G.R. No. 160795 - Corinthian Gardens Association, Inc. vs. Spouses Tanjangco

Respondents spouses Reynaldo and Maria Luisa Tanjangco (the Tanjangcos) owned Lots 68 and 69, covered by TCT Nos. 242245 and 282961, respectively, located in Corinthian Gardens Subdivision, Quezon City, managed by petitioner Corinthian Gardens Association, Inc. (Corinthian).
Respondents spouses Frank and Teresita Cuaso (the Cuasos) owned adjacent Lot 65.

Before constructing their house on Lot 65, the Cuasos required a relocation survey. Corinthian referred Geodetic Engineer Democrito De Dios (Engr. De Dios), who had conducted previous surveys for the subdivision, to the Cuasos.
Corinthian performed periodic ocular inspections during and after construction to ensure compliance with the subdivision’s Manual of Rules and Regulations.
After construction, the Cuasos’ perimeter fence was found to have encroached by 87 square meters on the Tanjangcos’ Lot 69.
No amicable settlement was reached; the Tanjangcos demanded demolition of the encroaching fence, which the Cuasos refused.

The Tanjangcos filed a suit for Recovery of Possession with Damages against the Cuasos before the RTC.
The Cuasos filed a Third-Party Complaint against Corinthian, C.B. Paraz Construction Co., Inc. (the builder), and Engr. De Dios, alleging negligence by the latter parties in approving survey and building plans, exposing them to litigation.
RTC Decision (March 30, 1993):

Found the Cuasos' perimeter fence encroached by 87 sqm on Lot 69.
Declared Cuasos builders in good faith.
Ordered the Cuasos to either buy the encroaching portion at agreed price or demolish the fence at their expense.
Ordered Cuasos to pay monthly rentals of P2,000 starting from complaint filing.
Held C.B. Paraz grossly negligent and liable for damages and attorney’s fees.
Dismissed the third-party complaint against Corinthian and Engr. De Dios for lack of cause of action.

Cuasos acted in bad faith in land-grabbing the 87 sqm portion as of April 5, 1989.
Granted Tanjangcos rights under Articles 449, 450, 451, and 549 of the New Civil Code, including demolition of the fence after reimbursing Cuasos expenses.
Ordered Cuasos to pay monthly rentals of P10,000 from 1989 until vacating the property.
Awarded moral damages (P100,000), exemplary damages (P50,000), and attorney’s fees (P150,000) against Cuasos.
Imposed 6% interest per annum on all awards.
Found Corinthian, C.B. Paraz, and Engr. De Dios negligent and jointly liable for 15% of all sums Cuasos must pay, also with 6% interest.

Only Corinthian filed a Motion for Reconsideration; Cuasos and others did not.
The CA denied Corinthian’s motion.
Corinthian filed a Petition for Review on Certiorari before the Supreme Court challenging the CA Decision and Resolution, impleading Cuasos as respondents.

The Tanjangcos sought partial entry of judgment and execution of demolition order; both granted.
Cuasos filed Opposition, Motion for Reconsideration, and application for Temporary Restraining Order (TRO) and/or preliminary injunction to prevent fence demolition, arguing potential irreparable damage and the need to determine Corinthian’s negligence first.
Tanjangcos opposed the TRO application, arguing the judgment was final and executory against Cuasos who did not appeal.
The Supreme Court denied Cuasos’ application for TRO or preliminary injunction for lack of merit.

Whether the Court of Appeals erred in holding Corinthian Gardens Association, Inc. liable to pay 5% of the judgment money to the Tanjangcos due to the Cuasos’ encroachment.
Whether the Court of Appeals had legal basis to increase the reasonable rental from P2,000 as prayed for in the complaint to P10,000 without proof.