G.R. No. 237934 - State Investment Trust, Inc. vs. Carlos Baculo

State Investment Trust, Inc. (SITI), a corporation duly organized under Philippine law, owns two parcels of land in Batasan Hills, Quezon City covered by TCT Nos. RT-49377 and RT-49378.
On March 25, 1997, SITI entered into two Contracts to Sell with respondents Carlos Baculo and his late spouse Victoria Baculo for the subject properties at prices of PHP 2,789,500.00 and PHP 2,754,500.00, respectively.
Downpayments were made but Spouses Baculo only paid eight monthly amortizations for each property and requested payment concessions due to business difficulties.

In November 1997, a reconveyance and nullity complaint was filed by the estate of Martha Hernandez questioning SITI's titles; lis pendens were annotated on the subject properties' titles.
SITI agreed to payment suspensions conditioned on resumption upon favorable resolution of the reconveyance case.
The reconveyance case was dismissed on December 12, 2004; subsequently, SITI demanded resumption of payments.

Spouses Baculo sought further suspension of payments due to clouds on the titles, alleging their counsel’s advice that dismissal was based on technicality.
On November 16, 2005, SITI sent a letter canceling earlier concessions and demanding full payment within five days, threatening rescission and demand to vacate.
In January 2006, SITI reiterated rescission and demanded vacation; Spouses Baculo refused.

SITI filed ejectment before Metropolitan Trial Court (MeTC); Spouses Baculo argued no valid rescission and questioned MeTC jurisdiction.
MeTC ruled for SITI, ordering vacation, payment of rentals, attorney's fees, and costs.
Spouses Baculo appealed; Regional Trial Court (RTC) Branch 221 reversed, citing lack of jurisdiction but assumed the case for rescission.

On October 17, 2014, RTC Branch 96 declared the Contracts to Sell rescinded due to default and non-resumption of payments, ordering Spouses Baculo to vacate.

On March 24, 2017, CA reversed RTC Branch 96, finding no valid rescission due to non-compliance with the notice requirements under Republic Act No. 6552 (Maceda Law).
CA ruled that SITI's cancellation did not comply with the 60-day grace period and the requirement for a notarial notice of cancellation.
CA also declared the unilateral rescission clause in the contracts void insofar as it conflicts with the Maceda Law.

SITI filed this petition alleging Spouses Baculo acted in bad faith and asserting valid rescission based on paragraph 5 of the contracts and SITI's letter of January 4, 2006.
Spouses Baculo contended rescission was void for failure to comply with Maceda Law and justified suspension of payments due to title issues.
SITI further claimed exemption from Maceda Law as an investment house and on commercial use of the properties, a contention raised only before the Supreme Court.

Whether SITI validly rescinded the Contracts to Sell given the procedural and substantive requirements of Republic Act No. 6552.
Whether Spouses Baculo's suspension of payments was justified.
The proper application of monetary and penalty interest rates stipulated in the contract.
Whether SITI is covered by the Maceda Law considering its status and the nature of the properties.