G.R. No. 131074 - CENTRAL BANK OF THE PHILIPPINES, VS. SPOUSES ALFONSO AND ANACLETA BICHARA.D E C I S I O N - Supreme Court E-Library

Ruling

WHEREFORE, in view of the foregoing, decision is hereby rendered as follows: The plaintiffs are ordered to accept the deposited amount of P360,500.00 in February 1993 at the Office of the RTC Clerk of Court as full payment for the properties in question, considering that the sum of P45,000.00 expended by defendant in undertaking the filling up of the properties is credited to the original purchase price of P405,500.00; The defendant is ordered to pay the plaintiffs legal interest at the rate of six (6) per cent per annum on the original purchase price of P405,000.00 from September 6, 1983 up to July 13, 1992, when the P45,000.00 was credited to the original purchase price (Exhibit 12-c); The defendant is ordered to pay the plaintiffs legal interest at the rate of six (6) per cent per annum on the remaining amount of P360,500.00 from July 14, 1992 up to February 1993, when said amount was deposited at the Office of the RTC Clerk of Court; And other forms of damages sustained by either plaintiffs or defendant are to be borne or shouldered by the respective party. With costs against defendant. Both parties appealed the decision to the Court of Appeals. Initially, petitioner's appeal was dismissed for failure to file the docket fees, per a Resolution dated August 22, 1994. [17] The dismissal was recalled subsequently upon petitioner's filing of a Manifestation [18] informing the appellate court that it had withdrawn its appeal at the trial court level. Said manifestation was duly noted. [19] On February 28, 1997, the appellate court rendered judgment [20] reversing the decision of the trial court. Instead, it ordered the rescission of the contract of sale and the reconveyance of the properties to respondents. The appellate court likewise ordered respondents to reimburse petitioner the cost of filling up the lot with escombro, and petitioner to pay respondents attorney's fees and costs. The motion for reconsideration filed by petitioner was denied in the assailed Resolution of October 17, 1997. [21] Aggrieved by the ruling, petitioner elevated the matter to us via the instant petition, contending that: I THE COURT OF APPEALS FAILED TO RULE THAT PRIVATE RESPONDENTS DID NOT COMPLY WITH THEIR OBLIGATIONS TO CBP IN GOOD FAITH THUS PRIVATE RESPONDENTS ARE NOT ENTITLED AS A MATTER OF RIGHT TO RESCISSION. II THE COURT OF APPEALS FAILED TO RULE THAT CBP WAS JUSTIFIED IN WITHHOLDING PAYMENT OF THE PURCHASE PRICE OF THE SUBJECT LOT SOLD TO THEM BY PRIVATE RESPONDENTS. III THE COURT OF APPEALS FAILED TO RULE THAT THE TRIAL COURT DID NOT COMMIT A REVERSIBLE ERROR WHEN IT ORDERED SPECIFIC PERFORMANCE INSTEAD OF RESCISSION. [22] The right to rescind a contract involving reciprocal obligations is provided for in Article 1191 of the Civil Code, which states: 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 o