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166836

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RepublicofthePhilippines
SUPREMECOURT
Manila

FIRSTDIVISION

G.R.No.166836September4,2013

SANMIGUELPROPERTIES,INC.,PETITIONER,
vs.
SEC.HERNANDOB.PEREZ,ALBERTC.AGUIRRE,TEODOROB.ARCENAS,JR.,MAXYS.ABAD,JAMES
G. BARBERS, STEPHEN N. SARINO, ENRIQUE N. ZALAMEA, JR., MARIANO M. MARTIN, ORLANDO O.
SAMSON,CATHERINER.AGUIRRE,ANDANTONIOV.AGCAOILI,RESPONDENTS.

DECISION

BERSAMIN,J.:

Thependencyofanadministrativecaseforspecificperformancebroughtbythebuyerofresidentialsubdivisionlots
intheHousingandLandUseRegulatoryBoard(HLURB)tocompelthesellertodeliverthetransfercertificatesof
title(TCTs)ofthefullypaidlotsisproperlyconsideredagroundtosuspendacriminalprosecutionforviolationof
Section25ofPresidentialDecreeNo.9571onthegroundofaprejudicialquestion.Theadministrativedetermination
isalogicalantecedentoftheresolutionofthecriminalchargesbasedonnondeliveryoftheTCTs.

Antecedents

Petitioner San Miguel Properties Inc. (San Miguel Properties), a domestic corporation engaged in the real estate
business, purchased in 1992, 1993 and April 1993 from B.F. Homes, Inc. (BF Homes), then represented by Atty.
Florencio B. Orendain (Orendain) as its duly authorized rehabilitation receiver appointed by the Securities and
ExchangeCommission(SEC),2 130 residential lots situated in its subdivision BF Homes Paraaque, containing a
totalareaof44,345squaremetersfortheaggregatepriceofP106,248,000.00.Thetransactionswereembodiedin
three separate deeds of sale.3 The TCTs covering the lots bought under the first and second deeds were fully
deliveredtoSanMiguelProperties,but20TCTscovering20ofthe41parcelsoflandwithatotalareaof15,565
squaremeterspurchasedunderthethirddeedofsale,executedinApril1993andforwhichSanMiguelProperties
paidthefullpriceofP39,122,627.00,werenotdeliveredtoSanMiguelProperties.

Onitspart,BFHomesclaimedthatitwithheldthedeliveryofthe20TCTsforparcelsoflandpurchasedunderthe
thirddeedofsalebecauseAtty.Orendainhadceasedtobeitsrehabilitationreceiveratthetimeofthetransactions
after being meanwhile replaced as receiver by FBO Network Management, Inc. on May 17, 1989 pursuant to an
orderfromtheSEC.4

BFHomesrefusedtodeliverthe20TCTsdespitedemands.Thus,onAugust15,2000,SanMiguelPropertiesfiled
a complaintaffidavit in the Office of the City Prosecutor of Las Pias City (OCP Las Pias) charging respondent
directorsandofficersofBFHomeswithnondeliveryoftitlesinviolationofSection25,inrelationtoSection39,both
ofPresidentialDecreeNo.957(I.S.No.002256).5

Atthesametime,SanMiguelPropertiessuedBFHomesforspecificperformanceintheHLURB(HLURBCaseNo.
REM08240011183),6prayingtocompelBFHomestoreleasethe20TCTsinitsfavor.

IntheirjointcounteraffidavitsubmittedinI.S.No.002256,7respondentdirectorsandofficersofBFHomesrefuted
SanMiguelPropertiesassertionsbycontendingthat:(a)SanMiguelPropertiesclaimwasnotlegallydemandable
because Atty. Orendain did not have the authority to sell the 130 lots in 1992 and 1993 due to his having been
replacedasBFHomesrehabilitationreceiverbytheSEConMay17,1989(b)thedeedsofsaleconveyingthelots
wereirregularforbeingundatedandunnotarized(c)theclaimshouldhavebeenbroughttotheSECbecauseBF
Homeswasunderreceivership(d)inreceivershipcases,itwasessentialtosuspendallclaimsagainstadistressed
corporation in order to enable the receiver to effectively exercise its powers free from judicial and extrajudicial
interference that could unduly hinder the rescue of the distressed company and (e) the lots involved were under

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custodia legis in view of the pending receivership proceedings, necessarily stripping the OCP Las Pias of the
jurisdictiontoproceedintheaction.

OnOctober10,2000,SanMiguelPropertiesfiledamotiontosuspendproceedingsintheOCPLasPias,8citing
the pendency of BF Homes receivership case in the SEC. In its comment/opposition, BF Homes opposed the
motiontosuspend.Inthemeantime,however,theSECterminatedBFHomesreceivershiponSeptember12,2000,
promptingSanMiguelPropertiestofileonOctober27,2000areplytoBFHomescomment/oppositioncoupledwith
amotiontowithdrawthesoughtsuspensionofproceedingsduetotheinterveningterminationofthereceivership.9

On October 23, 2000, the OCP Las Pias rendered its resolution,10 dismissing San Miguel Properties criminal
complaint for violation of Presidential Decree No. 957 on the ground that no action could be filed by or against a
receiver without leave from the SEC that had appointed him that the implementation of the provisions of
Presidential Decree No. 957 exclusively pertained under the jurisdiction of the HLURB that there existed a
prejudicial question necessitating the suspension of the criminal action until after the issue on the liability of the
distressed BF Homes was first determined by the SEC en banc or by the HLURB and that no prior resort to
administrativejurisdictionhadbeenmadethatthereappearedtobenoprobablecausetoindictrespondentsfornot
beingtheactualsignatoriesinthethreedeedsofsale.

On February 20, 2001, the OCP Las Pias denied San Miguel Properties motion for reconsideration filed on
November28,2000,holdingthatBFHomesdirectorsandofficerscouldnotbeheldliableforthenondeliveryofthe
TCTsunderPresidentialDecreeNo.957withoutadefiniterulingonthelegalityofAtty.Orendainsactionsandthat
thecriminalliabilitywouldattachonlyafterBFHomesdidnotcomplywithadirectiveoftheHLURBdirectingitto
deliverthetitles.11

SanMiguelPropertiesappealedtheresolutionsoftheOCPLasPiastotheDepartmentofJustice(DOJ),butthe
DOJSecretarydeniedtheappealonOctober15,2001,holding:

Afteracarefulreviewoftheevidenceonrecord,wefindnocogentreasontodisturbtherulingoftheCityProsecutor
ofLasPiasCity.EstablishedjurisprudencesupportsthepositiontakenbytheCityProsecutorconcerned.

There is no dispute that aside from the instant complaint for violation of PD 957, there is still pending with the
HousingandLandUseResulatoryBoard(HLURB,forshort)acomplaintforspecificperformancewheretheHLURB
is called upon to inquire into, and rule on, the validity of the sales transactions involving the lots in question and
enteredintobyAtty.OrendainforandinbehalfofBFHomes.

As early as in the case of Solid Homes, Inc. vs. Payawal, 177 SCRA 72, the Supreme Court had ruled that the
HLURB has exclusive jurisdiction over cases involving real estate business and practices under PD 957. This is
reiterated in the subsequent cases of Union Bank of the Philippines versus HLURB, G.R. [No.] 953364, June 29,
1992andC.T.TorresEnterprisesvs.Hilionada,191SCRA286.

ThesaidrulingsimplymeansthatunlessanduntiltheHLURBrulesonthevalidityofthetransactionsinvolvingthe
landsinquestionwithspecificreferencetothecapacityofAtty.OrendaintobindBFHomesinthesaidtransactions,
thereisasyetnobasistochargecriminallyrespondentsfornondeliveryofthesubjectlandtitles.Inotherwords,
complainant cannot invoke the penal provision of PD 957 until such time that the HLURB shall have ruled and
decidedonthevalidityofthetransactionsinvolvingthelotsinquestion.

WHEREFORE,theappealisherebyDENIED.

SOORDERED.12(Emphasissupplied)

TheDOJeventuallydeniedSanMiguelPropertiesmotionforreconsideration.13

RulingoftheCA

Undaunted,SanMiguelPropertieselevatedtheDOJsresolutionstotheCAoncertiorariandmandamus(C.A.G.R.
SPNo.73008),contendingthatrespondentDOJSecretaryhadactedwithgraveabuseindenyingtheirappealand
inrefusingtochargethedirectorsandofficersofBFHomeswiththeviolationofPresidentialDecreeNo.957.San
Miguel Properties submitted the issue of whether or not HLURB Case No. REM08240011183 presented a
prejudicialquestionthatcalledforthesuspensionofthecriminalactionforviolationofPresidentialDecreeNo.957.

In its assailed decision promulgated on February 24, 2004 in C.A.G.R. SP No. 73008,14 the CA dismissed San
MiguelPropertiespetition,holdingandrulingasfollows:

Fromtheforegoing,theconclusionthatmaybedrawnisthattheruleonprejudicialquestiongenerallyappliesto
civilandcriminalactionsonly.

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However, an exception to this rule is provided in Quiambao vs. Osorio cited by the respondents. In this case, an
issue in an administrative case was considered a prejudicial question to the resolution of a civil case which,
consequently,warrantedthesuspensionofthelatteruntilafterterminationoftheadministrativeproceedings.

Quiambao vs. Osorio is not the only instance when the Supreme Court relaxed the application of the rule on
prejudicialquestion.

In Tamin vs. CA involving two (2) civil actions, the Highest Court similarly applied the rule on prejudicial question
when it directed petitioner therein to put up a bond for just compensation should the demolition of private
respondentsbuildingprovedtobeillegalasaresultofapendingcadastralsuitinanothertribunal.

City of Pasig vs. COMELEC is yet another exception where a civil action involving a boundary dispute was
consideredaprejudicialquestionwhichmustberesolvedpriortoanadministrativeproceedingfortheholdingofa
plebisciteontheaffectedareas.

In fact, in Vidad vs. RTC of Negros Oriental, Br. 42, it was ruled that in the interest of good order, courts can
suspendactioninonecasependingdeterminationofanothercasecloselyinterrelatedorinterlinkedwithit.

Itthusappearsthatpublicrespondentdidnotactwithgraveabuseofdiscretionxxxwhenheappliedtheruleon
prejudicialquestiontotheinstantproceedingsconsideringthattheissueonthevalidityofthesaletransactionsxxx
byxxxOrendaininbehalfofBFHomes,Inc.,iscloselyintertwinedwiththepurportedcriminalculpabilityofprivate
respondents,asofficers/directorsofBFHomes,Inc.,arisingfromtheirfailuretodeliverthetitlesoftheparcelsof
landincludedinthequestionedconveyance.

All told, to sustain the petitioners theory that the result of the HLURB proceedings is not determinative of the
criminalliabilityofprivaterespondentsunderPD957wouldbetoespouseanabsurdity.Ifweweretoassumethat
theHLURBfindsBFHIundernoobligationtodelvethesubjecttitles,itwouldbehighlyirregularandcontrarytothe
endsofjusticetopursueacriminalcaseagainstprivaterespondentsforthenondeliveryofcertificatesoftitlewhich
theyarenotunderanylegalobligationtoturnoverinthefirstplace.(Boldemphasissupplied)

On a final note, absent grave abuse of discretion on the part of the prosecutorial arm of the government as
represented by herein public respondent, courts will not interfere with the discretion of a public prosecutor in
prosecutingordismissingacomplaintfiledbeforehim.Apublicprosecutor,bythenatureofhisoffice,isunderno
compulsion to file a criminal information where no clear legal justification has been shown, and no sufficient
evidenceofguiltnorprimafaciecasehasbeenestablishedbythecomplainingparty.

WHEREFORE, premises considered, the instant Petition for Certiorari and Mandamus is hereby DENIED. The
Resolutionsdated15October2001and12July2002oftheDepartmentofJusticeareAFFIRMED.

SOORDERED.15

TheCAdeniedSanMiguelPropertiesmotionforreconsiderationonJanuary18,2005.16

Issues

Aggrieved,SanMiguelPropertiesisnowonappeal,raisingthefollowingforconsiderationandresolution,towit:

THECOURTOFAPPEALSCOMMITTEDGRAVE,SERIOUSANDREVERSIBLEERRORSWHENIT
DISMISSED PETITIONERS CERTIORARI AND MANDAMUS PETITION TO ORDER AND DIRECT
RESPONDENT SECRETARY TO INDICT RESPONDENTS FOR VIOLATION OF SECTION 25, PD.
957INTHAT:

THEOBLIGATIONOFPRIVATERESPONDENTSTODELIVERTOPETITIONERTHETITLESTO20
FULLYPAID LOTS IS MANDATED BY SECTION 25, PD 957. IN FACT, THE OFFICE OF THE
PRESIDENTHADDULYCONFIRMEDTHESAMEPERITSDECISIONDATED27JANUARY2005IN
O.P.CASENO.03E203,ENTITLED"SMPIV.BFHOMES,INC.".

A FORTIORI, PRIVATE RESPONDENTS FAILURE AND/OR REFUSAL TO DELIVER TO


PETITIONERTHESUBJECTTITLESCONSTITUTESCRIMINALOFFENSEPERSECTIONS25AND
39, PD 957 FOR WHICH IT IS THE MINISTERIAL DUTY OF RESPONDENT SECRETARY TO
INDICTPRIVATERESPONDENTSTHEREFOR.

INANYEVENT,THEHLURBCASEDOESNOTPRESENTA"PREJUDICIALQUESTION"TOTHE
SUBJECT CRIMINAL CASE SINCE THE FORMER INVOLVES AN ISSUE SEPARATE AND
DISTINCT FROM THE ISSUE INVOLVED IN THE LATTER. CONSEQUENTLY, THE HLURB CASE
HAS NO CORRELATION, TIE NOR LINKAGE TO THE PRESENT CRIMINAL CASE WHICH CAN
PROCEEDINDEPENDENTLYTHEREOF.

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IN FACT, THE CRIMINAL CULPABILITY OF PRIVATE RESPONDENTS EMANATE FROM THEIR


MALA PROHIBITA NONDELIVERY OF THE TITLES TO TWENTY (20) FULLYPAID PARCELS OF
LANDTOPETITIONER,ANDNOTFROMTHEIRNONCOMPLIANCEWITHTHEHLURBSRULING
INTHEADMINISTRATIVECASE.

NONETHELESS, BY DECREEING THAT PETITIONERS CRIMINAL COMPLAINT IS PREMATURE,


BOTH THE COURT OF APPEALS AND RESPONDENT SECRETARY HAD IMPLIEDLY ADMITTED
THE EXISTENCE OF SUFFICIENT PROBABLE CAUSE AGAINST PRIVATE RESPONDENTS FOR
THECRIMECHARGED.17

ItisrelevantatthisjuncturetomentiontheoutcomeoftheactionforspecificperformanceanddamagesthatSan
MiguelPropertiesinstitutedintheHLURBsimultaneouslywithitsfilingofthecomplaintforviolationofPresidential
Decree No. 957. On January 25, 2002, the HLURB Arbiter ruled that the HLURB was inclined to suspend the
proceedings until the SEC resolved the issue of Atty. Orendains authority to enter into the transactions in BF
Homesbehalf,becausethefinalresolutionbytheSECwasalogicalantecedenttothedeterminationoftheissue
involvedinthecomplaintbeforetheHLURB.Uponappeal,theHLURBBoardofCommissioners(HLURBBoard),
citingthedoctrineofprimaryjurisdiction,affirmedtheHLURBArbitersdecision,holdingthatalthoughnoprejudicial
question could arise, strictly speaking, if one case was civil and the other administrative, it nonetheless opted to
suspenditsactiononthecasespendingthefinaloutcomeoftheadministrativeproceedingintheinterestofgood
order.18

Notcontentwiththeoutcome,SanMiguelPropertiesappealedtotheOfficeofthePresident(OP),arguingthatthe
HLURB erred in suspending the proceedings. On January 27, 2004, the OP reversed the HLURB Boards ruling,
holdingthusly:

ThebasiccomplaintinthiscaseisoneforspecificperformanceunderSection25ofthePresidentialDecree(PD)
957"TheSubdivisionandCondominiumBuyersProtective."

AsearlyasAugust1987,theSupremeCourtalreadyrecognizedtheauthorityoftheHLURB,assuccessoragency
of the National Housing Authority (NHA), to regulate, pursuant to PD 957, in relation to PD 1344, the real estate
trade,withexclusiveoriginaljurisdictiontohearanddecidecases"involvingspecificperformanceofcontractualand
statutoryobligationfiledbybuyersofsubdivisionlotsagainsttheowner,developer,dealer,brokerorsalesman,"
theHLURB,intheexerciseofitsadjudicatorypowersandfunctions,"mustinterpretandapplycontracts,determine
therightsofthepartiesunderthesecontractsandaward[s]damageswheneverappropriate."

Given its clear statutory mandate, the HLURBs decision to await for some forum to decide if ever one is
forthcomingtheissueontheauthorityofOrendaintodisposeofsubjectlotsbeforeitperemptorilyresolvesthe
basiccomplaintisunwarranted,theissuesthereonhavingbeenjoinedandtherespectivepositionpapersandthe
evidenceofthepartieshavingbeensubmitted.Tous,itbehoovedtheHLURBtoadjudicate,withtheusualdispatch,
therightandobligationofthepartiesinlinewithitsownappreciationoftheobtainingfactsandapplicablelaw.To
borrow from Mabubha Textile Mills Corporation vs. Ongpin, it does not have to rely on the finding of others to
dischargethisadjudicatoryfunctions.19

Afteritsmotionforreconsiderationwasdenied,BFHomesappealedtotheCA(C.A.G.R.SPNo.83631),raisingas
issues: (a) whether or not the HLURB had the jurisdiction to decide with finality the question of Atty. Orendains
authoritytoenterintothetransactionwithSanMiguelPropertiesinBFHomesbehalf,andruleontherightsand
obligations of the parties to the contract and (b) whether or not the HLURB properly suspended the proceedings
untiltheSECresolvedwithfinalitythematterregardingsuchauthorityofAtty.Orendain.

The CA promulgated its decision in C.A.G.R. SP No. 83631,20 decreeing that the HLURB, not the SEC, had
jurisdictionoverSanMiguelPropertiescomplaint.ItaffirmedtheOPsdecisionandorderedtheremandofthecase
totheHLURBforfurtherproceedingsonthegroundthatthecaseinvolvedmatterswithintheHLURBscompetence
andexpertisepursuanttothedoctrineofprimaryjurisdiction,viz:

[T]he High Court has consistently ruled that the NHA or the HLURB has jurisdiction over complaints arising from
contracts between the subdivision developer and the lot buyer or those aimed at compelling the subdivision
developertocomplywithitscontractualandstatutoryobligations.

Hence, the HLURB should take jurisdiction over respondents complaint because it pertains to matters within the
HLURBscompetenceandexpertise.TheproceedingsbeforetheHLURBshouldnotbesuspended.

WhileWesustaintheOfficeofthePresident,thecasemustberemandedtotheHLURB.Thisisinrecognitionofthe
doctrineofprimaryjurisdiction.Thefairestandmostequitablecoursetotakeunderthecircumstancesistoremand
thecasetotheHLURBfortheproperpresentationofevidence.21

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DidtheSecretaryofJusticecommitgraveabuseofdiscretioninupholdingthedismissalofSanMiguelProperties
criminal complaint for violation of Presidential Decree No. 957 for lack of probable cause and for reason of a
prejudicialquestion?

The question boils down to whether the HLURB administrative case brought to compel the delivery of the TCTs
could be a reason to suspend the proceedings on the criminal complaint for the violation of Section 25 of
PresidentialDecreeNo.957onthegroundofaprejudicialquestion.

RulingoftheCourt

Thepetitionhasnomerit.

1.

Action for specific performance, even if pending in the HLURB, an administrative agency, raises a prejudicial
questionBFHomesposturethattheadministrativecaseforspecificperformanceintheHLURBposedaprejudicial
questionthatmustfirstbedeterminedbeforethecriminalcaseforviolationofSection25ofPresidentialDecreeNo.
957couldberesolvediscorrect.

A prejudicial question is understood in law to be that which arises in a case the resolution of which is a logical
antecedentoftheissueinvolvedinthecriminalcase,andthecognizanceofwhichpertainstoanothertribunal.Itis
determinativeofthecriminalcase,butthejurisdictiontotryandresolveitislodgedinanothercourtortribunal.Itis
basedonafactdistinctandseparatefromthecrimebutissointimatelyconnectedwiththecrimethatitdetermines
the guilt or innocence of the accused.22 The rationale behind the principle of prejudicial question is to avoid
conflictingdecisions.23TheessentialelementsofaprejudicialquestionareprovidedinSection7,Rule111ofthe
RulesofCourt,towit:(a)thepreviouslyinstitutedcivilactioninvolvesanissuesimilarorintimatelyrelatedtothe
issueraisedinthesubsequentcriminalaction,and(b)theresolutionofsuchissuedetermineswhetherornotthe
criminalactionmayproceed.

The concept of a prejudicial question involves a civil action and a criminal case. Yet, contrary to San Miguel
Properties submission that there could be no prejudicial question to speak of because no civil action where the
prejudicial question arose was pending, the action for specific performance in the HLURB raises a prejudicial
questionthatsufficedtosuspendtheproceedingsdeterminingthechargeforthecriminalviolationofSection2524
ofPresidentialDecreeNo.957.Thisistruesimplybecausetheactionforspecificperformancewasanactioncivilin
naturebutcouldnotbeinstitutedelsewhereexceptintheHLURB,whosejurisdictionovertheactionwasexclusive
andoriginal.25

Thedeterminationofwhethertheproceedingsoughttobesuspendedbecauseofaprejudicialquestionrestedon
whether the facts and issues raised in the pleadings in the specific performance case were so related with the
issuesraisedinthecriminalcomplaintfortheviolationofPresidentialDecreeNo.957,suchthattheresolutionof
theissuesintheformerwouldbedeterminativeofthequestionofguiltinthecriminalcase.Anexaminationofthe
natureofthetwocasesinvolvedisthusnecessary.

Anactionforspecificperformanceistheremedytodemandtheexactperformanceofacontractinthespecificform
inwhichitwasmade,oraccordingtotheprecisetermsagreeduponbyapartyboundtofulfillit.26Evidently,before
theremedyofspecificperformanceisavailedof,theremustfirstbeabreachofthecontract.27Theremedyhasits
rootsinArticle1191oftheCivilCode,whichreads:

Article1191.Thepowertorescindobligationsisimpliedinreciprocalones,incaseoneoftheobligorsshouldnot
complywithwhatisincumbentuponhim.

The injured party may choose between the fulfillment and the rescission of the obligation, with the payment of
damages in either case. He may also seek rescission, even after he has chosen fulfillment, if the latter should
becomeimpossible.xxx(Emphasissupplied)

Accordingly,theinjuredpartymaychoosebetweenspecificperformanceorrescissionwithdamages.Aspresently
worded,Article1191speaksoftheremedyofrescissioninreciprocalobligationswithinthecontextofArticle1124of
the former Civil Code which used the term resolution. The remedy of resolution applied only to reciprocal
obligations,suchthatapartysbreachofthecontractequatedtoatacitresolutoryconditionthatentitledtheinjured
partytorescission.Thepresentarticle,asintheformerone,contemplatesalternativeremediesfortheinjuredparty
who is granted the option to pursue, as principal actions, either the rescission or the specific performance of the
obligation,withpaymentofdamagesineithercase.28

On the other hand, Presidential Decree No. 957 is a law that regulates the sale of subdivision lots and
condominiums in view of the increasing number of incidents wherein "real estate subdivision owners, developers,
operators, and/or sellers have reneged on their representations and obligations to provide and maintain properly"
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the basic requirements and amenities, as well as of reports of alarming magnitude of swindling and fraudulent
manipulationsperpetratedbyunscrupuloussubdivisionandcondominiumsellersandoperators,29suchasfailureto
delivertitlestothebuyersortitlesfreefromliensandencumbrances.PresidentialDecreeNo.957authorizesthe
suspension and revocation of the registration and license of the real estate subdivision owners, developers,
operators,and/orsellersincertaininstances,aswellasprovidestheproceduretobeobservedinsuchinstancesit
prescribesadministrativefinesandotherpenaltiesincaseofviolationof,ornoncompliancewithitsprovisions.

Conformablywiththeforegoing,theactionforspecificperformanceintheHLURBwoulddeterminewhetherornot
San Miguel Properties was legally entitled to demand the delivery of the remaining 20 TCTs, while the criminal
action would decide whether or not BF Homes directors and officers were criminally liable for withholding the 20
TCTs.Theresolutionoftheformermustobviouslyprecedethatofthelatter,forshouldtheHLURBholdSanMiguel
Properties to be not entitled to the delivery of the 20 TCTs because Atty. Orendain did not have the authority to
represent BF Homes in the sale due to his receivership having been terminated by the SEC, the basis for the
criminalliabilityfortheviolationofSection25ofPresidentialDecreeNo.957wouldevaporate,therebynegatingthe
needtoproceedwiththecriminalcase.

Worthytonoteatthisjunctureisthataprejudicialquestionneednotconclusivelyresolvetheguiltorinnocenceof
the accused. It is enough for the prejudicial question to simply test the sufficiency of the allegations in the
informationinordertosustainthefurtherprosecutionofthecriminalcase.Apartywhoraisesaprejudicialquestion
isdeemedtohavehypotheticallyadmittedthatalltheessentialelementsofthecrimehavebeenadequatelyalleged
in the information, considering that the Prosecution has not yet presented a single piece of evidence on the
indictment or may not have rested its case. A challenge to the allegations in the information on the ground of
prejudicialquestionisineffectaquestiononthemeritsofthecriminalchargethroughanoncriminalsuit.30

2.

Doctrineofprimaryjurisdictionisapplicable

ThattheactionforspecificperformancewasanadministrativecasependingintheHLURB,insteadofinacourtof
law,wasofnoconsequenceatall.Asearliermentioned,theactionforspecificperformance,althoughcivilinnature,
couldbebroughtonlyintheHLURB.Thissituationconformstothedoctrineofprimaryjurisdiction.Therehasbeen
oflateaproliferationofadministrativeagencies,mostlyregulatoryinfunction.Itisinfavoroftheseagenciesthatthe
doctrine of primary jurisdiction is frequently invoked, not to defeat the resort to the judicial adjudication of
controversiesbuttorelyontheexpertise,specializedskills,andknowledgeofsuchagenciesintheirresolution.The
Courthasobservedthatonethrustoftheproliferationisthattheinterpretationofcontractsandthedeterminationof
privaterightsundercontractsarenolongerauniquelyjudicialfunctionexercisableonlybytheregularcourts.31

The doctrine of primary jurisdiction has been increasingly called into play on matters demanding the special
competence of administrative agencies even if such matters are at the same time within the jurisdiction of the
courts. A case that requires for its determination the expertise, specialized skills, and knowledge of some
administrativeboardorcommissionbecauseitinvolvestechnicalmattersorintricatequestionsoffact,reliefmust
firstbeobtainedinanappropriateadministrativeproceedingbeforearemedywillbesuppliedbythecourtsalthough
themattercomeswithinthejurisdictionofthecourts.Theapplicationofthedoctrinedoesnotcallforthedismissal
ofthecaseinthecourtbutonlyforitssuspensionuntilafterthematterswithinthecompetenceoftheadministrative
bodyarethreshedoutanddetermined.32

Toaccordwiththedoctrineofprimaryjurisdiction,thecourtscannotandwillnotdetermineacontroversyinvolvinga
question within the competence of an administrative tribunal, the controversy having been so placed within the
specialcompetenceoftheadministrativetribunalunderaregulatoryscheme.Inthatinstance,thejudicialprocessis
suspended pending referral to the administrative body for its view on the matter in dispute. Consequently, if the
courtscannotresolveaquestionthatiswithinthelegalcompetenceofanadministrativebodypriortotheresolution
ofthatquestionbythelatter,especiallywherethequestiondemandstheexerciseofsoundadministrativediscretion
requiring the special knowledge, experience, and services of the administrative agency to ascertain technical and
intricatemattersoffact,andauniformityofrulingisessentialtocomplywiththepurposesoftheregulatorystatute
administered,suspensionordismissaloftheactionisproper.33

3.

Othersubmissionsofpetitionerareunwarranted

It is not tenable for San Miguel Properties to argue that the character of a violation of Section 25 of Presidential
DecreeNo.957asmalumprohibitum,bywhichcriminalliabilityattachedtoBFHomesdirectorsandofficersbythe
mere failure to deliver the TCTs, already rendered the suspension unsustainable.34 The mere fact that an act or
omissionwasmalumprohibitumdidnotdoawaywiththeinitiativeinherentineverycourttoavoidanabsurdresult
bymeansofrenderingareasonableinterpretationandapplicationoftheprocedurallaw.Indeed,theprocedurallaw
must always be given a reasonable construction to preclude absurdity in its application.35 Hence, a literal
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application of the principle governing prejudicial questions is to be eschewed if such application would produce
unjustandabsurdresultsorunreasonableconsequences.

SanMiguelPropertiesfurthersubmitsthatrespondentscouldnotvalidlyraisetheprejudicialquestionasareasonto
suspend the criminal proceedings because respondents had not themselves initiated either the action for specific
performanceorthecriminalaction. Itcontendsthatthedefenseofaprejudicialquestionarisingfromthefilingofa
1wphi1

relatedcasecouldonlyberaisedbythepartywhofiledorinitiatedsaidrelatedcase.

Thesubmissionisunfounded.Theruleonprejudicialquestionmakesnodistinctionastowhoisallowedtoraisethe
defense.Ubilexnondistinguitnecnosdistingueredebemos.Whenthelawmakesnodistinction,weoughtnotto
distinguish.36

WHEREFORE,theCourtAFFIRMSthedecisionpromulgatedonFebruary24,2004bytheCourtofAppealsinCA
G.R.SPNO.73008andORDERSpetitionertopaythecostsofsuit.

SOORDERED.

LUCASP.BERSAMIN
AssociateJustice

WECONCUR:

MARIALOURDESP.A.SERENO
ChiefJustice

MARTINS.VILLARAMA,JR. BIENVENIDOL.REYES
AssociateJustice AssociateJustice

ESTELAM.PERLASBERNABE
AssociateJustice

CERTIFICATION

PursuanttoSection13,ArticleVIIIoftheConstitution,Icertifythattheconclusionsintheabovedecisionhadbeen
reachedinconsultationbeforethecasewasassignedtothewriteroftheopinionoftheCourtsDivision.

MARIALOURDESP.A.SERENO
ChiefJustice

Footnotes
* Vice Associate Justice Teresita J. LeonardoDe Castro, who is on official trip for the Court to attend the
SoutheastAsiaRegionalJudicialColloquiumonGenderEqualityJurisprudenceandtheRoleoftheJudiciary
inPromotingWomensAccesstoJustice,inBangkok,Thailand,perSpecialOrderNo.1529datedAugust29,
2013.
1 Entitled Regulating the Sale of Subdivision Lots and Condominiums, Providing Penalties for Violation
Thereof(July12,1976).
2Rollop.442.

3Id.at137172.

4Id.at61.

5Id.at123.

6Id.at420428.

7Id.at178181.

8Id.at215217.

9Id.at253.

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10Id.at247250.

11Id.at272273.

12Id.at9596.

13Id.at9899.

14Id.at1321pennedbyAssociateJusticeRebeccaDeGuiaSalvador,withtheconcurrenceofAssociate
Justice Romeo A. Brawner (later Presiding Justice/retired/deceased) and Associate Justice Jose C. Reyes,
Jr.
15Id.at1920.

16Id.at2325.

17Id.at3738.

18Id.at608.

19Id.at609610.

20Id.at504523.

21Id.at522.

22Peoplev.Consing,Jr.,G.R.No.148193,January16,2003,395SCRA366,369.

23Beltranv.People,G.R.No.137567,June20,2000,334SCRA106,110.

24Section25.IssuanceofTitle.Theownerordevelopershalldeliverthetitleofthelotorunittothebuyer
uponfullpaymentofthelotorunit.Nofee,exceptthoserequiredfortheregistrationofthedeedofsaleinthe
RegistryofDeeds,shallbecollectedfortheissuanceofsuchtitle.Intheeventamortgageoverthelotorunit
isoutstandingatthetimeoftheissuanceofthetitletothebuyer,theownerordevelopershallredeemthe
mortgageorthecorrespondingportionthereofwithinsixmonthsfromsuchissuanceinorderthatthetitleover
anyfullypaidlotorunitmaybesecuredanddeliveredtothebuyerinaccordanceherewith.
25UnderPresidentialDecreeNo.1344(entitledEmpoweringtheNationalHousingAuthoritytoIssueWritof
Execution in the Enforcement of its Decision under Presidential Decree No. 957), the National Housing
Authority,thepredecessoroftheHLURB,wasvestedwithoriginaljurisdiction,asfollows:

Section1.Intheexerciseofitsfunctionstoregulatetherealestatetradeandbusinessandinaddition
to its powers provided for in Presidential Decree No. 957, the National Housing Authority shall have
exclusivejurisdictiontohearanddecidecasesofthefollowingnature:

(a)Unsoundrealestatebusinesspractices

(b) Claims involving refund and any other claims filed by subdivision lot or condominium unit buyer
againsttheprojectowner,developer,dealer,brokerorsalesmanand

(c) Cases involving specific performance of contractual and statutory obligations filed by buyers of
subdivision lot or condominium unit against the owner, developer, dealer, broker or salesman.
(Emphasissupplied)

26BlacksLawDictionary.

27AyalaLifeAssurance,Inc.v.RayBurtonDevelopmentCorporation,G.R.No.163075,January23,2006,
479SCRA462,469.
28CongregationoftheReligiousoftheVirginMaryv.Orola,G.R.No.169790,April30,2008,553SCRA578,
585.

29CoChienv.Sta.LuciaRealty&DevelopmentInc.,G.R.No.162090,January31,2007,513SCRA570,
577578.

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30MarbellaBobisv.Bobis.G.R.No.138509,July31,2000,336SCRA747,752.

31AntipoloRealtyCorporationv.NationalHousingAuthority,No.L50444,August31,1987,153SCRA399,
407.

32IndustrialEnterprises,Inc.v.CourtofAppeals,G.R.No.88550,April18,1990,184SCRA426,431432.

33 Provident Tree Farms, Inc. v. Batario, Jr., G.R. No. 92285, March 28, 1994, 231 SCRA 463, 469470
Saavedra, Jr. v. Department of Justice, G.R. No. 93173, September 15, 1993, 226 SCRA 438, 442443
Presidential CommissiononGoodGovernmentv.Pea,No.L77663,April12,1988, 159 SCRA 556, 567
568PambujanSurUnitedMineWorkersv.SamarMiningCo.,Inc.,94Phil932,941(1954).

34Rollo,p.49

35Millaresv.NationalLaborRelationsCommission,G.R.No.110524,July29,2002,385SCRA306,316.

36Yuv.Tatad,G.R.No.170979,February9,2011,642SCRA421,428.

TheLawphilProjectArellanoLawFoundation

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