Republic of the Philippiney Office of the President HOUSING AND LAND USE REGULATORY BOARD Northern Mindanao Region 3/F Du Point Bldg., Velez-Akut Sts., Cagayan de Oro City ‘SPS. IAN KHER O. INOT & NELLY B. HLURB CASE NO. NMR-REM-072216-008 NOT, Complainants; For; UNSOUND REAL ESTATE BUSINESS -versus- PRACTICES, in relation to VIOL. OF ARTICLE 1561 OF THE NEW CIVIL CODE, MEDIATRIX HOMES, INC., duly REFUND OF EXPENSES & DAMAGES with represented herein by its Chief Prayer for Suspension of License to Sell Executive Officer (CEO), MR. and Cease & Desist Order ERNESTO C. TAN, Respondent. Before us is a complaint for Unsound Real Estate PidGtice and reimbursement with prayer for damages and suspension of license to sell and application for Cease and Desist Order against respondent Mediatrix Homes, Inc. As culled from the records, the facts are as follows: Complainants Spouses lan and Nelly Inot (Sps. Inot) purchased through Pag-ibig HDMF a housing unit with respondent Mediatrix Homes Inc., particularly Block 7, Lot 16 of Madison County Subdivision, Dipolog City. The said unit was awarded to them on 24 June 2011 and be was turned over on 8 August 2011.DECISION Page 20f13 SES.INOT vs MEDIATRIXHOMES, INC HLURB Cave No, NMVR-REM-072216-008 Sometime in February 2016, complainants introduced without prior approval some improvements of the said unit and particularly tiled the floors and replaced the toilet bowl. However, they claimed that after two (2) weeks from the renovation, the wall of the toilet cracked prompting them to call the attention of respondent to make the necessary repairs which the latter did. In the course of the repair, complainants decided to renovate the kitchen but when the same was smashed they discovered that kitchen wall had no round bars implanted horizontally but only vertically and that the bars were only eight (8) millimeters in diameter which is not accord with the standard size of ten (10) millimeters. Individual respondent Emesto Tan personally attended to the concern of complainants and offered the latter to temporarily transfer to another unit while the repair was being made to which they acceded and moved in to Block 7, Lot 21 on 21 April 2016, Mr. Tan promised to install concrete beams and columns in the unit of complainants. Sometime in June 2016 after complainant Nelly Inot (wife) came home from Zamboanga City, she immediately checked the repairs made by respondent, particularly Engr. Anifion who handied the matter. But Nelly was again shocked when the former cemented the flooring and the side part of the house where the beams should be placed. Complainants alleged that there was no indication that the OMDECISION Page 30f13 SES. INOT vs, MEDIATR HOMES, INC HLURB Case No. NMMR-REM 072216 008, beams were installed and after confronting Engr. Anifion as to why the instructions of Mr. Tan were not followed, the former allegedly told them that it would amount to a financial loss should the beams be placed. Consequently, the repair was left unfinished. Perturbed, complainants took steps to establish that the unit they purchased was substandard thus they requested an ocular inspection from the Office of the Building Official who in turn made a response through a letter that its office failed to pinpoint the defects complained of as there was an undergoing repair when it conducted the inspection over the unit. They however engaged the services of a private structural engineer to inspect the unit. Thus, Engr. Balanay made the inspection on 24 June 2016 and issued a Certification on 4 July 2016 stating that the approved plan for the construction of the unit was not implemented. Due to this finding, complainants filed the instant case and alleged that respondent defrauded them by using substandard materials and that the unit was not fit and suitable to live in and claimed that respondent is liable for warranty against hidden defects and for misrepresentations. Thus, they prayed for the revocation of respondent's certificate and license to sell; reimbursement of P1,090,500.00 incurred as repair expenses; moral damages of P500,000.00; nominal damages of P200,000.00; exemplary damages of P100,000 plus attorney's fees and litigation cost.DEOSION Page 4 of 13 SES.INOT vs, MEDIATRDX HOMIES. INC HAR case No, Nha 072215008 Respondent Mediatrix Homes Inc. (Mediatrix) at the onset, opposed complainant's Motion for Extension of Time to Submit Position Paper and Draft Decision alleging that the same is a prohibited pleading under the 2011 HLURB Rules of Procedure. Mediatrix however filed its Position Paper and admitted the fact of the defective unit of complainants but nevertheless argued that it attended to its repair and noticed that complainants made some alterations of the original structure and that the crack was due to the improper smashing of the wall. Despite of it, respondent repaired the wall and replaced the tiles and fixed the bathroom. However, after the repair, complainants allegedly requested respondent also to repair the house structure as it lacked beam and columns to which the latter acceded to but were not installed as the adjacent unit owners, Juanito and Mary Jane Inot, objected to the same since their side of the wall which was okay would be affected. Complainants nonetheless insisted but respondent did not resume working as the former seemed unsatisfied. Respondent Tan contracted the services of Engr. Anifion to continue with the repair but it appeared that the demands of complainants were increasing such as to make the concrete finishing plaster of the partition; repair of kitchen sink; replacement of old ceramic tiles with granite but would pay additional cost: lifting of the roof and other mason and carpentry works. Engr. Anifion however aPages of 13 Seo natant a i saat declined to perform the demands but complainants insisted and threatened the former to be sued hence he gave up the works. Respondent through its Human Resource Office contacted the spouses and offered to reimburse their expenses and to buy back the unit but this did not sit well with the latter and threatened to sue the former. A formal letter to reimburse and buy the property was allegedly handed to complainants who initially received the same but retumed it to the respondent's staff, Mr. Fernandez, after complainants consulted a lawyer. Hence, this case. Before passing upon the main issue whether respondent engaged in unsound real estate practice, we shall first dispose some peripheral matters. While we do not condone the cavalier attitude of complainants in consciously not observing and violating our Rule against prohibited Pleadings such as their filing of a Motion for Extension of Time which is explicitly prohibited under Section 14, Rule IV of the 2011 HLURB Revised Rules of Procedure, we however cannot close our eyes on the substantive matter presented before us, hence, the relaxation of our Rule is warranted but a warning is given to counsel of complainants that a repetition of the same violation shall be dealt with accordingly. The adjudicatory bodies and the parties to a case are thus enjoined to abide strictly by the rules. While it is true that a litigation is a6ecasion Page 6of 13 SP5.INQT vs, MEDIATRDX HOWAES, Ne _ __ ns case No. e1y-072216 008 not a game of technicalities, it is equally true that every case must be prosecuted in accordance with the prescribed procedure to ensure an orderly and speedy administration of justice. There have been some instances wherein this Court allowed a relaxation in the application of the rules, but this flexibility was never intended to forge a bastion for erring litigants to violate the rules with impunity. A liberal interpretation and application of the rules of procedure can be resorted to only in proper cases and under justifiable causes and circumstances.! Rules of procedure are in place to ensure the orderly, just, and speedy dispensation of cases; to this end, inflexibility or liberality must be weighed. The relaxation or suspension of procedural rules or the exemption of a case from their operation is warranted only by compelling reasons or when the purpose of justice requires it.2 As regards the charge that respondent committed unsound real estate practice, under the circumstance obtaining in this case; this Office is not ready to pass upon to declare that there is unsound estate practice as the evidence before us is wanting. However, respondent is not entirely absolved of its liability to complainant. * Asia United Bank v. Goodland Company, G.R. No. 188051, November 22, 2010 citing Hon. Fortich v. Hon. Corona, 359 Phil. 210, 220 (1998) Zid,ecision Page 70f13 Jurisprudence consistently recognizes the rationale behind the enactment of PD No. 957 — to protect innocent lot buyers from scheming developers.> The use of substandard materials in the unit of complainants may be indicative of unsound real estates practice but is not conclusive especially so that the latter was not left without any options. We note and as admitted by complainants, respondent attended to the repair of its unit but was not fully finished owing to the fact that complainants made several demands, an allegation that was never denied. Respondent rectified its error in recognition of its contractual obligation to complainants but modification after modification was introduced by them. Hence, when the unit was not fully repaired it was not entirely the fault of respondent. From its end, it tried to correct and pacify complainants but by their own act of demanding ample and several specifications and by threatening to sue respondent, complainants themselves prevented the completion of the repair. Records also speak that complainants in the first place were not lured into buying the unit but it was themselves who opted to acquire it, hence it cannot be gainsaid that respondent misrepresented and defrauded them about the unit as they were by themselves enticed to purchase the unit since a relative has a unit therein too. As a matter pine Bank of Communication v. Pridisons Realty Corporation, G.R. No. 155113, January 9, 2013.DECISION Page Bf 13 SPS.INCT ve MEDIATRICHOMESINC MU a No, NMR REN 072216 008 of fact, complainants occupied the unit sometime in 2011 and it was just recently or 5 years after occupancy that they discovered the crack on the wall which was caused allegedly by improper smashing of the wall and alteration of the original design or structure. This only shows that unit was habitable and durable at the time it was occupied. With regard to the claim of refund of the alleged expenses incurred by complainants in the repair of the unit amounting to P1,090,500.00, the same is denied for failure to substantiate. There is no evidence on record that would support the reimbursement of such whopping amount such as receipts of labor and materials used. Also, said amount is incredible when repair is to be had but believable when renovation and refurbishment are to be made with high class or quality materials. Complainants have the burden of proving by substantial evidence the allegations in their complaint. The basic rule is that mere allegation is not evidence and is not equivalent to proof. Charges based on mere suspicion and speculation likewise cannot be given credence.* On the claim of moral damages, this Office finds that complainants are not entitled to the same. De Jesus v. Guerrero, G.R. No. 171491, September 24, 2009orcision Page 9 of 13 SESJNOT a MEDATEKMOMEING ase a eM 672236-008 In the case of Mendoza v. Sps. Gomez,5 the Supreme Court emphasizes the condition on the grant of moral damages, thus: “In Kierulf v. CA, we observed that this Court cannot remind the bench and the bar often enough that in order that moral damages may be awarded, there must be pleading and proof of moral suffering, mental anguish, fright and the like. Citing Francisco v. GSIS, the Court held that there must be clear testimony on the anguish and other forms of mental suffering. Thus, if the plaintiff fails to take the witness stand and testify as to his social humiliation, wounded feelings and anxiety, moral damages cannot be awarded.” Tested against the foregoing, there is nothing on record that would justify award of moral damages on at least two reasons. First, no bad faith can be ascribed to respondent as it has in fact attended to, exerted effort and accommodated the demands and requests of complainants for the repair of its unit. Second, there is no proof that due to the crack of the wall when it started to improve the unit that it has caused them sleepless nights, wounded feelings and that they suffered mentally. Mere allegations of besmirched reputation, embarrassment and sleepless nights are insufficient to warrant an award for moral damages. It must be shown that the proximate cause thereof was the unlawful act or omission of the respondent.6 *GR.No, 160110, June 18, 2014 ® Ace Haulers Corporation v. Court of Appeals, G.R. No. 127934, August 23, 2000, cited in Francisco v, Ferrer, G.R. No. 142029. February 28, 2001cision Page 100833 SE5.INOT vs, MEDIATROS HOMES, ING. 7 Mu case l,i 072216008 Had the unit collapsed due to substandard materials used would probably warrant the grant of moral damages but such is not the case herein. Further on damages, our jurisprudence sets certain conditions when exemplary damages may be awarded: First, they may be imposed by way of example or correction only in addition, among others, to compensatory damages, and cannot be recovered as a matter of right, their determination depending upon the amount of compensatory damages that may be awarded to the claimant. Second, the claimant must first establish his right to moral, temperate, liquidated or compensatory damages. Third, the wrongful act must be accompanied by bad faith, and the award would be allowed only if the guilty party acted in a wanton, fraudulent, reckless, oppressive or malevolent manner.” Again, the above requisites wanting in the case, hence, complainants are not entitled thereto. However, pertaining to nominal damages, complainants are entitled to the same. Nominal damages are recoverable where a legal right is technically violated and must be vindicated against an invasion that has produced no actual present loss of any kind or where there has "Md.easton Page 10413 S525. INOT ve, MEDIATRX HOMES. IN HLURB case No, NMR REM. 072226-008 been a breach of contract and no substantial injury or actual damages whatsoever have been or can be shown. Nominal damages may be awarded to a plaintiff whose right has been violated or invaded by the defendant, for the purpose of vindicating or recognizing that right, not for Indemnifying the plaintiff for any loss suffered.® Clearly, respondent breached its contractual obligation to deliver a standard unit as required by law. When it sold complainants the unit with substandard materials, it has violated their right and shortchanged of their money's worth. Finally, as to the claim of attorney's fees, we sO declare that complainants are not entitled fo it. It is settled that the award of attorney's fees is the exception rather than the general rule; counsel's fees are not awarded every time a party prevails in a suit because of the policy that no premium should be placed on the right to litigate. Attorney's fees, as part of damages, are not necessarily equated to the amount paid by a litigant to a lawyer. In the ordinary sense, attormey's fees represent the reasonable compensation paid to a lawyer by his client for the legal services he has rendered to the latter; while in its extraordinary concept, they may be awarded by the court as indemnity for “0orcision Page 20113, SPS.INGT ys. MEDIATRIK HOMES, INC, ~ HHLURS Case No, ten EN. 972236-008 damages to be paid by the losing party to the prevailing party. Attorney's fees as part of damages are awarded only in the instances specified in Article 2208 of the Civil Code. As such, it is necessary for the court to make findings of fact and law that would bring the case within the ambit of these enumerated instances to justify the grant of such award, and in all cases it must be reasonable.’ While it is true that complainants brought the present suit to vindicate their rights but the same is not enough to warrant payment of attorney's fees. The circumstance obtaining in this case would have prevented this suit had complainants been cooperative to respondent when the repairs were made, but it bears repeating that their own act of making several demands every after repair of their unit prevented to its completion. Finally, we find no ground so compelling for us to issue a Cease and Desist Order as the same was withdrawn by complainants, more so to order the cancellation of respondent's Certificate of Registration and Suspension of the License to Sell as complainants miserably failed to establish their case and arguments for the grant of the relief prayed for. ® Padillov, Court of Appeals, 422 Phil. 334, 356-357 (2001) cited in Benedicto vs. Villaiores, G.R. No. 185020, October 6, 2010EASON Page 13 0f 13, SPS. INOT vs MEDIATRDG HOMES. INC ____ uns case No. nas nen.072216.008 WHEREFORE, the complaint is DISMISSED for lack of merit. However, respondent Mediatrix Homes Inc., through its authorized representatives are ordered to pay complainants the sum of Fifty Thousand Pesos (Php50,000.00) as nominal damages. SO ORDERED. Cagayan de Oro City, Philippines. 23 January 2017. / RHONA B. ALBARECE Housing and Land Use Arbiter