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Republic of the Philippines

Office of the President of the Philippines

HOUSING AND LAND USE REGULATORY BOARD
NORTHERN TAGALOG REGIONAL OFFICE
3rd Floor, Insular Life Building, Brgy. Dolores,
City of San Fernando, Pampanga

SPOUSES SERAFIN AGAM

and MARICAR AGAM,
Complainants,
- versus PHILSTAR

HLURB CASE NO. NTR-REM-091813-585

MARKETING

and

DEVELOPMENT, INC., SAN SIMON

REALTY DEVELOPMENT INC.,
Respondents.
x--------------------------------------------x

DECISION
This is a case for nullity of contract to sell and refund with damages.
Records of this case show that on March 19, 2012, Sps. Agam bought
on installment basis a house and lot described as Lot 27, Blk. 3, Phase 3 (Neo
Emerald) , Allessandra Model, located at La Trevi State, San Simon, Pampanga,
from the respondents San Simon Realty Development Inc. (San Simon for
brevity) and Philstar Marketing (Philstar for brevity) for a total purchase price of
1,558,000.00; that respondent Philstar was the one who executed and issue
the reservation application while respondent San Simon was the one who
signed, executed and delivered the contract to sell; that reservation fee
amounting to 20,000.00 was paid by the complainants; that on March 30,
2012, complainants paid 130,000.00 as partial payment; that the remaining
balance of 160,000.00 for the down payment was paid on installment basis of
13,466.67 from April 30, 2012- March 30, 2013; that upon payment of the
partial down payment, San Simon required complainants to sign and execute a
contract to sell; that the complainants consistently and persistently demanded
from the respondents to furnish them with a copy of the contract to sell and

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the same was released only on May 25, 2013; that prior to the execution of the
contract to sell, respondents thru their agent Rose Sicat enticed the
complainants and represented to them that there were three (3) options to
settle the remaining 80% of the contract price; that prior to the maturity of
their down payments, complainants started processing their loan applications
thru bank financing however, they discovered that Metrobank and RCBC cut
their ties with the respondents; that despite of this, complainants continue to
process their loan application and requested the respondents to provide them
with the required documents to wit: certified true copy of title, updated tax
declaration, tax receipts for 2013, certificate of registration and license to sell,
however, respondents did not bother to comply despite repeated verbal
demands; that on May 22, 2013, complainants inquire with HLURB and to
their dismay, they discovered that San Simon has no certificate of registration
and license to sell; that several letters were sent to respondents informing them
of their decision to discontinue their monthly payments and demanded from
them the immediate cancellation/rescission of the contract to sell and the full
refund of their hard earned money; that despite continuous and persistent oral
demands, respondents refused and still refuses to refund . Hence, this case.

On Nov. 13, 2013, respondent Philstar filed its answer which generally
admits most of complainants allegations and avers that the lack of certificate
of registration/ license to sell merely subjects the developer to administrative
sanctions but not to render the contract null and void.

Mandatory Conference was scheduled; however, it was re-set on July 31,

2014. An Order dated August 29, 2014 was issued for the parties to file their
position papers before this Board.

The issues in this case are whether or not the complainants are entitled
to remedies prayed for.

It has been held that the absence of a Certificate of Registration and

License to Sell, this is not a ground to nullify a validly entered contract. In the

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case of Spouses Howard T. Co Chien and Susan Y. Co Chien vs. Sta. Lucia
Realty & Development, Inc., and Alsons land Corporations 1 where the issue was
involved, the Supreme Court explained the rationale:

"A review of the relevant provisions of P.D. 957 reveals that while
the

law

penalizes

condominium units

the

selling

without

of

prior

subdivision

issuance

of a

lots

and

Certificate

of Registration and License to sell by the HLURB, it does not

provide that the absence thereof will automatically render a
validly entered contract, void. The penalty imposed by the decree is
the general penalty provided for the violation of any of its
provisions. It is well-settled in this jurisdiction that the clear
language of the law shall prevail. This principle particularly
enjoins strict compliance with provisions of law which are penal
in

nature,

or

when

a penalty

is provided

for the violation

thereof. With regard to P.D. 957, nothing therein provides for the
nullification of a contract to sell in the event that the seller, at
the time the contract was entered into, did not possess a
certificate of registration and license to sell. Absent any specific
sanction pertaining to the violation of the questioned provisions
(Sees. 4 and 5), the general penalties provided in the law shall
be

applied.

The general penalties

for the violation

of any

provisions in P.D. 957 are provided for in Sections 38 and 39. As

can clearly be seen in the aforequoted provisions, the same do not
include the nullification of contracts that are otherwise validly
entered."
With

respect

to certain

defects

pointed

to by the

complainants,

these appear to be merely request for some documents to wit: certified true
copy of title, updated tax declaration, tax receipts for 2013, certificate of
registration and license to sell. Although the requested

documents were

allegedly not heeded by the respondents, the same were not substantiated
1 G.R. No. 162090, January 31, 2007

by

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evidence. Nevertheless,

said defects are considered as slight or casual breach

in which the most appropriate remedy is to compel respondents to undertake

corrective

measures in the performance of their duty as a seller and not to

nullify the contract.

In the case of Ernesto R. Ang and Rosalinda Ang vs. The

Court of Appeals and Lee Chuy Realty Corps.2 the Supreme Court held that:

"xxx While it is true that

in reciprocal

obligations,

such as

the contract of purchase and sale in this case, the power to

rescind is implied and any of the contracting parties may, upon
non-fulfillment by the other party of his part of the obligation,
resolve the contract, rescission will not be permitted for a slight
or casual breach of the contract. Rescission may be had only for
such breaches that are so substantial and fundamental so to as
defeat the object of the parties in making the agreement."

xxx

As to the prayer for refund the full amount of complainants payment,

this should also fail. The record shows that prior to the execution of the
contract to sell, respondents thru their agent Rose Sicat enticed the plaintiffs
and represented to them that there were three (3) options to settle the
remaining 80% of the contract price but the complainants choose to pay their
balance thru bank financing. However, since the alleged

request

for

documents were not complied with, complainants decided not to pursue

the

contract

and demanded

a full refund. Again, these requests for

production of documents cannot be a ground for rescission of contract in the

absence of proof that the respondents deviates from their obligation.
Wherefore,

premises

considered,

the

instant

case

is

hereby

DISMISSED for lack of merit. Accordingly, ordering San Simon Realty

Development Inc. to cease and desist from selling the lot/s at La Trevi State,
San Simon, Pampanga, unless and until a Certificate of Registration and
License to Sell has been issued to the project by this office; and to pay
10,000.00 as violation of PD 957 on selling without certificate of registration
and license to sell.
Let a copy of this decision be furnished to the Monitoring Unit of this
Office which is hereby ordered to conduct further investigation on the extent of
Philstar Marketing and San Simon Realty Development Inc. selling activities at

2 G.R. No 80058, February 13, 1989.

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La Trevi State, San Simon, Pampanga project in violation of Section 4 and 5 of
PD 957.
SO ORDERED.
City of San Fernando, Pampanga; _____________________.

ATTY. JOCELYN C. TALENS-SATUROS

Housing and Land Use Arbiter
Cc:
Atty. Sheryl C. Santos-Centeno
Counsel for the complainants
3rd Floor, Salud Building, Gen. Hizon
Avenue,Sto. Rosario, City of San
Fernando, Pampanga
The President
San Simon Realty Devt., Inc.
2/F HGL Building
554 EDSA Caloocan City

Atty. Ferdinand Mark C. Ronquillo

Counsel for the respondent- Philstar
Marketing and Development Inc.
Ching Mendoza Quilas Biolena and
Partners
Suites 2503-2504 Atlanta Centre
31 Annapolis St., Greenhills,
San Juan Metro Manila