Velasquez, Jr. vs. Lisondra Land

A party who successfully invokes the jurisdiction of a quasi-judicial agency to dismiss a pending action in the regular courts is estopped from subsequently assailing that same jurisdiction after receiving an adverse decision, where the party's inconsistent postures would result in a mockery of the judicial system and the passage of many years would render relitigation an exercise in futility.

In 1998, Perfecto Velasquez, Jr. and Lisondra Land Incorporated executed a joint venture agreement for the development of a 7,200-square meter parcel of land into a memorial park. Lisondra Land allegedly failed to secure the requisite Housing and Land Use Regulatory Board (HLURB) permits within a reasonable time, provide insurance coverage, and pay realty taxes. Velasquez further discovered that Lisondra Land collected kickbacks from agents and transferred lots to engineers and suppliers in exchange for services, contrary to the agreement to finance the project independently.

• The Joint Venture Agreement: In 1998, Perfecto Velasquez, Jr. and Lisondra Land entered into a joint venture agreement to develop a memorial park on a 7,200-square meter parcel. Lisondra Land undertook to secure permits and provide funding.
• Alleged Violations: Lisondra Land failed to secure HLURB permits timely, failed to provide insurance coverage, and failed to pay realty taxes. Velasquez alleged that Lisondra Land collected kickbacks from agents and gave away memorial lots to engineers, architects, and suppliers in lieu of cash payment for services.
• RTC Proceedings: Velasquez filed a complaint for breach of contract before the Regional Trial Court (RTC). Lisondra Land moved to dismiss, claiming the HLURB had exclusive jurisdiction over real estate trade practices. The RTC denied the motion.
• First Court of Appeals Proceeding: Lisondra Land filed a special civil action for certiorari (CA-G.R. SP No. 72463). In a Decision dated November 25, 2003, the CA granted the petition, ordered the dismissal of the RTC case, and held that the HLURB had exclusive jurisdiction under Section 1 of Presidential Decree (PD) No. 1344. The decision lapsed into finality.
• HLURB Proceedings: Velasquez filed a complaint for unsound real estate business practices before the HLURB. On July 20, 2007, the HLURB Arbiter rescinded the joint venture agreement, transferred project management to Velasquez, and ordered Lisondra Land to pay fines, moral damages (P200,000), exemplary damages (P200,000), and attorney's fees (P100,000).
• HLURB Board of Commissioners: Lisondra Land appealed. Initially, the Board dismissed the case for lack of jurisdiction (January 15, 2009), finding it was an intra-corporate controversy for the RTC. Upon Velasquez's motion for reconsideration, the Board reversed itself (January 21, 2010), affirmed the Arbiter's decision, but reduced damages to P50,000 each and attorney's fees to P30,000.
• Office of the President: Lisondra Land appealed. The Office of the President denied the appeal and affirmed the HLURB Board's resolution (August 1, 2013).
• Second Court of Appeals Proceeding: Lisondra Land filed a petition for review (CA-G.R. SP No. 131359). On December 28, 2016, the CA set aside the Office of the President's decision and dismissed Velasquez's complaint, ruling that the HLURB's authority is limited to cases filed by buyers or owners of subdivision lots.
• Supervening Event: During the pendency of the Supreme Court petition, Lisondra Land surrendered the property to Velasquez, who assumed full control of the project development.

• Estoppel: Velasquez argued that Lisondra Land is estopped from questioning the HLURB's jurisdiction after having successfully invoked that same jurisdiction to dismiss the RTC case in CA-G.R. SP No. 72463. Allowing Lisondra Land to reverse its position would make a complete mockery of the judicial system and render useless all proceedings conducted over fifteen years.
• Actual Controversy: Velasquez maintained that despite the surrender of the property, an actual controversy remained regarding Lisondra Land's liability for unsound real estate practices and damages.

• Lack of Jurisdiction: Lisondra Land countered that Velasquez is not a buyer or owner of a subdivision lot but a joint venture partner, and therefore the HLURB lacks jurisdiction over the dispute, which should be cognizable by the regular courts as an intra-corporate controversy.
• Nature of Action: Lisondra Land maintained that the complaint involves purely contractual issues between joint venture partners, outside the HLURB's limited mandate under PD No. 1344.

• Jurisdiction by Estoppel: Whether Lisondra Land is estopped from assailing the HLURB's jurisdiction after having actively invoked it to secure the dismissal of the original RTC case.
• HLURB Jurisdiction: Whether the HLURB has jurisdiction over a complaint for unsound real estate business practices filed by a joint venture partner who is not a buyer of a subdivision lot.
• Unsound Real Estate Practices: Whether Lisondra Land committed unsound real estate business practices warranting the imposition of fines and damages.

• Jurisdiction by Estoppel: Lisondra Land is estopped from questioning the HLURB's jurisdiction. Having successfully argued before the CA in CA-G.R. SP No. 72463 that the HLURB had exclusive jurisdiction over the dispute—thereby securing the dismissal of the RTC case—Lisondra Land cannot now adopt an inconsistent posture by claiming the HLURB lacks jurisdiction. The Court applied the exception to the general rule that estoppel does not confer jurisdiction, citing Cudiamat v. Batangas Savings and Loan Bank and Valenzuela v. Court of Appeals, where compelling a party to relitigate after many years and a full-blown trial would be an exercise in futility and superfluous.
• HLURB Jurisdiction: Ordinarily, the HLURB's jurisdiction under Section 1 of PD No. 1344 is limited to cases filed by buyers or owners of subdivision lots or condominium units against developers. Since Velasquez is a joint venture partner and not a buyer, the HLURB would normally lack jurisdiction over his complaint.
• Unsound Real Estate Practices: Lisondra Land is guilty of unsound real estate business practices. Substantial evidence showed that Lisondra Land sold memorial lots constituting open spaces in violation of Section 22 of PD No. 957, developed land outside the authorized project site (Lot 1680-B) without authority, failed to complete the project within the mandated period, and constructed substandard road networks (3-4 inches thick versus the required 6 inches). These acts prejudiced buyers and constituted unsound practices warranting fines of P10,000 for unauthorized development and P10,000 per unauthorized sale.
• Damages: Velasquez is entitled to moral damages (P50,000), exemplary damages (P50,000), and attorney's fees (P30,000), which shall earn interest at the rate of 6% per annum from the date of the HLURB Arbiter's Decision on July 20, 2007 until full payment, pursuant to Nacar v. Gallery Frames.

• Jurisdiction by Estoppel (Tijam v. Sibonghanoy) — A party cannot invoke the jurisdiction of a court or tribunal to obtain affirmative relief and subsequently repudiate that jurisdiction after failing to obtain a favorable judgment. However, per People v. Casiano, this doctrine applies only when the court or tribunal actually had jurisdiction over the subject matter; if jurisdiction was totally absent, estoppel cannot confer it.
• Exception to the General Rule on Estoppel — In exceptional circumstances where compelling the aggrieved party to refile the case would be an exercise in futility or superfluous—such as when many years have elapsed, the parties have already presented evidence in a full-blown trial, or the party is of advanced age—the principle of estoppel may be applied to prevent the assailant from raising lack of jurisdiction despite the general rule that jurisdiction is conferred by law and not by consent.
• HLURB Jurisdiction (PD No. 1344) — The HLURB has exclusive jurisdiction over: (a) unsound real estate business practices; (b) claims involving refund filed by subdivision lot or condominium unit buyers; and (c) specific performance cases filed by buyers. The offended party in actions for unsound practices must be the buyers of lands involved in development; otherwise, the complaint must be filed before regular courts.
• Unsound Real Estate Business Practices — Acts by real estate owners or developers that cause prejudice to buyers, including unauthorized alteration of approved development plans, sale of open spaces, development outside authorized sites, and failure to complete the project within the prescribed period, constitute unsound real estate business practices under PD No. 1344.

• "Lisondra Land cannot assume a theory different from its position in Civil Case No. 18146, CA-G.R. SP No. 72463 and the HLURB."
• "The Court cannot countenance Lisondra Land's act of adopting inconsistent postures - first, by attacking the jurisdiction of the trial court and, subsequently, the authority of the HLURB. Otherwise, the consequence is revolting as Lisondra Land would be allowed to make a complete mockery of the judicial system."
• "Here, the unfairness is not only patent but revolting. Lisondra Land should not be allowed to declare as useless all the proceedings had between the parties and compel Perfecto to go up to his Calvary once more."
• "The policy of PD No. 1344 is to curb the unscrupulous practices of the subdivision owner and developer in real estate trade and business that will prejudice the buyers."

• Tijam v. Sibonghanoy, 131 Phil. 556 (1968) — Established the doctrine that a party who invokes jurisdiction to secure relief is estopped from questioning it later.
• People v. Casiano, 111 Phil. 73 (1961) — Distinguished between estoppel when the court has jurisdiction (estoppel applies) versus when it has none (estoppel does not apply).
• Solid Homes, Inc. v. Payawal, 257 Phil. 914 (1989) — Affirmed HLURB's exclusive jurisdiction over actions between subdivision developers and buyers.
• Ortigas & Co., Ltd. Partnership v. Court of Appeals, 688 Phil. 367 (2012) — Held that HLURB jurisdiction over unsound real estate practices is limited to complaints filed by buyers; non-buyers must file before regular courts.
• Cudiamat v. Batangas Savings and Loan Bank, 628 Phil. 641 (2010) — Established the exception where estoppel applies to prevent relitigation that would be futile or superfluous.
• Valenzuela v. Court of Appeals — Cited for the principle that the general rule on refiling claims in liquidation proceedings should not apply if it would be an exercise in futility.

• Section 1, PD No. 1344 — Grants the HLURB exclusive jurisdiction to hear and decide cases involving: (a) unsound real estate business practices; (b) claims by subdivision lot or condominium unit buyers; and (c) specific performance cases filed by buyers.
• Section 22, PD No. 957 (Subdivision and Condominium Buyers' Protective Decree) — Prohibits owners or developers from changing or altering roads, open spaces, and other subdivision developments without permission from the Authority and consent of the homeowners association or majority of lot buyers.
• Section 2(d), (e), (g), (h), PD No. 957 — Definitions of subdivision project, subdivision lot, condominium project, and condominium unit.

Caguioa (Acting Chairperson), J. Reyes, Jr., Hernando, Lazaro-Javier.