JESTRA DEVT & MGT CORP. v.

PACIFICO
G.R. No. 167452 | January 30, 2007
FACTS:
Daniel Pacifico signed a Reservation application with Fil-Estate Marketing for the purchase of
a house and lot and paid the reservation fee. The Reservation application contained the
amounts to be paid in installments with interest. Unable to comply with the schedule of
payments, Pacifico requested Jestra (owner and developer of property) to allow him to make
periodic payments which the latter granted. With still a remaining balance of P260,000 on
the down payment, Pacifico and Jestra executed a Contract to Sell over the property. The
said contract was silent on the unsettled balance on the down payment. Pacifico requested
twice for a restructuring of his unsettled obligation which Jestra granted subject to certain
conditions of additional penalties. As compliance to the condition, Pacifico issued 12
postdated checks; however, he was unable to pay so he requested that he be allowed to
dispose the property to recover his interest and he could recover the 12 post dated checks,
which was this time was denied by Jestra. Jestra then sent a notarial notice of cancellation
that they are giving him until a certain date to pay or else the contract will be automatically
cancelled.
Pacifico then filed a complaint before the HLURB claiming that despite his full payment of
the downpayment, Jestra failed to deliver to him the property and instead sold it to another
buyer. HRLURB Arbiter decided in Pacificos favor finding Jestra liable.
The Board of Commissioners of the HLURB only modified the award. The Office of the
President adopted the findings of facts and conclusions of law by the Board thus were
elevated to the CA which likewise affirmed the decision of the OP. Hence, the case at bar.
ISSUE: W/N Pacifico has paid at least 2 years of installments
HELD:
No. Pacifico was able to pay the downpayment in 11 months after the last monthly
installment was due. But he failed to pay at least 2 years of installments therefore he is not
entitled to a refund of the cash surrender value of his payments under Sec. 3 of RA 6552.
What is applicable is Sec 4 which provides that the buyer should be given a grace period of
not less than 60 days and if he should still fail to do so, the seller may cancel the contract
after 30 days from receipt of the buyer of the notice of cancellation. Pacifico admitted that
the under the restructured scheme, the 1st installment on the 70% balance of the purchase
was due on Jan 5, 1998. Although he issued checks to cover for them, the 1st 2 were
dishonored. When he was notified of the dishonor, he took no action hence the 60 day
grace period lapsed. Hence, the cancellation was justified.

SPS. NOYNAY V. CITIHOMES BUILDER AND DEVELOPMENT INC

G.R. No. 204160 | September 22, 2014
FACTS:
On Dec. 29, 2004, Citihomes and Spouses Noynay executed a contract to sell covering the
sale of a house and lot. Under the terms of the contract, the price of the property was fixed
at P915,895, with a downpayment of P183,179, and the remaining balance to be paid in
120 equal monthly installments with an annual interest rate of 21%. Subsequently,
Citihomes executed the Deed of Assignment of Claims and Accountsin favor of UCPB. Under
the said agreement, UCPB purchased from Citihomes various accounts, including the
account of Spouses Noynay, for a consideration of P100,000,000.00. In turn, Citihomes
assigned its rights, titles, interests, and participation in various contracts to sell with its
buyers to UCPB.
In February 2007, Spouses Noynay allegedly started to default in their payments. Months
later, Citihomes decided to declare Spouses Noynay delinquent and to cancel the contract
considering that nine months of agreed amortizations were left unpaid. The notarized
Notice of Delinquency and Cancellation of the Contract to Sell was received by Spouses
Noynay. They were given 30 days within which to pay the arrears and failure to do so would
authorize Citihomes to consider the contract as cancelled. Citihomes sent its final demand
letter asking Spouses Noynay to vacate the premises due to their continued failure to pay
the arrears.
Spouses Noynay insist that by virtue of the assignment of rights which Citihomes executed
in favor of UCPB, Citihomes did not have a cause of action against them because it no
longer had an interest over the subject property. The monthly installments amounting to
three years were already paid, by reason of which, Section 3(b) of the Maceda Law should
apply. This means that for the cancellation to be effective, the cash surrender value should
have been paid first to them by Citihomes. Citihomes counters that it has the right to ask
for the eviction of the petitioners in its capacity as the registered owner despite the
assignment of rights it made to UCPB. It believes that because Spouses Noynay failed to
pay at least 2 years of installments, the cancellation became effective upon the expiration
of the 30-day period following the receipt of the notice of delinquency and cancellation
notice and without the need for the payment of the cash surrender value.
ISSUE: W/N the the cancellation of the contract to sell was valid.
RULING:
No. The Contract to Sell dated December 29, 2004 is enlightening on the matter. The
amount of P183,179, representing full down payment shall be paid upon signing of the
contract. Citihomes claimed that the period of the payment of the amortizations started
from May 31, 2005. As can be gleaned from the contract to sell, however, it appears that
the payment of the down payment started from the signing thereof on December 29, 2004.
Moreover, based on the Statement of Account, dated March 18, 2009, Spouses Noynay
started defaulting from January 8, 2008. This shows that prior to that date, amortizations
covering the 3-year period, which started with the down payment, had been paid. This is
consistent with the admission of Citihomes during the preliminary conference. By its
admission that Spouses Noynay had been paying the amortizations for 3 years, there is no
reason to doubt Spouses Noynay's compliance with the minimum requirement of two years
payment of amortization, entitling them to the payment of the cash surrender value
provided for by law and by the contract to sell.

To reiterate, Section 3(b) of the Maceda Law requires that for an actual cancellation to take
place, the notice of cancellation by notarial act and the full payment of the cash surrender
value must be first received by the buyer. Clearly, no payment of the cash surrender value
was made to Spouses Noynay. Necessarily, no cancellation of the contract to selI could be
considered as validly effected.