Abelardo Valarao v. Court of Appeals

Summary

This case involves a conditional sale agreement for real property where the vendors sought to enforce an automatic forfeiture clause after the vendee failed to pay three successive monthly installments. However, the vendee had attempted to tender payment which was refused by the vendors. The Supreme Court ruled that Article 1592 of the Civil Code, requiring judicial or notarial demand for rescission, applies only to contracts of sale and not to contracts to sell where title passes only upon full payment. The Court found that vendors cannot enforce automatic forfeiture when they unjustifiably refuse tender of payment, and applied the Maceda Law (RA 6552) which provides protection to installment buyers. The decision emphasized that contracts to sell are distinct from contracts of sale, and that equity prevents forfeiture when the buyer demonstrates willingness to pay but is prevented by the vendor's refusal to accept payment.