Central Philippine University vs. Court of Appeals G.R. No. 112230.

July 17, 1995

FACTS:
In 1939, Don Ramon Lopez Sr. executed a deed of donation in favor of CPU together with the following conditions:
a) The land should be utilized by CPU exclusively for the establishment & use of medical college;
b) The said college shall not sell transfer or convey to any 3rd party;
c) The said land shall be called Ramon Lopez Campus and any income from that land shall be put in the fund to be known as Ramon
Lopez Campus Fund.

However, on May 31, 1989, PR, who are the heirs of Don Ramon filed an action for annulment of donation, reconveyance & damages
against CPU for not complying with the conditions. The heirs also argued that CPU had negotiated with the NHA to exchange the donated
property with another land owned by the latter.

Petitioner alleged that the right of private respondents to file the action had prescribed.

ISSUE:
1) WON petitioner failed to comply the resolutely conditions annotated at the back of petitioners certificate of title without a fixed period
when to comply with such conditions? YES
2) WON there is a need to fix the period for compliance of the condition? NO

HELD:

1)
Under Art. 1181, on conditional obligations, the acquisition of rights as well the extinguishment or loss of those already acquired shall
depend upon the happening of the event which constitutes the condition. Thus, when a person donates land to another on the condition
that the latter would build upon the land a school is such a resolutory one. The donation had to be valid before the fulfillment of the
condition. If there was no fulfillment with the condition such as what obtains in the instant case, the donation may be revoked & all rights
which the donee may have acquired shall be deemed lost & extinguished.

More than a reasonable period of fifty (50) years has already been allowed petitioner to avail of the opportunity to comply with the
condition even if it be burdensome, to make the donation in its favor forever valid. But, unfortunately, it failed to do so. Hence, there is no
more need to fix the duration of a term of the obligation when such procedure would be a mere technicality and formality and would serve
no purpose than to delay or lead to an unnecessary and expensive multiplication of suits.

Records are clear and facts are undisputed that since the execution of the deed of donation up to the time of filing of the instant action,
petitioner has failed to comply with its obligation as donee. Petitioner has slept on its obligation for an unreasonable length of time.
Hence, it is only just and equitable now to declare the subject donation already ineffective and, for all purposes, revoked so that petitioner
as donee should now return the donated property to the heirs of the donor, private respondents herein, by means of reconveyance.

2)
Under Art. 1197, when the obligation does not fix a period but from its nature & circumstance it can be inferred that the period was
intended, the court may fix the duration thereof because the fulfillment of the obligation itself cannot be demanded until after the court
has fixed the period for compliance therewith & such period has arrived. However, this general rule cannot be applied in this case
considering the different set of circumstances existing more than a reasonable period of 50yrs has already been allowed to petitioner to
avail of the opportunity to comply but unfortunately, it failed to do so. Hence, there is no need to fix a period when such procedure would
be a mere technicality & formality & would serve no purpose than to delay or load to unnecessary and expensive multiplication of suits.

Under Art. 1191, when one of the obligors cannot comply with what is incumbent upon him, the obligee may seek rescission before the
court unless there is just cause authorizing the fixing of a period. In the absence of any just cause for the court to determine the period of
compliance there is no more obstacle for the court to decree recission.
JACINTO VS. KAPARAZ (G.R. No. 81158 May 22, 1992)

FACTS:
On 11 March 1966, petitioners and private respondents entered into an agreement under which the private respondents agreed to sell and
convey to petitioners a portion consisting of 600 square meters of a lot located in Davao Oriental for a total amount of P1,800.00 with a
downpayment of P800.00 upon execution of the Agreement. The balance of P1,000.00 was to be paid by petitioners on installment at the
rate of P100.00 a month to the Development Bank of the Philippines to be applied to private respondents' loan accounts. The pertinent
portions of the Agreement read as follows:
6. That the PARTY OF THE FIRST PART hereby agrees, promises and binds himself to sell, cede, transfer, and convey absolutely to the
PARTY OF THE SECOND PART 600 -square meter portion of the property together with all the improvements thereon
9. That the PARTY OF THE FIRST PART agrees and binds himself to acknowledge receipt of every and all monthly payments remitted to
the Development Bank of the Philippines by the PARTY OF THE SECOND PART and further agrees and binds himself to execute the
final deed of absolute sale of the 600 square meters herein above referred to in favor of the PARTY OF THE SECOND PART as soon as
the settlement or partition of the estate of the deceased Narcisa Kaparaz shall have been consummated and effected, but not later than
March 31, 1967.
Upon the execution of the agreement, petitioners paid the downpayment of P800.00 and were placed in possession of the portion
described therein. As to the P1,000.00 which was to be paid directly to the DBP, petitioners claim that they had even made an excess
payment of P100.00.In view of the refusal of private respondents to execute the deed of sale, petitioners filed against them a complaint for
specific performance with the Court of First Instance.Private respondents alleged that the sale did not materialize because of the failure of
petitioners to fulfill their promise to make timely payments on the stipulated price to the DBP; as a result of such failure, they (private
respondents) failed to secure the release of the mortgage on the property. They then prayed for the dismissal of the case and a declaration
that the agreement is null and void.

ISSUE:
Are respondents entitled to rescind the agreement?

RULING:
No. Since in a contract of sale, the non-payment of the price is a resolutory condition, 13 the remedy of the seller under Article 1191 of
the Civil Code is to exact fulfillment or to rescind the contract. In respect, however, to the sale of immovable property, this Article must
be read together with Article 1592 of the same Code:
Art. 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.
In the case at bar, there was non-compliance with the requirements prescribed in there provisions. It is not controverted that private
respondents had neither filed an action for specific performance nor demand the rescission of the agreement either judicially or by a
notarial act before the filing of the complaint. It is only in their Answer that they belatedly raised the defense of resolution of the contract
pursuant to Article 1191 by reason of petitioners breach of their obligation. Moreover, the delay incurred by petitioners was but a casual
or slight breach of the agreement, which did not defeat the object of the parties in entering in the agreement. A mere casual breach does
not justify rescission. Rescission of the agreement was not available to private respondents.
DUCUSIN, petitioners, vs.
HON. COURT OF APPEALS and BALIOLA, respondents.
G.R. No. L-58286
May 16, 1983

FACTS:
On February 20, 1975, petitioner Ducusin leased to private respondent, Virgilio S. Baliola married to Lilia Baliola a one-door apartment
unit under the contract of lease, Exhibit "A", pertinent stipulations of which state:

2. The term of this contract shall be in a month to month basis commencing on February 19,1975 until terminated by the lessor
on the ground that his children need the premises for their own use or residence or upon any ground provided for in
accordance with law;

On January 18, 1977, petitioner Ducusin sent a "Notice to Terminate Lease Contract" to private respondents Baliolas terminating the lease
and giving them until March 15, 1977 within which to vacate the premises for the reason that his two children were getting married and
will need the apartment for their own use and residence. Respondents made no reply.

So on April 14, 1977, petitioners filed an action for ejectment against the Baliola spouses in the City Court of Manila, where it was
decided in favor of the lessor Ducusin on the ground that the "defendants' contract with the plaintiff has already terminated with the notice
of termination sent by the plaintiff to the defendants on the ground that he needs the premises for his own children."

The Court of First Instance of Manila as well as the CA affirmed the decision.

ISSUE:
W/O an owner of a leased premises can unilaterally terminate the contract of lease under the terms and conditions stated in the case

HELD: YES, the stipulation is valid

The Parties to the contract of lease agreed that the obligations arising from the said contract shall be extinguished due to the following
causes;
(1) termination of the contract by mutual consent of the Parties;
(2) when the lessor elects to terminate the contract on the ground that his children need the premises for their own use or
residence and
(3) for any cause as provided in accordance with law.

The validity of the terms and conditions in a contract is governed by the following Civil Code provisions:

Art. 1308. The contract must bind both contracting parties; its validity or compliance cannot be left to the will of one
of them.

Art. 1182. When the fulfillment of the condition depends upon the sole will of the debtor, the conditional obligation
shall be void. If it depends upon chance or upon the will of a third person, the obligation shall take effect in
conformity with the provisions of this Code.

The need of the lessor's children of the leased premises is not a condition the happening of which is dependent solely upon the will of the
lessor. The happening of the condition depends upon the will of a third person the lessor's children; therefore, valid.
Rustan Pulp and Paper Mills v. IAC

Facts: Sometime in 1966, petitioner Rustan established a pulp and paper mill. In 1967, respondent Lluch who is a holder of
a forest products license transmitted a letter to petitioner Rustan for the supply of raw materials by the former to the latter.
Petitioner, in response thereto, proposed that the contract to supply to not be exclusive because Rustan shall have the option
to purchase from other qualified suppliers.

These prefatory business proposals culminated in the execution of a contract of sale whereby Lluch agreed to sell and
Rustan undertook to pay the price of the pulp wood raw materials to be delivered in the buyers plant. Buyer in the contract
stipulated that he shall have the right to stop delivery of the said raw materials by the seller covered by the contract when it
shall become necessary with sufficient notice to seller.

In the installation of the plant facilities, the technical staff of Rustan recommended the acceptance of deliveries from other
suppliers which corresponding deliveries were made. During the test run of the pulp mill, the machinery line had major
defect while the deliveries of the raw materials piled up which prompted the Japanese supplier to recommend the cessation
of the deliveries. The suppliers were informed to stop the deliveries.

Private respondent LLuch sought to clarify the tenor of the letter as to whether the cessation of delivery or the termination
of the contract of sale was intended but to no avail. With the ambiguity notwithstanding, Lluch and the other suppliers
resumed the deliveries.

In 1969, the complaint for contractual breach was filed but was dismissed so they took it with the respondent court which
ordered the payment by the petitioners of damages to private respondents.

ISSUE: W/N the contractual stipulations by Rustan as regards to stoppage of delivery of the materials are valid.
W/N Petitioners should be held liable for damages.

HELD: Lluch was correctly apprehensive as to the stipulations as regards the delivery considering that the conditions
resented was solely dependent upon the will of Rustan. The resumption of the delivery was dependent also on the sole will
of Rustan. Futher, given that the company continued receiving the supplies from Lluch and the other suppliers, it was
doubtful that Rustan had sufficient suppliers.

Because of the purely potestative imposition, the stipulation should be stricken out without affecting the other validly
stipulated conditions relating to the fulfillment of an already existing obligation. The condition which is both potestative and
resolutory may be valid however it would only be valid at the beginning of the contract and not during the fulfillment of an
already existent obligation.

However, the private petitioners may not be held liable for damages as individuals even if they entered into the contract in
their official capacities because the corporation has a distinct and separate identity from their members. Absent stipulations
to the contrary, they may not be held liable in their personal capacities.