G.R. No.

166836               September 4, 2013

SAN MIGUEL PROPERTIES, INC., PETITIONER,
vs.
SEC. HERNANDO B. PEREZ, ALBERT C. AGUIRRE, TEODORO B. ARCENAS, JR.,
MAXY S. ABAD, JAMES G. BARBERS, STEPHEN N. SARINO, ENRIQUE N.
ZALAMEA, JR., MARIANO M. MARTIN, ORLANDO O. SAMSON, CATHERINE R.
AGUIRRE, AND ANTONIO V. AGCAOILI, RESPONDENTS.
The pendency of an administrative case for specific performance brought by the
buyer of residential subdivision lots in the Housing and Land Use Regulatory Board
(HLURB) to compel the seller to deliver the transfer certificates of title (TCTs) of the
fully paid lots is properly considered a ground to suspend a criminal prosecution for
violation of Section 25 of Presidential Decree No. 957 on the ground of a prejudicial
question. The administrative determination is a logical antecedent of the resolution of
the criminal charges based on non-delivery of the TCTs.
FACTS:
Petitioner San Miguel Properties (SMP) purchased from BF Homes Inc.,
represented by Atty. Orendain as its duly authorized rehabilitation receiver, 130
residential lots in its subdivision in BF Homes Parañaque. However, 20 TCTs (out of
40) were withheld delivery by BF Homes since Atty. Orendain had ceased to be its
rehabilitation receiver at the time of the transactions;; BF Homes refused to deliver the
TCTs despite demands. Because of this, August 15, 2000 SMP filed a complaint-
affidavit in the Office of the Prosecutor (OCP) of Las Pinas charging respondent
directors and officers of BF Homes with non-delivery of titles in violation of Sec. 25 in
relation to Sec. 29 both of PD No. 957 (The Subdivision and Condominium Buyers’
Protective Decree). Simultaneously, SMP sued BF Homes for specific performance in
the HLURB praying to compel BF Homes to release the 20 TCTs in its favor.
The OCP dismissed SMP’s criminal complaint for violation of PD No. 957 on the
ground, among others, that there existed a prejudicial question necessitating the
suspension of the criminal action until after the issue on the liability of the distressed
BF Homes was first determined by the SEC en banc or by the HLURB. SMP appealed
the resolution of the OCP to the DOJ, which denied the same. Upon elevation of the
case to the CA via Petition for Certiorari and Mandamus, SMP submitted the issue of
whether or not HLURB Case presented a prejudicial question that called for the
suspension of the criminal action for violation of PD No. 957. CA dismissed SMP’s
petition.

ISSUE:
Whether the HLURB administrative case for specific performance could be a reason to
suspend the proceedings on the criminal complaint for the violation of PD No. 957 on
the ground of a prejudicial question.
HELD:
YES, an action for specific performance, even if pending in the HLURB, an
administrative agency, raises a prejudicial question that must first be determined
before the criminal case for violation of Sec. 25 of PD No. 957 could be resolved. 
Prejudicial question is that which arises in a case, the resolution of which is a
logical antecedent of the issue involved in the criminal case, and the cognizance of
which pertains to another tribunal. It is determinative of the criminal case, but the
jurisdiction to try and resolve it is lodged in another court or tribunal. It is based on a
fact distinct and separate from the crime but is so intimately connected with the crime
that it determines the guilt or innocence of the accused. The rationale behind the
principle of prejudicial question is to avoid conflicting decisions.
The concept of a prejudicial question involves a civil action and a criminal
case.
Yet, contrary to SMP’s submission that there could be no prejudicial question to
speak of because no civil action where the prejudicial question arose was pending, the
action for specific performance in the HLURB raises a prejudicial question that
sufficed to suspend the proceedings determining the charge for the criminal violation
of PD No. 957. This is true simply because the action for specific performance was an
action civil in nature but could not be instituted elsewhere except in the HLURB,
whose jurisdiction over the action was exclusive and original. The determination of
whether the proceedings ought to be suspended because of a prejudicial question
rested on whether the facts and issues raised in the pleadings in the specific
performance case were so related with the issues raised in the criminal complaint for
the violation of PD No. 957, such that the resolution of the issues in the former would
be determinative of the question of guilt in the criminal case.
Here, the action for specific performance in the HLURB would determine
whether or not SMP was legally entitled to demand the delivery of the remaining 20
TCTs, while the criminal action would decide whether or not BF Homes’ directors and
officers were criminally liable for withholding the 20 TCTs. The resolution of the former
(admin case) must obviously precede that of the latter, for should the HLURB hold
SMP to be not entitled to the delivery of the 20 TCTs because Atty. Orendain did not
have the authority to represent BF Homes in the sale due to his receivership having
been terminated by the SEC, the basis for the criminal liability for the violation of Sec.
25 of PD No. 957 would evaporate, thereby negating the need to proceed with the
criminal case.
Hence, the Secretary of Justice did not commit grave abuse of discretion in
upholding the dismissal of SMP’s criminal complaint for violation of PD No. 957 for
lack of probable cause and for reason of a prejudicial question
Worthy to note at this juncture is that a prejudicial question need not
conclusively resolve the guilt or innocence of the accused. It is enough for the
prejudicial question to simply test the sufficiency of the allegations in the information
in order to sustain the further prosecution of the criminal case. A party who raises a
prejudicial question is deemed to have hypothetically admitted that all the essential
elements of the crime have been adequately alleged in the information, considering that
the Prosecution has not yet presented a single piece of evidence on the indictment or
may not have rested its case. A challenge to the allegations in the information on the
ground of prejudicial question is in effect a question on the merits of the criminal charge
through a non-criminal suit.
Another contention of SMP:
SMP further submits that respondents could not validly raise the prejudicial
question as a reason to suspend the criminal proceedings because respondents had
not themselves initiated either the action for specific performance or the criminal
action. It contends that the defense of a prejudicial question arising from the filing of a
related case could only be raised by the party who filed or initiated said related case.
The submission is unfounded. The rule on prejudicial question makes no distinction as
to who is allowed to raise the defense. Ubi lex non distinguit nec nos distinguere
debemos. When the law makes no distinction, we ought not to distinguish.
2. Doctrine of primary jurisdiction is applicable

That the action for specific performance was an administrative case pending in the
HLURB, instead of in a court of law, was of no consequence at all. As earlier
mentioned, the action for specific performance, although civil in nature, could be
brought only in the HLURB. This situation conforms to the doctrine of primary
jurisdiction. There has been of late a proliferation of administrative agencies, mostly
regulatory in function. It is in favor of these agencies that the doctrine of primary
jurisdiction is frequently invoked, not to defeat the resort to the judicial adjudication
of controversies but to rely on the expertise, specialized skills, and knowledge of such
agencies in their resolution. The Court has observed that one thrust of the
proliferation is that the interpretation of contracts and the determination of private
rights under contracts are no longer a uniquely judicial function exercisable only by
the regular courts.31
The doctrine of primary jurisdiction has been increasingly called into play on
matters demanding the special competence of administrative agencies even if such
matters are at the same time within the jurisdiction of the courts. A case that requires
for its determination the expertise, specialized skills, and knowledge of some
administrative board or commission because it involves technical matters or intricate
questions of fact, relief must first be obtained in an appropriate administrative
proceeding before a remedy will be supplied by the courts although the matter comes
within the jurisdiction of the courts. The application of the doctrine does not call
for the dismissal of the case in the court but only for its suspension until after
the matters within the competence of the administrative body are threshed out and
determined.
To accord with the doctrine of primary jurisdiction, the courts cannot and will
not determine a controversy involving a question within the competence of an
administrative tribunal, the controversy having been so placed within the special
competence of the administrative tribunal under a regulatory scheme. In that
instance, the judicial process is suspended pending referral to the administrative body
for its view on the matter in dispute. Consequently, if the courts cannot resolve a
question that is within the legal competence of an administrative body prior to the
resolution of that question by the latter, especially where the question demands the
exercise of sound administrative discretion requiring the special knowledge,
experience, and services of the administrative agency to ascertain technical and
intricate matters of fact, and a uniformity of ruling is essential to comply with the
purposes of the regulatory statute administered, suspension or dismissal of the action
is proper.