Favis vs. City of Baguio

A municipal corporation expressly granted by its charter the power to close streets may withdraw a portion of a street from public use, convert it into patrimonial property, and lease it for the benefit of the city, and such action will not be disturbed by courts absent a plain showing of abuse of discretion, fraud, or collusion.

Antonio C. Favis purchased a parcel of land of approximately 1,000 square meters from Assumption Convent, Inc., which simultaneously donated to the City of Baguio an adjacent lot designated as a proposed road "for road purposes." Favis used this donated road as his means of ingress and egress between his residence and Lapu-Lapu Street, a public street within the Baguio Market Subdivision held by the City under Transfer Certificate of Title No. 2209. Lot 25 of the same subdivision, the northernmost lot, had been leased by the City to Shell Company of the Philippines since June 1947 under Resolution No. 115, Series of 1947, for a service station. The dispute arose when the City Council sought to expand Shell's lease to include a 100-square-meter portion of Lapu-Lapu Street abutting Lot 25.

On April 30, 1957, Antonio Favis purchased a parcel of land of about 1,000 square meters — Lot 2-E-3-B-3-B-2 of subdivision plan (LRC) Psd-2179 — from Assumption Convent, Inc. The lot is bounded on the southwest by a proposed road, Lot 2-E-3-B-3-B-1, owned by Assumption Convent, Inc. Simultaneous with the sale, Assumption donated this proposed road to the City of Baguio "for road purposes." Favis used the donated road as his means of ingress and egress from his residence to Lapu-Lapu Street, a public street that is actually Lot 27 in the amendatory plan (Bcs-56-Amd 2, Residence Section "B") and part of the Baguio Market Subdivision, all registered in the name of the City under Transfer Certificate of Title No. 2209. From its intersection with Dagohoy Street going northward, Lapu-Lapu Street is eight meters wide. It abruptly ends where it meets the donated road and the lot of Olmina Fernandez. At the exact connecting point of Lapu-Lapu Street and the donated road, the opening is only 2.5 meters wide, as confirmed by ocular inspection conducted by the trial judge.

Lot 25 of the Baguio Market Subdivision, the northernmost lot containing approximately 400 square meters, had been leased by the City to Shell Company since June 1947 under Resolution No. 115, Series of 1947, for a ten-year period renewable for another ten years. Shell constructed a service station of about 335 square meters thereon. On May 10, 1961, the City Council passed Resolution No. 132, authorizing the City, through its Mayor, to lease to Shell two parcels: Lot 25 (Lot A, 335 sq. m.) and an additional area of 100 sq. m. (Lot B) taken from Lapu-Lapu Street, five meters wide and twenty meters long, abutting Lot 25. About three weeks later, the City, through its Mayor, entered into a formal contract of lease with Shell. The Office of the City Engineer, in a letter dated June 30, 1961, noted that Lot B "is exactly within the road right-of-way of Lapu-Lapu Street," is for public use, and may not be leased.

On July 5, 1961, Favis lodged a letter-protest against the additional lease, claiming it would diminish the width of Lapu-Lapu Street to five meters, destroy the street's symmetry, and that the City lacked authority to lease any portion of its public streets. To obviate objections, the City Council on July 19, 1961 passed Resolution No. 215, amending Resolution No. 132 by converting the portion of Lapu-Lapu Street lying southeast from Lot B, beginning at its intersection with Dagohoy Street, into an alley five meters wide (four meters in actual use), and declaring Lot B not part of that alley. The resolution recited that the portion was a dead-end street with little traffic, that conversion would prejudice no person or property, and that provision had been made for another road behind Lapu-Lapu Street intersecting Dagohoy Street.

On November 29, 1961, Favis commenced suit in the Court of First Instance of Baguio for annulment of the lease contract with damages, praying that defendants be ordered to stop and demolish constructions on the leased area, that the building permit and lease contract be cancelled as null and void, and that defendants pay damages totalling ₱50,000, attorney's fees of ₱2,000, and costs. After hearing, the lower court on May 21, 1962 upheld both resolutions and dismissed the complaint with costs. The trial court found that the 2.5-meter opening was sufficient for Favis to enter and exit his lot, that the present road right-of-way was sufficient for his needs, and that the portion leased to Shell was not necessary for public use.

• Form of Enactment: Petitioner argued that the resolutions directing the partial closing of Lapu-Lapu Street and the lease thereof are invalid because they contravene the Baguio City Charter, which provides that the powers granted to the City — including the power to close streets — shall be carried into effect by ordinance, not by resolution.
• Lack of Notice: Petitioner cited the absence of advertisement or direct notice to owners of contiguous properties whose rights might be affected as a ground for invalidating the resolutions, relying on the charter's notice provisions.
• Violation of Executive Order No. 113: Petitioner contended that the resolutions narrowed Lapu-Lapu Street from eight meters to four meters in violation of Executive Order No. 113, Series of 1955, which requires municipal and city roads to have a right-of-way of not less than ten meters.
• Absence of Power to Close Streets: Petitioner asserted that municipal bodies have no inherent power to vacate or withdraw a street from public use, and that a specific legislative grant is required; absent such a grant, the City Council could not close Lapu-Lapu Street.
• Entitlement to Damages: Petitioner averred that the reduction of the street's width made his entrance and exit very difficult, rendered it impossible for his big trucks and trailers to turn around, created fire hazards, and caused perpetual danger, annoyance, irreparable loss, and damage, for which he sought actual, compensatory, corrective, and consequential damages totalling ₱50,000 plus attorney's fees of ₱2,000.

• Form of Enactment: Whether the City Council resolutions are invalid for having been enacted as resolutions rather than ordinances as required by the Baguio City Charter.
• Notice Requirement: Whether the failure to give notice to owners of contiguous properties invalidates the resolutions.
• Street Width Requirement: Whether the resolutions violate Executive Order No. 113, Series of 1955, requiring city roads to have a right-of-way of not less than ten meters.
• Power to Close Streets: Whether the City Council of Baguio has the power to close a city street and convert the closed portion into patrimonial property available for lease.
• Entitlement to Damages: Whether petitioner is entitled to damages for the closing of a portion of Lapu-Lapu Street.

• Form of Enactment: No. The resolutions are valid and have the force of ordinances, having been unanimously approved with all councilors present and voting, carrying the seal of the city council, signed by the Vice-Mayor as Presiding Officer, approved by the Mayor, and attested by the City Secretary — all with the formalities required for an ordinance.
• Notice Requirement: No. The charter's notice requirement applies only when an ordinance calls for an assessment against affected persons; since the resolutions did not call for any assessment, the notice need not have been given. Moreover, petitioner actually protested Resolution No. 132, and the purpose of notice was thus subserved.
• Street Width Requirement: No. Executive Order No. 113 did not demand the widening to ten meters of streets already existing before its promulgation; Lapu-Lapu Street was only eight meters wide even before the order was issued, and the leased portion does not reach the 2.5-meter opening connecting to the donated road.
• Power to Close Streets: Yes. The Baguio City Charter, Section 2558(L) of the Revised Administrative Code, expressly empowers the City to "close up" public streets, in whole or in part; the withdrawn portion becomes patrimonial property under Article 422 of the Civil Code and may be leased under Section 2541 of the Revised Administrative Code.
• Entitlement to Damages: No. Petitioner suffered no special damage differing in kind, and not merely in degree, from that sustained by the public generally; his property does not abut the closed section, the remaining width is sufficient for his needs, and the situation constitutes damnum absque injuria.

• Form of Enactment: The objection was directed at form, not substance. Where a resolution is passed in the manner and with the statutory formality required in the enactment of an ordinance, it is binding and effective as an ordinance regardless of the name by which it is called. Resolutions No. 132 and 215 were unanimously approved with all councilors present and voting, carried the seal of the city council, were signed by the Vice-Mayor as Presiding Officer, approved by the Mayor, and attested by the City Secretary. With the presumption of validity and the presumption that official duty has been regularly performed, the resolutions are just as good as ordinances and have the same force.

• Notice Requirement: The charter's notice provision applies to persons "affected thereby and assessed thereunder" — the accent being on the word "and," meaning the person affected must also be assessed. The notice must set forth the nature of the proposed improvement, the estimated cost, the total assessment to be levied, and the amount to be levied upon each parcel. The council, after hearing objections, may alter, modify, or increase the assessment. This method of giving notice thus applies only when an ordinance calls for an assessment. Since the resolutions did not call for any assessment against petitioner or his land, the notice need not have been given. Furthermore, petitioner actually protested Resolution No. 132, which protest was overruled, and the council then passed Resolution No. 215 confirming the lease — thereby subserving the purpose of notice.

• Street Width Requirement: Three reasons defeated this objection. First, the 2.5-meter opening connecting the donated road and Lapu-Lapu Street had always been that wide since the donated road was opened; the occupancy by Shell of a portion of the road right-of-way did not put petitioner to any greater inconvenience. Second, the leased portion is on the left side of Lapu-Lapu Street, while the opening lies on the right uppermost part; the leased strip does not reach the opening, and Shell in fact occupied only four meters of the five-meter authorized width. Third, Executive Order No. 113 could not have been violated because Lapu-Lapu Street was only eight meters wide even before the order's promulgation, and the order did not demand widening of existing streets to ten meters — doing so would have entailed huge expenditures for expropriation of private property not only for Baguio but for many other municipal corporations.

• Power to Close Streets: Municipal corporations in the Philippines are mere creatures of Congress and possess only such powers as Congress grants. Section 2558(L) of the Revised Administrative Code (Baguio Charter) expressly empowers the City "to provide for laying out, opening, extending, widening, straightening, closing up, constructing, or regulating, in whole or in part, any public plaza, square, street, sidewalk, trail, park, waterworks, or water remains, or any cemetery, sewer, sewer connection or connections, either on, in, or upon public or private property." This express grant stands in contrast to the situation in Unson vs. Lacson, where the City of Manila's charter contained no such grant of closing power. The city council is the authority competent to determine whether property is still necessary for public use; such power to vacate a street is discretionary and will not ordinarily be controlled by courts absent a plain case of abuse, fraud, or collusion. The City Council considered relevant factors: the street was a dead end with little traffic, conversion would prejudice no person or property, and provision was made for another road behind Lapu-Lapu Street intersecting Dagohoy Street. The trial court's findings — that the 2.5-meter opening was sufficient, the road right-of-way was sufficient for petitioner's needs, and the leased portion was not necessary for public use — were binding. Given the broad scope of municipal discretion under the Local Autonomy Law (R.A. 2264) and absent clear abuse, the withdrawal and conversion did not call for judicial interference. The withdrawn strip, no longer intended for public use, became patrimonial property under Article 422 of the Civil Code, and the City was expressly empowered to lease real property for the benefit of the city under Section 2541 of the Revised Administrative Code.

• Entitlement to Damages: The governing principle is that one whose property does not abut on the closed section of a street has no right to compensation if he still has reasonable access to the general system of streets; to warrant recovery, the property owner must show special damages differing in kind, and not merely in degree, from those sustained by the public generally. No private right of petitioner was invaded. His property does not abut Lapu-Lapu Street. The trial court found the remaining four-meter width sufficient for his needs and the leased portion unnecessary for public use. It is physically impossible to connect Lapu-Lapu Street in its full eight-meter width with the donated area because the only outlet between them is 2.5 meters wide. Petitioner's claim that his big trucks could not turn around was of dubious veracity, given his own testimony that turning around at the original Lapu-Lapu Street had never been tried and that his trucks maneuvered at the intersection of Dagohoy Street and Lapu-Lapu Street. The Constitution does not guarantee a property owner the maintenance of the most convenient route to his door; he must accept such route as public authority deems compatible with public welfare. The inconvenience imposed constitutes damnum absque injuria.

• Express Grant of Municipal Powers — Municipal corporations in the Philippines are mere creatures of Congress and possess only such powers as Congress may deem fit to grant. The absence of an express grant of a specific power (as contrasted with its express grant to other municipalities) leads to the conclusion that the power was intended to be withheld. Applied here, the Baguio Charter's express inclusion of "closing up" in Section 2558(L) distinguished this case from Unson vs. Lacson, where the Manila charter was silent on street closing.

• Resolution as Ordinance — Even where a statute or municipal charter requires the municipality to act by ordinance, a resolution passed in the manner and with the statutory formality required in the enactment of an ordinance is binding and effective as an ordinance. The substance, not the form, of the corporate act governs.

• Conversion of Public Property to Patrimonial Property — Property of public domain, when no longer intended for public use or public service, forms part of the patrimonial property of the State under Article 422 of the Civil Code. Property for public use of provinces and towns is governed by the same principles as property of public dominion of the same character. Once converted to patrimonial property, the withdrawn portion may be leased under the City's charter powers.

• Discretionary Power to Close Streets — The power to vacate a street or alley is discretionary with the municipal corporation. Courts will not ordinarily interfere absent a plain case of abuse, fraud, or collusion. Faithfulness to the public trust is presumed, and the fact that some private interests may be served incidentally does not invalidate the vacation ordinance. Material factors to consider include: the topography of surrounding property in light of ingress and egress; the relationship of the street to the road system; the problem posed by a dead end; the width of the street; the cost of rebuilding and maintaining versus its value to nearby property; the inconvenience to visitors; and whether closing would cut off any property owner from access to a street.

• Damnum Absque Injuria in Street Vacation — One whose property does not abut on the closed section of a street has no right to compensation for the closing if he still has reasonable access to the general system of streets. To warrant recovery, the property owner must show special damages differing in kind, and not merely in degree, from those sustained by the public generally. The Constitution does not guarantee a property owner the most convenient route to his door; inconvenience imposed by abandonment of a street to which his property is not immediately adjacent is damnum absque injuria.

• "The general rule is that one whose property does not abut on the closed section of a street has no right to compensation for the closing or vacation of the street, if he still has reasonable access to the general system of streets." — This passage articulates the controlling principle on compensability for street vacation, establishing the kind-not-degree test for special damages that bars recovery by non-abutting owners.

• "The Constitution does not undertake to guarantee to a property owner the public maintenance of the most convenient route to his door." — This formulation defines the constitutional limit of a property owner's right of access, grounding the doctrine of damnum absque injuria in the context of municipal street closures.

• "municipal corporations in the Philippines are mere creatures of Congress; that, as such, said corporations possessed, and may exercise, only such power as Congress may deem fit to grant thereto" — This statement restates the foundational principle of Philippine municipal law that municipal powers are derivative and strictly conferred, framing the inquiry into whether the power to close streets was expressly granted.

• Unson vs. Lacson, 100 Phil. 695 — Distinguished. In Unson, the Court held that the City of Manila lacked the power to close a street because its charter (R.A. No. 409) said "nothing about the closing" of streets, in contrast to Section 2246 of the Revised Administrative Code, which expressly vested that power in municipal councils of regularly organized municipalities. In the present case, the Baguio Charter expressly included "closing up" in Section 2558(L), making Unson inapplicable and confirming the City's authority.

• Section 2558(L), Revised Administrative Code (Baguio City Charter) — Expressly empowers the City of Baguio "to provide for laying out, opening, extending, widening, straightening, closing up, constructing, or regulating, in whole or in part, any public plaza, square, street, sidewalk, trail, park, waterworks, or water remains, or any cemetery, sewer, sewer connection or connections, either on, in, or upon public or private property." This provision was the textual basis for the City's authority to close a portion of Lapu-Lapu Street.

• Section 2553, Revised Administrative Code (Baguio City Charter) — Provides that the powers granted to the City, including the power to close streets, shall be carried "into effect by ordinance," and specifies the notice requirement for ordinances calling for assessments. The Court held that the notice requirement applies only when an assessment is levied, and that resolutions enacted with ordinance-level formality have the force of ordinances.

• Article 422, Civil Code of the Philippines — Provides that property of public domain, "when no longer intended for public use or public service, shall form part of the patrimonial property of the State." Applied to hold that the withdrawn strip of Lapu-Lapu Street, no longer for public use, became patrimonial property available for lease.

• Section 2541, Revised Administrative Code (Baguio City Charter) — Empowers the City of Baguio to "lease ... real ... property, for the benefit of the city." This provision authorized the lease of the withdrawn patrimonial strip to Shell.

• Executive Order No. 113, Series of 1955 — Prescribes that municipal and city roads shall have a right-of-way of not less than ten meters. The Court held this did not apply retroactively to require widening of pre-existing streets narrower than ten meters.

• Republic Act No. 2264 (Local Autonomy Law) — The Court invoked the broad scope of municipal discretion under this law as a basis for according great deference to the City Council's determination, absent clear abuse of discretion.

Dizon, Makalintal, Zaldivar, Fernando, Teehankee, and Barredo, JJ., concurred. Reyes, J.B.L., Acting Chief Justice, concurred and certified that the Chief Justice voted in favor of this opinion before going on official leave.