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MOLDEX REALTY, INC

vs.
FLORA A. SABERON,
1
Grand Reveal in
Grand Reveal in
Grand Reveal in
 Recto Law

wreck Tulo
 Maceda Law

Mask Jeda Lo
 Recto Law
The vendor of personal property payable in
installment may exercise any of the following
remedies:
1. Exact fulfillment of obligation upon vendees
failure to pay
2. Rescind the sale
3. Foreclosure if constituted chattel mortgage
 Maceda Law
It protects buyer of real estate on installments
against onerous and oppressive condition.

Requisites:
1. Contracts involving real estate on installment
payments including residential condominium
apartments
2. Buyer defaults in payment of succeeding
installments
 Maceda Law
If buyer paid at least 2
years of installments
1. Buyer must pay without additional interest to
the unpaid installment due within total grace
period earned by him
• 1 month grace period for every 1 year of installment payment
made
• Such right only be exercised once every 5 years
2. Cancellation of Contract which can only take
place after 30 days from receipt by buyer of
a) Notarial notice of cancellation; and
b) Refund of cash surrender
 Maceda Law
• CASH SURRENDER. Seller shall refund the
buyer 50% of total payments made
 Maceda Law
If buyer paid less than
2 years of installment
 Seller shall give the buyer grace period of not
less than 60 days from the date of installment
 If buyer fails to pay the installments due at
expiration of grace period, the seller may
cancel the contract after 30 days from receipt
of buyer notarial cancellation
Facts:
• Flora A. Saberon (Flora) asked Moldex, the
developer, to reserve the lot for her as shown
by a Reservation Application dated April 11,
1992
• Flora opted to pay on installment and began
making a periodical payments from 1992 to
1996 in the total amount of ₱375,295.49.
Facts:
• Failure to pay from April 1996, As of April
1997, Moldex computed Flora’s unpaid
account at ₱576,569.89
• Moldex sent Flora Notarized Notice of
Cancellation of Reservation Application and/or
Contract to Sell
Flora’s contention
• The contract to sell between her and Moldex
is void from its inception because Moldex sold
the subject lot to her on April 11, 1992 or
before it was issued a license to sell on
September 8, 1992 and because it failed to
register the contract to sell in the Registry of
Deeds, thus, violation of PD 957 and PD
1529 respectively.
Worth noting:
• Lower Court ordered reimbursement to Flora
the full payment made by him for the amount
of ₱375,295.47
ISSUE 1: WON contract to sell
shall be nullified for failure to
obtain a license or failure to
register the sale to Registry of
Deeds.
Held:
• failure to register will not be tantamount to
nullification of contract to sell. It will remain
valid and effective between the parties
thereto. Registration merely serves as a
constructive notice to the whole world to bind
third parties
Held:
• The lack of a license to sell or the failure on
the part of a subdivision developer to register
the contract to sell or deed of conveyance
with the Register of Deeds does not result to
the nullification or invalidation of the contract
to sell it entered into with a buyer. The
contract to sell remains valid and subsisting
ISSUE 2: Application of Maceda Law
 Held:
• 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
• It is on record that Flora had already paid more
than two years of installments (from March 11,
1992 to July 19, 1996) in the aggregate amount
of ₱375,295.49. Her last payment was made on
July 19, 1996. It is also shown that Flora has
defaulted in her succeeding payments.
 Held
• She could thus no longer avail of the option
provided in Section 3(a) of the Maceda Law
which is to pay her unpaid installments within
the grace period. Besides, Moldex already sent
Flora a Notarized Notice of Cancellation of
Reservation Application and/or Contract to Sell.
Hence, the only option available is Section 3(b)
whereby the seller, in this case, Moldex shall
refund to the buyer, Flora, the cash surrender
value of the payments on the property equivalent
to 50% of the total payments made, or
₱187,647.75