8.

JACINTO V KAPARAZ
G.R. No. 81158 May 22, 1992
OSCAR A. JACINTO and LIBRADA RANCO!JACINTO, petitioners,
vs.
ROG"LIO KAPARAZ, RA#L KAPARAZ and ROS" MARI"T KAPARAZ, respondents.
DAVID", JR, J.:p
Petitioners urge this Court to review and set aside the decision of the respondent
Court of Appeals of 30 July 198 in C.A.!".#. C$ %o. &93',
1
the dispositive portion of
which reads(
)*+#+,-#+, the appealed decision is here.y #+$+#/+0 and /+1 A/20+
and 3udg4ent is here.y rendered as follows(
1. 1he Co4plaint5A4ended Co4plaint is here.y dis4issed.
6. 1he agree4ent .etween the parties dated 7arch 11, 19&& 8+9hi.it :A:;
also 4ar<ed as +9hi.it :1: = is here.y declared e9tinguished.
3. 1o prevent un3ust enrich4ent at the e9pense of another, the defendants!
appellants are here.y ordered to rei4.urse to the plainti>s!appellees the
su4 of P'00.00 paid .y the latter to the 0evelop4ent ?an< of the
Philippines for the defendants!appellants@ P6,&00.00 loan account.
%o pronounce4ent as to costs.
/- -#0+#+0.
2
1he undisputed antecedent facts are as follows(
-n 11 7arch 19&&, herein petitioners and private respondents entered into an
agree4ent 8hereinafter referred to as Agree4ent= under which the private
respondents agreed to sell and convey to petitioners a portion consisting of si9
hundred 8&00= sAuare 4eters of a lot located in 7atiao, 7ati, 0avao -riental and
covered .y 1ransfer CertiBcate of 1itle %o. 1!3&9C for a total consideration of
P1,800.00 of downpay4ent of P800.00 was paid upon e9ecution of the Agree4ent.
1he .alance of P1,000.00 was to .e paid .y petitioners on install4ent at the rate of
P100.00 a 4onth to the 0evelop4ent ?an< of the Philippines 80?P= to .e applied to
private respondents@ loan accounts. Paragraphs ', &, and 8 of the Agree4ent read as
follows(
1hat the PA#1D -, 1*+ ,2#/1 PA#1 is very 4uch in need of cash to pay the
loan to the 0+$+E-P7+%1 ?A%F -, 1*+ P*2E2PP2%+/ herein
a.ove4entioned which is very 4uch in arrears and the PA#1D -, 1*+
/+C-%0 PA#1 is agreea.le to advance the su4 of +2"*1 *G%0#+0
8P800.00= P+/-/ as partial pay4ent of the said loan to the 0evelop4ent
?an< of the Philippines provided that the PA#1D -, 1*+ ,2#/1 PA#1D 8sic=
shall sell, transfer, cede and convey a.solutely to the party of the /+C-%0
PA#1 an area of /2H *G%0#+0 8&00= /IGA#+ 7+1+#/ with a frontage of
twenty 860= 7+1+#/ along the present national highway, at the corner of
the afore4entioned land .ordering a proposed Bve!4eter su.division road
ad3acent to the property of the PA#1D -, 1*+ /+C-%0 PA#1;
1hat for and in consideration of the foregoing pre4ises and of the su4 of
+2"*1 *G%0#+0 8800.00= P+/-/ which the PA#1D -, 1*+ ,2#/1 PA#1D
8sic= here.y ac<nowledges to have received fro4 the PA#1D -, 1*+
/+C-%0 PA#1, 1*+ PA#1D -, 1*+ ,2#/1 PA#1 here.y agrees, pro4ises and
.inds hi4self to sell, cede, transfer, and convey a.solutely to the PA#1D -,
1*+ /+C-%0 PA#1 /2H *G%0#+0 8&00= /IGA#+ 7+1+#/ portion of the
property covered .y 1#A%/,+# C+#12,2CA1+ -, 121E+ %-. 1!3&9C together
with all the i4prove4ents thereon, which portion is situated along the
national highway and shown as the shaded area in the s<etch at the .ac<
hereof; the total consideration of the sale of the said /2H *G%0#+0 8&00=
/IGA#+ 7+1+#/ shall .e -%+ 1*-G/A%0 +2"*1 *G%0#+0 P+/-/
8P1,800.00=, including the a4ount of +2"*1 *G%0#+0 P+/-/ 8P800.00=
advanced .y the PA#1D -, 1*+ /+C-%0 PA#1 upon the e9ecution of this
docu4ent;
1hat the unpaid .alance of the total consideration of the sale a4ounting to
-%+ 1*-G/A%0 8P1,000.00= P+/-/ shall .e paid .y the PA#1D -, 1*+
/+C-%0 PA#1 directly to the 0+$+E-P7+%1 ?A%F -, 1*+ P*2E2PP2%+/,
0A$A- ?#A%C*, in ten 810= eAual 4onthly install4ents of -%+ *G%0#+0
8P100.00= P+/-/ each not later than the 1'th day following the end of each
4onth .eginning 7ay 10, 19&&;
1hat the PA#1D -, 1*+ /+C-%0 PA#1 has the right and privilege .y virtue
of this 8sic= presents to ta<e possession of the area of /2H *G%0#+0 8&00=
/IGA#+ 7+1+#/ su.3ect of this agree4ent and to appropriate for hi4self
all the i4prove4ents e9isting thereon e>ective fro4 the date of e9ecution
of this agree4ent;
$
Paragraph 9 thereof reads(
1hat the PA#1D -, 1*+ ,2#/1 PA#1 agrees and .inds hi4self to
ac<nowledge receipt of every and all 4onthly pay4ents re4itted to the
0+$+E-P7+%1 ?A%F -, 1*+ P*2E2PP2%+/ .y the PA#1D -, 1*+ /+C-%0
PA#1 and further agrees and .inds hi4self to e9ecute the Bnal deed of
a.solute sale of the /2H *G%0#+0 8&00= /IGA#+ 7+1+#/ herein a.ove
referred to in favor of the PA#1D -, 1*+ /+C-%0 PA#1 as soon as the
settle4ent or partition of the estate of the deceased %A#C2/A #. FAPA#AJ
shall have .een consu44ated and e>ected, .ut not later than 7arch 31,
19&;
%
Gpon the e9ecution of the agree4ent, petitioners paid the downpay4ent of P800.00
and were placed in possession of the portion descri.ed therein. As to the P1,000.00
which was to .e paid directly to the 0?P, petitioners clai4 that they had even 4ade
an e9cess pay4ent of P100.00.
2n view of the refusal of private respondents to e9ecute the deed of sale, petitioners
Bled against the4 a co4plaint for speciBc perfor4ance with the then Court of ,irst
2nstance 8now #egional 1rial Court= of 0avao -riental. 1he co4plaint was doc<eted as
Civil Case %o. '8& and was a4ended on 63 January 199. 2n their Answer Bled on 68
June 19, later a4ended on 19 0ece4.er 199 as a conseAuence of the Bling of the
a4ended co4plaint, private respondents alleged that the sale did not 4aterialiKe
.ecause of the failure of petitioners to fulBll their pro4ise to 4a<e ti4ely pay4ents on
the stipulated price to the 0?P; as a result of such failure, they 8private respondents=
failed to secure the release of the 4ortgage on the property. 1hey then prayed for the
dis4issal of the case and a declaration that the agree4ent is null and void.
After due trial, the court .elow rendered on 19 %ove4.er 1981 a decision in favor of
the petitioners, the dispositive portion of which reads as follows(
,-# AEE 1*+ ,-#+"-2%", 3udg4ent is here.y rendered in favor of the
plainti>s and against the defendants LL
81= 0eclaring the plainti>s to .e the owners of the property
consisting of si9 hundred 8&00= sAuare 4eters, 4ore or less,
deno4inated as Eot *!16, Psd!11!000'&, which was for4erly a
portion of the property covered .y 1ransfer CertiBcate of 1itle
%o. 1!3&9C, and now covered .y 1ransfer CertiBcate of 1itle %o.
1!'86C in the na4e of defendant #ogelio FaparaK;
86= -rdering defendant #ogelio FaparaK to reconvey this
property to the plainti>s herein;
83= -rdering defendants to pay plainti>s reasona.le attorney@s
fees in the a4ount of P3,000.00 and to pay the costs.
/- -#0+#+0.
5
1he facts as found .y the trial court are as follows(
999 999 999
1he adduced evidence will show that the parties herein a.ove e9ecuted a
certain agree4ent 8+9h. :A: for the plainti>s; +9hi.it :1: for the
defendants= dated 7arch 11, 19&&, the pertinent portions of which are
hereunder Auoted, to wit(
999 999 999
,ro4 the foregoing provisions of the said agree4ent, the defendants herein
have .ound the4selves to sell and convey a portion of the property
covered .y 1ransfer CertiBcate of 1itle %o. 1!3&9C, consisting of /2H
*G%0#+0 8&00= /IGA#+ 7+1+#/, to the plainti>s for a consideration of
P1,800.00, P800.00 of which had .een received .y the defendants upon the
e9ecution of the docu4ent and the re4aining .alance of P1,000.00 shall .e
paid .y the plainti>s directly to the 0evelop4ent ?an< of the Philippines in
:ten 810= eAual 4onthly install4ents of -%+ *G%0#+0 8P100.00= P+/-/
+AC* not later than the 1'th day following the end of each 4onth
.eginning 7ay 10, 19&&:. 1he defendants, on the other hand, have also
.ound the4selves to e9ecute the Bnal deed of a.solute sale of the portion
a.ove!4entioned in favor of the plainti>s :as soon as the settle4ent or
partition of the estate of the deceased %A#C2/A #. FAPA#AJ shall have
.een consu44ated and e>ected, .ut not later than 7arch 31, 19&.:
2t appears that plainti>s had paid defendant 0o4ingo FaparaK the a4ount
of PC00.00 8+9h. :?:=, the P600.00 which was paid .y plainti>s to the
develop4ent ?an< of the Philippines for the account of the late 0o4ingo
FaparaK and the P600.00 was given to said defendant. Plainti> -scar
Jacinto 4ade another pay4ent to the 0evelop4ent ?an< of the Philippines
for the account of 0o4ingo and %arcisa FaparaK covered .y -Mcial #eceipt
%o. 1113990, dated %ove4.er 69, 19&&, in the a4ount of P600.00 8+9h.
:,:=. Another pay4ent was again 4ade to the 0evelop4ent ?an< of the
Philippines for the sa4e account .y plainti> -scar Jacinto covered .y
-Mcial #eceipt %o. 133C193, dated 0ece4.er ', 19&8, in the a4ount of
P300.00 8+9h. :C:= and another pay4ent also was 4ade on 0ece4.er 9,
19&8 in the a4ount of P600.00 covered .y -Mcial #eceipt %o. 133C19&
8+9h. @@*@@=. All of these pay4ents are certiBed .y the 0evelop4ent ?an< of
the Philippines 8+9h. :+:= to have .een 4ade .y plainti> -scar Jacinto and
applied to the accounts of 0o4ingo and %arcisa FaparaK. ,or the
su.division survey of the lot of si9 8&00= sAuare 4eters involved in this
case, plainti>s contri.uted the a4ount of P80.00 8+9h. :J:= and another
a4ount of P3'0.00 was paid also to +ngr. Eadera 8+9h. :2:= plainti>s, all in
all, aside fro4 the pay4ents that they 4ade to the /urveyor, have paid the
0evelop4ent ?an< of the Philippines for the account of the late 0o4ingo
FaparaK in the total a4ount of P00.00 which in already in e9cess of the
price consideration of P1,800.00 after defendants had received the a4ount
of P1,600.00. Plainti> -scar Jacinto e9plained that the pay4ent was in
e9cess of P100.00 .ecause the .alance of P&00.00 which was originally
intended to .e paid for the surveyor was instead paid .y hi4 to the .an<
plus P100.00 to cover the accu4ulated interests. 1hus 8sic=, 4a<ing the
total pay4ents to the 0evelop4ent ?an< of the Philippines in the a4ount
of P00.00.
-n the other 8hand=, defendant #ogelio FaparaK testiBed that plainti>s did
not co4ply with the ter4s of the agree4ent 8+9h. :A:= .y having failed to
pay the ten 810= eAual 4onthly install4ents. ,or failure of plainti>s to pay
the 4onthly install4ents, as agreed 8sic= in the agree4ent 8+9h. :A: =, he
decided to pay the 0evelop4ent ?an< of the Philippines of 8sic= their
accounts. 1he partial pay4ent was 4ade on July 3, 19& in the a4ount of
P3,000.00 covered .y -Mcial #eceipt %o. 11&031C 8+9h. :6:= and another
pay4ent for the .alance was 4ade on August 1', 19& in the a4ount of
3,16C.11 covered .y -Mcial #eceipt %o. 11&0831 8+9h. :C:=.
2t is li<ewise ad4itted that the estate of the late %arcisa #. FaparaK had
already .een settled and that si9 hundred 8&00= sAuare 4eters portion of
the lot covered .y 1ransfer CertiBcate of 1itle %o. 1!3&9C, or Eot %o. *!16,
Psd!11!000'&, has already .een ad3udicated to defendant #ogelio FaparaK
and is now registered in his na4e under 1ransfer CertiBcate of 1itle %o. 1!
'86C.
&
Private respondents appealed fro4 said decision to the Court of Appeals which
doc<eted the case as C.A.!".#. C$ %o. &93'. 2n their ?rief, they contended that the
trial court erred in( 8a= Bnding that petitioners had fully paid the consideration for the
property su.3ect of the agree4ent, 8.= ruling that the delay in the pay4ents to the
0?P is only a slight .reach of the agree4ent, 8c= holding private respondents@ failure
to protest petitioners@ delay of pay4ent a4ounted to i4plied waiver to rescind the
agree4ent, 8d= declaring that laches did not operate against petitioners considering
that the prescriptive period has not even e9pired, 8e= not holding that the parties are
in pari delicto, and 8f= ordering #ogelio FaparaK to reconvey the property in Auestion to
petitioners.
As earlier adverted to, in its decision of 30 July 198, the respondent Court of Appeals
reversed the decision of the trial court. 1he respondent Court was of the opinion that(
8a= 1he petitioners had not fully discharged their o.ligation under the agree4ent
considering that their last pay4ents to 0?P of P300.00
'
and P600.00 8 were :several
4onths delayed .eyond the date5s agreed upon .y the parties,: and that the
agricultural loan to which the a4ortiKations of the unpaid .alance of P1,000.00 of the
purchase price were to .e applied had in fact .een fully settled .y the private
respondents. 1he application of these pay4ents .y the 0?P to another account of the
private respondents was of no 4o4ent .ecause the agree4ent of the parties
speciBcally referred to the agricultural loan. 8.= %o evidence supports the .conclusion
of the trial court that private respondents failed to protest the delay in the pay4ents.
-n the contrary, the evidence discloses that private respondents de4anded fro4 the
petitioners the .alance of the o.ligation after the latter had defaulted; having received
no response, private respondents the4selves paid .the agricultural loan. 8c= 1he delay
in the pay4ents was not a slight .reach. 1he dates of the pay4ents were so essential
that they were speciBcally stipulated upon .y the parties. 1he pri4ary i4portance of
ti4ely pay4ents sprang fro4 the nature of the su.3ect .an< account consisting of a
loan secured .y a real estate 4ortgage which de4anded up!to!date a4ortiKation to
prevent foreclosure. 8d= )hile the trial court was correct in holding that .oth parties
defaulted in the perfor4ance of their respective o.ligations, petitioners were the Brst
to incur in delay. 1here is, therefore, greater 3ustiBcation to decree rescission.
7oreover, even granting that there was no evidence as to who violated the agree4ent
Brst, then the contract is dee4ed e9tinguished pursuant to the second sentence of
Article 1196 of the Civil Code. 1his Article provides that(
2n case .oth parties have co44itted a .reach of the o.ligation, the lia.ility
of the Brst infractor shall .e eAuita.ly te4pered .y the courts. 2f it cannot
.e deter4ined which of the parties Brst violated the contract, the sa4e
shall .e dee4ed e9tinguished, and each shall .ear his own da4age.
Gna.le to accept the a.ove verdict, petitioner co44enced this petition wherein they
allege that respondent Court erred in not Bnding that( 8a= petitioners had fully paid the
consideration for the &00 sAuare 4eters of Eot *; 8.= private respondents@ failure to
protest the delay of pay4ents can .e considered as estoppel on their part and an
i4plied waiver of their right to rescind the sale; 8c= assu4ing that the last two
pay4ents to the 0?P were not valid as they were applied to another account, there
was at least su.stantial perfor4ance .y the petitioners of their o.ligation; 8d= the
.reach on the part of petitioners was only slight or casual and would not warrant
rescission of the sale; 8e= under the circu4stances, it was necessary for the
respondents to 4a<e a notarial de4and or o.tain prior 3udicial approval to e>ect
rescission of the sale; and Bnally, 8e= the agree4ent was e9tinguished.
After the Bling of the Co44ents .y private respondents, the reply thereto .y
petitioners and the re3oinder to the latter .y private respondents, the Court gave due
course to the petition and reAuired the parties to su.4it si4ultaneously their
respective 7e4oranda,
9
which they su.seAuently co4plied with.
1(
1he petition is i4pressed with 4erit.
$ital to the resolution of the controversy is the deter4ination of the true nature of the
Auestioned agree4ent. 2s it a contract of sale or a contract to sellN 1he two are not, of
course, the sa4e. 2n the latter case, ownership is retained .y the seller and is not to
pass until full pay4ent of the price. /uch pay4ent is a positive suspensive condition
the failure of which is not a .roach, casual or serious, .ut si4ply an event that
prevents the o.ligation of the vendor to convey title fro4 acAuiring .inding force. 2n
such a situation, to argue that there was only a casual .reach is to proceed fro4 the
assu4ption that the contract is one of a.solute sale, where non!pay4ent is a
resolutory Auestion.
11
-therwise stated, as capsuliKed in Luzon Brokerage Co.,
Inc. vs. Maritime Building Co., Inc.,
12
:there can .e no rescission or resolution of an
o.ligation as yet non!e9istent, .ecause the suspensive condition did not happen.:
+9panding on this point, this Court, in said case, 4ade the following disAuisitions(
. . . 1he upshot of all these stipulations is that in see<ing the ouster of
7ariti4e for failure to pay the price as agreed upon, 7yers was not
rescinding 8or 4ore properly, resolving= the contract, .ut
precisely enforcing it according to its e9press ter4s. 2n its suit 7yers was
not see<ing restitution to it of the ownership of the thing sold 8since it was
never disposed of=, such restoration .eing the logical conseAuence of the
fulBll4ent of a resolutory condition, e9press or i4plied 8article 1190=;
neither was it see<ing a declaration that its o.ligation to sell was
e9tinguished. )hat it sought was a 3udicial declaration that .ecause
the suspensive condition 8full and punctual pay4ent= had not .een fulBlled,
its o.ligation to sell to 7ariti4e never arose or never .eca4e e>ective and,
therefore, it 87yers= was entitled to repossess the property o.3ect of the
contract, possession .eing a 4ere incident to its right of ownership. 2t is
ele4entary that, as stated .y Castan, LL
.= Si la condicion suspensive Ilega a faltar, la obligacion se tiene por no
existente, y el acreedor pierde todo derecho, incluso el de utilizar las
medidas conservativas. 83 Catan 0erecho Civil, a +d., p. 10=. 8Also Puig
PeOa, 0er. Civ., 1. 2$ 81=, p. 113=.
-n the other hand, since in a contract of sale, the non!pay4ent of the price is a
resolutory condition,
1$
the re4edy of the seller under Article 1191 of the Civil Code is
to e9act fulBll4ent or to rescind the contract. 2n respect, however, to the sale of
i44ova.le property, this Article 4ust .e read together with Article 1'96 of the sa4e
Code(
Art. 1'96. 2n the sale of i44ova.le property, even though it 4ay have
.een stipulated that upon failure to pay the price at the ti4e agreed upon
the rescission of the contract shall of right ta<e place, the vendee 4ay pay,
even after the e9piration of the period, as long as no de4and for rescission
of the contract has .een 4ade upon hi4 either 3udicially or .y a notarial
act. After the de4and, the court 4ay not grant hi4 a new ter4.
1his Article applies to instances where no stipulation for auto4atic rescission is 4ade
.ecause it says :even though:.
1%
1he agree4ent in the instant case has all the ear4ar<s of a contract of sale. 1he
possession of the portion sold was i44ediately delivered to the petitioners. 1hey were
granted the right to en3oy all the i4prove4ents therein e>ective fro4 the date of the
e9ecution of the agree4ent. Private respondents unAualiBedly .ound the4selves to
e9ecute the Bnal deed of sale :as soon as the settle4ent or partition of the estate of
the deceased %arcisa #. FaparaK shall have .een consu44ated and e>ected, .ut not
later than 7arch 31, 19&: and only upon full pay4ent of the unpaid portion of the
purchase price. 1he private respondents did not reserve unto the4selves the
ownership of the property until full pay4ent of the unpaid .alance of P1,000.00.
,inally, there is no stipulation giving the private respondents the right to unilaterally
rescind the contract the 4o4ent the vendee fails to pay within a B9ed period. 2n
reality, the agree4ent was an a.solute sale which allowed the petitioners to pay the
re4aining .alance of the purchase price in install4ent. )e agree with the su.4ission
of
petitioners
15
that ignos vs. Court of !ppeals
1&
applies in this case. 2n said case, this
Court stated(
1hus, it has .een held that a deed of sale is a.solute in nature although
deno4inated as a :0eed of Conditional /ale: where nowhere in the
contract in Auestion is a proviso or stipulation to the e>ect that title to the
property sold is reserved in the vendor until full pay4ent of the purchase
price, nor is there a stipulation giving the vendor the right to unilaterally
rescind the contract the 4o4ent the vendee fails to pay within a B9ed
period 81agu.a v. $da. de Eeon, 136 /C#A 66; EuKon ?ro<erage Co., 2nc. v.
7ariti4e ?uilding Co., 2nc., 8& /C#A 30'=.
As stated earlier, in a contract of sale, the re4edy of an unpaid seller is either speciBc
perfor4ance or rescission. 1he latter, with respect to the sale of i44ova.les, is
speciBcally governed .y Article 1'96 of the Civil Code.
1'
2n the case at .ar, there was
non!co4pliance with the reAuire4ents prescri.ed in these provisions. 2t is not
controverted that private respondents had neither Bled an action for speciBc
perfor4ance nor de4anded the rescission of the agree4ent either 3udicially or .y a
notarial act .efore the Bling of the co4plaint in Civil Case %o. '8&. 2t is only in their
Answer that they .elatedly raised the defense of resolution of the contract pursuant to
Article 1191 .y reason of petitioners@ .reach of their o.ligation.
+ven if the general law on resolution, Article 1191 of the Civil Code, is to .e applied,
-ur decision would still .e for the petitioners. 1he third paragraph of this Article reads(
999 999 999
1he Court shall decree the rescission clai4ed, unless there .e 3ust cause
authoriKing the B9ing of a period.
2t is not denied that petitioners 4ade two 86= pay4ents in the su4s of P600.00 and
P300.00 at a ti4e when what re4ained unsettled under the agree4ent was only
PC00.00. 1here was then an e9cess pay4ent of P100.00. 1hese pay4ents were 4ade
to the 0?P which applied the4 to an outstanding account of the private respondents.
Private respondents neither co4plained of the delay in these pay4ents nor re3ected
their application to their account. 1hey were, undou.tedly, .eneBted .y the
application .ecause it either satisBed their account or correspondingly reduced it. 1he
clai4 that the account to which it was applied was not the account stipulated in the
agree4ent is without 4erit. 2n the Brst place, the agree4ent fails to disclose an
e9press agree4ent that the 4onthly a4ortiKations on the P1,000.00 unpaid .alance
of the purchase price to .e 4ade to the 0?P should .e applied e9clusively to the
agricultural loan indicated in the exordium of the agree4ent. 1he loan was 4entioned
only to lay the .asis for private respondents@ need for the downpay4ent. 2n the
second place, to allow private respondents to re3ect the pay4ent of PC00.00, plus the
e9cess of P100.00 after they .eneBted therefro4, would .e un3ust.
1hen too, at no ti4e .efore the Bling of their Answer did private respondents declare
their intention to rescind the agree4ent, or if they did, co44unicate such intention to
the petitioners. 2t was necessary for private respondents to have done so. As this
Court held in "niversity of the #hilippines vs. e los !ngeles(
18
-f course, it 4ust .e understood that the act of a party in treating a
contract as cancelled or resolved on account of infractions .y the other
contracting party 4ust .e 4ade <nown to the other and is always
provisional, .eing ever su.3ect to scrutiny and review .y the proper court. 2f
the other party denies that rescission is 3ustiBed, it is free to resort to
3udicial action in its own .ehalf, and .ring the 4atter to court. 1hen, should
the court, after due hearing, decide that the resolution of the contract was
not warranted, the responsi.le party will .e sentenced to da4ages; in the
contrary case, the resolution will .e aMr4ed, and the conseAuent
inde4nity awarded to the party pre3udiced.
2n other words, the party who dee4s the contract violated 4ay consider it
resolved or rescinded, and act accordingly, without previous court action,
.ut it proceeds at its o$n risk. ,or it is only the Bnal 3udg4ent of the
corresponding court that will conclusively and Bnally settle whether the
action ta<en was or was not correct in law. ?ut the law deBnitely does not
reAuire that the contracting party who .elieves itself in3ured 4ust Brst Ble
suit and wait for a 3udg4ent .efore ta<ing e9tra3udicial steps to protect its
interest. -therwise, the party in3ured .y the others@ .reach will have to
passively sit and watch its da4ages accu4ulate during the pendency of
the suit until the Bnal 3udg4ent of rescission is rendered when the law itself
reAuires that he should e9ercise due diligence to 4ini4iKe its own da4ages
8Civil Code, Article 6603=.
,inally, the delay incurred .y petitioners was .ut a casual or slight .reach of the
agree4ent, which did not defeat the o.3ect of the parties in entering into the
agree4ent. A 4ere casual .reach does not 3ustify rescission.
19
1he pro4pt pay4ent
of the 4onthly a4ortiKations of the unpaid .alance of P1,000.00 was not a condition
precedent to the e9ecution of the Bnal deed of sale. ?esides, petitioners had already
paid P1,C00.00 of the total consideration of P1,800.00, or e9actly .P of the
purchase price within the period stipulated. 7oreover, they had in fact overpaid the
private respondents .y P100.00.
Accordingly, )e rule that rescission of the agree4ent was not availa.le to private
respondents.
)e further rule that the respondent Court erred in declaring the agree4ent
e9tinguished pursuant to the second sentence of Article 1196 of the Civil Code. *aving
concluded, although erroneously, that petitioners were the Brst to .reach the
agree4ent, it should have applied the Brst sentence thereof .y eAuita.ly te4pering
petitioners@ lia.ility. 1he second sentence applies only to cases where it cannot .e
deter4ined which of the parties Brst violated the contract.
1he foregoing disAuisitions render unnecessary any discussion on the other issues
raised .y petitioners.
)*+#+,-#+, the petition is "#A%1+0. 1he challenged decision of the Court of Appeals
is #+$+#/+0 and the 3udg4ent of the lower court is here.y #+2%/1A1+0 and
A,,2#7+0. Costs against private respondents./- -#0+#+0.
O)*a+ Ja*,n-o . L,/+ada Ja*,n-o, 01-,-,on1+ V) Ro213,o Ka0a+a4, 1- a3, +1)0ond1n-
ACTS5
Jacinto and FaparaK entered into an
agree4ent in which FaparaK agreed to sell
and convey to Jacinto a parcel of land for
Q1,800, the down pay4ent is Q800 which
was paid upon the e9ecution of the
agree4ent. 1he .alance of Q1,000 is going
to .e paid .y the petitioner Jacinto on
install4ent .asis of Q100 per 4onth directly
to 0?P as pay4ent to FaparaKR loan in the
said .an<.
/ince FaparaK refuse to e9ecute a deed of
sale, Jacinto Bled a co4plaint for speciBc
perfor4ance against FaparaK. FaparaK on
the other hand, alleged that the sale did not
4aterialiKe .ecause Jacinto fail to pay 0?P
on ti4ely .asis as stipulated in their
agree4ent, as a result of the failure, FaparaK
failed to secure the release of the 4ortgage
property, they then prayed the declaration of
the agree4ent null and avoid.
ISS#"5
)hether or not the respondents
have the right to rescind the agree4entsN
S#PR"M" CO#RT(
1he respondent has no right to rescind the
agree4ent .ecause in the Brst place they
never de4anded it fro4 the petitioner nor
e9act Bled an action for rescission, they only
raised that issue later on as a defense .y
reason of the petitioner .reach their
o.ligation .y unti4ely pay4ent of the loan.
,or the delay on the loan pay4ent, /upre4e
Court ruled out that the delay was a 4ere
casual or slight .reach of the agree4ent
which did not defeat the partyRs o.3ect or
reason in entering into the agree4ent.
,urther4ore, the pro4pt pay4ent of 4onthly
a4ortiKation of the unpaid .alance of the loan
was not a condition precedent to the e9ecution
of the Bnal deed of sale.