Arranza vs. B.F. Homes
G.R. No. 131683.
June 19, 2000
FACTS:
Respondent BF Homes, Inc. (BFHI), is a domestic corporation engaged in developing
subdivisions and selling residential lots. One of the subdivisions that respondent
developed was the BF Homes Paranaque Subdivision.
Central Bank ordered Banco Filipino its closure where it had substantial investments in
BFHI. However, a petition for rehabilitation and a declaration for suspension of
payments was filed in SEC by BFHI. Atty. Florencio B. Orendain was appointed by the
SEC as a Receiver.
Orendain was relieved by the SEC of his duties as a Receiver, and a new Board of
Receivers consisting of eleven members of respondents Board of Directors was
appointed for the implementation of Phases II and III of respondents rehabilitation.
The new Board, revoked the authority given by Orendain to use the open spaces at
Concha Cruz Drive and to collect community assessment funds; deferred the purchase
of new pumps; recognized BF Paranaque Homeowners Association, Inc., (BFPHAI) as
the representative of all homeowners in the subdivision; took over the management of
the Clubhouse; and deployed its own security guards in the subdivision.
Petitioners Arranza et al. filed with the HLURB a class suit "for and in behalf of the more
than 7,000 homeowners" against respondent BFHI et al to enforce the rights of
purchasers of lots in BF Homes Paranaque. Respondent asserts that the SEC, not the
HLURB, has jurisdiction over petitioners Arranza et al. complaint based on the contracts
entered into by the former receiver. The SEC, being the appointing authority, should be
the one to take cognizance of controversies arising from the performance of the
receivers duties
ISSUE:
Whether or not SEC, not the HLURB, has jurisdiction over the complaint based on the
contracts entered into by the former receiver.
HELD:
Jurisdiction is the authority to hear and determine a cause the right to act in a case. It is
conferred by law and not by mere administrative policy of any court or tribunal. It is
determined by the averments of the complaint and not by the defense contained in the
answer. Hence, the jurisdictional issue involved here shall be determined upon an
examination of the applicable laws and the allegations of petitioners complaint before
the HLURB.
Section 3 of P.D. No. 957 empowered the National Housing Authority (NHA) with the
"exclusive jurisdiction to regulate the real estate trade and business." the regulatory and
quasi~judicial functions of the NHA were transferred to the Human Settlements
Regulatory Commission (HSRC) by virtue of Executive Order No. 648 dated 7 February
1981. renamed the HSRC as the Housing and Land Use Regulatory Board (HLURB).
The Supreme Court ruled 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.
Hence, the HLURB should take jurisdiction over petitioners complaint because it
pertains to matters within the HLURBs competence and expertise. The HLURB should
view the issue of whether the Board of Receivers correctly revoked the agreements
entered into between the previous receiver and the petitioners from the perspective of
the homeowners interests, which P.D. No. 957 aims to protect. Whatever monetary
awards the HLURB may impose upon respondent are incidental matters that should be
addressed to the sound discretion of the Board of Receivers charged with maintaining
the viability of respondent as a corporation. Any controversy that may arise in that
regard should then be addressed to the SEC.