HEIRS OF PAULINO PAULINO ATIENZA v. DOMINGO P. ESPIDOL E SPIDOL G.R. No. 180665 Re: Contract of Sale viz-a-viz Contract to Sell
Fact:
On August 12, 2002 the Atienzas and respondent Domingo P. Espidol entered into a contract called Kasunduan called Kasunduan sa Pagbibili ng Lupa na may Paunang-Bayad (contract Paunang-Bayad (contract to sell land with a down payment co!ering the property. property. "hey agreed on a price o# P1$0.00 per s%uare meter or a total o# P2,& 2,&',) ',)* *0.00 0.00,,
pay paya+l a+le
in
thre threee
inst instal alllment mentss P100 P100,0 ,00 00.00 0.00
upon upon
the
sign igning ing
o#
the
contract- P1,*'0,000.00 in Decem+er 2002, and the remaining P*,)*0.00 in /une 200$. espondent Espidol Espidol paid the Atienzas Atienzas P100,000.0 P100,000.00 0 upon the eecution eecution o# the contract contract and paid P$0,000.00 P$0,000.00 in comm commis issi sion on to the the +ro +roer ers. s. 3hen 3hen the the Atie Atienz nzas as deman demande ded d paym paymen entt o# the the seco second nd inst instal allm lmen entt o# P1,*'0,000.00 in Decem+er 2002, howe!er, respondent Espidol could not pay it. 4e o##ered to pay the Atienzas P'00.000.00 in the meantime, which they did not accept. 5laiming that Espidol +reached his o+ligation, on 6e+ruary 21, 200$ the Atienzas #iled a Complaint for the Annulment of their Agreement with damages +e#ore the egional "rial 5ourt ("5 ("5 o# 5a+anatuan 5ity in 5i!il 5ase '1. I!e: 3hether or not the Atienzas were entitled to the cancellation o# the contract to sell they entered into with respondent Espidol on the ground o# the latter7s #ailure to pay the second installment when it #ell due. R!"#$%: egarding the right to cancel the contract #or non8payment o# an installment, there is need to
initially determine i# what the parties had was a contract o# sale or a contract to sell. 9n a con contrac tractt of sale sal e , the title to the property passes to the +uyer upon the deli!ery o# the thing sold. 9n a contract to sell , on the other hand, the ownership is, +y agreement, retained +y the seller and is not to pass to the !endee until #ull payment o# the purchase price. price . 9n the contract o# sale, the +uyer7s non8payment o# the price is a negative resolutory resolutory conditioncondition - in the contract to sell, the +uyer7s #ull payment o# the price is a positive suspensive condition condition to the coming into e##ect o# the agreement. 9n the #irst case, the seller has lost and cannot reco!er the ownership o# the property unless he taes action to set aside the contract o# sale. 9n the second case, the title simply remains in the seller i# the +uyer does not comply with the condition precedent o# maing payment at the time speci#ied in the contract. 4ere, it is %uite e!ident that the contract in!ol!ed was one o# a contract contract to sell since the Atienzas Atienzas,, as sellers, were to retain retain title o# ownership ownership to the land until respondent Espidol, the +uyer, has paid the agreed price. 9ndeed, there seems no %uestion that the parties understood understood this to +e the case. Admittedly, Espidol was una+le to pay the second installment o# P1,*'0,000.00 that #ell due in Decem+er 2002. "hat payment, said +oth the "5 and the 5A, was a positi!e suspensi!e condition #ailure o# which was not regarded a +reach in the sense that there can +e no rescission o# an o+ligation (to
turn o!er title that did not yet eist since the suspensi!e condition had not taen place. place. And this is correct so #ar. :n#ortunately, the "5 and the 5A concluded that should Espidol e!entually pay the price o# the land, though not on time, the Atienzas were +ound to comply with their o+ligation to sell the same to him. ;ut this is error. 9n the #irst place, since Espidol #ailed to pay the installment on a day certain #ied in their agreement, the Atienzas can a#terwards !alidly cancel and ignore the contract to sell +ecause their o+ligation to sell under it did not arise.
. Paras ga!e a #itting eample o# suspensi!e condition 9ll +uy your land #or P1,000.00 i# you pass the last +ar eaminations. "his he said was suspensi!e #or the +ar eaminations results will +e awaited. =eantime the +uyer is placed under no immediate o+ligation to the person who too the eaminations. 4ere, howe!er, although the Atienzas had no o+ligation as yet to turn o!er title pending the occurrence o# the suspensi!e condition, it was implicit that they were under immediate o+ligation not to sell the land to another in the meantime. 3hen Espidol #ailed to pay within the period pro!ided in their agreement, the Atienzas were relie!ed o# any o+ligation to hold the property in reser!e #or him. "he ruling o# the "5 and the 5A that, despite the de#ault in payment, the Atienzas remained +ound to this day to sell the property to Espidol once he is a+le to raise the money and pay is %uite un?usti#ied. "he total price was P2,&',)*0.00. P2,&',)*0.00. "he Atienzas decided to sell the land +ecause petitioner Paulino Paulino Atienza Atienza urgently urgently needed money #or the treatment treatment o# his daughter daughter who was su##ering su##ering #rom leuemia. Espidol paid a measly P100,000.00 in down payment or a+out $.'@ o# the total price, ?ust a+ou a+outt the the mini minimu mum m size size o# a +roe roers rs comm commis issi sion on.. Espi Espido doll #ail #ailed ed to pay pay the the +ul +ul o# the the price, P1,*'0,000.00, when it #ell due #our months later in Decem+er 2002. "hus, it was not such a small de#ault as to ?usti#y the "5 and the 5As decision to continue to tie up the Atienzas to the contract to sell upon the ecuse that Espidol tried his honest +est to pay. Although the Atienzas #iled their action with the "5 on 6e+ruary 21, 200$, #our months +e#ore the last instal installme lment nt o# P*,) P*,)*0. *0.00 00 #ell #ell due in /une /une 200$, 200$, it canno cannott +e said said that that the action action was premature. i!en Espidols #ailure to pay the second installment o# P1,*'0,000.00 in Decem+er 2002 when it was due, the Atienzas o+ligation to turn o!er ownership o# the property to him may +e regarded as no longer eisting. "he Atienzas Atienzas had the right to see ?udicial declaration o# such non8eistent non8eistent status o# that contract to relie!e themsel!es o# any lia+ility should they decide to sell the property to someone else. Parenthetically, Espidol ne!er o##ered to settle the #ull amount o# the price in /une 200$, when the last installment #ell due, or during the whole time the case was pending +e#ore the "5.
HIRD DI&ISION' G.R. No. 1(6)51' *!"+ 0(' )01,' OLI&AREZ REALT- ORPORATION AND DR. PA/LO R. OLI&AREZ' PETITIONERS' &S. /EN*AMIN ASTILLO' RESPONDENT. Re: 5onditional aurel, ;atangas, co!ered +y "rans#er 5erti#icate o# "itle Bo. "81*2. "he Philippine "ourism "ourism Authority allegedly claimed ownership o# the same parcel o# land +ased on "rans#er 5erti#icate o# "itle Bo. "8 1&$.On April April ', 2000, 5astillo and Oli!arez ealty 5orporation, represented +y Dr. Pa+lo . Oli!arez, entered into a contract o# conditional sale o!er the property. property. :nder the deed o# conditional sale, Oli!arez To!3#4 A!to3#t+ Cwith the #ull ealty 5orporation a"" #"e te act#o$ a%a#$t te P#"#22#$e To!3#4 assistance o# 5astillo.CParagraph 5 o# the deed o# conditional sale pro!ides
C. Olivarez Realty Corporation assumes te responsibility responsibility of ta!ing necessary legal action tru Court to ave te claim"title #C# #-$%&'( of Pilippine #ourism )utority over te above-described property be nullified and voided* +it te full assistance of Castillo,. . /n te event tat te Court Court denies te petition petition against te Pilippine Pilippine #ourism #ourism )utority )utority00 all sums received by Castillo sall be reimbursed to Olivarez Realty Corporation +itout interest,. )s to te 1legitimate tenants1 occupying te property0 Olivarez Realty Corporation undertoo! to pay tem 1disturbance compensation01 compensation01 +ile Castillo undertoo! to clear te land of te tenants +itin si2 monts from te te signing of te deed of conditional sale. sale. A#ter the parties had signed the deed o# conditional sale, Oli!arez ealty 5orporation immediately too possession o# the property. 4owe!er, the corporation only paid 2,'00,000.00 o# the purchase price. 5ontrary to the agreement, the corporation did not #ile any action against the Philippine "ourism Authority to !oid the latter7s title to the property . "he corporation neither cleared the land o# the tenants nor paid them distur+ance compensation. compensation . Despite demand, Oli!arez ealty 5orporation re#used to #ully pay the purchase price. Arguing Arguing that Oli!arez ealty 5orporation committed su+stantial +reach o# the contract o# conditional sale and that the deed o# conditional sale was a contract o# adhesion, 5astillo prayed #or rescission o# contract under Article 111 111 o# the 5i!il 5ode o# the Philippines. Philippines. I!e: 3hether or not 5astillo is entitled to cancel the contract o# conditional sale R!"#$%:
9n +oth contracts to sell and contracts o# conditional sale, t#t"e to te property remains +it te seller until te buyer fully pays te purcase price . ;oth contracts are su+?ect to the positi!e suspensi!e condition condition o# the +uyer7s #ull payment o# the purchase price. 9n a contract o# conditional sale, the +uyer a!to4at#ca""+ ac%uires title to the property upon #ull payment o# the purchase price. "his trans#er o# title is 1by operation of la+ +itout any furter act aving to be performed by te seller.1 9n a contract to sell, trans#er o# title to the prospecti!e +uyer is $ot a!to4at#c. C"he prospecti!e seller mustF con!ey title to the property throughF a eed a eed of )bsolute )bsolute Sale.1 "he distinction is important to determine the applica+le laws and remedies in case a party does not #ul#ill his or her o+ligations under the contract. 9n contracts o# conditional sale, our laws on sales under the 5i!il
5ode o# the Philippines apply. apply. On the other hand, contracts to sell are not go!erned +y our law on sales +ut +y the 5i!il 5ode pro!isions on conditional obligations . uisa omez entered into a contract to sell o!er a parcel o# land. "he city deli!ered the property7s property7s possession to omez.
