Macasaet v. R. Transport Corporation Facts: R.

Transport and Macasaet entered into a Deed of Sale with Assumption of Mortgage over 4 passenger buses whereby Macasaet undertook to pay the consideration of P12M and assume the existing mortgage obligation on the said buses in favor of Phil. Hino Sales Corp. Accordingly, R. Transport delivered to Macasaet 2 passenger buses. Despite demands, however, Macasaet failed to pay the stipulated purchased price. This prompted R. Transport to file a complaint seeking the issuance of a writ of replevin, praying for judgment declaring R. Transport as the lawful owner and possessor of the passenger buses and ordering Macasaet to remit the amount of P660,000 representing the income generated by the 2 buses. Prior to the execution of the contract, Special Trip Contract was entered into by the parties wherein it stipulated that R. Transport would lease the 4 subject of the deed of sale to Macasaet for the sum of P10,000 a day per bus. For his defense, petitioner alleged that he had paid respondent the full consideration of P12M and had agreed to assume the mortgage obligation. He claimed ownership over the 4 buses. He further contented that he had already remitted P120,000 to respondent as partial payment of the mortgage obligation. Petitioner admitted that he had been earning at least P7,000 per day on each bus. For his counterclaim, he prayed for the return of the bus units seized and the immediate delivery of the other 2 units, as well as payment for damages. Issue: W/N respondent has the right to rescind or cancel the deed of sale in view of petitioners failure to pay stipulated consideration. Ruling: The CA erred in stating that the deed of sale was not perfected, for it was. There was no consummation though. However, the rescission or resolution of the deed of sale is in order. Being a consensual contract, sale is perfected at the moment there is a meeting of minds upon the thing which is the object of the contract and upon the price. From that moment, the parties may reciprocally demand performance, subject to the provisions of the law governing the form of contracts. A perfected contract of sale imposes reciprocal obligations on the parties whereby the vendor obligates himself to transfer the ownership of and to deliver a determinate thing to the buyer who, in turn, is obligated to pay a price certain in money or its equivalent. Failure of either party to comply with his obligation entitles the other to rescission as the power to rescind is implied in reciprocal obligations. Applying these legal precepts to the case at bar, we hold that respondent has the right to rescind or cancel the deed of sale in view of petitioners failure to pay stipulated consideration. Non-payment of the purchase price of property constitutes a very good reason to rescind a sale for it violates the very essence of the contract of sale. While it is preferable that respondent instead should have filed an action to resolve or cancel the deed as the right to do so must be invoked judicially, this shortcoming was cured when the complaint itself made out a case for rescission or resolution for failure of petitioner to comply with his obligation to pay the full purchase price.

As previously noted, petitioner did not pay the full purchase price as stipulated in the contract whereas respondent complied with its obligation when it delivered the 2 buses. A necessary consequence of rescission is restitution with payment of damages under Art. 1191. Also, corollary to the rescission of the contract of sale is the recovery of possession of the object thereof. Thus, petitioners possession over the subject buses became unlawful when upon demand for return, he wrongfully retained possession over the same. As to damages, a party is entitled only up to such compensation for the pecuniary loss that he has duly proven. Since the amount of damages was founded merely on speculations, we return to the provisions of the Special Trip Contract wherein the rental is fixed at P10,000 a day per bus. This duly executed contract was presented, marked and formally offered in evidence. The fact that Macasaet voluntarily signed the contract evinced his acquiescence to its terms, particularly the amount of rentals.

SANTOS vs. COURT OF APPEALS G.R. No. 120820. August 1, 2000 Facts: Spouses Santos owned the house and lot in Better Living Subdivision, Paranaque, Metro Manila. The land together with the house, was mortgaged with the Rural Bank of Salinas, Inc., to secure a loan of P150K. The bank sent Rosalinda Santos a letter demanding payment of P16K in unpaid interest and other charges. Since the Santos couple had no funds, Rosalinda offered to sell the house and lot to Carmen Caseda. After inspecting the real property, Carmen and her husband agreed. Carmen and Rosalinda signed a document, involving the sale of the house P350K as full amount, P54K as downpayment. Among other condition set is that Caseda will pay the balance of the mortgage in the bank, real estate taxes and the electric and water bills. The Casedas complied with the bank mortgage and the bills. The Santoses, seeing that the Casedas lacked the means to pay the remaining installments and/or amortization of the loan, repossessed the property. The Santoses then collected the rentals from the tenants. Carmen approached petitioners and offered to pay the balance of the purchase price for the house and lot. The parties, however, could not agree, and the deal could not push through because the Santoses wanted a higher price. Carmen is now praying that the Santoses execute the final deed of conveyance over the property. Issue: WON there was a perfected contract of sale? NO Held:

A contract is what the law defines it to be, taking into consideration its essential elements, and not what the contracting parties call it. Article 1458 expressly obliges the vendor to transfer ownership of the thing sold as an essential element of a contract of sale. This is because the transfer of ownership in exchange for a price paid or promised is the very essence of a contract of sale. There was no transfer of ownership simultaneously with the delivery of the property purportedly sold. The records clearly show that, notwithstanding the fact that the Casedas first took then lost possession of the disputed house and lot, the title to the property has remained always in the name of Rosalinda Santos. Although the parties had agreed that the Casedas would assume the mortgage, all amortization payments made by Carmen Caseda to the bank were in the name of Rosalinda Santos. The foregoing circumstances categorically and clearly show that no valid transfer of ownership was made by the Santoses to the Casedas. Absent this essential element, their agreement cannot be deemed a contract of sale. It was a contract to sell. Ownership is reserved by the vendor and is not to pass until full payment of the purchase price. This we find fully applicable and understandable in this case, given that the property involved is a titled realty under mortgage to a bank and would require notarial and other formalities of law before transfer thereof could be validly effected. The CA cannot order rescission. If the vendor should eject the vendee for failure to meet the condition precedent, he is enforcing the contract and not rescinding it. When the petitioners in the instant case repossessed the disputed house and lot for failure of private respondents to pay the purchase price in full, they were merely enforcing the contract and not rescinding it.
Heirs of Juan San Andres vs. Rodriguez
Juan San Andres sold a portion of his property to Rodriguez as evidenced by a Deed of Sale. Upon his death Ramon San Andres was appointed as administrator of the property. He hired a land surveyor and found that Rodriguez enlarged the property he bought from late Juan. Ramon demanded form the Rodriguez to vacate the portion allegedly occupied but the latter refused hence the present action. Rodriguez said that the excess portion was also sold to him by late Juan the following day after the first sale. He argued that the full payment of the whole sold lot would be effected within five years from the execution of the formal deed of sale after a survey of the property is conducted, as evidenced by a receipt of sale. The balance of the purchase price was consigned. RTC ruled in favor of petitioner while CA reversed the ruling. In SC petitioner argued that there is no certain object of the contract of sale as the lot was not described with sufficiency that there should be another contract to finally ascertain the identity. SC: Petition has no merit. The contract of sale has the following elements: 1. consent or meeting of the minds, 2. determinate subject matter, 3. price certain in money. There is no dispute that Rodriguez purchased a potion of Lot 1914-B consisting of 345 square meters. The said portion is located at the middle of the lot. Since the lot subsequently sold is said to adjoined the previously paid

lot, the subject is capable of being determined without the need of another contract. However, there is a need to clarify what CA said is a conditional sale. CA considered as a condition the stipulation of the parties that the full consideration, based on a survey of the lot, would be due and payable within 5 years from the execution of the formal deed of sale. It is evident in the stipulation in the receipt that the vendor late Juan sold the lot to Rodriguez and undertook the transfer of ownership without any qualification, reservation or condition. In can be gainsaid from the facts that the contract of sale is absolute, and not conditional. There is no reservation of ownership nor stipulation providing for a unilateral rescission by either party. In fact the sale was consummated upon the delivery of the lot to Rodriguez. Art.1477 provides that the ownership of the thing sold shall be transferred to the vendee upon the actual or constructive deliver thereof. The stipulation that the payment of the full consideration based on a survey shall be due and payable in 5 years from the execution of the formal deed of sale is not a condition which affects the efficacy of contract. CA decision is AFFIIRMED.