GR 160208; (June, 2008) (Digest)
G.R. No. 160208 ; June 30, 2008
RAFAEL R. MARTELINO, et al., petitioners, vs. NATIONAL HOME MORTGAGE FINANCE CORPORATION and HOME DEVELOPMENT MUTUAL FUND, respondents.
FACTS
Petitioners obtained housing loans from respondents NHMFC and HDMF, with the proceeds released directly to the subdivision developer, Shelter Philippines, Inc. Shelter failed to complete the subdivision development. Petitioners, compelled to spend their own resources for basic amenities, claimed a right to suspend their loan amortizations to the financing institutions due to this failure. They filed a petition for declaratory relief and prohibition with the RTC of Caloocan City, seeking to restrain foreclosure and to have their right to suspend payment judicially declared. The RTC initially issued a writ of preliminary injunction. Respondents moved to dismiss, arguing lack of jurisdiction, claiming the case involving subdivision development fell under the exclusive jurisdiction of the Housing and Land Use Regulatory Board (HLURB). The RTC granted the motion to dismiss, a decision affirmed by the Court of Appeals.
ISSUE
Whether the Regional Trial Court has jurisdiction over the petitioners’ action for declaratory relief and prohibition against the respondent financing institutions.
RULING
No, the RTC correctly dismissed the case for lack of jurisdiction. The Supreme Court affirmed the rulings of the lower courts. The core legal issue pertains to the failure of the subdivision developer to fulfill its obligations, a matter explicitly governed by Presidential Decree No. 957 (The Subdivision and Condominium Buyers’ Protective Decree). Jurisdiction over cases involving real estate trade and the rights of lot buyers against developers is vested by law in the HLURB. The Court emphasized that this jurisdiction is exclusive and extends to all claims inextricably linked to the developer’s violations, including those directed against financing institutions that released loan proceeds to the developer. Since petitioners’ cause of action for suspension of payment and their defense against foreclosure ultimately arose from the developer’s failure to complete the subdivision, the case fell squarely within the HLURB’s regulatory ambit. The nature of the action as one for declaratory relief did not divest the HLURB of its jurisdiction. Consequently, the RTC had no authority to entertain the petition, and its dismissal of the case was proper.