sample problem

Tuatis bought a 300-square meter land from Visminda for P10,000 on installment basis. She paid only P4,000. The condition of the sale is that she will pay a down payment of P3,000 and the balance shall be paid on monthly installment until the whole consideration is paid.

Meanwhile, Tuatis built a P500,000 worth of house on said strip.

As Tuatis did not pay the whole amount, Visminda the owner of the lot, demanded that Tuatis should vacate the land, and remove her concrete house thereon.

Tuatis on the other hand, demanded that she will pay the balance price of P6,000 but Visminda refused to receive the amount, as another buyer is willing to buy the land at P300,000.

Accordingly, Vizminda has two options. What are these two options under the law? Discuss each option.

ANSWER:

Taking into consideration the provisions of the Deed of Sale by Installment and Article 448 of the Civil Code, Visminda has the following options:

Under the first option, Visminda may appropriate for herself the building on the subject property after indemnifying Tuatis for the necessary and useful expenses the latter incurred for said building, as provided in Article 546 of the Civil Code.

Under the second option, Visminda may choose not to appropriate the building and, instead, oblige Tuatis to pay the present or current fair value of the land. The P10,000.00 price of the subject property, as stated in the Deed of Sale on Installment , shall no longer apply, since Visminda will be obliging Tuatis to pay for the price of the land in the exercise of Visminda’s rights under Article 448 of the Civil Code, and not under the said Deed. Tuatis’ obligation will then be statutory, and not contractual, arising only when Visminda has chosen her option under Article 448 of the Civil Code.

Still under the second option, if the present or current value of the land, the subject property herein, turns out to be considerably more than that of the building built thereon, Tuatis cannot be obliged to pay for the subject property, but she must pay Visminda reasonable rent for the same. Visminda and Tuatis must agree on the terms of the lease; otherwise, the court will fix the terms.