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CASE TITLE: In the matter of the Petition for Declaratory Judgment regarding the validity of Ordinance No. 386 of the
City of Baguio
PETITIONERS-APPELLANTS: Baguio Citizens Action Inc., and Junior Chamber of Baguio City, Inc.
RESPONDENTS-APPELLEES: The City Council and City Mayor of the City of Baguio
SUMMARY: CFI Baguio Br. 1 dismissed the petition for declaratory relief assailing Ordinance 386, which considered
squatters as bona fide occupants of their lots. One of the grounds for the dismissal cited was that there was a
jurisdictional defect from the non-joinder of parties, since the squatters protected by the ordinance were not made
parties to the suit. Hence this appeal. The SC said that Section 2 of Rule 64 (now 63) means merely that the rights of
third persons cannot be prejudiced by the outcome of the proceedings.
DOCTRINE: Rule 63, Section 2. Parties. All persons who have or claim any interest which would be affected by the
declaration shall be made parties; and no declaration shall, except as otherwise provided in these Rules, prejudice the
rights of persons not parties to the action.


1. The City Council of Baguio City passed Ordinance 386 which took effect on February 23,
1967, which considered all duly-registered squatters of public land (excluding that for public
use) as bonafide occupants of their lots, and comprising a city government housing project.
The Ordinance further provided that building permits be issued to the squatters, appropriations
be made for lot surveys and all cases pending against the occupants be dropped. The attached
explanatory note said the ordinance was to extend help to landless city residents within the
Baguio Townsite who out of necessity and not criminality tried to acquire residential lots.

2. A petition for declaratory relief was filed with CFI Baguio, Br. II which sought to declare the
Ordinance as invalid and illegal ab initio. Respondents-appellees motions to dismiss the
petition were denied.

3. CFI Baguio dismissed the petition on the grounds that:

a. It could not review CFI Baguio Br. 1s decision where it declared the Ordinance valid in a
criminal case against the squatters for illegal construction, pursuant to the policy of
judicial respect and stability;

b. those who come within the protection of the ordinance have not been made parties to
the suit in accordance with Section 2 of Rule 64 and the non-joinder of such parties is a
jurisdictional defect;

c. It is clothed with discretion to refuse to make declaration where it is not necessary and
proper at the time under all circumstances, e.g. where the declaration would be of no
practical help in ending the controversy or would not stabilize the disputed legal relation,
citing Section 5 of Rule 64.

4. Hence, the instant appeal perfected in accordance with the provisions of Rule 42, before the
approval of Republic Act No. 5440 on September 9, 1968.

ISSUE/DISPOSITIVE: Whether CFI erred in dismissing the petitionYES, as it has jurisdiction to decide
the case and the Ordinance is a patent nullity. Ordinance 386 is hereby rendered nullified and without any
force or effect.
a) Whether the second branch of CFI was asked to review a decision of the first branchNO,
the first branch did not rule on the City Councils power to legalize the illegal occupation of
public land which is the issue here.
b) Whether non-inclusion of the parties defeated the CFIs jurisdictionNO, non-inclusion
means merely that the rights of third persons cannot be prejudiced by the outcome of the
c) Whether the Ordinance was constitutionalNO, as no disposition of public land could be
made by the City of Baguio without prior legislative authority.


1. Contrary to what was said in the decision under review, the second branch of the court a
quo was not called upon to determine the validity of the judgment of the first branch.
The case before the first branch dealt with criminal liability of the accused for
constructing their houses without building permits, which said court considered as
pardoned by Section 2 of Ordinance 386..

a. In deciding the case, the first branch of the court a quo did not declare the whole
Ordinance valid. This is clear when it stated that "had the issue been the
legalization of illegal occupation of public land, covered by Republic Act No.
947, ... the Ordinance in question should have been ultra vires and

b. Said court merely confined itself to Sections 2 and 3 of Ordinance 386. It did not
make any definite pronouncement whether or not the City Council has the power
to legalize the illegal occupation of public land which is the issue in the instant

c. The court, in passing upon the validity of the aforesaid sections, was apparently
guided by the rule that where part of a statute is void as repugnant to the organic
law, while another part is valid, the valid portion, if separable from the invalid
may stand and be enforced.

2. The non-inclusion of the squatters mentioned in the Ordinance in question as party defendants
in this case cannot defeat the jurisdiction of the Court of First Instance of Baguio.
a. Section 2 of Rule 64 of the Rules of Court merely states that no declaration shall, except
for or as otherwise provided in these rules, prejudice the rights of persons not parties to
the action."
b. The reason for requiring joinder of all necessary parties is to allow final and pacifying
function of the declaratory relief. In this case, the squatters are not necessary parties
and would be bound regardless because the question involved is the Municipal Councils
power to enact the Ordinances in question.
i. Degala v. Reyes is inapplicable despite being cited in the decision under review.
The Degala case involves the validity of the trust towards the Roman Catholic
Church created in the will of the testator, the former of which was not brought in
as party. The Court refused to make any declaratory judgment on ground of
jurisdictional defect, as the Roman Catholic not being bound by such would make
the declaration a mere exercise in futility.
ii. In this case a declaration on the nullity of the ordinance, would give the squatters
no right which they are entitled to protect. The party most interested to sustain
and defend the legality of the Ordinance is the City Council that passed it and
together with the City Mayor.
c. If at all, the case may be dismissed not on the ground of lack of jurisdiction but for the
reason stated in Section 5 of the same Rule. "The Court may refuse to exercise the power
to declare rights and to construe instruments in any case where a decision would not
terminate the uncertainty or controversy which gave rise to the action, or any case
where the declaration or construction is not necessary and proper at the time under all
3. The Ordinance in question is a patent nullity.
a. Squatting is unlawful as illegal entry is morally incompatible with law and order. It is a
widespread vice and blight, and tolerance or protection emboldens squatters pernicious
acts (City of Manila v. Garcia).
b. No disposition of public land could be made by the City of Baguio without prior legislative
authority. The state possesses plenary power in law to determine recipients of public
domain, and the Director of Lands has exclusive control, administrations, disposition and
alienation of public land.
c. The explanatory note discussing humane treatment for squatters cannot be a
justification as the government has enunciated a militant policy against squatters.
i. In social re-adjustment policies, the government could not lay aside moral
standards, and favor usurpers, squatters, and intruders, unmindful of the lawful
and unlawful origin and character of their occupancy. Such policy would
perpetuate conflicts instead of attaining their just solution. (Astudillo vs. Board of
Directors of PHHC , quoting Bernardo vs. Bernardo).
ii. Letter of Instruction No. 19 dated October 2, 1972 orders city and district
engineers 'to remove all illegal constructions including buildings ... and those built
without permits on public or private property' and providing for the relocation of