doctrine
·
NCC 1374: the various stipulations of a contract shall be interpreted
together, attributing to the doubtful ones that sense which may result from all
of them taken jointly."
·
If some stipulation of any contract should admit of several meanings, it
shall be understood as bearing that import which is most adequate to render it
effectual."
contested provision
5. That the VENDEE has the option to rescind the sale. In the event the
VENDEE exercises his option to rescind the herein Conditional Deed of Sale, the
VENDEE shall notify the VENDOR by way of a written notice relinquishing his
rights over the property. The VENDEE shall then be reimbursed by the VENDOR the
sum of P500K representing the DP, interest free, payable but contingent
upon the event that the VENDOR shall have been able to sell the property to
another party.
facts
·
Agapita T. Catungal owned Lot A (65,246 sq m) covered by OCT 105 at Talamban, Cebu City. The said property was allegedly the exclusive
paraphernal property of Agapita.
·
Agapita, with the consent of her husband Jose, entered into a Contract
to Sell with Rodriguez.
Subsequently, the Contract to Sell was purportedly "upgraded" into a
Conditional Deed of Sale. Both deeds were annotated on the title.
·
The
parties entered into is a Conditional Deed of Sale, whereby the spouses
Catungal agreed to sell and Rodriguez agreed to buy Lot A conditioned on the
payment of a certain price but the payment of the purchase price was
additionally made contingent on the successful negotiation of a road right of
way.
·
Spouses Catungal requested an advance of P5M on the purchase price. Rodriquez allegedly refused on the ground that
the amount was substantial and was not due under the terms of their agreement. Shortly after his refusal to pay the
advance, he purportedly learned that the Catungals were offering the property for
sale to third parties.
·
Jose Catungal demanded that the former make up his mind about buying the
land or exercising his "option" to buy because the spouses Catungal
allegedly received other offers.
·
Rodriguez registered his objections to the unwarranted demands in view
of the terms of the Conditional Deed of Sale which allowed him sufficient time
to negotiate a road right of way and granted him, the vendee, the exclusive
right to rescind the contract.
·
Rodriguez purportedly received a letter dated Nov 9, 199015 from Atty. Catungal, stating that the mcontract had been cancelled and
terminated.
procedural history
·
Catungals filed a MTD on the ground of improper venue. The subject property was located in Cebu City and
thus, the complaint should have been filed in Cebu City, not Lapu-lapu City.
·
Rodriguez opposed the MTD on the ground that his action was a personal
action as its subject was breach of a contract, the Conditional Deed of Sale,
and not title to, or possession of real property.
·
Complaint involved a personal action, being merely for damages with a
prayer for injunction.
·
Catungals alleged that they had
the right to rescind the contract in view of
o
(1) Rodriguez’s failure to negotiate the road right of way despite the
lapse of several months since the signing of the contract, and
o
(2) his refusal to pay the additional amount of P5M asked by the Catungals, which to them indicated his lack of funds to
purchase the property.
·
Catungals also allegedly misrepresented that the road right of way will
only traverse two lots owned by Anatolia Tudtud and her daughter Sally who were
their relatives and who had already agreed to sell a portion of the said lots
for the road right of way at a price of P550.00 per sq m.
·
However, because of the Catungals’ acts of offering the property to
other buyers who offered to buy the road lots forP2,500.00 per sq m, the
adjacent lot owners were no longer willing to sell the road lots to Rodriguez
atP550.00 per sq m but were asking for a price of P3,500.00 per sq m.
·
Catungals filed a Petition for Certiorari and Prohibition37 with the CA, questioning the denial of their MTD and the order of
default.
·
TC ruled in favor of Rodriguez, finding that:
o
(a) under the contract it was (Rodriguez) that had the option to rescind
the sale;
o
(b) Rodriguez’s obligation to pay the balance of the purchase price
arises only upon successful negotiation of the road right of way;
o
(c) he proved his diligent efforts to negotiate the road right of way;
o
(d) the spouses Catungal were guilty of misrepresentation which defeated
Rodriguez’s efforts to acquire the road right of way; and
·
CA affirming the TC’s Decision.
·
Counsel for the Catungals, Atty. Borromeo, argued for the first time
that pars 1(b) and 5 of the
Conditional Deed of Sale, whether taken separately or jointly, violated the principle of mutuality of
contracts under Art 1308 of the Civil Code and thus, said contract was void
ab initio.
issue #1: Are Peaches
allowed to raise their theory of nullity of the Conditional Deed of Sale for
the first time on appeal?
·
This is a situation where a party completely changes his theory of the
case on appeal and abandons his previous assignment of errors in his brief,
which plainly should not be allowed as anathema to due process.
·
PH
National Construction Corp v. CA: when a party
adopts a certain theory in the TC, he will not be permitted to change his
theory on appeal, for to permit him to do so would not only be unfair to the
other party but it would also be offensive to the basic rules of fair play,
justice and due process."
issue #2. Do pars 1(b)
and 5 of the Conditional Deed of Sale violate the principle of mutuality of
contracts under Art 1308 of the Civil Code?
“right
of way negotiation” was not a potestative condition
·
The undertaking required of private respondent does not constitute a
"potestative condition dependent solely on his will" that might be
void in accordance with NCC 1182 but a "mixed" condition
"dependent not on the will of the vendor alone but also of third persons
like the squatters and government agencies and personnel concerned."
·
Romero v. CA: Private respondent's failure "to remove the squatters
from the property" within the stipulated period gives Peaches the right to
either refuse to proceed with the agreement or waive that condition in
consonance with NCC 1545. This option clearly belongs to Peaches and not to
private respondent.
catungals
should have filed an action to fix the period
·
What the Catungals should have done was to first file an action in court
to fix the period within which Rodriguez should accomplish the successful
negotiation of the road right of way. Catungals’ demand for Rodriguez to make
an additional payment of P5M was
premature and Rodriguez’s failure to accede to such demand did not justify the
rescission of the contract.
Rodriguez’s
option to rescind the contract is not absolute
·
Peachess’ insist that the Court examine the first sentence of par 5
alone gives the respondent right to rescind arbitrarily. Therefore, the
contract should be considered as void.
·
NCC 1374: the various stipulations of a contract shall be interpreted
together, attributing to the doubtful ones that sense which may result from all
of them taken jointly."
·
If some stipulation of any contract should admit of several meanings, it
shall be understood as bearing that import which is most adequate to render it
effectual."
·
Under the Rules of Court it is prescribed that "[i]n the construction
of an instrument where there are several provisions or particulars, such a
construction is, if possible, to be adopted as will give effect to all" and "for the proper construction of an instrument, the
circumstances under which it was made, including the situation of the subject
thereof and of the parties to it, may be shown, so that the judge may be placed
in the position of those whose language he is to interpret."
·
Rodriguez’s option to rescind the contract is not absolute as it is
subject to the requirement that there should be written notice to the vendor
and the vendor shall only return Rodriguez’s DP of P500K, when the vendor shall have
been able to sell the property to another party.
·
The
intention of the parties for providing subsequently in par 5 that Rodriguez has
the option to rescind the sale is undeniably only limited to the contingency
that Rodriguez shall not be able to secure the road right of way. The
reason only the DP was stipulated to be returned is that the vendee’s option to
rescind can only be exercised in the event that no road right of way is secured
and, thus, the vendee has not made any additional payments, other than his DP.
·
In the
event 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 DP 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.
·
Where the so-called ‘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."
dispositive
·
Rodriguez is given a period of 30 days from the finality of this
decision to negotiate a road right of way.
·
In the event no road right of way is secured by Rodriquez at the end of
said period, the parties shall reassess and discuss other options as stipulated
in par 1(b) of the Conditional Deed of Sale and, for this purpose, they are
given a period of 30 days to agree on a course of action.
·
Should the discussions of the parties prove futile after the said 30-day
period, immediately upon the expiration of said period for discussion,
Rodriguez may
o
(a) exercise his option to rescind the contract, subject to the return
of his DP, in accordance with the provisions of pars 1(b) and 5 of the
Conditional Deed of Sale or
o
(b) waive the road right of way and pay the balance of the deducted
purchase price as determined in the RTC Decision dated May 30, 1992.
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