Case Digest: Noble vs City of Manila, 67 Phil 1

Noble vs City of Manila, 67 Phil 1

Subject: Obligations and Contracts

FACTS

On October 18, 1926, Jose Syquia and the City of Manila entered into a contract to construct a school building with 20 compartments and that the City of Manila will lease the building from Syquia for a period of not more than three years.

On April 13, 1927, the contract was amended in part providing that Syquia will lease the building to the City of Manila for a period of not more than three years with the rental amount of P30 per room, and the City of Manila shall lease to Syquia for the same period the land of the City over which the building was built for P1.00 a month and the City of Manila shall purchase the building within the 3-year period as stipulated in the original contract provided that if the City of Manila failed to buy it on the stipulated period, the period of the contract shall be extended for the same period. With the conformity of the city, Syquia sold his right, title and interest and participation in the said building to Lutgarda Sandoval who later conveyed it to Vicente Noble for the same amount.

It was proposed by the then mayor of the city, Tomas Earnshaw that the contract be amended and include the annual renewal of the contract so as to comply with the rules of accounting, until the building is purchased by the City of Manila in accordance with the original contract. However, the City of Manila failed to pay the stipulated rent corresponding to the month of February, 1934, and following, whereupon Vicente Noble, on April 10, 1934, filed the complaint which gave rise to this case, wherein he asks that the city be ordered to purchase the building for the price of P46,600, with legal interest thereon from the filing of the complaint, and to pay the rentals at the rate of P600 a month, corresponding to the month of February, 1934 and following, until the purchase of the building is effected and the price thereof paid.

The City of Manila, after some admission and denial, noted that the lease of the building by the city be rescinded and set aside and that the same be expropriated.

ISSUE

Whether or not rescission be granted.

RULING

No, rescission should not be granted.

Under the law (Art 1380, NCC), contracts validly agreed upon may be rescinded in the cases established by law.

In this case, rescission should not be granted. That the contract conferred more favors upon one party than upon another is not a ground for rescission. Besides, even with the rentals already paid, the purchase price cannot be considered excessive because the rentals, together with the price, represented merely a reasonable profit. Even had the profit been excessive, the excessiveness of the price is not a ground for rescission because the only grounds for rescission are those enumerated by law.