Title
De Leon vs. Asombrado-Llacuna
Case
G.R. No. 246127
Decision Date
Mar 2, 2022
Lourdes purchased property from Prosecor but never received the title. She sued PSB and Atty. De Leon, but the Supreme Court dismissed her complaint, citing lack of evidence linking PSB to Prosecor and futility of including dissolved Prosecor as a party.
property dispute
dismissal of complaint
delivery of title
A

Case Digest (G.R. No. 246127)

Facts:

  • Subject Property and Transaction History
    • The subject property (Lot 39, Block 4, Provident Village, Marikina City) was originally owned by Eusebio L. Lopez, Jr., as evidenced by Transfer Certificate of Title (TCT) No. 186004.
    • Provident Securities Corporation (Prosecor) developed the property under a subdivision project, and on July 5, 1983, Lourdes S. Asombrado-Llacuna purchased the lot from Prosecor.
    • A Deed of Absolute Sale was executed on May 27, 1986 by Prosecor (with representation by Romulo M. Dimayuga and Manolo B. Llacuna, Lourdes’ husband) in favor of Lourdes.
    • Despite full payment and the execution of the sale deed, Prosecor failed to deliver the title, leaving TCT No. 186004 still under Lopez’s name.
    • Subsequent developments include the dissolution of Prosecor, further complicating the title issue.
  • Mortgage Assignment and Involvement of Banking Institutions
    • On May 11, 1993, Provident Savings Bank (PSB), represented by Atty. Roberto F. De Leon in his capacity as President, executed an Assignment of Mortgage involving the subject property (still titled in Lopez’s name), assigning its rights to J.M. Tuason & Co., Inc.
    • Around the mid-1990s, Atty. De Leon resigned as President of PSB, and PSB was ultimately dissolved on June 30, 1996.
  • Discovery of Title Irregularity and Initial Demands
    • In February 2012, Lourdes obtained a certified true copy of TCT No. 186004 from the Registry of Deeds of Marikina City and discovered an annotation regarding the Assignment of Mortgage.
    • Without annotating an adverse claim on the title, Lourdes, to protect her rights, instructed her counsel to send demand letters on September 13 and 20, 2012 to Atty. De Leon, urging the delivery of the title within five days.
    • Atty. De Leon did not respond to these demand letters.
  • HLURB Proceedings and Subsequent Developments
    • On September 21, 2012, Lourdes filed a complaint before the Housing and Land Use Regulatory Board (HLURB) against Atty. De Leon and PSB, seeking:
      • Delivery of TCT No. 186004 in her favor;
      • Payment of moral damages of ₱500,000;
      • Attorney’s fees amounting to ₱200,000; and
      • Payment of court costs.
    • Atty. De Leon, filing an answer on October 30, 2012, requested the dismissal of the complaint on three main grounds:
      • Lack of jurisdiction of the HLURB over the subject matter;
      • Failure to state a cause of action (arguing that he and PSB were not the real parties-in-interest); and
      • Prescription and laches, given the lapse of over 26 years since the Deed of Absolute Sale was executed.
    • Both parties submitted their respective position papers to advocate their arguments.
    • On March 1, 2016, the HLURB Arbiter rendered a decision dismissing the complaint because:
      • The complaint was not filed against an indispensable party – specifically, Prosecor was not impleaded; and
      • There was insufficient evidence to prove that PSB was the successor-in-interest of Prosecor.
    • Lourdes filed a Verified Petition for Review before the HLURB Board of Commissioners, arguing that PSB was indeed the successor-in-interest, basing part of her claim on her husband’s insider information regarding the relationship between Prosecor and PSB.
    • On June 16, 2016, the HLURB Board of Commissioners denied Lourdes’ petition for review.
  • Appeal to the Court of Appeals
    • Undeterred, Lourdes filed a petition for review under Rule 43 before the Court of Appeals (CA), raising these issues:
      • Whether the HLURB Board of Commissioners erred in affirming the HLURB Arbiter’s dismissal;
      • Whether the dismissal due to failure to implead an indispensable party was appropriate; and
      • Whether respondents (Atty. De Leon and PSB) could be held liable for the delivery of the title and damages.
    • On June 19, 2017, Atty. De Leon filed his comment/opposition, arguing that:
      • Lourdes failed to exhaust all available administrative remedies, and the HLURB’s dismissal was proper;
      • The HLURB Board did not commit reversible error regarding the non-joinder of an indispensable party; and
      • He was entitled to recover damages for the baseless complaint filed by Lourdes.
    • The CA, on October 15, 2018, set aside the HLURB Board’s decision and remanded the case to the HLURB Expanded National Capital Region Field Office for the inclusion of Prosecor as an indispensable party-defendant, noting that the non-joinder of an indispensable party is curable.
    • Atty. De Leon’s motion for reconsideration was denied on March 12, 2019, for reasons including the application of exceptions to the doctrine of exhaustion of administrative remedies.
  • Petition for Review on Certiorari before the Supreme Court
    • On May 14, 2019, Atty. De Leon filed the instant petition for review on certiorari, raising two principal issues:
      • That the CA improperly disregarded the doctrine of exhaustion of administrative remedies by not dismissing the petition on its grounds;
      • That by setting aside the HLURB decision, the CA committed reversible error regarding the dismissal of the complaint based on non-impleader of an indispensable party.
    • In his petition, Atty. De Leon further contended that:
      • Prosecor (the actual seller and obligor for the delivery of the title) should have been impleaded;
      • There was no privity of contract between Lourdes and PSB, which along with the subsequent dissolution of both Prosecor and PSB, negated any cause of action against him; and
      • The cause of action had prescribed under Article 1144 of the Civil Code due to the long lapse in time.
  • Positions of the Parties
    • In her comment dated October 24, 2019, Lourdes argued:
      • The doctrine of exhaustion of administrative remedies was inapplicable since the issue was primarily legal with no adequate alternative remedy;
      • The CA did not err in setting aside the HLURB decisions since the failure to implead an indispensable party does not automatically mandate a dismissal; and
      • The issue of prescription and laches was not properly raised before the CA and should be addressed in appropriate proceedings.

Issues:

  • Whether the HLURB properly dismissed the complaint on the ground of non-joinder of an indispensable party, namely the failure to implead Prosecor (the seller/developer of the property).
  • Whether the doctrine of exhaustion of administrative remedies should apply strictly in this case, or whether exceptions (particularly in cases involving purely legal issues) justify bypassing it.
  • Whether Atty. De Leon and PSB can be held liable for the non-delivery of the title, given that:
    • There is no privity of contract between Lourdes and PSB;
    • PSB (and by extension, Atty. De Leon) are not the real parties-in-interest; and
    • Both Prosecor and PSB have been dissolved, raising questions on their capacity to be joined as parties.
  • Whether the CA erred in remanding the case for the inclusion of an indispensable party rather than affirming the dismissal of the HLURB action.

Ruling:

  • (Subscriber-Only)

Ratio:

  • (Subscriber-Only)

Doctrine:

  • (Subscriber-Only)
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