### Facts:
1. **Initial Property Acquisition**: In December 2009, Teresita de los Santos, acting as an accommodation party for her daughter and son-in-law (spouses Analyn de los Santos-Lopez and Raphael Lopez), applied to purchase a property listed by the Government Service Insurance System (GSIS) located at Block 8, Lot 14, Juana I Complex, Biñan and covered by TCT No. T-129136.
2. **Approval and Initial Payment**: On January 19, 2010, GSIS approved Teresita’s application. By March 5, 2010, the petitioner spouses paid a deposit of P87,255.00 and a service fee of P7,852.97. A Deed of Conditional Sale was subsequently executed on May 12, 2010.
3. **Ejectment Attempt**: Despite demands, Joel Lucenio (respondent) refused to vacate the property. The petitioners unsuccessfully sought mediation through the Barangay Lupong Tagapamayapa.
4. **Unlawful Detainer Complaint**: On October 1, 2010, petitioners filed a Complaint for Ejectment/Unlawful Detainer with Damages before the Municipal Trial Court (MTC).
5. **Respondent’s Defense**: Respondent Joel claimed that since 1995, his sister had obtained a housing loan from GSIS to purchase the property and later transferred her rights to him. He also claimed that GSIS did not finalize his loan modification requests and contended the Deed of Conditional Sale was void.
### Procedural History:
1. **MTC Decision**: On March 20, 2012, the MTC decided in favor of the petitioners, finding their rights superior to those of the respondent.
2. **Appeal to RTC**: Respondent Joel appealed to the RTC, which affirmed MTC’s decision on February 4, 2013.
3. **Appeal to CA**: Joel further appealed to the Court of Appeals (CA) under Rule 42, introducing for the first time issues under Republic Act (RA) No. 6552 (Maceda Law), arguing non-compliance by GSIS.
4. **CA Ruling**: On September 29, 2014, CA reversed the RTC ruling, dismissing the petitioners’ complaint due to alleged GSIS non-compliance with the Maceda Law.
5. **Motion for Reconsideration**: Petitioners’ motion attaching GSIS’s notarized cancellation was denied by the CA on December 1, 2014.
6. **Supreme Court Petition**: Petitioners sought relief from the Supreme Court.
### Issues:
1. **Theory Change on Appeal**: Whether the CA erred in allowing respondent Joel to introduce a new legal theory (Maceda Law non-compliance) on appeal.
2. **Applicability of Maceda Law**: Whether the Maceda Law applied to both petitioners and respondent, who were both buyers.
3. **Compliance with Maceda Law**: Assuming applicability, whether the CA erred in concluding non-compliance based on respondent’s new evidence.
### Court’s Decision:
1. **Prohibition of New Theories on Appeal**:
– The Court held that new issues or defenses not raised before the trial court cannot be introduced for the first time on appeal. This principle maintains adherence to fairness, justice, and due process.
– Respondent Joel’s Maceda Law compliance issue was not raised in trial courts and should not have been entertained by the CA.
2. **Maceda Law Consideration**:
– The Maceda Law was irrelevant to this case because it concerns the rights of buyers vis-à-vis sellers. Both petitioners and respondent were buyers from GSIS, not involving seller-buyer disputes.
3. **Refund and Notice Issues**:
– The CA’s decision, based on new defenses regarding non-compliance with Maceda Law, was erroneous as these were factual matters not previously presented at trial levels.
– The Supreme Court ruled that resolving these issues required factual determinations inappropriate at the appellate level since the petitioners were denied the opportunity to address these new allegations earlier.
4. **Restoration of Lower Court Judgments**:
– The Supreme Court reinstated the RTC and MTC decisions because the CA exceeded its jurisdiction by addressing new issues not raised below, violating principles of fair play and due process.
### Doctrine:
– **Theory of the Case**: Changes in the theory during appeal are prohibited to ensure fairness, justice, and adherence to due process.
– **Maceda Law Non-Applicability**: Issues pertinent to seller-buyer relationships and cancellation procedures under the Maceda Law cannot be extended to disputes solely between competing buyers.
### Class Notes:
– **Principle of “Theory of the Case”**:
– **Rule**: Parties cannot shift theories during appeals.
– **Case Reference**: Peña v. Spouses Tolentino.
– **Maceda Law**:
– **Key Statute**: Republic Act No. 6552.
– **Application**: Protects the buyer of real estate properties in cases of installment payments from abrupt cancellations by sellers.
### Historical Background:
This case occurs in the context of real estate disputes involving government agency sales and the application of protective legislation like the Maceda Law aimed at preventing unjust loss of property for delinquent buyers. The case highlights jurisdictional principles and procedural fairness in the appellate process.
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