Glenn Marie G.

Esmero Legal Counseling

2018400134 Summer Term – SY 2018 – 2019

GR No. 216023 – Buenviaje v. Spouses Salonga

FACTS:
Jebson entered into a Joint Venture Agreementc(JVA) with Spouses Salonga, the latter owned three
parcels of land in Tagaytay City, which is known as Brentwoods Tagaytay Villas. Jebson undertook the
construction of the units at its own expense and the license to sell from HLURB. Out of the 10 units, 7
belong to Jebson and the remaining 3 to the Spouses Salonga, which are to be delivered within 6 months
after Jebson’s receipt of the downpayment for the units allocated to it. Jebson can sell the units under
terms as it may deem fit, subject to the condition that the price agreed upon was with the conformity of
Spouses Salonga.

Jebson entered into a Contract to Sell with Buenviaje over unit 5 for P10,500,000.00 without the
conformity of the spouses. P7,800,000.00 was paid through a “swapping agreement”, and eventually
there was full payment of the contract price. However, Jebson failed to fulfill its obligation. Buenviaje
formally demanded the immediate completion and delivery of said unit. Eventually, Buenviaje filed before
HLURB a Complaint for Specific Performance with Damages and Attorney’s Fees, against Jebson. Said case
was consolidated with those filed by other parties because it is of the similar nature.

In praying for an action of specific performance, complainants based it on Article 1191 of the Civil Code
which provides that, “The power to rescind obligations is implied in reciprocal ones, in case 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.”

Specific performance and “rescission” are alternative remedies available to a party who is aggrieved by a
counter-party’s breach of a reciprocal obligation. Although Buenviaje primarily prayed for the remedy of
specific performance, the alternative prayer for resolution is textually consistent with what Artilce 1191
of the Civil Code.

Jebson, in their defense, said that they were ready to comply with all their contractual obligations but
were not able to secure the necessary government permits because Spouses Salonga stubbornly refused
to cause the consolidation of the parcels of land.

Spouses Salonga however, says that they were not liable simply because there was no privity of contract
between the complainants and them, and that the contracts to sell were not unenforceable against them
since Jebson entered into it without their conformity—which is in violation of the JVA.

ISSUES:
A. Whether or not the grant of remedy of specific performance in favor of the Buenvijes was proper;
B. Whether or not Spouses Salonga are not solidarily liable with Jebson and Banez for the completion
and construction of the unit;

RULING:
A. Yes. Buenviaje’s alternative prayer for rescission is textually consistent with that portion of Article
1911 of the Civil Code which states that an injured party, “may also seek rescission, even after he
 has chosen fulfillment, if the latter should become impossible.”Nevertheless, the impossibility of
fulfillment was not demonstrated in the proceedings conducted. Thus, Buenviaje can no longer
recant his primary choice of relief.
B. No. Mutual restitution is the proper consequence of the remedy of resolution. It cannot arise
when the remedy of specific performance, which is the relief prayed for and the one granted to
the injured party. Spouses Salonga were not parties to the contract to sell, the Civil Code provides
that, contracts can only bind the parties who entered into it and cannot favor or prejudice third
persons. Thus, absent any privity of contract as to them, there is no basis to hold Spouses Salonga
liable.