ARTICLE 1181: SUSPENSIVE AND

RESOLUTORY CONDITION
1) JAVIER VS. COURT OF APPEALS AND
LEONARDO TIRO 183 SCRA 171 Art. 1181,
Suspensive Condition
Issue

W/N an agreement may be nullified for non-

performance 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, 3) CENTRAL PHILIPPINE UNIVERSITY V CA
the parties would stand as if the conditional obligation GR No. 112127
had never existed. July 17, 1995

Art. 1461 of the Civil Code, the efficacy of the sale of DONATION
a mere hope or expectancy is deemed subject to the
condition that the thing will come into existence FACTS:

(1) In 1939, the late Don Ramon Lopez, Sr., who was
then a member of the Board of Trustees of the Central
Philippine College (now Central Philippine University
[CPU]), executed a deed of donation in favor of the
latter of a parcel of land identified as Lot No. 3174-B-1
of the subdivision plan Psd-1144, then a portion of Lot
No. 3174-B, for which Transfer Certificate of Title No.
T-3910-A was issued in the name of the donee CPU with
the following annotations copied from the deed of
donation

1. The land described shall be utilized by the CPU

exclusively for the establishment and use of a medical
college with all its buildings as part of the curriculum;

2. The said college shall not sell, transfer or convey to

any third party nor in any way encumber said land;

3. The said land shall be called "RAMON LOPEZ
CAMPUS", and the said college shall be under
obligation to erect a cornerstone bearing that name. Any
net income from the land or any of its parks shall be put
in a fund to be known as the "RAMON LOPEZ
CAMPUS FUND" to be used for improvements of said
campus and erection of a building thereon.
(2) On 31 May 1989, private respondents, who are the
heirs of Don Ramon Lopez, Sr., filed an action for
annulment of donation, reconveyance and damages
against CPU alleging that since 1939 up to the time the
action was filed the latter had not complied with the
conditions of the donation.
RTC: On 31 May 1991, the trial court held that
petitioner failed to comply with the conditions of the
donation and declared it null and void.
CA: 18 June 1993 ruled that the annotations at the back
of petitioner's certificate of title were resolutory
conditions breach of which should terminate the rights of
the donee thus making the donation revocable.
APPLICABLE LAW/S:
Art. 1181. In conditional obligations, the acquisition of
rights, as well as the extinguishment or loss of those
already acquired, shall depend upon the happening of the
event which constitutes the condition. (1114)
Art. 1197. If the obligation does not fix a period, but
from its nature and the circumstances it can be inferred
that a period was intended, the courts may fix the
duration thereof.
The courts shall also fix the duration of the period when
it depends upon the will of the debtor.
In every case, the courts shall determine such period as
may under the circumstances have been probably
contemplated by the parties. Once fixed by the courts,
the period cannot be changed by them. (1128a)
Art. 1191. The power to rescind obligations is implied
in reciprocal ones, in case one of the obligors should not
comply with what is incumbent upon him.
The injured party may choose between the fulfillment
and the rescission of the obligation, with the payment of
damages in either case. He may also seek rescission,
even after he has chosen fulfillment, if the latter should
become impossible.
The court shall decree the rescission claimed, unless
there be just cause authorizing the fixing of a period.
This is understood to be without prejudice to the rights
of third persons who have acquired the thing, in
accordance with Articles 1385 and 1388 and the
Mortgage Law. (1124)
HELD:
(1) The donation was onerous. A clear perusal of the
conditions set forth in the deed of donation executed by
Don Ramon Lopez, Sr., gives us no alternative but to
conclude that his donation was onerous, one executed
for a valuable consideration which is considered the
equivalent of the donation itself, e.g., when a donation
imposes a burden equivalent to the value of the donation.
The donation had to be valid before the fulfillment of the
condition. 5 If there was no fulfillment or compliance
with the condition, such as what obtains in the instant
case, the donation may now be revoked and all rights
which the donee may have acquired under it shall be
deemed lost and extinguished.
(2) The action has not prescribed. It has been held that
its absolute acceptance and the acknowledgment of its
obligation provided in the deed of donation were
sufficient to prevent the statute of limitations from
barring the action of private respondents upon the
original contract which was the deed of donation.
(3) Courts fixing a period is now moot and rescission is
proper. Petitioner has slept on its obligation for an
unreasonable length of time. Hence, it is only just and
equitable now to declare the subject donation already
ineffective and, for all purposes, revoked so that
petitioner as donee should now return the donated
property to the heirs of the donor, private
respondents herein, by means of reconveyance.
3) CENTRAL PHILIPPINE UNIVERSITY VS.
COURT OF APPEALS
G.R. No. 112230. July 17, 1995
246 SCRA 511
FACTS:
In 1939, Don Ramon Lopez Sr. executed a deed of
donation in favor of CPU together with the following
conditions:
a) The land should be utilized by CPU exclusively for
the establishment & use of medical college;
b) The said college shall not sell transfer or convey to
any 3rd party;
c) The said land shall be called Ramon Lopez Campus
and any income from that land shall be put in the fund to
be known as Ramon Lopez Campus Fund.
However, on May 31, 1989, PR, who are the heirs of
Don Ramon filed an action for annulment of donation,
reconveyance & damages against CPU for not
complying with the conditions. The heirs also argued
that CPU had negotiated with the NHA to exchange the
donated property with another land owned by the latter.
Petitioner alleged that the right of private respondents to
file the action had prescribed.
ISSUE:
1) WON petitioner failed to comply the resolutely
conditions annotated at the back of petitioners
certificate of title without a fixed period when to comply
with such conditions? YES
2) WON there is a need to fix the period for compliance
of the condition? NO
HELD:
1)
Under Art. 1181, on conditional obligations, the
acquisition of rights as well the extinguishment or loss
of those already acquired shall depend upon the
happening of the event which constitutes the condition.
Thus, when a person donates land to another on the
condition that the latter would build upon the land a
school is such a resolutory one. The donation had to be
valid before the fulfillment of the condition. If there was
no fulfillment with the condition such as what obtains in
the instant case, the donation may be revoked & all
rights which the donee may have acquired shall be
deemed lost & extinguished.
More than a reasonable period of fifty (50) years has
already been allowed petitioner to avail of the
opportunity to comply with the condition even if it be
burdensome, to make the donation in its favor forever
valid. But, unfortunately, it failed to do so. Hence, there
is no more need to fix the duration of a term of the
obligation when such procedure would be a mere
technicality and formality and would serve no purpose
than to delay or lead to an unnecessary and expensive
multiplication of suits.
Records are clear and facts are undisputed that since the
execution of the deed of donation up to the time of filing
of the instant action, petitioner has failed to comply with
its obligation as donee. Petitioner has slept on its
obligation for an unreasonable length of time. Hence, it
is only just and equitable now to declare the subject
donation already ineffective and, for all purposes,
revoked so that petitioner as donee should now return
the donated property to the heirs of the donor, private
respondents herein, by means of reconveyance.
(2) Under Art. 1197, when the obligation does not fix a
period but from its nature & circumstance it can be
inferred that the period was intended, the court may fix
the duration thereof because the fulfillment of the
obligation itself cannot be demanded until after the court
has fixed the period for compliance therewith & such
period has arrived. However, this general rule cannot be
applied in this case considering the different set of
circumstances existing more than a reasonable period of
50yrs has already been allowed to petitioner to avail of
the opportunity to comply but unfortunately, it failed to
do so. Hence, there is no need to fix a period when such
procedure would be a mere technicality & formality &
would serve no purpose than to delay or load to
unnecessary and expensive multiplication of suits.
Under Art. 1191, when one of the obligors cannot
comply with what is incumbent upon him, the obligee
may seek rescission before the court unless there is just
cause authorizing the fixing of a period. In the absence
of any just cause for the court to determine the period of
compliance there is no more obstacle for the court to
decree recission.
4) PARKS v. PROVINCE OF TARLAC
July 13, 1926 | Avancena, CJ
Resolutory Condition or Condition Subsequent
PETITIONER:
George L. Parks
RESPONDENT:
Province of Tarlac, Municipality of Tarlac Concepcion
Cirer, James Hill
SUMMARY:
Cirer and Hill donated parcels of land to the
Municipality of Tarlac on the condition that they build
on the land a public school and a park. The condition has
not been complied with. Years after, Cirer and Hill sold
the same parcels of land to George Parks. He prayed that
the donation of the lands to Tarlac be annulled because
of its non-compliance with the condition. The Court
ruled that the donations were effective and even if they
would want to revoke the donation because of their non-
compliance with the condition, their right to bring an
action for revocation had already prescribed.
DOCTRINE:
When a condition is imposed and the compliance of
which cannot be effected except when the right is
acquired, such condition is a condition subsequent.

FACTS:
1. Oct 18, 1910 - Concepcion Cirer and James Hill,
owners of the parcels of land, donated them perpetually
to the Municipality of Tarlac under certain conditions.2.
Conditions: One of the parcels of land donated was to be
used for the erection of a central school, the other fora
public park, the work to commence within 6 months
from the date of the ratification by the parties of
thedocument.3.
These conditions have not been complied with.4.
This donation was accepted and registered in the nameof
Municipality of Tarlac.5.
Jan 15, 1921 - Cirer and Hill sold this parcel to
GeorgeParks.6.
Aug 24, 1923
the Municipality of Tarlac transferred the parcel to the
Province of Tarlac and had itregistered.7.
Parks: Brought this action against Tarlac, alleging that
the conditions of the donation had not been complied
with, therefore the transfer of the land to Tarlac should
be annulled.
Lower Court: dismissed the complaint.
ISSUE/S:
1. WON the conditions are conditions precedent
NO, they are conditions subsequent.
2. WON the donation became effective
YES, the donation became effective and has not been
revoked.
RATIO:
1. It is true that the conditions have not been complied
with, but these conditions are not conditions precedent.2.
The characteristic of a condition precedent is that the
acquisition of a right is not effected while said condition
is not complied with. Nothing is acquired, there is only
an expectancy of a right.3.
Consequently, when a condition is imposed and the
compliance of which cannot be effected except when the
right is deemed acquired, such condition cannot be
condition precedent. Therefore, a condition subsequent.
In this case, the conditions that a public school and a
park be made of the donated land could not be complied
with except after giving effect to the donation. The
donee could not do any work on the donated land if the
donation had not really been effected, because it would
be an invasion of anothers title.
These conditions are conditions subsequent.
Even in a condition subsequent, non-compliance with
the condition is sufficient cause for the revocation of the
donation. However, the period for bringing an action for
the revocation has prescribed.6.
The period of prescription of this class of action is
10years. The action for revocation of the donation arose
on April 19, 1911, 6 months after the ratification of the
instrument of donation. The complaint in this action was
presented July 5, 1924, more than 10 years after this
cause accrued.
RULING:
Judgment of the lower court AFFIRMED
ARTICLE 1182: POTESTATIVE, CASUAL AND
MIXED CONDITIONS
5) VDA. DE MISTICA VS. NAGUIAT
418 SCRA 73
Art. 1182. Potestative Condition
Issue/Scope
Potestative Condition under Art. 1182 in relation
to Art. 1191 of Civil Code
Facts
Predecessor-in-interest of Petitioner and herein
Defendants entered into a contract to sell in which the
latter prayed the initial payment and undertake to pay the
remaining by installment within 10 years subject to 12%
interest per annum
Petitioner filed a complaint for rescission
alleging failure and refusal of Defendants to pay the
balance constitutes a violation of the contract which
entitles her to rescind the same
Petitioner argues that period for performance of
obligation cannot be extended to 10 years because to do
so would convert the obligation to purely potestative
Held
Under Art. 1191 of Civil Code, the right to
rescind an obligation is predicated on violation
between parties brought about by breach of faith by
one of them. Rescission, however, is allowed only
 when the breach is substantial and fundamental to
the fulfillment of the obligation
In this case, no substantial breach in the
Kasulatan, it was stipulated that payment could be made
even after 10 years from execution of contract, provided
they will pay the 12% interest
Civil Code prohibits purely potestative,
suspensive, conditional obligation that depend on the
whims of the debtor. Nowhere in the deed that payment
of purchase price is dependent whether respondents want
to pay it or not, the fact that they already made partial
payment shows that parties intended to be bound by the
Kasulatan
6) TRILLANA VS. QUEZON COLLEGE, INC
93 Phil. 383
Art. 1182, Potestative Condition
Issue/Scope
Example of Potestative/Facultative which
depend solely in the will of debtor
Facts
Deceased Damasa Crisostomo sent a letter to
defendant regarding to her subscription to shares of
capital stock in QC, Inc.
When Damasa died, QC, Inc. presented a claim
in her testate proceeding for collection of sum,
representing the value of subscription to capital stock
Damasa, in her letter: 1. did not enclose initial
payment, 2. stated babayaran kong lahat pagkatapos
manghuli ng isda
Held
In view of proposal of Damasa to pay value of
subscription after he has harvested fish is a condition
obviously dependent upon her sole will and therefore
void
Art. 1182. When the fulfillment of the
condition depends upon the sole will of the debtor,
the conditional obligation shall be void.
7) VIRGILIO R. ROMERO, petitioner, vs. HON.
COURT OF APPEALS and ENRIQUETA CHUA
VDA. DE ONGSIONG, respondents. G.R. No. 107207
November 23, 1995
DOCTRINE: 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.
FACTS:
Romero, a civil engineer, was engaged in the
business of production, manufacture and
exportation of perlite filter aids, permalite insulation and
processed perlite ore. In 1988, he decided to put up a
central warehouse in Metro Manila.
Flores and his wife offered a parcel of land
measuring 1,952 square meters. The lot was covered in a
TCT in the name of private respondent Enriqueta Chua
vda. de Ongsiong. Petitioner visited the property and,
except for the presence of squatters in the area, he found
the place suitable for a central warehouse.
Flores called on petitioner with a proposal that should
he advance the amount of P50,000.00 which could be
used in taking up an ejectment case against the squatters,
private respondent would agree to sell the property for
only P800/square meter. Romero agreed. Later, a "Deed
of Conditional Sale" was executed between Flores and
Ongsiong. Purchase price: P1,561,600.00; Down
payment: P50K; Balance to be paid 45 days after the
removal of all the squatters; upon full payment,
Ongsiong shall execute deed of absolute sale in favor of
Romero.
Ongsiong sought to return the P50,000.00 she
received from petitioner since, she said, she could not
"get rid of the squatters" on the lot. She opted to rescind
the sale in view of her failure to get rid of the squatters.
RTC of Makati: private respondent had no right to
rescind the contract since it was she who "violated her
obligation to eject the squatters from the subject
property" and that petitioner, being the injured party, was
the party who could, under Article 1191 of the Civil
Code, rescind the agreement.
CA: reversed TC: It opined that the contract entered
into by the parties was subject to a resolutory condition,
i.e., the ejectment of the squatters from the land, the non-
occurrence of which resulted in the failure of the object
of the contract; that private respondent substantially
complied with her obligation to evict the squatters; that
it was petitioner who was not ready to pay the purchase
price and fulfill his part of the contract, and that the
provision requiring a mandatory return/reimbursement
of the P50,000.00 in case private respondent would fail
to eject the squatters within the 60-day period was not a
penal clause. Thus, it concluded.

ISSUE: Whether the contract of sale was perfected? Yes.
Decision of CA was reversed
RATIO:
A perfected contract of sale may either be absolute or
conditional depending on whether the agreementis
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 (Art. 1545, Civil Code).
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
eviction of the squatters on the property).
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. The ejectment of the squatters is a condition
the operative act of which sets into motion the period of
compliance by petitioner of his own obligation, i.e., to
pay the balance of the purchase price. Private
respondents 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. There was no potestative condition
on the part of Ongsiong 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.
7) ROMERO V. CA
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.
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 contractually-stipulated 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 eviction of the squatters on
the property).
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.
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.
8) SANTOS VS. CA *none
ARTICLE 1189: SUSPENSIVE CONDITION; LOST
OF THE THING
9) OSMENA III VS. SSS
Extinguishment of Determinate Thing
Facts
Osmena III and 4 other members of the Senate
and SSS members seek for nullification of the following
issuances of Social Security Commission
1. Res. No. 428, July 124, 2004- Swiss Challenge Method
approved the sale of the entire equity share of SSS to
Equitable PCI bank
2. Res. 485, August 11, 2004 pertains to the timetable and
instruction to bidders
SSS in order to liquefy its long term investments
and diversify them into higher yielding and less volatile
investments which includes its shareholdings in EPCIB
(Reason: shares in question substantially declined in
value and SSS could no longer afford to continue
holding on them)In a purchase agreement it was agreed
in that SSS will sell all its EPCIB shares to BDO
COA and DOJ (in its opinion) approved the
agreement
Bidding was made subject to the right of BDO
Capital to match the highest bid
BDO turned out t be the highest bidder
Petitioner alleged that BDO to buy EPCIB
shares is inconsistent with the idea of public bidding
BDO and EPCIB had a merger, all EPCIB shares
were transferred to BDO
IssueW/N in questioning the alleged resolution can still
recover the shares and subject it to a proper bidding
process
Ruling
No, petitioners can no longer recover the shares
The obligation to give a determinate thing is
extinguished if the object is lost without the fault of the
debtor
 Under the Civil Code, a thing is considered lost
when it perishes or disappears on such a way that it
cannot be recovered.
In the very real sense, the interplay of the
ensuing factor: a) the BDO-EPCIB merger and b) the
cancellation of subject shares and their replacement by
totally new common shares of BDO had rendered the
erstwhile 187.84 M EPCIB shares of SSS unrecoverable
in the contemplation of Civil Code provision
ARTICLE 1191: RESCISSION OF RECIPROCAL
OBLIGATIONS
10) VILLAMAR vs MANGAOIL
FACTS:
Villamar sold a parcel of land to Mangaoil. Part of the
down payment is to be used to pay the loan obtained by
the seller from the bank and to cause the release from the
said bank of the certificate of title covering the subject
property. The amount left shall be used to pay the
mortgages. After the release of the TCT, a deed of sale
was executed and there shall be transfer of the title
covering the subject property to be used as a collateral
for a loan. However, the buyer backed out from the sale
for the failure of the seller to deliver to the former the
certificate of title and the possession over the land.
ISSUE: Whether or not there can be rescission of
contract.
RULING: The agreement executed by the parties is
means that there should be physical delivery of the TCT
for how else can the buyer use it as collateral to obtain a
loan if the title remains in the sellers possession.
While the agreement does not expressly impose upon the
seller the obligation to eject the mortgagors of the
property, the said undertaking is necessarily implied
because cessation of occupancy of the subject property is
logically expected from the mortgagors upon payment
by the seller of the amounts due to them.
Notwithstanding the absence of stipulations in the
agreement and absolute deed of sale entered into by the
seller and the buyer expressly indicating the
consequences of the seller's failure to deliver the
physical possession of the subject property and the
certificate of title covering the same, the buyer is entitled
to demand for the rescission of their contract pursuant to
Article 1191 of the New Civil Code which provides that
the power to rescind obligations is implied in reciprocal
ones, in case one of the obligors should not comply with
what is incumbent upon him.
10) VILLAMAR vs MANGAOIL
Facts:
Estelita villamar a registered owner of 3.6080 hectares
of parcel of land, decided to sell it Balbino Mangaoil
with the certain conditions; The price of the land is
ONE HUNDRED AND EIGHTY THOUSAND
(180,000.00) PESOS per hectare but only the 3.5000
hec. shall be paid and the rest shall be given free, so that
the total purchase or selling price shall be
[P]630,000.00 only. The respondent paid the amount of
185,000 as a down payment for the land title to be given
to him . After some time, Mangaoil decided to back out
from the agreement because the area is not yet fully
cleared by incumbrances as these are tenants who are not
willing to vacate the land without giving them back the
amount that they mortgage the lad.
Mangaoil demanded a refund for his 185,000, reiterating
his demand on another date but the same as unheeded.
The respondent filed a complaint in the RTC and the
latter ordered the rescission of the agreement and the
deed of absolute sale in accordance of Art. 1458 and Art.
1191 of the Civil Code. The petitioner filed before the
CA an appeal to challenge the foregoing. She ascribed
error on the part of the RTC when the latter ruled that the
agreement and deed of sale executed by and between the
parties can be rescinded as she failed to deliver to the
respondent both the subject property and the certificate
of title covering the same. On February 20, 2009, the CA
rendered the now assailed decision dismissing the
petitioners appeal.
The Petitioner filed an instant petition in the supreme
court. The petitioner contends that in her case, she had
already complied with her obligations under the
agreement and the law when she had caused the release
of TCT No. T-92958-A from the Rural Bank of Cauayan,
paid individual mortgagees Romeo Lacaden and
Florante Parangan, and executed an absolute deed of sale
in the respondents favor.
Issue: Whether or not the failure of petitioner-seller to
deliver the certificate of title over the property to
respondent-buyer is a breach of obligation in a contract
of sale of real property that would warrant rescission of
the contract?
Held:
The RTC and CA both found the petitioner failed to
comply with her obligations to deliver to the respondent
both the possession of the subject property and the
certificate of title covering the same.

The petition was denied for failure to deliver to the

respondent the possession of the subject property due to
the continued presence and occupation of one Parangan
and Lacaden. The Court directed the rescission of the
agreement and absolute deed of sale entered by Estelita
Villamar and Balbino Mangaoil and return of the down
payment made for the purchase of the subject property.
And an interest of 12% per annum on the sum of
185,000 to be returned to Balbino Mangaoil.