SECOND DIVISION

[G.R. No. 230817. April 18, 2018.]

VIVE EAGLE LAND, INC. , petitioner, vs. NATIONAL HOME MORTGAGE

NOTICE

Sirs/Mesdames :

Please take notice that the Court, Second Division, issued a Resolution dated 18
April 2018 which reads as follows: HESIcT

"G.R. No. 230817 (Vive Eagle Land, Inc. v. National Home Mortgage
Finance Corporation, John Peter S. Sison, et al.) — On April 18, 2006, petitioner
Vive Eagle Land, Inc. (Vive), a corporation engaged in the realty business and
represented by its President, Virgilio O. Cervantes, led a complaint for declaration of
nullity of rescission, declaration of suspension of payment of purchase price and
interest and other reliefs against respondents National Home Mortgage Finance
Corporation (NHMFC), a government corporation created by virtue of Presidential
Decree No. 1267, Joseph Peter S. Sison (Sison), President of NHMFC, and Cavacon
Corporation, a domestic corporation engaged in the business of construction. In its
complaint, Vive alleged that on November 17, 1999, it entered into a Deed of Sale of
Rights, Interests, and Participation Over Foreclosed Assets, whereby it agreed to
purchase NHMFC's rights, interests, and participation in the foreclosed property of
Alyansa ng mga Maka-Maralitang Asosasyon at Kapatirang Organisasyon, Inc. located
a t Barangay Sta. Catalina, Angeles City, with an area of 73.5565 hectares covered by
Transfer Certi cate of Title (TCT) Nos. 86340 and 86341 for a total purchase price of
P40,000,000.00 payable in the following manner: (1) the amount of P8,000,000.00 as
20% downpayment payable in two equal installments, the rst of which shall be due on
or before December 4, 1999, and the second, within thirty (30) days from the execution
of the Deed of Conditional Sale, but in no case shall be later than January 4, 2000; and
(2) the balance of P32,000,000.00 payable in 10 equal semi-annual installments in the
amount of P3,200,000.00 per installment, plus 14% interest per annum, with the rst
installment due on July 4, 2000 and every 6 months thereafter until fully paid. Pursuant
to the Deed of Sale, Vive paid the rst installment of the downpayment in the amount of
P4M.
Vive, however, did not pay the subsequent installments reasoning out that it was
prevented from exercising its right to avail of a developmental loan under Section 8 of
the Deed of Sale due to issues on the subject property, particularly: (1) the issuance of
numerous certi cates of land awards (CLOAs) over the same; and (2) the classi cation
of the same as agricultural subjecting it to the coverage of the Comprehensive Agrarian
Reform Program. While awaiting the resolution of said issues, Vive requested NHMFC
for a moratorium or suspension of the period of payment, the corresponding waiver of
interest, and a 10% reduction of the purchase price for litigation costs it incurred. In a
letter dated June 17, 2004, NHMFC, through its then President, Atty. Angelico T. Salud
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(Atty. Salud) , initially agreed on the moratorium, but advised Vive to submit its request
of waiver and interest reduction to the NHMFC's Board of Directors.
Notwithstanding the agreement, NHMFC, through its new President Sison,
noti ed Vive in a letter dated February 10, 2006 of the rescission/cancellation of the
Deed of Sale due to the alleged non-payment of the balance of the purchase price. Said
non-payment by Vive became NHMFC's defense in its Answer to Vive's complaint.
According to NHMFC, its decision to rescind the Deed of Sale was valid in view of Vive's
refusal to pay the subject installments. Moreover, since Vive was well aware of the
issues affecting the property prior to its purchase, it was not justi ed in suspending its
payment of the purchase price.
Vive amended its complaint arguing that without its knowledge and consent,
NHMFC and Cavacon, in bad faith, entered into a Memorandum of Agreement on
August 7, 2008 by virtue of which NHMFC sold the subject property on an "as is where
is" basis to Cavacon for P35,000,000.00 despite the pendency of the instant case and
Cavacon's knowledge of the prior sale. NHMFC countered that as stipulated under the
Deed of Sale, it had the right to rescind the same due to Vive's continuous failure to pay
and to freely dispose of the property as if the Deed of Sale has never been made.
On September 18, 2014, the Regional Trial Court (RTC) of Makati City, Branch
138 dismissed Vive's complaint, nding NHMFC's rescission of the Deed of Sale to be
valid. On Vive's motion, however, the Presiding Judge of Branch 138 inhibited himself
and ordered the re-ra ing of the case. Subsequently, the case was ra ed to the RTC
Branch 133 which, on January 13, 2015, granted Vive's motion for reconsideration,
declaring null and void NHMFC's rescission of the Deed of Sale, declaring Vive as the
owner of the property, declaring due and demandable the subsequent installments of
the downpayment without interest, and ordering NHMFC to pay attorney's fees and
litigation expenses. Pursuant to the court's order, Vive tendered the second installment
of the downpayment in the amount of P4M but NHMFC refused to accept. Thereafter,
on NHMFC's motion, the Presiding Judge of Branch 133 voluntarily inhibited himself
and again ordered the re-ra ing of the case, which was next ra ed to RTC Branch 139.
In an Order dated June 15, 2015, said court granted NHMFC's motion for
reconsideration and reinstated the Decision of RTC Branch 138 nding NHMFC's
rescission valid.
In a Decision dated August 23, 2016, the Court of Appeals (CA) a rmed the
Decision of the RTC Branch 139 maintaining, rst, that Vive's failure to pay the purchase
price is an event of default giving NHMFC the right to annul/cancel the contract and
forfeiting whatever right Vive have acquired thereunder pursuant to Section 5 thereof.
Second, it is clear from Section 7 1 of the Deed of Sale that the parties intended their
agreement to be a contract to sell or a conditional sale. The title to the property was
not immediately transferred, through a formal deed of conveyance, in the name of Vive
prior to or at the time of the rst payment. Thus, since the title and ownership remains
with NHMFC until Vive fully pays the balance, the Deed of Sale was merely a contract to
sell. Failure to pay is not a mere breach, casual or serious which prevents the obligation
of the vendor to convey the title from acquiring obligatory force. The non-ful llment by
Vive of its obligation to pay, which is a suspensive condition for the obligation of
NHMFC to sell and deliver the title to the property, rendered the Deed of Sale ineffective
and without force and effect. Thus, since the Deed of Sale was validly
annulled/cancelled, the subsequent sale entered into by NHMFC and Cavacon is valid.
Moreover, the appellate court, in its Resolution dated March 30, 2017, rejected
Vive's contention that NHMFC's grant of the moratorium was proven through a letter
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dated June 17, 2004 when Atty. Salud, then President of NHMFC, initially agreed to the
moratorium on the collection period for the balance of the purchase price. It found
nothing in the records to indicate that the NHMFC Board of Directors approved the
undertaking made by Atty. Salud. Thus, since it was unilaterally granted without board
approval, the CA denied Vive's motion for reconsideration. caITAC

On May 22, 2017, Vive led a Petition for Review before the Court assailing the
Decision of the CA alleging that: (1) the Deed of Sale is a valid contract of sale which
absolutely transferred all of NHMFC's rights over the property to Vive. Since there is no
requirement for NHMFC to execute a Deed of Absolute Sale to transfer ownership to
Vive, then there is no intention to reserve ownership by NHMFC. If it was a contract to
sell, NHMFC would not need to annul/cancel the contract in order to dispose the
property upon default for contracts to sell need not be annulled for non-payment since
such payment is a positive suspensive condition, failure of which is not really a breach,
but an event that prevents the obligation of NHMFC to convey title from arising; (2) an
essential consideration of the contract was for Vive to use the property as collateral for
a loan to develop the same into a residential subdivision. But since Vive discovered
issues affecting the property, further payments were suspended pending resolution
thereof. NHMFC's failure to assist Vive with the litigation prevented Vive from obtaining
the loan. Thus, Vive should be considered as having been constructively ful lled its
obligation in view of Article 1186 of the Civil Code which provides that the condition
shall be deemed ful lled when the obligor voluntarily prevents its ful lment; (3) it could
not have been in default as it was validly granted a moratorium. The June 17, 2004
letter expressly states that "In line with our discussion, we initially agreed for a
moratorium on the collection period, we cannot, however, favourably consider your
request for discount on purchase price and waiver of interest and penalties without
prior approval from our Board." The matter that would be referred to for board approval
was the request for discount and waiver of interests, and not the moratorium.
Moreover, even NHMFC's actuations showed its consent to the moratorium since it
only demanded payment in its letter dated February 10, 2006, under its new President,
Sison, despite the fact that the second installment was scheduled as early as January 4,
2000 and the rst 10 semi-annual instalments was scheduled on July 4, 2000; (4) since
there was a valid moratorium, it did not commit any breach of contract that supposedly
entitled NHMFC to unilaterally rescind the Deed of Sale. In fact, in Vive's letter to
NHMFC dated July 4, 2005, it categorically thanked NHMFC for the moratorium it
granted. Despite this, NHMFC never replied to said letter. Clearly, NHMFC had actual
knowledge thereof and did not deny nor repudiate the same. It is, therefore, estopped
from denying its existence and validity; and (5) the subsequent MOA between NHMFC
and Cavacon was entered into in bad faith because they executed the same despite
their knowledge of the instant case. In fact, they even conveniently entered into the
MOA on August 7, 2008, after the issues over the property have been removed, as when
the CLOAs over the property have been decreed cancelled with nality by the Court on
March 17, 2008.
In a Resolution dated June 7, 2017, the Court denied Vive's petition for review on
certiorari for failure to su ciently show any reversible error in the assailed judgment of
the CA to warrant the exercise of discretionary appellate jurisdiction.
On July 19, 2017, Vive led the instant Motion for Reconsideration praying that
the Court take a second look at the circumstances of the case, especially considering
that the lower courts themselves are at odds with one another as to how the issues
should be resolved. In said motion, Vive reiterated the following arguments: (1) The
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subject Deed of Sale is a contract of sale. There is no stipulation making full payment a
suspensive condition for the transfer of ownership; (2) Even assuming that the Deed of
Sale is a contract to sell, the rescission/cancellation effected by NHMFC is null and void
considering that the moratorium previously granted by Atty. Salud is binding upon
NHMFC; (3) Even granting that Atty. Salud did not have the actual power to grant a
moratorium, it is nevertheless respectfully submitted that the grant shall still be binding
upon NHMFC, as provided by the doctrine of apparent authority; (4) Even assuming that
Atty. Salud was not vested with apparent authority to grant a moratorium, NHMFC's
silence following the grant and despite knowledge thereof estopped it from denying
the same; (5) Even if all the foregoing arguments are hypothetically conceded, the Deed
of Sale remains valid as the same was invalidly cancelled because it was NHMFC's own
deliberate inaction that prevented Vive from securing the necessary loan thereby
preventing Vive from paying the balance. In reciprocal obligations, neither party incurs
in delay if the other does not comply with what is incumbent upon him; (6) the Court
should take judicial notice of the Maceda Law because the transaction herein is a sale
of 2 parcels of land not classified as commercial or industrial to be paid in installments.
Since NHMFC's cancellation failed to comply with the Act's twin requirements of a
notarized notice of cancellation and a refund of the cash surrender value, the Deed of
Sale remains valid and subsisting; (7) Since NHMFC's rescission is null and void, the
subsequent MOA entered into with Cavacon is, likewise, null and void; and nally; (8)
Even assuming that the rescission effected by NHMFC was valid, the lower courts
should have ordered mutual restitution and that the parties should surrender that which
they received and to place each other in their original position. NHMFC has no basis to
lay claim on and reap the bene ts of Vive's labor to cleanse the title of the property
from any and all adverse claims.
On October 18, 2017, Sison led his Comment essentially refuting the arguments
raised by Vive in its Motion for Reconsideration and declaring that the Court should not
allow Vive to make allegations that are mere rehash of the ones taken up in the
proceedings below as well as to raise entirely new issues not agreed to a pre-trial nor
taken up during trial. On October 25, 2017, Vive led its Reply refuting the allegations in
respondents' Comment.
On October 25, 2017, NHMFC and Cavacon led their Comment likewise refuting
the arguments raised by Vive in its Motion for Reconsideration. On November 16, 2017,
Vive led its Reply to the Comment of NHMFC and Cavacon. In response, NHMFC and
Cavacon led their Rejoinder on November 27, 2017. Likewise, Sison led his Rejoinder
on December 1, 2017.
WHEREFORE, PREMISES CONSIDERED , the Court resolves to GRANT the
motion for reconsideration giving due course to the petition and REQUIRE the
respondents to file comment on the petition within ten (10) days.
SO ORDERED . " (Carpio, J., Acting Chief Justice per Special Order No. 2539
dated February 28, 2018).

Very truly yours,

MA. LOURDES C. PERFECTO

By:
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(SGD.) TERESITA AQUINO TUAZON
Deputy Division Clerk of Court
Footnotes
1. Section 7 provides of the Deed of Sale:

   Section 7. TITLE OF PROPERTY. —

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