G.R. No. 155409 - Maquilan vs. Maquilan

On November 24, 1969, Francisco and Concepcion Ballado entered into two installment contracts with St. Joseph Realty to purchase Lot 1 (411 sqm) and Lot 2 (402 sqm) in Dadiangas Heights Subdivision, General Santos City, with P500 down payment and monthly amortizations of P107.13 and P97.15 for 180 months.
The contracts provided for automatic rescission if the vendee failed to pay three consecutive installments or breached any term, allowing the vendor to retain all payments as rent and damages.

The Ballado Spouses paid regularly until about 1979 when collector Crisanto Pinili refused further payments on account of a small caretaker’s house erected on the lots; he advised removal and never resumed collection.
On February 17, 1987, the Ballados discovered St. Joseph Realty had rescinded the contracts and sent demand letters to the lot addresses instead of their residence, which they received only after handwritten corrections.

Concepcion Ballado wrote for reconsideration and forwarded a P30,000 check to cover the balance; St. Joseph returned it after six months, claiming inadvertent receipt.
On February 9, 1987, St. Joseph sold the lots to Epifanio Amoguis for higher prices; titles were issued to his sons Gregorio and Tito Amoguis on August 18, 1987, who then removed the Ballados’ fences and trees.

The Ballado Spouses filed a complaint on December 23, 1987, for damages, preliminary and mandatory injunctions, cancellation of titles, and specific performance. St. Joseph Realty answered, denying RTC jurisdiction (proposing HLURB), and the Amoguis Brothers filed cross-claims.
After delays and evidence presentation (receipts, contracts, letters), the RTC ruled for the Ballados: it ordered St. Joseph to accept the P30,000 payment, execute deeds, pay moral and exemplary damages and attorney’s fees, annul the Amoguis titles, refund them with interest, and restore possession to the Ballados.
The Court of Appeals (Sept. 26, 2008) affirmed with modifications—allocating damages solely to St. Joseph, adjusting monetary amounts, and ordering an absolute deed of sale upon full payment—while addressing jurisdiction (HLURB vs. RTC estoppel), evidence admissibility, invalid rescission under the Maceda Law, and Amoguis’ good faith.

Whether the Regional Trial Court’s lack of subject matter jurisdiction was lost by waiver or estoppel.
Whether testimonial and documentary evidence not formally offered may nonetheless be appreciated by the court.
Whether Gregorio and Tito Amoguis are buyers in good faith entitled to preferential rights to the lots.