Case Digest: CARLOS TAMAYO v. MILAGROS HUANG et al.

CARLOS TAMAYO v. MILAGROS HUANG et al.

480 SCRA 156 (2006)

In case the developer of a subdivision or condominium fails in its obligation, it gives the buyer the option to demand reimbursement of the total amount paid, or to wait for further development of the subdivision, and when the buyer opts for the latter alternative, he may suspend payment of installments until such time that the owner or developer had fulfilled its obligation to him.

Respondents Huang Sui Sin, Josefino Huang, Miguel Huang and Milagros Huang, entered into a contract of ―Indenture‖ with EAP Development Corporation (EAP) under which the EAP shall develop their lands into a first class subdivision. Carlos R. Tamayo purchased a lot from Huang et al. under a contract to sell. In the said agreement, Tamayo agreed to pay in 60 monthly installments a total purchase price of P242, 080.00. Tamayo paid installments up to June 1982, but stopped paying thereafter due to the non-development of the subdivision as agreed upon in the contract. Later on, Huang et al. filed an action to rescind the contract of ―Indenture‖ against EAP for abandoning the development of the subdivision. Such petition was granted by the Regional Trial Court (RTC).

More than 5 years after the execution of the contract to sell, Huang et al. demanded Tamayo for the payment of lot. Tamayo issued a check representing the full payment of the value of the lot, for which a receipt was issued. However, Huang et al. returned the check to Tamayo. Tamayo thus filed an action for specific performance with damages against Huang et al. before the Housing and Land Use Regulatory Board (HLURB). Both the HLURB Arbiter and HLRUB Board of Commissioners dismissed Tamayo‘s complaint, on the ground that there has been no valid consignation. However, HLURB removed the awards of damages in favor of Huang et al.

On appeal by Huang et al. to the Office of the President (OP), they raised for the first time that the subject lot has been sold to certain Nene Abijar. The OP affirmed the decision of the HLURB holding that Abijar‘s right as a purchaser of the land in good faith prevails over the right of Tamayo, without prejudice to Tamayo‘s right to reimburse what he has already paid.

ISSUE:

Whether or not the contract to purchase the lot between Tamayo and Huang et al. remains valid

HELD:

It is not disputed that EAP, acting as the Attorney-in-Fact and Manager of the Huang et al. totally abandoned the development of the subdivision in 1983, thus prompting Huang et al., to continue development thereof on May 22, 1985 and to even file a complaint to rescind its contract of ―Indenture‖ with EAP which the RTC Davao granted.