BANKING.docx

Ggdi and the spouses pantaleon are bound by the

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GGDI and the spouses Pantaleon are bound by the purchase price as stated in the Deed of Sale. Both the RTC and the Court of Appeals found that the spouses Pantaleon failed to pay GGDI the balance of the purchase price for the subject property. This is a finding of fact, and it is well- settled that factual findings of the trial court, particularly when affirmed by the Court of Appeals, are generally binding upon us. 60 Paragraph 4 of the Deed of Sale explicitly states that "[i]n case for any reason whatsoever, [Bienvenida] fails to pay the balance of the purchase price xxx, then this Deed shall be deemed cancelled and null and void and all payments previously made shall be deemed forfeited in favor of [GGDI] as liquidated damages." 61 Even without such provision in the Deed of Sale, a contract of sale, being a reciprocal obligation, can be rescinded under Article 1191 of the Civil Code: ART. 1191. The power to rescind obligations is implied in reciprocal ones, in case one of the obligors should not comply with what is incumbent upon him. The injured party may choose between the fulfillment and the rescission of the obligation, with the payment of damages in either case. He may also seek rescission, even after he has chosen fulfillment, if the latter should become impossible. The court shall decree the rescission claimed, unless there be just cause authorizing the fixing of a period. This is understood to be without prejudice to the rights of third persons who have acquired the thing, in accordance with articles 1385 and 1388 and the Mortgage Law. As to rescission of the sale of an immovable property such as a parcel of land, Article 1592 of the Civil Code further provides: ART. 1592. In the sale of immovable property, even though it may have been stipulated that upon failure to pay the price at the time agreed upon the rescission of the contract shall of right take place, the vendee may pay, even after the expiration of the period, as long as no demand for rescission of the contract has been made upon him either judicially or by a notarial act. After the demand, the court may not grant him a new term. The right of rescission of a party to an obligation under Article 1191 of the Civil Code is predicated on a breach of faith by the other party who violates the reciprocity between them. 62 The failure of the spouses Pantaleon to pay the balance of the purchase price for the subject property entitled GGDI to rescind the Deed of Sale. And in view of our finding that Allied Bank was a mortgagee in bad faith, the subsequent transfer in its favor by way of foreclosure on the mortgage and purchase of the subject property at the public auction sale did not and cannot bar rescission. 63 However, the RTC, in the exercise of its discretion and in accordance with Article 1592 of the Civil Code, decided to grant the spouses Pantaleon a new term of 30 days within which to pay the balance of the purchase price so as to avoid rescission of the sale of the subject property.
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