FIRST DIVISION

[G.R. No. 141205. May 9, 2002.]

ACTIVE REALTY & DEVELOPMENT CORPORATION, petitioner, vs. NECITA G.
DAROYA, represented by Attorney-In-F!t "#$r%ey Droy-
&'$nones, respondents.
Katigbak Dimailig Anosan and Associates for petitioer.
Viola and Guadiz for pri!ate re"po#et.
"YNOP"I"
$etitioer etere# ito a %otra&t to Se'' (it) re"po#et, ()ere*y t)e 'atter a+ree# to *,y a 'ot i
petitioer-" ",*#i!i"io. S,*"e.,et'y, petitioer "et re"po#et a oti&e of &a&e''atio of t)eir
&otra&t to "e'' a" a re",'t of re"po#et-" #efa,'t to pay t)ree /01 2ot)'y a2orti3atio". Re"po#et
4'e# a &o2p'ait a+ai"t petitioer *efore t)e 5r*itratio 6ra&) of t)e 7o,"i+ a# 8a# 9"e
Re+,'atory 6oar# /789R61 to &o2pe' t)e petitioer to e:e&,te a 4a' Dee# of 5*"o',te Sa'e i
re"po#et-" fa!or after ")e pay ay *a'a&e t)at 2ay "ti'' *e #,e fro2 )er. T)e 789R6 5r*iter fo,#
for t)e re"po#et. O appea', t)e 789R6 6oar# of %o22i""ioer" "et a"i#e t)e 5r*iter-" #e&i"io a#
or#ere# petitioer to ref,# to re"po#et oe )a'f of t)e tota' a2o,t ")e )a# pai#. Re"po#et
appea'e# to t)e O;&e of t)e $re"i#et ()i&) 2o#i4e# t)e #e&i"io of t)e 789R6 a" it (a" ot i a&&or#
(it) t)e pro!i"io" of t)e Ma&e#a 8a(. $etitioer appea'e# t)e #e&i"io to t)e %o,rt of 5ppea'" ()i&)
(a" #eie# #,e &o,r"e for i",;&ie&y i for2 a# ",*"ta&e. 7e&e, t)i" petitio.
T)e S,pre2e %o,rt r,'e# t)at i #eyi+ #,e &o,r"e to t)e petitio, t)e appe''ate &o,rt +a!e pre2i,2
to for2 a# fai'e# to &o"i#er t)e i2portat ri+)t" of t)e partie" i t)e &a"e at *ar. 5t t)e !ery 'ea"t,
petitioer ",*"tatia''y &o2p'ie# (it) t)e pro&e#,ra' re.,ire2et" for appea', )e&e, it i" *e"t to +i!e
#,e &o,r"e to t)e petitio at *ar to &'arify t)e ri+)t" a# #,tie" of a *,yer i &otra&t" to "e'' rea'
e"tate o i"ta''2et *a"i".
T)e S,pre2e %o,rt a;r2e# t)e #e&i"io of t)e O;&e of t)e $re"i#et. T)e &otra&t to "e'' i t)e &a"e
at *ar i" +o!ere# *y Rep,*'i& 5&t No. <552 = >T)e Rea'ty I"ta''2et 6,yer $rote&tio 5&t,> or 2ore
pop,'ar'y ?o( a" t)e Ma&e#a 8a(. T)e re&or#" &'ear'y ")o(e# t)at t)e petitioer fai'e# to &o2p'y
(it) t)e 2a#atory t(i re.,ire2et" for a !a'i# a# e@e&ti!e &a&e''atio ,#er t)e 'a(, i.e., )e fai'e#
to "e# a otari3e# oti&e of &a&e''atio a# &a") ",rre#er !a',e. T),", for fai',re to &a&e' t)e
&otra&t i a&&or#a&e (it) t)e pro&e#,re pro!i#e# *y 'a(, t)e %o,rt )e'# t)at t)e &otra&t to "e''
*et(ee t)e partie" re2aie# !a'i# a# ",*"i"ti+. Fo''o(i+ Se&tio 0/a1 of R.5. No. <552, re"po#et
)a" t)e ri+)t to o@er to pay for t)e *a'a&e of t)e p,r&)a"e pri&e, (it)o,t itere"t, ()i&) ")e #i# i t)i"
&a"e. Or#iari'y, petitioer (o,'# )a!e o ot)er re&o,r"e *,t to a&&ept pay2et. 7o(e!er, re"po#et
&a o 'o+er e:er&i"e t)i" ri+)t a" t)e ",*Ae&t 'ot (a" a'rea#y "o'# *y petitioer to aot)er *,yer. 5"
re"po#et 'o"t )er &)a&e to pay for t)e *a'a&e, it i" o'y e.,ita*'e t)at t)e petitioer *e or#ere# to
ref,# to re"po#et t)e a&t,a' !a',e of t)e 'ot re"o'# or to #e'i!er a ",*"tit,te 'ot at t)e optio of t)e
re"po#et.
"YLLA()"
1.%IVI8 85BC S58DSC RD$968I% 5%T NO. <552 /T7D RD58TE INST588MDNT 69EDR $ROTD%TION 5%T1C
$ROTD%TS 69EDRS OF RD58 DST5TD ON INST588MDNT 65SIS 5G5INST ONDRO9S 5ND O$$RDSSIVD
%ONDITIONS. = T)e &otra&t to "e'' i t)e &a"e at *ar i" +o!ere# *y Rep,*'i& 5&t No. <552 = >T)e
Rea'ty I"ta''2et 6,yer $rote&tio 5&t,> or 2ore pop,'ar'y ?o( a" t)e Ma&e#a 8a( = ()i&) &a2e
ito e@e&t i Septe2*er 19F2. It" #e&'are# p,*'i& po'i&y i" to prote&t *,yer" of rea' e"tate o
i"ta''2et *a"i" a+ai"t oero," a# oppre""i!e &o#itio".. T)e 'a( "ee?" to a##re"" t)e a&,te
)o,"i+ ")orta+e pro*'e2 i o,r &o,try t)at )a" pro2pte# t)o,"a#" of 2i##'e a# 'o(er &'a""
*,yer" of )o,"e", 'ot" a# &o#o2ii,2 ,it" to eter ito a'' "ort" of &otra&t" (it) pri!ate )o,"i+
#e!e'oper" i!o'!i+ i"ta''2et "&)e2e". . . . To )e'p e"pe&ia''y t)e 'o( i&o2e 'ot *,yer", t)e
'e+i"'at,re ea&te# R.5. No. <552 #e'ieati+ t)e ri+)t" a# re2e#ie" of 'ot *,yer" a# prote&t t)e2
fro2 oeG"i#e# a# peri&io," &otra&t "tip,'atio".
2.ID.C ID.C ID.C M5ND5TORE TBIN RDH9IRDMDNTS FOR V58ID 5ND DFFD%TIVD %5N%D885TION OF
%ONTR5%T 9NDDR T7D 85BC NOT $RDSDNT IN %5SD 5T 65R. = $etitioer ref,"e# to a&&ept
re"po#et-" ",*"e.,et te#er of pay2et of t)e o,t"ta#i+ *a'a&e a''e+i+ t)at it )a" a'rea#y
&a&e''e# t)e &otra&t a# "o'# t)e ",*Ae&t 'ot to aot)er *,yer. 7o(e!er, t)e re&or#" &'ear'y ")o( t)at
t)e petitioer fai'e# to &o2p'y (it) t)e mandatory twin requirements for a !a'i# a# e@e&ti!e
&a&e''atio ,#er t)e 'a(,i.e., )e fai'e# to "e# a otari3e# oti&e of &a&e''atio a# ref,# t)e &a")
",rre#er !a',e. 5t o ti2e, fro2 t)e #ate it +a!e a oti&e of &a&e''atio ,p to t)e ti2e i22e#iate'y
*efore t)e re"po#et 4'e# t)e &a"e a+ai"t petitioer, #i# t)e 'atter e:ert e@ort to pay t)e &a")
",rre#er !a',e.
D E C I " I O N
P)NO, J pI
T)i" i" a petitio for re!ie( o certiorari ,#er R,'e 45 of t)e Re!i"e# R,'e" of %o,rt ()i&) "ee?" to
re!er"e a# "et a"i#e t)e Re"o',tio of t)e %o,rt of 5ppea'", #ate# 5,+,"t 0, 1999, #eyi+ #,e &o,r"e
to petitioer-" appea' for i",;&ie&y of for2 a# ",*"ta&e.
$etitioer 5%TIVD RD58TE J DDVD8O$MDNT %OR$OR5TION i" t)e o(er a# #e!e'oper of To( J
%o,try 7i''" D:e&,ti!e Vi''a+e i 5tipo'o, Ri3a'. O Ka,ary 2, 19L5, it etere# ito a %otra&t to
Se'' * (it) re"po#et ND%IT5 D5ROE5, a &otra&t (or?er i t)e Mi##'e Da"t, ()ere*y t)e 'atter a+ree#
to *,y a 515 ".. 2. 'ot for $224,025.00 i petitioer-" ",*#i!i"io. SI%aD5
T)e &otra&t to "e'' "tip,'ate# t)at t)e re"po#et ")a'' pay t)e iitia' a2o,t of $50,F<<.00 ,po
e:e&,tio of t)e &otra&t a# t)e *a'a&e of $1F0,259.00 i "i:ty /<01 2ot)'y i"ta''2et" of
$4,L90.05. 5##i+ t)e #o( pay2et a# i"ta''2et pay2et", it (o,'# appear t)at t)e tota' a2o,t
i" P3!"3!#.$$, a 4+,re )i+)er t)a t)at "tate# a" t)e &otra&t pri&e.
O May 5, 19L9, petitioer a&&epte# re"po#et-" a2orti3atio i t)e a2o,t of $40,000.00. 6y 5,+,"t
L, 19L9, re"po#et (a" in de%ault o% P&'"()(.)' representing t*ree +3, mont*ly amortizations.
Petitioner sent respondent a notice o% cancellation 2 o% t*eir contract to sell, to ta?e e@e&t t)irty /001
#ay" fro2 re&eipt of t)e 'etter. It #oe" ot appear fro2 t)e re&or#", )o(e!er, ()e re"po#et re&ei!e#
t)e 'etter. Noet)e'e"", ()e re"po#et o@ere# to pay for t)e *a'a&e of t)e &otra&t pri&e, petitioer
ref,"e# a" it )a" a''e+e#'y "o'# t)e 'ot to aot)er *,yer.
O 5,+,"t 2<, 1991, re"po#et 4'e# a &o2p'ait for "pe&i4& perfor2a&e a# #a2a+e" + a+ai"t
petitioer *efore t)e 5r*itratio 6ra&) of t)e 7o,"i+ a# 8a# 9"e Re+,'atory 6oar# /789R61. It
"o,+)t to &o2pe' t)e petitioer to e:e&,te a 4a' Dee# of 5*"o',te Sa'e i re"po#et-" fa!or after ")e
pay" ay *a'a&e t)at 2ay "ti'' *e #,e fro2 )er. Re"po#et &'ai2e# t)at ")e i" etit'e# to t)e 4a'
#ee# of "a'e after ")e o@ere# to pay t)e *a'a&e of $24,04L.4F, &o"i#eri+ t)at s*e *as already paid
t*e total sum o% P3&")&!.#!" w*ic* amount is P-$")3'.#! more t*an t*e total contract price o%
P(("$('.$$.
O K,e 14, 1990, 789R6 5r*iter 5'fre#o M. Ta II fo,# for t)e re"po#et. 7e r,'e# t)at t)e
&a&e''atio of t)e &otra&t to "e'' (a" !oi# a" petitioer fai'e# to pay t)e &a") ",rre#er !a',e to
re"po#et a" 2a#ate# *y 'a(. 7o(e!er, a" t)e ",*Ae&t 'ot (a" a'rea#y "o'# to a t)ir# party a# t)e
re"po#et )a# a+ree# to a f,'' ref,# of )er i"ta''2et pay2et", petitioer (a" or#ere# to re%und to
respondent all *er payments in t*e amount o% P3&")&!.#$" wit* &(. interest per annum %rom August
(!" &--& +t*e date o% t*e /ling o% t*e complaint, until %ully paid and to pay P&$"$$$.$$ as attorney0s
%ees. ,
O appea', t)e 789R6 1oard o% 2ommissioners "et a"i#e t)e 5r*iter-" De&i"io. T)e 6oar# ref,"e# to
app'y t)e re2e#ie" pro!i#e# ,#er t)e Ma&e#a 8a( a# i"tea# #ee2e# it 4t to for2,'ate a
>e.,ita*'e> "o',tio to t)e &a"e. It r,'e# t)at, a" *ot) partie" (ere at fa,'t, i.e., re"po#et i&,rre# i
#e'ay i )er i"ta''2et pay2et" a# re"po#et fai'e# to "e# a otari3e# oti&e of
&a&e''atio, petitioner was ordered to re%und to t*e respondent one *al% o% t*e total amount s*e *as
paid or P&'#"$).3', ()i&) (a" a''e+e#'y a?i to t)e re2e#y pro!i#e# ,#er t)e Ma&e#a 8a(. -
3espondent appealed to t*e 45ce o% t*e President. O K,e 2, 199L, t)e %)ief $re"i#etia' %o,"e'
Reato %. %oroa, a&ti+ *y a,t)ority of t)e $re"i#et, modi/ed t*e Decision o% t*e 67831 a" )e fo,#
t)at it (a" ot i a&&or# (it) t)e pro!i"io" of t)e Ma&e#a 8a(. 7e )e'# t)at a" petitioer #i# ot
&o2p'y (it) t)e 'e+a' re.,i"ite" for a !a'i# &a&e''atio of t)e &otra&t, t)e &otra&t to "e'' *et(ee t)e
partie" ",*"i"te# a# &o&',#e# t)at re"po#et (a" etit'e# to t)e 'ot after pay2et of )er
o,t"ta#i+ *a'a&e. 7o(e!er, a" t)e petitioer #i"&'o"e# t)at t)e 'ot (a" a'rea#y "o'# to aot)er
per"o a# t)at t)e a&t,a' !a',e of t)e 'ot a" of t)e #ate of t)e &otra&t (a" $1,F00.00 per ".,are
2eter, petitioner was ordered to re%und to t*e respondent t*e amount o% P)#'"$$$.$$" t*e true and
actual 9alue o% t*e lot as o% t*e date o% t*e contract" wit* interest at &(. per annum computed %rom
August (!" &--& until %ully paid" or to deli9er a substitute lot at t*e c*oice o% respondent. .
9po #eia' of it" 2otio for re&o"i#eratio, petitioer a""ai'e# t)e De&i"io i t)e %o,rt of 5ppea'".
7o(e!er, it" petitio for re!ie( / (a" #eie# #,e &o,r"e for i",;&ie&y i for2 a#
",*"ta&e, 0 *e&a,"eI 11 o a;#a!it of "er!i&e (a" atta&)e# to t)e petitioC 21 e:&ept for &erti4e# tr,e
&opie" of t)e #e&i"io a# re"o',tio of t)e O;&e of t)e $re"i#et, o ot)er 2ateria' portio" of t)e
re&or#, a" (o,'# ",pport t)e a''e+atio" i t)e petitio, (ere atta&)e#C a#, 01 t)e &erti4&atio of
for,2G")oppi+ (a" "i+e# *y t)e )ea# &o,"e' a# !i&eGpre"i#et of t)e petitioer &orporatio ()o
(a" ot a,t)ori3e# *y a 6oar# Re"o',tio to repre"et petitioer.

$etitioer 2o!e# for re&o"i#eratio. T)e %o,rt of 5ppea'" #eie# it o a etire'y e( +ro,#, i.e., for
,ti2e'y 4'i+ of t)e petitio for re!ie(. 1
$etitioer o( i2p,+" t)e #e&i"io of t)e %o,rt of 5ppea'" a# rai"e" t)e fo''o(i+ pro&e#,ra' i"",e"I
I
T7D 7ONOR568D %O9RT OF 5$$D58S GROSS8E DRRDD IN RD8EING TOO M9%7 ON FORM
R5T7DR T75N ON T7D MDRITS OF T7D $DTITION T7DRD6E DDNEING $DTITIONDR OF ITS
RIG7T TO D9D $RO%DSS.
II
T7D 7ONOR568D %O9RT OF 5$$D58S 5N%7ORDD T7D DDNI58 OF $DTITIONDR-S
MOTION FOR RD%ONSIDDR5TION ON IN%ONSISTDNT 5ND %ONF8I%TING R98INGS NOT
6ORND 6E T7D F5%TS 5ND T7D RD%ORDS OF T7D %5SD.
O t)e pro&e#,ra' poit" rai"e#, (e 4# for t)e petitioer.
O,r per,"a' of t)e re&or# re!ea'" t)at petitioer ",*"tatia''y &o2p'ie# (it) t)e for2a' re.,ire2et" of
R,'e 40 of t)e R,'e" of %o,rt. *2 :irst, a" to t)e non;attac*ment o% t*e a5da9it o% ser9ice, t)e re&or#"
*ear t)at t)e petitio (a" a&&o2paie# *y t)e ori+ia' re+i"try re&eipt" i"",e# *y t)e po"t o;&e,
")o(i+ t)at t)e petitio a# it" ae:e" (ere "er!e# ,po t)e partie". Moreo!er, re"po#et-"
&o,"e' of re&or#, 5tty. Ser+io G,a#i3, a&t,a''y re&ei!e# a &opy of t)e petitio. ** <econd, petitioer
'i?e(i"e &o2p'ie# (it) Se&tio < /&1 of R,'e 40 re.,iri+ t)e ",*2i""io of &opie" of t)e a(ar#,
A,#+2et, 4a' or#er a# re"o',tio appea'e# fro2. It" petitio (a" a&&o2paie# *y t)e #,p'i&ate
ori+ia' of t)e appea'e# De&i"io of t)e %)ief $re"i#etia' 8e+a' %o,"e' a# )i" Re"o',tio #eyi+
petitioer-" 2otio for re&o"i#eratio, t)e De&i"io of t)e 789R6 6oar# of %o22i""ioer" a# t)at of
t)e 789R6 ar*iter. 5 per,"a' of t)e"e #o&,2et" (i'' re!ea' t)at t)ey &otaie# a'' t)e re'e!at fa&t" of
t)e &a"e fro2 ()i&) t)e appe''ate *o#y &a for2 it" o( #e&i"io. It" fai',re to ",*2it t)e ot)er
#o&,2et", 'i?e t)e %o2p'ait, 5"(er, $o"itio $aper" a# 5ppea' Me2ora#a of t)e partie" *efore
t)e 789R6, (a" #,e to t)e ref,"a' of t)e O;&e of t)e $re"i#et to +i!e t)e2 a &erti4e# tr,e &opy of
t)e"e #o&,2et" ()i&) (ere ",*2itte# (it) "ai# O;&e. =*ird, a" to t)e 'a&? of 6oar# Re"o',tio *y
petitioer &orporatio a,t)ori3i+ 5tty. Ree Mati+*a?, it" %)ief 8e+a' %o,"e' a# Vi&eG$re"i#et for
8e+a' 5@air", to repre"et it i t)e 4'i+ of t)e appea', petitioer a#2it" t)at t)i" (a" #,e to it" )oe"t
*e'ief t)at ",&) a,t)ority i" ot re.,ire# a" it (a" ot 2etioe# i Se&tio </&1 of R,'e 40. *3 To 2a?e
,p for ",&) o2i""io, petitioer ",*2itte# a Se&retary-" %erti4&ate *+ &o4r2i+ a# ratifyi+ t)e
a,t)ority of 5tty. Mati+*a? to repre"et petitioer. :inally, (e 4# t)at t)e %o,rt of 5ppea'" erre# i
#eyi+ petitioer-" 2otio for re&o"i#eratio #,e to ,ti2e'y 4'i+ a" t)e re&or#" &'ear'y ")o( t)at it
(a" 4'e# o K,e 25, 1999, a #ay *efore t)e e:piratio of t)e perio# to appea' +rate# *y t)e %o,rt of
5ppea'". *,
I #eyi+ #,e &o,r"e to t)e petitio, t)e appe''ate &o,rt +a!e pre2i,2 to for2 a# fai'e# to &o"i#er
t)e i2portat ri+)t" of t)e partie" i t)e &a"e at *ar. *- 5t t)e !ery 'ea"t, petitioer substantially
complied (it) t)e pro&e#,ra' re.,ire2et" for appea', )e&e, it i" *e"t to +i!e #,e &o,r"e to t)e
petitio at *ar to &'arify t)e ri+)t" a# #,tie" of a *,yer i &otra&t" to "e'' rea' e"tate o i"ta''2et
*a"i".
T)e i"",e to *e re"o'!e# i" ()et)er or ot t)e petitioer &a *e &o2pe''e# to ref,# to t)e re"po#et
t)e !a',e of t)e 'ot or to #e'i!er a ",*"tit,te 'ot at re"po#et-" optio.
Be 4# for t)e re"po#et a# r,'e i t)e a;r2ati!e.
T)e &otra&t to "e'' i t)e &a"e at *ar i" +o!ere# *y Rep,*'i& 5&t No. <552 = >T)e Rea'ty I"ta''2et
6,yer $rote&tio 5&t,> or 2ore pop,'ar'y ?o( a" t)e Ma&e#a 8a( = ()i&) &a2e ito e@e&t i
Septe2*er 19F2. It" #e&'are# p,*'i& po'i&y i" to prote&t *,yer" of rea' e"tate o i"ta''2et *a"i"
a+ai"t oero," a# oppre""i!e &o#itio". *. T)e 'a( "ee?" to a##re"" t)e a&,te )o,"i+ ")orta+e
pro*'e2 i o,r &o,try t)at )a" pro2pte# t)o,"a#" of 2i##'e a# 'o(er &'a"" *,yer" of )o,"e", 'ot"
a# &o#o2ii,2 ,it" to eter ito a'' "ort" of &otra&t" (it) pri!ate )o,"i+ #e!e'oper" i!o'!i+
i"ta''2et "&)e2e". 8ot *,yer", 2o"t'y 'o( i&o2e earer" ea+er to a&.,ire a 'ot ,po ()i&) to *,i'#
t)eir )o2e", rea#i'y a;: t)eir "i+at,re" o t)e"e &otra&t", (it)o,t a opport,ity to .,e"tio t)e
oero," pro!i"io" t)erei a" t)e &otra&t i" o@ere# to t)e2 o a >ta?e it or 'ea!e it> *a"i". */ Mo"t of
t)e"e &otra&t" of a#)e"io, #ra( e:&',"i!e'y *y t)e #e!e'oper", etrap io&et *,yer" *y re.,iri+
&a") #epo"it" for re"er!atio a+ree2et" ()i&) ofteti2e" i&',#e, i 4e prit, oero," #efa,'t
&'a,"e" ()ere a'' t)e i"ta''2et pay2et" 2a#e (i'' *e forfeite# ,po fai',re to pay ay i"ta''2et
#,e e!e if t)e *,yer" )a# 2a#e pay2et" for "e!era' year". *0 Rea' e"tate #e!e'oper" t)," eAoy a
,e&e""ary a#!ata+e o!er 'ot *,yer" ()o t)ey ofte e:p'oit (it) ii.,ito," re",'t". T)ey +et to
forfeit a'' t)e i"ta''2et pay2et" of #efa,'ti+ *,yer" a# re"e'' t)e "a2e 'ot to aot)er *,yer (it)
t)e "a2e e:i+et &o#itio". To )e'p e"pe&ia''y t)e 'o( i&o2e 'ot *,yer", t)e 'e+i"'at,re ea&te# R.5.
No. <552 #e'ieati+ t)e ri+)t" a# re2e#ie" of 'ot *,yer" a# prote&t t)e2 fro2 oeG"i#e# a#
peri&io," &otra&t "tip,'atio".
More "pe&i4&a''y, Se&tio 0 of R.5. No. <552 pro!i#e# for t)e ri+)t" of t)e *,yer i &a"e of #efa,'t i t)e
pay2et of ",&&ee#i+ i"ta''2et", ()ere )e )a" a'rea#y pai# at 'ea"t t(o /21 year" of i"ta''2et",
t),"I
>/a1=o pay" wit*out additional interest" t*e unpaid installments due (it)i t)e tota'
+ra&e perio# eare# *y )i2, ()i&) i" )ere*y 4:e# at t)e rate of oe 2ot)
+ra&e perio# for e!ery oe year of i"ta''2et pay2et" 2a#eC . . .
/*1If t)e &otra&t i" &a&e''e#, t)e "e''er ")a'' ref,# to t)e *,yer t)e &a") ",rre#er
!a',e of t)e pay2et" o t)e property e.,i!a'et to 4fty per &et of t)e tota'
pay2et" 2a#eC pro!i#e#, t)at t)e a&t,a' cancellation o% t*e contract s*all take
place a%ter t)irty #ay" fro2 re&eipt *y t)e *,yer of t)e notice o% cancellation or
t*e demand %or rescission o% t*e contract by a notarial act and upon %ull
payment o% t*e cas* surrender 9alue to t*e buyer.> S%aT5&
I t)i" &a"e, respondent *as already paid in %our +, years a total o% P3&")!$.#! or P-$")3'.#! more
t*an t*e contract price o% P(("$3'.$$. I 5pri' 19L9, petitioer #e&i#e# to &a&e' t)e &otra&t ()e
t)e re"po#et i&,rre# i delay in t*e payment o% P&'"()(.)'" representing t*ree +3, mont*ly
amortizations. $etitioer ref,"e# to a&&ept re"po#et-" ",*"e.,et te#er of pay2et of t)e
o,t"ta#i+ *a'a&e a''e+i+ t)at it )a" a'rea#y &a&e''e# t)e &otra&t a# "o'# t)e ",*Ae&t 'ot to
aot)er *,yer. 7o(e!er, t)e re&or#" &'ear'y ")o( t)at t)e petitioer fai'e# to &o2p'y (it)
t)e mandatory twin requirements for a !a'i# a# e@e&ti!e &a&e''atio ,#er t)e 'a(, *1 i.e., )e fai'e#
to "e# a otari3e# oti&e of &a&e''atio a# ref,# t)e &a") ",rre#er !a',e. 5t o ti2e, fro2 t)e
#ate it +a!e a oti&e of &a&e''atio ,p to t)e ti2e i22e#iate'y *efore t)e re"po#et 4'e# t)e &a"e
a+ai"t petitioer, #i# t)e 'atter e:ert e@ort to pay t)e &a") ",rre#er !a',e. I fa&t, t)e re&or#"
#i"&'o"e t)at it (a" o'y #,ri+ t)e pre'i2iary )eari+ of t)e &a"e *efore t)e 789R6 ar*iter ()e
petitioer o@ere# to pay t)e &a") ",rre#er !a',e. $etitioer A,"ti4e" it" ia&tio o t)e +ro,# t)at t)e
re"po#et (a" a'(ay" o,t of t)e &o,try. D!e t)e, t)e re&or#" are *ereft of e!i#e&e to ")o( t)at
petitioer atte2pte# to pay t)e &a") ",rre#er !a',e to re"po#et t)ro,+) )er 'a"t ?o( a##re"".
T)e o2i""io i" ",rpri"i+ &o"i#eri+ t)at e!e #,ri+ t)e ti2e" re"po#et (a" o,t of t)e &o,try,
petitioer )a" *ee "e#i+ )er (ritte oti&e" to re2i# )er to pay )er i"ta''2et arrear" t)ro,+)
)er 'a"t ?o( a##re"". %'ear'y, )a# re"po#et ot 4'e# a &a"e #e2a#i+ a 4a' #ee# of "a'e i )er
fa!or, petitioer (o,'# ot )a!e 'ifte# a 4+er to +i!e re"po#et ()at (a" #,e )er = a&t,a' pay2et
of t)e &a") ",rre#er !a',e, a2o+ ot)er". I #i"re+ar# of *a"i& e.,ita*'e pri&ip'e", petitioer-" "ta&e
(o,'# ea*'e it to re"e'' t)e property, ?eep re"po#et-" i"ta''2et pay2et", ot to 2etio t)e &a")
",rre#er !a',e ()i&) it (a" o*'i+ate# to ret,r. T)e 7ayug 32 &a"e &ite# *y petitioer i" iapropo".
I 7ayug, t)e 'ot *,yer #i# ot pay for t)e o,t"ta#i+ *a'a&e of )i" a&&o,t a# t)e %o,rt fo,# t)at
otaria' re"&i""io or &a&e''atio (a" o 'o+er e&e""ary a" t)e "e''er )a" a'rea#y 4'e# i &o,rt a &a"e
for re"&i""io of t)e &otra&t to "e''. I t)e &a"e at *ar, re"po#et o@ere# to pay for )er o,t"ta#i+
*a'a&e of t)e &otra&t pri&e *,t re"po#et ref,"e# to a&&ept it. Neit)er #i# petitioer a##,&e proof
t)at t)e re"po#et-" o@er to pay (a" 2a#e after t)e e@e&ti!ity #ate "tate# i it" oti&e of
&a&e''atio. Moreo!er, t)ere (a" o for2a' oti&e of &a&e''atio or &o,rt a&tio to re"&i# t)e
&otra&t. Gi!e t)e &ir&,2"ta&e", (e 4# it i''e+a' a# ii.,ito," t)at petitioer, (it)o,t &o2p'yi+
(it) t)e 2a#atory 'e+a' re.,ire2et" for &a&e'i+ t)e &otra&t, forfeite# *ot) re"po#et-" 'a# a#
)ar#Geare# 2oey after ")e )a" pai# for, ot A,"t t)e &otra&t pri&e, *,t more t*an t*e consideration
stated in t*e contract to sell.
=*us" %or %ailure to cancel t*e contract in accordance wit* t*e procedure pro9ided by law" we *old t*at
t*e contract to sell between t*e parties remains 9alid and subsisting.:ollowing <ection 3+a, o% 3.A. >o.
!''(" respondent *as t*e rig*t to o?er to pay %or t*e balance o% t*e purc*ase price" wit*out interest"
w*ic* s*e did in t*is case. Or#iari'y, petitioer (o,'# )a!e )a# o ot)er re&o,r"e *,t to a&&ept
pay2et. 7o(e!er, re"po#et &a o 'o+er e:er&i"e t)i" ri+)t a" t)e ",*Ae&t 'ot (a" a'rea#y "o'# *y
t)e petitioer to aot)er *,yer ()i&) 'ot, a" a#2itte# *y t)e petitioer, (a" !a',e# at $1,F00.00 per
".,are 2eter. 5" re"po#et 'o"t )er &)a&e to pay for t)e *a'a&e of t)e $LF5,000.00 'ot, it i" o'y
A,"t a# e.,ita*'e t)at t)e petitioer *e or#ere# to ref,# to re"po#et t)e a&t,a' !a',e of t)e 'ot
re"o'#, i.e., $LF5,000.00, (it) 12N itere"t per a,2 &o2p,te# fro2 5,+,"t 2<, 1991 ,ti' f,''y pai#
or to #e'i!er a ",*"tit,te 'ot at t)e optio of t)e re"po#et.

O a 4a' ote, it (o,'# ot *e a2i"" to "tre"" t)at t)e 789R6 6oar# De&i"io or#eri+ petitioer to
ref,# to re"po#et oe )a'f of )er tota' pay2et" i" ot a e.,ita*'e "o',tio a" it p,i")e# t)e
re"po#et for )er #e'i.,et pay2et" *,t tota''y #i"re+ar#e# petitioer-" fai',re to &o2p'y (it)
t)e mandatory requisites %or a 9alid cancellation of t)e &otra&t to "e''. T)e 6oar# fai'e# to &o"i#er
t)at t)e Ma&e#a 'a( (a" ea&te# to remedy t*e plig*t o% 'o( a# 2i##'eGi&o2e lot buyers, "a!e t)e2
fro2 t)e e:a&ti+ #efa,'t &'a,"e" i rea' e"tate "a'e" a# a"",re t)e2 of a )o2e t)ey &a &a'' t)eir
o(. Neit)er (o,'# t)e De&i"io of t)e 789R6 5r*iter or#eri+ a f,'' ref,# of t)e i"ta''2et pay2et"
of re"po#et i t)e a2o,t of $014,L1<.F0 *e A,"ti4e# a", ,#er t)e 'a(, re"po#et i" etit'e# to t)e
'ot ")e p,r&)a"e# after pay2et of )er o,t"ta#i+ *a'a&e ()i&) ")e (a" rea#y a# (i''i+ to #o.
T),", to pea'i3e t)e petitioer for fai'i+ i it" o*'i+atio to #e'i!er t)e ",*Ae&t 'ot a# to +i!e t)e
re"po#et ()at i" ri+)t'y )er", t)e petitioer (a" &orre&t'y or#ere# to ref,# to t)e re"po#et t)e
a&t,a' !a',e of t)e 'a# /$LF5,000.001 ")e 'o"t to aot)er *,yer, p'," itere"t at t)e rate of 12N per
a,2 fro2 5,+,"t 2<, 1991 ,ti' f,''y pai# or to #e'i!er a ",*"tit,te 'ot at t)e &)oi&e of t)e
re"po#et.
IN VIDB B7DRDOF, t)e De&i"io of t)e %)ief $re"i#etia' 8e+a' 5""i"tat Reato %oroa, O;&e of t)e
$re"i#et, #ate# K,e 2, 199L, i" 5FFIRMDD in toto. %o"t" a+ai"t petitioer.
SO ORDDRDD.
Da9ide" Jr." 2.J." Kapunan" @nares;<antiago a# Austria;Aartinez" JJ." &o&,r.