Case Digest (G.R. No. 131638-39)
Facts:
The case of Financial Building Corporation vs. Forbes Park Association, Inc. arose from the construction of a purported residence for the Trade Representative of the then Union of Soviet Socialist Republics (USSR) on a 4,223-square-meter lot at No. 10, Narra Place, Forbes Park Village, Makati City. On December 2, 1985, the USSR engaged petitioner Financial Building Corporation to build a multi-level office and staff apartment, representing it to be a single-family dwelling. Forbes Park initially authorized construction but, on June 30, 1986, reminded the USSR of village rules permitting only single-family homes. The USSR assured compliance, yet Financial Building submitted a second plan for multi-level apartments to the Makati City Government. Forbes Park’s ocular inspection confirmed the violation, leading it to enjoin further work and suspend site access on March 27, 1987. Financial Building then filed Civil Case No. 16540 for injunction and damages in the Regional Trial Court...Case Digest (G.R. No. 131638-39)
Facts:
- Background and agreement
- The Union of Soviet Socialist Republics (USSR) owned a 4,223 m² residential lot at No. 10 Narra Place, Forbes Park Village, Makati City.
- On December 2, 1985, the USSR engaged Financial Building Corporation (FBC) to construct a multi‐level office and staff apartment building for its Trade Representative.
- Deed‐restriction reminder and assurance
- Forbes Park Association, Inc. (FPA) authorized the work upon USSR’s representation that the building was a residence.
- On June 30, 1986, FPA reminded the USSR that only single‐family residences were allowed; the USSR assured compliance.
- Discovery of violation and enforcement
- Despite assurances, FBC submitted a second plan to Makati City for a multi‐level apartment—different from the approved residential plan.
- FPA discovered the plan, confirmed the deed‐restriction breach via ocular inspection, enjoined further work, and on March 27, 1987, suspended all site entry permits.
- Prior injunction suit (Civil Case No. 16540)
- April 9, 1987: FBC filed for preliminary injunction and damages against FPA; FPA moved to dismiss for lack of real‐party interest.
- The RTC granted a preliminary injunction, but the Court of Appeals nullified it and dismissed the complaint; this dismissal was affirmed by the Supreme Court on April 6, 1988 (G.R. No. 79319).
- Damages suit (Civil Case No. 89-5522)
- October 27, 1989: FPA filed suit for damages against FBC, claiming:
- ₱3,000,000 actual damages;
- ₱1,000,000 moral damages;
- ₱1,000,000 exemplary damages;
- ₱1,000,000 attorney’s fees.
- September 26, 1994: RTC rendered judgment ordering demolition of illegal structures and awarding ₱3,000,000 actual damages, ₱1,000,000 exemplary damages, ₱500,000 attorney’s fees, plus costs.
- March 20, 1998: Court of Appeals (CA-GR CV No. 48194) affirmed but reduced exemplary damages and attorney’s fees to ₱50,000 each.
- Petition for review on certiorari
- FBC filed before the Supreme Court, assigning errors:
- The damages suit is barred by prior judgment or waived for failure to file a compulsory counterclaim in Civil Case No. 16540.
- FPA has no cause of action against FBC.
- FBC is not liable for damages under the evidence.
- Demolition order is improper because the premises are diplomatic.
Issues:
- Is FPA’s damages action barred by the prior injunction suit or deemed waived for failing to assert a compulsory counterclaim in Civil Case No. 16540?
- Does FPA have cause of action against FBC?
- Is FBC liable for the damages awarded?
- Is the demolition order improper due to diplomatic‐premises immunity?
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)