19. PLATINUM PLANS PHILS V.

CUCUECO, 488 SCRA 156 (2006)

1.
a.
b.
c.
1.
2.
3.
a.
b.
c.
4.
5.

6.

FACTS: Respondent Cucueco filed a case for specific performance with damages against
petitioner Platinum Plans pursuant to an alleged contract of sale executed by them for the
purchase of a condominium unit.
According to the respondent: sometime in July 1993, he offered to buy from petitioner Platinum
Plans Phils a condominium unit he was leasing from the latter for P 4 million payable in 2
installments of P2 million with the following terms and conditions:
Cucueco will issue a check for P100,00 as earnest money
He will issue a post-dated check for P1.9 million to be encashed on September 30, 1993 on the
condition that he will stop paying rentals for the said unit after September 30
In case Platinum Plans has an outstanding loan of less than P2 million with the bank as of
December 1993, Cucueco shall assume the same and pay the difference from the remaining P2
million
Cucueco likewise claimed that Platinum Plans accepted his offerby encashing the checks he
issued. However, he was surprised to learn that Platinum Plans had changed the due date of the
installment payment to September 30, 1993.
Respondent argued that there was a perfected sale between him and Platinum plans and as such,
he may validly demand from the petitioner to execute the necessary deed of sale transferring
ownership and title over the property in his favor
Platinum Plans denied Cucuecos allegations and asserted that Cucuecos initial down payment
was forfeited based on the following terms and conditions:
The terms of payment only includes two installments (August 1993 and September 1993)
In case of non-compliance on the part of the vendee, all installments made shall be forfeited in
favor of the vendor Platinum Plans
Ownership over the property shall not pass until payment of the full purchase price
Petitioners anchor their argument on the claim that there was no meeting of the minds between
the two parties, as evidenced by their letter of non-acceptance.
The trial court ruled in favor of Platinum, citing that since the element of consent was absent
there was no perfected contract. The trial court ordered Platinum Plans to return the P2 million
they had received from Cucueco, and for Cucueco to pay Platinum Plans rentals in arrears for the
use of the unit
Upon appeal, CA held that there was a perfected contract despite the fact that both parties never
agreed on the date of payment of the remaining balance. CA ordered Cucueco to pay the
remaining balance of the purchase price and for Platinum Plans, to execute a deed of sale over
the property
ISSUE: WON the contract there is a perfected contract of sale
HELD: No, it is a contract to sell.
In a contract of sale, the vendor cannot recover ownership of the thing sold until and unless the
contract itself is resolved and set aside. Art 1592 provides:

In the sale of immovable property, even though it 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 upon him either judicially or by a notarial act. After the demand, the
court may not grant him a new term.
Based on the above provision, a party who fails to invoke judicially or by notarial act would
be prevented from blocking the consummation of the same in light of the precept that mere
failure to fulfill the contract does not by itself have the effect of rescission.
On the other hand, a contract to sell is bilateral contract whereby the prospective seller, while
expressly reserving the ownership of the subject property despite its delivery to the prospective
buyer, commits to sell the property exclusively to the prospective buyer upon fulfillment of the
condition agreed upon, i.e., full payment of the purchase price. Full payment here is considered
as a positive suspensive condition.
As a result if the party contracting to sell, because of non-compliance with the suspensive
condition, seeks to eject the prospective buyer from, the land, the seller is enforcing the
contract and is not resolving it. The failure to pay is not a breach of contract but an event
which prevent the obligation to convey title from materializing.
In the present case, neither side was able to produce any written evidence documenting the actual
terms of their agreement. The trial court was correct in finding that there was no meeting of
minds in this case considering that the acceptance of the offer was not absolute and
uncondition. In earlier cases, the SC held that before a valid and binding contract of sale can
exist, the manner of payment of the purchase price must first be established.
Furthermore, the reservation of the title in the name of Platinum Plans clearly indicates an
intention of the parties to enter into a contract of sell.Where the seller promises to execute a
deed of absolute sale upon completion of the payment of purchase price, the agreement is a
contract to sell.
The court cannot, in this case, step in to cure the deficiency by fixing the period pursuant to
1. The relief sought by Cucueco was for specific performance to compel Platinum Plans to receive
the balance of the purchase price
2. The relief provide in Art 1592 only applies to contracts of sale
3. Because of the differing dates set by both parties, the court would have no basis for granting
Cucueco an extension of time within which to pay the outstanding balance
SELLER CANNOT TREAT THE CONTRACT AS CANCELLED WITHOUT SERVING
NOTICE
The act of a party in treating the contract as cancelled should be made known to the other party
because this act is subject to scrutiny and review by the courts in cased the alleged defaulter
brings the matter for judicial determination as explained in UP v. De los Angeles. In the case at
bar, there were repeated written notices sent by Platinum Plans to Cucueco that failure to pay the
balance would result in the cancellation of the contract and forfeiture of the down payment

already made. Under these circumstance, the cancellation made by Platinum Plans is valid and
reasonable (except for the forfeiture of the down payment because Cucueco never agreed to the
same)
EFFECTS OF CONTRACT TO SELL
A contract to sell would be rendered ineffective and without force and effect by the nonfulfillment of the buyers obligation to pay since this is a suspensive condition to the obligation
of the seller to sell and deliver the title of the property. As an effect, the parties stand as if the
conditional obligation had never existed. There can be no rescission of an obligation that is
still non-existent as the suspensive condition has not yet occurred.

20. BOSTON BANK OF THE PHILIPPINES VS. MANALO

FACTS:
1. Xavierville Estate, Inc. (XEI) sold to The Overseas Bank of Manila (OBM) some residential lots in
Xavierville subdivision. Nevertheless, XEI continued selling the residential lots in the subdivision as agent
of OBM.
2. Carlos Manalo, Jr. proposed to XEI, through its President Emerito Ramos (Ramos), that he will
purchase two lots in the Xavierville subdivision and offered as part of the downpayment the P34,887.66
Ramos owed him. XEI, through Ramos, agreed.
3. In a letter dated August 22, 1972 to Perla Manalo (Carlos wife), Ramos confirmed the reservation of
the lots. In the letter he also pegged the price of the lots at P348,060 with a 20% down payment of the
purchase price amounting to P69,612.00 (less the P34,887.66 owing from Ramos), payable as soon as
XEI resumes its selling operations; the corresponding Contract of Conditional Sale would then be signed
on or before the same date. Perla Manalo conformed to the letter agreement.
4. Thereafter, the spouses constructed a house on the property. The spouses were notified of XEIs
resumption of selling operations. However, they did not pay the balance of the downpayment because
XEI failed to prepare a contract of conditional sale and transmit the same to them. XEI also billed them for
unpaid interests which they also refused to pay. XEI turned over its selling operations to OBM.
5. Subsequently, Commercial Bank of Manila (CBM) acquired the Xavierville Estate from OBM. CBM
requested Perla Manalo to stop any on-going construction on the property since it (CBM) was the owner
of the lot and she had no permission for such construction. Perla informed them that her husband had a
contract with OBM, through XEI, to purchase the property. She promised to send CBM the documents.
However, she failed to do so. Thus, CBM filed a complaint for unlawful detainer against the spouses. But
later on, CBM moved to withdraw its complaint because of the issues raised. In the meantime, CBM was
renamed the Boston Bank of the Philippines.
6. Then, the spouses filed a complaint for specific performance and damages against the bank before the
RTC. The spouses alleged that they had always been ready and willing to pay the installments on the lots
sold to them but no contract was forthcoming. The spouses further alleged that upon their partial payment
of the downpayment, they were entitled to the execution and delivery of a Deed of Absolute Sale covering
the subject lots. During the trial, the spouses adduced in evidence the separate Contracts of Conditional

Sale executed between XEI and 3 other buyers to prove that XEI continued selling residential lots in the
subdivision as agent of OBM after the latter had acquired the said lots.
RTC :
The trial court ordered the petitioner (Boston Bank) to execute a Deed of Absolute Sale in favor of the
spouses upon the payment of the spouses of the balance of the purchase price. It ruled that under the
August 22, 1972 letter agreement of XEI and the spouses, the parties had a "complete contract to sell"
over the lots, and that they had already partially consummated the same.
CA:
The Court of Appeals sustained the ruling of the RTC, but declared that the balance of the purchase price
of the property was payable in fixed amounts on a monthly basis for 120 months, based on the deeds of
conditional sale executed by XEI in favor of other lot buyers.
Boston Bank filed a Motion for the Reconsideration of the decision alleging that there was no perfected
contract to sell the two lots, as there was no agreement between XEI and the respondents on the manner
of payment as well as the other terms and conditions of the sale. Boston Bank also asserts that there is
no factual basis for the CA ruling that the terms and conditions relating to the payment of the balance of
the purchase price of the property (as agreed upon by XEI and other lot buyers in the same subdivision)
were also applicable to the contract entered into between the petitioner and the respondents. CA denied
the MR.
ISSUES:
1.) Whether or not the factual issues raised by the petitioner are proper
2.) Whether or not there was a perfected contract to sell the property
3.) Whether or not the CA correctly held that the terms of the deeds of conditional sale executed by XEI in
favor of the other lot buyers in the subdivision, which contained uniform terms of 120 equal monthly
installments, constitute evidence that XEI also agreed to give the Manalo spouses the same mode and
timeline of payment. (Evidence, Disputable Presumptions, Habits and Customs Rule 130, Section 34)
HELD:
1.) YES. The rule is that before this Court, only legal issues may be raised in a petition for review on
certiorari. The reason is that this Court is not a trier of facts, and is not to review and calibrate the
evidence on record. Moreover, the findings of facts of the trial court, as affirmed on appeal by the Court of
Appeals, are conclusive on this Court unless the case falls under any of the following exceptions. 1 A
careful examination of the factual backdrop of the case, as well as the antecedental proceedings
constrains us to hold that petitioner is not barred from asserting that XEI or OBM, on one hand, and the
respondents, on the other, failed to forge a perfected contract to sell the subject lots.

(1) when the conclusion is a finding grounded entirely on speculations, surmises and conjectures; (2) when the inference made is manifestly mistaken, absurd or impossible;
(3) where there is a grave abuse of discretion; (4) when the judgment is based on a misapprehension of facts; (5) when the findings of fact are conflicting; (6) when the Court of
Appeals, in making its findings went beyond the issues of the case and the same is contrary to the admissions of both appellant and appellee; (7) when the findings are contrary
to those of the trial court; (8) when the findings of fact are conclusions without citation of specific evidence on which they are based; (9) when the facts set forth in the petition as
well as in the petitioners main and reply briefs are not disputed by the respondents; and (10) when the findings of fact of the Court of Appeals are premised on the supposed
absence of evidence and contradicted by the evidence on record. We have reviewed the records and we find that, indeed, the ruling of the appellate court dismissing petitioners
appeal is contrary to law and is not supported by evidence.

2.) NO. In a contract to sell property by installments, it is not enough that the parties agree on the price as
well as the amount of downpayment. The parties must, likewise, agree on the manner of payment of the
balance of the purchase price and on the other terms and conditions relative to the sale. Even if the buyer
makes a downpayment or portion thereof, such payment cannot be considered as sufficient proof of the
perfection of any purchase and sale between the parties. A contract of sale is perfected at the moment
there is a meeting of the minds upon the thing which is the object of the contract and the price. The
agreement as to the manner of payment goes into the price, such that a disagreement on the manner of
payment is tantamount to a failure to agree on the price. We have meticulously reviewed the records,
including Ramos February 8, 1972 and August 22, 1972 letters to respondents and find that said parties
confined themselves to agreeing on the price of the property (P348,060.00), the 20% downpayment of the
purchase price (P69,612.00), and credited respondents for the P34,887.00 owing from Ramos as part of
the 20% downpayment. Based on these two letters, the determination of the terms of payment of the
P278,448.00 had yet to be agreed upon on or before December 31, 1972, or even afterwards, when the
parties sign the contract of conditional sale. So long as an essential element entering into the proposed
obligation of either of the parties remains to be determined by an agreement which they are to make, the
contract is incomplete and unenforceable.
3.) NO. The bare fact that other lot buyers were allowed to pay the balance of the purchase price of lots
purchased by them in 120 or 180 monthly installments does not constitute evidence that XEI also agreed
to give the respondents the same mode and timeline of payment. Under Section 34, Rule 130 of the
Revised Rules of Court, evidence that one did a certain thing at one time is not admissible to prove that
he did the same or similar thing at another time, although such evidence may be received to prove habit,
usage, pattern of conduct or the intent of the parties. Habit, custom, usage or pattern of conduct must be
proved like any other facts. The offering party must establish the degree of specificity and frequency of
uniform response that ensures more than a mere tendency to act in a given manner but rather, conduct
that is semi-automatic in nature. The offering party must allege and prove specific, repetitive conduct that
might constitute evidence of habit. The examples offered in evidence to prove habit, or pattern of
evidence must be numerous enough to base on inference of systematic conduct. Mere similarity of
contracts does not present the kind of sufficiently similar circumstances to outweigh the danger of
prejudice and confusion. In determining whether the examples are numerous enough, and sufficiently
regular, the key criteria are adequacy of sampling and uniformity of response. It is only when examples
offered to establish pattern of conduct or habit are numerous enough to lose an inference of systematic
conduct that examples are admissible. Respondents failed to allege and prove that, as a matter of
business usage, habit or pattern of conduct, XEI granted all lot buyers the right to pay the balance of the
purchase price in installments of 120 months of fixed amounts with pre-computed interests, and that XEI
and the respondents had intended to adopt such terms of payment relative to the sale of the two lots in
question. Indeed, respondents adduced in evidence the three contracts of conditional sale executed by
XEI and other lot buyers merely to prove that XEI continued to sell lots in the subdivision as sales agent
of OBM after it acquired said lots, not to prove usage, habit or pattern of conduct on the part of XEI to
require all lot buyers in the subdivision to pay the balance of the purchase price of said lots in 120
months.

21. Toyota Shaw, Inc. vs. CA

Facts: Wanting to purchase a Toyota Lite-Ace, Sosa entered into an agreement with Popong Bernardo, a sales representative of
Toyota, entitled, Agreement between Mr. Sosa and Popong Bernardo of Toyota Shaw, Inc., which reads in part:
x x x 2. the downpayment of P100,000.00 will be paid by Mr. Sosa on June 15, 1989.
3. the TOYOTA SHAW, INC. LITE ACE yellow, will be pick-up [sic] and released by TOYOTA SHAW, INC. on the 17th of
June at 10 a.m. x x x (signed by Popong Bernardo)
It was also agreed upon by the parties that the balance of the purchase price would be paid by credit financing through B.A.
Finance.
However, as alleged by Toyota, on the date of the supposed pick-up and release of the car and after Sosa had paid the
downpayment and signed conforme to the sub-heading of a Vehicle Sales Proposal (VSP), Bernardo told Sosa that the Lite Ace
could not be delivered to him because of the disapproval by BA Finance of the credit financing of Sosa.
Issue: WON the document executed and signed by Toyota Shaw Inc.s sales representative is a perfected contract of sale. Or,
WON the provision on the downpayment of P100,000.00 made a specific reference to the sale of the vehicle.
Held:
No.
Article 1458 of the Civil Code defines a contract of sale as follows:
Art. 1458. By the contract of sale one of the contracting parties obligates himself to transfer the ownership of and to deliver a
determinate thing, and the other to pay therefor a price certain in money or its equivalent.
A contract of sale may be absolute or conditional.
and Article 1475 specifically provides when it is deemed perfected:
Art. 1475. The contract of sale is perfected at the moment there is a meeting of minds upon the thing which is the object of the
contract and upon the price.
From that moment, the parties may reciprocally demand performance, subject to the provisions of the law governing the form of
contracts.
It is not a contract of sale. No obligation on the part of Toyota to transfer ownership of a determinate thing to Sosa and no
correlative obligation on the part of the latter to pay therefor a price certain appears therein. The provision on the downpayment
of P100,000.00 made no specific reference to a sale of a vehicle. If it was intended for a contract of sale, it could only refer to a
sale on installment basis, as the VSP (Vehicle Sales Proposal) executed the following day confirmed. But nothing was mentioned
about the full purchase price and the manner the installments were to be paid.
This Court had already ruled that a definite agreement on the manner of payment of the price is an essential element in the
formation of a binding and enforceable contract of sale. 18 This is so because the agreement as to the manner of payment goes into
the price such that a disagreement on the manner of payment is tantamount to a failure to agree on the price. Definiteness as to
the price is an essential element of a binding agreement to sell personal property.

Toyota Shaw Inc. vs. Court of Appeals, and Sosa

244 SCRA 320
May 1995
FACTS:

Luna L. Sosa and his son, Gilbert, went to purchase a yellow Toyota Lite Ace from the Toyota office at Shaw
Boulevard, Pasig (petitioner Toyota) on June 14, 1989 where they met Popong Bernardo who was a sales
representative of said branch. Sosa emphasized that he needed the car not later than June 17, 1989 because he,
his family, and a balikbayan guest would be using it on June 18 to go home to Marinduque where he will celebrate
his birthday on June 19. Bernardo assured Sosa that a unit would be ready for pick up on June 17 at 10:00 in the
morning, and signed the "Agreements Between Mr. Sosa & Popong Bernardo of Toyota Shaw, Inc., a document
which did not mention anything about the full purchase price and the manner the installments were to be paid.
Sosa and Gilbert delivered the down payment of P100,000.00 on June 15, 1989 and Bernardo accomplished a
printed Vehicle Sales Proposal (VSP) No. 928 which showed Sosas full name and home address, that payment is by
"installment," to be financed by "B.A.," and that the "BALANCE TO BE FINANCED" is "P274,137.00", but the spaces
provided for "Delivery Terms" were not filled-up.
When June 17 came, however, petitioner Toyota did not deliver the Lite Ace. Hence, Sosa asked that his down
payment be refunded and petitioner Toyota issued also on June 17 a Far East Bank check for the full amount of
P100,000.00, the receipt of which was shown by a check voucher of Toyota, which Sosa signed with the
reservation, "without prejudice to our future claims for damages." Petitioner Toyota contended that the B.A.
Finance disapproved Sosas the credit financing application and further alleged that a particular unit had already
been reserved and earmarked for Sosa but could not be released due to the uncertainty of payment of the balance
of the purchase price. Toyota then gave Sosa the option to purchase the unit by paying the full purchase price in
cash but Sosa refused.
The trial court found that there was a valid perfected contract of sale between Sosa and Toyota which bound the
latter to deliver the vehicle and that Toyota acted in bad faith in selling to another the unit already reserved for
Sosa, and the Court of Appeals affirmed the said decision.
ISSUE:
Was there a perfected contract of sale between respondent Sosa and petitioner Toyota?
COURT RULING:
The Supreme Court granted Toyotas petition and dismissed Sosas complaint for damages because the document
entitled Agreements Between Mr. Sosa & Popong Bernardo of Toyota Shaw, Inc., was not a perfected contract of
sale, but merely an agreement between Mr. Sosa and Bernardo as private individuals and not between Mr. Sosa and
Toyota as parties to a contract.
There was no indication in the said document of any obligation on the part of Toyota to transfer ownership of a
determinate thing to Sosa and neither was there a correlative obligation on the part of the latter to pay therefor a
price certain. The provision on the downpayment of P100,000.00 made no specific reference to a sale of a vehicle.
If it was intended for a contract of sale, it could only refer to a sale on installment basis, as VSP No.928 executed
on June 15, 1989 confirmed. The VSP also created no demandable right in favor of Sosa for the delivery of the
vehicle to him, and its non-delivery did not cause any legally indemnifiable injury.