153.

OCENA
Vda. De Mistica v. Naguiat (GR No. 137909, December 11, 2003)

FACTS: Predecessor-in-interest of Petitioner and herein Defendants entered into a

contract to sell in which the latter prayed the initial payment and undertake to pay the
remaining by installment within 10 years subject to 12% interest per annum. Petitioner
filed a complaint for rescission alleging failure and refusal of Defendants to pay the
balance constitutes a violation of the contract which entitles her to rescind the same.
Petitioner argues that period for performance of obligation cannot be extended to 10
years because to do so would convert the obligation to purely potestative.

ISSUE: Whether petitioner may rescind the contract.

RULING: Under Art. 1191 of Civil Code, the right to rescind an obligation is predicated
on violation between parties brought about by breach of faith by one of them.
Rescission, however, is allowed only when the breach is substantial and fundamental to
the fulfillment of the obligation. In this case, no substantial breach – in the Kasulatan, it
was stipulated that payment could be made even after 10 years from execution of
contract, provided they will pay the 12% interest. Civil Code prohibits purely potestative,
suspensive, conditional obligation that depend on the whims of the debtor. Nowhere in
the deed that payment of purchase price is dependent whether respondents want to pay
it or not, the fact that they already made partial payment shows that parties intended to
be bound by the Kasulatan.