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
Corporation’s 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 latter’s 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.

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