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SECOND DIVISION

G.R. No. L-59980 October 23, 1984

BERLIN TAGUBA AND SEBASTIANA DOMINGO, SPOUSES PEDRO ASUNCION AND MARING ASUNCION, Petitioners, vs. MARIA PERALTA VDA. DE DE LEON AND THE HONORABLE COURT OF APPEALS, Respondents.

CUEVAS, J.:

This is a Petition to Review on Certiorari, the decision of the defunct Court of Appeals in its CA-G.R. No. 65357-R which reversed on appeal the decision of the then Court of First Instance of Isabela in Civil Case No. Br. II-1215, entitled "Maria Peralta Vda. de De Leon, versus Berlin Taguba and Sebastiana Domingo" for "Specific Performance with Preliminary Mandatory Injunction with Damages".chanroblesvirtualawlibrary chanrobles virtual law library

Berlin Taguba married to Sebastiana Domingo (now petitioner) is the owner of a residential lot with an area of 3,129 square meters located at Cauayan, Isabela. Spouses Pedro Asuncion and Marita Lungab, (also petitioners) and herein private respondent Maria Peralta Vda. de De Leon, were separately occupying portions of the aforementioned lot as lessees.chanroblesvirtualawlibrary chanrobles virtual law library

On August 27, 1972, Berlin Taguba sold a portion of the said lot consisting of 400 square meters to private respondent Maria Peralta Vda de De Leon. The portion sold comprises the area occupied by the Asuncions and private respondent Vda de De Leon. The deed evidencing said sale was denominated as "Deed of Conditional Sale", 1 the only salient terms and conditions of which reads -

NOW THEREFORE, for and in consideration of the sum of Eighteen Thousand (P18,000.00) Pesos, Philippine Currency, (P45.00 per sq. m.) to be paid in the manner herein below specified, the VENDOR hereby SELL, CEDE, TRANSFER, and CONVEY unto and in favor of the VENDEE, her heirs, executors, administrators or assigns the above-described portion. The aforesaid sum of P18,000.00 shall be paid at the residence of the VENDOR as follows: chanrobles virtual law library

a) P3,500.00 Philippine Currency upon the signing and executed petition of this contract; chanrobles virtual law library

b) To pay the amount of at least One Thousand (P1,000.00) Pesos, Philippine Currency MONTHLY to commence September 1972, until the whole amount would have been paid on or before December 3, 1972; chanrobles virtual law library

c) That failure to pay the VENDOR the whole balance on December 31, 1972, the VENDEE shall be given an extension of Six (6) months with interest (legal rate) after which VENDOR may INCREASE the purchase price to P50.00 per sq. m. which the VENDEE agrees should she fail to pay within said period of time.

Alleging that she (private respondent) had already paid the sum of P12,500.00 and had tendered payment of the balance of P5,500.00 to complete the stipulated purchase price of P18,000.00 to petitioner Berlin Taguba in May 1973 within the grace period but the latter refused to receive payment; and that since negotiations for settlement with the intervention of Governor Dy failed, private respondent instituted on April 29, 1976 a complaint for Specific Performance with Preliminary Mandatory Injunction with Damages against Spouses Berlin Taguba and Sebastiana Domingo, in the then Court of First Instance of Isabela (Civil Case No. II-1215.) chanrobles virtual law library

In their Answer, Spouses Taguba admitted the sale of the property, but claimed that private respondent failed to comply with her obligation under the Deed of Conditional Sale despite the several extensions granted her, by reason of which petitioner was compelled but with the express knowledge and consent and even upon the proposal of private respondent, to negotiate the sale of a portion of the property sold, to the Spouses Asuncion who were actually in possession thereof. Petitioner further alleged that the parties had appeared before Governor Dy, who mediated to settle the dispute between them and that in the said conference, they had agreed that private respondent and the Asuncion spouses will buy only the portions which they respectively and actually as lessees.chanroblesvirtualawlibrary chanrobles virtual law library

The Asuncion spouses intervened and filed their Answer in Intervention alleging that they bought in good faith that portion of the land they actually occupy after private respondent defaulted in her undertaking in their contract with petitioner Berlin Taguba and after a confrontation in the house of Governor Faustino N. Dy.chanroblesvirtualawlibrary chanrobles virtual law library

After trial, the lower court rendered judgment, the dispositive portion of which reads as follows -

1) Ordering a cadastral survey by a competent Geodetic Engineer of the actual area occupied by the plaintiff and the intervenors; chanrobles virtual law library

2) Ordering the defendant Berlin Taguba to execute a deed of absolute sale in favor of the plaintiff of the actual area actually occupied by her; chanrobles virtual law library

3) Ordering Berlin Taguba to reimburse the plaintiff of whatever amount he received from the plaintiff in excess of the costs of the area actually occupied by plaintiff at P45.00 per square meter; chanrobles virtual law library

4) The cost of survey shag be borne by the plaintiff and intervenor share and share alike; chanrobles virtual law library

5) The order granting preliminary injunction against plaintiff dated July 13, 1978 is hereby declared permanent.chanroblesvirtualawlibrary chanrobles virtual law library

Without special pronouncement as to costs. chanrobles virtual law library

SO ORDERED.

On appeal under CA-G.R. No. 65357-R, the then Court of Appeals reversed the decision of the lower court in a decision promulgated on October 22, 1981, the dispositive portion of which reads as follows -

WHEREFORE, the decision of the lower court is hereby SET ASIDE and a new judgment rendered as follows: chanrobles virtual law library

1) Ordering defendant Berlin Taguba to execute a deed of absolute sale in favor of plaintiff over the 400 square meter portion of his property described in Exhibit "A" upon the payment by plaintiff of the sum of P7,500.00 within thirty (30) days from receipt of notice from the Clerk of Court of the lower court of receipt of the records of the case from the Court of Appeals as provided for in the last paragraph of Section 1, Rule 39 in relation to Section 11, Rule 51 of the Rules of Court; chanrobles virtual law library

2) Declaring the deed of sale executed by defendant Taguba in favor of defendant Asuncion in April 19, 1974, Exhibit '3' and void or of no force and effect in view of the prior sale of the property covered under said deed to plaintiff on August 27, 1972 Exhibit "A", chanrobles virtual law library

3) Ordering defendant Berlin Taguba to reimburse defendant Pedro Asuncion the purchase price received by him under the deed of sale of April 19, 1974, Exhibit "3"; and chanrobles virtual law library

4) Ordering defendants jointly and severally to deliver to plaintiff possession of the property described in Exhibit "A" with an area of 400 square meters, the portion sold by defendant Taguba to plaintiff.chanroblesvirtualawlibrary chanrobles virtual law library

With costs against defendants-appellees.chanroblesvirtualawlibrary chanrobles virtual law library

SO ORDERED.

The motion for reconsideration of the aforesaid decision filed by petitioner Spouses Taguba and Spouses Asuncion having been denied, they now come before this Court through the instant petition praying that the decision of the then Court of Appeals be set aside and the decision of the lower court be affirmed in toto.

The petition is without merit.chanroblesvirtualawlibrary chanrobles virtual law library

We agree with respondent Court of Appeals (now Intermediate Appellate Court) that the contract of sale between petitioner Berlin Taguba and private respondent Maria Peralta Vda. de De Leon ² was absolute in nature. Despite the denomination of the deed as a "Deed of Conditional Sale" a reading of the conditions (earlier quoted in this decision) therein set forth reveals the contrary. Nowhere in the said contract in question could we find a proviso or stipulation to the effect that title to the property sold is reserved in the vendor ³until full payment of the purchase price. There is also no stipulation giving the vendor (petitioner Taguba) the right to unilaterally rescind the contract the moment the vendee (private respondent de Leon) fails to pay within a fixed period. ⁴ Indeed, a reading of the contract in its entirety would show that the only right of petitioner Taguba as vendor was to collect interest at the legal rate if private respondent-vendee fails to pay the full purchase price of P18,000.00 up to December 31, 1972 and to increase the price from P45.00 to P50.00 per square meter if vendee still fails to pay within the six months grace period from December 31, 1972. Thus Par. C of the deed provides-

c) That failure to pay the VENDOR the whole balance on December 31, 1972, the VENDEE shall be given an extension of six (6) months with interest (legal rate) after which VENDOR may INCREASE the purchase price to P50.00 per sq. m. which the VENDEE agrees should she fail to pay within said period of time.

Considering, therefore, the nature of the transaction between petitioner Taguba and private respondent, which We affirm and sustain to be a contract of sale, absolute in nature ⁵ the applicable provision is Article 1592 of the New Civil Code, which states -

Art. 1592. In the sale of immovable property,eventhough 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, the vendee may pay, even after the expiration of the period, as long as no demand for rescission of the contract has been made upon him either judicially or by notarial act. After the demand the court may not grant him a new term. (Emphasis supplied)

In the case at bar, it is undisputed that petitioner Taguba never notified private respondent by notarial act that he was rescinding the contract, and neither had he filed a suit in court to rescind the sale.chanroblesvirtualawlibrary chanrobles virtual law library

Finally, it has been ruled that "where time is not of the essence of the agreement, a slight delay on the part of one party in the performance of his obligation is not a sufficient ground for the rescission of the agreement. ⁶ Considering that in the instant case, private respondent had already actually paid the sum of P12,500.00 of the total stipulated purchase price of P18,000.00 and had tendered payment of the balance of P5,500.00 within the grace period of six months from December 31, 1972, equity and justice mandate that she be given additional period within which to complete payment of the purchase price. ⁷ chanrobles virtual law library

With the respect to the sale executed by petitioner Taguba in favor of the other petitioners, the Asuncion spouses, on April 19, 1974 of 233 square meters portion of his property which is a part of the 400 square meters previously sold to private respondent de Leon, We find that said sale cannot prevail over the previous sale in favor of private respondent. The Asuncion spouses cannot be considered buyers in good faith because they were aware of the earlier sale to private respondent. ⁸ chanrobles virtual law library

WHEREFORE, the judgment of respondent Appellate Court is hereby AFFIRMED with costs against petitioners.chanroblesvirtualawlibrary chanrobles virtual law library

SO ORDERED.

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AQUINO, J., concurring:chanrobles virtual law library

I concur in the result. Mrs. Peralta is entitled to purchase 360 sq. m. at P50 per sq. m. in accordance with par (c). She did not pay interest.chanroblesvirtualawlibrary chanrobles virtual law library

AQUINO, J., concurring:

I concur in the result. Mrs. Peralta is entitled to purchase 360 sq. m. at P50 per sq. m. in accordance with par (c). She did not pay interest.