GR 34021; (March, 1932) (CRITIQUE)
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THE AI-ASSISTED CRITIQUE
The court’s reliance on res judicata to dismiss the claim was fundamentally flawed. The 1920 judgment in civil case No. 2603 addressed an injunction to allow construction, not a final adjudication on the substantive right to extend the franchise term due to municipal interference. The municipality’s actions—constructing a competing market and legally obstructing reconstruction—created a six-year interruption that was not the franchisee’s fault. By treating the prior case as a bar, the court failed to apply equitable principles, effectively allowing the municipality to benefit from its own obstructive conduct and vitiate the core contractual obligation of a 40-year term.

The decision incorrectly conflates municipal regulatory power with the authority to unilaterally abrogate a vested property right. The franchise created a property interest akin to a usufruct, which the municipality could not extinguish without due process or just compensation. Its resolutions to build a competing market and prohibit reconstruction constituted a taking, for which the franchisee was entitled to an extension of the term or compensation. The court’s finding that the municipality lacked power to authorize an extension misconstrues the issue; the extension was a necessary equitable remedy for the municipality’s breach, not an act requiring fresh legislative grant.

The ruling imposes an impractical burden on the franchisee by suggesting his lack of funds was a principal cause for delay, ignoring the municipality’s active legal and physical opposition. The doctrine of force majeure or legal impossibility should apply, as municipal resolutions and court injunctions created a legal barrier to performance. The court’s refusal to grant an injunction to secure the remaining term undermines the sanctity of contracts and incentivizes public entities to engage in strategic obstruction. By denying relief, the decision leaves a franchise holder without recourse when a municipality deliberately frustrates the enjoyment of a franchise it previously granted.