FACTS:
The Philippine Commission enacted Act No. 1360 which authorized the City of Manila to reclaim a portion of Manila Bay. Subsequently Act No. 1657 amended the former act which states that the City of Manila was authorized to sell or lease the set aside for hotel site. The City of Manila sells the land to Manila Lodge No. 761 then the latter sold the land to Tarlac Development Corporation. The City of Manila filed a petition for re-annotation of its right to repurchased. The TDC then filed a complaint that the City of Manila was estopped from repurchasing the property.
ISSUE:
Whether or not the City of Manila was estopped from quetioning the validity of the sale.
RULING:
The Government is never estopped by mistakes or errors on the pan of its agents, and estoppel does not apply to a municipal corporation to validate a contract that is prohibited by law or is against Republic policy, and the sale executed by the City of Manila to Manila Lodge was certainly a contract prohibited by law. Moreover, estoppel cannot be urged even if the City of Manila accepted the benefits of such contract of sale and the Manila Lodge No. 761 had performed its part of the agreement, for to apply the doctrine of estoppel against the City of Manila in this case would be tantamount to enabling it to do indirectly what it could not do directly.
The sale of the subject property executed by the City of Manila to the Manila Lodge No. 761, BPOE, was void and inexistent for lack of subject matter. It suffered from an incurable defect that could not be ratified either by lapse of time or by express ratification. The Manila Lodge No. 761 therefore acquired no right by virtue of the said sale. Hence to consider now the contract inexistent as it always has seen, cannot be, as claimed by the Manila Lodge No. 761, an impairment of the obligations of contracts, for there was it, contemplation of law, no contract at all.
* Case digest by Lady Rubyge Denura, LLB-1, Andres Bonifacio Law School, SY 2017-2018
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