Kinds of Obligations

O Hong Kong and Shanghai Bank vs

Sps.
Broqueza -Pure Obligations
O DBP v. Court of Appeals
-Conditional Obligations
O Felix Gonzales v. Heirs of Thoma
s and Paula
Cruz --Suspensive Conditions

O Potestative Conditions
O Vda. De Mistica v Naguiat
O Hermosa v Longara

O Positive Suspensive Conditions

O Visayan Sawmill v Court of Appeal

s
O Leano v Court of Appeals

O Effects of Non-Fulfillment of

Suspensive Condition
O De Leon v. Ong

O QUIJADA VS. CA- Resolutory

Condition in Donations
O Parks vs. Province of Tarlac-

condition precedent.

HONG KONG AND SHANGHAI BANK VS SPS. BROQUEZA

G.R. No. 178610 November 17, 2010

O Facts:Petitioners Gerong and [Editha] Broqueza

are employees of Hongkong and Shanghai Banking

Corporation (HSBC). They are also members of
respondent
Hongkong
Shanghai
Banking
Corporation, Ltd. Staff Retirement Plan (HSBCLSRP, plaintiff below). The HSBCL-SRP is a
retirement plan established by HSBC through its
Board of Trustees for the benefit of the
employees.On October 1, 1990, petitioner [Editha]
Broqueza obtained a car loan in the amount of
Php175,000.00. On December 12, 1991, she again
applied and was granted an appliance loan inthe
amount of Php24,000.00.

On the other hand, petitioner Gerong applied and was granted

an emergency loan in the amount of Php35,780.00 on June 2,
1993. These loans are paid through automatic salary
deduction. Meanwhile [in 1993], a labor dispute arose
between HSBC and its employees. Majority of HSBCs
employees were terminated, among whom are petitioners
Editha Broqueza and Fe Gerong. The employees then filed an
illegal dismissal case before the National Labor Relations
Commission (NLRC) against HSBC. Because of their dismissal,
petitioners were not able to pay the monthly amortizations of
their respective loans. Thus, respondent HSBCL-SRP
considered the accounts of petitioners delinquent. Demands to
pay the respective obligations were made upon petitioners,
but
they
failed
to
pay.
HSBCL-SRP, acting through its Board of Trustees and
represented by Alejandro L. Custodio,filed Civil Case No.
52400 against the spouses Broqueza on 31 July 1996. On 19
September 1996,HSBCL-SRP filed Civil Case No. 52911 against
Gerong. Both suits were civil actions for recovery and
collection of sums of money.

The court of appeals reversed the rulings of

the MeTC and the RTC that the contract is
demandable at house and HSBC has the
right to demand immediate payment., hence
this petition.

Issues:
The Court of Appeals erred in reversing the findings of the
MeTC and the RTC .
Held:
Yes. The petition is meritorious. The Supreme court agreed
with the rulings of the MeTC and the RTC. Inruling, the first
paragraph of Article 1179 of the Civil Code was applied:
Art. 1179. Every obligation whose performance does not
depend upon a future or uncertain event, or upon a past
event unknown to the parties, is demandable at once. The
court affirmed the findings of the MeTC and the RTC that
there is no date of payment indicated in the Promissory
Notes. The RTC is correct in ruling that since the Promissory
Notes do not contain a period, HSBCL-SRP has the right to
demand immediate payment.

O Article 1179of the Civil Code applies. The

spouses Broquezas obligation to pay

HSBCL-SRP is a pure obligation. The fact
that HSBCL-SRP was content with the prior
monthly check-off from Editha Broquezas
salary is of no moment. Once Editha
Broqueza
defaulted
in
her
monthly
payment, HSBCL-SRP made a demand to
enforce a pure obligation.In their Answer,
the spouses Broqueza admitted that prior to
Editha Broquezas dismissal from HSBC in
December 1993, she religiously paid the
loan amortizations, which HSBC collected
through payroll check-off.

O A definite amount is paid to HSBCL-SRP on a specific

date. Editha Broqueza authorized HSBCL-SRP to

make deductions from her payroll until her loans are
fully paid. Editha Broqueza, however, defaulted in
her monthly loan payment due to her dismissal.
Despite the spouses Broquezas protestations, the
payroll deduction is merely a convenient mode of
payment and not the sole source of payment for the
loans. HSBCL-SRP never agreed that the loans will be
paid only through salary deductions. Neither did
HSBCL-SRP agree that if Editha Broqueza ceases to
be an employee of HSBC, her obligation to pay the
loans
will
be
suspended.
HSBCL-SRP
can
immediately demand payment of the loans at
anytime because the obligation to pay has no period.

O Moreover, the spouses Broqueza have already

incurred in default in paying the monthly

installments. Finally, the enforcement of a loan
agreement involves debtor-creditor relations
founded on contract and does not in any way
concern employee relations. As such it should
be enforced through a separate civil action in
the regular courts and not before the Labor
Arbiter. The petition is granted. The Decision of
the Court of Appeals was reversed and set
aside. The decisions of the Regional Trial Court
of Makati, as well as the decision of the
Metropolitan Trial Court of Makati City against
the spouses Bienvenido and Editha Broqueza,
were affirmed.

DBP V. COURT OF APPEALS

G.R. No. 138703 June 30, 2006
O Facts:Sometime in March 1968, the Development

Bank of the Philippines granted to respondents

Philippine
United
Foundry
and
Machineries
Corporation and Philippine Iron Manufacturing
Company, Inc. an industrial loan in the amount of P2,
500,000 consisting of P500, 000 in cash and P2,
000,000 in DBP Progress Bonds. Subsequently, DBP
granted to respondents another loan in the form of a
five-year revolving guarantee amounting to P1,
700,000 which was reflected in a mortgage contract.
The outstanding accounts of respondents with DBP
were restructured in view of their failure to pay.

O Thus, the outstanding principal balance of the loans

and advances were consolidated into a single

account. Notwithstanding the restructuring,
respondents were still unable to comply with the
terms and conditions of the new promissory notes.
As a result, respondents requested DBP to refinance
the matured obligation. DBP initiated foreclosure
proceedings. Before DBP could proceed with the
foreclosure proceedings, respondents instituted the
present suit for injunction. Respondents cause of
action arose from their claim that DBP was
collecting from them an unconscionable obligation
of P62,954,473.68 out of a mere P6,200,000 loan.
After trial, the court rendered a decision in favor of
respondents. The Court of Appeals affirmed the
decision.

O Issue:Whether or not the condition of interest in

the contracts are unconscionable

O Held:
The second set of promissory notes
executed by respondents must govern the
contractual relation of the parties for they
unequivocally express the terms and conditions of
the parties loan agreement, which are binding
and conclusive between them. A mortgage is a
mere accessory contract and its validity would
depend on the validity of the loan secured by it.
Hence, the consideration of the mortgage contract
is the same as that of the principal contract from
which it receives life, and without which it cannot
exist as an independent contract. The debtor
cannot escape the consequences of the mortgage
contract once the validity of the loan is upheld.

O As correctly pointed out by PMO, the original

loans alluded to by respondents had been

refinanced and restructured in order to extend
their maturity dates. Refinancing is an exchange
of an old debt for a new debt, as by negotiating a
different interest rate or term or by repaying the
existing loan with money acquired from a new
loan. Restructuring, as applied to a debt, implies
not only a postponement of the maturity but also
a modification of the essential terms of the debt
in order to make the account of the debtor
current. Accordingly, respondents are barred from
claiming the contrary without transgressing the
principle of estoppel and mutuality of contracts.

TOMIMBANG vs
TOMIMBANG
Facts: Petitioner and respondent are siblings. Their parents
donated to petitioner an eight- door apartment, with the
condition that during the parents lifetime, they shall retain
control over the property and petitioner shall be the
administrator thereof. Petitioner failed to obtain a loan from
PAG-IBIG Fund, hence, respondent offered to extend a
credit line to petitioner on the following conditions: (1)
petitioner shall keep a record of all the advances; (2)
petitioner shall start paying the loan upon the completion
of the renovation; (3) upon completion of the renovation, a
loan and mortgage agreement based on the amount of the
advances made shall be executed by petitioner and
respondent; and (4) the loan agreement shall contain
comfortable terms and conditions which petitioner could
have obtained from PAG-IBIG.

O However, respondent and petitioner entered into

a new agreement whereby petitioner was to start

making monthly payments on her loan. Upon
respondents demand, petitioner turned over to
respondent all the records of the cash advances
for
the
renovations.
Petitioner
however
discontinued
the
renovations
and
her
whereabouts could not be located. Respondent
filed a complaint demanding the former to pay
the loan plus interest. The trial court and the
Court of Appeals rendered judgment in favor of
the plaintiff.
O Issue:Whether or not petitioners obligation is

due and demandable. Whether or not there was

a novation of the original terms of the loan
agreement.

O Held: The Court finds that the obligation was

already due and demandable. The evidence on

record clearly shows that after renovation of seven
out of the eight apartment units had been
completed, petitioner and respondent agreed that
the former shall already start making monthly
payments on the loan even if renovation on the last
unit was still pending. She agreed and complied
with respondents demand for her to begin paying
her loan, since she believed this was in accordance
with her commitment to pay whenever she was
able. By her very own admission and partial
performance of her obligation, there can be no
other conclusion that petitioners obligation is
already
due
and
demandable.

Evidently, by virtue of the subsequent agreement, the

parties mutually dispensed with the condition that
petitioner shall only begin paying after the completion
of all renovations. There was, in effect, a partial
novation, of petitioners obligation. As can be gleaned
from the foregoing, the aforementioned four essential
elements and the requirement that there be total
incompatibility between the old and new obligation,
apply only to extinctive novation. In partial novation,
only the terms and conditions of the obligation are
altered, thus, the main obligation is not changed and it
remains in force. Her partial performance of her
obligation is unmistakable proof that indeed the original
agreement between her and respondent had been
novated by the deletion of the condition that payments
shall be made only after completion of renovations.

FELIX GONZALES V. HEIRS OF THOMAS AND

PAULA CRUZ
O Facts:On December 1, 1983, Paula Ano Cruz

together with the heirs of Thomas and Paula Cruz,

entered into a Contract of Lease/Purchase with the
defendant, Felix L. Gonzales, of a half-portion of a
parcel of land containing an area of 12 hectares
and an accretion of 2 hectares in Rizal. The
defendant Gonzales paid the annual rental on the
property in accordance with the provisions of the
Contract of Lease/Purchase and thereafter took
possession of the property, installing thereon the
defendant Jesus Sambrano as his caretaker. The
defendant Gonzales did not, however, exercise his
option to purchase the property immediately after
the expiration of the one-year lease.

O He remained in possession of the property

without paying the purchase price provided

for in the Contract of Lease/Purchase and
without paying any further rentals thereon.
A letter was sent by one of the plaintiffsheirs to the defendant Gonzales informing
him of the lessors decision to rescind the
Contract due to a breach thereof committed
by the defendant and asked him to vacate
the premises within 10 days. The defendant
Gonzales refused to vacate the property and
continued possession thereof. The plaintiffs
filed a complaint for recovery of possession
of the property.

O Issue:Whether or not the condition of the contract is a

precedent before the defendant is to pay the down

payment
O Held:When the obligation assumed by a party to a
contract is expressly subjected to a condition, the
obligation cannot be enforced against him unless the
condition is complied with. The contract clearly indicates
that the lessors-plaintiffs shall obtain a Transfer Certificate
of Title in the name of the lessee within 4 years before a
new contract is to be entered into under the same terms
and conditions as the original Contract of Lease/Purchase.
Thus, before a deed of Sale can be entered into between
the plaintiffs and the defendant, the plaintiffs have to
obtain the Transfer Certificate of Title in favor of the
defendant. The failure of the plaintiffs to secure the
Transfer Certificate of Title, as provided for in the contract,
does not entitle them to rescind the contract.

O The failure to secure the Transfer Certificate of Title in

favor of the defendant entitles not the plaintiffs but,

rather, the defendant to either rescind or to ask for
specific performances. Ineluctably, the intention of
the parties was to have the title transferred first to
respondents names as a condition for the completion
of the purchase. In holding that clause nine was not a
condition precedent to the purchase of the property; it
reasoned that the title could be transferred to the
name of the buyer only after the completion of the
purchase. Thus, petitioner should first purchase the
property before respondents could be obliged to
transfer the TCT to his name. Verily, the petitioners
obligation to purchase has not yet ripened and cannot
be enforced until and unless respondents can prove
their title to the property subject of the Contract.

Vda. De Mistica v Naguiat

G.R. No. 137909. December 11,
2003
O 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.

O 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.
O Issue:Whether or not the agreement between the
parties is a potestative obligation
O 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.

HERMOSA vs LONGARA
O Facts: This is an appeal by way of certiorari against a

decision of the Court of Appeals, fourth division, approving

certain claims presented by Epifanio M. Longara against
the testate estate of Fernando Hermosa, Sr. The claims are
of three kinds, namely, P2,341.41 representing credit
advances made to the intestate from 1932 to 1944,
P12,924.12 made to his son Francisco Hermosa, and
P3,772 made to his grandson, Fernando Hermosa, Jr. from
1945 to 1947, after the death of the intestate, which
occurred in December, 1944. The claimant presented
evidence and the Court of Appeals found, in accordance
therewith, that the intestate had asked for the said credit
advances for himself and for the members of his family on
condition that their payment should be made by Fernando
Hermosa, Sr. as soon as he receive funds derived from the
sale of his property in Spain.

O Claimant had testified without opposition that the credit

advances were to be payable as soon as Fernando

Hermosa, Sr.s property in Spain was sold and he receive
money derived from the sale. The Court of Appeals held
that payment of the advances did not become due until
the administrative received the sum of P20,000 from the
buyer of the property. Upon authorization of the probate
court in October, 1947, and the same was paid for
subsequently. The Claim was filed on October 2, 1948.
O Issue:Does said condition a potestative condition and
thus void and unenforceable?
O Ruling:A careful consideration of the condition upon
which payment of the sums advanced was made to
depend, as soon as he (intestate) receive funds derived
from the sale of his property in Spain, discloses the fact
that the condition in question does not depend exclusively
upon the will of the debtor, but also upon other
circumstances beyond his power or control.

O Circumstances show that the intestate had

already decided to sell his house lest he meant

to fool his creditors. But in addition of the sale to
him (the intestate-vendor), there were still other
conditions that had no concur to effect the sale,
mainly that of the presence of a buyer, ready,
able and willing to purchase the property under
the conditions demanded by the intestate. It is
evident, therefore, that the condition of the
obligation was not a purely protestative one,
depending exclusively upon the will of the
intestate, but a mixed one, depending partly
upon the will of intestate and partly upon
chance. The Supreme Court upheld the ruling of
the lower courts.

VISAYAN SAWMILL V COURT OF

APPEALS
O Facts:On May 1, 1983, herein plaintiff-appellee and

defendants appellants entered into a sale involving

scrap iron, subject to the condition that plaintiff
appellee will open a letter of credit in the amount of
P250,00.00 in favor of defendant-appellant
corporation on or before May 15, 1983. On May 24,
1983, plaintiff-appellee informed defendansappellants by telegram that the letter of credit was
opened May 12, 1983 at the BPI main office in Ayala,
but that transmittal was delayed. On May 26, 1983,
defendants-appellants received a letter advice from
the Dumaguete City Branch of BPI dated May 26,
1983, that a domestic letter of credit had been
opened in favor of Visayan Sawmill Company.

O On July 19, 1983 plaintiffs then demanded

that defendants comply with the deed of

sale. On July 20, 1983 defendant
corporation informed plaintiffs lawyer that
it is unwilling to continue with the sale due
to plaintiffs failure to comply with the
essential preconditions of the contract.
Private respondent prayed for judgment
ordering the petitioner corporation to
comply with the contract by delivering to
him the scrap iron subject thereof.
O Issue: Whether or not the petitioner

violated the terms and conditions of the

contract.

Ruling: The petitioner corporations obligation to sell is

unequivocally subject to a positive suspensive condition.
The failure of the private respondent to comply with the
positive suspensive condition cannot even be considered a
breach casual or serious but simply an event that
prevented the obligation of petitioner corporation to
convey
title
from
acquiring
binding
force.
The letter of credit in favor of petitioner was indisputably
not in accordance with the stipulation in the contract
signed by the parties on at three counts: (1) it was not
opened, made or indorsed by the private respondent, but
by a corporation which is not a party to the contract; (2) it
was not opened with the bank agreed upon and; (3) it is
not irrevocable and unconditional, for it is without
recourse, it is set to expire on a specific date and it
stipulates certain conditions with respect to shipment.
Consequently, the obligation of petitioner to sell did not
arise. Therefore it cannot be compelled by specific
performance to comply with its prestation.

LEANO V COURT OF APPEALS

G.R. No. 129018 November
O15,
Facts:2001
Hermogenes Fernando, as vendor and
Carmelita Leano, as vendee executed a contract
to sell involving a piece of land. In the contract,
Leano bond herself to pay Fernando the sum of
P107,750 as the total purchase price. P10,775
shall
be
paid
at
the
signing
of
the
contract;P96,975 shall be paid within 10 yrs. at a
monthly amortization of P1,747.30 to begin from
Dec. 7, 1985 with interest of 18% per annum; 18%
per annum shall be charged if the month of grace
period expires w/out the installments; should the
90 days elapse from the expiration of the grace
period, Respondent was authorized to declare the
contract cancelled & to dispose of the land.

O Carmelita Leano made several payments in

lump sum. Thereafter she constructed a

house (P800K). Last payment she made was
on
April
1989.
Trial Court rendered decision in an ejectment
case filed by Fernando. Leano filed with the
RTC
for
specific
performance
with
preliminary injunction and assailing that for
being violative of her right to due process
being contrary to R.A 6552 regarding
protection to buyers of lots on installments.
According to Trial Court, transaction was an
absolute sale, making Leano the owner upon
actual & constructive delivery thereof.
Fernando divested of ownership & cannot
recover the same unless rescinded under

O Issue:Whether or not the transaction was an

absolute sale or conditional sale.

O Held:It was a conditional sale because the
intention of the parties was to reserve the
ownership of the land in the seller until the buyer
has paid the total purchase price.
Consideration:
(a) Contract was subject to condition.
(b) What was transferred was the possession &
not ownership.
(c) It was covered by Torrens title. Act of
Registration was the operative act that could
transfer ownership.
What was transferred was the possession of the
property, not ownership.

O In

a contract to sell real property on

installments, the full payment of the
purchase price is a positive suspensive
condition, the failure of which is not
considered a breach, casual or serious, but
simply an event that prevented the
obligation of the vendor to convey title
from acquiring any obligatory force. The
transfer of ownership and title would occur
after
full
payment
of
the
price.
No proper cancellation as Leano was not
given the cash surrender value. She may
still reinstate the contract by updating the
account during grace period & before
actual cancellation.

DE LEON V. ONG
GR No. 170405 Feb. 2, 2010
O Facts:On March 10, 1993, Raymundo S. De Leon

(petitioner) sold 3 parcels of land to Benita T. Ong

(respondent). The said properties were
mortgaged to a financial institution; Real Savings
& Loan Association Inc. (RSLAI). The parties then
executed a notarized deed of absolute sale with
assumption of mortgage.
As indicated in the deed of mortgage, the parties
stipulated that the petitioner (De Leon) shall
execute a deed of assumption of mortgage in
favor of Ong (respondent)after full payment of the
P415,000. They also agreed that the respondent
(Ong) shall assume the mortgage.

O The respondent then subsequently gave petitioner

P415,000 as partial payment. On the other hand, De

Leon handed the keys to Ong and De Leon wrote a
letter to inform RSLAI that the mortgage will be
assumed by Ong.
Thereafter, the respondent took repairs and made
improvements in the properties. Subsequently,
respondent learned that the same properties were
sold to a certain viloria after March 10, 1993 and
changed the locks, rendering the keys given to her
useless. Respondent proceeded to RSLAI but she was
informed that the mortgage has been fully paid and
that the titles have been given to the said person.
Respondent then filed a complaint for specific
performance and declaration of nullity of the second
sale and damages.

O The petitioner contended that respondent does not have

a cause of action against him because the sale was

subject to a condition which requires the approval of
RSLAI of the mortgage. Petitioner reiterated that they
only entered into a contract to sell. The RTC dismissed
the case. On appeal, the CA upheld the sale to
respondent and nullified the sale to Viloria. Petitioner
moved for reconsideration to the SC.
O Issue:Whether the parties entered into a contract of sale
or a contract to sell.
O Held:In a contract of sale, the seller conveys ownership
of the property to the buyer upon the perfection of the
contract. The non-payment of the price is a negative
resolutory condition. Contract to sell is subject to a
positive suspensive condition. The buyer does not acquire
ownership of the property until he fully pays the purchase
price.

O In the present case, the deed executed by

the parties did not show that the owner

intends to reserve ownership of the
properties. The terms and conditions
affected only the manner of payment and
not the immediate transfer of ownership. It
was clear that the owner intended a sale
because he unqualifiedly delivered and
transferred ownership of the properties to
the respondent.

DE LEON V. ONG
GR No. 170405 Feb. 2,
2010
O Facts:On March 10, 1993, Raymundo S. De

Leon
(petitioner) sold 3 parcels of land to Benita T. Ong
(respondent). The said properties were mortgaged to
a financial institution; Real Savings & Loan
Association Inc. (RSLAI). The parties then executed a
notarized deed of absolute sale with assumption of
mortgage.
As indicated in the deed of mortgage, the parties
stipulated that the petitioner (De Leon) shall execute
a deed of assumption of mortgage in favor of Ong
(respondent)after full payment of the P415,000. They
also agreed that the respondent (Ong) shall assume
the mortgage. The respondent then subsequently
gave petitioner P415,000 as partial payment.

O On the other hand, De Leon handed the keys to

Ong and De Leon wrote a letter to inform RSLAI

that the mortgage will be assumed by Ong.
Thereafter, the respondent took repairs and
made
improvements
in
the
properties.
Subsequently, respondent learned that the
same properties were sold to a certain Viloria
after March 10, 1993 and changed the locks,
rendering the keys given to her useless.
Respondent proceeded to RSLAI but she was
informed that the mortgage has been fully paid
and that the titles have been given to the said
person. Respondent then filed a complaint for
specific performance and declaration of nullity
of the second sale and damages.

O The petitioner contended that respondent does not

have a cause of action against him because the sale

was subject to a condition which requires the approval
of RSLAI of the mortgage. Petitioner reiterated that
they only entered into a contract to sell. The RTC
dismissed the case. On appeal, the CA upheld the sale
to respondent and nullified the sale to Viloria. Petitioner
moved for reconsideration to the SC.
O Issue:Whether the parties entered into a contract of
sale or a contract to sell.
O Held: In a contract of sale, the seller conveys
ownership of the property to the buyer upon the
perfection of the contract. The non-payment of the
price is a negative resolutory condition. Contract to sell
is subject to a positive suspensive condition. The buyer
does not acquire ownership of the property until he
fully pays the purchase price.

O In the present case, the deed executed by the

parties did not show that the owner intends to

reserve ownership of the properties. The terms
and conditions affected only the manner of
payment and not the immediate transfer of
ownership. It was clear that the owner intended
a sale because he unqualifiedly delivered and
transferred ownership of the properties to the
respondent.

QUIJADA VS. CA

O When a person donates land to another on a condition. The

condition imposed is not a condition precedent or a

suspensive condition but a resolutory one.
O FACTS: Petitioners are the children of the late Trinidad
Quijada. Trinidad and her siblings executed a deed of
donation of a two-hectare lot in favor of the Municipality of
Talacogon (Agusan del Sur), exclusively for the purpose of
constructing the proposed provincial high school. However,
possession remained with Trinidad. She subsequently sold
the two hectares on two separate occasions to Regalado
Mondejar, who sold it to different persons. Eventually, the
Municipality, failing to construct the high school, reverted
ownership to the donors. Petitioners filed an action for
quieting of title and recovery of possession and ownership.
RTC ruled in favor of petitioners, but CA reversed.

O ISSUE: Whether the deed of donation had a suspensive

condition or a resolutory condition

O RULING: When the donation was accepted, the
ownership was transferred to the school, only subject to a
condition that a school must be constructed over the lot.
Since ownership was transferred, and failure to fulfill the
condition reverts the ownership back to the donor, it is a
resolutory condition.
O When Trinidad sold the parcels of land to Mondejar, she
was not the owner of the land. Petitioners also did not
sleep on their rights to recover the possession and
ownership over the property since they immediately filed
the action when the municipality passed the resolution,
reverting the ownership of land to the donors. However, a
sale being a consensual contract, it can be perfected
upon meeting of the minds, and completing the three
essential elements of a valid contract of sale.

O Even when Trinidad was not the owner

when the sale was perfected, tradition

through delivery is only important upon the
consummation stage. Such transfer of
ownership through actual or constructive
delivery only happened when the lands
reverted back to petitioners. Art 1434 is
applicable, stating that seller's "title passes
by operation if law to the buyer," and
therefore making the sale valid. The
donated lots cannot be considered outside
the commerce of man, since nowhere in the
law states that properties owned by
municipality would be as such.


Parks vs. Province of Tarlac
O A condition which cannot be complied with

except after giving effect to the donation is

not a condition precedent.
O 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.

O In 1921, Cirer and Hill sold the same property to

George L. Parks.
O 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.
O ISSUE:Whether or not the donation was coupled

with a condition precedent? W/N the action to

revoke has prescribed?

O 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.

O 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.