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    36 Velarde Vs CA

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    Erwin Bernardino
    The Velardes (petitioners) purchased a house and lot from the Raymundos (private respondents) through a deed of sale with assumption of mortgage. The Velardes failed to pay the mortgage after their application for assumption was denied. They also imposed new preconditions before paying the balance, breaching the contract. The Raymundos rescinded the contract due to the breach. The Court ruled that (1) the Velardes substantially breached the contract, and (2) rescission was justified based on the failure to comply with obligations under the contract.

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    36 Velarde Vs CA

    Uploaded by

    Erwin Bernardino
    1K views1 page
    The Velardes (petitioners) purchased a house and lot from the Raymundos (private respondents) through a deed of sale with assumption of mortgage. The Velardes failed to pay the mortgage after their application for assumption was denied. They also imposed new preconditions before paying the balance, breaching the contract. The Raymundos rescinded the contract due to the breach. The Court ruled that (1) the Velardes substantially breached the contract, and (2) rescission was justified based on the failure to comply with obligations under the contract.

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    36 Velarde vs CA

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    The Velardes (petitioners) purchased a house and lot from the Raymundos (private respondents) through a deed of sale with assumption of mortgage. The Velardes failed to pay the mortgage after their application for assumption was denied. They also imposed new preconditions before paying the balance, breaching the contract. The Raymundos rescinded the contract due to the breach. The Court ruled that (1) the Velardes substantially breached the contract, and (2) rescission was justified based on the failure to comply with obligations under the contract.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    1K views1 page

    36 Velarde Vs CA

    Uploaded by

    Erwin Bernardino
    The Velardes (petitioners) purchased a house and lot from the Raymundos (private respondents) through a deed of sale with assumption of mortgage. The Velardes failed to pay the mortgage after their application for assumption was denied. They also imposed new preconditions before paying the balance, breaching the contract. The Raymundos rescinded the contract due to the breach. The Court ruled that (1) the Velardes substantially breached the contract, and (2) rescission was justified based on the failure to comply with obligations under the contract.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 1

    Spouses MARIANO Z. VELARDE and AVELINA D. VELARDE vs.

    CA, DAVID A. RAYMUNDO and GEORGE RAYMUNDO,


    G.R. No. 108346
    July 11, 2001
    PANGANIBAN, J.:

    Legal Doctrine: CONCEPT OF BREACH OF OBLIGATION

    FACTS:
     Private Respondent David Raymundo, the registered owner of a house and lot located at Makati city, and George
    Raymundo, David’s father, executed a Deed of Sale with Assumption of Mortgage with Mariano and Avelina
    Velarde (herein petitioners).

     Pursuant to said agreements, The subject property, mortgaged to BPI for the amount of P1,800,000.00, was
    conveyed to the Velardos for the amount of P800,000. Velardos undertake to assume the payment of the aforesaid
    mortgage and upon violation in any of the terms, the downpayment of P800k shall be forfeited in favor of David
    Raymundo whom shall resume total and complete ownership and possession of the property sold.

     Velardos paid the bank (BPI) for three (3) months until they were advised that the Application for Assumption of
    Mortgage was denied. This prompted them not to make any further payment.

     Raymundos wrote the petitioners informing the non-fulfillment of the obligations. Velardo, thru counsel responded
    that they are willing to pay in cash the balance subject to several conditions. Raymundos sent a notarial notice of
    cancellation/rescission of the Deed of Sale. Velardos filed a complaint before RTC of Makati Br. 149

     RTC: Velardos were directed to proceed with the sale and to pay the balance of P1.8M to Raymundos whom were
    ordered to execute a deed of absolute sale, surrendering the property to Velardo. Raymundo appealed to CA.

     CA: Set aside RTC’s Decision. Contract was properly rescinded. Rescission was justified upon Velarde’s failure to
    pay the agreed price.

    ISSUES:
    1. W O N t h e r e i s a s u b s t a n t i a l b r e a c h o f c o n t r a c t .
    2. W ON rescission of the contract by Private Resp is justified.

    RULING:

    1. Yes. There is a substantial breach of contract. Velardo not only failed to pay the P1.8 million balance, but
    they also imposed upon Raymundo new obligations as preconditions to the performance of their own obligation. In
    effect, the qualified offer to pay was a repudiation of an existing obligation, which was legally due and demandable
    under the contract of sale. Hence, private respondents were left with the legal option of seeking rescission to
    protect their own interest.

    2. Yes Rescission of the contract is justified. Article 1191 of the Civil Code, provides:

    "Art. 1191. -- The power to rescind obligations is implied in reciprocal ones, in case one of the obligors
    should not comply with what is incumbent upon him.

    The injured party may choose between fulfillment and the rescission of the obligation, with the payment of
    damages in either case. He may also seek rescission even after he has chosen fulfillment, if the latter
    should become impossible."

    The right of rescission of a party to an obligation under Article 1191 of the Civil Code is predicated on a breach of
    faith by the other party who violates the reciprocity between them. When the obligor cannot comply with what is
    incumbent upon it, the obligee may seek rescission and, in the absence of any just cause for the court to determine
    the period of compliance, the court shall decree the rescission.

    In the present case, private respondents validly exercised their right to rescind the contract, because of the failure
    of petitioners to comply with their obligation to pay the balance of the purchase price. Petitioners violated the very
    essence of reciprocity in the contract of sale, a violation that consequently gave rise to private respondent's right to
    rescind the same in accordance with law.

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