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G.R. No. 97347 July 6, 1999

JAIME G. ONG, petitioner,

vs.

THE HONORABLE COURT OF APPEALS, SPOUSES MIGUEL K. ROBLES and ALEJANDRO M.

ROBLES,respondents.

YNARES-SANTIAGO, J.:

Before us is a petition for review on certiorari from the judgment rendered by the Court of Appeals

which, except as to the award of exemplary damages, affirmed the decision of the Regional Trial

Court of Lucena City, Branch 60, setting aside the "Agreement of Purchase and Sale" entered into

by herein petitioner and private respondent spouses in Civil Case No. 85-85.1âwphi1.nêt

On May 10, 1983, petitioner Jaime Ong, on the one hand, and respondent spouses Miguel K.

Robles and Alejandra Robles, on the other hand, executed an "Agreement of Purchase and Sale"

respecting two parcels of land situated at Barrio Puri, San Antonio, Quezon. The terms and

conditions of the contract read:"

1. That for and in consideration of the agreed purchase price of TWO MILLION

PESOS (P2,000,000.00), Philippine currency, the mode and manner of payment is

as follows:

A. The initial payment of SIX HUNDRED THOUSAND PESOS

(P600,000.00) as verbally agreed by the parties, shall be broken

down as follows:

1. P103,499.91 shall be paid, and as already paid by

the BUYER to theSELLERS on March 22, 1983, as

stipulated under the Certification of undertaking dated

March 22, 1983 and covered by a check of even date.

2. That the sum of P496,500.09 shall be paid directly

by the BUYER to the Bank of Philippine Islands to

answer for the loan of the SELLERS which as of

March 15, 1983 amounted to P537,310.10, and for

the interest that may accrued (sic) from March 15,

1983, up to the time said obligation of

theSELLERS with the said bank has been settled,

provided however that the amount in excess of

P496,500.09, shall be chargeable from the time

deposit of the SELLERS with the aforesaid bank.

B. That the balance of ONE MILLION FOUR HUNDRED THOUSAND

(P1,400,000.00) PESOS shall be paid by the BUYER to

the SELLERS in four (4) equal quarterly installments of THREE

HUNDRED FIFTY THOUSAND PESOS (P350,000.00), the first to be

due and payable on June 15, 1983, and every quarter thereafter, until

the whole amount is fully paid, by these presents promise to sell to

said BUYER the two (2) parcels of agricultural land including the rice

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mill and the piggery which are the most notable improvements

thereon, situated at Barangay Puri, San Antonio Quezon, . . .

2. That upon the payment of the total purchase price by

the BUYER the SELLERS bind themselves to deliver to the former a good and

sufficient deed of sale and conveyance for the described two (2) parcels of land, free

and clear from all liens and encumbrances.

3. That immediately upon the execution of this document, the SELLERS shall deliver,

surrender and transfer possession of the said parcels of land including all the

improvements that may be found thereon, to the BUYER, and the latter shall take

over from the SELLER the possession, operation, control and management of the

RICEMILL and PIGGERY found on the aforesaid parcels of land.

4. That all payments due and payable under this contract shall be effected in the

residence of theSELLERS located at Barangay Puri, San Antonio, Quezon unless

another place shall have been subsequently designated by both parties in writing.

xxx xxx xxx

On May 15, 1983, petitioner Ong took possession of the subject parcels of land together with the

piggery, building, ricemill, residential house and other improvements thereon.

Pursuant to the contract they executed, petitioner paid respondent spouses the sum of

P103,499.91

by depositing it with the United Coconut Planters Bank. Subsequently, petitioner

deposited sums of money with the Bank of Philippine Islands (BPI),

in accordance with their stipulation

that petitioner pay the loan of respondents with BPI.

To answer for his balance of P1,400,000.00 petitioner issued four (4) post-dated Metro Bank checks

payable to respondent spouses in the amount of P350,0000.00 each, namely: Check No. 157708

dated June 15, 1983,

Check No. 157709 dated September 15, 1983,

Check No. 157710 dated

December 15, 1983

and Check No. 157711 dated March 15, 1984.

When presented for payment,

however, the checks were dishonored due to insufficient funds. Petitioner promised to replace the checks

but failed to do so. To make matters worse, out of the P496,500.00 loan of respondent spouses with the

Bank of the Philippine Islands, which petitioner, as per agreement, should have paid, petitioner only

managed to dole out no more than P393,679.60. When the bank threatened to foreclose the respondent

spouses' mortgage, they sold three transformers of the rice mill worth P51,411.00 to pay off their

outstanding obligation with said bank, with the knowledge and conformity of petitioner.

Petitioner, in

return, voluntarily gave the spouses authority to operate the rice mill.

He, however, continued to be in

possession of the two parcels of land while private respondents were forced to use the rice mill for

residential purposes.

On August 2, 1985, respondent spouses, through counsel, sent petitioner a demand letter asking for

the return of the properties. Their demand was left unheeded, so, on September 2, 1985, they filed

with the Regional Trial Court of Lucena City, Branch 60, a complaint for rescission of contract and

recovery of properties with damages. Later, while the case was still pending with the trial court,

petitioner introduced major improvements on the subject properties by constructing a complete fence

made of hollow blocks and expanding the piggery. These prompted the respondent spouses to ask

for a writ of preliminary injunction.

The trial court granted the application and enjoined petitioner from

introducing improvements on the properties except for repairs.

On June 1, 1989 the trial court rendered a decision, the dispositive portion of which reads as follows:

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G.R. No. 97347 July 6, 1999 JAIME G. ONG, petitioner, vs. THE HONORABLE COURT OF APPEALS, SPOUSES MIGUEL K. ROBLES and ALEJANDRO M. ROBLES,respondents. YNARES-SANTIAGO, J.: Before us is a petition for review on certiorari from the judgment rendered by the Court of Appeals which, except as to the award of exemplary damages, affirmed the decision of the Regional Trial Court of Lucena City, Branch 60, setting aside the "Agreement of Purchase and Sale" entered into by herein petitioner and private respondent spouses in Civil Case No. 85-85.1âwphi1.nêt On May 10, 1983, petitioner Jaime Ong, on the one hand, and respondent spouses Miguel K. Robles and Alejandra Robles, on the other hand, executed an "Agreement of Purchase and Sale" respecting two parcels of land situated at Barrio Puri, San Antonio, Quezon. The terms and conditions of the contract read:" 1. That for and in consideration of the agreed purchase price of TWO MILLION PESOS (P2,000,000.00), Philippine currency, the mode and manner of payment is as follows: A. The initial payment of SIX HUNDRED THOUSAND PESOS (P600,000.00) as verbally agreed by the parties, shall be broken down as follows: 1. P103,499.91 shall be paid, and as already paid by the BUYER to theSELLERS on March 22, 1983, as stipulated under the Certification of undertaking dated March 22, 1983 and covered by a check of even date. 2. That the sum of P496,500.09 shall be paid directly by the BUYER to the Bank of Philippine Islands to answe ...
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