DE CASTRO, ARNOLD V. Student No.

1601728 Jd 4

CASE DIGEST

REMMAN ENTERPRISES, INC. & CHAMBER OF REAL ESTATE AND

BUILDERS'ASSOCIATION v. PROFESSIONAL REGULATORY BOARD OF REAL
ESTATE SERVICE and PROFESSIONAL REGULATION COMMISSION,
G.R. No. 197676, February 4, 2014

FACTS:

Former President Gloria Arroyo signed into law R.A. No. 9646, otherwise known as the
"Real Estate Service Act of the Philippines" which aims to professionalize the real
estate service sector under a regulatory scheme of licensing, registration and
supervision of real estate service practitioners in the country. Prior to its enactment, real
estate service practitioners were under the supervision of the Department of Trade and
Industry (DTI) through the Bureau of Trade Regulation and Consumer Protection
(BTRCP), which authority is now transferred to the Professional Regulation Commission
(PRC) through the Professional Regulatory Board of Real Estate Service (PRBRES)
created under said new law. The IRR of R.A. No. 9646 were also promulgated.
Thereafter, petitioners instituted a Civil Case to declare as void and unconstitutional
Sections 28 (a), 29, and 32 of the R.A. No. 9646 in the RTC of Manila, Br. 42. The
contentions of petitioners were, to wit: a.) said law violates Article VI, Section 26 (1) of
the Constitution which mandates that every bill passed by Congress shall embrace only
one subject which shall be expressed in the title thereof; b.) it is in direct conflict with EO
No. 648 which transferred the exclusive jurisdiction of the National Housing Authority
(NHA) to regulate the real estate trade and business to the Human Settlements
Commission, now the Housing and Land Use Regulatory Board (HLURB), which
authority includes the issuance of license to sell of subdivision owners and developers
pursuant to PD No. 957; c.) it violates the due process clause as it impinges on the real
estate developers’ most basic ownership rights, the right to use and dispose property;
and d) Section 28(a) of R.A. No. 9646 violates the equal protection clause as no
substantial distinctions exist between real estate developers and the exempted group
mentioned since both are property owners dealing with their own property. Additionally,
petitioners contended that the lofty goal of nurturing and developing a "corps of
technically competent, reasonable and respected professional real estate service
practitioners" is not served by curtailing the right of real estate developers to conduct
their business of selling properties.

The RTC ruled against the petitioners and held the following: a.) the assailed provisions
are relevant to the title of the law as they are intended to regulate the practice of real
estate service in the country by ensuring that those who engage in it shall either be a
licensed real estate broker, or under the latter’s supervision; b.) there’s no real discord
between E.O. No. 648 and R.A. No. 9646 as the latter does not render nugatory the
license to sell granted by the HLURB to real estate developers, which license would still
subsist, the only difference is that by virtue of the new law, real estate developers will
now be compelled to hire the services of one licensed real estate broker for every
twenty salespersons to guide and supervise the coterie of salespersons under the
employ of the real estate developers; c.) the questioned provisions do not preclude

1
property owners from using, enjoying, or disposing of their own property because they
can still develop and sell their properties except that they have to secure the services of
a licensed real estate broker who shall oversee the actions of the unlicensed real estate
practitioners under their employ, more so that what’s involved is the State’s exercise of
its police power; d.) Section 28(a) does not violate the equal protection clause because
the exemption of real estate developers was anchored on reasonable classification
aimed at protecting the buying public from the rampant misrepresentations often
committed by unlicensed real estate practitioners, and to prevent unscrupulous and
unethical real estate practices from flourishing considering the large number of
consumers in the regular course of business compared to isolated sale transactions
made by private individuals selling their own property. Consequently, petitioners filed a
petition for review under Rule 45 before the Supreme Court (SC)

ISSUES:

1. W/N there is a justiciable controversy in this case

2. W/N R.A. No. 9646 is unconstitutional for violating the "one title-one subject"
rule under Article VI, Section 26 (1) of the Constitution;

3. W/N R.A. No. 9646 is in conflict with PD 957, as amended by EO 648, with
respect to the exclusive jurisdiction of the HLURB to regulate real estate
developers;

4. W/N the assailed provisions of R.A. No. 9646, insofar as they affect the rights
of real estate developers, are unconstitutional for violating substantive due
process and;

5. W/N Sec. 28(a) of R.A. 9646, which treats real estate developers differently
from other natural or juridical persons who directly perform acts of real estate
service with reference to their own property, is unconstitutional for violating the
equal protection clause.

RULING:

1. AFFIRMATIVE. According to the SC, an actual case or controversy involves a

conflict of legal rights, an assertion of opposite legal claims susceptible to judicial
resolution. The controversy is justiciable if it is definite and concrete touching on the
legal relations of parties having adverse legal interests, which may be resolved by a
court of law through the application of a law. Likewise, an actual case is ripe for
adjudication when the act being challenged has a direct adverse effect on the individual
challenging it. In this case, the SC enunciated that petitioners who are real estate
developers are entities directly affected by the prohibition on performing acts
constituting practice of real estate service without first complying with the registration
and licensing requirements for brokers and agents under R.A. No. 9646. This is
supported by the fact that the possibility of criminal sanctions for disobeying the
mandate of the new law is real. As per the Court, asserting that the prohibition violates
their rights as property owners to dispose of their properties, petitioners challenged on
constitutional grounds the implementation of R.A. No. 9646 which the respondents
defended as a valid legislation pursuant to the State’s police power, thus a clear
justiciable controversy.

2
 2. NEGATIVE. As elucidated by the SC, the one-subject requirement under the
Constitution is satisfied if all the parts of the statute are related, and are germane to the
subject matter expressed in the title, or as long as they are not inconsistent with or
foreign to the general subject and title. Moreover, the Congress is not required to
employ in the title of the enactment language of such precision as to mirror, fully index
or catalogue all the contents and the minute details therein. In this case, the SC found
that the inclusion of real estate developers in the coverage of the subject law is
germane to the law’s primary goal of developing "a corps of technically competent,
responsible and respected professional real estate service practitioners whose
standards of practice and service shall be globally competitive and will promote the
growth of the real estate industry." As per the Court, since the marketing aspect of real
estate development projects entails the performance of those acts and transactions
defined as real estate service practices under Section 3(g) of R.A. No. 9646, it is
logically covered by the regulatory scheme to professionalize the entire real estate
service sector.

3. NEGATIVE. The SC enunciated the well-settled rule that in order to effect a

repeal by implication, the later statute must be so irreconcilably inconsistent and
repugnant with the existing law that they cannot be made to reconcile and stand
together. Applying the same in the instant case, the SC ruled that there is nothing in
R.A. No. 9646 that repeals any provision of P.D. No. 957, as amended by E.O. No. 648.
In fact, P.D. No. 957, a.ka. "The Subdivision and Condominium Buyers’ Protective
Decree,": a.) vested the NHA with exclusive jurisdiction to regulate the real estate trade
and business in accordance with its provisions; b.) empowered the NHA to register,
approve and monitor real estate development projects and issue licenses to sell to real
estate owners and developers; c.) granted the NHA the authority to register and
issue/revoke licenses of brokers, dealers and salesmen engaged in the selling of
subdivision lots and condominium units. Subsequently, E.O. No. 648 reorganized the
Human Settlements Regulatory Commission (HSRC) and transferred the regulatory
functions of the NHA under P.D. 957 to the HSRC. Thereafter, E.O. No. 90 renamed the
HSRC as HLURB and was designated as the regulatory body for housing and land
development under the Housing and Urban Development Coordinating Council
(HUDCC). To date, HLURB continues to carry out its mandate to register real estate
brokers and salesmen dealing in condominium, memorial parks and subdivision
projects. On the other hand, Section 29 of R.A. No. 9646 requires as a condition
precedent for all persons who will engage in acts constituting real estate service.
According to the SC, while P.D. No. 957 imposes registration requirements for dealers,
brokers and salespersons engaged in the selling of subdivision lots and condominium
units, Section 29 of R.A. No. 9646 regulates all real estate service practitioners whether
private or government. Likewise, while P.D. No. 957 seeks to supervise brokers and
dealers who are engaged in the sale of subdivision lots and condominium units, R.A.
No. 9646 aims to regulate the real estate service sector in general by professionalizing
their ranks and raising the level of ethical standards for licensed real estate
professionals. The SC pointed out that there is no conflict of jurisdiction because the
HLURB supervises only those real estate service practitioners engaged in the sale of
subdivision lots and condominium projects, specifically for violations of the provisions of
P.D. No. 957, and not the entire real estate service sector which is now under the
regulatory powers of the PRBRES. HLURB’s supervision of brokers and dealers to
effectively implement the provisions of P.D. No. 957 does not foreclose regulation of the
real estate service as a profession. Real estate developers already regulated by the

3
HLURB are now further required to comply with the professional licensure requirements
under R.A. No. 9646, as provided in Sections 28, 29 and 32. Mentioned also by the
Court is the long-standing rule that the legislature is presumed to have known existing
laws on the subject and not to have enacted conflicting laws, thus, Congress could not
be presumed to have intended Sections 28, 29 and 32 of R.A. No. 9646 to run counter
to P.D. No. 957.

4. NEGATIVE. The SC professed that no right is absolute, and the proper

regulation of a profession, calling, business or trade has always been upheld as a
legitimate subject of a valid exercise of the police power of the State. The object of
police power of the State is primarily the general welfare. Moreover, when the
conditions so demand as determined by the legislature, property rights must bow to the
primacy of police power because property rights, though sheltered by due process,
must yield to general welfare. In this case, the SC espoused that there is no deprivation
of property as no restriction on their use and enjoyment of the same is caused by the
implementation of R.A. No. 9646. The burden felt by the petitioners as property owners
is, according to the Court, an unavoidable consequence of a reasonable regulatory
measure. Particularly, the Court emphasized that in this case, the 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. The new regulatory
regime aimed to fully tap the vast potential of the real estate sector for greater
contribution to our gross domestic income, and real estate practitioners serve a vital role
in spearheading the continuous flow of capital, in boosting investor confidence, and in
promoting overall national progress. Added by the Court, police power as an attribute to
promote the common good would be diluted considerably if on the mere plea of
petitioners that they will suffer loss of earnings and capital, the questioned provision is
invalidated, more so, when the petitioners in this case failed to prove that the subject
legislation is confiscatory in nature.

5. NEGATIVE. As found by the SC, Section 28 of R.A. No. 9646 exempts from its
coverage natural and juridical persons dealing with their own property, and other
persons such as receivers, trustees or assignees in insolvency or bankruptcy
proceedings. However, real estate developers are specifically mentioned as an
exception from those enumerated therein. According to the Court, although the equal
protection clause of the Constitution does not forbid a valid classification, it is imperative
that the classification should be based on real and substantial differences having a
reasonable relation to the subject of the particular legislation. If classification is germane
to the purpose of the law, concerns all members of the class, and applies equally to
present and future conditions, the classification does not violate the equal protection
guarantee. The Court, then, elucidated that R.A. No. 9646 was intended 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. As elucidated by
the Court, real estate developers at present constitute a sector that hires or employs the
largest number of brokers, salespersons, appraisers and consultants due to the sheer
number of products. As early as in the ‘70s, there has been a proliferation of errant
developers, operators or sellers who have reneged on their representation and
obligations to comply with government regulations such as the provision and

4
maintenance of subdivision roads, etc. As per the SC, to protect the interest of home
and lot buyers from fraudulent acts and manipulations perpetrated by these
unscrupulous subdivision and condominium sellers and operators, P.D. No. 957 was
issued to strictly regulate housing and real estate development projects. Hence, in
approving R.A. No. 9646, the legislature rightfully recognized the necessity of imposing
the new licensure requirements to all real estate service practitioners, including and
more importantly, those real estate service practitioners working for real estate
developers. The Court emphasized that unlike individuals or entities having isolated
transactions over their own property, real estate developers sell lots, houses and
condominium units in the ordinary course of business, a business which is highly
regulated by the State to ensure the health and safety of home and lot buyers. As per
the Court, the foregoing reveals that substantial distinctions do exist between ordinary
property owners exempted under Section 28(a) and real estate developers like
petitioners, and the classification enshrined in R.A. No. 9646 is reasonable and relevant
to its legitimate purpose. Added by the Court, the presumption of constitutionality has
not been overturned by the petitioners in this case. Thus, the SC denied the petition and
affirmed and upheld the RTC’s decision.