Case Summary (G.R. No. 106837)
Background of the Dispute
The dispute originated from a contract to sell entered into on April 26, 1991, wherein De La Vida Institute agreed to purchase the parcels of land for P1,750,000. The petitioners surrendered physical possession of the properties to De La Vida Institute, which subsequently constructed a building at a cost of P800,000. However, the sale did not materialize by the agreed date of July 31, 1991, prompting the petitioners to file an unlawful detainer suit against the Institute.
Legal Actions Initiated
In response to the unlawful detainer case (MTCC Civil Case No. 2739), De La Vida Institute commenced a separate complaint for reformation of the contract to sell (Civil Case 592). The parties later reached a compromise agreement dated February 6, 1992, stipulating terms which included a period of five months for the Institute to secure funds amounting to P2,060,000.
Compromise Agreement Terms
The compromise agreement mandated that if the Institute secured the necessary funds within the stipulated timeframe, the petitioners would execute a Deed of Sale for the properties. Notably, the agreement also required that the Institute provide a xerox copy of the land titles to facilitate the loan process.
Developments Following the Agreement
Subsequent to the compromise, De La Vida Institute asserted through correspondence that the agreed sum was too high and proposed a revised amount of P2,000,000. They also expressed intentions to continue using the properties for educational purposes until July 6, 1992, affirming their commitment to vacate the premises if unable to secure the funds.
Court Proceedings and Outcomes
On March 25, 1992, the trial court approved the compromise, followed by a series of letters from the Institute requesting the petitioners to execute a contract to sell rather than a Deed of Sale. The court ultimately denied the petitioners' request for execution of judgment on August 6, 1992, reinforcing the respondent’s argument that the absence of a contract to sell inhibited their capacity to fulfill their obligations.
Central Legal Issue
The central issue before the court was whether the judge had committed grave abuse of discretion by ordering the petitioners to execute a contract to sell. The court determined that the compromise agreement did not enumerate a right for the Institute to demand a contract to sell, as the expectation remained that a Deed of Sale would only be executed upon complete payment of the purchase price.
Interpretation of the Compromise Agreement
The court highlighted the intention of the parties as articulated in the compromise agreement, confirming that the obligation was to execute a Deed of Sale contingent upon payment rather than an immediate contract to sell. The obligation to convey ownership was conditioned on the resolution of financial arrangements
...continue readingCase Syllabus (G.R. No. 106837)
Case Background
- The litigation involves two parcels of adjoining lots owned by petitioners, Henry Macion and Angeles Macion, proposed as extension sites for De La Vida Institute, an educational institution.
- On April 26, 1991, the petitioners and the private respondent, represented by Ms. Josephine Lanzaderas, entered into a contract to sell, wherein the private respondent assured that the properties would be purchased for P1,750,000.00 by July 31, 1991.
- Following the agreement, petitioners surrendered possession of the lots to the private respondent, who constructed an edifice valued at P800,000.00.
Legal Proceedings Initiated
- The anticipated sale did not materialize by the deadline, prompting petitioners to file a complaint for unlawful detainer against the private respondent (MTCC Civil Case No. 2739).
- In retaliation, the private respondent filed a complaint for reformation of the contract to sell (Civil Case 592).
Compromise Agreement
- On February 6, 1992, a compromise agreement was reached, allowing private respondent five months to raise P2,060,000.00.
- The agreement contained provisions stating that upon successful funding, the private respondent would execute a Deed of Sale and provide the owner's duplicate copies of the titles to the petitioners.
- The Board of Trustees of De La Vida College passed a resolution supporting this compromise agreement.
Dispute Over the Terms
- On Ma