G.R. No. 154670 - FONTANA RESORT AND COUNTRY CLUB, INC. AND RN DEVELOPMENT CORP., VS. SPOUSES ROY S. TAN AND SUSAN C. TAN.D E C I S I O N - Supreme Court E-Library

Ruling

WHEREFORE, premises considered, judgment is hereby rendered directing [herein petitioners] to jointly and severally pay [herein respondents]: 1) The amount of P387,000.00 plus interest at the rate of 21% per annum computed from August 28, 1998 when demand was first made, until such time as payment is actually made. [15] Petitioners appealed the above-quoted ruling of Hearing Officer Bacalla before the SEC en banc . In its Decision dated July 6, 2001, the SEC en banc held: WHEREFORE, the instant appeal is hereby DENIED and the Decision of Hearing Officer Marciano S. Bacalla, Jr. dated April 28, 2000 is hereby AFFIRMED. [16] In an Order [17] dated September 19, 2001, the SEC en banc denied petitioners Motion for Reconsideration for being a prohibited pleading under the SEC Rules of Procedure. Petitioners filed before the Court of Appeals a Petition for Review under Rule 43 of the Rules of Court. Petitioners contend that even on the sole basis of respondents evidence, the appealed decisions of Hearing Officer Bacalla and the SEC en banc are contrary to law and jurisprudence. The Court of Appeals rendered a Decision on March 30, 2002, finding petitioners appeal to be partly meritorious. The Court of Appeals brushed aside the finding of the SEC that petitioners were guilty of fraudulent misrepresentation in inducing respondents to buy FRCCI shares of stock. Instead, the appellate court declared that: What seems clear rather is that in inducing the respondents to buy the Fontana shares, RN Development Corporation merely repeated to the spouses the benefits promised to all holders of Fontana Class D shares. These inducements were in fact contained in Fontanas promotion brochures to prospective subscribers which the spouses must obviously have read. [18] Nonetheless, the Court of Appeals agreed with the SEC that the sale of the two FRCCI class D shares of stock by petitioners to respondents should be rescinded. Petitioners defaulted on their promises to respondents that FLP would be fully developed and operational by the first quarter of 1998 and that as shareholders of said shares, respondents were entitled to the free use of first-class leisure facilities at FLP and free accommodations at a two-bedroom villa for five (5) ordinary weekdays and two (2) weekends every year. The Court of Appeals modified the appealed SEC judgment by ordering respondents to return their certificates of shares of stock to petitioners upon the latters refund of the price of said shares since [t]he essence of the questioned [SEC] judgment was really to declare as rescinded or annulled the sale or transfer of the shares to the respondents. [19] The appellate court additionally clarified that the sale of the FRCCI shares of stock by petitioners to respondents partakes the nature of a forbearance of money, since the amount paid by respondents for the shares was used by petitioners to defray the construction of FLP; hence, the interest rate of 12% per annum should b