Case Digest (G.R. No. 116835) Core Legal Reasoning Model
Core Legal Reasoning Model
Facts:
In Mila A. Reyes v. Victoria T. Tuparan (G.R. No. 188064, June 1, 2011), the petitioner, Mila A. Reyes, owned a 1,274 sqm lot in Karuhatan, Valenzuela City (TCT No. V-4130) with a three-storey commercial building (RBJ Building) and a residential apartment. On December 1989, respondent Victoria T. Tuparan leased space for her pawnshop and later, between February and May 1990, invested in Reyes’s lending business at 6% monthly interest. Facing an outstanding mortgage of ₱2,278,078.13 to Farmers Savings and Loan Bank (FSL Bank), Reyes sought to sell the property for at least ₱6,500,000 to clear debts. Tuparan verbally offered ₱4,200,000, payable in installments without interest and assuming the bank loan, on condition that Reyes could rescind if she found a ₱6.5 million buyer within three months, that Reyes continue using ground-floor space rent-free during payments, that she lease it for 15 years at ₱8,000/month after full payment, and that Tuparan renew fire insurance. They execu Case Digest (G.R. No. 116835) Expanded Legal Reasoning Model
Expanded Legal Reasoning Model
Facts:
- Parties and Property
- Petitioner Mila A. Reyes owns a 1,274 sqm lot in Karuhatan, Valenzuela City (TCT No. V-4130) with a three-storey commercial building (RBJ Building) and residential apartments, from which she operated a drugstore and leased spaces.
- Respondent Victoria T. Tuparan leased ground-floor space in December 1989 for P4,000/month, later invested in petitioner’s financing business.
- Mortgage and Conditional Sale Negotiations
- On June 20, 1988, petitioner mortgaged the property to Farmers Savings & Loan Bank, Inc. (FSL Bank) for P2,000,000; by November 15, 1990 the balance was P2,278,078.13.
- To liquidate the mortgage and raise working capital, petitioner agreed to respondent’s verbal offer to buy the properties for P4,200,000 (no interest) and assume the bank loan, with side concessions:
- Three-month right of rescission if a P6,500,000 buyer emerged;
- Free use of petitioner’s drugstore space during payments;
- Fifteen-year lease at P8,000/month after full payment;
- Renewal of fire insurance by respondent.
- Deed of Conditional Sale and Defaults
- On November 26, 1990, parties and FSL Bank executed a Deed of Conditional Sale with Assumption of Mortgage: P1.2 M payable in three installments (P200k due Jan 31 ’91; P200k due Jun 30 ’91; P800k due Dec 31 ’91) and assumption of the P2 M mortgage balance; title to remain with petitioner until full payment.
- Respondent defaulted, paying only P395,000 by August 31 1992 (outstanding P805,000 principal plus P466,893.25 interest at 6%/month), assumed full mortgage, collected all rentals without sharing, failed to insure, and offered P751,000 in September 1992.
- Procedural History
- RTC (Feb 22 2006): Held the deed a contract to sell; allowed respondent 30 days to pay P805,000 at 2%/month or face rescission; no damages or attorney’s fees awarded.
- CA (Feb 13 2009): Affirmed with modification—deleted automatic rescission and allowed 30 days to pay P805,000 plus 6% p.a. from Sep 11 1992, then 12% until full payment; all other RTC rulings affirmed.
- SC Petition: Reyes challenged denial of outright rescission, interest reduction, failure to award damages (lost rentals, back rents, moral/exemplary, attorney’s fees), and denial of injunctive relief.
Issues:
- Whether the Deed is a contract of sale or a contract to sell.
- Whether respondent’s non-payment of P805,000 constitutes a breach warranting rescission under Article 1191, New Civil Code.
- Whether the breach (if any) is substantial or only slight.
- Proper interest rate on the unpaid balance.
- Entitlement to actual damages (lost rentals, back rents), moral/exemplary damages, and attorney’s fees.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)