1170 of the Civil Code.2 In the specific performance and rescission of contract cases, the subject matter is incapable of pecuniary estimation, hence jurisdiction belongs to the Regional Trial Court (RTC). 1636[1].) . Hence, Civil Case No. SPOUSES ROMEO PAJARES and IDA T. PAJARES, Petitioners Specific performance is a specialized remedy used by courts when no other remedy (such as money) will adequately compensate the other party. The Code of Civil Procedure in its Chapter XXI entitled "Costs in the Several Courts" states in section 487 that "Costs shall ordinarily be allowed to the prevailing party as a matter of course . - Regional Trial Courts shall exercise exclusive original jurisdiction: (1) In all civil actions in which the subject of the litigation is incapable of pecuniary estimation; (8) In all other cases in which the demand, exclusive of interest, damages of whatever kind, attorney's fees, litigation expenses, and costs or the value of the property in controversy exceeds one hundred thousand pesos (₱100,000.00) or, in such other cases in Metro Manila, where the demand, exclusive of the abovementioned items exceeds two hundred thousand pesos (₱200,000.00). Just as surely should the plaintiff who has lived up to his bargain and who has been put to expense to do so, be permitted to coerce the defendant into going through with the contract. However, if the cause of default is due to issuance of a bouncing check the amount of such check shall earn same penalty charge with additional 5% for the first two weeks and 10% for the next two weeks and its succeeding two weeks thereafter from the date of dishonor until fully paid without prejudice to the filling of appropriate cases before the courts of justice. The RL Main Operator has the option to cancel, terminate this dealership outlet contract, at its option should [sic] in the event that there are unpaid services equivalent to a two-week minimum required number of kilos of laundry materials but not ₱8,000 worth of collectibles, for services performed by the RL Main Operator or its assigned Franchise Outlet, unpaid bills on ordered and delivered support products, falling below required monthly minimum number of kilos. The appellant shall recover costs of both instances. On or about February 26, 2015, Defendants Edwards and Lathrop, as the Seller, and Plaintiffs predecessor and assignor, Urban Blox, LLC and/or Assignee, as the Buyer, 1191.) The term specific performance refers to literal performance of ones obligations under a contract. True, breach of contract may give rise to a complaint for specific performance or rescission of contract. Resolution grants the injured party the option to pursue, as principal actions, either a rescission or specific performance of the obligation, with payment of damages in either case. Spouses Romeo Pajares and Ida T. Pajares,Defendants. Reiterating my request that you pardon us for all the trouble, I am. WHEREFORE, in view of the foregoing, the Order dated February 19, 2013 of the Regional Trial Court, 7th Judicial Region, Branch 17, Cebu City in Civil Case No. Respondent, on the other hand, counters in its Comment23 that the CA is correct in declaring that Civil Case No. SERENOChief JusticeChairperson, ALFREDO BENJAMIN S. CAGUIOAAssociate Justice. . Liquidated damages are those agreed upon by the parties to a contract, to be paid in case of breach thereof. In ruling that respondent's Complaint is incapable of pecuniary estimation and that the RTC has jurisdiction, the CA comported itself with the following ratiocination: A case for breach of contract [sic] is a cause of action either for specific performance or rescission of contracts. Specific performance is a remedy that seeks the specific enforcement of transferring ownership of the subject property as contracted for in the underlying sales contract. Plaintiff Remarkable Laundry and Dry Cleaning Services, is a sole proprietorship business owned by Archemedes Solis with principal office address at PREDECO CMPD AS-Ostechi Bldg. Johnson, Street, Avanceña and Fisher, JJ., concur. The plaintiff proceeded to have survey made of the land and to prepare the deed and mortgage. The defendants filed a general denial, alleging that the plaintiff has not sustained damages of any kind or character, and praying that the case be dismissed at the cost of the plaintiff. Specific performance is a remedy sought in civil court instead of money and is often used in contracts for the sale of land but can apply in other circumstances. Defendant through a letter dated April 24, 2012 said it [sic] would CEASE OPERATION. The aforementioned act of unilateral cessation of operation by the defendant constitutes a serious breach to [sic] the contract because it totally, whimsically and grossly disregarded the Remarkable Laundry Dealer Outlet Contract, which resulted to [sic] failure on its part in obtaining the minimum purchase or delivery of 200 kilos per week for the entire duration of its cessation of operations. "25 Rescission of contract under Article 1191 of the Civil Code, on the other hand, is a remedy available to the obligee when the obligor cannot comply with what is incumbent upon him.26 It is predicated on a breach of faith by the other party who violates the reciprocity between them. Breach of contract may give rise to an action for specific performance or rescission of contract.1 It may also be the cause of action in a complaint for damages filed pursuant to Art. L-13438             November 20, 1918. So ordered. To reiterate, the defendant temporarily stopped its business operation prior to the two-year contract duration had elapsed to the prejudice of the plaintiff, which is a clear disregard of its two-year obligation to operate the business unless a pre-termination is called. 3. On February 19, 2013, the RTC issued an Order dismissing Civil Case No. Defendant should have opted to comply with the Pre-termination clause in the subject contract other than its [sic] unilateral and whimsical cessation of operations. 344, 348 (1992); Genesis Investment, Inc. v. Heirs of Ceferino Ebarasabal, 721 Phil. This is understood to be without prejudice to the rights of third persons who have acquired the thing, in accordance with Articles 1385 and 1388 and the Mortgage Law. The reasoning supporting the authorities is that the performance of contracts must and should be mutual. The defendant purposely ignored the letters by [sic] the plaintiff. "It is attached to an obligation in order to ensure performance and has a double function: (1) to provide for liquidated damages, and (2) to strengthen the coercive force of the obligation by the threat of greater responsibility in the event of breach."36. Any violation of the above-mentioned provisions shall result in the immediate termination of this agreement, without prejudice to any of the RL Main Operators rights or remedies granted to it by law. 1279, would seem to settle favorably the first branch of the prayer of the complaint, asking that the defendants be required to sign the deed and mortgage to the land in question. Specific Performance asks the court to force the opposing party into a contract that binds them to actually perform the contract at issue, rather than award damages for breach of contract. July 10, 2001 A.D.. Kirsten L. Hansen Designated Agent EarthLink Network, Inc. 3100 New York Drive Pasadena 91107 Remarkable Laundry and Dry Cleaning herein represented by Archemedes G. Solis. Banilad, Heman Cortes St., Mandaue City. However, as will be discussed below, breach of contract may also be the cause of action in a complaint for damages. (Specific Performance for Breach of Contract- Against All Defendants) 7. . The provisions of the five articles first cited and others that could be mentioned merely tend to corroborate what is self-evident, namely, the existence of a valid contract between the parties. Acquires personal right to the fruits of the thing from the time the obligation to deliver arises 4. at 25-34; penned by Associate Justice Ma. The court said: Whether or not the defendants are able to perform the contract is a matter of defense, and there is no special defense on that subject in the answer; but it appears from the evidence that the defendants have not the funds available for the cash payment on the contract, and apparently the performance of the contract in the terms agreed between the plaintiff and defendants would be impracticable; the court would not be able to enforce a decree for specific performance, and such a decree might operate as a great hardship upon the defendants; therefore, the court is of the opinion that it would be useless, unjust and inequitable to render judgment herein for specific performance.lawphil.net. 6. The court shall decree the rescission claimed, unless there be just cause authorizing the fixing of a period. CEB SP No. Jurisdiction in civil cases. The rule of equity jurisprudence in such a case is that mere pecuniary inability to fulfill an engagement does not discharge the obligation of the contract, not does it constitute any defense to a decree for specific performance. Plaintiff, by counsels, to the Honorable Court most respectfully states THAT: 1. Here we have presented a good and valid contract, bilateral in character, and free from all taint of fraud. The injured party may choose between the fulfillment and the rescission of the obligation, with the payment of damages in either case. Having thus determined the nature of respondent's principal action, the next question brought to fore is whether it is the RTC which has jurisdiction over the subject matter of Civil Case No. THE DEALER OUTLET SHALL ALSO BE LIABLE TO PAY A FINE OF TWENTY FIVE THOUSAND PESOS, (₱25,000), FOR EVERY VIOLATION AND PHP 50,000 IF PRE-TERMINATION BY THE RL MAIN OPERATOR DUE TO BREACH OF THIS AGREEMENT.'. The stability of commercial transactions requires that the rights of the seller be protected just as effectively as the rights of the buyer. During pre-trial, the issue of jurisdiction was raised, and the parties were required to submit their respective position papers. CEB SP No. Sometime on [sic] the second (2nd) quarter of 2012, defendant failed to follow the required standard purchase quota mentioned in article IV of the subject dealership agreement. L-45710 (Mortgage Loan, Insolvency, Rescission, Specific Performance, Reciprocal Obligations) (Attached and marked as Annex "A" is a copy of the Remarkable Laundry Dealer Outlet Contract.). They failed to do this, and instead, the defendant, Patrocinio R. Afzelius, wrote a letter to plaintiff, as follows: MY DEAR SIR: It is with regret that I inform you that it is now absolutely impossible for us to effect the purchase of the property at Juan Luna Street, as it was our desire to do. About the month of December, 1916, the defendants made a proposition to the plaintiff for the purchase of this property. . It held as follows: In determining the jurisdiction of an action whose subject is incapable of pecuniary estimation, the nature of the principal action or remedy sought must first be ascertained. Jurisdiction of Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit Trial Courts in Civil Cases. the following decisions of the supreme court of Spain interpretative of these articles can be noted: April 17, 1897; October 10, 1904; February 4, 1905. (7 R. C. L., 801, citing cases.) Since the total amount of the damages claimed by the respondent in its Complaint filed with the RTC on September 3, 2012 amounted only to ₱280,000.00, said court was correct in refusing to take cognizance of the case. . . T-8,337 7 (TCT T-8,337); that by virtue of a private handwritten document, 8 Sejas sold said parcel of land to them in 1982; that thereafter, they took possession of the … Petitioners sought to reconsider, but were denied. It argued that the RTC acted with grave abuse of discretion in dismissing Civil Case No. Respondent, however, neither asked the RTC to compel petitioners to perfom1 such obligation as contemplated in said contract nor sought the rescission thereof. The complaint sought the award of ₱200,000.00 as incidental and consequential damages; the amount of ₱30,000.00 as legal expenses; the amount of ₱30,000.00 as exemplary damages; and the amount of ₱20,000.00 as cost of the suit, or for the total amount of ₱280,000.00 as damages. The undersigned concurs in the result, but nevertheless believes that all the costs of this action and half of those of the first ought to be paid by the defendants. Under the provisions of Batas Pambansa Blg. But, where the primary issue is something other than the right to recover a sum of money, where the money claim is purely incidental to, or a consequence of the principal relief sought, such are actions whose subjects are incapable of pecuniary estimation, hence cognizable by the RTCs.15, Verily, what determines the nature of the action and which court has jurisdiction over it are the allegations of the complaint and the character of the relief sought.16, In our considered view, the complaint, is one incapable of pecuniary estimation; thus, one within the RTC's jurisdiction. CEB-39025 as an action for damages seeking to recover an amount below its jurisdictional limit. (Irureta Goyena vs. Tambunting [1902], 1 Phil., 490; Thunga Chui vs. Que Bentec [1903], 2 Phil., 561; Couto Soriano vs. Cortes [1907, 8 Phil., 459; Dievas vs. Co Chongco [1910], 16 Phil., 447.) The deed was ready about December 28, 1916, when the defendants were notified to appear and sign the same. Article 1451 provides that, "A promise to sell or buy, when there is an agreement as to the thing and the price, entitles the contracting parties reciprocally to demand the fulfillment of the contract." . Philippine cases have so held. The Court grants the Petition. (Hopper vs. Hopper [1863], 16 N. J. On September 3, 2012, Remarkable Laundry and Dry Cleaning (respondent) filed a Complaint denominated as "Breach of Contract and Damages"6 against spouses Romeo and Ida Pajares (petitioners) before the RTC of Cebu City, which was docketed as Civil Case No. They asserted that in determining jurisdiction over the subject matter, the allegations in the Complaint and the principal relief in the prayer thereof must be considered; that since respondent merely prayed for the payment of damages in its Complaint and not a judgment on the claim of breach of contract, then jurisdiction should be determined based solely on the total amount of the claim or demand as alleged in the prayer; that while breach of contract may involve a claim for specific performance or rescission, neither relief was sought in respondent's Complaint; and, that respondent "chose to focus his [sic] primary relief on the payment of damages,"21 which is "the true, actual, and principal relief sought, and is not merely incidental to or a consequence of the alleged breach of contract. Under current law, courts grant specific performance when they perceive that damages will be inadequate compensation. The equitable doctrine is not applied where it will be productive of great hardship. This case is hereby REMANDED to the RTC which is ORDERED to PROCEED with the trial on the merits with dispatch. The trial court, after finding the facts as herein stated, made application thereto of the law of Specific Performance.
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