CASE
FACTS
ISSUES
RULING
G.R.
No.
146839 March
23, 2011
Contested provision
1.
Are
Peaches
allowed
to
raise
their
theory of nullity
of
the
Conditional
Deed of Sale
for the first
time
on
appeal?
First. This is a situation where a party completely changes his theory of the case on
appeal and abandons his previous assignment of errors in his brief, which plainly
should not be allowed as anathema to due process.
PH National Construction Corp v. CA: when a party adopts a certain theory in the TC,
he will not be permitted to change his theory on appeal, for to permit him to do so
would not only be unfair to the other party but it would also be offensive to the basic
rules of fair play, justice and due process."
Catungal, et.
al.,
petitioners,
vs.
Rodriguez,
Respondents
.
5. That the VENDEE has the option to rescind the sale. In the event the VENDEE exercises his option to
rescind the herein Conditional Deed of Sale, the VENDEE shall notify the VENDOR by way of a written
notice relinquishing his rights over the property. The VENDEE shall then be reimbursed by the VENDOR
the sum of P500K representing the DP, interest free, payable but contingent upon the event that the
VENDOR shall have been able to sell the property to another party.
FACTS
Agapita T. Catungal owned Lot A (65,246 sq m) covered by OCT 105 at Talamban, Cebu City. The
said property was allegedly the exclusive paraphernal property of Agapita. Agapita, with the consent of
her husband Jose, entered into a Contract to Sell with Rodriguez. Subsequently, the Contract to Sell was
purportedly "upgraded" into a Conditional Deed of Sale. Both deeds were annotated on the title.
The parties entered into is a Conditional Deed of Sale, whereby the spouses Catungal
agreed to sell and Rodriguez agreed to buy Lot A conditioned on the payment of a certain price
but the payment of the purchase price was additionally made contingent on the successful
negotiation of a road right of way.
Spouses Catungal requested an advance of P5M on the purchase price. Rodriquez allegedly refused
on the ground that the amount was substantial and was not due under the terms of their
agreement. Shortly after his refusal to pay the advance, he purportedly learned that the Catungals
were offering the property for sale to third parties.
Jose Catungal demanded that the former make up his mind about buying the land or exercising his
"option" to buy because the spouses Catungal allegedly received other offers. Rodriguez registered his
objections to the unwarranted demands in view of the terms of the Conditional Deed of Sale which
allowed him sufficient time to negotiate a road right of way and granted him, the vendee, the exclusive
right to rescind the contract. Rodriguez purportedly received a letter dated Nov 9, 1990 15 from Atty.
Catungal, stating that the mcontract had been cancelled and terminated.
PROCEDURAL HISTORY
Catungals filed a MTD on the ground of improper venue. The subject property was located in Cebu
City and thus, the complaint should have been filed in Cebu City, not Lapu-lapu City.
Rodriguez opposed the MTD on the ground that his action was a personal action as its subject was
breach of a contract, the Conditional Deed of Sale, and not title to, or possession of real property.
Complaint involved a personal action, being merely for damages with a prayer for injunction.
Catungals alleged that they had the right to rescind the contract in view of
(1) Rodriguezs failure to negotiate the road right of way despite the lapse of several months since the
signing of the contract, and
(2) his refusal to pay the additional amount of P5M asked by the Catungals, which to them indicated
his lack of funds to purchase the property.
Catungals also allegedly misrepresented that the road right of way will only traverse two lots owned by
Anatolia Tudtud and her daughter Sally who were their relatives and who had already agreed to sell a
portion of the said lots for the road right of way at a price of P550.00 per sq m.
However, because of the Catungals acts of offering the property to other buyers who offered to buy the
road lots forP2,500.00 per sq m, the adjacent lot owners were no longer willing to sell the road lots to
Rodriguez atP550.00 per sq m but were asking for a price of P3,500.00 per sq m.
2. Do pars 1(b)
and 5 of the
Conditional
Deed of Sale
violate
the
principle
of
mutuality
of
contracts
under Art 1308
of the Civil
Code?
Second. right of way negotiation was not a potestative condition
The undertaking required of private respondent does not constitute a "potestative
condition dependent solely on his will" that might be void in accordance with NCC
1182 but a "mixed" condition "dependent not on the will of the vendor alone but also
of third persons like the squatters and government agencies and personnel
concerned."
Romero v. CA: Private respondent's failure "to remove the squatters from the property"
within the stipulated period gives Peaches the right to either refuse to proceed with
the agreement or waive that condition in consonance with NCC 1545. This option
clearly belongs to Peaches and not to private respondent.
Catungals should have filed an action to fix the period
What the Catungals should have done was to first file an action in court to fix the period
within which Rodriguez should accomplish the successful negotiation of the road
right of way. Catungals demand for Rodriguez to make an additional payment
of P5M was premature and Rodriguezs failure to accede to such demand did not
justify the rescission of the contract.
Rodriguezs option to rescind the contract is not absolute
Peaches insist that the Court examine the first sentence of par 5 alone gives the
respondent right to rescind arbitrarily. Therefore, the contract should be considered
as void.
NCC 1374: the various stipulations of a contract shall be interpreted together, attributing
to the doubtful ones that sense which may result from all of them taken jointly."
If some stipulation of any contract should admit of several meanings, it shall be
understood as bearing that import which is most adequate to render it effectual."
Under the Rules of Court it is prescribed that "[i]n the construction of an instrument
where there are several provisions or particulars, such a construction is, if possible,
to be adopted as will give effect to all" and "for the proper construction of an
instrument, the circumstances under which it was made, including the situation of
the subject thereof and of the parties to it, may be shown, so that the judge may be
placed in the position of those whose language he is to interpret."
Catungals filed a Petition for Certiorari and Prohibition37 with the CA, questioning the denial of their MTD
and the order of default.
TC ruled in favor of Rodriguez, finding that:
(a) under the contract it was (Rodriguez) that had the option to rescind the sale;
(b) Rodriguezs obligation to pay the balance of the purchase price arises only upon successful
negotiation of the road right of way;
(c) he proved his diligent efforts to negotiate the road right of way;
(d) the spouses Catungal were guilty of misrepresentation which defeated Rodriguezs efforts to
acquire the road right of way; and
CA affirming the TCs Decision.
Counsel for the Catungals, Atty. Borromeo, argued for the first time that pars 1(b) and 5 of the
Conditional Deed of Sale, whether taken separately or jointly, violated the principle of mutuality of
contracts under Art 1308 of the Civil Code and thus, said contract was void ab initio.
Doctrine
NCC 1374: the various stipulations of a contract shall be interpreted together, attributing to the doubtful
ones that sense which may result from all of them taken jointly."
If some stipulation of any contract should admit of several meanings, it shall be understood as bearing
that import which is most adequate to render it effectual."
Rodriguezs option to rescind the contract is not absolute as it is subject to the
requirement that there should be written notice to the vendor and the vendor shall
only return Rodriguezs DP of P500K, when the vendor shall have been able to sell
the property to another party.
The intention of the parties for providing subsequently in par 5 that Rodriguez
has the option to rescind the sale is undeniably only limited to the
contingency that Rodriguez shall not be able to secure the road right of way.
The reason only the DP was stipulated to be returned is that the vendees option to
rescind can only be exercised in the event that no road right of way is secured and,
thus, the vendee has not made any additional payments, other than his DP.
In the event the negotiation is successful, Rodriguez must pay the balance of the
purchase price. In the event the condition is not fulfilled (or the negotiation
fails), Rodriguez has the choice either (a) to not proceed with the sale and
demand return of his DP or (b) considering that the condition was imposed for
his benefit, to waive the condition and still pay the purchase price despite the
lack of road access. This is the most just interpretation of the parties contract
that gives effect to all its provisions.
Where the so-called potestative condition is imposed not on the birth of the obligation
but on its fulfillment, only the condition is avoided, leaving unaffected the obligation
itself."
Dispositive
Rodriguez is given a period of 30 days from the finality of this decision to negotiate a
road right of way.
In the event no road right of way is secured by Rodriquez at the end of said period, the
parties shall reassess and discuss other options as stipulated in par 1(b) of the
Conditional Deed of Sale and, for this purpose, they are given a period of 30 days to
agree on a course of action.
Should the discussions of the parties prove futile after the said 30-day period,
immediately upon the expiration of said period for discussion, Rodriguez may
(a) exercise his option to rescind the contract, subject to the return of his DP, in
accordance with the provisions of pars 1(b) and 5 of the Conditional Deed of Sale or
(b) waive the road right of way and pay the balance of the deducted purchase price
as determined in the RTC Decision dated May 30, 1992.
