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FIL-ESTATE v. SPOUSES RONQUILLO

The Supreme Court ruled in favor of the spouses Ronquillo in their case against Fil-Estate Properties and Fil-Estate Network. The spouses had paid over 2 million pesos in reservation fees and amortizations for a condominium unit but construction was halted. While Fil-Estate claimed the Asian Financial Crisis caused delays, the Court found this was not an unforeseeable event that excused their contractual obligations. Furthermore, while Fil-Estate was found liable to refund payments with interest, the Court determined the proper interest rate was 6% rather than the 12% imposed originally.

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104 views1 page

FIL-ESTATE v. SPOUSES RONQUILLO

The Supreme Court ruled in favor of the spouses Ronquillo in their case against Fil-Estate Properties and Fil-Estate Network. The spouses had paid over 2 million pesos in reservation fees and amortizations for a condominium unit but construction was halted. While Fil-Estate claimed the Asian Financial Crisis caused delays, the Court found this was not an unforeseeable event that excused their contractual obligations. Furthermore, while Fil-Estate was found liable to refund payments with interest, the Court determined the proper interest rate was 6% rather than the 12% imposed originally.

Uploaded by

Ken ChaseMaster
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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FIL-ESTATE v. SPOUSES RONQUILLO, G.R. No. 185798, January 13, 2014 [Per J.

Perez, Second Division]

FACTS:

Petitioner Fil-Estate Properties, Inc. is the owner and developer of the Central Park Place Tower while co-petitioner Fil-Estate
Network, Inc. is its authorized marketing agent. Spouses Conrado and Maria Victoria Ronquillo purchased from petitioners an
82-square meter condominium unit for a pre-selling contract price of P5,174,000.00. On 29 August 1997, respondents executed
and signed a Reservation Application Agreement wherein they deposited P200,000.00 as reservation fee. As agreed upon,
respondents paid the full downpayment of P1,552,200.00 and had been paying the P63,363.33 monthly amortizations until
September 1998.

Upon learning that construction works had stopped, respondents likewise stopped paying their monthly amortization. Claiming to
have paid a total of P2,198,949.96 to Fil-Estate, spouses Ronquillo through two (2) successive letters, demanded a full refund of
their payment with interest. When their demands went unheeded, spouses Ronquillo were constrained to file a Complaint for
Refund and Damages before the Housing and Land Use Regulatory Board (HLURB). Spouses prayed for reimbursement/refund
of P2,198,949.96 representing the total amortization payments, P200,000.00 as and by way of moral damages, attorney’s fees and
other litigation expenses.

On 13 June 2002, the HLURB in favor of herein Spouses Ronquillo. The Arbiter considered petitioners’ failure to develop the
condominium project as a substantial breach of their obligation which entitlesspouses to seek for rescission with payment of
damages. The Arbiter also stated that mere economic hardship is not an excuse for contractual and legal delay.

ISSUES:

1. Whether or not the Asian financial crisis constitutes a fortuitous event which would justify delay by Fil-Estate in the
performance of their contractual obligation

2. Assuming that Fil-Estate are liable, whether or not 12% interest was correctly imposed on the judgment award

HELD:

FIRST ISSUE: 

No. The Supreme Court held that the Asian financial crisis is not a fortuitous event that would excuse Fil-Estate from performing
their contractual obligation. The Court ruled that “we cannot generalize that the Asian financial crisis in 1997 was unforeseeable
and beyond the control of a business corporation. It is unfortunate that Fil-Estate apparently met with considerable difficulty e.g.
increase cost of materials and labor, even before the scheduled commencement of its real estate project as early as 1995.
However, a real estate enterprise engaged in the pre-selling of condominium units is concededly a master in projections on
commodities and currency movements and business risks. The fluctuating movement of the Philippine peso in the foreign
exchange market is an everyday occurrence, and fluctuations in currency exchange rates happens everyday, thus, not an instance
of caso fortuito.”

SECOND ISSUE: 

No. The Court held that 6% is the proper legal interest rate. The resulting modification of the award of legal interest is, also, in
line with our recent ruling in Nacar v. Gallery Frames, embodying the amendment introduced by the Bangko Sentral ng Pilipinas
Monetary Board in BSP-MB Circular No. 799 which pegged the interest rate at 6% regardless of the source of obligation.

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