Case Digest (G.R. No. 152122)
Facts:
In Home Guaranty Corporation v. Manlapaz, petitioner Home Guaranty Corporation (HGC) joined Vive Eagle Land, Inc. (VELI) and Planters Development Bank (the Bank) in an Asset Pool Formation and Trust Agreement dated September 20, 1995 to develop Eagle Crest Village in Baguio City, including Lot 2, Block 5, Phase III (the disputed property). Under the agreement, VELI sold Housing and Development Participation Certificates to investors, the Bank held titles in trust, and HGC guaranteed redemption of those certificates up to ₱130 million. After project delays, the Asset Pool was declared in default, and on August 19, 1998, HGC paid ₱135,691,506.85 to the Bank and received a Deed of Assignment and Conveyance transferring ownership of the Asset Pool properties, including the disputed lot. Prior to this, on January 8, 1998, VELI sold most Village lots to First La Paloma Properties, Inc. (FLPPI), and on June 22, 1998, FLPPI, through its president Marcelino Yumol, contracted to sell theCase Digest (G.R. No. 152122)
Facts:
- Asset Pool Formation and Contracts
- On September 20, 1995, Vive Eagle Land, Inc. (VELI), Planters Development Bank (Bank) and Home Guaranty Corporation (HGC) entered into an Asset Pool Formation and Trust Agreement covering Eagle Crest Village lots, including Lot 2, Block 5, Phase III (166 sqm). HGC guaranteed P130 million in Housing and Development Participation Certificates; the Bank held title as trustee.
- On January 8, 1998, VELI contracted to sell most Village lots to First La Paloma Properties, Inc. (FLPPI). On June 22, 1998, FLPPI sold the disputed lot to Elvira S. Manlapaz for P913,000.
- Default, Assignment and Subsequent Agreements
- Due to development delay, the Asset Pool defaulted. On August 19, 1998, after HGC paid P135,691,506.85 under its guaranty, the Bank executed a Deed of Assignment and Conveyance transferring ownership of all Asset Pool properties, including the disputed lot, to HGC.
- On October 8, 1998, VELI, FLPPI and HGC executed a Memorandum of Agreement by which FLPPI assumed payment of P153,029,200 to HGC, superseding the January 8, 1998 contract. On October 15, 1998, HGC and FLPPI executed a Contract to Sell; FLPPI’s failure to pay led HGC to cancel this contract on November 15, 2000.
- Administrative and Judicial Proceedings
- Manlapaz filed a complaint with the HLURB–Legal Services Group (LSG) in 2002, seeking delivery of title from FLPPI and damages. The LSG in 2004 dismissed claims against VELI and the Bank, found HGC liable under PD No. 957 to deliver the title.
- In October 2005 the HLURB Board of Commissioners reversed the LSG, holding only FLPPI liable and ordering it to refund Manlapaz with damages. The Office of the President (OP) in June 2009 affirmed the BOC decision, rejecting Manlapaz’s claims against HGC. The Court of Appeals (CA) in April 2012 reinstated the LSG decision, ordering HGC to convey the lot to Manlapaz and FLPPI to turn over her payments to HGC with interest.
Issues:
- Whether HGC is under obligation to execute the deed of absolute sale and deliver the title to Manlapaz.
- Whether Manlapaz qualifies as an “innocent purchaser for value” protected by PD No. 957.
- Effect of privity of contracts among VELI, FLPPI and HGC on Manlapaz’s rights.
- Proper remedy for HGC’s guaranty payment and FLPPI’s default.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)