Professional Documents
Culture Documents
VERALDE
VS. AMOR TIERRA DEVELOPMENT CORPORATION and
the HON. COURT OF APPEALS
G.R. No. 112182
December 12, 1994
239 SCRA 127
FACTS:
Bricktown Development Corporation, represented by its President and co-
petitioner Mariano Z. Velarde, executed two Contracts to Sell in favor of Amor Tierra
Development Corporation, represented in these acts by its Vice-President, Moises G.
Petilla, covering a total of 96 residential lots at the Multinational Village Subdivision,
La Huerta, Paraaque, Metro Manila.
Private respondent was only able to pay petitioner corporation the sum of
P1,334,443.21. However, the parties continued to negotiate for a possible modification
of their agreement, but nothing conclusive happened. And on October 12, 1981,
petitioners counsel sent private respondent a Notice of Cancellation of Contract
because of the latters failure to pay the agreed amount.
ISSUE:
1. Whether or not the contract was properly rescinded.
2. Whether or not Bricktown properly forfeited the payments of Amor
Tierra.
RULING:
The contract between Bricktown and Amor Tierra was validly rescinded because
of the failure of the latter to pay the agreed amounts stipulated in the contract on the
proper date even after the sixty-days grace period. Furthermore, the records showed
that private respondent corporation paid less than the amount agreed upon. The
Supreme Court also added that such cancellation must be respected. It may also be
noteworthy to add that in a contract to sell, the non-payment of the purchase price can
prevent the obligation to convey title from acquiring any obligatory force.
On the second issue, the Supreme Court ruled that since the private respondent
did not actually possessed the property under the contract, the petitioner is then ordered
to return to private respondent the amount remitted. However, to adjudge any interest
payment by petitioners on the amount to be thus refunded, private respondent should not
be allowed to totally free itself from its own breach.