- Petitioner
- National Housing Authority
- Respondent
- A.G. Development Corporation
- Citation
- G.R. No. 230139
- Court
- Supreme Court
- Division
- Third Division
- Decided
- July 10, 2023
Summary
The Supreme Court affirmed the Court of Appeals' decision with modifications in a case involving breach of a construction financing agreement between NHA and A.G. Development Corporation. Both parties were found to have breached their contractual obligations - NHA failed to release the remaining loan balance through letter of credit within 60 days, while A.G. Development failed to commence construction within the required timeframe. Applying Article 1192 of the Civil Code, the Court could not determine which party first violated the contract. The extrajudicial foreclosure conducted by NHA was declared void for failure to provide notice as stipulated in the mortgage contract. The Court disagreed with the CA's finding that A. Francisco Realty was an innocent purchaser in good faith, holding that as a real estate corporation, it should exercise higher standards of diligence. The Court ordered NHA and A. Francisco Realty to pay jointly and severally the fair market value of P87,440,000.00 less the original loan with interest, plus 6% legal interest from finality until full payment, but deleted the attorney's fees award since both parties were in default.