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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

Ø Petitioners are 35 retired employees of defendant

company who sought to recover salary diff due to them under MOA with defendant Ø 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

Ø 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.

Ø MOA does not stipulate that salary diff shall be

paid only from surplus profits

Ø 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 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, 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 versus DOMINGO P. ESPIDOL G.R. No. 180665, Aug. 11,2010

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 latter’s 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 buyer’s 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 debtor’s 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

Crisostomo valid?

the

condition

laid

down

by

Damasa

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 Damasa’s 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 Damasa’s 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

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.