J.M. TUASON & CO., INC. VS. JAVIER G.R. NO.

L-28569 February 27, 1970 FACTS: On September 7, 1954, petitioner entered a contract to sell with respondent for a parcel of land for the sum of Php3,691.20 with 10% interest per annum, payable in monthly instalment of Php43.92 a month for a period of ten (10) years. Further stipulated in the contract, that upon failure of respondent to pay the monthly instalment, a one month grace period to pay such instalment will be given together with the monthly instalment falling on the said grace period. Failure to pay both monthly instalments shall be additional penalty of 10% interest. Ninety (90) days from the end of the grace period, petitioner can rescind the contract, and the payments made by respondent will be considered as rentals. Respondent paid only until Jan. 5, 1962. Thereafter failed to pay until grace period, consequently petitioner rescind the contract then asked respondent to vacate the said land. Non compliance to vacate by respondent, petitioner filed an action to the CFI for rescission of contract. The decision was rendered in favour of respondent applying Art. 1592 of NCC. Hence petitioner appealed to SC contending that Art. 1592 is applicable only to contract of sale not in contract to sell. ISSUE: Did the CFI erroneously apply Article 1592 of the New Civil Code? RULING: Yes. Regardless, of the propriety of applying Article 1592, petitioner has not been denied substantial justice under Article 1234 of the New Civil Code. In this connection, respondent religiously satisfied the monthly instalments for almost eight (8) years or up to January 5, 1962. It has been shown that respondent had already paid Php4,134.08 as of January 5, 1962 which is beyond the stipulated amount of Php3,691.20. Also, respondent has offered to pay all instalments overdue including the stipulated interest, attorneys fees and the costs which the CFI accordingly sentenced respondent to pay such instalment, interest, fees and costs. Thus, petitioner will be able recover everything that was due thereto. Under these circumstances, the SC feel that, in the interest of justice and equity, the decision appealed from may be upheld upon the authority of Article 1234 of the New Civil Code.