aliman's digest

COMPAÑIA GENERAL DE TABACOS DE FILIPINAS vs. CA, PNB AND DBP

FACTS:

Philippine Milling Company (Francisco Gomez and Hector Torres as the principal and majority stockholder), a domestic corporation which owns and operates in the Mindoro Mill District a sugar mill where all the sugar cane planters of that mill district mill their sugar cane, obtained two loans from the Rehabilitation Finance Corporation (RFC), first executed on August 7, 1950 in the amount of P2,000,000.00 and second on November 2, 1951 in the amount of P1,860,000.00, and as security it executed a deed of mortgage hypothecating to the RFC, particularly described real and personal property, "together with all the buildings and improvements now existing or which may hereafter be constructed on the mortgaged property, all easements, sugar quotas, agricultural or land indemnities, aids or subsidies and all other rights or benefits annexed to or inherent therein, now existing or which may hereafter exist."

Mortgagors also assigned to the RFC on August 16, 1950, in a public instrument, the sugar quota of the mill district aggregating no less than 148,000 piculs and sugar warehouse receipts covering, the first 29,500 piculs of sugar milled by the sugar central annually and such additional sugar as may be necessary to cover the annual amortization of the loan, taking into consideration the fluctuating sugar prices, which assignments shall remain in full force and effect as long as (their) aforementioned loan has not been settled in full.

Another deed of assignment executed on November 2, 1951, this is for the second mortgage, like that of August 16, 1950, supra, respecting "its rights and interests on all the sugar quota of the Mindoro Mill District aggregating no less than 148,000 piculs and additional sugar warehouse receipts covering the first 27,350 piculs of sugar milled by the sugar central annually, and such additional sugar may be necessary to cover the annual amortization on the loan, until the full amount of the additional loan has been fully paid.”

Earlier, or on or about January 13, 1951, the real estate and personal property subject of the two (2) mortgages just described, were again mortgaged by Philippine Milling Co., Francisco M. Gomez and Hector A. Torres, this time in favor of the Philippine National Bank as collateral for a loan of P235,000.00. This real estate and chattel mortgage was amended on April 6, 1951 by increasing its consideration from P235,000.00 to P335,000.00, and still later, on January 18, 1952, by further increasing the consideration to P1,405,0,00.00. The original deed and its two (2) amendments were all registered with the Register of Deeds of Occidental Mindoro.

In July, 1957, two (2) letters-agreements were executed between Gomez & Torres (represented by Francisco M. Gomez) on the one hand, and Theo H. Davies & Co., Ltd. ("for itself and representing [or as authorized representative of) San Carlos Planters' Association"]), on the other, by virtue of which the former sold to the latter a total of 18,000 piculs of the production allowance (or sugar quota) of Plantation No. 30-15, to wit:

1) On July 3, 1957: 8,250 piculs of "our ''A" quota and 1,750.00 piculs of our "B" quota corresponding to Plantation No. 30-15 of the Mindoro Mill District which is duly registered in our name;"  and

2) on July 11, 1957: 6,600.00 piculs of "our "A" quota and 1,400.00 piculs of our "B" quota . . ."

In the later agreement, Gomez & Torres guaranteed "that said 8,000.00 piculs of quotas as well as the 10,000.00 piculs sold to you on July 3, 1957, belong to us and are free from any lien or incumbrance whatsoever."

Eventually, the Development Bank of the Philippines (formerly RFC) caused the extrajudicial foreclosure of its mortgages of August 7, 1950 and November 2, 1951 by the Provincial Sheriff of Occidental Mindoro. On June 17, 1960 — the one-year redemption period granted by law to the mortgagors, having expired without a redemption having been attempted, and the DBP having consolidated its ownership over the real and personal property subject of the mortgage sale — the DBP executed a deed of sale in favor of the PNB covering all the foreclosed property, for P5,147,309.07 and other valuable consideration.

After about two (2) years, in March, 1962, PNB wrote to the San Carlos Planters' Association and the planters to whom the latter had sold portions of the 18,000 piculs of the sugar quota in question, supra, demanding the restoration and delivery to it (the PNB) of their respective portions of said quota. As already mentioned, 25 the 18,000 piculs consisted of 14,850 piculs of 'A' quota and 3,150 piculs of 'B' quota.

When the latter failed to do so, the PNB together with the DBP brought suit in the Court of First Instance of Occidental Mindoro. The Trial Court's judgment, rendered on April 8, 1968, 29 went against the plaintiffs. PNB and Francisco Gomez appealed to the Court of Appeals.

CA modified the Trial Court's judgment as follows:

IN VIEW OF THE FOREGOING CONSIDERATIONS, the judgment appealed from is hereby modified, in these aspects:

1. declaring the Philippine National Bank the owner of the sugar quota or production allowances in question;

2. ordering the defendants-appellees (excepting the defendant-appellee Administrator of the Sugar Quota Office) to reconvey to plaintiff-appellant PNB, the said sugar quota or production allowance in question registered in their names, or if the same cannot now be legally done, directing the defendants-appellees (excepting appellee Administrator of the Sugar Quota Office) to jointly and severally pay to PNB the value of the sugar quota or production allowance in question.

The appealed judgment is hereby affirmed in all other respects.

From this judgment, the Compañia General de Tabacos (TABACALERA) has appealed to this Court.

ISSUES: Is the sale of sugar quota to San Carlos Planters Association valid? What is the classification of sugar quota as a property? Does the disposal or encumbrance of sugar quota need to be registered in the Sugar Quota Administration to be valid?

HELD:

1) The sale is invalid. Theo H. Davies & Co., Ltd., and San Carlos Planters' Association are purchasers in bad faith of the sugar quota in question because they could not be deemed to have no prior knowledge of the encumbrances thereon.

2) The sugar quota an intangible property in question should be considered as real property by destination, "an improvement attaching to the land entitled thereto."

3) The recording in the Registry of Deeds of a mortgage over lands and other immovables operates to charge "the whole world" with notice thereof. The registration therefore of the mortgages executed by the Philippine Milling Company, Hector A. Torres and Francisco Gomez in favor of the RFC and later of the PNB, thus had the effect of charging all persons, including Theo H. Davies & Co., Ltd., San Carlos Planters' Association, and their privies and successors in interest, with notice of the encumbrance, not only over the lands belonging to the mortgagors but also of the sugar quotas as well as "all the buildings and improvements . . . existing or which may hereafter be constructed on the mortgaged property, all; elements, . . . agricultural or land indemnities, aids or subsidies and all other rights or benefits annexed to or inherent therein, now existing or which may hereafter exist." So, none of the parties in this case can plead lack of knowledge of the mortgage lien over the sugar quota or production allowance.

Even if the sugar quota is assumed to be personal, not raid property, and hence not embraced in the mortgage of the immovables created by the corresponding deeds, it would nevertheless still be covered by the chattel mortgage created in and by the same deeds. Since, like the recording of a real estate mortgage, registration of a chattel mortgage also puts all persons on notice of its existence, the legal situation would be exactly the same: the registration of the above described deeds of chattel (and real estate) mortgage over the sugar quota, among other things, would also have charged all persons with notice thereof from the time of such registration.

OPHELIA L. TUATIS, VS. SPOUSES ELISEO ESCOL AND VISMINDA ESCOL

FACTS:

Tuatis and Visminda, entered into a Deed of Sale of a Part of a Registered Land by Installment in the amount of P10,000 under the following terms and conditions:

1.                  That the BUYER [Tuatis] shall pay to the SELLER [Visminda] the amount of THREE THOUSAND PESOS (P3,000.00), as downpayment;

2.                  That the BUYER [Tuatis] shall pay to the SELLER [Visminda] the amount of FOUR THOUSAND PESOS (P4,000.00), on or before December 31, 1989;

3.                  That the remaining balance of THREE THOUSAND PESOS (P3,000.00) shall be paid by the BUYER [Tuatis] to the SELLER [Visminda] on or before January 31, 1990;

4.                  That failure of the BUYER [Tuatis] to pay the remaining balance within the period of three months from the period stipulated above, then the BUYER [Tuatis] shall return the land subject of this contract to the SELLER [Visminda] and the SELLER [Visminda] [shall] likewise return all the amount paid by the BUYER [Tuatis].

Tuatis claimed that she already paid the entire purchase price and in the meantime, took possession of the subject property and constructed a residential building thereon. Tuatis requested Visminda to sign a prepared absolute deed of sale covering the subject property, but the latter refused, contending that the purchase price had not yet been fully paid.

Visminda countered that, except for the P3,000.00 down payment and P1,000.00 installment paid by Tuatis on 19 December 1989 and 17 February 1990, respectively, Tuatis made no other payment to Visminda. Despite repeated verbal demands, Tuatis failed to comply with their agreement. Litigation occurs and the RTC decreed the dismissal of Tuatis' Complaint for lack of merit, the return by Tuatis of physical possession of the subject property to Visminda, and the return by Visminda of the P4,000.00 she received from Tuatis.

Tuatis appeal to the CA however the appellate court dismissed the appeal for failure of Tuatis to serve and file her appellant's brief within the second extended period for the same.

Visminda filed a Motion for Issuance of a Writ of Execution before the RTC on 14 January 2002. The RTC granted Visminda's Motion in a Resolution dated 21 February 2002, and issued the Writ of Execution on 7 March 2002.

Tuatis thereafter filed before the RTC on 22 April 2002 a Motion to Exercise Right under Article 448 of the Civil Code of the Philippines. Tuatis moved that the RTC issue an order allowing her to buy the subject property from Visminda. While Tuatis indeed had the obligation to pay the price of the subject property, she opined that such should not be imposed if the value of the said property was considerably more than the value of the building constructed thereon by Tuatis. Tuatis alleged that the building she constructed was valued at P502,073.00, but the market value of the entire piece of land measuring 4.0144 hectares, of which the subject property measuring 300 square meters formed a part, was only about P27,000.00. Tuatis maintained that she then had the right to choose between being indemnified for the value of her residential building or buying from Visminda the parcel of land subject of the case. Tuatis stated that she was opting to exercise the second option.

ISSUE: Who has the right of choice under article 448 of the civil code?

HELD:

The options under Article 448 are available to Visminda, as the owner of the subject property. There is no basis for Tuatis' demand that, since the value of the building she constructed is considerably higher than the subject property, she may choose between buying the subject property from Visminda and selling the building to Visminda for P502,073.00. Again, the choice of options is for Visminda, not Tuatis, to make. And, depending on Visminda's choice, Tuatis' rights as a builder under Article 448 are limited to the following: (a) under the first option, a right to retain the building and subject property until Visminda pays proper indemnity; and (b) under the second option, a right not to be obliged to pay for the price of the subject property, if it is considerably higher than the value of the building, in which case, she can only be obliged to pay reasonable rent for the same.

The rule that the choice under Article 448 of the Civil Code belongs to the owner of the land is in accord with the principle of accession, i.e., that the accessory follows the principal and not the other way around. Even as the option lies with the landowner, the grant to him, nevertheless, is preclusive. The landowner cannot refuse to exercise either option and compel instead the owner of the building to remove it from the land.

tolentino's case digest

BENJAMIN DY, PETITIONER, VS. HON. COURT OF APPEALS, BIENVENIDO MANALO AND PARAMOUNT DEVELOPMENT BANK, RESPONDENTS. 

Facts:

Bienvenido Manalo purchased Lot 2 and Lot 3 from Paramount Development Bank, the herein other respondent. The Deed of Absolute Sale ^]was duly registered and TCT No. 61529 in the Registry of Deeds of Angeles City was issued in the name of Manalo.

When he went to occupy the said lots pursuant to the above-mentioned contracts, he found that they had been fenced by Benjamin Dy, who claimed to be the owner of the properties.  Manalo then demanded from Paramount that it eject Dy pursuant to its express warranty under the Deed of Absolute Sale. The bank having failed to comply with Manalo's demand, the latter filed a complaint against it in the Regional Trial Court of Angeles City.  Manalo demanded that the defendant make good its warranty under the Deed of Absolute Sale. The trial court held that Paramount  was bound to place Manalo in peaceful possession of Lot 2. In regard to Lot 3, Manalo has the right to suspend the nalance because Paramount violated Article 1461 of the Civil Code. As for Dy, the trial court said that his evidence of ownership was insufficient, consisting as it did only of the two receipts and the deed of sale from his father.  No deed of sale from the Doña Agripina Subdivision was submitted. The intervenor then filed this petition for review with this Court.

Issues:

Whether or not Manalo was in bad faith when he purchased the lots from the Bank because he knew that petitioner had already purchased the lots from the subdivision?

Ruling:

The doctrine that knowledge of the unregistered sale is equivalent to registration is not present here.

The Court has carefully reviewed the transcript of stenographic notes and has found nothing to substantiate the petitioner's gratuitous conclusions.  On the contrary, Manalo testified that he was not aware that there were occupants of the lots when he entered into the contracts with Planters, and that it was only when he went to clear the properties that he came to know of Dy's adverse claim. The trial court believed him, and so do we, relying on its factual finding.  We agree that as Manalo came to know about the petitioner's possession and claim of ownership over the two lots only after he had already bought the land, he cannot be considered a purchaser in bad faith.

It is clear to the Court that the challenged decision is not flawed by reversible error but, on the contrary, conforms to the evidence of record and the applicable law and jurisprudence.

Petition Denied.

JERRY T. MOLES, PETITIONER, VS. INTERMEDIATE APPELLATE COURT AND MARIANO M. DIOLOSA, RESPONDENTS. 

Facts:

Petitioner bought from the private respondent a linotype printing machine for his printing business, the LM Press at Bacolod City. Private respondent informed that the machine was a secondhand but it is functional. On November 29, 1977, petitioner wrote private respondent that the machine was not functioning properly as it needed a new distributor bar. Petitioner filed a suit for rescission of contract against the private respondent. The CA reversed the decision in the trial court, hence this petition.

Issue:

Whether or not there is an implied warranties on secondhand items?

Ruling:

We find merit in petitioner's cause.

Now, when an article is sold as a secondhand item, a question arises as to whether there is an implied warranty of its quality or fitness.  It is generally held that in the sale of a designated and specific article sold as secondhand, there is no implied warranty as to its quality or fitness for the purpose intended, at least where it is subject to inspection at the time of the sale.  On the other hand, there is also authority to the effect that in a sale of secondhand articles there may be, under some circumstances, an implied warranty of fitness for the ordinary purpose of the article sold or for the particular purpose of the buyer.

There is no implied warranty in the sale of secondhand articles.

Said general rule, however, is not without exceptions.  Article 1562 of our Civil Code, which was taken from the Uniform Sales Act, provides:

"Art. 1562.  In a sale of goods, there is an implied warranty or condition as to the quality or fitness of the goods, as follows:

(1)     Where the buyer, expressly or by implication, makes known to the seller the particular purpose for which the goods are acquired, and it appears that the buyer relies on the seller's skill or judgment (whether he be the grower or manufacturer or not), there is an implied warranty that the goods shall be reasonably fit for such purpose;"

WHEREFORE, the judgment of dismissal of the respondent court is hereby REVERSED and SET ASIDE, and the decision of the court a quo is hereby REINSTATED. 

teresita corporal

HEIRS OF PAULINO ATIENZA, NAMELY, RUFINA L. ATIENZA, ANICIA A. IGNACIO, ROBERTO ATIENZA, MAURA A. DOMINGO, AMBROCIO ATIENZA, MAXIMA ATIENZA, LUISITO ATIENZA, CELESTINA A. GONZALES, REGALADO ATIENZA AND MELITA A. DELA CRUZ PETITIONERS, VS. DOMINGO P. ESPIDOL,

This case is about the legal consequences when a buyer in a contract to sell on installment fails to make the next payments that he promised.

Facts:

Petitioner Heirs of Paulino Atienza, namely, Rufina L. Atienza, Anicia A. Ignacio, Roberto Atienza, Maura A. Domingo, Ambrocio Atienza, Maxima Atienza, Luisito Atienza, Celestina A. Gonzales, Regalado Atienza and Melita A. Dela Cruz (collectively, the Atienzas)^[1] own a 21,959 square meters of registered agricultural land at Valle Cruz, Cabanatuan City.^[2]  They acquired the land under an emancipation patent^[3] through the government's land reform program.^[4]

On August 12, 2002 the Atienzas and respondent Domingo P. Espidol entered into a contract called Kasunduan sa Pagbibili ng Lupa na may Paunang-Bayad (contract to sell land with a down payment) covering the property.^[5]  They agreed on a price of P130.00 per square meter or a total of P2,854,670.00, payable in three installments: P100,000.00 upon the signing of the contract; P1,750,000.00 in December 2002, and the remaining P974,670.00 in June 2003. Respondent Espidol paid the Atienzas P100,000.00 upon the execution of the contract and paid P30,000.00 in commission to the brokers.

When the Atienzas demanded payment of the second installment of P1,750,000.00 in December 2002, however, respondent Espidol could not pay it.  He offered to pay the Atienzas P500.000.00 in the meantime,^[6] which they did not accept.  Claiming that Espidol breached his obligation, on February 21, 2003 the Atienzas filed a complaint^[7] for the annulment of their agreement with damages before the Regional Trial Court (RTC) of Cabanatuan City in Civil Case 4451.

In his answer,^[8] respondent Espidol admitted that he was unable to pay the December 2002 second installment, explaining that he lost access to the money which he shared with his wife because of an injunction order issued by an American court in connection with a domestic violence case that she filed against him.^[9]  In his desire to abide by his obligation, however, Espidol took time to travel to the Philippines to offer P800,000.00 to the Atienzas.

Respondent Espidol also argued that, since their contract was one of sale on installment, his failure to pay the installment due in December 2002 did not amount to a breach.  It was merely an event that justified the Atienzas' not to convey the title to the property to him. The non-payment of an installment is not a legal ground for annulling a perfected contract of sale. Their remedy was to bring an action for specific performance.  Moreover, Espidol contended that the action was premature since the last payment was not due until June 2003.


Issues:

1. Whether or not the Atienzas could validly sell to respondent Espidol the subject land which they acquired through land reform under Presidential Decree 27^[15] (P.D. 27);

2. Whether or not the Atienzas were entitled to the cancellation of the contract to sell they entered into with respondent Espidol on the ground of the latter's failure to pay the second installment when it fell due; and

3. Whether or not the Atienzas' action for cancellation of title was premature absent the notarial notice of cancellation required by R.A. 6552.

Ruling:

One.  The Atienzas' title shows on its face that the government granted title to them on January 9, 1990 by virtue of P.D. 27.  This law explicitly prohibits any form of transfer of the land granted under it except to the government or by hereditary succession to the successors of the farmer beneficiary.

Upon the enactment of Executive Order 228^[17] in 1987, however, the restriction ceased to be absolute.  Land reform beneficiaries were allowed to transfer ownership of their lands provided that their amortizations with the Land Bank of the Philippines (Land Bank) have been paid in full.^[18]  In this case, the Atienzas' title categorically states that they have fully complied with the requirements for the final grant of title under P.D. 27.  This means that they have completed payment of their amortization with Land Bank.  Consequently, they could already legally transfer their title to another.

Two.  It is quite evident that the contract involved was one of a contract to sell since the Atienzas, as sellers, were to retain title of ownership to the land until respondent Espidol, the buyer, has paid the agreed price.  Admittedly, Espidol was unable to pay the second installment of P1,750,000.00 that fell due in December 2002.  Here, however, although the Atienzas had no obligation as yet to turn over title pending the occurrence of the suspensive condition, it was implicit that they were under immediate obligation not to sell the land to another in the meantime.  When Espidol failed to pay within the period provided in their agreement, the Atienzas were relieved of any obligation to hold the property in reserve for him.


Although the Atienzas filed their action with the RTC on February 21, 2003, four months before the last installment of P974,670.00 fell due in June 2003, it cannot be said that the action was premature.  Given Espidol's failure to pay the second installment of P1,750,000.00 in December 2002 when it was due, the Atienzas' obligation to turn over ownership of the property to him may be regarded as no longer existing.^[24]  The Atienzas had the right to seek judicial declaration of such non-existent status of that contract to relieve themselves of any liability should they decide to sell the property to someone else.  Parenthetically, Espidol never offered to settle the full amount of the price in June 2003, when the last installment fell due, or during the whole time the case was pending before the RTC.

Three. Notice of cancellation by notarial act need not be given before the contract between the Atienzas and respondent Espidol may be validly declare non-existent.  R.A. 6552 which mandated the giving of such notice does not apply to this case.  The cancellation envisioned in that law pertains to extrajudicial cancellation or one done outside of court,^[25] which is not the mode availed of here.  The Atienzas came to court to seek the declaration of its obligation under the contract to sell cancelled.  Thus, the absence of that notice does not bar the filing of their action.

ABELARDO VALARAO, GLORIOSA VALARAO AND CARLOS VALARAO, PETITIONERS, VS. COURT OF APPEALS AND MEDEN A. ARELLANO.
Article 1592 of the Civil Code applies only to contracts of sale, and not to contracts to sell or conditional sales where title passes to the vendee only upon full payment of the purchase price. Furthermore, in order to enforce the automatic forfeiture clause in a deed of conditional sale, the vendors have the burden of proving a contractual breach on the part of the vendee.

Facts:

"On September 4, 1987, spouses Abelardo and Gloriosa Valarao, thru their son Carlos Valarao as their attorney-in-fact, sold to [Private Respondent] Meden Arellano under a Deed of Conditional Sale a parcel of land situated in the District of Diliman, Q.C., covered by TCT No. 152879 with an area of 1,504 square meters, for the sum of THREE MILLION TWO HUNDRED TWENTY FIVE THOUSAND PESOS (P3,225,000.00) payable under a schedule of payment stated therein.

"In the same Deed of Conditional Sale, the [private respondent] vendee obligated herself to encumber by way of real estate mortgage in favor of [petitioners] vendors her separate piece of property with the condition that upon full payment of the balance of P2,225,000.00, the said mortgage shall become null and void and without further force and effect.

"It was further stipulated upon that should the vendee fail to pay three (3) successive monthly installments or any one year-end lump sum payment within the period stipulated, the sale shall be considered automatically rescinded without the necessity of judicial action and all payments made by the vendee shall be forfeited in favor of the vendors by way of rental for the use and occupancy of the property and as liquidated damages. All improvements introduced by the vendee to the property shall belong to the vendors without any right of reimbursement.

"[Private respondent] appellant alleged that as of September , 1990, she had already paid the amount of [t]wo [m]illion [t]wenty-[e]ight [t]housand (P2,028,000.00) [p]esos, although she admitted having failed to pay the installments due in October and November, 1990. Petitioner, however, [had] tried to pay the installments due [in] the said months, including the amount due [in] the month of December, 1990 on December 30 and 31, 1990, but was turned down by the vendors-[petitioners] thru their maid, Mary Gonzales, who refused to accept the payment offered. [Private respondent] maintains that on previous occasions, the same maid was the one who [had] received payments tendered by her. It appears that Mary Gonzales refused to receive payment allegedly on orders of her employers who were not at home.

"[Private respondent] then reported the matter to, and sought the help of, the local barangay officials. Efforts to settle the controversy before the barangay proved unavailing as vendors-[petitioners] never appeared in the meetings arranged by the barangay lupon.

"[Private respondent] tried to get in touch with [petitioners] over the phone and was able to talk with [Petitioner] Gloriosa Valarao who told her that she [would] no longer accept the payments being offered and that [private respondent] should instead confer with her lawyer, a certain Atty. Tuazon. When all her efforts to make payment were unsuccessful, [private respondent] sought judicial action by filing this petition for consignation on January 4, 1991.

"On the other hand, vendors-[petitioners], thru counsel, sent [private respondent] a letter dated 4 January 1991 notifying her that they were enforcing the provision on automatic rescission as a consequence of which the Deed of Conditional Sale [was deemed] null and void, and xxx all payments made, as well as the improvements introduced on the property, [were] thereby forfeited. The letter also made a formal demand on the [private respondent] to vacate the property should she not heed the demand of [petitioners] to sign a contract of lease for her continued stay in the property .

Issues:

I.whether the requirement of a judicial demand or a notarial act has been fulfilled.

"II Whether the automatic forfeiture clause is valid and binding between the parties."

"III Whether the action for consignation may prosper without actual deposit [in court] of the amount due xxx [so as] to produce the effect of payment."

Ruling:

1.

Art. 1592 of the new Civil Code (Art. 1504 of the old Civil Code) requiring demand by suit or notarial act in case the vendor of realty wants to rescind does not apply to a contract to sell or promise to sell, where title remains with the vendor until" full payment of the price.

In the present case, the Deed of Conditional Sale is of the same nature as a saleoninstallment or a contract to sell, which is not covered by Article 1592.

Petitioners-vendors unmistakably reserved for themselves the title to the property until full payment of the purchase price by the vendee. Clearly, the agreement was not a deed of sale, but more in the nature of a contract to sell or of a sale on installments.^[13] Even after the execution of the Deed of Conditional Sale, the Torrens Certificate of Title remained with and in the name of the vendors.

II.

As a general rule, a contract is the law between the parties.^[15] Thus, "from the moment the contract is perfected, the parties are bound not only to the fulfillment of what has been expressly stipulated but also to all consequences which, according to their nature, may be in keeping with good faith, usage and law."^[16] Also, "the stipulations of the contract being the law between the parties, courts have no alternative but to enforce them as they were agreed [upon] and written, there being no law or public policy against the stipulated forfeiture of payments already made."^[17] However, it must be shown that private respondent-vendee failed to perform her obligation, thereby giving petitioners-vendors the right to demand the enforcement of the contract.

We concede the validity of the automatic forfeiture clause, which deems any previous payments forfeited and the contract automatically rescinded upon the failure of the vendee to pay three successive monthly installments or any one yearend lump sum payment. However, petitioners failed to prove the conditions that would warrant the implementation of this clause.

It is clear that petitioners were not justified in refusing to accept the tender of payment made by private respondent on December 30 and 31, 1990. Had they accepted it on either of said dates, she would have paid all three monthly installments due. In other words, there was no deliberate failure on her part to meet her responsibility to pay.^[18] The Court takes note of her willingness and persistence to do so, and, petitioners cannot now say otherwise. The fact is: they refused to accept her payment and thus have no reason to demand the enforcement of the automatic forfeiture clause. They cannot be rewarded for their own misdeed.

Because their maid had received monthly payments in the past,^[19] it is futile for petitioners to insist now that she could not have accepted the aforementioned tender of payment, on the ground that she did not have a special power of attorney to do so. Clearly, they are estopped from denying that she had such authority. Under Article 1241 of the Civil Code, payment through a third person is valid "[I]f by the creditor's conduct, the debtor has been led to believe that the third person had authority to receive the payment."

III.

It would be inequitable to allow the forfeiture of the amount of more than two million pesos already paid by private respondent, a sum which constitutes two thirds of the total consideration. Because she did make a tender of payment which was unjustifiably refused, we hold that petitioners cannot enforce the automatic forfeiture clause of the contract.