Case Summary (G.R. No. 96372)
Factual Background
Upon failure of the respondent to pay the remaining balance by the due date, the petitioners initiated an action for specific performance and damages at the Regional Trial Court (RTC) of Manila. The RTC, in a ruling dated 17 August 1984, ordered the rescission of the Deed of Conditional Sale. This decision was appealed, leading the Court of Appeals to rule on 21 November 1986, annulling the RTC's order and directing the respondent to pay the outstanding balance along with interest.
Procedural History
Petitioners filed a motion for execution of the Court of Appeals' decision, but the respondent opposed this motion. The RTC issued a writ of execution on 2 September 1988, which calculated the amount due as P197,723.68. Petitioners disputed this computation, claiming it did not accurately reflect the terms stipulated in the Deed of Conditional Sale regarding interest and penalties for late payment.
RTC's Decision
On 18 April 1990, the RTC rejected petitioners' motions for additional execution and reconsideration, stating it lacked jurisdiction to enlarge the scope of the decision by the Court of Appeals and interpreting the phrase “to pay interest” as referring only to legal interest accruing from the date of judgment rather than as per the conditional sale stipulations.
Court of Appeals’ Decision
Petitioners then filed an appeal with the Court of Appeals, which dismissed it for lack of merit, reiterating the previous RTC’s interpretation that the interest referred to in the judgment began from the date of judicial entry on 12 February 1987 and did not encompass the terms of the original Deed of Conditional Sale.
Legal Issues and Interpretation
The primary legal issues center on the interpretation of the contractual obligations regarding interest as stipulated in the Deed of Conditional Sale and the trial court's authority to modify the execution of the appellate court's final and executory decision. The petitioners contended that the original Deed specified that interest at 12% per annum and a 1% penalty would apply, which the RTC failed to recognize.
Doctrine and Law Applicable
Relevant to this case is Article 2209 of the Civil Code, which stipulates that in case of delay in the payment of a sum of money, the penalty for damages is the agreed interest or, in absence of stipulation, the legal interest which is set at 6% per annum. The interpretation of ambiguous clauses within judgments that have become final and executory allows courts to clarify any clerical errors or omissions.
Resolution
The Supreme Court determined that the lower courts’ interpretations failed to account for the specific terms laid out in the conditional sale. It ruled that the phrase “to pay interest” in the decision of the Court of Appeals must refer to the interest rates agreed upon in the Deed, rather than the legal interest referred to in the late pa
...continue readingCase Syllabus (G.R. No. 96372)
Case Overview
- The case revolves around a "Deed of Conditional Sale" entered into on October 15, 1982, between petitioners (Antonio L. Castelo, Bernabe B. Banson, Lourdes A. Banson, and Pompeyo Depante) and private respondent (Milagros Dela Rosa) concerning a parcel of land located at 1524 Espana Street, Sampaloc, Manila.
- The total price of the land was set at P269,408.00, with an initial payment of P106,000.00 made by Dela Rosa, leaving a balance of P163,408.00.
- The contract stipulated conditions regarding the payment of the remaining balance, including interest and penalties for late payment.
Contractual Obligations
- The Deed of Conditional Sale stipulated:
- The balance of P163,408.00 was to be paid on or before December 31, 1982, without interest or penalty.
- If unpaid by the deadline, a grace period of six months was allowed (until June 30, 1983), during which interest at 12% per annum and a penalty of 1% per month on the diminishing balance would apply.
- Dela Rosa failed to pay the remaining balance by the stipulated date.
Initial Legal Proceedings
- On July 29, 1983, petitioners filed a suit for specific performance with damages in the Regional Trial Court (RTC) of Manila against Dela Rosa.
- The RTC, in a decision dated August 17, 1984, rescinded the Deed of Conditional Sale, which led the petitioners to appeal to the Court of Appeals.
Court of Appeals Ruling
- The Court of Appeals, in a decision dated November 21, 1986, annulled the RTC's decision, allowing the amendment of the complaint and ordering Dela Rosa to comply with her obligations under the conditiona