PEOPLE'S PEOPLE'S INDUSTRIAL INDUSTRIAL AND COMMERCIAL COMMERCIAL CORPORATION, CORPORATION, petitioner, petitioner, vs. COURT OF APPEALS APPEALS and MAR-IC IN!ESTMENT CORPORATION, respondents. ".R. No. ##$%&&
Oto(er $), #**%
$+# SCRA $ Ponente ROMERO, /. 0T1IRD DI!ISION2 Fats Private respondent Mar-ick Investment Corporation is the exclusive and registered owner of Marick Subdiv Subdivisi ision on in Barri Barrio o Buli, Buli, Cainta Cainta,, i!al" i!al" #n Ma$ %&, '&(', '&(', privat private e respon responden dentt entere entered d into into ( agreements with petitioner People)s Industrial and Commercial Corporation whereb$ it agreed to sell to petitioner ( subdivision lots" *ive of the agreements stipulate that the petitioner agreed to pa$ private respondent for each lot, the amount of P+,"% with a down pa$ment of P./"" 0he balance of P(,/1"% shall be pa$able in '% e2ual monthl$ installments of P1+"'' ever$ th of the month, for a period of ten $ears" 3ith respect to another lot, the parties agreed to the purchase price of P+,+" with a down pa$ment of P1(" and e2ual monthl$ installments of P("%" 4fter the lapse of ten $ears, petitioner petitioner still had not full$ paid paid for the six lots" It had paid onl$ the down pa$ment and / installments" 4fter a series of negotiations between the parties, the$ agreed to enter into a new contract to sell on #ctober '', '&/" 0he contract stipulates that the previous contracts have been cancelled due to the failure of the purchaser to pa$ the stipulated installments" 5either 5either of the parties signed the new contract" contract" Siatianum Siatianum issued issued checks checks in the total total amount amount of P+,(.%"+% to private respondent" Private respondent received but did not encash the checks" Instead, it filed in the egional 0rial Court of 4ntipolo, 4ntipolo, i!al, a complaint for accion publiciana de posesion against petitioner and 0omas Siatianum, as president and ma6orit$ stockholder of petitioner" It pra$ed that petitioner surrender possession of the lots of Mar-ick Subdivision, and that petitioner and 0omas Siatianum be ordered to pa$ reasonable rentals for the use of the lots" In the alternative, the compla complain intt pra$ed pra$ed that that should should the agreem agreement ents s be deemed deemed not automa automati tical call$ l$ cancel cancelled led,, the same same agreements should be declared null and void" 7ower court rendered a decision finding that the original agreements of the parties were validl$ cancelled" 0he parties did not enter into a new contract in accordance with 4rt" '. 8%9 of the Civil Code as the parties did not sign the draft contract" eceipt b$ private respondent of the five checks could not amount to perfection of the contract because private respondent never encashed and benefited from those checks" 0here was no meeting of the minds between the parties because 4rt" .+1 of the Civil Code should be read with the Statute of *rauds that re2uires the embodiment of the contract in a note or memorandum" 3hat was clearl$ proven was that both parties negotiated a new contract after the termination of the first" 0hus, the fact that the parties tried to negotiate a new contract indicated that the$ considered the first contract as alread$ alread$ cancelled" cancelled" Petitione Petitionerr elevated elevated the case to the Court Court of 4ppeals 4ppeals which affirmed in toto the lower court)s decision"
Iss3e 3hether or not there was a perfected and enforceable contract of sale on #ctober '', '&/ which modified the earlier contracts to sell which had not been validl$ rescinded"
Ruling: The contracts to sell of 1961 were cancelled to which the parties voluntarily bound themselves. When petitioner failed to abide by its obligation to pay the installments provision provision No. 9 of the contract automatically took eect which states that should the purchaser fail to make the payment of any of the
monthly installments as agreed herein! this contract shall! by the mere fact of nonpayment! e"pire by itself and become null and void.# The 1961 agreements are contracts to sell and not contracts of sale. The distinction between these contracts is depicted in $delfa %roperties! &nc. v. 'ourt of $ppeals which states that the distinction between the two is important for in a contract of sale! the title passes to the vendee upon the delivery of the thing sold( whereas in a contract to sell! by agreement the ownership is reserved in the vendor and is not to pass until the full payment of the price. &n a contract of sale! the vendor has lost and cannot recover ownership until and unless the contract is resolved or rescinded( whereas! in a contract to sell! 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 title from becoming eective. Thus! a deed of sale is considered absolute in nature where there is neither a stipulation in the deed that title to the property sold is reserved in the seller until the full payment of the price! nor one giving the vendor the right to unilaterally resolve the contract the moment the buyer fails to pay within a )"ed period.# *eing contracts to sell! $rticle 1+9, of the 'ivil 'ode which re-uires rescission either by udicial action or notarial act is not applicable. %etitioner alleges that there was a new perfected and enforceable contract of sale between the parties in /ctober 190. %rivate respondent2s company lawyer volunteered that after the cancellation of the 1961 agreements! the parties should negotiate and enter into a new agreement. 3owever! after he had drafted the contract and sent it to petitioner! the latter deposited a check for downpayment but its representative refused to sign the prepared contract. &n the absence of proof to the contrary! this draft contract may be deemed to embody the agreement of the parties. %rivate respondent did not and has not denied the e"istence of that contract. 4nder these facts! therefore! the parties may ideally be considered as having perfected the contract of /ctober 190. 5ustice and e-uity! however! will not be served by a positive ruling on the perfection and performance of the contract to sell. There are facts on record proving that the parties had not arrived at a de)nite agreement. *y $tty. illamayor2s admission! the checks were not encashed because Tomas 7iatianun did not sign the draft contract that he had prepared. /n his part! Tomas 7iatianun e"plained that he did not sign the contract because it covered 8 lots while their agreement was only for 6 lots. The number of lots to be sold is a material component of the contract to sell. Without an agreement on the matter! the parties may not in any way be considered as having arrived at a contract under the law. oreover! installments paid by the petitioner on the land should be deemed rentals. $rticle 1:06 of the 'ivil 'ode provides that a stipulation that the installments or rents paid shall not be returned to the vendee or lessee shall be valid insofar as the same may not be unconscionable under the circumstances. W3;<;=/<;! the instant petition for review on certiorari is hereby denied and the -uestioned >ecision of the 'ourt of $ppeals is $==&<;>.
