EMMA P. NUIGUID vs. CLARITA S.

NICDAO
G.R. No. 150785. September 15, 2006

FACTS: Accused Clarita S. Nicdao is charged with having committed the crime of Violation of
BP 22 in fourteen (14) counts. Respondent was sentenced to pay P1,150,000, plus interest, and
to suffer imprisonment equivalent to one (1) year for each violation of BP 22, or a total of
fourteen (14) years of imprisonment.

On appeal, the decision was affirmed in toto by the Regional Trial Court of Dinalupihan, Bataan.
Respondent elevated the case to the Court of Appeals (CA). On October 30, 2001, the CA
reversed the decision of the lower courts and acquitted respondent (accused). Petitioner seeks
a review of the decision with respect to the alleged lack of civil liability of herein respondent.

ISSUE: Whether respondent remains civilly liable to herein petitioner.

HELD: NO.  The basic principle in civil liability ex delicto is that every person criminally
liable is also civilly liable, crime being one of the five sources of obligations under the
Civil Code. A person acquitted of a criminal charge, however, is not necessarily civilly free
because the quantum of proof required in criminal prosecution (proof beyond reasonable doubt)
is greater than that required for civil liability (mere preponderance of evidence). In order to be
completely free from civil liability, a person's acquittal must be based on the fact that he
did not commit the offense. If the acquittal is based merely on reasonable doubt, the accused
may still be held civilly liable since this does not mean he did not commit the act complained
of. It may only be that the facts proved did not constitute the offense charged.

Acquittal will not bar a civil action in the following cases: (1) where the acquittal is based on
reasonable doubt as only preponderance of evidence is required in civil cases; (2) where the
court declared the accused's liability is not criminal but only civil in nature and (3) where the civil
liability does not arise from or is not based upon the criminal act of which the accused was
acquitted.

In this petition, the Court finds no reason to ascribe any civil liability to respondent. As
found by the CA, respondent’s supposed civil liability had already been fully satisfied and
extinguished by payment. The statements of the appellate court leave no doubt that respondent,
who was acquitted from the charges against her, had already been completely relieved of civil
liability.

From the circumstances obtaining in the case, it would appear that [respondent] made a total
payment of P6,980,000.00, inclusive of the P1,200,000.00 Demand Draft, which is definitely
much more than P1,150,000.00, the amount she actually borrowed from [petitioner]. These facts
were never rebutted by [petitioner].

Disposition of the Case: Petition was denied.

 RIVERA vs. DEL ROSARIO

The filing of the complaint or appropriate initiatory pleading and the payment of the
prescribed docket fee vest a trial court with jurisdiction over the subject matter or nature
of the action. If the amount of docket fees paid is insufficient considering the amount of
the claim, the clerk of court of the lower court involved or his duly authorized deputy has
the responsibility of making a deficiency assessment. The party filing the case will be
required to pay the deficiency, but jurisdiction is not automatically lost.

* * * * * * * * 

Facts: 

Respondents filed a complaint for nullity of contract of sale and annulment of the transfer
certificates of title against petitioners. The RTC ruled in favor of respondents. The CA affirmed
with modification the RTC decision. Hence, petitioners filed a petition for review on certiorari
before the SC.

Petitioners contend, among others, that jurisdiction was not validly acquired because the filing
fees respondents paid was only P1,554.45 when the relief sought was reconveyance of land
that was worth P2,141,622.50 under the Kasunduan. They contend that respondents should
have paid filing fees amounting to P12,183.70. In support of their argument, petitioners invoke
the doctrine in Sun Insurance Office, Ltd., v. Asuncion and attach a certification from the Clerk
of Court of the RTC of Quezon City.

Respondents counter that it is beyond dispute that they paid the correct amount of docket fees
when they filed the complaint. If the assessment was inadequate, they could not be faulted
because the clerk of court made no notice of demand or reassessment, respondents argue.
Respondents also add that since petitioners failed to contest the alleged underpayment of
docket fees in the lower court, they cannot raise the same on appeal.

Issue:

Did the trial court acquire jurisdiction over the case, despite an alleged deficiency in the amount
of filing fees paid by respondents?

Held:

Yes. Jurisdiction was validly acquired over the complaint. In Sun Insurance Office, Ltd., v.
Asuncion, this Court ruled that the filing of the complaint or appropriate initiatory pleading and
the payment of the prescribed docket fee vest a trial court with jurisdiction over the subject
matter or nature of the action. If the amount of docket fees paid is insufficient considering the
amount of the claim, the clerk of court of the lower court involved or his duly authorized deputy
has the responsibility of making a deficiency assessment. The party filing the case will be
required to pay the deficiency, but jurisdiction is not automatically lost.

Here it is beyond dispute that respondents paid the full amount of docket fees as assessed by
the Clerk of Court of the Regional Trial Court of Malolos, Bulacan, Branch 17, where they filed
the complaint. If petitioners believed that the assessment was incorrect, they should have
questioned it before the trial court. Instead, petitioners belatedly question the alleged
underpayment of docket fees through this petition, attempting to support their position with the
opinion and certification of the Clerk of Court of another judicial region. Needless to state, such
certification has no bearing on the instant case. (Rivera vs. Del Rosario, G.R. No. 144934.
January 15, 2004)

TAGUBA vs. DE LEON

132 SCRA 722

FACTS:

Berlin Taguba married to Sebastiana Domingo (petitioner) is the owner of a residential

lot with an area of 3,129 square meters. Souses |Pedro Asuncion and Marita Lungab (also
petitioner) and private respondent Maria Peralta Vda de De Leon, were separately occupying
portions of the aforementioned lot as lessees.

Taguba sold a portion of the said lot consisting of 400 square meters to private
respondent Maria Peralta Vda de De Leon for P18,000. The portion sold comprises the area
occupied by the Asuncions and private respondent Vda de De Leon. The deed evidencing said
sale was denominated as “Deed of Conditional Sale,” which included the following term:

“c.) That failure to pay the VENDOR the whole balance on December 31, 1972, the
VENDEE shall be given an extension of Six (6) months with interest (legal rate) after which
VENDOR may INCREASE the purchase price to P50.00 per square meter which the VENDEE
agrees should she fail to pay within said period of time.”

Alleging that private respondent had already paid P12,500 and had tendered payment of
the balance of P5,500 to complete the stipulated purchase price of P18,000 to petitioner Taguba
within the grace period but the latter refused to receive payment; and that since negotiations for
settlement with the intervention of Governor Dy failed, private respondent instituted a complaint
for Specific Performance.
 In their answer, spouses Taguba admitted the sale of the property, but claimed that
private respondent failed to comply with her obligation under the Deed of Conditional Sale
despite the several extensions granted her, by reason of which petitioner was compelled, but
with the express knowledge and consent and even upon the proposal of private respondent, to
negotiate the sale of a portion of the property sold to the spouses Asuncion who were actually in
possession thereof.

ISSUE:

Did the seller validly rescind the Contract of Conditional Sale?

RULING:

No. The Court held that nowhere in the said contract in question is there a proviso or
stipulation to the effect that title to the property sold is reserved in the vendor until full payment
of the purchase price. There is also no stipulation giving the vendor (petitioner Taguba) the
right to unilaterally rescind the contract the moment the vendee (private respondent de Leon)
fails to pay within a fixed period.

Considering the nature of the transaction between petitioner and private respondent,
which is, affirm and sustain to be a contract of sale, absolute in nature the applicable provision
is Article 1592 of the New Civil Code, which states

“Art. 1592. In the sale of immovable property, even though it may have been stipulated
that upon failure to pay the price at the time agreed upon the rescission of the contract shall of
right take place, the vendee may pay, even after the expiration of the period, as long as no
demand for rescission of the contract has been made upon him either judicially or by notarial
act. After the demand the court may not grant him a new term.”
 In the case at bar, it is undisputed that petitioner Taguba never notified private
respondent by notarial act that he was rescinding the contract, and neither had he filed a suit in
court to rescind the sale.

Finally, it has been ruled that “where time is not of the essence of the agreement, a
slight delay on the part of one party in the performance of his obligation is not a sufficient
ground for the rescission of the agreement. Considering that in the instant case, private
respondent had already actually paid the sum of P12,500 of the total stipulated purchase price
of P18,000 and had tendered payment of the balance of P5,500 within the grace period of six
months, equity and justice mandate that she be given additional period within which to complete
payment of the purchase price.

GENEROSO V. VILLANUEVA v. STATE OF GERARDO L. GONZAGA

GR NO. 157318, 2006-08-09

Facts:

On January 15, 1990, petitioners Generoso Villanueva and Raul Villanueva, Jr., business
entrepreneurs engaged in the operation of transloading stations and sugar trading, and
respondent Estate of Gerardo L. Gonzaga, represented by its Judicial Administratrix,
respondent Ma.

Villa J. Gonzaga, executed a MOA... he SECOND PARTY agrees to purchase the aforesaid lots
at the price of ONE HUNDRED FIFTY (P150.00) PESOS per sq. meter or for a total price of
FOUR HUNDRED EIGHTY SIX THOUSAND (P486,000.00) PESOS subject to the following
conditions:

That the FIRST PARTY shall cause the release of the aforementioned lots from the Philippine
National Bank (PNB) at the earliest possible time.

That upon payment of 60% of the purchase price, the SECOND PARTY may start to introduce
improvements in the area if they so desire.

As stipulated in the agreement, petitioners introduced improvements after paying P291,600.00

constituting sixty (60%) percent of the total purchase price of the lots. Petitioners then requested
permission from respondent Administratrix to use the premises for the next milling... season.
Respondent refused on the ground that petitioners cannot use the premises until full payment of
the purchase price. Petitioners informed respondent that their immediate use of the premises
was absolutely necessary and that any delay will cause them substantial damages.

Respondent remained firm in her refusal, and demanded that petitioners stop using the lots as a
transloading station to service the Victorias Milling Company unless they pay the full purchase
price.
In a letter-reply dated April 5, 1991, petitioners assured respondent of their... readiness to pay
the balance but reminded respondent of her obligation to redeem the lots from mortgage with
the Philippine National Bank (PNB)

On April 10, 1991, respondent Administratrix wrote petitioners informing them that the PNB had
agreed to release the lots from mortgage. She demanded payment of the balance of the
purchase price.

n their letter-reply dated April 18, 1991,[7] petitioners demanded that respondent show the clean
titles to the lots first before they pay the balance of the purchase price. Respondent merely
reiterated the demand for payment

Issues:

Whether x x x respondents failed to comply with their reciprocal obligation of securing the
release of the subject lots from mortgage indebtedness with the Philippine National Bank.

Ruling:

A reading of Exhibit "3-B,"[13] which is the PNB's letter of approval dated April 8, 1991, clearly
shows that the approval was conditional. Three (3) conditions were laid down by the bank
before the lots could be finally released from mortgage. The three... conditions were: (1) that
respondents secure approval of the sale from the intestate court insofar as the interest of the
estate is concerned; (2) that respondents pay two annual amortizations of their restructured
accounts with the PNB plus P50,000.00 to be derived from the... sale of the lots sought to be
released; and (3) that respondents comply with such other terms and conditions as the PNB's
Legal Department may impose.

Cecilia S. Gayenalo, the Assistant Manager of PNB Bacolod City Branch, herself testified that it
was in July 1991 that the final... release papers were prepared by the bank because it was only
at that time that respondents complied with the three conditions.[14] It was therefore premature
for respondents to demand payment of the balance of the purchase price from the petitioners in

April 1991 and, failing in that, to "rescind" the MOA in May 1991.

Moreover, there is no legal basis for the rescission. The remedy of rescission under Art. 1191 of
the Civil Code[15] is predicated on a breach of faith by the other party that violates the
reciprocity between them.[16] We... have held in numerous cases that the remedy does not
apply to contracts to sell.

We explained the reason in Santos v. Court of Appeals,[18] viz -... x x x [I]n a contract to sell,
title remains with the vendor and does not pass on to the vendee until the purchase price is paid
in full. Thus, in a contract to sell, the payment of the purchase price is a positive suspensive
condition. Failure to pay the price... agreed upon is not a mere breach, casual or serious, but a
situation that prevents the obligation of the vendor to convey title from acquiring an obligatory
force. This is entirely different from the situation in a contract of sale, where non-payment of the
price is a... negative resolutory condition. The effects in law are not identical. In a contract of
sale, the vendor has lost ownership of the thing sold and cannot recover it, unless the contract
of sale is rescinded and set aside. In a contract to sell, however, the vendor remains the
owner... for as long as the vendee has not complied fully with the condition of paying the
purchase price. If the vendor should eject the vendee for failure to meet the condition precedent,
he is enforcing the contract and not rescinding it. x x x x Article 1592 speaks of... non-payment
of the purchase price as a resolutory condition. It does not apply to a contract to sell. As to
Article 1191, it is subordinated to the provisions of Article 1592 when applied to sales of
immovable property. Neither provision is applicable [to a contract to sell].

(emphasis added)

The MOA between petitioners and respondents is a conditional contract to sell

Ownership over the lots is not to pass to the petitioners until full payment of the purchase price.
Petitioners' obligation to pay, in turn, is conditioned upon the release of the lots from mortgage...
with the PNB to be secured by the respondents. Although there was no express provision
regarding reserved ownership until full payment of the purchase price, the intent of the parties in
this regard is evident from the provision that a deed of absolute sale shall be executed... only
when the lots have been released from mortgage and the balance paid by petitioners. Since
ownership has not been transferred, no further legal action need have been taken by the
respondents, except an action to recover possession in case petitioners refuse to voluntarily...
surrender the lots

The records show that the lots were finally released from mortgage in July 1991. Petitioners
have always expressed readiness to pay the balance of the purchase price once that is
achieved. Hence, petitioners should be allowed to pay the balance now, if they so desire, since
it... is established that respondents' demand for them to pay in April 1991 was premature.
However, petitioners may not demand production by the respondents of the titles to the lots as a
condition for their payment. It was not required under the MOA. The MOA merely states that...
petitioners shall pay the balance "upon approval by the PNB of the release of the lots" from
mortgage. Petitioners may not add further conditions now. Obligations arising from contracts
have the force of law between the contracting parties and should be complied... with in good
faith

Petitioners and respondents are restored to the status quo... ante before the execution of the
Deed of Rescission dated May 28, 1991which is declared of no legal effect.

Generoso Villanueva and Raul Villanueva, Jr. vs. Estate of Gerardo Gonzaga/Ma. Villa
Gonzaga, in her capacity as Administratrix G.R. No. 157318 August 9, 2006 Facts:  Petitioners
Generoso Villanueva and Raul Villanueva, Jr., business entrepreneurs engaged in the operation
of transloading stations and sugar trading, and respondent Estate of Gerardo L. Gonzaga,
represented by its Judicial Administratrix, respondent Ma. Villa J. Gonzaga, executed a MOA . 
As stipulated in the agreement, petitioners introduced improvements after paying P291,600.00
constituting sixty (60%) percent of the total purchase price of the lots. Petitioners then requested
permission from respondent Administratrix to use the premises for the next milling season.
Respondent refused on the ground that petitioners cannot use the premises until full payment of
the purchase price. Petitioners informed respondent that their immediate use of the premises
was absolutely necessary and that any delay will cause them substantial damages. Respondent
remained firm in her refusal, and demanded that petitioners stop using the lots as a transloading
station to service the Victorias Milling Company unless they pay the full purchase price. In a
letterreply dated April 5, 1991, petitioners assured respondent of their readiness to pay the
balance but reminded respondent of her obligation to redeem the lots from mortgage with the
Philippine National Bank (PNB). Petitioners gave respondent ten (10) days within which to do
so.  Respondent Administratrix wrote petitioners informing them that the PNB had agreed to
release the lots from mortgage. She demanded payment of the balance of the purchase price. 
In their letter-reply, petitioners demanded that respondent show the clean titles to the lots first
before they pay the balance of the purchase price. Respondent merely reiterated the demand
for payment. Petitioners stood pat on their demand.  Respondent Administratrix executed a
Deed of Rescission rescinding the MOA on two grounds: (1) petitioners failed to pay the
balance of the purchase price despite notice of the lots’ release from mortgage, and (2)
petitioners violated the MOA by using the lots as a transloading station without permission from
the respondents.  The trial court decided the case in favor of respondents.  Petitioners filed a
petition for review before the Court of Appeals. The Court of Appeals affirmed the trial court’s
decision but deleted the award for moral damages on the ground that petitioners were not guilty
of bad faith in refusing to pay the balance of the purchase price. Hence, this petition. Issue:
Whether or not there is legal, or even a factual, ground for the rescission of the Memorandum of
Agreement. Held: There is no legal basis for the rescission. The remedy of rescission under Art.
1191 of the Civil Code is predicated on a breach of faith by the other party that violates the
reciprocity between them. We have held in numerous cases that the remedy does not apply to
contracts to sell. The MOA between petitioners and respondents is a conditional contract to sell.
Ownership over the lots is not to pass to the petitioners until full payment of the purchase price.
Petitioners’ obligation to pay, in turn, is conditioned upon the release of the lots from mortgage
with the PNB to be secured by the respondents. Although there was no express provision
regarding reserved ownership until full payment of the purchase price, the intent of the parties in
this regard is evident from the provision that a deed of absolute sale shall be executed only
when the lots have been released from mortgage and the balance paid by petitioners. Since
ownership has not been transferred, no further legal action need have been taken by the
respondents, except an action to recover possession in case petitioners refuse to voluntarily
surrender the lots. The records show that the lots were finally released from mortgage in July
1991. Petitioners have always expressed readiness to pay the balance of the purchase price
once that is achieved. Hence, petitioners should be allowed to pay the balance now, if they so
desire, since it is established that respondents’ demand for them to pay in April 1991 was
premature. However, petitioners may not demand production by the respondents of the titles to
the lots as a condition for their payment. It was not required under the MOA. The MOA merely
states that petitioners shall pay the balance "upon approval by the PNB of the release of the
lots" from mortgage. Petitioners may not add further conditions now. Obligations arising from
contracts have the force of law between the contracting parties and should be complied with in
good faith.
SPS. WILLIAM AND JEANETTE YAO v. CARLOMAGNO B. MATELA

GR NO. 167767, 2006-08-29

Facts:
On March 30, 1997, the spouses Yao contracted the services of Matela, a licensed architect, to
manage and supervise the construction of a two-unit townhouse at a total cost of
P5,090,560.00... construction started in the first week of April 1997... completed in April 1998,
with additional works costing P300,000.00... paid him the amount of P4,649,078.00... balance of
P741,482.00... unheeded, Matela filed a complaint

Regional Trial Court of Las Piñas City... spouses Yao denied that the project was completed in
April 1998

Matela abandoned the project without notice... sub-standard materials causing damage...
judgment in favor of Matela... professional services of the plaintiff on March 30, 1997... two unit
townhouses in Makati City... construction cost of P5,090,560.00

As agreed by the parties, Matela will construct the townhouses in accordance with the
Specification[15] while spouses Yao will pay Matela the agreed construction cost based on
progress billings. The spouses Yao will not pay Matela the agreed price in full... unless the latter
has fully complied with and has discharged his obligations as specified in the contract.

unfinished electrical conduits, electrical outlets with loose wirings and outlets with exposed
wires... decaying and unfinished cabinet floors... stairways and bathroom... floors with missing
tiles... uninstalled bathroom fixtures and exposed plumbing fixtures

Issues:

Building Official of Makati City... construction was completed on April 5, 1998... presumed to
have been executed in due course and good faith... defendants-appellants claimed that plaintiff-
appellee failed to finish the project within the agreed one hundred eighty (180) days... one
hundred eighty (180) days from April 1997 ended on October 1997... turned over only in April
1998

WHETHER OR NOT [MATELA] IS ENTITLED TO THE ADDITIONAL CONSTRUCTION COST.

WHETHER OR NOT THE DECISION OF THE COURT OF APPEALS IN NOT DISMISSING

THE COMPLAINT [OF MATELA] AND NOT AWARDING THE COUNTER CLAIM [OF THE
SPOUSES YAO] IS IN ACCORDANCE WITH LAW AND JURISPRUDENCE.

sum of money filed by Matela should be dismissed because it was the latter who breached his
undertaking by using sub-standard materials and not completing the project

P4,699,610.93 should be considered as sufficient payment... agreed construction cost of the

project was P5,090,560.00

In the Building Permit, the total cost was pegged at P2,191,700.00

Certificate of Completion, the actual cost of construction was P2,347,706.81

Certificate of Occupancy the cost of the project as built was declared at P2,341,706.00...
spouses Yao likewise failed to comply... both parties in this case breached their respective
obligations
Ruling:

April 1, 2002... in favor of [Matela]

P741,428.00 plus legal rate of interest

P50,000.00... modified the amount of actual damages to P391,582.00

Reciprocal obligations

Matela failed to comply with his obligation to construct the townhouses based... on the agreed
specifications... cannot be discharged from his obligations by mere delivery

Art. 1192. In case both parties have committed a breach of the obligation, the liability of the first
infractor shall be equitably tempered by the courts. If it cannot be determined which of the
parties first violated the contract, the same shall be deemed... extinguished, and each shall bear
his own damages.

bear is the... cost of repairing the defects in the project... sufficient payment... each of the
parties shall bear their own losses

McLaughlin v. Court of Appeals

G.R. No. L-57552, 10 October 1986

FACTS:

Petitioner and private respondent, Flores, entered into a contract of conditional sale of real
property. When the private responded failed to pay the balance on the date stipulated, he filed a
petition to rescind the contract. They entered into a Compromise Agreement. Thereafter, the
petitioner made a demand. In response, the Flores sent a letter to the former signifying his
willingness and intention to pay the balance. Flores alleged that he tendered payment to
petitioner but the petitioner refused to accept it. Petitioner filed a motion for writ of execution, to
rescind and liquidate damages, alleging that Flores had failed to pay the installment due, as
stipulated in their compromise agreement. Flores filed a motion for reconsideration and
tendered a certified manager’s check covering the entire obligation, within seventeen days after
it was due. The trial court dismissed the motion for reconsideration. The CA nullified and set
aside the decision of the trial court. It contended that rescission will not be permitted in cases of
a slight or casual breach. The delay in payment of Flores is merely a slight breach.

ISSUE:

WON the tender of payment restored the defendant’s right as vendee.

RULING:

Yes. The tender made by private respondent of a certified bank manager’s check payable to
petitioner was a valid tender of payment. The certified check covered not only the balance of the
purchase price in the amount of P69,059.71, but also the arrears in the rental payments from
June to December 1980 in the amount of P7,000.00, or a total of P76,059.71. But he is not
released from the responsibility to pay the vendor. The vendee must first consign the amount to
the court. According to Article 1256 of the Civil Code of the Philippines, if the creditor to whom
tender of payment has been made refuses without just cause to accept it, the debtor shall be
released from responsibility by the consignation of the thing or sum due, and that consignation
alone shall produce the same effect in the five cases enumerated therein; Article 1257 provides
that in order that the consignation of the thing (or sum) due may release the obligor, it must first
be announced to the persons interested in the fulfillment of the obligation; and Article 1258
provides that consignation shall be made by depositing the thing (or sum) due at the disposal of
the judicial authority and that the interested parties shall also be notified thereof.

BRICKTOWN DEVELOPMENT CORP. vs. AMOR TIERRA DEVELOPMENT CORP.

G.R. No. 112182 December 12, 1994

Facts:

 On 31 March 1981, Bricktown Development Corporation (herein petitioner corporation),

represented by its President and co-petitioner Mariano Z. Velarde, executed two

Contracts to Sell in favor of Amor Tierra Development Corporation (herein private

respondent), represented in these acts by its Vice-President, Moises G. Petilla, covering

a total of 96 residential lots.

 Private respondent was only able to pay petitioner corporation the sum of P1,334,443.2.

In the meanwhile, however, the parties continued to negotiate for a possible

modification of their agreement, although nothing conclusive would appear to have

ultimately been arrived at.

 Petitioner corporation, through its legal counsel, sent private respondent a "Notice of

Cancellation of Contract" on account of the latter's continued failure to pay the

installment due 30 June 1981 and the interest on the unpaid balance of the stipulated

initial payment. Petitioner corporation advised private respondent, however, that it

(private respondent) still had the right to pay its arrearages within 30 days from receipt

of the notice "otherwise the actual cancellation of the contract (would) take place."
 Several months later, or on 26 September 1983, private respondent, through counsel,

demanded (Exh. "E") the refund of private respondent's various payments to petitioner

corporation, allegedly "amounting to P2,455,497.71," with interest within fifteen days

from receipt of said letter, or, in lieu of a cash payment, to assign to private respondent

an equivalent number of unencumbered lots at the same price fixed in the contracts.

Issue: Whether or not the contract is validly rescinded.

Held:

Admittedly, the terms of payment agreed upon by the parties were not met by private

respondent. Of a total selling price of P21,639,875.00, private respondent was only able to

remit the sum of P1,334,443.21 which was even short of the stipulated initial payment of

P2,200,000.00. No additional payments, it would seem, were made. A notice of cancellation

was ultimately made months after the lapse of the contracted grace period. Paragraph 15 of

the Contracts to Sell provided thusly:

15. Should the PURCHASER fail to pay when due any of the installments

mentioned in stipulation No. 1 above, the OWNER shall grant the purchaser a

sixty (60)-day grace period within which to pay the amount/s due, and should the

PURCHASER still fail to pay the due amount/s within the 60-day grace period, the

PURCHASER shall have the right to ex-parte cancel or rescind this contract,

provided, however, that the actual cancellation or rescission shall take effect only

after the lapse of thirty (30) days from the date of receipt by the PURCHASER of

the notice of cancellation of this contract or the demand for its rescission by a

notarial act, and thereafter, the OWNER shall have the right to resell the lot/s

subject hereof to another buyer and all payments made, together with all

improvements introduced on the aforementioned lot/s shall be forfeited in favor

of the OWNER as liquidated damages, and in this connection, the PURCHASER

obligates itself to peacefully vacate the aforesaid lot/s without necessity of notice

or demand by the OWNER. 3

A grace period is a right, not an obligation, of the debtor. When unconditionally conferred, such

as in this case, the grace period is effective without further need of demand either calling for
the payment of the obligation or for honoring the right. The grace period must not be likened

to an obligation, the non-payment of which, under Article 1169 of the Civil Code, would

generally still require judicial or extrajudicial demand before "default" can be said to arise. 4

Verily, in the case at bench, the sixty-day grace period under the terms of the contracts to sell

became ipso facto operative from the moment the due payments were not met at their stated

maturities. On this score, the provisions of Article 1169 of the Civil Code would find no

relevance whatsoever.

The cancellation of the contracts to sell by petitioner corporation accords with the contractual

covenants of the parties, and such cancellation must be respected. It may be noteworthy to add

that in a contract to sell, the

non-payment of the purchase price (which is normally the condition for the final sale) can

prevent the obligation to convey title from acquiring any obligatory force (Roque vs. Lapuz, 96

SCRA 741; Agustin vs. Court of Appeals, 186 SCRA 375).

The forfeiture of the payments thus far remitted under the cancelled contracts in question,

given the factual findings of both the trial court and the appellate court, must be viewed

differently. While clearly insufficient to justify a foreclosure of the right of petitioner

corporation to rescind or cancel its contracts with private respondent, the series of events and

circumstances described by said courts to have prevailed in the interim between the parties,

however, warrant some favorable consideration by this Court.