Vicente v. Court of Appeals

Summary

The Supreme Court resolved a real estate contract dispute where seller Liberty Luna failed to eject squatters from property sold to Vicente and Michael Lim for P4,000,000. When Luna attempted to rescind the contract and return earnest money through consignation, the Court held that a perfected contract existed and the squatter ejectment was merely a performance condition, not a condition precedent to contract formation. Under Art. 1545 of the Civil Code, buyers had the right to waive this condition and proceed with the sale. The Court found Luna acted in bad faith by making only token efforts to remove squatters while seeking to escape her contractual obligations. The decision reinforced principles of contract mutuality and performance conditions, awarding damages to the buyers for the seller's breach in bad faith.