G.R. No. 166836. September 4, 2013.
Petitioner purchased 130 residential lots from BF Homes represented by Atty. Florencio B. Orendain (Orendain) as its duly authorized rehabilitation receiver appointed by the Securities and Exchange Commission (SEC), the transactions were embodied in three separate deeds of sale.
BF Homes claimed that it withheld the delivery of the 20 TCTs for parcels of land purchased under the third deed of sale because Atty. Orendain had ceased to be its rehabilitation receiver at the time of the transactions. BF Homes refused to deliver the 20 TCTs despite demands.
San Miguel Properties filed a complaint-affidavit in the Office of the City Prosecutor of Las Piñas City charging respondent directors and officers of BF Homes with non-delivery of titles in violation of Section 25, in relation to Section 39, both of Presidential Decree No. 957.
At the same time, San Miguel Properties sued BF Homes for specific performance in the HLURB praying to compel BF Homesto release the 20 TCTs in its favor.
The respondents claimed that the petitioner should have been brought to the SEC because BF Homes was under receivership; (d) in receivership cases, it was essential to suspend all claims against a distressed corporation in order to enable the receiver to effectively exercise its powers free from judicial and extrajudicial interference that could unduly hinder the rescue of the distressed company; and
BF Homes’ posture that the administrative case for specific performance in the HLURB posed a prejudicial question that must first be determined before the criminal case for violation of Section 25 of Presidential Decree No. 957 .
San Miguel Properties’ submission that there could be no prejudicial question to speak of because no civil action where the prejudicial question arose was pending,
WoN 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
Yes, the action for specific performance in the HLURB raises a prejudicial question that sufficed to suspend the proceedings determining the charge for the criminal violation of Section 2524 of Presidential Decree No. 957. This is true simply because the action for specific performance was an action civil in nature but could not be instituted elsewhere except in the HLURB, whose jurisdiction over the action was exclusive and original.
The determination of whether the proceedings ought to be suspended because of a prejudicial question rested on whether the facts and issues raised in the pleadings in the specific performance case were so related with the issues raised in the criminal complaint for the violation of Presidential Decree No. 957, such that the resolution of the issues in the former would be determinative of the question of guilt in the criminal case. An examination of the nature of the two cases involved is thus necessary.
An action for specific performance is the remedy to demand the exact performance of a contract in the specific form in which it was made, or according to the precise terms agreed upon by a party bound to fulfill it.26 Evidently, before the remedy of specific performance is availed of, there must first be a breach of the contract.
The Supreme Court found that the action for specific performance in the HLURB would determine whether or not San Miguel Properties was legally entitled to demand the delivery of the remaining 20 TCTs, while the criminal action would decide whether or not BF Homes’ directors and officers were criminally liable for withholding the 20 TCTs. Thus, it held that the resolution of the former must obviously precede that of the latter, for should the HLURB hold San Miguel Properties to be not entitled to the delivery of the 20 TCTs because Atty. Orendain did not have the authority to represent BF Homes in the sale due to his receivership having been terminated by the SEC, the basis for the criminal liability for the violation of Section 25 of Presidential Decree No.957 would evaporate, thereby negating the need to proceed with the criminal case.
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