Civil Law,  Legally Yours

The Caridad Estates, Inc. v. Pablo Santero

The Caridad Estates, Inc. v. Pablo Santero

G.R. No. 47231; December 19, 1940


Petitioner entered into a contract of sale of three (3) parcels of land previously leased by the same to Santero. They stipulated that a part of the price shall be paid upon execution of the contract and the other parts on an installment basis. They further stipulated that upon failure of Santero to pay within 60 days after formal notification of demand by the petitioner, the same may, at its option, (a) consider all payments to become due and demandable or (b) to repossess the property and treat the previous payments as rent.

When defendant failed to pay according to the agreed procedure of payment, the petitioner gave a formal notice to him that they will exercise the second option, that is, repossess the property. However, even after 60 days from the notification, defendant failed to pay.

The defendant failed to vacate the premises which opted the petitioner to file and action for unlawful detainer.

The trial court ruled in favor of petitioner. Upon appeal, the IAC affirmed the lower courts decision.

Hence this petition. Defendant claims that petitioner cannot extrajudicially rescind the contract since the law gives a right to the defendant to still pay even after the maturity of the installment as guaranteed by Art 1504 of the Old Civil Code (now Art 1592).


Whether or not petitioner can extra-judicially rescind the contract of sale


Yes. formal notification made by the petitioner to defendant upon its failure to pay in accordance with the stipulated procedure satisfies the requirement of Art 1504 (now Art 1592) of the Civil Code concerning the ‘notarial act’ which devoids the right of defendant to still pay the purchase price even after its maturity.

Thus, the extrajudicial rescission of the contract shall of right take place since it was expressly stipulated in the contract of sale between the parties.

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