March 2006 - Philippine Supreme Court Decisions/Resolutions
G.R. No. 165648 - EASTLAND CONSTRUCTION & DEVELOPMENT CORPORATION v. BENEDICTA MORTEL
[G.R. NO. 165648 : March 23, 2006]
EASTLAND CONSTRUCTION & DEVELOPMENT CORPORATION, Petitioner, v. BENEDICTA MORTEL, Respondent.
D E C I S I O N
Before Us is a Petition for Review on Certiorari which seeks to set aside the resolution1 of the Court of Appeals in CA-G.R. SP No. 84835 dated 22 July 2004 dismissing petitioner Eastland Construction & Development Corporation's Petition for Review for failure to append material portions of the record and other supporting papers as well as the Certificate of Non-Forum Shopping, and the resolution2 dated 11 October 2004 denying its motion for reconsideration.
The antecedents are stated in the decision of the Housing and Land Use Arbiter, as follows:
Sometime in 1996, respondent Eastland Construction and Development Corporation (Eastland for brevity), publicly announced and claimed that they would sell and develop a subdivision in Mabini, Batangas, to be known as the "Evergreen Anilao Estate," covered by TCT No. T-82217. For this purpose, Eastland went on a marketing campaign where they represented to the people of Mabini, Batangas the availability of the Project in general and of specific lots in particular. Allegedly at that time, Eastland was not yet equipped with a Certificate of Registration and License to Sell (CR/LS) issued by this Office.
Believing on the representations made by Eastland, complainant entered into a contract with the Eastland through its president Imelda de los Santos to purchase a lot specifically described as Lot No. 9, Block 2 with a total area of 125 square meters for a contract price of
P168,750.00. Complainant alleged that there was a technical error in the contract to sell because the area stated therein is 120 square meters corresponding the amount of P162,000.00. Thus, complainant paid an additional amount of P6,750.00 corresponding the additional 5 square meter lot to complete the 125 square meter lot, which is allegedly the true and genuine agreement of the parties.
The parties likewise agreed that upon full payment of the purchase price, Eastland is obliged to execute a Deed of Absolute Sale in favor of the complainant, free from any liens and encumbrances, to wit:
"4. DEED OF SALE. Upon complete payment by the PURCHASER of all obligation herein stipulated, the OWNER agrees to execute a final deed of sale in favor of the PURCHASER free from liens and encumbrances whatsoever except those imposed herein and by law." (Italics Supplied)
Listed below are the payments made by the complainant for the subject lot to wit:
(Receipt lost) P5,000.00 Reservation
May 17, 1996 48,600.00 O.R. No. 0855 D/P
August 01, 1996 6,109.38 O.R. No. 0906
September 16, 1996 5,995.57 O.R. No. 0915
October 5, 1996 5,995.57 O.R. No. 0925
December 16, 1996 105,228.48 O.R. No. 0949
July 10, 1998 6,750.00 O.R. No. 0505
Having more than fully paid the agreed contract price, complainant demanded from Eastland copy of the title covering the subject property. However, Eastland failed to heed the demand.
Worse, complainant discovered that Eastland concealed from the buyers the fact that the lots they are offering for sale covered by TCT No. T-82217 constituting the Evergreen Anilao Estate has been previously mortgaged in favor of Bangko Silangan Development Bank, which later on became the Orient Commercial Banking Corporation (hereinafter Orient Bank), through a Real Estate Mortgage on September 8, 1994, to secure a loan amounting to
P2,000,000.00. Said mortgage was duly registered and annotated at the back of TCT No. T-82217.
On October 17, 1994, Eastland caused the subdivision of TCT No. T-82217 into 173 subdivision lots, one of which is the lot subject matter of the instant case.
Records reveal that it was only on September 15, 1998 that Evergreen Anilao Project was issued a CR/LS by this Board. Said Project was registered pursuant to Section 21 of Batas Pambansa Blg. 220 and under the said License, each lot should be sold only at a maximum selling price of
On October 14, 1998, Orient Bank closed shop and was placed under receivership by respondent Philippine Deposit Insurance Corporation (PDIC for brevity) by virtue of Resolution No. 1427 issued by the Monetary Board of the Bangko Sentral ng Pilipinas. Respondent PDIC took over the assets and affairs of the closed bank, including the subject title.
On several occasions, complainant demanded from Eastland the execution and delivery of the Deed of Sale and Transfer Certificate of Title covering the subject lot, unfortunately it fell on deaf ears. Hence, the instant case.
In its answer, Eastland claims that the title was not mortgaged with PDIC but it was only pledged to the latter. Eastland wanted to impress this Office that inasmuch as the title was merely pledged with the Bank, thus it is exempted from the coverage of P.D. 957 specifically Section 18. Eastland went on to state that, what was proscribed by law was mortgage on the land not on the title of the land.
Moreover, Eastland claims that it cannot effect a valid and legal transfer because the Owner's Duplicate Copy is in the possession of Orient Commercial Banking Corporation, which by reason of closure the title was (sic) subsequently went into the possession of PDIC. Hence, Eastland reiterates that it cannot be faulted for non-delivery of the title.
For its part, PDIC interposed the following defenses; that complainant is constructively notified of the duly registered Real Estate Mortgage over the parcel of land covered by TCT No. T-82217 between respondent Eastland and Orient Bank as security for the former's
P2,000,000.00 loan; that complainant must acknowledge and respect the duly registered encumbrance in favor of respondent Orient Bank over TCT No. T-82217 which was carried over to the subdivided titles; that at the time Eastland executed the mortgage over the subject lot, it is not yet covered by P.D. 957, as would require the prior written approval of the HLURB.3
The complaint for Specific Performance, Delivery of Title and Damages was filed before the Regional Office No. IV of the Housing and Land Use Regulatory Board (HLURB) on 5 March 2001 by respondent Benedicta Mortel, docketed as HLURB Case No. RIV6-030501-1534. It impleaded petitioner Eastland Construction & Development Corporation (Eastland), represented by its President, Imelda P. De los Santos, and Arturo M. Garcia, and the Philippine Deposit Insurance Corporation (PDIC) as respondents.
In a decision dated 21 November 2002, Atty. Raymundo A. Foronda, Housing and Land Use Arbiter, disposed of the case as follows:
1. Declaring as null and void the Real Estate Mortgage constituted over Lot 9, Block 2 of the Evergreen Anilao Estate located in Mabini, Batangas, entered into between Eastland Construction and Development Corporation and Orient Commercial Banking Corporation;
2. Ordering respondents to jointly and severally, execute and deliver to complainant the Deed of Absolute Sale over the aforecited property;
3. Ordering respondents to jointly and severally, deliver the Transfer Certificate of Title covering the subject lot, free from liens and encumbrances, within fifteen (15) days from finality of the Decision;
4. Ordering respondents to jointly and severally turn over to the complainant peacefully the possession of the subject lot;
5. Ordering respondents to jointly and severally pay complainant the following:
A. the sum of P20,000.00 as moral damages;
b. the sum of P20,000.00 as exemplary damages;
c. the sum of P20,000.00 as attorney's fees and cost of suit;
6. Ordering respondents to jointly and severally pay this Board the sum of P40,000.00 for violation of Sections 4, 5, 18 & 25 of P.D. 957 and the provision of B.P. 220 for selling beyond the maximum selling price.4
The Housing and Land Use Arbiter ruled that respondent's full payment of the contract price appearing in the Contract to Sell justifies the execution of the Deed of Absolute Sale, the transfer in the latter's name of the title covering the subject property, free from liens and encumbrances, and its eventual turnover of the physical possession to her. He brushed aside Eastland's defense that it could not execute a Deed of Absolute Sale and/ or deliver the title in respondent's name because the subject lot, together with other lots in the same subdivision, was mortgaged to Orient Commercial Banking Corporation (Orient Bank). He explained that Eastland, as developer/owner of the project, was obligated to guarantee that the lots it is offering for sale were free from liens and encumbrances. He said that under Presidential Decree No. 957, the seller, if the buyer had already made full payment of the lot or unit, had six months from the time of the issuance of the title to the buyer within which to redeem the title. He disclosed that Eastland's attempt to deny the existence of a mortgage over the titles of the lots being sold claiming that same were merely pledged was debunked by PDIC's admission that the titles were indeed mortgaged. Thus, he held that Eastland concealed from its buyers the fact of mortgage by not showing a copy of Transfer Certificate of Title (TCT) No. T-82217 and in refusing to hand over copies of titles over the subdivided lots. He added that Eastland's failure to inform respondent of the mortgage likewise bespeaks of concealment because under Section 18 of Presidential Decree No. 957, the latter has the option to pay the installment for the lot or unit directly to the mortgagee who shall apply the payments to the corresponding mortgage indebtedness secured by the particular lot or unit being paid for to enable said buyer to obtain title over the lot or unit promptly after full payment. This concealment, he ruled, constitutes fraud and unsound real estate business practice. Moreover, he declared that Eastland should also be liable for its pre-selling activities inasmuch as the subject lot was sold to respondent approximately two years before the License to Sell for the subdivision project was issued by the HLURB on 15 September 1998.
As regards the defenses raised by PDIC, the Housing and Land Use Arbiter ignored them stating that since the mortgagee bank had at its disposal vast resources with which it could adequately protect its loan activities, it is presumed to have conducted the usual "due diligence" in checking and ascertaining the actual status, condition, utilization and occupation of the property offered as collateral.
The decision was appealed by PDIC and Orient Bank to the HLURB Board of Commissioners via Petition for Review praying that the same be set aside and/or declared null and void as against them.5 It was docketed as REM-A-030304-0074. Respondent filed her opposition.6
In a decision dated 16 October 2003, the HLURB Board of Commissioners dismissed the petition and affirmed the decision being assailed.7 On 5 December 2003, PDIC and Orient Bank filed a Notice of Appeal manifesting their intention to appeal the decision before the Office of the President.8 The case was docketed as OP Case No. 03-K-657.
On 22 March 2004, the Office of the President, through Presidential Assistant Manuel C. Domingo, rendered its decision dismissing the appeal and affirming the decision being appealed.9 Eastland filed a motion for reconsideration which was denied in an order dated 4 June 2004.10
Pursuant to Rule 43 of the 1997 Rules of Civil Procedure, Eastland appealed the decision of the Office of the President to the Court of Appeals via Petition for Review .11 The Court of Appeals dismissed the same for Eastland's failure to append material portions of the record and other supporting papers as well as the Certificate of Non-Forum Shopping.12 The motion for reconsideration filed by Eastland was denied in a resolution dated 11 October 2004.13
Hence, this appeal.
Petitioner advances the following reasons for the allowance of the petition:
THE HONORABLE COURT OF APPEALS GRIEVOUSLY COMMITTED A REVERSIBLE ERROR WHEN IT DISMISSED THE PETITION FOR REVIEW ON MERE TECHNICAL GROUND WHICH IS FROWN[ED] UPON IN THIS JURISDICTION.
THE COURT OF APPEALS GRIEVOUSLY ERRED WHEN IT DELIBERATELY IGNORED THE MERITS OF THE PETITION FOR REVIEW.14
On the first assigned error, petitioner argues that while it is desirable that the Rules of Court be faithfully and even meticulously observed, courts should not be so strict about procedural lapses that do not really impair the proper administration of justice. If the rules are intended to insure the orderly conduct of litigation, it is because of higher objective they seek, which is the protection of the substantive rights of the parties. It added that while it inadvertently failed to attach the Verification and Certification against Non-Forum Shopping, including the Secretary's Certificate, the fact remains that it has satisfactorily explained in its motion for reconsideration the reason for its failure to append said documents from which the Court of Appeals could validly rule on the merits of the petition.
Petitioner maintains that the Court of Appeals should not have deliberately ignored the merits of the case. It contends that it is not guilty of fraud because respondent had constructive notice of the real estate mortgage since the same is inscribed at the dorsal part of the title of the subject lot. Having knowledge that the lot was subjected to a mortgage, respondent is bound thereby and should respect the same. It adds that there being no fraud or bad faith on its part, the award of moral and exemplary damages, including other litigation expenses, is not warranted.
In her comment dated 14 February 2005, respondent asked that the instant petition be dismissed on the following grounds (1) petitioner did not appeal the decision of the HLURB Arbiter, thereby rendering the said decision final and executory; (2) the decision of the Court of Appeals must be respected and must remain undisturbed; (3) petitioner failed to show any prima facie proof that the HLURB Arbiter, the HLURB Board of Commissioners, the Office of the President, and the Court of Appeals committed errors of fact or law that would warrant the reversal or modification of the orders sought to be nullified; and (4) petitioner is guilty of fraud in dealing with respondent and other buyers.15
In its Reply,16 dated 6 May 2005, petitioner asserts that the resolution of the Court of Appeals should be reversed and set aside, and that substantial justice must not be sacrificed in the altar of technicalities and that procedural rules must not be made a deterrent to the ends of justice.
As required, the parties filed their respective memoranda.17
The instant petition is DENIED.
Verily, in numerous occasions, this Court has relaxed the rigid application of the rules to afford the parties the opportunity to fully ventilate their cases on the merits. This is in line with the time-honored principle that cases should be decided only after giving all parties the chance to argue their causes and defenses. Technicality and procedural imperfection should thus not serve as basis of decisions.18 Technicalities should never be used to defeat the substantive rights of the other party.19 Every party-litigant must be afforded the amplest opportunity for the proper and just determination of his cause, free from the constraints of technicalities.20 In that way, the ends of justice would be better served.21 For, indeed, the general objective of procedure is to facilitate the application of justice to the rival claims of contending parties, bearing always in mind that procedure is not to hinder but to promote the administration of justice.22
However, such liberality in the application of rules of procedure may not be invoked if it will result in the wanton disregard of the rules or cause needless delay in the administration of justice. It is equally settled that, save for the most persuasive of reasons, strict compliance is enjoined to facilitate the orderly administration of justice.23
In the instant case, petitioner's appeal with the Court of Appeals was dismissed for failure to attach portions of the record and other supporting papers as well as the Certificate of Non-Forum Shopping. Its motion for reconsideration was denied notwithstanding that it appended all the required documents.
It is settled that the requirement to file a certificate of non-forum shopping is mandatory and that the failure to comply with this requirement cannot be excused. The certification is a peculiar and personal responsibility of the party, an assurance given to the court or other tribunal that there are no other pending cases involving basically the same parties, issues and causes of action. Hence, the certification must be accomplished by the party himself because he has actual knowledge of whether or not he has initiated similar actions or proceedings in different courts or tribunals.24
Section 7 of Rule 43 of the Rules of Civil Procedure states that failure to comply with any of the requirements regarding the payment of the docket and other lawful fees, the deposit for costs, proof of service of the petition, and the contents25 of the documents which should accompany the petition shall be sufficient ground for the dismissal thereof.
This Court is not unmindful that in several cases26 we considered a flawed certificate of non-forum shopping as substantial compliance when there are circumstances or compelling reasons making the strict application of the rule clearly unwarranted. The nonfiling of the certificate notwithstanding, the Court may, for compelling reason, take cognizance of a petition.
In the case before us, there is no substantial compliance to speak of because no certificate of non-forum shopping was appended when the Petition for Review was filed with the Court of Appeals. The subsequent submission of said certificate on motion for reconsideration will not cure said defect. The rule against forum shopping and the necessity of a certification of non-forum shopping are basic requirements in remedial law. Failure to comply with them constitutes gross negligence.27
Neither is there any compelling reason that would make us relax the rigid application of the rules. On the contrary, there is one compelling reason that justifies the affirmance of the dismissal of the petition. This reason is: the decision of the Housing and Land Use Arbiter, as to petitioner, had long been final and executory.
Section 2, Rule XI and Section 1, Rule XII of the 1996 HLRB Rules of Procedure provide:
x x x x
Section 2. Finality of Decision. The decision shall become final and executory after thirty (30) calendar days from receipt of a copy thereof by the parties concerned, and no Petition for Review is filed within the said period. Thereafter, the same shall be entered in the Book of Judgments which shall be maintained by the Board in accordance with Rule XIX hereof.
Petition for Review
Section 1. Petition for Review. The aggrieved party on any legal ground and upon payment of the review fee, may file with the Regional Office a verified Petition for Review of the arbiter's decision within thirty (30) calendar days from receipt thereof. Copy of such petition shall be furnished the other party and the Board of Commissioners. No motion for reconsideration of or mere notice of Petition for Review from the decision shall be entertained.
Within ten (10) calendar days from receipt of petition, the arbiter or Regional Officer shall elevate the records to the Board of Commissioners together with the summary of proceedings before the arbiter.
As pointed out by respondent, petitioner did not appeal the decision of the Housing and Land Use Arbiter to the HLURB Board of Commissioners. As borne by the records, only PDIC and Orient Bank appealed to the HLURB Board of Commissioners. There being no Petition for Review filed by petitioner before the HLURB Board of Commissioners within thirty (30) calendar days after receiving a copy28 of the decision of the Housing and Land Use Arbiter, the latter's decision as regards the former became final and executory.
Petitioner tried to pull a fast one when it filed a motion for reconsideration from the decision of the Office of the President that affirmed the decision of the HLURB sustaining the decision of the Housing and Land Use Arbiter. It tried to make it appear that it still had the right to appeal the decision of the Office of the President even if it did not, in the first instance, appeal the decision of the Housing and Land Use Arbiter. Petitioner could have gotten away with such deception but, unfortunately, it was stopped dead in its tracks when the Court of Appeals dismissed its Petition for Review for failure to append, among other things, a certificate of non-forum shopping.
Inasmuch as the decision of the Housing and Land Use Arbiter had long been final and executory as regards petitioner, it can no longer be altered or modified. Nothing is more settled in law than that when a judgment becomes final and executory it becomes immutable and unalterable. The same may no longer be modified in any respect, even if the modification is meant to correct what is perceived to be an erroneous conclusion of fact or law, and whether made by the highest court of the land. The reason is grounded on the fundamental considerations of public policy and sound practice that, at the risk of occasional error, the judgments or orders of courts (or quasi-judicial bodies, as in this case) must be final at some definite date fixed by law.29 At any rate, we rule that the findings of the Housing and Land Use Arbiter were duly substantiated. It has been duly established that petitioner failed to perform its obligation in the Contract to Sell. Despite full payment by respondent, it did not redeem and deliver within six months the title of the subject lot that respondent paid for in violation of its License to Sell30 as well as Section 2531 of Presidential Decree No. 957. We likewise agree that petitioner acted fraudulently when it concealed the fact of mortgage from respondent.
Time and again, it has been held that the right to appeal is not a natural right or a part of due process, but merely a statutory privilege and may be exercised only in the manner and in accordance with the provisions of the law. The party who seeks to avail of the same must comply with the requirements of the rules, failing in which the right to appeal is lost.32 Having failed to comply with the requirements set forth in the rules, petitioner's appeal was appropriately dismissed by the Court of Appeals.
WHEREFORE, for lack of merit, the petition is DENIED. Costs against petitioner.
1 CA rollo, p. 32; Penned by Associate Justice Remedios A. Salazar-Fernando with Presiding Justice Cancio C. Garcia (now Associate Justice of the Supreme Court) and Associate Justice Hakim S. Abdulwahid, concurring.
2 CA rollo, p. 111.
3 Records, pp. 178-182.
4 Id., pp. 173-174.
5 Id., pp. 205-228.
6 Id., pp. 270-288.
7 Id., pp. 298-300.
8 Id., pp. 302-305.
9 Id., pp. 308-312.
10 Id., p. 306.
11 CA rollo, pp. 6-23.
12 Id., p. 32.
13 Id., pp. 111-113.
14 Rollo, p. 18.
15 Id., pp. 137-166.
16 Id., pp. 209-218.
17 Id., pp. 229-244, 246-315.
18 Crystal Shipping, Inc. v. Natividad, G.R. No. 154798, 20 October 2005.
19 Dalton-Reyes v. Court of Appelas, G.R. No. 149580, 16 March 2005, 453 SCRA 498, 508.
20 PAGCOR v. Angara, G.R. No. 142937, 15 November 2005.
21 Heavylift Manila, Inc. v. Court of Appeals, G.R. No. 154410, 20 October 2005.
22 Asian Spirit Airlines (Airline Employees Cooperative) v. Bautista, G.R. No. 164668, 14 February 2005, 451 SCRA 294, 301.
23 El Reyno Homes, Inc. v. Ong, 445 Phil. 610, 618 (2003).
24 Expertravel & Tours, Inc v. Court of Appeals, G.R. No. 152392, 26 May 2005, 459 SCRA 147, 157.
25 SEC. 6. Contents of the petition. - The Petition for Review shall (a) state the full names of the parties to the case, without impleading the court or agencies either as petitioners or respondents; (b) contain a concise statement of the facts and issues involved and the grounds relied upon for the review; (c) be accompanied by a clearly legible duplicate original or a certified true copy of the award, judgment, final order or resolution appealed from, together with certified true copies of such material portions of the record referred to therein and other supporting papers; and (d) contain a sworn certification against forum shopping as provided in the last paragraph of section 2, Rule 42. The petition shall state the specific material dates showing that it was filed within the period fixed herein. (Section 6, Rule 43, Rules of Court.)
26 Far Eastern Shipping Company v. Court of Appeals, 357 Phil. 703, 720 (1998); Damasco v. National Labor Relations Commission, G.R. No. 115755, 4 December 2000, 346 SCRA 714, 721; Cavile v. Heirs of Cavile, 448 Phil. 302, 311 (2003); Sy Chin v. Court of Appeals, 399 Phil. 442, 454 (2000).
27 T Boli Agro-Industrial Development, Inc. v. Atty. Solilapsi, 442 Phil. 499, 515 (2002).
28 Records, p. 183.
29 Coca-Cola Bottlers Philippines, Inc., Sales Force Union-PTGWO-BALAIS v. Coca-Cola Bottlers, Philippines, Inc., G.R. No. 155651, 28 July 2005, 464 SCRA 507, 517.
30 Condition No. 5. Deliver title to fully paid buyers or, if mortgaged, redeem and deliver the same within six months from full payment. (Rollo, p. 141).
31 Sec. 25. Issuance of Title. - The owner or developer shall deliver the title of the lot or unit to the buyer upon full payment of the lot or unit. No fee, except those required for the registration of the deed of sale in the Registry of Deeds, shall be collected for the issuance of such title. In the event a mortgage over the lot or unit is outstanding at the time of the issuance of the title to the buyer, the owner or developer shall redeem the mortgage or the corresponding portion thereof within six months from such issuance in order that the title over any fully paid lot or unit may be secured and delivered to the buyer in accordance herewith.
32 Stolt-Nielsen Marine Services, Inc. v. National Labor Relations Commission, G.R. No. 147623, 13 December 2005.