Philippine Supreme Court Resolutions

G.R. No. 181427 (Jomil Enterprises, Inc. v. Spouses Gloria and Julian C. Cargullo).

RESOLUTION

Petitioner Jomil Enterprises, Inc. (Jomil) is a realty firm engaged in the sale of residential lots. Sometime in May 1988 Jomil offered to sell a property in Cavite to the respondent spouses Gloria and Julian Cargullo through its agent Prime Asset Realty Marketing (Prime Asset). The spouses Cargullo then executed a Reservation Agreement, stating therein the amount of P6,000.00 as reservation fee for each of the three lots. The spouses likewise paid P38,010.00 as downpayment for the property.

Unfortunately, however, Prime Asset ceased operating that same year. So the spouses sought to enforce the Reservation Agreement directly with Jomil, but the realty firm ignored their request. After several demand letters were left unheeded, the spouses filed a complaint before the Housing and Land Use Regulatory Board (HLURB). Despite summons, Jomil failed to file an answer or a counter-affidavit. It also failed to appear before the HLURB during the preliminary hearing. Thus, the spouses moved to declare Jomil in default.

On July 15, 1993 the HLURB Arbiter rendered a judgment by default in favor of the spouses. Jomil then filed a Motion to Set Aside Judgment by Default. The HLURB issued an Order on October 26, 1993 denying Jomil's motion. When Jomil did not appeal, the spouses Cargullo filed a Motion for Execution of the judgment by default. On April 14, 1994 the HLURB issued a Writ of Execution. Jomil then filed a Petition for Review before the HLURB Board of Commissioners. The HLURB Board, however, affirmed the findings of the Arbiter on July 14, 1997. When the case was elevated to the Office of the President (OP), it reversed the findings of the HLURB. On March 24, 2004 the OP held that the HLURB did not acquire jurisdiction over Jomil because while the summons was addressed to the President of Jomil, a different person was the one who actually received it.

On October 30, 2007 the Court of Appeals (CA) reversed and set aside the Orders of the OP and reinstated the HLURB decision. Thus, the present petition.

The issues are whether Jomil should be declared in default and whether it should be made liable to the spouses Cargullo.

First. The CA correctly held that the HLURB Board and the OP should no longer have taken cognizance of the case because the HLURB Arbiter's judgment by default in favor of the spouses had already become final and executory as evidenced by a writ of execution. Litigation must end and terminate sometime and somewhere, and it is essential to an effective and efficient administration of justice that, once a judgment has become final, the winning party be not, through a mere subterfuge, deprived of the fruits of the verdict.^[1] Jomil contends that the summons was served on a certain Jhun Narvaes, who, as Jomil claims, is not its official, employee, or representative. With respect to the denial of its motion, Jomil alleges that it was not served a copy of the HLURB Order. But, as the CA ruled, this is highly suspicious because Jomil did not encounter a similar problem with the HLURB's judgment by default, which was sent to the same address of record. The presumption is that the delivery was made to a person in their office, who was duly authorized to receive papers for the corporation, in the absence of proof to the contrary.

Second. The Court also affirms the HLURB ruling that Prime Asset's taking flight after closing its business would not prevent the Spouses Cargullo from going after Jomil. Acting as a broker, Prime Asset's acts of representing Jomil's interests as the subdivision owner and entering into a Reservation Agreement with the spouses Cargullo over the subject properties were well within the scope of its authority. Hence, Jomil is bound and it must necessarily comply with its obligations with the spouses. cralaw

WHEREFORE, the Court DENIES the petition and AFFIRMS the Decision of the Court of Appeals, in CA-G.R. SP 84926 dated October 30, 2007. (Peralta, J., Acting Chairperson, per Special Order 1228 dated June 6, 2012; Villarama, Jr., J., Acting Member, in lieu of Justice Velasco, Jr., per Special Order 1229 dated June 6, 2012.)

SO ORDERED.

Very truly yours,

(Sgd.) LUCITA ABJELINA-SORIANO
Division Clerk of Court

Endnotes:

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^[1] Navarro v. Metropolitan Bank and Trust Company, G.R. Nos. 165697 and 166481, August 4, 2009, 595 SCRA 149, 159.