G.R. No. 116110 - Baliwag Transit, Inc. vs. Court of Appeals

Villonco Realty Company (plaintiff-appellee) filed an action for specific performance against Bormaheco, Inc. and spouses Francisco N. Cervantes and Rosario N. Cervantes (defendants-appellants).
Edith Perez de Tagle intervened as a real estate broker claiming her commission.
The subject was three lots (TCT Nos. 43530, 43531, 43532) totaling 3,500 square meters at 245 Buendia Avenue, Makati, Rizal, owned by spouses Cervantes, but mortgaged to the Development Bank of the Philippines until fully paid July 10, 1969.
Bormaheco, Inc., represented by Francisco Cervantes (president), occupied the three lots.

Negotiations began February 1964 between Villonco Realty, Bormaheco (via Cervantes), and broker Edith Perez de Tagle.
Villonco Realty believed the lots belonged to Bormaheco and that Cervantes had authority to sell. Cervantes did not disclose the lots were conjugal properties nor mortgaged.
Bormaheco's written offer dated February 12, 1964 offered sale at P400/sqm subject to:

P100,000 earnest money deposit.
Sale consummated only after Bormaheco’s purchase of a 20,000 sqm property at Punta, Sta. Ana (Nassco land).
If purchase of Nassco land failed due to uncontrollable reasons, earnest money returned and sale not consummated.
Final negotiations to be known after 45 days.

Nassco land was awarded to Bormaheco on January 17, 1964; board approved sale February 18, 1964; Economic Coordinator approval pending but obtained March 24, 1964.

Purchase price P400/sqm including improvements.
P100,000 earnest money as part payment.
Sale cancellation only if Bormaheco’s Sta. Ana deal failed, in which case earnest money with 10% p.a. interest to be returned.
Payment scheme specified with P750,000 down payment and balance payable in installments.

Cervantes signed 'Conforme' accepting the terms on behalf of Bormaheco, Inc., and accepted the P100,000 earnest money delivered by broker Edith Perez de Tagle.

On March 30, 1964, Cervantes unilaterally rescinded the contract, returning earnest money plus interest, citing uncertainty in acquisition of the Nassco property despite being aware of its board’s approval and Economic Coordinator’s pending approval.
Villonco Realty refused the return and filed suit for specific performance on April 7, 1964; lis pendens annotated the same day.
Nassco deed of sale executed June 26, 1964.
Villonco Realty amended complaint to include spouses Cervantes upon disclosing the lots were registered under their names.

Spouses Cervantes to execute deed conveying the lots to Bormaheco.
Bormaheco to then convey to Villonco Realty at P400/sqm less P100,000 paid.
Payment of P10,000 monthly damages to Villonco Realty from March 24, 1964 to consummation.
Payment of P42,000 commission to Edith Perez de Tagle.
P20,000 attorney’s fees to Villonco Realty.

No perfected contract due to conditional acceptance/counter-offer and failure to acquire Nassco land within 45 days.
Bormaheco lacked title (owned by spouses).
Cervantes had no authority to bind conjugal partnership or wife’s consent.

Whether a valid and perfected contract of sale existed between Villonco Realty Company and Bormaheco, Inc./Cervantes despite the claimed conditional acceptance and qualifications.
Whether the condition that Bormaheco must acquire the Nassco property within 45 days was a decisive suspensive condition preventing perfection or enforcement of the sale contract.
Whether Bormaheco, Inc. and Cervantes could be compelled to sell the conjugal properties, especially considering alleged lack of authority and wife’s opposition.
Whether Villonco Realty Company is entitled to consequential damages, broker’s commission, and attorney’s fees.