Manila Banking Corp. v. Rabina
REITERATIONFacts
The Antecedents: Respondent Marenir Development Corporation (MDC), a developer, obtained a loan from petitioner Manila Banking Corporation (petitioner). To secure this loan, MDC executed a real estate mortgage on a lot that was also the subject of a Contract to Sell with Amante Sibuyan. Sibuyan later assigned his rights to this lot to respondent Celestina Rabina, with MDC's conformity. After Celestina fully paid her amortization payments, she requested MDC to transfer the title to her. MDC failed to do so, prompting Celestina and her husband, Alfredo Rabina (respondent spouses), to file a complaint against petitioner and MDC before the Housing and Land Use Regulatory Board (HLURB). The complaint alleged non-delivery of titles, annulment of mortgage, and incomplete development of the subdivision project. Procedural History: The HLURB's Office of Appeals, Adjudication and Legal Affairs (OAALA) ruled in favor of the respondent spouses, declaring the mortgage invalid as against Celestina and directing petitioner to release the mortgage and title. MDC did not appeal this decision. Petitioner appealed to the HLURB Board of Commissioners, which affirmed the Arbiter's decision. Petitioner then appealed to the Office of the President (OP). The OP directed petitioner to pay the appeal fee and submit an appeal memorandum, but petitioner paid the fee one day late and filed its memorandum after extensions were exhausted. The OP dismissed petitioner's appeal for these procedural lapses. The Court of Appeals affirmed the OP's dismissal, holding that strict adherence to procedural rules, particularly the timely payment of fees, is mandatory, and that the HLURB has jurisdiction over petitioner under Presidential Decree No. 957. The Petition: The petitioner filed a petition for review on certiorari with the Supreme Court, faulting the Court of Appeals for affirming the OP's dismissal on technicalities, for ruling that the HLURB has jurisdiction over petitioner, and for affirming the HLURB's orders. The Supreme Court denied the petition, holding that motions for extension are not granted as a matter of right and that petitioner's procedural missteps were not justified. The Court also affirmed the HLURB's jurisdiction, citing Presidential Decree No. 957 and relevant jurisprudence, and found that the mortgage was indeed an unsound real estate business practice prejudicial to lot buyers, and that the seller, not the buyer, is responsible for registering the contract to sell.
Issue(s)
Whether the Court of Appeals erred in affirming the Office of the President's dismissal of petitioner's appeal on the ground of belated payment of appeal fees and failure to file the appeal memorandum on time. Whether the Housing and Land Use Regulatory Board (HLURB) has jurisdiction over petitioner Manila Banking Corporation (TMBC) in a case involving annulment of mortgage on a subdivision lot. Whether the Court of Appeals erred in affirming the orders of the HLURB, encompassing the validity of the mortgage under P.D. 957 and the award of damages.
Ruling
The petition is DENIED and the Decision of July 17, 2000 of the Court of Appeals is AFFIRMED.
Ratio Decidendi
On the dismissal of the appeal due to procedural technicalities: The Court held that a motion for extension of time to file a pleading is not a matter of right but is addressed to the sound discretion of the court or agency. The petitioner's failure to timely pay the appeal fee and file its appeal memorandum, especially after being granted an extension and filing a second motion for extension without verifying its approval, constituted a procedural faux pas. The Court reiterated that strict adherence to procedural rules, particularly the mandatory payment of docket fees within the prescribed period, is essential for the promotion of substantial justice. The Court found no compelling reason to grant a second extension, emphasizing that procedural rules should not be taken for granted. On the jurisdiction of the HLURB: The Court affirmed that the HLURB has jurisdiction over petitioner TMBC. Citing Section 3 of P.D. No. 957 and subsequent executive orders that transferred regulatory and quasi-judicial functions to the HLURB, the Court explained that the HLURB has exclusive jurisdiction to hear and decide cases involving unsound real estate business practices, claims by subdivision lot buyers against project owners, and specific performance of contractual and statutory obligations. The act of MDC in mortgaging the lot without the consent of the lot buyer and the approval of the HLURB was deemed an unsound real estate business practice and highly prejudicial to the buyers. The Court clarified that the jurisdiction of the HLURB is broad enough to include complaints for annulment of mortgage, and separating such issues would inconvenience the parties and hinder speedy justice. On the validity of the mortgage and P.D. 957, and the award of damages: The Court rejected TMBC's argument that the mortgage did not fall under the prohibition in Section 18 of P.D. 957. The Court emphasized that Section 18 is a prohibitory law, and acts committed contrary to it are void. The purpose of P.D. 957 is to protect innocent lot buyers from fraud, such as mortgaging their purchased lots without their knowledge. The Court also dismissed TMBC's contention that the lot was not part of a subdivision project at the time of the mortgage, noting that TMBC was aware of MDC's real estate development activities and that the mortgaged property was indeed subdivided. Furthermore, the Court clarified that the duty to register the Contract to Sell and/or Deed of Assignment lies with the seller (MDC), not the buyer (spouses Rabina), as provided in Section 17 of P.D. 957. The Court noted that the Arbiter's decision indicated that the liability for moral damages fell on MDC, not TMBC, based on MDC's refusal to comply with its obligation.
Main Doctrine
The Housing and Land Use Regulatory Board (HLURB) has jurisdiction over complaints for annulment of mortgage involving subdivision projects, as P.D. 957 aims to protect lot buyers from fraudulent practices, including the mortgaging of lots without their knowledge or consent. Strict adherence to procedural rules, such as timely payment of appeal fees and filing of appeal memoranda, is mandatory, and failure to comply may lead to the dismissal of the appeal.