P. J. Salas Rodriguez v. Mariano P. Leuterio

Summary

This 1925 Supreme Court case involved a land sale contract where the seller failed to deliver possession due to inability to properly segregate the purchased lots. The buyer paid the full purchase price of P5,600 but sought resolution of the contract and double damages under Civil Code Article 1454. The Court ruled that Article 1454 regarding earnest money does not apply when the full purchase price is paid, as the payment constitutes contract fulfillment rather than earnest money. However, the Court modified the trial court's judgment to award interest from the contract date rather than from the complaint filing date, establishing that upon contract resolution under Article 1124, interest should run from when the defendant first possessed the money. The decision clarifies the distinction between earnest money and full payment in contract law and establishes the proper computation of interest in contract resolution cases.