G.R. No. 136738 - People vs. Valez

Respondents were lessees of a parcel of land located at San Pascual Street, Malate, Manila, originally owned by Marta Reyes.
Over the years, respondents constructed and improved houses on the land.
Upon Marta Reyes’ demise, her son Victor Reyes inherited the property.
Victor Reyes informed the respondents that as long-time lessees (over twenty years), they held a right of first refusal to buy the land.

In the early part of 1989, without the respondents’ knowledge, the land was sold to petitioner Cynthia Ortega.
Cynthia Ortega eventually secured title to the property in her name despite the prior right of first refusal claimed by the respondents.

On May 25, 1989, Cynthia Ortega filed a petition for condemnation (Condemnation Case No. 89-05-007) with the Office of the Building Official, City of Manila, targeting the structures built by the respondents.
Following due hearing, the Office of the Building Official issued a resolution on November 27, 1989, ordering the demolition of the respondents’ houses.
The resolution was served on December 7, 1989.

On December 8, 1989, petitioner Ortega, along with her father and co-petitioner Vicente Rellosa, initially hired workers to demolish the houses. Intervention by the police temporarily halted the operation after negotiations and pleas for suspension.
Respondents filed an appeal with the Regional Trial Court of Manila on December 11, 1989 against the demolition order.
Despite the appeal, petitioner Ortega once again proceeded with the demolition on December 12, 1989 by hiring workers.
Respondents then filed Civil Case No. 89-49176, seeking the annulment of the sale based on their right of first refusal and claiming damages for the demolition, including moral and exemplary damages, as well as attorney’s fees.

At trial, the Regional Trial Court dismissed the respondents’ claims and ordered them to pay petitioners moral damages.
On appeal, the Court of Appeals reversed the trial court’s decision, awarding:

The Court of Appeals emphasized that the respondents had a legal right to perfect an administrative appeal within fifteen (15) days from receipt of the demolition resolution, which they were denied due to the premature demolition executed by the petitioners.

Petitioners contended that they executed the demolition based on the order issued by the Building Official, which was later upheld by the Department of Public Works and Highways on March 14, 1990.
They argued that the structures were declared dangerous and that their prompt action was necessary to remove a hazard.
Petitioners asserted that their right as property owners should not be hindered by the administrative appeal process of the respondents.

Whether petitioners, by implementing the demolition of the respondents’ houses prior to the lapse of the fifteen-day administrative appeal period—including the period during which the demolition order was not yet final and executory—acted in violation of the respondents’ legal rights.

Whether the premature demolition constituted an abuse of the right of property ownership in light of the respondents’ right to contest an adverse ruling.
Whether even the subsequent affirmation of the demolition order by the Department of Public Works and Highways could justify the unauthorized and early execution of the demolition order.

Whether the award of damages (moral and exemplary) to the respondents should be maintained as originally decided by the Court of Appeals or modified in view of the circumstances surrounding the premature demolition.