Thursday, May 2, 2019

Timoteo Baluyot et al v CA

G.R. No. 122947. July 22, 1999.
Art. 1311 – Contracts take effect only between the parties, their assigns and heirs.

Petitioners – Timoteo Baluyot, Jaime Benito, Benigno Eugenio, Rolando Gonzales, Fortunato Fulgencio, and Cruz-na-Ligas Homesite Association, Inc.
Respondents – CA, LGU Quezon City & University of the Philippines

Facts:
·         The petitioners were residents of Barangay Cruz-na-Ligas, Diliman, Quezon City, and members of the Cruz-na-Ligas Homesite Association, Inc.
·         They claimed ownership of 42 hectares of lands owned by UP by reasons of occupation from time immemorial and of continuous possession. Thereafter, the U.P. Board of Regents approved the donation of about 9.2 hectares of the site directly to the residents. The area later was increased to 15.8 hectares.
·         But the donation failed because the residents demanded an area bigger than 15.8 hectares. Later, the Association proposed to accept the donation for the benefit of the residents.
·         The UP backed-out and resumed to negotiate the donation thru Quezon City Government under the terms disadvantageous or contrary to the rights of the bonafide residents.
·         The Association filed a complaint for specific performance and damages against UP. The complaint was later on amended to include QC Government with a writ of preliminary injunction to restrain UP from donating the area to the QC Government.
·         The RTC Quezon City granted the writ of preliminary injunction. Later, it lifted the Order after the UP assured the Association that the donation to the QC Government will be for the benefit of the residents of Cruz-Na-Ligas.
·         But UP insisted the dismissal of the case. The Association manifested its willingness on the condition that the area to be donated through QC Government be subdivided into lots to be given to the qualified residents together with the certificate of titles.
·         However, UP had continuously and unlawfully refused to comply the terms and conditions of the said donation. Instead, it revoked the donated property to be reverted to UP without judicial declaration.
·         The Association prayed a writ of preliminary injunction or at least a temporary restraining order be issued.
·         But the RTC denied the application on the ground that the plaintiffs are not parties to the deed of donation between UP & QC Government, and there was nothing to enforce because such deed was already validly revoked by the UP.
·         The CA overruled the trial court but dismissed the case because of the valid revocation of the deed of donation that rendered the Association’s primary cause of action inexistent.

Issue:
            WoN the petitioners have the right seek enforcement of donation on the basis that they are the intended beneficiaries of the donation to the Quezon City government although they were not parties to the deed of donation.

Held:
            Yes, the Court holds that the petitioners have the right seek enforcement of donation.
            Art. 1311, second paragraph, of the Civil Code provides: If a contract should contain some stipulation in favor of a third person, he may demand its fulfillment provided he communicated his acceptance to the obligor before its revocation. A mere incidental benefit or interest of a person is not sufficient. The contracting parties must have clearly and deliberately conferred a favor upon a third person.
            In the case at bar, all the elements of a cause of action contained in the amended complaint of petitioners. The allegations in the amended complaint are sufficient to bring petitioners’ action within the purview of the cited provision on stipulations pour autrui.
            Thus, the CA decision is REVERSED and the case is REMANDED to the RTC-QC for trial on the merits.

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