G.R. No. 195619 Case Digest

G.R. No. 195619, September 5, 2012

Planters Development Bank, petitioner

vs Julie Chandumal, respondent

Ponente: Reyes

Facts:

BF Homes and Julie Chandumal entered into a contract to sell a parcel of land located in Las Pinas. Later, BF Homes sold to PDB all its rights over the contract.

Chandumal paid her monthly amortizations until she defaulted in her payments. So, PDB sent a notice to Chandumal with a demand to vacate the land within 30days, otherwise all of her rights will be extinguished and the contract will be terminated and deemed rescinded. In spite of the demand, Chandumal failed to settle her account.

PDB filed an action for judicial confirmation of notarial rescission and delivery of possession but still Chandumal refused to do so. Summons were then issued and served by deputy sheriff Galing but its was unavailing as she was always out of her house on the dates the summons were served.

RTC then issued an order granting the motion of PDB. Chandumal filed an urgent motion to set aside order of default and to admit attached answer. Chandumal said that she did not receive the summons and was not notified of the same and her failure to file an answer within the reglementary period was due to fraud. RTC denied Chandumal's motion to set aside the order of default.

Chandumal appealed to the CA. CA nullified the RTC's decision.

Issue: (1) Whether there was valid substituted service of summons? (2) Whether Chandumal voluntarily submitted to the jurisdiction of the RTC? (3) Whether there was proper rescission by notarial act of the contract to sell?

Held:

(1) Correctly ruled that the sheriff’s return failed to justify a resort to substituted service of summons. According to the CA, the Return of Summons does not specifically show or indicate in detail the actual exertion of efforts or any positive step taken by the officer or process server in attempting to serve the summons personally to the defendant.

(2) The Court notes that aside from the allegation that she did not receive any summons, Chandumal’s motion to set aside order of default and to admit attached answer failed to positively assert the trial court lack of jurisdiction. In fact, what was set forth therein was the substantial claim that PDB failed to comply with the requirements of R.A. No. 6552 on payment of cash surrender value, which already delves into the merits of PDB’s cause of action. In addition, Chandumal even appealed the RTC decision to the CA, an act which demonstrates her recognition of the trial court’s jurisdiction to render said judgment.

(3) R.A. No. 6552 recognizes the right of the seller to cancel the contract but any such cancellation must be done in conformity with the requirements therein prescribed. In addition to the notarial act of rescission, the seller is required to refund to the buyer the cash surrender value of the payments on the property. The actual cancellation of the contract can only be deemed to take place upon the expiry of a thirty (30)-day period following the receipt by the buyer of the notice of cancellation or demand for rescission by a notarial act and the full payment of the cash surrender value.

Petition is denied.