46.rillo v. ca

8/9/2019 46.Rillo v. CA

http://slidepdf.com/reader/full/46rillo-v-ca 1/5

Republic of the Philippines

SUPREME COURT

Manila

SECOND DIVISION

G.R. No. 125347 June 19, 1997

EMILIANO RILLO, petitioner,

vs.

COURT OF APPEALS an COR! REALT" IN#ESTMENT, CORP., respondents.

PUNO,J.:

his is an appeal under Rule !" of the Rules of Court to set aside the decision 1 of the Court of

#ppeals in C# $.R. CV No. %&'() cancellin* the +Contract to Sell+ beteen petitioner E-iliano Rillo and

private respondent Corb Realt Invest-ent Corporation. It also ordered Rillo to vacate the pre-ises

sub/ect of the contract and Corb Realt to return "(0 of P'"),')!.(( or P1&,(&2.(( to Rillo.

he facts of the case are the folloin*3

On 4une '), '&)", petitioner Rillo si*ned a +Contract o Sell of Condo-iniu- 5nit+ ith private

respondent Corb Realt Invest-ent Corporation. 5nder the contract, COR6 RE#78 a*reed to sell

to RI77O a 9'." s:uare -eter condo-iniu- unit located in Mandaluon*, Metro Manila. he

contract price as P'"(,(((.((, one half of hich as paid upon its e;ecution, hile the balance of

P1",(((.(( as to be paid in telve <'2= e:ual -onthl install-ents of P1,(&2.(( be*innin* 4ul '),

'&)". It as also stipulated that all outstandin* balance ould bear an interest of 2!0 per annum>

the install-ent in arrears ould be sub/ect to li:uidated penalt of '."0 for ever -onth of default

fro- due date. It as further a*reed that should petitioner default in the pa-ent of three <%= or four

<!= -onthl install-ents, forfeiture proceedin*s ould be *overned b e;istin* las, particularl the

Condo-iniu- #ct. 2

On 4ul '), '&)", RI77O failed to pa the initial -onthl a-orti?ation. On #u*ust '), '&)", he a*ain

defaulted in his pa-ent. On Septe-ber 2(, '&)", he paid the first -onthl install-ent of P1,(&2.((.

On October 2, '&)", he paid the second -onthl install-ent of P1,(&2.((. @is third pa-ent as on

Aebruar 2, '&)9 but he paid onl P",(((.(( instead of the stipulated P1,(&2.((. 3

On 4ul 2(, '&)1 or seventeen <'1= -onths after RI77OBs last pa-ent, COR6 RE#78 infor-ed

hi- b letter that it is cancellin* their contract due to his failure to settle his accounts on ti-e. COR6

RE#78 also e;pressed its illin*ness to refund RI77OBs -one. 4

8/9/2019 46.Rillo v. CA


COR6 RE#78, hoever, did not cancel the contract for on Septe-ber 2), '&)1, it received

P9(,(((.(( fro- petitioner. 5

RI77O defaulted a*ain in his -onthl install-ent pa-ent. Conse:uentl, COR6 RE#78 infor-ed

RI77O throu*h letter that it as proceedin* to rescind their contract. $ In a letter dated #u*ust 2&,

'&)), it re:uested RI77O to co-e to its office and ithdra P'(2,!"&.%" less the rentals of the unit fro-4ul ', '&)" to Aebruar 2), '&)&. 7 #*ain the threatened rescission did not -ateriali?e. # +co-pro-ise+

as entered into b the parties on March '2, '&)&, hich stipulated the folloin*3

'. Restructure Outstandin* 6alance Don to P"(,(((.((

2. Pa-ent P2,(((.((Month

')0 <Ei*hteen Percent=

Monthl o Co-pute No. of

Install-ents

%. o Pa itlin* Plus #n Real Estate a; Due

!. Install-ents to start #pril '", '&)&. %

Rillo once -ore failed to honor their a*ree-ent. RI77O as able to pa P2,(((.(( on #pril 2", '&)&

and P2,(((.(( on Ma '", '&)&. 9

On #pril %, '&&(, COR6 RE#78 sent RI77O a state-ent of accounts hich fi;ed his total arrears,

includin* interests and penalties, to P'"",'2&.((. Fhen RI77O failed to pa this a-ount, CORE

RE#78 filed a co-plaint1& for cancellation of the contract to sell ith the Re*ional rial Court of Pasi*.

In his anser to the co-plaint, RI77O averred, a-on* others, that hile he had alread paid a total

of P'!&,(((.((, COR6 RE#78 could not deliver to hi- his individual title to the sub/ect propert>

that COR6 RE#78 could not clai- an ri*ht under their previous a*ree-ent as the sa-e as

alread novated b their ne a*ree-ent for hi- to pa P"(,(((.(( representin* interest char*es

and other penalties spread throu*h tentGfive <2"= -onths be*innin* #pril '&)&> and that COR6

RE#78Bs clai- of P'"",'2&.&& over and above the a-ount he alread paid has no le*al basis. 11

#t the preGtrial, the parties stipulated that RI77OBs principal outstandin* obli*ation as of March '2,

'&)& as P"(,(((.(( and he has paid onl P!,(((.(( thereof and that the -onthl a-orti?ation of

P2,(((.(( as to bear ')0 interest per annum based on the unpaid balance. he issues ere

defined as3 <'= hether or not COR6 RE#78 as entitled to a rescission of the contract> and <2= if

not, hether or not RI77OBs current obli*ation to COR6 RE#78 a-ounts to P92,(((.(( onl

inclusive of accrued interests. 12

he Re*ional rial Court held that COR6 RE#78 cannot rescind the +Contract to Sell+ because

petitioner did not co--it a substantial breach of its ter-s. It found that RI77O substantiall co-plied

ith the +Contract to Sell+ b pain* a total of P'"!,')!.((. It ruled that the re-ed of COR6

RE#78 is to file a case for specific perfor-ance to collect the outstandin* balance of the purchase

price.

8/9/2019 46.Rillo v. CA


COR6 RE#78 appealed the aforesaid decision to public respondent Court of #ppeals assi*nin* the

folloin* errors, to it3

@E RI#7 CO5R ERRED IN DISRE$#RDIN$ O@ER A#CS OA @E C#SE,

INC75DIN$ @E A#C @# @E CONR#C O SE77, #S NOV#ED,

CRE#ED RECIPROC#7 O67I$#IONS ON 6O@ P#RIES>

@E RI#7 CO5R ERRED IN DISRE$#RDIN$ #RIC7E ''&' OA @E CIVI7

CODE>

@E RI#7 CO5R ERRED IN RENDERIN$ 45D$MEN 68 SIMP78

DISRE$#RDIN$ @E C#SE OA ROH5E V. 7#P5, &9 SCR# 1!!, #ND FI@O5

INDIC#IN$ @E #PP7IC#67E 7#F ON @E C#SE.

@E RI#7 CO5R ERRED IN RENDERIN$ # DECISION F@IC@ DID NO

COMP7EE78 DISPOSE OA @E C#SE.

he respondent Court of #ppeals reversed the decision. It ruled3 <'= that rescission does not appl

as the contract beteen the parties is not an absolute conveance of real propert but is a contract

to sell> <2= that the Condo-iniu- #ct <Republic #ct No. !129, as a-ended b R.#. 1)&&= does not

provide anthin* on forfeiture proceedin*s in cases involvin* install-ent sales of condo-iniu- units,

hence, it is Presidential Decree No. &"1 <Subdivision and Condo-iniu- 6uers Protective Decree=

hich should be applied to the case at bar. 5nder Presidential Decree No. &"1, the ri*hts of a buer

in the event of failure to pa install-ent due, other than the failure of the oner or developer to

develop the pro/ect, shall be *overned b Republic #ct No. 9""2 or the RE#78 INS#77MEN

658ER PROECION #C also Jnon as the Maceda 7a <enacted on Septe-ber '!, '&12=. he

dispositive portion of its Decision states3

F@EREAORE, the decision appealed fro- is hereb SE #SIDE. he Contract to

Sell is hereb declared cancelled and rendered ineffective. PlaintiffG#ppellant is

hereb ordered to return "(0 of P'"),')!.(( or P1&,(&2.(( to appellee ho is

hereb ordered to vacate the sub/ect pre-ises.

SO ORDERED. 13

@ence, this appeal ith the folloin* assi*n-ent of errors3

@E @ONOR#67E CO5R OA #PPE#7S SERIO5S78 #ND $R#VE78 ERRED IN

@O7DIN$ #ND DECIDIN$ @# RESCISSION IS @E PROPER REMED8 ON #PERAECED #ND CONS5MM#ED CONR#C>

@E @ONOR#67E CO5R OA #PPE#7S SERIO5S78 #ND $R#VE78 ERRED IN

NO @O7DIN$ #ND DECIDIN$ @# @E O7D CONS5MM#ED CONR#C

@#S 6EEN S5PERSEDED 68 # NEF, SEP#R#E, INDEPENDEN #ND

S56SEH5EN CONR#C 68 NOV#ION.

8/9/2019 46.Rillo v. CA


he petition is ithout -erit.

he respondent court did not err hen it did not appl #rticles ''&' and '"&2 of the Civil Code on

rescission to the case at bar. he contract beteen the parties is not an absolute conveance of real

propert but a contract to sell. In a contract to sell real propert on install-ents, the full pa-ent of

the purchase price is a positive suspensive condition, the failure of hich is not considered a breach,casual or serious, but si-pl an event hich prevented the obli*ation of the vendor to conve title

fro- ac:uirin* an obli*ator force.+ 14 he transfer of onership and title ould occur after full pa-ent

of the purchase price. Fe held in Luzon Brokerage Co., Inc . v . Maritime Building Co., Inc . 15 that there can

be no rescission of an obli*ation that is still nonGe;istent, the suspensive condition not havin* happened.

$iven the nature of the contract of the parties, the respondent court correctl applied Republic #ct

No. 9""2. Knon as the Maceda 7a, R.#. No. 9""2 reco*ni?es in conditional sales of all Jinds of

real estate <industrial, co--ercial, residential= the ri*ht of the seller to cancel the contract upon nonG

pa-ent of an install-ent b the buer, hich is si-pl an event that prevents the obli*ation of the

vendor to conve title fro- ac:uirin* bindin* force. 1$ It also provides the ri*ht of the buer on

install-ents in case he defaults in the pa-ent of succeedin* install-ents, viz 3

<'= Where he has paid at least two years of installments,

<a= o pa, ithout additional interest, the unpaid install-ents due ithin the total

*race period earned b hi-, hich is hereb fi;ed at the rate of one -onth *race

period for ever one ear of install-ent pa-ents -ade3 Provided , hat this ri*ht

shall be e;ercised b the buer onl once in ever five ears of the life of the contract

and its e;tensions, if an.

<b= If the contract is cancelled, the seller shall refund to the buer the cash surrender

value of the pa-ents on the propert e:uivalent to fift per cent of the total

pa-ents -ade and, after five ears of install-ents, an additional five per cent ever

ear but not to e;ceed ninet per cent of the total pa-ents -ade3 Provided , hat

the actual cancellation of the contract shall taJe place after cancellation or the

de-and for rescission of the contract b a notarial act and upon full pa-ent of the

cash surrender value to the buer.

Don pa-ents, deposits or options on the contract shall be included in the

co-putation of the total nu-ber of install-ents -ade.

<2= Where he has paid less than two years in installments,

Sec. !. . . . the seller shall *ive the buer a *race period of not less than si;t das

fro- the date the install-ent beca-e due. If the buer fails to pa the install-ents

due at the e;piration of the *race period, the seller -a cancel the contract after

thirt das fro- receipt b the buer of the notice of cancellation or the de-and for

rescission of the contract b a notarial act.

8/9/2019 46.Rillo v. CA


Petitioner RI77O paid less than to ears in install-ent pa-ents, hence, he is onl entitled to a

*race period of not less than si;t <9(= das fro- the due date ithin hich to -aJe his install-ent

pa-ent. COR6 RE#78, on the otherhand, has the ri*ht to cancel the contract after thirt <%(= das

fro- receipt b RI77O of the notice of cancellation. @ence, the respondent court did not err hen it

upheld COR6 RE#78Bs ri*ht to cancel the sub/ect contract upon repeated defaults in pa-ent b

RI77O.

Petitioner further contends that the contract to sell has been novated b the parties a*ree-ent of

March '2, '&)&. he contention cannot be sustained. #rticle '2&2 of the Civil Code provides that +In

order that an obli*ation -a be e;tin*uished b another hich substitutes the sa-e, it is i-perative

that it be so declared in une:uivocal ter-s, or that the old and the ne obli*ations be on ever point

inco-patible ith each other.+ Novation is never presu-ed. 17 Parties to a contract -ust e;pressl

a*ree that the are abro*atin* their old contract in favor of a ne one. 1% In the absence of an e;press

a*ree-ent, novation taJes place onl hen the old and the ne obli*ations are inco-patible on ever

point.19 In the case at bar, the parties e;ecuted their Ma '2, '&)& +co-pro-ise a*ree-ent+ precisel to

*ive life to their +Contract to Sell+. It -erel clarified the total su- oed b petitioner RI77O to private

respondent COR6 RE#78 ith the vie that the for-er ould find it easier to co-pl ith his obli*ations

under the Contract to Sell. In f ine, the +co-pro-ise a*ree-ent+ can stand to*ether ith the Contract to

Sell.

Nevertheless, e do not a*ree ith the respondent Court so far as it ordered private respondent

COR6 RE#78 to refund "(0 of P'"),')!.(( or P1&,(&2.(( to petitioner RI77O. 5nder Republic

#ct No. 9""2, the ri*ht of the buer to a refund accrues onl hen he has paid at least to <2= ears

of install-ents. In the case at bar, RI77O has paid less than to <2= ears in install-ents, hence, he

is not entitled to a refund.

IN VIEF F@EREOA, the decision appealed fro- is #AAIRMED ith the MODIAIC#ION that the

refund of "(0 P'"),')!.(( or P1&,(&2.((# -ade in favor of petitioner E-iliano Rillo is deleted. No

costs.

SO ORDERED.

(no digest available)

46.rillo v. ca

Documents