Legarda Hermanos vs Saldaña,
GR No. L-26578, January 28. 1974
Subject: Obligations and
Contracts
FACTS
Saldaña had entered into two
written contracts with Legarda, a subdivision owner, whereby Legarda agreed to
sell to him two of his lots for 1,500 per lot, payable over a span of 10 years
on 120 monthly installments with 10% interest per annum. Saldaña paid for eight
consecutive years but did not make any further payments due to Legarda’s
failure to make the necessary improvement on the said lot which was promised by
their representative, the said Mr. Cenon. Saldaña already paid a total of
Php3,582.06. The statement of account shows that Saldaña paid Php1,682.28 of
the principal and Php1,889.78 for the interest. It did not distinguish which of
the two said lots was paid. Petitioner, then, rescinded the contract based on
the stipulation of the contract that payments made by respondent shall be
considered as rentals and any improvements made shall be forfeited in favor of
the petitioner. The lower court ruled sustaining petitioner’s cancellation of contract.
So respondent appealed and judgment was reversed in favor of the respondent
ordering petitioners to deliver to plaintiff one of the two lots at the choice
of the defendant and execute the deed of conveyance.
ISSUE
Whether or not the vendor can ask
for rescission of the sale of two lots if the buyer does not continue paying.
RULING
No, the vendor cannot.
Under the law (Art 1380, NCC),
contracts validly agreed upon may be rescinded in the cases established by law.
In this case, even though it was stipulated that failure to complete the payment would result to the cancellation of the contract, it was still not valid, otherwise unfairness would result. As clearly shown in the statement of account, Saldaña was able to pay one of the two said lots. Hence, SC ordered the vendor to convey to the buyer one of the two lots.
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