Tiglao vs.

Manila Railroad
98 Phil 181
Art. 1180, Setting of Period
Issue
W/N a company may be excused for payment of
salary diff of its retired employees when the
agreement is subject to condition that salary
differentials from date of exhaustion will be paid
when funds for the purpose are available, if the
company is losing its business?
Facts
Petitioners are 35 retired employees of defendant
company who sought to recover salary diff due to
them under MOA with defendant
Under the MOA, employed affected by the
standardized plan will receive standardized salaries
provided that any salary diff from date of exhaustion
will be paid when funds for the purpose are available
Held
Art. 1180. When the debtor binds himself to pay
when his means permit him to do so, the obligation
shall be deemed to be one with a period, subject to
the provisions of Article 1197.
MOA does not stipulate that salary diff shall be
paid only from surplus profits
It is not appearing that defendant was bankcrupt
the obligation to pay said salary diff may be
considered as one with term whose duration has
been left to the will of the debtor, so that pursuant
to art. 1197, the duration of the term may be fixed
by courts

Javier vs. Court of Appeals and Leonardo Tiro

183 SCRA 171 Art. 1181, Suspensive Condition
Issue: W/N an agreement may be nullified for nonperformance of the conditions stipulated therein
Facts:
Petitioner and private respondent entered into an
agreement into which Petitioner bound himself to
transfer his rights(shares of stocks) on
Timberlwealth Corp to private respondent
That for and in consideration of the transfer of
rights, Petitioner undertake to pay Private
Respondent subject to the condition that the
application of Private Respondent for an additional

area for forest concession be approved by Bureau of

Forestry
Private Respondent did not obtain the approval
Held:
When a contract is subject to a suspensive condition,
its birth and effectivity can take place only if and
when the event which constitutes the condition
happens or is fulfilled. If the suspensive condition
does not take place, the parties would stand as if the
conditional obligation had never existed.
Art. 1461 of the Civil Code, the efficacy of the sale
of a mere hope or expectancy is deemed subject to
the condition that the thing will come into existence
HEIRS OF PAULINO ATIENZA
DOMINGO P. ESPIDOL
G.R. No. 180665, Aug. 11,2010

versus

Facts:
This case is about the legal consequences when a
buyer in a contract to sell on installment fails to
make the next payments that he promised.
On August 12, 2002 the Atienzas and respondent
Domingo P. Espidol entered into a contract called
Kasunduan sa Pagbibili ng Lupa na may Paunang-Bayad
(contract to sell land with a down payment) covering
the property. They agreed on a price, payable in
three installments.
When the Atienzas demanded payment of the
second installment of P1,750,000.00 in December
2002, however, respondent Espidol could not pay it.
Claiming that Espidol breached his obligation, on
February 21, 2003 the Atienzas filed a complaint for
the annulment of their agreement with damages
before the Regional Trial Court (RTC)of Cabanatuan
City in a Civil Case.
Issue:
Whether or not the Atienzas were entitled to the
cancellation of the contract to sell they entered into
with respondent Espidol on the ground of the
latters failure to pay the second installment when it
fell due.
Held:
The Court declares the Kasunduan sa Pagbibili ng Lupa
na may Paunang-Bayad between petitioner Heirs of

Paulino Atienza and respondent Domingo P.

Espidol dated August 12, 2002 cancelled and the
Heirs obligation under it non-existent. Regarding
the right to cancel the contract for non-payment of
an installment, there is need to initially determine if
what the parties had was a contract of sale or a
contract to sell. 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, on the other hand,
the ownership is, by agreement, retained by the seller
and is not to pass to the vendee until full payment of
the purchase price. In the first place, since Espidol
failed to pay the installment on a day certain fixed in
their agreement, the Atienzas can afterwards validly
cancel and ignore the contract to sell because their
obligation to sell under it did not arise. Since the
suspensive condition did not arise, the parties stood
as if the conditional obligation had never existed.

CENTRAL PHILIPPINE UNIVERSITY VS.

CA- Resolutory Condition
When a person donates land to another on the condition that a
construction be made, the condition is akin to a resolutory (not
suspensive) one. The non-compliance to the condition
extinguishes the right to the donation, but it need not occur
first in order for the donation to be effected and validated.
FACTS:
In 1939, the late Don Ramon Lopez was a member
of the board of trustees of Central Philippine
University when he executed a donation to the
school, stating that the land must be for exclusive
use of a medical college. 50 years later, The heirs of
Ramon Lopez filed an action to annul the donation,
stating the failure of the school to construct the
medical college over the land. RTC ruled in favor of
respondents, which the CA affirmed.
ISSUE: Whether there is a resolutory condition
RULING:
The donation was an onerous one, where failure of
the school to construct a medical college would give
the heirs the power to revoke the donation, reverting
the property back to the heirs of the donor. It is
therefore a resolutory condition. Although, the
period was not stated, and the courts should have
fixed a period, in this case, 50 years has lapsed since
the donation was executed, thus fixing a period
would serve no purpose and the property must
already be reverted back.

PARKS V. PROVINCE OF TARLAC- Donation

with a Condition
A condition which cannot be complied with except after giving
effect to the donation is not a condition precedent.
FACTS:
In 1910, Concepcion Cirer and James Hill donated
parcels of land to the municipality of Tarlac on the
condition that it be used absolutely and exclusively
for the erection of a central school and public parks,
the work to commence within six months. The
president of the municipality of Tarlac accepted and
registered the donation.
In 1921, Cirer and Hill sold the same property to
George L. Parks.
Later on the, the municipality of Tarlac transferred
their rights in the property to the Province of Tarlac.
Parks filed a complaint seeking the annulment of the
donation and asking that he be declared the absolute
owner of the property. Parks allege that the
conditions of the donation were not complied with.
ISSUE:
Whether or not the donation was coupled with a
condition precedent? W/N the action to revoke has
prescribed?
HELD:
No. The condition to erect a school within six
months is not a condition precedent. The
characteristic of a condition precedent is that the
acquisiito of the right is not effected while said
condition is mot complied with or is not deemed
complied with. Meanwhile nothing is acquired and
there is only an expectancy of a right. Consequently,
when a condition is imposed, the compliance of
which cannot be effected except when the right is
deemed acquired, such condition cannot be a
condition precedent. In the present case the
condition that a public school be erected and a
public park be made of the donated land could not
be complied with except after giving effect to the
donation.
The action to revoke the donation has prescribed.
The prescriptive periods are: 5 years for the
revocation by the subsequent birth of children, 1
year if by reason of ingratitude. If no special period
is prescribed, 10 years, for an onerous donation
following the law of contracts and general rules on
prescriptions. The donation was made in 1910, the
cause of action accrued in 1911, while the action to
revoke was filed 1924, twenty three years later.

VDA. DE MISTICA v NAGUIAT

G.R. No. 137909. December 11, 2003
Facts:Eulalio Mistica is the owner of a parcel of land
located at Malhacan, Meycauayan, Bulacan. A
portion thereof was leased to respondent Bernardino
Naguiat sometime in 1970. Thereafter both parties
entered into an agreement for the transfer of
ownership of said property. Pursuant to said
agreement, Naguiat gave a downpayment of
P2,000.00. He made another partial payment of
P1,000.00 on 7 February 1980. He failed to make any
payments thereafter. On 4 December 1991,
petitioner filed a complaint for rescission alleging
that the failure and refusal of respondents to pay the
balance of the purchase price constitutes a violation
of the contract which entitles her to rescind the
same. Petitioner argued as his defense that the
agreement between them which involves the sale of
the subject property is a potestative obligation. As a
potestative obligation, the schedule of payment
belongs to the will of the debtor.
Issue:Whether or not the agreement between the
parties is a potestative obligation
Held:The transaction between Eulalio Mistica and
respondents, as evidenced by the Kasulatan, was
clearly a Contract of Sale. A deed of sale is
considered absolute in nature when there is neither a
stipulation in the deed that title to the property sold
is reserved to the seller until the full payment of the
price; nor a stipulation giving the vendor the right to
unilaterally resolve the contract the moment the
buyer fails to pay within a fixed period
In the present case, the failure of respondents to pay
the balance of the purchase price within ten years
from the execution of the Deed did not amount to a
substantial breach. Instead, she argues that the
period cannot be extended beyond ten years, because
to do so would convert the buyers obligation to a
purely potestative obligation that would annul the
contract under Article 1182 of the Civil Code. This
contention is likewise untenable. The Code prohibits
purely
potestative,
suspensive,
conditional
obligations that depend on the whims of the debtor,
because such obligations are usually not meant to be
fulfilled.[14] Indeed, to allow the fulfillment of
conditions to depend exclusively on the debtors will
would be to sanction illusory obligations. First,
nowhere is it stated in the Deed that payment of the
purchase price is dependent upon whether
respondents want to pay it or not. Second, the fact
that they already made partial payment thereof only

shows that the parties intended to be bound by the

Kasulatan.
TRILLANA v QUEZON COLLEGES
Facts:On June 1, 1948, Damasa Crisostomo applied
for 200 shares of stock worth PhP100.00 each at
Quezon Colleges, Inc. Within her letter of
application, she stipulated, You will find (Babayaran
kong lahat pagkatapos na ako ay makapag-pahuli ng
isda) pesos as my initial payment and the balance
payable in accordance with law and the rules and
regulations of the Quezon College. Damasa died on
October 26, 1948. Since no payment was rendered
on the subscription made in the foregoing letter,
Quezon College presented a claim of PhP20,000.00
on her intestate proceedings. The petitioner
administrator of the estate then contests the validity
of said proceedings?
Issue:Is the condition laid down by Damasa
Crisostomo valid?
Ruling:There is nothing in the record to show that
the Quezon College, Inc. accepted the term of
payment suggested by Damasa Crisostomo, or that if
there was any acceptance the same came to her
knowledge during her lifetime. As the application of
Damasa Crisostomo is obviously at variance with the
terms evidenced in the form letter issued by the
Quezon College, Inc., there was absolute necessity
on the part of the College to express its agreement to
Damasas offer in order to bind the latter.
Conversely, said acceptance was essential, because it
would be unfair to immediately obligate the Quezon
College, Inc. under Damasas promise to pay the
price of the subscription after she had caused fish to
be caught. Thus, it cannot be said that the letter
ripened into a contract.
Indeed, the need for express acceptance on the part
of the Quezon College, Inc. becomes the more
imperative, in view of the proposal of Damasa
Crisostomo to pay the value of the subscription after
she has harvested fish, a condition obviously
dependent upon her sole will and, therefore,
facultative in nature, rendering the obligation void.
Under the Civil Code it is provided that if the
fulfillment of the condition should depend upon the
exclusive will of the debtor, the conditional
obligation shall be void.

Romero v. CA

eviction of the squatters on the property).

Facts: Private respondent entered into a

Conditional Deed of Sale with petitioner over a
parcel of land in Paranaque, the latter advancing
P50,000 for the eviction of squatters therein. An
ejectment suit was then filed by the private
respondent against the squatters. Although
successful, private respondent sought the return of
the downpayment she received because she could
not get rid of the squatters.

It would be futile to challenge the agreement here in

question as not being a duly perfected contract. A
sale is at once perfected when a person (the seller)
obligates himself, for a price certain, to deliver and
to transfer ownership of a specified thing or right to
another (the buyer) over which the latter agrees.
From the moment the contract is perfected, the
parties are bound not only to the fulfillment of what
has been expressly stipulated but also to all the
consequences which, according to their nature, may
be in keeping with good faith, usage and law. Under
the agreement, private respondent is obligated to
evict the squatters on the property. Private
respondent's failure "to remove the squatters from
the property" within the stipulated period gives
petitioner the right to either refuse to proceed with
the agreement or waive that condition in consonance
with Article 1545 of the Civil Code. This option
clearly belongs to petitioner and not to private
respondent.

Issue: May the vendor demand the rescission of a

contract for the sale of a parcel of land for a cause
traceable to his own failure to have the squatters on
the subject property evicted within the contractuallystipulated period?
Held: A perfected contract of sale may either be
absolute or conditional depending on whether the
agreement is devoid of, or subject to, any condition
imposed on the passing of title of the thing to be
conveyed or on the obligation of a party thereto.
When ownership is retained until the fulfillment of a
positive condition the breach of the condition will
simply prevent the duty to convey title from
acquiring an obligatory force. If the condition is
imposed on an obligation of a party which is not
complied with, the other party may either refuse to
proceed or waive said condition. Where, of course,
the condition is imposed upon the perfection of the
contract itself, the failure of such condition would
prevent the juridical relation itself from coming into
existence.
In determining the real character of the contract, the
title given to it by the parties is not as much
significant as its substance. For example, a deed of
sale, although denominated as a deed of conditional
sale, may be treated as absolute in nature, if title to
the property sold is not reserved in the vendor or if
the vendor is not granted the right to unilaterally
rescind the contract predicated on the fulfillment or
non-fulfillment, as the case may be, of the prescribed
condition. The term "condition" in the context of a
perfected contract of sale pertains, in reality, to the
compliance by one party of an undertaking the
fulfillment of which would beckon, in turn, the
demandability of the reciprocal prestation of the
other party. The reciprocal obligations referred to
would normally be, in the case of vendee, the
payment of the agreed purchase price and, in the
case of the vendor, the fulfillment of certain express
warranties (which, in the case at bench is the timely

In contracts of sale particularly, Article 1545 of the

Civil Code allows the obligee to choose between
proceeding with the agreement or waiving the
performance of the condition. Here, evidently,
petitioner has waived the performance of the
condition imposed on private respondent to free the
property from squatters.
The right of resolution of a party to an obligation is
predicated on a breach of faith by the other party
that violates the reciprocity between them. It is
private respondent who has failed in her obligation
under the contract. Petitioner did not breach the
agreement. He has agreed, in fact, to shoulder the
expenses of the execution of the judgment in the
ejectment case and to make arrangements with the
sheriff to effect such execution.