Tuesday, January 17, 2017

Ayson vs. Fil-Estate Properties, Inc., et al. Case Digest

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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