GR 207586; (August, 2016) (Digest)
G.R. No. 207586 , August 17, 2016
AFP RETIREMENT AND SEPARATION BENEFITS SYSTEM (AFPRSBS), Petitioner vs. EDUARDO SANVICTORES, Respondent
FACTS
In 1994, Prime East Properties, Inc. (PEPI) offered to sell a subdivision lot to Eduardo Sanvictores. On June 9, 1994, a Contract to Sell was executed listing both PEPI and AFP Retirement and Separation Benefits System (AFPRSBS) as the “Seller.” Sanvictores paid the full purchase price by February 27, 1999. Despite full payment, the sellers failed to execute a deed of absolute sale and deliver the title. PEPI claimed the title was with the Philippine National Bank due to an economic crisis. After years of no communication, Sanvictores filed a complaint for rescission, refund, and damages against PEPI and AFPRSBS before the Housing and Land Use Regulatory Board (HLURB). AFPRSBS defended itself by arguing it was not the owner/developer, that the signatory (Menandro Mena) was not its authorized representative, and that it was not privy to the mortgage with PNB.
ISSUE
1. Whether AFPRSBS is jointly and severally (solidarily) liable with PEPI to Sanvictores.
2. Whether AFPRSBS is liable for moral and exemplary damages, costs, attorney’s fees, and an administrative fine.
RULING
The Supreme Court DENIED the petition, affirming the decisions of the lower bodies with modification on the interest rate.
1. On Solidary Liability: AFPRSBS is jointly and severally liable with PEPI. The Contract to Sell referred to PEPI and AFPRSBS singly as the “Seller” without any delineation of their respective rights and obligations. This, pursuant to Article 1207 of the Civil Code, creates a solidary obligation as the nature of the obligation requires solidarity. Furthermore, AFPRSBS is estopped from denying the authority of its representative, Menandro Mena, as it clothed him with apparent authority to act on its behalf in the execution of the contract.
2. On Liability for Damages and Fine: AFPRSBS is liable for moral and exemplary damages, costs of litigation, attorney’s fees, and the administrative fine. The Court sustained the factual findings of the HLURB, the Office of the President, and the Court of Appeals, which found a substantive breach of obligation justifying the awards. The Court of Appeals had modified the interest on the actual damages (refund of ₱534,378.79) to six percent (6%) per annum.