Primary Holding

Article 448 of the Civil Code regarding builders in good faith is not applicable in condominium settings governed by the Condominium Act, Master Deed, and By-Laws. Condominium corporations, acting through their Board of Directors, have the right to abate constructions violating the Master Deed and By-Laws, and unit owners cannot unilaterally expand their units onto common areas.

Background

Legaspi Towers 200, Inc. owns and operates a condominium building. Leviste Management System, Inc. (LEMANS) owned Concession 3, a unit within the building. LEMANS sought to build Concession 4 on the roof deck above Concession 3. Legaspi Towers objected, arguing the construction was illegal as it violated the Master Deed and Condominium Act and was built without proper approvals. LEMANS claimed ownership of the airspace and good faith in the construction, seeking application of Article 448 of the Civil Code.

Facts

• 1. Legaspi Towers is a condominium building in Makati City.
• 2. LEMANS owned Concession 3 in Legaspi Towers.
• 3. LEMANS constructed Concession 4 on the roof deck above Concession 3 without formal approval from Legaspi Towers or amendment to the Master Deed.
• 4. Legaspi Towers notified LEMANS that the construction was illegal and prohibited entry of construction materials.
• 5. LEMANS obtained a building permit, but Legaspi Towers contested its validity.
• 6. The Master Deed and By-Laws of Legaspi Towers require approval for extraordinary improvements and amendments to the Master Deed with consent of registered owners.
• 7. LEMANS did not obtain the required approvals or amend the Master Deed.
• 8. RTC and CA initially applied Article 448 of the Civil Code, finding both parties in good faith.

Arguments of the Petitioners

• 1. LEMANS owns the airspace above its unit, Concession 3, and the construction of Concession 4 was an exercise of its property rights.
• 2. The building permit for Concession 4 was validly issued.
• 3. Article 448 of the Civil Code applies, and Legaspi Towers should be ordered to exercise the options provided under Article 448, particularly regarding valuation based on Depra vs. Dumlao doctrine.
• 4. Legaspi Towers is bound by the RTC's May 24, 2002 Order applying Article 448, which became final as an interlocutory order.
• 5. Internal arrangement with the then-president of Legaspi Towers indicates good faith.
• 6. Concession 4 is an illegal construction violating the Condominium Act, Master Deed, and By-Laws, constituting a nuisance.
• 7. The building permit for Concession 4 is invalid.
• 8. LEMANS failed to comply with the Condominium Act's requirement for consent from registered owners to amend the Master Deed for the construction.
• 9. The By-Laws require approval from members for extraordinary improvements.
• 10. Legaspi Towers has the right to demolish Concession 4 at LEMANS' expense.
• 11. Article 448 of the Civil Code is inapplicable as the relationship is governed by the Condominium Act and contractual agreements (Master Deed and By-Laws).

Arguments of the Respondents

• 1. N/A (Vivian Y. Locsin and Pitong Marcorde are mentioned as respondents but their arguments are not detailed in the provided text. Engr. Nelson Q. Irasga and Hon. Jose P. De Jesus were third-party respondents and their arguments are not detailed either, as the focus is on the dispute between LEMANS and Legaspi Towers.)

Issues

• 1. Whether Article 448 of the Civil Code and the doctrine in Depra vs. Dumlao are applicable to the case.
• 2. Whether Legaspi Towers has the right to demolish Concession 4.
• 3. Whether the building permit for Concession 4 is valid. (Though the Supreme Court stated it will not rule on the validity of the building permit as it is not central to the right to abate.)
• 4. Whether the RTC's interlocutory order applying Article 448 is binding and precludes Legaspi Towers from contesting LEMANS' status as a builder in good faith.

Ruling

• 1. The Supreme Court ruled that Article 448 of the Civil Code is inapplicable because the case is governed by the Condominium Act, Master Deed, and By-Laws, which constitute special law and contracts among condominium unit owners.
• 2. The Court held that Legaspi Towers has the right to demolish Concession 4 at the expense of LEMANS because the construction violated the Master Deed and By-Laws, and LEMANS failed to secure the necessary approvals.
• 3. The Court reversed the Court of Appeals and RTC decisions, ordering LEMANS to remove Concession 4.
• 4. The Court clarified that the RTC's interlocutory order on May 24, 2002, was not binding and could be reviewed in the appeal from the final judgment.

Doctrines

• 1. Generalia specialibus non derogant: A general law does not nullify a special law. The Condominium Act is a special law governing condominiums, prevailing over the general provisions of the Civil Code, such as Article 448, in this specific context.
• 2. Doctrine of Abatement of Nuisance: Legaspi Towers, as the condominium corporation, has the right to abate violations of the Master Deed and By-Laws, especially constructions that impair the structural integrity of the building.
• 3. Contractual Obligations in Condominium: Purchasing a condominium unit implies adherence to the Master Deed and By-Laws, creating a contractual relationship among unit owners and the condominium corporation.

Key Excerpts

• 1. "The Civil Code provisions on builders in good faith presuppose that the owner of the land and the builder are two distinct persons who are not bound either by specific legislation on the subject property or by contract."
• 2. "Inasmuch as the air space or the area above Concession 3 is not considered as part of the unit, it logically forms part of the common areas."
• 3. "Articles 448 and 546 of the Civil Code on builders in good faith are therefore inapplicable in cases covered by the Condominium Act where the owner of the land and the builder are already bound by specific legislation on the subject property (the Condominium Act), and by contract (the Master Deed and the By-Laws of the condominium corporation)."
• 4. "The Court cannot countenance such an unjust result from an erroneous application of the law and jurisprudence."

Precedents Cited

• 1. Depra vs. Dumlao: Cited by both parties regarding the application of Article 448 and valuation of improvements made by a builder in good faith. The Supreme Court distinguished this case, finding it inapplicable to condominium settings.
• 2. Crispino v. Tansay & Rudecon v. Singson: Cited regarding remedies against interlocutory orders and the nature of certiorari, explaining why the RTC's 2002 order was not binding in the final appeal.
• 3. E.I. Dupont De Nemours and Co. v. Francisco: Cited to distinguish between certiorari under Rule 65 and Petition for Review under Rule 45, highlighting the Court’s power to correct errors of judgment in Rule 45 petitions.
• 4. Communities Cagayan, Inc. v. Nanol: Cited to support the principle that Article 448 is inapplicable when there's a contractual relation between parties.
• 5. Tuatis v. Escol & Espinoza v. Mayandoc: Cited to explain the raison d'etre of Article 448 in preventing forced co-ownership and the landowner’s option.
• 6. National Power Corp. v. Presiding Judge: Cited to reiterate the principle of generalia specialibus non derogant.
• 7. Limson v. Wack Wack Condominium Corp.: Cited to emphasize that purchasing a condominium unit binds the purchaser to contracts with other unit owners through the Master Deed and By-Laws.
• 8. Presidential Decree No. 1271 Committee v. De Guzman: Cited regarding the role of the Supreme Court as the final arbiter of legal questions.

Statutory and Constitutional Provisions

• 1. Article 448, Civil Code: Builder in good faith rights.
• 2. Article 546, Civil Code: Rights of a possessor in good faith regarding necessary and useful expenses.
• 3. Article 699, Civil Code: Remedies against public nuisance.
• 4. Section 4, Condominium Act (Republic Act No. 4726): Requirements for condominium registration and amendment of Master Deed.
• 5. Section 10, Condominium Act (Republic Act No. 4726): Role and purpose of condominium corporations and membership.
• 6. Section 2, Condominium Act (Republic Act No. 4726): Definition of a condominium.
• 7. Section 3(d), Condominium Act (Republic Act No. 4726): Definition of common areas.
• 8. Section 6, Condominium Act (Republic Act No. 4726): Incidents of condominium grant.
• 9. Rule 41, Section 1, Rules of Court: Subject of appeal from RTC orders, and non-appealable interlocutory orders.
• 10. Rule 44, Section 13, Rules of Court: Requirements for Appellant's brief.
• 11. Rule 50, Section 1(f), Rules of Court: Grounds for dismissal of appeal.
• 12. Rule 65, Rules of Court: Special Civil Action of Certiorari.
• 13. Section 23, Corporation Code: Powers of the Board of Directors or Trustees.
• 14. Article V, Section 2 of By-Laws of Legaspi Towers: Extraordinary Improvements in common areas.
• 15. Article VII, Section 1 of By-Laws of Legaspi Towers: Abatement of Violations.