VILLANUEVA, ET. AL. VS CASTAEDA, JR., ET. AL.

September 2l, 1987

Ponente: Cruz, J.

FACTS :
In 1961, the municipal council of San Fernando adopted Resolution No. 218 authorizing 24
members of Fernandino United Merchants and Traders Association to construct permanent
stalls and sell in thesubject property within the vicinity of the public market. The Resolution was
protested and Civil CaseNo. 2040 was filed. CFI issued writ of preliminary injunction to prevent
the construction of stalls.While the case was pending, the municipal council adopted Resolution
No. 29 which declared thesubject area as a parking place and as the public plaza of the
municipality. CFI decided Civil Case No.2040 and held that the subject land was public in nature
and was beyond the commerce of man. Thepreliminary injunction was made permanent.The
decision was apparently not enforced, for the petitioners were not evicted from the place.
Theywere assigned specific areas and were made to pay daily fees to the municipal government
for use of the area.On January 12, 1982 (more than 13 years after CFI decision), the Association
of Concerned Citizensand Consumers of San Fernando filed a petition for the immediate
implementation of Resolution No. 29,to restore the subject property "to its original and
customary use as a public plaza. After investigation was conducted by the municipal attorney,
Macalino, officer

in-charge of the office of the mayor, issued a resolution ordering the demolition of the stalls in
the subject area.Petitioners filed a petition for prohibition with the CFI, which was
denied.Hence, petitioners filed a petition for certiorari before the SC. Petitioners argued that
they had right tooccupy the area by virtue of lease contracts entered into with the municipal
government, and later, byvirtue of space allocations made in their favor for which they paid
daily fees. The municipality deniedthat they entered into said agreements. It argued that even if
the leases were valid, the same could beterminated at will because rent was collected daily.
ISSUE: Whether petitioners have the right to occupy the subject land.
HELD:
It is a well-settled doctrine that the town plaza cannot be used for the construction of
market stalls, and that such structures constitute a nuisance subject to abatement according to
law. A public plaza is beyond the commerce of man and so cannot be the subject of lease or any
other contractual undertaking. This is elementary. Indeed, this point was settled as early as in
Municipality of Cavite vs. Rojas, decided in 1915, where the Court declared as null and void the
lease of a public plaza of the said municipality in favor of a private person. The petitioners had

no right in the first place to occupy the disputed premises and cannot insist in remaining there
now on the strength of their alleged lease contracts.
The problems caused by the usurpation of the place by the petitioners are covered by
the police power as delegated to the municipality under the general welfare clause. This
authorizes the municipal council "to enact such ordinances and make such regulations, not
repugnant to law, as may be necessary to carry into effect and discharge the powers and duties
conferred upon it by law and such as shall seem necessary and proper to provide for the health
and safety, promote the prosperity, improve the morals, peace, good order, comfort, and
convenience of the municipality and the inhabitants thereof, and for the protection of property
therein." This authority was validly exercised in this casethrough the adoption of Resolution No.
29, series of 1964, by the municipal council of San Fernando. Even assuming a valid lease of the
property in dispute, the resolution could have effectively terminated the agreement for it is
settled that the police power cannot be surrendered or bargained away through the medium of
a contract. Hence, the loss or damage caused to petitioners, in the case at bar, does not
constitute a violation of a legal right or amount to a legal wrong - damnum absque injuria.