Sagun v. People's Homesite and Housing Corporation
REITERATIONFacts
The Antecedents: Plaintiffs-appellants, registered tenants and/or successors-in-interest of lots and dwelling units in LCH Project 3, Quezon City, filed a complaint for mandamus against the People's Homesite and Housing Corporation (PHHC). They sought to compel PHHC to sell these lots at a price not exceeding P10.00 per square meter, invoking Republic Act (R.A.) No. 3802, which directs PHHC to sell at cost to registered tenants. Plaintiffs alleged that PHHC demanded P50.00 per square meter, which they deemed excessive and contrary to R.A. 3802, citing prior sales of similar lots and store spaces at P10.00 per square meter. They claimed to have exhausted administrative remedies. Procedural History: The Court of First Instance of Rizal dismissed the complaint, finding that plaintiffs failed to exhaust administrative remedies and that the P50.00 per square meter price was not discriminatory or violative of R.A. 3802. The Court of Appeals certified the case to the Supreme Court due to purely legal questions. The Petition: The plaintiffs-appellants appealed, assigning errors related to the lower court's findings on the selling price being discriminatory and a grave abuse of discretion, failure to exhaust administrative remedies, improper use of real estate valuation, and dismissal of the mandamus petition.
Issue(s)
Whether the PHHC committed grave abuse of discretion in setting the selling price of the lots at P50.00 per square meter, violating R.A. 3802. Whether the plaintiffs-appellants failed to exhaust administrative remedies. Whether the lower court erred in using real estate valuation as a basis for the selling price instead of specific PHHC resolutions and memoranda. Whether the lower court erred in dismissing the petition for mandamus.
Ruling
The Supreme Court affirmed the decision of the trial court, dismissing the complaint. The Court held that R.A. 3802 applies only to 'dwelling units' intended for residential purposes and not to store spaces, which are commercial units. The determination of the selling price for these commercial units falls within the administrative discretion of PHHC, based on fair market value, and the P50.00 per square meter price was not shown to be excessive or discriminatory. The Court also found that while the issue of selling price interpretation was legal, the plaintiffs had not fully exhausted administrative remedies by appealing to higher offices, and even if they had, mandamus would not lie as there was no clear legal right to compel PHHC to sell at a specific low price, nor a ministerial duty to do so.
Ratio Decidendi
On the issue of whether the PHHC committed grave abuse of discretion in setting the selling price at P50.00 per square meter: The Court ruled that R.A. 3802 explicitly directs the sale of "dwelling units" and the lots on which they are constructed, indicating a legislative intent to assist lessees of residential units. The units leased by most plaintiffs were intended for store purposes, as evidenced by their lease agreements and higher rental rates compared to residential units. The conversion of these units to living quarters without requisite approval was of no consequence. Therefore, PHHC's interpretation of "dwelling units" to exclude commercial or store units was consistent with the legislative intent and the purpose of PHHC. The Court found no reason to disturb this interpretation, noting that executive construction of a statute by the administrative agency charged with its implementation is entitled to great weight. Furthermore, the claim that the P50.00 per square meter price was discriminatory was unsubstantiated, as the prior sales at P10.00 per square meter occurred years earlier, and the PHHC's discretion to set prices based on fair market value, considering current market values of P130.00 and P120.00 per square meter for corner and middle lots respectively, was upheld. The action of PHHC did not conflict with the letter or spirit of the law, nor did it demonstrate an abuse of discretion. On the issue of whether the plaintiffs-appellants failed to exhaust administrative remedies: The Court acknowledged that the doctrine of exhaustion of administrative remedies is not absolute, particularly when the issue is purely legal. However, it noted that the plaintiffs had sought assistance from the Office of the President, which referred the matter back to PHHC. PHHC stood by its decision, leaving plaintiffs with no recourse but to go to court. Despite this, the Court found that even if judicial action was allowable, mandamus would not lie. The Court reiterated that for mandamus to lie, the plaintiffs' legal rights must be well-defined, clear, and certain. There was no showing of a clear and certain right for plaintiffs leasing store spaces to compel PHHC to sell to them at a price much lower than that fixed by PHHC. The determination of the selling price requires the exercise of discretion, not a ministerial duty. On the issue of whether the lower court erred in using real estate valuation as a basis for the selling price instead of specific PHHC resolutions and memoranda: The Court found that since the store units were not covered by R.A. 3802, it was within PHHC's administrative discretion to use the fair market value of the land, as per appraisal guidelines, as the basis for the selling price. The P50.00 per square meter price was deemed not excessive or unreasonable, especially when compared to the prevailing market values in the area. The Court also noted that even if the store units were to be sold "at cost" under R.A. 3802, the term "at cost" includes not only the acquisition price but also costs of maintenance and administration incurred through the years, as established in Javillonar v. Land Tenure Administration. Therefore, the PHHC's determination of the selling price, which was not inclined to be disturbed, was respected and not tainted with grave abuse of discretion. On the issue of whether the lower court erred in dismissing the petition for mandamus: The Court concluded that mandamus would not lie because the plaintiffs did not possess a clear and certain right to compel PHHC to sell the store units at a price not exceeding P10.00 per square meter. PHHC did not have a ministerial duty to execute a contract of sale under such terms, as R.A. 3802 did not impose such an obligation, and the determination of the selling price involved discretion. For those plaintiffs renting dwelling units, while PHHC had a duty to sell "at cost" under R.A. 3802, they could not be compelled by mandamus to sell at a specific low price like P10.00 per square meter, as fixing the "at cost" selling price also required the exercise of discretion by PHHC.
Main Doctrine
The People's Homesite and Housing Corporation (PHHC) did not commit grave abuse of discretion in refusing to sell store spaces at 'cost' as defined by Republic Act No. 3802, as the law specifically applies to 'dwelling units' intended for residential purposes. The determination of selling prices for commercial units falls within PHHC's administrative discretion, based on fair market value.