Romero v.
Court of Appeals
250 SCRA 223
RELEVANT ISSUE(S):
1. Whether or not the buyer and seller of a parcel of land entered into a Deed of
Conditional Sale.
2. Whether or not the seller has the right to unilaterally rescind the contract of sale she
entered into with the buyer.
SALIENT FACTS:
Virgilio Romero (buyer) and Enriqueta Chua vda. de Ongsiong (seller) executed a Deed of
Conditional Sale for a 1,952 square meter land in Paranaque with a consideration of Php
1,561,600. Upon signing the contract, the buyer gave a down payment of Php 50,000. The rest
of the purchase price shall be given on the condition that the seller would be able to eject the
squatters that were occupying the property 60 days after the execution of the said Deed.
After 60 days have lapsed, the seller failed to eject the squatters from the land and instead,
decided to return the down payment given by the buyer. Seller also cited that she wanted to
retain the land and was no longer interested in selling it. However, the buyer refused to receive
the amount and insisted that he shall proceed with the sale and would even take care of the
costs of evicting the squatters.
This prompted the filing of a petition by the seller before the Regional Trial court asking for the
rescission of the Deed of Conditional Sale. However, the petition was denied on the basis that
since it was the seller who violated the condition stipulated in the contract, she did not have the
right to rescind the same in accordance to Article 1191 of the Civil Code.
The decision was later on reversed by the Court of Appeals citing that the ejection of the
squatters was a resolutory condition and that its non-occurrence rendered the contact already
void. Hence, the buyer appealed the said decision before the Supreme Court.
RULING OF THE SUPREME COURT:
The Supreme Court held that while the instrument executed by the parties is entitled Deed of
Conditional Sale, it is in fact absolute in nature which contains a condition placed as a mere
operative fact which sets into motion the period of compliance by the buyer as to when he shall
pay the balance of the purchase price. It does not, in any way, affect the perfection of the
contract of sale itself.
And according to Article 1545 of the Civil Code, either party has the option to either refuse to
proceed with the sale or waive the condition imposed when the same is not fulfilled. In the case
at bar, since it was the seller who failed to fulfill the condition, the buyer has the right to refuse
the reimbursement of the down payment and instead, proceed with the sale of land. Moreover,
in keeping with Article 1191 of the Civil Code, the seller does not have the unilateral right to
rescind the contract since it was she who breached it in the first place.
Hence, a sale is what the law defines it to be, taking into consideration its essential elements,
and not what the contracting parties call it.
MY CRITIQUE AND ANALYSIS:
With all the facts of this case considered, the Supreme Court was able to properly apply both
statutory law and existing precedents as well. It was very clear that there was already a
perfected contract of sale between the parties with the buyer’s obligation of payment
conditioned upon the ejection of the squatters in the property by the seller. And just because the
latter failed to do so does not mean that she could unilaterally decide to back out from the
contract which was supposed to have been entered in good faith. To say otherwise would have
been unfair and unjust. Both Articles 1545 and 1191 were precisely put in place for these types
of scenarios and in the case at bar, the choice to whether or not proceed with the sale only
belongs to the buyer as it was he and his interests that would stand to be compromised with the
actions of the buyer.
On the other hand, the Supreme Court once again upheld the longstanding principle that a sale
is what the law defines it to be and not what the contracting parties call it. More often than not,
people enter into contracts of sale and only rely with the nomenclature used without fully
realizing the nature of the agreement embodied in its fine print. This decision, together with so
many others in the past, serve as a reminder of caution for all of us when we enter into
contracts of sale because once perfected, we are already bound by its stipulations and all the
consequences resulting from them. It is crucial to exercise due diligence because at the end of
the day, the law would not allow one to rescind a contract on the sole basis that he failed to do a
condition that he voluntarily agreed to do or just because he suddenly changed his mind. The
law would always be on the side of fair play and the greatest reciprocity of interests of the
people involved in a contract, most especially in one that is of a sale.
