Facts:

The case involves the AFP Retirement and Separation Benefits System (AFPRSBS) as the petitioner and Eduardo Sanvictores as the respondent. The events leading to the case began in 1994 when Prime East Properties, Inc. (PEPI), formerly known as Antipole Properties, Inc., offered to sell a parcel of land to Sanvictores on an installment basis. The property, located in Village East Executive Homes, Tayuman, Pantok, Binangonan, Rizal, was designated as Lot 5, Block 64, Phase II, covering approximately 204 square meters. Sanvictores made a down payment of ₱81,949.04 on April 20, 1994, and a Contract to Sell was executed on June 9, 1994, between PEPI and AFPRSBS as the sellers and Sanvictores as the buyer. By February 27, 1999, Sanvictores had fully paid the purchase price of ₱534,378.79. However, despite the full payment, PEPI and AFPRSBS failed to execute the deed of absolute sale and deliver the title to Sanvictores.

On September 6, 2000, Sanvictores demanded the execution of ...

Facts:

Background of the Transaction

• PEPI (formerly Antipole Properties, Inc.) offered Eduardo Sanvictores a parcel of land on an installment basis in Village East Executive Homes, Tayuman, Pantok, Binangonan, Rizal.
• The subject property was identified as Lot 5, Block 64, Phase II, covering approximately 204 square meters.
• Sanvictores initially paid a clown payment of P81,949.04 on April 20, 1994, and later settled the full purchase price of P534,378.79 on February 27, 1999.

Execution of the Contract and Subsequent Developments

• On June 9, 1994, a Contract to Sell was executed by and between PEPI (and AFPRSBS as co-entity) and Sanvictores.
• Despite full payment by Sanvictores, PEPI and AFPRSBS failed to execute the deed of absolute sale and deliver the title of the property.
• On September 6, 2000, Sanvictores demanded the execution of the deed of sale and delivery of the transfer certificate of title, but PEPI blamed the delay on the title being encumbered by a mortgage with the Philippine National Bank (PNB).

Filing of Complaint and Proceedings Before HLRUB

• After a period of four years of non-communication from PEPI regarding the title, Sanvictores filed a complaint for:
• Rescission of the contract to sell
• Refund of his payment
• Damages and attorney’s fees
• PEPI defended itself by:
• Arguing a lack of cause of action
• Claiming force majeure for the delay in title delivery
• Asserting substantial compliance and transparency in its dealings
• AFPRSBS contended that:
• It was not the owner or developer of the subdivision but merely an ancillary entity to PEPI
• The contract to sell was solely executed by PEPI, as evidenced by the role and signatures of the representatives
• Norma Espina, alleged to have signed on its behalf, was the Treasurer of PEPI, not its authorized representative

Decisions of the Adjudicatory Bodies

• HLURB Arbiter’s Decision (March 27, 2006)
• Declared the contract to sell as rescinded due to the unjustified refusal to execute the deed of sale and the delivery of the title despite full payment
• Ordered PEPI and AFPRSBS, jointly and severally, to pay Sanvictores:
• Refund of P534,378.79 with 12% interest from the filing date

ii. Moral damages of P10,000.00 iii. Exemplary damages of P10,000.00 iv. Attorney’s fees of P10,000.00

Positions of the Parties

• AFPRSBS’s Position
• Claimed it was not the actual owner, developer, or seller of the property
• Asserted that the contract was executed solely by PEPI, as shown by the signature of Norma Espina
• Relied on Article 1311 of the Civil Code, which limits contractual effects to the parties involved
• Argued that if liable, its obligation would be joint (not solidary) and should not include liability for damages, administrative fines, and attorney’s fees
• Sanvictores’s Position
• Maintained that the contract clearly identified both PEPI and AFPRSBS as “Seller”
• Contended that the appearance of the signatures (Espina for PEPI and Mena for AFPRSBS) on the contract and related documents demonstrated joint and several (solidary) liability
• Asserted that AFPRSBS should not disclaim its liability by challenging the authority of its representative, as it effectively clothed its agent with apparent authority

Issue:

Nature of Liability

• Whether the contractual obligations of PEPI and AFPRSBS were joint and several (solidary) or merely joint in nature.
• Whether the designation of the parties as “Seller” (singular) in the contract unequivocally imposes solidary liability.

Validity and Effect of the Contract

• Whether AFPRSBS can disavow liability by arguing that it was not an actual signatory or principal party to the transaction.
• Whether the appearance of authorized representatives’ signatures (Espina and Mena) and the absence of any differentiation in rights indicate an intention to be jointly bound.

Administrative and Substantive Reliefs

• Whether AFPRSBS should be held liable for not only the refund of payment but also for moral and exemplary damages, costs of litigation, attorney’s fees, and an administrative fine.
• Whether the imposition of an administrative fine for violation of PD 957 is proper given the contractual breach.

Evidentiary Weight of Lower Tribunal Findings

• Whether the factual findings of the HLURB Arbiter, HLURB Board, OP, and CA were subject to reversible error due to grave abuse of discretion or misapplication of law.

Ruling:

• (Subscriber-Only)

Ratio:

• (Subscriber-Only)

Doctrine:

• (Subscriber-Only)