HEIRS OF CAYETANO PANGAN
and CONSUELO PANGAN,*
Petitioners, -
versus - SPOUSES ROGELIO PERRERAS and PRISCILLA
PERRERAS, Respondents. |
G.R.
No. 157374
Present: Quisumbing, J., Chairperson,
CARPIO-MORALES, Brion,
ABAD, JJ. Promulgated: August
27, 2009 |
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D E C I S I O N
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BRION, J.: |
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The
heirs[1]
of spouses Cayetano and Consuelo Pangan (petitioners-heirs) seek the
reversal of the Court of Appeals’ (CA)
decision[2]
of June 26, 2002, as well its resolution of February 20, 2003, in CA-G.R. CV
Case No. 56590 through the present
petition for review on certiorari.[3] The CA decision affirmed the Regional Trial
Court’s (RTC) ruling[4]
which granted the complaint for specific performance filed by spouses Rogelio
and Priscilla Perreras (respondents)
against the petitioners-heirs, and dismissed the complaint for consignation
instituted by Consuelo Pangan (Consuelo) against the respondents.
THE FACTUAL ANTECEDENTS
The
spouses Pangan were the owners of the lot and two-door apartment (subject properties) located at P540,000.00. On the same day, Consuelo received P20,000.00
from the respondents as earnest money, evidenced by a receipt (June 2, 1989
receipt)[6]
that also included the terms of the parties’ agreement.
Three days later, or on P540,000.00 to P580,000.00.
In compliance with the agreement, the respondents issued
two Far East Bank and Trust Company checks payable to Consuelo in the amounts
of P200,000.00 and P250,000.00 on P20,000.00 earnest money
she received from the respondents, but the latter rejected it. Thus, Consuelo
filed a complaint for consignation against the respondents on
The respondents, who insisted on enforcing the agreement, in
turn instituted an action for specific performance against Consuelo before the
same court on
In
her Answer, Consuelo claimed that she was justified in backing out from the
agreement on the ground that the sale was subject to the consent of the
petitioners-heirs who became co-owners of the property upon the death of her
husband, Cayetano. Since the petitioners-heirs
disapproved of the sale, Consuelo claimed that the contract became ineffective
for lack of the requisite consent. She
nevertheless expressed her willingness to return the P20,000.00 earnest
money she received from the respondents.
The RTC ruled in the respondents’ favor; it upheld the
existence of a perfected contract of sale, at least insofar as the sale involved
Consuelo’s conjugal and hereditary shares in the subject properties. The trial court found that Consuelo’s receipt
of the P20,000.00 earnest money was an “eloquent manifestation of the
perfection of the contract.” Moreover,
nothing in the P10,000.00 as attorney’s fees to the respondents. Corollarily, it dismissed Consuelo’s
consignation complaint.
Consuelo and the petitioners-heirs appealed the RTC
decision to the CA claiming that the trial court erred in not finding that the
agreement was subject to a suspensive condition – the consent of the petitioners-heirs
to the agreement. The CA, however,
resolved to dismiss the appeal and, therefore, affirmed the RTC decision. As the RTC did, the CA found that the payment
and receipt of earnest money was the operative act that gave rise to a
perfected contract, and that there was nothing in the parties’ agreement that
would indicate that it was subject to a suspensive condition. It declared:
Nowhere in the agreement of the parties, as
contained in the June 2, 1989 receipt issued by [Consuelo] xxx, indicates that
[Consuelo] reserved titled on [sic] the property, nor does it contain any
provision subjecting the sale to a
positive suspensive condition.
Unconvinced by the correctness of both the RTC and the CA rulings, the
petitioners-heirs filed the present appeal by certiorari alleging reversible errors committed by the appellate
court.
THE PETITION
The petitioners-heirs primarily contest the finding that there was a
perfected contract executed by the parties. They allege that other than the finding that
Consuelo received P20,000.00 from the respondents as earnest money, no
other evidence supported the conclusion that there was a perfected contract between
the parties; they insist that Consuelo specifically informed the respondents
that the sale still required the petitioners-heirs’ consent as co-owners. The refusal of the petitioners-heirs to sell
the subject properties purportedly amounted to the absence of the requisite
element of consent.
Even assuming that the agreement amounted to a perfected contract, the
petitioners-heirs posed the question of the agreement’s proper characterization
– whether it is a contract of sale or
a contract to sell. The petitioners-heirs posit that the
agreement involves a contract to sell, and the respondents’ belated
payment of part of the purchase price, i.e., one day after the June 14,
1989 due date, amounted to the non-fulfillment of a positive suspensive
condition that prevented the contract from acquiring obligatory force. In support of this contention, the petitioners-heirs
cite the Court’s ruling in the case of Adelfa Rivera, et al. v. Fidela del
Rosario, et al.: [7]
In a contract of sale, the title to the property
passes to the vendee upon the delivery of the thing sold; while in a contract
to sell, ownership is, by agreement, reserved in the vendor and is not to pass
to the vendee until full payment of the purchase price. In a contract to sell, the payment of the
purchase price is a positive suspensive condition, the failure of which is not
a breach, casual or serious, but a situation that prevents the obligation of
the vendor to convey title from acquiring an obligatory force.
[Rivera], however, failed to complete payment of the
second installment. The non-fulfillment of the condition rendered the contract
to sell ineffective and without force and effect. [Emphasis in the original.]
From these contentions, we simplify
the basic issues for resolution to three questions:
1.
Was there a perfected contract between the parties?
2.
What is the nature of the contract between them? and
3.
What is the effect of the respondents’ belated payment
on their contract?
THE COURT’S RULING
There was a perfected contract between the parties since all the
essential requisites of a contract were
present
Article 1318 of the Civil Code declares
that no contract exists unless the following requisites concur: (1) consent of
the contracting parties; (2)
object certain which is the subject matter of the contract; and (3) cause of
the obligation established. Since the
object of the parties’ agreement involves properties co-owned by Consuelo and
her children, the petitioners-heirs insist that their approval of the sale
initiated by their mother, Consuelo, was essential to its perfection. Accordingly, their refusal amounted to the
absence of the required element of consent.
That a thing is sold without the
consent of all the co-owners does not invalidate the sale or render it
void. Article 493 of the Civil Code[8]
recognizes the absolute right of a co-owner to freely dispose of his pro indiviso
share as well as the fruits and other benefits arising from that share,
independently of the other co-owners. Thus,
when Consuelo agreed to sell to the respondents the subject properties, what
she in fact sold was her undivided interest that, as quantified by the RTC,
consisted of one-half interest, representing her conjugal share, and one-sixth
interest, representing her hereditary share.
The petitioners-heirs nevertheless
argue that Consuelo’s consent was predicated on their consent to the sale, and
that their disapproval resulted in the withdrawal of Consuelo’s consent. Yet, we find nothing in the parties’
agreement or even conduct – save Consuelo’s self-serving testimony – that would
indicate or from which we can infer that Consuelo’s consent depended on her
children’s approval of the sale. The
explicit terms of the June 8, 1989 receipt[9]
provide no occasion for any reading that the agreement is subject to the
petitioners-heirs’ favorable consent to the sale.
The presence of Consuelo’s consent and, corollarily, the existence of a
perfected contract between the parties are further evidenced by the payment and
receipt of P20,000.00, an earnest money by the contracting parties’
common usage. The law on sales, specifically Article 1482 of the Civil Code,
provides that whenever earnest money is given in a contract of sale, it
shall be considered as part of the price and proof of the perfection of the
contract. Although the
presumption is not conclusive, as the parties may treat the earnest money
differently, there is nothing alleged in the present case that would give rise
to a contrary presumption. In cases
where the Court reached a conclusion contrary to the presumption declared in
Article 1482, we found that the money initially paid was given to guarantee
that the buyer would not back out from the sale, considering that the
parties to the sale have yet to arrive at a definite agreement as to its terms
– that is, a situation where the contract has not yet been perfected.[10] These situations do not obtain in the present
case, as neither of the parties claimed that the P20,000.00 was given merely
as guarantee by the respondents, as vendees, that they would not back out from
the sale. As we have pointed out, the
terms of the parties’ agreement are clear and explicit; indeed, all the
essential elements of a perfected contract are present in this case. While the respondents required that the
occupants vacate the subject properties prior to the payment of the second
installment, the stipulation does not affect the perfection of the contract,
but only its execution.
In sum, the case contains no element, factual or legal, that negates the
existence of a perfected contract between the parties.
The characterization of the contract can be considered irrelevant in
this case in light of Article 1592 and the Maceda Law, and the petitioners-heirs’
payment
The petitioners-heirs posit that the
proper characterization of the contract entered into by the parties is
significant in order to determine the effect of the respondents’ breach of the
contract (which purportedly consisted of a one-day delay in the payment of part
of the purchase price) and the remedies to which they, as the non-defaulting
party, are entitled.
The question of characterization of the
contract involved here would necessarily call for a thorough analysis of the
parties’ agreement as embodied in the
Admittedly, the given facts, as found by the lower courts, and in the
absence of additional details, can be interpreted to support two conflicting
conclusions. The failure of the lower
courts to pry into these matters may
understandably be explained by the issues raised before them, which did
not require the additional details. Thus,
they found the question of the contract’s characterization immaterial in their
discussion of the facts and the law of the case. Besides, the petitioners-heirs raised the question
of the contract’s characterization and the effect of the breach for the first time through the present
Rule 45 petition.
Points of law, theories, issues and arguments not
brought to the attention of the lower court need not be, and ordinarily will
not be, considered by the reviewing court, as they cannot be raised for the
first time at the appellate review stage. Basic considerations of fairness and due
process require this rule.[12]
At any rate, we do not find the question of
characterization significant to fully pass upon the question of default due to
the respondents’ breach; ultimately, the breach was cured and the contract
revived by the respondents’ payment a day after the due date.
In cases of breach due to
nonpayment, the vendor may avail of the remedy of rescission in a contract of sale.
Nevertheless, the defaulting vendee may defeat the vendor’s right to
rescind the contract of sale if he pays the amount due before he receives a
demand for rescission, either judicially or by a notarial act, from the vendor.
This right is provided under Article
1592 of the Civil Code:
Article 1592.
In the sale of immovable property, even though it may have been
stipulated that upon failure to pay the price at the time agreed upon the
rescission of the contract shall of right take place, the vendee may pay, even after the expiration of the period, as long as
no demand for rescission of the contract has been made upon him either
judicially or by a notarial act. After the demand, the court may not grant him
a new term. [Emphasis supplied.]
Nonpayment of the purchase price in contracts to
sell, however, does not constitute a
breach; rather, nonpayment is a condition that prevents the obligation from
acquiring obligatory force and results
in its cancellation. We stated in Ong v. CA[13]
that:
In a contract to sell, the payment of the purchase price is a positive
suspensive condition, the failure of which is not a breach, casual or serious,
but a situation that prevents the obligation of the vendor to convey title from
acquiring obligatory force.
The non-fulfillment of the condition of full payment rendered the
contract to sell ineffective and without force and effect. [Emphasis supplied.]
As in the rescission of a contract of sale for nonpayment of the price,
the defaulting vendee in a contract to sell may defeat the vendor’s right to
cancel by invoking the rights granted to him under Republic Act No. 6552 or the
Realty Installment Buyer Protection Act (also known as the Maceda Law); this law provides for a 60-day grace period within
which the defaulting vendee (who has paid less than two years of installments) may
still pay the installments due. Only
after the lapse of the grace period with continued nonpayment of the amounts
due can the actual cancellation of the contract take place. The pertinent provisions of the Maceda Law provide:
xxxx
Section 2. It
is hereby declared a public policy to protect buyers of real estate on
installment payments against onerous and oppressive conditions.
Sec. 3. In
all transactions or contracts involving the sale or financing of real
estate on installment payments, including residential condominium
apartments but excluding industrial lots, commercial buildings and sales to
tenants under Republic Act Numbered Thirty-eight hundred forty-four as amended
by Republic Act Numbered Sixty-three hundred eighty-nine, where the buyer has
paid at least two years of installments, the buyer is entitled to the following
rights in case he defaults in the payment of succeeding installments:
xxxx
Section 4. In case where less than two years of
installments were paid, the seller shall give the buyer a grace period of not
less than 60 days from the date the installment became due. If the buyer fails to pay the installments due
at the expiration of the grace period, the seller may cancel the contract after
thirty days from the receipt by the buyer of the notice of cancellation or the
demand for rescission of the contract by notarial act. [Emphasis supplied.]
Significantly, the Court has
consistently held that the Maceda Law covers not only sales on installments of
real estate, but also financing of such acquisition; its Section 3 is
comprehensive enough to include both contracts of sale and contracts to sell,
provided that the terms on payment of the price require at least two
installments. The contract entered into by the parties herein can very well
fall under the Maceda Law.
Based on the above discussion, we
conclude that the respondents’ payment on
WHEREFORE, we DENY the petitioners-heirs’ petition
for review on certiorari, and AFFIRM the decision of the Court of
Appeals dated June 24, 2002 and its resolution dated February 20, 2003 in
CA-G.R. CV Case No. 56590. Costs against the petitioners-heirs.
SO
ORDERED.
ARTURO D. BRION
Associate Justice
WE CONCUR:
LEONARDO A. QUISUMBING
Associate Justice
Chairperson
|
CONCHITA
CARPIO-MORALES Associate Justice |
MARIANO C. Associate Justice |
ROBERTO A. ABAD
Associate Justice
ATTESTATION
I attest
that the conclusions in the above Decision had been reached in consultation
before the case was assigned to the writer of the opinion of the Court’s
Division.
LEONARDO A. QUISUMBING
Associate Justice
Chairperson
CERTIFICATION
Pursuant to Section 13, Article VIII of the
Constitution, and the Division Chairperson’s Attestation, it is hereby
certified 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.
REYNATO S. PUNO
Chief Justice
* Deceased.
[1] Victor, Ludinila, Hermelina, Virgilio, and Editha, all surnamed Pangan; rollo, p. 33.
[2] Penned by Associate
Justice Elvi John S. Asuncion (separated from the service), with Associate
Justice Portia Aliño-Hormachuelos and Associate Justice Edgardo F. Sundiam
(deceased), concurring, id., pp.
21-25.
[3] Under Rule 45 of the
Rules of Court; id., pp. 10-18.
[4] In
Civil Case Nos. 89-50258 and 89-50259, penned by Judge Ed Vincent S. Albano on
[5] The land is covered by TCT No. 16098 and
registered in the name of spouses Cayetano and Consuelo Pangan.
[6] Rollo, p. 6. The receipt stated:
Received from Mrs. Prisicilla Perreras of P20,000.00) as EARNEST MONEY
for the house and lot located at
The total purchased [sic] price is Five
Hundred Forty Thousand Pesos (P540,000.00).
Two Hundred Fifty Thousand Pesos (P250,000.00)
to be given on or before June 14/89.
The total balance of Two Hundred Seventy Thousand
Pesos (P270,000.00) to be given once
the tenants vacated [sic] the premises. [Emphasis in the
original.]
[7] G.R. No. 144934,
[8] The full text of Article 493 of the Civil Code reads:
Each co-owner shall have full ownership of his part and of the fruits and benefits pertaining thereto, and he may therefore alienate, assign or mortgage it, and even substitute another person in its enjoyment, except when personal rights are involved. But the effect of the alienation or the mortgage, with respect to the co-owners, shall be limited to the portion which may be allotted to him in the division upon the termination of the co-ownership.
[9] Supra note 6.
[10] See Manila Metal Container Corporation v. Tolentino, G.R. No. 166862, December 20, 2006, 511 SCRA 444; San Miguel Properties Phil., Inc. v. Huang, G.R. No. 137290, July 31, 2000, 336 SCRA 737, citing Spouses Doromal v. CA, 66 SCRA 575 (1975).
[11] See Cordero v. F.S. Management and Development
Corporation, Inc., G.R. No. 167213,
[12] Pag-Asa Steel Works, Inc. v. CA, G.R. No. 166647,
[13] G.R. No. 97347,