Case Digest (G.R. No. 141205)
Facts:
Active Realty & Development Corporation owned Town & Country Hills Executive Village in Antipolo, Rizal and entered into a Contract to Sell with Necita G. Daroya on January 2, 1985 for a 515 sq. m. lot for P224,025.00, with a down payment and monthly installments. Daroya fell in arrears for three monthly amortizations, and petitioner issued a notice of cancellation effective thirty days from receipt, but the record did not show when she received the notice; petitioner later refused Daroya’s tender of payment and disclosed that the lot had already been sold to another buyer.
Daroya filed a complaint for specific performance and damages with the Arbitration Branch of the HLURB on August 26, 1991. While the HLURB Arbiter ordered petitioner to refund all payments with interest and attorneys’ fees, the HLURB Board modified the remedy to a half-refund; the Office of the President later affirmed that Maceda Law was not complied with and ordered petitioner to refund the actual value of the lot resold or deliver a substitute lot, with interest, and the Court of Appeals denied petitioner’s Rule 45 petition for review for insufficiency of form and substance and then denied reconsideration on timeliness.
Issues:
- Whether the Court of Appeals erred in denying due course by focusing on procedural form rather than the merits of the Rule 45 petition.
- Whether the Court of Appeals erred in denying reconsideration on the ground of untimely filing.
- Whether petitioner could be compelled to refund the value of the lot or to deliver a substitute lot at the buyer’s option despite the alleged default and attempted cancellation.
Ruling:
On the procedural issues, the Court held that petitioner substantially complied with the requirements for appeal under Rule 43 and that the Court of Appeals likewise erred in finding the motion for reconsideration untimely.
On the substantive issue, the Court ruled for the respondent and held that petitioner failed to effect a valid and effective cancellation under Section 3 of R.A. No. 6552 (Maceda Law); hence, the contract to sell remained valid and subsisting. Because the lot was already sold to another buyer, the Court ordered petitioner to refund P875,000.00 (the actual value of the lot resold) with 12% interest per annum from August 26, 1991 until fully paid, or to deliver a substitute lot at Daroya’s option.
Ratio:
The Court found that the alleged defects were either cured or not fatal: the record showed registry receipts reflecting service and actual receipt by respondents’ counsel; the petition included the material HLURB decisions and Office of the President resolutions sufficient for appellate review; and the lack of initial Board resolution authorizing counsel was ratified by a Secretary’s Certificate. The Court further held that the motion for reconsideration was filed within the period, as shown by the record.
Substantively, the Court emphasized that Maceda Law protects installment buyers and requires twin mandatory requisites for valid cancellation under Section 3(b) of R.A. No. 6552: a notarized notice of cancellation and refund of the cash surrender value after thirty days from receipt (or after demand for rescission by notarial act and full payment of the cash surrender value). The petitioner did not show compliance with these requisites and only offered payment during the HLURB proceedings, which did not cure the illegality of the attempted cancellation; accordingly, petitioner could not forfeit both the lot and the buyer’s payments. Since the lot was already sold, the Court found it equitable to require refund of the actual value of the resold lot, consistent with the buyer’s lost opportunity to pay the balance and complete the sale.
Doctrine:
- Substantial compliance with the procedural requirements for review under Rule 43 warrants the grant of due course, particularly where material records are sufficiently provided for appellate review.
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