327 Phil. 944
DAVIDE, JR., J.:
That defendant Dr. Salazar is the owner of the two (2) parcels of land with improvements thereon located at 2914 Finlandia Street, Makati, Metro Manila and covered by Transfer Certificate of Title Nos. 31038 and 31039 of the Registry of Deeds of Makati; that Dr. Salazar offered to sell his properties to Jonette Borres for One Million Pesos (P1,000,000.00) (TSN pp. 7 and 8, November 5, 1991). The initial proposal took place at the Dimsum Restaurant, Makati, whereby it was proposed that the payment of the consideration was to be made within six (6) months but was objected to by Dr. Salazar and he reduced it to a three (3) months period (TSN, Direct Examination on Jonette Borres p. 22, November 12, 1991); that sometime on [May] 28, 1989, Jonette Borres together with a certain Emilio T. Salazar went to see Dr. Salazar at the latter's residence in Bataan bearing a copy of a Deed of Absolute sale (Exhibit ("C") and Deed of Warranty (Exhibit "D") but Dr. Salazar refused to sign because Jonette Borres did not have the money ready then. In said occasion Dr. Salazar further reduced the period within which plaintiff may purchase the lots, to one (1) month or up to June 30, 1989 (TSN Direct Examination on Jonette Borres November 5, [1991], pp. 10 and 11).
Jonette Borres then met again Dr. Salazar on June 2, 1989 at the Ninoy International Airport who was about to leave for the United States of America where he is a resident. Jonette Borres had with her the Deed of Absolute Sale and asked Dr. Salazar to sign said document. Dr. Salazar reluctantly agreed to sign the document provided that Jonette Borres pays one half (1/2) of the consideration or P500,000.00 in "cash" by June 15, 1989 and the balance was payable on June 30, 1989 (TSN Direct Examination on Emilio A. Salazar, May 21, [1991], p. 9; TSN Cross Examination on Jonette Borres, November 12, [1991], pp. 29 and 30). It was during this occasion that Dr. Salazar again emphasized to Jonette Borres that he needed the money because he was then buying a property in the United States (TSN pp. 15-20, November 5, 1991; pp. 22 and 23, May 21, 1991; and pp. 56-57, May 21, 1991).
Plaintiff agreed to the above conditions (TSN Cross Examination on Jonette Borres November 12, 1989, p. 32) and Dr. Salazar constituted co-defendant Teresa Dizon as custodian at the Deed of Absolute Sale (Exhibit "C") together with the Titles of the Land in question with the instruction to Teresa Dizon not to surrender said documents to Jonette Borres until upon payment of the full price in "cash" (TSN Direct Examination on Emilio A. Salazar, May 21, [1991], p. 11).
On June 14, 1989 Jonette Borres informed defendant Dizon that she will be able to pay the full amount of P1,000,000.00 on June 15, 1989 (TSN Direct Examination Jonette Borres, November 5, [1991], p. 25) and on the next day, she then went to the house of Teresa Dizon to see and get the documents entrusted to her by Dr. Salazar. The documents not being in Dizon's possession, they agreed to meet at Metro Bank West Avenue Branch to get the documents and then to proceed to Makati to meet the plaintiff's business partner a certain Balao who allegedly gave plaintiff a Far East Bank and Trust Company check for the amount of P1,500,000.00 (Exhibit "F") with which to buy the property (TSN Direct Examination on Jonette Borres November 5, [1991], pp. 30, 32 and 33). For some reason or another Jonette Borres and defendant Dizon failed to proceed to Makati.
In the meantime or on June 16, 1992, Dr. Salazar made an overseas call to co-defendant Dizon to inquire if Jonette Borres had already paid the down payment of P500,000.00 and Teresa Dizon replied to Dr. Salazar that Jonette Borres had not paid the down payment. Dr. Salazar then ordered Dizon to stop the sale (TSN Direct Examination on Emilio A. Salazar, May 21, [1991], pp. 12 and 13).
As maybe seen from the evidence presented by the plaintiff and the defendants, the terms and conditions of the agreement for the sale of the two (2) parcels of land owned by Dr. Salazar in favor of the plaintiff Jonette Borres, are that the purchase price is in the amount of P1,000,000.00, fifty percent (50%) of which or P500,000.00 was to be paid on or before June 15, 1989 while the balance thereof was to be paid on or before June 30, 1989 (TSN May 21, 1991, p. 27); that the payment was to be made in "cash" (TSN May 21, 1991, p. 55); that the place of payment is at defendant's bank, Metropolitan Bank Quezon City Branch (TSN October 21, 1991, p. 23).[3]
[s]he was just looking for possible buyers or business partners. First, she requested that the pertinent documents like the Deed of Sale (Exhibit "C") and the corresponding Transfer Certificates of Titles Nos. 31038 and 31039 of the Register of Deeds of Rizal (Exhibits "A" and "B") be entrusted to her even before making the downpayment of P500,000.00 purposely to raise the amount needed. When Dr. Salazar refused her request, Jonette Borres approached a certain businessman P.D. Dionisio for loan and was turned down when Jonette Borres cannot [sic] produce the Deed of Absolute Sale and the Titles of the parcels of land in question (TSN November 5, 1991, pp. 20-25). Then she approached a certain Benjamin Balao a realtor developer. Although Balao had issued to her his check in the amount of P1,500,000.00 (Exhibit "F") he instructed his bank not to honor his check without his presence (TSN November 14, 1991, pp. 81 to 84). Jonette Borres admitted that she was not in a position to encash the check (Exhibit "F") although it was payable to 'cash' (TSN November 21, 1991, pp. 41 and 44).[5]
[o]n June 15, 1989, plaintiff-appellant had a Far East Bank check payable to her order, in the amount of P1,500,000.00--more than the whole agreed purchase price of P1,000,000.00. Defendant-appellee Teresa Dizon agreed (on June 14, 1989) to meet her on June 15, 1989, at Metro Bank West and thereafter to proceed to Makati in order to encash the Far East Bank check. Defendant-appellee Teresa Dizon somehow managed to manipulate things by making herself unavailable so that the payment could not be made on June 15, 1989 (TSN, Nov. 5, 1991, pp. 27-41). On the next day, June 16, 1989, defendant-appellee Teresa Dizon informed plaintiff-appellant that defendant-appellee Dr. Emilio A. Salazar called up in the evening of June 15, 1989 asking whether plaintiff-appellant paid on that day and upon being answered in the negative, said vendor said that he is revoking the contract (TSN, Nov. 5, 1991, pp. 41-42). Defendant-appellee Teresa Dizon having her own interested buyer, evidently acted in bad faith, tried and indeed succeeded to frustrate the efforts of plaintiff-appellant to comply with her reciprocal obligation to pay the agreed purchase price.
The fact that the Far East Bank check was payable to the Order of plaintiff-appellant, and it covers the amount of P1,500,000.00-which is much more than the agreed purchase price of P1,000,000.00-reveals that plaintiff-appellant was financially prepared to comply with her reciprocal obligation. That plaintiff-appellant filed the present suit for specific performance on July 6, 1989, bolsters the fact that she is really willing and able to pay the agreed purchase price. How and from whom she borrowed/obtained the said amount, is of no consequence.[7]
A. x x x in relying on the Deed of Absolute Sale dated May 30, 1989 notwithstanding the fact that:
1. BORRES EXECUTED A DEED OF WARRANTY (EXHS. "D" AND "2") STATING THEREIN THAT UNTIL AND UNLESS THE AMOUNT OF P1,000,000.00 REPRESENTING THE PURCHASE PRICE FOR THAT PARCELS OF LAND COVERED BY TCT NOS. S-31038 AND S-31039 BE PAID BY HER TO SALAZAR, SHE HAS NO RIGHT WHATSOEVER TO THE ORIGINAL COPIES OF THE DEED OF ABSOLUTE SALE AND THAT SHE HAS NO LEGAL RIGHT WHATSOEVER TO ANY AND ALL PERTINENT RECORDS OF THE ABOVE-MENTIONED LOTS;
2. UPON HER BEHEST, BORRES WAS GIVEN A PHOTOCOPY OF THE DEED OF ABSOLUTE SALE BY DIZON BUT ONLY AFTER THE LATTER ERASED THE SIGNATURE OF SALAZAR AS THE VENDEE THEREIN;
3. BORRES HAD NOT PAID ANY PORTION OF THE AGREED PURCHASE PRICE AND THUS RENDERS THE DEED OF ABSOLUTE SALE VOID AB INITIO.
B. x x x in concluding that the agreement between SALAZAR and BORRES is a contract of sale and thus, perfected upon agreement on the subject matter and consideration, notwithstanding the fact that:
1. THE AGREEMENT BETWEEN THE PARTIES IS ESSENTIALLY A CONTRACT TO SELL SUBJECT TO SUSPENSIVE CONDITION, THE BIRTH OR EFFECTIVITY OF WHICH SHOULD TAKE PLACE ONLY IF AND WHEN THE EVENT WHICH CONSTITUTES THE CONDITION HAPPENS OR IS FULFILLED. SINCE BORRES FAILED TO COMPLY WITH HER OBLIGATION, THE AGREEMENT TO SELL BECAME STILLBORN;
2. THERE WAS AN EXPRESS AGREEMENT BETWEEN THE PARTIES THAT BORRES SHALL BE ENTITLED TO THE PROPERTY OR ANY RECORDS PERTAINING THERETO OR ORIGINAL COPIES OF THE DEED OF ABSOLUTE SALE ONLY UPON FULL PAYMENT OF THE PURCHASE PRICE.
C. x x x in holding that DIZON acted in bad faith and succeeded to frustrate the efforts of BORRES to comply with her reciprocal obligation to pay the purchase price notwithstanding the fact that:
1. AT THE TIME THAT BORRES WAS OBLIGED TO PAY AT LEAST 50% OF THE PURCHASE PRICE OR ON JUNE 15, 1989, SHE WAS NOT READY, WILLING AND ABLE TO DO SO. EVEN ASSUMING FOR THE SAKE OF ARGUMENT THAT THE LATTER HAD THE FINANCIAL CAPABILITY TO MEET HER OBLIGATION, THE FACT REMAINS THAT SHE FAILED TO PROPERLY TENDER PAYMENT OF HER OBLIGATION AND IN CASE TENDER OF PAYMENT WAS REFUSED, TO CONSIGN THE SAME IN COURT;
2. DIZON HAD NO REASON TO FRUSTRATE THE EFFORTS OF BORRES TO COMPLY WITH HER OBLIGATION TO PAY THE AGREED PURCHASE PRICE SINCE SHE WAS MERELY CONSTITUTED AS CUSTODIAN OF THE DEED OF ABSOLUTE SALE AND TITLES OF THE PROPERTY WITH SPECIFIC INSTRUCTIONS TO RELEASE THE SAME TO BORRES ONLY UPON RECEIPT OF THE PURCHASE PRICE IN FULL AND IN CASH WITHIN THE AGREED PERIOD.
D. x x x in ordering Dizon to pay Borres the amount of P80,000.00 moral damages; P50,000.00 exemplary damages and P100,000.00 as attorney's fees by way of damages notwithstanding the fact that the evidence adduced before the trial court clearly shows that BORRES had no cause of action against the former.[8]
Q Have you met the owner of the lot mentioned a while ago?
A Yes, your Honor, I met Dr. Salazar, the owner, sometime last week of April, 1989 at Dimsum Restaurant.
Q You met at Dimsum, in what particular place was that?
A We met at Dimsum Restaurant in Makati after I was called by Emilio T. Salazar to meet at Dimsum because Dr. Salazar wanted to sell the property and he wanted to talk to you [sic].
COURT:
Talk to you?
A To discuss the matter of sale to me at Dimsum Sir.
ATTY. BORRES:
Q And so you really met at Dimsum.
A Yes, Ma'am.
Q What transpired at Dimsum?
A Dr. Salazar offered me to buy the properties for a total of ONE MILLION PESOS (P1,000,000.00) excluding all and any other expenses that may be involved in the transfer of the properties in case I am interested to by [sic], in case Atty. Borres wanted to buy.
Q What then was your reply?
A I am interested to buy.
Q Dr. Salazar. . . I asked . . . what did Dr. Salazar say after that?
A I answered Dr. Salazar that I could buy or able to buy the properties within six (6) months because I have to go home to the province to secure a loan.
Q What did Dr. Salazar say regarding your proposal?
A I told Dr. Salazar. Dr. Salazar said that he could not wait for that, six (6) months is a very long time.
Q What else did you say?
A I told Dr. Salazar that "it is possible that I can pay within three (3) months' time if you can lend me the title of your property because banks here in Manila usually release loans in three months' time and I will have less problem to complete the payment of ONE MILLION PESOS (P1,000,000.00)."
Q So, what did Dr. Salazar say?
A Dr. Salazar said that "if it is the best for our transaction I can lend you the title provided I can be assured that the title will not pass on you until you are fully paid.
Q What was your answer then?
A I told Dr. Salazar that I can execute a warranty to the effect that the property could not be transferred to me until I have fully paid him.
Q What did Dr. Salazar say?
A Dr. Salazar said "I will agree to that."
COURT:
Dr. Salazar told you that he is agreeable to the proposal.
A Yes, Dr. Salazar said "you prepare a draft, the necessary document and bring it to Bataan."
ATTY. BORRES:
Q And what was your answer to Dr. Salazar?
A I answered Dr. Salazar that "I will be ever willing to go to, Bataan any time you wanted me to.
Q And you really did go to Bataan.
A Yes, I did.
xxx xxx xxx
ATTY. BORRES:
Q And what happened while there in Bataan?
xxx xxx xxx
Q And what happened while you got all seated in the sala of Dr. Salazar.
A I showed him a document which he instructed me to prepare and he has read and agreed to the Deed of Absolute Sale and the warranty I made. He gave me back the documents for signing.
Q And you did sign the document?
A Yes, I did sign it and passed it on to Dr. Salazar.
Q After you passed it to Dr. Salazar, what happened?
A Dr. Salazar did not sign the document and told me that he is only going to sign it if I am going to pay by the end of June and that he could not lend me the title and he said he is going to sign it and not to give me a copy until the purchase price is fully paid.
Q And what was your reaction with the statement?
A I said "what about the loan that we have agreed at Dimsum if you will not lend me the title and the document that we have signed now?" Dr. Salazar said "I could not lend you the title and I care less how you are going to loan the property and raise the money you are going to pay me, what is important to me is you pay me the whole amount of One Million Pesos (P1,000,000.00) not later than June 30, 1989."
Q And what did you say?
A Since I could not do anything and I really wanted to buy the property, I agreed to Dr. Salazar's condition that I pay the property by the end of June and I will pay only at the bank in Makati.
Q And what did Dr. Salazar say?
A Dr. Salazar said "okey I will sign this and have this notarized but I could not lend you and never have a [copy] of the title as well as the Deed of Sale and you just wait at NAIA and wait if you could have this document because I am leaving on June 2 for the US. You meet me there."
Q And after that what did Dr. Salazar do?
A It was only then that he signed the document after I have agreed to his proposal but he was very much stand [sic] to the payments and he was no longer the same when I met at Dimsum.[13]
1. That until and unless the amount of ONE MILLION (P1,000,000.00) PESOS representing the purchase price for that parcels of land covered by Transfer Certificate of Title Nos. S-31038 and S-31039 be paid by the undersigned unto Dr. Emilio A. Salazar, the undersigned has no absolute right whatsoever to the original copies of the Deed of Absolute Sale executed by said Dr. Emilio A. Salazar dated May ___, 1989;
2. That she has no legal right whatsoever to any and all pertinent records of the aforementioned lots;
3. That upon payment of the aforementioned amount Dr. Emilio A. Salazar or his representative is obliged to surrender the original of these presents together with all the original documents and titles covering the sale of the aforementioned lots unto the undersigned.[14]
has full knowledge of the sales [sic] and conditions of the SELLER-OWNER of the property . . . that the buyer [Borres] has an obligation to pay DR. EMILIO SALAZAR the amount of ONE MILLION PESOS (P1,000,000.00) and that there is already a Deed of Absolute Deed of [sic] Sale in favor of [Borres] of which both copies of the titles of the properties for sale and all documents including the Deed of Absolute Sale aforementioned are under the custody of MS. TERESA DIZON who will only release the Title and the Deed of Absolute Sale after the obligation of [Borres] is fully paid.[16]
In conditional obligations, the acquisition of rights, as well as the extinguishment or loss of those already acquired shall depend upon the happening of the event which constitutes the condition.