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1. MARIA LUISA PARK ASSOCIATION, INC., Petitioner, vs. SAMANTHA MARIE T. ALMENDRAS and PIA ANGELA T. ALMENDRAS, Respondents.

[G.R. No. 171763, June 5, 2009, QUISUMBING, J.:] NATURE: Petition for review on certiorari FACTS: 1. respondents Samantha Marie T. Almendras and Pia Angela T. Almendras purchased from MRO Development Corporation a residential lot in Cebu City 2. Almendras then filed with Maria Luisa Park Association Inc an application to construct a residential house which was approved 3. Upon ocular inspection MLPAI found out that Almendras violated the prohibition against multi-dwelling 4. MLPAI sent a letter to the respondents, demanding that they rectify the structure a. respondents, as represented by their father Ruben D. Almendras denied having violated MLPAIs Deed of Restriction b. MLPAI, in its reply, pointed out respondents specific violations of the subdivision rules: i. installation of a second water meter and tapping the subdivisions main water pipeline ii. construction of two separate entrances that are mutually exclusive of each other. 5. Respondents filed a complaint with the RTC of Cebu for Injunction, Declatory Relief, Annulment of Provisions of Articles and By-Laws with Prayer for Issuance of a Temporary Restraining Order (TRO)/Preliminary Injunction. a. MLPAI moved for dismissal of the complaint on the ground of lack of jurisdiction and failure to comply with the arbitration clause provided for in MLPAIs by-laws. b. TC dismissed the complaint holding that it was the Housing and Land Use Regulatory Board that has original and exclusive jurisdiction over the case. c. MR filed by respondents was denied. 6. CA declared the decision of RTC null and void, and ordering it to take cognizance of the case ISSUE: Whether the HLURB and not the RTC has jurisdiction over the case. HELD: the Home Insurance and Guaranty Corporation (HIGC), now HLURB, has original and exclusive jurisdiction over the case. Petition Granted. 1. Pursuant to EO No 535, the HIGC assumed the regulatory and adjudicative functions of the SEC over homeowners associations 2. In addition to the powers and functions vested under the Home Financing Act, the Corporation, shall have among others, the following additional powers: (a) . . . and exercise all the powers, authorities and responsibilities that are vested on the Securities and Exchange Commission with respect to homeowners associations, the provision of Act 1459, as amended by P.D. 902-A, to the contrary notwithstanding; (b) To regulate and supervise the activities and operations of all houseowners associations registered in accordance therewith; 2. HIGC also assumed the SECs original and exclusive jurisdiction under Section 5 of Presidential Decree No. 902-A to hear and decide cases involving: b) Controversies arising out of intra-corporate or partnership relations, between and among stockholders, members, or associates; between any and/or all of them and the corporation, partnership or association of which they are stockholders, members or associates , respectively; and between such corporation, partnership or association and the state insofar as it concerns their individual franchise or right to exist as such entity; 3. PRESENT CASE: respondents are members of MLPAI as they have even admitted it. Therefore, as correctly ruled by the trial court, the case involves a controversy between the homeowners association and some of its members. Thus, the exclusive and original jurisdiction lies with the HLURB. a. Sta. Clara Homeowners Association v. Gaston: . . . the HIGC exercises limited jurisdiction over homeowners' disputes . The law confines its authority to controversies that arise from any of the following intra-corporate relations: (1) between and among members of the association; (2) between any and/or all of them and the association of which they are members ; and (3) between the association and the state insofar as the controversy concerns its right to exist as a corporate entity. 4. The extent to which the HLURB has been vested with quasi-judicial authority must also be determined by referring to Section 3 of P.D. No. 957:

SEC. 3. National Housing Authority. The National Housing Authority shall have exclusive jurisdiction to regulate the real estate trade and business in accordance with the provisions of this Decree. 5. In the exercise of its powers, the HLURB must commonly interpret and apply contracts and determine the rights of private parties under such contracts. This ancillary power is no longer a uniquely judicial function, exercisable only by the regular courts. a. The respondents neither asked for the interpretation of the questioned by-laws nor did they allege that the same is doubtful or ambiguous and require judicial construction. What they seek to accomplish is to have a particular provision of the MLPAIs by-laws nullified and thereafter absolve them from any violations of the same. b. The legality of the by-laws in its entirety was never an issue in the instant controversy but merely the provision prohibiting multi-dwelling which respondents assert they did not violate. There is no justiciable controversy here that would warrant declaratory relief, or even an annulment of contracts. 6. under the doctrine of primary administrative jurisdiction, courts cannot or will not determine a controversy where the issues for resolution demand the exercise of sound administrative discretion requiring the special knowledge, experience, and services of the administrative tribunal to determine technical and intricate matters of fact a. the HLURB has the expertise to resolve the basic technical issue of whether the house built by the respondents violated the Deed of Restriction, specifically the prohibition against multidwelling. 7. the parties failed to abide by the arbitration agreement in the MLPAI by-laws. a. Article XII of the MLPAI by-laws entered into by the parties provides that any dispute or claim against the Association or any of its officers and governors shall first be settled amicably. i. If amicable settlement fails, such dispute shall be brought by the member to an arbitration panel for final settlement. The arbitral award shall be valid and binding between the parties unless repudiated on grounds that the same was procured through fraud or violence, or that there are patent or gross errors in the tribunals findings of facts upon which the decision was based. ii. Respondents, being members of MLPAI, are bound by its by-laws, and are expected to abide by it in good faith iii. The parties in the case made no earnest effort to resolve their differences in accordance with the arbitration clause provided for in their by-laws. 1. Mere exchange of correspondence will not suffice much less satisfy the requirement of arbitration. 8. Arbitration being the mode of settlement between the parties expressly provided for in their bylaws, the same should be respected. a. Unless an arbitration agreement is such as absolutely to close the doors of the courts against the parties, the courts should look with favor upon such amicable arrangements b. Arbitration is one of the alternative methods of dispute resolution that is now rightfully vaunted as the wave of the future in international relations, and is recognized worldwide. c. To brush aside a contractual agreement calling for arbitration in case of disagreement between the parties would therefore be a step backward.