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case digests - Pe vs. Intermediate Appellate Court
Pe vs. Intermediate Appellate
Court
195 SCRA 137
FACTS
Plaintiff spouses Francisco and Anita
Pe entered into a contract to sell their 5 parcels of land. These parcels of
land were mortgaged with different banking institutions. Lots Nos. 40 and 41
were mortgaged to the Philippine Veterans Bank (PVB) for P351,162.59; Lots Nos.
42 and 45 were mortgaged to the Development Bank of the Philippines (DBP) for
P189,322.49; and Lot No. 47 to Philippine Commercial and Industrial Bank (PCIB)
for P57,000. On September 20, 1976 , the plaintiffs
executed a contract to sell. The plaintiffs were paid the total amount of
351,162.59 to PVB for lots 40 and 41. On the same date, they executed in favor
of Domingo Sy a deed of sale over Lots Nos. 42 and 45 after payment by the
latter of the former's account with the DBP in the amount of P189,322.49.
Consequently, a contract to sell and a corresponding deed of sale covering Lot
No. 47 were prepared but the deed did not materialize as the buyer’s offer of
P49,454.92, as payment for Lot No. 47, was rejected by the Pe spouses, the
latter insisted on the full payment of their obligation with the (PCIB) in the
amount of P383,615.97 and P620,000 as the alleged consideration stipulated in
the Contract to Sell. Pe allege that the consideration of the Contract to Sell
was P1,544,161.05 and not P620,000.
ISSUE:
Was the contention of the plaintiffs
valid?
RULING:
No. The words of the Contract to Sell
were clear and left no doubt upon the true intention of the contracting
parties. The condition laid down in paragraph (2) of the contract did not
provide for an additional consideration, but only for the manner in which the consideration
was to be applied. It clearly provided that payment shall be applied to
petitioners' obligations with the bank where the respective properties were
mortgaged, and upon their release, petitioners shall execute the final deed of
sale. The subsequent acts of the parties conformed with this condition. Thus,
the parties should be bound by such written contract. It should also be noted
that at the time of the execution of the Contract to Sell, the total obligation
due to the PCIB as regards Lot No. 47 was only P 99,374.89. The rise of the
same obligation to P383,615.96 was brought about by subsequent loans the petitioners
obtained with the same bank for which the tractor and an "Offset
Discharrow" were given as additional security. Contracts are respected as
the law between the contracting parties. The parties may establish such stipulations,
clauses, terms and conditions as they may want to include. As long as such
agreements are not contrary to law, morals, good customs, public policy or public
order, they shall have the force of law between.
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