Solid Homes, Inc. vs. Laserna

A one-page administrative decision that adopts by reference the findings of fact and conclusions of law of the lower tribunal, a copy of which is attached and made an integral part thereof after independent evaluation of the records, satisfies due process and, even tested under Section 14, Article VIII, constitutes a valid memorandum decision. The buyers' action for delivery of title was also properly entertained despite incomplete payment where no valid notarial cancellation under Republic Act No. 6552 had been effected.

Solid Homes, Inc. is a corporation engaged in the development and sale of subdivision lots, while Evelina Laserna and Gloria Cajipe, represented by attorney-in-fact Proceso F. Cruz, stood as buyers of subdivision land under a contract to sell. Sales of subdivision lots fall under the protective regime of Presidential Decree No. 957 and, for failure to pay installments, Republic Act No. 6552, with disputes cognizable by the Housing and Land Use Regulatory Board subject to appeal to the Office of the President and judicial review.

On 1 April 1977, Evelina Laserna and Gloria Cajipe, represented by attorney-in-fact Proceso F. Cruz as buyers, entered into a Contract to Sell with Solid Homes, Inc. as seller over Lot 3, Block I, Phase II, Loyola Grand Villas, Quezon City, with an area of 600 square meters, more or less. The total contract price was P172,260.00, payable with P33,060.00 down payment upon signing and the remaining balance of P166,421.88, inclusive of 12% interest per annum, payable over three years at a monthly installment of P4,622.83 beginning 1 April 1977. The buyers made the down payment and several monthly installments.

According to the buyers, when they had allegedly paid 90% of the purchase price, leaving an outstanding balance of only P5,928.18, they demanded execution and delivery of the Deed of Sale and Transfer Certificate of Title upon final payment, but Solid Homes did not comply. Petitioner, for its part, asserted in its Answer dated 17 September 1990 that the buyers had not yet paid the price in full, had no cause of action, and had abandoned the contract, which it considered rescinded under its terms. Thereafter, on 28 June 1990, the buyers filed a Complaint for Delivery of Title and Execution of Deed of Sale with Damages before the HLURB.

During the proceedings it was undisputed that the contract price had not been fully paid, with the buyers admitting an unpaid balance and expressing willingness to pay it, and that petitioner had treated the Contract to Sell as cancelled without a notarial act of cancellation. After refusal of a tender of P11,584.41 representing the balance as determined below, no consignation with the judicial authority was made. The tribunals below factually fixed the remaining balance at P11,585.41 and found no valid cancellation or forfeiture, requiring payment first before execution and delivery of the deed and title.

• Validity of Adoption by Reference: Petitioner argued that the one-page 10 June 2003 Decision of the Office of the President, which merely adopted by reference the findings and conclusions of the HLURB Board of Commissioners without recitation of facts and law, runs afoul of Section 14, Article VIII of the 1987 Constitution requiring decisions to express clearly and distinctly the facts and law on which they are based.
• Due Process: Petitioner maintained that full exposition of facts and law goes to the essence of due process to inform parties of the considerations supporting a decision, and that without a complete statement of facts proven it is impossible to pass upon the issues, apply the law, or uphold the rights of the litigant entitled thereto.
• Lack of Cause of Action: Petitioner argued that the HLURB Complaint stated no cause of action because the purchase price had not been fully paid, so the buyers' right of action would accrue only upon fulfillment of the obligation to pay the balance, rendering the Complaint premature and dismissible outright.

• Memorandum Decision and Constitutional Form: Whether the Court of Appeals seriously erred in holding that the Office of the President's Decision, which merely adopts by reference the findings and conclusions of the HLURB Board of Commissioners, complies with the constitutional mandate that decisions state the facts and law on which they are based.
• Cause of Action: Whether the Court of Appeals seriously erred in not reversing the Office of the President considering that respondents' Complaint allegedly lacks a cause of action for non-full payment of the purchase price.

• Memorandum Decision and Constitutional Form: No. Incorporation by reference with the adopted decision attached as an annex is a valid memorandum decision complying with due process and, even tested under Section 14, Article VIII and Section 40, B.P. Blg. 129.
• Cause of Action: No. Dismissal for lack of cause of action was merely permissive under the HLURB Rules, and the Complaint was properly tried where wrongful rescission and protection against cancellation under P.D. No. 957 and R.A. No. 6552 were also in issue.

• Memorandum Decision and Constitutional Form: Section 14, Article VIII applies to judicial proceedings, not administrative proceedings where due process under Ang Tibay vs. CIR requires only hearing, consideration of evidence, substantial evidentiary support, independent consideration, and a decision informing parties of issues and reasons. Even assuming arguendo constitutional standards applied, the Permskul conditions were met because the HLURB Decision was attached as Annex A for direct access, the Office stated careful study and thorough evaluation of the records, facts were essentially undisputed, and the action was a simple specific performance case without doctrinal complications.
• Cause of Action: Section 7 of the 1987 HLURB Rules uses "may," making immediate dismissal for lack of cause of action discretionary in pursuit of just, speedy and inexpensive determination. Hearing revealed a further cause in the seller's wrongful treatment of the contract as cancelled and forfeited, which under Section 24, P.D. No. 957 in relation to Section 4, R.A. No. 6552 requires grace period and notarial notice of cancellation; absent such act the contract stood, with payment of balance preceding execution and delivery, and tender without consignation after refusal did not discharge the buyers.

• Memorandum decisions — An appellate decision may adopt by reference the findings of fact and conclusions of law of the inferior tribunal on grounds of expediency, practicality, convenience and docket status, and such adoption complies with the constitutional mandate. Applied to sustain the Office of the President's affirmance in toto of the HLURB Board Decision.
• Requisites for valid memorandum decisions under Francisco vs. Permskul — Incorporation must not be by remote reference; the adopted findings must be directly accessible through a statement attached as an indispensable annex, the adopted decision must itself comply with Section 14, Article VIII, prior independent examination must be shown, and resort is limited to simple litigations where facts are largely accepted and no doctrinal complications require extended discussion. Applied to find the Office of the President's Decision with attached HLURB Decision compliant.
• Administrative due process under Ang Tibay vs. CIR — Parties enjoy the right to hearing and evidence, consideration of evidence, substantial evidentiary support, decision on record evidence disclosed to parties, independent consideration, and a decision stating issues and reasons, without the judicial-form requirement of clearly and distinctly expressing facts and law. Applied to hold Section 14, Article VIII inapplicable to the Office of the President and HLURB while due process was satisfied.
• Cancellation of contracts to sell under Section 24, P.D. No. 957 in relation to Section 4, R.A. No. 6552 — Where less than two years of installments were paid, the seller must give at least sixty days grace from due date and, upon non-payment, cancel only after thirty days from receipt of notarial notice of cancellation or demand for rescission. Applied to reject treatment of the Contract to Sell as cancelled and payments as forfeited absent notarial act.
• Tender of payment and consignation under Ramos vs. Sarao — Tender manifests desire to comply, but if the creditor refuses without just cause discharge occurs only by consignation through deposit with judicial authority with proof of tender and notice to interested parties, compliance being mandatory. Applied to hold the P11,584.41 tender, refused but not consigned, did not discharge the balance.

• "The memorandum decision, to be valid, cannot incorporate the findings of fact and the conclusions of law of the lower court only by remote reference, which is to say that the challenged decision is not easily and immediately available to the person reading the memorandum decision." — States the core limitation on incorporation by reference, requiring direct availability of the adopted decision to validate a memorandum disposition.
• "It must be stated that Section 14, Article VIII of the 1987 Constitution need not apply to decisions rendered in administrative proceedings, as in the case a bar." — Defines the scope of the constitutional form requirement as confined to the judiciary, leaving administrative decisions to due process standards.
• "After a careful study and thorough evaluation of the records of the case, this Office is convinced by the findings of the HLURB, thus we find no cogent reason to depart from the assailed [D]ecision." — Reproduces the operative portion of the challenged administrative affirmance, showing independent evaluation before adoption by reference with annex.

• Yao vs. Court of Appeals, G.R. No. 132428, 24 October 2000 — Cited as sanctioning memorandum decisions under Section 40, B.P. Blg. 129 and prescribing compliance requirements for form and occasions of use.
• Romero vs. Court of Appeals, No. L-59606, 8 January 1987 — Cited as example where adoption by reference for judicial convenience and expediency after review of evidence substantially complied with constitutional duty.
• Francisco vs. Permskul, G.R. No. 81006, 12 May 1989 — Cited as controlling authority upholding a memorandum decision adopting lower court findings while laying down conditions for validity and warning against use as excuse for judicial sloth.
• Oil and Natural Gas Commission vs. Court of Appeals, G.R. No. 114323, 23 July 1998 — Cited for the proposition that the constitutional mandate does not preclude memorandum decisions and that incorporation avoids cumbersome reproduction.
• Ang Tibay vs. CIR, 69 Phil. 635 (1940) — Cited as landmark source of cardinal rights in administrative proceedings defining the due process test applied to the Office of the President's Decision.
• Ramos vs. Sarao, G.R. No. 149756, 11 February 2005 — Cited for tender and consignation requisites to explain why refused tender without consignation did not discharge the price balance.
• Mangubat vs. de Castro, 163 SCRA 608 — Cited through the Arbiter for liberal construction of administrative rules to promote just, speedy and inexpensive determination.

• Section 14, Article VIII, 1987 Philippine Constitution — Requires no decision by any court without clearly and distinctly expressing facts and law; held inapplicable to administrative decisions but satisfied in any event by the attached adoption.
• Section 40, B.P. Blg. 129, as amended — Permits decisions in appealed cases to state findings and conclusions by adoption by reference from the appealed decision; basis for validating memorandum decisions.
• Section 1, Article III, 1987 Philippine Constitution — Guarantees due process; satisfied where parties were heard, evidence evaluated, and bases made known through the annexed HLURB Decision.
• Section 7, 1987 HLURB Rules of Procedure — Provides the Arbiter may immediately dismiss for lack of jurisdiction or cause of action; construed as permissive, not directive, supporting discretion to hear the Complaint.
• Section 24, P.D. No. 957 — Provides rights of buyer failing to pay installments for reasons other than developer's failure to develop are governed by R.A. No. 6552; applied to bar automatic cancellation and forfeiture.
• Section 4, R.A. No. 6552 — Requires at least sixty days grace where less than two years installments paid and cancellation only after thirty days from receipt of notarial notice; applied to preserve the Contract to Sell.

Austria-Martinez, Acting Chairperson, Tinga (Assigned as Special Member), Nachura, Reyes, JJ., concur.