Civil Law, Political Law

UCPB vs. UY G.R. No. 204039 January 10, 2018 The doctrine of Stare Decisis


Spouses Walter and Lily Uy (respondents) entered into a Contract to Sell with Prime Town Property Group, Inc.(PPGI) for a unit in Kiener Hills Mactan Condominium Project. The total contract price amounted to ₱1, 151,718. 7 5 payable according to the following terms: (a) ₱l00,000.00 as down payment; and (b) the balance paid in 40 monthly installments at ₱26,297.97 from 16 January 1997 to 16 April 2000.


PPGI transferred the right to collect the receivables of the buyers, which included respondents, of units in Kiener Hills to UCPB as PPGI’s partial settlement of its loan with UCPB.


Respondents filed a complaint before the the Housing and Land Use Regulatory Board Regional Office (HLURB Regional Office) for sum of money and damages against PPGI and UCPB. They claimed that in spite of their full payment of the purchase price, PPGI failed to complete the construction of their units in Kiener Hills.


The HLURB Regional Office found that respondents were entitled to a refund in view of PPGI’ s failure to complete the construction of their units. Nonetheless, it found that UCPB cannot be solidarily liable with PPGI because only the accounts receivables were conveyed to UCPB and not the entire condominium project.


Respondents appealed before the HLURB-Board of Commissioners.


The HLURB Board reversed and set aside the HLURB Regional Office decision. It agreed that the proceedings against PPGI should be suspended on account of its corporate rehabilitation. Nevertheless, the HLURB Board found UCPB solidarily liable with PPGI because it stepped into the latter’s shoes insofar as Kiener Hills is concerned pursuant to the MOA between them. It noted that UCPB was PPGI’s successor-in-interest, such that the delay in the completion of the condominium project could be attributable to it and subject it to liability. The HLURB Board ruled that as PPGI’s assignee, UCPB was bound to refund the payments made, without prejudice to its right of action against PPGI.


On appeal, the OP affirmed the decision of the HLURB Board.


UCPB appealed before the CA, which affirmed with modification the OP decision. While the appellate court agreed that respondents are entitled to a full refund of the payments they may have made, it ruled that UCPB is not solidarily liable with PPGI, and as such cannot be held liable for the full satisfaction of respondents’ payments. It limited UCPB’s liability to the amount respondents have paid upon the former’s assumption as the party entitled to receive payments.

UCPB moved for reconsideration but it was denied by the CA



Whether or not the assailed CA decision had become final and executory after respondents failed to appeal the same.


It must be remembered that when a case is appealed, the appellate court has the power to review the case in its entirety. In Heirs of Alcaraz v. Republic of the Phils., the Court explained that an appellate court is empowered to make its own judgment as it deems to be a just determination of the case, to wit:


In any event, when petitioners interposed an appeal to the Court of Appeals, the appealed case was thereby thrown wide open for review by that court, which is thus necessarily empowered to come out with a judgment as it thinks would be a just determination of the controversy. Given this power, the appellate court has the authority to either affirm, reverse or modify the appealed decision of the trial court. To withhold from the appellate court its power to render an entirely new decision would violate its power of review and would, in effect, render it incapable of correcting patent errors committed by the lower courts.


Thus, when UCPB appealed the present controversy before the Court, it was not merely limited to determine whether the CA accurately set UCPB’s liability against respondents. It is also empowered to determine whether the appellate court’s determination of liability was correct in the first place. This is especially true considering that the issue of the nature of UCPB’s liability is closely intertwined and inseparable from the determination of the amount of its actual liability.


Stare Decisis applies only to cases decided by the Supreme Court.


As above-mentioned, respondents bewail the reliance of the CA on 0 ‘Halloran arguing that it was not a binding precedent since it was not issued by this Court. In De Mesa v. Pepsi-Cola Products Phils. Inc., the Court explained that the doctrine of stare decisis deems decisions of this Court binding on the lower courts, to wit:


The principle of stare decisis et non quieta movere is entrenched in Article 8 of the Civil Code, to wit:

x x x x

It enjoins adherence to judicial precedents. It requires our courts to follow a rule already established in a final decision of the Supreme Court. That decision becomes a judicial precedent to be followed in subsequent cases by all courts in the land.


The doctrine of stare decisis is based on the principle that once a question of law has been examined and decided, it should be deemed settled and closed to further argument.


In other words, the doctrine of stare decisis becomes operative only when judicial precedents are set by pronouncements of this Court to the exclusion of lower courts. It is true regardless whether the decisions of the lower courts are logically or legally sound as only decisions issued by this Court become part of the legal system. At the most, decisions of lower courts only have a persuasive effect. Thus, respondents are correct in contesting the application of the doctrine of stare decisis when the CA relied on decisions it had issued.


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