BUENAVENTURA ANGELES vs. URSULA TORRES CALASANZ The plaintiffs-appellees filed Civil Case No.

8943 with the Court of First Instance of Rizal, Seventh Judicial District, Branch X to compel the defendants-appellants to execute in their favor the final deed of sale alleging inter alia that after computing all subsequent payments for the land in question, they found out that they have already paid the total amount of P4,533.38 including interests, realty taxes and incidental expenses for the registration and transfer of the land. The defendants-appellants alleged in their answer that the complaint states no cause of action and that the plaintiffs-appellees violated paragraph six (6) of the contract to sell when they failed and refused to pay and/or offer to pay the monthly installments corresponding to the month of August, 1966 for more than five (5) months, thereby constraining the defendants-appellants to cancel the said contract. LLphil The lower court rendered judgment in favor of the plaintiffs-appellees. The dispositive portion of the decision reads: "WHEREFORE, based on the foregoing considerations, the Court hereby renders judgment in favor of the plaintiffs and against the defendants declaring that the contract subject matter of the instant case was NOT VALIDLY cancelled by the defendants. Consequently, the defendants are ordered to execute a final Deed of Sale in favor of the plaintiffs and to pay the sum of P500.00 by way of attorney's fees. Costs against the defendants." A motion for reconsideration filed by the defendants-appellants was denied. As earlier stated, the then Court of Appeals certified the case to us considering that the appeal involves pure questions of law. The defendants-appellants assigned the following alleged errors of the lower court: First Assignment of Error THE LOWER COURT ERRED IN NOT HOLDING THE CONTRACT TO SELL (ANNEX "A" OF COMPLIANCE) AS HAVING BEEN LEGALLY AND VALIDLY CANCELLED. Second Assignment of Error EVEN ASSUMING ARGUENDO THAT THE SAID CONTRACT TO SELL HAS NOT BEEN LEGALLY AND VALIDLY CANCELLED, THE LOWER COURT ERRED IN ORDERING DEFENDANTS TO EXECUTE A FINAL DEED OF SALE IN FAVOR OF THE PLAINTIFF.

Third Assignment of Error THE LOWER COURT ERRED IN ORDERING DEFENDANTS TO PAY PLAINTIFFS THE SUM OF P500.00 AS ATTORNEY'S FEES. The main issue to be resolved is whether or not the contract to sell has been automatically and validly cancelled by the defendants-appellants.

The defendants-appellants submit that the contract was validly cancelled pursuant to paragraph six of the contract which provides: "SIXTH. In case the party of the SECOND PART fails to satisfy any monthly installments, or any other payments herein agreed upon, he is granted a month of grace within which to make the retarded payment, together with the one corresponding to the said month of grace; it is understood, however, that should the month of grace herein granted to the party of the SECOND PART expired; without the payments corresponding to both months having been satisfied, an interest of 10% per annum will be charged on the amounts he should have paid; it is understood further, that should a period of 90 days elapse, to begin from the expiration of the month of grace herein mentioned, and the party of SECOND PART has not paid all the amounts he should have paid with the corresponding interest up to that date, the party of the FIRST PART has the right to declare this contract cancelled and of no effect, and as consequence thereof, the party of the FIRST PART may dispose of the parcel of land covered by this contract in favor of other persons, as if this contract had never been entered into. In case of such cancellation of the contract, all the amounts paid in accordance with this agreement together with all the improvements made on the premises, shall be considered as rents paid for the use and occupation of the above mentioned premises, and as payment for the damages suffered by failure of the party of the SECOND PART to fulfill his part of the agreement, and the party of the SECOND PART hereby renounces all his right to demand or reclaim the return of the same and obliges himself to peacefully vacate the premises and deliver the same to the party of the FIRST PART." (Italics supplied by appellant) The defendants-appellants argue that the plaintiffs-appellees failed to pay the August, 1966 installment despite demands for more than four (4) months. The defendants-appellants point to Jocson v. Capitol Subdivision (G.R. No. L-6573, February 28, 1955) where this Court upheld the right of the subdivision owner to automatically cancel a contract to sell on the strength of a provision or stipulation similar to paragraph 6 of the contract in this case. The defendants-appellants also argue that even in the absence of the aforequoted provision, they had the right to cancel the contract to sell under Article 1191 of the Civil Code of the Philippines. The plaintiffs-appellees on the other hand contend that the Jocson ruling does not apply. They state that paragraph 6 of the contract to sell is contrary to law insofar as it provides that in case of specified breaches of its terms, the sellers have the right to declare the contract cancelled and of no effect, because it granted the sellers an absolute and automatic right of rescission. Article 1191 of the Civil Code on the rescission of reciprocal obligations provides: "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. "The injured party may choose between the fulfillment and the rescission of the obligation, with the payment of damages in either case. He may also seek rescission, even after he has chosen fulfillment, if the later should become impossible." Article 1191 is explicit. In reciprocal obligations, either party has the right to rescind the contract upon the failure of the other to perform the obligation assumed thereunder. Moreover, there is nothing in the law that prohibits the parties from entering into an agreement that violation of the terms of the

contract would cause its cancellation even without court intervention (Froilan v. Pan Oriental Shipping, Co., et al., 12 SCRA 276) "Well settled is, however, the rule that a judicial action for the rescission of a contract is not necessary where the contract provides that it may be revoked and cancelled for violation of any of its terms and conditions' (Lopez v. Commissioner of Customs, 37 SCRA 327, 334, and cases cited therein). "Resort to judicial action for rescission is obviously not contemplated . . . The validity of the stipulation can not be seriously disputed. It is in the nature of a facultative resolutory condition which in many cases has been upheld by this Court. (Ponce Enrile v. Court of Appeals, 29 SCRA 504)." The rule that it is not always necessary for the injured party to resort to court for rescission of the contract when the contract itself provides that it may be rescinded for violation of its terms and conditions, was qualified by this Court in University of the Philippines v. De los Angeles, (35 SCRA 102) where we explained that: The right to rescind the contract for non-performance of one of its stipulations, therefore, is not absolute. In Universal Food Corp. v. Court of Appeals (33 SCRA 1) the Court stated that "The general rule is that rescission of a contract will not be permitted for a slight or casual breach, but only for such substantial and fundamental breach as would defeat the very object of the parties in making the agreement. (Song Fo & Co. v. Hawaiian-Philippine Co., 47 Phil. 821, 827) The question of whether a breach of a contract is substantial depends upon the attendant circumstances. (Corpus v. Hon. Alikpala, et al., L-23707 & L-23720, Jan. 17, 1968)." . . . The defendants-appellants state that the plaintiffs-appellees violated Section two of the contract to sell which provides: "SECOND. That in consideration of the agreement of sale of the above described property, the party of the SECOND PART obligates himself to pay to the party of the FIRST PART the Sum of THREE THOUSAND NINE HUNDRED TWENTY ONLY (P3,920.00), Philippine Currency, plus interest at the rate of 7% per annum, as follows: "(a)The amount of THREE HUNDRED NINETY TWO only (P392.00) when this contract is signed; and "(b)The sum of FORTY ONE AND 20/100 ONLY (P41.20) on or before the 19th day of each month, from this date until the total payment of the price above stipulated, including interest." because they failed to pay the August installment, despite demand, for more than four (4) months. The breach of the contract adverted to by the defendants-appellants is so slight and casual when we consider that apart from the initial downpayment of P392.00 the plaintiffs-appellees had already paid the monthly installments for a period of almost nine (9) years. In other words, in only a short time, the entire obligation would have been paid. Furthermore, although the principal obligation was only P3,920.00 excluding the 7 percent interests, the plaintiffs-appellees had already paid an aggregate amount of P4,533.38. To sanction the rescission made by the defendants-appellants will work injustice to the plaintiffs-appellees. (See J.M. Tuazon and Co., Inc. v. Javier, 31 SCRA 829) It would unjustly enrich the defendants-appellants.

Article 1234 of the Civil Code which provides that: "If the obligation has been substantially performed in good faith, the obligor may recover as though there had been a strict and complete fulfillment, less damages suffered by the obligee." The defendants-appellants argue that paragraph nine clearly allows the seller to waive the observance of paragraph 6 not merely once, but for as many times as he wishes. The defendants-appellants' contention is without merit. We agree with the plaintiffs-appellees that when the defendants-appellants, instead of availing of their alleged right to rescind, have accepted and received delayed payments of installments, though the plaintiffs-appellees have been in arrears beyond the grace period mentioned in paragraph 6 of the contract, the defendants-appellants have waived and are now estopped from exercising their alleged right of rescission. In De Guzman v. Guieb (48 SCRA 68), we held that: The defendants-appellants contend in the second assignment of error that the ledger of payments show a balance of P671.67 due from the plaintiffs-appellees. They submit that while it is true that the total monthly installments paid by the plaintiffs-appellees may have exceeded P3,920.00, a substantial portion of the said payments were applied to the interests since the contract specifically provides for a 7% interest per annum on the remaining balance. The defendants-appellants rely on paragraph 2 of the contract which provides: "SECOND. That in consideration of the agreement of sale of the above described property, the party of the SECOND PART obligates himself to pay to the party of the FIRST PART the Sum of THREE THOUSAND NINE HUNDRED TWENTY ONLY (P3,920.00), Philippine Currency, plus interest at the rate of 7% per annum . . . ." The plaintiffs-appellees on the other hand are firm in their submission that since they have already paid the defendants-appellants a total sum of P4,533.38, the defendants-appellants must now be compelled to execute the final deed of sale pursuant to paragraph 12 of the contract which provides: "TWELFTH. That once the payment of the sum of P3,920.00, the total price of the sale is completed, the party to the FIRST PART will execute in favor of the party of the SECOND PART, the necessary deed or deeds to transfer to the latter the title of the parcel of land sold, free from all liens and encumbrances other than those expressly provided in this contract; it is understood, however, that all the expenses which may be incurred in the said transfer of title shall be paid by the party of the SECOND PART, as above stated." Closely related to the second assignment of error is the submission of the plaintiffs-appellees that the contract herein is a contract of adhesion. We agree with the plaintiffs-appellees. The contract to sell entered into by the parties has some characteristics of a contract of adhesion. The defendants-appellants drafted and prepared the contract. The plaintiffs-appellees, eager to acquire a lot upon which they could build a home, affixed their signatures and assented to the terms and conditions of the contract. They had no opportunity to question nor change any of the terms of the agreement. It was offered to them on a "take it or leave it" basis.

". . .' (W)hile generally, stipulations in a contract come about after deliberate drafting by the parties thereto, .. there are certain contracts almost all the provisions of which have been drafted only by one party, usually a corporation. Such contracts are called contracts of adhesion, because the only participation of the party is the signing of his signature or his `adhesion' thereto. Insurance contracts, bills of lading, contracts of sale of lots on the installment plan fall into this category.' While it is true that paragraph 2 of the contract obligated the plaintiffs-appellees to pay the defendantsappellants the sum of P3,920.00 plus 7% interest per annum, it is likewise true that under paragraph 12 the seller is obligated to transfer the title to the buyer upon payment of the P3,920.00 price sale. The contract to sell, being a contract of adhesion, must be construed against the party causing it. We agree with the observation of the plaintiffs-appellees to the effect that "the terms of a contract must be interpreted against the party who drafted the same, especially where such interpretation will help effect justice to buyers who, after having invested a big amount of money, are now sought to be deprived of the same thru the prayed application of a contract clever in its phraseology, condemnable in its lopsidedness and injurious in its effect which, in essence, and in its entirety is most unfair to the buyers." Thus, since the principal obligation under the contract is only P3,920.00 and the plaintiffs-appellees have already paid an aggregate amount of P4,533.38, the courts should only order the payment of the few remaining installments but not uphold the cancellation of the contract. Upon payment of the balance of P671.67 without any interest thereon, the defendants-appellants must immediately execute the final deed of sale in favor of the plaintiffs-appellees and execute the necessary transfer documents as provided in paragraph 12 of the contract. The attorney's fees are justified. WHEREFORE, the instant petition is DENIED for lack of merit. The decision appealed from is AFFIRMED with the modification that the plaintiffs-appellees should pay the balance of SIX HUNDRED SEVENTY ONE PESOS AND SIXTY-SEVEN CENTAVOS (671.67) without any interests. Costs against the defendantsappellants. FELIPE C. ROQUE vs. NICANOR LAPUZ and THE CA Appeal by certiorari from the Resolution of the respondent court entitled "Felipe C. Roque, plaintiffappellee, versus Nicanor Lapuz, defendant-appellant" amending its original decision of April 23, 1970 which affirmed the decision of the Court of First Instance of Rizal (Quezon City Branch) in Civil Case No. Q-4922 in favor of petitioner, and the Resolution of the respondent court denying petitioner's motion for reconsideration. "Sometime in 1954, prior to the approval by the National Planning Commission of the consolidation and subdivision plan of plaintiff's property known as the Rockville Subdivision, situated in Balintawak, Quezon City, plaintiff and defendant entered into an agreement of sale covering Lots 1, 2 and 9, Block 1, of said property, with an aggregate area of 1,200 square meters, payable in 120 equal monthly installments at the rate of P16.00, P15.00 per square meter, respectively. In accordance with said agreement, defendant paid to plaintiff the sum of P150.00 as deposit and the further sum of P740.56 to complete the payment of four monthly installments covering the months of July, August, September, and October, 1954. (Exhibits A and B). When the document Exhibit "A" was executed on June 25, 1954, the plan covering plaintiff's property was merely tentative, and the plaintiff referred to the proposed lots appearing in the tentative plan..

Insert Defendant was likewise requested by the plaintiff to sign the corresponding contract to sell in accordance with his previous commitment. Again, defendant promised that he would sign the required contract to sell when he shall have made up-to-date the stipulated monthly installments on the lots in question, but subsequently backed out of his promise and refused to sign any contract in noncompliance with what he had represented on several occasions. And plaintiff relied on the good faith of defendant to make good his promise because defendant is a professional and had been rather good to him On or about November 3, 1957, in a formal letter, plaintiff demanded upon defendant to vacate the lots in question and to pay the reasonable rentals thereon at the rate of P60.00 per month from August, 1955. (Exhibit "B"). Notwithstanding the receipt of said letter, defendant did not deem it wise nor proper to answer the same." In reference to the mode of payment, the Honorable Court of Appeals found "Both parties are agreed that the period within which to pay the lots in question is ten years. They however, disagree on the mode of payment. While the appellant claims that he could pay the purchase price at any time within a period of ten years with a gradual proportionate discount on the price, the appellee maintains that the appellant was bound to pay monthly installments. On this point, the trial court correctly held that 'It is further argued by defendant that under the agreement to sell in question, he has the right or option to pay the purchase price at anytime within a period of ten years from 1954, he being entitled, at the same time, to a graduated reduction of the price. The Court is constrained to reject this version not only because it is contradicted by the weight of evidence but also because it is not consistent with what is reasonable, plausible and credible. It is highly improbable to expect plaintiff, or any real estate subdivision owner for that matter, to agree to a sale of his land which would be payable anytime in ten years at the exclusive option of the purchaser. On January 22, 1960, petitioner Felipe C. Roque (plaintiff below) filed the complaint against defendant Nicanor Lapuz (private respondent herein) with the Court of First Instance of Rizal, Quezon City Branch, for rescission and cancellation of the agreement of sale between them involving the two lots in question and prayed that judgment be rendered ordering the rescission and cancellation of the agreement of sale, the defendant to vacate the two parcels of land and remove his house therefrom and to pay to the plaintiff the reasonable rental thereof at the rate of P60.00 a month from August 1955 until such time as he shall have vacated the premises, and to pay the sum of P2,000.00 as attorney's fees, costs of the suit and award such other relief or remedy as may be deemed just and equitable in the premises. Defendant filed a Motion to Dismiss on the ground that the complaint states no cause of action, which motion was denied by the court. Thereafter, defendant filed his Answer alleging that he bought three lots payable at any time within ten years. Defendant admits having occupied the lots in question. As affirmative and special defenses, defendant alleges that the complaint states no cause of action; that the present action for rescission has prescribed; that no demand for payment of the balance was ever

made; and that the action being based on reciprocal obligations, before one party may compel performance, he must first comply what is incumbent upon him. After due hearing, the trial court rendered judgment, the dispositive portion of which reads: "WHEREFORE, the Court renders judgment in favor of plaintiff and against the defendant. Defendant then appealed to the CA. The latter court, finding the judgment appealed from being in accordance with law and evidence, affirmed the same. Defendant filed a Motion for Reconsideration of the appellate court's decision on the following grounds: Acting on the Motion for Reconsideration, the Court of Appeals sustained the sixth ground raised by the appellant, that assuming that a cause of action for rescission exists, he should nevertheless be entitled to the fixing of a period within which to comply with his obligation. The Court of Appeals, therefore, amended its original decision in the following wise and manner: "WHEREFORE, our decision dated April 23, 1970 is hereby amended in the sense that the defendant Nicanor Lapuz is hereby granted a period of ninety (90) days from entry hereof within which to pay the balance of the purchase price in the amount of P11,434,44 with interest thereon at the rate of 8% per annum from August 17, 1955 until fully paid. In the event that the defendant fails to comply with his obligation as above stated within the period fixed herein, our original judgment stands." Petitioner Roque, as plaintiff-appellee below, filed a Motion for Reconsideration; the Court of Appeals denied it. He now comes and appeals to this Court on a writ of certiorari. The respondent Court of Appeals rationalizes its amending decision by considering that the house presently erected on the land subject of the contract is worth P45,000.00, which improvements introduced by defendant on the lots subject of the contract are very substantial, and thus being the case, "as a matter of justice and equity, considering that the removal of defendant's house would amount to a virtual forfeiture of the value of the house, the defendant should be granted a period within which to fulfill his obligations under the agreement." Petitioner assails the decision of the Court of Appeals for the following alleged errors: I.The Honorable Court of Appeals erred in applying paragraph 3, Article 1191 of the Civil Code which refers to reciprocal obligations in general and, pursuant thereto, in granting respondent Lapuz a period of ninety (90) days from entry of judgment within which to pay the balance of the purchase price. II.The Honorable Court of Appeals erred in not holding that Article 1592 of the same Code, which specifically covers sales of immovable property and which constitutes an exception to the third paragraph of Article 1191 of said Code, is applicable to the present case. III.The Honorable Court of Appeals erred in not holding that respondent Lapuz cannot avail of the provisions of Article 1191, paragraph 3 of the Civil Code aforesaid because he did not raise in his answer or in any of the pleadings he filed in the trial court the question of whether or not he is entitled, by reason of a just cause, to a fixing of a new period.

IV.Assuming arguendo that the agreement entered into by and between petitioner and respondent Lapuz was a mere promise to sell or contract to sell, under which title to the lots in question did not pass from petitioner to respondent, still the Honorable Court of Appeals erred in not holding that aforesaid respondent is not entitled to a new period within which to pay petitioner the balance of P11,434.44 with interest due on the purchase price of P12,325.00 of the lots. V.Assuming arguendo that paragraph 3, Article 1191 of the Civil Code is applicable and may be availed of by respondent, the Honorable Court of Appeals nonetheless erred in not declaring that said respondent has not shown the existence of a just cause which would authorize said Court to fix a new period within which to pay the balance aforesaid. VI.The Honorable Court of Appeals erred in reconsidering its original decision promulgated on April 23, 1970 which affirmed the decision of the trial court. In resolving petitioner's assignment of errors, it is well that We lay down the codal provisions and pertinent rulings of the Supreme Court bearing on the crucial issue of whether Art. 1191, paragraph 3 of the New Civil Code applies to the case at bar as held by the appellate court and supported by the private respondent, or Art. 1592 of the same Code which petitioner strongly urges in view of the peculiar facts and circumstances attending this case. Article 1191, New Civil Code, provides: "Art. 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. The injured party may choose between the fulfillment and the rescission of the obligation, with the payment of damages in either case. He may also seek rescission, even after he has chosen fulfillment, if the latter should become impossible. The court shall decree the rescission claimed, unless there be just cause authorizing the fixing of a period. This is understood to be without prejudice to the rights of third persons who have acquired the thing, in accordance with articles 1385 and 1388 and the Mortgage Law." Petitioner contends that "(n)othing in the decision of the courts below would show that ownership of the property remained with plaintiff for so long as the installments have not been fully paid. Which yields the conclusion that, by the delivery of the lots to defendant, ownership likewise was transferred to the latter." (Brief for the Petitioner, p. 15) And he concludes that the sale was consummated by the delivery of the two lots, the subject thereof, by him to the respondent. Under the findings of facts by the appellate court, it appears that the two lots subject of the agreement between the parties herein were delivered by the petitioner to the private respondent who took possession thereof and occupied the same and thereafter built his house thereon, enclosing the lots with adobe stone walls and barbed wires. But the property being registered under the Land Registration Act, it is the act of registration of the Deed of Sale which could legally effect the transfer of title of ownership to the transferee, pursuant to Section 50 of Act 496. Hence, we hold that the contract between the petitioner and the respondent was a contract to sell where the ownership or title is retained by the seller and is not to pass until the full payment of the price, such payment being a

positive suspensive condition and failure of which is not a breach, casual or serious, but simply an event that prevented the obligation of the vendor to convey title from acquiring binding force. In the case at bar, there is no writing or document evidencing the agreement originally entered into between petitioner and private respondent except the receipt showing the initial deposit of P150.00 and the payment of the 4-months installment made by respondent corresponding to July, 1954 to October, 1954 in the sum of P740.56. Neither is there any writing or document evidencing the modified agreement when the 3 lots were changed to Lots 4 and 12 with a reduced area of 725 sq. meters, which are corner lots. This absence of a formal deed of conveyance is a very strong indication that the parties did not intend immediate transfer of ownership and title, but only a transfer after full payment of the price. Parenthetically, We must say that the standard printed contracts for the sale of the lots in the Rockville Subdivision on a monthly installment basis showing the terms and conditions thereof are immaterial to the case at bar since they have not been signed by either of the parties to this case. At any rate, the fact that respondent failed to comply with the suspensive condition which is the full payment of the price through the punctual performance of the monthly payments rendered petitioner's obligation to sell ineffective and, therefore, petitioner was entitled to repossess the property object of the contract, possession being a mere incident to his right of ownership. We further rule that there exists no just cause authorizing the fixing of a new period within which private respondent may pay the balance of the purchase price. The equitable grounds or considerations which are the basis of the respondent court in the fixing of an additional period because respondent had constructed valuable improvements on the land, that he has built his house on the property worth P45,000.00 and placed adobe stone walls with barbed wires around, do not warrant the fixing of an additional period. We cannot sanction this claim for equity of the respondent for to grant the same would place the vendor at the mercy of the vendee who can easily construct substantial improvements on the land but beyond the capacity of the vendor to reimburse in case he elects to rescind the contract by reason of the vendee's default or deliberate refusal to pay or continue paying the purchase price of the land. Under this design, strategem or scheme, the vendee can cleverly and easily "improve out" the vendor of his land. More than that, respondent has not been honest, fair and reciprocal with the petitioner, hence it would not be fair and reasonable to the petitioner to apply a solution that affords greater reciprocity of rights which the appealed decision tried to effect between the parties. As matters stand, respondent has been enjoying the possession and occupancy of the land without paying the other 116 monthly installments as they fall due. The scales of justice are already tipped in respondent's favor under the amended decision of the respondent court. It is only right that we strive and search for the application of the law whereby every person must, in the exercise of his rights and in the performance of his duties, act with justice, give everyone his due, and observe honesty and good faith. In the case at bar, respondent has not acted in good faith. With malice and deliberate intent, he has twisted the clear import of his agreement with the petitioner in order to suit his ends and delay the fulfillment of his obligation to pay the land he had enjoyed for the last 26 years, more than twice the period of ten years that he obliged himself to complete payment of the price. 4.Respondent's contention that petitioner has not complied with his obligation to put up the necessary facilities in the Rockville Subdivision is not sufficient nor does it constitute good reason to justify the grant of an additional period of 90 days from entry of Judgment within which respondent may pay the

balance of the purchase price agreed upon. The judgment of the appellate court concedes that petitioner's failure to comply with his obligation to put up the necessary facilities in the subdivision will not deter him from asking for the rescission of the agreement since his obligation is not correlative with respondent's obligation to buy the property. Since this is so conceded, then the right of the petitioner to rescind the agreement upon the happening or in the event that respondent fails or defaults in any of the monthly installments would be rendered nugatory and ineffective. The right of rescission would then depend upon an extraneous consideration which the law does not contemplate. The fact remains, however, that respondent has not protested to the petitioner nor to the authorities concerned the alleged failure of petitioner to put up and provide such facilities in the subdivision because he knew too well that he has paid only the aggregate sum of P890.56 which represents more or less 7% of the agreed price of P12,325.00 and that he has not paid the real estate taxes assessed by the government on his house erected on the property under litigation. The doctrinal rulings that "a slight or casual breach of contract is not a ground for rescission. It must be so substantial and fundamental to defeat the object of the parties"; that "where time is not of the essence of the agreement, a slight delay on the part of one party in the performance of his obligation is not a sufficient ground for the rescission of the agreement". One who seeks equity and justice must come to court with clean hands, which can hardly be said of the private respondent. One final point, on the supposed substantial improvements erected on the land, respondent's house. To grant the period to the respondent because of the substantial value of his house is to make the land an accessory to the house. This is unjust and unconscionable since it is a rule in Our Law that buildings and constructions are regarded as mere accessories to the land which is the principal, following the Roman maxim "omne quod solo inadeficatur solo cedit" (Everything that is built on the soil yields to the soil). Pursuant to Art. 1191, New Civil Code, petitioner is entitled to rescission with payment of damages which the trial court and the appellate court, in the latter's original decision granted in the form of rental at the rate of P60.00 per month from August, 1955 until respondent shall have actually vacated the premises, plus P2,000.00 as attorney's fees. We affirm the same to be fair and reasonable. We also sustain the right of the petitioner to the possession of the land, ordering thereby respondent to vacate the same and remove his house therefrom. WHEREFORE, IN VIEW OF THE FOREGOING, the Resolution appealed from dated October 12, 1970 is hereby REVERSED. The decision of the respondent court dated April 23, 1970 is hereby REINSTATED and AFFIRMED, with costs against private respondent. GENEROSA AYSON-SIMON vs. NICOLAS ADAMOS and VICENTA FERIA, Originally, this was an appeal by defendants from the Decision of the then Court of First Instance of Manila to the CA which Tribunal certified the case to us because the issue is a pure question of law. INSERT "WHEREFORE, the plaintiff is declared entitled to a summary judgment and the defendants are hereby ordered to have the subdivision of Lot No. 6, Block No. 2, and Lot No. 11, Block No. 3, relocated and resurveyed and the subdivision plan approved and, if not possible for one reason or another, and in case of the absence or loss of said subdivision, to cause and effect the subdivision of the said lots and deliver

the titles and possession thereof to the plaintiff. As to the claim and counterclaim for damages, let the hearing thereon be deferred until further move by the parties." 1 However, since execution of the foregoing Order was rendered impossible because of the judgment in Civil Case No. 174, which earlier declared the sale of the lots in question by Juan Porciuncula to defendants-appellants to be null and void, GENEROSA filed, on August 16, 1968, another suit in the Court of First Instance of Manila (Civil Case No. 73942) for rescission of the sale with damages. On June 7, 1969, the Court rendered judgment, the dispositive portion of which reads: "WHEREFORE, judgment is rendered in favor of the plaintiff and against defendants, ordering the latter jointly and severally, to pay the former the sum of P7,600.00, the total amount received by them from her as purchase price of the two lots, with legal rate of interest from May 29, 1946 until fully paid; another sum of P800.00, with legal rate of interest from August 1, 1966 until fully paid; the sum of P1,000 for attorney's fees; and the costs of this suit." 2 Hence, the appeal before the Appellate Court on the ground that GENEROSA's action had prescribed, considering that she had only four years from May 29, 1946, the date of sale, within which to rescind said transaction, and that her complaint for specific performance may be deemed as a waiver of her right to rescission since the fulfillment and rescission of an obligation are alternative and not cumulative remedies. The appeal is without merit. The Trial Court presided by then Judge, later Court of Appeals Associate Justice Luis B. Reyes, correctly resolved the issues, reiterated in the assignments of error on appeal, as follows: "Defendants contend (1) that the fulfillment and the rescission of the obligation in reciprocal ones are alternative remedies, and plaintiff having chosen fulfillment in Civil Case No. Q-7525, she cannot now seek rescission; and (2) that even if plaintiff could seek rescission the action to rescind the obligation has prescribed." "The first contention is without merit. The rule that the injured party can only choose between fulfillment and rescission of the obligation, and cannot have both, applies when the obligation is possible of fulfillment. If, as in this case, the fulfillment has become impossible, Article 1191 3 allows the injured party to seek rescission even after he has chosen fulfillment. "True it is that in Civil Case No. 7275 the Court already rendered a Decision in favor of plaintiff, but since defendants cannot fulfill their obligation to deliver the titles to and possession of the lots to plaintiff, the portion of the decision requiring them to fulfill their obligations is without force and effect. Only that portion relative to the payment of damages remains in the dispositive part of the decision, since in either case (fulfillment or rescission) defendants may be required to pay damages. "The next question to determine is whether the action to rescind the obligation has prescribed. "Article 1191 of the Civil Code provides that the injured party may also seek rescission, if the fulfillment should become impossible. The cause of action to claim rescission arises when the fulfillment of the obligation became impossible when the Court of First Instance of Quezon City in Civil Case No. 174 declared the sale of the land to defendants by Juan Porciuncula a complete nullity and ordered the cancellation of Transfer Certificate of Title No. 69475 issued to them. Since the two lots sold to plaintiff

by defendants form part of the land involved in Civil Case No. 174, it became impossible for defendants to secure and deliver the titles to and the possession of the lots to plaintiff. But plaintiff had to wait for the finality of the decision in Civil Case No. 174. According to the certification of the clerk of the Court of First Instance of Quezon City (Exhibit 'E-2'), the decision in Civil Case No. 174 became final and executory 'as per entry of Judgment dated May 3, 1967 of the Court of Appeals.' The action for rescission must be commenced within four years from that date, May 3, 1967. Since the complaint for rescission was filed on August 16, 1968, the four year period within which the action must be commenced had not expired. "Defendants have the obligation to return to plaintiff the amount of P7,600.00 representing the purchase price of the two lots, and the amount of P800.00 which they received from plaintiff to expedite the issuance of titles but which they could not secure by reason of the decision in Civil Case No. 174. Defendant has to pay interest at the legal rate on the amount of P7,600.00 from May 29, 1946, when they received the amount upon the execution of the deeds of sale, and legal interest on the P800.00 from August 1, 1966, when they received the same from plaintiff." 4 WHEREFORE, the appealed judgment of the former Court of First Instance of Manila, Branch XX, in Civil Case No. 73942, dated June 7, 1969, is hereby affirmed in toto. Costs against defendants-appellants. LibLex