Ventura vs. Heirs of Sps. Endaya,
G.R. No. 190016, October
2, 2013
Perlas-Bernabe, J. Second Division
Case Digest
Facts:
On
June 29, 1981, Dolores Ventura (Dolores) entered into a Contract to Sell with
spouses Eustacio and Trinidad Endaya for the purchase of two parcels of land,
situated in Marian Road II, Marian Park (now Barangay San Martin de Porres),
Parañaque City, Metro Manila.
The
contract to sell provides that the purchase price of ₱347,760.00shall be paid
by Dolores in the following manner: (a) down payment of ₱103,284.00 upon
execution of the contract; and (b) the balance of ₱244,476.00 within a 15-year
period (payment period), plus 12% interest per annum (p.a.) on the outstanding
balance and 12% interest p.a. on arrearages. It further provides that all
payments made shall be applied in the following order: first, to the
reimbursement of real estate taxes and other charges; second, to the interest
accrued to the date of payment; third, to the amortization of the principal
obligation; and fourth, to the payment of any other accessory obligation
subsequently incurred by the owner in favor of the buyer. It likewise imposed
upon Dolores the obligation to pay the real property taxes over the subject
properties, or to reimburse Sps. Endaya for any tax payments made by them, plus
1% interest per month. Upon full payment of the stipulated consideration, Sps.
Endaya undertook to execute a final deed of sale and transfer ownership over
the same in favor of Dolores.
Meanwhile,
Dolores was placed in possession of the subject properties and allowed to erect
a building thereon. However, on April 10, 1992, before the payment period
expired, Dolores passed away.
On
November 28, 1996, Dolores’ children, Frederick Ventura, Marites Ventura-Roxas,
and Philip Ventura (petitioners), filed before the RTC a Complaint and,
thereafter, an Amended Complaint for specific performance, seeking to compel
Sps. Endaya to execute a deed of sale over the subject properties. In this
regard, they averred that due to the close friendship between their parents and
Sps. Endaya, the latter did not require the then widowed Dolores to pay the
down payment stated in the contract to sell and, instead, allowed her to pay
amounts as her means would permit. The payments were made in cash as well as in kind, and the same were
recorded by respondent Trinidad herself in a passbook given to Dolores to
evidence the receipt of said payments. As of June 15, 1996, the total
payments made by Dolores and petitioners amounted to ₱952,152.00, which is more
than the agreed purchase price of ₱347,760.00, including the 12% interest p.a.
thereon computed on the outstanding balance.
However,
when petitioners demanded the execution of the corresponding deed of sale, Sps.
Endaya refused. For their part, Sps. Endaya filed their Answer,19 admitting the
execution and genuineness of the contract to sell and the passbook. However,
they countered that Dolores did not pay the stipulated down payment and
remitted only a total of 22 installments. After her death in1992, petitioners
no longer remitted any installment. Sps. Endaya also averred that prior to
Dolores' death, the parties agreed to a restructuring of the contract to sell
whereby Dolores agreed to give a "bonus" of ₱265,673.93 and to pay interest
at the increased rate of 24% p.a. on the outstanding balance. They further
claimed that in April 1996, when the balance of the purchase price stood at
₱1,699,671.69, a final restructuring of the contract to sell was agreed with
petitioners, fixing the obligation at ₱3,000,000.00. Thereafter, the latter
paid a total of ₱380,000.00 on two separate occasions, leaving a balance of
₱2,620,000.00. In any event, Sps. Endaya pointed out that the automatic
cancellation clause under the foregoing contract rendered the same cancelled as
early as 1981 with Dolores’ failure to make a down payment and to faithfully
pay the installments; hence, petitioners’ complaint for specific performance
must fail. In addition, Sps. Endaya interposed a counterclaim for the alleged
unpaid balance of ₱2,620,000.00, plus damages, attorney's fees and costs of
suit.
In
their Reply with Answer to Counterclaim, petitioners denied the existence of
any restructuring of the contract to sell, invoking the Dead Man's Statute and
the Statute of Frauds. In turn, Sps. Endaya filed a Rejoinder, challenging the
inapplicability of the foregoing principles since the case was not filed
against an estate or an administrator of an estate, and in view of the partial
performance of the contract to sell.
RTC
found that petitioners were able to prove by a preponderance of evidence the
fact of full payment of the purchase price for the subject properties. CA
reversed and set aside the RTC ruling. It found that petitioners were not able
to show that they fully complied with their obligations under the contract to
sell. It observed that aside from the payment of the purchase price and 12%
interest p.a. on the outstanding balance, the contract to sell imposed upon
petitioners the obligations to pay 12% interest p.a. on the arrears and to
reimburse Sps. Endaya the amount of the pertinent real estate taxes due on the subject
properties, which the former, however, totally disregarded as shown in their
summary of payments.
Issue:
Whether
or not respondents should execute a deed of sale over the subject properties in
favor of petitioners.
Held:
No; a
thorough review of the records reveals no sufficient reason to warrant the
reversal of the CA’s August 18, 2006 Decision dismissing petitioners' complaint
for specific performance which sought to enforce the contract to sell and to
compel respondents to execute a deed of sale over the subject properties.
A contract to sell is defined as
a bilateral contract whereby the prospective seller, while expressly reserving
the ownership of the subject property despite delivery thereof to the
prospective buyer, binds himself to sell the said property exclusively to the
latter upon his fulfillment of the conditions agreed upon, i.e., the full
payment of the purchase price and/or compliance with the other obligations
stated in the contract to sell. Given its contingent nature, the failure
of the prospective buyer to make full payment and/or abide by his commitments
stated in the contract to sell prevents the obligation of the prospective
seller to execute the corresponding deed of sale to effect the transfer of
ownership to the buyer from arising.
To
note, while the quality of contingency inheres in a contract to sell, the same
should not be confused with a conditional contract of sale. In a contract to sell, the
fulfillment of the suspensive condition will not automatically transfer ownership to the
buyer although the property may have been previously delivered to him. The
prospective seller still has to
convey title to the prospective buyer by entering into a contract of absolute
sale. On the other hand, in a conditional contract of sale, the fulfillment of the suspensive
condition renders the sale absolute
and the previous delivery of the property has the effect of automatically
transferring the seller’s ownership or title to the property to the buyer.
Keeping
with these principles, the Court finds that respondents had no obligation to
petitioners to execute a deed of sale over the subject properties. As aptly
pointed out by the CA, aside from the payment of the purchase price and 12%
interest p.a. on the outstanding balance, the contract to sell likewise imposed
upon petitioners the obligation to pay the real property taxes over the subject
properties as well as 12% interest p.a. on the arrears. However, the summary of payments as well as the
statement of account submitted by petitioners clearly show that only the
payments corresponding to the principal obligation and the 12% interest p.a. on
the outstanding balance were considered in arriving at the amount of
₱952,152.00. The Court has examined the petition as well as petitioners'
memorandum and found no justifiable reason for the said omission. Hence,
the reasonable conclusion would therefore be that petitioners indeed failed to
comply with all their obligations under the contract to sell and, as such, have
no right to enforce the same.