G.R. No.

83358 August 2, 1989

CARIDAY INVESTMENT CORPORATION, petitioner,

vs.
COURT OF APPEALS & FORBES PARK ASSOCIATION, INC., respondents.

F.B. Santiago, Calabio, Nalus & Associates for petitioner.

Siguion Reyna, Montecillo & Ongsiako for private respondent.

GRI;O-AQUINO, J.:

The central issue in this case is the proper interpretation of a provision in the Deed of Restrictions on
the title of a lot in the Forbes Park Subdivision which binds the owner to use his lot "for residential
purposes and not more than one single family residential building will be constructed thereon" (p. 35,
Rollo) a restriction that generally encumbers lots in the so-called "plush" residential subdivisions.

Forbes Park Association (hereinafter referred to as "FPA") is a non-profit and non-stock corporation
organized for the purpose of promoting and safeguarding the interests of the residents and lot
owners in that subdivision who automatically become members of the association and are bound by
its rules and regulations stipulated in the Deed of Restrictions annotated on the back of their
certificates of title.

Cariday Investment Corporation (CARIDAY for brevity) is the owner of a residential building in the
Forbes Park Subdivision, hence, a member of the FPA. On the back of its certificate of title, TCT No.
S-91329 (Annex A, p. 56, Rollo), is annotated a "Deed of Restrictions" whose pertinent provisions
are as follows:

RESTRICTIONS

1. The Property is subject to an easement of two meters within the lot and adjacent
to the rear and two sides thereof for the purpose of drainage, sewerage water and
other public facilities as may be necessary and desirable.

2. Subject to such amendments and additional restrictions, res reservations,

servitudes as the Forbes Park Association may from time to time adopt and prescribe
the land described in this certificate of title is for a period of fifty (60) years from
January 1, 1949 subject to the restrictions enumerated in Annex A of the Deed of
Sale executed by Ayala Securities Corporation in favor of the registered owner
among which are the following:

Lots may be only used for residential purposes and not more than one single family
residential building will be constructed thereon except that separate servant's
quarters may be built.

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 ... (Emphasis supplied; p. 35, Rollo.)

The same restrictions are found in Section l(b), Article IV of the association's rules and regulations
(pp. 170-185, Rollo) and are hereunder quoted:

ART. VI. BUILDING RULES AND REGULATIONS

Sec. 1. LOTS

xxx xxx xxx

b. One residential building per lot. Lots may be used only for residential purposes,
and not more than one single-family residential building will be constructed on one
lot, except that separate garage and servants' quarters and bathhouses for
swimming pools may be built. Should any member owning two (2) or more lots
submit a plan of a residence astride two (2) or more lots owned by him, his property
will be considered as one parcel for the purpose of application of the setback line
restriction so that this limitation shall be considered applicable only to the exterior
boundaries of the property as though the lots were consolidated into one parcel.
However, if later on his house is destroyed or removed then the 2-meter set back the
restriction shall be considered as restored to the boundaries of each lot of the
subdivision plan.

c. Use and occupancy of a house. The use and occupancy of houses and other
improvements inside Forbes Park shall be exclusively for residence only of the
owners and bona fide residents, their families, house guests, staff and domestics but
never for commercial, business or office purposes, such as, but not limited to, hotels,
restaurants, resorts, motels, condominiums, stores, clubs, schools, studios or any
kind of office whatsoever.

In case of violation hereof, the Board of Governors shall, after at least 10 days
previous notice in writing to the member resident concerned, order the disconnection
of the water service supplied to the latter by the Association's deep-well pumps;
Provided, however, that reconnection thereof shall only be made upon satisfactory
showing that violation of this rule no longer exists and that the requisite actual cost of
reconnection as estimated by the Association is duly deposited before such
reconnection is made. (Emphasis supplied; pp. 36-37, Rollo.)

In June 1986, Cariday, with notice to the FPA, "repaired" its building (p. 42, Rollo). After inspection of
the "repairs," the FPA's retained civil engineer reported that "additions or deletions were made in the
existing residence." A second inspection in May 1987 disclosed more violations of the restrictions.
He observed that the building "can be used by more than one family." (p. 78, Rollo.)

Cariday admitted that its building has the exterior appearance of a single family residence but it is
designed inside to allow occupancy by two families.

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The FPA demanded that corrections be made in the structure to conform with the restrictions.

Without making the corrections, Cariday, on July 1, 1987, leased one portion of the house to an
Englishman, James Duvivier who occupied the same on July 5, 1987. On August 1, 1987, Cariday
leased the other half of the building to Procter and Gamble for the use of one of its American
executives, Robert Haden, who notified the FPA that he would move in on September 2, 1987 (p. 74,
Rollo).
lwph1.t

In a letter dated September 7, 1987, Cariday also notified the FPA that Haden would be moving in
with his furniture and household appliances and requested that the necessary clearance be issued
for presentation to the subdivision's security guards (p. 67, Rollo).

When Haden tried to move in on September 18,1987, he was stopped by the security guards. In a
letter dated September 19, 1987 and received by Cariday on September 21, 1987, the FPA advised
Cariday that it would not allow Cariday to lease its house to more than one tenant as this would
violate the rule regarding "one single-family residential restriction" (p. 68, Rollo). Because of the
alleged "building violations," the FPA threatened to disconnect the water service (which it supplies to
the residents from its deep-well pumps) to Cariday's property (p. 68, Rollo).

On September 28, 1987, Cariday filed in the Regional Trial Court of Makati, a complaint (p. 42,
Rollo) for injunction and damages (Civil Case No. 17933). It prayed that, pending the trial of the
case, a writ of preliminary injunction be issued ordering the FPA to desist from cutting-off the water
supply to its building, or to reconnect the service if it has been cut off, and, further, to desist from
preventing its tenants' ingress into and egress from its aforementioned building. Cariday alleged that
if the FPA was not restrained, Cariday would not only lose its tenants but their health would be
seriously endangered. As a matter of fact, on October 6, 1987, Procter and Gamble rescinded its
lease contract with Cariday (p. 69, Rollo).

The FPA answered Cariday's complaint and opposed the application for preliminary injunction. It
alleged that under its rules and regulations, it is empowered to disconnect water services whenever
there is a deviation from previously approved plans and specifications of buildings and for violation
of the "single-family residential building restriction" (p. 94, Rollo).

On October 21, 1987, the trial court issued a writ of preliminary injunction upon Cariday's filing of a
P50,000 bond (pp. 105-106, Rollo). The FPA filed a motion for reconsideration which was denied by
the court (p. 119, Rollo). In due time, it sought relief in the Court of Appeals (CA-G.R. SP No. 13965)
alleging grave abuse of discretion on the part of the trial court in issuing the writ of preliminary
injunction.

The Court of Appeals, after hearing the parties, annulled the writ of injunction. It held:

... The construction of a residential house as a single family dwelling unit defines its
use by a single family, in the same way that its construction as a duplex house
defines its use by two families. Indeed, by prohibiting the use of houses within the
subdivision as hotels, motels, condominiums and the like, sec. 1(c) makes clear that
the requirement in sec. l(b), that only one single-family residential building may be

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 constructed on a lot, is intended to limit its use and occupancy by one family. The
use of a house as hotel, motel or condominium violates the concept of "one single-
family" residential house per lot, as much as the construction of more than one
building on one lot.

... The "one single-family" residential house per lot rule is violated not only when one
house is used by more than one family but also when several buildings, each one of
which is used by one or more families, are built on one lot. (pp. 37 38, Rollo.)

The Court of Appeals upheld the right of the FPA to prohibit the entry of additional tenants into
Cariday's building and to disconnect the water service for violation of the restrictions:

... With respect to the refusal of the FPA to allow the entry of additional tenant into
the building in question, suffice it to say that its authority is clearly provided for in Art.
VI, Sec. 14 which provides as follows:

Sec. 14. MOVING IN OR MOVING OUT OF FORBES PARK Anyone who wishes to
move into any residential home of the village must, before doing so, first obtain the
necessary written clearance from the office of the Association for presentation to the
security guards, and any occupant of a house within the village and who wishes to
move out of the premises he or she occupies should give a written notification to the
Association.

We therefore hold that Cariday Investment is without any right to let its premises to
more than one tenant and that in threatening to disconnect the water service and in
preventing more than one tenant to move into the premises to enforce its rules, FPA
acted within powers under the rules that are binding on its members. Consequently
Cariday Investment is not entitled to an injunction. (p. 38, Rollo.)

In its petition for review of the Appellate Court's decision, Cariday avers that while it is indeed bound
by the restriction to construct only "one residential building" on its lot, "nowhere in the rules and
regulations is there a categorical prohibition and/ or restriction preventing it from exercising its rights
to let its residential building to two or more tenants" (p.19, Rollo).

We find the petitioner's interpretation of the restriction unacceptable. The restriction clearly defines
not only the type and number of structures (one residential building) that may be built on each lot,
but also the number of families (a single family) that may use it as a residence. Indeed, the
restriction of "one ... residential building" per lot would have been sufficient, without incorporating the
additional restriction of "a single family," (p. 35, Rollo) if the purpose, as petitioner contends, were
only to limit the type of building but not its use or occupancy.

We are persuaded that the purpose of the restriction is to avoid overcrowding both in the houses and
in the subdivision which would result in pressure upon the common facilities such as water, power
and telephone connections, accelerate the deterioration of the roads, and create problems of
sanitation and security in the subdivision. As correctly perceived by the petitioner itself, the

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restrictions are "for aesthetic consideration and for the preservation of the peace, beauty, tranquility
and serenity of living at Forbes Park" (p. 306, Rollo).lwph1.t

Logic dictates that as the building rules and regulations of the FPA expressly prohibit the
construction of buildings for multiple occupancy, such as hotels, motels, and condominiums, that
prohibition may not be circumvented by building a house with the external appearance of a single
family dwelling but whose interior is designed for multiple occupancy. It is an elementary rule of
reason that what may not be done directly, may not also be done indirectly.

However, recognizing Filipino custom and the cohesive nature of our family ties, the concept of a
single-family dwelling may embrace the extended family which includes married children who
continue to be sheltered in the family home until they are financially able to establish homes of their
own. But leasing one's house in Forbes Park, as the petitioner has done, to two or more tenant
families who are not related to the owner, nor to each other, would be impermissible under the one
single-family restriction recorded on the title of the property.

WHEREFORE, finding no merit in the petition for review, We resolved to deny it, with costs against
the petitioner.

SO ORDERED.

Fernan, C.J., Melencio-Herrera, Feliciano, Bidin, Sarmiento, Cortes and Regalado, JJ., concur.

Cruz, Paras, Padilla, JJ., took no part.

Separate Opinions

GUTIERREZ, JR., J., dissenting:

I agree with the dissenting opinion penned by Justice Medialdea. The disputed contractual
commitment having been given too restrictive a meaning by the dominant party, the Court should
step in with a more liberal and reasonable interpretation.

I have no objection to the proposition that ownership restrictions which are intended to avoid
overcrowding, deterioration of roads, unsanitary conditions, ugly surroundings, and lawless
behaviour in residential areas may be enforced through the Court's coercive powers. There is
absolutely no showing, however, that two families living in one big residence in Forbes Park would
lead to any of the above unpleasant consequences.

I believe that the zeal with which the private respondent enforces the disputed single family
restriction is intended to insure that Forbes Park real estate values remain higher much, much higher
than the values in any other residential area in the whole country. In other words, what the Court is

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protecting are not sanitation, peace and order, comfort, or aesthetic surroundings which would not in
the least bit be affected by two families sharing one big house in Forbes Park, but inflated land
values and an elitist life style. Under the disputed provision, one family could hire a battalion of
servants, drivers, yayas, gardeners, butlers, footmen, grooms, cooks, laundresses and other lackeys
without violating the single family rule. It is not overcrowding which is sought to be avoided but
something else.

Metro Manila has run out of available residential land for its huge and still exploding population. Land
use has to be rationalized. Without sacrificing their comfort and security, the rich have to yield a little.
I consider it a waste of scarce resources if property worth several millions of pesos is limited in its
use to one solitary family, no matter how small, when it could comfortably house two or more families
in the kind of comfort and luxury which is undreamed of even to upper middle income people. The
very rich have the right to enforce their exclusive lifestyles through voluntary compliance but when
the Courts step in to validate and enforce an unreasonable restriction, I am constrained to dissent.

I am not suggesting that affluent suburban enclaves should be allowed to deteriorate into
monotonous box-like government housing projects or, worse, into slums or squatter colonies. My
only concern is with this Court's validating restrictions whose obvious purpose is to jack up property
values to heights which are incongruous against the grinding poverty and hand-to-mouth
subsistence of the overwhelming masses of our people.

The provisions of the Constitution on Social Justice and Human Rights (Article XIII, Constitution)
emphasize the social function of land. Congress must give the "highest" priority to measures which
enhance the right of all the people to human dignity and reduce social, economic, and political
inequalities through the equitable diffusion of wealth and political power (id, Section 1). The State is
mandated to undertake, in cooperation with the private sector, a continuing housing program and an
urban land reform program which seek to make available at affordable cost decent housing and
basic services to underprivileged and homeless citizens, (id. Section 9). I am afraid that the Court's
decision in this Forbes Park case does not in any way help achieve these constitutional objectives.

The present Constitution expresses the impatience of the framers with what they perceived as an
unfortunate lack of attention to the most pressing problem faced by the country. But even under the
1935 Constitution, the Court was less than enthusiastic when asked to enforce contractual
commitments based on a laissez faire theory of government. In Alalayan v. National Power
Corporation (24 SCRA 172,181-182 [1968]) the Court ruled:

It is to be admitted of course that property rights find shelter in specific constitutional

provisions, one of which is the due process clause. It is equally certain that our
fundamental law framed at a time of "surging unrest and dissatisfaction" (The phrase
is Justice Laurel's, appearing in his concurring opinion in Ang Tibay v. Court, cited
with approval in Antamok Goldfields Mining Co. v. Court, 70 Phil. 340 [1940]), when
there was the fear expressed in many quarters that a constitutional democracy, in
view of its commitment to the claims of property, would not be able to cope effectively
with the problems of poverty and misery that unfortunately afflict so many of our
people, is not susceptible to the indictment that the government therein established is
impotent to take the necessary remedial measures. The framers saw to that. The

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 welfare state concept is not alien to the philosophy of our Constitution. (Cf 'Private
property does not constitute for anyone an absolute and unconditioned right. ...All
men are equal in their right to a decent life. ... It is not a system of justice where one
man is very wealthy and another very poor. Where such a situation exists on a
national scale, it becomes a matter of social justice. ... [In the Philippines, while] a
few have far more than they need, the vast majority lack even the barest essentials
of life. Pastoral Letter of the Catholic Hierarchy, May 1, 1968) It is implicit in quite a
few of its provisions. It suffices to mention two.

There is the clause on the promotion of social justice to ensure the well-being and
economic security of all the people, (Art. 11, Sec. 5, Constitution of the Philippines)
as well as the pledge of protection to labor with the specific authority to regulate the
relations between landowners and tenants and between labor and capital. (Art. XIV,
Sec. 6, Id.) This particularized reference to the rights of working men whether in
industry and agriculture certainly cannot preclude attention to and concern for the
rights of consumers, who are the objects of solicitude in the legislation now
complained of. The police power as an attribute to promote the common weal would
be diluted considerably of its reach and effectiveness if on the mere plea that the
liberty to contract would be restricted, the statute complained of may be
characterized as a denial of due process. The right to property cannot be pressed to
such an unreasonable extreme.

I realize the difficulty in pinpointing the line where restrictions on property ownership go beyond the
constitutional bounds of reasonableness. Each case must be resolved on its particular merits.
Insofar as this petition is concerned, however, I concur the dissenting minority. I vote to grant the
petition.