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money. They are due, liquidated, and demandable. They are not claimed by a
third person.
It is true that the joint account of private respondent and his wife was
debited in the case at bar. We hold that the presence of private respondent's
wife does not negate the element of mutuality of parties, i.e., that they must
be creditors and debtors of each other in their own right. The wife of private
respondent is not a party in the case at bar. She never asserted any right to
the debited U.S. Treasury Warrant. Indeed, the right of the petitioner bank to
make the debit is clear and cannot be doubted. To frustrate the application of
legal compensation on the ground that the parties are not all mutually
obligated would result in unjust enrichment on the part of the private
respondent and his wife who herself out of honesty has not objected to the
debit. The rule as to mutuality is strictly applied at law. But not in
equity, where to allow the same would defeat a clear right or permit
irremediable injustice.
FACTS
On 1984 Luis Bacus leased to Faustino Duray a parcel of agricultural land
with total land area of 3,002 of square meters, in Cebu. The lease was for six
years ending in 1990, the contract contained an option to buy clause. Under
the said option, the lessee had the exclusive and irrevocable right to buy
2,000 square meters 5 years from a year after the effectivity of the contract,
at P200 per square meter. That rate shall be proportionately adjusted
depending on the peso rate against the US dollar, which at the time of the
execution
of
the
contract
was
14
pesos.
Close to the expiration of the contract Luis Bacus died on 1989, after Duray
informed the heirs of Bacus that they are willing and ready to purchase the
property under the option to buy clause. The heirs refused to sell, thus Duray
filed a complaint for specific performance against the heirs of Bacus. He
showed that he is ready and able to meet his obligations under the contract
with Bacus. The RTC ruled in favor of the Durays and the CA later affirmed
the
decision.
ISSUES
Can the heirs of Luis Bacus be compelled to sell the portion of the lot under
the
option
to
buy
clause?
- Yes, Obligations under an option to buy are reciprocal obligations.
The performance of one obligation is conditioned on the simultaneous
fulfillment of the other obligation. In other words, in an option to buy,
the payment of the purchase price by the creditor is contingent
upon the execution and delivery of the deed of sale by the debtor.
- When the Durays exercised their option to buy the property their obligation
was to advise the Bacus of their decision and readiness to pay the price,
they were not yet obliged to make the payment. Only upon the Bacus actual
execution and delivery of the deed of sale were they required to pay.
- The Durays did not incur in delay when they did not yet deliver the
payment nor make a consignation before the expiration of the contract. In
reciprocal obligations, neither party incurs in delay if the other
party does not comply or is not ready to comply in a proper manner
with what is incumbent upon him. Only from the moment one of the
parties fulfills his obligation, does delay by the other begin.
HELD
The petition is DENIED nad the decision of the Court of Appeals is AFFIRMED.
Obligations
and
Contracts
Terms:
Reciprocal Obligations- Those which arise from the same cause, and in
which each party is a debtor and a creditor of the other, such that the
obligation of one is dependent upon the obligation of the other. They are to
COMELEC vs Quijano
Section 47. xxxno contract involving the expenditure of public funds by any
government agency shall be entered into or authorized unless the proper
accounting official of the agency concerned shall have certified to the officer
entering into the obligation that funds have been duly appropriated for the
purpose and that the amount necessary to cover the proposed contract for
the current calendar year is available for expenditure on account thereof xxx
Quite evident from the tenor of the language of the law that the existence of
appropriations and the availability of funds are indispensable pre-requisites
to or conditions sine qua non for the execution of government contracts. The
obvious intent is to impose such conditions as a priori requisites to the
validity of the proposed contract.
Clearly the amount appropriated is insufficient to cover the cost of the entire
VRIS project. There is no way that the COMELEC could enter into a contract
with PHOTOKINA whose accepted bid was way beyond the amount
appropriated by law for the project.
The contract, as expressly declared by law, is inexistent and void ab initio.
Proposed contract is without force and effect from the very beginning, as if it
had never been entered into.
Odyssey Park v. CA
Facts:
Bancom Development Corporation and Odyssey Park, Inc., entered into a
Contract to Sell, whereby the former agreed to sell to the latter the parcel of
land with an area of 8,499 square meters situated in Baguio City and the
of Agreement which was not, however, signed bythe parties. Union Bank,
through counsel, wrote Odyssey Park a letter formally rescinding and/or
cancelling the contract to sell and demanding that Odyssey vacate and
peaceably surrender possession of the premises.For failure of Odyssey to
vacate, Union Bank filed a case for illegal detainer and damages. Odyssey,
on the otherhand, filed this case for "Declaration of the Nullity of the
Rescission of the Contract to Sell With Damages"
LC: Contract to Sell have been properly rescinded; dismissing the complaint
for being frivolous and unfounded
CA: affirmed; MR denied
Issue:
Whether or not the rescission of the contract to sell by private respondent
accords with the requirements of Republic Act (R.A.) No. 6552, also known
as An Act to Protect Buyers of Real Estate on Installment Payments which,
petitioner insists, requires a cancellation or rescission of the contract by
means of a notarial act.
Held:
Contract properly rescinded, RA 6552 does not apply. Unfortunately for
petitioner, the invocation of Republic Act No. 6552 is misplaced. This law,
which normally applies to the sale or financing of real estate on installment
payments, excludes industrial lots, commercial buildings, and sales to
tenants under R.A. No. 3844. The appellate court has thus aptly said:
While the law applies to all transactions or contracts involving the sale or
financing of real estate on installment payments, including residential
condominium apartments, excluded are industrial lots, commercial buildings
and sales to tenants under R.A. 3844 as amended. The property subject of
the contract to sell is not a residential condominium apartment. Even on the
basis of the letter of Mr. Vicente A. Araneta, Exhibit E, the building is merely
`part of common areas and amenities under the Condominium concept of
selling to the public. The property subject of the contract to sell is more of a
commercial building.
1.
2.
3.
4.
a.
b.
FACTS: Spouses Guillermo Nombre and Victoriana Cari-an died without issue in 1924
and 1938, respectively. Nombres heirs include his nephews and grandnephews.
Victoriana was succeeded by her late brothers son, Gregorio Cari-an.
After Gregorios death in 1971, his wife, Generosa Martinez and children (Rodolfo,
Carmen, Leonardo and Fredisminda) were adjudged as heirs by representation to
Victorianas estate. Leonardo passed away, leaving his widow, Nelly Chua vda. de Carian and minor Leonell as his heirs
2 parcels of land, denominated by Lot 1616 and 1617, formed part of the estate of
Guillermo Nombre and Victoriana Cari-an.
In 1978, Gregorios heirs executed a deed of sale of rights, interests and participation in
favor of Pedro Escanlar and Francisco Holgado over the undivided share of
Victoriana for P275,000 to be paid to the heirs, except the share of the minor Leonell
Cari-an which shall be deposited to the Municipal Treasurer. Said contract of sale will
be effective only upon approval of CFI
Escanlar and Holgado, the vendees, were concurrently the lessees of the subject
property. In a deed of agreement executed by both parties confirming and affirming the
contract of sale, they stipulated the following:
That the balance of the purchase price (P225,000) shall be paid on or before May 1979
Pending complete payment thereof, the vendees shall not assign, sell, lease or
mortgage the rights, interests and participation thereof
c. In the event of nonpayment of the balance of said purchase price, the sum of P50,000
(down payment) shall be deemed as damages
5. Escanlar and Holgado were unable to pay the individual shares of the Cari-an heirs,
amounting to P55,000 each, on the due date. However, said heirs received at least 12
installment payments from Escanlar and Holgado after May 1979. Rodolfo was fully
paid by June 1979, Generosa Martinez, Carmen and Fredisminda were likewise fully
compensated for their individual shares. The minors share was deposited with the RTC
in September 1982.
6. Being former lessees, Escanlar and Holgado continued in possession of Lots 1616 and
Lots 1617. Interestingly, they continued to pay rent based on their lease contract.
7. Subsequently, Escanlar and Holgado sought to intervene in the probate proceedings of
Guillermo and Victoriana as buyers of Victorianas share. In 1982, the probate court
approved the motion filed by the heirs of Guillermo and Victoriana to sell their respective
shares in the estate. Thereafter, the Cari-ans, sold their shares in 8 parcels of land
including lots 1616 and 1617 to spouses Chua for P1.85 million.
8. The Cari-ans instituted a case for cancellation of sale against Escanlar and Holgado
alleging the latters failure to pay the balance of the purchase price on the stipulated
date and that they only received a total of P132,551 in cash and goods.
9. Escanlar and Holgado averred that the Cari-ans, having been paid, had no right to resell
the subject lots and that the spouses Chua were purchasers in bad faith.
10. The trial court held in favor of the heirs of Cari-an citing that the sale between the
Cari-ans and Escanlar is void as it was not approved by the probate court which
was required in the deed of sale.
11. CA affirmed the same and cited that the questioned deed of sale of rights is a contract
to sell because it shall become effective only upon approval by the probate court and
upon full payment of the purchase price.
ISSUE: WON the non-happening of a condition affects the validity of the contract itself
HELD: No, the non-happening of a condition only affects the effectivity and not the
validity of the contract.
Under Art 1318 Civil Code, the essential requisites of a contract are: consent of the
contracting parties; object certain which is the subject matter of the contract and
cause of the obligation which is established. Absent one of the above, no
contract can arise. Conversely, where all are present, the result is a valid
contract. However, some parties introduce various kinds of restrictions or
modalities, the lack of which will not, however, affect the validity of the contract.
In the instant case, the Deed of Sale, complying as it does with the essential
requisites, is a valid one. However, it did not bear the stamp of approval of the
court. The contracts validity was not affected for in the words of the stipulation, this
Contract of Sale of rights, interests and participations shall become effective only upon
the approval by the Honorable Court In other words, only the effectivity and not
the validity of the contract is affected.
CONTRACT TO SELL VS. CONTRACT TO SALE
In contracts to sell, ownership is retained by the seller and is not to pass until the full
payment of the price. Such payment is a positive suspensive condition, the failure of
which is not a breach of contract but simply an event that prevented the obligation of the
vendor to convey title from acquiring binding force. To illustrate, although a deed of
conditional sale is denominated as such, absent a proviso that title to the property sold
is reserved in the vendor until full payment of the purchase price nor a stipulation giving
the vendor the right to unilaterally rescind the contract the moment the vendee fails to
pay within a fixed period, by its nature, it shall be declared a deed of absolute sale.
In a contract of sale, the non-payment of the price is a resolutory condition which
extinguishes the transaction that, for a time, existed and discharges the obligations
created thereunder. The remedy of an unpaid seller in a contract of sale is to seek either
specific performance or rescission.
In the case at bar, the sale of rights, interests and participation as to portion
pro indiviso of the 2 subject lots is a contract of sale for the reasons that (1) the
sellers did not reserve unto themselves the ownership of the property until full
payment of the unpaid balanceof P225,000.00; (2) there is no stipulation giving
the sellers the right to unilaterally rescind the contract the moment the buyer fails
to pay within the fixed period.
NEED OF PROBATE COURTS APPROVAL EXISTS WHERE SPECIFIC
PROPERTIES OF THE ESTATE ARE SOLD AND NOT WHEN IDEAL AND
INDIVISIBLE SHARES OF AN HEIR ARE DISPOSED OF
The need for approval by the probate court exists only where specific properties of the
estate are sold and not when only ideal and indivisible shares of an heir are disposed
of. In Dillena v. Court of Appeals, the Court declared that it is within the jurisdiction of
the probate court to approve the sale of properties of a deceased person by his
prospective heirs before final adjudication. The probate courts approval is necessary for
the validity of any disposition of the decedents estate. However, reference to judicial
approval cannot adversely affect the substantive rights of the heirs to dispose of their
ideal share in the co-heirship and/or co-ownership among the heirs. It must be recalled
that during the period of indivision of a decedents estate, each heir, being a co-owner,
has full ownership of his part and may therefore alienate it. But the effect of the
alienation with respect to the co-owners shall be limited to the portion which may be
allotted to him in the division upon the termination of the co-ownership.
CONTRACTUAL STIPULATIONS CONSIDERED LAW BETWEEN PARTIES;
EXCEPTION: CONTEMPORANEOUS ACTS OF PARTIES
As a general rule, the pertinent contractual stipulation (requiring court approval) should
be considered as the law between the parties. However, the presence of two factors
militates against this conclusion: (1) the evident intention of the parties appears to
be contrary to the mandatory character of said stipulation. Whoever crafted the
document of conveyance, must have been of the belief that the controversial
stipulation was a legal requirement for the validity of the sale. But the
contemporaneous and subsequent acts of the parties reveal that the original objective
of the parties was to give effect to the deed of sale even without court approval.
Receipt and acceptance of the numerous installments on the balance of the purchase
price by the Cari-ans, although the period to pay the balance of the purchase price
expired in May 1979, and leaving Escanlar and Holgado in possession of Lots 1616 and
1617 reveal their intention to effect the mutual transmission of rights and obligations.
The Cari-ans did not seek judicial relief until late 1982 or three years later; (2) the
requisite approval was virtually rendered impossible by the Cari-ans because
they opposed the motion for approval of the sale filed by Escanlar and Holgado,
and sued the latter for the cancellation of that sale. Having provided the obstacle
and the justification for the stipulated approval not to be granted, the Cari-ans should
not be allowed to cancel their first transaction with Escanlar and Holgado because of
lack of approval by the probate court, the lack of which is of their own making.
void. SEC recommeded that the a new by-laws be approved and a new election be conducted upon the
approval of the by-laws. However, the SEC recommendation was not heeded.
In 1989, the Carpizo group passed a Board Resolution authorizing the sale of the land to Iglesia Ni Cristo
("INC"), and a Deed of Sale was eventually executed.
In 1991, the Tamano Group filed a petition before the SEC questioning the sale.
Meanwhile, INC filed a suit for specific performance before RTC Branch 81 against the Carpizo group.
INC also moved to compel a certain Leticia Ligon (who is apparently the mortgagee of the lot) to
surrender the title.
The Tamano group sought to intervene, but the intervention was denied despite being informed of the
pending SEC case. In 1992, the Court subsequently ruled that the INC as the rightful owner of the land,
and ordered Ligon to surrender the titles for annotation. Ligon appealed to CA and SC, but her appeals
were denied.
In 1993, the SEC ruled that the sale was null and void . On appeal CA reversed the SEC ruling.
MAIN ISSUE: W/N the sale between the Carpizo group and INC is null and void.
RULING: YES.
Since the SEC has declared the Carpizo group as a void Board of Trustees, the sale it entered into with
INC is likewise void. Without a valid consent of a contracting party, there can be no valid contract.
In this case, the IDP, never gave its consent, through a legitimate Board of Trustees, to the disputed Deed
of Absolute Sale executed in favor of INC. Therefore, this is a case not only of vitiated consent, but one
where consent on the part of one of the supposed contracting parties is totally wanting. Ineluctably, the
subject sale is void and produces no effect whatsoever.
Further, the Carpizo group failed to comply with Section 40 of the Corporation Code, which provides that:
" ... a corporation may, by a majority vote of its board of directors or trustees, sell, lease, exchange,
mortgage, pledge or otherwise dispose of all or substantially all of its property and assets... when
authorized by the vote of the stockholders representing at least two-thirds (2/3) of the outstanding capital
stock; or in case of non-stock corporation, by the vote of at least two-thirds (2/3) of the members, in a
stockholders' or members' meeting duly called for the purpose...."
The subject lot constitutes the only property of IDP. Hence, its sale to a third-party is a sale or disposition
of all the corporate property and assets of IDP. For the sale to be valid, the majority vote of the legitimate
Board of Trustees, concurred in by the vote of at least 2/3 of the bona fide members of the corporation
should have been obtained. These twin requirements were not met in the case at bar.
ANCILLARY ISSUE: W/N The Ligon ruling constitutes res judicata.
RULING: NO.
Section 49(b), Rule 39 enunciates the first concept of res judicata known as "bar by prior judgment,"
whereas, Section 49(c), Rule 39 is referred to as "conclusiveness of judgment."
There is "bar by former judgment" when, between the first case where the judgment was rendered, and
the second case where such judgment is invoked, there is identity of parties, subject matter and cause of
action. When the three identities are present, the judgment on the merits rendered in the first constitutes
an absolute bar to the subsequent action. But where between the first case wherein judgment is rendered
and the second case wherein such judgment is invoked, there is only identity of parties but there is no
identity of cause of action, the judgment is conclusive in the second case, only as to those matters
actually and directly controverted and determined, and not as to matters merely involved therein. This is
what is termed "conclusiveness of judgment."
Neither applies to the case at bar. There is no "bar by former judgment" since while there may be identity
of subject matter (IDP property) in both cases, there is no identity of parties. The principal parties in the
first case were Ligon and the Iglesia Ni Cristo. The IDP can not be considered essentially a formal party
thereto for the simple reason that it was not duly represented by a legitimate Board of Trustees.
Res Judicata in the form of "conclusiveness of judgment" cannot likewise apply for the reason that the
primary issue in the first case is the possession of the titles, and not the sale of the land, as in this case.
FACTS:
Petitioner is a professional interior designer. In November 1986, her friend
Rosario Pardo asked her to talk to Nida Lopez, who was manager of the COMBANK
Ermita Branch for they were planning to renovate the branch offices. Even prior to
November 1986, petitioner and Nida Lopez knew each other because of Rosario
Pardo, the latters sister. During their meeting, petitioner was hesitant to accept the
job because of her many out of town commitments, and also considering that Ms.
Lopez was asking that the designs be submitted by December 1986, which was
such a short notice. Ms. Lopez insisted, however, because she really wanted
petitioner to do the design for renovation. Petitioner acceded to the request. Ms.
Lopez assured her that she would be compensated for her services. Petitioner even
told Ms. Lopez that her professional fee was P10,000.00, to which Ms. Lopez
acceded.
During the November 1986 meeting between petitioner and Ms. Lopez, there
were discussions as to what was to be renovated. Ms. Lopez again assured
petitioner that the bank would pay her fees. After a few days, petitioner requested
for the blueprint of the building so that the proper design, plans and specifications
could be given to Ms. Lopez in time for the board meeting in December 1986.
Petitioner then asked her draftsman Jackie Barcelon to go to the jobsite to make the
proper measurements using the blue print. Petitioner also did her research on the
designs and individual drawings of what the bank wanted. Petitioner hired Engineer
Ortanez to make the electrical layout, architects Frison Cruz and De Mesa to do the
drafting. For the services rendered by these individuals, petitioner paid their
professional fees. Petitioner also contacted the suppliers of the wallpaper and the
sash makers for their quotation. So come December 1986, the lay out and the
design were submitted to Ms. Lopez. She even told petitioner that she liked the
designs.
Petitioner, through her lawyers, who wrote Ms. Lopez, demanding payment
for her professional fees in the amount of P10,000.00 which Ms. Lopez ignored. The
lawyers wrote Ms. Lopez once again demanding the return of the blueprint copies
petitioner submitted which Ms. Lopez refused to return. The petitioner then filed at
the trial court a complaint against COMBANK and Ms. Lopez for collection of
professional fees and damages.
The trial court rendered judgment in favor of plaintiff. On appeal, the Court of
Appeals reversed the decision. Hence, this petition.
ISSUE:
Whether or not the Court of Appeals erred in ruling that there was no contract
between petitioner and respondents, in the absence of the element of consent.
RULING:
A contract is a meeting of the minds between two persons whereby one binds
himself to give something or to render some service to bind himself to give
something to render some service to another for consideration. There is no contract
unless the following requisites concur: 1. Consent of the contracting parties; 2.
Object certain which is the subject matter of the contract; and 3. Cause of the
obligation which is established.
In the case at bar, there was a perfected oral contract. When Ms. Lopez and
petitioner met in November 1986, and discussed the details of the work, the first
stage of the contract commenced. When they agreed to the payment of the
P10,000.00 as professional fees of petitioner and that she should give the designs
before the December 1986 board meeting of the bank, the second stage of the
contract proceeded, and when finally petitioner gave the designs to Ms. Lopez, the
contract was consummated. Petitioner believed that once she submitted the
designs she would be paid her professional fees. Ms. Lopez assured petitioner that
she would be paid.
board of the bank. Thus, the designs were in fact useful to Ms. Lopez for she did not
appear to the board without any designs at the time of the deadline set by the
board.
Decision reversed and set aside. Decision of the trial court affirmed.