20.

] Abella vs Francisco 55 Phil 447 (1931)

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 behind in payment for 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 hectares, at the rate of 100/hectare, the balance of which is due on or before
December 15 of the same year, extendible fifteen days thereafter
3. On Novemer 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
5. Mabanta, attaching a power of attorney authorizing him to sign in behalf of the defendant all the
documents required by the Bureau of Land for the transfer of lots to the plaintiff
6. In the same letter, defendant instructed Mabanta to inform the plaintiff that the option would be
considered cancelled, and to return the amount of P915.31, in the event that the plaintiff failed to
pay the remainder of the selling price
7. On January 3, 1929, Mabanta notified the plaintiff 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
8. The plaintiff asked for a few days time, but Mabanta only gave him until January 5
9. 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
10. Plaintiff brought an action to compel the defendant to execute the deed of sale upon 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
11. The CFI absolved the defendant from the complaint, and the plaintiff appealed
ISSUE
WON the time was an essential element in the contract, and therefore, the defendant was entitled to
rescind the contract for failure of plaintiff to pay the price within the time specified
HELD
Yes. The defendant is entitled to resolve the contract for failure to pay the price within the time specified.
Reasoning
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 ruled 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.