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FIL-ESTATE PROPERTIES v. SPS. GONZALO

FACTS:

Petitioner Fil-Estate Properties, Inc. entered into a contract to sell a condominium unit to respondent spouses Gonzalo and Consuelo Go. The spouses paid a total of P3,439,000.07 of the full contract price. However, Fil-Estate failed to develop the condominium project, prompting the spouses to demand a refund of the amount they paid, plus interest. When Fil-Estate did not refund the amount, the spouses filed a complaint for reimbursement before the Housing and Land Use Regulatory Board (HLURB). The HLURB ruled in favor of the spouses, stating that the Asian financial crisis, which caused the delay in construction, was not a fortuitous event. Fil-Estate appealed the decision to the Court of Appeals, which affirmed the HLURB's ruling. Fil-Estate then filed a petition for review before the Supreme Court, raising two issues for resolution.

ISSUES:

  1. Did the Court of Appeals err in holding that the Asian financial crisis was not a fortuitous event?

  2. Did the Court of Appeals err in holding petitioner liable for the payment of attorney's fees?

RULING:

  1. No, the Court of Appeals did not err in holding that the Asian financial crisis was not a fortuitous event. The court affirmed the decision of the HLURB and held that the Asian financial crisis cannot be considered a fortuitous event as any fluctuation in the value of the peso is a daily occurrence which is foreseeable and its deleterious effects can be avoided by economic measures. The court further stated that when petitioner discontinued the development of its condominium project, it failed to fulfill its contractual obligations to the spouses. Therefore, the appellate court ruled that the Asian financial crisis cannot excuse the delivery of the subject condominium unit to respondents.

  2. The Court of Appeals also did not err in holding petitioner liable for the payment of attorney's fees. The appellate court noted that the award of attorney's fees is provided for in Section 23 of Presidential Decree No. 957, also known as "The Subdivision and Condominium Buyers' Protective Decree." Hence, the court affirmed the award of attorney's fees in favor of respondents.

PRINCIPLES:

  • Any fluctuation in the value of the peso is a daily occurrence which is foreseeable and its effects can be avoided by economic measures. Therefore, it cannot be considered a fortuitous event.

  • Upon perfection of a contract, the parties may demand performance. If one party fails to comply with the obligation, the aggrieved party may choose between fulfillment or rescission of the obligation, with damages in either case.

  • The award of attorney's fees is provided for in Section 23 of Presidential Decree No. 957.