Case VS Developer for failure to turnover the unit as scheduled

For my personal use and reference, with the purpose to educate myself to issues concerning real properties.

 

Summary:

Below is a case where the buyer filed for a refund due to developers failure to turnover the unit as scheduled and committed.

Don't forget to check this link >>> Profriends ba? Read Me.

Republic of the Philippines
SUPREME COURT

FIRST DIVISION

G.R. No. 165675 September 30, 2005

SPOUSES EDUARDO SOBREJUANITE and FIDELA SOBREJUANITE, Petitioners,
vs.
ASB DEVELOPMENT CORPORATION, Respondent.

D E C I S I O N

YNARES-SANTIAGO, J.:

This petition for review on certiorari assails the June 29, 2004 Decision of the Court of Appeals in CA-G.R. SP No. 79420 which reversed and set aside the Decision of the Office of the President; and its October 18, 2004 Resolution denying reconsideration thereof.

The antecedent facts show that on March 7, 2001, spouses Eduardo and Fidela Sobrejuanite (Sobrejuanite) filed a Complaint¹ for rescission of contract, refund of payments and damages, against ASB Development Corporation (ASBDC) before the Housing and Land Use Regulatory Board (HLURB).

Sobrejuanite alleged that they entered into a Contract to Sell with ASBDC over a condominium unit and a parking space in the BSA Twin Tower-B Condominum located at Bank Drive, Ortigas Center, Mandaluyong City. They averred that despite full payment and demands, ASBDC failed to deliver the property on or before December 1999 as agreed. They prayed for the rescission of the contract; refund of payments amounting to P2,674,637.10; payment of moral and exemplary damages, attorney’s fees, litigation expenses, appearance fee and costs of the suit.

ASBDC filed a motion to dismiss or suspend proceedings in view of the approval by the Securities and Exchange Commission (SEC) on April 26, 2001 of the rehabilitation plan of ASB Group of Companies, which includes ASBDC, and the appointment of a rehabilitation receiver. The HLURB arbiter however denied the motion and ordered the continuation of the proceedings.

The arbiter found that under the Contract to Sell, ASBDC should have delivered the property to Sobrejuanite in December 1999; that the latter had fully paid their obligations except the P50,000.00 which should be paid upon completion of the construction; and that rescission of the contract with damages is proper.

The dispositive portion of the Decision reads:

WHEREFORE, in view of the foregoing judgment is rendered ordering the rescission of the contracts to sell between the parties, and further ordering the respondent [ASBDC] to pay the complainants [Sobrejuanite] the following:

a) all amortization payments by the complainants amounting to P2,674,637.10 plus 12% interest from the date of actual payment of each amortization;

b) moral damages amounting to P200,000.00;

c) exemplary damages amounting to P100,000.00;

d) attorney’s fees amounting to P100,000.00;

e) litigation expenses amounting to P50,000.00.

All other claims and all counter-claims are hereby dismissed.

IT IS SO ORDERED.²

The HLURB Board of Commissioners³ affirmed the ruling of the arbiter that the approval of the rehabilitation plan and the appointment of a rehabilitation receiver by the SEC did not have the effect of suspending the proceedings before the HLURB. The board held that the HLURB could properly take cognizance of the case since whatever monetary award that may be granted by it will be ultimately filed as a claim before the rehabilitation receiver. The board also found that ASBDC failed to deliver the property to Sobrejuanite within the prescribed period. The dispositive portion of the Decision reads:

Wherefore the petition for review is denied and the decision of the office below is affirmed. It shall be understood that all monetary awards shall still be filed as claims before the rehabilitation receiver.⁴

ASBDC filed an appeal⁵ before the Office of the President which was dismissed⁶ for lack of merit. Hence, ASBDC filed a petition⁷ under Section 1, Rule 43 of the Rules of Court before the Court of Appeals, docketed as CA-G.R. SP No. 79420.

On June 29, 2004, the Court of Appeals rendered its assailed Decision,⁸ the dispositive portion of which reads:

WHEREFORE, premises considered, the instant petition is GRANTED. The impugned decision dated June 27, 2003 of the Office of the President is hereby REVERSED AND SET ASIDE. No pronouncement as to costs.

SO ORDERED.⁹

The Court of Appeals held that the approval by the SEC of the rehabilitation plan and the appointment of the receiver caused the suspension of the HLURB proceedings. The appellate court noted that Sobrejuanite’s complaint for rescission and damages is a claim under the contemplation of Presidential Decree (PD) No. 902-A or the SEC Reorganization Act and A.M. No. 00-8-10-SC or the Interim Rules of Procedure on Corporate Rehabilitation, because it sought to enforce a pecuniary demand. Therefore, jurisdiction lies with the SEC and not HLURB. It also ruled that ASBDC was obliged to deliver the property in December 1999 but its financial reverses warranted the extension of the period.

Sobrejuanite’s motion for reconsideration was denied¹⁰ hence the instant petition which raises the following issues:

1. THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR AND GRAVELY ABUSED ITS DISCRETION IN RULING THAT THE SEC, NOT THE HLURB, HAS JURISDICTION OVER PETITIONER’S COMPLAINT, IN CONTRAVENTION TO LAW AND THE RULING OF THIS HONORABLE COURT IN THE ARRANZA CASE.

2. THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR AND GRAVELY ABUSED ITS DISCRETION WHEN IT RULED THAT THE APPROVAL OF THE CORPORATE REHABILITATION PLAN AND THE APPOINTMENT OF A RECEIVER HAD THE EFFECT OF SUSPENDING THE PROCEEDING IN THE HLURB, AND THAT THE MONETARY AWARD GIVEN BY THE HLURB COULD NOT [BE] FILED IN THE SEC FOR PROPER DISPOSITION, NOT BEING IN ACCORDANCE WITH LAW AND JURISPRUDENCE.

3. THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR AND GRAVELY ABUSED ITS DISCRETION IN RULING THAT RESPONDENT "IS JUSTIFIED IN EXTENDING THE AGREED DATE OF DELIVERY BY INVOKING AS GROUND THE FINANCIAL CONSTRAINTS IT EXPERIENCED," BEING CONTRARY TO LAW AND IN EEFECT AN UNLAWFUL NOVATION OF THE AGREEMENT OF THE DATE OF DELIVERY ENTERED INTO BY PETITIONERS AND RESPONDENT.¹¹

The petition lacks merit.

Section 6(c) of PD No. 902-A empowers the SEC:

c) To appoint one or more receivers of the property, real and personal, which is the subject of the action pending before the Commission … whenever necessary in order to preserve the rights of the parties-litigants and/or protect the interest of the investing public and creditors: … Provided, finally, That upon appointment of a management committee, rehabilitation receiver, board or body, pursuant to this Decree, all actions for claims against corporations, partnerships or associations under management or receivership pending before any court, tribunal, board or body shall be suspended accordingly. [Emphasis added]

The purpose for the suspension of the proceedings is to prevent a creditor from obtaining an advantage or preference over another and to protect and preserve the rights of party litigants as well as the interest of the investing public or creditors.¹² Such suspension is intended to give enough breathing space for the management committee or rehabilitation receiver to make the business viable again, without having to divert attention and resources to litigations in various fora.¹³ The suspension would enable the management committee or rehabilitation receiver to effectively exercise its/his powers free from any judicial or extra-judicial interference that might unduly hinder or prevent the "rescue" of the debtor company. To allow such other action to continue would only add to the burden of the management committee or rehabilitation receiver, whose time, effort and resources would be wasted in defending claims against the corporation instead of being directed toward its restructuring and rehabilitation.¹⁴

Thus, in order to resolve whether the proceedings before the HLURB should be suspended, it is necessary to determine whether the complaint for rescission of contract with damages is a claim within the contemplation of PD No. 902-A.

In Finasia Investments and Finance Corp. v. Court of Appeals,¹⁵ we construed claim to refer only to debts or demands pecuniary in nature. Thus:

[T]he word ‘claim’ as used in Sec. 6(c) of P.D. 902-A refers to debts or demands of a pecuniary nature. It means "the assertion of a right to have money paid. It is used in special proceedings like those before administrative court, on insolvency."

The word "claim" is also defined as:

Right to payment, whether or not such right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured; or right to an equitable remedy for breach of performance if such breach gives rise to a right to payment, whether or not such right to an equitable remedy is reduced to judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured, unsecured.

In conflicts of law, a receiver may be appointed in any state which has jurisdiction over the defendant who owes a claim.

As used in statutes requiring the presentation of claims against a decedent’s estate, "claim" is generally construed to mean debts or demands of a pecuniary nature which could have been enforced against the deceased in his lifetime and could have been reduced to simple money judgments; and among these are those founded upon contract.

In Arranza v. B.F. Homes, Inc.,¹⁶ claim is defined as referring to actions involving monetary considerations.

Finasia Investments and Finance Corp. v. Court of Appeals and Arranza v. B.F. Homes, Inc. were promulgated prior to the effectivity of the Interim Rules of Procedure on Corporate Rehabilitation on December 15, 2000. The interim rules define a claim as referring to all claims or demands, of whatever nature or character against a debtor or its property, whether for money or otherwise. The definition is all-encompassing as it refers to all actions whether for money or otherwise. There are no distinctions or exemptions.

Incidentally, although the petition for rehabilitation with prayer for suspension of actions and proceedings was filed before the SEC on May 2, 2000,¹⁷ or prior to the effectivity of the interim rules, the same would still apply pursuant to Section 1, Rule 1 thereof which provides:

Section 1. Scope – These Rules shall apply to petitions for rehabilitation filed by corporations, partnerships, and associations pursuant to Presidential Decree No. 902-A, as amended.

Clearly then, the complaint filed by Sobrejuanite is a claim as defined under the Interim Rules of Procedure on Corporate Rehabilitation. Even under our rulings in Finasia Investments and Finance Corp. v. Court of Appeals and Arranza v. B.F. Homes, Inc., the complaint for rescission with damages would fall under the category of claim considering that it is for pecuniary considerations.

In their complaint, Sobrejuanite pray for the rescission of the contract and the refund of P2,674,637.10 representing their total payments to ASBDC; P200,000.00 as moral damages; P100,000.00 as exemplary damages; P100,000.00 as attorney’s fees; P50,000.00 as litigation expenses; P1,500.00 per hearing as appearance fees; and costs of the suit.

In the decision of the HLURB arbiter, ASBDC was ordered to pay P2,674,637.10 plus 12% interest from the date of actual payment of each amortization, representing the refund of all the amortization payments made by Sobrejuanite; P200,000.00 as moral damages; P100,000.00 as exemplary damages; P100,000.00 as attorney’s fees; and P50,000.00 as litigation expenses.

As such, the HLURB arbiter should have suspended the proceedings upon the approval by the SEC of the ASB Group of Companies’ rehabilitation plan and the appointment of its rehabilitation receiver. By the suspension of the proceedings, the receiver is allowed to fully devote his time and efforts to the rehabilitation and restructuring of the distressed corporation.

It is well to note that even the execution of final judgments may be held in abeyance when a corporation is under rehabilitation.¹⁸ Hence, there is more reason in the instant case for the HLURB arbiter to order the suspension of the proceedings as the motion to suspend was filed soon after the institution of the complaint. By allowing the proceedings to proceed, the HLURB arbiter unwittingly gave undue preference to Sobrejuanite over the other creditors and claimants of ASBDC, which is precisely the vice sought to be prevented by Section 6(c) of PD 902-A. Thus:

As between creditors, the key phrase is "equality is equity." When a corporation threatened by bankruptcy is taken over by a receiver, all the creditors should stand on equal footing. Not anyone of them should be given any preference by paying one or some of them ahead of the others. This is precisely the reason for the suspension of all pending claims against the corporation under receivership. Instead of creditors vexing the courts with suits against the distressed firm, they are directed to file their claims with the receiver who is a duly appointed officer of the SEC.¹⁹

Petitioners’ reliance on Arranza v. B.F. Homes, Inc.²⁰ is misplaced. In that case, we held that the HLURB retained its jurisdiction despite the rehabilitation proceedings since the claim filed by the homeowners did not involve pecuniary considerations. The claim therein was for specific performance to enforce the homeowners’ rights as regards right of way, open spaces, road and perimeter wall repairs, and security. However, it can also be deduced therefrom that if the claim was for monetary awards, the proceedings before the HLURB should be suspended during the rehabilitation. Thus:

No violation of the SEC order suspending payments to creditors would result as far as petitioners’ complaint before the HLURB is concerned. To reiterate, what petitioners seek to enforce are respondent’s obligations as a subdivision developer. Such claims are basically not pecuniary in nature although it could incidentally involve monetary considerations. All that petitioners’ claims entail is the exercise of proper subdivision management on the part of the SEC-appointed Board of Receivers towards the end that homeowners shall enjoy the ideal community living that respondent portrayed they would have when they bought real estate from it.

Neither may petitioners be considered as having "claims" against respondent within the context of the following proviso of Section 6 (c) of P.D. No. 902-A, …to warrant suspension of the HLURB proceedings.

.…

In this case, under the complaint for specific performance before the HLURB, petitioners do not aim to enforce a pecuniary demand. Their claim for reimbursement should be viewed in the light of respondent’s alleged failure to observe its statutory and contractual obligations to provide petitioners a "decent human settlement" and "ample opportunities for improving their quality of life." The HLURB, not the SEC, is equipped with the expertise to deal with that matter.²¹

Finally, we agree with the Court of Appeals that under the Contract to Sell, ASBDC was obliged to deliver the property to Sobrejuanite on or before December 1999. Nonetheless, the same was deemed extended due to the financial reverses experienced by the company. Section 7 of the Contract to Sell allows the developer to extend the period of delivery on account of causes beyond its control, such as financial reverses.

WHEREFORE, the petition is DENIED. The assailed Decision of the Court of Appeals dated June 29, 2004 in CA-G.R. SP No. 79420 and its Resolution dated October 18, 2004, are AFFIRMED.
SO ORDERED.

CONSUELO YNARES-SANTIAGO

Associate Justice

WE CONCUR:

HILARIO G. DAVIDE, JR.

Chief Justice

LEONARDO A. QUISUMBING, ANTONIO T. CARPIO

Associate Justice Associate Justice

ADOLFO S. AZCUNA

Associate Justice

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, it is hereby certified that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

HILARIO G. DAVIDE, JR.

Chief Justice

Footnotes

¹ Rollo, pp. 154-156. Docketed as HLURB Case No. REM-030701-11433.

² CA Rollo, pp. 193-194. Penned by HLURB Arbiter Marino Bernardo M. Torres.

³ Commissioners Teresita A. Desierto and Fortunato R. Abrenilla; Jose C. Calida took no part.

⁴ CA Rollo, p. 199.

⁵ Docketed as O.P. Case No. 03-C-119.

⁶ CA Rollo, p. 203. Per Acting Deputy Executive Secretary for Legal Affairs Manuel B. Gaite.

⁷ Id. at 13-31.

⁸ Id. at 320-331. Penned by Associate Justice Amelita G. Tolentino and concurred in by Associate Justices Marina L. Buzon and Vicente S. E. Veloso.

⁹ Id. at 330.

¹⁰ Id. at 397.

¹¹ Rollo, p. 40.

¹² Finasia Investments and Finance Corp. v. Court of Appeals, G.R. No. 107002, October 7, 1994, 237 SCRA 446, 450-451.

¹³ Rubberworld (Phils.), Inc. v. NLRC, 365 Phil. 273, 276-277 [1999].

¹⁴ BF Homes, Incorporated v. Court of Appeals, G.R. Nos. 76879 & 77143, October 3, 1990, 190 SCRA 262, 269.

¹⁵ Supra at 450.

¹⁶ 389 Phil. 318 [2000].

¹⁷ CA Rollo, p. 44.

¹⁸ Alemar’s Sibal & Sons, Inc. v. Elbinias, G.R. No. 75414, June 4, 1990, 186 SCRA 94.

¹⁹ Id. at 99-100.

²⁰ Supra.

²¹ Id. at 332-333.

Case VS Developer for failure to develop the property

 

 

For my personal use and reference, with the purpose to educate myself to issues concerning real properties.

 

Summary:

Below is a case where the buyer filed for a refund due to developers failure to develop the property
that was sold to them.

Don't forget to check this link >>> Profriends ba? Read Me.

 

 

 

 

Republic of the Philippines
SUPREME COURT
Manila

THIRD DIVISION

 

G.R. No. 99346 February 7, 1995
  CASA FILIPINA REALTY CORPORATION, petitioner,
vs.
OFFICE OF THE PRESIDENT and Spouses DENNIS and REBECCA SEVILLA, respondents.

R E S O L U T I O N

ROMERO, J.:

This is a motion for the reconsideration of the Resolution of August 5, 1991 ¹ dismissing the instant petition for certiorari for failure of herein petitioner Casa Filipina Realty Corporation to sufficiently show that respondent public officials have committed any reversible error in their decision which is unfavorable to the petitioner.

The records show that sometime in May or June 1984, spouses Dennis and Rebecca Sevilla agreed to purchase from Casa Filipina Realty Corporation (CFRC) a parcel of land with an area of about 264 square meters located in Barrio San Dionisio, Parañaque, Metro Manila and identified as Lot 7, Block 6, Phase IV, Casa Filipina II Subdivision. The parties agreed that the purchase price of P150,480.00 would be paid on installment basis with P36,115.20 as down payment and P3,560.86 as monthly installment for five (5) years at 28% amortization interest per annum. The agreement was embodied in a contract to sell executed on November 15, 1984.

In the ensuing months after the execution of the contract, the Sevilla spouses failed to pay the amortizations on time. The last installments they paid were for April to July 1985, which they paid, including penalties, on September 25, 1985.

On November 5, 1985, Dennis Sevilla wrote a letter to CFRC calling its attention to the absence of any improvement in the subdivision and his discovery that, upon checking with the Register of Deeds of Pasay City, the mother title of the subdivision was under lis pendens and mortgaged to ComSavings Bank (formerly Royal Savings Bank). Sevilla, therefore, requested a refund of all installment payments made on account of the contract. ²

On November 19, 1985, the Sevilla spouses filed a complaint against CFRC with the Office of Appeals, Adjudication and Legal Affairs (OAALA) of the Human Settlements Regulatory Commission. They prayed for the refund of P70,431.12 which was the total amount they had paid CFRC on account of the contract, plus legal interest thereon from the date of the reservation or from the date of the contract to sell, whichever is applicable, attorney's fees of P5,000.00, and moral/liquidated damages in the amount of P20,000.00 and the costs of the suit.

After due hearing, the OAALA rendered the decision of October 13, 1987 finding CFRC to be without license to sell the subdivision involved. OAALA held that, even assuming that CFRC had a license to sell, it was still liable for violation of Sec. 20 of Presidential Decree No. 957 as it had failed to develop the subdivision. In so holding, the OAALA took judicial notice of the report of Danilo B. Agus on the ocular inspection he had conducted on December 5, 1986 in the same subdivision project in "Ernesto Ola v. Casa Filipina Realty and Development Corporation", HLURB Case No. REM-0102386-3013, for non-development. Hence, the OAALA ordered CFRC to refund the Sevilla couple the amount of P70,431.12 with 28% interest per annum computed from November 19, 1985, the date of the filing of the complaint, until fully paid and to pay P4,000.00 as attorney's fees and P3,000.00 as administrative fine for violation of Sec. 20 of P.D. No. 957.

Said decision was affirmed by the Housing and Land Use Regulatory Board (HLURB) on June 21, 1988 with the modification that instead of the 28% interest charged upon CFRC by the OAALA on the refundable amount, HLURB imposed only 6%.

On January 31, 1990, the Office of the President dismissed for lack of merit the appeal taken by CFRC and affirmed the June 21, 1988 decision of the HLURB. ³ CFRC filed a motion for the reconsideration of the decision of the Office of the President but it was denied on May 7, 1991. ⁴

Hence, CFRC filed the instant petition ⁵ which, as earlier stated, was dismissed by this Court on August 5, 1991.

Petitioner's motion for reconsideration is anchored on the contention that the petition should not have been dismissed as it involves the "interpretation and/or application" ⁶ of provisions of law as the court has to determine whether it is Sec. 23 or 24 of P.D. No. 957 which should be applied in the instant case. Petitioner argues that since private respondents desisted from paying the agreed installments, they should have notified the CFRC of such desistance in accordance with Sec. 23. Moreover, since private respondents desistance from further paying the amortization was due to litis pendentia and the mortgage of the mother title of the subdivision, Sec. 24 should have been applied in the case.

As regards the interest charged on the refundable amount, petitioner contends that while it is not averse to making a refund, the 3% delinquency interest charged upon private respondents for their late amortizations should not be included in the amount refundable and the refund should be in accordance with P.D. No. 957.

For a clear resolution of the motion for reconsideration, the provisions of P.D. No. 957 involved herein must be noted:

Sec. 23. Non-Forfeiture of Payments. — No installment payment made by a buyer in a subdivision or condominium project for a 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.

Sec. 24. Failure to pay installments. — The rights of the buyer in the event of his failure to pay the installments due for reasons other than failure of the owner or developer to develop the project shall be governed by Republic Act No. 6552.

In arguing for the reconsideration of the Resolution of August 5, 1991 dismissing the petition, petitioner underscores the holding of the Office of the President that Sec. 23 "does not require that a notice be given first before a demand for refund can be made" as the notice and demand "can be made in the same letter or communication" which was exactly what private respondents
did. ⁷ While petitioner agrees that the notice and demand for reimbursement may be made in one communication, it avers that Sec. 23 clearly provides that there can be no forfeiture of payments made by a buyer only if such buyer has first given notice to the developer that he will not pay the installments anymore on the ground that the subdivision where the lot being bought is located has not been developed.

Petitioner's contention is premised on its misleading statement that the private respondents' desistance from further paying the amortization was based merely on the notice of lis pendens and the mortgage annotated on the mother title of subject property ⁸ or on "reasons other than nondevelopment." ⁹ This is belied by the letter itself which, for clarity, we quote in full:

November 5, 1985MR. AUGUSTO S. PARCERO
Vice President
CASA FILIPINA REALTY CORP.
3rd Flr., Corinthian Plaza
Legaspi Vill., Makati, Metro Manila

Dear Sir:

This is in connection of our lot we purchased at CASA FILIPINA SUBDIVISION, more particularly described as follows:

Phase IV Block #6 Lot #7

As we see and understand that the property mentioned has no development improvements even on the project features. Since we convinced to pay the reservation and the full down payment and now the amortization, we keep on visiting the place for construction . . . (illegible) and we don't even know where our lot is exactly located, nor we go over the place because of the overhead growth of the cogon grass.

The last time I arrived from Saudi Arabia, we decided to check at the Register of Deeds of Pasay regarding the said lot, and we found out that the mother title has a Less Pendins case and we also found out that the said title was under mortgage to Com Savings Bank formerly Royal Saving Bank.

In behalf of this unexpected circumstances, we are requesting for a refund for the money we paid up to Casa Filipina Realty Corporation.

Hoping for your kind consideration regarding this matter.

Thank you.

Very truly yours,

(Sgd.)
DENNIS S. SEVILLA
(Buyer) ¹⁰

Private respondent's refusal to continue paying the amortization is thus based on two principal grounds: nondevelopment of the subdivision and the encumbrance of the property subject of the sale which became apparent to the buyer only after conducting his own investigation. As such, the case falls squarely within the purview of both Secs. 23 and 24 of P.D. No. 957.

Considering, however, the peculiar circumstances of this case, we agree with the Solicitor General that the requirements of Sec. 23 have been complied with by the private respondents. In this regard, public respondent, after conceding the petitioner's argument that Sec. 23 requires the buyer to notify the developer or subdivision owner of his intention not to remit further payments on the property on account of nondevelopment of the subdivision, states:

Appellant's reading of Section 23 elicits our concurrence. However, its claim that appellees had failed to give the required notice before demanding for refund, is not borne out by the evidence. Records show that in a letter of November 5, 1985, Dennis Sevilla already gave notice to appellant regarding, among other things, the nondevelopment of the subdivision, and therein demanded for refund. To our mind, Section 23 does not require that a notice be given first before a demand for refund can be made. The notice and the demand can be made in the same letter or communication, and this is what the appellees did.

But appellant would insist that, when appellees demanded a refund of installments paid in their letter of November 5, 1985, they were already in default as of August 30, 1985, and that their said demand had "the sound of belated and hindsight attempt to cover up the default for which contract cancellation would be the necessary consequence." We find the contention untenable.

The general rule is that an obligor incurs in delay (default) only after a demand, judicial or extrajudicial, has been made from him for the fulfillment of his obligation. Thus, Article 1169 of the Civil Code provides that "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." Here, there was no such demand by the appellant. The letters it sent to appellees were the usual remind letters that are ordinarily sent by creditors to late-paying debtors. They are not the demand contemplated by law. ¹¹

Being in accord with the spirit behind P.D. No. 947, public respondent's conclusions are hereby affirmed. This decree, aptly entitled "The Subdivision and Condominium Buyers' Protective Decree", was issued in the wake of numerous reports that many real estate subdivision owners, developers, operators and/or sellers "have reneged on their representations and obligations to provide and maintain properly subdivision roads, drainage, sewerage, water systems, lighting systems and other basic requirements" for the health and safety of home and lot buyer's. ¹² It was designed to stem the tide of "fraudulent manipulations perpetrated by unscrupulous subdivision and condominium sellers and operators, such as failure to deliver titles to buyers or titles free from liens and encumbrances." ¹³ Should the notice requirement provided for in Sec. 23 be construed as required to be given before a buyer desists from further paying amortizations as in this case, the intent of the law to protect subdivision lot buyers, such as private respondents, will tend to be defeated.

It should be noted that the petitioner did not only fail to develop the subdivision it was selling but had also encumbered the property prior to selling the same. The inscription of acts and transactions relating to the ownership and other rights over immovable property, even as it serves as a constructive notice to the whole world, is intended to protect the person in whose favor the entry is made and the public in general against any possible undue prejudice due to ignorance on the status of the realty. The rule on constructive notice is not so designed, however, as to allow a person to escape from a lawfully incurred liability. Thus, a vendor of real estate whereon an adverse claim is validly annotated cannot invoke such registration to avoid his own obligation to make a full disclosure to the vendee of adverse claims affecting the property. The registration protects the adverse claimant because of the rule on constructive notice but not the person who makes the conveyance. It behooves such real estate developer and dealers to make proper arrangements with the financial institutions to allow the release of titles to buyers upon their full payment of the purchase price.

Moreover, the HLURB found that petitioner had not secured a license prior to the sale of the subject lot ¹⁴ which is a requirement of Sec. 5 of P.D. No. 957. These factual findings of the administrative bodies which are equipped with expertise as far as their jurisdiction is concerned, should be accorded, not only respect but even finality as they are supported by substantial evidence even if not overwhelming or preponderant. ¹⁵ Thus, a stringent application of the law is demanded as far as petitioner is concerned.

On the issue of delinquency interest which Sec. 23 of P.D. No. 957 explicitly excludes from the amount to be reimbursed to lot buyers, the Solicitor General avers that since the matter has been belatedly raised, the same should be deemed waived. ¹⁶ However, while the rule is that no error which does not affect jurisdiction will be considered unless stated in the assignment of errors, the trend in modern-day procedure is to accord the courts broad discretionary power such that the appellate court may consider matters bearing on the issues submitted for resolution which the parties failed to raise or which the lower court ignored. Since rules of procedure are mere tools designed to facilitate the attainment of justice, their strict and rigid application which would result in technicalities that tend to frustrate rather than promote substantial justice, must always be avoided. ¹⁷ Technicality should not be allowed to stand in the way of equitably and completely resolving the rights and obligations of the parties. ¹⁸

ACCORDINGLY, petitioner's motion for reconsideration of the resolution of August 5, 1991 dismissing the instant petition for certiorari is hereby DENIED and the decision of the Office of the President is AFFIRMED. This Resolution is immediately executory. No costs.

SO ORDERED.

Feliciano, Melo, Vitug and Francisco, JJ., concur.

 

Footnotes 1 Rollo, p. 76.
2 Ibid., p. 75.
3 Ibid., pp. 57-63. Acting Deputy Executive Secretary Mariano Sarmiento II signed the decision by authority of the President.
4 Ibid., pp. 72-73.
5 Petition, p. 1; Ibid., p. 6. The Petitioner erroneously labeled its petition as a "petition for review on certiorari".
6 Ibid., p. 77.
7 Ibid., p, 76.
8 Motion for Reconsideration; p. 3; Ibid., p. 79.
9 Reply to Comment on the Motion for Reconsideration, p. 2; Rollo, p. 118,
10 Rollo, p. 75.
11 Rollo, p. 61.
12 Second paragraph of the "whereas clause" of the decree.
13 Third paragraph of the same "whereas clause". See: Estate Developers and Investors Corporation v. Court of Appeals, G.R. No. 92461, September 2, 1992, 213 SCRA 353, 358.
14 Rollo, p. 45.
15 Sesbreno v. Ala, G.R. No. 95393, May 5, 1992, 208 SCRA 359; Leano v. Domingo, G.R. No. 84378, July 4, 1991, 198 SCRA 800.
16 Comment on the Motion for Reconsideration, pp. 9-10; Rollo, pp. 114-115.
17 Radio Communications of the Phils., Inc. v. NLRC, G.R. Nos. 101181-84, June 22, 1992, 210 SCRA 222.
18 Rapid Manpower Consultants, Inc. v. NLRC, G.R. No. 88683, October 18, 1990, 190 SCRA 747.