Florentino C. Ozaeta vs. Virra Mall Greenhills Association, Inc.

[SEC-SICD * CASE NO. 3397. August 1, 1990.] FLORENTINO C. OZAETA , petitioner , vs . VIRRA MALL GREENHILLS ASSOCIATION, INC. , respondent . D E C I S I O N This is a petition for (1) injunction with prayer for the issuance of: (a) a writ of preliminary mandatory injunction directing the respondent to immediately restore or reconnect the cut-off electric power/facility in petitioners' unit No. A-9 at the Virra Mall Shopping Center at Greenhills, San Juan, Metro Manila; and, (b) a writ of preliminary prohibitory injunction enjoining the respondent at any persons acting under it from withholding/stopping water and other facilities at and from padlocking said unit No. A-9, and from doing any act that will tend to harass and/or undermine the conduct of the petitioner's business at the said unit No. A-9; and, (2) damages. llcd Petitioner alleged, inter alia, that respondent is an association of owners/buyers-assignees of units at and within Virra Mall Shopping Center in Greenhills, San Juan, Metro Manila; that petitioner is a buyer-assignee of unit No. A-9 therein and a member of respondent; that Article XIII of the House Rules and Regulations of the respondent provides for a centralized conditioning system to all owners/buyers-assignees of the Virra Mall Shopping Center, that pursuant to the pertinent provisions of the By-Laws and House Rules and Regulations of the respondent, the latter imposes and collects monthly from its members association dues, Meralco dues and assessments based on the floor area of the members' units; that petitioner occupied his said unit sometime in 1982 and since then, he has been paying to the respondent all dues and assessments that the latter has been imposing and collecting from its members; that from the time the petitioner occupied his said unit, the central air conditioning system installed therein, although working and/or functioning and is able to service all the other units therein is not working and/or functioning and is unable to service the said unit occupied or bought by the petitioner; that from the time the petitioner occupied his said unit, he has been complaining to and demanding from the respondent that it do something about the said failure of the central air conditioning system to work, function and/or service his said unit but notwithstanding said demand, respondent failed and refused to do something about it: that because of the long failure of the central air conditioning system to work, function or service his said unit, despite the fact that petitioner has been paying all his dues and assessments for non-existent service, petitioner wrote the respondent a letter requesting the latter that it make a separate and individual costing of the electrical consumption for the centralized air conditioning of each unit and of the common areas; that in a letter dated February 13, 1986 respondent had informed the petitioner that it has started sub-metering the units and that it will study the request of the petitioner on the matter of separate and individual costing of the electrical consumption for the centralized air conditioner and of the common areas; that respondent failed to act on the said request; that petitioner reiterated said request but the same proved futile; that due to respondent's failure to act on the aforesaid request and demand, petitioner began to withhold payments of the monthly dues and assessments being imposed and collected by the respondent; that in a letter dated April 17, 1986, respondent informed the petitioner that it cannot do anything about the failure of the central air conditioning system to work, function or service the petitioner's unit but it will not, however, stop collecting the association dues and assessments; that in view of the said information given by the respondent, petitioner continued to withhold payments of the monthly dues being imposed and collected by the respondent; that in a letter dated September 23, 1986, respondent threatened the petitioner that it will withhold or stop electrical and water facilities and padlock petitioner's unit if the latter would still not pay his alleged unpaid monthly dues within three (3) days from receipt of the said letter by the petitioner; that in reply thereto, petitioner informed the respondent in a letter dated September 29, 1986 that he is willing to pay all his alleged unpaid monthly dues if the respondent can find a solution, even just a temporary one, to the said problem; that respondent continues to threaten the petitioner that it will impose the aforementioned sanction if the | petitioner will not pay his alleged unpaid monthly dues; that in the morning of October 28, 1986, respondent actually made good its threats by cutting off the electrical facilities of herein petitioner in his said unit and restored it only at around 12:00 o'clock noon of the same day; that by reason and as a result of the cutting off of the electrical facilities of the petitioner, the latter filed before the Regional Trial Court of Quezon City a complaint for "Injunction and Damages with Prayer for Writ of Preliminary Injunction" against the respondent; that respondent filed a motion to dismiss on the ground that it is this Commission that has jurisdiction over the nature of the action or suit but the same was denied; that respondent went to the Court of Appeals on a petition for Certiorari and Prohibition raising the same issue of jurisdiction; that on September 30, 1987, the Court of Appeals granted the said petition and ruled that it is this Commission that has jurisdiction over the nature of the action or suit; that immediately upon receipt of the said decision of the Court of Appeals, respondent cut off the electric power in petitioner's unit; that petitioner filed a "Motion for Reconsideration with Urgent Prayer for the Issuance of an Order Directing Petitioner (herein respondent) to Restore Electric Power to Private Respondent's (herein Petitioner) Unit and/or Restraining Order"; that on October 15, 1987, the Court of Appeals issued a resolution, the dispositive portion of which reads as follows: "WHEREFORE, and acting on the prayer that a restraining order be issued, in the meantime, and to maintain the status quo so that the principal relief sought will not become moot and academic, respondents and any and all persons acting in their behalf, are hereby restrained from enforcing or directing the enforcement of the questioned orders, subject of the petition, until otherwise ordered by this Court and resolution of the motion for reconsideration." That because of the failure or refusal of the respondent to reconnect the petitioner's cut-off electric power despite receipt of the aforementioned resolution of the Court of Appeals, petitioner filed a "Motion to Declare Petitioner (herein respondent) and its General Manager and Administrative Officer, Noel T. Del Castillo and Celia P. Ramos in Contempt of Court"; that despite the filing of the said contempt charge, respondent still failed or refused to reconnect petitioner's cut-off electric power, thus constraining the petitioner to file on November 18, 1987 an "Urgent Ex-Parte Motion for the Issuance of Resolution Directing the Reconnection of Cut-off Electric Power and/or Directing this Honorable Court's sheriff to Implement Reconnection of Cut-Off Electric Power"; that on November 20, 1987, the Court of Appeals issued a Resolution ordering the respondent to reconnect petitioner's cut-off electric power; that it was only then that respondent restored petitioner's electric power in his said unit; that the Court of Appeals denied the petitioner's motion for reconsideration in its Resolution dated February 24, 1988; that on March 23, 1988, petitioner filed before the Supreme Court a Petition for Review on Certiorari of the said Decision and Resolution of the Court of Appeals; that on the same day and without giving the Supreme Court a chance to act upon the said petition, respondent again cut-off the electric power in the petitioner's unit; that on June 8, 1988, the Supreme Court, acting on the said Petition for Review, issued the following resolution: "G.R. No. 82408 (Florentino C. Ozaeta vs. Virra Mall Greenhills Association, Inc., et al.,). Considering the allegations, issued and arguments adduced in the petition for review on certiorari, as well as respondents' comment thereon, the Court Resolved to DENY the petition for failure of the petitioner to sufficiently show that the respondent court had committed any reversible error in its questioned judgment. The urgent motion of petitioner to resolve petitioner's motion for the issuance of a writ of preliminary mandatory injunction or an order directing private respondent to re-connect electric power which was cut-off, is NOTED." That as a result of the respondent's act of cutting off the petitioner's electrical facilities, the latter's customers shied away from his establishment thereby decreasing his sales/profit to his damage and prejudice; that respondent has threatened the petitioner that it will withhold/stop water facilities and padlock, without need of a formal advice, the petitioner's unit. Respondent, in its answer, denied all the material allegations in the amended petition, and alleged, inter alia, that petitioner has no cause of action against the former; that petitioner first occupied his unit sometime in 1981, as lessee of Virra Realty Development Corporation (VRDC, for short), the developer of the shopping complex, which installed the air conditioning system therein; that at this time, the centralized air conditioning facility was either not adequately servicing or was not servicing petitioner's unit; that petitioner bought his unit from VRDC; that sometime in 1983, VRDC served upon petitioner a notice of cancellation of their Contract to Sell and To Assign Leasehold Right for failure to pay the stipulated monthly amortizations; that petitioner had continued with his payments, until he was able to finally pay VRDC for the unit, with full knowledge of any supposed air conditioning problem; that any air conditioning problem in petitioner's unit has long been known to him and his acts of buying his unit after initially leasing it from VRDC and paying off the amortizations after his contract for the purchase of his unit has been cancelled are indicative of his acceptance that the "problem" he now complains of cannot be solved; that petitioner's air conditioning problem, if any, consists of installation related or a structural defect over which respondent has no control; that petitioner's claim had been waived, abandoned or otherwise extinguished; that respondent's House Rules is a contract between its members; that in one of their covenants, the members, including petitioner, waived any right of action or claim for damages against respondent for any failure of the centralized air conditioning facility; and, that only the petitioner, among all the members of the respondents seeks to be excused from this waiver. On October 10, 1988, an Order granting the petitioner's prayer for injunctive reliefs was issued, the dispositive portion of which reads: "WHEREFORE, let the writ of preliminary prohibitory and mandatory injunction be issued, effective upon filing of a bond in the sum of TWENTY FIVE THOUSAND PESOS (P25,000.00) to answer for damages, if any, that respondent may suffer should the Commission later on decide that the petitioner is not entitled thereto, enjoining the respondent or any persons acting under it from withholding/stopping water and other facilities at and from padlocking said unit No. A-9, and from doing any act that will tend to harass and/or undermine the conduct of the petitioner's business at the said unit No. A-9 and directing the respondent restore or reconnect, upon receipt hereof, the cut-off electric power/facility in petitioner's Unit No. A-9 at the Virra Mall Shopping Center at Greenhills, San Juan, Metro Manila. "In this connection, the respondent is hereby directed to be ready with its computation of the unpaid monthly dues and assessments of petitioner, except for interest and electricity accruing to the air conditioning of his unit which are still in dispute, . . . ". At the preliminary conference of this case held on July 10, 1989, the parties have agreed to resolve the following issues, to wit: 1. Whether or not the petitioner is entitled to the injunctive reliefs prayed for in his amended petition; 2. Whether or not the respondent may be compelled under its House Rules and Regulations to provide air conditioning facilities in petitioner's unit; and, 3. Whether or not petitioner is exempted from the payment of the disputed assessments on his unit. Another issue posed before this Hearing Officer is the matter of damages and attorney's fees. From the evidence on hand, it was established that petitioner who is doing business under the trade name and style "Glasik" had first occupied his Unit No. A-9 as lessee of VRDC in 1981. Originally, there was no air conditioning service to his unit but he complained to VRDC and he got the service from VRDC although it was still inadequate. Petitioner then bought said unit from VRDC and has thus become a member of the respondent. On the other hand, respondent is a non-stock, non-profit organization of unit owners/buyers-assignees at the Virra Mall Shopping Complex of which petitioner is a member. Respondent's modus operandi is to maintain the common areas and facilities at the Virra Mall Shopping Complex charging the expenses therefor to its members proportionately to the area of their holdings within the shopping complex. In order to determine the merits of petitioner's prayer for injunctive reliefs, it becomes inescapably imperative to examine the provisions of respondent's Rules and Regulations that govern the rights and obligations of the respondent and its members, including the petitioner. The pertinent provisions of the respondent's Rules and Regulations are as follows: "Payments made after the billable month will be charged 5% interest per month thereon until full payment of accounts, as a form of penalty for delayed payments. The Board of Directors may change the above interest rates depending on what is prevailing in the market." "Default by any tenant in the payment of dues and other assessments which continues and remains unpaid for 30 days after billable month will automatically authorize the VMGA to withhold/stop electrical and water facilities, and padlock the unit, without need for formal advice until all unpaid dues and other assessments are updated." (House Rules No. IV, G, p. 10; Exh. "19") "A centralized airconditioning system shall be provided to all tenants. Request for separate aircon facilities (package type) apart from the centralized system may be entertained provided that certain pre-requisites, among others, are first met: 1) extra charges for additional electrical usage or separate air conditioning unit. 2) electrical installation to be duly approved and supervised by VMGA, and at owner's account. 3) a separate meter to measure monthly electrical usage of additional aircon unit must be provided by owner. "Installation of aircon units without prior notice, approval and supervision of the VMGA shall authorize the VMGA to resort to other legal measures to protect its interest such as, but not limited to, withholding, stopping all electrical, water facilities and padlocking." (House Rules No. XIII, pp. 16-17; Exh. "H-1") 'The VMGA shall not be held liable or responsible for damages or for reduction of association dues arising from any temporary, prolonged, total, partial, or permanent breakdown, failure or non-performance of the airconditioning system, electrical circuits, plumbing facilities and/or any other equipment machine or part of the building." (House Rules No. XXXII, p. 32) The fact that respondent had cut-off the electric power facility in petitioner's Unit No. A-9 by reason of the latter's refusal to update the payment of his monthly dues and other assessments is not in dispute. Hence, as gleaned from the respondents Rules and Regulations, it would appear that although petitioner is entitled to water and other facilities and to have his electric power/facility reconnected, respondent is not totally amiss in threatening the petitioner to withhold/stop water and other facilities in the latter's unit and in actually cutting-off the electric power/facility therein considering that the latter is in arrears in the payment of his monthly dues and other assessments. However, this Hearing Officer feels that it would not be too easy for the petitioner to settle his accounts immediately considering that the same has accumulated to a bigger amount. Anent the second issue, although it is provided under the House Rules of the respondent that a centralized air conditioning system shall be provided to all tenants, it is likewise provided under the same House Rules that respondent shall not be held liable or responsible for damages or for reduction of association dues arising from any temporary, prolonged, total, partial, or permanent breakdown, failure or non-performance of the air conditioning system, electrical circuits, plumbing facilities and/or any other equipment, machine or part of the building where the petitioner's unit is located. Thus, respondent could not be compelled to provide airconditioning facilities in petitioner's unit. However, petitioner is not without any remedy considering that he could request for separate aircon facilities provided the above prescribed conditions are met. On the issue of whether the petitioner is exempted from the payment of the disputed assessments on his unit particularly the pro-rated cost of air conditioning applied therein, as well as the interests charged against the petitioner for late payment of monthly association dues and other assessments, the answer is in the negative. As stated above, the respondent cannot, under its House Rules, be held liable or responsible for damages or for reduction of association dues arising from any temporary, prolonged, total, partial, or permanent breakdown, failure or non-performance of the airconditioning system, electrical circuits, plumbing facilities and/or any other equipment, machine or part of the building where the petitioner's unit is located. With respect to interests charged against the petitioner, equity dictates that the same should be collected from the petitioner inasmuch as he was benefited for the use of the amount which would have earned income for the respondent had the same been paid on time. On the contrary, respondent has been deprived of the use of said amount. With respect to both parties' claim for damages, the same could not be granted in view of the recent ruling of the Court of Appeals in the case Augusto Padilla et al. vs. Securities and Exchange Commission, et al., CA-G.R. SP No. 18630, promulgated on February 1, 1990, wherein it was ruled: "We are aware of the fact that the Securities and Exchange Commission has adopted the practice of awarding actual and other kinds of damages without protest or objection on the part of litigants. However, as explained above, we believe such practice to be unauthorized and illegal." Besides, both parties failed to present any evidence in support thereof. The same holds true with respect to their claims for attorney's fees. WHEREFORE, premises considered, judgment is hereby rendered as follows: 1. Directing the petitioner to update and pay his monthly association dues and other assessments to the respondent within thirty (30) days from finality of this Decision; 2. Lifting the writ of preliminary prohibitory and mandatory injunction issued on November 4, 1988 after thirty (30) days from finality of this Decision; 3. Dismissing the counterclaim. No pronouncement as to costs. SO ORDERED. (SGD.) ROLANDO C. MALABONG Hearing Officer