Case Digest: STA. LUCIA REALTY & DEVELOPMENT, INC., v. ROMEO UYECIO, AMARIS UYECIO, REYNALDO UYECIO and MANUEL UYECIO

STA. LUCIA REALTY & DEVELOPMENT, INC., v. ROMEO UYECIO, AMARIS UYECIO, REYNALDO UYECIO and MANUEL UYECIO

562 SCRA 226 (2008)

Articles 1191 of the Civil Code does not thus apply to a contract to sell since there can be no rescission of an obligation that is still non-existent, the suspensive condition not having occurred.

Romeo, Amaris, Reynaldo a and Manuel, all surnamed Uyecio (Uyecios), entered into a contract to sell with Sta. Lucia Realty & Development, Inc., (Sta. Lucia Realty) covering seven (7) lots. The sale was premised upon the brochures of the project detailing the improvements and amenities to the unconstructed subdivision. The Uyecios agreed to pay part of down payment of the lots in installment of 10 years at 21% interest per annum. They partially paid amortization until April 2001, despite the fact that the improvements and amenities reflected in the sales brochures were yet to be completed.

The Uyecios filed a complaint against the Sta. Lucia Realty at the Housing and Land Use Regulatory Board (HLURB) compelling the completion of the Sta. Lucia Realty‘s project within six (6) months or refund of their total payments. After the investigation, HLURB ruled in favor of the Uyecios and ordered, among others, the rescission of the Contract to Sell between the parties. The decision of HLURB was affirmed by the Office of the President and by the Court of Appeals.

ISSUES:

Whether or not the Court of Appeals erred in ordering the rescission of the Contract to Sell between the parties

HELD:

In the absence of substantial showing that the findings of facts of administrative bodies charged with their specific field of expertise were arrived at from an erroneous estimation of the evidence presented, they are considered conclusive, and in the interest of stability of the governmental structure, are not to be disturbed.

In the present case, Sta. Lucia has not shown any ground to merit a disturbance of the findings of the HLURB which have been sustained by the OP and the appellate court.

Articles 1191 of the Civil Code does not thus apply to a contract to sell since there can be no rescission of an obligation that is still non-existent, the suspensive condition not having occurred. In other words, the breach contemplated in Article 1191 is the obligor’s failure to comply with an obligation already extant, like a contract of sale, not a failure of a condition to render binding that obligation.

In a contract to sell real property on installments, the full payment of the purchase price is a positive suspensive condition, the failure of which is not considered a breach, casual or serious, but simply an event which prevented the obligation of the vendor to convey title from acquiring any obligatory force. Cancellation, not rescission, of the contract to sell is thus the correct remedy in the premises.