ANTONIO R. CORTES VS HON.

COURT OF APPEALS AND VILLA ESPERANZA

DEVELOPMENT CORPORATION
G.R. NO. 126083, 12 July 2006, FIRST DIVISION (Ynares-Santiago, J.)

FACTS:

Cortes entered into a contract of sale with the Corporation for the sale of several lots
worth p3,700,000 and executed a Deed of Absolute Sale. The Corporation advanced payment of
p1,213,000 but Cortes retained the Deed for notarization. Upon the Corporations demand for
specific performance, Cortes refused to deliver the Deed alleging that the balance was yet to be
paid resulting in his failure to pay his lessees the disturbance fees causing the latters refusal to
pay their rent. He thus prayed that the Corporation to pay the outstanding balance plus interest
otherwise to cancel the sale.

The trial court rendered a decision rescinding the sale but the Court of Appeals reversed
its decision.

ISSUE:

Whether or not there is delay in the performance of the parties obligation that would
justify the rescission of the contract.

HELD:

Yes. Both parties were in delay. Considering that their obligation was reciprocal,
performance thereof must be simultaneous. The mutual inaction of the parties gave rise to
compensatio morae because neither completed their part in their reciprocal obligation. This
mutual delay of the parties cancels out the effects of default, such that it is as if no one is guilty
of delay.

Wherefore the petition is DENIED. The decision of the Court of Appeals is AFFIRMED.