PADCOM CONDOMINIUM VS. ORTIGAS CENTER ASSOCIATION INC.

G.R. No. 146807. May 9, 200

FACTS: Padcom Condominium Corporation (PADCOM) owns and manages the Padilla Office Condominium Building (PADCOM Building) located at Emerald Avenue, Ortigas Center, Pasig City. The land on which the building stands was originally acquired from the Ortigas &Company, Limited Partnership (OCLP), by Tierra Development Corporation (TDC) under a Deed of Sale. Among the terms and conditions in the deed of sale was the requirement that the transferee and its successor-in-interest must become members of an association for realty owners and long-term lessees in the area later known as the Ortigas Center. 

Subsequently, the said lot, together with improvements thereon, was conveyed by TDC in favor of PADCOM in a Deed of Transfer. In 1982, Ortigas Center Association, Inc. was organized to advance the interests and promote the general welfare of the real estate owners and long-term lessees of lots in the Ortigas Center. It sought the collection of membership dues per month from PADCOM. The corporate books showed that PADCOM owed the Association membership dues, interests and penalty charges from April 1983 to June 1993.

The letters exchanged between the parties through the years showed repeated demands for payment, requests for extensions of payment, and even a settlement scheme proposed by PADCOM in September 1990. In view of PADCOM’s failure and refusal to pay its arrears in monthly dues, including interests and penalties thereon, the Association filed a complaint for collection of sum of money before the Regional Trial Court of Pasig City, but the same was dismissed. On appeal, the Court of Appeals reversed and set aside the trial court’s dismissal. Hence, this petition.

ISSUE: Whether PADCOM can be compelled to join the association pursuant to the provision on automatic membership appearing as a condition in the Deed of Sale and the annotation thereof on Transfer Certificate of Title. 

HELD: Yes. It is undisputed that when the land in question was bought by PADCOM's predecessor-in-interest, TDC, from OCLP, the sale bound TDC to comply with paragraph (G) of the covenants, conditions and restrictions of the Deed of Sale. Evidently, it was agreed by the parties that dues shall be collected from an automatic member and such fees or assessments shall be a lien on the property.

Moreover, Article 1311 of the Civil Code provides that contracts take effect between the parties, their assigns and heirs. Since PADCOM is the successor-in-interest of TDC, it follows that the stipulation on automatic membership with the Association is also binding on the former.

FREEDOM OF ASSOCIATION

PADCOM’s contention that the automatic membership clause is a violation of its freedom of association. PADCOM was never forced to join the association. It could have avoided such membership by not buying the land from TDC. Nobody forced it to buy the land when it bought the building with the annotation of the condition or lien on the Certificate of Title thereof and accepted the Deed. PADCOM voluntarily agreed to be bound by and respect the condition, and thus to join the Association.

Q: Assuming that PADCOM did not see the annotation, will it still be bound thereby?

Yes. Under the Torrens system of registration, claims and liens of whatever character, except those mentioned by law, existing against the land binds the holder of the title and the whole world.