Case Summary (UDK-15143)
Background and Nature of the Dispute
The dispute originated from a Complaint filed on August 8, 2009, by the respondents, members of VRHAI, against the association and its officers (petitioners). The respondents sought injunctive relief, annulment of certain construction rules and fees, damages, and issuance of a Temporary Restraining Order (TRO) or preliminary injunction. The core issue involved VRHAI’s refusal to grant clearance for the construction of a duplex on respondents’ lot in Vermont Royale Village, based on the association’s Construction Rules and Regulations (February 2008) and the Deed of Restrictions that limited construction to single-family dwellings.
Administrative Proceedings and Initial Rulings
Despite respondents securing a building permit from the City, VRHAI denied clearance for the duplex and reaffirmed the restriction via a Board Resolution dated June 21, 2009. Respondents obtained a TRO/Cease and Desist Order on January 14, 2010, from the HLURB enjoining the petitioners from blocking construction, subject to compliance with VRHAI’s requirements. The Housing and Land Use Arbiter, Joselito F. Melchor, ruled in favor of respondents on June 29, 2011, declaring the Board Resolution void as it contradicted the zoning ordinance of Antipolo City, which permitted two-family dwellings within the medium density residential zone (R-2). The Arbiter ordered the issuance of permits enabling duplex construction and awarded moral and exemplary damages, as well as attorney’s fees.
Appeals and Affirmations
Petitioners appealed to the HLURB, contesting the admittance of the zoning ordinance, the jurisdiction of HLURB to award damages, and the amount and basis of damages awarded. On June 28, 2012, the HLURB denied the appeal, affirming the decision of the Arbiter. The Court of Appeals further affirmed this ruling on March 21, 2016, dismissing the petition for lack of merit. The CA emphasized that petitioners acted in bad faith, violated respondents’ property rights, and discriminated by enforcing construction prohibitions after issuance of the building permit.
Issues for Supreme Court Review
The petitioners raised two issues:
- Whether the Court of Appeals correctly ruled that the HLURB has jurisdiction to grant damages and attorney’s fees in intra-association disputes;
- Whether the HLURB had legal basis to grant moral and exemplary damages and attorney’s fees.
Jurisdiction of HLURB to Grant Damages and Attorney’s Fees
The Supreme Court clarified that the HLURB is empowered under Section 20(d) of Republic Act No. 9904 to hear and decide intra-association and inter-association disputes. While parties may file independent civil or criminal cases before regular courts, the claims for damages and attorney’s fees incident to the principal relief fall within HLURB’s quasi-judicial jurisdiction. The Court rejected the petitioners’ contention that such jurisdiction is exclusive to cases involving developers and buyers under P.D. Nos. 1344 and 957, holding that HLURB’s power to award damages applies equally to intra-association conflicts. It emphasized the purpose of avoiding multiplicity of suits, promoting expediency, and preventing conflicting rulings between tribunals.
Legal Basis for Award of Moral and Exemplary Damages and Attorney’s Fees
The Court upheld the factual findings that petitioners acted in bad faith, discriminated against respondents, and violated their property rights by enforcing construction restrictions after building permits were issued. Under Article 2220 of the Civil Code, moral damages are proper when willful injury is inflicted. Exemplary damages serve as punishment and public correction pursuant to Article 1229. Given petitioners’ conduct, awarding damages was justified. The grant of attorney’s fees and litigation expenses was supported by Article 2208(2) of the Civil Code, recognizing such recovery when a defendant’s
...continue readingCase Syllabus (UDK-15143)
Case Background and Procedural History
- The case originated from a Complaint dated August 8, 2009, filed before the Housing and Land Use Regulatory Board (HLURB) by respondents who were members of the Vermont Royale Homeowners Association, Inc. (VRHAI), against VRHAI and several individual petitioners who were officers and members of its board.
- Respondents sought injunction, annulment or revocation of VRHAI’s construction rules and a Board Resolution dated June 21, 2009 prohibiting multiple dwelling units on single lots, damages, and issuance of a temporary restraining order (TRO) and/or preliminary injunction.
- Petitioners denied respondents’ demand based on existing Construction Rules and Regulations, and Deed of Restrictions limiting one-family dwellings per lot, which were allegedly in effect and valid.
- Despite VRHAI's refusal to issue clearance for a duplex, respondents secured a building permit from the city but were still obstructed by VRHAI from commencing construction.
- HLURB issued a TRO/ Cease and Desist Order (CDO) in January 2010 to enjoin petitioners from obstructing respondents’ construction following submitted and approved plans, subject to compliance with other VRHAI rules.
- The Housing and Land Use Arbiter ruled in favor of respondents in June 2011, voiding VRHAI's Board Resolution and the restriction in respondents’ titles inconsistent with the Antipolo City zoning ordinance, and awarding damages and attorney’s fees.
- HLURB upheld the Arbiter’s ruling on appeal in June 2012.
- The Court of Appeals (CA) affirmed the HLURB decision in March 2016, emphasizing petitioners’ bad faith conduct and violation of respondents’ property rights.
- Petitioners filed a Petition for Review on Certiorari before the Supreme Court challenging especially the award of damages and attorney’s fees.
Facts Concerning the Property and Construction Restriction
- Vermont Royale Village was governed by a registered homeowners association (VRHAI).
- Construction Rules and Regulations, adopted in February 2008, restricted the construction of multiple dwelling units (e.g., duplexes) per lot, citing Deed of Restrictions annotated on the lot titles.
- Respondents applied for clearance to construct a duplex but were denied by VRHAI due to said restrictions.
- Respondents apparently circumvented VRHAI’s denial by securing a city building permit nonetheless.
- VRHAI reaffirmed the ban through the June 21, 2009 Board Resolution, effectively prohibiting respondents’ duplex construction.
- Despite some existing duplexes built in Vermont, VRHAI justified its prohibition citing misfeasance of past officials.
- Respondents filed the complaint alleging violation of their property rights and seeking relief including injunction and annulment of the restrictive rules.
Jurisdictional Issues on HLURB’s Authority to Award Damages and Attorney’s Fees
- Petitioners contended HLURB lacked jurisdiction to award moral and exemplary damages and attorney’s fees in intra-association disputes, relying on the limited scope under Presidential Decrees and R.A. No. 9904.
- Petitioners argued that damages awards belong within the competence of regular courts and cited precedent cases (Spouses Osea v. Ambrosio and C.T. Torres Enterprises, Inc. v. Hibionada) applying only to subdivision lot or condominium buyers versus developers’ disputes.
- They emphasized R.A. No. 9904 stipulates HLURB’s jurisdiction over intra-association disputes, “with