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    Goldenrod vs. CA

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    Cherrie May Orense
    1) Goldenrod agreed to buy 43 parcels of land from Barreto and Sons and paid a P1 million earnest money deposit that was intended to form part of the purchase price. 2) Goldenrod was unable to pay the outstanding obligations by the deadline and informed Barreto Realty it would not push through with the purchase. 3) The Court ruled that by rescinding the contract without opposition, Barreto Realty had an obligation to return the P1 million earnest money deposit plus interest, and retaining the deposit while selling the property to another would amount to unjust enrichment.

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    Goldenrod vs. CA

    Uploaded by

    Cherrie May Orense
    68 views1 page
    1) Goldenrod agreed to buy 43 parcels of land from Barreto and Sons and paid a P1 million earnest money deposit that was intended to form part of the purchase price. 2) Goldenrod was unable to pay the outstanding obligations by the deadline and informed Barreto Realty it would not push through with the purchase. 3) The Court ruled that by rescinding the contract without opposition, Barreto Realty had an obligation to return the P1 million earnest money deposit plus interest, and retaining the deposit while selling the property to another would amount to unjust enrichment.

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    17. Goldenrod vs. CA

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    1) Goldenrod agreed to buy 43 parcels of land from Barreto and Sons and paid a P1 million earnest money deposit that was intended to form part of the purchase price. 2) Goldenrod was unable to pay the outstanding obligations by the deadline and informed Barreto Realty it would not push through with the purchase. 3) The Court ruled that by rescinding the contract without opposition, Barreto Realty had an obligation to return the P1 million earnest money deposit plus interest, and retaining the deposit while selling the property to another would amount to unjust enrichment.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    68 views1 page

    Goldenrod vs. CA

    Uploaded by

    Cherrie May Orense
    1) Goldenrod agreed to buy 43 parcels of land from Barreto and Sons and paid a P1 million earnest money deposit that was intended to form part of the purchase price. 2) Goldenrod was unable to pay the outstanding obligations by the deadline and informed Barreto Realty it would not push through with the purchase. 3) The Court ruled that by rescinding the contract without opposition, Barreto Realty had an obligation to return the P1 million earnest money deposit plus interest, and retaining the deposit while selling the property to another would amount to unjust enrichment.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 1

    Orense, Cherrie May D.

    GOLDENROD, INC. vs. COURT OF APPEALS


    G.R. No. 126812 November 24, 1998

    Facts:
    Barreto and Sons, Inc. owned 43 parcels of land which were mortgaged with United
    Coconut Planters Bank (UCPB). UCPB foreclosed the mortgaged land due to default of
    payment. Goldenrod offered to buy the property from Barreto and Sons, Inc. The President of
    Goldenrod wrote a letter to Que, President of Barreto and Sons, Inc., which states the
    preference of Goldenrod that the lots be reconsolidated back to its mother titles and it enclosed
    the earnest money of P1 million which shall form part of the purchase price. When the term of
    existence of Barreto and Sons, Inc expired, all its assets and liabilities including the parcels of
    land to Barreto Realty. Goldenrod’s offer to buy the property resulted in its agreement with
    Barreto Realty that Goldenrod would pay the outstanding obligations of Barreto Realty with
    UCPB and the balance of the purchase price with interest. Goldenrod did not pay UCPB on the
    deadline set for payment, instead, it asked for an extension of 1 month. Another 60-day
    extension was requested but UCPB did not agree. Meanwhile, Barreto Realty was able to cause
    the reconsolidation of the 43 titles covering the property into 2 titles on which it allegedly
    incurred expenses for the reconsolidation amounting to P250,000.00.
    The President of Logarta Realty, agent and broker of Goldenrod, wrote Que informing
    the latter that it could not go through with the purchase of the property due to circumstances
    beyond its fault, the denial by UCPB of its request for extension of time to pay the obligation.
    Logarta likewise demanded the return of the earnest money. Barreto Realty sold to Asiaworld
    one of the two consolidated lots. Then the other one was transferred to UCPB by way of dacion
    which in turn was sold to Asiaworld. The demand for the return of the earnest price remained
    unheeded. This prompt Goldenrod to file a complaint for the return of P1 million plus damages.
    The trial court ruled in favor of Goldenrod which was reversed by the CA.

    Issue:
    Whether or not the forfeiture of the earnest money in favor of Barreto Realty would
    amount to unjust enrichment at the expense of petitioner.

    Ruling:
    Yes. Art. 1482 of the Civil Code, whenever earnest money is given in a contract of sale,
    it shall be considered as part of the purchase price and as proof of the perfection of the contract.
    Goldenrod clearly stated without any objection from Barreto Realty that the earnest money was
    intended to form part of the purchase price. It was an advance payment which must be
    deducted from the total price. Hence, the parties could not have intended that the earnest
    money or advance payment would be forfeited when the buyer should fail to pay the balance of
    the price, especially in the absence of a clear and express agreement thereon. By reason of its
    failure to make payment, Goldenrod, through its agent, informed Barreto Realty that it would no
    longer push through with the sale. In other words, Goldenrod resorted to extrajudicial rescission
    of its agreement with Barreto Realty.
    By virtue of the extrajudicial rescission of the contract to sell by Goldenrod without
    opposition from Barreto Realty who, in turn, sold the property to other persons, Barreto Realty,
    as the vendor, had the obligation to return the earnest money of P1 million plus legal interest
    from the date it received notice of rescission from Goldenrod up to the date of the return or
    payment. It would be most inequitable and would amount to unjust enrichment if Barreto Realty
    would be allowed to retain Goldenrod’s payment and at the same time appropriate the proceeds
    of the second sale made to another.

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