Case Summary (G.R. No. 160795)
Background and Dispute Origin
The Tanjangcos owned Lots 68 and 69 in Corinthian Gardens, adjacent to Lot 65 owned by the Cuasos. Before building their house, the Cuasos engaged Geodetic Engineer Democrito De Dios, recommended by Corinthian, to conduct a relocation survey. The Cuasos constructed a perimeter fence using C.B. Paraz Construction. After construction, an ocular inspection by Corinthian showed that the fence encroached 87 square meters into Lot 69, owned by the Tanjangcos. Since no amicable settlement was reached, the Tanjangcos filed a Recovery of Possession with Damages suit against the Cuasos.
Third-Party Complaint and Allegations
The Cuasos filed a Third-Party Complaint against Corinthian, C.B. Paraz, and Engr. De Dios, alleging negligence. They argued that the builder failed to observe correct specifications and that the surveyor was negligent in performing an accurate relocation survey, which exposed them to litigation. Corinthian was charged with approving the relocation survey and plans without verifying accuracy and endorsing the engineer’s competence without due diligence, thereby contributing to the boundary dispute and resulting damages.
Regional Trial Court (RTC) Decision
The RTC ruled in favor of the Tanjangcos, confirming the 87-square-meter encroachment by the Cuasos' perimeter fence on Lot 69. The court regarded the Cuasos as good-faith builders and gave the Tanjangcos the option to sell and the Cuasos to buy the encroached portion at an agreed price within 60 days; failing which, the perimeter wall had to be demolished at the Cuasos’ expense. The Cuasos were also ordered to pay monthly rent of ₱2,000 from the complaint filing date. The RTC found C.B. Paraz grossly negligent and ordered it to pay moral and exemplary damages and attorneys' fees to both Tanjangcos and Cuasos. The third-party complaints against Corinthian and Engr. De Dios were dismissed for lack of cause of action.
Court of Appeals (CA) Decision
On appeal, the CA reversed the RTC ruling, concluding that the Cuasos acted in bad faith by encroaching on Lot 69. The CA allowed the Tanjangcos to exercise their rights under Articles 449, 450, 451, and 549 of the New Civil Code, including demanding demolition of the perimeter wall after reimbursing the Cuasos for preservation expenses. The Cuasos were ordered to pay ₱10,000 monthly rent for use and occupancy from 1989 until they vacate, plus ₱100,000 moral damages, ₱50,000 exemplary damages, and ₱150,000 attorneys’ fees, with six percent interest per annum. The Cuasos’ appeal was dismissed for lack of merit. The CA found Corinthian, C.B. Paraz, and Engr. De Dios negligent and held them jointly liable for 15% of the judgment sums payable by the Cuasos, proportioned equally at 5% each with six percent interest.
Procedural Developments and Enforcement
Corinthian alone filed a motion for reconsideration to the CA, which was denied. The Cuasos attempted to adopt Corinthian’s motion but were unsuccessful. The CA declared the decision final and executory against Cuasos, C.B. Paraz, and Engr. De Dios for failure to appeal. Execution was ordered to demolish the encroaching fence, which the Cuasos sought to enjoin via a temporary restraining order (TRO) and preliminary injunction before the Supreme Court, citing grave and irreparable harm and questioning Corinthian's negligence. The Tanjangcos opposed the motion, arguing that the enforcement could proceed as the appeal was personal to Corinthian and Cuasos failed to appeal.
Supreme Court Application for Injunctive Relief and Ruling
The Supreme Court denied the Cuasos' application for TRO and/or writ of preliminary injunction. The Court emphasized the requisites for injunctive relief: a clear legal right, threat of material and substantial invasion of that right, and urgent necessity. The Cuasos failed to demonstrate a clear and unmistakable right to warrant such relief because the CA judgment, which found them in bad faith and confirmed entitlement of the Tanjangcos to demolition, had become final and executory. The failure of the Cuasos to appeal was tantamount to acceptance of the adverse ruling. The principle that an appellee who does not appeal cannot seek affirmative relief or reversal was reiterated, and this applied equally to C.B. Paraz and Engr. De Dios.
Issues Raised by Corinthian and Court’s Analysis
Corinthian raised two main issues:
a) Whether there was basis to hold Corinthian liable to pay 5% of judgment money to the Tanjangcos due to Cuasos’ encroachment.
b) Whether the CA had legal basis to increase the rental compensation from ₱2,000 to ₱10,000 without evidence.
Corinthian argued it approved only the architectural and structural plans, not the survey relocation, insisting due diligence was exercised, and hence it should not be liable. It also contended that the increase of rent without proof was improper.
The Tanjangcos countered that Corinthian was negligent by limiting the scope of approval, thus neglecting its duty under its own Rules and Regulations, which require pre-construction approvals and inspections. They argued that the acceptance of builder’s bonds and fees implied Corinthian’s assumption of responsibilities. They further contended that courts can judicially notice increased property rental values supported by the location and circumstances of deprivation.
Legal Basis and Standard for Negligence
The Court applied Article 2176 of the Civil Code, which governs quasi-delicts (torts), establishing that liability arises from negligence resulting in damage. To prevail, Tanjangcos had to prove damages, fault/negligence, and causal connection.
Negligence was defined as failure to exercise the care that a prudent person would under similar circumstances, i.e., foreseeability of harm and failure to act accordingly.
Court’s Findings on Negligence and Liability of Corinthian
The Supreme Court upheld the CA’s factual findings after a meticulous review. The Court found that Corinthian was negligent by failing to exercise due diligence in ensuring compliance with its Manual of Rules and Regulations. Corinthian’s defense that its building plan approval was limited to "table inspection" was rejected as such approval still constituted negligence if carelessly done.
Corinthian’s own Rules required that construction plans be approved before work commenced, and that inspections be conducted, including perimeter walls construction. Corinthian’s acceptance of builder’s cash bonds and fees created corresponding obligations and liabilities. The Court emphasized the equitable principle that those who
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Case Syllabus (G.R. No. 160795)
Background and Parties Involved
- The case involves a property boundary dispute between the Tanjangcos (owners of Lots 68 and 69) and the Cuasos (owners of Lot 65) in Corinthian Gardens Subdivision, Quezon City.
- Corinthian Gardens Association, Inc. (Corinthian), the subdivision’s managing entity, is the petitioner.
- The Cuasos constructed a house on Lot 65 with plans approved by Corinthian and had surveys conducted by Engineer Democrito De Dios, who acted as the subdivision’s surveyor.
- After construction, it was discovered that the Cuasos’ perimeter fence encroached 87 square meters on the Tanjangcos’ Lot 69.
- The Tanjangcos demanded demolition of the fence, which the Cuasos refused, leading to a suit for Recovery of Possession with Damages filed by the Tanjangcos.
Proceedings and Claims
- The Cuasos filed a Third-Party Complaint against Corinthian, C.B. Paraz Construction Co., and Engr. De Dios alleging negligence for inaccurate survey, approval of faulty building plans, and exposing them to litigation.
- The RTC ruled in favor of the Tanjangcos, finding the encroachment, characterizing the Cuasos as builders in good faith, and giving options to sell or demolish the fence, with damages and monthly rents awarded.
- The RTC found C.B. Paraz grossly negligent, ordering payment of damages to both parties.
- The third-party complaint against Corinthian and Engr. De Dios was dismissed for lack of cause.
- All parties appealed to the Court of Appeals (CA).
Court of Appeals’ Decision
- The CA reversed the RTC, holding that the Cuasos acted in bad faith in encroaching Lot 69 from April 1989.
- The CA allowed the Tanjangcos the rights under various Articles of the New Civil Code to demand demolition of the fence upon reimbursement of necessary expenses.
- The Cuasos were ordered to pay increased monthly rents of ₱10,000 (vs. ₱2,000 in RTC), moral damages of ₱100,000, exemplary damages of ₱50,000, and ₱150,000 for attorney’s fees, plus 6% interest.
- Corinthian, C.B. Paraz, and Engr. De Dios were found negligent and jointly ordered to pay 15% (5% each) of the sums the Cuasos should pay to the Tanjangcos.
- Motions for reconsideration filed by Corinthian were denied; Cuasos did not appeal.
Issues Presented to the Supreme Court
- Whether there is a legal basis to hold Corinthian liable to pay 5% of the judgment for the Cuasos’ encroachment.
- Whether the CA had legal basis to increase the monthly rent from ₱2,000 to ₱10,000 without evidence and beyond what was prayed for.
Corinthian’s Arguments
- They did not approve the relo