This case involved a dispute over a conditional deed of sale for a parcel of land owned by Agapita Catungal. Under the deed, the buyer Rodriguez would pay the balance of the purchase price once a road right of way was successfully negotiated. The Catungals argued this made the contract void under Article 1308. However, the Court found the condition was not purely dependent on Rodriguez's will, but also on third parties from whom the right of way was needed. Additionally, the condition applied only to Rodriguez's obligation to pay, not the validity of the entire contract. Therefore, the conditional deed of sale did not violate the principle of mutuality and was valid.
This case involved a dispute over a conditional deed of sale for a parcel of land owned by Agapita Catungal. Under the deed, the buyer Rodriguez would pay the balance of the purchase price once a road right of way was successfully negotiated. The Catungals argued this made the contract void under Article 1308. However, the Court found the condition was not purely dependent on Rodriguez's will, but also on third parties from whom the right of way was needed. Additionally, the condition applied only to Rodriguez's obligation to pay, not the validity of the entire contract. Therefore, the conditional deed of sale did not violate the principle of mutuality and was valid.
This case involved a dispute over a conditional deed of sale for a parcel of land owned by Agapita Catungal. Under the deed, the buyer Rodriguez would pay the balance of the purchase price once a road right of way was successfully negotiated. The Catungals argued this made the contract void under Article 1308. However, the Court found the condition was not purely dependent on Rodriguez's will, but also on third parties from whom the right of way was needed. Additionally, the condition applied only to Rodriguez's obligation to pay, not the validity of the entire contract. Therefore, the conditional deed of sale did not violate the principle of mutuality and was valid.
This case involved a dispute over a conditional deed of sale for a parcel of land owned by Agapita Catungal. Under the deed, the buyer Rodriguez would pay the balance of the purchase price once a road right of way was successfully negotiated. The Catungals argued this made the contract void under Article 1308. However, the Court found the condition was not purely dependent on Rodriguez's will, but also on third parties from whom the right of way was needed. Additionally, the condition applied only to Rodriguez's obligation to pay, not the validity of the entire contract. Therefore, the conditional deed of sale did not violate the principle of mutuality and was valid.
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Catungal vs Rodriguez
G.R. 146839
Facts:
Agapita T. Catungal (Agapita) owned a parcel of land (Lot 10963) situated in the Barrio of Talamban,
Cebu City. Agapita, with the consent of her husband Jose, entered into a Contract to Sell[6] with
respondent Rodriguez which subsequently purportedly “upgraded” into a Conditional Deed of Sale.Both
the Contract to Sell and the Conditional Deed of Sale were annotated on the title.
On August 31, 1990 the spouses Catungal requested an advance of P5,000,000.00 on the purchase price
for personal reasons. Rodriquez allegedly refused on the ground that the amount was substantial and was
not due under the terms of their agreement. The Catungal’s rescinded the contract.
Rodirguez filed a complaint against the Catungal’s for arbitrarily rescinding the contract. In a Decision
dated May 30, 1992, the trial court ruled in favor of Rodriguez, finding that: (a) under the contract it was
complainant (Rodriguez) that had the option to rescind the sale; (b) Rodriguez’s obligation to pay the
balance of the purchase price arises only upon successful negotiation of the road right of way; (c) he
proved his diligent efforts to negotiate the road right of way; (d) the spouses Catungal were guilty of
misrepresentation which defeated Rodriguez’s efforts to acquire the road right of way; and (e) the
Catungals’ rescission of the contract had no basis and was in bad faith.
During the pendency of the case with the Court of Appeals, Agapita Catungal passed away and
thus, her husband, Jose, filed on February 17, 1999 a motion for Agapita’s substitution by her surviving
children.[46]
The Catungals alleged that the conditional deed of sale was void ab initio because it violates the mutuality
of contract in view of Article 1308 ncc. Petitioners rely on Article 1308 of the Civil Code to
support their conclusion regarding the claimed nullity of the aforementioned provisions. Article 1308
states that “[t]he contract must bind both contracting parties; its validity or compliance cannot be left to
the will of one of them.”
Article 1182 of the Civil Code, in turn, provides:
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.
Issue
W/N Conditional Deed of Sale violate the principle of mutuality of contracts under Article 1308
of the Civil Code?
Held:
No. In the past, this Court has distinguished between a condition imposed on the perfection of a contract
and a condition imposed merely on the performance of an obligation. While failure to comply with the
first condition results in the failure of a contract, failure to comply with the second merely gives the other
party the option to either refuse to proceed with the sale or to waive the condition. This principle is
evident in Article 1545 of the Civil Code on sales, which provides in part: Art. 1545. Where the obligation of either party to a contract of sale is subject to any condition which is not performed, such party may refuse to proceed with the contract or he may waive performance of the condition x x x.
Paragraph 1(b) of the Conditional Deed of Sale, stating that respondent shall pay the balance of
the purchase price when he has successfully negotiated and secured a road right of way, is not a condition
on the perfection of the contract nor on the validity of the entire contract or its compliance as
contemplated in Article 1308. It is a condition imposed only on respondent’s obligation to pay the
remainder of the purchase price. In our view and applying Article 1182, such a condition is not purely
potestative as petitioners contend. It is not dependent on the sole will of the debtor but also on the will of
third persons who own the adjacent land and from whom the road right of way shall be negotiated.
The condition is a mixed condition which is allowed by Article 1182.
"potestative condition" is imposed not on the birth of the obligation but on its fulfillment, only the condition is avoided, leaving unaffected the obligation itself.
With respect to petitioners’ argument that paragraph 5 of the Conditional Deed of Sale likewise
rendered the said contract void, we find no merit to this theory.
Reading paragraph 5 in its entirety will show that Rodriguez’s option to rescind the contract is
not absolute as it undeniably only limited to the contingency that Rodriguez shall not be able to secure the
road right of way. .
In sum, Rodriguez’s option to rescind the contract is not purely potestative but rather also subject to the
same mixed condition as his obligation to pay the balance of the purchase price – i.e., the negotiation of
a road right of way. In the event the condition is fulfilled (or the negotiation is successful), Rodriguez
must pay the balance of the purchase price. In the event the condition is not fulfilled (or the negotiation
fails), Rodriguez has the choice either (a) to not proceed with the sale and demand return of his
downpayment or (b) considering that the condition was imposed for his benefit, to waive the condition
and still pay the purchase price despite the lack of road access. This is the most just interpretation of the
parties’ contract that gives effect to all its provisions.
In any event, even if we assume for the sake of argument that the grant to Rodriguez of an option to
rescind, in the manner provided for in the contract, is tantamount to a potestative condition, not being a
condition affecting the perfection of the contract, only the said condition would be considered void and
PUBLIC ESTATES AUTHORITY vs. ELPIDIO S. UY G.R. Nos. 147933-34 December 12, 2001 FACTS: A Landscaping Agreement Was Executed Between Petitioner Public Estates Authority and Elpidio Uy's Company
