Source: http://elibrary.judiciary.gov.ph/thebookshelf/showdocs/1/55059
Timestamp: 2019-04-20 16:55:47+00:00

Document:
EDITO GULFO AND EMMANUELA GULFO, PETITIONERS, VS. JOSE P. ANCHETA, RESPONDENT.
We resolve the petition for review on certiorari, tiled by Edito Gulfo and Emmanuela Gulfo, under Rule 45 of the Rules of Court, to assail the decision of the Court of Appeals (CA) in CA-G.R. CV No. 68784 dated June 27, 2006. The CA reversed and set aside the resolution dated June 20, 2000 of the Regional Trial Court (RTC); Branch 253, Las Piñas City, and remanded the case to the RTC for trial on the merits.
The petitioners are the neighbors of Jose Ancheta (respondent). The parties occupy a duplex residential unit on Zodiac Street, Veraville Homes, Almanza Uno, Las Piñas City. The petitioners live in unit 9-B, while the respondent occupies unit 9-A of the duplex.
Sometime in 1998, respondent’s septic tank overflowed; human wastes and other offensive materials spread throughout his entire property. As a result, respondent and his family lived through a very unsanitary environment, suffering foul odor and filthy premises for several months.
In the early months of 1999, the respondent engaged the services of Z.E. Malabanan Excavation & Plumbing Services to fix the overflow. It was then discovered that the underground drainage pipe, which connected respondent’s septic tank to the subdivision’s drainage system, had been closed by cement that blocked the free flow of the wastes from the septic tank to the drainage system.
The respondent narrated that the petitioners had just recently renovated their duplex unit and, in the process, had made some diggings in the same portion where the drainage pipe had been cemented. The respondent added that the closing of the drainage pipe with cement could not have been the result of an accident, but was the malicious act by the petitioners. On May 19, 1999, the respondent filed a complaint for damages against the petitioners with the RTC, alleging that the petitioners maliciously closed a portion of the respondent’s drainage pipe and this led to the overflowing of the respondent’s septic tank.
On June 24, 1999, the petitioners moved to dismiss the complaint on the ground of lack of jurisdiction. The petitioners argued that since the parties reside in the same subdivision and are also members of the same homeowners’ association (Veraville Homeowners Association, Inc.), the case falls within the jurisdiction of the Home Insurance and Guaranty Corporation (HIGC).
The petitioners noted that the HIGC is a government-owned and -controlled corporation created under Republic Act No. 580 which vested the administrative supervision over homeowners’ associations to the Securities and Exchange Commission (SEC). This law was later repealed by Executive Order No. 535 which transferred the regulatory and adjudicative functions of the SEC over homeowners’ associations to the HIGC.
Considering that defendants have complied with the Order of this Court dated May 2, 2000 and have substantiated their allegations that Veraville Homeowners I Association, Almanza Uno, Las Piñas City is duly registered with the Home Insurance Guranty [sic] Corporation, this Court is of the considered view that it has no jurisdiction over the instant case, as this Court cannot arrogate unto itself the authority to resolve a controversy, the jurisdiction over which is initially lodged with an administrative body equipped with special competence for the purpose.
WHEREFORE, for lack of jurisdiction[,] the instant case is ordered DISMISSED. (italics supplied).
Aggrieved, the respondent appealed the RTC ruling to the CA. The respondent maintained the argument that no intra-corporate dispute existed.
On June 27, 2006, the CA reversed the judgment of the RTC and remanded the case to the lower court for trial on the merits. The CA ruled that the factual allegations in the complaint support the claim for damages. The CA noted that although the case involves a dispute between members of the homeowners’ association, it is not an intra-corporate matter as it does not concern the right of the corporation to exist as an entity.
The petitioners moved for reconsideration, but the CA denied the motion in its resolution of November 7, 2006; hence, the present petition.
We resolve in this petition the lone issue of whether the CA erred in ruling that the RTC has jurisdiction over this dispute.
We deny this petition for lack of merit.
Article 2176. Whoever by act or omission causes damage to another, there being fault or negligence, is obliged to pay for the damage done. Such fault or negligence, if there is no pre-existing contractual relation between the parties, is called a quasi-delict and is governed by the provisions of this Chapter.
Since the issue of damages arising from the Civil Code, not intra-corporate controversy, is involved, the RTC is the appropriate court with the power to try the case, not the homeowners’ association, pursuant to Section 19(8) of Batas Pambansa Bilang 129, as amended by Republic Act No. 7691.
We take this opportunity to reiterate what constitutes intra-corporate disputes. Jurisprudence consistently states that an intra-corporate dispute is one that arises from intra-corporate relations; relationships between or among stockholders; or the relationships between the stockholders and the corporation. In order to limit the broad definition of intra-corporate dispute, this Court has applied the relationship test and the controversy test.
These two tests, when applied, have been the guiding principle in determining whether the dispute is an intra-corporate controversy or a civil case.
Under this test, no doubt exists that the parties were members of the same association, but this conclusion must still be supplemented by the controversy test before it may be considered as an intra-corporate dispute. Relationship alone does not ipso facto make the dispute intra-corporate; the mere existence of an intra-corporate relationship does not always give rise to an intra-corporate controversy. The incidents of that relationship must be considered to ascertain whether the controversy itself is intra-corporate. This is where the controversy test becomes material.
Under the controversy test, the dispute must be rooted in the existence of an intra-corporate relationship, and must refer to the enforcement of the parties' correlative rights and obligations under the Corporation Code, as well as the internal and intra-corporate regulatory rules of the corporation, in order to be an intra-corporate dispute. These are essentially determined through the allegations in the complaint which determine the nature of the action.
In light of these, the case before us involves a simple civil action — the petitioners' liability for civil indemnity or damages—that could only be determined through a full-blown hearing tor the purpose before the RTC.
WHEREFORE, we hereby DENY the petition, and AFFIRM the Decision dated June 27, 2006 and the Resolution dated November 7, 2006 of the Court of Appeals in CA-G.R. CV No. 68784. The records of the case are hereby REMANDED to the Regional Trial Court of Las Piñas City, Branch 253, for trial on the merits. In light of the age of this case, we hereby DIRECT the Regional Trial Court to prioritize the hearing and disposition of this case.
Carpio, (Chairperson), Villarama, Jr.,* Perez, and Reyes, JJ., concur.
* Designated as Acting Member of the Second Division in lieu of Associate Justice Maria Lourdes P. A. Sereno per Special Order No. 1274 dated July 30, 2012.
 Penned by Associate Justice Mariflor P, Punzalan Castillo, and concurred in by Associate Justices Mario L. Guariña III and Noel G. Tijam; id, at 89-96.
 AN ACT TO CREATE THE HOME FINANCING COMMISSION, TO STIMULATE HOME BUILDING AND LAND OWNERSHIP AND TO PROMOTE THE DEVELOPMENT OF LAND FOR THAT PURPOSE, PROVIDE LIBERAL FINANCING THROUGH AN INSURED MORTGAGE SYSTEM, AND DEVELOP THRIFT THROUGH THE ACCUMULATION OF SAVINGS IN INSURED INSTITUTIONS.
 AMENDING THE CHARTER OF THE HOME FINANCING COMMISSION, RENAMING IT AS HOME FINANCING CORPORATION, ENLARGING ITS POWERS, AND FOR OTHER PURPOSES.
 Del Rosario v. Gerry Roxas Foundation, Inc., G.R. No. 170575, June 8, 2011, 651 SCRA 414, 416-417, citing Spouses Huguete v. Spouses Embudo, 453 Phil. 170, 176-177 (2003); and Co Tiamco v. Diaz, 75 Phil. 672, 683-684 (1946).
 Annex “B”; rollo, pp. 45-47.
 AN ACT EXPANDING THE JURISDICTION OF THE METROPOLITAN TRIAL COURTS, MUNICIPAL TRIAL COURTS, AND MUNICIPAL CIRCUIT TRIAL COURTS, AMENDING FOR THE PURPOSE BATAS PAMBANSA BLG. 129, OTHERWISE KNOWN AS THE "JUDICIARY REORGANIZATION ACT OF 1980."
 Strategic Alliance Development Corporation v. Star Infrastructure Development Corporation, G.R. No. 187872, November 17, 2010, 635 SCRA 380, citing Sps. Abejo v. Judge De la Cruz, 233 Phil. 668, 681 (1987).
 Speed Distributing Corp. v. Court of Appeals, 469 Phil. 739, 758-759 (2004).
 211 Phil. 222, 230-231 (1983).
 DMRC Enterprises v. Este Del Sol Mountain Reserve, Inc., 217 Phil. 280, 299 (1984).
 Reyes v. Regional Trial Court of Makati, Br. 142, G.R. No. 165744, August 11, 2008, 561 SCRA 593, 611.

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