G.R. No. 86774 - Presley vs. Bel-Air Village Association, Inc.

Case Summary (G.R. No. 86774)

Factual Background

Bel-Air Village Association, Inc. (BAVA) filed a complaint for specific performance and damages with preliminary injunction against Teofilo Almendras and Rosario Almendras and enjoined their lessee, Enedina Presley, for violating the Deed Restrictions of Bel‑Air Subdivision by operating a hot pan de sal store at 102 Jupiter Street, Bel‑Air Village, Makati. The Almendrases were the registered owners of the house and lot and, by annotation of the Deed Restrictions on their Torrens Certificate (TCT No. 73616), were members of BAVA. The Deed Restrictions provided that the lot must be used only for residential purposes. BAVA also sought unpaid association dues and assessments alleged to total P3,803.55 as of November 3, 1980.

Trial Court Proceedings

The trial court issued judgment in favor of BAVA, granting permanent injunctions and monetary relief. The dispositive portion enjoined the defendants from using the property as a pan de sal store or for any commercial purposes, ordered them jointly and severally to pay BAVA P3,803.55 with legal interest from February 9, 1981, and awarded joint and several attorney’s fees of P4,500.00. The trial court rested its relief on enforcement of the annotated Deed Restrictions and on the association’s claim for unpaid dues and attorney’s fees.

Court of Appeals Decision

The Court of Appeals affirmed the trial court’s judgment in toto on November 28, 1988. The appellate court sustained the injunction against commercial use, upheld the award of P3,803.55 with interest for unpaid association dues, and affirmed attorney’s fees of P4,500.00, holding the Deed Restrictions enforceable as contractual stipulations annotated in the title.

Issues Presented to the Supreme Court

In the petition for review, Enedina Presley raised three principal issues: (A) that the Court of Appeals’ ruling was inconsistent with the consolidated en banc decision in Sangalang, et al. promulgated December 22, 1988; (B) that adjudicating petitioner solidarily liable with the Almendrases for unpaid association dues was contrary to the evidence; and (C) that the award of attorney’s fees against petitioner lacked legal and factual basis. The petition followed denial of reconsideration by the Court of Appeals on January 20, 1989.

Parties’ Contentions before the Supreme Court

BAVA contended that the Court’s decision in Sangalang was erroneous insofar as it interpreted MMC Ordinance No. 81-01 to have reclassified Jupiter Street as a high density commercial (C‑3) zone, and maintained that Jupiter Street remained an R‑1 residential zone; accordingly, BAVA urged that the Deed Restrictions should be enforced against petitioner. Presley argued that she was similarly situated to private respondents in the consolidated cases and that the Sangalang doctrine exculpated such private respondents because of the reclassification effected by Ordinance No. 81-01 and attendant commercialization of Jupiter Street.

Supreme Court’s Analysis and Legal Reasoning

The Court examined the record and the authorities controlling the consolidated decisions rendered in Sangalang, et al. The Court observed that the private respondent in the present case was likewise situated to the private respondents in G.R. Nos. 74376, 76394, 78182, and 82281, who had converted residential homes to commercial establishments and were sued by BAVA to enforce Deed Restrictions. The Court reiterated its rulings in Sangalang that deed restrictions and restrictive easements are valid and enforceable among contracting parties but are subject to the legitimate exercise of police power. The Court invoked the principle that contractual stipulations cannot contravene law, morals, good customs, public order, or public policy and that they cannot impede the exercise of police power aimed to promote health, safety, peace, and the common good. The Court noted that in Sangalang it had found that Jupiter Street had been reclassified by the National Government through MMC Ordinance No. 81-01 into a high density commercial (C‑3) zone and that the area had been highly commercialized, with commercial buildings, offices, restaurants, and stores proliferating. The Court found no new ordinance, reclassification, certification, or jurisprudence in the present record that would warrant revisiting or reversing the Sangalang doctrine. The Court also relied on the lack of convincing proof offered by BAVA to show that Jupiter Street remained an R‑1 residential zone. The Court further observed that the trial court’s enforcement of the Deed Restrictions could be impaired where necessary to reconcile them with the exercise of police power, citing Ortigas & Co. Limited Partnership v. Feati Bank and Trust Co. The Court refe

Case Syllabus (G.R. No. 86774)

Parties and Procedural Posture

Enedina Presley was the petitioner who was originally the lessee and later purchaser of the subject property located at 102 Jupiter Street, Bel-Air Village, Makati.
Bel-Air Village Association, Inc. (BAVA) was the private respondent that filed suit for specific performance, damages, and preliminary injunction for violation of the Deed Restrictions and for unpaid association dues.
The Regional Trial Court rendered judgment enjoining the defendants from operating a pan de sal store and awarded P3,803.55 with interest and P4,500 as attorney’s fees.
The Court of Appeals affirmed the trial court decision in toto on November 28, 1988 and denied the motion for reconsideration on January 20, 1989.
The present petition was filed in the Supreme Court for review of the Court of Appeals’ decision and was decided after consolidation with and consideration of prior related cases.
During the pendency of the petition, Enedina Presley died on January 4, 1991 and was substituted by her daughters Olivia V. Pizzaro and Consuelo V. Lacson as heirs.

Key Factual Allegations

The property owner-registers were Teofilo and Rosario Almendras, who held title TCT No. 73616 with the Deed Restrictions annotated restricting use to residential purposes.
Enedina Presley operated a Hot Pan de Sal Store on the property as lessee and later purchased the property from the Almendrases.
BAVA alleged non-payment of association dues and assessments by the Almendrases amounting to P3,803.55 as of November 3, 1980.
BAVA sent a letter requesting cessation of the commercial use on the premises pursuant to the annotated Deed Restrictions and asserted rights as owner of Jupiter Street and as association for the subdivision.
The record indicated that Jupiter Street had experienced increased commercial development, including commercial buildings, offices, restaurants, and stores.

Issues Presented

Whether the Court of Appeals erred in applying this Court’s consolidated decision in Sangalang, et al. v. Intermediate Appellate Court and Ayala Corporation, et al. to absolve the private respondent from enforcement of the Deed Restrictions.
Whether the Court of Appeals was correct in adjudging Enedina Presley jointly and severally liable with the Almendrases for unpaid association dues.
Whether the award of attorney’s fees against Enedina Presley was supported by law or evidence.

Contentions of the Parties

BAVA contended that Jupiter Street remained an R-1 residential zone and that the Deed Restrictions were enforceable against the respondent without qualification.
Enedina Presley contended that the Sangalang consolidated decision applied and that the reclassification and commercialization of Jupiter Street precluded enforcement of the residential Deed R