Manuel Uy & Sons v. Valbueco

Summary

This case involves a dispute over two conditional deeds of sale executed in 1973 for real estate properties in Teresa, Rizal. Respondent Valbueco, Inc. sought to compel petitioner Manuel Uy & Sons, Inc. to execute final deeds of absolute sale despite failing to pay the full purchase price due in 1974. The Supreme Court reversed the Court of Appeals decision that favored respondent, holding that respondent had constructive notice of the 1978 notarial rescission through petitioner's pleadings in an earlier dismissed case. More importantly, the Court ruled that respondent's action for specific performance was time-barred under Article 1144 of the Civil Code, having been filed 27 years after the cause of action accrued in 1974. The case clarifies the application of R.A. No. 6552 (Maceda Law) to installment buyers who paid less than two years of installments and establishes that prescription can be raised even for the first time on appeal when apparent from the pleadings.