G.R. No.

204160 September 22, 2014

SPOUSES MICHELLE M. NOYNAY and NOEL S. NOYNAY vs. CITIHOMES BUILDER AND DEVELOPMENT,
INC.
FACTS: Citihomes and Spouses Noynay executed a contract to sell7 covering the sale of a house and lot. Payment
of the price was on instalment basis. Subsequently, Citihomes executed the Deed of Assignment in favor of UCPB.
UCPB purchased from Citihomes various accounts, including the account of Spouses Noynay.
In 2007, Spouses Noynay started to default. Citihomes cancelled the contract. The notarized Notice 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 cancellation. Citihomes sent its final demand letter asking Spouses Noynay to vacate the premises.
Spouses did not heed the demand, forcing Citihomes to file the complaint for unlawful detainer.

ISSUE: whether Citihomes has a cause of action for ejectment against Spouses Noynay

HELD: The exercise of such right to cancel necessarily determines the existence of the right to evict Spouses
Noynay. The existence of the right to evict is the first constitutive element ofthe cause of action in this unlawful
detainer case. Considering,however, that the right to cancel was already assigned prior to the commencement of
this controversy with the execution of the Assignment, its legal consequences cannotbe avoided.
Well-established is the rule that the assignee is deemed subrogated to the rights as well as to the obligations of the
seller/assignor. By virtue of the deed of assignment, the assignee is deemed subrogated to the rights and
obligations of the assignor and is bound by exactly the same conditions as those which bound the assignor. What
can be inferred from here is the effect on the status of the assignor relative to the relations established by a contract
which has been subsequently assigned; that is, the assignor becomes a complete stranger to all the mattersthat
have been conferred to the assignee.

COMMUNITIES CAGAYAN INC. VS SPOUSES NANOL

GR NO. 176791 NOVEMBER 14, 2012
FACTS: Spouses Nanol entered into contract to Sell with Communities Cagayan, Inc., for a house and lot. Spouses
obtained a loan from Capitol Development Bank, a sister company of petitioner, using the property as
collateral. A simulated sale was executed by petitioner in favor of spouses. Titles were transferred in the names
of spouses. Unfortunately, the bank collapsed and closed before it could release the loan. Thus, spouses
entered into another Contract to Sell with petitioner over the same property. This time, spouses availed of
petitioner’s in-house financing. Sometime in 2000, Arsenio demolished the original house and constructed a
three-story house. In 2001, Arsenio died, leaving his wife to pay for the amortizations.

ISSUE: Whether or not respondents are considered builders in good faith entitled to indemnification for necessary
and useful expenses and/or to buy the land

HELD: Yes. As a general rule, Article 448 on builders in good faith does not apply where there is a
contractual relation between the parties, such as in the instant case.
Article 448 applies when the builder believes that he is the owner of the land or that by some title he has
the right to build thereon, or that, at least, he has a claim of title thereto. Concededly, this is not present in
the instant case. The subject property is covered by a Contract to Sell hence ownership still remains with
petitioner being the seller. Nevertheless, there were already instances where this Court applied Article 448
even if the builders do not have a claim of title over the property.

G.R. No. 147695 September 13, 2007

MANUEL C. PAGTALUNAN vs. RUFINA DELA CRUZ VDA. DE MANZANO
FACTS: Patricio Pagtalunan, petitioner’s stepfather, entered into a Contract to Sell with respondent whereby the
former agreed to sell a house and lot. The price is to paid by instalment.
It was stipulated that respondent could immediately occupy the house and lot; that in case of default in the payment
of any of the installments for 90 days after its due date, the contract would be automatically rescinded without need
of judicial declaration, and that all payments made and all improvements done on the premises by respondent would
be considered as rentals for the use and occupation of the property or payment for damages suffered, and
respondent was obliged to peacefully vacate the premises and deliver the possession thereof to the vendor.
Petitioner claimed that respondent paid only P12,950. She allegedly stopped paying without any justification or
explanation.

ISSUE: whether R.A No. 6552 (Maceda Law) is applicable.

HELD: R.A. No. 6552 recognizes in conditional sales of all kinds of real estate (industrial, commercial, residential)
the right of the seller to cancel the contract upon non-payment of an installment by the buyer, which is simply an
event that prevents the obligation of the vendor to convey title from acquiring binding force.
However, the cancellation of the contract by the seller must be in accordance with Sec. 3 (b) of R.A. No. 6552,
which requires a notarial act of rescission and the refund to the buyer of the full payment of the cash surrender value
of the payments on the property. Actual cancellation of the contract takes place after 30 days from receipt by the
buyer of the notice of cancellation or the demand for rescission of the contract by a notarial act and upon full
payment of the cash surrender value to the buyer.
Based on the records of the case, the Contract to Sell was not validly cancelled or rescinded under Sec. 3 (b) of
R.A. No. 6552.

G.R. No. 189145 December 4, 2013

OPTIMUM DEVELOPMENT BANK vs. SPOUSES BENIGNO V. JOVELLANOS and LOURDES R. JOVELLANOS

FACTS: Sps. Jovellanos entered into a Contract to Sell6 with Palmera Homes for the purchase of a residential
house and lot. They took possession of the property upon a down payment. Palmera Homes assigned all its rights,
title and interest in the Contract to Sell in favor of Optimum.
In 2006, Optimum issued a Notice of Delinquency and Cancellation of Contract for Sps. Jovellanos’s failure to pay
their monthly installments despite several written and verbal notices. In a final Demand Letter, Optimum required the
spouses to vacate and deliver possession of the subject property, however, remained unheeded.

ISSUE: whether the Maceda Law is applicable.

HELD: The full payment of the purchase price in a contract to sell is a suspensive condition, the non-fulfillment of
which prevents the prospective seller’s obligation to convey title from becoming effective. Further, it is significant to
note that given that the Contract to Sell in this case is one which has for its object real property to be sold on an
installment basis, the said contract is especially governed by – and thus, must be examined under the provisions of
RA 6552.
Given the nature of the contract of the parties, the respondent court correctly applied RA 6552recognized in
conditional sales of all kinds of real estate (industrial, commercial, residential) the right of the seller to cancel the
contract upon non-payment of an installment by the buyer, which is simply an event that prevents the obligation of
the vendor to convey title from acquiring binding force. It also provides the right of the buyer on installments in case
he defaults in the payment of succeeding instalments.

G.R. No.176289 April 8, 2013

MOLDEX REALTY, INC. vs. FLORA A. SABERON
FACTS: Flora A. Saberon asked Moldex to reserve the lot for her as shown by a Reservation Application. The
payment scheme was on instalment basis. In 1996, Moldex sent Flora notices reminding her to update her account.
Upon inquiry, Flora was shocked to find out that her obligation ballooned up.
Moldex thus suggested to Flora to execute a written authorization for the sale of the subject lot to a new buyer and a
written request for refund so that she can get half of all payments she made. However, Flora never made a written
request for refund.
Moldex sent Flora a Notarized Notice of Cancellation. Flora, on the other hand, filed before the HLURB a
Complaint for the annulment of the contract to sell, recovery of all her payments with interests, damages, and the
cancellation of Moldex’s license to sell.

ISSUE: whether or not Flora is entitled to a 50% refund under the Maceda Law.

HELD: Yes. Under the Maceda Law, the defaulting buyer who has paid at least two years of installments has the
right of either to avail of the grace period to pay or, the cash surrender value of the payments made. Down
payments, deposits or options on the contract shall be included in the computation of the total number of installment
payments made.1âwphi1

It is on record that Flora had already paid more than two years. It is also shown that Flora has defaulted in her
succeeding payments. Thereafter, Moldex sent notices to Flora to update her account but to no avail. She could
thus no longer avail of the option provided in Section 3(a) of the Maceda Law which is to pay her unpaid installments
within the grace period. Besides, Moldex already sent Flora a Notarized Notice. Hence, the only option available is
Section 3(b) whereby the seller, in this case, Moldex shall refund to the buyer, Flora, the cash surrender value of the
payments on the property equivalent to 50% of the total payments made.