Case Summary (G.R. No. 207133)
Contract, payment, and alleged non‑delivery
- The parties entered into a Contract to Sell on July 25, 1995 covering a residential condominium unit (137.30 sq. m.) and the respondent separately purchased a parking slot for P600,000.00.
- Respondent paid the full purchase price for the unit (P7,519,371.80) on September 24, 1997 and made a down payment of P20,000.00 for the parking slot.
- Petitioner failed to complete and deliver the condominium unit within the project’s completion/delivery period, prompting respondent to seek relief before the HLURB.
Procedural history before HLURB and OP
HLURB ENCRFO decision, HLURB Board reversal, OP proceedings
- HLURB ENCRFO (Expanded National Capital Region Field Office) dismissed respondent’s request for rescission on October 19, 2004, concluding only minor defects existed and awarding repair or compensatory damages (P100,000), moral damages (P20,000), and attorney’s fees (P20,000); respondent was ordered to update account for parking slot.
- On appeal, the HLURB Board of Commissioners reversed ENCRFO on March 30, 2006, declaring the Contract to Sell rescinded, directing refund of P7,519,371.80 with 6% interest from extrajudicial demand, awarding attorney’s fees (P20,000), and imposing an administrative fine (P10,000) for violations of PD 957.
- Petitioner’s motion for reconsideration before the HLURB Board was denied (June 14, 2007). Petitioner then appealed to the Office of the President (OP), which initially dismissed the appeal as filed late (November 21, 2007). Petitioner filed a motion for reconsideration before the OP; the OP granted that motion and reinstated the HLURB ENCRFO decision (February 17, 2009), effectively setting aside the HLURB Board rescission order. The OP denied respondent’s motion for reconsideration (August 18, 2011).
Appeal to the Court of Appeals and Supreme Court
Court of Appeals decision and Supreme Court review
- Respondent appealed the OP’s reinstatement of the ENCRFO decision to the Court of Appeals (CA), which reversed the OP and reinstated the HLURB Board decision ordering rescission (Decision dated January 24, 2013). The CA denied petitioner’s motion for reconsideration (Resolution April 30, 2013).
- Petitioner filed a Petition for Review on Certiorari under Rule 45 to the Supreme Court. The Supreme Court resolved the case by denying the petition, thereby affirming the CA’s decision (March 9, 2015), with modification awarding moral damages of P20,000.00.
Issues Presented
Questions framed by the petition
- (1) Whether petitioner’s appeal to the Office of the President was timely.
- (2) Whether rescission of the Contract to Sell was proper under the circumstances.
Applicable legal principles
Procedural period and right to appeal; rescission standard
- Time to appeal HLURB Board decisions to the OP: PD 957 (Section 15) and PD 1344 (Section 2) provide a special 15‑day reglementary period from receipt of the decision to appeal to the OP. These statutory periods prevail over the 30‑day administrative period in Administrative Order No. 18.
- Administrative Order No. 18, Section 1: the period during which a motion for reconsideration is pending shall be deducted from the period for appeal; where a motion for reconsideration is filed on the last day of the period, the appeal must be filed within the day following receipt of denial.
- Rescission under Article 1191, Civil Code: the injured party may choose between fulfillment and rescission where an obligor fails to comply; rescission is proper where the breach renders specific performance impossible or where the breach is substantial and defeats the object of the parties’ agreement.
Court’s analysis — timeliness of appeal to OP
Application of the 15‑day rule and effect of motion for reconsideration
- The Court found that petitioner received the HLURB Board decision on April 17, 2006, and therefore had until May 2, 2006 to appeal under the 15‑day rule. Instead, petitioner filed a motion for reconsideration on April 28, 2006, which interrupted (suspended) the running of the 15‑day appeal period under Administrative Order No. 18.
- The HLURB Board denied reconsideration on June 14, 2007; petitioner received that denial on July 23, 2007. Because the motion for reconsideration had suspended the appeal period, petitioner had only the remaining four days (until July 27, 2007) within which to file the appeal to the OP. Petitioner filed on August 7, 2007—eleven days late.
- The Court affirmed dismissal of the appeal to the OP on timeliness grounds, emphasizing that procedural rules governing appeals are statutory privileges and must be complied with; exceptions and relaxation of technical rules are limited and not warranted by petitioner’s position.
Court’s analysis — propriety of rescission
Factual findings, ocular inspection report, and legal consequence of delay
- The HLURB ENCRFO ocular inspection report (May 3, 2002) showed the unit still incomplete (absence of kitchen cabinets/fixtures; differences in flooring and baseboards; construction/amenity deficiencies) and many amenities contemplated in the approved plans unprovided as of the inspection. The license to sell originally set completion at November 1998, extended to December 1999; by August 28, 2002 the unit had not been delivered.
- The Court concluded that petitioner’s failure to finish and deliver the unit within the licensed period constituted a breach of contractual and statutory obligations. Such delay amounted to a substantial breach that defeated the purpose of the contract and thus entitled res
Case Syllabus (G.R. No. 207133)
Facts of the Case
- On July 25, 1995, respondent Jayne Yu and petitioner Swire Realty Development Corporation entered into a Contract to Sell covering one residential condominium unit: Unit 3007 of the Palace of Makati, located at P. Burgos corner Caceres Sts., Makati City.
- The condominium unit had an area of 137.30 square meters and the total contract price was P7,519,371.80, payable in equal monthly installments until September 24, 1997.
- Respondent separately purchased a parking slot in the same condominium building for P600,000.00.
- On September 24, 1997, respondent paid the full purchase price of P7,519,371.80 for the unit and made a down payment of P20,000.00 for the parking slot.
- Petitioner, despite receipt of the purchase price, failed to complete and deliver the condominium unit within the agreed or licensed period, prompting respondent to seek relief before the Housing and Land Use Regulatory Board (HLURB), Expanded National Capital Region Field Office (ENCRFO).
HLURB ENCRFO Decision (October 19, 2004)
- The HLURB ENCRFO dismissed respondent’s complaint insofar as rescission, holding that rescission is not permitted for slight or casual breaches but only for substantial and fundamental breaches that defeat the object of the parties.
- ENCRFO ordered petitioner to finish the subject unit as identified in the inspection report.
- ENCRFO directed petitioner to either pay respondent P100,000.00 as compensatory damages for minor irreversible defects or, alternatively, to conduct necessary repairs to conform the unit to intended specifications.
- ENCRFO awarded moral damages of P20,000.00 and attorney’s fees of P20,000.00 to respondent.
- ENCRFO directed respondent to immediately update her account concerning the parking slot without imposition of interest, surcharges, or penalties.
- All other claims and counterclaims were dismissed for lack of merit.
HLURB Board of Commissioners Decision (March 30, 2006) and Rationale
- Respondent appealed to the HLURB Board of Commissioners, which reversed and set aside the ENCRFO decision and ordered rescission of the Contract to Sell.
- The Board relied on the ocular inspection report and factual findings showing that amenities under the approved plan had not been provided as of May 3, 2002, and that the unit had not been delivered to respondent as of August 28, 2002—beyond the period of development of December 1999 under the license to sell.
- The Board characterized the delay in completion of the project and delivery of the unit as breaches of statutory and contractual obligations entitling respondent to rescind the contract, demand refund, and payment of damages.
- The Board found petitioner liable to administrative fine for delay in completion contrary to law.
- The Board’s dispositive orders:
- Declared the Contract to Sell rescinded.
- Directed petitioner to refund P7,519,371.80 to respondent at 6% per annum from the time of extrajudicial demand on January 5, 2001, subject to computation and correct filing fee.
- Directed payment of attorney’s fees of P20,000.00.
- Imposed an administrative fine of P10,000.00 for violation of Section 20 in relation to Section 38 of P.D. No. 957.
Post-Board Proceedings Before the Office of the President (OP)
- Petitioner moved for reconsideration of the HLURB Board decision; the Board denied reconsideration in a Resolution dated June 14, 2007.
- Petitioner filed an appeal to the Office of the President (OP) on August 7, 2007.
- On November 21, 2007, the OP, through Deputy Executive Secretary Manuel Gaite, dismissed petitioner’s appeal as untimely. The OP found:
- Petitioner received the HLURB Board decision on April 17, 2006, and had fifteen (15) days from receipt to file an appeal to the OP pursuant to Section 15 of P.D. No. 957 and Section 2 of P.D. No. 1344.
- Instead of appealing, petitioner filed a Motion for Reconsideration on April 28, 2006, which interrupted the 15-day appeal period.
- Petitioner received the HLURB Resolution denying its Motion for Reconsideration on July 23, 2007, and therefore had only four (4) days (until July 27, 2007) to appeal to the OP; petitioner filed on August 7, 2007, eleven days late.
- The OP concluded it need not reach the merits because the appeal was filed out of time, and thus affirmed the HLURB Board decision.
- Petitioner filed a motion for reconsideration of the OP dismissal.
- In a Resolution dated February 17, 2009, the OP, through Executive Secretary Eduardo Ermita, granted petitioner’s motion for reconsideration, set aside the November 21, 2007 OP decision, and reinstated the HLURB ENCRFO Decision dated October 19, 2004—finding the ENCRFO decision more in accord with the facts, law, and jurisprudence.
- Respondent sought reconsideration of the OP’s February 17, 2009 resolution; the OP denied such reconsideration in a Resolution dated August 18, 2011.
Court of Appeals Proceedings and Ruling (January 24, 2013)
- Respondent elevated the matter to the Court of Appeals (CA) after the OP denial of reconsideration.
- On January 24, 2013, the CA granted respondent’s petition, reversed and set aside the OP