[Digest] Ortigas vs. FEATI (1979)

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

[Digest] Bel-Air Association vs. Intermediate Appellate Court (1989)

BEL-AIR ASSOCIATION V. IAC (1989)

  Sarmiento, J.

STATEMENT OF THE CASE

Before the Court are six consolidated petitions, docketed as G.R. nos. 71169, 74376, 76394, 78182, 82281 and 60727. The first five petitions for a motion for reconsideration raise the issue of whether Jupiter Street is for the exclusive use of Bel-Air Village residents. Meanwhile, the last petition (G.R. 60727) raises the lone issue of whether or not the Mayor of Makati could have validly opened Jupiter and Orbit Streets to vehicular traffic.

Facts

·         Ayala Corporation (original owner of the property subsequently subdivided as Bel-Air Village) executed a Deed of Donation covering Jupiter and Orbit streets to Bel-Air Village Association (BAVA).

·         Respondents allege that upon instructions of the Mayor of Makati, studies were made by the on the feasibility of opening streets in Bel-Air Village calculated to alleviate traffic congestions along the public streets adjacent to Bel-Air Village.

o    Accordingly, it was deemed necessary by the Municipality of Makati in the interest of the general public to open to traffic several village streets including Jupiter and Orbit streets.

·         Respondent’s claim: BAVA had agreed to the opening of Bel-Air Village streets and that the opening was demanded by public necessity and in the exercise of police power.

·         Petitioner’s counter-argument: It has never agreed on the opening of Jupiter and Orbit streets. By virtue of its ownership of the streets, it should not be deprived without due process of law and without just compensation.

ISSUES/HOLDING

a.       W/N the Mayor of Makati could have validly opened Jupiter and Orbit streets? – YES

b.       If yes, what is the nature of the state power being invoked by the Mayor? – POLICE POWER

RATIO

a. BAVA cannot rightfully complain that the Mayor of Makati, in opening up Jupiter and Orbit streets, had acted arbitrarily.

• Citing Sangalang v. IAC, the Court held that Jupiter street lies as the boundary between Bel-Air Village and Ayala Corporation’s commercial section. Being considered as merely a boundary – and hence not part of Ayala’s real estate development projects – it cannot be said to have been for the exclusive benefit of Bel-Air Village residents.
• The very Deed of Donation executed by Ayala Corp. covering Jupiter and Orbit Streets, amongst others, effectively required both passageways open to the general public.

o    “…the property will be used as a street for the use of the members of the DONEE (BAVA), their families, personnel, guests, domestic help and under certain reasonable conditions and restrictions, by the general public…”

• As the Court asserted in Sangalang, the opening of Jupiter and Orbit streets was warranted by the demands of the common good, in terms of traffic decongestion and public convenience.

b. The act of the Mayor now challenged is in the concept of police power.

o    The demolition of the gates at Orbit and Jupiter streets does not amount to deprivation of property without due process of law or expropriation without just compensation – there is no taking of property involved.

o    Police power as the “state authority to enact legislation that may interfere with personal liberty or property in order to promote the general welfare.”

o    Even liberty itself, the greatest of all rights, is not unrestricted license to act accordingly to one’s will. It is subject to the far more overriding demands and requirements of the greater number.

o    Public welfare when clashing with the individual right to property should not be made to prevail through the state’s exercise of its police power.

o    The exercise of police power, however, may not be done arbitrarily or unreasonably. But the burden of showing that it is unjustified lies on the aggrieved party.

o    In the case at bar, BAVA has failed to show that the opening up of Orbit and Jupiter streets was unjustified or that the Mayor acted unreasonably.

o    The fact that the opening has led to the loss of privacy of BAVA residents is no argument against the Municipality’s effort to ease vehicular traffic in Makati. The duty of local executive is to take care of the needs of the greater number, in many cases at the expense, of the minority.

DISPOSITIVE: Motion for reconsideration by Bel-Air Village Association is DENIED with FINALITY. The petition in G.R. 60727 is GRANTED.