Sagrada Orden v. Metropolitan Water District
REITERATIONFacts
The Antecedents: The plaintiff, "Sagrada Orden de Predicadores," donated lands to the municipality of Manila for the construction of the Carriedo water supply. In resolution dated October 20, 1886, the old city council of Manila resolved to furnish, free of charge, water from the Carriedo waterworks for the use of the convent of Sto. Domingo, owned by the plaintiff. This free water service was enjoyed from 1886 until July 1, 1920. Procedural History: On July 1, 1920, the defendant, Metropolitan Water District (MWD), as administrator of the water supply system, required the plaintiff to pay for water consumed from July to September 1920. The plaintiff paid P52.24 under protest and filed an action seeking to compel the defendant to fulfill the obligation of free water, refrain from collecting charges, and refund the amount paid. The defendant counterclaimed for P1,404.44 for water consumed from September 1, 1916, to the third quarter of 1920. The Court of First Instance absolved the defendant and ordered the plaintiff to pay the counterclaim. The Petition: The plaintiff appealed, assigning errors related to the prescription of the right to free water, extinguishment of the obligation by the Jones Law, extinguishment due to the water coming from a new system, and the sentencing of the plaintiff to pay the counterclaim.
Issue(s)
Whether the right to free water, granted by a resolution of the old city council of Manila, has prescribed due to the absence of a specified duration. Whether the obligation to furnish free water was extinguished by the Jones Law. Whether the right to free water was extinguished because the water supplied to the convent comes from the new water system. Whether the plaintiff is liable for the counterclaim for water consumed.
Ruling
The judgment of the lower court is reversed. The defendant, Metropolitan Water District, is ordered to supply gratuitously the water consumed in the convent of Sto. Domingo and to refund the P52.24 paid by the appellant. The counterclaim is dismissed.
Ratio Decidendi
On the prescription of the right to free water: The Court held that the resolution of the old city council of Manila, granting free water in return for a donation of land, was a remuneratory donation and constituted a valid exchange or barter. While no time was specified, the concession was not intended to be perpetual but rather a return for the liberality shown. However, the Court found that the Metropolitan Water District, as the successor entity, was bound to respect this obligation, especially since the donated land remained in possession and use. The Court cited the principle that a resolution, once adopted and creating a definite state of things, cannot be revoked without injuring the rights of the party concerned, referencing old ordinances and the case of Vasquez Villas vs. City of Manila. On the extinguishment by the Jones Law: The Court ruled that the Jones Law (Act of Congress of August 29, 1916, Section 3) did not extinguish the obligation. The free supply of water was not granted on religious consideration but as compensation for the donation of land. It was a remuneratory donation, an exchange for the value of the land. Therefore, it was not a gratuitous use of public property for the benefit of a religious institution without due compensation, as prohibited by the Jones Law. The Court viewed the transaction as a reciprocal exchange. On the extinguishment due to the new water system: The Court found that the source of the water supply (Montalban reservoir vs. Carriedo waterworks) did not affect the rights and obligations arising from the resolution. The defendant remained in possession of the donated lands, which was the basis for the grant of free water. The fact that the water now comes from a different source does not negate the original agreement, especially since the donated land is still utilized for the water pipes. On the plaintiff's liability for the counterclaim: The Court found that the plaintiff was not liable for the counterclaim. The obligation to provide free water was established by the resolution of the old city council, which was deemed a valid remuneratory donation and binding on the defendant. The plaintiff had been enjoying this benefit for many years, and the defendant's attempt to collect payment was contrary to the established obligation. The Court reversed the lower court's decision on this point.
Main Doctrine
A remuneratory donation, made by a municipal council in return for a generous act of liberality (donation of land for public works), constitutes a valid exchange or barter, and the obligation arising therefrom is binding upon the successor entity administering the public utility, even if the original concession was gratuitous and no specific duration was stated, as long as the donated property remains in possession and use.