THIRD DIVISION

[G.R. No. 167702. March 20, 2009.]

LOURDES L. ERISTINGCOL,  petitioner, vs. COURT OF APPEALS and

RANDOLPH C. LIMJOCO,  respondents.

DECISION

NACHURA,  J  : p

This is a petition for review on certiorari under Rule 45 of the Rules of

Court which assails the Court of Appeals (CA) Decision 1 in CA-G.R. SP. No. 64642
dismissing Civil Case No. 99-297 before the Regional Trial Court (RTC) for lack of
jurisdiction. 
CHTAIc

The facts, as narrated by the CA, are simple.

[Petitioner Lourdes] Eristingcol is an owner of a residential lot in
Urdaneta Village (or "village"), Makati City and covered by Transfer Certificate
of Title No. 208586. On the other hand, [respondent Randolph] Limjoco,
[Lorenzo] Tan and [June] Vilvestre were the former president and chairman of
the board of governors (or "board"), construction committee chairman and
village manager of [Urdaneta Village Association Inc.] UVAI, respectively. UVAI
is an association of homeowners at Urdaneta Village.
[Eristingcol's] action [against UVAI, Limjoco, Tan and Vilvestre] is
founded on the allegations that in compliance with the National Building Code
and after UVAI's approval of her building plans and acceptance of the
construction bond and architect's fee, Eristingcol started constructing a house
on her lot with "concrete canopy directly above the main door and highway";
that for alleged violation of its Construction Rules and Regulations (or "CRR")
on "Set Back Line" vis-a-vis the canopy easement, UVAI imposed on her a
penalty of P400,000.00 and barred her workers and contractors from entering
the village and working on her property; that the CRR, particularly on "Set Back
Line", is contrary to law; and that the penalty is unwarranted and excessive.
On February 9, 1999, or a day after the filing of the complaint, the
parties reached a temporary settlement whereby UVAI, Limjoco, Tan and
Vilvestre executed an undertaking which allowed Eristingcol's workers,
contractors and suppliers to leave and enter the village, subject only to normal
security regulations of UVAI.
On February 26, 1999, UVAI, Limjoco, Tan and Vilvestre filed a motion to
dismiss on ground of lack of jurisdiction over the subject matter of the action.
They argued that it is the Home Insurance Guaranty Corporation (or
"HIGC") 2 which has jurisdiction over intra-corporate disputes involving
homeowners associations, pursuant to Exec. Order No. 535, Series of 1979, as
amended by Exec. Order No. 90, Series of 1986.
Opposing the motion, Eristingcol alleged, among others, that UVAI,
Limjoco, Tan and Vilvestre did not comply with the mandatory provisions of
Secs. 4 and 6, Rule 15 of the 1997 Rules of Civil Procedure and are estopped
from questioning the jurisdiction of the [RTC] after they voluntarily appeared
therein "and embraced its authority by agreeing to sign an Undertaking."
On May 20, 1999, Eristingcol filed an amended complaint by (i)
impleading Manuel Carmona (or "Carmona") and Rene Cristobal (or
"Cristobal"), UVAI's newly-elected president and chairman of the board and
newly-designated construction committee chairman, respectively, as additional
defendants and (ii) increasing her claim for moral damages against each
petitioner from P500,000.00 to P1,000,000.00.  cCSDaI

On May 25, 1999, Eristingcol filed a motion for production and

inspection of documents, which UVAI, Limjoco, Tan, Vilvestre, Carmona and
Cristobal opposed. The motion sought to compel [UVAI and its officers] to
produce the documents used by UVAI as basis for the imposition of the
P400,000.00 penalty on Eristingcol as well as letters and documents showing
that UVAI had informed the other homeowners of their violations of the CRR.
On May 26, 1999, the [RTC] issued an order which pertinently reads:
IN VIEW OF THE FOREGOING, for lack of merit, the defendants'
Motion to Dismiss is Denied, and plaintiff's motion to declare
defendants in default and for contempt are also Denied."
The [RTC] ratiocinated that [UVAI, Limjoco, Tan and Vilvestre] may not
assail its jurisdiction "after they voluntarily entered their appearance, sought
reliefs therein, and embraced its authority by agreeing to sign an undertaking
to desist from prohibiting (Eristingcol's) workers from entering the village." In
so ruling, it applied the doctrine enunciated in  Tijam  v. Sibonghanoy.
On June 7, 1999, Eristingcol filed a motion reiterating her earlier motion
for production and inspection of documents.
On June 8, 1999, [UVAI, Limjoco, Tan and Vilvestre] moved for partial
reconsideration of the order dated May 26, 1999. Eristingcol opposed the
motion.
On March 24, 2001, the [RTC] issued an order granting Eristingcol's
motion for production and inspection of documents, while on March 26, 2001,
it issued an order denying [UVAI's, Limjoco's, Tan's and Vilvestre's] motion for
partial reconsideration.
On May 10, 2001, [UVAI, Limjoco, Tan and Vilvestre] elevated the dispute
before [the CA] via [a] petition for certiorari alleging that the [RTC] acted
 without jurisdiction in issuing the orders of May 26, 1999 and March 24 and 26,
2001. 3

The CA issued the herein assailed Decision reversing the RTC Order 4 and
dismissing Eristingcol's complaint for lack of jurisdiction.
Hence, this appeal positing a sole issue for our resolution:
Whether it is the RTC or the Housing and Land Use Regulatory Board
(HLURB) which has jurisdiction over the subject matter of Eristingcol's
complaint. THCSAE

Before anything else, we note that the instant petition impleads only Limjoco
as private respondent. The rest of the defendants sued by Eristingcol before the
RTC, who then collectively filed the petition for certiorari before the CA assailing the
RTC's Order, were, curiously, not included as private respondents in this particular
petition.
Eristingcol explains that only respondent Limjoco was retained in the instant
petition as her discussions with UVAI and the other defendants revealed their lack
of participation in the work-stoppage order which was supposedly single-handedly
thought of and implemented by Limjoco.
The foregoing clarification notwithstanding, the rest of the defendants should
have been impleaded as respondents in this petition considering that the
complaint before the RTC, where the petition before the CA and the instant petition
originated, has yet to be amended. Furthermore, the present petition maintains
that it was serious error for the CA to have ruled that the RTC did not have
jurisdiction over a complaint for declaration of nullity of UVAI's Construction Rules.
Clearly, UVAI and the rest of the defendants should have been impleaded herein as
respondents.
Section 4 (a), Rule 45 of the Rules of Court, requires that the petition shall
"state the full name of the appealing party as petitioner and the adverse party as
respondent, without impleading the lower courts or judges thereof either as
petitioners or respondents." As the losing party in defendants' petition
for certiorari before the CA, Eristingcol should have impleaded all petitioners, the
winning and adverse parties therein.
On this score alone, the present petition could have been dismissed
outright. 5 However, to settle the issue of jurisdiction, we have opted to dispose of
this case on the merits.
Despite her having dropped UVAI, Lorenzo Tan (Tan) and June Vilvestre
(Vilvestre) from this suit, Eristingcol insists that her complaint against UVAI and the
defendants was properly filed before the RTC as it prays for the declaration of
nullity of UVAI's Construction Rules and asks that damages be paid by Limjoco and
the other UVAI officers who had inflicted injury upon her. Eristingcol asseverates
that since the case before the RTC is one for declaration of nullity, the nature of the
question that is the subject of controversy, not just the status or relationship of the
parties, should determine which body has jurisdiction. In any event, Eristingcol
submits that the RTC's jurisdiction over the case was foreclosed by the prayer of
UVAI and its officers, including Limjoco, for affirmative relief from that court.
Well-settled in jurisprudence is the rule that in determining which body has
jurisdiction over a case, we should consider not only the status or relationship of
the parties, but also the nature of the question that is the subject of their
controversy. 6 To determine the nature of an action and which court has
jurisdiction, courts must look at the averments of the complaint or petition and the
essence of the relief prayed for. 7 Thus, we examine the pertinent allegations in
Eristingcol's complaint, specifically her amended complaint, to wit:  ScCIaA

Allegations Common to All Causes of Action

3. In 1958 and upon its incorporation, [UVAI] adopted a set of By-laws
and Rules and Regulations, . . . . Item 5 of [UVAI's] Construction Rules
pertinently provides:
"Set back line: All Buildings, including garage servants' quarters, or
parts thereof (covered terraces, portes cocheres) must be constructed at
a distance of not less than three (3) meters from the boundary fronting a
street and not less than four (4) meters fronting the drainage creek or
underground culvert and two (2) meters from other boundaries of a lot.
Distance will be measured from the vertical projection of the roof
nearest the property line. Completely open and unroofed terraces are
not included in these restrictions."
Suffice it to state that there is nothing in the same By-laws which deals
explicitly with canopies or marquees which extend outward from the main
building.
4. [Eristingcol] has been a resident of Urdaneta Village for eleven (11)
years. In February 1997, she purchased a parcel of land in the Village, located
at the corner of Urdaneta Avenue and Cerrada Street. . . . .
5. In considering the design for the house (the "Cerrada property") which
she intended to construct on Cerrada Street, [Eristingcol] referred to the
National Building Code of the Philippines. After assuring herself that the said
law does not expressly provide any restrictions in respect thereof, and after
noting that other houses owned by prominent families had similar structures
without being cited by the Village's Construction Committee, [Eristingcol]
decided that the Cerrada property would have a concrete canopy directly
above the main door and driveway.
6. In compliance with [UVAI's] rules, [Eristingcol] submitted to [UVAI]
copies of her building plans in respect of the Cerrada property and the building
plans were duly approved by [UVAI]. . . . .
 7. [Eristingcol] submitted and/or paid the "cash bond/construction bond
deposit and architect's inspection fee" of P200,000.00 and the architect's
inspection fee of P500.00 as required under Construction Rules . . . .
8. In the latter part of 1997, and while the construction of the Cerrada
property was ongoing, [Eristingcol] received a notice from [UVAI], charging her
with alleged violations of the Construction Rules, i.e., those on the height
restriction of eleven (11.0) meters, and the canopy extension into the
easement. On 22nd January 1998, [Eristingcol] (through her representatives)
met with, among others, defendant Limjoco. In said meeting, and after
deliberation on the definition of the phrase "original ground elevation" as a
reference point, [Eristingcol's] representatives agreed to revise the building
plan by removing what was intended to be a parapet or roof railing, and
thereby reduce the height of the structure by 40 centimeters, which proposal
was accepted by the Board through defendant Limjoco, Gov. Catalino Macaraig
Jr. ([UVAI's] Construction Committee chairman), and the Village's Architect.
However, the issue of the alleged violation in respect of the canopy/extension
remained unresolved.  HTcADC

xxx xxx xxx

9. In compliance with the agreement reached at the 22nd January 1998
meeting, [Eristingcol] caused the revision of her building plans such that, as it
now stands, the Cerrada property has a vertical height of 10.96 meters and,
thus, was within the Village's allowed maximum height of 11 meters.
10. Sometime in June 1998, [Eristingcol] was surprised to receive
another letter from [UVAI], this time from the Construction Committee
chairman (defendant Tan), again calling her attention to alleged violations of
the Construction Rules. On 15th June 1998, [UVAI] barred [Eristingcol's]
construction workers from entering the Village. Thus, [Eristingcol's]
Construction Manager (Mr. Jaime M. Hidalgo) wrote defendant Tan to explain
her position, and attached photographs of similar "violations" by other
property owners which have not merited the same scrutiny and sanction from
[UVAI].
xxx xxx xxx
11. On 26th October 1998, and for reasons known only to him,
defendant Vilvestre sent a letter to Mr. Geronimo delos Reyes, demanding for
an "idea of how [Mr. delos Reyes] can demonstrate in concrete terms [his]
good faith as a quid pro quo for compromise to" [UVAI's] continued insistence
that [Eristingcol] had violated [UVAI's] Construction Rules. . . . .
xxx xxx xxx
12. [Eristingcol] through Mr. Hidalgo sent a letter dated 24th November
1998 to defendant Tan, copies of which were furnished defendants Limjoco,
Vilvestre and the Board, reiterating that, among others: (i) the alleged height
restriction violation is untrue, since the Cerrada property now has a height
within the limits imposed by [UVAI]; and (ii) the demand to reduce the canopy
by ninety (90) centimeters is without basis, in light of the existence of thirty-five
(35) similar "violations" of the same nature by other homeowners. [Eristingcol]
through Mr. Hidalgo further mentioned that she had done nothing to deserve
the crude and coercive Village letters and the Board's threats of work
stoppage, and she cited instances when she dealt with [UVAI] and her fellow
homeowners in good faith and goodwill such as in 1997, when she very
discreetly spent substantial amounts to landscape the entire Village Park,
concrete the Park track oval which was being used as a jogging path, and
donate to the Association molave benches used as Park benches.
xxx xxx xxx
13. On the same date (24th November 1998), defendant Vilvestre sent
another letter addressed to [Eristingcol's] construction manager Hidalgo, again
threatening to enjoin all construction activity on the Cerrada property as well
as ban entry of all workers and construction deliveries effective 1st December
1998 unless Mr. delos Reyes met with defendants. . . . .  acCDSH

xxx xxx xxx

14. On 2nd December 1998, [Eristingcol's] representatives met with
defendants Limjoco, Tan, and Vilvestre. During that meeting, defendants were
shown copies of the architectural plans for the Cerrada property. [Eristingcol's]
representatives agreed to allow [UVAI's] Construction Committee's architect to
validate the measurements given. However, on the issue of the canopy
extension, the defendants informed [Eristingcol's] representatives that the
Board would impose a penalty of Four Hundred Thousand Pesos (P400,000.00)
for violation of [UVAI's] "set back" or easement rule. Defendants cited the
Board's imposition of similar fines to previous homeowners who had violated
the same rule, and they undertook to furnish [Eristingcol] with a list of past
penalties imposed and paid by homeowners found by the Board to have
violated the Village's "set back" provision.
15. On 22nd December 1998, defendant Vilvestre sent [Eristingcol] a
letter dated 18th December 1998 formally imposing a penalty of P400,000.00
for the "canopy easement violation". . . . .
16. On 29th December 1998, . . ., Vilvestre sent a letter to [Eristingcol],
stating that "as far as [his] administration is concerned, there has been no past
penalties executed by [UVAI], similar to the one we are presently demanding
on your on going construction. . . .
17. On 4th January 1999, [Eristingcol's] representative sent a letter to the
Board, asking for a reconsideration of the imposition of the P400,000.00
penalty on the ground that the same is unwarranted and excessive. On 6th
January 1999, [Eristingcol] herself sent a letter to the Board, expounding on the
reasons for opposing the Board's action. On 18th January 1999, [Eristingcol]
sent another letter in compliance with defendants' request for a breakdown of
her expenditures in respect of her donations relative to the Village park.
 18. On 3rd February 1999, [Eristingcol] through her lawyers sent
defendants a letter, requesting that her letters of 4th and 6th January 1999 be
acted upon.
19. On 4th February 1999, . . ., defendant Limjoco gave a verbal order to
[UVAI's] guards to bar the entry of workers working on the Cerrada property.
20. In the morning of 5th February 1999, defendants physically barred
[Eristingcol's] workers and contractors from entering the Village and working at
the Cerrada property. 8

Eristingcol then lists the following causes of action:  ADEHTS

1. Item 5 of UVAI's Construction Rules constitutes an illegal and

unwarranted intrusion upon Eristingcol's proprietary rights as it
imposes a set-back or horizontal easement of 3.0 meters from the
property line greater than the specification in Section 1005 (b) of
the Building Code that "the horizontal clearance between the
outermost edge of the marquee and the curb line shall be not less
than 300 millimeters." As such, Eristingcol prays for the declaration
of nullity of this provision in UVAI's Construction Rules insofar as
she is concerned.
2. UVAI's imposition of a P400,000.00 penalty on Eristingcol has no
factual basis, is arbitrary, whimsical and capricious as rampant
violations of the set-back rule by other homeowners in the Village
were not penalized by UVAI. Eristingcol prays to put a stop to
defendants' arbitrary exercise of power pursuant to UVAI's by-
laws.
3. Absent any factual or legal bases for the imposition of a P400,000.00
penalty, defendants and all persons working under their control
should be permanently barred or restrained from imposing and/or
enforcing any penalty upon Eristingcol for an alleged violation of
UVAI's Construction Rules, specifically the provision on set-back.
4. Defendants Limjoco, Tan, and Vilvestre, in violation of Article 19 of
the Civil Code, demonstrated bias against Eristingcol by zeroing in
on her alone and her supposed violation, while other
homeowners, who had likewise violated UVAI's Construction Rules,
were not cited or penalized therefor. Defendants' actuations were
in clear violation of their duty to give all homeowners, including
Eristingcol, their due.
5. Defendants' actuations have seriously affected Eristingcol's mental
disposition and have caused her to suffer sleepless nights, mental
anguish and serious anxiety. Eristingcol's reputation has likewise
been besmirched by UVAI's and defendants' arbitrary charge that
 she had violated UVAI's Construction Rules. In this regard,
individual defendants should each pay Eristingcol moral damages
in the amount of P1,000,000.00.
6. Lastly, defendants should pay Eristingcol P1,000,000.00 * for litigation
expenses she incurred in instituting this suit and for attorney's
fees.
At the outset, we note that the relationship between the parties is not in
dispute and is, in fact, admitted by Eristingcol in her complaint. Nonetheless,
Eristingcol is adamant that the subject matter of her complaint is properly
cognizable by the regular courts and need not be filed before a specialized body or
commission.  DIcTEC

Eristingcol's contention is wrong.

Ostensibly, Eristingcol's complaint, designated as one for declaration of
nullity, falls within the regular courts' jurisdiction. However, we have, on more than
one occasion, held that the caption of the complaint is not determinative of the
nature of the action. 9
A scrutiny of the allegations contained in Eristingcol's complaint reveals that
the nature of the question subject of this controversy only superficially delves into
the validity of UVAI's Construction Rules. The complaint actually goes into the
proper interpretation and application of UVAI's by-laws, specifically its construction
rules. Essentially, the conflict between the parties arose as Eristingcol, admittedly a
member of UVAI, now wishes to be exempt from the application of the canopy
requirement set forth in UVAI's Construction Rules. Significantly, Eristingcol does
not assail the height restriction of UVAI's Construction Rules, as she has readily
complied therewith.
Distinctly in point is China Banking Corp. v. Court of Appeals, 10 which upheld
the jurisdiction of the Securities and Exchange Commission (SEC) over the suit and
recognized its special competence to interpret and apply Valley Golf and Country
Club, Inc.'s (VGCCI's) by-laws. We ruled, thus:
Applying the foregoing principles in the case at bar, to ascertain which
tribunal has jurisdiction we have to determine therefore whether or not
petitioner is a stockholder of VGCCI and whether or not the nature of the
controversy between petitioner and private respondent corporation is intra-
corporate.
As to the first query, there is no question that the purchase of the
subject share or membership certificate at public auction by petitioner (and
the issuance to it of the corresponding Certificate of Sale) transferred
ownership of the same to the latter and thus entitled petitioner to have the
said share registered in its name as a member of VGCCI. . . . .
By virtue of the aforementioned sale, petitioner became a bona
fide stockholder of VGCCI and, therefore, the conflict that arose between
 petitioner and VGCCI aptly exemplifies an intra-corporate controversy between
a corporation and its stockholder under Sec. 5(b) of P.D. 902-A.
An important consideration, moreover, is the nature of the controversy
between petitioner and private respondent corporation. VGCCI claims a prior
right over the subject share anchored mainly on Sec. 3, Art. VIII of its by-laws
which provides that "after a member shall have been posted as delinquent, the
Board may order his/her/its share sold to satisfy the claims of the Club. . ." It is
pursuant to this provision that VGCCI also sold the subject share at public
auction, of which it was the highest bidder. VGCCI caps its argument by
asserting that its corporate by-laws should prevail. The bone of contention,
thus, is the proper interpretation and application of VGCCI's aforequoted by-
laws, a subject which irrefutably calls for the special competence of the SEC.  TADCSE

We reiterate herein the sound policy enunciated by the Court in Abejo v.

De la Cruz:
6. In the fifties, the Court taking cognizance of the move to vest
jurisdiction in administrative commissions and boards the power to
resolve specialized disputes in the field of labor (as in corporations,
public transportation and public utilities) ruled that Congress in
requiring the Industrial Court's intervention in the resolution of labor-
management controversies likely to cause strikes or lockouts meant
such jurisdiction to be exclusive, although it did not so expressly state in
the law. The Court held that under the "sense-making and expeditious
doctrine of primary jurisdiction . . . the courts cannot or will not
determine a controversy involving a question which is within the
jurisdiction of an administrative tribunal, where the question demands
the exercise of sound administrative discretion requiring the special
knowledge, experience, and services of the administrative tribunal to
determine technical and intricate matters of fact, and a uniformity of ruling
is essential to comply with the purposes of the regulatory statute
administered.
xxx xxx xxx
In this case, the need for the SEC's technical expertise cannot be
over-emphasized involving as it does the meticulous analysis and correct
interpretation of a corporation's by-laws as well as the applicable
provisions of the Corporation Code in order to determine the validity of
VGCCI's claims. The SEC, therefore, took proper cognizance of the instant
case. 11

Likewise in point is our illuminating ruling in  Sta. Clara Homeowners'

Association v. Sps. Gaston, 12 although it ultimately held that the question of subject
matter jurisdiction over the complaint of respondent-spouses Gaston for
declaration of nullity of a board resolution issued by Sta. Clara Homeowners'
Association (SCHA) was vested in the regular courts. In Sta. Clara, the main issue
raised by SCHA reads: "Whether [the CA] erred in upholding the jurisdiction of the
[RTC], 'to declare as null and void the resolution of the Board of SCHA, decreeing
that only members [in] good standing of the said association were to be issued
stickers for use in their vehicles.'" In holding that the regular courts had jurisdiction
over respondent-spouses Gaston's complaint for declaration of nullity, we stressed
the absence of relationship and the consequent lack of privity of contract between
the parties, thus:  HDacIT

Are [Respondent-Spouses Gaston] SCHA Members?

In order to determine if the HIGC has jurisdiction over the dispute, it is
necessary to resolve preliminarily — on the basis of the allegations in the
Complaint — whether [respondent-spouses Gaston] are members of the
SCHA.
[SCHA] contend[s] that because the Complaint arose from intra-
corporate relations between the SCHA and its members, the HIGC therefore
has jurisdiction over the dispute. To support their contention that [respondent-
spouses Gaston] are members of the association, [SCHA] cite[s] the SCHA's
Articles of Incorporation and By-laws which provide that all landowners of the
Sta. Clara Subdivision are automatically members of the SCHA.
We are not persuaded. The constitutionally guaranteed freedom of
association includes the freedom not to associate. The right to choose with
whom one will associate oneself is the very foundation and essence of that
partnership. It should be noted that the provision guarantees the right to form
an association. It does not include the right to compel others to form or join
one.
More to the point, [respondent-spouses Gaston] cannot be compelled to
become members of the SCHA by the simple expedient of including them in its
Articles of Incorporation and By-laws without their express or implied
consent. . . . . In the present case, however, other than the said Articles of
Incorporation and By-laws, there is no showing that [respondent-spouses
Gaston] have agreed to be SCHA members.
xxx xxx xxx
No privity of Contract
Clearly then, no privity of contract exists between [SCHA] and
[respondent-spouses Gaston]. As a general rule, a contract is a meeting of
minds between two persons. The Civil Code upholds the spirit over the form;
thus, it deems an agreement to exist, provided the essential requisites are
present. . . . . From the moment there is a meeting of minds between the
parties, it is perfected.
As already adverted to, there are cases in which a party who enters into
a contract of sale is also bound by a lien annotated on the certificate of title.
We recognized this in  Bel Air Village Association, Inc. v. Dionisio, in which we
ruled: 
aACHDS
 There is no dispute that Transfer Certificate of Title No. 81136
covering the subject parcel of land issued in the name of the petitioner
contains an annotation to the effect that the lot owner becomes an
automatic member of the respondent Bel-Air Association and must
abide by such rules and regulations laid down by the Association in the
interest of the sanitation, security and the general welfare of the
community. It is likewise not disputed that the provision on automatic
membership was expressly annotated on the petitioner's Transfer
Certificate of Title and on the title of his predecessor-in-interest.
The question, therefore, boils down to whether or not the
petitioner is bound by such annotation.
Section 39 of Art. 496 (The Land Registration Act) states:
Sec. 39. Every person receiving a certificate of title in pursuance of
a decree of registration, and every subsequent purchaser of registered land
who takes a certificate of title for value in good faith shall hold the same free
of all encumbrances except those noted on said certificate . . . . (Italics
supplied)
The above ruling, however, does not apply to the case at bar. When
[respondent-spouses Gaston] purchased their property in 1974 and obtained
Transfer Certificates of Title Nos. T-126542 and T-127462 for Lots 11 and 12 of
Block 37 along San Jose Avenue in Sta. Clara Subdivision, there was no
annotation showing their automatic membership in the SCHA. Thus, no privity
of contract arising from the title certificate exists between [SCHA] and
[respondent-spouses Gaston].
Further, the records are bereft of any evidence that would indicate that
private respondents intended to become members of the SCHA. Prior to the
implementation of the aforesaid Resolution, they and the other homeowners
who were not members of the association were issued non-member gate pass
stickers for their vehicles. This fact has not been disputed by [SCHA]. Thus, the
SCHA recognized that there were subdivision landowners who were not
members thereof, notwithstanding the provisions of its Articles of
Incorporation and By-laws.  ACETID

Jurisdiction Determined by Allegations in the Complaint

It is a settled rule that jurisdiction over the subject matter is determined
by the allegations in the complaint. Jurisdiction is not affected by the pleas or
the theories set up by the defendant in an answer or a motion to dismiss.
Otherwise, jurisdiction would become dependent almost entirely upon the
whims of the defendant.
The Complaint does not allege that [respondent-spouses Gaston] are
members of the SCHA. In point of fact, they deny such membership. Thus, the
HIGC has no jurisdiction over the dispute. 13
 In stark contrast, the relationship between the parties in the instant case is
well-established. Given this admitted relationship, the privity of contract between
UVAI and Eristingcol is palpable, despite the latter's deft phraseology of its primary
cause of action as a declaration of nullity of UVAI's Construction Rules. In short, the
crux of Eristingcol's complaint is UVAI's supposed arbitrary implementation of its
construction rules against Eristingcol, a member thereof.
Moreover, as in Sta. Clara (had respondent-spouses Gaston been members of
SCHA), the controversy which arose between the parties in this case partook of the
nature of an intra-corporate dispute. Executive Order (E.O.) No. 535, 14 which
amended Republic Act No. 580 creating the HIGC, transferred to the HIGC the
regulatory and administrative functions over homeowners' associations originally
vested with the SEC. Section 2 of E.O. No. 535 provides in pertinent part:
2. In addition to the powers and functions vested under the Home
Financing Act, the Corporation, shall have among others, the following
additional powers:
(a) . . .; and exercise all the powers, authorities and responsibilities that
are vested on the Securities and Exchange Commission with respect to home
owners association, the provision of Act 1459, as amended by P.D. 902-A, to
the contrary notwithstanding;
(b) To regulate and supervise the activities and operations of all
houseowners association registered in accordance therewith.

By virtue thereof, the HIGC likewise assumed the SEC's original and exclusive
jurisdiction to hear and decide cases involving controversies arising from intra-
corporate or partnership relations. 15 Thereafter, with the advent of Republic Act
No. 8763, the foregoing powers and responsibilities vested in the HIGC, with
respect to homeowners' associations, were transferred to the HLURB.
As regards the defendants' supposed embrace of the RTC's jurisdiction by
appearing thereat and undertaking to desist from prohibiting Eristingcol's workers
from entering the village, suffice it to state that the invocation of the doctrine
in Tijam, et al. v. Sibonghanoy, et al. 16 is quite a long stretch. 
ATcEDS

The factual milieu obtaining in  Tijam  and in the case at bench are worlds
apart. As found by the CA, defendants' appearance before the RTC was pursuant
to, and in compliance with, a subpoena issued by that court in connection with
Eristingcol's application for a Temporary Restraining Order (TRO). On defendants'
supposed agreement to sign the Undertaking allowing Eristingcol's workers,
contractors, and suppliers to enter and exit the village, this temporary settlement
cannot be equated with full acceptance of the RTC's authority, as what actually
transpired in Tijam.
The landmark case of Tijam is, in fact, only an exception to the general rule
that an objection to the court's jurisdiction over a case may be raised at any stage
of the proceedings, as the lack of jurisdiction affects the very authority of the court
to take cognizance of a case. 17 In that case, the Surety filed a Motion to Dismiss
before the CA, raising the question of lack of jurisdiction for the first time — fifteen
years after the action was commenced in the Court of First Instance (CFI) of Cebu.
Indeed, in several stages of the proceedings in the CFI, as well as in the CA, the
Surety invoked the jurisdiction of said courts to obtain affirmative relief, and even
submitted its case for a final adjudication on the merits. Consequently, it was
barred by laches from invoking the CFI's lack of jurisdiction.
To further highlight the distinction in this case, the TRO hearing was held on
February 9, 1999, a day after the filing of the complaint. On even date, the parties
reached a temporary settlement reflected in the Undertaking. Fifteen days
thereafter, defendants, including Limjoco, filed a Motion to Dismiss. Certainly, this
successive and continuous chain of events cannot be characterized as laches as
would bar defendants from questioning the RTC's jurisdiction.
In fine, based on the allegations contained in Eristingcol's complaint, it is the
HLURB, not the RTC, which has jurisdiction over this case.
WHEREFORE, premises considered, the petition is DENIED. The Decision of
the Court of Appeals in CA-G.R. SP. No. 64642 is hereby AFFIRMED. Costs against
petitioner.
SO ORDERED.
Ynares-Santiago, Austria-Martinez, Tinga * and Peralta, JJ., concur.
 

Footnotes

*Additional member in lieu of Associate Justice Minita V. Chico-Nazario per Special Order
No. 590 dated March 17, 2009.
1.Penned by Associate Justice Edgardo P. Cruz, with Associate Justices Ruben T. Reyes (now
a retired member of this Court) and Noel G. Tijam, concurring; rollo, pp. 33-40. TSacCH

2.Transferred to the Housing and Land Use Regulatory Board by virtue of Republic Act No.
8763.
3.Rollo, pp. 33-36.
4.Id. at 79-82.
5.See RULES OF COURT, Rule 45, Sec. 5.
6.Viray v. Court of Appeals , G.R. No. 92481, November 9, 1990, 191 SCRA 308, 323; Citibank v.
CA, 359 Phil. 719 (1998).
7.Id.
8.Rollo, pp. 65-69. (Citations omitted.)
9.Bokingo v. Court of Appeals, G.R. No. 161739, May 4, 2006, 489 SCRA 521, 530.
10.337 Phil. 223 (1997).
 11.Id. at 233-235. (Citations omitted, emphasis supplied.)
12.425 Phil. 221 (2002).
13.Id. at 234-238. (Citations omitted.)
14.Entitled "Amending the Charter of the Home Financing Commission, renaming it as
Home Financing Corporation, enlarging its powers, and for other purposes." 
TIHCcA

15.See  Presidential Decree 902-A, Sec. 5 (b).

16.131 Phil. 556 (1968).
17.Id. at 562.

  (Eristingcol v. Court of Appeals, G.R. No. 167702, [March 20, 2009], 601 PHIL 136-155)
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