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    Pilipinas Bank v. IAC

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    Airess Canoy Casimero
    This case discusses whether a contract for the sale of land was rescinded due to an automatic rescission clause in the contract. The contract between Hacienda Benito Inc. and Jose and Carmen Diokno for the sale of land included a clause allowing for automatic rescission if the buyers failed to make three consecutive monthly installment payments. While the buyers fell behind on payments, Hacienda sent several notices reminding them of their balances and the buyers made partial payments. When the buyers said they would fully settle their obligation in two years, Hacienda claimed the contract was rescinded due to the automatic rescission clause. However, the Supreme Court found that Hacienda waived their right to automatic rescission by repeatedly extending dead

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    Pilipinas Bank v. IAC

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    Airess Canoy Casimero
    134 views1 page
    This case discusses whether a contract for the sale of land was rescinded due to an automatic rescission clause in the contract. The contract between Hacienda Benito Inc. and Jose and Carmen Diokno for the sale of land included a clause allowing for automatic rescission if the buyers failed to make three consecutive monthly installment payments. While the buyers fell behind on payments, Hacienda sent several notices reminding them of their balances and the buyers made partial payments. When the buyers said they would fully settle their obligation in two years, Hacienda claimed the contract was rescinded due to the automatic rescission clause. However, the Supreme Court found that Hacienda waived their right to automatic rescission by repeatedly extending dead

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    (61) Pilipinas Bank v. IAC

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    This case discusses whether a contract for the sale of land was rescinded due to an automatic rescission clause in the contract. The contract between Hacienda Benito Inc. and Jose and Carmen Diokno for the sale of land included a clause allowing for automatic rescission if the buyers failed to make three consecutive monthly installment payments. While the buyers fell behind on payments, Hacienda sent several notices reminding them of their balances and the buyers made partial payments. When the buyers said they would fully settle their obligation in two years, Hacienda claimed the contract was rescinded due to the automatic rescission clause. However, the Supreme Court found that Hacienda waived their right to automatic rescission by repeatedly extending dead

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    134 views1 page

    Pilipinas Bank v. IAC

    Uploaded by

    Airess Canoy Casimero
    This case discusses whether a contract for the sale of land was rescinded due to an automatic rescission clause in the contract. The contract between Hacienda Benito Inc. and Jose and Carmen Diokno for the sale of land included a clause allowing for automatic rescission if the buyers failed to make three consecutive monthly installment payments. While the buyers fell behind on payments, Hacienda sent several notices reminding them of their balances and the buyers made partial payments. When the buyers said they would fully settle their obligation in two years, Hacienda claimed the contract was rescinded due to the automatic rescission clause. However, the Supreme Court found that Hacienda waived their right to automatic rescission by repeatedly extending dead

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 1

    (61) Pilipinas Bank v. IAC, GR 67881, June 30, 1987 [Per J.

    Paras, Second Division]


    Issue: Wheher or not the Contract to sell was rescinded, under the automatic rescission clause of the
    Contract between the parties
    Digest:
    Hacienda Benito, Inc. (Hacienda) as vendor and Jose W. Diokno and Carmen Diokno (Diokno) as vendees
    executed a Contract to Sell over a parcel of land on monthly installments subject to an automatic rescission
    clause, subjecting the contract to automatic rescission upon failure of the vendee to pay when due, three or
    more consecutive installments as stipulated therein. During the contract, Hacienda sent a series of notices
    to Diokno reminding their arrearages/balances to which they partially complied. As the Dioknos sent a
    letter expressing to fully settle their obligation after two years from the last reminder, Hacienda informed
    them that the contract has been rescinded subject to the automatic rescission clause of their contract, and
    Diokno is liable in default, citing article 1189 of the Civil Code. However, Diokno argues that such clause
    has now been inapplicable due to the waiver of such right after execution of several notices of the obligation.

    I. What have we learned about the topic?

    DOCTRINE: A contractual provision allowing “automatic rescission” (without prior need of judicial
    rescission, resolution and cancellation) is VALID, the remedy of one who feels aggrieved being to go
    to Court for the cancellation of the rescission itself, in case the rescission is found unjustified under the
    circumstances.

    II. What does the case teach us?


    Wheher or not the Contract to sell was rescinded, under the automatic rescission clause of the
    Contract between the parties
    No, the contract has not been rescinded due to the automatic rescission clause. As iterated by the Supreme
    Court in case of Luzon Brokerage Co., Inc. vs. Maritime Building Co., Inc., “Automatic rescission (without
    prior need of judicial rescission, resolution and cancellation) is VALID, the remedy of one who feels
    aggrieved being to go to Court for the cancellation of the rescission itself, in case the rescission is found
    unjustified under the circumstances. Here, it is clear that such rescission is unjustified since Hacienda has
    clearly waived of the stipulated right of automatic rescission, as evidenced by the many notices and
    extensions given to Diokno. There was a clear WAIVER of the stipulated right of "automatic rescission",
    as evidenced by the many extensions granted private respondents by the petitioner. In all these extensions,
    the petitioner never called attention to the proviso on "automatic rescission".

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