G.R. No. L-9069; March 31, 1915
THE MUNICIPALITY OF CAVITE, plaintiff-appellant, vs. HILARIA ROJAS and her husband TIUNG SIUKO, alias SIWA, defendants-appellees.

FACTS:
The Municipality of Cavite filed an action to recover possession of a parcel of land with an area of 93 square meters, which forms part of the public plaza known as Plaza Soledad. The defendants, Hilaria Rojas and her husband, occupied the land by virtue of a lease contract (Exhibit C) executed in 1907 with the municipal council of Cavite, under which they paid quarterly rent and constructed a house of strong materials. The municipality demanded that the defendants vacate the land, but they refused. The municipality argued that the lease was ultra vires and null and void because the land is part of a public plaza intended for public use and, as such, is outside the commerce of man and cannot be legally leased for private use. The defendants, in their answer and cross-complaint, contended that their lease was valid and that they could only be required to vacate if the land was needed for public decoration or use. They also sought indemnity for the value of their house if evicted. The trial court dismissed the complaint, ruling that the municipality had no right to require the defendants to vacate. The municipality appealed.

ISSUE:
Whether the lease contract between the Municipality of Cavite and Hilaria Rojas over a portion of Plaza Soledad is valid and enforceable.

RULING:
No. The Supreme Court reversed the trial court’s decision. The Court held that Plaza Soledad is a public plaza or promenade intended for public use. As such, it is a property for public use under Article 344 of the Civil Code and is outside the commerce of man (fuera del comercio), pursuant to Article 1271 of the Civil Code and established jurisprudence. Consequently, the municipal council of Cavite had no authority or power to withdraw any portion of this public plaza from public use and lease it for private benefit. The lease contract was therefore ultra vires, contrary to law, and null and void ab initio.

Since the contract was void, it produced no legal effect. The defendants had no right to occupy the land and were ordered to vacate the premises and restore possession to the municipality within thirty days. However, applying the principle of mutual restitution under Article 1303 of the Civil Code, the municipality was ordered to return all rentals it had collected from the defendants. The Court denied the defendants’ claim for indemnity for the value of their house, as they built it on land they had no right to occupy under a void contract. No pronouncement was made as to costs.