SOLID MANILA CORPORATION, PETITIONER, VS. BIO HONG TRADING CO., INC. AND COURT OF APPEALS, RESPONDENTS.

Solid Manila Corporation versus Bio Hong Trading Company

The Case

This is a petition for review on certiorari brought by Solid Manila Corporation against Bio Hong Trading Company and the Court of Appeals. Solid Manila seeks to restrain Bio Hong from closing, by means of steel gates, a private alley that had been constituted as an easement of way over Bio Hong's land in Ermita, Manila. The case matters because it fixes two rules every reviewee must carry: first, that a personal servitude established for the benefit of the general public cannot be extinguished by merger, since there is no dominant estate whose ownership could be consolidated with the servient estate; and second, that a defense which is sham in law does not tender a genuine issue and will not defeat a summary judgment.

Procedural History

Solid Manila commenced a suit for injunction before the Regional Trial Court of Manila, praying that the gates be removed and that full access to the easement be restored. The trial court issued an ex parte order directing Bio Hong to open the gates, and later issued a temporary writ of preliminary injunction upon the posting of a bond by Solid Manila. Solid Manila then moved for summary judgment. The trial court granted the motion, rendered summary judgment for Solid Manila, made the temporary mandatory injunction permanent, ordered Bio Hong to pay the costs of suit, and dismissed Bio Hong's counterclaim for lack of merit.

Bio Hong appealed to the Court of Appeals, which reversed the trial court. The appellate court held that summary judgment was improper and that the trial court had erroneously ignored Bio Hong's defense that the easement had been extinguished by merger. In the meantime, Bio Hong itself went to the Regional Trial Court on a petition for cancellation of the annotation of the easement, and that court granted cancellation. Solid Manila challenged the cancellation before the Court of Appeals, which ordered the restoration of the annotation without prejudice to the final outcome of Bio Hong's own appeal. Solid Manila then came to the Supreme Court by way of a petition for review on certiorari under Rule 45.

Facts

Solid Manila owns a parcel of land in Ermita, Manila. Nearby lies another parcel registered in the name of Bio Hong Trading Company. Bio Hong's title came from a prior owner, and in the deed of sale between them the parties reserved as an easement of way a portion measuring nine hundred fourteen square meters, more or less, which had been converted into a private alley for the benefit of neighboring estates. The deed likewise noted that a three meter wide portion of the parcel along the Pasig River had been expropriated by the City Government. The easement was annotated at the back of Bio Hong's certificate of title, with conditions requiring that the alley remain open at all times, that no obstructions be placed thereon, and that the owner allow the public to use it without asking for indemnity.

Solid Manila and other residents of neighboring estates used the alley and contributed to its upkeep, until sometime in 1983, when, over their protests, Bio Hong constructed steel gates that precluded unhampered use. On December 6, 1984, Solid Manila sued for injunction to have the gates removed.

Bio Hong resisted on the ground that the easement had been extinguished by merger, since it had acquired ownership of the property from its former owner, and further argued that Solid Manila had another adequate outlet, had paid no indemnity, and had not shown that the right-of-way lay at a point least prejudicial to the servient estate. The deed of sale itself showed that the former owner had given Bio Hong a discount on the purchase price on account of the easement.

Issues

• Whether or not the Court of Appeals erred in reversing the trial court, which had rendered summary judgment.
• Whether or not the Court of Appeals erred in holding that the easement had been extinguished by merger.

Applicable Provisions

Article 617 of the Civil Code provides:

Easements are inseparable from the estate to which they actively or passively belong.

This defeats the argument that the alley was excluded from the sale, because as a mere right-of-way it cannot be separated from the tenement and maintain an independent existence.

Article 614 of the Civil Code provides:

Servitudes may also be established for the benefit of a community, or of one or more persons to whom the encumbered estate does not belong.

This is the textual basis for treating the alley as a personal servitude in favor of the general public, so that there is no owner of a dominant tenement to speak of.

Ruling

On the first issue, the Court held that the trial court was not in error in rendering summary judgment. Summary judgment is proper where there is no genuine issue as to the existence of a material fact and the facts appear undisputed from the pleadings, depositions, admissions, and affidavits of record. The defense of merger was not a valid defense but a sham one, because merger was not possible and because the sale unequivocally preserved the existing easement. The answer therefore tendered no genuine issue on a material fact.

On the second issue, the Court held that no genuine merger took place. Merger exists when ownership of the dominant and servient estates is consolidated in the same person, and it requires full ownership of both estates. But the servitude here is a personal servitude, constituted not in favor of a particular tenement but for the benefit of the general public. In a personal servitude there is no owner of a dominant tenement, and the easement pertains to persons without a dominant estate. Merger presupposes a prior servient-dominant owner relationship, and unless the owner conveys the property in favor of the public, no genuine merger can terminate a personal easement.

The Court also rejected Solid Manila's contention that the deed of sale excluded the alley, because as a mere right-of-way it cannot be separated from the tenement. Nonetheless, the easement operates as a limitation on the owner's right to use. Bio Hong acquired ownership of the property, including the alley, but it did not acquire the right to close the alley or place obstructions thereon. The Court further held that the earlier appellate judgment nullifying the cancellation of the annotation was the law of the case between the parties, and that Bio Hong was guilty of forum shopping in initiating the cancellation proceedings to preempt the injunction.

Doctrine

A personal servitude, one established for the benefit of a community or of persons to whom the encumbered estate does not belong, cannot be extinguished by merger, because merger requires the consolidation of full ownership of both a dominant and a servient estate in one person, and a personal servitude has no dominant estate. The owner of the servient estate acquires the land subject to the easement and to the limitations annotated on the title, and cannot close the alley or obstruct it. A defense that is sham in law does not raise a genuine issue of material fact and will not defeat a motion for summary judgment.

Disposition

The petition was granted; the decision of the Court of Appeals was set aside and the decision of the Regional Trial Court was reinstated, with petitioner and counsel required to show cause why they should not be punished for contempt and dealt with administratively for forum shopping.

Remember This

Memorize this line: a personal servitude for the public good admits no merger, because there is no dominant estate to merge with the servient one. Examiners use this case to test the distinction between real and personal servitudes, the requisites of merger, and the propriety of summary judgment against a sham defense.