99 Jacinto v.

Kaparaz (1992) [Pure and Conditional Obligations]

Cane, Jerry Jr.

Jacinto v. Kaparaz
209 SCRA 246
May 22, 1992

Facts:
On 11 March 1966, herein petitioners and private respondents entered into an agreement under
which the private respondents agreed to sell and convey to petitioners a portion consisting of six hundred
(600) square meters of a lot located in Matiao, Mati, Davao Oriental for P1,800.00. A downpayment of
P800.00 was paid and the balance was to be paid on instalment of P100.00 a month to the Development
Bank of the Philippines (DBP).

In view of the refusal of private respondents to execute the deed of sale, the petitioners filed against
them a complaint for specific performance with the CFI. The private respondents alleged that the sale did
not materialize because of the failure of petitioners to make timely payments to the DBP. They then prayed
for the dismissal of the case and a declaration that the agreement is null and void.

The Trial Court rendered a decision in favor of the petitioners ordering the defendant to reconvey the
property to the plaintiffs. The respondents appealed from the decision to the CA and contended that the
Trial Court had erred in its decision which then reversed the decision of the Trial Court and of the opinion
that:

a. The petitioners that the petitioners had not fully discharged their obligation considering that their last
payments were several months delayed beyond the date agreed upon by the parties.
b. No evidence supports that the respondent failed to protest the delay in payments.
c. That the delay in payment is not a slight breach but were essential because they were specifically
stipulated upon by the parties. The primary importance of timely payments sprang from the nature of
the subject bank account consisting of a loan secured by a real estate mortgage which demanded up-
to-date amortization to prevent foreclosure.
d. Although both parties defaulted in the performance of their obligations, petitioners were the first to
incur in delay. Therefore, greater justification to decree rescission.

Unable to accept the verdict, the petitioner commenced this petition which the Court gave due course.

Issue:
Whether or not the respondent are entitled to rescind the agreement.

Held:
No. The private respondents are not entitled to rescind the agreement. Since in a contract of sale, the
non-payment of the price is a resolutory condition, the remedy of the seller under Article 1191 of the Civil
Code is to exact fulfillment or to rescind the contract. In respect, however, to the sale of immovable
property, this Article must be read together with Article 1592 of the same Code:
 "ARTICLE 1592. In the sale of immovable property, even though it may have been stipulated that
upon failure to pay the price at the time agreed upon the rescission of the contract shall of right
take place, the vendee may pay, even after the expiration of the period, as long as no demand for
rescission of the contract has been made upon him either judicially or by a notarial act. After the
demand, the court may not grant him a new term."

In the case at bar, there was non-compliance with the requirements prescribed in these provisions. It
is not controverted that private respondents had neither filed an action for specific performance nor
demanded the rescission of the agreement either judicially or by a notarial act before the filing of the
complaint. it is only in their Answer that they belatedly raised the defense of resolution of the contract
pursuant to Article 1191 by reason of petitioners' breach of their obligation.

Moreover, the delay incurred by petitioners was but a casual or slight breach of the agreement, which
did not defeat the object of the parties in entering into the agreement. A mere casual breach does not justify
rescission.

Accordingly, We rule that rescission of the agreement was not available to private respondents.

Ruling: WHEREFORE, the petition is GRANTED. The challenged decision of the Court of Appeals is
REVERSED and the judgment of the lower court is hereby REINSTATED and AFFIRMED. Costs against
private respondent