G.R. No. 139360, September 23, 2003
HLC CONSTRUCTION AND DEVELOPMENT CORPORATION AND HENRY LOPEZ CHUA, PETITIONERS, VS. EMILY HOMES SUBDIVISION HOMEOWNERS ASSOCIATION (EHSHA), ET AL., AND HILARIO I. MAPAYO, IN HIS CAPACITY AS PRESIDING JUDGE OF REGIONAL TRIAL COURT, BRANCH 19, DIGOS, DAVAO DEL SUR, RESPONDENTS.

FACTS

Respondents, the Emily Homes Subdivision Homeowners Association and 150 individual members, filed a civil action for breach of contract and damages against petitioners HLC Construction and Development Corporation and Henry Lopez Chua, the developers of their low-cost housing units. The complaint alleged that petitioners used substandard materials, such as coco lumber and termite-infested door jambs, and deviated from approved house plans, resulting in defective construction. After petitioners failed to make repairs, respondents undertook the repairs themselves using their own funds and sought reimbursement through the court.
Petitioners filed a motion to dismiss the complaint on two grounds: first, that jurisdiction over the case lay with the Housing and Land Use Regulatory Board (HLURB) and not the Regional Trial Court (RTC); and second, that the attached certification against non-forum shopping was defective for being signed only by the association president and not by all 150 individual complainants. The RTC denied the motion, ruling it had jurisdiction and that the certification substantially complied with the rules.

ISSUE

Whether the RTC committed grave abuse of discretion in denying the motion to dismiss based on (1) lack of jurisdiction and (2) a defective certification against non-forum shopping.

RULING

The Supreme Court granted the petition. On the jurisdictional issue, the Court held that the HLURB, not the RTC, had exclusive jurisdiction over the complaint. Under Presidential Decree No. 957, as amended, the HLURB has jurisdiction over cases filed by subdivision lot or condominium unit buyers against the owner or developer for specific performance of contractual and statutory obligations. The complaint, which sought reimbursement for repair costs due to alleged defective construction, clearly arose from the contractual obligations of the developer to deliver habitable units, falling squarely within the HLURB’s regulatory and quasi-judicial mandate.
On the procedural issue, the Court found no grave abuse of discretion in the RTC’s acceptance of the certification against non-forum shopping. While the general rule requires all plaintiffs to sign, the Court has allowed substantial compliance under justifiable circumstances to prevent the rules from subverting their ultimate objective of orderly administration of justice. Here, the members of the homeowners association, sharing a common interest and being represented in a collective action, justified the substantial compliance through the signature of their association president. However, this finding did not cure the fatal jurisdictional defect. Consequently, the RTC order was annulled and the civil case was dismissed without prejudice to its re-filing in the HLURB.