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    Paguyo Digest

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    reylaxa
    Spouses Domingo and Lourdes Paguyo owned a building in Makati City and entered into an agreement with Pierre Astorga and St. Andrew Realty to sell the building in order to raise funds to purchase the land on which it stood. However, the Paguyos failed to acquire the land despite being fully funded. Astorga and St. Andrew Realty subsequently paid additional funds and registered the building under their name. The Paguyos later sued to rescind the sale agreement, but both the trial court and appellate court ruled in favor of Astorga and St. Andrew Realty, finding that the Paguyos did not prove any grounds to invalidate the sale contract. The Supreme Court affirmed

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    Paguyo Digest

    Uploaded by

    reylaxa
    207 views2 pages
    Spouses Domingo and Lourdes Paguyo owned a building in Makati City and entered into an agreement with Pierre Astorga and St. Andrew Realty to sell the building in order to raise funds to purchase the land on which it stood. However, the Paguyos failed to acquire the land despite being fully funded. Astorga and St. Andrew Realty subsequently paid additional funds and registered the building under their name. The Paguyos later sued to rescind the sale agreement, but both the trial court and appellate court ruled in favor of Astorga and St. Andrew Realty, finding that the Paguyos did not prove any grounds to invalidate the sale contract. The Supreme Court affirmed

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    Spouses Domingo and Lourdes Paguyo owned a building in Makati City and entered into an agreement with Pierre Astorga and St. Andrew Realty to sell the building in order to raise funds to purchase the land on which it stood. However, the Paguyos failed to acquire the land despite being fully funded. Astorga and St. Andrew Realty subsequently paid additional funds and registered the building under their name. The Paguyos later sued to rescind the sale agreement, but both the trial court and appellate court ruled in favor of Astorga and St. Andrew Realty, finding that the Paguyos did not prove any grounds to invalidate the sale contract. The Supreme Court affirmed

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    207 views2 pages

    Paguyo Digest

    Uploaded by

    reylaxa
    Spouses Domingo and Lourdes Paguyo owned a building in Makati City and entered into an agreement with Pierre Astorga and St. Andrew Realty to sell the building in order to raise funds to purchase the land on which it stood. However, the Paguyos failed to acquire the land despite being fully funded. Astorga and St. Andrew Realty subsequently paid additional funds and registered the building under their name. The Paguyos later sued to rescind the sale agreement, but both the trial court and appellate court ruled in favor of Astorga and St. Andrew Realty, finding that the Paguyos did not prove any grounds to invalidate the sale contract. The Supreme Court affirmed

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    of 2

    SPOUSES DOMINGO and LOURDES PAGUYO versus Pierre Astorga and St.

    Andrew
    Realty, Inc.G.R. No. 130982 2005 September 16FACTS:
    Spouses Domingo Paguyo and Lourdes Paguyo, were the owners of a small five-storey
    building known as the Paguyo Building located at Makati Avenue, corner Valdez Street, Makati
    City. The lot on which the Paguyo Building stands was the subject of Civil Case wherein the
    RTC of Makati City, Branch 57,rendered a decision on 20 January 1988 approving a
    Compromise Agreement made between the Armases andthe petitioners. The compromise
    agreement provided that in consideration of the total sum o (P1,700,000.00), the Armases will
    execute in favor of petitioners a deed of sale and/or conveyance assigning and transferring unto
    said petitioners all their rights and interests over the 299 square-meter parcel of lant. In order for
    the petitioners to complete their title and ownership over the lot in question, there was an urgent
    need
    to
    make
    complete
    payment
    to
    the
    Armases, which at that time stood at P917,470.00 considering that petitioners had previously ma
    de partial payments to the Armases.On 29 November 1988, in order to raise the much needed
    amount, petitioner Lourdes Paguyo entered into an agreement captioned as Receipt of Earnest
    Money with respondent Pierre Astorga, for the sale of the formers property consisting of the lot
    which was to be purchased from the Armases, together with the improvements thereon,
    particularly, the existing building known as the Paguyo Building. However, contrary to their
    express representation with respect to the subject lot, petitioners failed to comply with their
    obligation to acquire the lot from the Armas family despite the full financial support of
    respondents. Nevertheless, the parties maintained their business relationship under the terms and
    conditions of the above-mentioned Receipt of Earnest Money.On 12 December 1988, petitioners
    asked for and were given by respondents an additional P50,000.00 to meet the formers urgent
    need for money in connection with their construction business. Thus, on 5 January 1989,
    the parties executed the four documents in question namely, the Deed of Absolute Sale
    of thePaguyo Building, the Mutual Undertaking, the Deed of Real Estate Mortgage, and the
    Deed of Assignment of Rights and Interest. Simultaneously with the signing of the four
    documents, respondents paid petitioners theadditional amount of P500,000.00. Thereafter, the
    respondents renamed the Paguyo Building into GINZABldg. and registered the same in the name
    of respondent St. Andrew Realty, Inc. at the Makati Assessors Office after paying accrued real
    estate taxes in the total amount of P169,174.95.On 06 October 1989, petitioners filed a
    Complaint for the rescission of the Receipt of Earnest Money with the undertaking to return
    the sum of P763,890.50. They also sought the rescission of the Deed of RealEstate Mortgage, the
    Mutual Undertaking, the Deed of Absolute Sale of Building, and the Deed of Assignment of
    Rights and Interest. After trial, the RTC ruled in favor of respondents. The petition for
    preliminary injunction is denied, and thecourt ordered the plaintiff spouses Domingo and
    Lourdes Paguyo to pay the defendants Pierre Astorga and St. Andrew Realty, Inc. on their
    counterclaim. On appeal, the Court of Appeals affirmed the decision of thetrial court
    ISSUE:
    Did the Court of Appeals err in upholding the trial courts decision denying petitioners
    complaint for rescission?
    RULING:

    No. The right to rescind a contract involving reciprocal obligations is provided for in Article
    1191 of the Civil Code. Article 1191 states: The power to rescind obligations is implied in
    reciprocal ones, in case oneof the obligors should not comply with what is incumbent upon him.
    The injured party may choose between the 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 court shall decree the rescission claimed,
    unless there be just cause authorizing the fixing of a period. Moreover, Articles 1355 and 1470
    of the Civil Code state: Art. 1355. Except in cases specified by law, lesion or inadequacy of
    cause shall not invalidate a contract, unless there has been fraud, mistake or undue influence.
    Art. 1470. Gross inadequacy of price does not affect a contract of sale, except as may indicate a
    defect in the consent, or that the parties really intended a donation or some other act or contract.
    Petitioners failed to prove any of the instances mentioned in Articles 1355 and 1470 of the Civil
    Code, which would invalidate, or even affect, the Deed of Sale of the Building and the related
    documents. Indeed, there is no requirement that the price be equal to the exact value of the
    subject matter of sale. In sum, petitioners pray for rescission of the Deed of Sale of the building
    and offer to repay the purchase price after their liquidity position would have improved and after
    respondents would have refurbished the building, updated the real property taxes, and turned
    the building into a profitable business venture. The court stated however that, it will not
    allow itself to be an instrument to the dissolution of contract validly entered into, for a party
    should
    not, after its opportunity to enjoy the benefits of an agreement, be allowed to later disown the
    arrangement when the terms thereof ultimately would prove to operate against its hopeful
    expectations. WHEREFORE, the Decision of the Court of Appeals is AFFIRMED with
    MODIFICATION.

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