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Republic of the Philippines SUPREME COURT Manila THIRD DIVISION G.R. No.

134692 August 1, 2000

ELISEO FAJARDO, JR., and MARISSA FAJARDO, petitioners, vs. FREEDOM TO BUILD, INC., respondent. DECISION VITUG, J.: Freedom To Build, Incorporated, an owner-developer and seller of low-cost housing, sold to petitioner-spouses, a house and lot designated Lot No. 33, Block 14, of the De la Costa Homes in Barangka, Marikina, Metro Manila. The Contract to Sell executed between the parties, contained a Restrictive Covenant providing certain prohibitions, to wit:1 "Easements. For the good of the entire community, the homeowner must observe a two-meter easement in front. No structure of any kind (store, garage, bodega, etc.) may be built on the front easement. xxx xxx xxx

"Upward expansion. A second storey is not prohibited. But the second storey expansion must be placed above the back portion of the house and should not extend forward beyond the apex of the original building. xxx xxx xxx

"Front expansion: 2nd Storey: No unit may be extended in the front beyond the line as designed and implemented by the developer in the 60 sq. m. unit. In other words, the 2nd floor expansion, in front, is 6 meters back from the front property line and 4 meters back from the front wall of the house, just as provided in the 60 sq. m. units."2 The above restrictions were also contained in Transfer Certificate of Title No. N-115384 covering the lot issued in the name of petitioner-spouses. The controversy arose when petitioners, despite repeated warnings from respondent, extended the roof of their house to the property line and expanded the second floor of their house to a point directly above the original front wall.3 Respondent filed before the Regional Trial Court, National Capital Judicial Region, Branch 261, Pasig City, an action to demolish the unauthorized structures. After trial, judgment was rendered against petitioners; thus: "WHEREFORE, premises considered, defendant spouses Eliseo B. Fajardo, Jr., and Marissa F. Fajardo are hereby directed to immediately demolish and remove the extension of their expanded

housing unit that exceeds the limitations imposed by the Restrictive Covenant, otherwise the Branch Sheriff of this Court shall execute this decision at the expense of the defendants. "As to damages and attorney's fees, it appearing from the records of this case that no evidence to sustain the same was adduced by either of the parties, the Court deems it proper not to award any. "SO ORDERED."4 On appeal to it, the Court of Appeals affirmed the decision of the trial court. In their petition for review to this Court, the spouses contest the judgment of the courts below. Adjacent owners reportedly have no objection to the construction, and have even expressed interest in undertaking a similar expansion in their respective residences. Moreover, the couple's two children, a son and a daughter, might soon get married and then share, with their families, living quarters with petitioners. The latter also assail the personality of private respondent to question the construction which have effectively relinquished its ownership, right or interest over the subdivision upon the execution of the Deed of Absolute Sale in favor of the individual homeowners. Per the contract between Freedom to Build Incorporated and the De la Costa Low Income Project Homeowners' Association (hereinafter homeowners' association), petitioners aver, the enforcement of the prohibitions contained in the "Restrictive Covenant" originally residing on respondent is now lodged in the homeowners' association. Petitioners maintain that it is incumbent upon the homeowners' association, not on respondent, to enforce compliance with the provisions of the covenant. A perusal of the provisions of the covenant would show that the restrictions therein imposed were intended "For the protection and benefit of the De La Costa Low Income Housing Project, and of all the persons who may now, or hereafter become owners of any part of the project, and as part of the consideration for the conveyance of the housing unit, these restrictions are promulgated in order that; the intents and purposes for which the project was designed shall be upheld; to wit: subsequent duly approved sale and assignments of housing units shall be made only to low income families; a certain level of privacy shall be observed; a community spirit shall be fostered; and an undisturbed possession and occupancy at the homeowners shall be maintained."5 Restrictive covenants are not, strictly speaking, synonymous with easements. While it may be correct to state that restrictive covenants on the use of land or the location or character of buildings or other structures thereon may broadly be said to create easements or rights, it can also be contended that such covenants, being limitations on the manner in which one may use his own property,6 do not result in true easements,7 but a case of servitudes (burden), sometimes characterized to be negative easements or reciprocal negative easements. Negative easement is the most common easement created by covenant or agreement whose effect is to preclude the owner of the land from doing an act, which, if no easement existed, he would be entitled to do.8 Courts which generally view restrictive covenants with disfavor for being a restriction on the use of one's property, have, nevertheless, sustained them9 where the covenants are reasonable,10 not contrary to public policy,11 or to law,12 and not in restraint of trade.13 Subject to these limitations, courts enforce restrictions to the same extent that will lend judicial sanction to any other valid contractual relationship.14 In general, frontline restrictions on constructions have been held to be valid stipulations.15

The provisions in a restrictive covenant prescribing the type of the building to be erected are crafted not solely for the purpose of creating easements, generally of light and view, nor as a restriction as to the type of construction,16 but may also be aimed as a check on the subsequent uses of the building17 conformably with what the developer originally might have intended the stipulations to be. In its Memorandum, respondent states in arguing for the validity of the restrictive covenant that the "x x x restrictions are not without specific purpose. In a low cost-socialized housing, it is of public knowledge that owners-developers are constrained to build as many number of houses on a limited land area precisely to accommodate marginalized lot buyers, providing as much as possible the safety, aesthetic and decent living condition by controlling overcrowding. Such project has been designed to accommodate at least 100 families per hectare."18 There appears to be no cogent reasons for not upholding restrictive covenants aimed to promote aesthetics, health, and privacy or to prevent overcrowding. Viewed accordingly, the statement of petitioners that their immediate neighbors have not opposed the construction is unavailing to their cause, the subject restrictive covenant not being intended for the benefit of adjacent owners but to prescribe the uses of the building, i.e., to ensure, among other things, that the structures built on De la Costa Homes Subdivision would prevent overcrowding and promote privacy among subdivision dwellers. The argument then of petitioners that expansion is necessary in order to accommodate the individual families of their two children must fail for like reason. Nor can petitioners claim good faith; the restrictive covenants are explicitly written in the Contract To Sell and annotated at the back of the Transfer Certificate of Title. Petitioners raise the issue of the personality of respondent to enforce the provisions of the covenant. Broadly speaking, a suit for equitable enforcement of a restrictive covenant can only be made by one for whose benefit it is intended.19 It is not thus normally enforceable by one who has no right nor interest in the land for the benefit of which the restriction has been imposed.20 Thus, a developer of a subdivision can enforce restrictions, even as against remote grantees of lots, only if he retains part of the land.21 There would have been merit in the argument of petitioners - that respondent, having relinquished ownership of the subdivision to the homeowners, is precluded from claiming any right or interest on the same property - had not the homeowners' association, confirmed by its board of directors, allowed respondent to enforce the provisions of the restrictive covenant.
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Finally, petitioners argue that for lack of a specific provision, prescribing the penalty of demolition in the "Restrictive Covenant" in the event of a breach thereof, the prayer of respondent to demolish the structure should fail. This argument has no merit; Article 1168 of the New Civil Code states: "When the obligation consists in not doing and the obligor does what has been forbidden him, it shall be undone at his expense." This Court is not unaware of its ruling in Ayala Corporation vs. Ray Burton Development Corporation,22 which has merely adjudged the payment of damages in lieu of demolition. In the aforementioned case, however, the elaborate mathematical formula for the determination of compensatory damages which takes into account the current construction cost index during the immediately preceding 5 years based on the weighted average of wholesale price and wage indices of the National Census and Statistics Office and the Bureau of Labor Statistics is explicitly provided for in the Deed of Restrictions entered into by the parties. This unique and peculiar circumstance, among other strong justifications therein mentioned, is not extant in the case at bar. In sum, the Court holds that -

(1)....The provisions of the Restrictive Covenant are valid; (2)....Petitioners must be held to be bound thereby; and (3)....Since the extension constructed exceeds the floor area limits of the Restrictive Covenant, petitioner-spouses can be required to demolish the structure to the extent that it exceeds the prescribed floor area limits. WHEREFORE, the assailed decision, dated 13 July 1998, of the Court of Appeals in CA-G.R. CV No. 50085, sustaining that of the court a quo, is AFFIRMED. No costs. SO ORDERED. Melo, (Chairman), Panganiban, Purisima, and Gonzaga-Reyes, JJ., concur.


Restrictive Covenants: Apendix, Records, p. 11. Records, pp. 9-11.

By mutual agreement between the Homeowners Association and the developer, the restriction was relaxed from 4-meters to a 2-meter setback.

Records, p. 191. Memorandum for respondent, Rollo, pp. 62-63. Kutchinski vs. Thompson, 101 NJ Eq. 649, 138 A569. Moses vs. Hazen, 63 App DC 104, 69 F 2d 842, 98 ALR 386. Wilson vs. Owen (Mo) 261 SW2d 19. Firth vs. Marovich, 160 Cal 257, 116 P729. Townsend vs. Allen, 114 Cal App 2d 291, 250 P2d 292, 39 ALR 2d 1108. Fusha vs. Dacono Town Site Co. 60 Colo 315, 153 P226. Supra, Townsend. Whitney vs. Union R. Co. 11 Gray (Mass) 359.






Hartman vs. Wells, 257 III 167, 100 NE 500. In a notable number of cases, restrictions imposed on property conveyed were declared invalid for having contravened some constitutional or statutory provision, or where found to be of no benefit to anyone and a

serious interference in the proper development of the community (Harris vs. Pease, 135 Conn 535, 66 A2d 590, 10 ALR 2d 819) and where it amounted to a prohibition of the use of property. (Baker vs. Henderson, 137 Tex 266, 153 SW2d 465.)

Bagiano vs. Harrow, 247 Mich 481 226 NW 262. Hutchinson vs. Ulrich, 145 III 336, 34 NE 556. Id, See also Schwarzchild vs. Welborne 186 Va 1052, 45 SE 2d 152. Memorandum for Respondent, Rollo, p. 62. Aull vs. Kraft (Tex Civ App) 286 SW2d 460. Lillard vs. Jet Homes, Inc. (La App) 129 So2d 109) 19 ALR 2d 1281 No. 5. 294 SCRA 48.