Spouses Ermino vs. Golden Village Homeowners Association, Inc.

Lower estates are obliged to receive only waters that naturally and without human intervention descend from higher estates, and where damage is caused by waters artificially collected or whose flow is increased by the negligence of the higher estate owner (e.g., through bulldozing without proper drainage), the higher estate owner is solely liable for the damage, and the lower estate owner may construct works that impede such unnatural flow without incurring liability.

Spouses Ermino owned property in Alco Homes, a subdivision situated beside Golden Village Subdivision and at a lower elevation than Hilltop City Subdivision. In August and September 1995, continuous heavy rains caused a large volume of water to flow from Hilltop City Subdivision onto Alco Homes and Golden Village, damaging the Ermino's property. Hilltop City Subdivision was being developed by E.B. Villarosa & Partners Co., Ltd., which had bulldozed and flattened the area without installing adequate retaining walls or flood control devices.

• The Parties and Location: Spouses Abraham and Melchora Ermino are residents of Alco Homes, a subdivision located beside Golden Village Subdivision in Barangay Carmen, Cagayan de Oro City. Hilltop City Subdivision is situated at the upper portion of Alco Homes, constituting a higher estate, while Alco Homes and Golden Village are lower estates relative to Hilltop City.
• The Flooding Incident: Prior to August 12 and September 10, 1995, continuous heavy rainfall caused a large volume of water to descend from Hilltop City Subdivision directly onto the Spouses Ermino's house in Alco Homes, damaging their fence, furniture, appliances, and car.
• Allegations of Negligence: Spouses Ermino filed a complaint for damages against E.B. Villarosa (developer of Hilltop City) and GVHAI. They alleged that E.B. Villarosa negligently failed to observe Department of Environment and Natural Resources regulations and to provide retaining walls or flood control devices, causing soil softening and inundation. They also claimed that GVHAI committed a wrongful act by replacing a steel grille gate with a concrete fence between Golden Village and Alco Homes, which allegedly diverted the flow of water toward their property.
• Defenses: E.B. Villarosa contended that the damage was due to a fortuitous event and was aggravated by GVHAI's concrete fence. GVHAI argued that the fence was constructed in the exercise of its proprietary rights to prevent outsiders from entering the subdivision, and that sole liability rested with E.B. Villarosa for denuding the hilltop and failing to provide precautionary measures.
• RTC Findings: The RTC found that bulldozing by E.B. Villarosa softened the soil, making it easily carried by water, and that GVHAI's replacement of the steel grille with a concrete fence blocked the water flow that would have otherwise passed by, rendering both jointly and severally liable.

• Articles 20 and 21 of the Civil Code: Spouses Ermino maintained that GVHAI committed a wrongful act in constructing the concrete fence, which they claimed was contrary to law, morals, good customs, or public policy, and constituted negligence that caused their damage.
• Violation of Easement Laws: They argued that GVHAI, as owner of a lower estate, was obliged under Article 637 of the Civil Code and Article 50 of the Water Code to receive waters naturally descending from the higher estate, and that its concrete fence impeded this legal easement.

• Valid Exercise of Proprietary Rights: GVHAI countered that the construction of the concrete fence was a legitimate exercise of its right under Article 430 of the Civil Code to enclose its property, undertaken for security purposes to ward off undesirable elements, and not intended to obstruct water flow.
• Lack of Negligence: It argued that no negligence attached to the fence construction because a reasonably prudent person could not have foreseen the specific harm suffered by Spouses Ermino, given that the flooding was caused by the developer's activities on the higher estate.
• Attribution of Sole Liability: GVHAI asserted that E.B. Villarosa was solely liable for the damage caused by its bulldozing and denudation of Hilltop City Subdivision, which artificially increased and channeled the water flow.

• Liability under Articles 20 and 21: Whether GVHAI committed a wrongful act or was negligent in constructing the concrete fence, thereby rendering it liable for damages under Articles 20 and 21 of the Civil Code.
• Easement of Waters: Whether GVHAI violated the natural easement of waters by constructing the concrete fence, and whether it was legally obliged to receive the waters flowing from Hilltop City Subdivision.

• Liability under Articles 20 and 21: GVHAI was not liable. The construction of the concrete fence constituted a valid exercise of proprietary rights under Article 430 of the Civil Code, intended to secure the subdivision rather than obstruct water. No malice or bad faith attended the act, as malice implies a conscious and intentional design to do a wrongful act for a dishonest purpose. No negligence was established because a reasonably prudent person could not have foreseen that the fence would cause the specific injury complained of, where such injury was proximately caused by the developer's bulldozing of the higher estate.
• Easement of Waters: GVHAI did not violate the easement. Under Article 637 of the Civil Code and Article 50 of the Water Code, lower estates are obliged to receive only waters that naturally and without the intervention of man descend from higher estates. The water flow in this case was not natural; E.B. Villarosa's bulldozing and flattening of the hills without retaining walls softened the soil and altered the water course, imposing a burden beyond what the law contemplates. Consequently, the concrete fence—which would not have obstructed naturally flowing water—was not an impediment to a valid easement, and E.B. Villarosa's negligence was the sole proximate cause of the damage.

• Natural Easement of Waters (Article 637, Civil Code; Article 50, Water Code) — Lower estates are statutorily obliged to receive waters that naturally and without human intervention descend from higher estates, along with stones or earth carried thereby. The owner of the lower estate cannot construct works impeding this natural flow, and the owner of the higher estate cannot make works increasing the burden.
• Limitation on Natural Easement: Artificial Flow — The obligation of the lower estate extends only to naturally flowing waters. Where waters are artificially collected or their flow is increased by human intervention (such as bulldozing without proper drainage), the lower estate is not obliged to receive them, and the higher estate owner is liable for resulting damage.
• Test of Negligence (Picart v. Smith) — Negligence is determined by whether the defendant used that reasonable care and caution which an ordinarily prudent person would have used in the same situation; if not, the defendant is guilty of negligence.
• Proximate Cause — The negligent failure of the higher estate owner to provide retaining walls and proper drainage after bulldozing, thereby causing artificial flooding, constitutes the proximate cause of damage to lower estates, absolving the lower estate owner of liability for constructing fences that would have otherwise been permissible.

• "Malice or bad faith, at the core of Articles 20 and 21, implies a conscious and intentional design to do a wrongful act for a dishonest purpose or moral obliquity."
• "The test by which to determine the existence of negligence in a particular case may be stated as follows: Did the defendant in doing the alleged negligent act use that reasonable care and caution which an ordinarily prudent person would have used in the same situation? If not, then he is guilty of negligence."
• "Lower estates are only obliged to receive water naturally flowing from higher estates and such should be free from any human intervention."
• "The owner of the lower estate cannot construct works which will impede this natural flow, unless he provides an alternative method of drainage; neither can the owner of the higher estate make works which will increase this natural flow."

• Picart v. Smith, Jr., 37 Phil. 809 (1918) — Established the test for determining negligence.
• Lunod v. Meneses, 11 Phil. 128 (1908) — Illustrated the statutory obligation of lower estates to receive naturally descending waters.
• Remman Enterprises, Inc. v. Court of Appeals, 386 Phil. 340 (2000) — Applied Article 637 and Article 50 regarding liability when waters are artificially collected.
• ABS-CBN Broadcasting Corp. v. Court of Appeals, 361 Phil. 499 (1999) — Defined malice or bad faith under Articles 20 and 21.
• Spouses Custodio v. Court of Appeals, 323 Phil. 575 (1996) — Affirmed the right of owners to enclose property under Article 430.

• Article 20, Civil Code — Every person who, contrary to law, wilfully or negligently causes damage to another, shall indemnify the latter for the same.
• Article 21, Civil Code — Any person who wilfully causes loss or injury to another in a manner that is contrary to morals, good customs or public policy shall compensate the latter for the damage.
• Article 430, Civil Code — Every owner may enclose or fence his land or tenements by means of walls, ditches, live or dead hedges, or by any other means without detriment to servitudes constituted thereon.
• Article 613, Civil Code — Defines an easement or servitude as a real right constituted on another's property, corporeal and immovable, by virtue of which the owner has to abstain from doing or to allow somebody else to do something on his property for the benefit of another thing or person.
• Article 627, Civil Code — The owner of the dominant estate may make, at his own expense, on the servient estate any works necessary for the use and preservation of the servitude, but without altering it or rendering it more burdensome.
• Article 637, Civil Code — Lower estates are obliged to receive the waters which naturally and without the intervention of man descend from the higher estates, as well as the stones or earth which they carry with them. The owner of the lower estate cannot construct works which will impede this easement; neither can the owner of the higher estate make works which will increase the burden.
• Article 50, Water Code — Lower estates are obliged to receive the waters which naturally and without the intervention of man flow from the higher estates, as well as the stone or earth which they carry with them.

Antonio T. Carpio (Acting Chief Justice), Estela M. Perlas-Bernabe, Alexander G. Gesmundo (presumably A. Reyes, Jr.), and Japar B. Dimaampao (presumably J. Reyes, Jr.).