Case Summary (G.R. No. 212581)
Facts of the Case
Dela Luna paid a reservation fee of ₱100,000 and issued postdated checks to cover the down payment and monthly amortizations totaling ₱4.8 million. He paid part of the down payment and several monthly amortizations from January to May 2003. Dela Luna alleged that Swire Realty repeatedly failed to issue official receipts for these payments, even after his requests. Swire denied this, asserting it had issued provisional receipts and that Dela Luna was the one defaulting for refusing to sign the memorandum of agreement, an essential document in their dealings.
Demand for Rescission and Refund
Dela Luna sent demand letters through counsel to rescind the Reservation Agreement and requested a refund of the payments made, citing respondent's failure to issue official receipts. Swire Realty countered by denying sufficient grounds for rescission and accused Dela Luna of breaching the agreement for nonpayment of amortizations. When settlement overtures failed, Dela Luna filed a complaint for rescission with the HLURB Regional Office.
HLURB Regional Office Decision
On November 8, 2006, the HLURB Regional Office ruled in favor of Swire Realty, declaring the Reservation Agreement valid and subsisting, and held that rescission is not warranted for slight or casual breach. Dela Luna discovered this ruling only 11 months after its issuance.
Subsequent Appeals and Rulings
Dela Luna filed an appeal with the HLURB Board of Commissioners on November 19, 2007, which reversed the Regional Office decision and ordered Swire Realty to refund payments, less the reservation fee, with legal interest. Swire Realty filed a Motion for Reconsideration, which was granted by the HLURB First Division, reinstating the Regional Office's decision.
Dela Luna then elevated the case to the Office of the President, which ruled in his favor, ordering the refund of payments excluding the reservation fee. Swire Realty’s motion for reconsideration was denied.
Court of Appeals Decision
Swire Realty petitioned the Court of Appeals (CA), which reversed the Office of the President’s decision, ruling that Dela Luna’s appeal to the HLURB Board of Commissioners was late and procedurally defective, lacking essential requirements such as affidavit of service, verified certification, and an appeal bond. The CA held that once a decision becomes final and executory, no tribunal, including the Office of the President, can revive or alter it. Dela Luna’s appeal was thus dismissed, and the Regional Office decision reinstated as final and executory. The CA’s denial of Dela Luna’s motion for reconsideration followed.
Supreme Court Petition and Issues
Dela Luna filed a Petition for Review on Certiorari before the Supreme Court, contesting the CA ruling for dismissing his appeal based on procedural lapses and seeking refund of his payments. He argued that his previous lawyer’s gross negligence precluded timely filing of the appeal and urged the Court to relax procedural rules in the interest of substantial justice. He further contended that only a reservation agreement subsisted, and that Swire Realty had no right to retain the payments without a signed contract of sale.
Swire Realty argued that the case raised questions of fact resolved by the CA, that the decision had become final and executory, and that petitioner failed to prove counsel negligence. It maintained the absence of unjust enrichment.
The issues before the Court were: (1) whether the CA erred in reversing the Office of the President’s decision due to petitioner’s delayed appeal; and (2) whether petitioner was entitled to a refund of his monthly amortizations.
Procedural Rules on Appeal and Timeliness
The Court emphasized that the right to appeal is a statutory privilege and must be exercised in strict compliance with prescribed rules, specifically citing the 2004 HLURB Rules requiring appeals filed within 30 days from receipt of decision, accompanied by essential documents such as affidavit of service, verified certification, and appeal bond.
Dela Luna’s appeal was filed 11 months after receipt of the Regional Office Decision and was not accompanied by any of the required formalities. Consequently, the memorandum of appeal was considered a mere scrap of paper, and the decision became final and executory, thus unalterable.
Counsel’s Negligence and Client’s Duty
The Court clarified that while procedural rules should not be applied in a way that unjustly deprives litigants of their rights, negligence of counsel ordinarily binds the client. Only when the negligence is so gross and malicious that it violates due process can it justify the relaxation of procedural rules. Moreover, litigants must diligently monitor their cases and cannot rely solely on their lawyers. Dela Luna failed to do so, discovering the unfavorable ruling only after a significant delay despite having ample opportunity to inquire personally. His claims of counsel negligence lacked supporting evidence and were deemed insufficient.
Substantive Merits: Reservation Agreement and Contract of Sale
On substantive matters, the Court held that a valid contract of sale requires consent, subject matter, and consideration—all present in the Reservation Agreement, which specified the unit, purchase price, and payment schedule. The
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Case Syllabus (G.R. No. 212581)
Case Background and Procedural History
- On September 14, 2002, petitioner Joseph Dela Luna and respondent Swire Realty and Development Corporation entered into a Reservation Agreement for Unit 2302 in Makati Palace Hotel, priced at ₱4,800,000.00.
- Dela Luna paid a reservation fee of ₱100,000.00 (part of down payment), issued postdated checks covering the balance of down payment (₱1,340,000.00) and monthly amortizations (₱3,360,000.00).
- He paid the total down payment (₱1,440,000.00) on January 20, 2003, and amortizations for February to May 2003.
- Dela Luna claimed repeated requests to Swire Realty for official receipts were ignored; Swire Realty allegedly failed to issue formal receipts despite memorandum of agreement and contract to sell being sent.
- Dela Luna refused to sign the contract due to errors and no issuance of receipts, advised Swire not to deposit checks (which Swire ignored).
- Through counsel, Dela Luna sent demand letters to rescind the contract and requested refunds of payments; Swire Realty denied breach, claiming Dela Luna failed to fulfill conditions by refusing to sign and pay amortizations.
- After failed settlement and no reply from Swire Realty, Dela Luna filed a Complaint for Rescission with the Housing and Land Use Regulatory Board (HLURB).
HLURB Regional Office and Board of Commissioners' Decisions
- The HLURB Regional Office, on November 8, 2006, ruled in favor of Swire Realty, stating rescission would not be allowed for slight or casual breach; the reservation agreement was valid and subsisting, ordering Dela Luna to pay the balance.
- Dela Luna only learned of the ruling 11 months later on October 30, 2007.
- Dela Luna filed an appeal with the HLURB Board of Commissioners on November 19, 2007.
- The Board of Commissioners reversed the Regional Office ruling on December 16, 2008, ordering Swire Realty to refund Dela Luna ₱1,712,000.00 with 6% legal interest.
- Swire Realty’s Motion for Reconsideration was granted by the HLURB First Division, reinstating the Regional Office’s decision on April 15, 2009, making it final and executory.
- Dela Luna appealed to the Office of the President, which reversed the HLURB First Division’s ruling in 2013 and ordered Swire Realty to refund all amounts paid except the reservation fee, plus legal interest.
- Swire Realty’s Motion for Reconsideration to the Office of the President was denied.
- The case was elevated to the Court of Appeals (CA) via Petition for Review challenging the authority of Office of the President to set aside a final and executory HLURB decision.
Court of Appeals’ Ruling and Grounds for Dismissal
- The CA granted Swire Realty’s Petition, holding that:
- Dela Luna’s appeal to the HLURB Board of Commissioners was tardy (filed 11 months late).
- Petitioner failed to comply with essential requirements for appeal perfection: verified certification, affidavit of service, and appeal bond.
- The HLURB Regional Office’s decision had already become final and executory.
- Neither HLURB Board of Commissioners nor the Office of the President had jurisdiction to review or reverse the final HLURB Regional Office decision.
- CA’s decision reinstated the November 8, 2006 HLURB Regional Office ruling.
- Dela Luna’s Motion for Reconsideration before CA was denied.
Petition for Review on Certiorari and Issues Presented
- Dela Luna filed a Petition for Review before the Supreme Court, arguing:
- His counsel’s gross negligence caused the late filing; thus, procedural rules ought to be relaxed in the interest of substantial justice.
- The Court of Appeals erred by dismissing his substantive right to refund.
- The reservation agreement alone subsisted between parties;