Title

Amoguis vs. Ballado

Case Ponente Decision Date

G.R. No. 189626 LEONEN Aug 20, 2018

A dispute over land ownership in General Santos City leads to the nullification of
titles and the eviction of the Amoguis Brothers, who were found to be buyers in
bad faith, in favor of the Ballado Spouses, with St. Joseph Realty being held solely
responsible for damages.

THIRD DIVISION

G.R. No. 189626. August 20, 2018.

GREGORIO AMOGUIS and TITO AMOGUIS, petitioners, vs. CONCEPCION BALLADO and MARY
GRACE BALLADO LEDESMA, and ST. JOSEPH REALTY, LTD., respondents.

DECISION

LEONEN, J p:

Jurisdiction over the subject matter of a complaint is conferred by law. It cannot be lost
through waiver or estoppel. It can be raised at any time in the proceedings, whether during trial
or on appeal. The edict in Tijam v. Sibonghanoy is not an exception to the rule on jurisdiction. A
court that does not have jurisdiction over the subject matter of a case will not acquire
jurisdiction because of estoppel. Rather, the edict in Tijam must be appreciated as a waiver of a
party's right to raise jurisdiction based on the doctrine of equity. It is only when the
circumstances in Tijam are present that a waiver or an estoppel in questioning jurisdiction is
appreciated.

The unique circumstances in Tijam are present in this case. Indeed, as the petitioners in
this case belatedly argue, the Regional Trial Court did not have jurisdiction over the subject
matter of the Complaint. However, under the doctrine in Tijam, petitioners cannot now raise
lack of jurisdiction as they have waived their right to do so. Estoppel by laches has set in.
Petitioners did not question the jurisdiction of the Regional Trial Court during trial and on
appeal. It is only before this Court, 22 long years after the Complaint was filed, that petitioners
raised the Regional Trial Court's lack of jurisdiction.
 On November 24, 1969, Francisco Ballado (Francisco) and Concepcion Ballado
(Concepcion) (collectively, the Ballado Spouses) entered into Contract Nos. 5(M) and 6(M) with
owner and developer St. Joseph Realty, Ltd. (St. Joseph Realty) to buy on installment parcels of
land, which were designated as Lot Nos. 1 and 2, and were located in Block No. 1, Dadiangas
Heights Subdivision, General Santos City. Lot No. 1 had an area of 411 square meters, and Lot No.
2 covered 402 square meters. The Ballado Spouses initially paid a total of P500.00 for the lots,
and had to pay P107.13 and P97.15 per month for Lot Nos. 1 and 2, respectively, both for 180
months starting on December 30, 1969.

St. Joseph Realty characterized the contracts as contracts to sell and provided for
automatic rescission and cancellation, thus: cSEDTC

3) This contract shall be considered automatically rescinded and cancelled and no

further force and effect, upon failure of the VENDEE to pay when due, three (3) consecutive
monthly installments or to comply with any of the terms and conditions hereof, in which case
the VENDORS shall have the right to resell the said parcel of land to any person or purchaser,
as if this contract has never been entered into. In such a case, as cancellation of this contract, all
the amounts paid in accordance with the agreement together with all the improvements made
on the premises shall be considered as rents paid for the use and occupation of the above
mentioned premises and as payment for the damages suffered for the failure of the VENDEE to
fulfill his/her part of this agreement and the buyer hereby renounces his/her right to demand or
reclaim the return of the same and obliges himself/herself to peacefully vacate the premises
and deliver the same to the VENDORS.

The Ballado Spouses amortized until 1979 when Crisanto Pinili (Pinili), St. Joseph Realty's
collector, refused to receive their payments. They erected a small house made of light materials
for their caretaker. Pinili informed them that it was an eyesore and was against the rules of the
subdivision. He advised to suspend the payment for the lots, and directed the Ballado Spouses
to remove the small house before payments could continue. He also promised to return and
collect after he had put their records in order, but he never did. Francisco informed St. Joseph
Realty that the small house had already been taken down, but Pinili still did not come to collect.

On February 17, 1987, the Ballado Spouses discovered that St. Joseph Realty rescinded
their contracts. They found out that St. Joseph Realty had sent written demands to pay to the
address of Lot Nos. 1 and 2, and not to their residence as declared in the contracts. They were
only able to receive the last letter dated December 31, 1986 in January 1987 as it had their home
address handwritten beside the typewritten address of the lots.

Concepcion immediately wrote St. Joseph Realty to ask for reconsideration. She enclosed
a check for their remaining balance worth P30,000.00. She was the payee of the check issued
by her employer, P. I. Enterprises. She borrowed money from P. I. Enterprises and indorsed the
check in favor of St. Joseph Realty. After six (6) months, St. Joseph Realty returned the check to
the Ballado Spouses. St. Joseph Realty claimed that it only inadvertently received the check.

Meanwhile, on February 9, 1987, St. Joseph Realty sold Lot Nos. 1 and 2 to Epifanio
Amoguis (Epifanio), father of Gregorio Amoguis (Gregorio) and Tito Amoguis (Tito) (collectively,
the Amoguis Brothers). Epifanio paid P56,280.00 for one lot and P52,650.00 for the other. The
Amoguis Brothers then occupied the lots. On August 18, 1987, titles were issued in the Amoguis
Brothers' names.

Francisco confronted the Amoguis Brothers when he saw that the barbed fences, which
he had installed around the lots, were taken down. Epifanio told him that he bought the lots
from St. Joseph Realty. Thereafter, the Amoguis Brothers took down Francisco's mango and
chico trees. SDAaTC

Compelled by these events, the Ballado Spouses filed a Complaint for damages,
injunction with writ of preliminary injunction, mandatory injunction, cancellation and
annulment of titles, and attorney's fees on December 23, 1987. They also prayed for a temporary
restraining order to enjoin the Amoguis Brothers from erecting walls around the lots.

St. Joseph Realty filed its Answer. It was its affirmative defense that the Regional Trial
Court had no jurisdiction to hear the case, and that jurisdiction was properly vested in the
Human Settlements Regulatory Commission. The Amoguis Brothers, on the other hand, filed
their Answer with Cross-Claim against St. Joseph Realty, and Counterclaim against the Ballado
Spouses. The parties did not reach an amicable settlement. The case was archived in 1989
without prejudice, pending the submission of a settlement by the parties. Five (5) years later, on
April 8, 1994, the case was revived upon motion by the Ballado Spouses.

After numerous postponements, on February 7, 1996, the Ballado Spouses were finally
able to present their evidence in chief. They testified and presented their evidence, among
which were receipts to prove payments of installments, original copies of the contracts, the
transmittal letter of the P30,000.00 check to St. Joseph Realty, and the check. They also
presented St. Joseph Realty's rescission letter with its envelope, addressed to the lots and not to
their residence, bearing "first attempt, cannot be located," "second attempt, cannot be located,"
and "third attempt, cannot be located" written on it.

Finally, they presented as evidence Concepcion's February 21, 1987 reply letter asking for
her remaining payables, St. Joseph Realty's letter acknowledging receipt of Concepcion's
February 21, 1987 letter, documents of sale of the lands from St. Joseph Realty to the Amoguis
Brothers, and Concepcion's September 12, 1987 letter to St. Joseph Realty, proving that she did
not know that the lands had already been sold to and titled under the names of the Amoguis
Brothers in August 1987.

The Regional Trial Court ruled in favor of the Ballado Spouses, and against St. Joseph
Realty and the Amoguis Brothers:

WHEREFORE, judgment is hereby rendered in favor of plaintiffs, ordering

1. Defendant St. Joseph to receive the sum of P30,000.00 from plaintiffs to fully pay the
two residential lots;

2. To execute registrable deeds of sale in favor of plaintiffs over the two parcels of land;

3. To pay plaintiffs

a. P50,000.00 for moral damages;

b. P20,000.00 as exemplary damages; acEHCD

c. P30,000.00 in concept of attorney's fees;

d. and the cost of suit.

4. Declaring Transfer Certificates of Title Nos. T-25862 and T-29295 in the names of
Gregorio Amoguis and Tito Amoguis, respectively, NULL and VOID, and ordering the Register of
Deeds to cancel said titles;

5. Ordering St. Joseph to refund the Amoguises the total sum of P108,730.00 with interest
at 6% per annum from February 1987 until fully paid; and

6. Ordering the Amoguises to remove all their improvements from the land, to vacate the
same and deliver possession thereof to plaintiffs upon presentation of new certificates of title in
their names.

SO ORDERED.

Based on the preponderance of evidence, the Regional Trial Court concluded that the
Ballado Spouses proved their desire to complete their payment, and that it was Pinili who
refused to receive their payment because of the small house erected on the lands for their
caretaker. It also ruled that based on evidence, St. Joseph Realty never made attempts to collect
from them. St. Joseph Realty's notices of rescission were deliberately sent to the wrong address
of the lands involved, and not to the Ballado Spouses' home address.
 The Regional Trial Court did not give credence to St. Joseph Realty's allegation that it only
inadvertently received the check for P30,000.00. It was clear that St. Joseph Realty was already
negotiating the sale of the lands to Epifanio when it received Concepcion's check. When St.
Joseph Realty saw that it could sell the lots for higher prices, it returned the check to
Concepcion. As regards the Amoguis Brothers, the Regional Trial Court ruled that they were in
bad faith when they bought the lots. Epifanio did not deny that Francisco informed him that they
were in the process of completing payment. Despite this, Epifanio still cut down Francisco's
trees and set up his own fence.

Finally, the Regional Trial Court noted that the Ballado Spouses failed to file a formal offer
of evidence. However, this was not detrimental to their case as some of these documents were
admitted by St. Joseph Realty, including the contracts to sell and the letters that it sent to the
Ballado Spouses through the wrong address.

Only the Amoguis Brothers timely filed their appeal brief. Since St. Joseph Realty failed to
file its appeal brief, the Court of Appeals considered it to have abandoned its appeal. SDHTEC

The Amoguis Brothers argued that the Regional Trial Court should have considered valid
the rescission or cancellation of the contract to sell, and that they should not have been declared
as buyers in bad faith. They contended that the evidence presented by the Ballado Spouses
should not have been considered as it was not formally offered. They averred that in case there
was no valid rescission or cancellation of contract, St. Joseph Realty should have been ordered
to pay them the cost of their improvements, attorney's fees, litigation expense, and moral and
exemplary damages. They did not raise the Regional Trial Court's lack of jurisdiction.

On September 26, 2008, the Court of Appeals rendered its Decision, affirming the
Regional Trial Court February 28, 2001 Decision with modification:

WHEREFORE, premises foregoing, the appealed decision is hereby AFFIRMED with

modification. We uphold the findings of the court a quo nullifying the certificates of title issued to
the Amoguises. The award of P50,000.00 as moral damages, P20,000.00 as exemplary
damages and P30,000.00 as attorney's fees plus cost of the suit in favor of the Ballados is
likewise affirmed with the modification that such should be paid solely by St. Joseph and the
Ballados are likewise ordered to execute an absolute deed of sale upon full payment by the
Ballados of the deficiency in the purchase price of the subdivision lots. The amount adjudged to
be paid by St. Joseph to the Amoguises should however, be modified as the same should only be
P108,930.00. The Amoguises' other monetary claims are denied for want of basis.

SO ORDERED.
 Though not raised, the Court of Appeals discussed at the outset the issue of jurisdiction.
Since the Ballado Spouses wanted St. Joseph Realty to comply with the provisions of the
contracts to sell, the Complaint was for specific performance. The subject matter of the case
involved subdivision lots. Therefore, jurisdiction was lodged with the Housing and Land Use
Regulatory Board:

Such being the case, the court a quo should not have taken cognizance of the case as it is
the Housing and Land Use Regulatory Board (HLURB, for brevity) which exercises exclusive
original jurisdiction over such matters pursuant to Section 3 of Presidential Decree No. 957
entitled "Regulating the sale of Subdivision Lots and Condominiums, providing penalties for
violations thereof." The provision states:

SECTION 3. National Housing Authority. The National Housing Authority shall have exclusive
jurisdiction to regulate the real estate trade and business in accordance with the provisions of
this Decree.

This jurisdiction was later delineated and clarified by Presidential Decree No. 1344 which
provides: AScHCD

SECTION 1. In the exercise of its functions to regulate the real estate trade and business and in
addition to its powers provided for in Presidential Decree No. 957, the National Housing
Authority shall have exclusive jurisdiction to hear and decide cases of the following nature:

A. Unsound real estate business practices;

B. Claims involving refund and any other claims filed by subdivision lot or condominium
unit buyer against the project owner, developer, dealer, broker or salesman; and

C. Cases involving specific performance of contractual and statutory obligations filed by

buyers of subdivision lot or condominium unit against the owner, developer, dealer, broker or
salesman.

Moreover, the prefatory statement of Presidential Decree No. 957 which Presidential
Decree No. 1344 sought to expand states:

WHEREAS, numerous reports reveal that many real estate subdivision owners,
developers, operators and/or sellers have reneged on their representations and obligations to
provide and maintain properly subdivision roads, drainage, sewerage, water systems, lighting
systems, and another similar basic requirements, thus endangering the health and safety of
home and lot buyers;
 WHEREAS, reports of alarming magnitude also show cases of swindling and fraudulent
manipulations perpetrated by unscrupulous subdivision and condominium sellers and
operators, such as failure to deliver titles to the buyers or titles free from liens and
encumbrances, and to pay real estate taxes, and fraudulent sales of the same subdivision lots to
different innocent purchasers for value.

We may likewise add that litigants with cases cognizable by the HLURB cannot directly
resort to judicial review as Section 2 of Presidential Decree No. 1344 additionally states:

SECTION 2. The decision of the National Housing Authority shall become final and executory
after the lapse of fifteen (15) days from the date of its receipt. It is appealable only to the
President of the Philippines and in the event the appeal is filed and the decision is not reversed
and/or amended within a period of thirty (30) days, the decision is deemed affirmed. Proof of the
appeal of the decision must be furnished the National Housing Authority. (Emphasis in the
original, citations omitted) AcICHD

The Court of Appeals ruled, however, that since neither St. Joseph Realty nor the
Amoguis Brothers raised the issue of jurisdiction before the Regional Trial Court, they must be
considered estopped from raising it on appeal.

On the issue that the Ballado Spouses did not formally offer their evidence, the Court of
Appeals cited Vda. De O ate v. Court of Appeals. That case ruled that evidence not formally
offered may still be appreciated by a trial court provided that "first, it must have been duly
identified by testimony duly recorded and, second, it must have been incorporated in the
records of the case." The Court of Appeals cited People of the Philippines v. Alicante, where this
Court ruled that when a party fails to offer the purpose of a witness' testimony, the opposing
party has the duty to immediately object "at the time when the victim was called to the witness
stand, without proper explanation thereof or at anytime before the prosecution rested its case."
In this case, St. Joseph Realty and the Amoguis Brothers failed to timely enter their objection.

As to the admissibility of documentary evidence over which no formal offer of evidence

was made, the Court of Appeals reviewed the transcript of stenographic notes and noted that of
the documents which Concepcion identified, only the contracts to sell were attached. The
Regional Trial Court should have considered only these documents as documentary evidence
for the Ballado Spouses.

As to the rescission of contracts to sell, the Court of Appeals sustained that it was
improperly and unlawfully done by St. Joseph Realty. It cited Palay, Inc. v. Clave, where this
Court ruled that while the suspensive condition of full payment of purchase price has not been
complied with, there must, at the very least, be a notice to the defaulting buyer of the rescission.
With the passage of Republic Act No. 6552, also known as the Maceda Law, the manner to
rescind or cancel a contract to sell or a contract of sale has been codified. Rescission or
cancellation shall take place 30 days from receipt of the buyer of a notarized notice of
cancellation or demand for rescission. The buyer must also be paid the full cash surrender
value. The Court of Appeals likewise cited Siska Development Corporation v. Office of the
President, which provided that the Maceda Law shall apply to contracts entered into before its
effectivity. Thus, even if the Maceda Law was passed close to three (3) years after the contracts
to sell were executed, it still must apply to them.

The Court of Appeals affirmed the factual findings of the Regional Trial Court. St. Joseph
Realty presented a notarized demand of rescission during trial. However, the Ballado Spouses
had always insisted that they never received any notice of rescission from St. Joseph Realty.
Furthermore, St. Joseph Realty did not offer to pay the cash surrender value of the payments
they had made. Thus, the requirements for a valid rescission under the Maceda Law were not
met.

The Court of Appeals stated that since St. Joseph Realty did not validly rescind the
contracts to sell, it had no legal basis to sell the properties to the Amoguis Brothers. It should
make a refund of the purchase price to them, with a 6% per annum interest rate reckoned from
February 1988 until fully paid. TAIaHE

Finally, the Court of Appeals reconsidered the Regional Trial Court's finding of bad faith
on the part of the Amoguis Brothers, who merely relied on the misrepresentation of St. Joseph
Realty that the properties were already abandoned by the Ballado Spouses. The Amoguis
Brothers only discovered the Ballado Spouses' subsisting claim after they had already
purchased the properties. The Court of Appeals ordered that only St. Joseph Realty should pay
damages to the Ballado Spouses.

The Amoguis Brothers filed their Motion for Reconsideration, which was denied by the
Court of Appeals in its August 7, 2009 Resolution.

Hence, the Amoguis Brothers filed this Petition for Review on Certiorari under Rule 45 of
the Rules of Court, seeking a reversal of the Court of Appeals September 26, 2008 Decision and
August 7, 2009 Resolution.

The issues for this Court's resolution are as follows:

First, whether or not the Regional Trial Court's lack of jurisdiction was lost by waiver or
estoppel;
 Second, whether or not testimonial and documentary pieces of evidence which are not
formally offered may be appreciated by a trial court; and

Finally, whether or not petitioners Gregorio Amoguis and Tito Amoguis are buyers in
good faith and have preferential right to Lot Nos. 1 and 2.

Petitioners argue that lack of jurisdiction over the subject matter was timely raised by St.
Joseph Realty in its Answer with Counterclaims. Even assuming that it was never raised,
jurisdiction is a question of law that cannot be lost through waiver or estoppel, and may be
raised at any time, even during appeal. Further, if there was a remedy under the law, that
remedy must be exhausted first before the parties come to court. The administrative remedy
should have been sought before the Housing and Land Use and Regulatory Board, and then
appealed to the Office of the President. The Ballado Spouses counter that St. Joseph Realty
never moved that its affirmative defense of lack of jurisdiction be heard; instead, it actively
participated in the proceedings together with the Amoguis Brothers. cDHAES

Petitioners are already estopped from questioning the jurisdiction of the Regional Trial
Court. Laches had already set in.

As the Court of Appeals discussed motu proprio, Presidential Decree No. 957 instituted
the National Housing Authority as the administrative body with exclusive jurisdiction to regulate
the trade and business of subdivision and condominium developments. It provided for
mechanisms where entities can apply for licenses to develop and sell subdivision lots or
condominiums with the intent of curbing fraud instigated on purchasers of real estate. A
performance bond is also required of these entities to guarantee their undertaking under the
subdivision and condominium plans. For greater transparency, their subdivision and
condominium plans must likewise be registered. The following transactions, however, were
beyond the administrative body's regulatory supervision, and were exempt from license and
performance bond requirements:

(a) Sale of a subdivision lot resulting from the partition of land among co-owners and co-
heirs.

(b) Sale or transfer of a subdivision lot by the original purchaser thereof and any
subsequent sale of the same lot.

(c) Sale of a subdivision lot or a condominium unit by or for the account of a mortgagee in
the ordinary course of business when necessary to liquidate a bona fide debt.
 Presidential Decree No. 1344 was later on enacted to add to the National Housing
Authority's jurisdiction. It was no longer just a licensing body for subdivision and condominium
developers. Section 1 of Presidential Decree No. 1344 gave authority to the National Housing
Authority to hear and decide cases:

Section 1. In the exercise of its functions to regulate the real estate trade and business and in
addition to its powers provided for in Presidential Decree No. 957, the National Housing
Authority shall have exclusive jurisdiction to hear and decide cases of the following nature:

A. Unsound real estate business practices;

B. Claims involving refund and any other claims filed by subdivision lot or condominium
unit buyer against the project owner, developer, dealer, broker or salesman; and

C. Cases involving specific performance of contractual and statutory obligations filed by

buyers of subdivision lot or condominium unit against the owner, developer, dealer, broker or
salesman.

Section 3 of Presidential Decree No. 1344 provided that appeals from decisions of the
National Housing Authority shall be made to the President of the Philippines within 15 days from
receipt. ASEcHI

In between the approval of Presidential Decree Nos. 957 and 1344, the Maceda Law was
approved.

Subject matter jurisdiction is a court's or tribunal's power to hear and determine cases of
a general class or type relating to specific subject matters. This jurisdiction is conferred by law.
To determine a court's or an administrative body's jurisdiction over a subject matter, allegations
in the complaint must be examined. The nature of the action, as reflected in the allegations in
the complaint, and the reliefs sought determine jurisdiction over the subject matter. It is
immaterial whether the claimant has a right to the relief sought.

Presidential Decree No. 957 was approved on July 12, 1976, 11 years before the Ballado
Spouses filed their complaint. This means that the law mandating the jurisdiction of the National
Housing Authority, which later on became the House and Land Use Regulatory Board, had long
been in effect when petitioners filed their Answer and participated in trial court proceedings. It
behooved them to raise the issue of jurisdiction then, especially since St. Joseph Realty, their co-
respondent, raised it in its Answer albeit superficially and without any discussion.

In their Complaint, the Ballado Spouses alleged that the properties already sold to them
by St. Joseph Realty were sold to the Amoguis Brothers for a better price. They sought the
cancellation of the titles issued to petitioners as a result of their subsisting contracts to sell,
which were neither rescinded nor annulled. They argued that when St. Joseph Realty received
their check for P30,000.00, they had fully paid the purchase price. As against St. Joseph Realty,
they sought damages and specific performance. They based their claim of full payment when St.
Joseph Realty accepted the check for P30,000.00. Upon St. Joseph Realty's acceptance, the
Ballado Spouses were able to fully comply with the terms of the contracts to sell. Without any
valid rescission, St. Joseph Realty was bound to carry out its obligations under the contracts. As
against petitioners, the Ballado Spouses sought injunction and the cancellation of titles issued
under their names. The Amoguis Brothers were beneficiaries of St. Joseph Realty's breach of the
contracts to sell. They had no authority under the law to occupy the properties and have them
titled under their names.

According to Presidential Decree No. 1344, exclusive original jurisdiction for specific
performance of contractual and statutory obligations filed by buyers of subdivision lots or
condominium units against the owner, developer, dealer, broker or salesman is lodged with the
National Housing Authority.

In Antipolo Realty v. National Housing Authority, this Court ruled that the National
Housing Authority, and not the regular courts, have initial jurisdiction to determine the rights
and obligations of the subdivision developer and of the buyer under a contract to sell.

Solid Homes v. Payawal stressed that the jurisdiction of National Housing Authority
excluded that of the regular courts even in a concurrent capacity. The respondent in that case,
Teresita Payawal, argued that regular courts had jurisdiction based on Batas Pambansa Blg. 129,
a law passed after Presidential Decree No. 1344. This Court ruled otherwise:

The language of Section 1, Presidential Decree 1344, especially the italicized portions,
leaves no room for doubt that "exclusive jurisdiction" over the case between the petitioner and
the private respondent is vested not in the Regional Trial Court but in the National Housing
Authority. ITAaHc

...

It is obvious that the general law in this case is BP No. 129 and PD No. 1344 the special
law.

The argument that the trial court could also assume jurisdiction because of Section 41 of
PD No. 957, earlier quoted, is also unacceptable. We do not read that provision as vesting
concurrent jurisdiction on the Regional Trial Court and the Board over the complaint mentioned
in PD No. 1344 if only because grants of power are not to be lightly inferred or merely implied.
The only purpose of this section, as we see it, is to reserve to the aggrieved party such other
remedies as may be provided by existing law, like a prosecution for the act complained of under
the Revised Penal Code. (Citation omitted)

Solid Homes cemented the National Housing Authority's jurisdiction to hear and decide
claims for damages and attorney's fees incidental to unsound business practices, claims for
refund, and for specific performance against subdivision lot or condominium unit owners,
developers, dealers, brokers, or salesmen. This Court ruled that the qualifier "and any other
claims" in Section 1 (b) of Presidential Decree No. 1344 meant so. In Solid Homes, this Court also
ruled that as an administrative body, the National Housing Authority possessed specialized
competence and experience to determine these allied matters.

In the years that followed, this Court tackled the issue of whether the Housing and Land
Use and Regulatory Board's jurisdiction included the cancellation of land titles issued to third
parties due to the subdivision developer's or owner's unsound business practices. Fajardo v.
Hon. Bautista ruled that it did. Apart from unsound business practices, the cancellation of titles
issued to third parties also involved claims for specific performance against subdivision
developers and owners. In Fajardo, the claimants sought that the developer perform its
obligations under the contract to sell, and the cancellation of titles were but incidental.

These doctrines have been observed by this Court even in recent cases. Presently,
jurisprudence still dictates that when a buyer wants to compel a developer to conform with the
terms of the contract it executed, jurisdiction lies with the Housing and Land Use and
Regulatory Board.

The Ballado Spouses' rights and interests lie not just as buyers of any property, but
buyers of subdivision lots from a subdivision developer. From the circumstances between St.
Joseph Realty and the Ballado Spouses, there is no doubt that the then National Housing
Authority had jurisdiction to determine the parties' obligations under the contracts to sell and
the damages that may have arisen from their breach. The Ballado Spouses' Complaint should
have been filed before it. The National Housing Authority also had jurisdiction over the
injunction and annulment of titles sought against petitioners as these were incidental to St.
Joseph Realty's unsound business practices.

Where there is no jurisdiction over a subject matter, the judgment is rendered null and
void. A void judgment has absolutely no legal effect, "by which no rights are divested, from
which no rights can be obtained, which neither binds nor bars any one, and under which all
acts performed and all claims flowing out of are void." Because there is in effect no judgment,
res judicata does not apply to commencing another action despite previous adjudications
already made. CHTAIc
 II

However, this Court has discussed with great nuance the legal principle enunciated in
Tijam. Estoppel by laches bars a party from invoking lack of jurisdiction in an unjustly belated
manner especially when it actively participated during trial.

Estoppel by laches has its origins in equity. It prevents a party from presenting his or her
claim "when, by reason of abandonment and negligence, he or she allowed a long time to elapse
without presenting it." It is further elaborated by this Court in Regalado v. Go, thus:

Laches is defined as the "failure or neglect for an unreasonable and unexplained length of
time, to do that which, by exercising due diligence, could or should have been done earlier, it is
negligence or omission to assert a right within a reasonable length of time, warranting a
presumption that the party entitled to assert it either has abandoned it or declined to assert it."
(Citation omitted)

In estoppel by laches, a claimant has a right that he or she could otherwise exercise if not
for his or her delay in asserting it. This delay in the exercise of the right unjustly misleads the
court and the opposing party of its waiver. Thus, to claim it belatedly given the specific
circumstances of the case would be unjust.

In Tijam, the spouses Serafin Tijam and Felicitas Tagalog (the Tijam Spouses) filed a
collection case against the spouses Magdaleno Sibonghanoy and Lucia Baguio (the Sibonghanoy
Spouses). The Court of First Instance of Cebu issued a writ of attachment over the Sibonghanoy
Spouses' properties. It was dissolved afterwards as the Sibonghanoy Spouses and the Manila
Surety and Fidelity Co., Inc. (Manila Surety), their surety, filed a counterbond. The decision on
the collection case became final and executory. As collection could not be made against the
Sibonghanoy Spouses, the Tijam Spouses tried to satisfy the judgment against the surety's bond.
Manila Surety opposed and argued that no demand was made on it. The Court of First Instance
ruled in the surety's favor. However, demand on the surety was eventually made, and the Court
of First Instance issued a writ of execution. Again, Manila Surety opposed and tried to quash the
writ of execution. It argued that a summary hearing was required before the writ should issue.
Upon the Court of First Instance's denial to quash, Manila Surety appealed to the Court of
Appeals. It assigned errors committed by the Court of First Instance in the issuance of the writ
of execution but did not raise the issue of jurisdiction. The Court of Appeals affirmed the Court
of First Instance's orders to execute. After Manila Surety received a copy of the Court of Appeals
decision, it asked for additional time to file its motion for reconsideration. The Court of Appeals
granted an extension. Instead of filing a motion for reconsideration, the surety filed a motion to
dismiss raising, for the first time, the Court of First Instance's lack of jurisdiction over the
subject matter of the case. As the amount involved was only P1,908.00, inferior courts, and not
the Court of First Instance, had exclusive original jurisdiction over the collection case. This was
mandated by Republic Act No. 296, the Judiciary Act of 1948, which came into effect a month
after the Tijam Spouses filed their complaint before the Court of First Instance. EATCcI

This Court ruled that the surety could no longer question the Court of First Instance's
jurisdiction over the subject matter due to estoppel by laches. It premised that since Manila
Surety actively participated during trial and prevailed; invoking the Court of First Instance's
lack of jurisdiction was a last ditch effort to absolve itself from the effects of an unfavorable
judgment on appeal. On the 15-year delay before the issue on jurisdiction was raised, this Court
ruled that it could have and should have been raised earlier. The surety's failure to do so was
negligence on its part, "warranting a presumption that the party entitled to assert it either has
abandoned it or declined to assert it." Tijam set a precedent to stop legal machinations where
jurisdiction was raised at the very last minute when the parties have already gone through long
years of litigation. It was not so much an issue of time than it was an issue of fairness. Though
conferred by law, fairness and equity must temper the parties' bravado to raise jurisdiction
when they have participated in proceedings in the lower courts or when an unfavorable
judgment against them has been rendered.

The following circumstances were present in Tijam: first, there was a statutory right in
favor of the claimant. Manila Surety had the right to question the Court of First Instance's
jurisdiction because it was the inferior courts that had authority to try cases that involved the
amount claimed. Second, the statutory right was not invoked. Manila Surety participated in the
trial and execution stages. It even sought relief from the Court of Appeals without questioning
the Court of First Instance's jurisdiction. Third, an unreasonable length of time had lapsed
before the claimant raised the issue of jurisdiction. It was only after the Court of Appeals
affirmed the Court of First Instance's order of execution did Manila Surety pursue the issue of
jurisdiction. Jurisdiction over collections for the amount involved was already determined by
law a month before the case was filed. Fifteen years had lapsed before the surety pointed this
out. Fourth, the claimant actively participated in the case and sought affirmative relief from the
court without jurisdiction. The unreasonable length of time was, therefore, inexcusable as the
claimant was apprised of the prevailing law, as well as all stages of the proceeding.

Calimlim v. Hon. Ramirez unequivocally ruled that it is only when the exceptional
instances in Tijam are present should estoppel by laches apply over delayed claims:

A rule that had been settled by unquestioned acceptance and upheld in decisions so
numerous to cite is that the jurisdiction of a court over the subject-matter of the action is a
matter of law and may not be conferred by consent or agreement of the parties. The lack of
jurisdiction of a court may be raised at any stage of the proceedings, even on appeal. This
doctrine has been qualified by recent pronouncements which stemmed principally from the
ruling in the cited case of Sibonghanoy. It is to be regretted, however, that the holding in said
case had been applied to situations which were obviously not contemplated therein. The
exceptional circumstance involved in Sibonghanoy which justified the departure from the
accepted concept of non-waivability of objection to jurisdiction has been ignored and, instead a
blanket doctrine had been repeatedly upheld that rendered the supposed ruling in Sibonghanoy
not as the exception, but rather the general rule, virtually overthrowing altogether the time-
honored principle that the issue of jurisdiction is not lost by waiver or by estoppel. DHITCc

Calimlim clarified the additional requirement that for estoppel by laches to be

appreciated against a claim for jurisdiction, there must be an ostensible showing that the
claimant had "knowledge or consciousness of the facts upon which it is based."

Figueroa v. People of the Philippines framed the exceptional character of Tijam:

The Court, thus, wavered on when to apply the exceptional circumstance in Sibonghanoy
and on when to apply the general rule enunciated as early as in De La Santa and expounded at
length in Calimlim. The general rule should, however, be, as it has always been, that the issue of
jurisdiction may be raised at any stage of the proceedings, even on appeal, and is not lost by
waiver or by estoppel. Estoppel by laches, to bar a litigant from asserting the court's absence or
lack of jurisdiction, only supervenes in exceptional cases similar to the factual milieu of Tijam v.
Sibonghanoy. Indeed, the fact that a person attempts to invoke unauthorized jurisdiction of a
court does not estop him from thereafter challenging its jurisdiction over the subject matter,
since such jurisdiction must arise by law and not by mere consent of the parties. This is
especially true where the person seeking to invoke unauthorized jurisdiction of the court does
not thereby secure any advantage or the adverse party does not suffer any harm. (Emphasis in
the original, citation omitted)

Thus, Tijam will only apply when given the circumstances of a case, allowing the belated
objection to the jurisdiction of the court will additionally cause irreparable damages, and
therefore, injustice to the other party that relied on the forum and the implicit waiver.

In Tijam, this Court ruled that long delay in raising lack of jurisdiction is unfair to the
party pleading laches because he or she was misled into believing that this defense would no
longer be pursued. A delay of 15 years in raising questions on subject matter jurisdiction was
appreciated by this Court as estoppel by laches.

In Metromedia Times Corporation v. Pastorin, this Court recognized the unfairness in

allowing a party who sought affirmative relief from a tribunal and invoked its jurisdiction to
later disavow the same jurisdiction upon passage of an adverse ruling. It ruled that raising lack
of jurisdiction over a subject matter a little under a year since a complaint is filed does not
amount to laches. cEaSHC

In Figueroa, this Court observed the injustice caused to the party pleading laches.
Restoration of and reparation towards the party may no longer be accomplished due to the
changes in his or her circumstances. Laches, however, was not appreciated as it was a mere
four (4) years since trial began that the petitioner in that case raised the issue of jurisdiction on
appeal.

In Bernardo v. Heirs of Villegas, this Court identified the propensity of litigants who, to
exhaust the time and resources of their opponents, will plead lack of jurisdiction only when an
unfavorable decision is obtained in order to re-litigate the case. The delay of 10 years in raising
jurisdictional issues in that case was appreciated as laches.

In summary, Tijam applies to a party claiming lack of subject matter jurisdiction when:

(1) there was a statutory right in favor of the claimant;

(2) the statutory right was not invoked;

(3) an unreasonable length of time lapsed before the claimant raised the issue of
jurisdiction;

(4) the claimant actively participated in the case and sought affirmative relief from the
court without jurisdiction;

(5) the claimant knew or had constructive knowledge of which forum possesses subject
matter jurisdiction;

(6) irreparable damage will be caused to the other party who relied on the forum and the
claimant's implicit waiver.

Tijam applies in this case. The allegations, determinative of subject matter jurisdiction,
were apparent on the face of the Complaint. The law that determines jurisdiction of the National
Housing Authority had been in place for more than a decade when the Complaint was filed. St.
Joseph Realty raised lack of jurisdiction in its Answer. Petitioners sought affirmative relief from
the Regional Trial Court and actively participated in all stages of the proceedings. Therefore,
there was no valid reason for petitioners to raise the issue of jurisdiction only now before this
Court.

III
 On the issue of the admissibility of the Ballado Spouses' testimonial and documentary
evidence, the Amoguis Brothers argue that it was unfair to fault them for not objecting when the
former's counsel started his direct examination without offering the purpose of the witnesses'
testimonies. Had they done so, it would alert the Ballado Spouses' counsel of the defect. Rule 132,
Sections 34 and 35 of the Rules of Court are mandatory, regardless if an opposing party timely
objected. The jurisprudence relied upon by the Court of Appeals is not applicable in this case as
People of the Philippines v. Alicante was a rape case and it was the 13-year-old victim's
testimony that was not offered. Meanwhile, this is a civil case. In Alicante, there was already a
sworn statement made by the victim before she took the stand; in this case, only Francisco
verified the Complaint, while Concepcion identified the documents and testified on their claims.
The Regional Trial Court judge could not have known the purpose of Concepcion's testimony.
The Ballado Spouses, on the other hand, reiterated that timely objections should have been
made. CTIEac

Rule 132, Sections 34 to 36 of the Rules of Court govern the manner of offering and
objecting to evidence:

Section 34. Offer of evidence. The court shall consider no evidence which has not been
formally offered. The purpose for which the evidence is offered must be specified.

Section 35. When to make offer. As regards the testimony of a witness, the offer must be
made at the time the witness is called to testify.

Documentary and object evidence shall be offered after the presentation of a party's
testimonial evidence. Such offer shall be done orally unless allowed by the court to be done in
writing.

Section 36. Objection. Objection to evidence offered orally must be made immediately after the
offer is made.

Objection to a question propounded in the course of the oral examination of a witness

shall be made as soon as the grounds therefor shall become reasonably apparent.

An offer of evidence in writing shall be objected to within three (3) days after notice of
the offer unless a different period is allowed by the court.

In any case, the grounds for the objections must be specified.

Following these provisions, a witness' testimony must be offered at the start, when he or
she takes the stand for the first time and before questions are propounded to him or her.
Documentary or object evidence, on the other hand, must be orally offered after the
presentation of a party's witnesses unless the court orders or allows that a written formal offer
is filed.

All evidence must be formally offered. Otherwise, the court cannot consider them. This
rule ensures that judges will carry out their constitutional mandate to render decisions that
clearly state the facts of cases and the applicable laws. Judgments must be based "only and
strictly upon the evidence offered by the parties to the suit." This rule also affords parties their
right to due process by examining the evidence presented by their opponent, and to object to its
presentation when warranted. SaCIDT

However, testimonial evidence not formally offered but not timely objected to by an
opposing party may be still be considered by the court. The purpose of offering a witness'
testimony is for the court to expertly assess whether questions propounded are relevant and
material, and if the witness is competent to answer. It is to aid the court in ruling over objections
made by opposing counsel. Catuira v. Court of Appeals was instructive:

The petition is devoid of merit. The reason for requiring that evidence be formally
introduced is to enable the court to rule intelligently upon the objection to the questions which
have been asked. As a general rule, the proponent must show its relevancy, materiality and
competency. Where the proponent offers evidence deemed by counsel of the adverse party to
be inadmissible for any reason, the latter has the right to object. But such right is a mere
privilege which can be waived. Necessarily, the objection must be made at the earliest
opportunity, lest silence when there is opportunity to speak may operate as a waiver of
objections.

Thus, while it is true that the prosecution failed to offer the questioned testimony when
private respondent was called to the witness stand, petitioner waived this procedural error by
failing to object at the appropriate time, i.e., when the ground for objection became reasonably
apparent the moment private respondent was called to testify without any prior offer having
been made by the proponent. Most apt is the observation of the appellate court:

While it is true that the prosecution failed to offer in evidence the testimony of the
complaining witness upon calling her to testify and that it was only after her testimony and after
the petitioner moved that it be stricken that the offer was made, the respondent Court did not
gravely err in not dismissing the case against the petitioner on the ground invoked. For, she
should have objected to the testimony of the complaining witness when it was not first offered
upon calling her and should not have waited in ambush after she had already finished testifying.
By so doing she did not save the time of the Court in hearing the testimony of the witness that
after all according to her was inadmissible. And for her failure to make known her objection at
the proper time, the procedural error or defect was waived. (Citations omitted)
 Catuira also discussed that litigation is not a game of surprises. Rules of procedure and
evidence are in place to ensure the smooth and speedy dispensation of cases. Where the
opposing party belatedly raises the technicality that the witnesses' testimonies were not
formally offered to "ambush" the party presenting them, the court may not expunge or strike
them out. cHECAS

Under the rules, a timely objection is a remedy available to petitioners. They waived their
right to this remedy when they waited until the case was submitted for resolution to do so.

The rules on examination of witnesses and objecting to them are not separate for civil
and criminal cases. A witness, whether in a criminal or civil case, is presented to support and
prove the allegations made by the party presenting him or her. The witness must be competent,
and his or her testimony must be relevant and material. Whether the case is civil or criminal,
objection or failure to offer the testimony of a witness must be made immediately.

As to the Ballado Spouses' documentary evidence, the Court of Appeals was correct to
consider only the contracts to sell. These were the only documents attached to the written
formal offer of evidence that they filed. Hence, these documents should be considered as the
only documentary evidence formally offered. When a party fails to formally offer his or her
documentary or object evidence within a considerable period after the presentation of
witnesses, he or she is deemed to have waived the opportunity to do so. The party, therefore, as
in this case, runs the risk of weakening his or her claim or defense.

IV

Petitioners argue that they are buyers in good faith, as determined by the Court of
Appeals. As innocent purchasers, reconveyance is no longer a feasible option against them
especially since they have introduced a multitude of improvements on the properties. They have
occupied the land since 1987. According to the Ballado Spouses, the Amoguis Brothers never
denied that they were buyers in bad faith. They testified that they told Epifanio that they had
bought the lands as the latter was destroying the fences they had put up and cut down the trees
they had planted. Despite protests from the Ballado Spouses, petitioners continued introducing
improvements over the properties.

In their Reply, petitioners argued that the finding of good faith by the Court of Appeals
can no longer be disturbed by the Ballado Spouses as they did not appeal the Court of Appeals
September 26, 2008 Decision. AHDacC

A buyer in good faith is one who purchases and pays fair price for a property without
notice that another has an interest over or right to it. If a land is registered and is covered by a
certificate of title, any person may rely on the correctness of the certificate of title, and he or she
is not obliged to go beyond the four (4) corners of the certificate to determine the condition of
the property. This rule does not apply, however,

when the party has actual knowledge of facts and circumstances that would impel a
reasonably cautious man to make such inquiry or when the purchaser has knowledge of a
defect or the lack of title in his vendor or of sufficient facts to induce a reasonably prudent man
to inquire into the status of the title of the property in litigation. (Citation omitted)

The Regional Trial Court ruled that petitioners were in bad faith because they did not
deny Francisco's testimony that he had informed them of his ownership when they occupied the
properties. Despite this, petitioners continued to make improvements on the lands. The Court of
Appeals, on the other hand, made a conflicting finding. It ruled that it was St. Joseph Realty that
made representations to the Amoguis Brothers and assured them that the previous buyers had
abandoned their purchase of the properties. It appreciated that the Amoguis Brothers found out
about the Ballado Spouses' claim only after they had bought them. Due to these conflicting
findings, this Court is compelled to review whether respondents were bad faith purchasers.

It is incumbent upon a buyer to prove good faith should he or she assert this status. This
burden cannot be discharged by merely invoking the legal presumption of good faith. This Court
rules that based on the evidence on record, petitioners failed to discharge this burden. Though
they were informed by Francisco on his claim to the properties only after their purchase, it is
undisputed from the records that mango and chico trees were planted on the properties, and
that they were cordoned off by barbed wires. St. Joseph Realty also informed them that there
were previous buyers, who allegedly abandoned their purchase. To merely claim that they were
buyers in good faith, absent any proof, does not make the case for them.

The Regional Trial Court found that petitioners were in bad faith. However, it did not
order their solidary liability with St. Joseph Realty. It ordered damages, attorney's fees, and the
cost of suit to be borne by St. Joseph Realty alone. The modification in this regard made by the
Court of Appeals was, therefore, superfluous.

WHEREFORE, the Petition for Review is DENIED. The Court of Appeals' September 26,
2008 Decision and August 7, 2009 Resolution in CA-G.R. CV No. 73758-MIN are hereby
AFFIRMED. IDSEAH

SO ORDERED.

Leonardo-de Castro, Bersamin, A.B. Reyes, Jr. and Gesmundo, JJ., concur.