G.R. No. 179594, September 11, 2013
MANUEL UY & SONS, INC., Petitioner, v. VALBUECO, INCORPORATED, Respondent.
D E C I S I O N
That for and in consideration of the sum of ONE HUNDRED SIXTY-FOUR THOUSAND SEVEN HUNDRED FORTY-NINE (Php164,749.00) PESOS, Philippine currency, the VENDOR hereby agrees to SELL, CEDE, TRANSFER and CONVEY unto the VENDEE x x x the aforementioned properties, payable under the following terms and conditions:On the other hand, the second Conditional Deed of Sale6 covering Lot No. 59444 provides, thus:chanrobles virtua1aw 1ibrary
1. The sum of FORTY-ONE THOUSAND ONE HUNDRED EIGHTY-SEVEN and 25/100 (Php41,187.25) PESOS shall be paid upon signing of this conditional deed of sale; and
2. The balance of ONE HUNDRED TWENTY-THREE THOUSAND FIVE HUNDRED SIXTY-ONE and 75/100 (Php123,561.75) PESOS shall be paid within a period of one (1) year from November 15, 1973, with interest of 12% per annum based on the balance, in the mode and manner specified below:chanrobles virtua1aw 1ibrarya) January 4, 1974 – P16,474.90 plus interest3. That the vendee shall be given a grace period of thirty (30) days from the due date of any installment with corresponding interest to be added, but should the VENDEE fail to make such payment within the grace period this contract shall be deemed rescinded and without force and effect after notice in writing by VENDOR to VENDEE.
b) On or before May 15, 1974 – P53,543.43 plus interest
c) On or before November 15, 1974 – P53,543.32 plus interest
4. That the VENDOR agrees to have the existing Mortgages on the properties subject of this sale released on or before May 20, 1974.
5. That the VENDOR agrees to have the above-described properties freed and cleared of all lessees, tenants, adverse occupants or squatters within 100 days from the execution of this conditional deed of sale. In case of failure by the VENDOR to comply with the undertaking provided in this paragraph and the VENDEE shall find it necessary to file a case or cases in court to eject the said lessees, tenants, occupants and/or squatters from the land, subject of this sale, the VENDOR agrees to answer and pay for all the expenses incurred and to be incurred in connection with said cases until the same are fully and finally terminated.
6. That the VENDOR and the VENDEE agree that during the existence of this Contract and without previous expressed written permission from the other, they shall not sell, cede, assign, transfer or mortgage, or in any way encumber unto another person or party any right, interest or equity that they may have in and to said parcels of land.
x x x x
8. That it is understood that ownership of the properties herein conveyed shall not pass to the VENDEE until after payment of the full purchase price; provided however, that [the] VENDOR shall allow the annotation of this Conditional Deed of Sale at the back of the titles of the above-described parcels of land in the corresponding Registry of Deeds x x x.
9. That upon full payment of the total purchase price, a Deed of Absolute Sale shall be executed in favor of the VENDEE and the VENDOR agrees to pay the documentary stamps and the science stamp tax of the Deed of Sale; while the VENDEE agrees to pay the registration and other expenses for the issuance of a new title.
10. That it is mutually agreed that in case of litigation, the venue of the case shall be in the courts of Manila, having competent jurisdiction, any other venue being expressly waived.5
1. The sum of FIFTY-TWO THOUSAND SEVENTY-SIX AND 37/100 (Php52,076.37) PESOS, shall be paid upon signing of this conditional deed of sale; andRespondent was able to pay petitioner the amount of P275,055.558 as partial payment for the two properties corresponding to the initial payments and the first installments of the said properties.
2. The balance of ONE HUNDRED FIFTY-SIX THOUSAND TWO HUNDRED TWENTY-NINE and 13/100 (Php156,229.13) PESOS shall be paid within a period of one (1) year from November 15, 1973, with interest of 12% per annum based on the balance, in the mode and manner specified below:chanrobles virtua1aw 1ibrarya) January 4, 1974 – P20,830.55 plus interest3. That the VENDEE shall be given a grace period of thirty (30) days from the due date of any installment with corresponding interest to be added, but should the VENDEE fail to make such payment within the grace period, this contract shall be deemed rescinded and without force and effect after notice in writing by VENDOR to VENDEE.
b) On or before May 15, 1974 – P67,699.29 plus interest
c) On or before November 15, 1974, P67,699.29 plus interest
4. That the VENDOR agrees and acknowledges that any and all payments to be made by the VENDEE by reason of this presents unless hereafter advised by VENDOR to the contrary, shall be made in favor of and to the Philippine Trust Company by way of liquidation and payment of the existing mortgage on the property subject of this sale.
5. That after each payment adverted to above the VENDOR shall issue the corresponding receipt for the amount paid by the VENDOR to the Philippine Trust Company.
6. That the VENDOR agrees to have the above-described property freed and cleared of all lessees, tenants, adverse occupants or squatters within 100 days from the execution of this conditional deed of sale. In case of failure by the VENDOR to comply with this undertaking provided in this paragraph and the VENDEE shall find it necessary to file a case or cases in court to eject the said lessees, tenants, occupants and/or squatters from the land, subject of this sale, the VENDOR agrees to answer and pay for all the expenses incurred and to be incurred in connection with said cases until the same are fully and finally terminated.
7. That the VENDOR and the VENDEE agree that during the existence of this Contract and without previous expressed written permission from the other, they shall not sell, cede, assign, transfer or mortgage, or in any way encumber unto another person or party any right, interest or equity that they may have in and to said parcel of land.
x x x x
9. That it is understood that ownership of the property herein conveyed shall not pass to the VENDEE until after payment of the full purchase price, provided, however, that [the] VENDOR shall allow the annotation of the Conditional Deed of Sale at the back of the Title of the above-described parcel of land in the corresponding Registry of Deeds; x x x.
10. That upon full payment of the total purchase price, a Deed of Absolute Sale shall be executed in favor of the VENDEE and the VENDOR agrees to pay the documentary stamps and the science stamp tax of the Deed of Sale; while the VENDEE agrees to pay the registration and other expenses for the issuance of a new title.
11. That it is mutually agreed that in case of litigation, the venue of the case shall be in the courts of Manila, having competent jurisdiction, any other venue being expressly waived.7
WHEREFORE, premises considered, the complaint is DISMISSED for lack of merit.The trial court stated that the issues before it were: (1) Did petitioner unlawfully evade its obligation to execute the final deed of sale and to eject the squatters/occupants on the properties; (2) Is the case barred by prior judgment; and (3) Does respondent have a cause of action against petitioner.
Claims and counterclaims for damages are also dismissed.19
WHEREFORE, premises considered, the August 1, 2005 Decision of the Regional Trial Court of Manila, Branch 1, in Civil Case No. 01-100411, is hereby REVERSED and SET ASIDE.The Court of Appeals held that the two conditional deeds of sale in this case are contracts to sell. It stated that the law applicable to the said contracts to sell on installments is R.A. No. 6552, specifically Section 4 thereof, as respondent paid less than two years in installments. It held that upon repeated defaults in payment by respondent, petitioner had the right to cancel the said contracts, but subject to the proper receipt of respondent of the notice of cancellation or the demand for the rescission of the contracts by notarial act.
A new one is hereby entered: REINSTATING the complaint and defendant-appellee MANUEL UY & SONS INC. is hereby DIRECTED, pursuant to Sec. 4, R. A. No. 6552, otherwise known as the Maceda Law, to EXECUTE and DELIVER:
(1) Deeds of Absolute Sale in favor of VALBUECO, INC.; and (2) Transfer Certificates of Title pertaining to Nos. 59534, 59445, 59446 and 59444, in the name of plaintiff-appellant VALBUECO, INC.,
after VALBUECO pays MANUEL UY & SONS, without additional interest, within thirty days from finality of this judgment, the balance of the contract price.
If MANUEL UY & SONS refuses to deliver the Deeds of Absolute Sale and the co-owner's copy of the TCTs, the Register of Deeds of Antipolo, Rizal is hereby DIRECTED to CANCEL the latest TCTs issued derived from TCT Nos. 59534, 59445, 59446 and 59444, and to ISSUE new TCTS in the name of VALBUECO.
Only if VALBUECO fails in the payment directed above, then defendant-appellee MANUEL UY & SONS INC. has the opportunity to serve a valid notice of notarial rescission.chanroblesvirtualawlibrary
The main issue is whether respondent is entitled to the relief granted by the Court of Appeals. Petitioner contends that the Court of Appeals erred in directing it to execute deeds of absolute sale over the subject lots even if respondent admitted non-payment of the balance of the purchase price.
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN REVERSING THE RTC DECISION AND REINSTATING THE COMPLAINT WHEN ON ITS FACE IT HAS LONG BEEN PRESCRIBED, AS IT WAS FILED AFTER 27 YEARS AND HAS NO JURISDICTION (SIC).
THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED AND GRAVELY ABUSED ITS DISCRETION IN COMPELLING PETITIONER TO EXECUTE A FINAL DEED OF ABSOLUTE [SALE] EVEN IF RESPONDENT JUDICIALLY ADMITTED ITS NON-PAYMENT OF THE BALANCE OF THE DEEDS OF CONDITIONAL SALE DUE SINCE 1974.
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN GRANTING THE RELIEFS PRAYED BY RESPONDENT IN ITS COMPLAINT FOR SPECIFIC PERFORMANCE WHEN IT WAS RESPONDENT WHO BREACHED THE CONTRACT.
THE HONORABLE COURT OF APPEALS COMMITTED GRAVE INJUSTICE WHEN IT PENALIZED PETITIONER FOR EXERCISING ITS LEGAL RIGHT AND DID NOT COMMIT AN ACTIONABLE WRONG WHILE IT HEFTILY REWARDED RESPONDENT, WHO BREACHED THE CONTRACT, AND ORDERED TO PAY WITHOUT INTEREST PHP97,998.95, WHICH IS DUE SINCE 1974 UNDER THE CONTRACT, FOR FOUR (4) PARCELS OF LAND (57,393 SQUARE METERS), NOW WORTH HUNDRED MILLIONS.
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN ANNULING THE NOTARIAL RESCISSION WHEN THE COMPLAINT IS ONLY FOR SPECIFIC PERFORMANCE AND WAS NOT AN ISSUE RAISED IN THE PLEADINGS OR DURING THE TRIAL.24
Section 3. In all transactions or contracts involving the sale or financing of real estate on installment payments, including residential condominium apartments but excluding industrial lots, commercial buildings and sales to tenants under Republic Act Numbered Thirty-eight hundred forty-four, as amended by Republic Act Numbered Sixty-three hundred eighty-nine, where the buyer has paid at least two years of installments, the buyer is entitled to the following rights in case he defaults in the payment of succeeding installments:In this case, respondent has paid less than two years of installments; therefore, Section 4 of R.A. No. 6552 applies.
(a) To pay, without additional interest, the unpaid installments due within the total grace period earned by him which is hereby fixed at the rate of one month grace period for every one year of installment payments made: Provided, That this right shall be exercised by the buyer only once in every five years of the life of the contract and its extensions, if any. (b) If the contract is canceled, the seller shall refund to the buyer the cash surrender value of the payments on the property equivalent to fifty per cent of the total payments made, and, after five years of installments, an additional five per cent every year but not to exceed ninety per cent of the total payments made: Provided, That the actual cancellation of the contract shall take place after thirty days from receipt by the buyer of the notice of cancellation or the demand for rescission of the contract by a notarial act and upon full payment of the cash surrender value to the buyer.
Down payments, deposits or options on the contract shall be included in the computation of the total number of installment payments made.
Sec. 4. In case where less than two years of installments were paid the seller shall give the buyer a grace period of not less than sixty days from the date the installment became due.
If the buyer fails to pay the installments due at the expiration of the grace period, the seller may cancel the contract after thirty days from receipt by the buyer of the notice of cancellation or the demand for rescission of the contract by a notarial act.31
Section 1. Defense and objections not pleaded. - Defenses and objections not pleaded whether in a motion to dismiss or in the answer are deemed waived. However, when it appears from the pleadings that the court has no jurisdiction over the subject matter, that there is another action pending between the same parties for the same cause, or that the action is barred by a prior judgment or by statute of limitations, the court shall dismiss the claim.37In Gicano v. Gegato,38 the Court held:chanrobles virtua1aw 1ibrary
x x x (T)rial courts have authority and discretion to dismiss an action on the ground of prescription when the parties' pleadings or other facts on record show it to be indeed time-barred; (Francisco v. Robles, Feb, 15, 1954; Sison v. McQuaid. 50 O.G. 97; Bambao v. Lednicky, Jan. 28, 1961; Cordova v. Cordova, Jan. 14, 1958; Convets, Inc. v. NDC, Feb. 28, 1958; 32 SCRA 529; Sinaon v. Sorongan, 136 SCRA 408); and it may do so on the basis of a motion to dismiss (Sec. 1,f, Rule 16, Rules of Court), or an answer which sets up such ground as an affirmative defense (Sec. 5, Rule 16), or even if the ground is alleged after judgment on the merits, as in a motion for reconsideration (Ferrer v. Ericta, 84 SCRA 705); or even if the defense has not been asserted at all, as where no statement thereof is found in the pleadings (Garcia v. Mathis, 100 SCRA 250; PNB v. Pacific Commission House, 27 SCRA 766; Chua Lamco v. Dioso, et al., 97 Phil. 821); or where a defendant has been declared in default (PNB v. Perez, 16 SCRA 270). What is essential only, to repeat, is that the facts demonstrating the lapse of the prescriptive period, be otherwise sufficiently and satisfactorily apparent on the record; either in the averments of the plaintiff's complaint, or otherwise established by the evid.nce.39Moreover, Dino v. Court of Appeals40 held:chanrobles virtua1aw 1ibrary
Even if the defense of prescription was raised for the first time on appeal in respondent's Supplemental Motion for Reconsideration of the appellate court's decision, this does not militate against the due process right of the petitioners. On appeal, there was no new issue of fact that arose in connection with the question of prescription, thus it cannot be said that petitioners were not given the opportunity to present evidence in the trial court to meet a factual issue. Equally important, petitioners had the opportunity to oppose the defense of prescription in their Opposition to the Supplemental Motion for Reconsideration filed in the appellate court and in their Petition for Review in this Court.41In this case, petitioner raised the defense of prescription for the first time before this Court, and respondent had the opportunity to oppose the defense of prescription in its Comment to the petition. Hence, the Court can resolve the issue of prescription as both parties were afforded the opportunity to ventilate their respective positions on the matter. The Complaint shows that the Conditional Deeds of Sale were executed on November 29, 1973, and payments were due on both Conditional Deeds of Sale on November 15, 1974. Article 114442 of the Civil Code provides that actions based upon a written contract must be brought within ten years from the time the right of action accrues. Non-fulfillment of the obligation to pay on the last due date, that is, on November 15, 1974, would give rise to an action by the vendor, which date of reckoning may also apply to any action by the vendee to determine his right under R.A. No. 6552. The vendee, respondent herein, filed this case on March 16, 2001, which is clearly beyond the 10-year prescriptive period; hence, the action has prescribed.
1 Under Rule 45 of the Rules of Court.cralawnad
2 Penned by Associate Justice Vicente Q. Roxas of the Sixteenth Division, with Associate Justice Josefina Guevara-Salonga as Chairman and Associate Justice Apolinario D. Bruselas, Jr. as member, concurring.cralawnad
3 In Civil Case No. 01-100411.cralawnad
4Rollo, pp. 351-354.cralawnad
5Id. at 352-353.cralawnad
6Id. at 355-358.cralawnad
7Id. at 356-357.cralawnad
8 Records, pp. 117-123; Decision of the Court of Appeals, id. at 73.cralawnad
9 Records, pp. 294-295.cralawnad
10Id. at 256.cralawnad
11Id. at 52.cralawnad
12 Docketed as Civil Case No. 94-3426.cralawnad
13 Records, p. 89.cralawnad
14 Docketed as Civil Case No. 01-100411.cralawnad
15 Records, pp. 43-46.cralawnad
16Id. at 69-75.cralawnad
17 Also mentioned as “Wilma” Laurenciana in the TSN dated April 24, 2003.cralawnad
18Rollo, pp. 53-62.cralawnad
19Id. at 62.cralawnad
20 RTC Decision, id. at 61, citing TSN, April 24, 2003, p. 17; TSN, October 16, 2001, p. 22.cralawnad
21Rollo, pp. 84-85. (Emphasis in the original)
22 TSN, April 24, 2003, pp. 17-19, Cross-examination and Re-direct examination of witness Gaudencio Juan.cralawnad
23Rollo, p. 89.cralawnad
24Id. at 29-30.cralawnad
25Ramos v. Heruela, 509 Phil. 658, 665 (2005).cralawnad
27Id. at 667.cralawnad
28 Art. 1191. The power to rescind obligations is implied in reciprocal ones, in case one of the obligors should not comply with what is incumbent upon him.
The injured party may choose between the fulfillment and the rescission of the obligation, with the payment of damages in either case. He may also seek rescission, even after he has chosen fulfillment, if the latter should become impossible.
The court shall decree the rescission claimed, unless there be just cause authorizing the fixing of a period. This is understood to be without prejudice to the rights of third persons who have acquired the thing, in accordance with Articles 1385 and 1388 and the Mortgage Law.
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 a notarial act. After the demand, the court may not grant him a new term.cralawnad
29Rillo v. Court of Appeals, G.R. No. 125347, June 19, 1997, 274 SCRA 461, 467-468.cralawnad
30Id. at 468.cralawnad
31 Emphasis supplied.cralawnad
32 Records, p. 89.cralawnad
33Id. at 69.cralawnad
34Rillo v. Court of Appeals, supra note 29, at 469.cralawnad
36 See Rules of Court, Rule 5, Sec. 4.cralawnad
37 Emphasis supplied.cralawnad
38 241 Phil. 139, 145-146 (1988), cited in Dino v. Court of Appeals, 411 Phil. 594, 603-604 (2001).cralawnad
39 Emphasis supplied.cralawnad
40Supra note 38.cralawnad
41 Dino v. Court of Appeals, supra, at 605.cralawnad
42 Civil Code, Art. 1144. The following actions must be brought within ten years from the time the right of action accrues: (1) Upon a written contract; (2) Upon an obligation created by law; and (3) Upon a judgment.