Manila v. Gawtee
REITERATIONFacts
The Antecedents: On March 10, 1914, Pablo Co Quinco entered into a contract with the City of Manila to sell a portion of his land for the widening of Pascual Casal Street at its assessed value, without claiming damages. The contract stipulated that any encumbrance or disposal of the land would be subject to this agreement. The consideration for Pablo Co Quinco was a permit to construct a provisional warehouse. The contract was registered. In 1931, the land passed to the defendants, who obtained a new title, also noting the contract. In 1937, the City of Manila decided to proceed with the street widening, passing a resolution. Negotiations failed, leading to expropriation proceedings filed on January 26, 1938. The City was initially unaware of the contract. Procedural History: The City alleged the just compensation to be the assessed valuation of P12,694. After the City rested its case, it introduced the contract into evidence. The commissioners initially reported P12,694 as just compensation. The trial court returned the case to the commissioners, ordering them to consider all evidence presented, not just the contract. The commissioners then submitted a second report fixing the compensation at P15,338.10, which the trial court adopted in its judgment. The Petition: The City of Manila appealed the judgment, assigning as error the trial court's finding that its right under the contract had prescribed.
Issue(s)
Whether the City of Manila's right to acquire the land through expropriation, as stipulated in the contract with Pablo Co Quinco, had prescribed. Whether the City of Manila should have instituted an ordinary civil action instead of expropriation proceedings to enforce its contractual right.
Ruling
The judgment appealed from is reversed. The City of Manila is ordered to pay P12,694 as just and reasonable compensation for the expropriated land. Costs of appeal against defendants-appellees; costs in the first instance, including commissioners' fees, against plaintiff-appellant.
Ratio Decidendi
On the issue of prescription: The Court held that the right granted to the City of Manila by the contract, Exhibit H, had not prescribed. The trial court's conclusion that the right prescribed within ten years from March 10, 1914, was erroneous. The contract intended to grant a term for expropriation, but the expiration date was not fixed. Crucially, the Court cited Seoane vs. Franco (24 Phil., 309), stating that if the landowner or his successors in interest have not asked the competent court to fix the term contemplated by the contract, it cannot be contended that the plaintiff has lost its right to acquire the property in appropriate expropriation proceedings. Therefore, the City's right to expropriate remained valid. On the issue of the form of action: The Court found that the trial court's argument that the City should have filed an ordinary civil action if it desired to rely on the contract was not decisive. The Court emphasized that modern courts are concerned with the substance of actions, not merely their form, citing Palanca Tanguinlay vs. Quiros (10 Phil., 360) and Fernandez vs. Sebido (G.R. No. 47049, June 25, 1940). The cited case of Noble vs. City of Manila (38 Off. Gaz., 2770) was distinguished because, in that case, the City sought expropriation to escape a contract to purchase at a stipulated price, whereas in the present case, the City was invoking its contract with the predecessor in interest of the defendants. Thus, the use of expropriation proceedings was deemed appropriate in this context.
Main Doctrine
The right granted to a city to acquire property through expropriation, even if stipulated in a contract with the landowner, does not prescribe if the landowner or his successors in interest have not asked the competent court to fix the term for the exercise of such right. The stipulation as to price in such a contract may be considered for the purpose of fixing the just compensation.