Case Digest (G.R. No. 47774) Core Legal Reasoning Model
Core Legal Reasoning Model
Facts:
On January 2, 1928, Magdalena Estate, Inc. (petitioner-appellant) entered into Contract of Sale No. SJ-639 with Louis J. Myrick (respondent-appellee) for lots Nos. 28 and 29, Block 1, Parcel 9 of the San Juan Subdivision, Rizal, for ₱7,953 payable in 120 monthly installments of ₱96.39. Myrick simultaneously executed a promissory note for the full price, stipulating that if any installment remained unpaid for more than two months, the entire unpaid balance plus 9% annual interest would become immediately due, together with 10% attorney’s fees. Myrick paid a total of ₱2,596.08, the last on October 4, 1930, although the installment due May 2, 1930 was already in default. On December 14, 1932, the president of Magdalena Estate, Inc. notified Myrick that, owing to his continued default, the contract was “cancelled,” all payments forfeited, and the lots reclaimed by the vendor. Myrick did not reply, nor was he again required to pay. On July 22, 1936, he sued in the Court of First Inst Case Digest (G.R. No. 47774) Expanded Legal Reasoning Model
Expanded Legal Reasoning Model
Facts:
- Contract of Sale and Promissory Note
- On January 2, 1928, Magdalena Estate, Inc. sold to Louis J. Myrick lots Nos. 28 and 29, Block 1, Parcel 9, San Juan Subdivision, for ₱7,953.
- Price payable in 120 equal monthly installments of ₱96.39 each, beginning upon execution.
- Vendee executed promissory note for entire price, stipulating acceleration of unpaid balance plus 9% interest and 10% attorney’s fees upon default exceeding two months.
- Payments, Default, and Cancellation Notice
- Myrick paid installments totaling ₱2,596.08, last paid October 4, 1930; first missed installment due May 2, 1930.
- On December 14, 1932, vendor’s president Hemady notified Myrick of contract cancellation for default, forfeiture of payments, and vendor’s assumption of absolute rights over the lots.
- Myrick did not reply; vendor did not demand further payments nor offer reconveyance until after litigation commenced.
- Judicial Proceedings
- July 22, 1936: Myrick filed suit in CFI Albay for return of ₱2,596.08 with legal interest from filing and costs.
- September 7, 1936: Magdalena Estate, Inc. answered with general denial and counterclaimed for unpaid balance, interest, and attorney’s fees.
- January 31, 1939: CFI Albay ordered return of ₱2,596.08 with interest from December 14, 1932, and dismissed counterclaim.
- August 23, 1940: Court of Appeals affirmed but fixed interest from complaint filing. Motion for reconsideration denied September 6, 1940. Petition for certiorari followed.
Issues:
- Validity of Unilateral Cancellation
- Whether the December 14, 1932 letter effectively cancelled contract SJ-639.
- Whether the vendor’s president’s subsequent statements could negate the clear terms of that letter.
- Entitlement to Forfeiture or Balance
- Whether Magdalena Estate, Inc. could forfeit payments made and retain them without express contractual provision.
- Whether vendor could compel fulfillment of remaining installments after electing cancellation.
- Remedy and Restitution
- Proper remedy under Civil Code for vendor upon vendee’s default in bilateral contract.
- Scope of restitution and interest upon resolution.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)