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    Jison vs. CA

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    VEDIA GENON
    This case discusses the doctrine of equitable reduction of penalties in obligations. The petitioners entered into a contract to purchase land, paying installments, but failed to make some payments on time. As a penalty, the monthly payment was increased. Petitioners continued to miss payments. The contract was cancelled when petitioners were delinquent for three months. While the cancellation was valid, the court ruled that forfeiting the entire amount paid of over P47,000 was inequitable given the contract price was only P55,000. The court determined forfeiting 50% of the amount paid, around P23,000, was a fair penalty since the respondents could resell the land to someone else.

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    Jison vs. CA

    Uploaded by

    VEDIA GENON
    80 views1 page
    This case discusses the doctrine of equitable reduction of penalties in obligations. The petitioners entered into a contract to purchase land, paying installments, but failed to make some payments on time. As a penalty, the monthly payment was increased. Petitioners continued to miss payments. The contract was cancelled when petitioners were delinquent for three months. While the cancellation was valid, the court ruled that forfeiting the entire amount paid of over P47,000 was inequitable given the contract price was only P55,000. The court determined forfeiting 50% of the amount paid, around P23,000, was a fair penalty since the respondents could resell the land to someone else.

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    This case discusses the doctrine of equitable reduction of penalties in obligations. The petitioners entered into a contract to purchase land, paying installments, but failed to make some payments on time. As a penalty, the monthly payment was increased. Petitioners continued to miss payments. The contract was cancelled when petitioners were delinquent for three months. While the cancellation was valid, the court ruled that forfeiting the entire amount paid of over P47,000 was inequitable given the contract price was only P55,000. The court determined forfeiting 50% of the amount paid, around P23,000, was a fair penalty since the respondents could resell the land to someone else.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    80 views1 page

    Jison vs. CA

    Uploaded by

    VEDIA GENON
    This case discusses the doctrine of equitable reduction of penalties in obligations. The petitioners entered into a contract to purchase land, paying installments, but failed to make some payments on time. As a penalty, the monthly payment was increased. Petitioners continued to miss payments. The contract was cancelled when petitioners were delinquent for three months. While the cancellation was valid, the court ruled that forfeiting the entire amount paid of over P47,000 was inequitable given the contract price was only P55,000. The court determined forfeiting 50% of the amount paid, around P23,000, was a fair penalty since the respondents could resell the land to someone else.

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    © All Rights Reserved
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    221

    Jison v. CA
    164 SCRA 339
    Cortes, J.

    DOCTRINE OF THE CASE: In obligations with a penal clause, the penalty shall be
    equitably reduced if the obligation has been partly or irregularly performed.

    FACTS: This is a petition for certiorari to review the decision of the Court of Appeals.
    Petitioners spouses Jison entered into a contract to cell with private respondent, Robert
    O. Phillips & Sons, Inc., whereby the latter agreed to sell to the former a lot at a
    subdivision for the agreed price of P55,000.00 with interest at 8% per annum, payable
    on an installment basis. Pursuant to the contract, petitioners paid private respondents a
    down payment and monthly installment from May-October. Thereafter, due to the failure
    of petitioners to build a house as provided in the contract, the stipulated penalty of
    P5.00 per square meter was imposed to the effect that the monthly amortization was
    increased to P707.24. Petitioners failed to pay the monthly installments due on said
    dates although petitioners subsequently paid the amounts due January-March and
    these were accepted by private respondent. Again petitioners failed to pay and private
    respondent called their attention to the fact that their account was four months overdue.
    This letter was followed up by another letter where private respondent reminded
    petitioner of the automatic rescission clause of the contract. Petitioners eventually paid.
    Petitioners again failed to pay the monthly installments due on February-April. Thus, in
    a letter, private respondent returned petitioners’ check and informed them that the
    contract was cancelled when on April petitioners failed to pay the monthly installment
    due, thereby making their account delinquent for three months. Petitioners tendered
    payment for all the installments already due but the tender was refused. Thus,
    petitioners countered by filing a complaint for specific performance with the CFI of Rizal
    and consigning the monthly installments due with the court. CFI ruled against the
    petitioner and ordered forfeiture of the amount of P47,312.64 in favor of the respondent.
    Hence, this petition.

    ISSUE: Whether the forfeiture of the said amount is proper.

    RULING: NO. CA’s decision is affirmed and modified. The rescission is valid however,
    while the resolution of the contract and the forfeiture of the amounts already paid are
    valid and binding upon petitioners, the forfeiture of the amount of P47,312.64, although
    it includes the accumulated fines for petitioners’ failure to construct a house as required
    by the contract, is clearly iniquitous considering that the contract price is only
    P55,000.00. The forfeiture of fifty percent of the amount already paid, or P23,656.32,
    appears to be a fair settlement. The Court gives weight to the fact that although
    petitioners have been delinquent in paying their amortizations several times to the
    prejudice of private respondent, with the cancellation of the contract the possession of
    the lot reverts to private respondent who is free to resell it to another party. Also, had
    R.A. No. 6552 been applicable to the instant case, the same percentage of the amount
    already paid would have been forfeited [Sec. 3(b).]

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