Eliseo Joseph v. Spouses Josefina Joseph and Danilo Joseph, G.R. No. 234384, April 26, 2021

FACTS:

Respondents Spouses Joseph and petitioner Eliseo Joseph entered into an Agreement to Sell of the subject property for P225,000.00, with petitioner making a downpayment upon the signing of the contract and the balance shall be paid by petitioner within one year from and after the execution of the contract.

According to petitioner, he was able to fully pay the agreed consideration of the subject property. Petitioner filed a complaint for specific performance against respondents praying that they be ordered to execute a final deed of absolute sale.

Respondents claimed that in addition to the purchase price of P225,000, the parties also agreed for petitioner to pay them an additional amount of P30,000 before a Deed of Absolute Sale may be executed in favor of petitioner.

The RTC ruled in favor of respondents.

The CA denied petitioner's appeal.

 

ISSUE:

Whether the amendment of the contract is valid

 

RULING:

YES. It bears noting that the Agreement to Sell which was entered into by the parties, with an agreed price of P225,000 already amounted to a binding contract between them. It is in the nature of a contract to sell, which is defined as "a bilateral contract whereby the prospective seller, while expressly reserving the ownership of the subject property despite delivery thereof to the prospective buyer, binds himself to sell the said property exclusively to the prospective buyer upon fulfillment of the condition agreed upon, that is, full payment of the purchase price." In a contract to sell, "ownership is retained by the seller and is not to pass until the full payment of the price." It is "commonly entered into so as to protect the seller against a buyer who intends to buy the property in installments by withholding ownership over the property until the buyer effects full payment therefor."

Considering the nature of a contract to sell, which creates a period for the other party to comply with his/her obligation, there still remains a room for negotiation with respect to the terms already agreed upon. Any change in the terms of the agreement cannot however be unilaterally imposed by a single party; the same must be mutually agreed upon by the parties. This is consistent with the characteristic of autonomy of contracts, which allows the parties to establish such stipulations, clauses, terms and conditions as they may deem appropriate provided only that they are not contrary to law, morals, good customs, public order or public policy. The standard norm in the performance of their respective covenants in the contract, as well as in the exercise of their rights thereunder, is expressed in the cardinal principle that the parties in that juridical relation must act with justice, honesty and good faith.

Maintaining the essence of a contract, which is the meeting of the minds of the parties, agreements which may be subsequently entered into by the parties must be consensually agreed upon. As in this case, the purchase price originally agreed upon at P225,000 was increased to P255,000 as stated in the Deed of Absolute Sale.

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