EXCEPTION TO THE RULE OF DELAY

ABELLA v. FRANCISCO

FACTS:

1. Guillermo Francisco (defendant) purchased from the Government on installments, lots 937-945
of the Tala Estate in Novaliches, Caloocan, Rizal.
2. He was in arrears for some of these installments and on October 31, 1928, he signed a
document stating that he received P500 from Julio abella (plaintiff) on account of lots no. 937-
945, containing an area of 221 heactares, at the rate of P100/hectare, the balance of which is
due on or before December 15, of the same year, extendible fifteen days thereafter.
3. On November 13, 1928, abella made another payment of P415.31, upon demand made by
Francisco
4. On December 27, 1928, Francisco being in Cebu wrote a letter to Roman Mabanta, attaching a
power of attorney authorizing him to sign in behalf of the defendant all the documents required
by the Bureau of Lands for the transfer of the lots to the plaintiff.
5. In the same letter, defendant instructed Mabanta to inform the plaintiff that the option would
be considered cancelled, and to return the amount of 915.31, in the event that the plaintiff
failed to pay the remainder of the selling price.
6. On January 3, 1929, Mabanta notified the plaintiif that he had received the power of attorney to
sign the deed of conveyance of the lots to him, and that he was willing to execute the deed of
sale upon payment of the balance due.
7. The plaintiff asked for a few days’ time, but Mabanta only gave him until January 5
8. Plaintiff failed to pay the rest of the price on January 5, but attempted to do so on January 9, but
Mabanta refused to accept it and instead returned by check the sum of P915.31
9. Plaintiff brought an action to compel the defendant to execute the dee of sale upon the receipt
of the balance of the price, and asked that he be judicially declared the owner of said lots, and
that the defendant be ordered to deliver it to him.
10. The CFI absolved the defendant from the complaint, and the plaintiff appealed.

ISSUE:

WoN the time was essential element in the contract, and therefore, the defendant was entitled to
rescind the contract for failure of the plaintiff to pay the price within the specified time.

HELD:

Yes. The defendant is entitled to resolve the contract for failure to pay the price within the time
specified. In holding that the time was an essential element in the contract, the CFI considered that the
agreement in question was an option for the purchase of the lots. The SC, however, was divided on the
question of whether the agreement was an option or a sale. But the SC rules that regardless of whether
it was an option or a sale, having agreed that the selling price would be paid not later than December,
1928, and in view of the fact that the vendor executed the contract to pay off with the proceeds thereof
certain obligations which fell due in the same month of December, the time fixed for the payment of the
selling price was essential in the transaction.