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Part I
SALES
(Title VI, Arts. 1458-1637)
INTRODUCTION
Governing law.
The provisions of the Code of Commerce relating to sales have been repealed by the Civil Code. (Art.* 2270[2].) Today, sales are governed by the provisions of the Civil Code on the subject. (Book IV, Title VI, Arts. 1458-1637.) The distinction between the so-called civil sales and commercial sales is eliminated.
The provisions of the Civil Code on Obligations (Title I, Arts. 1156-1304.) and Contracts (Title II, Arts. 1305-1422.) are applica- ble to the contract of sale, but Articles 1458 to 1637 are special rules which are peculiar to sales alone.
Sources of our law on sales.
(1) The Philippine law on sales, as it exists today, is an admix- ture of civil law and common law principles. According to the Code Commission:
“A majority of the provisions of the Uniform Sales Law which is in force in 31 States and Territories of the American Union have been adopted in the Civil Code with modifications to suit the principles of Philippine Law.” (Report of the Code Commission, p. 60.)
*Unless otherwise indicated, refers to article in the Civil Code.
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In incorporating some provisions of the Uniform Sales Act of the United States, the Commission states:
“This incorporation of a goodly number of American rules on sale of goods has been prompted by these reasons: (1) The present [old] Code does not solve questions aris- ing from certain present-day business practices. Among them are: the sale of “future goods” (Art. 1482.); sale of goods by description or by sample (Art. 1501.); when goods are deliv- ered “on sale or return” (Art. 1522.); sale of goods by negotia- tion or transfer of a document of title (Arts. 1527 to 1540.); and the rights of the unpaid seller of goods. (Arts. 1545 to 1555.)^1 (2) The present Code fails to regulate many incidents and aspects of delivery and acceptance of goods, of warranty of title and against hidden defects, and of payment of the price. (3) It is probable that a considerable portion of the foreign trade of the Philippines will continue for many years with the United States. In order to lessen misunderstanding between the merchants on both sides of the Pacific, their transactions should, as far as possible, be governed by the same rules. This desirable condition will not only facilitate trade but will also perpetuate sentiments of esteem and goodwill between the two peoples. It is but a truism to say that fair and mutually beneficial trade incalculably enhances international friend- ship.” ( Ibid. , pp. 60-61.) (2) In addition: “The Title on ‘Sales’ has been enriched by the addition of new provisions based on the opinions of commentators (Arts. 1479, 1480, 1481, 1485, 1490, 1491, 1497, 1498, 1512, 1516, 1558, 1561, 1569, 1570, 1571.^2 ) and on judicial decisions (Arts. 1486, 1487.^3 ) and of new rules adopted with modifications to suit the philosophy and framework of Philippine Law, from the Uniform Sales Act of
(^1) The articles mentioned are now Arts. 1462, 1481, 1502, 1507-1520, 1525-1935, re- spectively, in the new Code. (^2) Now, Arts. 1459, 1460, 1461, 1465, 1470, 1471, 1477, 1478, 1492, 1496, 1538, 1541, 1549, 1550, 1551, respectively. (^3) Now, Arts. 1466, 1467, respectively.
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Chapter 1
NATURE AND FORM OF THE
CONTRACT
ART. 1458. By the contract of sale one of the con- tracting parties obligates himself to transfer the own- ership of and to deliver a determinate thing, and the other to pay therefor a price certain in money or its equivalent. A contract of sale may be absolute or conditional. (1445a)
Concept of contract of sale.
The contract of sale is an agreement whereby one of the parties (called the seller or vendor) obligates himself to deliver something to the other (called the buyer or purchaser or vendee) who, on his part, binds himself to pay therefor a sum of money or its equivalent (known as the price).
Under the Spanish Civil Code, the contract was referred to as a contract of “purchase and sale.” As every “sale” necessarily presupposes a “purchase,” this name was regarded as redundant. Hence, the name of Title VI has been simplified by calling it “sales” and the name of the contract has been changed for the same rea- son to “contract of sale.” (Report of the Code Commission, p. 141.)
“It is required in the proposed Code that the seller trans- fers the ownership of the thing sold. (Arts. 1458, 1459, 1495, 1547.) In the present Code (Art. 1445.), his obligation is merely to deliver the thing, so that even if the seller is not the owner, he may validly sell, subject to the warranty (Art. 1474.) to maintain the buyer in the legal and peaceful possession of the
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thing sold. The Commission considers the theory of the present law unsatisfactory from the moral point of view.” (Ibid.)
Characteristics of a contract of sale.
The contract of sale is: (1) Consensual , because it is perfected by mere consent with- out any further act;
(2) Bilateral,^1 because both the contracting parties are bound to fulfill correlative obligations towards each other — the seller, to deliver and transfer ownership of the thing sold and the buyer, to pay the price;
(3) Onerous, because the thing sold is conveyed in considera- tion of the price and vice versa (see Gaite vs. Fonacier, 2 SCRA 820 [1961].);
(4) Commutative, because the thing sold is considered the equivalent of the price paid and vice versa. (see Ibid .) However, the contract may be aleatory^2 as in the case of the sale of a hope ( e.g. , sweepstakes ticket);
(5) Nominate, because it is given a special name or designa- tion in the Civil Code, namely, “sale”; and
(6) Principal, because it does not depend for its existence and validity upon another contract.
ILLUSTRATIVE CASES:
- Trial Court decided that there was no payment by buyer of lumber covered by invoices of seller but Court of Appeals held that
(^1) Obligations are bilateral when both parties are mutually bound to each other. They are reciprocal when the performance one is designed to be the equivalent and the condi- tion for the performance of the other. In a contract of sale, in the absence of any stipula- tion, the obligations of the seller and buyer are reciprocal, the obligation or promise of each party is the cause or consideration for the obligation or promise by the other. The reciprocal obligations would normally be, in the case of the buyer, the payment of the agreed price and in the case of the seller, the fulfillment of certain express warranties. (^2) Art. 2010. By an aleatory contract, one of the parties or both reciprocally bind them- selves to give or to do something in consideration of what the other shall give or do upon the happening of an event which is uncertain, or which is to occur at an indetermi- nate time.
Art. 1458 NATURE AND FORM OF THE CONTRACT
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Subsequently, B revoked the authority granted by him to S who assented thereto subject to certain conditions. As a result, a document was executed wherein S transferred to B all of S’s rights and interests over the “24 tons of iron ore, more or less” that S had already extracted from the mineral claims in consid- eration of the sum of P75,000.00, P10,000.00 of which was paid upon the signing of the agreement, and “the balance of P65,000.00 will be paid from and out of the first letter of credit covering the first shipment of iron ores and of the first amount derived from the local sale of iron ore” from said claims. To secure the payment of the balance, B executed in favor of S a surety bond. No sale of approximately 24,000 tons of iron ore had been made nor had the balance of P65,000.00 been paid to S. Issue: Is the shipment or local sale of the iron ore a condi- tion precedent (or suspensive condition) to the payment of the balance, or only a suspensive period or term? Held: (1) Obligation of B one with a term. — The words of the contract express no contingency in the buyer’s obligation to pay. There is no uncertainty that the payment will have to be made sooner or later; what is undetermined is merely the exact date at which it will be made. By the very terms of the contract, therefore, the existence of the obligation to pay is recognized; only its maturity or demandability is deferred. Furthermore, to subordinate B’s obligation to the sale or shipment of the ore as a condition precedent would be tanta- mount to leaving the payment at his discretion (Art. 1182.), for the sale or shipment could not be made unless he took steps to sell the ore. (2) A contract of sale is normally commutative and onerou s. — In a contract of sale, not only does each one of the parties as- sume a correlative obligation, but each party anticipates per- formance by the other from the very start. Nothing is found in the record to evidence that S desired or assumed to run the risk of losing his right over the ore with- out getting paid for it, or that B understood that S assumed any such risk. This is proved by the fact that S insisted on a bond to guarantee the payment of the P65,000.00 and the fact that B did put such bond, indicated that he admitted the definite exist- ence of his obligation to pay the balance of P65,000.00. The only
Art. 1458 NATURE AND FORM OF THE CONTRACT
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rational view that can be taken is that the sale of the ore to B was a sale on credit, and not an aleatory contract, where the transferor, S, would assume the risk of not being paid at all by B. (Gaite vs. Fonacier, 2 SCRA 830 [1961].)
Essential requisites of a contract of sale.
The rules of law governing contracts in general are applica- ble to sales. Like every contract, “sale” has the following requi- sites or elements:
(1) Consent or meeting of the minds. — This refers to the con- sent on the part of the seller to transfer and deliver and on the part of the buyer to pay. (see Art. 1475.) The parties must have legal capacity to give consent and to obligate themselves. (Arts. 1489, 1490, 1491.) The essence of consent is the conformity of the parties on the terms of the contract, the acceptance by one of the offer made by the other. The contract to sell is a bilateral contract. Where there is merely an offer by one party without the accept- ance of the other, there is no consent. (Salonga vs. Farrales, 105 SCRA 359 [1981].) The acceptance of payment by a party is an indication of his consent to a contract of sale, thereby precluding him from rejecting its binding effect. (Clarin vs. Rulova, 127 SCRA 512 [1984].)
There may, however, be a sale against the will of the owner in case of expropriation (see Art. 1488.) and the three different kinds of sale under the law, namely: an ordinary execution sale (see Rules of Court, Rule 39, Sec. 15.), judicial foreclosure sale ( Ibid ., Rule 68.), and extra-judicial foreclosure sale. (Act No. 3135, as amended.) A different set of law applies to each class of sale mentioned. (see Fiestan vs. Court of Appeals, 185 SCRA 751 [1990].)
The sale of conjugal property requires the consent of both the husband and the wife. The absence of the consent of one renders the sale null and void (see Art. 124, Family Code.) while the vitia- tion thereof (see Art. 1390.) makes it merely voidable. (Guiang vs. Court of Appeals, 95 SCAD 264, 290 SCRA 372 [1998].)
(2) Object or subject matter. — This refers to the determinate thing which is the object of the contract. (Art. 1460.) The thing must be
Art. 1458
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The absence of any of the above essential elements negates the existence of a perfected contract of sale.^3 Sale, being a consen- sual contract (see Art. 1475.), he who alleges it must show its ex- istence by competent proof. (Dizon vs. Court of Appeals, 302 SCRA 288 [1999].)
Natural and accidental elements.
The above are the essential elements of a contract of sale or those without which no sale can validly exist. They are to be dis- tinguished from:
(1) Natural elements or those which are deemed to exist in cer- tain contracts, in the absence of any contrary stipulations, like warranty against eviction (Art. 1548.) or hidden defects (Art. 1561.); and
(2) Accidental elements or those which may be present or ab- sent depending on the stipulations of the parties, like conditions, interest, penalty, time or place of payment, etc.
ILLUSTRATIVE CASES:
- Supposed sale was evidenced by a receipt acknowledging re- ceipt of P1,000.00. Facts: B bought on a partial payment of P1,000.00, evidenced by a receipt, a portion of a subdivision from S, administrator of the testate estate of his deceased spouse. Subsequently, S was authorized by the court to sell the subdivision. In the mean- time, PT Co. became the new administrator. It sold the lot to another which sale was judicially approved. B files a complaint which seeks, among other things, for the quieting of title over the lot in question. Issue: Was there a valid and enforceable sale to B? Held: No. An examination of the receipt reveals that the same can neither be regarded as a contract of sale nor a prom-
(^3) When a contract of sale is void, the possessor is entitled to keep the fruits during the period for which he held the property in good faith. Good faith of the possessor ceases when an action to recover possession of the property is filed against him and he is served summons therefor. (Development Bank of the Phils. vs. Court of Appeals, 316 SCRA 650 [1999]; see Arts. 526, 528.)
Art. 1458
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ise to sell. There was merely an acknowledgment of the sum P1,000.00. There was no agreement as to the total purchase price of the land nor to the monthly installments to be paid by B. The requisites for a valid contract of sale are lacking. (Leabres vs. Court of Appeals, 146 SCRA 158 [1986].) ———— ———— ————
- Buyer did not sign draft of Contract to Sell because it cov- ered seven (7) lots instead of six (6), but sent to seller five (5) checks as down payment which the seller did not encash. Facts: B Company and S, subdivision developer, agreed to enter into a new Contract to Sell whereby S will sell seven (7) lots at P423,250.00 with a down payment of P42,325.00 and the balance payable in 48 monthly installments of P7,395.94. The draft of the Contract to Sell prepared by S was sent to B Com- pany but B’s president did not sign it although he sent five (5) checks covering the down payment totalling P27,542.72. S re- ceived the checks but did not encash it because B’s president did not sign the draft contract, the reason given by the latter was that the draft covered seven (7) lots instead of six (6). Since no written contract was signed, S sued B to recover possession of the lots still occupied by the latter. Issues: (1) May the unsigned draft be deemed to embody the agreement between the parties? (2) May the receipt of the five (5) checks by S serve to pro- duce the effect of tender of down payment by B? Held: (1) Based on the facts, the parties had not arrived at a definite agreement. The only agreement they arrived at was the price indicated in the draft contract. The number of lots to be sold was a material component of the Contract to Sell. With- out an agreement on the matter, the parties may not in any way be considered as having arrived at a contract under the law. (2) Moreover, since the five (5) checks were not encashed, B should have deposited the corresponding amount of the said checks as well as the installments agreed upon. A contract to sell, as in this case, involves the performance of an obligation, not merely the exercise of a privilege or a right. Consequently, performance or payment may be effected not by tender of pay- ment alone but by both tender and consignation. It is consigna- tion which is essential to extinguish B’s obligation to pay the balance of the purchase price. (see Arts. 1256-1258.) B did not
Art. 1458 NATURE AND FORM OF THE CONTRACT
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has received the purchase price to prove his claim with clear and convincing evidence. A notarized document is evidence of high character. (Diaz vs. Court of Appeals, 145 SCRA 346 [1986].)
An action to declare a contract void or inexistent does not prescribe. (Art. 1410.)
Transfer of title to property for a price, essence of sale. (1) Obligations to deliver and to pay. — The transfer of title to property or agreement to transfer title for a price actually paid or promised, not a mere physical transfer of the property, is the es- sence of sale. (see Ker & Co., Ltd. vs. Lingad, 38 SCRA 524 [1971]; see Gardner vs. Court of Appeals, 131 SCRA 585 [1984]; Santos vs. Court of Appeals, 337 SCRA 67 [2000].) But neither is the de- livery of the thing bought nor the payment of the price necessary for the perfection of the contract of sale. Being consensual, it is perfected by mere consent. (See Art. 1475.) However, where the seller can no longer deliver the object of the sale to the buyer be- cause the latter has already acquired title and delivery thereof from the rightful owner, such contract may be deemed to be in- operative and may thus fall, by analogy, under Article 1409(5) of the Civil Code: “those which contemplate an impossible service,’’ since delivery of ownership is no longer possible. (Nool vs. Court of Appeals, 84 SCAD 941, 276 SCRA 149 [1997]; Heirs of San Miguel vs. Court of Appeals, 364 SCRA 523 [2001].)
It is only upon the existence of the contract of sale that the seller is obligated to transfer ownership to the buyer and the buyer, to pay the purchase price to the seller. (Chua vs. Court of Ap- peals, 401 SCRA 54 [2003].) In defining the contract of sale, Arti- cle 1458 merely specifies the obligations of the parties to transfer ownership and to pay under the contract. The parties will have these obligations even without Article 1458.
ILLUSTRATIVE CASE: Spouses exchanged their properties for no par shares of a corpo- ration as a result of which they gained control of the corporation. Facts: Spouses H & W, stockholders of DT Corporation, con- veyed to said DT a parcel of land leased to E, in exchange for
Art. 1458 NATURE AND FORM OF THE CONTRACT
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2,500 shares of stock equivalent to 55% majority in the corpora- tion. E questioned the transaction on the ground that it was not given the first option to buy the leased property pursuant to the proviso in the lease agreement. Issue: Is the “deed of exchange” a contract of sale which, in effect, prejudiced E’s right of first refusal over the leased prop- erty? Held: No. In effect, DT Corporation is a business conduit of H and W. What they really did was to invest their properties and change the nature of their ownership from unincorporated to incorporated form by organizing DT to take control of their properties and at the same time save on inheritance taxes. The deed of exchange cannot be considered a contract of sale. There was no transfer of actual ownership interests by H and W to a third party. They merely changed their ownership from one form to another. The ownership remained in the same hands. Hence, E has no basis for its claim of a right of first refusal un- der the lease contract. (Delpher Trades Corporation vs. Intermedi- ate Appellate Court, 157 SCRA 349 [1988].) (2) Where transfer of ownership not intended by the parties. — A contract for the sale or purchase of goods/commodity to be delivered at a future time, if entered into without the intention of having any goods/commodity pass from one party to an- other, but with an understanding that at the appointed time, the purchaser is merely to receive or pay the difference between the contract and the market prices, is illegal. Such contract falls under the definition of what is called “futures” in which the parties merely gamble on the rise or fall in prices and is de- clared null and void by law.^4 ( Onapal Philippines Commodities, Inc. vs. Court of Appeals, 218 SCRA 281 [1993] .)
Kinds of contract of sale.
(1) As to presence or absence of conditions. — A sale may be either:
(^4) Art. 2018. If a contract which purports to be for the delivery of goods, securities or shares of stock is entered into with the intention that the difference between the price stipulated and the exchange or market price at the time of the pretended delivery shall be paid by the loser to the winner, the transaction is null and void. The loser may re- cover what he has paid.
Art. 1458
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However, a sale denominated as a “Deed of Conditional Sale’’ is still absolute where the contract is devoid of any pro- viso that title is reserved or the right to unilaterally rescind is stipulated, e.g., until or unless the price is paid. (Heirs of Juan San Andres vs. Rodriguez, 332 SCRA 769 [2000].) The delivery of the thing sold does not transfer title until the condition is fulfilled. Where the condition is imposed, in- stead, upon the perfection of the contract the failure of such condition would prevent such perfection (Galang vs. Court of Appeals, 43 SCAD 737, 225 SCRA 37 [1993]; Roque vs. Lapuz, 96 SCRA 741 [1980]; Babasa vs. Court of Appeals, 94 SCAD 679, 290 SCRA 532 [1998].) or the juridical relation itself from com- ing into existence. If the condition is imposed on an obligation of a party ( e.g., ejection by the vendor of squatters within a certain period before delivery of property) not upon the perfection of the contract itself, which is not complied with, the other party may either refuse to proceed or waive said condition. (see Art. 1545; Romero vs. Court of Appeals, 65 SCAD 621, 250 SCRA 223 [1995].) The stipulation that the “payment of the full consid- eration [of a parcel of land] shall be due and payable in five (5) years from the execution of a formal deed of sale’’ is not a condition which affects the efficacy of the contract of sale. It merely provides the manner by which the full consideration is to be computed and the time within which the same is to be paid. (Heirs of Juan San Andres vs. Rodriguez, supra .) Simi- larly, the mere fact that the obligation of the buyer to pay the balance of the purchase price was made subject to the condition that the seller first deliver the reconstituted title of the house and lot sold does not make the contract a contract to sell for such condition is not inconsistent with a contract of sale. (Laforteza vs. Machuca, 127 SCAD 798, 333 SCRA 643 [2000].) (2) Other kinds. — There are, of course, other kinds of sale depending on one’s point of view, e.g. , as to the nature of the sub- ject matter (real or personal, tangible or intangible), as to manner of payment of the price (cash or installment), as to its validity (valid, rescissible, unenforceable, void), etc.
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Contract of sale and contract to sell with reserved title distinguished. At this stage, it would be desirable to point out that there are distinctions between the two contracts.
(1) Transfer of title. — In a contract of sale, title passes to the buyer upon delivery of the thing sold, while in a contract to sell (or of “exclusive right and privilege to purchase”), where it is stipulated that ownership in the thing shall not pass to the pur- chaser until he has fully paid the price (Art. 1478.), ownership is reserved in the seller and is not to pass until the full payment of the purchase price. In the absence of such stipulation, especially where the buyer took possession of the property upon execution of the contract, indicates that what the parties contemplated is a contract of absolute sale.
(2) Payment of price. — In the first case, non-payment of the price is a negative resolutory condition (see Art. 1179.), and the remedy of the seller is to exact fulfillment or to rescind the con- tract (see Arts. 1191, 1592.), while in the second case, full payment is a positive suspensive condition, the failure of which is not a breach, casual or serious, of the contract but simply an event that prevents the obligation of the vendor to convey title from acquir- ing binding force. (Manvel vs. Rodriguez, 109 Phil. 1 [1960]; Roque vs. Lapuz, 96 SCRA 741 [1980]; Jacinto vs. Kaparaz, 209 SCRA 246 [1992]; Adelfa Properties, Inc. vs. Court of Appeals, 58 SCAD 462, 240 SCRA 565 [1995].) Where the seller promises to execute a deed of absolute sale upon full payment of the purchase price, the agree- ment is a contract to sell. (Rayos vs. Court of Appeals, 434 SCRA 365 [2004].)
(3) Ownership of vendor. — Being contraries, their effect in law cannot be identical. In the first case, the vendor has lost and can- not recover the ownership of the thing sold and delivered, actu- ally or constructively (see Art. 1497.), until and unless the con- tract of sale itself is resolved and set aside. In the second case, however, the title remains in the vendor if the vendee does not comply with the condition precedent of making payment at the time specified in the contract. (see Heirs of P. Escanlar vs. Court of Appeals, 88 SCAD 532, 281 SCRA 176 [1997]; People’s Indus- trial and Commercial Corporation vs. Court of Appeals, 281 SCRA
Art. 1458 NATURE AND FORM OF THE CONTRACT
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veys unto the VENDEE x x x” the property in question as of December 22, 1971, the date of said document.” In paragraph 5 thereof, it is provided that “should the VENDEE prior to the full payment of all the amounts afore- mentioned, decide to sell or to assign part or all of the afore- mentioned parcel of land, the VENDOR shall be informed in writing and shall have the option to repurchase the property x x x. Should the VENDOR herein decide to repurchase and the property is sold or transferred to a third person, the balance of the consideration herein still due to the VENDOR shall consti- tute automatically a prior lien on the consideration to be paid by the third person to herein VENDEE.” Issue: Is the above instrument a contract to sell? Held: No. (1) Title to land transferred to vendee. — “It is a deed of sale in which title to the subject land was transferred to the vendee as of the date of the transaction, notwithstanding that the purchase price had not yet been fully paid at that time. Under the first-cited stipulation, what is deferred is not the transfer of ownership but the full payment of the purchase price, which is to be made in installments, on the dates indicated. Under the second stipulation, it is recognized that the vendee may sell the property even ‘prior to full payment of all the amounts aforementioned,’ which simply means that although the purchase price had not yet been completely paid, the vendee had already become the owner of the land. As such, he could sell the same subject to the right of repurchase reserved to the vendor.” (2) Right of vendor where land sold by vendee. — “In fact, the contract also provides for the possibility of the vendee selling the property to a third person, in which case the vendor, if she wishes to repurchase the land, shall have a lien on any balance of the consideration to be paid by the third person to the vendee.” (Filoil Marketing Corp. vs. Intermediate Appellate Court, 169 SCRA 293 [1989].) ———— ———— ————
- The sale of scrap iron is subject to the condition that the buyer will open a letter of credit in favor of the seller for P250,000. on or before May 15, 1983. Facts: In May 1, 1983, B (buyer) and S (seller) entered into a contract entitled “Purchase and Sale of Scrap Iron” whereby S
Art. 1458 NATURE AND FORM OF THE CONTRACT
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bound itself to sell the scrap iron upon the fulfillment by B of his obligation to make or indorse an irrevocable and uncondi- tional letter of credit not later than May 15, 1983. On May 17, 1983, B, through his men, started to dig and gather scrap iron at S’s premises. S cancelled the contract be- cause of B’s alleged non-compliance with the essential precon- ditions among which is the opening of the letter of credit. It appeared that the opening of the letter of credit was made on May 26, 1983 by a corporation which was not a party to the contract, with a bank not agreed upon, and was not irrevocable and unconditional, for it was without recourse and stipulated certain conditions. In his complaint, B, private respondent, prayed for judg- ment ordering S, petitioner corporation, to comply with the contract and to pay damages. Issue: Is the transaction between S and B a mere contract to sell or promise to sell, and not a contract of sale? Held: (1) The contract is not one of sale. — “The petitioner corporation’s obligation to sell is unequivocally subject to a positive suspensive condition, i.e. , the private respondent’s opening, making or indorsing of an irrevocable and uncondi- tional letter of credit. The former agreed to deliver the scrap iron only upon payment of the purchase price by means of an irrevocable and unconditional letter of credit. Otherwise stated, the contract is not one of sale where the buyer acquired owner- ship over the property subject to the resolutory condition that the purchase price would be paid after delivery. Thus, there was to be no actual sale until the opening, making or indorsing of the irrevocable and unconditional letter of credit. Since what obtains in the case at bar is a mere promise to sell, the failure of the private respondent to comply with the positive suspensive condition cannot even be considered a breach — casual or seri- ous — but simply an event that prevented the obligation of petitioner corporation to convey title from acquiring binding force.” (2) The obligation of the petitioner corporation to sell did not arise. — “Consequently, the obligation of the petitioner corpo- ration to sell did not arise; it, therefore, cannot be compelled by specific performance to comply with its prestation. In short, Article 1191 of the Civil Code does not apply; on the contrary, pursuant to Article 1597 of the Civil Code, the petitioner cor-
Art. 1458
