Welbit Construction Corp. vs. Heirs of Castro (G.R. No. 210286, July 23, 2018)
FACTS;:
Petitioners Welbit Construction Corporation and Wack Wack Condominium Corporation are the developer and management body of Wack Wack Apartments Building (condominium), respectively, while Spouses Eugenio Juan and Matilde Gonzalez are the owners thereof.
For failure to pay assessment dues amounting to P79,905.41 as of July 1986 despite demand, Welbit and Spouses Gonzalez (petitioners) caused the annotation of a lien for unpaid assessments and other dues at the back of De Castro's title pursuant to Section 4 of the Master Deed with Declaration of Restrictions of Wack Wack Condominium (Master Deed).
As the said dues remained unsettled, petitioners filed a petition for the extra-judicial foreclosure of the subject property, Petitioners emerged as the highest bidder and accordingly, a certificate of sale was issued in their favor, and the sale was registered with the Register of Deeds of Pasig City and annotated at the back of De Castro's title.
De Castro failed to redeem the property.
When requested to surrender his owner's duplicate copy of CCT No. 2826, De Castro filed a petition for annulment of foreclosure proceedings before the SEC which then had the jurisdiction over intra-corporate disputes, Arguing that petitioners have no legal personality to invoke the Condominium Act, among others x x x
[and should have availed of other remedies in law; the annotation of assessment dues and certificate of sale, and the extra-judicial proceedings were highly irregular and devoid of factual and legal basis; that the assessments imposed were excessive, oppressive, unconscionable, and arbitrary; and that the petitioners have no special power of attorney or authority was granted to them nor was there any agreement between the parties to that effect.]
For their part, petitioners countered that the foreclosure was lawful pursuant to the Master Deed to which De Castro was bound as a unit owner.
During the pendency of the case, De Castro passed away and substituted by Heirs of Cresenciano C. De Castro (respondents).
RTC DISMISSED THE PETITION saying that De Castro cannot deny that he is bound by the Master Deed, which gave authority to the petitioners to issue assessments against him for his unpaid dues and penalties. The RTC also cited the By-Laws of the condominium corporation that gives authority to the Board of Directors to enforce collection of unpaid assessments duly levied in by any of the remedies provided by the Republic Act No. 4726[14] or the Condominium Act and other pertinent laws, such as foreclosure.
CA reversed and set aside the RTC Decision, saying that the petitioners have no sufficient authority to extra-judicially foreclose the subject property.
Herein condominium corporation's By-Laws or the Master Deed, Condominium Act do not vest the petitioners with sufficient authority to extra-judicially foreclose the property.
ISSUE:
Whether or not the CA erred in declaring the extra-judicial foreclosure proceeding null and void.
HELD:
YES.
We find merit in the instant petition.
Marbella case is not applicable in the case at bar.
Unlike in First Marbella, however, the CA erred in ruling that herein petitioners have no such special authority to foreclose.
In the case at bar, the foreclosure was not merely based on the the (1) notice of assessment annotated on CCT No. 2826 nor (2) solely upon the Condominium Act but also on the (3) Master Deed, and the (4) condominium corporation's By-Laws.
As correctly found by the RTC:
Thus, Section 1 of the Article V of the By-laws of the Condominium Corporation authorizes the board to assess the unit owner penalties and expenses for maintenance and repairs necessary to protect the common areas or any portion of the building or safeguard the value and attractiveness of the condominium.
Under Section 5 of Article [V] of the By-Laws, in the event a member defaults in the payment of any assessment duly levied in accordance with the Master Deed and the By-Laws, the Board of Directors may enforce collection thereof by any of the remedies provided by the Condominium Act and other pertinent laws, such as foreclosure. x x x.
Clearly, petitioners were authorized to institute the foreclosure proceeding to enforce the lien upon the condominium unit.
Petition is GRANTED.
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