GR 155688; (November, 2007) (Digest)
G.R. No. 155688 ; November 28, 2007
NATIVIDAD FIGURACION, FILMA F. RABOR and CATHERINE MANALASTAS, Petitioners, vs. SPOUSES CRESENCIANO and AMELITA LIBI, Respondents.
FACTS
The City of Cebu expropriated a lot owned by Galileo Figuracion in 1948. Decades later, the city government, through a resolution and a deed of sale, reconveyed an unused portion of this lot to Isagani Figuracion, Galileo’s successor. Petitioners are Isagani’s successors. Respondents, who were occupying this portion, were sued by petitioners in an unlawful detainer case. The MTC ruled for petitioners, a decision affirmed by the RTC and the Court of Appeals, ordering respondents to vacate.
Instead of appealing further, respondents filed a new complaint against petitioners and the City of Cebu. They initially sought an easement of right of way but later amended their complaint to seek the annulment of the city resolutions authorizing the reconveyance, the deed of sale, and the resulting title issued to Isagani Figuracion. The RTC granted this amended complaint, declaring the said documents null and void. The Court of Appeals affirmed this decision.
ISSUE
Whether respondents possess the legal standing or cause of action to institute a suit for the annulment of the reconveyance made by the City of Cebu to a private party.
RULING
No, the respondents lack the legal standing to sue. The Supreme Court granted the petition and dismissed the complaint. The Court held that for a taxpayer’s suit to be permissible, the petitioner must demonstrate that the act complained of involves a direct and illegal disbursement of public funds or an unwarranted exercise of taxing or spending power. Respondents’ second amended complaint failed to allege any such illegal expenditure of city funds. Their grievance was purely a private property dispute over possession and ownership of the subject lot, not a public right vindication.
The reconveyance was a proprietary act by the city involving property it already owned, not a governmental function affecting public interest. Respondents, as mere occupants with an adverse claim, did not have a clearer right than the registered owner to challenge the validity of the city’s transaction. Their proper remedy was to appeal the final judgment in the ejectment case, not to collaterally attack the title through a separate action where they lacked the requisite personal and substantial interest. Consequently, the trial court should have dismissed the complaint for failure to state a cause of action.