ADELFA PROPERTIES, INC vs.

CA et al
G.R. No. 111238
January 25, 1995

FACTS:
Private respondents and their brothers Jose and Dominador were the
registered CO OWNERS of a parcel of land in Las Pinas, covered by a TCT.
Jose and Dominador sold their share (eastern portion of the land) to Adelfa.
Thereafter, Adelfa expressed interest in buying the western portion of the
property from private respondents herein. Accordingly, an exclusive
Option to Purchase was executed between Adelfa and Private
respondents and an option money of 50,000 was given to the latter. A new
owners copy of the certificate of title was issued (as the copy with
respondent Salud was lost) was issued but was kept by Adelfas counsel,
Atty. Bernardo.
Before Adelfa could make payments, it received summons as a case was
filed (RTC Makati) against Jose and Dominador and Adelfa, because of a
complaint in a civil case by the nephews and nieces of private respondents
herein. As a consequence, Adelfa, through a letter, informed the private
respondents that it would hold payment of the full purchase price and
suggested that they settle the case with their said nephews and nieces.
Salud did not heed the suggestion; respondents informed Atty. Bernardo
that they are canceling the transaction. Atty Bernardo made offers but
they were all rejected.

RTC Makati dismissed the civil case. A few days after, private respondents
executed a Deed of Conditional Sale in favor of Chua, over the same parcel
of land.
Atty Bernardo wrote private respondents informing them that in view of
the dismissal of the case, Adelfa is willing to pay the purchase price, and
requested that the corresponding deed of Absolute Sale be executed. This
was ignored by private respondents.
Private respondents sent a letter to Adelfa enclosing therein a check
representing the refund of half the option money paid under the exclusive
option to purchase, and requested Adelfa to return the owners duplicate
copy of Salud. Adelfa failed to surrender the certificate of title, hence the
private respondents filed a civil case before the RTC Pasay, for annulment
of contract with damages. The trial court directed the cancellation of the
exclusive option to purchase. On appeal, respondent CA affirmed in toto
the decision of the RTC hence this petition.
ISSUE:
WON the agreement between Adelfa and Private respondents was strictly
an option contract
WON there was a tender of payment duly done by the petitioner

HELD:
The judgement of the CA is AFFIRMED

1. NO. The agreement between the parties is a contract to sell, and

not an option contract or a contract of sale.
2. It was further agreed by the Court upon examining the evidences
that the contract was not an option but a contract to sell since
there was already a meeting of minds between the two parties.
3. With these being said, petitioner now is bound to pay the purchase
price stipulated. However, the contention of the petitioner that the
ongoing civil case barred them to pay the amount stipulated. This
cannot be given merit by the Court. In the case at bar, records
show that when petitioner caused its exclusive option to be
annotated anew on the certificate of title, it already knew of the
dismissal of civil Case No. 89-5541 but it was only on April 16, 1990
that petitioner, through its counsel, wrote private respondents
expressing its willingness to pay the balance of the purchase price
upon the execution of the corresponding deed of absolute sale. At
most, that was merely a notice to pay. There was no proper tender
of payment nor consignation in this case as required by law The
mere sending of a letter by the vendee expressing the intention
to pay, without the accompanying payment, is not considered a
valid tender of payment. 43 Besides, a mere tender of payment is
not sufficient to compel private respondents to deliver the property
and execute the deed of absolute sale. It is consignation which is
essential in order to extinguish petitioner's obligation to pay the
balance of the purchase price
4. By reason of petitioner's failure to comply with its obligation,
private respondents elected to resort to and did announce the
rescission of the contract through its letter to petitioner dated July
27, 1990
Hence, relief was awarded in favour to the private respondent.

DOLORES LIGAYA DE MESA, petitioner, vs. THE COURT OF

APPEALS, OSSA HOUSE, INC. AND DEVELOPMENT BANK OF THE
PHILIPPINES,respondents.

Facts:

Petitioner Dolores Ligaya de Mesa owns several parcels of land

which were mortgaged to the Development Bank of the Philippines
(DBP) as security for a loan she obtained from the bank. Failing to
pay her mortgage debt, all her mortgaged properties were
foreclosed and sold at public auction held on different days.
Petitioner de Mesa requested DBP that she be allowed to
repurchase her foreclosed properties
Mrs. de Mesa, under a Deed of Sale with Assumption of Mortgage,
[4] sold the foreclosed properties to private respondent OSSA under
the condition that the latter was to assume the payment of the
mortgage debt by the repurchase of all the properties mortgaged
on installment basis, with an initial payment of P90,000.00
representing 20% of the total obligation.
Private respondent OSSA remitted to DBP the initial payment
of P90,000.00, in addition to the amount of P10,000.00 previously
paid to the petitioner.
DBP granted petitioners request to repurchase the foreclosed
properties such that in March 1979 a Deed of Conditional Sale was
executed under which DBP agreed to sell the said properties to the
petitioner for the sum of P363,408.20, P90,000.00 of which was to

Issue:

be paid as initial payment and the balance in seven (7) years on a

quarterly amortization plan, with a first quarterly installment
of P15,475.17
Private respondent OSSA paid DBP the first to eight quarterly
installments which installment payments were applied to
petitioners obligation with DBP pursuant to the Deed of Conditional
Sale.
petitioner de Mesa notified private respondent OSSA that she was
rescinding the Deed of Sale with Assumption of Mortgage she
executed in favor of the latter on the ground that OSSA failed to
comply with the terms and conditions of their agreement,
particularly the payment of installments to the Development Bank
of the Philippines.
OSSA offered to pay the amount of P34,363.08, which is the
difference between the purchase price of P500,000.00 and the
mortgage obligation to DBP of P455,636.92, after deducting the
downpayment of P10,000.00 stipulated in said Deed of Sale with
Assumption of Mortgage, but the petitioner refused to accept such
payment. Hence, deposited the amount of P34,363.08 with said
court.
DBP refused to accept the 9th quarterly installment paid by OSSA,
prompting the latter to file against DBP and the petitioner for
specific performance and consignation depositing in said case the
amount of P15,824.92.
The lower court allowed OSSA to deposit with the Court a quo by
way of consignation, all future quarterly installments without need
of formal tenders of payment and service of notices of
consignation.

WON the consignation of the future quarterly instalments is valid given

that there were no tender of payments made.
Held:

Petitioners contention cannot be given merit that here was no

notice to her regarding OSSAs consignation of the amounts
corresponding
to
the
12th up
to
the
20th quarterly
installments. The records, however, show that several tenders of
payment were consistently turned down by the petitioner, so much
so that the respondent OSSA found it pointless to keep on making
formal tenders of payment and serving notices of consignation to
petitioner.
OSSA prayed before the lower court that it be allowed to deposit by
way of consignation all the quarterly installments, without making
formal tenders of payment and serving notice of consignation,
which prayer was granted by the trial court.
The motion and the subsequent court order served on the
petitioner in the consignation proceedings sufficiently served as
notice to petitioner of OSSAs willingness to pay the quarterly
installments and the consignation of such payments with the
court. For reasons of equity, the procedural requirements of
consignation are deemed substantially complied with in the present
case[13]

Yu Tek & Co. v. Gonzales

Facts:

A contract was executed between the herein parties, whereby Mr. Basilio
Gonzales acknowledges the receipt of P3,000 from Yu Tek & Co., and that
in consideration of which he obligates himself to deliver to the latter 600
piculs of sugar of the first and second grade, according to the result of
polarization, within 3 months. There is a stipulation providing for rescission
with P1,200 penalty in case of failure to deliver. No sugar was delivered, so
plaintiff filed a case praying for the judgment of P3,000 plus P1,200.
P3,000 was awarded, thus, both parties appealed.
Issues:
(1) Whether compliance of the obligation to deliver depends upon the
production in defendants plantation
(2) Whether there is a perfected sale
(3) Whether liquidated damages of P1,200 should be awarded to the
plaintiff
Held:
(1) There is not the slightest intimation in the contract that the sugar was
to be raised by the defendant. Parties are presumed to have reduced to
writing all the essential conditions of their contract. While parol evidence is
admissible in a variety of ways to explain the meaning of written
contracts, it cannot serve the purpose of incorporating into the contract
additional contemporaneous conditions which are not mentioned at all in
the writing, unless there has been fraud or mistake. It may be true that
defendant owned a plantation and expected to raise the sugar himself, but
he did not limit his obligation to his own crop of sugar. Our conclusion is
that the condition which the defendant seeks to add to the contract by

parol evidence cannot be considered. The rights of the parties must be

determined by the writing itself.
(2) We conclude that the contract in the case at bar was merely an
executory agreement; a promise of sale and not a sale. At there was no
perfected sale, it is clear that articles 1452, 1096, and 1182 are not
applicable. The defendant having defaulted in his engagement, the
plaintiff is entitled to recover the P3,000 which it advanced to the
defendant, and this portion of the judgment appealed from must therefore
be affirmed.
(3) The contract plainly states that if the defendant fails to deliver the 600
piculs of sugar within the time agreed on, the contract will be rescinded
and he will be obliged to return the P3,000 and pay the sum of P1,200 by
way of indemnity for loss and damages. There cannot be the slightest
doubt about the meaning of this language or the intention of the parties.
There is no room for either interpretation or construction. Under the
provisions of article 1255 of the Civil Code contracting parties are free to
execute the contracts that they may consider suitable, provided they are
not in contravention of law, morals, or public order. In our opinion there is
nothing in the contract under consideration which is opposed to any of
these principles.

Labayen vs. Talisay-Silay Milling Co.

Facts:

The plaintiff, along with another, possesses the hacienda known as

Dos Hermanos of Talisay, Occidental Negros. The defendant is a
corporation dedicated to the milling of sugar cane.
The plaintiff and the defendant entered into a contract that there
should be a railroad to be built for the use of the plantation or
plantations in the transportation of sugar cane, sugar, fertilizer, and
all such articles.
It is admitted that the central has not continued its railroad through
to the Hacienda Dos Hermanos.
The civil engr. Testified that t it was possible to construct a railroad
to the Hacienda Dos Hermanos but that to do would be very
dangerous.

FELIX
VELASCO,
defendantappellee.

Issue:

Held:

The Court said that a showing of mere inconvenience, unexpected

impediments, or increased expenses is not enough. So one must
answer in damages where the impossibility is only so in fact.
In the case at bar, there was indeed an impossibility to build the
railway on another fact that the railroad would have to pass
through another hacienda which was not granted permission to use
his land for the purpose.

plaintiff-appellant,

vs.

MARTIN

MASA,

Facts:

WON there was an impossibility to perform hence breach of the contract

As provided by the Civil Code in art. 1267, that where service has
become difficult to perform or render, obligor may also be released
in whole or in part.

Felix Velasco filed a complaint against Martin Masa alleging that

defendant received from him as a loan, the said amount, payable
on the same day in July the following year.
The debt, was set forth in a private document signed by the debtor,
but that the defendant, Masa, managed to obtain possession of the
document of indebtedness while the plaintiff was detained as a
prisoner in the jail at the capital of Antique.
The defendant in his answer denied all the main points of the
complaint, the subject of the same, had been voluntarily handed
over to him through Luis Ocsea; that said document did not call
for 2,804 pesos but for 1,000 pesos, with interest of 20 per cent per
annum.
The conclusion stated by the judge in the judgment appealed from,
that the return of the document made by the wife of the plaintiff to
the defendant debtor, through Luis Ocsea, was voluntary, and that
she did it by orders from the plaintiff creditor.

Issue:
WON the debt was legally renounced.

Held:

It is an unquestionable fact, duly proven at the trial, that the

instrument proving the debt now claimed passed to the possession
of the debtor and for this reason, unless the contrary be proven, it
must be presumed, in accordance with the provisions of law, that
the delivery of the instrument was voluntarily made, and that this
fact implies a renunciation of the action which the creditor had for
the recovery of his credit.
Hence, it appears from the whole of the foregoing that the debt
now claimed was remitted for reasons of gratitude.

The defendant denied the allegations of the complaint, and

furthermore alleged that the obligation which the plaintiff
endeavored to compel him to fulfil was already extinguished.
Defendant was able to present receipt signed by plaintiff
concluding that since such private document was in his possession,
obligation should then be extinguished as it is evidence that he had
paid his debt.

Issue:
WON defendant has really paid the plaintiff as he claims done and by
providing the receipt.
Held:

LEONIDES LOPEZ LISO, plaintiff-appellee, vs. MANUEL

TAMBUNTING, defendant-appellant

Facts:

These proceedings were brought to recover from the defendant the

sum of P2,000, amount of the fees, which, according to the
complaint, are owing for professional medical services rendered by
the plaintiff to a daughter of the defendant.

As a general rule, the voluntary surrender by a creditor to his

debtor, of a private instrument proving a credit, implies the
renunciation of the right of action against the debtor unless
contrary is proven.
In the case at bar, evidence showed that the receipt given by
plaintiff to defendant was for the purpose of collecting his fee and
was not in his intention that the document should remain in the
possession of the defendant if the latter did not forthwith pay the
amount specified therein.