Philippine Supreme Court Jurisprudence


Philippine Supreme Court Jurisprudence > Year 1989 > July 1989 Decisions > G.R. No. 85595 July 5, 1989 - MARIA ARCIAGA VDA. DE UMALI, ET AL. v. COURT OF APPEALS, ET AL.:




PHILIPPINE SUPREME COURT DECISIONS

FIRST DIVISION

[G.R. No. 85595. July 5, 1989.]

MARIA ARCIAGA VDA. DE UMALI & HEIRS OF THE LATE GREGORIO UMALI, Petitioners, v. THE HONORABLE COURT OF APPEALS & METEOR COMPANY, INC., Respondents.

Agustin V. Velante, for Petitioners.

Zosimo de Mesa for Private Respondents.


SYLLABUS


1. CIVIL LAW; OBLIGATIONS AND CONTRACTS; FAILURE TO COMPLY WITH AN OBLIGATION WARRANTS RESCISSION OF CONTRACT. — Meteor has no one to blame but itself for its failure to comply with its obligation under paragraph 2(b) of the "Kasunduan" to secure payment of the balance of the purchase price within 120 days after the termination of Civil Case No. 8973 in favor of the Umalis. Payment of the first 25% of the price within the time frame agreed upon was a condition sine qua non for the transfer of the property by the Umalis to Meteor under a Deed of Sale with Mortgage. Since Meteor failed to pay within the stipulated period, the Umalis were released from the bargain. They are entitled to the rescission of the "Kasunduan" with respect to the remaining unsold lots covered by their TCT Nos. 13517 and 13616.


D E C I S I O N


GRIÑO-AQUINO, J.:


The petitioners pray this Court to overturn the decision dated September 13, 1988 of the Court of Appeals in CA-G.R. CV No. 12681, entitled "Meteor Company. Inc., plaintiff-appellee v. Sps. Gregorio Umali and Maria Arciaga, defendants-appellants," affirming in toto the decision dated January 27, 1986 of the Regional Trial Court of Rizal in Civil Case No. 3705 which ordered the parties to comply with the provisions of the contract to sell ("Kasunduan nang Pagbibilihan") dated December 21, 1967 which the late Gregorio Umali and his wife, petitioner Maria Arciaga Vda. de Umali, made in favor of the private respondent, Meteor Company, Inc., a real estate developer.

The dispositive part of the trial court’s decision dated January 27, 1986 reads as follows:jgc:chanrobles.com.ph

"WHEREFORE, judgment is hereby rendered ordering the defendants to execute, upon payment by the plaintiff to them of the amount equivalent to 25% of the total purchase price agreed upon in the ‘KASUNDUAN NANG PAGBIBILIHAN’ (Exh. A) dated December 21, 1967, the Deed of Sale with Mortgage or ‘BILIHAN NA MAY SANLA’ adverted to in paragraph 3 of Exhibit A, covering the parcels of land described in Transfer Certificates of Title Nos. 13517 and 13616 of the Registry of Deeds of Rizal, under the terms, conditions and stipulations agreed upon by the plaintiff and the spouses Gregorio Umali and Maria Arciaga as contained and delineated in Exhibit A.

"The defendants are further ordered to pay, jointly and severally, to the plaintiff the amount of P5,000.00 as attorney’s fees, aside from costs of suit." (pp. 36-37, Rollo.)

The spouses Gregorio Umali and Maria Arciaga were the registered owners of three (3) parcels of land with a total area of four (4) hectares more or less, covered by TCTs Nos. 13517, 13616, and 13224 of the Rizal Registry. These parcels of land adjoin a subdivision of Meteor Company, Inc.

On December 21, 1967, the Umali spouses signed a "Kasunduan nang Pagbibilihan" (Exh. A) in favor of Meteor Company, Inc. agreeing to sell those lots to Meteor for the price of P10 per square meter, deducting the portion subject of a right-of-way which they had earlier sold to Meteor for the construction of an access road to its adjoining subdivision. Meteor made a downpayment of P5,000.00. The balance of the price would be paid in four (4) installments after the termination of Civil Case No. 8973 which was filed by Eligio Hernandez against the Umalis in the Court of First Instance of Rizal involving the parcels of land subject of the "Kasunduan." Paragraphs 2(b), 3 and 4 of the agreement which are crucial to this case provided thus:jgc:chanrobles.com.ph

"2. . . .

"‘b) Isang daan at dalawangpung araw (120) simula sa malinis, matapos at malagay na sa tahimik ang mga lupang nabanggit dahil sa ang asuntong nabanggit at pasyahan na nang pangkatapusan (final) nang Hukuman para sa mga NAGBIBILE, ang BUMIBILE ay muling magbabayad sa NAGBIBILE nang halagang dalawangput limang porciento (25%) nang Kabuuang halaga nang lupa, ibabawas ang P5,000.00 na ibayad na, at patuloy ang pagbabayad nang BUMIBILE sa NAGBIBILE sa tuwing ika-anim (6) na buwan, sa halagang 25% nang kabuuan halagang nabanggit hanggang sa matapusan ito.

"3. Na sa pagbayad nang katimbang nang 25% sa unang pagkakataon nabanggit sa itaas, ang NAGBIBILE at BUMIBILE ay lalagda nang BILIHAN NA MAY SANLA (Deed of Sale with Mortgage), na ililipat ang lupa sa BUMIBILE at ito naman ay ipananagot ang lupa din ito sa NAGBIBILE sa utang natitira;

"4. Na ang BUMIBILE ay maaring paghatihatiin ang lupa at gawin nang isang subdivision upang ipagbile sa publico, at bagamat ito’y nakasangla sa NAGBIBILE, ay sa tuwing magbabayad itong BUMIBILE ay halagang P10.00 bawat metro cuadrado ay ilalabas ang sangla ang loteng piliin na BUMIBILE (Partial Release of Mortgage). Ang lahat na naibayad nang BUMIBILE ay pagbabatayan sa paglabas nang mga lote sa sangla." (pp. 40-41, Rollo.)

Subsequently, it was discovered that the third parcel of land covered by TCT No. 13224 was not after all involved in Civil Case No. 8973, so the Umalis deeded the same to Meteor for the sum of P12,245. It is now titled in the name of Meteor.

On October 3, 1969, the Umalis signed a "Pagpapatibay" acknowledging and confirming the transactions with Meteor.

On November 22, 1976, Meteor’s counsel wrote a letter to the Umalis reminding them to "inform us as to what is now the status of said case (Civil Case No. 8973) so that in the event that the case is terminated in your favor we have to implement the agreement mentioned." (pp. 16-17, Rollo.) The Umalis received the letter on November 30, 1976, but they did not answer it.

On April 9, 1980, Meteor sent another letter on the same subject and affirming that "soon as the case is terminated in your favor, we will immediately comply with the obligation incumbent upon the Meteor Company, Inc." (p. 17, Rollo.) The Umalis rejected personal service of the letter on them, so it was sent by registered mail and received for them by Natividad Umali. Again they did not respond.

The ominous silence of the Umalis should have put Meteor on guard that the Umalis had lost interest in consummating the "Kasunduan." But Meteor inexplicably took no steps to find out for itself the status of Civil Case No. 8973 on which depended the consummation of their deal with the Umalis.

Ultimately, Civil Case No. 8973 was resolved in favor of the Umalis by the Court of Appeals in its decision of May 16, 1980 which became final on June 13, 1980.

On November 12, 1980, one month after the 120-day period had expired, Meteor discovered that Civil Case No. 8973 had already been decided by the Court of Appeals in favor of the Umalis on May 16, 1980 (CA-G.R. No. 50909-R) so, Meteor hastily advised the Umalis thus:jgc:chanrobles.com.ph

"Supplementing our letter to you dated April 5, 1980 which you received on April 10, 1980, we have followed the progress of the case involving the parcels of land entitled Eligio Fernandez, Plaintiff- Appellant versus Gregorio Umali and Maria Arciaga, Defendants-Appellees in the Court of Appeals which appears to have been decided since May 16, 1980, affirming your rights as owners thereof.

"In accordance with the agreement (Kasunduan ng Pagbibilihan) dated December 21, 1967 which you executed for consideration with my client Meteor Company, Inc., you are supposed to sell to them the properties mentioned therein under the terms and conditions set forth in said agreement soon as the case is terminated. In fact, one of the parcels of land which was not litigated covered by TCT No. 13Z24 has been conveyed by you in favor of same client.

"In the event, that the records of the case have already been remanded to the court of origin, we demand that you immediately notify us so we can pay you the equivalent 25% of the balance in accordance with the agreement.

"Your refusal to comply to the above will leave us no other recourse but to bring this matter to the proper court and hold you responsible for whatever damages my clients may incur in the enforcement of their rights under the agreement." (pp. 46-47, Rollo.)

As might be expected, the Umalis ignored said letter.

Meteor filed an action for specific performance with damages against the Umali spouses (later Gregorio Umali, upon his death, was substituted by his children and grandchildren) which was docketed as Civil Case No. 3705 in the Regional Trial Court of Rizal, Branch 148, in Makati. The Umalis argued that the buyer’s failure to comply with paragraph 2(b) of their agreement had released them from its bind.

As previously stated, the decision of the trial court upholding the "Kasunduan" was affirmed by the Court of Appeals, hence, this petition for review by the widow Maria Arciaga Vda. de Umali and her children, raising the following issues:chanrob1es virtual 1aw library

1. Whether or not private respondent has complied with its obligation under Paragraph 2(b) of the "Kasunduan ng Pagbibilihan" or Contract to Sell (Exh. A);

2. Whether or not private respondent’s three (3) letters (Exhs. D, F and G) may be considered as its compliance with its obligation under Paragraph 2(b) of the "Kasunduan" (Exh. A); and

3. Whether or not private respondent has any cause of action for specific performance against petitioners.

These issues boil down to the legal issue of the proper interpretation of paragraphs 2(b), 3 and 4 of the "Kasunduan." That "Kasunduan" which was prepared by Meteor itself, should be strictly construed against it.

The Court of Appeals held that "the fault lies . . . with appellants" (Umalis) for "the failure of appellee (Meteor) to pay the first 25% of the purchase price within 120 days from the finality of the judgment mentioned in paragraph 2(6) [should be 2(b)] of the contract" because "it behooves . . . for the sellers to notify the buyer when the case against them was finally terminated by the rendition of a judgment in their favor." (p. 49, Rollo.)

That ruling is erroneous. There is no stipulation whatsoever in the "Kasunduan" obligating the sellers to notify the buyer when Civil Case No. 8973 (or CA-G.R. No. 50909-R) will have been finally terminated by a final judgment in their favor. Meteor was fully aware of the pendency of the case in the Court of Appeals, hence, it could have followed up (as it subsequently did, but too late) the status of the case instead of relying on the illiterate spouses to inform it. It has no one to blame but itself for its failure to comply with its obligation under paragraph 2(b) of the "Kasunduan."cralaw virtua1aw library

Admittedly the judgment of the Court of Appeals in CA-G.R. No. 50909-R became final on June 13, 1980. That final judgment cleared and quieted ("malinis, matapos, at malagay na sa tahimik") (p. 40, Rollo) the title of the Umalis to the parcels of land in question. Nothing else remained to be done but to count 120 days thereafter (up to October 11, 1980) within which the buyer should pay 25% of the purchase price of the property which it had contracted to buy from the Umalis.

It is noteworthy that under paragraphs 2(b), 3 and 4 of the "Kasunduan" earlier quoted, payment of the first 25% of the purchase price within 120 days after the termination of Civil Case No. 8973 in favor of the Umalis should precede the execution of a Deed of Sale with Mortgage by the parties to secure payment of the balance of the purchase price to the Umalis. Paragraph 3 provides thus:jgc:chanrobles.com.ph

"3. Na sa pagbabayad nang katimbang nang 25% sa unang pagkakataon nabanggit sa itaas, ang NAGBIBILE at BUMIBILE ay lalagda nang BILIHAN NA MAY SANLA (Deed of Sale with Mortgage) . . ." (Emphasis supplied; p. 40, Rollo.)

Clearly, payment of the first 25% of the price within the time frame agreed upon was a condition sine qua non for the transfer of the property by the Umalis to Meteor under a Deed of Sale with Mortgage. Since Meteor failed to pay within the stipulated period, the Umalis were released from the bargain. They are entitled to the rescission of the "Kasunduan" with respect to the remaining unsold lots covered by their TCT Nos. 13517 and 13616. Accordingly, they should return to Meteor the sum of P5,000 which they received as downpayment for those lots (Art. 1191, Civil Code; Newton Jison, Et. Al. v. CA, G.R. No. L-45349, August 15, 1988; Gaite v. Fonacier, 2 SCRA 830).

WHEREFORE, the decision of the Court of Appeals in CA-G.R. CV No. 12681 is hereby reversed and set aside. The complaint for specific performance with damages filed by Meteor Company, Inc. against the petitioners (Civil Case No. 3705, Regional Trial Court of Rizal) is dismissed. The "Kasunduan nang Pagbibilihan" is declared rescinded and the petitioners are ordered to return the downpayment of Five Thousand Pesos (P5,000) which they received from the private respondent on December 21,1967 with legal interest as of that date until full restitution shall have been made. Costs against the private Respondent.

SO ORDERED.

Narvasa, Cruz, Gancayco and Medialdea, JJ., concur.




Back to Home | Back to Main




















chanrobles.com





ChanRobles On-Line Bar Review

ChanRobles Internet Bar Review : www.chanroblesbar.com

ChanRobles MCLE On-line

ChanRobles Lawnet Inc. - ChanRobles MCLE On-line : www.chanroblesmcleonline.com






July-1989 Jurisprudence                 

  • G.R. No. 42449 July 5, 1989 - C & C COMMERCIAL CORPORATION, ET AL. v. PHILIPPINE NATIONAL BANK, ET AL.

  • G.R. No. 45322 July 5, 1989 - GOVERNMENT SERVICE INSURANCE SYSTEM v. CFI OF ILOILO BRANCH III, ILOILO CITY, ET AL.

  • G.R. No. 58494 July 5, 1989 - PHILIPPINE NATIONAL OIL COMPANY-ENERGY DEVELOPMENT CORP. v. VICENTE T. LEOGARDO, ET AL.

  • G.R. No. 59075 July 5, 1989 - MERCEDES P. GUASCH v. COURT OF APPEALS, ET AL.

  • G.R. Nos. 59241-44 July 5, 1989 - PEDRO TANDOC, ET AL. v. RICARDO P. RESULTAN

  • G.R. No. 69210 July 5, 1989 - PEOPLE OF THE PHIL. v. GUILLERMO LAYUSO

  • G.R. No. 77827 July 5, 1989 - MACARIO D. ZAPATA v. NATIONAL LABOR RELATIONS COMMISSION, ET AL.

  • G.R. No. 78011 July 5, 1989 - RURAL BANK OF SARIAYA, INC. v. BENJAMIN YACON, ET AL.

  • G.R. No. 78282 July 5, 1989 - BRIGIDO RAMOS, ET AL. v. INTERMEDIATE APPELLATE COURT, ET AL.

  • G.R. No. 78585 July 5, 1989 - JOSE ANTONIO MAPA v. JOKER ARROYO, ET AL.

  • G.R. No. 80141 July 5, 1989 - SAN MIGUEL CORPORATION EMPLOYEES UNION, ET AL. v. PURA FERRER CALLEJA, ET AL.

  • G.R. No. 80500 July 5, 1989 - ROBUSTA AGRO MARINE PRODUCTS, INC., ET AL. v. BALTAZAR GOROMBALEM, ET AL.

  • G.R. No. 80544 July 5, 1989 - ROSEMARIE M. LEE v. JOSEFINA CRUZ RODIL, ET AL.

  • G.R. No. 82113 July 5, 1989 - PEOPLE OF THE PHIL. v. ROMULO CAÑETE

  • G.R. No. 82737 July 5, 1989 - PEOPLE OF THE PHIL. v. AUREO G. ROJO

  • G.R. No. 84975 July 5, 1989 - ZENAIDA GALINDEZ, ET AL. v. RURAL BANK OF LLANERA, INC., ET AL.

  • G.R. No. 85595 July 5, 1989 - MARIA ARCIAGA VDA. DE UMALI, ET AL. v. COURT OF APPEALS, ET AL.

  • G.R. Nos. 28508-9 July 7, 1989 - ESSO STANDARD EASTERN, INC. v. COMMISSIONER OF INTERNAL REVENUE

  • G.R. No. 70037 July 7, 1989 - PEOPLE OF THE PHIL. v. TEOFISTA BRAGAT VDA. DE CABANGAHAN

  • G.R. No. 70403 July 7, 1989 - SANTIAGO SYJUCO, INC. v. JOSE P. CASTRO, ET AL.

  • G.R. No. 84362 July 7, 1989 - PEOPLE OF THE PHIL. v. FERNANDO PEREZ

  • G.R. No. 85215 July 7, 1989 - PEOPLE OF THE PHIL. v. RUBEN AYSON

  • A.C. No. 1892 July 7, 1989 - LUIS V. ARTIAGA, JR. v. ENRIQUE C. VILLANUEVA

  • G.R. Nos. 82405-06 July 10, 1989 - BANQUE DE L’INDOCHINE ET DE SUEZ, ET AL. v. RAMON AM. TORRES

  • G.R. No. 83551 July 11, 1989 - RODOLFO B. ALBANO v. RAINERIO O. REYES, ET AL.

  • G.R. No. 78763 July 12, 1989 - MANILA ELECTRIC COMPANY v. NATIONAL LABOR RELATIONS COMMISSION, ET AL.

  • G.R. No. 84113 July 12, 1989 - FEDERICO N. TRISTE, JR. v. EXECUTIVE SECRETARY, ET AL.

  • A.M. No. RTJ-87-141 July 12, 1989 - ASSOCIATION OF COURT EMPLOYEES OF PANABO, DAVAO v. MARIANO C. TUPAS

  • G.R. No. 47258 July 13, 1989 - ANTONIO R. BANZON, ET AL. v. COURT OF APPEALS, ET AL.

  • G.R. No. 72764 July 13, 1989 - STATE INVESTMENT HOUSE v. INTERMEDIATE APPELLATE COURT, ET AL.

  • G.R. No. 78596 July 13, 1989 - IN RE: LUCIEN TRAN VAN NGHIA v. RAMON J. LIWAG

  • G.R. No. 78742 July 14, 1989 - ASSOCIATION OF SMALL LANDOWNERS IN THE PHILIPPINES, INC., ET AL. v. SEC. OF AGRARIAN REFORM

  • G.R. No. 72827 July 18, 1989 - LUCIA EUROPA v. HUNTER GARMENTS MFG. (PHIL.) INC., ET AL.

  • G.R. No. 74170 July 18, 1989 - REPUBLIC OF THE PHIL. v. INTERMEDIATE APPELLATE COURT, ET AL.

  • G.R. No. 43886 July 19, 1989 - IRENE DINO v. AUGUSTO L. VALENCIA

  • G.R. No. 54216 July 19, 1989 - PHILIPPINE AMERICAN LIFE INSURANCE COMPANY v. GREGORIO G. PINEDA

  • G.R. No. 64935 July 19, 1989 - PEOPLE OF THE PHIL. v. CHARLIE R. REPE, ET AL.

  • G.R. No. 71499 July 19, 1989 - PHILIPPINE LONG DISTANCE TELEPHONE COMPANY v. NATIONAL LABOR RELATIONS COMMISSION, ET AL.

  • G.R. No. 74658 July 19, 1989 - PEOPLE OF THE PHIL. v. EMETERIO VELASCO, ET AL.

  • G.R. No. 75704 July 19, 1989 - RUBBERWORLD (PHILS.), INC., ET AL. v. NATIONAL LABOR RELATIONS COMMISSION

  • G.R. No. 77133 July 19, 1989 - MARCIANO BANDOY, ET AL. v. COURT OF APPEALS, ET AL.

  • G.R. No. 77266 July 19, 1989 - ARTHUR PAJUNAR, ET AL. v. COURT OF APPEALS, ET AL.

  • G.R. No. 78755 July 19, 1989 - GOLDEN FARMS, INC. v. PURA FERRER-CALLEJA, ET AL.

  • G.R. No. 79913 July 19, 1989 - EDUARDO TALLA v. NATIONAL LABOR RELATIONS COMMISSION, ET AL.

  • G.R. No. 81269 July 19, 1989 - LIBERTY COMMERCIAL CENTER, INC. v. PURA FERRER CALLEJA, ET AL.

  • G.R. No. 82260 July 19, 1989 - ASSOCIATED LABOR UNIONS v. PURA FERRER-CALLEJA, ET AL.

  • G.R. No. 52081 July 21, 1989 - LUCIANA M. DE ALINO, ET AL. v. RAFAEL T. MENDOZA, ET AL.

  • G.R. No. 54243 July 21, 1989 - INTERNATIONAL SCHOOL, INC. v. MINISTER OF LABOR AND EMPLOYMENT, ET AL.

  • G.R. No. 56481 July 21, 1989 - ANTONIO SORIAO v. COURT OF APPEALS, ET AL.

  • G.R. No. 59805 July 21, 1989 - LEONILA J. LICUANAN v. RICARDO D. DIAZ, ET AL.

  • G.R. No. 68786 July 21, 1989 - DEVELOPMENT BANK OF THE PHILIPPINES v. NATIONAL LABOR RELATIONS COMMISSION, ET AL.

  • G.R. No. 73678 July 21, 1989 - GUILLERMO CORTES, ET AL. v. INTERMEDIATE APPELLATE COURT, ET AL.

  • G.R. No. 47981 July 24, 1989 - JUAN V. SABINOSA v. COURT OF APPEALS, ET AL.

  • G.R. No. 72282 July 24, 1989 - ANACLETO DE JESUS v. INTERMEDIATE APPELLATE COURT, ET AL.

  • G.R. Nos. 86587-93 July 25, 1989 - LOLITO G. APARICIO v. ERMELINDO C. ANDAL

  • G.R. Nos. 74226-27 July 27, 1989 - PEOPLE OF THE PHIL. v. MIZPAH R. REYES

  • G.R. No. 81817 July 27, 1989 - PEOPLE OF THE PHIL. v. BERNARD ALDANA

  • G.R. No. 82489 July 27, 1989 - UNIVERSAL ROBINA CORPORATION v. NATIONAL LABOR RELATIONS COMMISSION, ET AL.

  • G.R. No. 80479 July 28, 1989 - AGUSTINA LIQUETTE TAN v. COURT OF APPEALS, ET AL.

  • G.R. No. 84197 July 28, 1989 - PIONEER INSURANCE & SURETY CORPORATION v. COURT OF APPEALS, ET AL.

  • G.R. No. 85279 July 28, 1989 - SOCIAL SECURITY SYSTEM EMPLOYEES ASSOCIATION, ET AL. v. COURT OF APPEALS, ET AL.

  • G.R. No. 85285 July 28, 1989 - DANVILLE MARITIME, INC. v. COMMISSION ON AUDIT

  • G.R. No. 47924 July 31, 1989 - MARCIANO ASUNCION v. GREGORIO G. PINEDA

  • G.R. No. 67173 July 31, 1989 - PEOPLE OF THE PHIL. v. JUAN ESPERA

  • G.R. No. 67610 July 31, 1989 - PEOPLE OF THE PHIL. v. ANGELINA R. MENDOZA

  • G.R. No. 70246 July 31, 1989 - FIRST INTEGRATED BONDING & INSURANCE CO., INC., ET AL. v. ASAALI S. ISNANI

  • G.R. No. 75277 July 31, 1989 - JOSE A. IBARRIENTOS v. NATIONAL LABOR RELATIONS COMMISSION, ET AL.

  • G.R. No. 78148 July 31, 1989 - APOLINARIO BATACLAN, ET AL. v. COURT OF APPEALS, ET AL.

  • G.R. No. 78170 July 31, 1989 - LUIS TIRSO RIVILLA, ET AL. v. INTERMEDIATE APPELLATE COURT, ET AL.

  • G.R. No. 79827 July 31, 1989 - PEOPLE OF THE PHIL. v. AMALIA RESTERIO-ANDRADE, ET AL.

  • G.R. Nos. 82823-24 July 31, 1989 - AGRO COMM’L. SECURITY SERVICES AGENCY, INC. v. NATIONAL LABOR RELATIONS COMMISSION, ET AL.

  • G.R. No. 83414 July 31, 1989 - TONY CAUDAL v. COURT OF APPEALS, ET AL.

  • G.R. No. 85692 July 31, 1989 - ANGELITO F. MAGLALANG v. COURT OF APPEALS, ET AL.