Melliza vs. City of Iloilo

A conveyance's object need not be specifically identified by lot number if it is capable of being made determinate without a new agreement between the parties, such as by reference to an existing development plan that fixes the area and location needed for a stated purpose; where the vendee's long, uninterrupted possession of a contiguous lot is consistent with the instrument's terms, and the vendee's successor-in-interest was the notary public who failed to object for twenty years, laches and estoppel bar recovery of that lot.

Juliana Melliza owned, among other properties, three parcels of residential land in Iloilo City registered under Original Certificate of Title No. 3462, known as Lots Nos. 2, 5, and 1214, the last having a total area of 29,073 square meters. On November 27, 1931, she donated 9,000 square meters of Lot 1214 to the then Municipality of Iloilo as a site for the municipal hall, but the donation was revoked by the parties because the area was inadequate under the "Arellano Plan" — a development plan for the municipal government center that had been in existence since 1928. The Municipality of Iloilo later became the City of Iloilo, which on August 24, 1949 donated the city hall site and building thereon to the University of the Philippines (Iloilo branch). Pio Sian Melliza derived his title to portions of Lot 1214 through Remedios Sian Villanueva, who had purchased Juliana Melliza's remaining interest in the lot on January 14, 1938 and transferred her rights to Pio Sian Melliza on November 4, 1946.

Juliana Melliza owned three parcels of residential land in Iloilo City registered under Original Certificate of Title No. 3462, known as Lots Nos. 2, 5, and 1214, the last having a total area of 29,073 square meters. On November 27, 1931, she donated 9,000 square meters of Lot 1214 to the Municipality of Iloilo to serve as a site for the municipal hall. That donation was revoked by the parties because the area was found inadequate to meet the requirements of the development plan known as the "Arellano Plan," which had been in existence since 1928. Lot 1214 was subsequently subdivided by Certeza Surveying Co., Inc. into Lots 1214-A and 1214-B, and Lot 1214-B was further divided: Lot 1214-B-1 (4,562 sq m) became known as Lot 1214-B; Lot 1214-B-2 (6,653 sq m) was designated Lot 1214-C; and Lot 1214-B-3 (4,135 sq m) became Lot 1214-D.

On November 15, 1932, Juliana Melliza executed an instrument without any caption whereby, in consideration of ₱6,422.00 received from the Municipal Government of Iloilo, she sold and transferred Lot 5 in its entirety, a portion of 7,669 square meters of Lot 2 (designated as sub-lots 2-B and 2-C), and a portion of 10,788 square meters of Lot 1214 (designated as sub-lots 1214-B-2 and 1214-B-3, i.e., Lots 1214-C and 1214-D). The instrument's second paragraph stated that the cession was a definitive sale and that the lots and portions conveyed were those needed by the Municipal Government of Iloilo for the construction of avenues, parks, and the city hall site of the Municipal Government Center of Iloilo, according to the Arellano Plan.

On January 14, 1938, Juliana Melliza sold her remaining interest in Lot 1214 to Remedios Sian Villanueva, who obtained Transfer Certificate of Title No. 18178. On November 4, 1946, Remedios transferred her rights to Pio Sian Melliza, who obtained Transfer Certificate of Title No. 2492. Annotated at the back of his title was the notation that a portion of 10,788 square meters of Lot 1214, designated as Lots 1214-B-2 and 1214-B-3, belonged to the Municipality of Iloilo as per the instrument dated November 15, 1932. The sale to Remedios Sian Villanueva — from which Pio Sian Melliza derived title — did not specifically designate Lot 1214-B but only such portions of Lot 1214 as were not included in the previous sale to Iloilo municipality. Pio Sian Melliza had served as the notary public of the 1932 instrument and was thus aware of its terms.

On August 24, 1949, the City of Iloilo, which had succeeded to the Municipality of Iloilo, donated the city hall site together with the building thereon to the University of the Philippines (Iloilo branch). The site donated consisted of Lots 1214-B, 1214-C, and 1214-D, with a total area of approximately 15,350 square meters. The University of the Philippines obtained Transfer Certificate of Title No. 7152 covering all three lots. Sometime in 1952, the University enclosed the site with a wire fence. Pio Sian Melliza made representations through his lawyer with the city authorities for payment of the value of Lot 1214-B, but no recovery was obtained because, as alleged, the City did not have funds. For twenty years, Pio Sian Melliza and his predecessors-in-interest did not object to the possession of Lot 1214-B by the Municipality, then the City of Iloilo, and later the University of the Philippines, nor did they exercise any act of possession over it.

On December 10, 1955, Pio Sian Melliza filed an action in the Court of First Instance of Iloilo against Iloilo City and the University of the Philippines for recovery of Lot 1214-B or its value. After stipulation of facts and trial, the CFI dismissed the complaint on August 15, 1957, ruling that the 1932 instrument included Lot 1214-B in the conveyance. The Court of Appeals affirmed this interpretation on May 19, 1965, but remanded for reception of evidence to determine the area actually taken by Iloilo City. Pio Sian Melliza then appealed to the Supreme Court.

• Clarity of the Instrument: Petitioner maintained that the public instrument is clear that only Lots 1214-C and 1214-D, with a total area of 10,788 square meters, were the portions of Lot 1214 included in the sale, and that the purpose of the second paragraph was merely to better identify the lots already sold and none other.
• Indeterminacy of Object: Petitioner argued that to follow the interpretation accorded the deed of sale by the lower courts would render the contract invalid because the law requires, as an essential element of sale, a "determinate" object (Art. 1445, now 1448, Civil Code).
• Arellano Plan Not Yet Fixed: Petitioner claimed that although the Arellano Plan existed, its metes and bounds were not fixed until 1935, and thus it could not serve as a basis for determining the lots sold on November 15, 1932.

• Question of Fact: Respondents contended that the present appeal improperly raises only questions of fact.
• Intention to Include Lot 1214-B: Respondents argued that the parties to the document really intended to include Lot 1214-B therein, as shown by the silence of the vendor after Iloilo City exercised ownership thereover, and that not to include it would have been absurd because said lot is contiguous to the others admittedly included in the conveyance, lying directly in front of the city hall and separating that building from Lots 1214-C and 1214-D.
• Determinate Object: Respondents argued that the sale's object was determinate because, at the time of execution of the contract, it could be ascertained what lots were needed by Iloilo municipality for avenues, parks, and city hall site "according to the Arellano Plan," since the Arellano Plan was then already in existence.

• Scope of the Conveyance: Whether Lot 1214-B was included in the November 15, 1932 public instrument executed by Juliana Melliza in favor of the Municipality of Iloilo.
• Determinate Object: Whether the object of the sale was determinate as required by law, given that the second paragraph of the instrument referred to lots needed for the city hall site, avenues, and parks "according to the Arellano Plan" without specifying them by lot number.

• Scope of the Conveyance: Yes. Lot 1214-B was included in the conveyance, the second paragraph of the instrument having been intended to cover other lots not yet specifically mentioned — namely, contiguous portions needed for the city hall site under the Arellano Plan — and not merely to re-describe lots already plainly identified by lot number and area.
• Determinate Object: Yes. The object was determinate because the specific mention of some lots plus the reference to the Arellano Plan, which was in existence at the time of execution, provided a basis for ascertaining which contiguous portions were needed without requiring a new or further agreement between the parties (Art. 1273, old Civil Code; Art. 1460, New Civil Code).

• Scope of the Conveyance: The paramount intention of the parties was to provide Iloilo municipality with lots sufficient in area for the construction of the city hall site with its avenues and parks — as evidenced by the fact that a previous donation for the same purpose had been revoked for inadequacy of area. Reading the instrument in toto, the first paragraph describes four parcels of land by lot number and area with sufficient clarity. The second paragraph, stating that the lots object of the sale are those needed for the city hall site, avenues, and parks according to the Arellano Plan, does not add to the description already given; it would be superfluous if it merely re-identified the same lots. The more reasonable interpretation is that it describes other portions of land contiguous to the lots already mentioned that, by reference to the Arellano Plan, would be found needed for the stated purpose. Lot 1214-B is contiguous to Lots 1214-C and 1214-D, admittedly covered by the instrument, and sits practically in the heart of the city hall site. After execution of the contract, the Municipality of Iloilo possessed it together with the other lots sold. Furthermore, Pio Sian Melliza was the notary public of the instrument and was thus aware of its terms; the instrument was registered with the Register of Deeds and annotated on Juliana Melliza's title. He should have examined the Arellano Plan in relation to the instrument and should have taken notice of the possession by the Municipality, the City, and later the University of the Philippines of Lot 1214-B. For twenty years, neither he nor his predecessors-in-interest objected to said possession or exercised any act of possession over the lot. Applying principles of civil law, laches, estoppel, and equity, Lot 1214-B must be deemed included in the conveyance.
• Determinate Object: The requirement that a sale must have a determinate object is fulfilled when, at the time the contract is entered into, the object is capable of being made determinate without the necessity of a new or further agreement between the parties (Art. 1273, old Civil Code; Art. 1460, New Civil Code). The specific mention of some lots, plus the statement that the lots object of the sale are those needed for the city hall site, avenues, and parks according to the Arellano Plan, sufficiently provides a basis — as of the time of execution — for rendering the lots determinate without a new agreement. The Arellano Plan existed as early as 1928, and the area needed for the city hall site was then already known. The specific mention of some lots in effect fixed the corresponding location of the city hall site under the plan. Considering those lots and the projected city hall site with its area as shown in the Arellano Plan, it could be determined which and how much of the contiguous portions were needed. Petitioner's claim that the plan's metes and bounds were not fixed until 1935 fails because the area needed was already known and the location was fixed by the specifically mentioned lots.

• Determinate Object in Sales (Art. 1460, Civil Code; Art. 1273, Old Civil Code) — The requirement that the object of a sale must be determinate is satisfied if, at the time the contract is entered into, the object is capable of being made determinate without the necessity of a new or further agreement between the parties. The Court applied this by holding that the specific mention of certain lots combined with reference to an existing plan (the Arellano Plan) sufficiently rendered the object determinate, since the plan's existence at the time of execution allowed identification of the additional lots needed without a new agreement.
• Contract Interpretation — Reading the Instrument in Toto — When interpreting a contract, the entire instrument must be read as a whole, and each part should be interpreted with reference to the others. The Court applied this by reading the second paragraph of the 1932 instrument in relation to the first, concluding that the second paragraph was not merely redundant but covered additional lots beyond those already specifically described.
• Laches, Estoppel, and Equity — Long, uninterrupted possession by a vendee consistent with the instrument's terms, coupled with the vendee's successor-in-interest having been the notary public of the instrument and having failed to object or assert rights for twenty years, bars recovery under principles of laches, estoppel, and equity. The Court applied these principles against Pio Sian Melliza, who knew or was chargeable with knowledge of the instrument's terms, yet failed to act for two decades.

• "The requirement of the law that a sale must have for its object a determinate thing, is fulfilled as long as, at the time the contract is entered into, the object of the sale is capable of being made determinate without the necessity of a new or further agreement between the parties (Art. 1273, old Civil Code; Art. 1460, New Civil Code)." — This passage states the controlling rule on determinate objects in sales and explains why the 1932 instrument was valid despite not specifying Lot 1214-B by lot number.
• "Applying, therefore, principles of civil law, as well as laches, estoppel, and equity, said lot must necessarily be deemed included in the conveyance in favor of Iloilo municipality, now Iloilo City." — This passage states the dispositive ratio on the scope-of-conveyance issue, combining the contract-interpretation analysis with the equitable bar arising from petitioner's twenty-year inaction.
• "It is therefore the more reasonable interpretation, to view it as describing those other portions of land contiguous to the lots aforementioned that, by reference to the Arellano plan, will be found needed for the purpose at hand, the construction of the city hall site." — This passage articulates the Court's interpretive approach to the second paragraph of the instrument, distinguishing it from mere surplusage.

• Article 1273, Old Civil Code — Provides that the object of a sale must be determinate or capable of being made determinate without the necessity of a new or further agreement. The Court cited this provision to support its ruling that the object of the 1932 sale was determinate, since the Arellano Plan's existence at the time of execution allowed identification of the lots needed without a new agreement.
• Article 1460, New Civil Code — The successor provision to Article 1273, stating the same requirement of a determinate object. The Court applied it identically to uphold the validity of the sale.
• Article 1445, now 1448, Civil Code — Cited by petitioner as requiring a determinate object as an essential element of sale; the Court acknowledged the requirement but found it satisfied under the facts.

Reyes, J.B.L., Actg. C.J., Dizon, Makalintal, Zaldivar, Sanchez, Castro, Angeles, and Fernando, JJ., concurred. Concepcion, C.J., was on leave.