Asb Realty Corporation v. Ortigas & Company Limited Partnership

Summary

This case involved a property transaction dispute where Ortigas & Company Limited Partnership sought to rescind a 1994 deed of sale and recover property from ASB Realty Corporation due to alleged breach of building construction covenants. The property was originally sold to Amethyst Pearl Corporation, then assigned to ASB Realty in 1996. The Supreme Court ruled in favor of ASB Realty, holding that while ASB was bound to acknowledge the annotated restrictions on the title, it did not assume Amethyst's contractual obligations under the original deed of sale. The Court emphasized that rescission under Article 1191 of the Civil Code requires breach by an actual party to the contract, and since ASB was merely a successor-in-interest who acquired only property ownership (not contractual duties), Ortigas had no cause of action against ASB. The proper action should have been against Amethyst, the original contracting party. The decision clarifies important principles regarding contractual obligations, property transfers, and the rights of third-party successors-in-interest in real estate transactions.