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SECOND DIVISION G.R. No. 182720 : March 2, 2010 G.G. SPORTSWEAR MFG. CORP., Petitioner, v. WORLD CLASS PROPERTIES, INC., Respondent. D E C I S I O N BRION, J.: Through its petition for review on certiorari, the petitionerG.G. Sportswear Mfg. Corp. (GG Sportswear) seeks to reverse the December 19, 2007 decision The facts, as culled from the records, are briefly summarized below.chanroblesvirtua|awlibary World Class is the owner/developer of Global Business Tower (now Antel Global Corporate Center), an office condominium project located on Julia Vargas Avenue and Jade Drive, Ortigas Center, Pasig City slated for completion on December 15, 1998.chanroblesvirtua|awlibary GG Sportswear, a domestic corporation, offered to purchase the 38th floor penthouse unit and 16 parking slots for 32 cars in World Class's condominium project for the discounted, pre-selling price of
cralawBased on the Agreement, the contract to sell pertaining to the entire 38th floor Penthouse unit and the parking slots would be executed upon the payment of thirty percent (30%) of the total purchase price. From May to December 1996, GG Sportswear timely paid the installments due; the eight monthly installment payments amounted to a total of In a letter dated January 30, 1997, On March 5, 1997, GG Sportswear delivered the replacement checks and paid the January 1997 installment payment which had been delayed by two months. World Class in turn issued a second Reservation Agreement, which it transmitted to GG Sportswear for the latters conformity. World Class also sent GG Sportswear a provisional Contract to Sell, GG Sportswear did not sign the second Reservation Agreement. Instead, it sent a letter On June 10, 1997, GG Sportswear filed a Complaint In its Answer, On September 12, 2005, HLURB Arbiter Atty. Dunstan T. San Vicente (Arbiter) rendered a decision World Class appealed to the HLURB Board of Commissioners (Board). On January 31, 2006, the Board modified the Arbiters decision by ruling that the Agreement could no longer be rescinded for lack of a CR/LS because World Class had already been issued a License to Sell on August 1, 1996, or before the complaint was filed. In its decision In its petition for review The CA, in its decision On the awarded refund, the CA held that the OP erroneously based GG Sportswears right to recovery of payments on Article 1416 of the Civil Code (as what the Arbiters decision The appellate court also found no merit in GG Sportswears argument that it was entitled to rescind the Agreement and demand a refund because World Class failed to provide a Contract to Sell for the subject units. Under the Agreement, the Contract to Sell would be executed only upon payment of thirty (30%) of the total value of the sale; since GG Sportswear had only paid 21% of the total contract price, it could not demand the execution of the Contract to Sell. The CA likewise denied GG Sportswears motion for reconsideration. Hence, GG Sportswear filed with this Court the present petition for review on certiorari, THE RULING OF THE COURT We find the petition devoid of merit.chanroblesvirtua|awlibary The Board ruling that the Agreement could not be rescinded based on lack of a CR/LS had already attained finality.chanroblesvirtua|awlibary We explained the concept of an obiter dictum in Villanueva v. Court of Appeals It has been held that an adjudication on any point within the issues presented by the case cannot be considered as obiter dictum, and this rule applies to all pertinent questions, although only incidentally involved, which are presented and decided in the regular course of the consideration of the case, and led up to the final conclusion, and to any statement as to matter on which the decision is predicated. Accordingly, a point expressly decided does not lose its value as a precedent because the disposition of the case is, or might have been, made on some other ground, or even though, by reason of other points in the case, the result reached might have been the same if the court had held, on the particular point, otherwise than it did. A decision which the case could have turned on is not regarded as obiter dictum merely because, owing to the disposal of the contention, it was necessary to consider another question, nor can an additional reason in a decision, brought forward after the case has been disposed of on one ground, be regarded as dicta. So, also, where a case presents two (2) or more points, any one of which is sufficient to determine the ultimate issue, but the court actually decides all such points, the case as an authoritative precedent as to every point decided, and none of such points can be regarded as having the status of a dictum, and one point should not be denied authority merely because another point was more dwelt on and more fully argued and considered, nor does a decision on one proposition make statements of the court regarding other propositions dicta. The Boards pronouncement in its January 31, 2006 decision that the Agreement could no longer be rescinded because the CR/LS had already been issued at the time the complaint was filed cannot be considered a mere obiter dictum because it touched upon a matter squarely raised by World Class in its petition for review, specifically, the issue of whether GG Sportswear was entitled to a refund on the ground that it did not have a CR/LS at the time the parties entered into the Agreement.chanroblesvirtua|awlibary With this ruling, the Board reversed the Arbiters ruling on this particular issue, expressly stating that "the absence of the certificate of registration and license to sell no longer existed at the time of the filing of the complaint and could no longer be used as basis to demand rescission." This ruling became final when GG Sportswear chose not to file an appeal with the OP. Thus, even if the Board ultimately awarded a refund to GG Sportswear based entirely on another ground, the Boards ruling on the non-rescissible character of the Agreement is binding on the parties.chanroblesvirtua|awlibary Consequently, the OP had no jurisdiction to revert to the Arbiters earlier declaration that the Agreement was void due to World Classs lack of a CR/LS, a finding that clearly contradicted the Boards final and executory ruling.chanroblesvirtua|awlibary There was no breach on the part of World Class to justify the rescission and refund.chanroblesvirtua|awlibary GG Sportswear likewise has no legal basis to demand either the rescission of the Agreement or the refund of payments it made to World Class under the Agreement.chanroblesvirtua|awlibary Unless the parties stipulated it, rescission is allowed only when the breach of the contract is substantial and fundamental to the fulfillment of the obligation. GG Sportswear anchors its claim for rescission on two grounds: (a) its dissatisfaction with the completion date; and (b) the lack of a Contract to Sell. As to the first ground, World Class makes much of the fact that the completion date is not indicated in the Agreement, maintaining that this lack of detail renders the Agreement void on the ground that the intention of the parties cannot be ascertained. We disagree with this contention.chanroblesvirtua|awlibary In the first place, GG Sportswear cannot claim that it did not know the time-frame for the projects completion when it entered into the Agreement with World Class. As World Class points out, it is absurd and unbelievable that Mr. Gidwani, the president of GG Sportswear and an experienced businessman, did not have an idea of the expected completion date of the condominium project before he bought the condominium units for Moreover, the provisional Contract to Sell that accompanied the second Reservation Agreement explicitly provided that the condominium project would be ready for turnover no later than December 15, 1998, a clear expression of the projects completion date. While GG Sportswear claims dissatisfaction with this completion date, it never alleged that the given December 15, 1998 completion date violates the completion date previously agreed upon by the parties. In fact, nowhere does GG Sportswear allege that the parties ever agreed upon an earlier completion date. We therefore find no reason for GG Sportswear to be dissatisfied with the indicated completion date. Even if it had been unhappy with the completion date, this ground, standing alone, is not sufficient basis to rescind the Agreement; unhappiness is a state of mind, not a defect available in law as a basis to rescind a contract.chanroblesvirtua|awlibary As a last point on this topic, we cannot help but view with suspicion GG Sportswears decision to question the second Reservation Agreements lack of an express completion date as this question only came up after World Class had rejected GG Sportswears request to defer the deposit of its check in light of the financial difficulties it was then encountering. Also by this time, GG Sportswear had already defaulted on its monthly installment payments to World Class. Under these circumstances, we are more inclined to believe World Classs contention that GG Sportswears complaint was simply an attempt to evade its obligations to World Class under the Agreement. This is a ploy we cannot accept.chanroblesvirtua|awlibary On the second ground, we note that the Agreement expressly provides that GG Sportswear shall be entitled to a Contract to Sell only upon its payment of at least 30% of the total contract price. Even if we apply Article 1191 of the Civil Code, which provides: 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. x x x x.chanroblesvirtua|awlibary no reason still exists to rescind the contract. Under the Agreement, World Classs obligation was to finish the project and turn over the purchased units to GG Sportswear on or before the completion date. Notably, at the time GG Sportswear filed its complaint on June 10, 1997, the agreed completion date of December 15, 1998, or even August 1998, the date appearing on World Classs first License to Sell, was still a long way out. In other words, when GG Sportswear filed its complaint, World Class had not yet breached its obligation, and rescission under this provision of the Civil Code was premature. Rescission of contracts of sale of commercial condominium units on installment is governed by P.D. No. 957.chanroblesvirtua|awlibary Neither can GG Sportswear find recourse through P.D. No. 957, or the "Subdivision and Condominium Buyers Protective Decree." This law covers all sales and purchases of subdivision or condominium units, and provides that the buyers installment payments shall not be forfeited in favor of the developer or owner if the latter fails to develop the subdivision or condominium project. Section 23 of P.D. No. 957 provides: Section 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 interests but excluding delinquency interests, with interest thereon at the legal rate. [Emphasis supplied.] Upon the developers failure to develop, the buyer may choose either: (1) to continue with the contract but suspend payments until the developer complies with its obligation to finish the project; or (2) to cancel the contract and demand a refund of all payments made, excluding delinquency interests. Notably, a buyers cause of action against a developer for failure to develop ripens only when the developer fails to complete the project on the lapse of the completion period stated on the sale contract or the developers License to Sell.chanroblesvirtua|awlibary To recall, the completion date of the Antel Global Corporate Center was either in August 1998 (based on World Class's first License to Sell), on December 15, 1998 (based on the provisional Contract to Sell), or on December 1999 (based on World Classs second License to Sell). At the time GG Sportswear filed its complaint against World Class on June 10, 1997, the Antel Global Corporate Center was still in the course of development Significantly, World Class completed the project in August 1999, or within the time period granted by the HLURB for the completion of the condominium project under the second License to Sell. This completion, undertaken while the case was pending before the Arbiter, rendered the issue of World Classs failure to develop the condominium project moot and academic.chanroblesvirtua|awlibary As a side note, we observe that GG Sportswear, not World Class, substantially breached its obligations under the Agreement when it was remiss in the timely payment of its obligations, such that its January 1997 installment was paid only in March 1997, or two months after due date. GG Sportswear did not pay the succeeding installment dated April 1997 (presumably for February 1997) until it had filed its complaint in June 1997. A substantial breach of a reciprocal obligation, like failure to pay the price in the manner prescribed by the contract, entitles the injured party to rescind the obligation. The lack of a Certificate of Registration/License to Sell merely subjects the developer to administrative sanctions.chanroblesvirtua|awlibary On a final note, we choose to reiterate, for the benefit of the HLURB, our ruling in Co Chien v. Sta. Lucia Realty & Development, Inc., A review of the relevant provisions of P.D. 957 reveals that while the law penalizes the selling of subdivision lots and condominium units without prior issuance of a Certificate of Registration and License to Sell by the HLURB, it does not provide that the absence thereof will automatically render a contract, otherwise validly entered, void. The penalty imposed by the decree is the general penalty provided for the violation of any of its provisions. It is well-settled in this jurisdiction that the clear language of the law shall prevail. This principle particularly enjoins strict compliance with provisions of law which are penal in nature, or when a penalty is provided for the violation thereof. With regard to P.D. 957, nothing therein provides for the nullification of a contract to sell in the event that the seller, at the time the contract was entered into, did not possess a certificate of registration and license to sell. Absent any specific sanction pertaining to the violation of the questioned provisions (Sections 4 and 5), the general penalties provided in the law shall be applied. The general penalties for the violation of any provisions in P.D. 957 are provided for in Sections 38 and 39. As can clearly be seen in the cited provisions, the same do not include the nullification of contracts that are otherwise validly entered. x x x x The lack of certificate and registration, without more, while penalized under the law, is not in and of itself sufficient to render a contract void. We see no reason to depart from this ruling, and so hold that the Arbiter erred in declaring the Agreement void due to the absence of a CR/LS at the time the Agreement was executed.chanroblesvirtua|awlibary WHEREFORE, we DENY the present petition for review on certiorari and AFFIRM the assailed CA Decision and Resolution dated December 19, 2007 and January 2, 2008, respectively. Accordingly, the complaint of G.G. Sportswear Mfg. Corp. is DISMISSED. Costs against petitioner G.G. Sportswear Mfg. Corp. SO ORDERED. ARTURO D. BRION WE CONCUR: ANTONIO T. CARPIO
JOSE PORTUGAL PEREZ A T T E S T A T I O N I attest that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Courts Division. ANTONIO T. CARPIO C E R T I F I C A T I O N Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairpersons Attestation, it is hereby certified that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Courts Division. REYNATO S. PUNO cralaw Endnotes:
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