G.R. No.

152346

November 25, 2005

ISAIAS F. FABRIGAS and MARCELINA R. FABRIGAS, petitioners

vs.
SAN FRANCISCO DEL MONTE, INC., respondent
FACTS:
Spouses Fabrigas entered into an agreement denominanted as Contract to Sell No.
2482-V with San Francisco Del Monte, Inc. a parcel of residential lot situated in Barrio Almanza,
Las Pias, Manila for a consideration of P109,200,00. The agreement includes that the spouses
shall pay a downpayment of P30,000 with balance within 10 years in successive instalments of
P1,285.69 and a contract containing an automatic cancellation clause, in the event the
purchaser fail to pay any installments and in the event of forfeiture, all sums of money paid will
be treated as rentals and waives all right to ask or demand the return of the amount and agrees
to peaceably vacate the premises.
Fabrigas paid the downpayment and took possession of the property but failed to pay
any installments. Del Monte sent demand letters on 4 occasions to Fabrigas as final letter sent
on December 7, 1983 having grace period of 15 days and otherwise will forfeit all payments
maid and the rescission however letter was received by Fabrigas on December 23, 1983 but the
contract was considered cancelled by Del Monte but did not notice Fabrigas on the cacellation.
Marcelina Fabrigas continued remitting money to Del Monte until on January 21, 1985,
parties enter into another contract to sell of No. 2491-V but under different terms. Between
March 1985 and January 1986, spouses Fabrigas made irregular payments for the second
contract then on February 3, 1986 Del Monte sent a demand letter to Fabrigas for overdue
account.
A petition for review was made in assailment for the decision made by the Court of
Appeals in CA-G.R. CV No. 45203 and its resolution denying petitioners motion for
reconsideration. In the decision, the spouses Fabrigas, as defendants, considered paid by the
amount of P78,152.00 were ordered (a) to make complete payment under the conditions of
Contract to Sell No. 2491-V dated January 21, 1985 within 20 days from the receipt of the
decision and in the event of failure or refusal, all persons claiming right and possession or
occupation are ordered to vacate and leave the premises of the house and lot, (b) if defendants
chose to surrender possession of the property will be ordered to pay San Francisco, the plaintiff,
P206,223.80 as unpaid installments on the land inclusive of interests (c) ordering defendants to
jointly and severally pay plaintiff the amount of P10,000.00 for attorneys fees and (d) to pay the
costs of suit.
ISSUES:
1. Whether or not Contract to Sell No. 2482-V, the first contract entered into by the
parties, has really been cancelled and no longer valid.

2. Whether or not consent by the husband needed for novation was achieved.
RULINGS:
1.

Yes, Contract to Sell No. 2482-V has really been cancelled and replaced by Contract to

Sell No. 2491-V. It is already novated by the second contract because of the ratification made by
the Fabrigas.
According to the Maceda Law Sec 4, the cancellation of the contract is a two-step
process. First, the seller should extend the buyer a grace period of at least sixty days from the
due date of the instalment . Second, at the end of the grace period, the seller shall furnish the
buyer with a notice of cancellation or demand for rescission through a notarial act, effective
thirty days fro the buyers receipt thereof. The mere notice or letter will not suffice.
Del Monte did not comply with this but applied automatic rescission clause of the
contract, but rescission is not the only mode of extinguishing obligations. In this case Novation
was applied. Novation takes place when an old obligation is terminated by the creation of a new
obligation or when the old obligation subsists to the extent it remains compatible with the
amendatory agreement. Requisites for novation are a previous valid obligation, an agreement of
all parties concerned to a new contract, the extinguishment of the old obligation and the birth of
a valid new obligation. These requisites were complied with by the both parties even though a
question of consent takes place.
2.

Yes, consent for novation was achieved.

On article 172 of the civil code expressly classifies a contract executed by the husband

without the consent of the wife as merely annullable at the instance of the wife. However, there
is no comparable provision covering an instance where the wife alone consented to a contract
involving conjugal property. Art. 168, the wife may, by express authority of the husband
embodied in a public instrument, administer the conjugal partnership property. Art. 169, the wife
may also, my express authority of the husband appearing in a public instrument, administer the
latters estate. Any transaction entered by the wife without the court or the husbands authority is
unenforceable in accordance with Art. 1317.
Being unenforceable, Contract to Sell No. 2491- is susceptible to ratification. In here,
Isaias Fabrigas, the husband continued remitting payments for the satisfaction of the obligation
under Contract to Sell No. 2491-V, constitute ratification of the contract.
Therefore, Contract to Sell No. 2482-V was novated by Contract to Sell No. 2491-V due
to ratification, then the spouses Fabrigas shall follow the decision of the Court of Appeals.