Bernardo v. Tan
REITERATIONFacts
The Antecedents: Petitioner Julieta Bernardo offered to purchase a condominium unit from Megaworld Corporation, paying a reservation deposit and subsequent payments. The contract stipulated delivery by July 31, 2003, with a six-month grace period. Megaworld later sent a notice of cancellation due to alleged non-payment. Bernardo discovered that the Certificate of Registration and License to Sell for the project were issued only on June 7, 2001, after her reservation agreement was executed on October 26, 2000. She filed a complaint for violations of Sections 5, 17, and 20 of P.D. 957 and Estafa. Procedural History: The City Prosecutor dismissed Bernardo's complaint. The Secretary of Justice granted her petition for review and ordered the filing of Informations for violations of Sections 5, 17, and 20 of P.D. 957. The Regional Trial Court (RTC) granted the withdrawal of these Informations. The Court of Appeals (CA) upheld the RTC's decision, finding no grave abuse of discretion. However, the CA set aside the RTC's finding regarding Section 5, stating it applies to both subdivision and condominium projects, but concluded that a violation requires a contract of sale, which was not yet executed. The Petition: Petitioner filed a Petition for Review on Certiorari before the Supreme Court, assailing the CA Decision that affirmed the RTC's grant of withdrawal of the Informations.
Issue(s)
Whether there is probable cause to indict respondents for violating Sections 5, 17, and 20 of Presidential Decree No. 957. Whether the Regional Trial Court committed grave abuse of discretion in granting the withdrawal of the Informations regarding the violation of Section 17 of P.D. 957.
Ruling
The Supreme Court granted the Petition for Review on Certiorari, reversed and set aside the Decision of the Court of Appeals and the Orders of the Regional Trial Court. The case was remanded to the RTC for appropriate proceedings.
Ratio Decidendi
On the violation of Sections 5 and 20 of P.D. 957: The Court found that there is probable cause to indict respondents for violating Section 5. It clarified that the execution of a contract of sale is not an essential ingredient for a violation of Section 5. The definition of 'sale' under Section 2 of P.D. 957 includes every disposition or attempt to dispose, for a valuable consideration, of a condominium unit, and explicitly enumerates 'a contract to sell, a contract of purchase and sale, an exchange, an attempt to sell, an option of sale or purchase, a solicitation of a sale, or an offer to sell.' The Reservation Agreement, coupled with subsequent payments, falls within this expanded definition. The subsequent issuance of a license to sell cannot erase the offense, as the crime is malum prohibitum. The Court also ruled that probable cause is present for the violation of Section 20. It found that the RTC committed grave abuse of discretion by not applying Section 20 mechanically and by relying on the completion time in the Contract to Buy and Sell. The law is unambiguous that the National Housing Authority (now HLURB) fixes or extends the date of completion if justified, and the owner or developer must complete the project within one year from the issuance of the license to sell or such other period fixed by the Authority. The non-completion of the project by the stipulated deadline, irrespective of the contract to buy and sell, constitutes a violation. On the violation of Section 17 of P.D. 957: The Court found no reversible error in the CA's affirmation of the RTC's grant of withdrawal for the second Information concerning Section 17. It held that Section 17 requires the registration of 'All contracts to sell, deeds of sale and other similar instruments relative to the sale or conveyance of the subdivision lots and condominium units.' The Reservation Agreement, in this context, was deemed merely an option contract, which is not required to be registered under P.D. 957. An option contract grants a privilege to buy or sell within a given time and at a named price, and is distinct from a contract to sell or a contract of sale.
Main Doctrine
The Supreme Court reversed the Court of Appeals and Regional Trial Court, remanding the case for further proceedings. It held that there was probable cause to indict respondents for violations of Sections 5 and 20 of P.D. 957, finding that the trial court committed grave abuse of discretion in allowing the withdrawal of the Informations. However, it affirmed the withdrawal of the Information for violation of Section 17, ruling that a reservation agreement is an option contract not requiring registration under P.D. 957.