Professional Documents
Culture Documents
MCLAUGHLIN vs. CA
FACTS: Petitioner Luisa McLaughlin (seller) and private respondent Ramon
Flores (buyer) entered into a contract of conditional sale of real property. The
total purchase price is P140,000. P26,550 should be paid upon execution of
the deed and the balance not later than May 31, 1977 with an interest of 1%
per month until fully paid.
Flores failed to pay and hence petitioner filed a complaint for the rescission of
the deed of conditional sale. Eventually, the parties entered into a
compromise agreement, which was accepted by the court.
The parties agreed that Flores shall pay P50,000 upon signing of the
agreement and the balance in 2 equal instalments payable on June 30, 1980
and December 31, 1980. Flores also agreed to pay P1,000 monthly rental
until the obligation is fully paid for the use of the subject matter of the deed of
conditional sale. They also agreed that in the event Flores fails to comply with
his obligations, the petitioner will be entitled to the issuance of a writ of
execution rescinding the deed of conditional sale and all the payments made
will be forfeited in favor of the plaintiff.
On October 15, 1980, petitioner wrote to Flores demanding payment of the
balance on or before October 31. This demand included the instalment due on
June 30 and December 31, 1980.
On October 30, Flores sent a letter signifying his willingness and intention to
pay the full balance.
On November 7, petitioner filed a motion for writ of execution alleging that
Flores failed to pay the instalment due on June 1980 and also failed to pay
the monthly rentals from that date. She prayed that the deed of conditional
sale be rescinded with forfeiture of all payments and payment of the monthly
rentals and eviction of Flores. The trial court granted the motion.
On November 17, Flores filed a motion for reconsideration tendering at the
same time a certified managers check payable to petitioner and covering
the entire obligation including the December 1980 instalment. The trial
court denied the motion.
On appeal, the CA ruled in favor of Flores holding that the delay in payment
was not a violation of an essential condition which would warrant a
rescission since On November 17 or just 17 days from the October 31
FACTS:
The contract stipulated that the Daroya shall pay an initial amount upon
execution and the balance in 60
monthly installments. Adding the downpayment and installment
payments made by Daroya, it would appear that he has already paid
an amount higher than that stated as the contract price.
ISSUE:
W/n Active Realty can be compelled to refund to the respondent the value of
the lot or to deliver a substitute lot at Daroya's option.
HELD:
The contract to sell in the case at bar is governed by RA 6552 more popularly
known as the Maceda Law.
Daroya has already paid in 4 years a total amount exceeding the contract
price. Active Realty decided
to cancel the contract when Daroya defaulted on three monthly amortizations.
However the records clearly show that the petitioner failed to comply with the
mandatory twin requirements for a valid and effective cancellation under the
law, i.e. it failed to send a notarized notice of cancellation and refund the cash
surrender value. In fact, the records disclose that it was only during the
preliminary hearing of the case before the court tribunal when petitioner
offered to pay the cash surrender value.
The court finds it illegal that Active Realty without complying with the
mandatory requirements for cancelling the contract, forfeited both Daroya's
land and money after Daroya has paid for not just the contract price but more
than the consideration stated in the contract to sell.
For failure to cancel the contract in accordance with the procedure provided
by law, the court held that the
contract to sell between the parties remained valid and subsisting. Daroya has
the right to offer to pay for the balance of the purchase price without interest
which Daroya did in this case. However, Daroya can no longer exercise this
right as the subject lot was aLready sold by the petitioner to another buyer.
Petitioner is now ordered to refund to respondent the actual value to the lot
resold or deliver a substitute lot at the option of Daroya.
FABRIGAS vs. DEL MONTE
FACTS: Spouses Fabrigas(petitioner) and respondent San francisco Del
Monte, Inc.(Del Monte) entered into an agreement, denominated as Contract
to Sell No. 2482-V, whereby the latter agreed to sell to Spouses Fabrigas a
parcel of residential land. The said lot was worth P109,200.00 and it was
registered in the name of respondent Del Monte. The agreement stipulated
that Spouses Fabrigas shall pay P30,000.00 as downpayment and the
balance within ten years in monthly successive installments of P1,285.69.
100 cases a day so as to cope with the orders of the corporation's various
distributors and dealers, and with instructions to take only the necessary daily
employees without employing permanent employees. Again, on December 6,
1961, another memorandum was issued by the same President and General
Manager instructing the Assistant Chief Chemist Ricardo Francisco, to recall
all daily employees who are connected in the production of Mafran Sauce and
also some additional daily employees for the production of Porky Pops. On
December 29, 1960, another memorandum was issued by the President and
General Manager instructing Ricardo Francisco, as Chief Chemist, and
Porfirio Zarraga, as Acting Superintendent, to produce Mafran Sauce and
Porky Pops in full swing starting January 2, 1961 with further instructions to
hire daily laborers in order to cope with the full blast operation. Magdalo V.
Francisco, Sr. received his salary as Chief Chemist in the amount of P300.00
a month only until his services were terminated on November 30, 1960. On
January 9 and 16, 1961, UFC, acting thru its President and General Manager,
authorized Porfirio Zarraga and Paula de Bacula to look for a buyer of the
corporation including its trademarks, formula and assets at a price of not less
than P300,000.00. Due to these successive memoranda, without plaintiff
Magdalo V. Francisco, Sr. being recalled back to work, he filed the present
action on February 14,1961. Then in a letter dated March 20, 1961, UFC
requested said plaintiff to report for duty, but the latter declined the request
because the present action was already filed in court.
ISSUES:
1. Was the Bill of Assignment really one that
involves transfer of the formula for Mafran sauce itself?
2. Was petitioners contention that Magdalo
Francisco is not entitled to rescission valid?
RULING:
1. No. Certain provisions of the bill would lead one to believe that the formula
itself was transferred. To quote, the respondent patentee "assign, transfer
and convey all its property rights and interest over said Mafran trademark and
formula for MAFRAN SAUCE unto the Party of the Second Part," and the last
paragraph states that such "assignment, transfer and conveyance is absolute
and irrevocable (and) in no case shall the PARTY OF THE First Part ask,
demand or sue or the surrender of its rights and interest over said MAFRAN
trademark and mafran formula."
ISSUE: If the original contract was novated and the principal obligation to pay
for the remaining half of the subject property was transferred from petitioners
to Juliet.
Motion for Reconsideration was filed but CA denied the same for lack
of merit
ISSUES:
1. WON AN ORAL CONTRACT OF SALE IS BINDING [UPON] THE
SELLER.
2. WON A SELLER IN AN ORAL CONTRACT OF SALE CAN BE
COMPELLED TO EXECUTE THE REQUIRED DEED OF SALE
AFTER THE AGREED CONSIDERATION WAS PAID AND
POSSESSION THEREOF DELIVERED TO AND ENJOYED BY THE
BUYER.
3. WON THE BUYER HAS A RIGHT TO ENFORCE AN ORAL
CONTRACT OF SALE AFTER THE PORTION SOLD IS
SEGREGATED BY AGREEMENT OF THE PARTIES.
4. WON THE SELLER IS BOUND BY THE HANDWRITTEN RECEIPTS
PREPARED AND SIGNED BY HER EXPRESSLY INDICATING
PAYMENTS OF LOTS.
5. WON THE TRIAL COURT COULD RENDER A JUDGMENT ON
ISSUES NOT DEFINED IN THE PRE-TRIAL ORDER.
HELD:
Issue No. 1
Court distinguished a contract of sale from a contract to sell in that in
a contract of sale the title to the property passes to the buyer upon the
delivery of the thing sold; in a contract to sell, ownership is, by
agreement, reserved in the seller and is not to pass to the buyer until
full payment of the purchase price.
The absence of a provision in the Agreement transferring title from the
owner to the buyer is taken as a strong indication that the Agreement
is a contract to sell.
As stated in the Agreement, the payment of the purchase price, in
installments within the period stipulated, constituted a positive
suspensive condition, the failure of which is not really a breach but an
event that prevents the obligation of the seller to convey title in
accordance with Article 1184 of the Civil Code. Hence, for petitioners'
failure to comply with the terms and conditions laid down in the
Agreement, the obligation of the predecessor-in-interest of the
respondents to deliver and execute the corresponding deed of sale
never arose.
Issue No. 2
Issue No. 3
Issue No. 4
Lastly, petitioners argue that the courts below erred in imposing a P2,500.00
monthly rental from 1985 onwards, since said amount is far greater than the
last agreed monthly rental (December 1984) of P500.00.
In its Decision, the CA affirmed the ruling of the RTC "that the trial court had
authority to fix a reasonable value for the continued use and occupancy of the
leased premises after the termination of the lease contract, and that it was not
bound by the stipulated rental in the contract of lease since it is equally settled
that upon termination or expiration of the contract of lease, the rental
stipulated therein may no longer be the reasonable value for the use and
occupation of the premises as a result of the change or rise in values.
Moreover, the trial court can take judicial notice of the general increase in
rentals of real estate especially of business establishments".49 The appellate
court likewise held that the petitioners failed to discharge their burden to show
that the said price was exorbitant or unconscionable.50 Hence, the CA found
no reason to disturb the trial court's decision ordering the petitioners to pay
P2,500.00 as monthly rentals.51 The appellate court further held that "to
deprive Eugenia of the rentals due her as the owner-lessor of the subject
property would result to unjust enrichment on the part of Irene."52
The courts below correctly took judicial notice of the nature of the leased
property subject of the case at bench based on its location and commercial
viability. As described in the Agreement, the property is immediately in front of
St. Peter's College.53 More significantly, it is stated in the Declaration of Real
Property submitted by the petitioners as evidence in the trial court, that the
property is used predominantly for commercial purposes.54 The assessment
by the trial court of the area where the property is located is therefore fairly
grounded.
Furthermore, the trial court also had factual basis in arriving at the said
conclusion, the same being based on the un-rebutted testimony of a witness
who is a real estate broker. With respect to the prevailing valuation of the
property in litigation, witness Atty. Primero, a licensed real estate broker
testified that:
x x x There is no fixed pricing for each year because it always depends on the
environment so that if the price in 1986, as you were referring to 1986, it
would have risen or increased from P1,000.00, then it would increase to
P3,000.00, then it would increase to P7,000.00 and again increase to
P15,000.00 and right now the current price of property in that area is
P25,000.00 per square meter.55
The RTC rightly modified the rental award to P2,500.00 per month,
considering that it is settled jurisprudence that courts may take judicial notice
of the general increase in rentals, particularly in business establishments.
WHEREFORE, the petition is DENIED. The November 28, 2003 Decision of
the Court of Appeals affirming the October 22, 2001 Decision of the Regional
Trial Court of Lanao del Norte, Branch 2, is hereby AFFIRMED.
SO ORDERED.
KULANG 2 DIGEST
UNIVERSITY OF THE PHILIPPINES VS. DE LOS ANGELES
FACTS: On November 2, 1960, UP and ALUMCO entered into a logging
agreement whereby the latter was granted exclusive authority to cut, collect
and remove timber from the Land Grant for a period starting from the date of
agreement to December 31, 1965, extendible for a period of 5 years by
mutual agreement.
On December 8, 1964, ALUMCO incurred an unpaid account of P219,362.94.
Despite repeated demands, ALUMCO still failed to pay, so UP sent a notice
to rescind the logging agreement. On the other hand, ALUMCO executed an
instrument entitled Acknowledgment of Debt and Proposed Manner of
Payments. It was approved by the president of UP, which stipulated the
following:
In the event that the payments called for are not sufficient to liquidate the
foregoing indebtedness, the balance outstanding after the said payments
have been applied shall be paid by the debtor in full no later than June 30,
1965.
In the event that the debtor fails to comply with any of its promises, the Debtor
agrees without reservation that Creditor shall have the right to consider the
Logging Agreement rescinded, without the necessity of any judicial suit
ALUMCO continued its logging operations, but again incurred an unpaid
account. On July 19,1965, UP informed ALUMCO that it had, as of that date,
considered rescinded and of no further legal effect the logging agreement,
and that UP had already taken steps to have another concessionaire take
over the logging operation. ALUMCO filed a petition to enjoin UP from
conducting the bidding. The lower court ruled in favor of ALUMCO, hence, this
appeal.
ISSUE: Can petitioner UP treat its contract with ALUMCO
rescinded, and may disregard the same before any judicial
pronouncement to that effect?
RULING: YES. In the first place, UP and ALUMCO had expressly stipulated
that upon default by the debtor, UP has the right and the power to consider
the Logging Agreement of December 2, 1960 as rescinded without the
necessity of any judicial suit. As to such special stipulation and in connection
with Article 1191 of the Civil Code, the Supreme Court, stated in Froilan vs.
Pan Oriental Shipping Co:
There is nothing in the law that prohibits the parties from entering into
agreement that violation of the terms of the contract would cause cancellation
thereof, even without court intervention. In other words, it is not always
necessary for the injured party to resort to court for rescission of the contract.