G.R. No. 146839 - Catungal vs. Rodriguez

Petitioner spouses Agapita and Jose Catungal owned Lot 10963 (65,246 sqm) covered by OCT No. 105, located in Talamban, Cebu City, alleged as Agapita’s exclusive paraphernal property.
Respondent Angel S. Rodriguez contracted to buy the lot for ₱25 million: downpayment of ₱500,000 and balance of ₱24.5 million in five checks, subject to securing a 12-m road right of way (ROW).

Paragraph 1(b): Balance payable only after Rodriguez “successfully negotiate[s], secure[s] and provide[s]” the ROW across an adjacent lot to the national road; if ROW negotiation fails, Rodriguez may rescind.
Paragraph 1(c): Vendee bears all costs of ROW acquisition and is given “enough time” and a “free hand” to negotiate.
Paragraph 5: Rodriguez has the option to rescind the sale by written notice; upon resale by the Catungals to a third party, vendor must reimburse the ₱500,000 downpayment, interest-free.

Rodriguez procured surveys, secured reclassification of the lot, and negotiated with third-party owners for the ROW; alleged diligent but ultimately unsuccessful due to Catungals’ interference.
August 31, 1990: Catungals demanded an additional ₱5 million advance; Rodriguez refused.
October–November 1990: Catungals sent letters declaring the contract cancelled for Rodriguez’s alleged indecision; Rodriguez protested.

December 10, 1990: Rodriguez filed Complaint for Damages and Injunction (Civil Case No. 2365-L), seeking TRO, preliminary and permanent injunction, actual (₱400,000), moral (₱200,000), exemplary damages (₱200,000), attorney’s fees (₱100,000).
December 12, 1990: TRO issued; preliminary injunction set; summons served on Catungals.
January 17, 1991: Motion to dismiss for improper venue denied; preliminary injunction issued upon ₱100,000 bond.
February 1, 1991: Catungals’ Answer with Counterclaim asserted reciprocal right to rescind under Article 1191, prayed for damages (including unearned interest on ₱24.5 million). They later filed two amended answers adding allegations of Rodriguez’s misrepresentations.
October 24, 1991: Rodriguez filed Amended Complaint alleging further misrepresentations by Catungals regarding lot boundaries and ROW negotiations.
December 20, 1991: Catungals’ urgent motion to dismiss denied; Catungals refused pre-trial and declared in default. Subsequent motions to lift default were denied.
May 30, 1992 Decision: Trial court ruled (a) only Rodriguez had option to rescind; (b) payment of balance conditional on ROW; (c) Rodriguez diligent; (d) Catungals misrepresented and thwarted ROW; (e) Catungals’ rescission in bad faith. Permanent injunction granted; Catungals ordered to adjust purchase price, pay ₱100,000 damages, ₱30,000 attorney’s fees, costs.

Catungals appealed, raising errors on venue, nature of action, default, injunctive relief and alleged fabrication of evidence.
1995–1997: Briefs filed; new counsel Atty. Borromeo entered; filed citations of authorities.
August 8, 2000 Decision: CA affirmed RTC decision.
August 21, 2000 Motion for Reconsideration: For the first time argued paragraphs 1(b) and 5 violated mutuality under Art. 1308, rendering the contract void ab initio.
January 30, 2001 Resolution: CA denied reconsideration and allowed substitution of heirs of deceased Catungals.

Heirs of Agapita and Jose Catungal filed before the Supreme Court, arguing (a) CA erred in not declaring the contract void for lack of mutuality in paragraphs 1(b) & 5; (b) CA should have addressed these issues despite not being raised on appeal.
Rodriguez filed Comment contending new issues cannot be raised on appeal, contract valid, and Catungals acted in bad faith.

Whether petitioners may raise for the first time on appeal their theory of nullity of the Conditional Deed of Sale based on purported violation of mutuality under Civil Code Article 1308.
Whether paragraphs 1(b) and 5 of the Conditional Deed of Sale constitute purely potestative conditions void under Articles 1182 and 1308, thus rendering the contract void ab initio.