*

G.R. No. 166751. June 8, 2006.

RIDGEWOOD ESTATE, INC. (Erroneously sued as

Camella Homes), petitioner, vs. EXPEDITO BELAOS,
respondent.
Courts Jurisdictions Administrative Law Housing and
Land Use Regulatory Board (HLURB) The mere relationship
between the parties, i.e., that of being subdivision owner/developer
and subdivision lot buyer, does not automatically vest jurisdiction
in the Housing and Land Use Regulatory Board (HLURB) An
action for moral, actual and exemplary damages falls within the
jurisdiction of regular courts, not the Housing and Land Use
Regulatory Board (HLURB).The Court held in Roxas v. Court of
Appeals, 391 SCRA 351 (2002) that the mere relationship between
the parties, i.e., that of being subdivision owner/developer and
subdivision lot buyer, does not automatically vest jurisdiction in
the HLURB. For an action to fall within the exclusive jurisdiction
of the HLURB, the decisive element is the nature of the action as
enumerated in Section 1 of P.D. No. 1344. The HLURB has
jurisdiction over complaints aimed at compelling the subdivision
developer to comply with its contractual and statutory obligations.
The complaint filed by respondent against petitioner was one for
damages. It prayed for the payment of moral, actual and
exemplary damages by reason of petitioners malicious
encashment of the checks even after the rescission of the contract
to sell between them. Respondent claimed that because of
petitioners malicious and fraudulent acts, he suffered humiliation
and embarrassment in several banks, causing him to lose his
credibility and good standing among his colleagues. Such action
falls within the jurisdiction of regular courts, not the HLURB.
Same Parties A party cannot use the lack of juridical
personality of Camella Homes to evade its liability, if any, to
another person where said party admittedly uses the name
Camella Homes as its business name.We observe that
respondents complaint was actually directed against herein
petitioner, Ridgewood Estate, Inc., although it named Camella
Homes as respondent therein. The complaint itself referred to
Ridgewood Estate, Inc. as the authorized representative of
Camella Homes. Petitioner cannot use the lack of

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SECOND DIVISION.

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VOL. 490, JUNE 8, 2006

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Ridgewood Estate, Inc. vs. Belaos

juridical personality by Camella Homes as reason to evade its

liability, if any, to petitioner. Petitioner admittedly uses the name
Camella Homes as its business name. Hence, to the buyers,
Camella Homes and Ridgewood Estate, Inc. are one and the same.
A reading of the complaint would show that respondent was
essentially suing petitioner, it being the seller of the house and lot
he intended to purchase. We agree with the Court of Appeals
ruling that the remedy in this case is not the dismissal of the case
but the joinder of the proper party.

PETITION for review on certiorari of the decision and

resolution of the Court of Appeals.
The facts are stated in the opinion of the Court.
Ronald Agustin R. Estrada for petitioner.
Amelita S. Quirante and The Law Firm of Habitan,
Ferrer, Chan, Tagapan, Patriarca & Associates for
respondent.
PUNO, J.:
This is a petition for review of the decision of the Court of
Appeals dated July 28, 2004 and its resolution dated
January 19, 2005 in CAG.R. SP No. 77836. The Court of
Appeals affirmed the order of the Regional Trial Court of
Manila in Civil Case No. 02103764 denying the motion to
dismiss filed by herein petitioner Ridgewood Estate, Inc.
Petitioner is a subdivision developer that sells properties
under the trade name Camella Homes. Respondent
Expedito Belaos entered into a contract to sell with
petitioner for the purchase of a house and lot at Tierra
Nevada, Gen. Trias, Cavite. Pursuant thereto, respondent
issued several postdated checks in favor of petitioner as
amortization for the property. Petitioner, however, failed to
construct the house. Thus, respondent, in a letter dated
April 16, 2000, rescinded the contract to sell and demanded
the return of the amounts he had paid to petitioner, as well

as the postdated checks. Petitioner remitted to respondent

the sum of P299,908.00, equivalent to the down payment
and six monthly amortiza
450

450

SUPREME COURT REPORTS ANNOTATED

Ridgewood Estate, Inc. vs. Belaos

tions previously paid by respondent, but it nonetheless

continued to encash the other postdated checks, to the
prejudice of respondent.
Respondent filed before the Regional Trial Court of
Manila a complaint for damages against Camella Homes
for encashing the postdated checks despite repeated
demands to return them and refrain from encashing them
in view of the rescission of the contract to sell.
Petitioner filed a motion to dismiss. It argued that
Camella Homes is not a real partyininterest and the
complaint states no cause of action as the contract to sell
was entered into by and between Expedito L. Belaos and
Ridgewood Estate, Inc. It further argued that the
complaint was defective since Camella Homes is not a
natural or juridical person, hence, it is not an entity
authorized by law to be a party to a civil suit.
The trial court denied the motion to dismiss. It applied
the doctrine on corporation by estoppel under Section 21 of
the Corporation Code which states:
Section 21. Corporation by estoppel.All persons who assume to
act as a corporation knowing it to be without authority to do so
shall be liable as general partners for all debts, liabilities and
damages incurred or arising as a result thereof: Provided,
however, That when any such ostensible corporation is sued on
any transaction entered by it as a corporation or on any tort
committed by it as such, it shall not be allowed to use as a defense
its lack of corporate personality.
One who assumes an obligation to an ostensible corporation as
such, cannot resist performance thereof on the ground that there
was in fact no corporation.

Petitioner filed a petition for certiorari before the Court of

Appeals. In addition to its contention that Camella Homes
was not a real partyininterest, petitioner also raised the
argument that the trial court had no jurisdiction over the
suit, as the subject matter of the complaint was within the
451

VOL. 490, JUNE 8, 2006

451

Ridgewood Estate, Inc. vs. Belaos

exclusive jurisdiction of the Housing and Land Use

Regulatory Board (HLURB).
In its decision dated July 28, 2004, the Court of Appeals
dismissed the petition. It held:
Private respondents complaint contains allegations that
Ridgewood Estates (sic) deliberately and intentionally encashed
the postdated checks despite knowledge of the contracts recission.
Respondent prayed for the award of actual, moral and exemplary
damages due to his humiliation and loss of credibility with the
banking community and among his colleagues caused by
petitioners alleged malicious acts.
Respondent Belaos is not claiming refund or any other claim
from a subdivision developer. He does not demand for specific
performance of contractual and statutory obligations of delivering
the property to him. In the cases that reached the Supreme Court,
the ruling has consistently been that the NHA or the HLURB has
jurisdiction over complaints arising from contracts between the
subdivision developer and the lot buyer or those aimed at
compelling the subdivision developer to comply with its
contractual and statutory obligations to make the subdivision a
better place to live in. It has already been admitted by both
parties that the contract has already been rescinded and that
Ridgewood returned the downpayment [sic] and some of the
postdated checks. Hence,
the Court a quo has jurisdiction over the
1
action for damages.

Petitioner filed a motion for reconsideration which was

denied by the Court of Appeals in its resolution dated
January 19, 2005.
Petitioner raises the following arguments in the case at
bar:
1. That the honorable court failed to consider that the
lower court acted with grave abuse of discretion
when the latter assumed jurisdiction over a matter
which the law already vests with the Housing and
Land Use Regulatory Board.
_______________
1

Rollo, p. 120.
452

452

SUPREME COURT REPORTS ANNOTATED

Ridgewood Estate, Inc. vs. Belaos

2. That a perusal of the order of the lower court

reveals that it committed grave abuse of discretion
when it anchored itself on an erroneous finding that
Camella Homes allegedly is a corporation by
estoppel.
3. That the Honorable Court of Appeals failed to
consider that the lower court committed grave
abuse of discretion when it failed to consider that
the complaint filed by private respondent has no
cause of action for failure to implead the real party
in interest.
4. That the Honorable Court of Appeals failed to
consider that the lower court committed grave
abuse of discretion when it ordered Camella Homes,
which has 2no legal capacity to be sued[,] to submit
an answer.
We affirm the decision of the Court of Appeals.
First, the trial court correctly assumed jurisdiction over
the complaint filed by respondent against petitioner.
Section 1 of Presidential Decree No. 1344 provides for
the jurisdiction of HLURB (then National Housing
Authority), thus:
Sec. 1. In the exercise of its function to regulate the real estate
trade and business and in addition to its powers provided for in
Presidential Decree No. 957, the National Housing Authority
shall have exclusive jurisdiction to hear and decide the cases of
the following nature:
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 lot or
condominium unit against the owner, developer, dealer,
broker or salesman.
3

The Court held in Roxas v. Court of Appeals that the mere

relationship between the parties, i.e., that of being subdivi
_______________
2

Rollo, pp. 6668.

G.R. No. 138955, October 29, 2002, 391 SCRA 351.

453

VOL. 490, JUNE 8, 2006

453

Ridgewood Estate, Inc. vs. Belaos

sion owner/developer and subdivision lot buyer, does not

automatically vest jurisdiction in the HLURB. For an
action to fall within the exclusive jurisdiction of the
HLURB, the decisive element is the nature of the action as
enumerated in Section 1 of P.D. No. 1344. The HLURB has
jurisdiction over complaints aimed at compelling the
subdivision developer to comply with its contractual and
statutory obligations.
The complaint filed by respondent against petitioner
was one for damages. It prayed for the payment of moral,
actual and exemplary damages by reason of petitioners
malicious encashment of the checks even after the
rescission of the contract to sell between them. Respondent
claimed that because of petitioners malicious and
fraudulent
acts,
he
suffered
humiliation
and
embarrassment in several banks, causing him to lose
his
4
credibility and good standing among his colleagues. Such
action falls within the jurisdiction of regular courts, not the
HLURB.
Second, we observe that respondents complaint was
actually directed against herein petitioner, Ridgewood
Estate, Inc., although it named Camella Homes as
respondent therein. The complaint itself referred to
Ridgewood Estate, Inc. as the authorized representative of
Camella Homes. Petitioner cannot use the lack of juridical
personality by Camella Homes as reason to evade its
liability, if any, to petitioner. Petitioner admittedly uses
the name Camella Homes as its business name. Hence, to
the buyers, Camella Homes and Ridgewood Estate, Inc. are
one and the same. A reading of the complaint would show
that respondent was essentially suing petitioner, it being
the seller of the house and lot he intended to purchase. We
agree with the Court of Appeals ruling that the remedy in
this case is not the
dismissal of the case but the joinder of
5
the proper party. The appellate court correctly explained:
_______________
4

CA Rollo, pp. 3034.

Section 11, Rule 3, 1997 Rules of Civil Procedure.

454

454

SUPREME COURT REPORTS ANNOTATED

Ridgewood Estate, Inc. vs. Belaos

Dismissal of the complaint is not the remedy since the Court a

quo properly acquired jurisdiction [over] the action for damages.
In its pleadings before the trial court, defendant Camella Homes
alleges that it is not a juridical entity, not the real party in
interest and pointed to Ridgewood Estates [sic], Inc. as the party
liable to Belaos. In its petition before [u]s, Ridgewood Estates
[sic], Inc. erroneously sued as Camella Homes presented itself as
one of the developers of Camella Homes, specifically that of Tierra
Nevada Subdivision of which respondent Belaos is a buyer, then it
claims to be the real party in interest in the controversy by
admitting it entered into a Contract to Sell with Belaos, [then]
tries to exculpate Camella Homes by alleging that the latter is not
a juridical entity and alleges that it is the HLURB which has
jurisdiction over the controversy.
The Regional Trial Court did not commit grave abuse of
discretion in denying the motion to dismiss and ordering
defendant Camella Homes to file an answer. Assuming arguendo
that petitioner Ridgewood is a separate entity from Camella
Homes, defendant Camella Homes may implead the former.
Private respondent Belaos may file a motion to amend his
complaint so as to implead the real party in interest. Parties may
be dropped or added by order of the court on motion of any party
or on its own initiative at any stage of the action and on such
terms as are
just. (Sec. 11, Rule 3 of the 1997 Rules of Civil
6
Procedure)

We, therefore, find that the trial court did not err in
denying petitioners motion to dismiss.
IN VIEW WHEREOF, the petition is DENIED.
SO ORDERED.
SandovalGutierrez, Corona, Azcuna and Garcia,
JJ., concur.
Petition denied.
Notes.One who acquires condominium units by way of
assignment by the condominium project owner in payment
of
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6

Rollo, p. 113.

455

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455

Trans Middle East (Phils.) vs. Sandiganbayan

its indebtedness for contractors fee does so for valuable

consideration, and is a buyer in contemplation of P.D. 957.
(AMA Computer College, Inc. vs. Factora, 378 SCRA 121
[2002])
Where the petition alleges the amendment or
modification of the Housing and Land Use Regulatory
Board (HLURB) decision which was beyond the authority
of the HLURB and the Court of Appeals to do, the proper
remedy is a petition for certiorari under Rule 65 of the
Rules of Court. (Jose Clavano, Inc. vs. Housing and Land
Use Regulatory Board, 378 SCRA 172 [2002])
o0o

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