EN BANC

[G.R. No. 71169. December 22, 1988.]

JOSE D. SANGALANG and LUTGARDA D. SANGALANG, petitioners, FELIX C. GASTON

and DOLORES R. GASTON, JOSE V. BRIONES and ALICIA R. BRIONES, and BEL-AIR
VILLAGE ASSOCIATION, INC., intervenors-petitioners, vs. INTERMEDIATE APPELLATE
COURT, and AYALA CORPORATION, respondents.

[G.R. No. 74376.]

BEL-AIR VILLAGE ASSOCIATION, INC., petitioner, vs. THE INTERMEDIATE APPELLATE

COURT, ROSARIO DE JESUS TENORIO, and CECILIA GONZALVEZ, respondents.

[G.R. No. 76394.]

BEL-AIR VILLAGE ASSOCIATION, INC., petitioner, vs. THE COURT OF APPEALS, and
EDUARDO and BUENA ROMUALDEZ, respondents.

[G.R. No. 78182.]

BEL-AIR VILLAGE ASSOCIATION, INC., petitioner, vs. COURT OF APPEALS, DOLORES

FILLEY, and J. ROMERO & ASSOCIATES, respondents.

[G.R. No. 82281.]

BEL-AIR VILLAGE ASSOCIATION, INC., petitioner, vs. COURT OF APPEALS, VIOLETA

MONCAL, and MAJAL DEVELOPMENT CORPORATION, respondents.

Sangco, Anastacio, Castaeda & Duran Law Office for petitioners & private intervenors-
petitioners.
Raul S. Sison Law Offices for intervenor-petitioner Bel-Air Village Association, Inc.
Renato L. Dela Fuente for respondent Ayala Corporation.
Raul S. Sison Law Offices for petitioner.
Sergio L. Guadiz for private respondents.
Raul S. Sison Law Offices for petitioner.
Gruba, Tanlimco, Lamson and Apuhin Law Offices for respondents.
Funk & Associates for petitioners.
Tee Tomas & Associates for respondents.
Funk & Associates for petitioner.
Castillo, Laman, Tan & Associates for private respondents.

DECISION

SARMIENTO, J p:
Before the Court are five consolidated petitions, 1 docketed as G.R. Nos. 71169, 74376, 76394,
78182, and 82281 hereof, in the nature of appeals (by certiorari under Rule 45 of the Rules of
Court) from five decisions of the Court of Appeals, denying specific performance and damages.
LexLib
The proceedings were commenced at the first instance by Jose Sangalang, joined by his wife
Lutgarda Sangalang, both residents of No. 110 Jupiter Street, Makati, Metro Manila (G.R. No.
71169) to enforce by specific performance restrictive easement upon property, specifically the
Bel-Air Village subdivision in Makati, Metro Manila, pursuant to stipulations embodied in the
deeds of sale covering the subdivision, and for damages. Later, the Sangalangs were joined by
Felix Gaston, a resident of No. 64 Jupiter Street of the same municipality, and by Mr. and Mrs.
Jose and Alicia Briones, both of No. 66 Jupiter Street. Pending further proceedings, the Bel-Air
Village Association, Inc. (BAVA), an incorporated homeowners' association, entered its
appearance as plaintiff-in-intervention.
BAVA itself had brought its own complaints, four in number, likewise for specific performance and
damages to enforce the same "deed restrictions." (See G.R. Nos. 74376, 76394, 78182, and
82281.)
ANTECEDENTS FACTS
I. G.R. No. 71169
The facts are stated in the decision appealed from. We quote:
xxx xxx xxx
(1) Bel-Air Village is located north of Buendia Avenue extension (now Sen. Gil J. Puyat Ave.)
across a stretch of commercial block from Reposo Street in the west up to Zodiac Street in the
east. When Bel-Air Village was planned, this block between Reposo and Zodiac Streets adjoining
Buendia Avenue in front of the village was designated as a commercial block. (Copuyoc, TSN, p.
10, Feb. 12, 1982)
(2) Bel-Air Village was owned and developed into a residential subdivision in the 1950s by
Makati Development Corporation (hereinafter referred to as MDC), which in 1968 was merged
with appellant Ayala Corporation.
(3) Appellees-spouses Sangalang reside at No. 110 Jupiter Street between Makati Avenue
and Reposo Street; appellees-spouses Gaston reside at No. 64 Jupiter Street between Makati
Avenue and Zodiac Street; appellees-spouses Briones reside at No. 66 Jupiter Street also
between Makati Avenue and Zodiac Street; while appellee Bel-Air Village Association, Inc.
(hereinafter referred to as BAVA) is the homeowners' association in Bel-Air Village which takes
care of the sanitation, security, traffic regulations and general welfare of the village.
(4) The lots which were acquired by appellees Sangalang and spouse Gaston and spouse
and Briones and spouse in 1960, 1957 and 1958, respectively, were all sold by MDC subject to
certain conditions and easements contained in Deed Restrictions which formed a part of each
deed of sale. The pertinent provisions in said Deed Restrictions, which are common to all lot
owners in Bel-Air Village, are as follows:
"I BEL-AIR ASSOCIATION
The owner of this lot/s or his successors in interest is required to be and is automatically a
member of the Bel-Air Association and must abide by such rules and regulations laid down by the
Association in the interest of the sanitation, security and the general welfare of the community.
"The association will also provide for and collect assessments, which will constitute as a lien on
the property junior only to liens of the government for taxes and to voluntary mortgages for
sufficient consideration entered into in good faith.
"II USE OF LOTS
"Subject to such amendments and additional restrictions, reservations, servitudes, etc., as the
Bel-Air Association may from time to time adopt and prescribe, this lot is subject to the following
restrictions:
"a. This lot/s shall not be subdivided. However, three or more lots may be consolidated and
subdivided into a lesser number of lots provided that none of the resulting lots be smaller in area
than the smallest lot before the consolidation and that the consolidation and subdivision plan be
duly approved by the governing body of the Bel-Air Association.
"b. This lot/s shall only be used for residential purposes.
"c. Only one single family house may be constructed on a single lot, although separate
servants' quarters or garage may be built.
"d. Commercial or advertising signs shall not be placed, constructed, or erected on this lot.
Name plates and professional signs of homeowners are permitted so long as they do not exceed
80 x 40 centimeters in size.
"e. No cattle, pigs, sheep, goats, ducks, geese, roosters or rabbits shall be maintained in the
lot, except that pets may be maintained but must be controlled in accordance with the rulings of
the Association. The term "pets" includes chickens not in commercial quantities.
"f. The property is subject to an easement of two (2) meters within the lot and adjacent to
the rear and sides thereof not fronting a street for the purpose of drainage, sewage, water and
other public facilities as may be necessary and desirable; and the owner, lessee or his
representative shall permit access thereto by authorized representatives of the Bel-Air
Association or public utility entities for the purposes for which the easement is created.
"g. This lot shall not be used for any immoral or illegal trade or activity.
"h. The owner and/or lessee of this lot/s shall at all times keep the grass cut and trimmed to
reduce the fire hazard of the property.
xxx xxx xxx
"VI TERM OF RESTRICTIONS
"The foregoing restrictions shall remain in force for fifty years from January 15, 1957, unless
sooner cancelled in its entirety by two thirds vote of members in good standing of the Bel-Air
Association. However, the Association may, from time to time, add new ones, amend or abolish
particular restrictions or parts thereof by majority rule.
"VII ENFORCEMENT OF RESTRICTIONS
"The foregoing restrictions may be enjoined and/or enforced by court action by the Bel-Air
Association, or by the Makati Development Corporation or its assigns, or by any registered owner
of land within the boundaries of the Bel-Air Subdivision (Sub-division plan PSD-49226 and Lot 7-
B, Psd-47848) or by any member in good standing of the Bel-Air association." (Exh. 1-b; Exh. 22,
Annex "B"). (Appellant's Brief, pp. 4-6)
(5) When MDC sold the above-mentioned lots to appellees' predecessors-in-interest, the
whole stretch of the commercial block between Buendia Avenue and Jupiter Street, from Reposo
Street in the west to Zodiac Street in the east, was still undeveloped. Access, therefore, to Bel-Air
Village was opened to all kinds of people and even animals. So in 1966, although it was not part
of the original plan, MDC constructed a fence or wall on the commercial block along Jupiter
Street. In 1970, the fence or wall was partly destroyed by typhoon "Yoling." The destroyed
portions were subsequently rebuilt by the appellant. (Copuyoc, TSN, pp. 31-34, Feb. 12, 1982).
When Jupiter Street was widened in 1972 by 3.5 meters, the fence or wall had to be destroyed.
Upon request of BAVA, the wall was rebuilt inside the boundary of the commercial block.
(Copuyoc, TSN, pp. 44-47, Feb. 12, 1982).
(6) When the appellant finally decided to subdivide and sell the lots in the commercial block
between Buendia and Jupiter, BAVA wrote the appellant on May 9, 1972, requesting for
confirmation on the use of the commercial lots. The appellant replied on May 16, 1972, informing
BAVA of the restrictions intended to be imposed in the sale and use of the lots. Among these
restrictions are: that the building shall have a set back of 19 meters; and that with respect to
vehicular traffic along Buendia Avenue, entrance only will be allowed, and along Jupiter Street
and side streets, both entrance and exit will be allowed.
(7) On June 30, 1972, appellant informed BAVA that in a few months it shall subdivide and
sell the commercial lots bordering the north side of Buendia Avenue Extension from Reposo
Street up to Zodiac Street. Appellant also informed BAVA that it had taken all precautions and will
impose upon the commercial lot owners deed restrictions which will harmonize and blend with the
development and welfare of Bel-Air Village. Appellant further applied for special membership in
BAVA of the commercial lot owners. A copy of the deed restrictions for the commercial lots was
also enclosed. The proposed deed restrictions shall include the 19 meter set back of buildings
from Jupiter Street, the requirement for parking space within the lot of one (1) parking slot for
every seventy five (75) meters of office space in the building and the limitation of vehicular traffic
along Buendia to entrance only, but allowing both vehicular entrance and vehicular exit through
Jupiter Street and any side street.
In its letter of July 10, 1972, BAVA acknowledged the above letter of appellant and informed the
latter that the application for special membership of the commercial lot owners in BAVA would be
submitted to BAVA's board of governors for decision.
(8) On September 25, 1972, appellant notified BAVA that, after a careful study, it was finally
decided that the height limitation of buildings on the commercial lots shall be increased from 12.5
meters to 15 meters. Appellant further informed BAVA that Jupiter Street shall be widened by 3.5
meters to improve traffic flow in said street. BAVA did not reply to said letter, but on January 22,
1973, BAVA wrote a letter to the appellant informing the latter that the Association had assessed
the appellant, as special member of the association, the amount of P40,795.00 (based on 81,590
square meters at P.50 per square meter) representing the membership dues to the commercial lot
owners for the year 1973, and requested the appellant to remit the amount which its board of
governors had already included in its current budget. In reply, appellant on January 31, 1973
informed BAVA that due to the widening of Jupiter Street, the area of the lots which were
accepted by the Association as members was reduced to 76,726 square meters. Thus, the
corresponding dues at P.50 per square meter should be reduced to P38,363.00. This amount,
therefore, was remitted by the appellant to BAVA. Since then, the latter has been collecting
membership dues from the owners of the commercial lots as special members of the Association.
As a matter of fact, the dues were increased several times. In 1980, the commercial lot owners
were already being charged dues at the rate of P3.00 per square meter. (Domingo, TSN, p. 36,
March 19, 1980). At this rate, the total membership dues of the commercial lot owners amount to
P230,178.00 annually based on the total area of 76,726 square meters of the commercial lots.
(9) Meantime, on April 4, 1975, the municipal council of Makati enacted its ordinance No. 81,
providing for the zonification of Makati (Exh. 18). Under this Ordinance, Bel-Air Village was
classified as a Class A Residential Zone, with its boundary in the south extending to the center
line of Jupiter Street (Exh. 18-A).
Thus, Chapter III, Article I, Section 3.03, par. F. of the Ordinance provides:
"F. Bel-Air Village area, as bounded on the N by Polaris and Mercedes streets and on the NE
by Estrella Street; on the SE by Epifanio de los Santos Avenue and on the SW by the center line
of Jupiter Street. Then bounded on the N by the abandoned MRR Pasig Line; on the E by Makati
Avenue; on the S by the center line of Jupiter Street and on the W by the center line of Reposo
Street." (Exh. 18-A)
Similarly, the Buendia Avenue Extension area was classified as Administrative Office Zone with its
boundary in the North-North East Extending also up to the center line of Jupiter Street (Exh. 18-
b).
Thus, Chapter III, Article I, Section 3.05, par. C. of the Ordinance provides:
"C. The Buendia Avenue Extension areas, as bounded on the N-NE by the center line of
Jupiter Street, on the SE by Epifanio de los Santos Avenue; on the SW by Buendia Avenue and
on the NW by the center line of Reposo Street, then on the N-E by Malugay Street; on the SE by
Buendia Avenue and on the W by Ayala Avenue Extension." (Exh. 18-B)
The Residential Zone and the Administrative Office Zone, therefore, have a common boundary
along the center line of Jupiter Street.
The above zoning under Ordinance No. 81 of Makati was later followed under the
Comprehensive Zoning Ordinance for the National Capital Region adopted by the Metro Manila
Commission as Ordinance 81-01 on March 14, 1981 (Exh. 19). However, under this ordinance,
Bel-Air Village is simply bounded in the South-Southeast by Jupiter Street not anymore up to
the center line of Jupiter Street (Exh. B). Likewise, the block-deep strip along the northwest side
of Buendia Avenue Extension from Reposo to EDSA was classified as a High Intensity
Commercial Zone (Exh. 19-c).
Thus, the Zoning District Boundaries Makati, in Annex B of the Ordinance provides:
"R-1 Low Intensity Residential.
xxx xxx xxx
"4. Bel-Air 1, 3, 4
Bounded on the North J.P. Rizal and Amapola St.
South Rockwell
Northwest P. Burgos
Southeast Jupiter
Southwest Epifanio de los Santos Ave. (EDSA).
5. Bel-Air 2
Bounded on the Northwest J.P. Rizal
Southwest Makati Avenue
South Jupiter
Southeast Pasig Line
East South Avenue" (Exh. 19-b)
xxx xxx xxx
"C-3 High Intensity Commercial Zone.
"2. A block deep strip along the northwest side of Buendia Ave. Ext. from Reposo to EDSA."
(Exh. 19-c)
Under the above zoning classifications, Jupiter Street, therefore, is a common boundary of Bel-Air
Village and the commercial zone.
(10) Meanwhile, in 1972, BAVA had installed gates at strategic locations across Jupiter Street
which were manned and operated by its own security guards who were employed to maintain,
supervise and enforce traffic regulations in the roads and streets of the village. (Villavicencio,
TSN, pp. 22-25, Oct. 30, 1980; BAVA Petition, par. 11, Exh. 17).
Then, on January 17, 1977, the Office of the Mayor of Makati wrote BAVA directing that, in the
interest of public welfare and for the purpose of easing traffic congestion, the following streets in
Bel-Air Village should be opened for public use:
Amapola Street from Estrella Street to Mercedes Street
Amapola Street junction of Palma Street gate going to J. Villena Street
Mercedes Street from EDSA to Imelda Avenue and Amapola junction
Zodiac Street from Mercedes Street to Buendia Avenue
Jupiter Street from Zodiac Street to Reposo Street connecting Metropolitan Avenue to Pasong
Tamo and V. Cruz Extension intersection
Neptune Street from Makati Avenue to Reposo Street
Orbit Street from F. Zobel Candelaria intersection to Jupiter Street Paseo de Roxas
from Mercedes Street to Buendia Avenue (Exh. 17, Annex A, BAVA Petition)
On February 10, 1977, BAVA wrote the Mayor of Makati, expressing the concern of the residents
about the opening of the streets to the general public, and requesting specifically the indefinite
postponement of the plan to open Jupiter Street to public vehicles. (Exh. 17, Annex B, BAVA
Petition).
However, BAVA voluntarily opened to the public Amapola, Mercedes, Zodiac, Neptune and Paseo
de Roxas streets. (Exh. 17-A, Answer of Makati par. 3-7).
Later, on June 17, 1977, the Barangay Captain of Bel-Air Village was advised by the Office of the
Mayor that, in accordance with the agreement entered into during the meeting on January 28,
1977, the Municipal Engineer and the Station Commander of the Makati Police were ordered to
open for public use Jupiter Street from Makati Avenue to Reposo Street. Accordingly, he was
requested to advise the village residents of the necessity of the opening of the street in the
interest of public welfare. (Exh. 17, Annex E, BAVA Petition)
Then, on June 10, 1977, the Municipal Engineer of Makati in a letter addressed to BAVA advised
the latter to open for vehicular and pedestrian traffic the entire portion of Jupiter Street from
Makati Avenue to Reposo Street (Exh. 17, BAVA Petition, par. 14).
Finally, on August 12, 1977, the municipal officials of Makati concerned allegedly opened,
destroyed and removed the gates constructed/located at the corner of Reposo Street and Jupiter
Street as well as the gates/fences located/constructed at Jupiter Street and Makati Avenue
forcibly, and then opened the entire length of Jupiter Street to public traffic. (Exh. 17, BAVA
Petition, pars. 16 and 17)
(11) Before the gates were removed, there was no parking problem or traffic problem in
Jupiter Street, because Jupiter Street was not allowed to be used by the general public
(Villavicencio, TSN, pp. 24-25, Oct. 30, 1930). However, with the opening of Zodiac Street from
Estrella Street to Jupiter Street and also the opening to the public of the entire length of Jupiter
Street, there was a tremendous increase in the volume of traffic passing along Jupiter Street
coming from EDSA to Estrella Street, then to Zodiac Street to Jupiter Street, and along the entire
length of Jupiter Street to its other end at Reposo Street. (Villavicencio, TSN, pp. 30-32, Oct. 30,
1980)
In the meantime, the purchasers of the commercial lots between Jupiter Street and Buendia
Avenue extension had started constructing their respective buildings in 1974-1975. They
demolished the portions of the fence or wall standing within the boundary of their lots. Many of
the owners constructed their own fences or walls in lieu of the wall and they employed their own
security guards. (TSN, p. 83, Feb. 20, 1931; TSN, pp. 53-54; 72-74, March 20, 1981; TSN, pp.
54-55, July 23, 1981)
(12) Then, on January 27, 1978, appellant donated the entire Jupiter Street from Metropolitan
Avenue to Zodiac Street to BAVA (Exh. 7). However, even before 1978, the Makati Police and the
security force of BAVA were already the ones regulating the traffic along Jupiter Street after the
gates were opened in 1977. (Sancianco, TSN, pp. 26-30, Oct. 2, 1981)
In October, 1979, the fence at the corner of Orbit and Neptune Streets was opened and removed
(BAVA Petition, par. 22, Exh. 17). The opening of the whole stretch of Orbit Street from J.P. Rizal
Avenue up to Imelda Avenue and later to Jupiter Street was agreed to at the conference attended
by the President of BAVA in the office of the Station Commander of Makati, subject to certain
conditions, to wit:
"That, maintenance of Orbit St. up to Jupiter St. shall be shouldered by the Municipality of Makati.
"That, street lights will be installed and maintenance of the same along Orbit St. from J.P. Rizal
Ave. up to Jupiter St. shall be undertaken by the Municipality.
"That for the security of the residents of San Miguel Village and Bel-Air Village, as a result of the
opening of Orbit Street, police outposts shall be constructed by the Municipality of Makati to be
headed by personnel of Station No. 4, in close coordination with the Security Guards of San
Miguel Village and Bel-Air Village." (CF. Exh. 3 to Counter-Affidavit, of Station Commander,
Ruperto Acle. p. 253, records)" (Order, Civil Case No. 34948, Exh. 17-c)
(13) Thus, with the opening of the entire length of Jupiter Street to public traffic, the different
residential lots located in the northern side of Jupiter Street ceased to be used for purely
residential purposes. They became, for all purposes, commercial in character.
(14) Subsequently, on October 29, 1979, the plaintiffs-appellees Jose D. Sangalang and
Lutgarda D. Sangalang brought the present action for damages against the defendant-appellant
Ayala Corporation predicated on both breach of contract and on tort or quasi-delict. A
supplemental complaint was later filed by said appellees seeking to augment the reliefs prayed
for in the original complaint because of alleged supervening events which occurred during the trial
of the case. Claiming to be similarly situated as the plaintiffs-appellees, the spouses Felix C.
Gaston and Dolores R. Gaston, Jose V. Briones and Alicia R. Briones, and the homeowners'
association (BAVA) intervened in the case.
(15) After trial on the merits, the then Court of First Instance of Rizal, Pasig, Metro Manila,
rendered a decision in favor of the appellees the dispositive portion of which is as follows:
"WHEREFORE, judgment is hereby accordingly rendered as follows:
ON PLAINTIFFS' COMPLAINT:
Defendant is ordered to pay to the plaintiffs-spouses Sangalang the following damages:
1. The sum of P500,000.00 as actual and consequential damages;
2. The sum of P2,000,000.00 as moral damages;
3. The sum of P500,000.00 as exemplary damages;
4. The sum of P100,000.00 as attorney's fees; and
5. The costs of suit.
ON INTERVENORS FELIX and DOLORES GASTON'S COMPLAINT:
Defendant is ordered to pay to the spouses Felix and Dolores Gaston, the following damages:
1. The sum of P400,000.00 as consequential damages;
2. The sum of P500,000.00 as moral damages;
3. The sum of P500,000.00 as exemplary damages:
4. The sum of P50,000.00 as attorney's fees; and
5. The costs of suit.
ON INTERVENORS JOSE and ALICIA BRIONES' COMPLAINT:
Defendant is ordered to pay to the spouses Jose and Alicia Briones, the following damages:
1. The sum of P400,000.00 as consequential damages;
2. The sum of P500,000.00 as moral damages;
3. The sum of P500,000.00 as exemplary damages;
4. The sum of P50,000.00 as attorney's fees; and
5. The costs of suit.
ON INTERVENOR BAVA'S COMPLAINT:
Defendant is ordered to pay intervenor BAVA, the following damages:
1. The sum of P400,000.00 as consequential damages;
2. The sum of P500,000.00 as exemplary damages
3. The sum of P50,000.00 as attorney's fees; and
4. The costs of suit.
The above damages awarded to the plaintiffs and intervenors shall bear legal interest from the
filing of the complaint.
Defendant is further ordered to restore/reconstruct the perimeter wall at its original position in
1966 from Reposo Street in the west to Zodiac Street in the east, at its own expense, within SIX
(6) MONTHS from finality of judgment.
SO ORDERED."
(Record on Appeal, pp. 400-401) 2
xxx xxx xxx
On appeal, the Court of Appeals 3 rendered a reversal, and disposed as follows:
ACCORDINGLY, finding the decision appealed from as not supported by the facts and the law on
the matter, the same is hereby SET ASIDE and another one entered dismissing the case for lack
of a cause of action. Without pronouncement as to costs.
SO ORDERED. 4
II. G.R. No. 74376
This petition was similarly brought by BAVA to enforce the aforesaid restrictions stipulated in the
deeds of sale executed by the Ayala Corporation. The petitioner originally brought the complaint
in the Regional Trial Court of Makati, 5 "principally for specific performance, plaintiff [now,
petitioner] alleging that the defendant [now, private respondent] Tenorio allowed defendant
[Tenorio's co-private respondent] Gonzalves to occupy and convert the house at 60 Jupiter Street,
Bel-Air Village, Makati, Metro Manila, into a restaurant, without its knowledge and consent, and in
violation of the deed restrictions which provide that the lot and building thereon must be used only
for residential purposes upon which the prayed-for main relief was for 'the defendants to
permanently refrain from using the premises as commercial and to comply with the terms of the
Deed Restrictions.'" 6 The trial court dismissed the complaint on a procedural ground, i.e.,
pendency of an identical action, Civil Case No. 32346, entitled "Bel-Air Village Association, Inc. v.
Jesus Tenorio." The Court of Appeals 7 affirmed, and held, in addition, that Jupiter Street "is
classified as High density commercial (C-3) zone as per Comprehensive Zoning Ordinance No.
81-01 for National Capital Region," 8 following its own ruling in AC-G.R. No. 66649, entitled "Bel-
Air Village Association, Inc. vs. Hy-Land Realty & Development Corporation, et al."
III. G.R. No. 76394
xxx xxx xxx
Defendants-spouses Eduardo V. Romualdez, Jr. and Buena Tioseco are the owners of a house
and lot located at 108 Jupiter St., Makati, Metro Manila as evidenced by Transfer Certificate of
Title No. 332394 of the Registry of Deeds of Rizal. The fact is undisputed that at the time the
defendants acquired the subject house and lot, several restrictions were already annotated on the
reverse side of their title; however, for purposes of this appeal we shall quote hereunder only the
pertinent ones, to wit:
"(b) This lot/s shall be used only for residential purposes."
xxx xxx xxx
"IV. Term of Restriction.
The foregoing restriction(s) shall remain in force for fifty years from January 15, 1957, unless
sooner cancelled in its entirety by two-thirds vote of the members in good standing of the Bel-Air
Association. However, the Association may from time to time, add new ones, amend or abolish
particular restrictions or parts thereof by majority rule."
During the early part of 1979, plaintiff noted that certain renovations and constructions were being
made by the defendants on the subject premises, for which reason the defendants were advised
to inform the plaintiff of the kind of construction that was going on. Because the defendants failed
to comply with the request of the plaintiff, the latter's chief security officer visited the subject
premises on March 23, 1979 and found out that the defendants were putting up a bake and
coffee shop, which fact was confirmed by defendant Mrs. Romualdez herself. Thereafter, the
plaintiff reminded defendants that they were violating the deed restriction. Despite said reminder,
the defendants proceeded with the construction of the bake shop. Consequently, plaintiff sent
defendants a letter dated April 30, 1979 warning them that if they will not desist from using the
premises in question for commercial purposes, they will be sued for violations of the deed
restrictions.
Despite the warning, the defendants proceeded with the construction of their bake shop. 9
xxx xxx xxx
The trial court 10 adjudged in favor of BAVA. On appeal, the Court of Appeals 11 reversed, on
the strength of its holding in AC-G.R No. 66649 earlier referred to.
BAVA then elevated the matter to the Court by a petition for review on certiorari. The Court 12
initially denied the petition "for lack of merit, it appearing that the conclusions of the respondent
Court of Appeals that private respondents' bake and coffee shop lies within a commercial zone
and that said private respondents are released from their obligations to maintain the lot known as
108 Jupiter Street for residential purposes by virtue of Ordinance No. 81 of the Municipality of
Makati and Comprehensive Zoning Ordinance No. 81-01 of the Metropolitan Manila Commission,
are in accord with law and jurisprudence," 13 for which BAVA sought a reconsideration. Pending
resolution, the case was referred to the Second Division of this Court, 14 and thereafter, to the
Court En Banc en consulta. 15 Per our Resolution, dated April 29, 1988, we consolidated this
case with G.R. Nos. 74376 and 82281. 16
IV. G.R. No. 78182.
xxx xxx xxx
The case stemmed from the leasing by defendant Dolores Filley of her building and lot situated at
No. 205 Reposo Street, Bel-Air Village Makati, Metro Manila to her co-defendant, the advertising
firm J. Romero and Associates, in alleged violation of deed restrictions which stipulated that
Filley's lot could only be used for residential purposes. Plaintiff sought judgment from the lower
court ordering the defendants to "permanently refrain" from using the premises in question "as
commercial" and to comply with the terms of the deed restrictions.
After the proper proceedings, the court granted the plaintiff the sought-for relief with the additional
imposition of exemplary damages of P50,000.00 and attorney's fees of P10,000.00. The trial
court gave emphasis to the restrictive clauses contained in Filley's deed of sale from the plaintiff,
which made the conversion of the building into a commercial one a violation.
Defendants now seek review and reversal on three (3) assignments of errors, namely:
I.
THE TRIAL COURT ERRED IN NOT FINDING THAT THE REGULATIONS PROMULGATED BY
THE MUNICIPAL AUTHORITIES IN MAKATI AND THE MINISTRY OF HUMAN SETTLEMENTS
CHANGING THE CHARACTER OF THE AREAS IN QUESTION HAD RENDERED THE
RESTRICTIVE EASEMENT ON THE TITLE OF THE APPELLANTS VACATED.
II.
THE COURT ERRED IN NOT RULING THAT BECAUSE THE APPELLEE(S) HAD ALLOWED
THE USE OF THE PROPERTY WITHIN THE VILLAGE FOR NON-RESIDENTIAL PURPOSES,
IT IS NOW ESTOPPED FROM ENFORCING THE RESTRICTIVE PROHIBITIONS SUBJECT
MATTER OF THIS CASE.
III.
THE COURT ERRED IN NOT FINDING THAT THERE EXISTED A BILATERAL CONTRACT
BETWEEN THE PARTIES AND THAT SINCE APPELLEE HAD NOT PERFORMED ITS
OBLIGATIONS UNDER THIS ARRANGEMENT THE APPELLANT IN TURN WAS UNDER NO
OBLIGATION TO ANNOTATE THE RESTRICTIVE PROHIBITIONS ON THE BACK OF THE
TITLE.
Appellants anchor their appeal on the proposition that the Bel-Air Village area, contrary to plaintiff-
appellee's pretension of being a strictly residential zone, is in fact commercial and characterize
the restrictions contained in appellant Filley's deed of sale from the appellee as completely
outmoded, which have lost all relevance to the present-day realities in Makati, now the premier
business hub of the nation, where there is a proliferation of numerous commercial enterprises
established through the years, in fact even within the heart of so-called "residential" villages.
Thus, it may be said that appellants base their position on the inexorable march of progress
which has rendered at naught the continued efficacy of the restrictions. Appellant on the other
hand, relies on a rigid interpretation of the contractual stipulations agreed upon with appellant
Filley, in effect arguing that the restrictions are valid ad infinitum.
The lower court quite properly found that other commercial establishments exist in the same area
(in fact, on the same street) but ignored it just the same and said
"The fact that defendants were able to prove the existence of several commercial establishments
inside the village does not exempt them from liability for violating some of the restrictions."
evidently choosing to accord primacy to contractual stipulation. 17
xxx xxx xxx
The Court of Appeals 18 overturned the lower court, 19 likewise based on AC-G.R. No. 66649.
The respondent Court observed also that J. Romero & Associates had been given authority to
open a commercial office by the Human Settlements Regulatory Commission.
V. G.R. No. 82281
The facts of this case have been based on stipulation. We quote:
"COMES NOW, the Parties, assisted by their respective counsel and to this Honorable Court,
respectfully enter into the following stipulations of facts, to wit:
1. The parties admit the personal circumstances of each other as well as their capacities to
sue and be sued.
2. The parties admit that plaintiff (BAVA for short) is the legally constituted homeowners'
association in Bel-Air Subdivision, Makati, Metro Manila.
3. The parties admit that defendant Violeta Moncal is the registered owner of a parcel of
land with a residential house constructed thereon situated at No. 104 Jupiter Street, Bel-Air
Village, Makati, Metro Manila; that as such lot owner, she is a member of the plaintiff association.
4. The parties admit that defendant Majal Development Corporation (Majal for short) is the
lessee of defendant Moncal's house and lot located at No. 104 Jupiter Street.
5. The parties admit that a deed restrictions is annotated on the title of defendant Moncal,
which provides, among others, that the lot in question must be used only for residential
purposes;" that at time Moncal purchased her aforesaid lot in 1959 said deed restrictions was
already annotated in the said title.
6. The parties admit that when Moncal leased her subject property to Majal, she did not
secure the consent of BAVA to lease the said house and lot to the present lessee.
7. The parties admit that along Jupiter Street and on the same side where Moncal's property
is located, there are restaurants, clinics, placement or employment agencies and other
commercial or business establishments. These establishments, however, were sued by BAVA in
the proper court.
8. The parties admit that at the time Moncal purchased the subject property from the Makati
Development Corporation, there was a perimeter wall, running along Jupiter Street, which wall
was constructed by the subdivision owner; that at that time the gates of the entrances to Jupiter
Street were closed to public traffic. In short, the entire length of Jupiter which was inside the
perimeter wall was not then open to public traffic.
9. The parties admit that subsequent thereto, Ayala tore down the perimeter wall to give way
to the commercial building fronting Buendia Avenue (now Gil J. Puyat Avenue).
10. The parties admit that on August 12, 1977, the Mayor of Makati forcibly opened and
removed the street gates constructed on Jupiter Street and Reposo Street, thereby opening said
streets to the public.
11. The parties admit plaintiffs letters of October 10, 23 and 31, 1984; as well as defendants'
letters-reply dated October 17 and 29, 1984. 20
xxx xxx xxx
The trial court 21 dismissed the petitioner's complaint, a dismissal affirmed on appeal, 22
According to the appellate court, the opening of Jupiter Street to human and vehicular traffic, and
the commercialization of the Municipality of Makati in general, were circumstances that had made
compliance by Moncal with the aforesaid "deed restrictions" "extremely difficult and
unreasonable," 23 a development that had excused compliance altogether under Article 1267 of
the Civil Code.
VI. The cases before the Court; the Court's decision.
In brief, G.R. Nos. 74376, 76394, 78182, and 82281 are efforts to enforce the "deed restrictions"
in question against specific residents (private respondents in the petitions) of Jupiter Street and
with respect to G.R. No. 78182, Reposo Street. The private respondents are alleged to have
converted their residences into commercial establishments (a restaurant in G.R. No. 74376, a
bakery and coffee shop in G.R. No. 76394, an advertising firm in G.R. No. 78182; and a
construction company, apparently, in G.R. No. 82281) in violation of the said restrictions. 24
Their mother case, G. R. No. 71169 is, on the other hand, a petition to hold the vendor itself,
Ayala Corporation (formerly Makati Development Corporation), liable for tearing down the
perimeter wall along Jupiter Street that had theretofore closed its commercial section from the
residences of Bel-Air Village and ushering in, as a consequence, the full "commercialization" of
Jupiter Street, in violation of the very restrictions it had authored.
As We indicated, the Court of Appeals dismissed all five appeals on the basis primarily of its
ruling in AC-G.R. No. 66649, "Bel-Air Village, Inc. v. Hy-Land Realty Development Corporation, et
al.," in which the appellate court explicitly rejected claims under the same "deed restrictions" as a
result of Ordinance No. 81 enacted by the Government of the Municipality of Makati, as well as
Comprehensive Zoning Ordinance No. 8101 promulgated by the Metropolitan Manila
Commission, which two ordinances allegedly allowed the use of Jupiter Street both for residential
and commercial purposes. It was likewise held that these twin measures were valid as a
legitimate exercise of police power.
The Court of Appeals' reliance on Ordinance Nos. 81 and 8101 is now assailed in these petitions,
particularly the Sangalang, et al. petition.
Aside from this fundamental issue, the petitioners likewise raise procedural questions. G.R. No.
71169, the mother case, begins with one.
1. G.R. No. 71169
In this petition, the following questions are specifically put to the Court:
May the Honorable Intermediate Appellate Court reverse the decision of the trial court on issues
which were neither raised by AYALA in its Answers either to the Complaint or Supplemental
Complaint nor specifically assigned as one of the alleged errors on appeal? 25
May the Honorable Intermediate Appellate Court arbitrarily ignore the decisive findings of fact of
the trial court, even if uncontradicted and/or documented, and premised mainly on its own
unsupported conclusions totally reverse the trial court's decision? 26
May the Honorable Intermediate Appellate Court disregard the trial court's documented findings
that respondent Ayala for its own self-interest and commercial purposes contrived in bad faith to
do away with the Jupiter Street perimeter wall it put up three times which wall was really intended
to separate the residential from the commercial areas and thereby insure the privacy and security
of Bel-Air Village pursuant to respondent Ayala's express continuing representation and/or
covenant to do so? 27
a.
The first question represents an attack on the appellate court's reliance on Ordinances Nos. 81
and 81-01, a matter not supposedly taken up at the trial or assigned as an error on appeal. As a
rule, the Court of Appeals (then the Intermediate Appellate Court) may determine only such
questions as have been properly raised to it, yet, this is not an inflexible rule of procedure. In
Hernandez v. Andal, 28 it was stated that "an unassigned error closely related to an error
properly assigned, or upon which the determination of the question raised by the error properly
assigned is dependent, will be considered by the appellate court notwithstanding the failure to
assign it as error." 29 In Baquiran v. Court of Appeals, 30 we referred to the "modern trend of
procedure . . . accord[ing] the courts broad discretionary power," 31 and in which we allowed
consideration of matters "having some bearing on the issue submitted which the parties failed to
raise or the lower court ignore[d]." 32 And in Vda. de Javellana v. Court of Appeals, 33 we
permitted the consideration of a "patent error" of the trial court by the Court of Appeals under
Section 7, of Rule 51, of the Rules of Court, 34 although such an error had not been raised in
the brief.
But what we note is the fact that the Ayala Corporation did raise the zoning measures as
affirmative defenses, first in its answer 35 and second, in its brief, 36 and submitted at the trial
as exhibits. 37 There is accordingly no cause for complaint on the part of the petitioners for
Ayala's violation of the Rules.
But while there was reason for the consideration, on appeal, of the said zoning ordinances in
question, this Court nevertheless finds as inaccurate the Court of Appeals' holding that such
measures, had "in effect, [made] Jupiter Street .. a street which could be used not only for
residential purposes," 38 and that "[i]t lost its character as a street for the exclusive benefit of
those residing in Bel-Air Village completely." 39
Among other things, there is a recognition under both Ordinances Nos. 81 and 81-01 that Jupiter
Street lies as the boundary between Bel-Air Village and Ayala Corporation's commercial section.
And since 1957, it had been considered as a boundary not as a part of either the residential or
commercial zones of Ayala Corporation's real estate development projects. Thus, the Bel-Air
Village Association's articles of incorporation state that Bel-Air Village is "bounded on the NE.,
from Amapola St., to de los Santos Ave., by Estrella St., on the SE., from Estrella St., to
Pedestrian Lane, by E. De los Santos Ave., on the SW., from Pedestrian Lane to Reposo St., by
Jupiter Street . . ." 40 Hence, it cannot be said to have been "for the exclusive benefit" of Bel-Air
Village residents.
We come to the perimeter wall then standing on the commercial side of Jupiter Street the
destruction of which opened the street to the public. The petitioners contend that the opening of
the thoroughfare had opened, in turn, the floodgates to the commercialization of Bel-Air Village.
The wall, so they allege, was designed precisely to protect the peace and privacy of Bel-Air
Village residents from the din and uproar of mercantile pursuits, and that the Ayala Corporation
had committed itself to maintain it. It was the opinion of the Court of Appeals, as we said, that
Ayala's liability therefor, if one existed, had been overtaken by the passage of Ordinances Nos.
81 and 82-01, opening Jupiter Street to commerce.
It is our ruling, we reiterate, that Jupiter Street lies as a mere boundary, a fact acknowledged by
the authorities of Makati and the National Government and, as a scrutiny of the records
themselves reveals, by the petitioners themselves, as the articles of incorporation of Bel-Air
Village Association itself would confirm. As a consequence, Jupiter Street was intended for the
use by both the commercial and residential blocks. It was not originally constructed, therefore, for
the exclusive use of either block, least of all the residents of Bel-Air Village, but, we repeat, in
favor of both, as distinguished from the general public.
When the wall was erected in 1966 and rebuilt twice, in 1970 and 1972, it was not for the purpose
of physically separating the two blocks. According to Ayala Corporation, it was put up to enable
the Bel-Air Village Association "better control of the security in the area" 41 and as the Ayala
Corporation's "show of goodwill," 42 a view we find acceptable in the premises. For it cannot be
denied that at that time, the commercial area was vacant, "open for [sic] animals and people to
have access to Bel-Air Village." 43 There was hence a necessity for a wall.
In any case, we find the petitioners' theory, that maintaining the wall was a matter of a contractual
obligation on the part of Ayala, to be pure conjecture. The records do not establish the existence
of such a purported commitment. For one, the subdivision plans submitted did not mention
anything about it. For another, there is nothing in the "deed restrictions" that would point to any
covenant regarding the construction of a wall. There is no representation or promise whatsoever
therein to that effect.
With the construction of the commercial buildings in 1974, the reason for which the wall was built
to secure Bel-Air Village from interlopers had naturally ceased to exist. The buildings
themselves had provided formidable curtains of security for the residents. It should be noted that
the commercial lot buyers themselves were forced to demolish parts of the wall to gain access to
Jupiter Street, which they had after all equal right to use.
In fine, we cannot hold the Ayala Corporation liable for damages for a commitment it did not
make, much less for alleged resort to machinations in evading it. The records, on the contrary, will
show that the Bel-Air Village Association had been informed, at the very outset, about the
impending use of Jupiter Street by commercial lot buyers. We quote:
xxx xxx xxx
1. Exh. I of appellee, the memorandum of Mr. Carmelo Caluag, President of BAVA, dated
May 10, 1972, informing the BAVA Board of Governors and Barrio Council members about the
future use of Jupiter Street by the lot owners fronting Buendia Avenue. The use of Jupiter Street
by the owners of the commercial lots would necessarily require the demolition of the wall along
the commercial block adjoining Jupiter Street.
2. Exh. J of appellee, the minutes of the joint meeting of BAVA Board of Governors and the
Bel-Air Barrio Council where the matter that "Buendia lot owners will have equal rights to use
Jupiter Street," and that Ayala's "plans about the sale of lots and use of Jupiter Street" were
precisely taken up. This confirms that from the start BAVA was informed that the commercial lot
owners will use Jupiter Street and that necessarily the wall along Jupiter Street would be
demolished.
3. Exh. 10, the letter of Mr. Demetrio Copuyoc to the President of BAVA, dated May 16,
1972, expressly stating that vehicular entrance and exit to the commercial lots would be allowed
along Jupiter and side streets.
4. Exhs. 27, 27-A, 27-B, the letter of Atty. Salvador J. Lorayes, dated June 30, 1972, with
enclosed copy of proposed restriction for the commercial lots to BAVA. The proposed restriction
again expressly stated that "Vehicular entrances and exits are allowed thru Jupiter and any side
streets.
5. Exh. L of appellee, the minutes of the meeting of the members of BAVA, dated August 26,
1972, where it is stated "Recently, Ayala Corporation informed the Board that the lots fronting
Buendia Avenue will soon be offered for sale, and that future lot owners will be given equal rights
to use Jupiter Street as well as members of the Association.
6. Exh. 25, the letter of Atty. Lorayes, dated September 25, 1972, informing BAVA of the
widening of Jupiter Street by 3.5 meters to improve traffic flow in said street to benefit both the
residents of Bel-Air and the future owners of the commercial lots. 44
The petitioners cannot successfully rely on the alleged promise by Demetrio Copuyoc, Ayala's
manager, to build a "[f]ence along Jupiter with gate for entrance and/or exit" 45 as evidence of
Ayala's alleged continuing obligation to maintain a wall between the residential and commercial
sections. It should be observed that the fence referred to included a "gate for entrance and or
exit" which would have defeated the purpose of a wall, in the sense the petitioners would put in
one, that is to say, an impenetrable barrier. But as Ayala would point out subsequently, the
proposed fence was not constructed because it had become unnecessary when the commercial
lot owners commenced constructions thereon.
Be that as it may, the Court cannot visualize any purported obligation by Ayala Corporation to
keep the wall on the strength of this supposed promise alone. If truly Ayala promised anything
assuming that Capuyoc was authorized to bind the corporation with a promise it would have
been with respect to the fence. It would not have established the preexisting obligation alleged
with respect to the wall.
Obligations arise, among other things, from contract. 46 If Ayala, then, were bound by an
obligation, it would have been pursuant to a contract. A contract, however, is characterized by a
"meeting of minds between two persons. 47 As a consensual relation, it must be shown to exist
as a fact, clearly and convincingly. But it cannot be inferred from a mishmash of circumstances
alone disclosing some kind of an "understanding," when especially, those disparate
circumstances are not themselves incompatible with contentions that no accord had existed or
had been reached. 48
The petitioners cannot simply assume that the wall was there for the purpose with which they now
give it, by the bare coincidence that it had divided the residential block from the commercial
section of Bel-Air. The burden of proof rests with them to show that it had indeed been built
precisely for that objective, a proof that must satisfy the requirements of our rules of evidence. It
cannot be made to stand on the strength of plain inferences.
b.
This likewise answers the petitioners' second query, whether or not the Court of Appeals had
"arbitrarily ignore[d] the decisive findings of the trial court," 49 i.e., findings pointing to alleged
acts performed by the Ayala Corporation proving its commitment to maintain the wall abovesaid.
Specifically, the petitioners refer to, among other things: (1) Ayala's alleged announcement to Bel-
Air Village Association members that "[t]he perimeter wall along Jupiter Street will not be
demolished;" 50 (2) Ayala's alleged commitment "during the pendency of the case in the trial
court" to restore the wall; (3) alleged assurances by Copuyoc that the wall will not be removed;
(4) alleged contrivances by the corporation to make the association admit as members the
commercial lot buyers which provided them equal access to Jupiter Street; and (5) Ayala's
donation to the association of Jupiter Street for "private use" of Bel-Air residents. 51
As we stated, the Ayala Corporation's alleged conduct prior to or during the proceedings below
are not necessarily at war with claims that no commitment had been in fact made.
With respect to Ayala's alleged announcement before the association, the Court does not agree
that Ayala had categorically assumed as an obligation to maintain the wall "perpetually," i.e., until
the year 2007 (the expiration date under the "deed restrictions.") There is nothing in its statement
that would bare any commitment. In connection with the conference between the parties "during
the pendency" of the trial, it is to be noted that the Ayala Corporation denies having warranted the
restoration of the said wall therein. What, on the other hand, appears in the records is the fact
that Ayala did make that promise, but provided that the Mayor allowed it. It turned out, however,
that the Mayor balked at the idea. 52 But assuming that Ayala did promise to rebuild the wall (in
that conference), it does not seem to us that it did consequently promise to maintain it in
perpetuity.
It is unfair to say, as the trial court did, that the Ayala had "contrived to make future commercial lot
owners special members of BAVA and thereby acquire equal right with the regular members
thereof to use Jupiter Street," 53 since, as we stated, the commercial lot buyers have the right,
in any event, to make use of Jupiter Street, whether or not they are members of the association. It
is not their memberships that give them the right to use it. They share that right with Bel-Air
residents from the outset.
The objective of making the commercial lot owners special members of the Bel-Air Village
Association was not to accord them equal access to Jupiter Street and inferentially, to give them
the right to knock down the perimeter wall. It was, rather, to regulate the use of the street owing
precisely to the "planned" nature of Ayala's development project, and real estate development in
general, and this could best be done by placing the commercial lot owners under the
association's jurisdiction.
Moreover, Ayala's overtures with the association concerning the membership of commercial lot
buyers therein have been shown to be neither perfidious nor unethical nor devious (paraphrasing
the lower court). We quote anew:
xxx xxx xxx
(7) On June 30, 1972, appellant informed BAVA that in a few months it shall subdivide and
sell the commercial lots bordering the north side of Buendia Avenue Extension from Reposo
Street up to Zodiac Street. Appellant also informed BAVA that it had taken all precautions and will
impose upon the commercial lot owners deed restrictions which will harmonize and blend with the
development and welfare of Bel-Air Village. Appellant further applied for special membership in
BAVA of the commercial lot owners. A copy of the deed restrictions for the commercial lots was
also enclosed. The proposed deed restrictions shall include the 19 meter set back of buildings
from Jupiter Street, the requirement for parking space within the lot of one (1) parking slot for
every seventy five (75) meters of office space in the building and the limitation of vehicular traffic
along Buendia to entrance only, but allowing both vehicular entrance and vehicular exit through
Jupiter Street and any side street.
In its letter of July 10, 1972, BAVA acknowledged the above letter of appellant and informed the
latter that the application for special membership of the commercial lot owners in BAVA would be
submitted to BAVA's board of governors for decision.
(8) On September 25, 1972, appellant notified BAVA that, after a careful study, it was finally
decided that the height limitation of buildings on the commercial lots shall be increased from 12.5
meters to 15 meters. Appellant further informed BAVA that Jupiter Street shall be widened by 3.5
meters to improve traffic flow in said street. BAVA did not reply to said letter, but on January 22,
1973, BAVA wrote a letter to the appellant informing the latter that the Association had assessed
the appellant, as special member of the association, the amount of P40,795.00 (based on 81,590
square meters at P.50 per square meter) representing the membership dues of the commercial lot
owners for the year 1973, and requested the appellant to remit the amount which its board of
governors had already included in its current budget. In reply, appellant on January 31, 1973
informed BAVA that due to the widening of Jupiter Street, the area of the lots which were
accepted by the Association as members was reduced to 76,726 square meters. Thus, the
corresponding due at P.50 per square meter should be reduced to P38,363.00. This amount,
therefore, was remitted by the appellant to BAVA. Since then, the latter has been collecting
membership dues from the owners of the commercial lots as special members of the Association.
As a matter of fact, the dues were increased several times. In 1980, the commercial lot owners
were already being charged dues at the rate of P3.00 per square meter. (Domingo, TSN, p. 36,
March 19, 1980). At this rate, the total membership dues of the commercial lot owners amount to
P230,178.00 annually based on the total area of 76,726 square meters of the commercial lots.
54
xxx xxx xxx
The alleged undertaking, finally, by Ayala in the deed of donation (over Jupiter Street) to leave
Jupiter Street for the private use of Bel-Air residents is belied by the very provisions of the deed.
We quote:
xxx xxx xxx
"IV. That the offer made by the DONOR had been accepted by the DONEE subject to the
condition that the property will be used as a street for the use of the members of the DONEE,
their families, personnel, guests, domestic help and, under certain reasonable conditions and
restrictions, by the general public, and in the event that said lots or parts thereof cease to be used
as such, ownership thereof shall automatically revert to the DONOR. The DONEE shall always
have Reposo Street, Makati Avenue, and Paseo de Roxas open for the use of the general public.
It is also understood that the DONOR shall continue the maintenance of the street at its expense
for a period of three years from date hereof." (Deed of Donation, p. 6, Exh. 7) 55
xxx xxx xxx
The donation, on the contrary, gave the general public equal right to it.
The Court cannot then say, accepting the veracity of the petitioners' "facts" enumerated above,
that the Ayala Corporation may be held liable for specific performance of a demandable
obligation, let alone damages.
The Court adds that Ayala can hardly be held responsible for the alleged deterioration of "living
and environmental conditions" 56 of the Bel-Air area, as a consequence of "Ayala's authorized
demolition of the Jupiter perimeter wall in 1974-1975." 57 We agree with Ayala that until 1976,
"there was peace and quiet" at Jupiter Street, as the petitioners' (Sangalang, Gaston, and
Briones) complaints admit. Hence, the degeneration of peace and order in Bel-Air cannot be
ascribed to the destruction of the wall in 1974 and 1975.
What Ayala submits as the real cause was the opening of Jupiter Street to vehicular traffic in
1977. 58 But this was upon orders of the Mayor, and for which the homeowners' association had
precisely filed suit (Civil Case No. 34998) 59 to contest the act of the Mayor.
c.
This likewise disposes of the third question presented. The petitioners' reliance on Ayala's alleged
conduct (proving its alleged commitment), so we have ruled, is not well-taken. Ayala's alleged
acts do not, by themselves, reflect a commitment to maintain the wall in dispute. It cannot be
therefore said that the Court of Appeals "arbitrarily ignore[d]" 60 the lower court's findings.
Precisely, it is the duty of the appellate court to review the findings of the trial judge, be they of
fact or law. 61 It is not bound by the conclusions of the judge, for which reason it makes its own
findings and arrives at its own conclusions. Unless a grave abuse of discretion may be imputed to
it, it may accept or reject the lower tribunal's determinations and rely solely on the records.
Accordingly, the Court affirms the Court of Appeals' holding that the Ayala Corporation, in its
dealings with the petitioners, the Bel-Air Village Association in particular, had "acted with justice,
gave the appellees [petitioners] their due and observed honesty and good faith." 62 "Therefore,
under both Articles 19 and 21 of the Civil Code, the appellant [Ayala] cannot be held liable for
damages." 63
2. G.R. Nos. 74376, 76394, 78182, & 82281.
Our decision also resolves, quite anticlimactically, these companion cases. But we do so for
various other reasons. In the Sangalang case, we absolve the Ayala Corporation primarily owing
to our finding that it is not liable for the opening of Jupiter Street to the general public. Insofar as
these petitions are concerned, we likewise exculpate the private respondents, not only because
of the fact that Jupiter Street is not covered by the restrictive easements based on the "deed
restrictions" but chiefly because the National Government itself, through the Metro Manila
Commission (MMC), had reclassified Jupiter Street into a "high density commercial (C-3) zone,"
64 pursuant to its Ordinance No. 81-01. Hence, the petitioners have no cause of action on the
strength alone of the said "deed restrictions."
In view thereof, we find no need in resolving the questions raised as to procedure, since this
disposition is sufficient to resolve these cases.
It is not that we are saying that restrictive easements, especially the easements herein in
question, are invalid or ineffective. As far as the Bel-Air subdivision itself is concerned, certainly,
they are valid and enforceable. But they are, like all contracts, subject to the overriding demands,
needs, and interests of the greater number as the State may determine in the legitimate exercise
of police power. Our jurisdiction guarantees sanctity of contract and is said to be the "law between
the contracting parties," 65 but while it is so, it cannot contravene "law, morals, good customs,
public order, or public policy." 66 Above all, it cannot be raised as a deterrent to police power,
designed precisely to promote health, safety, peace, and enhance the common good, at the
expense of contractual rights, whenever necessary. In Ortigas & Co., Limited Partnership v. Feati
Bank and Trust Co., 67 we are told:
xxx xxx xxx
2. With regard to the contention that said resolution cannot nullify the contractual obligations
assumed by the defendant-appellee referring to the restrictions incorporated in the deeds of
sale and later in the corresponding Transfer Certificates of Title issued to defendant-appellee it
should be stressed, that while non-impairment of contracts is constitutionally guaranteed, the rule
is not absolute, since it has to be reconciled with the legitimate exercise of police power, i.e., "the
power to prescribe regulations to promote the health, morals, peace, education, good order or
safety and general welfare of the people." Invariably described as "the most essential, insistent,
and illimitable of powers" and "in a sense, the greatest and most powerful attribute of
government," the exercise of the power may be judicially inquired into and corrected only if it is
capricious, whimsical, unjust or unreasonable, there having been a denial of due process or a
violation of any other applicable constitutional guarantee. As this Court held through Justice Jose
P. Bengson in Philippine Long Distance Company vs. City of Davao, et al. police power "is elastic
and must be responsive to various social conditions; it is not confined within narrow
circumscriptions of precedents resting on past conditions; it must follow the legal progress of a
democratic way of life." We were even more emphatic in Vda. de Genuino vs. The Court of
Agrarian Relations, et al., when We declared: "We do not see why public welfare when clashing
with the individual right to property should not be made to prevail through the state's exercise of
its police power."
Resolution No. 27, s-1960 declaring the western part of Highway 54, now E. de los Santos
Avenue (EDSA, for short) from Shaw Boulevard to the Pasig River as an industrial and
commercial zone, was obviously passed by the Municipal Council of Mandaluyong, Rizal in the
exercise of police power to safeguard or promote the health, safety, peace, good order and
general welfare of the people in the locality. Judicial notice may be taken of the conditions
prevailing in the area, especially where Lots Nos. 5 and 6 are located. The lots themselves not
only front the highway; industrial and commercial complexes have flourished about the place.
EDSA, a main traffic artery which runs through several cities and municipalities in the Metro
Manila area, supports an endless stream of traffic and the resulting activity, noise and pollution
are hardly conducive to the health, safety or welfare of the residents in its route. Having been
expressly granted the power to adopt zoning and subdivision ordinances or regulations, the
municipality of Mandaluyong, through its Municipal Council, was reasonably, if not perfectly,
justified under the circumstances, in passing the subject resolution. 68
xxx xxx xxx
Undoubtedly, the MMC Ordinance represents a legitimate exercise of police power. The
petitioners have not shown why we should hold otherwise other than for the supposed "non-
impairment" guaranty of the Constitution, which, as we have declared, is secondary to the more
compelling interests of general welfare. The Ordinance has not been shown to be capricious or
arbitrary or unreasonable to warrant the reversal of the judgments so appealed. In that
connection, we find no reversible error to have been committed by the Court of Appeals.
WHEREFORE, premises considered, these petitions are DENIED. No pronouncement as to
costs.
IT IS SO ORDERED.
Fernan, (C.J.), Melencio-Herrera, Gutierrez, Jr., Cruz, Gancayco, Bidin, Corts, Grio-Aquino,
Medialdea and Regalado, JJ., concur.
Narvasa, J., on leave.
Paras, J., no part; member of the Bel-Air Village Asso.
Feliciano, J., no part; member of BAVA.
Padilla, J., no part; former Board Member of Ayala Corporation.

Footnotes

1. Consolidated pursuant to our Resolution dated July 18, 1988.

 2. Rollo, G.R. No. 71169, 102-113. The decision of the Court of Appeals makes mention of
specified areas in Makati having been converted into a "High Intensity Commercial Zone" as well
as "Low Intensity Residential" (see page 9 of this Decision). This should be either "high" or "low"
density.
3. Jurado, Desiderio, J.; Campos, Jr., Jose and Camilon, Serafin, JJ., Concurring. Pascual,
Crisolito, J., Dissenting. The decision set aside, dated October 1, 1982, was penned by Hon.
Gregorio Pineda, Presiding Judge, Court of First Instance of Rizal, Seventh Judicial District,
Pasig, Metro Manila, Branch XXI.
4. Rollo, id., 128.
5. Civil Case No. 49217, Hon. Rafael T. Mendoza, Presiding Judge; rollo, G.R. No. 74376,
82.
6. Rollo, id.
7. Camilon, Serafin, J.; Pascual, Crisolito, Campos, Jr., Jose, and Jurado, Desiderio, JJ.,
Concurring.
8. Rollo, id., 34; emphasis in original.
9. Rollo, G.R. No. 76394, 24-25.
10. Civil Case No. 33112; see id., 8, 10.
11. Jurado, Desiderio, J.; Campos, J., Jose and Camilon, Serafin, JJ. Concurring; Pascual,
Crisolito, J., Chairman, on leave.
12. First Division.
13. Rollo, id., 81.
14. Per Resolution, dated February 22, 1988.
15. Per Resolution, dated April 4, 1988.
16. See fn. 1, supra.
17. Rollo, G.R. No. 78182, 36-38.
18. Camilon, Serafin, J.; Pronove, Ricardo and Cacdac, Bonifacio, JJ., Concurring.
19. Civil Case No. 27719, Regional Trial Court, Makati, Branch 145.
20. Rollo, G.R. No. 82281, 33-35.
21. Civil Case No. 8936, Regional Trial Court of Makati, Branch CXL, Hon. Ansberto P.
Paredes, presiding, see id., 32.
22. Bengzon, Eduardo, J.; Kapunan, Santiago and Buena, Arturo, JJ., Concurring.
23. Rollo, id., 38.
24. See supra, 103-108.
25. Id., 32.
26. Id., 38.
27. Id., 50-51.
28. 78 Phil. 196 (1947).
29. Supra, 209; emphasis supplied.
30. No. L-14551, July 31, 1961, 2 SCRA 873.
31. Supra, 877.
32. Supra.
33. No. L-60129, July 29, 1983, 123 SCRA 799.
34. The rule states: Questions that may be decided. - No error which does not affect the
jurisdiction over the subject matter will be considered unless stated in the assignment of errors
and properly argued in the brief, save as the court, as its option, may notice plain errors See rollo,
G.R. No. 71169, id., 168. The pertinent paragraph of the answer states:

10. That in 1975, the Municipal Government of Makati enacted a zoning ordinance
and classified the blocks between Buendia Avenue Extension and Jupiter Street as an
administrative office zone with the north-northeast boundary of the zone extending up to the
center line of Jupiter street. Under the said ordinance, Bel-Air Village has likewise been classified
into a residential zone, with its boundary at the southwest being delimited only up to the center
line of the Jupiter Street. Similarly, under Ordinance No. 81-01 of the Metro Manila Commission,
Jupiter Street has been made a common boundary of the commercial blocks along the north side
of the Buendia Avenue Extension and the Bel-Air Village Subdivision, so that the said street is
subject to the common use of the owners of both the commercial blocks as well as the residential
areas.

11. That the restoration/reconstruction of the wall on the blocks along the southern
side of Jupiter Street will close the entire southside portion of Jupiter Street and will illegally
deprive the abutting lot owners on the commercial blocks of their rights to have the street kept
open and to have access to the street, in violation of Act 496, as amended by Republic Act 440.

36. See id., 169.

37. Exhibits Nos. "18" and "19"; see id., 168.
38. Id., 116.
39. Id.
40. Id., 66.
41. Rollo, G.R. No. 71169, id., 124.
42. Id.
43. Id.
44. Id., 124-126; emphasis in original.
45. Id., 52.
46. CIVIL CODE, art 1157, par. (2).
47. Supra, art. 1305.
48. This case should be distinguished from Perez v. Pomar, 2 Phil. 682 (1903), where it was
held that "whether the plaintiff's services were solicited or whether they were offered to the
defendant for his assistance, inasmuch as these services were accepted and made use of by the
latter, we must consider that there was a tacit and mutual consent as to the rendition of services."
(At 686.) In that case, the defendant had enormously benefitted from the services that entitled the
plaintiff to compensation on the theory that no one may unjustly enrich himself at the expense of
another. (Solutio indebiti) The facts of this case differ.
49. Rollo, id., 38.
50. Id., 40.
51. Id., 47.
52. Id., 183-185.
53. Id., 92.
54. Id., 105-106.
55. Id., 193; emphasis in original.
56. Id., 45.
57. Id.
58. Id., 108-110.
59. Id., 193.
60. Id., 38.
61. RULES OF COURT, Rule 46, sec. 18.
62. Rollo, G.R. No. 71169, id., 126.
63. Id.
64. See rollo, G.R. No. 71169, id., 117.
65. CIVIL CODE, supra, art. 1159.
66. Supra, art. 1306.
67. No. L-24670, December 14, 1979, 94 SCRA 533.
68. Supra, 545-547.