314 SCRA 585 (1999)


On December 1, 1983, Paula Ao Cruz together with the plaintiffs heirs of Thomas and Paula Cruz, entered into a Contract of Lease/Purchase with the defendant, Felix L. Gonzales, a certain parcel of land. The defendant Gonzales paid the annual rental on the half-portion of the property covered by Transfer Certificate of Title No. 12111 in accordance with the second provision of the Contract of Lease/Purchase and thereafter took possession of the property, installing thereon the defendant Jesus Sambrano as his caretaker. The defendant Gonzales did not, however, exercise his option to purchase the property immediately after the expiration of the one-year lease. He remained in possession of the property without paying the purchase price provided for in the Contract of Lease/Purchase and without paying any further rentals thereon.

A letter was sent by one of the plaintiffs-heirs to the defendant Gonzales informing him of the lessors decision to rescind the Contract of Lease/Purchase due to a breach thereof committed by the defendant which also served as a demand on the defendant to vacate the premises within 10 days from receipt of said letter. However, the defendant refused to vacate the property and continued possession thereof.

Alleging breach of the provisions of the Contract of Lease/Purchase, the plaintiffs filed a complaint for recovery of possession of the property – subject of the contract with damages, both moral and compensatory and attorney’s fees and litigation expenses. The defendant Gonzales filed his answer praying for a dismissal of the complaint filed against him and an award of moral, exemplary and actual damages, as well as litigation expenses.

The trial court rendered a decision in favor of the defendant. It held that he failure of the plaintiffs to secure the Transfer Certificate of Title, as provided for in the contract, does not entitle them to rescind the contract. The plaintiff appealed to the Court of Appeals which reversed the decision of the Trial Court. Hence, this petition.


Whether or not the express stipulation of the contract which is to secure the Transfer Certificate of Title a condition precedent before the petitioner could exercise his option to buy the property.


Yes, it is a condition precedent. If a stipulation in a contract admits of several meanings, it shall be understood as bearing that import most adequate to render it effectual. An obligation cannot be enforced unless the plaintiff has fulfilled the condition upon which it is premised. Hence, an obligation to purchase cannot be implemented unless and until the sellers have shown their title to the specific portion of the property being sold.
We hold that the ninth provision was intended to ensure that respondents would have a valid title over the specific portion they were selling to petitioner. Only after the title is assured may the obligation to buy the land and to pay the sums stated in the Contract be enforced within the period stipulated. Verily, the petitioners obligation to purchase has not yet ripened and cannot be enforced until and unless respondents can prove their title to the property subject of the Contract.

Therefore, respondents cannot rescind the contract, because they have not caused the transfer of the TCT to their names, which is a condition precedent to petitioners obligation. This Court has held that there can be no rescission (or more properly, resolution) of an obligation as yet non-existent, because the suspensive condition has not happened.

 * Case digest by Frilin Lomosad, LLB-1, Andres Bonifacio Law School, SY 2017-2018