Please take notice that the Court, Second Division, issued a Resolution dated 16 November 2011 which reads as follows:cralaw
G.R. No. 198461 (San Lorenzo Ruiz Builders and Developers Group, Inc. v. Taciano L. Bangcoro). - This petition for review seeks to assail the decision of the Court of Appeals (CA), which affirmed the decision of the Office of the President (OP). The OP, in turn, upheld the judgment of the Board of Commissioners of the Housing and Land Use Regulatory Board (HLURB Board) in favor of Taciano Bangcoro's demand for a refund.
Petitioner San Lorenzo Ruiz Builders and Developers Group. Inc. (San Lorenzo) offered to sell to Taciano a house and lot at Violago Homes, Batasan, Quezon City. On the promise that the house would be constructed within 45 days after initial payment, Taciano paid a total of P210,000.00 as down payment and reservation fee. Despite repeated demands, however, the construction did not begin. This development forced Taciano to file a complaint before the HLURB for the full refund of the payments he had made on the property. Taciano prayed for two alternative reliefs: (1) for refund or (2) to pay the remainder of the amount if San Lorenzo would finish the construction.
Proceedings before the HLURB
During the hearings, San Lorenzo counter-argued that Taciano was guilty of breach of contract since he failed to complete the down payment in the amount of P337,000.00. Taciano's default thus entitles San Lorenzo to cancel the Contract to Sell and forfeit the payments made by Taciano.
The HLURB Arbiter dismissed the complaint for refund; he directed Taciano to update his payments in accordance with the contract to sell, and ordered San Lorenzo to commence the construction of the housing unit.
San Lorenzo appealed to the HLURB Board which reversed the Arbiter. The HLURB Board ordered San Lorenzo to refund P210,000.00 to Taciano with 6% interest per annum. A subsequent motion for reconsideration was denied.
On appeal, the OP upheld the HLURB Board's decision.
Proceedings before the CA
The CA denied San Lorenzo’s contentions in its petition, for review.
First, it refused to give credence to San Lorenzo's position that the HLURB Board and the OP erred in ordering the rescission of the contract to sell because Taciano did not interpose an appeal. The CA held that the HLURB Board and the OP did not go beyond the issues raised before them. The CA noted that the necessary consequence of rescission is full refund.
Second, the CA also refused to give credence to San Lorenzo's contention that the cancellation of the contract resulted in a violation of the constitutional prohibition against impairment of contracts. The CA stated that San Lorenzo's failure to perform its “end of the bargain” justified the rescission of the contract. The CA remarked that although Taciano had suspended payment for the entire amount of the stipulated deposit, San Lorenzo had not erected a single post. Further, the CA highlighted the nature of the contract — one for the sale of a house and lot. Thus, the failure to build the house on the lot is considered a non-performance of the obligation in the contract to sell.
The Petition for Certiorari
San Lorenzo's petition focuses on two major points:
(1) That the CA erred in not holding that the HLURB Arbiter's decision became final and executory insofar as Taciano is concerned since he did not file an appeal. Citing Sps. Custodio v. CA, San Lorenzo argues that "an appellee who has not himself appealed may not obtain from the appellate court any affirmative relief other than what was granted in the decision of the lower court." San Lorenzo opines that the HLURB should not have granted the refund (a more favorable remedy), since the HLURB Arbiter only ordered Taciano to pay the remainder of the amount, and San Lorenzo to finish the construction; and
(2) That the CA erred in ordering a refund instead of canceling the contract to sell on account of Taciano's breach of his obligations.
We see no merit in San Lorenzo's first contention. Although Taciano did not appeal from the decision of the HLURB Arbiter, the decision to award, a refund is still proper. The consequence of San Lorenzo's failure to perform its obligations under the contract is necessarily the need to refund the amount Taciano paid. Taciano cannot be denied this relief even though he did not appeal as he earned this relief under the HLURB ruling that he accepted as final with respect to him.
Further, Custodio is not applicable for two reasons. First, even if Taciano did not appeal, the HLURB is not precluded from awarding a relief to rectify San Lorenzo's failure to comply with its obligations. Second, Custodio did not state that the appellate court cannot grant a more favorable remedy. What Custodio prohibits is an appellee seeking an affirmative relief other than the one granted by the lower court.
On the second issue, the CA correctly upheld the HLURB and the OP since San Lorenzo absolutely failed to begin the construction of a housing unit. The failure justified Taciano's own refusal to continue paying as he would effectively be paying for an unconstructed house. Taciano's good faith in stopping payment is evident from his original complaint. Principally, he wanted San Lorenzo to finish the construction, and only secondarily did he ask for a refund. He was, in other words, satisfied with the HLURB Arbiter's ruling. San Lorenzo's insistence on rescission in its favor cannot stand under these facts.cralaw
Very truly yours,
MA. LUISA L. LAUREA
Division Clerk of Court
(Sgd.) TERESITA AQUINO TUAZON
Deputy Division Clerk of Court
 323 Phil. 575, 584 (1996).