G.R. No. 172733 - SPS. CORNELIO JOEL I. ORDEN AND MARIA NYMPHA V. ORDEN, AND REGISTER OF DEEDS OF NEGROS ORIENTAL, VS. SPS. ARTURO AUREA AND MELODIA C. AUREA, SPS. ERNESTO P. COBILE AND SUSANA M. COBILE, AND FRANKLIN M. QUIJANO. D E C I S I O N - Supreme Court E-Library

Ruling

ACCORDINGLY, from the foregoing disquisition, judgment is hereby rendered ordering the defendants: (1) to return to plaintiffs, spouses Ernesto Cobile and Susana M. Cobile the amount of SEVEN HUNDRED THIRTY EIGHT THOUSAND FIVE HUNDRED NINETY-SIX PESOS and TWENTY-EIGHT CENTAVOS (P738,596.28) representing the total amount advanced by the plaintiffs to defendants; and (2) to pay plaintiffs interest of the aforecited amount at the rate of Twenty (20%) percent per annum from the filing of the complaint until fully paid. [22] The trial court found that petitioners Orden and respondents Cobile entered into a contract of sale. The contract, it explained, was subject to the conditions laid down in the promissory note - that respondents Cobile would pay the amount of P566,000.00 on or before 31 October 1994, and the petitioners Ordens would undertake the transfer of the titles to the properties in the names of respondents Cobile, after which the latter would pay the remaining balance of P950,000.00. It said that this was an example of reciprocal obligations. Since respondents Cobile already violated the terms of the promissory note when they failed to pay the total amount of P566,000.00 on the agreed date, petitioners Orden should have filed for rescission. This, the trial court said, petitioner Orden failed to do. The letter that petitioners Orden sent to respondents Cobile -- informing them that should they fail to comply with the terms and conditions of the promissory note, petitioners Orden would be constrained to sell the properties to other interested persons -- was not the rescission envisaged by law. The rescission made by petitioners Orden was thus open to contest. The trial court likewise ruled that the properties subject matter of the case could not be given to respondents Cobile because the ownership thereof had passed to Fortunata Adalim-Houthuijzen whom it regarded as an innocent purchaser for value. Furthermore, the trial court declared that respondents Cobile could not demand specific performance or rescission of contract, for they themselves failed to comply with the terms and conditions set forth in the promissory note when they failed to pay the entire balance of one-half (P950,000.00) of the total price agreed upon. The trial court ruled that it could not in conscience grant respondents Cobile's prayer that should petitioners Orden fail to deliver the titles in respondents Cobile's names, the Ordens be ordered to pay the Cobiles the entire purchase price plus 20% interest per annum. It likewise said that neither could petitioners Orden forfeit the P738,596.28 paid by respondents because they had not rescinded the contract of sale between them either judicially or by notarial act. On 23 May 2002, petitioners Orden filed a Notice of Appeal. [23] On 20 April 2006, the Court of Appeals rendered its Decision [24] affirming in toto the decision of the trial court. The dispositive portion of the decision reads: WHEREFORE , in view of the foreg