ORTIGAS & CO., LIMITED PARTENRSHIP V. FEATI BANK AND TRUST CO. (1979)Santos, J.

Facts:Ortigas & Co., Limited Partnership engaged in real estate business developing and selling lots to the public particularly Highway Hills subdivision along EDSAMarch 4, 1952 Augusto Padilla y Angeles and Natividad Angeles entered into separate agreements of sale on installments over Lots 5 and 6 Block 31, Highway HillsJuly 19, 1962 Augusto and Natividad transferred their rights and interests in favor of Emma ChavezoTransfer contained the following restrictions and stipulations:For residential purposes onlyAll buildings and improvements (except fences) should use strong building material, have modern sanitary installations connected to the public sewer or own septic tank and shall not be more than 2 meters from the boundary linesResolution 27 Feb 4, 1960 reclassified the western part of EDSA (Shaw boulevard to Pasig River) as a commercial and industrial zoneSuch restrictions were annotated on the TCTsJuly 23, 1962 - Feati bank bought Lot 5 from Emma Chavezwhile lot 6 was purchased by Republic Flour Mills

May 5, 1963 Feati Bank began laying foundation and construction of a building for banking purposes on lots 5 and 6Ortigas & Co. Demanded that they comply with the annotated restrictionsFeati Bank refused arguing that it was following the zoning regulationsOrtigas & Co. filed a case in the lower courts which held that Resolution No. 27 was a valid exercise of police power of the municipality hence the zoning is binding and takes precedence over the annotations in the TCTs because private interest should bow down to general interest and welfare.March 2, 1965 motion for reconsideration by Ortigas & Co. which was denied on March 26, 1965April 2, 1965 Ortigas filed notice of appeal which was given due course on April 14, 1965 hence this case.

Issues:WON Resolution No. 27 is a valid exercise of police powerWON Resolution No. 27 can nullify or supersede contractual obligations by Feati Bank and Trust Co.

Held:YESit is a valid exercise police power.YESit can nullify contractual obligations by Feati with Ortigas & Co.

Ratio:The validity of the resolution was never assailed in the lower courts and can therefore not be raised for the first time on appealoThe rule against flip flopping issues and arguments prevents deception in courtsoOrtigas & Co. also did not dispute the factual findings of the lower court on the validity of the resolutionAssuming arguendo it was properly raised the resolution is still validoRA 2264 (Local Autonomy Act) Sec 3 empowers municipalities to adopt zoning and subdivision ordinances or regulations for the municipalityoThe resolution is regulatory measure!oRA 2264 Sec 12any fair and reasonable doubt as to the existence of the power should be interpreted in favor of the local government and it shall be presumed to existthis gives more power to LGUs to promote general welfare, economic conditions, social welfare and material progress in their localityThe non-impairment clause of contracts is not absolute since it must be reconciled with the legitimate exercise of police powerowhen general welfare and private property rights clash, the former must prevail through police powers of the stateLots 5 and 6 front EDSA and has become surrounded by industrial and commercial complexesoDevelopment in the area has resulted in extreme noise and air pollution that is not conducive to health, safety and welfare of the would-be residentsjustifies the usage by Feati Bank of the land for more reasonable purposes

Decision: Affirmed

Dissenting: Abad Santos, J.Resolution 27 is valid because it has not yet been struck down but it is not a legitimate exercise of police power because its means (zoning) do not fit with its purpose of general welfareZoning the area as industrial and commercial will contribute to chaos, frenzy, pollution, noise which suffocate and cause the deterioration of the ecologyLowers quality of life for residents in Metro Manila