[G.R. NO.

166051 : April 8, 2008]

SOLID HOMES, INC., Petitioner, v. EVELINA LASERNA and GLORIA CAJIPE,

represented by PROCESO F. CRUZ, Respondents.

DECISION

CHICO-NAZARIO, J.:

This is a Petition for Review on Certiorari under Rule 45 of the 1997 Revised Rules of
Civil Procedure seeking to annul, reverse and set aside (1) the Decision1 dated 21 July
2004 of the Court of Appeals in CA-G.R. SP No. 82153, which denied and dismissed the
Petition filed before it by the petitioner for lack of merit; and (2) the Resolution2 dated
10 November 2004 of the same court, which denied the petitioner's Motion for
Reconsideration.

The factual antecedents of this case are as follows:

On 1 April 1977, respondents Evelina Laserna and Gloria Cajipe, represented by their
attorney-in-fact, Proceso F. Cruz, as buyers, entered into a Contract to Sell3 with
petitioner Solid Homes, Inc. (SHI), a corporation engaged in the development and sale
of subdivision lots, as seller. The subject of the said Contract to Sell was a parcel of
land located at Lot 3, Block I, Phase II, Loyola Grand Villas, Quezon City, with a total
area of 600 square meters, more or less. The total contract price agreed upon by the
parties for the said parcel of land was P172,260.00, to be paid in the following manner:
(1) the P33,060.00 down payment should be paid upon the signing of the contract; and
(2) the remaining balance of P166,421.884 was payable for a period of three years at a
monthly installment of P4,622.83 beginning 1 April 1977. The respondents made the
down payment and several monthly installments. When the respondents had allegedly
paid 90% of the purchase price, they demanded the execution and delivery of the Deed
of Sale and the Transfer Certificate of Title (TCT) of the subject property upon the final
payment of the balance. But the petitioner did not comply with the demands of the
respondents.

The respondents whereupon filed against the petitioner a Complaint for Delivery of Title
and Execution of Deed of Sale with Damages, dated 28 June 1990, before the Housing
and Land Use Regulatory Board (HLURB). The same was docketed as HLURB Case No.
REM-073090-4511. In their Complaint, respondents alleged that as their outstanding
balance was only P5,928.18, they were already demanding the execution and delivery
of the Deed of Sale and the TCT of the subject property upon final payment of the said
amount. The petitioner filed a Motion to Admit Answer,5 together with its Answer6 dated
17 September 1990, asserting that the respondents have no cause of action against it
because the respondents failed to show that they had complied with their obligations
under the Contract to Sell, since the respondents had not yet paid in full the total
purchase price of the subject property. In view of the said non-payment, the petitioner
considered the Contract to Sell abandoned by the respondents and rescinded in
accordance with the provisions of the same contract.

On 7 October 1992, HLURB Arbiter Gerardo L. Dean rendered a Decision7 denying

respondents' prayer for the issuance of the Deed of Sale and the delivery of the TCT.
He, however, directed the petitioner to execute and deliver the aforesaid Deed of Sale
and TCT the moment that the purchase price is fully settled by the respondents.
Further, he ordered the petitioner to cease and desist from charging and/or collecting
fees from the respondents other than those authorized by Presidential Decree (P.D.)
No. 9578 and similar statutes.9

Feeling aggrieved, the petitioner appealed10 the aforesaid Decision to the HLURB Board
of Commissioners. The case was then docketed as HLURB Case No. REM-A-1298.

On 10 August 1994, the HLURB Board of Commissioners rendered a

Decision,11 modifying the 7 October 1992 Decision of HLURB Arbiter Dean. The decretal
portion of the Board's Decision reads:

WHEREFORE, in view of the foregoing, the [D]ecision of [HLURB] Arbiter Gerardo Dean
dated 07 October 1992 is hereby MODIFIED to read as follows:

1. [Herein respondent]12 is hereby directed to pay the balance of P11,585.41 within the
(sic) thirty (30) days from finality of this [D]ecision.

2. [Herein petitioner] is hereby directed to execute the necessary deed of sale

and deliver the TCT over the subject property immediately upon full payment.

3. [Petitioner] is hereby directed to cease and desist from charging and/or collecting
fees other than those authorized by P.D. 957 and other related laws.13 (Emphasis
supplied).

Petitioner remained unsatisfied with the Decision of the HLURB Board of

Commissioners, thus, it appealed the same before the Office of the President, wherein
it was docketed as O.P. Case No. 5919.

After evaluating the established facts and pieces of evidence on record, the Office of the
President rendered a Decision14 dated 10 June 2003, affirming in toto the 10 August
1994 Decision of the HLURB Board of Commissioners. In rendering its Decision, the
Office of the President merely adopted by reference the findings of fact and conclusions
of law contained in the Decision of the HLURB Board of Commissioners.

Resultantly, petitioner moved for the reconsideration15 of the 10 June 2003 Decision of
the Office of the President. However, in an Order16 dated 9 December 2003, the Office
of the President denied the same.

The petitioner thereafter elevated its case to the Court of Appeals by way of Petition for
Review under Rule 4317 of the 1997 Revised Rules of Civil Procedure, docketed as CA-
G.R. SP No. 82153, raising the following issues, to wit: (1) the Honorable Office of the
President seriously erred in merely adopting by reference the findings and conclusions
of the HLURB Board of Commissioners in arriving at the questioned [D]ecision; and (2)
the Honorable Office of the President seriously erred in not dismissing the complaint for
lack of cause of action.18
On 21 July 2004, the appellate court rendered a Decision denying due course and
dismissing the petitioner's Petition for Review for lack of merit, thus affirming the
Decision of the Office of the President dated 10 June 2003, viz:

WHEREFORE, in view of the foregoing, the instant [P]etition is hereby DENIED DUE

COURSE and DISMISSED for lack of merit.19 (Emphasis supplied).

Petitioner moved for reconsideration of the aforesaid Decision but, it was denied by the
Court of Appeals in a Resolution dated 10 November 2004.

Hence, this Petition.

Petitioner raises the following issues for this Court's resolution:

I. WHETHER OR NOT THE [HONORABLE] COURT OF APPEALS SERIOUSLY ERRED IN

HOLDING THAT THE DECISION OF THE OFFICE OF THE PRESIDENT, WHICH MERELY
ADOPTS BY REFERENCE THE FINDINGS AND CONCLUSIONS OF THE BOARD OF
COMMISSIONERS OF THE [HLURB], IS IN ACCORDANCE WITH THE MANDATE OF THE
CONSTITUTION THAT THE DECISION SHOULD BE BASED ON THE FINDINGS OF FACTS
AND LAW TO ARRIVE AT A DECISION; AND

II. WHETHER OR NOT THE [HONORABLE] COURT OF APPEALS SERIOUSLY ERRED IN

NOT REVERSING THE DECISION OF THE OFFICE OF THE PRESIDENT CONSIDERING
THAT THE COMPLAINT OF THE RESPONDENTS LACKS CAUSE OF ACTION.20

In its Memorandum,21 the petitioner alleges that the Decision of the Office of the
President, as affirmed by the Court of Appeals, which merely adopted by reference the
Decision of the HLURB Board of Commissioners, without a recitation of the facts and
law on which it was based, runs afoul of the mandate of Section 14, Article VIII of the
1987 Philippine Constitution which provides that: "No decision shall be rendered by any
court without expressing therein clearly and distinctly the facts and law on which it is
based." The Office of the President, being a government agency, should have adhered
to this principle.

Petitioner further avers that a full exposition of the facts and the law upon which a
decision was based goes to the very essence of due process as it is intended to inform
the parties of the factual and legal considerations employed to support a decision. The
same was not complied with by the Office of the President when it rendered its one-
page Decision dated 10 June 2003. Without a complete statement in the judgment of
the facts proven, it is not possible to pass upon and determine the issues in the case,
inasmuch as when the facts are not supported by evidence, it is impossible to
administer justice to apply the law to the points argued, or to uphold the rights of the
litigant who has the law on his side.

Lastly, petitioner argues that the Complaint filed against it by the respondents stated
no cause of action because the respondents have not yet paid in full the purchase price
of the subject property. The right of action of the respondents to file a case with the
HLURB would only accrue once they have fulfilled their obligation to pay the balance of
the purchase price for the subject property. Hence, the respondents' Complaint against
the petitioner should have been dismissed outright by the HLURB for being prematurely
filed and for lack of cause of action.

The Petition is unmeritorious.

The constitutional mandate that, "no decision shall be rendered by any court without
expressing therein clearly and distinctly the facts and the law on which it is
based,"22 does not preclude the validity of "memorandum decisions," which adopt by
reference the findings of fact and conclusions of law contained in the decisions of
inferior tribunals.23 In fact, in Yao v. Court of Appeals,24 this Court has sanctioned the
use of "memorandum decisions," a specie of succinctly written decisions by appellate
courts in accordance with the provisions of Section 40,25 B.P. Blg. 129, as
amended,26 on the grounds of expediency, practicality, convenience and docket status
of our courts. This Court likewise declared that "memorandum decisions" comply with
the constitutional mandate.27

This Court found in Romero v. Court of Appeals28 that the Court of Appeals substantially
complied with its constitutional duty when it adopted in its Decision the findings and
disposition of the Court of Agrarian Relations in this wise:

"We have, therefore, carefully reviewed the evidence and made a re-assessment of the
same, and We are persuaded, nay compelled, to affirm the correctness of the trial
court's factual findings and the soundness of its conclusion. For judicial convenience
and expediency, therefore, We hereby adopt, by way of reference, the findings of facts
and conclusions of the court a quo spread in its decision, as integral part of this Our
decision." (Underscoring supplied) cralawlibrary

In Francisco v. Permskul,29 this Court similarly held that the following memorandum

decision of the Regional Trial Court (RTC) of Makati City did not transgress the
requirements of Section 14, Article VIII of the 1997 Philippine Constitution:

"MEMORANDUM DECISION

After a careful perusal, evaluation and study of the records of this case, this Court
hereby adopts by reference the findings of fact and conclusions of law contained in the
decision of the Metropolitan Trial Court of Makati, Metro Manila, Branch 63 and finds
that there is no cogent reason to disturb the same.

"WHEREFORE, judgment appealed from is hereby affirmed in toto." (Underscoring

supplied.)

Hence, incorporation by reference is allowed if only to avoid the cumbersome

reproduction of the decision of the lower courts, or portions thereof, in the decision of
the higher court.30

However, also in Permskul,31 this Court laid down the conditions for the validity of
memorandum decisions, to wit:
The memorandum decision, to be valid, cannot incorporate the findings of fact and
the conclusions of law of the lower court only by remote reference, which is to
say that the challenged decision is not easily and immediately available to the
person reading the memorandum decision. For the incorporation by reference to
be allowed, it must provide for direct access to the facts and the law being
adopted, which must be contained in a statement attached to the said
decision. In other words, the memorandum decision authorized under Section 40 of
B.P. Blg. 129 should actually embody the findings of fact and conclusions of law
of the lower court in an annex attached to and made an indispensable part of
the decision.

It is expected that this requirement will allay the suspicion that no study was made of
the decision of the lower court and that its decision was merely affirmed without a
proper examination of the facts and the law on which it is based. The proximity at
least of the annexed statement should suggest that such an examination has
been undertaken. It is, of course, also understood that the decision being adopted
should, to begin with, comply with Article VIII, Section 14 as no amount of
incorporation or adoption will rectify its violation.

The Court finds necessary to emphasize that the memorandum decision should be
sparingly used lest it become an addictive excuse for judicial sloth. It is an additional
condition for the validity that this kind of decision may be resorted to only in
cases where the facts are in the main accepted by both parties and easily
determinable by the judge and there are no doctrinal complications involved
that will require an extended discussion of the laws involved. The memorandum
decision may be employed in simple litigations only, such as ordinary collection cases,
where the appeal is obviously groundless and deserves no more than the time needed
to dismiss it.

xxx

Henceforth, all memorandum decisions shall comply with the requirements

herein set forth both as to the form prescribed and the occasions when they
may be rendered. Any deviation will summon the strict enforcement of Article
VIII, Section 14 of the Constitution and strike down the flawed judgment as a
lawless disobedience.32

In the case at bar, we quote verbatim the Decision dated 10 June 2003 of the Office of
the President which adopted by reference the Decision dated 10 August 1994 of the
HLURB Board of Commissioners:

This resolves the appeal filed by [herein petitioner] Solid Homes, Inc. from the
[D]ecision of the [HLURB] dated [10 August 1994].

After a careful study and thorough evaluation of the records of the case, this Office is
convinced by the findings of the HLURB, thus we find no cogent reason to depart from
the assailed [D]ecision. Therefore, we hereby adopt by reference the findings of fact
and conclusions of law contained in the aforesaid [D]ecision, copy of which is hereto
attached as "Annex A."
WHEREFORE, premises considered, judgment appealed from is hereby AFFIRMED in
toto.33 (Emphasis supplied).

It must be stated that Section 14, Article VIII of the 1987 Constitution need not apply
to decisions rendered in administrative proceedings, as in the case a bar. Said
section applies only to decisions rendered in judicial proceedings. In fact, Article VIII is
titled "Judiciary," and all of its provisions have particular concern only with respect to
the judicial branch of government. Certainly, it would be error to hold or even imply
that decisions of executive departments or administrative agencies are oblige to meet
the requirements under Section 14, Article VIII.

The rights of parties in administrative proceedings are not violated as long as the
constitutional requirement of due process has been satisfied.34 In the landmark case
of Ang Tibay v. CIR, we laid down the cardinal rights of parties in administrative
proceedings, as follows:

1) The right to a hearing, which includes the right to present one's case and submit
evidence in support thereof.

2) The tribunal must consider the evidence presented.

3) The decision must have something to support itself.

4) The evidence must be substantial.

5) The decision must be rendered on the evidence presented at the hearing, or at least
contained in the record and disclosed to the parties affected.

6) The tribunal or body or any of its judges must act on its or his own independent
consideration of the law and facts of the controversy and not simply accept the views of
a subordinate in arriving at a decision.

7) The board or body should, in all controversial question, render its decision in such a
manner that the parties to the proceeding can know the various issues involved, and
the reason for the decision rendered.35

As can be seen above, among these rights are "the decision must be rendered on the
evidence presented at the hearing, or at least contained in the record and disclosed to
the parties affected;" and that the decision be rendered "in such a manner that the
parties to the proceedings can know the various issues involved, and the reasons for
the decisions rendered." Note that there is no requirement in Ang Tibay that the
decision must express clearly and distinctly the facts and the law on which it is based.
For as long as the administrative decision is grounded on evidence, and expressed in a
manner that sufficiently informs the parties of the factual and legal bases of the
decision, the due process requirement is satisfied.

At bar, the Office of the President apparently considered the Decision of HLURB as
correct and sufficient, and said so in its own Decision. The brevity of the assailed
Decision was not the product of willing concealment of its factual and legal bases. Such
bases, the assailed Decision noted, were already contained in the HLURB decision, and
the parties adversely affected need only refer to the HLURB Decision in order to be able
to interpose an informed appeal or action for certiorari under Rule 65.

However, it bears observation that while decisions of the Office of the President need
not comply with the constitutional requirement imposed on courts under Section 14,
Article VIII of the Constitution, the Rules of Court may still find application, although
suppletory only in character and apply only whenever practicable and convenient. There
is no mandate that requires the application of the Rules of Court in administrative
proceedings.

Even assuming arguendo that the constitutional provision invoked by petitioner applies

in the instant case, the decision of the OP satisfied the standards set forth in the case of
Permskul.

Firstly, the Decision of the Office of the President readily made available to the parties a
copy of the Decision of the HLURB Board of Commissioners, which it adopted and
affirmed in toto, because it was attached as an annex to its Decision.

Secondly, the findings of fact and conclusions of law of the HLURB Board of
Commissioners have been embodied in the Decision of the Office of the President and
made an indispensable part thereof. With the attachment of a copy of the Decision of
the HLURB Board of Commissioners to the Decision of the Office of the President, the
parties reading the latter can also directly access the factual and legal findings adopted
from the former. As the Court of Appeals ratiocinated in its Decision dated 21 July
2004, "the facts narrated and the laws concluded in the Decision of the HLURB Board of
Commissioners should be considered as written in the Decision of the Office of the
President. It was still easy for the parties to determine the facts and the laws on which
the decision were based. Moreover, through the attached decision, the parties could still
identify the issues that could be appealed to the proper tribunal."36

Thirdly, it was categorically stated in the Decision of the Office of the President that it
conducted a careful study and thorough evaluation of the records of the present case
and it was fully convinced as regards the findings of the HLURB Board of
Commissioners.

And lastly, the facts of the present case were not contested by the parties and it can be
easily determined by the hearing officer or tribunal. Even the respondents admitted
that, indeed, the total purchase price for the subject property has not yet been fully
settled and the outstanding balance is yet to be paid by them. In addition, this case is a
simple action for specific performance with damages, thus, there are neither doctrinal
complications involved in this case that will require an extended discussion of the laws
involved.

Accordingly, based on close scrutiny of the Decision of the Office of the President, this
Court rules that the said Decision of the Office of the President fully complied with both
administrative due process and Section 14, Article VIII of the 1987 Philippine
Constitution.
The Office of the President did not violate petitioner's right to due process when it
rendered its one-page Decision. In the case at bar, it is safe to conclude that all the
parties, including petitioner, were well-informed as to how the Decision of the Office of
the President was arrived at, as well as the facts, the laws and the issues involved
therein because the Office of the President attached to and made an integral part of its
Decision the Decision of the HLURB Board of Commissioners, which it adopted by
reference. If it were otherwise, the petitioner would not have been able to lodge an
appeal before the Court of Appeals and make a presentation of its arguments before
said court without knowing the facts and the issues involved in its case.

This Court also quotes with approval the following declaration of the Court of Appeals in
its Decision on the alleged violation of petitioner's right to due process:

The contention of the [herein] petitioner that the said [D]ecision runs afoul to the
Constitutional provision on due process cannot be given credence. The case already
had gone through the Offices of the HLURB Arbiter and the Board of
Commissioners where petitioner was given the opportunity to be heard and
present its evidence, before the case reached the Office of the President which
rendered the assailed [D]ecision after a thorough evaluation of the evidence
presented. What is important is that the parties were given the opportunity to
be heard before the [D]ecision was rendered. To nullify the assailed [D]ecision
would in effect be a violation of the Constitution because it would deny the
parties of the right to speedy disposition of cases.37

Petitioner's assertion that respondents' complaint filed with the HLURB lacked a cause
of action deserves scant consideration.

Section 7 of the 1987 HLURB Rules of Procedure states that:

Section 7. Dismissal of the Complaint or Opposition. - The Housing and Land Use
Arbiter (HLA) to whom a complaint or opposition is assigned may immediately dismiss
the same for lack of jurisdiction or cause of action. (Emphasis supplied).

It is noticeable that the afore-quoted provision of the 1987 HLURB Rules of Procedure
used the word "may" instead of "shall," meaning, that the dismissal of a complaint or
opposition filed before the HLURB Arbiter on the ground of lack of jurisdiction or cause
of action is simply permissive and not directive. The HLURB Arbiter has the
discretion of whether to dismiss immediately the complaint or opposition filed before
him for lack of jurisdiction or cause of action, or to still proceed with the hearing of the
case for presentation of evidence. HLURB Arbiter Dean in his Decision explained thus:

This Office is well aware of instances when complainants/petitioners fail, through

excusable negligence, to incorporate every pertinent allegations (sic) necessary to
constitute a cause of action. We will not hesitate to go outside of the complaint/petition
and consider other available evidences if the same is necessary to a judicious,
speedy, and inexpensive settlement of the issues laid before us or when there are
reasons to believe that the [com]plaints are meritorious. "Administrative rules should
be construed liberally in order to PROMOTE THEIR OBJECT AND ASSIST THE PARTIES
IN OBTAINING A JUST, SPEEDY AND INEXPENSIVE DETERMINATION OF THEIR
RESPECTIVE CLAIMS AND DEFENSES" (Mangubat v. de Castro, 163 SCRA
608).38 (Emphasis supplied).

Given the fact that the respondents have not yet paid in full the purchase price of the
subject property so they have yet no right to demand the execution and delivery of the
Deed of Sale and the TCT, nevertheless, it was still within the HLURB Arbiter's
discretion to proceed hearing the respondents' complaint in pursuit of a judicious,
speedy and inexpensive determination of the parties' claims and defenses.

Furthermore, the Court of Appeals already sufficiently addressed the issue of lack of
cause of action in its Decision, viz:

The Offices below, instead of dismissing the complaint because of the clear showing
that there was no full payment of the purchase price, decided to try the case and
render judgment on the basis of the evidence presented. The complaint of the
respondents does not totally lack cause of action because of their right against
the cancellation of the contract to sell and the forfeiture of their payments due
to non-payment of their monthly amortization.

xxxx

The HLURB Arbiter in his [D]ecision, stated that it is undisputed that the contract price
is not yet fully paid. This was affirmed by the HLURB Board of Commissioners and the
Office of the President. No less than the respondents admitted such fact when they
contended that they are willing to pay their unpaid balance. Without full payment, the
respondents have no right to compel the petitioner to execute the Deed of Sale and
deliver the title to the property. xxx. crvll

xxxx

Lastly, notwithstanding such failure to pay the monthly amortization, the

petitioner cannot consider the contract as cancelled and the payments made
as forfeited.

Section 24, PD 957 provides:

"Section 24. Failure to pay installments. - The rights of the buyer in the event of
his failure to pay the installments due for reasons other than the failure of the owner or
developer to develop the project shall be governed by Republic Act No. 6552. x x x."

Section 4, RA 6552 or the Realty Installment Buyer Protection Act provides:

"Section 4. In case where less than two years of installments were paid, the seller
shall give the buyer a grace period of not less than sixty days from the date the
installment became due. If the buyer fails to pay the installments due at the expiration
of the grace period, the seller may cancel the contract after thirty days from receipt by
the buyer of the notice of cancellation or the demand for rescission of the contract by a
notarial act."
It is therefore clear from the above provisions that the petitioner cannot consider the
[C]ontract to [S]ell as cancelled. The requirements above should still be complied
with.39 (Emphasis supplied).

Hence, during the hearing conducted by HLURB Arbiter Dean, it became apparent that
respondents' cause of action against petitioner is not limited to the non-execution and
non-delivery by petitioner of the Deed of Sale and TCT of the subject property, which is
dependent on their full payment of the purchase price thereof; but also the wrongful
rescission by the petitioner of the Contract to Sell. By virtue thereof, there is ample
basis for HLURB Arbiter Dean not to dismiss respondents' complaint against petitioner
and continue hearing and resolving the case.

As a final point. Based on the records of this case, respondents have tendered payment
in the amount of P11,584.41,40 representing the balance of the purchase price of the
subject property, as determined in the 10 August 1994 Decision of the HLURB Board of
Commissioners, and affirmed by both the Office of the President and the Court of
Appeals. However, the petitioner, without any justifiable reason, refused to accept the
same. In Ramos v. Sarao,41 this Court held that tender of payment is the manifestation
by debtors of their desire to comply with or to pay their obligation. If the creditor
refuses the tender of payment without just cause, the debtors are discharged
from the obligation by the consignation of the sum due. Consignation is made by
depositing the proper amount with the judicial authority, before whom the tender of
payment and the announcement of the consignation shall be proved. All interested
parties are to be notified of the consignation. Compliance with these requisites is
mandatory.42 In the case at bar, after the petitioner refused to accept the tender of
payment made by the respondents, the latter failed to make any consignation of the
sum due. Consequently, there was no valid tender of payment and the respondents are
not yet discharged from the obligation to pay the outstanding balance of the purchase
price of the subject property.

Since petitioner did not rescind the Contract to Sell it executed with the respondents by
a notarial act, the said Contract still stands. Both parties must comply with their
obligations under the said Contract. As ruled by the HLURB Board of Commissioners,
and affirmed by the Office of the President and the Court of Appeals, the respondents
must first pay the balance of the purchase price of the subject property, after which,
the petitioner must execute and deliver the necessary Deed of Sale and TCT of said
property.

WHEREFORE, premises considered, the instant Petition is hereby DENIED. Costs

against the petitioner.

SO ORDERED.