Case Summary (G.R. No. 80058)
Factual Background
In November 1979, negotiations commenced between the petitioners and Lee Chuy Realty Corporation for the sale of their properties. On December 4, 1979, a down payment of P50,000 was tendered by the private respondent via a check, accompanied by a receipt outlining the terms of the sale. Petitioners accepted the check but provided a different receipt that modified the terms, notably omitting the total purchase price of P1,600,000.
Sequence of Events
On January 12, 1980, Rosalinda Ang sent a letter demanding the balance of the purchase price to be paid by January 24, 1980, warning of potential cancellation. In response, the private respondent asserted readiness to fulfill its obligations but highlighted that the petitioners had not completed their promise to clear the property. On March 3, 1980, the private respondent formally requested the refund of the down payment, leading to the filing of a legal complaint for recovery of the sum and damages due to petitioners' failure to comply with the agreement.
Initial Trial Court Ruling
The Regional Trial Court initially ruled in favor of the petitioners on June 23, 1983, granting them damages and ordering the private respondent to pay substantial amounts. However, both parties appealed this decision.
Court of Appeals Decision
The Court of Appeals, in a decision dated June 22, 1987, reversed the trial court's ruling, determining that the petitioners had breached the contract. The appellate court ordered petitioners to refund the P50,000 with accrued legal interest and additional attorney's fees.
Legal Analysis of the Breach
The paramount issue examined is whether the petitioners or the private respondent committed the breach. The appellate court confirmed the existence of a perfected contract evidenced by the down payment. It was determined that the omission of the sale price in the receipt signed by the petitioners was a material fact leading to ambiguity. Testimonies from both parties surrounding the agreed price led to the conclusion that petitioners were attempting to undervalue the property to reduce capital gains tax liability.
Nature of the Breach
The appellate court held that while the petitioners failed to fulfill key conditions of the contract—namely clearing the property and delivering a deed of sale—these were deemed incidental and not fundamental to the contract’s core obligations. The court established that rescission should only occur in cases of significant breaches.
Resolution of the Contract
The breach by petitioners was further solidified when they attempted to renegotiate the sale price, indicating a serious breach of contract. Gi
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Case Overview
- This case revolves around a petition for review on certiorari regarding the Court of Appeals' decision dated June 22, 1987.
- The appellate court reversed the Regional Trial Court's decision from June 23, 1983, which had dismissed the complaint of private respondent Lee Chuy Realty Corporation and awarded damages to petitioners Ernesto R. Ang and Rosalinda Ang.
- The central issue involves the breach of contract and the circumstances under which resolution of the contract may be warranted.
Parties Involved
- Petitioners: Ernesto R. Ang and Rosalinda Ang, siblings and owners of three parcels of land in Quezon City.
- Respondents: The Court of Appeals and Lee Chuy Realty Corporation, represented by its president, Henry Lee Chuy.
Background of the Case
- The Ang siblings owned three parcels of land acquired from the Cruz family on July 3, 1979, for a total of P680,000.00.
- In November 1979, negotiations began for the sale of the properties to Lee Chuy Realty Corporation.
- On December 4, 1979, the private respondent issued a check for P50,000.00 as a down payment, accompanied by a receipt outlining the agreement's terms.
Terms of Agreement
- The receipt indicated:
- The total price for the sale was set at P1,600,000.00.
- Petitioners were to clear the property of all occupants and obstructions by December 1979.
- Upon clearing, the deed of absolute sale was to be executed, with remai