Title
United BF Homeowner's Association vs. BF Homes, Inc.
Case
G.R. No. 124873
Decision Date
Jul 14, 1999
Homeowners' association (UBFHAI) disputes developer (BFHI) over subdivision administration; HIGC lacks jurisdiction, Supreme Court affirms dismissal.
jurisdiction
promulgating rules
expanded jurisdiction
A

Case Digest (G.R. No. 124873)

Facts:

  • Parties and nature of the dispute
  • Petitioner United BF Homeowners Association, Inc. (UBFHAI) acted as the umbrella organization and sole representative of all homeowners in the BF Homes Paranaque Subdivision, a seven hundred sixty five (765) hectare subdivision located in the south of Manila.
  • Respondent BF Homes, Inc. (BFHI) acted as the owner-developer of the subdivision, which first opened in 1968.
  • Receivership and rehabilitation of BFHI
  • In 1988, due to financial difficulties, the Securities and Exchange Commission (SEC) placed BFHI under receivership to undergo a ten-year (10) rehabilitation program and appointed Atty. Florencio B. Orendain as receiver.
  • The rehabilitation program consisted of two stages:
1) payment of obligations to external creditors; and 2) payment of obligations to Banco Filipino.
  • Pre-rehabilitation arrangements and creation/recognition of UBFHAI
  • When Atty. Orendain took over management in 1988, several things were not in order in the subdivision.
  • Atty. Orendain entered into a tripartite arrangement with the two major homeowners’ associations:
1) BF Paranaque Homeowners Association, Inc. (BFPHAI); and 2) Confederation of BF Homeowners Association, Inc. (CBFHAI).
  • The agreement aimed to create a single, representative homeowners’ association and set up an integrated security program covering eight (8) entry and exit points to and from the subdivision.
  • On December 20, 1988, the tripartite arrangement was reduced into a memorandum of agreement and was amended on March 1989.
  • Pursuant to the agreements, on May 18, 1989, UBFHAI was created and registered with the Home Insurance and Guaranty Corporation (HIGC), and it was recognized as the sole representative of all homeowners’ association inside the subdivision.
  • BFHI, through its receiver, turned over to UBFHAI:
1) administration and operation of the subdivision’s clubhouse at #37 Pilar Banzon Street; and 2) a strip of open space in Concha Cruz Garden Row.
  • The clubhouse turn-over occurred on June 23, 1989, while the Concha Cruz Garden Row turn-over occurred in May 1993.
  • Appointment of a new committee of receivers and subsequent events
  • On November 7, 1994, the first receiver was relieved, and a new committee of receivers was appointed, composed of BFHI’s eleven (11) members of the board of directors.
  • On April 7, 1995, based on BFHI’s title to the main roads, the newly appointed committee of receivers sent a letter to different homeowners’ associations in the subdivision.
  • The committee informed the homeowners’ associations that, as a basic requirement for BFHI’s rehabilitation, BFHI would be responsible for the security of the subdivision to centralize it and abate continuing proliferation of squatters.
  • On the same date, UBFHAI filed with HIGC a petition for mandamus with preliminary injunction against BFHI.
  • In substance, UBFHAI alleged that the committee of receivers illegally revoked their security agreement with the previous receiver.
  • UBFHAI further alleged that, even prior to April 7, 1995, the committee committed the following acts:
1) deferred UBFHAI’s purchase of additional pumps; 2) terminated the collection agreement for the community assessment forged by UBFHAI with the first receiver; 3) terminated the administration and maintenance of Concha Cruz Garden Row; 4) sent a letter recognizing BFPHAI only and stating that the clubhouse was to be administered by it only; and 5) took over the administration of security in the main avenues in the subdivision.
  • Proceedings before HIGC and the Court of Appeals
  • On April 11, 1995, HIGC issued, ex parte, a temporary restraining order (TRO).
  • The TRO enjoined BFHI from:
1) taking over the clubhouse at 37 Pilar Banzon St., BF Homes Paranaque, Metro Manila; 2) taking over security at all entry and exit points and main avenues of BF Homes Paranaque Subdivision; 3) impeding or preventing the execution and sale at auction of properties of BF Paranaque Homeowners Association, Inc....(Subscriber-Only)

Issues:

  • Validity of HIGC rule on homeowners’ disputes
  • Whether Section 1(b), Rule II of the HIGC “Rules of Procedure in the Settlement of Homeowners’ Disputes” was valid.
  • Whether the HIGC rule went beyond the authority delegated under Executive Order 535, as amended, and in relation to Presidential Decree 902-A.
  • Jurisdiction of HIGC and the effect of alleged corporate attack
  • Whether HIGC had original and exclusive jurisdiction over UBFHAI’s petition for mandamus with preliminary injunction under the types of disputes enumerated in the HIGC rules and in Presidential Decree 902-A.
  • Whether the acts committed or threatened to be committed by BFHI constituted an attack ...(Subscriber-Only)

Ruling:

  • (Subscriber-Only)

Ratio:

  • (Subscriber-Only)
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