- Petitioner
- Laurencio C. Ramel
- Respondent
- Daniel Aquino
- Citation
- G.R. No. 133208
- Court
- Supreme Court
- Division
- Second Division
- Ponente
- Puno, J.
- Decided
- July 31, 2006
Summary
This case involves the rescission of an oral contract for the sale of agricultural land due to substantial breach. The Ramel family agreed to purchase 8.2030 hectares from Daniel Aquino for P110,700, assuming his mortgage obligation to DBP and paying P25,000 balance. While the Ramels paid most amounts owed to Aquino and took possession, they failed to settle the mortgage by the December 31, 1983 deadline, instead restructuring the loan for 10 years without Aquino's consent. The Supreme Court affirmed the rescission under Article 1191 of the Civil Code, finding substantial breach that warranted contract termination. The decision clarifies requirements for judicial demand under Article 1592, holding that raising rescission as a defense in an Answer satisfies the law. The Court also addressed compensation issues, ruling that offsetting claims for improvements and fruits requires proper evidence.