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REPUBLIC ACT No. 6552 AN ACT TO PROVIDE PROTECTION TO

BUYERS OF REAL ESTATE ON INSTALLMENT PAYMENTS.

Section 1.This Act shall be known as the "Realty Installment Buyer Act."Section 2.It is hereby declared a public policy to protect buyers of realestate on installment payments against onerous and oppressive conditions.Section 3.In all transactions or contracts involving the sale or financing ofreal estate on installment payments, including residential condominium

apartments but ecluding industrial lots, commercial buildings and sales totenants under Republic Act !umbered Thirtyeight hundred fortyfour, asamended by Republic Act !umbered #itythree hundred eightynine, wherethe buyer has paid at least two years of installments, the buyer is entitled tothe following rights in case he defaults in the payment of succeedinginstallments$

%a& To pay, without additional interest, the unpaid installments duewithin the total grace period earned by him which is hereby fied atthe rate of one month grace period for every one year of installmentpayments made$ 'rovided, That this right shall be eercised by thebuyer only once in every five years of the life of the contract and itsetensions, if any.

%b& If the contract is canceled, the seller shall refund to the buyer thecash surrender value of the payments on the property e(uivalent tofifty per cent of the total payments made, and, after five years ofinstallments, an additional five per cent every year but not to eceedninety per cent of the total payments made$ 'rovided, That the actualcancellation of the contract shall take place after thirty days fromreceipt by the buyer of the notice of cancellation or the demand forrescission of the contract by a notarial act and upon full payment ofthe cash surrender value to the buyer.

)own payments, deposits or options on the contract shall be included in thecomputation of the total number of installment payments made. lawphi1Section .In case where less than two years of installments were paid, theseller shall give the buyer a grace period of not less than sity days from thedate the installment became due.If the buyer fails to pay the installments due at the epiration of the graceperiod, the seller may cancel the contract after thirty days from receipt by thebuyer of the notice of cancellation or the demand for rescission of thecontract by a notarial act.Section 5.*nder #ection + and , the buyer shall have the right to sell hisrights or assign the same to another person or to reinstate the contract by

updating the account during the grace period and before actual cancellationof the contract. The deed of sale or assignment shall be done by notarial act.Section 6.The buyer shall have the right to pay in advance any installmentor the full unpaid balance of the purchase price any time without interest andto have such full payment of the purchase price annotated in the certificate oftitle covering the property.Section !.Any stipulation in any contract hereafter entered into contrary to

the provisions of #ections +, , - and , shall be null and void.Section ".If any provision of this Act is held invalid or unconstitutional, noother provision shall be affected thereby.lawphi1Section #.This Act shall take effect upon its approval.

Approved$ August /, 012/.

)I34! 5 #*!TA60& Respondent 7ourdes 8. #untay and one 9larita R. #ison entered into atransaction wherein the #untay:s threecarat diamond ring, valued at'-,-;;.;;, was delivered to #ison for sale on commission. *pon receivingthe ring, #ison eecuted and delivered to the receipt to #untay. After thelapse of a considerable time without 9larita R. #ison having returned to the

ring to her, #untay made demands on 9larita R. #ison for the return of saidelia #ison, niece of the husband of 9larita R.#ison, evidently in connivance with the latter, pledged the ring with thepetitioner )ominador )i?on@s pawnshop for '/,;;.;; without #untay:sknowledge. hen #untay found out that 9larita R. #ison pledged the ring,she filed a case of estafa against the latter with the fiscal@s office.#ubse(uently, #untay wrote a letter to )i?on on #eptember //, 01/ askingfor the return of her ring which was pledged with the latter:s pawnshop underits 'awnshop Receipt serial B !o. -;, dated =une 0-, 01/.

)i?on refused to return the ring, so #untay filed an action for its recovery withthe 9I of >anila, which declared that she had the right to its possession.The 9ourt of Appeals likewise affirmed said decision.

I##*C$ ho has the right title over the sub



been unlawfully deprived thereof may recover it from the person inpossession of the same. If the possessor of a movable lost of which theowner has been unlawfully deprived, has ac(uired it in good faith at a publicsale, the owner cannot obtain its return without reimbursing the price paidtherefor.H The only eception the law allows is when there is ac(uisition ingood faith of the possessor at a public sale, in which case the owner cannotobtain its return without, reimbursing the price. anging on to said eception

as his basis, )i?on insisted that the principle of estoppel should apply in thiscase but the #upreme 9ourt ruled otherwise.

In the present case not only has the ownership and the origin of the



narrower term than the broad language of Art. --1 %formerly & and theaccepted meaning in accordance with our



I##*C$ hether or not 8abuya had the right to rescind the contract andshould this happen, whether 7ayug should be entitled to get back theC!TIRC amount he already paidD

C7)$ 6es 8abuya could rescind the contract. !o, 7ayug should not beentitled to the entire amount he already paid.The #9$ The grace period clause should be read con



4n >arch 02, 01O/, petitioner filed 9ivil 9ase !o. -/02 against respondentspouses for rescission and damages before the Regional Trial 9ourt of'asig, Branch 0-1. Then, in its reply to '!B:s letter of ebruary 01, 01O/,petitioner demanded the return of the payments it made on the ground thatits assumption of mortgage was never approved. 4n >ay +0, 01O+, while thiscase was pending, the mortgage was foreclosed. The property wassubse(uently bought by '!B during the public auction.

4n =uly 0/, 011;, the trial court ruled that the failure of respondent spousesto deliver actual possession to petitioner entitled the latter to rescind the sale,and in view of such failure and of the denial of the latter:s assumption ofmortgage, '!B was obliged to return the payments made by the latter. 4nappeal by respondentspouses and '!B, Respondent 9ourt of Appealsreversed the trial court.

I##*C#0. hether or not there was a substantial breach of the contract between theparties warranting rescission/. hether or not there was a Emistake in paymentH made by petitioner,obligating '!B to return such payments.

C7)0. The alleged EfailureH of respondent spouses to e

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