In October 1986, Josie and here-in respondent, Inocencio Tan, went to the

home of herein petitioner, Fernando Mate. Josie asked for the help of Mate from
prosecution by Tan under BP 22 for issuing rubber checks she issues amounting to
roughly P4.4m , she proposed that Mate cede three of his properties to Tan. Mate
immediately rejected the proposal, but was later persuaded and executed a deed of
sale with four conditions:
1. The amount to be stated in the document is P1,400,000.00 with interest
thereon at 5% a month
2. The properties will be repurchased within six (6) months or on or before
April 4, 1987
3. Although it would appear in the document that petitioner is the vendor, it
is Josie who will provide the money for the redemption of the properties
with her own fund
4. Titles to the properties will be delivered to private respondent but the sale
will not be registered in the Register of Deeds and annotated on the titles
As an assurance, Josie executed two checks with amounts of 1.4m and 420k, both
postdated in December 1986. However, come January 1987, when petitioner
attempted to deposit the said checks, both were dishonored for having been drawn
from closed accounts. Mate filed a case against Josie for violation of BP 22, but she
could no longer be found. To protect his rights, Mate filed for Annulment of Contract
with Damages against Tan.
RTC/CA
Ruled in favor of Tan, and ruled that it finds the Deed of Sale with Right of
Repurchase from October 6, 1986, valid and binding. Since the redemption period
has ended, ownership has automatically transferred to the defendant, Inocencio
Tan. The Register of Deeds is ordered to update the records to reflect this transfer
and issue new titles to Tan, canceling the current titles held by Fernando T. Mate and
his wife.
Petitioner now argues that there was no perfected contract of sale for lack of
consideration, because no money changed hands at the time he signed and the
checks executed by Josie were all dishonored.
ISSUE
Whether there was a valid contract of sale.
RULING
YES, The contention is without merit. While petitioner did not receive the P1.4
Million purchase prices from respondent Tan, he had in his possession a postdated
check of Josie Rey in an equivalent amount precisely to repurchase the two lots on
or before the sixth month.
As admitted by petitioner, by virtue of the sale with pacto de retro , Josie Rey gave
him, as vendor-a-retro, a postdated check in the amount of P1.4 Million, which
represented the repurchase price of the two (2) lots. Aside from the P1.4 Million
check, Josie gave another postdated check to petitioner in the amount of
P420,000.00, ostensibly as interest for six (6) months but which apparently was his
fee for having executed the pacto de retro document. Josie thus assumed the
responsibility of paying the repurchase price on behalf of petitioner to private
respondent.
BPI v. Sanchez
G.R. No. 179518 | November 19, 2014
FACTS
Respondents Vicente Victor C. Sanchez (Vicente), Kenneth Nereo Sanchez
and Imelda C. V da. De Sanchez., were owners of a 900 sqm. parcel of land in
Quezon City.
In 1988, Garcia, a co-respondent, sent a letter to Sanchez offering to buy the
property for P1.8m under four conditions:
A few weeks later, Felisa Yap (Yap), the widow of Kenneth Nereo
Sanchez, and Garcia had a meeting, wherein they agreed to sell the property under
four conditions:
1. Garcia will buy the property for 1.85m payable in cash immediately after
occupants vacate the property
2. Garcia will pay an initial amount of 50,000 creditable to the total amount.
3. Garcia will take care of all necessary documents for the transfer of title.
For this purpose, the original owner’s copy of Transfer Certificate of Title,
the copy of the application for the reconstitution of title of the property,
and copies of receipts of real estate taxes were to be entrusted to
defendant Garcia
4. Lastly, Garcia will be responsible for the demolition of the property and
sell the scraps thereof for not less than 50,000 to be given to the
Sanchez’s.
Afterwards, despite not yet paying, Garcia required the occupants to vacate,
assigned his own caretaker with the strict instruction to not let anyone enter,
demolished the old house, and later posted advertisement for the construction of a
townhouse.
Vicente was later informed that he can pickup the checks in Garcia’s office,
six postdated checks were given to Vicente, and in order to properly document the
check payments an agreement was executed.
IMPORTANT STIPULATION: “If any of the checks bounce, the
First and Second Parties can choose to cancel the contract. In that
case, they will lose the ₱50,000 earnest money and can keep the
amount for damages caused by demolition, which cannot exceed
₱290,000. Any remaining proceeds from the checks will be returned to
the Third Party.”
 Thereafter, 4 of the 6 checks were honored, however, the last 2 amounting to
800,000 were dishonored due to lack of funds, Yap requested the same to be
replaced, which was unheeded.
Later, Yap informed Garcia that she will opt to rescind the agreement, Yap
offered 2 manager’s checks each at 300,000, which Garcia refused.
To protect their interest, Yap contacted several agencies, such as HLURB, City
Building Official, and Register of Deeds. That they were to be informed before acting
on any transactions with regard to the subject property.
Yap and Vicente later filed a complaint for recission of contract before the
RTC.
Meanwhile, Garcia managed to cause the cancellation of TCT 156254 (in the
name of Vicente) and its replacement with TCT 383697 in the name of TSEI. It was
later revealed that Garcia was able to sell multiple units. By presenting the new TCT
free of any
The RTC declared that the Sanchezes have the right to rescind the Agreement
they entered into with Garcia and TSEI under proviso no. 6 of the Agreement. In
fact, the RTC enunciated that because the Agreement is in the nature of a contract
to sell, the ownership over the subject property remained with the Sanchezes as the
suspensive condition––that the check payments shall be honored––was not complied
with. Thus, the RTC concluded that there was not even any need for rescission in
this case.
Whether Garcia acted in bad faith. (YES)
The Court agrees with both the RTC and the CA that Garcia and/or TSEI are
builders in bad faith. They knew for a fact that the property still belonged to the
Sanchezes and yet proceeded to build the townhouses not just without the authority
of the landowners, but also against their will.
Article 1191 The power to rescind obligations is implied in reciprocal ones, in
case one of the obligors should not comply with what is incumbent upon him.
The injured party may choose between the fulfillment and the rescission of
the obligation, with the payment of damages in either case. He may also seek
rescission, even after he has chosen fulfillment, if the latter should become
impossible.