G.R. No. 146987 - Metro Properties Inc. vs. Magallanes Village Association, Inc.

Metro Properties, Inc. (Petitioner) and Magallanes Village Association, Inc. (Respondent) are involved in a controversy arising from alleged violations of certain deed restrictions.
The deed restrictions, annotated on TCT Nos. 160184 and 160185, require that the owner of the lots become an automatic member of the Magallanes Village Association and abide by its rules, including limitations on building heights and procedures for plan approval.

On September 9, 1993, Magallanes Village Association filed a complaint with the Home Insurance and Guaranty Corporation (HIGC) seeking an injunction and damages, accompanied by a request for a temporary restraining order (TRO) and/or a preliminary injunction.
The complaint centered on two lots reportedly sold by Makati Development Corporation to Metro Properties, Inc., and focused on alleged violations such as:

Disregarding the approved renovation/repair plan by increasing the roof’s height from the permitted 1.50 meter to 3.705 meters; and
Constructing an additional structure that exceeded the maximum allowable building height of nine (9) meters set by the deed restrictions.

On April 2, 1993, Metro Properties, Inc. filed an application for a major renovation/repair permit with respondent, which was approved.
On August 25, 1993, an inspection revealed the unapproved increase in roof height, prompting the Association to demand cessation of the work due to potential danger to residents and noncompliance with the deed restrictions.
Despite notifications, petitioner continued the work, leading to respondent’s formal complaint before the HIGC.
The HIGC initially issued a TRO on September 17, 1993, and scheduled a hearing for a preliminary injunction on September 23, 1993.
On September 27, 1993, petitioner answered the complaint and raised several affirmative defenses, including:

Claiming that the HIGC lacked jurisdiction over the case;
Alleging that the respondent did not possess the legal personality to sue or enforce the deed restrictions;
Arguing that the deed restrictions were unenforceable due to non-annotation on the titles; and
Asserting that the complaint violated Supreme Court Circular 28-91 for the absence of a certification against forum shopping.

In a Resolution dated October 7, 1993, HIGC ruled that under Executive Order No. 535, disputes between homeowners associations and their members fall under its exclusive jurisdiction.
On November 18, 1993, petitioner filed a petition for certiorari and prohibition with the Court of Appeals alleging grave abuse of discretion by HIGC in asserting jurisdiction.
The Court of Appeals, in its Decision dated June 13, 2000, dismissed petitioner’s petition, holding that HIGC properly assumed jurisdiction given the intra-corporate nature of the dispute.
The petitioner’s subsequent motion for reconsideration was denied in a Resolution issued on January 31, 2001, prompting the filing of the petition for review on certiorari before the Supreme Court.

Whether the HIGC, as the designated body under Executive Order No. 535 and subsequent amendments, had the original and exclusive jurisdiction to hear and decide the dispute concerning alleged infractions of the deed restrictions by a member of a homeowners association.

Whether the petitioner’s failure to file a motion for reconsideration on the HIGC Resolution prior to elevating the case for certiorari affected the admissibility of the petition, considering this as a mandatory procedural requirement.

Whether the allegations that Metro Properties, Inc. violated the approved renovation/repair plan and the deed restrictions constitute sufficient grounds to assert an intra-corporate controversy resolvable by the HIGC.