MEGAWORLD GLOBUS ASIA, G.R. No.

181206
INC.,
Petitioner, Present:

CORONA,* J.,
CARPIO MORALES,**
- versus - Acting Chairperson,
NACHURA,***
BRION, and
ABAD, JJ.
MILA S. TANSECO,
Respondent. Promulgated:
October 9, 2009
x--------------------------------------------------x

DECISION

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
onOctober 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 Megaworlds 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 Boards (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 Tansecos

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 attorneys fees.
On appeal by Tanseco, the HLURB Board of Commissioners, by Decision of
November 28, 2003,[8] sustained the HLURB Arbiters Decision on the ground of
laches for failure to demand rescission when the right thereto accrued. It deleted
the award of damages, however. Tansecos 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 Tansecos

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 August 30,
2006 Resolution of the Office of the President in O.P. Case No. 05-I-318, are
hereby REVERSED and SET ASIDE and a new one entered:
(1) RESCINDING, as prayed for by TANSECO, the aggrieved party, the
contract to buy and sell; (2)DIRECTING MEGAWORLD TO
PAY TANSECO the amount she had paid totaling P14,281,731.70 with Twelve
(12%) Percent interest per annum from October 31, 1998;
(3)ORDERING MEGAWORLD TO PAY TANSECO P200,000.00 by way of
exemplary damages; (4) ORDERING MEGAWORLD TO
PAY TANSECO P200,000.00 as attorneys fees; and
(5) ORDERING MEGAWORLD TO PAY TANSECO the cost of
suit. (Emphasis in the original; underscoring supplied)

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 Megaworlds 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 attorneys 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 attorneys fees.[15]

Tanseco, on the other hand, maintained her position too, and citing Megaworlds
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 attorneys 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 Megaworlds sending of a notice of turnover preceded Tansecos

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] Megaworlds excuse for its
delay does not thus lie.

As for Megaworlds argument that Tansecos 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 amountpaid 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 attorneys 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 courts 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 ofP14,281,731.70, 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 attorneys
fees, P100,000 exemplary damages, and costs of suit.

Costs against petitioner.

SO ORDERED.

CONCHITA CARPIO MORALES

Associate 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]
Id. at 148-163.
[3]
Id. at 22.
[4]
Id. at 146-147.
[5]
Id. at 13-19.
[6]
Id. at 24-31.
[7]
Id. at 136-139.
[8]
Id. at 247-250.
[9]
Id. at 304-305.
[10]
Rollo, pp. 260-263.
[11]
Id. at 264.
[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]
Id. at 816.
[15]
Vide Petition, rollo, pp. 29-74.
[16]
Vide Comment, id. at 432-465.
[17]
Vide Leao 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, August 17, 2007, 530 SCRA 621, 628.
[20]
Heirs of Tranquilino Labiste v. Heirs of Jose Labiste, G.R. No. 162033, May 8, 2009.
[21]
REGULATING THE SALE OF SUBDIVISION LOTS AND CONDOMINIUMS, PROVIDING PENALTIES
FOR VIOLATIONS THEREOF.
[22]
G.R. No. 97412, July 12, 1994, 234 SCRA 78, 96-97. The Court, in this case, suggested rules on the award of
interest, viz:
xxxx
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.
xxxx
[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.
 SECOND DIVISION

FIL-ESTATE PROPERTIES, INC., G.R. No. 165164

Petitioner,
Present:

QUISUMBING, J., Chairperson,

CARPIO,
- versus - CARPIO MORALES,
TINGA, and
VELASCO, JR., JJ.

SPOUSES GONZALO Promulgated:

andCONSUELO GO,
Respondents. August 17, 2007
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x

RESOLUTION

QUISUMBING, J.:

For review on certiorari are the Decision[1] dated June 9, 2004 of the Court
of Appeals in CA-G.R. SP No. 79624, and its Resolution[2] dated August 3, 2004,
denying the motion for reconsideration.

The basic facts in this case are undisputed.

On December 29, 1995, petitioner Fil-Estate Properties, Inc. (Fil-Estate) entered

into a contract to sell a condominium unit to respondent spouses Gonzalo and Consuelo
Go at Eight Sto. Domingo Place, a condominium project of petitioner located
on Sto. Domingo Avenue, Quezon City. The spouses paid a total of P3,439,000.07 of
the full contract price set at P3,620,000.00.

Because petitioner failed to develop the condominium project, on August 4,

1999, the spouses demanded the refund of the amount they paid, plus
interest. When petitioner did not refund the spouses, the latter filed a complaint
against petitioner for reimbursement of P3,620,000 representing the lump sum
price of the condominium unit, plus interest, P100,000 attorneys 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 July 18, 2000, the HLURB Regional Director approved the decision of
the Housing and Land Use Arbiter in favor of the spouses Go. The HLURB
ratiocinated that the Asian financial crisis that resulted in the depreciation of the
peso is not a fortuitous event as any fluctuation in the value of the peso is a daily
occurrence which is foreseeable and its deleterious effects avoided by economic
measures. The HLURB went on to say that when petitioner discontinued the
development of its condominium project, it failed to fulfill its contractual
obligations to the spouses. And following Article 1475[3] of the Civil Code, upon
perfection of the contract, the parties, here the spouses Go, may demand
performance. And under Article 1191[4] of the same code, should one of the parties,
in this instance Fil-Estate, fail to comply with the obligation, the aggrieved party
may choose between fulfillment or rescission of the obligation, with damages in
either case. Inasmuch asFil-Estate could no longer fulfill its obligation, the spouses
Go may ask for rescission of the contract with damages. The dispositive portion of
the decision reads:
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 attorneys

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 petitioners petition for

review and consequent motion for reconsideration.[6] The Office of the President
dismissed petitioners 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 petitioners 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 ATTORNEYS 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 Asia and if it was indeed foreseeable, then all those
engaged in the real estate business should have foreseen the impending
fiasco. Petitioner adds that it had not committed any fraud; that it had all the
required government permits; and that it had not abandoned the project but only
suspended the work. It also admits its obligation to complete the project. It says
that it had in fact asked the HLURB for extension to complete it.[12]

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 attorneys 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 September 24, 2004,
while the Secretarys Certification was notarized a day earlier on September 23,
2004. However, we shall not delve into technicalities, but we shall proceed with
the resolution of the issues raised on the merits.

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 Asia did not constitute a valid
justification to renege on obligations. We emphatically stressed the same view
in MondragonLeisure and Resorts Corporation v. Court of Appeals,[15] that the
Asian financial crisis in 1997 is not among the fortuitous events contemplated
under Article 1174 of the Civil Code.
 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 attorneys 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 August 4,

1999 to Fil-Estate asking for the return of the total amount paid including
amortization interests and legal interest due thereon.[16] The latter did not respond
favorably, and so the spouses filed a complaint demanding the reimbursement
of P3,620,000representing the lump sum price of the condominium unit with
interest at the legal rate, and P100,000 attorneys fees. But the respondents actually
sought the refund ofP3,620,000.00, 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 August 4, 1999.We are not unaware that the appellate court
pegged the interest rate at 12% on the basis of Resolution No. R-421, Series of
1988 of the HLURB. But, conformably with our ruling in Eastern Shipping Lines,
Inc. v. Court of Appeals,[17] the award of 12% interest on the amount of refund
must be reduced to 6%.

Moreover, we are constrained to modify the Court of Appeals grant of

attorneys 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 petitioners 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
startingAugust 4, 1999 until full payment, and (2) to pay respondents P100,000.00
attorneys fees. Costs against petitioner.

SO ORDERED.

LEONARDO A. QUISUMBING
Associate 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]
Id. at 33.
[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]
Id. at 59-63.
[7]
Id. at 92 and 97.
[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, October 23, 1982, 117 SCRA 832.
[12]
Rollo, pp. 16-20.
[13]
Id. at 30.
[14]
G.R. No. 153827, April 25, 2006, 488 SCRA 192, 206.
[15]
G.R. No. 154188, June 15, 2005, 460 SCRA 279, 289.
[16]
Rollo, p. 26.
[17]
G.R. No. 97412, July 12, 1994, 234 SCRA 78, 96-97. The rule partly reads:
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 ofIgnacia Aguilar-Reyes v. Mijares, G.R. No. 143826, August 28, 2003, 410 SCRA 97, 110-111.