Case Summary (G.R. No. L-8024)
Petitioner
Apolonio Legaspi and Concordia Samperoy — sellers who contend that the contract of sale should be annulled because, they allege, the buyer agreed to pay P450 immediately upon execution and notarization of the deed, but failed to tender payment as promised.
Respondent
Eusebia de la Cruz — buyer who executed the contract, tendered the purchase price to the sellers (alleged in complaint), moved for judgment on the pleadings, and sought an order compelling delivery of the property upon payment of the P450 purchase price.
Key Dates
Contract executed and notarized: December 5, 1949 (as alleged). Suit for delivery filed in the Court of First Instance of Antique: November 1950. (Decision date is not included here per instruction but was later reviewed to determine the applicable constitutional context.)
Applicable Law and Constitutional Context
Governing statute: the Civil Code (the pre-1950 Civil Code regime, not the New Civil Code) which governed transactions in 1949. Relevant provisions and doctrines expressly relied upon in the decision include Article 1501(3) and Article 1504 of the Civil Code regarding remedies and effects of default in payment of the price in contracts of sale. Constitutional context: the 1935 Constitution was the charter in force at the time of the decision and trial, but the controversy rests on civil contract and Civil Code principles rather than constitutional issues.
Facts Established by the Record
The complaint alleged execution of a written contract of sale, its essential terms, plaintiff’s tender of the P450 purchase price (which defendants allegedly refused), and defendants’ continued retention of the realty. The defendants’ answer admitted the sale and price but pleaded that prior to the making of the document the buyer agreed to pay P450 immediately after execution on December 5, 1949, and that after notarization and after the buyer took the original document, he refused to pay the P450. Defendants asserted lack of consideration and deceit as grounds to annul the sale. Plaintiff moved for judgment on the pleadings; defendants joined and sought annulment.
Procedural Posture and Trial Court Disposition
The trial court (Judge F. Imperial Reyes) granted judgment ordering (a) plaintiff to pay P450 to the defendants and (b) defendants to receive such price and thereafter deliver possession of the property to the plaintiff. Defendants’ motion for reconsideration was denied, and they timely appealed raising seven errors, reduced in argument to two principal propositions: (1) that the trial judge disregarded the answer’s allegation of non-payment, and (2) that the alleged failure to pay immediately rendered the contract void for lack of consideration.
Issue on Appeal
Whether the trial court erred in refusing to annul the contract of sale on the ground that, after notarization and delivery of the original document, the buyer failed to pay the agreed price immediately as allegedly promised, thereby rendering the contract void for lack of consideration.
Legal Analysis — Existence of Consideration at Execution
The court correctly treated the operative question as one of remedy for non-payment rather than absence of cause. At the time the deed was signed and notarized, the cause (consideration) for the sale existed: the agreed price of P450. The written instrument explicitly recited the price and manifested the parties’ agreement. A subsequent failure to perform (i.e., to deliver the price at the time agreed) does not retroactively convert a valid, executed contract into a nudum pactum (a contract without cause). The authorities cited in the decision (Levy v. Johnson; Puato v. Mendoza) support that the existence of consideration at formation controls the character of the contract.
Legal Analysis — Consequences of Failure to Pay on Time
Non-payment after formation constitutes a default by the buyer and gives the seller remedial options under the Civil Code; it does not ipso facto rescind the contract unless the contract contains an effective stipulation to that effect and the seller has acted upon it in the prescribed manner. The remedies available to the seller include: (a) to demand legal interest for delay under Article 1501(3), and (b) to seek rescission in court. The cited authorities (Villaruel v. Tan King; Escueta v. Pardo; Cortes v. Bibano) illustrate these remedial avenues.
Legal Analysis — Effectiveness of an “Automatic Rescission” Clause
Even if the contract had expressly stipulated automatic rescission upon failure to pay within the agreed time, the court explained that, in the sale of real property, the vendee may still cure the default by paying the price at any time before the seller makes a prior demand for rescission by either instituting suit or executing a notarial act of demand. Article 1504 of the Civil Code was applied to hold that absent a prior judi
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Citation and Decision
- Reported at 98 Phil. 43; G.R. No. L-8024; decided November 29, 1955.
- Decision authored by Justice Bengzon.
- Judgment of the lower court affirmed with costs against appellants.
- Justices Paras, C. J., Padilla, Reyes, A., Jugo, Bautista Angelo Labrador, Concepcion, and Reyes, J. B. L., JJ., concurred.
Lower Court and Relevant Dates
- Original action filed in the Court of First Instance of Antique in November 1950.
- Underlying sale executed in December 1949; defendants’ answer refers specifically to December 5, 1949 as the date the document was signed and ratified by the notary public.
- Appeal filed from the November 1950 trial court judgment and decided by the Supreme Court on November 29, 1955.
Factual Background
- Plaintiff Eusebia de la Cruz sued defendants Apolonio Legaspi and his wife Concordia Samperoy to compel delivery of a parcel of land sold to plaintiff in December 1949.
- The complaint alleged: execution of the contract of sale; the terms of the contract; plaintiff’s tender of the purchase price of P450; defendants’ refusal to accept payment; and defendants’ undue retention of the realty.
- Defendants’ answer admitted the sale and the agreed price but alleged that prior to the formal document defendants agreed plaintiff would pay P450 “right after the document is executed that very day December 5, 1949.”
- Defendants further alleged that after the document was signed, ratified by the notary public, and after plaintiff had taken the original document, plaintiff refused to pay the P450 purchase price.
- Based on non-payment and alleged deceit, defendants prayed for annulment of the document of sale for lack of consideration.
Pleadings and Motions
- Plaintiff filed a petition for judgment on the pleadings, contending that the defendants’ answer supplied no valid excuse to retain the property and that the allegations of non-payment were not a defense to the action.
- Defendants joined their prior answer to the motion for judgment on the pleadings and maintained that the sale should be annulled pursuant to their allegations of non-payment and deceit.
- The trial judge, Hon. F. Imperial Reyes, rendered judgment ordering:
- (a) Plaintiff to pay the purchase price of P450 to defendants; and
- (b) Defendants to receive such price and, immediately after receipt, to deliver possession of the property to plaintiff.
- Defendants’ motion for reconsideration in the trial court was denied, and they appealed.
Assignments of Error and Principal Contentions on Appeal
- Defendants (appellants) filed a printed brief assigning seven errors to the trial court’s judgment.
- The appellants advanced two principal propositions on appeal:
- (1) The trial judge erroneously disregarded their answer’s allegations of non-payment of the price immediately after execution of the document.
- (2) Those allegations, which they argued must be deemed admitted when plaintiff moved for judgment on the pleadings, established a valid defense because the contract allegedly lacked consideration and was resolved by plaintiff’s failure to pay “right after the document was executed.”
Trial Court Finding and Supreme Court’s View of Trial Court’s Consideration
- The Supreme Court notes that, although the trial court’s decision does not explicitly say so, there is no reason to doubt the trial judge considered allegations in both com