Francisco S. Pe v. Hon. Intermediate Appellate Court

Summary

The Pe spouses sued for specific performance and contract rescission, claiming the total consideration for their five parcels of land should be P1,544,161.05 (P620,000.00 plus P924,161.05 in bank obligations). The Supreme Court affirmed lower courts' dismissal, ruling that the contract's terms were clear and unambiguous - the P620,000.00 was the total consideration, with the bank obligation payments serving as the method of applying this consideration to release mortgages. The Court applied Article 1370 of the Civil Code on contract interpretation, emphasizing that clear contract terms must be given their literal meaning. While finding procedural errors in the lower court's discussion of novation (which wasn't properly pleaded), the Court upheld the factual findings regarding contract interpretation, demonstrating the binding nature of clear contractual provisions between private parties.