Case Digest (G.R. No. 168646)
Facts:
Luzon Development Bank v. Angeles Catherine Enriquez, G.R. No. 168646; Delta Development and Management Services, Inc. v. Angeles Catherine Enriquez and Luzon Development Bank, G.R. No. 168666, January 21, 2011, Supreme Court First Division, Del Castillo, J., writing for the Court.The dispute arises from a house-and-lot (Lot 4, Delta Homes I, Cavite) owned by Ricardo De Leon and developed by petitioner Delta Development and Management Services, Inc. (DELTA). DELTA and De Leon obtained a loan from petitioner Luzon Development Bank (BANK) in 1995 secured by a real estate mortgage (REM) annotated on the Transfer Certificate of Title (TCT) covering Lot 4. DELTA obtained HLURB registration and a license to sell for Delta Homes I. In 1997 DELTA executed a Contract to Sell with respondent Angeles Catherine Enriquez (Enriquez) for Lot 4; Enriquez paid installments but did not complete full payment. The Contract to Sell expressly reserved title in DELTA until full payment and allowed DELTA to void the contract after specified missed payments.
When DELTA defaulted on the loan, DELTA and the BANK executed a dacion en pago (assignment in payment) on September 30, 1998 assigning several subdivision lots, including Lot 4, to the BANK as full payment of the indebtedness. The assignment was not annotated on Lot 4’s TCT, and Enriquez was not informed of the dacion.
Enriquez filed an administrative complaint with the HLURB alleging price-ceiling violations and failure to secure a mortgage clearance; the HLURB Arbiter ordered DELTA to accept payment of the balance and deliver title free of liens upon full payment, and awarded damages and fines. On appeal the HLURB Board reduced the monetary awards, found DELTA liable for an administrative fine for violating PD No. 957 (PD 957) Section 18 for mortgaging without HLURB clearance, but modified other relief; the Office of the President (OP) affirmed the HLURB rulings. The BANK and DELTA separately sought relief from the Court of Appeals (CA); the BANK appealed the OP decision, and DELTA likewise petitioned.
The CA held that DELTA’s Contract to Sell had effectively conveyed ownership of Lot 4 to Enriquez and therefore the dacion en pago was invalid as to that lot; it directed DELTA to pay the BANK the value of Lot 4 (because DELTA purportedly could no longer convey it to the...(Subscriber-Only)
Issues:
- Whether the Contract to Sell conveyed ownership of Lot 4 to Enriquez.
- Whether the dacion en pago extinguished DELTA’s loan obligation such that DELTA no longer owes the BANK with respect to Lot 4.
- Whether the BANK is entitled to exemplary damages and attorney’s fees for being compelled to litigate.
- What is the effect of Enriquez’s failure to pursue her claims (i.e., her not filing memoranda) on her obligation to ...(Subscriber-Only)
Ruling:
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Ratio:
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Doctrine:
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