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ARTICLE 1191

Areola v CA

FACTS:

December 17, 1984: Prudential Guarantee And Assurance, Inc.issued cllectr!s "r#isinal recei"t amuntin$ t P1,%&9.%'

(une )9, 198': 7 mnt*s a+ter t*e issuance + "etitiner SantsArela!s Persnal Accident Insurance Plic, Prudential GuaranteeAnd Assurance, Inc. unilaterall cancelled it +r +ailin$ t "a *is"remiums t*ru$* its mana$er Te-l . ala"it

S*c/ed b t*e cancellatin + t*e "lic, Sants a""rac*edCarlit An$, a$ent + Prudential and demanded t*e issuance + an

0cial recei"t. An$ tld Sants t*at it as a mista/e and assuredits recti-catin.

(ul 1', 198': Sants demanded t*e same terms and same rateincrease as *en *e "aid t*e "r#incial recei"t but ala"it insistedt*at t*e "artial "ament *e made as e2*austed and t*at *es*uld "a t*e balance r *is "lic ill cease t "erate

(ul )', 198' : Assistant 3icePresident arian . Am"il IIIa"l$i5ed

Au$ust %, 198' *ad -led a cm"laint +r breac* + cntract it*dama$es be+re t*e ler curt

Au$ust 16, 198': Sants recei#ed t*ru$* Carlit An$ t*e leeter +Assistant 3icePresident arian . Am"il II I -ndin$ errr n t*eir"art since "remiums ere nt remitted ala"it, "r"sed te2tend its li+etime t December 17, 198'

TC: +a#red Sants Prudential in ad Fait*

CA: e#ersed nt mti#ated b ne$li$ence, malice r bad +ait* incancellin$ subect "lic

ISS;: t*e Arelas can -le a$ainst dama$es des"ite t*e e?rtt recti+ t*e cancellatin

@;D: B;S. TC reinstated

ala"it!s +raudulent act + misa""r"riatin$ t*e "remiums "aid isbend dubt directl im"utable t Prudential

Art. 191&. T*e "rinci"al must cm"l it* all t*e bli$atins *ic*t*e a$ent ma *a#e cntracted it*in t*e sc"e + *is aut*rit.

As +r an bli$atin *erein t*e a$ent *as e2ceeded *is "er,t*e "rinci"al is nt bund e2ce"t *en *e rati-es it e2"ressl rtacitl.

Subseuent reinstatement culd nt "ssibl absl#e Prudentialt*ere bein$ an b#ius breac* + cntract

a cntract + insurance creates reci"rcal bli$atins +r bt*insurer and insured

Article 1191

c*ice beteen +ul-llment r rescissin + t*e bli$atin in casene + t*e bli$rs +ails t cm"l it* *at is incumbent u"n*im

entitles t*e inured "art t "ament + dama$es, re$ardless +*et*er *e demands +ul-llment r rescissin + t*e bli$atin

>minal dama$es are rec#erable *ere a le$al ri$*t istec*nicall #ilated and must be #indicated a$ainst an in#asint*at *as "rduced n actual "resent lss + an /ind, r *eret*ere *as been a breac* + cntract and n substantial inur ractual dama$es *atse#er *a#e been r can be s*n.

Other source:

Facts

A Persnal Accident Insurance Plic as issued t t*e "etitinerb res"ndent cm"an

Pri#ate res"ndent cancelled t*e same since cm"an recrdsre#ealed t*at P +ailed t "a *is "remiums

It as submitted t*at t*e +raudulent act + ala"it, mana$er +P!s branc* 0ce in a$ui in misa""r"riatin$ +unds is t*e"r2imate cause + cancellatin + t*e "lic

P rdered +r reinstatement + insurance "lic

@e#er, cm"laint +r breac* + cntract it* dama$es *adalread been -led b P

Issues

1. errneus cancellatin + insurance "lic entitle "etitinerinsured t "ament + dama$esE

). reinstatement + insurance "lic in rder t recti+ t*eerrr, bliterate t*e liabilit +r dama$esE

ulin$

Cntract + insurance creates reci"rcal bli$atins +r bt*insurer and insured

nder Art. 1191 ), t*e inured "art is $i#en a c*ice beteen+ul-llment r rescissin + bli$atin in case ne + t*e bli$rs+ails t cm"l it* *at is incumbent u"n *im. Said articleentitles inured "art t "ament + dama$es *et*er *e deman+ul-llment r rescissin. ntenable t*en is P!s ar$ument, namelreinstatement bein$ eui#alent t +ul-llment + its bli$atin,di#ests "etitiner!s ri$*t+ul claim #er dama$es

P s*uld be aarded it* dama$es nminal dama$es since nsubstantial inur r actual dama$es *a#e been s*n.

Facts only

FACTS: Sants Arela, a laer +rm Da$u"an Cit, a#ailed + aPersnal Accident InsurancePlic +rm Prudential, but se#enmnt*s a+ter t*e issuance + t*e "lic, Hn (une )9,198',Prudential unilaterall cancelled t*e "lic because cm"anrecrds re#ealed t*at Arela+ailed t "a *is "remiums.A +e dalater, *e#er, Prudential +und ut t*at Arela actuall "aid t*e"remiums andt*at t*e branc* mana$er, Te-l ala"it, +ailed tremit t*em. T*us, Prudential ?ered treinstate t*e "lic ande#en "r"sed t e2tend its li+etime t December 17, 198'.Are-led a suit +r breac* + cntract and dama$es a$ainst Prudentia

Sme details abut t*e "lic

Hbtained +rm a$ui branc* + Prudential, +r ne ear >#1984># 198', "remium +147& but ttal mnt*l as 1%&9.'dc stam" 11&.)', ) "remium ta2 + )9.4. T*e "licstates t*t*e Statement + Accunt is nt a recei"t and an 0cial recei"t be $i#en a+ter"ament but i+ "ament is dne t*ru$* are"resentati#e, "ar ill be $i#en a "r#isinalrecei"t. Arela $i#en "r#isinal recei"t but ala"it ust +ailed t remit andt*ere+reArela recei#ed n 0cial recei"t. Arela sent demandletters +r immediate reinstatement,ban/ a"l$i5ed but did ntimmediatel reinstate, s *e -led t*e case. T*e insurancea$entas Carlit An$.

Ong v CA

Facts

Petitiner (aime Hn$ and es"ndent s"uses bles anJA$reement + Purc*ase and SaleK >ta ene: Cntract t Sell

it* re$ards t "arcels + land it* a rice mill and "i$$ersituated at Lue5n +r P). As "art + t*e terms and cnditins,"etitiner s*all ad#ance dn"ament + 6&&M, s*all "a t*e la+ t*e s"uses + t*e ban/, and ill "a t*e balance + t*e"urc*ase "rice uarterl.

Petitiner as able t "a t*e dn"ament and subseuentlccu"ied t*e "r"ert. @e#er, *e $a#e t*e s"uses "stdatedc*ec/s *ic* ere dis*nred due t insu0cient +unds. T ma/e rse, *e as nt able t +ull "a t*e lan + t*e s"uses in t*eban/.

T*e ban/ t*reatened t +reclse t*e mrt$a$e, s *at t*es"uses did as t sell t*ree + t*e trans+rmers + t*e rice mill irder t satis+ t*e lan bli$atin.

es"ndents n ant t rescind t*e cntract n accunt + Hn$nn+ul-llment + bli$atin and see/ t rec#er t*e "r"ert it

dama$es.TC u"*eld t*e rescissin and rdered mutual restitutin as ell aarded e2em"lar dama$es. T*e CA deleted t*e aard +e2em"lar dama$es.

Issue:

1. t*e res"ndent s"uses ma rescind t*e cntractE B;S,but rescind t*ru$* 1191 and nt 1681.

). t*ere as n#atin + bli$atinE >H. ut e nNt tac/it *ere et.

@eld:

T*e bles s"uses bund t*emsel#es t deli#er a deed +abslute sale and clean title c#erin$ t*e t "arcels + land u"+ull "ament b t*e buer + t*e "urc*ase "rice + P),&&&,&&&.&&since it is a cntract t sell dibaE T*is "rmise t sell as subet t*e +ul-llment + t*e sus"ensi#e cnditin + +ull "ament + t*

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"urc*ase "rice b t*e "etitiner. Petitiner, *e#er, +ailed tcm"lete "ament + t*e "urc*ase "rice. T*e nn+ul-llment + t*ecnditin + +ull "ament rendered t*e cntract t sell ine?ecti#eand it*ut +rce and e?ect.

It must be stressed t*at t*e breac* cntem"lated in Article 1191+ t*e >e Ci#il Cde is t*e bli$rNs +ailure t cm"l it* anbli$atin. Failure t "a, in t*is instance, is nt e#en a breac* butmerel an e#ent *ic* "re#ents t*e #endrNs bli$atin t cn#etitle +rm acuirin$ bindin$ +rce. @ence, t*e a$reement + t*e"arties in t*e case at benc* ma be set aside, but nt because + abreac* n t*e "art + "etitiner +r +ailure t cm"lete "ament +t*e "urc*ase "rice. at*er, *is +ailure t d s bru$*t abut asituatin *ic* "re#ented t*e bli$atin + res"ndent s"uses tcn#e title +rm acuirin$ an bli$atr +rce.

1191 #s. 1681

Alt*u$* bt* "resu""se cntracts #alidl entered int andsubsistin$ and bt* reuire mutual restitutin *en "r"er, t*eare nt entirel identical. Articles 168& is a remed $ranted b lat t*e cntractin$ "arties and e#en t t*ird "ersns, t secure t*ere"aratin + dama$es caused t t*em b a cntract, e#en i+ t*iss*uld be #alid, b restratin + t*in$s t t*eir cnditin at t*emment "rir t t*e celebratin + t*e cntract. It im"lies acntract, *ic* e#en i+ initiall #alid, "rduces a lesin r a"ecuniar dama$e t smene. Article 1191 + t*e >e Ci#il Cdere+ers t rescissin a""licable t reci"rcal bli$atins. escissinunder Article 1191 is a "rinci"al actin *ic* is based n breac* +a "art, *ile rescissin under Article 1681 is a subsidiar actinlimited t cases + rescissible cntracts.

UP v Delos Angeles

FACTS:

Hn >#ember ), 19%&, P and ACH entered int a l$$in$a$reement *ereb t*e latter as $ranted e2clusi#e aut*rit tcut, cllect and rem#e timber +rm t*e and Grant +r a "eridstartin$ +rm t*e date + a$reement t December 61, 19%',e2tendible +r a "erid + ' ears b mutual a$reement.

Hn December 8, 19%4, ACH incurred an un"aid accunt +P)19,6%).94. Des"ite re"eated demands, ACH still +ailed t"a, s P sent a ntice t rescind t*e l$$in$ a$reement. Hn t*et*er *and, ACH e2ecuted an instrument entitledJAc/nled$ment + Debt and Pr"sed anner + Paments. Itas a""r#ed b t*e "resident + P, *ic* sti"ulated t*e+llin$:

6. In t*e e#ent t*at t*e "aments called +r are nt su0cient tliuidate t*e +re$in$ indebtedness, t*e balance utstandin$a+ter t*e said "aments *a#e been a""lied s*all be "aid b t*edebtr in +ull n later t*an (une 6&, 19%'.

'. In t*e e#ent t*at t*e debtr +ails t cm"l it* an + its"rmises, t*e Debtr a$rees it*ut reser#atin t*at Creditr s*all*a#e t*e ri$*t t cnsider t*e $$in$ A$reement rescinded,it*ut t*e necessit + an udicial suitO ACH cntinued itsl$$in$ "eratins, but a$ain incurred an un"aid accunt. Hn (ul19,19%', P in+rmed ACH t*at it *ad, as + t*at date,cnsidered rescinded and + n +urt*er le$al e?ect t*e l$$in$a$reement, and t*at P *ad alread ta/en ste"s t *a#e ant*ercncessinaire ta/e #er t*e l$$in$ "eratin. ACH -led a"etitin t enin P +rm cnductin$ t*e biddin$. T*e ler curtruled in +a#r + ACH, *ence, t*is a""eal.

ISS;:

Can "etitiner P treat its cntract it* ACH rescinded, andma disre$ard t*e same be+re an udicial "rnuncement t t*ate?ectE

I>G:

Bes. In t*e -rst "lace, P and ACH *ad e2"ressl sti"ulatedt*at u"n de+ault b t*e debtr, P *as t*e ri$*t and t*e "er tcnsider t*e $$in$ A$reement + December ), 19%& asrescinded it*ut t*e necessit + an udicial suit. As t suc*s"ecial sti"ulatin and in cnnectin it* Article 1191 + t*e Ci#ilCde, t*e Su"reme Curt, stated in Frilan #s. Pan HrientalS*i""in$ C:

JT*ere is nt*in$ in t*e la t*at "r*ibits t*e "arties +rm enterin$int a$reement t*at #ilatin + t*e terms + t*e cntract uldcause cancellatin t*ere+, e#en it*ut curt inter#entin. In

t*er rds, it is nt alas necessar +r t*e inured "art tresrt t curt +r rescissin + t*e cntract.K

Other source:

FACTS:

P as $i#en a land $rant *ic* s*all be de#el"ed t btainadditinal incme +r its su""rt.

P and ACH entered int a l$$in$ a$reement *ereACH as $ranted t*e e2clusi#e aut*rit +r an e2tendible"erid + ' ears b mutual a$reement, t cut and rem#etimber +rm t*e land $rant incnsideratin + ralties and +ees tbe "aid t P.

ACH incurred an un"aid amunt + P)19,6%6. P demande"ament but it +ailed t "a. ACH recei#ed a letter t*at Puld rescind r terminate t*eir l$$in$ a$reement. T*ee2ecuted an instrument JAc/nled$ement + Debt Q Pr"sedanner + PamentK *ic* t*e P President a""r#ed. ACHa$reed t $i#e t*eir creditr P t*e ri$*t t cnsider t*e l$$in$a$reement as rescinded it*ut necessit + an udicial suit andcreditr ill be entitled t P'&,&&& +r liuidated dama$es.

ACH cntinued l$$in$ but still incurred un"aid accunts. t*en in+rmed t*em t*at as + t*at date, t*e cnsideredrescinded t*e a$reement and + n +urt*er le$al e?ect. P t*en-led +r cllectin + t*e un"aid accunts and t*e trial curt $a#et*em "reliminar inunctin t "re#ent ACH +rm cntinuin$t*eir l$$in$.

T*ru$* a "ublic biddin$, t*e cncessin as aarded t Sta.Clara umber Cm"an and a ne a$reement as entered int

beteen t*em and P. ACH tried t enin t*e biddin$ but t*e cntract as alreadcncluded and Sta. Clara started its "eratin.

"n mtin b ACH, P as declared in cntem"t + curt+r #ilatin$ t*e rit + inunctin a$ainst t*em.

ACHNs cntentins are t*e +llin$:

a. It blamed its +rmer $eneral mana$er +r t*eir +ailure t "at*eir accunt.

b. $s cut ere rttenR t*us, t*e ere unable t sell t*em.

c. PNs unilateral rescissin as in#alid it*ut a curt rder.

ISS;: P can #alidl rescind its a$reement it* ACHe#en it*ut curt rder. Bes. P can unilaterall rescind t*ea$reement.

@;D:

P and ACH e2"ressl sti"ulated in t*eir JAc/nled$emen+ DebtK t*at u"n de+ault + "ament, creditr P *as t*e ri$*tand "er t rescind t*eir $$in$ A$reement it*ut t*enecessit + a udicial suit.

T*ere is nt*in$ in t*e la t*at "r*ibits t*e "arties +rmenterin$ int a$reements t*at #ilatin + terms + t*e cntractuld cause its cancellatin e#en it*ut curt inter#entin.

Act + a "art in treatin$ a cntract as cancelled n accunt +an in+ractin b t*e t*er "art must be made /nn t t*e t*and is alas "r#isinal, bein$ subect t scrutin and re#ie bt*e "r"er curt. I+ t*e t*er "art deems t*e rescissinunusti-ed, *e +ree t resrt t udicial actin. T*e curt s*all, a+tdue *earin$, decide i+ t*e rescissin as "r"er, in *ic* case it

ill be a0rmed and i+ nt "r"er, t*e res"nsible "art ill beliable +r dama$es.

A "art * deems t*e cntract #ilated ma cnsider itrescinded and act accrdin$l, e#en it*ut curt actin but it"rceeds at its n ris/. Hnl t*e -nal ud$ment + t*e curt illcnclusi#el settle *et*er t*e actin ta/en as "r"er r nt. t*e la des nt "r*ibit t*e "arties +rm e2ercisin$ due dili$enct minimi5e t*eir n dama$es.

P as able t s* a "rima +acie case + breac* + cntract ande+ault in "ament b ACH. ;2cuses b ACH are nt"r"er +r t*em t sus"end t*eir "aments.

Froilan v Pan Oriental

Facts:

Plainti?, Fernand Frilan -led a cm"laint a$ainst t*e de+endanta""ellant, Pan Hriental S*i""in$ C., alle$in$ t*at *e "urc*ased

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+rm t*e S*i""in$ Cmmissin t*e #essel +r P)&&,&&&, "ain$P'&,&&& dn and a$reein$ t "a t*e balance in instalments. Tsecure t*e "ament + t*e balance + t*e "urc*ase "rice, *ee2ecuted a c*attel mrt$a$e + said #essel in +a#r + t*e S*i""in$Cmmissin. Fr #arius reasns, amn$ t*em t*e nn"ament +t*e installments, t*e S*i""in$ Cmmissin tl "ssessin + said#essel and cnsidered t*e cntract + sale cancelled. T*e S*i""in$Cmmissin c*artered and deli#ered said #essel t t*e de+endanta""ellant Pan Hriental S*i""in$ C. subect t t*e a""r#al + t*ePresident + t*e P*ili""ines. Plainti? a""ealed t*e actin + t*eS*i""in$ Cmmissin t t*e President + t*e P*ili""ines and, in itsmeetin$ t*e Cabinet restred *im t all *is ri$*ts under *is ri$inalcntract it* t*e S*i""in$ Cmmissin. Plainti? *ad re"eatedl

demanded +rm t*e Pan Hriental S*i""in$ C. t*e "ssessin +t*e #essel in uestin but t*e latter re+used t d s.

Plainti?, "raed t*at, u"n t*e a""r#al + t*e bnd accm"anin$*is cm"laint, a rit + re"le#in be issued +r t*e sei5ure + said#essel it* all its eui"ment and a""urtenances, and t*at a+ter*earin$, *e be adud$ed t *a#e t*e ri$*t+ul "ssessin t*ere+ .

T*e ler curt issued t*e rit + re"le#in "raed +r b Frilanand b #irtue t*ere+ t*e Pan Hriental S*i""in$ C. as di#ested +its "ssessin + said #essel.

Pan Hriental "rtested t t*is restratin + Plainti? s ri$*ts undert*e cntract + sale, +r t*e reasn t*at *en t*e #essel asdeli#ered t it, t*e S*i""in$ Administratin *ad aut*rit tdis"se + said aut*rit t t*e "r"ert, Plainti? *a#in$ alreadrelinuis*ed *ate#er ri$*ts *e ma *a#e t*eren. Plainti? "aidt*e reuired cas* + P1&,&&&.&& and as Pan Hriental re+used tsurrender "ssessin + t*e #essel, *e -led an actin t rec#er"ssessin t*ere+ and *a#e *im declared t*e ri$*t+ul ner +said "r"ert. T*e e"ublic + t*e P*ili""ines as alled tinter#ene in said ci#il case "rain$ +r t*e "ssessin + t*e inrder t*at t*e c*attel mrt$a$e cnstituted t*eren ma be+reclsed.

Issues:

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Calasan5 D demanded "ament + "ast due accunts, but did ntrecei#e an. ;#entuall, Calansan5 D canceled t*e said cntractbecause An$eles P +ailed t "a t*e subseuent "aments.An$eles P as/ed +r recnsideratin, but as denied.

An$eles P -led a case t cm"el t*e Calasan5 D t e2ecute int*eir +a#r t*e -nal deed + sale alle$in$ t*at t*e *a#e alread+ull "aid t*e ttal "rice + t*e "r"ert. Calasan5 D alle$ed int*eir anser t*at An$eles P #ilated t*e cntract t sell *ent*e +ailed t "a a mnt*l installment.

A "r#isin in t*e cntract t sell $a#e Calasan5 D t*e ri$*t tcancel t*e cntract and cnsider t*e amunts "aid as rent +r t*e"r"ert. @e#er, t*e ler curt ruled t*at t*e cntract as nt

#alidl canceled and rdered Calasan5 D t e2ecute a -nal Deed+ Sale in +a#r + An$eles P

Issues: . T*e rule t*at it is nt alas necessar +r t*e inured"art t resrt t curt +r rescissin + t*e cntract *en t*ecntract itsel+ "r#ides as uali-ed b t*is Curt in ni#ersit +t*e P*ili""ines #. De ls An$eles, 6' SCA 1&) *ere ee2"lained "ara"*rased t*at:

H+ curse, t*e act + a "art in treatin$ a cntract as canceled rresl#ed n accunt + in+ractins b t*e t*er must be made/nn t t*e t*er and is alas "r#isinal, bein$ e#er subect tscrutin and re#ie b t*e "r"er curt. I+ t*e t*er "art deniest*at rescissin is usti-ed, it is +ree t brin$ t*e matter t curt.

T*en, s*uld t*e curt decide t*at t*e reslutin + t*e cntractas nt arranted, t*e res"nsible "art ill be sentenced tdama$esR in t*e cntrar case, t*e reslutin ill be a0rmed andindemnit aarded t t*e "art "reudiced.In s*rt, t*e "art * deems t*e cntract #ilated man cnsiderit resl#ed r rescinded it*ut "re#ius curt actin, but it"rceeds at its n ris/. Fr it is nl t*e -nal ud$ment + t*ecurt t*at ill cnclusi#el and -nall settle *et*er t*e actinta/en as r as nt crrect in la.

T*e ri$*t t rescind t*e cntract +r nn"er+rmance + ne + itssti"ulatins, t*ere+re, is nt abslute. In ni#ersal FdCr"ratin #s. Curt + A""eals 66 SCA 1 t*e Curt stated t*at:

T*e $eneral rule is t*at rescissin + a cntract ill nt be"ermitted +r a sli$*t r casual breac*, but nl +r suc*substantial and +undamental breac* as uld de+eat t*e #erbect + t*e "arties in ma/in$ t*e a$reement. Sn$ F Q C. #s.@aaiianP*ili""ine C., 47 P*il. 8)1 T*e uestin + *et*er abreac* + a cntract is substantial de"ends u"n t*e attendant

circumstances. Cr"us #s. Ali/"ala, G )67&7 Q )67)&,(anuar 17, 19%8

T*e breac* + t*e cntract alle$ed b Calasan5 D is s sli$*tcnsiderin$ t*at An$eles P *ad alread "aid mnt*l installments+r almst nine ears. In nl a s*rt time, t*e entire bli$atinuld *a#e been "aid. T sanctin t*e rescissin made bCalasan5 D ill r/ inustice t An$eles P and unustl enric*Calasan5 D.

Article 1)64 + t*e Ci#il Cde *ic* "r#ides t*at:

I+ t*e bli$atin *as been substantiall "er+rmed in $d +ait*,t*e bli$r ma rec#er as t*u$* t*ere *ad been a strict andcm"lete +ul-llment, less dama$es su?ered b t*e bli$ee.

als militates a$ainst t*e unilateral act + t*e Calasan5 P incancellin$ t*e cntract.

Other source:

FACTS:

Hn December 19, 19'7, de+endantsa""ellants rsula TrresCalasan5 and "lainti?sa""ellees uena#entura An$eles and

Te-la (uani entered int a cntract t sell a "iece + land lcatedin Cainta, i5al +r t*e amunt + P6,9)&.&& "lus 7 interest "erannum. T*e "lainti?sa""ellees made a dn"ament + P69).&&u"n t*e e2ecutin + t*e cntract. T*e "rmised t "a t*e

balance in mnt*l installments + P41.)& until +ull "aid, t*einstallment bein$ due and "aable n t*e 19t* da + eac* mnt*.

T*e "lainti?sa""ellees "aid t*e mnt*l installments until (ul19%%, *en t*eir a$$re$ate "ament alread amunted tP4,'66.68.

Hn December 7, 19%%, t*e de+endantsa""ellants rte t*e"lanti?sa""ellees a letter reuestin$ t*e remittance + "ast dueaccunts. Hn (anuar )8, 19%7, t*e de+endantsa""ellants

cancelled t*e said cntract because t*e "lainti?s +ailed t meetsubseuent "aments. T*e "lainti?sN letter it* t*eir "lea +rrecnsideratin + t*e said cancellatin as denied b t*ede+endants.

T*e "lainti?sa""ellees -led a case be+re t*e Curt + FirstInstance t cm"el t*e de+endant t e2ecute in t*eir +a#r t*e -ndeed + sale alle$in$ inter alia t*at a+ter cm"utin$ all subseue"aments +r t*e land in uestin, t*e +und ut t*at t*e *a#ealread "aid t*e ttal amunt includin$ interests, realt ta2es anincidental e2"enses. T*e de+endants alle$ed in t*eir anser t*att*e "lainti?s #ilated "ar. % + t*e cntract t sell *en t*e +aileand re+used t "a and=r ?er t "a mnt*l installmentscrres"ndin$ t t*e mnt* + Au$ust, 19%% +r mre t*an 'mnt*s, t*ereb cnstrainin$ t*e de+endants t cancel t*e saidcntract.

T*e Curt + First Instance rendered ud$ment in +a#r + t*e"lainti?s, *ence t*is a""eal.

ISS;:

@as t*e Cntract t Sell been autmaticall and #alidl cancelledb t*e de+endantsa""ellantsE

I>G: >.

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t das, t*e "lainti?s res"nded and ad#ised t*e #endr t*at *eis illin$ t "a "r#ided t*at r. amund: 1 deli#ers actual"ssessin + t*e "r"ert t t*em nt later t*an (anuar 1', 1987+r t*eir ccu"anc ) causes t*e release + title and mrt$a$e+rm t*e PI and ma/e t*e title a#ailable and +ree +rm an liensand encumbrances 6 e2ecutes an abslute deed + sale in t*eir+a#r +ree +rm an liens and encumbrances nt later t*an (an. )1,1987.

T*e TC + a/ati dismissed t*e cm"laint + t*e "etitinersa$ainst r. amund +r s"eci-c "er+rmance, nullit +cancellatin, rit + "ssessin and dama$es. @e#er, t*eirtin +r ecnsideratin as $ranted and t*e Curt instructed"etitiners t "a t*e balance + P 1.8 millin t "ri#ateres"ndent *, in turn ere rdered t e2ecute a deed +abslute sale and t surrender "ssessin + t*e dis"uted "r"ertt "etitiners.

"n t*e a""eal + t*e "ri#ate res"ndent t t*e CA, t*e curtu"*eld t*e earlier decisin + t*e TC re$ardin$ t*e #alidit + t*erescissin made b "ri#ate res"ndents.

ISS;:

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Immediatel, u"n e2ecutin b t*e DP + t*e deed +cancellatin + mrt$a$e, Sin$sns tried t cntact Tan and=r *erdau$*ter Cra5n t cme t a$ui Cit +r t*e +rmal e2ecutin+ t*e deed + sale, but t n a#ail. Instead, a""ellants recei#ed atele$ram +rm Att. Luitrian cancellin$ t*e sale and demandin$t*e return + t*e P)&&/ earnest mne.

A""ellants cuntered it* a letter + t*eir laer, Att. Ti-stdes, callin$ n a""ellee t "er+rm *er "art + t*e cntractbecause t*e title t t*e *use and lt ri$*t n su?ers nim"er+ectin r dubt.

Tan t*en -led a case +r rec#er + sum + mne it* dama$es,

ISS;: T@;; TIA ;AC@ B T@; SPHS;S,

;ITI>G ;SCISSIH> HF T@; CH>TACTE@;D: >H. T*at t*e "er t rescind bli$atins is im"lied inreci"rcal nes in case ne + t*e bli$rs s*uld nt cm"l it**at is incumbent u"n *im is clear +rm a readin$ + t*e Ci#ilCde "r#isins. @e#er, it is euall settled t*at, in t*e absence+ a sti"ulatin t t*e cntrar, t*is "er must be in#/ed

udiciallR it cannt be e2ercised slel n a "art!s n ud$mentt*at t*e t*er *as cmmitted a breac* + t*e bli$atin.

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as lessee, in t*e same -rm. "n *earin$ t*e cause t*e trial curtabsl#ed t*e de+endants +rm t*e cm"laint and t*e "lainti?sa""ealed.

> transcri"t + t*e ral testimn a""ears in t*e recrd, it* t*eresult t*at ur #ie + t*e case ill be limited t t*e uestins +la arisin$ u"n t*e +acts +und b t*e trial curt, in cnnectinit* t*e letter ;2*ibit M re+erred t in t*e "inin.

It a""ears t*at b cntract dated Se"tember 1, 19)&, t*e "lainti?s,as ners + a "arcel + land n Ga$alan$in Street, Tnd District,anila, let t*e same, it* t*e im"r#ements t*eren, t t*e -rm+ (acint, Palma @ermans, S. C., +r t*e term + -+teen ears ata mnt*l rental + P4&& "aable in ad#ance durin$ t*e -rst ten

das + eac* mnt*. Amn$ t*e "r#isins cntained in t*iscntract e nte clause 9, *ic* is t t*e e?ect t*at t*e terms andcnditins + t*e cntract s*all be bli$atr u"n and redund tt*e bene-t + t*e "ersns cm"sin$ t*e lessee -rm, t*eir *eirse2ecutrs, administratrs, successrs and assi$ns, as ell as t*esuccessrs and assi$ns + t*e lessrs. T*e lessee entered u"n t*e"ssessin + t*e leased "remises u"n t*e date ab#e statedRand t*e "ament + t*e a$reed rental as cntinued until>#ember and December + t*e ear 19)6, +r *ic* mnt*s t*erent +ell int arrears.

ean*ile se#eral successi#e rer$ani5atins + t*e lessee -rm*ad been e?ected as +lls: T*e -rst lessee, (acint, Palma @ermans, S. C., as succeeded b t*e -rm + P. Q F. (acint, andt*e latter in turn b t*e -rm + Palma rt*ers Q C., td., t beitsel+ a$ain succeeded b Palma Q C,. a cr"ratin. T*e "lainti?sere in+rmed + t*ese c*an$es in t*e "ersnalit + t*e lessee

and, as t*e trial curt +und, acuiesced t*erein.In #ie + t*e de+ault in t*e "ament + t*e mnt*l rental +r t*emnt*s + >#ember and December, 19)6, r. Gre$ri Araneta,as attrne +r anuel is, addressed a letter, n December )7,19)6, t a+ael Palma, as "artner in t*e ri$inal -rm and its +rmermana$er. In t*e curse + t*is letter t*e riter as/ed r. Palma, incase t*e lessee culd nt cntinue t "a t*e rent, t return t*e"r"ert at nce t is, it*ut "reudice t ulterirres"nsibilit +r dama$es +r breac* + cntract. T*e riteradded t*at is desired "rm"t actin in t*e matter and t*at *emust *a#e "ssessin + t*e "r"ert n r be+re t*e )9t* + t*emnt*, t*erise *e uld be cm"elled t be$in a detainer suit.

In res"nse t t*is demand t*e ccu"ant, Palma rs. Q C., td.,r Palma Q C., r *e#er *ad actual "ssessin, #acated t*e"remises n December )9, $i#in$ nti-catin t t*e "lainti?anuel is, * at nce assumed "ssessin. #ember and December, 19)6, *assubseuentl been "aidR but t*e "remises a""ear t *a#e beenentirel #acant durin$ t*e mnt*s + (anuar and Februar, 19)4,and +r t*is "erid n cm"ensatin *as been "aid t t*e "lainti?sb an ne. e$innin$ it* arc*, 19)4, t*e "r"ert as let bt*e "lainti?s +r a term + t*ree ears, reneable +r ant*ert*ree, t t*e -rm + it is an inse"arable incident + reslutir rescissin t*at t*e "arties are bund t restre t eac* t*t*e t*in$ *ic* *as been t*e subect matter + t*e cntra"recisel as in t*e situatin *ere a decree + nullit is $ranted. t*e cmmn case + t*e reslutin + a cntract + sale +r +ailu+ t*e "urc*aser t "a t*e sti"ulated "rice, t*e seller is entitled be restred t t*e "ssessin + t*e t*in$ sld, i+ it *as alreadbeen deli#ered. ut *e cannt *a#e bt* t*e t*in$ sld and t"rice *ic* as a$reed t be "aid, +r t*e reslutin + t

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cntract *as t*e e?ect + destrin$ t*e bli$atin t "a t*e"rice. Similarl, in t*e case + t*e reslutin, r rescissin, + acntract + lease, t*e lessr is entitled t be restred t t*e"ssessin + t*e leased "remises, but *e cannt *a#e bt* t*e"ssessin + t*e leased "remises +r t*e remainder + t*e termand t*e rent *ic* t*e t*er "art *ad cntracted t "a. T*eterminatin + t*e lease *as t*e e?ect + destrin$ t*e bli$atint "a rent +r t*e +uture.

T*e dama$es r indemnit cnceded in case + reslutin barticle 11)4 and t*e dama$es cnceded b article 1''% in t*ecase + t*e rescissin + a lease *a#e re+erence t t*e dama$es +rt*e de+ault *ic* $a#e rise t t*e ri$*t t terminate t*e lease. In acase + t*e /ind n be+re us it uld c#er rent in arrears anddama$e dne b t*e lessee t t*e leased "remises r t*er s"ecialdama$es in "articular cases resultin$ +rm nn"er+rmance + t*elessee!s bli$atin. n reasnable inter"retatin + t*ese"r#isins can t*e indemnit r dama$es be understd ase2tendin$ t*e rent +r t*e +uture, inasmuc* as t*e terminatin +t*e lease abr$ated liabilit +r +uture rent.

It is interestin$ t bser#e t*at t*e #er "int under cnsideratinas "assed u"n b t*e creatrs + t*e Ci#il Cde, *ile t*at r/as in "r$ress + ma/in$R and t*e manner in *ic* t*e articles*ic* e *a#e been discussin$ are e2"ressed demnstrates anintentin t eliminate dama$es in lieu + +uture rent *en t*elessr elects t rescind. In t*is cnnectin it a""ears t*at t*ePrect + t*e Ci#il Cde + 18'1 e2"ressl declared, in article184&, t*at i+ t*e cntract + lease s*uld be resl#ed +r de+ault +t*e lessee, *e s*uld be reuired, in additin t t*er dama$esinVicted u"n t*e lessr, t "a t*e a$reed rental +r t*e *le"erid + time t*at mi$*t ela"se until ant*er lease s*uld bemade. T*is "r#isin as nt incr"rated in t*e ultimate Ci#ilCdeR and t*is is a $d indicatin t*at t*e aut*rs + t*e Cdet*u$*t it unise t "lace t*is liabilit u"n t*e lessee. 1&anresa, )nd ed., '4%.

T*e uris"rudence + t*e cmmn la ill be +und t be in*armn it* t*e cnclusin reac*ed ab#eR +r t*e situatin it**ic* e are cn+rnted is t*at *ic* is called in t*e cmmn laa surrender, and b t*e cnsensus + aut*rit a surrender *as t*ee?ect + abr$atin$ t*e liabilit + t*e lessee +r +uture rent. 6' C.

(., 1&9'R 1% . C. ., 976.

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6. T "a t*e e2"enses + t*e e2ecutin + t*e instrumentcntainin$ t*e cntract.

AT. 1''%. Failure n t*e "art + t*e lessr r lessee tcm"l it* t*e bli$atins mentined in t*e ne2t"recedin$ articles s*all be $rund +r t*e rescissin + t*ecntract and t*e rec#er + dama$es, r t*e latter nllea#in$ t*e cntract in +rce.

Frm t*e articles uted it is clear t*at aard + dama$es t t*e"reudiced "art is ne + t*e le$al cnseuences + t*e reslutinr rescissin + a cntract. T*e measure + dama$es in cases +breac* + cntract is t*us sated in article 11&% + t*e Ci#il Cde:

T*e "ament + dama$es s*all include nt nl t*e

amunt + t*e lss *ic* ma *a#e been su?ered, butals t*at + t*e "r-t *ic* t*e creditr ma *a#e +ailedt reali5e, . . . .

It seems t me t*at t*e lan$ua$e + t*e Cde is s clear ande2"licit t*at t*ere is n rm +r s"ecial udicial inter"retatin. T*ede+endants breac*ed t*e lease. Actin$ n t*e su$$estin + t*e"lainti?s! attrne, t*e elected t discntinue "ament + rentand t resl#e t*e cntract subect t t*eir liabilit +r dama$es.nder t*e Cde, t*e dama$es included nt nl t*e amunt + t*elss *ic* t*e "lainti?s mi$*t until t*en *a#e su?ered, but alst*at + t*e lss + "r-ts *ic* t*e *a#e +ailed t reali5e breasn + t*e breac* + t*e cntract and its cnseuent reslutin." t t*e time + t*e reslutin t*e *ad su?ered n dama$es,"r"erl s"ea/in$R t*e t mnt*!s rent t*en #erdue as acntractual bli$atin n t*e "art + t*e de+endants and nt aliabilit e& delicout is nt dis"uted t*at t*e "lainti?s e#entuall

su?ered a lss + "r-ts due t t*e reslutin + t*e cntract. T*ede+endants! lease called +r "ament + rent at t*e rate + P4&&"er mnt*R t*e "lainti?s ere unable t btain ant*er tenant untilt mnt*s a+ter t*e reslutin + t*e lease, t*us su?erin$ a lss+ P8&& durin$ t*at "eridR +rm arc* 1, 19)4, until t*e mnt* +>#ember + t*e same ear, *en t*e case as tried, t*erecei#ed nl P)'& "er mnt* in rent entailin$ a lss in t*eamunt + P1,6'& +r t*at "erid. T*ese lsses *a#e been +ull"r#en and it des nt a""ear t*at t*e "lainti?s did nt use duedili$ence in endea#rin$ t minimi5e t*em. Ad"tin$ as a criterint*e "r#isins + article 11&%, su!ra, t*e ttal amunt + t*edama$es "r#en is t*ere+re P),1'& +r *ic* t*e "lainti?s are inm "inin clearl entitled t ud$ment.

Frm t*e +act t*at t*e +armers + t*e Ci#il Cde did nt incr"ratet*erein in t*e "r#isin in t*e Prect + 18'1 t t*e e?ect t*at atenant breac*in$ *is lease s*uld u"n its reslutin "a in

additin t t*er dama$es t*e a$reed rental +r t*e *le "erid+ time t*at mi$*t ela"se until ant*er lease s*uld be made, t*ecurt dras t*e in+erence t*at it as t*e intentin t eliminate lss+ +uture rents as an elements + dama$es. T*is in+erence is, It*in/, *ll, unarranted. Hn t*e cntrar, t*e intentin ase#identl t "lace cntracts + lease n a le#el it* t*er cntractsin t*at res"ect and a""l t*e same rule t all. T*e "rinci"leunderlin$ t*at rule as stated in a better and mre accurate +rmin t*e Cde and t*e incr"ratin t*erein + t*e lan$ua$e + t*ePrect + 18'1 as nt nl unnecessar but uld als *a#ebeen li/el t cause cn+usin. T*ere is, as +ar as I can see, nreasn *ate#er * in re$ard t dama$es +r its breac*, acntract + lease s*uld nt be cnsidered in t*e same li$*t as ant*er rdinar cntract and suc* as e#identl t*e #ie + t*eaut*rs + t*e Ci#il Cde.

T*e t*er t*at dama$es +r t*e lss + "r-ts su?ered

subseuent t t*e rescissin + a lease, but be+re t*e e2"iratin+ its ri$inal term, are incm"atible it* t*e idea + rescissin, isentirel ne and in direct cnVict it* t*e #ies e2"ressed b t*iscurt in t*e case + 'uni (s. Dy-'co % P*il., 6'). It is als ut +*armn it* all t*er cases u"n t*e subect + dama$es +rbreac* + cntract in t*is urisdictin and cannt be $d la.

Rivera v %el Rosario

FACTS:

es"ndents Fidela, et al. ere t*e re$istered ners + a "arcel +land. Fidela brred P)'&/ +rm arian i#era and t secure t*elan, s*e and arian i#era a$reed t e2ecute a deed + ; andan a$reement t sell t*e land. arian ent t *is laer t *a#e

6 dcuments dra+ted: t*e Deed + ;, a Masunduan A$reement Sell, and a Deed + Abslute Sale.

T*e Masunduan "r#ided t*at t*e c*ildren + arian i#era,*erein "etitiners, uld "urc*ase t*e land +r a cnsideratin +P), t be "aid in 6 installments. It als "r#ided t*at t*e Deed Abslute Sale uld be e2ecuted nl a+ter t*e )nd installment is"aid and a "stdated c*ec/ +r t*e last installment is de"sitedit* Fidela.

arian i#era t*en ent t *is laer brin$in$ it* *im t*esi$ned dcuments. @e als bru$*t Fidela and *er sn Hscar, st*at t*e latter t ma si$n t*e mrt$a$e and t*e Masunduant*ere. Alt*u$* Fidela intended t si$n nl t*e Masunduan and

t*e ;, s*e inad#ertentl a02ed *er si$nature n all 6dcuments. arian t*en $a#e Fidela t*e amunt +r t*e 1stinstallment. ater, *e als $a#e Fidela a c*ec/ +r t*e )ndinstallment. arian als $a#e Hscar se#eral amunts u"n t*elatterNs demand +r t*e "ament + t*e balance des"ite *is lac/ aut*rit t recei#e "aments under t*e Masunduan.

Fidela entrusted t*e nerNs c" + TCT t arian t $uaranteecm"liance it* t*e Masunduan.

H. T*e deed is #id in its entiret.

escissin + reci"rcal bli$atins under Article 1191 + t*e >eCi#il Cde s*uld be distin$uis*ed +rm rescissin + cntractsunder Article 1686 + t*e same Cde. t* "resu""se cntracts#alidl entered int as ell as subsistin$, and bt* reuire mutuarestitutin *en "r"er, ne#ert*eless t*e are nt entirelidentical.

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"re#ents t*e #endrNs bli$atin t cn#e title +rm acuirin$bindin$ +rce.

@ence, t*e a$reement + t*e "arties in t*e instant case ma be setaside, but nt because + a breac* n t*e "art + "etitiners +r+ailure t cm"lete "ament + t*e secnd installment. at*er,t*eir +ailure t d s "re#ented t*e bli$atin + res"ndents tcn#e title +rm acuirin$ an bli$atr +rce.

Cmin$ n t t*e matter + "rescri"tin. Cntrar t "etitinersNassertin, e -nd t*at "rescri"tin *as nt et set in. Article 1691states t*at t*e actin +r annulment + #id cntracts s*all bebru$*t it*in +ur ears. T*is "erid s*all be$in +rm t*e time t*e+raud r mista/e is disc#ered. @ere, t*e +raud as disc#ered in

199) and t*e cm"laint -led in 1996. T*us, t*e case is ell it*int*e "rescri"ti#e "erid.

Other source:

Facts:

Del sari is t*e re$istered ners + t >. 1&86C, a "arcel +land situated at lmb, ulacan.

Fidela del sari brred P)'&,&&& +rm arian i#era in t*eearl "art + 1987. T secure t*e lan, s*e and arian i#eraa$reed t e2ecute a deed + real estate mrt$a$e and ana$reement t sell t*e land. Cnseuentl, arian dra+ted t*eDeed + eal ;state rt$a$e, a Masunduan A$reement t Sell,and a Deed + Abslute Sale.

T*e Masunduan "r#ided t*e i#eras uld "urc*ase t*e lt +rP).1. T*ere ere 6 installments:

)'& M u"n t*e si$nin$ + t*e Masunduan

7'&M n Au$ust 61, 1987

1.1 n December 61, 1987.

T*e Deed + Abslute Sale uld be e2ecuted nl a+ter t*esecnd installment is "aid and a "stdated c*ec/ +r t*e lastinstallment is de"sited it* Fidela.

Alt*u$* Fidela intended t si$n nl t*e Masunduan Q t*e realestate mrt$a$e, s*e inad#ertentl a02ed *er si$nature n all 6dcuments.

i#era +ailed t cm"lete t*e "ament in t*e )nd installment.

es"ndents -led a cm"laint as/in$ +r t*e rescissin +Masunduan +r +ailure + i#eraNs t cm"l it* its cnditinNs.

T*e als su$*t t*e annulment + t*e deed + abslute sale nt*e $rund + +raud Q t*e recn#eance + t*e entire "r"ert.

Petitiners sa t*at t*ere can be n rescissin because in

accrdance it* Article 1686, t*e del saris must s* t*att*ere ere n t*er le$al means a#ailable t btain re"aratint*er t*an t -le a case +r rescissin.

>: >iet as t*e tenant + t*e "r"ert. iet t*at t*e ere t*e ne ners, *e desisted +rm#acatin$ t*e "r"ert. T*e i#eras a$reed t $i#e *im a small"iece + t*e land in uestin.

T*e TC declared t*e deed + abslute sale as null and #id. T*eCA mdi-ed t*e TCNs decisin ins+ar as it deemed t*e "rtin"ertainin$ t >iet as #alid.

Issue:

t*e cntract entered int beteen t*e "arties ma berescinded based n Art 1191E >H

t*e deed + abslute sale is null and #id in its entiret as""sed t t*e CANs decisin + #alidit "ertainin$ t >ietNs

s*areE B;S, 3HID I> ITS ;>TI;TB@eld:

T*e Masunduan re#eals t*at it is in t*e nature + a cntract t sell,as distin$uis*ed +rm a cntract + sale. In a cntract + sale, t*etitle t t*e "r"ert "asses t t*e #endee u"n t*e deli#er + t*et*in$ sldR *ile in a cntract t sell, ners*i" is, b a$reement,reser#ed in t*e #endr and is nt t "ass t t*e #endee until +ull"ament + t*e "urc*ase "rice. In a cntract t sell, t*e "ament+ t*e "urc*ase "rice is a "siti#e sus"ensi#e cnditin, t*e +ailure+ *ic* is nt a breac*, casual r serius, but a situatin t*at"re#ents t*e bli$atin + t*e #endr t cn#e title +rm acuirin$an bli$atr +rce.

es"ndents bund t*emsel#es t deli#er a deed + abslute saleand clean title a+ter "etitiners *a#e made t*e secnd installment.

T*is "rmise t sell as subect t t*e +ul-llment + t*e sus"ensi#e

cnditin. Petitiners *e#er +ailed t cm"lete "ament + t*esecnd installment. T*e nn+ul-llment + t*e cnditin renderedt*e cntract t sell ine?ecti#e and it*ut +rce and e?ect. It mube stressed t*at t*e breac* cntem"lated in Article 1191 + t*e>e Ci#il Cde is t*e bli$rNs +ailure t cm"l it* an bli$atialread e2tant, nt a +ailure + a cnditin t render bindin$ t*atbli$atin. Failure t "a, in t*is instance, is nt e#en a breac* ban e#ent t*at "re#ents t*e #endrNs bli$atin t cn#e title +racuirin$ bindin$ +rce. @ence, t*e a$reement + t*e "arties in t*instant case ma be set aside, but nt because + a breac* n t*"art + "etitiners +r +ailure t cm"lete "ament + t*e secndinstallment. at*er, t*eir +ailure t d s "re#ented t*e bli$atin+ res"ndents t cn#e title +rm acuirin$ an bli$atr +rce.

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tt*e inured "art. T*e inured "art is t*e "art * *as +ait*+ull+ul-lled *isbli$atin. In t*e case at bar, t*e "etitiners ere ntread, illin$ and able tcm"l it* t*eir bli$atin t deli#er ase"arate title in t*e name + (uli Garciat res"ndent t*ere+re,t* are nt in a "sitin t as/ +r rescissin. Failure tcm"l it*a cnditin im"sed n t*e "er+rmance + an bli$atin $i#est*et*er "art t*e "tin eit*er t re+use t "rceed it* t*e saler t ai#e t*ecnditin under Art 1'4' + t*e ci#il cde. @ence itis t*e res"ndent * *as t*e "tin.

Central an/ v CA

Facts:

A"ril )8, 19%' Island Sa#in$s an/ IS a""r#ed t*e lana""licatin +r P8&,&&& + Sul"ici Tlentin, *, as a securit +rt*e lan, als e2ecuted a real estate mrt$a$e #er *is 1&&*aland. T*e a""r#ed lan a""licatin called +r P8&,&&& lan,re"aable in semiannual installments +r a "erid + 6 ears, it*1) interest.

a )), 19%' a mere P17,&&& "artial release + t*e lan asmade b IS, and Tlentin and *is i+e ;dita si$ned a "rmissrnte +r P17,&&& at 1) annual interest, "aable it*in 6 ears+rm t*e date + e2ecutin + t*e cntract at semiannualinstallments + P6,4'9.

An ad#ance interest +r t*e P8&,&&& lan c#erin$ a %m "eridamuntin$ t P4,8&&as deducted +rm t*e "artial release +P17,&&&, but t*is as re+unded t Tlentin n (ul )6, 19%', a+terbein$ in+rmed b IS t*at t*ere as n +und et a#ailable +r t*e

release + t*e P%6,&&& balance.Au$. 16, 19%' t*e netar ard + t*e Central an/ issuedeslutin >. 1&49, *ic* "r*ibited IS +rm ma/in$ ne lansand in#estments, a+ter -ndin$ t*at it as su?erin$ liuidit"rblems.

(une 14, 19%8 t*e netar ard issued eslutin >. 9%7,*ic* "r*ibited IS +rm din$ business in t*e P*ili""ines, a+ter-ndin$ t*at it +ailed t "ut u" t*e reuired ca"ital t restre itssl#enc.

Au$. 1, 19%8 IS, in #ie + nn"ament + t*e P17,&&& c#eredb t*e "rmissr nte, -led an a""licatin +r t*e e2traudicial+reclsure + t*e real estate mrt$a$e c#erin$ t*e 1&&*a landRand t*e s*eri? sc*eduled auctin.

Tlentin -led a "etitin it* t*e CFI +r inunctin, s"eci-c"er+rmance r rescissin and dama$es it* "reliminar

inunctin, alle$in$ t*at since IS +ailed t deli#er t*e P%6,&&&remainin$ balance + t*e lan, *e is entitled t s"eci-c"er+rmance b rderin$ IS t deli#er it it* interest + 1) "erannum +rm A"ril )8, 19%', and i+ said balance cannt bedeli#ered, t rescind t*e real estate mrt$a$e.

CFI issued a TH eninin$ IS +rm cntinuin$ it* t*e +reclsure+ t*e mrt$a$e, *e#er, a+ter -ndin$ TlentinNs "etitinunmeritrius, rdered t*e latter t "a IS P17,&&& "lus le$alinterest and le$al c*ar$es and li+tin$ t*e TH s t*e s*eri? ma"rceed it* t*e +reclsure.

CA, n a""eal b Tlentin, mdi-ed CFINs decisin b a0rmin$dismissal + TlentinNs "etitin +r s"eci-c "er+rmance, but ruledt*at IS can neit*er +reclse t*e mrt$a$e nr cllect t*eP17,&&& lan.

SC: T*e "arties, in t*e P8&,&&& lan a$reement, undert/reci"rcal bli$atins, *erein t*e bli$atin="rmise + eac*

"art is t*e cnsideratin +r t*at + t*e t*erR and *en ne "art*as "er+rmed r is read and illin$ t "er+rm *is "art + t*ecntract, t*e t*er "art * *as nt "er+rmed r is nt readand illin$ t "er+rm incurs in dela Art. 11%9, CC.

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Pal&a 0il v CA

Facts:

Cnce"cin Gil and sister >ie#es Gil are cners + a "arcel +land. >ie#es and *usband cnstructed a t stre buildin$ n t*esaid land. Cnce"cin t*en -led a cm"laint a$ainst *er sister. T*eCurt rendered ud$ment in +a#r + Cnce"cin. >ie#es a""ealedt t*e Curt + A""eals but t*e latter als a0rmed t*e assaileddecisin.

T*e Curt issued a rit + e2ecutin but >ie#es re+used t e2ecutet*e reuired deed.

T*e S*eri? as t*en rdered t e2ecute but instead, *e di#idedt*e "r"ert int 4 lts and $a#e t t Cnce"cin. t '9 C1,ne + t*e t lts $i#en t Cnce"cin as t*en sld b t*e lattert A$a"it and Iluminada Pacetes. T*is cntract as *e#ersubect t t*e cnditin t*at a de"sit s*all be $i#en at t*e time +t*e e2ecutin + t*e cntract and t*e remainin$ amunt s*all be"aid u"n t*e deli#er + t*e certi-cate + title t t*e #endee. T*e"r"ert as t*en sld t ne Cnstanci a$lana and as a$ainsld t t*e "resent "ssessr ;mili a$tulac * is cnstructin$a buildin$ n said lt. Subseuentl, Cnce"cin died and nre"resented b *er successrs as t*e "etitiners in t*is instantcase.

Petitiners are cntendin$ t*at Cnce"cinNs sale + t*e dis"uted"r"ert t Iluminada and A$a"it Pacetes is merel a cntract tsell because t*e +ull "rice as nt "aid b t*e latter t t*e +rmer.

T*e als ar$ue t*at t*e cnsi$natin made b Iluminada did nt"rduce le$al e?ect. T*ere+re, subseuent buers are nt"urc*asers in $d +ait*.

Issue:

H

6. t*e cntract is in t*e nature + a "testati#e bli$atinE>H

@eld:

1.T*e Masulatan as clearl a Cntract + Sale. A deed + sale iscnsidered abslute in nature *en t*ere is neit*er a sti"ulatin t*e deed t*at title t t*e "r"ert sld is reser#ed t t*e selleruntil t*e +ull "ament + t*e "riceR nr a sti"ulatin $i#in$ t*e#endr t*e ri$*t t unilaterall resl#e t*e cntract t*e mmentt*e buer +ails t "a it*in a -2ed "erid.

). In a cntract + sale, t*e remed + an un"aid seller is eit*ers"eci-c "er+rmance r rescissin. nder Article 1191 + t*e Ci#iCde, t*e ri$*t t rescind an bli$atin is "redicated n t*e#ilatin + t*e reci"rcit beteen "arties, bru$*t abut b abreac* + +ait* b ne + t*em. escissin, *e#er, is allednl *ere t*e breac* is substantial and +undamental t t*e+ul-llment + t*e bli$atin.

In t*e "resent case, t*e +ailure + res"ndents t "a t*e balance+ t*e "urc*ase "rice it*in ten ears +rm t*e e2ecutin + t*eDeed did nt amunt t a substantial breac*. In t*e Masulatan, itas sti"ulated t*at "ament culd be made e#en a+ter ten ears+rm t*e e2ecutin + t*e Cntract, "r#ided t*e #endee "aid 1)"ercent interest. T*e sti"ulatins + t*e cntract cnstitute t*e labeteen t*e "artiesR t*us, curts *a#e n alternati#e but ten+rce t*em as a$reed u"n and ritten.

Petitiner ne#er made an demand +r t*e balance + t*e "urc*a

"rice. Petitiner e#en re+used t*e "ament tendered bres"ndents durin$ *er *usbandNs +uneral, t*us s*in$ t*at s*eas nt e2actl blameless +r t*e la"se + t*e tenear "erid. @s*e acce"ted t*e tender, "ament uld *a#e been made ellit*in t*e a$reed "erid.

6. T*e Masulatan des nt all t*e it t be cn#erted t a"testati#e bli$atin. First, n*ere is it stated in t*e Deed t*at"ament + t*e "urc*ase "rice is de"endent u"n *et*erres"ndents ant t "a it r nt. Secnd, t*e +act t*at t*ealread made "artial "ament t*ere+ nl s*s t*at t*e "artieintended t be bund b t*e Masulatan.

Cor%ero v F' -anage&ent

FACTS: elen Crder, in *er n be*al+ and as attrnein+act *er c"etitiners, entered int a cntract t sell it* res"ndent

F.S. ana$ement and De#el"ment Cr"ratin FSDC #er -#' "arcels + land lcated in atan$as. Pursuant t t*e terms ancnditins + t*e cntract, FSDC "aid earnest mne. > +urt*e"aments ere made t*erea+ter. Crder sent FSDC a demandletter, re#/in$ t*e cntract t sell and treatin$ t*e "amentsalread made as "ament +r dama$es su?ered. FSDC li/eisedemanded t*e "ament +r actual dama$es su?ered due t lss incme.

Crder t*erea+ter -led be+re t*e e$inal Trial Curt +ParaUaue a cm"laint +r rescissin + cntract it* dama$esalle$in$ FSDC +ailed t cm"l it* its bli$atins under t*ecntract t sellR and t*at cnseuentl entitled t rescind t*ecntract t sell as ell as demand t*e "ament + dama$es.FSDC, n t*e t*er *and, alle$ed t*at Crder *as n cause +actin cnsiderin$ t*at t*e ere t*e -rst t #ilate t*e cntractt sell. It as Crder * "re#ented FSDC +rm cm"lin$ it

its bli$atin t "a in +ull b re+usin$ t e2ecute t*e -nal cntra+ sale unless additinal "ament + le$al interest is made.re#er, Crders re+usal t e2ecute t*e -nal cntract + saleas due t t*e illin$ness + ant*er buer t "a a *i$*er "rice

T*e TC issued its decisin, -ndin$ in +a#r + Crder et al. andrdered FSDC t "a dama$es and attrnes +ees. T*e Curt A""eals a0rmed t*e decisin + t*e ler curt and denied t*eirmtin +r recnsideratin.

ISS;:

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nn"ament + t*e "urc*ase "rice renders t*e cntract t selline?ecti#e and it*ut +rce and e?ect.

Since t*e bli$atin + Crder et al. did nt arise because + t*e+ailure + FSDC t +ull "a t*e "urc*ase "rice, Article 1191 +t*e Ci#il Cde uld *a#e n a""licatin.

T*e nn+ul-llment b t*e FSDC + *is bli$atin t "a, *ic* isa sus"ensi#e cnditin t t*e bli$atin + t*e Crder et al. t selland deli#er t*e title t t*e "r"ert, rendered t*e cntract t selline?ecti#e and it*ut +rce and e?ect. T*e "arties stand as i+ t*ecnditinal bli$atin *ad ne#er e2isted. Article 1191 + t*e >eCi#il Cde ill nt a""l because it "resu""ses an bli$atinalread e2tant. T*ere can be n rescissin + an bli$atin t*at is

still nne2istin$, t*e sus"ensi#e cnditin nt *a#in$ *a""ened.

Ayala Lie v Ray urton

FACTS: Hn December )), 199', Aala Inc. and a urtn Cr".entered int a cntract denminated as a JCntract t Sell,K it* aJSide A$reementK + e#en date. In t*ese cntracts, "etitinera$reed t sell t res"ndent a "arcel + land situated atuntinlu"a Cit. T*e "urc*ase "rice + t*e land is "aable as+lls:

Hn cntract date: )%, inclusi#e + "tin mne

>t later t*an 1%9%: 4

In cnsecuti#e uarterl installments +r a "erid + ' ears: 7&

es"ndent "aid t*irt 6& dn "ament and t*e uarterlamrti5atin. @e#er in 1998, res"ndent nti-ed "etitiner in

ritin$ t*at it ill n ln$er cntinue t "a due t t*e ad#ersee?ects + t*e ecnmic crisis t its business. es"ndent t*enas/ed +r t*e immediate cancellatin + t*e cntract and +r are+und + its "re#ius "aments as "r#ided in t*e cntract.

Petitiner re+used t cancel t*e cntract t sell. Instead, it -ledit* t*e TC a/ati Cit, a cm"laint +r s"eci-c "er+rmancea$ainst res"ndent, demandin$ +rm t*e latter t*e "ament + t*eremainin$ un"aid uarterl installments inclusi#e + interest and"enalties.

es"ndent, in its anser, denied an +urt*er bli$atin t"etitiner, assertin$ t*at it res"ndent nti-ed t*e latter + itsinabilit t "a t*e remainin$ installments. es"ndent in#/edt*e "r#isins + "ara$ra"*s 6 and 6.1 + t*e cntract t sell"r#idin$ +r t*e re+und t it + t*e amunts "aid, less interest andt*e sum + )' + all sums "aid as liuidated dama$es.

T*e trial curt rendered a Decisin in +a#r + Aala and *ldin$

t*at res"ndent trans$ressed t*e la in b#ius bad +ait*. Itrdered t*e de+endant rdered t "a Aala t*e un"aid balance,interest a$reed u"n, and "enalties. De+endant is +urt*er rderedt "a "lainti? +r attrneNs +ees and t*e csts + suit. "n +ull"ament + t*e a+rementined amunts b de+endant, "lainti?s*all, as it is *ereb rdered, e2ecute t*e a""r"riate deed +abslute sale cn#ein$ and trans+errin$ +ull title and ners*i" +t*e "arcel + land subect + t*e sale t and in +a#r + de+endant.

Hn a""eal, t*e CA rendered a Decisin re#ersin$ t*e trial curtNsDecisin. @ence, t*e instant "etitin +r re#ie n certirari.

ISS;:

1. res"ndentNs nn"ament + t*e balance + t*e "urc*ase"rice $a#e rise t a cause + actin n t*e "art + "etitiner tdemand +ull "ament + t*e "urc*ase "riceR and

). Aala s*uld re+und res"ndent t*e amunt t*e latter "aid

under t*e cntract t sell.@;D: T*e "etitin is denied. T*e CA decisin is a0rmed.

At t*e utset, it is si$ni-cant t nte t*at "etitiner des ntdis"ute t*at its December )), 199' transactin it* res"ndent isa cntract t sell. Als, t*e uestined a$reement clearl indicatest*at it is a cntract t sell, nt a cntract + sale. Para$ra"* 4 +t*e cntract "r#ides:

4. TIT; A>D H;S@IP HF T@; PHP;TB. T*e title t t*e"r"ert s*all trans+er t t*e PC@AS; u"n "ament + t*ebalance + t*e Purc*ase Price and all e2"enses, "enalties andt*er csts *ic* s*all be due and "aable *ereunder r *ic*ma *a#e accrued t*eret. T*ereu"n, t*e S;; s*all e2ecute aDeed + Abslute Sale in +a#r + t*e PC@AS; cn#ein$ all t*eS;;NS ri$*ts, title and interest in and t t*e Pr"ert t t*ePC@AS;

1. >H. Cnsiderin$ t*at t*e "artiesN transactin is a cntract tsell, can "etitiner, as seller, demand s"eci-c "er+rmance +rmres"ndent, as buerE

lac/Ns a Dictinar de-ned s"eci-c "er+rmance as Jt*eremed + reuirin$ e2act "er+rmance + a cntract in t*e s"eci-+rm in *ic* it as made, r accrdin$ t t*e "recise termsa$reed u"n. T*e actual accm"lis*ment + a cntract b a "artbund t +ul-ll it.K

;#identl, be+re t*e remed + s"eci-c "er+rmance ma bea#ailed +, t*ere must be a breac* + t*e cntract.

nder a cntract t sell, t*e title + t*e t*in$ t be sld is retaineb t*e seller until t*e "urc*aser ma/es +ull "ament + t*e a$ree

"urc*ase "rice. T*e nn+ul-llment b t*e res"ndent + *isbli$atin t "a, *ic* is a sus"ensi#e cnditin t t*e bli$ati+ t*e "etitiners t sell and deli#er t*e title t t*e "r"ert,rendered t*e cntract t sell ine?ecti#e and it*ut +rce ande?ectR +ailure + *ic* is nt reall a breac*, serius r t*erisebut an e#ent t*at "re#ents t*e bli$atin + t*e "etitiners tcn#e title +rm arisin$, in accrdance it* Article 1184 + t*eCi#il Cde .

T*e "arties stand as i+ t*e cnditinal bli$atin *ad ne#ere2isted. Article 1191 + t*e >e Ci#il Cde ill nt a""l becauseit "resu""ses an bli$atin alread e2tant. T*ere can be nrescissin + an bli$atin t*at is stil l nne2istin$, t*e sus"ensi#cnditin nt *a#in$ *a""ened T*us, a cause + actin +r s"eci-"er+rmance des nt arise.

@ere, t*e "r#isins + t*e cntract t sell cate$ricall indicatet*at res"ndentNs de+ault in t*e "ament + t*e "urc*ase "rice iscnsidered merel as an Je#ent,K t*e *a""enin$ + *ic* $i#esrise t t*e res"ecti#e bli$atins + t*e "arties mentined t*ereint*us:

6. ;3;>T HF D;FAT. T*e +llin$ e#ent s*all cnstitute an;#ent + De+ault under t*is cntract: t*e PC@AS; +ails t "aan installment n t*e balance, +r an reasn nt attributable tt*e S;;, n t*e date it is due, "r#ided, *e#er, t*at t*eS;; s*all *a#e t*e ri$*t t c*ar$e t*e PC@AS; a late"enalt interest n t*e said un"aid interest at t*e rate + ) "ermnt* cm"uted +rm t*e date t*e amunt became due and"aable until +ull "ament t*ere+.

6.1. I+ t*e ;#ent + De+ault s*all *a#e ccurred, t*en at an timet*erea+ter, i+ an suc* e#ent s*all t*en be cntinuin$ +r a "erid+ si2 % mnt*s, t*e S;; s*all *a#e t*e ri$*t t cancel t*isCntract it*ut need + curt declaratin t t*at e?ect b $i#in$

t*e PC@AS; a ritten ntice + cancellatin sent t t*eaddress + t*e PC@AS; as s"eci-ed *erein b re$istered mair "ersnal deli#er. T*erea+ter, t*e S;; s*all return t t*ePC@AS; t*e a$$re$ate amunt t*at t*e S;; s*all *a#erecei#ed as + t*e cancellatin + t*is Cntract, less: i "enaltiesaccrued as + t*e date + suc* cancellatin, ii an amunteui#alent t tent -#e "ercent )' + t*e ttal amunt "aidas liuidated dama$es, and iii an un"aid c*ar$es and dues nt*e Pr"ert. An amunt t be re+unded t t*e PC@AS; s*albe cllected b t*e PC@AS; at t*e 0ce + t*e S;;. "nntice t t*e PC@AS; + suc* cancellatin, t*e S;; s*all b+ree t dis"se + t*e Pr"ert c#ered *ereb as i+ t*is Cntract*ad nt been e2ecuted. >tice t t*e PC@AS; sent bre$istered mail r b "ersnal deli#er t its address stated in t*Cntract s*all be cnsidered as su0cient cm"liance it* allreuirements + ntice +r "ur"ses + t*is Cntract.14

T*ere+re, in t*e e#ent + res"ndentNs de+ault in "ament,"etitiner, under t*e ab#e "r#isins + t*e cntract, *as t*eri$*t t retain an amunt eui#alent t )' + t*e ttal "amentAs stated b t*e CA, "etitiner *a#in$ been in+rmed in ritin$ bres"ndent + its intentin nt t "rceed it* t*e cntract "rir incurrin$ dela in "ament + succeedin$ installments, t*e"r#isins in t*e cntract relati#e t "enalties and interest -nd na""licatin.

). B;S. T*e CA is crrect t*at it* res"ect t t*e aard + interes"etitiner is liable t "a interest + 1) "er annum u"n t*e nere+undable amunt due +rm t*e time res"ndent made t*ee2traudicial demand u"n it t re+und "ament under t*eCntract t Sell, "ursuant t ur rulin$ in ;astern S*i""in$ ines,Inc. #. Curt + A""eals.

0aite v Pla#a

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FACTS:

T*e Pla5a, t*ru$* its "resident, (se C. ees, entered int acntract it* *$en uilders, re"resented b amn C. Gaite, +rt*e cnstructin + a restaurant buildin$ in Greenbelt, a/ati +rt*e "rice + P*P7,%&&,&&.&&. T secure *$en!s cm"liance it*its bli$atin, Gaite and FG Insurance cr"ratin e2ecuted asuret bnd in +a#r + t*e Pla5a.

Subseuentl, Gaite as rdered b ;n$ineer Gn5ales t st"cnstructin due t #ilatins + t*e >atinal uildin$ Cde. T*isas re+erred t t*e Pla5a!s Prect ana$er, Ta5n.

ater, t*e "ermit +r t*e cnstructin + t*e restaurant asre#/ed +r nncm"liance it* t*e >atinal uildin$ Cde.

Gaitereuested t*at t*e -2 t*e "rblem it* c"eratin +rmt*e Pla5a but t*e ees, n be*al+ + t*e Pla5a, said t*at it as ntt*eir res"nsibilit t *el" *$en a+ter its +ailure t cm"l it*t*e cnstructin reuirements. ecause ees uld neit*erc"erate it* *$en t -2 t*e "rblem nr cm"ensate *$en+r t*e "ercenta$e + r/ dne, Gaite in+rmed t*e Pla5a t*at *euld be terminatin$ t*eir cntract based n t*e Cntractr!si$*t t St" . 3416&.

Petitiner mrt$a$ed t*e subect real "r"erties t t*e FarmersSa#in$s an/ and an an/, Inc. FS an/ t secure a lan.Petitiner t*en decided t sell *er real "r"erties s s*e culdliuidate *er ban/ lan and -nance *er businesses. As a $esture +riends*i", res"ndent #erball ?ered t cnditinall bu

"etitiner!s real "r"erties.T*e "arties and FS an/ e2ecuted t*e crres"ndin$ Deed +Cnditinal Sale + eal Pr"erties it* Assum"tin + rt$a$e.Due t t*eir clse "ersnal +riends*i" and business relatins*i",bt* "arties c*se nt t reduce int ritin$ t*e t*er terms +t*eir a$reement mentined in "ara$ra"* 11 + t*e cm"laint.

es"ndent, *e#er, de+aulted in t*e "ament + *er bli$atinn t*eir due dates. Instead + "ain$ t*e amunts due in lum"sum n t*eir res"ecti#e maturit dates, res"ndent "aid "etitinin small amunts +rm time t time.

es"ndent cuntered, amn$ t*ers, t*at t*e tri"artitea$reement errneusl desi$nated b t*e "etitiner as a Deed Cnditinal Sale + eal Pr"ert it* Assum"tin + rt$a$e actuall a "ure and abslute cntract + sale it* a term "erid. culd nt be cnsidered a cnditinal sale because t*e acuisiti+ cntractual ri$*ts and t*e "er+rmance + t*e bli$atin t*ere

did nt de"end u"n a +uture and uncertain e#ent.es"ndent +urt*er a#erred t*at s*e success+ull rescued t*e"r"erties +rm a de-nite +reclsure b "ain$ t*e assumedmrt$a$e "lus interest and t*er -nance c*ar$es.

T*e TC *anded dn its decisin -ndin$ t*at res"ndent +ailed "a in +ull t*e ttal "urc*ase "rice + t*e subect real "r"erties. stated t*at t*e c*ec/s and recei"ts "resented b res"ndent re+et *er "aments + t*e mrt$a$e bli$atin it* FS an/. T*eTC als cnsidered t*e Deed + Cnditinal Sale + eal Pr"ertit* Assum"tin + rt$a$e e2ecuted b and amn$ t*e t"arties and FS an/ a cntract t sell, and nt a cntract + sale

T*e CA rendered its decisin a0rmin$ it* mdi-catin t*e TCDecisin.T*e CA a$reed it* t*e TC t*at t*e cntract entered inb t*e "arties is a cntract t sell but ruled t*at t*e remed +rescissin culd nt a""l because t*e res"ndent!s +ailure t "a

t*e "etitiner t*e balance + t*e "urc*ase as nt a breac* +cntract, but merel an e#ent t*at "re#ented t*e seller "etitine+rm cn#ein$ title t t*e "urc*aser res"ndent.

ISS;:

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+ mrt$a$e and t*e "etitiner s*all e2ecute t*e crres"ndin$deed + abslute sale in +a#r + t*e res"ndent.

Accrdin$l, t*e "etitiner!s bli$atin t sell t*e subect"r"erties becmes demandable nl u"n t*e *a""enin$ + t*e"siti#e sus"ensi#e cnditin, *ic* is t*e res"ndent!s +ull"ament + t*e "urc*ase "rice. D;>I;D.

Lalicon v )2AFACTS:

1 Hn >#ember )', 198& t*e >atinal @usin$ Aut*rit >@Ae2ecuted a Deed + Sale it* rt$a$e #er a Lue5n Cit lt in+a#r + t*e s"uses Isidr and Fla#iana Al+ar t*e Al+ars. T*edeed + sale "r#ided, amn$ t*ers, t*at t*e Al+ars culd sell t*eland it*in -#e ears +rm t*e date + its release +rm mrt$a$eit*ut >@A!s "rir ritten cnsent. T*us:

2 2 2. '. ;2ce"t b *ereditar successin, t*e lt *erein sld andcn#eed, r an "art t*ere+, cannt be alienated, trans+erred rencumbered it*in -#e ' ears +rm t*e date + release + *ereinmrt$a$e it*ut t*e "rir ritten cnsent and aut*rit +rm t*e3;>DHHTGAG;; >@A. 2 2 2

T*e mrt$a$e and t*e restrictin n sale ere anntated n t*eAl+ars! title n A"ril 14, 1981.

) Abut nine ears later r n >#ember 6&, 199&, *ile t*emrt$a$e n t*e land subsisted, t*e Al+ars sld t*e same t t*eirsn, 3ictr Al+ar.

6 A+ter +ull "ament + t*e lan r n arc* )1, 1991 t*e >@Areleased t*e mrt$a$e.

4 Si2 das later r n arc* )7 3ictr trans+erred ners*i" +t*e land t *is ille$itimate dau$*ters. ' Hn December 14, 199'3ictr mrt$a$ed t*e land t arcela a C*ua, sa S, Am"arHn$, and Ida See.

% Subseuentl, n Februar 14, 1997 3ictr sld t*e "r"ert tC*ua, ne + t*e mrt$a$ees.

TC: 199& sale + t*e land t t*eir sn 3ictr, and t*e subseuentsale + t*e same t C*ua, made in #ilatin + >@A rules andre$ulatins. It ruled t*at, alt*u$* t*e Al+ars clearl #ilated t*e-#eear "r*ibitin, t*e >@A culd n ln$er rescind its sale t

t*em since its ri$*t t d s *ad alread "rescribed, a""lin$Article 1689 + t*e >e Ci#il Cde. T*e >@A and t*e alicns, inter#ened, -led t*eir res"ecti#e a""eals t t*e Curt + A""ealsCA.

CA: CA re#ersed t*e TC decisin and +und t*e >@A entitled trescissin. T*e CA declared TCT )776)1 in t*e name + t*e Al+arand all subseuent titles and deeds + sale null and #id. Itrdered C*ua t recn#e t*e subect land t t*e >@A but t*elatter must "a t*e alicns t*e +ull amunt + t*eir amrti5atin"lus interest, and t*e #alue + t*e im"r#ements t*e cnstructen t*e "r"ert.

ISS;:

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Since t*e -#eear "r*ibitin a$ainst alienatin it*ut t*e >@A!sritten cnsent as anntated n t*e "r"ert!s title, t*e alicns#er ell /ne t*at t*e Al+ars! sale + t*e "r"ert t t*eir +at*er,3ictr, e#en be+re t*e release + t*e mrt$a$e #ilated t*at"r*ibitin.

4 astl, since mutual restitutin is reuired in cases in#l#in$rescissin under Article 1191, t*e >@A must return t*e +ull amunt+ t*e amrti5atins it recei#ed +r t*e "r"ert, "lus t*e #alue +t*e im"r#ements intrduced n t*e same, it* % interest "erannum +rm t*e time + t*e -nalit + t*is ud$ment.

'y v An%o/3s Litson

Petitiner Cel S S entered int a 'ear lease cntract it*And/s itsn Cr"ratin And/s. And/s immediatel "aid its+ur 4 mnt*s + ad#ance de"sit and a securit de"siteui#alent t +ur 4 mnt*s + rental. @e#er, *ile in t*e"rcess + a""lin$ +r electrical cnnectin n t*e im"r#ementst be cnstructed n Ss land, And/s disc#ered t*at S *as anun"aid ;ACH bill amuntin$ t P4&&,&&&.&&. And/s +urt*ercm"lained t*at cnstructin +r t*e im"r#ement it intended +rt*e leased "remises culd nt "rceed because ant*er tenant,edia"l, Inc. incurred dela in t*e cnstructin + a billbardstructure als it*in t*e leased "remises.

And/s -rst in+rmed S abut t*e dela in t*e cnstructin + t*ebillbard structure n a "rtin + its leased "r"ert. T*ree mreletters + t*e same tenr ere sent t S but t*e demands +ell ndea+ ears. T*us, And/s -led a cm"laint +r rescissin be+re t*eTC. T*e TC ruled in +a#r + And/s.

Hn a""eal, t*e CA a0rmed t*e TCs rulin$.

ISS;: etr/,Inc. is its aut*ri5ed mar/etin$ a$ent. es"ndent S"usesCnrad and aria 3ictria nuill "urc*ased +rm "etitinersan 8)suare meter cndminium unit at Central Par/ Place Terin andalun$ Cit +r a "resellin$ cntract "rice + P',174,&&&.&&. Hn )9 Au$ust 1997, res"ndents e2ecuted and

si$ned a eser#atin A""licatin A$reement *erein t*ede"sited P)&&,&&&.&&as reser#atin +ee. As a$reed u"n,res"ndents "aid t*e +ull dn"ament + P1,''),)&&.&& and *adbeen "ain$ t*e P%6,6%6.66 mnt*l amrti5atins untilSe"tember 1998.

"n learnin$ t*at cnstructin r/s *ad st""ed, res"ndentsli/eise st""ed "ain$ t*eir mnt*l amrti5atin. Claimin$ t*a#e "aid a ttal + P),198,949.9% t "etitiners, res"ndentst*ru$* t successi#e letters, demanded a +ull re+und + t*eir"ament it* interest.

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e2cuse "etitiners +rm "er+rmin$ t*eir cntractual bli$atinRsecnd, as a result + t*e breac* cmmitted b "etitiners,res"ndents are entitled t rescind t*e cntract and t bere+unded t*e amunt + amrti5atins "aid includin$ interest anddama$esR and t*ird, "etitiners are li/eise bli$ated t "aattrnes +ees and t*e administrati#e -ne.

T*is "etitin did nt "resent an usti-catin +r us t de#iate +rmt*e rulin$s + t*e @, t*e H0ce + t*e President and t*e Curt+ A""eals.

Indeed, t*e nn "er+rmance + "etitiners bli$atin entitlesres"ndents t rescissin under Article 1191 + t*e >e Ci#il Cde*ic* states: Article 1191. T*e "er t rescind bli$atins is

im"lied in reci"rcal nes, in case ne + t*e bli$rs s*uld ntcm"l it* *at is incumbent u"n *im. T*e inured "art mac*se beteen t*e +ul-llment and t*e rescissin + t*e bli$atin,it* "ament + dama$es in eit*er case. @e ma als see/rescissin, e#en a+ter *e *as c*sen +ul-llment, i+ t*e latter s*uldbecme im"ssible.

re in "int is Sectin )6 + Presidential Decree >. 9'7, t*e rule$#ernin$ t*e sale + cndminiums, *ic* "r#ides: Sectin )6.>nFr+eiture + Paments. > installment "ament made b abuer in a subdi#isin r cndminium "rect +r t*e lt r unit *ecntracted t bu s*all be +r+eited in +a#r + t*e ner rde#el"er *en t*e buer, a+ter due ntice t t*e ner rde#el"er, desists +rm +urt*er "ament due t t*e +ailure + t*ener r de#el"er t de#el" t*e subdi#isin r cndminium"rect accrdin$ t t*e a""r#ed "lans and it*in t*e time limit+r cm"lin$ it* t*e same. Suc* buer ma, at *is "tin, be

reimbursed t*e ttal amunt "aid includin$ amrti5atin interestsbut e2cludin$ delinuenc interests, it* interest t*eren at t*ele$al rate.

Cn+rmabl it* t*ese "r#isins + la, res"ndents are entitledt rescind t*e cntract and demand reimbursement +r t*e"aments t*e *ad made t "etitiners.

>tabl, t*e issues *ad alread been settled b t*e Curt in t*ecase + Fil;state Pr"erties, Inc. #. S"uses G "rmul$ated n 17Au$ust )&&7, *ere t*e Curt stated t*at t*e Asian -nancial crisisis nt an instance +cas +rtuit. earin$ t*e same +actual milieuas t*e instant case, G.. >. 1%'1%4 in#l#es t*e same cm"an,Fil;state, albeit abut a di?erent cndminium "r"ert. T*ecm"an li/eise rene$ed n its bli$atin t res"ndents t*ereinb +ailin$ t de#el" t*e cndminium "rect des"ite substantial"ament + t*e cntract "rice. Fil;state ad#anced t*e samear$ument t*at t*e 1997 Asian -nancial crisis is a +rtuitus e#ent

*ic* usti-es t*e dela + t*e cnstructin "rect. First ?, t*eCurt classi-ed t*e issue as a uestin + +act *ic* ma nt beraised in a "etitin +r re#ie cnsiderin$ t*at t*ere as n#ariance in t*e +actual -ndin$s + t*e @, t*e H0ce + t*ePresident and t*e Curt + A""eals. Secnd, t*e Curt cited t*e"re#ius rulin$s + Asian Cnstructin and De#el"mentCr"ratin #. P*ili""ine Cmmercial Internatinal an/ andndra$n eisure and esrts Cr"ratin #. Curt + A""eals*ldin$ t*at t*e 1997Asian -nancial crisis did nt cnstitute a #alid

usti-catin t rene$e n bli$atins. T*e Curt e2"unded: Als,e cannt $enerali5e t*at t*e Asian -nancial crisis in 1997 asun+reseeable and bend t*e cntrl + a business cr"ratin. Itis un+rtunate t*at "etitiner a""arentl met it* cnsiderabledi0cult e.$. increase cst + materials and labr, e#en be+re t*esc*eduled cmmencement + its real estate "rect as earl as199'. @e#er, a real estate enter"rise en$a$ed in t*e "resellin$

+ cndminium units is cncededl a master in "rectins ncmmdities and currenc m#ements and business ris/s. T*eVuctuatin$ m#ement + t*e P*ili""ine "es in t*e +rei$ne2c*an$e mar/et is an e#erda ccurrence, and Vuctuatins incurrenc e2c*an$e rates *a""en e#erda, t*us, nt an instance+ cas +rtuit.

T*e a+rementined decisin becmes a "recedent t +uture casesin *ic* t*e +acts are substantiall t*e same, as in t*is case. T*e"rinci"le + stare decisis, *ic* means ad*erence t udicial"recedents, a""lies.

In said case, t*e Curt rdered t*e re+und + t*e ttalamrti5atins "aid b res"ndents "lus % le$al interestcm"uted +rm t*e date + demand. T*e Curt als aardedattrnes +ees. . )44))& mt*er title. nder t*e cntract, S"s.Faard undert/ t "a t*e "urc*ase it*in a 1&ear "erid,includin$ interest at t*e rate + nine "ercent 9 "er annum *GPI, n t*e t*er *and, a$reed t e2ecute a -nal deed + saledeed in +a#r + S"s. Faard u"n +ull "ament + t*e sti"ulatedcnsideratin.

@e#er, des"ite its +ull "ament + t*e "urc*ase "rice andsubseuent demands, GPI +ailed t e2ecute t*e deed and t deli#t*e title and "*sical "ssessin + t*e subect lt.

T*us, S"s. Faard -led be+re t*e @usin$ and and see$ulatr ard;2"anded >atinal Ca"ital e$in Field H0ce@;>CFH a cm"laint +r s"eci-c "er+rmance r rescissi

+ cntract it* dama$es a$ainst GPI and t*e members + itsard + Directrs.

S"s. Faard a#erred t*at GPI #ilated Sectin )& + PresidentialDecree >. 9'71& PD 9'7 due t its +ailure t cnstruct and"r#ide ater +acilities, im"r#ements, in+rastructures and t*er+rms + de#el"ment includin$ ater su""l and li$*tin$ +acilitie+r t*e subdi#isin "rect. T*e als alle$ed t*at GPI +ailed t"r#ide bundar mar/s +r eac* lt and t*at t*e mt*er titleincludin$ t*e subect lt *ad n tec*nical descri"tin and as e#le#ied u"n b t*e an$/ Sentral n$ Pili"inas SP it*ut t*ei/nled$e. T*e t*us "raed t*at GPI be rdered t e2ecute t*edeed, t deli#er t*e crres"ndin$ certi-cate + title and t*e"*sical "ssessin + t*e subect lt it*in a reasnable "erid,and t de#el" ;#er$reen ;2ecuti#e 3illa$eR r in t*e alternati#e,t cancel and=r rescind t*e cntract and re+und t*e ttal"aments made "lus le$al interest.

Fr t*eir "art, claimed t*at t*e +ailure t deli#er t*e title t S"s.Faard as bend t*eir cntrl because *ile GPI!s "etitin +rinscri"tin + tec*nical descri"tin as +a#rabl $ranted b t*ee$inal Trial Curt t*e same as re#ersed b t*e CAR t*is causet*e dela in t*e subdi#isin + t*e "r"ert int indi#idual lts iindi#idual titles. Gi#en t*e +re$in$ incidents, "etitiners t*usar$ued t*at Article 1191 + t*e Ci#il Cde Cde t*e "r#isin *ic* S"s. Faard anc*r t*eir ri$*t + rescissin remainedina""licable since t*e ere actuall illin$ t cm"l it* t*eirbli$atin but ere nl "re#ented +rm din$ s due tcircumstances bend t*eir cntrl. Se"aratel, "etitiners"inted ut t*at SP!s ad#erse claim=le# *ic* as anntatedln$ a+ter t*e e2ecutin + t*e cntract *ad alread been settled

ISS;:

S"s. Faard *a#e n ri$*t t rescind t*e cntract cnsiderint*at GPI!s inabilit t cm"l t*ereit* as due t reasns ben

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its cntrl and t*us, s*uld nt be *eld liable t re+und t*e"aments t*e *ad recei#ed.

@;D:

>H. S"s. Faard *a#e a ri$*t t rescind t*e cntract.

ATIH:

It is settled t*at in a cntract t sell, t*e seller!s bli$atin tdeli#er t*e crres"ndin$ certi-cates + title is simultaneus andreci"rcal t t*e buer!s +ull "ament + t*e "urc*ase "rice. In t*isrelatin, Sectin )' + PD 9'7, *ic* re$ulates t*e subecttransactin, im"ses n t*e subdi#isin ner r de#el"er t*ebli$atin t cause t*e trans+er + t*e crres"ndin$ certi-cate +title t t*e buer u"n +ull "ament.

A "erusal + t*e recrds s*s t*at GPI acuired t*e subect"r"ert t*ru$* a Deed + Partitin and ;2c*an$e e2ecutedbeteen it and t*e +rmer re$istered ner + t*e "r"ert.@e#er, n "lausible e2"lanatin as ad#anced b t*e"etitiners as t * t*e "etitin +r inscri"tin as -led nl a+teralmst ei$*t 8 ears +rm t*e acuisitin + t*e subect "r"ert.

>eit*er did "etitiners su0cientl e2"lain * GPI t/ n "siti#eactin t cause t*e immediate -lin$ + a ne "etitin +rinscri"tin it*in a reasnable time +rm ntice + t*e (ul 1',)&&6 CA Decisin *ic* dismissed GPINs earlier "etitin based ntec*nical de+ects, t*is ntit*standin$ S"s. Faard!s +ull "ament+ t*e "urc*ase "rice and "rir demand +r deli#er + title.Clearl, t*e ln$ dela in t*e "er+rmance + GPI!s bli$atin +rmdate + demand as unreasnable and unusti-ed. It canntt*ere+re be denied t*at GPI substantiall breac*ed its cntract t

sell it* S"s. Faard *ic* t*ereb accrds t*e latter t*e ri$*t trescind t*e same "ursuant t Article 1191 + t*e Cde, #i5:

AT. 1191. T*e "er t rescind bli$atins is im"lied in reci"rcalnes, in case ne + t*e bli$rs s*uld nt cm"l it* *at isincumbent u"n *im.

T*e inured "art ma c*se beteen t*e +ul-llment and t*erescissin + t*e bli$atin, it* t*e "ament + dama$es in eit*ercase. @e ma als see/ rescissin, e#en a+ter *e *as c*sen+ul-llment, i+ t*e latter s*uld becme im"ssible.

T*e curt s*all decree t*e rescissin claimed, unless t*ere be ustcause aut*ri5in$ t*e -2in$ + a "erid.

T*is is understd t be it*ut "reudice t t*e ri$*ts + t*ird"ersns * *a#e acuired t*e t*in$, in accrdance it* articles168' and 1688 and t*e rt$a$e a.

It is ntert* t "int ut t*at rescissin des nt merel

terminate t*e cntract and release t*e "arties +rm +urt*erbli$atins t eac* t*er, but abr$ates t*e cntract +rm itsince"tin and restres t*e "arties t t*eir ri$inal "sitins as i+ ncntract *as been made.61 Cnseuentl, mutual restitutin,*ic* entails t*e return + t*e bene-ts t*at eac* "art ma *a#erecei#ed as a result + t*e cntract, is t*us reuired.6) T be sure,it *as been settled t*at t*e e?ects + rescissin as "r#ided +r inArticle 168' + t*e Cde are euall a""licable t cases underArticle 1191, t it:

utual restitutin is reuired in cases in#l#in$ rescissin underArticle 1191.1["*i1 T*is means brin$in$ t*e "arties bac/ t t*eirri$inal status "rir t t*e ince"tin + t*e cntract. Article 168' +t*e Ci#il Cde "r#ides, t*us:

AT. 168'. escissin creates t*e bli$atin t return t*e t*in$s*ic* ere t*e bect + t*e cntract, t$et*er it* t*eir +ruits,and t*e "rice it* its interestR cnseuentl, it can be carried ut

nl *en *e * demands rescissin can return *ate#er *e mabe bli$ated t restre.

>eit*er s*all rescissin ta/e "lace *en t*e t*in$s *ic* are t*ebect + t*e cntract are le$all in t*e "ssessin + t*ird "ersns* did nt act in bad +ait*.

In t*is case, indemnit +r dama$es ma be demanded +rm t*e"ersn causin$ t*e lss.

T*is Curt *as cnsistentl ruled t*at t*is "r#isin a""lies trescissin under Article 1191:

Since Article 168' + t*e Ci#il Cde e2"ressl and clearl statest*at rescissin creates t*e bli$atin t return t*e t*in$s *ic*ere t*e bect + t*e cntract, t$et*er it* t*eir +ruits, and t*e"rice it* its interest, t*e Curt -nds n usti-catin t sustain

"etitinersN "sitin t*at said Article 168' des nt a""l trescissin under Article 1191.

In t*is li$*t, it cannt be denied t*at nl GPI bene-ted +rm t*ecntract, *a#in$ recei#ed +ull "ament + t*e cntract "rice "lusinterests as earl as (anuar 17, )&&&, *ile S"s. Faard remaine"reudiced b t*e "ersistin$ nndeli#er + t*e subect lt des"it+ull "ament. As a necessar cnseuence, cnsiderin$ t*e"r"riet + t*e rescissin as earlier discussed, S"s. Faard mustbe able t rec#er t*e "rice + t*e "r"ert "e$$ed at its"re#ailin$ mar/et #alue.

Reyes v Rossi

Facts:

Petitiner ees and Ad#anced Fundatin, re"resented bres"ndent ;ttre ssi, e2ecuted a deed + cnditinal salein#l#in$ t*e "urc*ase b ees + eui"ment cnsistin$ + aDred$in$ Pum". T*e "arties a$reed t*erein t*at ees uld "at*e sum + P6,&&&,&&&.&& as dn "ament, and t*e balance +P7,&&&,&&&.&& t*ru$* +ur "stdated c*ec/s. ees cm"lied,but *e reuested t*e restructurin$ + *is bli$atin under t*e dee+ cnditinal sale b re"lacin$ t*e +ur "stdated c*ec/s it*nine "stdated c*ec/s t*at uld include interest accruin$ n t*un"aid "rtin + t*e bli$atin.

ees issued and deli#ered t*e +llin$ nine "stdated c*ec/sdran a$ainst t*e nited Ccnut Planters an/. ssi de"sitedt*ree + t*e "stdated c*ec/s but t + t*e c*ec/s ere denied"ament stensibl u"n eesN instructins t st" t*eir

"ament, *ile t*e t*ird as dis*nred +r insu0cienc + +undssi li/eise de"sited t mre c*ec/s but t*e c*ec/s erereturned it* t*e ntatin Accunt Clsed stam"ed n t*em. @edid nt anmre de"sit t*e t*ree remainin$ c*ec/s n t*eassum"tin t*at t*e uld be similarl dis*nred.

ees cmmenced an actin +r rescissin + cntract anddama$es and su$*t ud$ment declarin$ t*e deed + cnditinalsale rescinded and + n +urt*er +rce and e?ect, and rderin$Ad#anced Fundatin t return t*e dn "ament it* le$alinterest and t "a t *im attrneNs +ees, and #arius /inds andamunts + dama$es.

ssi c*ar$ed ees it* -#e cunts + esta+a and -#e cunts +#ilatin + atas Pambansa l$. )) +r t*e dis*nr + t*e c*ec/

ees submitted *is cuntera0da#it claimin$ t*at t*e c*ec/s *ant been issued +r an #aluable cnsideratinR t*at *e *addisc#ered +rm t*e start + usin$ t*e dred$in$ "um" in#l#ed in

t*e cnditinal sale t*at t*e Cater"illar diesel en$ine "erin$ t*"um" *ad been rated at nl '%& *rse"er instead + t*e 1)&*rse"erR t*at eldin$ r/s n t*e "um" *ad neatl cncealse#eral crac/sR t*at *e *ad ritten t Ad#anced Fundatincm"lainin$ abut t*e misre"resentatins n t*e s"eci-catins t*e "um" and demandin$ dcumentar "r+ + Ad#ancedFundatinNs ners*i" + t*e "um"R t*at *e *ad caused t*e rdt st" t*e "ament + t*ree c*ec/sR t*at Ad#anced Fundatin*ad re"lied t *is letter sain$ t*at t*e "um" *ad been sld t *n an as is, *ere is basis.

T*e Assistant Cit Prsecutr *andlin$ t*e "reliminarin#esti$atin recmmended t*e dismissal + t*e c*ar$es + esta+and t*e sus"ensin + t*e "rceedin$s relatin$ t t*e #ilatin +atas Pambansa l$. )) based n a "reudicial uestin *ic* t*Cit Prsecutr + a/ati a""r#ed.

Issues

t*e ci#il actin +r rescissin + t*e cntract + sale raised a"reudicial uestin t*at reuired t*e sus"ensin + t*e criminal"rsecutin +r #ilatin + atas Pambansa l$. )).

ulin$

T*e "etitin +r re#ie is it*ut merit.

T*e actin +r t*e rescissin + t*e deed + sale n t*e $rund t*Ad#anced Fundatin did nt cm"l it* its bli$atin actuallsee/s ne + t*e alternati#e remedies a#ailable t a cntractin$"art under Article 1191 + t*e Ci#il Cde, t it:

Article 1191. T*e "er t rescind bli$atins is im"lied inreci"rcal nes, in case ne + t*e bli$rs s*uld nt cm"l it*at is incumbent u"n *im.

T*e inured "art ma c*se beteen t*e +ul-lment and t*erescissin + t*e bli$atin, it* t*e "ament + dama$es in eit*

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case. @e ma als see/ rescissin, e#en a+ter *e *as c*sen+ul-lment, i+ t*e latter s*uld becme im"ssible.

T*e curt s*all decree t*e rescissin claimed, unless t*ere be ustcause aut*ri5in$ t*e -2in$ + a "erid.

T*is is understd t be it*ut "reudice t t*e ri$*ts + t*ird"ersns * *a#e acuired t*e t*in$, in accrdance it* Articles168' and 1688 and t*e rt$a$e a.

Article 1191 + t*e Ci#il Cde rec$ni5es an im"lied r tacitreslutr cnditin in reci"rcal bli$atins. T*e cnditin isim"sed b la, and a""lies e#en i+ t*ere is n crres"ndin$a$reement t*eren beteen t*e "arties. T*e e2"lanatin +r t*is ist*at in reci"rcal bli$atins a "art incurs in dela nce t*e t*er

"art *as "er+rmed *is "art + t*e cntractR *ence, t*e "art **as "er+rmed r is read and illin$ t "er+rm ma rescind t*ebli$atin i+ t*e t*er des nt "er+rm, r is nt read and illin$t "er+rm.19

It is true t*at t*e rescissin + a cntract results in t*ee2tin$uis*ment + t*e bli$atr relatin as i+ it as ne#ercreated, t*e e2tin$uis*ment *a#in$ a retracti#e e?ect. T*erescissin is eui#alent t in#alidatin$ and unma/in$ t*e uridicaltie, lea#in$ t*in$s in t*eir status be+re t*e celebratin + t*ecntract.)& @e#er, until t*e cntract is rescinded, t*e uridicaltie and t*e cncmitant bli$atins subsist.

Accrdin$l, e a$ree it* t*e *ldin$ + t*e CA t*at t*e ci#ilactin +r t*e rescissin + cntract as nt determinati#e + t*e$uilt r inncence + ees. #ember 1996R ii t*e interestim"sed n t*e sum + P66&,&&&.&& is ) "er mnt* and is nl+r t*e "erid (ul 1996 t >#ember 1996R iii it des nt im"sinterest n t*e amunt + P)14,49).%) *ic* as "aid bCnstancia t ISS in be*al+ + urdes 2 2 2

T*e rule is t*at n interest s*all be due unless it *as beene2"ressl sti"ulated in ritin$N Art. 19'%, Ci#il Cde. @e#er,t*e cntract des nt "r#ide +r interest in case + de+ault in"ament + t*e sum + P66&,&&&.&& t Cnstancia and t*emnt*l amrti5atins t ISS.

Issue: tender + "ament *as been made in t*is case s as tamunt t cnsi$natinE

@eld: >H\

T*e s"uses nrstr assert t*at urdesN letter + >#ember )1996 amunts t tender + "ament + t*e remainin$ balanceamuntin$ t P%6&,&&&.&&. Accrdin$l, t*ence+rt*, accrual +interest s*uld be sus"ended.

Tender + "ament Jis t*e mani+estatin b t*e debtr + a desiret cm"l it* r "a an bli$atin. I+ re+used it*ut ust causet*e tender + "ament ill disc*ar$e t*e debtr + t*e bli$atint "a but nl a+ter a #alid cnsi$natin + t*e sum due s*all*a#e been made it* t*e "r"er curt.K JCnsi$natin is t*ede"sit + t*e ]"r"er amunt it* a udicial aut*rit^ inaccrdance it* rules "rescribed b la, a+ter t*e tender +

"ament *as been re+used r because + circumstances *ic*render direct "ament t t*e creditr im"ssible r inad#isable.K

JTender + "ament, it*ut mre, "rduces n e?ect.K J]T^ *a#t*e e?ect + "ament and t*e cnseuent e2tin$uis*ment + t*ebli$atin t "a, t*e la reuires t*e cm"anin acts + tender "ament and cnsi$natin.K

As t t*e e?ect + tender + "ament n interest, nted ci#ilistArtur . Tlentin e2"lained as +lls:

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T*e s"uses nrstr are t*ere+re liable +r interest n t*esubect installments +rm t*e date + de+ault until +ull "ament +t*e sums + P6&&,&&&.&& and P66&,&&&.&&.

Uy v $al7ueco

PERALTA(J.:

T*is is a "etitin +r re#ie n certirari1+ t*e Curt + A""ealsNDecisin)dated December 11, )&&% in CAG.. C3 >. 8'877, andits eslutin dated Se"tember 4, )&&7, denin$ "etitinerNsmtin +r recnsideratin.

T*e Curt + A""eals re#ersed and set aside t*e Decisin6+ t*ee$inal Trial Curt TC + anila, ranc* 1, dismissin$ t*eCm"laint +r s"eci-c "er+rmance and dama$es. T*e Curt +A""eals reinstated t*e Cm"laint and directed "etitiner te2ecute deeds + abslute sale in +a#r + res"ndent a+ter"ament + t*e "urc*ase "rice + t*e subect lts.

T*e +acts, as stated b t*e Curt + A""eals, are as +lls:

Petitiner anuel Q Sns, Inc. is t*e re$istered ner + "arcels+ land lcated in Teresa, i5al c#ered b Trans+er Certi-cate +

TitleTCT >. '9'64, c#erin$ an area + abut %,119 suaremetersR TCT >.'944', c#erin$ an area + abut %,868 suaremetersR TCT >. '944%,c#erin$ an area + abut 1),689 suaremetersR and TCT >. '9444,c#erin$ an area + abut 6),&47suare meters.

Hn >#ember )9, 1976, t Cnditinal Deeds + Sale eree2ecuted b "etitiner, as #endr, in +a#r + res"ndent 3albuec,Incr"rated, as #endee. T*e -rst Cnditinal Deed +

Sale4c#ered TCT >s. '9'64, '944' and '944%, and cntainedt*e +llin$ terms and cnditins:

T*at +r and in cnsideratin + t*e sum + H>; @>D;DSIZTBFH T@HSA>D S;3;> @>D;D FHTB>I>;P*"1%4,749.&&P;SHS, P*ili""ine currenc, t*e 3;>DH *ereb a$rees t S;,C;D;, TA>SF; and CH>3;B unt t*e 3;>D;; 22 2 t*ea+rementined "r"erties, "aable under t*e +llin$ terms andcnditins:

1. T*e sum + FHTBH>; T@HSA>D H>;@>D;D;IG@TBS;3;> and )'=1&& P*" 41,187.)'P;SHS s*all be "aid u"n si$nin$ + t*is cnditinal deed+ saleR and

). T*e balance + H>; @>D;D TTBT@;;T@HSA>D FI3; @>D;D SIZTBH>; and 7'=1&&P*"1)6,'%1.7' P;SHS s*all be "aid it*in a "erid +

ne 1 ear +rm >#ember 1', 1976, it* interest +1) "er annum based n t*e balance, in t*e mde andmanner s"eci-ed bel:

a (anuar 4, 1974 P1%,474.9& "lus interest

b Hn r be+re a 1', 1974 P'6,'46.46 "lusinterest

c Hn r be+re >#ember 1', 1974 P'6,'46.6)"lus interest

6. T*at t*e #endee s*all be $i#en a $race "erid + t*irt6&das +rm t*e due date + an installment it*crres"ndin$ interest t be added, but s*uld t*e3;>D;; +ail t ma/e suc* "ament it*in t*e $race"erid t*is cntract s*all be deemed rescinded andit*ut +rce and e?ect a+ter ntice in ritin$ b 3;>DHt 3;>D;;.

4. T*at t*e 3;>DH a$rees t *a#e t*e e2istin$rt$a$es n t*e "r"erties subect + t*is sale releasedn r be+re a )&, 1974.

'. T*at t*e 3;>DH a$rees t *a#e t*e ab#edescribed"r"erties +reed and cleared + all lessees, tenants,ad#erse ccu"ants r suatters it*in 1&& das +rm t*ee2ecutin + t*is cnditinal deed + sale. In case ++ailure b t*e 3;>DH t cm"l it* t*e underta/in$"r#ided in t*is "ara$ra"* and t*e 3;>D;; s*all -nd itnecessar t -le a case r cases in curt t eect t*e saidlessees, tenants, ccu"ants and=r suatters +rm t*eland, subect + t*is sale, t*e 3;>DH a$rees t anserand "a +r all t*e e2"enses incurred and t be incurredin cnnectin it* said cases until t*e same are +ull and-nall terminated.

%. T*at t*e 3;>DH and t*e 3;>D;; a$ree t*at durint*e e2istence + t*is Cntract and it*ut "re#ie2"ressed ritten "ermissin +rm t*e t*er, t*e s*nt sell, cede, assi$n, trans+er r mrt$a$e, r in an encumber unt ant*er "ersn r "art an ri$*t, interer euit t*at t*e ma *a#e in and t said "arcels land. 2 2 2 2

8. T*at it is understd t*at ners*i" + t*e "r"erti*erein cn#eed s*all nt "ass t t*e 3;>D;; until a+t"ament + t*e +ull "urc*ase "riceR "r#ided, *e#et*at t*e 3;>DH s*all all t*e anntatin + tCnditinal Deed + Sale at t*e bac/ + t*e titles + t*ab#edescribed "arcels + land in t*e crres"ndie$istr + Deeds 2 22.

9. T*at u"n +ull "ament + t*e ttal "urc*ase "rice,Deed + Abslute Sale s*all be e2ecuted in +a#r + t3;>D;; and t*e 3;>DH a$rees t "a t*e dcumentastam"s and t*e science stam" ta2 + t*e Deed + Sa*ile t*e 3;>D;; a$rees t "a t*e re$istratin and t*e2"enses +r t*e issuance + a ne title.

1&. T*at it is mutuall a$reed t*at in case + liti$atin, t*#enue + t*e case s*all be in t*e curts + anila, *a#incm"etent urisdictin, an t*er #enue bein$ e2"ress

ai#ed.'

Hn t*e t*er *and, t*e secnd Cnditinal Deed + Sale%c#erit >. '9444 "r#ides, t*us:

1. T*e sum + FIFTBTD S;3;>TBSIZA>

67=1&& P*" '),&7%.67 P;SHS, s*all be "aid u"n si$ni+ t*is cnditinal deed + saleR and

). T*e balance + H>; @>D;D FIFTBSIZT@HSA>TD;D TTB>I>; and 16=1P*"1'%,))9.16 P;SHS s*all be "aid it*in a "erid ne 1 ear +rm >#ember 1', 1976, it* interest 1) "er annum based n t*e balance, in t*e mde amanner s"eci-ed bel:

a (anuar 4, 1974 P)&,86&.'' "lus interest

b Hn r be+re a 1', 1974 P%7,%99.)9 "linterest

c Hn r be+re >#ember 1', 1974, P%7,%99."lus interest

6. T*at t*e 3;>D;; s*all be $i#en a $race "erid + t*i6& das +rm t*e due date + an installment crres"ndin$ interest t be added, but s*uld t3;>D;; +ail t ma/e suc* "ament it*in t*e $ra"erid, t*is cntract s*all be deemed rescinded ait*ut +rce and e?ect a+ter ntice in ritin$ b 3;>DHt 3;>D;;.

4. T*at t*e 3;>DH a$rees and ac/nled$es t*at aand all "aments t be made b t*e 3;>D;; b reasn t*is "resents unless *erea+ter ad#ised b 3;>DH t tcntrar, s*all be made in +a#r + and t t*e P*ili""in

Trust Cm"an b a + l iuidatin and "ament + te2istin$ mrt$a$e n t*e "r"ert subect + t*is sale.

'. T*at a+ter eac* "ament ad#erted t ab#e t3;>DH s*all issue t*e crres"ndin$ recei"t +r tamunt "aid b t*e 3;>DH t t*e P*ili""ine TruCm"an.

%. T*at t*e 3;>DH a$rees t *a#e t*e ab#edescrib"r"ert +reed and cleared + all lessees, tenants, ad#erccu"ants r suatters it*in 1&& das +rm te2ecutin + t*is cnditinal deed + sale. In case +ailure b t*e 3;>DH t cm"l it* t*is underta/in"r#ided in t*is "ara$ra"* and t*e 3;>D;; s*all -ndnecessar t -le a case r cases in curt t eect t*e salessees, tenants, ccu"ants and=r suatters +rm tland, subect + t*is sale, t*e 3;>DH a$rees t ansand "a +r all t*e e2"enses incurred and t be incurrin cnnectin it* said cases until t*e same are +ull a-nall terminated.

7. T*at t*e 3;>DH and t*e 3;>D;; a$ree t*at durint*e e2istence + t*is Cntract and it*ut "re#ie2"ressed ritten "ermissin +rm t*e t*er, t*e s*nt sell, cede, assi$n, trans+er r mrt$a$e, r in an

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encumber unt ant*er "ersn r "art an ri$*t, interestr euit t*at t*e ma *a#e in and t said "arcel + land.

2 2 2 2

9. T*at it is understd t*at ners*i" + t*e "r"ert*erein cn#eed s*all nt "ass t t*e 3;>D;; until a+ter"ament + t*e +ull "urc*ase "rice, "r#ided, *e#er,t*at t*e 3;>DH s*all all t*e anntatin + t*eCnditinal Deed + Sale at t*e bac/ + t*e Title + t*eab#edescribed "arcel + land in t*e crres"ndin$e$istr + DeedsR 2 22.

1&. T*at u"n +ull "ament + t*e ttal "urc*ase "rice, aDeed + Abslute Sale s*all be e2ecuted in +a#r + t*e

3;>D;; and t*e 3;>DH a$rees t "a t*e dcumentarstam"s and t*e science stam" ta2 + t*e Deed + SaleR*ile t*e 3;>D;; a$rees t "a t*e re$istratin and t*ere2"enses +r t*e issuance + a ne title.

11. T*at it is mutuall a$reed t*at in case + liti$atin, t*e#enue + t*e case s*all be in t*e curts + anila, *a#in$cm"etent urisdictin, an t*er #enue bein$ e2"ressl

ai#ed.7es"ndent as able t "a "etitiner t*e amunt

+ P)7',&''.''8as "artial "ament +r t*e t "r"ertiescrres"ndin$ t t*e initial "aments and t*e -rst installments +t*e said "r"erties.

At t*e same time, "etitiner cm"lied it* its bli$atin under t*ecnditinal deeds + sale, as +lls: 1 t*e mrt$a$e +r TCT >.'944% as released n a 18, 1984, *ile t*e mrt$a$es +r TCT>s. '944'and '9'64 ere released n (ul 19, 1974R ) t*eunla+ul ccu"ants + t*e lts c#ered b TCT >s. '9444, '9'64,'944' and '944% surrendered t*eir "ssessin and use + t*e saidlts in cnsideratin + t*e amunt + P%,&&&.&& in a

dcument9dated >#ember 19, 1976, and t*e a$reed tdemlis*