Gatchalian Realty, Inc. vs. Angeles

Facts:

Gatchalian Realty, Inc. v. Evelyn M. Angeles, G.R. No. 202358, November 27, 2013, Supreme Court Second Division, Carpio, J., writing for the Court. The petition challenges the Court of Appeals Decision promulgated 11 November 2011 and Resolution of 19 June 2012 in CA‑G.R. SP No. 105964, which dismissed the unlawful detainer action filed by petitioner Gatchalian Realty, Inc. (GRI) against respondent Evelyn M. Angeles (Angeles).

In December 1994 Angeles entered into two Contracts to Sell with GRI (No. 2271 for the lot at P450,000 and No. 2272 for the house at P750,000). Possession was delivered in 1995, but title remained with GRI until full payment. Angeles paid installments irregularly — 35 installments on the lot and 48 on the house — and thereafter defaulted. GRI served repeated notices and, after what it considered ample grace, caused a notarial rescission dated 11 September 2003 (served, GRI says, on 19 September 2003) and sent a demand letter dated 26 September 2003 demanding payment of alleged rentals and advising that cash‑surrender value had been applied. Angeles sent postal money orders totalling P120,000 which GRI treated as not acceptable as amortizations.

GRI filed an unlawful detainer complaint on 11 November 2003. The Metropolitan Trial Court (MeTC), Branch 79, Las Piñas City, rendered judgment for GRI on 28 February 2006 ordering Angeles to vacate, encashing the postal money orders, and awarding rental arrears (net of a claimed cash surrender value) plus attorney’s fees and costs. Angeles appealed to the Regional Trial Court (RTC), Branch 197. The RTC initially (13 February 2008) set aside the MeTC decision and dismissed the ejectment action, reasoning that cancellation under R.A. No. 6552 (the Maceda Law) had not validly occurred. On reconsideration the RTC (Order of 17 June 2008) concluded GRI had complied with R.A. 6552 by applying the cash surrender value against rentals, modified the MeTC award (fixing monthly rent and deducting cash surrender value), and denied Angeles’s motion for reconsideration on 8 October 2008.

The Court of Appeals reversed the RTC, holding that although Angeles received the notarial rescission notice the actual cancellation did not take place because GRI failed to refund the cash surrender value; the CA thus dismissed the unlawful detainer complaint and denied GRI’s motion for reconsideration (Decision 11 November 2011; Resolution 19 June 2012). GRI filed this Rule 45 petition for review on certiorari with the Supre...(Pro-only)

Issues:

• Did Gatchalian Realty, Inc. validly effect cancellation of Contracts to Sell Nos. 2271 and 2272 in compliance with Section 3 of R.A. No. 6552 (the Maceda Law)?
• Did GRI’s deduction of the cash surrender value from alleged rentals satisfy the statutory requirement of refund so that the cancel...(Pro-only)

Ruling:

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Ratio:

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Doctrine:

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