Sangalang vs. IAC

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

Copyright 1994-2017 CD Technologies Asia, Inc. Jurisprudence 1901 to 2016 1
OF APPEALS, VIOLETA MONCAL, and MAJAL
DEVELOPMENT CORPORATION, respondents.
Sangco, Anastacio, Castaeda & 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.
Raul S. Sison Law Offices for petitioner.
Sergio L. Guadiz for private respondents.
Raul S. Sison Law Offices for petitioner.
Gruba, Tanlimco, Lamson and Apuhin Law Offices for respondents.
Funk & Associates for petitioners.
Tee Tomas & Associates for respondents.
Funk & Associates for petitioner.
Castillo, Laman, Tan & Associates for private respondents.
DECISION
SARMIENTO, J : p
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. LexLib
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:
xxx xxx xxx
(1) Bel-Air Village is located north of Buendia Avenue extension

(now Sen. Gil J. Puyat Ave.) across a stretch of commercial block from Reposo
Street in the west up to Zodiac Street in the east. When Bel-Air Village was
planned, this block between Reposo and Zodiac Streets adjoining Buendia
Avenue in front of the village was designated as a commercial block. (Copuyoc,
TSN, p. 10, Feb. 12, 1982)
(2) Bel-Air Village was owned and developed into a residential

subdivision in the 1950s by Makati Development Corporation (hereinafter
referred to as MDC), which in 1968 was merged with appellant Ayala
Corporation.
(3) Appellees-spouses Sangalang reside at No. 110 Jupiter Street

between Makati Avenue and Reposo Street; appellees-spouses Gaston reside at
No. 64 Jupiter Street between Makati Avenue and Zodiac Street;
appellees-spouses Briones reside at No. 66 Jupiter Street also between Makati
Avenue and Zodiac Street; while appellee Bel-Air Village Association, Inc.
(hereinafter referred to as BAVA) is the homeowners' association in Bel-Air
Village which takes care of the sanitation, security, traffic regulations and
general welfare of the village.
(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. 44-47, 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 I, Section 3.03, par. F. of the Ordinance

provides:
"F. Bel-Air Village area, as bounded on the N by Polaris and

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

Administrative Office Zone with its boundary in the North-North East
Extending also up to the center line of Jupiter Street (Exh. 18-b).
Thus, Chapter III, Article I, Section 3.05, par. C. of the Ordinance

provides:
"C. The Buendia Avenue Extension areas, as bounded on the

N-NE by the center line of Jupiter Street, on the SE by Epifanio de los
Santos Avenue; on the SW by Buendia Avenue and on the NW by the
center line of Reposo Street, then on the N-E by Malugay Street; on the
SE by Buendia Avenue and on the W by Ayala Avenue Extension."
(Exh. 18-B)
The Residential Zone and the Administrative 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 block-deep 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-1 Low Intensity Residential.
xxx xxx xxx
"4. Bel-Air 1, 3, 4
Bounded on the North J.P. Rizal and Amapola St.

South Rockwell
Northwest P. Burgos
Southeast Jupiter
Southwest Epifanio de los Santos Ave. (EDSA).
5. Bel-Air 2
Bounded on the Northwest J.P. Rizal

Southwest Makati Avenue
South Jupiter
Southeast Pasig Line
East South Avenue" (Exh. 19-b)
xxx xxx xxx
"C-3 High Intensity Commercial Zone.
"2. A block deep strip along the northwest side of Buendia

Ave. Ext. from Reposo to EDSA." (Exh. 19-c)
Under the above zoning 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, 1977, the Municipal Engineer
and the Station Commander of the Makati Police were ordered to open for
public use Jupiter Street from Makati Avenue to Reposo Street. Accordingly, he
was requested to advise the village residents of the necessity of the opening of
the street in the interest of public welfare. (Exh. 17, Annex E, BAVA Petition)
Then, on June 10, 1977, the Municipal Engineer of Makati in a letter

addressed to BAVA advised the latter to open for vehicular and pedestrian
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, 1930).
However, with the opening of Zodiac Street from Estrella Street to Jupiter Street
and also the opening to the public of the entire length of Jupiter Street, there
was a tremendous increase in the volume of 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, 1931; TSN, pp. 53-54; 72-74, March 20, 1981;
TSN, pp. 54-55, July 23, 1981)
(12) Then, on January 27, 1978, appellant donated the entire Jupiter
Street from Metropolitan Avenue to Zodiac Street to BAVA (Exh. 7). However,
even before 1978, the Makati Police and the security force of BAVA were
already the ones regulating the 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:
ON INTERVENORS JOSE and ALICIA BRIONES' COMPLAINT:
Defendant is ordered to pay to the spouses Jose and Alicia

Briones, the following damages:
2. The sum of P500,000.00 as moral damages;
3. The sum of P500,000.00 as exemplary damages;
ON INTERVENOR BAVA'S COMPLAINT:
Defendant is ordered to pay intervenor BAVA, the following

damages:
2. The sum of P500,000.00 as exemplary damages
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
xxx xxx xxx
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 60 Jupiter Street, Bel-Air
Village, Makati, Metro Manila, into a restaurant, without its knowledge and consent,
and in violation of the deed restrictions which provide that the lot and building
thereon must be used only for residential purposes upon which the prayed-for main
relief was for 'the defendants to permanently refrain from using the premises as
commercial and to comply with the terms of the Deed Restrictions.'" 6 The trial court
dismissed the complaint on a procedural ground, i.e., pendency of an identical action,
Civil Case No. 32346, entitled "Bel-Air Village Association, Inc. v. Jesus Tenorio."
The Court of Appeals 7 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
xxx xxx xxx
Defendants-spouses Eduardo V. Romualdez, Jr. and Buena Tioseco are

the owners of a house and lot located at 108 Jupiter St., Makati, Metro Manila
as evidenced by Transfer 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/s shall be used only for residential purposes."
xxx xxx xxx
"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

xxx xxx xxx
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.
xxx xxx xxx
The case stemmed from the leasing by defendant Dolores Filley of her
building and lot situated at No. 205 Reposo Street, Bel-Air Village Makati,
Metro Manila to her co-defendant, the advertising 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
SETTLEMENTS CHANGING THE CHARACTER OF THE AREAS
IN QUESTION HAD RENDERED THE RESTRICTIVE EASEMENT
ON THE TITLE OF THE APPELLANTS VACATED.
II.
THE COURT ERRED IN NOT RULING THAT BECAUSE

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

EXISTED A BILATERAL CONTRACT BETWEEN THE PARTIES
AND THAT SINCE APPELLEE HAD NOT PERFORMED ITS
OBLIGATIONS UNDER THIS ARRANGEMENT THE APPELLANT
IN TURN WAS UNDER NO OBLIGATION TO ANNOTATE THE
RESTRICTIVE PROHIBITIONS ON THE BACK OF THE TITLE.
Appellants anchor their appeal on the proposition that the Bel-Air

Village area, contrary to plaintiff-appellee's pretension of being a strictly
residential zone, is in fact commercial and characterize the restrictions
contained in appellant Filley's deed of sale from the appellee as completely
outmoded, which have lost all relevance to the present-day realities in Makati,
now the premier business hub of the nation, where there is a proliferation of
numerous commercial enterprises established through the years, in fact even
within the heart of so-called "residential" villages. Thus, it may be said that
appellants base their position on the inexorable march of progress which has
rendered at naught the continued 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
xxx xxx xxx
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 Violeta Moncal is the registered

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

(Majal for short) is the lessee of defendant Moncal's house and lot located at
No. 104 Jupiter Street.
5. The parties admit that a deed restrictions is annotated on the title of

defendant Moncal, which provides, among others, that the lot in question must
be used only for residential purposes;" that at time Moncal purchased her
aforesaid lot in 1959 said deed restrictions was already annotated in the said
title.
6. The parties admit that when Moncal leased her subject property to
Majal, she did not secure the consent of BAVA to lease the said house and lot to
the present lessee.
7. The parties admit that along Jupiter Street and on the same side
where Moncal's property is located, there are restaurants, clinics, placement or
employment agencies and other commercial or business establishments. These
establishments, however, were sued by BAVA in the proper court.
8. The parties admit that at the time Moncal purchased the subject
property from the Makati Development Corporation, there was a perimeter wall,
running along Jupiter Street, which wall was constructed by the subdivision
owner; that at that time the gates of the entrances to Jupiter Street were closed to
public 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
xxx xxx xxx
The trial court 21 dismissed the petitioner's complaint, which dismissal was
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 theretofore closed its
commercial section from the residences of Bel-Air Village and ushering in, as a
consequence, the full "commercialization" of Jupiter Street, in violation of the very
restrictions it had authored.
As We indicated, the Court of Appeals dismissed all 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 . . . accord[ing] 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 answer 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 "[i]t 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
81-01 that Jupiter Street lies as the boundary between Bel-Air Village and Ayala
Corporation's commercial section. And since 1957, it had been considered as a
boundary not as a part of either the residential or commercial zones of Ayala
Corporation's real estate development projects. Thus, the Bel-Air Village
Association's articles of incorporation state that Bel-Air Village is "bounded on the
NE., from Amapola St., to de los Santos Ave., by Estrella St., on the SE., from
Estrella St., to Pedestrian Lane, by E. De los Santos Ave., on the SW., from
Pedestrian Lane to Reposo St., by Jupiter Street . . ." 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:
xxx xxx xxx
1. Exh. I of appellee, the memorandum of Mr. Carmelo Caluag,

President of BAVA, dated May 10, 1972, informing the BAVA Board of
Governors and Barrio Council members about the future use of Jupiter Street by
the lot owners fronting Buendia Avenue. The use of Jupiter Street by the owners
of the commercial lots would necessarily require the demolition of the wall
along the commercial block adjoining Jupiter Street.
2. Exh. J of appellee, the minutes of the joint meeting of BAVA

Board of Governors and the Bel-Air Barrio Council where the matter that
"Buendia lot owners will have equal rights to use Jupiter Street," and that
Ayala's "plans about the sale of lots and use of Jupiter Street" were precisely
taken up. This 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. The proposed restriction again expressly stated that "Vehicular
entrances and exits are allowed thru Jupiter and any side streets.
5. Exh. L of appellee, the minutes of the meeting of the members of

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

6. Exh. 25, the letter of Atty. Lorayes, dated September 25, 1972,
informing BAVA of the widening of Jupiter Street by 3.5 meters to improve
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 preexisting 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 "[t]he 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
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:
xxx xxx xxx
(7) On June 30, 1972, appellant informed BAVA that in a few months
it shall subdivide and sell the commercial lots bordering the north side of
Buendia Avenue Extension from Reposo Street up to Zodiac Street. Appellant
also informed BAVA that it had taken all precautions and will impose upon the
commercial lot owners deed restrictions which will harmonize and blend with
the development and welfare of Bel-Air Village. Appellant further applied for
special membership in BAVA of the commercial lot owners. A copy of the deed
restrictions for the commercial lots was also enclosed. The proposed deed
restrictions shall include the 19 meter set back of buildings from Jupiter Street,
the requirement for parking space within the lot of one (1) parking slot for every
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
xxx xxx xxx
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:
xxx xxx xxx
"IV. That the offer made by the DONOR had been accepted by the
DONEE subject to the condition that the property will be used as a street for the
use of the members of the DONEE, their families, personnel, guests, domestic
help and, under certain reasonable conditions and restrictions, by the general
public, and in the event that said lots or parts thereof cease to be used as such,
ownership thereof shall automatically revert to the DONOR. The DONEE shall
always have Reposo Street, Makati Avenue, and Paseo de Roxas open for the
use of the general public. It is also understood that the DONOR shall continue
the maintenance of the street at its expense for a period of three years from date
hereof." (Deed of Donation, p. 6, Exh. 7) 55
xxx xxx xxx
The donation, on the contrary, gave the general public equal right to it.
The Court cannot then say, accepting the veracity of the petitioners' "facts"
enumerated above, that the Ayala Corporation may be held liable for 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 a "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:
xxx xxx xxx
2. With regard to the contention that said resolution cannot nullify the
contractual obligations assumed by the defendant-appellee referring to the
restrictions incorporated in the deeds of sale and later in the corresponding
Transfer 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, s-1960 declaring the western part of Highway 54,
now E. de los Santos Avenue (EDSA, for short) from Shaw Boulevard to the
Pasig River as an industrial and commercial zone, was obviously passed by the
Municipal Council of Mandaluyong, Rizal in the exercise of police power to
safeguard or promote the health, safety, peace, good order and general welfare
of the people in the locality. Judicial notice may be taken of the conditions
prevailing in the area, especially where Lots Nos. 5 and 6 are located. The lots
themselves not only front the highway; industrial and commercial complexes
have 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
xxx xxx xxx
Undoubtedly, the MMC Ordinance represents a legitimate exercise of police

power. The petitioners have not shown why we should hold otherwise other than for
the supposed "non-impairment" guaranty of the Constitution, which, as we have
declared, is secondary to the more compelling interests of general welfare. The
Ordinance has not been shown to be capricious or arbitrary or unreasonable to
warrant the reversal of the judgments so appealed. In that connection, we 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,

Corts, Grio-Aquino, Medialdea and Regalado, JJ., concur.
Narvasa, J., is on leave.
Paras, J., took no part; member of the Bel-Air Village Asso.
Feliciano, J., took no part; member of BAVA.
Padilla, J., took no part; former Board Member of Ayala Corporation.
Footnotes
1. Consolidated pursuant to our Resolution dated July 18, 1988.

2. Rollo, G.R. No. 71169, 102-113. The decision of the Court of Appeals makes
mention of specified areas in Makati having been converted into a "High Intensity
Commercial Zone" as well as "Low Intensity Residential" (see page 9 of this
Decision). This should be either "high" or "low" density.
3. Jurado, Desiderio, J.; Campos, Jr., Jose and Camilon, 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 error which does not affect the
jurisdiction over the subject matter will be considered unless stated in the assignment
of errors and properly argued in the brief, save as the court, as its option, may notice
plain errors.
35. See rollo, G.R. No. 71169, id., 168. The pertinent paragraph of the answer states:
10. That in 1975, the Municipal Government of Makati enacted a zoning ordinance
and 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 classified into a residential zone, with its boundary at the southwest
being delimited only up to the center line of the Jupiter Street. Similarly, under
Ordinance No. 81-01 of the Metro Manila Commission, Jupiter Street has been made
a common boundary of the commercial blocks along the north side of the Buendia
Avenue Extension and the Bel-Air Village Subdivision, so that the said street is
subject to the common use of the owners of both the commercial blocks as well as the
residential areas.
11. That the restoration/reconstruction of the wall on the blocks along the southern
side of Jupiter Street will close the entire southside portion of Jupiter Street and will
illegally deprive the abutting lot owners on the commercial blocks of their rights to
have the street kept open and to have access to the street, in violation of Act 496, as
amended by Republic Act 440.
36. See id., 169.
37. Exhibits Nos. "18" and "19"; see id., 168.
38. Id., 116.
39. Id.
40. Id., 66.
41. Rollo, G.R. No. 71169, id., 124.
42. Id.
43. Id.
44. Id., 124-126; emphasis in original.
45. Id., 52.
46. CIVIL CODE, art 1157, par. (2).
47. Supra, art. 1305.
48. This case should be distinguished from Perez v. Pomar, 2 Phil. 682 (1903), where it
was held that "whether the plaintiff's services were solicited or whether they were
offered to the defendant for his assistance, inasmuch as these services were accepted
and made use of by the latter, we must consider that there was a tacit and mutual
consent as to the rendition of services." (At 686.) In that case, the defendant had
enormously 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.
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.

Sangalang vs. IAC

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Sangalang vs. IAC

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EN BANC

[G.R. No. 71169. December 22, 1988.]

JOSE D. SANGALANG and LUTGARDA D. SANGALANG,

[G.R. No. 74376. December 22, 1988.]

BEL-AIR VILLAGE ASSOCIATION, INC., petitioner, vs. THE

[G.R. No. 76394. December 22, 1988.]

BEL-AIR VILLAGE ASSOCIATION, INC., petitioner, vs. THE

[G.R. No. 78182. December 22, 1988.]

BEL-AIR VILLAGE ASSOCIATION, INC., petitioner, vs. COURT

[G.R. No. 82281. December 22, 1988.]

BEL-AIR VILLAGE ASSOCIATION, INC., petitioner, vs. COURT

The proceedings were commenced at the first instance by Jose Sangalang,

Copyright 1994-2017 CD Technologies Asia, Inc. Jurisprudence 1901 to 2016 2

I. G.R. No. 71169

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

xxx xxx xxx

(1) Bel-Air Village is located north of Buendia Avenue extension

(2) Bel-Air Village was owned and developed into a residential

(3) Appellees-spouses Sangalang reside at No. 110 Jupiter Street

"I BEL-AIR ASSOCIATION

The owner of this lot/s or his successors in interest is required to

"The association will also provide for and collect assessments,

"II USE OF LOTS

"Subject to such amendments and additional restrictions,

"a. This lot/s shall not be subdivided. However, three or more

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

"c. Only one single family house may be constructed on a

"d. Commercial or advertising signs shall not be placed,

"e. No cattle, pigs, sheep, goats, ducks, geese, roosters or

"f. The property is subject to an easement of two (2) meters

Copyright 1994-2017 CD Technologies Asia, Inc. Jurisprudence 1901 to 2016 4

xxx xxx xxx

"VI TERM OF RESTRICTIONS

"The foregoing restrictions shall remain in force for fifty years

"VII ENFORCEMENT OF RESTRICTIONS

"The foregoing restrictions may be enjoined and/or enforced by

(5) When MDC sold the above-mentioned lots to appellees'

(8) On September 25, 1972, appellant notified BAVA that, after a

(9) Meantime, on April 4, 1975, the municipal council of Makati

Thus, Chapter III, Article I, Section 3.03, par. F. of the Ordinance

"F. Bel-Air Village area, as bounded on the N by Polaris and

Similarly, the Buendia Avenue Extension area was classified as

Thus, Chapter III, Article I, Section 3.05, par. C. of the Ordinance

"C. The Buendia Avenue Extension areas, as bounded on the

The Residential Zone and the Administrative Office Zone, therefore,

Copyright 1994-2017 CD Technologies Asia, Inc. Jurisprudence 1901 to 2016 7

Thus, the Zoning District Boundaries Makati, in Annex B of the

"R-1 Low Intensity Residential.

xxx xxx xxx

Bounded on the North J.P. Rizal and Amapola St.

Bounded on the Northwest J.P. Rizal

xxx xxx xxx

"C-3 High Intensity Commercial Zone.

"2. A block deep strip along the northwest side of Buendia

Under the above zoning classifications, Jupiter Street, therefore, is a

(10) Meanwhile, in 1972, BAVA had installed gates at strategic

Amapola Street from Estrella Street to Mercedes Street

Amapola Street junction of Palma Street gate going to J.

Mercedes Street from EDSA to Imelda Avenue and Amapola

Zodiac Street from Mercedes Street to Buendia Avenue

Jupiter Street from Zodiac Street to Reposo Street connecting

Neptune Street from Makati Avenue to Reposo Street

Orbit Street from F. Zobel Candelaria intersection to

On February 10, 1977, BAVA wrote the Mayor of Makati, expressing