GR 177113; (October, 2009) (Digest)
G.R. No. 177113; October 2, 2009
STA. LUCIA REALTY & DEVELOPMENT, INC., Petitioner, vs. SPOUSES FRANCISCO & EMELIA BUENAVENTURA, as represented by RICARDO SEGISMUNDO, Respondents.
FACTS
Respondent-spouses purchased a subdivision lot (Lot 3, Block 4, Phase II, Greenwood Executive Village) from a previous owner. Upon commencing construction, they discovered their lot was already occupied by structures built by RCD Realty Corporation. The construction was authorized by a permit issued by petitioner Sta. Lucia Realty, the owner-developer of the subdivision project. Respondents demanded possession of their titled lot from petitioner, but no action was taken. They filed a complaint for specific performance and damages before the HLURB.
Petitioner denied liability, arguing it had no direct transaction with respondents and that the lot in question technically belonged to its joint-venture partner, ACL Development Corporation. It claimed RCD Realty built on the wrong lot (Phase II-A) due to confusion and suggested a property exchange among the parties. Petitioner also filed a third-party complaint against ACL and RCD Realty.
ISSUE
Whether petitioner Sta. Lucia Realty, as the subdivision owner-developer, is liable for specific performance and damages to the respondents despite the absence of a direct contract of sale between them.
RULING
Yes, petitioner is liable. The Supreme Court affirmed the findings of the HLURB, the Office of the President, and the Court of Appeals. The legal logic rests on petitioner’s statutory and regulatory obligations as the registered owner and developer of the subdivision. Petitioner, having overall control and supervision of the project, was responsible for properly identifying lots and enforcing restrictions annotated on the titles. Its negligence in issuing a construction permit to RCD Realty for a lot already titled to another party directly caused the confusion and deprived respondents of their property. Privity of contract is not essential in this context; the source of liability is petitioner’s breach of its public duty as a developer to ensure the integrity of lot identities within its project, a duty owed to all lot buyers and their successors-in-interest.
Consequently, petitioner was ordered to cause the vacation of the lot or, alternatively, to reimburse respondents its current market value. The awards for moral and exemplary damages and attorney’s fees were sustained due to petitioner’s gross negligence and the distress caused. However, the interest on the reimbursement was modified: 6% per annum from the filing of the complaint until finality of judgment, and 12% per annum thereafter until full payment, following established jurisprudence on unliquidated claims. The Court found no merit in petitioner’s claims regarding respondents’ alleged bad faith or the non-joinder of parties, as these did not absolve petitioner of its primary liability.