PREFATORY STATEMENT

Manifest disregard of the basic rules and procedures

constitutes a grave abuse of discretion 1. Obstinate disregard of basic
and established rule of law or procedure amounts to “evasion of a
positive duty or to a virtual refusal to perform a duty enjoined by
law, or to act at all in contemplation of law,” or in essence, grave
abuse of discretion amounting to lack of jurisdiction 2. Judges must
know the laws and apply them properly in good faith as judicial
competence requires no less3.

Public Respondent’s failure to address and obstinate disregard

of the effect of the passage of the Republic Act No. 9646, otherwise
known as the “Real Estate Service Act of the Philippines” (“RESA
Law”) in the enforcement of the Decision dated 28 October 2013
(the “RTC Decision”) rendered by the Regional Trial Court of
Parañaque City, Branch 274 (“RTC Parañaque”), as modified by the
Supreme Court’s Decision dated 29 January 2020 (the “SC
Decision”) is tantamount to grave abuse of discretion amounting to
lack of jurisdiction.

The instant case originated from real estate transactions

covering properties of Petitioner located in Las Piñas City and
Cavite. Private Respondents claim purported entitlement to broker’s
fees for supposedly performing services as brokers in relation to
said properties sometime in 2000. This was prior to the enactment
of the RESA Law.

Private Respondents sought judicial relief before RTC

Parañaque and the RTC Decision was rendered in their favor.
Eventually, the parties went before the Supreme Court which
issued the SC Decision also in Private Respondents’ favor and
broker’s fees in the amount of Eleven Million Eight Hundred Eighty
One Thousand Nine Hundred Fifteen and 50/100 (P11,881,915.50)
was awarded in their favor, among other monetary awards. Private
Respondents, in their submissions and representations before the

1
Crisologo vs. JEWM Agro-Industrial Corporation, G.R. No. 196894, 03 March 2014.
2
Id.
3
Id.
Regional Trial Court, the Court of Appeals, and the Supreme Court,
consistently represented themselves as having the qualifications to
act as licensed real estate brokers and gave no indication to believe
otherwise. The SC Decision became final and executory on 27
January 2021.

Petitioner is of the position that Private Respondents only

became entitled to “broker’s fees” on the date of finality of the RTC
Decision, as amended by the SC Decision. At this time, the RESA
Law, which was signed into law on 29 June 2009, is already in
effect.

Paragraph 2, Section 31 of RESA Law makes it illegal to pay

broker’s fees to unlicensed real estate brokers:

“No salesperson shall be entitled to receive or

demand a fee, commission or compensation of any kind
from any person, other than the duly licensed real
estate broker who has direct control and supervision
over him, for any service rendered or work done by such
salesperson in any real estate transaction.”

Section 39 of the RESA Law further provides that violation of

the aforementioned provisions, among others, carries with it the
penalty of fine, imprisonment or both:

“Section 39. Penal Provisions. - Any violation of

this Act, including violations of implementing rules
and regulations, shall be meted the penalty of a fine
of not less than One hundred thousand pesos
(P100,000.00) or imprisonment of not less than two
(2) years, or both such fine and imprisonment upon the
discretion of the court. In case the violation is
committed by an unlicensed real estate service
practitioner, the penalty shall be double the aforesaid
fine and imprisonment.” (Emphasis and underscoring
supplied)
 The RESA Law does not distinguish whether the brokering
services was rendered prior to the enactment of the RESA Law. It
does not distinguish as to whether the transaction occurred before
or after the passage of the RESA Law. Thus, the RESA Law applies
to transactions that are payable after the passage of the said law,
even if the same transaction happened prior to the enactment of the
same. If payment for broker’s fees is being demanded during the
effectivity of the RESA Law, then the purported brokers must be
duly licensed brokers before they can be paid broker’s fees.

Sometime in 2022, Petitioner initiated negotiations with

Private Respondents, through the latter’s counsels, for possible
settlement of the judgment award. To ensure compliance with the
RESA Law and to avoid possible penal sanctions for violation
thereof, Petitioner included the presentation of Private Respondents’
respective broker’s licenses as one of the conditions for settlement.
However, Respondents were not able to produce their duly issued
and updated broker’s license. Consequently, the negotiations did
not materialize. Private Respondents later filed their Motion for
Execution4.

Initially, Petitioner filed an Opposition (To Plaintiffs’ Motion for

Execution dated 06 June 2022) with Motion to Consider Obligation as
Discharged or Extinguished dated 21 June 2022 (“Opposition with
Motion to Consider Obligation as Discharged”). However, upon
receipt of the Public Respondent’s Order dated 09 June 2022,
Petitioner filed his Motion for Reconsideration (Of the Order Dated 09
June 2022) dated 22 June 2022.

In the said motions, Petitioner sought to have the obligation

considered as discharged since it is legally impossible and illegal to
pay brokers fees to persons who are not duly licensed brokers.
Petitioner squarely and clearly put the issue of the legal
impossibility of payment in said motions. The pertinent portions of
Petitioner’s Opposition with Motion to Consider Obligation as
Discharged is quoted hereunder for easy reference:

4
Annex “C” hereof.
 “14. Article 1266 of the Civil Code contemplates two
impossibilities, (1) legal impossibility, and (2) physical
impossibility, which releases the debtor in the
performance of its obligations:

“Article 1266. The debtor in obligations to

do shall also be released when the prestation
becomes legally or physically impossible
without the fault of the obligor.”

15. There is legal impossibility “when the act, by

reason of a subsequent law, is prohibited; for instance, in
an obligation to render services as an entertainer in a
night club, a subsequent law or ordinance prohibits the
employment of entertainers in night clubs. In both cases,
the obligation is extinguished.5” In other words, a debtor
must be considered released from its obligation “wherein,
after the contract is made, performance is rendered
impossible by paramount authority. This includes
changes in statutes or organic law, the decrees of courts,
and the executive acts of state or their political
subdivision.6”

16. A debtor may be considered released from

his/her obligation if there occurs an impossibility which
supervenes at the time of performance, which brings
about the extinguishment of the obligation. 7

17. In McConn vs. Haragan8, the Supreme Court

released the surety company from its obligation on the
surety bond to the plaintiff citing Article 1266 of the Civil
Code. The Supreme Court, affirming the decision of the
lower court, ruled:
5
Commentaries and Jurisprudence on the Civil Code of the Philippines, Arturo M. Tolentino
(1993).
6
Supervising Impossibility of Performance as a Defense, 5 Fordham L. Rev. 322 (1936).
7
Commentaries and Jurisprudence on the Civil Code of the Philippines, Arturo M. Tolentino
(1993).
8
G.R. No. L-16550, 31 January 1962.
 “[A]s the terms of the bond so state, it
appears clearly that the bond will only answer
for the judgment which may be rendered
against defendant, should he (defendant
Haragan) fail to return to the Philippines. In
other words, if defendant Haragan should
return to the Philippines on or before
September 16, 1955, said bond will not
answer for the judgment. It is now the
contention of the Associated Insurance that
since it was the Republic of the Philippines
(obligee under the bond) who rendered the
return of defendant Haragan to the
Philippines impossible, said surety
company is thereby released from its
obligation, and cites in support thereof
Articles 1266 and 2076 of the New Civil
Code. Upon a consideration of this contention,
the Court finds it tenable and well grounded,
for as the surety company has so well stated
‘where the principal obligation (of returning
to the Philippines) has been extinguished by
the action of the obligee, Philippine
Government, in preventing such return, the
accessory obligation of the surety is
likewise extinguished and the bond released
of its liability.’ Paraphrasing the last
paragraph of the bond in a negative way, it will
read thus: ‘should he (not) fail to do so, said
bond will (not) answer pro tanto  for any
judgment that may be rendered against him. 9”
(Emphasis supplied)

18. In Philippines National Construction Corp. v.

National Labor Relations Commission10, the Supreme
Court released the petitioner Philippines National
9
Id.
10
G.R. No. 78603, 28 January 1991.
 Construction Corp. from its obligation to pay the wages of
private respondent under the second contract of
employment because private respondent’s Residence and
Work permit was refused by the contractor in Saudi
Arabia, pursuant to said country’s laws. Thus, the Court
ruled:

“[A]n obligor shall be released from his

obligation when the prestation has become
legally or physically impossible without fault
on his part. The supervening impossibility of
performance, based upon some factor
independent of the will of the obligor,
releases the obligor from his obligation after
restitution of what he may have received, if
any, in advance from the other contracting
party; the obligor incurs no liability for
damages for his inability to perform.11”
(Emphasis supplied)

19. Where the performance of an obligation is

prevented by a supervening change of law, the debtor is
discharged.12 In Louisville & Nashville Railroad vs.
Mottley13, the defendants Mottley were injured in a
railway accident. To settle their claims, plaintiffs, gave
them lifetime railway passes for free transportation.
Decades later, Congress made free passes unlawful.
Thus, plaintiffs refused to honor defendant’s passes
citing the new federal legislation. The Court, inter alia,
ruled that the legislation enacted by Congress eradicated
any form of discrimination in transportation rates and
that the legislation applied to existing contracts and
rendered those which were discriminatory illegal.14 Thus,
therein plaintiffs were released from their obligation to
honor the lifetime railway passes of the defendants.

11
Id.
12
219 U. S. 467 (1910).
13
Id.
14
Id.
 “[A]s the contract of Mottley and wife with
the railroad company was originally valid, it
cannot be supposed that Congress intended by
the Act of 1906 to annul or prevent its
enforcement. But the purpose of Congress was
to cut up by the roots every form of
discrimination, favoritism, and inequality
except in the cases of certain excepted classes
to which Mottley and his wife did not belong,
and which exceptions rested upon peculiar
grounds. Manifestly, from the face of the
Commerce Act itself, Congress, before taking
final action, considered the question as to
what exceptions, if any, should be made in
respect of the prohibition of free tickets, free
passes, and free transportation. It solved the
question when, without making any
exceptions of existing contracts, it forbade by
broad, explicit words any carrier to charge,
demand, collect, or receive a ‘greater or less or
different compensation’ for any services in
connection with the transportation of
passengers or property than was specified in
its published schedules of rates. The Court
cannot add an exception based on equitable
grounds when Congress forbore to make such
an exception.15”

20. A supervening change in law which renders

illegal the unauthorized practice of real estate service
without acquiring the proper license under the RESA
Law makes the compliance with the Honorable Court’s
Decision legally impossible. Therefore, Defendants should
be released from its obligation to pay broker’s fees to the
Plaintiffs because of the legal impossibility to comply with
said obligation.

15
Id.
 21. The leading case of Remman Enterprises, Inc v.
Professional Regulatory Board of Real Estate Service 16
explains that the policy behind the RESA Law is to
“provide institutionalized government support for the
development of a corps of highly respected, technically
competent, and disciplined real estate service
practitioners, knowledgeable of internationally accepted
standards and practice of the profession.17”

“[T]he legislature recognized the

importance of professionalizing the ranks
of real estate practitioners by increasing their
competence and raising ethical standards
as real property transactions are
susceptible to manipulation and corruption,
especially if they are in the hands of
unqualified persons working under an
ineffective regulatory system.18” (Emphasis
supplied)

22. The RESA Law was enacted to strengthen its

predecessor, Memorandum Order No. 39 of the
Department of Trade and Industry, which avowed
purpose is, among others, to protect the public from
dishonest or incompetent salesmen, brokers, appraisers
and consultants19. Respectfully, to compel Defendants to
pay the Plaintiffs “broker’s fees” when in fact they are
unlicensed real estate brokers goes against the protection
afforded to Defendants from such dishonest or
incompetent persons.

23. To reiterate, performance by the Defendants of

their obligation under the Honorable Court’s Decision to
pay broker’s fees to the unlicensed Plaintiffs has been
16
G.R. No 197676, 04 February 2014.
17
Id.
18
Id.
19
Section 1, Article 1 of Memorandum Order No. 39.
 rendered impossible. To do so would be in violation of the
RESA Law. Given the legal impossibility to comply with
the same, due to the supervening changes in the law
prohibiting and penalizing the unauthorized practice of
real estate service without acquiring the proper license
under the law, Defendants’ obligation should be deemed
discharged or extinguished.”20

Despite the foregoing, Public Respondent, in her Orders dated

09 June 2022 and 02 September 2022 (the “Assailed Orders”)
denied Petitioner’s Motions based solely on the doctrine of
immutability of judgment which is not applicable in the instant
case. In effect, Public Respondent sanctions the violation of the
RESA Law.

To be clear, Petitioner, in the aforementioned motions, does

not question the merits of the RTC and SC Decision. Petitioner
merely raised the issue on the legal impossibility of compelling
Petitioner to pay broker’s fees to Private Respondents who are
unlicensed brokers. Therefore, Public Respondent’s reliance to the
doctrine of immutability of judgment is unavailing in the instant
case.

Worse, Public Respondent made a sweeping generalization in

the Order dated 02 September 2022 when she merely stated that
“Defendant’s Opposition and Motion to consider the obligation as
discharged based on RESA Law is without merit.” Public
Respondent did not even provide any legal basis for arriving at her
conclusion.

Regrettably, Public Respondent failed to consider the passage

of the RESA Law and Petitioner’s recent discovery that Private
Respondents are unlicensed real estate brokers. These special or
compelling circumstances, which constitute as exception to the
doctrine of immutability of judgment, would render the execution
of the RTC Decision as modified by the SC Decision as legally

20
Paragraphs 14 to 23, Pages 5 to 9 of the Opposition (To Plaintiffs’ Motion for Execution dated
06 June 2022) with Motion to Consider Obligation as Discharged or Extinguished dated 21 June
2022.
impossible and in effect, would circumvent and undermine the
RESA Law.

Indubitably, Public Respondent committed grave abuse of

discretion because, in completely disregarding the applicability of
the RESA Law in the instant case, she miserably failed to discuss
or even attempt to discuss the substantive merits of the issue on
the legal impossibility of Petitioner’s compliance with the RTC and
SC Decision under the RESA Law. Public Respondent failed to
discuss why the legal impossibility of Petitioner’s obligation to pay
broker’s fees to unlicensed brokers is not an exception to the said
doctrine.

Thus, Public Respondent also acted with grave abuse of

discretion amounting to lack of jurisdiction when she issued the
Assailed Orders in complete disregarded of the basic and
established constitutional requirement21 and procedural rule22 that
court orders shall state clearly and distinctly the facts and the law
on which it is based.

21
Section 14, Article VIII of the 1987 Constitution.
22
Section 1, Rule 36 of the Rules of Court.