Army and Navy Club of Manila Inc Vs CA - 110223 - J
Army and Navy Club of Manila Inc Vs CA - 110223 - J
Army and Navy Club of Manila Inc Vs CA - 110223 - J
Kapunan : First Division
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.
D E C I S I O N
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 abovedescribed 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 multistoried 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 multistoried 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 leaseback agreement on the basis of the warranties of
defendant to put up a contemporary multistoried 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
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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 multistoried 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 Judgment[2] 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.
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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 multistorey 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 multistorey
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
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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
Transferee 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 1292, Manila
Book II IBP 320197
Series of 1992 121891, Pasig[8]
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. GSIS[9] where the historical
character of Manila Hotel was also dealt with. He stated that:
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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.
x x x 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 uptodate 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
designationlist 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 its 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. . . .
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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 selfserving. 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 multistorey 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. 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.
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SO ORDERED.
Padilla, Bellosillo, and Hermosisima, Jr., JJ., concur.
Vitug, J., in the result.
[1] Rollo, pp. 8184.
[2] Id., at 108.
[3] Id., at 125.
[4] Id., at 127.
[5] Id., at 2728.
[6] Id., at 203204.
[7]
PRESIDENTIAL DECREE NO. 374 AMENDING CERTAIN SECTIONS OF REPUBLIC ACT NO.
4846. OTHERWISE KNOWN AS THE "CULTURAL PROPERTIES PRESERVATION AND
PROTECTION ACT:
x x x
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. x x x
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 and significance to the nation; such as physical, anthropological,
archaeological and ethnographical materials, meteorites and tektites; historical objects and manuscripts; household and
agricultural 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.
x x x
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 vs. Noah's Ark Sugar Refinery, 226 SCRA 36 (1993); Vergara, Sr.
vs. Suelto, 156 SCRA 753 (1987); Mercado v. Court of Appeals, 162 SCRA 75 (1988).
[13] Rule 10, Sec. 3.
[14] Rollo, pp. 7576.
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