Case Digest (G.R. No. 152346)
Facts:
On April 23, 1983, Isaias F. Fabrigas and Marcelina R. Fabrigas entered into Contract to Sell No. 2482-V with San Francisco Del Monte, Inc. for Lot No. 9, Block No. 3 (TCT No. 4980), paid P30,000 down and defaulted on subsequent installments; respondent sent demand letters and declared cancellation but did not effect a notarial rescission under R.A. No. 6552. On January 21, 1985 petitioner Marcelina executed Contract to Sell No. 2491-V for the same property under restructured terms; both spouses made intermittent payments, respondent sued for recovery of possession on September 28, 1990, the RTC ordered petitioners to complete payments or vacate, the Court of Appeals affirmed, and petitioners filed this Rule 45 petition.
Issues:
- Was Contract to Sell No. 2482-V extinguished by rescission or novated by Contract to Sell No. 2491-V?
- If rescinded, did respondent comply with the cancellation requirements of R.A. No. 6552, Section 4?
- If novated, are petitioners liable for breach of the subsequent contract and is Contract to Sell No. 2491-V enforceable despite alleged defects in consent?
Ruling:
The petition was DENIED and the September 28, 2001 Decision of the Court of Appeals was AFFIRMED. The Court held that although respondent did not comply with the notarial cancellation required by R.A. No. 6552, Contract to Sell No. 2482-V was novated by Contract to Sell No. 2491-V, and the latter was valid and binding after ratification by petitioners' subsequent payments despite initial unenforceability for lack of the husband's consent; costs were awarded against petitioners.
Ratio:
The Court found Section 4 of R.A. No. 6552 applicable because petitioners had paid less than two years of installments, so rescission required a sixty-day grace and a notarial notice effective thirty days after receipt, which respondent did not give, and automatic forfeiture clauses were void under Section 7. Nevertheless, the second contract effected an upward change in price and materially altered principal conditions, making the two obligations incompatible and producing an extinctive novation that extinguished the first obligation. Although Contract to Sell No. 2491-V was unenforceable initially because petitioner Marcelina executed it without her husband's consent, petitioner Isaias subsequently ratified the contract by making payments, thereby validating the obligation; a contract of adhesion was not per se void.
Doctrine:
- R.A. No. 6552, Section 4 applies where less than two years of installments were paid and requires a sixty-day grace and a notarial notice of cancellation effective thirty days after receipt.
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