Twin Towers Condominium Corporation vs. ALS Management & Development Corporation

[SEC-SICD * CASE NO. 3385. December 11, 1991.] TWIN TOWERS CONDOMINIUM CORPORATION , complainant , vs . ALS MANAGEMENT & DEVELOPMENT CORPORATION, ET AL. , respondents . D E C I S I O N This is an action for collection of unpaid assessments/dues filed by herein complainant against respondents ALS Management & Development Corporation (ALS, for brevity) and Antonio Litonjua for the amount of P118,923.20. LexLib In its complaint, complainant alleged, inter alia, that it is a non-stock, non-profit corporation duly organized and existing under and by virtue of the laws of the Philippines; that respondent ALS is, likewise, a corporation duly organized and existing under and by virtue of Philippine laws while respondent Antonio Litonjua is its President; that complainant is organized for the sole purpose of holding title to and managing the common areas of the Twin Towers Condominium; that its membership is limited to and compulsory for all registered owners of apartment units in Twin Towers Condominium; that by authority of the Master Deed and Declaration of Restrictions and the By-Laws of the complainant, it assesses and collects from all its members regular dues for the management and maintenance of the condominium; that respondent ALS is the registered owner of Apartment Unit No. 4A, hence, a member of the complainant; that respondent Antonio Litonjua occupies said apartment Unit 4A and, by his own acts, has shown proprietary interest identical to ownership of the unit; that it was respondent Antonio Litonjua who has been dealing with complainant in all the affairs of the Twin Towers Condominium; that per complainant's records of accounts the following assessments/dues owing from the respondents remain unpaid, to wit: 1986 1987 1988 1st Quarter P17,168.00 P17,168.00 P14,616.80 2nd Quarter 11,091.20 9,017.60 3rd Quarter 11,088.00 13,092.80 4th Quarter 11,088.00 13,092.80 and P1,500.00 for the contingency fund for 1987 or for a total of P118,923.20; that complainant has repeatedly demanded from respondents payment of the aforesaid amount plus interest and penalty charges thereon in the amount of P30,808.33 and P7,793.34, respectively, but respondents refused without justifiable reason to pay the same; that respondent Antonio Litonjua, despite his unjustified refusal to pay the assessments/dues, continues to avail of benefits from the services of complainant and to use the common facilities of Twin Towers Condominium to the prejudice of complainant and its members; and, that in order to enforce a just and valid claim, complainant was constrained to litigate and engage the services of a lawyer for a fee of P15,000.00. Respondents, in their answer, denied all the material allegations in the complaint and alleged, among other things, that while the complaint alleged that complainant "assesses and collects from all its members regular dues" for the management and maintenance of Twin Towers Condominium and that respondent ALS is the registered owner of Apartment Unit No. 4A and, as such, is a member of the complainant, there is no such allegation with respect to respondent Antonio Litonjua to the effect that he is, likewise, a member of the complainant and is, thus, similarly obligated to pay regular dues; that what the complaint alleges in this regard is that respondent Antonio Litonjua occupies said Apartment Unit No. 4A and, by his own acts, has shown proprietary interest identical to ownership of the unit and that it was respondent Antonio Litonjua who has been dealing with the complainant in all the affairs of the Twin Towers Condominium; that respondent ALS, which is a mere juridical person, cannot by itself physically occupy the apartment unit or personally deal with the complainant in all affairs of the Twin Towers Condominium; that respondent ALS could only act through agents; that when a corporation acts as it must through agents, the latter do not necessarily become personally liable for the corporation's obligation; that the complaint does not state any cause of action with respect to respondent Antonio Litonjua; that with respect to complainant's claim against respondent ALS, a great portion thereof represents services not rendered which, therefore, has no factual and legal basis. Respondents, by way of compulsory counterclaim further alleged that due to ill-will, malice and other evil motives, the complainant repeatedly prevented respondent ALS, its agents and guests, the use of the parking space, swimming pool, gym, and other facilities without any justifiable reason therefor, inspite of the fact that respondent ALS, its agents and guests are entitled to the use of said facilities as a consequence of respondent ALS's membership in Twin Towers Condominium as owner of Unit 4A thereof; that on some occasions, after respondent ALS has received statements of accounts from the complainants, respondent ALS pointed out that some items in said statements of accounts should be deleted because the corresponding services have not been rendered to respondent ALS based on the equitable rule, "no work no pay"; that when respondents made remonstrances to the complainant about the matters complained of, complainant, through its hired minions, including security guards and the building superintendent, commenced a systematic campaign of harassment against respondents and respondent Antonio Litonjua's family, friends and guests, which caused the said respondents untold mental torture and serious anxiety, in addition to actual and compensatory damages of at least P50,000.00; that knowing fully well that the owner of the condominium unit is respondent ALS and not respondent Antonio Litonjua, the complainant, in its malevolent desire to damage the reputation of respondent Antonio Litonjua, maliciously included the latter's name in a list of unit owners who were supposedly in arrears with the complainant, and posted or otherwise published said list for other persons to see; that as a direct and proximate result of the posting or publication of the said list which pictured respondent Antonio Litonjua as a defaulting debtor, said respondent suffered grave humiliation and his credit standing or reputation in the business community was seriously tarnished, causing him moral damages; and, that as a consequence of the aforesaid illegal and inequitous actuations of the complainant against respondents and the filing of the instant complaint, the latter were compelled to litigate in order to protect their interests thereby incurring expenses by way of attorney's fees in the amount of P30,000.00, plus P500.00 appearance fees, and a contingent fee of ten per cent (10%) of whatever may be recovered in the case at bar. As culled from the records and pleadings submitted by the parties, the issues to be resolved are: 1. Whether or not the respondents have been denied the use of the facilities of complainant. 2. Whether or not such denial, if any, of the use of the facilities of the complainant would justify the respondents to withheld the payment of assessments/dues due the former or vice versa, that is, whether or not the complainant is justified to collect assessments/dues from the respondents; 3. Whether or not the respondents have a valid claim against the complainant thereby offsetting whatever claim the complainant has against them; 4. Whether or not complainant has a valid cause of action against respondent Antonio Litonjua; and, 5. Who should be entitled to the claim for damages and attorney's fees. Hearings were conducted where both parties presented their respective evidence. From the evidence adduced by the parties, both testimonial, as well as documentary, it is clear that respondents have been denied the use of the facilities of Twin Towers Condominium. Thus, no less than the Corporate Secretary and legal counsel of the complainant, Anecio R. Guades, testified that: "Q. Despite the fact that under the second paragraph of this letter, Marcia Martelino had instructed the guards of Twin Towers to deny the persons named herein, the use of the facilities of said corporation, you did not make any move to correct this memorandum issued by Marcia Martelino? A. There is nothing to correct Sir, because that is the right thing to do, because delinquent accounts are supposed to be denied the use of the common facilities of the condominium, although notwithstanding their delinquency, they are still covered in the payment of assessments with the proper government agencies, as well as insurance coverage, and other facilities, which could not be cut off like water. Q. So by virtue of the alleged delinquency of respondents in this case, they were denied facilities in the corporation, as glaringly shown in this memorandum? A. I am sure, they were denied Sir."(TSN, June 23, 1989, pp. 26-27) The second and third issues must be resolved in conjunction with the fourth issue. Although complainant's evidence (Exh. "C") which allegedly served as its authority to assess and collect from all its members regular dues for the management and maintenance of Twin Towers Condominium was rejected or denied admission, it cannot be gainsaid that such authority of the complainant to assess and collect dues from all its members is being recognized by the respondents as inferred from the following allegations in their answer which are considered judicial admission, to wit: "12. With respect to the complainant's claims against ALS, a great portion thereof represents services not rendered which, therefore has no factual and legal basis;" "14. On some occasions, after respondent ALS has received Statements of Accounts from the complainant, ALS pointed out that some items in said Statement of Account should be deleted because the corresponding services have not been rendered to ALS, based on the equitable rule, "no work no pay;" It follows, therefore, that complainant is justified to collect assessments/dues from its members. The following question, however, may now be asked: Are the respondents members of the complainant? There is no question that respondent ALS is a member of the complainant for being the registered owner of Apartment Unit No. 4-A of Twin Towers Condominium. However, insofar as respondent Antonio Litonjua is concerned, the records and the evidence will show that he is not a member of the complainant. Verily, complainant does not have a valid cause of action against respondent Antonio Litonjua and is, therefore, not justified to collect assessments/dues from the latter. Be that as it may, the denial of respondent ALS' right to the use of the facilities of the complainant would not justify the former to withhold the payment of assessment/dues due the latter for the same would result to inequity on the part of the one that will be affected. Besides, there is no substantial evidence or proof to quantify the amount of services that complainant had failed to render in favor of respondent ALS on account of the latter's non-use of the parking space, swimming pool, gym and other facilities of Twin Towers Condominium. Complainant, however, is justified to collect assessments/dues from respondent ALS who inferentially recognized such right of the complainant. Unfortunately, this Hearing Officer cannot determine the exact sum of the assessments/dues due the complainant because of its failure to lay down the basis for mathematical computation of the monthly or annual assessment/dues thereby making it difficult for this Hearing Officer to compute the total amount of assessment/dues due the complainant as of the rendition of this decision. As to whether or not respondent ALS has a valid claim against the complainant thereby offsetting whatever claim the latter has against the former, the answer needs some elucidation. Assuming that respondent ALS has a valid claim against the complainant for the latter's failure to deliver services to the former such as but not limited to repair of the damaged portion of Apartment Unit No. 4-A and water leakage therein as well as the deprivation of respondent ALS' right to the use of the facilities of the complainant, such obligation of the complainant cannot be offset by respondent ALS' obligation to pay assessments/dues due the complainant simply because complainant and respondent ALS are not creditor and debtor of each other. Thus, Articles 1278 and 1279 of the Civil Code of the Philippines (Civil Code, for short) provide: "ARTICLE 1278. Compensation shall take place when two persons, in their own right, are creditors and debtors of each other. ARTICLE 1279. In order that compensation may be proper, it is necessary: (1) That each one of the obligors be bound principally, and that he be at the same time a principal creditor of the other, (2) That both debts consists in a sum of money, or if the things due are consumable, they be of the same kind, and also of the same quality if the latter has been stated; (3) That the two debts be due; (4) That they be liquidated and demandable; (5) That over neither of them there be any retention or controversy, commenced by third persons and communicated in due time to the debtor." On the issue of damages, this Hearing Officer believes that the Commission, through its Hearing Officers and the Commission en banc, has the authority to hear and decide claims for damages and, if meritorious, award the same. This authority can be inferred from the provisions of Section 6, (m) of P.D. 902-A, as amended, which provides that the Commission shall possess the following power: 'To exercise such other powers as may be provided by law as well as those which may be implied from, or which are necessary or incidental to the carrying out of, the express powers granted to the Commission to achieve the objectives and purposes of this Decree." (Emphasis supplied) To adopt a different policy will perpetuate multiplicity of suits and splitting of a single cause of action and the same will put a premium on litigation as the cost thereof will be doubled as suitors will always go to two fora to obtain complete relief, i.e., to the Commission for an administrative remedy and to the courts for their claim for damages. Besides, the Supreme Court frown upon split jurisdiction and multiplicity of suits when it held that: "The law and the courts frown upon split jurisdiction and the resultant multiplicity of actions. To paraphrase the leading case of Rheem of the Phil., Inc., et al. vs. Ferrer, et al., G.R. No. L-22979, January 27, 1967. . ., to draw a tenuous jurisdiction line is to undermine stability in litigations . A piece-meal resort to one court and another gives rise to multiplicity of suits. To force the parties to shuttle from one court to another to secure full determination of their suit is a situation gravely prejudicial to the administration of justice. The time lost, the effort wasted, the anxiety augmented, additional expenses incurred, the irreparable injury to the public interest are considerations which weigh heavily against split jurisdiction ." (PCGG vs. Pea, G.R. No.L- 77663, April 12, 1988) In fact, the latest trend is towards recognizing the competence of administrative and quasi-judicial bodies to award damages. This is clearly manifested from the latest ruling/opinion of the Supreme Court in the case of Abacast Shipping and Management Agency, Inc. vs. NLRC, G.R. No. 81124-26, June 23, 1988, wherein the finding of the NLRC sustaining the decision of POEA to award damages in a case involving illegal dismissal was duly affirmed. Moreover, in the very recent case of Stronghold Insurance Co., Inc. vs. Court of Appeals, G.R. No. 84979, November 6, 1989, the Supreme Court held that: "To avoid multiplicity of suits, all incidents arising from the same controversy must be settled in the same court having jurisdiction of the main action. Thus, the application for damages must be filed in the court which took cognizance of the case, with due notice to the other parties." Going now to the question as to who should be entitled to the claim for damages, this Hearing Officer finds no substantial or sufficient evidence to warrant the award of the same insofar as actual or compensatory damages are concerned. However, with respect to moral damages, it has been clearly established that despite complainant's knowledge that respondent Antonio Litonjua is not among its members, complainant intentionally and maliciously included the name of respondent Antonio Litonjua in a list of delinquent unit owners who were allegedly in arrears with complainant, and posted or published said list on the Bulletin Board of Twin Towers Condominium. As a consequence of the posting or publication of said list which pictured respondent Antonio Litonjua as a defaulting debtor, said respondent who is a director and President of several corporations suffered grave humiliation as well as besmirched reputation. Complainant further aggravated the suffering and anxiety of respondent Antonio Litonjua by impleading him as a party respondent in this case knowing fully well that he is not among its members thereby compelling respondent Antonio Litonjua to litigate and incur expenses to protect his interest. Although the complainant has the right to collect assessments/dues due from its members, such right must not be abused and the exercise thereof must be in accordance with justice, honesty and good faith. Thus, Art. 19 of the Civil Code provides: "Every person must, in the exercise of his rights and in the performance of his duties, act with justice, give everyone his due, and observe honesty and good faith." Ergo, considering the positions of respondent Antonio Litonjua as President and director of several corporations, and the embarrassment and sufferings inflicted upon him on account of the malicious inclusion of his name in a list of delinquent unit owners who were allegedly in arrears with complainant and posting or publication of said list in the Bulletin Board of Twin Towers Condominium, as well as the malicious inclusion of respondent Antonio Litonjua as one of the respondents in this case, respondent Antonio Litonjua should be awarded a reasonable amount of moral damages. In addition to the moral damages, an exemplary or corrective damages should be imposed upon the complainant. Anent the claim for attorney's fees, respondent Antonio Litonjua testified that he had engaged the legal services of his former counsel for an agreed fee as manifested in their counterclaim, that is, P30,000.00 plus P500.00 appearance for every hearing which amount have been settled in full before said counsel left for the States. He further testified that he had signed a contract with his new lawyer, Quiason and Makalintal Law Office for an agreed fee of P250,000.00 plus attendance fee of P500.00 per hearing. cdll In the light of the foregoing, this Hearing Officer believes that it is but just and equitable that attorney's fees paid by respondent Antonio Litonjua to his lawyers who have devoted time and effort in handling the case for him should be recovered. WHEREFORE, premises considered, judgment is hereby rendered as follows: 1. Ordering respondent ALS to pay the legal assessments/dues due the complainant within thirty (30)-day from finally of this Decision; and 2. Ordering the complainant to pay respondent Antonio Litonjua the sum of THREE HUNDRED THOUSAND 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. SO ORDERED. (SGD.) ROLANDO C. MALABONGA Hearing Officer