G.R. No. 110223




Baguio City FIRST DIVISION G.R. No. 110223 April 8, 1997 ARMY AND NAVY CLUB OF MANILA, INC., petitioner, vs. HONORABLE COURT OF APPEALS, HON. WILFREDO D. REYES, as Judge REGIONAL TRIAL COURT OF MANILA, BRANCH 36 (formerly (Branch 17), HON. A. CAESAR SANGCO, as Judge, METROPOLITAN TRIAL COURT, BRANCH 17-MANILA and the CITY OF MANILA, represented herein by MAYOR ALFREDO LIM, respondents. KAPUNAN, J.: The instant petition seeks to annul the decision of the Court of Appeals affirming the decision of the Regional Trial Court, National Capital Region, Branch 36, Manila which affirmed the summary judgment rendered by the Metropolitan Trial Court of Manila, Branch 17. On November 29, 1989 the City of Manila filed an action against herein petitioner with the MTC for ejectment. The complaint alleged that: 1. That plaintiff is a municipal corporation duly organized and existing by virtue of Rep. Act No. 409, as amended, with offices at City Hall Building, Manila, represented in this action by its incumbent City Mayor, Hon. Gemiliano C. Lopez, Jr., with the same address as plaintiff; Defendant is likewise a corporation organized under the laws of the Philippines with offices at the Army and Navy Club Building, Luneta, Manila, where it may be served with summons; 2. That plaintiff is the owner of a parcel of land with an area of 12,705.30 sq. m. located at South Boulevard corner Manila Bay, Manila, covered by TCT No. 156868/1059 of the Register of Deeds of Manila, together with the improvements thereon known as the Army and Navy of Manila; 3. That defendant is occupying the above-described land and the Army and Navy Club Building by virtue of a Contract of Lease executed between plaintiff and defendant in January 1983, copy of which is attached hereto as Annex "A". 4. That paragraph 1 of the said Contract of Lease provides that: (1) That the LESSEE shall construct, at its own expense, a modern multi-storied hotel at a cost of not less than FIFTY MILLION PESOS (P50,000.00) (sic), which shall automatically belong to the LESSOR upon the expiration and/or termination of the lease agreement, without right of the LESSEE for reimbursement for the costs of its construction; PROVIDED, HOWEVER, that construction of the said hotel shall be commenced within one (1) year, and completed as far as practicable within five (5) years, from date of approval by proper government officials of this lease agreement; PROVIDED, FURTHER, that the plans and specification for the same hotel shall be approved first by the LESSOR before actual construction; 5. That in violation of the aforequoted provision, defendant has failed and/or refused to construct a modern multi-storied hotel provided for therein, long after the expiration period therein stipulated and despite demands of plaintiff, to the prejudice of plaintiff who has agreed to defendant's continued retention of the property on a lease-back agreement on the basis of the warranties of defendant to put up a contemporary multi-storied building; 6 That paragraph 3 of the Contract of Lease also stipulates that: (3) That the LESSEE shall pay a rent of TWO HUNDRED FIFTY THOUSAND PESOS (P250,000.00) a year, which may be paid by the LESSEE in twelve (12) equally monthly installments within the first five (5) days of each month, without the necessity of a demand, subject, however, to rental adjustment after the first five (5) days of each month, without the necessity of a demand, subject, however, to rental adjustment after the first five years of this lease, at the rate of not more than ten per centum (10%) per annum every two years, or on the basis of the increase in the prevailing market value of the leased premises whichever is higher of the two criteria; 7. That defendant also reneged on its rental obligation notwithstanding plaintiff's demand to pay, for its use and occupancy of the plaintiff's property, starting from January 1983 to the present, and its rental account stood at P1,604,166.70 as of May, 1989; 8. That in paragraph 4 of the Contract of Lease, it is also provided that: (4) That the LESSEE shall pay the realty tax due on the land, including those assessed against the improvements thereon, as well as all government license, permits, fees and charges prescribed by law, Presidential decrees and ordinances for the leased premises, including those for the establishment and operation of a modern multi-storied hotel and all constructions and modifications pursuant to the provisions of this Contract; 9 That defendant violated its undertaking to pay the taxes due on the land and improvement, so much so that as of December 1989, its aggregate realty tax liability amounts to P3,818,913.81; 10. That repeated demands of plaintiff had been made upon the defendant to comply with its aforesaid contractual obligations, but defendant however remained unfazed; it still failed to perform any of its contractual obligations. 11. That as a result, plaintiff rescinded their Contract of Lease and demanded defendant to vacate, the last of which was contained in a letter dated May 24, 1989, copy of which is attached hereto as ANNEX "B". To date however, defendant however, has not budged an inch from the property of plaintiff; 12. That the reasonable rental value for defendant's continued use and occupancy of the subject premises which is a prime property along Rozas (sic) Boulevard in Luneta area is P636,467.00 a month in the context of the prevailing rental rates of comparable real property;1 On December 29, 1989 or within the reglementary period, petitioner filed its answer to the complaint. Subsequently, on February 22, 1990, it filed a "Motion for Leave to File and for Admission of Amended Answer" allegedly asserting additional special and affirmative defenses. On May 23, 1990, the City of Manila filed a Motion for Summary Judgment2 on the ground that there exists no genuine triable issue in the case. On July 27, 1990, the MTC denied the petitioner's motion for leave to admit its amended answer for lack of merit. Thus, on October 5, 1990, a decision was rendered with the following dispositive portion: WHEREFORE, premises considered, judgment is hereby rendered in favor of the plaintiff, ordering the defendant: a) and all persons claiming rights or title under it, to immediate (sic) vacate and surrender to the plaintiff, the premises more particularly described as the Army and Navy Club Bldg. located at South Boulevard corner Manila Bay, Manila; b) to pay, all with legal interest thereon, its rental arrearages at the rate of P250,000.00 per year with a corresponding ten (10%) percent increase every two years from January, 1983 until it finally vacates and surrenders the premises to the plaintiff; c) the costs of suit. SO ORDERED.3 On appeal, the Regional Trial Court presided by Judge Wilfredo D. Reyes affirmed in toto the summary judgment of the Metropolitan Trial Court.4 Petitioner elevated its case to the Court of Appeals. On October 30, 1992, the Court of Appeals dismissed the appeal. On May 18, 1996, the Court of Appeals issued a resolution denying the motion for reconsideration of the decision dated October 30, 1992. At the same time, it also denied the City of Manila's motion for issuance of a writ of execution pending appeal. Petitioner filed the instant petition raising the following issues: 1. RESPONDENT COURTS GRAVELY ERRED IN UPHOLDING THE OUSTER OF HEREIN PETITIONER FROM THE DISPUTED PREMISES WHICH IS A CLEAR TRANSGRESSION OF THE FORMAL DECLARATION OF THE SITE OF HEREIN PETITIONER AS A HISTORICAL LANDMARK. 2. WHETHER OR NOT RESPONDENT COURT OF APPEALS SERIOUSLY ERRED IN AFFIRMING THE DECISIONS OF RESPONDENT METROPOLITAN TRIAL COURT (MTC) AND REGIONAL TRIAL COURT (RTC) JUDGES DENYING ADMISSION OF PETITIONER'S AMENDED ANSWER. 3 WHETHER OR NOT RESPONDENT COURT OF APPEALS ERRED IN AFFIRMING THE SUMMARY JUDGMENT RENDERED BY RESPONDENT MTC AND RTC JUDGES. 4. WHETHER OR NOT RESPONDENT COURT OF APPEALS ERRED IN NOT HOLDING THAT PETITIONER WAS DENIED DUE PROCESS BY THE RENDITION OF SUMMARY JUDGMENT AGAINST IT. 5. AS AN INCIDENT TO THE MAIN ISSUE, THE PROPERTY, SUBJECT MATTER OF THIS CASE, IS OF PUBLIC DOMAIN AND THEREFORE, THE CONTRACT OF LEASE EXECUTED BY THE CITY OF MANILA IN FAVOR OF PETITIONER IS VOID.5 There is no merit in the petition. Amidst all the issues raised by the petitioner, the instant case is a simple ejectment suit. There is no dispute that the City of Manila is the owner of a prime parcel of land with an area of 12,705.30 square meters located at South Boulevard corner Manila Bay together with the improvement thereon known as Army and Navy Club of Manila. Petitioner entered into a lease contract with private respondent sometime in January, 1983. In said lease contract, it agreed to: 1) pay an annual a rent of P250,000.00 with a 10% increase every two (2) years; 2) pay the realty tax due on the land; and 3) construct a modern multi-storey hotel provided for therein within five (5) years which shall belong to the City upon expiration or termination of the lease without right of reimbursement for the cost of construction.6 Petitioner failed to pay the rents for seven (7) consecutive years. As of October, 1989 when the action was filed, rental arrears ballooned to P7.2 million. Real estate taxes on the land accumulated to P6,551,408.28 as of May, 1971. Moreover, petitioner failed to erect a multi-storey hotel in the site. For violations of the lease contract and after several demands, the City of Manila had no other recourse but to file the action for illegal detainer and demand petitioner's eviction from the premises. Article 1673 of the New Civil Code is explicit: Art. 1673. The lessor may judicially eject the lessee for any of the following causes: (1) When the period agreed upon, or that which is fixed for the duration of leases under articles 1682 and 1687, has expired; (2) Lack of payment of the price stipulated; (3) Violation of any of the conditions agreed upon in the contract; (4) When the lessee devotes the thing leased to any use or service not stipulated which causes the deterioration thereof; or if he does not observe the requirement in No. 2 of article 1657, as regards the use thereof. The ejectment of tenants of agricultural lands is governed by special laws. (emphasis supplied) Petitioner invokes and capitalizes on the fact that the Army and Navy Club has been declared a national historical landmark by the National Historical Commission on June 29, 1992 which the lower courts allegedly never gave due consideration. Thus, its existence should not in any way be undermined by the simple ejectment suit filed against it. Petitioner contends that all parties are enjoined by law to preserve its existence and site. To support its claim, petitioner presented the Certificate of Transfer and Acceptance of the Historical Marker granted to it pursuant to R.A. 4846, as amended by PD 374 which provides that it shall be "the policy of the State to preserve and protect the important cultural properties and National Cultural Treasures of the nation and to safeguard their intrinsic value."7 The Marker reads as follows: CERTIFICATE OF TRANSFER AND ACCEPTANCE OF HISTORICAL MARKER ARMY AND NAVY CLUB TO ALL PERSONS TO WHOM THESE PRESENTS MAY COME: Be it known that the National Historical Institute, in the exercise of its authority vested by law and in compliance with its mandate to honor national heroes and perpetuate the glory of their deeds, and to preserve historical sites, has transferred this historical marker unto Administration of Army and Navy Club, who has agreed to accept the same and to maintain it as a sacred duty. IN WITNESS WHEREOF, the parties have hereunto set their hands this 29th day of June, 1992, in Manila. NATIONAL HISTORICAL INSTITUTE by: (SGD.) ILLEGIBLE (SGD.) ILLEGIBLE CAPT. VICENTE J. BRILLANTES SERAFIN D. QUIASON Tansferee Transferor Attested: (SGD) ILLEGIBLE (SGD.) ILLEGIBLE CHIEF SUPT JOSE PERCIVAL ADIONG AVELINA M. CASTANEDA SUBSCRIBED AND SWORN to before me in Manila, Philippines, this 29th day of June, 1992 by the affiants. (SGD.) ILLEGIBLE (SGD.) ILLEGIBLE BGEN ANTONIO V. RUSTIA COL MANUEL R. GUEVARA. (SGD.) ILLEGIBLE (SGD.) ILLEGIBLE RAMON J. SIYTANGCO, JR. CAPT. DANIEL A. ARREOLA. (SGD.) LOPE M. VELASCO NOTARY PUBLIC My Commission Expires Dec. 31, 1993 Not Reg. No. 297 PTR 022088 Page 61 1-2-92, Manila Book II IBP 320197 Series of 1992 12-18-91, Pasig8 While the declaration that it is a historical landmark is not objectionable, the recognition is, however, specious. We take the occasion to elucidate on the views of Fr. Joaquin Bernas who was invited as amicus curiae in the recent case of Manila Prince Hotel v. GSIS9 where the historical character of Manila Hotel was also dealt with. He stated that: The country's artistic and historic wealth is therefore a proper subject for the exercise of police power: ". . . which the State may regulate." This is a function of the legislature. And once regulation comes in, due process also comes into play. When the classification of property into historical treasures or landmarks will involve the imposition of limits on ownership, the Bill of Rights demands that it be done with due process both substantive and procedural. In recognition of this constitutional principle, the State in fact has promulgated laws, both general and special, on the subject. . . . the current general law on the subject is R.A. 4846, approved on June 18, 1966, and amended by P.D. No. 374. The Act prescribes the manner of classifying historical and cultural properties thus: Sec. 4. The National Museum, hereinafter referred to as the Museum shall be the agency of the government which, shall implement the provisions of this Act. Sec. 5. The Director of the Museum, hereinafter referred to as the Director, shall undertake a census of the important cultural properties of the Philippines, keep a record of their ownership, location, and condition, and maintain an up-to-date register of the same. Private collectors and owners of important cultural properties and public and private schools in possession of these items, shall be required to register their collections with the Museum when required by the Director and to report to the same office when required by the Director any new acquisitions, sales, or transfers thereof. Sec. 6. The Director is authorized to convene panels of experts, as often as the need for their services may arise, each to be composed of three competent men in the specialized fileds of anthropology, natural sciences, history and archives, fine arts, philately and numismatics, and shrines and monuments, etc. Each panel shall, after careful study and deliberation, decide which among the cultural properties in their field of specialization shall be designated as "National Cultural Treasures" or "Important Cultural Properties." The Director is further authorized to convene panels of experts to declassify designated "National Cultural Treasures." The Director shall within ten days of such action by the panel transmit their decision and cause the designation-list to be published in at least two newspapers of general circulation. The same procedure shall be followed in the declassification of important cultural properties and national treasures. Sec. 7. In designation of a particular cultural property as a "national cultural treasure," the following procedure shall be observed: a. Before the actual designation, the owner, if the property is privately owned, shall be notified at least fifteen days prior to the intended designation, and he shall be invited to attend the deliberation and given a chance to be heard. Failure on the part of the owner to attend the deliberation shall not bar the panel to render its decision. Decision shall be given by the panel within a week after is deliberation. In the event that the owner desires to seek reconsideration of the designation made by the panel, he may do so within days from the date that the decision has been rendered. If no request for reconsideration is filed after this period, the designation is then considered final and executory. Any request for reconsideration filed within thirty days and subsequently again denied by the panel, may be further appealed to another panel chairmanned by the Secretary of Education, with two experts as members appointed by the Secretary of Education. Their decision shall be final and binding. b. Within each kind or class of objects, only the rare and unique objects may be designated as "National Cultural Treasures." The remainder, if any, shall be treated as cultural property. c. Designated "National Cultural Treasures" shall be marked, described, and photographed by the National Museum. The owner retains possession of the same but the Museum shall keep a record containing such information as name of article, owner, period, source, location, condition, description, photograph, identifying marks, approximate value, and other pertinent data. Thus, for Manila Hotel to be treated as special cultural or historical property, it must go through the procedure described above. Eloquent nationalistic, endorsements of classification will not transform a piece of property into a legally recognized historical landmark . . . . In the case at bar, there is no showing that the above procedure has been complied with. The City of Manila even observed that the signatories thereto are officers and members of the Club 10 making such certification self-serving. It behooves us to think why the declaration was conferred only in 1992, three (3) years after the action for ejectment was instituted. We can only surmise that this was merely an afterthought, an attempt to thwart any legal action taken against the petitioner. Nonetheless, such certification does not give any authority to the petitioner to lay claim of ownership, or any right over the subject property. Nowhere in the law does it state that such recognition grants possessory rights over the property to the petitioner. Nor is the National Historical Commission given the authority to vest such right of ownership or possession of a private property to the petitioner. The law merely states that it shall be the policy of state to preserve and protect the important cultural properties and National Cultural Treasures of the nation and to safeguard their intrinsic value. In line with this, any restoration, reconstruction or preservation of historical buildings shall only be made under the supervision of the Director of the National Museum. 11 The authority of the National Historical Commission is limited only to the supervision of any reconstruction, restoration or preservation of the architectural design of the identified historical building and nothing more. Even assuming that such recognition made by the National Historical Commission is valid, the historical significance of the Club, if any, shall not be affected if petitioner's eviction from the premises is warranted. Unfortunately, petitioner is merely a lessee of the property. By virtue of the lease contract, petitioner had obligations to fulfill. Petitioner can not just hide behind some recognition bestowed upon it in order to escape from its obligation or remain in possession. It violated the terms and conditions of the lease contract. Thus, petitioner's eviction from the premises is inevitable. Anent the procedural issues raised, the Court finds no reversible error in the summary judgment rendered by the trial court. A summary judgment is one granted by the court upon motion by a party for an expeditious settlement of the case, there appearing from the pleadings, depositions, admissions, and affidavits that there are no important questions or issues of fact involved (except as to the amount of damages), and that therefore the moving party is entitled to a judgment as a matter of law. 12 In the case at bar, there is clearly no substantial triable issue. In the Answer filed on December 29, 1989, petitioner does not deny the existence of the lease contract executed with the City of Manila in January 1983. It admitted that it failed to pay the rents and real estate taxes and construction of a multi-storey building. It put up the defense that it was unable to fulfill its obligations of the contract due to economic recession in 1984 as an aftermath of the Ninoy Aquino assassination.ℒαwρhi৷ Considering that there is no genuine issue as to any material fact, a summary judgment is proper. The argument that it was declared a historical landmark, is not a substantial issue of fact which does not, in any way, alter or affect the merit of the ejectment suit. Likewise, we find no error much less any abuse of authority on the part of the lower court in not admitting the Amended Answer. Aside from the fact that it was filed one (1) year after the original answer was filed, it put up defenses which are entirely in contradiction to its original answer. This is in contravention of the rules of procedure. 13 Having admitted in the original answer that the City of Manila is the registered owner of the property and that it leased the property from it, petitioner can not now deny such claim of ownership. The Court of Appeals correctly observed on this point: Be that as it may, at this last stage, after herein petitioner has dealt with the private respondent as the owner of the leased premises and obtained benefits from said acknowledgment of such ownership for almost half a century, herein petitioner cannot be permitted to assume an inconsistent position by denying said private respondent's ownership of the leased premises when the situation calls for it. Herein petitioner cannot be allowed to double deal, recognizing herein private respondent's title over the leased premises and entering into a lease contract and other covenants, and thereafter after failing to comply with its obligation provided for in the lease agreement attempt to repudiate the ownership of private respondent of the subject property. 14 WHEREFORE, the decision of the Court of Appeals is AFFIRMED. The instant petition is DENIED, for lack of merit. SO ORDERED. Padilla, Bellosillo and Hermosisima, Jr., JJ., concur. Vitug, J., concurs in the result. Footnotes 1 Rollo, pp. 81-84. 2 Id., at 108. 3 Id., at 125. 4 Id., at 127. 5 Id., at 27-28. 6 Id., at 203-204. 7 PRESIDENTIAL DECREE NO. 374 AMENDING CERTAIN SECTIONS OF REPUBLIC ACT NO. 4846 OTHERWISE KNOWN AS THE "CULTURAL PROPERTIES PRESERVATION AND PROTECTION ACT: xxx xxx xxx Sec. 2. It is hereby declared to be the policy of the state to preserve and protect the important cultural properties and National Cultural Treasures of the nation and to safeguard their intrinsic value. Sec. 3. . . . a Cultural properties are old buildings, monuments, shrines, documents, and objects which may be classified as antiques, relics, or artifacts, landmarks, anthropological and historical sites, and specimens of natural history which are of cultural, historical, anthropological or scientific value all significance to the nation; such as physical, anthropological, archaeological and ethnographical materials, meteorites and tektites; historical objects and manuscripts; household and agriculture implements; decorative articles or personal adornment; works of art such as paintings, sculptures, carvings, jewelry, music architecture, sketches, drawings, or illustrations in part or in whole; works of industrial and commercial art such as furniture, pottery, ceramics, wrought iron, gold, bronze, silver, wood or other heraldic items, metals, coins, medals, badges, insignias, coat of arms, crests, flags, arms and armor; vehicles or ships or boats in part or in whole. b cultural properties which have been singled out from among the innumerable cultural properties as having exceptional historical and cultural significance to the Philippines, but are not sufficiently outstanding to merit the classification "National Cultural Treasures" are important cultural properties. c A National Cultural Treasure is a unique object found locally, possessing outstanding historical, cultural artistic and/or scientific value which is highly significant and important to this country and nation. xxx xxx xxx i A historical site is any place, province, city, town and/or any location and structure which has played a significant and important role in the history of our country and nation. Such significance and importance may be cultural, political, sociological or historical. 8 Id., at 193. 9 G.R. No. 122156, February 3, 1997. 10 Comment, Rollo, p. 208. 11 Sec. 13. All restorations, reconstructions, and preservations of government historical buildings, shrines, landmarks, monuments, and sites, which have been designated as "National Cultural Treasures," and "important cultural properties" shall only be undertaken with the written permission of the Director of the National Museum who shall designate the supervision of the same. 12 Secs. 1, 2, 3, Rule 34. Philippine National Bank v. Noah's Ark Sugar Refinery, 226 SCRA 36 (1993); Vergara Sr. v. Suelto, 156 SCRA 753 (1987); Mercado v. Court of Appeals, 162 SCRA 75 (1988). 13 Rule 10, Sec. 3. 14 Rollo, pp. 75-76. The Lawphil Project - Arellano Law Foundation