CONGREGATION OF THE RELIGIOUS OF THE VIRGIN MARY v.
Respondents filed with the RTC a complaint with alternative
OROLA
Topic: Article 1381 (cf. Art. 1191) Types of Rescissible Contracts
SHORT ANSWERS:
Whos chasing who: Respondent Orola was chasing Petitioner for
the latter did not pay its remaining balance
When did the problem start: When petitioner failed to pay its
remaining balance
What documents were used in connection with the problem:
Contract to sell
FACTS:
Petitioner RVM and respondent Orola met to discuss the
sale of the latters property adjacent to St. Marys Academy.
Respondent Orola went to manila to see the Mother Superior
General of the RVM regarding the sale of the property.
A contract to sell was finalized. It included the names of
herein petitioner and respondents.
The property was to be sold to RVM in consideration of Php
5,555,000.00 with 10% of the total consideration payable
upon the execution of the contract which was already signed
by all the respondents and Sr. Enhenco as witness.
The said 10% down payment was acknowledged by Orola
amounting to Php 555,500.00.
Respondents then went to finalize the deal by collecting the
remaining balance of Php 4,999,500.00 from petitioners
herein but petitioners did not meet with respondents.
RVM then denied respondents demand for payment
because it was signed by a mere witness (Sr. Enhenco) and
that the property was payable in 2 years.
causes of action of specific performance or rescission.
RTC granted respondents prayer for rescission.
CA set aside the said rescission but granted respondents
prayer for specific performance.
ISSUE: WON it should be an action for rescission or specific
performance
HELD:
Specific performance
The CA was correct in setting aside the prayer for rescission
The CA, after failing to ascertain the parties actual intention
on the terms of payment for the sale, proceeded to apply
Articles 1383 and 1384 of the Civil Code declaring that
rescission as a subsidiary remedy that may be availed of
only when the injured party has no other legal means to
obtain reparation of the damage caused
Considering the absence of fraud and bad faith, the CA felt
that the most equitable resolution is to grant respondents
prayer of specific performance of the sale and ordered
RVM to pay the remaining balance of the purchase price
plus interest.
The CA mistakenly applied Articles 1383 and 1384. It is
evident from the allegations in the respondents
Complaint that the instant case does not fall within the
enumerated instances in Article 1381. Certainly, the
Complainant did not pray for the rescission of the contract
based on economic prejudice.
PETITION WAS DENIED. PETITIONER WAS ORDERD TO PAY
THE RESPONDENT PLUS INTEREST