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The Court of Appeals reversed the decision of the 1. Purchase price to be determined by the
trial court. It found that there was no perfected Liquidator
contract of sale between petitioner and respondent
bank. There was merely a series of offers and 2. Purchase price to be payable as follows:
counter-offers between the parties but they never
reached an agreement as to the purchase price. 2.A. P120,000.00 to be deposited immediately
and to be lodged as A/P for the undersigned
Petition to SC: Petitioner argues:
2.B. Balance to be paid once the restraining
1. The Court of Appeals gravely erred in finding order/preliminary injunction is lifted by the officers
that there was no perfected contract between the of Banco Filipino
parties.
On April 3, 1986, the Deputy Liquidator replied that
2. The Court of Appeals gravely erred in not they can only consider the sale of the property after
finding that the modified terms of payment the lifting of the Temporary Restraining Order
offered by petitioner was [sic] merely a condition issued by the Supreme Court and said sale shall be
on the performance of an obligation, not a subject to the Central Bank rules and regulations.
condition imposed on the perfection of the
contract. Clearly, there was no agreement yet between the
parties as regards the purchase price and the
It has been ruled that a definite agreement on the manner and schedule of its payment. Neither of
manner of payment of the purchase price is an them had expressed acceptance of the other
essential element in the formation of a binding and partys offer and counter-offer.
enforceable contract of sale. The exchange of
letters between petitioner and respondent shows Notable is petitioners letter to the banks Deputy
that petitioner first offered to buy the property Liquidator, Mr. Alberto V. Reyes, which reveals that
for P310,000.00, considering the numerous repairs she herself believed that no agreement has yet
that had to be done in the house. Respondent, in its been reached by the parties as regards the
letter dated September 20, 1984, informed purchase price after the exchange of
communication between her and the bank. In said
letter, she made a totally new proposal for
consideration of the banks Liquidator that the
purchase price shall be determined by the
Liquidator; that she would deposit the amount
of P120,000.00 to be lodged in her accounts
payable; and that she would pay the balance after
the lifting of the temporary restraining order issued
by the Court on the banks transactions.
Decision affirmed.
5. Subsequently, Commercial Bank of Manila (CBM)
acquired the XaviervilleEstate from OBM. CBM
requested Perla Manalo to stop any on-goingconstruction
on the property since it (CBM) was the owner of the lot
G. R. No. 158149 February 9, 2006 and shehad no permission for such construction. Perla
informed them that her husband had a contract with
BOSTON BANK OF THE PHILIPPINES, (formerly OBM, through XEI, to purchase the property.She
BANK OF COMMERCE), Petitioner, promised to send CBM the documents. However, she
vs. failed to do so.Thus, CBM filed a complaint for
PERLA P. MANALO and CARLOS MANALO, JR., unlawful detainer against the spouses. Butlater on, CBM
Respondents. moved to withdraw its complaint because of the issues
raised.In the meantime, CBM was renamed the Boston
ISSUE: whether petitioner or its predecessors-in-interest, Bank of the Philippines.
the XEI or the OBM, as seller, and the respondents, as
buyers, forged a perfect contract to sell over the 6. Then, the spouses filed a complaint for specific
property. performance and damagesagainst the bank before the
RTC. The spouses alleged that they had alwaysbeen
1. Xavierville Estate, Inc. (XEI) sold to The Overseas ready and willing to pay the installments on the lots sold
Bank of Manila (OBM)some residential lots in to them but nocontract was forthcoming. The spouses
Xavierville subdivision. Nevertheless, XEI further alleged that upon their partialpayment of the
continuedselling the residential lots in the subdivision as downpayment, they were entitled to the execution
agent of OBM. anddelivery of a Deed of Absolute Sale covering the
subject lots. During the trial,the spouses adduced in
2. Carlos Manalo, Jr. proposed to XEI, through its evidence the separate Contracts of Conditional
President Emerito Ramos(Ramos), that he will purchase Saleexecuted between XEI and 3 other buyers to prove
two lots in the Xavierville subdivision andoffered as part that XEI continued sellingresidential lots in the
of the downpayment the P34,887.66 Ramos owed him. subdivision as agent of OBM after the latter hadacquired
XEI,through Ramos, agreed. the said lots.
3. In a letter dated August 22, 1972 to Perla Manalo RTC : The trial court ordered the petitioner (Boston
(Carlos wife), Ramosconfirmed the reservation of the Bank) to execute a Deed of Absolute Sale in favor of the
lots. In the letter he also pegged the price of the lots at spouses upon the payment of the spouses of the balance
P348,060 with a 20% down payment of the purchase of the purchase price. It ruled that under the August 22,
priceamounting to P69,612.00 (less the P34,887.66 1972letter agreement of XEI and the spouses, the parties
owing from Ramos), payableas soon as XEI resumes its had a "completecontract to sell" over the lots, and that
selling operations; the corresponding Contract of they had already partiallyconsummated the same.
Conditional Sale would then be signed on or before the
same date. PerlaManalo conformed to the letter CA: The Court of Appeals sustained the ruling of the
agreement. RTC, but declared that thebalance of the purchase price
of the property was payable in fixed amountson a
4. Thereafter, the spouses constructed a house on the monthly basis for 120 months, based on the deeds of
property. The spouses were notified of XEIs resumption conditional saleexecuted by XEI in favor of other lot
of selling operations. However,they did not pay the buyers.Boston Bank filed a Motion for the
balance of the downpayment because XEI failed Reconsideration of the decision allegingthat there was
toprepare a contract of conditional sale and transmit the no perfected contract to sell the two lots, as there was
same to them. XEIalso billed them for unpaid interests noagreement between XEI and the respondents on the
which they also refused to pay. XEIturned over its manner of payment aswell as the other terms and
selling operations to OBM. conditions of the sale. Boston Bank also assertsthat there
is no factual basis for the CA ruling that the terms and
conditionsrelating to the payment of the balance of the Based on these two letters, the determination of the
purchase price of the property(as agreed upon by XEI terms of payment of the P278,448.00 had yet to be
and other lot buyers in the same subdivision) werealso agreed upon on or before December 31, 1972, or even
applicable to the contract entered into between the afterwards, when the parties sign the corresponding
petitioner and therespondents. CA denied the MR. contract of conditional sale.
Boston Bank, now petitioner, filed the instant petition for Jurisprudence is that if a material element of a
review on certiorari assailing the CA rulings. contemplated contract is left for future negotiations, the
same is too indefinite to be enforceable. And when an
SC:Petitioner posits that, even on the assumption that essential element of a contract is reserved for future
there was a perfected contract to sell between the parties, agreement of the parties, no legal obligation arises until
nevertheless, it cannot be compelled to convey the such future agreement is concluded
property to the respondents because the latter failed to
pay the balance of the downpayment of the property, as It bears stressing that the respondents failed and refused
well as the balance of 80% of the purchase price, thus to pay the balance of the downpayment and of the
resulting in the extinction of its obligation to convey title purchase price of the property amounting to P278,448.00
to the lots to the Respondents. despite notice to them of the resumption by XEI of its
selling operations. The respondents enjoyed possession
Respondents further posit that the terms and conditions of the property without paying a centavo. On the other
to be incorporated in the "corresponding contract of hand, XEI and OBM failed and refused to transmit a
conditional sale" to be executed by the parties would be contract of conditional sale to the Respondents. The
the same as those contained in the contracts of respondents could have at least consigned the balance of
conditional sale executed by lot buyers in the the downpayment after notice of the resumption of the
subdivision. After all, they maintain, the contents of the selling operations of XEI and filed an action to compel
corresponding contract of conditional sale referred to in XEI or OBM to transmit to them the said contract;
the August 22, 1972 letter agreement envisaged those however, they failed to do so.
contained in the contracts of conditional sale that XEI
and other lot buyers executed. As a consequence, respondents and XEI (or OBM for
that matter) failed to forge a perfected contract to sell the
A definite agreement as to the price is an essential two lots; hence, respondents have no cause of action for
element of a binding agreement to sell personal or real specific performance against petitioner. Republic Act
property because it seriously affects the rights and No. 6552 "Realty Installment Buyer Act." applies only to
obligations of the parties. Price is an essential element in a perfected contract to sell and not to a contract with no
the formation of a binding and enforceable contract of binding and enforceable effect.
sale. The fixing of the price can never be left to the
decision of one of the contracting parties. But a price The petition is granted. The decision of CA is reversed
fixed by one of the contracting parties, if accepted by the and set aside.
other, gives rise to a perfected sale.
ISSUE: ISSUE: whether or not the contract is a c. Ownership over the property shall not pass until
perfected contract of sale payment of the full purchase price
FACTS: Respondent Cucueco filed a case for specific Petitioners anchor their argument on the claim that there
performance with damages against petitioner Platinum was no meeting of the minds between the two parties, as
Plans pursuant to an alleged contract of sale executed by evidenced by their letter of non-acceptance.
them for the purchase of a condominium unit.
The trial court ruled in favor of Platinum, citing that
According to the respondent: sometime in July 1993, he since the element of consent was absent there was no
offered to buy from petitioner Platinum Plans Phils a perfected contract. The trial court ordered Platinum
condominium unit he was leasing from the latter for P 4 Plans to return the P2 million they had received from
million payable in 2 installments of P2 million with the Cucueco, and for Cucueco to pay Platinum Plans rentals
following terms and conditions: in arrears for the use of the unit.
a. Cucueco will issue a check for P100,00 as earnest Upon appeal, CA held that there was a perfected
money contract despite the fact that both parties never agreed on
the date of payment of the remaining balance. CA
b. He will issue a post-dated check for P1.9 million to ordered Cucueco to pay the remaining balance of the
be encashed on September 30, 1993 on the condition that
purchase price and for Platinum Plans, to execute a deed Furthermore, the reservation of the title in the name of
of sale over the property Platinum Plans clearly indicates an intention of the
parties to enter into a contract to sell. Where the seller
HELD: it is a contract to sell. promises to execute a deed of absolute sale upon
completion of the payment of purchase price, the
In a contract of sale, the vendor cannot recover agreement is a contract to sell.
ownership of the thing sold until and unless the contract
itself is resolved and set aside. Art 1592 provides: The court cannot, in this case, step in to cure the
deficiency by fixing the period pursuant to:
In the sale of immovable property, even though it may
have been stipulated that upon failure to pay the price at 1.The relief sought by Cucueco was for specific
the time agreed upon, the rescission of the contract shall performance to compel Platinum Plans to receive the
of right take place, the vendee may pay, even after the balance of the purchase price.
expiration of the period, as long as no demand for
rescission of the contract has been upon him either 2.The relief provide in Art 1592 only applies to contracts
judicially or by a notarial act. After the demand, the of sale
court may not grant him a new term.
3. Because of the differing dates set by both parties, the
Based on the above provision, a party who fails to court would have no basis for granting Cucueco an
invoke judicially or by notarial act would be prevented extension of time within which to pay the outstanding
from blocking the consummation of the same in light of balance
the precept that mere failure to fulfill the contract does
not by itself have the effect of rescission. SELLER CANNOT TREAT THE CONTRACT AS
CANCELLED WITHOUT SERVING NOTICE
On the other hand, a contract to sell is bilateral contract
whereby the prospective seller, while expressly reserving The act of a party in treating the contract as cancelled
the ownership of the subject property despite its delivery should be made known to the other party because this act
to the prospective buyer, commits to sell the property is subject to scrutiny and review by the courts in cased
exclusively to the prospective buyer upon fulfillment of the alleged defaulter brings the matter for judicial
the condition agreed upon, i.e., full payment of the determination as explained in UP v. De los Angeles. In
purchase price. Full payment here is considered as a the case at bar, there were repeated written notices sent
positive suspensive condition. by Platinum Plans to Cucueco that failure to pay the
balance would result in the cancellation of the contract
As a result if the party contracting to sell, because of and forfeiture of the down payment already made. Under
non-compliance with the suspensive condition, seeks to these circumstance, the cancellation made by Platinum
eject the prospective buyer from, the land, the seller is Plans is valid and reasonable (except for the forfeiture of
enforcing the contract and is not resolving it. The failure the down payment because Cucueco never agreed to the
to pay is not a breach of contract but an event which same)
prevent the obligation to convey title from materializing.
EFFECTS OF CONTRACT TO SELL
In the present case, neither side was able to produce any
written evidence documenting the actual terms of their A contract to sell would be rendered ineffective and
agreement. The trial court was correct in finding that without force and effect by the non-fulfillment of the
there was no meeting of minds in this case considering buyers obligation to pay since this is a suspensive
that the acceptance of the offer was not absolute and condition to the obligation of the seller to sell and
uncondition. In earlier cases, the SC held that before a deliver the title of the property. As an effect, the parties
valid and binding contract of sale can exist, the manner stand as if the conditional obligation had never existed.
of payment of the purchase price must first be There can be no rescission of an obligation that is still
established. non-existent as the suspensive condition has not yet
occurred.
CAS RELIANCE ON LEVY HERMANOS V. REYNALDO VILLANUEVA, petitioner,
GERVACIO IS MISPLACED vs.
PHILIPPINE NATIONAL BANK
It was unnecessary for CA to distinguish whether the (PNB), respondent.
transaction between the parties was an installment sale
or a straight sale. In the first place, there is no valid and ISSUE: Whether a perfected contract of sale exists
enforceable contract to speak of. between petitioner and respondent PNB