Parties to a contract of sale have respective obligations to comply with

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Persida Acosta

Persida Acosta

Dear PAO,
The buyer of our house is a relative of my wife. Her family has been staying in that house for almost 27 years without paying us any rent. My wife and I decided to sell the house to her. She was able to secure a loan from PAG-Ibig and we have already executed and signed a contract. However, in order for me to collect from PAG-Ibig and proceed with the execution of the Deed of Sale and the transfer of the title to her name, I need her to sign the Balance Due Notice I sent her. But she has not complied up to now. I also informed her that she needs to pay the balance of the total contract price, which was indicated in the contract, but to no avail. What can we do? My wife and I are already under a lot of stress. Can we evict her from our property if she fails to pay the balance?
Reynaldo

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Dear Reynaldo,
Both parties to a contract of sale have respective obligations to comply with, not only pursuant to the stipulations indicated under the contract of sale, but also in consonance with the pertinent provisions of our laws.

Since your contract with your wife’s relative specifically binds her to pay the balance of the contract price, she has no other recourse but to fulfill the said obligation when the same becomes due and demandable. If she fails to conform thereto, you, being the vendor, have remedies under the law.

However, we want to emphasize that seeking for her eviction is not the proper legal route for you and your wife to take. Rather, you may extrajudicially demand from your buyer for the rescission of your contract with the payment of damages, if you have incurred any. As provided for under Article 1191 of the New Civil Code of the Philippines, “The power to rescind obligations is implied in reciprocal ones, in case one of the obligors should not comply with what is incumbent upon him. x x x The injured party may choose between the fulfillment and the rescission of the obligation, with the payment of damages in either case. He may also seek rescission, even after he has chosen fulfillment, if the latter should become impossible. x x x The court shall decree the rescission claimed, unless there be just cause authorizing the fixing of the period. x x x “

Nevertheless, you will be required to return whatever you have received by reason of the said contract because rescission does not only entail the termination of the contract but also creates the obligation on the part of both the obligor and the obligee to return the object of the contract. In the case of Velarde vs. Court of Appeals, 361 SCRA 57, July 11, 2001, the Supreme Court ruled that rescission “x x x can be carried out only when the one who demands rescission can return whatever he may be obliged to restore. To rescind is to declare a contract void at its inception and to put an end to it as though it never was. It is not merely to terminate it and release the parties from further obligations to each other, but to abrogate it from the beginning and restore the parties to their relative positions as if no contract has been made. x x x”

Accordingly, if the buyer refuses to heed your demand to rescind the contract and voluntarily return the house, you must seek for the rescission of your contract before the court. It will be the discretion of the court whether to grant your petition or grant the buyer sufficient time so as to allow her to comply with her obligation of paying you the balance of the contract price.

We hope that we were able to answer your queries. Please be reminded that this advice is based solely on the facts you have narrated and our appreciation of the same. Our opinion may vary when other facts are changed or elaborated.

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