G.R. No. 181416 ; November 11, 2013
Medical Plaza Makati Condominium Corporation, Petitioner, vs. Robert H. Cullen, Respondent.

FACTS

Respondent Robert H. Cullen purchased a condominium unit from Meridien Land Holding, Inc. (MLHI) and subsequently served as President and Director of petitioner Medical Plaza Makati Condominium Corporation (MPMCC). In 2002, MPMCC demanded payment from Cullen for alleged unpaid association dues amounting to ₱145,567.42, claiming the obligation was a carry-over from the previous owner, MLHI. Consequently, MPMCC prevented Cullen from voting and being voted for in the condominium corporation’s election. Cullen disputed the delinquency, asserting he had religiously paid his dues and clarifying with MLHI, which claimed the obligation had been settled. Despite Cullen’s written demand for an explanation, MPMCC failed to respond, prompting Cullen to file a Complaint for Damages against MPMCC and MLHI.
The Regional Trial Court (RTC) dismissed the complaint for failure to state a cause of action, ruling that Cullen’s remedy was to first avail of intra-corporate remedies under the Condominium Act. The Court of Appeals (CA) reversed the RTC, holding that the complaint sufficiently alleged a cause of action for damages arising from MPMCC’s arbitrary and malicious acts in branding Cullen delinquent without basis and depriving him of his membership rights. MPMCC elevated the case to the Supreme Court via a petition for review on certiorari.

ISSUE

Whether the Court of Appeals erred in ruling that the complaint sufficiently stated a cause of action for damages.

RULING

The Supreme Court denied the petition and affirmed the CA decision. The Court held that the complaint adequately stated a cause of action. A cause of action exists when the complaint alleges a legal right of the plaintiff, a correlative obligation of the defendant, and an act or omission by the defendant in violation of that right. Cullen’s complaint clearly alleged that MPMCC, without factual basis and despite knowledge of a possible settlement, maliciously declared him delinquent, thereby unlawfully preventing him from exercising his rights to vote and be voted for, which caused him moral damages, social humiliation, and besmirched reputation. These allegations, if hypothetically admitted, constitute a valid cause of action for damages arising from abuse of rights or tort.
The Court rejected MPMCC’s argument that Cullen should have first exhausted intra-corporate remedies. The alleged acts of MPMCC were not mere corporate disputes but tortious acts causing personal injury, which are independently actionable. The claim for damages based on alleged malicious and arbitrary conduct is separate from any claim for unpaid dues. The ruling emphasizes that condominium corporations, while granted powers to collect dues, must exercise such powers in good faith and cannot arbitrarily strip members of their fundamental rights without due process. The case was remanded to the RTC for further proceedings.