White Plains Homeowners Association, Inc. vs. Court of Appeals

A reservation or lien imposed on private land for a specific public highway ceases when the government abandons that project and builds the highway elsewhere; the unused land reverts to its titled owner, who cannot be compelled to donate it or devote it to another public purpose without expropriation and just compensation.

QCDFC owned and developed White Plains subdivision and sold lots to residents who formed the White Plains Homeowners Association, Inc. Road Lot 1, covered by TCT Nos. 156185, 156186, and 156187, was reserved for the proposed Highway 38, later identified with Katipunan Parkway or C-5. The same parties had already litigated the status of Road Lot 1 in G.R. No. 55868 and G.R. No. 95522, where the SC dealt with whether the strip was beyond the commerce of man and whether it should be donated to Quezon City.

QCDFC owned and developed White Plains subdivision in Quezon City before selling lots to residents who comprised the petitioner White Plains Homeowners Association, Inc. The disputed area covered by TCT Nos. 156185, 156186, and 156187 was set aside and dedicated to the proposed Highway 38 of Quezon City. As subdivision owner and developer, QCDFC represented to lot buyers that there would be a thoroughfare known as Katipunan Avenue and that the width of the land allotted to the road was 38 meters. Of the 38 meters, QCDFC developed only 20 meters; the undeveloped strip of land, 18 meters in width, of the proposed Katipunan Avenue remained the subject of court litigation. QCDFC later asserted that it never made any representation to prospective homeowners that it would on its own initiative build a 38-meter wide Katipunan Avenue, and it identified Annex “1-B” of the rejoinder as the only representation submitted as evidence during trial.

As early as April 14, 1970, QCDFC filed a petition with the then CFI of Rizal for the conversion into residential lots of the undeveloped strip. The controversy reached the SC, and on November 14, 1985, the SC en banc dismissed the petition, ruling that “Road Lot 1 is withdrawn from the commerce of man and should be developed for the use of the general public.” Sometime in 1989, the Department of Public Works & Highways, through a private contractor, began widening Katipunan Avenue by 4-5 meters. QCDFC filed a complaint for injunction and damages in the RTC of Quezon City to enjoin the widening as registered owner, and the writ prayed for was granted. The Association, as intervenor, elevated the case to the SC on certiorari in G.R. No. 95522, White Plains, Inc. vs. Legaspi. The SC reiterated that Road Lot 1 had been withdrawn from the commerce of man and constituted part of mandatory open space reserved for public use. Its February 7, 1991 decision directed QCDFC to execute a Deed of Donation of the remaining undeveloped Road Lot 1, about 18 meters wide, in favor of the Quezon City government; otherwise, the Register of Deeds of Quezon City was directed to cancel the registration of Road Lot 1 under TCT No. 112637 and issue a new title in the name of the Quezon City government. QCDFC filed a series of motions for reconsideration, and on the second motion, the SC issued a resolution dated July 27, 1994, deleting the second sentence of the dispositive portion, leaving the petition granted, the questioned orders reversed and set aside, and costs against QCDFC.

The undeveloped 18-meter portion was occupied by garden operators who paid the Association monthly “special occupancy dues” for the use of their respective areas as commercial gardens and landscaping business. From 1985 to June 1995, the Association collected and received the monthly rentals. QCDFC demanded that the Association account for and deliver the amount collected from the garden operators, but the Association ignored the demand. On August 4, 1985, QCDFC filed an action to enjoin the Association from collecting rentals from the garden operators occupying the undeveloped 18-meter width of the proposed Katipunan Avenue (Highway 38). The case was raffled to Branch 222 of the RTC of Quezon City, presided by Judge Eudarlio B. Valencia, who issued a temporary restraining order commanding the Association to desist and refrain from collecting rentals from the occupants/possessors of the undeveloped 18-meter width. Thereafter, the respondent judge issued an order granting the application for preliminary injunction.

Aggrieved, the Association filed with the CA a petition for certiorari to set aside the order. The CA, in its decision dated December 14, 1985, upheld the Association’s theory that the strip of undeveloped land, 18 meters wide, of the proposed 38-meter wide Katipunan Avenue no longer belonged to QCDFC. However, it ruled that the strip belonged to Quezon City, which had the right to lease/rent and collect therefrom the “special occupancy dues.” It set aside the RTC order granting the writ of preliminary injunction. The Association and QCDFC separately filed motions for reconsideration. QCDFC prayed that the CA decision be set aside, while the Association filed a partial motion for reconsideration seeking modification by deleting the obiter dictum regarding the authority of Quezon City to collect occupancy dues from tenants of the disputed property. The CA, in its assailed resolution dated January 31, 1997, granted QCDFC’s motion for reconsideration and denied the Association’s. In the process, it ruled that “on the basis of the records and applicable law” the “full right of possession and ownership of the disputed property should now be restored to QCDFC.”

The CA’s resolution also contained “Antecedents” stating that White Plains Subdivision was developed by QCDFC as early as 1960; that when the National Planning Commission approved the subdivision plans, it required QCDFC to set aside Road Lot 1 for the construction of a parkway known as Highway 38, also known as an extension of Katipunan Avenue and later as C-5; that C-5 was planned as a 38-meter wide secondary national road to traverse Quezon City and Rizal Province; that the land set aside for C-5 was at the exact place where White Plains Subdivision shares a common boundary with Camp Aguinaldo, with Road Lot 1 traversing the western periphery of the subdivision on a north-to-south direction; and that the 18-meter wide remaining portion remained undeveloped for the past thirty-six years because the DPWH could not make up its mind as to when and where C-5 should be constructed. The CA found that C-5 was constructed along Libis, completely bypassing White Plains, and that the National Government had fully abandoned its earlier plan. It also found that Road Lot 1 had not been donated, no deed of donation existed, and title thereto had always been and remained in the name of QCDFC, with a reservation for C-5 annotated at the back of TCT No. 112637. The CA further found that Quezon City had expressly excluded Road Lot 1 from the streets and open spaces of White Plains donated by QCDFC and accepted by the City. The Association admitted that it was not the owner of the disputed property.

• Prior SC Rulings: Petitioner argued that the CA erroneously refused to follow the SC’s rulings in the two previous cases involving the same parties that Road Lot 1 is beyond the commerce of man and part of mandatory open space reserved for public use to be improved into the widened Katipunan Avenue.
• Factual Findings Without Support: Petitioner argued that the CA committed reversible error in junking the SC’s ruling based on findings of fact totally devoid of support in the record or evidence.
• Res Judicata: Petitioner argued that the CA erred in refusing to apply res judicata despite the presence of all the requisites; the lot could still be developed for the benefit of the public because it was reserved as an open space.
• Scope of CA Resolution: Petitioner argued that the CA committed reversible error in going beyond the issues on the validity or propriety of the writ of preliminary injunction and beyond the relief prayed for by giving “full rights of possession and ownership” to QCDFC.
• Preliminary Injunction: Petitioner argued that the CA erroneously sustained the RTC’s issuance of the writ of preliminary injunction because (a) the case is barred by prior judgment; (b) QCDFC does not have a “clear and unmistakable” right to injunctive relief; (c) QCDFC will not suffer any irreparable injury since its alleged injury is quantifiable and may be fully compensated in damages; and (d) a court should not issue a writ of preliminary injunction if its issuance would in effect dispose of the case on the merits.

• Finality of Prior Judgments: Respondent QCDFC countered that the ruling in White Plains Association vs. Legaspi was not the final judgment; the February 7, 1991 “beyond the commerce of man” dictum and dispositive portion were set aside and modified on July 17, 1994 upon a second motion for reconsideration; title to Road Lot 1 remains in QCDFC but a lien or reservation for Highway 38, now C-5, stays imposed.
• Supervening Event: Respondent argued that since C-5 did not pass through Road Lot 1 and was built in Libis, the lien or reservation was overtaken by supervening events and no longer valid; the decision should lift the meaningless and obsolete reservation or lien.
• No Representation / Nature of Road: Respondent asserted that it never represented to prospective homeowners that it would build a 38-meter wide Katipunan Avenue; the only representation was a nine-page brochure; a 38-meter wide road by nature and definition is a parkway, not a subdivision street, and its construction is the responsibility of the DPWH, not the developer or the City.
• Ownership and Donation: Respondent contended that Road Lot 1 was specifically reserved only for the eventual construction of C-5; no deed of donation exists; subdivision streets belong to the owner until donated to the government or expropriated upon payment of just compensation; if Quezon City wants to use the strip for another public purpose, it must institute eminent domain proceedings and pay just compensation.
• Equal Protection: Respondent argued that it was denied equal protection because developers of St. Ignatius Village and Green Meadows Subdivisions were allowed to construct only 17- or 18-meter wide roads and sell part of their proposed 38-meter wide major thoroughfare to private persons, while QCDFC had to reserve the entire 38-meter wide portion indefinitely; similar treatment must be given to QCDFC.

• Res Judicata: Whether the CA erred in refusing to apply res judicata based on the SC’s prior rulings in G.R. No. 55868 and G.R. No. 95522 that Road Lot 1 is beyond the commerce of man and reserved for public use.
• Purpose and Use of Road Lot 1: Whether the 38-meter wide strip was set aside exclusively for the thoroughfare known as C-5/Highway 38/Katipunan Parkway, and whether, after C-5 was built elsewhere, the reserved area may be used for any other public purpose.
• Factual Findings: Whether the CA’s factual findings were devoid of support in the record or evidence.
• Preliminary Injunction and Scope of Relief: Whether the CA erred in sustaining the RTC’s issuance of the writ of preliminary injunction and in awarding full rights of possession and ownership to QCDFC.
• Ownership, Possession, and Lien: Whether full rights of possession and ownership over the disputed 18-meter strip should be restored to QCDFC and the reservation or lien lifted.

• Res Judicata: No. The prior White Plains judgments did not finally resolve all issues; G.R. No. 55868 left matters to negotiation or further litigation, and the donation order in G.R. No. 95522 was deleted on reconsideration, leaving title with QCDFC subject to a lien.
• Purpose and Use of Road Lot 1: Yes, Road Lot 1 was reserved exclusively for C-5/Highway 38; after C-5 was built elsewhere, the reservation ceased, and the strip could not be devoted to another public purpose without expropriation and just compensation.
• Factual Findings: No. The CA’s findings were drawn from prior decisions and public notice, and the petitioner did not refute them as false; it merely asserted they were not in the records of the instant petition.
• Preliminary Injunction and Scope of Relief: No. The grounds were subsumed in the ownership issue; determining who should receive rentals required resolving ownership and possession, and the CA could not be faulted for alleged over-breadth.
• Ownership, Possession, and Lien: Yes. The reservation or lien was lifted, and full rights of ownership, including development and collection of fees and rentals from the gardeners, were restored to QCDFC.

• Res Judicata: The SC held that res judicata did not apply because the prior judgments did not finally determine all the issues. In G.R. No. 55868, the SC ordered the Register of Deeds to cancel TCT Nos. 156185, 156186, and 156187 and issue TCT No. 112637 in QCDFC’s name with the reservation or lien annotated, but the resolution also stated that matters such as sales to buyers in good faith, payment of real estate taxes, and collection of rentals could no longer be addressed in that proceeding and their appropriate venue lay in negotiation or further litigation. In G.R. No. 95522, the February 7, 1991 decision directed QCDFC to execute a deed of donation or, otherwise, the Register of Deeds to cancel its title and issue a new one to Quezon City, but the July 27, 1994 resolution on the second motion for reconsideration deleted that order. The final judgment left title with QCDFC subject to the lien. The SC also considered the supervening event that C-5 was built in Libis, completely bypassing Road Lot 1, so the purpose of the reservation could no longer be accomplished. The SC agreed with the CA that there can be no res judicata for something which can no longer be accomplished, and that where the previous judgment did not determine all the issues because it required the parties to negotiate or litigate, res judicata cannot be invoked.
• Purpose and Use of Road Lot 1: The SC reviewed the subdivision plan and brochure and agreed with the CA that Road Lot 1 was exclusively intended for C-5. The reserved Katipunan Parkway, by its width, dimensions, and location, would not have been intended for any other purpose except as a highway or thoroughfare; the map clearly indicated it was not reserved for a park, a school campus, nor even a subdivision street. A 38-meter wide road by its nature and definition is a parkway, not a subdivision street; its construction was the responsibility of the DPWH, not the developer and not even the City, and the lien or reservation was imposed by the national government. The SC found that C-5 was constructed along Libis, completely bypassing White Plains, and the National Government had fully abandoned its earlier plan. Because the specific purpose of the reservation was abandoned, the reservation or lien ceased to have any force, and the unused portion had to revert to its titled owner. The SC also held that Road Lot 1 could not be devoted to other public purposes such as a park or playground; the reservation arose from a specific plan or project of the National Government, not from any law, regulation, or ordinance, and Quezon City could not claim an idle piece of property intended for a major thoroughfare and use it for a purpose other than C-5. If Quezon City wanted to use the strip for another public purpose, it had to institute eminent domain proceedings and pay just compensation. The SC agreed with the CA’s citation of Barreto vs. City of Manila and Article 764 of the Civil Code that a donation for a specific public purpose cannot be used for another purpose.
• Factual Findings: The SC held that the CA’s factual findings were not devoid of support. The “Antecedents” in the assailed resolution were culled from previous decisions of the SC and the CA, and the issue of res judicata itself required an examination of the earlier decisions. The fact that Road Lot 1 was reserved to form part of the national expressway in Quezon City was a finding in G.R. No. 95522. The name C-5 was publicized only recently, and Highway 38, Katipunan Parkway/Avenue, and C-5 were used interchangeably; no proof was needed for the existence of C-5, just as no proof was needed that EDSA was earlier known as Highway 54. The nature and appearance of the street along Camp Aguinaldo on one side and White Plains and St. Ignatius subdivision on the other were matters of public notice. The petitioner did not refute the factual findings as false; it merely stated that they were not found in the records of the instant petition. The SC held that the petition could not be resolved in isolation from the earlier cases.
• Preliminary Injunction and Scope of Relief: The SC held that the third and fourth grounds were subsumed in the discussion of the first two grounds. The CA decision could not be faulted for alleged over-breadth. The issue of whom rentals should be paid could not be resolved without determining who legally owned or possessed the property; it also raised the question of the legality of the gardeners’ continued occupancy. The Association admitted that it was not the owner of the disputed property. Quezon City had expressly excluded Road Lot 1 from the streets and open spaces of White Plains donated by QCDFC and accepted by the City. Quezon City could not be the owner of a national highway traversing not only the city but other cities and municipalities as well. The national government had constructed C-5 in another location, thereby abandoning the reserved highway. Only a lien or reservation for Highway 38 or C-5 was imposed on the developer; there was no requirement that QCDFC would develop the highway because the construction of national highways is a function of the national government. Under the facts and applicable law, there was no reason why QCDFC should be restrained from exercising the rights of full ownership and possession with no more reservation or lien.
• Ownership, Possession, and Lien: The SC held that the unresolved issues had to be decided and treated the petition in the light of unsettled matters in the two earlier decisions. The orders in G.R. No. 55868 and G.R. No. 95522 that title to Road Lot 1 remains with QCDFC but the lien or reservation for the expanded highway shall be maintained should be conclusively resolved in the light of the government’s abandoning its plan to use Road Lot 1 as part of C-5. The SC agreed with the CA that the unused portion would have to revert to its titled owner. It held that forcing the owner to donate the property, or ordering the Register of Deeds to cancel the owner’s title and issue a new one in the name of the government, would partake of an illegal taking. Since no donation was made and the purpose of the reservation was abandoned, the reservation or lien was lifted, and full rights of ownership, including development of the property and collection of fees and rentals from the gardeners, were restored to QCDFC.

• Res judicata — A right or fact judicially determined by a court of competent jurisdiction is conclusive upon the parties and their privies unless reversed or modified by the SC or, in proper cases, by statute. It does not bar later litigation where the prior judgment did not determine all the issues and instead required the parties to negotiate or litigate; it may also yield to substantial justice and be disregarded where its application would sacrifice justice to technicality. Applied: the prior White Plains judgments left title with QCDFC subject to a lien and left several matters to negotiation or further litigation; the donation order in G.R. No. 95522 was modified, and the supervening construction of C-5 elsewhere removed the purpose of the reservation.
• Optional donation of subdivision roads and open spaces — Under P.D. 957, Sec. 31 and P.D. 1216, Sec. 2, the registered owner or developer may, at his option, convey by donation the roads and open spaces of a subdivision to the city/municipality or homeowners association; there is no forcible donation. Applied: no deed of donation existed, and QCDFC could not be compelled to donate Road Lot 1; if Quezon City wanted to use it for another public purpose, it had to expropriate and pay just compensation.
• Reservation or lien for a specific public purpose — A reservation or lien imposed on private land for a specific public project remains tied to that purpose. When the government abandons the project and builds it elsewhere, the reservation or lien ceases, and the unused land reverts to its titled owner. Applied: Road Lot 1 was reserved exclusively for C-5/Highway 38; C-5 was built in Libis, bypassing White Plains, so the lien was lifted and full ownership restored to QCDFC.
• Eminent domain and just compensation — Private property cannot be taken for public use without just compensation. If the government wants to devote the reserved strip to a public purpose other than the one for which it was reserved, it must institute expropriation proceedings and pay just compensation. Applied: the SC held that forcing QCDFC to donate the land or cancelling its title would partake of illegal taking; Quezon City could not use Road Lot 1 for another public purpose without expropriation.
• Equal protection in reservation requirements — The CA ruled, and the SC agreed, that QCDFC was denied equal protection because other subdivision developers were allowed to construct only 17- or 18-meter wide roads and sell part of their proposed 38-meter wide major thoroughfare, while QCDFC had to reserve the entire 38-meter wide portion indefinitely; if expansion of those other portions would require expropriation, similar treatment must be given to QCDFC.

• “Road Lot 1 is withdrawn from the commerce of man and should be developed for the use of the general public.” — The SC in the earlier case dismissed QCDFC’s petition to convert the undeveloped strip into residential lots and established Road Lot 1’s public character.
• “The final resolution of the Supreme Court in White Plains Association, Inc. vs. Court of Appeals, et. al., G.R. No. 55868, February 1, 1990, actually calls for negotiation or further litigation.” — The SC used this to explain that the prior judgment did not settle all issues and therefore did not bar the later resolution of ownership and possession.
• “To our mind, this would partake of an illegal taking.” — The SC rejected the idea of forcing QCDFC to donate the property or cancelling its title in favor of the government without expropriation.
• “The reservation or lien on Road Lot 1 intended for a highway or parkway is LIFTED. Rights of full ownership including the development of the property or the collection of fees and rentals from the gardeners therein are restored to the Quezon City Development & Financing Corporation.” — This is the dispositive ruling that resolved the long-standing dispute and restored full ownership rights to QCDFC.

• White Plains Association, Inc. vs. Court of Appeals and Quezon City Development & Financing Corporation, G.R. No. 55868 — Prior related case; its final resolution left title with QCDFC subject to a lien and left several matters to negotiation or further litigation, so it did not bar the later case on all issues.
• White Plains Association, Inc. vs. Legaspi, G.R. No. 95522, 193 SCRA 765 — Prior related case; its February 7, 1991 decision directed a deed of donation or cancellation of title, but the July 27, 1994 resolution on the second motion for reconsideration deleted that order and left title with QCDFC subject to the lien.
• Barreto vs. City of Manila, 7 Phil. 416 — Followed in the CA ruling, which the SC agreed with, for the principle that property donated for a specific public purpose cannot be used for another public purpose.
• Young vs. City of Manila, 73 Phils. 538 — Followed for the rule that a private owner cannot be compelled to donate street areas to the city.
• Teodoro vs. Carague, 206 SCRA 429 (1992) — Quoted and agreed with for the principle that res judicata may be set aside in favor of substantial justice where its application would sacrifice justice to technicality.

• P.D. 957, Sec. 31 — The registered owner or developer of a subdivision may, at his option, convey by donation the roads and open spaces to the city or municipality; upon acceptance, no portion shall be converted to another purpose unless, after hearing, the proposed conversion is approved by the National Housing Authority. Applied: donation is optional, no deed of donation existed, and Road Lot 1 could not be converted to another public purpose without the required approval and proceedings.
• P.D. 1216, Sec. 2 — The owner or developer has the option of donating roads and open spaces to the homeowners association or the local government; there is no forcible donation. Applied: QCDFC could not be compelled to donate Road Lot 1 against its will.
• Article 764, Civil Code — An action to revoke a donation may be made if the donee fails to comply with the conditions of the donation. Applied: if Quezon City considered the reservation as a donation, the rules on donation would apply, and Road Lot 1, reserved for C-5, could not be dedicated to another public purpose.