G.R. No. 202358 – GATCHALIAN REALTY, INC., petitioner, vs. EVELYN M. ANGELES, respondent.
CARPIO, J.
Rule Synopsis
Under the Maceda Law, for the rescission of the contract of sale to be valid, the seller must comply with the twin requirements, i.e. notarial notice of rescission, and refund of the CSV.
Facts
Evelyn Angeles (buyer) purchased a lot and house from Gatchalian Realty, Inc. (GRI; buyer) for P450k and P750k, respectively. Both were payable in installments for 10 years. The buyer eventually defaulted after making 35 and 48 monthly installments, respectively. Despite the seller’s grant of 51 months grace period, and repeated demands, the buyer still failed to make further payments. The seller then sent a notarial notice of cancellation to the buyer, it also demanded payment of rentals from the latter of P 112,304.42. The latter amounts is net of the 50% CSV on the installment payments by the buyer which the seller deducted. The buyer then tried making installment payments via postal money order but the seller refused; it also demanded that the buyers vacate the subject properties, the latter refused.
The seller thus filed an unlawful detainer suit before the MeTC.
The MeTC ruled in favor of GRI, holding the rescission valid. The RTC affirmed with modifications; it ruled that the requirements of Sec. 3 of R.A. No. 6552 of refund of the CSV of the installments made was complied with by the seller’s deduction of such CSV from the rentals due from the buyer. The CA reversed; it held that no valid rescission took place given the seller’s failure to pay the CSV. The SC affirmed with modification. As it held that there was no valid rescission, it gave the buyer the option to 1) pay the outstanding balance, or 2) accept the CSV.
Issue
Was the seller’s cancellation of the contract of sale valid? Stated otherwise, had the seller complied with the requirements under Sec. 3 of R.A. No. 6552 to effect a valid cancellation of the sale?
Ruling and Discussion
No. A valid and effective cancellation under R.A. 6552 must comply with the mandatory twin requirements of a notarized notice of cancellation and a refund of the cash surrender value.
GRI gave the buyer sufficient grace period. The MeTC, RTC and CA all found that the buyer was able to complete 35 months installment on the house, and 48 months installment of the lot. Under Sec. 3 of R.A. No. 6552, the buyer is entitled to 1 month grace period for every year of installment completed. Thus, the buyer was entitled to 2 months and 4 months grace period respectively. And as the seller had granted him 51 months grace, the Court found the seller in compliance, even beyond, the requirement of the law.
GRI duly notified the buyer of the rescission via registered mail. GRI presented the affidavit of its liaison officer Fortunato Gumahad, the registry receipt from the Greenhills Post Office, and the registry return receipt. The latter is prima facie proof of the facts indicated therein, and the buyer failed to adduce controverting proof.
GRI’s failed to actually refund the cash surrender value to the buyer. The cash surrender value of the buyer’s payments on the lot and house amounted to P182,094.48 and P392,053.92, respectively. Legal compensation was not applicable in this case, contrary to MeTC’s ruling. GRI cannot off-set its obligation to pay the CSV of the buyer’s installments with the rentals due from the latter. there was nothing in the contracts which provided for the amount of rentals in case the buyer defaults in her installment payments; the rental amounts weren’t liquidated. Furthermore, GRI merely imposed said rentals (and 10% increase thereon) unilaterally. The ruling in Pilar, cited by GRI, is not applicable since in the latter case, it was the MeTC (not the buyer) who determined the amount of rentals and ordered its offsetting with the CSV due from the seller.
Dispositive
Petition denied, judgment and resolution affirmed with modifications.