SECOND DIVISION

[G.R. No. 92461. September 2, 1992.]

ESTATE DEVELOPERS AND INVESTORS CORPORATION, Petitioner, v. COURT OF APPEALS, ROSALIE OROPESA and/or
NESTOR OROPESA, Respondents.
Lino M. Patajo, for Petitioners.
Guerrero Lazo & Associates for Respondents.
SYLLABUS
1. ADMINISTRATIVE LAW; HOUSING AND LAND USE REGULATORY BOARD (FORMERLY NATIONAL HOUSING
AUTHORITY); SCOPE OF POWER TO REGULATE THE REAL ESTATE TRADE AND BUSINESS. A close scrutiny of the
complaint discloses that the promissory note upon which the collection suit is predicated, merely schedules the
amortization of the balance or unpaid portion of the purchase price of the house and lot. What appellant is
collecting involves the "sales of lots in commercial subdivisions," which per the Tropical Homes case jurisdiction lies
with the HLURB, and not with the civil courts. As We have said in Estate Developers and Investors Corporation v.
Sarte, Et. Al.: "We cannot uphold the contention of the petitioner that the NHA (now HLURB) has jurisdiction under
PD 1344 over complaints filed by a subdivision buyer against the project owner or developer but not over claims
filed by a developer against the lot buyer for the purchase price of the lot sold by the latter. While PD 957 was
designed to meet the need basically to protect lot buyers from the fraudulent manipulations of unscrupulous
subdivision owners, sellers and operators (See Whereas clauses) the exclusive jurisdiction vested in the NHA is
broad and general to regulate the real estate trade and business in accordance with the provisions of said law.
As clarified in PD 1344, such exclusive jurisdiction includes jurisdiction to hear and decide cases involving unsound
real estate business practices (Sec. 1 [A]) as well as claims for refund and complaints for specific performance filed
by the buyer (paragraphs B&C)."
DECISION
NOCON, J.:
The sole issue before Us is one of jurisdiction. In an action filed by a developer of a subdivision against a buyer of
a lot in said subdivision for collection of the balance of the unpaid price of said lot evidenced by a promissory note
executed by the lot buyer, does jurisdiction lie with the regular courts under Batas Pambansa Bilang 129 or with
the Housing and Land Use Regulatory Board, being the successor of the National Housing Authority under
Presidential Decree No. 957?chanrobles lawlibrary : rednad
The undisputed facts of the case are as follows:chanrob1es virtual 1aw library
On May 23, 1988, petitioner filed a complaint before Branch XXXII of the Regional Trial Court of Manila for
collection of the amount due under a promissory note executed by herein respondents representing the unpaid
balance of the purchase price of a lot bought by the latter from the former.
Respondents refused to pay the balance of the purchase price of the subdivision lot due to petitioners
abandonment of its undertaking to fully develop the Antipolo Hills Subdivision. This was the same reason which
prompted the other buyers of the subdivision units to group themselves and form the Antipolo Hills Homeowners
Association, Inc., of which herein respondents are members, in order that they may better be heard by petitioner.
The Association filed a complaint against petitioner before the Housing and Land Use Regulatory Board (HLURB),
pursuant to its exclusive jurisdiction as provided under P.D. 957, for non-development of the Antipolo Hills
Subdivision.
In its Very Urgent Omnibus Motion before the HLURB, the Association prayed that petitioner be restrained from
collecting the monthly amortization of the homeowners, to take over the development of the Antipolo Hills
Subdivision and to allow respondents to directly make their payment of monthly amortizations with the HLURB.
The HLURB rendered its Order, 1 stating:jgc:chanrobles.com.ph

"In view of the above provision complainants members may suspend payments of their monthly amortizations
after giving due notice to the owner or developers of said subdivision."cralaw virtua1aw library
The Housing and Land Use Arbiter likewise rendered its decision, 2 the dispositive portion of which
reads:jgc:chanrobles.com.ph
"WHEREFORE, PREMISES CONSIDERED, judgment is hereby rendered ordering respondent upon finality hereof, to
report and coordinate with the Land Use Planning Office and the Development Monitoring Office of this Board for
the purpose of complying with the directives hereinbelow enumerated:chanrob1es virtual 1aw library
1. To provide sufficient water supply and fire hydrants in the subdivision in accordance with the approved
development plan;
2. To construct, repair and maintain said subdivisions drainage in accordance with the approved plan;
3. To make strong representations with the MERALCO for the early completion of the electrical facilities as
respondent has paid the total amount of P404,525.00 as of June 2, 1988, for Phase II and to desist from collecting
the expenses incurred therefore from complainant;
4. To repair and maintain the damaged streets as shown in the ocular inspection reports on March 5, 1988 and
April 29, 1987;
The above directives shall be completed within a period of six (6) months from finality of this decision.
Further, respondent is hereby ordered to pay the Board within fifteen (15) days from finality hereof the amount of
P5,000.00 as administrative fine for violation of Section 20 in relation to Section 38 of P.D. 957.chanrobles virtual
lawlibrary
Copies of this decision shall be furnished the Development Monitoring Office and the Land Use Planning office of
this Board for monitoring.
IT IS SO ORDERED." 3
Petitioners then appealed the Arbiters decision to the Housing and Land Use Regulatory Board. The HLURB on July
25, 1989 rendered its decision, 4 sustaining the Arbiters earlier decision.
On the other hand, the complaint of petitioner against respondents before the civil court for collection of the
amount due under their promissory notes was decided on September 26, 1988, in favor of the petitioner, the
dispositive portion of which reads:jgc:chanrobles.com.ph
"ACCORDINGLY, judgment is hereby rendered in favor of plaintiff and against defendants, ordering defendants,
jointly and severally, to pay plaintiff:chanrob1es virtual 1aw library
(1) P39,440 plus 26% interest per annum from May 8, 1985 until the whole amount is fully paid;
(2) P2,000 as attorneys fees; and
(3) to pay the costs.
SO ORDERED." 5
Their motion for reconsideration having been denied, respondents elevated the case to the Court of Appeals,
which rendered a decision 6 in their favor, the dispositive portion of which reads:jgc:chanrobles.com.ph
"WHEREFORE, in view of the foregoing considerations, the default judgment appealed from is therefore REVERSED
and set aside and another one is hereby rendered granting the appeal, by DISMISSING the case for lack of
jurisdiction, with costs against the Plaintiff-Appellee.
SO ORDERED."cralaw virtua1aw library

Hence, the present petition, which We find unmeritorious.

Section 1 of Presidential Decree No. 1344 gives the National Housing Authority (NHA) the exclusive jurisdiction to
hear and decide certain cases as follows:chanrobles.com.ph : virtual law library
"SECTION 1. In the exercise of its function to regulate the real estate trade and business and in addition to its
powers provided for in Presidential Decree No. 957, the National Housing Authority shall have exclusive
jurisdiction to hear and decide cases of the following nature:chanrob1es virtual 1aw library
A. Unsound real estate business practices:chanrob1es virtual 1aw library
B. Claims involving refund and any other claims filed by subdivision lot or condominium unit buyer against the
project owner, developer, dealer, broker or salesman; and
C. Cases involving specific performance of contractual and statutory obligations filed by buyers of subdivision lot
or condominium unit against the owner, developer, dealer, broker or salesman."cralaw virtua1aw library
In a similar case entitled, Estate Developers and Investors Corporation v. Antonio Sarte, Et Al., 7 the Court
affirmed the exclusive jurisdiction of the NHA to hear and decide cases falling within Section 1 of P.D. No. 1344.
Said the Court:jgc:chanrobles.com.ph
"The language of this section, particularly, the second portion thereof, leaves no room for doubt that exclusive
jurisdiction over the case between the petitioner and private respondent is vested not on the RTC but on the NHA.
The NHA was re-named Human Settlements Regulatory Commission and thereafter it was re-named as the
Housing and Land Use Regulatory Board (HLURB). 8
This was reinforced by Section 8 of Executive Order 648, 9 otherwise known as the Charter of the Human
Settlements Regulatory Commission, which states:jgc:chanrobles.com.ph
"SECTION 8. Transfer of Functions. The regulatory functions of the National Housing Authority pursuant to
Presidential Decrees Nos. 957, 1216, 1344 and other related laws are hereby transferred to the Human
Settlements Regulatory Commission. . . . Among the regulatory functions are . . . (1) Hear and decide cases of
unsound real estate business practices, claims involving refund filed against protect owners, developers, dealers,
brokers, or salesmen and cases of specific performance."cralaw virtua1aw library
Petitioners reliance on Section 19 paragraph 8 of the Judiciary Reorganization Act of 1980 is misplaced. Section
19 paragraph 6 of the same law is material to the issue of where jurisdiction lies:jgc:chanrobles.com.ph
"Section 19. Regional trial courts shall exercise exclusive original jurisdiction.
"(6) In all other cases not within the exclusive jurisdiction of any court, tribunal, persons or body exercising judicial
or quasi-judicial functions." (Emphasis supplied)
The constitutionality of such grant of exclusive jurisdiction to the National Housing Authority (now HLURB) over
cases involving the sale of commercial subdivisions was upheld in Tropical Homes, Inc. v. National Housing
Authority, 10 and again sustained in a later decision in Antipolo Realty Corporation v. National Housing Authority.
11
A close scrutiny of the complaint discloses that the promissory note upon which the collection suit is predicated,
merely schedules the amortization of the balance or unpaid portion of the purchase price of the house and lot.
What appellant is collecting involves the "sales of lots in commercial subdivisions," which per the Tropical Homes
case jurisdiction lies with the HLURB, and not with the civil courts.
As We have said in Estate Developers and Investors Corporation v. Sarte, Et. Al.:chanrobles law library
"We cannot uphold the contention of the petitioner that the NHA (now HLURB) has jurisdiction under PD 1344 over
complaints filed by a subdivision buyer against the project owner or developer but not over claims filed by a
developer against the lot buyer for the purchase price of the lot sold by the latter. While PD 957 was designed to
meet the need basically to protect lot buyers from the fraudulent manipulations of unscrupulous subdivision
owners, sellers and operators (See Whereas clauses) the exclusive jurisdiction vested in the NHA is broad and

general to regulate the real estate trade and business in accordance with the provisions of said law. As
clarified in PD 1344, such exclusive jurisdiction includes jurisdiction to hear and decide cases involving unsound
real estate business practices (Sec. 1 [A]) as well as claims for refund and complaints for specific performance
filed by the buyer (paragraphs B&C)." 12
WHEREFORE, finding no reversible error in the decision appealed herefrom, the same is hereby AFFIRMED in
toto.chanrobles virtual lawlibrary

G.R. No. 117051

January 22, 1996

FRANCEL REALTY CORPORATION, petitioner,

vs.
COURT OF APPEALS and FRANCISCO T. SYCIP, respondents.
DECISION
MENDOZA, J.:
Petitioner Francel Realty Corporation filed a complaint for unlawful detainer against private respondent Francisco T. Sycip.
The case was filed in the Municipal Trial Court (MTC) of Bacoor, Cavite.
In its complaint, petitioner alleged that it had executed a Contract to Sell to private respondent Lot 16, Building No. 14 of the
Francel Townhomes, at 22 Real Street, Maliksi, Bacoor, Cavite, for P451,000.00. The Contract to Sell provides inter alia that
in case of default in the payment of two or more installments, the whole obligation will become due and demandable and the
seller will then be entitled to rescind the contract and take possession of the property; the buyer will vacate the premises
without the necessity of any court action and the downpayment will be treated as earnest money or as rental for the use of
the premises. Petitioner alleged that private respondent failed to pay the monthly amortization of P9,303.00 since October
30, 1990 despite demands to update his payments and to vacate the premises, the latest of which was the demand made in
the letter dated September 26, 1992, and that because of private respondent's unjust refusal to vacate, petitioner was
constrained to engage the services of counsel. Petitioner prayed that private respondent be ordered to vacate the premises
and pay a monthly rental of P9,303.00 beginning October 30, 1990 until he shall have vacated the premises, and
P25,000.00 as attorney's fees plus appearance fee of P1,000.00 per hearing and expenses of litigation.
On November 9, 1992, private respondent moved to dismiss the complaint but his motion was denied by the MTC. On
January 20, 1993 he filed his answer,1 in which he alleged that he had stopped paying the monthly amortizations because
the townhouse unit sold to him by petitioner was of defective construction. He alleged that he had in fact filed a complaint
for "unsound real estate business practice" in the Housing and Land Use Regulatory Board (HLURB Case No. REM-079004-80) against petitioner. Private respondent prayed that petitioner be ordered to pay P500,000.00 as moral damages,
P500,000.00 as exemplary damages, P75,000.00 as attorney's fees and that he be given "all other remedies just and
equitable."
In its resolution dated February 24, 1993, the MTC ruled that the answer was filed out of time on the ground that it was filed
more than ten days after the service of summons. 2 On March 17, 1993, however, it dismissed the complaint for lack of
jurisdiction. The MTC held that the case was cognizable by the HLURB. But it also ordered petitioner to pay private
respondent P10,000.00 as moral damages, P10,000.00 as exemplary damages, P3,000.00 as attorney's fees, and to pay
costs.
On appeal the Regional Trial Court affirmed the decision of the MTC. It held that the case was exclusively cognizable by the
HLURB which had jurisdiction not only over complaints of buyers against subdivision developers but also over actions filed
by developers for the unpaid price of the lots or units.
Petitioner filed a petition for review in the Court of Appeals, alleging that:
(a) The amounts of damages prayed for by the private respondent in his Answer are enormous and way beyond the
jurisdiction of the inferior court; and

(b) Since the inferior court and the respondent court ruled that it has no jurisdiction over this case, then it has no
reason, much more jurisdiction to award damages in excess of the P20,000.00 jurisdiction of the inferior court. 3
The appellate court dismissed the petition, holding that the MTC had jurisdiction over cases of forcible entry and unlawful
detainer, regardless of the amount of damages on unpaid rentals sought to be recovered in view of 1A(1) of the Revised
Rule on Summary Procedure.4
Petitioner moved for reconsideration. It contended that since the MTC had ruled that it had no jurisdiction over this case,
then it had no jurisdiction either to grant the counterclaim for damages in the total sum of P23,000.00. Its motion was,
however, denied for lack of any "cogent reason" to reverse the appellate court's resolution of June 15, 1994. 5
Hence this petition for review on certiorari.
It is important to first determine whether the MTC has jurisdiction over petitioner's complaint. For if it has no jurisdiction, then
the award of damages made by it in its decision is indeed without any basis. It is only if the MTC has jurisdiction of the
subject matter of the action that it is necessary to determine the correctness of the award of damages, including attorney's
fees.
Petitioner's complaint is for unlawful detainer. While generally speaking such action falls within the original and exclusive
jurisdiction of the MTC, the determination of the ground for ejectment requires a consideration of the rights of a buyer on
installment basis of real property. Indeed private respondent claims that he has a right under P.D. No. 957, 23 to stop
paying monthly amortizations after giving due notice to the owner or developer of his decision to do so because of
petitioner's alleged failure to develop the subdivision or condominium project according to the approved plans and within the
time for complying with the same. The case thus involves a determination of the rights and obligations of parties in a sale of
real estate under P.D. No. 957, Private respondent has in fact filed a complaint against petitioner for unsound real estate
business practice with the HLURB.
This is, therefore, not a simple case for unlawful detainer arising from the failure of the lessee to pay the rents, comply with
the conditions of a lease agreement or vacate the premises after the expiration of the lease. Since the determinative
question is exclusively cognizable by the HLURB, the question of the right of petitioner must be determined by the agency.
Petitioner's cause of action against private respondent should instead be filed as a counterclaim in HLURB Case No. REM07-9004-80 in accordance with Rule 6, 6 of the Rules of Court which is of suppletory application to the 1987 HLURB Rules
of Procedure per 3 of the same. In the case of Estate Developers and Investors Corporation v. Antonio Sarte and Erlinda
Sarte6 the developer filed a complaint to collect the balance of the price of a lot bought on installment basis, but its
complaint was dismissed by the Regional Trial Court for lack of jurisdiction. It appealed the order to this Court. In dismissing
the appeal, we held:
The action here is not a simple action to collect on a promissory note; it is a complaint to collect amortization
payments arising from or in connection with a sale of a subdivision lot under PD Nos. 957 and 1344, and
accordingly falls within the exclusive original jurisdiction of the HLURB to regulate the real estate trade and industry,
and to hear and decide cases of unsound real estate business practices. Although the case involving Antonio Sarte
is still pending resolution before the HLURB Arbiter, and there is as yet no order from the HLURB authorizing
suspension of payments on account of the failure of plaintiff developer to make good its warranties, there is no
question to our mind that the matter of collecting amortizations for the sale of the subdivision lot is necessarily tied
up to the complaint against the plaintiff and it affects the rights and correlative duties of the buyer of a subdivision lot
as regulated by NHA pursuant to PD 957 as amended. It must accordingly fall within the exclusive original
jurisdiction of the said Board, and We find that the motion to dismiss was properly granted on the ground that the
regular court has no jurisdiction to take cognizance of the complaint.
Accordingly, we hold that the MTC correctly held itself to be without jurisdiction over petitioner's complaint. But it was error
for the MTC to grant private respondent's counterclaim for damages for expenses incurred and inconveniences allegedly
suffered by him as a result of the filing of the ejectment case. 7
Pursuant to Rule 6, 8 a party may file a counterclaim only if the court has jurisdiction to entertain the claim. Otherwise the
counterclaim cannot be filed.8

Even assuming that the MTC had jurisdiction, however the award of damages to private respondent must be disallowed for
the following reasons:
(1) The MTC decision itself stated that the answer with its counterclaim was filed out of time or more than 10 days from
private respondent's receipt of summons. In effect, therefore, private respondent did not make any counterclaim.
(2) Moreover, a reading of the MTC decision showed no justification for the award of moral and exemplary damages and
attorney's fees. As held in Buan v. Camaganacan,9 an award of attorney's fees without justification is a "conclusion without a
premise, its basis being improperly left to speculation and conjecture." It should accordingly be stricken out. With respect to
the award of moral and exemplary damages, the record is bereft of any proof that petitioner acted maliciously or in bad faith
in filing the present action which would warrant such an award.10
WHEREFORE, the decision of the Court of Appeals is REVERSED and the complaint against private respondent is
DISMISSED. The private respondent's counterclaim is likewise DISMISSED.
SO ORDERED.