Housing Land Use Regulatory Board Proceedings

HOUSING LAND USE REGULATORY BOARD PROCEEDINGSComplaint

Answer

Reply

Position Paper

Memorandum

Notice of Appeal (Office of the President)

Appeal Memorandum

Republic of the Philippines

Office of the President

HOUSING AND LAND USE REGULATORY BOARD

National Capital Region

NHA Compound, Kalyaan Avenue

Diliman, Quezon City

Juan Dela Cruz

Complainant

-versus-

HLURB Case NO. _______

New San Jose Builders

Respondent

X-----------------------------------X

COMPLAINT

Complainant, through the undersigned counsel, unto this Honorable Board respectfully avers that:

1. Complainant, Juan Dela Cruz, is of legal age, presently residing at 123 ABC Street, Quezon City. For the purpose of this complaint, he can be served with orders, resolutions or decision and other processes of this Honorable Board.

2. Respondent NEW SAN JOSE BUILDERS, INC. is a domestic corporation duly organized and existing under the laws of the Philippines with office address at 234 ASD St. Quezon City where it can be served with summons and other processes of this Honorable Board.

3. Respondent entered into a Project Agreement with the GSIS to develop and construct GSIS METRO HOMES, a residential and commercial Condominium Project, located at 345 FGH St. Sta. Mesa Manila, owned and operated by GSIS.

4. Under the agreement the respondent is authorized to receive and acknowledge the purchase price of the Condominium unit sold on Cash Basis and to remit to the GSIS its share of the selling price.

5. Complaint applied for a unit on the said project. However the complaint did not have sufficient money to cover the whole amount of the GSIS approved selling price and the total cost of the subject condominium unit of Php 500,000.00 so they requested the respondent to accept the payment on staggered basis, which the latter allowed.

6. Thus the complainant paid Php 10,000 as reservation fee covered by official receipt. Eventually the complainant was required to sign a pro-forma Memoradum of Agreement relative to the sale of the Condominium Unit.

7. Subject to the MOA the complaint religiously paid and complied with its obligation and has fully paid the purchase price including its interest of the Condominium Unit as early as Novemenber 1999.

8. Despite the full payment of the purchase price the respondent failed to comply with its obligation notwithstanding repeated demands.

9. The complainant requested the assistance of the GSIS, as the owner of the Condominium Project. It was affirmed that despite full payment the respondent did not coordinate with the GSIS and not remitted the purchase price to the GSIS.

10. GSIS tried to communicate with the respondent but the latter still refused to comply with its obligation.

11. The above mentioned acts or omissions of the respondent are clear violations of the mutual covenant as provided by the Memorandum of Agreement executed by the parties.

12. To date, respondent, despite repeated demands verbal and written has failed to fulfill its obligations, prompting the undersigned counsel upon the instruction of the complainant to institute instant complaint. For his professional services, complainant is obliged to pay an attorneys fees of not less than Php 50,000, for which the respondent should be held liable.

13. As proximate result of the respondent above mentioned act or omissions complaint suffered sleepless nights, mental anguish, serious anxiety, and besmirched reputation, wounded feeling, moral shock, and social humiliation, for which the respondent should be made to pay damages in the sum of not less than Php 200,000.

14. To serve as a lesson for having acted in bad faith, wanton and reckless disregard of the complainants right and as reminder that economic power of the developer will never justify reckless disregard of the rights of others, an exemplary damages should be awarded in the amount of Php 10,000.

RELIEF

WHEREFORE, it is respectfully prayed of this Honorable Board that after due proceedings, judgment be rendered in favor of the compliant and against the respondent as follows:

1. Ordering the respondent to coordinate with the GSIS as regards the subject condominium unit and remit to GSIS the amount corresponding its share on the selling price of the subject Condominium Unit;

2. Ordering the respondent to prepare the corresponding and final DEED of Absolute Sale for the execution of the herein parties and GSIS, as owner of the GSIS METRO HOMES particularly the subject Condominium Unit;

3. Cancelling the License to Sell previously issued by this Honorable Board to respondent NEW SAN JOSE BUIlDERS, INC;

4. Ordering the respondent to pay herein complainant the following:

a. Moral Damages in the amount of Php 200,000

b. Exemplary Damages in the amount of Php 100,000

c. Attorneys fees in the amount of Php 50,000

d. Cost of suit.

Other reliefs just and equitable under the premise are likewise prayed for.

Quezon City, August 10, 2009

Atty. Juan Castillo

Counsel for the Complainant

123 FGH St. Quezon City

Roll No. 12345

PTR No. 12345 June 25, 1999, Quezon City

IBP No. 12345 June 25, 1999 Quezon City

VERIFCATION AND CERTIFICATION

I, JUAN DELA CRUZ, of legal age, single, Filipino citizen, resident of 123 ABC Street, Quezon City after having been duly sworn at in accordance with the law, hereby depose and state:

1. I am the complainant in the above mentioned case

2. I have cause the preparation of the and filing before this Honorable Board of the foregoing complaint and the contents thereof are true and correct of my own knowledge and belief and based on records at hand;

3. I hereby certify under oath that complainant has not commenced any other action involving the same issues in any court, tribunal or quasi-judicial agency and to the best of my knowledge, no such other action or claim is pending therein;

4. Hereby undertake that if I should thereafter learn that same or similar action or claim has been filed or pending before any court, tribunal, or quasi-judicial agency I shall report that fact within five (5) days therefrom to the court or agency wherein the original pleading and sworn certification contemplated herein have been filed.

IN WITNESS WHEROF, I have hereunto affixed my signature this day of August 10, 2010.

JUAN DELS CRUZ

Affiant

SUBSCRIBED AND SWORN to before me this August 10, 2009 affiant exhibiting to me is drivers license NO. 12345.

ATTY. JOHN CASTRO

Notary Public

Until December 31, 2010

PTR No. 12345 Quezon City Jan 25, 1999

Roll No. 12345

IBP No. 12345

123 ASD St. Quezon City

Doc. No.

Page No.

Book No.

Series of 2010







Juan Dela Cruz

Complainant

-versus-



Respondent

X---------------------------------------------------X


Third- Party Complainant

-versus-

Government Service Insurance System

Third-Party Defenedant

ANSWER WITH THIRD PARTY COMPLAINT AND COUNTER-CLAIM

Respondent NEW SAN JOSE BUILDERS , INC. (NSJBI) by counsel respectfully states:

I.

ADMISSION

1. Respondent NSJBI admits the allegation contained in the following paragraphs of the Complaint:

a. Paragraphs 1 and 2, insofar as the personal circumstance of the parties.

b. Paragraphs 3,4,5,6,7 are admitted

II.

Specific Denials

2. For reason/facts stated in its Affirmative Allegation/Defenses herein below and/or lack of information sufficient t form a belief as to its truth or falsity, respondent NSJBI specifically denies the allegations in the following paragraphs of the Complaint:

a. Paragraph 6, insofar as it is made to appear that complainant was required to sign a pro-forma MOA relative to the purchase price of the condominium unit.

b. Paragraph 7, insofar as it is made to appear that pursuant to the above mentioned MOA complainants religiously complied with their obligation and in fact had fully paid the purchase price including the interest of the above mentioned condominium unit as early as November 1999.

c. Paragraph 8, insofar as it is to appear that despite full payment of the purchase price including the interest by the complainant and their repeated demands from the respondent, the latter failed and refused its obligation as provided in the Memorandum of Agreement.

d. Paragraph 9, insofar as it is to appear that the response of the complainants request to the GSIS as the owner of the subject condominium unit but again respondent failed and refused to comply with its obligation.

e. Paragraph 11, insofar as it is alleged that the respondent committed acts or omissions which in violation of the mutual covenants, agreement and stipulations provided in the Memorandum of Agreement executed by the parties.

III.

AFFIRMATIVE ALLEGATIONS

3. Respondents re-pleads by reference the foregoing admissions and denials and by way of Affirmative Allegation further avers that:

a. Respondent NEW SAN JOSE BUILDERS, INC. (NSJBI) is a corporation organized and existing under the Philippine laws with principal address at 234 ASD St. Quezon City.

b. Sometime in 1992 respondent NSJBI and GSIS entered into a Project Agreement whereby NSJBI undertook to develop the property of GSIS consisting of of several parcels of land. Located in Pureza St. Sta Mesa Manila.

c. NSBI undertook to construct and develop the said property in a turnkey basis of fifty (50) 4-storey walk up condominium with 3,400 units.

d. The GSIS was to underwrite the financing needs of the buyers and the acquisition of completed units.

e. The proceeds of the sale was supposed to be divide by the between NSJBI and GSIS according to the agreed portion.

f. Sometime in 1997 respondent NSJBI entered into a loan agreement with the GSIS wherein the latter extended Php 1,000,000.00

g. The loan was secured by several properties then being developed by respondent NSJBI including the right on the improvements of a property already owned by the GSIS.

h. The proceeds were used to finance new projects and for the completion of the development of some of the properties offered as collateral.

IV.

SPECIAL AFFIRMATIVE DEFENSE4. Respondents NSJBI hereby re-pleads, by reference the foregoing , and by way of special and affirmative defenses, further avers.

a. Complainant has no cause of action against the defendants NSJBI and the complaint states none.

i. Complainant admits that GSIS is the owner of the GSIS METRO HOMES

ii. In the aforementioned Deed of Absolute Sale , it is clearly stipulated that NSJBI has assigned all its rights , interest, and participation over the subject condominium unit to GSIS.

iii. Since the title of the subject property is in the name and possession of GSIS, respondent NSJBI obviously will not be able to comply with the request of the complainants to release them the aforementioned condominium certificate of title over the subject property.

iv. As aforementioned right after the payments by the complainants of the subject condominium units purchase price and prior to the filing of the instant complaint, respondent NSJBI had already requested for the release of the titles from GSIS because it is already willing and ready to remit the share of the GSIS in the proceeds of the sale of the condominium unit and the corresponding mortgage value of its right in the aforementioned Deed of Absolute Sale in favor of the complainant.

v. GSIS up to date had not yet acted on the respondents request for the release of the title and for the signing of the Deed of Absolute Sale.

V.

COUNTER CLAIM

5. Respondent NSJBI re-pleads by refence , the foregoing aegations and by way of counterclaim, further avers:

a. As a result of the malicious filing of the present Complaint, notwithstanding that complaint know that he has no cause of action, respondent NSJBIs reputation is besmirched entitling it to moral damages in the conservative sum of Php 250,000.

b. To serve as an example for the public good and to deter other from instituting plainly unmeritorious complaints. Complaints should be assessed exemplary damages of at least Php 250,000.

c. To defend itself from the baseless suit, respondent NSJBI is constrained to engage the services of the counsel for the agreed fee of Php 100,000 which the plaintiff should reimburse to the respondent NSJBI.

VI.

THIRD-PARTY COMPLAINT

6. Respondent NSJBI re-pleads, by reference , the foregoing allegations and by way of Third-Party Complaint against Third-Party Defendant GSIS, further avers;

a. Third party defendant GSIS is a government owned and controlled corporation with principal office at the GSIS Building Roxas, Boulevard Pasay City.

b. The defendant GSIS is the owner of the condominium unit subject of this complaint and has the title thereto being sought by the complaint.

c. While it holds the mortgage on the interest of the respondent NSJBI over the subject condominium unit it has given its consent to the sale of the subject unit by NSJBI to the payment of NSJBIs mortgage obligation proportioned unit.

d. Respondent NSJBI is ready and willing to pay respondent GSIS the mortgage debt corresponding to the subject unit but it stubbornly refuses to release the titles to the subject property.

e. Moreover, NSJBI has already executed the corresponding Deed of Absolute Sale over the property, yet GSIS refused to sign the same.

f. Consequently in the event the remote possibility that defendant NSJBI is held liable for any claim of Complainant, respondent GSIS should be held liable for the same.

PRAYER

WHEREFORE, it is respectfully prayed that judgment be rendered dismissing the complaint for failure to comply with the rules against forum shopping and/or utter lack of merit and:

1. Dismissing the instant complaint for utter lack of merit against respondent NSJBI;

2. On its counterclaim , that complainant be ordered to pay NSJBI the following sums:

a. Php 250,000 as moral damages

b. Php 250,000 as exemplary damages

c. Php 100,000 as attorneys fees

d. Cost of suit

3. In the remote possibility respondent NSJBI is held liable for any amount to complainants, respondent GSIS be ordered to reimburse for the same.

Respondent NSJBI prays for such other relief and remedies as are just and equitable under the premises.

Quezon City March 25, 2010.

ATTY. JOSE SAN JUAN

Counsel for the Defendant

123 GHJ St. Quezon City

Roll No. 12345



Copy Furnished:

Atty. Juan Castillo



EXPLANATION

Due to lack of available messengerial staff during the material time copy of the foregoing pleading will be served upon the addressee by registered mail as shown by a registry receipt hereto attached.







Juan Dela Cruz

Complainant

-versus-



Respondent

X---------------------------------------------------X



-versus-


Third-Party Respondent

REPLY

(TO THE ANSWER to the THIRD-PARTY Complaint with Counter Claim)

RESPONDENT AND THIRD-PARTY COMPLAINANT (NSJBI), through counsel most respectfully states:

1. The baseless and desperate denial of GSIS to comply with what is being legally mandated of it fell short of any reasonable and legal argument to support its claims.

2. The Project Agreement entered into between the NSJBI and GSIS which covers the subject property in dispute, clearly grants NSJBI the power to sell and dispose of the units constructed therein to interested and prospective buyers. The aforesaid power and authority is embedded in the Article IV of the Project Agreement which reads in this wise:

ARTICLE IV Selling cost of the Condominium Units

4.01 The DEVELOPER commits, as it does hereby commits, to sell and market completed condominium units as its own expense and account, at the following approved selling prices, to wit:

XXX XXX XXX

3. Pursuant to the above mentioned provision , NSJBI entered into a Contract of Sale with herein complainant with the belief that GSIS will release the title thereof to the buyer. However, GSIS anchors its refusal on two grounds: the Loan Agreement between GISSI and NSJBI and the refusal on termination of the Project Agreement.

4. The loan Agreement allows NSJBI to continue to sell the units used as collaterals. Indubitably, when GSIS authorized NSJBI to sell the units automatically binds itself to release the titles thereof after payment of the corresponding price of the unit. Settled is the rule that in interpreting a contract, the intention of the parties should be taken into account.

5. Verily, it is the intention of GSIS and NSJBI that notwithstanding the existence of a loan agreement, NSJBI would continue to sell the units mortgaged with the reciprocal obligation on the part of GSIS to release the title on the subject unit upon payment of the mortgage amount corresponding to it. If such was not the intention of the parties, the authority to sell would be ineffective and useless. More importantly third persons, the buyers in this case, would certainly be prejudiced.

6. O the other hand the contention of the GSIS that the Project Agreement was supplemented and amended and later on terminated due to non-compliance of NSJBI does not have anything to do with the issue in this case.

7. For one, the amendments being raised by GSIS pertain only to extension and duration of time for the construction of the buildings and condominium units. Nowhere in said amendments contain that the authority of NSJBI to sell the properties was revoked by GSIS.

8. In the same vein, the termination of the Project Agreement and the Loan Agreement took place after the subject unit was sold to the complainant.

9. Perforce, based on the legal and factual background of this case, it is undeniable, that it is GSIS who has an obligation to the complainant and not NSJBI.

PRAYER

WHEREFORE, respondent and third-party complainant NSJBI, most respectfully prays that judgment be rendered dismissing the instant complaint against NSJBI for utter lack of merit.

Other just and equitable relief are likewise prayed for.

RESPECTFULLY SUBMITTED

March 30, 2009, Quezon City

ATTY. JOSE SAN JUAN



Roll No. 12345



Explanation

The foregoing Reply was filed with this Honorable Office and served upon the other party through registered mail due to the distance and lack of office personnel.

Copy Furnished:

Atty. Juan Castillo



Atty. Carlos de Jesus

Counsel for the Third-Party Defendant

GSIS Headquarters, Financial Center

Roxas Blvd. Pasay City.







Juan Dela Cruz

Complainant

-versus-



Respondent

X---------------------------------------------------X



-versus-


Third-Party Defenedant

POSITION PAPER

REPONDENT AND THIRD-PARTY COMPLAINT (NSJBI), through counsel, most respectfully this position paper, to wit:

I.

STATEMENT OF THE CASE

This case arose from the complaint dated February 18, 2004 filed by complainant Juan dela Cruz that the respondent New San Jose Builders, Inc. be ordered to coordinate with the GSIS as regards the condominium unit subject. Matter of the compliant and remit the amount corresponding the GSISs share on the selling price of the subject condominium unit; to prepare the corresponding and final Deed of Absolute Sale for the execution of the parties and GSIS as owner of the GSIS Metro Homes particularly, of the subject condominium unit; for the cancellation of the license by this Honorable Board to respondent NSJBI. Complainant also seeks damages, attorneys fees and cost of suit.

In its Third-party complaint, respondent and third-party complaint NSJBI that in the event that it held liable for any amount to the complainant, third-party respondent GSIS should be ordered to reimburse it for the same.

II.

STATEMENT OF FACTS

1. Respondent NEW SAN JOSE BUILDERS, INC. (NSJBI) is a corporation organized and existing under the Philippine laws with principal address at 234 ASD St. Quezon City.

a. Sometime in 1992 respondent NSJBI and GSIS entered into a Project Agreement whereby NSJBI undertook to develop the property of GSIS consisting of of several parcels of land. Located in Pureza St. Sta Mesa Manila.

b. NSBI undertook to construct and develop the said property in a turnkey basis of fifty (50) 4-storey walk up condominium with 3,400 units.

c. The GSIS was to underwrite the financing needs of the buyers and the acquisition of completed units.

d. The proceeds of the sale was supposed to be divide by the between NSJBI and GSIS according to the agreed portion.

2. Sometime in 1997 respondent NSJBI entered into a loan agreement with the GSIS wherein the latter extended Php 1,000,000.00.

a. The loan was secured by several properties then being developed by respondent NSJBI including the right on the improvements of a property already owned by the GSIS.

b. The proceeds were used to finance new projects and for the completion of the development of some of the properties offered as collateral.

c. Under the loan agreement, the GSIS gave its consent to the sale of the mortgaged properties and condominium units by NSJBI subject to the condition for the mortgage obligation.

d. Pursuant to the agreement, respondent NSJBI continued to market the aforementioned condominium units to third parties subject to remitting the shares of GSIS.

e. Likewise pursuant to the arrangement, respondent NSJBI was allowed to redeem from the GSIS the titles of individual units upon payment of their corresponding mortgage value.

f. Subsequently, a deed of absolute sale was executed by NSJBI in favor of complainants for the subject units.

g. Right after the payment of the complainant of the subject condominium and prior to the filing of the instant complaint respondent NSJBI had requested for the release of the title thereof form the GSIS because it is ready and willing to remit the share of the condominium units and the corresponding mortgage value of its right in the same. Likewise, NSJBI requested GSIS to sign the aforementioned Deed of Absolute Sale in favor of the complainant.

h. Thus, NSJBI made demands to GSIS asking that the condominium certificate of title for the complainants unit be released and that the same Deed of Absolute Sale of the subject property be signed.

i. For reasons unknown, the GSIS has yet to act on respondent NSJBIs request for the release of the tiles and for it to sing the same Deed of Absolute Sale. However, possession of the subject unit has been delivered to the complainant upon their payment of the purchase price.

III.

ISSUES

1. Whether or not complainant has a cause of action against respondent NSJBI.

2. Whether or not complainant is liable to respondent NSJBI for damages.

3. Whether or not respondent-third party complainant NSJBI is entitled to its claims against third-party respondent GSIS.

IV.

DISCUSSION

Being interrelated, the issues in this case will be discussed in seriatim.

Complainant has no cause of action against the defendant NSJBI and their complaint states none. Complainant in their complaint admitted that GSIS is the owner of the GSIS Metro Homes.

In the Deed of Absolute Sale it is clearly stipulated that NSJBI has assigned all its rights, interest, and participation over the subject condominium unit to GSIS.

Moreover, since the title to the subject property is in the same and possession of GSIS, respondent NSJBI obviously will not be able to comply with the request of the complainant to release to them the aforementioned certificate of title over the subject property.

As aforementioned, immediately after the full payment by the complainant of the subject condominium units purchase price and prior to filing of the instant complaint, respondent NSJBI had already requested for the release of the title from GSIS because it is ready and willing to remit the share of GSIS in the corresponding mortgage value of its right in the same. Likewise, NSJBI requested GSIS to sign the aforementioned Deed of Absolute Sale in favor of the complainant. It is GSIS which is up to now has yet to act on respondent NSJBIs request for the release of the title and for the signing of the Deed of Absolute Sale.

The baseless and desperate denial of GSIS to comply with what being leggaly is mandated of it fell short of any reasonable and legal argument to support its claim.

The Project Agreement entered into between the NSJBI and GSIS which covers the subject property in dispute, clearly grants NSJBI the power to sell and dispose of the units constructed therein to interested and prospective buyers. The aforesaid power and authority is embedded in Article IV of the Project Agreement

The loan agreement allows NJSBI continue to sell the units used as collateral. Article IV on warranties and Representations, particularly Section 6.2 provides that BORROWERS-MORTAGAGOR may continue to sell the 366 housing units, the 102 condominium units and its right on the 240 condominium unit.

Verily, the intention of GSIS and NSJBI that despite the existence of the loan agreement, NSJBI would continue to sell the units mortgaged, with the reciprocal obligation on the part of GSIS to release the title on the subject unit upon payment of mortgage amount corresponding to it. If such was not the intention of the parties, the authority to sell would be ineffective and useless. More importantly, third persons, the buyers in this case, would certainly be prejudiced.

PRAYER

WHEREFORE, respondent and third-party complainant NSJBI, most respectfully prays that judgment be rendered dismissing the instant complaint against NSJBI for utter lack of merit and to award it the damages it prayed for.

In the remote possibility that respondent NJSBI is held liable for any amount to complaints, respondent GSIS be ordered to reimburse NSJBI for the same.

Other just and equitable reliefs are likewise prayed for.

RESPECFULLY SUBMITTED

April 12, 2009, Quezon City

ATTY. JOSE SAN JUAN



Roll No. 12345



Explanation

The foregoing Reply was filed with this Honorable Office and served upon the other party through registered mail due to the distance and lack of office personnel.

Copy Furnished:

Atty. Juan Castillo










Kalayaan Avenue Corner Mayaman Street



MALACAANG PALACE

MANILA

JUAN DELA CRUZ

Complainant,

-versus-

HLURB CASE NO._______

NEW SAN JOSE BUILDERS, INC., Represented by its President, REY VERGARA and the GOVERNMENT SERVICE INSURANCE SYSTEM (GSIS),

Respondents.

x----------------------------------------------------------------------------------x

NOTICE OF APPEAL

Respondent GOVERNMENT SERVICE INSURANCE SYSTEM (GSIS), by counsel, respectfully gives notice that it is appealing to the Office of the President the Decision dated 30 July 2009 of the Third Division, Board of Commissioners, Housing and Land Use Regulatory Board (HLURB) in HLURB Case No.________ entitled Juan dela Cruz vs. New San Jose Biulders Inc. represented by its President Rey Vergara and the Government Service Insurance System (GSIS), denying the separate appeals filed by respondent GSIS and respondent NSJBI.

A copy of the decision of the Third Division, Board of Commissioners, Housing and Land Use Regulatory Board (HLURB) was received by respondent GSIS on 11 September 2009.

Pasay City for Manila, 14 September 2009.





Roll No. 12345



E X P L A N A T I O N

In compliance with Section 11, Rule 13 of the Rules of Court, as amended, counsel respectfully manifests that service of the foregoing Notice of Appeal was done by registered mail, personal service not being practicable due to distance, time and personnel constraints.

COPY FURNISHED:

Atty. Juan Castillo



Atty. Jose San Juan



Ms. Editha U. Barrameda

Regional Officer, ENCRFO

HLURB, Kalayaan Ave., cor.

Mayaman St., Diliman

Quezon City



BOARD OF COMMISSIONERS

Kalayaan AveNUE, CorNER Mayaman StREET



MALACAANG PALACE

MANILA

JUAN DELA CRUZ

Complainants,

-versus-

HLURB CASE NO.:_____

NEW SAN JOSE BUILDERS, INC.,

Respondents.

x----------------------------------------x

NEW SAN JOSE BUILDERS, INC.,

Third-Party Complainant,

-versus-

GOVERNMENT SERVICE INSURANCE SYSTEM (GSIS),

Third-Party Respondent.

x----------------------------------------------------------------------------------x

APPEAL MEMORANDUM

Third-Party Respondent-Appellant GOVERNMENT SERVICE INSURANCE SYSTEM (GSIS), by counsel, respectfully appeals to the Honorable Office of the President, in accordance with Rule XXI of the 2004 Rules of Procedure of the Housing and Land Use Regulatory Board (HLURB), the HLURB Board of Commissioners, Second Division, Resolution dated September 25, 2008 (Annex A), which was received by appellant GSIS on 09 October 2008 and which decreed as follows:

WHEREFORE, the instant motion for reconsideration is DENIED while the decision of this Board dated June 24, 2008 is maintained.

So ordered.

STATEMENT OF FACTS

Third-Party Respondent-Appellant GSIS, is a social insurance institution created under Commonwealth Act No. 186, as amended, and operating under its present Charter, Republic Act No. 8291, otherwise known as GSIS Act of 1997, with principal office address at the GSIS Headquarters Building, Financial Center Area, Pasay City.

Third-Party Complainant NSJBI is a corporation duly organized and existing by virtue of and under Philippine Laws, with principal address at the President Tower, 81 Timog Avenue, Diliman, Quezon City.

In or about April 1992, the GSIS and the NSJBI executed a Project Agreement whereby the NSJBI undertook to develop the property of the GSIS and construct fifty (50) four-story condominium buildings a project known as GSIS Metro Homes located at Pureza Street, Sta. Mesa Boulevard, Manila (Annex B). The NSJBI undertook to sell and market the completed condominium units at its own expense and account. The proceeds of the sale were supposed to be divided between the NSJBI and the GSIS according to an agreed proportion.1

The Project Agreement was supplemented by a Supplemental Agreement dated January 1994 and was amended with a Consolidated Amended Agreement by the GSIS and the NSJBI in November of 1994 and further supplemented in 1996. The Consolidated Amended Agreement likewise indicated the sharing of the sales proceeds.

The Project Agreement, as supplemented and amended, was, however, terminated by the GSIS, through a letter dated November 27, 2003 (Annex C), duly served upon the NSJBI pursuant to the Termination Clause of the Project Agreement. The GSIS anchored the termination on the continued failure of the NSJBI to comply with the provisions of the Project Agreement.

Edilberto E. Presto and Benilda B. Presto claimed to have bought Unit CE-20, Building 27 of the GSIS Metro Homes, covered by Condominium Certificate of Title (CCT) No. 27228 of the Registry of Deeds of Manila, by virtue of a Memorandum of Agreement (Contract to Sell) executed with the NSJBI on April 18, 1996 and to have paid in full the outstanding balance of the purchase price on November 20, 1999. According to them, they demanded from the NSJBI the delivery of the CCT of the property but the NSJBI could not comply.

Thus, the Prestos filed a complaint dated February 18, 2004 against the NSJBI with the Expanded National Capital Region Field Office (ENCRFO), HLURB. They prayed, among others, that the ENCRFO, HLURB order the NSJBI to remit to the GSIS the amount corresponding to its share in the selling price of the subject condominium unit and to prepare a final deed of absolute sale for execution between the parties and the GSIS, as owner of the GSIS Metro Homes.

The NSJBI filed its Answer with Third-Party Complaint and Counterclaim dated June 14, 2003, traversing the material allegations of the complaint and making the GSIS a third-party respondent. The NSJBI alleged that the possession of the subject condominium unit had been delivered to the complainants upon their payment of the purchase price; that right after the payment by the complainants of the subject condominium units purchase price and before the filing of the complaint, the NSJBI had requested the release of the title thereof from the GSIS because the NSJBI was ready and willing to remit the share of the GSIS in the proceeds of the sale of the condominium unit; and that the NSJBI requested the GSIS to sign a deed of absolute sale in the complainants favor. The NSJBI counterclaimed for damages and attorneys fees and prayed that in the remote possibility that the NSJBI was held liable for any amount to the complainants, the GSIS be ordered to reimburse the NSJBI for it.

The GSIS, for its part, filed its Answer (to the Third-Party Complaint) with Counterclaim dated August 17, 2004, traversing the material allegations of the Third-Party Complaint and denying that the NSJBI was ready and willing to release the share of the GSIS in the proceeds of the sale of the condominium unit and that the GSIS was in possession of the CCT of the condominium unit in dispute. It pleaded by way of affirmative and special defenses that the NSJBI has no cause of action against the GSIS; that the GSIS has no obligation to execute a deed of absolute sale in the complainants favor, where the NSJBI did not remit the GSIS share in the proceeds of the sale; and that the NSJBI has violated the Project Agreement, as supplemented and amended, resulting in the termination thereof by the GSIS pursuant to the stipulations therein. The GSIS indicated that it should be the NSJBI that should be held liable for the complainants claim. The GSIS counterclaimed for Php 300,000.00 as moral damages, Php 300,000.00 as exemplary damages and Php 1,000,000.00 as liquidated damages.

The NSJBI filed a Reply to the Answer to the Third-Party Complaint with Counterclaim dated September 30, 2004 after filing motions for extension of time to do so.

Meanwhile, the GSIS filed a Motion to Expunge Third-Party Complainants Motions for Extension of Time to File Reply (and Reply, if already filed).

The HLURB-ENCRFO held a preliminary conference on separate dates, during which the NSJBI, whose counsel was absent a number of times, offered no evidence, much less an allegation, that it remitted to the GSIS the latters share in the proceeds of the sale of the subject condominium unit and that the GSIS was in possession of the CCT for the condominium unit.

On 01 March 2005, upon oral manifestation and motion of the respective counsels of the complainants and the GSIS, HLURB-ENCRFO ordered the parties to file their respective Position Paper (with affidavits of witnesses and documentary evidences) and draft Decision within 30 days from receipt of the written Order.

The GSIS complied with the above-mentioned order. In its Position Paper, accompanied by the Affidavit of GSIS Housing and Real Property Development Group Senior Vice President Arnaldo C. Cuasay (with annexes 1 to 5), it was stated that SVP Cuasay was not aware of any remittance made by the NSJBI to the GSIS of the latters share of the proceeds of the alleged sale of the subject condominium unit, as, indeed, the NSJBI had not remitted the GSISs share, and that CCT No. 27228, which covers Unit CE-20, Building 27 of GSIS City Metro Homes, is not in the custody of the GSIS.

On 27 September 2007, the HLURB-Expanded National Capital Region Field Office (ENCRFO) rendered a decision (1) ordering the respondent NSJBI to immediately deliver to the complainant Spouses Ediberto and Benilda Presto the corresponding CCT covering Unit CE-20 of Bldg. 27 of the GSIS City Metro Homes, free from all liens and encumbrances; or in the alternative, for the Register of Deeds of Manila to cancel CCT No. 27228 and issue a new one in favor of the herein complainant; and (2) dismissing the third party complaint for lack of jurisdiction.

On 12 December 2007, appellant GSIS, filed its Appeal Memorandum with the Board of Commissioners of the HLURB, in accordance with Rule XVI of the 2004 Rules of Procedure of the HLURB, on the ground that the HLURB-ENCRFO gravely erred in ordering the cancellation of CCT No. 27228 covering the subject condominium unit without ordering the NSJBI to deliver the GSISs share in the proceeds of the sale with legal interest and to pay the GSIS moral, exemplary, and liquidated damages.

On 14 December 2007, respondent NSJBI likewise filed its appeal memorandum on the ground that the Regional Office erred in finding that the complainants have a valid cause of action against respondent NSJBI and in dismissing the third-party complaint.

On June 24, 2008, the Second Division of the Board of Commissioners, HLURB, rendered its decision on the separate appeals filed by respondents NSJBI and third party respondent GSIS, which was received by appellant GSIS on July 10, 2008 and which decreed as follows:

Wherefore, premises considered, the decision of the Regional Office is hereby SET ASIDE and a new decision is rendered as follows:

1. Respondent NSJBI is ordered to remit to GSIS its share in the proceeds of the sale in the subject unit;

2. Respondent GSIS is ordered to immediately deliver to complainants the title covering Unit Ce-20, Bldg. 27, GSIS City Metrohomes, free from liens and encumbrances.

SO ORDERED.

On 06 August 2008, appellant GSIS, filed its Motion for Partial Reconsideration with the Board of Commissioners of the HLURB, in accordance with Rule XXI of the 2004 Rules of Procedure of the HLURB, on the ground that the Second Division of the Board of Commissioners, HLURB gravely erred in not ordering the NSJBI to pay GSIS legal interest on top of its share in the proceeds of the sale and moral, exemplary, and liquidated damages

On 09 October 2008, third-party respondent-appellant GSIS, received a copy of the Honorable Board of Commissioners Notice of Resolution dated 06 October 2008, requiring the GSIS to inform the Board of the receipt of its Resolution within five (5) days from receipt of the notice together with a copy of the Resolution, which was complied with by the GSIS on 10 October 2008 and is filing this Appeal Memorandum within the 15-day period prescribed by the 2004 Rules of Procedure, before the Honorable Office of the President.

GROUND FOR THE APPEAL

The Second Division of the Honorable Board of Commissioners, HLURB gravely erred in ruling that the Board does not have the jurisdiction to determine the rate of interest to be observed and its reckoning point and is not empowered to award moral, exemplary, and liquidated damages.

ARGUMENTS

The NSJBI is liable to the GSIS for legal interest on top of its share in the proceeds of the sale, and moral, exemplary and liquidated damages.

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The GSIS is entitled to recover legal interest on top of its shares in the proceeds of the sale of the subject condominium unit pursuant to Article 2209 of the Civil Code which provides:

If the obligation consists in the payment of a sum of money, and the debtor incurs in delay, the indemnity for damages, there being no stipulation to the contrary, shall be the payment of the interest agreed upon, and in the absence of stipulation, the legal interest, which is six percent per annum.

Article 2209 of the Civil Code, as above-quoted, specifies the appropriate measure of damages where the obligation breached consisted of the payment of sum of money. Article 2209 was explained by the Supreme Court in State Investment House, Inc. vs. Court of Appeals, 198 SCRA 390 (1991) as follows:

The appropriate measure for damages in case of delay in discharging an obligation consisting of the payment of a sum of money, is the payment of penalty interest at the rate agreed upon; and in the absence of a stipulation of a particular rate of penalty interest, then the payment of additional interest at a rate equal to the regular monetary interest; and if no regular interest had been agreed upon, then payment of legal interest or six percent (6%) per annum.

Hence, even in the absence of a stipulation on interest, under Article 2209 of the Civil Code, third party respondent GSIS would still be entitled to recover the proceeds of the sale of the subject condominium unit with interest.

The GSIS has sustained moral damages, which, if given monetary value, would amount to Php 300,000.00, in view of the besmirched reputation it suffered. The NSJBI sold the subject condominium unit in the name of the GSIS, unreasonably withheld the latters share in the proceeds, and conveyed to the buyers the impression that the GSIS was withholding delivery of the title with the intent to defraud the buyers. Moral damages include besmirched reputation which a corporation may suffer. In the case of SIMEX International (Manila) Incorporated vs. Court of Appeals, G.R. No. 88013, 183 SCRA 360, (1990), the Supreme Court ruled that:

A corporation is not as a rule entitled to moral damages because, not being a natural person, it cannot experience physical suffering or such sentiments as wounded feelings, serious anxiety, mental anguish and moral shock. The only exception to this rule is where the corporation has a good reputation that is debased, resulting in its social humiliation.

Clearly, the exception applies to GSIS, whose good reputation was debased thus entitling it to moral damages. The High Court, in a number of cases (i.e. Asset Privatization Trust vs. CA, 300 SCRA 579 [1998]; Maersk Tabacalera Shipping Agency (Filipina), Inc. vs. CA, 197 SCRA 646 [1991]), has sustained the award of moral damages to a corporation despite the general rule that moral damages cannot be awarded to an artificial person which has no feelings, emotions or senses, and which cannot experience physical suffering and mental anguish (LBC Express, Inc. vs. CA, 236 SCRA 602 [1994]; see also Solid Homes, Inc. vs. CA, 275 SCRA 267 [1997]). A corporation may have a good reputation which, if besmirched, may also be a ground for the award of moral damages (Mambulao Lumber Co. vs. PNB, 22 SCRA 359 [1968]). It must be noted that trial courts are generally given discretion to determine the amount of moral damages, the same being incapable of pecuniary estimation.

The GSIS is likewise entitled, under the circumstances and under Article 2232 of the Civil Code, to exemplary damages which, if given monetary value, would amount to Php 300,000.00. Article 2232 of the Civil Code provides that in a contractual or quasi-contractual relationship, exemplary damages may be awarded if the defendant had acted in a wanton, fraudulent, reckless, oppressive or malevolent manner. In withholding from the GSIS its share in the proceeds of the sale of the condominium unit, the respondent NSJBI certainly acted in a wanton, fraudulent, reckless, oppressive or malevolent manner.

In addition, the NSJBI is liable to the GSIS for liquidated damages in the sum of Php 1,000,000.00, which is stipulated in the Project Agreement, as supplemented and amended, thus:

17.09

Should the DEVELOPER breach or violate any provision of this agreement, including the Annexes, the DEVELOPER shall pay the GSIS liquidated damages in the sum of ONE MILLION (Php 1,000,000.00) PESOS for non-compliance thereof. In addition, all improvements introduced into the land shall accrue to the Government Service Insurance System.

The liability for damages is reinforced by the fact that the NSJBI has violated the basic precept in human relations enshrined in Article 19 of the New Civil Code which states the Every person shall, in the exercise of his rights or in the performance of his duties, act with justice, give everyone his due and observe honesty and good faith.

The HLURB has jurisdiction to order the NSJBI to pay damages to GSIS.

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The HLURB has jurisdiction to hold the respondent NSJBI liable to the GSIS for the above-mentioned amounts. The competence of the HLURB to award damages although this is an essentially judicial power exercisable ordinarily only by the courts of justice was affirmed by the Supreme Court in the case of Solid Homes Inc. vs. Payawal, 177 SCRA 72, 79 (1989), thus:

On the competence of the Board to award damages, we find that this is part of the exclusive power conferred upon it by PD No. 1344 to hear and decide "claims involving refund and any other claims filed by subdivision lot or condominium unit buyers against the project owner, developer, dealer, broker or salesman." It was therefore erroneous for the respondent to brush aside the well-taken opinion of the Secretary of Justice that

Such claim for damages which the subdivision condominium buyer may have against the owner, developer, dealer or salesman, being a necessary consequence of an adjudication of liability for non-performance of contractual or statutory obligation, may be deemed necessarily included in the phrase "claims involving refund and any other claims" used in the aforequoted subparagraph C of Section 1 of PD No. 1344. The phrase "any other claims" is, we believe, sufficiently broad to include any and all claims which are incidental to or a necessary consequence of the claims/cases specifically included in the grant of jurisdiction to the National Housing Authority under the subject provisions.

The same may be said with respect to claims for attorney's fees which are recoverable either by agreement of the parties or pursuant to Art. 2208 of the Civil Code (1) when exemplary damages are awarded and (2) where the defendant acted in gross and evident bad faith in refusing to satisfy the plaintiffs plainly valid, just and demandable claim.

xxx xxx xxx

Besides, a strict construction of the subject provisions of PD No. 1344 which would deny the HSRC the authority to adjudicate claims for damages and for damages and for attorney's fees would result in multiplicity of suits in that the subdivision/condominium buyer who wins a case in the HSRC and who is thereby deemed entitled to claim damages and attorney's fees would be forced to litigate in the regular courts for the purpose, a situation which is obviously not in the contemplation of the law. (Emphasis supplied.) 7

As a result of the growing complexity of the modern society, it has become necessary to create more and more administrative bodies to help in the regulation of its ramified activities. Specialized in the particular fields assigned to them, they can deal with the problems thereof with more expertise and dispatch than can be expected from the legislature or the courts of justice. This is the reason for the increasing vesture of quasi-legislative and quasi-judicial powers in what is now not unreasonably called the fourth department of the government.

Statutes conferring powers on their administrative agencies must be liberally construed to enable them to discharge their assigned duties in accordance with the legislative purpose. 8 Following this policy in Antipolo Realty Corporation v. National Housing Authority, 9 the Court sustained the competence of the respondent administrative body, in the exercise of the exclusive jurisdiction vested in it by PD No. 957 and PD No. 1344, to determine the rights of the parties under a contract to sell a subdivision lot.

This was reaffirmed by the Court in the case of C.T. Torres Enterprises, Inc. vs. Hibionada, 191 SCRA 268, 272 (1990), which decreed as follows:

In the Solid Homes case for example the Court affirmed the competence of the Housing and Land Use Regulatory Board to award damages although this is an essentially judicial power exercisable ordinarily only by the courts of justice. This departure from the traditional allocation of governmental powers is justified by expediency, or the need of the government to respond swiftly and competently to the pressing problems of the modern world. (Underling supplied)Suffice it to say that the HLURB is endowed with jurisdiction, authority and competence to award damages prayed for by third party respondent GSIS. To rule that the GSIS has to enforce its rights in another forum would result in multiplicity of suits and splitting of jurisdiction.

Relief Sought

Wherefore, premises considered, it is most respectfully prayed that the Honorable Office order the respondent NSJBI to pay GSIS legal interest in addition to its share in the proceeds of the sale of the subject condominium unit, counted from the date of payment of the first installment until delivery of the share is effected and to pay the GSIS Php 300,000.00 as moral damages, Php 300,000.00 as exemplary damages and Php 1,000.000.00 as liquidated damages, with costs against the NSJBI.

The GSIS prays for such other forms of relief as are consistent with law, justice and equity under the premises.

Pasay City for Manila, 17 October 2008.





Roll No. 12345



E X P L A N A T I O N

In compliance with Section 11, Rule 13 of the Rules of Court, as amended, counsel respectfully manifests that service of the foregoing Appeal Memorandum was done by registered mail, personal service not being practicable due to distance, time and personnel constraints.

COPY FURNISHED:

BOARD OF COMMISSIONERS

SECOND DIVISION


Kalayaan Avenue Corner Mayaman Street


Atty. Juan Castillo



Atty. Jose San Juan



Ms. Editha U. Barrameda

Regional Officer, ENCRFO

HLURB, Kalayaan Ave., cor.

Mayaman St., Diliman

Quezon City

ARTICLE V SHARING OF THE SALES PROCEEDS

5.01 The GSIS share of Php257.5 Million to be generated under the project proposal shall be recovered by way of payment of 15% of the gross sales proceeds on completed unit. However, the payment shall in no case be less than Php15,147.058 per month starting on the 8th month from the date of the signing of the contract.

Housing Land Use Regulatory Board Proceedings

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