G.R. No. 180808, August 15, 2018 - SPOUSES ABRAHAM AND MELCHORA ERMINO, Petitioners, v. GOLDEN VILLAGE HOMEOWNERS ASSOCIATION, INC., REPRESENTED BY LETICIA* C. INUKAI, Respondent.

Before the Court is a Petition for Review on Certiorari¹ (Petition) under Rule 45 of the Rules of Court filed by petitioners, Spouses Abraham and Melchora Ermino (Spouses Ermino) assailing the Decision² dated October 9, 2007 of the Court of Appeals (CA) in CA-G.R. CV No. 00044. The CA modified the Decision³ dated December 30, 2003 of the Regional Trial Court, Branch 24, Cagayan de Oro City (RTC) which found both E.B. Villarosa & Partners Co., Ltd. (E.B. Villarosa) and Golden Village Homeowners Association, Inc. (GVHAI) liable for damages to Spouses Ermino by absolving GVHAI of any liability.

The Facts and Antecedent Proceedings

Spouses Ermino are residents of Alco Homes, a subdivision located beside Golden Village Subdivision (Golden Village) in Barangay Carmen, Cagayan de Oro City.

On days prior to August 12, 1995 and September 10, 1995, there was continuous heavy rain which caused a large volume of water to fall from the hilltop subdivision to the subdivisions below.⁴ The volume of water directly hit Spouses Ermino's house and damaged their fence, furniture, appliances and car.⁵

Spouses Ermino filed a complaint for damages against E.B. Villarosa, the developer of Hilltop City Subdivision, and GVHAI. The Hilltop City Subdivision is found at the upper portion of Alco Homes, making it a higher estate, while Golden Village is located beside Alco Homes, which makes both Alco Homes and Golden Village lower estates vis-a-vis Hilltop City Subdivision.

Spouses Ermino blamed E.B. Villarosa for negligently failing to observe Department of Environment and Natural Resources rules and regulations and to provide retaining walls and other flood control devices which could have prevented the softening of the earth and consequent inundation.⁶ They likewise claimed that GVHAI committed a wrongful act in constructing the concrete fence which diverted the flow of water to Alco Homes, hence, making it equally liable to Spouses Ermino.⁷

Spouses Ermino prayed that E.B. Villarosa and GVHAI be made jointly and severally liable in the amount of P500,000.00 as actual damages, P400,000.00 as moral damages and P100,000.00 as exemplary damages.⁸ They likewise prayed for attorney's fees and litigation costs and expenses.⁹

E.B. Villarosa argued that the location of the house of Spouses Ermino is located at the lower portion of the Dagong Creek and is indeed flooded every time there is a heavy downpour, and that the damage was further aggravated by GVHAI's construction of the concrete fence.¹⁰ It contended, however, that the damage was due to a fortuitous event.¹¹ Meanwhile, GVHAI averred that the construction of the concrete fence was in the exercise of its proprietary rights and that it was done in order to prevent outsiders from using the steel grille from entering the subdivision.¹² It likewise asserted that they "should not be made inutile and lame-duck recipients of whatever waters and/or garbage" that come from Alco Homes.¹³ GVHAI attributed sole liability on E.B. Villarosa for having denuded Hilltop City Subdivision and for its failure to provide precautionary measures.

Ruling of the RTC

The RTC found E.B. Villarosa and GVHAI jointly and severally liable for the damages to Spouses Ermino's properties, thus:

WHEREFORE, premises considered, judgment is hereby rendered:

(a) Holding defendants E.B. Villarosa and Partners Co. Limited and/or Eliezer Villarosa and Golden Village Homeowners Association[,] Inc., liable for the damage caused to the house of plaintiffs. Consequently, they are hereby ordered to pay jointly and severally plaintiffs, the following sums:

1) P561,535.53 for the damage of the house including attorney[']s fee as listed in Exh. 1-3 and 1-4;
2) P7,664.53 for the damage of the car;
3) P400.00 consultation fee;
4) P1,028.00 for hospital bill;
5) P35.00; P37.50; P31.00 and P75.00 for charge tickets of Cagayan Capitol College;
6) P20,000.00 for litigation expenses;

(b) Dismissing the cross-claim of defendant E.B. Villarosa and Partners Co. Limited against Golden Village Homeowners Association, Inc. there being no evidence adduced by said defendant E.B. Villarosa and Partners Co. Limited and/or Eliezer Villarosa against Golden Village Homeowners Association, Inc. as it was declared to have waived presenting evidence in its favor;

(c) Dismissing the cross-claim of defendant Golden Village Homeowners Association[, Inc.] against Alco Homes there being no sufficient evidence adduced during trial against said Alco Homes;

(d) Ordering defendant Golden Village Homeowners Association, Inc. to change the gate between Alco Homes and Golden Village Subdivision from concrete cement to steel [grille] or if not, to make many holes in the concrete cement gate so that the water that will flow will not be blocked and will just pass; and

(e) Denying plaintiff’s prayer for moral and exemplary damages there being no sufficient evidence offered during trial.

SO ORDERED.¹⁴

The RTC held that the bulldozing by E.B. Villarosa of the proposed Hilltop City Subdivision made the soil soft that it could easily be carried by a flow of water and that if GVHAI did not change the steel grille gate to concrete fence between its subdivision and Alco Homes, the flow of water would have just passed by.¹⁵ Thus, both E.B. Villarosa and GVHAI were negligent and liable to Spouses Ermino.

Ruling of the CA

Only GVHAI appealed to the CA. Thus, the trial court's decision attained its finality as regards E.B. Villarosa.

The CA reversed the RTC's Decision and found no liability on the part of GVHAI. The CA held that indeed, GVHAI exercised its proprietary rights when it constructed the concrete fence and that it was also not negligent. The dispositive portion reads:

WHEREFORE, premises foregoing, the appeal is hereby GRANTED. Defendant-appellant Golden Village Homeowners Association is absolved of any liability to herein [plaintiffs]-appellees. The assailed decision is MODIFIED insofar as GVHAFs liability to [plaintiffs]-appellees is concerned.¹⁶

Issue

Whether the CA erred in ruling that GVHAI was not responsible for the damage to Spouses Ermino's properties.

The Court's Ruling

The Petition lacks merit.

Spouses Ermino impleaded GVHAI in their complaint for damages on the ground that the latter committed a wrongful act in replacing its steel grille gate with a concrete fence.¹⁷ Spouses Ermino asserted that had the steel grille gate been unchanged, the injury suffered by them would have been prevented.¹⁸ Spouses Ermino rely on Articles 20 and 21 of the Civil Code which state:

ARTICLE 20. Every person who, contrary to law, wilfully or negligently causes damage to another, shall indemnify the latter for the same.

ARTICLE 21. 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.

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.¹⁹ Records of the case reveal that while GVHAI replaced the steel grille gate with a concrete fence, the construction was not intended to obstruct whatever waters that may naturally flow from the higher estates.²⁰ The concrete fence was made to ward off undesirable elements from entering the subdivision.²¹ Thus, for purposes of Articles 20 and 21, the construction of the concrete fence is not contrary to any law, morals, good customs, or public policy.

There was also no negligence on the part of GVHAI. The test of negligence is stated in Picart v. Smith, Jr.:²²

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.²³

As correctly found by the CA, when GVHAI decided to construct the concrete fence, it could not have reasonably foreseen any harm that could occur to Spouses Ermino.²⁴ Any prudent person exercising reasonable care and caution could not have envisaged such an outcome from the mere exercise of a proprietary act.²⁵

Indeed, the act of replacing the steel grille gate with a concrete fence was within the legitimate exercise of GVHAI's proprietary rights over its property. The law recognizes in the owner the right to enjoy and dispose of a thing, without other limitations than those established by law.²⁶ Article 430 of the Civil Code provides that "(e)very 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."

Spouses Ermino likewise ascribe liability to GVHAI relying on Article 637 of the Civil Code and Article 50 of the Water Code, which state:

ARTICLE 637. 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. 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.

The responsibility imposed on lower estates to receive waters from higher estates is illustrated in the early case of Lunod v. Meneses,²⁷ thus:

The lands of Paraanan being the lower are subject to the easement of receiving and giving passage to the waters proceeding from the higher lands and the lake of Calalaran; this easement was not constituted by agreement between the interested parties; it is of a statutory nature, and the law has imposed it for the common public utility in view of the difference in the altitude of the lands in the barrio of Bambang.

Article 552 of the Civil Code provides:

"Lower estates must receive the waters which naturally and without the intervention of man descend from the higher estates, as well as the stone or earth which they carry with them.

Neither may the owner of the lower estate construct works preventing this easement, nor the one of the higher estate works increasing the burden."

Article 563 of the said code reads also:

"The establishment, extent, form, and conditions of the easements of waters to which this section refers shall be governed by the special law relating thereto in everything not provided for in this code."

The special law cited is the Law of Waters of August 3, 1866, article 111 of which, treating of natural easements relating to waters, provides:

"Lands situated at a lower level are subject to receive the waters that flow naturally, without the work of man, from the higher lands together with the stone or earth which they carry with them."

Hence, the owner of the lower lands [cannot] erect works that will impede or prevent such an easement or charge, constituted and imposed by the law upon his estate for the benefit of the higher lands belonging to different owners; neither can the latter do anything to increase or extend the easement.

According to the provisions of law above referred to, the defendant, Meneses, had no right to construct the works, nor the dam which blocks the passage, through his lands and the outlet to the Taliptip River, of the waters which flood the higher lands of the plaintiffs; and having done so, to the detriment of the easement charged on his estate, he has violated the law which protects and guarantees the respective rights and regulates the duties of the owners of the fields in Calalaran and Paraanan.

It is true that article 388 of said code authorizes every owner to enclose his estate by means of walls, ditches, fences or any other device, but his right is limited by the easement imposed upon his estate.

The defendant Meneses might have constructed the works necessary to make and maintain a fish pond within his own land, but he was always under the strict and necessary obligation to respect the statutory easement of waters charged upon his property, and had no right to close the passage and outlet of the waters flowing from the lands of the plaintiffs and the lake of Calalaran into the Taliptip River. He could not lawfully injure the owners of the dominant estates by obstructing the outlet to the Taliptip River of the waters flooding the upper lands belonging to the plaintiffs.²⁸

Alco Homes and Golden Village are lower in elevation than the Hilltop City Subdivision, and thus, are legally obliged to receive waters which naturally flow from the latter, as provided under Article 637 of the Civil Code and Article 50 of the Water Code. These provisions refer to easements relating to waters. An easement or servitude is "a real right constituted on another's property, corporeal and immovable, by virtue of which the owner of the same has to abstain from doing or to allow somebody else to do something on his property for the benefit of another thing or person."²⁹ The statutory basis of this right is Article 613 of the Civil Code which reads:

ARTICLE 613. An easement or servitude is an encumbrance imposed upon an immovable for the benefit of another immovable belonging to a different owner.

The immovable in favor of which the easement is established is called the dominant estate; that which is subject thereto, the servient estate.

In this regard, Hilltop City Subdivision, the immovable in favor of which the easement is established, is the dominant estate; while Alco Homes and Golden Village, those that are subject of the easement, are the servient estates. It must be noted, however, that there is a concomitant responsibility on the part of Hilltop City Subdivision not to make the obligation of these lower estates/servient estates more onerous. This obligation is enunciated under second paragraph of Article 637, as abovementioned, and Article 627 of the Civil Code:

ARTICLE 627. 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.

For this purpose he shall notify the owner of the servient estate, and shall choose the most convenient time and manner so as to cause the least inconvenience to the owner of the servient estate. (Emphasis supplied)

Based on the ocular inspection conducted by the RTC of the Hilltop City Subdivision, the area was bulldozed and the hills were flattened.³⁰ There were no retaining walls constructed to prevent the water from flowing down and the soil was soft.³¹ This flattening of the area due to bulldozing changed the course of water, which ultimately led to the passing of said water to the house of Spouses Ermino.³²

The case of Remman Enterprises, Inc. v. Court of Appeals,³³ applying Article 637 of the Civil Code and Article 50 of the Water Code, is instructive:

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.

As worded, the two (2) aforecited provisions impose a natural easement upon the lower estate to receive the waters which naturally and without the intervention of man descend from higher states. However, where the waters which flow from a higher state are those which are artificially collected in man-made lagoons, any damage occasioned thereby entitles the owner of the lower or servient estate to compensation.³⁴ (Emphasis supplied)

Thus, the bulldozing and construction works done by E.B. Villarosa, not to mention the denudation of the vegetation at the Hilltop City Subdivision, made Alco Homes and Golden Village's obligation, as lower estates, more burdensome than what the law contemplated. Lower estates are only obliged to receive water naturally flowing from higher estates and such should be free from any human intervention. In the instant case, what flowed from Hilltop City Subdivision was not water that naturally flowed from a higher estate. The bulldozing and flattening of the hills led to the softening of the soil that could then be easily carried by the current of water whenever it rained. Thus, Alco Homes and Golden Village are not anymore obligated to receive such waters and earth coming from Hilltop City Subdivision.

The Court also agrees with the CA's observation that the concrete fence cannot be considered as an impediment to Golden Village's obligation to receive the water, because if only naturally flowing water, without any human intervention, cascaded down from the Hilltop City Subdivision, the concrete fence would not pose as an obstruction to its flow.³⁵ In this regard, the closure of the steel grille gate was effected even before the construction made by E.B. Villarosa.³⁶

Therefore, it is ineluctably clear that E.B. Villarosa is responsible for the damage suffered by Spouses Ermino. E.B. Villarosa should have provided for the necessary measures such as retaining walls and drainage so that the large volume of water emanating from it would not unduly cause inconvenience, if not injury, to the lower estates. E.B. Villarosa's negligence is the proximate cause of the injury. Had it only exercised prudence, reasonable care and caution in the construction of Hilltop City Subdivision, then Spouses Ermino would not have experienced the injury that they suffered.

WHEREFORE, premises considered, the Petition is hereby DENIED. The Decision dated October 9, 2007 of the Court of Appeals in CA-G.R. CV No. 00044 is hereby AFFIRMED.

SO ORDERED.

Carpio, Acting C.J., (Chairperson), Perlas-Bernabe, A. Reyes, Jr., and J. Reyes, Jr., JJ., concur.

October 10, 2018

NOTICE OF JUDGMENT

Sir/Madam:

Please take notice that on August 15, 2018 a Decision, copy attached herewith, was rendered by the Supreme Court in the above-entitled case, the original of which was received by this Office on October 10, 2018 at 9:50 a.m.

Endnotes:

^* Also spelled as "Letecia" in some parts of the records.

¹Rollo, pp. 8-20, excluding Annexes.

² Id. at 59-74. Penned by Associate Justice Rodrigo F. Lim, Jr. and concurred in by Associate Justices Teresita Dy-Liacco Flores and Michael P. Elbinias.

³ Records, Vol. II, pp. 682-698. Penned by Presiding Judge Leonardo N. Demecillo.

⁴Rollo, p. 61.

⁵ Id.

⁶ Id. at 62.

⁷ Id.

⁸ Id.

⁹ Id.

¹⁰ Id. at 62-63.

¹¹ Id. at 63.

¹² Id.

¹³ Id.

¹⁴ Records, Vol. II, pp. 697-698.

¹⁵ Id. at 696.

¹⁶Rollo, p. 73.

¹⁷ Id. at 66.

¹⁸ Id.

¹⁹ABS-CBN Broadcasting Corp. v. Court of Appeals, 361 Phil. 499, 531 (1999).

²⁰Rollo, p. 66.

²¹ Id.

²² 37 Phil. 809 (1918).

²³ Id. at 813.

²⁴Rollo, p. 68.

²⁵ Id.

²⁶Spouses Custodio v. Court of Appeals, 323 Phil. 575, 587 (1996) citing Jovellanos, et al., v. Court of Appeals, et al., 285 Phil. 587, 596 (1992).

²⁷ 11 Phil. 128 (1908).

²⁸ Id. at 131-132.

²⁹Spouses Valdez v. Spouses Tabisula, 582 Phil. 328, 333-334 (2008) citing 3 Sanchez Roman 572.

³⁰ Records, Vol. II, p. 694.

³¹ Id.

³² Id. at 695.

³³ 386 Phil. 340 (2000).

³⁴ Id. at 348-349.

³⁵Rollo, p. 71.

³⁶ Records, Vol. II, p. 686.