Case Digest (G.R. No. 205838)
Facts:
In Joseph Harry Walter Poole-Blunden v. Union Bank of the Philippines, decided on November 29, 2017 under the 1987 Constitution, petitioner Poole-Blunden responded to a March 2001 Manila Bulletin ad by UnionBank offering for public auction a foreclosed condominium unit, Unit 2-C of T-Tower Condominium, Makati City, advertised as 95 square meters. After inspecting the unit’s irregular shape and noting its repair needs, he bid and won at ₱2,650,000, executed a Contract to Sell on May 7, 2001 with a 10% down payment and 15-year balance at 15% interest. By July 2003 he fully paid ₱3,257,142.49 and occupied the unit. In late 2003, while planning renovations, he measured roughly only about 70 sq. m. rather than the advertised 95 sq. m. A letter to UnionBank in July 2004 met with reliance on HLURB-approved figures that included terrace and common areas. An independent geodetic survey on July 12, 2005 certified the actual floor area as only 74.4 sq. m. Poole-Blunden filed for rescissionCase Digest (G.R. No. 205838)
Facts:
- Parties and Property
- Petitioner Joseph Harry Walter Poole-Blunden (Poole-Blunden) saw Union Bank of the Philippines’ (UnionBank) March 2001 Manila Bulletin advertisement for the foreclosure sale of Unit 2-C, T-Tower Condominium, Makati City.
- UnionBank acquired the unit through foreclosure of the developer’s loan.
- Auction, Contract and Payments
- The unit was advertised to have an area of 95 square meters.
- Poole-Blunden inspected the unit before auction—its irregular shape, circular terrace, damaged ceiling and floor—but did not question the advertised area.
- He won the auction with a P2,650,000 bid and entered into a May 7, 2001 Contract to Sell: 10% down payment; 15-year balance; 15% annual interest.
- He occupied the unit in June 2001 and fully paid P3,257,142.49 by July 20, 2003.
- Discovery of Discrepancy and Correspondence
- Late 2003, while planning renovations, Poole-Blunden’s rough measurement indicated only about 70 sqm.
- On July 12, 2004, he wrote UnionBank for rescission if the unit was under 95 sqm.
- UnionBank’s December 6, 2004 letter claimed the 95 sqm included terrace and common areas per HLURB, HOA, and its appraisers.
- Petitioner then commissioned an independent survey: Engr. Tagal certified the actual interior area as 74.4 sqm (survey delivered July 12, 2005).
- UnionBank’s February 1, 2006 letter reiterated its position that the 95 sqm comprised 60 sqm unit area plus 38 sqm common share.
- Lower Court Proceedings
- Poole-Blunden filed a Complaint for Rescission of Contract and Damages in RTC Makati.
- April 20, 2010: RTC dismissed the complaint for lack of merit.
- November 15, 2012: Court of Appeals (CA) affirmed; invoked the “as-is-where-is” clause (Section 12 of the Contract) and Article 1542 of the Civil Code; denied fraud.
- February 12, 2013: CA denied motion for reconsideration.
- Supreme Court Petition
- Petitioner filed a Rule 45 petition before the Supreme Court, alleging fraud in the misrepresentation of the unit’s area, contesting the as-is-where-is clause and the application of Article 1542.
Issues:
- Did UnionBank commit fraud vitiating Poole-Blunden’s consent by misrepresenting the condominium unit’s true interior area?
- Can UnionBank rely on the as-is-where-is clause and Article 1542 of the Civil Code to bar rescission of the Contract to Sell?
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)