C.N. Hodges v. Alberto Granada

Summary

This case involves the rescission of a real estate purchase contract where vendor C.N. Hodges failed to deliver property to purchaser Alberto Granada due to adverse claims by third parties. Granada sought rescission and return of advance payments totaling P2,036.21. The Supreme Court found this was not fraud but non-fulfillment of contractual obligations under Civil Code Articles 1461-1462. Since the purchase and sale contract contained reciprocal obligations and the vendor failed to perform, the purchaser had the right to rescind under Article 1124. Upon rescission under Article 1295, the vendor must return all payments received. The Court modified the lower court's judgment to include legal interest on returned amounts, establishing that when a vendor fails to deliver property, the purchaser may rescind and recover payments with interest.