Vicelet Lalicon v. National Housing Authority

Summary

The Supreme Court affirmed the Court of Appeals' decision allowing the National Housing Authority to rescind its 1980 land sale to the Alfaro spouses for violating contractual restrictions. The Alfaros had sold the property to their son Victor in 1990, before the five-year prohibition period expired, which was calculated from the mortgage release date in 1991. The Court distinguished between rescission under Articles 1191 and 1381 of the Civil Code, applying the 10-year prescriptive period rather than the 4-year period claimed by defendants. The decision established that subsequent buyers, including the Lalicon sisters and final purchaser Chua, were not in good faith due to annotated title restrictions. The ruling required mutual restitution, with NHA paying back amortizations and improvement values with 6% annual interest, while protecting the government's socialized housing program objectives.