In Moldex Realty, Inc. v. Housing and Land Use Regulatory Board, the Supreme Court addressed who is responsible for paying the electricity bills for streetlights in a subdivision. The Court ruled that while the Housing and Urban Development Coordinating Council (HUDCC) Resolution No. R-562 initially mandated developers to pay for these bills until the facilities were turned over to the local government, a subsequent resolution, Board Resolution No. 699, amended this rule. This later resolution shifted the responsibility for these costs to the homeowners. The Court ultimately dismissed the case, deeming it moot due to the amendatory provision which had already taken effect, highlighting the importance of current regulations in resolving such disputes.

Power Play: When Subdivision Developers and Homeowners Clash Over Electricity Bills

The case arose from a dispute between Moldex Realty, Inc., the developer of Metrogate Complex Phase I, and the Metrogate Complex Village Homeowners’ Association. After initially subsidizing the costs of the streetlights, Moldex Realty decided to stop paying the electric bills, leading the homeowners’ association to seek an injunction from the Housing and Land Use Regulatory Board (HLURB). The HLURB initially sided with the homeowners, citing HUDCC Resolution No. R-562, which required developers to maintain streetlights and pay the bills until the subdivision’s facilities were turned over to the local government. Moldex Realty challenged this decision, arguing that the HUDCC resolution was unconstitutional.

The central legal question was whether HUDCC Resolution No. R-562 was a valid exercise of legislative power and whether it rightfully placed the burden of paying for the streetlights on the developer. This question involved examining the scope of authority delegated to the HUDCC and determining whether the resolution infringed upon the rights of the developer. However, the landscape shifted when HUDCC approved Board Resolution No. R-699, series of 2001, entitled Amending the Rules and Regulations Implementing the Subdivision and Condominium Buyer’s Protective Decree and Other Related Laws, during the pendency of the case.

Respondent association raised the issue of the petition being filed beyond the 60-day reglementary period, arguing that the prior filing of a petition for certiorari with the Court of Appeals did not toll the running of the 60-day period. Petitioner countered that the constitutional issue was raised at the earliest opportunity. The Supreme Court clarified that a party may raise the unconstitutionality or invalidity of an administrative regulation on every occasion that the regulation is being enforced. The Court noted that the injury caused to the petitioner due to the implementation of the HUDCC Resolution was continuous, thus a new cause of action to question its validity accrues each time petitioner is directed to comply with the resolution. Therefore, the petition was not time-barred, as the question of constitutionality had already been raised in the petition filed with the Court of Appeals.

Furthermore, the Solicitor General argued that the Regional Trial Court, not the Supreme Court or the Court of Appeals, had jurisdiction to take cognizance of this original action for certiorari and prohibition, citing Section 4, Rule 65 of the Rules of Court. The Supreme Court clarified its appellate jurisdiction over cases involving the constitutionality of a statute, treaty, or regulation. It emphasized that lower courts also have the jurisdiction to resolve constitutional issues at the first instance, especially when the case does not involve circumstances of paramount importance affecting the social, economic, and moral well-being of the people. The Court of Appeals, therefore, erred in ruling that the question of constitutionality could only be brought to the Supreme Court.

The Court also invoked the principle that a constitutional question should only be addressed if it is the very lis mota of the case, meaning the essential cause of action. However, in this case, the subsequent enactment of Board Resolution No. 699, series of 2001, which amended the rules regarding the payment of electricity costs for streetlights, rendered the question of constitutionality unpivotal. The amendatory provision superseded the earlier HUDCC Resolution No. R-562, series of 1994. Consequently, the Court considered the petition to have become moot and academic.

Finally, the Court highlighted a critical procedural flaw. The HUDCC, the issuing body of the assailed resolution, was not impleaded as a party in the case. The Court emphasized that an indispensable party is a party in interest without whom no final determination can be had of an action, and who shall be joined either as plaintiffs or defendants. The absence of an indispensable party renders all subsequent actions of the court null and void, as it deprives the court of the authority to act. In this case, however, remand was not feasible because the initial action failed to observe the hierarchy of courts principle. Thus, the petition was dismissed.

The Supreme Court based its decision on the following grounds:

• The principle of hierarchy of courts.
• The case had become moot and academic due to the subsequent enactment of Board Resolution No. 699.
• The failure to implead the HUDCC, an indispensable party to the case.

This case illustrates the importance of adhering to procedural rules, such as impleading indispensable parties and observing the hierarchy of courts. It also underscores how changes in regulations can render a case moot, highlighting the need for legal challenges to be timely and based on current law. By failing to implead the HUDCC, Moldex Realty effectively deprived the Court of the ability to render a fully binding decision, and the subsequent change in regulations further undermined its position.

FAQs

What was the key issue in this case?	The key issue was determining who should pay for the electricity costs of streetlights in the Metrogate Complex Phase I subdivision, specifically whether the developer, Moldex Realty, or the homeowners’ association should bear this responsibility. The case also questioned the constitutionality of HUDCC Resolution No. R-562.
What is HUDCC Resolution No. R-562?	HUDCC Resolution No. R-562, series of 1994, initially stipulated that subdivision owners/developers should maintain streetlights and pay the electric bills until the facilities were turned over to the local government. This resolution was later amended by Board Resolution No. 699.
What is Board Resolution No. 699?	Board Resolution No. 699, series of 2001, amended the rules and regulations implementing the Subdivision and Condominium Buyer’s Protective Decree. It superseded HUDCC Resolution No. R-562 by shifting the responsibility for electricity costs of streetlights to the homeowners.
Why was the case dismissed by the Supreme Court?	The Supreme Court dismissed the case primarily because it became moot and academic due to the enactment of Board Resolution No. 699, which changed the regulation in question. Additionally, the HUDCC, an indispensable party, was not impleaded in the case.
What does it mean to implead an indispensable party?	Impleading an indispensable party means including them in the legal proceedings because their presence is crucial for a fair and complete resolution of the case. Without their participation, the court’s judgment cannot attain real finality.
What is the hierarchy of courts principle?	The hierarchy of courts principle generally requires that cases should be filed first with the lower courts, such as the Regional Trial Court, before elevating them to higher courts like the Court of Appeals or the Supreme Court, unless there are exceptional circumstances.
What is a moot and academic case?	A case is considered moot and academic when it no longer presents a justiciable controversy because of an event that has already occurred, making any court ruling practically unenforceable or without any useful purpose.
What is lis mota?	Lis mota refers to the primary or fundamental cause of action in a case. The Court typically avoids addressing constitutional questions unless they are the central issue in the dispute.

This case underscores the importance of understanding current regulations and adhering to proper legal procedures when bringing a case to court. Changes in administrative rules can significantly impact ongoing disputes, and failure to include necessary parties can result in the dismissal of a case.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: Moldex Realty, Inc. vs. Housing and Land Use Regulatory Board, G.R. No. 149719, June 21, 2007