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SAN MIGUEL PROPERTIES v. SEC. HERNANDO B. PEREZ

FACTS:

San Miguel Properties Inc. (San Miguel Properties) filed a complaint against the directors and officers of BF Homes, Inc. claiming that they failed to deliver the titles of parcels of land that were purchased by San Miguel Properties. San Miguel Properties argued that the directors and officers should be criminally charged for non-delivery of the land titles. However, there was a pending complaint before the Housing and Land Use Regulatory Board (HLURB), which was examining the validity of the sales transactions and the authority of Atty. Orendain to bind BF Homes. The HLURB has exclusive jurisdiction over cases involving real estate business and practices under Presidential Decree No. 957. The Department of Justice (DOJ) denied San Miguel Properties' appeal, and the Court of Appeals (CA) dismissed their petition on the ground that the HLURB proceedings presented a prejudicial question which must be resolved before pursuing the criminal case.

In another separate case entitled "SMPI v. BF Homes, Inc.," the Office of the President confirmed the obligation of BF Homes, Inc. to deliver the titles to 20 fully-paid lots to San Miguel Properties. San Miguel Properties argued that the failure and refusal of BF Homes, Inc. to deliver the titles constituted a criminal offense under Section 25 of Presidential Decree No. 957. They asserted that it is the ministerial duty of the Secretary to indict the directors and officers for this offense.

San Miguel Properties also argued that the HLURB case does not present a "prejudicial question" that would render the criminal case premature. They contended that the criminal culpability of the directors and officers arises from their non-delivery of the titles to the fully-paid parcels of land and not from their non-compliance with the HLURB's ruling in the administrative case.

Additionally, the petitioner asserted that both the Court of Appeals and the Secretary, by ruling that the criminal complaint is premature, implicitly admitted the existence of sufficient probable cause against the directors and officers for the crime charged.

In a separate action, San Miguel Properties filed for specific performance and damages in the HLURB, and the HLURB Arbiter expressed inclination to suspend the proceedings.

ISSUES:

  1. Did the Secretary of Justice commit grave abuse of discretion in upholding the dismissal of San Miguel Properties' criminal complaint for violation of Presidential Decree No. 957 for lack of probable cause and for reason of a prejudicial question?

  2. Whether the HLURB administrative case for specific performance poses a prejudicial question that must be resolved before the criminal case for violation of Section 25 of Presidential Decree No. 957 can proceed.

  3. Whether there is a prejudicial question that needs to be resolved before proceeding with the criminal case.

  4. Whether the doctrine of primary jurisdiction is applicable.

  5. Whether the other submissions of the petitioner are unwarranted.

  6. Whether or not the appointment of the respondent as Deputy Sheriff of the RTC is valid.

  7. Whether or not the respondent performed his duties as Deputy Sheriff in an impartial manner.

RULING:

  1. The issue is not clearly stated, but based on the context of the case, it can be inferred that the issue is whether the Secretary of Justice committed grave abuse of discretion in upholding the dismissal of the criminal complaint.

  2. The petition has no merit.

  3. Yes, there is a prejudicial question that needs to be resolved before proceeding with the criminal case. The resolution of the civil case for specific performance, which is an administrative case pending in the HLURB, would determine the criminal liability of the accused for withholding the TCTs. The HLURB must first determine whether the accused is entitled to the delivery of the TCTs before proceeding with the criminal case.

  4. Yes, the doctrine of primary jurisdiction is applicable. The action for specific performance is an administrative case that could only be brought in the HLURB. The doctrine of primary jurisdiction allows the referral of matters within the competence of an administrative tribunal to that tribunal for its resolution. The courts will suspend the judicial process until after the administrative tribunal has resolved the issues within its competence.

  5. The other submissions of the petitioner are unwarranted. The character of the violation of Section 25 of Presidential Decree No. 957 as malum prohibitum does not render the suspension of the criminal case unsustainable. The rule on prejudicial question does not specify who is allowed to raise the defense, therefore the respondents can validly raise the prejudicial question as a reason to suspend the criminal proceedings.

  6. The appointment of the respondent as Deputy Sheriff of the RTC is found to be invalid.

  7. The respondent failed to perform his duties as Deputy Sheriff in an impartial manner.

PRINCIPLES:

  • The HLURB has the jurisdiction to decide with finality the question of a party's authority to enter into a transaction and rule on the rights and obligations of the parties to the contract. It has exclusive original jurisdiction to hear and decide cases involving specific performance of contractual and statutory obligations filed by buyers of subdivision lots.

  • The HLURB, in the exercise of its adjudicatory powers and functions, must interpret and apply contracts, determine the rights of the parties under these contracts, and award damages whenever appropriate.

  • The doctrine of primary jurisdiction recognizes that certain disputes are within the special competence of an administrative agency and should first be referred to that agency before resorting to the courts.

  • The existence of a prejudicial question arises when a civil action and a criminal action are both pending and the resolution of the former determines whether the criminal action may proceed.

  • Criminal culpability may arise from the non-delivery of titles to fully-paid parcels of land, and not from non-compliance with the HLURB's ruling in the administrative case.

  • A prejudicial question arises in a case that is a logical antecedent of the issue involved in a criminal case, and the resolution of which is within the jurisdiction of another tribunal.

  • The essential elements of a prejudicial question are: (a) the previously instituted civil action involves an issue similar or intimately related to the issue raised in the subsequent criminal action, and (b) the resolution of such issue determines whether or not the criminal action may proceed.

  • Even if the prejudicial question does not arise from a pending civil action, it may still exist if the action is civil in nature but can only be filed in a specific administrative agency with exclusive and original jurisdiction.

  • An action for specific performance is a remedy that demands the exact performance of a contract according to the precise terms agreed upon by a party bound to fulfill it. It may only be availed of after a breach of the contract.

  • The remedy of specific performance is an alternative remedy for the injured party in an obligation, alongside rescission with damages.

  • Presidential Decree No. 957 regulates the sale of subdivision lots and condominiums, ensuring proper delivery of titles and compliance with specified requirements. It provides for sanctions in case of violation or non-compliance.

  • Prejudicial question: A prejudicial question need not conclusively resolve the guilt or innocence of the accused. It is enough for the prejudicial question to test the sufficiency of the allegations in the information in order to sustain the further prosecution of the criminal case. A challenge to the allegations in the information on the ground of prejudicial question is a question on the merits of the criminal charge through a non-criminal suit.

  • Doctrine of primary jurisdiction: The doctrine of primary jurisdiction is invoked when a case requires the expertise, specialized skills, and knowledge of an administrative agency. It allows the referral of matters within the competence of an administrative tribunal to that tribunal for its resolution. The courts will suspend the judicial process pending the resolution of the issues by the administrative body.

  • A valid appointment is necessary for an individual to hold a public office and exercise its powers and functions.

  • Public officers are expected to perform their duties impartially and without any bias or prejudice.