Sta. Lucia Realty and Development, Inc. v. Bernas

FIRST DIVISION

[G.R. No. 244643. July 30, 2019.]

STA. LUCIA REALTY AND DEVELOPMENT, INC., petitioner, vs.BRIC BERNARD C. BERNAS, IN HIS OWN RIGHT AS ATTORNEY-IN-FACT OF THE HEIRS OF GLORIA C. BERNAS, respondent.

NOTICE

Sirs/Mesdames :

Please take notice that the Court, First Division, issued a Resolution datedJuly 30, 2019which reads as follows:

"G.R. No. 244643 (Sta. Lucia Realty and Development, Inc. vs. Bric Bernard C. Bernas, in his own right as Attorney-in-Fact of the Heirs of Gloria C. Bernas) — The petitioner's motion for an extension of thirty (30) days within which to file a petition for review on certiorari is GRANTED, counted from the expiration of the reglementary.

This Petition for Review on Certiorari1 assails the Decision 2 dated June 29, 2018 of the Court of Appeals (CA) in CA-G.R. CV No. 107745, which granted the appeal filed by respondent Bric Bernard C. Bernas [in his own right as Attorney-in-Fact of the Heirs of Gloria C. Bernas] (Bernas); and the Resolution 3 dated February 6, 2019, denying the Motion for Reconsideration filed by petitioner Sta. Lucia Realty and Development, Inc. (Sta. Lucia).

This case originated from a complaint for breach of contract with damages filed by Bernas against Sta. Lucia before the Regional Trial Court (RTC) of Pasig City, San Juan City Station, Branch 160. Bernas alleged that sometime in 1989, his parents Silverio and Gloria Bernas (Sps. Bernas) purchased a 377-square meter commercial lot from Sta. Lucia located in Barangay Seven Hills, Antipolo City, covered by Transfer Certificate of Title (TCT) No. 197202. 4 At the time of the purchase, the subject property was physically identified and shown in the survey plan prepared by Sta. Lucia (i.e., commercial lot beside the Sumulong Highway and immediately adjacent to Barangay Hills Subdivision; it is between Palos Verdes Subdivision and Barangay Hills Subdivision). After the installment payments were completed, the parties executed a Deed of Absolute Sale 5 on December 17, 1992. TCT No. 234220 6 was issued in the name of Sps. Bernas in 1993. From 1994 to 1995, Bernas hired a caretaker to oversee the subject property. He also hired an architect and a construction firm because he intended to construct a commercial building on the subject property and establish a 7-11 convenience store. When Bernas was about to fence the subject property, he was informed by his caretaker that the subject property was owned by someone else. It appeared that sometime in 2007, Sta. Lucia caused the resurvey of the subject property and it was discovered that the property was located within the lot occupied by the gate of Barangay Hills Subdivision and not merely beside it. There was no other means of ingress and egress from Barangay Hills Subdivision except through the subject property. Thus, while originally 377 sq m, the subject property was reduced by the gate by 145 sq m. It was further reduced by 100 sq m because of a road widening project of the Department of Public Work and Highways (DPWH). Hence, the remaining unoccupied portion of the subject property was 132 sq m. However, 20 sq m from the remaining 132 sq m was separated by the gate of Barangay Hills Subdivision, thus, leaving 112 sq m available for commercial purposes. 7

Bernas wrote a letter demanding compensation from Sta. Lucia for the loss. Sta. Lucia offered other available lots from their subdivision as replacement of the subject property. Negotiations failed since the value of the properties offered by Sta. Lucia were not comparable to the subject property. The final demand letter of Bernas remained unheeded. Hence, the complaint. 8

Sta. Lucia filed a Motion to Dismiss on the ground of lack of jurisdiction over the subject matter of the complaint. Considering that the action arose out of a sale by Sta. Lucia as a subdivision lot, jurisdiction over the case fell with the Housing and Land Use Regulatory Board (HLURB). The RTC granted the motion and dismissed the case for lack of jurisdiction. On Motion for Reconsideration, the RTC reconsidered its previous order and ordered Sta. Lucia to file its answer within the remaining period. The RTC ruled that the complaint did not allege that the subject property was a subdivision lot sold by Sta. Lucia, in its capacity as a subdivision developer, and the reliefs prayed for by Bernas did not fall within the exclusive jurisdiction of the HLURB. 9

In its Answer, Sta. Lucia asserted that the subject property fell within the Palos Verdes Executive Subdivision and maintained that the case was a dispute between a subdivision developer and a lot buyer. It alleged that the issue of purported misrepresentation over the actual location of the subject property would fall under "unsound real estate business practice," under the exclusive jurisdiction of the HLURB. Further, it averred that the reduction of the subject property was not solely attributable to its resurvey but a road widening project undertaken by the DPWH. 10

On August 14, 2015, the RTC issued a Decision 11 dismissing Bernas' complaint for lack of cause of action. The RTC held that the evidence presented by Bernas was insufficient to establish his claim of breach of contract and damages.

Bernas moved for reconsideration but it was denied in the Order dated March 28, 2016.

Thereafter, Bernas appealed the Decision to the CA.

On June 29, 2018, the CA rendered a Decision 12 granting the appeal. It set aside the Decision of the RTC and entered a new judgment ordering Sta. Lucia to deliver a lot of similar size and value. In the event that specific performance cannot be effected, to pay Bernas the amount of P3,770,000.00 as reasonable compensation for the value of the subject property he purchased. The CA likewise awarded nominal damages in the amount of P50,000.00 with 6% interest per annum from the finality of the Decision until its full satisfaction.

The CA ruled that Bernas was able to substantiate his claim for breach of contract but failed to present competent proof as to the damages. However, while Bernas failed to substantiate his money claims, it is clear that he suffered damage by reason of his inability to use the subject property for any commercial purpose. Hence, the CA deemed it proper to render a judgment for specific performance or in the alternative, rescission. It directed Sta. Lucia to replace the subject property with a lot of similar size and value, and in the event that it cannot be effected, to pay Bernas the amount of P3,770,000.00.

Sta. Lucia moved for reconsideration but it was denied in the Resolution 13 dated February 6, 2019.

Hence, this Petition for Review on Certiorari under Rule 45.

The crux of this petition is one of jurisdiction over the subject matter, a question of law, which We can resolve without comment from the other party.

After a judicious study of the case, the Court finds the petition meritorious. It is the HLURB which has jurisdiction over the present action.

Sta. Lucia had been vigorous in asserting that it is the HLURB which has jurisdiction over the instant action. It claimed that the case involves the sale of a subdivision lot with the ultimate purpose of recovering damages and attorney's fees which can only be properly threshed out before the HLURB.

This Court has consistently held that complaints for breach of contract or specific performance with damages filed by a subdivision lot or condominium unit buyer against the owner or developer fall under the exclusive jurisdiction of the HLURB. 14

Moreover, under the doctrine of primary administrative jurisdiction, courts cannot or will not determine a controversy where the issues for resolution demand the exercise of sound administrative discretion requiring the special knowledge, experience, and services of the administrative tribunal to determine technical and intricate matters of fact. 15

Section 1 of Presidential Decree (P.D.) No. 1344, 16 provides:

Sec. 1.  In the exercise of its functions to regulate the real estate trade and business and in addition to its powers provided for in Presidential Decree No. 957, the National Housing Authority [now HLURB] shall have exclusive jurisdiction to hear and decide cases of the following nature:

(a)  Unsound real estate business practices;

(b)  Claims involving refund and any other claims filed by subdivision lot or condominium unit buyer against the project owner, developer, dealer, broker or salesman; and

(c)  Cases involving specific performance of contractual and statutory obligations filed by buyers of subdivision lots or condominium units against the owner, developer, dealer, broker or salesman.

In this case, while it was not alleged in the complaint that Bernas is a buyer of a subdivision lot from Sta. Lucia, a subdivision developer, the Contract to Sell and the Deed of Sale which prove the purchase, evidently show that the subject property is a commercial lot inside Palos Verdes Subdivision. A commercial lot is included in the definition of a "subdivision lot" in a subdivision project. 17 Bernas is a buyer of a subdivision lot claiming for damages against Multifold, a subdivision developer, for the latter's act of resurveying the purchased property which resulted in the substantial reduction in the area. Clearly, it is the HLURB which has jurisdiction over the case.

The provisions of P.D. No. 957, which granted HLURB the exclusive jurisdiction to regulate the real estate trade and business, were intended to encompass all questions regarding subdivisions and condominiums. The intention was aimed at providing for an appropriate government agency, the HLURB, to which all parties aggrieved in the implementation of provisions and the enforcement of contractual rights with respect to said category of real estate may take recourse. The business of developing subdivisions and corporations being imbued with public interest and welfare, any question arising from the exercise of that prerogative should be brought to the HLURB which has the technical know-how on the matter. 18

WHEREFORE, premises considered, the instant petition is GRANTED. The complaint for breach of contract with damages docketed as Civil Case No. 71943 is hereby DISMISSED for lack of jurisdiction. Consequently, the assailed Decision dated June 29, 2018 and Resolution dated February 6, 2019 of the Court of Appeals in CA-G.R. CV No. 107745 are SET ASIDE.

SO ORDERED."

Very truly yours,

(SGD.) LIBRADA C. BUENADivision Clerk of Court

 

Footnotes

1.Rollo, pp. 9-20.

2. Penned by Associate Justice Renato C. Francisco, with Associate Justices Magdangal M. De Leon and Rodil V. Zalameda, concurring; id. at 28-41.

3. Penned by Associate Justice Rodil V. Zalameda, with Associate Justices Fernanda Lampas Peralta and Henri Jean Paul B. Inting (now a Member of this Court), concurring; id. at 42-43.

4. Contract to Sell; id. at 83-84.

5.Id. at 96-99.

6.Id. at 100-101.

7.Id. at 29-30.

8.Id. at 30.

9.Id. at 30-31.

10.Id. at 32.

11. Penned by Judge Myrna V. Lim-Verano; id. at 118-120.

12.Id. at 28-41.

13.Id. at 42-43.

14.Spouses Osea v. Ambrosio, 521 Phil. 92, 102 (2006).

15.Id.

16. Empowering the National Housing Authority to Issue Writ of Execution in the Enforcement of its Decision under Presidential Decree No. 957.

17. Presidential Decree No. 957, Section 2 (e).

   Section 2. Definition of Terms — When used in this Decree, the following terms shall, unless the context otherwise indicates, have the following respective meanings:

xxx xxx xxx

   (e) Subdivision lot. — Subdivision lot shall mean any of the lots, whether residential, commercial, industrial, or recreational, in a subdivision project.

18.Spouses Osea v. Ambrosio, supra at 100.