- Petitioner
- Vicelet Lalicon
- Respondent
- National Housing Authority
- Citation
- G.R. No. 185440
- Court
- Supreme Court
- Division
- Third Division
- Ponente
- Abad, J.
- Decided
- July 13, 2011
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.
Intellegal Wiki · Key Holding
Affirmed the CA, holding that the buyers violated the five-year resale restriction and that the action to rescind was governed by the ten-year prescriptive period under Article 1144, not the four-year period under Article 1389 for rescissible contracts, with the later buyers found not in good faith due to annotated restrictions; mutual restitution was ordered with 6% interest.
An editorially maintained summary of the rule this Supreme Court decision is cited for — not legal advice.