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Swire Realty Development Corporation VS

This case involves a dispute between Jayne Yu and Swire Realty Development Corporation over a condominium unit purchase agreement. Yu fully paid for the unit but Swire failed to complete and deliver the unit on time. Yu filed a complaint seeking rescission of the contract. The Supreme Court ruled that rescission was proper, as Swire breached the contract by failing to deliver the unit within the agreed upon period, despite full payment by Yu. The delay amounted to a violation of Swire's obligations under the contract and the law, entitling Yu to rescind the agreement and receive damages.

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264 views

Swire Realty Development Corporation VS

This case involves a dispute between Jayne Yu and Swire Realty Development Corporation over a condominium unit purchase agreement. Yu fully paid for the unit but Swire failed to complete and deliver the unit on time. Yu filed a complaint seeking rescission of the contract. The Supreme Court ruled that rescission was proper, as Swire breached the contract by failing to deliver the unit within the agreed upon period, despite full payment by Yu. The delay amounted to a violation of Swire's obligations under the contract and the law, entitling Yu to rescind the agreement and receive damages.

Uploaded by

Michael Vincent Bautista
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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SWIRE REALTY DEVELOPMENT CORPORATION

VS

 JAYNE YU

G.R. No. 207133, March 09, 2015

PERALTA, J.:

DOCTRINE

When the obligor cannot comply with what is incumbent upon it, the
obligee may seek rescission and, in the absence of any just cause for the court
to determine the period of compliance, the court shall decree the rescission.

FACTS

Jayne Yu and petitioner Swire Realty Development Corporation entered


into a Contract to Sell on July 25, 1995 covering one residential condominium
unit, specifically Unit 3007 of the Palace of Makati, located at P. Burgos corner
Caceres Sts., Makati City, with an area of 137.30 square meters for the total
contract price of P7,519,371.80, payable in equal monthly installments until
September 24, 1997. Respondent likewise purchased a parking slot in the
same condominium building for P600,000.00.

On September 24, 1997, respondent paid the full purchase price of


P7,519,371.80 for the unit while making a down payment of P20,000.00 for the
parking lot. However, notwithstanding full payment of the contract price,
petitioner failed to complete and deliver the subject unit on time. This
prompted respondent to file a Complaint for Rescission.

ISSUE

Is the remedy of rescission under Article 1191 of the Civil Code proper?

RULING
Yes, it is proper. Basic is the rule that 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. The breach
contemplated in the said provision is the obligor’s failure to comply with an
existing obligation. When the obligor cannot comply with what is incumbent
upon it, the obligee may seek rescission and, in the absence of any just cause
for the court to determine the period of compliance, the court shall decree the
rescission.

It is evident that the report on the ocular inspection conducted on the


subject condominium project and subject unit shows that the amenities under
the approved plan have not yet been provided as of May 3, 2002, and that the
subject unit has not been delivered to respondent as of August 28, 2002, which
is beyond the period of development of December 1999 under the license to
sell. Incontrovertibly, petitioner had incurred delay in the performance of its
obligation amounting to breach of contract as it failed to finish and deliver the
unit to respondent within the stipulated period. The delay in the completion of
the project as well as of the delay in the delivery of the unit are breaches of
statutory and contractual obligations which entitle respondent to rescind the
contract, demand a refund and payment of damages.

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