G.R. No. L-56624 - Darnoc Realty Development Corp. vs. Ayala Corp.

Case Summary (G.R. No. L-56624)

Parties, Contractual Relationship, and Material Facts

On January 16, 1975, respondent contracted to sell to Western Minolco Corporation Lots 12 and 13, Block 28 of Legaspi Village. Western Minolco later executed a Deed of Assignment of Right to buy land in favor of petitioner. Respondent then executed a Deed of Absolute Sale of the same lots to petitioner. The lots are now covered by Transfer Certificates of Title Nos. S-90337 and S-85260, and both titles bear the following restriction inscribed and annotated at the back: the building proper must not exceed twenty-three (23) meters in height above the ground directly beneath the point in question, with an additional proviso that covered parking structures require the approval of the vendor, and with exclusions for elevator shafts and decorative structures for purposes of measuring the maximum height.

Petitioner intended to construct a twenty-two (22)-storey office building on the two parcels and submitted amended building plans to respondent. Respondent refused, asserting that the contemplated height would exceed the restriction by sixty-two (62) meters and would not be approved unless amended to conform to the maximum height limitation.

Petitioner accordingly filed a petition directly with the Court to declare the height restriction unconstitutional and invalid and to compel respondent to allow construction of the planned twenty-two (22)-storey building. Petitioner alleged that the restriction was a capricious exercise of an alleged right and that it infringed the constitutional guarantee on the use and enjoyment of property by a private individual. Respondent, in its comment and answer, maintained that the restriction formed part of the contractual terms of the deeds of sale and was therefore binding on petitioner. Respondent also challenged the propriety of filing directly in the Court, asserting that the action belonged in the court of first instance.

Procedural History and the Court’s Threshold Issue

The Court resolved the matter on a threshold ground and declined to rule on the merits. It agreed with respondent that the petition was improperly filed and that the Court lacked jurisdiction over the case. Petitioner had invoked the notion of concurrent jurisdiction by claiming that the controversy fell within the Court of First Instance’s concurrent jurisdiction. The Court rejected this position, stressing that jurisdiction over the subject matter is conferred only by the Constitution or by law and cannot be controlled by the will of the parties.

Jurisdictional Analysis: Why Original Proceedings in the Court Were Improper

The Court held that the Constitution and the Judiciary Act of 1948 did not provide a basis for original jurisdiction in the petition filed. Under the Constitution, the Court’s authority covers review of inferior courts’ final judgments and decrees in cases enumerated by the Constitution. The Court observed that no judgment of an inferior court existed in the case at bar. The petition also did not fall within categories involving the constitutionality or validity of a treaty, executive agreement, law, ordinance, or executive order or regulation.

The Court further examined the types of special civil actions under the Judiciary Act of 1948, which conferred concurrent jurisdiction with the Court of First Instance for specified writs. The Court noted that petitioner did not demonstrate entitlement to any of those remedies. It then explained why the principal relief sought could not be obtained through the writs under Rule 65, Rules of Court. The petition principally sought to nullify a contractual restriction in the deeds of sale and to compel respondent to allow a construction height beyond the deed restriction.

With respect to certiorari, the Court explained that the remedy is available only when a tribunal, board, or officer exercising judicial functions has acted without or in excess of jurisdiction, or with grave abuse of discretion, and when the purpose is to annul or modify proceedings. The action in substance attacked a contractual provision and requested permission to build, which did not fit the requisites of certiorari. The Court also found mandamus inapplicable because mandamus lies only to compel the performance of duties enjoined by law, not to enforce contractual duties. Similarly, the Court ruled that prohibition was not proper because it is available to prevent proceedings without or in excess of jurisdiction, or with grave abuse of discretion, and petitioner’s prayer did not match that preventive posture.

Determination of Proper Forum: Original Jurisdiction of the Court of First Instance

Because the action was principally directed at nullifying a contractual clause in a deed of sale and at securing affirmative allowance to construct a building height permitted by petitioner’s desired reading of the restriction, the Court treated the case as one that properly fell within the original jurisdiction of the Court of First Instance, in line with Section 44 of the Judiciary Act of 1948 (as amended). The Court rejected petitioner’s argument that filing directly with the Court was justified because the matter could eventually reach the Court on appeal. The Court observed that such practice would create “havoc” in judicial procedure if parties were allowed to bypass the Court of First Instance merely because the eventual case might be appealable.

Disposition

The Court set aside the resolution that had given due course to the petition and dismissed the petition for lack of jurisdiction.

Legal Basis and Reasoning

The Court’s reasoning rested on two fundamental jurisdictional premises. First, subject-matter jurisdiction depends exclusively on constitutional and statutory grants and cannot be established by parties’ consent or characterization of the action. Second, the petition did not satisfy the jurisdictional conditions for the Court to exercise original review through its constitutional and statutory authority, nor did it fall within recognized categories requiring the issuance of special writs under Rule 65. The Court also underscored that, where the relief sought is essentially the invalidation of a contractual restriction and enforcement of a construction right derived from a private contract, the proper remedy and forum do not lie through certiorari, prohibition, or mandamus in the Court’s original jurisdiction.

Concurring Opinion: Declaratory Relief and the Proper Trial Court

In a concurring opinion, Aquino, J. added that petitioner’s action, in substance, was for declaratory relief, a special civil action governed by Rule 64 of the

Case Syllabus (G.R. No. L-56624)

Darnoc Realty Development Corporation (petitioner) filed a petition directly with the Court seeking to declare unconstitutional and void a contractual Deed Restriction annotated on petitioner’s Transfer Certificates of Title for Lots 12 and 13, Block 28 of Legaspi Village.
Ayala Corporation (respondent) owned the lots when the Deed of Sale was executed and later refused to approve petitioner’s amended building plans on the ground that the proposed structure exceeded the contractually limited building height.
The Court resolved the petition on jurisdictional grounds and dismissed it, without addressing the substantive attack on the validity and constitutionality of the deed restriction.

Parties and Procedural Posture

Petitioner was a corporation engaged in real estate development, holding the subject titles and planning to construct an office building.
Respondent was a corporation engaged in real estate development, who contracted to sell the subject lots and inserted the height restriction into the sale documents.
Petitioner filed directly with the Supreme Court to annul the height restriction and to compel respondent to allow the construction of a twenty-two (22) storey office building.
Respondent contended that the Supreme Court lacked jurisdiction because the matter should have been filed in the Court of First Instance.
The Court set aside the resolution giving due course and dismissed the petition for lack of jurisdiction.

Key Factual Allegations

Respondent contracted on January 16, 1975 to sell to Western Minolco Corporation Lots 12 and 13, Block 28 of Legaspi Village.
Western Minolco Corporation executed a Deed of Assignment of Right to buy land in favor of petitioner.
Respondent executed a Deed of Absolute Sale over Lots 12 and 13 in favor of petitioner.
The lots became covered by Transfer Certificates of Title Nos. S-90337 and S-85260 in petitioner’s name.
Both certificates carried an annotated restriction limiting the building height to not more than twenty-three (23) meters above the ground directly beneath the point in question.
The restriction further provided that elevator shafts and decorative structures were not considered for purposes of measuring maximum height, while covered parking height required respondent’s approval.
Petitioner intended to construct a 22-storey office building and submitted amended building plans to respondent.
Respondent replied that the proposed building exceeded the maximum limitation by sixty-two (62) meters and would not approve unless the plans conformed to the twenty-three (23) meter limit.
Petitioner alleged that the restriction was a capricious exercise of a right respondent no longer possessed after it ceased to be owner and that it infringed the constitutional guarantee on use and enjoyment of property by a private individual.

Deed Restriction Provision

The deed restriction stated that the “building proper” must have a height of not more than twenty-three (23) meters above the ground beneath the point in question.
The restriction expressly exempted elevator shafts and decorative structures from measurement of maximum height.
The restriction treated covered parking differently by providing that its height was subject to respondent’s approval.

Relief Sought by Petitioner

Petitioner sought a judicial declaration that the contractual height restriction was unconstitutional and should be annulled.
Petitioner sought an order directing respondent to allow the construction of a twenty-two (22) storey office building on Lots 12 and 13.

Respondent’s Jurisdictional Arguments

Respondent maintained that the restriction formed part of the terms and conditions of the deeds of sale and was binding on petitioner.
Respondent argued that the petition was improperly filed with the Supreme Court because the case fell within the original jurisdiction of the Court of First Instance.
Respondent also contended that petitioner failed to qualify for any of the special civil actions under Rule 65 that would justify Supreme Court resort.

Issues

The primary issue addressed by the Court was whether the Supreme Court had original jurisdiction to entertain a petition aimed at nullifying a contractual deed restriction an