Case Summary (G.R. No. L-24670)
Subsequent Transfers and Acquisition by Feati Bank
Emma Chavez sold Lot 5 to Feati Bank free of liens and encumbrances. Lot 6 passed to Republic Flour Mills—also under the same restrictions—and then to Feati Bank by deed of exchange. The bank’s titles (Nos. 101613 and 106092) likewise bore the building restrictions.
Municipal Zoning Resolution and Construction Dispute
Resolution No. 27 (1960) of the Municipal Council of Mandaluyong declared the western EDSA corridor from Shaw Boulevard to Pasig River a commercial and industrial zone. Feati Bank applied for and obtained municipal building and planning permits. On May 5, 1963, it commenced construction of a bank building, prompting Ortigas & Co.’s demand to halt commercial construction and comply with the title restrictions.
Trial Court Proceedings and Decision
Ortigas & Co. sought a preliminary injunction to enforce the restrictive covenants. The trial court framed the issue as whether the municipal zoning resolution prevailed over the private building restrictions. Assuming the resolution valid, it held that the municipality’s police power classification superseded the covenants, dismissed the complaint for lack of merit, and denied reconsideration.
Issues on Appeal
- Validity of Municipal Resolution No. 27 as a proper exercise of police power.
- Whether the zoning resolution could nullify or supersede the contractual obligations (the annotated building restrictions).
Authority to Enact Zoning Regulations
Under Section 3 of R.A. 2264, municipalities may adopt zoning and subdivision ordinances or regulations subject to mayoral approval. The power to regulate is to be liberally construed in favor of local governments; fair doubts as to existence of power are resolved in their favor. Resolution No. 27, though not styled an ordinance, qualifies as a regulatory measure within the act’s ambit.
Reconciling Police Power and Contractual Rights
While the Constitution prohibits impairment of contracts, the guarantee yields to a legitimate exercise of police power directed to health, safety, morals, and general welfare. Judicial inquiry into police power measures is limited to whether they are arbitrary, whimsical, unjust or unreasonable.
Reasonableness of the Zoning Classification
EDSA is a major traffic artery with industrial and commercial development, generating noise, congestion, and pollution unsuitable for residential use. The municipal resolution responded to these conditions to protect the welfare of the community.
Precedents Supporting Supremacy of Police Power
The Court cited decisions affirming that evolving public needs may warrant regulation of land use once lawful; restrictive covenants that obstruct public welfare may be negated by valid zoning measures (e.g., Calalang v. Williams; Dobbins v. Los Angeles; P
...continue readingCase Syllabus (G.R. No. L-24670)
Facts
- Plaintiff-appellant Ortigas & Company, Limited Partnership (formerly “Ortigas, Madrigal y Cia”) is a limited partnership engaged in developing and selling lots in Highway Hills Subdivision along Epifanio de los Santos Avenue, Mandaluyong, Rizal.
- Defendant-appellee Feati Bank and Trust Co. is a Philippine corporation.
- On March 4, 1952, plaintiff sold Lots Nos. 5 and 6, Block 31, Highway Hills Subdivision, to Augusto Padilla y Angeles and Natividad Angeles under separate installment sale agreements.
- On July 19, 1962, the Angeles transferred their rights in both lots to Emma Chavez, who completed payment and received corresponding deeds of sale.
- Both the installment agreements and the deeds contained building restrictions:
• Residential use only, prohibiting removal of soil, stones, or gravel from the lots.
• Any new building (except fences) must be (a) of strong materials and properly painted, (b) equipped with modern sanitary installations connected to public sewer or approved septic tank, and (c) situated at least two meters from all boundary lines. - These restrictions were annotated on Transfer Certificates of Title (TCT) Nos. 101509 and 101511 in Emma Chavez’s name.
Acquisition of Property by Defendant-Appellee
- Feati Bank acquired Lot No. 5 directly from Emma Chavez “free from all liens and encumbrances” (Annex D).
- Lot No. 6 was obtained via Deed of Exchange with Republic Flour Mills (Annex E); TCT No. 101719 in Republic Flour Mills’s name also bore identical restrictions.
- Defendant’s titles, TCT Nos. 101613 (Lot 5) and 106092 (Lot 6), likewise carried the residential-use and setback annotations.
Municipal Zoning Resolution
- On February 4, 1960, the Municipal Council of Mandaluyong, Rizal passed Resolution No. 27, declaring the western portion of EDSA from Shaw Boulevard to Pasig River a commercial and industrial zone.
- Defendant-appellee maintained that this zone classification existed before its July 1962 acquisitions and that all EDSA-fronting lots had been sold for commercial purposes.
Lower Court Proceedings
- Plaintiff filed Civil Case No. 7706 in the Court of First Instance of Rizal (Branch VI), Pasig, seeking a writ