Army and Navy v CA

FACTS:

● On November 29 1989 the City of Manila filed an action against ​Army and Navy Club of
Manila​​ (ANCM) alleging that:
○ ANCM is a municipal corporation recognized and organized under the laws of the
Philippines with offices at Army and Navy Club Building Luneta, Manila
○ ANCM is the owner of ​a parcel of land with an area of 12,705.30 sq. m. covered by
TCT no. 156868/1059​​ of the Register of Deeds of Manila
○ ANCM is occupying the aforementioned land by virtue of a ​Contract of Lease
executed in January 1983 between ANCM and the City of Manila
■ The Lease Contract provides that the lessee ​shall construct a hotel at a cost
not less than P50M pesos which shall automatically belong to the lessor
upon expiration or termination of the lease agreement without right of
reimbursement for the construction costs provided that the construction shall
be commenced within 1 year and completed within 5 years from the date of
approval of the lease contract, and that the plans and specifications will be
approved by the lessor.
■ ANCM failed or refused to construct the hotel despite demands of the
City of Manila, who has agreed to the continued retention of the property on
a lease-back agreement on the basis of the warranties of defendant to put up a
contemporary multi-storied building
■ Paragraph 3 of the contract also stipulated that ANCM pay P250K a year
which can be paid in equal monthly installments within the first 5 days of the
month without the necessity of a demand and can increase every 2 years at a
rate not more than 10%
■ Paragraph 4 of the contract stated that ANCM shall pay the realty tax on the
land and the improvements and the government fees and charges as
prescribed by law (TLDR ANCM didn’t pay anything, as in wala, wala na,
tapos na)
● City of Manila continually urged ANCM to settle its outstanding debts however ANCM did
not budge (wow nangutang na nga makapal pa muka)
● City of Manila then rescinded the contract and asked ANCM to vacate the property
■ The rent value of the property was estimated at P636,467.00 per month
● MTC of Manila granted the motion in favor of the City of Manila and ordered ANCM to
vacate the property located at South Boulevard Corner Manila Bay and to pay all of the debts
it owes to the City of Manila
● IMPT! ​ANCM filed a MR to the CA for the decision rendered by the RC alleging that the
courts erred in upholding the ouster of ANCM from the disputed premises which is a clear
transgression of the formal declaration of the site declared as a historical landmark
● CA dismissed the appeal and denied the MR since the petition has no merit
ISSUE/HELD:

Whether or not the Army and Navy Club of Manila was validly ejected from the property? -- YES

● Article 1673 of the New Civil Code is explicit that a lessor may judicially eject a lessee for
the ff reasons:
○ The period agreed upon expires
○ Lack of payment of the price stipulated
○ Violation of the conditions agreed upon in the contract
○ When the lessee devotes the thing leaser for other purposes than that stipulated,
causing deterioration of the same. (ANCM violated all of these reasons)
● Petitioner ​failed to pay rent for 7 years and owes ​P7.2 million in rent, P6.5 million in real
estate taxes​​, and v​iolated the stipulation to build a multi-storey hotel in the site
● IMPT! ​ANCM alleges that they have been declared a national historical landmark by the
National Historical Commission on June 29, 1992 to which the court never gave any
consideration, thus the existence should not in any way be undermined by the simple
ejectment suit filed against it.
○ ANCM presented a ​Certificate of Transfer and Acceptance of the historical
marker​​ pursuant to ​RA 4846
● The SC rules that the declaration that it is a historical landmark if not objectionable, the
recognition however is specious.
● Father B in the Manila Prince Hotel case elaborates on the historical character of the Manila
Hotel
○ The country's artistic and historic wealth is a proper subject for the exercise of police
power:". . . which the State may regulate." This is a function of the legislature. And
once regulation comes in, due process also comes into play. When the classification
of property into historical treasures or landmarks will involve the imposition of limits
on ownership, the Bill of Rights demands that it be done with due process both
substantive and procedural.
○ x x x the current general law on the subject is R.A. 4846, approved on June 18, 1966,
and amended by P.D. No. 374. The Act prescribes the manner of classifying historical
and cultural properties thus:
■ The National Museum shall be the agency of the government which, shall
implement the provisions of this Act.
■ The Director of the Museum shall undertake a census of the important
cultural properties of the Philippines xxx.
■ The Director is authorized to convene panels of experts xxx Each panel shall,
after careful study and deliberation, decide which among the cultural
properties in their field of specialization shall be designated as "National
Cultural Treasures" or "Important Cultural Properties."
■ The Director shall within ten days of such action by the panel transmit their
decision and cause the designation-list to be published in at least two
newspapers of general circulation. The same procedure shall be followed in
the declassification of important cultural properties and national treasures.
 ■ In designation of a particular cultural property as a "national cultural
treasure," the following procedure shall be observed:
● Notice to owner of the property (if privately owned) at least 15 days
prior to the intended designation and shall be invited to attend the
deliberations and be given a chance to be heard.
● Decisions of the panel are appealable through MR and then to
another panel chairmanned by the Sec. of Education, whose decision
shall be final and binding.
● Within each kind or class of objects, only the rare and unique objects
may be designated as "National Cultural Treasures."
● Designated "National Cultural Treasures" shall be marked, described,
and photographed by the National Museum.
■ Thus, for Manila Hotel to be treated as special cultural or historical property,
it must go through the procedure described above. Eloquent nationalistic
endorsements of classification will not transform a piece of property into a
legally recognized historical landmark. . . .
● In the case at bar, there is no showing that the procedure to declare the property as a historical
landmark has been complied with.
○ The City of Manila even observed that the signatories thereto are officers and
members of the Club making such certification self-serving.
○ It behooves us to think why the declaration was conferred only in 1992, three (3)
years after the action for ejectment was instituted.
○ We can only surmise that this was merely an afterthought, an attempt to thwart any
legal action taken against the petitioner.
○ Nonetheless, such certification does not give any authority to the petitioner to lay
claim of ownership, or any right over the subject property.
○ Nowhere in the law does it state that such recognition grants possessory rights over
the property to the petitioner.
○ Nor is the National Historical Commission given the authority to vest such right of
ownership or possession of a private property to the petitioner.
○ The law merely states that it shall be the policy of state to preserve and protect the
important cultural properties and National Cultural Treasures of the nation and to
safeguard their intrinsic value.
○ In line with this, any restoration, reconstruction or preservation of historical buildings
shall only be made under the supervision of the Director of the National Museum.
○ The authority of the National Historical Commission is limited only to the
supervision of any reconstruction, restoration or preservation of the architectural
design of the identified historical building and nothing more.
○ Even assuming that such recognition made by the National Historical Commission is
valid, the historical significance of the Club, if any, shall not be affected if petitioner's
eviction from the premises is warranted.
○ Unfortunately, petitioner is merely a lessee of the property.
○ By virtue of the lease contract, petitioner had obligations to fulfill.
○ Petitioner can not just hide behind some recognition bestowed upon it in order to
escape from its obligation or remain in possession. It violated the terms and
conditions of the lease contract. Thus, petitioner's eviction from the premises is
inevitable.