G.R. No. L-61311 - Villanueva vs. Castaneda, Jr.

Case Summary (G.R. No. L-61311)

Petitioner’s Claim

The petitioners asserted a right to remain and conduct business on the subject strip by virtue of prior municipal authorizations and alleged lease or space‑allocation arrangements. They relied on: (a) Resolution No. 218 (municipal council, Nov. 7, 1961) authorizing construction of permanent stalls for some original occupants; and (b) alleged space allotments made in 1971, for which they paid daily fees, claiming these arrangements established occupancy rights.

Respondents’ Position and Administrative Action

Respondents maintained the stalls were illegal constructions on public property. Acting on a petition by civic groups and after investigation by the municipal attorney, Officer‑in‑Charge Macalino issued an administrative resolution (June 14, 1982) directing demolition beginning July 1, 1982, to restore the area to its declared use as a public plaza and parking place. The municipal government denied the existence of valid leases.

Key Dates and Procedural Milestones

Resolution No. 218 authorizing stalls: Nov. 7, 1961.
Civil Case No. 2040 (lawsuit challenging construction) and writ of preliminary injunction: filed Nov. 10, 1961; injunction issued preventing construction.
Resolution No. 29 declaring area a parking place/public plaza: Jan. 18, 1964.
Decision in Civil Case No. 2040 holding the land public and beyond commerce of man; injunction made permanent: Nov. 2, 1968.
Space allocations and daily fee payments (per petitioners): 1971.
Petition by civic association for enforcement of Resolution No. 29: Jan. 12, 1982.
Macalino’s demolition order: June 14, 1982.
Petition for prohibition in CFI (Civil Case No. 6470): filed June 26, 1982; denied July 19, 1982; reconsideration denied Aug. 5, 1982.
Temporary restraining order issued by the Supreme Court to preserve status quo: Aug. 9, 1982.
Supreme Court decision dismissing petition and affirming lower court: Sept. 21, 1987.

Applicable Law and Precedents

Constitutional/administrative framework invoked by the Court: the municipality’s police power to promote health, safety, convenience and general welfare (as delegated under the Revised Administrative Code, Section 2238, cited in the decision).
Principle that public plazas and streets are res communes and are outside the commerce of man; therefore they cannot be subjects of lease or private contractual disposition. The decision relied on established precedents cited in the record: Municipality of Cavite v. Rojas; Muyot v. de la Fuente; Espiritu v. Municipal Council of Pozorrubio; and authorities on the inviolability of police power (including Stone v. Mississippi and Ortigas & Co. v. Feati Bank as cited).

Procedural History Before the Supreme Court

The petitioners sought certiorari and prohibition in the Court of First Instance to restrain enforcement of Macalino’s demolition order; that petition was denied by the trial court. The petitioners then filed a petition for certiorari with the Supreme Court and obtained a temporary restraining order to preserve the status quo pending resolution. The Supreme Court received pleadings and memoranda from the parties and later impleaded succeeding officers‑in‑charge of the mayor’s office as necessary.

Material Facts Found by the Courts

The trial court had previously found (Civil Case No. 2040) — on testimony including that of former Mayor Rodolfo Hizon — that the National Planning Commission had reserved the area for a public plaza as early as 1951, and the municipal council reaffirmed that intention by Resolution No. 29 (1964). Despite that finding and the permanent injunction in 1968, the area continued to be occupied; by 1971 space allotments were being made and daily fees collected, and by the early 1980s the number of stalls had expanded to nearly two hundred. The talipapa’s condition and configuration were shown by photographs and municipal investigation to present serious safety, sanitation, traffic obstruction, and aesthetic problems.

Issue Presented

Whether the petitioners had a valid proprietary or contractual right to occupy and operate stalls on the subject premises such that the municipal officer’s order to demolish and restore the area to a public plaza exceeded his authority or constituted grave abuse of discretion.

Holding

The Supreme Court dismissed the petition and affirmed the trial court’s denial of the petition for prohibition. The Court held that the municipal officer acted within his authority to enforce the prior judicial decision and municipal resolution declaring the area a public plaza and to order the demolition of the illegal structures. The temporary restraining order was lifted and the decision declared immediately executory, with costs against the petitioners.

Reasoning — Public Plaza Status and Invalidity of Leases

The Court accepted as binding the trial court’s earlier finding that the strip was a public plaza reserved for public use and thus beyond the commerce of man. Because plazas and streets are res communes, they cannot be validly leased or otherwise privately appropriated; any contract purporting to do so is null and void. The Court applied and cited prior rulings (Municipality of Cavite v. Rojas; Muyot v. de la Fuente; Espiritu v. Municipal Council of Pozorrubio) that municipal authorities cannot lawfully lease or alienate public plazas or sidewalks for private use. Consequently, the petitioners’ claimed leasehold or space‑allocation rights, even if alleged fee payments were made, could not confer a legal right to occupy the plaza.

Reasoning — Police Power and Supremacy over Private Contracts

The Court further reasoned that even if there had been any contractual arrangement, the municipality’s exercise of police power — including enactment of Resolution No. 29 and subsequent enforcement action — could validly terminate or abrogate such arrangements when necessary for the general welfare. Contracts affecting public interest carry an implied reservation of the police power and may be m

Case Syllabus (G.R. No. L-61311)

Procedural posture and disposition

Petition for certiorari to this Court challenging the denial by the Court of First Instance of Pampanga (respondent judge) of a petition for prohibition filed by the petitioners.
Temporary restraining order issued by this Court to preserve the status quo pending resolution; subsequently lifted.
This Court, through Justice Cruz, ruled for the respondents and dismissed the petition.
The decision dated July 19, 1982, and the order dated August 5, 1982, of the trial court were affirmed.
The temporary restraining order dated August 9, 1982, was lifted.
The decision is declared immediately executory; costs awarded against the petitioners.
Concurrences: Teehankee, C.J., Narvasa, and Paras, JJ.; Gancayco, J., on leave.

Parties and subject matter

Petitioners: Felicidad Villanueva, Fernando Caisip, Antonio Liang, Felina Miranda, Ricardo Puno, Florencio Laxa, and Rene Ocampo (vendors occupying a strip of land and conducting business therein).
Respondents: Hon. Mariano Castaneda, Jr., Presiding Judge of the Court of First Instance of Pampanga, Branch III; and Vicente A. Macalino, Officer-in-Charge, Office of the Mayor, San Fernando, Pampanga (later replaced in the record by Virgilio Sanchez, then by Paterno S. Guevarra as impleaded officer-in-charge).
Subject property: a strip of land measuring 12 by 77 meters, located along Mercado Street in the vicinity of the public market of San Fernando, Pampanga, on which a conglomeration of vendor stalls known as a talipapa stood.

Chronology of material events (as recited in the source)

1951: Testimony established that the National Planning Commission had reserved the area for a public plaza as early as this year.
November 7, 1961: Municipal Council of San Fernando adopted Resolution No. 218 authorizing some 24 members of the Fernandino United Merchants and Traders Association to construct permanent stalls and sell in the subject place.
November 10, 1961: Civil Case No. 2040 filed and Court of First Instance of Pampanga, Branch 2 issued a writ of preliminary injunction preventing defendants from constructing said stalls until final resolution.
January 18, 1964: Municipal Council adopted Resolution No. 29, declaring the subject area "the parking place and as the public plaza of the municipality" (implied revocation of Resolution No. 218).
November 2, 1968: Judge Andres C. Aguilar decided Civil Case No. 2040 holding the land public in nature and beyond the commerce of man; writ of preliminary injunction made permanent.
1971: Petitioners allege that they and 128 other persons were assigned specific areas/space allotments and paid daily fees to the municipal government.
January 12, 1982: Association of Concerned Citizens and Consumers of San Fernando filed a petition for immediate implementation of Resolution No. 29 to restore the property as a public plaza.
After municipal attorney's investigation, June 14, 1982: Officer-in-charge Vicente A. Macalino issued a resolution requiring the municipal treasurer and municipal engineer to demolish the stalls beginning July 1, 1982.
June 26, 1982: Petitioners filed a petition for prohibition in the Court of First Instance of Pampanga, docketed as Civil Case No. 6470.
July 19, 1982: Respondent judge denied the petition for prohibition.
August 5, 1982: Motion for reconsideration denied.
Petitioners elevated the matter to this Court by certiorari; this Court issued TRO on August 9, 1982.
February 2, 1983: This Court required parties to file memoranda; petitioners complied; respondent Macalino treated his comment as his memorandum.
July 28, 1986: Paterno S. Guevarra impleaded as officer-in-charge in lieu of Virgilio Sanchez, who earlier replaced Macalino.
September 21, 1987: This Court rendered the decision dismissing the petition and affirming lower court action.

Background facts and factual findings by the courts

The place in issue is a talipapa — a conglomeration of vendor stalls near the public market.
The trial court in Civil Case No. 2040 found the area to be a public plaza after considering antecedent facts, including testimony of former San Fernando Mayor Rodolfo Hizon that the National Planning Commission reserved the area for a public plaza as early as 1951.
Resolution No. 29 (1964) declared the area a parking place and public plaza; this legislative declaration reinforced the judicial finding.
The 1968 decision in Civil Case No. 2040 holding the place as public and beyond commerce of man was apparently not appealed or reversed.
The occupation that began with 24 stallholders in 1961 eventually grew to almost 200 stallholders.
Photographs of the disputed area were introduced and show congestion and an unsightly condition.
Petitioners were notified of the municipal attorney's investigation but chose not to attend the hearing.

Petitioners' core contentions (as presented in the record)

Petitioners claimed a right to remain and conduct business in the area by virtue of prior authorization granted by the municipal government.
They asserted contractual or lease rights: initial contracts in 1961 (original occupants) and later space allocations in 1971 for which they paid daily fees.
Petitioners argued that the daily fee arrangement indicated the leases, if valid, were from day to day and thus terminable at will.
They contended that the respondent judge committed grave abuse of discretion in denying their petition for prohibition and challenging the demolition order.

Respondents' position and administrative actions

Respondents denied the existence of valid lease agreements for the subject area.
The municipal council's Resolution No. 29 (1964) declared the area a parking place and public plaza, thereby treating prior authorization as implicitly revoked.
Upon complaint by the Association of Concerned Citizens and Consumers of San Fernando, the municipal attorney conducted an investigation.
Officer-in-charge Vicente A. Macalino, acting on the investigatio