Facts:

This case involves a complaint filed by respondents Rolando S. Cabreza, Rosalinda Aguilar,
and Fernando Aguilar against Integrated Credit and Corporate Services (ICCS), spouses Estela
Gan and Vicente Sy Gan, and Citibank, N.A. The case centers around the ownership of a house
and lot covered by Transfer Certificate of Title (TCT) No. 149759/T-752.

The property owner (Cabreza) failed to pay a loan secured by a real estate mortgage, leading to
foreclosure proceedings which led to public auction. The highest bidder at the public auction
was Integrated Credit and Corporate Services (ICCS). The owner’s sister (Rosalinda)
negotiated with ICCS for the repurchase of the property, and they entered into the MOA allowing
Cabreza to redeem the property by paying the redemption price in installments. However,
subsequent payment defaults and dishonored checks led to ICCS's decision to consolidate its
title and sell the property to another party, the spouses Gan. The original owner and his sister
filed a complaint seeking annulment of the sale and reconveyance of the property. The trial court
ruled in their favor, annulling the sale and ordering ICCS to reimburse the spouses Gan. The
Court of Appeals affirmed the ruling with modifications. ICCS appealed to the Supreme Court,
arguing for the validity of the termination of the MOA, consolidation of title, and the sale to the
spouses Gan. The spouses Gan argued that ICCS acted in bad faith.

Issue:

1.) WON the MOA between ICCS and Cabreza with the spouses Aguilar as guarantors is a
contract of sale.
2.) Whether ICCS validly rescinded the MOA.

Held:

1.) The Supreme Court ruled in the affirmative. The court stated that the MOA is a valid
agreement that is in the form of a contract of sale of real property in installments. To quote,
“Despite not being denominated as a "Deed of Sale," a contract is what the law defines it to be,
and not what the contracting parties call it. Article 1458 of the Civil Code defines a contract of
sale to be a contract where "one of the contracting parties obligates himself to transfer the
ownership and to deliver a determinate thing, and the other to pay therefor a price certain in
money or its equivalent." The essential elements of a contract of sale are: (a) consent; (b)
object; and (c) price in money or its equivalent. Here, the MOA contains all the essential
elements of a contract of sale. As previously stated, it was sufficiently shown that ICCS and
Cabreza with the spouses Aguilar consented to the execution of the MOA. The subject property,
that is owned by ICCS, is the object of the contract. Lastly, the P10,345,914.75 to be paid in
installments on the period set by the parties constitutes the price. Hence, the MOA is a contract
of sale of the subject property entered into by ICCS and Cabreza with the spouses Aguilar.”

2.) The Supreme Court ruled in the Negative. The Supreme Court upheld the rulings of the
lower courts, to quote “The Court finds that there is also no reason to disturb the ruling of the
CA in this issue that there was no valid rescission of the MOA, primarily for the reason that the
requisites of the Maceda Law were not complied with”. “We find that there was no valid
rescission because the requirements of the Maceda Law were not complied with. The letter
dated December 23, 1994 informing Cabreza and the spouses Aguilar that the ICCS is already
"consolidating title to the subject property," should have effectively canceled the MOA; the said
letter, however, did not comply with the Maceda Law which requires that the seller must give a
notice or a demand for rescission by notarial act. Further, the Maceda Law provides that actual
cancellation can only be effected after 30 days from buyer's receipt of the notarial rescission. In
this case, there is no showing that this requirement was observed by ICCS as it intended that
the letter dated December 23, 1994 to be the termination of the MOA.”

The Court also ruled that the spouses Gan are the valid owners of the property based on the
Deed of Sale. However, ICCS was ordered to return the payments made by Cabreza and the
spouses Aguilar under the MOA, with legal interest, as the property was no longer available for
them to redeem. The Court modified certain portions of the Court of Appeals' decision, including
deleting orders related to reimbursements, cancellation of the transfer certificate of title, and the
rescission of the MOA. The Court also ordered ICCS to refund the payments made by Cabreza
and the spouses Aguilar, subject to legal interest.