G.R. No. 128131 October 8, 1998
WHITE PLAINS HOMEOWNERS ASSOCIATION, INC., ET AL., petitioners, vs. THE COURT OF APPEALS and THE QUEZON CITY DEVELOPMENT & FINANCING CORPORATION, respondents.

FACTS

Respondent Quezon City Development & Financing Corporation (QCDFC) was the owner and developer of White Plains subdivision. A disputed area (Road Lot 1) was set aside and dedicated to the proposed Highway 38 (Katipunan Avenue), with a width of 38 meters. QCDFC developed only 20 meters, leaving an undeveloped 18-meter strip. In two prior Supreme Court cases ( G.R. No. 55868 and G.R. No. 95522 ), it was ruled that this strip was “withdrawn from the commerce of man” and constituted mandatory open space for public use. The dispositive portion in G.R. No. 95522 , which initially directed QCDFC to execute a deed of donation to Quezon City or have its title cancelled, was later modified by a July 27, 1994 Resolution, deleting the donation/cancellation order, thus leaving title with QCDFC but maintaining a lien or reservation for the highway. Subsequently, garden operators occupied the undeveloped strip, paying “special occupancy dues” to petitioner White Plains Homeowners Association from 1985 to June 1995. QCDFC demanded an accounting and delivery of these collections. When ignored, QCDFC filed an action for injunction to stop the Association from collecting rentals. The Regional Trial Court issued a preliminary injunction. The Court of Appeals, in a decision dated December 14, 1995, set aside the injunction, ruling the land belonged to Quezon City, which had the right to collect dues. Upon motions for reconsideration, the Court of Appeals, in its assailed January 31, 1997 Resolution, reversed itself, granted QCDFC’s motion, and ruled that “full right of possession and ownership of the disputed property should now be restored to QCDFC.” The Association filed this petition, arguing res judicata based on the prior Supreme Court rulings and contesting the injunction’s issuance.

ISSUE

Whether the Court of Appeals erred in restoring full ownership and possession rights over the disputed 18-meter strip of Road Lot 1 to QCDFC, disregarding the prior Supreme Court rulings that declared it withdrawn from commerce and reserved for public use as a highway.

RULING

The Supreme Court DISMISSED the petition. It resolved the long-unsettled status of the property in light of supervening events. The Court noted that the government had abandoned its plan to use Road Lot 1 as part of the C-5 highway, as the thoroughfare was constructed through another area (Libis). Consequently, the reservation or lien on Road Lot 1 intended for the highway was rendered meaningless and obsolete. Therefore, the Court LIFTED the reservation or lien and restored the rights of full ownership, including the right to develop the property and collect fees and rentals, to QCDFC.