Question

Mariano and Juan, both residents of Manila, entered into a contract for the sale of a piece of land located in Cebu City. According to the terms of their agreement, Mariano agreed to sell the land to Juan for the amount of Php 2,000,000. The contract stipulated that the payment of the purchase price will be made in three installments: Php 1,000,000 upon signing of the contract, Php 500,000 after six months, and the balance of Php 500,000 after one year from the signing of the contract.

After receiving the first installment of Php 1,000,000, Mariano decided to cancel the contract and demanded the return of the amount paid. Juan, refusing to return the money, claimed that the contract is binding and enforceable. Mariano argues that the contract is void because it violates the legal period for the second installment payment.

• Based on the Civil Code, Article 13, as amended by Book I, Chapter 8, Section 31 of the Administrative Code of 1987 (E.O. No. 292), discuss the legal periods and their effect and application in this case.