G.R. No. 151821 - Bank of the Philippine Islands vs. ALS Management and Development Corporation

Case Summary (G.R. No. 151821)

Factual Background

The controversy began with a Deed of Sale executed on July 22, 1983 at Makati, Metro Manila between BPI Investment Corporation and ALS Management & Development Corp. The deed covered an unfurnished condominium unit, Unit E-4A of the Twin Towers Condominium, together with parking stalls G022 and G-63. A condominium title, Condominium Certificate of Title No. 4800, was later issued after the execution of the deed.

BPI Investment Corporation advanced P26,300.45 for expenses needed to obtain and register the condominium certificate of title in respondent’s name. The deed’s stipulation required the vendee (respondent) to pay expenses for the preparation and registration of the deed and all documents necessary for title issuance. After BPI Investment Corporation complied with its obligations, respondent allegedly failed and refused, despite demands, to reimburse the advanced registration-related expenses.

Respondent, in its Answer with Compulsory Counterclaim, asserted defenses and counterclaims. It alleged that BPI Investment Corporation “jacked-up or increased” the advances by including charges that, according to respondent, should not be collected, invoking Section 25 of Presidential Decree No. 957. Respondent likewise raised that BPI Investment Corporation made marketing representations through brochures and sales propaganda, including claims as to certain amenities, facilities, and improvements. Respondent further alleged that the seller promised delivery of the unit, completed and ready for occupancy, not later than December 31, 1981, but that the condominium unit delivered suffered from numerous defects and deficiencies. These included problems regarding the balcony walkway clearance, damaged anodized aluminum in doors and windows, cracked and improperly installed kitchen counter tops, unpainted partition surfaces and inaccessible maintenance due to fixed glass cover, non-installation of certain dividers and bar and cabinet units, missing toilet tiles, absence of a closed-circuit TV feature, and rainwater leaks.

Based on these alleged breaches, respondent sought affirmative reliefs. It prayed for correction of the deficiencies at petitioner’s expense, reimbursement of P40,000.00 for completion materials and labor, various sums representing unearned rental and interest connected to alleged late delivery, further claims for rental losses due to vacating by a lessee, attorney’s fees, and litigation costs.

Trial Court Proceedings

On February 6, 1990, the Regional Trial Court rendered judgment. It ordered respondent to pay petitioner P26,300.45 with legal interest from filing of the complaint until full payment, representing the expenses petitioner advanced for registration of the condominium title.

The trial court also granted respondent’s counterclaim in substantial part. It ordered petitioner to deliver, replace, or correct, at petitioner’s expense or through a licensed contractor, a detailed list of alleged defects. It also ordered petitioner to pay respondent P40,000.00 for reimbursement of completion materials and labor for identified bathroom and bar counter work, P136,608.75 as unearned income for a period of five months during which respondent allegedly had to suspend a lease contract, and P27,321.75 per month for twenty-one (21) months for alleged unearned income when the condominium unit remained vacant, all with legal interest from the filing of the counterclaim until payment was complete.

Appellate Court Ruling

Petitioner appealed. The Court of Appeals affirmed the trial court. The appellate court found no basis to disregard the trial court’s findings of fact. It held that while petitioner succeeded in proving its claim for registration-related advances, respondent likewise established a counterclaim entitling it to relief.

After denial of reconsideration, petitioner filed the present petition for review under Rule 45, challenging jurisdiction and the factual and damages awards.

The Parties’ Contentions in the Supreme Court

Petitioner raised three issues. First, it argued that the trial court lacked jurisdiction over respondent’s counterclaims, contending that the proper forum was the HLURB rather than the Regional Trial Court. Second, petitioner asserted that the Court of Appeals’ decision was grounded on misapprehension of facts and manifestly mistaken findings that warranted further review. Third, petitioner contended that the damages awards were conjectural and similarly required correction based on factual infirmities.

Jurisdiction and the HLURB’s Exclusive Competence

The Supreme Court addressed the jurisdiction question by tracing the statutory framework. Presidential Decree No. 957 had provided that the National Housing Authority (NHA) would have exclusive authority to regulate the real estate trade and business. Later, Presidential Decree No. 1344 expanded the agency’s exclusive jurisdiction, giving it power to hear and decide cases involving, among others, unsound real estate business practices, claims involving refund brought by subdivision or condominium buyers against project owners and developers, and cases involving specific performance of contractual and statutory obligations filed by buyers against owners, developers, dealers, brokers, or salesmen.

Functions of the NHA were transferred to the Human Settlements Regulatory Commission (HSRC) by Executive Order No. 648. Subsequently, Executive Order No. 90 transferred HSRC functions to the HLURB.

Applying prior rulings, the Court reiterated that HLURB’s jurisdiction over the types of cases enumerated in Section 1 of PD No. 1344 is exclusive. It had already ruled in related cases that the board had sole jurisdiction over specific performance claims and over refund claims, and that the board could award damages as part of the exclusive power conferred.

On this basis, the Court held that respondent’s counterclaims—seeking correction of condominium defects and damages as a consequence of alleged breach—fell within the scope of specific performance and damages encompassed by the buyer-protection scheme under Section 1 of PD No. 1344. The Supreme Court thus recognized that the counterclaim should have been within the HLURB’s exclusive competence.

Estoppel and Laches Against the Jurisdiction Objection

Despite recognizing HLURB’s exclusive jurisdiction over the counterclaims’ subject matter, the Supreme Court modified how the jurisdiction objection could be raised. It explained that while a decision rendered without jurisdiction is generally a total nullity, the Court has recognized exceptions when the party raising jurisdiction is barred by estoppel—including by laches.

The Court observed that petitioner proceeded to trial without timely raising the jurisdiction issue. It raised the question only after a judgment unfavorable to it. Specifically, although respondent filed its counterclaim on November 8, 1985, petitioner failed to contest jurisdiction then. It raised the issue only on May 27, 1991, when it filed its appellant’s brief before the Court of Appeals. The Court considered this delay to constitute estoppel by laches under the principle in Tijam v. Sibonghanoy, where the Court held that failure to raise the issue earlier bars later questioning.

The Court further invoked the policy against inconsistent postures. It cited the condemnation of “double-dealing” where a party voluntarily submits to a court’s jurisdiction, litigates to decision, and later attacks jurisdiction only after an adverse outcome.

Accordingly, even while petitioner’s argument reflected exclusive HLURB competence in principle, petitioner was barred from belatedly repudiating the RTC proceedings.

Review of Factual Findings and Damages

The Supreme Court then turned to the remaining assignments of error. It emphasized that factual findings of the trial court, as affirmed by the Court of Appeals, are generally binding and not disturbed on appeal, except when the findings do not conform to the evidence or the law. The Court undertook a meticulous examination and decided to modify only those awards that lacked sufficient evidentiary or legal support, while sustaining those supported by the record.

Warranties and Representations in the Brochure

The Court examined the brochure and sales propaganda used to induce the purchase. It noted that Section 19 of PD No. 957 provides that advertisements and brochures that reflect real facts and the developer’s promised facilities become part of enforceable sales warranties. The brochure had stated features and amenities the condominium units would provide, and respondent relied upon them in deciding to purchase.

Petitioner invoked a disclaimer stating that the stated particulars and visuals were meant to provide a general idea of the project and should not be relied on as statements of fact. The Court held that such disclaimer may properly apply to broad concept descriptions, such as the general claim about the project being “destined to reflect condominium living at its very best” and the design being the only one of its kind. However, it should not apply where the brochure promised specific features and amenities for each condominium unit. The Court found petitioner in breach for failing to deliver a promised closed-circuit TV monitor, among the items tied to the unit’s amenities.

Storage Facilities Not Supported by the Pleadings

While the Court affirmed correction for proven defects and certain breaches, it found error in one aspect of the trial court’s judgment regarding storage facilities. The trial court ordered petitioner to provide storage facilities on the ground floor. The Supreme Court ruled that the non-delivery of storage facilities was not alleged in respondent’s Answer with Counterclaim; therefore, the judgment granting that relief did not conform to the pleadings and the theory of the case tried.

The Court reaffirmed that a judgment must be supported by both the pleadings and the evidence and that iss

Case Syllabus (G.R. No. 151821)

Bank of the Philippine Islands, as Successor-in-Interest of BPI Investment Corporation (“BPI”) petitioned for review under Rule 45 of the Rules of Court to set aside the Court of Appeals (CA) November 24, 2000 Decision and January 9, 2002 Resolution in CA-GR CV No. 25781.
Als Management & Development Corp. (“ALS”) opposed the petition and defended the CA’s affirmance of the trial court’s awards.

Parties and Procedural Posture

BPI filed a complaint for a sum of money against ALS arising from a Deed of Sale of an unfurnished condominium unit.
ALS answered with a counterclaim seeking damages and correction of alleged condominium defects.
The trial court rendered judgment on February 6, 1990, ordering payment for registration expenses, correction of specified defects, and various damages.
The CA affirmed the trial court “in toto” and denied reconsideration.
The Supreme Court held that the petition was partly meritorious and modified the CA decision by deleting several awards and tempering others.

Key Factual Allegations

BPI alleged that on July 22, 1983, BPI and ALS executed a Deed of Sale of one (1) unfurnished condominium unit (Twin Towers Condominium) identified as Unit E-4A, together with parking stalls G022 and G-63.
BPI alleged that it advanced P26,300.45 for expenses for causing issuance and registration of the Condominium Certificate of Title No. 4800 in ALS’s name.
BPI alleged that under the deed, ALS was to pay the expenses for preparation and registration of the deed and all documents necessary for issuance of the condominium certificate of title.
BPI alleged that despite demands, ALS refused to pay the advances without valid reason.
ALS countered that BPI increased charges in a manner allegedly contrary to Section 25 of Presidential Decree No. 957, and that BPI violated representations it made through brochures and sales propaganda.
ALS relied on sales materials promising features and amenities and promised delivery by December 31, 1981.
ALS alleged multiple defects/deficiencies after purchase and sought correction, reimbursement, and damages.
The defects alleged included issues relating to balcony walkway clearance, damaged aluminum door and windows, kitchen miscuts and cracks, unpainted partition and maintenance access problems, missing varifold divider installation, toilets without tiles, absence of closed-circuit TV, and rainwater leaks.

Claims in Pleadings

BPI’s complaint sought recovery of P26,300.45 plus legal interest, grounded on the deed’s allocation of registration expenses to the vendee.
ALS’s counterclaim sought, among others, reimbursement for completion works it undertook (P40,000.00), unearned rental based on alleged late delivery, multiple categories of interest and rental-related damages, attorney’s fees, and litigation expenses.
ALS’s counterclaim framed relief around (a) specific performance to correct condominium defects and (b) damages linked to breach of representations and late/defective performance.

Statutory and Regulatory Framework

The Court discussed Presidential Decree No. 957 as the Subdivision and Condominium Buyers Protective Decree and emphasized that it vested regulatory authority over the real estate trade and business in the National Housing Authority (NHA).
Presidential Decree No. 1344 expanded NHA jurisdiction to include cases involving refund claims and specific performance filed by subdivision lot or condominium unit buyers against project owners, developers, dealers, brokers, or salesmen.
Executive Order No. 648 transferred regulatory functions of NHA to the Human Settlements Regulatory Commission (HSRC), including the authority to hear and decide unsound business practices, refund claims, and specific performance cases.
Executive Order No. 90 transferred HSRC functions to the Housing and Land Use Regulatory Board (HLURB), and the Court treated the HLURB’s jurisdiction as encompassing and exclusive for the enumerated matters.
The Court anchored the damages analysis on proof requirements for actual damages and on the availability of temperate damages when some pecuniary loss is established but the amount cannot be proved with certainty under Art. 2224 of the Civil Code.

Jurisdiction over Counterclaims

BPI argued that the HLURB, not the Regional Trial Court (RTC), had jurisdiction over ALS’s counterclaims.
The Court recognized that jurisdictional decisions rendered without jurisdiction are generally total nullities and may be attacked at any time, subject to exceptions.
The Court applied the doctrine that jurisdiction may be raised at any time only if it does not result in mockery of fair play.
The Court held that estoppel barred BPI from belatedly attacking the RTC’s jurisdiction after proceeding through trial.
The Court found that BPI proceeded with the trial and raised the jurisdictional issue only after an adverse judgment.
The Court also held that BPI was barred by estoppel by laches for failing to raise jurisdiction earlier when ALS filed the counterclaim on November 8, 1985.
The Court cited Tijam v. Sibonghanoy to treat failure to raise the jurisdiction question at an earlier stage as a bar to later questioning.
The Court stressed a policy against inconsistent conduct where a party submits to a court’s jurisdiction when it is favorable and repudiates it when adverse, citing the Court’s condemnation of “double-dealing” and the inequity of requiring parties to undergo proceedings anew.
Substantively, the Court characterized ALS’s counterclaim as one for specific performance (correction of defects/deficiencies) and damages, placing it within HLURB’s exclusive competence under Section 1 of PD No. 1344.
Despite recognizing HLURB’s exclusive jurisdiction in principle, the Court concluded that BPI’s conduct precluded relief on the jurisdictional argument.

Standards for Reviewing Facts

The Court reiterated that factual findings of lower courts command great respect and generally bind the Supreme Court when both are in agreement.
The Court acknowledged exceptions where factual findings do not conform to the law and the evidence on record.
The Court stated that, after reviewing the record, it would modify the award to conform