PHILIPPINE JURISPRUDENCE - FULL TEXT

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G.R. No. 71169 December 22, 1988
JOSE D. SANGALANG vs. INTERMEDIATE APPELLATE COURT

Republic of the Philippines

SUPREME COURT
Manila

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 December 22, 1988

BEL-AIR VILLAGE ASSOCIATION, INC., petitioner,

vs.
THE INTERMEDIATE APPELLATE COURT, ROSARIO DE JESUS TENORIO, and CECILIA
GONZALVEZ, respondents.

G.R. No. 76394 December 22,1988

BEL-AIR VILLAGE ASSOCIATION, INC., petitioner,

vs.
THE COURT OF APPEALS, and EDUARDO and BUENA ROMUALDEZ respondents.

G.R. No. 78182 December 22, 1988

BEL-AIR VILLAGE ASSOCIATION, INC., petitioner,

vs.
COURT OF APPEALS, DOLORES FILLEY, and J. ROMERO & ASSOCIATES, respondents.

G.R. No. 82281 December 22, 1988

BEL-AIR VILLAGE ASSOCIATION, INC, petitioner,

vs.
COURT OF APPEALS, VIOLETA MONCAL, and MAJAL DEVELOPMENT CORPORATION,
respondents.

Sangco, Anastacio, Castaneda & Duran Law Office for petitioners & private intervenors- petitioners.

Raul S. Sison Law Offices for intervenor-petitioner Bel-Air Village Association, Inc. Renato L. Dela
Fuente for respondent Ayala Corporation.

G.R. No. L-74376:

Raul S. Sison Law Offices for petitioner.

 Sergio L. Guadiz for private respondents.

G.R. No. L-76394:

Raul S. Sison Law Offices for petitioner.

Gruba, Tanlimco Lamso and Apuhin Law Offices for respondents.

G.R. No. L-78182:

Funk & Associates for petitioners.

Tee Tomas & Associates for respondents.

G.R. No. L-82281:

Funk & Associates for petitioner.

Castillo, Laman, Tan & Associates for private respondents.

SARMIENTO, J.:

Before the Court are five consolidated petitions, 1 docketed as G.R. Nos. 71169, 74376, 76394,
78182, and 82281 hereof, in the nature of appeals (by certiorari under Rule 45 of the Rules of Court)
from five decisions of the Court of Appeals, denying specific performance and damages.

The proceedings were commenced at the first instance by Jose Sangalang, joined by his wife
Lutgarda Sangalang, both residents of No. 110 Jupiter Street, Makati, Metro Manila (G.R. No. 71169)
to enforce by specific performance restrictive easement upon property, specifically the Bel- Air Village
subdivision in Makati, Metro Manila, pursuant to stipulations embodied in the deeds of sale covering
the subdivision, and for damages. Later, the Sangalangs were joined by Felix Gaston, a resident of
No. 64 Jupiter Street of the same municipality, and by Mr. and Mrs. Jose and Alicia Briones, both of
No. 66 Jupiter Street. Pending further proceedings, the Bel-Air Village Association, Inc. (BAVA), an
incorporated homeowners' association, entered its appearance as plaintiff-in-intervention.

BAVA itself had brought its own complaints, four in number, likewise for specific performance and
damages to enforce the same 'deed restrictions.' (See G.R. Nos. 74376, 76394, 78182, and 82281.)

ANTECEDENTS FACTS

I. G.R. No. 71169

The facts are stated in the decision appealed from. We quote:

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(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. 11O Jupiter Street between Makati Avenue and Reposo
Street; appellees-spouses Gaston reside at No. 64 Jupiter Street between Makati Avenue and Zodiac
Street; appellees-spouses Briones reside at No. 66 Jupiter Street also between Makati Avenue and
Zodiac Street; while appellee Bel-Air Village Association, Inc. (hereinafter referred to as BAVA) is the
homeowners' association in Bel-Air Village which takes care of the sanitation, security, traffic regulations
and general welfare of the village.

(4) The lots which were acquired by appellees Sangalang and spouse Gaston and spouse and Briones
and spouse in 1960, 1957 and 1958, respectively, were all sold by MDC subject to certain conditions and
easements contained in Deed Restrictions which formed a part of each deed of sale. The pertinent
provisions in said Deed Restrictions, which are common to all lot owners in Bel-Air Village, are as follows:

I-BEL-AIR ASSOCIATION

The owner of this lot/s or his successors in interest is required to be and is automatically a member of the
Bel-Air Association and must abide by such rules and regulations laid down by the Association in the
interest of the sanitation, security and the general welfare of the community.

The association will also provide for and collect assessments, which will constitute as a lien on the
property junior only to liens of the government for taxes and to voluntary mortgages for sufficient
consideration entered into in good faith.

II-USE OF LOTS

Subject to such amendments and additional restrictions, reservations, servitudes, etc., as the Bel- Air
Association may from time to time adopt and prescribe, this lot is subject to the following restrictions:

a. This lot/s shall not be subdivided. However, three or more lots may be consolidated and subdivided into
a lesser number of lots provided that none of the resulting lots be smaller in area than the smallest lot
before the consolidation and that the consolidation and subdivision plan be duly approved by the
governing body of the Bel-Air Association.

b. This lot/s shall only be used for residential purposes.

c. Only one single family house may be constructed on a single lot, although separate servants' quarters
or garage may be built.

d. Commercial or advertising signs shall not be placed, constructed, or erected on this lot. Name plates
and professional signs of homeowners are permitted so long as they do not exceed 80 x 40 centimeters
in size.

e. No cattle, pigs, sheep, goats, ducks, geese, roosters or rabbits shall be maintained in the lot, except
that pets may be maintained but must be controlled in accordance with the rulings of the Association. The
term "pets' includes chickens not in commercial quantities.

f. The property is subject to an easement of two (2) meters within the lot and adjacent to the rear and
sides thereof not fronting a street for the purpose of drainage, sewage, water and other public facilities as
may be necessary and desirable; and the owner, lessee or his representative shall permit access thereto
by authorized representatives of the Bel-Air Association or public utility entities for the purposes for which
the easement is created.

g. This lot shall not be used for any immoral or illegal trade or activity.

h. The owner and/or lessee of this lot/s shall at all times keep the grass cut and trimmed to reduce the fire
hazard of the property.
 xxx xxx xxx

VI-TERM OF RESTRICTIONS

The foregoing restrictions shall remain in force for fifty years from January 15, 1957, unless sooner
cancelled in its entirety by two thirds vote of members in good standing of the Bel-Air Association.
However, the Association may, from time to time, add new ones, amend or abolish particular restrictions
or parts thereof by majority rule.

VII--ENFORCEMENT OF RESTRICTIONS

The foregoing restrictions may be enjoined and/or enforced by court action by the Bel-Air Association, or
by the Makati Development Corporation or its assigns, or by any registered owner of land within the
boundaries of the Bel-Air Subdivision (Sub-division plan PSD-49226 and Lot 7-B, Psd-47848) or by any
member in good standing of the Bel-Air association." (Exh. 1 -b; Exh. 22, Annex "B"). (Appellant's Brief,
pp. 4- 6)

(5) When MDC sold the above-mentioned lots to appellees' predecessors-in-interest, the whole stretch of
the commercial block between Buendia Avenue and Jupiter Street, from Reposo Street in the west to
Zodiac Street in the east, was still undeveloped. Access, therefore, to Bel-Air Village was opened to all
kinds of people and even animals. So in 1966, although it was not part of the original plan, MDC
constructed a fence or wall on the commercial block along Jupiter Street. In 1970, the fence or wall was
partly destroyed by typhoon "Yoling." The destroyed portions were subsequently rebuilt by the appellant.
(Copuyoc TSN, pp. 31-34, Feb. 12, 1982). When Jupiter Street was widened in 1972 by 3.5 meters, the
fence or wall had to be destroyed. Upon request of BAVA, the wall was rebuilt inside the boundary of the
commercial block. (Copuyoc TSN, pp. 4447, Feb. 12,1982).

(6) When the appellant finally decided to subdivide and sell the lots in the commercial block between
Buendia and Jupiter, BAVA wrote the appellant on May 9, 1972, requesting for confirmation on the use of
the commercial lots. The appellant replied on May 16, 1972, informing BAVA of the restrictions intended
to be imposed in the sale and use of the lots. Among these restrictions are: that the building shall have a
set back of 19 meters; and that with respect to vehicular traffic along Buendia Avenue, entrance only will
be allowed, and along Jupiter Street and side streets, both entrance and exit will be allowed.

(7) On June 30, 1972, appellant informed BAVA that in a few months it shall subdivide and sell the
commercial lots bordering the north side of Buendia Avenue Extension from Reposo Street up to Zodiac
Street. Appellant also informed BAVA that it had taken all precautions and will impose upon the
commercial lot owners deed restrictions which will harmonize and blend with the development and
welfare of Bel-Air Village. Appellant further applied for special membership in BAVA of the commercial lot
owners. A copy of the deed restrictions for the commercial lots was also enclosed. The proposed deed
restrictions shall include the 19 meter set back of buildings from Jupiter Street, the requirement for
parking space within the lot of one (1) parking slot for every seventy five (75) meters of office space in the
building and the limitation of vehicular traffic along Buendia to entrance only, but allowing both vehicular
entrance and vehicular exit through Jupiter Street and any side street.

In its letter of July 10, 1972, BAVA acknowledged the above letter of appellant and informed the latter that
the application for special membership of the commercial lot owners in BAVA would be submitted to
BAVA's board of governors for decision.

(8) On September 25, 1972, appellant notified BAVA that, after a careful study, it was finally decided that
the height limitation of buildings on the commercial lots shall be increased from 12.5 meters to 15 meters.
Appellant further informed BAVA that Jupiter Street shall be widened by 3.5 meters to improve traffic flow
in said street. BAVA did not reply to said letter, but on January 22, 1973, BAVA wrote a letter to the
appellant informing the latter that the Association had assessed the appellant, as special member of the
association, the amount of P40,795.00 (based on 81,590 square meters at P.50 per square meter)
representing the membership dues to the commercial lot owners for the year 1973, and requested the
appellant to remit the amount which its board of governors had already included in its current budget. In
reply, appellant on January 31, 1973 informed BAVA that due to the widening of Jupiter Street, the area
of the lots which were accepted by the Association as members was reduced to 76,726 square meters.
Thus, the corresponding dues at P.50 per square meter should be reduced to P38,363.00. This amount,
 therefore, was remitted by the appellant to BAVA. Since then, the latter has been collecting membership
dues from the owners of the commercial lots as special members of the Association. As a matter of fact,
the dues were increased several times. In 1980, the commercial lot owners were already being charged
dues at the rate of P3.00 per square meter. (Domingo, TSN, p. 36, March 19, 1980). At this rate, the total
membership dues of the commercial lot owners amount to P230,178. 00 annually based on the total area
of 76,726 square meters of the commercial lots.

(9) Meantime, on April 4, 1975, the municipal council of Makati enacted its ordinance No. 81, providing for
the zonification of Makati (Exh. 18). Under this Ordinance, Bel-Air Village was classified as a Class A
Residential Zone, with its boundary in the south extending to the center line of Jupiter Street (Exh. 18-A).

Thus, Chapter III, Article 1, Section 3.03, par. F. of the Ordinance provides:

F. Bel-Air Village area, as bounded on the N by Polaris and Mercedes streets and on the NE by Estrella
Street; on the SE by Epifanio de los Santos Avenue and on the SW by the center line of Jupiter Street.
Then bounded on the N by the abandoned MRR Pasig Line; on the E by Makati Avenue; on the S by the
center line of Jupiter Street and on the W by the center line of Reposo Street." (Exh. 18-A)

Similarly, the Buendia Avenue Extension area was classified as Administrative Office Zone with its
boundary in the North-North East Extending also up to the center line of Jupiter Street (Exh. 18b).

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 NE by Malugay Street; on the SE by Buendia Avenue and on the W by
Ayala Avenue Extension." (Exh. 18-B)

The Residential Zone and the Administrative Office Zone, therefore, have a common boundary along the
center line of Jupiter Street.

The above zoning under Ordinance No. 81 of Makati was later followed under the Comprehensive Zoning
Ordinance for the National Capital Region adopted by the Metro Manila Commission as Ordinance 81 -01
on March 14, 1981 (Exh. 19). However, under this ordinance, Bel-Air Village is simply bounded in the
South-Southeast by Jupiter Street-not anymore up to the center line of Jupiter Street (Exh. B). Likewise,
the blockdeep strip along the northwest side of Buendia Avenue Extension from Reposo to EDSA was
classified as a High Intensity Commercial Zone (Exh. 19-c).

Thus, the Zoning District Boundaries -Makati, in Annex B of the Ordinance provides:

R-I-Low Intensity Residential

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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)

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C-3-High Intensity Commercial Zone

2. A block deep strip along the northwest side of Buendia Ave. Ext. from Reposo to EDSA." (Exh, 19-c)

Under the above zoning classifications, Jupiter Street, therefore, is a common boundary of Bel-Air Village
and the commercial zone.

(10) Meanwhile, in 1972, BAVA had installed gates at strategic locations across Jupiter Street which were
manned and operated by its own security guards who were employed to maintain, supervise and enforce
traffic regulations in the roads and streets of the village. (Villavicencio, TSN, pp, 22-25, Oct. 30, 1980;
BAVA Petition, par. 11, Exh. 17).

Then, on January 17, 1977, the Office of the Mayor of Makati wrote BAVA directing that, in the interest of
public welfare and for the purpose of easing traffic congestion, the following streets in Bel-Air Village
should be opened for public use:

Amapola Street - from Estrella Street to Mercedes Street

Amapola Street -junction of Palma Street gate going to J. Villena Street

Mercedes Street -- from EDSA to Imelda Avenue and Amapola junction

Zodiac Street - from Mercedes Street to Buendia Avenue

Jupiter Street -- from Zodiac Street to Reposo Street connecting Metropolitan Avenue to Pasong Tamo
and V. Cruz Extension intersection

Neptune Street - from Makati Avenue to Reposo Street Orbit Street - from F. Zobel-Candelaria
intersection to Jupiter Street

Paseo de Roxas - from Mercedes Street to Buendia Avenue (Exh. 17, Annex A, BAVA Petition)

On February 10, 1977, BAVA wrote the Mayor of Makati, expressing the concern of the residents about
the opening of the streets to the general public, and requesting specifically the indefinite postponement of
the plan to open Jupiter Street to public vehicles. (Exh. 17, Annex B, BAVA Petition).

However, BAVA voluntarily opened to the public Amapola, Mercedes, Zodiac, Neptune and Paseo de
Roxas streets. (Exh. 17-A, Answer of Makati par. 3-7).

Later, on June 17,1977, the Barangay Captain of Bel-Air Village was advised by the Office of the Mayor
that, in accordance with the agreement entered into during the meeting on January 28, 1 977, the
Municipal Engineer and the Station Commander of the Makati Police were ordered to open for public use
Jupiter Street from Makati Avenue to Reposo Street. Accordingly, he was requested to advise the village
residents of the necessity of the opening of the street in the interest of public welfare. (Exh. 17, Annex E,
BAVA Petition).
 Then, on June 10, 1977, the Municipal Engineer of Makati in a letter addressed to BAVA advised the
latter to open for vehicular and pedestrian traffic the entire portion of Jupiter Street from Makati Avenue to
Reposo Street (Exh. 17, BAVA Petition, par. 14).

Finally, on August 12, 1977, the municipal officials of Makati concerned allegedly opened, destroyed and
removed the gates constructed/located at the corner of Reposo Street and Jupiter Street as well as the
gates/fences located/constructed at Jupiter Street and Makati Avenue forcibly, and then opened the entire
length of Jupiter Street to public traffic. (Exh. 17, BAVA Petition, pars. 16 and 17).

(11) Before the gates were-removed, there was no parking problem or traffic problem in Jupiter Street,
because Jupiter Street was not allowed to be used by the general public (Villavicencio, TSN, pp. 24-25,
Oct. 30, 1980). However, with the opening of Zodiac Street from Estrella Street to Jupiter Street and also
the opening to the public of the entire length of Jupiter Street, there was a tremendous increase in the
volume of traffic passing along Jupiter Street coming from EDSA to Estrella Street, then to Zodiac Street
to Jupiter Street, and along the entire length of Jupiter Street to its other end at Reposo Street.
(Villavicencio, TSN, pp. 30-32, Oct. 30, 1980).

In the meantime, the purchasers of the commercial lots between Jupiter Street and Buendia Avenue
extension had started constructing their respective buildings in 1974-1975. They demolished the portions
of the fence or wall standing within the boundary of their lots. Many of the owners constructed their own
fences or walls in lieu of the wall and they employed their own security guards. (TSN, p. 83, Feb. 20,1981;
TSN, pp. 53-54; 72-74, March 20,1981; TSN, pp. 54-55, July 23, 1981).

(12) Then, on January 27, 1978, appellant donated the entire Jupiter Street from Metropolitan Avenue to
Zodiac Street to BAVA (Exh. 7)- However, even before 1978, the Makati Police and the security force of
BAVA were already the ones regulating the traffic along Jupiter Street after the gates were opened in
1977. Sancianco TSN, pp. 26-30, Oct. 2,1981).

In October, 1979, the fence at the corner of Orbit and Neptune Streets was opened and removed (BAVA
Petition, par. 22, Exh. 17). The opening of the whole stretch of Orbit Street from J.P. Rizal Avenue up to
Imelda Avenue and later to Jupiter Street was agreed to at the conference attended by the President of
BAVA in the office of the Station Commander of Makati, subject to certain conditions, to wit:

That, maintenance of Orbit St. up to Jupiter St. shall be shouldered by the Municipality of Makati.

That, street lights will be installed and maintenance of the same along Orbit St. from J.P. Rizal Ave. up to
Jupiter St. shall be undertaken by the Municipality.

That for the security of the residents of San Miguel Village and Bel-Air Village, as a result of the opening
of Orbit Street, police outposts shall be constructed by the Municipality of Makati to be headed by
personnel of Station No. 4, in close coordination with the Security Guards of San Miguel Village and Bel-
Air Village." (CF. Exh. 3 to Counter-Affidavit, of Station Commander, Ruperto Acle p. 253, records)"
(Order, Civil Case No. 34948, Exh. 17-c).

(13) Thus, with the opening of the entire length of Jupiter Street to public traffic, the different residential
lots located in the northern side of Jupiter Street ceased to be used for purely residential purposes. They
became, for all purposes, commercial in character.

(14) Subsequently, on October 29, 1979, the plaintiffs-appellees Jose D. Sangalang and Lutgarda D.
Sangalang brought the present action for damages against the defendant-appellant Ayala Corporation
predicated on both breach of contract and on tort or quasi-delict A supplemental complaint was later filed
by said appellees seeking to augment the reliefs prayed for in the original complaint because of alleged
supervening events which occurred during the trial of the case. Claiming to be similarly situated as the
plaintiffs-appellees, the spouses Felix C. Gaston and Dolores R. Gaston, Jose V. Briones and Alicia R.
Briones, and the homeowners' association (BAVA) intervened in the case.

(15) After trial on the merits, the then Court of First Instance of Rizal, Pasig, Metro Manila, rendered a
decision in favor of the appellees the dispositive portion of which is as follows:

WHEREFORE, judgment is hereby accordingly rendered as follows:

 ON PLAINTIFFS' COMPLAINT:

Defendant is ordered to pay to the plaintiffs-spouses Sangalang the following damages:

1. The sum of P500,000.00 as actual and consequential damages;

2. The sum of P2,000,000.00 as moral damages;

3. The sum of P500,000.00 as exemplary damages;

4. The sum of P100,000.00 as attorney's fees; and

5. The costs of suit.

ON INTERVENORS FELIX and DOLORES GASTON'S COMPLAINT:

Defendant is ordered to pay to the spouses Felix and Dolores Gaston, the following damages:

1 . The sum of P400,000.00 as consequential damages;

2 The sum of P500,000.00 as moral damages;

3 The sum of P500,000.00 as exemplary damages:

4 The sum of P50,000.00 as attorney's fees; and

5 The costs of suit.

ON INTERVENORS JOSE and ALICIA BRIONES' COMPLAINT:

Defendant is ordered to pay to the spouses Jose and Alicia Briones, the following damages:

1 . The sum of P400,000.00 as consequential damages;

2 The sum of P500,000.00 as moral damages;

3 The sum of P500,000.00 as exemplary damages;

4 The sum of P50,000.00 as attorney's fees; and

5 The costs of suit.

ON INTERVENOR BAVA'S COMPLAINT:

Defendant is ordered to pay intervenor BAVA, the following damages:

1. The sum of P400,000.00 as consequential damages;

2. The sum of P500,000.00 as exemplary damages;

3. The sum of P50,000.00 as attorney's fees; and

4. The costs of suit.

The above damages awarded to the plaintiffs and intervenors shall bear legal interest from the filing of the
complaint.
 Defendant is further ordered to restore/reconstruct the perimeter wall at its original position in 1966 from
Reposo Street in the west to Zodiac Street in the east, at its own expense, within SIX (6) MONTHS from
finality of judgment.

SO ORDERED.

(Record on Appeal, pp. 400-401) 2

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On appeal, the Court of Appeals 3 rendered a reversal, and disposed as follows:

ACCORDINGLY, finding the decision appealed from as not supported by the facts and the law on the
matter, the same is hereby SET ASIDE and another one entered dismissing the case for lack of a cause
of action. Without pronouncement as to costs.

SO ORDERED. 4

II. G.R. No. 74376

This petition was similarly brought by BAVA to enforce the aforesaid restrictions stipulated in the
deeds of sale executed by the Ayala Corporation. The petitioner originally brought the complaint in
the Regional Trial Court of Makati, 5 principally for specific performance, plaintiff [now, petitioner]
alleging that the defendant [now, private respondent] Tenorio allowed defendant [Tenorio's co-private
respondent] Gonzalves to occupy and convert the house at 50 Jupiter Street, Bel-Air Village, Makati,
Metro Manila, into a restaurant, without its knowledge and consent, and in violation of the deed
restrictions which provide that the lot and building thereon must be used only for residential purposes
upon which the prayed for main relief was for 'the defendants to permanently refrain from using the
premises as commercial and to comply with the terms of the Deed Restrictions." 6 The trial court
dismissed the complaint on a procedural ground, i.e., pendency of an Identical action, Civil Case No.
32346, entitled "Bel-Air Village Association, Inc. v. Jesus Tenorio." The Court of Appeals 7 affirmed,
and held, in addition, that Jupiter Street "is classified as High density commercial (C-3) zone as per
Comprehensive Zoning Ordinance No. 81-01 for National Capital Region," 8 following its own ruling in
AC-G.R. No. 66649, entitled "Bel-Air Village Association, Inc. vs. Hy-Land Realty & Development
Corporation, et al."

III. G.R. No. 76394

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Defendants-spouses Eduardo V. Romualdez, Jr. and Buena Tioseco are the owners of a house and lot
located at 108 Jupiter St., Makati, Metro Manila as evidenced by Transfer Certificate of Title No. 332394
of the Registry of Deeds of Rizal. The fact is undisputed that at the time the defendants acquired the
subject house and lot, several restrictions were already annotated on the reverse side of their title;
however, for purposes of this appeal we shall quote hereunder only the pertinent ones, to wit:

(b,) This lot/shall be used only for residential purposes.

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IV. Term of Restriction

The foregoing restriction(s) shall remain in force for fifty years from January 15, 1957, unless sooner
cancelled in its entirety by two-thirds vote of the members in good standing of the Bel-Air Association.
 However, the Association may from time to time, add new ones, amend or abolish particular restrictions
or parts thereof by majority rule.

During the early part of 1979, plaintiff noted that certain renovations and constructions were being made
by the defendants on the subject premises, for which reason the defendants were advised to inform the
plaintiff of the kind of construction that was going on. Because the defendants failed to comply with the
request of the plaintiff, the latter's chief security officer visited the subject premises on March 23, 1979
and found out that the defendants were putting up a bake and coffee shop, which fact was confirmed by
defendant Mrs. Romualdez herself. Thereafter, the plaintiff reminded defendants that they were violating
the deed restriction. Despite said reminder, the defendants proceeded with the construction of the bake
shop. Consequently, plaintiff sent defendants a letter dated April 30, 1979 warning them that if they will
not desist from using the premises in question for commercial purposes, they will be sued for violations of
the deed restrictions.

Despite the warning, the defendants proceeded with the construction of their bake shop. 9

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The trial court 10 adjudged in favor of BAVA. On appeal, the Court of Appeals 11 reversed, on the
strength of its holding in AC-G.R. No. 66649 earlier referred to.

BAVA then elevated the matter to the Court by a petition for review on certiorari. The Court 12 initially
denied the petition "for lack of merit, it appearing that the conclusions of the respondent Court of
Appeals that private respondents' bake and coffee shop lies within a commercial zone and that said
private respondents are released from their obligations to maintain the lot known as 108 Jupiter
Street for residential purposes by virtue of Ordinance No. 81 of the Municipality of Makati and
Comprehensive Zoning Ordinance No. 81-01 of the Metropolitan Manila Commission, are in accord
with law and jurisprudence," 13 for which BAVA sought a reconsideration. Pending resolution, the case
was referred to the Second Division of this Court, 14 and thereafter, to the Court En Banc en consulta.
15
Per our Resolution, dated April 29, 1988, we consolidated this case with G.R. Nos. 74376 and
82281. 16

IV. G.R. No. 78182.

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The case stemmed from the leasing by defendant Dolores Filley of her building and lot situated at No. 205
Reposo Street, Bel-Air Village Makati, Metro Manila to her co-defendant, the advertising firm J. Romero
and Associates, in alleged violation of deed restrictions which stipulated that Filley's lot could only be
used for residential purposes. Plaintiff sought judgment from the lower court ordering the defendants to
"permanently refrain" from using the premises in question "as commercial" and to comply with the terms
of the deed restrictions.

After the proper proceedings, the court granted the plaintiff the sought for relief with the additional
imposition of exemplary damages of P50,000.00 and attorney's fees of P10,000.00. The trial court gave
emphasis to the restrictive clauses contained in Filley's deed of sale from the plaintiff, which made the
conversion of the building into a commercial one a violation.

Defendants now seek review and reversal on three (3) assignments of errors, namely:

I.

THE TRIAL COURT ERRED IN NOT FINDING THAT THE REGULATIONS PROMULGATED BY THE
MUNICIPAL AUTHORITIES IN MAKATI AND THE MINISTRY OF HUMAN SETTLEMENT'S CHANGING
THE CHARACTER OF THE AREAS IN QUESTION HAD RENDERED THE RESTRICTIVE EASEMENT
ON THE TITLE OF THE APPELLANTS VACATED.
 II.

THE COURT ERRED IN NOT RULING THAT BECAUSE THE APPELLEE(S) HAD ALLOWED THE USE
OF THE PROPERTY WITHIN THE VILLAGE FOR NON- RESIDENTIAL PURPOSES, IT IS NOW
ESTOPPED FROM ENFORCING THE RESTRICTIVE PROHIBITIONS SUBJECT MATTER OF THIS
CASE.

III.

THE COURT ERRED IN NOT FINDING THAT THERE EXISTED A BILATERAL CONTRACT BETWEEN
THE PARTIES AND THAT SINCE APPELLEE HAD NOT PERFORMED ITS OBLIGATIONS UNDER
THIS ARRANGEMENT THE APPELLANT IN TURN WAS UNDER NO OBLIGATION TO ANNOTATE
THE RESTRICTIVE PROHIBITIONS ON THE BACK OF THE TITLE.

Appellants anchor their appeal on the proposition that the Bel-Air Village area, contrary to plaintiff-
appellee's pretension of being a strictly residential zone, is in fact commercial and characterize the
restrictions contained in appellant Filley's deed of sale from the appellee as completely outmoded, which
have lost all relevance to the present-day realities in Makati, now the premier business hub of the nation,
where there is a proliferation of numerous commercial enterprises established through the years, in fact
even within the heart of so-called "residential" villages. Thus, it may be said that appellants base their
position on the inexorable march of progress which has rendered at naught the continued efficacy of the
restrictions. Appellant on the other hand, relies on a rigid interpretation of the contractual stipulations
agreed upon with appellant Filley, in effect arguing that the restrictions are valid ad infinitum.

The lower court quite properly found that other commercial establishments exist in the same area (in fact,
on the same street) but ignored it just the same and said-

The fact that defendants were able to prove the existence of several commercial establishments inside
the village does not exempt them from liability for violating some of the restrictions evidently choosing to
accord primacy to contractual stipulation. 17

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The Court of Appeals 18 overturned the lower court, 19 likewise based on AC-G.R. No. 66649. The
respondent Court observed also that J. Romero & Associates had been given authority to open a
commercial office by the Human Settlements Regulatory Commission.

V. G.R. No. 82281

The facts of this case have been based on stipulation. We quote:

COMES NOW, the Parties, assisted by their respective counsel and to this Honorable Court, respectfully
enter into the following stipulations of facts, to wit:

1. The parties admit the personal circumstances of each other as well as their capacities to sue and be
sued.

2. The parties admit that plaintiff BAVA for short) is the legally constituted homeowners' association in
Bel-Air Subdivision, Makati, Metro Manila.

3. The parties admit that defendant Violets Moncal is the registered owner of a parcel of land with a
residential house constructed thereon situated at No. 104 Jupiter Street, Bel-Air Village, Makati, Metro
Manila; that as such lot owner, she is a member of the plaintiff association.

4. The parties admit that defendant Majal Development Corporation (Majal for short) is the lessee of
defendant Moncal's house and lot located at No. 104 Jupiter Street.
 5. The parties admit that a deed restrictions is annotated on the title of defendant Moncal, which provides,
among others, that the lot in question must be used only for residential purposes;' that at time Moncal
purchased her aforesaid lot in 1959 said deed restrictions was already annotated in the said title.

6. The parties admit that when Moncal leased her subject property to Majal, she did not secure the
consent of BAVA to lease the said house and lot to the present lessee.

7. The parties admit that along Jupiter Street and on the same side where Moncal's property is located,
there are restaurants, clinics placement or employment agencies and other commercial or business
establishments. These establishments, however, were sued by BAVA in the proper court.

8. The parties admit that at the time Moncal purchased the subject property from the Makati Development
Corporation, there was a perimeter wall, running along Jupiter Street, which wall was constructed by the
subdivision owner; that at that time the gates of the entrances to Jupiter Street were closed to public
traffic. In short, the entire length of Jupiter which was inside the perimeter wall was not then open to
public traffic

9. The parties admit that subsequent thereto, Ayala tore down the perimeter wall to give way to the
commercial building fronting Buendia Avenue (now Gil J. Puyat Avenue).

10. The parties admit that on August 12, 1977, the Mayor of Makati forcibly opened and removed the
street gates constructed on Jupiter Street and Reposo Street, thereby opening said streets to the public.

11. The parties admit plaintiffs letters of October 10, 23 and 31, 1984; as well as defendants' letters-reply
dated October 17 and 29, 1984. 20

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The trial court 21 dismissed the petitioner's complaint, a dismissal affirmed on appeal, 22 According to
the appellate court, the opening of Jupiter Street to human and vehicular traffic, and the
commercialization of the Municipality of Makati in general, were circumstances that had made
compliance by Moncal with the aforesaid "deed restrictions" "extremely difficult and unreasonable," 23
a development that had excused compliance altogether under Article 1267 of the Civil Code.

VI. The cases before the Court; the Court's decision.

In brief, G.R. Nos. 74376, 76394, 78182, and 82281 are efforts to enforce the "deed restrictions" in
question against specific residents (private respondents in the petitions) of Jupiter Street and with
respect to G.R. No. 78182, Reposo Street. The private respondents are alleged to have converted
their residences into commercial establishments (a restaurant in G.R. No. 74376, a bakery and coffee
shop in G.R. No. 76394, an advertising firm in G.R. No. 78182; and a construction company,
apparently, in G.R. No. 82281) in violation of the said restrictions. 24

Their mother case, G. R. No. 71169 is, on the other hand, a petition to hold the vendor itself, Ayala
Corporation (formerly Makati Development Corporation), liable for tearing down the perimeter wall
along Jupiter Street that had therefore closed its commercial section from the residences of Bel-Air
Village and ushering in, as a consequence, the full "commercialization" of Jupiter Street, in violation
of the very restrictions it had authored.

As We indicated, the Court of Appeals dismissed all five appeals on the basis primarily of its ruling in
AC-G.R. No. 66649, "Bel-Air Village, Inc. v. Hy-Land Realty Development Corporation, et al.," in
which the appellate court explicitly rejected claims under the same 'deed restrictions" as a result of
Ordinance No. 81 enacted by the Government of the Municipality of Makati, as well as
Comprehensive Zoning Ordinance No. 8101 promulgated by the Metropolitan Manila Commission,
which two ordinances allegedly allowed the use of Jupiter Street both for residential and commercial
purposes. It was likewise held that these twin measures were valid as a legitimate exercise of police
power.

The Court of Appeals' reliance on Ordinance Nos. 81. and 8101 is now assailed in these petitions,
particularly the Sangalang, et al. petition.

Aside from this fundamental issue, the petitioners likewise raise procedural questions. G.R. No.
71169, the mother case, begins with one.

1. G.R. No. 71169

In this petition, the following questions are specifically put to the Court:

May the Honorable Intermediate Appellate Court reverse the decision of the trial court on issues which
were neither raised by AYALA in its Answers either to the Complaint or Supplemental Complaint nor
specifically assigned as one of the alleged errors on appeal? 25

May the Honorable Intermediate Appellate Court arbitrarily ignore the decisive findings of fact of the trial
court, even if uncontradicted and/or documented, and premised mainly on its own unsupported
conclusions totally reverse the trial court's decision? 26

May the Honorable Intermediate Appellate Court disregard the trial court's documented findings that
respondent Ayala for its own self-interest and commercial purposes contrived in bad faith to do away with
the Jupiter Street perimeter wall it put up three times which wall was really intended to separate the
residential from the commercial areas and thereby insure the privacy and security of Bel Air Village
pursuant to respondent Ayala's express continuing representation and/or covenant to do so? 27

a.

The first question represents an attack on the appellate court's reliance on Ordinances Nos. 81 and
81-01, a matter not supposedly taken up at the trial or assigned as an error on appeal. As a rule, the
Court of Appeals (then the Intermediate Appellate Court) may determine only such questions as have
been properly raised to it, yet, this is not an inflexible rule of procedure. In Hernandez v. Andal, 28 it
was stated that "an unassigned error closely related to an error properly assigned, or upon which the
determination of the question raised by the error properly assigned is dependent, will be considered
by the appellate court notwithstanding the failure to assign it as error." 29

In Baquiran v. Court of Appeals, 30 we referred to the " modern trend of procedure . . . according] the
courts broad discretionary power" 31 and in which we allowed consideration of matters "having some
bearing on the issue submitted which the parties failed to raise or the lower court ignore[d]. 32 And in
Vda. de Javellana v. Court of Appeals, 33 we permitted the consideration of a 'patent error' of the trial
court by the Court of Appeals under Section 7, of Rule 51, of the Rules of Court, 34 although such an
error had not been raised in the brief. But what we note is the fact that the Ayala Corporation did raise
the zoning measures as affirmative defenses, first in its answers 35 and second, in its brief, 36 and
submitted at the trial as exhibits. 37 There is accordingly no cause for complaint on the part of the
petitioners for Ayala's violation of the Rules. But while there was reason for the consideration, on
appeal, of the said zoning ordinances in question, this Court nevertheless finds as inaccurate the
Court of Appeals' holding that such measures, had "in effect, [made] Jupiter Street ... a street which
could be used not only for residential purposes," 38 and that "[It lost its character as a street for the
exclusive benefit of those residing in Bel-Air Village completely." 39

Among other things, there is a recognition under both Ordinances Nos. 81 and 8 1-01 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 Extrella St., to Pedestrian Lane by E. De los Santos
Ave., on the SW., from Pedestrian Lane to Reposo St., by Jupiter Street

. . . . 40 Hence, it cannot be said to have been "for the exclusive benefit" of Bel-Air Village residents.

We come to the perimeter wall then standing on the commercial side of Jupiter Street the destruction
of which opened the street to the public. The petitioners contend that the opening of the thoroughfare
had opened, in turn, the floodgates to the commercialization of Bel-Air Village. The wall, so they
allege, was designed precisely to protect the peace and privacy of Bel-Air Village residents from the
din and uproar of mercantile pursuits, and that the Ayala Corporation had committed itself to maintain
it. It was the opinion of the Court of Appeals, as we said, that Ayala's liability therefor, if one existed,
had been overtaken by the passage of Ordinances Nos. 81 and 82-01, opening Jupiter Street to
commerce.

It is our ruling, we reiterate, that Jupiter Street lies as a mere boundary, a fact acknowledged by the
authorities of Makati and the National Government and, as a scrutiny of the records themselves
reveals, by the petitioners themselves, as the articles of incorporation of Bel-Air Village Association
itself would confirm. As a consequence, Jupiter Street was intended for the use by both -the
commercial and residential blocks. It was not originally constructed, therefore, for the exclusive use of
either block, least of all the residents of Bel-Air Village, but, we repeat, in favor of both, as
distinguished from the general public.

When the wall was erected in 1966 and rebuilt twice, in 1970 and 1972, it was not for the purpose of
physically separating the two blocks. According to Ayala Corporation, it was put up to enable the Bel-
Air Village Association "better control of the security in the area, 41 and as the Ayala Corporation's
"show of goodwill " 42 a view we find acceptable in the premises. For it cannot be denied that at that
time, the commercial area was vacant, "open for [sic] animals and people to have access to Bel-Air
Village." 43 There was hence a necessity for a wall.

In any case, we find the petitioners' theory, that maintaining the wall was a matter of a contractual
obligation on the part of Ayala, to be pure conjecture. The records do not establish the existence of
such a purported commitment. For one, the subdivision plans submitted did not mention anything
about it. For another, there is nothing in the "deed restrictions" that would point to any covenant
regarding the construction of a wall. There is no representation or promise whatsoever therein to that
effect.

With the construction of the commercial buildings in 1974, the reason for which the wall was built- to
secure Bel-Air Village from interlopers had naturally ceased to exist. The buildings themselves had
provided formidable curtains of security for the residents. It should be noted that the commercial lot
buyers themselves were forced to demolish parts of the wall to gain access to Jupiter Street, which
they had after all equal right to use.

In fine, we cannot hold the Ayala Corporation liable for damages for a commitment it did not make,
much less for alleged resort to machinations in evading it. The records, on the contrary, will show that
the Bel-Air Village Association had been informed, at the very outset, about the impending use of
Jupiter Street by commercial lot buyers. We quote:

xxxxxxxxx
 1. Exh. I of appellee, the memorandum of Mr. Carmelo Caluag, President of BAVA, dated May 10, 1972,
informing the BAVA Board of Governors and Barrio Council members about the future use of Jupiter
Street by the lot owners fronting Buendia Avenue. The use of Jupiter Street by the owners of the
commercial lots would necessarily require the demolition of the wall along the commercial block adjoining
Jupiter Street.

2. Exh. J of appellee, the minutes of the joint meeting of BAVA Board of Governors and the Bel-Air Barrio
Council where the matter that "Buendia lot owners will have equal rights to use Jupiter Street," and that
Ayala's "plans about the sale of lots and use of Jupiter Street" were precisely taken up. This confirms that
from the start BAVA was informed that the commercial lot owners will use Jupiter Street and that
necessarily the wall along Jupiter Street would be demolished.

3. Exh. 10, the letter of Mr. Demetrio Copuyoc to the President of BAVA, dated May 16, 1972, expressly
stating that vehicular entrance and exit to the commercial lots would be allowed along Jupiter and side
streets.

4. Exhs. 27, 27-A, 27-B, the letter of Atty. Salvador J. Lorayes dated June 30, 1972, with enclosed copy of
proposed restriction for the commercial lots to BAVA. He proposed restriction again expressly stated that
"Vehicular entrances and exits are allowed thru Jupiter and any side streets."

5. Exh. L of appellee, the minutes of the meeting of the members of BAVA, dated August 26, 1972, where
it is stated "Recently, Ayala Corporation informed the Board that the lots fronting Buendia Avenue will
soon be offered for sale, and that future lot owners will be given equal rights to use Jupiter Street as well
as members of the Association."

6. Exh. 25, the letter of Atty. Lorayes dated September 25, 1972, informing BAVA of the widening of
Jupiter Street by 3.5 meters to improve traffic flow in said street to benefit both the residents of Bel-Air
and the future owners of the commercial lots. 44

The petitioners cannot successfully rely on the alleged promise by Demetrio Copuyoc, Ayala's
manager, to build a "[f]ence along Jupiter with gate for entrance and/or exit 45 as evidence of Ayala's
alleged continuing obligation to maintain a wall between the residential and commercial sections. It
should be observed that the fence referred to included a "gate for entrance and or exit" which would
have defeated the purpose of a wall, in the sense the petitioners would put in one, that is to say, an
impenetrable barrier. But as Ayala would point out subsequently, the proposed fence was not
constructed because it had become unnecessary when the commercial lot owners commenced
constructions thereon.

Be that as it may, the Court cannot visualize any purported obligation by Ayala Corporation to keep
the wall on the strength of this supposed promise alone. If truly Ayala promised anything assuming
that Capuyoc was authorized to bind the corporation with a promise it would have been with respect
to the fence. It would not have established the pre-existing obligation alleged with respect to the wall.

Obligations arise, among other things, from contract. 46 If Ayala, then, were bound by an obligation, it
would have been pursuant to a contract. A contract, however, is characterized by a "meeting of minds
between two persons . 47 As a consensual relation, it must be shown to exist as a fact, clearly and
convincingly. But it cannot be inferred from a mishmash of circumstances alone disclosing some kind
of an "understanding," when especially, those disparate circumstances are not themselves
incompatible with contentions that no accord had existed or had been reached. 48

The petitioners cannot simply assume that the wall was there for the purpose with which they now
give it, by the bare coincidence that it had divided the residential block from the commercial section of
Bel-Air. The burden of proof rests with them to show that it had indeed been built precisely for that
objective, a proof that must satisfy the requirements of our rules of evidence. It cannot be made to
stand on the strength of plain inferences.
 b.

This likewise answers the petitioners' second query, whether or not the Court of Appeals had
"arbitrarily ignore(d) the decisive findings of the trial court." 49 i.e., findings pointing to alleged acts
performed by the Ayala Corporation proving its commitment to maintain the wall abovesaid.
Specifically, the petitioners refer to, among other things: (1) Ayala's alleged announcement to Bel- Air
Village Association members that "[the perimeter wall along Jupiter Street will not be demolished," 50
(2) Ayala's alleged commitment "during the pendency of the case in the trial court" to restore the wall;
(3) alleged assurances by Copuyoc that the wall will not be removed; (4) alleged contrivances by the
corporation to make the association admit as members the commercial lot buyers which provided
them equal access to Jupiter Street; and (5) Ayala's donation to the association of Jupiter Street for
"private use" of Bel-Air residents. 51

682 (1903), where it was held that "whether the plaintiffs services were solicited or whether they were
offered to the defendant for his assistance, inasmuch as these services were accepted and made use
of by the latter, we must consider that there was a tacit and mutual consent as to the rendition of
services." (At 686.) In that case, the defendant had enormously benefitted from the services that
entitled the plaintiff to compensation on the theory that no one may unjustly enrich himself at the
expense of another (Solutio indebiti) The facts of this case differ.

As we stated, the Ayala Corporation's alleged conduct prior to or during the proceedings below are
not necessarily at war with claims that no commitment had been in fact made.

With respect to Ayala's alleged announcement before the association, the Court does not agree that
Ayala had categorically assumed as an obligation to maintain the wall "perpetually," i.e., until the year
2007 (the expiration date under the "deed restrictions.") There is nothing in its statement that would
bare any commitment. In connection with the conference between the parties "during the pendency"
of the trial, it is to be noted that the Ayala Corporation denies having warranted the restoration of the
said wall therein. What, on the other hand, appears in the records is the fact that Ayala did make that
promise, but provided that the Mayor allowed it. It turned out, however, that the Mayor balked at the
Idea. 52 But assuming that Ayala did promise to rebuild the wall (in that conference), it does not seem
to us that it did consequently promise to maintain it in perpetuity.

It is unfair to say, as the trial court did, that the Ayala had "contrived to make future commercial lot
owners special members of BAVA and thereby acquire equal right with the regular members thereof
to use Jupiter Street 53 since, as we stated, the commercial lot buyers have the right, in any event, to
make use of Jupiter Street, whether or not they are members of the association. It is not their
memberships that give them the right to use it. They share that right with Bel-Air residents from the
outset.

The objective of making the commercial lot owners special members of the Bel-Air Village
Association was not to accord them equal access to Jupiter Street and inferentially, to give them the
right to knock down the perimeter wall. It was, rather, to regulate the use of the street owing precisely
to the "planned" nature of Ayala's development project, and real estate development in general, and
this could best be done by placing the commercial lot owners under the association's jurisdiction.

Moreover, Ayala's overtures with the association concerning the membership of commercial lot
buyers therein have been shown to be neither perfidious nor unethical nor devious (paraphrasing the
lower court). We quote anew:

xxxxxxxxx
 (7) On June 30, 1972, appellant informed BAVA that in a few months it shall subdivide and sell the
commercial lots bordering the north side of Buendia Avenue Extension from Reposo Street up to Zodiac
Street. Appellant also informed BAVA that it had taken all precautions and will impose upon the
commercial lot owners deed restrictions which will harmonize and blend with the development and
welfare of Bel-Air Village. Appellant further applied for special membership in BAVA of the commercial lot
owners. A copy of the deed restrictions for the commercial lots was also enclosed. The proposed deed
restrictions shall include the 19 meter set back of buildings from Jupiter Street, the requirement for
parking space within the lot of one (1) parking slot for every seventy five (75) meters of office space in the
building and the limitation of vehicular traffic along Buendia to entrance only, but allowing both vehicular
entrance and vehicular exit through Jupiter Street and any side street.

In its letter of July 10, 1972, BAVA acknowledged the above letter of appellant and informed the latter
that the application for special membership of the commercial lot owners in BAVA would be submitted
to BAVA's board of governors for decision.

(8) On September 25,1972, appellant notified BAVA that, after a careful study, it was finally decided that
the height limitation of buildings on the commercial lots shall be increased from 12.5 meters to 15 meters.
Appellant further informed BAVA that Jupiter Street shall be widened by 3.5 meters to improve traffic flow
in said street. BAVA did not reply to said letter, but on January 22, 1973, BAVA wrote a letter to the
appellant informing the latter that the Association had assessed the appellant, as special member of the
association, the amount of P40,795.00 (based on 81,590 square meters at P.50 per square meter)
representing the membership dues of the commercial lot owners for the year 1973, and requested the
appellant to remit the amount which its board of governors had already included in its current budget. In
reply, appellant on January 31, 1973 informed BAVA that due to the widening of Jupiter Street, the area
of the lots which were accepted by the Association as members was reduced to 76,726 square meters.
Thus, the corresponding due at P.50 per square meter should be reduced to P38,363.00. This amount,
therefore, was remitted by the appellant to BAVA. Since then, the latter has been collecting membership
dues from the owners of the commercial lots as special members of the Association. As a matter of fact,
the dues were increased several times. In 1980, the commercial lot owners were already being charged
dues at the rate of P3.00 per square meter. (Domingo, TSN, p. 36, March 19, 1980). At this rate, the total
membership dues of the commercial lot owners amount to P230,178.00 annually based on the total area
of 76,726 square meters of the commercial lots. 54

xxxxxxxxx

The alleged undertaking, finally, by Ayala in the deed of donation (over Jupiter Street) to leave Jupiter
Street for the private use of Bel-Air residents is belied by the very provisions of the deed. We quote:

xxxxxxxxx

IV. That the offer made by the DONOR had been accepted by the DONEE subject to the condition that
the property will be used as a street for the use of the members of the DONEE, their families, personnel,
guests, domestic help and, under certain reasonable conditions and restrictions, by the general public,
and in the event that said lots or parts thereof cease to be used as such, ownership thereof shall
automatically revert to the DONOR. The DONEE shall always have Reposo Street, Makati Avenue, and
Paseo de Roxas open for the use of the general public. It is also understood that the DONOR shall
continue the maintenance of the street at its expense for a period of three years from date hereof." (Deed
of Donation, p. 6, Exh. 7) 55

xxxxxxxxx

The donation, on the contrary, gave the general public equal right to it.

The Court cannot then say, accepting the veracity of the petitioners' facts" enumerated above, that
the Ayala Corporation may be held liable for specific performance of a demandable obligation, let
alone damages.
The Court adds that Ayala can hardly be held responsible for the alleged deterioration of "living and
environmental conditions" 56 of the Bel-Air area, as a consequence of "Ayala's authorized demolition
of the Jupiter perimeter wall in 1974-1975. " 57 We agree with Ayala that until 1976, "there was peace
and quiet" at Jupiter Street, as the petitioners' (Sangalang, Gaston, and Briones) complaints admit.
Hence, the degeneration of peace and order in Bel-Air cannot be ascribed to the destruction of the
wall in 1974 and 1975.

What Ayala submits as the real cause was the opening of Jupiter Street to vehicular traffic in 1977., 58
But this was upon orders of the Mayor, and for which the homeowners' association had precisely filed
suit (Civil Case No. 34998) 59 to contest the act of the Mayor.

c.

This likewise disposes of the third question presented. The petitioners' reliance on Ayala's alleged
conduct (proving its alleged commitment), so we have ruled, is not well-taken. Ayala's alleged acts do
not, by themselves, reflect a commitment to maintain the wall in dispute. It cannot be therefore said
that the Court of Appeals "arbitrarily ignore(d]" 60 the lower court's findings. Precisely, it is the duty of
the appellate court to review the findings of the trial judge, be they of fact or law. 61 It is not bound by
the conclusions of the judge, for which reason it makes its own findings and arrives at its own
conclusions. Unless a grave abuse of discretion may be imputed to it, it may accept or reject the
lower tribunal's determinations and rely solely on the records.

Accordingly, the Court affirms the Court of Appeals' holding that the Ayala Corporation, in its dealings
with the petitioners, the Bel-Air Village Association in particular, had "acted with justice, gave the
appellees [petitioners] their due and observed honesty and good faith." 62 "Therefore, under both
Articles 19 and 21 of the Civil Code, the appellant [Ayala] cannot be held liable for damages." 63

2. G.R. Nos. 74376, 76394, 78182, & 82281

Our decision also resolves, quite anticlimactically, these companion cases. But we do so for various
other reasons. In the Sangalang case, we absolve the Ayala Corporation primarily owing to our
finding that it is not liable for the opening of Jupiter Street to the general public. Insofar as these
petitions are concerned, we likewise exculpate the private respondents, not only because of the fact
that Jupiter Street is not covered by the restrictive easements based on the "deed restrictions" but
chiefly because the National Government itself, through the Metro Manila Commission (MMC), had
reclassified Jupiter Street into high density commercial (C-3) zone, 64 pursuant to its Ordinance No.
81-01. Hence, the petitioners have no cause of action on the strength alone of the said "deed
restrictions.

In view thereof, we find no need in resolving the questions raised as to procedure, since this
disposition is sufficient to resolve these cases.

It is not that we are saying that restrictive easements, especially the easements herein in question,
are invalid or ineffective. As far as the Bel-Air subdivision itself is concerned, certainly, they are valid
and enforceable. But they are, like all contracts, subject to the overriding demands, needs, and
interests of the greater number as the State may determine in the legitimate exercise of police power.
Our jurisdiction guarantees sanctity of contract and is said to be the "law between the contracting
parties, 65 but while it is so, it cannot contravene 'law, morals, good customs, public order, or public
policy. 66 Above all, it cannot be raised as a deterrent to police power, designed precisely to promote
health, safety, peace, and enhance the common good, at the expense of contractual rights, whenever
necessary. In Ortigas & Co., Limited Partnership v. Feati Bank and Trust Co., 67 we are told:
 xxxxxxxxx

2. With regard to the contention that said resolution cannot nullify the contractual obligations assumed by
the defendant-appellee referring to the restrictions incorporated in the deeds of sale and later in the
corresponding Transfer Certificates of Title issued to defendant-appellee it should be stressed, that while
non-impairment of contracts is constitutionally guaranteed, the rule is not absolute, since it has to be
reconciled with the legitimate exercise of police power, i.e., "the power to prescribe regulations to promote
the health, morals, peace, education, good order or safety and general welfare of the people.' Invariably
described as "the most essential, insistent, and illimitable of powers" and "in a sense, the greatest and
most powerful attribute of government," the exercise of the power may be judicially inquired into and
corrected only if it is capricious, whimsical, unjust or unreasonable, there having been a denial of due
process or a violation of any other applicable constitutional guarantee. As this Court held through Justice
Jose P. Bengson in Philippine Long Distance Company vs. City of Davao, et al. police power 'is elastic
and must be responsive to various social conditions; it is not confined within narrow circumscriptions of
precedents resting on past conditions; it must follow the legal progress of a democratic way of life.' We
were even more emphatic in Vda. de Genuino vs. The Court of agrarian Relations, et al., when We
declared: "We do not see why public welfare when clashing with the individual right to property should not
be made to prevail through the state's exercise of its police power."

Resolution No. 27, 1960 declaring the western part of High way 54, now E. de los Santos Avenue (EDSA,
for short) from Shaw Boulevard to the Pasig River as an industrial and commercial zone, was obviously
passed by the Municipal Council of Mandaluyong, Rizal in the exercise of police power to safeguard or
promote the health, safety, peace, good order and general welfare of the people in the locality. Judicial
notice may be taken of the conditions prevailing in the area, especially where Lots Nos. 5 and 6 are
located. The lots themselves not only front the highway; industrial and commercial complexes have
flourished about the place. EDSA, a main traffic artery which runs through several cities and
municipalities in the Metro Manila area, supports an endless stream of traffic and the resulting activity,
noise and pollution are hardly conducive to the health, safety or welfare of the residents in its route.
Having been expressly granted the power to adopt zoning and subdivision ordinances or regulations, the
municipality of Mandaluyong, through its Municipal Council, was reasonably, if not perfectly, justified
under the circumstances, in passing the subject resolution. 68

xxxxxxxxx

Undoubtedly, the MMC Ordinance represents a legitimate exercise of police power. The petitioners
have not shown why we should hold otherwise other than for the supposed "non-impairment"
guaranty of the Constitution, which, as we have declared, is secondary to the more compelling
interests of general welfare. The Ordinance has not been shown to be capricious or arbitrary or
unreasonable to warrant the reversal of the judgments so appealed. In that connection, we find no
reversible error to have been committed by the Court of Appeals.

WHEREFORE, premises considered, these petitions are DENIED No pronouncement as to costs.

IT IS SO ORDERED.

Fernan, (C.J.), Melencio-Herrera, Gutierrez, Jr., Cruz, Gancayco, Bidin, Cortes, Griño-Aquino,
Medialdea and Regalado, JJ., concur.

Narvasa, J., on leave.

Paras, J., Took no part;

Feliciano, J., Took no part;

Padilla, J., Took no part;

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

2 ollo, G.R. No. 71169, 102-113. The decision of the Court of Appeals makes mention of specified areas in Makati having been converted
into a "High Intensity Commercial Zone" as well as "Low Intensity Residential" (see page 9 of this Decision). This should be either "high" or
"low" density.

3 Jurado Desiderio, J.; Campos, Jr., Jose and Camilon, Serafin, JJ., Concurring. Pascual, Crisolito J., Dissenting. The decision set aside,
dated October 1, 1982, was penned by Hon. Gregorio Pineda, Presiding Judge, Court of First Instance of Rizal, Seventh Judicial District,
Pasig, Metro Manila, Branch XXI.

4 Rollo, Id., 128.

5 Civil Case No. 49217, Hon. Rafael T. Mendoza, Presiding Judge; rollo, G.R. No. 74376, 82.

6 Rollo. Id.

7 Camilon, Serafin, J.; Pascual. Crisolito Campos Jr., Jose, and Jurado, Desiderio, JJ. Concurring.

8 Rollo, Id., 34; emphasis in original.

9 Rollo, G.R. No. 76394, 24-25.

10 Civil Case No. 33112; see Id., 8, 10.

11 Jurado, Desiderio, J.; Campos, J., Jose and Camilon, Serafin JJ. Concurring; Pascual, Crisolito J., Chairman, on leave.

12 First Division.

13 Rollo, Id., 81.

14 Per Resolution, dated February 22, 1988.

15 Per Resolution, dated April 4, 1988.

16 See fn. 1, supra.

17 Rollo, G.R, No. 78182, 36-38.

18 Camilon, Serafin, J.; Pronove, Ricardo and Cacdac, Bonifacio, JJ., Concurring.

19 Civil Case No. 27719, Regional Trial Court, Makati, Branch 145.

20 Rollo, G.R. No. 82281, 33-35.

21 Civil Case No. 8936, Regional Trial Court of Makati, Branch CXL, Hon. Ansberto P. Paredes, presiding, see Id., 32.

22 Bengzon, Eduardo, J.; Kapunan, Santiago and Buena, Arturo, JJ., Concurring.

23 Rollo, Id., 38.

24 See supra, 103-108.

25 Id., 32.

26 Id., 38.

27 Id., 50-51.

28 78 Phil. 196 (1947).

29 Supra, 209; emphasis supplied.

 30 No. L-14551, July 31, 1961, 2 SCRA 873.

31 Supra 877.

32 Supra.

33 No. L-60129, July 29, 1983, 123 SCRA 799.

34 The rule states: Questions that may be decided. No which does not affect the jurisdiction over the subject matter will be considered unless
stated in the assignment of errors and properly argued in the brief, save as the court, as its option, may notice plain errors See rollo, G.R.
No. 71169, Id., 168. The pertinent paragraph of the answer states:

10. That in 1975, the Municipal Government of Makati enacted a zoning ordinance and classified the blocks between Buendia Avenue
Extension and Jupiter Street as an administrative office zone with the north-northeast boundary of the zone extending up to the center line of
Jupiter street. Under the said ordinance, Bel-Air Village has likewise been called 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 come the entire southside
portion of Jupiter Street and will illegally deprive the abutting lot owners on the commercial blocks of their rights to have the street kept open
and to have access to the street, in violation of Act 496, as amended by Republic Act 440.

36 See Id., 169.

37 Exhibits Nos. "18" and "19"; see Id., 168.

38 Id., 116.

39 Id.

40 Id., 66.

41 Rollo, G.R. No. 71169, Id., 124.

42 Id.

43 Id.

44 Id., 124-126; emphasis in original.

45 Id., 52.

46 CIVIL CODE, art. 1157, par. (2).

47 Supra, art. 1305.

48 This case should be distinguished from Perez v. Pomar, 2 Phil.

49 Rollo, Id., 38.

50 Id., 40.

51 Id., 47.

52 Id., 183-185.

53 Id., 92.

54 Id., 105-106.

55 Id., 193; emphasis in original.

56 Id., 45.
 57 Id.

58 Id., 108-110.

59 Id., 193.

60 Id., 38.

61 RULES OF COURT, Rule 46, sec. 18.

62 Rollo, G.R. No. 71169, Id., 126.

63 Id.

64 See rollo, G.R. No. 71169, Id., 117.

65 CIVIL CODE, supra, art. 1159.

66 Supra, art. 1306.

67 No. L-24670, December 14, 1979, 94 SCRA 533.

68 Supra, 545-547.

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