Heirs of Antonio F. Bernabe Vs CA Digest

HEIRS OF ANTONIO F. BERNABE (namely: EVELYN C. VDA.
DE BERNABE and JOSE III,

SHIRLEY ANN, GREGORY, ALEXANDER, and MICHAEL, all surnamed BERNABE) vs.
COURT OF APPEALS and TITAN CONSTRUCTION CORPORATION
G.R. No. 154402, July 21, 2008
Petitioners in this case seek the review of the Court of Appeals Decision dated 22
January 2002 and Resolution dated 16 June 2002 in CA-G.R. CV No. 63168 which
affirmed the Decision of the Regional Trial Court (RTC) of Makati City, Branch 146
dated 1 December 1998 in Civil Case No. 90-2534.
FACTS:
A COMPLAINT FOR SPECIFIC PERFORMANCE WAS FILED BY TITAN CONSTRUCTION
CORPORATION (TITAN) ON SEPTEMBER 11 1990 BEFORE THE RTC AND AGAINST
petitioners predecessor-in-interest, Antonio F. Bernabe, and his siblings Patricio,
Jose and Cecilia (the defendants), who are co-owners of an undivided one-half ()
share in two (2) parcels of land located in La Huerta, Paraaque, Metro Manila. In an
undated Deed of Sale of Real Estate entered into by Titan and the defendants, the
latter sold their one-half () share in the properties to Titan for P17,700,00.00 and
payment is supposed to be made by ONE MILLION (P1,000,000.00) PESOS upon the
signing by the VENDORS for this DEED OF SALE. BALANCE SHALL BE PAID WITHIN
60 DAYS AFTER ACQUIITION BY THE VENDEE OF A RIGHT OF WAY FROM THE
Municipal Government of Paraaque, Metro Manila, and upon the presentation by
the VENDORS of an agreement with the ERIBERTA DEVELOPMENT CORPORATION
that the latter has agreed that VENDORS share is the northern half and had waived
the right of First Refusal as provided for in the DEED OF PARTITION OF REAL ESTATE.
FURTHERMORE, A violation by the VENDORS of the provision of this paragraph shall
be a ground for cancellation of this Deed title
DEFENDANTS WERE NOT ABLE TO COMPLY WITH THEIR OBLIGATIONS AND TITAN
PRAYED JUDGEMENT OREDRING THEM TO DO SO SINCE TITAN HAS ALREADY paid a
substantial portion of the down payment. Titan then received a letter from the
defendants counsel, Atty. Samuel A. Arcamo, (Atty. Arcamo) cancelling and revoking
the deed of sale allegedly in view of Titans failure to comply with the terms of the
deed. Insisting that it was the defendants who had incurred in default, Titan also
sought the award of damages.
On 26 December 1991, while the case was pending, Jose died without leaving any
heir except his co-defendants.
By virtue of the compromise agreement entered by both parties , similar Deeds of
Conditional Sale dated 3 March 1994 were separately entered into by respondent
Titan as vendee, and defendants Patricio, Cecilia, and Antonio, who is represented
by his attorneys-in-fact, as vendors of their undivided shares in the two properties.
Though Antonio denied entering into a compromise agreement, it was later found
out that it was his children who did so by virtue of a Special Power of Attorney (SPA)
that Antonio himself had executed.
Later, on 16 August 1994, defendant Antonio died and left herein petitioners his
surviving spouse Evelyn Cruz and her children, Jose III, Shirley Ann, Gregory and
Michael as his heirs.
Titan subsequently filed a supplemental complaint. Petitioners denied on their
Answer that a consummated sale was made between Titan and the original
defendants since only an unconcluded negotiation is reflected in the Deed of Sale
of Real Estate and that the fact that the negotiations did not push through is shown
by the absence of the signatures of defendants Patricio and Cecilia. Petitioners also
questioned the genuineness of the Deed of Conditional Sale, pointing out that it had
been signed only later by Titans representative. They argued that, hence, the
Deed of Conditional Sale is null and void and if found otherwise, should be
cancelled and rescinded for failure of Titan to comply with its undertaking.
The RTC ordered the heirs of Antonio to execute a registrable Deed of Absolute Sale
over the one-third (1/3) share of Antonio in the property covered by TCT No. 86793
of the Register of Deeds of Paraaque, pursuant to the Deed of Conditional Sale,
upon Titans payment to them of the amount of P3,431,058.42 representing the
balance of the purchase price.
Petitioners appealed the RTC decision to the Court of Appeals. The appeal was
dismissed in the Decision dated 22 January 2002, and the RTC decision was
affirmed in toto. Petitioners motion for reconsideration was denied in the Resolution
dated 16 July 2002.
ISSUES:
(1)
Under a deed of conditional sale of a parcel of land, may the vendee compel
the vendors to execute a registerable deed of sale based on the allegation that it
had paid a substantial portion of the P1 million down payment of the total
consideration of P17,700,000.00, where it was expressly stipulated that the vendors
would execute the necessary deed of absolute sale in favor of the vendee only upon
full payment?
(2)
May the vendors in a deed of conditional sale ask for rescission of contract for
failure of the vendee to pay in full the agreed consideration?
RULING:
1.
Yes. The vendee may compel the vendors to execute a registerable deed of
sale based on payment of substantial portion as downpayment. When the parties
entered into a compromise, they executed new contracts involving the shares of
Patricio, Cecilia and Antonio in the properties. These new contracts are the three
deeds of conditional sale entered into by Titan with Patricio, Cecilia and Antonio, the
last represented by his attorneys-in-fact. These contracts, all entitled Deed of
Conditional Sale, are contracts to sell.
Titan has a cause of action since it has already partially performed the contract by
making down and other payments on the purchase price, as well as effecting and
spending for the segregation and titling of the shares of petitioners and their coowners in the properties.
2.
No. The vendors cannot seek for rescission on the contract for failure of the
vendee to pay in full the agreed consideration. The demand for rescission based on
the contention that Titan failed to pay the remainder of the purchase price is based
on Article 1191 of the New Civil Code. This article refers to rescission applicable to
reciprocal obligations. Under the Deed of Conditional Sale, the balance of the
purchase price should be paid within sixty (60) days from the fulfillment of several
conditions. At the time of the filing of the supplemental complaint, only three of the
four conditions had been carried out. Thus, at that point, the balance of the
purchase price had not yet become due and so, too, petitioners obligation to
execute a registerable deed of absolute sale had not yet arisen.
petitioners cannot ask for rescission of the Deed of Conditional Sale since it has
been proven that far from violating the conditions of the deed, Titan was ready and
willing to perform its contractual obligations. That the balance had not yet become
due and demandable is a result of the appeal from the RTC and CA decisions, and is
not due to Titans alleged refusal to comply with the contract. Accordingly, the
Deed of Conditional Sale remains valid, but petitioners cannot be compelled by
specific performance to execute the deed of absolute sale in favor of Titan until and
unless Titan settles the balance of the purchase price as agreed upon.
WHEREFORE, in view of the foregoing, the petition is DENIED. Respondent Titan
Construction Corporation is ORDERED to PAY petitioners Heirs of Antonio F.
Bernabe the amount of P3,431,058.42 representing the balance of the purchase
price thereof. The amount due was affirmed by the Court of Appeals which found
that based on the admitted exhibits, vouchers, checks, compromise
agreement/partial judgments, the total payments already made by Titan
isP2,458,274.58 which, if subtracted from the agreed purchase price of
P5,889,333.00, would yield P3,431,058.42. It is this amount that Titan should pay to
petitioners sixty (60) days from the fulfillment of the conditions in order to compel
petitioners to execute the deed of absolute sale in its favor.
within sixty (60) days from the finality of this decision. Petitioners are ORDERED to
ACCEPT the payment and thereupon EXECUTE the proper deed of absolute sale.
Both parties are ORDERED to COMPLY with the other stipulations in the Deed of
Conditional Sale. No pronouncement as to costs.

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HEIRS OF ANTONIO F. BERNABE (namely: EVELYN C. VDA.

DE BERNABE and JOSE III,

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