Case Digest (G.R. No. 108346)
Facts:
In Spouses Mariano Z. Velarde and Avelina D. Velarde v. Court of Appeals, David A. Raymundo and George Raymundo (G.R. No. 108346, July 11, 2001), petitioners Avelina and Mariano Velarde entered into a Deed of Sale with Assumption of Mortgage on August 8, 1986 with vendor David A. Raymundo for a Makati parcel under TCT No. 142177. They paid an ₱800,000 downpayment and agreed to assume a ₱1,800,000 mortgage with the Bank of the Philippine Islands (BPI). An Undertaking signed by both parties bound the Velardes to continue paying the mortgage pending BPI’s approval and provided for automatic forfeiture and cancellation upon breach. After three months of interest payments, BPI disapproved the assumption on December 15, 1986. Instead of paying the ₱1.8 million balance in full, the Velardes offered on January 7, 1987 to pay only if the respondents fulfilled new conditions not in the original contract. On January 8, 1987, Raymundo served a notarial notice of rescission. The Velardes filCase Digest (G.R. No. 108346)
Facts:
- Parties and Subject Matter
- Petitioners: Spouses Mariano Z. Velarde and Avelina D. Velarde (vendees).
- Respondents: David A. Raymundo (vendor) and George R. Raymundo.
- Property: Parcel of land with house and improvements in Dasmariñas Village, Makati (TCT No. 142177), subject to a mortgage in favor of Bank of the Philippine Islands (BPI).
- Contractual Agreements and Performance
- August 8, 1986 – Deed of Sale with Assumption of Mortgage:
- Downpayment of ₱800,000 fully paid.
- Vendee (Avelina) to assume and pay the ₱1,800,000 mortgage obligations including interest and charges as if originally executed by her.
- Vendor to bear capital gains tax and documentary stamps; vendee to bear registration and transfer taxes.
- Undertaking by Avelina (with Mariano’s consent) as part of the sale:
- Continue paying mortgage obligations in vendor’s name until BPI approves assumption.
- Violation of mortgage terms or nonpayment to forfeit all payments (₱800,000 + mortgage payments) as liquidated damages and automatically cancel the sale, restoring vendor’s ownership.
- Performance prior to default:
- Vendees paid monthly interest installments to BPI in September, October and November 1986 (totaling ₱74,150).
- December 15, 1986 – BPI disapproved the application for assumption of mortgage.
- Petitioners ceased further mortgage payments and did not pay the ₱1,800,000 balance.
- January 7, 1987 – Petitioners offered to pay the ₱1,800,000 balance in cash subject to three new conditions not found in the original contract.
- January 8, 1987 – Respondents sent a notarial notice of cancellation/rescission for petitioners’ failure to comply.
- Litigation history:
- February 9, 1987 – Petitioners filed for specific performance, nullity of cancellation, writ of possession and damages (RTC Makati Branch 149, Civil Case No. 15952).
- November 14, 1990 – RTC dismissed the complaint.
- May 15, 1991 – On petitioners’ motion, a successor judge granted reconsideration and directed payment of the balance and turnover of property.
- October 9, 1992 – Court of Appeals annulled the May 1991 order and reinstated the dismissal of the complaint.
- December 29, 1992 – CA denied petitioners’ motion for reconsideration.
Issues:
- Whether petitioners’ nonpayment of the mortgage obligations and the ₱1,800,000 balance constituted a breach of contract.
- Whether respondents’ rescission of the contract was justified.
- Whether the January 7, 1987 letter by petitioners imposed new conditions amounting to a mere offer or attempt at novation requiring respondents’ consent.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)