ORTIGAS & CO.,
LIMITED PARTENRSHIP V. FEATI BANK AND TRUST CO. (1979)
Santos, J.
Facts:
·
Ortigas
& Co., Limited Partnership engaged in real estate business
developing and selling lots to the public particularly Highway Hills
subdivision along EDSA
·
March 4, 1952 – Augusto Padilla y Angeles
and Natividad Angeles entered into separate agreements of sale on installments
over Lots 5 and 6 Block 31, Highway Hills
·
July 19, 1962 – Augusto and Natividad
transferred their rights and interests in favor of Emma Chavez
o Transfer
contained the following restrictions and stipulations:
§ For
residential purposes only
§ All
buildings and improvements (except fences) should use strong building material,
have modern sanitary installations connected to the public sewer or own septic
tank and shall not be more than 2 meters from the boundary lines
·
Resolution 27 – Feb 4, 1960 –
reclassified the western part of EDSA (Shaw boulevard to Pasig River) as a
commercial and industrial zone
·
Such restrictions were annotated on the
TCTs
·
July 23, 1962 - Feati bank bought Lot 5
from Emma Chavez while lot 6 was purchased by Republic Flour Mills
·
May 5, 1963 – Feati Bank began laying foundation
and construction of a building for banking purposes on lots 5 and 6
·
Ortigas & Co. Demanded that they
comply with the annotated restrictions
·
Feati Bank refused arguing that it was
following the zoning regulations
·
Ortigas & Co. filed a case in the lower
courts which held that Resolution No. 27 was a valid exercise of police power
of the municipality hence the zoning is binding and takes precedence over the
annotations in the TCTs because “private interest should bow down to general
interest and welfare.”
·
March 2, 1965 – motion for
reconsideration by Ortigas & Co. which was denied on March 26, 1965
·
April 2, 1965 Ortigas filed notice of
appeal which was given due course on April 14, 1965 hence this case.
Issues:
WON Resolution No. 27 is a valid exercise
of police power
WON Resolution No. 27 can nullify or
supersede contractual obligations by Feati Bank and Trust Co.
Held:
YES it is a valid exercise police power.
YES it can nullify contractual obligations by Feati with
Ortigas & Co.
Ratio:
·
The validity of the resolution was never
assailed in the lower courts and can therefore not be raised for the first time
on appeal
o The
rule against flip flopping issues and arguments prevents deception in courts
o Ortigas
& Co. also did not dispute the factual findings of the lower court on the
validity of the resolution
·
Assuming arguendo it was properly raised
the resolution is still valid
o RA
2264 (Local Autonomy Act) Sec 3 empowers municipalities to adopt zoning and
subdivision ordinances or regulations for the municipality
o The
resolution is regulatory measure!
o RA
2264 Sec 12 à any fair and
reasonable doubt as to the existence of the power should be interpreted in
favor of the local government and it shall be presumed to exist à this gives more power to LGUs to promote
general welfare, economic conditions, social welfare and material progress in
their locality
·
The non-impairment clause of contracts is
not absolute since it must be reconciled with the legitimate exercise of police
power
o when
general welfare and private property rights clash, the former must prevail
through police powers of the state
·
Lots 5 and 6 front EDSA and has become
surrounded by industrial and commercial complexes
o Development
in the area has resulted in extreme noise and air pollution that is not conducive
to health, safety and welfare of the would-be residents à justifies the usage by Feati Bank of the
land for more reasonable purposes
Decision:
Affirmed
Dissenting:
Abad Santos, J.
·
Resolution 27 is valid because it has not
yet been struck down but it is not a legitimate exercise of police power
because its means (zoning) do not fit with its purpose of general welfare
·
Zoning the area as industrial and
commercial will contribute to chaos, frenzy, pollution, noise which suffocate
and cause the deterioration of the ecology à
Lowers quality of life for residents in Metro Manila
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