GR 211780; (November, 2018) (Digest)
G.R. No. 211780 , November 21, 2018
CEZAR YATCO REAL ESTATE SERVICES, INC., GRD PROPERTY RESOURCES, INC., GAMALIEL PASCUAL, JR., MA. LOURDES LIMJAP PASCUAL, AND AURORA PIJUAN, PETITIONERS, VS. BEL-AIR VILLAGE ASSOCIATION, INC., REPRESENTED BY ITS PRESIDENT ANTONIO GUERRERO, AND THE REGISTER OF DEEDS, RESPONDENTS.
FACTS
Makati Development Corporation developed Bel-Air Village, imposing Deed Restrictions on lot sales with a 50-year term from January 15, 1957, to January 15, 2007. Bel-Air Village Association, Inc. (BAVA), the homeowners’ association, sought to extend this term. In 2006, BAVA’s board proposed an amendment to extend the Deed Restrictions’ effectivity to August 23, 2032, contingent on a concurrent extension of the association’s corporate life. This was ratified in a December 2006 special membership meeting where 72% of the votes cast favored the extension.
Petitioners, lot owners who voted against the extension, filed a complaint with the Housing and Land Use Regulatory Board (HLURB). They argued the original 50-year term was fixed and could not be extended, the ratification meeting lacked a quorum due to invalid proxies, and that they had resigned from BAVA. The HLURB ruled in favor of the petitioners, declaring the extension null and void. This decision was reversed by the Office of the President, a ruling subsequently affirmed by the Court of Appeals.
ISSUE
Whether the Deed Restrictions’ term of effectivity could be validly extended by amendment through a vote of the association’s members.
RULING
Yes, the Supreme Court upheld the validity of the extension. The Court applied fundamental principles of contract interpretation, stating that when the terms of a contract are clear and unambiguous, they must be enforced as written. The Deed Restrictions themselves contained a provision allowing for amendment. Specifically, the instrument stated that the restrictions could be “amended, modified, released or extinguished” by the written agreement of the lot owners representing a majority of the affected area. The 50-year period was not an immutable expiration date but a stipulation within the amendable body of restrictions.
The legal logic is straightforward: the power to amend necessarily includes the power to extend the instrument’s operative period, as an extension is a form of amendment to its temporal stipulation. The amendment clause did not exclude the term from its scope. Therefore, following the expressed will of the contracting parties as embodied in the Deed Restrictions, the extension was validly effected through the prescribed procedure—a vote of the members representing the majority. The Court found the ratification meeting had a proper quorum, noting the association’s by-laws did not require proxies to be notarized. Consequently, the Court denied the petition and affirmed the appellate court’s decision.