Case Digest (G.R. No. 176217)
Facts:
Sta. Lucia Realty Development, Inc. v. Romeo Uyecio, Amaris Uyecio, Reynaldo Uyecio and Manuel Uyecio, G.R. No. 176217, August 13, 2008, Supreme Court Second Division, Carpio Morales, J., writing for the Court.Sta. Lucia Realty Development, Inc. (petitioner) developed "The Royale Tagaytay Estates" in Alfonso, Cavite, and marketed Phase II lots with brochures promising specific amenities (church, grand clubhouse, landscaped gardens and promenade, basketball and tennis courts, adult and kiddie pools, multipurpose hall, perimeter fence, cemented roads/sidewalks, storm drainage, electrical facilities including mercury street lamps, centralized water system, concrete posts, grand entrance, and others). Respondents Romeo, Amaris, Reynaldo and Manuel Uyecio entered into Contracts to Sell dated May 21, 1999 for seven Phase II lots, paid P240,000 downpayments each and agreed to pay the P960,000 balance in ten years at 21% interest; they paid amortizations until April 2001 then suspended payments because the project was not completed by the promised September 1999 date and the advertised amenities remained uncompleted.
Respondents sent petitioner a letter demanding completion and stating suspension of payments for "contractual breach." Petitioner countered with letters asserting respondents were in default for nonpayment from March 2001 through third quarter 2002. On August 22, 2002 respondents filed a complaint before the Housing and Land Use Regulatory Board (HLURB) Regional Field Office No. IV seeking completion within six months or, alternatively, refund of total payments with 21% interest from February 1999, plus moral and exemplary damages and attorney's fees.
An HLURB ocular inspection (Dec. 3, 2002) and its engineer's report found many Phase II amenities unprovided or incomplete (church, clubhouse, courts, pools, perimeter wall, landscaped promenade, electrical facilities and nonoperational water tanks; no sewerage treatment). Petitioner submitted its project engineer's report claiming near-completion of earthworks, concrete and drainage and 98% of water distribution, but admitted the electrical distribution and perimeter fence were substantially incomplete; petitioner disclaimed responsibility for advertising materials prepared by a separate marketing firm and relied on the availability of HLURB-granted extension of time, citing its License to Sell and noting HLURB granted an extension to September 2004 by letter dated November 5, 2003.
By HLURB Decision dated June 23, 2003 the Regional Office ordered rescission of the Contracts to Sell, refunds to each complainant with interest at 12% per annum from filing of complaint, awards of moral and exemplary damages (P100,000 each), attorney's fees (P50,000 total) and an administrative fine (P20,000) for violations of P.D. 957. The HLURB Board of Commissioners (First Division) denied petition for review (Dec. 5, 2003; Res. Mar. 31, 2004). The Office of the President affirmed the HLURB decision. The ...(Subscriber-Only)
Issues:
- Are the factual findings of the HLURB, as affirmed by the Office of the President and the Court of Appeals, subject to disturbance by this Court?
- Were respondents justified in suspending payments under the Contracts to Sell because petitioner failed to complete the subdivision according to the announced timetable?
- Is rescission under Article 1191 of the Civil Code the proper remedy for breach in a contract to sell, or is cancellation the appropriate relief?
- Were the awards of moral and exemplary damages and attorney’s fees properly granted?
- What interest rate should appl...(Subscriber-Only)
Ruling:
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Ratio:
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Doctrine:
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