Carrascoso, Jr. v. C.A. 477 SCRA 666, December 14, 2005


In March 1972, El Dorado Plantation, Inc. (El Dorado), through its board member LauroLeviste, executed a Deed of Sale with Fernando Carrascoso, Jr. The subject of the sale was a 1,825 hectare of land. It was agreed that Carrascoso was to pay P1.8M.; that P290, 000.00 would be paid by Carrascoso to PNB to settle the mortgage upon the said land. P210, 000.00 would be paid directly to Leviste. The balance of P1.3M plus 10% interest would be paid over the next 3 years at P519k every 25th of March.

Subsequently, Carrascoso obtained a total of P1.07M as mortgage and he used the same to pay the down payment agreed upon in the contract. Carrascoso defaulted from his obligation which was supposed to be settled on March 25, 1975. Leviste then sent him letters to make good his end of the contract; otherwise, he will be litigated.Meanwhile, El Dorado filed a civil case against Carrascoso.The Regional Trial Court (RTC) ruled in favor of Carrascoso. The Court of Appeals (CA), however, reversed the RTC ruling.


Whether or not the contract entered into by the parties is a contract of sale.


YES. The Court held that the contract executed between El Dorado and Carrascoso was a contract of sale. It was perfected by their meeting of the minds and was consummated by the delivery of the property to Carrascoso. However, El Dorado has the right to rescind the contract by reason of Carrascoso’s failure to perform his obligation.A contract of sale is a reciprocal obligation.  The seller obligates itself to transfer the ownership of and deliver a determinate thing, and the buyer obligates itself to pay therefor a price certain in money or its equivalent. The non-payment of the price by the buyer is a resolutory condition which extinguishes the transaction that for a time existed, and discharges the obligations created thereunder. Also, such failure to pay the price in the manner prescribed by the contract of sale entitles the unpaid seller to sue for collection or to rescind the contract.

Digest Credit: Rhymee Lanuzo


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