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BRAVO, XANDRA KAREN E.

Borromeo v. Franco
5 Phil. 49 (1905)

ISSUE:
Whether or not the agreement to sell property, with a condition for buyer to complete all
necessary documents within 6 months and that the latter fails to perform this obligation,
is still existent? (Yes)

SALIENT FACTS:
1. The sellers agreed to sell their property to Buyer with certain conditions, but most
importantly: that buyer would complete of all the necessary documents within 6
months.

2. After payment, buyer compelled the sellers to comply with their promise to sell by
executing the deed.

3. Sellers refused to do so because buyer did not complete the documents within 6
months, and that the property was already sold to a third party.

4. Sellers contend that the promise of sale made by them was conditional and the
buyer failed to comply with such condition- the completion of documents.

5. Hence, the sellers argue the agreement had no binding force between the both of
them.

SUPREME COURT HELD:


The condition to complete all documents within 6 months is not a condition, but a mere
incidental stipulation which the parties saw fit to include in the agreement because it is
not inherent or essential to the agreement or promise to sell. The obligation which the
buyer imposed upon himself, to perfect the papers to the property within a
period of six months, is not correlative with the obligation to sell the property as
these obligations do not arise from the same cause. They create no reciprocal rights
between the contracting parties, so that a failure to comply with that stipulation does not
give the sellers the right to cancel the obligation which they imposed upon themselves
to sell. Following Art. 1451, mutual promises to buy and sell a certain thing for a certain
price gives the parties a right to demand from the other the fulfilment of the obligation.

CRITIQUE AND ANALYSIS:


Maybe the reason I am having a difficult time completely understanding the logic of the
Supreme Court ruling is because of the general principle of the freedom of the parties to
freely contract. While the mutual promise to buy and sell a certain thing for a certain
price was made, shouldn't it mean the complete compliance of terms of the purchase?
The Supreme Court says it’s because both obligations - the buy and sell AND the
obligation to complete documents in six months clause - are founded on different
causes, the latter not being essential to the obligation to sell. But as I have learned both
in ObliCon and Sales, the Civil Code provides that the seller has the power to stipulate
the mode or terms of payment and the option not to undertake the sale if the buyer
refuses to comply. Here in this case the Supreme Court held that the obligation to
complete the documents was not so important.

If I am in the position to impose my opinion, I think the buyer should have complied with
the terms beforehand. I think the Supreme Court should have honoured the terms of the
contract no matter how irrelevant and small they think some provisions are. Because
the contract between two parties are the law between both of them and they must
therefore be bound by the terms that they themselves have agreed upon.

Since the topic is the Negotiation stage, it should be understood that both parties
agreed to these terms and there is no record in the facts that the buyer did not want to
be bound by the document completion clause. He had fully agreed to it. Hence in order
to come to a consummation, all terms must have been substantially complied with.