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HOLY SPIRIT HOMEOWNERS ASSOCIATION v. SECRETARY MICHAEL DEFENSOR

FACTS:

The petition for prohibition under Rule 65 of the 1997 Rules of Civil Procedure was filed by Holy Spirit Homeowners Association, Inc. (Association), a homeowners association from the West Side of the National Government Center (NGC), represented by its president, Nestorio F. Apolinario, Jr., who is also a co-petitioner in his personal capacity and on behalf of the association. The named respondents are the ex-officio members of the National Government Center Administration Committee (Committee).

Before the passage of Republic Act No. 9207, various presidential issuances authorized the creation and development of the NGC. On March 5, 1972, former President Ferdinand Marcos issued Proclamation No. 1826, reserving a parcel of land in Constitution Hills, Quezon City for the NGC. Then, on August 11, 1987, former President Corazon Aquino issued Proclamation No. 137, excluding 150 hectares of the reserved site and authorizing the direct sale of the excluded portion to bona fide residents. Following this, former President Fidel Ramos issued Proclamation No. 248 on September 7, 1993, allowing the vertical development of the excluded portion.

On May 14, 2003, President Gloria Macapagal-Arroyo signed Republic Act No. 9207, also known as the "National Government Center (NGC) Housing and Land Utilization Act of 2003." The law declares the policy of the State to secure the land tenure of the urban poor and provides for the utilization of lands located in the NGC for various purposes. Pursuant to Section 5 of the law, the Committee formulated the Implementing Rules and Regulations (IRR) of R.A. No. 9207 on June 29, 2004.

The petitioners filed the instant petition, challenging certain provisions of the IRR as inconsistent with and arbitrary, capricious, and whimsical in implementing R.A. No. 9207. They argued that Section 3.1 (A.4), 3.1 (B.2), 3.2 (A.1), and 3.2 (C.1) of the IRR should be declared null and void.

In this case, the petitioners, an association of homeowners in the North Triangle (NGC) Housing Project, questioned the validity of certain provisions in the Implementing Rules and Regulations (IRR) of Republic Act (RA) No. 9207. The Office of the Solicitor General (OSG) argued that the petitioners did not have legal standing to challenge the IRR because they were not the recognized people's organization in the NGC and did not qualify as beneficiaries. However, the court held that the individual members of the petitioner association, being residents of the NGC, had a direct interest in the enforcement of the IRR and therefore had legal standing to question its provisions. The court also noted that while the petitioners only claimed rights over the NGC West Side, they could still be affected by other provisions in the IRR that govern the disposition of lots in the NGC. Thus, the court rejected the OSG's argument on locus standi. However, the court acknowledged that there were procedural impediments to granting the petition, such as the nature of the writ of prohibition which may not apply to the exercise of quasi-legislative functions. The court also recognized that the petitioners should have filed their petition with the Court of Appeals first in accordance with the hierarchy of courts. Finally, the court determined that the assailed IRR was issued pursuant to the quasi-legislative power of the Committee, and thus, the regular courts had jurisdiction to pass upon its validity. However, the petitioners failed to follow the doctrine of hierarchy of courts in filing their petition.

ISSUES:

  1. Whether the regular courts have jurisdiction to pass upon the validity of the assailed Implementing Rules and Regulations (IRR) issued by the Committee in the exercise of its quasi-legislative power.

  2. Whether the petitioners should have initially filed the petition with the Regional Trial Court (RTC) following the doctrine of hierarchy of courts.

  3. Whether a petition for prohibition is the proper remedy to challenge an IRR issued in the exercise of a quasi-legislative function.

  4. Whether the limitation on the areas to be awarded to qualified beneficiaries under Sec. 3.1 (a.4) and (b.2) of the Implementing Rules and Regulations (IRR) of R.A. No. 9207 is in conflict with the provisions of the said law.

  5. Whether the fixing of the selling rate of a lot at P700.00 per sq. m. and the imposition of a price escalation for beneficiaries who fail to execute a contract to sell within six (6) months from the approval of the subdivision plan by Sec. 3.2 (a.1) and (c.1) of the IRR are in conflict with R.A. No. 9207.

  6. Whether the Committee has the authority to fix the selling price of the lots.

  7. Whether the provision on the price escalation clause is within the Committee's authority.

  8. Whether the adoption of the IRR suffered from a procedural flaw.

RULING:

  1. Yes, the regular courts have jurisdiction to pass upon the validity of the assailed IRR issued by the Committee in the exercise of its quasi-legislative power. As provided in Section 5, Article VIII of the Constitution, the Court's power to evaluate the validity of an implementing rule or regulation is generally appellate in nature. Thus, the regular courts can pass upon the same.

  2. Yes, the petitioners should have initially filed the petition with the RTC following the doctrine of hierarchy of courts. Although the Supreme Court, Court of Appeals, and the RTC have concurrent jurisdiction to issue writs of certiorari, prohibition, mandamus, quo warranto, habeas corpus, and injunction, such concurrence does not give the petitioner unrestricted freedom of choice of court forum. The judicial course to challenge the validity of the IRR must follow the doctrine of hierarchy of courts.

  3. No, a petition for prohibition is not the proper remedy to challenge an IRR issued in the exercise of a quasi-legislative function. Prohibition lies against judicial or ministerial functions, but not against legislative or quasi-legislative functions. The appropriate remedy to challenge the IRR is an ordinary action for its nullification, which falls under the jurisdiction of the RTC. Petitioners' allegation that respondents are performing or threatening to perform functions without or in excess of their jurisdiction may be enjoined by the RTC through a writ of injunction or a temporary restraining order.

  4. The limitation on the areas to be awarded to qualified beneficiaries under Sec. 3.1 (a.4) and (b.2) of the IRR is not in conflict with the provisions of R.A. No. 9207. The provision of R.A. No. 9207 that mandates lot allocation to be based on the land area actually used or occupied by bona fide residents applies only to institutional beneficiaries and not to the bona fide residents of the National Government Center (NGC). The policy of the government is to set aside public property for the benefit not only of the urban poor but also of the local government and various government institutions. The limitation on the area to be awarded to each beneficiary is necessary to accommodate all qualified residents.

  5. The fixing of the selling rate of a lot at P700.00 per sq. m. and the imposition of a price escalation for beneficiaries who fail to execute a contract to sell within six (6) months from the approval of the subdivision plan by the IRR are not in conflict with R.A. No. 9207. The IRR is in conformity with the standards prescribed by the law and is germane to the objects and purposes of R.A. No. 9207. The IRR clarifies and provides details on the implementation of the law.

  6. Yes, the Committee has the authority to fix the selling price of the lots. The Committee is mandated to formulate the details necessary to implement the objective of the law. The determination of the selling price is left to the discretion of the Committee due to their special knowledge and technical expertise. The selling price of the lots does not need to be expressly required to be reasonable, as the standard of reasonableness and justness may be implied.

  7. Yes, the provision on the price escalation clause is within the Committee's authority to formulate guidelines and policies. The Committee has the power to lay down the terms and conditions governing the disposition of the lots, provided that these are reasonable and just. The inclusion of a period within which the parties must execute the contract to sell is not objectionable and is commonly found in contracts.

  8. No, the adoption of the IRR did not suffer from a procedural flaw. While the petitioners argue that the IRR was adopted by representatives of people's organizations contrary to the mandate of the law, it is noted that the petitioner association is not a duly recognized people's organization. As long as the passage of the rule or regulation had the benefit of a hearing, the procedural due process requirement is deemed complied with.

PRINCIPLES:

  • The regular courts have jurisdiction to pass upon the validity of an implementing rule or regulation issued by an administrative agency in the exercise of its quasi-legislative power.

  • The doctrine of hierarchy of courts must be followed in challenging the validity of an implementing rule or regulation.

  • Prohibition is the proper remedy to afford relief against usurpation of jurisdiction or power by an inferior court, or when the inferior court transgresses the bounds prescribed to it by the law. However, prohibition does not lie against legislative or quasi-legislative functions.

  • Legislative rules, which are in the nature of subordinate legislation, are designed to implement a primary legislation by providing the details thereof. The regulation should be germane to the objects and purposes of the law and should not be in contradiction to but in conformity with the standards prescribed by the law.

  • The Committee empowered to administer, formulate guidelines and policies, and implement the disposition of the areas covered by a law has the authority to formulate the manner by which the resources covered by the law are to be disposed of. Implicit in this authority is the power to formulate rules and regulations to clarify and provide details on the implementation of the law.

  • The Committee has the authority to formulate the details necessary to implement the objective of the law.

  • The determination of the selling price of the lots is within the discretion of the Committee, as long as it is reasonable and just.

  • The Committee has the power to lay down the terms and conditions governing the disposition of the lots, as long as these are reasonable and just.

  • The inclusion of a period within which the parties must execute the contract to sell is not objectionable and is commonly found in contracts.

  • Procedural due process is deemed complied with as long as the passage of the rule or regulation had the benefit of a hearing.