Post on 02-Apr-2018
7/27/2019 Ayala Corporation vs Rosa- Diana
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Ayala Corporation VS. ROSA DIANA REALTY Case Digest
Ayala Corporation VS. ROSA DIANA REALTY
346 SCRA 633
FACTS: In April 1976, appellant-petitioner entered into a transaction with Manuel Sy and Sy Ka Kiengwhere former sold a lot in Salcedo Village in Makati. The deed of sale had some encumbrances
contained in the Special Conditions of Sale (SCS) and Deed of Restrictions (DR), which should be
followed by the vendees. The stipulations in the SCS are:
1) a building proposal must be submitted to Ayala which must be in accordance with the DR,
2) the construction of the building must be completed on or before 1979, and
3) that there will be no resale of the lot.
The DR specified the limits in height and floor area of the building to be constructed. However, Sy and
Kieng, failed to build a building but nonetheless with the permission of Ayala, the vendees sold the said
lot to the respondent, Rosa Diana Realty. Respondent Company agreed to abode by the SCS and the DR
stipulations. Prior to the construction, Rosa Diana submitted a building plan to Ayala complying with the
DR but it also passed a different building plan to the building administrator of Makati, which did not
comply with the stipulations in the DR. While the building, “The Peak,” was being constructed, Ayala
filed a case praying that: 1) Rosa Diana, be compelled to comply with the DR and build the building in
accordance with the building plan submitted to Ayala; or 2) on the alternative, the rescission of the deedof sale.
The trial court ruled in favor of the respondent and thus, Rosa Diana was able to complete the
construction of “The Peak.” Undeterred, Ayala filed before the Register of Deeds (RD) of Makati a cause
of annotation lis pendens. RD refused to grant Ayala such registration for in the lower court; the case is
of personal action for a specific performance and/or rescission. However, the Land Registration
Authority (LRA) reversed RD’s ruling. The appellate court upheld the RD’s ruling stating that the case
before the trial court is a personal action for the cause of action arises from the alleged violation of the
DR. The trial court sustained the respondent’s point saying that Ayala was guilty of abandonment and/or
estoppels due to its failure to enforce the terms of the DR and SCS against Sy and Kieng. Ayala
discriminately chose which obligor would be made to follow certain conditions, which is not fair and
legal. On appeal, the CA affirmed the lower court’s ruling. Hence, this petition.
7/27/2019 Ayala Corporation vs Rosa- Diana
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ISSUE: Whether or not Rosa Diana committed a breach of contract.
RULING: Yes, the Supreme Court ruled that Rosa Diana committed a breach of contract by submitting a
building plan to Ayala complying with the DR and submitting a different building plan to the building
administrator of Makati, which did not comply with the stipulations in the DR.
Contractual Obligations between parties have the force of law between them and absent any allegation
that the same are contrary to law, morals, good customs, public order or public policy, they must
complied with in good faith.
Thus, the assailed decision of the Court of Appeals is reversed and set aside.