Case Digest (G.R. No. 112182)
Facts:
On March 31, 1981, Bricktown Development Corporation (now Multinational Realty Development Corporation), represented by its President Mariano Z. Velarde, executed two Contracts to Sell covering ninety-six residential lots in Multinational Village Subdivision, Parañaque, with a total purchase price of ₱21,639,875.00 in favor of Amor Tierra Development Corporation, represented by its Vice-President Moises G. Petilla. The agreed payment schedule provided for an initial downpayment of ₱2,200,000.00 on signing, followed by staggered installments and assumption of mortgage liability or cash payment of the balance. A Supplemental Agreement the same day added interest obligations of ₱55,364.68 and ₱390,369.37. Private respondent paid only ₱1,334,443.21. Negotiations for modification ensued but remained inconclusive. On October 12, 1981, petitioner served a Notice of Cancellation on account of unpaid installments and interest, granting a thirty-day period to cure. On September 26, 1983,Case Digest (G.R. No. 112182)
Facts:
- Parties and Contracts
- On March 31, 1981, Bricktown Development Corporation (renamed Multinational Realty Development Corporation), represented by President Mariano Z. Velarde, executed two Contracts to Sell in favor of Amor Tierra Development Corporation, represented by Vice-President Moises G. Petilla.
- The contracts covered 96 residential lots (totaling 82,888 sqm) in Multinational Village Subdivision, Paranaque, Metro Manila, for a total price of P21,639,875.00, payable as follows:
- P2,200,000.00 on March 31, 1981
- P3,209,968.75 on June 30, 1981
- P4,729,906.25 on December 31, 1981
- Balance of P11,500,000.00 by assumption of mortgage or in cash
- Supplemental Agreement and Partial Payment
- On the same date, the parties executed a Supplemental Agreement obliging Amor Tierra to pay:
- P55,364.68 (21% interest on downpayment for March 31–June 30, 1981)
- P390,369.37 (interest paid by petitioner to the Philippine Savings Bank for February 1–March 31, 1981)
- Amor Tierra paid only P1,334,443.21, failing to meet the stipulated initial downpayment of P2,200,000.00.
- Negotiations and Notice of Cancellation
- The parties engaged in further negotiations for contract modification, but no conclusive agreement was reached.
- On October 12, 1981, petitioner sent a Notice of Cancellation for nonpayment of the June installment and accrued interest, granting Amor Tierra 30 days to cure.
- Demand for Refund and Judicial Proceedings
- On September 26, 1983, Amor Tierra demanded refund of P2,455,497.71 with interest or the assignment of unencumbered lots.
- Upon noncompliance, Amor Tierra filed suit on November 18, 1983.
- The trial court rescinded the contracts and supplemental agreement, ordered return of P1,334,443.21 with 12% interest from filing date, awarded P25,000 attorneys’ fees, dismissed petitioners’ counterclaim, and imposed costs. The Court of Appeals affirmed in toto.
Issues:
- Validity of Rescission
- Whether petitioner validly rescinded/cancelled the Contracts to Sell and the Supplemental Agreement.
- Forfeiture vs. Restitution
- Whether petitioner was entitled to forfeit all payments under the liquidated damages clause or must refund the remitted amount with interest.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)