Written Report in Law 3

Rescission (Article 1591-1593)

Submitted by:
Maria Lou Sosoban
BSA 2-B

Submitted to:
Atty. Rosalyn A. Montessa
Subject Instructor
Rescission
 Should the vendor have reasonable grounds to fear the loss of
immovable property sold and its price, he may immediately sue
for the rescission of the sale.
 Should such ground not exist, the provisions of Article 1191 shall
be observed.
o Article 1191: The power to rescind obligations is implied in reciprocal ones, in
case one of the obligors should not comply with what is incumbent upon him.
o The injured party may choose between the fulfillment and the rescission of
the obligation, with payment of damages in either case.
o He may also seek rescission after he has chosen fulfillment if such fulfillment
should become impossible.
o The court shall decree the rescission claimed, unless there be just cause
authorizing the fixing of a period.
o This is understood to be without prejudice to the rights of third persons who
have acquired the ting in accordance with articles 1385 and 1388 and the
Mortgage Law.
 Definition of Terms:
o Rescission-Is the effect of “Unmaking a Contract” or its
undoing from the beginning, and not merely it’s
termination. This creates the obligation to return the
object of the contract. Such can be carried out if the one
who demands rescission can return whatever he may be
obliged to restore.
o Reciprocal Obligations- Are those which arise from the
same cause wherein each party is a debtor and a creditor
of each other. The performance of one is conditioned upon
the simultaneous fulfillment of the other. From the
moment one of the parties fulfills his obligation delay by
the other party begins.
 Note: Article 1591 is applicable in both cash and installment
sales because it does not distinguish between one and the
other.

 In the case of the sale of Immovable Property, failure to pay the

price at the time agreed upon shall cause the rescission of the
contract.

 Before a demand for rescission of the contract (due to the non-

payment of purchase price) has been made by the vendor (either
by judicial or notarial methods) the vendee can still pay the price
even if the period of payment has expired (notwithstanding the
first part of Article 1592).

 The right to rescind is not absolute and the court may extend the
period for payment. (See Part 3 of Article 1191 above) Once, the
demand for rescission by suit or notarial methods the court may
not grant the vendee a new payment period.

 There are cases where the provisions of article 1592 does not
apply, mainly:

o To sales on installments of real property in which the

parties have laid down the procedure to be followed in the
event the vendee failed to fulfill his obligation.
o To a mere promise to sell. (Executory Contract to sell)
where the title remains with the vendor until the full
payment of the price.
o In other words, the vendee (on those cases) may no longer
pay the price after the expiration of the time agreed upon
 although there is no demand made via suit or notarial
methods.

 In the case of personal property/ movable property (which has

not been delivered to the vendee), the vendor can rescind the
contract as a matter of right, if the vendee without any valid
cause does not:
o Accept the Delivery
o Pay the Price (unless a credit period for its payment has
been stipulated)
Example: Maria Lou sold her piano to Jhovany for P30,000. Said
piano is to be delivered on September 21.
 If on September 21, Jhovany does not accept the
delivery or pay the price without lawful cause, then
Maria Lou may elect to enforce compliance or to
rescind the contract with the right to damages in
either case.
 The reason for this difference is that personal properties are
not capable of maintaining a stable price in the market. Their
prices are so changeable that any delay in their disposal might
cause the vendor a great prejudice.
 This is not true in the case of Real Property which has more or
less stable price in the market and the delay that might result
from the requirement imposed on the vendor to demand in any
way prove detrimental to the interest of the vendor.