G.R. No. 181206 - Megaworld Globus Asia, Inc. vs. Tanseco

On July 7, 1995, Megaworld Globus Asia, Inc. (Seller) and Mila S. Tanseco (Buyer) executed a contract for a 224-sqm condominium unit in “The Salcedo Park,” Makati City, at a total price of ₱16,802,037.32.
Payment terms provided:

30% less reservation fee of ₱100,000 by post-dated check on July 14, 1995 (₱4,940,611.19);
₱9,241,120.50 in thirty equal monthly installments of ₱308,037.35 (Aug 14, 1995–Jan 14, 1998);
Balance of ₱2,520,305.63 on October 31, 1998 (delivery date) or within seven days of earlier completion.

Section 4 (Construction Schedule) stipulated completion and delivery not later than October 31, 1998, with a six-month grace period to April 30, 1999, except for specified force majeure events, and reserved the Seller’s right to withdraw and refund payments without interest.

Tanseco paid all installments due through January 1998, withholding the balance pending delivery.
Megaworld failed to deliver by October 31, 1998 or by the April 30, 1999 grace-period deadline.
On April 23, 2002, Megaworld issued a notice of turnover; on May 6, 2002, Tanseco demanded refund of ₱14,281,731.70 plus 12% per annum interest from April 30, 1999.
Unheeded demand led Tanseco to file (June 5, 2002) with the HLURB a complaint for rescission, reimbursement, and damages.

HLURB Arbiter (May 28, 2003) dismissed the complaint for lack of cause, ruling delivery was effected and ordering Tanseco to pay the balance plus moral, exemplary damages (₱25,000 each), and attorney’s fees (₱25,000).
HLURB Board (Nov 28, 2003) affirmed on ground of laches, deleting the damage awards.
Office of the President (Apr 28, 2006 decision; Aug 30, 2006 resolution) dismissed Tanseco’s appeal for failure to show grave abuse of discretion.
Court of Appeals (Sept 28, 2007) granted Tanseco’s petition: rescinded the contract; ordered refund of ₱14,281,731.70 with 12% per annum interest from October 31, 1998; awarded exemplary damages ₱200,000, attorney’s fees ₱200,000, and costs.
Megaworld filed a petition for certiorari under Rule 45 before the Supreme Court.

Whether a judicial or extrajudicial demand was necessary to place the Seller in default when the contract fixed the delivery date.
Whether the 1997 Asian financial crisis constituted a fortuitous event excusing the Seller’s delay under Article 1174 of the Civil Code.
Whether Tanseco’s claim was barred by laches due to the belated demand for rescission and refund.
Whether specific performance or rescission/cancellation was the proper remedy for the Seller’s failure to deliver.
What remedies—interest rates, exemplary damages, attorney’s fees, and costs—were appropriate under the contract, Civil Code, and P.D. 957.