The spouses Fabrigas entered into a contract to purchase land but failed to make installment payments. The seller, San Francisco Del Monte, sent demand letters to cancel the contract but did not properly notify the spouses. The spouses then entered into a second contract under different terms. The Court of Appeals ruled that the first contract was validly cancelled through novation by the second contract due to ratification by the spouses. It ordered the spouses to pay outstanding amounts owed or vacate the property. On review, the Supreme Court affirmed the rulings that the first contract was replaced by novation and that the husband's consent for the second contract was achieved through his continued payments.
The spouses Fabrigas entered into a contract to purchase land but failed to make installment payments. The seller, San Francisco Del Monte, sent demand letters to cancel the contract but did not properly notify the spouses. The spouses then entered into a second contract under different terms. The Court of Appeals ruled that the first contract was validly cancelled through novation by the second contract due to ratification by the spouses. It ordered the spouses to pay outstanding amounts owed or vacate the property. On review, the Supreme Court affirmed the rulings that the first contract was replaced by novation and that the husband's consent for the second contract was achieved through his continued payments.
The spouses Fabrigas entered into a contract to purchase land but failed to make installment payments. The seller, San Francisco Del Monte, sent demand letters to cancel the contract but did not properly notify the spouses. The spouses then entered into a second contract under different terms. The Court of Appeals ruled that the first contract was validly cancelled through novation by the second contract due to ratification by the spouses. It ordered the spouses to pay outstanding amounts owed or vacate the property. On review, the Supreme Court affirmed the rulings that the first contract was replaced by novation and that the husband's consent for the second contract was achieved through his continued payments.
Spouses Fabrigas entered into an agreement denominanted as Contract to S
ell No. 2482-V with San Francisco Del Monte, Inc. a parcel of residential lot si tuated in Barrio Almanza, Las Pias, Manila for a consideration of P109,200,00. T he agreement includes that the spouses shall pay a downpayment of P30,000 with b alance within 10 years in successive instalments of P1,285.69 and a contract con taining an automatic cancellation clause, in the event the purchaser fail to pay any installments and in the event of forfeiture, all sums of money paid will be treated as rentals and waives all right to ask or demand the return of the amou nt and agrees to peaceably vacate the premises. Fabrigas paid the downpayment and took possession of the property but fa iled to pay any installments. Del Monte sent demand letters on 4 occasions to Fa brigas as final letter sent on December 7, 1983 having grace period of 15 days a nd otherwise will forfeit all payments maid and the rescission however letter wa s received by Fabrigas on December 23, 1983 but the contract was considered canc elled by Del Monte but did not notice Fabrigas on the cacellation. Marcelina Fabrigas continued remitting money to Del Monte until on Janua ry 21, 1985, parties enter into another contract to sell of No. 2491-V but under different terms. Between March 1985 and January 1986, spouses Fabrigas made irr egular payments for the second contract then on February 3, 1986 Del Monte sent a demand letter to Fabrigas for overdue account. A petition for review was made in assailment for the decision made by the Court of Appeals in CA-G.R. CV No. 45203 and its resolution denying petitioners motion for reconsideration. In the decision, the spouses Fabrigas, as defendants, cons idered paid by the amount of P78,152.00 were ordered (a) to make complete paymen t under the conditions of Contract to Sell No. 2491-V dated January 21, 1985 wit hin 20 days from the receipt of the decision and in the event of failure or refu sal, all persons claiming right and possession or occupation are ordered to vaca te and leave the premises of the house and lot, (b) if defendants chose to surre nder possession of the property will be ordered to pay San Francisco, the plaint iff, P206,223.80 as unpaid installments on the land inclusive of interests (c) o rdering defendants to jointly and severally pay plaintiff the amount of P10,000. 00 for attorneys fees and (d) to pay the costs of suit. ISSUES: 1. Whether or not Contract to Sell No. 2482-V, the first contract entered i nto by the parties, has really been cancelled and no longer valid. 2. Whether or not consent by the husband needed for novation was achieved. RULINGS: 1. Yes, Contract to Sell No. 2482-V has really been cancelled and replaced by Contract to Sell No. 2491-V. It is already novated by the second contract bec ause of the ratification made by the Fabrigas. According to the Maceda Law Sec 4, the cancellation of the contract is a two-step process. First, the seller should extend the buyer a grace period of a t least sixty days from the due date of the instalment . Second, at the end of t he grace period, the seller shall furnish the buyer with a notice of cancellatio n or demand for rescission through a notarial act, effective thirty days fro the buyers receipt thereof. The mere notice or letter will not suffice. Del Monte did not comply with this but applied automatic rescission clau se of the contract, but rescission is not the only mode of extinguishing obligat ions. In this case Novation was applied. Novation takes place when an old obliga tion is terminated by the creation of a new obligation or when the old obligatio n subsists to the extent it remains compatible with the amendatory agreement. Re quisites for novation are a previous valid obligation, an agreement of all parti es concerned to a new contract, the extinguishment of the old obligation and the birth of a valid new obligation. These requisites were complied with by the bot h parties even though a question of consent takes place. 2. Yes, consent for novation was achieved. On article 172 of the civil code expressly classifies a contract executed by th e husband without the consent of the wife as merely annullable at the instance o f the wife. However, there is no comparable provision covering an instance where the wife alone consented to a contract involving conjugal property. Art. 168, t he wife may, by express authority of the husband embodied in a public instrument , administer the conjugal partnership property. Art. 169, the wife may also, my express authority of the husband appearing in a public instrument, administer th e latter s estate. Any transaction entered by the wife without the court or the hu sbands authority is unenforceable in accordance with Art. 1317. Being unenforceable, Contract to Sell No. 2491- is susceptible to ratifi cation. In here, Isaias Fabrigas, the husband continued remitting payments for t he satisfaction of the obligation under Contract to Sell No. 2491-V, constitute ratification of the contract. Therefore, Contract to Sell No. 2482-V was novated by Contract to Sell N o. 2491-V due to ratification, then the spouses Fabrigas shall follow the decisi on of the Court of Appeals.