Almocera vs. Ong

Almocera vs. Ong Facts

- Johnny Ong tried to acquire from the defendants a “townhome” described as Unit No. 4 -

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of Atrium Townhomes in Cebu City. As reflected in a Contract to Sell, the selling price of the unit was P3,400,000.00 pesos - to which Johnny Ong was able to pay = 1.060M Prior to full payment - Respondent allege that petitioner and First Builders concealed the fact that before and at the time of the perfection: - property was mortgaged and encumbered to Land Bank -construction of the house has long been delayed and remains unfinished Petitioner asserts that on March 20, 1995, First Builders Multi-purpose Coop. Inc., borrowed money in the amount of P500,000.00 from Tommy Ong, respondent’s brother. This money will be used to finance the documentation requirements of the LBP for the funding of the Atrium Town Homes. This loan will be applied in payment of one (1) town house unit which Tommy Ong may eventually purchase from the project. When the project was under way, Tommy Ong wanted to buy another townhouse for his brother, Johnny Ong, respondent herein, which then, the amount of P150,000.00 was given as additional partial payment. January 10, 1997 - Tommy Ong identified Unit No. 4 as respondent’s chosen unit and again tendered P350,000.00 as his third partial payment. When the contract to sell for Unit 4 was being drafted, Tommy Ong requested that another contract to sell covering Unit 5 be made so as to give Johnny Ong another option to choose whichever unit he might decide to have. Later, Tommy Ong informed then that he will go with Unit 5, but upon knowing that Unit 4 will be sold to another person for 4 million pesos, then the latter informed petitioners that he will choose Unit 4 again. In trying to recover his downpayment, Tommy Ong filed a complaint for damaged with the RTC of Cebu City

RTC’s Decision - FOR RESPONDENT - Petitioners acted in bad faith and did not comply fully with their obligations - Petitioners failed to complete the construction of, as well as deliver to respondent, the townhouse within six months from the signing of the contract. - Respondent was not informed by petitioners at the time of the perfection of their contract that the subject townhouse was already mortgaged to LBP. CA’s Decision - FOR RESPONDENT - Petitioners incurred delay when they failed to deliver the townhouse unit to the respondent within six months from the signing of the contract to sell. - nonpayment of the balance of P2.4M by respondent to defendants was proper in light of such delay and the fact that the property subject of the case was foreclosed and auctioned. ISSUES - WON petitioner has incurred delay in the fulfilment of his obligation. - WON it was proper for respondent not to pay the remaining balance. SC - AFFIRM ruling of CA

- Contract was a CONTRACT TO SELL - ownership of the townhouse has not passed to -

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respondent. Serrano v. Caguiat - contract to sell is akin to a conditional sale where the efficacy or obligatory force of the vendor’s obligation to transfer title 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. The suspensive condition is commonly full payment of the purchase price. It is clear that petitioner and FBMC had the obligation to complete the townhouse unit within six months from the signing of the contract. Upon compliance therewith, the obligation of respondent to pay the balance of P2,400,000.00 arises. The evidence adduced shows that petitioner and FBMC failed to fulfill their obligation -to complete and deliver the townhouse within the six-month period. The contract subject of this case contains reciprocal obligations which were to be fulfilled by the parties, i.e., to complete and deliver the townhouse within six months from the execution of the contract to sell on the part of petitioner and FBMC, and to pay the balance of the contract price upon completion and delivery of the townhouse on the part of the respondent. The obligation of petitioner and FBMC which is to complete and deliver the townhouse unit within the prescribed period, is determinative of the respondent’s obligation to pay the balance of the contract price therefore they cannot insist that respondent comply with his obligation. Where one of the parties to a contract did not perform the undertaking to which he was bound by the terms of the agreement to perform, he is not entitled to insist upon the performance of the other party. Demand is not necessary in the instant case. Demand by the respondent would be useless because the impossibility of complying with their (petitioner and FBMC) obligation was due to their fault. Respondent is justified in refusing to pay the balance of the contract price. He was never in possession of the townhouse unit and he can no longer be its owner since ownership thereof has been transferred to a third person who was not a party to the proceedings below. To allow this would result in the unjust enrichment of petitioner and FBMC. What is worse is the fact that petitioner and FBMC intentionally failed to inform respondent that the subject townhouse which he was going to purchase was already mortgaged to LBP at the time of the perfection of their contract.