DAVID REYES (Substituted by Victoria R. Fabella), vs.
The complaint further alleged that Lim connived with
JOSE LIM, CHUY CHENG KENG and HARRISON LUMBER,
INC.
11 August 2003
GR no. 134241 PONENTE: CARPIO, J.
ARTICLES: Art. 9 Civil Code, Article 1385 of the Civil Code
RULINGS: (higher court to lower court to so pwede ka
magread from below to top hehe sorry!)
 This petition was DISSMISSED and AFFIRMED
the DECISION of CA
 Petitioner filed a review on certiorari upon the
dismissal of the petition for certiorari on the CA
 The Court of Appeals dismissed the petition for
certiorari assailing the orders of the RTC.
 Reyes filed a petition for Certiorari for CA
 CA denied the motion filed by Reyes
 Reyes filed a Motion to Set Aside the Order
 RTC GRANTED Lim the cancellation to sell and
ORDERED Reyes to deposit 10M down payment
 Lim sought the cancellation of the contract to
sell and requested in open court that Reyes be
ordered to deposit the ten million down
payment with the trial court
 Petitioner Reyes led a complaint for annulment
of contract and damages against respondents
alleging that petitioner as seller and respondent
Lim as buyer entered into a contract to sell a
parcel of land.
FACTS:
On 23 March 1995, petitioner Reyes filed before the
trial court a complaint for annulment of contract and
damages against respondents Jose Lim, Chuy Cheng
Keng and Harrison Lumber, Inc. The complaint 3
alleged that on 7 November 1994, Reyes as seller and
Lim as buyer entered into a contract to sell a parcel of
land located along F.B. Harrison Street, Pasay City.
Harrison Lumber occupied the Property as lessee with
a monthly rental of P35,000.
The complaint claimed that Reyes had informed
Harrison Lumber to vacate the Property before the end
of January 1995.
Reyes also informed Keng and Lumber that if they failed
to vacate by 8 March 1995, he would hold them liable
for the penalty of 400k pesos a month as provided in
the Contract to Sell.
Lumber not to vacate the Property until the 400k pesos
monthly penalty would have accumulated and equaled
the unpaid purchase price of P18M.
Keng and Lumber filed their Answer denying they
connived with Lim to defraud Reyes. Keng and Harrison
Lumber alleged that Reyes approved their request for
an extension of time to vacate the Property due to their
difficulty in finding a new location for their business.
Harrison Lumber claimed that as of March 1995, it had
already started transferring some of its merchandise to
its new business location in Malabon.
On 31 May 1995, Lim filed his Answer stating that he
was ready and willing to pay the balance of the
purchase price on or before 8 March 1995. Lim
requested a meeting regarding the signing of the Deed
of Absolute Sale and the payment of the balance but
Reyes kept postponing their meeting.
On 9 March 1995, Reyes offered to return the P10M
down payment to Lim because Reyes was having
problems in removing the lessee from the Property.
Lim rejected Reyes' offer and proceeded to verify the
status of Reyes' title to the Property.
Lim learned that Reyes had already sold the Property
to Line One Foods Corporation ("Line One") on March
1995 for P16,782,840.
After the registration of the Deed of Absolute Sale, the
Register of Deeds issued to Line One TCT No. 134767
covering the Property. Lim denied conniving with Keng
and Harrison Lumber to defraud Reyes.
On 2 November 1995, Reyes filed a Motion for Leave to
File Amended Complaint due to supervening facts.
These included the filing by Lim of a complaint for
estafa against Reyes as well as an action for specific
performance and nullification of sale and title plus
damages before another trial court.
The trial court granted the motion in an Order
In his Amended Answer Lim prayed for the cancellation
of the Contract to Sell and for the issuance of a writ of
preliminary attachment against Reyes.
The trial court denied the prayer for a writ of
preliminary attachment in an Order
On 6 March 1997, Lim requested in open court that
Reyes be ordered to deposit the P10M down payment
with the cashier of the Regional Trial Court of
Parañaque.
The trial court granted this motion.
Reyes filed a Motion to Set Aside the Order on the
ground the Order practically granted the reliefs Lim
prayed for in his Amended Answer.
The trial court denied Reyes' motion in an Order Citing
Article 1385 of the Civil Code.
the trial court ruled that an action for rescission could
prosper only if the party demanding rescission can
return whatever he may be obliged to restore should
the court grant the rescission.
The trial court denied Reyes' Motion for
Reconsideration in its Order.
In the same order, the trial court directed Reyes to
deposit the P10 million down payment with the Clerk
of Court.
On 8 December 1997, Reyes filed a Petition for
Certiorari with the Court of Appeals.
Reyes prayed that the Orders of the trial court be set
aside for having been issued with grave abuse of
discretion amounting to lack of jurisdiction. On 12
May 1998, the Court of Appeals dismissed the petition
for lack of merit.
leading to the present case a review on certiorari upon
the dismissal of the petition for certiorari on the CA
petitioner was claiming that the court erred in the
Court of Appeals failing to find if the trial court could
issue the questioned Orders on grounds of equity
when there is an applicable law on the matter, that is,
Rules 57 to 61 of the 1997 Rules on Civil Procedure
There is also no plausible or justifiable reason for
Reyes to object to the deposit of the P10 million down
payment in court.
The Contract to Sell can no longer be enforced because
Reyes himself subsequently sold the Property to Line
One. In addition both respondents are now seeking
rescission of the Contract to Sell.
Thus, this petition was dismissed due to lack of merit
and AFFRIMED THE DECISION of the CA
ISSUE:
WON- the trial court (upon its jurisdiction) may validly
order the deposit of the P10 million down payment in
court.
DISPOSITION:
WHEREFORE, we AFFIRM the Decision of the Court of
Appeals.
NOTE:
The Contract to Sell provided for the following terms
and conditions:
1. The total consideration for the purchase of the
aforedescribed parcel of land together with the
perimeter walls found therein is 28M PESOS
payable as follows:
(a) 10M PESOS upon signing of this Contract to Sell;
(b) The balance of 18M PESOS shall be paid on or before
March 8, 1995 at 9:30 A.M. at a bank to be designated
by the Buyer but upon the complete vacation of all the
tenants or occupants of the property and execution of
the Deed of Absolute Sale. However, if the tenants or
occupants have vacated the premises earlier than
March 8, 1995, the VENDOR shall give the VENDEE at
least 1 week advance notice for the payment of the
balance and execution of the Deed of Absolute Sale.
2. That in the event, the tenants or occupants of the
premises subject of this sale shall not vacate the
premises on March 8, 1995 as stated above, the
VENDEE shall withhold the payment of the balance of
18M pesos and the VENDOR agrees to pay a penalty of
Four percent (4%) per month to the herein VENDEE
based on the amount of the down payment of 10M
PESOS until the complete vacation of the premises by
the tenants therein.