Layug v.

IAC
FACTS:
On Oct 4, 1978, Layug entered into a contract to purchase on installments for the
price of Php120,000.00 12 lots of Gabuya payable in 3 yearly payment. Contract
provided also automatic cancellation and forfeiture of installments paid for should
vendee fails to pay the installment.
Petitioner paid the two year installments or paid 8/12 lot but failed on the third and
last payment. Gabuya made several demands but went unheeded. Action for
annulment of contact was brought upon CFI.
RTC ruled against Layug. Case appealed to IAC and the judgment of RTC was
affirmed. Hence this petition. Layug posits that, the rulings in Legarda Hermanos v.
Saldana and Calasanz v. Angeles in which plaintiffs obtained a favorable ruling
because substantial payments have been made prior to default in installments.
Layug invokes that these rulings be applied in his case as such ruling would entitle
him conveyance of at least 8 out 12 lots since he had paid 80,000.00 for two years.
This is based on considerations of justice and equity.
ISSUE:
W/N Layug is correct in his argument relying on the precedent cases of Legarda and
Calasanz?
HELD:
NO. Petitioners contention is bereft of merit. The Court ruled that it cannot apply
the precedent rulings on his favor since such case was decided based on justice and
equity as there was no statute governing the situation at the time. This is not the
case in his petition wherein at the time of the contract was entered into, RA 6552 or
MACEDA LAW was already in force. RA 6552 as applied left Layug with options and
protection for buyers of real estate on installment basis. Having paid 2 years, he is
entitled to a right to refund 50% cash surrender value of the total payments made
and a grace period of 30days to pay the due without interest for every year paid.
But petitioner failed to pay within the 2 months grace period as provided by RA
6552. Thus rescission of contact was upheld and would be effective only upon
receipt from 30 days of notice by a notarial act and upon full payment of cash
surrender value.