G.R. No. 99346 . February 7, 1995.
CASA FILIPINA REALTY CORPORATION, petitioner, vs. OFFICE OF THE PRESIDENT and Spouses DENNIS and REBECCA SEVILLA, respondents.

FACTS

Spouses Dennis and Rebecca Sevilla entered into a Contract to Sell with Casa Filipina Realty Corporation (CFRC) in November 1984 for a subdivision lot. After paying several installments, the Sevillas discovered the mother title was under lis pendens and mortgaged to a bank, with the subdivision remaining undeveloped. They consequently stopped payments and, in November 1985, demanded a refund of their payments, later filing a formal complaint with the Human Settlements Regulatory Commission (precursor to HLURB).
The Office of Appeals, Adjudication and Legal Affairs (OAALA) found CFRC liable, ordering a refund of payments with interest, a decision affirmed by the HLURB and later the Office of the President. The Supreme Court initially dismissed CFRC’s petition for certiorari. CFRC filed this motion for reconsideration, arguing the case involved the interpretation of P.D. No. 957 and that the Sevillas’ failure to give prior notice of desistance precluded refund under Section 23.

ISSUE

Whether the Sevillas are entitled to a refund of their installment payments under Section 23 of P.D. No. 957 despite not giving a separate, prior notice of their desistance to CFRC.

RULING

Yes. The Supreme Court denied the motion for reconsideration and affirmed the rulings of the administrative bodies. The Court held that Section 23 of P.D. No. 957 does not require a separate, prior notice as a condition precedent for a buyer to validly desist from payment and claim a refund. The notice and the demand for reimbursement can be made in a single communication. The Sevillas’ letter of November 5, 1985, which detailed CFRC’s violations and requested a refund, sufficiently complied with this requirement.
The legal logic centers on the protective intent of P.D. No. 957 for subdivision lot buyers. The Court emphasized that the law is a social legislation designed to shield buyers from fraudulent practices by developers. Given the factual findings—upheld by the HLURB and the Office of the President—that CFRC failed to develop the project and sold the lot despite a defective title (lis pendens and mortgage), the buyer’s right to refund under Section 23 is triggered. The developer’s failure is the primary cause for desistance, not mere buyer default. The Court also noted that administrative findings of fact, when supported by substantial evidence, are accorded finality. On the ancillary issue of excluding delinquency interest from the refund, the Court, leaning towards substantial justice over technicality, agreed it should be excluded as expressly stated in Section 23.