G.R. No. 125447




Republic of the Philippines SUPREME COURT Manila FIRST DIVISION G.R. No. 125447 August 14, 1998 MARINA PROPERTIES CORPORATION, petitioner, vs. COURT OF APPEALS and H.L. CARLOS CONSTRUCTION, INC., respondents. G.R. No. 125475 August 14, 1998 H.L. CARLOS CONSTRUCTION, INC., petitioner, vs. COURT OF APPEALS and MARINA PROPERTIES CORPORATION, respondents. DAVIDE, JR., J.: We resolve here two (2) separate appeals from the decision1 of the Court of Appeals of 27 June 1996 in CA-G.R. SP No. 37927, which affirmed with modification the 15 March 1995 Order2 of the Office of the President in O.P. Case No. 5462 which, in turn, affirmed in toto the 14 June 1993 decisions 3 of the Housing and Land Use Regulatory Board (HLURB) in the case filed by H.L. Carlos Construction, Inc. (hereafter H.L. CARLOS) against MARINA Properties Corporation (hereafter MARINA) for Specific Performance with Damages and docketed as REM-A-1179.4 The factual antecedents, as summarized by the Court of Appeals, are as follows: Petitioner Marina Properties Corporation (MARINA for short) is a domestic corporation engaged in the business of real estate development. Among its projects is a condominium complex project, known as the "MARINA BAYHOMES CONDOMINIUM PROJECT" consisting of 10 building clusters with 31 housing units to be built on a parcel of land at Asiaworld City, Coastal Road in Parañaque, Metro Manila. The area is covered by T.C.T. No. (121211) 42201 of the Registry of Deeds of the same municipality. The construction of the project commenced sometime in 1988, with respondent H.L. Carlos Construction, Inc. (H.L. CARLOS for brevity) as the principal contractor, particularly of Phase III. As an incentive to complete the construction of Phase III, MARINA allowed H.L. CARLOS to purchase a condominium unit therein known as Unit B-121. Thus, on October 9, 1988, the parties entered into a Contract to Purchase and to Sell covering Unit B-121 for P3,614,000.00. H.L. CARLOS paid P1,034,200.00 as downpayment, P50,000.00 as cash deposit and P67,024.22 equivalent to 13 monthly amortizations. After paying P1,810,330.70, which was more than half of the contract price, H.L. CARLOS demanded for the delivery of the unit, but MARINA refused. This prompted H.L. CARLOS to file with the Regional Trial Court of Makati, Branch 61 a complaint for damages against MARINA, docketed as Civil Case No. 89-5870. Meanwhile, on April 20, 1990, MARINA wrote H.L. CARLOS that it was exercising its option under their Contract to Purchase and to Sell to take over the completion of the project due to its (H.L. CARLOS') abandonment of the construction of the Phase III project. In a letter dated March 15, 1991, H.L. CARLOS inquired from MARINA about the "turn-over status" of the condominium unit. MARINA replied that it was cancelling the Contract to Purchase and Sell due to H.L. CARLOS' abandonment of the construction of the Phase III Project and its filing of baseless and harassment suits against MARINA and its officers. Forthwith, H.L. CARLOS filed the instant complaint for specific performance with damages against MARINA with the Housing and Land Use Regulatory Board (HLURB), alleging among others, that it has substantially complied with the terms and conditions of the Contract to Purchase and Sell, having paid more than 50% of the contract price of the condominium unit; and that MARINA's act of cancelling the contract was done with malice and bad faith. H.L. CARLOS prays that MARINA be ordered to deliver to it the subject unit, accept the monthly amortizations on the remaining balance, execute the final deed of sale and deliver the title of the unit upon full payment of the contract price. Also, H.L. CARLOS prays for the award of actual and exemplary damages as well as attorney's fees. In its answer, MARINA claimed that its cancellation of the Contract to Purchase and Sell is justified since H.L. CARLOS has failed to pay its monthly installment since October 1989 or for a period of almost two (2) years; that H.L. CARLOS abandoned its work on the project as of December 1989; and that the instant case should have been suspended in view of the pendency of Civil Case No. 89-5870 for damages in the Makati RTC involving the same issues. On February 21, 1992, the HLURB, through Atty. Abraham N. Vermudez, Arbiter, rendered a decision; the dispositive portion of which reads: WHEREFORE, PREMISES CONSIDERED, judgment is hereby rendered declaring the cancellation of the subject Contract to Sell as null and void and ordering respondent Marina Properties Corporation as follows: 1. To turn over the subject condominium unit to herein complainant, accept monthly amortization[s] on the remaining balance and to execute the final deed of sale and deliver title/ownership of the subject property to the complainant upon full payment of the contract price. 2. To pay complainant actual damages of P30,000.00 per month commencing from March 1990 until the delivery of the subject property and the amount of P50,000.00 as exemplary damages. 3. To pay complainant the amount of P50,000.00 as and by way of attorney's fees. 4. To pay to this Board the amount of P5,000.00 as [an] administrative fine. IT IS SO ORDERED. In ruling for H.L. CARLOS, the HLURB Arbiter held: x x x x x x x x x Respondent's position that the case is a complex one is more imaginary than real. Clearly, the cancellation of the subject "Contract to Purchase and to Sell" was in violation of Republic Act No. 6552, otherwise known as the "Realty Installment Buyers Protection Act," which prescribes the procedure for cancellation of installment contracts for the purchase of subdivision lots and/or condominium units. In the case at bar, the complainant had already paid P1,810,330.70 or more than 50% of the contract price of P3,614,000.00 and more than the total of two years (24 months) installments computed at the monthly installment of P67,024.22, inclusive of the downpayment, which is more than 24 installments. Under RA. 6552, notarial cancellation of the installment contract becomes effective only upon payment of the cash surrender value to the purchaser, which however respondent did not do. Respondent's cancellation of the subject contract was clearly illegal, void and cannot be sanctioned. Neither can this Office find merit in respondent's contention that this case should be suspended because of the pending civil case between the parties, said pending case, Civil Case No. 89-5870 in the Regional Trial Court, Branch 61, Makati, Metro Manila, was filed by the same complainant herein against the same respondent for collection of unpaid billings in the amount of about P10,000,000.00. On the other hand, this Office finds that respondent's act in cancelling the subject installment sales contract without following the provisions of R.A. 6552 is an unsound real estate business practice for which respondent is fined the sum of P5,000.00. As to damages and attorney's fees claimed by complainant and borne out by the records, this Office finds that respondent should be held liable for unearned rental income of P30,000.00 per month, commencing from March 1990 when the condominium unit should have been delivered until actual delivery thereof, and attorney's fees of P50,000.00, both amounts to be deducted from the unpaid balance due on the subject condominium unit. Likewise, for its wanton breach of the subject contract, respondent is ordered to pay exemplary damages in the amount of P50,000.00 as an example for the public good, deductible from the balance due on the subject condominium unit. x x x x x x x x x Whereupon, MARINA interposed an appeal to the Board of Commissioners of HLURB (First Division) which affirmed the assailed decision. On further appeal to the Office of the President, the decision of the Board of Commissioners (First Division) was affirmed. MARINA filed a motion for reconsideration but was denied. 5 MARINA filed a petition for review with the Court of Appeals ascribing the following errors to the Office of the President: (1) In sustaining the award of actual damages for unrealized profits in favor of private respondent H.L. CARLOS which were unliquidated, speculative and patently unreasonable; (2) In declaring the motion for reconsideration filed by MARINA "pro-forma" and depriving it of the right of appeal; and (3) In not dismissing the case on the grounds of litis pendentia, forum-shopping and splitting a single cause of action. 6 The Court of Appeals sustained MARINA as regards the award of actual damages, finding that no evidence was presented to prove the P30,000.00 award as monthly rental for the condominium unit. However, as to the pronouncement of the Office of the President that MARINA's motion for reconsideration was merely pro-forma, the Court of Appeals noted that MARINA did not raise any new issue in its motion for reconsideration. In the same vein, respondent court ruled that MARINA was not deprived of its right to appeal. The Court of Appeals likewise brushed aside MARINA's assertion that the complaint should have been dismissed on the ground of litis pendentia thus: The requisites of lis pendens as a ground for dismissal of a complaint are: (1) identity of parties or at least such representing the same interest in both actions; (2) identity of rights asserted as prayed for, the reliefs being founded on the same facts; and (3) identity in both cases is such that the judgment that may be rendered in the pending case, regardless of which party is successful, would amount to res judicata to the other case. There is no dispute that the case at bench and Civil Case No. 89-5870 for damages at the Makati RTC involves the same parties although in the civil case, the officers of MARINA have been impleaded as co-defendants. While the first requisite obtains in this case, the last two are conspicuously absent. It will be observed that the two cases involve distinct and separate causes of action or rights asserted. Civil Case No. 89-5870 is for the collection of sums of money corresponding to unpaid billings and labor costs incurred by H.L. CARLOS in the construction of the project under the Construction Contract agreed upon by the parties. Upon the other hand, the case at bench is for specific performance (delivery of the condominium unit) and damages arising from the unilateral cancellation of the Contract to Purchase and to Sell by MARINA. Moreover, the reliefs sought are also different. In the civil case, H.L. CARLOS prays for the award of P7,065,885.03 representing unpaid labor costs, change orders and price escalations including the sum of P2,000,000.00 as additional compensatory damages. In the instant case, H.L. CARLOS seeks not only the awa[r]d of actual and exemplary damages but also the delivery of the condominium unit upon MARINA's acceptance of the monthly amortization on the remaining balance, the execution of a final deed of sale and the delivery of the title to the said private respondent. MARINA's claim that the present complaint should be dismissed on the ground of splitting a cause of action, deserves scant consideration. The two complaints did not arise from a single cause of action but from two separate causes of action. It bears emphasis that H.L. CARLOS' cause of action in the civil case stemmed from the breach by MARINA of its contractual obligation under the Construction Contract, while in the case at bench, H.L. CARLOS' cause of action is premised on the unilateral cancellation of the Contract to Purchase and Sell by MARINA. 7 Accordingly, the Court of Appeals affirmed the Order of the Office of the President but deleted the award of actual damages. As such, the parties sought redress from this Court by way of separate petitions. In G.R. No. 125447, MARINA asserts that the Court of Appeals erred: (1) in finding that petitioner should turn over the subject condominium unit to H.L. CARLOS and accept monthly amortizations on the remaining balance; and (2) in not ordering the dismissal of the case on the grounds of litis pendentia, forum-shopping and splitting of a single cause of action. On the other hand, in G.R. No. 125475, H.L. CARLOS contends that the Court of Appeals gravely erred in: (1) finding that the award of actual damages equivalent to P30,000.00 in unearned monthly rentals was not sustained by evidence; (2) in not declaring that the petition for review was filed out of time and fatally defective for lack of verification and certification by MARINA Properties, and in not declaring the decision of the Office of the President final and executory; and (3) in not dismissing MARINA's appeal as without merit. MARINA's motion to consolidate both cases was granted in a resolution dated 27 January 1997. 8 We first address the lone procedural issue of the timeliness of the petition for review filed by MARINA with the Court of Appeals and the supposed lack of verification and certification. We find without merit the allegation that MARINA's petition for review before the Court of Appeals was filed out of time as MARINA's motion for reconsideration (of the order of the Office of the President) was found to be pro forma and, therefore, did not stop the running of its period to appeal. MARINA filed its Motion for Reconsideration9 on the last day of its period to appeal, specifically, on 3 May 1995. However, the motion was found by the Office of the President to be pro forma as "the issues of litis pendentia, forum-shopping and splitting of a cause of action as well as the issue of unliquidated, speculative and unreasonable damages raised therein were basically the same issues raised and discussed extensively in the Appeal Memorandum and which were already weighed, discussed and considered by this Office in its Order dated March 15, 1995." 10 As a consequence, the Office of the President declared its decision final and executory. Under our rules of procedure, a party adversely affected by a decision of a trial court may move for reconsideration thereof on the following grounds: (a) the damages awarded are excessive; (b) the evidence is insufficient to justify the decision; or (c) the decision is contrary to law. 11 A motion for reconsideration interrupts the running of the period to appeal, unless the motion is pro forma, 12 This is now expressly set forth in the last paragraph of Section 2, Rule 37, 1997 Rules of Civil Procedure. A motion for reconsideration based on the foregoing grounds is deemed pro forma if the same does not specify the findings or conclusions in the judgment which are not supported by the evidence or contrary to law, making express reference to the pertinent evidence or legal provisions. 13 It is settled that although a motion for reconsideration may merely reiterate issues already passed upon by the court, that by itself does not make it pro forma and is immaterial because what is essential is compliance with the requisites of the Rules. 14 Thus, in Guerra Enterprises, Co. Inc. v. CFI of Lanao del Sur, 15 we ruled: Among the ends to which a motion for reconsideration is addressed, one is precisely to convince the court that its ruling is erroneous and improper, contrary to the law or the evidence; and in doing so, the movant has to dwell of necessity upon the issues passed upon by the court. If a motion for reconsideration may not discuss these issues, the consequence would be that after a decision is rendered, the losing party would be confined to filing only motions for reopening and new trial. We find in the Rules of Court no warrant for ruling to that effect, a ruling that would, in effect eliminate subsection (c) of Section 1 of Rule 37. On this note, it has also been fittingly observed that: Where the circumstances of a case do not show an intent on the part of the pleader to merely delay the proceedings, and his motion reveals a bona fide effort to present additional matters or to reiterate his arguments in a different light, the courts should be slow to declare the same outright as pro forma. The doctrine relating to pro forma motions has a direct bearing upon the movant's valuable right to appeal. It would be in the interest of justice to accord the appellate court the opportunity to review the decision of the trial court on the merits than to abort the appeal by declaring the motion pro forma, such that the period to appeal was not interrupted and had consequently lapsed. 16 We are thus unable to hold that MARINA's motion for reconsideration was merely pro forma. Our review of the records reveals that said motion adequately pointed out the conclusions MARINA regarded as erroneous and contrary to law, and even referred to findings not supported by evidence as well as jurisprudence to sustain MARINA's claims. As to the justification proffered by the Office of the President that it had already passed upon the issues raised by MARINA in its motion, plainly, the authorities cited above readily refute such a position. It may be pointed out that under Supreme Court Circular No. 1-91 dated 27 February 1991 and Revised Administrative Circular No. 1-95 dated 16 May 1995, which took effect on 1 June 1995, an aggrieved party is allowed one motion for reconsideration of the assailed decision or final order before he may file a petition for review with the Court of Appeals. All told, MARINA's motion for reconsideration was but proper under the adjective rules extant in this jurisdiction. The charge of a lack of verification or certification in MARINA's petition before the Court of Appeals is baseless. Even the most cursory of reviews will disclose that such may be found on pages 30 and 31 of the Petition. 17 We agree with the conclusion of the Court of Appeals that the award of P30,000.00 as actual damages for unearned monthly rental income starting from March 1990 until the delivery of the property to H.L. CARLOS was arbitrary. Article 2199 of the Civil Code provides that one is entitled to adequate compensation only for such pecuniary loss suffered by him as is duly proved. 18 Actual damages, to be recoverable, must not only be capable of proof, but must actually be proved with a reasonable degree of certainty. 19 Courts cannot simply rely on speculation, conjecture or guesswork in determining the fact and amount of damages. 20 As the Court of Appeals correctly found here that no proof was submitted by H.L. CARLOS to substantiate the recovery of actual damages in the form of monthly rentals, the deletion of such award was but appropriate. The issue of forum shopping raised by MARINA deserves scant consideration. H.L. CARLOS was not guilty of forum shopping when it sued MARINA before the HLURB to enforce their Contract To Purchase and To Sell. Forum shopping is the act of a party against whom an adverse judgment has been rendered in one forum, of seeking another (and possibly favorable) opinion in another forum other than by appeal or the special civil action of certiorari, or the institution of two (2) or more actions or proceedings grounded on the same cause on the supposition that one or the other court might look with favor upon the party. 21 Contrary to MARINA's assertion, H.L. CARLOS' complaint was hardly a duplication of Civil Case No. 89-5870 which was filed to collect the sum of money corresponding to unpaid billings from their Construction Contract. The cause of action in the civil case was, therefore, totally distinct from the cause of action in the complaint before the HLURB. For this reason, neither could there have been splitting of a cause of action. Anent the absence of litis pendentia, the Court of Appeals' meticulous analysis of this issue leaves no room for improvement and we adopt it as our own. We likewise uphold the finding that MARINA's cancellation of the Contract To Buy and To Sell was clearly illegal. Prior to MARINA's unilateral act of rescission, H.L. CARLOS had already paid P1,810,330.70, or more than 50% of the contract price of P3,614,000.00. Moreover, the sum H.L. CARLOS had disbursed amounted to more than the total of 24 installments, i.e., two years' worth of installments computed at a monthly installment rate of P67,024.22, inclusive of the downpayment. As to the governing law, Section 24 of P.D. 957 22 provides: Sec. 24 Failure to pay installments. — The rights of the buyer in the event of his failure to pay the installments due for reasons other than failure of the owner or developer to develop the project shall be governed by Republic Act. No. 6552. Then among the requirements of R.A. No. 6552, 23 in order to effect the cancellation of a contract, a notarial cancellation must first be had. 24 Therefore, absent this, MARINA's cancellation of its contract with H.L. CARLOS was void. In conclusion, cases 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 fall under the jurisdiction of the HLURB. 25 It is incumbent upon said administrative agency, in the exercise of its powers and functions, to interpret and apply contracts, determine the rights of the parties under these contracts, and award damages whenever appropriate. 26 WHEREFORE, the petitions in these consolidated cases, G.R. No. 125447 and G.R. No. 125475 are DENIED and the assailed decision of respondent Court of Appeals of 27 June 1996 is hereby AFFIRMED. Costs against petitioner in each case. SO ORDERED. Bellosillo, Vitug and Panganiban, JJ., concur. Quisumbing, J., took no part. Footnotes 1 Original Record (OR), CA-G.R. Sr No. 37927, 153-161; Annex "G" of Petition, Rollo, G.R. No. 125447, 80-89; Annex "A" of Petition, Rollo, G.R. No. 125475, 32-40. Per Sandoval-Gutierrez, A., J., with the concurrence of Buena, A. and Vasquez, C., JJ. 2 Id., 66-75. 3 OR, 62-65. 4 The Board's decision affirmed the 21 February 1992 decision of Housing and Land Use Arbiter Abraham N. Vermudez in REM-041591-4794. 5 OR, 153-157; Annex "G" of Petition, Rollo, G.R. No. 125447, 81-86; Annex "A" of Petition, Rollo, G.R. No. 125475, 32-37. 6 Id., 158. 7 OR, 159-160. 8 Rollo, G.R. No. 125475, 46, et seq. 9 O.R., CA-G.R. SP No. 37927, 76-90. 10 Id., 92. 11 Rule 37, Sec. 1(c) Rules of Court, now Rule 37, Sec. 1, final par., 1997 Rules of Civil Procedure. 12 Ravelo v. Court of Appeals, 207 SCRA 254, 261 [1992]. 13 Rule 37, Sec. 2, 3rd par., Rules of Court, now modified under Rule 37, Sec. 2, last two paragraphs, 1997 Rules of Civil Procedure. 14 Cruz v. Villaluz, 88 SCRA 506, 511 [1979]; People v. Rodriguez, 213 SCRA 171, 174 [1992]. 15 32 SCRA 314, 317 [1970]. See also Dineros v. Roque, 88 SCRA 540, 544 [1979]; Continental Cement Corporation v. Court of Appeals, 184 SCRA 728, 734 [1990]; Marikina Valley Development Corporation v. Flojo, 251 SCRA 87, 95 [1995]; 1 FLORENZ D. REGALADO, REMEDIAL LAW COMPENDIUM 379-380 (6th ed., 1997) (hereafter 1 REGALADO). 16 REGALADO, 380. 17 Rollo, CA-G.R. SP No. 37927, 30-31. 18 Scott Consultants & Resource Development Corporation, Inc. v. Court of Appeals, 242 SCRA 393, 405 [1995]. 19 Del Mundo v. Court of Appeals, 240 SCRA 348, 357 [1995]. 20 Fuentes, Jr. v. Court of Appeals, 253 SCRA 430, 438 [1996]. 21 Ortigas & Company Limited Partnership v. Velasco, 234 SCRA 455, 500 [1994]; See First Philippine International Bank v. Court of Appeals, 252 SCRA 259, 283 [1996]. 22 "The Subdivision and Condominium Buyers' Protective Decree." 23 "An Act to Provide Protection to Buyers of Real Estate on Installment Payments." 24 Realty Exchange v. Sendino, 233 SCRA 669, 677 [1994]. 25 Realty Exchange v. Sendino, 233 SCRA 665, 677 [1994], 673, quoting United Housing Corporation v. Hon. Dayrit, 181 SCRA 295 [1990]. 26 Id., 674. The Lawphil Project - Arellano Law Foundation