G.R. no. 97347
Jaime Ong vs. Court of Appeals and Robles
couple
July 6, 1999
Facts:
Petitioner Jaime Ong and respondents, Robles
couple executed an “Agreement of Purchase and Sale” with regard to 2 parcels of
land, on which a rice mill and a piggery were found and thus included. The terms and conditions of the contract
included an initial payment, payment for the loan of the sellers including
interest, and the balance to be satisfied in 4 equal quarterly installments.
As agreed, petitioner took possession of the
subject property and everything else thereon upon satisfaction of the initial
payment. However, petitioner failed to comply with the payment for the loan.
Plus, the checks that the petitioner issued to the couple as payment for the
balance were dishonored due to insufficient funds. To avoid foreclosure, the
respondent couple sold the ricemill with the knowledge and conformity of
petitioner.
Respondents sought for the rescission of the
properties due to the latter’s failure to comply with the terms and conditions
on the contract.
RTC ruled in favor of the Robles couple and
ordered the restitution of the properties. The couple were also ordered to
return an amount, as determined by the court, to Ong.
CA affirmed the decision in contemplation of
Article 1191 of The New Civil Code
Issue:
(1) whether the contract entered into by the parties may be validly
rescinded under Article 1191 of the New Civil Code as distinguished to Article
1383 of the same.
(2) whether the parties had
novated their original contract as to the time and manner of payment.
HELD:
The Contract entered into by
the parties was a “Contract to Sell” which means that 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.
Respondents bound themselves to deliver a deed of absolute sale and clean title covering the
two parcels of land upon full payment by the buyer of the purchase price of
P2,000,000.00 subject to the fulfillment of the suspensive condition of full
payment of the purchase price by the petitioner. Petitioner, however, failed to
complete payment of the purchase price. The non-fulfillment of the condition of
full payment rendered the contract to sell ineffective and without force and
effect.
As to the issue on novation,
in order for novation to take place, the concurrence of the following
requisites is indispensable: (1) there must be a previous valid obligation; (2)
there must be an agreement of the parties concerned to a new contract; (3)
there must be the extinguishment of the old contract; and (4) there must be the
validity of the new contract. 25 The aforesaid requisites are not found
in the case at bench.
