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RTC Ruling
Ruling
Furthermore, the cancellation of the contracts to sell by o Defendant refused to pay the sum of 200,000
Petitioner accord with the contractual covenants of the within the stipulated period
parties, thus the cancellation must be respected.
o The mortgage on the property in Bulacan was not
o In a contract to sell, the non-payment of the registered
purchase price can prevent the obligation to
o The realty tax for the lots mortgaged were not
convey title from acquiring any obligatory force.
paid by defendant.
While the court concludes that Petitioner acted within its
While defendant admits that she has not paid the realty
legal right to declare the contracts to sell rescinded, the
taxes and has not registered the mortgage on the property,
peculiar circumstances found in this case and confirmed by
defendant argues that the said matters were only minor
the C.A, it would be unconscionable to sanction the
ones which was explained by her in the first case invoking
forfeiture by petitioner of payments made to it by private
the rule of res judicata.
respondent.
o In addition to this, defendant does not dispute
Lastly, the relationship between parties in any contract
that she did not pay the sum of 200,000.
must always be characterized and punctuated by good
However, she contends that the roads have not
faith and fair dealing. In this case, petitioners fell from the
yet been completed in accordance with the
said standard of good faith and fair dealing. As it was not
ordinance of Quezon City which states that there
equitable for petitioners to adjudge any interest payment
should be water facilities and tree plantings in the
on the amount to be refunded.
subdivision which according to defendant are not
yet in the roads, thus, the roads are not yet
completed.
Issue
Ruling
The Court ruled that the deed of sale with mortgage makes
it the express duty of the defendant to pay the realty taxes
on the mortgaged lots, to register the mortgaged lots and
to contribute 50,000 for the construction of the roads. In its
express terms, the appellee failed to fulfill the conditions of
Leaño v. Court of Appeals
her entire obligation which means that the mortgagee has
G.R. 129018 | Nov. 15, 2001 | Oblicon | Case 7 | Delay
the option to foreclose the mortgage. The terms of the
Facts
contract have the force of law between the parties.
Nov. 13, 1985 – Hermogenes Fernando, as vendor, and
The court ruled that the opinions of the Supreme Court Petitioner Leaño, as vendee executed a contract to sell
cannot be taken as license for continued non-fulfillment of involving a piece of land in Bulacan.
defendant of her contractual obligations. The court did not
intend to allow or enable the litigants to use the first o In the said contract, Petitioner bound herself to
decision as an instrument to avoid the obligations of the pay Fernando the sum of 107,750.00 pesos as the
parties. total purchase price of the lot. According to the
contract, the sum of 10,775 shall be paid at the
Lastly, the court states that the filing of the case is signing of the contract as down payment. The
sufficient notice to defendant f the completion of the roads remaining balance shall be paid within a period of
in question and of the appellant’s desire to be paid the 10 years at a monthly amortization of 1,747.30
purchase price of the questioned lots. starting from Dec. 7, 1985.
o The effect of the demand retroacts to the day of IN addition to this, the contract provided for a grace period
the constitution of defendant’s obligation. It is of one month within which to make payments, together
provided in Art 1187 that the effects of a with the one corresponding to the month of grace.
conditional obligation to give, once the condition o Should the grace period expire without
has been fulfilled shall retroact to the day of the installments for both months having been
constitution of the obligation. satisfied an interest of 18% per annum shall be
charged on the unpaid installments.
In this instant case, the contracted
obligation of appellee was to pay the o Additionally, should a period of 90 days elapse
balance of 200,000 within two years from the expiration of the grace period without
from the date of the roads in question the overdue and unpaid installments been paid.
are completed. Respondent Fernando, as vendor is authorized to
declare the contract cancelled and to dispose the
parcel of land as if the contract had not been
entered to, the payments shall be considered as
rents for the use and occupation of the premises.
After the execution of the contract, Petitioner made
payments in lump sum. She then built a house on the lot
valued 800,000. The last payment according to the facts of
the case was on April 1, 1989.
o Due to her non-payment of the subsequent
payments, Respondent filed a case for ejectment
against Petitioner to vacate the premises.
MTC Ruling (Ejectment Case by Respondent)
The trial court ordered Petitioner to vacate the premises for which the corresponding penalty shall be imposed in
and to pay 250.00 per month by way of compensation for case of default, the vendee cannot ignore the provision on
the use and occupation of the property from May 27, 1991 the payment of monthly installments by stating that the 10
until she vacates the premises of the property. A writ of year period has not elapsed.
execution was issued on August 24, 1993 which was served
In reciprocal obligations, neither party incurs in delay if the
to Petitioner.
other does not comply or is not ready to comply in a proper
o IN response to this, Petitioner filed a specific manner with what is incumbent upon him, but from the
performance complaint against Respondent on moment one of the parties fulfills his obligation, delay by
Sept. 27, 1993 and to assail the decision of the the other begins (Art 1169)
court as the order was violative to the intentions
o In this case, Respondent performed his part of
of R.A 6552 which afford buyers of lots on
the obligation by allowing Petitioner to continue
installments protection.
in possession and use of the property. Petitioner
RTC Ruling (Specific Performance Case by Petitioner) did not pay the monthly amortizations in
accordance with their contract, thus she was in
The preliminary injunction issued by the RTC is made
delay and liable for damages.
permanent. Furthermore, the plaintiff is ordered to pay the
defendant the sum of 103,090.70 corresponding to her Lastly, it is a cardinal rule in the interpretation of contracts
outstanding obligations under the contract to sell with that if the terms are clear and leave no doubt upon the
defendant and to pay attorney’s fees and the costs of the intention of the contracting parties, the literal meaning of
suit. its stipulations shall control. If there is no ambiguity in the
language, there is no room for construction only
o A motion for reconsideration was filed by
compliance.
Respondent. However, the court increased the
amount to be paid by Petitioner to 183,687 and
ordered petitioner to pay attorney’s fees.
o The trial court reasoned out that the transaction
between the parties was an absolute sale,
making petitioner the owner of the lot upon
actual and constructive delivery thereof.
Respondent was divested of his ownership and
cannot recover unless the contract is rescinded in
pursuance to Art. 1592 of the Civil Code which
requires a judicial or notarial demand.
o For the issue of delay, the trial court ruled that
the contract clearly specifies that the purchase
price shall be payable in monthly installments Lee v. De Guzman
for which the corresponding penalty shall be G.R 90926 | Jul 6, 1990 | Oblicon | Case 8 | Delay
imposed in case of default. Plaintiff’s failure to
pay the amortization is a clear default on Facts
Plaintiff’s part therefore she should be liable Nov. 8, 1983 – Freelance salesman of Respondent
for interests and penalties. Motorcars Inc named Arsemio Tumibay signed in half of
Court of Appeals ruling the branch manager of Respondent Company a price
quotation and delivered to Petitioner one Toyota Corolla,
The Court of Appeals affirmed the decision of the RTC. 1983 with the price of 149,7000 plus miscellaneous
Issue expenses of 10,033.
Whether the transaction between the parties is an absolute o Petitioner then signed the sales order of the
sale or a conditional sale vehicle. Delivery was then scheduled to be within
the Nov. 1983.
Whether or not there was a proper cancellation of the
contract to sell Nov. 10, 1983 – Petitioner made a deposit of 1,000 which
was required in the agreed price quotation. After
Whether petitioner was in delay in the payment of the depositing the said amount, petitioner then wrote that
amortizations. Motorcars had acknowledgment receipt of the delivery
Ruling receipt for petitioner.
The Court denies the Petition and affirms the decision of Dec 15, 1983 – Petitioner’s counsel wrote to the Executive
the Court of Appeals Vice-president of Motorcars demanding for the delivery of
the said Toyota Car. Respondent Company replied that due
The Court ruled that even if the contract provided that the
to the sudden change of prices by the manufacturer of the
total purchase price is payable within a ten-year period,
specifying the price shall be paid in monthly installments
car, they decided to exercise the option in the vehicles Ruling
order which states:
Respondent is ordered to give petitioner the sum of
o Whenever deposits are made by customers for 100,000 as damages.
vehicles, parts and services ordered, the sales for
The Court agrees with the contention that Respondent
such vehicles, parts or services shall be at the
could not comply with the writ of execution as Delta
option of Motorcars Inc. refund o the deposits
Motors who manufactured the 19883 models of the
shall be made upon request and without undue
Liftback had already closed shop. However, there is no
delay should the option be exercised.
question that there was a perfected contract between
Due to the said stipulation in the said order, Respondent Petitioner and Respondent.
Company offered to refund the deposit of 1,000 made by
o The relief that Petitioner left can do is provided
Petitioner. However, it was revealed that the sales order
under Art. 1170 of the Civil Code where those who
contains:
in the performance of their obligations are guilty
o Order is not valid unless signed and accepted by of fraud, negligence or delay, and those who in
the dealer principal, President, Executive Vice any manner contravene the tenor thereof, are
President or General Sales Manager of the liable for damages.
dealership.
In this case, there was delay in the delivery of the subject
RTC Ruling vehicle which was stated in the letter of Respondent
Company addressed to Petitioner by stating the sudden
The Trial Court rendered a judgment in favor of
change of prices by the car manufacturer as what was
Respondent by ordering Petitioner to pay 5,000 as
agreed upon by the parties is the delivery of the subject
damages and attorney’s fees.
vehicle within November 1983.
Court of Appeals Ruling
The Court of Appeals reversed the decision of the RTC
stating that there was a perfected contract of sale, and that
there was the undisputed signature of Mr. Tapas, the
branch manager of Motorcars.
o Respondent was ordered to deliver to Petitioner
the vehicle upon payment of 149,7000 and the
amount of 8,833 for miscellaneous expenses and
other charges. Respondent then appealed to the
Supreme Court in another case.
G.R 77992 (Related Case; Case filed by Respondent)
The Court in the said case ruled that there was indeed a
contract of sale between the parties. Thus, it denied the
petition and affirmed the decision of the Court of Appeals,
furthermore, after the case was remanded, Petitioner filed
a motion for writ of execution.
However, Respondent company filed a motion to quash
the said writ of execution stating that the obligation has
become impossible to comply on the ground that Delta
Motors had closed shop.
o Petitioner opposed the motion of Respondent,
but Respondent continued to defy the order of
the court. Petitioner then filed a motion for
contempt of court for the stance that what
Respondent did was contempt.
o Respondent trial court then issued the assailed
order where it favored respondent company’s
contention that they cannot comply with the
obligations.
Issue
Tanguilig v. Court of Appeals
Whether or not the decision rendered by the C.A and G.R. 117190 | Jan 2, 1997 | Oblicon | Case 9 | Delay
affirmed by the S.C is capable of performance and can be Facts
executed.
April 1987 – Petitioner under the name of JMT Engineering deep well would be deducted from the contract price of
and General Merchandising proposed to Respondent 60,000.
Herce to construct a windmill system for him. The parties Due to this, the Court of Appeals ruled that the payment of
negotiated and agreed on the construction of the windmill 15,000 to SPGMI should be applied to his remaining
for 60,000 pesos with a one-year guaranty from the date of balance.
completion and acceptance by Respondent Herce Furthermore, the Court of Appeals rejects the claim of
o In pursuance to the agreement, respondent paid force majeure, ordering Petitioner to rebuild the windmill
Petitioner 30,000 as downpayment and in accordance with the one year guarantee.
installment payment of 15,000 leaving a balance
of 15,000. Issue
March 14, 1988 – Respondent refused to pay the balance.
This prompted Petitioner to file a complaint to collect the Whether or not the payment of 15,000 for the deep well
amount. should be included in the 60,000 for the windmill assembly.
Whether or not Petitioner is obligated to rebuild the said
Private Respondent’s Arguments windmill
RTC Ruling
Heirs of Luis Bacus v. Court of Appeals RTC Ruled in favor of Private Respondents, finding that
G.R 127695 | Dec. 3, 2001 | Oblicon | Case 11 | Delay defendants should perform their obligation in the option to
Facts buy and to execute a document of sale over the property in
issue.
Jun. 1, 1984 – Luis Bacus leased to Private Repsondent
Duray a parcel of agricultural land in Talisay Cebu. The said C.A Ruling
lease was for 6 years which ended on May 31, 1990. In the
said contract, an option to buy clause was provided. The Court of Appeals denied the appeal of petitioners on
the ground that private respondents exercised their option
o Under the said option to buy, the lessee had the to buy the leased the property before the expiration of the
exclusive and irrevocable right to buy 2,000 contract of lease.
square miles of the property within 5 years from
a year after the effectivity of the contract at 200 / Issue
sqm. Rate shall be also adjusted in proportion to
the exchange rate of Peso and USD. Whether or not Private Respondents incurred delay when
they did not deliver the purchase price or consign it on or
Oct. 10, 1989 – Luis Bacus died. before the expiry of contract.
Mar 15, 1990 – The Duray spouses informed one of the heirs Ruling
of Luis Bacus that they were willing and ready to purchase
the property under the option to buy the clause. Thus, they The Court denies the petition and affirms the C.A Ruling
requested that the heir prepare the necessary documents
The Court ruled that obligations under an option to buy are
such as a Special Power of Attorney authorizing him to
reciprocal obligations. Performance of one obligation is
enter into a contract of sale on behalf of his sisters.
conditioned on the simultaneous fulfillment of the other
Mar 30, 1990 – Petitioners refused to sell the property, due obligation; notice of the creditor’s decision to exercise his
to this, Private Respondent had an adverse claim option to buy need not be coupled with actual payment of
annotated by the Register of Deeds of Cebu. the price, so long as this is delivered to the owner of the
property upon performance of his part of the agreement.
Where the obligation is not yet due, consignation in court price any number or volume of its products
of the purchase price is not yet required. exclusively to Petitioner. Petitioner, in turn
would exclusively sell and distribute the products
o In this case, when private respondents opted to to the open market, whole sale or retail at a price
buy the property, their obligation was to advise set by Private Respondent.
petitioners of their decision and their readiness
to pay the price. They were not yet obliged to The said agreement, however, was terminated unilaterally
make actual payment. Only upon petitioners’ by Private Respondent causing damages to Petitioner.
actual execution and delivery of the deed were
they required to pay. o Private Respondent replied by denying that the
exclusive distributorship with Petitioner. Private
Consignation Respondent alleges that Petitioner is indebted to
them as of Sept. 30, 1965 a sum of 320,220.25
o Act of depositing the thing due with the court or plus interest representing the unpaid purchase
judicial authorities whenever the creditor cannot price of Private Respondent’s products.
accept or refuses to accept payment and it
generally requires a prior tender of payment. The drift of the companies started when on February 17,
1962, a majority of the members of the board of directors
Furthermore, in reciprocal obligations, neither party incurs of Petitioner company approved an amendment to its
in delay if the other does not comply or is not ready to articles of incorporation thereby authorizing the said
comply in a proper manner with what is incumbent upon corporation to engage in the merchandizing business as
him. one of its secondary purposes and also increasing the
o In this case, private respondents did not incur in product types it could manufacture.
delay when they did not yet deliver payment nor o The said amendment was approved, and a
make a consignation before the expiration of the written contract was made regarding the
contract. exclusive distributorship for two years starting
Nov 16, 1962 over two products made by Private
Respondent
RTC Ruling
Issue