Republic of the Philippines

SUPREME COURT
Manila
FIRST DIVISION
G.R. No. L-42283 March 18, 1985
BUENAVENTURA ANGELES, ET AL., plaintiffs-appellees,
vs.
URSULA TORRES CALASAN, ET AL., defendants-
appellants.

GUT!ERRE, "R., J.:
This is an appeal fo! the decision of the "out of Fist Instance
of Ri#al, Seventh $udicial Distict, %anch &, declain' the
contact to sell as not havin' been validl( cancelled and odein'
the defendants-appellants to e)ecute a final deed of sale in favo
of the plaintiffs-appellees, to pa( P*++.++ attone(,s fees and
costs.
The facts bein' undisputed, the "out of -ppeals cetified the
case to us since onl( pue .uestions of la/ have been aised fo
appellate evie/.
On Dece!be 01, 01*2, defendants-appellants 3sula Toes
"alasan# and To!as "alasan# and plaintiffs-appellees
%uenaventua -n'eles and Teofila $uani enteed into a contact to
sell a piece of land located in "ainta, Ri#al fo the a!ount of
P4,15+.++ plus 26 inteest pe annu!.
The plaintiffs-appellees !ade a do/npa(!ent of P415.++ upon
the e)ecution of the contact. The( po!ised to pa( the balance in
!onthl( install!ents of P 70.5+ until full( paid, the install!ents
bein' due and pa(able on the 01th da( of each !onth. The
plaintiffs-appellees paid the !onthl( install!ents until $ul( 0188,
/hen thei a''e'ate pa(!ent alead( a!ounted to P7,*44.49. On
nu!eous occasions, the defendants-appellants accepted and
eceived dela(ed install!ent pa(!ents fo! the plaintiffs-
appellees.
On Dece!be 2, 0188, the defendants-appellants /ote the
plaintiffs-appellees a lette e.uestin' the e!ittance of past due
accounts.
On $anua( 59, 0182, the defendants-appellants cancelled the said
contact because the plaintiffs-appellees failed to !eet subse.uent
pa(!ents. The plaintiffs, lette /ith thei plea fo econsideation
of the said cancellation /as denied b( the defendants-appellants.
The plaintiffs-appellees filed "ivil "ase No. 9174 /ith the "out
of Fist Instance of Ri#al, Seventh $udicial Distict, %anch & to
co!pel the defendants-appellants to e)ecute in thei favo the
final deed of sale alle'in' inte alia that afte co!putin' all
subse.uent pa(!ents fo the land in .uestion, the( found out that
the( have alead( paid the total a!ount of P7,*44.49 includin'
inteests, ealt( ta)es and incidental e)penses fo the e'istation
and tansfe of the land.
The defendants-appellants alle'ed in thei ans/e that the
co!plaint states no cause of action and that the plaintiffs-
appellees violated paa'aph si) :8; of the contact to sell /hen
the( failed and efused to pa( and<o offe to pa( the !onthl(
install!ents coespondin' to the !onth of -u'ust, 0188 fo
!oe than five :*; !onths, theeb( constainin' the defendants-
appellants to cancel the said contact.
The lo/e cout endeed =ud'!ent in favo of the plaintiffs-
appellees. The dispositive potion of the decision eads>
?@ARAFORA, based on the foe'oin'
consideations, the "out heeb( endes
=ud'!ent in favo of the plaintiffs and a'ainst
the defendants declain' that the contact
sub=ect !atte of the instant case /as NOT
V-BIDBC cancelled b( the defendants.
"onse.uentl(, the defendants ae odeed to
e)ecute a final Deed of Sale in favo of the
plaintiffs and to pa( the su! of P*++.++ b( /a(
of attone(,s fees. "osts a'ainst the defendants.
- !otion fo econsideation filed b( the defendants-appellants
/as denied.
-s ealie stated, the then "out of -ppeals cetified the case to us
considein' that the appeal involves pue .uestions of la/.
The defendants-appellants assi'ned the follo/in' alle'ed eos
of the lo/e cout>
Fist -ssi'n!ent of Ao
T@A BO?AR "O3RT ARRAD IN NOT
@OBDIND T@A "ONTR-"T TO SABB
:-NNA& E-E OF "OMPBI-N"A; -S
@-VIND %AAN BAD-BBC -ND V-BIDBC
"-N"ABBAD.
Second -ssi'n!ent of Ao
AVAN -SS3MIND -RD3ANDO T@-T T@A
S-ID "ONTR-"T TO SABB @-S NOT
%AAN BAD-BBC -ND V-BIDBC
"-N"ABBAD, T@A BO?AR "O3RT
ARRAD IN ORDARIND DAFAND-NTS TO
A&A"3TA - FIN-B DAAD OF S-BA IN
F-VOR OF T@A PB-INTIFF.
Thid -ssi'n!ent of Ao
T@A BO?AR "O3RT ARRAD IN
ORDARIND DAFAND-NTS TO P-C
PB-INTIFFS T@A S3M OF P*++.++ -S
-TTORNAC,S FAAS.
The !ain issue to be esolved is /hethe o not the contact to sell
has been auto!aticall( and validl( cancelled b( the defendants-
appellants.
The defendants-appellants sub!it that the contact /as validl(
cancelled pusuant to paa'aph si) of the contact /hich
povides>
))) ))) )))
SI&T@.FIn case the pat( of the SA"OND
P-RT fails to satisf( an( !onthl( install!ents,
o an( othe pa(!ents heein a'eed upon, he is
'anted a !onth of 'ace /ithin /hich to !aGe
the etaded pa(!ent, to'ethe /ith the one
coespondin' to the said !onth of 'aceH it is
undestood, ho/eve, that should the !onth of
'ace heein 'anted to the pat( of the
SA"OND P-RT e)piedH /ithout the pa(!ents
coespondin' to both !onths havin' been
satisfied, an inteest of 0+6 pe annu! /ill be
cha'ed on the a!ounts he should have paidH it
is understood further, that should a period of
90 days elapse, to begin from the expiration of
the month of grace herein mentioned, and the
party of SECOND P!" has not paid all the
amounts he should ha#e paid $ith the
corresponding interest up to that date, the party
of the %&!S" P!" has the right to declare this
contract cancelled and of no effect, and as
conse'uence thereof, the party of the %&!S"
P!" may dispose of the parcel of land
co#ered by this contract in fa#or of other
persons, as if this contract had ne#er been
entered into. In case of such cancellation of the
contact, all the a!ounts paid in accodance
/ith this a'ee!ent to'ethe /ith all the
i!pove!ents !ade on the pe!ises, shall be
consideed as ents paid fo the use and
occupation of the above !entioned pe!ises,
and as pa(!ent fo the da!a'es suffeed b(
failue of the pat( of the SA"OND P-RT to
fulfill his pat of the a'ee!entH and the pat( of
the SA"OND P-RT heeb( enounces all his
i'ht to de!and o eclai! the etun of the
sa!e and obli'es hi!self to peacefull( vacate
the pe!ises and delive the sa!e to the pat(
of the FIRST P-RT. :A!phasis supplied b(
appellant;
))) ))) )))
The defendants-appellants a'ue that the plaintiffs-appellees
failed to pa( the -u'ust, 0188 install!ent despite de!ands fo
!oe than fou :7; !onths. The defendants-appellants point to
(ocson #) Capitol Subdi#ision :D.R. No. B-8*24, Febua( 59,
01**; /hee this "out upheld the i'ht of the subdivision o/ne
to auto!aticall( cancel a contact to sell on the sten'th of a
povision o stipulation si!ila to paa'aph 8 of the contact in
this case. The defendants-appellants also a'ue that even in the
absence of the afoe.uoted povision, the( had the i'ht to cancel
the contact to sell unde -ticle 0010 of the "ivil "ode of the
Philippines.
The plaintiffs-appellees on the othe hand contend that the (ocson
ulin' does not appl(. The( state that paa'aph 8 of the contact
to sell is conta( to la/ insofa as it povides that in case of
specified beaches of its te!s, the selles have the i'ht to declae
the contact cancelled and of no effect, because it 'anted the
selles an absolute and auto!atic i'ht of escission.
-ticle 0010 of the "ivil "ode on the escission of ecipocal
obli'ations povides>
The po/e to escind obli'ations is i!plied in
ecipocal ones, in case one of the obli'os
should not co!pl( /ith /hat is incu!bent upon
hi!.
The in=ued pat( !a( choose bet/een the
fulfill!ent and the escission of the obli'ation,
/ith the pa(!ent of da!a'es in eithe case. @e
!a( also seeG escission, even afte he has
chosen fulfill!ent, if the latte should beco!e
i!possible.
))) ))) )))
-ticle 0010 is e)plicit. In ecipocal obli'ations, eithe pat( the
i'ht to escind the contact upon the failue of the othe to
pefo! the obli'ation assu!ed theeunde. Moeove, thee is
nothin' in the la/ that pohibits the paties fo! entein' into an
a'ee!ent that violation of the te!s of the contact /ould cause
its cancellation even /ithout cout intevention :Foilan v. Pan
Oiental Shippin', "o., et al., 05 S"R- 528;F
?ell settled is, ho/eve, the ule that a =udicial
action fo the escission of a contact is not
necessa( /hee the contact povides that it
!a( be evoGed and cancelled fo violation of
an( of its te!s and conditions, :Bope# v.
"o!!issione of "usto!s, 42 S"R- 452, and
cases cited theein;
Resot to =udicial action fo escission is
obviousl( not conte!plated . . . The validit( of
the stipulation can not be seiousl( disputed. It
is in the natue of a facultative esoluto(
condition /hich in !an( cases has been upheld
b( this "out. :Ponce Anile v. "out of
-ppeals, 51 S"R- *+7;.
The ule that it is not al/a(s necessa( fo the in=ued pat( to
esot to cout fo escission of the contact /hen the contact
itself povides that it !a( be escinded fo violation of its te!s
and conditions, /as .ualified b( this "out in *ni#ersity of the
Philippines #) De los ngeles, :4* S"R- 0+5; /hee /e
e)plained that>
Of couse, it !ust be undestood that the act of
a pat( in teatin' a contact as cancelled o
esolved on account of infactions b( the othe
contactin' pat( !ust be !ade Gno/n to the
othe and is al/a(s povisional, bein' eve
sub=ect to scutin( and evie/ b( the pope
cout. If the othe pat( denies that escission is
=ustified, it is fee to esot to =udicial action in
its o/n behalf, and bin' the !atte to cout.
Then, should the cout, afte due heain',
decide that the esolution of the contact /as
not /aanted, the esponsible pat( /ill be
sentenced to da!a'esH in the conta( case, the
esolution /ill be affi!ed, and the conse.uent
inde!nit( a/aded to the pat( pe=udiced.
In othe /ods, the pat( /ho dee!s the
contact violated !an( conside it esolved o
escinded, and act accodin'l(, /ithout
pevious cout action, but it proceeds at its o$n
ris+. Fo it is onl( the final =ud'!ent of the
coespondin' cout that /ill conclusivel( and
finall( settle /hethe the action taGen /as o
/as not coect in la/. ... .
?e see no conflict bet/een this ulin' and the
pevious =uispudence of this "out invoGed b(
espondent declain' that =udicial action is
necessa( fo the esolution of a ecipocal
obli'ationH :Oce=o, Pee# I "o. v. Intenational
%anGin' "op., 42 Phil. 840H Republic v.
@ospital de San $uan de Dios, et al., 97 Phil.
95+; since in eve( case /hee the e)ta=udicial
esolution is contested onl( the final a/ad of
the cout of co!petent =uisdiction can
conclusivel( settle /hethe the esolution /as
pope o not. It is in this sense that =udicial
action /ill be necessa(, as /ithout it, the
e)ta=udicial esolution /ill e!ain contestable
and sub=ect to =udicial invalidation, unless
attacG theeon should beco!e baed b(
ac.uiescence, estoppel o pesciption.
The i'ht to escind the contact fo non-pefo!ance of one of its
stipulations, theefoe, is not absolute. In *ni#ersal %ood Corp) #)
Court of ppeals :44 S"R- 0; the "out stated thatF
The 'eneal ule is that escission of a contact
/ill not be pe!itted fo a sli'ht o casual
beach, but onl( fo such substantial and
funda!ental beach as /ould defeat the ve(
ob=ect of the paties in !aGin' the a'ee!ent.
:Son' Fo I "o. v. @a/aiian-Philippine "o., 72
Phil. 950, 952; The .uestion of /hethe a
beach of a contact is substantial depends upon
the attendant cicu!stances. :"opus v. @on.
-liGpala, et al., B-542+2 I B-5425+, $an. 02,
0189;. ... .
The defendants-appellants state that the plaintiffs-appellees
violated Section t/o of the contact to sell /hich povides>
SA"OND.FThat in consideation of the
a'ee!ent of sale of the above descibed
popet(, the pat( of the SA"OND P-RT
obli'ates hi!self to pa( to the pat( of the
FIRST P-RT the Su! of T@RAA
T@O3S-ND NINA @3NDRAD T?ANTC
ONBC :P4,15+.++;, Philippine "uenc(, plus
inteest at the ate of 26 pe annu!, as follo/s>
:a; The a!ount of T@RAA @3NDRAD
NINATC T?O onl( :P415.++; /hen this
contact is si'nedH and
:b; The su! of FORTC ONA -ND 5+<0++
ONBC :P7l.5+; on o befoe the 01th da( of
each !onth, fo! this date until the total
pa(!ent of the pice above stipulated, includin'
inteest.
because the( failed to pa( the -u'ust install!ent, despite
de!and, fo !oe than fou :7; !onths.
The beach of the contact adveted to b( the defendants-
appellants is so sli'ht and casual /hen /e conside that apat
fo! the initial do/npa(!ent of P415.++ the plaintiffs-appellees
had alead( paid the !onthl( install!ents fo a peiod of al!ost
nine :1; (eas. In othe /ods, in onl( a shot ti!e, the entie
obli'ation /ould have been paid. Futhe!oe, althou'h the
pincipal obli'ation /as onl( P 4,15+.++ e)cludin' the 2 pecent
inteests, the plaintiffs- appellees had alead( paid an a''e'ate
a!ount of P 7,*44.49. To sanction the escission !ade b( the
defendants-appellants /ill /oG in=ustice to the plaintiffs-
appellees. :See $.M. Tua#on and "o., Inc. v. $avie, 40 S"R-
951; It /ould un=ustl( enich the defendants-appellants.
-ticle 0547 of the "ivil "ode /hich povides that>
If the obli'ation has been substantiall(
pefo!ed in 'ood faith, the obli'o !a(
ecove as thou'h thee had been a stict and
co!plete fulfill!ent, less da!a'es suffeed b(
the obli'ee.
also !ilitates a'ainst the unilateal act of the defendants-
appellants in cancellin' the contact.
?e a'ee /ith the obsevation of the lo/e cout to the effect
that>
-lthou'h the pi!a( ob=ect of sellin'
subdivided lots is business, (et, it cannot be
denied that this subdivision is liGe/ise
puposel( done to affod those landless, lo/
inco!e 'oup people of eali#in' thei dea! of
a little pacel of land /hich the( can eall( call
thei o/n.
The defendants-appellants cannot el( on paa'aph 1 of the
contact /hich povides>
NINT@.-That /hateve consideation of the
pat( of the FIRST P-RT !a( concede to the
pat( of the SA"OND P-RT, as not e)actin' a
stict co!pliance /ith the conditions of
paa'aph 8 of this contact, as /ell as an(
othe condonation that the pat( of the FIRST
P-RT !a( 'ive to the pat( of the SA"OND
P-RT /ith e'ads to the obli'ations of the
latte, should not be intepeted as a
enunciation on the pat of the pat( of the
FIRST P-RT of an( i'ht 'anted it b( this
contact, in case of default o non-co!pliance
b( the pat( of the SA"OND P-RT.
The defendants-appellants a'ue that paa'aph nine cleal(
allo/s the selle to /aive the obsevance of paa'aph 8 not
!eel( once, but fo as !an( ti!es as he /ishes.
The defendants-appellants, contention is /ithout !eit. ?e a'ee
/ith the plaintiffs-appellees that /hen the defendants-appellants,
instead of availin' of thei alle'ed i'ht to escind, have accepted
and eceived dela(ed pa(!ents of install!ents, thou'h the
plaintiffs-appellees have been in aeas be(ond the 'ace peiod
!entioned in paa'aph 8 of the contact, the defendants-
appellants have /aived and ae no/ estopped fo! e)ecisin'
thei alle'ed i'ht of escission. In De ,u-man #) ,uieb :79
S"R- 89;, /e held that>
))) ))) )))
%ut defendants do not den( that in spite of the
lon' aeaa'es, neithe the( no thei
pedecesso, Teodoo de Du#!an, even tooG
steps to cancel the option o to e=ect the
appellees fo! the ho!e-lot in .uestion. On the
conta(, it is ad!itted that the dela(ed
pa(!ents /ee eceived /ithout potest o
.ualification. ... 3nde these cicu!stances, ?e
cannot but a'ee /ith the lo/e cout that at the
ti!e appellees e)ecised thei option, appellants
had alead( fofeited thei i'ht to invoGe the
above-.uoted povision e'adin' the nullif(in'
effect of the non-pa(!ent of si) !onths entals
b( appellees b( thei havin' accepted /ithout
.ualification on $ul( 50, 0187 the full pa(!ent
b( appellees of all thei aeaa'es.
The defendants-appellants contend in the second assi'n!ent of
eo that the led'e of pa(!ents sho/ a balance of P820,82 due
fo! the plaintiffs-appellees. The( sub!it that /hile it is tue that
the total !onthl( install!ents paid b( the plaintiffs-appellees !a(
have e)ceeded P4,15+.++, a substantial potion of the said
pa(!ents /ee applied to the inteests since the contact
specificall( povides fo a 26 inteest pe annu! on the
e!ainin' balance. The defendants-appellants el( on paa'aph 5
of the contact /hich povides>
SA"OND.FThat in consideation of the
a'ee!ent of sale of the above descibed
popet(, the pat( of the SA"OND P-RT
obli'ates hi!self to pa( to the pat( of the
FIRST P-RT the Su! of T@RAA
T@O3S-ND NINA @3NDRAD T?ANTC
ONBC :P 4,15+.++;, Philippine "uenc(, plus
interest at the rate of ./ per annum ... .
:A!phasis supplied;
The plaintiffs-appellees on the othe hand ae fi! in thei
sub!ission that since the( have alead( paid the defendants-
appellants a total su! of P7,*44.49, the defendants-appellants
!ust no/ be co!pelled to e)ecute the final deed of sale pusuant
to paa'aph 05 of the contact /hich povides>
T?ABFT@.FThat once the pa(!ent of the
su! of P4,15+.++, the total pice of the sale is
co!pleted, the pat( to the FIRST P-RT /ill
e)ecute in favo of the pat( of the SA"OND
P-RT, the necessa( deed o deeds to tansfe
to the latte the title of the pacel of land sold,
fee fo! all hens and encu!bances othe than
those e)pessl( povided in this contactH it is
undestood, ho/eve, that au the e)penses
/hich !a( be incued in the said tansfe of
title shall be paid b( the pat( of the SA"OND
P-RT, as above stated.
"losel( elated to the second assi'n!ent of eo is the
sub!ission of the plaintiffs-appellees that the contact heein is a
contact of adhesion.
?e a'ee /ith the plaintiffs-appellees. The contact to sell
enteed into b( the paties has so!e chaacteistics of a contact
of adhesion. The defendants-appellants dafted and pepaed the
contact. The plaintiffs-appellees, ea'e to ac.uie a lot upon
/hich the( could build a ho!e, affi)ed thei si'natues and
assented to the te!s and conditions of the contact. The( had no
oppotunit( to .uestion no chan'e an( of the te!s of the
a'ee!ent. It /as offeed to the! on a EtaGe it o leave itE basis.
In S$eet 0ines, &nc. #) "e#es :94 S"R- 48 0;, /e held that>
))) ))) )))
... :?;hile 'eneall(, stipulations in a contact
co!e about afte delibeate daftin' b( the
paties theeto. . . . thee ae cetain contacts
al!ost all the povisions of /hich have been
dafted onl( b( one pat(, usuall( a copoation.
Such contacts ae called contacts of adhesion,
because the onl( paticipation of the pat( is the
si'nin' of his si'natue o his EadhesionE
theeto. Insuance contacts, bills of ladin',
contracts of sale of lots on the installment plan
fall into this category. :Paas, "ivil "ode of the
Philippines, Seventh ed., Vol. 0, p. 9+.;
:A!phasis supplied;
?hile it is tue that paa'aph 5 of the contact obli'ated the
plaintiffs-appellees to pa( the defendants-appellants the su! of
P4,15+.++ plus 26 inteest pe annu!, it is liGe/ise tue that
unde paa'aph 05 the selle is obli'ated to tansfe the title to
the bu(e upon pa(!ent of the P4,15+.++ pice sale.
The contact to sell, bein' a contact of adhesion, !ust be
constued a'ainst the pat( causin' it. ?e a'ee /ith the
obsevation of the plaintiffs-appellees to the effect that Ethe te!s
of a contact !ust be intepeted a'ainst the pat( /ho dafted the
sa!e, especiall( /hee such intepetation /ill help effect =ustice
to bu(es /ho, afte havin' invested a bi' a!ount of !one(, ae
no/ sou'ht to be depived of the sa!e thu the pa(ed application
of a contact cleve in its phaseolo'(, conde!nable in its
lopsidedness and in=uious in its effect /hich, in essence, and in
its entiet( is !ost unfai to the bu(es.E
Thus, since the pincipal obli'ation unde the contact is onl(
P4,15+.++ and the plaintiffs-appellees have alead( paid an
a''e'ate a!ount of P7,*44.49, the couts should onl( ode the
pa(!ent of the fe/ e!ainin' install!ents but not uphold the
cancellation of the contact. 3pon pa(!ent of the balance of
P820.82 $ithout any interest thereon, the defendants-appellants
!ust i!!ediatel( e)ecute the final deed of sale in favo of the
plaintiffs-appellees and e)ecute the necessa( tansfe docu!ents
as povided in paa'aph 05 of the contact. The attone(,s fees
ae =ustified.
?@ARAFORA, the instant petition is DANIAD fo lacG of !eit.
The decision appealed fo! is -FFIRMAD /ith the !odification
that the plaintiffs-appellees should pa( the balance of SI&
@3NDRAD SAVANTC ONA PASOS -ND SI&TC-SAVAN
"ANT-VOS :P820.82; /ithout an( inteests. "osts a'ainst the
defendants-appellants.
SO ORDARAD.
1elencio23errera, Plana, !elo#a, De la %uente and lampay,
((), concur)
"eehan+ee 4Chairman5, (), too+ no part)