GENEROSA AYSON-SIMON, PLAINTIFF-APPELLEE, VS. NICOLAS ADAMOS AND VICENTA FERIA, DEFENDANTS-APPELLANTS.

Originally, this was an appeal by defendants from the Decision of the
then Court of First Instance of Manila, Branch XX, in Civil Case No.
73942, to the Court of Appeals (now Intermediate Appellate Court), which
Tribunal, certified the case to us because the issue is a pure question
of law.

On December 13, 1943, Nicolas Adamos and Vicente Feria,
defendants-appellants herein, purchased two lots forming part of the
Piedad Estate in Quezon City, with an area of approximately 56,395
square meters, from Juan Porciuncula. Sometime thereafter, the
successors-in-interest of the latter filed Civil Case No. 174 in the
then Court of First Instance of Quezon City for annulment of the sale
and the cancellation of transfer Certificate of Title No. 69475, which
had been issued to defendants-appellants by virtue of the disputed sale.
On December 18, 1963, the Court rendered a Decision annulling the
sale, cancelling TCT 69475, and authorizing the issuance of a new title
in favor of Porciuncula’s successors-in-interest. The said judgment was
affirmed by the Appellate Court and had attained finality.

In the meantime, on May 29, 1946, during the pendency of the
above-mentioned case, defendants-appellants sold to GENEROSA Ayson
Simon, plaintiff-appellee herein, the two lots in question for P3,800.00
each, plus an additional P800.00 paid subsequently for the purpose of
facilitating the issuance of new titles in GENEROSA’s name. Due to the
failure of defendants-appellants to comply with their commitment to have
the subdivision plan of the lots approved and to deliver the titles and
possession to GENEROSA, the latter filed suit for specific performance
before the Court of First Instance of Quezon City on September 4, 1963
(Civil Case No. Q-7275). On January 20, 1964, said Court ordered:

“WHEREFORE, the plaintiff is declared entitled to a summary
judgment and the defendants are hereby ordered to have the subdivision
of Lot No. 6, Block No. 2, and Lot No. 11, Block No. 3, relocated and
resurveyed and the subdivision plan approved and, if not possible for
one reason or another, and in case of the absence or loss of said
subdivision, to cause and effect the subdivision of the said lots and
deliver the titles and possession thereof to the plaintiff. As to the
claim and counterclaim for damages, let the hearing thereon be deferred
until further move by the parties.”^[1]

However, since execution of the foregoing Order was rendered impossible
because of the judgment in Civil Case No. 174, which earlier declared
the sale of the lots in question by Juan Porciuncula to
defendants-appellants to be null and void, GENEROSA filed, on August 16,
1968, another suit in the Court of First Instance of Manila (Civil Case
No. 73942) for rescission of the sale with damages. On June 7, 1969,
the Court rendered judgment, the disposi­tive portion of which reads:

“WHEREFORE, judgment is rendered in favor of the plaintiff and
against defendants, ordering the latter, jointly and severally, to pay
the former the sum of P7,600.00, the total amount received by them from
her as purchase price of the two lots, with legal rate of interest from
May 29, 1946 until fully paid; another sum of P800.00, with legal rate
of interest from August 1, 1966 until fully paid; the sum of P1,000.00
for attorney’s fees; and the costs of this suit.”^[2]

Hence, the appeal before the Appellate Court on the ground that
GENEROSA’s action had prescribed, considering that she had only four
years from May 29, 1946, the date of sale, within which to rescind said
transaction, and that her complaint for specific performance may be
deemed as a waiver of her right to rescission since the fulfillment and
rescission of an obligation are alternative and not cumulative remedies.

The appeal is without merit. The Trial Court presided by then Judge,
later Court of Appeals Associate Justice Luis B. Reyes, correctly
resolved the issues, reiterated in the assignments of error on appeal,
as follows:

“Defendants contend (1) that the fulfillment and the rescission of
the obligation in reciprocal ones are alternative remedies, and
plaintiff having chosen fulfillment in Civil Case No. Q-7525, she cannot
now seek rescission; and (2) that even if plaintiff could seek
re­scission the action to rescind the obligation has prescribed.”

“The first contention is without merit. The rule that the injured
party can only choose between fulfillment and rescission of the
obligation, and cannot have both, applies when the obligation is
possible of fulfillment. If, as in this case, the fulfillment has
become impossible, Article 1191^[3] allows the injured party to seek rescission even after he has chosen fulfillment.

“True it is that in Civil Case No. 7275 the Court already rendered
a Decision in favor of plaintiff, but since defendants cannot fulfill
their obligation to deliver the titles to and possession of the lots to
plaintiff, the portion of the decision requiring them to fulfill their
obligations is without force and effect. Only that portion relative to
the payment of damages remains in the dispositive part of the decision,
since in either case (fulfillment or rescission) defendants may be
re­quired to pay damages.

“The next question to determine is whether the action to rescind the obligation has prescribed.

“Article 1191 of the Civil Code provides that the injured party
may also seek rescission, if the fulfillment should become impossible.
The cause of action to claim rescission arises when the fulfillment of
the obligation became impossible when the Court of First Instance of
Quezon City in Civil Case No. 174 declared the sale of the land to
defendants by Juan Porciuncula a complete nullity and ordered the
cancellation of Transfer Certificate of Title No. 69475 issued to them.
Since the two lots sold to plaintiff by defendants form part of the
land involved in Civil Case No. 174, it became impossible for defendants
to secure and deliver the titles to and the possession of the lots to
plaintiff. But plaintiff had to wait for the finality of the decision
in Civil Case No. 174. According to the certification of the clerk of
the Court of First Instance of Quezon City (Exhibit ‘E-2’), the decision
in Civil Case No. 174 became final and executory ‘as per entry of
Judgment dated May 3, 1967 of the Court of Appeals.’ The action for
rescission must be commenced within four years from that date, May 3,
1967. Since the complaint for rescission was filed on August 16, 1968,
the four year period within which the action must be commenced had not
expired.

“Defendants have the obligation to return to plaintiff the amount
of P7,600.00 representing the purchase price of the two lots, and the
amount of P800.00 which they received from plaintiff to expedite the
issuance of titles but which they could not secure by reason of the
decision in Civil Case No. 174. Defendant has to pay interest at the
legal rate on the amount of P7,600.00 from May 29, 1946, when they
received the amount upon the execution of the deeds of sale, and legal
interest on the P800.00 from August 1, 1966, when they received the same
from plaintiff.”^[4]

WHEREFORE, the appealed judgment of the former Court of First Instance
of Manila, Branch XX, in Civil Case No. 73942, dated June 7, 1969, is
hereby affirmed in toto. Costs against defendants-appellants.
SO ORDERED.

Teehankee, Acting C.J., Plana, Relova, Gutierrez, Jr., and De La Fuente, JJ., concur.

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^[1] Record on Appeal, p. 38.

^[2] Ibid., pp. 68-69.

^[3] “Article 1191. x x x

“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.

x x x ”

^[4] Record on Appeal, pp. 66-68.