Administrative Law Case Digests

Arellano University School of Law

aiza ebina/2015

CHRISTIAN GENERAL ASSEMBLY, INC. vs IGNACIO

597 SCRA 266
Origin and Development of Administrative Law
Growth and Utilization of Administrative Agencies
FACTS: On April 30, 1998, CGA entered into a Contract to Sell a subdivision lot (subject property) with the
respondents - the registered owners and developers of a housing subdivision known as Villa Priscilla
Subdivision located in Barangay Cutcut, Pulilan, Bulacan. According to CGA, it religiously paid the monthly
installments until its administrative pastor discovered that the title covering the subject property suffered
from fatal flaws and defects. Understandably aggrieved after discovering these circumstances, CGA filed a
complaint against the respondents before the RTC on April 30, 2002. CGA claimed that the respondents
fraudulently concealed the fact that the subject property was part of a property under litigation; thus, the
Contract to Sell was a rescissible contract under Article 1381 of the Civil Code. CGA asked the trial court to
rescind the contract; order the respondents to return the amounts already paid; and award actual, moral
and exemplary damages, attorney's fees and litigation expenses. Instead of filing an answer, the
respondents filed a motion to dismiss asserting that the RTC had no jurisdiction over the case. Citing PD
No. 957 and PD No. 1344, the respondents claimed that the case falls within the exclusive jurisdiction of
the HLURB since it involved the sale of a subdivision lot. CGA opposed the motion to dismiss, claiming that
the action is for rescission of contract, not specific performance, and is not among the actions within the
exclusive jurisdiction of the HLURB, as specified by PD No. 957 and PD No. 1344.
On October 15, 2002, the RTC issued an order denying the respondents' motion to dismiss. The RTC held
that the action for rescission of contract and damages due to the respondents' fraudulent
misrepresentation that they are the rightful owners of the subject property, free from all liens and
encumbrances, is outside the HLURB's jurisdiction.
The respondents countered by filing a petition for certiorari with the CA. In its October 20, 2003 decision,
the CA found merit in the respondents' position and set the RTC order aside; the CA ruled that the HLURB
had exclusive jurisdiction over the subject matter of the complaint since it involved a contract to sell a
subdivision lot based on the provisions of PD No. 957 and PD No. 1344.
Contending that the CA committed reversible error, the CGA now comes before the Court asking us to
overturn the CA decision and resolution.
ISSUE: Whether or not an action to rescind a contract to sell a subdivision lot that the buyer found to be
under litigation falls under the exclusive jurisdiction of the Housing and Land Use Regulatory Board
(HLURB).
RULING: Yes. The nature of an action and the jurisdiction of a tribunal are determined by the material
allegations of the complaint and the law governing at the time the action was commenced. The jurisdiction
of the tribunal over the subject matter or nature of an action is conferred only by law, not by the parties'
consent or by their waiver in favor of a court that would otherwise have no jurisdiction over the subject
matter or the nature of an action. Thus, the determination of whether the CGA's cause of action falls under
the jurisdiction of the HLURB necessitates a closer examination of the laws defining the HLURB's
jurisdiction and authority.
The surge in the real estate business in the country brought with it an increasing number of cases between
subdivision owners/developers and lot buyers on the issue of the extent of the HLURB's exclusive
jurisdiction. In the cases that reached us, we have consistently ruled that the HLURB has exclusive
jurisdiction over complaints arising from contracts between the subdivision developer and the lot buyer or
those aimed at compelling the subdivision developer to comply with its contractual and statutory
obligations to make the subdivision a better place to live in.
We view CGA's contention - that the CA erred in applying Article 1191 of the Civil Code as basis for the
contract's rescission - to be a negligible point. Regardless of whether the rescission of contract is based on
Article 1191 or 1381 of the Civil Code, the fact remains that what CGA principally wants is a refund of all
payments it already made to the respondents. This intent, amply articulated in its complaint, places its
action within the ambit of the HLURB's exclusive jurisdiction and outside the reach of the regular courts.
Accordingly, CGA has to file its complaint before the HLURB, the body with the proper jurisdiction.
RATIO: In general, the quantum of judicial or quasi-judicial powers which an administrative agency may
exercise is defined in the enabling act of such agency. In other words, the extent to which an
administrative entity may exercise such powers depends largely, if not wholly on the provisions of the

statute creating or empowering such agency. In the exercise of such powers, the agency concerned must
commonly interpret and apply contracts and determine the rights of private parties under such contracts,
One thrust of the multiplication of administrative agencies is that the interpretation of contracts and the
determination of private rights thereunder is no longer a uniquely judicial function, exercisable only by our
regular courts.
--REALTY EXCHANGE VENTURE CORPORATION vs SENDINO
233 SCRA 665
Origin and Development of Administrative Law
Growth and Utilization of Administrative Agencies
FACTS: Private respondent Lucina C. Sendino entered into a reservation agreement with Realty Exchange
Venture, Inc. (REVI) for a 120-square meter lot in Raymondville Subdivision in Sucat, Paranaque for
P307,800.00 as its purchase price. She paid P1,000.00 as partial reservation fee on January 15, 1989 and
completed payment of this fee on January 20, 1989 by paying P4,000.00. On July 18, 1989, private
respondent paid REVI P16,600.00 as full downpayment on the purchase price. However, she was advised
by REVI to change her co-maker, which she agreed, asking for an extension of one month to do so.
For alleged non-compliance with the requirement of submission of the appropriate documents under the
terms of the original agreement, REVI, through its Vice-President for Marketing, informed respondent of the
cancellation of the contract on the 31st of July 1989.
On April 20, 1990, private respondent filed a complaint for Specific Performance against REVI with the
office of Appeals, Adjudication and Legal Affairs (OAALA) of the Housing and Land Use Regulatory Board
(HLURB) asking that respondent be ordered to comply and continue with the sale of the house and lot, and
to pay damages.
On April 3, 1991 the HLURB, whose authority to hear and decide the complaint was challenged by REVI in
its answer, rendered its judgment in favor of private respondent and ordered petitioners to continue with
the sale of the house and lot and to pay private respondent damages and costs of the suit. An appeal from
this decision was taken to the HLURB OAALA Arbiter, which affirmed the Board's decision. The decision of
the OAALA Arbiter was appealed to the Office of the President, herein public respondent.
On January 7, 1993, the public respondent rendered its decision dismissing the petitioners' appeal. Motion
for reconsideration of the decision was denied by the public respondent on January 26, 1993. Consequently
petitioners come before this Court, in this petition, which the Court resolves to treat as a petition for
certiorari.
ISSUE: Whether or not the public respondent committed serious error in declaring that the HLURB has
quasi-judicial functions notwithstanding absence of express grant by E.O. No. 90 which created it
RULING: No. It is settled that rules of procedure are as a matter of course construed liberally in
proceedings before administrative bodies. In the instant case, the original suit for specific performance and
damages was filed by the private respondent with the HLURB-OAALA, an administrative body not
hamstrung by the strict procedural technicalities of the Rules of Court. Under the circumstances, it was
certainly appropriate for the HLURB-OAALA to have acted on the substantive questions relating to the
validity of petitioners' unilateral rescission of the contract without unduly concerning itself with a mere
procedural slip, the non-joinder of private petitioner's husband in the original complaint before the HLURB.
Moreover, since petitioners participated in the administrative proceedings without objecting to or raising
the procedural infirmity, they were certainly estopped from raising it on appeal before the Office of the
President and before this Court.
Proceeding to the principal issues raised by the petitioner, while E.O. 85 dated 12 December 1986
abolished the Ministry of Human Settlements (MHS), it is patently clear from a reading of its provisions that
the said executive order did not abolish the Human Settlements Regulatory Commission (HSRC) which
continued to exercise its powers and functions even after the Ministry of Human Settlements ceased to
exist. In spite of the Aquino Government's stated intention of eradicating what it considered the vestiges of
the previous regime, it was not its intention to create a vacuum by abolishing those juridical entities,
agencies, corporations, etc., attached to or supervised by the MHS, which performed vital administrative
functions.
Pursuant to this provision therefore, the President subsequently issued Executive Order No. 90, series of
1986, recognizing the Human Settlements Regulatory Commission (renamed the HLURB) as one of the
principal housing agencies of the government. Prior to this, Executive Order No. 648 in 1981 transferred all
the functions of the National Housing Authority (pursuant to Presidential Decrees Nos. 957, 1216 and
1344) to the Human Settlements Regulatory Commission (HSRC) consolidating all regulatory functions
relating to land use and housing development in a single entity. Being the sole regulatory body for housing

and land development, the renamed body, the HLURB, 11would have been reduced to a functionally sterile
entity if, as the petitioner contends, it lacked the powers exercised by its predecessor which included the
power to settle disputes concerning land use and housing development and acquisition.
As explicitly provided by law, jurisdiction over actions for specific performance of contractual and statutory
obligations filed by buyers of subdivision lot or condominium unit against the owner or developer, is vested
exclusively in the HSRC.
There is no question that a statute may vest exclusive original jurisdiction in an administrative agency over
certain disputes and controversies falling within the agency's special expertise. The National Housing
Authority (now HLURB) shall have exclusive jurisdiction to regulate the real estate trade and business in
accordance with the terms of PD No. 957 which defines the quantum of judicial or quasi-judicial powers of
said agency.
Clearly, therefore, the HLURB properly exercised its jurisdiction over the case filed by the petitioners with
its adjudicative body, the OAALA, in ordering petitioners to comply with their obligations arising from the
Reservation Agreement. In general, the quantum of judicial or quasi-judicial powers which an
administrative agency may exercise is defined in the agency's enabling act. The Court recognizes the
HLURB as the successor agency of the HSRC's powers and functions, it therefore follows that the transfer of
such functions from the NHA to the HRSC effected by Section 8 of E.O. 648, series of 1981, thereby
resulted in the acquisition by the HLURB of adjudicatory powers which included the power to "hear and
decide cases of unsound real estate business practices and cases of specific performance." Obviously, in
the exercise of its powers and functions, the HLURB must interpret and apply contracts, determine the
rights of the parties under these contracts, and award damages whenever appropriate. We fail to see how
the HSRC - which possessed jurisdiction over the actions for specific performance for contractual and
statutory obligations filed by buyers of subdivision lots against developers - had suddenly lots its
adjudicatory powers by the mere fiat of a change in name through E.O. 90.
In fine, the HLURB-OAALA acted within the scope of its authority in ordering petitioners to comply and
continue with the sale of the house and lot subject of the contract between the original parties. It cannot
be gainsaid that the quasi-judicial functions exercised by the body are necessary incidents to the proper
exercise of its powers and functions under E.O. 90 and the laws enacted delineating the scope of authority
of its Board of Commissioners. Denying the body those functions so necessary in carrying out its power to
regulate housing and land use results in its effective emasculation as an important regulatory body in an
area vital to the national economy.
RATIO: One thrust of the multiplication of administrative agencies is that the interpretation of such
contracts and agreements and the determination of private rights under these agreements is no longer a
uniquely judicial function. The absence of any provision, express or implied, in E.O. 90, repealing those
quasi-judicial powers inherited by the HSRC from the National Housing Authority, furthermore militates
against petitioners' position on the question.
--ANTIPOLO REALTY CORPORATION vs. NATIONAL HOUSING AUTHORITY
153 SCRA 399
Origin and Development of Administrative Law
Growth and Utilization of Administrative Agencies
FACTS: Jose Hernando acquired prospective and beneficial ownership over Lot. No. 15, Block IV of the
Ponderosa Heights Subdivision in Antipolo, Rizal, from the petitioner Antipolo Realty Corporation under a
Contract to Sell. On 28 August 1974, Hernando transferred his rights over the said lot to private
respondent Virgilio Yuson, embodied in a Deed of Assignment and Substitution of Obligor. However, for
failure of Antipolo Realty to develop the subdivision project in accordance with its undertaking under
Clause 17 of the Contract to Sell (subdivision beautification), Mr. Yuson paid only the arrearages pertaining
to the period up to, and including, the month of August 1972 and stopped all monthly installment
payments falling due thereafter.
On 14 October 1976, the president of Antipolo Realty sent a notice to private respondent Yuson advising
that the required improvements in the subdivision had already been completed, and requesting
resumption of payment of the monthly installments on Lot No. 15. For his part, Mr. Yuson replied that he
would conform with the request as soon as he was able to verify the truth of the representation in the
notice. In a second letter dated 27 November 1976, Antipolo Realty reiterated its request, citing the
decision rendered by the National Housing Authority (NHA) on 25 October 1976 in Case No. 252 (entitled
"Jose B. Viado Jr., complainant vs. Conrado S. Reyes, respondent") declaring Antipolo Realty to have
"substantially complied with its commitment to the lot buyers pursuant to the Contract to Sell. A formal
demand was made for full and immediate payment of the amount of P16,994.73, representing installments
which, Antipolo Realty alleged, had accrued during the period while the improvements were being
completed i.e., between September 1972 and October 1976.

Yuson refused to pay the September 1972 - October 1976 monthly installments but agreed to pay the post
October 1976 installments. Antipolo Realty responded by rescinding the Contract to Sell, and claiming the
forfeiture of all installment payments previously made by Mr. Yuson. Yuson brought his dispute with
Antipolo Realty before NHA. Antipolo Realty filed a motion to dismiss, which NHA denied. After hearing, the
NHA rendered a decision on 9 March 1978 ordering the reinstatement of the Contract to Sell. A motion for
reconsideration of Antipolo Realty was also denied.
ISSUE: Whether or not in hearing the complaint of Yuson and in ordering the reinstatement of the Contract
to Sell between the parties NHA assumed the performance of judicial or quasi-judicial functions which it
was not authorized to perform
RULING: No. It is by now commonplace learning that many administrative agencies exercise and perform
adjudicatory powers and functions, though to a limited extent only. Limited delegation of judicial or quasijudicial authority to administrative agencies (e.g., the Securities and Exchange Commission and the
National Labor Relations Commission) is well recognized in our jurisdiction, basically because the need for
special competence and experience has been recognized as essential in the resolution of questions of
complex or specialized character and because of a companion recognition that the dockets of our regular
courts have remained crowded and clogged.
The Court held that under the law creating NHA it is empowered to regulate the real estate trade and
business involving specific performance of contractual and statutory obligations filed by buyers of
subdivision lots or condominium units against the owner, developer, dealer, broker or salesman.
The Court held that under the "sense-making and expeditious doctrine of primary jurisdiction, the courts
cannot or will not determine a controversy involving a question which is within the jurisdiction of an
administrative tribunal where the question demands the exercise of sound administrative discretion
requiring the special knowledge, experience, and services of the administrative tribunal to determine
technical and intricate matters of fact, and a uniformity of ruling is essential to comply with the purposes
of the regulatory statute administered."
RATIO: In general, the quantum of judicial or quasi-judicial powers which an administrative agency may
exercise is defined in the enabling act of such agency. In other words, the extent to which an
administrative entity may exercise such powers depends largely, if not wholly, on the provisions of the
statute creating or empowering such agency. In the exercise of such powers, the agency concerned must
commonly interpret and apply contracts and determine the rights of private parties under such contracts.
One thrust of the multiplication of administrative agencies is that the interpretation of contracts and the
determination of private rights thereunder is no longer a uniquely judicial function, exercisable only by our
regular courts.
--US vs DORR
2 Phil 332
Administration as an Organization Distinguished from Government
FACTS: The defendants have been convicted upon a complaint charging them with the offense of writing,
publishing, and circulating a scurrilous libel against the Government of the United States and the Insular
Government of the Philippine Islands. The complaint is based upon section 8 of Act No. 292 of the
Commission, which is as follows:
"Every person who shall utter seditious words or speeches, write, publish, or circulate scurrilous libels
against the Government of the United States or the Insular Government of the Philippine Islands, or which
tend to disturb or obstruct any lawful officer in executing his office, or which tend to instigate others to
cabal or meet together for unlawful purposes, or which suggest or incite rebellious conspiracies or riots, or
which tend to stir up the people against the lawful authorities, or to disturb the peace of the community,
the safety and order of the Government, or who shall knowingly conceal such evil practices, shall be
punished by a fine not exceeding two thousand dollars or by imprisonment not exceeding two years, or
both, in the discretion of the court."
The alleged libel was published as an editorial in the issue of the "Manila Freedom" of April 6, 1902, under
the caption of" A few hard facts."
ISSUE: Whether or not the article be regarded as embraced within the description of "scurrilous libels
against the Government of the United States or the Insular Government of the Philippine Islands"
RULING: No. The important question is to determine what is meant in section 8 of Act No. 292 by the
expression "the Insular Government of the Philippine Islands." Does it mean in a general and abstract
sense the existing laws and institutions of the Islands, or does it mean the aggregate of the individuals by

whom the Government of the Islands is, for the time being, administered? Either sense would doubtless be
admissible.
We understand, in modern political science, by the term "government", that institution or aggregate of
institutions by which an independent society makes and carries out those rules of action which are
necessary to enable men to live in a social state, or which are imposed upon the people forming that
society by those who possess the power or authority of prescribing them. Government is the aggregate of
authorities which rule a society. By "administration" again, we understand in modern times, and especially
in more or less free countries, the aggregate of those persons in whose hands the reins of government are
for the time being (the chief ministers or heads of departments)." (Bouvier, Law Dictionary, 89l.) But the
writer adds that the terms "government and administration" are not always used in their strictness, and
that "government" is often used for administration.
The article in question contains no attack upon the governmental system of the United States, and it is
quite apparent that, though grossly abusive as respects both the Commission as a body and some of its
individual members, it contains no attack upon the governmental system by which the authority of the
United States is enforced in these Islands. The form of government by a Civil Commission and a Civil
Governor is not assailed. It is the character of the men who are intrusted with the administration of the
government that the writer is seeking to bring into disrepute by impugning the purity of their motives,
their public integrity, and their private morals, and the wisdom of their policy. The publication of the article,
therefore, no seditious tendency being apparent, constitutes no offense under Act No. 292, section 8.
RATIO: Government is the aggregate of authorities which rule a society. By "administration" again, we
understand in modern times, and especially in more or less free countries, the aggregate of those persons
in whose hands the reins of government are for the time being (the chief ministers or heads of
departments). The terms "government and administration" are not always used in their strictness, and
that "government" is often used for administration.
---