February 2011 - Philippine Supreme Court Decisions/Resolutions
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[G.R. No. 186271, February 23 : 2011] CHATEAU DE BAIE CONDOMINIUM CORPORATION, PETITIONER, VS. SPS. RAYMOND AND MA. ROSARIO MORENO, RESPONDENTS.:
[G.R. No. 186271, February 23 : 2011]
CHATEAU DE BAIE CONDOMINIUM CORPORATION, PETITIONER, VS. SPS. RAYMOND AND MA. ROSARIO MORENO, RESPONDENTS.
D E C I S I O N
BRION, J.:
Before us is the petition for review on certiorari with prayer for a temporary restraining order filed by Chateau de Baie Condominium Corporation (petitioner) challenging the decision[1] of the Court of Appeals (CA) that dismissed its petition for certiorari, prohibition and mandamus. The petition, the CA ruled upon, questioned the ruling[2] of the Regional Trial Court (RTC), Branch 258, Parañaque City, that denied the petitioner's motion to dismiss the complaint filed by respondent spouses Raymond and Ma. Rosario Moreno.
This case is the second of two related cases submitted to us involving the condominium unit of Ma. Rosario Moreno. We had decided the first case - Oscar S. Salvacion v. Chateau de Baie Condominium Corporation, G.R. No. 178549[3] - and our ruling has attained finality.
The Facts
Mrs. Moreno is the registered owner of a penthouse unit and two parking slots in Chateau de Baie Condominium (Chateau Condominium) in Roxas Boulevard, Manila. These properties are covered by Condominium Certificates of Title (CCT) Nos. 4153, 4154, and 4155 (Moreno properties). As a registered owner in Chateau Condominium, Mrs. Moreno is a member/stockholder of the condominium corporation.
Mrs. Moreno obtained a loan of P16,600,000.00 from Oscar Salvacion, and she mortgaged the Moreno properties as security; the mortgage was annotated on the CCTs.
Under Section 20 of Republic Act (R.A.) No. 4726 (the Condominium Act),[4] when a unit owner fails to pay the association dues, the condominium corporation can enforce a lien on the condominium unit by selling the unit in an extrajudicial foreclosure sale.
On November 23, 2001, the petitioner caused the annotation of a Notice of Assessment on the CCTs of the Moreno properties for unpaid association dues amounting to P323,870.85. It also sent a demand letter to the Moreno spouses who offered to settle their obligation, but the petitioner declined the offer.
Subsequently, to enforce its lien, the president of the petitioner wrote the Clerk of Court/Ex-Officio Sheriff of Parañaque City for the extrajudicial public auction sale of the Moreno properties. The extrajudicial sale was scheduled on February 10, 2005.[5]
The first case - the Salvacion Case (Civil Case No. 05-0061;
CA-G.R. SP No. 90339;
and G.R. No. 178549)
To stop the extrajudicial sale, Salvacion, as mortgagee, filed, on February 3, 2005, a petition for certiorari and prohibition with prayer for the issuance of a temporary restraining order and/or writ of preliminary injunction before the RTC, Branch 196, Parañaque City. The case was docketed as Civil Case No. 05-0061.[6] The petition sought to prohibit the scheduled extrajudicial sale for lack of a special power to sell from the registered owner as mandated by Act No. 3135,[7] and to declare the lien to be excessive.
On February 9, 2005, the RTC dismissed Salvacion's petition and denied the injunctive relief for lack of merit. The extrajudicial sale proceeded as scheduled, and the Moreno properties were sold to the petitioner, the lone bidder, for P1,328,967.12. The RTC denied Salvacion's motion for reconsideration.
Salvacion went to the CA via a petition for certiorari and prohibition (CA-G.R. SP No. 90339) and, among others, submitted the issue of whether the RTC erred in finding Section 5, Article 4 of the By-Laws of the petitioner as blanket authority to institute an extrajudicial foreclosure, contrary to Section 20 of R.A. No. 4726 and Section 1 of Act No. 3135.
On February 27, 2007, the CA's Third Division ruled that Act No. 3135 covers only real estate mortgages and is intended merely to regulate the extrajudicial sale of mortgaged properties. It held that R.A. No. 4726 is the applicable law because it is a special law that exclusively applies to condominiums. Thus, the CA upheld the validity of the extrajudicial sale.[8] It ruled that R.A. No. 4726 does not require a special authority from the condominium owner before a condominium corporation can initiate a foreclosure proceeding. It additionally observed that Section 5 of the By-Laws of the petitioner provides that it has the authority to avail of the remedies provided by law, whether judicial or extrajudicial, to collect unpaid dues and other charges against a condominium owner. The CA's Third Division also denied Salvacion's motion for reconsideration.[9]
Salvacion appealed to this Court through a petition for review on certiorari.[10] The Court's Third Division denied the petition for technical infirmities and for failing to show that the CA committed any reversible error. An entry of judgment was made on January 24, 2008.[11]
The present case - the Moreno Case
(Civil Case No. 05-0183 and CA-G.R. SP No. 93217)
While the Salvacion case was pending before the CA, the Moreno
spouses filed before the RTC, Parañaque City, a complaint for intra-corporate dispute against the petitioner[12] to question how it calculated the dues assessed against them, and to ask an accounting of the association dues. They asked for damages and the annulment of the foreclosure proceedings, and prayed for the issuance of a writ of preliminary injunction. The case was raffled to Branch 258 and was docketed as Civil Case No. 05-0183.
The petitioner moved to dismiss the complaint on the ground of lack of jurisdiction, alleging that since the complaint was against the owner/developer of a condominium whose condominium project was registered with and licensed by the Housing and Land Use Regulatory Board (HLURB), the HLURB has the exclusive jurisdiction.
In an order dated October 15, 2005,[13] the RTC denied the motion to dismiss because it was a prohibited pleading under the Interim Rules of Procedure Governing Intra-Corporate Controversies.[14] It likewise ordered the motion to dismiss expunged from the records, and declared the petitioner in default for failing to answer within the reglementary period. The RTC denied the petitioner's motion for reconsideration in its order of January 20, 2006.[15]
The petitioner went to the CA via a petition for certiorari, prohibition and mandamus under Rule 65 of the Rules of Court. It alleged grave abuse of discretion on the part of the RTC for not dismissing the Moreno spouses' complaint because (1) the Moreno spouses are guilty of forum shopping, (2) of litis pendencia, and (3) the appeal pending before the CA (CA-G.R. SP No. 90339 [SPL CV No. 05-0061]).
The CA's First Division denied the petition in its decision of August 29, 2008.[16] It found no grave abuse of discretion on the part of the RTC because the complaint involved an intra-corporate dispute. It ruled:
The CA's First Division also denied the petitioner's motion for reconsideration;[18] hence, this appeal by way of a Rule 45 petition.
The Issue
The petitioner submits this sole issue for our consideration:
The Court's Ruling
We deny the petition for lack of merit. The CA did not err when it did not dismiss the Moreno spouses' complaint despite the full completion of the extrajudicial sale.
The case before the RTC involved an intra-corporate dispute - the Moreno spouses were asking for an accounting of the association dues and were questioning the manner the petitioner calculated the dues assessed against them. These issues are alien to the first case that was initiated by Salvacion - a third party to the petitioner-Moreno relationship - to stop the extrajudicial sale on the basis of the lack of the requirements for a valid foreclosure sale. Although the extrajudicial sale of the Moreno properties to the petitioner has been fully effected and the Salvacion petition has been dismissed with finality, the completion of the sale does not bar the Moreno spouses from questioning the amount of the unpaid dues that gave rise to the foreclosure and to the subsequent sale of their properties. The propriety and legality of the sale of the condominium unit and the parking spaces questioned by Salvacion are different from the propriety and legality of the unpaid assessment dues that the Moreno spouses are questioning in the present case.
The facts of this case are similar to the facts in Wack Wack Condominium Corporation, et al. v. Court of Appeals, et al.,[20] where we held that the dispute as to the validity of the assessments is purely an intra-corporate matter between Wack Wack Condominium Corporation and its stockholder, Bayot, and is, thus, within the exclusive original jurisdiction of the Securities and Exchange Commission (SEC).[21] We ruled in that case that since the extrajudicial sale was authorized by Wack Wack Condominium Corporation's by-laws and was the result of the nonpayment of the assessments, the legality of the foreclosure was necessarily an issue within the exclusive original jurisdiction of the SEC. We added that:
Based on the foregoing, we affirm the decision of the CA's First Division dismissing the petitioner's petition. The way is now clear for the RTC to continue its proceedings on the Moreno case.
WHEREFORE, premises considered, we DENY the petition for review on certiorari and AFFIRM the Decision, dated August 29, 2008, and the Resolution, dated February 5, 2009, of the Court of Appeals in CA-G.R. SP No. 93217. The Regional Trial Court, Branch 258, Parañaque City is directed to continue its proceedings in Civil Case No. 05-0183. Costs against the petitioner.
SO ORDERED.
Carpio Morales, J., Chairperson, no part.
Bersamin, ***Abad, Villarama, Jr. and Sereno, JJ., concur.
**Brion, Acting Chairperson.
This case is the second of two related cases submitted to us involving the condominium unit of Ma. Rosario Moreno. We had decided the first case - Oscar S. Salvacion v. Chateau de Baie Condominium Corporation, G.R. No. 178549[3] - and our ruling has attained finality.
Mrs. Moreno is the registered owner of a penthouse unit and two parking slots in Chateau de Baie Condominium (Chateau Condominium) in Roxas Boulevard, Manila. These properties are covered by Condominium Certificates of Title (CCT) Nos. 4153, 4154, and 4155 (Moreno properties). As a registered owner in Chateau Condominium, Mrs. Moreno is a member/stockholder of the condominium corporation.
Mrs. Moreno obtained a loan of P16,600,000.00 from Oscar Salvacion, and she mortgaged the Moreno properties as security; the mortgage was annotated on the CCTs.
Under Section 20 of Republic Act (R.A.) No. 4726 (the Condominium Act),[4] when a unit owner fails to pay the association dues, the condominium corporation can enforce a lien on the condominium unit by selling the unit in an extrajudicial foreclosure sale.
On November 23, 2001, the petitioner caused the annotation of a Notice of Assessment on the CCTs of the Moreno properties for unpaid association dues amounting to P323,870.85. It also sent a demand letter to the Moreno spouses who offered to settle their obligation, but the petitioner declined the offer.
Subsequently, to enforce its lien, the president of the petitioner wrote the Clerk of Court/Ex-Officio Sheriff of Parañaque City for the extrajudicial public auction sale of the Moreno properties. The extrajudicial sale was scheduled on February 10, 2005.[5]
CA-G.R. SP No. 90339;
and G.R. No. 178549)
To stop the extrajudicial sale, Salvacion, as mortgagee, filed, on February 3, 2005, a petition for certiorari and prohibition with prayer for the issuance of a temporary restraining order and/or writ of preliminary injunction before the RTC, Branch 196, Parañaque City. The case was docketed as Civil Case No. 05-0061.[6] The petition sought to prohibit the scheduled extrajudicial sale for lack of a special power to sell from the registered owner as mandated by Act No. 3135,[7] and to declare the lien to be excessive.
On February 9, 2005, the RTC dismissed Salvacion's petition and denied the injunctive relief for lack of merit. The extrajudicial sale proceeded as scheduled, and the Moreno properties were sold to the petitioner, the lone bidder, for P1,328,967.12. The RTC denied Salvacion's motion for reconsideration.
Salvacion went to the CA via a petition for certiorari and prohibition (CA-G.R. SP No. 90339) and, among others, submitted the issue of whether the RTC erred in finding Section 5, Article 4 of the By-Laws of the petitioner as blanket authority to institute an extrajudicial foreclosure, contrary to Section 20 of R.A. No. 4726 and Section 1 of Act No. 3135.
On February 27, 2007, the CA's Third Division ruled that Act No. 3135 covers only real estate mortgages and is intended merely to regulate the extrajudicial sale of mortgaged properties. It held that R.A. No. 4726 is the applicable law because it is a special law that exclusively applies to condominiums. Thus, the CA upheld the validity of the extrajudicial sale.[8] It ruled that R.A. No. 4726 does not require a special authority from the condominium owner before a condominium corporation can initiate a foreclosure proceeding. It additionally observed that Section 5 of the By-Laws of the petitioner provides that it has the authority to avail of the remedies provided by law, whether judicial or extrajudicial, to collect unpaid dues and other charges against a condominium owner. The CA's Third Division also denied Salvacion's motion for reconsideration.[9]
Salvacion appealed to this Court through a petition for review on certiorari.[10] The Court's Third Division denied the petition for technical infirmities and for failing to show that the CA committed any reversible error. An entry of judgment was made on January 24, 2008.[11]
(Civil Case No. 05-0183 and CA-G.R. SP No. 93217)
While the Salvacion case was pending before the CA, the Moreno
spouses filed before the RTC, Parañaque City, a complaint for intra-corporate dispute against the petitioner[12] to question how it calculated the dues assessed against them, and to ask an accounting of the association dues. They asked for damages and the annulment of the foreclosure proceedings, and prayed for the issuance of a writ of preliminary injunction. The case was raffled to Branch 258 and was docketed as Civil Case No. 05-0183.
The petitioner moved to dismiss the complaint on the ground of lack of jurisdiction, alleging that since the complaint was against the owner/developer of a condominium whose condominium project was registered with and licensed by the Housing and Land Use Regulatory Board (HLURB), the HLURB has the exclusive jurisdiction.
In an order dated October 15, 2005,[13] the RTC denied the motion to dismiss because it was a prohibited pleading under the Interim Rules of Procedure Governing Intra-Corporate Controversies.[14] It likewise ordered the motion to dismiss expunged from the records, and declared the petitioner in default for failing to answer within the reglementary period. The RTC denied the petitioner's motion for reconsideration in its order of January 20, 2006.[15]
The petitioner went to the CA via a petition for certiorari, prohibition and mandamus under Rule 65 of the Rules of Court. It alleged grave abuse of discretion on the part of the RTC for not dismissing the Moreno spouses' complaint because (1) the Moreno spouses are guilty of forum shopping, (2) of litis pendencia, and (3) the appeal pending before the CA (CA-G.R. SP No. 90339 [SPL CV No. 05-0061]).
The CA's First Division denied the petition in its decision of August 29, 2008.[16] It found no grave abuse of discretion on the part of the RTC because the complaint involved an intra-corporate dispute. It ruled:
Since the instant civil case involves an intra-corporate controversy, it is the RTC which has jurisdiction over the same pursuant to R.A. 8799 otherwise known as the Securities Regulation Code and Section 9 of the Interim Rules. The public respondent indeed correctly applied the provisions of the Interim Rules. And under Section 8(1), Rule 1 thereof, it is expressly stated that a Motion to Dismiss is a prohibited pleading. Thus, the motion to dismiss on the ground of lack of jurisdiction filed by petitioner must necessarily be denied and expunged from the record. Petitioner should have instead averred its defense of lack of jurisdiction and even the issue of forum shopping in its Answer. Section 6, par. (4), Rule 2 of the Interim Rules, explicitly provides that in the Answer, the defendant can state the defenses, including the grounds for a motion to dismiss under the Rules of Court.
Considering that the motion to dismiss filed by private respondent is a prohibited pleading, hence, it did not toll the running of the period for filing an Answer, the public respondent properly declared the petitioner in default for its failure to file its Answer within fifteen (15) days from its receipt of summons.[17]
The CA's First Division also denied the petitioner's motion for reconsideration;[18] hence, this appeal by way of a Rule 45 petition.
The petitioner submits this sole issue for our consideration:
WITH DUE RESPECT, THE COURT OF APPEALS ERRED IN NOT DISMISSING THE COMPLAINT IN VIEW OF THE DECISION RENDERED BY ANOTHER DIVISION OF THE COURT OF APPEALS IN CA-G.R. SP. NO. 90339 ENTITLED OSCAR S. SALVACION VS. ATTY. CLEMENTE E. BOLOY, IN HIS CAPACITY AS EX-OFFICIO SHERIFF, OFFICE OF THE CLERK OF COURT, REGIONAL TRIAL COURT, PARAÑAQUE CITY, BRANCH 196 AND CHATEAU DE BAIE CONDOMINIUM CORPORATION SUSTAINING THE VALIDITY OF THE [EXTRAJUDICIAL] PUBLIC AUCTION OF THE CONDOMINIUM UNIT AND PARKING SLOTS OWNED BY RESPONDENT MA. ROSARIO MORENO, WHICH DECISION BECAME FINAL AND EXECUTORY ON JANUARY 24, 2008.[19]
We deny the petition for lack of merit. The CA did not err when it did not dismiss the Moreno spouses' complaint despite the full completion of the extrajudicial sale.
The case before the RTC involved an intra-corporate dispute - the Moreno spouses were asking for an accounting of the association dues and were questioning the manner the petitioner calculated the dues assessed against them. These issues are alien to the first case that was initiated by Salvacion - a third party to the petitioner-Moreno relationship - to stop the extrajudicial sale on the basis of the lack of the requirements for a valid foreclosure sale. Although the extrajudicial sale of the Moreno properties to the petitioner has been fully effected and the Salvacion petition has been dismissed with finality, the completion of the sale does not bar the Moreno spouses from questioning the amount of the unpaid dues that gave rise to the foreclosure and to the subsequent sale of their properties. The propriety and legality of the sale of the condominium unit and the parking spaces questioned by Salvacion are different from the propriety and legality of the unpaid assessment dues that the Moreno spouses are questioning in the present case.
The facts of this case are similar to the facts in Wack Wack Condominium Corporation, et al. v. Court of Appeals, et al.,[20] where we held that the dispute as to the validity of the assessments is purely an intra-corporate matter between Wack Wack Condominium Corporation and its stockholder, Bayot, and is, thus, within the exclusive original jurisdiction of the Securities and Exchange Commission (SEC).[21] We ruled in that case that since the extrajudicial sale was authorized by Wack Wack Condominium Corporation's by-laws and was the result of the nonpayment of the assessments, the legality of the foreclosure was necessarily an issue within the exclusive original jurisdiction of the SEC. We added that:
Just because the property has already been sold extrajudicially does not mean that the questioned assessments have now become legal and valid or that they have become immaterial. In fact, the validity of the foreclosure depends on the legality of the assessments and the issue must be determined by the SEC if only to insure that the private respondent was not deprived of her property without having been heard. If there were no valid assessments, then there was no lien on the property, and if there was no lien, what was there to foreclose? Thus, SEC Case No. 2675 has not become moot and academic and the SEC retains its jurisdiction to hear and decide the case despite the extrajudicial sale.[22]
Based on the foregoing, we affirm the decision of the CA's First Division dismissing the petitioner's petition. The way is now clear for the RTC to continue its proceedings on the Moreno case.
WHEREFORE, premises considered, we DENY the petition for review on certiorari and AFFIRM the Decision, dated August 29, 2008, and the Resolution, dated February 5, 2009, of the Court of Appeals in CA-G.R. SP No. 93217. The Regional Trial Court, Branch 258, Parañaque City is directed to continue its proceedings in Civil Case No. 05-0183. Costs against the petitioner.
SO ORDERED.
Carpio Morales, J., Chairperson, no part.
Bersamin, ***Abad, Villarama, Jr. and Sereno, JJ., concur.
**Brion, Acting Chairperson.
Endnotes:
** Designated Acting Chairperson of the Third Division effective February 16, 2011, per Special Order No. 295 dated January 24, 2011.
*** Designated additional Member of the Third Division per Special Order No. 944 dated February 9, 2011.
[1] Penned by Associate Justice Rosmari D. Carandang, and concurred in by Presiding Justice Conrado M. Vasquez, Jr. and Associate Justice Mariflor P. Punzalan Castillo; rollo, pp. 24-33.
[2] Annex "C," Petition; id. at 37-38.
[3] January 24, 2008.
[4] Section 20. An assessment upon any condominium made in accordance with a duly registered declaration of restrictions shall be an obligation of the owner thereof at the time the assessment is made. The amount of any such assessment plus any other charges thereon, such as interest, costs (including attorney's fees) and penalties, as such may be provided for in the declaration of restrictions, shall be and become a lien upon the condominium assessed when the management body causes a notice of assessment to be registered with the Register of Deeds of the city or province where such condominium project is located. The notice shall state the amount of such assessment and such other charges thereon as may be authorized by the declaration of restrictions, a description of the condominium unit against which same has been assessed, and the name of the registered owner thereof. Such notice shall be signed by an authorized representative of the management body or as otherwise provided in the declaration of restrictions. Upon payment of said assessment and charges or other satisfaction thereof, the management body shall cause to be registered a release of the lien.
Such lien shall be superior to all other liens registered subsequent to the registration of said notice of assessment except real property tax liens and except that the declaration of restrictions may provide for the subordination thereof to any other liens and encumbrances.
Such liens may be enforced in the same manner provided for by law for the judicial or extra-judicial foreclosure of mortgages of real property. Unless otherwise provided for in the declaration of restrictions, the management body shall have power to bid at the foreclosure sale. The condominium owner shall have the same right of redemption as in cases of judicial or extra-judicial foreclosure of mortgages.
[5] Rollo, p. 43.
[6] Entitled Oscar S. Salvacion v. Atty. Clemente E. Boloy, in his capacity as Ex-Officio Sheriff, Office of the Clerk of Court, Regional Trial Court, Parañaque City, Branch 196, and Chateau de Baie Condominium Corporation.
[7] An Act to Regulate the Sale of Property Under Special Powers Inserted In or Annexed to Real Estate Mortgages (approved on March 6, 1924).
[8] Rollo, pp. 42-49; penned by Associate Justice Japar B. Dimaampao, and concurred in by Associate Justice Portia Aliño-Hormachuelos and Associate Justice Mario L. Guariña III.
[9] Id. at 51-52.
[10] G.R. No. 178549, entitled Oscar S. Salvacion v. Chateau de Baie Condominium Corporation.
[11] Rollo, p. 53.
[12] On May 11, 2005.
[13] Rollo, pp. 37-38.
[14] Rule 1, Section 8. Prohibited pleadings. -- The following pleadings are prohibited:
(1) Motion to dismiss;
(2) Motion for a bill of particulars;
(3) Motion for new trial, or for reconsideration of judgment or order, or for re-opening of trial;
(4) Motion for extension of time to file pleadings, affidavits or any other paper, except those filed due to clearly compelling reasons. Such motion must be verified and under oath; and
(5) Motion for postponement and other motions of similar intent, except those filed due to clearly compelling reasons. Such motion must be verified and under oath.
[15] Rollo, pp. 39-40.
[16] Id. at 24-33.
[17] Id. at 31-32.
[18] In its February 5, 2009 Resolution; id. at 35-36.
[19] Id. at 14.
[20] G.R. No. 78490, November 23, 1992, 215 SCRA 850.
[21] Section 5.2 of the Securities Regulation Code (R.A. No. 8799) transferred exclusive and original jurisdiction of the SEC over actions involving intra-corporate controversies to the courts of general jurisdiction or the appropriate RTC.
[22] Supra note 20, at 856.
