G.R. No. 118180 - DEVELOPMENT BANK OF THE PHILIPPINES, VS. COURT OF APPEALS, SPS. NORMY D. CARPIO AND CARMEN ORQUISA; SPS. ROLANDO D. CARPIO AND RAFAELA VILLANUEVA; SPS. ELISEO D. CARPIO AND ANUNCIACION DEL ROSARIO; LUZ C. REYES, MARIO C. REYES, JULIET REYES-RUBIN.

Ruling

WHEREFORE, judgment is rendered ordering defendant to execute and deliver unto plaintiffs a deed of final sale of the land subject of their deed of conditional sale - Lot 5259-A, to pay plaintiffs P10,000.00 as nominal damages, P5,000.00 as attorney's fees, P3,000.00 as litis expenses and costs." [3] The trial court held that petitioner interpreted the fourth paragraph of Sec. 6, Rep. Act 6657 literally in conjunction with Sec. 1 of E.O. 407. The fourth paragraph of Sec. 6, Rep. Act 6657 states that: "Upon the effectivity of this Act, any sale disposition, lease, management contract or transfer of possession of private lands executed by the original landowner in violation of this act shall be null and void; Provided, however, that those executed prior to this act shall be valid only when registered with the Register of Deeds after the effectivity of this Act. Thereafter, all Register of Deeds shall inform the DAR within 320 days of any transaction involving agricultural lands in excess of five hectares." while Sec. 1 of E.O. 407 states that: "Sec. 1. All government instrumentalities but not limited to x x x financial institutions such as the DBP x x x shall immediately execute deeds of transfer in favor of the Republic of the Philippines as represented by the Department of Agrarian Reform and surrender to the department all landholdings suitable for agriculture." The court a quo noted that Sec. 6 of Rep. Act 6657, taken in its entirety, is a provision dealing primarily with retention limits in agricultural land allowed the landowner and his family and that the fourth paragraph, which nullifies any sale x x x by the original landowner in violation of the Act, does not cover the sale by petitioner (not the original land owner) to private respondents. On the other hand, according to the trial court, E.O. 407 took effect on 10 June 1990. But private respondents completed payment of the price for the property, object of the conditional sale, as early as 6 April 1990. Hence, with the fulfillment of the condition for the sale, the land covered thereby, was detached from the mass of foreclosed properties held by DBP, and, therefore, fell beyond the ambit or reach of E.O. 407. Dissatisfied, petitioner appealed to the Court of Appeals (CA), still insisting that its obligation to execute a Deed of Sale in favor of private respondents had become a legal impossibility and that the non-impairment clause of the Constitution must yield to the demands of police power. On 28 February 1994, the CA rendered judgment dismissing petitioner's appeal on the basis of the following disquisitions: "It is a rule that if the obligation depends upon a suspensive condition, the demandability as well as the acquisition or effectivity of the rights arising from the obligation is suspended pending the happening or fulfillment of the fact or event which constitutes the condition. Once the event which constitutes the condition is fulfilled resulting in the effectivity of the obliga