Case Summary (G.R. No. 166051)
Contractual facts and payments
On 1 April 1977 the parties executed a Contract to Sell covering Lot 3, Block I, Phase II, Loyola Grand Villas, Quezon City (600 sq. m.), for P172,260.00. The agreed down payment was P33,060.00 and the balance (inclusive of 12% per annum interest) was to be paid over three years in monthly installments of P4,622.83. Respondents made the down payment and several installments and, when they alleged they had paid approximately 90% of the price, they demanded execution and delivery of a Deed of Sale and the Transfer Certificate of Title (TCT). Petitioner refused to comply.
HLURB proceedings and tribunal rulings
Respondents filed a Complaint for Delivery of Title and Execution of Deed of Sale with Damages before HLURB (HLURB Case No. REM-073090-4511). HLURB Arbiter Dean, in a 7 October 1992 decision, denied respondents’ prayer for immediate issuance of the deed and TCT but directed that the deed and TCT be executed and delivered upon full payment; he also ordered SHI to cease charging unauthorized fees. The HLURB Board of Commissioners, by decision dated 10 August 1994, modified the arbiter’s decision to direct the respondents to pay a stated balance of P11,585.41 within thirty days from finality and directed SHI to execute and deliver the deed and TCT immediately upon full payment.
Appeal to the Office of the President and adoption by reference
SHI appealed to the Office of the President (O.P. Case No. 5919). The Office of the President, after evaluating the record, rendered a short decision adopting by reference the HLURB Board’s 10 August 1994 decision and affirmed it in toto. The Office’s one-page decision expressly attached the HLURB decision as an annex and stated that the Office had conducted a careful study and was convinced by the HLURB findings.
Petition to the Court of Appeals and issues raised
Petitioner sought relief in the Court of Appeals under Rule 43, arguing principally that (1) the Office of the President erred by merely adopting by reference the HLURB Board’s findings without independently stating the facts and law as required by Article VIII, Section 14 of the 1987 Constitution, and (2) respondents’ complaint lacked cause of action because they had not paid the purchase price in full. The Court of Appeals denied the petition for lack of merit.
Constitutional requirement and memorandum decisions jurisprudence
Article VIII, Section 14 requires courts to state clearly and distinctly the facts and law on which decisions are based. The Supreme Court’s jurisprudence (Yao; Francisco v. Permskul; Romero) recognizes that incorporation by reference (memorandum decisions) is permissible where the higher tribunal adopts the lower tribunal’s findings and conclusions and where the adopted decision is readily accessible to the parties. Permskul articulated conditions for valid memorandum decisions: the incorporated decision must be immediately available (preferably attached), the decision must itself comply with Article VIII, Section 14, and memorandum decisions should be sparingly used in straightforward cases with undisputed facts and no complex doctrinal issues.
Administrative decisions and due process standards
Article VIII, Section 14’s textual mandate applies to judicial decisions; administrative bodies are governed by due process principles in administrative law. Ang Tibay sets the cardinal administrative due process requirements, including: the right to a hearing; consideration of evidence; that the decision be supported by substantial evidence and disclosed in the record; and that the parties be informed of the reasons for the decision. Administrative tribunals need not adopt the constitutional formulation for courts verbatim, but must provide sufficient factual and legal bases to satisfy due process.
Application of standards to the Office of the President’s decision
The Office of the President’s one-page decision complied with applicable standards because it (a) expressly stated that a careful study and thorough evaluation of the records had been made; (b) attached the HLURB Board’s decision as an annex, thereby providing direct access to the relevant findings of fact and conclusions of law; and (c) adopted those findings and conclusions (the annex became an indispensable part of the Office’s decision). The facts in the case were largely undisputed and the matter was a straightforward specific-performance action without doctrinal complexity, satisfying the Permskul criteria for adopting by reference.
Cause of action and HLURB arbiter discretion
Although respondents had not fully paid the purchase price and thus lacked a present right to compel immediate transfer, the complaint was not devoid of cause of action. HLURB Rule of Procedure Section 7 permits, but does not mandate, immediate dismissal for lack of jurisdiction or cause of action; the arbiter may exercise discretion to hear the case to reach a judicious, speedy, and inexpensive resolution. Arbiter Dean explained that pleadings may be liberally construed and the arbiter may consider evidence beyond strict pleading deficiencies. The complaint asserted not only a demand for conveyance upon full payment but also alleged wrongful rescission by SHI, which provided an independent basis to proceed.
PD 957, RA 6552, cancellation standards and respondents’ rights
PD 957 (Section 24) and RA 6552 limit a seller’s power to treat contracts as canceled for nonpayment. RA 6552 prescribes notice, grace periods, and formalities for cancellation; a seller cannot unilaterally for
...continue readingCase Syllabus (G.R. No. 166051)
Nature of the Petition and Relief Sought
- Petition for Review on Certiorari under Rule 45 of the 1997 Revised Rules of Civil Procedure.
- Petitioner Solid Homes, Inc. (SHI) sought to annul, reverse and set aside:
- The Decision of the Court of Appeals dated 21 July 2004 in CA-G.R. SP No. 82153 which denied and dismissed petitioner’s petition for lack of merit; and
- The Resolution of the Court of Appeals dated 10 November 2004 which denied petitioner’s Motion for Reconsideration.
- Case ultimately presented to the Supreme Court in G.R. No. 166051, decided 08 April 2008 (Chico‑Nazario, J.).
Factual Background
- On 1 April 1977 respondents Evelina Laserna and Gloria Cajipe, represented by attorney-in-fact Proceso F. Cruz, entered into a Contract to Sell with petitioner Solid Homes, Inc., a developer and seller of subdivision lots.
- Subject property: Lot 3, Block I, Phase II, Loyola Grand Villas, Quezon City; area of approximately 600 square meters.
- Agreed total contract price: P172,260.00.
- Payment terms:
- Down payment: P33,060.00 payable upon signing the contract.
- Balance: stated remaining balance of P166,421.88, payable over three years at monthly installments of P4,622.83 beginning 1 April 1977.
- The remaining balance figure and monthly installment amounts were inclusive of a 12% per annum interest, payable monthly and included in the monthly amortization.
- Respondents made the down payment and several monthly installments; alleged by respondents that they had paid 90% of the purchase price and therefore demanded execution and delivery of the Deed of Sale and Transfer Certificate of Title (TCT) upon final payment.
- Petitioner did not comply with respondents’ demand; respondents filed a Complaint for Delivery of Title and Execution of Deed of Sale with Damages dated 28 June 1990 before the Housing and Land Use Regulatory Board (HLURB), docketed HLURB Case No. REM-073090-4511.
- Petitioner’s position in its Answer (filed 17 September 1990): respondents had not fully paid the purchase price, thus had no cause of action; petitioner treated the Contract to Sell as abandoned and rescinded under its terms due to nonpayment.
Proceedings Before the HLURB Arbiter
- HLURB Arbiter Gerardo L. Dean rendered a Decision on 7 October 1992:
- Denied respondents’ prayer for issuance of the Deed of Sale and delivery of the TCT at that time.
- Directed petitioner to execute and deliver the Deed of Sale and TCT once the purchase price was fully settled by respondents.
- Ordered petitioner to cease and desist from charging or collecting fees other than those authorized by Presidential Decree (P.D.) No. 957 and related statutes.
- Arbiter’s reasoning included recognition that complainants may fail by excusable negligence to plead every pertinent allegation and that the arbiter may go outside the complaint to consider other evidence necessary for just, speedy and inexpensive resolution.
HLURB Board of Commissioners Decision
- Petitioner appealed Arbiter’s Decision to the HLURB Board of Commissioners; case docketed as HLURB Case No. REM-A-1298.
- Board of Commissioners rendered Decision on 10 August 1994 (Commissioner Luis T. Tungpalan, with Commissioners Ernesto C. Mendiola and Joel L. Altea concurring):
- Modified the Arbiter’s Decision to direct respondents to pay the balance of P11,585.41 within thirty (30) days from finality of the decision.
- Directed petitioner to execute the necessary deed of sale and deliver the TCT immediately upon full payment.
- Ordered petitioner to cease and desist from charging or collecting fees other than those authorized by P.D. No. 957 and related laws.
- Noted a typographical/terminology inconsistency in the dispositive portion but made clear there were multiple complainants.
Appeal to the Office of the President
- Petitioner appealed the HLURB Board’s Decision to the Office of the President, docketed O.P. Case No. 5919.
- Decision of the Office of the President dated 10 June 2003 (Undersecretary Enrique D. Perez):
- Affirmed in toto the HLURB Board of Commissioners’ 10 August 1994 Decision.
- Adopted by reference the findings of fact and conclusions of law of the HLURB Board; the HLURB Decision was attached as "Annex A" to the Office of the President’s decision.
- Expressly stated the Office conducted a careful study and thorough evaluation of the records and found no cogent reason to depart from the HLURB’s findings.
- Petitioner filed a Motion for Reconsideration which the Office of the President denied in an Order dated 9 December 2003.
Court of Appeals Proceedings
- Petitioner elevated the case to the Court of Appeals by Petition for Review under Rule 43, docketed CA-G.R. SP No. 82153.
- Issues presented in the petition to the Court of Appeals included:
- Whether the Office of the President erred in merely adopting by reference the HLURB Board’s findings and conclusions.
- Whether the Office of the President erred in not dismissing respondents’ complaint for lack of cause of action.
- Court of Appeals Decision dated 21 July 2004:
- Denied due course and dismissed the petition for lack of merit, thereby affirming the Office of the President’s decision of 10 June 2003.
- Court of Appeals explained that the facts and laws concluded in the HLURB Board’s Decision should be considered as written in the Office of the President’s Decision and that parties could determine the factual and legal bases through the attached HLURB Decision.
- Court of Appeals Resolution dated 10 November 2004 denied petitioner’s Motion for Reconsideration.
Issues Brought to the Supreme Court
- Petitioner raised the following questions for the Supreme Court’s resolution (quoted/paraphrased from the petition):
- Whether the Court of Appeals seriously erred in holding that the Office of the President’s Decision, which adopted by reference the HLURB Board’s findings and conclusions, complied with the constitutional mandate that decisions state clearly and distinctly the facts and law on which they are based (Section 14, Article VIII, 1987 Constitution).
- Whether the Court of Appeals seriously erred in not reversing the Office of the President’s Decision considering respondents’ complaint lacked cause of action because respondents had not fully paid the purchase price.
Petitioner’s Principal Arguments before the Supreme Court
- Constitutional argument:
- Section 14, Article VIII (1987 Constitution) provides that "No decision shall be rendered by any court without expressing therein clearly and distinctly the facts and law on which it is based."
- Office of the President’s one-page Decision merely adopted by reference the HLURB Board’s decision without a recitation in the Office of the President’s own text of the facts and law supporting the d