|
MEGAWORLD
GLOBUS ASIA, INC., Petitioner, - versus - MILA S. TANSECO, Respondent. |
G.R. No. 181206 Present: CORONA,* J., CARPIO
MORALES,**
Acting Chairperson, NACHURA,*** BRION, and ABAD, JJ. Promulgated: October
9, 2009 |
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D E C I S I O N
CARPIO MORALES, J.:
On July 7, 1995, petitioner Megaworld
Globus Asia, Inc. (Megaworld) and respondent Mila S. Tanseco (Tanseco) entered
into a Contract to Buy and Sell[1]
a 224 square-meter (more or less) condominium unit at a pre-selling project,
“The Salcedo Park,” located along Senator Gil Puyat Avenue, Makati City.
The purchase price was P16,802,037.32,
to be paid as follows: (1) 30% less the reservation fee of P100,000, or P4,940,611.19,
by postdated check payable on July 14, 1995; (2) P9,241,120.50 through
30 equal monthly installments of P308,037.35 from August 14, 1995 to
January 14, 1998; and (3) the balance of P2,520,305.63 on October 31,
1998, the stipulated delivery date of the unit; provided that if the construction is completed earlier, Tanseco would
pay the balance within seven days from receipt of a notice of turnover.
Section 4 of the Contract to Buy and
Sell provided for the construction schedule as follows:
4. CONSTRUCTION
SCHEDULE – The construction of the Project and the unit/s herein
purchased shall be completed and delivered not later than October 31, 1998
with additional grace period of six (6) months within which to complete the
Project and the unit/s, barring delays due to fire, earthquakes, the
elements, acts of God, war, civil disturbances, strikes or other labor disturbances,
government and economic controls making it, among others, impossible or
difficult to obtain the necessary materials, acts of third person, or any other
cause or conditions beyond the control of the SELLER. In this event, the completion and delivery of
the unit are deemed extended accordingly without liability on the part of the
SELLER. The foregoing notwithstanding,
the SELLER reserves the right to withdraw from this transaction and refund to
the BUYER without interest the amounts received from him under this contract if
for any reason not attributable to SELLER, such as but not limited to fire,
storms, floods, earthquakes, rebellion, insurrection, wars, coup de etat, civil
disturbances or for other reasons beyond its control, the Project may not be
completed or it can only be completed at a financial loss to the SELLER. In any event, all construction on or of the
Project shall remain the property of the SELLER. (Underscoring supplied)
Tanseco paid all installments due up
to January, 1998, leaving unpaid the balance of P2,520,305.63 pending
delivery of the unit.[2] Megaworld, however, failed to deliver the
unit within the stipulated period on October 31, 1998 or April 30, 1999, the
last day of the six-month grace period.
A few days shy of three years later, Megaworld,
by notice dated April 23, 2002 (notice of turnover), informed Tanseco that the
unit was ready for inspection preparatory to delivery.[3] Tanseco replied through counsel, by letter of
May 6, 2002, that in view of Megaworld’s failure to deliver the unit on time,
she was demanding the return of P14,281,731.70 representing the total installment
payment she had made, with interest at 12% per annum from April 30,
1999, the expiration of the six-month grace period. Tanseco pointed out that none of the excepted
causes of delay existed.[4]
Her demand having been unheeded,
Tanseco filed on June 5, 2002 with the Housing and Land Use Regulatory Board’s
(HLURB) Expanded National Capital Region Field Office a complaint against
Megaworld for rescission of contract, refund of payment, and damages.[5]
In its Answer, Megaworld attributed the
delay to the 1997 Asian financial crisis which was beyond its control; and argued
that default had not set in, Tanseco not having made any judicial or extrajudicial
demand for delivery before receipt of the notice of turnover.[6]
By Decision of May 28, 2003,[7]
the HLURB Arbiter dismissed Tanseco’s complaint for lack of cause of action,
finding that Megaworld had effected delivery by the notice of turnover before
Tanseco made a demand. Tanseco was thereupon
ordered to pay Megaworld the balance of the purchase price, plus P25,000
as moral damages, P25,000 as exemplary damages, and P25,000 as
attorney’s fees.
On appeal by Tanseco, the HLURB Board
of Commissioners, by Decision of November 28, 2003,[8]
sustained the HLURB Arbiter’s Decision on the ground of laches for failure to
demand rescission when the right thereto accrued. It deleted the award of damages,
however. Tanseco’s Motion for
Reconsideration having been denied,[9]
she appealed to the Office of the President which dismissed the appeal by
Decision of April 28, 2006[10]
for failure to show that the findings of the HLURB were tainted with grave
abuse of discretion. Her Motion for
Reconsideration having been denied by Resolution dated August 30, 2006,[11]
Tanseco filed a Petition for Review under Rule 43 with the Court of Appeals.[12]
By Decision
of September 28, 2007,[13]
the appellate court granted Tanseco’s petition, disposing thus:
WHEREFORE,
premises considered, petition is hereby GRANTED and the assailed May 28,
2003 decision of the HLURB Field Office, the November 28, 2003 decision of the
HLURB Board of Commissioners in HLURB Case No. REM-A-030711-0162, the April 28,
2006 Decision and
The appellate court held that under
Article 1169 of the Civil Code, no judicial or extrajudicial demand is needed
to put the obligor in default if the contract, as in the herein parties’ contract, states the date when the
obligation should be performed; that time was of the essence because Tanseco
relied on Megaworld’s promise of timely delivery when she agreed to part with
her money; that the delay should be reckoned from October 31, 1998,
there being no force majeure to
warrant the application of the April 30, 1999 alternative date; and that
specific performance could not be ordered in lieu of rescission as the right to
choose the remedy belongs to the aggrieved party.
The appellate court awarded Tanseco exemplary damages on a finding of bad faith on
the part of Megaworld in forcing her to accept its long-delayed delivery; and
attorney’s fees, she having been compelled to sue to protect her rights.
Its Motion for Reconsideration having been denied by
Resolution of January 8, 2008,[14]
Megaworld filed the present Petition for Review on Certiorari, echoing its
position before the HLURB, adding that Tanseco had not shown any basis for the
award of damages and attorney’s fees.[15]
Tanseco, on the other hand, maintained her position too,
and citing Megaworld’s bad faith which became evident when it insisted on
making the delivery despite the long delay,[16]
insisted that she deserved the award of damages and attorney’s fees.
Article 1169 of the Civil Code provides:
Art. 1169. Those obliged to deliver or to do something incur in delay from the time the obligee judicially or extrajudicially demands from them the fulfillment of their obligation.
However, the demand by the creditor shall not be necessary in order that delay may exist:
(1) When the obligation or the law expressly so declares; or
(2) When from the nature and the circumstances of the obligation it appears that the designation of the time when the thing is to be delivered or the service is to be rendered was a controlling motive for the establishment of the contract; or
(3) When demand would be useless, as when the obligor has rendered it beyond his power to perform.
In reciprocal obligations, neither party incurs in delay if the other does not comply or is not ready to comply in a proper manner with what is incumbent upon him. From the moment one of the parties fulfills his obligation, delay by the other begins. (Underscoring supplied)
The
Contract to Buy and Sell of the parties contains reciprocal obligations, i.e., to complete and deliver the
condominium unit on October 31, 1998 or
six months thereafter on the
part of Megaworld, and to pay the balance of the purchase price at or about the
time of delivery on the part of Tanseco. Compliance by Megaworld with its obligation is determinative
of compliance by Tanseco with her obligation to pay the balance of the purchase
price. Megaworld having failed to comply
with its obligation under the contract, it is liable therefor.[17]
That
Megaworld’s sending of a notice of turnover preceded Tanseco’s demand for
refund does not abate her cause. For demand
would have been useless, Megaworld admittedly having failed in its
obligation to deliver the unit on the agreed date.
Article 1174 of the Civil Code provides:
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.[18]
The Court cannot generalize the 1997 Asian financial
crisis to be unforeseeable and beyond the control of a business corporation. A real estate enterprise engaged in the
pre-selling of condominium units is concededly a master in projections on
commodities and currency movements, as well as business risks. The fluctuating movement of the Philippine
peso in the foreign exchange market is an everyday occurrence, hence, not an
instance of caso fortuito.[19] Megaworld’s excuse for its delay does not
thus lie.
As for Megaworld’s argument that Tanseco’s
claim is considered barred by laches on account of her belated demand, it does
not lie too. Laches is a creation of
equity and its application is controlled by equitable considerations.[20] It bears noting that Tanseco religiously paid
all the installments due up to January, 1998, whereas Megaworld reneged on its obligation
to deliver within the stipulated period.
A circumspect weighing of equitable considerations thus tilts the scale
of justice in favor of Tanseco.
Pursuant to Section 23 of
Presidential Decree No. 957[21] which
reads:
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 interests but excluding delinquency interests, with interest thereon at the legal rate. (Emphasis and underscoring supplied),
Tanseco is, as thus prayed for,
entitled to be reimbursed the total amount she paid Megaworld.
While the
appellate court correctly awarded P14,281,731.70 then, the interest rate should,
however, be 6% per annum accruing from the date of demand on May 6, 2002, and
then 12% per annum from the time this judgment becomes final and executory, conformably
with Eastern Shipping Lines, Inc.
v. Court of Appeals.[22]
The award of P200,000 attorney’s fees and of costs of suit is in
order too, the parties having stipulated in the Contract to Buy and Sell that
these shall be borne by the losing party in a suit based thereon,[23]
not to mention that Tanseco was compelled to retain the services of counsel to
protect her interest. And so is the
award of exemplary damages. With
pre-selling ventures mushrooming in the metropolis, there is an increasing need
to correct the insidious practice of real estate companies of proffering all
sorts of empty promises to entice innocent buyers and ensure the profitability
of their projects.
The Court finds the appellate court’s award of P200,000 as
exemplary damages excessive, however. Exemplary damages are imposed not to enrich one party or
impoverish another but to serve as a deterrent against or as a negative
incentive to curb socially deleterious actions.[24] The Court finds that P100,000 is
reasonable in this case.
Finally, since Article 1191[25]
of the Civil Code does not apply to a contract to buy and sell, the suspensive
condition of full payment of the purchase price not having occurred to trigger
the obligation to convey title, cancellation, not rescission, of the
contract is thus the correct remedy in the premises.[26]
WHEREFORE, the
challenged Decision of the Court of Appeals is, in light of the foregoing,
AFFIRMED with MODIFICATION.
As modified, the dispositive portion
of the Decision reads:
The July 7,
1995 Contract to Buy and Sell between the parties is cancelled. Petitioner, Megaworld Globus Asia, Inc., is
directed to pay respondent, Mila S. Tanseco, the amount of P14,281,731.70,
to bear 6% interest per annum starting May 6, 2002 and 12% interest per
annum from the time the judgment becomes final and executory; and to pay P200,000 attorney’s fees, P100,000
exemplary damages, and costs of suit.
Costs
against petitioner.
SO
ORDERED.
CONCHITA
CARPIO MORALES
Associate Justice
WE CONCUR:
|
RENATO C. CORONA Associate Justice |
ANTONIO EDUARDO B. NACHURA Associate Justice |
|
ARTURO D. BRION Associate Justice |
ROBERTO A. ABAD Associate Justice |
ATTESTATION
I attest
that the conclusions in the above Decision had been reached in consultation
before the case was assigned to the writer of the opinion of the Court’s
Division.
CONCHITA
CARPIO MORALES
Associate Justice
Acting
Chairperson
CERTIFICATION
Pursuant to
Section 13, Article VIII of the Constitution, and the Division Chairperson’s
Attestation, I certify that the conclusions in the above decision had been
reached in consultation before the case was assigned to the writer of the
opinion of the Court’s Division.
ANTONIO
T. CARPIO
Acting Chief Justice
* Additional member per Special Order No. 718 dated October 2, 2009.
** Designated Acting Chairperson per Special Order No. 690 dated September 4, 2009.
*** Additional member per Special Order No. 730 dated October 5, 2009.
[1] HLURB records, pp. 164-169.
[2]
[3]
[4]
[5]
[6]
[7]
[8]
[9]
[10] Rollo, pp. 260-263.
[11]
[12] CA rollo, pp. 8-55.
[13] Penned by Associate Justice Vicente Q. Roxas, with the concurrence of Associate Justices Josefina Guevara-Salonga and Ramon R. Garcia; CA rollo, pp. 692-714.
[14]
[15] Vide Petition, rollo, pp. 29-74.
[16] Vide Comment, id. at 432-465.
[17] Vide Leaño v. Court of Appeals, 420 Phil. 836, 848 (2001). Article 1170 of the Civil Code provides:
Art.
1170. Those who in the performance of
their obligations are guilty of fraud, negligence, or delay, and those who in
any manner contravene the tenor thereof, are liable for damages.
[18] Mondragon Leisure and Resorts Corporation v.
Court of Appeals, 499 Phil. 268, 279 (2005).
[19] Fil-Estate Properties, Inc., v. Go, G.R.
No. 165164,
[20] Heirs of Tranquilino Labiste v. Heirs of
Jose Labiste, G.R. No. 162033,
[21] REGULATING THE SALE OF SUBDIVISION LOTS AND CONDOMINIUMS, PROVIDING PENALTIES FOR VIOLATIONS THEREOF.
[22] G.R. No.
97412,
x x x x
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.
x x x x
[23] HLURB records, p. 166.
[24] Bataan Seedling Association, Inc. v. Republic of the Philippines, G.R. No. 141009, July 2, 2002, 383 SCRA 590, 600-601.
[25] Article 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 possible.
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.
[26] Vide Sta. Lucia Realty v. Romeo Uyecio, G.R. No. 176217, August 13, 2008, 562 SCRA 226, 234-235.