LACANILAO V. CA (September 26, 1996)

FACTS:

Respondent Encarnacion owns a parcel of land in Quezon City where a certain Deogracia La Torre built a house. The house was bought by petitioner Lacanilao.

Lacanilao and Encarnacion entered a contract of lease. Encarnacion also leased a portion of the land to another petitioner Cadurnigara. After some time, Encarnacion offered to sell his land to the petitioners for 120K. Since petitioners doesn’t have the money yet, they requested for another month extension.

When the designated time came, petitioners still was not able to produce the payment for the land and as such, Encarnacion sold his property to spouses Acebo. Acebo demanded the petitioners to vacate the lot.

ISSUE:

WON the petitioners have the right to purchase the land over the Acebo spouses.

HELD:

It is well established that where the seller promised to execute a deed of absolute sale upon completion of payment of the purchase price by the buyer, the agreement is a contract to sell. In such a case, failure of payment failure is not really a breach but an event that prevents the obligation of the vendor to convey title.

Petioners also failed to show any evidence to prove that they were ready to fulfill the condition (of full payment) imposed on the obligation to sell.

The verbal offer of Encarnacion to petitioners is also unenforceable under the Stature of Frauds.