Enriquez v. Ramos
REITERATIONFacts
The Antecedents: Plaintiffs-appellants Rodrigo Enriquez, Aurea Soriano de Dizon, and Urbano Dizon, Jr. sold 20 subdivision lots in Quezon City to defendant-appellee Socorro A. Ramos for P235,056. Of this amount, P35,056 was paid, leaving a balance of P200,000 payable within two years from the execution of the deed of sale, with interest. To secure the balance, Ramos executed a deed of mortgage on several parcels of land. The deed stipulated that the mortgagor shall pay taxes and discharge assessments on the property, and that the entire obligation becomes due and demandable if the mortgage cannot be registered. It also granted the mortgagee the right to extra-judicial foreclosure if the mortgagor fails to pay or perform any condition. Procedural History: In a previous case (G.R. No. L-18077), this Court upheld the trial court's finding that the actual price was P185,056 and that the two-year period for payment would only commence upon the construction of roads as per Quezon City ordinances. Minor issues like non-payment of taxes and non-registration of the Bulacan property mortgage were deemed sufficiently explained by the defendant-appellee. The Petition: In the present case, the plaintiffs-appellants charged that the defendant-appellee had not paid the P200,000 balance despite the completion of roads on May 9, 1960. They also alleged the non-registration of the Bulacan mortgage and non-payment of realty taxes from 1959 to 1963. The defendant-appellee admitted non-payment of taxes and non-registration but invoked res judicata. She also admitted non-payment of the P200,000, contending the roads were not completed according to Ordinance No. 2999 of Quezon City, as trees were not planted and water facilities were not installed, and that no prior notice or demand for payment was made.
Issue(s)
Whether the construction of the roads was completed in accordance with Quezon City ordinances. Whether the planting of trees and installation of water facilities are conditions precedent for the completion of the roads. Whether the acceptance by the Administrative Agency is a condition precedent for the completion of the roads. Whether the filing of the case constitutes sufficient notice and demand for payment.
Ruling
The Supreme Court set aside the order of the Court of First Instance and rendered judgment ordering the defendant-appellee to pay the plaintiffs-appellants the unpaid balance, stipulated interest, attorney's fees, and costs. Should payment not be made within ninety (90) days from finality of the decision, the mortgaged properties shall be sold at public auction.
Ratio Decidendi
On the issue of whether the construction of the questioned roads has already been completed in accordance with the ordinances of Quezon City: The Court found sufficient evidence to support the plaintiffs-appellants' position. Testimonies from the construction superintendent and counsel corroborated that the roads were built according to Quezon City ordinances, including concrete curbs, gutters, and asphalted pavement. The construction was completed on May 9, 1960, and the defendant-appellee had inspected the work during its progress. A certificate of turnover was issued. An ocular inspection report from the Quezon City Engineer's Office confirmed the presence of curbs, gutters, and drainage facilities, with asphalted roads, although final testing and approval by the office had not been undertaken. The parties stipulated that such final testing and approval were only required if the roads were to be donated to the city government, and there was no law mandating such donation. On the issue of whether the planting of trees and installation of water facilities are conditions precedent for the completion of the roads: The Court held that these requirements were not within the contemplation of the parties. Firstly, these activities involve substantial costs that would have been mentioned in the deed of sale if they were conditions. Secondly, these requirements are imposed on the subdivision owner, and it was established in the prior case (L-18077) that the defendant-appellee intended to develop the lots into a subdivision. Thirdly, no evidence was presented to show these were part of the parties' agreement. Fourthly, Ordinance No. 2969 does not indicate that streets are considered incomplete without water facilities or tree planting, as these are segregable from road construction. On the issue of whether the acceptance by the Administrative Agency is a condition precedent for the completion of the roads: The Court found this argument to be overly technical and without merit. Ordinance No. 2969 does not state that acceptance by the agency is a prerequisite for a street to be considered constructed in accordance with the ordinance. The evidence presented, including the engineer's report and the parties' stipulation regarding donation, sufficiently established the completion of the roads in a practical and legal sense for the purpose of the contract. On the issue of whether the filing of the case constitutes sufficient notice and demand for payment: The Court ruled that the filing of the foreclosure case served as sufficient notice to the defendant-appellee of the road completion and the plaintiffs-appellants' demand for payment. Citing Article 1187 of the Civil Code, the Court stated that the effects of a conditional obligation, once the condition is fulfilled, retroact to the date of the constitution of the obligation. Therefore, the defendant-appellee's obligation to pay the P200,000 balance, which was conditioned on the completion of the roads, became demandable upon such completion, and the lawsuit served as the demand.
Main Doctrine
The filing of a case for foreclosure is sufficient notice of the completion of a condition precedent for payment, and the effects of the obligation retroact to the date of its constitution once the condition is fulfilled.