In the case of Corinthian Gardens Association, Inc. v. Spouses Tanjangco and Spouses Cuaso, the Supreme Court held that a homeowner’s association could be held liable for damages resulting from its negligent approval of building plans. The ruling underscores that homeowner associations must exercise due diligence in reviewing and approving construction plans to ensure compliance with regulations and to protect the property rights of all residents. This decision establishes a precedent for holding associations accountable for failing to prevent property encroachments arising from negligent plan approvals.

When Boundaries Blur: Examining Negligence in Subdivision Construction

This case revolves around a boundary dispute between the Tanjangcos and the Cuasos, who were neighbors in the Corinthian Gardens Subdivision. The Cuasos, intending to construct a house on their lot, sought the services of a geodetic engineer and a construction company. Corinthian Gardens Association, Inc., the homeowner’s association, was responsible for approving building plans and conducting periodic inspections. After construction, it was discovered that the Cuasos’ perimeter fence encroached upon the Tanjangcos’ property. This led to a legal battle where the central question was whether Corinthian Gardens was negligent in approving the building plans and, if so, whether that negligence contributed to the encroachment and subsequent damages suffered by the Tanjangcos.

The Regional Trial Court (RTC) initially ruled in favor of the Tanjangcos, finding that the Cuasos’ perimeter wall encroached on their land. However, the RTC dismissed the third-party complaint against Corinthian, finding no cause of action. Dissatisfied, all parties appealed to the Court of Appeals (CA), which reversed the RTC’s decision. The CA held that the Cuasos acted in bad faith and that Corinthian, along with the construction company and the geodetic engineer, were negligent in performing their duties. The CA ordered Corinthian to contribute a percentage of the judgment sums to the Tanjangcos. Corinthian then appealed to the Supreme Court, questioning the CA’s finding of negligence and the increase in the adjudged rent.

At the heart of the matter is Article 2176 of the Civil Code, which addresses quasi-delicts, stating,

ART. 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.

To succeed in a tort case under this provision, the plaintiff must prove damages, the defendant’s fault or negligence, and a causal connection between the negligence and the damages. The Supreme Court emphasized that negligence is the failure to exercise the standard of care that a reasonably prudent person would exercise under similar circumstances. In determining negligence, the Court applied the test of whether the defendant used reasonable care and caution that an ordinary person would have used in the same situation. The court has to consider what would be reckless, blameworthy, or negligent in a man of ordinary intelligence and prudence and determines liability according to that standard.

In this context, the Supreme Court found Corinthian negligent, agreeing with the CA’s assessment that Corinthian failed to exercise the necessary diligence to ensure compliance with its own Manual of Rules and Regulations. The Court dismissed Corinthian’s argument that its approval was limited to a mere “table inspection,” stating that this would be putting a premium on negligence. The Court highlighted that Corinthian’s Manual of Rules and Regulations applied to all residents, and its approval of the building plans, even if only through a “table inspection,” was still an approval that carried with it the responsibility to ensure compliance.

The Court further emphasized the significance of the builder’s cash bond required by Corinthian, stating that it could not benefit from the bond while disclaiming any responsibility for the construction. The payment of pre-construction and membership fees by the Cuasos also created obligations on the part of Corinthian, as duties and responsibilities go hand in hand with rights and privileges. The Court quoted the CA’s poignant statement:

And then again third party defendant-appellee Corinthian Garden required the posting of a builder’s cash bond (Exh. 5-Corinthian) from the defendants-appellants Cuasos and the third-party defendant C.B. Paraz Construction to secure the performance of their undertaking. Surely, Corinthian does not imply that while it may take the benefits from the Builder’s cash bond, it may, Pilate-like, wash its hands of any responsibility or liability that would or might arise from the construction or building of the structure for which the cash bond was in the first place posted. That is not only unjust and immoral, but downright unchristian and iniquitous.

Ultimately, the Supreme Court ruled that Corinthian’s failure to prevent the encroachment, despite the inspections conducted, constituted negligence and contributed to the injury suffered by the Tanjangcos. The Court also upheld the CA’s decision to increase the monthly rental for the encroached property, emphasizing that it was reasonable given that the Tanjangcos had been deprived of their property for an extended period. The Supreme Court thus affirmed the CA’s decision, holding Corinthian liable for a portion of the damages.

FAQs

What was the key issue in this case?	The central issue was whether Corinthian Gardens Association was negligent in approving the building plans of the Cuasos, leading to an encroachment on the Tanjangcos’ property. The court examined the association’s duty of care and the extent of its liability for damages resulting from negligent approval.
What is a quasi-delict, according to the Civil Code?	A quasi-delict, as defined in Article 2176 of the Civil Code, is an act or omission that causes damage to another, where there is fault or negligence, and no pre-existing contractual relation between the parties. It is the basis for many tort claims in the Philippines.
What did the Court say about ‘table inspections’?	The Court rejected Corinthian’s argument that its approval was limited to a mere “table inspection,” stating that this would be putting a premium on negligence. The Court clarified that approving plans entails responsibility for ensuring compliance, beyond just a superficial review.
Why was the builder’s bond important in this case?	The builder’s bond was significant because the Court held that Corinthian could not benefit from requiring the bond while simultaneously disclaiming any responsibility for the construction’s compliance. By requiring the bond, Corinthian assumed a degree of oversight and accountability.
What is the standard of care for negligence?	The standard of care for negligence is the degree of care that a reasonably prudent person would exercise under similar circumstances. It involves assessing whether the defendant acted as a person of ordinary intelligence and prudence would have acted.
Can homeowner associations be held liable for negligence?	Yes, homeowner associations can be held liable for negligence if they fail to exercise the necessary diligence in fulfilling their responsibilities, such as approving building plans and conducting inspections. This liability arises from their duty to protect the interests of all residents.
What factors did the court consider in determining the rental value?	The court considered the fact that the Tanjangcos had been deprived of possession and use of their property for an extended period. They also considered the location and value of the property.
Did the Cuasos’ failure to appeal affect the outcome?	Yes, the Cuasos’ failure to appeal the CA decision meant that the ruling against them became final and executory. This prevented them from seeking affirmative relief from the Supreme Court and accepting the CA ruling.

This case serves as a reminder to homeowner associations of their responsibilities in ensuring compliance with building regulations and protecting the property rights of all residents. The decision underscores the need for due diligence in approving building plans and conducting inspections, as negligence in these areas can lead to significant liability. By setting this precedent, the Supreme Court has reinforced the importance of accountability and oversight in subdivision construction.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: Corinthian Gardens Association, Inc. v. Spouses Tanjangco, G.R. No. 160795, June 27, 2008