MR. & MRS. CAMILO O. MORENO, CONSUELO ARLENE S. MORENO, CESAR SERIL, MR. & MRS. DANIEL RIVERO, JOANNE R. RIVERO, PLAINTIFFS-APPELLANTS, VS. THE NATIONAL HOME MORTGAGE AND FINANC…
GARCIA-FERNANDEZ, J.:
Plaintiffs-appellants Mr. and Mrs. Camilo Moreno, Consuelo Arlene S. Moreno, Cesar Seril, Mr. and Mrs. Daniel Rivero and Joanne Rivero, along with many others, were longtime occupants of eight (8) parcels of land in Barangay Mauway, Mandaluyong City with a total area of 2,517 square meters covered by TCT Nos. 5958, 5959, 5961, 5962 and 5964 owned and registered in the name of Docarra Realty Development Corporation (Docarra Realty). On January 31, 1989, the occupants of said property with the assistance of former Mandaluyong Mayor Benjamin Abalos formed the Carmen Neighborhood Association, Inc. (CNAI) for the purpose of acquiring the occupied lots under the Community Mortgage Program (CMP) of defendant-appellee National Home Mortgage & Finance Corp. (NHMFC). At that time the elected officers of CNAI were: Saturnina Moreno, President; Roberta Rivero, Vice-President; Natividad Abinal, Treasurer; Maria Rosario Mallari, Secretary; Eduardo Doroin, Editor; Rosalina Cometa and Juana Mabini, Board Members.[1] As a requirement for acquisition of the property, CNAI thru its president Saturnina Moreno and Hussman Management and Development Corporation entered into a project management and planning services contract on May 17, 1989.[2] CNAI also engaged the services of Archaic Construction Co., Inc. for the survey and subdivision titling of the property.[3]
On December 5, 1991, Docarra Realty, CNAI represented by Moreno and the City of Mandaluyong executed a Memorandum of Agreement (MOA) providing among others that Mandaluyong city thru its mayor acting as originator, was extending assistance to CNAI in obtaining a loan from defendant-appellee NHMFC for the purchase/development of the property owned by Docarra Realty at the price of P3,775,500.00 (P1500.00/square meter).[4] On February 1, 1993, Mandaluyong city entered into an agreement with CNAI extending a loan of P3,722,689.96 among the members so that they can acquire lots they were occupying on the property. As beneficiaries of the project, the individual members of CNAI entered into lease purchase agreements with CNAI.[5] Further, CNAI submitted a Masterlist of Beneficiaries and Loan Apportionment and a subdivision plan of the property to defendant-appellee NHMFC. Plaintiffs-appellants Camilo Moreno, Daniel Rivero, Cesar Seril, Consuelo Arlene Moreno and Joanne Rivero were among the 75 beneficiaries in the Masterlist of Beneficiaries.[6]
On March 4, 1994, defendant-appellee NHMFC issued a certification that Docarra Realty was selling the property to CNAI under the CMP.[7] After the sale between Docarra Realty and Mandaluyong city on October 24, 1994, the latter executed a deed of absolute sale over the same on November 15, 1996 in favor of CNAI for the price of P3,775,500.00.[8] Defendant-appellee NHMFC then released the loan amount of P 3,722,689.90 to CNAI through Moreno for distribution to members/beneficiaries.[9]
Sometime in November 1997, an election was held where members of CNAI elected new officers namely: Tagumpay Evangelista, President; Eduardo Doroin, Vice-President; Rosario Paja, Treasurer; Edna Evangelista, Secretary; Marilou Vibar, Auditor; Vicente Valenciano, PRO; Ligaya Enclona, Rosario Naldoza, Rosalina Cometa, Rodel Belarmino and Valfredo Mallari, Board Members.[10]
On November 27, 1997, the new officers (Evangelista group) held a meeting and issued Resolution No. 1-S-98 approving a second Masterlist of Beneficiaries in accordance with a letter order dated March 26, 1993 of then Mayor Benjamin Abalos.[11] Resolution No. 1-S-98 stated that the first masterlist submitted to defendant-appellee NHMFC was not final due to complaints received from members of CNAI that the old board/officers (Moreno group) granted themselves multiple awards. Thereafter, the new board also issued Resolution No. 1-A-S-98 declaring that the multiple awards of former officers (Moreno group) will be replaced by qualified members/beneficiaries. Plaintiffs-appellants were among those removed or replaced in the second list of beneficiaries.[12]
On July 31, 2001, the Adjudication and Appeals Committee (AAC) of defendant-appellee NHMFC issued Resolution No. 19 adopting the second Masterlist of Beneficiaries submitted by the Evangelista group.[13] On September 3, 2001, defendant-appellee NHMFC wrote to CNAI’s former president Moreno informing her of the second masterlist of beneficiaries and requesting her to remit all collections on the amortizations made by CNAI’s members minus the payments corresponding to plaintiffs-appellants.[14]
On September 26, 2001, the Moreno group including plaintiffs-appellants filed a motion for reconsideration of Resolution No. 19 with the AAC of defendant-appellee, however, on February 20, 2002, the latter wrote to plaintiffs-appellants’ counsel reiterating its letter dated September 3, 2001 and effectively denying their motion.[15] On November 9, 2002, plaintiffs-appellants appealed Resolution No. 19 to the Office of the President in O.P. Case No. 02-K-548, but the appeal was dismissed for having been filed out of time in a resolution dated June 10, 2003.[16] On August 28, 2003, the OP issued the order also denying plaintiffs-appellant’s motion for reconsideration of the resolution dated June 10, 2003.[17] Plaintiffs-appellants sought recourse via a petition for review docketed as CA-G.R. SP NO. 79326 to this Court, but the petition was dismissed by the Twelfth Division due to a defective certification against forum-shopping in the resolution dated October 30, 2003. Their motion for reconsideration thereon was denied in the resolution dated January 29, 2004.[18] On June 2, 2004, the Supreme Court issued a resolution in G.R. No. 162020 denying the petition for review on certiorari filed by plaintiffs-appellants for late filing. On October 4, 2004, the Supreme Court issued the resolution denying plaintiffs-appellant’s motion for reconsideration thereon with finality.[19]
On December 23, 2004, plaintiffs-appellants filed a complaint against defendant-appellee for breach of contract, alleging that they were summarily removed from the list of beneficiaries under the first Masterlist of Beneficiaries without due process and despite having paid amortizations on their housing loan; that their removal from the second Masterlist of Beneficiaries was brought about by the allegation that they supported the opponent of then Mayor Abalos; and that as a result, Mayor Abalos ordered the election of new officers for CNAI where non-members and non-residents were allowed to vote, thus, plaintiffs-appellant prayed for their reinstatement in the Masterlist of Beneficiaries and payment of attorney’s fees of P100,000.00 and P3,000 per appearance. [20]
In its answer with affirmative defenses, defendant-appellee alleged that it launched the CMP to assist informal settlers in gaining access to housing finance under the National Shelter Program; that the originator of the loan for the project was the city of Mandaluyong thru Mayor Benjamin Abalos; that as a requirement for the release of the loan in the project, the masterlist of beneficiaries with loan apportionment and subdivision plan must be duly endorsed by the originator or its representative; that under defendant-appellee NHMFC’s Resolution No. 19 dated July 31, 2001 the first masterlist of beneficiaries by the Moreno group was held to be temporary in nature and still subject to revisions due to lack of endorsement by the originator and complaints received from CNAI members regarding multiple awards allegedly granted by the former set of officers; that CNAI’s new officers issued Resolution No. 1-S-98 approving the second masterlist of beneficiaries in accordance with the letter order dated March 26, 1993 of Mayor Abalos; and pursuant thereto, defendant-appellee wrote to Moreno on September 3, 2001 regarding the second and final masterlist of beneficiaries. Further, defendant-appellee alleged that plaintiffs-appellants’ complaint should be dismissed for failure to disclose the fact of filing an administrative case before the Adjudication and Appeals Committee of the NHMFC, which they elevated to the Office of the President, the Court of Appeals and Supreme Court. As counterclaim, defendant-appellee prayed for damages in the amount of P100,000.00 and attorney’s fees.[21]
On June 28, 2010, the RTC rendered the decision dismissing the complaint for breach of contract. In its decision the RTC held that the first Masterlist of Beneficiaries submitted by the Moreno group through Hussman Management & Development Corp., was not final as clearly established by the letter dated March 26, 1993 of then Mayor Abalos, which was acknowledged by CNAI’s former president Moreno. Further, based on Resolution No. 19 issued by defendant-appellee on July 31, 2001, it was found that the first masterlist of beneficiaries and loan apportionment was not endorsed by originator City of Mandaluyong, but rather by the developer Hussman who had no authority to do so. The required endorsement or certification of the originator was set forth under the Consolidated Implementing Guidelines for the Community Mortgage Program, particularly Section 12.4.1 of NHMFC Corporate Circular No. CMP-018 dated November 22, 1995. Pursuant thereto, the RTC sustained the validity and finality of the second masterlist of beneficiaries submitted by CNAI’s new president Tagumpay Evangelista on August 12, 1998, which was duly endorsed by Atty. Jimmy D. Lacebal as representative of the originator. This final masterlist in effect, disenfranchised plaintiffs-appellants under Resolution No. 1-S-98 and Resolution No. 1-A-S98 both issued by the CNAI. Accordingly, the RTC ruled that defendant-appellee committed no breach of contract as it had nothing to do with the disenfranchisement or replacement of plaintiffs-appellants from the second masterlist of beneficiaries; and that it was not even a party to any contract directly affecting plaintiffs-appellants.
Anent the issue of whether or not the case was barred by prior judgment under the principle of res judicata, the RTC held that replacement of plaintiffs-appellants from the masterlist of beneficiaries initially submitted by Moreno to defendant-appellee NHMFC was the subject matter of proceedings before the Adjudication & Appeals Committee (AAC), which rendered Resolution No. 19; and that said proceedings involved the same subject matter, causes of action and parties, thus, the res judicata rule applies in the case. The trial court also held that plaintiffs-appellants willfully violated the rule against forum-shopping when they failed to disclose in the initiatory pleading that there was a case involving the same subject matter, parties and causes of action which was resolved by the Adjudication & Appeals Committee of NHMFC, Office of the President, Court of Appeals and Supreme Court with finality.[22]
On September 2, 2010, plaintiffs-appellants filed a notice of appeal, which was given due course in the order dated September 13, 2010.[23] In this appeal, plaintiffs-appellants assign the lone error, to wit:
THE TRIAL COURT GRAVELY ERRED WHEN IT RENDERED JUDGMENT DISMISSING THE COMPLAINT FOR BREACH OF CONTRACT.[24]
Plaintiffs-appellants contend that the defendant-appellee NHMFC committed a breach of their contract when it excluded their names in the Masterlist of Beneficiaries without justifiable ground and due process; that even if the first Masterlist of Beneficiaries was allegedly not final and not duly endorsed by originator City of Mandaluyong, there was no reason for them to be excluded as beneficiaries; and that there was a perfected contract of loan between defendant-appellee NHMFC and plaintiffs-appellants as individual members of CNAI, since the former accepted monthly amortizations paid by the latter on their loans. Anent the issues of res judicata and forum shopping, plaintiffs-appellants contend that there was no identity of causes of action between the present case for breach of contract and the first case, which sought to question the validity of Resolution No. 19.[25]
The appeal is bereft of merit.
Community Mortgage Program (CMP), as a mode of land acquisition was introduced by Republic Act No. 7279 entitled “An Act to Provide for a Comprehensive and Continuing Urban Development and Housing Program, Establish the Mechanism and for its Implementation and other purposes.” Sec. 33 of the Act specifies that beneficiaries of the Program shall be responsible for their organization into associations to manage their subdivisions or places of residence, to secure housing loans under existing CMP and such other projects beneficial to them. The mortgage financing program of the National Home Mortgage Finance Corporation (NHMFC) assists legally organized associations of underprivileged and homeless citizens to purchase and develop a tract of land under the concept of community ownership.
Under the CMP of the NHMFC, the landowner executes a contract to sell the property in favor of the community association. In turn, the community association executes an agreement for the collection and remittance of shares in monthly amortization from its member-borrowers, and is under obligation to monitor paid and unpaid amortization of its member-borrowers. In the event a member-borrower defaults, the community association has the responsibility to find a qualified substitute who shall assume the obligations of the member-borrower in default.[26]
This Court finds that there was lack of privity of contract between plaintiffs-appellants and defendant-appellee. As a general rule, a contract is a meeting of minds between two persons. Under the Civil Code, the spirit takes precedence over the form; thus, it deems an agreement to exist, provided the essential requisites are present. A contract is upheld as long as there is proof of consent, subject matter and cause. Moreover, it is generally obligatory in whatever form it may have been entered into. From the moment there is a meeting of minds between the parties, it is perfected.[27] In the case of plaintiffs-appellants however, there is no evidence on record to show that there was a contract or any form of agreement between them and defendant-appellee. While plaintiffs-appellants anchor their contention on the individual lease purchase agreements they supposedly signed as beneficiaries of the program, record shows that these agreements were executed between CNAI and plaintiffs-appellants as individual members. Notably, defendant-appellee was not a party or signatory to these lease purchase agreements. Records also show that the agreement to obtain a loan from defendant-appellee in order to finance the purchase of the property owned by Docarra Realty, was executed between CNAI and the city of Mandaluyong acting as originator. It bears stressing that while the defendant-appellee is the main government agency tasked to administer the CMP, its authority pertains only to the administrative and financing aspects of the State’s social housing program schemes, i.e., evaluation of the community association and originator based on the submitted documents, site inspection, releasing of funds for land acquisition, site development and housing assistance, collection of monthly amortizations from community associations and foreclosure of mortgages.[28]
Anent the issue that plaintiffs-appellants’ exclusion from the list of beneficiaries was unjustified and violated their right to due process, again, this Court notes that defendant-appellee, in issuing Resolution No. 19 dated July 31, 2001 which adopted the second Masterlist of Beneficiaries, merely acted on the recommendations of CNAI; and that it exercised no discretion regarding the disenfranchisement or replacement of plaintiffs-appellants under Resolution No. 1-S-98 and Resolution No. 1-A-S98 both issued by CNAI through its new set of officers. Clearly then, no privity of contract exists between plaintiffs-appellants and defendant-appellee.
Anent the issue of whether the complaint for breach of contract was barred by prior judgment, res judicata means “a matter adjudged; a thing judicially acted upon or decided; a thing or matter settled by judgment.” It lays the rule that an existing final judgment or decree rendered on the merits, without fraud or collusion, by a court of competent jurisdiction, upon any matter within its jurisdiction, is conclusive of the rights of the parties or their privies, in all other actions or suits in the same or any other judicial tribunal of concurrent jurisdiction on the points and matters in issue in the first suit. The requisites of res judicata are: 1) The former judgment or order must be final; 2) It must be a judgment on the merits; 3) It must have been rendered by a court having jurisdiction over the subject matter and the parties; and 4) There must be between the first and second actions, identity of parties, subject matter and cause of action.[29]
This Court finds that the foregoing requisites are not present in the case at bar. As earlier mentioned, defendant-appellee had no hand in determining who were to be named beneficiaries under the CMP, as the question of validity of plaintiffs-appellants’ disqualification was solely between CNAI and it members. In a similar case, it was held that the Housing and Land Use Regulatory Board (HLURB) as an administrative agency exercising quasi-judicial functions, is vested by law with jurisdiction to regulate and supervise homeowner associations.[30] Undoubtedly, the case between CNAI, its officers and plaintiffs-appellants, which involved the issues of: 1) whether or not CNAI’s officers who passed the board resolutions expelling/disqualifying plaintiffs-appellants from the list of beneficiaries acted within their authority; and 2) whether or not the disqualification was valid and legal, is within the competence of HLURB and not by defendant-appellee, to decide.
It is well-settled that when material facts or questions in issue in a former action were conclusively settled by a judgment rendered therein, such facts or questions constitute res judicata and may not again be litigated in a subsequent action between the same parties or their privies regardless of the form of the latter. Absolute identity of parties is not required, and where a shared identity of interest is shown by the identity of the relief sought by one person in a prior case and the second person in a subsequent case, such was deemed sufficient.[31] In this case, it cannot be safely concluded that the disposition by the Adjudication and Appeals (AAC) of defendant-appellee upholding the validity of Resolution No. 19 finally settled the issue regarding plaintiffs-appellants’ disqualification as beneficiaries of the program. Accordingly, the principle of res judicata does not apply.
WHEREFORE, the decision dated June 28, 2010 of Regional Trial Court of Makati City dismissing the complaint in Civil Case No. 04-1380 is AFFIRMED.
SO ORDERED.
Tijam, N.G., Chairperson and Lopez, M.V., JJ., concur.
[1] Record, pp. 361-373.
[2] Id. at pp. 376-380.
[3] Id. at 381-384.
[4] Id. at pp. 385-389.
[5] Id. at p. 390-391.
[6] Id. at pp. 392-398.
[7] Id. at p. 423.
[8] Id. at pp. 407-409.
[9] Id. at pp. 410-411; p. 414.
[10] Id. at pp. 479.
[11] Id. at p. 422; pp. 415-420.
[12] Id. at p. 421.
[13] Id. at pp. 499-503.
[14] Id. at p. 504.
[15] Id. at pp. 505 & 508.
[16] Id. at pp. 635-636.
[17] Id. at p. 637.
[18] Id. at pp. 511-512.
[19] Id. at p. 513.
[20] Id. at pp. 1-12.
[21] Id. at pp. 65-68.
[22] Record, pp. 696-705.
[23] Id. at pp. 706-707; p. 708.
[24] Rollo, p. 59.
[25] Id. at pp. 59-66.
[26] Edna Eugenio, et al. vs. Sta. Monica Riverside Homeowners Association, G.R. No. 187751, November 22, 2010.
[27] Sta. Clara Homeowners’ Association, et al., vs. Spouses Gaston, G.R. No. 141961, January 23, 2002.
[28] See Note 26.
[29] Pentacapital Investment Corp. vs. Mahinay, G.R. Nos. 171736 & 181482, July 5, 2010.
[30] See Note 26.
[31] See Note 27.