CASE DIGEST: PBCom vs. Pridisons
G.R. No. 155113, January 9, 2013
PHILIPPINE BANK OF COMMUNICATIONS, Petitioner, v. PRIDISONS REALTY CORPORATION, ANTONIO GONZALES, BORMACHECO, INC., NAZARIO F. SANTOS, TERESITA CHUA TEK, CHARITO ONG LEE, and ERNESTO SIBAL, Respondents.
BRION, J.:
FACTS:
Respondent Pridisons Realty Corporation (Pridisons) is the owner of a parcel of land. Pridisons executed in favor of PBComm a deed of real estate mortgage over the land and the improvements existing or to be erected thereon to secure the loan it acquired from the bank. The deed of real estate mortgage was registered and annotated on Pridisons title on the same day it was executed. Pridisons thereafter transferred all its rights over the land to its sister company, Ivory Crest Realty and Development Corporation (Ivory Crest).
Ivory Crest then applied for permits and licenses to construct and sell condominium units on the land with the Housing and Land Use Regulatory Board (HLURB). The HLURB issued the certificate of registration and the license to sell. Among the buyers of the condominium units were respondents Bormacheco, Inc., Nazario F. Santos, Teresita Chua Tek, Charito Ong Lee, and Ernesto Sibal (collectively referred to as respondent buyers). When Pridisons defaulted in paying its loan obligations, PBCommextrajudicially foreclosed the mortgage. The public auction of the land, however, was forestalled by a preliminary injunction issued by the HLURB in conjunction with the action for specific performance with damages instituted by Bormacheco, Inc. against Pridisons and/or Ivory Crest and PBComm.
ISSUES:
A. Whether or not HLURB has jurisdiction over mortgagee banks in cases involving a condominium or subdivision project.
B. Whether or not the mortgage executed in favor of PBComm is valid.
HELD: The petition lacks merit.
CIVIL LAW: Condominium and Subdivision
First Issue:
Jurisprudence consistently recognizes the rationale behind the enactment of PD No. 957 (The Subdivision and Condominium Buyers' Protective Decree) to protect innocent lot buyers from scheming developers. For this reason, the Court has broadly construed the jurisdiction of the HLURB to include complaints for annulment of mortgages of condominium or subdivision units.
The Court thus upholds the HLURBs jurisdiction over the action to annul the mortgage constituted in favor of PBComm.
Second Issue:
The Court, in general, agrees with PBComms allegation that Section 18 of PD No. 957 applies to mortgages constituted over existingcondominium or subdivision projects, while Section 4 of the same law applies to mortgages of raw lands that are to be developed as condominium or subdivision projects. However, the Court believes that the surrounding circumstances show that PBComm was aware of the proposed conversion of the land into a condominium project, thus, meriting the application of Section 18 of PD No. 957 to the case. Prior execution of the mortgage alone does not discount the possibility that PBComm may have had foreknowledge and possible complicity in the development plans of the condominium project; the factual findings of HLURB, as affirmed by both the OP and the CA, indicate that this was indeed the case.
Petition id DENIED. The decision of CA is affirmed.
PHILIPPINE BANK OF COMMUNICATIONS, Petitioner, v. PRIDISONS REALTY CORPORATION, ANTONIO GONZALES, BORMACHECO, INC., NAZARIO F. SANTOS, TERESITA CHUA TEK, CHARITO ONG LEE, and ERNESTO SIBAL, Respondents.
BRION, J.:
FACTS:
Respondent Pridisons Realty Corporation (Pridisons) is the owner of a parcel of land. Pridisons executed in favor of PBComm a deed of real estate mortgage over the land and the improvements existing or to be erected thereon to secure the loan it acquired from the bank. The deed of real estate mortgage was registered and annotated on Pridisons title on the same day it was executed. Pridisons thereafter transferred all its rights over the land to its sister company, Ivory Crest Realty and Development Corporation (Ivory Crest).
Ivory Crest then applied for permits and licenses to construct and sell condominium units on the land with the Housing and Land Use Regulatory Board (HLURB). The HLURB issued the certificate of registration and the license to sell. Among the buyers of the condominium units were respondents Bormacheco, Inc., Nazario F. Santos, Teresita Chua Tek, Charito Ong Lee, and Ernesto Sibal (collectively referred to as respondent buyers). When Pridisons defaulted in paying its loan obligations, PBCommextrajudicially foreclosed the mortgage. The public auction of the land, however, was forestalled by a preliminary injunction issued by the HLURB in conjunction with the action for specific performance with damages instituted by Bormacheco, Inc. against Pridisons and/or Ivory Crest and PBComm.
ISSUES:
A. Whether or not HLURB has jurisdiction over mortgagee banks in cases involving a condominium or subdivision project.
B. Whether or not the mortgage executed in favor of PBComm is valid.
HELD: The petition lacks merit.
CIVIL LAW: Condominium and Subdivision
First Issue:
Jurisprudence consistently recognizes the rationale behind the enactment of PD No. 957 (The Subdivision and Condominium Buyers' Protective Decree) to protect innocent lot buyers from scheming developers. For this reason, the Court has broadly construed the jurisdiction of the HLURB to include complaints for annulment of mortgages of condominium or subdivision units.
The Court thus upholds the HLURBs jurisdiction over the action to annul the mortgage constituted in favor of PBComm.
Second Issue:
The Court, in general, agrees with PBComms allegation that Section 18 of PD No. 957 applies to mortgages constituted over existingcondominium or subdivision projects, while Section 4 of the same law applies to mortgages of raw lands that are to be developed as condominium or subdivision projects. However, the Court believes that the surrounding circumstances show that PBComm was aware of the proposed conversion of the land into a condominium project, thus, meriting the application of Section 18 of PD No. 957 to the case. Prior execution of the mortgage alone does not discount the possibility that PBComm may have had foreknowledge and possible complicity in the development plans of the condominium project; the factual findings of HLURB, as affirmed by both the OP and the CA, indicate that this was indeed the case.
Petition id DENIED. The decision of CA is affirmed.
