Civil Law,  Legally Yours

Valarao v. Court of Appeals

Valarao v. Court of Appeals

G.R. No. 130347; March 3, 1999


Petitioner entered into a conditional contract of sale with the respondent Arellano for the sale of the petitioner’s lot for Php3,000,000.00. The contract indicated that should the respondent fail to pay 3 months successively, there shall be automatic rescission.

The respondent paid religiously her installments which amounted to a total of 2M as of 1990. However, she failed to pay her monthly installments in October and November 1990.

On December 30 and 31, 1990, the respondent went to the house of the petitioner to pay all the remaining balance of the price. However, only the maid of the petitioners was there and refused to accept payment due to the order of the petitioners.

The respondent asked the help of the barangay to contact the petitioners but to no avail. Thus, the respondent made consignation on January 4, 1991. On the same day, the petitioners called the respondent and said that they are exercising their automatic rescission clause in the contract.

Accordingly, the Php2,000,000.00 payment and all the improvements on the lot are now forfeited to the petitioners. The petitioners cite Article 1592 of the Civil Code as their basis.


Whether or not there was a valid rescission of the contract under Article 1592 of the Civil Code of the Philippines


No. Firstly, Art 1592 only applies to an absolute contract of sale because it is only in such contract that there will be a rescission of the reciprocal obligation by the seller.

Secondly, the petitioner arbitrarily refused to accept the payment made by the respondent on December 30 and 31, 1990 even though the payment is made within the agreed time.

Moreover, during the past, it was the maid of the petitioners that accepted the previous payments. Should they have accepted the payment on such dates, then there would be no automatic rescission.

Petitioners cannot be rewarded for their own misdeed. Besides, the respondent already paid Php2,000,000.00, which is 2/3 of the purchase price.

Lastly, the Maceda Law was clearly not followed for the respondent is given a one-month grace period for every year she has paid. Thus, the respondent was not yet in default even if she did not pay in December 1990.

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