KWONG vs. DIAMOND HOMEOWNERS

 

WILLIAM G. KWONG MANAGEMENT, INC. and WILLIAM G. KWONG , petitioners, vs. DIAMOND HOMEOWNERS & RESIDENTS ASSOCIATION, respondent.

G.R. No. 21135 | June 10, 2019

 

FACTS:

Diamond Subdivision is a residential subdivision in Balibago, Angeles City, Pampanga with several commercial establishments operating within it. These establishments include beer houses, karaoke bars, night clubs, and other drinking joints. Because of these, patrons, customers, and many other people freely come in and out of Diamond Subdivision. Such unrestricted access to the subdivision, however, also exposed its residents to incidents of robbery, akyat-bahay, prostitution, rape, loud music, and noise that would last until the wee hours of the morning.

Diamond Homeowners & Resident Association (Diamond Homeowners), the legitimate homeowners' association of Diamond Subdivision, sought to address the residents' peace and security issues by raising their concerns to the City Council of Angeles City (Angeles City Council).

On February 24, 2003, the Angeles City Council issued Ordinance No. 132, series of 2003, reclassifying Diamond Subdivision as exclusively residential and prohibited the further establishment and operation of any business except for those already existing. However, this Ordinance was not complied with as more beer gardens and nightclubs were still put up. The peace, order, and security situation in the subdivision did not improve.

Among those affected was William G. Kwong (Kwong). A resident of Diamond Subdivision for more than 38 years, he runs three (3) motels in the subdivision under his company, William G. Kwong Management, Inc. Kwong proposed to his neighbors that guard posts with telephone lines be set up at the entry and exit points on the street where he resides to screen all incoming and outgoing visitors. However, the other residents of Diamond Subdivision also wanted their security concerns addressed. Thus, to safeguard the whole subdivision, Diamond Homeowners proposed the "No Sticker, No ID, No Entry" Policy (the Policy).

Kwong, however, contested the Policy. When Diamond Homeowners did not heed his objection, Kwong filed before the Housing and Land Use Regulatory Board Regional Office a Complaint for the issuance of a cease and desist order with application for a temporary restraining order. He argued that the Policy was invalid because the subdivision roads have been donated to the City of Angeles in 1974 and were, thus, public roads that must be open for public use. Likewise, he contended that the screening of visitors would be cumbersome for his customers, affecting his businesses.

Ruling in Kwong's favor, the Housing and Land Use Regulatory Board Regional O ce issued a Cease and Desist Order and a Temporary Restraining Order. The records were later forwarded to the Housing and Land Use Regulatory Board Arbiter for final disposition. The Housing and Land Use Regulatory Board Arbiter lifted the Cease and Desist Order and dismissed Kwong's Complaint.

Upholding the Policy's validity, the Arbiter found that it neither prohibited nor impaired the use of the roads. Neither did it change the classification of the roads nor usurp the government's authority. Moreover, the roads were still for public use, and the public was still allowed to pass as long as they presented identification cards. The Arbiter noted that there was no evidence showing that persons were being refused access or asked to pay for its use.

On appeal before the Board of Commissioners of the Housing and Land Use Regulatory Board, the Arbiter's ruling was reversed. In subjecting the subdivision roads to the Policy, the Board of Commissioners found that they were turned into private roads — inaccessible, not open to the public, and under the control of Diamond Homeowners.

The Office of the President, in its March 24, 2010 Decision, affirmed the Board of Commissioners' Decision in toto. The Court of Appeals granted Diamond Homeowners' Petition and set aside the Office of the President's Decision. It found that Diamond Homeowners was authorized in enacting the Policy. The Court of Appeals ruled that while the local government acquires ownership rights, these rights should be harmonized with the interests of homeowners who invested life savings in exchange for special amenities, comfort, and tighter security, which non-subdivisions did not offer.

The Court of Appeals noted that Presidential Decree No. 957, as amended by Presidential Decree No. 1216, required the donation of subdivision roads to the local government. While the issuance was silent on regulating access to subdivision roads, it found that the requirement was imposed to bene t homeowners, amid subdivision developers who tended to fail in maintaining the upkeep of subdivision roads, alleys, and sidewalks. Likewise, the Court of Appeals noted the Magna Carta for Homeowners and Homeowners' Associations, under which homeowners were given the right to organize to protect and promote their mutual benefits and the power to create rules necessary to regulate and operate the subdivision facilities. Section 10 (d) provided homeowners' associations the right to regulate access to and passage through the subdivision roads to preserve privacy, tranquility, internal security, safety, and traffic order. Moreover, the Court of Appeals held the Policy reasonable because its purpose was to secure and ensure the peace, safety, and security of homeowners and residents.

Petitioners insist that the Policy is invalid. They assert that the subdivision roads are public roads for public use, and outside the commerce of man, having been donated to the Angeles City government since 1974. They maintain that access to and use of Diamond Subdivision roads should be open to the general public, not limited to privileged individuals. Petitioners insist that it is the City of Angeles that has the power to control and regulate the use of roads. As such, they argue that Diamond Homeowners should have had the city government address its concerns.

Petitioners claim that the local governments' power to regulate roads cannot be exercised by a private entity. To do so would be a usurpation of the local government's authority, and an illegal abdication of power on the part of the latter. They cite Section 10 (d), which lists the requisites that limit a homeowners' association's rights and powers, showing that its power is merely delegated and conditional. A homeowners' association cannot arrogate unto itself the power to issue the Policy or limit or prevent the free use of public roads without complying with the law's requisites, as it would be ultra vires.

Respondent further cites Section 30 of Presidential Decree No. 957, which mandates subdivision associations to promote and protect the mutual interests of homeowners, and Section 5 of the Rules on Registration and Supervision of Homeowners Association, which empowers homeowners' associations to adopt rules and regulations, and to exercise other powers necessary to govern and operate the association. It argues that this right and authority applies even if the subdivision roads have been donated to the local government.

ISSUES:

1.                  Whether or not there is prima facie evidence of the security and safety issues within Diamond Subdivision

2.                  Whether or not respondent Diamond Homeowners & Residents Association was authorized in issuing the "No Sticker, No ID, No Entry" Policy despite the roads having been donated to the local government.

RULING

1. Yes, there is prima facie evidence of the security and safety issues within Diamond Subdivision.

Besides, these security concerns were affirmed by petitioner Kwong himself. He also proposed to shoulder the costs of putting up security gates on both entry and exit points of the street where he resides, and the hiring of security guards to screen incoming and outgoing visitors. These constitute admissions, or declarations "as to a relevant fact that may be given in evidence against him." Petitioner Kwong presented no evidence to counter these documents. Thus, this Court affirms that Diamond Subdivision was experiencing security concerns.

2. Yes, respondent Diamond Homeowners & Residents Association was authorized in issuing the "No Sticker, No ID, No Entry" Policy despite the roads having been donated to the local government.

According to the Deed of Donation, the donation was done in compliance with Resolution No. 162, series of 1974, of the Municipal Board of Angeles City. This donation is consistent with Section 31 of Presidential Decree No. 957, or the Subdivision and Condominium Buyers' Protection Decree. The whereas clauses of Presidential Decree No. 1216 explicitly state that roads, alleys, and sidewalks in subdivisions are for public use, and are beyond the commerce of men

Moreover, both parties admit that the subdivision roads are public. Thus, there is no issue on the roads' ownership: it belongs to the Angeles City government. However, both Presidential Decree Nos. 957 and 1216 are silent on the right of homeowners' associations to issue regulations on using the roads to ensure the residents' safety and security. Section 10 (d) gives homeowners' associations the right to "regulate access to, or passage through the subdivision/village roads for purposes of preserving privacy, tranquility, internal security, safety[,] and traffic order" as long as they complied with the requisites. The law does not distinguish whether the roads have been donated to the local government or not.

The Magna Carta for Homeowners and Homeowners' Associations does not state that it has a retroactive effect. Thus, it cannot be applied to the Policy, This Court must rule on the Policy's validity based on the laws, rules, and court doctrines in force at the time of its issuance.

Nonetheless, homeowners' associations are not entirely powerless in protecting the interests of homeowners and residents. Section 31 of Presidential Decree No. 957 recognizes the need for a homeowners' association to promote and protect their mutual interest and assist in community development. This Court has also acknowledged the right of homeowners' associations to set goals for the promotion of safety and security, peace, comfort, and the general welfare of their residents.

The Policy maintains the public nature of the subdivision roads. It neither prohibits nor impairs the use of the roads. It does not prevent the public from using the roads, as all are entitled to enter, exit, and pass through them. One must only surrender an identification card to ensure the security of the residents. As stated, the residents and homeowners, including petitioner Kwong, have valid security concerns amid a sharp increase in criminal activities within the subdivision. The Policy, likewise, neither denies nor impairs any of the local government's rights of ownership. Respondent does not assert that it owns the subdivision roads or claims any private right over them.

Furthermore, Section 31 of Presidential Decree No. 957, as amended, on the donation of subdivision roads to the local government, "was [enacted] to remedy the situation prevalent at that time where owners/developers fail to keep up with their obligation of providing and maintaining the subdivision roads, alleys[,] and sidewalks. Thus, the donation of the roads to the local government should not be interpreted in a way contrary to the legislative intent of bene ting the residents. Conversely, residents should not be disempowered from taking measures for the proper maintenance of their residential area. Under Section 30 of Presidential Decree No. 957, they may protect their mutual interests. Here, the Policy was not inconsistent with this purpose. To rule against it would be contrary to the intention of the law to protect their rights.

The Policy was enacted to ensure the safety and security of Diamond Subdivision residents who have found themselves exposed to heightened crimes and lawlessness. The Policy was approved by 314 members of the homeowners' association, with only petitioner Kwong protesting the solution. His protest is ultimately rooted in the damage that the Policy has allegedly caused to his businesses. However, he failed to present any evidence of this damage. Since petitioner Kwong presented no evidence of the damage caused to him, this Court cannot rule in his favor.

 

WHEREFORE, this Court AFFIRMS the Court of Appeals' July 5, 2013 Decision and February 12, 2014 Resolution in CA-G.R. SP No. 115198. This Court finds that Diamond Homeowners & Residents Association's "No Sticker, No ID, No Entry" Policy is valid and consistent with law and jurisprudence.