The Supreme Court partly granted the petition of the Abreu buyers, ruling that developer J.V. Williams Realty & Development Corporation and its president William A. Siy must jointly and severally refund all payments made for units in the unfinished La Insula Condominium project. At the same time, the Court dismissed the complaint against Land Bank of the Philippines and Goram Development Corporation for lack of merit.
The Case
J.V. Williams Realty & Development Corporation (J.V. Realty) was the developer of a proposed 21-storey condominium project known as La Insula Condominium, to be built on two parcels of land registered in its name under Transfer Certificate of Title (TCT) No. N-157412 and TCT No. N-157413.
On September 13, 1996, J.V. Realty mortgaged the subject parcels of land with Landbank, and the mortgage was annotated on the certificates of title on September 18, 1996. On January 29, 1997, J.V. Realty, through its president Siy, entered into separate Contracts to Sell for condominium units and parking slots. Spouses Gregorio B. Abreu and Cornelia M. Abreu bought Condominium Unit 1511 and Parking Slots Nos. 140-142; Enrique J. Abreu bought Condominium Unit 2003 and Parking Slots Nos. 134-136; and Antonio B. Abreu bought Condominium Unit 2002 and Parking Slots Nos. 131-133.
On August 6, 1997, the subject parcels were converted into a condominium form of ownership through a Master Deed with Declaration of Restrictions. On April 21, 1998, the HLURB issued a License to Sell to J.V. Realty, obligating it to complete the project not later than September 1999.
Landbank later foreclosed the mortgage and became the registered owner in June 2001 under TCT No. N-225068 and TCT No. N-225069. Goram Development Corporation acquired the parcels from Landbank through a Deed of Conditional Sale of Real Property dated December 29, 2006, and titles were issued in its name on January 24, 2013.
Despite the project being less than 50% complete, J.V. Realty ceased construction. Abreu et al. filed a complaint before the HLURB against Landbank, J.V. Realty, Siy, and Goram Development, seeking to compel them jointly and severally to complete the project and turn over the units, plus actual and moral damages of PHP 1 million each and attorney's fees.
The Issue
The Court addressed whether Landbank and Goram Development could be held solidarily liable for J.V. Realty's contractual and statutory obligations to the buyers, and what remedy the buyers were entitled to given that completing the project was no longer feasible.
The Ruling
The Court held that the annotation of the Master Deed binds Goram Development to the restrictions and encumbrances affecting the subject parcels, but does not automatically convert it into a substitute developer or solidary debtor of J.V. Realty and Siy. Such liability must arise from a clear legal provision, contractual stipulation, or express assumption of liability. The Court ruled that J.V. Realty and Siy remain ultimately liable for the incomplete construction and non-delivery of the project.
In its disposition, the Court ordered: "FOR THESE REASONS, the Petition is PARTLY GRANTED. The Decision of the Court of Appeals dated April 10, 2025 in CA-G.R. SP No. 174454 is AFFIRMED with MODIFICATION in that the Complaint filed by petitioners spouses Gregorio B. Abreu and Cornelia M. Abreu, Enrique J. Abreu, and Antonio B. Abreu sufficiently states a cause of action against respondents Landbank of the Philippines and Goram Development Corporation. Nevertheless, for lack of merit, the Complaint against respondents Landbank of the Philippines and Goram Development Corporation is DISMISSED."
The Court reinstated the HLURB Arbiter's Decision dated November 6, 2014 insofar as it orders J.V. Realty and Siy to jointly and severally refund the buyers, and to pay each petitioner moral damages, exemplary damages, and attorney's fees and costs of suit. All monetary awards earn legal interest at 6% per annum from the finality of the Decision until full payment.
By the Numbers
- Spouses Abreu refund: PHP 9,456,349.06
- Enrique J. Abreu refund: PHP 4,325,323.13
- Antonio B. Abreu refund: PHP 4,325,323.13
- Moral damages: PHP 50,000.00 per petitioner
- Exemplary damages: PHP 50,000.00 per petitioner
- Attorney's fees and costs of suit: PHP 50,000.00
- Legal interest: 6% per annum from finality until full payment
- Mortgage to Landbank: September 13, 1996 (annotated September 18, 1996)
- Contracts to Sell: January 29, 1997
- Master Deed executed: August 6, 1997
- License to Sell issued: April 21, 1998
The Court's Reasoning
The Court explained that notice of the condominium project is not equivalent to an express undertaking to complete the project, reimburse buyers, or assume J.V. Realty's obligations under Presidential Decree No. 957 and the Contracts to Sell. Landbank and Goram Development were not parties to the Contracts to Sell and could not be held liable absent a clear legal or contractual basis.
Because specific performance directing the completion of the condominium project was no longer feasible, the Court held that the buyers were entitled to the statutory remedies under Section 23 of Presidential Decree No. 957. Citing Phinma Property Holdings Corporation v. Rivera, the Court noted that Section 23 grants buyers the option to continue the contract but suspend payments, or to cancel the contract and demand a refund of all payments made, excluding delinquency interests. The Court ruled that J.V. Realty and Siy are liable to reimburse the buyers for all payments made, including amortization interests but excluding delinquency interests, with legal interest.
Source: Supreme Court Decision in G.R. No. 279896, penned by Associate Justice Raul L. Hernando.
This report summarizes a public Supreme Court decision and is not legal advice.