G.R. No. 154684 - Francel Realty Corp. vs. Sycip

In November 1989, Francel Realty Corporation (petitioner) and Ricardo T. Sycip (respondent) entered into a contract to sell a house and lot covered by TCT No. T-281788.
Upon execution of the contract, respondent made a down payment of P119,700.00, which was treated as equivalent to monthly rentals at a rate of P2,686.00 per month.
On March 16, 1990, the townhouse was transferred under TCT No. T-281788 in the name of respondent, making him the registered owner.

Despite the title transfer, respondent refused to pay the remaining balance of P250,000.00.
The down payment was applied to the monthly rental obligations starting in December 1989, thereby exhausting the credited amount.
Petitioner claimed that, following several demands—including a formal demand dated December 12, 1991 by petitioner’s counsel—respondent failed to reconvey the property back to petitioner.
Petitioner alleged actual damages comprising repair costs of at least P100,000.00, along with moral and exemplary damages, attorney’s fees, and litigation expenses.

Petitioner initially filed an illegal detainer case against respondent, docketed as Civil Case No. 1310 before the Municipal Trial Court (MTC) of Bacoor, Cavite, which was dismissed by the court.
Respondent moved to dismiss the instant case on the ground of lack of jurisdiction, asserting that:

The complaint raised issues that fall under the exclusive competence of the Housing and Land Use Regulatory Board (HLURB) because it involved rights and obligations under PD 957.
There was another pending case before the HLURB involving the same townhouse, which dealt with unsound real estate business practices.

Despite respondent’s objections, petitioner proceeded with a suit for reconveyance and damages, which led to prolonged proceedings, including trial.

After the trial, the lower court, after conducting the proceedings and hearing all arguments, dismissed the case for lack of jurisdiction.
The Court of Appeals (CA) affirmed the dismissal, holding that:

The issues involved the determination of rights and obligations under PD 957, thereby falling within the exclusive jurisdiction of the HLURB.
The filing of the instant case by petitioner was viewed as an attempt to circumvent the law, given the existence of a pending HLURB action regarding unsound real estate practices.

Petitioner subsequently filed a Petition for Review on Certiorari assailing the CA decision and related resolution.

Whether a case that has undergone a full-blown trial can still be dismissed for lack of jurisdiction.
The petitioner argued that by actively participating in the trial, respondent’s repeated claim on lack of jurisdiction should be barred by the doctrine of estoppel by laches.

Whether the case could be dismissed despite the respondent’s failure to secure clearance from the HLURB—a requirement petitioner asserted under Section 23 of Rule VI of the Rules implementing PD 957—for stopping monthly rental payments.
Petitioner contended that without such HLURB clearance, the respondent’s suspension of payment was not legally justified.