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GATCHALIAN REALTY, INC. vs. EVELYN M. ANGELES the contract remains valid and existing.

Thus, the
G.R. No. 202358, November 27, 2013, 711 SCRA 163 complaint for unlawful detainer would be a
violation of the mandate of RA 6552.
FACTS:
Angeles purchased a house and lot under a Contract OPTIMUM DEVELOPMENT BANK vs. SPOUSES
to Sell from Gatchalian payable for a period of ten JOVELLANOS
years. After 48 monthly installment payments, G.R. No. 189145, December 4, 2013, 711 SCRA 548
Angeles failed to satisfy her monthly installments with
Gatchalian. Several demands were made by FACTS:
Gatchalian but the same were continually
disregarded by Angeles. Finally, Gatchalian served Spouses Jovellanos entered into a Contract to Sell
Angeles with a Notice of Notarial Rescission thru with Palmera Homes for the purchase of a residential
registered mail. Consequently, Angeles was furnished house and lot payable for a period of 10 years. Later,
by Gatchalian a demand letter demanding her to pay Palmera Homes assigned all its rights, title and
the outstanding reasonable rentals for her use and interest in the Contract to Sell in favor of Optimum. A
occupation of the house and lot to date and to vacate year later, Optimum issued a Notice of Delinquency
the same. She was informed in said letter that the and Cancellation of Contract to Sell to Spouses
50% refundable amount that she is entitled to has Jovellanos for their failure to pay their monthly
already been deducted with the reasonable value for installments despite several written and verbal
the use of the properties. demands. A month later, a final Demand Letter by
Optimum required Spouses Jovellanos to vacate and
ISSUES: deliver possession of the subject property within
1) Whether there is a valid cancellation of the seven (7) days, which however remained
Contract to Sell unheeded. Optimum instituted the action for
2) Whether Angeles is entitled to the benefit of unlawful detainer within one year from the final
Maceda Law or demand to vacate.
RA 6552
3) Whether Angeles can be ejected for non- ISSUE:
payment of monthly Whether the validity of the cancellation of the
installments. Contract to Sell under RA 6552 lies within the
competence or jurisdiction of the Metropolitan Trial
RULING: Court (MeTC)
1) NO. A valid and effective cancellation under RA
6552 must comply with the mandatory twin RULING:
requirements of a notarized notice of YES. Under RA 6552, the mechanics of cancellation of
cancellation and a refund of the cash surrender Contract to Sell is based on the amount of
value. Although there was a notarial rescission installments already paid by the buyer under the said
sent thru registered mail but it was not contract.
accompanied by the refund of the cash surrender Since Jovellanos had paid less than two years in
value equivalent to 50% of the total payments installments, Section 4 of RA 6552 provides for three
made. For failure to refund the cash surrender (3) requisites before the seller may actually cancel the
value to the defaulting buyer Angeles, Gatchalian subject contract: first, the buyer shall give the buyer
cannot deduct the same for the amount of the a 60-day grace period to be reckoned from the date
rentals due to Gatchalian as there was nothing in the installment became due; second, the seller must
the contract to apply compensation under Art. give the buyer a notice of cancellation/demand for
1279 of the New Civil Code. rescission by notarial act if the buyer fails to pay the
installments due at the expiration of the said grace
2) Angeles is entitled to receive the cash surrender period; and third, the seller may actually cancel the
value equivalent to 50% of the total payments contract only after 30 days from the buyer’s receipt of
made as provided for by Section 3 (b) of RA 6552. the said notice of cancellation/demand for rescission
by notarial act.
3) In the absence of a valid cancellation of the
Contract to Sell between Gatchalian and Angeles,
There was a valid and effective cancellation of the Thus, having consigned a deed of mortgage in favor of
Contract to Sell in accordance with Section 4 of RA respondent bank, petitioners should have foreseen
6552 and since Spouses Jovellanos had already lost that when their principal obligation was not paid
their right to retain possession of the subject property when due, the mortgagee has the right to foreclose
as a consequence of such cancellation, their refusal to the mortgage and to have the property seized and
vacate and turn over possession to Optimum makes sold with a view to applying the proceeds to the
out a valid case for unlawful detainer. payment of the principal obligations.

SEBASTIAN V. BPI FAMILY BANK, INC. The protection of the Realty Installment Buyer
GR 160107, OCT. 22, 2014 Protection Act does not cover a loan extended by the
employer to enable its employee to finance the
FACTS: purchase of a house and lot. The law protects only a
Petitioners Jaime and Evangeline Sebastian were buyer acquiring the property by installment, not a
employees of respondent BPI Family Bank Inc., who borrower whose rights are governed by the terms of
availed of a housing loan from the bank which was a the loan from the employer.
benefit extended to the bank’s employees.
CALIMLIM-CANULLAS V. FORTUN
Their loan was covered by a loan agreement whereby
they agreed that the loan would be payable in 108 FACTS:
equal monthly amortizations and that the monthly Petitioner Mercedes Calimlim-Canullas and Fernando
amortizations would be deducted from Jaime’s Canullas were married in 1962, with 5 children, and
monthly salary. To secure the payment of the loan, were living on a house situated on a land inherited by
they executed a real estate mortgage in favor of the the latter. In 1978, Fernando abandoned his family
respondent bank over a property situated in Bulacan. and lived with Corazon Daguines. In 1980, Fernando
However, within a period of two years, both Jaime sold the house and lot to Daguines, who initiated a
and Evangeline were terminated from employment. complaint for quieting of title. Mercedes resisted,
About a year after their termination from claiming that the house and lot were conjugal
employment, the petitioner spouses received a properties, and the sale was null and void for she had
demand later requiring them to pay their total not consented thereto.
outstanding obligation stating that their entire
outstanding balance had become due and ISSUE:
demandable upon their separation from BPI Family. Whether or not the sale of the lot together with the
In the meantime, BPI Family instituted a petition for house and improvements thereon was valid under
the foreclosure of the real estate mortgage; hence, the circumstances surrounding the transaction
the petitioners filed a complaint for injunction and
damages to prevent the foreclosure of their property. RULING:
The contract of sale was null and void for being
ISSUE: contrary to morals and public policy. The sale was
Whether or not the foreclosure of the petitioners’ made by a husband in favor of a concubine after he
real estate mortgage was premature? had abandoned his family and left the conjugal home
where his wife and children lived and from whence
RULING: they derived their support. That sale was subversive
No, there is valid reason to foreclose the mortgaged of the stability of the family, a basic social institution
property. which public policy cherishes and protects. The law
emphatically prohibits the spouses from selling
The foreclosure of a mortgage is but the necessary property to each other subject to certain exceptions.
consequence of the non-payment of an obligation Similarly, donations between spouses during
secured by the mortgage. Where the parties have marriage are prohibited. And this is so because if
stipulated in their agreement, mortgage contract and transfers or con conveyances between spouses were
promissory note that the mortgagee is authorized to allowed during marriage, that would destroy the
foreclose the mortgage upon the mortgagor's default, system of conjugal partnership, a basic policy in civil
the mortgagee has a clear right to the foreclosure in law. It was also designed to prevent the exercise of
case of the mortgagor's default. undue influence by one spouse over the other, as well
as to protect the institution of marriage, which is the orders. Cruz filed an ex parte motion to admit her
cornerstone of family law. The prohibitions apply to a amended complaint impleading respondent Manuel
couple living as husband and wife without benefit of R. Vizconde as additional defendant and praying that
marriage, otherwise, "the condition of those who the Register of Deeds of QC be ordered to annotate
incurred guilt would turn out to be better than those her notice of lis pendens on Suzara’s title
in legal union." Those provisions are dictated by
public interest and their criterion must be imposed The RTC admitted the amended complaint and
upon the wig of the parties. ordered the Register of Deeds to show cause why it
was refusing to annotate the notice of lis
CRUZ VS CA pendens filed by Cruz. The Register of Deeds filed a
manifestation informing the trial court that the
FACTS: property had been sold by respondent Suzara to his
Gloria R. Cruz is the owner of Lot 10, Blk. 565, PSD- co-respondent Vizconde who was already the
38911 with an area of 747.7 sq. m, together with the registered owner and since Vizconde was not
improvements situated at 22 Bituan St., Bgy. Doña impleaded in the case the notice of lis pendens could
Imelda, QC (TCT No. 242553 in her name). In 1977, not be annotated on his title until the requirements
Cruz and Romeo V. Suzara lived together as husband of law were met and the annotation of the notice
and wife without benefit of marriage. Out of love and judicially ordered.
affection for Suzara, Cruz executed a deed of absolute
sale over Lot 10 in favor of Suzara without any Vizconde answered that there was no privity of
monetary consideration. Suzara registered the contract between him and petitioner. He was a
document in his favor and used the property as purchaser for value in good faith and that the sale
collateral for a bank loan of P350,000.00. He failed to between him and Suzara was executed on long before
pay the loan. After 4 years, the mortgage was the execution of the Affidavit of Adverse Claim. He
foreclosed. contended that the action was barred by laches,
estoppel and prescription.
Cruz paid the bank P40,638.88 to restructure the loan
resulting in the extension of the redemption period to The RTC dismissed the complaint and the
2 years. Without the knowledge of Cruz and before counterclaims as well as the cross claim of
the expiration of the extended period, Suzara Vizconde. It ruled that the sale between Cruz and
redeemed the property. Cruz executed an Affidavit of Suzara was valid with "love, affection and
Adverse Claim to protect her interest. She filed this accommodation" being the consideration for the
with the Register the Deeds of QC asserting that her sale. That Vizconde was an innocent purchaser for
sale in favor of Suzara was null and void for lack of value because at the time he purchased the property
consideration and being contrary to law and public he was unaware of the adverse claim of petitioner. CA
policy. Cruz filed a complaint with the RTC of Manila affirmed the RTC judgment.
against respondent Suzara for quieting of title,
declaration of nullity of documents and damages with ISSUE:
prayer for writ of preliminary injunction. Whether or not the sale between Suzara and
Vizconde could be declared null and void
Suzara’s claims he was already the registered owner
of the property as evidenced by TCT No. 295388, RULING:
having acquired the same from petitioner through a No, the sale cannot be declared null and void.
notarized deed of absolute sale and that the sale was
for a valuable consideration and not tainted with The Court ruled that although under Art. 1490 of the
fraud nor executed under duress. Cruz was estopped NCC, the husband and wife cannot sell property to
from impugning the validity of the sale and one another as a rule which, for policy consideration
questioning his title over the property. and the dictates of morality require that the
prohibition apply to common-law relationships, Cruz
The RTC issued a temporary restraining order can no longer seek reconveyance of the property to
enjoining Suzara, his agents and/or any person or her as it has already been acquired by respondent
persons acting in his behalf, from disposing and/or Vizconde in good faith and for value from her own
encumbering the litigated property until further transferee.
Both lower courts found that at the time respondent
Suzara executed the deed of absolute sale in favor of
respondent Vizconde, which was acknowledged
before a notary public, Suzara was the registered
owner appearing in the certificate of title. When the
sale was executed, nothing was annotated in the
certificate to indicate any adverse claim of a third
person or the fact that the property was the subject
of a pending litigation. It was only after the sale to
respondent Vizconde, that petitioner filed her
adverse claim with the Register of Deeds. Based on
this factual backdrop, which we consider binding
upon this Court, there is no doubt that respondent
Vizconde was a purchaser for value in good faith and
that when he bought the property he had no
knowledge that some other person had a right to or
an adverse interest in the property. As the CA
observed, Vizconde paid a full and fair price for the
property at the time of the purchase and before he
had any notice of petitioner's claim or interest in the
property. For purposes of resolving the present
controversy, the allegation that there was a second
deed of sale executed solely for the purpose of
evading the penalties resulting from late payment of
taxes and registration is immaterial. The fact is,
petitioner herself admits that the actual sale of the
property occurred. A contract of sale is consensual
and is perfected once agreement is reached between
the parties on the subject matter and the
consideration therefor.

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