Case Summary (G.R. No. 141961)
Procedural Posture and Relief Sought
Private respondents filed a complaint for damages with preliminary and temporary injunctive relief in the RTC alleging denial of access to their residence and related moral damages. Petitioners moved to dismiss on grounds of lack of jurisdiction (claiming intra-corporate controversy within HIGC/HLURB jurisdiction) and lack of cause of action. The RTC denied the motions. Petitioners elevated the matter to the Court of Appeals via certiorari; the CA affirmed the RTC’s rulings. The petition for review to the Supreme Court challenged the CA’s decision and the denial of the motion for reconsideration.
Factual Allegations Supporting Respondents’ Complaint
Respondents purchased lots in Sta. Clara Subdivision in 1974 and allege they never became members of SCHA. Prior to March 1998, non-members were issued non-member gatepass stickers; in mid-March 1998 SCHA’s board disseminated a resolution restricting gate stickers to members in good standing. On three occasions respondents’ household members were required by SCHA security to show driver’s licenses for entry despite personal knowledge and known residence locations; on March 29, 1998 Victor Gaston was prevented from entering when guards lowered the gate and demanded his driver’s license. The complaint alleges humiliation and moral damages and seeks damages and injunctive relief.
Petitioners’ Grounds for Dismissal and Theories
Petitioners argued: (1) the dispute is an intra-corporate controversy falling within the original and exclusive jurisdiction of the Home Insurance and Guaranty Corporation (HIGC) (now HLURB) pursuant to RA 580, EO No. 535, and PD 902-A; (2) SCHA’s Articles of Incorporation and By-laws provide that all subdivision landowners are automatically members, such that the proper forum is HIGC; and (3) lack of cause of action (damnum absque injuria), alleging respondents did not assert they were actually prevented from entering their residence.
Trial Court Proceedings and Rulings
The RTC denied petitioners’ motion to dismiss and their motion for reconsideration, concluding that the complaint did not present an intra-corporate controversy because respondents denied membership in SCHA and that HIGC therefore lacked jurisdiction. The RTC did not, at that stage, resolve all subsidiary contentions on lack of cause of action but later denied a subsequent motion to dismiss for lack of cause of action. Petitioners filed a certiorari petition with the CA, which was denied; CA affirmed that the RTC had jurisdiction and that the complaint stated a cause of action.
Court of Appeals’ Ruling (as Affirmed by the Supreme Court)
The CA dismissed petitioners’ contention that the case was intra-corporate and under HIGC jurisdiction, held the complaint did state a cause of action, and emphasized that questions of jurisdiction and cause of action must be determined from the allegations in the complaint, not the defendant’s theories or defenses. The CA’s decision and denial of petitioners’ motion for reconsideration were affirmed by the Supreme Court.
Legal Framework on HIGC/HLURB Jurisdiction over Homeowners’ Disputes
RA 580 and PD 902-A originally vested the SEC—and by subsequent Executive Order No. 535, the HIGC—with regulatory and adjudicative authority over homeowners’ associations, including original and exclusive jurisdiction over controversies arising from intra-corporate or partnership relations. The HIGC promulgated Revised Rules defining types of disputes triable by it (including intra-corporate controversies and cases concerning the association’s right to exist). Those HIGC powers were later transferred to HLURB under RA 8763. The Court emphasizes that HIGC/HLURB jurisdiction is limited to controversies arising out of intra-corporate relations among members, between members and the association, or between the association and the state regarding corporate existence.
Freedom of Association and the Right Not to Associate
The Court applied the 1987 Constitution’s protection of freedom of association (Art. III, Sec. 8), which includes the corollary right not to associate. The Court held that membership in a homeowners’ association cannot be unilaterally imposed by including landowners in Articles of Incorporation or By-laws without express or implied consent. The right to associate contemplates voluntary consent; the mere approval of Articles of Incorporation by the SEC is not an operative act that creates membership in the absence of the individual homeowner’s assent.
Privity of Contract and Title Annotations Distinction
The Court distinguished cases where title annotations created binding obligations (e.g., Bel Air Village Association, Inc. v. Dionisio) from the present facts: respondents’ Transfer Certificates of Title (TCTs) obtained in 1974 contained no annotation of automatic membership in SCHA, and the record lacked other evidence of respondents’ consent to membership. Additionally, the longstanding practice of issuing non-member gatepass stickers to respondents and other homeowners demonstrated SCHA’s recognition that some landowners were non-members despite its Articles and By-laws.
Jurisdictional Determination Based on Complaint Allegations
The Court reiterated the settled rule that subject-matter jurisdiction is determined by the allegations in the complaint and cannot be defeated by defenses or alternative theories set forth by the defendant. Because the complaint expressly alleged that respondents were not members of SCHA and sought redress for alleged impairment of access and resulting humiliation, the dispute as framed was not an intra-corporate controversy within HIGC/HLURB jurisdiction. Petitioners’ assertion that respondents constituted the “general public” for purposes of a different HIGC rule was rejected: the relevant rule’s third category ad
...continue readingCase Syllabus (G.R. No. 141961)
Caption and Nature of Case
- Petition for Review to the Supreme Court from the Court of Appeals (CA) decision and resolution in CA-G.R. SP No. 49130.
- Petitioners: Sta. Clara Homeownersa Association (SCHA) through its Board of Directors (named directors listed), Security Guard Capillo, “John Doe,” and Santa Clara Estate, Inc.
- Respondents: Spouses Victor Ma. Gaston and Lydia Gaston.
- Relief sought by petitioners: Review of the CA decision which affirmed the Regional Trial Court (RTC) denial of motion to dismiss and which upheld trial court jurisdiction and sufficiency of cause of action.
- Decretal portion of CA decision: “WHEREFORE, the petition is DISMISSED for lack of merit. The assailed Orders of the trial court are AFFIRMED. No costs.”
- The CA resolution denied petitioners’ motion for reconsideration.
Statement of the Case (Procedural Posture)
- Private respondents filed Complaint for damages with preliminary injunction/mandatory preliminary injunction and TRO before RTC, Negros Occidental at Bacolod City (Civil Case No. 98-10217), raffled to RTC-Branch 49.
- Trial court denied petitionersa motion to dismiss for lack of jurisdiction and later refused to dismiss for lack of cause of action; petitioners filed motion for reconsideration and additional motions which were denied.
- Petitioners elevated the matter to the Court of Appeals via Petition for Certiorari; the CA dismissed the petition and affirmed the RTC orders; petitioners filed Motion for Reconsideration with CA which was denied.
- Petitioners brought the present Petition for Review to the Supreme Court assailing the CA Decision (Aug. 31, 1999) and CA Resolution (Feb. 11, 2000).
Facts as Alleged in the Complaint
- Private respondents are residents of San Jose Avenue, Sta. Clara Subdivision, Mandalagan, Bacolod City; purchased lots sometime in 1974.
- At time of purchase, there was allegedly no mention or requirement of membership in any homeownersa association.
- Private respondents represented they remained non-members of SCHA from time of purchase.
- Arrangement existed that non-member homeowners were issued “non-member” gatepass stickers for vehicles for identification by security guards; arrangement remained until mid-March 1998.
- In mid-March 1998, SCHA disseminated a board resolution decreeing that only members in good standing would be issued vehicle stickers.
- On three separate incidents, Victor M. Gaston (son of private respondents) was required by guards to show driver’s license to enter subdivision and residence, despite guards knowing him and location of residence.
- On 29 March 1998, Victor M. Gaston was allegedly prevented from entering when security guards lowered subdivision gate and demanded his driver’s license.
- Private respondents alleged moral damage and embarrassment caused by petitioners’ acts in presence of other subdivision owners.
- On 3 April 1998 counsel for petitioners informed court of forthcoming motion to dismiss and assured unrestricted access pending TRO hearing; on 8 April 1998 petitioners filed motion to dismiss claiming lack of jurisdiction (intra-corporate dispute under RA 580 as amended and HIGC rules) and citing SCHA Articles of Incorporation and By-laws declaring automatic membership of all homeowners.
- Petitioners asserted private respondents became members in 1974 automatically and non-payment of dues did not nullify membership; alternatively, petitioners claimed HIGC jurisdiction under Section 1(a), Rule II of HIGC Rules.
- Trial court (6 July 1998) denied petitioners’ motion to dismiss finding no intra-corporate controversy since complaint alleged private respondents never joined association and HIGC had no jurisdiction.
- Petitioners filed motion for reconsideration adding lack of cause of action (damnum absque injuria) ground; court of first instance denied motion without ruling on lack of cause of action; subsequent motion to resolve lack of cause of action denied (order of 8 Sept. 1998).
- Petitioners filed petition for certiorari with CA on 24 September 1998.
Ruling of the Court of Appeals (Summarized)
- The CA dismissed petitioners’ petition and held that the RTC had jurisdiction over the dispute.
- The CA rejected petitioners’ contention of intra-corporate controversy between SCHA and respondents.
- The CA held that the Complaint stated a cause of action.
- The CA reaffirmed that jurisdiction and cause of action are determined by allegations in the complaint, not by defenses or theories in the answer or motion to dismiss.
Issues Presented to the Supreme Court
- Whether the Court of Appeals erred in upholding trial court jurisdiction to declare null and void the SCHA board resolution limiting sticker issuance to members in good standing.
- Whether private respondents are members of SCHA.
- Whether CA erred in not ordering dismissal of Complaint for lack of cause of action.
- Restatement by the Court: core issues are (1) Did the RTC have jurisdiction over the Complaint? and (2) Did the Complaint state a cause of action?
Supreme Court Ruling — Summary of Holding
- Petition is without merit; CA Decision and Resolution are AFFIRMED.
- The Supreme Court held: (1) on the allegations of the Complaint, RTC had jurisdiction; (2) the Complaint sufficiently alleged a cause of action; and therefore the Complaint could not be dismissed on grounds of lack of jurisdiction or lack of cause of action by motion to dismiss.
- Costs were imposed against petitioners.
Analysis — Jurisdiction (HIGC / HLURB Background and Applicability)
- HIGC origins and role:
- HIGC (initial name variants recounted) was created pursuant to Republic Act 580.
- Originally, SEC had administr