Moldex Realty, Inc. vs.
Saberon
G.R. No. 176289
Decision
Date Apr 8, 2013
Moldex and Flora entered a contract to sell a lot; Flora defaulted on payments. Despite Moldex lacking a license to
sell, the contract was upheld. Flora received a 50% refund under the Maceda Law.
Facts:
Background of the Case:
Petitioner Moldex Realty, Inc. (Moldex) and respondent Flora A. Saberon (Flora) entered into a contract to sell for a
180-square meter lot in Metrogate Subdivision, Dasmariñas, Cavite. Flora opted to pay on installment, with a total
purchase price of P583,498.20, payable in five years with 21% interest per annum and a 5% surcharge for delayed
payments.
Payments and Default:
From 1992 to 1996, Flora made periodic payments totaling P375,295.49. However, by July 1996, her unpaid balance
ballooned to P247,969.10, and by November 1996, it reached P491,265.91. Moldex sent Flora notices to update her
account and suggested she authorize the sale of the lot to a new buyer or request a refund. Flora did not act on these
suggestions.
Cancellation of Contract:
By April 1997, Moldex computed Flora’s unpaid account at P576,569.89 and sent her a Notarized Notice of
Cancellation of Reservation Application and/or Contract to Sell.
Flora’s Complaint:
Flora filed a complaint before the Housing and Land Use Regulatory Board (HLURB) for the annulment of the contract
to sell, recovery of her payments with interest, damages, and cancellation of Moldex’s license to sell. She alleged that
Moldex violated Section 5 of Presidential Decree (PD) No. 957 by selling the lot without a license to sell and Section
17 by failing to register the contract to sell with the Register of Deeds.
Moldex’s Defense:
Moldex argued that Flora defaulted on her payments and that her subsequent payments were applied to her
delinquencies. It also claimed that Flora could not benefit from Moldex’s lack of a license to sell since she was at fault.
Issue:
1. Whether the lack of a license to sell at the time of the contract’s perfection renders the contract to sell void.
2. Whether Moldex’s failure to register the contract to sell with the Register of Deeds invalidates the contract.
3. Whether Flora is entitled to a refund under the Maceda Law (Republic Act No. 6552).
Ruling:
The Supreme Court granted Moldex’s petition and ruled as follows:
1. The lack of a license to sell at the time of the contract’s perfection does not render the contract to sell void.
The contract remains valid and subsisting.
2. The failure to register the contract to sell with the Register of Deeds does not invalidate the contract.
Registration is only required to bind third parties, not the parties to the contract.
3. Flora is entitled to a 50% refund of her total payments under the Maceda Law, as she had paid more than two
years of installments but defaulted on subsequent payments.
Ratio:
1. Validity of the Contract Despite Lack of License to Sell:
The Court held that the lack of a license to sell under PD 957 does not automatically nullify a contract to sell.
The absence of a license is penalized under the law, but the law does not provide for the nullification of
contracts entered into without a license. The contract remains valid between the parties.
2. Non-Registration of the Contract to Sell:
The Court ruled that the failure to register the contract to sell with the Register of Deeds does not affect its
validity. Registration is only required to bind third parties, not the parties to the contract.
3. Refund Under the Maceda Law:
Under Section 3(b) of the Maceda Law, a defaulting buyer who has paid at least two years of installments is
entitled to a refund of 50% of the total payments made. Since Flora had paid more than two years of
installments but defaulted, she was entitled to a refund of P187,647.75.
Dispositive Portion
The Supreme Court annulled and set aside the Court of Appeals’ decision. The contract to sell between Moldex and
Flora was declared canceled, and Moldex was ordered to refund Flora the cash surrender value of her payments
equivalent to P187,647.75 within 15 days from the finality of the decision.
