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Civil Law; Sales; Under Article 1475 of the Civil Code, there is
a perfected contract of sale if there is a meeting of the minds on the
subject and the price.The agreement, as quoted above, shows a
perfected contract of sale. Under Art. 1475 of the Civil Code, there is
a perfected contract of sale if there is a meeting of the minds on the
subject and the price. A sale is a consensual contract requiring only
the consent of the parties on these two points. In this case, the
parties agreed on the subject, the 1,013.6 square meter lot and on
the purchase price of P4,000,000.00. No particular form is required
for the validity of their contract and, therefore, upon its perfection,
the parties can reciprocally demand performance of their respective
obligations.
Same; Same; The earnest money given is proof of the perfection
of the contract.Indeed, the earnest money given is proof of the
perfection of the contract. As Art. 1482 of the Civil Code states,
Whenever earnest money is given in a contract of sale, it shall be
considered as part of the price and as proof of the perfection of the
contract. This perfected contract imposed reciprocal obligations on
the parties. Petitioners obligation was to pay the balance of the
price, while private respondents obligation was to deliver the pro-
perty to petitioners upon payment of the price.
Same; Same; Private respondent fails to distinguish between a
condition imposed on the perfection of the contract and a condition
imposed on the performance of an obligation.Private respondent
Luna contends that as the condition of ejecting the squatters was
not met, she no longer has an obligation to proceed with the sale of
her lot. This contention is erroneous. Private respondent fails to
distinguish between a condition imposed on the perfection of the
contract and a condition imposed on the performance of an
obligation. Failure to comply with the first condition results in the
failure of a contract, while failure to comply with the second
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condition only
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570
gives the other party the option either to refuse to proceed with the
sale or to waive the condition.
Same; Same; Damages; Moral damages may be awarded in case
of a breach of contract where the defendant acted fraudulently or in
bad faith.The award of moral damages is in accordance with Art.
2220 of the Civil Code which provides that moral damages may be
awarded in case of a breach of contract where the defendant acted
fraudulently or in bad faith. However, the amount awarded is in
our opinion excessive. To be sure the amount to be awarded
depends upon the discretion of the court based on the circumstances
of each case but, having regard for the purpose for awarding such
damages, we think that fixing the amount equivalent to the
increase given to private respondent would be contrary to the rule
that moral dam ages are not intended to enrich the complainant at
the expense of the defendant or to penalize the defendant. Under
the circumstance an award of P100,000.00 would be fair and
reasonable.
Same; Same; Same; Attorneys fees may be recovered when the
civil action or proceeding against the plaintiff is clearly unfounded
and where defendant acted in gross and evident bad faith in
refusing to satisfy the plaintiffs claims.This Court also agrees
with the award of attorneys fees by the trial court. As found by the
trial court, there was clear absence of merit in private respondents
position thus unnecessarily forcing petitioners to litigate. Under Art.
2208(4)(5) of the Civil Code, attorneys fees may be recovered when
the civil action or proceeding against the plaintiff is clearly
unfounded and where defendant acted in gross and evident bad
faith in refusing to satisfy the plaintiffs claim.
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571
MENDOZA,J.:
Private respondent Liberty Luna is the owner of a piece
of land located at the corner of G. Araneta Avenue and
Quezon Avenue in Quezon City. The land, consisting of
1,013.6 square meters, is covered by TCT No. 193230 of
Registry of Deeds of Quezon City. On September 2, 1988
private respondent sold the land to petitioners Vicente and
Michael Lim for P3,547,600.00. As prepared by petitioners
broker, Atty. Rustico Zapata of the Zapata Realty Company,
the receipt embodying the agreement1 read as follows:
RECEIPT
RECEIVED from ZAPATA REALTY CO., INC., through Mr.
Edmundo Kaimo of 101 Kaimo Building, Metrobank Cashiers
Check No. 020583, Dasmarias branch, in the sum of TWO
HUNDRED THOUSAND (P200,000.00) PESOS, as earnest money
for the purchase of a parcel of land at the corner of G. Araneta
Avenue and Quezon Avenue, Quezon City, with an area of 1,013.6
sq. m. covered by TCT 193230, Registry of Deeds for Quezon City,
at the price of P3,547.600.00, subject to the following conditions:
1.This sum of P200,000.00 shall form part of the
purchase price;
2.The balance of P3,347,600.00 shall be paid in full after
the squatters/occupants have totally vacated the premises;
3. The seller assumes full responsibility to eject the
squatters/occupants within a period of sixty (60) days from
the date of receipt of the earnest money; and in case the seller
shall fail in her commitment to eject the squatters/occupants
within said period, the seller shall refund to the buyer this
sum of P200,000.00 [plus another sum of ONE HUNDRED
THOUSAND (P100,000.00) PESOS as liquidated damages];
however, if the buyer shall fail to pay the balance after the
seller has ejected the squatters/occupants, this sum of
P200,000.00 shall be forfeited by the seller;
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1 Records, p. 5, Par. 5 was written on the left margin, while par. 6 was
written on the right margin of the document and initialed by private
respondent.
572
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573
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574
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5 Id., p. 26.
6 TSN, pp. 7-8, Aug. 2, 1990.
7 TSN, pp. 19-20, Aug. 20, 1992.
8 Presided over by Judge Efren N. Ambrosio.
575
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577
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Where the ownership in the things has not passed, the buyer
may treat the fulfillment by the seller of his obligation to deliver the
same as described and as warranted expressly or by implication in
the contract of sale as a condition of the obligation of the buyer to
perform his promise to accept and pay for the thing. (Emphasis
added)
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579
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13 Id. at 234.
14 Id. at 235.
580
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581
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17 Korean Airlines Co., Ltd. v. Court of Appeals, 234 SCRA 717, 724
(1994).
18 SIMEX International (Manila), Inc. v. Court of Appeals, 183 SCRA
360, 365 (1990).
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