SAGIP KALIKASAN VS.
JUDGE PADERANGA In the instant case, Edma did not resort to, or avail of, any
Facts: A team composed of representatives from the PNPRMG, DENR,
and the Philippine Coast Guard inspected the container vans of NMC
Container Lines, Inc. and discovered the undocumented forest
products.
Since no one has claimed to be the owner of these illegal forest
products, the Provincial Environment and Natural Resources Office
(PENRO) issued a seizure receipt to NMC Container Lines, Inc.
Thereafter, they are confiscated in favor of the government.
However, a certain Roger C. Edma (Edma) filed a complaint before
Judge Paderanga praying that a writ of replevin be issued ordering the
DENR, CENRO, Lt. Gen. Alfonso P. Dagudag (Gen. Dagudag), Head of
Task Force Sagip Kalikasan and others to deliver the forest products to
him. Judge Paderanga issued a writ of replevin.
A motion to dismiss was filed by the DENR, CENRO, and Gen. Dagudag
praying, among others, that Edma failed to exhaust administrative
remedies. Judge Paderanga denied the same.
Gen. Dagudag filed with the Office of the Court Administrator (OCA) an
affidavit-complaint charging Judge Paderanga with gross ignorance of
the law and conduct unbecoming a judge. Gen. Dagudag stated that
during the hearing, Judge Paderanga showed manifest partiality in
favor of Edma and that the DENR’s counsel was lambasted, cajoled and
intimidated by Judge Paderanga using words such as “SHUT UP” and
“THAT’S BALONEY.”
ISSUES:
1. Whether the replevin suit should be dismissed by Judge
Paderanga.
2. W/NJudge Paderanga is liable for gross ignorance of the law
and for conduct unbecoming a judge.
3. Whether Judge Paderanga is liable for conduct unbecoming
a judge.
RULING:
1. Judge Paderanga should have dismissed the replevin suit outright
for three reasons. First, under the doctrine of exhaustion of
administrative remedies, courts cannot take cognizance of cases
pending before administrative agencies. A party must exhaust all
administrative remedies before he can resort to the courts. In Paat v.
Court of Appeals(G.R. No. 111107, 10 January 1997), the Court held
that:
“This Court in a long line of cases has consistently held that before a
party is allowed to seek the intervention of the court, it is a pre-
condition that he should have availed of all the means of administrative
processes afforded him. Hence, if a remedy within the administrative
machinery can still be resorted to by giving the administrative officer
concerned every opportunity to decide on a matter that comes within
his jurisdiction then such remedy should be exhausted first before
court’s judicial power can be sought. The premature invocation of
court’s intervention is fatal to one’s cause of action. Accordingly,
absent any finding of waiver or estoppel the case is susceptible of
dismissal for lack of cause of action.”
administrative remedy. He went straight to court and filed a complaint
for replevin and damages. Section 8 of Presidential Decree No. 705, as
amended, states that (1) all actions and decisions of the Bureau of
Forest Development Director are subject to review by the DENR
Secretary; (2) the decisions of the DENR Secretary are appealable to the
President; and (3) courts cannot review the decisions of the DENR
Secretary except through a special civil action for certiorari or
prohibition.
Second, under the doctrine of primary jurisdiction, courts cannot take
cognizance of cases pending before administrative agencies of special
competence. In Tabao v. Judge Lilagan (416 Phil. 710), the Court held
that:
“Under the doctrine of primary jurisdiction, courts cannot take
cognizance of cases pending before administrative agencies of special
competence. x x x The prudent thing for respondent judge to have
done was to dismiss the replevin suit outright.”
Third, the forest products are already in custodia legis and thus cannot
be the subject of replevin. There was a violation of the Revised Forestry
Code and the DENR seized the forest products in accordance with law.
In Calub v. Court of Appeals, [387 Phil. 67, 79 (2000)] the Court held
that properties lawfully seized by the DENR cannot be the subject of
replevin.
2. Judge Paderanga’s acts of taking cognizance of the replevin suit and
of issuing the writ of replevin constitute gross ignorance of the law.
Canon 6 of the New Code of Judicial Conduct for the Philippine
Judiciary states that competence is a prerequisite to the due
performance of judicial office. Section 3 of Canon 6 states that judges
shall take reasonable steps to maintain and enhance their knowledge
necessary for the proper performance of judicial duties. Judges should
keep themselves abreast with legal developments and show
acquaintance with laws.
The rule that courts cannot prematurely take cognizance of cases
pending before administrative agencies is basic. There was no reason
for Judge Paderanga to make an exception to this rule. The forest
products were in the custody of the DENR and Edma had not availed of
any administrative remedy. Judge Paderanga should have dismissed
the replevin suit outright.
3. The OCA found Judge Paderanga liable for using inappropriate
language in court: “We x x x find respondent’s intemperate use of “Shut
up!” and “Baloney!” well nigh inappropriate in court proceedings. The
utterances are uncalled for.”
Indeed, the transcripts of stenographic notes show that Judge
Paderanga was impatient, discourteous, and undignified in court.
Section 6, Canon 6 of the New Code of Judicial Conduct for the
Philippine Judiciary states that judges shall be patient, dignified, and
courteous in relation to lawyers. Rule 3.04, Canon 3 of the Code of
Judicial Conduct states that judges should be patient and courteous to
lawyers, especially the inexperienced. They should avoid the attitude
that the litigants are made for the courts, instead of the courts for the
litigants.
Judge Paderanga’s refusal to consider the motion to quash the writ of
replevin, repeated interruption of the lawyers, and utterance of “shut
up,” “that’s baloney,” “how dare you say that the court is wrong,” “what
kind of a lawyer are you?,” and “the problem with you people is you do
not use your heads” are undignified and very unbecoming a judge.
The Fallo: He was dismissed from service.
The Court notes that this is Judge Paderanga’s third offense. In Office
of the Court Administrator v. Paderanga (See: Brief Case No. 2005-
0985), the Court held him liable for grave abuse of authority and
simple misconduct for unceremoniously citing a lawyer in contempt
while declaring himself as having “absolute power” and for repeatedly
telling a lawyer to “shut up.”
Also, in Beltran, Jr. v. Paderanga (See: Brief Case No. 2001-0064), the
Court held him liable for undue delay in rendering an order for the
delay of nine months in resolving an amended formal offer of exhibits.
In both cases, the Court sternly warned Judge Paderanga that the
commission of another offense shall be dealt with more severely. The
instant case and the two cases decided against him demonstrate Judge
Paderanga’s arrogance, incorrigibility, and unfitness to become a
judge.
————————————————-
THINGS DECIDED:
A) Under the Doctrine of exhaustion of administrative remedies,
before a party is allowed to seek the intervention of the court, it is a
pre-condition that he should have availed of all the means of
administrative processes afforded him.
B) Under the doctrine of primary jurisdiction, courts cannot take
cognizance of cases pending before administrative agencies of special
competence.
(C) In Calub v. Court of Appeals, [387 Phil. 67, 79 (2000)] the Court
held that properties lawfully seized by the DENR cannot be the subject
of replevin.
(D) Judges shall take reasonable steps to maintain and enhance their
knowledge necessary for the proper performance of judicial duties.
Judges should keep themselves abreast with legal developments and
show acquaintance with laws.
GO, SR. VS. RAMOS
FACTS:
These petitions stemmed from the complaint-affidavit for deportation
initiated by Luis T. Ramos before the Bureau of Immigration and
Deportation (now Bureau of Immigration) against Jimmy T. Go alleging
that the latter is an illegal and undesirable alien. Luis alleged that while
Jimmy represents himself as a Filipino citizen, Jimmy’s personal
circumstances and other records indicate that he is not so. To prove his
contention, Luis presented the birth certificate of Jimmy, issued by the
Office of the Civil Registrar of Iloilo City, which indicated Jimmy’s
citizenship as “FChinese.”
Luis argued that although it appears from Jimmy’s birth certificate that
his parents, Carlos and Rosario Tan, are Filipinos, the document seems
to be tampered, because only the citizenship of Carlos appears to be
handwritten while all the other entries were typewritten. He also
averred that in September 1989 or thereabout, Jimmy, through stealth,
machination and scheming managed to cover up his true citizenship,
and with the use of falsified documents and untruthful declarations,
was able to procure a Philippine passport from the Department of
Foreign Affairs.
ISSUE:
Can the bailbond cancellation be assailed via a petition for habeas
corpus?
RULING:
No. A petition for the issuance of a writ of habeas corpus is a special
proceeding governed by Rule 102 of the Revised Rules of Court. The
objective of the writ is to determine whether the confinement or
detention is valid or lawful. If it is, the writ cannot be issued.
Once a person detained is duly charged in court, he may no longer
question his detention through a petition for issuance of a writ of
habeas corpus. His remedy would be to quash the information and/or
the warrant of arrest duly issued. The writ of habeas corpus should not
be allowed after the party sought to be released had been charged
before any court. The term “court” in this context includes quasi-
judicial bodies of governmental agencies authorized to order the
person’s confinement, like the Deportation Board of the Bureau of
Immigration. Likewise, the cancellation of his bail cannot be assailed via
a petition for habeas corpus. When an alien is detained by the Bureau
of Immigration for deportation pursuant to an order of deportation by
the Deportation Board, the Regional Trial Courts have no power to
release such alien on bail even in habeas corpus proceedings because
there is no law authorizing it.
FELICITAS M. MACHADO and MARCELINO P. MACHADO,
Petitioners,
vs.
RICARDO L. GATDULA, COMMISSION ON THE SETTLEMENT OF
LAND PROBLEMS, and IRINEO S. PAZ, Sheriff IV, Office of the
Provincial Sheriff, San Pedro, Laguna, Respondents.
The dispute involves two adjoining parcels of land located in Barangay
San Vicente, San Pedro, Laguna, one belonging to the Machados, and
the other belonging to respondent Ricardo L. Gatdula (Gatdula).
On February 2, 1999, Gatdula wrote a letter4 to the COSLAP requesting
assistance because the Machados allegedly blocked the right of way to
his private property by constructing a two-door apartment on their
property.
Acting on Gatdula’s letter, the COSLAP conducted a mediation
conference on February 25, 1999; the parties then agreed to have a
verification survey conducted on their properties and to share the
attendant expenses. Thereafter, the COSLAP issued an Order dated
March 16, 1999 directing the Chief of the Survey Division of the
Community Environment and Natural Resources Office – Department
of Environment and Natural Resources (CENRO-DENR), to conduct a
verification survey on May 9, 1999. The order likewise stated that in the
event that no surveyor is available, the parties may use the services of a
private surveyor, whom the CENRO-DENR Survey Division would
deputize.
As scheduled, a private surveyor, Junior Geodetic Engineer Abet F.
Arellano (Engr. Arellano), conducted a verification survey of the
properties in the presence of both parties. Engr. Arellano submitted a
report to the COSLAP finding that the structure built by the Machados
encroached upon an alley found within the Gatdula property. Engr.
Arellano’s findings corroborated the separate report of Engineer Noel
V. Soqueco of the CENRO, Los Baños, Laguna that had also been
submitted to the COSLAP.
The Machados contested these reports in their position paper dated
August 26, 1999. They alleged that Gatdula had no right of action since
they did not violate Gatdula’s rights.5 They further assailed the
jurisdiction of the COSLAP, stating that the proper forum for the
present case was the Regional Trial Court of San Pedro, Laguna.
The COSLAP Ruling
On October 25, 1999, the COSLAP issued a resolution6 (October 25,
1999 COSLAP Resolution) directing the Machados to reopen the right
of way in favor of Gatdula. In so ruling, the COSLAP relied on the
verification survey made by Engr. Arellano, which established that the
Machados had encroached on the existing alley in Gatdula’s property.
The COSLAP declared the Machados estopped from questioning its
jurisdiction to decide the case, since they actively participated in the
mediation conferences and the verification surveys without raising any
jurisdictional objection. It ruled that its jurisdiction does not depend on
the convenience of the Machados.
The Machados filed a motion for reconsideration which the COSLAP
denied in a resolution dated January 24, 2000.
On February 18, 2000, the Machados filed a notice of appeal7 with the
Office of the President (OP).
While this appeal was pending, the COSLAP, upon Gatdula’s motion,
issued a writ of execution8 enforcing the terms of the October 25, 1999
COSLAP Resolution. The Machados opposed the writ by filing a motion
to quash on March 30, 2001.9 They argued that the October 25, 1999
COSLAP Resolution was not yet ripe for execution in view of the
pending appeal before the OP.
Since the Machados persistently refused to reopen the right of way
they closed, the provincial sheriff recommended to COSLAP the
issuance of a writ of demolition. The COSLAP issued the writ of
demolition10 on July 12, 2001.
The CA Ruling
On July 31, 2001, the Machados went to the CA for relief through a
Petition for Certiorari and Prohibition,11 claiming that the COSLAP
issued the writs of execution and demolition with grave abuse of
discretion.
The CA found the Machados’ claim unfounded and, accordingly,
dismissed their petition in its decision of January 31, 2002.12 It
declared that the COSLAP correctly issued the assailed writs because
the October 25, 1999 COSLAP Resolution had already become final and
executory for failure of the Machados to avail of the proper remedy
against the COSLAP orders and resolutions. Under Section 3 (2)13 of
Executive Order No. 561 (EO 561), the resolutions, orders, and
decisions of the COSLAP become final and executory 30 days after
promulgation, and are appealable by certiorari only to the Supreme
Court. In Sy v. Commission on the Settlement of Land Problems,14 it
was held that under the doctrine of judicial hierarchy, the orders,
resolutions and decisions of the COSLAP, as a quasi-judicial agency, are
directly appealable to the CA under Rule 43 of the 1997 Rules of Civil
Procedure, and not to the Supreme Court. Thus, the CA ruled that the
Machados’ appeal to the OP was not the proper remedy and did not
suspend the running of the period for finality of the October 25, 1999
COSLAP Resolution.
On the issue of jurisdiction, the CA found that the COSLAP was created
to provide a more effective mechanism for the expeditious settlement
of land problems, in general; the present case, therefore, falls within its
jurisdiction.15 Moreover, the Machados’ active participation in the
mediation conference and their consent to bring about the verification
survey bound them to the COSLAP’s decisions, orders and resolutions.
From this CA decision, the Machados filed a motion for
reconsideration,16 which the CA subsequently denied in its Resolution
of December 5, 2002.17
The Machados thus filed the present Rule 45 petition with this Court,
raising two vital issues:
1. Whether the COSLAP has jurisdiction over Gatdula’s complaint for
right of way against the Machados; and
2. Whether the COSLAP can validly issue the writs of execution and
demolition against the Machados.
THE COURT’S RULING
We find the petition meritorious.
The COSLAP does not have jurisdiction over the present case
In resolving the issue of whether the COSLAP has jurisdiction over the
present case, a review of the history of the COSLAP and an account of
the laws creating the COSLAP and its predecessor, the Presidential
Action Committee on Land Problems (PACLAP), is in order.
The COSLAP’s forerunner, the PACLAP, was created on July 31, 1970
pursuant to Executive Order No. 251. As originally conceived, the
committee was tasked to expedite and coordinate the investigation
and resolution of land disputes, streamline and shorten administrative
procedures, adopt bold and decisive measures to solve land problems,
and/or recommend other solutions.
On March 19, 1971, Executive Order No. 305 was issued reconstituting
the PACLAP. The committee was given exclusive jurisdiction over all
cases involving public lands and other lands of the public domain,18
and was likewise vested with adjudicatory powers phrased in broad
terms:
1. To investigate, coordinate, and resolve expeditiously land disputes,
streamline administrative proceedings, and, in general, to adopt bold
and decisive measures to solve problems involving public lands and
lands of the public domain.19 [emphasis supplied]
Thereafter, Presidential Decree No. 832 (PD 832)20 was issued on
November 27, 1975 reorganizing the PACLAP and enlarging its
functions and duties. The decree also granted PACLAP quasi-judicial
functions. Section 2 of PD 832 states:
Section 2. Functions and duties of the PACLAP. – The PACLAP shall
have the following functions and duties:
1. Direct and coordinate the activities, particularly the investigation
work, of the various government agencies and agencies involved in
land problems or disputes, and streamline administrative procedures to
relieve small settlers and landholders and members of cultural
minorities of the expense and time-consuming delay attendant to the
solution of such problems or disputes;
2. Refer for immediate action any land problem or dispute brought to
the attention of the PACLAP, to any member agency having jurisdiction
thereof: Provided, That when the Executive Committee decides to act
on a case, its resolution, order or decision thereon shall have the force
and effect of a regular administrative resolution, order or decision, and
shall be binding upon the parties therein involved and upon the
member agency having jurisdiction thereof;
xxxx
4. Evolve and implement a system of procedure for the speedy
investigation and resolution of land disputes or problems at provincial
level, if possible. [emphasis supplied]
The PACLAP was abolished by EO 561 effective on September 21, 1979,
and was replaced by the COSLAP. Unlike the former laws, EO 561
specifically enumerated the instances when the COSLAP can exercise its
adjudicatory functions:
Section 3. Powers and Functions. – The Commission shall have the
following powers and functions:
xxxx
2. Refer and follow up for immediate action by the agency having
appropriate jurisdiction any land problem or dispute referred to the
Commission: Provided, That the Commission may, in the following
cases, assume jurisdiction and resolve land problems or disputes which
are critical and explosive in nature considering, for instance, the large
number of the parties involved, the presence or emergence of social
tension or unrest, or other similar critical situations requiring
immediate action:
(a) Between occupants/squatters and pasture lease agreement holders
or timber concessionaires;
(b) Between occupants/squatters and government reservation
grantees;
(c) Between occupants/squatters and public land claimants or
applicants;
(d) Petitions for classification, release and/or subdivision of lands of the
public domain; and
(e) Other similar land problems of grave urgency and magnitude.
The Commission shall promulgate such rules and procedures as will
ensure expeditious resolution and action on the above cases. The
resolution, order or decision of the Commission on any of the
foregoing cases shall have the force and effect of a regular
administrative resolution, order or decision and shall be binding upon
the parties therein and upon the agency having jurisdiction over the
same. Said resolution, order or decision shall become final and
executory within thirty (30) days from its promulgation and shall be
appealable by certiorari only to the Supreme Court. [emphasis
supplied]
Under these terms, the COSLAP has two different rules in acting on a
land dispute or problem lodged before it, e.g., COSLAP can assume
jurisdiction only if the matter is one of those enumerated in paragraph
2(a) to (e) of the law. Otherwise, it should refer the case to the agency
having appropriate jurisdiction for settlement or resolution.21 In
resolving whether to assume jurisdiction over a case or to refer it to the
particular agency concerned, the COSLAP considers: (a) the nature or
classification of the land involved; (b) the parties to the case; (c) the
nature of the questions raised; and (d) the need for immediate and
urgent action thereon to prevent injury to persons and damage or
destruction to property. The terms of the law clearly do not vest on the
COSLAP the general power to assume jurisdiction over any land
dispute or problem.22 Thus, under EO 561, the instances when the
COSLAP may resolve land disputes are limited only to those involving
public lands or those covered by a specific license from the
government, such as pasture lease agreements, timber concessions, or
reservation grants.23
Undisputably, the properties involved in the present dispute are private
lands owned by private parties, none of whom is a squatter, a patent
lease agreement holder, a government reservation grantee, a public
land claimant or a member of any cultural minority.24
Moreover, the dispute between the parties can hardly be classified as
critical or explosive in nature that would generate social tension or
unrest, or a critical situation that would require immediate and urgent
action. The issues raised in the present case primarily involve the
application of the Civil Code provisions on Property and the Easement
of Right of Way. As held in Longino v. General,25 "disputes requiring
no special skill or technical expertise of an administrative body that
could be resolved by applying pertinent provisions of the Civil Code
are within the exclusive jurisdiction of the regular courts."
The Machados cannot invoke Section 3, paragraph 2(e) of EO 561,
which provides that the COSLAP may assume jurisdiction over
complaints involving "other similar land problems of grave urgency," to
justify the COSLAP’s intervention in this case. The statutory
construction principle of ejusdem generic prescribes that where
general words follow an enumeration of persons or things, by words of
a particular and specific meaning, such general words are not to be
construed in their widest extent but are to be held as applying only to
persons or things of the same kind as those specifically mentioned.26
A dispute between two parties concerning the right of way over private
lands cannot be characterized as similar to those enumerated under
Section 3, paragraph 2(a) to (d) of EO 561.1avvphi1
In Davao New Town Development Corporation v. Commission on the
Settlement of Land Problems27 – where we ruled that the COSLAP
does not have blanket authority to assume every matter referred to it –
we made it clear that its jurisdiction is confined only to disputes over
lands in which the government has a proprietary or regulatory interest.

The CA apparently misread and misapplied the Court’s ruling in Bañaga
v. Court of Appeals.28 Bañaga involved two contending parties who
filed free patent applications for a parcel of public land with the Bureau
of Lands. Because of the Bureau of Lands’ failure to act within a
reasonable time on the applications and to conduct an investigation,
the COSLAP decided to assume jurisdiction over the case. Since the
dispute involved a public land on a free patent issue, the COSLAP
undeniably had jurisdiction over the Bañaga case.
Jurisdiction is conferred by law and a judgment issued by a quasi-
judicial body without jurisdiction is void
By reason of the Machados’ active participation in the mediation
conferences and the COSLAP verification surveys, the CA declared the
Machados estopped from questioning the body’s jurisdiction and
bound by its decisions, orders and resolutions. We disagree with this
ruling.
Jurisdiction over a subject matter is conferred by law and not by the
parties’ action or conduct.29 Estoppel generally does not confer
jurisdiction over a cause of action to a tribunal where none, by law,
exists. In Lozon v. NLRC,30 we declared that:
Lack of jurisdiction over the subject matter of the suit is yet another
matter. Whenever it appears that the court has no jurisdiction over the
subject matter, the action shall be dismissed. This defense may be
interposed at any time, during appeal or even after final judgment.
Such is understandable, as this kind of jurisdiction is conferred by law
and not within the courts, let alone the parties, to themselves
determine or conveniently set aside. In People v. Casiano, this Court, on
the issue of estoppel, held:
The operation of the principle of estoppel on the question of
jurisdiction seemingly depends upon whether the lower court actually
had jurisdiction or not. If it had no jurisdiction, but the case was tried
and decided upon the theory that it had jurisdiction, the parties are not
barred, on appeal, from assailing such jurisdiction, for the same ‘must
exist as a matter of law, and may not be conferred by consent of the
parties or by estoppel’ However if the lower court had jurisdiction, and
the case was heard and decided upon a given theory, such, for
instance, as that the court had no jurisdiction, the party who induced it
to adopt such theory will not be permitted, on appeal, to assume an
inconsistent position – that the lower court had jurisdiction. Here, the
principle of estoppel applies. The rule that jurisdiction in conferred by
law, and does not depend upon the will of the parties, has no bearing
thereon. [emphasis supplied]
In this case, the COSLAP did not have jurisdiction over the subject
matter of the complaint filed by Gatdula, yet it proceeded to assume
jurisdiction over the case and even issued writs of execution and
demolition against the Machados. The lack of jurisdiction cannot be
cured by the parties’ participation in the proceedings before the
COSLAP.31 Under the circumstances, the Machados can rightfully
question its jurisdiction at anytime, even during appeal or after final
judgment. A judgment issued by a quasi-judicial body without
jurisdiction is void.32 It cannot be the source of any right or create any
obligation. All acts pursuant to it and all claims emanating from it have
no legal effect. The void judgment can never become final and any writ
of execution based on it is likewise void.33
WHEREFORE, premises considered, we GRANT the petition for review
on certiorari. The assailed Court of Appeals decision dated January 31,
2002 and resolution dated December 5, 2002 in CA-G.R. SP No. 65871
are REVERSED and SET ASIDE. The Decision of the Commission on the
Settlement of Land Problems dated October 25, 1999 in COSLAP Case
No. 99-59, as well as the writ of execution dated March 21, 2001 and
the writ of demolition dated July 12, 2001, are declared NULL and VOID
for having been issued without jurisdiction.
UST, et. al vs. Danes B. Sanchez
G.R. No. 165569, July 29, 2010
A Complaint for Damages filed by respondent Danes B. Sanchez
(respondent) against the University of Santo Tomas (UST) and its Board
of Directors, the Dean and the Assistant Dean of the UST College of
Nursing, and the University Registrar for their alleged unjustified
refusal to release the respondents Transcript of Records (ToR).
In his Complaint, respondent alleged that he graduated from UST on
April 2, 2002 with a Bachelors Degree of Science in Nursing. He was
included in the list of candidates for graduation and attended
graduation ceremonies. Respondent sought to secure a copy of his ToR
with the UST Registrars Office, paid the required fees, but was only
given a Certificate of Graduation by the Registrar. Despite repeated
attempts by the respondent to secure a copy of his ToR, and
submission of his class cards as proof of his enrolment, UST refused to
release his records, making it impossible for him to take the nursing
board examinations, and depriving him of the opportunity to make a
living. The respondent prayed that the RTC order UST to release his
ToR and hold UST liable for actual, moral, and exemplary damages,
attorneys fees, and the costs of suit.
Petitioners filed a Motion to Dismiss where they claimed that they
refused to release respondents ToR because he was not a registered
student, since he had not been enrolled in the university for the last
three semesters. They claimed that the respondents graduation,
attendance in classes, and taking/passing of examinations were
immaterial because he ceased to be a student when he failed to enroll
during the second semester of school year 2000-2001.
Petitioners then filed a Supplement to their Motion to Dismiss, alleging
that respondent sought administrative recourse before the Commission
on Higher Education (CHED) through a letter-complaint. Petitioners
claimed that the CHED had primary jurisdiction to resolve matters
pertaining to school controversies.
Issues:
1) The CHED exercises quasi-judicial power over controversies
involving school matters and has primary jurisdiction over respondents
demand for the release of his ToR. Thus, respondent failed to exhaust
administrative remedies;
2) Since respondent sought recourse with both the CHED and
the RTC, respondent violated the rule against forum-shopping; and
3) The Complaint failed to state a cause of action, since
respondent admitted that he was not enrolled in UST in the last three
semesters prior to graduation.
Held:
1. 1. The doctrine of exhaustion of administrative remedies requires
that where a remedy before an administrative agency is provided, the
administrative agency concerned must be given the opportunity to
decide a matter within its jurisdiction before an action is brought
before the courts. Failure to exhaust administrative remedies is a
ground for dismissal of the action.
In this case, the doctrine does not apply because petitioners failed to
demonstrate that recourse to the CHED is mandatory or even possible
in an action such as that brought by the respondent, which is
essentially one for mandamus and damages. The doctrine of
exhaustion of administrative remedies admits of numerous exceptions,
one of which is where the issues are purely legal and well within the
jurisdiction of the trial court, as in the present case. Petitioners liability
if any for damages will have to be decided by the courts, since any
judgment inevitably calls for the application and the interpretation of
the Civil Code. As such, exhaustion of administrative remedies may be
dispensed with. The Supreme Court held in Regino v. Pangasinan
Colleges of Science and Technology
x x x exhaustion of administrative remedies is applicable when there is
competence on the part of the administrative body to act upon the
matter complained of .Administrative agencies are not courts; x x x
neither [are they] part of the judicial system, [or] deemed judicial
tribunals. Specifically, the CHED does not have the power to award
damages. Hence, petitioner could not have commenced her case
before the Commission.
In addition, the rule on primary jurisdiction applies only where the
administrative agency exercises quasi-judicial or adjudicatory functions.
Thus, an essential requisite for this doctrine to apply is the actual
existence of quasi-judicial power. However, petitioners have not shown
that the CHED possesses any such power to investigate facts or
ascertain the existence of facts, hold hearings, weigh evidence, and
draw conclusions. Indeed, Section 8 of Republic Act No. 7722 otherwise
known as the Higher Education Act of 1994, certainly does not contain
any express grant to the CHED of judicial or quasi-judicial power.
2. 2. Forum shopping exists when, as a result of an adverse opinion
in one forum, a party seeks a favorable opinion (other than by appeal
or certiorari) in another, or when he institutes two or more actions or
proceedings grounded on the same cause, on the gamble that one or
the other court would make a favorable disposition. Here, there can be
no forum shopping precisely because the CHED is without quasi-
judicial power, and cannot make any disposition of the case whether
favorable or otherwise.
3.3. Under Rule 16, Section 1(g) of the Rules of Court, a motion to
dismiss may be made on the ground that the pleading asserting the
claim states no cause of action. To clarify the essential test required to
sustain dismissal on this ground, we have explained that the test of the
sufficiency of the facts found in a petition, to constitute a cause of
action, is whether admitting the facts alleged, the court could render a
valid judgment upon the same in accordance with the prayer of the
petition. Stated otherwise, a complaint is said to assert a sufficient
cause of action if, admitting what appears solely on its face to be
correct, the plaintiff would be entitled to the relief prayed for.
The Complaint makes the following essential allegations: that
petitioners unjustifiably refused to release respondents ToR despite his
having obtained a degree from UST; that petitioners claim that
respondent was not officially enrolled is untrue; that as a result of
petitioners unlawful actions, respondent has not been able to take the
nursing board exams since 2002; that petitioners actions violated
Articles 19-21 of the Civil Code; and that petitioners should be ordered
to release respondents ToR and held liable for P400,000.00 as moral
damages,P50,000.00 as exemplary damages, P50,000.00 as attorneys
fees and costs of suit, and P15,000.00 as actual damages. Clearly,
assuming that the facts alleged in the Complaint are true, the RTC
would be able to render a valid judgment in accordance with the
prayer in the Complaint.
C.T. TORRES ENTERPRISES, INC., petitioner,
vs.
HON. ROMEO J. HIBIONADA, EFREN DIONGON, and
PLEASANTVILLE DEVELOPMENT CORPORATION, respondents.
The same issue of jurisdiction that was raised in Solid Homes v.
Payawal 1 is raised in the case at bar. The same ruling laid down in that
earlier case must be applied in the present controversy.
The petitioner as agent of private respondent Pleasantville
Development Corporation sold a subdivision lot on installment to
private respondent Efren Diongon. The installment payments having
been completed, Diongon demanded the delivery of the certificate of
title to the subject land. When neither the petitioner nor Pleasantville
complied, he filed a complaint against them for specific performance
and damages in the Regional Trial Court of Negros Occidental. This
was docketed as Civil Case No. 3514. The two defendants each filed an
answer with cross-claim and counterclaim. The plaintiff filed a reply and
answered the counterclaims. Pre-trial was scheduled and heard and
trial briefs were submitted by Pleasantville and Diongon. The case was
set for initial hearing. It was then that C.T. Torres Enterprises filed a
motion to dismiss for lack of jurisdiction, contending that the
competent body to hear and decide the case was the Housing and
Land Use Regulatory Board. The motion was heard and Diongon later
filed an opposition. On September 17, 1987, the trial court 2 denied the
motion to dismiss in an order reading as follows:
Before this Court for resolution is the Motion to Dismiss filed by
defendant C.T. Torres Enterprises, Inc. alleging among other things,
that this Court has no jurisdiction over the subject matter considering
that the present action falls within the jurisdiction of the Housing and
Land Use Regulatory Board by virtue of Executive Order No. 90 dated
December 17, 1986.
Plaintiff filed an opposition to the said motion to dismiss traversing the
allegations therein stated. A perusal of both pleadings and the
complaint filed by plaintiff, the issue to be determined are basically
governed by the provisions of the New Civil Code, particularly on
contracts. The complaint is one for specific performance with damages
which is a justiciable issue under the Civil Code and jurisdiction to hear
the said issue is conferred on the regular Courts pursuant to Batas
Pambansa Blg. 129.
It is, therefore, the finding of this Court that jurisdiction as conferred by
law is vested in the regular courts and not in the Housing and Land Use
Regulatory Board. The Motion to Dismiss is, therefore, DENIED for lack
of merit.
SO ORDERED.
The petitioner is now before this Court on certiorari to question this
order.
In holding that the complaint for specific performance with damages
was justiciable under the Civil Code and so came under the jurisdiction
of the regular courts under B.P. 129, the trial court failed to consider
the express provisions of P.D. No. 1344 and related decrees. It also
erred in supposing that only the regular courts can interpret and apply
the provisions of the Civil Code, to the exclusion of the quasi-judicial
bodies.
P.D. No. 957, promulgated July 12, 1976 and otherwise known as "The
Subdivision and Condominium Buyers' Protective Decree," provides
that the National Housing Authority shall have exclusive authority to
regulate the real estate trade and business.
The scope of the regulatory authority lodged in the National Housing
Authority is indicated in the second and third paragraphs of the
preamble, thus:
WHEREAS, the numerous reports reveal that many real estate
subdivision owners, developers, operators, and/or sellers have reneged
on their representations and obligations to provide and maintain
properly subdivision roads, drainage, sewerage, water systems, lighting
systems and other similar basic requirements, thus endangering the
health and safety of home and lot buyers;
WHEREAS, reports of alarming magnitude also show cases of swindling
and fraudulent manipulations perpetrated by unscrupulous subdivision
and condominium sellers and operators, such as failure to deliver titles
to the buyers or titles free from hens and encumbrances, and to pay
real estate taxes and fraudulent sales of the same subdivision lots to
different innocent purchasers for value. (Emphasis supplied)
P.D. No. 1344, which was promulgated April 2, 1978, and empowered
the National Housing Authority to issue writs of execution in the
enforcement of its decisions under P.D. No. 957, specified the quasi-
judicial jurisdiction of the agency as follows:
SECTION 1. In the exercise of its functions to regulate the real estate
trade and business and in addition to its powers provided for in
Presidential Decree No. 957, the National Housing Authority shall have
exclusive jurisdiction to hear and decide cases of the following nature:
A. Unsound real estate business practices;
B. Claims involving refund and any other claims filed by subdivision lot
or condominium unit buyer against the project owner developer,
dealer, broker or salesman; and
C. Cases involving specific performance of contractual and statutory
obligations filed by buyers of subdivision lots or condominium units
against the owner, developer, dealer, broker or salesman. (Emphasis
supplied)
Under E.O. No. 648 dated February 7, 1981, the regulatory functions
conferred on the National Housing Authority under P.D. Nos. 957,1344
and other related laws were transferred to the Human Settlements
Regulatory Commission, which was renamed Housing and Land Use
Regulatory Board by E.O. No. 90 dated December 17, 1986.
It is clear from Section 1(c) of the above quoted PD No. 1344 that the
complaint for specific performance with damages filed by Diongon
with the Regional Trial Court of Negros Occidental comes under the
jurisdiction of the Housing and Land Use Regulatory Board. Diongon is
a buyer of a subdivision lot seeking specific performance of the seller's
obligation to deliver to him the corresponding certificate of title.
The argument that only courts of justice can adjudicate claims
resoluble under the provisions of the Civil Code is out of step with the
fast-changing times. There are hundreds of administrative bodies now
performing this function by virtue of a valid authorization from the
legislature. This quasi-judicial function, as it is called, is exercised by
them as an incident of the principal power entrusted to them of
regulating certain activities falling under their particular expertise.
In the Solid Homes case, for example, the Court affirmed the
competence of the Housing and Land Use Regulatory Board to award
damages although this is an essentially judicial power exercisable
ordinarily only by the courts of justice. This departure from the
traditional allocation of governmental powers is justified by
expediency, or the need of the government to respond swiftly and
competently to the pressing problems of the modem world.
Thus we have held:
It is by now commonplace learning that many administrative agencies
exercise and perform adjudicatory powers and functions, though to a
limited extent only. Limited delegation of judicial or quasi-judicial
authority to administrative agencies (e.g. the Securities and Exchange
Commission and the National Labor Relations Commission) is well
recognized in our jurisdiction, basically because the need for special
competence and experience has been recognized as essential in the
resolution of questions of complex or specialized character and
because of a companion recognition that the dockets of our regular
courts have remained crowded and clogged. 3
xxx xxx xxx
As a result of the growing complexity of the modern society, it has
become necessary to create more and more administrative bodies to
help in the regulation of its ramified activities. Specialized in the
particular fields assigned to them, they can deal with the problems
thereof with more expertise and dispatch than can be expected from
the legislature or the courts of justice. This is the reason for the
increasing vesture of quasi-legislative and quasi-judicial powers in what
is now not unquestionably called the fourth department of the
government. 4
xxx xxx xxx
There is no question that a statute may vest exclusive original
jurisdiction in an administrative agency over certain disputes and
controversies falling within the agency's special expertise. The very
definition of an administrative agency includes its being vested with
quasi-judicial powers. The ever increasing variety of powers and
functions given to administrative agencies recognizes the need for the
active intervention of administrative agencies in matters calling for
technical knowledge and speed in countless controversies which
cannot possibly be handled by regular courts. 5
The argument of the private respondents that the petition is premature
because no motion for reconsideration of the questioned order of trial
court had been filed stresses the rule but disregards the exception. It is
settled that the motion for reconsideration may be dispensed with if
the issue raised is a question of law, 6 as in the case at bar. The issue
pleaded here is lack of jurisdiction. It could therefore be raised directly
and immediately with this Court without the necessity of an antecedent
motion for reconsideration.
We hold, in sum, that the complaint for specific performance and
damages was improperly filed with the respondent court, jurisdiction
over the case being exclusively vested in the Housing and Land Use
Regulatory Board. We also hold that the order denying the motion to
dismiss was subject to immediate challenge before this Court as the
filing (and denial) of a motion for reconsideration was not an
indispensable requirement.
WHEREFORE, the petition is GRANTED. The questioned Order of
September 17, 1987, is SET ASIDE and Civil Case No. 3514 in the
Regional Trial Court of Negros Occidental is hereby DISMISSED,
without prejudice to the filing of the proper complaint with the
Housing and Land Use Regulatory Board if so desired. No costs.
HLC CONSTRUCTION v. EMILY HOMES SUBDIVISION
HOMEOWNERS ASSOCIATION
Assailed in the instant petition for certiorari under Rule 65[1] of the
Rules of Court is the March 15, 1999 order[2] of the Regional Trial
Court of Davao del Sur, Branch 19, denying the motion to dismiss of
petitioners HLC Construction and Development Corporation and Henry
Lopez Chua, on the ground of lack of jurisdiction and a defective
certification against non-forum shopping.
Respondents Emily Homes Subdivision Homeowners Association
(EHSHA) and the 150 individual members thereof filed on October 21,
1998 a civil action for breach of contract, damages and attorney's fees
with the Regional Trial Court of Davao del Sur, Branch 19, against
petitioners, the developers of low-cost housing units like Emily Homes
Subdivision. Respondents alleged that petitioners used substandard
materials in the construction of their houses, like coco lumber and
termite-infested door jambs. Petitioners furthermore allegedly did not
adhere to the house plan specifications because the ceiling lines were
sagging and there were "deviations from the plumb line of the
mullions, door jams (sic) and concrete columns."[3] Respondents asked
petitioners to repair their defective housing units but petitioners failed
to do so. Respondents had to repair their defective housing units using
their own funds. Hence, they prayed for actual and moral damages
arising from petitioners' breach of the contract plus exemplary
damages and attorney's fees.
On December 11, 1998, petitioners filed a motion to dismiss the
complaint, claiming that it was the Housing and Land Use Regulatory
Board (HLURB) and not the trial court which had jurisdiction over the
case. They also cited the defective certification on non-forum
shopping which was signed only by the president of EHSHA and not by
all its members; such defect allegedly warranted the dismissal of the
complaint. The trial court denied petitioners' motion to dismiss on the
ground that the case fell within its jurisdiction, not with the HLURB, and
that respondents' certificate of non-forum shopping substantially
complied with Rule 7, Section 5 of the 1997 Rules of Civil Procedure. It
also denied petitioners' motion for reconsideration.
Aggrieved, petitioners filed the instant petition for certiorari, alleging
that the trial court committed grave abuse of discretion amounting to
lack or in excess of jurisdiction in holding (1) that the case between
petitioners and respondents fell within the jurisdiction of the civil
courts and (2) that respondents had substantially complied with the
rules on forum shopping despite the fact that only one of the 150
respondents had signed the certificate therefor.
Petitioners are correct that the case between them and respondents
fell within the jurisdiction of the HLURB, not the trial court. However,
we cannot sustain petitioners' contention that respondents' certificate
of non-forum shopping was defective, thus allegedly warranting the
outright dismissal thereof by the trial court.
The general rule is that the certificate of non-forum shopping must be
signed by all the plaintiffs in a case and the signature of only one of
them is insufficient.[4] However, the Court has also stressed that the
rules on forum shopping were designed to promote and facilitate the
orderly administration of justice and thus should not be interpreted
with such absolute literalness as to subvert its own ultimate and
legitimate objective.[5] The strict compliance with the provisions
regarding the certificate of non-forum shopping merely underscores its
mandatory nature in that the certification cannot be altogether
dispensed with or its requirements completely disregarded. It does not
thereby prohibit substantial compliance with its provisions under
justifiable circumstances.[6]
Thus in the recent case of Cavile, et al. vs. Heirs of Clarita Cavile, et al.,
[7]we ruled:
[T]he execution by Thomas George Cavile, Sr., in behalf of all the other
petitioners of the certificate of non-forum shopping constitute
substantial compliance with the Rules. All the petitioners, being
relatives and co-owners of the properties in dispute, share a common
interest thereon. They also share a common defense in the complaint
for partition filed by respondents. Thus, when they filed the instant
petition, they filed it as a collective, raising only one argument to
defend their rights over the properties in question. There is sufficient
basis, therefore, for Thomas George Cavile, Sr. to speak for and in
behalf of his co-petitioners that they have not filed any action or claim
involving the same issues in another court or tribunal, nor is there
other pending action or claim in another court or tribunal involving the
same issues. Moreover, it has been held that the merits of the
substantive aspects of the case may be deemed as "special
circumstances" for the Court to take cognizance of a petition for review
although the certification against forum shopping was executed and
signed by only one of the petitioners.
The above ruling is squarely applicable to the present case.
Respondents (who were plaintiffs in the trial court) filed the complaint
against petitioners as a group, represented by their homeowners'
association president who was likewise one of the plaintiffs, Mr.
Samaon M. Buat. Respondents raised one cause of action which was
the breach of contractual obligations and payment of damages. They
shared a common interest in the subject matter of the case, being the
aggrieved residents of the poorly constructed and developed Emily
Homes Subdivision. Due to the collective nature of the case, there was
no doubt that Mr. Samaon M. Buat could validly sign the certificate of
non-forum shopping in behalf of all his co-plaintiffs. In cases therefore
where it is highly impractical to require all the plaintiffs to sign the
certificate of non-forum shopping, it is sufficient, in order not to defeat
the ends of justice, for one of plaintiffs, acting as representative, to sign
the certificate provided that, as in Cavile et al., the plaintiffs share a
common interest in the subject matter of the case or filed the case as a
"collective," raising only one common cause of action or defense.
In any case, even if it was correct for the trial court to rule that
respondents had substantially complied with the rules on forum
shopping and thus, their complaint before it should not be dismissed,
we find that the trial court should have nonetheless dismissed the
complaint for a more important reason it had no jurisdiction over it. It
is the HLURB, not the trial court, which had jurisdiction over
respondents' complaint. The HLURB[8] is the government agency
empowered to regulate the real estate trade and business, having
exclusive jurisdiction to hear and decide cases involving:
(a)
unsound real estate business practices;
(b)
claims involving refunds and any other claims filed by subdivision lot or
condominium unit buyers against the project owner, developer, dealer,
broker or salesman;
(c)
and cases involving specific performance of contractual and statutory
obligations filed by buyers of subdivision lots or condominium units
against the owner, developer, dealer, broker or salesman.[9]
In this case, respondents' complaint was for the reimbursement of
expenses incurred in repairing their defective housing units
constructed by petitioners. Clearly, the HLURB had jurisdiction to hear
it. In the case of Arranza vs. B.F Homes, Inc.,[10] this Court ruled that:
xxx the HLURB has jurisdiction over complaints arising from contracts
between the subdivision developer and the lot buyer or those aimed at
compelling the subdivision developer to comply with its contractual
and statutory obligations to make the subdivision a better place to live
in.[11]
The fact that the subject matter of the complaint involved defective
housing units did not remove the complaint from the HLURB's
jurisdiction. The delivery of habitable houses was petitioners'
responsibility under their contract with respondents. The trial court
should have granted the motion to dismiss filed by petitioners so that
the issues therein could be expeditiously heard and resolved by the
HLURB.
WHEREFORE, the petition is hereby GRANTED. The March 15, 1999
order of the Regional Trial Court of Davao del Sur, Branch 19, denying
the petitioners' motion to dismiss, is ANNULLED and Civil Case No.
3731 before it (trial court) is hereby DISMISSED for lack of jurisdiction.
This is without prejudice to the re-filing of the respondents' complaint
in the HLURB.
SPS. LEONARDO AND MILAGROS CHUA v. JACINTO G. ANG
Before us is the petition for certiorari[1] filed by the spouses Leonardo
and Milagros Chua (petitioners) to assail the Resolution dated
November 4, 2002 of the City Prosecutor of Pasig in I.S. No. PSG 02-02-
09150. The City Prosecutor's Resolution dismissed the complaint filed
by the petitioners against Ferdinand T. Santos, Robert John L.
Sobrepeña, Noel M. Cariño, Roberto S. Roco, Alice Odchique-Bondoc,
Romulo T. Santos and Enrique A. Sobrepeña, Jr. (private respondents)
for violation of Presidential Decree (P.D.) No. 957, otherwise known as
"The Subdivision and Condominium Buyers Protective Decree."
FACTUAL BACKGROUND
The antecedent facts, drawn from the records, are briefly summarized
below.
On February 11, 1999, the petitioners (as buyers) and Fil-Estate
Properties, Inc. (FEPI, as developers) executed a Contract To Sell[2] a
condominium unit. Despite the lapse of three (3) years, FEPI failed to
construct and deliver the contracted condominium unit to the
petitioners.
As a result, the petitioners filed on September 3, 2002 a Complaint-
Affidavit[3] before the Office of the City Prosecutor of Pasig City
accusing the private respondents, as officers and directors of FEPI, of
violating P.D. No. 957, specifically its Sections 17 and 20, in relation
with Section 39.[4] These provisions state:
Sec. 17. Registration. - All contracts to sell, deeds of sale and other
similar instruments relative to the sale or conveyance of the subdivision
lots and condominium units, whether or not the purchase price is paid
in full, shall be registered by the seller in the Office of the Register of
Deeds of the province or city where the property is situated.
xxx
Sec. 20. Time of Completion. - Every owner or developer shall construct
and provide the facilities, improvements, infrastructures and other
forms of development, including water supply and lighting facilities,
which are offered and indicated in the approved subdivision or
condominium plans, brochures, prospectus, printed matters, letters or
in any form of advertisement, within one year from the date of the
issuance of the license for the subdivision or condominium project or
such other period of time as may be fixed by the Authority.
xxx
Sec. 39. Penalties. - Any person who shall violate any of the provisions
of this Decree and/or any rule or regulation that may be issued
pursuant to this Decree shall, upon conviction, be punished by a fine of
not more than twenty thousand (P20,000.00) pesos and/or
imprisonment of not more than ten years: Provided, That in the case of
corporations, partnership, cooperatives, or associations, the President,
Manager or Administrator or the person who has charge of the
administration of the business shall be criminally responsible for any
violation of this Decree and/or the rules and regulations promulgated
pursuant thereto. [Emphasis supplied]
The petitioners alleged that the private respondents did not construct
and failed to deliver the contracted condominium unit to them and did
not register the Contract to Sell with the Register of Deeds.
Of the seven (7) private respondents, only private respondent Alice
Odchique-Bondoc filed a Counter-Affidavit.[5] She countered that the
City Prosecutor has no jurisdiction over the case since it falls under the
exclusive jurisdiction of the Housing and Land Use Regulatory Board
(HLURB).
On November 4, 2002, Assistant City Prosecutor Dennis R. Pastrana and
Pasig City Prosecutor Jacinto G. Ang (public respondents), respectively
issued and approved the Resolution[6] dismissing the complaint for
being premature. The Resolution held that it is the HLURB that has
exclusive jurisdiction over cases involving real estate business and
practices.
THE PETITION and THE PARTIES' POSITIONS
On December 12, 2002, the petitioners filed the present petition[7]
anchored on the following ground:
PUBLIC RESPONDENTS COMMITTED MANIFEST ERROR AND GRAVE
ABUSE OF DISCRETION AMOUNTING TO LACK AND/OR EXCESS OF
JURISDICTION, WHEN IT DISMISSED PETITIONER'S COMPLAINANT (sic)
ON THE GROUND THAT THE HLURB, NOT THEIR OFFICE HAS
JURISDICTION TO CONDUCT PRELIMINARY INVESTIGATION AND FILE
THE CORRESPONDING INFORMATION IN COURT FOR CRIMINAL
VIOLATIONS OF P.D. No. 957.[8]
The petitioners argue that jurisdiction to entertain criminal complaints
is lodged with the city prosecutor and that the jurisdiction of the
HLURB under P.D. No. 957 is limited to the enforcement of contractual
rights, not the investigation of criminal complaints.
In their Comment,[9] the private respondents submit that the petition
should be dismissed outright because the petitioners failed to avail of
other remedies provided by law, such as (a) the filing of a motion for
reconsideration with the City Prosecutor of Pasig City, (b) the filing of a
petition for review with the Secretary of the Department of Justice
(DOJ), (c) the filing of a motion for reconsideration of any judgment
rendered by the DOJ, or (d) the filing of an appeal or a petition for
certiorari with the Court of Appeals (CA); that even if certiorari is a
proper remedy, the petition was filed in violation of the hierarchy of
courts; and that even on the merits, the petition must fail since the
public respondents correctly dismissed the complaint as a reasonable
interpretation of P.D. No. 957 which requires a prior determination by
the HLURB that a corporation violated P.D. No. 957 before criminal
charges may be filed against its corporate officers.
In their Reply, the petitioners reiterate that the public respondents
abdicated their authority to conduct a preliminary investigation and to
indict the private respondents for criminal violations of P.D. No. 957
when they dismissed the criminal complaint for being premature.[10]
OUR RULING
We find the petition meritorious.
At the outset, we note that the petitioners indeed filed the present
petition for certiorari without prior recourse to other available remedies
provided by law and the observance of the judicial hierarchy of courts.
Nonetheless, the rules on prior recourse to these available remedies
are not without exceptions, nor is the observance of the judicial
hierarchy of courts an inflexible rule; the peculiarity, uniqueness and
unusual character of the factual and circumstantial settings of a case
may allow the flexible application of these established legal principles
to achieve fair and speedy dispensation of justice.
A prior motion for reconsideration is unnecessary: (a) where the order
is a patent nullity, as where the court a quo has no jurisdiction; (b)
where the questions raised in the certiorari proceedings have been
duly raised and passed upon by the lower court, or are the same as
those raised and passed upon in the lower court; (c) where there is an
urgent necessity for the resolution of the question and any further
delay would prejudice the interests of the Government or of the
petitioner; (d) where, under the circumstances, a motion for
reconsideration would be useless; (e) where petitioner was deprived of
due process and there is an extreme urgency for relief; (f) where, in a
criminal case, relief from an order of arrest is urgent and the grant of
such relief by the trial court is improbable; (g) where the proceedings in
the lower court are a nullity for lack of due process; (h) where the
proceedings were ex parte or in which the petitioner had no
opportunity to object; or (i) where the issue raised is one purely of law
or where public interest is involved.[11]
On the other hand, prior exhaustion of administrative remedies may be
dispensed with and judicial action may be validly resorted to
immediately: (a) when there is a violation of due process; (b) when the
issue involved is purely a legal question; (c) when the administrative
action is patently illegal amounting to lack or excess of jurisdiction; (d)
when there is estoppel on the part of the administrative agency
concerned; (e) when there is irreparable injury; (f) when the respondent
is a department secretary whose acts as an alter ego of the President
bear the implied and assumed approval of the latter; (g) when to
require exhaustion of administrative remedies would be unreasonable;
(h) when it would amount to a nullification of a claim; (i) when the
subject matter is a private land in land case proceedings; (j) when the
rule does not provide a plain, speedy and adequate remedy; or (k)
when there are circumstances indicating the urgency of judicial
intervention.[12]
On the non-observance of the principle of hierarchy of courts, it must
be remembered that this rule generally applies to cases involving
conflicting factual allegations. Cases which depend on disputed facts
for decision cannot be brought immediately before us as we are not
triers of facts.[13] A strict application of this rule may be excused when
the reason behind the rule is not present in a case, as in the present
case, where the issues are not factual but purely legal. In these types of
questions, this Court has the ultimate say so that we merely abbreviate
the review process if we, because of the unique circumstances of a
case, choose to hear and decide the legal issues outright.[14]
In the present petition for certiorari, we find that there are four (4)
compelling reasons to allow the petitioners' invocation of our
jurisdiction in the first instance, even without prior recourse to a
motion for reconsideration or to the exhaustion of administrative
remedies, and even in disregard of the principle of hierarchy of courts.
First, the petitioners raise a pure question of law involving jurisdiction
over criminal complaints for violation of P.D. No. 957. A question of law
exists when the doubt or controversy concerns the correct application
of law or jurisprudence to a certain set of facts; or when the issue does
not call for an examination of the probative value of the evidence
presented, the truth or falsehood of facts being admitted.[15] As noted
earlier, this Court is the undisputed final arbiter of all questions of law.
Second, the present case requires prompt action because public
interest and welfare are involved in subdivision and condominium
development, as the terms of P.D. Nos. 957 and 1344 expressly reflect.
[16] Questions of conflicting processes, essentially based on
jurisdiction, will consistently recur as people's need for housing (and
hence, subdivisions and condominiums) escalate. Shelter is a basic
human need whose fulfillment cannot afford any kind of delay.[17]
Third, considering that this case has been pending for nearly seven (7)
years (since the filing of the Complaint-Affidavit on September 3, 2002)
to the prejudice not only of the parties involved, but also of the
subdivision and condominium regulatory system and its need for the
prompt determination of controversies, the interests of justice now
demand the direct resolution of the jurisdictional issue this proceeding
poses. As mentioned, at stake in this case is shelter - a basic human
need and to remand the case to the DOJ for a determination of the
merits of the parties' jurisdictional tug-of-war would not serve any
purpose other than to further delay its resolution.[18] Thus, the
practicality of the situation and the need for the speedy administration
of justice justify a departure from the strict application of procedural
rules. Besides, the issue before us presents no special difficulty, and we
feel it should be decided now, without going through the procedural
formalities that shall anyway end up with this Court.
Fourth, the petition is meritorious. The public respondents committed
grave abuse of discretion in dismissing the criminal complaints for
violation of P.D. No. 957 on the ground that jurisdiction lies with the
HLURB.
Generally, the extent to which an administrative agency may exercise
its powers depends largely, if not wholly, on the provisions of the
statute creating and defining the terms of the agency's mandate. P.D.
No. 1344 clarifies and spells out the quasi-judicial dimensions of the
grant of jurisdiction to the HLURB in the following specific terms:[19]
SEC. 1. In the exercise of its functions to regulate the real estate trade
and business and in addition to its powers provided for in Presidential
Decree No. 957, the National Housing Authority shall have exclusive
jurisdiction to hear and decide cases of the following nature:
A. Unsound real estate business practices;
B. Claims involving refund and any other claims filed by subdivision lot
or condominium unit buyer against the project owner, developer,
dealer, broker or salesman; and
C. Cases involving specific performance of contractual and statutory
obligations filed by buyers of subdivision lots or condominium units
against the owner, developer, dealer, broker or salesman.
The extent of its quasi-judicial authority, on the other hand, is defined
by the terms of P.D. No. 957 whose Section 3 provides:
x x x National Housing Authority [now HLURB]. - The National Housing
Authority shall have exclusive jurisdiction to regulate the real estate
trade and business in accordance with the provisions of this Decree.
The provisions of P.D No. 957 were intended to encompass all
questions regarding subdivisions and condominiums. The intention
was to provide for an appropriate government agency, the HLURB, to
which all parties - buyers and sellers of subdivision and condominium
units - may seek remedial recourse. 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.[20] 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.[21]
Viewed from this perspective, the HLURB's jurisdiction over contractual
rights and obligations of parties under subdivision and condominium
contracts comes out very clearly. But hand in hand with this definition
and grant of authority is the provision on criminal penalties for
violations of the Decree, provided under the Decree's Section 39,
heretofore quoted. Significantly, nothing in P.D. No. 957 vests the
HLURB with jurisdiction to impose the Section 39 criminal penalties.
What the Decree provides is the authority of the HLURB to impose
administrative fines under Section 38, as implemented by the Rules
Implementing the Subdivision and Condominium Buyer's Protective
Decree. This Section of the Decree provides:
Sec. 38. Administrative Fines. - The Authority may prescribe and impose
fines not exceeding ten thousand pesos for violations of the provisions
of this Decree or of any rule or regulation thereunder. Fines shall be
payable to the Authority and enforceable through writs of execution in
accordance with the provisions of the Rules of Court.
The Implementing Rules, for their part, clarify that "The implementation
and payment of administrative fines shall not preclude criminal
prosecution of the offender under Section 39 of the Decree." Thus, the
implementing rules themselves expressly acknowledge that two
separate remedies with differing consequences may be sought under
the Decree, specifically, the administrative remedy and criminal
prosecution.
Unless the contrary appears under other provisions of law (and in this
case no such provision applies), the determination of the criminal
liability lies within the realm of criminal procedure as embodied in the
Rules of Court. Section 2, Rule 112 of these Rules provide that the
prerogative to determine the existence or non-existence of probable
cause lies with the persons duly authorized by law; as provided in this
Rule, they are (a) Provincial or City Prosecutors and their assistants; (b)
Judges of the Municipal Trial Courts and Municipal Circuit Trial Courts;
(c) National and Regional State Prosecutors; and (d) other officers as
may be authorized by law.
In the present case, the petitioners have expressly chosen to pursue the
criminal prosecution as their remedy but the prosecutor dismissed their
complaint. The prosecutor's dismissal for prematurity was apparently
on the view that an administrative finding of violation must first be
obtained before recourse can be made to criminal prosecution. This
view is not without its model in other laws; one such law is in the
prosecution of unfair labor practice under the Labor Code where no
criminal prosecution for unfair labor practice can be instituted without
a final judgment in a previous administrative proceeding.[22] The need
for a final administrative determination in unfair labor practice cases,
however, is a matter expressly required by law. Where the law is silent
on this matter, as in this case, the fundamental principle - that
administrative cases are independent from criminal actions[23] - fully
applies, subject only to the rules on forum shopping under Section 5,
Rule 7 of the Rules of Court.[24] In the present case, forum shopping is
not even a matter for consideration since the petitioners have chosen
to pursue only one remedy - criminal prosecution. Thus, we see no bar
to their immediate recourse to criminal prosecution by filing the
appropriate complaint before the prosecutor's office.
In light of these legal realities, we hold that the public respondent
prosecutors should have made a determination of probable cause in
the complaint before them, instead of simply dismissing it for
prematurity. Their failure to do so and the dismissal they ordered
effectively constituted an evasion of a positive duty and a virtual refusal
to perform a duty enjoined by law; they acted on the case in a manner
outside the contemplation of law. This is grave abuse of discretion
amounting to a lack of or in excess of jurisdiction warranting a reversal
of the assailed resolution.[25] In the concrete context of this case, the
public prosecutors effectively shied away from their duty to prosecute,
a criminal violation of P.D. No. 957 as mandated by Section 5, Rule 110
of the Rules of Court and Republic Act No. 5180,[26] as amended,[27]
otherwise known as the Law on Uniform Procedure of Preliminary
Investigation.
As a final word, we stress that the immediate recourse to this Court
that this Decision allows should not serve as a precedent in other cases
where the prosecutor dismisses a criminal complaint, whether under
P.D. No. 957 or any other law. Recourse to (a) the filing a motion for
reconsideration with the City or Provincial Prosecutor, (b) the filing a
petition for review with the Secretary of the DOJ, (c) the filing a motion
for reconsideration of any judgment rendered by the DOJ, and (d)
intermediate recourse to the CA, are remedies that the dictates of
orderly procedure and the hierarchy of authorities cannot dispense
with. Only the extremely peculiar circumstances of the present case
compelled us to rule as we did; thus our ruling in this regard is a rare
one that should be considered pro hac vice.
WHEREFORE, we hereby GRANT the petition and accordingly REVERSE
and SET ASIDE the Resolution dated November 4, 2002 of the City
Prosecutor of Pasig in I.S. No. PSG 02-02-09150. The complaint is
hereby ordered returned to the Office of the City Prosecutor of Pasig
City for the determination of probable cause and the filing of the
necessary information, if warranted. No costs.
Home Bankers Savings and Trust Company v. CA
Facts:
Victor Tancuan issued Petitioner Home Bankers Savings and Trust
Company a check while Eugene Arriesgado issued Private Respondent
Far East Bank and Trust Company three checks; both checks totaling
the amount of P25,250,000.00. Tancuan and Arriesgado exchanged
each other’s checks and deposited them with their respective banks for
collection. When FEBTC presented Tancuan’s HBSTC check for clearing,
it was dishonored for being DAIF. Meanwhile, HBSTC sent Arriesgado’s
3 FEBTC checks through the Philippine Clearing House Corporation
(PCHC) to FEBTC but was returned for being DAIF. HBSTC receive the
notice of dishonor but refused to accept the checks and returned them
to FEBTC through the PCHC for the reason “Beyond Reglementary
Period,” implying that HBSTC already treated the 3 checks as cleared
and allowed the proceeds thereof to be withdrawn. FEBTC demanded
reimbursement for the returned checks and inquired from HBSTC
whether it had permitted any withdrawal of funds against the
unfunded checks. HBSTC, however refused to make any reimbursement
and to provide FEBTC with the needed information. Thus, FEBTC
submitted the dispute for arbitration before the PCHC Arbitration
Committee, under its Supplementary Rules on Regional Clearing to
which FEBTC and HBSTC are bound as participants in the regional
clearing operations administered by the PCHC. While the arbitration
proceeding was still pending, FEBTC filed an action for sum of money
and damages with preliminary attachment against HBSTC. HBSTC
moved to dismiss on the ground that there is no cause of action and
because it seeks to enforce an arbitral award which as yet does not
exist. The trial court denied the motion to dismiss and the motion for
reconsideration. Petitioner then filed a petition for certiorari with
respondent CA to which it had dismissed.
Issue:
Whether or not private respondent which commenced an arbitration
proceeding under the auspices of the PCHC may subsequently file a
separate case in court over the same subject matter despite the
pendency of that arbitration, simply to obtain the provisional remedy
of attachment against the adverse party in the arbitration proceeding.
Ruling:
We find no merit in the petition. Section 14 of Republic Act 876,
otherwise known as the Arbitration Law, allows any party to the
arbitration proceeding to petition the court to take measures to
safeguard and/or conserve any matter which is the subject of the
dispute in arbitration.
Petitioner’s exposition of the foregoing provision deserves scant
consideration. Section 14 simply grants an arbitrator the power to issue
subpoena and subpoena duces tecum at any time before rendering the
award. The exercise of such power is without prejudice to the right of a
party to file a petition in court to safeguard any matter which is the
subject of the dispute in arbitration. In the case at bar, private
respondent filed an action for a sum of money with prayer for a writ of
preliminary attachment. Undoubtedly, such action involved the same
subject matter as that in arbitration, i.e., the sum of P25,200,000.00
which was allegedly deprived from private respondent in what is
known in banking as a “kiting scheme.” However, the civil action was
not a simple case of a money claim since private respondent has
included a prayer for a writ of preliminary attachment, which is
sanctioned by section 14 of the Arbitration Law.
Simply put, participants in the regional clearing operations of the
Philippine Clearing House Corporation cannot bypass the arbitration
process laid out by the body and seek relief directly from the courts. In
the case at bar, undeniably, private respondent has initiated arbitration
proceedings as required by the PCHC rules and regulations, and
pending arbitration has sought relief from the trial court for measures
to safeguard and/or conserve the subject of the dispute under
arbitration, as sanctioned by section 14 of the Arbitration Law, and
otherwise not shown to be contrary to the PCHC rules and regulations.
At this point, we emphasize that arbitration, as an alternative method
of dispute resolution, is encouraged by this Court. Aside from
unclogging judicial dockets, it also hastens solutions especially of
commercial disputes. The Court looks with favor upon such amicable
arrangement and will only interfere with great reluctance to anticipate
or nullify the action of the arbitrator. Wherefore, premises considered,
the petition is hereby dismissed and the decision of the court a quo is
affirmed.
MARJORIE B. CADIMAS, by her Attorney-In-Fact, VENANCIO Z.
ROSALES,
vs.
MARITES CARRION and GEMMA HUGO, Respondents.
This is a petition for review on certiorari1 under Rule 45 of the 1997
Rules of Civil Procedure, assailing the Decision2 and Resolution3 of the
Court of Appeals in CA-G.R. SP No. 98572. The appellate court set aside
two orders4 of the Regional Trial Court (RTC), Branch 85, Quezon City
issued in Civil Case No. Q-04-53581 on the ground that the trial court
had no jurisdiction over the case.
The instant petition stemmed from the complaint5 for accion
reivindicatoria and damages filed by petitioner Marjorie B. Cadimas,
through her attorney-in-fact, Venancio Z. Rosales, against respondents
Marites Carrion and Gemma Hugo. The complaint was docketed as
Civil Case No. Q-04-53581 and raffled to Branch 85 of the RTC of
Quezon City.
In the complaint, petitioner averred that she and respondent Carrion
were parties to a Contract To Sell dated 4 August 2003, wherein
petitioner sold to respondent Carrion a town house located at Lot 4-F-
1-12 No. 23 Aster Street, West Fairview Park Subdivision, Quezon City
for the sum of P330,000.00 to be paid in installments. According to
petitioner, Carrion had violated paragraph 8 of said contract when she
transferred ownership of the property to respondent Hugo under the
guise of a special power of attorney, which authorized the latter to
manage and administer the property for and in behalf of respondent
Carrion. Allegedly, petitioner asked respondent Carrion in writing to
explain the alleged violation but the latter ignored petitioner’s letter,
prompting petitioner to demand in writing that Carrion and Hugo
vacate the property and to cancel the contract.6
On 28 October 2004, petitioner filed a Motion To Declare Defendant
Marites Carrion In Default,7 alleging that despite the service of
summons and a copy of the complaint, respondent Carrion failed to file
a responsive pleading within the reglementary period.
Respondent Hugo filed a Motion To Dismiss8 on her behalf and on
behalf of respondent Carrion on 18 November 2004, citing the grounds
of lack of jurisdiction to hear the case on the part of the RTC and
estoppel and/or laches on the part of petitioner. Respondent Hugo
argued that the Housing and Land Use Regulatory Board (HLURB) has
jurisdiction over the complaint because ultimately, the sole issue to be
resolved was whether petitioner, as the owner and developer of the
subdivision on which the subject property stood, was guilty of
committing unsound real estate business practices.
In the same motion, respondent Hugo averred that the RTC had not
acquired jurisdiction over the person of respondent Carrion for not
complying with Section 16, Rule 14 of the Rules of Court on the proper
service of summons on a non-resident defendant. However, attached
to the motion was a special power of attorney, whereby respondent
Carrion had authorized respondent Hugo, among others, to manage
and administer the subject property and to prosecute and defend all
suits to protect her rights and interest in said property.9
After petitioner filed a comment on the motion to dismiss, the RTC
issued an Omnibus Order10 on 21 March 2005, which denied the
motion to dismiss. The RTC held that the court’s jurisdiction is not
determined by the defenses set up in the answer or the motion to
dismiss.
In the same omnibus order, the RTC ruled that summons was served
properly, thus, the court had acquired jurisdiction over respondent
Carrion. The RTC noted that respondent Hugo’s failure to disclose at
the outset that she was equipped with a special power of attorney was
an act constitutive of misleading the court. Thus, the RTC declared
respondent Carrion in default, directed petitioner to present evidence
ex-parte against respondent Carrion, and respondent Hugo to file an
answer.
On 18 April 2005, respondent Hugo filed an answer on her behalf and
as the attorney-in-fact of respondent Carrion.11 The answer pleaded a
compulsory counterclaim for damages. The following day, petitioner
presented evidence ex-parte against respondent Carrion. Thus, on 22
April 2005, respondent Hugo sought a reconsideration of the omnibus
order, praying for the dismissal of the complaint, the cancellation of
the presentation of evidence ex-parte, the lifting of the order of default
against respondent Carrion and the issuance of an order directing the
extraterritorial service of summons on respondent Carrion.12
On 17 January 2007, the RTC issued an order, upholding its jurisdiction
over petitioner’s complaint. Citing the interest of substantial justice, the
RTC lifted the order of default against respondent Carrion and set the
pre-trial conference of the case.13
However, respondents elevated the matter to the Court of Appeals via
a special civil action for certiorari, praying that the Omnibus Order
dated 21 March 2005 and Order dated 17 January 2007 issued by
Judge Teodoro T. Riel be reversed and set aside and that the complaint
in Civil Case No. Q-04-53581 be dismissed for lack of jurisdiction.
On 27 September 2007, the Court of Appeals rendered the assailed
Decision granting respondents’ petition for certiorari. The appellate
court set aside the assailed orders of the RTC and ordered the dismissal
of petitioner’s complaint for lack of jurisdiction. In its Resolution dated
9 November 2007, the Court of Appeals denied petitioner’s motion for
reconsideration.
Hence, the instant petition, raising the following arguments: (1) based
on the allegations in the complaint, the RTC has jurisdiction over Civil
Case No. Q-04-53581; (2) in any case, respondents have expressly
submitted to or recognized the jurisdiction of the RTC by filing an
answer with counterclaim; and (3) respondents erroneously availed of a
Rule 65 petition instead of filing a timely appeal from the order
denying their motion to dismiss.14
Essentially, petitioner argues that based on the allegations in the
complaint and the reliefs sought, the RTC has jurisdiction over the
matter. In any case, the compulsory counterclaim pleaded in the
answer of respondents was an express recognition on their part of the
jurisdiction of the RTC over the complaint for accion reivindicatoria,
petitioner adds.
The petition is meritorious.
The nature of an action and the jurisdiction of a tribunal are
determined by the material allegations of the complaint and the law at
the time the action was commenced. Jurisdiction of the tribunal over
the subject matter or nature of an action is conferred only by law and
not by the consent or waiver upon a court which, otherwise, would
have no jurisdiction over the subject matter or nature of an action.15
An examination of Section 1 of Presidential Decree (P.D.) No. 1344,16
which enumerates the regulatory functions of the HLURB,17
readily shows that its quasi-judicial function is limited to hearing only
the following specific cases:
SECTION 1. In the exercise of its functions to regulate the real estate
trade and business and in addition to its powers provided for in
Presidential Decree No. 957, the National Housing Authority shall have
exclusive jurisdiction to hear and decide cases of the following nature:
A. Unsound real estate business practices;
B. Claims involving refund and any other claims filed by subdivision lot
or condominium unit buyer against the project owner, developer,
dealer, broker, or salesman; and
C. Cases involving specific performance of contractual and statutory
obligations filed by buyers of subdivision lot or condominium unit
against the owner, developer, dealer or salesman.
The aforequoted provision must be read in the light of the statute’s
preamble or the introductory or preparatory clause that explains the
reasons for its enactment or the contextual basis for its interpretation.
The scope of the regulatory authority thus lodged in the National
Housing Authority (NHA) [now HLURB] is indicated in the second and
third preambular paragraphs of the statute which provide:
"WHEREAS, numerous reports reveal that many real estate subdivision
owners, developers, operators, and/or sellers have reneged on their
representations and obligations to provide and maintain properly
subdivision roads, drainage, sewerage, water systems, lighting systems
and other similar basic requirements, thus endangering the health and
safety of home and lot buyers;
WHEREAS, reports of alarming magnitude also show cases of swindling
and fraudulent manipulations perpetrated by unscrupulous subdivision
and condominium sellers and operators, such as failure to deliver titles
to the buyers or titles free from liens and encumbrances, and to pay
real estate taxes, and fraudulent sales of the same subdivision lots to
different innocent purchasers for value ."18
The boom in the real estate business all over the country resulted in
more litigation between subdivision owners/developers and lot buyers
with the issue of the jurisdiction of the NHA or the HLURB over such
controversies as against that of regular courts. In the cases that
reached this Court, the ruling has consistently been that the NHA or
the HLURB has jurisdiction over complaints arising from contracts
between the subdivision developer and the lot buyer or those aimed at
compelling the subdivision developer to comply with its contractual
and statutory obligations to make the subdivision a better place to live
in.19
We agree with the ruling of the RTC that it has jurisdiction over the
case based on the allegations of the complaint. Nothing in the
complaint or in the contract to sell suggests that petitioner is the
proper party to invoke the jurisdiction of the HLURB. There is nothing
in the allegations in the complaint or in the terms and conditions of the
contract to sell that would suggest that the nature of the controversy
calls for the application of either P.D. No. 957 or P.D. No. 1344 insofar
as the extent of the powers and duties of the HLURB is concerned.
Note particularly paragraphs (b) and (c) of Sec. 1, P.D. No. 1344 as
worded, where the HLURB’s jurisdiction concerns cases commenced by
subdivision lot or condominium unit buyers. As to paragraph (a),
concerning "unsound real estate practices," the logical complainants
would be the buyers and customers against the sellers (subdivision
owners and developers or condominium builders and realtors), and not
vice versa.20
The complaint does not allege that petitioner is a subdivision lot buyer.
The contract to sell does not contain clauses which would indicate that
petitioner has obligations in the capacity of a subdivision lot developer,
owner or broker or salesman or a person engaged in real estate
business. From the face of the complaint and the contract to sell,
petitioner is an ordinary seller of an interest in the subject property
who is seeking redress for the alleged violation of the terms of the
contract to sell. Petitioner’s complaint alleged that a contract to sell
over a townhouse was entered into by and between petitioner and
respondent Carrion and that the latter breached the contract when
Carrion transferred the same to respondent Hugo without petitioner’s
consent.21 Thus, petitioner sought
the cancellation of the contract and the recovery of possession and
ownership of the town house. Clearly, the complaint is well within the
jurisdiction of the RTC.
In Javellana v. Hon. Presiding Judge, RTC, Branch 30, Manila,22 the
Court affirmed the jurisdiction of the RTC over the complaint for accion
publiciana and sum of money on the ground that the complaint did
not allege that the subject lot was part of a subdivision project but that
the sale was an ordinary sale on an installment basis. Even the mere
assertion that the defendant is a subdivision developer or that the
subject lot is a subdivision lot does not automatically vest jurisdiction
on the HLURB. On its face, the complaint must sufficiently describe the
lot as a subdivision lot and sold by the defendant in his capacity as a
subdivision developer to fall within the purview of P.D. No. 957 and
P.D. No. 1344 and thus within the exclusive jurisdiction of the
HLURB.23
In their comment, respondents cite Antipolo Realty Corp. v. National
Housing Authority,24 to bolster the argument that the HLURB has
jurisdiction over controversies involving the determination of the rights
of the parties under a contract to sell a subdivision lot. Antipolo Realty
is not squarely applicable to the instant controversy. The issue in said
case called for the determination of whether the developer complied
with its obligations to complete certain specified improvements in the
subdivision within the specified period of time, a case that clearly falls
under Section 1, paragraph (c) of P.D. No. 1344.
In the instances where the jurisdiction of the HLURB was upheld, the
allegations in the complaint clearly showed that the case involved the
determination of the rights and obligations of the parties in a sale of
real estate under P.D. No. 957,25 or the complaint for specific
performance sought to compel the subdivision developer to comply
with its undertaking under the contract to sell,26 or the claim by the
subdivision developer would have been properly pleaded as a
counterclaim in the HLURB case filed by the buyer against the
developer to avoid splitting causes of action.27
The statement in Suntay v. Gocolay28 to the effect that P.D. No. 957
encompasses all questions regarding subdivisions and condominiums,
which was cited by the Court of Appeals in the assailed decision, is a
mere obiter dictum. As a matter of fact, the Court in Suntay nullified
the orders issued by the HLURB over the action for the annulment of
an auction sale, cancellation of notice of levy and damages on the
ground of lack of jurisdiction. P.D. No. 957 and P.D. No. 1344 were not
the applicable laws because the action was brought against a
condominium buyer and not against the developer, seller, or broker
contemplated under P.D. No. 1344. The action likewise involved the
determination of ownership over the disputed condominium unit,
which by its nature does not fall under the classes of disputes
cognizable by the HLURB under Section 1 of P.D. No. 1344.
The Court of Appeals held that the provision in the contract to sell
mandating membership of the buyer of the housing unit in a housing
corporation was a strong indication that the property purchased by
respondent Carrion from petitioner was part of a tract of land
subdivided primarily for residential purposes. Thus, the appellate court
concluded that the HLURB has jurisdiction over the controversy
because the property subject thereof was part of a subdivision project.
Not every controversy involving a subdivision or condominium unit
falls under the competence of the HLURB29 in the same way that the
mere allegation of relationship between the parties, i.e., that of being
subdivision owner/developer and subdivision lot buyer, does not
automatically vest jurisdiction in the HLURB. For an action to fall within
the exclusive jurisdiction of the HLURB, the decisive element is the
nature of the action as enumerated in Section 1 of P.D. No. 1344.30
Notably, in Spouses Dela Cruz v. Court of Appeals,31 the Court upheld
the jurisdiction of the RTC over the complaint for cancellation of the
contract to sell of a subdivision house and lot because the case did not
fall under any of the cases mentioned in Section 1, P.D. No. 1344. In
interpreting said provision, the Court explained, thus:
On this matter, we have consistently held that the concerned
administrative agency, the National Housing Authority (NHA) before
and now the HLURB, has jurisdiction over complaints aimed at
compelling the subdivision developer to comply with its contractual
and statutory obligations.
For their part, respondents claim that the resolution of the case
ultimately calls for the interpretation of the contract to sell and the
determination of whether petitioner is guilty of committing unsound
real estate business practices, thus, the proper forum to hear and
decide the matter is the HLURB. The argument does not impress.
It is an elementary rule of procedural law that jurisdiction of the court
over the subject matter is determined by the allegations of the
complaint irrespective of whether or not the plaintiff is entitled to
recover upon all or some of the claims asserted therein. As a necessary
consequence, the jurisdiction of the court cannot be made to depend
upon the defenses set up in the answer or upon the motion to dismiss,
for otherwise, the question of jurisdiction would almost entirely
depend upon the defendant. What determines the jurisdiction of the
court is the nature of the action pleaded as appearing from the
allegations in the complaint. The averments in the complaint and the
character of the relief sought are the matters to be consulted.32 Thus,
the allegations in respondents’ motion to dismiss on the unsound real
estate business practices allegedly committed by petitioner, even if
proved to be true, cannot serve to oust the RTC of its jurisdiction over
actions for breach of contract and damages which has been conferred
to it by law.
WHEREFORE, the instant petition for review on certiorari is GRANTED
and the Decision dated 27 September 2007 and Resolution dated 9
November 2007 of the Court of Appeals in CA-G.R. SP No. 98572 are
REVERSED and SET ASIDE. The orders dated 21 March 2005 and 17
January 2007 of the Regional Trial Court, Branch 85, Quezon City in
Civil Case No. Q-04-53581 are REINSTATED. The Regional Trial Court is
ORDERED to resume the proceedings in and decide Civil Case No. Q-
04-53581 with deliberate speed. Costs against respondents.
ARRANZA VS. BF HOMES
FACTS: Respondent BF Homes, Inc (BFHI) , is a domestic corporation
engaged in developing subdivision and selling residential lots. One of
the subdivisions that respondent developed was the BF Homes
Paranaque Subdivision. With the withdrawal of substantial investments
in BFHI , respondent filed with the SEC a petition for rehabilitation. Atty
Florencio Orendain was appointed as receiver. He was later relieved by
the SEC of his duties as a Receiver. The new Board of Receivers revoked
the authority given by Orendain to use the open spaces at Concha Cruz
Drive and to collect community assessment funds; deferred the
purchase of new pumps ; recognized BF Paranaque Homeowners
Association (BFPHAI) as the representative of all homeowners; took
over the management of the Clubhouse and deployed its own guards.
Petitioners filed with the HLURB a class suit “for and in behalf of the
more than 7,000 homeowners” against respondent BFHI et al to
enforce the rights of purchasers of lots in BF Homes Paranaque 3.
Respondents asserts that the SEC, not the HLURB, has jurisdiction
arguing that the SEC, being the appointing authority should be the one
to take cognizance of controversies arising from the performance of
the receiver’s duties.
ISSUE: Does HLURB has jurisdiction over petitioner’s complaint for
specific performance to enforce their rights as purchasers of
subdivision lots ?
HELD: Yes. Petitioner’s complaint for specific performance to enforce
their rights as purchasers of subdivision lots as regards right of way,
water, open spaces, road and perimeter wall repairs, and security falls
within the jurisdiction of HLURB, not SEC. What petitioners seek to
enforce are respondent’s obligations as a subdivision developer.
Petitioners do not aim to enforce a pecuniary demand. The claim for
respondent should be viewed in the light of respondent’s failure its
statutory and contractual obligations to provide petitioners a “decent
human settlement” and “ample opportunities for improving the quality
of their life. The HLURB, not the SEC, is equipped with the expertise to
deal with that matter. The HLURB should view the issue of whether the
Board of Receivers correctly revoked the agreements entered into
between the previous receiver and the petitioners from the perspective
of the homeowners’ interest which PD 957 (The Subdivision and
Condominium Buyers’ Protective Decree) aims to protect.
MARINA PROPERTIES CORPORATION, petitioner,
vs.
COURT OF APPEALS and H.L. CARLOS CONSTRUCTION, INC.,
respondents.
H.L. CARLOS CONSTRUCTION, INC., petitioner,
vs.
COURT OF APPEALS and MARINA PROPERTIES CORPORATION,
respondents.
We resolve here two (2) separate appeals from the decision1 of the
Court of Appeals of 27 June 1996 in CA-G.R. SP No. 37927, which
affirmed with modification the 15 March 1995 Order2 of the Office of
the President in O.P. Case No. 5462 which, in turn, affirmed in toto the
14 June 1993 decisions 3 of the Housing and Land Use Regulatory
Board (HLURB) in the case filed by H.L. Carlos Construction, Inc.
(hereafter H.L. CARLOS) against MARINA Properties Corporation
(hereafter MARINA) for Specific Performance with Damages and
docketed as REM-A-1179.4
The factual antecedents, as summarized by the Court of Appeals, are as
follows:
Petitioner Marina Properties Corporation (MARINA for short) is a
domestic corporation engaged in the business of real estate
development. Among its projects is a condominium complex project,
known as the "MARINA BAYHOMES CONDOMINIUM PROJECT"
consisting of 10 building clusters with 31 housing units to be built on a
parcel of land at Asiaworld City, Coastal Road in Parañaque, Metro
Manila. The area is covered by T.C.T. No. (121211) 42201 of the Registry
of Deeds of the same municipality.
The construction of the project commenced sometime in 1988, with
respondent H.L. Carlos Construction, Inc. (H.L. CARLOS for brevity) as
the principal contractor, particularly of Phase III.
As an incentive to complete the construction of Phase III, MARINA
allowed H.L. CARLOS to purchase a condominium unit therein known
as Unit B-121. Thus, on October 9, 1988, the parties entered into a
Contract to Purchase and to Sell covering Unit B-121 for P3,614,000.00.
H.L. CARLOS paid P1,034,200.00 as downpayment, P50,000.00 as cash
deposit and P67,024.22 equivalent to 13 monthly amortizations.
After paying P1,810,330.70, which was more than half of the contract
price, H.L. CARLOS demanded for the delivery of the unit, but MARINA
refused. This prompted H.L. CARLOS to file with the Regional Trial
Court of Makati, Branch 61 a complaint for damages against MARINA,
docketed as Civil Case No. 89-5870.
Meanwhile, on April 20, 1990, MARINA wrote H.L. CARLOS that it was
exercising its option under their Contract to Purchase and to Sell to
take over the completion of the project due to its (H.L. CARLOS')
abandonment of the construction of the Phase III project.
In a letter dated March 15, 1991, H.L. CARLOS inquired from MARINA
about the "turn-over status" of the condominium unit. MARINA replied
that it was cancelling the Contract to Purchase and Sell due to H.L.
CARLOS' abandonment of the construction of the Phase III Project and
its filing of baseless and harassment suits against MARINA and its
officers.
Forthwith, H.L. CARLOS filed the instant complaint for specific
performance with damages against MARINA with the Housing and
Land Use Regulatory Board (HLURB), alleging among others, that it has
substantially complied with the terms and conditions of the Contract to
Purchase and Sell, having paid more than 50% of the contract price of
the condominium unit; and that MARINA's act of cancelling the
contract was done with malice and bad faith. H.L. CARLOS prays that
MARINA be ordered to deliver to it the subject unit, accept the
monthly amortizations on the remaining balance, execute the final
deed of sale and deliver the title of the unit upon full payment of the
contract price. Also, H.L. CARLOS prays for the award of actual and
exemplary damages as well as attorney's fees.
In its answer, MARINA claimed that its cancellation of the Contract to
Purchase and Sell is justified since H.L. CARLOS has failed to pay its
monthly installment since October 1989 or for a period of almost two
(2) years; that H.L. CARLOS abandoned its work on the project as of
December 1989; and that the instant case should have been suspended
in view of the pendency of Civil Case No. 89-5870 for damages in the
Makati RTC involving the same issues.
On February 21, 1992, the HLURB, through Atty. Abraham N.
Vermudez, Arbiter, rendered a decision; the dispositive portion of
which reads:
WHEREFORE, PREMISES CONSIDERED, judgment is hereby rendered
declaring the cancellation of the subject Contract to Sell as null and
void and ordering respondent Marina Properties Corporation as
follows:
1. To turn over the subject condominium unit to herein complainant,
accept monthly amortization[s] on the remaining balance and to
execute the final deed of sale and deliver title/ownership of the subject
property to the complainant upon full payment of the contract price.
2. To pay complainant actual damages of P30,000.00 per month
commencing from March 1990 until the delivery of the subject
property and the amount of P50,000.00 as exemplary damages.
3. To pay complainant the amount of P50,000.00 as and by way of
attorney's fees.
4. To pay to this Board the amount of P5,000.00 as [an] administrative
fine.
IT IS SO ORDERED.
In ruling for H.L. CARLOS, the HLURB Arbiter held:
xxx xxx xxx
Respondent's position that the case is a complex one is more
imaginary than real. Clearly, the cancellation of the subject "Contract to
Purchase and to Sell" was in violation of Republic Act No. 6552,
otherwise known as the "Realty Installment Buyers Protection Act,"
which prescribes the procedure for cancellation of installment contracts
for the purchase of subdivision lots and/or condominium units.
In the case at bar, the complainant had already paid P1,810,330.70 or
more than 50% of the contract price of P3,614,000.00 and more than
the total of two years (24 months) installments computed at the
monthly installment of P67,024.22, inclusive of the downpayment,
which is more than 24 installments. Under RA. 6552, notarial
cancellation of the installment contract becomes effective only upon
payment of the cash surrender value to the purchaser, which however
respondent did not do.
Respondent's cancellation of the subject contract was clearly illegal,
void and cannot be sanctioned.
Neither can this Office find merit in respondent's contention that this
case should be suspended because of the pending civil case between
the parties, said pending case, Civil Case No. 89-5870 in the Regional
Trial Court, Branch 61, Makati, Metro Manila, was filed by the same
complainant herein against the same respondent for collection of
unpaid billings in the amount of about P10,000,000.00.
On the other hand, this Office finds that respondent's act in cancelling
the subject installment sales contract without following the provisions
of R.A. 6552 is an unsound real estate business practice for which
respondent is fined the sum of P5,000.00.
As to damages and attorney's fees claimed by complainant and borne
out by the records, this Office finds that respondent should be held
liable for unearned rental income of P30,000.00 per month,
commencing from March 1990 when the condominium unit should
have been delivered until actual delivery thereof, and attorney's fees of
P50,000.00, both amounts to be deducted from the unpaid balance
due on the subject condominium unit.
Likewise, for its wanton breach of the subject contract, respondent is
ordered to pay exemplary damages in the amount of P50,000.00 as an
example for the public good, deductible from the balance due on the
subject condominium unit.
xxx xxx xxx
Whereupon, MARINA interposed an appeal to the Board of
Commissioners of HLURB (First Division) which affirmed the assailed
decision.
On further appeal to the Office of the President, the decision of the
Board of Commissioners (First Division) was affirmed.
MARINA filed a motion for reconsideration but was denied. 5
MARINA filed a petition for review with the Court of Appeals ascribing
the following errors to the Office of the President:
(1) In sustaining the award of actual damages for unrealized profits in
favor of private respondent H.L. CARLOS which were unliquidated,
speculative and patently unreasonable;
(2) In declaring the motion for reconsideration filed by MARINA "pro-
forma" and depriving it of the right of appeal; and
(3) In not dismissing the case on the grounds of litis pendentia, forum-
shopping and splitting a single cause of action. 6
The Court of Appeals sustained MARINA as regards the award of actual
damages, finding that no evidence was presented to prove the
P30,000.00 award as monthly rental for the condominium unit.
However, as to the pronouncement of the Office of the President that
MARINA's motion for reconsideration was merely pro-forma, the Court
of Appeals noted that MARINA did not raise any new issue in its
motion for reconsideration. In the same vein, respondent court ruled
that MARINA was not deprived of its right to appeal.
The Court of Appeals likewise brushed aside MARINA's assertion that
the complaint should have been dismissed on the ground of litis
pendentia thus:
The requisites of lis pendens as a ground for dismissal of a complaint
are: (1) identity of parties or at least such representing the same
interest in both actions; (2) identity of rights asserted as prayed for, the
reliefs being founded on the same facts; and (3) identity in both cases
is such that the judgment that may be rendered in the pending case,
regardless of which party is successful, would amount to res judicata to
the other case.
There is no dispute that the case at bench and Civil Case No. 89-5870
for damages at the Makati RTC involves the same parties although in
the civil case, the officers of MARINA have been impleaded as co-
defendants. While the first requisite obtains in this case, the last two
are conspicuously absent.
It will be observed that the two cases involve distinct and separate
causes of action or rights asserted. Civil Case No. 89-5870 is for the
collection of sums of money corresponding to unpaid billings and
labor costs incurred by H.L. CARLOS in the construction of the project
under the Construction Contract agreed upon by the parties. Upon the
other hand, the case at bench is for specific performance (delivery of
the condominium unit) and damages arising from the unilateral
cancellation of the Contract to Purchase and to Sell by MARINA.
Moreover, the reliefs sought are also different. In the civil case, H.L.
CARLOS prays for the award of P7,065,885.03 representing unpaid
labor costs, change orders and price escalations including the sum of
P2,000,000.00 as additional compensatory damages. In the instant case,
H.L. CARLOS seeks not only the awa[r]d of actual and exemplary
damages but also the delivery of the condominium unit upon
MARINA's acceptance of the monthly amortization on the remaining
balance, the execution of a final deed of sale and the delivery of the
title to the said private respondent.
MARINA's claim that the present complaint should be dismissed on the
ground of splitting a cause of action, deserves scant consideration. The
two complaints did not arise from a single cause of action but from
two separate causes of action. It bears emphasis that H.L. CARLOS'
cause of action in the civil case stemmed from the breach by MARINA
of its contractual obligation under the Construction Contract, while in
the case at bench, H.L. CARLOS' cause of action is premised on the
unilateral cancellation of the Contract to Purchase and Sell by MARINA.
7
Accordingly, the Court of Appeals affirmed the Order of the Office of
the President but deleted the award of actual damages. As such, the
parties sought redress from this Court by way of separate petitions.
In G.R. No. 125447, MARINA asserts that the Court of Appeals erred: (1)
in finding that petitioner should turn over the subject condominium
unit to H.L. CARLOS and accept monthly amortizations on the
remaining balance; and (2) in not ordering the dismissal of the case on
the grounds of litis pendentia, forum-shopping and splitting of a single
cause of action.
On the other hand, in G.R. No. 125475, H.L. CARLOS contends that the
Court of Appeals gravely erred in: (1) finding that the award of actual
damages equivalent to P30,000.00 in unearned monthly rentals was not
sustained by evidence; (2) in not declaring that the petition for review
was filed out of time and fatally defective for lack of verification and
certification by MARINA Properties, and in not declaring the decision of
the Office of the President final and executory; and (3) in not
dismissing MARINA's appeal as without merit.
MARINA's motion to consolidate both cases was granted in a
resolution dated 27 January 1997. 8
We first address the lone procedural issue of the timeliness of the
petition for review filed by MARINA with the Court of Appeals and the
supposed lack of verification and certification.
We find without merit the allegation that MARINA's petition for review
before the Court of Appeals was filed out of time as MARINA's motion
for reconsideration (of the order of the Office of the President) was
found to be pro forma and, therefore, did not stop the running of its
period to appeal.
MARINA filed its Motion for Reconsideration9 on the last day of its
period to appeal, specifically, on 3 May 1995. However, the motion was
found by the Office of the President to be pro forma as "the issues of
litis pendentia, forum-shopping and splitting of a cause of action as
well as the issue of unliquidated, speculative and unreasonable
damages raised therein were basically the same issues raised and
discussed extensively in the Appeal Memorandum and which were
already weighed, discussed and considered by this Office in its Order
dated March 15, 1995." 10 As a consequence, the Office of the
President declared its decision final and executory.
Under our rules of procedure, a party adversely affected by a decision
of a trial court may move for reconsideration thereof on the following
grounds: (a) the damages awarded are excessive; (b) the evidence is
insufficient to justify the decision; or (c) the decision is contrary to law.
11 A motion for reconsideration interrupts the running of the period to
appeal, unless the motion is pro forma, 12 This is now expressly set
forth in the last paragraph of Section 2, Rule 37, 1997 Rules of Civil
Procedure.
A motion for reconsideration based on the foregoing grounds is
deemed pro forma if the same does not specify the findings or
conclusions in the judgment which are not supported by the evidence
or contrary to law, making express reference to the pertinent evidence
or legal provisions. 13 It is settled that although a motion for
reconsideration may merely reiterate issues already passed upon by
the court, that by itself does not make it pro forma and is immaterial
because what is essential is compliance with the requisites of the Rules.
14 Thus, in Guerra Enterprises, Co. Inc. v. CFI of Lanao del Sur, 15 we
ruled:
Among the ends to which a motion for reconsideration is addressed,
one is precisely to convince the court that its ruling is erroneous and
improper, contrary to the law or the evidence; and in doing so, the
movant has to dwell of necessity upon the issues passed upon by the
court. If a motion for reconsideration may not discuss these issues, the
consequence would be that after a decision is rendered, the losing
party would be confined to filing only motions for reopening and new
trial. We find in the Rules of Court no warrant for ruling to that effect, a
ruling that would, in effect eliminate subsection (c) of Section 1 of Rule
37.
On this note, it has also been fittingly observed that:
Where the circumstances of a case do not show an intent on the part
of the pleader to merely delay the proceedings, and his motion reveals
a bona fide effort to present additional matters or to reiterate his
arguments in a different light, the courts should be slow to declare the
same outright as pro forma. The doctrine relating to pro forma motions
has a direct bearing upon the movant's valuable right to appeal. It
would be in the interest of justice to accord the appellate court the
opportunity to review the decision of the trial court on the merits than
to abort the appeal by declaring the motion pro forma, such that the
period to appeal was not interrupted and had consequently lapsed. 16
We are thus unable to hold that MARINA's motion for reconsideration
was merely pro forma. Our review of the records reveals that said
motion adequately pointed out the conclusions MARINA regarded as
erroneous and contrary to law, and even referred to findings not
supported by evidence as well as jurisprudence to sustain MARINA's
claims. As to the justification proffered by the Office of the President
that it had already passed upon the issues raised by MARINA in its
motion, plainly, the authorities cited above readily refute such a
position.
It may be pointed out that under Supreme Court Circular No. 1-91
dated 27 February 1991 and Revised Administrative Circular No. 1-95
dated 16 May 1995, which took effect on 1 June 1995, an aggrieved
party is allowed one motion for reconsideration of the assailed decision
or final order before he may file a petition for review with the Court of
Appeals. All told, MARINA's motion for reconsideration was but proper
under the adjective rules extant in this jurisdiction.
The charge of a lack of verification or certification in MARINA's petition
before the Court of Appeals is baseless. Even the most cursory of
reviews will disclose that such may be found on pages 30 and 31 of the
Petition. 17
We agree with the conclusion of the Court of Appeals that the award of
P30,000.00 as actual damages for unearned monthly rental income
starting from March 1990 until the delivery of the property to H.L.
CARLOS was arbitrary. Article 2199 of the Civil Code provides that one
is entitled to adequate compensation only for such pecuniary loss
suffered by him as is duly proved. 18 Actual damages, to be
recoverable, must not only be capable of proof, but must actually be
proved with a reasonable degree of certainty. 19 Courts cannot simply
rely on speculation, conjecture or guesswork in determining the fact
and amount of damages. 20 As the Court of Appeals correctly found
here that no proof was submitted by H.L. CARLOS to substantiate the
recovery of actual damages in the form of monthly rentals, the deletion
of such award was but appropriate.
The issue of forum shopping raised by MARINA deserves scant
consideration. H.L. CARLOS was not guilty of forum shopping when it
sued MARINA before the HLURB to enforce their Contract To Purchase
and To Sell. Forum shopping is the act of a party against whom an
adverse judgment has been rendered in one forum, of seeking another
(and possibly favorable) opinion in another forum other than by appeal
or the special civil action of certiorari, or the institution of two (2) or
more actions or proceedings grounded on the same cause on the
supposition that one or the other court might look with favor upon the
party. 21 Contrary to MARINA's assertion, H.L. CARLOS' complaint was
hardly a duplication of Civil Case No. 89-5870 which was filed to collect
the sum of money corresponding to unpaid billings from their
Construction Contract. The cause of action in the civil case was,
therefore, totally distinct from the cause of action in the complaint
before the HLURB. For this reason, neither could there have been
splitting of a cause of action.
Anent the absence of litis pendentia, the Court of Appeals' meticulous
analysis of this issue leaves no room for improvement and we adopt it
as our own.
We likewise uphold the finding that MARINA's cancellation of the
Contract To Buy and To Sell was clearly illegal. Prior to MARINA's
unilateral act of rescission, H.L. CARLOS had already paid
P1,810,330.70, or more than 50% of the contract price of P3,614,000.00.
Moreover, the sum H.L. CARLOS had disbursed amounted to more than
the total of 24 installments, i.e., two years' worth of installments
computed at a monthly installment rate of P67,024.22, inclusive of the
downpayment.

As to the governing law, Section 24 of P.D. 957 22 provides:
Sec. 24 Failure to pay installments. — The rights of the buyer in the
event of his failure to pay the installments due for reasons other than
failure of the owner or developer to develop the project shall be
governed by Republic Act. No. 6552.
Then among the requirements of R.A. No. 6552, 23 in order to effect
the cancellation of a contract, a notarial cancellation must first be had.
24 Therefore, absent this, MARINA's cancellation of its contract with
H.L. CARLOS was void.
In conclusion, cases involving specific performance of contractual and
statutory obligations, filed by buyers of subdivision lots or
condominium units against the owner, developer, dealer, broker or
salesman fall under the jurisdiction of the HLURB. 25 It is incumbent
upon said administrative agency, in the exercise of its powers and
functions, to interpret and apply contracts, determine the rights of the
parties under these contracts, and award damages whenever
appropriate. 26
WHEREFORE, the petitions in these consolidated cases, G.R. No. 125447
and G.R. No. 125475 are DENIED and the assailed decision of
respondent Court of Appeals of 27 June 1996 is hereby AFFIRMED.
SECURITIES v. INTERPORT RESOURCES CORPORATION
Facts:
This is a Petition for Review on Certiorari under Rule 45 of the Rules of
Court, assailing the Decision,[1] dated 20 August 1998, rendered by the
Court of Appeals in C.A.-G.R. SP No. 37036, enjoining petitioner
Securities and
Exchange Commission (SEC) from taking cognizance of or initiating any
action against the respondent corporation Interport Resources
Corporation (IRC) and members of its board of directors, respondents
Manuel S. Recto, Rene S. Villarica, Pelagio Ricalde, Antonio Reina,
Francisco
Anonuevo, Joseph Sy and Santiago Tanchan, Jr., with respect to
Sections 8, 30 and 36 of the Revised Securities Act. In the same
Decision of the appellate court, all the proceedings taken against the
respondents, including the assailed SEC Omnibus Orders of 25 January
1995... and 30 March 1995, were declared void.
On 6 August 1994, the Board of Directors of IRC approved a
Memorandum of Agreement with Ganda Holdings Berhad (GHB).
Under the Memorandum of Agreement, IRC acquired 100% or the
entire capital stock of Ganda Energy Holdings, Inc. (GEHI),[2] which
would... own and operate a 102 megawatt (MW) gas turbine power-
generating barge. The agreement also stipulates that GEHI would
assume a five-year power purchase contract with National Power
Corporation. At that time, GEHI's power-generating barge was 97%
complete and would go... on-line by mid-September of 1994. In
exchange, IRC will issue to GHB 55% of the expanded capital stock of
IRC amounting to 40.88 billion shares which had a total par value of
P488.44 million.[3]
IRC alleged that on 8 August 1994, a press release announcing the
approval of the agreement was sent through facsimile transmission to
the Philippine Stock Exchange and the SEC, but that the facsimile
machine of the SEC could not receive it. Upon the advice of the SEC,
the
IRC sent the press release on the morning of 9 August 1994
The SEC averred that it received reports that IRC failed to make timely
public disclosures of its negotiations with GHB and that some of its
directors, respondents herein, heavily traded IRC shares utilizing this
material insider information. On 16 August 1994, the SEC
Chairman issued a directive requiring IRC to submit to the SEC a copy
of its aforesaid Memorandum of Agreement with GHB. The SEC
Chairman further directed all principal officers of IRC to appear at a
hearing before the Brokers and Exchanges Department (BED) of the
SEC to explain
IRC's failure to immediately disclose the information as required by the
Rules on Disclosure of Material Facts.[6
In compliance with the SEC Chairman's directive, the IRC sent a letter
dated 16 August 1994 to the SEC, attaching thereto copies of the
Memorandum of Agreement. Its directors, Manuel Recto, Rene Villarica
and Pelagio Ricalde, also appeared before the SEC on 22 August 1994
to... explain IRC's alleged failure to immediately disclose material
information as required under the Rules on Disclosure of Material
Facts.[7]
On 19 September 1994, the SEC Chairman issued an Order finding that
IRC violated the Rules on Disclosure of Material Facts, in connection
with the Old Securities Act of 1936, when it failed to make timely
disclosure of its negotiations with GHB. In addition, the SEC
pronounced... that some of the officers and directors of IRC entered
into transactions involving IRC shares in violation of Section 30, in
relation to Section 36, of the Revised Securities Act.[8]
Respondents filed an Omnibus Motion, dated 21 September 1994,
which was superseded by an Amended Omnibus Motion, filed on 18
October 1994, alleging that the SEC had no authority to investigate the
subject matter, since under Section 8 of Presidential Decree No. 902-A,
[9] as amended by Presidential Decree No. 1758, jurisdiction was
conferred upon the Prosecution and Enforcement Department (PED) of
the SEC. Respondents also claimed that the SEC violated their right to
due process when it ordered that the respondents appear... before the
SEC and "show cause why no administrative, civil or criminal sanctions
should be imposed on them," and, thus, shifted the burden of proof to
the respondents. Lastly, they sought to have their cases tried jointly
given the identical factual situations surrounding... the alleged violation
committed by the respondents.[10]
Respondents also filed a Motion for Continuance of Proceedings on 24
October 1994, wherein they moved for discontinuance of the
investigations and the proceedings before the SEC until the undue
publicity had abated and the investigating officials had become
reasonably free from... prejudice and public pressure.
No formal hearings were conducted in connection with the
aforementioned motions, but on 25 January 1995, the SEC issued an
Omnibus Order which thus disposed of the same in this wise:[12]
WHEREFORE, premised on the foregoing considerations, the
Commission resolves and hereby rules:
To create a special investigating panel to hear and decide the instant
case in accordance with the Rules of Practice and Procedure Before the
Prosecution and Enforcement Department (PED), Securities and
Exchange Commission, to be composed of Attys. James K. Abugan,
Medardo
Devera (Prosecution and Enforcement Department), and Jose Aquino
(Brokers and Exchanges Department), which is hereby directed to
expeditiously resolve the case by conducting continuous hearings, if
possible.
To recall the show cause orders dated September 19, 1994 requiring
the respondents to appear and show cause why no administrative, civil
or criminal sanctions should be imposed on them.
To deny the Motion for Continuance for lack of merit.
he SEC filed a Motion for Leave to Quash SEC Omnibus Orders so that
the case may be investigated by the PED in accordance with the SEC
Rules and Presidential Decree No. 902-A, and not by the special body
whose creation the SEC had earlier ordered.[18]
Additionally, the SEC may still impose the appropriate administrative
sanctions under Section 54 of the aforementioned law.[71]
Under Section 45 of the Revised Securities Act, which is entitled
Investigations, Injunctions and Prosecution of Offenses, the Securities
Exchange Commission (SEC) has the authority to "make such
investigations as it deems necessary to determine whether any person
has... violated or is about to violate any provision of this Act XXX."
After a finding that a person has violated the Revised Securities Act, the
SEC may refer the case to the DOJ for preliminary investigation and
prosecution.
Issues:
The Court of Appeals promulgated a Decision[19] on 20 August 1998.
It determined that there were no implementing rules and regulations
regarding disclosure, insider trading, or any of the provisions of the
Revised Securities Acts which the respondents... allegedly violated. The
Court of Appeals likewise noted that it found no statutory authority for
the SEC to initiate and file any suit for civil liability under Sections 8, 30
and 36 of the Revised Securities Act. Thus, it ruled that no civil,
criminal or... administrative proceedings may possibly be held against
the respondents without violating their rights to due process and equal
protection. It further resolved that absent any implementing rules, the
SEC cannot be allowed to quash the assailed Omnibus Orders for the
sole... purpose of re-filing the same case against the respondents.[20]
THE COURT OF APPEALS ERRED WHEN IT RULED THAT THERE IS NO
STATUTORY AUTHORITY WHATSOEVER FOR PETITIONER SEC TO
INITIATE AND FILE ANY SUIT BE THEY CIVIL, CRIMINAL OR
ADMINISTRATIVE AGAINST RESPONDENT CORPORATION AND ITS
DIRECTORS WITH RESPECT TO SECTION 30 (INSIDER'S DUTY TO
DISCOLSED [sic] WHEN TRADING) AND 36 (DIRECTORS OFFICERS AND
PRINCIPAL STOCKHOLDERS) OF THE REVISED SECURITIES ACT; AND
THE COURT OF APPEALS ERRED WHEN IT RULED THAT RULES OF
PRACTICE AND PROSECUTION BEFORE THE PED AND THE SICD RULES
OF PROCEDURE ON ADMINISTRATIVE ACTIONS/PROCEEDINGS[25]
ARE INVALID AS THEY FAIL TO COMPLY WITH THE STATUTORY
REQUIREMENTS CONTAINED IN THE
ADMINISTRATIVE CODE OF 1987.
I. Sections 8, 30 and 36 of the Revised Securities Act do not require the
enactment of
implementing rules to make them binding and effective.
Ruling:
respondents filed a
Supplemental Motion[16] dated 16 May 1995, wherein they prayed for
the issuance of a writ of preliminary injunction enjoining the SEC and
its agents from investigating and proceeding with the hearing of the
case against respondents herein. On 5 May
1995, the Court of Appeals granted their motion and issued a writ of
preliminary injunction, which effectively enjoined the SEC from filing
any criminal, civil or administrative case against the respondents
herein.[17]
It is well... established that administrative authorities have the power to
promulgate rules and regulations to implement a given statute and to
effectuate its policies, provided such rules and regulations conform to
the terms and standards prescribed by the statute as well as purport
to... carry into effect its general policies. Nevertheless, it is undisputable
that the rules and regulations cannot assert for themselves a more
extensive prerogative or deviate from the mandate of the statute.[32]
Moreover, where the statute contains... sufficient standards and an
unmistakable intent, as in the case of Sections 30 and 36 of the Revised
Securities Act, there should be no impediment to its implementation.
Principles:
As a consequence, in proceedings before administrative or quasi-
judicial bodies, such as the National Labor Relations Commission and
the Philippine Overseas Employment Agency, created under laws which
authorize summary proceedings, decisions may be reached on the
basis of... position papers or other documentary evidence only. They
are not bound by technical rules of procedure and evidence.[59] In
fact, the hearings before such agencies do not connote full adversarial
proceedings.[60]
Thus, it is not necessary for the rules to require affiants to appear and
testify and to be cross-examined by the counsel of the adverse party.
To require otherwise would negate the summary nature of the
administrative or quasi-judicial proceedings.
II. The Securities Regulations Code did not repeal Sections 8, 30 and 36
of the Revised
Securities Act since said provisions were reenacted in the new law.
The SEC retained the jurisdiction to investigate violations of the
Revised Securities Act,... reenacted in the Securities Regulations
Code, despite the abolition of the PED.

Padua v. Ranada
FACTS
Toll Regulatory Board (TRB) issued Resolution No. 2001-89 authorizing
provisional toll rate adjustments on Metro Manila Skyway. It was
thereafter published in newspapers of general circulation for three (3)
consecutive weeks. However, there was no hearing conducted for the
matter. Deliberations were not even attended by Board Members
except TRB Executive Director Jaime Dumlao, Jr. Petitioners assail the
validity of the resolution.
ISSUES
Whether or not Resolution No. 2001-89 is invalid on the ground that:
(a) it was in violation of due process;
(b) the provisional toll rate adjustments are exorbitant, oppressive,
onerous and unconscionable; and,
(c) TRB Executive Director Jaime Dumlao, Jr. alone authorized the
provisional increase.
RULING
“(a) No. TRB clearly complied with the publication requirements. Also,
the TRB may grant and issue ex-parte to any petitioner, without need
of notice, publication or hearing, provisional authority to collect,
pending hearing and decision on the merits of the petition, the
increase in rates prayed for or such lesser amount as the TRB may in its
discretion provisionally grant.
“(b) No. This is obviously a question of fact requiring knowledge of the
formula used and the factors considered in determining the assailed
rates. Definitely, this task is within the province of the TRB. The SC
takes cognizance of the wealth of jurisprudence on the doctrine of
primary administrative jurisdiction and exhaustion of administrative
remedies. In this era of clogged court dockets, the need for specialized
administrative boards or commissions with the special knowledge,
experience and capability to hear and determine promptly disputes on
technical matters or intricate questions of facts, subject to judicial
review in case of grave abuse of discretion, is indispensable. Between
the power lodged in an administrative body and a court, the
unmistakable trend is to refer it to the former.”
“(c) No. It is not true that it was TRB Executive Director Dumlao, Jr.
alone who issued Resolution No. 2001-89. The Resolution itself
contains the signature of the four TRB Directors. Petitioner Padua
would argue that while these Directors signed the Resolution, none of
them personally attended the hearing. This argument is misplaced.
Under our jurisprudence, an administrative agency may employ other
persons, such as a hearing officer, examiner or investigator, to receive
evidence, conduct hearing and make reports, on the basis of which the
agency shall render its decision. Such a procedure is a practical
necessity. Corollarily, in a catena of cases, the Supreme Court laid down
the cardinal requirements of due process in administrative
proceedings, one of which is that “the tribunal or body or any of its
judges must act on its or his own independent consideration of the law
and facts of the controversy, and not simply accept the views of a
subordinate.” Thus, it is logical to say that this mandate was rendered
precisely to ensure that in cases where the hearing or reception of
evidence is assigned to a subordinate, the body or agency shall not
merely rely on his recommendation but instead shall personally weigh
and assess the evidence which the said subordinate has gathered.”
FRANCISCO VS. TRB
Facts:
President Marcos issued PD 1112 authorizing the establishment of toll
facilities on public improvements. It acknowledged the huge financial
requirements and the need to tap the resources of the private sector to
implement the government’s infrastructure programs. PD 1112 allowed
the collection of toll fees for the use of certain public improvements
that would allow a reasonable rate of return on investments. The same
decree created the Toll Regulatory Board, vesting it with the power to
enter into contracts for the construction, maintenance, and operation
of tollways, grant authority to operate a toll facility, issue the necessary
Toll Operation Certificate (TOC) and fix initial toll rates, and adjust it
from time to time after due notice and hearing. PD 1113 was issued
granting the Philippine National Construction Corporation for a period
of 30 years, a franchise to operate toll facilities in the North Luzon and
South Luzon Expressways. Subsequently, PD 1894 was issued further
granting the PNCC a franchise over the Metro Manila Expressway and
the expanded delineated NLEX and SLEX.
Then came the 1987 Constitution with its franchise provision. In 1993,
the Government Corporate
Counsel held that the PNCC may enter into a joint venture agreement
with private entities without going into public bidding. On February
1994, the DPWH together with other private entities executed a MOU
to open the door for entry of private capital in the Subic and Clark
extension projects. PNCC entered into a financial and technical JVAs
with entities for the toll operation of its franchised areas. Several
Supplemental Toll Operation Agreements (STOA) were entered for the
South Metro Manila Skyway, NLEX Expansion, and South Luzon
Expressway Projects.
Petitioners seek to nullify the various STOAs and assail the
constitutionality of Sections 3(a and d) of PD 1112 in relation to Section
8(b) of PD 1894. Insofar as they vested the TRB the power to issue,
modify, and promulgate toll rate changes while given the ability to
collect tolls.
Issue:
Whether or not the TRB may be empowered to grant authority to
operate the toll facility/system.
Ruling:
The TRB was granted sufficient power to grant a qualified person or
entity with authority to operate the toll facility/system. By explicit
provisions of the PDs, the TRB was given power to grant administrative
franchise for toll facility projects. The limiting thrust of Article 11,
Section 11 of the Constitution on the grant of franchise or other forms
of authorization to operate public utilities may, in context, be stated as
follows: (a) the grant shall be made only in favor of qualified Filipino
citizens or corporations; (b) Congress can impair the obligation of
franchises, as contracts; and (c) no such authorization shall be exclusive
or exceed fifty years. Under the 1987 Constitution, Congress has an
explicit authority to grant a public utility franchise. However, it may
validly delegate its legislative authority, under the power of
subordinate legislation, to issue franchises of certain public utilities to
some administrative agencies.
Dispositive:
The petitions in G.R. Nos. 166910 173630, and 169917 are hereby
DENIED for lack of merit. The petition in G.R. No. 183599 is GRANTED.