ORTIGAS & COMPANY, LIMITED PARTNERSHIP, PETITIONER, VS. COURT OF APPEALS, HON. JESUS G. BERSAMIRA AS JUDGE-RTC OF PASIG CITY, BRANCH 166 AND THE CITY OF PASIG, RESPONDENTS.

Ortigas and Company versus Court of Appeals

The Case

This is a petition for review brought by Ortigas and Company, Limited Partnership, a realty company, against the Court of Appeals, the Regional Trial Court of Pasig City, and the City of Pasig. The City of Pasig sued Ortigas for specific compliance with a municipal ordinance requiring it to set aside recreational and playground facilities in its former Capitol VI Subdivision, now the Pasig City side of the Ortigas Center. Ortigas moved to dismiss, insisting that jurisdiction lies with the Housing and Land Use Regulatory Board, not the trial court. The case matters because it draws the boundary between the regulatory jurisdiction of the Housing and Land Use Regulatory Board over unsound real estate business practices and the general jurisdiction of the Regional Trial Courts, and it teaches that jurisdiction is determined by the nature of the cause of action, the subject matter, and the parties.

Procedural History

In 1994 the City of Pasig filed a complaint for specific compliance against Ortigas and Greenhills Properties, Inc. before the Regional Trial Court of Pasig. After pre-trial had begun, Ortigas filed a motion to dismiss on the ground that the trial court had no jurisdiction, since jurisdiction lay with the Housing and Land Use Regulatory Board over unsound real estate business practices. The trial court denied the motion, holding that the Board's jurisdiction pertained to disputes between buyers, salesmen, and subdivision and condominium developers, while the City was a local government unit seeking to enforce a municipal ordinance. Ortigas's motion for reconsideration was denied, so it filed a petition for certiorari before the Court of Appeals. The Court of Appeals affirmed the trial court, ruling that the City sought compliance with a statutory obligation to promote the general welfare, and that since the City was not a buyer or one entitled to a refund, the dispute fell under the jurisdiction of the Regional Trial Court. The Court of Appeals denied reconsideration, prompting Ortigas to file the present petition for review before the Supreme Court.

Facts

Ortigas developed the Ortigas Center, a commercial district that straddled the cities of Mandaluyong, Quezon, and Pasig. This case concerns the Pasig City side, known in 1969 as the Capitol VI Subdivision. Municipal Ordinance 5, Series of 1966, required Ortigas to designate appropriate recreational and playground facilities at the subdivision, which the City regarded as a residential site.

In 1994 the City sued Ortigas and Greenhills Properties, Inc. for specific compliance, alleging that Ortigas failed to comply with the ordinance and that, although the plan had been approved by the Municipal Council as to layout, Ortigas developed the property without securing final approval. Ortigas answered that its development plan was for a commercial subdivision, outside the scope of an ordinance that applied only to residential subdivisions, and that the City could not assail a plan approved twenty-five years earlier by the Department of Justice through the Land Registration Commission, by the Municipal Council of Pasig, and by the Court of First Instance of Rizal. Ortigas added that only in 1984 did the National Housing Regulatory Commission impose the open space requirement for commercial subdivisions.

Before pre-trial could be terminated, Ortigas moved to dismiss on the ground that jurisdiction lay with the Housing and Land Use Regulatory Board. The trial court denied the motion, and the Court of Appeals affirmed. Hence this petition.

Issues

• Whether or not the Court of Appeals erred in affirming that jurisdiction over the City's action for specific compliance lies with the Regional Trial Court rather than with the Housing and Land Use Regulatory Board.

Applicable Provisions

Section 1 of Presidential Decree 1344 defines the cases over which the Housing and Land Use Regulatory Board has exclusive jurisdiction:

(a) unsound real estate business practices; (b) claims involving refund and any other claims filed by subdivision lot or condominium unit buyer against the project owner, developer, dealer, broker, or salesman; and (c) 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.

This provision bears on the case because the Court had to decide whether the City's action falls within any of these three categories, and it held that it does not.

Section 19 of The Judiciary Reorganization Act of 1980, as quoted in the decision, vests civil jurisdiction in the Regional Trial Courts:

Section 19. Jurisdiction in Civil Cases. Regional Trial Courts shall exercise exclusive original jurisdiction: x x x x (6) In all cases not within the exclusive jurisdiction of any court, tribunal, person or body exercising judicial or quasi-judicial functions; x x x.

This provision bears on the case because, the Board having no jurisdiction, the City's action falls within the residual jurisdiction of the Regional Trial Court.

Ruling

The Court dismissed the petition and affirmed the Court of Appeals. It held that whether the Board has authority to hear and decide a case is determined by the nature of the cause of action, the subject matter or property involved, and the parties. Section 1 of Presidential Decree 1344 vests exclusive jurisdiction in the Board over the three categories quoted above. Unlike paragraphs (b) and (c), paragraph (a) does not state which party may file a claim for unsound real estate business practice, but in the context of the evident objective of Section 1, it is implicit that the offended party in an unsound real estate business practice, like the offended party in paragraphs (b) and (c), is the buyer of the land involved in development. The policy of the law is to curb unscrupulous practices in real estate trade and business that prejudice buyers.

The Court relied on its earlier statement that not every case involving buyers and sellers of subdivision lots or condominium units can be filed with the Board, whose jurisdiction is limited to cases filed by the buyer or owner of a subdivision lot or condominium unit and based on the causes of action enumerated in Section 1 of Presidential Decree 1344. The City had not bought a lot from Ortigas that would give it a right to seek the Board's intervention in enforcing a local ordinance regulating the use of private land within its jurisdiction in the interest of the general welfare. The City has the right to bring such an action, but only before a court of general jurisdiction such as the Regional Trial Court.

Doctrine

Jurisdiction is determined by the nature of the cause of action, the subject matter or property involved, and the parties. The exclusive jurisdiction of the Housing and Land Use Regulatory Board under Section 1 of Presidential Decree 1344 is limited to cases filed by the buyer or owner of a subdivision lot or condominium unit, based on unsound real estate business practices, claims for refund, or specific performance of contractual and statutory obligations. A local government unit that has not bought a lot from the developer cannot invoke that jurisdiction to enforce a municipal ordinance regulating the use of private land within its territory; such an action falls within the residual jurisdiction of the Regional Trial Courts under Section 19 of The Judiciary Reorganization Act of 1980.

Disposition

The Supreme Court dismissed Ortigas's petition, affirmed the Court of Appeals, and ordered the Regional Trial Court of Pasig City, Branch 166, to hear and decide the case before it with deliberate dispatch.

Remember This

The single line worth memorizing is that the Housing and Land Use Regulatory Board's jurisdiction is limited to cases filed by the buyer or owner of a subdivision lot or condominium unit, so a local government unit enforcing an ordinance belongs in the Regional Trial Court. Examiners use this case to test jurisdiction over unsound real estate business practices and the distinction between the Board's exclusive jurisdiction and the residual jurisdiction of the Regional Trial Courts.