Rosalie Sy Ayson vs.
Fil-Estate Properties, Inc., et al.
G.R. No. 223254/G.R.
No. 223269. December 1, 2016
Facts:
This case arose from a
Complaint for recovery of possession and damages filed by Ayson
against Fil-Estate and Fairways before the RTC, alleging that she is
the registered owner of a 1,000-square meter parcel of land, more or
less, located in Yapak, Malay, Aklan, i.e., the northwestern area of
Boracay Island, denominated as Lot No. 14-S and covered by Transfer
Certificate of Title (TCT) No. T-24562 (subject land). Sometime in
June 1997, she discovered that Fil-Estate and Fairways illegally
entered into the subject land and included it in the construction of
its golf course without her prior consent and authorization. Despite
receipt of a Notice to Cease and Desist from Ayson, Fil-Estate and
Fairways continued their encroachment and development of the subject
land making it now a part of the entire golf course. Thus, she was
constrained to file the instant complaint.
Fil-Estate and Fairways
maintain that the subject land was formerly owned by one Divina Marte
Villanueva (Villanueva), with whom they entered into a Joint Venture
Agreement (JVA) for the development of the Fairways and Bluewater
Resort Golf and Country Club. Fil-Estate and Fairways explained that
prior to the JV A, Villanueva sold portions of her property to
various buyers, including Ayson, with the caveat that such portions
may be used in a development project. In this light, Villanueva
allegedly convinced her buyers to agree to a land swap should such
development push through. When the project commenced, the other
buyers readily agreed to said land swaps. Unfortunately, talks with
Ayson stalled, prompting Fil-Estate and Fairways to "exclude"
development work on the subject land. Nevertheless, Fil-Estate and
Fairways commenced construction on the subject land, allegedly
relying in good faith upon Villanueva's assurance that her other
former buyers, e.g., Ayson, would eventually agree with the land swap
agreements. According to Fil-Estate and Fairways, Ayson only
signified her objection to the inclusion of the subject land in the
development project when construction was almost finished.
RTC Ruling:
The RTC ruled in Ayson's
favor and, accordingly, ordered Fil-Estate and Fairways to pay her
the following amounts:
(a) US$100,000.00 or its
Philippine Peso equivalent, representing the value of the subject
land, plus P50,000.00 monthly rentals for the use and occupancy of
said land starting December 1997 until the aforesaid value has been
fully paid;
(b) P900,000.00 as
actual damages;
(c)Pl,000,000.00 as
moral damages;
(d) Pl,000,000.00 as
exemplary damages;
(e) P300,000.00 as
attorney's fees and other litigation expenses; and
(f) the costs of suit.
The RTC found that
contrary to Fil-Estate and Fairways' assertions, Ayson never agreed
to any future land swapping arrangement with Villanueva, considering
that Ayson already paid Villanueva the amount of US$20,000.00
representing the purchase price of the subject land way back April
1994 (albeit the Deed of Sale14 was only executed on April 15, 1996),
while the construction of the golf course was only conceptualized
sometime in early 1995. As such, it was error for Fil-Estate and
Fairways to merely rely on Villanueva's assurance that she will be
able to convince her buyers to enter into a land swapping
arrangement, especially considering that the title to the same was
already in Ayson's name.
Fil-Estate and Fairways
moved for reconsideration, which was, however, denied in an Order 17
dated February 6, 2009. Aggrieved, they appealed 18 to the CA.
The CA Ruling:
The CA affirmed the RTC
ruling with modification reducing the award of damages as follows:
(a) US$40,000.00 or its Philippine Peso equivalent, representing the
value of the subject land, plus Pl,000.00 monthly rentals for the use
and occupancy of said land starting December 1997 until the aforesaid
value has been fully paid; ( b) P52,666.00 plus US$4,316.06 or its
Philippine Peso equivalent as actual damages; (c) PS00,000.00 as
moral damages; (d) P300,000.00 as exemplary damages; and (e)
P200,000.00 as attorney's fees and other litigation expenses.
The CA held that despite
recognizing Ayson as the registered owner of the subject land,
Fil-Estate and Fairways still entered into the same and included it
in its golf course development project without the former's prior
knowledge and consent. In this regard, it held that Fil-Estate and
Fairways should not have relied on Villanueva's assurances that she
would secure Ayson's acquiescence to a land swap arrangement, but
instead, exercised due diligence and prudence in taking steps to
ensure that Ayson indeed agreed to the inclusion of her property in
the golf course development project. Further, the CA agreed with the
RTC that the subject land should no longer be returned to Ayson, and
that Fil-Estate and Fairways should pay her its value instead.
Dissatisfied, both
parties separately moved for reconsideration 22 assailing the
valuation of the subject land as well as the other monetary awards.
Issues: Whether
the awards of moral damages, exemplary damages, and attorney's fees
in Ayson's favor and the corresponding amounts thereof, as well as
the correctness of the valuation of the subject land at US$40,000.00
and the monthly rental therefor proper.
The Court's Ruling:
I.
To
recapitulate, both the RTC and the CA found that Ayson is the
undisputed owner of the subject land, as evidenced by TCT No.
T-24562. Despite such knowledge, Fil-Estate and Fairways nevertheless
chose to rely on Villanueva's empty assurances that she will be able
to convince Ayson to agree on a land swap arrangement; and
thereafter, proceeded to enter the subject land and introduce
improvements thereon. The courts a quo further found that since such
acts were without Ayson's knowledge and consent, she, thus: (a)
suffered sleepless nights and mental anguish knowing that the
property she and her husband had invested for their future retirement
had been utilized by Fil-Estate and Fairways for their own sake; and
(b) had to seek legal remedies to vindicate her rights. Thus, both
lower courts concluded that Fil-Estate and Fairways' acts were done
in bad faith and resulted in injury to Ayson; hence, they are liable
for, inter alia, moral damages, exemplary damages, and attorney's
fees.
Relatedly,
the CA correctly reduced the awards for moral damages, exemplary
damages, and attorney's fees to P500,000.00, P300,000.00, and
P200,000.00, respectively, in light of the evidence adduced as well
as the prevailing circumstances of the instant case. It must be
stressed that "[ m ]oral damages are not meant to be punitive
but are designed to compensate and alleviate the physical suffering,
mental anguish, fright, serious anxiety, besmirched reputation,
wounded feelings, moral shock, social humiliation, and similar harm
unjustly caused to a person." Similarly, exemplary damages are
imposed "by way of example or correction for the public good, in
addition to the moral, temperate, liquidated or compensatory damages"
and are awarded "only if the guilty party acted in a wanton,
fraudulent, reckless, oppressive or malevolent manner." Lastly,
attorney's fees should be reasonable in all cases where an award
thereof is warranted under the circumstances.
In
addition, a legal interest at the rate of six percent ( 6%) per annum
should be imposed on all monetary awards to Ayson from the time of
the finality of this Decision until fully paid.
II.
The
Decision dated March 1, 2013 and the Resolution dated February 22,
2016 of the Court of Appeals in CA-G.R. CV. No. 03010 are hereby
AFFIRMED with MODIFICATION as follows:
(a)
petitioners Fil-Estate Properties, Inc. and Fairways & Bluewater
Resort & Country Club, Inc. are ORDERED to jointly and solidarily
pay Rosalie Sy Ayson the amounts of P52,666.00 and US$4,316.06 or its
Philippine Peso equivalent as actual damages, P500,000.00 as moral
damages, P300,000.00 as exemplary damages, and P200,000.00 as
attorney's fees and litigation expenses, with legal interest at the
rate of six percent ( 6%) per annum on all amounts due from finality
of judgment until fully paid;
( b)
the issue of the proper valuation of Lot No. 14-S covered by Transfer
Certificate of Title No. T-24562 is REMANDED to the Regional Trial
Court of Kalibo, Aklan, Branch 9 to determine its current market
value, reasonable monthly rental, and the applicable interest rate
thereon to be paid by Fil-Estate Properties, Inc. and Fairways &
Bluewater Resort & Country Club, Inc.; and
( c)
upon full payment of the ascertained current market value, monthly
rental, and interests, Rosalie Sy Ayson shall execute the necessary
documents to effectuate the transfer of Lot No. 14-S covered by
Transfer Certificate of Title No. T-24562 to Fil-Estate Properties,
Inc. and Fairways & Bluewater Resort & Country Club, Inc.
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