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ARMY AND NAVY CLUB V.

CA

RECIT-READY DIGEST:

City of Manila owns a parcel of land, including the Army and Navy Club Building built on it. The defendant
is occupying the said area by virtue of a Contract of Lease. It violated the provisions by not complying with
its contractual obligations (reneged on rental obligations, payment of taxes, etc.) despite plaintiffs
repeated demands. This led to the rescission of the contract and the defendant being ousted from the
premises. Defendant invokes that the building has been declared a national historical landmark in an
attempt to thwart the legal action against them. The SC ruled that even assuming that the said declaration
is valid, it does not grant possessory rights over the property to the petitioner nor to the National Historical
Commission. Moreover, the historical significance of the Club shall not be affected given that petitioners
eviction from the premises is warranted for having violated the terms and conditions of the lease contract.

FACTS:

The complaint alleged the ff.:

Plaintiff: City of Manila (municipal corporation) organized and existing under RA409 represented
by incumbent Manila City Mayor Gemiliano Lopez, Jr.; owner of Army and Navy Club of Manila
Defendant: corporation with offices occupying the Army and Navy Club Building by virtue of a
Contract of Lease (Lessee defendant; Lessor plaintiff)
Defendant violated certain provisions of the Contract of Lease:
o Par 1. The LESSEE shall construct at its own expense a P50M (/above) modern multi-
storied hotel, which shall automatically belong to the LESSOR upon the lease agreements
expiration/termination construction of hotel commenced w/in 1 year and finished w/in
5 years upon date of said agreements approval
Defendant failed /refused to construct said hotel
o Par 3. LESEE shall pay annual rent of P250K s.t. necessary rental adjustments
Defendant reneged on its rental obligation for 7 years
o Par 4. LESEE shall pay the realty tax due on the land including improvements, govt license,
permits, fees and other prescribed charges + hotels operation, construction and
modifications
Defendant failed to pay the aggregate tax liability amounting to P3.8M
Plaintiff repeatedly demanded defendant to comply with its contractual obligations, but the latter
remained unfazed and still failed to perform such obligations
^As a result, plaintiff rescinded their Contract of Lease and demanded defendant to vacate, but
the latter refused to do so

Progress of the case:

Petitioner (Corporation) filed a Motion for Leave to File & for Admission of Amended Answer
allegedly asserting special and affirmative defenses
The City of Manila filed a Motion for Summary Judgement on the ground that there exists no
genuine triable issue in the case
The MTC denied petitioners motion for lack of merit, ordering it to vacate the Army & Navy
Building, pay the costs of the suit and pay rental arrearages with legal interest
The RTC affirmed the MTCs summary judgement
CA dismissed the appeal and denied the motion for recon; it likewise denied the City of Manilas
motion for issuance of writ of exec pending appeal
Petitioner filed the instant petition raising the ff. issues

ISSUES:

W/n CA gravely erred in upholding City of Manila (the ouster) of petitioner from the disputed
premises w/c is a clear transgression of the formal declaration of the site as a historical landmark
W/n CA erred in not holding that petitioner was denied due process by the rendition of summary
judgement against it

HELD: There is no merit in the petition

First Issue NO

For petitioners violation of the lease contract and after several demands, the City of Manila had
no other recourse but to file the action for illegal detainer and demand petitioners eviction
(based on the provisions of the New Civil Code)
While the declaration that it (Army&Navy Club) is a historical landmark is not objectionable, the
recognition is specious
o Fr. Bernas as amicus curiae in Manila Prince Hotel v. GSIS: The countrys artistic and historic wealth
is therefore 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. In recognition of this constitutional principle, the State in fact
has promulgated laws, both general and special, on the subject. x x x R.A. 4846 amended by P.D.
No. 374 is the Act that prescribes the manner of classifying historical and cultural properties
There is no showing that PD374 has been complied with. Thus, the petitioners defense regarding
the property being a historical landmark was merely an attempt to thwart legal action against it
Such certification (of being a historical landmark) does not authorize the petitioner to claim
ownership/right over said property; nor is the National Historical Commission allowed to vest
such right to the petitioner
Even assuming that the Natl. Historical Comm.s recognition is valid, the Clubs historical
significance shall not be affected if petitioners eviction from the premises is warranted and
it is warranted, as mentioned above

In short, excuse lang yung defense na historical landmark yung Army & Navy Club para may di matuloy
yung legal action ng City of Manila against petitioner. Kahit pa historical landmark yan, warranted parin
eviction ni petitioner dahil sa violation niya ng T&Cs ng lease contract. Such recognition wont affect
the ejectment suit bec. Fr. Bernas said that the Bill of rights demands that it (classification of property
into historical landmarks that involve the imposition of LIMITS ON OWNERSHIP) be done w/ due process
so the State promulgated laws in lieu of this consti principle. Eh Di nga nagcomply yung Army & Navy
Club dun sa law (PD374) so pano siya magiging historical landmark? [Basta may due process parin kasi
warranted nga yung eviction, pursuant to the New Civil Code that Im not sure but feel ko tama]

Second Issue NO
There is clearly no substantial triable issue because its defenses stated below are not substantial
issues of fact they do not alter/affect the ejectment suit; thus, a summary judgement is proper
o A summary judgement is one granted by the court upon a partys motion for an expeditious
settlement of the case (bec. there are NO important questions/issues of facts involved except as
to amount of damages)
o Petitioners defenses/arguments: (1) Failure to fulfill the obligations was due to the 1984 economic
recession due to Ninoy Aquinos assassination; (2) argument with regard to the Club being declared
a historical landmark
Petitioner does not deny the existence of the lease contract and its failure to comply with the
said contracts terms & conditions
The CA did not err in not admitting the petitioners Amended Answer because the defenses
were entirely in contradiction to its original answer
o It initially admitted in the orig. answer that the City of Manila is the subject propertys
registered owner and that it (petitioner) is merely a lessor
o Petitioner cannot deny the respondents ownership of the leased premises when the
situation calls for it by taking an inconsistent position

Nagsubmit si petitioner ng amended answer na totally contradictory yung content sa orig answer. Di
pwede yun kasi nga inamin na niya na lessor lang siya at owner si City of Manila. Inamin pa niya na
nagviolate siya ng T&Cs ng lease contract. Di niya pwede sabihin bigla na hindi pala owner si City of
Manila pagkatapos ng lahat ng pinag gagagawa niya at dahil umamin na nga siya eh diba wala na
bawian. [though figure out a more logical (and legal hehe) ratio explaining bakit wala nang bawian,
besides the fact the the petitioner cant be allowed to double deal]

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