**Pagtalunan vs. Dela Cruz Vda. De Manzano: A Landmark Case on Contract to Sell and Realty Installment Buyer Protection Act (R.A. 6552)**
### Facts:
The case revolves around a dispute between Manuel C. Pagtalunan (petitioner) and Rufina Dela Cruz Vda. De Manzano (respondent) over a house and lot sale on installment under a Contract to Sell dated July 19, 1974. Patricio Pagtalunan, the original vendor and petitioner’s stepfather, agreed to sell a portion of land to respondent, who was the wife of Patricio’s former mechanic. The total price was P17,800 with specific terms for downpayment and monthly installments.
The respondent took possession and made payments until allegedly ceasing after December 1979, causing disputes including accusations of non-payment and harassment. Patricio passed away in 1992, and petitioner became the sole successor-in-interest. In 1997, petitioner demanded respondent to vacate, claiming her possession became unlawful due to payment failures. This led to the filing of an unlawful detainer case by the petitioner. The Municipal Trial Court (MTC) ruled in favor of petitioner, but this was reversed by the RTC and upheld by the Court of Appeals (CA), which introduced the application of the R.A. 6552 or the Maceda Law into the dispute.
### Issues:
1. Whether the contract to sell was validly cancelled pursuant to R.A. No. 6552 (Maceda Law).
2. If the demand to vacate served by the petitioner was sufficient for cancellation of the contract under R.A. No. 6552.
3. Whether the actions and remedies sought in the unlawful detainer case were proper under the circumstances.
### Court’s Decision:
The Supreme Court affirmed the CA’s decision but with modifications, recognizing the applicability of R.A. 6552. It determined that:
– The contract to sell was not validly cancelled as required by the Maceda Law, lacking a notarial act of rescission and refund of the cash surrender value.
– The petitioner’s demand to vacate did not meet the requirements for legal cancellation under the aforementioned law.
– The respondent was given the right to settle the remaining balance of the purchase price, accounting for legal interests accrued since the filing of the unlawful detainer complaint.
– Should the respondent fulfill the payment within a prescribed timeframe, the petitioner is mandated to execute a Deed of Absolute Sale in favor of the respondent.
### Doctrine:
This case reaffirms the provisions of R.A. No. 6552, emphasizing the protective measures for installment buyers of real estate, requiring a notarial act for the cancellation of contracts and the refund of the cash surrender values before such cancellation.
### Class Notes:
– R.A. 6552 (Realty Installment Buyer Protection Act) applies to all transactions or contracts involving installment payments for real estate, guaranteeing rights to buyers upon default after at least two years of installment payments.
– A contract to sell can be cancelled by the seller outside court in compliance with specific statutory requirements, including a notarial act of rescission and refund of the cash surrender value to the buyer.
– Failure to follow the prescribed methods of contract cancellation under the Maceda Law invalidates any attempt to terminate the agreement unilaterally and unlawfully evict the buyer.
– Legal interest applicable for unpaid amounts in default situations is 6% per annum from the time of demand until judgment becomes final, switching to 12% thereafter until fully paid.
### Historical Background:
The case highlights the intricacies and legal remedies available in disputes involving contracts to sell real estate on installment, within the context of the Philippine legal system’s protection for buyers against unfair practices. It showcases the procedural journey from MTC to the Supreme Court and the application of specific laws designed to protect the rights of installment buyers.
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