Case Digest (G.R. No. 208140) Core Legal Reasoning Model
Core Legal Reasoning Model
Facts:
In CARLOS J. VALDES, GABRIEL A.S. VALDES, FATIMA DELA CONCEPCION AND ASUNCION V. MERCADO v. LA COLINA DEVELOPMENT CORPORATION, ET AL. (G.R. No. 208140, July 12, 2021), petitioners are members of the Valdes family who held shares in Bataan Resorts Corporation (BARECO), owner of several titled parcels in Bagac, Bataan. In May 1975, they sold their 4,000 BARECO shares to La Colina Development Corporation (LCDC) for ₱20 million, part in cash and part via promissory notes, secured by an Assignment of Rights on October 30, 1975, which entitled them to 40% of net proceeds from the sale of Montemar Villas subdivision lots. LCDC became sole BARECO shareholder, transferred project lands to La Colina Resorts Corporation (LCRC) for shares, and organized Montemar Beach Club, Inc. (MBCI) to develop the resort and subdivision. When LCDC and affiliates incurred heavy loans, Development Bank of the Philippines/Asset Privatization Trust foreclosed their mortgage on project lands. In 1992, LCDC, L Case Digest (G.R. No. 208140) Expanded Legal Reasoning Model
Expanded Legal Reasoning Model
Facts:
- Ownership and Initial Agreement
- The Valdes family owned 4,000 shares of Bataan Resorts Corporation (BARECO), covering several titles in Bagac, Bataan.
- On May 24, 1975, they sold these shares to La Colina Development Corporation (LCDC) for ₱20 million (₱2.5 million paid; ₱17.5 million via promissory notes).
- By an October 30, 1975 Assignment of Rights, LCDC agreed to pay the Valdeses:
- ₱3 million in LCRC shares, and
- 40% of net proceeds from the sale of Montemar Villas lots.
- LCDC reorganized BARECO, formed La Colina Resorts Corporation (LCRC) and Montemar Beach Club, Inc. (MBCI), secured loans, and began development and lot sales.
- Settlement of 1987–1990 Dispute
- In July 1987, Carlos Valdes sued LCDC for annulment/rescission or specific performance over unpaid obligations.
- By February 21, 1990 letter agreement and April 1990 dismissal, LCDC vowed to continue remitting the agreed 40% until the full ₱20 million was paid.
- 1992 New Investor Transactions
- Philcomsat submitted an August 18, 1992 Memorandum of Intent to invest and bail out LCDC/LCRC/MBCI, leading to formation of Montemar Resorts & Development Corporation (MRDC) to convert unsold lots into a golf-sports complex.
- Gabriel Valdes (attorney-in-fact) initially proposed terms; after revisions, on August 27, 1992 he signed a letter-conformity consenting to:
- Philcomsat’s entry, and
- Sale of the Valdeses’ shareholdings and unpaid seller rights for an indicative ₱35 million.
- Pursuant thereto, on August 31, 1992 LCRC and LCDC executed a Consolidated Deed of Absolute Sale to MRDC; on September 3, 1992, they and Philcomsat executed the Memorandum of Agreement (MOA) detailing the new project structure.
- Judicial Proceedings
- April 1993: Valdeses filed before RTC Balanga City a complaint for reconveyance, annulment/rescission, specific performance, and damages, securing a preliminary injunction in May 1995.
- October 26, 2009 RTC Decision declared the 1992 MOA and Deed of Sale null and void for lack of plaintiffs’ consent and bad faith.
- October 31, 2012 Court of Appeals (CA) reversed, upholding validity of the contracts and lifting the injunction; its July 16, 2013 Resolution denied reconsideration.
- This Supreme Court petition for review followed.
Issues:
- Did the Valdeses and LCDC enter a joint venture or a contract of sale?
- Was there a valid novation extinguishing LCDC’s original obligation to remit 40% of lot-sale proceeds?
- Are Philcomsat and MRDC innocent purchasers for value in good faith entitled to the properties under the 1992 contracts?
- Can the Valdeses rescind the September 3, 1992 MOA and August 31, 1992 Deed of Sale on grounds of lack of consent, bad faith, or prejudice?
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)