RESTITUTO CALMA, PETITIONER, VS. THE HON. COURT OF APPEALS (FIFTH DIVISION) AND PLEASANTVILLE DEVELOPMENT CORPORATION, RESPONDENTS.

Petitioner Restituto Calma, through this Petition for Review on certiorari, seeks to set aside the decision of
the Court of Appeals in CA-G.R. SP. No. 10684 dated 26 February 1987 declaring
null and void an order of the Human Settlements Regulatory Commission
(hereinafter referred to as the COMMISSION) dated 30 September 1986 calling for
the issuance of a writ of execution to enforce its decision of 22 May 1985.

The antecedents of this case are as follows:

Sometime in August 1975, the spouses Restituto
and Pilar Calma purchased
a lot in respondent Pleasantville Development Corporation’s (hereinafter
referred to as PLEASANTVILLE) subdivision in Bacolod City, known as City Heights Phase II.  In 1976, they built a house on said lot and established residence therein. 
Fabian and Nenita Ong
also purchased from PLEASANTVILLE a lot fronting that of the Calma spouses sometime
in the years 1979-1980, and constructed their own buildings where they resided and conducted their business.  On 25 April 1981, petitioner Calma wrote the president of the Association of Residents of
City Heights, Inc. (ARCHI) complaining
that the compound of the Ongs was being utilized as a lumber yard and that a “loathsome
noise and nervous developing sound”
emanating therefrom disturbed him and his family and caused them and their son to suffer nervous tension and illness [Rollo, 58.] The president of the association, in his reply, stated
that the association’s board had
referred the matter to Fabian Ong who had
already taken immediate action on petitioner’s complaint, i.e., by ordering the transfer of
the lumber cutting machine and
by instructing his laborers not to do any carpentry or foundry works in the early morning or afternoon and in the evening.  Finding
the measures taken by the association and Fabian Ong
unsatisfactory, petitioner on 17 June 1981 wrote and asked PLEASANTVILLE, as its duty and obligation, to abate the nuisance
emanating from the compound of
the Ong family. 
Failing to get an answer, the Calma spouses filed
a
complaint for
damages against the Ong spouses and PLEASANTVILLE on 28 July 1981 before the Court of First
Instance of Negros Occidental docketed as Civil Case No. 16113, alleging inter
alia 
that were it not for PLEASANTVILLE’s
act of selling the lot to the Ongs
and its failure to exercise its
right to cause the demolition of the alleged illegal constructions, the
nuisance could not have existed and petitioner and his family would not have sustained damage.  Thus, the complaint prayed
for actual, moral and exemplary damages and attorney’s fees and expenses of
litigation.

Petitioner also filed
with the National Housing Authority (NHA), on 31 August 1981, a complaint for
“Violation of the Provisions, Rules and Regulations of the Subdivision and
Condominium Buyers Protective Decree under Presidential Decree No. 957,”
claiming inter alia that were it not
for the negligent acts of PLEASANTVILLE in selling the parcel of land to the
spouses Fabian and Nenita Ong
and its refusal to exercise its right to cause the demolition of the structures
built by the Ongs in violation of the contractual
provision that the land shall be used only for residential purposes, the illness of petitioner and
his son would not have happened.  Petitioner prayed that PLEASANTVILLE be
ordered to abate the nuisance
and/or demolish the offending structures; to refund the amortization payments made on petitioner’s lot; and to provide petitioner and his son
with medication until their recovery.  He also prayed that PLEASANTVILLE be penalized under Sec. 39 of P.D. No.
957 and that its license be revoked.

After the answer to the
complaint was filed, the issues joined and the respective
position papers submitted, the COMMISSION (which had in the meantime taken over
the powers of the NHA,)* rendered
its decision in HSRC No. REM-92181-0547 on 22 May 1985 dismissing the complaint
of the petitioner for lack of merit, finding that PLEASANTVILLE did not violate
Sections 9(b), 19 and 23 of P.D. No. 957, but included a portion holding
PLEASANTVILLE responsible for the abatement of the alleged nuisance on the
ground that it was part of its implied warranty that its subdivision lots would
be used solely and primarily for residential purpose.

Thus, the dispositive portion of the COMMISSION’s decision read:

In view of the foregoing, the complaint for violation of Sections
9(f) and 23 of P.D. 957 is hereby DISMISSED. 
Respondent, however is hereby ordered to take appropriate
measures for the prevention and
abatement of the activities/nuisance complained of so as to ensure
complainant’s peaceful and pleasant living in
the residential subdivision of respondent.  In this regard, respondent within 15 days
from finality of
this decision, shall submit a timetable of the action to be taken in compliance with this directive and thereafter, a periodic status report of the
progress of compliance.  [Rollo, p. 35; Underscoring supplied.]

On 27 August 1986,
respondent COMMISSION issued the order granting the issuance of a writ of
execution of its decision.  Aggrieved,
PLEASANTVILLE filed a petition for prohibition with preliminary injunction with
this Court assailing the portion of the
COMMISSION’s decision ordering it to “take
appropriate measures for the prevention and abatement of the nuisance complained
of,” and its directive
requiring PLEASANTVILLE to submit a timetable of the action to
be taken and a periodic status report of the progress of its compliance.  PLEASANTVILLE asserted that since the COMMISSION had found that it did not violate any provision of P.D. No. 957, the
COMMISSION exceeded its jurisdiction when it ordered PLEASANTVILLE to
prevent/abate the alleged nuisance complained of.

The Court referred the
petition to the Court of Appeals which rendered
judgment holding that the COMMISSION
“acted capriciously and in
excess of its jurisdiction in imposing an obligation upon the petitioner after
absolving it of the complaint filed against it” [Rollo,
p. 38], the relevant portion of which decision is quoted below:

We find the petition impressed with merit.  Presidential Decree No. 957 is a regulatory
decree with penal sanctions.  While it
absolved the petitioner of any penal liability by dismissing the complaint
against it because it has not violated the pertinent provisions of Sections
9(f), 19 and 23, P.D. 957, yet it imposed an obligation to perform something that was not proven in the
complaint — that is to abate the occurrence of nuisance and to submit a
timetable of action and a periodic report of the progress of compliance.  The order does not only appear overbearing
and/or arbitrary, but it is without any basis in fact….

Thus, the Court of
Appeals ruled:

WHEREFORE, in view of
the foregoing, We find merit in the petition and the
same is hereby GRANTED. 
It is hereby ORDERED:

1)     
That order of respondent Commission dated 27 August 1986 for the issuance of a writ of execution is SET ASIDE as
null and void;

2)      That
should any writ relative thereto been (sic) issued,
the same is DISSOLVED or CANCELLED;

3)      That
portion of the dispositive portion
of the decision of respondent Commission of May 22, 1985, ordering petitioner respondent to take appropriate
measure for the prevention and abatement
of activities/nuisance complained
of in said case and the submission of timetable
of action and periodic
report is SET ASIDE as null and void.

No pronouncement as to costs.

SO ORDERED.  [Rollo, pp. 38-39.]

Petitioner moved for
reconsideration of the decision
but the Court of Appeals denied his motion. 
Hence, petitioner brought the instant
petition for review on certiorari seeking
the reversal of the decision of the
Court of Appeals and the reinstatement
of the COMMISSION’S decision.

1. The power to abate a nuisance, is not one of those enumerated under
P.D. No. 957, the subdivision and
Condominium Buyers Protective Decree. 
However, as pointed out by the
Solicitor General before the Court of Appeals,
the COMMISSION has been specifically
authorized by Executive Order No. 648 dated February 7, 1981 (otherwise known as
the “Charter of the Human Settlements Regulatory Commission”), to –

Issue orders after conducting the appropriate
investigation for the cessation or closure of any use or activity and to issue
orders to vacate or demolish any building or structure that it determines to have violated or failed to comply with any of
the laws, presidential decrees, letter of instructions, executive orders and
other presidential issuances and directives being implemented by it, either on
its own motion or upon complaint of any interested party.  [Sec. 5 (p).]**

At this point the Court finds it unnecessary to go into whether
or not the COMMISSION’s order to PLEASANTVILLE to
take measures for the prevention and abatement of the nuisance complained of
finds solid support in this provision because, as found by the Court of
Appeals, the COMMISSION’s conclusion that the
activities being conducted and the structures in the property of the Ongs constituted a nuisance was not supported by any evidence. 
The Solicitor General himself, in
his comment filed in the Court of Appeals, admits that the decision of
the COMMISSION did not make any finding of a nuisance [CA Rollo, p. 93.] 
Apparently, on the basis of position papers, the COMMISSION assumed the
existence of the nuisance, without receiving evidence on the matter, to support
its order for the prevention or abatement of the alleged nuisance.

Moreover, the spouses Ong, were
not even party to the proceedings before the COMMISSION which culminated
in the order for the prevention or
abatement of the alleged nuisance.  The parties before the COMMISSION were petitioner and PLEASANTVILLE only, although the persons who would be
directly affected by a decision favorable
to petitioner would be the Ong spouses.  Certainly,
to declare their property
or the activities being conducted therein a nuisance, and to order prevention
and abatement,
without giving them an
opportunity to be heard would be in violation of their
basic right to due process.

Thus, we find in
this case a complete disregard of the cardinal primary rights in administrative
proceedings, which had been hornbook law since the leading case of Ang Tibay v. Court of
Industrial Relations, 69 Phil. 635 (1940).

Consequently, the COMMISSION gravely abused its discretion
amounting to lack or excess of jurisdiction when it ordered
PLEASANTVILLE to “take appropriate
measure for the prevention/abatement of the nuisance complained of.”

2. Petitioner insists that the Ong spouses were not indispensable parties
in the case before the COMMISSION, hence no violation of due process was committed, because the action was primarily based on PLEASANTVILLE’s
violation of its contractual and
statutory obligations to
petitioner.  He advances the
view that PLEASANTVILLE breached its
warranty that the subdivision
shall be exclusively residential.

In testing the validity of
this contention, the
following provisions of the printed Contract
to Sell on Installment [Annex “E” of
the Petition] between PLEASANTVILLE
and petitioner which petitioner claims to be uniform for
all lot-buyers in the subdivision
(but which was not established
by evidence in the proceedings before the COMMISSION), are to
be considered:

* * *

12. The Vendee agrees to
constitute as permanent
lien on the property subject-matter of
this agreement the following conditions and regulations:

a) That
the land shall be used exclusively for commercial/residential
purposes.

* * *

22. That the
lot or lots subject-matter of
this contract shall be used exclusively for residential purposes and only one single family residential
building will be constructed on each
lot provided that the VENDEE may
construct a separate servant’s quarter;

* * *

[Rollo, p. 55; Underscoring supplied.]

These provisions of the
contract do not unequivocally
express a warranty that the subdivision
lots shall be used exclusively for residential
purposes.  On the contrary, the contract
also explicitly authorizes the use of
the lots for commercial or
residential purposes.

Because of the confusing language of items 12 and 22 of the printed contract
to sell, it is not possible to read
from the text alone a warranty that the subdivision shall be purely residential.  Other evidence of such warranty, including
representations, if any, made by PLEASANTVILLE to petitioner, would be needed to establish its enforceability.

Petitioner also made reference to a “statutory”
implied warranty, but failed to
cite the provision of law imposing the warranty. 
It could not be the Civil
Code, as the title on sales provides for only two classes of implied warranties:  in
cases of eviction and against
hidden defects of or encumbrances upon the thing sold [Arts. 1547, 1548-1560; 1561-1581.] Neither is any warranty imposed by P.D. No. 957.

As the party suing on the basis of breach
of warranty, petitioner would have to come up with
something better than a bare
assertion that there was a breach.  He would have to prove
first and foremost that there is indeed a warranty that had been breached, then establish how the
breach was committed.

3.  A final word.  There is
no denying that in instituting the complaint for damages before the trial court and the complaint for violation of
P.D. 957 before the COMMISSION petitioner
was motivated by the twin purposes of seeking the
abatement of the alleged nuisance and recovering damages for
the medical problems purportedly
caused by the nuisance.  He certainly cannot be faulted for seeking redress in all available venues for the alleged
violation of his family home’s tranquility,
for the defense of one’s home and family is a natural instinct.  However, redress for petitioner’s
grievances will have to be tempered by the guiding hand of due process.  Thus, the
nullification of the assailed portion
of the COMMISSION’s judgment becomes inevitable if we are to adhere to the basic tenets of law.  A
wrong cannot be corrected
by another wrong.

Hence, no reversible error was committed by the Court of Appeals when it nullified the assailed
portion of the COMMISSION’s decision, the order
granting the writ of execution, and any writ of execution issued pursuant
thereto.

But all is not lost for petitioner and his family.  As
mentioned earlier, there is a
pending civil case (Civil Case No. 16113, Regional Trial Court of Negros
Occidental), instituted by petitioner, where the alleged breach of warranty, coupled with PLEASANTVILLE’s inaction, is the primary basis for the
complaint for abatement and damages. 
Here he can prove the existence
of the warranty and show how it was breached. 
It is also in this case where the determination of whether or not the
activities conducted in the property of the Ong
spouses or the structures thereat constitute a nuisance will have to be
made.  Also herein is the proper forum
where, following another theory, it could be determined whether the Contract to
Sell (assuming that the contract between PLEASANTVILLE
and the Ongs is similar) establishes an enforceable obligation in favor of third parties, i.e., other lot-buyers in the subdivision.  In said proceeding the factual issues can be fully threshed out and the Ong spouses,
the parties who shall be directly affected by any adverse judgment, shall be
afforded the opportunity to be heard as they had been impleaded as defendants therein together with PLEASANTVILLE.

WHEREFORE, there being no cogent reasons to reverse
the decision of the Court of Appeals, the same is hereby AFFIRMED and the petition DENIED for lack of merit.

SO ORDERED.

Gutierrez, Jr., Feliciano, and
Bidin, JJ., concur.

Fernan, C.J., on official leave.

* Exec.
Order No. 648 dated February 7, 1981 (Charter of the Human
Settlements Regulatory Commission)
transferred the functions of the National
Housing Authority to the Human Settlements Regulatory Commission (HSRC)
[79 O.G. 4335.]  Subsequently,
Exec. Order No. 90, dated
December 17, 1986, renamed
the HSRC as the Housing and Land Use
Regulatory Board [83 O.G. 88.]

** It must be pointed out,
however, that the powers of the COMMISSION under E.O. No. 648 revolve around
zoning and other forms of land use control, urban renewal, and human
settlements.  Thus, reference is made to
P.D. Nos. 399, 815, 933, 957, 1216, 1344,
1396, 1517 and LOI Nos . 713, 729, 833, 935, the Urban Land
Reform Act and decrees relating to regulation of the value of land and
improvements and their rental [See Sec. 5(a) to (c).]