1. MARIA LUISA PARK ASSOCIATION, INC., Petitioner, vs. SAMANTHA MARIE T. ALMENDRAS and PIA ANGELA T. ALMENDRAS, Respondents. [G.R. No. 171763, June 5, 2009, QUISUMBING, J.:] J.:] NATURE: Petition for review on certiorari FACTS: 1. respondent respondents s Samantha Samantha Marie T. Almend Almendras ras and Pia Angela Angela T. Almend Almendras ras purchased purchased from from MRO Development Corporation a residential lot in Cebu City 2. Almendras Almendras then then filed with Maria Maria Luisa Park Park Association Association Inc Inc an application application to construct construct a residenti residential al house which was approved 3. Upon ocular ocular inspection inspection MLPAI found found out that Almendras Almendras violated violated the prohibition prohibition against against multi-dwell multi-dwelling ing 4. MLPAI MLPAI sent a letter letter to the the respondents respondents,, demanding demanding that they they rectify rectify the structu structure re a. respondent respondents, s, as represented represented by their their father father Ruben D. Almendras Almendras denied denied having having violated MLPAI’ MLPAI’s s Deed of Restriction b. MLPAI, MLPAI, in its reply, reply, pointed pointed out respondents respondents’’ specific specific violations violations of the subdivisi subdivision on rules: i. installatio installation n of a second second water meter meter and tapping tapping the subdivis subdivision’s ion’s main main water water pipeline pipeline ii. constructi construction on of “two separate separate entrance entrances s that are mutually mutually exclusive exclusive of each each other.” other.” 5. Respondent Respondents s filed a complaint complaint with the RTC RTC of Cebu for Injunctio Injunction, n, Declatory Declatory Relief, Relief, Annulment Annulment of Provisions of Articles and By-Laws with Prayer for Issuance of a Temporary Restraining Order (TRO)/Preliminary Injunction. a. MLPAI MLPAI moved for for dismissal dismissal of the complain complaintt on the ground ground of lack lack of jurisdic jurisdiction tion and failure to comply with the arbitration clause provided for in MLPAI’s by-laws. b. TC dismissed dismissed the the complaint complaint holding holding that it was the Housing Housing and and Land Use Regulat Regulatory ory Board Board that has original and exclusive jurisdiction over the case. c. MR file filed d by respon responden dents ts was was deni denied. ed. 6. CA declared declared the decision decision of RTC RTC null and void, void, and orderin ordering g it to take cogniza cognizance nce of the case case ISSUE: Whether the HLURB and not the RTC has jurisdiction over the case. HELD: the Home Insurance and Guaranty Corporation (HIGC), now HLURB, has original and exclusive jurisdiction over the case. Petition Petition Granted. 1. Pursuant Pursuant to EO No 535, the HIGC HIGC assumed assumed the regulatory regulatory and and adjudicative adjudicative functions functions of the the SEC over homeowners’ associations 2. In additi addition on to the powers powers and function functions s vested vested under the Home Financ Financing ing Act, Act, the Corporation, shall have among others, the following additional powers: (a) . . . and exercise all the powers, authorities authorities and responsibilities that are are vested on the the Securitie Securities s and Exchange Commission Commission with respect to homeowners homeowners associations, associations, the provision provision of Act 1459, as amended by P.D. 902-A, to the the contrary notwithstanding; (b) (b) To regu regula late te and and supe superv rvis ise e the the acti activi viti ties es and and oper operat ation ions s of all all hous houseo eown wner ers s associations registered in accordance therewith; 2. HIGC also assume assumed d the SEC’s original original and exclusive exclusive jurisdict jurisdiction ion under Section Section 5 of Presidential Presidential Decree Decree No. 902-A to hear and decide cases involving: b) Controver Controversies sies arising out of intra-corporate intra-corporate or partnership partnership relations, relations, between and among stockholde stockholders, rs, members, members, or associate associates; s; between any and/or all of them and the corporation, part partne ners rshi hip p or assoc associa iati tion on of which which they they are are stoc stockh khol older ders, s, memb member ers s or asso associ ciat ates es,, respectively; and between such corporation, partnership or association and the state insofar as it concerns their individual franchise or right to exist as such entity; 3. PRESEN PRESENT T CASE: CASE: respond respondent ents s are member members s of MLPAI MLPAI as they have even admitte admitted d it. Ther Therefo efore, re, as correctly ruled by the trial court, the case involves a controversy between the homeowners’ association and some of its members. members. Thus, the exclusive and original jurisdiction jurisdiction lies with the HLURB. a. Sta. Clara Homeowners’ Association v. Gaston: Gaston : . . . the HIGC exercises limited jurisdiction over homeowners' disputes. disputes . The law confines its authority to controversies that arise from any of the following intra-corporate relations: relations: (1) between and among members of the association; (2) between between any and/or all of them and the association association of which they are members; members; and (3) between the association and the state insofar as the controversy concerns its right to exist as a corporate entity. 4. The extent extent to which the HLURB HLURB has been vested vested with quasi-jud quasi-judicial icial authority authority must must also be determined determined by referring to Section 3 of P.D. No. 957:
SEC. 3. National Housing Authority . – The National Housing Authority shall have exclusive jurisdiction to regulate the real estate trade and business in accordance with the provisions of this Decree. 5. In the exercise of its powers, the HLURB must commonly interpret and apply contracts and determine the rights of private parties under such contracts. This ancillary power is no longer a uniquely judicial function, exercisable only by the regular courts. a. The respondents neither asked for the interpretation of the questioned by-laws nor did they allege that the same is doubtful or ambiguous and require judicial construction. What they seek to accomplish is to have a particular provision of the MLPAI’s by-laws nullified and thereafter absolve them from any violations of the same. b. The legality of the by-laws in its entirety was never an issue in the instant controversy but merely the provision prohibiting multi-dwelling which respondents assert they did not violate. There is no justiciable controversy here that would warrant declaratory relief, or even an annulment of contracts. 6. under the doctrine of primary administrative jurisdiction, courts cannot or will not determine a controversy where the issues for resolution demand the exercise of sound administrative discretion requiring the special knowledge, experience, and services of the administrative tribunal to determine technical and intricate matters of fact a. the HLURB has the expertise to resolve the basic technical issue of whether the house built by the respondents violated the Deed of Restriction, specifically the prohibition against multidwelling. 7. the parties failed to abide by the arbitration agreement in the MLPAI by-laws. a. Article XII of the MLPAI by-laws entered into by the parties provides that any dispute or claim against the Association or any of its officers and governors shall first be settled amicably. i. If amicable settlement fails, such dispute shall be brought by the member to an arbitration panel for final settlement. The arbitral award shall be valid and binding between the parties unless repudiated on grounds that the same was procured through fraud or violence, or that there are patent or gross errors in the tribunal’s findings of facts upon which the decision was based. ii. Respondents, being members of MLPAI, are bound by its by-laws, and are expected to abide by it in good faith iii. The parties in the case made no earnest effort to resolve their differences in accordance with the arbitration clause provided for in their by-laws. 1. Mere exchange of correspondence will not suffice much less satisfy the requirement of arbitration. 8. Arbitration being the mode of settlement between the parties expressly provided for in their bylaws, the same should be respected. a. Unless an arbitration agreement is such as absolutely to close the doors of the courts against the parties, the courts should look with favor upon such amicable arrangements b. Arbitration is one of the alternative methods of dispute resolution that is now rightfully vaunted as “the wave of the future” in international relations, and is recognized worldwide. c. To brush aside a contractual agreement calling for arbitration in case of disagreement between the parties would therefore be a step backward.
