G.R. No. 222897 - Sta. Lucia Realty and Development, Incorporated vs. Edsel B. Lumawag, AFP Retirement and Separation Benefits System, and Lourdes Pearce

In August 1991, AFP Retirement and Separation Benefits System (AFP Retirement System) sold Lot 20 (240 sq m) in Citadella Subdivision, Las Piñas City, to Edsel B. Lumawag for ₱540,000 payable over ten years.
After full payment, Edsel demanded execution of the final deed of sale, transfer of title, and delivery of possession; AFP Retirement System failed to comply.

Lourdes Pearce, owner of adjoining Lot 21, constructed her house encroaching 20 sq m on Lot 20.
Edsel sued AFP Retirement System and Lourdes for title delivery, possession, and damages; AFP Retirement System suggested lot exchange, admitted non‐execution of the deed due to re‐mapping caused by Lourdes’s encroachment.

HLURB Arbiter (July 5, 2005) ordered AFP Retirement System to execute deed or exchange lots, deliver title to Edsel, and pay moral (₱100,000), exemplary (₱30,000), attorney’s fees (₱30,000), and refund excess payment with 12% interest; ordered Lourdes to pay moral (₱30,000) and attorney’s fees (₱10,000); and Sta. Lucia Realty to pay Lourdes moral (₱100,000), exemplary (₱30,000), attorney’s fees (₱30,000), and expenses.
HLURB Board of Commissioners (May 25, 2006) dismissed appeals and affirmed the Arbiter.

OP Decision (October 23, 2009) affirmed the HLURB decisions; OP Resolution (June 2, 2011) denied motions for reconsideration.

CA Decision (June 26, 2015) in CA-G.R. SP No. 120161 affirmed HLURB and OP findings, modifying interest on AFP Retirement System’s refund to 6% per annum.
CA Resolution (February 3, 2016) denied motions for reconsideration.

Did the CA correctly affirm AFP Retirement System’s liability for moral and exemplary damages and attorney’s fees to Edsel?
Did the CA correctly affirm that Lourdes Pearce is a builder in good faith?
Should Sta. Lucia Realty be held liable to Lourdes for moral and exemplary damages and attorney’s fees?