Cabral vs. Uy

The subsequent issuance of an HLURB license to sell does not extinguish the criminal liability of a subdivision developer who sold lots without such license, the offense being malum prohibitum under Section 5 of P.D. 957, where criminal intent is immaterial and the sole issue is whether the law was violated at the time of the prohibited act.

Respondent Jacinto Uy is the chairman of Moldex Realty, Inc. (Moldex), with the other respondents serving as its officers and directors. Moldex was engaged in a residential subdivision project in Bulacan, into which Uy sought to incorporate two parcels of land totaling 20,954 square meters held by one Quintin Bernardo under emancipation patents. Petitioner Victoria P. Cabral claimed to be the registered owner of the lots subject of Bernardo's emancipation patents and had a pending case for cancellation of those patents before the Department of Agrarian Reform Adjudication Board. Presidential Decree 957, the Subdivision and Condominium Buyer's Protective Decree, regulates the sale of subdivision lots and condominiums for the public good, requiring developers to obtain a license to sell from the HLURB before offering lots to the public.

Respondent Jacinto Uy, chairman of Moldex Realty, Inc. (Moldex), entered into a joint venture agreement with Quintin Bernardo for the inclusion into Moldex's residential subdivision project in Bulacan of two parcels of land totaling 20,954 square meters that Bernardo held under two emancipation patents. Petitioner Victoria P. Cabral claimed to be the registered owner of those same lots and had a pending case for cancellation of the patents before the Department of Agrarian Reform Adjudication Board. Prior to the transaction between Bernardo and Uy, the latter had offered to acquire the lots from Cabral, but she refused because of that pending case.

On June 21, 2001, Moldex applied for a license to sell subdivision lots in the project with the Housing and Land Use Regulatory Board (HLURB), but the application was denied for failure to comply with the requirements. On July 2, 2002, Cabral filed a criminal complaint against Uy and the other Moldex officers for violation of Section 5 of P.D. 957, alleging that Moldex sold subdivision lots without the required HLURB license. On April 28, 2003, the public prosecutor's office filed a criminal information before the Regional Trial Court of Quezon City, Branch 83, docketed as Criminal Case Q-03-116823, charging respondents with selling a subdivision lot to one Josefa C. Yanga without a license from the HLURB.

Subsequently, on September 17, 2003, the HLURB issued Moldex the license to sell that it needed. Respondents then filed a motion to quash the information and a motion for judicial determination of probable cause, asserting that the prosecutor's office and the trial court lacked jurisdiction over violations of P.D. 957 — such jurisdiction belonging exclusively to the HLURB — and that, in any event, the subsequent issuance of the license extinguished their criminal liability. The trial court denied both motions on May 20, 2004, and denied the motion for reconsideration on June 15, 2005. Respondents appealed to the Court of Appeals, which upheld the trial court's jurisdiction but ordered the dismissal of the case on the ground that the subsequent license issuance extinguished criminal liability. The Office of the Solicitor General joined the petitioner in seeking reversal of the appellate court's ruling.

• Jurisdiction: Petitioner maintained that the public prosecutor's office and the trial court had jurisdiction over criminal actions for violation of P.D. 957, the penalty being a fine and imprisonment within the trial court's jurisdictional threshold.
• Extinguishment of Liability: Petitioner argued that the subsequent issuance of an HLURB license to sell could not retroactively extinguish respondents' criminal liability for selling subdivision lots without such license, the offense being malum prohibitum where the sole issue is whether the law was violated.

• Jurisdiction: Respondents argued that the office of the public prosecutor and the trial court had no jurisdiction over violations of P.D. 957, such jurisdiction being with the HLURB alone.
• Extinguishment of Liability: Respondents maintained that, granting the prosecutor and trial court could take cognizance of the case, they could not be held criminally liable because the HLURB subsequently issued them a license to sell, thereby extinguishing their criminal liability.

• Jurisdiction: Whether the office of the public prosecutor and the trial court have jurisdiction over criminal actions for violation of P.D. 957.
• Extinguishment of Criminal Liability: Whether the HLURB's subsequent issuance to Moldex of a license to sell extinguished respondents' criminal liability for selling subdivision lots prior to the issuance of such license.

• Jurisdiction: Yes. The public prosecutor had authority to file the criminal information and the trial court had power to hear and adjudicate the action, the penalty under Section 39 of P.D. 957 being a ₱20,000 fine and/or imprisonment not exceeding ten years, which falls within the RTC's jurisdiction.
• Extinguishment of Criminal Liability: No. The subsequent issuance of a license to sell cannot reach back to erase the offense or extinguish criminal liability, the violation of Section 5 of P.D. 957 being malum prohibitum where criminal intent is immaterial and the sole issue is whether the law was violated.

• Jurisdiction: Conformably with Sia vs. People, the Court affirmed that the public prosecutor possessed authority to file the criminal information for violation of P.D. 957 and the trial court possessed power to hear and adjudicate the action. The penalty prescribed by Section 39 of P.D. 957 — a fine of not more than ₱20,000 and/or imprisonment of not more than ten years — brings the offense within the jurisdiction of the Regional Trial Court. The Court of Appeals correctly upheld this jurisdictional basis.

• Extinguishment of Criminal Liability: P.D. 957 was enacted to regulate for the public good the sale of subdivision lots and condominiums. Section 5 prohibits the sale of subdivision lots without prior issuance of an HLURB license, and Section 39 punishes violators. The crime is regarded as malum prohibitum because P.D. 957 is a special law designed to protect the welfare of society and ensure the carrying on of the purposes of civil life. In crimes that are mala prohibita, the forbidden acts might not be inherently immoral, but they are punished because the law declares them forbidden; the sole issue is whether the law has been violated. Since the Information sufficiently alleged that Moldex sold a subdivision lot when it did not yet have a license to do so, the crime was consummated at that point. The subsequent issuance of the license and the invocation of good faith cannot operate retroactively to erase the offense. The Court distinguished Co Chien vs. Sta. Lucia Realty and Development, Inc., which was a civil case for refund and nullification of contract — not a criminal prosecution — and in which the HLURB still imposed an administrative fine on the developer despite the subsequent license issuance, demonstrating that subsequent licensing does not extinguish liability under Section 5.

• Mala Prohibita Doctrine — In crimes that are mala prohibita, the forbidden acts might not be inherently immoral but are punished because the law declares them forbidden. Malice or criminal intent is immaterial; the sole issue is whether the law has been violated. The Court applied this doctrine to hold that the sale of subdivision lots without an HLURB license constitutes a violation of Section 5 of P.D. 957 regardless of good faith, and that the subsequent issuance of a license cannot retroactively extinguish the criminal liability already incurred.

• Jurisdiction over P.D. 957 Violations — The public prosecutor has authority to file criminal informations for violations of P.D. 957, and the Regional Trial Court has jurisdiction to hear and adjudicate such actions, the prescribed penalty — a fine of not more than ₱20,000 and/or imprisonment of not more than ten years — falling within the RTC's jurisdictional scope. This principle was affirmed by reference to Sia vs. People.

• "It is the commission of that act as defined by law, not its character or effect that determines whether or not its provision has been violated. Malice or criminal intent is immaterial in such crime." — This passage articulates the Court's application of the mala prohibita doctrine to P.D. 957 violations, establishing that intent and subsequent remedial measures are irrelevant to criminal liability.

• "Assuming the allegations to be true, the subsequent issuance of the license and the invocation of good faith cannot reach back to erase the offense and extinguish respondents Uy, et al.'s criminal liability." — This is the ratio decidendi on the second issue, directly rejecting the argument that subsequent licensing extinguishes prior criminal liability.

• "With these crimes, the sole issue is whether the law has been violated." — This formulation of the mala prohibita standard is frequently cited in Philippine criminal law jurisprudence and captures the essential analytical framework applied by the Court.

• Sia vs. People, G.R. No. 159659, October 12, 2006, 504 SCRA 507 — Controlling precedent followed to uphold the jurisdiction of the public prosecutor and the trial court over criminal actions for violation of P.D. 957.
• Co Chien vs. Sta. Lucia Realty and Development, Inc., G.R. No. 162090, January 31, 2007, 513 SCRA 570 — Distinguished. The Court of Appeals had relied on this case to justify extinguishment of criminal liability, but the Supreme Court clarified that Co Chien was a civil case for refund and nullification of contract, not a criminal prosecution, and that the HLURB therein still imposed an administrative fine despite subsequent licensing.
• Go vs. The Fifth Division of Sandiganbayan, G.R. No. 172602, September 3, 2007, 532 SCRA 130 — Cited for the proposition that malice or criminal intent is immaterial in mala prohibita crimes.
• Garcia vs. Court of Appeals, G.R. No. 157171, March 14, 2006, 484 SCRA 617 — Cited for the principle that in mala prohibita, the sole issue is whether the law has been violated.
• Merciales vs. Court of Appeals, 429 Phil. 70 (2002) — Cited to support the proposition that the Solicitor General's joinder of the petitioner's cause fulfilled the requirement that all criminal actions be prosecuted under the direction and control of the public prosecutor, rendering moot the issue of petitioner's personality to question the dismissal.

• Section 5, Presidential Decree No. 957 — Requires that an owner or dealer issued a registration certificate must first obtain a license to sell from the HLURB before selling any subdivision lot or condominium unit. Applied as the substantive prohibition that respondents were charged with violating.
• Section 38, Presidential Decree No. 957 — Authorizes the HLURB to prescribe and impose administrative fines not exceeding ₱10,000 for violations of the Decree or its implementing rules. Cited to show that administrative fines may be imposed even where a license is subsequently issued.
• Section 39, Presidential Decree No. 957 — Prescribes the penalty for violation of any provision of the Decree: a fine of not more than ₱20,000 and/or imprisonment of not more than ten years. Applied to establish the RTC's jurisdiction over the offense and to confirm that corporate officers in charge of administration are criminally responsible.

Antonio T. Carpio, Arturo D. Brion, Mariano C. del Castillo, and Jose P. Perez concurred. No separate concurring opinions were noted.