G.R. No. 147405 , April 25, 2006
Platinum Plans Phil. Inc., Youth Educational Plans, Inc., and Ernesto L. Salas, Petitioners, vs. Romeo R. Cucueco, Respondent.

FACTS

Respondent Romeo Cucueco, the lessee and occupant of a condominium unit, verbally offered to purchase it from petitioners for P4,000,000.00, payable in two installments. He formalized this offer in writing, proposing to issue a P100,000.00 earnest money check and a post-dated check for P1,900,000.00 encashable on September 30, 1993, after which he would stop paying rent. The remaining P2,000,000.00 balance was to be settled by December 31, 1993, with respondent assuming any outstanding bank loan on the property below that amount. Petitioners accepted and encashed the checks. However, a dispute arose when petitioners sent a letter changing the due date for the second installment to September 23, 1993. Respondent filed a complaint for specific performance and damages, asserting a perfected contract of sale. Petitioners countered that no sale was perfected, that respondent had forfeited his downpayment for non-compliance, and that ownership was retained until full payment.

ISSUE

Whether or not a contract of sale was perfected between the parties.

RULING

The Supreme Court ruled that a contract of sale was perfected. A contract is perfected by mere consent, which is manifested by the meeting of the offer and acceptance upon the thing and the cause which are to constitute the contract. Here, the essential elements of a contract of sale were present: consent (respondent’s offer and petitioners’ acceptance through encashment of the checks), determinate subject matter (the specific condominium unit), and price (P4,000,000.00). The fact that the parties later disagreed on the period for paying the balance of the price did not negate perfection. The absence of a specific period for the payment of the balance did not prevent the birth of the contract; it merely meant that the period was not stipulated. Under Article 1197 of the Civil Code, the court may fix the duration of such a period when it depends upon the will of the debtor or when from the nature and circumstances of the obligation a period was intended. Consequently, the Court of Appeals correctly ordered respondent to pay the balance with interest and petitioners to execute the deed of sale upon full payment. The forfeiture clause invoked by petitioners could not apply as there was a perfected contract, and the provision was deemed a penal clause subject to judicial temperment.