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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