G.R. No. 233737 - STAR ASSET MANAGEMENT ROPOAS, INC., SUBSTITUTED BY DALLAS ENERGY AND PETROLEUM CORPORATION, VS. REGISTER OF DEEDS OF DAVAO CITY AND FOOTHILLS AND REALTY DEVELOPMENT CORPORATION REPRESENTED BY MARYLINE C. LIM.D E C I S I O N - Supreme Court E-Library

Ruling

Accordingly, such failure to comply will have the same effect as detailed in Item #4 below. 4. Default in the payment by the [Foothills Realty] of three (3) consecutive payments of monthly amortizations when they fall due, or any advance when demanded, for any reason whatsoever, shall render immediately due and demandable all the remaining unpaid balance of the above agreed settlement amount. Delay or failure to exercise immediately the foregoing option shall not constitute a waiver by the [Star Assets and/or Dallas Energy] of such right or bar [Star Assets and/or Dallas Energy] from availing of said legal reliefs. x x x x [33] (Emphasis supplied) In this case, while Section 3 of the compromise agreement gives Star Asset and/or Dallas Energy the right to foreclose the mortgaged properties in case of default and after formal notice or demand has been served and received by Foothills Realty, nevertheless, the correct interpretation should be that, in case of default, Star Asset and/or Dallas Energy should be given the right to cancel the compromise agreement. This is in keeping with the nature of the compromise agreement as a buy-back of foreclosed property arrangement. Besides, the subject property has already been foreclosed and its ownership was transferred to Star Asset and/or Dallas Energy. There is no reason for the latter to foreclose the subject property anew. Under Section 2 of R.A. 6552, it is the "[p]olicy of the State to protect buyers of real estate on installment payments against onerous and oppressive conditions." [34] The scope of the law only encompasses "[s]ale or financing of real estate on installment payments, including residential condominium apartments but excluding industrial lots, commercial buildings and sales to tenants under R.A. 3844, as amended by R.A. 6389." [35] Under the said law, when the buyer has paid at least two installments, he is entitled to the following rights in case he defaults in the payment of succeeding installments, to wit: (a) To pay, without additional interest, the unpaid installments due within the total grace period earned by him which is hereby fixed at the rate of one month grace period for every one year of installment payments made: Provided, That this right shall be exercised by the buyer only once in every five years of the life of the contract and its extensions, if any. (b) If the contract is canceled, the seller shall refund to the buyer the cash surrender value of the payments on the property equivalent to fifty per cent of the total payments made, and, after five years of installments, an additional five per cent every year but not to exceed ninety per cent 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 by a notarial act and upon full payment of the cash surrender value to the buyer. [36] In Active Realty & Developme