of the sale
to the buyer, ownership thereto automatically transfers to the buyer by operation of
law without any further act having to be performed by the seller
CA: How can the agreement to buy and sell which is a preparatory contract be the same
as a contract of sale which is a principal contract? If PLDTs contention is correct that it
bought the Farm on July 11, 1975 (Agreement to Buy and Sell), why did it buy the same
property again on April 6, 1977? It is admitted that PLDT took possession of the Farm on July
11, 1975 after the execution of the Agreement to Buy and Sell but it did so NOT as owner but
as PROSPECTIVE BUYER of the property
- PLDT cannot shield itself from the notice of lis pendens because all that it had at the
time of inscription was an Agreement to Buy and Sell with Carrascoso, which in
effect is a mere contract to sell that it did not pass to it the ownership of
the property
- Ownership was retained by Carrascoso which El Dorado may very well recover
through its action for rescission.
In the Agreement to Buy and Sell, PLDT still had to definitely inform Carrascoso
of its decision on whether or not to finalize the deed of absolute sale for the 1,000
ha portion of the property, such that in the Deed of Absolute Sale subsequently
executed, the parties declared that they are now decided to execute such deed,
indicating that the Agreement to Buy and Sell was, merely a PREPARATORY
CONTRACT in the nature of the contract to sell.
The parties even had to stipulate in the said Agreement to Buy and Sell that Carrascoso,
during the existence of the agreement, shall not sell, cede, assign, and/or transfer the parcel
of land, which provision this Court has held to be a typical characteristic of a contract to sell.
Being a contract to sell, what was vested by the Agreement to Buy and Sell to PLDT was
merely the beneficial title to 1,000 portion of the property