G.R. No. 78447 August 17, 1989
Restituto Calma, petitioner, vs. The Hon. Court of Appeals (Fifth Division) and Pleasantville Development Corporation, respondents.

FACTS

Petitioner Restituto Calma purchased a residential lot in Pleasantville Development Corporation’s subdivision in Bacolod City. In 1976, he built a house and resided there. Subsequently, spouses Fabian and Nenita Ong purchased a lot fronting the Calma property and constructed buildings where they resided and conducted business. Calma complained that the Ongs’ compound was used as a lumber yard, generating noise that caused his family illness and disturbance.
Calma filed two parallel actions. First, he filed a complaint for damages against the Ongs and Pleasantville before the Court of First Instance (Civil Case No. 16113). Second, he filed an administrative complaint with the National Housing Authority (NHA), later assumed by the Human Settlements Regulatory Commission (HSRC), against Pleasantville for violation of Presidential Decree No. 957 (the Subdivision and Condominium Buyers Protective Decree). The HSRC, in its decision dated May 22, 1985, dismissed the complaint for lack of merit, finding that Pleasantville did not violate specific provisions of P.D. 957. However, it simultaneously ordered Pleasantville to “take appropriate measures for the prevention and abatement of the activities/nuisance complained of” and to submit a compliance timetable.

ISSUE

Whether the Human Settlements Regulatory Commission acted in excess of its jurisdiction when, after absolving Pleasantville of violating P.D. 957, it nevertheless ordered the corporation to abate the alleged nuisance.

RULING

The Supreme Court affirmed the Court of Appeals’ decision nullifying the HSRC’s order. The legal logic is grounded in the scope of the HSRC’s jurisdiction and the principles of due process. The HSRC’s powers under P.D. 957 are regulatory and penal. Having categorically dismissed the complaint and exonerated Pleasantville from any violation of the decree’s provisions, the Commission lacked any legal basis to impose a positive obligation on the developer to abate a nuisance. Such an order was arbitrary and capricious, as it compelled action on a matter for which the respondent had just been absolved of liability.
The Court clarified that the proper remedy for Calma was to pursue his pending civil case for damages and abatement of nuisance before the Regional Trial Court. That forum is the appropriate venue to fully thresh out the factual issues, including the existence of any implied warranty on land use, whether a nuisance exists, and the potential liability of the Ong spouses—who are indispensable parties directly affected by any abatement order but who were not parties to the HSRC proceeding. The HSRC’s order effectively adjudicated rights without providing the Ongs an opportunity to be heard, violating due process. Thus, while sympathetic to Calma’s plight, the Court held that a wrong (the alleged nuisance) cannot be corrected by another wrong (an order issued without jurisdiction and in violation of due process).