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FIL-ESTATE
PROPERTIES, INC., Petitioner, |
G.R. No. 165164
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- versus - |
Present: QUISUMBING, J., Chairperson, CARPIO, CARPIO
MORALES, TINGA, and VELASCO,
JR., JJ. |
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SPOUSES
GONZALO and CONSUELO GO, Respondents. |
Promulgated: August 17,
2007 |
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QUISUMBING, J.:
For review on
certiorari are the Decision[1]
dated
The basic facts
in this case are undisputed.
On P3,439,000.07 of the full contract price set at P3,620,000.00.
Because
petitioner failed to develop the condominium project, on P3,620,000 representing the lump sum price of the condominium
unit, plus interest, P100,000 attorney’s fees, and expenses of
litigation before the Housing and Land Use Regulatory Board (HLURB).
In answer,
petitioner claimed that respondents had no cause of action since the delay in
the construction of the condominium was caused by the financial crisis that hit
the Asian region, a fortuitous event over which petitioner had no control.
On
WHEREFORE,
the foregoing considered, judgment is hereby rendered as follows:
1.
Ordering the respondent, Fil-Estate
Properties, Inc., to refund to the complainants, P3,439,000.07 (the amount
proved) plus 12% interest thereon reckoned from 09 August 1999 (the date the
respondent received the demand letter) until the same is fully paid.
2. Ordering
the respondent to pay to the complainants P25,000.00
attorney’s fees as and by way of damages.
All
other claims and counterclaims are dismissed.
IT
IS SO ORDERED.[5]
The
Board of Commissioners of the HLURB denied petitioner’s petition for review and
consequent motion for reconsideration.[6] The Office of the President dismissed petitioner’s
appeal and denied its motion for reconsideration.[7]
On appeal,
asserting that both the HLURB and the Office of the President committed
reversible errors, Fil-Estate asked the Court of
Appeals to set aside the orders it is appealing.
The Court of
Appeals affirmed the actions taken by the HLURB and the Office of the President
and declared that the Asian financial crisis could not be considered a
fortuitous event and that respondents’ right is provided for in Section 23[8]
of Presidential Decree (P.D.) No. 957, otherwise known as “The Subdivision and
Condominium Buyers’ Protective Decree.” The
appellate court also noted that there was yet no crisis in 1995 and 1996 when
the project should have been started, and petitioner cannot blame the 1997
crisis for failure of the project, nor for even not starting it, because the
project should have been completed by 1997.
The appellate
court denied petitioner’s motion for reconsideration.
Hence, this
petition raising two issues for our resolution as follows:
I.
THE HONORABLE
COURT OF APPEALS ERRED IN HOLDING THAT THE ASIAN FINANCIAL CRISIS IS NOT A
FORTUITOUS EVENT THAT WOULD EXCUSE THE DELIVERY BY PETITIONER OF THE SUBJECT
CONDOMINIUM UNIT TO RESPONDENTS.
II.
THE HONORABLE
COURT OF APPEALS ERRED IN HOLDING PETITIONER LIABLE FOR THE PAYMENT OF
ATTORNEY’S FEES.[9]
On the
first issue, did the Court of Appeals err in ruling that the Asian financial crisis
was not a fortuitous event?
Petitioner,
citing Article 1174[10]
of the Civil Code, argues that the Asian financial crisis was a fortuitous event
being unforeseen or inevitable.
Petitioner likewise cites Servando
v. Philippine Steam Navigation Co.,[11]
to bolster its case. Petitioner
explains that the extreme economic exigency and extraordinary currency
fluctuations could not have been reasonably foreseen and were beyond the
contemplation of both parties when they entered the contract. Petitioner further asserts that the resultant
economic collapse of the real estate industry was unforeseen by the whole
In their
Comment, respondents submit that the instant petition be rejected outright for
the reason that petitioner has not raised any question of law in the instant
petition. The questions of whether or
not the Asian financial crisis is a fortuitous event, and whether or not
attorney’s fees should be granted, are questions of facts which the Court of Appeals
recognized as such.
Respondent
spouses reiterate that contrary to what petitioner avers,
the delay in the construction of the building was not attributable to the Asian
financial crisis which happened in 1997[13]
because petitioner did not even start the project in 1995 when it should have
done, so that it could have finished it in 1997, as stipulated in the contract.
Preliminarily,
respondents bring to the attention of this Court the strange discrepancy in the
dates of notarization of the Certification of Non-Forum Shopping and the
Affidavit of Service both notarized on
Indeed, the
question of whether or not an event is fortuitous is a question of fact. As a general rule, questions of fact may not
be raised in a petition for review for as long as there is no variance between
the findings of the lower court and the appellate court, as in this case where
the HLURB, the Office of the President, and the Court of Appeals were agreed on
the fact.
Worthy of
note, in a previous case, Asian Construction and Development Corporation v.
Philippine Commercial International Bank,[14]
the Court had said that the 1997 financial crisis that ensued in
Also, we
cannot generalize that the Asian financial crisis in 1997 was unforeseeable and
beyond the control of a business corporation.
It is unfortunate that petitioner apparently met with considerable
difficulty e.g. increase
cost of materials and labor, even before the scheduled commencement of its real
estate project as early as 1995.
However, a real estate enterprise engaged in the pre-selling of
condominium units is concededly a master in projections on commodities and
currency movements and business risks. The
fluctuating movement of the Philippine peso in the foreign exchange market is
an everyday occurrence, and fluctuations in currency exchange rates happen everyday, thus, not an instance of caso fortuito.
Are
respondents entitled to reimbursement of the amount paid, plus interest and
attorney’s fees?
Yes. Section 23 of P.D. No. 957 is clear on this
point.
It will be
noted that respondents sent a demand letter dated P3,620,000 representing the lump sum price of the condominium
unit with interest at the legal rate, and P100,000 attorney’s fees. But the respondents actually sought the
refund of P3,620,000.00, the lump sum cost of
the condominium, more than their actual payment of P3,439,000.07. We are thus constrained to award only P3,439,000.07, representing the sum of their actual payments
plus amortization interests and interest at legal rate which is 6% per annum
from the date of demand on
Moreover, we
are constrained to modify the Court of Appeals’ grant of attorney’s fees from P25,000
to P100,000 as just and equitable since respondents were compelled to
secure the services of counsel over eight years to protect their interest due
to petitioner’s delay in the performance of their clear obligation.
WHEREFORE, the petition is DENIED for
lack of merit. Petitioner is hereby ordered
(1) to reimburse respondents P3,439,000.07 at 6%
interest starting P100,000.00 attorney’s fees. Costs against petitioner.
SO ORDERED.
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LEONARDO A. QUISUMBING Associate Justice |
WE CONCUR:
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ANTONIO T. CARPIO Associate Justice |
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CONCHITA CARPIO MORALES Associate Justice |
DANTE O. TINGA Associate Justice |
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PRESBITERO J. VELASCO, JR. Associate Justice |
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A T T E S T A T I O N
I attest that the conclusions in the
above Resolution had been reached in consultation before the case was assigned
to the writer of the opinion of the Court’s Division.
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LEONARDO A. QUISUMBING Associate Justice Chairperson |
C E R T I F I C A T I O N
Pursuant to Section 13, Article VIII
of the Constitution, and the Division Chairperson’s Attestation, I certify that
the conclusions in the above Resolution had been reached in consultation before
the case was assigned to the writer of the opinion of the Court’s Division.
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REYNATO S. PUNO Chief Justice |
[1] Rollo, pp. 26-31. Penned by Associate Justice Renato C. Dacudao, with Associate Justices Edgardo F. Sundiam and Japar B. Dimaampao concurring.
[2]
[3] Art. 1475. The contract of sale is perfected at the moment there is a meeting of minds upon the thing which is the object of the contract and upon the price.
From that moment, the parties may reciprocally demand performance, subject to the provisions of the law governing the form of contracts.
[4] Art. 1191. The power to rescind obligations is implied in reciprocal ones, in case one of the obligors should not comply with what is incumbent upon him.
The injured party may choose between the fulfillment and the rescission of the obligation, with the payment of damages in either case. He may also seek rescission, even after he has chosen fulfillment, if the latter should become impossible.
The court shall decree the rescission claimed, unless there be just cause authorizing the fixing of a period.
This is understood to be without prejudice to the rights of third persons who have acquired the thing, in accordance with Articles 1385 and 1388 and the Mortgage Law.
[5] Rollo, p. 40.
[6]
[7]
[8] SEC. 23. Non-Forfeiture of Payments.
– No installment payment made by a buyer in a subdivision or condominium
project for the lot or unit he contracted to buy shall be forfeited in favor of
the owner or developer when the buyer, after due notice to the owner or
developer, desists from further payment due to the failure of the owner or
developer to develop the subdivision or condominium project according to the
approved plans and within the time limit for complying with the same. Such buyer may, at his option, be reimbursed
the total amount paid including amortization interest[s] but excluding
delinquency interests, with interest thereon at the legal rate.
[9] Rollo, p. 16.
[10] Art. 1174. Except in cases expressly specified by the law, or when it is otherwise declared by stipulation, or when the nature of the obligation requires the assumption of risk, no person shall be responsible for those events which could not be foreseen, or which though foreseen, were inevitable.
[11] Nos. L-36481-2,
[12] Rollo, pp. 16-20.
[13]
[14] G.R. No. 153827,
[15] G.R. No. 154188,
[16] Rollo, p. 26.
[17] G.R. No. 97412,
2. When an obligation, not constituting a loan or forbearance of money, is breached, an interest on the amount of damages awarded may be imposed at the discretion of the court at the rate of 6% per annum. No interest, however, shall be adjudged on unliquidated claims or damages except when or until the demand can be established with reasonable certainty. Accordingly, where the demand is established with reasonable certainty, the interest shall begin to run from the time the claim is made judicially or extrajudicially (Art. 1169, Civil Code) but when such certainty cannot be so reasonably established at the time the demand is made, the interest shall begin to run only from the date the judgment of the court is made (at which time the quantification of damages may be deemed to have been reasonably ascertained). The actual base for the computation of legal interest shall, in any case, be on the amount finally adjudged.
3. When the judgment of the court awarding a sum of money becomes final and executory, the rate of legal interest … shall be 12% per annum from such finality until its satisfaction, this interim period being deemed to be by then an equivalent to a forbearance of credit.
See
also Schmitz Transport & Brokerage Corporation v. Transport Venture,
Inc., G.R. No. 150255, April 22, 2005, 456 SCRA 557, 575; V.V. Soliven Realty Corp. v. Ong,
G.R. No. 147869, January 26, 2005, 449 SCRA 339, 350; Heirs of Ignacia Aguilar-Reyes v. Mijares,
G.R. No. 143826, August 28, 2003, 410 SCRA 97, 110-111.