GR 123655; (January, 2000) (Digest)
G.R. No. 123655 January 19, 2000
ANGEL BAUTISTA, petitioner, vs. COURT OF APPEALS, PEDRO ATIENZA (for himself and as Attorney-in-Fact of Julita Atienza, Benedicto De Leon and Rizalino Atienza), AMELIA ATIENZA, GREGORIO ATIENZA, CONRADO ATIENZA and REALTY BARON CORPORATION, respondents.
FACTS
Petitioner Angel Bautista entered into a Contract of Sale with the respondents, the compulsory heirs of the registered owners, for a parcel of land in Tagaytay City. The contract stipulated a purchase price of P1.5 million, with specific terms of payment. A crucial condition was that the second installment of P90,000 would be payable “upon presentation of the SELLERS to the BUYER of a new transfer certificate of title… already registered under the names of the SELLERS.” The contract also stated that the buyer “may advance” funds for taxes to facilitate this transfer. Petitioner paid the initial P10,000. Respondents later demanded the P90,000 advance without having secured the new title in their names, which petitioner refused, insisting on the prior fulfillment of the condition. Respondents subsequently cancelled the contract through a notarial act and sold the property to respondent Realty Baron Corporation.
ISSUE
The core issue is whether the respondents had the right to unilaterally rescind the contract and sell the property to a third party, given that the condition precedent for the petitioner’s next payment—the issuance of a new title in the sellers’ names—had not been fulfilled.
RULING
The Supreme Court ruled in favor of the petitioner, declaring the respondents’ rescission void and the subsequent sale to Realty Baron Corporation null and void. The legal logic is anchored on the nature of conditional obligations and the principle that a party cannot demand performance from another when they themselves are in default. The contract clearly made the petitioner’s obligation to pay the P90,000 installment contingent upon the respondents first presenting a new title registered in their names. This was a suspensive condition for that specific payment. Since the respondents failed to produce this title, the petitioner’s obligation to pay the second installment did not arise. The use of the word “may” in the clause regarding advancing tax payments conferred a discretion upon the petitioner, not an obligation. Therefore, the respondents were not entitled to demand the P90,000, and their unilateral rescission based on the petitioner’s non-payment was invalid, as they were the party at fault for not fulfilling the condition precedent. The Court ordered the respondents to comply with the original contract, deliver the necessary documents, and directed the cancellation of the title issued to the corporation.