Title
Heirs of Rodolfo Crisostomo vs. Rudex International Development Corporation
Case
G.R. No. 176129
Decision Date
Aug 24, 2011
The heirs of Rodolfo Crisostomo sought to reverse a dismissal by the Court of Appeals over filing delays in a property dispute against Rudex International, concerning a rescinded contract to sell due to defects.
petition for review
contract to sell
rescission
A

Case Summary (G.R. No. 176129)

Factual Background: Contract, Defects, and Resort to HLURB

On December 17, 2001, the Crisostomo spouses were offered a house and lot at Patricia South Villa. After inspecting the model house on Block 8, Lot 3, they agreed to purchase the property priced at P833,000.00 on installment basis. They paid P10,000.00 as down payment and signed a Reservation Agreement the same day. On December 21, 2001, they paid an additional P50,000.00, executed a promissory note, and issued 36 postdated checks for monthly amortizations. They received a Key Acceptance, Walk Through, and Final Turnover Certificate. The family moved into the house on February 10, 2002, but construction defects and inadequate subdivision facilities allegedly became apparent. On March 22, 2002, Rodolfo told Euprocinia to stop paying monthly amortizations and to seek rescission. On May 17, 2002, Rodolfo delivered a letter to respondent rescinding their Contract to Sell, demanding refund of payments made, and reiterating that he would no longer pay amortizations.

On May 27, 2002, Rodolfo filed a complaint before the Housing and Land Use Regulatory Board (HLURB) for violation of Presidential Decree Nos. 1344 and 957 and Board Resolution No. 579 of 1995. Because respondent failed to answer, HLURB declared respondent in default on November 26, 2003. HLURB conducted an ocular inspection on March 12, 2003, finding Rodolfo’s allegations supported by its findings. It thus held that under Section 20 of Presidential Decree No. 957, its findings justified Rodolfo’s right to demand rescission.

HLURB Judgments by Default and Subsequent Modifications

On July 7, 2003, HLURB issued its Judgment by Default, declaring the rescission of the contract valid. It ordered respondent to refund the total payments of P71,650.00, with interest at 12% per annum from the filing of the complaint until full payment. It further directed the complainant, after full payment, to surrender possession in favor of respondent. HLURB also ordered respondent to pay P5,000.00 as attorney’s fees and to pay P10,000.00 to HLURB as administrative fine for violation of Section 20 in relation to Section 38 of P.D. 957.

Respondent sought review of the default decision on August 26, 2003. It claimed Rodolfo’s allegations were allegedly fabricated to escape the contract because he allegedly could no longer pay amortizations. On August 17, 2004, HLURB rendered a decision modifying the earlier ruling. The modification rescinded the reservation agreement and, subject to legal compensation or offsetting, ordered refund of P71,650.00 with interest at legal interest from the time of filing of the complaint. It also required complainant to turn over possession to respondent and ordered complainant to pay respondent reasonable compensation for use of the unit at P4,000.00 per month until possession was turned over. The same awards of P5,000.00 attorney’s fees and P10,000.00 administrative fine remained.

Appeal and the Office of the President’s Rulings

Petitioners, by substitution upon Rodolfo’s death, appealed the HLURB decision to the Office of the President. On November 18, 2005, the Office of the President ruled in petitioners’ favor. It reversed and set aside the HLURB Board of Commissioners’ August 23, 2004 decision and rendered judgment declaring the contract of sale rescinded. It ordered appellants to turn over possession, ordered refund of petitioners’ total payment of P71,650.00 with interest at 12% per annum from June 10, 2002 (time of filing of the complaint), and awarded P25,000.00 moral damages and P25,000.00 exemplary damages. It further awarded P5,000.00 attorney’s fees and imposed P10,000.00 administrative fine.

Respondent moved for reconsideration. On May 9, 2006, the Office of the President granted reconsideration and reinstated the August 17, 2004 HLURB decision. It reasoned that P.D. No. 957 does not authorize oppression of subdivision developers every time a home buyer alleges infirmities, and it held that deleting the rental-related award would result in unduly enriching the petitioners at respondent’s expense. The Office of the President applied the doctrine of unjust enrichment, stating that staying at the premises without compensation to respondent’s prejudice showed unduly enriched petitioners.

Petitioners sought reconsideration again, but the Office of the President denied it on August 2, 2006.

Proceedings Before the Court of Appeals: Dismissal for Late Filing

On September 15, 2006, petitioners filed a Petition for Review before the Court of Appeals. The Court of Appeals dismissed it outright in a Resolution dated October 6, 2006, and later denied reconsideration in a Resolution dated January 5, 2007, for being filed out of time. The Court of Appeals treated September 14, 2006 as the applicable deadline and noted that petitioners were already granted a 15-day extension yet failed to justify the additional one-day delay. The Court of Appeals declared it lacked jurisdiction to entertain the petition or alter a judgment that had become final and executory, except for exceptional circumstances.

Issues Raised in the Supreme Court

Before the Supreme Court, petitioners did not merely argue for relief from the dismissal. They also sought a declaration that the HLURB August 17, 2004 Decision was null and void. Petitioners framed issues on the importance of the right to appeal, the alleged lack of jurisdiction of the HLURB Appeal Board and the Office of the President in modifying the judgment and affirming in excess of jurisdiction, and the overall propriety of treating a one-day delay as fatal.

Supreme Court’s Focus: Whether the Court of Appeals Erred on Timeliness

The Court limited its discussion to the core issue of whether the Court of Appeals erred in dismissing the petition for review for late filing. Petitioners argued that the one-day delay constituted excusable negligence in the absence of any intent to delay the administration of justice. They explained that the petition was ready as early as September 13, 2006, except for the annexes. Their counsel tasked her secretary to attach the annexes, but the secretary did the task in a vacant room outside the office without counsel’s knowledge. The next day, the secretary allegedly failed to report because she had to bring her children to a doctor after they had been sick and abandoned by their nanny the night before. Petitioners claimed it was only late in the afternoon that the secretary remembered she forgot to leave instructions about the petition in their office.

Petitioners urged the Court to exercise equity jurisdiction, asserting that the delay was neither intended nor prejudicial to respondent.

Legal Basis and Reasoning: Reglementary Periods and Excusable Negligence

The Court held that the purpose of limiting the period to appeal was to forestall unreasonable delay in the administration of justice and to put an end to controversies. It ruled that where no intent to delay could be attributed to petitioners, a one-day delay did not justify dismissal. The Court relied on the principle that the perfection of an appeal within the period prescribed by law is generally mandatory and jurisdictional, and noncompliance renders the judgment final and unappealable, but it acknowledged the exception that unintended lapses may be disregarded for strong and compelling reasons so as to serve the ends of justice and prevent grave miscarriage.

Invoking jurisprudence, the Court reiterated that the rules of procedure are tool

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