Case Summary (G.R. No. 6807)
Proceedings Before the HLURB Arbiter
In 2000, spouses Jurado filed for specific performance and damages. Solid Homes moved for dismissal, arguing absence of prior written consent for assignment, prescription, laches, res judicata, forum shopping, and estoppel. On June 13, 2007, the HLURB Arbiter dismissed the complaint without prejudice for lack of proof of written consent and prescription.
HLURB Board of Commissioners’ Decision and Resolution
On appeal, the HLURB Board reversed. It found substantial evidence of Solid Homes’ consent and participation: (1) Solid Homes prepared the assignment form; (2) collected transfer fee; (3) presented and signed a subdivision plan indicating potential replacement lots; (4) required and received documents for replacement; (5) issued a credit memorandum. The Board set aside the arbiter’s dismissal and ordered:
- Replacement of the foreclosed lot with land of the same area, quality, and location, or payment of fair market value if unable.
- Payment of moral damages (₱30,000), attorney’s fees (₱30,000), and costs.
Upon Solid Homes’ reconsideration, the Board confirmed a remaining balance of ₱145,843.35 due from spouses Jurado and modified its relief: spouses Jurado to pay the balance plus 12% interest from availability of substitute lot; on full payment, Solid Homes to execute deed of sale and transfer title; alternatively, Solid Homes to pay fair market value with 12% interest from complaint filing; plus moral damages, attorney’s fees, and costs.
Ruling of the Office of the President
The OP adopted by reference the HLURB Board’s findings and affirmed the modified reliefs. It agreed Solid Homes consented, rejected defenses of res judicata, laches, and found litigation timely. Motion for reconsideration was denied.
Court of Appeals Decision
The CA, under Rule 45 review of the OP, affirmed except it deleted awards of moral damages and attorney’s fees for lack of factual and legal basis. It upheld:
• Adoption by reference of HLURB findings in an administrative memorandum decision.
• Rejection of res judicata, forum-shopping, prescription, and laches defenses.
• Solid Homes’ implied consent from its actions.
• Costs of suit against Solid Homes.
Issues on Supreme Court Review
Solid Homes challenged:
- Validity of OP’s adoption by reference of HLURB findings.
- Application of res judicata, forum shopping, prescription, laches, estoppel.
- Privity of contract given non-assignment clause.
- propriety of ordering lot replacement or payment of fair market value.
- Interest rate imposed.
Supreme Court Ruling
Memorandum Decision Doctrine
The OP’s decision complied with Article VIII, Sect. 14, as it attached HLURB findings, reevaluated evidence, and was sufficiently detailed for an administrative ruling.Effect of Non-Assignment Clause and Assignment Validity
The non-assignment clause (no transfer without prior written consent) did not render the assignment void. An assignment perfected by contract vests rights in the assignee upon knowledge by the debtor. Solid Homes’ preparation of forms, collection of fees, issuance of credit memoranda, and correspondence demonstrated consent and estopped it from disavowal. Factual findings on consent are binding under Rule 45.Defenses of Res Judicata, Forum Shopping, Prescription, Laches, and Estoppel
• The first HLURB dismissal was without prejudice; refiling was proper.
• Written extrajudicial demands (1992, 1996) interrupted the 10-year prescription under Civil Code Art. 1155; cause of action accrued in 1983 upon foreclosure.
• Spouses Jurado acted with diligence; laches does not apply.
• Additional documentary evidence was admissible; no forum shopping or estoppel.Obligations under a Contract to Sell and Available Remedies
A contract to sell creates a suspensive condition: title transfers only upon full payment and execution of an absolute sale. Spouses Jurado elected specific performance when the original lot was foreclosed. The HLURB, OP, and CA correctly ordered rep
Case Syllabus (G.R. No. 6807)
Facts of the Case
- In 1977, Solid Homes, Inc. entered into a Contract to Sell with spouses Violeta and Jesus Calica covering a 1,241 m² lot in Loyola Grand Villas Subdivision, Marikina, Rizal for ₱434,350.00
- Spouses Calica paid ₱86,870.00 downpayment; balance payable in equal monthly installments of ₱5,646.55 for eight years
- In 1983, spouses Calica executed a Deed of Assignment and Transfer of Rights to spouses Artemio and Consuelo O. Jurado for ₱130,352.00, using Solid Homes’ standard form signed by its officer Rita Castillo Dumatay
- Spouses Jurado paid the transfer fee and were issued a provisional receipt and a credit memorandum showing payment of ₱108,001.00; total payments by February 22, 1983 amounted to ₱480,262.95
- Upon inquiry, spouses Jurado learned the subject lot had been mortgaged and foreclosed; Solid Homes promised to replace it and requested documents, but follow-up in 1992 and 1996 yielded no substitute lot
Procedural History
- 2000: Spouses Jurado filed a complaint for specific performance and damages with the HLURB; Arbiter dismissed without prejudice for lack of documentary evidence
- 2005: HLURB Board affirmed the Arbiter’s dismissal; spouses Jurado refiled the complaint the same year
- Solid Homes answered, denying consent to assignment, raising res judicata, prescription, laches, forum shopping, estoppel defenses, and counterclaimed for damages and attorney’s fees
Ruling of the HLURB Arbiter
- Dismissed the refiled complaint for lack of merit
- Found no proof of Solid Homes’ prior written consent to assignment
- Held spouses Jurado’s cause of action had prescribed
Ruling of the HLURB Board of Commissioners
- Reversed the Arbiter for substantial evidence of Solid Homes’ consent, noting:
- Solid Homes prepared the assignment form and its officer attested it
- Solid Homes required and accepted a transfer fee
- Solid Homes presented and signed a subdivision plan showing a replacement lot
- Solid Homes issued a credit memorandum for payment by spouses Jurado
- Disregarded prescription due to extrajudicial demands by spouses Jurado
- Rejected res judicata since initial dismissal was without prejudice
- May 22, 2008 Decision ordered:
- Replace the foreclosed lot or pay its current fair market value
- Pay ₱30,000.00 moral damages, ₱30,000.00 atto