Case Digest: Vitug Dimatulac vs Dolores Coronel, 40 Phil 686

Vitug Dimatulac vs Dolores Coronel, 40 Phil 686

Subject: Obligations and Contracts

FACTS

Upon June 30, 1911, the plaintiff sold the property in question to Dolores Coronel for the sum of P9,000, reserving the privilege to repurchase within the period of five years. The contract contained a provision, commonly found in contracts of this character, converting the vendor into a lessee of the vendee at an agreed rental, payable annually in the months of January and February, and permitting the vendor to retain possession of the property as lessee until the time allowed for repurchase should be past. It was also stipulated that in the event the original vendor (now lessee) should fail to pay the agreed rental for any year of the five, the right to repurchase would be lost and the property consolidated in the vendee.

Under this contract the payment of rent should have begun in the year 1912. The vendor, however, entirely failed in the performance of this obligation and continued in arrears upon account of rent for at least three years. In view of this default Dolores Coronel, the vendee, decided to take advantage of the clause in the contract by which the consolidation of the property was accelerated; and to this end she impleaded Dimatulac in a civil action (No. 1092 of the Court of First Instance of Pampanga) to compel him to surrender the property in question and to pay the past-due rent.

This action was settled by a compromise, which was reduced to writing, approved by the Judge of the Court of First Instance, and entered of record in that action on April 9, 1915. By the terms of this compromise Dimatulac agreed to place at the disposition of Dolores Coronel all the property to which the action related, including the crops already harvested thereon but not yet converted into money; and inasmuch as Dimatulac had already made an agreement with a third person for the sale of the growing cane, Dolores Coronel was authorized to arrange with the buyer as, to the price, to receive the proceeds, and to apply the same to the satisfaction of the past-due rent. In conformity with this agreement Dimatulac surrendered to Dolores Coronel the possession of most, but not all, of the parcels in question, including the crops harvested and to be harvested thereon. Thus, the situation remained until in May of the year 1916 when Dimatulac, through his wife, offered to redeem the entire property under the original contract of sale with pacto de retro, the five years named therein as the period during which repurchase might be effected not having as yet expired. This redemption Dolores Coronel refused to concede, on the ground that the title to the property had become absolute in herself. Thereupon the present action was instituted, as already stated, to compel her to permit redemption.

ISSUE

Whether or not Dolores Coronel is allowed to take over the property, thus consolidating the ownership in her, and at the same time ask for future rentals.

RULING

No. Dolores Coronel is not allowed to have both remedies.

Under the law (Art 1227), the debtor cannot exempt himself from the performance of the obligations by paying the penalty, save in the case where this right has been expressly reserved for him. Neither can the creditor demand the fulfillment of the obligation and the satisfaction of the penalty at the same time, unless this right has been clearly granted him. However, if after the creditor has decided to require the fulfillment of the obligation, the performance thereof should become impossible without his fault, the penalty may be enforced.

In this case, the provision in the contract extinguishing the right of redemption upon the default of the payment of the rentals is in the nature of a penalty clause. According to the law, the general rule is that the creditor cannot demand both the performance of the principal obligation and the forfeiture of the penalty unless such right has been clearly granted to said creditor. In this case no such right was granted. It follows, therefore, that the creditor could not demand both specific performance and the forfeiture of the penalty. The action of the creditor, Dolores Coronel, in taking possession of the property fully shows that she was eager to impose the penalty stipulated upon the contract. She, therefore, has no more right to insist on the payment of the future rentals. As a matter of fact, she had no right even to the past rentals, but evidently the debtor had already waived this by virtue of the compromise agreed upon between Dimatulac and Coronel as regard the past rentals.