Case Summary (G.R. No. 211301)
Background and Procedural History
On September 24, 2003, respondent Elizabeth D. Daclan purchased a family estate “Application for Continual Use” memorial lot from petitioner PDI for ₱708,000.00, payable monthly. Respondent paid ₱457,760.74 as of the filing of the case. In 2005, respondent learned that the HLURB had not issued any Certificate of Registration or License to Sell to PDI. Consequently, on January 13, 2006, respondent filed a complaint for annulment of contract with damages against PDI and its corporate officers before the RTC. The RTC rendered a decision on March 31, 2011, annulling the contract, ordering petitioners to refund respondent’s payments with legal interest, and awarding moral, exemplary damages, and attorney’s fees.
Petitioners appealed to the CA, contending the RTC lacked jurisdiction, arguing that such cases fall within the primary jurisdiction of the HLURB. The CA, however, dismissed their appeal pursuant to Section 2, Rule 50 of the Rules of Court for raising only questions of law and not following the proper appellate procedure, and denied the petitioners’ motion for reconsideration, prompting this petition for review on certiorari before the Supreme Court.
Issue Presented
Whether the CA erred in dismissing petitioners’ appeal for raising a pure question of law regarding the RTC’s jurisdiction without resolving whether HLURB has primary jurisdiction over annulment of contracts for memorial lots.
Proper Appellate Procedure and Jurisdiction of the Court of Appeals
The Supreme Court affirmed the CA’s dismissal of the appeal for lack of merit given that petitioners raised a pure question of law regarding jurisdiction. Under Section 2, Rule 41 of the Rules of Court, appeals raising only questions of law from RTC decisions should be elevated directly to the Supreme Court through a petition for review under Rule 45, not by ordinary appeal to the CA. Rule 50, Section 2 explicitly mandates dismissal of appeals improperly taken to the CA on pure questions of law, and no transfer to proper courts is done. The Court found no error in CA’s procedural ruling.
Relaxation of Rules and Resolution on the Merits
Despite procedural correctness of the CA, the Supreme Court exercised judicial discretion to relax procedural rules to resolve the substantive question for justice and equity, referencing precedents where procedural rules were liberally construed to serve substantial justice.
Doctrine of Primary Jurisdiction and HLURB’s Authority
The Court explained the doctrine of primary jurisdiction, requiring administrative bodies with specialized competence to first resolve certain issues before courts intervene. Administrative agencies like HLURB have primary jurisdiction over matters concerning land use and housing regulations.
Pursuant to Executive Order No. 648, HLURB was empowered to promulgate the rules regulating memorial parks, including registration and licensing. HLURB Resolution No. 681-00 detailed the regulatory framework for memorial parks and cemeteries.
The Court acknowledged that although respondent’s complaint was cognizable by the RTC, the subject matter concerning the developer’s lack of a certificate of registration and license to sell memorial lots falls within the HLURB’s primary jurisdiction because it involves regulatory compliance.
Status of HLURB Jurisdiction and Regional Trial Court Authority
However, at the time of the complaint’s filing in 2005, the HLURB’s exclusive jurisdiction was limited mainly to subdivision lots and condominium units, as explicitly set under Presidential Decree No. 1344. Judicial precedents clarifying HLURB jurisdiction required claims to involve regulated subdivision or condominium units and must allege jurisdictional facts clearly.
Subsequent expansions of HLURB jurisdiction came with RA 9904 (Magna Carta for Homeowners and Homeowners’ Associations), the 2017 HLURB Rules of Proceedings Before Regional Arbiters (Resolution No. 963-17), and finally RA 11201 (Department of Human Settlements and Urban Development Act) effective 2019, which reconstituted HLURB into the Human Settlements Adjudication Commission (HSAC). The 2017 Rules and RA 11201 broadened jurisdiction explicitly to memorial parks and similar real estate developments, including original and exclusive jurisdiction of HSAC regional adjudicators over such matters.
Since these subsequent laws and rules were not yet in effect at the time the case arose, the RTC maintained jurisdiction over the annulment case involving the memorial lot contract.
Validity of the RTC Decision
The RTC’s decision dated March 31, 2011, annulling the “Application for Continual Use” contract, ordering full refund with interest, and awarding moral and exemplary damages as well as attorney’s fees, remains valid and binding.
The Court noted petitioners did not contest the RTC’s factual findings or the damage awards, effectively admitting their liability. The RTC properl
Case Syllabus (G.R. No. 211301)
Nature of the Case and Procedural History
- The case arose from a petition for review on certiorari under Rule 45 of the Rules of Court seeking to set aside the Court of Appeals (CA) Decision dated August 12, 2013, and Resolution dated February 10, 2014 in CA-G.R. CV No. 97454.
- The CA dismissed the appeal filed by petitioners—Park Developers, Inc. (PDI), Reynaldo Jesus B. Pasco, Sr., Rolando Golla, Nenita B. Pasco, Julito Caparas, Teresa Caparas, and Constancio Bernardo—against the March 31, 2011 Decision of Branch 67, Regional Trial Court (RTC), Pasig City, in Civil Case No. 70647.
- The RTC decision annulled the contract for the continual use/purchase of a family estate memorial lot and ordered petitioners to return payments made by respondent Elizabeth D. Daclan, awarded damages, and attorney's fees.
- Petitioners filed an appeal via an ordinary appeal under Section 2(a), Rule 41 of the Rules of Court to the CA, solely arguing lack of jurisdiction by the RTC.
- The CA dismissed the appeal pursuant to Rule 50, Section 2 of the Rules of Court for raising only pure questions of law, which should have been brought before the Supreme Court by petition for review under Rule 45.
- Petitioners' Motion for Reconsideration was likewise denied by the CA, prompting the present petition to the Supreme Court.
Factual Background and Contractual Relationship
- On September 24, 2003, respondent Daclan purchased from PDI a family estate memorial lot at Sanctuary Memorial Park in Naic, Cavite.
- The total contract price was ₱708,000, payable in 36 monthly installments, of which respondent had paid ₱457,760.74 at the time of filing the complaint.
- In 2005, respondent discovered that HLURB had never issued any Certificate of Registration or License to Sell in favor of PDI concerning the memorial park, raising concerns about the legality of the sale.
- Consequently, on January 13, 2006, respondent filed a complaint for annulment of contract with damages against PDI and its corporate officers.
RTC's Decision and Relief Granted
- On March 31, 2011, the RTC rendered a decision:
- Annulled the "application for continual use" contract between respondent and petitioners.
- Ordered petitioners, jointly and solidarily, to return all payments made by respondent totaling ₱457,760.74 plus legal interest from demand.
- Awarded moral damages of ₱50,000 due to willful injury to property causing respondent emotional distress.
- Awarded exemplary damages of ₱50,000 as corrective sanctions for public good based on bad faith acts.
- Ordered payment of attorney’s fees amounting to ₱100,000.
- Denied respondent’s compulsory counterclaim for lack of merit.
Petitioners’ Sole Assignment of Error: Jurisdictional Question
- Petitioners contended that the HLURB, and not the RTC, had primary jurisdiction over the case because the complaint involved the purchase and continual use of memorial lots lacking proper HLURB certification/license.
- They argued that the RTC’s decision was void for lack of jurisdiction and questioned the CA’s dismissal for failure to rule on the jurisdictional issue.
Court of Appeals’ Ruling on Jurisdiction and Appeal Procedure
- The CA held that petitioners raised a pure question of law—jurisdiction—and under the rules, such questions must be filed as a petition for review on certiorari under Rule 45 directly with the S