Case Digest: Angeles vs Calasanz, G.R. No. 42283

Angeles vs Calasanz, GR No. 42283, March 18, 1985

Subject: Obligations and Contracts

Facts:

On December 19, 1957, defendants-appellants Ursula Torres Calasanz and plaintiffs-appellees Buenaventura Angeles and Teofila Juani entered a contract to sell a piece of land located in Cainta, Rizal for the amount of P3,920.00 plus 7% interest per annum. The plaintiffs-appellees made a down payment of P392.00 upon the execution of the contract. They promised to pay the balance in monthly instalments of P41.20 until fully paid, the instalment being due and   payable   on   the   19th   day   of   each   month.   The   plaintiffs-appellees   paid   the   monthly instalments until July 1966, when their aggregate payment already amounted to P4,533.38. On December 7, 1966, the defendants-appellants wrote the plaintiffs-appellees a letter requesting   the   remittance   of   past   due   accounts.   On   January   28, 1967, the   defendants-appellants   cancelled   the   said   contract   because   the   plaintiffs   failed   to   meet   subsequent payments. The plaintiffs’ letter with their plea for reconsideration of the said cancellation was denied by the defendants. The plaintiffs-appellees filed a case before the Court of First  Instance to compel  the defendant to execute in their favour the final deed of sale alleging inter alia that after computing all subsequent payments for the land in question, they found out that they have already paid the   total   amount   including   interests,  realty  taxes   and   incidental  expenses.   The   defendants alleged in their answer that the plaintiffs violated par. 6 of the contract to sell when they failed and refused to pay and/or offer to pay monthly instalments corresponding to the month ofAugust, 1966 for more than 5 months, thereby constraining the defendants to cancel the said contract. The Court of First Instance rendered judgement in favour of the plaintiffs, hence this appeal

Issue:

Whether or not the contract to sell has been automatically and validly cancelled by the Calasanz.

Ruling:

No.

Under the law (Art 1305, NCC), a contract is a meeting of minds between two persons whereby one binds himself, with respect to the other, to give something or to render some service.

In reciprocal obligations, either party has the right to rescind the contract upon the failure of the other to perform the obligation assumed thereunder. Moreover, there is nothing in the law that prohibits the parties from entering into an agreement that violation of the terms of the contract would cause its cancellation even without court intervention. The rule is that it is not always necessary for the injured party to resort to court for rescission of the contract when the contract itself provides that it may be rescinded for violation of its terms and conditions. SC agrees with the plaintiff-appellees that when the defendant-appellants, instead of availing of their alleged right to rescind, they have accepted and received the delayed payments of instalments, though the plaintiff-appellees have been though the plaintiffs-appellees have been in arrears beyond the   grace   period   mentioned   in   paragraph   6   of   the   contract, the defendants-appellants have waived and are now estopped from exercising their alleged right of rescission.