The Learning Child Inc v Ayala Alabang Village Association

The Learning Child, Inc. (TLC) v. Ayala Alabang Village Association (AAVA), G.R. No. 134269 Date: July 7, 2010 | Ponente: Leonardo-De Castro, J. Doctrine: Contracts Clause; Limitations on the use of land imposed by contract yield to reasonable exercise of police power and, hence, zoning ordinances are superior to contractual restrictions on the use of property. Summary: The case is 3 consolidated petitions for review on certiorari concerning the operation of The Learning Child, a preparatory AND grade school located in Ayala Alabang Village. AAVA filed an injunction case against TLC and the spouses Alfonso for violating the Deed of Restrictions which limits the use of the lot to a preparatory (nursery and kindergarten) school. The Supreme Court held that AAVA’s and ALI’s insistence on (1) the enforcement of the Deed of Restriction or (2) the obtainment of the approval of the affected residents for any modification of the Deed of Restrictions is reasonable absent any interest or zoning purpose asserted by the Municipality contrary to that of the subdivision developer in declaring the subject property as institutional. Deed of Restrictions

“USE AND OCCUPANCY – The property shall be used exclusively for the establishment and maintenance thereon of a preparatory (nursery and kindergarten) school, which may include such installations as an office for school administration, playground and garage for school vehicles.”

Metropolitan Manila Commission Ordinance No. 81-01 Classified Ayala Alabang Village for zoning purposes as a low-density residential area, thereby limiting the use of the subject property to the establishment or operation of a nursery and kindergarten school, which should not exceed two classrooms.

Muntinlupa Zoning Ordinance No. 91-39

Muntinlupa Resolution No. 94-179

Reclassified the subject property as “institutional”

Corrected a typographical error in the description of a parcel of land under the heading “Institutional Zone” in Appendix B of Ordinance No. 91-39 , adjusting the description “Lot 25, Block 1, Phase V, Ayala Alabang” to “Lot 25, Block 3, Phase V, Ayala Alabang”

Facts:  Sale of Lot 25, Block 3, Phase V, Ayala Alabang – Ayala Land Inc. (ALI) sold this parcel of land to spouses Yuson. They then sold it to spouses Alfonso. A Deed of Restrictions was annotated on the TCT which expressly provides that, “the property shall be used exclusively for the establishment and maintenance



  

 



thereon of a preparatory (nursery and kindergarten) school.” ALI turned over the right and power to enforce the restrictions on the properties in the Ayala Alabang Village to the association of homeowners, the AAVA. Establishment of TLC and Expansion – In 1989, the spouses opened on the same lot The Learning Child Pre-school which initially consisted of nursery and kindergarten classes. In 1991, it was expanded to include a grade school program, the School of the Holy Cross. AAVA Protest – The AAVA filed with the RTC of Makati an action for injunction against TLC and the spouses Alfonso, alleging breach of contract by the defendant spouses of the Deed of Restrictions. RTC of Makati – Rendered a Decision in favour of AAVA, emphasizing that the restrictions were in reality an easement which an owner of a real estate may validly impose under Article 688 of the Civil Code. Motion for Reconsideration – TLC alleged that with the passage of Muntinlupa Zoning Ordinance No. 91-39 which reclassified the subject property as “institutional,” there ceased to be legal basis for the RTC to uphold the Deed of Restrictions. RTC agreed and set aside its earlier Decision. Citing Ortigas & Co. Limited Partnership v. Feati Bank & Trust Co., it decreed that while the nonimpairment of contracts is constitutionally guaranteed, the rule is not absolute since it has to be reconciled with the legitimate exercise of police power by the municipality. CA – Upon appeal by the AAVA, it set aside the Resolution of the RTC and reinstated the previous decision in favour of AAVA. TLC and spouses Alfonso filed a Motion for Reconsideration from this Decision but was denied. Motion to Intervene – Aquino, et al., students of TLC, alleging that they are minor children who suffer from various learning disabilities and behavioural disorders benefiting from TLC’s full-inclusion program, filed a Motion for Leave to Intervene and their own Motion for Reconsideration with the CA. The CA denied their Motions for being proscribed by Section 2, Rule 19 of the 1997 Rules on Civil Procedure. Zoning Ordinance Case – In the meantime, the Municipality of Muntinlupa passed Resolution No. 94-179 correcting an alleged typo on abovementioned Ordinance No. 91-39, effectively placing Lot 25, Block 3, Phase V (herein subject lot) under the “Institutional Zone.” o HLURB – According to the Housing and Land Use Regulatory Board (HLURB), the Resolution was not a mere correction of a typo but an actual rezoning of the property into an institutional area and would require the conduct of public hearings. o Office of the President – The Office of the President set aside this conclusion of the HLURB and declared Resolution No. 94-179 as a valid corrective issuance. It further held that the Deed of Restrictions had lost its force and effect in view of the passage of Ordinance No. 91-39. o CA – The CA upheld the validity of Resolution No. 94-179 but held that the Office of the President erred; that Ordinance No. 91-39 did not have the effect of nullifying the Deed of Restrictions inasmuch as there is no conflict between the two.

Issues/Ratio:



WON the CA is correct in upholding the validity of Muntinlupa Resolution No. 94-179  YES, being a mere corrective issuance, it is not invalidated by the lack of notice and hearing as AAVA contends. o Both the Official Zoning Map of Muntinlupa and that of the Ayala Alabang Village show that the subject lot is classified as “institutional.” The official zoning map is an indispensable and integral part of a zoning ordinance, without which said ordinance would be considered void. o It is clear that there was a typo and the Court is merely affirming the correction made by the same entity which committed the error. o The authority of the HLURB is subordinate to that of the Office of the President and the acts of the former may be set aside by the latter.



WON the CA was correct in denying Aquino, et al.’s Motion to Intervene  MOOT, since their motion was filed in 1998, Aquino, et al., would no longer be in grade school at this time. o For the sake of argument, the Court finds no reversible error in CA’s denial of their Motion. The motion was filed three months after the CA had already rendered its Decision. o Section 2, Rule 19 of the 1997 Rules on Civil Procedure clearly imports that intervention cannot be allowed when the trial court has already rendered its Decision, and much less, as in the instant case, when even the CA had rendered its own Decision on appeal.



WON TLC and the spouses Alfonso should be enjoined from continuing the operation of a grade school in the subject property  YES, sub-issues below:



WON Muntinlupa Municipal Ordinance No. 91-39, as corrected by Muntinlupa Resolution No. 91-179, has the effect of nullifying the provisions of the Deed of Restrictions on the subject property  NO, there is a way to harmonize the seemingly opposing provisions. o TLC and spouses Alfonso: Reclassification of properties is a valid exercise of the state’s police power, with which contractual obligations should be reconciled. o AAVA: Even where the exercise of police power is valid, the same does not operate to automatically negate all other legal relationships in existence since the better policy is to reconcile the conflicting rights. o Review of jurisprudence:  Ortigas & Co. Limited Partnership v. Feati Bank & Trust Co: The Court, in upholding the exercise of police power attendant in the reclassification of the subject property therein over the Deed of Restrictions over the same property, took into consideration the prevailing conditions in the area. “Resolution was passed in the exercise of police power to safeguard or promote the health, safety, peace, good order and general welfare of the people in the locality.”  Co v. Intermediate Appellate Court: The Court denied the applicability of reclassification. “This is not to suggest that a zoning ordinance cannot affect existing legal relationships for it is settled that it can legally do so, being an exercise of police power. As such,

o



it is superior to the impairment clauses. xxx The zoning ordinance in question, while valid as a police measure, was not intended to affect existing rights protected by the impairment clause. It is always a wise policy to reconcile apparently conflicting rights under the Constitution and to preserve both instead of nullifying one against the other.”  Presley v. Bel-Air Village Association: The Court allowed the operation of the Hot Pan de Sal Store despite the Deed of Restrictions, but not without examining the surrounding area like in Ortigas. SC: The subject property, though declared as an institutional lot, nevertheless lies within a residential subdivision and is surrounded by residential lots. TLC’s student population had swelled to 350 students. The greater traffic will affect adjacent property owners’ enjoyment and use of their own properties. AAVA’s insistence on the enforcement of the Deed of Restrictions is thus reasonable. Also, the Municipality of Muntinlupa did not appear to have any special justification for declaring the subject lot as an institutional property.

WON AAVA is estopped from enforcing the Deed of Restrictions  NO o TLC and spouses Alfonso: The AAVA had allegedly abrogated said restrictions by its own acts. o However, TLC and the spouses Alfonso failed to prove by clear and convincing evidence the gravity of AAVA’s acts so as to bar the latter from insisting compliance. o The circumstances around the enumerated acts of AAVA also show that there was no intention on the part of AAVA to abrogate the Deed of Restrictions nor to waive its right to have said restrictions enforced. o Finally, a thorough examination of the records of the case shows that AAVA consistently insisted upon compliance with the Deed of Restrictions.

Ruling: TLC and the spouses Alfonso are ordered to CEASE AND DESIST from the operation of the Learning Child School beyond nursery and kindergarten. The current students will be allowed to finish their elementary studies up to their graduation in Grade 7. Enrollment of new grade school students will no longer be permitted.