Moldex Realty v. Housing and Land Use Regulatory Board
REITERATIONFacts
1. The Antecedents: Petitioner Moldex Realty, Inc., a real estate developer, owned and developed Metrogate Complex Phase I. After developing the subdivision and obtaining a License to Sell in 1988, the company had been subsidizing the maintenance and operation of common facilities, including streetlights and their associated electricity costs. In 2000, Moldex Realty decided to cease covering these electricity expenses and informed the Metrogate Complex Village Homeowners' Association, Inc. (respondent association), which had organized in 1993, that it should assume the obligation. The respondent association refused to pay, leading to Meralco discontinuing its service. 2. Procedural History: In response to the streetlight service discontinuation, the respondent association filed for preliminary injunction and preliminary mandatory injunction with the Housing and Land Use Regulatory Board (HLURB). On April 5, 2001, the HLURB Regional Officer granted the injunction, citing PD Nos. 957 and 1216, and HUDCC Resolution No. R-562 (1994). Petitioner's motion for reconsideration was denied on May 28, 2001. Following the respondent association's posting of a bond, a writ of preliminary mandatory injunction was issued on June 28, 2001, compelling petitioner to pay for streetlight electricity costs until turnover. Petitioner then filed a Petition for Prohibition and Certiorari with the Court of Appeals, seeking to nullify the HLURB issuances and HUDCC Resolution No. R-562, alleging unconstitutionality. The Court of Appeals dismissed this petition on August 27, 2001, ruling that constitutional issues should be raised directly with the Supreme Court and noting a deficiency in the verification and certification against non-forum shopping. Subsequently, petitioner filed the instant petition with the Supreme Court on September 21, 2001. 3. The Petition: The instant petition, filed under Rule 65 of the Rules of Court, seeks certiorari and prohibition to nullify the HLURB's Resolution No. R-562, series of 1994, and its subsequent issuances and writ of mandatory injunction. Petitioner argues that HUDCC Resolution No. R-562 is an unconstitutional exercise of legislative power, that the HLURB gravely abused its discretion in issuing the injunction based on a void regulation, and that the obligation to maintain the subdivision, including streetlight costs, rests exclusively with the private respondents. The petition also contends that the Court of Appeals erred in dismissing its prior petition and that the issue of constitutionality was timely raised. However, the Supreme Court found the petition moot and academic due to HUDCC Board Resolution No. R-699, series of 2001, which amended the rules regarding the proportionate sharing of streetlight electricity costs, and also noted the failure to implead the HUDCC as an indispensable party.
Issue(s)
Whether the Court of Appeals erred in ruling that questions regarding the constitutionality of an administrative regulation can only be brought directly to the Supreme Court. Whether the petition is time-barred under the 60-day reglementary period of Rule 65. Whether the case has been rendered moot and academic by the subsequent issuance of HUDCC Resolution No. R-699, Series of 2001. Whether the failure to implead the HUDCC as an indispensable party is fatal to the petition.
Ruling
The petition is dismissed. The case is moot and academic. Costs against petitioner.
Ratio Decidendi
On Issue 1: The Court ruled that the Court of Appeals erred in holding that only the Supreme Court can decide on the constitutionality of a regulation. Citing Drilon v. Lim, the Court emphasized that lower courts have jurisdiction to resolve constitutionality at the first instance as part of their judicial power to determine what laws conform to the fundamental law. The Supreme Court's jurisdiction over such matters is generally appellate, except when the issue is of paramount importance to the public. In this case, since the matter involved proprietary interests rather than transcendental public concern, the petitioner should have observed the hierarchy of courts and allowed the lower court to decide the issue first. On Issue 2: The petition was not time-barred. The Court held that a party may raise the unconstitutionality or invalidity of an administrative regulation on every occasion it is enforced. Relying on Allied Banking Corporation v. Quezon City Government, the Court noted that while the question must be raised at the 'earliest opportunity,' this does not mean immediately after the state action if the injury is continuous. Here, the obligation to pay for electricity is a continuous burden, and every new directive to comply creates a new cause of action. Thus, the prior filing with the Court of Appeals and the continuous nature of the injury preserved the petitioner's right to challenge the regulation. On Issue 3: The case has been rendered moot and academic. During the pendency of the proceedings, the HUDCC issued Resolution No. R-699, Series of 2001, which amended the rules. The new regulation explicitly provides that electrical bills for streetlights shall be proportionately shouldered by the users (homeowners) prior to the issuance of the Certificate of Completion and turnover to the Local Government Unit. Since this new provision superseded the assailed Resolution No. R-562, there is no longer a live controversy to resolve, making the constitutional challenge a purely theoretical exercise. On Issue 4: The failure to implead the HUDCC is a fatal procedural defect. The Court defined an indispensable party as one without whom no final determination can be had. As the entity that issued the assailed Resolution No. R-562, the HUDCC is an indispensable party to any action seeking to nullify said resolution. The absence of an indispensable party renders the court's actions null and void for want of authority to act. While cases with such defects are usually remanded, the Court declined to do so here because the initial action failed to observe the hierarchy of courts and the issue had already become moot.
Main Doctrine
A petition assailing the constitutionality of an administrative regulation is not time-barred if the injury caused by its implementation is continuous, giving rise to a new cause of action each time compliance is directed. However, a case becomes moot and academic if an amendatory regulation supersedes the assailed provision during the pendency of the proceedings, rendering the resolution of the constitutionality issue a mere theoretical exercise. Furthermore, the failure to implead an indispensable party, such as the HUDCC in a case challenging its resolution, renders all subsequent court actions null and void for want of jurisdiction.