ORTIGAS & CO LIMITED PARTNERSHIP v. FEATI BANK AND TRUST CO.

G.R. No. L-24670 | December 14, 1979

Santos, J.

Doctrine: Zoning regulations are superior to contractual stipulations.

FACTS
Plaintiff-appellant Ortigas entered into separate agreements with spouses Angele as
vendees pertaining to a sale on installment over two parcels of land on Highway Hills
Subdivision. One of the stipulation in the said agreement expressly states that the such parcels of
land shall be used exclusively for residential purposes. Meanwhile, Resolution No. 27 was
passed which converted the land along EDSA from Shaw to Pasig River to a commercial and
industrial zone. Years passed by and defendant-appellee Feati obtained the said lands and began
laying foundation and commenced construction of building to be devoted to banking purposes.
This prompted Ortigas to demand the stoppage of the construction to which Feati refused to
comply with, contending that the building was constructed in accordance with zoning ordinances
and that they have the necessary building and planning permits. The RTC ruled in favor of Feati
on the ground that by virtue of police power, zoning ordinances should prevail over contractual
stipulations.

ISSUES AND HOLDING

1. W/N said resolution can nullify or supersede contractual obligations? YES.

To begin, resolution 27 is a valid exercise of police power. The Local Autonomy Act
empowered the local government units to adopt zoning ordinances and regulations. The
exercise of police power may only be inquired to if the same is capricious, whimsical, unjust,
unreasonable or there has been a violation of due process. In the case at bar, there is no
evidence that Resolution No. 27 was capricious nor violative of the due process clause.

Given this, the said zoning regulation converting the said land to commercial and
industrial should prevail over the contractual stipulation that the assailed land should only be
used for residential purposes. It is elementary that the state, in order to promote general
welfare may interfere with personal liberty, property and business. Also, the non-impairment
clause is not absolute. Lastly, it is also a well-settled doctrine that reservation of sovereign
power is read and deemed incorporated to contracts. Hence, Ortigas cannot prevent the
construction nor demand the removal of the same because FEATI can legally pursue its plan
of construction a bank.

WHEREFORE, the petition is DISMISSED. The assailed order is AFFIRMED,

without pronouncement as to costs. .

SERAPIO C2021 | 1