GR 86774; (August, 1991) (Digest)
G.R. No. 86774 ; August 21, 1991
ENEDINA PRESLEY, petitioner, vs. BEL-AIR VILLAGE ASSOCIATION, INC., and THE HON. COURT OF APPEALS, respondents.
FACTS
Petitioner Enedina Presley operated a “Hot Pan de Sal Store” on a leased property at 102 Jupiter Street, Bel-Air Village, Makati. The registered owners of the property, the Almendrases, held a title with annotated Deed Restrictions stipulating that the lot “must be used only for residential purpose.” As a subdivision lot owner, they were members of respondent Bel-Air Village Association, Inc. (BAVA). BAVA filed a complaint for specific performance and damages against the Almendrases and Presley for violating the Deed Restrictions and for non-payment of association dues.
The trial court and the Court of Appeals ruled in favor of BAVA. The courts permanently enjoined the commercial use of the property and ordered the defendants to pay unpaid association dues and attorney’s fees. Presley elevated the case to the Supreme Court, arguing that the ruling was contrary to the consolidated Sangalang decision promulgated by the Court en banc on December 22, 1988.
ISSUE
Whether the Deed Restrictions annotated on the title, which limit the use of the property to residential purposes, can be enforced to prohibit the operation of a commercial store on Jupiter Street.
RULING
The Supreme Court granted the petition and reversed the Court of Appeals. The legal logic is anchored on the supremacy of police power over contractual obligations. While the Deed Restrictions are valid contractual stipulations binding on the lot owners, they are subject to the State’s legitimate exercise of police power for the common good.
Crucially, the Metro Manila Commission, through Ordinance No. 81-01, had reclassified Jupiter Street into a “high density commercial (C-3) zone.” This valid governmental act, pursuant to police power, effectively impaired the enforceability of the purely residential restriction on lots fronting Jupiter Street. The Court, following its precedent in the Sangalang consolidated cases, held that the contractual restriction cannot be raised as a deterrent to this valid police power measure designed to promote public interest.
The Court noted that Jupiter Street had already become highly commercialized, with numerous commercial establishments operating in the area. It would be unreasonable to single out Presley’s pan de sal store for prohibition. Consequently, BAVA had no cause of action to enforce the residential restriction. The claims for association dues and attorney’s fees were also rendered moot and without basis, as Presley had subsequently purchased the property and settled the dues.