Title
City of Manila vs. El Monte de Piedad y Caja de Ahorros de Manila
Case
G.R. No. 1975
Decision Date
Nov 10, 1905
City of Manila sued El Monte de Piedad over land ownership after defendant claimed absolute ownership despite a conditional 1887 grant. Court ruled for city, canceling defendant's possessory inscription but allowing continued use under original terms.
legal battle
ownership
occupation

Case Summary (G.R. No. 1975)

Factual Background

It was admitted that the city owned the land in the Plaza de Goiti on which the defendant's building stands prior to July 6, 1887. On July 1, 1887 the defendant petitioned the city to permit it to build on the land on the condition that if the building were abandoned or ceased to be devoted to a Monte de Piedad y Caja de Ahorros the property would revert to the municipality, the petition expressly comparing that condition to a prior grant made for the Teatro del Principe Alfonso. On July 6, 1887 the municipal corporation adopted a resolution granting the gratuitous use of the land for the erection of the building upon the condition that abandonment or cessation of the institution's purposes would cause reversion to the municipality; that resolution was submitted to and approved by the Governor-General. The defendant erected the building and continuously devoted it to the purposes stated.

Proceedings for Registration and Suit

On May 14, 1901 the defendant petitioned the Court of First Instance of Manila to have its possession as owner of the land and building inscribed under article 390 of the Mortgage Law. The usual proceedings followed and on June 13, 1901 an inscription was made in the registry of property for the city of Manila showing the defendant as owner. On October 13, 1903 the plaintiff filed suit to cancel that inscription, to recover possession, and to recover damages in the sum of $14,000. The court below ordered that the inscription be modified to show that the plaintiff was the owner and that the defendant had the gratuitous right to occupy the land so long as it devoted it to the purposes stated; the court denied other relief. The plaintiff appealed.

Issues Presented on Appeal

The appeal presented two principal contentions. First, the appellant argued that the grant to the defendant had been made on the same terms as the grant to the Teatro del Principe Alfonso and that under those terms the grantee was bound to vacate the premises whenever the grantor desired to use them. Second, the appellant contended that the defendant forfeited its rights under the 1887 cession by asserting in the possessory-inscription proceedings that it was the absolute owner of the land, thereby repudiating its prior relation with the city.

Parties' Contentions at Trial and on Appeal

The appellant relied on evidence about the terms of the theater grant and on doctrines of forfeiture, principally by reference to provisions of the Civil Code, and also invoked analogous authorities from United States law. The respondent maintained that its petition and the municipal resolution plainly created a conditional grant: the right to hold the land so long as it was devoted to the defendant's charitable purposes, and that any inconsistent claim of ownership made in 1901 resulted from a mistake of fact by its then officers who believed they possessed documents conveying absolute title; the respondent asserted no intention to repudiate the conditional grant.

Trial Court Ruling

The Court of First Instance modified the possessory inscription to indicate that the plaintiff was the owner of the land and that the defendant enjoyed a gratuitous right to occupy it while it continued to devote the building to the purposes of a Monte de Piedad y Caja de Ahorros, and denied additional relief sought by the plaintiff.

Supreme Court Majority Decision

The Court held that the municipal resolution and the defendant's petition clearly established a conditional grant whereby the right to occupy the land would revert to the municipality if the building were abandoned or ceased to be devoted to the purposes of a Monte de Piedad y Caja de Ahorros. The Court reasoned that the reference to the prior grant to the theater did not operate to cut down or alter the explicit condition expressed in the petition and resolution. The Court also held that it was unnecessary to decide whether the defendant's officers acted in good faith in asserting ownership in 1901, because the laws then in force in the Islands did not impose forfeiture for such a claim. The Court found that the appellant cited no law creating such a penalty, that the portions of the Civil Code invoked did not support the forfeiture argument, and that the United States law relied upon was not in force in the Islands in 1887. Consequently the Court sustained the respondent's right to occupy the land so long as the building was not abandoned and remained devoted to the stated charitable purposes.

Legal Basis and Reasoning

The Court construed the petition and municipal resolution as specifying the operative condition of reversion and treated that plain condition as controlling even if the petitioner had misstated the terms of the earlier theater grant. The Court rejected the appellant's contention that an assertion of ownership in registration proceedings operated as a surrender or forfeiture of the respondent's rights under the concession, explaining that the surrender contemplated in paragraph four of article 513 of the Civil Code referred to a voluntary surrender of the usufructuary's own rights with the intent to surrender them, and not to a forfeiture arising from an asserted, inconsistent claim. The Court further emphasized that foreign law cited by the appellant had not been extended to govern the legal relations in the Islands at the time.

Modification of Judgment and Disposition

Although the Court affirmed the lower court's substantive conclusion that the defendant was entitled to occupy so long as the condition continued, it modified the judgment to cancel the possessory inscription in its entirety because the registration had been obtained on the ground that the defendant was the owner when it was not. The Court ordered that a copy of its decision be sent to the register of deeds of Manila for execution and directed that the defendant institution pay the costs of the t

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