Case Summary (G.R. No. 230817)
Background of the Dispute
On November 17, 1999, Vive executed a Deed of Sale with NHMFC for foreclosed property, paying an initial downpayment of P4,000,000. Despite this, Vive failed to pay subsequent installments due to unresolved issues regarding the property’s title and classification under the Comprehensive Agrarian Reform Program. NHMFC later rescinded the Deed of Sale citing Vive's non-payment.
Legal Proceedings
Vive filed a complaint declaring the rescission null and requested a suspension of payment due to these issues. The Regional Trial Court (RTC), initially ruled in favor of NHMFC, validating its rescission of the Deed of Sale. Following a motion for reconsideration, a different RTC branch overturned this decision, declaring the rescission void, which NHMFC subsequently contested.
Court Decisions
The Court of Appeals (CA) upheld the RTC's initial validation of NHMFC's rescission, determining that the agreement constituted a contract to sell, thus allowing NHMFC to cancel the contract following Vive’s default. The CA concluded that ownership did not transfer to Vive until full payment was made.
Arguments by the Parties
Vive contended that the transaction constituted a valid contract of sale, arguing it had already acquired ownership. It claimed it was not in default due to a claimed moratorium on payments and that NHMFC had acted in bad faith when it sold the property to Cavacon.
Legal Analysis of Contractual Terms
The court reiterated that a contract to sell retains ownership with the vendor until full payment is made, emphasizing that Vive's failure to pay justified NHMFC’s actions. It rejected Vive’s claims of a moratorium due to the absence of board approval from NHMFC, reinforcing the principle that a corporation can only act through its board.
Applicability of the Maceda Law
Vive sought to invoke the Realty Installment Buyer Protection Act (Maceda Law), arguing that NHMFC’s cancellation failed to meet the Law's required procedures. However, the court determined the Maceda Law is inapplicable here, as it does not cover transactions involving a real estate corporation engaged in commer
...continue readingCase Syllabus (G.R. No. 230817)
Case Background
- The case originated from a Petition for Review on Certiorari filed by Vive Eagle Land, Inc. against the National Home Mortgage Finance Corporation (NHMFC), Joseph Peter S. Sison, and Cavacon Corporation.
- The petition challenged the Decision dated August 23, 2016, and the Resolution dated March 30, 2017, of the Court of Appeals (CA) in CA-G.R. CV No. 105312.
- The CA had previously affirmed the RTC's Decision dated September 18, 2014, and an Order dated June 15, 2015, from the Regional Trial Court (RTC) Branches 138 and 139 in Makati City regarding Civil Case No. 06-308.
Parties Involved
- Petitioner: Vive Eagle Land, Inc., a corporation in the realty business, represented by President Virgilio O. Cervantes.
- Respondents:
- National Home Mortgage Finance Corporation (NHMFC), a government corporation established under Presidential Decree No. 1267.
- Joseph Peter S. Sison, President of NHMFC.
- Cavacon Corporation, a domestic construction company.
Factual Antecedents
- On November 17, 1999, Vive entered into a Deed of Sale of Rights, Interests, and Participation Over Foreclosed Assets with NHMFC, agreeing to a purchase price of P40,000,000 payable in installments.
- Vive made an initial downpayment of P4,000,000 but failed to pay subsequent installments due to various legal issues concerning the property, including land classification and multiple land awards.
- Vive sought a moratorium on payments and a reduction in purchase price due to litigation costs, which NHMFC initially agreed to in principle but required board approval for the waiver of interest and price reduction.
Legal Proceedings
- NHMFC ca