Palay Inc. v. Clave
G.R. No. L-56076
September 21, 1983
Facts:
1.
On March 28, 1965, petitioner
Palay, Inc., through its President, Albert Onstott sold a parcel of land owned
by the corporation to the private respondent, Nazario Dumpit, by virtue of a
Contract to Sell. The sale price was P23,300.00 with 9% interest per annum,
payable with a down payment of P4,660.00 and monthly instalments of P246.42
until fully paid. Paragraph 6 of the
contract provided for automatic extrajudicial rescission upon default in payment
of any monthly instalment after the lapse of 90 days from the expiration of the
grace period of one month, without need of notice and with forfeiture of all instalments
paid.
2. Respondent Dumpit paid the down
payment and several instalments amounting to P13,722.50 with the last payment
was made on December 5, 1967 for instalments up to September 1967. Almost six
(6) years later, private respondent wrote petitioner offering to update all his
overdue accounts and sought consent to the assignment of his rights to a
certain Lourdes Dizon. Petitioners informed respondent that his Contract to
Sell had long been rescinded pursuant to paragraph 6 of the contract, and that
the lot had already been resold.
3. Respondent filed a letter complaint with the National Housing Authority
(NHA) questioning the validity of the rescission. The NHA held that the
rescission is void in the absence of either judicial or notarial demand. Palay, Inc. and Onstott in his capacity as
President of the corporation, jointly and severally, was ordered to refund
Dumpit the amount paid plus 12% interest
from the filing of the complaint. Petitioners' MR was denied by the NHA. Respondent
Presidential Executive Assistant, on May 2, 1980, affirmed the Resolution of
the NHA. Reconsideration sought by petitioners was denied for lack of merit.
Thus, the present petition.
Issue: W/N demand is necessary to rescind a contract
Ruling: As held in previous
jurisprudence, the 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. However, even in the cited cases, there was at least a
written notice sent to the defaulter informing him of the rescission. A written
notice is indispensable to inform the defaulter of the rescission. Hence,
the resolution by petitioners of the contract was ineffective and inoperative
against private respondent for lack of notice of resolution (as held in the U.P. vs. Angeles case). The act
of a party in treating a contract as cancelled should be made known to the
other.
Later, RA 6551 6551 entitled
"An Act to Provide Protection to Buyers of Real Estate on Instalment
Payments,” emphasized the indispensability of notice of cancellation to the
buyer when it specifically provided:
Sec. 3(b) ... the actual cancellation of the contract shall take place
after thirty days from receipt by the buyer of the notice of cancellation or the demand for rescission of the
contract by a notarial act and upon full payment of the cash surrender value to
the buyer. (Emphasis supplied).
Moreover, there
was no waiver on the part of the private respondent of his right to be notified
under paragraph 6 of the contract since it was a contract of adhesion, a
standard form of petitioner corporation, and private respondent had no freedom
to stipulate. Finally, it is a matter of public policy to protect buyers of
real estate on instalment payments against onerous and oppressive conditions.
Waiver of notice is one such onerous and oppressive condition to buyers of real
estate on instalment payments.
As a consequence
of the resolution by petitioners, rights to the lot should be restored to
private respondent or the same should be replaced by another acceptable lot but
since the property had already been sold to a third person and there is no
evidence on record that other lots are still available, private respondent is
entitled to the refund of instalments paid plus interest at the legal rate of
12% computed from the date of the institution of the action. It would be most inequitable if
petitioners were to be allowed to retain private respondent's payments and at
the same time appropriate the proceeds of the second sale to another.
Onstott not
personally liable
Onstott was made
liable because he was then the President of the corporation and the controlling
stockholder but there was no sufficient proof that he used the corporation to
defraud private respondent. He cannot, therefore, be made personally liable
just because he "appears to be the controlling stockholder". Mere
ownership by a single stockholder or by another corporation is not of itself
sufficient ground for disregarding the separate corporate personality.
Finally, there are no badges of
fraud on the petitioners' part. They had literally relied, albeit mistakenly,
on paragraph 6 (supra) of the contract when it rescinded the contract to sell
extrajudicially and had sold it to a third person.
Petitioner Palay, Inc. is liable
to refund to respondent Dumpit the amount of P13,722.50, with interest at
twelve (12%) p.a. from November 8, 1974, the date of the filing of the
Complaint.
