G.R. No. 196251 , July 9, 2014
OLIVAREZ REALTY CORPORATION and DR. PABLO R. OLIVAREZ, Petitioner, vs. BENJAMIN CASTILLO, Respondent.

FACTS

Benjamin Castillo was the registered owner of a parcel of land in Batangas. On April 5, 2000, he entered into a Contract of Conditional Sale with Olivarez Realty Corporation, represented by Dr. Pablo R. Olivarez. Under the contract, Olivarez Realty agreed to buy the property for ₱19,080,490.00, with a ₱5,000,000.00 down payment to be paid in installments and the balance to be paid in 30 monthly installments starting from the month a decision voiding a conflicting title held by the Philippine Tourism Authority (PTA) is received. Olivarez Realty assumed the responsibility to file the necessary legal action to nullify the PTA’s title, with Castillo’s full assistance. If the action is denied, Castillo agreed to reimburse all amounts paid. Olivarez Realty also agreed to pay disturbance compensation to tenants (not exceeding ₱1,500,000.00), while Castillo undertook to clear the land of tenants within six months; failure would allow Olivarez Realty to suspend monthly down payments. Olivarez Realty took immediate possession upon signing.
Castillo filed a complaint for rescission of contract, alleging that Olivarez Realty only paid ₱2,500,000.00 of the purchase price, did not file any action against the PTA, and did not pay disturbance compensation or clear the tenants. In their Answer, Olivarez Realty and Dr. Olivarez admitted the partial payment but defended that Castillo failed to fully assist in filing the action and failed to clear the tenants, giving them the right to withhold payments. Castillo filed a Request for Admission, which the defendants objected to by reiterating their Answer. Castillo then filed a Motion for Summary Judgment and/or Judgment on the Pleadings, arguing the defendants had substantially admitted the material allegations of the complaint. The defendants opposed, arguing the motion was devoid of merit and that the case should proceed to trial because an adverse title existed and Castillo had allegedly sold the property to another. The Regional Trial Court granted the motion for summary judgment, rescinded the contract, ordered Castillo to return the ₱2,500,000.00, and ordered Olivarez Realty to vacate the property and pay attorney’s fees. The Court of Appeals affirmed with modification, deleting the award of attorney’s fees.

ISSUE

Whether the trial court correctly rendered a summary judgment in favor of Castillo.

RULING

Yes, the trial court correctly rendered a summary judgment. A summary judgment is proper when there is no genuine issue as to any material fact. The pleadings, affidavits, and admissions show no genuine issue exists. The defendants admitted in their Answer that Olivarez Realty only paid ₱2,500,000.00. They also did not specifically deny under oath the actionable document (the Deed of Conditional Sale), thereby admitting its genuineness and due execution. Their defense—that they withheld payment because Castillo failed to assist in the lawsuit and clear the tenants—is unavailing. The contract clearly placed the responsibility to file the action against the PTA on Olivarez Realty, with Castillo merely in an assisting role. Furthermore, the obligation to pay the purchase price was not conditioned on the clearing of tenants; the contract only allowed suspension of the monthly down payment, not the entire obligation, and this suspension right was not invoked. The defendants’ claim about an existing adverse title and a prior sale to another person were bare allegations unsupported by evidence and did not constitute a genuine issue. Therefore, as Olivarez Realty failed to pay the full purchase price without just cause, it committed a substantial breach, warranting rescission under Article 1191 of the Civil Code. The Supreme Court affirmed the Court of Appeals’ decision with modification, reinstating the award of attorney’s fees to Castillo as stipulated in the contract.