G.R. No. 124873 - United BF Homeowner's Association vs. BF Homes, Inc.

Petitioner United BF Homeowners’ Association, Inc. (UBFHAI) is the umbrella organization representing all homeowners in the BF Homes ParaAaque Subdivision, a 765-hectare development in the south of Manila.
Respondent BF Homes, Inc. (BFHI) is the owner-developer of the subdivision, which has been operational since 1968.
Home Insurance and Guaranty Corporation (HIGC) was designated to supervise and register homeowners’ associations following the delegation of powers from the Securities and Exchange Commission (SEC) by Executive Order No. 535.

In 1988, due to financial difficulties, BFHI was placed under receivership, with Atty. Florencio B. Orendain taking charge as receiver.
The rehabilitation program was structured in two stages: first, paying obligations to external creditors; and second, settling obligations with Banco Filipino.
Upon taking over, various irregularities in the subdivision were noted, necessitating administrative changes.

A tripartite agreement was entered into among the two major homeowners’ associations (BF ParaAaque Homeowners Association, Inc. and the Confederation of BF Homeowners Association, Inc.) and the receiver, aimed at unifying representation and establishing an integrated security system for all eight entry and exit points of the subdivision.
On December 20, 1988, this agreement was reduced to a memorandum and later amended in March 1989.
Pursuant to the agreements, petitioner UBFHAI was created on May 18, 1989, registered with HIGC, and recognized as the sole representative of all the homeowners in the subdivision.
BFHI, through its receiver, transferred operational control of the clubhouse and open spaces within the subdivision to petitioner UBFHAI on June 23, 1989, and in May 1993 respectively.

On November 7, 1994, the initial receiver was relieved, and a new committee of receivers was appointed, composed of BFHI’s 11 board members.
On April 7, 1995, based on BFHI’s title to the main roads, the new committee issued a letter asserting BFHI’s responsibility for the security of the subdivision to consolidate it and curb the proliferation of squatters.
On the same day, petitioner UBFHAI filed a petition for mandamus with a request for a preliminary injunction against BFHI, alleging:

Illegal revocation of the security agreement previously held with the first receiver.
Deferment of UBFHAI’s purchase of additional pumps.
Termination of a collection agreement for community assessments.
Withdrawal of the administration and maintenance of a portion of the subdivision (Concha Cruz Garden Row).
Issuance of a notice recognizing another association (BF ParaAaque Homeowners Association, Inc.) as the sole administrator of the clubhouse.
Unilateral takeover of security arrangements on the main avenues.

On April 11, 1995, HIGC issued an ex parte temporary restraining order enjoining BFHI from assuming control over the clubhouse, security arrangements, and other contractual obligations related to community services.

On April 24, 1995, BFHI filed a petition for prohibition with the Court of Appeals, seeking to stop the HIGC from proceeding with the preliminary injunction and restraining order related to HIGC Case No. HOA-95-027.
On May 2, 1995, the HIGC deferred the resolution of UBFHAI’s application pending the outcome of BFHI’s petition and ordered that the status quo be maintained when the temporary restraining order lapsed.
On November 27, 1995, the Court of Appeals granted BFHI’s petition for prohibition, specifically ordering that Atty. Roberto C. Abrajano, the hearing officer of HIGC, desist from proceeding with the hearing and dismiss HIGC Case No. HOA-95-027 for lack of jurisdiction.
BFHI’s motion for reconsideration was subsequently denied by the appellate court on April 24, 1996.

Administrative supervision over homeowners’ associations was originally vested in the SEC; however, on May 3, 1979, Executive Order No. 535 delegated this function to the HIGC.
Section 2 of Executive Order No. 535 granted additional powers to HIGC, including the registration of homeowners’ associations and the exercise of powers previously vested in the SEC.
On December 21, 1989, HIGC promulgated its “Revised Rules of Procedure in the Hearing of Homeowners’ Disputes,” specifically Section 1(b), Rule II, which enumerated the types of disputes over which it would have jurisdiction.
The rule in question controversially expanded HIGC’s jurisdiction to include disputes involving “general public or other entity,” seemingly beyond the limits prescribed by Presidential Decree 902-A.
BFHI contended that the HIGC’s rules exceeded its delegated authority, thereby overstepping the intended limits of the law.

Whether Section 1(b), Rule II of the HIGC’s “Revised Rules of Procedure in the Hearing of Homeowners’ Disputes” is valid or whether it unduly expands the jurisdiction conferred by the enabling statute and Presidential Decree 902-A.

Whether the HIGC, through its revised rules, has original and exclusive jurisdiction over the petition for mandamus filed by petitioner UBFHAI.
Whether the inclusion of disputes involving the “general public or other entity” exceeds the statutory mandate.

Whether the acts committed (or threatened) by the respondent BFHI against petitioner UBFHAI amount to an attack on the petitioner’s corporate existence, notwithstanding the jurisdictional issue.