BALUYOT V.

CA 311 SCRA 29
1311-1314 – Relativity of Contracts (Stipulation pour autri requisites)

FACTS: On March 13, 1992 petitioners as resident of Barangay Cruz represented by petitioner Timoteo Baluyot et.al filed for specific
performance and damages against UP respondent contending that they have been in open, peaceful, adverse and continuous possession in the
concept of an owner of that parcel of land in Quezon City.

In 1979, UP approved the donation directly to the said residents for about 9.2 hectares and that UP backed out to proceed with the donation and
the execution of the legal instrument was not formalized.

Afterwards, the negotiation of donation was resumed thru the defendant Quezon City government under the terms contrary to the right of the
bonafide residents of the said barrio.

Petitioners applied for a writ of injunction that was issued to restrain defendant UP from ejecting plaintiffs and demolishing their improvements
on the Riceland. Also, petitioners seek enforcement of the Deed of donation made by UP defendant to the Quezon City government.

Under the said Deed of Donation, the donee shall, after lapse of 3 years transfer to the qualified residents by way of donation the individual
lots occupied by them.

However, UP President had failed to deliver the CTC to enable Quezon City government to register the Deed of Donation.

The defendant UP had continuously, unlawfully refused to comply the obligation to deliver the title despite several requests and conferences.

Revocation and reversion of a Deed of Donation without Judicial Declaration is illegal and prejudicial to the rights of the bonafide residents in
Barangay Cruz-na-Ligas, Quezon City.

By reason of deception, the residents reiterate the claim of ownership of 42 hectares which are included in the tax declaration under the name
of UP.

The plaintiff prayed for the declaration of the Deed of Donation as valid and subsisting.

The trial court rendered its decision that petitioners did not have a cause of action for specific performance on the ground that the Deed of
donation had already been revoked denying the injunction. However, CA ruled in favor of UP.

ISSUE: WON petitioners has the right to seek enforcement of the Deed of Donation. YES.

RULING: The Supreme Court ruled in the affirmative, because there is a

stipulation pour autrui.

Under the Civil Code Art 1311:

That if a contract should contain, some stipulation in favour of a third person. He may demand its fulfilment provided
that he communicated his acceptance to the obligor before its revocation.
The contracting parties must have clearly and deliberately conferred a favor upon a third person.

In this case, the allegations in the following paragraphs of the amended complaint are sufficient to bring petitioners' action within the purview
of the second paragraph of Art. 1311 on stipulations pour autrui:

1. The deed of donation contains a stipulation that the Quezon City government, as donee, is required to transfer to qualified residents
of Cruz- na-Ligas, by way of donations, the lots occupied by them;

2. This stipulation is part of conditions and obligations imposed by UP, as donor, upon the Quezon City government, as donee;

3. The intent of the parties to the deed of donation was to confer a favor to them by transfer of lots.

4. That the conferences were held between the parties to convince UP to surrender the certificates of title to the city government,
implying that the donation had been accepted by petitioners by demanding fulfillment thereof and that private respondents were
aware of such acceptance; and

5. All the allegations considered together from which it can be fairly inferred that neither of private respondents acted in representation
of the other; each of the private respondents had its own obligations, in view of conferring a favor upon petitioners.

It is hardly necessary to state that our conclusion that petitioners' complaint states a cause of action against respondents is in no
wise a ruling on the merits. That is for the trial court to determine considering respondent UP's defense that the donation to the Quezon
City government, upon which petitioners rely, has been validly revoked. The CA decision is reversed, and the case is remanded to
the RTC for the trial on the merits.