Laurencio Ramel vs. Aquino

LAURENCIO C. RAMEL, SOCORRO B. RAMEL and RENE LEMAR B. RAMEL vs.
DANIEL AQUINO
and GUADALUPE ABALAHIN, G.R. No. 133208, JULY 31, 2006
FACTS:
Daniel Aquino is the registered owner of Lot No. 2080 situated in Tanggal, Cordon, Isabela. On October
21, 1975, Aquino mortgaged the property to the Development Bank of the Philippines. In 1983, the
property was in danger of being foreclosed, thus, on August 7, 1983, the respondents offered to sell to
petitioners 8.2030 hectares of the mortgaged property.
The petitioners agreed to purchase the property but the agreement was not reduced into writing.
Petitioners were to buy the land in total sum of P110,700. Petitioners would assume the remaining
mortgage obligation of respondents and the balance of about P25,000 shall be paid to respondents on
installment.
Respondents also sold to petitioners 2,484 square meters of the southern portion of the mortgages
property for P2,700. Petitioners paid the full amount on September 7, 1983. Petitioners were then allowed
by respondents to take possession of the parcels of land and since then, they allegedly introduced
improvements to the property.
On November 18, 1983, petitioners applied for a re-structuring of the mortgage loan with the DBP for a
period of ten years, allegedly with the conformity of respondents. On October 1, 1984, petitioners went to
DBP to pay for the amortization but they found out that respondents had paid the bank P72, 703.06. The
petitioners then filed with the trial court for Specific Performance with Preliminary Injunction and
Damages. On October 12, 1984, the trial court restrained the respondents from withdrawing the certificate
of title and the Release of Mortgage. The bank was also enjoined from releasing the title to respondents.
Respondents spouses alleged that petitioners agreed to pay them P35,000. They further alleged that
petitioners agreed to assume in full the then remaining mortgage loan with DBP. However, petitioners
defaulted to pay the bank within the period agreed upon and re-structured the loan without their consent,
and upon learning this, respondents decided to revoke the sale.
On June 28, 1990, the trial court rendered a decision. Petitioners then appealed to the Court of Appeals
which affirmed the decision of the trial court and denied their Motion for Reconsideration. Hence, this
petition.
ISSUE/S:
(1) Whether or not petitioners substantially breached their obligation warranting the rescission of the
contract.
(2) Whether or not there is legal ground to order the offsetting of the claim of improvements by petitioners
to the claim of fruits derived from the land by respondents.
RULING:
(1)
Yes, on the ground that the petitioners failed to pay the remaining balance of the mortgage obligation of
respondents to the DBP. Instead of petitioners paying the remaining balance on or before December 31,
1983, they asked the DBP to re-structure the payment of the loan for ten years in November 1983. They
did so without the consent of respondents. Their claim to the contrary is not substantiated by evidence.
First, after the respondents learned that petitioners had re-structured the loan, respondents paid the
amount of P72, 703.06 to the DBP. The fact that respondents later on withdrew the amount cannot
operate against them because the trial court had enjoined them from withdrawing the certificate of title.
Second, the subject property was facing foreclosure that December of 1983. It was precisely due to the
impending foreclosure that respondents offered to sell the subject property to petitioners. Though
petitioners were able to subsequently fully settle the mortgage loan in May 1986, the fact remains that
they reneged on their obligation to pay within the agreed period. The petitioners cannot argue that their
breach is merely casual and slight. The breach is substantial as the entire 14.1825 hectare property, not
just the 8.2030 hectares portion thereof sold to petitioners, remained encumbered beyond the agreed
deadline of December 31, 1983, thus restricting the owners’ rights thereto.
(2)
No. The records show that both parties failed to prove their claims through any receipt or document.
The petitioners claim that the offsetting of claims is erroneous citing Articles 546 and 546 of the Civil
Code. Under these provisions, petitioners argue that as possessors in good faith and in the concepts of
an owner, they are entitled to the fruits received before possession was legally interrupted and they must
be reimbursed for their expenses or for the increase in the value of the subject property may have
acquired by reason thereof.
The Supreme Court cannot order an offsetting of the claims as did the trial court and the appellate court.
The evidence show that both parties failed to prove their respective claims. In the absence of evidence
from both parties on their claims, offsetting is improper. The right to offset may exist but the question of
how much is to be offset is factual in nature and needs to be improved by proper evidence.
The order on the offsetting of claims is DELETED for lack of evidence.

Laurencio Ramel vs. Aquino

Uploaded by

Copyright:

Available Formats

Laurencio Ramel vs. Aquino

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Laurencio Ramel vs. Aquino

Uploaded by

Copyright:

Available Formats

LAURENCIO C. RAMEL, SOCORRO B. RAMEL and RENE LEMAR B. RAMEL vs.

The order on the offsetting of claims is DELETED for lack of evidence.

You might also like