Prediction of cases for oblicon

Balatbat vs. CA Marin vs Adil

Facts: Facts:
On August 20, 1980, Aurelio A. The Armadas were expecting to
Roque filed a complaint for Rescission inherit some lots from their uncle. Marin
of Contract docketed as Civil Case No. had hereditary rights in the estates of
134131 against spouses Aurora her parents. A deed of exchange was
Tuazon-Repuyan and Jose Repuyan executed wherein it was stipulated that
before Branch IV of the then Court of both parties acknowledge that the
First Instance of Manila. The complaint exchange operates to their individual
is grounded on spouses Repuyans and mutual benefit and advantage, for
failure to pay the balance of P45,000.00 the reason that the property being
of the purchase price. ceded, transferred, conveyed and
unclaimed by one party to the other is
Issue: Whether the sale was merely situated in the place where either is a
executory? resident resulting in better
administration of the properties. But the
Held: No. It was consummated. expected land was adjudicated to
Examining the terms and conditions of Soledad, sister of Marin. So, the
the Deed of Sale dated April 1, 1980, Armadas and other heirs sued Soledad
the P45,000.00 balance is payable only for claiming to be the sole heir of their
after the property covered by T.C.T. No. uncle, but ended in a compromise
135671 has been partitioned and where the Armadas were awarded two
subdivided, and title issued in the name lots. Marin waived, renounced and
of the BUYER hence, vendor Roque quitclaimed her share in her parents’
cannot demand payment of the balance estate in favour of her another sister
unless and until the property has been Aurora. She cannot anymore fulfil her
subdivided and titled in the name of the obligations in her signed deed of
private respondents. Devoid of any exchange with the Armadas. The
stipulation that ownership in the thing Armadas filed a rescisorry action
shall not pass to the purchaser until he against Marin.
has fully paid the price, ownership in the
thing shall pass from the vendor to the Issue: Whether Mrs. Marin has the right
vendee upon actual or constructive to rescind the contract?
delivery of the thing sold even if the
purchase price has not yet been fully Held: No. Her action would be barred
paid. The failure of the buyer to make under the rule of exceptio non adimpleti
good the price does not, in law, cause contractus (plaintiff is not entitled to sue
the ownership to revest to the seller because he has not performed his part
unless the bilateral contract of sale is of the agreement).
first rescinded or resolved pursuant to
Article 1191 of the New Civil Code. Non-
payment only creates a right to demand
the fulfillment of the obligation or to
rescind the contract.
 Prediction of cases for oblicon

Deiparine, Jr. vs. CA Conculada vs. CA

Facts: Facts:
An construction contract was Issue: Is petitioner Conculada entitled
entered between Deiparine, Jr. and to the restitution of the P455,000
spouses Cesario and Teresita Carungay purchase price?
for the construction of a three-story
dormitory in Cebu City. After, the Held: Yes. The sale was a rescissible
construction, said building was contract. The prevailing doctrine is that
structurally defective as per the test of a contract of sale entered into in
Geo-Testing International. Aggrieved, violation of a right of first refusal of
the spouses filed a complaint against another person is rescissible.
the petitioner in which they were favored
by the respondent Court.

Issue: Whether or not the construction

contract falls squarely under the
coverage of Article 1191?

Held: Yes. Because it imposes upon

Deiparine the obligation to build the
structure and upon the Carungays the
obligation to pay for the project upon its
completion. Article 1191, unlike Article
1385, is not predicated on economic
prejudice to one of the parties but on
breach of faith by one of them that
violates the reciprocity between them.
The violation of reciprocity between
Deiparine and the Carungay spouses, to
wit, the breach caused by Deiparine's
failure to follow the stipulated plans and
specifications, has given the Carungay
spouses the right to rescind or cancel
the contract.
 Prediction of cases for oblicon
It is true that respondents
Unlad Resources Dev. Corp. vs. increased the Rural Banks authorized
Dragon capital stock to only P5 million, which
was not enough to accommodate the
Facts: P4.8 million worth of stocks that
A Memorandum of Agreement petitioners were to subscribe to and pay
was executed by the petitioner and for. However, respondents failure to
respondent wherein it is provided that fulfill their undertaking in the agreement
[respondents], as controlling would have given rise to the scenario
stockholders of the Rural Bank [of contemplated by Article 1191 of the Civil
Noveleta] shall allow Unlad Resources Code
to invest four million eight hundred
thousand pesos (P4,800,000.00) in the Rescission has the effect of
Rural Bank in the form of additional unmaking a contract, or its undoing from
equity. On the other hand, [petitioner] the beginning, and not merely its
Unlad Resources bound itself to invest termination. Hence, rescission creates
the said amount of 4.8 million pesos in the obligation to return the object of the
the Rural Bank. However, Unlad failed contract. It can be carried out only when
and refused to comply with their the one who demands rescission can
obligation under the said Memorandum return whatever he may be obliged to
of Agreement when it did not invest four restore. To rescind is to declare a
million eight hundred thousand pesos contract void at its inception and to put
(P4,800,000.00) in the Rural Bank in the an end to it as though it never was. It is
form of additional equity and, likewise, it not merely to terminate it and release
failed to immediately infuse one million the parties from further obligations to
two hundred thousand pesos each other, but to abrogate it from the
(P1,200,000.00) as paid in capital upon beginning and restore the parties to their
signing of the Memorandum of relative positions as if no contract has
Agreement. been made.

Aggrieved, respondent filed for **Note: Art. 1385

rescission of contract plus damages in
which the Trial Court ruled in his favor.

Issue: Whether the trial court, as

affirmed by the CA, correctly ruled for
the rescission of the subject
Agreement?

Held: Yes. There is no question that

petitioners herein failed to fulfill their
obligation under the Memorandum of
Agreement. Even they admit the same,
albeit laying the blame on respondents.
 Prediction of cases for oblicon
True, petitioners expressed their
willingness to pay the balance of the
purchase price one month after it
Velarde vs. CA became due; however, this was not
equivalent to actual payment as would
Facts: constitute a faithful compliance of their
The private respondent executed reciprocal obligation. Moreover, the offer
a Deed of Sale with Assumption of to pay was conditioned on the
Mortgage, with a balance of P1.8 performance by private respondents of
million, in favor of the petitioners. additional burdens that had not been
Pursuant to said agreements, plaintiffs agreed upon in the original contract.
paid the bank (BPI) for three (3) months Thus, it cannot be said that the breach
until they were advised that the committed by petitioners was merely
Application for Assumption of Mortgage slight or casual as would preclude the
was denied. This prompted the plaintiffs exercise of the right to rescind.
not to make any further payment.
Private respondent wrote the petitioners **NOTE: Considering that the rescission
informing the non-fulfillment of the of the contract is based on Article 1191
obligations. Petitioners, thru counsel of the Civil Code, mutual restitution is
responded that they are willing to pay in required to bring back the parties to their
cash the balance subject to several original situation prior to the inception of
conditions. Private respondents sent a the contract. Accordingly, the initial
notarial notice of cancellation/rescission payment of P800,000 and the
of the Deed of Sale. Petitioners filed a corresponding mortgage payments in
complaint which was consequently the amounts of P27,225, P23,000 and
dismissed by an outgoing judge but was P23,925 (totaling P874,150.00)
reversed by the assuming judge in their advanced by petitioners should be
Motion for Reconsideration. The Court returned by private respondents, lest the
of Appeals reinstated the decision to latter unjustly enrich themselves at the
dismiss. expense of the former.

Issue: Whether The Court of Appeals Rescission creates the obligation to

erred in holding that the rescission return the object of the contract. It can
(resolution) of the contract by private be carried out only when the one who
respondents was justified? demands rescission can return whatever
he may be obliged to restore.[20] To
Held: No. Because of the failure of rescind is to declare a contract void at
petitioners to comply with their its inception and to put an end to it as
obligation to pay the balance of the though it never was. It is not merely to
purchase price. Indubitably, the latter terminate it and release the parties from
violated the very essence of reciprocity further obligations to each other, but to
in the contract of sale, a violation that abrogate it from the beginning and
consequently gave rise to private restore the parties to their relative
respondent’s right to rescind the same positions as if no contract has been
in accordance with law. made
 Prediction of cases for oblicon
repeatedly failed to pay not only the
balance but the initial amount as down
payment in consideration of which the
contracts or agreements were executed.
As a matter of fact, the petitioner later
asked the SSS to cancel his loan
Siy vs. CA application. He thereby abandoned his
own claim for specific performance.
Facts: Therefore, the appellate court correctly
Siy and the respondent spouses affirmed the rescission of the above-
Valdez entered into a contract of sale for mentioned contracts.
a parcel of land containing an area of
155 square meters, more or less, and Padilla vs. Paredes
the house constructed thereon, situated Facts:
at No. 333 Jefferson Street, Makati, and Petitioner Albert R. Padilla and
covered by Transfer Certificate of Title private respondents Floresco and
No. 32718 of the Registry of Deeds of Adelina Paredes entered into a contract
Rizal. Petitioner however failed to pay to sell involving a parcel of land in San
the amount of 12,000.00 and the Juan, La Union, of the P312,840.00
balance of P4,376.00. purchase price, petitioner was to pay a
down payment of P50,000.00 upon
Issue: Whether or not the Court of signing of the contract, and the balance
Appeals erred in sustaining the trial was to be paid within ten days from the
court in ordering the rescission of the issuance of a court order directing
agreement (exhibit 5) and the payment issuance of a decree of registration for
of damages and attorney's fees? the property. However, petitioner failed
to pay the mentioned amount.
Held: No. By failing to pay the amount
of P12,000.00 and the balance of Issue: Whether the respondent Court of
P4,376.00 as stipulated in the contract Appeals erred in reversing and setting
within the forty-five (45) days period, the aside the judgment of the trial court, by
petitioner clearly committed a breach of holding that private respondents are
contract which sufficiently and justly entitled to rescind their "contract to sell"
entitled the respondents to ask for the the land to petitioner?
rescission of the contracts. In the case
of Nagarmull v. Binalbagan-Isabel Sugar Held: No. There is failure on the part of
Co., Inc. (33 SCRA 52), we ruled that the petitioners to pay the balance within
"The Breach of contract committed by ten days upon the conveyance of the
appellee gave appellant, under the law Court of the Title of Land to
and even under general principles of respondents. Thus, private respondents
fairness, the right to rescind the contract are under no obligation, and may not be
or to ask for its specific performance, in compelled, to convey title to petitioner
either case with right to demand and receive the full purchase price.
damages ... It is evident, in the case at
bar, that the respondents chose to
rescind the contracts after the petitioner
 Prediction of cases for oblicon

Mortel vs. KASSCO Delta Motor Corporation vs. Genuino

Issue: Whether Art. 11191 is applicable Issue: W/N Genuinos' non-performance

in the case at bar? of its obligations was a substantial
breach, let alone a breach of contract,
Held: No. When private respondent thus as would warrant rescission under Art.
failed to secure CCTs over the property 1191 of NCC?
subject of this controversy, the contract
to sell did not take into effect. Held: No. In construing Art. 1191, the
Consequently, the laws invoked by Supreme Court has stated that,
petitioner, PD 957 and RA 6581, find no "[r]escission will be ordered only where
application to the present case because the breach complained of is substantial
said laws presuppose the existence of a as to defeat the object of the parties in
valid and effective contract to sell a entering into the agreement. It will not
condominium. As succinctly pointed out be granted where the breach is slight or
by the Court of Appeals, the parties casual." [Phil. Amusement Enterprises,
must have, in fact, anticipated the non- Inc. v. Natividad, G.R. No. L-21876,
fulfillment of the suspensive condition September 29, 1967, 21 SCRA 284,
when they incorporated the lease 290.] Further, "[t]he question of whether
contract in their agreements. Moreover, a breach of a contract is substantial
the subsequent act of herein petitioner, depends upon the attendant
specifically, the payment of monthly circumstances." [Universal Food
rental fees evidenced by receipts Corporation v. Court of Appeals, G. R.
denominated as rental confirm No. L-29155, May 13,1970,33 SCRA 1,
petitioners assent to the lease contract 18].
embodied in the subject agreements.
Since, the conditional obligation is In the case at bar, the conduct of
deemed not to have existed by reason Delta indicates that the Genuinos' non-
of the non-fulfillment of the suspensive performance of its obligations was not a
condition, the award of damages under substantial breach, let alone a breach of
Art. 1191 of the Civil Code is contract, as would warrant rescission.
unwarranted.
First, Delta did not do anything
when Genuinos refused to accept the
delivery of the pipes two months after
the execution of contract.

Secondly, three (3) years later

when the Genuinos offered to make
payment Delta did not raise any
 Prediction of cases for oblicon
argument but merely demanded that the
quoted prices be increased. Moreover,
the power to rescind under Art. 1191 is
not absolute. "[T]he act of a party in
treating a contract as cancelled or
resolved on account of infractions by the
other contracting party must be made Pryce Corp. vs. CA
known to the other and is always
provisional, being ever subject to Facts:
scrutiny and review by the proper court." A contract of lease was entered
In the instant case, Delta made no into between petitioner and PAGCOR
manifestation whatsoever that it had for the setting up of a casino in Pryce
opted to rescind its contracts with the Plaza Hotel in Cagayan de Oro City.
Genuinos. It only raised rescission as a However, by virtue of a resolution
defense when it was sued for specific passed in CDO before, casinos are
performance by private respondents. prohibited from operating or opening in
the City. After said resolutions were
Further, it would be highly declared unconstitutional, public
inequitable for petitioner Delta to rescind respondents elevated the case to the
the two (2) contracts considering the Supreme Court in which it was denied.
fact that not only does it have in its
possession and ownership the black Issue:
iron pipes, but also the P15,900.00
down payments private respondents
have paid. And if petitioner Delta claims
the right to rescission, at the very least,
it should have offered to return the
P15,900.00 down payments [See Art.
1385, Civil Code and Hodges v.
Granada, 59 Phil. 429 (1934)].