ANGELES vs CALASANZ

Oblicon – Reciprocal obligations (Art. 1191-1192), action for rescission

Court Supreme Court

Citation GR No. L-42283
Date March 18, 1985
Plaintiff-appellee Buenaventura Angeles, et al
Defendant-appellant Ursula Torres Calasanz, et al
Ponente Guitierrez Jr., J.
Relevant Topic Art. 1191-1192 Reciprocal obligations, action for recission
Prepared By Soriano, Hilary Holly C.

CASE SUMMARY
Angeles and Calasanz entered into a contract to sell a piece of land for P3,920 plus 7% interest p.a.. After Angeles has
stopped paying Calasanz the monthly installments, even though the aggregate amound paid has exceeded the principal
obligation, Calasanz cancelled the contract. Angeles went to court to question the cancellation of the contract and pray that
the land be delivered to them. COFI ruled in favor of Angeles. Calasanz appeals the decision of the COFI Rizal, declaring
the contract to sell as not having been validly cancelled and ordered them to execute the final deed of sale in favor of
Angeles and pay P500 atty’s fees. The Supreme Court affirmed COFI decision with modification, stating that the contract
was not validly cancelled since Calasanz accepted late payments from Angeles.

FACTS
 December 19, 1957 – Ursula Torres Calasanz and Tomas Calasanz (Calasanz) and Buenaventura Angeles and
Teofila Juani (Angeles) entered into a contract to sell a piece of land in Cainta Rizal for P3,920 plus 7% interest
per annum.
o Down payment of P392 upon execution of the contract – paid by Angeles
o Balance in monthly installment of P41.20, due and payable on the 19 th day of each month – paid by
Angeles until July 1966 (aggregate payment already P4,533.38 which is over the principal balance)
o On numerous occasions, Calasanz accepted late payments from Angeles.
 December 7, 1966 – Calasanz wrote a letter to Angeles requesting the remittance of past due accounts
 January 28, 1967 – Calasanz cancelled the contract due to non-payment.
 Angeles filed a civil case to compel Calasanz to execute the final deed of sale since they have already overpaid the
initial P3,920 + interest and have actually paid P4,533.38 including interests, realty taxes and incidental expenses
for the registration and transfer
 Calasanz alleged that there is no cause of action because Angeles violated par. 6 of the contract when they
refused to pay the monthly installments of August 1966 for more than 5 months.
 RTC ruled in favor of Angeles, that the contract was not validly cancelled and ordered Calasanz to execute the final
deed of sale in favor of Angeles + P500 atty’s fees.

ISSUE/HELD RATIO
W/N the The power to rescind is implied in reciprocal obligations, but it is not absolute. It must be for
contract to sell substantial and fundamental breach as would defeat the very object of the parties making the
was validly agreement.
cancelled by  Calasanz argues that paragraph 6 of the contract allows them to validly cancel it:
Calasanz? – NO o In case Angeles fails to pay the monthly installment a grace period of 1 month will be
provided. The payment for the late installment + the current month’s payment shall
be due upon expiration of the grace period.
o If still uncomplied with, 10% interest p.a. will be charged upon the said amounts
o Should a period of 90 days elapse, beginning from the expiration of the grace period,
Calasanz has the right to declare the contract cancelled and of no effect, and can
dispose of the land in favor of other persons.
 Calasanz argues that Angeles failed to pay the August 1966 installments despite demand for
more than 4 months, and that Jocson vs Capitol Subdivision be acknowledged wherein the
Court upheld th right of the subdivision owner to automatically cancel the contract to sell on
the basis of a provision similar to paragraph 6.
 Angeles argues that Jocson is not applicable since paragrapgh 6 is contrary to law because
it grants automatic and absolute right of rescission to the sellers.
o In UFC vs CA, the Court upheld the Song Fo vs Hawaiian PH ruling that there must
be substantial breach to warrant the rescission of a contract
ANGELES vs CALASANZ
Oblicon – Reciprocal obligations (Art. 1191-1192), action for rescission

o The breach of contract of Angeles is so slight considering that an initial down payment
of P392 has been made, and that the aggregate payment given to Calasanz has
already exceeded the principal obligation (P4,533.38 vs P3,920)
o It would unjustly enrich Calasanz if the contract was to be rescinded.

Calasanz have waived and now estopped from exercising their alleged right of rescission.
 Moreover, the right to rescind was deemed waived when Calasanz, instead of availing of their
alleged right to rescind, have accepted and receive delayed payments of installents even if
they were beyond the grace period.

Based on paragraph 12 of the contract, Calasanz must be execute the final deed of sale since
the P3,920 total price of sale has been completed (and actually overpaid).
 Angeles argues that based on paragraph 12, Calasanz must be compelled to do so:
o Once the payment of P3,920 is completed, Calasanz will execute in favor of Angeles
the necessary deed or deeds to transfer the title of the land, free from liens and
encumberances other than those provided by the contract.

The contract to sell has some characteristics of a contract of adhesion. (contracts of sale of
lots on the installment plan fall into this category)
 The contract was made by Calasanz (seller).
 Angeles signed the contract without having the opportunity to question nor change any of the
terms of the agreement, as it was offered on a “take it or leave it” basis

RULING
Petition DENIED. Decision appealed from affirmed WITH MODIFICATION that Angeles must pay the balance of P671.67
without interest (in addition to the original decision of executing the final deed of sale by Calasanz in favor of Angeles).
Costs against Calasanz.