TwinTowers Condominium Corporation vs. Court of Appeals

10/6/2020 SUPREME COURT REPORTS ANNOTATED VOLUME 398 10/6/2020 SUPREME COURT REPORTS ANNOTATED VOLUME 398
against violators.—Clearly, petitioner cannot claim that at the

time of the filing of its petitions with the Court of Appeals, it was
not required under any existing Supreme Court Circular to
include in its petitions a sworn certification of non-forum
shopping. Circular No. 28-91 applies in the instant case, being the
Circular in force at the time. Petitioner cannot even feign
ignorance of Circular No. 28-91 as its petitions were filed more
VOL. 398, FEBRUARY 27, 2003 203
than one year after the Circular’s effectivity. The rule against
Twin Towers Condominium Corporation vs. Court of forum shopping has long been established and Circular No. 28-91
Appeals merely formalized the prohibition and provided the appropriate
penalties against violators.
G.R. No. 123552. February 27, 2003.* Same; Same; Same; Special circumstances or compelling
reasons may justify relaxing the rule requiring certification of non-
TWIN TOWERS CONDOMINIUM CORPORATION, forum shopping.—The Court of Appeals did not err in dismissing
petitioner, vs. THE COURT OF APPEALS, ALS the petition for this procedural lapse. However, special
MANAGEMENT & DEVELOPMENT CORPORATION, circumstances or compelling reasons may justify relaxing the rule
ANTONIO LITONJUA and SECURITIES AND requiring certification on non-forum shopping. Technical rules of
EXCHANGE COMMISSION, respondents. procedure should be used to promote, not frustrate justice. While
the swift unclogging of court dockets is a laudable objective,
Remedial Law; Forum-shopping; Circular No. 28-91 granting substantial justice is an even more urgent ideal. The
specifically provides for summary dismissal of petitions which do certificate of non-forum shopping is a mandatory requirement.
not contain a sworn certification of non-forum-shopping.— Nonetheless, this requirement must not be interpreted too
Circular No. 28-91, which took effect on January 1, 1992, required literally to defeat the ends of justice.
a sworn certification of non-forum shopping in cases filed with the Same; Appeals; Court is not a trier of facts, and it is not the
Court of Appeals and the Supreme Court. Circular No. 28-91 function of the Court to re-examine the evidence submitted by the
specifically provides for summary dismissal of petitions which do parties; Rule admits several exceptions.—The question of whether
not contain a sworn certification of non-forum shopping. petitioner’s claim of P994,529.75 for unpaid assessments and dues
Same; Same; Same; Petitioner cannot claim that at the time of against ALS is supported by sufficient evidence is a purely factual
the filing of its petitions with the Court of Appeals, it was not issue and inevitably requires the weighing of evidence. This Court
required under any is not a trier of facts, and it is not the function of this Court to re-
examine the evidence submitted by the parties. In cases brought
before this Court from the Court of Appeals under Rule 45 of the
______________ Rules of Court, this Court’s jurisdiction is limited to reviewing
errors of law which must be distinctly set forth. In this mode of
* FIRST DIVISION.
appeal, the findings of fact of the Court of Appeals and other
courts of origin are conclusive. x x x This rule admits of several
exceptions. This Court may review the findings of fact of the
204
Court of Appeals: “(a) where there is grave abuse of discretion; (b)
when the finding is grounded entirely on speculations, surmises
or conjectures; (c) when the inference made is manifestly
204 SUPREME COURT REPORTS ANNOTATED mistaken, absurd or impossible; (d) when the judgment of the
Court of Appeals was based on a misapprehension of facts; (e)
Twin Towers Condominium Corporation vs. Court of Appeals when the factual findings are conflicting; (f) when the Court of
Appeals, in making its findings, went beyond the issues of the
existing Supreme Court Circular to include in its petitions a sworn case and the same are contrary to the admissions of both
certification of non-forum shopping; The rule against forum- appellant and appellee; (g) when the Court of Appeals
shopping has long been established and Circular No. 28-91 merely
205
formalized the prohibition and provided the appropriate penalties
central.com.ph/sfsreader/session/00000174fdddd5ba589cf8c0003600fb002c009e/t/?o=False 1/28 central.com.ph/sfsreader/session/00000174fdddd5ba589cf8c0003600fb002c009e/t/?o=False 2/28
5 Rolando C. Malabonga, CA Records, pp. 29-43.

6 Section 6 of Supreme Court Administrative Circular No. 1-95, and
VOL. 398, FEBRUARY 27, 2003 205
Section 1 of Supreme Court Revised Circular No. 28-91.
Twin Towers Condominium Corporation vs. Court of Appeals
206
manifestly overlooked certain relevant facts not disputed by the

parties and which, if properly considered, would justify a different 206 SUPREME COURT REPORTS ANNOTATED
conclusion; and, (h) where the findings of fact of the Court of Twin Towers Condominium Corporation vs. Court of
Appeals are contrary to those of the trial court, or are mere Appeals
conclusions without citation of specific evidence, or where the
facts set forth by the petitioner are not disputed by the
respondent, or where the findings of fact of the Court of Appeals
are premised on the absence of evidence and are contradicted by The Antecedent Facts
the evidence on record.”
On June 30, 1988, petitioner Twin Towers Condominium 7
PETITION for review on certiorari of the decision and Corporation (“petitioner” for brevity) filed a complaint with
resolution of the Court of Appeals. the Securities and Exchange Commission (“SEC” for
brevity) against respondents ALS Management &
The facts are stated in the opinion of the Court. Development Corporation (“ALS” for brevity) and Antonio
Benitez, Parlade, Africa, Herrera, Parlade & Panga Litonjua (“Litonjua” for brevity). The complaint prayed that
Law Offices for petitioner. ALS and Litonjua be ordered to pay solidarity the unpaid
Castillo, Poblador for private respondents. condominium assessments and dues with interests and
penalties covering the four quarters of 1986 and 1987 and
CARPIO, J.: the first quarter of 1988.
The complaint alleged, among others, that petitioner, a
non-stock corporation, is organized for the sole purpose of
The Case holding title to and managing the common areas of Twin
1
Towers Condominium (“Condominium” for brevity).
Before us2 is a petition for review on certiorari to nullify the Membership in petitioner corporation is compulsory and
Decision dated August 3
31, 1995 of the Court of Appeals limited to all registered owners of units in the
and its Resolution dated January 16, 1996 denying Condominium. ALS, as registered owner of Unit No. 4-A
petitioner’s motion for reconsideration. The Court of (“Unit” for brevity) of the Condominium, is a member of
Appeals
4
dismissed petitioner’s appeal from the Decision en petitioner. Litonjua, who is the corporate president of ALS,
banc of the Securities and Exchange Commission, 5
which occupies the Unit.
reversed the order of the SEC Hearing Officer. The Court Petitioner collects from all its members quarterly
of Appeals dismissed the appeal for lack of merit and for assessments and dues as authorized by its Master Deed
non-compliance with6 the requirement on certification of and Declaration of Restrictions (“Master Deed” for brevity)
non-forum shopping. and its By-Laws. As of the filing of the complaint with the
SEC, petitioner’s records of account show that ALS failed to
______________ pay assessments and dues starting 1986 up to the first
quarter of 1988. Petitioner claimed against both ALS and
1 Under Rule 45 of the Rules of Court. Litonjua P118,923.20 as unpaid assessments and dues.
2 Penned by Justice Cancio C. Garcia and concurred in by Justices This amount includes accrued interests of P30,808.33 and
Arturo B. Buena and Eugenio S. Labitoria, Rollo, pp. 36-46. penalty charges of P7,793.34, plus P1,500.00 as unpaid
8
3 Rollo, p. 48. contingency fund assessment for 1987.
4 By Chairman Rosario N. Lopez and concurred in by Associate In their joint Answer with Counterclaim, ALS and
Commissioners Rodolfo L. Samarista, Merle O. Manuel, and Perfecto R. Litonjua asserted that petitioner failed to state a cause of
Yasay, Jr. Commissioner Fe Eloisa C. Gloria did not participate, CA action against Litonjua. ALS and Litonjua argued that
Records, pp. 44-47.
petitioner’s admission that ALS and not Litonjua is the days from finality of this Decision; and
registered owner of the Unit and member of petitioner 2. Ordering the complainant to pay respondent Antonio
exonerates Litonjua from any liability to petitioner. While Litonjua the sum of THREE HUNDRED THOUSAND
ALS is a juridical person that cannot by itself PESOS (P300,000.00) as moral damages, FIFTY
THOUSAND PESOS (P50,000.00) as exemplary damages,
______________ and TWO HUNDRED THOUSAND PESOS (P200,000.00)
as and by way of attorney’s fees.
7 Docketed as SEC CASE No. 3385.
12
8 As of January 31, 1993, petitioner’s claim against ALS amounted to SO ORDERED.”
P994,529.75 inclusive of the amount of P1,500.00 for the contingency fund
for 1987 plus accrued interest in the amount of P378,950.67 and penalty Not satisfied with the SEC Hearing Officer’s decision, both
13
charges in the amount of P115,183.88; Rollo, p. 18. parties filed their respective appeals to the SEC en banc.
Petitioner assailed the award of moral and exemplary
207 damages as well as
VOL. 398, FEBRUARY 27, 2003 207 ______________
Twin Towers Condominium Corporation vs. Court of 9 CA Records, pp. 22-23.

Appeals 10 Ibid., p. 37.
11 Ibid.
physically occupy the Unit, the natural person who 12 See note 5.
physically occupies the Unit does not assume the liability of 13 The parties’ respective recourses were docketed as SEC-AC Nos. 377
ALS to petitioner. Neither does the agent who acts for the and 378.
corporation become personally liable for the corporation’s
obligation. 208
As counterclaim, ALS claimed damages against
petitioner arising from petitioner’s act of repeatedly
208 SUPREME COURT REPORTS ANNOTATED
preventing ALS, its agents and guests from using the
parking space, swimming pool, gym, and other facilities of Twin Towers Condominium Corporation vs. Court of
the Condominium. In addition, Litonjua claimed damages Appeals
against petitioner for the latter’s act of including Litonjua’s
name in the list of delinquent unit 9 owners which was attorney’s fees in favor of Litonjua. On the other hand, ALS
posted on petitioner’s bulletin board. On December 11, appealed that portion of the decision ordering it to pay to
1991, the SEC Hearing Officer ordered petitioner to pay petitioner the assessments and dues.
Litonjua moral and exemplary damages for maliciously In a decision dated July 30, 1993, the SEC en banc
including Litonjua’s name in the list of delinquent unit nullified the award of damages and attorney’s fees to
owners and for impleading him as a respondent. On the Litonjua on the ground that the SEC had no jurisdiction
other hand, the SEC Hearing Officer ordered ALS to pay over Litonjua. The SEC en banc held that there is no intra-
10
the assessments and dues to petitioner. However, the corporate relationship between petitioner and Litonjua who
Hearing Officer did not determine the exact amount to be is not the registered owner of the Unit and thus, not a
paid by ALS because petitioner failed to lay down the11 basis member of petitioner. The SEC en banc stated that
for computing the unpaid assessments and dues. The petitioner could not invoke the doctrine of piercing the veil
dispositive portion of the decision reads thus: of ALS’ corporate fiction since disregarding the corporate
entity is a function of the regular courts.
“WHEREFORE, premises considered, judgment is hereby Furthermore, the SEC en banc remanded the case to the
rendered as follows: Hearing Officer to determine the value of the services
petitioner failed to render to ALS because of the latter’s
1. Ordering respondent ALS to pay the legal
non-use of the Condominium facilities. The SEC en banc
assessments/dues due the complainant within thirty (30)
ruled that the value of these services could be deducted
from the unpaid assessments and dues that ALS owes required by Section 6 of Administrative Circular No. 1-95
petitioner. and Section 2 of Revised Circular No. 28-91.
Thus, the SEC en banc declared: On the merits, the Court of Appeals substantially
affirmed the decision of the SEC en banc that there is no
“WHEREFORE, in view of the foregoing, the order appealed from ground to pierce the veil of ALS’ corporate fiction. The
is hereby reversed insofar as it awards moral and exemplary Court of Appeals held that there is nothing in the records
damages and attorney’s fees to respondent Litonjua as the same is to show that ALS is engaged in unlawful, business or that
null and void
14
for lack of jurisdiction of this Commission over the Litonjua is using ALS to defraud third parties. The fact
said party. alone that ALS is in arrears in paying its assessments and
As regards that portion of the appealed Order directing dues does not make ALS or Litonjua guilty of fraud which
respondent ALS to pay the legal assessment/dues to the would warrant piercing the corporate veil of ALS. Thus, it
complainant TTC within thirty (30) [days] from finality of the said was improper for petitioner to post Litonjua’s name instead
decision, the same is hereby modified by remanding the case to of ALS’ in the list of delinquent unit owners since Litonjua
the hearing officer for determination of the value of the services is not a member of petitioner.
withheld by the complainant TTC from respondent ALS in order The Court of Appeals also sustained the claim of
that the same may be deducted from the amount of legal petitioner against ALS for unpaid assessments and dues
assessments and dues which the respondent corporation shall pay but found that petitioner failed to substantiate by
to the complainant.15 preponderance of evidence the basis for computing the
SO ORDERED.” (Emphasis supplied) unpaid assessments and dues. Thus, the Court of Appeals
remanded the case to the SEC Hearing Officer for further
______________ reception of evidence and for determination of the exact
amount of ALS’ liability to petitioner. The Court of
14 Antonio Litonjua subsequently filed an action for damages against
Appeals, however, directed the SEC Hearing Officer to
petitioner for the latter’s act of including his name in the list of delinquent
deduct from ALS’ unpaid assessments and dues the value
members posted on petitioner’s bulletin board. On September 8, 1998, the
of the services denied to ALS because of the latter’s non-use
Regional Trial Court of Pasig, Branch 166, in Civil Case No. 64115
of the Condominium facilities. In allowing the deduction,
entitled “Antonio K. Litonjua v. Twin Towers Condominium, et al.”
the Court of Appeals declared the Condominium’s House
ordered Twin Towers Condominium to pay Litonjua the amount of
Rule 26.3 as ultra vires. House Rule 26.3, which petitioner
P1,800,000.00 as damages; Rollo, pp. 159-160.
claims as its basis for denying the use of the Condominium
15 See note 4.
facilities to ALS, authorizes withholding of the use of the
209
Condominium facilities from delinquent unit owners. The
Court of Appeals, however, ruled that petitioner is not
expressly authorized by its Master Deed and By-Laws to
VOL. 398, FEBRUARY 27, 2003 209 prohibit delinquent members from using the facilities of
Twin Towers Condominium Corporation vs. Court of the Condominium.
Appeals
210
Petitioner appealed the SEC en banc Decision to the Court

of Appeals contending grave error or grave abuse of 210 SUPREME COURT REPORTS ANNOTATED
discretion by the SEC en banc. Twin Towers Condominium Corporation vs. Court of
Appeals
The Ruling of the Court of Appeals
The Court of Appeals went further and declared the
The Court of Appeals dismissed petitioner’s appeal on both interest
16
and penalty charges prescribed by House Rule
procedural and substantive grounds. Procedurally, the 26.5 on delinquent accounts as exorbitant or grossly
Court of Appeals found the petition defective for failure to excessive, although this was not raised as an issue. While
contain a sworn certification of non-forum shopping as in its complaint, petitioner sought to recover P118,923.20
as unpaid assessments and dues, in its amended petition
for review, petitioner sought P994,529.75, more than

17
eight AND ASSESSMENTS BEING20
COLLECTED FROM THE
times the amount it originally claimed from ALS. PRIVATE RESPONDENTS.”
In the dispositive portion on its assailed decision, the
Court of Appeals declared:
“WHEREFORE, the instant petition is hereby DENIED and is The Ruling of the Court
18
accordingly DISMISSED.”
The petition is partly meritorious.
Hence, this petition. A perusal of the foregoing issues readily reveals that
petitioner raises two aspects of the case for consideration—
the procedural aspect and the substantive aspect.
The Issues We will discuss the procedural aspect first.
In its Memorandum, petitioner assigns the following errors
in the decision of the Court of Appeals: Non-compliance with Supreme Court Circular No. 1-
95 and Revised Circular No. 28-91.
1. “IN DISMISSING THE PETITION ALLEGEDLY
BECAUSE OF PETITIONER’S FAILURE TO COMPLY Petitioner submits that the Court of Appeals erred in
WITH THE PERTINENT PROVISIONS OF SUPREME dismissing its appeal for non-compliance with Supreme
COURT CIRCULAR NOS. 1-95 AND 28-91 ON THE Court Circular No. 1-95 and Revised Circular No. 28-91.
CERTIFICATION AGAINST FORUM SHOPPING”; Petitioner asserts that when it filed its petition, both
2. “IN ORDERING A REMAND OF THE CASE BACK TO circulars were not yet in full force.
THE HEARING OFFICER FOR THE RECEPTION OF Petitioner filed its petition for review with the Court of
EVIDENCE FOR SERVICES SUPPOSEDLY NOT Appeals on August 18, 1993 and its amended petition on
RENDERED BY PETITIONER”; September 3, 1993. Both the original and amended
3. “IN DECLARING HOUSE RULE NO. 26.3 AS ULTRA petitions were filed before the effectivity of Revised
VIRES”; Administrative Circular No 1-95 on June 1, 1995. However,
contrary to petitioner’s claim, before the issuance of
4. “IN FINDING THE PENALTIES 19AND INTERESTS
Revised Administrative Circular No. 1-95, there was
PRESCRIBED IN HOUSE RULE 26.5 AS EXORBITANT
already an existing circular requiring a sworn certification
AND GROSSLY EXCESSIVE”;
of non-forum shopping from a party filing a petition for
5. “IN REFUSING TO RECOGNIZE THE FACT THAT review with the Court of Appeals.
RESPONDENT LITONJUA AND NOT ALS IS THE Circular No. 28-91, which took effect on January 1,
REAL OWNER OF APARTMENT UNIT 4-A”; and 1992, required a sworn certification of non-forum shopping
6. “IN FAILING TO FIND THAT THERE IS ON RECORD in cases filed with the Court of Appeals and the Supreme
OVERWHELMING EVIDENCE TO SHOW THE BASIS Court. Circular No. 28-91 specifically provides for summary
OF THE DUES dismissal of petitions which do not contain a sworn
certification of non-forum shopping. Sections 2 and 3 of
______________ Circular No. 28-91 state:
16 This should read as 26.2, Rollo, p. 177. “2. Certification—The party must certify under oath that he
17 Rollo, p. 45. has not commenced any other action or proceeding
18 Rollo, p. 46. involving the same issues in the Supreme Court, the Court
19 Supra, see note 16. of Appeals, or different Divisions thereof, or any other
tribunal or agency, and that to the best of his knowledge,
211 no such action or proceeding is pending in the Supreme
Court, the Court of
VOL. 398, FEBRUARY 27, 2003 211
Twin Towers Condominium Corporation vs. Court of Appeals ______________

20 Rollo, p. 174. procedural requirement on non-forum shopping. In the

interest of justice, we reinstate the petition.
212
______________
21 Chemphil Export and Import Corp. v. CA, 251 SCRA 257 (1995).
22 Shipside Inc. v. CA, 352 SCRA 334 (2001).
23 Ibid.
Appeals, or different Divisions thereof, or any other
24 Ibid.; Bernardo v. NLRC, 255 SCRA 108 (1996).
tribunal or agency. If there is any action pending, he must
state the status of the same. If he should learn that a 213
similar action or proceeding has been filed or is pending
before the Supreme Court, the Court of Appeals, or
different Divisions thereof, or any other tribunal or VOL. 398, FEBRUARY 27, 2003 213
agency, he should notify the court, tribunal or agency Twin Towers Condominium Corporation vs. Court of
within five (5) days from such notice. Appeals
3. Penalties—
Essentially, the substantive issues for resolution in the
a. Any violation of this Circular shall be a cause for the instant petition can be summarized into four, as follows:
summary dismissal of the multiple petition or complaint.
x x x.” 1. Whether petitioner can collect assessments and
dues despite its denial to ALS of the use of the
Clearly, petitioner cannot claim that at the time of the Condominium facilities pursuant to House Rule
filing of its petitions with the Court of Appeals, it was not 26.3;
required under any existing Supreme Court Circular to
2. Whether ALS can validly offset against its unpaid
include in its petitions a sworn certification of non-forum
assessments and dues the value of the services
shopping. Circular No. 28-91 applies in the instant case,
withheld by petitioner;
being the Circular in force at the time. Petitioner cannot
even feign ignorance of Circular No. 28-91 as its petitions 3. Whether a remand of the case to the proper trial
were filed more than one year after the Circular’s court is necessary to determine the amounts
effectivity. The rule against forum shopping has long been involved; and
established and Circular No. 28-91 merely formalized the 4. Whether the penalties prescribed in House Rule
prohibition and provided the appropriate penalties against 26.2 are grossly excessive and exorbitant.
21
violators.
The Court of Appeals did not err in dismissing the
petition for this procedural lapse. However, special
First Issue: Payment of assessments and dues.
circumstances or compelling reasons may justify relaxing 22
the rule requiring certification on non-forum shopping.
Technical rules of procedure should be used to promote, not Petitioner’s authority to assess dues.
frustrate justice. While the swift unclogging of court
Petitioner was organized to hold title to the common areas
dockets is a laudable objective, granting substantial justice
23 of the Condominium and to act as its management body.
is an even more urgent ideal. The certificate of non-forum
The Condominium Act, the law governing condominiums,
shopping is a mandatory requirement. Nonetheless, this
states that:
requirement must 24not be interpreted too literally to defeat
the ends of justice. “Title to the common areas, including the land, or the
In the instant case, the merits of petitioner’s case should appurtenant interests in such areas, may be held by a corporation
be considered special circumstances or compelling reasons specially formed for the purpose (hereinafter known as the
that justify tempering the hard consequence of the “condominium corporation”) in which the holders of separate
interests shall automatically be members or shareholders, to the

exclusion of others, in proportion to the appurtenant

25
interest of maintaining a special fund for capital expenditures on the
their respective units in the common areas. x x x” common areas of the project; including the cost of
extraordinary repairs, reconstruction or restoration
The Condominium Act provides that the Master Deed may necessitated by damage, depreciation, obsolescence,
authorize the condominium corporation to collect expropriation or condemnation of the common areas or
“reasonable 26 assessments to meet authorized part thereof, as well as the cost of improvements or
expenditures.” For this purpose, each unit owner “may be additions thereto authorized in accordance with the
assessed separately for its share of such expenditures in provisions of the By-Laws;
proportion (unless otherwise provided)27 to its owner’s
b.) x x x
fractional interest in the common areas.” Also, Section 20
c.) There may be assessed against the unit owners, in the
of the Condominium Act declares:
manner prescribed herein or in the By-Laws of the
“Section 20. An assessment upon any condominium made in Condominium Corporation, such other assessments as are
accordance with a duly registered declaration of restrictions shall not specifically provided for herein;
be an d.) The amount of any such assessment, plus interest
penalties, attorney’s fees and other charges incurred for
______________ the collection of such assessment, shall constitute a lien
upon the unit and on the appurtenant interest of the unit
25 Section 2, Republic Act No. 4726.
owner in the Condominium Corporation. Such lien shall
26 Ibid., Section 9 (d).
be constituted in the manner provided in the By-Laws of
27 Ibid.
the Condominium Corporation. The foreclosure, transfer
214
of conveyance, as well as redemption of the unit shall
include the unit owner’s appurtenant interest in the
Condominium Corporation. The Condominium
214 SUPREME COURT REPORTS ANNOTATED Corporation shall have the power to bid at the foreclosure
28
Twin Towers Condominium Corporation vs. Court of Appeals sale.”
obligation of the owner thereof at the time the assessment is

______________
made. x x x” (Emphasis supplied)
28 Rollo, pp. 104-105.
Petitioner is expressly authorized by its Master Deed to
impose reasonable assessments on its members to maintain 215
the common areas and facilities of the Condominium.
Section 4, Part II of petitioner’s Master Deed provides:
VOL. 398, FEBRUARY 27, 2003 215
“Section 4. ASSESSMENTS.—From and after date Ayala Twin Towers Condominium Corporation vs. Court of
Investment & Development Corporation formally conveys the Appeals
condominium project to the Condominium Corporation, the owner
of each unit shall be proportionately liable for the common Thus, petitioner’s right to collect assessments and
expenses of the condominium project, which shall be assessed dues from its members and the corollary obligation of its
against each unit owner in the project and paid to the members to pay are beyond dispute.
Condominium Corporation as provided in Part I Section 8 (b)
hereof at such times and in such manner as shall be provided in There is also no question that ALS is a member of
the By-Laws of the Condominium Corporation, petitioner considering that ALS is the registered owner of
the Unit. Under the automatic exclusive membership
a.) Regular assessments for such amounts as shall be 29
clause in the Master Deed, ALS became a regular member
necessary to meet the operating expenses of the
of petitioner upon its acquisition of a unit in the
Condominium Corporation as well as such amounts,
Condominium.
determined in accordance with the provisions of the By-
Laws, to be made for the purpose of creating and
As a member of petitioner, ALS assumed the compulsory use of the facilities only after ALS had defaulted on its
obligation to share in the common expenses of the obligation to pay the assessments and dues. The denial of
Condominium. This compulsory obligation is further the use of the facilities was the sanction for the prior
emphasized in Section 8, paragraph c, Part I of the Master default incurred by ALS.
Deed, to wit: In essence, what ALS wants is to use its own prior non-
payment as a justification for its future non-payment of its
“Each member of the Condominium Corporation shall share in the assessments and dues. Stated another way, ALS advances
common expenses of the condominium
30
project in the same sharing the argument that a contracting party who is guilty of first
or percentage stated x x x” (Emphasis supplied) breaching his obligation is excused from such breach if the
other party retaliates by refusing to comply with his own
Undoubtedly, as a member of petitioner, ALS is legally
obligation.
bound to pay petitioner assessments and dues to maintain
This obviously is not the law. In reciprocal obligations,
the common areas and facilities of the Condominium. ALS’
when one party fulfills his obligation, and the other does
obligation arises from both the law and its contract with
not, delay by the other begins. Moreover, when one party
the Condominium developer and other unit owners.
does not comply with his obligation, the other party does
Petitioner’s Master Deed provides that a member of the
not incur delay if he does not perform his own reciprocal
Condominium corporation shall share in the common
31
obligation because of the first party’s noncompliance. This
expenses of the condominium project. This obligation does
is embodied in Article 1169 of the Civil Code, the relevant
not depend on the use or non-use by the member of the
provision of which reads:
common areas and facilities of the Condominium. Whether
or not a member uses the common areas or facilities, these “In reciprocal obligations, neither party incurs in delay if the
areas and facilities will have to be maintained. other does not comply or is not ready to comply in a proper
Expenditures must be made to maintain the common areas manner with what is incumbent upon him. From the moment one
and facilities whether a member uses them frequently, of the parties fulfills his obligation, delay by the other begins.”
infrequently or never at all.
ALS asserts that the denial by petitioner to ALS and Thus, before ALS incurred its arrearages, petitioner
Litonjua of the use of the Condominium facilities deprived allowed ALS to use the facilities. However, ALS
petitioner of any right to demand from ALS payment of any subsequently defaulted and thus incurred delay. It was
condominium assessments and dues. ALS contends that only then that petitioner disallowed ALS and Litonjua from
the right to demand payment of assessments and dues using the facilities. Clearly, petitioner’s denial to ALS of
carries with it the correlative obligation to the Condominium facilities, after ALS had defaulted, does
not constitute a valid ground on the part of ALS to refuse
______________ paying its assessments and dues.
29 Ibid., p. 103. Validity of House Rule 26.3.

30 Ibid., p. 104. Petitioner’s House Rules and Regulations (“House Rules”
31 Sections 7 and 8 (c) of Master Deed, Ibid., pp. 103-104. for brevity) expressly authorize denial of the use of
condominium facilities to delinquent members. Specifically,
216
House Rule 26.3 provides that:
217
Twin Towers Condominium Corporation vs. Court of
Appeals VOL. 398, FEBRUARY 27, 2003 217
allow the use of the Condominium facilities. ALS is correct Appeals
if it had not defaulted on its assessment and dues before
the denial of the use of the facilities. However, the records “26. ASSESSMENTS:
clearly show that petitioner denied ALS and Litonjua the
xxx
26.3 Names of unit owners with delinquent accounts who fail to Twin Towers Condominium Corporation vs. Court of
pay two consecutive quarters shall be posted in the bulletin board. Appeals
Unit owners with delinquent accounts, their tenants,
guests/visitors and relatives shall not be allowed the use of all The Court of Appeals sustained respondents’ argument and
facilities of the condominium such as the swimming pool, gym, declared House Rule 26.3 ultra vires on the ground that
social hall, etc.” (Emphasis supplied) petitioner is not expressly authorized by its Master Deed or
its By-Laws to promulgate House Rule 26.3.
The issue on the validity of House Rule 26.3 was raised for
House Rule 26.3 clearly restricts delinquent members
the first time on appeal. It is settled that an issue not
from the use and enjoyment of the Condominium facilities.
raised during trial could not be raised for the first time on
The question is whether petitioner can validly adopt such a
appeal as to do so would be offensive to the basic rules of
32 sanction to enforce the collection of Condominium
fair play, justice, and due process. Nonetheless, the Court
assessments and dues.
of Appeals opted to address this issue.
We rule that House Rule 26.3 is valid.
Petitioner justifies House Rule 26.3 by invoking Section
Section 45 of the Corporation Code provides:
36, paragraph 11 of the Corporation Code which grants
every corporation the power “to exercise such powers as “Sec. 45. Ultra vires acts of corporations.—No corporation under
may be essential or necessary to carry out its purpose or this code shall possess or exercise any corporate powers except
purposes as stated in its Articles of Incorporation.” those conferred by this Code or by its articles of incorporation and
Petitioner was organized for the main purpose of holding except such as are necessary or incidental to the exercise of the
title to and managing the common areas of the powers so conferred.”
Condominium. Petitioner claims that there is here implied
the power to enact such measures as may be necessary to The term ultra vires refers to an act outside or beyond
carry out the provisions of the Articles of Incorporation, By- corporate powers, including those that may ostensibly be
Laws and Master Deed to deal with delinquent members. within such powers but are, by33 general or special laws,
This, asserts petitioner, includes the power to enact House prohibited or declared illegal. The Corporation Code
Rule 26.3 to protect and safeguard the interests not only of defines an ultra vires act as one outside the powers
petitioner but also of its members. conferred by the Code or by the Articles of Incorporation, or
For their part, ALS and Litonjua assail the validity of beyond what is necessary or incidental to the exercise of
House Rule 26.3 alleging that it is ultra vires. ALS and the powers so conferred. Moreover, special laws governing
Litonjua maintain that neither the Master Deed nor the certain classes of corporations, like the Condominium Act,
By-Laws of petitioner expressly authorizes petitioner to also grant specific corporate powers to corporations falling
prohibit delinquent members from using the Condominium under such special laws.
facilities. Being ultra vires, House Rule 26.3 binds no one. The Condominium Act, petitioner’s By-Laws and the
Even assuming that House Rule 26.3 is intra vires, the Master Deed expressly empower petitioner to promulgate
same is iniquitous, unconscionable, and contrary to morals, House Rule 26.3. Section 9 of the Condominium Act
good customs and public policy. Thus, ALS claims it can provides:
validly deduct the value of the services withheld from the
“Section 9. The owner of a project shall, prior to the conveyance of
assessments and dues since it was barred from using the
any condominium therein, register a declaration of restrictions
Condominium facilities for which the assessments and dues
relating to such project, which restrictions x x x shall inure to and
were being collected.
bind all condominium owners in the project, x x x The Register of
Deeds shall enter and annotate the declaration of restrictions
______________
upon the certificate of title covering the land included within the
32 Victorias Milling Co., Inc. v. Court of Appeals, 333 SCRA 663 (2000). project, if the land is patented or registered under the Land
Registration or Cadastral acts.
218 xxx
218 SUPREME COURT REPORTS ANNOTATED ______________

33 Jose C. Vitug, Pandect of Commercial Law and Jurisprudence, 3rd “Without limiting the general nature of the foregoing powers, the
Edition, 1997, p. 466. Board of Directors shall have the power to enforce the limitations,
restrictions, and conditions contained in the Master Deed and
219 Declaration of
220
VOL. 398, FEBRUARY 27, 2003 219
Appeals
Such declaration of restrictions, among other things, may also
provide: Restrictions of the project; promulgate rules and regulations
(a) As to any management body— concerning the use, enjoyment and occupancy of the units, common
areas and other properties in the condominium project, to make
1. For the powers thereof, including power to enforce the and collect assessments against members as unit owners to defray
provisions of the declaration of restrictions;x x x the costs and expenses of the condominium project and the
3. Provisions for maintenance x x x and other services corporation and to secure by legal means the observance of the
benefiting the common areas, x x x” (Emphasis supplied) provisions of the Condominium Act, the Master Deed, the Articles
of Incorporation, these By-Laws, and the rules and regulations
The Condominium Act clearly provides that the Master promulgated by it in accordance herewith. The members of the
Deed may expressly empower the management body, corporation 34bind themselves to comply faithfully with all these
petitioner in the instant case, to enforce all provisions in provisions.” (Emphasis supplied)
the Master Deed and Declaration of Restrictions.
Pursuant to Section 9 (a) (1) and (3) of the Condominium Evidently, the Condominium Act, the Master Deed and
Act, the Master Deed expressly authorizes petitioner to petitioner’s By-Laws grant petitioner the express power to
exercise all the powers granted to the management body by promulgate rules and regulations concerning the use,
the Condominium Act, petitioner’s Articles of Incorporation enjoyment and occupancy of the common areas.
and By-Laws, the Master Deed, and the Corporation Code. Moreover, House Rule 26.3, which prohibits delinquent
Section 3, Part II of the Master Deed reads: members from using the common areas, is necessary to
ensure maintenance of the common areas. Petitioner’s
“Section 3. MANAGEMENT BODY.—The Condominium purpose in enacting House Rule 26.3 is to enforce
Corporation to be formed and organized pursuant to Section 7 of effectively the provisions of the Master Deed. House Rule
Part I, above, shall constitute the management body of the 26.3 is well within the powers of petitioner to adopt as the
project. As such management body, the powers of the same is reasonably necessary to attain the purpose for
Condominium Corporation shall be such as are provided by the which both petitioner and the Condominium project were
Condominium Act, by the Articles of Incorporation and the By- created. Thus, Section 7 of the Master Deed declares:
Laws of the Corporation, by this instrument and by the applicable
“Section 7. CONDOMINIUM CORPORATION.—A corporation to
provisions of the Corporation Code as are not inconsistent with the
be known as THE TWIN TOWERS CONDOMINIUM (hereinafter
Condominium Act. Among such powers but not by way of
referred to as the “Condominium Corporation”), shall be formed
limitation, it shall have the power to enforce the provisions thereof
and organized pursuant to the Condominium Act and the
in accordance with the By-Laws of the corporation.” (Emphasis
Corporation Code to hold title to all the aforestated common areas
supplied)
of the condominium project including the land, to manage THE
Thus, the Master Deed clearly empowers petitioner to TWIN TOWERS CONDOMINIUM and to do such other things as
enforce the provisions of the Master Deed in accordance may be necessary, incidental and 35
convenient to the
with petitioner’s ByLaws. accomplishment of said purposes x x x” (Emphasis supplied)
Petitioner’s By-Laws expressly authorize petitioner’s
Board of Directors to promulgate rules and regulations on Petitioner would be unable to carry out its main purpose of
the use and enjoyment of the common areas. Thus, maintaining the Condominium common areas and facilities
paragraph 2, Section 2 of petitioner’s By-Laws states: if members refuse to pay their dues and yet continue to use
these areas and facilities. To impose a temporary ban on services. Also, ALS failed to establish whether it claimed
the use of the common areas and facilities until the for the costs of the repair because ALS advanced these
assessments and dues in arrears are paid is a reasonable expenses, or for the value of damages caused to the Unit by
measure that petitioner may undertake to compel the the water leakage.
prompt payment of assessments and dues. ALS is therefore barred at this37late stage to interpose
this claim. In Del Rosario v. Bonga, the Court held:
______________
“As a rule, no question will be entertained on appeal unless it has
34 Rollo, p. 25. been raised in the court below. Points of law, theories, issues and
35 Ibid., p. 130. arguments not brought to the attention of the lower court need
not be, and
221
______________
VOL. 398, FEBRUARY 27, 2003 221 36 Asturias Sugar Central v. Pure Cane Molasses Co., 60 Phil. 255 (1934).
Twin Towers Condominium Corporation vs. Court of 37 350 SCRA 101 (2001).
Appeals
222

Second Issue: Offsetting the value of services
withheld against ALS’ unpaid assessments and dues.
ordinarily will not be, considered by a reviewing court, as they

ALS’ claim for reduction of its assessments and dues cannot be raised for the first time at that late stage. Basic
because of its non-use of the Condominium facilities. considerations of due process impel this rule.”
We rule that ALS has no right to a reduction of its
As this claim was a separate cause of action which should
assessments and dues to the extent of its non-use of the
have been raised in ALS’ Answer with Counterclaim, ALS’
Condominium facilities. ALS also cannot offset damages
failure to raise this claim is deemed a waiver of the claim.
against its assessments and dues because ALS is not
entitled to damages for alleged injury arising from its own
violation of its contract. Such a breach of contract cannot
36
be Third Issue: Remand of the case to the proper trial
the source of rights or the basis of a cause of action. To court.
recognize the validity of such claim would be to legalize
ALS’ breach of its contract.
Question of fact.
ALS’ claim for unrendered repair services barred by The Court of Appeals ruled that there is a need to remand
estoppel. the case considering that there is no sufficient evidence on
ALS also justifies its non-payment of dues on the ground of record to establish the amount of petitioner’s claim against
the alleged failure of petitioner to repair the defects in ALS’ ALS for unpaid assessments and dues.
Unit. However, this claim for unrendered repairs was The question of whether petitioner’s claim of
never raised before the SEC Hearing Officer or the SEC en P994,529.75 for unpaid assessments and dues against ALS
banc. The issue on these alleged unrendered repairs, which is supported by sufficient evidence is a purely factual issue
supposedly caused ALS’ Unit to deteriorate, was raised for and inevitably requires the weighing of evidence. This
the first time on appeal. The Court of Appeals did not pass Court is not a trier of facts, and it is not the function of this
upon the same. Court 38to re-examine the evidence submitted by the
Neither in the proceedings in the SEC nor in the parties. In cases brought before this Court from the Court
appellate court did ALS present evidence to substantiate of Appeals under Rule 45 of the Rules of Court, this Court’s
its allegation that petitioner failed to render the repair jurisdiction is limited to reviewing errors of law which
39
39
must be distinctly set forth. In this mode of appeal, the However, none of these exceptions exists in the instant
findings of fact of the40 Court of Appeals and other courts of case.
origin are conclusive. The SEC Hearing Officer found that, while petitioner is
Jurisprudence is settled that: entitled to collect the unpaid assessments and dues from
ALS, petitioner has failed to establish clearly the basis for
“(a)s a rule, the jurisdiction of this Court in cases brought to it computing the correct amount of the unpaid assessments
from the Court of Appeals x x x is limited to the review and and dues. Indeed, there is no evidence laying down the
revision of errors of law allegedly committed by the appellate basis of petitioner’s claim other than allegations of previous
court, as its finding of fact are deemed conclusive. As such this demands and statements of accounts. Whether petitioner
Court is not duty-bound to analyze and weigh all over 41
again the has sufficiently established its claim by preponderance of
evidence already considered in the proceedings below.” evidence requires an examination of the probative weight
of the evidence presented by the parties. Evidently, this is
______________ a question of fact the resolution of which is beyond the
purview of the petition for review where only errors of law
38 Langkaan Realty Development, Inc. v. United Coconut Planters Bank,
may be raised. On the other hand, the decision of the Court
347 SCRA 542 (2000).
of Appeals, finding insufficient evidence on record, was
39 Tan Chun Suy v. Court of Appeals, 229 SCRA 151 (1994).
made under its power to review both questions of fact and
40 Coca-Cola Bottlers Phils., Inc. v. Court of Appeals, 229 SCRA 533 law.
(1994).
41 Fuentes v. Court of Appeals, 268 SCRA 703 (1997). Remand to the proper trial court.
223 While we sustain the ruling of the Court of Appeals, the

case can no longer be remanded to the SEC Hearing
Officer. Republic Act No. 8799, which took effect on August
VOL. 398, FEBRUARY 27, 2003 223 8, 2000, transferred SEC’s jurisdiction over cases involving
Twin Towers Condominium Corporation vs. Court of intra-corporate disputes to courts
Appeals
______________
This rule admits of several exceptions. This Court may
42 Ibid.
review the findings of fact of the Court of Appeals:
224
“(a) where there is grave abuse of discretion; (b) when the finding
is grounded entirely on speculations, surmises or conjectures; (c)
when the inference made is manifestly mistaken, absurd or 224 SUPREME COURT REPORTS ANNOTATED
impossible; (d) when the judgment of the Court of Appeals was
based on a misapprehension of facts; (e) when the factual findings Appeals
are conflicting; (f) when the Court of Appeals, in making its
findings, went beyond the issues of the case and the same are
contrary to the admissions of both appellant and appellee; (g)
of general jurisdiction or the appropriate regional trial
when the Court of Appeals manifestly overlooked certain relevant
courts. Section 5.2 of R.A. No. 8799 reads:
facts not disputed by the parties and which, if properly “5.2. The Commission’s jurisdiction over all cases enumerated
considered, would justify a different conclusion; and, (h) where under Section 5 of Presidential Decree No. 902-A is hereby
the findings of fact of the Court of Appeals are contrary to those of transferred to the Courts of general jurisdiction or the
the trial court, or are mere conclusions without citation of specific appropriate Regional Trial Court; Provided, That the Supreme
evidence, or where the facts set forth by the petitioner are not Court in the exercise of its authority may designate the Regional
disputed by the respondent, or where the findings of fact of the Trial Court branches that shall exercise jurisdiction over these
Court of Appeals are premised on the absence
42
of evidence and are cases. The Commission shall retain jurisdiction over pending
contradicted by the evidence on record.” cases involving intra-corporate disputes submitted for final
resolution which should be resolved within one (1) year from the

enactment of this Code. The Commission shall retain jurisdiction To reiterate, the Condominium Act expressly provides that
over pending suspension of payments/rehabilitation cases filed as the Master Deed may empower the management body of
of 30 June 2000 until finally disposed.” the Condominium “to enforce 44
the provisions of the
declaration of restrictions.” The Master Deed authorizes
Based on43the Resolution issued by this Court in AM No. 00- petitioner, as the management body, to enforce the
8-10-SC, the Court Administrator and the Securities and provisions of the Master Deed in accordance with
Exchange Commission should cause the transfer of the petitioner’s By-Laws. Thus, petitioner’s Board of Directors
records of SEC-AC Nos. 377 and 378 to the proper regional is authorized to determine the reasonableness of the
trial court for further reception of evidence and penalties and interests to be imposed against those who
computation of the correct amount of assessments and dues violate the Master Deed. Petitioner has validly done this by
that ALS shall pay to petitioner. adopting the House Rules.
The Master Deed binds ALS since the Master Deed is
Fourth Issue: Penalties prescribed in House Rule 26.2. annotated on the condominium certificate of title of ALS’
Unit. The Master Deed is ALS’ contract with all
ALS and Litonjua did not question before either the SEC or Condominium members who are all co-owners of the
the Court of Appeals the validity of the penalties prescribed common areas and facilities of the Condominium.
in the Condominium’s House Rule 26.2. Nevertheless, the Contracts have the force of law between
45
the parties and are
Court of Ap-peals ruled that House Rule 26.2 prescribes to be complied with in good faith. From the moment the
grossly excessive penalties and interests. The resolution of contract is perfected, the parties are bound to comply with
this issue is not necessary in arriving at a complete and what is expressly stipulated as well as with what is
just resolution of this case. At any rate, we find the interest required by the nature of the46 obligation in keeping with
and penalties prescribed under House Rule 26.2 reasonable good faith, usage and the law. Thus, when ALS purchased
considering the premier location of the Condominium at its Unit from petitioner, ALS was bound by the terms and
the heart of Makati City. It is inevitable that ALS’ unpaid conditions set forth in the contract, including the
assessments and dues would escalate because ALS’ stipulations in the House Rules of petitioner, such as
delinquency started since 1986. House Rule 26.2.
House Rule 26.2 clearly provides for a 24% interest and In sum, as a member of petitioner, ALS is indisputably
an 8% penalty, both running annually, on the total amount bound by the Condominium’s House Rules which are
due in case of failure to pay, to wit: authorized by the ByLaws, the Master Deed and the
Condominium Act.
______________
Award of attorney’s fees.
43 “In Re: Transfer of Cases from the Securities and Exchange The award of attorney’s fees as damages is the exception
Commission to the Regular Courts Pursuant to RA 8799.” rather than the rule. The general rule is that attorney’s
fees cannot be
225
______________
VOL. 398, FEBRUARY 27, 2003 225
44 Section 9 (b) (1), Condominium Act.
45 Pilipinas Hino, Inc. v. Court of Appeals, 338 SCRA 355 (2000).
Appeals
46 Article 1315 of the Civil Code.
“26.2. Late payment of accounts of members shall be charged an 226

interest rate of 24% per annum. In addition, a penalty at the rate
of 8% per annum shall be charged on delinquent accounts. The
24% interest shall be imposed on unpaid accounts starting with 226 SUPREME COURT REPORTS ANNOTATED
the 21st day of the quarter until fully paid.” Twin Towers Condominium Corporation vs. Court of
Appeals

recovered as part of damages because of the policy that no 47

premium should be placed on the right to litigate. © Copyright 2020 Central Book Supply, Inc. All rights reserved.
Counsel’s 48fees are not awarded every time a party prevails
in a suit. An award of attorney’s fees and expenses of
litigation is proper under the instances provided for in
Article 2208 of the Civil Code, one of which is where the
defendant acted in gross and evident bad faith. In this case,
however, we find no cogent reason to award attorney’s fees
in the absence of showing of gross and evident bad faith on
the part of ALS in refusing to satisfy petitioner’s claim.
WHEREFORE, the petition is GRANTED and the
assailed Decision of the Court of Appeals is SET ASIDE.
ALS Management & Development Corporation is ordered
to pay Twin Towers Condominium Corporation all overdue
assessments and dues, including interest and penalties
from date of default, as shall be determined by the proper
Regional Trial Court in accordance with this Decision. The
proper Regional Trial Court shall complete the
computation within sixty (60) days from its receipt of this
Decision and the records of SEC-AC Nos. 377 and 378.
Costs of suit against ALS Management & Development
Corporation.
SO ORDERED.
Davide, Jr. (C.J., Chairman), Vitug and Azcuna,

JJ., concur.
Ynares-Santiago, J., On leave.
Petition granted, judgment set aside.
Note.—Where forum-shopping is deemed to exist the

summary dismissal of both actions is warranted.
(Prubankers Association vs. Prudential Bank and Trust
Company, 302 SCRA 74 [1999])
——o0o——
______________
47 Philtranco Service Enterprises, Inc. v. Court of Appeals, 273 SCRA

562 (1997).
48 Ibid.
227

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10/6/2020 SUPREME COURT REPORTS ANNOTATED VOLUME 398 10/6/2020 SUPREME COURT REPORTS ANNOTATED VOLUME 398

against violators.—Clearly, petitioner cannot claim that at the

5 Rolando C. Malabonga, CA Records, pp. 29-43.

manifestly overlooked certain relevant facts not disputed by the

VOL. 398, FEBRUARY 27, 2003 207 ______________

Twin Towers Condominium Corporation vs. Court of 9 CA Records, pp. 22-23.

Petitioner appealed the SEC en banc Decision to the Court

for review, petitioner sought P994,529.75, more than

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20 Rollo, p. 174. procedural requirement on non-forum shopping. In the

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exclusion of others, in proportion to the appurtenant

obligation of the owner thereof at the time the assessment is

29 Ibid., p. 103. Validity of House Rule 26.3.

218 SUPREME COURT REPORTS ANNOTATED ______________

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222 SUPREME COURT REPORTS ANNOTATED

ordinarily will not be, considered by a reviewing court, as they

223 While we sustain the ruling of the Court of Appeals, the

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“26.2. Late payment of accounts of members shall be charged an 226

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recovered as part of damages because of the policy that no 47

Davide, Jr. (C.J., Chairman), Vitug and Azcuna,

Petition granted, judgment set aside.

Note.—Where forum-shopping is deemed to exist the

47 Philtranco Service Enterprises, Inc. v. Court of Appeals, 273 SCRA

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