O R T I G A S & C O . , L I M I T E D P A R T E N R S H I P V.

F E A T I B A N K
AND TRUST CO. (1979)
Santos, J.
Facts:

Ortigas & Co., Limited Partnership engaged in real estate business developing and
selling lots to the public particularly Highway Hills subdivision along EDSA

March 4, 1952 Augusto Padilla y Angeles and Natividad Angeles entered into
separate agreements of sale on installments over Lots 5 and 6 Block 31, Highway
Hills

July 19, 1962 Augusto and Natividad transferred their rights and interests in favor
of Emma Chavez
o Transfer contained the following restrictions and stipulations:
For residential purposes only
All buildings and improvements (except fences) should use strong building material,
have modern sanitary installations connected to the public sewer or own septic tank
and shall not be more than 2 meters from the boundary lines

Resolution 27 Feb 4, 1960 reclassified the western part of EDSA (Shaw

boulevard to Pasig River) as a commercial and industrial zone

Such restrictions were annotated on the TCTs

July 23, 1962 - Feati bank bought Lot 5 from Emma Chavez while lot 6 was purchased
by Republic Flour Mills

May 5, 1963 Feati Bank began laying foundation and construction of a building for
banking purposes on lots 5 and 6
Ortigas & Co. Demanded that they comply with the annotated restrictions
Feati Bank refused arguing that it was following the zoning regulations
Ortigas & Co. filed a case in the lower courts which held that Resolution No. 27 was
a valid exercise of police power of the municipality hence the zoning is binding and
takes precedence over the annotations in the TCTs because private interest should
bow down to general interest and welfare.
March 2, 1965 motion for reconsideration by Ortigas & Co. which was denied on
March 26, 1965
April 2, 1965 Ortigas filed notice of appeal which was given due course on April 14,
1965 hence this case.
Issues:
WON Resolution No. 27 is a valid exercise of police power
WON Resolution No. 27 can nullify or supersede contractual obligations by Feati Bank
and Trust Co.
Held:
YES it is a valid exercise police power.
YES it can nullify contractual obligations by Feati with Ortigas & Co.


o
o

o
o
o

Ratio:
The validity of the resolution was never assailed in the lower courts and can
therefore not be raised for the first time on appeal
The rule against flip flopping issues and arguments prevents deception in courts
Ortigas & Co. also did not dispute the factual findings of the lower court on the
validity of the resolution
Assuming arguendo it was properly raised the resolution is still valid
RA 2264 (Local Autonomy Act) Sec 3 empowers municipalities to adopt zoning and
subdivision ordinances or regulations for the municipality
The resolution is regulatory measure!
RA 2264 Sec 12 any fair and reasonable doubt as to the existence of the power
should be interpreted in favor of the local government and it shall be presumed to
exist this gives more power to LGUs to promote general welfare, economic
conditions, social welfare and material progress in their locality
The non-impairment clause of contracts is not absolute since it must be reconciled
with the legitimate exercise of police power
when general welfare and private property rights clash, the former must prevail
through police powers of the state
Lots 5 and 6 front EDSA and has become surrounded by industrial and commercial
complexes
Development in the area has resulted in extreme noise and air pollution that is not
conducive to health, safety and welfare of the would-be residents justifies the
usage by Feati Bank of the land for more reasonable purposes
Decision: Affirmed

Dissenting: Abad Santos, J.

Resolution 27 is valid because it has not yet been struck down but it is not a
legitimate exercise of police power because its means (zoning) do not fit with its
purpose of general welfare
Zoning the area as industrial and commercial will contribute to chaos, frenzy,
pollution, noise which suffocate and cause the deterioration of the ecology Lowers
quality of life for residents in Metro Manila