Calilap-Asmeron v. Development Bank

G.R. No. 157330 (November 23, 2011)

SC upheld DBP's cancellation of Lina Calilap-Asmeron's sale, confirming no misleading in the agreement.

Facts:

The case involves a dispute between Lina Calilap-Asmeron (petitioner) and the Development Bank of the Philippines (DBP) regarding a deed of conditional sale of two parcels of land that were previously mortgaged to DBP. The petitioner and her brother constituted a real estate mortgage over the properties to secure a loan from DBP. After the loan obligation was not fulfilled, DBP foreclosed the mortgage and sold the properties to itself as the highest bidder. The one-year redemption period expired on September 1, 1981.

In August 1982, the petitioner sought to repurchase the property covered by Transfer Certificate of Title (TCT) No. 164117, offering a downpayment of P15,000. However, DBP rejected this offer, insisting on the full purchase price of P55,500 within ten days. The petitioner later negotiated a deed of conditional sale for both properties for a total of P157,000, believing that paying two amortizations on the other lot would lead to the release of the first lot. Despite making payments totaling P40,000, DBP refused to release the property under TCT No. 164117 and eventually rescinded the deed of conditional sale on August 7, 1985, due to non-payment of amortizations.

Subsequently, DBP sold the property covered by TCT No. 164117 to Pablo Cruz, who later sold it to Emerenciana Cabantog and Eni S.P. Atienza. The petitioner filed a complaint to annul the sale to Cruz and the subsequent sales, claiming she had been misled into signing the deed of conditional sale.

Legal Issues:

  1. Whether the rescission of the deed of conditional sale by DBP was valid.
  2. Whether the petitioner had a preferential right to repurchase the property.
  3. Whether the sales made by DBP to Cruz and subsequently to Cabantog and Atienza were valid despite the pending complaint of the petitioner.

Arguments:

Petitioner’s Arguments:

  • The petitioner contended that she had been misled into signing the deed of conditional sale and that she had paid a substantial amount (approximately two-thirds of the total price) which should prevent rescission.
  • She argued that her non-payment of the amortizations constituted only a slight breach, and thus DBP should not have rescinded the contract.
  • The petitioner claimed that the sales to Cruz and the subsequent buyers were made in bad faith, given her pending complaint.

Respondents’ Arguments:

  • DBP maintained that the petitioner had intended to repurchase both properties and that her communications with the bank supported this claim.
  • DBP argued that the rescission was valid under the terms of the deed of conditional sale due to the petitioner’s failure to pay the required amortizations.
  • The respondents contended that the petitioner had not provided sufficient evidence to support her claims of being misled or of bad faith on their part.

Court’s Decision and Legal Reasoning:

The Regional Trial Court (RTC) dismissed the petitioner’s complaint, finding that her communications indicated an intention to repurchase both properties. The Court of Appeals (CA) affirmed this decision, ruling that the rescission by DBP was valid as the petitioner had failed to comply with the payment terms stipulated in the deed of conditional sale. The CA noted that the petitioner did not present sufficient evidence to support her claims of being misled and that her non-payment constituted a breach that justified rescission.

The Supreme Court upheld the CA's ruling, emphasizing that the appeal raised factual issues, which are not within the scope of review under Rule 45 of the Rules of Court. The Court reiterated that the findings of fact by the CA are conclusive and binding. It also ruled that the petitioner had not established her claims of misunderstanding the contract terms, as she was educated and had previously expressed her understanding of the deed.

The Court further clarified that DBP validly exercised its right to rescind the deed of conditional sale due to the petitioner’s default in payment, and that the stipulations in the contract allowed for such rescission without court intervention.

Significant Legal Principles Established:

  • The validity of rescission of a contract based on non-payment of obligations as stipulated in the contract.
  • The importance of clear communication and documentation in establishing the intentions of parties in contractual agreements.
  • The principle that appeals to the Supreme Court under Rule 45 are limited to questions of law, and factual determinations made by lower courts are generally conclusive.