Case Summary (G.R. No. L-33794)
Background of the Property Transaction
On February 12, 1948, Velasco purchased three lots from PHHC, with the Deed of Sale explicitly stipulating that any construction on the property was to be used exclusively for residential purposes. The contract further provided that PHHC retained the right to enter the property for the installation of utility lines and that violations of these stipulations could lead to cancellation of the sale and repossession of the property by PHHC.
MERALCO's Acquisition and Use of the Property
On January 31, 1952, Velasco sold two of the three lots to MERALCO, which subsequently established an electric substation on the property between September and November 1953. This installation drew complaints from Velasco due to noise and safety concerns, leading to a legal battle.
Nuisance Case
Velasco filed a complaint in February 1955 (Civil Case No. Q-1355) against MERALCO, requesting the abatement of what he deemed nuisances stemming from the substation. Initially dismissed by the trial court, this decision was reversed on appeal, with the court instructing MERALCO to reduce noise levels or relocate the substation.
Cancellation Case
Apart from the nuisance case, Velasco later pursued a second complaint (Civil Case No. Q-2716) aimed at rescinding the sale and seeking damages for the use and occupation of the property by MERALCO. The trial court dismissed this case, arguing that the issues had been previously split, but the Court of Appeals later overturned this dismissal stating that the two cases addressed separate legal matters.
Legal Basis for Decision
The primary legal issues revolved around the interpretation of the agreements between PHHC, Velasco, and MERALCO, particularly regarding the stipulation of "residential purposes." The court deduced that the right of action for violations of the original conditions rested with PHHC, as they retained the power to reclaim the property from MERALCO, thereby precluding Velasco from seeking relief on this basis.
Interpretation of "Residential Purposes"
The court interpreted the term "residential purposes" not solely from Velasco’s perspective but from the broader context of the subdivision's utility requirements. The installation of a substation was considered essential for providing electrical services necessary for residential living, which justifies its presence within a residential area.
Contractual Estoppel and Rights of Action
The principle of contractual estoppel was applied, indicating that Velasco, having initially tolerated the substation’s presence and expressing concerns mainly about noise—rather than its residential appropriateness—could not later claim that its establishment violated contract terms. The court noted that actions and acknowledgments during the performance of a contract shape its interpre
...continue readingCase Syllabus (G.R. No. L-33794)
Case Citation
- 199 Phil. 381
- G.R. No. L-33794
- Date of Decision: May 31, 1982
Parties Involved
- Petitioner: Manila Electric Company (MERALCO)
- Respondents: Court of Appeals and Pedro J. Velasco (VELASCO)
Facts of the Case
- On February 12, 1948, VELASCO purchased three lots from the Peoples Homesite and Housing Corporation (PHHC) located in Quezon City.
- The Deed of Sale included specific clauses:
- The properties were to be used exclusively for residential purposes, prohibiting any business or factory use.
- PHHC retained the right to enter the premises to install utilities.
- Any violation of these terms would allow PHHC to rescind the contract, cancel the title, and repossess the property.
- The conditions were annotated on the title issued to VELASCO.
- On January 31, 1952, VELASCO sold two of the lots (the PROPERTY) to MERALCO, a public service company providing electric service to the area.
- MERALCO established a substation on the PROPERTY, beginning construction in September 1953 and finishing in November 1953.
- On November 29, 1954, VELASCO expressed concerns to MERALCO regarding noise and ground electrification caused by the substation, which he felt turned the residential area into a factory-like environment.
- On February 1, 1955, VELASCO filed a complaint in Civil Case No. Q-1355 (NUISANCE CASE) seeking to abate the nuisance and for damages, which was initially dismissed but later overturned by the appellate court.
- On November 23, 1957, VELASCO filed a separate complaint in Civil Case No. Q-2716 (CANCELLATION CASE) seeking rescission of the sale to MERALCO and compens