Facts:

The case involves petitioners Timoteo Baluyot, Jaime Benito, Benigno Eugenio, Rolando Gonzales, Fortunato Fulgencio, and the Cruz-na-Ligas Homesite Association, Inc., who are residents of Barangay Cruz-na-Ligas, Diliman, Quezon City. They filed a complaint for specific performance and damages against the University of the Philippines (UP) and the Quezon City government on March 13, 1992, which was later amended to include the latter as a defendant. The petitioners claimed that they and their ancestors had been in open, peaceful, and continuous possession of a parcel of riceland known as Sitio Libis for an extended period. They asserted that their claims had been recognized through various administrative proceedings, culminating in an endorsement from the Office of the President confirming their rights to the land.

The UP had previously agreed to donate approximately 15.8 hectares of land to the residents of Barangay Cruz-na-Ligas, but negotiations fell through due to deman...

Facts:

Parties and Nature of the Suit

• Petitioners: Timoteo Baluyot, Jaime Benito, Benigno Eugenio, Rolando Gonzales, and Fortunato Fulgencio, residents of Barangay Cruz-na-Ligas (also referred to as Krus-na-Ligas), Quezon City; and the Cruz-na-Ligas Homesite Association, Inc., a non-stock corporation comprised of residents of the barangay.
• Respondents: The University of the Philippines (UP), the Quezon City Government, and by implication, the judicial decisions rendered by the lower courts and the Court of Appeals.

Background and Allegations

• On March 13, 1992, petitioners filed a complaint for specific performance and damages against UP before the Regional Trial Court of Quezon City. The complaint was later amended to include the Quezon City Government as a defendant.
• Petitioners alleged that they and their ascendants have exercised open, adverse, continuous, and hostile possession—akin to that of an owner—over a parcel of riceland identified as Sitio Libis and an adjacent area in the barrio, covering at least 42 hectares.
• Various administrative and quasi-judicial proceedings had earlier resulted in multiple indorsements and recommendations (e.g., the Indorsements dated May 7, 1975; February 12, 1985; and Reply Indorsement dated September 19, 1984) which confirmed the rights of the bona fide residents over the land.
• The UP Board of Regents initially approved a donation in 1979 of part of the land (eventually increased to 15.8 hectares) directly to the residents via the petitioners’ association.
• Subsequently, UP attempted to effect the donation through negotiations with the Quezon City Government under terms that allegedly compromised the rights and interests of the residents, leading to a series of amendments in the petitioners’ complaint.

Procedural Development and Interim Relief

• Following the filing of the complaint, petitioners secured a writ of preliminary injunction to prevent UP from donating the subject property to the Quezon City Government.
• A writ was initially granted on January 24, 1986, though later lifted by the trial court after UP’s counsel provided assurances that the donation would benefit the residents.
• Petitioners later moved for reconsideration amid allegations of deception when UP amended its approach.
• The trial court, while denying the preliminary injunction on the ground that the deed of donation had been revoked, ordered petitioners to amend their complaint, which they did on June 10, 1992.
• Procedurally, motions for dismissal, cross-claims, and requests for withdrawal of cross-claims were filed by the Quezon City Government and UP. In December 1994, the trial court granted a motion to withdraw a cross-claim, and later, on November 29, 1993, the city government moved to withdraw its own cross-claim.
• The trial court, on April 26, 1995, denied a motion to dismiss the amended complaint, noting that a careful reading of the complaint revealed allegations entitling petitioners to ownership via laches—a matter that should be determined at trial.

Dispute on the Donation, Revocation, and Title

• The central controversy involves UP’s deed of donation executed on August 5, 1986, to the Quezon City Government, and the subsequent revocation and reversion of the donated property through Administrative Order No. 21 by UP’s President, Jose Abueva.
• Petitioners allege that:
• The donation had been clearly intended to benefit the bona fide residents through a contractual stipulation (stipulation pour autrui) embedded in the deed.
• UP unilaterally revoked the donation after failing to deliver the certificate of title necessary for the Quezon City Government to comply with its obligations under the donation.
• Such revocation was both arbitrary and prejudicial, particularly after petitioners had consented to various court orders and amendments, based on the expectation of the donation’s fulfillment.
• In their amended complaint, petitioners asserted alternative claims: one for the enforcement of the donation (specific performance) and another alleging ownership of the 42-hectare area based on long possession (laches or acquisitive prescription).

Relief Sought

• Petitioners sought a declaration that the deed of donation is valid and enforceable, thereby obligating UP to transfer the title to the Quezon City Government so that the latter could, in turn, parcel and distribute individual lots to the qualified residents free of charge.
• Additionally, petitioners demanded:
• An injunction to prevent UP from executing any further deeds of donation on terms adverse to the residents.
• Monetary relief to cover moral damages (at least P300,000.00), exemplary damages (P50,000.00), and attorney’s fees.
• A declaration that any acts of ejectment or demolition of their improvements on the riceland are unlawful and subject to reparations.

Issue:

Whether the Amended Complaint States a Valid Cause of Action

• Does the complaint, which seeks specific performance of a deed of donation to which petitioners are intended beneficiaries, sufficiently allege a clear legal right despite petitioners not being original parties to the deed?
• Are the alternative claims (specific performance and acquisition by laches or prescription) consistent and legally permissible under the applicable rules?

Validity of the Revocation of the Deed of Donation

• Was UP’s unilateral revocation of the deed, through Administrative Order No. 21, legally effective and binding, particularly in light of the assurances given to petitioners?
• Did UP’s conduct, including failure to deliver the certificate of title to the Quezon City Government, constitute a breach of its contractual and reciprocal obligations?

Appropriateness of Denying the Dismissal Motion

• Did the trial court err in denying respondents’ motion to dismiss on the ground that petitioners lacked a clear cause of action for specific performance due to the alleged revocation?
• Whether the allegations in the amended complaint, when treated as true, support an action for enforcement of the donation and for claims based on the doctrine of stipulation pour autrui.

Ruling:

• (Subscriber-Only)

Ratio:

• (Subscriber-Only)

Doctrine:

• (Subscriber-Only)