Fajardo v. Bautista
REITERATIONFacts
The Antecedents: Petitioners entered into separate Contracts to Sell with respondents Spouses Isabelo and Purita Jareño (JAREÑOS) for the purchase of lots in the Calamba Central Compound Subdivision. Subsequently, the JAREÑOS sold these lots to respondent Ruben Habacon (HABACON) via "Kasulatan ng Bilihan." HABACON then caused the cancellation of the original certificates of title and the issuance of new ones in his name. Procedural History: Petitioners filed separate complaints with the Regional Trial Court (RTC) of Calamba, Laguna, seeking the annulment of the sales to HABACON, the cancellation of his titles, reinstatement of the original titles, accounting, and damages. The RTC, through respondent Judge Odilon I. Bautista, dismissed the complaints for lack of jurisdiction, ruling that the Housing and Land Use Regulatory Board (HLRB) had exclusive jurisdiction. The RTC denied the motion for reconsideration. The Petition: Petitioners filed a special civil action for certiorari with the Supreme Court, assailing the RTC's dismissal orders, arguing that the RTC had jurisdiction and that the judge gravely abused his discretion. They contended that the case was not covered by PD 957 and its amendments because the developer's title had passed to a third party (HABACON), who was not a developer, and their action involved the annulment of a third party's title. They also invoked Section 19(1) of BP Blg. 129, granting RTCs jurisdiction over real property cases.
Issue(s)
Whether the Regional Trial Court (RTC) committed grave abuse of discretion amounting to lack of jurisdiction in dismissing the petitioners' complaints for lack of jurisdiction; and whether the Housing and Land Use Regulatory Board (HLRB) has exclusive jurisdiction over the subject matter of the complaints regarding unsound real estate business practices, claims by buyers against project owners/developers, and specific performance of contractual and statutory obligations. Whether the transfer of title to HABACON divested the HLRB of jurisdiction, and the procedural issue of certiorari.
Ruling
The Supreme Court dismissed the petition. It held that the RTC correctly ruled that it had no jurisdiction over the subject matter of the complaints. The Court found that the RTC did not commit grave abuse of discretion in dismissing the cases. The dispositive portion of the Resolution states: "RECALLED and, for lack of merit, the instant petition is DISMISSED with costs against the petitioners."
Ratio Decidendi
On the issue of jurisdiction and the applicability of PD 957 and PD 1344, and the nature of the claims: The Court affirmed the RTC's dismissal, holding that the Housing and Land Use Regulatory Board (HLRB) has exclusive jurisdiction over the cases. This jurisdiction is derived from Presidential Decree No. 957, as amended by Presidential Decree No. 1344, and subsequent executive orders transferring the regulatory functions. The complaints filed by the petitioners involved "unsound real estate business practices" on the part of the owners and developers, as well as claims for "specific performance of contractual and statutory obligations" by subdivision lot buyers against the owner or developer. These matters fall squarely within the exclusive purview of the HLRB, as established in previous jurisprudence. The Court reiterated that PD 1344 grants the National Housing Authority (NHA), now HLRB, exclusive jurisdiction to hear and decide cases involving unsound real estate business practices, claims by buyers against project owners/developers, and specific performance of contractual and statutory obligations. The Court clarified that while the petitioners sought the annulment of the sale to HABACON and the cancellation of his titles, these claims were incidental to the primary dispute arising from the Contracts to Sell. The core of the controversy remained the contractual and statutory obligations of the subdivision owners/developers towards the buyers. The Court also noted that incidental claims for damages may be resolved by the HLRB, as held in CT Torres Enterprises, Inc. vs. Hibionada. On the argument regarding third-party purchasers and the procedural issue of certiorari: The Court found the petitioners' argument that the transfer of title to HABACON divested the HLRB of jurisdiction to be without merit. The JAREÑOS, as owners and developers, were still involved in the transaction, and their act of selling lots already covered by Contracts to Sell to third parties could constitute an "unsound business practice." The HLRB's jurisdiction is broad enough to encompass such situations. Although the petition was filed beyond the reglementary period for appeal and thus procedurally flawed, the Court, in the broader interest of justice, proceeded to rule on the merits. However, it ultimately found that the RTC did not commit grave abuse of discretion, as it correctly determined that it lacked jurisdiction over the subject matter.
Main Doctrine
The Housing and Land Use Regulatory Board (HLRB), formerly the National Housing Authority (NHA) and Human Settlements Regulatory Commission (HSRC), has exclusive jurisdiction over cases involving unsound real estate business practices, claims by subdivision lot or condominium unit buyers against project owners/developers, and cases for specific performance of contractual and statutory obligations filed by buyers against owners/developers, including incidental claims for damages, pursuant to Presidential Decree No. 957, as amended by Presidential Decree No. 1344.