G.R. No. L-13438, November 20, 1918
FRANCISCO GUTIERREZ REPIDE, plaintiff-appellant, vs. IVAR O. AFZELIUS and PATROCINIO R. AFZELIUS, defendants-appellees.

FACTS:
Plaintiff Francisco Gutierrez Repide owned a parcel of land in Manila. In December 1916, defendants Ivar O. Afzelius and Patrocinio R. Afzelius negotiated to purchase the property for P10,000, with P2,000 payable upon signing the deed and the balance of P8,000 in monthly installments of P150, secured by a mortgage on the land. Plaintiff incurred expenses (P83.93) for a survey and preparation of the deed and mortgage. The deed was ready by December 28, 1916, but defendants failed to sign. Instead, Patrocinio Afzelius sent a letter dated January 3, 1917, stating they could not proceed due to business failure and lack of funds for the initial payment. At trial, Ivar Afzelius testified that the P2,000 partly belonged to his wife’s sister and was returned to her, and the letter was an excuse. Plaintiff filed an action in the Court of First Instance of Manila for specific performance, seeking to compel defendants to sign the deed and mortgage and pay the purchase price. The trial court dismissed the complaint, holding that specific performance would be impracticable and inequitable since defendants lacked funds, rendering enforcement impossible. Plaintiff appealed.

ISSUE:
Whether the vendor (plaintiff) is entitled to specific performance of a contract for the sale of real estate under Philippine law, compelling the vendee (defendants) to sign the deed and pay the purchase price, despite the vendee’s plea of financial inability.

RULING:
Yes. The Supreme Court reversed the trial court’s decision and ordered specific performance in favor of the vendor.

The Court held that under the Civil Code, particularly Articles 1279, 1451, and 1124, a valid contract of sale (with agreement on the thing and price) entitles both parties reciprocally to demand fulfillment. The civil law principle of mutuality of remedy means the vendor has the same right to specific performance as the vendee. Jurisprudence from the Supreme Court of Spain and Philippine cases (e.g., Irureta Goyena vs. Tambunting) support this reciprocal right.

While specific performance is an equitable remedy in common law, Philippine civil law achieves the same result. The Court cited American and English authorities confirming that vendors may compel vendees to accept a deed and pay the price, as contracts are bilateral and mutuality of obligation requires mutual remedies.

Defendants’ plea of financial inability (lack of funds for the initial payment) does not discharge their obligation or bar specific performance. Mere pecuniary inability is not a defense, and the court can enforce the decree through execution on defendants’ property if necessary. The trial court’s discretion must be exercised to enforce valid contracts, not to deny relief based on hardship self-induced by the defendants.

The Court ordered defendants to sign the deed and mortgage and pay the first installment of P2,000 as stipulated. Costs were awarded to the appellant.