Case: Onglenco vs. Ozaeta (70 Phil.

43)

FACTS

PETITIONER: Rosendo Onglenco

RESPONDENT: Roman Ozaeta and Melitona Hernandez

PONENTE: Laurel, J.

This is a petition for certiorari for the contention of the

petitioner that the CA erred in ruling that the subject land’s sale
should be annulled and that the respondents are not absolute
owners of the land but with the right to its immediate and
peaceful possession.

The case was initially filed in the CFI of Tayabas by the

petitioner against the respondents praying that he be declared
the sole owner and possessor of the subject land and that the
sale of it executed by the Provincial Sheriff of Tayabas by virtue
of a writ of execution in Civil Case 3506 in the same court,
conveying the aforesaid land to the respondents, be annulled.

The land in question was owned to Gregorio Hernandez and

Paciencia Ona. After Hernandex’ death, Ona and her children
sold the same to spouses Villanueva and Macalalag. The latter
defaulted in paying their balance that lead the former to file a
case (Civil Case 3506) against the spouses. The judgment was
affirmed on appeal on February 2nd 1935.

Further, the petitioner alleged that the respondents sold the

subject land to them in January 11th 1935 and its deed of
conveyance was provided in June 22nd of the same year. When
the subject land was the subject of execution in Civil Case 3506,
the petitioners presented a Third-Party Claim. On the other
hand, the respondents claimed that they acquired interest
through pacto de retro for the failure of the original owners to
exercise their right of redemption and that they acquired the
subject property through the execution of July 29, 1935 in Civil
Case 3506, with the Shereff’s sale being definitive on September
7, 1936 in default of redemption by the redemption debtors. It
was registered in the Office of the Register of Deeds on
 September 14, 1936.

The Court of Appeals found and so held that, as the alleged sale
from Villanueva and Macalalag to the petitioner took place on
January 11 1935, or subsequent to the judgment against his
vendors in civil case No 3506, it was presumptively fraudulent.

ISSUE/S Whether the sale can be rescinded .

Article 1380.

Contracts validly agreed upon may be rescinded in the cases

LAWS established by law. (1290)

No. The sale cannot be rescinded. Contracts capable of

rescission are those validly entered into (Art. 1290. Civil Code),
as an action to rescind is founded upon and presupposes the
existence of a contract (Tan Chay Heng vs. West Coast Life
Insurance Co., 51 Phil., 80)

The Court of Appeals held that the sale is to be presumed

fraudulent for having been executed posterior to the entry of the
judgment against the petitioner’s supposed vendors in civil case
No. 3506, evidently in pursuance of the provisions of article
1297 of the Civil Code. But as there is nothing else in the
appealed decision to indicate that rescission was contemplated
under article 1291 of said Code, the aforesaid presumption must
have been considered merely as one of the grounds for holding
HOLDINGS that the sale is fictitious.
CASE ILLUSTRATION FOR ARTICLE 1381.

Sps. Felipe and Leticia Cannu vs. Sps. Gil and Fernandina Galang & National Home Mortgage
Finance Corporation

FACTS

Respondents-spouses Gil and Fernandina Galang obtained a loan from Fortune Savings &
Loan Association forP173,800.00 to purchase a house and lot located at Pulang Lupa, Las
Piñas, with an area of 150 square meters covered by Transfer Certificate of Title (TCT) No.
T-8505 in the names of respondents-spouses. To secure payment, a real estate mortgage
was constituted on the said house and lot in favor of Fortune Savings & Loan Association. In
early 1990, NHMFC purchased the mortgage loan of respondents-spouses from Fortune
Savings & Loan Association for P173,800.00.

Respondent Fernandina Galang authorized4 her attorney-in-fact, Adelina R. Timbang, to sell

the subject house and lot.

Petitioner Leticia Cannu agreed to buy the property for P120,000.00 and to assume the
balance of the mortgage obligations with the NHMFC and with CERF Realty (the Developer
of the property).

A Deed of Sale with Assumption of Mortgage Obligation dated 20 August 1990 was made
and entered into by and between spouses Fernandina and Gil Galang (vendors) and
spouses Leticia and Felipe Cannu (vendees) over the house and lot in question

Petitioners paid the “equity” or second mortgage to CERF Realty.

Despite requests from Adelina R. Timbang and Fernandina Galang to pay the balance
of P45,000.00 or in the alternative to vacate the property in question, petitioners refused to
do so.

In a letter dated 29 March 1993, petitioner Leticia Cannu informed Mr. Fermin T. Arzaga,
Vice President, Fund Management Group of the NHMFC, that the ownership rights over the
land covered by TCT No. T-8505 in the names of respondents-spouses had been ceded and
transferred to her and her husband per Deed of Sale with Assumption of Mortgage, and that
they were obligated to assume the mortgage and pay the remaining unpaid loan balance.
Petitioners’ formal assumption of mortgage was not approved by the NHMFC.

Because the Cannus failed to fully comply with their obligations, respondent Fernandina
Galang, on 21 May 1993, paid P233,957.64 as full payment of her remaining mortgage loan
with NHMFC.
Petitioners opposed the release of TCT No. T-8505 in favor of respondents-spouses
insisting that the subject property had already been sold to them. Consequently, the
NHMFC held in abeyance the release of said TCT.

ISSUES

If the rescission and annulment of the Deed of Sale with Assumption of Mortgage valid.

HELD

Court is of the view that plaintiffs have no cause of action either against the spouses Galang
or the NHMFC. Plaintiffs have admitted on record they failed to pay the amount of
P45,000.00 the balance due to the Galangs in consideration of the Deed of Sale With
Assumption of Mortgage Obligation (Exhs. “C” and “3”). Consequently, this is a breach of
contract and evidently a failure to comply with obligation arising from contracts. . . In this
case, NHMFC has not been duly informed due to lack of formal requirements to
acknowledge plaintiffs as legal assignees, or legitimate tranferees and, therefore,
successors-in-interest to the property, plaintiffs should have no legal personality to claim
any right to the same property.

CASE ILLUSTRATION FOR ARTICLE 1382

G.R. No. L-28496 March 31, 1928

ASIA BANKING CORPORATION, Plaintiff-Appellant vs. MARIA LUISA CORCUERA, for herself
and as guardian of the persons and property of Lina, German, and Ramon N. F. Lichauco y
Corcuera, minors, JOSE PASCUAL, JULIO LICHAUCO Y FONSECA, MARIA VICTORIA
LICHAUCO Y FONSECA and LICHAUCO & CO., INC., Defendants-Appellees.

FACTS

On January 16, 1922, the Lichauco Corporation, conspiring with the defendant, Maria
Luisa Corcuera, et al., and for the purpose of defrauding and delaying the plaintiff in the
collection of its indebtedness against the Lichauco Corporation, executed and caused to be
recorded an illegal and fictitious deed of conveyance from the Lichauco Corporation to the
defendant, Maria Luisa Corcuera the former’s property. However, it was falsely recited in
the questioned deed that there was a consideration of P24,000.00; that the said
consideration was grossly inadequate; that Lichauco Co. Inc. was not really indebted to the
estate of Galo Lichauco. Certificate No.455 was obtained by the plaintiff but it was refused
to be registered by the register of property because the deed was previously registered to
Maria Luisa Corcuera.
Plaintiff prayed that said deed be declared fraudulent and void. the defendants made a
general and specific denial, and as an affirmative defense alleged the execution of the deed
to the land in question on January 16, 1922, for a consideration of P24,000 which was then
due and owing from the Lichauco Corporation to the Galo Lichauco estate, the recording of
the deed as alleged, and that the heirs of Galo Lichauco are the sole and exclusive owners of
the property. The Lower Court ruled against the defendants.

ISSUE

Whether or not the transfer of property in favor of the defendant Maria Luisa Corcuera was
fraudulent

HELD

No. The courts will not weight the value of the goods sold and the price received in very
nice scales, but all circumstances considered, there should be reasonable and fair
proportion between the one and the other. Inadequacy of price does not mean a honest
difference of opinion as to price, but a consideration so far short of the real value of the
property as to startle a correct mind.

Although in this case it is also true that the consideration for the deed was a preexisting
debt, yet the record is conclusive that the debt was due and owing and enforceable at the
time the deed in question was executed, and, hence, the conveyance does not come under
the terms and provisions of article 1292 of the Civil Code.

We freely admit that this case is not free from doubt, but in this case the question of
inadequacy of consideration is not so clear or convincing as in G. R. No. 28495; neither do
the facts bring it within article 1292 of the Civil Code.

The Supreme Court affirmed the decision of the lower court.

CASE ILLUSTRATION FOR ARTICLE 1383

Margarita Suria vs Court of Appeals & Herminom/ Natividad Crispin

FACTS

That on March 31, 1975, plaintiffs being the owners of a parcel of land situated at Barrio
San Antonio, San Pedro, Laguna, entered into a contract denominated as DEED OF SALE
WITH MORTGAGE, with herein defendants, a true copy of said contract.
That the defendants violated the terms and conditions of the contract by failing to pay the
stipulated installments and in fact only one installment due in July 1975 (paid very late in
the month of September, 1975) was made all the others remaining unsettled to the present
time;

That repeated verbal and written demands were made by plaintiff upon the defendants for
the payment of the installments, some of said written demands having been made on
September 24, 1981, February 7, 1982, February 24, 1983, March 13, 1983, and April 12,
1983, but defendants for no justifiable reason fail On November 14, 1983, petitioners filed
their answer with counterclaim.

On July 16, 1984, petitioners filed a motion to dismiss complaint, alleging that: That
plaintiffs are not entitled to the subsidiary remedy of rescission because of the presence of
remedy of foreclosure in the Deed of Sale with Mortgage , secondly that, assuming
arguendo that rescission were a proper remedy, it is apparent in the face of the Complaint
that the plaintiffs failed to comply with the requirements of law, hence the rescission was
ineffective, illegal, null and void, and invalid.

On July 26, 1984, private-respondents filed their opposition to the above motion.In the
meantime, on August 6, 1984, petitioners formerly offered to pay private-respondents all
the outstanding balance under the Deed of Sale with Mortgage, which offer was rejected by
private respondents on August 7, 1984. On November 26, 1984, the respondent-Court
denied the motion to dismiss.

ISSUE

Whether or not the seller can resort to the remedy of rescission under Art 1191 which
provides that the subsidiary and equitable remedy of rescission in case of breach of
reciprocal obligation.

HELD

The petition is hereby GRANTED. The Intermediate Appellate Court’s decision is

REVERSED and SET ASIDE. The petitioners are ordered to pay the balance of their
indebtedness under the Deed of Absolute Sale with Mortgage with legal interests from the
second installment due on October 24, 1975 until fully paid,

1.) There is no dispute that the parties entered into a contract of sale as distinguished from
a contract to sell. By the contract of sale, the vendor obligates himself to transfer the
ownership of and to deliver a determinate thing to the buyer, who in turn, is obligated to
pay a price certain in money or its equivalent (Art. 1458, Civil Code). From the
respondents’ own arguments, we note that they have fully complied with their part of the
reciprocal obligation. 2.) The petitioners’ breach of obligations is not with respect to the
perfected contract of sale but in the obligations created by the mortgage contract. The
remedy of rescission is not a principal action retaliatory in character but becomes a
subsidiary one which by law is available only in the absence of any other legal remedy. The
relationship between the parties is no longer one of buyer and seller because the contract
of sale has been perfected and consummated. It is already one of a mortgagor and a
mortgagee. In consideration of the petitioners’ promise to pay on installment basis the sum
they owe the respondents, the latter have accepted the mortgage as security for the
obligation. 3)The petitioners have offered to pay au past due accounts. Considering the
lower purchasing value of the peso in terms of prices of real estate today, the respondents
are correct in stating they have suffered losses. However, they are also to blame for trusting
persons who could not or would not comply with their obligations in time. They could have
foreclosed on the mortgage immediately when it fell due instead of waiting all these years
while trying to enforce the wrong remedy.

CASE ILLUSTRATION FOR ARTICLE 1385

Goldenrod, Inc. vs. CA (299 SCRA 141)

Pio Barretto and Sons, Inc. (BARRETTO & SONS) owned forty-three (43) parcels of
registered land with a total area of 18,500 square meters located at Carlos Palanca St.,
Quiapo, Manila, which were mortgaged with the United Coconut Planters Bank (UCPB). In
1988, the obligation of the corporation with UCPB remained unpaid making foreclosure of
the mortgage imminent.

Goldenrod, Inc. (GOLDENROD), offered to buy the property from BARRETTO & SONS. On 25
May 1988, through its president Sonya G. Mathay, petitioner wrote respondent Anthony
Que, President of respondent BARRETTO & SONS.

When the term of existence of BARRETTO & SONS expired, all its assets and liabilities
including the property located in Quiapo were transferred to respondent Pio Barretto
Realty Development, Inc. (BARRETTO REALTY). Petitioners offer to buy the property
resulted in its agreement with respondent BARRETTO REALTY that petitioner would pay
the following amounts: (a) P24.5 million representing the outstanding obligations of
BARRETTO REALTY with UCPB on 30 June 1988, the deadline set by the bank for payment;
and, (b) P20 million which was the balance of the purchase price of the property to be paid
in installments within a 3-year period with interest at 18% per annum.

Petitioner did not pay UCPB the P24.5 million loan obligation of BARRETTO REALTY on the
deadline set for payment; instead, it asked for an extension of one (1) month or up to 31
July 1988 to settle the obligation, which the bank granted. On 31 July 1988, petitioner
requested another extension of sixty (60) days to pay the loan. This time the bank
demurred.
In the meantime BARRETTO REALTY was able to cause the reconsolidation of the forty-
three (43) titles covering the property subject of the purchase into two (2) titles covering
Lots 1 and 2, which were issued on 4 August 1988. The reconsolidation of the titles was
made pursuant to the request of petitioner in its letter to private respondents on 25 May
1988. Respondent BARRETTO REALTY allegedly incurred expenses for the reconsolidation
amounting to P250,000.00.

On 25 August 1988 petitioner sought reconsideration of the denial by the bank of its
request for extension of sixty (60) days by asking for a shorter period of thirty (30)
days. This was again denied by UCPB.

On 30 August 1988 Alicia P. Logarta, President of Logarta Realty and Development

Corporation (LOGARTA REALTY), which acted as agent and broker of petitioner, wrote
private respondent Anthony Que informing him on behalf of petitioner that it could not go
through with the purchase of the property due to circumstances beyond its fault, i.e., the
denial by UCPB of its request for extension of time to pay the obligation. In the same letter,
Logarta also demanded the refund of the earnest money of P1 million which petitioner gave
to respondent BARRETTO REALTY.

On 31 August 1988 respondent BARRETTO REALTY sold to Asiaworld Trade Center Phils.,
Inc. (ASIAWORLD), Lot 2, one of the two (2) consolidated lots, for the price of P23
million. On 13 October 1988 respondent BARRETTO REALTY executed a deed transferring
by way of dacion the property reconsolidated as Lot 1 in favor of UCPB, which in turn sold
the property to ASIAWORLD for P24 million.

On 12 December 1988 Logarta wrote respondent Que demanding the return of the earnest
money to GOLDENROD. On 7 February 1989 petitioner through its lawyer reiterated its
demand, but the same remained unheeded by private respondents. This prompted
petitioner to file a complaint with the Regional Trial Court of Manila against private
respondents for the return of the amount of P1 million and the payment of damages
including lost interests or profits. In their answer, private respondents contended that it
was the agreement of the parties that the earnest money of P1 million would be forfeited to
answer for losses and damages that might be suffered by private respondents in case of
failure by petitioner to comply with the terms of their purchase agreement.

ISSUE

Whether or not private respondent has the obligation to return the property and its fruits
upon the rescission of the contract.
HELD

In University of the Philippines v. de los Angeles, the right to rescind contracts is not
absolute and is subject to scrutiny and review by the proper court. We held further, in the
more recent case of Adelfa Properties, Inc. v. Court of Appeals, that rescission of reciprocal
contracts may be extrajudicially rescinded unless successfully impugned in court. If the
party does not oppose the declaration of rescission of the other party, specifying the
grounds therefor, and it fails to reply or protest against it, its silence thereon suggests an
admission of the veracity and validity of the rescinding party’s claim.

Article 1385 of the Civil Code provides that rescission creates the obligation to return the
things which were the object of the
contract together with their fruits and interest. The vendor is therefore obliged to return
the purchase price paid to him by the buyer if the latter rescinds the sale, or when the
transaction was called off and the subject property had already been sold to a third person,
as what obtained in this case. Therefore, by virtue of the extrajudicial rescission of the
contract to sell by petitioner without opposition from private respondents who, in turn,
sold the property to other persons, private respondent BARRETTO REALTY, as the vendor,
had the obligation to return the earnest money of P1,000,000.00 plus legal interest from
the date it received notice of rescission from petitioner, i.e., 30 August 1988, up to the date
of the return or payment. It would be most inequitable if respondent BARRETTO REALTY
would be allowed to retain petitioners payment of P1,000,000.00 and at the same time
appropriate the proceeds of the second sale made to another.

WHEREFORE, the Petition is GRANTED. The decision of the Court of Appeals is REVERSED
and SET ASIDE. Private respondent Pio Barretto Realty Development, Inc. (BARRETTO
REALTY), its successors and assigns are ordered to return to petitioner Goldenrod, Inc.
(GOLDENROD), the amount of P1,000,000.00 with legal interest thereon from 30 August
1988, the date of notice of extrajudicial rescission, until the amount is fully paid, with costs
against private respondents.

Deiparine vs. CA and Trinidad GR. No. 96643, April 23, 1993

FACTS:

Spouses Carungay entered into a contract with Deiparine for the construction of a 3-story
dormitory in Cebu. Carungay agreed to pay Php970,000 inclusive of contractor’s fee, and
Deiparine bound himself to erect the building “in strict accordance to plans and
specifications.” Trinidad, a civil engineer, was designated as Carungays’ representative,
with powers of inspection and coordination with the contractor.
Trinidad reported to Carungay that Deiparine had been deviating from the plans and
specifications, thus impairing the strength and safety of the building. Carungay ordered
Deiparine to first secure approval from him before pouring cement. This order was not
heeded, prompting Carungay to send Deiparine another memorandum complaining that
the construction works are faulty and done haphazardly mainky due to lax supervision
coupled with inexperienced and unqualified staff.

Carungay then filed a complaint for the rescission of the construction contract for damages.

ISSUE:

Whether or not the rescission of contract is valid due to breach.

RULING:

Yes. Article 1385 states that rescission creates the obligation to return the things which
were the object of the contract, together with the fruits, and the price with its interest;
consequently, it can be carried out only when he who demands rescission can return
whatever he may be obliged to restore.

The construction contract falls squarely under Article 1191 because it imposes upon
Deiparine the obligation to build the structure and upon the Carungays the obligation to
pay for the project upon its completion. Article 1191 is not predicated on economic
prejudice to one of the parties but on breach of faith by one of them that violated the
reciprocity between them. The violation of reciprocity between Deiparine and Carungay
spouses, to wit, the breach caused by Deiparine’s failure to follow the stipulated plans and
specifications, has given the Carungay spouses the right to rescind or cancel the contract.

CASE ILLUSTRATION FOR ARTICLE 1387

ISIDORA L. CABALIW and SOLEDAD SADORRA, petitioners,

vs.
SOTERO SADORRA, ENCARNACION SADORRA, EMILIO ANTONIO, ESPERANZA RANJO,
ANSELMO RALA, BASION VELASCO, IGNACIO SALMAZAN, and THE HONORABLE COURT
OF APPEALS, respondents.

MUNOZ PALMA, J.:

FACTS

Isidora Cabaliw (2nd wife of Benigno Sadorra) filed a complaint against her husband named
Benigno Sadorra for the abandonment made by the latter. They have a daughter named
Soledad Sadorra. During their marriage they acquired two (2) parcels of land located in
Nueva Vizcaya. On January 30, 1933, judgment was rendered requiring Benigno Sadorra to
pay his wife the amount of P75.00 a month in terms of support as of January 1, 1933, and
P150.00 in concept of attorney’s fees and the costs but Benigno failed to comply with the
judgement of the court. Isidora filed a motion to cite Benigno Sadorra for contempt and the
Court of First Instance of Manila authorized Isidora to take possession of the conjugal
property, to administer the same, and to avail herself of the fruits thereof in payment of the
monthly support in arrears. With this order of the Court, Isidora proceeded to Nueva
Vizcaya to take possession of the aforementioned parcels of land, and it was then that she
discovered that her husband had sold them to his son-in-law Sotero. On February 1, 1940,
Isidora filed with the Court of First Instance of Nueva Vizcaya against her husband and
Sotero Sadorra for the recovery of the lands in question on the ground that the sale was
fictitious; at the same time a notice of lis pendens was filed with the Register of Deeds of
Nueva Vizcaya. In May of 1940, Benigno Sadorra died.

ISSUE: Whether or not there is a presumption of fraud against Sotero Sadorra

Ruling: Yes, it was stated on Art. 1387 that “Alienation by onerous title are also presumed
fraudulent when made by persons against whom some judgment has been rendered in any
instance or some writ of attachment has been issued. The decision or attachment need not
refer to the property alienated and need not have been obtained by the party seeking the
rescission.” the presumption of fraud was established at the time of the conveyance. The
fact that Sotero was living with his father-in-law and he knew that there was a judgment
directing the latter to give a monthly support to his wife Isidora and that his father-in-law
was avoiding payment and execution of the judgment. It was known to Sotero that his
father-in-law had no properties other than those two parcels of land which were being sold
to him. The fact that a vendor transfers all of his property to a third person when there is a
judgment against him is a strong indication of a scheme to defraud one who may have a
valid interest over his properties. The close relationship between Benigno and Sotero is
called to be a badge of fraud.

CASE ILLUSTRATION FOR ARTICLE 1389

G.R. No. L-11835

Fernando Hermosa Jr. – Juducial Administrator of the intestate estate of the deceased,
Fernando Hermosa Sr. – plaintiff-appellant
vs.
Alfonso Zobel Y Roxas – defedant- appellee

FACTS
a.) December 19, 1944- Fernando Hermosa Sr., owner of certain real estate in San
Sebastian Spain , died , intestate proceedings were instituted in C.F.I. of samar for
settlement of his estate and his daugther Luz Hermosa was appointed administratrix
daughter Luz and a grandson Fernando Hermosa Jr.
b.) January 14, 1947, the administratrix requested permission from the court to sell the
property located in Spain with a conformity of her co-heir Fernando Jr. which was to be
made public Auction.

c.) April 5, 1943, the court granted the permission.

d.) October 23, 1947, the administratrix request permission to sell the property privately.
The court granted permission to sell property.

e.) Alfonso Zobel was approached for property to buy it but, did not wish to have
negotiation with heirs.

f.) Luz and Fernando agreed to have the property ceded and and adjudicated to one of
them who may later carry on negotiation with prospective buyers.

g.) Luz Hermosa, renewed negotiation the sale of the property to Alfonso Zobel and agreed
that the sale price would be P20,000.00 under the law of Spain, the property may re-
purchase the sale price in Spanish pesetas at the rate of exchange.

h.) In order to protect the investment of the buyer, it was agreed to state in the deed of sale
, the price of P80,000.

i.) Problem arose in connection with the tax that may be made to pay if the price were fixed
at P80,000.00, so it was agreed that P60,000.00 to be appeared as payment or has been
paid during Japanese occupation.

j.) December 10,1947, Luz Hermosa executed the necessary deed of sale with the remaining
balance of P5,000 after the property had been registered in the name of the vendor.

k.) April 27, 1948, the remainder was in effect paid by Zobel to Luz Hermosa to complete
the transaction.

l.) Luz Hermosa died and Fernando Hermosa Jr. was appointed as administrator of the
estate of his late father. He demanded from Zobel the payment of the balance of P60,000 as
it was indicated in the deed of sale. Zobel refused to accede his demand.

m.) May 28, 1954, Fernando Hermosa filed action in CFI of Samar asking for specific
performance or the recission of sale plus damages, in his capacity as Judicial Administrator.
n.) The court found complaint unmeritorious and rendered judgment dismissing it but
ordering the plaintiff to pay the defendant of the sum of P1000 as moral damages and P500
as attorney’s fees and cost.

ISSUE

Whether or not that the action of rescission of the contract of sale by the plaintiff is
enforceable.

HELD

No, even if be granted that the plaintiff has sufficient legal ground to ask for the rescission
of the sale , the fact remains that his right of action has already prescribe. It appears that he
became of age on January 7, 1948 and he only brought the presentation on May 28, 1954,
or more than four years after the he attained the age of majority. Under Article 1389 of
NCC, Action for rescission prescribes in four years from removal of one’s incapacity, and
this happened more than four years ago.

We entertain a different opinion considering that the plaintiff did not take part in the sale
and so he was not aware of the circumstances under which it was carried out. Apparently
he was of the belief that the real consideration was P80,000 as it was made to appear in the
document and he brought this action in the belief that defendant has not paid the balance
of P60,000.

The decision appealed from is affirmed with only modification that the award of damages
and attorney’s fees should be eliminated.