MOLDEX REALTY V.
SABERON
April 8, 2013 | Del Castillo, J.| R.A. 6552 (Maceda Law)
DIGEST MADE BY:
Dave U.
CLUE: 50% refund
PETITIONER: Moldex Realty Inc.
RESPONDENTS: Flora A. Saberon
DOCTRINE:
Under the Maceda Law, the defaulting buyer who has paid at least two years of
installments has the right of either to avail of the grace period to pay or, the cash
surrender value of the payments made.
RECIT- READY SUMMARY:
Flora Saberon wanted to buy a 180 sqm lot in a subdivision in Dasmarinas Cavite
owned by developer Moldex Realty. Moldex offered to Flora the lot in question through
a contract to sell where Php 583,498.20 will be paid in an installment basis, paid in
monthly amortizations with 21% per annum interest on the balance. Flora agreed on
Moldex’s offer and proceeded to pay monthly installments from 1992-1996 amounting
to Php 375,295.49. In April, august, and October 1996, Moldex sent notices to Flora
asking that she pay her unpaid dues. Flora learned that she owed Moldex Php
491,265.91 by November 1996. As a recourse, Modlex suggested to Flora to create a
written authorization to sell the land to a new owner, and avail of a 50% refund of the
payments she already made. However, Flora never made the written request. Moldex
then sent Flora a Notarized notice of Cancellation on her Contract to Sell. In response,
Flora filed a complaint with the HLURB stating that the contract to sell was void ab initio
because Moldex did not secure a license to sell under PD 957. HLURB’s arbiter ruled
in favor of Flora. The arbiter’s decision was also affirmed by the HLURB Board, Office
of the President, and the CA upon appeal. Hence the appeal to the Supreme Court.
Issue: WON the the contract to sell entered by Moldex with Flora remains valid and
binding, despite Moldex’s violation of PD 957
Court held in the negative. Although it is clear that developer, Moldex violated PD 957,
nothing in the law provides that the contract should be nullified as a result. Therefore,
the contract to sell between Moldex and Flora is valid and binding regardless of the
violation of PD 957. Nevertheless, Flora is still entitled to her rights under the Maceda
Law. Under Section 3 of the said law, the defaulting buyer who has paid at least two
years of installments has the right of either to avail of the grace period to pay; or if he
fails to pay within the grace period, the entitlement to a 50% refund of all the payments
made. In this case, since Flora already paid more than 2 years of installment worth,
amounting to Php 375,295.49. Furthermore, she failed to pay her dues within the grace
period provided by law. Therefore, under the Maceda Law, she is entitled to a refund
amounting to Php 187,647.75.
FACTS:
1. Flora Saberon was interested in acquiring a 180 sqm lot in Metrogate Subdivision
in Dasmarinas, Cavite. As a result, she asked Moldex Realty, the developer of the
subdivision, to reserve a lot for her.
2. Moldex Realty offered her the lot for a one-time payment of Php 396,000.
Alternatively, a price of Php 583,498.20 can be paid on an installment basis, with
monthly amortizations of Php 8,140.97 payable in five years, with 21% per annum
based on the balance, and an additional 5% surcharge for every month of delay
on the monthly installment due.
3. Flora opted for the installment option. She made periodical payments from 1992-
1996 amounting to a total of Php 375,295.49.
4. In April, August, and October 1996, Moldex sent Flora notices to update her
account (simply put, to pay unpaid dues). Upon inquiry, Flora learned that she
owed Moldex Php 491,265.91 by November 1996.
5. As a recourse, Moldex suggested to Flora a written authorization for the sale of the
subject lot to a new buyer and a written request for a refund for half of the payments
she already made. However, Flora never made a written request for refund.
6. Moldex then sent Flora a Notarized Notice of Cancellation of Reservation
Application and/or Contract to Sell. Flora, on the other hand, filed before the
Housing and Land Use Regulatory Board (HLURB) Regional Field Office IV a
Complain for the annulment of the contract to sell, recovery of all her payments
with interests, damages, and the cancellation of Moldex’s license to sell.
7. Flora argues that the contract to sell between her and Moldex is null and void
because Moldex violated Section 5 of PD 957. Under the said law, developers of
condominiums and subdivisions are required to secure a license to sell before
selling their lots and units in inventory.
8. In response, Moldex averred that Flora defaulted from her payments, and that they
merely exercised their right under the Maceda Law by cancelling the contract to
sell and forfeiting all the payments made.
9. The HLURB arbiter ruled in favor of Flora. The arbiter’s decision was affirmed by
the HLURB Board, Office of the President, and CA. Hence, the petition.
10. Moldex argues before the SC that the contract to sell entered between them and
Flora is still valid and binding regardless of whether a license to sell has been
secured, or not under PD 957.
ISSUE/S:
1. WON the contract to sell entered by Moldex with Flora remains valid and binding,
despite Moldex’s violation of PD 957— NO
RULING:
WHEREFORE, the Petition is GRANTED. The assailed October 31, 2006 Decision and
January 23, 2007 Resolution of the Court of Appeals in CA- G.R. SP No. 79651 are
hereby ANNULLED and SET ASIDE. The contract to sell between petitioner Moldex
Realty, Inc. and respondent Flora A. Saberon is declared CANCELLED and petitioner
Moldex Realty, Inc. is ordered to REFUND to respondent Flora A. Saberon the cash
surrender value of the amortizations she made equivalent to P187,647.75 pursuant to
Section 3(b) of Republic Act No. 6552 within 15 days from date of finality of this
Decision.
RATIO:
1. NO
● The court held that the intrinsic validity of the contract to sell is not affected by the
developer’s violation of Section 5 of PD 957. This is because the language of the
law does not provide for the nullification of the contract. Since, the law clearly
does not provide for the nullification of contracts in the event of a violation under
PD 957, the contract to sell is still valid regardless of the violation of law.
● Moreover, Flora claims that the contract she entered into with Moldex is void
because of the latter’s failure to register the contract to sell/document of
conveyance with the Register of Deeds, in violation of Section 17 of PD 957.
However, just like in Section 5 which did not penalize the lack of a license to sell
with the nullification of the contract, Section 17 similarly did not mention that the
developer’s or Moldex’s failure to register the contract to sell or deed of
conveyance with the Register of Deeds resulted to the nullification or invalidity of
the said contract or deed. Furthermore, registration under the Property
Registration Decree merely serves as a constructive notice as to third parties.
● Nevertheless, she is entitled to a 50% refund under the Maceda Law. Section 3
of the said law states that: the defaulting buyer who has paid at least two years
of installments has the right of either to avail of the grace period 1to pay; or if he
fails to pay within the grace period, the entitlement to a 50% refund of all the
payments made.
● In this case, since Flora already paid more than 2 years of installment worth,
amounting to Php 375,295.49. Furthermore, she failed to pay her dues within the
grace period provided by law. Therefore, under the Maceda Law, she is entitled
to a refund amounting to Php 187,647.75.

1 Under the Maceda Law, Grace Period is 1 month for every 1-year worth of
installments paid.