Kapisanan Banahaw v. Juan Dejarme

Summary

The Supreme Court affirmed the trial court's denial of Kapisanan Banahaw, Inc.'s petition to rescind a lease contract with the Dejarmes. The corporation sought rescission claiming defendants defaulted on rental payments, taxes, and property care obligations. The Court found defendants were never actually in default, as the corporation had refused to accept the fourth rental payment on March 10, 1929, excusing any tender requirement. The Court determined rental periods began September 1, not February 20 as plaintiff contended. Significantly, the Court found the lawsuit was retaliatory, arising from defendants' refusal to pay additional usurious charges beyond the stipulated rent. Applying Civil Code provisions on contract rescission, the Court emphasized that rescission requires substantial breaches, not minor defaults, and that courts have discretionary power to allow performance periods rather than permit forfeiture of valuable rights.