Pascual v. Pangyarihan-Ang et. Al G.R. No. 235711 11 March 2020 Peralta, C.J.:

Pascual v. Pangyarihan-Ang et. Al

G.R. No. 235711

11 March 2020

Peralta, C.J.:

First Division

 

Nature of the Action:

This a petition for review on certiorari assailing the Court of Appeals’ Decision and Resolution which affirmed the Regional Trial Court’s Decision.

Facts:

Romulo Pascual entered into a sale transaction with Encarnacion P. Ang involving three parcels of land located in Navotas City. The said transaction was embodied in a document denominated as “Pagpapatunay at Pananagutan.

The lot referred to in paragraph 1(a) of the "Pagpapatunay at Pananagutan" was registered in respondents' names under Original Certificate of Title No. 246. As to the two remaining lots, which were referred in paragraphs 1(b) and 1(k), petitioner claimed that the same were already surveyed and titles thereto were already issued under the name of her husband Romulo Pascual, and that respondents failed to pay in full their purchase price.

This prompted the petitioner to file a complaint for rescission of the aforementioned document before the Regional Trial Court. The petitioner alleges that the purchase price should be increased, considering the price of the subject properties are no longer the same, and also taking into consideration the depreciation of the Philippine peso from the time of the execution of the contract in 1989 up to present. On the other hand, the Respondent argues that it is the Petitioner who breached their agreement as she intentionally refused to register the two lots under their name because she is asking for a much higher price, different from what was originally agreed upon.

Accordingly, the RTC rendered judgment in favor of the Respondent. On appeal, the Court of Appeals, it denied the petitioner’s appeal and affirmed the RTC’s ruling. It also held that respondents' non-payment of the balance of the purchase price is due to the failure of petitioner to comply with their obligation in the contract. Thus, petitioner is not entitled to rescind the contract as she is not the injured party. Petitioner then moved for reconsideration but the same was denied.

Hence, the present case.

Issue:

Whether the petitioner was at fault and therefore not the injured party such that would justify the rescission of the subject contract.

Ruling:

The petition must still fail.

Articles 1370 and 1371 of the New Civil Code provide:

Article 1370. If the terms of a contract are clear and leave no doubt upon the intention of the contracting parties, the literal meaning of its stipulations shall control.

If the words appear to be contrary to the evident intention of the parties, the latter shall prevail over the former.

Article 1371. In order to judge the intention of the contracting parties, their contemporaneous and subsequent acts shall be principally considered. 

In Abad v. Goldloop Properties, Inc., this Court held that:

[t]he cardinal rule in the interpretation of contracts is embodied in the first paragraph of Article 1370 of the Civil Code: "[i]f the terms of a contract are clear and leave no doubt upon the intention of the contracting parties, the literal meaning of its stipulations shall control." This provision is akin to the "plain meaning rule" applied by Pennsylvania courts, which assumes that the intent of the parties to an instrument is "embodied in the writing itself, and when the words are clear and unambiguous the intent is to be discovered only from the express language of the agreement." It also resembles the "four corners" rule, a principle which allows courts in some cases to search beneath the semantic surface for clues to meaning. A court's purpose in examining a contract is to interpret the intent of the contracting parties, as objectively manifested by them. The process of interpreting a contract requires the court to make a preliminary inquiry as to whether the contract before it is ambiguous. A contract provision is ambiguous if it is susceptible of two reasonable alternative interpretations. Where the written terms of the contract are not ambiguous and can only be read one way, the court will interpret the contract as a matter of law. If the contract is determined to be ambiguous, then the interpretation of the contract is left to the court, to resolve the ambiguity in the light of the intrinsic evidence.

As aptly ruled by the RTC, while the provision in paragraph 5 of the "Pagpapatunay at Pananagutan" is ambiguous, as it can be interpreted in two ways, that is, the titles mentioned in the said provision is either in the name of Romulo Pascual and/or plaintiff, or in defendants' names, the evidence on records would show that the intention of the parties in the said paragraph 5 is that petitioner should secure first the titles of the subject properties in respondents' names before they pay the remaining balance of the purchase price of the subject properties.

It should be recalled that petitioner testified that respondents paid P50,000.00 as downpayment for the three lots, and respondents made several payments thereafter on installment basis. It was only after petitioner secured the OCT of the subject first lot under respondents' name that respondents paid her its full purchase price. Thus, it is clear that paragraph 5 of the "Pagpapatunay at Pananagutan" should be interpreted according to what transpired on the payment and registration of the first lot.

Resultantly, respondents' non-payment of the balance of the purchase price is due to the failure of petitioner to comply with their obligation in the contract. Thus, petitioner is not entitled to rescind the contract as she is not the injured party.

Finally, petitioner is not entitled to the compensation for the use of the subject lots. To repeat, it was petitioner who failed to comply with their obligation in the contract that resulted to the non-payment of the balance of the purchase price. Thus, petitioner cannot benefit from her own wrongdoing. Also, petitioner's neglect or omission to assert a supposed right for more than sixteen (16) years is too long a time as to warrant the presumption that they had abandoned such right. The law aids the vigilant, not those who slumber on their rights. Vigilantibus, sed non dormientibus jura subverniunt.