February 2011 - Philippine Supreme Court Resolutions
Philippine Supreme Court Resolutions
[G.R. No. 182447 : February 23, 2011]
MOUNTAINVIEW EQUITIES AND DEVELOPMENT CORPORATION, THELMO T. ESCALONA, ADOLFO L. ESCALONA AND ALEX ESCALONA V. HOUSE REALTY CORPORATION
G.R. No. 182447 (Mountainview Equities and Development Corporation, Thelmo T. Escalona, Adolfo L. Escalona and Alex Escalona v. House Realty Corporation). - Respondent House Realty Corporation bought a condominium unit from petitioner Mountain view Equities and Development Corporation (MVEDC) in one of the latter's real estate development projects in Baguio City in 1989. Respondent paid the reservation fee and, subsequently, the full down payment of P140,345.00. The parties then executed a Contract to Buy and Sell on June 19, 1989. The contract provided, among other things, that the unit would be completed and delivered to respondent on or before August 30, 1990.
On June 21, 1989, respondent paid petitioner MVEDC P246,570.72, representing installment payments for the first 12 months of the contract. By November 1989, respondent informed petitioner MVEDC that it was availing of its right to suspend payments because construction on the project was proceeding slowly. When petitioner MVEDC informed respondent that the project was to be completed in April 1991, the latter, as a sign of good faith, authorized the former to deposit the checks for payment of the monthly installments. On July 16, 1990, an earthquake struck Baguio City. Petitioner MVEDC informed respondent of possible delays in the completion of the project. Later, petitioner MVEDC informed respondent that the Housing and Land Use Regulatory Board (HLURB) had granted its request for extension to complete the project until December 31, 1991. Respondent then issued checks covering monthly installments until July 10, 1992.
However, by September 1993, and after several extensions approved by the HLURB, petitioner MVEDC was ordered to pay a line for violation of Presidential Decree No. 957, to complete the project immediately, and to cease and desist from selling and collecting monthly amortizations until the HLURB lifts the order. Eventually, the order was lifted and petitioner was granted another extension to complete the project until May 30, 1994.
After almost five years from the approval of the last extension, respondent inquired from the HLURB and was told that the suspension of license to sell and (he cease and desist order were still in effect.
Respondent filed a complaint for rescission of contract and refund against petitioners before the HLURB. Petitioners failed to file an Answer and were declared in default. On August 27, 2001, the HLURB issued a Judgment by Default declaring the Contract to Buy and Sell executed by the parties rescinded. It ordered petitioners lo refund respondent the amount of P793,836.44 plus interest at 12% per annum until fully paid, attorney's fees and cost of the suit.
Aggrieved, petitioners filed a petition for relief from judgment before the HLURB. It argued that the HLURB did not acquire jurisdiction over it since it was not validly notified of the proceedings through the proper service of summons. This omission, it claimed, amounted to extrinsic or collateral fraud, depriving it of a fair trial.
In an Order dated March 20, 2002, the HLURB dismissed the petition. It held that, under Rule V, Section 3 of the 1996 Revised Rules of Procedure of the HLURB, the proper remedy of a party declared in default who, for good cause, was unable to file a motion to lift the order of default, and against whom a judgment by default has been rendered, is to file a petition for review with the Board. With petitioners' failure to file the petition for review within 30 days from receipt of the decision, the same had become final and executory, the HLURB said. It also held that a petition for relief from judgment is not a remedy available under the HLURB Rules of Procedure, and that Rule 38 of the Rules of Civil Procedure was not applicable to this case because there is no provision in the former that the latter shall apply suppletorily.
Petitioners appealed the HLURB Order to the Office of the President (OP). The OP, in an Order dated July 1, 2002, denied due course to the petition for non-exhaustion of administrative remedies. The OP noted that petitioners were questioning the order of an arbiter, which is properly appealable to the Board of Commissioners. Only decisions rendered by the Board of Commissioners may be appealed to the OP, it said. Petitioners' motion for reconsideration was subsequently denied.
Petitioners elevated the case to the Court of Appeals (CA) on a petition for review. It argued that the doctrine of exhaustion of administrative remedies is not applicable to the OP, and even assuming that it does, this case falls under the recognized exceptions.
The CA denied the petition for review and affirmed the OP Order. The CA upheld the HLURB's ruling that petitioners did not follow the proper mode of appeal. It held that a petition for relief of judgment cannot be resorted to in proceedings before the HLURB. The CA averred that, under the HLURB Rules, a party declared in default is allowed to file a petition for review of the judgment in default before the Board of Commissioners and therein may raise whatever defenses he may have against the judgment.
Petitioners filed a motion for reconsideration, which the CA denied.
Petitioners are now before this Court. They raise anew their arguments that the omission of the HLURB to serve them summons amounted to extrinsic or collateral fraud, hence, they could avail of the remedy of a petition for relief from judgment. Petitioners also argue that they correctly invoked the suppletory character of the Rules of Court, in view of the absence of any similar remedy to a litigant deprived of fair hearing by reason of fraud. Moreover, there is no provision in the HLURB Rules of Procedure that states that a petition for relief of judgment is a prohibited pleading.
Petitioners further argue that the Supreme Court has not promulgated any rule prohibiting a party who has been deprived of his day in court or in any quasi-judicial body from filing a petition for relief of judgment under Rule 38 of the Rules of Court.
Petitioners also insist that they appealed the HLURB order to a quasi-judicial body, i.e., the OP, not the regular courts, and hence, the doctrine of exhaustion of administrative remedies does not apply. Likewise, even assuming that the doctrine does apply to the OP, it is settled that the same does not apply when due process of law is clearly violated, petitioners aver.
The petition is denied for lack of merit.
No reversible error can be attributed to the CA for denying petitioners' petition for review.
As the HLURB itself pointed out, there is no provision in the 1996 Rules of Procedure that gives the Rules of Civil Procedure suppletory application. Even if it did, however, the 1996 HLURB Revised Rules of Procedure explicitly provides the remedy for a party adversely affected by a judgment of default, to wit:
Sec. 3 Review of Judgment of Default. - If the party declared in default who for good cause was unable to file a motion to lift the order of default, and a judgment was consequently rendered, he may still file a petition for review of the judgment by default with the board in accordance with Rule XII of these Rules and whatever defenses he has against the complaint may still be raised in said petition.
The power of the Supreme Court to promulgate rules extends only to the courts. The rules promulgated by this Court cannot bind the other agencies not within the authority of the court, unless some other law or rule makes it specifically so applicable.
The HLURB is the sole regulatory body for housing and land development. It has established rules of procedure in the adjudication of the cases before it.[1] Thus, the petitioners should have invoked remedies available within the HLURB's rules of procedure and not those provided in the Rules of Court.
Petitioners' failure to follow the proper procedure before the HLURB did not toll the period for filing the petition for review. Thus, their failure to avail of the proper remedy within the reglementary period has rendered the assailed Judgment by Default of the HLURB final and executory.
WHEREFORE, the foregoing premised considered, the Petition for Review is DENIED.
SO ORDERED.
Very truly yours,
MA. LUISA L. LAUREA
Clerk of Court
By:
(Sgd.) TERESITA AQUINO TUAZON
Asst. Clerk of Court
Endnotes:
[1] Teotico v. Baer, G.R. No. 147464, June 8, 2006, 490 SCRA 279, 284.
