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Guillermo Francisco (defendant) purchased from the Government on installments, lots 937-945 of
the Tala Estate in Novaliches, Caloocan, Rizal.
He was behind in payment for these installments and on October 31, 1928, he signed a
document stating that he received P500 from Julio Abella (plaintiff) on account of lots no. 937-
945, containing an area of 221 hectares, at the rate of 100/hectare, the balance of which is due
on or before December 15 of the same year, extendible fifteen days thereafter
On Novemer 13, 1928, Abella made another payment of P415.31, upon demand made by
On December 27,1928, Francisco, being in Cebu, wrote a letter to Roman Mabanta, attaching a
power of attorney authorizing him to sign in behalf of the defendant all the documents required by
the Bureau of Land for the transfer of lots to the plaintiff
In the same letter, defendant instructed Mabanta to inform the plaintiff that the option would be
considered cancelled, and to return the amount of P915.31, in the event that the plaintiff failed to
pay the remainder of the selling price
On January 3, 1929, Mabanta notified the plaintiff that he had received the power of attorney to
sign the deed of conveyance of the lots to him, and that he was willing to execute the deed of
sale upon payment of the balance due
The plaintiff asked for a few days time, but Mabanta only gave him until January 5 - Plaintiff failed
to pay the rest of the price on January 5, but attempted to do so on January 9, but Mabanta
refused to accept it and instead returned by check the sum of P915.31
Plaintiff brought an action to compel the defendant to execute the deed of sale upon receipt of the
balance of the price, and asked that he be judicially declared the owner of said lots, and that the
defendant be ordered to deliver it to him
The CFI absolved the defendant from the complaint, and the plaintiff appealed

ISSUE: WON the time was an essential element in the contract, and therefore, the defendant was entitled
to rescind the contract for failure of plaintiff to pay the price within the time specified

Yes. The defendant is entitled to resolve the contract for failure to pay the price within the time specified.
The trial court considered that the contract in question was an option for the purchase of the lots;
thus, it ruled that in an agreement of this nature the period is deemed essential.
The opinion of the court is divided upon the question of whether the agreement was an option or
a sale, but even supposing it was a sale, the court holds that time was an essential element in the
transaction. The defendant wanted to sell those lots to the plaintiff in order to pay off certain
obligations which fell due in the month of December, 1928.
The time fixed for the payment of the price was therefore essential for the defendant, and this
view is borne out by his letter to his representative Mabanta instructing him to consider the
contract rescinded if the price was not completed in time.
In accordance with Art. 1124 of the Civil Code (1191 of NCC), the defendant is entitled to resolve
the contract for failure to pay the price within the time specified.