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FACTS

Francel Realty Corporation executed a Contract to Sell to Francisco Sycip a property (townhouse) in Bacoor, Cavite.

The Contract states that in case Sycip fails to pay two or more instalments: :
the obligation will become due and demandable; Francel Realty would be able to take possession of the property again;

Sycip would vacate the property without need for a judicial order;

and that the payments made would be considered as rentals for use of the property in question.

Sycip was not able to pay since October 30, 1990 despite demands made until September 26, 1992; he also refused to vacate the premises.

Hence, Francel Realty filed an action in the MTC of Bacoor to compel Sycip to vacate the premises, pay the monthly rental from the time he failed to do so, and pay attorneys fees and expenses of litigation.

I stopped paying the monthly dues because the townhouse sold to me was in a defective condition

Sycip claims that:


Ive filed a complaint for unsound real estate business practice in the Housing and Land Use Regulatory Board (HLURB) (so the MTC supposedly has jurisdiction over the case).

the answer was filed beyond 10 days after the service of summons. COMPLAINT DISMISSED for lack of jurisdiction; it was the HLURB who had jurisdiction over it.

However, Francel Realty should pay Sycip moral and exemplary damages, attorneys fees and other costs.

MTC RULING

ISSUES
Does the MTC have jurisdiction over the complaint? Is the award of damages justified?

The award of damages was erroneous.

No, the MTC doesnt have jurisdiction over the case

RULING

This case is not a simple one which arose from the failure

Sycip has a right to stop paying monthly amortizations IF it was proven that Francel Realty had, indeed, failed to develop the property according to the approved plans.

of a lessee to pay the rents


or comply with the conditions of the lease agreement.

On jurisdiction
Hence, the case essentially
involves the question of w/n Francel Realty had developed the property properly & consequently, has a right to claim payment from Sycip.

Since the latter had already filed a case with HLURB, the petitioners recourse should have been to file a counterclaim in the HLURB.

2.

However, the award of damages was erroneous. According to the rules of procedure, a party may only file a counterclaim if the court has jurisdiction to entertain the claim.

Hence, Sycips counterclaim for damages should not have been awarded, given that the court never had jurisdiction over Francel Realtys claim from the beginning.

Even assuming that the MTC had jurisdiction, however the award of damages to private respondent must be disallowed because:

The MTC decision itself stated that the answer with its counterclaim was filed out of time or more than 10 days from private respondent's receipt of summons. In effect, private respondent did not make any counterclaim.
Moreover, a reading of the MTC decision showed no justification for the award of moral and exemplary damages and attorney's fees

The lack of jurisdiction may be raised at any stage of the proceedings, even on appeal. It is not lost by waiver or estoppel.

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