G.R. No. 47306 - City of Manila vs. Gawtee

On March 10, 1914, Pablo Co Quinco entered into a contract with the City of Manila (recorded as Exhibit H).
The contract provided that Pablo Co Quinco would sell and transfer a portion of his land located in the District of San Miguel, Manila, to the City of Manila at its then assessed value.
The purpose of the transfer was to facilitate the expropriation of the land for the widening of Pascual Casal Street.

Pablo Co Quinco agreed not to claim or collect any additional compensation for damages that might result from the projected expropriation.
He also undertook not to encumber or dispose of the property in any way that could interfere with the contract.
The consideration for his part in the contract was the permit granted by the City of Manila to construct a provisional warehouse on the land.

The contract was duly registered in the office of the register of deeds of Manila and duly noted on the back of Certificate of Title No. 2017.
In 1931, the land passed to the defendants, and a new Certificate of Title No. 38982 was issued, on whose back the contract was also noted.

In 1937, the City of Manila moved forward with the widening of Pascual Casal Street and passed Municipal Board Resolution No. 23 on February 19, 1937, with the Mayor’s approval on February 23, 1937.
Negotiations to acquire the land ensued with the defendants but failed to reach an agreement.
Consequently, expropriation proceedings were commenced on January 26, 1938, against the defendants.
City officials were initially unaware of the existence of the contract between Pablo Co Quinco and the City, explaining why the complaint did not invoke it.

After the plaintiff rested its case, the contract (Exhibit H) was introduced into evidence by the plaintiff’s attorney with the permission of the appraisal commissioners.
The first report by the commissioner, dated March 31, 1939, fixed the compensation at P12,694 based primarily on Exhibit H.
Defendants’ opposition led the trial court to issue an order on August 4, 1939, instructing the commissioners to reappraise the evidence while disregarding Exhibit H.
Following this order, on November 8, 1939, the commissioners submitted a second report, which set the compensation at P15,338.10.

The trial court adopted the valuation of P15,338.10 as the just and reasonable compensation for the expropriated land.
It found that the contractual right granted by Exhibit H had prescribed, basing its conclusion on the assumption that the right was demandable within ten years from March 10, 1914, hence prescribing on March 10, 1934.
The trial court contended that if the City of Manila wished to rely on the contract, it ought to have instituted a separate civil action rather than proceeding with expropriation proceedings.

Whether the contractual right granted by Exhibit H had prescribed due to the absence of a fixed term, thus extinguishing the plaintiff’s claim in the expropriation proceedings.

Whether it is proper for the City of Manila to invoke the contract within the context of expropriation proceedings rather than through an ordinary civil action.
The issue of whether the stipulation on price contained in the contract should exclusively determine the just compensation for the property.

Whether the second appraisal report, which disregarded Exhibit H, should determine the amount of compensation, or if the contractual terms (as evidenced in Exhibit H) should prevail in fixing the proper value.