Pascual v. Ang
REITERATIONFacts
The Antecedents: Romulo Pascual entered into a sale transaction in January 1989 with Encarnacion P. Ang, et al., through Antonio Ang, for three parcels of land in Navotas City, embodied in a document titled "Pagpapatunay at Pananagutan." The agreement stipulated a price of P350.00 per square meter, with a P50,000.00 downpayment received, and the balance payable upon the seller's completion of the survey, plans, papers, and titles for the said lands. One parcel was registered in respondents' names under OCT No. 246 on October 28, 1993. Petitioner claimed the remaining two lots were surveyed and titles issued under Romulo Pascual's name, and respondents failed to pay the balance. Procedural History: Petitioner filed a complaint for rescission of the "Pagpapatunay at Pananagutan" with damages before the RTC on March 2, 2006, arguing for an increased purchase price due to inflation. Respondents admitted the sale but contended that the agreement required titles to be registered in their names before they paid the balance, and that petitioner breached the contract by refusing to register the lots under their names while demanding a higher price. The RTC ruled in favor of respondents, finding that the parties intended for petitioner to secure titles in respondents' names before payment of the balance, and that the agreed price was binding. The CA affirmed the RTC's decision, holding that respondents' non-payment was due to petitioner's failure to comply with her obligation, thus petitioner was not the injured party entitled to rescission. The Petition: Petitioner seeks review of the CA's decision, arguing that the CA erred in not considering the parties' contemporaneous and subsequent acts, in finding petitioner at fault, and in failing to pronounce on respondents' reciprocal obligation to pay the balance within a reasonable time.
Issue(s)
Whether the Court of Appeals gravely erred when it failed to consider the real intention of the parties based on their conduct, words, and deeds prior to, during, and immediately after executing the contract of sale in order to arrive at its correct and just interpretation. Whether the Court of Appeals gravely erred when it found that petitioner was at fault and therefore not the injured party such that would justify the rescission of the subject contract. Whether the Court of Appeals gravely erred when while it imposes on petitioner the obligation to cause the transfer of titles in the names of respondents, it made no pronouncement on the reciprocal obligation of the latter to pay within the reasonable period of time the remaining balance of the purchase, including reasonable compensation for the use of the subject properties.
Ruling
The petition is denied. The Decision dated July 4, 2017 and the Resolution dated November 22, 2017 of the Court of Appeals in CA-G.R. CV No. 107299 are affirmed. Petitioner is ordered to cause the transfer of the titles of the subject lots in the name of the respondents. Respondents are ordered to pay petitioner the remaining balance of the purchase price within thirty days from the transfer of the title of the subject lots in their names.
Ratio Decidendi
On the issue of interpreting the contract's intention: The Supreme Court reiterated that it is not a trier of facts and generally defers to the factual findings of lower courts, especially when supported by substantial evidence, unless exceptions like grave abuse of discretion or misapprehension of facts exist. In this case, the Court found no such exceptions. Applying Articles 1370 and 1371 of the Civil Code, the Court noted that while paragraph 5 of the "Pagpapatunay at Pananagutan" was ambiguous, the RTC and CA correctly interpreted the parties' intention based on their contemporaneous and subsequent acts. Specifically, the evidence showed that respondents paid the full purchase price for the first lot only after its title was secured in their name, indicating the parties' intent that petitioner should first secure the titles in respondents' names before the remaining balance was paid. On the issue of who is at fault and entitlement to rescission: The Court affirmed the findings of the lower courts that petitioner was not the injured party. The respondents' non-payment of the balance was directly attributable to petitioner's failure to comply with her contractual obligation to secure the titles to the remaining lots in the respondents' names. Since petitioner failed to fulfill her part of the agreement, she could not claim to be the injured party and thus was not entitled to rescind the contract. The Court emphasized that the contract is the law between the parties and its terms must be enforced as long as they are not contrary to law, morals, good customs, or public policy. On the issue of reciprocal obligations and compensation for use: The Court held that petitioner was not entitled to compensation for the use of the subject lots. This was because her own failure to comply with her contractual obligation led to the non-payment of the balance. The Court also noted that petitioner's neglect in asserting a supposed right for over sixteen years warranted the presumption of abandonment of such right, citing the principle that "the law aids the vigilant, not those who slumber on their rights." The dispositive portion of the decision, however, clarified the reciprocal obligations: petitioner must cause the transfer of titles, and respondents must pay the remaining balance within thirty days after such transfer.
Main Doctrine
Where the terms of a contract are clear, the literal meaning shall control; however, if the words appear contrary to the evident intention of the parties, the latter shall prevail, and in determining such intention, contemporaneous and subsequent acts of the parties shall be principally considered. A party who fails to comply with their contractual obligation cannot be considered the injured party entitled to rescind the contract.