BRICKTOWN DEVELOPMENT CORP. and MARIANO Z. VERALDE VS.

AMOR TIERRA
DEVELOPMENT CORPORATION and the HON. COURT OF APPEALS
G.R. No. 112182
December 12, 1994
239 SCRA 127

FACTS: Bricktown Development Corporation, represented by its President and co-petitioner Mariano
Z. Velarde, executed two Contracts to Sell in favor of Amor Tierra Development Corporation,
represented in these acts by its Vice-President, Moises G. Petilla, covering a total of 96 residential lots
at the Multinational Village Subdivision, La Huerta, Paraaque, Metro Manila.

The total price of P21,639,875.00 was stipulated to be paid by private respondent in such amounts
and maturity dates, as follows: P2,200,000.00 on 31 March 1981; P3,209,968.75 on 30 June 1981;
P4,729,906.25 on 31 December 1981; and the balance of P11,500,000.00 to be paid by means of an
assumption by private respondent of petitioner corporation's mortgage liability to the Philippine
Savings Bank or, alternately, to be made payable in cash. On date, March 31, 1981, the parties
executed a Supplemental Agreement, providing that private respondent would additionally pay to
petitioner corporation the amounts of P55,364.68, or 21% interest on the balance of down payment
for the period from 31 March to 30 June 1981, and of P390,369.37 representing interest paid by
petitioner corporation to the Philippine Savings Bank in updating the bank loan for the period from 01
February to 31 March 1981.

Private respondent was only able to pay petitioner corporation the sum of P1,334,443.21. However,
the parties continued to negotiate for a possible modification of their agreement, but nothing conclusive
happened. And on October 12, 1981, petitioners counsel sent private respondent a Notice of
Cancellation of Contract because of the latters failure to pay the agreed amount.

Several months later, private respondents counsel, demanded the refund of private respondent's
various payments to petitioner corporation, allegedly "amounting to P2,455,497.71," with interest
within fifteen days from receipt of said letter, or, in lieu of a cash payment, to assign to private
respondent an equivalent number of unencumbered lots at the same price fixed in the contracts. When
the demand was not heeded, Amor Tierra filed an action with the court a quo which rendered a decion
in its favor. The decision of the lower court was affirmed in toto by the Court of Appeals. Hence, this
petition.

ISSUE:
1. Whether or not the contract was properly rescinded.
2. Whether or not Bricktown properly forfeited the payments of Amor Tierra.
RULING: The contract between Bricktown and Amor Tierra was validly rescinded because of the
failure of the latter to pay the agreed amounts stipulated in the contract on the proper date even after
the sixty-days grace period. Furthermore, the records showed that private respondent corporation paid
less than the amount agreed upon. The Supreme Court also added that such cancellation must be
respected. It may also be noteworthy to add that in a contract to sell, the non-payment of the purchase
price can prevent the obligation to convey title from acquiring any obligatory force.

On the second issue, the Supreme Court ruled that since the private respondent did not actually
possessed the property under the contract, the petitioner is then ordered to return to private
respondent the amount remitted. However, to adjudge any interest payment by petitioners on the
amount to be thus refunded, private respondent should not be allowed to totally free itself from its own
breach.
EDCA PUBLISHING v. SANTOS
FACTS:
The movable property in this case consists of books, which were bought from EDCA by an
impostor who sold it to SANTOS. EDCA Publishing sold to a person identifying himself as
Professor Jose Cruz who placed an order by telephone with the former for 406 books, payable on
delivery. EDCA prepared the corresponding invoice and delivered the books as ordered, for which
Cruz issued a personal check. On October 7, 1981, Cruz then sold the 120 of the books to Leonor
Santos who asked for verification, and was then showed the invoice for the books.
Meanwhile, EDCA having become suspicious over a second order placed by Cruz even before
clearing of his first check, made inquiries with the De la Salle College where he had claimed to be
a dean and was informed that there was no such person in its employ. Further verification revealed
that Cruz had no more account or deposit with the Philippine Amanah Bank, against which he had
drawn the payment check. EDCA then went to the police, which set a trap and arrested Cruz.
Investigation disclosed his real name as Tomas de la Pea and his sale of 120 of the books he had
ordered from EDCA to the private respondents.

ISSUE:
Whether or not EDCA PUBLISHINGAND DISTRIBUTING CORP was unlawfully deprived of
the property?
HELD:
NO
Santos was a good faith buyer after taking steps to verify the identity of the seller. When she was
showed the invoice, she reasonably believed that he was a legitimate seller. With regard to
unlawful deprivation, EDCA was not unlawfully deprived of the property by mere failure of
consideration. There was already a perfected contract of sale. Proof was even substantiated when
EDCA gave the invoice as proof of payment upon delivery of the books. This did not amount to
unlawful taking, because by the delivery of EDCA to Cruz, ownership of the books already
transferred to him.
It would certainly be unfair now to make the SANTOSES bear the prejudice sustained by EDCA
as a result of its own negligence. We cannot see the justice in transferring EDCA's loss to the
SANTOSES who had acted in good faith, and with proper care, when they bought the books from
Cruz.