G.R. No. 154877 March 27, 2007
JIN-JIN DELOS SANTOS, Petitioner, vs. SPOUSES REYNATO D. SARMIENTO and LENI C. SARMIENTO and IA-JAN SARMIENTO REALTY, INC., Respondents.

FACTS

Petitioner Jin-Jin Delos Santos entered into a Contract to Buy and Sell with respondents Spouses Reynato and Leni Sarmiento for a residential lot. After making partial payments, the parties executed a Cancellation of Contract, wherein the spouses agreed to refund Santos a specified amount. Upon the spouses’ failure to refund, Santos filed a complaint (HLURB Case No. REM-102299-10723) against them before the HLURB. Separately, respondent corporation IA-JAN Sarmiento Realty, Inc. (IJSRI) filed a complaint (HLURB Case No. REM-102299-10732) against Santos for specific performance, alleging she defaulted on the same contract. Santos moved to consolidate the two cases, arguing they involved the same transaction.
The HLURB Arbiter initially granted consolidation but later reversed himself, ordering the cases to be heard separately. Despite this, a different Arbiter subsequently rendered a consolidated Decision in favor of Santos, ordering IJSRI to pay the refund. The HLURB Board dismissed IJSRI’s appeal for procedural lapse. The Court of Appeals, however, granted IJSRI’s certiorari petition, vacated the consolidated decision, and directed the HLURB to hear and decide the two cases separately.

ISSUE

Whether the Court of Appeals erred in ruling that the HLURB Arbiter committed grave abuse of discretion in rendering a consolidated decision for the two cases.

RULING

The Supreme Court denied the petition and affirmed the Court of Appeals. The legal logic rests on the fundamental principle of due process and the distinct personalities of the parties in the two cases. The first case (REM-102299-10723) was filed by Santos against the Spouses Sarmiento as individuals. The second case (REM-102299-10732) was filed by the corporate entity IJSRI against Santos. These are different parties with separate juridical personalities. A judgment in a case is binding only upon the parties and their successors-in-interest.
By rendering a consolidated decision that effectively bound IJSRI—a party not impleaded in the case filed by Santos—the HLURB Arbiter violated IJSRI’s right to due process. IJSRI was entitled to its own day in court in the case where it was the original complainant. The Arbiter’s act of consolidating the cases for judgment, after a prior order had directed them to be heard separately, constituted grave abuse of discretion as it was done capriciously and whimsically, outside the bounds of legal procedure. The remedy of certiorari was thus correctly granted by the Court of Appeals to correct this jurisdictional error. The cases must be resolved independently to protect the substantive rights of all distinct parties involved.