Cantemprate v. CRS Realty Development Corporation
REITERATIONFacts
1. The Antecedents: Petitioners, who had purchased subdivision lots on an installment basis from respondent CRS Realty Development Corporation and paid the full purchase price, filed a complaint for the delivery of certificates of title. They alleged that despite full payment and demands, the respondents, including CRS Realty's president Crisanta Salvador and owner Cesar Casal, failed to deliver the titles. An amended complaint impleaded additional respondents, including Bennie Cuason and Caleb Ang, to whom Casal purportedly transferred the lots, and sought to nullify the sale to them and have them reconvey the lots. Respondent Casal claimed petitioners refused titles due to a notice of lis pendens related to a separate court case, and that CRS Realty was responsible for delivering titles. Respondent Salvador alleged that Casal assumed full responsibility for lot buyers' claims in a later agreement. Respondents Ang and Cuason asserted they were the registered owners and that petitioners' claims were unfounded. 2. Procedural History: The Housing and Land Use Regulatory Board (HLURB) Arbiter initially ruled that the regular courts, not the HLURB, had jurisdiction over the quieting of title claim but found CRS Realty, Casal, and Salvador liable for delivering titles and nullified the sale to Ang and Cuason. Upon review, the HLURB Board of Commissioners affirmed the lack of jurisdiction for quieting of title but modified the decision to order refunds with interest, dismissing the quieting of title claim. A subsequent resolution by the Board modified the decision to include damages and attorney's fees. The Office of the President affirmed the Board's decision and resolution. The Court of Appeals affirmed the Office of the President's decision and denied the motion for reconsideration. 3. The Petition: Petitioners filed a petition for review on certiorari under Rule 45 of the Rules of Civil Procedure, assailing the Court of Appeals' decision. They argued that the Court of Appeals erred in affirming the Office of the President's decision, which adopted the HLURB's ruling that it lacked jurisdiction, and in not nullifying the deed of absolute sale to respondents Ang and Cuason. The petition raised issues regarding whether the absence of a license to sell rendered the sales void, whether the subsequent sale constituted double sale, the HLURB's jurisdiction, and the validity of a minute decision. Petitioners sought an order for the cancellation of the sale to Ang and Cuason, delivery of certificates of title, and payment of damages.
Issue(s)
Whether the absence of a license to sell rendered the sales void. Whether the subsequent sale to respondents Cuason and Ang constituted a double sale. Whether the HLURB has jurisdiction over petitioners’ complaint for delivery of titles and for quieting of title. Whether a minute decision conforms to the constitutional requirement of clearly and distinctly stating the facts and law.
Ruling
The Supreme Court partly granted the petition. It affirmed the decisions of the lower bodies in most respects but modified the reliefs granted. The Court ordered respondents CRS Realty, Cesar E. Casal, and Crisanta R. Salvador to secure and deliver clean certificates of title to the petitioners within six months from the finality of the decision. Failure to comply would result in their joint and several liability to pay petitioners the prevailing fair market value of the lots. The case was remanded to the HLURB to determine the fair market value of the lots and the validity of the subsequent sale to Cuason and Ang, specifically whether it was attended with fraud and bad faith. The awards for moral and exemplary damages, attorney's fees, and administrative fines were affirmed.
Ratio Decidendi
On the absence of a license to sell: The Court reiterated that the absence of a license to sell subdivision lots, as required by Presidential Decree (P.D.) No. 957, does not render the contract of sale void. Citing Co Chien v. Sta. Lucia Realty and Development, Inc., the Court explained that the law penalizes the act of selling without a license but does not declare the contract itself void. Such absence primarily subjects the seller to civil and criminal liabilities. The requirements for registration and license to sell are administrative conveniences for regulation, not conditions that affect the intrinsic validity of a perfected contract between the seller and the buyer. Therefore, the perfected contracts to sell between the petitioners and CRS Realty remained valid despite the lack of a license to sell. On the validity of the subsequent sale to Ang and Cuason: The Court held that the subsequent sale of the subdivision lots to respondents Ang and Cuason, if it involved lots already sold to petitioners, would constitute a breach of the sellers' obligation and potentially a double sale. The principle of relativity of contracts dictates that the subsequent agreement between Casal and Salvador, wherein Casal assumed full responsibility, could not prejudice third parties like the petitioners. Respondent Salvador, as an officer of CRS Realty, remained liable to petitioners despite divesting her interest in the company. The Court remanded the case to the HLURB to determine the validity of this sale, specifically whether it was tainted with fraud and bad faith, and to ascertain if it constituted a double sale. The Court also found that respondents CRS Realty, Casal, and Salvador breached their obligation to deliver clean certificates of title to petitioners upon full payment. The existence of a pending litigation and a notice of lis pendens did not absolve them of this duty. The Court affirmed the HLURB Arbiter's finding that respondents could not pass the buck to each other and must bear the responsibility. The Court reiterated that in case of failure to deliver clean titles within a reasonable period (six months from finality of decision), respondents would be jointly and severally liable to pay petitioners actual damages equivalent to the current market value of the lots, citing Solid Homes, Inc. v. Spouses Tan. This ensures that petitioners are compensated for the loss of what they already possessed and the profits they failed to obtain. On the jurisdiction of the HLURB: The Court clarified that the HLURB has exclusive jurisdiction over actions for specific performance to compel respondents to comply with their obligations under contracts for the purchase of lots, including the delivery of certificates of title. This is pursuant to P.D. No. 1344. However, the HLURB does not have jurisdiction over actions for quieting of title or reconveyance, which fall under the exclusive original jurisdiction of the Regional Trial Courts (RTCs) under Batas Pambansa Blg. 129. The Court affirmed the HLURB's authority to order the delivery of titles but not to declare petitioners as absolute owners or to nullify the sale to Ang and Cuason, which requires a determination of ownership and title validity properly belonging to the RTC. Nevertheless, the HLURB could still adjudicate on the issue of double sale as it is intimately related to the obligation to deliver titles. On the constitutionality of the minute decision: The Court dismissed petitioners' contention that the Office of the President's decision violated Section 14, Article VIII of the Constitution. The Court reiterated its stance that memorandum decisions, which adopt by reference the findings of lower bodies, comply with the constitutional mandate for clarity and distinctness, citing expediency and practicality. The OP's decision, by stating that the findings of the a quo office were amply supported by substantial evidence and adopting them by reference, was deemed sufficient.
Main Doctrine
The absence of a license to sell subdivision lots does not render the contract of sale void, but subjects the seller to civil and criminal liability. The HLURB has jurisdiction over complaints for specific performance to compel the delivery of titles, but not for quieting of title or reconveyance which fall under the RTC. In cases of breach, the buyer may choose between fulfillment or rescission with damages, and actual damages may include the current market value of the property if the seller cannot deliver clean titles.