4/14/2021 E-Library - Information At Your Fingertips: Printer Friendly In Gomez v. Court of Appeals, the City of Manila and Luisa Gomez entered into a contract to sell over a parcel of land. The city delivered the property's possession to Gomez. She fully paid the purchase price for the property but violated the terms of the contract to sell by renting out the property to other persons. This court set aside the contract to sell for her violation of the terms of the contract to sell. It ordered the installments paid forfeited in favor of the City of Manila "as reasonable compensation for [Gomez's} use of the [property]" for eight years. In this case, Olivarez Realty Corporation failed to fully pay the purchase price for the property. It only paid PhP2,500,000.00 out of the PhP19,080,490.00 agreed purchase price. Worse, petitioner corporation has been in possession of Castillo's property for 14 years since May 5, 2000 and has not paid for its use of the property. Similar to the ruling in Gomez, we order the PhP2,500,000.00 forfeited in favor of Castillo as reasonable compensation for Olivarez Realty Corporation's use of the property.[59] (Emphasis supplied, citations omitted) Olivarez also cited the case of Gomez v. Court of Appeals,[60] where this Court clarified that partial payments on a failed contract to sell may be retained by the seller as "reasonable compensation for use of the [property]." Applying the foregoing, we are of the considered view that the payment of the purchase price of P3,556.00, constitutes fair and reasonable rental for the period in which said property was under the control of awardee Luisa Gomez, her heirs and successors-in-interest. Undeniably, the awardee together with her heirs and successors-in-interest, have gained benefits, financial or otherwise, for a period of eight years —from the time of actual award of the lot to the time of cancellation thereof (1978-1986).[61] (Emphasis supplied) The same circumstances are present here. The parties entered into an oral contract to transfer the leasehold rights over a housing unit at an agreed price of US$175,000.00. [62] They do not dispute the Court of Appeals' finding that the oral contract is a contract to sell. However, respondents dispute whether or not cancelling such a contract would entail the consequences discussed in Olivarez. This Court finds the application of Olivarez in order. Here, petitioners turned over possession of the premises to respondents after the latter made partial payments amounting to US$10,000.00. Respondents then moved their furniture and groceries into one of the housing unit's rooms and also hired a house helper to watch over the premises in the interim.[63] Respondents made subsequent payments, bringing its total to US$40,000.00, but the contract to sell still failed to take effect because of respondents' subsequent default in paying the balance. During this five (5) month period, petitioners were unable to enjoy their property despite retaining a key to the premises.[64] Thus, petitioners should have been compensated for respondents' use of the property, consistent with Olivarez. https://elibrary.judiciary.gov.ph/thebookshelf/showdocsfriendly/1/66239 8/14