Republic of the Philippines

Office of the President

HOUSING AND LAND USE REGULATORY BOARD
Northern Tagalog Regional Field Office-III
3rd Floor, Insular Life Bldg,
San Fernando, Pampanga

LILIBETH L. HIPOLITO,
Complainant,

-versus- HLURB Case No. NTR-REM-072518-846

For: Specific Performance and
Damages

CITIHOMES REALTY, INC.,

EMETERIO A. EUGENIO and
members of the Board of Directors,
EVANGELINE R. EUGENIO
MICHELLE ANNE R. ROQUE, MA.
TERESA F. PUNAY and MARIANO
F. BARCENAS,
Respondents. x-

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

NOTICE OF DECISION
Sir/Madam:

Please take notice that a DECISION on the above-captioned case, a copy hereto attached and
the original of which is now on file, was rendered by this Office on July 5, 2019.

You are hereby required to inform this Office within five (5) days from receipt hereof,
of the date of such receipt.

San Fernando City, Pampanga, 05 July 2019.

DONN C. TAMAYO
HOUSING AND LAND USE ARBITER
Cc:

ATTY. MICHAEL T. MABALOT Atty. Christian P. Bareng

Citiplaza 1, Commercial Complex Unit 318 Sir William’s Hotel,
TandangSora Ave., cor. Visayas Ave., No. 39 Timog Avenue, South
Bgy. Pasong Tamo, 1107 Quezon City Triangle, Quezon City

EMETERIO A. EUGENIO, MICHELLE Ms. Lilibeth L. Hipolito

ANNE ROQUE, No. 591 Road 1, Ma. Magdalena Subdivision
MA. TERESA F. PUNAY AND ATTY. San Juan, Balagtas
MICHAEL Bulacan
T. MABALOT
Citiplaza 1, Commercial Complex
TandangSora Ave., cor. Visayas Ave.,
Bgy. Pasong Tamo, 1107 Quezon City

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 Republic of the Philippines
OFFICE OF THE PRESIDENT OF THE PHILIPPINES
Housing and Land Use Regulatory Board
Northern Tagalog Regional Field Office 3rd Floor, Insular Life Building,
McArthur Highway Barangay Dolores, City of San Pampanga
LILIBETH L. HIPOLITO,
Complainant,

-versus- HLURB Case No. NTR-REM-072518-846

For: Specific Performance and
Damages

CITIHOMES REALTY, INC.,

EMETERIO A. EUGENIO and
members of the Board of Directors,
EVANGELINE R. EUGENIO
MICHELLE ANNE R. ROQUE, MA.
TERESA F. PUNAY and MARIANO F.
BARCENAS,
Respondents.

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

DECISION
In her Complaint, Complainant Lilibeth Hipolito (hereinafter referred to simply as
“Complainant Hipolito”, for brevity) alleged that Respondent Citihomes Realty, Inc.
(hereinafter referred to as “Respondent Citihomes”, for brevity), represented by its President,
Emeterio A. Eugenio, and members of its Board of Directors, Evangeline R. Eugenion,
Michelle Anne R. Roque, Ma. Teresa F. Punay and Mariano F. Barcenas (the individual
respondents) failed to deliver to the Complainant the Transfer Certificate of Title No. No.
040-2012007458 with an area of One Hundred Three (103) square meters, located at Lot 3,
Block 10, (of the consolidation-subdivision plan, PCS-03-018555) ORO Villas II, McArthur
Highway, Brgy. Wakas, Bocaue, Bulacan as well as the original copies of the Deed of Sale,
the Tax Declarations and other pertinent documents. In addition to the same, Respondents are
also liable in favor of Complainant: in the amount of Php Php 100,000.00 as and by way of
Moral Damages; in the amount of Php Php 100,000.00 as and by way of Exemplary
Damages; and in the amount of Phpl00,000 and 10% of the total claims as Attorney’s fees
plus Php 5,500.00 per court appearance and Php 3,500.00 per pleading.

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 It was likewise alleged in Complainant Hipolito’s Complaint that her reason in filing
her claims against Respondents is because of the failure of the latter to deliver to her the
documents, subjects of the case, despite her compliance of her obligations in accordance with
the Contract to Sell, dated 29 September 2011, and the Deed of Sale dated 08 October 2013.

Respondents, in their defense, admitted the due execution and existence of the said
Contracts to Sell as well as that of the Deed of Sale. They raised, as issues however, that the
only reason why they cannot provide the Complainant the subject-documents is because the
same have already been the subjects of a loan before the Banco De Oro. In addition to their
defense, they likewise raised that the instant Complaint should then be dismissed since Banco
De Oro was not impleaded as a party-respondent in the instant case, being an indispensable
party. That “while complainants are (sic) not privy to the loan transactions between
respondent CR1 and BDO, the inclusion of the bank is still material in the determination of
the controversy, since respondents could not deliver the certificate of title to the fully-paid
property unless BDO is willing to release the title in its possession; and for the court to
acquire jurisdiction over the person of the bank and compel it to comply with its decision,
orders, and other processes, including the release and delivery of the complainants’ (sic) title,
it is therefore indispensable for BDO to have been impleaded as a respondent.

Complainant Hipolito, in her Reply, declared that Respondents never specifically

denied under oath the declarations made by her in her Complaint. As a matter of fact,
Respondents admitted all the allegations of the Complainant and merely interposed a single
defense, that is - the failure of the Complainant to implead BDO as a party-respondent to the
instant case. Besides, there was no board resolution or Secretary’s Certificate that was issued
by Respondent Citihomes authorizing an individual to verify its allegations in its Answer.
Thus, Respondent corporation may be said to have failed to file any Answer at all.

That being the case, the only issues to determine in this case, since both the parties
admit the fact that there was a contract of sale and that the same has already been paid in full
by the Complainant to the Respondents, are the following:

1. Whether or not the Respondents are duty bound to deliver the subjects transfer of
certificate of title, tax declarations and other pertinent documents covering the purchased
subdivision lot as well as the notarized deed of sale to Complainant; and

2. Whether or not Complainant is entitled to payment of damages, attorney’s fees

and costs of suit.
We go to the first issue: To determine the issue as to whether or not Respondents are
duty bound to deliver to Complainant Hipolito the TCT, notarized Deed of Sale, Tax
Declaration and other pertinent documents subject of the instant case, this Office opts to
consider the allegations of the respective parties.

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 Upon a careful perusal of the allegations and admissions made by the parties to the
instant case, as well as the pieces of evidence presented before this office, it appears that the
only issue raised is whether the failure to implead BDO as a party-respondent to the instant
case will merit the sound dismissal of the case filed by the Complainant.

Respondents, in their Answer, took refuge in the provision of Article 6 in the

Contract to Sell wherein they alleged that Complainant has no cause of action against the
Respondents since Complainant failed to establish that respondents committed a breach of
their legal and contractual obligations as the complainant expressly allowed respondent CRI
to transact with BDO.

Unfortunately, however, the allegations of the Respondents as provided for above are
nothing but blatant lies and a failed attempt to mislead this Office. Respondents obviously
tried to omit the proviso as embodied in the Contract to Sell (Annex “A” of the Complaint).
Article 6 of the Contract specifically provides as follows:

“ARTICLE 6
ASSIGNMENT OF THE RIGHTS AND
INTERESTS OF THE SELLER

The SELLER reserves the right to assign, transfer,

encumber or in any manner convey the rights and interests on
the lot or house-and-lot unit subject of this agreement, or to
assign, factor, discount or sell the remaining receivables of the
SELLER under this contract to any person, bank, financing
institution or any other entity, without the need of obtaining
the consent or authority of the BUYER, provided however,
that the rights and interests of the BUYER under this
agreement are not prejudiced as a result thereof.”

After a careful perusal of the above-cited provision of the Contract as well as the
records of the case, it can be gleaned that there is an unbridled right of the Seller, Citihomes
Realty, Inc., to dispose and make use of the subject property. Article 6 of the Contract to Sell
is explicit on this matter, that the rights of the seller to loan or mortgage the subject property
should not in any way hamper or prejudice the rights and interests of the buyer.
Unfortunately, the Sellers or rather the Respondents in the instant case have thus failed to
abide by the explicit wordings of the Contract to Sell, particularly that in Article 6 of the
contract thereof.

Respondents further alleged that “notwithstanding such prior knowledge, BDO was
not made a party to the complaint thus, rendering the same defective. And considering that
BDO has the actual possession of the title, and the principal cause of action of the

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complainant is delivery of title to her fully-paid lot, BDO’s inclusion in the complaint is
clearly necessary to complete a determination or settlement of the instant controversy.

This Office is not convinced. It cannot be amiss to state that Respondents’ inaction
violates Section 25 of Presidential Decree No. 957
requiring the owner or developer to deliver the title of the lot or unit to the buyer upon full
payment of the lot or unit.

Indeed, under Section 25 of P.D. No. 957, among the obligations of a subdivision
owner or developer is the delivery of the subdivision lot to the buyer by causing the transfer
of the corresponding certificate of title over the subject lot. The provision states:

Section 25. Issuance of Title. The owner or developer

shall deliver the title of the lot or unit to the buyer upon full
payment of the lot or unit. No fee, except for those required
for the registration of the deed of sale in the Registry of
Deeds, shall be collected for the issuance of such title. In the
event a mortgage over the lot or units is outstanding at the
time of the issuance of the title to the buyer, the owner or
developer shall redeem the mortgage or the corresponding
portion thereof within six months from such issuance in order
that the title over any fully paid lot or unit may be secured and
delivered to the buyer in accordance therewith.

It can be deduced from the records of the case that the contract to sell entered into by
the parties expressly obliges the vendor-Citihomes Realty, Inc. to cause the issuance and
delivery of the corresponding certificate of title to the buyer-Complainant Hipolito upon full
payment of the purchase price by the latter, to wit:

“ARTICLE 4
TRANSFER OF OWNERSHIP
The SELLER shall immediately execute the Deed of Absolute Sale
and deliver the Transfer Certificate of Title to, and in favor of, the BUYER
subject to, and upon having satisfied the stipulations as provided for herein
below, to wit:

4.1. The BUYER has paid in full the purchase price herein agreed
upon, any and all amounts still owing to the SELLER including any unpaid
amount on the construction of any form of improvements contracted by the
BUYER, including any interests and other charges and assessment due to the
SELLER and its appointed contractor for the construction of the residential
building thereon;

4.2. The Deed of Restrictions in the use and occupancy of the lot

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 subject of this contract have been signed by the BUYER which shall form
part of the Deed of Absolute Sale, xxx;

4.3. Capital Gains Tax and Documentary Stamp Tax, including

realty taxes up to the date of delivery of possession of the subject lot to the
BUYER, and all other incidental expenses related thereto shall be for the sole
and exclusive account of the SELLER. Transfer Tax and registration fees
with the Registry of Deeds, and realty tax after the BUYER is allowed to take
possession and occupancy of the lot subject of this agreement, on the other
hand, shall be the sole and exclusive account of the BUYER, including any
and alt other incidental expenses related thereto.”

From the foregoing, it is crystal clear that upon full payment, the seller, Respondent
Citihomes, is duty-bound to deliver the title of the unit or lot to the buyer-Complainant.
“Thus for instance, even with a valid mortgage over the lot, the seller is still bound to redeem
said mortgage without any cost to the buyer apart from the balance of the purchase price and
registration fees.” 1

In the case of Vicenta Cantemprate, et., al. versus CRS Realty Development
Corporation, et., al., G.R. No. 171399, May 08, 2009 it was held that “there is no question
that respondents Casal, Salvador and CRS Realty breached their obligations to petitioners
under the contracts to sell. It is settled that a breach of contract is a cause of action either for
specific performance or rescission of contracts.

Respondents Casal, Salvador and CRS Realty have the obligation to deliver the
corresponding clean certificates of title of the subdivision lots, the purchase price of which
have been paid in full by petitioners. That the subject subdivision property is involved in a
pending litigation between respondent Casal and persons not parties to the instant case must
not prejudice petitioners.
Respondents’ obligation to deliver the corresponding certificates of title is
simultaneous and reciprocal. Upon the full payment of the purchase price of the subdivision
lots, respondents’ obligation to deliver the certificates of title becomes extant. Respondents
must cause the delivery of the certificates of title to petitioners free of any encumbrance. But
since the lots are involved in litigation and there is a notice of lis pendens at the back of the
titles involved, respondents have to be given a reasonable period of time to work on the
adverse claims and deliver clean titles to petitioners. The Court believes that six (6) months is
a reasonable period for the purpose.”

Piercing the veil of corporate fiction in fraud cases, such as in the instant case, is an
assurance to the dealing public that in cases of mischief by the actors behind the corporation,
“piercing the corporate veil doctrine” allows the public a remedy against the very actors
and/or officers of the corporation themselves. This safety hatch in fact makes the corporate

1 Vicenta Cantemprate. et., al.. G.R. No. 171399, May 08, 2009..

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entity attractive not only to businessmen, but also on the parties or that of the public who
contract and/or deal with corporations. It cannot be amiss to state that Complainant Hipolito
was defrauded that after a promise to receive the originals of the Title, Deed of Sale and Tax
Declarations after she pays in full her obligations in accordance with the Contract to Sell and
Deed of Sale, the said documents were never delivered to Complainant even up to present
despite the fact of her fulfillment of all her obligations therein.

In the case of Gregorio Araneta, Inc. vs Tuason de Paterno and Vidal 2,the most
Honorable Supreme Court held that the piercing doctrine is employed to prevent the
commission of fraud and cannot be made to perpetuate fraud.

The most Honorable Supreme Court likewise succinctly clarified in the case of
Mendoza and Yotokovs Banco Real Dev. Bank3that “although the general rule is that
obligations incurred by a corporation, acting through its directors, officers or employees, are
its sole liabilities; however, the veil with which the law covers and isolates the corporation
from its directors, officers or employees will be lifted when the corporation is used by any of
them as cloak or cover for fraud or illegality or injustice.”

Considering the surrounding circumstances of the case as well as the pieces of

evidence and the long line of decisions of the Honorable Supreme Court, the fact that
Complainant Hipolito has causes of action against Respondents Citihomes Realty, Inc.,
Emeterio A. Eugenio, Evangeline R. Eugenio, Michelle Anne R. Roque, Ma. Teresa F. Punay
and J. Mariano F. Barcenas cannot be denied.
As to the second issue, considering that bad faith and fraud were present in the
instant case, moral and exemplary damages should be awarded to the Complainant thereof.

The Civil Code provides that moral damages include physical suffering, mental
anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social
humiliation, and similar injury. Though incapable of pecuniary estimation, moral damages
may be recovered if they are the proximate result of the defendant’s wrongful act or
omission.

“The award of moral damages is designed to compensate the claimants for actual
injury and is not meant to enrich the complainant at the expense of the defendant”'.

“It must be understood to be in the concept of grants not punitive or corrective in

nature, calculated to compensate the claimant for the injury suffered. In other words, moral
damages are not awarded to punish the defendant but to compensate the victim”4.

22 91 Phil. 786(1952).
3 4 70 SCRA 86(2005)
4 People vs. Aringue 283 SCRA 29!

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 In the case at bar, Respondents are liable for moral damages. Taking into account the
solid reputation and standing of Complainant plus the Respondents’ unjustified and
unwarranted refusal to perform their obligations to Complainant despite numerous and
repeated demands, moral damages was suffered by Complainant because she suffered
besmirched reputation, had sleepless nights and wounded feelings. Accordingly, an award of
moral damages in Complainant Hipolito’s favor in the amount of ONE HUNDRED
THOUSAND PESOS (Php 100,000.00) is in order.

Respondents Citihomes Realty, Inc., Emeterio A. Eugenio, Evangeline R. Eugenio,

Michelle Anne R. Roque, Ma. Teresa F. Punay and J. Mariano F. Barcenas are likewise liable
for exemplary damages. “Exemplary damages are required by public policy to suppress
wanton acts. Exemplary or corrective damages are imposed, by way of example or correction
for the public good, in addition to the moral, temperate, liquidated or compensatory
damages”5.

In the case at bar, considering the breach of contract and the continued unjustified
refusal of Respondents Citihomes Realty, Inc., Emeterio A. Eugenio, Evangeline R. Eugenio,
Michelle Anne R. Roque, Ma. Teresa F. Punay and J. Mariano F. Barcenas to comply with
their obligations despite repeated lawful demands, the award of exemplary damages is in
order, by way of example or correction for the public good, so as to deter similarly minded
persons such as Respondents from further committing such wanton and blatant acts.
Accordingly, an award of exemplary damages in Complainant’s favor in the amount of ONE
HUNDRED THOUSAND PESOS (Php 100,000.00) is in order.

In the same vein, Article 2208 (2) of the New Civil Code provides for the award of
attorney’s fees when the defendant’s act or omission has compelled the plaintiff to litigate
with third persons or to incur expenses to protect his interest.

WHEREFORE, premises considered, judgment is hereby rendered as follows:

1.) Respondents to pay the complainant jointly and solidarily the following:

a) Moral damages in the amount of One Hundred Thousand Pesos

(Php100,000.00) for the sleepless nights and serious anxiety suffered by
the complainant;

b) Exemplary damages in the amount of One Hundred Thousand Pesos

(Php100,000.00) for the wanton, unlawful and malicious violation of the
respondents of their legal and contractual obligations;

c) Attorney’s fees in the amount equivalent to Ten (10) percent (%) of the
total claims;

5 Art. 229 Civil Code: Zenith Insurance Corp. vs. Court of Appeals 185 SCRA 398

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 2.) DIRECTING Respondent Citihomes Realty, Inc to deliver the Transfer
Certificate of Title No. 040-2012007459, the original copies of the Deed of Sale,
the Tax Declarations and other pertinent documents to Complainant Hipolito;

SO ORDERED.

San Fernando City, Pampanga. 05 July 2019.

ATTY. DONN C. TAMAYO

HOUSING AND LAND USE ARBITER

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