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    GR 134241 Reyes v. Lim 11 AUG 2003

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    Reino Cabitac
    1) Reyes filed a complaint against Lim and others seeking to annul a contract to sell land and claiming damages. The contract provided that Lim would pay the balance of the purchase price upon the tenants vacating, but they did not vacate. 2) Lim counterclaimed, seeking specific performance of the contract and damages. He asked the court to order Reyes to deposit the down payment with the court, which the court granted. 3) The Supreme Court affirmed, holding that in cases where the law and rules are silent, courts may apply equity to prevent unjust enrichment and ensure restitution, as was done by ordering deposit of the down payment.

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    GR 134241 Reyes v. Lim 11 AUG 2003

    Uploaded by

    Reino Cabitac
    43 views1 page
    1) Reyes filed a complaint against Lim and others seeking to annul a contract to sell land and claiming damages. The contract provided that Lim would pay the balance of the purchase price upon the tenants vacating, but they did not vacate. 2) Lim counterclaimed, seeking specific performance of the contract and damages. He asked the court to order Reyes to deposit the down payment with the court, which the court granted. 3) The Supreme Court affirmed, holding that in cases where the law and rules are silent, courts may apply equity to prevent unjust enrichment and ensure restitution, as was done by ordering deposit of the down payment.

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    GR-134241-Reyes-v.-Lim-11-AUG-2003

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    1) Reyes filed a complaint against Lim and others seeking to annul a contract to sell land and claiming damages. The contract provided that Lim would pay the balance of the purchase price upon the tenants vacating, but they did not vacate. 2) Lim counterclaimed, seeking specific performance of the contract and damages. He asked the court to order Reyes to deposit the down payment with the court, which the court granted. 3) The Supreme Court affirmed, holding that in cases where the law and rules are silent, courts may apply equity to prevent unjust enrichment and ensure restitution, as was done by ordering deposit of the down payment.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    43 views1 page

    GR 134241 Reyes v. Lim 11 AUG 2003

    Uploaded by

    Reino Cabitac
    1) Reyes filed a complaint against Lim and others seeking to annul a contract to sell land and claiming damages. The contract provided that Lim would pay the balance of the purchase price upon the tenants vacating, but they did not vacate. 2) Lim counterclaimed, seeking specific performance of the contract and damages. He asked the court to order Reyes to deposit the down payment with the court, which the court granted. 3) The Supreme Court affirmed, holding that in cases where the law and rules are silent, courts may apply equity to prevent unjust enrichment and ensure restitution, as was done by ordering deposit of the down payment.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    of 1

    STATUTORY CONSTRUCTION

    CASTILLO, E.G.

    GR NO. 134241 AUG 11 2003

    PETITIONER: DAVID REYES (SUBSTITUTED BY VICTORIA FABELLA)


    RESPONDENT: JOSE LIM
    CHUY CHENG KENG
    HARRISON LUMBER, INC.
    CARPIO, J.:

    I. FACTS
     MAR 23 1995 – Reyes filed before RTC Paranque 260 a complaint for annulment of contract and damages
    against the respondents. The complaint alleged that Reyes (seller) and Lim (buyer) entered into a “Contract to
    Sell” a parcel of land which was occupied by Harrison Lumber as lessee for Php35,000/month
     Contract to Sell provided the following:
    o Contract Price: Php 28,000,000, payable as follows:
     Php 10,000,000 upon signing of the contract
     Php 18,000,000 shall be paid on or before MAR 8 1995 at 9:30AM at a bank designated by
    the Buyer but upon complete vacation of the tenants of the property and execution of Deed
    of absolute sale. If tenants have vacated the premises earlier than MAR 8 1995, the seller
    shall give the vendee at least 1 week advance notice for the payment of the balance and
    execution of Deed of Absolute Sale.
    o IN the event that tenants have not vacated the premises on MAR 8 1995, the BUYER shall withhold
    payment and SELLER agrees to pay a penalty of 4% per month on the amount of the down payment
    until complete vacation of tenants of the premises.
     Reyes claimed that Harrison Lumber and Lim connived not to vacate the property until the Php400,000 per
    month would accumulate to the unpaid amount which Harrison Lumber denied and said that it is having
    difficulty in finding a location.
     Lim for his part said he was ready to pay the balance and requested several meetings but Reyes kept
    postponing and even offered to return the Php 10,000,000. Lim rejected the offer and learned that the
    property has been sold to Line One Foods Corporation for Php16.8 million which prompted Lim to file a case
    of estafa against Reyes and an action for specific performance and nullification of sale and title plus damages.
     Lim requested in open court that Reyes be ordered to deposit the Php10,000,000 with the RTC which the
    court granted.
    II. ISSUE
     Whether the Court of Appeals erred in finding the trial court could issue the questioned Orders on grounds of
    equity when there is an applicable law on the matter, that is, Rules 57 to 61 of the 1997 Rules on Civil
    Procedure.
    III. RULING - AFFIRM the Decision of the Court of Appeals
     The instant case, however, is precisely one where there is a hiatus in the law and in the Rules of Court. If left
    alone, the hiatus will result in unjust enrichment to Reyes at the expense of Lim. The hiatus may also imperil
    restitution, which is a precondition to the rescission of the Contract to Sell that Reyes himself seeks. This is
    not a case of equity overruling a positive provision of law or judicial rule for there is none that governs this
    particular case. This is a case of silence or insufficiency of the law and the Rules of Court. In this case, Article 9
    of the Civil Code expressly mandates the courts to make a ruling despite the "silence, obscurity or
    insufficiency of the laws."[21] This calls for the application of equity,[22] which "fills the open spaces in the
    law."
     Thus, the trial court in the exercise of its equity jurisdiction may validly order the deposit of the P10 million
    down payment in court. The purpose of the exercise of equity jurisdiction in this case is to prevent unjust
    enrichment and to ensure restitution. Equity jurisdiction aims to do complete justice in cases where a court of
    law is unable to adapt its judgments to the special circumstances of a case because of the inflexibility of its
    statutory or legal jurisdiction.[24] Equity is the principle by which substantial justice may be attained in cases
    where the prescribed or customary forms of ordinary law are inadequate.[25]

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