CHUA, Neil S. 1E HULST vs. PR Builders, Inc.

Summary

July 25, 2013

The conflict in these two cases is rooted on the event that Jacobus Bernhard Hulst (petitioner) and his spouse Ida, both Dutch nationals, entered into a Contract to Sell with PR Builders, Inc. (respondent) to purchase a residential unit in the respondents townhouse project in Batangas. After the respondents failure to complete the pro ject by June 1995 as verbally promised, spouses Hulst filed a complaint for rescission of contract with interest, damages and attorneys fees before the Housing and Land Use Regulatory Board (HLURB). The HLURB Arbiter ruled in favor of the petitioner, thereby ordering the return of the price paid for the residential unit, as well as actual, moral, and exemplary damages, and attorneys fees. A Writ of Execution was thereafter issued to execute the HLURB Arbiters judgment. The respondent filed a complaint with the CA on a Petition for Certiorari and Prohibition, thereby requiring the Sheriff to levy first on respondents personal properties. Nonetheless, this writ was not satisfied. An Alias Writ of Execution was later issued, with which the Sheriff levied on respondents parcels of land in Laurel, Batangas. Petitioner filed an Urgent Motion to Quash Writ of Levy with the HLURB prior to public auction, alleging that Sheriff levied properties with an aggregate appraised value over and above the judgment award. None withstanding the pendency of said motion, the Sheriff proceeded to auction all of the respondents levied lands for all of which Holly Properties Realty Corporation was the winning bidder. An Order to suspend the proceeding on the matter was only received after the public auction. The HLURB, in its decision on the matter, set aside the Ex Officio Sheriffs levy and ordering the same to levy the respondents real properties instead. The CA dismissed the Petition for Certiorari and Prohibition. The Supreme Court, before acting upon the main issue brought forth by the petitioner, found the matter to be of public and national importance, taking into consideration that Hulst, being an alien, is disqualified from acquiring public and private lands. Hence, the Contract to Sell from which the conflict stems from is unequivocally void. Generally, parties deemed in pari delicto are left alone by the court, but the petitioner in this case falls under the exception to the rule provided by Article 1414 of the Civil Code. It provides that one who repudiates the agreement and demands his money before the illegal act has taken place is entitled to recover. Thus petitioner is entitled to the recovery of the purchase price paid to respondent, but not entitled to damages based on the void contract. The Court, then acting upon the petitioners sole ground that the CA gravely erred in affirming the Arbiters order setting aside the levy made by the Sheriff on the subject properties, found the petition to be meritorious. Under Section 9, Rule 39 of the Revised Rules of Court, the sheriff is to sell only a sufficient portion of the levied property to satisfy judgment and lawful fees. Any excess in the proceeds shall be delivered to the judgment debtor unless otherwise directed. The sheriff, in performing a purely ministerial act, complied with all aforementioned requirements of auction sale.

Delving further into the merits of the assailed Order, the Court held that the cited jurisprudence of Barrozo v. Macarareg and Buan v. Court of Appeals, upon which the HLURB Arbiter and Director and CA relied, cannot apply to the current petition . Gross inadequacy of price does not nullify an execution made. Secondly, the Rules of Court do not require that the value of the levied property be exactly the same as the judgment debt. Third, the Sherriff is allowed a reasonable margin of error in determining the amount of property to be levied in order to satisfy judgment as it is impossible to know the precise quantity thereof. It also followed that the Sherriff had no authority to suspend auction sale, his duties being only ministerial in nature. Finally, the burden of proof rests upon the one who attacks a levy on the ground of excessiveness which the HLURB Arbiter and Director failed to provide legal basis therefor. The SC thereby ordered the petitioner to return to the respondent the amount in excess of the proceeds of the auction sale delivered to the petitioner. However in the second case, Hulst filed a Motion for Partial Reconsideration contending that the Contract to Sell entered into with the respondent fell within the purview of R.A. 4726 (the Condominium Act). Therein provided is that foreigners are allowed to acquire condominium units and shares in condominium corporations up to a maximum of 40% of total and outstanding capital stock. Impliedly, the law separates ownership of the land from ownership of the unit itself. Taking into consideration the petitioners legal basis, the Court modified its previous decision deleting the amount initially ordered to be returned to respondent in excess of proceeds of the auction sale delivered to petitioner. Observation The two cases of Hulst vs. PR Builders, Inc. involved a mix of various fields of law Constitution, sales, and procedural law. These two cases present concepts in each field of law; explain each concept not only in passing, but quite extensively all while integrating such concepts with a single matter. What was most noteworthy in these cases was the portion on the exercise of equity jurisdiction. Although normally prevented from further action by the inflexibility of its statutory or legal jurisdiction, the Court can still act upon any unusual instance where complete justice cannot be reached because of a positive provision of law. In this case, the Court exercise equity jurisdiction so that Hulst could not unjustly enrich himself at the expense of PR Builders, Inc. It also seems, judging from the events that transpired in this case, not every element of a conflict or case is always initially recognized or singled out by the Court. Petitioners (and their counsel) really must be aware of laws and/or jurisprudence that will make or break their cause. Comments Unlike other Justices who have a penchant for flowery words and lengthy (and at times, confusing) explanation of concepts of law, Justice Austria-Martinezs writing style is clear, simple and direct to the point. She clearly separated individual reasons or grounds for the Courts decision, making for a much faster and easier understanding of the case.