Filinvest v. Phil. Acetylene Digest, G.R. No. L-50449

Special Form of Payment - Dacion

Filinvest v. Phil. Acetylene

G.R. No. L-50449 January 30, 1982

Facts:

Phil. Acetylene (Defendant) purchased a vehicle through a Deed of Sale from Alexander Lim payable on installment. The balance is to be paid under a promissory note with the said vehicle as the subject of a chattel mortgage to secure the obligation. Subsequently, Lim assigned his rights to the vehicle to appellee corporation (Filinvest). Phil. Acetylene defaulted after it failed to pay nine (9) successive installments. The petitioner through a demand letter informed the defendant to make the full payment plus interests and charges or return the mortgaged property. As a result, the defendant returned the vehicle together with the document "Voluntary Surrender with Special Power of Attorney To Sell" by appellant on March 12, 1973 and confirmed to by Filinvest’s vice-president.

Filinvest then informed appellant thru a letter that it cannot sell the vehicle due to its unpaid taxes in the amount of P70,122. On the last portion of the said letter, appellee requested the appellant to update its account by paying the instalments in arrears and accruing interest in the amount of P4,232.21 on or before April 9, 1973. On May 8, 1973, appellee, in a letter, offered to deliver back the motor vehicle to the appellant but the latter refused to accept it, so the appellee instituted an action for collection of a sum of money with damages in the CFI of Manila.

Phil. Acetylene argued that appellee has no cause of action against it since its obligation towards the appellee was extinguished when it returned the mortgaged property, and that assuming that the return of the property did not extinguish its obligation, it was nonetheless justified in refusing payment since the appellee is not entitled to recover the same due to the breach of warranty committed by the original vendor-assignor Alexander Lim.

Issue: whether or not the return of the mortgaged motor vehicle to the appellee by virtue of a voluntary surrender by the appellant totally extinguished and/or cancelled the obligation

RULING: No. No dacion en pago here since there’s nothing in the evidence to show that Filinvest consented or intended that the mere delivery to and acceptance by him of the vehicle be construed as actual payment or more specifically, dacion en pago. The mere return of the mortgaged motor vehicle by the mortgagor (herein appellant) to the mortgagee, (appellee), does not constitute dation in payment or dacion en pago in the absence, express or implied of the true intention of the parties. Dacion en pago, (according to Manresa) is the transmission of the ownership of a thing by the debtor to the creditor as an accepted equivalent of the performance of obligation.  In dacion en pago, as a special mode of payment, the debtor offers another thing to the creditor who accepts it as equivalent of payment of an outstanding debt. The undertaking really partakes in one sense of the nature of sale, that is, the creditor is really buying the thing or property of the debtor, payment for which is to be charged against the debtor's debt. As such, the essential elements of a contract of sale, namely, consent, object certain, and cause or consideration must be present. In its modern concept, what actually takes place in dacion en pago is an objective novation of the obligation where the thing offered as an accepted equivalent of the performance of an obligation is considered as the object of the contract of sale, while the debt is considered as the purchase price.  In any case, common consent is an essential prerequisite, be it sale or innovation to have the effect of totally extinguishing the debt or obligation.

The evidence fails to show that Filinvest consented, or at least intended, that the mere delivery to, and acceptance by him, of the mortgaged motor vehicle be construed as actual payment, more specifically dation in payment or dacion en pago. The fact that the mortgaged motor vehicle was delivered to him does not necessarily mean that ownership thereof, as juridically contemplated by dacion en pago, was transferred from appellant to appellee. In the absence of clear consent of appellee to the proferred special mode of payment, there can be no transfer of ownership of the mortgaged motor vehicle from appellant to appellee. If at all, only transfer of possession of the mortgaged motor vehicle took place, for it is quite possible that appellee, as mortgagee, merely wanted to secure possession to forestall the loss, destruction, fraudulent transfer of the vehicle to third persons, or its being rendered valueless if left in the hands of the appellant.

Finally the Voluntary Surrender with SPA to Sell executed reveals that the possession of the mortgaged motor vehicle was voluntarily surrendered by the appellant to the appellee authorizing the latter to look for a buyer and sell the vehicle in behalf of the former who retains ownership thereof, and to apply the proceeds of the sale to the mortgage indebtedness, with the undertaking of the appellant to pay the difference, if any, between the selling price and the mortgage obligation. With the stipulated conditions as stated, the appellee, in essence was constituted as a mere agent to sell the motor vehicle which was delivered to the appellee, not as its property. There is no estoppel on part of Filinvest to demand payment from the unpaid obligation since it never accepted the mortgaged motor vehicle in cull satisfaction of the mortgaged debt.

Aranas v. Tutaan Digest

Payment or Performance

Aranas v Tutaan

127 SCRA 828

Facts: The stocks of Universal Textile Mills (UTEX) were issued to co-defendants Manuel and Castaneda. Subsequently, in 1971, the lower court declared that Luisa Aranas is the rightful owner of the 400 shares of stocks at Universal Textile Mills (UTEX. Further, it ordered that dividends in cash or stocks pertaining to the same be delivered to Aranas. UTEX then filed a motion to clarify the phrase in said decision which states “to deliver to her all dividends appertaining to the same, whether in cash or in stocks” meant dividends properly pertaining to the plaintiffs after the court’s declaration of her ownership. The said motion was granted, where the court ordered UTEX to pay the plaintiff the cash dividends which accrued to the stocks in question after the current decision was rendered but the cash dividends already paid to the co-defendants before the court decision may not be claimed by the plaintiffs.

The co-defendants filed for a new trial  and the decision was the same as the the 1971 ruling. Upon appeal to the CA, the said ruling was affirmed. The lower court issued a writ of execution in 1979 directed to UTEX to 1) cancel the certificate of stocks of the co-defendants and issue new ones in the name of the petitioners, and 2) Pay the cash dividends accrued from 1972 to 1979 (period from the new trial to the issuance of writ of execution). UTEX alleged that the cash dividends had already  been paid.

ISSUE: Whether or not there was valid payment

RULING: No. It is elementary that payment made by a judgment debtor to a wrong party cannot extinguish the obligation of such debtor to its creditor. It was clear in the motion for clarification that all dividends accruing to the said shares after the rendition of judgement belonged to the Aranas. When UTEX paid the wrong parties, despite its knowledge and understanding of the final judgment, it is still liable to pay Aranas as the lawful declared owners of the said shares. The burden to recover the wrong payment is on UTEX and cannot be passed on to the Aranas as the innocent parties.

Eleizegui v. The Manila Lawn Tennis Club Digest G.R. No. 967

Eleizegui v. The Manila Lawn Tennis Club

G.R. No. 967 May 19, 1903

Facts:

A contract of lease was executed on January 25, 1980 over a piece of land owned by the plaintiffs Eleizegui (Lessor)  to the Manila Lawn Tennis Club, an English association (represented by Mr. Williamson) for a fixed consideration of P25 per month and accordingly, to last at the will of the lessee. Under the contract, the lessee can make improvements deemed desirable for the comfort and amusement of its members. It appeared that the plaintiffs terminated the lease right on the first month. The defendant is in the belief that there can be no other mode of terminating the lease than by its own will, as what they believe has been stipulated.

As a result the plaintiff filed a case for unlawful detainer for the restitution of the land claiming that article 1569 of the Civil Code provided that a lessor may judicially dispossess the lessee upon the expiration of the conventional term or of the legal term; the conventional term — that is, the one agreed upon by the parties; the legal term, in defect of the conventional, fixed for leases by articles 1577 and 1581. The Plaintiffs argued that the duration of the lease depends upon the will of the lessor on the basis of Art. 1581 which provides that, "When the term has not been fixed for the lease, it is understood to be for years when an annual rental has been fixed, for months when the rent is monthly. . . ." The second clause of the contract provides as follows: "The rent of the said land is fixed at 25 pesos per month."

The lower court ruled in favor of the Plaintiffs on the basis of Article 1581 of the Civil Code, the law which was in force at the time the contract was entered into. It is of the opinion that the contract of lease was terminated by the notice given by the plaintiff. The judgment was entered upon the theory of the expiration of a legal term which does not exist, as the case requires that a term be fixed by the courts under the provisions of article 1128 with respect to obligations which, as is the present, are terminable at the will of the obligee.

ISSUE: a) Whether or not the parties have agreed upon the duration of the lease

             b) Whether or not the lease depends upon the will of the lessee

RULING:

a)      YES, the parties have agreed upon a term hence Art. 1581 is inapplicable.

The legal term cannot be applied under Art 1581 as it appears that there was actually an agreement between the parties as to the duration of the lease, albeit implied that the lease is to be dependent upon the will of the lessee. It would be absurd to accept the argument of the plaintiff that the contract was terminated at its notice, given this implication.

Interestingly, the contract should not be understood as one stipulated as a life tenancy, and still less as a perpetual lease since the terms of the contract express nothing to this effect, even if they implied this idea. If the lease could last during such time as the lessee might see fit, because it has been so stipulated by the lessor, it would last, first, as long as the will of the lessee — that is, all his life; second, during all the time that he may have succession, inasmuch as he who contracts does so for himself and his heirs. (Art. 1257 of the Civil Code.) The lease in question does not fall within any of the cases in which the rights and obligations arising from a contract can not be transmitted to heirs, either by its nature, by agreement, or by provision of law. Moreover, being a lease, then it must be for a determinate period. (Art. 1543.) By its very nature it must be temporary, just as by reason of its nature, an emphyteusis must be perpetual, or for an unlimited period. (Art. 1608.)

B) The duration of the lease does not depend solely upon the will of the Lessee (defendant).

It cannot be concluded that the termination of the contract is to be left completely at the will of the lessee simply because it has been stipulated that its duration is to be left to his will.

The Civil Code has made provision for such a case in all kinds of obligations. In speaking in general of obligations with a term it has supplied the deficiency of the former law with respect to the "duration of the term when it has been left to the will of the debtor," and provides that in this case the term shall be fixed by the courts. (Art. 1128, sec. 2.) In every contract, as laid down by the authorities, there is always a creditor who is entitled to demand the performance, and a debtor upon whom rests the obligation to perform the undertaking. In bilateral contracts the contracting parties are mutually creditors and debtors. Thus, in this contract of lease, the lessee is the creditor with respect to the rights enumerated in article 1554, and is the debtor with respect to the obligations imposed by articles 1555 and 1561. The term within which performance of the latter obligation is due is what has been left to the will of the debtor. This term it is which must be fixed by the courts.

The only action which can be maintained under the terms of the contract is that by which it is sought to obtain from the judge the determination of this period, and not the unlawful detainer action which has been brought — an action which presupposes the expiration of the term and makes it the duty of the judge to simply decree an eviction. To maintain the latter action it is sufficient to show the expiration of the term of the contract, whether conventional or legal; in order to decree the relief to be granted in the former action it is necessary for the judge to look into the character and conditions of the mutual undertakings with a view to supplying the lacking element of a time at which the lease is to expire.

The lower court’s judgement is erroneous and  therefore reversed and the case was remanded with directions to enter a judgment of dismissal of the action in favor of the defendant, the Manila Lawn Tennis Club.

Telefast v. Castro Digest G.R. No. 73867

Telefast v. Castro

G.R. No. 73867 February 29, 1988

Facts:

1. The petitioner is a company engaged in transmitting telegrams. The plaintiffs are the children and spouse of Consolacion Castro who died in the Philippines. One of the plaintiffs, Sofia sent a telegram thru Telefast to her father and other siblings in the USA to inform about the death of their mother. Unfortunately, the deceased had already been interred but not one from the relatives abroad was able to pay their last respects. Sofia found out upon her return in the US that the telegram was never received. Hence the suit for damages on the ground of breach of contract. The defendant-petitioner argues that it should only pay the actual amount paid to it.
2. The lower court ruled in favor of the plaintiffs and awarded compensatory, moral, exemplary, damages to each of the plaintiffs with 6% interest p.a. plus attorney’s fees.  The Court of Appeals affirmed this ruling but modified and eliminated the compensatory damages to Sofia and exemplary damages to each plaintiff, it also reduced the moral damages for each. The petitioner appealed contending that, it can only be held liable for P 31.92, the fee or charges paid by Sofia C. Crouch for the telegram that was never sent to the addressee, and that the moral damages should be removed since defendant's negligent act was not motivated by "fraud, malice or recklessness.

Issue: Whether or not the award of the moral, compensatory and exemplary damages is proper.

RULING: Yes, there was a contract between the petitioner and private respondent Sofia C. Crouch whereby, for a fee, petitioner undertook to send said private respondent's message overseas by telegram. Petitioner failed to do this despite performance by said private respondent of her obligation by paying the required charges. Petitioner was therefore guilty of contravening its and is thus liable for damages. This liability is not limited to actual or quantified damages. To sustain petitioner's contrary position in this regard would result in an inequitous situation where petitioner will only be held liable for the actual cost of a telegram fixed thirty (30) years ago.

Art. 1170 of the Civil Code provides that "those who in the performance of their obligations are guilty of fraud, negligence or delay, and those who in any manner contravene the tenor thereof, are liable for damages." Art. 2176 also provides that "whoever by act or omission causes damage to another, there being fault or negligence, is obliged to pay for the damage done."

Award of Moral, compensatory and exemplary damages is proper.

The petitioner's act or omission, which amounted to gross negligence, was precisely the cause of the suffering private respondents had to undergo.  Art. 2217 of the Civil Code states: "Moral damages include physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation, and similar injury. Though incapable of pecuniary computation, moral damages may be recovered if they are the proximate results of the defendant's wrongful act or omission."

Then, the award of P16,000.00 as compensatory damages to Sofia C. Crouch representing the expenses she incurred when she came to the Philippines from the United States to testify before the trial court. Had petitioner not been remiss in performing its obligation, there would have been no need for this suit or for Mrs. Crouch's testimony.

The award of exemplary damages by the trial court is likewise justified for each of the private respondents, as a warning to all telegram companies to observe due diligence in transmitting the messages of their customers.

Palay Inc. v. Clave Digest G.R. No. L-56076

Palay Inc. v. Clave

G.R. No. L-56076 September 21, 1983

Facts:

1.       On March 28, 1965, petitioner Palay, Inc., through its President, Albert Onstott sold a parcel of land owned by the corporation to the private respondent, Nazario Dumpit, by virtue of a Contract to Sell. The sale price was P23,300.00 with 9% interest per annum, payable with a down payment of P4,660.00 and monthly instalments of P246.42 until fully paid. Paragraph 6 of the contract provided for automatic extrajudicial rescission upon default in payment of any monthly instalment after the lapse of 90 days from the expiration of the grace period of one month, without need of notice and with forfeiture of all instalments paid.

2.    Respondent Dumpit paid the down payment and several instalments amounting to P13,722.50 with the last payment was made on December 5, 1967 for instalments up to September 1967. Almost six (6) years later, private respondent wrote petitioner offering to update all his overdue accounts and sought consent to the assignment of his rights to a certain Lourdes Dizon. Petitioners informed respondent that his Contract to Sell had long been rescinded pursuant to paragraph 6 of the contract, and that the lot had already been resold.

3.       Respondent filed a letter complaint with the National Housing Authority (NHA) questioning the validity of the rescission. The NHA held that the rescission is void in the absence of either judicial or notarial demand.  Palay, Inc. and Onstott in his capacity as President of the corporation, jointly and severally, was ordered to refund Dumpit the amount paid plus  12% interest from the filing of the complaint. Petitioners' MR was denied by the NHA. Respondent Presidential Executive Assistant, on May 2, 1980, affirmed the Resolution of the NHA. Reconsideration sought by petitioners was denied for lack of merit. Thus, the present petition.

Issue: W/N demand is necessary to rescind a contract

Ruling: As held in previous jurisprudence, the judicial action for the rescission of a contract is not necessary where the contract provides that it may be revoked and cancelled for violation of any of its terms and conditions. However, even in the cited cases, there was at least a written notice sent to the defaulter informing him of the rescission. A written notice is indispensable to inform the defaulter of the rescission. Hence, the resolution by petitioners of the contract was ineffective and inoperative against private respondent for lack of notice of resolution (as held in the U.P. vs. Angeles case). The act of a party in treating a contract as cancelled should be made known to the other. 

Later, RA 6551 6551 entitled "An Act to Provide Protection to Buyers of Real Estate on Instalment Payments,” emphasized the indispensability of notice of cancellation to the buyer when it specifically provided:

Sec. 3(b) ... the actual cancellation of the contract shall take place after thirty days from receipt by the buyer of the notice of cancellation or the demand for rescission of the contract by a notarial act and upon full payment of the cash surrender value to the buyer. (Emphasis supplied).

Moreover, there was no waiver on the part of the private respondent of his right to be notified under paragraph 6 of the contract since it was a contract of adhesion, a standard form of petitioner corporation, and private respondent had no freedom to stipulate. Finally, it is a matter of public policy to protect buyers of real estate on instalment payments against onerous and oppressive conditions. Waiver of notice is one such onerous and oppressive condition to buyers of real estate on instalment payments.

As a consequence of the resolution by petitioners, rights to the lot should be restored to private respondent or the same should be replaced by another acceptable lot but since the property had already been sold to a third person and there is no evidence on record that other lots are still available, private respondent is entitled to the refund of instalments paid plus interest at the legal rate of 12% computed from the date of the institution of the action. It would be most inequitable if petitioners were to be allowed to retain private respondent's payments and at the same time appropriate the proceeds of the second sale to another.

Onstott not personally liable

Onstott was made liable because he was then the President of the corporation and the controlling stockholder but there was no sufficient proof that he used the corporation to defraud private respondent. He cannot, therefore, be made personally liable just because he "appears to be the controlling stockholder". Mere ownership by a single stockholder or by another corporation is not of itself sufficient ground for disregarding the separate corporate personality. 

Finally, there are no badges of fraud on the petitioners' part. They had literally relied, albeit mistakenly, on paragraph 6 (supra) of the contract when it rescinded the contract to sell extrajudicially and had sold it to a third person.

Petitioner Palay, Inc. is liable to refund to respondent Dumpit the amount of P13,722.50, with interest at twelve (12%) p.a. from November 8, 1974, the date of the filing of the Complaint.

Barzaga v CA Digest

G.R. No. 115129 February 12, 1997

Facts: 
The petitioner’s wife was suffering from a debilitating ailment and with forewarning of her impending death, she expressed her wish to be laid to rest before Christmas day to spare her family of the long vigils as it was almost Christmas. After his wife passed away, petitioner bought materials from herein private respondents for the construction of her niche. Private respondents however failed to deliver on agreed time and date despite repeated follow-ups. The niche was completed in the afternoon of the 27th of December, and Barzaga's wife was finally laid to rest. However, it was two-and-a-half (2-1/2) days behind schedule.

Issue: Was there delay in the performance of the private respondent's obligation?

Ruling: Yes. Since the respondent was negligent and incurred delay in the performance of his contractual obligations, the petitioner is entitled to be indemnified for the damage he suffered as a consequence of the delay or contractual breach. There was a specific time agreed upon for the delivery of the materials to the cemetery.

This is clearly a case of non-performance of a reciprocal obligation, as in the contract of purchase and sale, the petitioner had already done his part, which is the payment of the price. It was incumbent upon respondent to immediately fulfill his obligation to deliver the goods otherwise delay would attach. An award of moral damages is incumbent in this case as the petitioner has suffered so much.

Mindex Resources Development v. Morillo

G.R. No. 138123 March 12, 2002

[Panganiban, J.]

Facts: Petitioner agrees verbally to lease a 6x6 cargo truck owned by the respondent Ephraim Morillo for use in MINDEX' mining operations. Unkown to Morillo the said truck was burned by unindentified persons while parked unattended after it suffered mechanical trouble. The truck was totally burned and only its engine  was partially burned. Upon learning of the incident Morillo offered to sell the truck to petitioner, but the latter refused. Instead it replaced the trucks tires and had it towed for repair and overhauling. Morillo sent a proposal to Mindex that for the payment of the cost of the truck in four (4) installments plus unpaid rentals but due to the tight finances, petitioner instead made a counteroffer to pay the rent, repair and overhaul the truck and return it to Morillo. With the parties unable to come to an agreement, Morillo pulled out the truck from Mindex' repair shop and had it repaired somewhere else.

The RTC found petitioner guilty for the destruction of the vehicle. This was affirmed by the CA and held petitioner responsible for its loss and destruction of the truck and was thus liable. CA modified the decision of the RTC by changing the 12% to 6% on the rentals and repair costs until the date of the finality of the decision trial court and 12 percent per annum thereafter, if the amounts adjudged would remain unpaid from such date of finality until the rentals and the repair costs were fully paid. CA also affirmed the award of attorney’s fees. Hence this petition. Petitioner claims that the burning of the truck was a fortuitous event, for which it should not be held liable pursuant to Article 1174. Moreover, the letter of respondent dated April 15, 1991, stating that the burning of the truck was an “unforeseen adversity,” was an admission that should exculpate the former from liability.

Issue: Whether or not the burning is a fortuitous event

No. 

Both the RTC and the CA found petitioner negligent and thus liable for the loss or destruction of the leased truck. True, both parties may have suffered from the burning of the truck but as found by both lower courts, the negligence of petitioner makes it responsible for the loss. Well-settled is the rule that factual findings of the trial court, particularly when affirmed by the CA, are binding on the Supreme Court. 

Contrary to its allegations, petitioner has not adequately shown that the RTC and the CA overlooked or disregarded significant facts and circumstances that, when considered, would alter the outcome of the disposition Article 1667 of the Civil Code holds lessees responsible for the deterioration or loss of the thing leased, unless they prove that it took place without their fault.

An act of God cannot be invoked to protect a person who has failed to forestall the possible adverse consequences of such a loss-when the effect is found to be partly the result of a person’s participation, whether by active intervention, neglect or failure to act, the whole occurrence is humanized and removes from the rules applicable to acts of God. Petitioner is also negligent. Negligence, as commonly understood, is that conduct that naturally or reasonably creates undue risks or harm to others.

Vasquez v. CA

138 SCRA 553


Facts: Petitioners lost their children in a shipwreck involving the vessel of private respondent when it sailed despite a typhoon.


Issue: 1) W/n it is a fortuitous event

2) W/n respondents are liable


HELD:

1) No. It is not a caso fortuito. The elements to consider in sustaining a case of caso fortuito are the ff: 1) the event must be independent of the human will, 2) the occurrence must render it impossible for the debtor to fulfill the obligation in a normal manner, 3) the obligor must be free of participation in, aggravation of, the injury to the creditor,

2) Petitioners are liable as it is not a caso fortutito. There is no caso fortuito when the ship captain proceeded en route despite a typhoon advice close to the area where the vessel will pass. Moreover, the Board of Marine’s inquiry conclusion that the ship captain was not negligent is not binding on the Court when said finding is not complete. The liability of the ship owner also extends to the value of vessel and the insurance proceeds thereon.

NAPOCOR v. C.A.

G.R. No. 96410 July 3, 1992
[Nocon, J.:]



Facts: NPC entered into a contract with private respondent, an engineering construction in constructing tunnel work. When a typhoon hit the project area causing water from dam to spill over, NPC opened the spillway gates of the dam only at the height of the typhoon. It caused the inundation of the towns neighboring the Angat Dam, particularly Norzagaray, Bulacan, at the height of the typhoon. It resulted to deaths and the loss and destruction of houses, farms, plants, working animals and other properties of the people residing nearby.


Issue: W/N petitioner is liable


HELD. Yes. NPC cannot escape liability because its negligence was the proximate cause of the loss and damage even though the typhoon was an act of God. It could have opened the gates at an earlier time, hence it has been negligent. But exemplary damages should not be awarded since there was no bad faith and gross negligence on the part of NPC.

La Mallorca et. al. v. De Jesus

G.R. No. L-21486 May 14, 1966
[Makalintal, J.:]

Facts: The daughter of respondent died in a head-on collision between petitioner’s bus of which she was a passenger and a truck. The immediate cause of the collision was the fact that the driver of the bus lost control of the wheel when its left front tire suddenly exploded.

Issue: W/n the tire blow-out is a fortuitous event

HELD: No. The accident was caused by a mechanical defect which could have been corrected if the bus has been subjected to a more thorough check up before it took the road. Therefore the owner of the vehicle is liable. Moral damages are recoverable by reason of the death of the passenger caused by the breach of contract of a common carrier as provided in Art 2206 of the New Civil Code.

Agcaoili v. GSIS

G.R. No. L-30056 August 30, 1988
[Narvasa, J.:]

Facts: Petitioner was awarded the house by GSIS on the condition that he should reside on it immediately. As the house is uninhabitable, petitioner vacated the area after 1 day and refused to pay further installments until respondent make it habitable. Respondent cancelled the award.

Issue: W/n the petitioner incurred delay in fulfilling his obligations

HELD: In reciprocal obligations, a party incurs delay if the other does not comply or is not ready to comply in a proper manner with what is incumbent upon him. Respondent did not fulfill its obligation to deliver the house in a habitable state, therefore, it cannot invoke the petitioner’s suspension of payment as a cause to cancel the contract between them. There was a perfected contract of sale, it was then the duty of GSIS as seller to deliver the thing sold in a condition suitable for its enjoyment by the buyer and for the purpose contemplated. The house contemplated was one that could be occupied for purpose of residence in reasonable comfort and convenience.