G.R. No. 102526-31, May 21, 1998
Spouses Lorenzo V. Lagandaon and Cecilia T. Lagandaon and Overseas Agricultural Development Corporation, petitioners, vs. Court of Appeals, Spouses Meliton Banoyo and Asuncion P. Banoyo, Spouses Demetrio B. Batayola and Anita A. Batayola, Bonifacio Vasquez, Spouses Romeo M. Gomez and Ester M. Gomez, Aurora Gomez, Spouses Carlos V. David and Manuela C. David, Spouses Leonido D. Bongco and Fe V. Bongco, Spouses Rafael S. Solidum and Lucenda M. Solidum, Spouses Raymundo Sitjar and Lucia Sitjar and Spouses Benjamin V. Viva and Gilda Viva, respondents.

FACTS

Pacweld Steel Corporation executed Contracts to Sell subdivision lots in favor of the private respondents on various dates from 1967 to 1968. The private respondents made installment payments but deferred further payments around 1972 due to Pacweld’s failure to develop the subdivision as agreed. The private respondents, along with other buyers, filed and won an action for Specific Performance against Pacweld, with the CFI of Manila ordering Pacweld to comply with its development obligations. Subsequently, the Development Bank of the Philippines (DBP) foreclosed on the entire Pacweld subdivision due to Pacweld’s loan default, acquired the titles, and later sold the properties to the petitioners (the Lagandaon spouses and Overseas Agricultural Development Corporation) through a Deed of Absolute Sale dated May 12, 1980. This deed contained a clause stating the vendees (petitioners) assumed all claims and liabilities from any litigation involving the properties. Petitioners filed complaints to rescind the original Contracts to Sell, alleging these became “stale and/or inoperative” due to DBP’s acquisition and that a “modified agreement to sell” governed their relationship with the private respondents, under which the respondents failed to update their accounts. The private respondents denied the existence of any modified contract and argued petitioners, as successors-in-interest, could not demand rescission without first completing the subdivision development as ordered by the court. The trial court dismissed the complaints, finding the alleged modified contract non-existent. The Court of Appeals affirmed the trial court’s decision but deleted the award of attorney’s fees to the defendants.

ISSUE

Whether the Supreme Court should review the factual findings of the lower courts regarding the existence of a modified contract to sell and the petitioners’ right to rescind the original contracts.

RULING

The Supreme Court DENIED the petition. The Court held that, as a general rule, questions of fact may not be raised in a petition for review under Rule 45, especially when such questions have already been resolved by the trial court and affirmed by the appellate court. The petitioners failed to justify a departure from this rule. The Court found that the petitioners’ theory before the trial court was based on the alleged modified contract and the private respondents’ default thereunder. They could not change their theory on appeal to one based on their ownership rights derived from the DBP sale. Furthermore, the Court noted that the petitioners, by virtue of the Deed of Absolute Sale from DBP, assumed all liabilities from existing litigation, which included the obligation to comply with the CFI Manila decision ordering the development of the subdivision. Until petitioners fulfilled this obligation, they had no right to demand further payments from the private respondents or to rescind the contracts. The petition raised factual issues and offered no compelling reason to overturn the consistent findings of the lower courts.