Leviste v. Legaspi Towers
NEW DOCTRINEFacts
The Antecedents: Legaspi Towers 200, Inc. (Legaspi Towers) is a condominium building. Leviste Management System, Inc. (LEMANS) purchased Concession 3 on the roof deck. LEMANS then constructed another unit, Concession 4, on the roof deck of Concession 3, securing a building permit. Legaspi Towers notified LEMANS that the construction was illegal and forbade the entry of construction materials. Legaspi Towers also requested the cancellation of LEMANS' building permit, which was denied by the Municipal Building Official. Procedural History: LEMANS filed a complaint for mandatory injunction to complete construction, which was granted by the RTC. Legaspi Towers filed a third-party complaint against the Municipal Building Official and the Secretary of Public Works and Highways to nullify the building permit. The RTC found Article 448 of the Civil Code and the ruling in Depra v. Dumlao applicable, ordering Legaspi Towers to appropriate Concession 4 or lease it to LEMANS. Both parties appealed. The Court of Appeals affirmed the RTC decision, dismissing LEMANS' appeal on a procedural ground and ruling on Legaspi Towers' appeal that Concession 4, though a nuisance, could not be demolished as LEMANS was declared a builder in good faith. Both parties filed petitions for review with the Supreme Court. The Petition: LEMANS sought to have the proper valuation of Concession 4 determined for potential purchase. Legaspi Towers sought the demolition of Concession 4 as an illegal construction and argued the building permit was invalid.
Issue(s)
Whether the provisions of Article 448 of the Civil Code and the ruling in Depra v. Dumlao are applicable to the case. Whether Legaspi Towers has the right to demolish Concession 4. Whether the building permit for Concession 4 was validly issued. Whether LEMANS is entitled to have the proper valuation of Concession 4 determined for potential purchase by Legaspi Towers.
Ruling
The Supreme Court granted the petition of Legaspi Towers and denied the petition of LEMANS. It reversed and set aside the decisions of the Court of Appeals and the RTC. LEMANS was ordered to remove Concession 4 at its own expense.
Ratio Decidendi
On the applicability of Article 448 of the Civil Code and the ruling in Depra v. Dumlao: The Court held that Article 448 of the Civil Code and the ruling in Depra v. Dumlao are inapplicable to the present case. The Court explained that Article 448 presupposes that the owner of the land and the builder are distinct persons not bound by specific legislation or contract. In condominium projects governed by Republic Act No. 4726 (The Condominium Act), the unit owners, including LEMANS, are considered members or stockholders of the condominium corporation, implying a form of co-ownership. This relationship is governed by the special law (Condominium Act) and contractual agreements like the Master Deed and By-Laws, which prevail over general provisions of the Civil Code. The Court emphasized that the builder is already in a co-ownership with other unit owners, making the application of Article 448, which aims to prevent forced co-ownership, inappropriate. On Legaspi Towers' right to demolish Concession 4: The Court ruled that Legaspi Towers has the right to demolish Concession 4. The construction of Concession 4 contravened the Master Deed, which specified the building's structure, and the By-Laws, which required member approval for extraordinary improvements. LEMANS failed to secure the necessary consent from registered owners or approval from the members in a meeting. The Court found that an internal arrangement with the then-president of Legaspi Towers could not bind the corporation. Therefore, Concession 4 was an illegal construction, and Legaspi Towers, as the owner of the common areas, could seek its abatement. On the validity of the building permit for Concession 4: The Court stated that the validity of the building permit for Concession 4 had no bearing on Legaspi Towers' right to seek the abatement of Concession 4. While the Court of Appeals affirmed the validity of the permit, the Supreme Court focused on the violation of the Master Deed and By-Laws, which superseded the permit's validity in determining the right to demolish the illegal structure. On LEMANS' claim for valuation of Concession 4: Since the Court found Article 448 inapplicable and Concession 4 to be an illegal construction violating the Master Deed and By-Laws, LEMANS' claim for valuation under the Depra doctrine was denied. The Court concluded that applying Article 448 would lead to an inequitable result where the owner would be forced to appropriate an illegal structure or allow its continuance, which the Court cannot countenance.
Main Doctrine
The provisions of the Civil Code, particularly Article 448 on builders in good faith, do not apply to cases governed by the Condominium Act, where the owner of the land and the builder are already bound by specific legislation and contract, such as the Master Deed and By-Laws of a condominium corporation. In such cases, the rights and obligations are determined by the Condominium Act and the condominium's governing documents.