Casa Milan Homeowners Association, Inc vs. �The Roman Catholic Archbishop of Manila and Register of Deeds of Quezon City

Manila

SECOND DIVISION

[ G.R. No. 220042. September 05, 2018 ]

CASA MILAN HOMEOWNERS ASSOCIATION, INC., PETITIONER, VS. THE ROMAN CATHOLIC ARCHBISHOP OF MANILA AND REGISTER OF DEEDS OF QUEZON CITY, RESPONDENTS.

DECISION

CARPIO, J.:

The Case

This is a petition for review under Rule 45 of the Rules of Court to reverse the Decision1'dated 20 January 2015 and the Resolution2'dated 10 August 2015 of the Court of Appeals in CA-G.R. CV No. 98325. The Court of Appeals affirmed the Order3'of the Regional Trial Court of Quezon City, Branch 100, granting the Motion to Dismiss filed by respondent The Roman Catholic Archbishop of Manila (RCAM) on the ground of failure to state a cause of action.

The Facts

B.C. Regalado & Co., Inc. (Regalado) is the owner of the lots of Casa Milan Subdivision in North Fairview, Quezon City. The approved subdivision plan of Casa Milan designated Lot 34, Block 143, consisting of 6,083 square meters, as an open space or park/playground under Transfer Certificate of Title (TCT) No. RT-78112 in the name of Regalado.

In 1995, RCAM started constructing a church on a portion of Lot 34, Block 143. According to petitioner, in June 1995, RCAM applied with the Housing and Land Use Regulatory Board (HLURB) for the segregation of a 4,000-square meter portion of Lot 34, Block 143 to be used as a parish church in Casa Milan.£A⩊phi£

The HLURB, through its Executive Brief,4'stated that the party requesting for the segregation/conversion of the lot was not RCAM, but New North Fairview Realty and Development, Inc. (developer). The Executive Brief further stated that the request was supported by a letter from the residents. The letter requested that the said lot be apportioned for the construction of a multipurpose center. The request was recommended for approval. The Executive Brief and request were accompanied by a letter from the residents and not a written permission from the homeowners association because the petitioner, Casa Milan Homeowners Association, Inc., was only incorporated in 1999, as shown by the Articles of Incorporation5'attached to the complaint. The application for the segregation and the letter from the residents were sent in 1995.

Notwithstanding such fact and petitioner's omission to state the date of its incorporation, petitioner alleged that the HLURB's approval was "suspicious, to say the least" because the request was purportedly without the written consent of the then non-existent homeowners association or of a majority of the residents of Casa Milan.

On 29 October 2002, during the pendency of the petition for conversion, Regalado executed a Deed of Donation6'over the 4,000-square meter portion of Lot 34, Block 143 in favor of RCAM.

On 5 March 2007, the application for the segregation was approved in a Resolution7'by the City Council of Quezon City, signed by then Vice-Mayor Herbert Bautista. The Resolution also authorized the partial alteration and subsequent conversion of the lot into a multipurpose center. The 4,000-square meter lot is covered by TCT No. N-305323.8'The remaining 2,083-square meter portion, issued in favor of Regalado, is covered by TCT No. N-305324.9

On 3 December 2009, petitioner filed a complaint10'against RCAM, Regalado, the developer, and the Register of Deeds of Quezon City. The complaint had two main allegations: (1) the Deed of Donation covering a part of the open space is invalid because it was done without petitioner's written consent; and (2) RCAM was in bad faith when it built a parish church on the property without color of title. It prayed for the following reliefs:

(1) [T]he [petition] be given due course and a temporary restraining order and/or writ of preliminary injunction issue'ex parte:

(a) restraining respondent RCAM and all those acting under it from continuing with the construction of the church on the open space in Casa Milan and prohibiting the latter from conducting any activity in its premises;

(b) restraining respondent RD Quezon City from disposing and or annotating on the title of the open space;

(2) [That] judgment be rendered:

(a) ordering the cancellation of TCT Nos. 305323 and 305324 and restoring the original TCT No. RT-7 8112;

(b) ordering respondent RCAM to turn over the peaceful possession of the entire open space to petitioner and demolish the improvements it introduced therein at its own expense;

(c) making permanent the temporary restraining order or preliminary injunction prohibiting respondent RCAM from further constructing the church;

(d) ordering respondents to pay the cost[s] of suit.11

RCAM filed a Motion to Dismiss,12'dated 17 December 2009, based on the following grounds:

(1) The filing of the instant complaint violates the rule on forum shopping;

(2) There is another action pending between the petitioner and herein respondent for the same cause;

(3) The cause of action is barred by prior judgment; and

(4) The complaint states no cause of action against herein respondent.13

The Ruling of the Regional Trial Court

In its Order,14'the Regional Trial Court, Branch 100 of Quezon City, resolved the Motion to Dismiss in favor of respondents for petitioner's failure to state a cause of action. The dispositive portion reads:

WHEREFORE, premises considered, the Motion to Dismiss dated 17 December 2009 filed by defendant The Roman Catholic Archbishop of Manila is granted. Accordingly, the Complaint in the case at bar is dismissed for lack of cause of action.

SO ORDERED.15

The trial court denied petitioner's Motion for Reconsideration16'in its Order17'dated 2 September 2011. The dispositive portion reads:

WHEREFORE, finding no persuasive argument to warrant a reversal or modification of this court's findings in the challenged Order x x x, the petitioner's Motion for Reconsideration dated 25 February 2011 is hereby denied for lack of merit.

SO ORDERED.18

The Ruling of the Court of Appeals

In its Decision19'dated 20 January 2015, the Court of Appeals found no merit in petitioner's appeal. It held that:

Indeed, nowhere in the Complaint does it appear that the Association ever acquired a legal right over the subject open space as would obligate defendants to secure its written consent to the construction of the subject parish church and to the donation by Regalado of the 4,000-square meter portion to the RCAM. As the trial court correctly ruled, the Association had no cause of action and failed to state a cause of action in the case, thus compelling the dismissal of its complaint.

WHEREFORE, the decision appealed from is AFFIRMED'in toto.

SO ORDERED.20

The subsequent Motion for Reconsideration21'filed by petitioner was denied by the Court of Appeals. Hence, this petition for review.

The Issues

(1) Whether the Court of Appeals committed grave reversible error in affirming the dismissal of the complaint for failure to state a cause of action;

(2) Whether the Court of Appeals committed grave reversible error in ruling that the action is barred by prior judgment; and

(3) Whether the Court of Appeals committed grave reversible error in ruling that the action is barred by'litis pendentia.

The Ruling of this Court

Complaint states no cause of action.

Under Section 1(g), Rule 16 of the Rules of Court,22'a motion to dismiss may be made on the ground that the pleading states no cause of action.

The case of'Zu'iga-Santos v. Santos-Gran23'explains that:

A complaint states a cause of action if it sufficiently avers the existence of the three (3) essential elements of a cause of action, namely: (a) a right in favor of the plaintiff by whatever means and under whatever law it arises or is created; (b) an obligation on the part of the named defendant to respect or not to violate such right; and (c) an act or omission on the part of the named defendant violative of the right of the plaintiff or constituting a breach of the obligation of defendant to the plaintiff for which the latter may maintain an action for recovery of damages. If the allegations of the complaint do not state the concurrence of these elements, the complaint becomes vulnerable to a motion to dismiss on the ground of failure to state a cause of action.

In its complaint, petitioner alleged the following causes of action: (1) the Deed of Donation covering a part of the open space is invalid; and (2) RCAM was in bad faith when it built a parish church on the property without color of title.

Despite these causes of action, however, petitioner failed to allege legal and factual bases of its asserted right over the open space.

It is established that the title over the subject land was initially in the name of Regalado. Subsequently, on 29 October 2002, Regalado donated the subject land to RCAM; thus, a new title was issued in RCAM's name. Petitioner alleged that the Deed of Donation executed by Regalado in favor of RCAM is null and void, and did not produce any legal effect because the subject land, denominated as an "open space" under Presidential Decree No. (P.D.) 1216,24'is inalienable. Petitioner cited a whereas clause of P.D. No. 1216 in defining an "open space" as "beyond the commerce of men."25'It states:

WHEREAS, such open spaces, roads, alleys and sidewalks in residential subdivision are for public use and are, therefore, beyond the commerce of men.

We disagree. Petitioner's mere reliance on a whereas clause of P.D. No. 1216 to nullify a donation is unacceptable. Section 31 of P.D. No. 957,26'as amended by Section 2 of P.D. No. 1216, is the basis for the definition of "open spaces" in residential subdivisions:

Section 2. Section 31 of Presidential Decree No. 957 is hereby amended to read as follows:

Section 31.'Roads, Alleys, Sidewalks and Open spaces. The owner as developer of a subdivision shall provide adequate roads, alleys and sidewalks. For subdivision projects one (1) hectare or more, the owner or developer shall reserve the thirty percent (30%) of the gross area for open space. Such open space shall have the following standards allocated exclusively for parks, playgrounds and recreational use:

x x x x

These areas reserved for parks, playgrounds and recreational use shall be non-alienable public lands, and non-buildable. The plans of the subdivision project shall include tree planting on such parts of the subdivision as may be designated by the Authority.

Upon their completion as certified to by the Authority, the roads, alleys, sidewalks and playgrounds shall be donated by the owner or developer to the city or municipality and it shall be mandatory for the local governments to accept provided, however, that the parks and playgrounds may be donated to the Homeowners Association of the project with the consent of the city or municipality concerned. No portion of the parks and playgrounds donated thereafter shall be converted to any other purpose or purposes.

In the recent case of'Republic v. Spouses Llamas,27'this Court explained the definition of "open spaces" in accordance with Section 31 of P.D. No. 957, as amended, by differentiating the 1991 case of'White Plains Association, Inc. v. Legaspi28'from the 1998 landmark case of'White Plains Homeowners Association, Inc. v. Court of Appeals.29

In the 1991'White Plains'case, this Court held that subdivision owners and developers are'compelled to donate, among others, the subdivision's open spaces to the local government or to the homeowners association, in accordance with Section 31.

However, this Court overturned the 1991'White Plains'Decision and held in the subsequent 1998'White Plains'Decision that open spaces belong to the subdivision owners and developers primarily, meaning they have the'freedom to retain or dispose'of the open space in whatever manner they desire. The'Spouses Llamas'case explained it clearly:

The 1998'White Plains'Decision unequivocally repudiated the 1991 White Plains Decision's allusion to a compulsion on subdivision developers to cede subdivision road lots to government, so much that it characterized such compulsion as an "illegal taking." It did away with any preference for government's capacity to compel cession, and instead,'emphasized the primacy of subdivision owners' and developers' freedom in retaining or disposing of spaces'developed as roads. In making its characterization of an "illegal taking," this Court quoted with approval the statement of the Court of Appeals:

Only after a subdivision owner has developed a road may it be donated to the local government, if it so desires.'On the other hand,'a subdivision owner may even opt to retain ownership of private subdivision roads, as in fact is the usual practice of exclusive residential subdivisions'for example those in Makati City.30'(Emphasis supplied)

This Court went on further:

The last paragraph of Section 31 requires - note the use of the word "shall" - subdivision developers to donate to the city or municipality with territorial jurisdiction over the subdivision project all such roads, alleys, sidewalks, and open spaces. It also imposes upon cities and municipalities the concomitant obligation or compulsion to accept such donations.

The last paragraph of Section 31 is oxymoronic. One cannot speak of a donation and a compulsion in the same breath.

Section 31's compulsion to donate (and concomitant compulsion to accept) cannot be sustained as valid.'Not only does it run afoul of basic legal concepts; it also fails to withstand the more elementary test of logic and common sense. As opposed to this,'the position that'not only'is more reasonable and logical, but also maintains harmony between our laws,'is that which maintains subdivision owner's or developer's freedom to donate or not to donate. This is the position of the 1998'White Plains'Decision. Moreover, as this 1998 Decision has emphasized, to force this donation and to preclude any compensation, is to suffer an illegal taking.31'(Emphasis supplied)

In this case, petitioner's allegation that the Deed of Donation is invalid must have been based on the confusing wording of Section 31. However, jurisprudential law is clear. The transfer of ownership from the subdivision owner or developer to the local government is not automatic, but requires a positive act from the owner or developer before the city, municipality, or homeowners association can acquire dominion over the subdivision open spaces.32'Therefore, the donation made by Regalado in favor of RCAM is valid and legal because no positive act of donation has yet been made in favor of the local government or the homeowners association. The title to the open space is validly registered in the name of RCAM; thus, the disputed lot remains privately-owned by RCAM. RCAM was not in bad faith when it built a parish church on the open space because of its valid title over the subject property.

Despite this established fact, however, Regalado and the developer still obtained a letter from the residents of the subdivision to satisfy the requirement under Section 22 of P.D. No. 957. Section 22 states:

Section 22.'Alteration of Plans. No owner or developer shall change or alter the roads, open spaces, infrastructures, facilities for public use and/or other form of subdivision development as contained in the approved subdivision plan and/or represented in its advertisements, without the permission of the [National Housing] Authority [now HLURB] and the written conformity or consent of the duly organized homeowners association, or in the absence of the latter, by the majority of the lot buyers in the subdivision.

Only a letter from the residents was obtained at that time because petitioner Casa Milan Homeowners Association, Inc. was incorporated only in 1999, four years after the HLURB's Resolution to accept and approve the residents' petition for conversion of the open space into a parish church. Thus, petitioner could not have consented to the developer's request in 1995 because the association was still inexistent. The Executive Brief of the HLURB is clear:

In support [of] their request, the developer submitted [a] letter from the resident[s]'address[ed] to the Honorable Mayor of Quezon City thru Comm. Ernesto C. Mendiola petitioning for the use of said lot into a parish church.

Evaluation made on the plans on file with this Office shows that the proposed conversion does not affect the open space allocation and requirements of the above project[,] particularly the 3.5% requirements for Parks and Playground.

With the above findings, x x x the approval of their request for conversion [is hereby recommended].33'(Emphasis supplied)

This Court agrees with the Regional Trial Court and Court of Appeals in holding that "nowhere in the complaint does it appear that [petitioner] Association ever acquired a legal right over the subject open space as would obligate defendants to secure its written consent to the construction of the subject parish church and to the donation by Regalado of the 4,000-square meter portion to the RCAM."34'The Court of Appeals did not commit grave reversible error in affirming the dismissal of the complaint for failure to state a cause of action.

The action is barred by prior judgment.

Petitioner contends that the prior judgment in LRC Case No. 07-61570 approving the Deed of Donation executed by Regalado in favor of RCAM does not bar the petition to restrain the construction of the church in the subdivision, and consequently, to cancel TCT Nos. 305323 and 305324 issued in favor of RCAM, and to restore TCT No. RT-78112. Petitioner contends that not all the elements of'res judicata'were present; there was no identity of parties and no identity in the causes of action.

We disagree. The two cases, although involving different parties and different causes of action, have the same underlying issue, that is, whether or not RCAM validly owns the subject property.

The doctrine of'res judicata'is embodied in Section 47, Rule 39 of the Rules of Court:

Section 47.'Effect of judgments or final orders. - The effect of a judgment or final order rendered by a court of the Philippines, having jurisdiction to pronounce the judgment or final order, may be as follows:

(b) In other cases, the judgment or final order is, with respect to the matter directly adjudged or as to any other matter that could have been raised in relation thereto, conclusive between the parties and their successors in interest by title subsequent to the commencement of the action or special proceeding, litigating for the same thing and under the same title and in the same capacity; and

(c) In any other litigation between the same parties or their successors in interest, that only is deemed to have been adjudged in a former judgment or final order which appears upon its face to have been so adjudged, or which was actually and necessarily included therein or necessary thereto.

The doctrine of'res judicata'has two aspects. The first aspect is the effect of a judgment as a bar to the prosecution of a second action upon the same claim, demand, or cause of action. The second aspect precludes the relitigation of a particular fact or issue in another action between the same parties or their successors in interest, on a different claim or cause of action.35'The second aspect extends to questions "necessarily involved in an issue, and necessarily adjudicated, or necessarily implied in the final judgment, although no specific finding may have been made in reference thereto, and although such matters were directly referred to in the pleadings and were not actually or formally presented. Under this rule, if the record of the former trial shows that the judgment could not have been rendered without deciding the particular matter, it will be considered as having settled that matter as to all future actions between the parties, and if a judgment necessarily presupposes certain premises, they are as conclusive as the judgment itself x x x."36

In the case at bar, the second aspect applies. The determination of RCAM's right over the subject open space and RCAM's right to construct a parish church on the subject open space hinges on the validity of the Deed of Donation executed by Regalado to RCAM. Since the issue of ownership had been resolved in the case for the approval of the Deed of Donation, it cannot again be litigated in the instant case without virtually impeaching the correctness of the decision in the former case. Hence, RCAM, as the lawful owner of the subject open space by virtue of the Deed of Donation executed by Regalado, has a better right to possess and own the lot in question as against petitioner whose claim of ownership has been rejected with finality in LRC Case No. 07-61570.

The action is barred by litis pendentia.1'шphi1

Petitioner alleges that the reliefs prayed for in this petition are different from the reliefs prayed for by RCAM, this time, in another case docketed as S.C.A. No. Q-09-65019. Thus, the action is not barred by'litis pendentia. In its petition for review, petitioner contends that:

RCAM simply prayed that it be allowed to enter and to construct in Casa Milan Subdivision. On the other hand, petitioner prays for the cancellation of TCT Nos. 305323 and 305324, and restoring the original TCT No. RT-78112 on the basis of: (a) lack of written consent of petitioner or the majority of the homeowners of Casa Milan Subdivision, in the alteration of the Subject Property; and (b) the nullity of the Deed of Donation in favor of RCAM covering an Open Space. The prayers are distinct.37

Litis pendentia, "a pending suit," is interposed as a ground for the dismissal of a civil action pending in court. For'litis pendentia'to be invoked, the concurrence of the following requisites is necessary: (a) identity of parties or at least such as represent the same interest in both actions; (b) identity of rights asserted and reliefs prayed for, the reliefs being founded on the same facts; and (c) the identity in the two cases should be such that the judgment rendered in one would, regardless of which party is successful, amount to'res judicata'in the other.38

Contrary to petitioner's contention and similar to this Court's ruling above regarding'res judicata, there is identity in the reliefs prayed for and the facts upon which these reliefs were based. A perusal of both petitions reveals that both parties similarly pray to be recognized as the legal owner of the subject lot and to be allowed to conduct activities on the lot. In the former case docketed as S.C.A. No. Q-09-65019, RCAM's prayer reads:

Wherefore, premises considered, it is most respectfully prayed that, after hearing, this Honorable Court issue a Writ of Mandamus, commanding the respondents:

A. To respect the rights of the petitioner [RCAM] over the property in question;

B. To allow the entry of vehicles delivering construction materials to the site;

C. To allow construction personnel to enter and to proceed with the construction;

Pending further proceedings, it is most respectfully prayed that this Honorable Court forthwith issue a Writ of Preliminary Injunction ordering the respondents, individually and collectively, not to enforce their Memo dated May 07, 2009 in so far as delivery of construction materials for the church edifice is concerned and not to interfere with or prevent the continuation of the construction.

x x x x39

In contrast, the reliefs prayed for in the petition subject of the appeal read:

WHEREFORE, it is respectfully prayed that -

1. Upon filing of this Petition, the same be given due course and a temporary restraining order and/or writ of preliminary injunction issue exparte;

a. Restraining respondent RCAM and all those acting under it from continuing with the construction of the church on the open space in Casa Milan and prohibiting the latter from conducting any activity in its premises;

2. After due proceedings, judgment be rendered:

a. Ordering the cancellation of TCT Nos. 305323 and 305324, and restoring the original TCT No. RT-78112;

b. Ordering respondent RCAM to turn over the peaceful possession of the entire open space to petitioner and demolish the improvements it introduced therein at its own expense;

c. Making permanent the temporary restraining order or preliminary injunction prohibiting respondent RCAM from further constructing the church;

d. Ordering respondents to pay the cost[s] of suit.

Other reliefs are likewise prayed for.40

It is hornbook rule that identity of causes of action does not mean absolute identity; otherwise, a party could easily escape the operation of'res judicata'by changing the form of the action or relief sought. One test in ascertaining whether two suits relate to a single or common cause of action is whether the same facts or evidence would sustain both actions in that the judgment in the first case is a bar to the subsequent action.41

This Court takes note of the fact that a prior judgment, LRC Case No. 07-61570, had already approved the Deed of Donation executed by Regalado in favor of RCAM. Thus, the issues in the pending action, S.C.A. No. Q-09-65019, could easily be resolved in favor of RCAM by presenting as evidence the decision approving Regalado's Deed of Donation. Subsequently, the issues in the present petition will only be resolved by using the same evidence, that is, the decision approving Regalado's Deed of Donation in favor of RCAM. Thus, the judgment in the first case, S.C.A. No. Q-09-65019, would be a bar to this petition before us.

WHEREFORE, the petition is'DENIED'and the assailed Decision and Resolution of the Court of Appeals in CA-G.R. CV No. 98325 are'AFFIRMED.

SO ORDERED.

Perlas-Bernabe, Caguioa, A. Reyes, Jr., and'J. Reyes, Jr.,*'JJ., concur.

Footnotes

*'Designated additional member per Special Order No. 2587 dated 28 August 2018.

1'Rollo, pp. 41-A-48. Penned by Associate Justice Ricardo R. Rosario, with Associate Justices Remedios A. Salazar-Fernando and Edwin D. Sorongon concurring.

2'Id. at 51.

3'Id. at 176-182.

4'Id. at 106.

5'Id. at 99-101.

6'Id. at 108, 113-115.

7'Id. at 111-112.

8'Id. at 131.

9'Id. at 103.

10'Id. at 84-97. Captioned as a petition.

11'Id. at 95.

12'Id. at 117-124.

13'Id. at 117-118.

14'Id. at 176-182.

15'Id. at 182.

16'Id. at 184-190.

17'Id. at 192-193.

18'Id. at 193.

19'Id. at 41-A-48.

20'Id. at 47.

21'Id. at 55-63.

22'Section 1(g), Rule 16 of the Rules of Court states:

SECTION 1.'Grounds. - Within the time for but before filing the answer to the complaint or pleading asserting a claim, a motion to dismiss may be made on any of the following grounds:

(g) That the pleading asserting the claim states no cause of action;

23'745 Phil. 171, 180 (2014), citing'Balo v. Court of Appeals, 508 Phil. 224, 232 (2005) and Macaslang v. Spouses Zamora, 664 Phil. 337, 353-354 (2011).

24'Defining "Open Space" in Residential Subdivisions and Amending Section 31 of Presidential Decree No. 957 Requiring Subdivision Owners to Provide Roads, Alleys, Sidewalks and Reserve Open Space for Parks or Recreational Use (1977).

25'Rollo, pp. 15, 90.

26'The Subdivision and Condominium Buyers' Protective Decree (1976).

27'G.R. No. 194190, 25 January 2017, 815 SCRA 531.

28'271 Phil. 806 (1991).

29'358 Phil. 184 (1998).

30'Supra note 27, at 542.

31'Supra note 27, at 543-545.

32'Woodridge School, Inc. v. ARB Construction Co., Inc., 545 Phil. 83, 89 (2007).

33'Rollo, p. 106.

34'Id. at 47.

35'Spouses Barretto v. Court of Appeals, 381 Phil. 580, 589 (2000).

36'Prudential Bank v. Mauricio, 679 Phil. 369, 389 (2012), citing'Lopez v. Reyes, 166 Phil. 641, 650 (1977).

37'Rollo, p. 34.

38'Feliciano v. Court of Appeals, 350 Phil. 499, 505-506 (1998).

39'Rollo, p. 32.

40'Id. at 33-34.

41'Yap v. Chua, 687 Phil. 392, 402 (2012).