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Five brothers and sisters inherited in equal pro indiviso shares a parcel of land registered CA (1987) in 'the name of their deceased parents. Two of the siblings transferred their shares to herein petitioners. By virtue of such agreements, the petitioners occupied, after the said sales, an area corresponding to two-fifths of the said lot, representing the portions sold to them. The vendees subsequently enclosed the same with a fence. In 1975, with their consent, their son Eduardo Alonzo and his wife built a semi-concrete house on a part of the enclosed area. The other siblings filed a complaint invoking their right of redemption. The trial court dismissed the case, on the ground that the right had lapsed, not having been exercised within thirty days from notice of the sales. Although there was no written notice, it was held that actual knowledge of the sales by the co-heirs satisfied the requirement of the law
The only real question in this case, therefore, is interpretation and application of the pertinent law interestingly enough, by both the petitioners and respondents. This is Article 1088 of the Civil Code, follows:
the correct as invoked, the private providing as
Art. 1088. Should any of the heirs sell his hereditary rights to a stranger before the partition, any or all of the co-heirs may be subrogated to the rights of the purchaser by reimbursing him for the price of the sale, provided they do so within the period of one month from the time they were notified in writing of the sale by the vendor. In reversing the trial court, the respondent court declared that the notice required by the said article was written notice and that actual notice would not suffice as a substitute. Citing the same case of De Conejero v. Court of Appeals applied by the trial court, the respondent court held that that decision, interpreting a like rule in Article 1623, stressed the need for written notice although no particular form was required. Thus, according to Justice J.B.L. Reyes, who was the ponente of the Court, furnishing the co-heirs with a copy of the deed of sale of the property subject to redemption would satisfy the requirement for written notice. "So long, therefore, as the latter (i.e., the redemptioner) is informed in writing of the sale and the particulars thereof," he declared, "the thirty days for redemption start running. " In the earlier decision of Butte v. UY, " the Court, speaking through the same learned jurist, emphasized that the written notice should be given by the vendor and not the vendees, conformably to a similar requirement under Article 1623, reading as follows: Art. 1623. The right of legal pre-emption or redemption shall not be exercised except within thirty days from the notice in writing by the prospective vendor, or by the vendors, as the case may be. The deed of sale shall not be recorded in the Registry of Property, unless accompanied by an affidavit of the vendor that he has given written notice thereof to all possible redemptioners. The right of redemption of co-owners excludes that of the adjoining owners. As "it is thus apparent that the Philippine legislature in Article 1623 deliberately selected a particular method of giving notice, and that notice must be deemed exclusive," the Court held that notice given by the vendees and not the vendor would not toll the running of the 30day period.
We are satisfied that in this case the other brothers and sisters were actually informed. The extension of thirty (30) days allegedly granted to the respondent by Roberto Z. the failure of the respondent to pay the balance of the purchase price was a breach of the contract and was a ground for rescission thereof. sold a parcel of land to Machuca petitioner Machuca under a Memorandum of Agreement (MOA). By requiring written proof of such notice. (2000) Lafortezas refused to continue sale despite Machuca offering to pay the (1992) remaining purchase price. i. Laforteza did not appear thereon as required by the Special Powers of Attorney. The co-heirs in this case were undeniably informed of the sales although no notice in writing was given them. Laforteza (assisted by his counsel Attorney Romeo Gutierrez) was correctly found by the Court of Appeals to be ineffective inasmuch as the signature of Gonzalo Z. the evidence reveals that after the expiration of the six-month period provided for in the contract. which the respondent court understandably applied pursuant to existing jurisprudence.e. Waivers/ Warranties NCC 1592-1191 Laforteza The heirs of the late Francisco Q. the petitioners were not ready to comply with what was incumbent upon them. we cannot accept the private respondents' pretense that they were unaware of the sales made by their brother and sister in 1963 and 1964. What we are doing simply is adopting an exception to the general rule. although not in writing. Even assuming for the sake of argument that the petitioners were ready to comply with their . Admittedly. The purpose is clear enough: to make sure that the redemptioners are duly notified. v. Laforteza and Gonzalo Z. The said court acted properly as it had no competence to reverse the doctrines laid down by this Court in the above-cited cases. and this should be clearly stressed. Laforteza. In fact. It was only on September 18. the delivery of the reconstituted title of the house and lot. Laforteza represented by Roberto Z. The next issue to be addressed is whether the failure of the respondent to pay the balance of the purchase price within the period allowed is fatal to his right to enforce the agreement.In the face of the established facts. we would be closing our eyes to the obvious truth in favor of their palpably false claim of ignorance. and that such notice was sufficient. neither party incurs in delay if the other party does not comply or is not ready to comply in a proper manner with what was incumbent upon him. We rule in the negative. Jr. in view of the peculiar circumstances of this case. However. 1989 or nearly eight months after the execution of the Memorandum of Agreement when the petitioners informed the respondent that they already had a copy of the reconstituted title and demanded the payment of the balance of the purchase price. We realize that in arriving at our conclusion today. The respondent could not therefore be considered in delay for in reciprocal obligations. Machuca filed action for specific performance. of the sales made in 1963 and 1964. we ourselves are not abandoning the De Conejero and Buttle doctrines. we are deviating from the strict letter of the law. thus exalting the letter of the law over its purpose.
000.obligation.00 by the petitioners' lawyer. Petitioners' insistence that the respondent should have consignated the amount is not determinative of whether respondent's action for specific performance will lie. Petitioners themselves point out that the effect of cansignation is to extinguish the obligation. It is not disputed that the petitioners did not make a judicial or notarial demand for rescission. It releases the debtor from responsibility therefor. the agreement was still in force inasmuch as the contract was not yet rescinded. Thus. A seller cannot unilaterally and extrajudicially rescind a contract or sale where there is no express stipulation authorizing him to extrajudicially rescind. even though it may have been stipulated that upon failure to pay the price at the time agreed upon the rescission of the contract shall of right take place. Petitioners themselves point out that the effect of cansignation is to extinguish the obligation. At any rate. the vendee may pay. The Court of Appeals correctly found the petitioners guilty of bad faith and awarded moral damages to the respondent.000. Attorney Gutierrez.00 is not tantamount to a breach of the contract for by the fact of tendering payment.1avThe November 20. As found by the said Court. The rescission of a sale of an immovable property is specifically governed by Article 1592 of the New Civil Code. even after the expiration of the period. It was also made five days after the respondent's attempt to make the payment of the purchase price. Rescission of a contract will not be permitted for a slight or casual breach. when the respondent filed his complaint for specific performance. Neither was there a judicial demand for the rescission thereof. the court may not grant him a new term. After the demand. but only such substantial and fundamental breach as would defeat the very object of the parties in making the agreemant. as long as no demand for rescission of the contract has been made upon him either judicially or by a notarial act. The failure of the respondent to consignate the P600. It releases the debtor from responsibility therefor. Besides. to . the petitioners refused to comply with. Petitioners' insistence that the respondent should have consignated the amount is not determinative of whether respondent's action for specific performance will lie.000.00 is not tantamount to a breach of the contract for by the fact of tendering payment. considering that the six-month period was merely an approximation of the time if would take to reconstitute the lost title and was not a condition imposed on the perfection of the contract and considering further that the delay in payment was only thirty days which was caused by the respondents justified but mistaken belief that an extension to pay was granted to him. their obligation for the reason that they were offered a higher price therefor and the respondent was even offered P100. he was willing and able to comply with his obligation. This offer to pay prior to the demand for rescission is sufficient to defeat the petitioners' right under article 1592 of the Civil Code. we agree with the Court of Appeals that the delay of one month in payment was a mere casual breach that would not entitle the respondents to rescind the contract. 1989 letter of the petitioners informing the respondent of the automatic rescission of the agreement did not amount to a demand for rescission. as it was not notarized. which reads: In the sale of immovable property. The failure of the respondent to consignate the P600. he was willing and able to comply with his obligation. we find that rescission of the contract will still not prosper. the Memorandum Agreement between the parties did not contain a clause expressly authorizing the automatic cancellation of the contract without court intervention in the event that the terms thereof were violated.
1967 and consigning the monthly installments due with the court. payable on an installment basis. Neither can it be said that the cancellation of the contract was ineffective for failure of private respondents to give petitioners notice thereof as petitioners were informed cancelled private respondent that the contract was cancelled in the letter dated April 6. CA (1988) Petitioners. 1967.000. the Court is convinced that the forfeiture of the amount of P5.00 as and for attorney's fees. Agreeing with the findings and conclusions of the trial court.. wherein the parties entered into a stipulation of facts. Following the hearing of the case. the spouses Newton and Salvacion Jison. Such a situation does not obtain illness: the instant case. petitioners countered by filing a complaint for specific performance with the Court of First Instance of Rizal on May 4. Petitioners failed several times to pay the monthly installments due. ordering petitioners to pay P1. in obligations with a penal clause. The lot buyer in said case was only informed of the resolution of the contract some six years later after the developer. 1987 petitioners failed to pay the monthly installment due.00 although it includes the accumulated fines for petitioners' failure to construct a house as required by the contract.. the notice of cancellation need not be by notarial act.173. whereby the latter agreed to sell to the former a lot at the Victoria Valley Subdivision in Antipolo. Thus. the Court of Appeals on November 4. in a letter dated April 6.. Inc. On April 19. The amount awarded depends on the discretion of the court based on the circumstances of each case. without informing the buyer of the cancellation of the contract. In arriving at this amount the Court gives weight to the fact that although petitioners have been delinquent in paying their amortizations several times to the prejudice of private respondent.75 appears to be a fair settlement. when private respondent wrote them the letter dated April 6. The award of moral damages is in accordance with Article 1191 of the Civil Code pursuant to Article 2220 which provides that moral damages may be awarded in case of breach of contract where the defendant acted in bad faith. the award given by the Court of Appeals amounting to P50. case. 65856. thereby making their account delinquent for three months. the judge shall equitably reduce the penalty when the principal obligation has been partly or irregularly complied with by the debtor . Under the circumstances. to private respondent who is free to resell it to another party. Thus. the trial court on January 9.00 appears to us to be fair and reasonable.A. the amounts already paid shall be forfeited in favor of the vendor as liquidated damages. or P3.283. is clearly iniquitous considering that the contract price is only P6.00. was not yet effective. with the cancellation of the contract the possession of the lot review. the same percentage of the amount already paid would have been forfeited The Court's decision to reduce the amount forfeited finds support in the Civil Code. petitioners appealed to the Court of Appeals.A. 1967 . Not satisfied with the decision of the trial court. Also. relinquish his rights over the property.Jison v. 1967.. whether intended as an indemnity or a penalty. 65856. rejected his request for authority to assign his rights under the contract.000. In said case.15 The forfeiture of fifty percent (50%) of the amount already paid. with interest at 8.000. Robert O. While the resolution of the contract and the forfeiture of the amounts already paid are valid and binding upon petitioners. The Code provides that liquidated damages. There is no denying that in the instant case the resolution or rescission of the Contract to Sell was valid. No. 1976 affirmed the former's decision. petitioners tendered payment for all the installments already due but the tender was refused. In fact. in case the contract is cancelled.] Further. Private respondent returned petitioners' check and informed them that the contract was cancelled when on April 1. the subdivision developer. dismissing the complaint and declaring the contract cancelled and all payments already made by petitioner franchise. and declaring the consignation and tender of payment made by petitioners as not amounting to payment of the corresponding monthly installments. As R.1965 per annum. 1969 rendered judgment in favor of private respondent. Phillips & Sons. 1967 and within a month they were able to file a complaint against Private respondent. shall be equitably reduced if they are iniquitous or unconscionable [Art. entered into a Contract to Sell with private respondent. been applicable to the instant case. private respondent's letter being sufficient compliance with the legal requirement. had R. resold the lot to another person. The facts of 'fee instant case should be distinguished from those in the Palay Inc. petitioners were informed of the cancellation of their contract in April 1967. as such distinction will explain why the Court in said case invalidated the resolution of the contract. Rizal for the agreed price of P55. 2227. No. As stated in paragraph 3 of the contract.
failure of which is not really a breach. 1995. The parties stand as if the conditional obligation had never existed. Unlike a contract of sale. Branch 126. since they had already paid one-half of the purchase price.Contract of Sale/Contract to Sell Spouses Valenzuela v. The petitioners retained ownership without further remedies by the respondents until the payment of the purchase price of the property in full. but merely an event that prevents the seller from conveying title to the purchaser. Several payments were made but Spouses Valenzuela failed to pay the entire amount stipulated. ownership is. by agreement. Kalayaan responded by reminding petitioners of their unpaid balance and asked that they settle it within the next few days. the vendor loses ownership over the property and cannot recover it until and unless the contract is resolved or rescinded. petitioners requested Kalayaan that they be issued a deed of sale for the 118 sq.00. m. m.000. title is retained by the vendor until full payment of the purchase price. 1994. Kalayaan filed a Complaint for Rescission of Contract and Damages against petitioners before the Regional Trial Court (RTC) of Caloocan City. the nature and characteristics of a contract to sell is determinative of the propriety of the remedy of rescission and the award of attorney’s fees. payment of the price is a positive suspensive condition. They reasoned that. The non-payment of the purchase price renders the contract to sell ineffective and without force and effect. The full payment is a positive suspensive condition. where the title to the property passes to the vendee upon the delivery of the thing sold. the parties executed a Contract to Sell wherein they stipulated that petitioners would purchase 236 square meters of the subject property for P1. they should be issued a deed of sale for the said portion of the property. Kalayaan (2009) Petitioners negotiated with Kalayaan to purchase the portion of the lot they were occupying. the seller retains title to the thing to be sold until the purchaser fully pays the agreed purchase price. On August 5. but an event that prevents the obligation of the petitioners to convey title from arising. in a contract to sell. serious or otherwise.000. Such payment is a positive suspensive condition. portion of the lot where their house was standing. In the latter contract. the . Article 1191 of the Civil Code would have no application. There can be no rescission of an obligation that is still non-existing. Otherwise stated.00 representing 118 sq. It was also stipulated that Kalayaan shall execute the corresponding deed of absolute sale over the subject property only upon full payment of the total purchase price. in a contract to sell. C-18378. rendered the contract to sell ineffective and without force and effect. In the present case. of the subject property. which is a suspensive condition to the obligation of the petitioners to sell and deliver the title to the property. the non-fulfillment of which is not a breach of contract. considering that they no longer had the resources to pay the remaining balance. reserved to the vendor and is not to pass to the vendee until full payment of the purchase price. failure of which is not a breach but an event that prevents the obligation of the vendor to convey title from becoming effective. which was later docketed as Civil Case No. In a letter dated September 6. it is evident that the parties executed a contract to sell and not a contract of sale. The petition is devoid of merit. Article 1191 of the New Civil Code will not apply because it presupposes an obligation already extant. Under a contract to sell. x x x xxxx The non-fulfillment by the respondent of his obligation to pay. whereas. in accordance with Article 1184 of the Civil Code. Rayos v. in a contract of sale. or a total of P708.416. Court of Appeals elucidates: Construing the contracts together. Since the obligation of respondent did not arise because of the failure of petitioners to fully pay the purchase price.
serious or otherwise. but an event that prevents the obligation of the seller to convey title from arising. Such payment is a positive suspensive condition. The parties’ contract to sell explicitly provides that Kalayaan “shall execute and deliver the corresponding deed of absolute sale over” the subject property to the petitioners “upon full payment of the total purchase price.” Since petitioners failed to fully pay the purchase price for the entire property. Thus. Kalayaan cannot be compelled to transfer ownership of the property to petitioners.suspensive condition not having happened. The non-fulfillment by petitioners of their obligation to pay. Kalayaan’s obligation to convey title to the property did not arise. Kalayaan may validly cancel the contract to sell its land to petitioner. rendered the Contract to Sell ineffective and without force and effect. . The parties stand as if the conditional obligation had never existed. which is a suspensive condition for the obligation of Kalayaan to sell and deliver the title to the property. failure of which is not a breach. Inasmuch as the suspensive condition did not take place. but because their obligation thereunder did not arise. not because it had the power to rescind the contract. Petitioners failed to pay the balance of the purchase price.
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