Case Digests (HSBC to Coronel)

1. HSBC v. Spouses Broqueza, G.R. No. 178610, November 17, 2010

HSBC v. Spouses Broqueza

G.R. No. 178610, November 17, 2010

FACTS:

Petitioners Gerong and Broqueza are employees of Hongkong and Shanghai Banking
Corporation (HSBC). They are also members of respondent Hongkong Shanghai Banking
Corporation, Ltd. Staff Retirement Plan.
In October 1990, petitioner Broqueza obtained a car loan in the amount of Php 175,000.00. In
December 1991, she again applied and was granted an appliance loan in the amount of Php
24,000.00.
In 1993, a labor dispute arose between HSBC and its employees. Majority of HSBCs employees
were terminated, among whom are petitioners Editha Broqueza and Fe Gerong.

ISSUE:

Whether or not the claim was premature as the loan obligations have not yet matured

RULING:

No. The Court affirms the findings of the lower courts that there is no date of payment indicated
in the Promissory Notes. The RTC is correct in ruling that since the Promissory Notes do not
contain a period, HSBCL-SRP has the right to demand immediate payment. Article 1179 of the
Civil Code applies: Every obligation whose performance does not depend upon a future or
uncertain event, or upon a past event unknown to the parties, is demandable at once. The
spouses Broquezas obligation to pay HSBCL-SRP is a pure obligation. The fact that HSBCL-
SRP was content with the prior monthly check-off from Editha Broquezas salary is of no
moment. Once Editha Broqueza defaulted in her monthly payment, HSBCL-SRP made a
demand to enforce e a pure obligation.

2. Gaite v. Fonacier, 2 SCRA 830 (1961)

Facts:
Defendant decided to revoke the authority granted by him to Plaintiff to exploit and develop the
mining claims, and plaintiff assented thereto subject to certain conditions. As a result, a
document was executed wherein Plaintiff transferred to Defendant, for the consideration of
P20,000.00, plus 10% of the royalties that Defendant would receive from the mining claims, all
his rights and interests on all the roads, improvements, and facilities in or outside said claims,
the right to use the business name “Larap Iron Mines” and its goodwill, and all the records and
documents relative to the mines. In the same document, plaintiff transferred to Defendant all his
rights and interests over the iron ore, in consideration of the sum of P75,000.00, P10,000.00 of
which was paid upon the signing of the agreement, and the balance of SIXTY-FIVE
THOUSAND PESOS (P65,000.00) will be paid from and out of the first letter of credit covering
the first shipment of iron ores and of the first amount derived from the local sale of iron ore. To
secure the payment of the said balance of P65,000.00, Defendant promised to execute in favor
of Plaintiff a surety bond, and pursuant to the promise. In the subsequent year, Defendant failed
to renew the bond to sureties. Plaintiff, the latter filed the present complaint against them in the
Court of First Instance of Manila (Civil Case No. 29310) for the payment of the P65,000.00
balance of the price of the ore, consequential damages, and attorney’s fees.

Issue:

Whether the obligation of defendants and his sureties to pay Plaintiff become due and
demandable when the former failed to renew the surety bond?

Held:

Yes, the obligation becomes demandable. The provision in the contract was not a condition but
a only a suspensive period or term to the payment of the balance of P65,000.00. What
characterizes a conditional obligation is the fact that its efficacy or obligatory force (as
distinguished from its demandability) is subordinated to the happening of a future and uncertain
event; so that if the suspensive condition does not take place, the parties would stand as if the
conditional obligation had never existed. That the parties to the contract did not intend any such
state of things to prevail. There is no uncertainty that the payment will have to be made sooner
or later; what is undetermined is merely the exact date at which it will be made. By the very
terms of the contract, therefore, the existence of the obligation to pay is recognized; only its
maturity or demandability is deferred. The defendant lose the right of the period when it failed to
renew the surety according to ART. 1198 of the Civil Code.

3. Gonzales vs. Heirs of Thomas

314 SCRA 585 (1999)

FACTS:
On December 1, 1983, Paula Ao Cruz together with the plaintiffs heirs of Thomas and Paula
Cruz, entered into a Contract of Lease/Purchase with the defendant, Felix L. Gonzales, a
certain parcel of land. The defendant Gonzales paid the annual rental on the half-portion of the
property covered by Transfer Certificate of Title No. 12111 in accordance with the second
provision of the Contract of Lease/Purchase and thereafter took possession of the property,
installing thereon the defendant Jesus Sambrano as his caretaker. The defendant Gonzales did
not, however, exercise his option to purchase the property immediately after the expiration of
the one-year lease. He remained in possession of the property without paying the purchase
price provided for in the Contract of Lease/Purchase and without paying any further rentals
thereon.

A letter was sent by one of the plaintiffs-heirs to the defendant Gonzales informing him of the
lessors decision to rescind the Contract of Lease/Purchase due to a breach thereof committed
by the defendant which also served as a demand on the defendant to vacate the premises
within 10 days from receipt of said letter. However, the defendant refused to vacate the property
and continued possession thereof.

Alleging breach of the provisions of the Contract of Lease/Purchase, the plaintiffs filed a
complaint for recovery of possession of the property – subject of the contract with damages,
both moral and compensatory and attorney’s fees and litigation expenses. The defendant
Gonzales filed his answer praying for a dismissal of the complaint filed against him and an
award of moral, exemplary and actual damages, as well as litigation expenses.

The trial court rendered a decision in favor of the defendant. It held that he failure of the
plaintiffs to secure the Transfer Certificate of Title, as provided for in the contract, does not
entitle them to rescind the contract. The plaintiff appealed to the Court of Appeals which
reversed the decision of the Trial Court. Hence, this petition.

ISSUE:

Whether or not the express stipulation of the contract which is to secure the Transfer Certificate
of Title a condition precedent before the petitioner could exercise his option to buy the property.

RULING:

Yes, it is a condition precedent. If a stipulation in a contract admits of several meanings, it shall

be understood as bearing that import most adequate to render it effectual. An obligation cannot
be enforced unless the plaintiff has fulfilled the condition upon which it is premised. Hence, an
obligation to purchase cannot be implemented unless and until the sellers have shown their title
to the specific portion of the property being sold.
We hold that the ninth provision was intended to ensure that respondents would have a valid
title over the specific portion they were selling to petitioner. Only after the title is assured may
the obligation to buy the land and to pay the sums stated in the Contract be enforced within the
period stipulated. Verily, the petitioners obligation to purchase has not yet ripened and cannot
be enforced until and unless respondents can prove their title to the property subject of the
Contract.

Therefore, respondents cannot rescind the contract, because they have not caused the transfer
of the TCT to their names, which is a condition precedent to petitioners obligation. This Court
has held that there can be no rescission (or more properly, resolution) of an obligation as yet
non-existent, because the suspensive condition has not happened.

4. Coronel v. CA, G.R. No. 103577, October 7, 1996

Coronel v. CA

G.R. No. 103577, October 7, 1996

The case arose from a complaint for specific performance filed by private respondent Alcaraz
against petitioners to consummate the sale of a parcel of land in Quezon City. On January 19,
1985, petitioners executed a “Receipt of Down Payment” of P50,000 in favor of plaintiff Ramona
Alcaraz, binding themselves to transfer the ownership of the land in their name from their
deceased father, afterwhich the balance of P1,190,000 shall be paid in full by Alcaraz. On
February 6, 1985, the property was transferred to petitioners. On February 18, 1985, petitioners
sold the property to Mabanag. For this reason, Concepcion, Ramona’s mother, filed an action
for specific performance.

ISSUE: Whether the contract between petitioners and private respondent was that of a
conditional sale or a mere contract to sell

Sale, by its very nature, is a consensual contract because it is perfected by mere consent. In a
contract to sell, the prospective seller explicitly reserves the transfer of title to the prospective
buyer, meaning, the prospective seller does not as yet agree or consent to transfer ownership of
the property subject of the contract to sell until the happening of an event, which for present
purposes we shall take as the full payment of the purchase price. What the seller agrees or
obliges himself to do is to fulfill his promise to sell the subject property when the entire amount
of the purchase price is delivered to him. In other words the full payment of the purchase price
partakes of a suspensive condition, the non-fulfillment of which prevents the obligation to sell
from arising and thus, ownership is retained by the prospective seller without further remedies
by the prospective buyer. A contract to sell may thus be defined as a bilateral contract whereby
the prospective seller, while expressly reserving the ownership of the subject property despite
delivery thereof to the prospective buyer, binds himself to sell the said property exclusively to
the prospective buyer upon fulfillment of the condition agreed upon, that is, full payment of the
purchase price.
It is essential to distinguish between a contract to sell and a conditional contract of sale specially
in cases where the subject property is sold by the owner not to the party the seller contracted
with, but to a third person, as in the case at bench. In a contract to sell, there being no previous
sale of the property, a third person buying such property despite the fulfillment of the suspensive
condition such as the full payment of the purchase price, for instance, cannot be deemed a
buyer in bad faith and the prospective buyer cannot seek the relief of reconveyance of the
property. There is no double sale in such case. Title to the property will transfer to the buyer
after registration because there is no defect in the owner-seller’s title per se, but the latter, of
course, may be used for damages by the intending buyer. In a conditional contract of sale,
however, upon the fulfillment of the suspensive condition, the sale becomes absolute and this
will definitely affect the seller’s title thereto.

The agreement could not have been a contract to sell because the sellers herein made no
express reservation of ownership or title to the subject parcel of land. Furthermore, the
circumstance which prevented the parties from entering into an absolute contract of sale
pertained to the sellers themselves (the certificate of title was not in their names) and not the full
payment of the purchase price. Under the established facts and circumstances of the case, the
Court may safely presume that, had the certificate of title been in the names of petitioners-
sellers at that time, there would have been no reason why an absolute contract of sale could not
have been executed and consummated right there and then. What is clearly established by the
plain language of the subject document is that when the said “Receipt of Down Payment” was
prepared and signed by petitioners Romeo A. Coronel, et al., the parties had agreed to a
conditional contract of sale, consummation of which is subject only to the successful transfer of
the certificate of title from the name of petitioners’ father, Constancio P. Coronel, to their names.

The provision on double sale presumes title or ownership to pass to the first buyer, the
exceptions being: (a) when the second buyer, in good faith, registers the sale ahead of the first
buyer, and (b) should there be no inscription by either of the two buyers, when the second
buyer, in good faith, acquires possession of the property ahead of the first buyer. Unless, the
second buyer satisfies these requirements, title or ownership will not transfer to him to the
prejudice of the first buyer. In a case of double sale, what finds relevance and materiality is not
whether or not the second buyer was a buyer in good faith but whether or not said second buyer
registers such second sale in good faith, that is, without knowledge of any defect in the title of
the property sold. If a vendee in a double sale registers that sale after he has acquired
knowledge that there was a previous sale of the same property to a third party or that another
person claims said property in a pervious sale, the registration will constitute a registration in
bad faith and will not confer upon him any right.