G.R. No. 207348, 19 August 2014

FACTS:

The City of Mandaue and F.F. Cruz Inc. entered into a Contract of Reclamation with land-sharing agreement to be undertaken by the latter. The project was estimated to be completed within six (6) years as stipulated in the contract. The parties executed an MOA wherein all improvements by the F.F. Cruz on the City’s portion of the land shall belong to the latter after project completion. The project was not completed within 6 years. Thereafter, the DPWH contracted with F.F. Cruz to demolish improvements on the City’s parcel of land for a road-widening project. Petitioner Solante, prepared disbursement vouchers in favor of F.F. Cruz as payment for the demolished improvements. COA disallowed the disbursement, stating that the failure of FF. Cruz to finish the project within 6 years means the project is deemed completed and that the City now owns the rights to the demolished improvements, hence, F.F. Cruz cannot collect payments from the demolition of the same.

ISSUE:

WON F.F. Cruz owned the improvements demolished.

RULING:

Yes. F.F. Cruz owned said properties and can collect the payments for their demolition.

SC ruled that a mere estimate of a period of project completion does not fall under the definition of a fixed period or day certain as defined in law.  Art. 1193 of the Civil Code provides that: “Obligations for whose fulfillment a day certain has been fixed, shall be demandable only when that day comes; Obligations with a resolutory period take effect at once, but terminate upon arrival of the day certain; A day certain is understood to be that which must necessarily come, although it may not be known when; If the uncertainty consists in whether the day will come or not, the obligation is conditional, and it shall be regulated by the rules of the preceding Section.”

The lapse of the estimated 6-year period did not deem the project completed much less bring about the fulfillment of the condition stipulated in the MOA (on the shift of ownership over the demolished properties). As it were, the Mandaue-F.F.Cruz MOA states that the structures built by F .F. Cruz on the property of the city will belong to the latter only upon the completion of the project. Clearly, the completion of the project is a suspensive condition that has yet to be fulfilled. Until the condition arises, ownership of the structures properly pertains to F.F. Cruz. Petition is granted.

* Case digest by Ariel M. Acopiado, LLB-1, Andres Bonifacio Law School, SY 2017-2018