G.R. No. 233737 , February 03, 2021
STAR ASSET MANAGEMENT ROPOAS, INC., SUBSTITUTED BY DALLAS ENERGY AND PETROLEUM CORPORATION, PETITIONER, VS. REGISTER OF DEEDS OF DAVAO CITY AND FOOTHILLS REALTY DEVELOPMENT CORPORATION REPRESENTED BY MARYLINE C. LIM, RESPONDENT.

FACTS

The case involves three parcels of land previously registered in the name of Star Asset Management Ropoas, Inc. (Star Asset). The properties were originally owned by Davao Goldland Development Corporation (Goldland), foreclosed by Philippine Bank of Communication, and eventually acquired by Star Asset from Unimark Investments Corporation. Star Asset and Goldland entered into a Compromise Agreement whereby Star Asset undertook to sell back the properties to Goldland under a payment schedule. Goldland failed to comply with its obligations. On March 21, 2012, Star Asset cancelled the Compromise Agreement. The following day, March 22, 2012, Foothills Realty and Development Corporation (Foothills Realty), as successor-in-interest of Goldland, caused the annotation of an adverse claim on the titles. Star Asset filed a Petition for Cancellation of the Adverse Claim. Subsequently, Star Asset sold its interests to Dallas Energy and Petroleum Corporation (Dallas Energy), which was substituted as petitioner, and new titles were issued with the adverse claim carried over. Foothills Realty opposed the cancellation, arguing the Compromise Agreement was a contract to sell and its cancellation did not comply with the notarial rescission and refund requirements of Republic Act No. 6552 (the Maceda Law). The Regional Trial Court denied the petition for cancellation, ruling the Maceda Law applied and the agreement was improperly cancelled. The Court of Appeals affirmed this decision.

ISSUE

Whether the trial court’s refusal to cancel the adverse claim annotated on the subject Transfer Certificates of Title is correct.

RULING

No. The petition is granted. The Supreme Court ruled that the Maceda Law is not applicable in this case. The Compromise Agreement involved a “buy-back of foreclosed property” arrangement, which is not a sale on installment of a residential lot or building by a developer under the coverage of the Maceda Law. The law applies to transactions where the seller is a commercial developer; here, Star Asset was not a developer but an entity that acquired a foreclosed property. Since the Maceda Law does not apply, the cancellation of the Compromise Agreement was valid upon Goldland’s default. Consequently, Foothills Realty’s adverse claim, which was anchored on the cancelled agreement, ceased to have any legal basis. The Court ordered the cancellation of the adverse claim annotated on the titles.