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8 Zulueta V Mariano

1) Petitioner Zulueta entered into a contract to sell property to private respondent Mariano for P75,000 payable over 20 years. Respondent failed to make monthly installment payments. 2) Petitioner filed an ejectment suit in municipal court seeking to rescind the contract and have respondent vacate the property. Respondent argued the municipal court lacked jurisdiction as the case involved contract interpretation. 3) The Supreme Court ruled the municipal court did not have jurisdiction, as the case essentially involved rescission of the contract for violation of terms, which requires contract interpretation. Proof of violation is needed to rescind a contract for real property.

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137 views2 pages

8 Zulueta V Mariano

1) Petitioner Zulueta entered into a contract to sell property to private respondent Mariano for P75,000 payable over 20 years. Respondent failed to make monthly installment payments. 2) Petitioner filed an ejectment suit in municipal court seeking to rescind the contract and have respondent vacate the property. Respondent argued the municipal court lacked jurisdiction as the case involved contract interpretation. 3) The Supreme Court ruled the municipal court did not have jurisdiction, as the case essentially involved rescission of the contract for violation of terms, which requires contract interpretation. Proof of violation is needed to rescind a contract for real property.

Uploaded by

Fritz Sapon
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOC, PDF, TXT or read online on Scribd
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1 | O b l i g a ti o n a n d C o n t r a c t s C a s e D i g e s t s SULAW 2015

ZULUETA VS. MARIANO


G.R. No. L-29360 January 30, 1982
111 SCRA 206

Facts:
Petitioner Zulueta, owner of a house and lot, entered into a “Contract to Sell” for the said
property with private respondent, a movie director. The said property cost P75,000 payable in 20
years with respondent buyer assuming to pay a down payment of P5,000 and a monthly installment
of P630 payable in advance before the 5th day of the corresponding month, starting with December,
1964.
One of their stipulations was that upon failure of the buyer to fulfill any of the conditions
being stipulated, the buyer automatically and irrevocably authorizes owner to recover extra-
judicially, physical possession of the land, building and other improvements, which were the subject
of the said contract, and to take possession also extra-judicially whatever personal properties may be
found within the aforesaid premises from the date of said failure to answer for whatever unfulfilled
monetary obligations buyer may have with owner. Demand was also waived.
On the allegation that private respondent failed to comply with the monthly amortizations
stipulated in the contract, despite demands to pay and to vacate the premises, and that thereby the
contract was converted into one of lease, petitioner commenced an Ejectment suit against respondent
before the Municipal Court of Pasig, praying that judgment be rendered ordering respondent to 1)
vacate the premises; 2) pay petitioner the sum of P11, 751.30 representing respondent’s balance
owing as of May, 1966; 3) pay petitioner the sum of P630 every month after May, 1966, and costs.
Private respondent contended that the Municipal Court had no jurisdiction over the nature of
the action as it involved the interpretation and/or rescission of the contract.

Issue:
Was the action before the Municipal Court essentially one for rescission or annulment of a
contract?

Ruling:
Yes. According to the Supreme Court, “...proof of violation is a condition precedent to
resolution or rescission. It is only when the violation has been established that the contract can be
declared resolved or rescinded. Upon such rescission in turn, hinges a pronouncement that
possession of the realty has become unlawful.”
The Supreme Court, in Nera vs. Vacante (3 SCRA 505), also said, “A violation by a party of
any of the stipulations of a contract on agreement to sell real property would entitle the other party to
resolved or rescind it.”
Also, according to the book of Tolentino, Civil Code of the Phil., Vol. IV, 1962 ed. P. 168,
citing Magdalena Estate vs. Myrick, 71 Phil. 344 (1941), extra-judicial rescission has legal effect
when the parties does not oppose it. If it is objected to, judicial determination of the issue is still
necessary.
With regards to the jurisdictions of inferior courts, the Supreme Court said that the CFI
correctly ruled that the Municipal Court had no jurisdiction over the case and correctly dismissed the
2 | O b l i g a ti o n a n d C o n t r a c t s C a s e D i g e s t s SULAW 2015

appeal. However, the CFI erred in assuming original jurisdiction, in the face of the objection
interposed by petitioner. Section 11, Rule 40, leaves no room for doubt on this point.
Section 11 of Rule 40:
“Section 11. Lack of jurisdiction. A case tried by an inferior court without jurisdiction
over the subject matter shall be dismissed on appeal by the Court of First Instance. But instead of
dismissing the case, the Court of First Instance may try the case on the merits, if the parties therein
file their pleadings and go to trial without any objection to such jurisdiction.”

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