Ayala Corp vs Rosa-Diana Realty & Development Corp : 134284 : December 1, 2000 : J. De Leon, Jr. : Second Division

SECOND DIVISION

[G.R. No. 134284. December 1, 2000]

AYALA CORPORATION, petitioner, vs. ROSA-DIANA REALTY AND DEVELOPMENT CORPORATION, respondent.

D E C I S I O N

DE LEON, JR., J.:

Before us is a petition for review on certiorari seeking the reversal of a decision rendered by the Court of Appeals in C.A. G.R. C.V. No. 4598 entitled, “Ayala Corporation vs. Rosa-Diana Realty and Development Corporation,” dismissing Ayala Corporation’s petition for lack of merit.

The facts of the case are not in dispute:

Petitioner Ayala Corporation (hereinafter referred to as Ayala) was the registered owner of a parcel of land located in Alfaro Street, Salcedo Village, Makati City with an area of 840 square meters, more or less and covered by Transfer Certificate of Title (TCT) No. 233435 of the Register of Deeds of Rizal.

On April 20, 1976, Ayala sold the lot to Manuel Sy married to Vilma Po and Sy Ka Kieng married to Rosa Chan. The Deed of Sale executed between Ayala and the buyers contained Special Conditions of Sale and Deed Restrictions. Among the Special Conditions of Sale were:

a) the vendees shall build on the lot and submit the building plans to the vendor before September 30, 1976 for the latter’s approval

b) the construction of the building shall start on or before March 30, 1977 and completed before 1979. Before such completion, neither the deed of sale shall be registered nor the title released even if the purchase price shall have been fully paid

c) there shall be no resale of the property

The Deed Restrictions, on the other hand, contained the stipulation that the gross floor area of the building to be constructed shall not be more than five (5) times the lot area and the total height shall not exceed forty two (42) meters. The restrictions were to expire in the year 2025.

Manuel Sy and Sy Ka Kieng failed to construct the building in violation of the Special Conditions of Sale. Notwithstanding the violation, Manuel Sy and Sy Ka Kieng, in April 1989, were able to sell the lot to respondent Rosa-Diana Realty and Development Corporation (hereinafter referred to as Rosa-Diana) with Ayala’s approval. As a consideration for Ayala to release the Certificate of Title of the subject property, Rosa-Diana, on July 27, 1989 executed an Undertaking promising to abide by said special conditions of sale executed between Ayala and the original vendees. Upon the submission of the Undertaking, together with the building plans for a condominium project, known as “The Peak”, Ayala released title to the lot, thereby enabling Rosa-Diana to register the deed of sale in its favor and obtain Certificate of Title No. 165720 in its name. The title carried as encumbrances the special conditions of sale and the deed restrictions. Rosa-Diana’s building plans as approved by Ayala were “subject to strict compliance of cautionary notices appearing on the building plans and to the restrictions encumbering the Lot regarding the use and occupancy of the same.”

Thereafter, Rosa-Diana submitted to the building official of Makati another set of building plans for “The Peak” which were substantially different from those that it earlier submitted to Ayala for approval. While the building plans which Rosa-Diana submitted to Ayala for approval envisioned a 24-meter high, seven (7) storey condominium project with a gross floor area of 3,968.56 square meters, the building plans which Rosa-Diana submitted to the building official of Makati, contemplated a 91.65 meter high, 38 storey condominium building with a gross floor area of 23,305.09 square meters.[1] Needless to say, while the first set of building plans complied with the deed restrictions, the latter set exceeded the same.

During the construction of Rosa-Diana’s condominium project, Ayala filed an action with the Regional Trial Court (RTC) of Makati, Branch 139 for specific performance, with application for a writ of preliminary injunction/temporary restraining order against Rosa-Diana Realty seeking to compel the latter to comply with the contractual obligations under the deed of restrictions annotated on its title as well as with the building plans it submitted to the latter. In the alternative, Ayala prayed for rescission of the sale of the subject lot to Rosa- Diana Realty.

The lower court denied Ayala’s prayer for injunctive relief, thus enabling Rosa-Diana to complete the construction of the building. Undeterred, Ayala tried to cause the annotation of a notice of lis pendens on Rosa-Diana’s title. The Register of Deeds of Makati, however, refused registration of the notice of lis pendens on the ground that the case pending before the trial court, being an action for specific performance and/or rescission, is an action in personam which does not involve the title, use or possession of the property.[2] The Land Registration Authority (LRA) reversed the ruling of the Register of Deeds saying that an action for specific performance or rescission may be classified as a proceeding of any kind in court directly affecting title to the land or the use or occupation thereof for which a notice of lis pendens may be held proper.[3] The decision of the LRA, however, was overturned by the Court of Appeals in C.A. G.R. S.P. No. 29157. In G.R. No. 112774, We affirmed the ruling of the CA on February 16, 1994 saying

We agree with respondent court that the notice of lis pendens is not proper in this instance. The case before the trial court is a personal action since the cause of action thereof arises primarily from the alleged violation of the Deed of Restrictions.

In the meantime, Ayala completed its presentation of evidence before the trial court. Rosa-Diana filed a Demurrer to Evidence averring that Ayala failed to establish its right to the relief sought inasmuch as (a) Ayala admittedly does not enforce the deed restrictions uniformly and strictly (b) Ayala has lost its right/power to enforce the restrictions due to its own acts and omissions; and (c) the deed restrictions are no longer valid and effective against lot buyers in Ayala’s controlled subdivision.

The trial court sustained Rosa-Diana’s Demurrer to Evidence saying that Ayala was guilty of abandonment and/or estoppel due to its failure to enforce the terms of deed of restrictions and special conditions of sale against Manuel Sy and Sy Ka Kieng. The trial court noted that notwithstanding the violation of the special conditions of sale, Manuel Sy and Sy Ka Kieng were able to transfer the title to Rosa-Diana with the approval of Ayala. The trial court added that Ayala’s failure to enforce the restrictions with respect to Trafalgar, Shellhouse, Eurovilla, LPL Plaza, Parc Regent, LPL Mansion and Leronville which are located within Salcedo Village, shows that Ayala discriminated against those which it wants to have the obligation enforced. The trial court then concluded that for Ayala to discriminately choose which obligor would be made to follow certain conditions and which should not, did not seem fair and legal.

The Court of Appeals affirmed the ruling of the trial court saying that the “appeal is sealed by the doctrine of the law of the case in C.A. G.R. S.P. No. 29157” where it was stated that

]x x x Ayala is barred from enforcing the Deed of Restrictions in question pursuant to the doctrine of waiver and estoppel. Under the terms of the deed of sale, the vendee Sy Ka Kieng assumed faithful compliance with the special conditions of sale and with the Salcedo Village Deed of Restrictions. One of the conditions was that a building would be constructed within one year. However, Sy Ka Kieng failed to construct the building as required under the Deed of Sale. Ayala did nothing to enforce the terms of the contract. In fact, it even agreed to the sale of the lot by Sy Ka Kieng in favor of petitioner Realty in 1989 or thirteen (13) years later. We, therefore, see no justifiable reason for Ayala to attempt to enforce the terms of the conditions of sale against the petitioner.

x x x

The Court of Appeals also cited C.A. G.R. C.V. No. 46488 entitled, “Ayala Corporation vs. Ray Burton Development Corporation” which relied on C.A. G.R. S.P. No. 29157 in ruling that Ayala is barred from enforcing the deed restrictions in dispute. Upon a motion for reconsideration filed by herein petitioner, the Court of Appeals clarified that “the citation of the decision in Ayala Corporation vs. Ray Burton Development Corporation, C.A. G.R. C.V. No. 46488, February 27, 1996, was made not because said decision is res judicata to the case at bar but rather because it is precedential under the doctrine of stare decisis.”

Upon denial of said motion for reconsideration, Ayala filed the present appeal.

Ayala contends that the pronouncement of the Court of Appeals in C.A. G.R. S.P. No. 29157 that it is estopped from enforcing the deed restrictions is merely obiter dicta inasmuch as the only issue raised in the aforesaid case was the propriety of a lis pendens annotation on Rosa-Diana’s certificate of title.

Ayala avers that Rosa-Diana presented no evidence whatsoever on Ayala’s supposed waiver or estoppel in C.A. G.R. S.P. No. 29157. Ayala likewise pointed out that at the time C.A. G.R. S.P. No. 29157 was on appeal, the issues of the validity and continued viability of the deed of restrictions and their enforceability by Ayala were joined and then being tried before the trial court.

Petitioner’s assignment of errors in the present appeal may essentially be summarized as follows:

I. The Court of Appeals acted in a manner not in accord with law and the applicable decisions of the Supreme Court in holding that the doctrine of the law of the case, or stare decisis, operated to dismiss Ayala’s appeal.

II. The Court of Appeals erred as a matter of law and departed from the accepted and usual course of judicial proceedings when it failed to expressly pass upon the specific errors assigned in Ayala’s appeal.

A discussion on the distinctions between law of the case, stare decisis and obiter dicta is in order.

The doctrine of the law of the case has certain affinities with, but is clearly distinguishable from, the doctrines of res judicata and stare decisis, principally on the ground that the rule of the law of the case operates only in the particular case and only as a rule of policy and not as one of law.[4] At variance with the doctrine of stare decisis, the ruling adhered to in the particular case under the doctrine of the law of the case need not be followed as a precedent in subsequent litigation between other parties, neither by the appellate court which made the decision followed on a subsequent appeal in the same case, nor by any other court. The ruling covered by the doctrine of the law of the case is adhered to in the single case where it arises, but is not carried into other cases as a precedent.[5] On the other hand, under the doctrine of stare decisis, once a point of law has been established by the court, that point of law will, generally, be followed by the same court and by all courts of lower rank in subsequent cases where the same legal issue is raised.[6] Stare decisis proceeds from the first principle of justice that, absent powerful countervailing considerations, like cases ought to be decided alike.[7]

The Court of Appeals, in ruling against petitioner Ayala Corporation stated that the appeal is “sealed” by the doctrine of the law of the case, referring to G.R. No. 112774 entitled “Ayala Corporation, petitioner vs. Court of Appeals, et al., respondents”. The Court of Appeals likewise made reference to C.A. G.R. C.V. No. 46488 entitled, “Ayala Corporation vs. Ray Burton Development Corporation, Inc.” in ruling against petitioner saying that it is jurisprudential under the doctrine of stare decisis.

It must be pointed out that the only issue that was raised before the Court of Appeals in C.A. G.R. S.P. No. 29157 was whether or not the annotation of lis pendens is proper. The Court of Appeals, in its decision, in fact stated “the principal issue to be resolved is: whether or not an action for specific performance, or in the alternative, rescission of deed of sale to enforce the deed of restrictions governing the use of property, is a real or personal action, or one that affects title thereto and its use or occupation thereof."[8]

In the aforesaid decision, the Court of Appeals even justified the cancellation of the notice of lis pendens on the ground that Ayala had ample protection should it succeed in proving its allegations regarding the violation of the deed of restrictions, without unduly curtailing the right of the petitioner to fully enjoy its property in the meantime that there is as yet no decision by the trial court.[9]

From the foregoing, it is clear that the Court of Appeals was aware that the issue as to whether petitioner is estopped from enforcing the deed of restrictions has yet to be resolved by the trial court. Though it did make a pronouncement that the petitioner is estopped from enforcing the deed of restrictions, it also mentioned at the same time that this particular issue has yet to be resolved by the trial court. Notably, upon appeal to this Court, We have affirmed the ruling of the Court of Appeals only as regards the particular issue of the propriety of the cancellation of the notice of lis pendens.

We see no reason then, how the law of the case or stare decisis can be held to be applicable in the case at bench. If at all, the pronouncement made by the Court of Appeals that petitioner Ayala is barred from enforcing the deed of restrictions can only be considered as obiter dicta. As earlier mentioned, the only issue before the Court of Appeals at the time was the propriety of the annotation of the lis pendens. The additional pronouncement of the Court of Appeals that Ayala is estopped from enforcing the deed of restrictions even as it recognized that this said issue is being tried before the trial court was not necessary to dispose of the issue as to the propriety of the annotation of the lis pendens. A dictum is an opinion of a judge which does not embody the resolution or determination of the court, and made without argument, or full consideration of the point, not the proffered deliberate opinion of the judge himself.[10] It is not necessarily limited to issues essential to the decision but may also include expressions of opinion which are not necessary to support the decision reached by the court. Mere dicta are not binding under the doctrine of stare decisis.[11]

While the Court of Appeals did not err in ruling that the present petition is not barred by C.A. G.R. C.V. No. 46488 entitled “Ayala Corporation vs. Ray Burton Development Inc.” under the doctrine of res judicata, neither, however, can the latter case be cited as precedential under the doctrine of stare decisis. It must be pointed out that at the time the assailed decision was rendered, C.A. G.R. C.V. No. 46488 was on appeal with this Court. Significantly, in the decision We have rendered in Ayala Corporation vs. Ray Burton Development Corporation[12] which became final and executory on July 5, 1999 we have clearly stated that “An examination of the decision in the said Rosa-Diana case reveals that the sole issue raised before the appellate court was the propriety of the lis pendens annotation. However, the appellate court went beyond the sole issue and made factual findings bereft of any basis in the record to inappropriately rule that AYALA is in estoppel and has waived its right to enforce the subject restrictions. Such ruling was immaterial to the resolution of the issue of the propriety of the annotation of the lis pendens. The finding of estoppel was thus improper and made in excess of jurisdiction.”

Coming now to the merits of the case, petitioner avers that the Court of Appeals departed from the usual course of judicial proceedings when it failed to expressly pass upon the specific errors assigned in its appeal. Petitioner reiterates its contention that the trial court’s findings that Ayala has waived its right to enforce the deed of restrictions is not supported by law and evidence.

We find merit in the petition.

It is basic that findings of fact of the trial court and the Court of Appeals are conclusive upon the Supreme Court when supported by substantial evidence.[13] We are constrained, however, to review the trial court’s findings of fact, which the Court of Appeals chose not to pass upon, inasmuch as there is ample evidence on record to show that certain facts were overlooked which would affect the disposition of the case.

In its assailed decision of February 4, 1994, the trial court, ruled in favor of respondent Rosa-Diana Realty on the ground that Ayala had not acted fairly when it did not institute an action against the original vendees despite the latter’s violation of the Special Conditions of Sale but chose instead to file an action against herein respondent Rosa-Diana. The trial court added that although the 38 storey building of Rosa-Diana is beyond the total height restriction, it was not violative of the National Building Code. According to the trial court the construction of the 38 storey building known as “The Peak” has not been shown to have been prohibited by law and neither is it against public policy.

It bears emphasis that as complainant, Ayala had the prerogative to initiate an action against violators of the deed restrictions. That Rosa-Diana had acted in bad faith is manifested by the fact that it submitted two sets of building plans, one which was in conformity with the deed restrictions submitted to Ayala and MACEA, and the other, which exceeded the height requirement in the deed restrictions to the Makati building official for the purpose of procuring a building permit from the latter. Moreover, the violation of the deed restrictions committed by respondent can hardly be denominated as a minor violation. It should be pointed out that the original building plan which was submitted to and approved by petitioner Ayala Corporation, envisioned a twenty four (24) meter high, seven (7) storey condominium whereas the respondent’s building plan which was submitted to and approved by the building official of Makati is that of a thirty eight (38) storey, 91.65 meters high, building. At present, the Peak building of respondent which actually stands at 133.65 meters with a total gross floor area of 23,305.09 square meters, seriously violates the dimensions indicated in the building plans submitted by Rosa-Diana to petitioner Ayala for approval inasmuch as the Peak building exceeds the approved height limit by about 109 meters and the allowable gross floor area under the applicable deed restrictions by about 19,105 square meters. Clearly, there was a gross violation of the deed restrictions and evident bad faith by the respondent.

It may not be amiss to mention that the deed restrictions were revised in a general membership meeting of the association of lot owners in Makati Central Business District – the Makati Commercial Estate Association, Inc. (MACEA) – whereby direct height restrictions were abolished in lieu of floor area limits. Respondent, however, did not vote for the approval of this revision during the General Membership meeting which was held on July 11, 1990 at the Manila Polo Club Pavilion, Makati, Metro Manila and again on July 12, 1990 at the Hotel Mandarin Oriental, Makati, Metro Manila. Hence, respondent continues to be bound by the original deed restrictions applicable to Lot 7, Block 1 and annotated on its title to said lot. In any event, assuming arguendo that respondent voted for the approval of direct height restrictions in lieu of floor area limits, the total floor area of its Peak building would still be violative of the floor area limits to the extent of about 9,865 square meters of allowable floor area under the MACEA revised restrictions.

Respondent Rosa-Diana avers that there is nothing illegal or unlawful in the building plans which it used in the construction of the Peak condominium “inasmuch as it bears the imprimatur of the building official of Makati, who is tasked to determine whether building and construction plans are in accordance with the law, notably, the National Building Code.”

Respondent Rosa-Diana, however, misses the point inasmuch as it has freely consented to be bound by the deed restrictions when it entered into a contract of sale with spouses Manuel Sy and Sy Ka Kieng. While respondent claims that it was under the impression that the deed restrictions were no longer being enforced by Ayala, the Undertaking[14] it executed belies this same claim. In said Undertaking, respondent agreed to “construct and complete the construction of the house on said lot as required under the special condition of sale.” Respondent likewise bound itself to abide and comply with x x x the condition of the rescission of the sale by Ayala Land, Inc. on the grounds therein stated x x x.

Contractual obligations between parties have the force of law between them and absent any allegation that the same are contrary to law, morals, good customs, public order or public policy, they must be complied with in good faith. Hence, Article 1159 of the New Civil Code provides

“Obligations arising from contracts have the force of law between the contracting parties and should be complied with in good faith.”

Respondent Rosa-Diana insists that the trial court had already ruled that the Undertaking executed by its Chairman and President cannot validly bind Rosa-Diana and hence, it should not be held bound by the deed restrictions.

We agree with petitioner Ayala’s observation that respondent Rosa-Diana’s special and affirmative defenses before the trial court never mentioned any allegation that its president and chairman were not authorized to execute the Undertaking. It was inappropriate therefore for the trial court to rule that in the absence of any authority or confirmation from the Board of Directors of respondent Rosa-Diana, its Chairman and the President cannot validly enter into an undertaking relative to the construction of the building on the lot within one year from July 27, 1989 and in accordance with the deed restrictions. Curiously, while the trial court stated that it cannot be presumed that the Chairman and the President can validly bind respondent Rosa-Diana to enter into the aforesaid Undertaking in the absence of any authority or confirmation from the Board of Directors, the trial court held that the ordinary presumption of regularity of business transactions is applicable as regards the Deed of Sale which was executed by Manuel Sy and Sy Ka Kieng and respondent Rosa-Diana. In the light of the fact that respondent Rosa-Diana never alleged in its Answer that its president and chairman were not authorized to execute the Undertaking, the aforesaid ruling of the trial court is without factual and legal basis and surprising to say the least.

The fact alone that respondent Rosa-Diana conveniently prepared two sets of building plans - with one set which fully conformed to the Deed Restrictions and another in gross violation of the same - should have cautioned the trial court to conclude that respondent Rosa-Diana was under the erroneous impression that the Deed Restrictions were no longer enforceable and that it never intended to be bound by the Undertaking signed by its President and Chairman. We reiterate that contractual obligations have the force of law between parties and unless the same are contrary to public policy morals and good customs, they must be complied by the parties in good faith.

Petitioner, in its Petition, prays that judgment be rendered:

a) ordering Rosa-Diana Realty and Development Corporation to comply with its contractual obligations in the construction of the Peak by removing, or closing down and prohibiting Rosa-Diana from using, selling, leasing or otherwise disposing of, the portions of areas thereof constructed beyond or in excess of the approved height, as shown by the building plans submitted to, and approved by, Ayala, including any other portion of the building constructed not in accordance with the said building plans, during the effectivity of the Deed Restrictions;

b) Alternatively, in the event specific performance has become impossible:

(1)Ordering the cancellation and rescission of the April 20, 1976 Deed of Sale by Ayala in favor of the original vendees thereof as well as the subsequent Deed of Sale executed by such original vendees in favor of Rosa-Diana, and ordering Rosa-Diana to return to Ayala Lot 7, Block 1 of Salcedo Village;

(2)ordering the cancellation of Transfer Certificate of Title No. 165720 (in the name of Rosa-Diana) and directing the office of the Register of Deeds of Makati to issue a new title over the lot in the name of Ayala; and

(3)ordering Rosa-Diana to pay Ayala attorney’s fees in the amount of P500,000.00, exemplary damages in the amount of P5,000,000.00 and the costs of suit.

It must be noted that during the trial respondent Rosa-Diana was able to complete the construction of The Peak as a building with a height of thirty eight (38) floors or 133.65 meters and with a total gross floor area of 23,305.09 square meters. Having been completed for a number of years already, it would be reasonable to assume that it is now fully tenanted. Consequently, the remedy of specific performance by respondent is no longer feasible. However, neither can we grant petitioner’s prayer for the cancellation and rescission of the April 20, 1976 Deed of Sale by petitioner Ayala in favor of the original vendees thereof as well as the subsequent Deed of Sale executed by the original vendees in favor of respondent Rosa-Diana inasmuch as the original vendees were not even made parties in the case at bar. Moreover, petitioner Ayala, having agreed to the resale of the property by the original vendees, spouses Manuel Sy and Sy Ka Kieng, to respondent Rosa-Diana despite the failure of Manuel Sy and Sy Ka Kieng to comply with their obligation to construct a building within one year from April 20, 1976, has effectively waived its right to rescind the sale of the subject lot to the original vendees.

Faced with the same question as to the proper remedy available to petitioner in the case of “Ayala Corporation vs. Ray Burton Development Inc.,” a case which is on all fours with the case at bench, we ruled therein that the party guilty of violating the deed restrictions may only be held alternatively liable for substitute performance of its obligation, that is, for the payment of damages. In the aforesaid case it was observed that the Consolidated and Revised Deed Restrictions (CRDR) imposed development charges on constructions which exceed the estimated Gross Limits permitted under the original Deed Restrictions but which are within the limits of the CRDR’s.

The pertinent portion of the Deed of Restrictions reads:

3. DEVELOPMENT CHARGE

For any building construction within the Gross Floor Area limits defined under Paragraphs C-2.1 to C-2.4 above, but which will result in a Gross Floor Area exceeding certain standards defined in Paragraphs C-3.1-C below, the OWNER shall pay MACEA, prior to the construction of any new building, a DEVELOPMENT CHARGE as a contribution to a trust fund to be administered by MACEA. This trust fund shall be used to improve facilities and utilities in Makati Central District.

3.1. The amount of the development charge that shall be due from the OWNER shall be computed as follows:

DEVELOPMENT CHARGE = A x (B-C-D)

where:

A – is equal to the Area Assessment which shall be set at Five Hundred Pesos (P500.00) until December 31,1990. Each January 1st thereafter, such amount shall increase by ten percent (10%) over the Area Assessment charged in the immediately preceding year; provided that beginning 1995 and at the end of every successive five-year period thereafter, the increase in the Area Assessment shall be reviewed and adjusted by the VENDOR to correspond to the accumulated increase in the construction cost index during the immediately preceding five years as based on the weighted average of wholesale price and wage indices of the National Census and Statistics Office and the Bureau of Labor Statistics.

B - is equal to the Gross Floor Area of the completed or expanded building in square meters.

C - is equal to the estimated Gross Floor Area permitted under the original deed restrictions, derived by multiplying the lot area by the effective original FAR shown below for each location.

We then ruled in the aforesaid case that the development charges are a fair measure of compensatory damages which therein respondent Ray Burton Development Inc. is liable to Ayala Corporation. The dispositive portion of the decision in the said case which is squarely applicable to the case at bar, reads as follows:

WHEREFORE, premises considered, the assailed Decision of the Court of Appeals dated February 27, 1996, in CA-G.R. C.V. No. 46488, and its Resolution dated October 7, 1996 are hereby REVERSED and SET ASIDE, and in lieu thereof, judgment is hereby rendered finding that:

(1) The Deed Restrictions are valid and petitioner AYALA is not estopped from enforcing them against lot owners who have not yet adopted the Consolidated and Revised Deed Restrictions.

(2) Having admitted that the Consolidated and Revised Deed Restrictions are the applicable Deed Restrictions to Ray Burton Development Corporation, RBDC should be, and is bound by the same.

(3) Considering that Ray Burton Development Corporation’s Trafalgar plaza exceeds the floor area limits of the Deed Restrictions, RBDC is hereby ordered to pay development charges as computed under the provisions of the consolidated and Revised Deed Restrictions currently in force.

(4) Ray Burton Development corporation is further ordered to pay AYALA exemplary damages in the amount of P2,500,000.00 attorney’s fees in the amount of P250,000.00.

SO ORDERED.

There is no reason why the same rule should not be followed in the case at bar, the remedies of specific performance and/or rescission prayed for by petitioner no longer being feasible. In accordance with the peculiar circumstances of the case at bar, the development charges would certainly be a fair measure of compensatory damages to petitioner Ayala.

Exemplary damages in the sum of P2,500,000.00 as prayed for by petitioner are also in order inasmuch as respondent Rosa-Diana was in evident bad faith when it submitted a set of building plans in conformity with the deed restrictions to petitioner Ayala for the sole purpose of obtaining title to the property, but only to prepare and later on submit another set of building plans which are in gross violation of the Deed Restrictions. Petitioner Ayala is likewise entitled to an award of attorney’s fees in the sum of P250,000.00.

WHEREFORE, the assailed Decision of the Court of Appeals dated December 4, 1997 and its Resolution dated June 19, 1998 , C.A. G.R. C.V. No. 4598, are REVERSED and SET ASIDE. In lieu thereof, judgment is rendered

a) ordering respondent Rosa-Diana Realty and Development Corporation to pay development charges as computed under the provisions of the consolidated and Revised Deed Restrictions currently in force; and

b) ordering respondent Rosa-Diana Realty and Development Corporation to pay petitioner Ayala Corporation exemplary damages in the sum of P2,500,000.00, attorney’s fees in the sum of P250,000.00 and the costs of the suit.

SO ORDERED.

Bellosillo, (Chairman), Mendoza, Quisumbing, and Buena, JJ., concur.