Case Digest (G.R. No. 205113)
Facts:
On October 1, 1994, Honorlita Ascano-Cupino and Flaviana Ascano-Colocado (the petitioners), along with their sister Noeminia Ascano, entered into a Deed of Conditional Sale with Pacific Rehouse Corporation (the respondent) for a parcel of land measuring 59,753 square meters located in General Trias, Cavite, for a total price of P5,975,300. The agreement stipulated that Pacific would pay a down payment of P1,792,590, leaving a balance of P4,182,710, which was to be paid upon the fulfillment of certain conditions, including the completion of necessary documents for the transfer of the title, the removal of tenants and squatters from the property, and the submission of an Affidavit of Non-Tenancy. In November 1994, the petitioners requested an additional P600,000, which Pacific paid, followed by another request for P1,000,000 in 1995, also paid by Pacific. On February 13, 1995, the petitioners provided a certification stating the property was untenanted but failed to submit the ...
Case Digest (G.R. No. 205113)
Facts:
Background of the Case
The case involves a petition for review on certiorari under Rule 45 of the Rules of Court, filed by Honorlita Ascano-Cupino and Flaviana Ascano-Colocado (petitioners) against Pacific Rehouse Corporation (respondent). The petitioners sought to reverse the Decision and Resolution of the Court of Appeals (CA) which had reversed the Decision of the Regional Trial Court (RTC) in Civil Case No. TM-936.
The Deed of Conditional Sale
On 1 October 1994, the petitioners and their sister, Noeminia Ascano (collectively referred to as the Ascanos), entered into a Deed of Conditional Sale with Pacific Rehouse Corporation. The agreement involved the sale of a 59,753-square-meter parcel of land in General Trias, Cavite, for P5,975,300. Pacific paid a down payment of P1,792,590, leaving a balance of P4,182,710, to be paid upon fulfillment of specific conditions:
- Completion of documents necessary for the transfer of the certificate of title.
- Removal of tenants, squatters, and other occupants, with disturbance compensation to be paid by the vendors.
- Submission of the Affidavit of Non-Tenancy and land operation transfer documents.
Additional Payments and Petitioners’ Requests
In November 1994, the petitioners requested an additional P600,000, deducted from the purchase price, which Pacific paid. In 1995, they asked for another P1,000,000, also deductible from the purchase price, to fulfill the conditions in the Deed of Conditional Sale. Pacific paid this amount as well.
Failure to Fulfill Obligations
On 13 February 1995, the petitioners submitted a Barangay Agrarian Reform Council Certification stating the property was untenanted and assured Pacific that other necessary documents were being processed. However, by March 1995, the petitioners had failed to submit the documents despite multiple demands. Instead, they informed Pacific that they wanted to rescind the contract and refused to accept Pacific's tender of additional payments.
Pacific’s Actions
In March 1995, Pacific deposited P1,005,180 into a savings account opened in the petitioners' names, informing them they could withdraw the funds at their convenience. Later, Pacific discovered that the petitioners were negotiating the sale of the property with other buyers. Pacific then annotated an adverse claim on the property's title and continued to demand the petitioners fulfill their obligations.
Legal Proceedings
On 2 September 1999, Pacific filed a Complaint for Cancellation of Contract, Sum of Money, and Damages before the RTC. Later, Pacific amended its complaint to specific performance after discovering the petitioners had withdrawn the deposited funds.
RTC Decision
The RTC ruled in favor of rescinding the contract, ordering the petitioners to return P2,602,000 to Pacific and awarding damages and attorney’s fees to the defendants.
CA Decision
The CA reversed the RTC’s decision, ruling that specific performance was warranted and ordering the petitioners to execute a Deed of Absolute Sale in favor of Pacific and clear the property of tenants.
Issue:
- (Unlock)
Ruling:
- (Unlock)
Ratio:
- Amendment of Pleadings: The RTC erred in deciding the case based on the original complaint rather than the Amended Complaint, which superseded the original. Pacific’s change from seeking rescission to specific performance was valid.
- Parties’ Obligations: Under the Deed of Conditional Sale, the petitioners were obligated to remove tenants and provide necessary documents for the transfer of title. Pacific’s obligation was to pay the balance upon fulfillment of these conditions.
- Specific Performance: Pacific, as the injured party, was entitled to choose between rescission and specific performance. It chose specific performance, which the Court upheld.
- Addendum’s Invalidity: The Addendum, which petitioners claimed altered the original agreement, was not signed by Pacific’s authorized representative and thus did not amend the original Deed of Conditional Sale.
- Purchase Price: The Court upheld the purchase price of P5,975,300 as stated in the Deed of Conditional Sale, finding no evidence to support the petitioners’ claim of a higher agreed price.
The Court ruled that the petitioners failed to fulfill their obligations, and Pacific was entitled to specific performance. The balance of P1,577,530 was to be paid upon the petitioners’ fulfillment of their obligations.