De Santos v. City of Manila
REITERATIONFacts
The Antecedents: On October 1, 1958, the City of Manila and Arellano University, Inc. entered into a contract of exchange. The City conveyed five parcels of land (aggregate area 2458.3 sq. m.) for three parcels of land from the University (aggregate area 2171.4 sq. m.). The exchange was necessitated by the City's need for land for the Azcarraga (now Claro M. Recto) Extension project, which required portions of the University's property. The City's land included Lot No. 1 of Psu-167195, a portion of a dried estero bed, with an area of 221.50 sq. m. This lot was adjacent to Lot 4, Block 2646, Manila Cadastre, which plaintiff Antonio G. de Santos acquired on January 31, 1958, from Enrique C. Lopez. Lopez had previously proposed to the City Engineer in August 1957 to exchange his property, affected by the widening of Legarda Street, with City property at the back, which was part of the Estero de San Miguel. The City Appraisal Committee considered this exchange on a meter-for-meter basis, with excess area to be paid for. However, action on Lopez's claim was held in abeyance by the City Mayor in February 1959, prioritizing the Azcarraga Extension project over the widening of Legarda Street. Procedural History: On March 25, 1959, Antonio G. de Santos filed an action against the City of Manila and Arellano University, Inc. He sought to declare the contract of exchange null and void concerning Lot No. 1, or in the alternative, to declare Lot 1 subject to his right of redemption within 30 days, or to enjoin the City to respect his right of pre-emption if it acquired the property. The trial court ruled for the defendants, holding that the plaintiff had no right of pre-emption or redemption, denied the annulment claim for lack of proper party in interest, and ordered the plaintiff to pay P5,000.00 as attorney's fees. The Court of Appeals affirmed this decision. The Petition: Petitioner-appellant seeks review by certiorari of the Court of Appeals' decision, raising issues regarding his right of pre-emption or redemption, the annulment of the deed of exchange, and the award of attorney's fees.
Issue(s)
Whether petitioner-appellant has any right of pre-emption or redemption over Lot No. 1 of Psu-167195. Whether petitioner-appellant can seek the annulment of the deed of exchange. Whether the award of P5,000.00 as attorney's fees is justified.
Ruling
The Supreme Court affirmed the decision of the Court of Appeals, dismissing the appeal and holding that the petitioner-appellant has no right of pre-emption or redemption over the disputed lot, cannot legally seek the annulment of the deed of exchange, and that the award of attorney's fees is justified.
Ratio Decidendi
On the right of pre-emption or redemption: The Court held that petitioner-appellant has no right to pre-empt or redeem Lot No. 1 of Psu-167195 under Article 1622 of the Civil Code. This provision grants such rights to an adjoining owner only if the urban land is small, cannot be used for practical purposes, was bought merely for speculation, and is about to be re-sold or has been re-sold. The petitioner failed to allege or prove these conditions. The Court noted that the lot in question was part of an estero bed, its area (221.50 sq. m.) was larger than the average Manila lot, and the Arellano University intended to use it for public interest, negating the 'small and unusable' condition. Furthermore, the City of Manila did not acquire the lot by purchase with the intention to sell, but exchanged it for its own needs for the Azcarraga Extension project. The Court also found that any right petitioner might have derived from his predecessor-in-interest, Enrique Lopez, failed to materialize as action on Lopez's claim was held in abeyance due to the priority given to the Azcarraga Extension project. On the annulment of the deed of exchange: The Court ruled that petitioner-appellant cannot legally seek the annulment of the deed of exchange because he is not a proper party in interest. A person not obliged under a contract can only seek its nullity if prejudiced in their rights and can show detriment. Since the petitioner has neither the right of pre-emption nor redemption over the disputed lot, the contract of exchange is not detrimental to his rights or interests. Therefore, he lacks the legal standing to assail the validity of the contract between the City of Manila and Arellano University. On the award of attorney's fees: The Court upheld the award of P5,000.00 as attorney's fees. It stated that the award of attorney's fees is discretionary with the trial court and is authorized under Paragraph 4 of Article 2208 of the Civil Code when the action is clearly unfounded. The Court found no abuse of discretion in the trial court's decision to award attorney's fees to the respondent Arellano University, considering the unfounded nature of the petitioner's claims.
Main Doctrine
A party seeking to exercise the right of pre-emption or redemption over urban land under Article 1622 of the Civil Code must prove that the land is small, cannot be used for practical purposes, and was bought merely for speculation, and that it is about to be re-sold or has been re-sold. Furthermore, a party not principally or subsidiarily obliged under a contract cannot seek its annulment unless prejudiced in their rights and can show detriment.