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, Castañeda & Duran Law O ce 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.
CD Technologies Asia, Inc. © 2019 cdasiaonline.com
 Funk & Associates for petitioner.
Castillo, Laman, Tan & Associates for private respondents.

DECISION

SARMIENTO , J : p

Before the Court are ve 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 ve decisions of the Court of Appeals, denying
specific performance and damages. LexLib

The proceedings were commenced at the rst 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 speci c performance restrictive easement
upon property, speci cally 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 speci c
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.
CD Technologies Asia, Inc. © 2019 cdasiaonline.com
 (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 su cient
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
CD Technologies Asia, Inc. © 2019 cdasiaonline.com
 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 fty 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 nally 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 con rmation 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
tra c — 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 ve (75) meters of o ce space in the building and the limitation of
vehicular tra c along Buendia to entrance only, but allowing both vehicular
entrance and vehicular exit through Jupiter Street and any side street.
CD Technologies Asia, Inc. © 2019 cdasiaonline.com
 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 noti ed BAVA that, after a careful
study, it was nally 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 tra c ow 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 zoni cation of Makati (Exh. 18). Under this
Ordinance, Bel-Air Village was classi ed 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 classi ed as

Administrative O ce 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 O ce Zone, therefore, have a

common boundary along the center line of Jupiter Street.
CD Technologies Asia, Inc. © 2019 cdasiaonline.com
 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 classi ed 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 classi cations, 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 tra c 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 O ce 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:
CD Technologies Asia, Inc. © 2019 cdasiaonline.com
 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 speci cally the inde nite 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 tra c
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 o cials 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 tra c. (Exh. 17, BAVA Petition,
pars. 16 and 17)
(11) Before the gates were removed, there was no parking problem or
tra c 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 tra c 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)
CD Technologies Asia, Inc. © 2019 cdasiaonline.com
 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 tra c 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 o ce 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-A davit, 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
tra c, 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 led 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:
CD Technologies Asia, Inc. © 2019 cdasiaonline.com
 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

CD Technologies Asia, Inc. © 2019 cdasiaonline.com
 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 nality 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, nding 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
speci c 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 a rmed, and
held, in addition, that Jupiter Street "is classi ed 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 Certi cate 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 fty years from
CD Technologies Asia, Inc. © 2019 cdasiaonline.com
 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 o cer 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 con rmed 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 1 0 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 1 2 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," 1 3 for which BAVA sought a reconsideration.
Pending resolution, the case was referred to the Second Division of this Court, 1 4 and
thereafter, to the Court En Banc en consulta. 1 5 Per our Resolution, dated April 29, 1988,
we consolidated this case with G.R. Nos. 74376 and 82281. 1 6
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 rm 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.
CD Technologies Asia, Inc. © 2019 cdasiaonline.com
 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
e cacy 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. 1 7

xxx xxx xxx

The Court of Appeals 1 8 overturned the lower court, 1 9 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 o ce by the Human Settlements Regulatory
Commission.
CD Technologies Asia, Inc. © 2019 cdasiaonline.com
 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 tra c. 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. 2 0

xxx xxx xxx

The trial court 2 1 dismissed the petitioner's complaint, which dismissal was
affirmed on appeal. 2 2 According to the appellate court, the opening of Jupiter Street to
CD Technologies Asia, Inc. © 2019 cdasiaonline.com
 human and vehicular tra c, and the commercialization of the Municipality of Makati in
general, were circumstances that had made compliance by Moncal with the aforesaid
"deed restrictions" "extremely di cult and unreasonable," 2 3 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 speci c 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 rm in G.R. No. 78182; and a construction company, apparently,
in G.R. No. 82281) in violation of the said restrictions. 2 4
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 ve 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 speci cally assigned as one of the
alleged errors on appeal? 2 5

May the Honorable Intermediate Appellate Court arbitrarily ignore the

decisive ndings 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? 2 6

May the Honorable Intermediate Appellate Court disregard the trial court's
documented ndings 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
CD Technologies Asia, Inc. © 2019 cdasiaonline.com
 of Bel-Air Village pursuant to respondent Ayala's express continuing
representation and/or covenant to do so? 2 7

a.
The rst 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, 2 8 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."
2 9 In Baquiran v. Court of Appeals, 3 0 we referred to the "modern trend of procedure . . .
accord[ing] the courts broad discretionary power," 3 1 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]." 3 2 And in Vda. de Javellana v. Court
of Appeals, 3 3 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, 3 4 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 a rmative defenses, rst in its answer 3 5 and second, in its brief, 3 6 and
submitted at the trial as exhibits. 3 7 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 nds 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," 3 8 and that "[i]t lost its character
as a street for the exclusive benefit of those residing in Bel-Air Village completely." 3 9
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 . . ." 4 0 Hence, it cannot be said to have been "for the exclusive bene t" 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 oodgates 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.

CD Technologies Asia, Inc. © 2019 cdasiaonline.com

 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 con rm. 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" 4 1 and as the Ayala Corporation's "show of goodwill," 4 2 a view
we nd 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." 4 3 There was hence a necessity for a wall.
In any case, we nd 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 ne, 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 con rms
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,
CD Technologies Asia, Inc. © 2019 cdasiaonline.com
 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 tra c ow in
said street to bene t both the residents of Bel-Air and the future owners of the
commercial lots. 4 4

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" 4 5 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. 4 6 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. 4 7 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. 4 8
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 ndings of the trial court," 4 9 i.e., ndings
pointing to alleged acts performed by the Ayala Corporation proving its commitment to
maintain the wall abovesaid. Speci cally, the petitioners refer to, among other things:
CD Technologies Asia, Inc. © 2019 cdasiaonline.com
 (1) Ayala's alleged announcement to Bel-Air Village Association members that "[t]he
perimeter wall along Jupiter Street will not be demolished;" 5 0 (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. 5 1
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. 5 2 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," 5 3 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 per dious 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
CD Technologies Asia, Inc. © 2019 cdasiaonline.com
 seventy ve (75) meters of o ce space in the building and the limitation of
vehicular tra c 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 noti ed BAVA that, after a careful
study, it was nally 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 tra c ow 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. 5 4
xxx xxx xxx
The alleged undertaking, nally, 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) 5 5

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 speci c
CD Technologies Asia, Inc. © 2019 cdasiaonline.com
 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" 5 6 of the Bel-Air area, as a
consequence of "Ayala's authorized demolition of the Jupiter perimeter wall in 1974-
1975." 5 7 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 tra c in 1977. 5 8 But this was upon orders of the Mayor, and for which the
homeowners' association had precisely led suit (Civil Case No. 34998) 5 9 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, re ect a commitment to
maintain the wall in dispute. It cannot be therefore said that the Court of Appeals
"arbitrarily ignore[d]" 6 0 the lower court's ndings. Precisely, it is the duty of the
appellate court to review the ndings of the trial judge, be they of fact or law. 6 1 It is not
bound by the conclusions of the judge, for which reason it makes its own ndings 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 a rms 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." 6 2 "Therefore, under both Articles 19 and 21 of the
Civil Code, the appellant [Ayala] cannot be held liable for damages." 6 3
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 nding 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 chie y
because the National Government itself, through the Metro Manila Commission (MMC),
had reclassi ed Jupiter Street into a "high density commercial (C-3) zone," 6 4 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
CD Technologies Asia, Inc. © 2019 cdasiaonline.com
 parties," 6 5 but while it is so, it cannot contravene "law, morals, good customs, public
order, or public policy." 6 6 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., 6 7 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 Certi cates 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 con ned 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 ourished about the
place. EDSA, a main tra c artery which runs through several cities and
municipalities in the Metro Manila area, supports an endless stream of tra c 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, justi ed 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 nd no reversible error to have been
CD Technologies Asia, Inc. © 2019 cdasiaonline.com
 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, Cortés, Griño-
Aquino, Medialdea and Regalado, JJ., concur.
Narvasa, J., is on leave.
Paras, J., took no part; member of the Bel-Air Village Asso.
Feliciano, J., took no part; member of BAVA.
Padilla, J., took 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, Sera n, 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, Sera n, 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, Sera n, 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.
CD Technologies Asia, Inc. © 2019 cdasiaonline.com
 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.
35. 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 classi ed the blocks between Buendia Avenue Extension and Jupiter Street as an
administrative o ce 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 classi ed 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.

CD Technologies Asia, Inc. © 2019 cdasiaonline.com

 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 bene tted
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.
CD Technologies Asia, Inc. © 2019 cdasiaonline.com
 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.

CD Technologies Asia, Inc. © 2019 cdasiaonline.com