Re: Received three-page arguments (pars. 34-40) by opposing lawyer, Atty.

Britanico

Keidan Landholdings Corp. vs. Hon. Soriano, et. al.

Despite applicability of the Maceda Law R. A.

6552, Petitioners are not entitled to surrender cash
value of fifty percent (50%)

Referring to par. 34 of the Petition, in the same case that the Petitioners cited, Rillo vs. Court of
Appeals, the Supreme Court applied the Maceda Law on the premise that the subject contract
was a contract to sell. Same conclusion may be applied in the present case, however, what the
Petitioner conveniently omitted was the ruling of the Supreme Court in Rillo that since the
buyers failed to make instalments for two years, they are not entitled to the refund of fifty
percent (50%). Petitioners merely paid for a period of twenty (22) months, hence, entitled only to
the 60-day grace period, as provided in Sec. 4 of R. A. 6552, but not to the surrender cash value.

"Sec. 4. x x x the seller shall give the buyer a grace period of not less than sixty
days from the date the installment became due. If the buyer fails to pay the
installments due at the expiration of the grace period, the seller may cancel the
contract after thirty days from receipt by the buyer of the notice of cancellation or
the demand for rescission of the contract by a notarial act.

Petitioner RILLO paid less than two years in installment payments, hence,
he is only entitled to a grace period of not less than sixty (60) days from the due
date within which to make his installment payment. CORB REALTY, on the
otherhand, has the right to cancel the contract after thirty (30) days from receipt
by RILLO of the notice of cancellation. Hence, the respondent court did not err
when it upheld CORB REALTY's right to cancel the subject contract upon
repeated defaults in payment by RILLO.1"

The Memorandum of Agreement (MOA) constituted

Deed of Absolute Sale and not a mere Contract to Sell

In contrast to what the Petitioners claim that the MOA was a contract to sell, it was in truth and
in fact, an absolute sale that transferred the ownership and possession of the subject properties to
the Petitioners. A perusal of the MOA would tell us that:

1 G. R. No. 125347, June 19, 1997,

http://sc.judiciary.gov.ph/jurisprudence/1997/jun1997/125347.htm.
The manner of payment the Seller and the Buyer agreed upon was, partly in cash, partly in
kind and partly by way of an acknowledgment of debt,2 hence the original action for
collection of sum of money, leading to foreclosure of the subject properties, then owned and
transferred to the Petitioners by virtue of the following provisions:

Upon full performance by the BUYER of its obligation described in

3
(a) above, the SELLER shall be bound to do the following:

xxx

iii) to deliver possession of the Pantabangan Property to the BUYER.

In the case Reyes vs. Tuparan, G. R. No. 188064, June 1, 2011, the Supreme Court
distinguished Contract of Sale and Contract to Sell as follows:

A contract of sale is defined in Article 1458 of the Civil Code, thus:

Art. 1458. By the contract of sale, one of the contracting parties obligates
himself to transfer the ownership of and to deliver a determinate thing, and the
other to pay therefor a price certain in money or its equivalent.

xxx

Sale, by its very nature, is a consensual contract because it is perfected by

mere consent. The essential elements of a contract of sale are the following:

2 2. Manner of Payment, page 1, Memorandum of Agreement (MOA) dated January

17, 2003.

3 3. OBLIGATION OF THE BUYER AND SELLERa) page 3 of the MOA, On the part of the
BUYER

For the purposes of the preceding paragraphs, it shall be the responsibility of the BUYERto
deliver to the SELLER through its Chairman and CEO within five (5) days from date hereof
the following documents:

i) Individual Deed of Absolute Sale on the properties referred to in 2.b above;

ii) The Owneres Duplicate copies of TCT No. 111, 173960 and 471676 their
corresponding Tax Declarations and Tax Receipts evidencing payment for the year
2003 all reality taxes due thereon;
iii) Secretarys Certificate authorizing the sale of the above properties;
iv) Cash and the five post-dated checks referred to in 2.a above; and
v) The promissory note referred to in 2.c above.
 a) Consent or meeting of the minds, that is, consent to transfer
ownership in exchange for the price;
b) Determinate subject matter; and
c) Price certain in money or its equivalent.

Under this definition, a Contract to Sell may not be considered as a

Contract of Sale because the first essential element is lacking. In a contract to sell,
the prospective seller explicitly reserves the transfer of title to the prospective
buyer, meaning, the prospective seller does not as yet agree or consent to transfer
ownership of the property subject of the contract to sell until the happening of an
event, which for present purposes we shall take as the full payment of the
purchase price. What the seller agrees or obliges himself to do is to fulfill his
promise to sell the subject property when the entire amount of the purchase price
is delivered to him. In other words, the full payment of the purchase price
partakes of a suspensive condition, the non-fulfillment of which prevents the
obligation to sell from arising and, thus, ownership is retained by the prospective
seller without further remedies by the prospective buyer.

xxx xxx xxx

Stated positively, upon the fulfillment of the suspensive condition which is
the full payment of the purchase price, the prospective sellers obligation to sell the
subject property by entering into a contract of sale with the prospective buyer
becomes demandable as provided in Article 1479 of the Civil Code which states:

Art. 1479. A promise to buy and sell a determinate thing for a price
certain is reciprocally demandable.

An accepted unilateral promise to buy or to sell a determinate thing for a

price certain is binding upon the promissor if the promise is supported by a
consideration distinct from the price.

A contract to sell may thus be defined as a bilateral contract whereby the

prospective seller, while expressly reserving the ownership of the subject property
despite delivery thereof to the prospective buyer, binds himself to sell the said
property exclusively to the prospective buyer upon fulfillment of the condition
agreed upon, that is, full payment of the purchase price.

A contract to sell as defined hereinabove, may not even be considered as a

conditional contract of sale where the seller may likewise reserve title to the
property subject of the sale until the fulfillment of a suspensive condition, because
in a conditional contract of sale, the first element of consent is present, although it
is conditioned upon the happening of a contingent event which may or may not
occur. If the suspensive condition is not fulfilled, the perfection of the contract of
sale is completely abated. However, if the suspensive condition is fulfilled, the
contract of sale is thereby perfected, such that if there had already been previous
delivery of the property subject of the sale to the buyer, ownership thereto
 automatically transfers to the buyer by operation of law without any further
act having to be performed by the seller.

In a contract to sell, upon the fulfillment of the suspensive condition

which is the full payment of the purchase price, ownership will not automatically
transfer to the buyer although the property may have been previously delivered to
him. The prospective seller still has to convey title to the prospective buyer by
entering into a contract of absolute sale.
The present case falls within the definition of a contract of sale where the possession and
ownership of the property was transferred to the buyer, in consideration of money, properties and
debt. The Petitioners cannot now claim that what they entered into was a mere Contract to Sell,
making the non-payment of purchase price a suspensive condition for its perfection, when all
along, they have possession and ownership of the subject property.

Cancellation of the sale requires notarial act

In the case of Sps. Noynay vs. Citihomes Builder and Development, G.R. No. 204160, Sept. 22,
2014, the Supreme Court held that,

the importance of complying with the provisions of the Maceda Law as to the
cancellation of contracts to sell involving realty installment schemes. There it was held that the
cancellation of the contract by the seller must be in accordance with Section 3 (b) of the Maceda
Law, which requires the notarial act of rescission and the refund to the buyer of the full payment
of the cash surrender value of the payments made on the property. The actual cancellation of the
contract takes place after thirty (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 fullpayment of the cash
surrender value to the buyer, to wit: (b) If the contract is cancelled, the seller shall refund to the
buyer the cash surrender value of the payments on the propertyequivalent to fifty percent of the
total payments made and, after five years of installments, an additional five percent every year
but not to exceed ninety percent of the total payments made: Provided, That the actual
cancellation of the contract shall take place after thirty days from receipt by the buyer of
the notice of cancellation or the demand for rescission of the contract bya notarial act and
upon full payment of the cash surrender value to the buyer. (emphasis supplied)

Here, there was no notarial cancellation of the MOA. Neither can the Petitioner insist that
notarial cancellation was required nor that the Petition was for the annulment of the MOA due to
the alleged non-compliance of suspensive condition of payment of the purchase price because as
discussed above, the MOA is a contract of sale. The non-satisfaction of full purchase price
warrants its collection and not the rescission of the contract. To annul a contract cannot be done
unilaterally.4
4 NGEI Multi-Purpose Cooperative vs. Filipinas Palmoil, G. R. No. 184950, Oct.11,
2012.