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    Paper 3

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    Eileen Kay A. Mañibo
    The Congregation of the Religious of the Virgin Mary purchased property adjacent to their school from the Orola family for 5.55 million pesos in 1999. They paid a 10% down payment but then refused to pay the balance, claiming the contract was not properly signed and they did not have the funds. The Orola family sued for either the balance of payment or rescission of the contract. The Supreme Court ruled that the Religious of the Virgin Mary breached the contract by not paying and must pay the remaining 4.99 million balance plus 6% annual interest from 2000 until paid in full. The Orola family must then transfer the title to the property.

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    Paper 3

    Uploaded by

    Eileen Kay A. Mañibo
    110 views3 pages
    The Congregation of the Religious of the Virgin Mary purchased property adjacent to their school from the Orola family for 5.55 million pesos in 1999. They paid a 10% down payment but then refused to pay the balance, claiming the contract was not properly signed and they did not have the funds. The Orola family sued for either the balance of payment or rescission of the contract. The Supreme Court ruled that the Religious of the Virgin Mary breached the contract by not paying and must pay the remaining 4.99 million balance plus 6% annual interest from 2000 until paid in full. The Orola family must then transfer the title to the property.

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    The Congregation of the Religious of the Virgin Mary purchased property adjacent to their school from the Orola family for 5.55 million pesos in 1999. They paid a 10% down payment but then refused to pay the balance, claiming the contract was not properly signed and they did not have the funds. The Orola family sued for either the balance of payment or rescission of the contract. The Supreme Court ruled that the Religious of the Virgin Mary breached the contract by not paying and must pay the remaining 4.99 million balance plus 6% annual interest from 2000 until paid in full. The Orola family must then transfer the title to the property.

    Copyright:

    © All Rights Reserved
    Download as DOC, PDF, TXT or read online from Scribd
    Download as doc, pdf, or txt
    110 views3 pages

    Paper 3

    Uploaded by

    Eileen Kay A. Mañibo
    The Congregation of the Religious of the Virgin Mary purchased property adjacent to their school from the Orola family for 5.55 million pesos in 1999. They paid a 10% down payment but then refused to pay the balance, claiming the contract was not properly signed and they did not have the funds. The Orola family sued for either the balance of payment or rescission of the contract. The Supreme Court ruled that the Religious of the Virgin Mary breached the contract by not paying and must pay the remaining 4.99 million balance plus 6% annual interest from 2000 until paid in full. The Orola family must then transfer the title to the property.

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    © All Rights Reserved
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    of 3

    Congregation of the Religious of the Virgin Mary v.

    Orola

    G.R. No. 169790, April 30, 2008

    FACTS:

    Petitioner, through Sr. Fe Enhenco, local Superior of St. Mary’s Academy of

    Capiz, bought the property of the respondents adjacent to the said school. A

    contract to sell dated in June 2, 1999 was made out in the names of the petitioner

    and the respondents. The total amount of the property is P 5, 550, 000.00 with 10%

    of the total payable upon the execution of the contract.

    On June 7, 1999 respondents received a check bearing the amount of P 555,

    500.00 as 10% down payment for the property from the petitioner with the

    “conforme” signed by Sr. Enhenco. After the respondents had transferred the

    property into their names, they scheduled a meeting with the petitioner at the RVM

    Headquarters in Quezon City to finalize the sale. However, the latter did not meet

    with respondents. In an exchange of correspondence between the parties’

    respective counsels, petitioner denied respondent’s demand for payment because

    the Contract to Sell was not signed by their head of corporation and RVM will only

    be in a financial position to pay the balance of the purchase in two years’ time.

    Thus, respondents filed in RTC a complaint with alternative causes of action of

    specific performance or rescission. The trial court ruled that there was indeed a
    perfected contract of sale between parties and granted respondent’s prayer for

    rescission.

    On appeal, the Court of Appeals rendered judgment setting aside the RTC

    decision and ordered petitioner to pay the respondents the balance of the total

    consideration for the subject property in the amount of P 4, 999, 500.00 with

    interest of 6% per annum computed from June 7, 2000 or one year from the down

    payment of the 10% of the total consideration until such time when the whole

    obligation has been fully satisfied. On the other hand, respondents were likewise

    ordered to deliver the title of the property as soon as RVM has complied.

    Dissatisfied, petitioner brought the matter to the Supreme Court.

    ISSUE:

    Whether or not petitioner is liable for interest on the balance of the purchase

    price?

    HELD:

    Yes. Article 2210 of the Civil Code explicitly expresses that “interest may,

    in the discretion of the court, be allowed upon damages awarded for breach of

    contract.” In the case at bar, the petitioner breached the contract of sale by refusing

    to pay the balance of the purchase price despite the transfer to respondent’s names

    of the title to the property. The two-year period petitioner relies on had long passed

    and expired, yet, it still failed to pay. Hence, petitioner’s refusal to pay gives the
    respondents to avail rightfully the alternative remedies provided in the Civil Code.

    Accordingly, respondents are entitled to damages regardless of whichever relief,

    rescission or specific performance, would be granted by the lower courts.

    With all the foregoing, the Court denied the petition and granted the specific

    performance and payment of the balance of the purchase price plus 6% interest per

    annum from June 7, 2000 until completed satisfactorily.

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