GR 125447; (August, 1998) (Digest)
G.R. No. 125447 & G.R. No. 125475 August 14, 1998
MARINA PROPERTIES CORPORATION, petitioner, vs. COURT OF APPEALS and H.L. CARLOS CONSTRUCTION, INC., respondents. ( G.R. No. 125447 )
H.L. CARLOS CONSTRUCTION, INC., petitioner, vs. COURT OF APPEALS and MARINA PROPERTIES CORPORATION, respondents. (G.R. No. 125475)
FACTS
Marina Properties Corporation (MARINA), a real estate developer, engaged H.L. Carlos Construction, Inc. (H.L. CARLOS) as the principal contractor for Phase III of its “Marina Bayhomes Condominium Project.” As an incentive, MARINA allowed H.L. CARLOS to purchase Unit B-121, and the parties executed a Contract to Purchase and to Sell on October 9, 1988. H.L. CARLOS paid a total of P1,810,330.70, which was more than 50% of the contract price. When H.L. CARLOS demanded delivery of the unit, MARINA refused. Subsequently, MARINA cancelled the contract, citing H.L. CARLOS’s alleged abandonment of the construction project and its filing of baseless suits. H.L. CARLOS filed a complaint for specific performance with damages with the Housing and Land Use Regulatory Board (HLURB). The HLURB Arbiter declared the cancellation null and void for violating Republic Act No. 6552 (the Realty Installment Buyers Protection Act), ordered MARINA to deliver the unit and accept payments, and awarded damages. This decision was affirmed by the HLURB Board of Commissioners and the Office of the President. The Court of Appeals affirmed the Office of the President but deleted the award of actual damages for lack of evidence. Both parties filed separate petitions to the Supreme Court.
ISSUE
1. Whether the cancellation of the Contract to Purchase and to Sell by MARINA was valid.
2. Whether the HLURB had jurisdiction over the complaint for specific performance.
3. Whether the complaint should have been dismissed on grounds of litis pendentia, forum-shopping, or splitting a cause of action due to a pending civil case for damages in the Regional Trial Court.
4. Whether the motion for reconsideration filed by MARINA with the Office of the President was pro-forma.
5. Whether the award of actual damages was proper.
RULING
1. The cancellation was invalid. The Supreme Court affirmed the lower tribunals’ ruling that the cancellation violated R.A. No. 6552 . Since H.L. CARLOS had paid more than 50% of the purchase price and the equivalent of more than twenty-four monthly installments, MARINA could only cancel the contract through notarial cancellation, which requires payment of the cash surrender value to the buyer. MARINA failed to comply with this statutory procedure, rendering the cancellation illegal and void.
2. The HLURB had jurisdiction. The Court held that complaints arising from contracts involving the sale of subdivision lots or condominium units, and those involving unsound real estate business practices, fall under the exclusive jurisdiction of the HLURB pursuant to Presidential Decree No. 957 and its amendatory laws. The HLURB has the authority to interpret contracts, determine the rights of the parties, and award damages.
3. The complaint was not dismissible on grounds of litis pendentia, forum-shopping, or splitting a cause of action. The requisites for litis pendentia were not met. While the parties were substantially the same, the rights asserted and the reliefs prayed for were different. The RTC case (Civil Case No. 89-5870) was for collection of unpaid billings under a Construction Contract, while the HLURB case was for specific performance and damages arising from the unilateral cancellation of the Contract to Purchase and to Sell. The causes of action were distinct and separate.
4. The motion for reconsideration was not pro-forma. The Court found that MARINA’s motion for reconsideration before the Office of the President substantially complied with the rules. It raised issues regarding the propriety of the actual damages awarded and the jurisdiction of the HLURB, which were not mere reiterations of arguments already passed upon.
5. The award of actual damages was properly deleted. The Court of Appeals correctly deleted the award of P30,000.00 monthly as actual damages for unrealized rental income because H.L. CARLOS presented no evidence to substantiate this claim. Damages cannot be based on speculation.
The Supreme Court DENIED both petitions and AFFIRMED the decision of the Court of Appeals.