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VICENTE L. GO,
Petitioner, -versus- PURA V. KALAW, INC.,
Respondent. |
G.R.
No. 131408 Present: pUNO, J., Chairperson, Sandoval-Gutierrez, AZCUNA, and GARCIA,
JJ. Promulgated: |
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SANDOVAL-GUTIERREZ, J.:
For
our resolution is the instant Petition for Review on Certiorari seeking to
reverse the Decision[1]
and Resolution[2] of the
Court of Appeals dated
Pura
V. Kalaw, Inc., a domestic corporation, herein respondent, is the registered
owner of a parcel of land located at
On
July 13, 1980, while respondent was constructing the PVK Condominium, Vicente
Go, petitioner, agreed to purchase Unit 1-A for P665,200.00. Unit 1-A comprises one-half (1/2) of the
ground floor and mezzanine of the building. The parties then executed a Contract to Sell
providing, among others, that the down payment is 1/2 of the purchase
price. The balance is payable upon
completion of Unit 1-A and upon written notice to the buyer that the unit has
been completed and ready for occupancy.
Petitioner
then paid the down payment of P327,600.00. He moved in to the unit and has occupied it
since February 1982.
On
P327,600.00. Petitioner replied that he was applying for a
bank loan in order to settle his obligation.
On
However,
petitioner refused to sign the waiver, citing defects in the building. Respondent then sent petitioner a letter dated
Since
petitioner refused to sign a waiver and to pay the balance of the purchase
price, respondent sent him a letter dated
Subsequently,
respondent sent petitioner two letters dated P3,023,000.00. But the latter did not respond. This prompted respondent’s counsel to send petitioner
another letter (dated
Petitioner replied that since respondent
violated the terms of their agreement, it could not unilaterally rescind the
Contract to Sell. Respondent responded by
sending petitioner a computation of his overdue rentals. However, he refused to pay, prompting respondent to file a
Complaint for Illegal Detainer against petitioner with the Metropolitan Trial
Court (MeTC), Branch 13, Manila, docketed as Civil Case No. 132536-CV.
In
turn, petitioner filed with the Regional Trial Court (RTC), Branch 23,
Later,
petitioner amended his complaint by alleging that respondent failed to complete
the construction of the condominium unit and deliver it to him in accordance
with their Contract to Sell; and that the filing of the complaint for illegal
detainer and respondent’s intention to sell the unit to third persons caused
him injury and prejudice. He thus prayed
that respondent be ordered to sell the unit, or, in the alternative, that the
contract be rescinded. In either case,
he asked for an award of P100,000.00 as exemplary damages, and P50,000.00
as attorney’s fees.
In
its Answer, respondent alleged that due to petitioner’s refusal to sign the “waiver
of parking space,” the building could not be declared as a condominium. Moreover, petitioner has resided in the unit
for eight (8) years without paying either the balance of the purchase price or
the realty taxes thereon. Respondent prayed that petitioner’s down payment
be applied as rentals; and that petitioner be ordered to vacate the unit and
pay exemplary and moral damages, as well as attorney’s fees.
On
WHEREFORE,
judgment is hereby rendered in favor of the plaintiff and against the defendant
as follows:
1.
Declaring and holding the contract to sell, Exh. A and
Exh. 1, as rescinded and consequently, plaintiff is hereby directed to turn
over and surrender the premises covered by said contract to defendant, and simultaneously with such turnover, defendant
is ordered as follows:
A.
To refund and pay plaintiff the sum of P327,600.00
representing the initial payment of 50% of the purchase price of the
condominium unit purchased by plaintiff with interest at the rate of 1% per
month from July 30, 1980, the date of execution of the contract to sell until
said amount is fully paid as provided for in the Contract to Sell;
B.
To pay plaintiff the sum of P1,000,000.00 as
actual or compensatory damages suffered by plaintiff for the loss of the
condominium unit he purchased;
C.
To pay plaintiff the sum of P1,000,000.00 as
moral damages for his sufferings, embarrassment, and the mental anguish he suffered
brought about or as a result of the Contract to Sell he executed with the
defendant, resulting to the filing of an ejectment suit against him, for the
threats and harassment contained in the letters of the defendant’s lawyer and
his fear of losing his shoes and bags business;
D.
To pay the sum of P50,000.00 as exemplary
damages;
E.
To pay the sum of P30,000.00 for and as
attorney’s fees;
F.
To pay the cost of litigation.
The injunction previously issued by this Court is ordered made
permanent.
The counterclaim is ordered dismissed.
SO ORDERED.
On appeal,
the Court of Appeals, on
WHEREFORE, judgment is hereby rendered:
1.
Affirming the decision appealed from only
insofar as it declared the “Contract to Sell” rescinded and directed appellee
“to turn over and surrender the premises” to appellant, the other dispositions
being deleted (underscoring in the original);
2.
Declaring the downpayment of P327,600.00 as
rentals for the use of the premises in accordance with the Contract to Sell;
3.
Ordering appellee to pay appellant attorney’s fees of P200,000.00
and the costs of suit.
SO ORDERED.
Petitioner filed a motion
for reconsideration, but it was denied by the Court of Appeals in its Resolution
of
Hence, the present
petition.
The issue before us is whether
the Court of Appeals erred in rescinding the parties’ Contract to Sell.
Article 1370 of the Civil
Code governs the interpretation of the terms of agreement in a written contract,
thus:
ART. 1370. If the terms of a contract are clear and leave no doubt upon the intention of the contracting parties, the literal meaning of the stipulation shall control.
If the words appear to be contrary to the evident intention of the parties, the latter shall prevail over the former.
Simply put, the literal
meaning of the stipulations shall control the intention of the parties, to be
deciphered not from the unilateral post facto assertions of one of the
parties, but from the language used in the contract.[3] The
language is to be understood literally, just as it so appears in the contract.
Here, the pertinent
provisions of the Contract to Sell between the parties are:
a) The PURCHASER agrees to buy from the DEVELOPER and the DEVELOPER
agrees to sell to said PURCHASER the following described unit, together with
such parking space assigned for the exclusive use of such Unit if such parking
space is allotted to it in the plans of the Project, together with such share
in the common areas which may be described in the Master Deed.
x x x
c) x x x
(2) The balance of the purchase price shall be paid by the PURCHASER
to the DEVELOPER upon final completion of the Condominium Unit covered by this
Contract to Sell and upon written notice to the PURCHASER that said Unit has
been completed and ready for delivery to him, irrespective of whether said
PURCHASER may accept delivery of said Unit or not.
d) The Unit herein purchased shall be completed and delivered to the
PURCHASER within two hundred forty (240) working days from and after the
signing of this Contract subject however to such delays which may be caused by
fire, earthquake, acts of God, the elements of war or civil disturbances,
economic controls making it impossible or difficult to obtain the necessary
materials, acts of third persons or other matters, cause of circumstances
beyond the control of the DEVELOPER.
x x x
f) Upon full payment by the PURCHASER of the full amount of the
purchase price stipulated in paragraph (c) hereof and otherwise upon full
compliance by the PURCHASER of all its obligations herein, the DEVELOPER will
convey to the PURCHASER all the rights and interests of the former in and to
the Unit subject hereof, together with the interest in the Common Areas and in
the Condominium Corporation appurtenant to such Unit. The rights and interests
so conveyed shall be subject to the provisions of the Condominium Act, the
Master Deed, the Declaration of Restrictions, the Articles and By-Laws of the
Condominium Corporation.
g) In the event the PURCHASER should fail to pay for a period of thirty (30) days from the date of completion of the Unit and written notice to said PURCHASER that said Unit is ready for delivery to him/it, this Contract shall, by the mere fact of nonpayment, expire by itself and become null and void, and any and all sums of money paid under this Contract, together with all the improvements made on the premises, shall be considered and become rentals on the property.
x x x Immediately after the expiration of the 30-day period provided for under this clause, the DEVELOPER shall be at liberty to dispose of and sell said Unit and its appurtenances to any interested third person or persons.
We draw the following
conclusions from the foregoing stipulations.
First, the agreement between the parties is a
contract to sell, not a contract of sale. In a contract to sell, ownership is reserved
by the vendor, not to pass to the vendee until full payment of the purchase
price. On the other hand, in a contract
of sale, the vendor loses ownership over of the property and cannot recover
it unless and until the contract is rescinded.[4]
We note that paragraph
(c) (2) of the contract states: “The
balance of the purchase price shall be paid by the PURCHASER upon final completion
of the Condominium Unit covered by this Contract to Sell.” This must be read in relation to the first
sentence of paragraph (f), thus: “Upon full payment by the PURCHASER of the
full amount of the purchase price stipulated in paragraph (c) hereof and
otherwise upon full compliance by the PURCHASER of all its obligations herein,
the DEVELOPER will convey to the PURCHASER all the rights and interests of the
former in and to the Unit subject hereof…” From these stipulations, it is clear
that respondent intended to reserve ownership of the property until petitioner
shall have paid in full the purchase price. In turn, petitioner cannot demand delivery of
the Certificate of Title as he has not yet fully paid the purchase price.
Second, paragraph (g) gives
respondent two (2) remedies should petitioner fail to pay the balance of the
purchase price when due. These remedies
are unilateral rescission of the contract and application of the down payment
to the unpaid rentals.
There is no dispute that petitioner
did not pay the balance of the purchase price. He occupied the unit for eight (8) years without
paying any rent. Thus, respondent has
the right to avail of the said remedies.
Moreover, it can also offer the unit for sale to third persons pursuant
to the contract.
Third, respondent alleged
that petitioner violated the contract when it asked him to sign a “waiver of
parking space.” There is no provision in
the Contract to Sell that a parking space will be provided for the unit
occupied by petitioner. The contract
clearly states that the inclusion of a parking space is subject to
availability. The record likewise shows
that petitioner never complained about the lack of parking space. In his letter of
A contract is the law
between the parties. Both are bound to
comply with its provisions. Its
validity cannot be left to the will of one of them.[5]
As
to the denial of petitioner’s claim for damages and attorney’s fees, suffice it
to say that he did not come to court with clean hands. Because of his violations of the contract,
respondent was compelled to go to court and hire the services of a lawyer to protect
its rights and interests. Thus, the award
of attorney’s fees in its favor is in order.
WHEREFORE, we DENY the petition. The assailed Decision and Resolution of the
Court of Appeals in CA-G.R. CV No. 43785 are AFFIRMED IN TOTO.
Costs against the petitioner.
SO
ORDERED.
ANGELINA
SANDOVAL GUTIERREZ
Associate
Justice
WE
CONCUR:
REYNATO S. PUNO
Associate Justice Chairperson |
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RENATO C. CORONA Associate Justice |
ADOLFO S. AZCUNA Associate Justice |
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CANCIO C. GARCIA Associate Justice |
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I
attest that the conclusions in the above Decision were reached in consultation
before the case was assigned to the writer of the opinion of the Court's
Division.
Associate Justice
Chairperson, Second Division
Chief Justice
[1] Per Associate Justice Oswaldo D. Agcaoili and concurred in by Associate Justice Jaime M. Lantin and Associate Justice Buenaventura J. Guerrero (all retired). Rollo, pp. 30-41.
[2]
[3] Berman Memorial Park, Inc. v. Cheng, G.R. No. 154630, May 6, 2005, 458 SCRA 112, 126-27.
[4] Flancia v. Court of Appeals, G.R.
No. 146997,
[5] Asian Construction & Development Corp. v. Tulabut, G.R. No. 161904, April 26, 2005, 457 SCRA 317, 328.