Case Summary (G.R. No. 135634)
Trial Court Ruling
The Regional Trial Court (Branch 19, Naga City) ruled for petitioners on September 20, 1994, finding Exhibit 2 (the September 29 receipt) lacked a sufficiently certain description of the object, thereby invalidating the contract and requiring a new agreement.
Court of Appeals Decision
On April 21, 1998, the Court of Appeals reversed:
- It held Exhibit 2 constituted a valid, determinable contract of sale.
- It recognized a conditional sale with balance due in five years, thus validating respondent’s deposit of ₱7,035 in court.
- It ordered petitioners to accept the deposit, execute a formal deed covering the 509 sqm, pay respondent ₱50,000 damages and ₱10,000 attorney’s fees, and costs.
Issues on Appeal
I. Whether Exhibit 2 lacks an essential element (object certain and sufficiently described) to constitute a contract of sale.
II. Whether the condition precedent (full payment within five years) was unfulfilled, invalidating the obligation.
III. Whether respondent’s deposit constituted valid consignation.
IV. Whether prescription and laches bar respondent’s enforcement after 24 years.
Determinability of the Subject Matter
Under Arts. 1349 and 1460, a thing is sufficiently determinate if identifiable without a new agreement. The 345 sqm sold earlier lay centrally within the 854 sqm parcel, leaving a single 509 sqm tract surrounding it on three sides. Despite reliance on a survey for exact measurements, the adjoining lot was uniquely identifiable by location and relation to the previously sold portion.
Nature of the Contract: Absolute or Conditional
Art. 1458 defines a sale by consent, determinate object, and price certain. Although Exhibit 2 stipulated payment within five years and formal deed execution, there was no reservation of title or right to unilaterally rescind. Delivery of possession in 1964 and partial payments (₱100 in 1966) confirmed a perfected, absolute sale under Arts. 1475–1477. The survey‐based computation and deferred payment schedule did not render the contract conditional in form or substance.
Validity of Deposit versus Consignation
Art. 1257 provides for consignation when an obligation is due. Here the five-year period hinged on execution of a formal deed, which had not occurred; thus, the purchase price was not yet due. Nonetheless, the deposit of ₱7,035 in court was proper as security for respondent’s obligation and justified the Court of Appeals’ directive to accept the deposit and formalize the sale.
Iniquity of the Agreed Price
The agreed price (₱15/sqm) and resulting balance (₱7,035) derived from the parties’ contract. Courts must enforce
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Facts
- Juan San Andres was the registered owner of Lot No. 1914-B-2 in Liboton, Naga City.
- On September 28, 1964, he sold 345 square meters of that lot to Vicente S. Rodriguez for ₱2,415.00, evidenced by a Deed of Sale.
- Upon Juan San Andres’s death on May 5, 1965, Ramon San Andres was appointed judicial administrator and engaged Geodetic Engineer Jose Peñaro to prepare:
- A consolidated plan of the entire estate (Exh. A).
- A sketch plan of the 345-square-meter portion sold to Rodriguez.
- The survey revealed that Rodriguez had occupied an additional 509 square meters beyond the 345-square-meter lot.
- By letter dated July 27, 1987, the administrator demanded Rodriguez vacate the alleged encroachment; Rodriguez refused, asserting he had also purchased that portion on September 29, 1964.
- On November 24, 1987, an action for recovery of possession of the 509-square-meter area was filed in Civil Case No. 87-1335.
Procedural History
- In his re-amended answer (February 6, 1989), Rodriguez alleged:
- A second sale of the 509-square-meter portion at ₱15.00 per square meter, with a ₱500.00 downpayment evidenced by Receipt (Exh. 2).
- Full payment to be made within five years after execution of a formal deed of sale and survey.
- Attachment of a letter from Administrator Ramon San Andres (Exh. 3) requesting partial payment.
- Rodriguez deposited ₱7,035.00 (balance) in court.
- Substitutions occurred upon the deaths of Ramon San Andres (succeeded by son Ricardo) and Rodriguez (succeeded by heirs).
- Trial Court (September 20, 1994) held Exhibit 2 failed to describe the object with sufficient certainty, invalidating the sale and necessitating a new contract.
- Court of Appeals (April 21, 1998) reversed, finding:
- The object was determin