Republic of the Philippines

Office of the President of the Philippines

HOUSING AND LAND USE REGULATORY BOARD
NORTHERN TAGALOG REGIONAL OFFICE
rd

3 Floor, Insular Life Building, Brgy. Dolores,

City of San Fernando, Pampanga

ADELFA J. DACEY,
Complainant,
- versus -

HLURB CASE NO. NTR-REM-0521112-510

MT. EVEREST PROPERTIES,

INC.
Respondent.
x-----------------------------------x

DECISION
This is a case for refund and damages filed by Adelfa J. Dacey against
Mt. Everest Properties Inc.

The antecedents of this case are as follows:

Complainant Adelfa J. Dacey avers that sometime in February 2003,

respondent Mt. Everest Properties Inc. offered for sale lot located in St.
Eugene Homes, Calapan, Subic, Zambales which described in the Deed of
Conditional Sale as Lot 24, Block 3, Phase I, with an area of One Hundred
Forty One (141) square meters; that the complainant and respondent agreed
that a Deed of Absolute Sale pertaining to the subject lot will be executed in
favor of complainant upon full payment of the contract price of 479,400;
that sometime in February 2003, complainant paid to the respondent the
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total contract price at a discount of 10% amounting to 431,460; that

respondent failed to execute the Deed of Absolute Sale and issue the title in
favor of the complainant despite full payment of the purchase price as
agreed in the Deed of Conditional Sale; and that in view of the failure by the
respondent to execute the Deed of absolute sale and issue the title in her
name, complainant ask for a full refund of her payments. Hence, this case.

Aggrieved complainant prayed to order the respondent to make a full

refund of all the payments made and attorneys fees of 50,000.00.

Summons was served on May 27, 2013 but still respondent did not
file its Answer, hence, an Order dated April 04, 2013 was issued for the
complainant to provide new address of the respondent corporation.

On May 02, 2014 an Order was issued by this Office to grant the
complainants Motion to serve Service of summons by Publication.

After series of Orders, this Office requires the complainant to submit

her position paper, as well as their draft decision. Thereafter, the case is
deemed submitted for resolution.

This Office resolves first the issue of jurisdiction.Section 2. Coverage- These Rules shall be applicable to the
following disputes or controversies:
(a) xxx;
(b) Claims involving refund and other claims filed by
subdivision lot or condominium unit buyer against the
project owner, developer, broker or salesman; xxx
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This provision must be read in the light of the laws preamble, which
explains the reasons for enactment of the law or the contextual basis for its
interpretation. The laws introductory clause states that the HLURB
exercises regulatory authority over cases of swindling and fraudulent
manipulations

perpetrated

by

unscrupulous

subdivision

sellers

and

operators, such as failure to deliver titles to the buyers or titles free from
liens and encumbrances.1
Additionally, jurisdiction is determined by the allegations in the
complaint. Jurisdiction is the power or capacity given by the law to a court
or tribunal to entertain, hear and determine certain controversies.

Jurisdiction over the subject matter is conferred by law. But where the
actual issues are evident from the records of the case, then the jurisdiction
over the subject matter need not depend upon the literal assertions in the
complaint, but on the law as applied to established facts based on the
evidence that the parties presented in due course. 3 Since in this case, the
question on subdividing the land adverted to by respondent is within the
power of this Board to decide, it stands to reason that this Office is
empowered to exercise that authority.

Based on the records submitted to this Office by the parties, it

appears that the dispute between the parties herein involves the question of
whether or not there exists a buyer and subdivision seller or developer
relation on contract between the parties. In their Deed of Conditional Sale,
the parties agreed as follows:
1 Cadimas v Carrion, G.r. No. 180394, September 29, 2008, 567 SCRA 101,110.
2 People v Mariano, G.R. No. L-40527, June 30, 1976, 71 SCRA 600, 604
3 Allied Domecq Phil.,Inc. v Villon, 842 Phil. 894, 901 (2004), citing Leoquinco v Canada
Dry Bottling Co. of the Phil.,Inc. Employees Association, 147 Phil. 488, 502 (1971)
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xxx Whereas the VENDOR has agreed to sell in favor of the

VENDEE One Unit (1) parcel of land together more particularly
known as follows:

Xxx3. The Vendee/s shall manage and administer the

property subject to this Deed to all intents and purposes as if
he/she/they were owners thereof.. xxx

4. The Vendee/s shall not cut down, damage, injure or

remove any tree or shrub either ornamental; of fruit bearing
and already existing at the time of the occupancy not remove or
quarry any stone, rock, or earth within the lot described in this
Deed without obtaining the prior consent of the Vendor. The
construction of any perimeter fence in the premises shall be
limited to not more than three (3) feet high. xxx

5. The Vendee/s shall not make or permit any construction

to be made or to be done in the premises subject of this Deed
unless prior consent has been obtained from the Vendor. The
building plans of the additional construction to be made by the
Vendee/s in the premises shall be subject to prior written
approval of the Vendor. xxx

7. The Vendee/s shall join the Homeowners Association

which the Vendor is mandated to organizes under the rules and
supervision of the Securities and Exchange Commission xxx

This intent, amply articulated in its deed of conditional sale places its
action within the ambit of the HLURBs exclusive jurisdiction and outside
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the reach of the regular courts. Accordingly, complainants action to file her
complaint before the HLURB, the body with the proper jurisdiction is
proper. As to the issue of Securities and Exchange Commissions
jurisdiction over HOA, the same is not meritorious for it is now the Magna
Carta for Homeowners Association and IRR of R.A 9904. However, the
Deed of Conditional Sale express that there is a seller-buyer relationship.
Hence, HLURB has exclusive over this case.

This Court was equally explicit in Chua v. Ang, when it pronounced that:

xxx

The

law

recognized,

too,

that

subdivision

and

condominium

development involves public interest and welfare and should be brought to a

body, like the HLURB, that has technical expertise. In the exercise of its
powers, the HLURB, on the other hand, is empowered to interpret and apply
contracts, and determine the rights of private parties under these contracts.
This ancillary power, generally judicial, is now no longer with the regular
courts

to

the

extent

that

the

pertinent

HLURB

laws

provide.

Viewed from this perspective, the HLURBs jurisdiction over contractual

rights and obligations of parties under subdivision and condominium
contracts comes out very clearly.4
On the basis of the evidence submitted by the complainant, the
failure of the respondent Mt. Everest Properties Inc. to controvert the
material allegations in the Complaint, the issue of whether HLURB has
jurisdiction over this case has been settled in the affirmative. Evidently, the

4ROMULO R. PERALTA vs. HON. RAUL E. DE LEON, Presiding Judge, Regional Trial Court of Paraaque,
Branch 258, HON. ARBITER DUNSTAN SAN VICENTE, in his capacity as Housing and Land Use
Regulatory Arbiter and LUCAS ELOSO EJE, in his capacity as Sheriff, Regional Trial Court, Paraaque City
and CONCEPTS AND SYSTEM DEVELOPMENT INC., as represented by its CHAIRMAN KASUO NORO,
G.R. No. 187978, November 24, 2010. G.R. No. 187978

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paramount issue left for resolution boils down to whether or not entitled to
refund of the total amount paid over the subject property.

Considering the undisputed claim of full payment of the contract

price of the subject lot, its logical consequence should compel the
respondent to deliver the title as well as possession of the property to the
complainants.

It is settled that in a contract to sell, the seller's obligation to deliver

the corresponding certificate of title is simultaneous and reciprocal to the
buyer's full payment of the purchase price. In this relation, Section 25 of PD
957, which regulates the subject transaction, imposes on the subdivision
owner or developer the obligation to cause the transfer of the corresponding
certificate of title to the buyer upon full payment, to wit:
Sec. 25. Issuance of Title. The owner or developer shall
deliver the title of the lot or unit to the buyer upon full
payment of the lot or unit. No fee, except those required for
the registration of the deed of sale in the Registry of Deeds,
shall be collected for the issuance of such title. In the event a
mortgage over the lot or unit is outstanding at the time of the
issuance of the title to the buyer, the owner or developer shall
redeem the mortgage or the corresponding portion thereof
within six months from such issuance in order that the title
over any fully paid lot or unit may be secured and delivered to
the buyer in accordance herewith. (Emphasis supplied.)
In

the

present

case,

Mt.

Everests

obligation

to

execute

the

corresponding deed of sale and to deliver the transfer certificate of title and
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possession of the subject lot arose and thus became due and demandable at
the time complainant Adelfa J. Dacey had fully paid the purchase price for
the subject lot. Consequently, respondents failure to meet the said
obligation constituted a substantial breach of the contract which perforce
warranted its rescission
ART. 1191. The power to rescind obligations is implied in reciprocal
ones, in case one of the obligors should not comply with what is incumbent
upon him.
The injured party may choose between the fulfilment and the
rescission of the obligation, with the payment of damages in either case. He
may also seek rescission, even after he has chosen fulfilment, if the latter
should become impossible.
The court shall decree the rescission claimed, unless there be just
cause authorizing the fixing of a period. This is understood to be without
prejudice to the rights of third persons who have acquired the thing, in
accordance with articles 1385 and 1388 and the Mortgage Law.
In this light, it cannot be denied that only Mt. Everest benefited from
the contract, having received full payment of the contract price sometime in
2003 while Adelfa Dacey remained prejudiced by the persisting non-delivery
of the title despite full payment. As a necessary consequence, considering
the propriety of the rescission as earlier discussed, Adelfa Dacey must be
able to recover the total purchase price of the property plus interest
consistent with the intent of PD 957 to protect the buyer against
unscrupulous developers, operators and/or sellers who reneged on their
obligations.

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Considering respondents bad faith in dealing with the complainant,

we find respondents breach serious as to award complainant exemplary
damages in order to deter respondent and other project owners/developers
from further adopting the same unsound business practice to the prejudice
of their buyers, as well as attorneys fees.
WHEREFORE, premises considered, judgment is hereby rendered as
follows:

1. ORDERING respondent Mt. Everest Properties Inc. to register the Deed of

Conditional Sale covering Lot 24, Block 3, Phase I before the Office of
Registry of Deeds of Subic, Zambales within thirty (30) days from receipt of
this Decision;
2. ORDERING respondent Mt. Everest to execute a Deed of Sale and Deliver
title thereof to the complainant Adelfa J. Dacey. In the event respondent- Mt.
Everest Properties Inc. refuse to execute its obligation, it is likewise ordered
to promptly refund the full value of the payment made by the complainant
plus legal interest of 6% per annum reckoned from the date of the filing of
the complaint until fully paid;5

3. ORDERING respondent Mt. Everest to pay to this Board an administrative

fine of 10,000.00 for violating Section 25 of the Presidential Decree 957.

Let a copy of this decision be furnished to the Monitoring Unit of this

Office which is hereby ordered to conduct further investigation on the extent
of Mt. Everest Properties Inc. selling activities in St. Eugene Homes,
Calapan, Subic, Zambales project in violation of Section 25 of PD 957.
5 G.R. No. 145156-57, 29 July 2005, 465SCRA 137
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All other claims and counterclaims are hereby dismissed.

SO ORDERED.
City of San Fernando, Pampanga. ______________________.

ATTY. JOCELYN C. TALENS-SATUROS

Housing and Land Use Arbiter

Cc:
Atty. Carlos I. Castillo Jr.
Counsel for the complainant
#102 Baraca Subic, Zambales

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