Case Digest (G.R. No. 237934)
Facts:
State Investment Trust, Inc. v. Carlos Baculo and the Heirs of His Deceased Spouse Victoria Baculo, G.R. No. 237934, June 10, 2024, Supreme Court Second Division, Kho, Jr., J., writing for the Court.State Investment Trust, Inc. (SITI) owned two adjacent parcels in Batasan Hills, Quezon City (TCT Nos. RT-49377 and RT-49378). On March 25, 1997, SITI entered into two Contracts to Sell with Carlos and Victoria Baculo for the two lots, each contract providing a downpayment, a three-year (36-month) amortization schedule beginning June 25, 1997, and a conventional interest rate of 19% per annum; the buyers occupied the properties pursuant to the contracts.
In November 1997 the estate of the late Martha Hernandez filed a reconveyance and nullity suit against SITI and the Baculos, resulting in annotations of lis pendens on both TCTs. The Baculos paid only the downpayments and eight monthly amortizations on each contract. After an agreed restructuring (extending amortizations to June 25, 2003), the Baculos defaulted again; SITI initially granted concessions including suspension of amortizations while the reconveyance case was pending. The reconveyance case was ultimately dismissed on procedural grounds and the dismissal became final on December 12, 2004. SITI demanded resumption of payments (February and July 2005), but the Baculos sought further suspension until all clouds on title were finally removed.
SITI replied that the annotations had been cancelled and, after sending a new payment schedule (due October 25, 2005), sent a letter dated November 16, 2005 withdrawing concessions, demanding full payment within five days, and stating that failure would render the contracts rescinded; a January 4, 2006 letter reiterated the rescission and demanded vacation. When the Baculos did not vacate, SITI filed an ejectment complaint in Branch 34, Metropolitan Trial Court (MeTC), Quezon City.
The MeTC (Decision, Nov. 20, 2007) ruled for SITI, ordering ejectment, monthly rental, attorney’s fees and costs, reasoning that the Baculos’ possession was merely toleration and became unlawful after refusal to vacate; it held RA 6552 (Maceda Law) inapplicable because only eight installments had been paid. The Baculos appealed to RTC Branch 221, which reversed the MeTC (Decision, Oct. 30, 2009), finding the case should have been dismissed for lack of jurisdiction as the complaint was essentially for rescission; nevertheless, Branch 221 assumed jurisdiction and allowed further proceedings. After trial, RTC Branch 96 rendered a Decision (Oct. 17, 2014) declaring both Contracts to Sell rescinded and payments forfeited in favor of SITI, ordering return of possession to SITI.
SITI’s opponents appealed to the Court of Appeals (CA). The CA (Decision, March 24, 2017) reversed RTC Branch 96 and dismissed SITI’s complaint, holding that Section 4 of Republic Act No. 6552 (Maceda Law) applied (only eight installments paid), and that SITI failed to comply with the statutory requisites for cancellation because it did not give the required 60‑day grace period nor a...(Pro-only)
Issues:
- Did SITI validly cancel or rescind the Contracts to Sell in compliance with Republic Act No. 6552, Section 4?
- If the purported cancellation was invalid, what is the appropriate judicial relief (including payment, interest, and possession) be...(Pro-only)
Ruling:
- (Pro-only)
Ratio:
- (Pro-only)
Doctrine:
- (Pro-only)