G.R. No. 179965 - Diego vs. Diego

In 1993, Nicolas P. Diego (petitioner) and his brother Rodolfo P. Diego (respondent) entered into an oral agreement regarding Nicolas’s share (P500,000.00) in their family’s Diego Building in Dagupan City.
Rodolfo made a downpayment of P250,000.00, with an agreement that the deed of sale would only be executed after full payment of the remaining balance of P250,000.00.
Rodolfo failed to pay the remaining balance.

The building was leased to third parties, but Nicolas did not receive his share of the rents from Eduardo P. Diego (another brother and building administrator).
Instead, Eduardo gave Nicolas’s monthly share of the rents to Rodolfo.
Despite Nicolas's demands, Rodolfo and Eduardo did not remit rent shares or provide accounting.

On May 17, 1999, Nicolas filed a Complaint against Rodolfo and Eduardo, seeking:

Rodolfo and Eduardo filed an Answer with Counterclaim, arguing Nicolas had sold his share and thus had no claim over rents; Rodolfo admitted partial payment but conditioned payment of the balance on Nicolas executing a deed of sale.

On April 19, 2005, the RTC dismissed the complaint for lack of merit.
The RTC ruled that the contract was a perfected contract of sale since a partial payment had been given in 1993, and Nicolas had ceased to be a co-owner; thus, he was no longer entitled to share rents.
The RTC ordered Nicolas to execute a deed of absolute sale after Rodolfo’s payment of the remaining balance.

A perfected sale existed, enabling Rodolfo to compel execution of the deed of sale;
Nicolas could not validly rescind the contract after accepting partial payment;
Since the payment period was not fixed, Nicolas should have filed a case to fix the period, and Rodolfo was not in default;
Rodolfo was legally entitled to collect the fruits (rents) from Nicolas’s share.

Nicolas filed a Petition asserting errors in the CA decision, particularly about the nature of the contract, rescission rights, entitlement to rents, and claims for damages and attorney’s fees.

Whether there was a perfected contract of sale between Nicolas and Rodolfo, given the condition of full payment before execution of the deed of sale.
Whether Nicolas’s unilateral rescission of the agreement was valid, considering Rodolfo's alleged material breach of contract by failing to pay the balance.
Whether Nicolas retained rights over his share in the building, including entitlement to rents, given the absence of full payment and execution of deed.
Whether Rodolfo was unjustly enriched by collecting rents without having full ownership.
Whether the Court of Appeals erred in denying damages, attorney’s fees, and litigation expenses to Nicolas.