Case Summary (G.R. No. 107992)
Factual Background
The agreement stipulated a total purchase price of P3,500,000.00, to be paid in installments as detailed in the contract. The initial payment structure included a P700,000.00 down payment consisting of multiple installments, followed by quarterly amortizations for the remaining balance. The contract included a provision for rescission if Odyssey Park, Inc. failed to meet its payment obligations.
Events Leading to Rescission
Odyssey Park, Inc. made an initial down payment of P100,000.00 but subsequently failed to meet other payment deadlines, leading to a total of P110,000.00 paid by September 1983. The agreement was further complicated by a letter from Vicente A. Araneta of Europa Condominium Villas, Inc., questioning the propriety of the sale, which led Odyssey to halt payments.
Formal Rescission of Contract
On January 6, 1984, Union Bank formally rescinded the contract due to Odyssey’s failure to comply with payment terms and demanded the latter vacate the premises. Following Odyssey’s refusal to vacate, Union Bank filed a case for illegal detainer and damages, initiating further legal proceedings.
Lower Court's Judgment
The Regional Trial Court ruled in favor of Union Bank, determining that the Contract to Sell had been validly rescinded and dismissing Odyssey's complaint. The ruling was affirmed by the Court of Appeals, which found that Odyssey's appeals were largely factual and already considered by the lower courts.
Legal Issues Addressed
The primary legal issue revolved around whether the rescission of the Contract to Sell complied with the requirements of Republic Act No. 6552, which mandates a notarial act for rescission of contracts involving real estate payments. The Court concluded that this law is inapplicable as it does not cover commercial properties such as the one in question, thus Union Bank's written notice of rescission was sufficient.
Inapplicability of Relevant Civil Code Provisions
The Court examined the applicability of Article 1191 of the Civil Code regarding rescission in reciprocal obligations, determining it did not apply in this case as Odyssey's failure constituted a failure of condition rather than a breach of an extant obligation. Similarly, Article 1592 was deemed inappropriate as it pertains to absolute sales rather than contracts to sell.
Contractual Terms
...continue readingCase Syllabus (G.R. No. 107992)
Case Background
- The petition for review on certiorari challenges the decision dated September 7, 1992, of the Court of Appeals.
- The appellate court affirmed the ruling of the Regional Trial Court, Branch 152 of Pasig, Metro Manila, validating the rescission of a contract to sell between Odyssey Park, Inc. and Bancom Development Corporation.
Factual Narrative
- Contract Execution: On November 4, 1981, Bancom Development Corporation and Odyssey Park, Inc. entered into a Contract to Sell for an 8,499 square meter parcel of land in Baguio City, including the Europa Clubhouse.
- Transfer of Rights: On February 11, 1982, Bancom acknowledged the transfer of all rights to Union Bank of the Philippines regarding the property.
- Payment Terms: The purchase price of P3,500,000.00 required a down payment and subsequent quarterly amortizations over three years.
- Down payment structure included:
- P100,000 upon signing,
- P200,000 within 60 days,
- P400,000 within 90 days.
- Remaining balance to be paid in quarterly installments of P298,346.08.
- Down payment structure included:
- Contract Provisions: Section 5 of the contract allowed Bancom to rescind the agreement upon Odyssey's failure to comply with payment obligations, with forfeiture clauses detailed.
Payment History
- Initial down payment of P100,000 was made on November 26, 1981.
- Subsequent payments beyond stipulated periods totaled P110,000, with several payments documented from 1982 to 1983.
- Notable correspondence included a letter from Europa Condominium Vill