G.R. No. L-30831 & L-31176 November 21, 1979
PHILIPPINE NATIONAL BANK and JOAQUIN DE CASTRO and GRACIANA PASIA, petitioners, vs. THE HONORABLE COURT OF APPEALS and DELFIN PEREZ, substituted by his heirs, respondents.

FACTS

The spouses Leandro Solomon and Leocadia Bustamante mortgaged their land to the Philippine National Bank (PNB). Upon foreclosure and auction sale in 1934, PNB acquired the property. The next day, the parties executed a “Promesa de Venta,” a contract to sell, whereby the Bank agreed to reconvey the land to the Solomon spouses upon payment of eight annual amortizations. Possession was delivered to the spouses. The spouses paid the first six installments but defaulted on the seventh and eighth, due in 1941 and 1942, leaving a balance of P217.23. Both spouses died in 1943, during the war. Delfin Perez, as the sole heir, succeeded to possession.
In 1948, Perez offered to pay the arrears, but the Bank refused, stating the contract was with the original spouses. After securing a judicial declaration of heirship in 1956, Perez again offered to settle the obligation. The Bank, in 1957, provided a statement of account showing a total due of P535.45 and indicated it would release the mortgage upon full payment. However, the Bank later ignored this and instead negotiated with Perez for a new, higher purchase price. When Perez could not match a third-party offer, the Bank sold the land to the spouses Joaquin de Castro and Graciana Pasia in 1959. Perez then sued for specific performance.

ISSUE

The primary issue is whether the Bank was obligated to accept Perez’s tender of payment for the outstanding balance under the “Promesa de Venta” and execute the corresponding deed of sale, or whether it was free to sell the property to third parties.

RULING

The Supreme Court affirmed the Court of Appeals’ decision, ruling in favor of Perez. The legal logic centers on the nature of the “Promesa de Venta” and the Bank’s subsequent conduct. The contract was a contract to sell, where ownership would pass to the vendee only upon full payment. The Bank validly rescinded the contract automatically upon the Solomon spouses’ default, as stipulated. However, the Bank’s actions after Perez, as heir, sought to pay constituted a waiver of this rescission and an estoppel.
Crucially, in 1957, the Bank furnished Perez a statement of account and communicated that upon full payment of P535.45, it would “cause the release of the mortgage.” This act unequivocally recognized the subsisting obligation and treated Perez as the proper party to fulfill it. By inducing Perez to believe he could still purchase the property by paying the stated balance, the Bank cannot later revert to the position that the contract was already rescinded. The Bank is estopped from denying the efficacy of Perez’s right to complete the purchase under the original terms. The subsequent negotiations for a higher price were separate overtures that did not extinguish the earlier, clear commitment. Therefore, Perez was entitled to specific performance by paying the P535.45. The sale to the De Castro spouses was void as against Perez’s superior right. The Bank was ordered to execute the deed of sale to Perez’s heirs and refund the purchase price to the De Castro spouses.