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Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. L-3756 June 30, 1952

SAGRADA ORDEN DE PREDICADORES DEL SANTISMO ROSARIO DE FILIPINAS, plaintiff-appellee,


vs.
NATIONAL COCONUT CORPORATION, defendant-appellant.

First Assistant Corporate Counsel Federico C. Alikpala and Assistant Attorney Augusto Kalaw for appellant.
Ramirez and Ortigas for appellee.

LABRADOR, J.:

This is an action to recover the possession of a piece of real property (land and warehouses) situated in Pandacan Manila, and the rentals
for its occupation and use. The land belongs to the plaintiff, in whose name the title was registered before the war. On Janu ary 4, 1943,
during the Japanese military occupation, the land was acquired by a Japanese corporation by the name of Taiwan Tekkosho for the sum
of P140,00, and thereupon title thereto issued in its name (transfer certificate of title No. 64330, Register of Deeds, Manila). After
liberation, more specifically on April 4, 1946, the Alien Property Custodian of the United States of America took possession, control,
and custody thereof under section 12 of the Trading with the Enemy Act, 40 Stat., 411, for the reason that it belonged to an enemy
national. During the year 1946 the property was occupied by the Copra Export Management Company under a custodianship agreement
with United States Alien Property Custodian (Exhibit G), and when it vacated the property it was occupied by the defendant he rein. The
Philippine Government made representations with the Office Alien Property Custodian for the use of property by the Government (see
Exhibits 2, 2-A, 2-B, and 1). On March 31, 1947, the defendant was authorized to repair the warehouse on the land, and actually spent
thereon the repairs the sum of P26,898.27. In 1948, defendant leased one-third of the warehouse to one Dioscoro Sarile at a monthly
rental of P500, which was later raised to P1,000 a month. Sarile did not pay the rents, so action was brought against him. It is not shown,
however, if the judgment was ever executed.

Plaintiff made claim to the property before the Alien Property Custodian of the United States, but as this was denied, it bro ught an action
in court (Court of First Instance of Manila, civil case No. 5007, entitled "La Sagrada Orden Predicadores de la Provinicia del Santisimo
Rosario de Filipinas," vs. Philippine Alien Property Administrator, defendant, Republic of the Philippines, intervenor) to an nul the sale
of property of Taiwan Tekkosho, and recover its possession. The Republic of the Philippines was allowed to intervene in the action. The
case did not come for trial because the parties presented a joint petition in which it is claimed by plaintiff that the sale in favor of the
Taiwan Tekkosho was null and void because it was executed under threats, duress, and intimidation, and it was agreed that the title
issued in the name of the Taiwan Tekkosho be cancelled and the original title of plaintiff re -issued; that the claims, rights, title, and
interest of the Alien Property Custodian be cancelled and held for naught; that the occupant National Coconut Corporation has until
February 28, 1949, to recover its equipment from the property and vacate the premises; that plaintiff, upon entry of judgment , pay to the
Philippine Alien Property Administration the sum of P140,000; and that the Philippine Alien Property Administration be free f ro m
responsibility or liability for any act of the National Coconut Corporation, etc. Pursuant to the agreement the court r endered judgment
releasing the defendant and the intervenor from liability, but reversing to the plaintiff the right to recover from the Natio nal Coconut
Corporation reasonable rentals for the use and occupation of the premises. (Exhibit A -1.)

The present action is to recover the reasonable rentals from August, 1946, the date when the defendant began to occupy the premises,
to the date it vacated it. The defendant does not contest its liability for the rentals at the rate of P3,000 per month from February 28,
1949 (the date specified in the judgment in civil case No. 5007), but resists the claim therefor prior to this date. It interposes the defense
that it occupied the property in good faith, under no obligation whatsoever to pay rentals for the use and occ upation of the warehouse.
Judgment was rendered for the plaintiff to recover from the defendant the sum of P3,000 a month, as reasonable rentals, from August,
1946, to the date the defendant vacates the premises. The judgment declares that plaintiff has always been the owner, as the sale of
Japanese purchaser was void ab initio; that the Alien Property Administration never acquired any right to the property, but that it held
the same in trust until the determination as to whether or not the owner is an enemy citizen. The trial court further declares that defendant
can not claim any better rights than its predecessor, the Alien Property Administration, and that as defendant has used the p roperty and
had subleased portion thereof, it must pay reasonable rentals for its occupation.

Against this judgment this appeal has been interposed, the following assignment of error having been made on defendant -appellant's
behalf:
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The trial court erred in holding the defendant liable for rentals or compensation for the use a nd occupation of the property from
the middle of August, 1946, to December 14, 1948.

1. Want to "ownership rights" of the Philippine Alien Property Administration did not render illegal or invalidate its grant to
the defendant of the free use of property.

2. the decision of the Court of First Instance of Manila declaring the sale by the plaintiff to the Japanese purchaser null a nd
void ab initio and that the plaintiff was and has remained as the legal owner of the property, without legal interruption, is not
conclusive.

3. Reservation to the plaintiff of the right to recover from the defendant corporation not binding on the later;

4. Use of the property for commercial purposes in itself alone does not justify payment of rentals.

5. Defendant's possession was in good faith.

6. Defendant's possession in the nature of usufruct.

In reply, plaintiff-appellee's counsel contends that the Philippine Allien Property Administration (PAPA) was a mere administrator of
the owner (who ultimately was decided to be plaintiff), and that as defendant has used it for commercial purposes and has leased portion
of it, it should be responsible therefore to the owner, who had been deprived of the possession for so many years. (Appellee' s brief, pp.
20, 23.)

We can not understand how the trial court, from the mere fact that plaintiff-appellee was the owner of the property and the defendant-
appellant the occupant, which used for its own benefit but by the express permission of the Alien Property Custodian of the U nited
States, so easily jumped to the conclusion that the occupant is liable for the value of such use and occupation. If defendant -appellant is
liable at all, its obligations, must arise from any of the four sources of obligations, namley, law, contract or quasi-contract, crime, or
negligence. (Article 1089, Spanish Civil Code.) Defendant-appellant is not guilty of any offense at all, because it entered the premises
and occupied it with the permission of the entity which had the legal control and administration thereof, the Allien Property
Administration. Neither was there any negligence on its part. There was also no privity (of contract or obligation) between t he Alien
Property Custodian and the Taiwan Tekkosho, which had secured the possession of the property from the plaintiff-appellee by the use
of duress, such that the Alien Property Custodian or its permittee (defendant -appellant) may be held responsible for the supposed
illegality of the occupation of the property by the said Taiwan Tekkosho. The Allien Property Administration had the control and
administration of the property not as successor to the interests of the enemy holder of the title, the Taiwan Tekkosho, but b y express
provision of law (Trading with the Enemy Act of the United States, 40 Stat., 411; 50 U.S.C.A., 189). Neither is it a trustee of the former
owner, the plaintiff-appellee herein, but a trustee of then Government of the United States (32 Op. Atty. Gen. 249; 50 U.S.C.A. 283), in
its own right, to the exclusion of, and against the claim or title of, the enemy owner. (Youghioheny & Ohio Coal Co. vs. Lasevich [1920],
179 N.W., 355; 171 Wis., 347; U.S.C.A., 282-283.) From August, 1946, when defendant-appellant took possession, to the late of
judgment on February 28, 1948, Allien Property Administration had t he absolute control of the property as trustee of the Government
of the United States, with power to dispose of it by sale or otherwise, as though it were the absolute owner. (U.S vs. Chemic al Foundation
[C.C.A. Del. 1925], 5 F. [2d], 191; 50 U.S.C.A., 283.) Therefore, even if defendant-appellant were liable to the Allien Property
Administration for rentals, these would not accrue to the benefit of the plaintiff-appellee, the owner, but to the United States Government.

But there is another ground why the claim or rentals can not be made against defendant-appellant. There was no agreement between the
Alien Property Custodian and the defendant-appellant for the latter to pay rentals on the property. The existence of an implied agreement
to that effect is contrary to the circumstances. The copra Export Management Company, which preceded the defendant -appellant, in the
possession and use of the property, does not appear to have paid rentals therefor, as it occupied it by what the parties deno minated a
"custodianship agreement," and there is no provision therein for the payment of rentals or of any compensation for its custody and or
occupation and the use. The Trading with the Enemy Act, as originally enacted, was purely a measure of conversation, hence, it is very
unlikely that rentals were demanded for the use of the property. When the National coconut Corporation succeeded the Copra Export
Management Company in the possession and use of the property, it must have been also free from payment of rentals, especially as it
was Government corporation, and steps where then being taken by the Philippine Government to secure the property for the National
Coconut Corporation. So that the circumstances do not justify the finding that there was an implied agreement that the defendant-
appellant was to pay for the use and occupation of the premises at all.

The above considerations show that plaintiff-appellee's claim for rentals before it obtained the judgment annulling the sale of the Taiwan
Tekkosho may not be predicated on any negligence or offense of the defendant-appellant, or any contract, express or implied, because
the Allien Property Administration was neither a trustee of plaintiff-appellee, nor a privy to the obligations of the Taiwan Tekkosho, its
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title being based by legal provision of the seizure of enemy property. We have also tried in vain to find a law or provision thereof, or
any principle in quasi contracts or equity, upon which the claim can be supported. On the contrary, as defendant -appellant entered into
possession without any expectation of liability for such use and occupation, it is only fair and just that it may not be held liable therefor.
And as to the rents it collected from its lessee, the same should accrue to it as a possessor in good faith, as th is Court has already
expressly held. (Resolution, National Coconut Corporation vs. Geronimo, 83 Phil. 467.)

Lastly, the reservation of this action may not be considered as vesting a new right; if no right to claim for rentals existed at the time of
the reservation, no rights can arise or accrue from such reservation alone.

Wherefore, the part of the judgment appealed from, which sentences defendant -appellant to pay rentals from August, 1946, to February
28, 1949, is hereby reversed. In all other respects the judgment is affirmed. Costs of this appeal shall be against the plaintiff-appellee.

Paras, C.J., Pablo, Bengzon, Padilla, Tuason, Montemayor, and Bautista Angelo, JJ, concur.

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Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. L-13602 April 6, 1918

LEUNG BEN, plaintiff,


vs.
P. J. O'BRIEN, JAMES A OSTRAND and GEO. R. HARVEY, judges of First Instance of city of Manila, defendants.

Thos. D. Aitken and W. A. Armstrong for plaintiff.


Kincaid & Perkins for defendants.

STREET, J.:

This is an application for a writ of certiorari, the purpose of which is to quash an attachment issued from the Court of First Instance of
the City of Manila under circumstances hereinbelow stated.

Upon December 12, 1917, an action was instituted in the Court of First Instance of the city of Manila by P. J. O'Brien to recover of
Leung Ben the sum of P15,000 alleged to have been lost by the plaintiff to the defendant in a series of gambling, banking and percentage
games conducted ruing the two or three months prior to the institution of the suit. In his verified complaint the plaintiff asked for an
attachment, under section 424, and 412 (1) of the Code of Civil Procedure, against the property of the defendant, on the grou nd that the
latter was about to depart from the Philippine islands with intent to defraud his creditors. This attachment was issued; and acting under
the authority thereof, the sheriff attached the sum of P15,000 which had been deposited by the defendant with the Internatio nal Banking
Corporation.

The defendant thereupon appeared by his attorney and moved the court to quash the attachment. Said motion having dismissed in the
Court of First Instance, the petitioner, Leung Ben, the defendant in that action, presented to this c ourt, upon January 8, 1918 his petition
for the writ of certiorari directed against P. J. O'Brien and the judges of the Court of First Instance of the city of Manila whose names
are mentioned in the caption hereof. The prayer is that the Honorable James A. Ostrand, as the judge having cognizance of the action in
said court be required to certify the record to this court for review and that the order of attachment which had been issued should be
revoked and discharged. with costs. Upon the filing of said petition in this court the usual order was entered requiring the defendants to
show cause why the writ should not issue. The response of the defendants, in the nature of a demurrer, was filed upon January 21, 1918;
and the matter is now heard upon the pleadings thus presented.

The provision of law under which this attachment was issued requires that there should be accuse of action arising upon contr act, express
or implied. The contention of the petitioner is that the statutory action to recover money lost at gaming is that the statutory action to
recover money lost at gaming is no such an action as is contemplated in this provision, and he therefore insists that the original complaint
shows on its face that the remedy of attachment is not available in aid thereof; that the Court of First Instance acted in excess of its
jurisdiction in granting the writ of attachment; that the petitioner has no plain, speedy, and adequate remedy by appeal or o therwise; and
that consequently the writ of certiorari supplies the appropriate remedy for his relief.

The case presents the two following questions of law, either of which, if decided unfavorably to the petitioner, will be fata l to his
application:

(1) Supposing that the Court of First Instance has granted an attachment for which there is no statutory authority, can this court entertain
the present petition and grant the desired relief?

(2) Is the statutory obligation to restore money won at gaming an obligation arising from "contract, express or implied?"

We are of the opinion that the answer to the first question should be in the affirmative. Under section 514 of the Code of Civil Procedure
the Supreme Court has original jurisdiction by the writ of certiorari over the proceedings of Courts of First Instance, wherever said
courts have exceeded their jurisdiction and there is no plaint, speedy, and adequate remedy. In the same section, it is furthe r declared
that the proceedings in the Supreme Court in such cases hall be as prescribed for Courts of First Instance in section 217-221, inclusive,
of said Code. This Supreme Court, so far as applicable, the provisions contained in those section to the same extent as if th ey had been
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reproduced verbatim immediately after section 514. Turning to section 217, we find that, in defining the conditions under
which certiorari can be maintained in a Court of First Instance substantially the same language is used as is the same remedy can be
maintained in the Supreme Court of First Instance, substantially the same language is used as is found in section 514 relative to the
conditions under which the same remedy can be maintained in the Supreme Court, namely, when the inferior tribunal has exceede d its
jurisdiction and there is no appeal, nor any plain, speedy and adequate remedy. In using thes e expressions the author of the Code of
Civil Procedure merely adopted the language which, in American jurisdictions at least, had long ago reached the stage of ster eotyped
formula.

In section 220 of the same Code, we have a provision relative to the final proceedings in certiorari, and herein it is stated that the court
shall determine whether the inferior tribunal has regularly pursued its authority it shall give judgment either affirming ann ulling, or
modifying the proceedings below, as the law requires. The expression, has not regularly pursued its authority as here used, is suggestive,
and we think it should be construed in connection with the other expressions have exceeded their jurisdiction, as used in sec tion 514,
and has exceeded their jurisdiction as used in section 217. Taking the three together, it results in our opinion that any irregular exercise
of juridical power by a Court of First Instance, in excess of its lawful jurisdiction, is remediable by the writ of certiorari, provided there
is no other plain, speedy, and adequate remedy; and in order to make out a case for the granting of the writ it is not necessary tha t the
court should have acted in the matter without any jurisdiction whatever. Indeed the repeated use of expression excess of jurisdiction
shows that the lawmaker contemplated the situation where a court, having jurisdiction should irregularly transcend its author ity as well
as the situation where the court is totally devoid of lawful power.

It may be observed in this connection that the word jurisdiction as used in attachment cases, has reference not only to the authority of
the court to entertain the principal action but also to its authority to issue the attachment, as dependent upon the existenc e of the statutory
ground. (6 C. J., 89.) This distinction between jurisdiction to issue the attachment as an ancillary remedy incident to the principal
litigation is of importance; as a court's jurisdiction over the main action may be complete, and yet it may lack authority to grant an
attachment as ancillary to such action. This distinction between jurisdiction over the ancillary has been recognized by this cour t in
connection with actions involving the appointment of a receiver. Thus in Rocha & Co. vs. Crossfield and Figueras (6 Phil. Rep., 355), a
receiver had been appointed without legal justification. It was held that the order making the appointment was beyond the jur isdiction
of the court; and though the court admittedly had jurisdiction of the main cause, the order was vacated by this court upon application a
writ of certiorari. (See Blanco vs. Ambler, 3 Phil. Rep., 358, Blanco vs. Ambler and McMicking 3 Phil. Rep., 735, Yangco vs. Rohde,
1 Phil. Rep., 404.)

By parity of reasoning it must follow that when a court issues a writ of attachment for which there is no statutory authority, it is acting
irregularly and in excess of its jurisdiction, in the sense necessary to justify the Supreme Court in granting relief by the writ of certiorari.
In applying this proposition it is of course necessary to take account of the difference between a ground of attachment based on the
nature of the action and a ground of attachment based on the acts or the conditions of the defendant. Every complaint must sh ow a cause
of action some sort; and when the statue declares that the attachment may issue in an action arising upon contract, the express or implied ,
it announces a criterion which may be determined from an inspection of the language of the complaint. The determination of th is question
is purely a matter of law. On the other hand, when the stature declares that an attachment may be issued when the defendant is about to
depart from the Islands, a criterion is announced which is wholly foreign to the cause of action; and the determination of it may involve
a disputed question of fact which must be decided by the court. In making this determination, the court obviously acts within its powers;
and it would be idle to suppose that the writ of certiorari would be available to reverse the action of a Court of First Instance in
determining the sufficiency of the proof on such a disputed point, and in granting or refusing the attachment accordingly.

We should not be understood, in anything that has been said, as intending to infringe the doctrine enunciated by th is court in
Herrera vs. Barretto and Joaquin (25 Phil. Rep., 245), when properly applied. It was there held that we would not, upon application for
a writ of certiorari, dissolve an interlocutory mandatory injunction that had been issued in a Court of Firs t Instance as an incident in an
action of mandamus. The issuance of an interlocutory injunction depends upon conditions essentially different from those involved in
the issuance of an attachment. The injunction is designed primarily for the prevention of irreparable injury and the use of the remedy is
in a great measure dependent upon the exercise of discretion. Generally, it may be said that the exercise of the injunctive p owers is
inherent in judicial authority; and ordinarily it would be impossible to distinguish between the jurisdiction of the court in the main
litigation and its jurisdiction to grant an interlocutory injunction, for the latter is involved in the former. That the writ of certiorari can
not be used to reverse an order denying a motion for a preliminary injunction is of course not to cavil. (Somes vs. Crossfield and Molina,
8 Phil. Rep., 284.)

But it will be said that the writ of certiorari is not available in this cae, because the petitioner is protected by the attachment bond, and
that he has a plain, speedy, and adequate remedy appeal. This suggestion seems to be sufficiently answered in the case of Rocha &
Co vs. Crossfield and Figueras (6 Phil. Rep., 355), already referred to, and the earlier case there cited. The remedy by appeal is n ot
sufficiently speedy to meet the exigencies of the case. An attachment is extremely violent, and its abuse may often result in infliction of
damage which could never be repaired by any pecuniary award at the final hearing. To postpone the granting of the writ in such a case

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until the final hearing and to compel the petitioner to bring the case here upon appeal merely in order to correct the action of the trial
court in the matter of allowing the attachment would seem both unjust and unnecessary.

Passing to the problem propounded in the second question it may be observed that, upon general principles,. recognize both the civil
and common law, money lost in gaming and voluntarily paid by the loser to the winner can not in the absence of statue, be rec overed in
a civil action. But Act No. 1757 of the Philippine Commission, which defines and penalizes several forms of gambling, contain s
numerous provisions recognizing the right to recover money lost in gambling or in the playing of certain games (secs. 6, 7, 8 , 9, 11).
The original complaint in the action in the Court of First Instance is not clear as to the particular section of Act No. 1757 under which
the action is brought, but it is alleged that the money was lost at gambling, banking, and percentage game in which the defendant was
banker. It must therefore be assumed that the action is based upon the right of recovery given in Section 7 of said Act, whic h declares
that an action may be brought against the banker by any person losing money at a banking or perc entage game.

Is this a cause arising upon contract, express or implied, as this term is used in section 412 of the Code of Civil Procedure ? To begin the
discussion, the English version of the Code of Civil Procedure is controlling (sec. 15, Admin. Code, ed . of 1917). Furthermore it is
universally admitted to be proper in the interpretation of any statute, to consider its historical antecedents and its juris prudential sources.
The Code of Civil Procedure, as is well known, is an American contribution to Philippine legislation. It therefore speaks the language
of the common-law and for the most part reflects its ideas. When the draftsman of this Code used the expression contract, express or
implied, he used a phrase that has been long current among writers on American and English law; and it is therefore appropriate to resort
to that system of law to discover the appropriate to resort to that system of law to discover the meaning which the legislato r intended to
convey by those meaning which the legislator intended to convey by those terms. We remark in passing that the expression contrato
tracito, used in the official translation of the Code of Civil Procedure as the Spanish equivalent of implied contract, does not app ear to
render the full sense of the Englis h expression.

The English contract law, so far as relates to simple contracts is planted upon two foundations, which are supplied by two ve ry different
conceptions of legal liability. These two conceptions are revealed in the ideas respectively underlying (1) the common- law debt and (2)
the assumptual promise. In the early and formative stages of the common -law the only simple contract of which the courts took account
was the real contract or contract re, in which the contractual duty imposed by law arises upon the delivery of a chattle, as in
the mutuum, commodatum, depositum, and the like; and the purely consensual agreements of the Roman Law found no congenial place
in the early common law system.

In course of time the idea underlying the contract re was extended so as to include from one person to another under such circumstances
as to constitute a justa cuas debendi. The obligation thereby created was a debt. The constitutive element in this litigation is found in
the fact that the debtor has received s omething from the creditor, which he is bound by the obligation of law to return or pay for. Fro m
an early day this element was denominated the quid pro quo, an ungainly phrase coined by Mediaeval Latinity. The quid pro quo was
primarily a materials or physical object, and its constituted the recompense or equivalent acquired by the debtor. Upon the passage of
the quid pro quo from one party to the other, the law imposed that real contractual duty peculiar to the debt. No one conversant with the
early history of English law would ever conceive of the debt as an obligation created by promise. It is the legal duty to pay or deliver a
sum certain of money or an ascertainable quantity of ponderable or measurable chattles.

The ordinary debt, as already stated, originates in a contract in which a quid pro quo passes to the debtor at the time of the creation of
the debt, but the term is equally applicable to duties imposed by custom or statute, or by judgment of a court.

The existence of a debt supposes one person to have possession of thing (res) which he owes and hence ought to turn over the owner.
This obligation is the oldest conception of contract with which the common law is familiar; and notwithstanding the centuries that have
rolled over Westminster Hall that conception remains as one of the fundamental bases of the common -law contract.

Near the end of the fifteenth century there was evolved in England a new conception of contractual liability, which embodied the idea
of obligation resulting from promise and which found expression in the common law assumpsit, or parol promise supported by a
consideration. The application of this novel conception had the effect of greatly extending the filed of contractual liabilit y and by this
means rights of action came to be recognized which had been unknown before. The action of assumpsit which was the instrument for
giving effect to this obligation was found to be a useful remedy; and presently this action came to be used for the enforceme nt of
common-law debts. The result was to give to our contract law the superficial appearance of being based more or less exclusively upon
the notion of the obligation of promise.

An idea is widely entertained to the effect that all simple contracts recognized in the common -law system are referable to a singly
category. They all have their roots, so many of us imagine, in one general notion of obligation; and of course the obligation of promise
is supposed to supply this general notion, being considered a sort of menstruum in which all other forms of contractual obligation have
been dissolved. This a mistake. The idea of contractual duty embodied in the debt which was the first conception of contract liability
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revealed in the common law, has remained, although it was detained to be in a measure obscured by the more modern conception of
obligation resulting from promise.

What has been said is intended to exhibit the fact that the duty to pay or deliver a sum certain of money or an ascertainable quantity of
ponderable or measurable chattles which is indicated by them debt has ever been recognized, in the common-law system, as a true
contract, regardless, of the source of the duty or the manner in which it is create whether derived from custom, statue or some
consensual transaction depending upon the voluntary acts of the parties. the form of contract known as the debt is of the most ancient
lineage; and when reference is had to historical antecedents, the right of the debt to be classed as a contract cannot be que stioned. Indeed
when the new form of engagement consisting of the parol promise supported by a consideration first appeared, it was looked upon as an
upstart and its right to be considered a true contract was questioned. It was long customary to refer to it exclusively as an assumpsit,
agreement, undertaking, or parol promise, in fact anything but a contract. Only in time did the new form of engagement attain the dignity
of being classed among true contract.

The term implied takers us into shadowy domain of those obligations the theore tical classification of which has engaged the attention
of scholars from the time of Gaius until our own day and has been a source of as much difficulty to the civilian as to the co mmon-law
jurist. There we are concerned with those acts which make one pers on debtor to another without there having intervened between them
any true agreement tending to produce a legal bond (vinculum juris). Of late years some American and English writers have adopted the
term quasi-contract as descriptive of these obligations or some of them; but the expression more commonly used is implied contract.

Upon examination of these obligations, from the view point of the common -law jurisprudence, it will be found that they fall readily into
two divisions according as they bear an analogy to the common-law debt or to the common law assumpsit. To exhibit the scope of these
different classes of obligations is here impracticable. It is only necessary in this connection to observe that the most cons picuous division
is that which comprises duties in the nature of debt. The characteristic feature of these obligations is that upon certain states of fact the
law imposes an obligation to pay a sum certain of money; and it is characteristic of this obligation that the money in respec t to which
the duty is raised is conceived as being equivalent of something taken or detained under circumstances giving rise to the duty to return
or compensate therefore. The proposition that no one shall be allowed to enrich himself unduly at the expense of another embodies the
general principle here lying at the basis of obligation. The right to recover money improperly paid (repeticion de lo indebido) is also
recognized as belong to this class of duties.

It will observed that according to the Civil Code obligations are supposed to be derived either from (1) the law, (2) contracts and quasi-
contracts, (3) illicit acts and omission, or (4) acts in which some sort ob lame or negligence is present. This enumeration o f sources of
obligations and the obligation imposed by law are different types. The learned Italian jurist, Jorge Giorgi, criticises this assumption and
says that the classification embodied in the code is theoretically erroneous. His conclusion is that one or the other of thes e categories
should have been suppressed and merged in the other. (Giorgi, Teoria de las Obligaciones, Spanish ed., vol. 5 arts. 5, 7, 9.) The validity
of this criticism is, we thin, self-evident; and it is of interest to note that the common law makes no distinction between the two sources
of liability. The obligations which in the Code are indicated as quasi-contracts, as well as those arising ex lege, are in the common la
system, merged into the category of obligations imposed by law, and all are denominated implied contracts.

Many refinements, more or less illusory, have been attempted by various writers in distinguishing different sorts of implied contracts,
as for example, the contract implied as of fact and the contract implied as of law. No explanation of these distinctions will be here
attempted. Suffice it to say that the term contract, express or implied, is used to by common -law jurists to include all purely personal
obligations other than those which have their source in delict, or tort. As to these it may be said that, generally speaking, the law does
not impose a contractual duty upon a wrongdoer to compensate for injury done. It is true that in certain situations where a w rongdoer
unjustly acquired something at the expense of another, the law imposes on him a duty to surrende r his unjust acquisitions, and the injured
party may here elect to sue upon this contractual duty instead of suing upon the tort; but even here the distinction between the two
liabilities, in contract and in tort, is never lost to sight; and it is always recognized that the liability arising out of the tort is delictual and
not of a contractual or quasi-contractual nature.

In the case now under consideration the duty of the defendant to refund the money which he won from the plaintiff at gaming is a duty
imposed by statute. It therefore arises ex lege. Furthermore, it is a duty to return a certain sum which had passed from the plaintiff to the
defendant. By all the criteria which the common law supplies, this a duty in the nature of debt and is properly classified as an implied
contract. It is well- settled by the English authorities that money lost in gambling or by lottery, if recoverable at all, can be recovered by
the loser in an action of indebitatus assumpsit for money had and received. (Clarke vs. Johnson. Lofft, 759; Mason vs. Waite, 17 Mass.,
560; Burnham vs. Fisher, 25 Vt., 514.) This means that in the common law the duty to return money won in this way is an implied
contract, or quasi-contract.

It is no argument to say in reply to this that the ob ligation here recognized is called an implied contract merely because the remedy
commonly used in suing upon ordinary contract can be here used, or that the law adopted the fiction of promise in order to br ing the

7
obligation within the scope of the action of assumpsit. Such statements fail to express the true import of the phenomenon. Before the
remedy was the idea; and the use of the remedy could not have been approved if it had not been for historical antecedents which made
the recognition of this remedy at one logical and proper. Furthermore, it should not be forgotten that the question is not how this duty
but what sort of obligation did the author of the Code of Civil Procedure intend to describe when he sued the term implied co ntract in
section 412.

In what has been said we have assumed that the obligation which is at the foundation of the original action in the court below is not a
quasi-contract, when judge by the principles of the civil law. A few observations will show that this assumption is not by any means
free from doubt. The obligation in question certainly does not fall under the definition of either of the two -quasi- contracts which are
made the subject of special treatment in the Civil Code, for its does not arise from a licit act as contemplated in article 1895. The
obligation is clearly a creation of the positive law a circumstance which brings it within the purview of article 1090, in relation with
article, 1089; and it is also derived from an illicit act, namely, the playing of a prohibited game. It is thus seen that the provisions of the
Civil Code which might be consulted with a view to the correct theoretical classification of this obligation are unsatisfacto ry and
confusing.

The two obligations treated in the chapter devoted to quasi-contracts in the Civil Code are (1) the obligation incident to the officious
management of the affairs of other person (gestion de negocios ajenos) and (2) the recovery of what has been improperly paid (cabro
de lo indebido). That the authors of the Civil Code selected these two obligations for special treatment does not signify an intention to
deny the possibility of the existence of other quasi-contractual obligations. As is well said by the commentator Manresa.

The number of the quasi-contracts may be indefinite as may be the number of lawful facts, the generations of the said
obligations; but the Code, just as we shall see further on, in the impracticableness of enumerating or including them all in a
methodical and orderly classification, has concerned itself with two only namely, the management of the affairs of other
person and the recovery of things improperly paid without attempting by this to exclude the others. (Manresa, 2d ed., vol.
12, p. 549.)

It would indeed have been surprising if the authors of the Code, in the light of the jurisprudence of more than a thousand years, should
have arbitrarily assumed to limit the quasi-contract to two obligations. The author from whom we have just quoted further observes that
the two obligations in question were selected for special treatment in the Code not only because they were the most conspicuous of the
quasi-contracts, but because they had not been the subject of consideration in other parts of the Code. (Opus citat., 550.)

It is well recognized among civilian jurists that the quasi- contractual obligations cover a wide range. The Italian jurist, Jorge Giorgi, to
whom we have already referred, considers under this head, among other obligations, the following: payments made upon a future
consideration which is not realized or upon an existing consideration which fails; payments wrongfully made upon a consideration which
is contrary to law, or opposed to public policy; and payments made upon a vicious consideration or obtained by illicit means
(Giorgi, Teoria de las Obligaciones, vol. 5, art. 130.)

Im permitting the recovery of money lost at play, Act No. 1757 has introduced modifications in the application of articles 1798, 180`,
and 1305 of the Civil Code. The first two of these articles relate to gambling contracts, while article 1305 treats of the nullity of contracts
proceeding from a vicious or illicit consideration. Taking all these provisions together, it must be apparent that the obliga tion to return
money lost at play has a decided affinity to contractual obligations; and we believe that it could, without violence to the doctrines of the
civil law, be held that such obligations is an innominate quasi-contract. It is, however, unnecessary to place the decision on this ground.

From what has been said it follows that in our opinion the cause of action stated in the complaints in the court below is based on a
contract, express or implied and is therefore of such nature that the court had authority to issue writ of attachment. The ap plication for
the writ of certiorari must therefore be denied and the proceedings dismissed. So ordered.

Arellano, C.J., Torres, Johnson and Carson, JJ., concur.

Separate Opinions

MALCOLM, J., concurring:

As I finished reading the learned and interesting decision of the majority, the impression which remained was that the court was enticed
by the nice and unusual points presented to make a hard case out of an easy one and unfortunately t do violence to the principles
of certiorari. The simple questions are : Di the Court of First Instance of city of Manila exceed its jurisdiction in granting an attachme nts
against the property of the defendant, now plaintiff? Has this defendant, now become the plaintiff, any other plain, speedy and adequate

8
remedy? The answer are found in the decision of thinks court, in Herrera vs. Barretto and Joaquin ([1913], 25 Phil., 245), from which I
quote the following:

It has been repeatedly held by this court that a writ of certiorari will not be issued unless it clearly appears that the court to
which it is to be directed acted without or in excess of jurisdiction. It will not be issued to cure errors in the proceeding s or to
correct erroneous conclusions of law or of fact. If the court has jurisdiction. It will not be issued to cure errors in the proceedings
to correct jurisdiction of the subject matter and f the person, decisions upon all question pertaining to the cause are decis ions
within its jurisdiction and, however irregular or erroneous they may be, cannot be corrected by certiorari. The Code of Civil
Procedure giving Courts of First Instance general jurisdiction in actions for mandamus, it goes without saying that the Court of
First Instance had jurisdiction in the present case to resolve every question arising in such an action and t decide every question
presented to it which pertained to the cause. It has already been held by this court, that while it is a power to be exercise d only
in extreme case, a Court of First Instance has power to issue a mandatory injunction t stand until the final determination of the
action in which it is issued. While the issuance of the mandatory injunction in this particular case may have been irregular and
erroneous, a question concerning which we express no opinion, nevertheless its issuance was within the jurisdiction of the court
and its action is not reveiwable on certiorari. It is not sufficient to say that it was issued wrongfully and without sufficient
grounds and in the absence of the other party. The question is, Did the court act with jurisdiction?

It has been urged that the court exceeded its jurisdiction in requiring the municipal president t issue the license, for the reason
that he was not the proper person to issue it and that, if he was the proper person, he had the right to exercise a discretion as to
whom the license should be issued. We do not believe that either of these questions goes to the jurisdiction of the court to act.
One of the fundamental question in a mandamus against a public officer is whether or not that officer has the right to exercise
discretion in the performance of the act which the plaintiff asks him to perform. It is one of the essential determinations o f the
cause. To claim that the resolution of that ques tion may deprive the court of jurisdiction is to assert a novel proposition. It is
equivalent to the contention that a court has jurisdiction if he decides right but no jurisdiction if he decides wrong. It ma y be
stated generally that it is never necessary to decide the fundamental questions of a cause to determine whether the court has
jurisdiction. The question of jurisdiction is preliminary and never touches the merits of the case. The determination of the
fundamental questions of a cause are merely the exercise of a jurisdiction already conceded. In the case at bar no one denies
the power, authority or jurisdiction of the Court of First Instance to take cognizance of an action for mandamus and to decide
very question which arises in that cause and pertains thereto. The contention that the decision of one of those question, if wrong,
destroys jurisdiction involves an evident contradiction.

Jurisdiction is the authority to hear and determine a cause the right to act in a case. Since it is the power to hear and determine,
it does not depend either upon the regularity of the exercise of that power or upon the rightfulness of the decision made.
Jurisdiction should therefore be distinguished from the exercise of jurisdiction. The authority to decide a case at all, and not
the decision rendered therein, is what makes up jurisdiction. Where there is jurisdiction of the person and subject matter, a s we
have said before, the decision of all other questions arising in the case an exercise of that jurisdiction.

Then follows an elaborate citation and discussion of American authorities, including a decision of the United States Supreme Court and
of the applicable Philippine cases. The decision continues"

The reasons givens in these cases last cited for the allowance of the writ of prohibition are applicable only to the class of cases
with which the decision deal and do not in any way militate against the general proposition herein asserted. Those which rela te
to election contest are based upon the principle that those proceedings, are special in their nature and must be strictly followed,
a material departure from the statute resulting a loss, or in an excess of jurisdiction. The cases relating to receivers are based,
in a measure, upon the principle the appointment of a receiver being governed by the statute; and in part upon the theory that
the appointment of a receiver in an improper case is in substance a bankruptcy proceeding, the taking of which is expressly
prohibited by law. The case relative to the allowance of alimony pendente lite when the answer denies the marriage is more
difficult to distinguish. The reasons in support of the doctrine laid down in that case are given the opinion in full and the y seem
to place the particular case to which they refer in a class by itself.

It is not alight things that the lawmakers have abolished writs of error and with them certiorari and prohibition, in so far as
they were methods by which the mere errors of an inferior curt could be corrected. As instruments to that end they no longer
exist. Their place is no taken by the appeal. So long as the inferior court retains jurisdiction its errors can be corrected only by
that method. The office of the writ of certiorari has been reduced to the correction of defects of jurisdiction solely and cannot
legally be used for any other purpose. It is truly an extra ordinary remedy and in this jurisdiction, its use is restricted t o truly
extraordinary cases cases in which the action of the inferior court is wholly void, where any further step s in the case would
result in a waste of time and money and would produce no result whatever; where the parties, or their privies, would be utter ly
deceived; where a final judgment or decree would be nought but a snare and a delusion, deciding nothing, pro tecting nobody,

9
a juridical pretension, a recorded falsehood, a standing menace. It is only to avoid such result as these that a writ of certiorari is
issuable; and even here an appeal will lie if the aggrieved party prefers to prosecute it.

A full and thorough examination of all the decided cases in this court touching the question of certiorari and prohibition fully
supports the proposition already stated that, where a Court of First Instance has jurisdiction of the subject matter and of t he
person, its decision of any question pertaining to the cause, however, erroneous, cannot be reviewed by certiorari, but must be
corrected by appeal.

I see no reason to override the decision in Herrera vs. Barretto and Joaquin (supra). Accordingly, I can do no better than to make the
language of Justice Moreland my own. applying these principles, it is self-evident that this court should no entertain the present petition
and should not grant the desired relief.

FISHER, J., dissenting:

I am in full accord with the view that the remedy of certiorari may be invoked in such cases as this, but I am constrained to dissent from
the opinion of the majority as regards the meaning of the term implied contract.

Section 412 of the code of Civil Procedure in connection with section 424, authorizes the preliminary attachment of the property of the
defendant: "(1) In an action for the recovery of money or damages on a cause of action arising upon contract, express or implied, when
the defendant is about to depart from the Philippine Islands, with intent to defraud his creditors; (2) . . .; (3) . . .; (4) . . .; (5) When the
defendant has removed or disposed of his property, or is about to do so, with intent to defraud his creditors."

It is evident that the terms of paragraph five of the article cited are much broader than those of the first paragraph. The fifth paragraph
is not limited to action arising from contract, but is by its terms applicable to actions brought for the purpose of enforcin g extra -
contractual rights as well as contract rights. The limitation upon cases falling under paragraph five is to be found, not in the character of
the obligation for the enforcement for which the action is brought, but in the terms of article 4265, which requires that the affidavit show
that the amount due the plaintiff . . . is as much as the sum for which the order is granted.

That is to say, when application is made for a preliminary attachment upon the ground that the plaintiff is about to dispose of his property
with intent to defraud his creditors thus bringing the case within the terms of paragraph five of the section it is not necessary to
show that the obligation in suit is contractual in its origin, but is sufficient to show that the breach of the obligation, a s shown by the
facts stated in the complaint and affidavit, imposes upon the defendant the obligation to pay a specific and definite sum. For exampl e,
if it is alleged in the complaint that the defendant by negligence, has caused the destruction by fire of a building belongin g to plaintiff,
and that such building was worth a certain sum of money, these facts would show a definite basis upon which to authorize the granting
of the writ. But if it were averred that the defendant has published a libel concerning the plaintiff, to the injury of his feeling and
reputation, there is no definite basis upon which to grant an attachment, because the amount of the damage suffered, being ne cessarily
uncertain and indeterminate, cannot be ascertained definitely until the trail has been complet ed.

But it appears that the legislature although it has seen fit to authorize a preliminary attachment in aid of action of all kinds when the
defendant is concealing his property with intent to defraud his creditors, has provided is about to depart from th e country with intent to
defraud his creditos, the writ will issue only when the action in aid of which it is sought arises from a contract express or implied. If an
attachment were permitted upon facts bringing the application with the first paragraph of the section in support of action of any kind,
whether the obligation sued upon is contractual or not, then paragraph five would by construction be made absolutely identica l with
paragraph one, and this would be in effect equivalent to the complete eliminat ed of the last two lines of the first paragraph. It is a rule
of statutory construction that effect should be given to all parts of the statue, if possible. I can see no reason why the legislature should
have limited cases falling within the firs paragraph to action arising from contract and have refrained from imposing this limitation with
respect to cases falling within the terms of the fifth paragraph, but this should have no effect upon us in applying the law. Whether there
be a good reason for it or not the distinction exists.

Had the phrase express or implied not been used to qualify contract, there would be no doubt whatever with regard to the mean ing of
the word. In the Spanish Civil law contract are always consensual, and it would be impossible to d efine as a contract the judicial relation
existing between a person who has lost money at gaming and the winner of such money, simple because the law imposes upon the
winner the obligation of making restitution. An obligation of this kind, far from being c onsensual in its origin, arises against the will of
the debtor. To call such a relation a contract is, from the standpoint of the civil law, a contradiction in terms.

But is said that as the phase express or implied has been used to qualify the word contra ct and these words are found in statue which
speaks the language of the common law, this implies the introduction into our law of the concept of the implied contract of t he English
common-law, a concept which embraces a certain class of obligation originat ing ex lege, which have been arbitrarily classified as
10
contracts, so that they might be enforced by one of the formal actions of the common law which legal tradition and practice h as reserved
for the enforcement of contract. I cannot concur in this reasoning. I believe that when a technical juridical term of substantive law is
used in the adjective law of these islands, we should seek its meaning in our own substantive law rather than in the law of A merica or
of England. The code of Civil Procedure was not enacted to establish rules of substantive law, but upon the assumption of the existence
of these rules.

In the case of Cayce vs. Curtis (Dallam's Decisions Texas Reports, 403), it appears that the legislature, at a time when that State still
retained to a large extent the Spanish substantive civil law, enacted a statue in which the word bonds is used. In litigation involving the
construction of that statute, one of the parties contended that the work bond should be given the technical meaning which it had in the
English Common Law. The court rejected this contention saying

On the first point it is urged by counsel for the appellant that the word bond used in the statute being a common law term, w e must refer
to the common law for its legal signification; and that by that law no instrument is a bond which is not under seal. The truth of the
proposition that sealing is an absolute requisite to the validity of a bond at common law is readily admitted; but the applic ability of that
rule of the case under consideration is not perceived. This bond was taken at a time when the common law afforded no rule of decision
or practice in this country, and consequently that law cannot be legitimately resorted to, even for the purpose for which it is invoked by
the counsel for the appellant, unless it be shown that the civil law had not term of similar import for we regard it as a correct rule of
construction, that where technical terms are used in a statute they are to be referred for their signification to terms f similar import in the
system of laws which prevails in the country where the statues is passed, and not to another system which is entirely foreign t the whole
system of municipal regulations by which that country is governed. (Martin's Reports, vol. 3, 185; 7 Martin [N. S.], 162.)"

Consequently, I believe that in the interpretation of phase "contract, express or implied," we should apply the rules of our own substantive
law. The phrase in itself offers no difficulty. The concept of the contract, under the Civil Co de, as a legal relation
of exclusively consensual origin, offers no difficulty. Nor is any difficulty encountered in the gramatical sense of the words express and
"implied". Express according to the New International Dictionary is that which is directly an d distinctly stated; expressed, not merely
implied or left to interference. Therefore, a contract entered into by means of letters, in which the offer and the acceptanc e have been
manifested by appropriate words, would be an "express contract." The word "imply" according to the same dictionary, is to involve in
substance or essence, or by fair inference, or by construction of law, when not expressly stated in words or signs; to contain by
implication to include virtually.

Therefore, if I enter a tailor shop and order a suit of clothes, although nothing is said regarding payment, it is an inference, both logical
and legal, from my act that is my intention to pay the reasonable value of the garments. The contract is implied, therefore, is that in
which the consent of the parties is implied.

Manresa, commenting upon article 1262 of the Civil Code, says:

The essence of consent is the agreement of the parties concerning that which is to constitute the contract . . . . The forms of this
agreement may vary according to whether it is expressed verbally or in writing, by words or by acts. Leaving the other
differences for consideration hereafter, we will only refer now to those which exist between express consent
and implied consent . . . . It is unquestionable that implied consent manifested by act or conduct, produces a contract. . . .

If it were necessary to have recourse to the English common law for the purpose of ascertaining the meaning of the phrase und er
consideration, we could find many decisions which gave it the same meaning as that for which I contend.

An implied contract is where one party receives benefits from another party, under such circumstances that the law presume a
promise on the part of the party benefited to pay a reasonable price for the same. (Jones vs. Tucker [Del.], 84 Atlantic, 1012.)

It is true that English courts have extended the concept of the term contract to include certain obligations arising ex lege without consent,
express or implied. True contracts created by implied consent are des ignated in the English common law as contracts implied in the fact,
while the so-called contracts in which the consent is a fiction of law are called contracts implied by law. But is evident that the latter are
not real contracts. They have been called contract arbitrarily by the courts of England, and those of the Untied States in which the English
common law is in force, in order that certain actions arising ex lege may be enforced by the action of assumpsit. In the rigid formulis m
of the English common law the substantive right had to be accommodated to the form of action. As is stated in the monograph on the
action of assumpsit in Ruling Case Law. (volume 2, 743)

In theory it wan action to recover for the nonperformance f simple contracts, and the formula and proceedings were constructed
and carried on accordingly. . . . From the reign of Elizabeth this action has been extended to almost every case where an
obligation arises from natural reason, . . . and it is now maintained in many cases which its principles do not comprehend and
11
where fictions and intendments are resorted to, to fit the actual cause of action to the theory of the remedy. It is thus sanctioned
where there has been no . . . real contract, but where some duty is deemed sufficient to just ify the court in imputing the promise
to perform its, and hence in bending the transaction to the form of action.

In the ancient English common law procedure the form of the action was regarded as being much more important than the substan tive
right to be enforced. If no form of action was found in which the facts would fit, so much the worse for the facts! to avoid the injustic es
to which this condition of affairs gave rise, the judges invented those fictions which permitted them to preserve the appeara nce of
conservatism and change the law without expressly admitting that they were doing so. The indispensable averment, that they we re doing
so. The indispensable avernment without which the action of assumpsit would not lie, was that the defendant promised t o pay plaintiff
the amount demanded. (Sector vs. Holmes, 17 Vs., 566.) In true contracts, whether express or implied, this promise in fact exists. In
obligations arising ex lege there is no such promise, and therefore the action of assumpsit could not be maintained, and therefore the
action of assumpsit could not be maintained, although by reason of its relative simplicity it was one of the most favored for ms of action.
In order to permit the litigant to make use of this form of action for the enforcement o f ascertain classes of obligations arising ex lege,
the judges invented the fiction of the promise of the defendant to pay the amount of the obligation, and as this fictitious promise give
the appearance of consensuality to the legal relations of the parties, the name of implied contract is given to that class of extra-contractual
obligations enforcible by the action of assumpsit.

Now, it is not be supposed that it was the intention of the Legislature in making use in the first paragraph of article 412 o f the phrase
contract, express or implied to corrupt the logical simplicity of our concept of obligations by importing into our law the an tiquated
fictions of the mediaeval English common law. If one of the concepts of the term "implied contract" in the English common law, namely,
that in which consent is presume from the conduct of the debtor, harmonizes with the concept of the contract in our law, why should we
reject that meaning and hold that the Legislature intended to use this phrase in the foreign and illogical sense of a contract arising without
consent? This is a civil law country. why should we be compelled to study the fictions of the ancient English common law, in order to
be informed as to the meaning of the word contract in the law of the Philippine Islands? Much more reasonable to my mind was the
conclusion of the Texas court, under similar circumstances, to the effect to be referred for their signification to terms of similar import
in the system of laws which prevails in the country where the statue is passed." (Cayce vs. Curtis, supra.)

My conclusion is that the phase contract, express or implied should be interpreted in the grammatical sense of the words and limited to
true contracts, consensual obligations arising from consent, whether expressed in words, writing or signs, or presumed from conduct.
As it is evident that the defendant in the present case never promised, him in the gambling game in question, his obligation to restor the
amounts won, imposed by the law, is no contractual, but purely extra-contractual and therefore the action brought not being one arising
upon contract express or implied, the plaintiff is not entitled to a preliminary attachment upon the averment that the defend ant is about
to depart from the Philippine Islands with with intent t defraud his creditors, no averment being made in the compliant or in the affidavit
that the defendant has removed or disposed of his property, or is about to depart with intent to defraud his creditors, so as to bring the
case within the terms of the fifth paragraph of section 412.

I am unable to agree with the contention of the application (Brief, p. 39) here that the phase in question should be interpre ted in such a
way as to include all obligations, whether arising from consent or ex lege, because that is equivalent to eliminating all distinction between
the first and the fifth paragraphs by practically striking out the first two lines of paragraph one. The Legislature has deliberately
established this distinction, and while we may be unable to see any reason why it should have been made, it is our duty to apply
and interpret the law, and we are not authorized under the guise of interpretation to virtually repeal part of the statute.

Nor can it be said that the relations between the parties litigant constitute a quasi-contract. In the first place, quasi- contracts are
"lawful and purely voluntary acts by which the authors thereof become obligated in favor of a third person. . . ." The act which gave rise
to the obligation ex lege relied upon by the plaintiff in the court below is illicit an unlawful gambling game. In the second place, the
first paragraph of section 412 of the Code of Civil Procedure does not authorize an attachment in actions arising out of quasi contracts,
but only in actions arising out of contract, express or implied.

I am therefore of the opinion that the court below was without jurisdiction to issue that writ of attachment and that the writ should be
declared null and void.

Avancea, J., concurs.

12
Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. L-17133 December 31, 1965

U.S.T. COOPERATIVE STORE, petitioner-appellee,


vs.
THE CITY OF MANILA and MARCELINO SARMIENTO, as Treasurer of the City of Manila, respondents-appellants.

Herras Law Office for petitioner-appellee.


City Fiscal H. Concepcion, Jr. and Assistant City Fiscal Manuel T. Reyes for respondents-appellants.

MAKALINTAL, J.:

This is an appeal by respondents from the decision of the Court of First Instance of Manila ordering them t o refund to appellee the sums
it had paid to the City of Manila as municipal taxes and license fees for the period beginning July 1957 up to December 1958. The total
amount involved is P12,345.10.

The material facts were stipulated by the parties. Appellee is a duly organized cooperative association registered with the Securities and
Exchange Commission on March 18, 1947 in accordance with Commonwealth Act No. 5165 as amended. Its net assets never exceeded
P500,000 during, the years 1957, 1958 and 1959. From the time of its registration it was under the jurisdiction of the Cooperative
Administration Office.

On June 22, 1957 Republic Act No. 2023, otherwise known as the Philippine Non -Agricultural Cooperative Act, was approved by
Congress, amending and consolidating existing laws on non-agricultural cooperatives in the Philippines. The two provisions of said Act
which bear on the present case are sections 4 (1) and 66 (1), which read as follows:

SEC. 4 (1) Every cooperative under the jurisdiction of the Cooperatives Administration Office existing at the time of the approval
of this Act which has been registered under existing cooperative laws (Commonwealth Act five hundred sixty -five, Act Twenty
five hundred eight and Act Thirty-four hundred twenty-five, all as amended) shall be deemed to be registered under this Act, and
its by-laws shall so far as they are not inconsistent with the provisions of this Act, continue in force , and be deemed to be regis tered
under this Act.

SEC. 66 (1) Cooperatives with net assets of not more than five hundred thousand pesos shall be exempt from all taxes and
government fees of whatever name, and nature except those provided for under this Act: ... .

Unaware of the exemption provided for in section 66 (1) appellee paid to responde nt City of Manila municipal taxes and license fees in
the total amount and for the period already stated. In May 1959 appellee requested a refund of said amount from the City Trea surer, but
the request was denied. Hence the present suit.

Appellants contend that the exemption under section 66 (1) does not apply to appellee because the latter was trying business not only
with its members but also with the general public. It may be noted that this fact is not ground for non -exemption from taxes and license
fees. What the law imposes and that under another section (Sec. 58) is a restriction to the effect that a cooperative shall not transact
business with non-members to exceed that done with members. There is no proof that this restriction has been violated; and in any case,
the law does not provide that the penalty for such violation is the non -exemption of the cooperative concerned. All that is required for
purposes of exemption is that the cooperative be registered under Republic Act 2023 and that its net assets be not more than P500,000.
On the question of registration, section 4 is clear that every cooperative under the jurisdiction of the Cooperatives Adminis tration Office
existing at the time of the approval of this Act which has been registered under e xisting cooperative laws (as is the case of appellee
here) shall be deemed to be registered under this Act.

Appellant next argues that since the taxes and license fees in question were voluntarily paid they can no longer be recovered , as appellee
was presumed to know the law concerning its exemption and hence must be considered as having waived the benefit thereof. That the
payment was erroneously made there can be no doubt. The error consisted in appellee's not knowing of the enactment of Republic Act

13
No. 2023, which although passed in Julie 1957 was published only in the issue of the Official Gazette for December of the same ye ar.
The following authorities cited by appellee appear to us to be of persuasive force:

A payment of taxes under a mistake of fact has been held not to be voluntary, and is therefore recoverable. (51 Am. Jur. 1023)

On principle, a recovery should be allowed where money is paid under a mistake of fact although such mistake of fact may be
induced by a mistake of laws, or where there is both a mistake of fact and a mistake of law. (40 Am. Jur. 846)

When money is paid to another under the influence of a mistake of fact that on the mistaken supposition of the existence of
a specific fact which would entitle the other to the money and it would not have been known that the fact making the payment
was otherwise, it may be recovered. The ground upon which the right of recovery rests is that money paid through
misapprehension of facts belongs, in equity , and in good conscience, to the person who paid it. (4 Am. Jur. 514)

We find no reason to attribute negligence to appellee in making the payments in question, especially considering that the new law
involved a change in its status from a taxable to a tax-exempt institution; and if it continued to pay for a time after the exemption became
effective it did so in a desire to abide by what it believed to be the law. No undue disadvantage should be visited upon it a s a consequence
thereof.

The decision appealed from is affirmed, without pronouncemen t as to costs.

14
Republic of the Philippines
SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 101749 July 10, 1992

CONRADO BUNAG, JR., petitioner,


vs.
HON. COURT OF APPEALS, First Division, and ZENAIDA B. CIRILO, respondents.

REGALADO, J.:

Petitioner appeals for the reversal of the decision 1 of respondent Court of Appeals promulgated on May 17, 1991 in CA -G.R. CV No.
07054, entitled "Zenaida B. Cirilo vs. Conrado Bunag, Sr. and Conrado Bunag, Jr.," which affirmed in toto the decision of the Regional
Trial Court, Branch XI at Bacoor, Cavite, and, implicitly, respondent court's resolution of September 3, 1991 2 denying petitioner's
motion for reconsideration.

Respondent court having assiduously discussed the salient antecedents of this cas e, vis-a-vis the factual findings of the court below, the
evidence of record and the contentions of the parties, it is appropriate that its findings, which we approve and adopt, be extensively
reproduced hereunder:

Based on the evidence on record, the following facts are considered indisputable: On the afternoon of September 8, 1973,
defendant-appellant Bunag, Jr. brought plaintiff-appellant to a motel or hotel where they had sexual intercourse. Later that
evening, said defendant-appellant brought plaintiff-appellant to the house of his grandmother Juana de Leon in Pamplona, Las
Pias, Metro Manila, where they lived together as husband and wife for 21 days, or until September 29, 1973. On September
10, 1973, defendant-appellant Bunag, Jr. and plaintiff-appellant filed their respective applications for a marriage license with
the Office of the Local Civil Registrar of Bacoor, Cavite. On October 1, 1973, after leaving plaintiff-appellant, defendant-
appellant Bunag, Jr. filed an affidavit withdrawing his application for a marriage license.

Plaintiff-appellant contends that on the afternoon of September 8, 1973, defendant -appellant Bunag, Jr., together with an
unidentified male companion, abducted her in the vicinity of the San Juan de Dios Hospital in Pasay City and brought her to
a motel where she was raped. The court a quo, which adopted her evidence, summarized the same which we paraphrased as
follows:

Plaintiff was 26 years old on November 5, 1974 when she testified, single and had finished a college cours e in
Commerce (t.s.n., p. 4, Nov. 5, 1974). It appears that on September 8, 1973, at about 4:00 o'clock in the afternoon,
while she was walking along Figueras Street, Pasay City on her way to the San Juan de Dios Canteen to take her snack,
defendant, Conrado Bunag, Jr., came riding in a car driven by a male companion. Plaintiff and defendant Bunag, Jr.
were sweethearts, but two weeks before September 8, 1973, they had a quarrel, and Bunag, Jr. wanted to talk matters
over with plaintiff, so that he invited her to take their merienda at the Aristocrat Restaurant in Manila instead of at the
San Juan de Dios Canteen, to which plaintiff obliged, as she believed in his sincerity (t.s.n., pp. 8-10, Nov. 5, 1974).

Plaintiff rode in the car and took the front seat beside the driver while Bunag, Jr. seated himself by her right side. The
car travelled north on its way to the Aristocrat Restaurant but upon reaching San Juan Street in Pasay City, it turned
abruptly to the right, to which plaintiff protested, but which the duo ignored and instead threatened her not to make any
noise as they were ready to die and would bump the car against the post if she persisted. Frightened and silenced, the
car travelled its course thru F.B. Harrison Boulevard until they reached a motel. Plaintiff was then pulled and dragged
from the car against her will, and amidst her cries and pleas. In spite of her struggle she was no match to the joint
strength of the two male combatants because of her natural weakness being a woman and her small s tature. Eventually,
she was brought inside the hotel where the defendant Bunag, Jr. deflowered her against her will and consent. She could
not fight back and repel the attack because after Bunag, Jr. had forced her to lie down and embraced her, his companion
held her two feet, removed her panty, after which he left. Bunag, Jr. threatened her that he would ask his companion to
come back and hold her feet if she did not surrender her womanhood to him, thus he succeeded in feasting on her

15
virginity. Plaintiff described the pains she felt and how blood came out of her private parts after her vagina was
penetrated by the penis of the defendant Bunag, Jr. (t.s.n. pp. 17-24, Nov. 5, 1974).

After that outrage on her virginity, plaintiff asked Bunag, Jr. once more to allow her to go home but the latter would
not consent and stated that he would only let her go after they were married as he intended to marry her, so much so
that she promised not to make any scandal and to marry him. Thereafter, they took a taxi togethe r after the car that they
used had already gone, and proceeded to the house of Juana de Leon, Bunag, Jr.'s grandmother in Pamplona, Las Pias,
Metro Manila where they arrived at 9:30 o'clock in the evening (t.s.n., p. 26, Nov. 5, 1974). At about ten (10) o 'clock
that same evening, defendant Conrado Bunag, Sr., father of Bunag, Jr. arrived and assured plaintiff that the followin g
day which was a Monday, she and Bunag, Jr. would go to Bacoor, to apply for a marriage license, which they did. They
filed their applications for marriage license (Exhibits "A" and "C") and after that plaintiff and defendant Bunag, Jr.
returned to the house of Juana de Leon and lived there as husband and wife from September 8, 1973 to September 29,
1973.

On September 29, 1973 defendant Bunag, Jr. left and never returned, humiliating plaintiff and compelled her to go back
to her parents on October 3, 1973. Plaintiff was ashamed when she went home and could not sleep and eat because of
the deception done against her by defendants -appellants (t.s.n., p. 35, Nov. 5, 1974).

The testimony of plaintiff was corroborated in toto by her uncle, Vivencio Bansagan who declared that on September
8, 1973 when plaintiff failed to arrive home at 9:00 o'clock in the evening, his sister who is the mother of plaintiff asked
him to look for her but his efforts proved futile, and he told his sister that plaintiff might have married (baka nag -asawa,
t.s.n., pp. 5-6, March 18, 1976). However, in the afternoon of the next day (Sunday), his sister told him that Francisco
Cabrera, accompanied by barrio captain Jacinto Manalili of Ligas, Bacoor, Cavite, informed her that plaintiff and
Bunag, Jr. were in Cabrera's house, so that her sister requested him to go and see the plaintiff, which he did, and at the
house of Mrs. Juana de Leon in Pamplona, Las Pias, Metro Manila he met defendant Conrado Bunag, Sr., who told
him, "Pare, the children are here already. Let us settle the matter and have them married."

He conferred with plaintiff who told him that as she had already lost her honor, she would bear her sufferings as Boy
Bunag, Jr. and his father promised they would be married.

Defendants-appellants, on the other hand, deny that defendant-appellant Conrado Bunag, Jr. abducted and raped
plaintiff-appellant on September 8, 1973. On the contrary, plaintiff-appellant and defendant-appellant Bunag, Jr. eloped
on that date because of the opposition of the latter's father to their relationship.

Defendant-appellants claim that defendant-appellant Bunag, Jr. and plaintiff-appellant had earlier made plans to elope
and get married, and this fact was known to their friends, among them, Architect Chito Rodriguez. The couple made
good their plans to elope on the afternoon of September 8, 1973, when defendant -appellant Bunag, Jr., accompanied
by his friend Guillermo Ramos, Jr., met plaintiff-appellant and her officemate named Lydia in the vicinity of the San
Juan de Dios Hospital. The foursome then proceeded to (the) aforesaid hospital's canteen where they had some snacks.
Later, Guillermo Ramos, Jr. took Lydia to Quirino Avenue where she could get a ride home, thereby leaving the
defendant-appellant Bunag, Jr. and plaintiff-appellant alone. According to defendant-appellant Bunag, Jr., after
Guillermo Ramos, Jr. and Lydia left, he and plaintiff-appellant took a taxi to the Golden Gate and Flamingo Hotels
where they tried to get a room, but these were full. They finally got a room at the Holiday Hotel, where defendant -
appellant registered using his real name and residence certificate numb er. Three hours later, the couple check out of the
hotel and proceeded to the house of Juana de Leon at Pamplona, Las Pias, where they stayed until September 19,
1873. Defendant-appellant claims that bitter disagreements with the plaintiff-appellant over money and the threats made
to his life prompted him to break off their plan to get married.

During this period, defendant-appellant Bunag, Sr. denied having gone to the house of Juan de Leon and telling
plaintiff-appellant that she would be wed to defendant-appellant Bunag, Jr. In fact, he phoned Atty. Conrado Adreneda,
member of the board of directors of Mandala Corporation, defendant -appellant Bunag, Jr.'s employer, three times
between the evening of September 8, 1973 and September 9, 1973 inquiring as to the whereabouts of his son. He came
to know about his son's whereabouts when he was told of the couple's elopement late in the afternoon of September 9,
1973 by his mother Candida Gawaran. He likewise denied having met relatives and emissaries of plaintiff-appellan t
and agreeing to her marriage to his son. 3

A complaint for damages for alleged breach of promise to marry was filed by herein private respondent Zenaida B. Cirilo again st
petitioner Conrado Bunag, Jr. and his father, Conrado Bunag, Sr., as Civil Case No. N-2028 of the Regional Trial Court, Branch XIX at
16
Bacoor, Cavite. On August 20, 1983, on a finding, inter alia, that petitioner had forcibly abducted and raped private respondent, the trial
court rendered a decision 4 ordering petitioner Bunag, Jr. to pay private respondent P80,000.00 as moral damages, P20,000.00 as
exemplary damages, P20,000.00 by way of temperate damages, and P10,000.00 for and as attorney's fees, as well as the costs of suit.
Defendant Conrado Bunag, Sr. was absolved from any and all liability.

Private respondent appealed that portion of the lower court's decision disculpating Conrado Bunag, Sr. from civil liability in this case.
On the other hand, the Bunags, as defendants -appellants, assigned in their appeal several errors allegedly committed by trial court, which
were summarized by respondent court as follows: (1) in finding that defendant -appellant Conrado Bunag, Jr. forcibly abducted and
raped plaintiff-appellant; (2) in finding that defendants -appellants promised plaintiff-appellant that she would be wed to defendant-
appellant Conrado Bunag, Jr.; and (3) in awarding plaintiff-appellant damages for the breach of defendants -appellants' promise of
marriage. 5

As stated at the outset, on May 17, 1991 respondent Court of Appeals rendered judgment dismissing both appeals and affirming in
toto the decision of the trial court. His motion for reconsideration having been denied, petitioner Bunag, Jr. is before us on a p etition for
review, contending that (1) respondent court failed to consider vital exhibits, testimonies and incidents for petitioner's defense, resulting
in the misapprehensions of facts and violative of the law on preparation of judgment; and (2) it erred in the application of the proper law
and jurisprudence by holding that there was forcible abduction with rape, not just a simple elopement and an agreement to marry, and
in the award of excessive damages. 6

Petitioner Bunag, Jr. first contends that both the trial and appellate courts failed to take into consideration th e alleged fact that he and
private respondent had agreed to marry, and that there was no case of forcible abduction with rape, but one of simple elopeme nt and
agreement to marry. It is averred that the agreement to marry has been sufficiently proven by the testimonies of the witnesses for both
parties and the exhibits presented in court.

This submission, therefore, clearly hinges on the credibility of the witnesses and evidence presented by the parties and the weight
accorded thereto in the factual findings of the trial court and the Court of Appeals. In effect, what petitioner would want this Court to
do is to evaluate and analyze anew the evidence, both testimonial and documentary, presented before and calibrated by the trial court,
and as further meticulously reviewed and discussed by respondent court.

The issue raised primarily and ineluctably involves questions of fact. We are, therefore, once again constrained to stress th e well-
entrenched statutory and jurisprudential mandate that findings of fact of t he Court of Appeals are, as a rule, conclusive upon this Court.
Only questions of law, distinctly set forth, may be raised in a petition for review on certiorari under Rule 45 of the Rules of Court,
subject to clearly settled exceptions in case law.

Our jurisdiction in cases brought to us from the Court of Appeals is limited to reviewing and revising the errors of law imputed to the
latter, its findings of fact being conclusive. This Court has emphatically declared that it is not its function to analyze or weigh such
evidence all over again, its jurisdiction being limited to reviewing errors of law that might have been committed by the lowe r court.
Barring, therefore, a showing that the findings complained of are totally devoid of support in the record, or t hat they are so glaringly
erroneous as to constitute serious abuse of discretion, such findings must stand, for this Court is not expected or required to examine or
contrast the oral and documentary evidence submitted by the parties. 7 Neither does the instant case reveal any feature falling within,
any of the exceptions which under our decisional rules may warrant a review of the factual findings of the Court of Appeals. On the
foregoing considerations and our review of the records, we sustain the holding of respondent court in favor of private respondent.

Petitioner likewise asserts that since action involves a breach of promise to marry, the trial court erred in awarding damage s.

It is true that in this jurisdiction, we adhere to the time-honored rule that an action for breach of promise to marry has no standing in the
civil law, apart from the right to recover money or property advanced by the plaintiff upon the faith of such promise. 8 Generally ,
therefore, a breach of promise to marry per se is not actionable, except where the plaintiff has actually incurred expenses for the wedding
and the necessary incidents thereof.

However, the award of moral damages is allowed in cases specified in or analogous to those provided in Article 2219 of the Civil Code.
Correlatively, under Article 21 of said Code, in relation to paragraph 10 of said Article 2219, any person who wilfully causes loss or
injury to another in a manner that is contrary to morals, good customs or public policy shall compensate the latter for mor al
damages. 9 Article 21 was adopted to remedy the countless gaps in the statutes which leave so many victims of moral wrongs helpless
even though they have actually suffered material and moral injury, and is intended to vouchsafe adequate legal remedy for that untold
number of moral wrongs which is impossible for human foresight to specifically provide for in the statutes. 10

17
Under the circumstances obtaining in the case at bar, the acts of petitioner in forcibly abducting private respondent and hav ing carnal
knowledge with her against her will, and thereafter promising to marry her in order to escape criminal liability, only to the reafter renege
on such promise after cohabiting with her for twenty-one days, irremissibly constitute acts contrary to morals and good customs. These
are grossly insensate and reprehensible transgressions which indisputably warrant and abundantly justify the award of moral a nd
exemplary damages, pursuant to Article 21 in relation to paragraphs 3 and 10, Article 2219, and Article 2229 and 2234 of Civil Code.

Petitioner would, however, belabor the fact that said damages were awarded by the trial court on the basis of a finding that he is guilty
of forcible abduction with rape, despite the prior dismissal of the complaint therefor filed by private respondent with the Pasay City
Fiscal's Office.

Generally, the basis of civil liability from crime is the fundamental postulate of our law that every person criminally liable for a felony
is also civilly liable. In other words, criminal liability will give rise to civil liability ex delicto only if the same felonious act or omission
results in damage or injury to another and is the direct and proximate cause thereof. 11 Hence, extinction of the penal action does not
carry with it the extinction of civil liability unless the extinction proceeds from a declaration in a final judgment that the fact from which
the civil might arise did not exist. 12

In the instant case, the dismissal of the complaint for forcible abduction with rape was by mere resolution of the fiscal at the preliminary
investigation stage. There is no declaration in a final judgment that the fact from which the civil case might arise did not exist .
Consequently, the dismissal did not in any way affect the right of herein privat e respondent to institute a civil action arising from the
offense because such preliminary dismissal of the penal action did not carry with it the extinction of the civil action.

The reason most often given for this holding is that the two proceedings invo lved are not between the same parties. Furthermore, it has
long been emphasized, with continuing validity up to now, that there are different rules as to the competency of witnesses an d the
quantum of evidence in criminal and civil proceedings. In a crimin al action, the State must prove its case by evidence which shows the
guilt of the accused beyond reasonable doubt, while in a civil action it is sufficient for the plaintiff to sustain his cause by preponderance
of evidence only. 13 Thus, in Rillon, et al. vs. Rillon, 14 we stressed that it is not now necessary that a criminal prosecution for rape be
first instituted and prosecuted to final judgment before a civil action based on said offense in favor of the offended woman can likewis e
be instituted and prosecuted to final judgment.

WHEREFORE, the petition is hereby DENIED for lack of merit, and the assailed judgment and resolution are hereby AFFIRMED.

SO ORDERED.

18
Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. L-21438 September 28, 1966

AIR FRANCE, petitioner,


vs.
RAFAEL CARRASCOSO and the HONORABLE COURT OF APPEALS, respondents.

Lichauco, Picazo and Agcaoili for petitioner.


Bengzon Villegas and Zarraga for respondent R. Carrascoso.

SANCHEZ, J.:

The Court of First Instance of Manila 1 sentenced petitioner to pay respondent Rafael Carrascoso P25,000.00 by way of moral damages;
P10,000.00 as exemplary damages; P393.20 representing the difference in fare between first class and tourist class for the po rtion of the trip
Bangkok-Rome, these various amounts with interest at the legal rate, from the date of the filing of the complaint until paid; plus P3,000.00 for
attorneys' fees; and the costs of suit.

On appeal,2 the Court of Appeals slightly reduced the amount of refund on Carrascoso's plane ticket from P393.20 to P383.10, and voted to
affirm the appealed decision "in all other respects", with costs against petitioner.

The case is now before us for review on certiorari.

The facts declared by the Court of Appeals as " fully supported by the evidence of record", are:

Plaintiff, a civil engineer, was a member of a group of 48 Filipino pilgrims that left Manila for Lourdes on March 30, 1958.

On March 28, 1958, the defendant, Air France, through its authorized agent, Philippine Air Lines, Inc., issued to plaintiff a "first
class" round trip airplane ticket from Manila to Rome. From Manila to Bangkok, plaintiff travelled in "first class", but at Bangkok,
the Manager of the defendant airline forced plaintiff to vacate the "first class" seat that he was occupying because, in the words of the
witness Ernesto G. Cuento, there was a "white man", who, the Manager alleged, had a "better right" to the seat. When asked to vacate
his "first class" seat, the plaintiff, as was to be expected, refused, and told defendant's Manager that his seat would be taken over his
dead body; a commotion ensued, and, according to said Ernesto G. Cuento, "many of the Filipino passengers got nervous in the tourist
class; when they found out that Mr. Carrascoso was having a hot discussion with the white man [manager], they came all across to
Mr. Carrascoso and pacified Mr. Carrascoso to give his seat to the white man" (Transcript, p. 12, Hearing of May 26, 1959); and
plaintiff reluctantly gave his "first class" seat in the plane. 3

1. The trust of the relief petitioner now seeks is that we review "all the findings" 4 of respondent Court of Appeals. Petitioner charges that
respondent court failed to make complete findings of fact on all the issues properly laid before it. We are asked to consider facts favorable to
petitioner, and then, to overturn the appellate court's decision.

Coming into focus is the constitutional mandate that "No decision shall be rendered by any court of record without expressing therein clearly
and distinctly the facts and the law on which it is based". 5 This is echoed in the statutory demand that a judgment determining the merits of the
case shall state "clearly and distinctly the facts and the law on which it is based"; 6 and that "Every decision of the Court of Appeals shall contain
complete findings of fact on all issues properly raised before it". 7

A decision with absolutely nothing to support it is a nullity. It is open to direct attack. 8 The law, however, solely insists that a decision state
the "essential ultimate facts" upon which the court's conclusion is drawn. 9 A court of justice is not hidebound to write in its decision every bit
and piece of evidence 10 presented by one party and the other upon the issues raised. Neither is it to be burdened with the obligation "to specify
in the sentence the facts" which a party "considered as proved". 11 This is but a part of the mental process from which the Court draws the
essential ultimate facts. A decision is not to be so clogged with details such that prolixity, if not confusion, may result. So long as the d ecision
of the Court of Appeals contains the necessary facts to warrant its conclusions, it is no error for said court to withhold therefrom "any specific
finding of facts with respect to the evidence for the defense". Because as this Court well observed, "There is no law that so requires". 12 Indeed,
"the mere failure to specify (in the decision) the contentions of the appellant and the reasons for refusing to believe them is not sufficient to
hold the same contrary to the requirements of the provisions of law and the Constitution". It is in this setting that in Manigque, it was held that
19
the mere fact that the findings "were based entirely on the evidence for the prosecution without taking into consideration or even mentioning
the appellant's side in the controversy as shown by his own testimony", would not vitiate the judgment. 13 If the court did not recite in the
decision the testimony of each witness for, or each item of evidence presented by, the defeated party, it does not mean that the court has
overlooked such testimony or such item of evidence. 14 At any rate, the legal presumptions are that official duty has been regularly performed,
and that all the matters within an issue in a case were laid before the court and passed upon by it. 15

Findings of fact, which the Court of Appeals is required to make, maybe defined as "the written statement of the ultimate fac ts as found by the
court ... and essential to support the decision and judgment rendered thereon". 16They consist of the court's "conclusions" with respect to the
determinative facts in issue". 17 A question of law, upon the other hand, has been declared as "one which does not call for an examination of
the probative value of the evidence presented by the parties." 18

2. By statute, "only questions of law may be raised" in an appeal by certiorari from a judgment of the Court of Appeals. 19 That judgment is
conclusive as to the facts. It is not appropriately the business of this Court to alter the facts or to review the questions of fact. 20

With these guideposts, we now face the problem of whether the findings of fact of the Court of Appeals support its judgment.

3. Was Carrascoso entitled to the first class seat he claims?

It is conceded in all quarters that on March 28, 1958 he paid to and received from petitioner a first class ticket. But petit ioner asserts that said
ticket did not represent the true and complete intent and agreement of the parties; that said respondent knew that he did not have confirmed
reservations for first class on any specific flight, although he had tourist class protection; that, accordingly, the issuance of a first class ticket
was no guarantee that he would have a first class ride, but that such would depend upon the availability of first class seats.

These are matters which petitioner has thoroughly presented and discussed in its brief before the Court of Appeals under its third assignment
of error, which reads: "The trial court erred in finding that plaintiff had confirmed reservations for, and a right to, first class s eats on the
"definite" segments of his journey, particularly that from Saigon to Beirut". 21

And, the Court of Appeals disposed of this contention thus:

Defendant seems to capitalize on the argument that the issuance of a first-class ticket was no guarantee that the passenger to whom
the same had been issued, would be accommodated in the first-class compartment, for as in the case of plaintiff he had yet to make
arrangements upon arrival at every station for the necessary first-class reservation. We are not impressed by such a reasoning. We
cannot understand how a reputable firm like defendant airplane company could have the indiscretion to give out tickets it never meant
to honor at all. It received the corresponding amount in payment of first-class tickets and yet it allowed the passenger to be at the
mercy of its employees. It is more in keeping with the ordinary course of business t hat the company should know whether or riot the
tickets it issues are to be honored or not.22

Not that the Court of Appeals is alone. The trial court similarly disposed of petitioner's contention, thus:

On the fact that plaintiff paid for, and was issued a "First class" ticket, there can be no question. Apart from his testimony, see plaintiff's Exhibits
"A", "A-1", "B", "B-1," "B-2", "C" and "C-1", and defendant's own witness, Rafael Altonaga, confirmed plaintiff's testimony and testified as
follows:

Q. In these tickets there are marks "O.K." From what you know, what does this OK mean?

A. That the space is confirmed.

Q. Confirmed for first class?

A. Yes, "first class". (Transcript, p. 169)

x xx x xx x xx

Defendant tried to prove by the testimony of its witnesses Luis Zaldariaga and Rafael Altonaga that although plaintiff paid for, and was issued
a "first class" airplane ticket, the ticket was subject to confirmation in Hongkong. The court cannot give credit to the testimony of said witnesses.
Oral evidence cannot prevail over written evidence, and plaintiff's Exhibits "A", "A -l", "B", "B-l", "C" and "C-1" belie the testimony of said
witnesses, and clearly show that the plaintiff was issued, and paid for, a first class ticket without any reservation whatever.

20
Furthermore, as hereinabove shown, defendant's own witness Rafael Altonaga testified that the reservation for a "first class" accommodation
for the plaintiff was confirmed. The court cannot believe that after such confirmation defendant had a verbal understanding with plaintiff that
the "first class" ticket issued to him by defendant would be subject to confirmation in Hongkong. 23

We have heretofore adverted to the fact that except for a slight difference of a few pesos in the amount refunded on Carrascoso's ticket, the
decision of the Court of First Instance was affirmed by the Court of Appeals in all other respects. We hold the view that such a judgment of
affirmance has merged the judgment of the lower court. 24Implicit in that affirmance is a determination by the Court of Appeals that the
proceeding in the Court of First Instance was free from prejudicial error and "all questions raised by the assignments of error and all questions
that might have been raised are to be regarded as finally adjudicated against the appellant". So also, the judgment affirmed "must be regarded
as free from all error". 25 We reached this policy construction because nothing in the decision of the Court of Appeals on this point would
suggest that its findings of fact are in any way at war with those of the trial court. Nor was said affirmance by the Court o f Appeals upon a
ground or grounds different from those which were made the basis of the conclusions of the trial court. 26

If, as petitioner underscores, a first-class-ticket holder is not entitled to a first class seat, notwithstanding the fact that seat availability in specific
flights is therein confirmed, then an air passenger is placed in the hollow of the hands of an airline. What security then can a passenger have?
It will always be an easy matter for an airline aided by its employees, to strike out the very stipulations in the ticket, an d say that there was a
verbal agreement to the contrary. What if the passenger had a schedule to fulfill? We have long learned that, as a rule, a written document
speaks a uniform language; that spoken word could be notoriously unreliable. If only to achieve stability in the relations be tween passenger
and air carrier, adherence to the ticket so issued is desirable. Such is the case here. The lower courts refused to believe the oral evidence intended
to defeat the covenants in the ticket.

The foregoing are the considerations which point to the conclusion that there are facts upon which the Court of Appeals predicated the finding
that respondent Carrascoso had a first class ticket and was entitled to a first class seat at Bangkok, which is a stopover in the Saigon to Beirut
leg of the flight. 27 We perceive no "welter of distortions by the Court of Appeals of petitioner's statement of its position", as charged by
petitioner. 28 Nor do we subscribe to petitioner's accusation that respondent Carrascoso "surreptitiously took a first class seat to provoke an
issue". 29 And this because, as petitioner states, Carrascoso went to see the Manager at his office in Bangkok "to confirm my seat and because
from Saigon I was told again to see the Manager". 30 Why, then, was he allowed to take a first class seat in the plane at Bangkok, if he had no
seat? Or, if another had a better right to the seat?

4. Petitioner assails respondent court's award of moral damages. Petitioner's trenchant claim is that Carrascoso's action is planted upon breach
of contract; that to authorize an award for moral damages there must be an averment of fraud or bad faith; 31 and that the decision of the Court
of Appeals fails to make a finding of bad faith. The pivotal allegations in the complaint bearing on this issue are:

3. That ... plaintiff entered into a contract of air carriage with the Philippine Air Lines for a valuable consideration, the latter acting
as general agents for and in behalf of the defendant, under which said contract, plaintiff was entitled to, as defendant agre ed to furnish
plaintiff, First Class passage on defendant's plane during the entire duration of plaintiff's tour of Europe with Hongkong as starting
point up to and until plaintiff's return trip to Manila, ... .

4. That, during the first two legs of the trip from Hongkong to Saigon and from Saigon to Bangkok, defendant furnished to the plaintiff
First Class accommodation but only after protestations, arguments and/or insistence were made by the plaintiff with defendant's
employees.

5. That finally, defendant failed to provide First Class passage, but instead furnished plaintiff only Tourist Class accommodations
from Bangkok to Teheran and/or Casablanca, ... the plaintiff has been compelled by defendant's employees to leave the First Class
accommodation berths at Bangkok after he was already seated.

6. That consequently, the plaintiff, desiring no repetition of the inconvenience and embarrassments brought by defendant's breach of
contract was forced to take a Pan American World Airways plane on his return trip from Madrid to Manila. 32

x xx x xx x xx

2. That likewise, as a result of defendant's failure to furnish First Class accommodations aforesaid, plaintiff suffered inco nveniences,
embarrassments, and humiliations, thereby causing plaintiff mental anguish, serious anxiety, wounded feelings, social humiliation, and the like
injury, resulting in moral damages in the amount of P30,000.00. 33

x xx x xx x xx

The foregoing, in our opinion, substantially aver: First, That there was a contract to furnish plaintiff a first class passage covering, amongst
others, the Bangkok-Teheran leg; Second, That said contract was breached when petitioner failed to furnish first class transportation at Bangkok;
and Third, that there was bad faith when petitioner's employee compelled Carrascoso to leave his first class accommodation berth "after he was
21
already, seated" and to take a seat in the tourist class, by reason of which he suffered inconvenience, embarrassments and humiliations, thereby
causing him mental anguish, serious anxiety, wounded feelings and social humiliation, resulting in moral damages. It is true that there is no
specific mention of the term bad faith in the complaint. But, the inference of bad faith is there, it may be drawn from the facts and circumstances
set forth therein. 34 The contract was averred to establish the relation between the parties. But the stress of the action is put on wrongful
expulsion.

Quite apart from the foregoing is that (a) right the start of the trial, respondent's counsel placed petitioner o n guard on what Carrascoso intended
to prove: That while sitting in the plane in Bangkok, Carrascoso was ousted by petitioner's manager who gave his seat to a white man; 35 and
(b) evidence of bad faith in the fulfillment of the contract was presented with out objection on the part of the petitioner. It is, therefore,
unnecessary to inquire as to whether or not there is sufficient averment in the complaint to justify an award for moral damag es. Deficiency in
the complaint, if any, was cured by the evidence. An amendment thereof to conform to the evidence is not even required. 36 On the question of
bad faith, the Court of Appeals declared:

That the plaintiff was forced out of his seat in the first class compartment of the plane belonging to the defendant Air France while at
Bangkok, and was transferred to the tourist class not only without his consent but against his will, has been sufficiently es tablished
by plaintiff in his testimony before the court, corroborated by the corresponding entry made by the purser of the plane in his notebook
which notation reads as follows:

"First-class passenger was forced to go to the tourist class against his will, and that the captain refused to intervene",

and by the testimony of an eye-witness, Ernesto G. Cuento, who was a co-passenger. The captain of the plane who was asked by the
manager of defendant company at Bangkok to intervene even refused to do so. It is noteworthy that no one on behalf of defendant
ever contradicted or denied this evidence for the plaintiff. It could have been easy for defendant to present its manager at Bangkok to
testify at the trial of the case, or yet to secure his disposition; but defendant did neither. 37

The Court of appeals further stated

Neither is there evidence as to whether or not a prior reservation was made by the white man. Hence, if the employees of the defendant
at Bangkok sold a first-class ticket to him when all the seats had already been taken, surely the plaintiff should not have been picked
out as the one to suffer the consequences and to be subjected to the humiliation and indignity of being ejected from his seat in the
presence of others. Instead of explaining to the white man the improvidence committed by defendant's employees, the manager
adopted the more drastic step of ousting the plaintiff who was then safely ensconsced in his rightful seat. We are strengthened in our
belief that this probably was what happened there, by the testimony of defendant's witness Rafael Altonaga who, when asked to
explain the meaning of the letters "O.K." appearing on the tickets of plaintiff, said "that the space is confirmed for first class. Likewise,
Zenaida Faustino, another witness for defendant, who was the chief of the Reservation Office of defendant, testified as follo ws:

"Q How does the person in the ticket-issuing office know what reservation the passenger has arranged with you?

A They call us up by phone and ask for the confirmation." (t.s.n., p. 247, June 19, 1959)

In this connection, we quote with approval what the trial Judge has said on this point:

Why did the, using the words of witness Ernesto G. Cuento, "white man" have a "better right" to the seat occupied by Mr.
Carrascoso? The record is silent. The defendant airline did not prove "any better", nay, any right on the part of t he "white
man" to the "First class" seat that the plaintiff was occupying and for which he paid and was issued a corresponding "first
class" ticket.

If there was a justified reason for the action of the defendant's Manager in Bangkok, the defendant could h ave easily proven
it by having taken the testimony of the said Manager by deposition, but defendant did not do so; the presumption is that
evidence willfully suppressed would be adverse if produced [Sec. 69, par (e), Rules of Court]; and, under the circumstances,
the Court is constrained to find, as it does find, that the Manager of the defendant airline in Bangkok not merely asked but
threatened the plaintiff to throw him out of the plane if he did not give up his "first class" seat because the said Manager
wanted to accommodate, using the words of the witness Ernesto G. Cuento, the "white man". 38

It is really correct to say that the Court of Appeals in the quoted portion first transcribed did not use the term "bad faith ". But can it
be doubted that the recital of facts therein points to bad faith? The manager not only prevented Carrascoso from enjoying his right to
a first class seat; worse, he imposed his arbitrary will; he forcibly ejected him from his seat, made him suffer the humiliat ion of having
to go to the tourist class compartment - just to give way to another passenger whose right thereto has not been established. Certainly,
this is bad faith. Unless, of course, bad faith has assumed a meaning different from what is understood in law. For, "bad faith"

22
contemplates a "state of mind affirmatively operating with furtive design or with some motive of self-interest or will or for ulterior
purpose." 39

And if the foregoing were not yet sufficient, there is the express finding of bad faith in the judgment of the Court of First Instance,
thus:

The evidence shows that the defendant violated its contract of transportation with plaintiff in bad faith, with the aggravating
circumstances that defendant's Manager in Bangkok went to the extent of threatening the plaintiff in the presence of many
passengers to have him thrown out of the airplane to give the "first class" seat that he was occupying to, again using the
words of the witness Ernesto G. Cuento, a "white man" whom he (defendant's Manager) wished to accommo date, and the
defendant has not proven that this "white man" had any "better right" to occupy the "first class" seat that the plaintiff was
occupying, duly paid for, and for which the corresponding "first class" ticket was issued by the defendant to him. 40

41
5. The responsibility of an employer for the tortious act of its employees need not be essayed. It is well settled in law. For the willful
malevolent act of petitioner's manager, petitioner, his employer, must answer. Article 21 of the Civil Code says:

ART. 21. Any person who willfully causes loss or injury to another in a manner that is contrary to morals, good customs or pu blic
policy shall compensate the latter for the damage.

In parallel circumstances, we applied the foregoing legal precept; and, we held that upon the provisions of Article 2219 (10), Civil Code, moral
damages are recoverable. 42

6. A contract to transport passengers is quite different in kind and degree from any other contractual relation. 43And this, because of the relation
which an air-carrier sustains with the public. Its business is mainly with the travelling public. It invites people to avail of the comforts and
advantages it offers. The contract of air carriage, therefore, generates a relation attended with a public duty. Neglec t or malfeasance of the
carrier's employees, naturally, could give ground for an action for damages.

Passengers do not contract merely for transportation. They have a right to be treated by the carrier's employees with kindness, respect, courtesy
and due consideration. They are entitled to be protected against personal misconduct, injurious language, indignities and abuses from such
employees. So it is, that any rule or discourteous conduct on the part of employees towards a passenger gives the latter an a ction for damages
against the carrier. 44

Thus, "Where a steamship company 45 had accepted a passenger's check, it was a breach of contract and a tort, giving a right of action for its
agent in the presence of third persons to falsely notify her that the ch eck was worthless and demand payment under threat of ejection, though
the language used was not insulting and she was not ejected." 46 And this, because, although the relation of passenger and carrier is "contractual
both in origin and nature" nevertheless "the act that breaks the contract may be also a tort". 47 And in another case, "Where a passenger on a
railroad train, when the conductor came to collect his fare tendered him the cash fare to a point where the train was scheduled not to stop, and
told him that as soon as the train reached such point he would pay the cash fare from that point to destination, there was nothing in the conduct
of the passenger which justified the conductor in using insulting language to him, as by calling him a lunatic," 48 and the Supreme Court of
South Carolina there held the carrier liable for the mental suffering of said passenger.1awphl.nt

Petitioner's contract with Carrascoso is one attended with public duty. The stress of Carrascoso's action as we have said, is placed upon his
wrongful expulsion. This is a violation of public duty by the petitioner air carrier a case of quasi-delict. Damages are proper.

7. Petitioner draws our attention to respondent Carrascoso's testimony, thus

Q You mentioned about an attendant. Who is that attendant and purser?

A When we left already that was already in the trip I could not help it. So one of the flight attendants approached me and
requested from me my ticket and I said, What for? and she said, "We will note that y ou transferred to the tourist class". I said,
"Nothing of that kind. That is tantamount to accepting my transfer." And I also said, "You are not going to note anything the re
because I am protesting to this transfer".

Q Was she able to note it?

A No, because I did not give my ticket.

Q About that purser?

23
A Well, the seats there are so close that you feel uncomfortable and you don't have enough leg room, I stood up and I went to the
pantry that was next to me and the purser was there. He told me, "I have reco rded the incident in my notebook." He read it and
translated it to me because it was recorded in French "First class passenger was forced to go to the tourist class against his
will, and that the captain refused to intervene."

Mr. VALTE

I move to strike out the last part of the testimony of the witness because the best evidence would be the notes. Your Honor.

COURT

I will allow that as part of his testimony. 49

Petitioner charges that the finding of the Court of Appeals that the purser made an entry in his notebook reading "First class passenger was
forced to go to the tourist class against his will, and that the captain refused to intervene" is predicated upon evidence [Carrascoso's testimony
above] which is incompetent. We do not think so. The subject of inquiry is not the entry, but the ouster incident. Testimony on the entry does
not come within the proscription of the best evidence rule. Such testimony is admissible. 49a

Besides, from a reading of the transcript just quoted, when the dialogue happened, the impact of the startling occurrence was still fresh and
continued to be felt. The excitement had not as yet died down. Statements then, in this environment, are admissible as part o f the res
gestae. 50 For, they grow "out of the nervous excitement and mental and physical condition of the declarant". 51 The utterance of the purser
regarding his entry in the notebook was spontaneous, and related to the circumstances of the ouster incident. Its trustworthiness has been
guaranteed. 52 It thus escapes the operation of the hearsay rule. It forms part of the res gestae.

At all events, the entry was made outside the Philippines. And, by an employee of petitioner. It would have been an easy matt er for petitioner
to have contradicted Carrascoso's testimony. If it were really true that no such entry was made, the deposition of the purser could have cleared
up the matter.

We, therefore, hold that the transcribed testimony of Carrascoso is admissible in evidence.

8. Exemplary damages are well awarded. The Civil Code gives the court ample power to grant exemplary damages in contracts and quasi-
contracts. The only condition is that defendant should have "acted in a wanton, fraudulent, reckless, oppressive, or malevole nt manner." 53 The
manner of ejectment of respondent Carrascoso from his first class seat fits into this legal precept. And this, in addition to moral damages. 54

9. The right to attorney's fees is fully established. The grant of exemplary damages justifies a similar judgment for attorne ys' fees. The least
that can be said is that the courts below felt that it is but just and equitable that attorneys' fees be given. 55 We do not intend to break faith with
the tradition that discretion well exercised as it was here should not be disturbed.

10. Questioned as excessive are the amounts decreed by both the trial court and the Court of Appeals, thus: P25,000.00 as moral damages;
P10,000.00, by way of exemplary damages, and P3,000.00 as attorneys' fees. The task of fixing these amounts is primarily with the trial
court. 56 The Court of Appeals did not interfere with the same. The dictates of good sense suggest that we give our imprimatur thereto. Because,
the facts and circumstances point to the reasonableness thereof. 57

On balance, we say that the judgment of the Court of Appeals does not suffer from reversible error. We accordingly vote to affirm the same.
Costs against petitioner. So ordered.

24
Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. L-24837 June 27, 1968

JULIAN C. SINGSON and RAMONA DEL CASTILLO, plaintiffs,


vs.
BANK OF THE PHILIPPINE ISLANDS and SANTIAGO FREIXAS, in his capacity as President of the said Bank, defendants.

Gil B. Galang for plaintiffs.


Aviado and Aranda for defendants.

CONCEPCION, C.J.:

Appeal by plaintiffs, Julian Singson and his wife, Ramona del Castillo, from a decision of the Court of First Instance of Manila
dismissing their complaint against defendants herein, the Bank of the Philippine Islands and Santiago Freixas.

It appears that Singson, was one of the defendants in civil case No. 23906 of the Court of First Instance, Manila, in which judgment had
been rendered sentencing him and his co-defendants therein, namely, Celso Lobregat and Villa-Abrille & Co., to pay the sum of
P105,539.56 to the plaintiff therein, Philippine Milling Co. Singson and Lobregat had seasonably appealed from said judgment, but not
Villa-Abrille & Co., as against which said judgment, accordingly, became final and executory. In due course, a writ of garnishment was
subsequently served upon the Bank of the Philippine Islands in which the Singsons had a current account insofar as Villa-Abrille's
credits against the Bank were concerned. What happened thereafter is set forth in the decision appealed from, from which we q uote:

Upon receipt of the said Writ of Garnishment, a clerk of the bank in charge of all matters of execution and garnishment, upon
reading the name of the plaintiff herein in the title of the Writ of Garnishment as a party defendants, without further reading
the body of the said garnishment and informing himself that said garnishment was merely intended for the deposits of defendant
Villa-Abrille & Co., Valentin Teus, Fernando F. de Villa-Abrille and Joaquin Bona, prepared a letter for the signature of the
President of the Bank informing the plaintiff Julian C. Singson of the garnishment of his deposits by the plaintiff in that ca se.
Another letter was also prepared and signed by the said President of the Bank for the Special Sheriff dated April 17, 1963.

Subsequently, two checks issued by the plaintiff Julian C. Singson, one for the amount of P383 in favor of B. M. Glass Service
dated April 16, 1963 and bearing No. C-424852, and check No. C-394996 for the amount of P100 in favor of the Lega
Corporation, and drawn against the said Bank, were deposited by the said drawers with the said bank. Believing that the plaintiff
Singson, the drawer of the check, had no more control over the balance of his deposits in the said bank, the checks were
dishonored and were refused payment by the said bank. After the first check was returned by the bank to the B. M. Glass
Service, the latter wrote plaintiff Julian C. Singson a letter, dated April 19, 1963, advising him that his check for P383.00
bearing No. C-424852 was not honored by the bank for the reason that his account therein had already been garnished. The
said B. M. Glass Service further stated in the said letter that they were constrained to close his credit account with them. In
view thereof, plaintiff Julian C. Singson wrote the defendant bank a letter on April 19, 1963, claiming that his name was not
included in the Writ of Execution and Notice of Garnishment, which was served upon the bank. The defendant President
Santiago Freixas of the said bank took steps to verify this information and after having confirmed the same, apologized to the
plaintiff Julian C. Singson and wrote him a letter dated April 22, 1963, requesting him to disregard their letter of April 17,
1963, and that the action of garnishment from his account had already been removed. A similar letter was written by the said
official of the bank on April 22, 1963 to the Special Sheriff informing him that his letter dated April 17, 1963 to the said Special
Sheriff was considered cancelled and that they had already removed the Notice of Garnishment from plaintiff Singson's account.
Thus, the defendants lost no time to rectify the mistake that had been inadvertently committed, resulting in the temporary
freezing of the account of the plaintiff with the said bank for a short time.

xxx xxx xxx

On May 8, 1963, the Singsong commenced the present action against the Bank and its president, Santiago Freixas, for damages 1 in
consequence of said illegal freezing of plaintiffs' account.1wph1.t

25
After appropriate proceedings, the Court of First Instance of Manila rendered judgment dismissing the complaint upon the grou nd that
plaintiffs cannot recover from the defendants upon the basis of a quasi-delict, because the relation between the parties is contractual in
nature; because this case does not fall under Article 2219 of our Civil Code, upon which plaintiffs rely; and because plaintiffs have not
established the amount of damages allegedly sustained by them.

The lower court held that plaintiffs' claim for damages cannot be based upon a tort or quasi-delict, their relation with the defendants
being contractual in nature. We have repeatedly held, however, that the existence of a contract between the parties does not bar the
commission of a tort by the one against the order and the consequent recovery of damages therefor. 2 Indeed, this view has been, in effect,
reiterated in a comparatively recent case. Thus, in Air France vs. Carrascoso,3 involving an airplane passenger who, despite his first-
class ticket, had been illegally ousted from his first-class accommodation and compelled to take a seat in the tourist compartment, was
held entitled to recover damages from the air-carrier, upon the ground of tort on the latter's part, for, although the relation between a
passenger and a carrier is "contractual both in origin and nature ... the act that breaks the contract may also be a tort".

In view, however, of the facts obtaining in the case at bar, and considering, particularly, the circumstance, that the wr ong done to the
plaintiff was remedied as soon as the President of the bank realized the mistake he and his subordinate employee had committe d, the
Court finds that an award of nominal damages the amount of which need not be proven 4 in the sum of P1,000, in addition to
attorney's fees in the sum of P500, would suffice to vindicate plaintiff's rights. 5

WHEREFORE, the judgment appealed from is hereby reversed, and another one shall be entered sentencing the defendant Bank of t he
Philippine Islands to pay to the plaintiffs said sums of P1,000, as nominal damages, and P500, as attorney's fees, apart from the costs. It
is so ordered.

Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Sanchez, Castro and Angeles, JJ., concur.
Fernando, J., took no part.

26
Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. L-24190 July 13, 1926

GEORGE L. PARKS, plaintiff-appellant,


vs.
PROVINCE OF TARLAC, MUNICIPALITY OF TARLAC, CONCEPCION CIRER, and JAMES HILL, her
husband, defendants-appellees.

Jos. N. Wolfson for appellant.


Provincial Fiscal Lopez de Jesus for the Province and Municipality of Tarlac.
No appearance for the other appellees.

AVANCEA, C. J.:

On October 18, 1910, Concepcion Cirer and James Hill, the owners of parcel of land No. 2 referred to in the complaint, donated it
perpetually to the municipality of Tarlac, Province of Tarlac, under certain conditions specified in the public document in w hich they
made this donation. The donation was accepted by Mr. Santiago de Jesus in the s ame document on behalf of the municipal council of
Tarlac of which he was the municipal president. The parcel thus donated was later registered in the name of the donee, the mu nicipalit y
of Tarlac. On January 15, 1921, Concepcion Cirer and James Hill sold this parcel to the herein plaintiff George L. Parks. On August 24,
1923, the municipality of Tarlac transferred the parcel to the Province of Tarlac which, by reason of this transfer, applied for and obtained
the registration thereof in its name, the corresponding certificate of title having been issued to it.

The plaintiff, George L. Parks, alleging that the conditions of the donation had not been complied with and invoking the sale of this
parcel of land made by Concepcion Cirer and James Hill in his favo r, brought this action against the Province of Tarlac, the municipalit y
of Tarlac, Concepcion Cirer and James Hill and prayed that he be declared the absolute owner entitled to the possession of th is parcel,
that the transfer of the same by the municipality of Tarlac to the Province of Tarlac be annulled, and the transfer certificate issued to the
Province of Tarlac cancelled.

The lower court dismissed the complaint.

The plaintiff has no right of action. If he has any, it is only by virtue of the sale of this parcel made by Concepcion Cirer and James Hill
in his favor on January 15, 1921, but that sale cannot have any effect. This parcel having been donated by Concepcion Cirer a nd James
Hill to the municipality of Tarlac, which donation was accepted by the latter, the title to the property was transferred to the municipalit y
of Tarlac. It is true that the donation might have been revoked for the causes, if any, provided by the law, but the fact is that it was not
revoked when Concepcion Cirer and James Hill made the sale of this parcel to the plaintiff. Even supposing that causes existed for the
revocation of this donation, still, it was necessary, in order to consider it revoked, either that the revocation had been co nsented to by
the donee, the municipality of Tarlac, or that it had been judicially decreed. None of these circumstances existed when Concepcion Cirer
and James Hill sold this parcel to the plaintiff. Consequently, when the sale was made Concepcion Cirer and James Hill were n o longer
the owners of this parcel and could not have sold it to the plaintiff, nor could the latter have acquired it from them.

But the appellant contends that a condition precedent having been imposed in the donation and the same not having been compli ed with,
the donation never became effective. We find no merit in this contention. The appellant refers to the condition imposed that one of the
parcels donated was to be used absolutely and exclusively for the erection of a central school and the other for a public par k, the work
to commence in both cases within the period of six months from the date of the ratification by the partes of the document evidencing
the donation. It is true that this condition has not been complied with. The allegation, however, that it is a conditio n precedent is
erroneous. The characteristic of a condition precedent is that the acquisition of the right is not effected while said condit ion is not
complied with or is not deemed complied with. Meanwhile nothing is acquired and there is only an expectan cy of right. Consequently,
when a condition is imposed, the compliance of which cannot be effected except when the right is deemed acquired, such condit ion
cannot be a condition precedent. In the present case the condition that a public school be erected a nd a public park made of the donated
land, work on the same to commence within six months from the date of the ratification of the donation by the parties, could not be
complied with except after giving effect to the donation. The donee could not do any wo rk on the donated land if the donation had not
really been effected, because it would be an invasion of another's title, for the land would have continued to belong to the donor so long
as the condition imposed was not complied with.
27
The appellant also contends that, in any event, the condition not having been complied with, even supposing that it was not a condition
precedent but subsequent, the non-compliance thereof is sufficient cause for the revocation of the donation. This is correct. But the
period for bringing an action for the revocation of the donation has prescribed. That this action is prescriptible, there is no doubt . There
is no legal provision which excludes this class of action from the statute of limitations. And not only this, the law itself recognizes
the prescriptibility of the action for the revocation of a donation, providing a special period of five years for the revocat ion by the
subsequent birth of children (art. 646, Civil Code), and one year for the revocation by reason of ingratitude. If no special period is
provided for the prescription of the action for revocation for noncompliance of the conditions of the donation (art. 647, Civ il Code), it
is because in this respect the donation is considered onerous and is governed by the law of contracts and the general rules of prescription.
Under the law in force (sec. 43, Code of Civ. Proc.) the period of prescription of this class of action is ten years. The act ion for the
revocation of the donation for this cause arose on April 19, 1911, that is six months after the ratification of the instrument of donation
of October 18, 1910. The complaint in this action was presented July 5, 1924, more than ten years after this cause accrued.

By virtue of the foregoing, the judgment appealed from is affirmed, with the costs against the appellant. So ordered.

Street, Villamor, Ostrand, Johns, Romualdez and Villa-Real, JJ., concur.

28
Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. L-16109 October 2, 1922

M. D. TAYLOR, plaintiff-appellant,
vs.
UY TIENG PIAO and TAN LIUAN, doing business under the firm name and style of Tan Liuan & Company, defendants.
Uy TIENG PIAO, defendant-appellant.

Cohn, Fisher and DeWitt and William C. Brady for plaintiff-appellant.


Gabriel La O for defendant-appellant Uy Tieng Piao.
Crossfield and O'Brien for Tan Liuan and Tan Liyan and Co.

STREET, J.:

This case comes by appeal from the Court of First Instance of the city of Manila, in a case where the court awarded to the plaintiff the
sum of P300, as damages for breach of contract. The plaintiff appeals on the ground that the amount of damages awarded is ina dequate;
while the defendant Uy Tieng Piao appeals on the ground that he is not liable at all. The judgment having been heretof ore affirmed by
us in a brief opinion, we now avail ourselves of the occasion of the filing of a motion to rehear by the attorneys for the plaintiff to modify
the judgment in a slight measure and to state more fully the reasons underlying our decision.

It appears that on December 12, 1918, the plaintiff contracted his services to Tan Liuan and Co., as superintendent of an oil fa ctory
which the latter contemplated establishing in this city. The period of the contract extended over two years from the date men tioned; and
the salary was to be at the rate of P600 per month during the first year and P700 per month during the second, with electric light and
water for domestic consumption, and a residence to live in, or in lieu thereof P60 per month.

At the time this agreement was made the machinery for the contemplated factory had not been acquired, though ten expellers had been
ordered from the United States; and among the stipulations inserted in the contract with the plaintiff was a provision to the following
effect:

It is understood and agreed that should the machinery to be installed in the said factory fail, for any reason, to arrive in the city
of Manila within a period of six months from date hereof, this contract may be cancelled by the party of the second p art at its
option, such cancellation, however, not to occur before the expiration of such six months.

The machinery above referred to did not arrive in the city of Manila within the six months succeeding the making of the contr act; nor
was other equipment necessary for the establishment of the factory at any time provided by the defendants. The reason for this does not
appear with certainty, but a preponderance of the evidence is to the effect that the defendants, in the first months of 1919, seeing that
the oil business no longer promised large returns, either cancelled the order for the machinery from choice or were unable to s upply the
capital necessary to finance the project. At any rate on June 28, 1919, availing themselves in part of the option given in the clause above
quoted, the defendants communicated in writing to the plaintiff the fact that they had decided to rescind the contract, effec tive June 30th
then current, upon which date he was discharged. The plaintiff thereupon instituted this action t o recover damages in the amount of
P13,000, covering salary and perquisites due and to become due under the contract.

The case for the plaintiff proceeds on the idea that the stipulation above quoted, giving to the defendants the right to canc el the contract
upon the contingency of the nonarrival of the machinery in Manila within six months, must be understood as applicable only in those
cases where such nonarrival is due to causes not having their origin in the will or act of the defendants, as delays caus ed by strikes or
unfavorable conditions of transporting by land or sea; and it is urged that the right to cancel cannot be admitted unless the defendants
affirmatively show that the failure of the machinery to arrive was due to causes of that character, an d that it did not have its origin in
their own act or volition. In this connection the plaintiff relies on article 1256 of the Civil Code, which is to the effect that the validity
and fulfillment of contracts cannot be left to the will of one of the contracting parties, and to article 1119, which says that a condition
shall be deemed fulfilled if the obligor intentially impedes its fulfillment.

29
It will be noted that the language conferring the right of cancellation upon the defendants is broad enough to cov er any case of the
nonarrival of the machinery, due to whatever cause; and the stress in the expression "for any reason" should evidently fall u pon the word
"any." It must follow of necessity that the defendants had the right to cancel the contract in the contingency that occurred, unless some
clear and sufficient reason can be adduced for limiting the operation of the words conferring the right of cancellation. Upon this point it
is our opinion that the language used in the stipulation should be given effe ct in its ordinary sense, without technicality or circumvention;
and in this sense it is believed that the parties to the contract must have understood it.

Article 1256 of the Civil Code in our opinion creates no impediment to the insertion in a contract for personal service of a resolutory
condition permitting the cancellation of the contract by one of the parties. Such a stipulation, as can be readily seen, does not make
either the validity or the fulfillment of the contract dependent upon the will of the party to whom is conceded the privilege of cancellation;
for where the contracting parties have agreed that such option shall exist, the exercise of the option is as much in the fulf illment of the
contract as any other act which may have been the subject of agreement. Indeed, the cancellation of a contract in accordance with
conditions agreed upon beforehands is fulfillment.

In this connection, we note that the commentator Manresa has the following observation with respect to article 1256 of the Civil Code.
Says he: "It is entirely licit to leave fulfillment to the will of either of the parties in the negative form of rescission, a case frequent in
certain contracts (the letting of service for hire, the supplying of electrical energy, etc.), for in such sup posed case neither is the article
infringed, nor is there any lack of equality between the persons contracting, since they remain with the same faculties in re spect to
fulfillment." (Manresa, 2d ed., vol. 8, p. 610.) 1awph!l.net

Undoubtedly one of the cons equences of this stipulation was that the employers were left in a position where they could dominate the
contingency, and the result was about the same as if they had been given an unqualified option to dispense with the services of the
plaintiff at the end of six months. But this circumstance does not make the stipulation illegal.

The case of Hall vs. Hardaker (61 Fla., 267) cited by the appellant Taylor, though superficially somewhat analogous, is not p recisely in
point. In that case one Hardaker had contracted to render competent and efficient service as manager of a corporation, to which position
it was understood he was to be appointed. In the same contract it was stipulated that if "for any reason" Hardaker should not be given
that position, or if he should not be permitted to act in that capacity for a stated period, certain things would be done by Hall. Upon
being installed in the position aforesaid, Hardaker failed to render efficient service and was discharged. It was held that Hall was released
from the obligation to do the things that he had agreed to perform. Some of the judges appear to have thought that the case tur ned on
the meaning of the phrase "for any reason," and the familiar maxim was cited that no man shall take advantage of his own wro ng. The
result of the case must have been the same from whatever point of view, as there was an admitted failure on the part of Harda ker to
render competent service. In the present case there was no breach of contract by the defendants; and the argument to the contrary
apparently suffers from the logical defect of assuming the very point at issue.

But it will be said that the question is not so much one concerning the legality of the clause referred to as one concerning the interpretation
of the resolutory clause as written, the idea being that the court should adjust its interpretation of said clause to the supposed precepts
of article 1256, by restricting its operation exclusively to cases where the nonarrival of the machinery may be due to extran eous causes
not referable to the will or act of the defendants. But even when the question is viewed in this aspect their result is the s ame, because
the argument for the restrictive interpretation evidently proceeds on the assumption that the clause in question is illegal in so far as it
purports to concede to the defendants the broad right to cancel the contract upon nonarrival of the machinery due to any cause; and the
debate returns again to the point whether in a contract for the prestation of service it is lawful for the parties to insert a provision giving
to the employer the power to cancel the contract in a contingency which may be dominated by himself. Upon this point what has already
been said must suffice.

As we view the case, there is nothing in article 1256 which makes it necessary for us to warp the language used by the parties from its
natural meaning and thereby in legal effect to restrict the words "for any reason," as used in the contract, to mean "for any reason not
having its origin in the will or acts of the defendants." To impose this interpretation upon those words would in our opinion constitute
an unjustifiable invasion of the power of the parties to establish the terms which they deem advisable, a right which is expr essed in
article 1255 of the Civil Code and constitutes one of the most fundamental conceptions of contract right enshrined in the Code.

The view already expressed with regard to the legality and interpretation of the clause under consideration disposes in a gre at measure
of the argument of the appellant in so far as the same is based on article 1119 of the Civil Code. This provision supposes a case wher e
the obligor intentionally impedes the fulfillment of a condition which would entitle the obligee to exact performance from th e obligor;
and an assumption underlying the provision is that the obligor prevents the obligee from performing some act which the oblige e is
entitled to perform as a condition precedent to the exaction of what is due to him. Such an act must be considered unwa rranted and
unlawful, involving per se a breach of the implied terms of the contract. The article can have no application to an external contingency
which, like that involved in this case, is lawfully within the control of the obligor.

30
In Spanish jurisprudence a condition like that here under discussion is designated by Manresa a facultative condition (vol. 8, p. 611),
and we gather from his comment on articles 1115 and 1119 of the Civil Code that a condition, facultative as to the debtor, is obnoxious
to the first sentence contained in article 1115 and renders the whole obligation void (vol. 8, p. 131). That statement is no doub t correct
in the sense intended by the learned author, but it must be remembered that he evidently has in mind the suspensive condition, such as
is contemplated in article 1115. Said article can have no application to the resolutory condition, the validity of which is r ecognized in
article 1113 of the Civil Code. In other words, a condition at once facultative and resolutory may be va lid even though the condition is
made to depend upon the will of the obligor.

If it were apparent, or could be demonstrated, that the defendants were under a positive obligation to cause the machinery to arrive in
Manila, they would of course be liable, in the absence of affirmative proof showing that the nonarrival of the machinery was due to
some cause not having its origin in their own act or will. The contract, however, expresses no such positive obligation, and its existence
cannot be implied in the fact of stipulation, defining the conditions under which the defendants can cancel the contract.

Our conclusion is that the Court of First Instance committed no error in rejecting the plaintiff's claim in so far as damages are sought for
the period subsequent to the expiration of the first six months, but in assessing the damages due for the six-month period, the trial judge
evidently overlooked the item of P60, specified in the plaintiff's fourth assignment of error, which represents commutation o f house rent
for the month of June, 1919. This amount the plaintiff is clearly entitled to recover, in addition to the P300 awarded in the court below.

We note that Uy Tieng Piao, who is sued as a partner with Tan Liuan, appealed from the judgment holding him liable as a member of
the firm of Tan Liuan and Co.; and it is insisted in his behalf that he was not bound by the act of Tan Liuan as manager of T an Liuan
and Co. in employing the plaintiff. Upon this we will merely say that the conclusion stated by the trial court in the next to the last
paragraph of the decision with respect to the liability of this appellant in our opinion in conformity with the law and facts .

The judgment appealed from will be modified by declaring that the defendants shall pay to th e plaintiff the sum of P360, instead of
P300, as allowed by the lower court, and as thus modified the judgment will be affirmed with interest from November 4, 1919, as
provided in section 510 of the Code of Civil Procedure, and with costs. So ordered.

Araullo, C.J., Johnson, Malcolm, Avancea, Villamor, Ostrand, Johns and Romualdez, JJ., concur.

31
Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. L-5003 June 27, 1953

NAZARIO TRILLANA, administrator-appellee,


vs.
QUEZON COLLEGE, INC., claimant-appellant.

Singson, Barnes, Yap and Blanco for appellant.


Delgado, Flores & Macapagal for appellee.

PARAS, J.:

Damasa Crisostomo sent the following letter to the Board of Trustees of the Quezon College:

June 1, 1948

The BOARD OF TRUSTEES


Quezon College
Manila

Gentlemen:

Please enter my subscription to dalawang daan (200) shares of your capital stock with a par value of P100 each. Enclosed you
will find (Babayaran kong lahat pagkatapos na ako ay makapag -pahuli ng isda) pesos as my initial payment and the balance
payable in accordance with law and the rules and regulations of the Quezon College. I hereby agree to shoulder the expenses
connected with said shares of stock. I further submit myself to all lawful demands, decisions or directives of the Board of
Trustees of the Quezon College and all its duly constituted officers or authorities (ang nasa itaas ay binasa at ipinaliwanag sa
akin sa wikang tagalog na aking nalalaman).

Very respectfully,

(Sgd.) DAMASA CRISOSTOMO


Signature of subscriber

Nilagdaan sa aming harapan:

JOSE CRISOSTOMO
EDUARDO CRISOSTOMO

Damasa Crisostomo died on October 26, 1948. As no payment appears to have been made on the subscription mentioned in the fore going
letter, the Quezon College, Inc. presented a claim before the Court of First Instance of Bulacan in her testate proceeding, for the collection
of the sum of P20,000, representing the value of the subscription to the capital stock of the Quezon College, Inc. This claim was opposed
by the administrator of the estate, and the Court of First Instance of Bulacan, after hearing issued an order dismissing the claim of the
Quezon College, Inc. on the ground that the subscription in question was neither registered in nor authorized by the Securiti es and
Exchange Commission. From this order the Quezon College, Inc. has appealed.

It is not necessary for us to discuss at length appellant's various assignments of error relating to the propriety of the gro und relief upon
by the trial court, since, as pointed out in the brief for the administrator and appellee, there are other decisive considerations which,
though not touched by the lower court, amply sustained the appealed order.

32
It appears that the application sent by Damasa Crisostomo to the Quezon College, Inc. wa s written on a general form indicating that an
applicant will enclose an amount as initial payment and will pay the balance in accordance with law and the regulations of th e College.
On the other hand, in the letter actually sent by Damasa Crisostomo, the latter (who requested that her subscription for 200 shares be
entered) not only did not enclose any initial payment but stated that "babayaran kong lahat pagkatapos na ako ay makapagpahul i ng
isda." There is nothing in the record to show that the Quezon Co llege, Inc. accepted the term of payment suggested by Damasa
Crisostomo, or that if there was any acceptance the same came to her knowledge during her lifetime. As the application of Damasa
Crisostomo is obviously at variance with the terms evidenced in th e form letter issued by the Quezon College, Inc., there was absolute
necessity on the part of the College to express its agreement to Damasa's offer in order to bind the latter. Conversely, said acceptance
was essential, because it would be unfair to immediately obligate the Quezon College, Inc. under Damasa's promise to pay the price of
the subscription after she had caused fish to be caught. In other words, the relation between Damasa Crisostomo and the Quezo n College,
Inc. had only thus reached the preliminary stage whereby the latter offered its stock for subscription on the terms stated in the form
letter, and Damasa applied for subscription fixing her own plan of payment, a relation, in the absence as in the present case of
acceptance by the Quezon College, Inc. of the counter offer of Damasa Crisostomo, that had not ripened into an enforceable contract.

Indeed, the need for express acceptance on the part of the Quezon College, Inc. becomes the more imperative, in view of the p roposal
of Damasa Crisostomo to pay the value of the subscription after she has harvested fish, a condition obviously dependent upon her sole
will and, therefore, facultative in nature, rendering the obligation void, under article 1115 of the old Civil Code which pro vides as
follows: "If the fulfillment of the condition should depend upon the exclusive will of the debtor, the conditional obligation sha ll be void.
If it should depend upon chance, or upon the will of a third person, the obligation shall produce all its effects in ac cordance with the
provisions of this code." It cannot be argued that the condition solely is void, because it would have served to create the o bligation to
pay, unlike a case, exemplified by Osmea vs. Rama (14 Phil., 99), wherein only the potestative condition was held void because it
referred merely to the fulfillment of an already existing indebtedness.

In the case of Taylor vs. Uy Tieng Piao, et al. (43 Phil., 873, 879), this Court already held that "a condition, facultative as to the debtor,
is obnoxious to the first sentence contained in article 1115 and renders the whole obligation void."

Wherefore, the appealed order is affirmed, and it is so ordered with costs against appellant.

Tuason, Padilla and Reyes, JJ., concur in the result.

33
Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. L-16570 March 9, 1922

SMITH, BELL & CO., LTD., plaintiff-appellant,


vs.
VICENTE SOTELO MATTI, defendant-appellant.

Ross and Lawrence and Ewald E. Selph for plaintiff-appellant.


Ramon Sotelo for defendant-appellant.

ROMUALDEZ, J.:

In August, 1918, the plaintiff corporation and the defendant, Mr. Vicente Sotelo, entered into contracts whereby the former o bligated
itself to sell, and the latter to purchase from it, two steel tanks, for the total price of twenty-one thousand pesos (P21,000), the same to
be shipped from New York and delivered at Manila "within three or four months;" two expellers at the price of twenty five tho usand
pesos (P25,000) each, which were to be shipped from San Francisco in the month of September, 1918, or as soon as possible; and two
electric motors at the price of two thousand pesos (P2,000) each, as to the delivery of which stipulation was made, couched in these
words: "Approximate delivery within ninety days. This is not guaranteed."

The tanks arrived at Manila on the 27th of April, 1919: the expellers on the 26th of October, 1918; and the motors on the 27t h of
February, 1919.

The plaintiff corporation notified the defendant, Mr. Sotelo, of the arrival of these goods, but Mr. Sotelo refused to receive them and to
pay the prices stipulated.

The plaintiff brought suit against the defendant, based on four separate causes of action, alleging, among other facts, that it immediately
notified the defendant of the arrival of the goods, and asked instructions from him as to the delivery thereof, and that the defendant
refused to receive any of them and to pay their price. The plaintiff, further, alleged that the expellers and the motors were in good
condition. (Amended complaint, pages 16-30, Bill of Exceptions.)

In their answer, the defendant, Mr. Sotelo, and the intervenor, the Manila Oil Refining and By -Products Co., Inc., denied the plaintiff's
allegations as to the shipment of these goods and their arrival at Manila, the notification to the defendant, Mr. Sotelo, the latter's refusal
to receive them and pay their price, and the good condition of the expellers and the motors, alleging as special defense that Mr. Sotelo
had made the contracts in question as manager of the intervenor, the Manila Oil Refining and By-Products Co., Inc which fact was
known to the plaintiff, and that "it was only in May, 1919, that it notified the intervenor that said tanks had arrived, the motors and the
expellers having arrived incomplete and long after the date stipulated." As a counterclaim or set -off, they also allege that, as a
consequence of the plaintiff's delay in making delivery of the goods, which the intervenor intended to use in the manufacture of cocoanut
oil, the intervenor suffered damages in the sums of one hundred sixteen thousand seven hundred eighty -three pesos and ninety-one
centavos (P116,783.91) for the nondelivery of the tanks, and twenty -one thousand two hundred and fifty pesos (P21,250) on account of
the expellers and the motors not having arrived in due time.

The case having been tried, the court below absolved the defendants from the complaint insofar as the tanks and the electric motors were
concerned, but rendered judgment against them, ordering them to "receiv e the aforesaid expellers and pay the plaintiff the sum of fifty
thousand pesos (P50,00), the price of the said goods, with legal interest thereon from July 26, 1919, and costs."

Both parties appeal from this judgment, each assigning several errors in the findings of the lower court.

The principal point at issue in this case is whether or not, under the contracts entered into and the circumstances establish ed in the record,
the plaintiff has fulfilled, in due time, its obligation to bring the goods in quest ion to Manila. If it has, then it is entitled to the relief
prayed for; otherwise, it must be held guilty of delay and liable for the consequences thereof.

To solve this question, it is necessary to determine what period was fixed for the delivery of the g oods.
34
As regards the tanks, the contracts A and B (pages 61 and 62 of the record) are similar, and in both of them we find this cla use:

To be delivered within 3 or 4 months The promise or indication of shipment carries with it absolutely no obligation on our
part Government regulations, railroad embargoes, lack of vessel space, the exigencies of the requirement of the United
States Government, or a number of causes may act to entirely vitiate the indication of shipment as stated. In other words, th e
order is accepted on the basis of shipment at Mill's convenience, time of shipment being merely an indication of what we hope
to accomplish.

In the contract Exhibit C (page 63 of the record), with reference to the expellers, the following stipulation appears:

The following articles, hereinbelow more particularly described, to be shipped at San Francisco within the month of
September /18, or as soon as possible. Two Anderson oil expellers . . . .

And in the contract relative to the motors (Exhibit D, page 64, rec.) the following appears:

Approximate delivery within ninety days. This is not guaranteed. This sale is subject to our being able to obtain
Priority Certificate, subject to the United States Government requirements and also subject to confirmation of manufactures.

In all these contracts, there is a final clause as follows:

The sellers are not responsible for delays caused by fires, riots on land or on the sea, strikes or other causes known as "Fo rce
Majeure" entirely beyond the control of the sellers or their representatives.

Under these stipulations, it cannot be said that any definite date was fixed for the delivery of the goods. As to the tanks, the agreement
was that the delivery was to be made "within 3 or 4 months," but that period was subject to the contingencies referred to in a subsequent
clause. With regard to the expellers, the contract says "within the month of September, 1918," but to this is added "or as soon as possible."
And with reference to the motors, the contract contains this expression, "Approximate delivery within ninety days," but right after this,
it is noted that "this is not guaranteed."

The oral evidence falls short of fixing such period.

From the record it appears that these contracts were executed at the time of the world war when there existed rigid restrictions on the
export from the United States of articles like the machinery in question, and maritime, as well as railroad, transportation was difficult ,
which fact was known to the parties; hence clauses were inserted in the contracts, regarding "Government regulations, railroa d
embargoes, lack of vessel space, the exigencies of the requirements of the United States Government," in connection with the tanks and
"Priority Certificate, subject to the United State Government requirements," with respect to the motors. At the time of the e xecution of
the contracts, the parties were not unmindful of the contingency of the United States Government not allowing the export of t he goods,
nor of the fact that the other foreseen circumstances therein stated might prevent it.

Considering these contracts in the light of the civil law, we cannot but conclude that the term which the parties attempted to fix is so
uncertain that one cannot tell just whether, as a matter of fact, those articles could be brought to Manila or not. If that is the case, as we
think it is, the obligations must be regarded as conditional.

Obligations for the performance of which a day certain has been fixed shall be demandable only when the day arrives.

A day certain is understood to be one which must necessarily arrive, even though its date be unknown.

If the uncertainty should consist in the arrival or non-arrival of the day, the obligation is conditional and shall be governed
by the rules of the next preceding section. (referring to pure and conditional obligations). (Art. 1125, Civ. Code.)

And as the export of the machinery in question was, as stated in the contract, contingent upon the sellers obtaining certific ate of priority
and permission of the United States Government, subject to the rules and regulations, as well as to railro ad embargoes, then the delivery
was subject to a condition the fulfillment of which depended not only upon the effort of the herein plaintiff, but upon the w ill of third
persons who could in no way be compelled to fulfill the condition. In cases like this, which are not expressly provided for, but implied ly
covered, by the Civil Code, the obligor will be deemed to have sufficiently performed his part of the obligation, if he has d one all that
was in his power, even if the condition has not been fulfilled in reality.

35
In such cases, the decisions prior to the Civil Code have held that the obligee having done all that was in his power, was en titled
to enforce performance of the obligation. This performance, which is fictitious not real is not expressly authorized by the
Code, which limits itself only to declare valid those conditions and the obligation thereby affected; but it is neither disallowed,
and the Code being thus silent, the old view can be maintained as a doctrine. (Manresa's commentaries on the Civil Code
[1907], vol. 8, page 132.)

The decisions referred to by Mr. Manresa are those rendered by the supreme court of Spain on November 19, 1896, and February 23,
1871.

In the former it is held:

First. That when the fulfillment of the conditions does no t depend on the will of the obligor, but on that of a third person who
can in no way be compelled to carry it out, and it is found by the lower court that the obligor has done all in his power to
comply with the obligation, the judgment of the said court, ordering the other party to comply with his part of the contract, is
not contrary to the law of contracts, or to Law 1, Tit. I, Book 10, of the "Novsima Recopilacin," or Law 12, Tit. 11, of Pa rtida
5, when in the said finding of the lower court, no law o r precedent is alleged to have been violated. (Jurisprudencia
Civil published by the directors of the Revista General de Legislacion y Jurisprudencia [1866], vol. 14, page 656.)

In the second decision, the following doctrine is laid down:

Second. That when the fulfillment of the condition does not depend on the will of the obligor, but on that of a third person, who
can in no way be compelled to carry it out, the obligor's part of the contract is complied withalf Belisario not having exerc ised
his right of repurchase reserved in the sale of Basilio Borja mentioned in paragraph (13) hereof, the affidavit of Basilio Borja
for the consolidacion de dominio was presented for record in the registry of deeds and recorded in the registry on the same
date.

(32) The Maximo Belisario left a widow, the opponent Adelina Ferrer and three minor children, Vitaliana, Eugenio, and Aureno
Belisario as his only heirs.

(33) That in the execution and sales thereunder, in which C. H. McClure appears as the judgment creditor, he was represented
by the opponent Peter W. Addison, who prepared and had charge of publication of the notices of the various sales and that in
none of the sales was the notice published more than twice in a newspaper.

The claims of the opponent-appellant Addison have been very fully and ably argued by his counsel but may, we think, be
disposed of in comparatively few words. As will be seen from the foregoing statement of facts, he rest his title (1) on the s ales
under the executions issued in cases Nos. 435, 450, 454, and 499 of the court of the justice of the peace of Dagupan with the
priority of inscription of the last two sales in the registry of deeds, and (2) on a purchase from the Director of Lands afte r the
land in question had been forfeited to the Government for non-payment of taxes under Act No. 1791.

The sheriff's sales under the execution mentioned are fatally defective for what of sufficient publication of the notice of s ale.
Section 454 of the Code of civil Procedure reads in part as follows:

SEC. 454. Before the sale of property on execution, notice thereof must be given, as follows:

1. In case of perishable property, by posing written notice of the time and place of the sale in three public places of the
municipality or city where the sale is to take place, for such time as may be reasonable, considering the character and condition
of the property;

2. * * * * * * *

3. In cases of real property, by posting a similar notice particularly describing the property, for twenty day s in three public
places of the municipality or city where the property is situated, and also where the property is to be sold, and publishing a
copy thereof once a week, for the same period, in some newspaper published or having general circulation in the province, if
there be one. If there are newspaper published in the province in both the Spanish and English languages, then a like publica tion
for a like period shall be made in one newspaper published in the Spanish language, and in one published in the English
language: Provided, however, That such publication in a newspaper will not be required when the assessed valuation of the
property does not exceed four hundred pesos;
36
4. * * * * * * *

Examining the record, we find that in cases Nos. 435 and 450 the sales took place on October 14, 1916; the notice first published gave
the date of the sale as October 15th, but upon discovering that October 15th was a Sunday, the date was changed to October 14th. The
correct notice was published twice in a local newspaper, the first publication was made on October 7th and the second and last on
October 14th, the date of the sale itself. The newspaper is a weekly periodical published every Saturday afternoon.

In case No. 454 there were only two publications of the notice in a newspaper, the first publication being made only fourteen days before
the date of the sale. In case No. 499, there were also only two publications, the first of which was made thirteen days before the sale. In
the last case the sale was advertised for the hours of from 8:30 in the morning until 4:30 in the afternoon, in violation of section 457 of
the Code of Civil Procedure. In cases Nos. 435 and 450 the hours advertised were from 9:00 in the morning until 4.30 in the a fternoon.
In all of the cases the notices of the sale were prepared by the judgment creditor or his agent, who also took charged of the publication
of such notices.

In the case of Campomanes vs. Bartolome and Germann & Co. (38 Phil., 808), this court held that if a sheriff sells without the notice
prescribe by the Code of Civil Procedure induced thereto by the judgment creditor and the purchaser at the sale is the judgment creditor,
the sale is absolutely void and not title passes. This must now be regarded as the settled doctrine in this jurisdiction whatever the rule
may be elsewhere.

It appears affirmatively from the evidence in the present case that there is a newspaper published in the province where the sale in
question took place and that the assessed valuation of the property disposed of at each sale exceeded P400. Comparing the requirements
of section 454, supra, with what was actually done, it is self-evident that notices of the sales mentioned were not given as prescribed by
the statute and taking into consideration that in connection with these sales the appellant Addison was either the judgment creditor or
else occupied a position analogous to that of a judgment creditor, the sales must be held invalid.

The conveyance or reconveyance of the land from the Director of Lands is equally invalid. The provisions of Act No. 1791 pertinent to
the purchase or repurchase of land confiscated for non-payment of taxes are found in section 19 of the Act and read:

. . . In case such redemption be not made within the time above specified the Government of the Philippine Islands shall have
an absolute, indefeasible title to said real property. Upon the expiration of the said ninety days, if redemption be not made , the
provincial treasurer shall immediately notify the Director of Lands of the forfeiture and furnish him with a description of the
property, and said Director of Lands shall have full control and custody thereof to lease or sell the same or any portion the reof
in the same manner as other public lands are leased or sold: Provided, That the original owner, or his legal representative, shall
have the right to repurchase the entire amount of his said real property, at any time before a sale or contract of sale has b een
made by the director of Lands to a third party, by paying therefore the whole sum due thereon at the time of ejectment together
with a penalty of ten per centum . . . .

The appellant Addison repurchased under the final proviso of the section quoted and was allowed to do so as the successor in interest
of the original owner under the execution sale above discussed. As we have seen, he acquired no rights under these sales, was th erefore
not the successor of the original owner and could only have obtained a valid conveyance of such titles as the Government might have
by following the procedure prescribed by the Public Land Act for the sale of public lands. he is entitled to reimbursement fo r the money
paid for the redemption of the land, with interest, but has acquired no title through the redemption.

The question of the priority of the record of the sheriff's sales over that of the sale from Belisario to Borja is extensively argue d in the
briefs, but from our point of view is of no importance; void sheriff's or execution sales cannot be validated through insc ription in the
Mortgage Law registry.

The opposition of Adelina Ferrer must also be overruled. She maintained that the land in question was community property of t he
marriage of Eulalio Belisario and Paula Ira: that upon the death of Paula Ira inealed from is modified, and the defendant Mr. Vicente
Sotelo Matti, sentenced to accept and receive from the plaintiff the tanks, the expellers and the motors in question, and to pay the plaintiff
the sum of ninety-six thousand pesos (P96,000), with legal interest thereon from July 17, 1919, the date of the filing of the complaint,
until fully paid, and the costs of both instances. So ordered.

Araullo, C.J., Johnson, Street, Malcolm, Avancea, Villamor, Ostrand, and Johns, JJ., concur.

37
Republic of the Philippines
SUPREME COURT
Manila

FIRST DIVISION

G.R. No. L-32811 March 31, 1980

FELIPE C. ROQUE, petitioner,


vs.
NICANOR LAPUZ and THE COURT OF APPEALS, respondents.

Taada, Sanchez, Taada, Taada for petitioner.

N.M. Lapuz for respondent.

GUERRERO, J.:

Appeal by certiorari from the Resolution of the respondent court 1 dated October 12, 1970 in CA-G.R. No. L-33998-R entitled "Felipe
C. Roque, plaintiff-appellee, versus Nicanor Lapuz, defendant-appellant" amending its original decision of April 23, 1970 which
affirmed the decision of the Court of First Instance of Rizal (Quezon City Branch) in Civil Case No. Q-4922 in favor of petitioner, and
the Resolution of the respondent court denying petitioner's motion for reconsideration.

The facts of this case are as recited in the decision of the Trial Court which was adopted and affirmed by the Court of Appeals:

Sometime in 1964, prior to the approval by the National Planning Commission of the consolidation and subdivision plan of
plaintiff's property known as the Rockville Subdivision, situated in Balintawak, Quezon City, plaintiff and defendant entered
into an agreement of sale covering Lots 1, 2 and 9, Block 1, of said property, with an aggregate area of 1,200 square meters,
payable in 120 equal monthly installments at the rate of P16.00, P15.00 per square meter, respectively. In accordance with said
agreement, defendant paid to plaintiff the sum of P150.00 as deposit and the further sum of P740.56 to complete the payment
of four monthly installments covering the months of July, August, September, and October, 1954. (Exhs. A and B). When the
document Exhibit "A" was executed on June 25, 1954, the plan covering plaintiff's property was merely tentative, and the
plaintiff referred to the proposed lots appearing in the tentativ e plan.

After the approval of the subdivision plan by the Bureau of Lands on January 24, 1955, defendant requested plaintiff that he
be allowed to abandon and substitute Lots 1, 2 and 9, the subject matter of their previous agreement, with Lots 4 and 12, Block
2 of the approved subdivision plan, of the Rockville Subdivision, with a total area of 725 square meters, which are corner lo ts,
to which request plaintiff graciously acceded.

The evidence discloses that defendant proposed to plaintiff modification of their previous contract to sell because he found it
quite difficult to pay the monthly installments on the three lots, and besides the two lots he had chosen were better lots, b eing
corner lots. In addition, it was agreed that the purchase price of these two lots would be at the uniform rate of P17.00 per square
(meter) payable in 120 equal monthly installments, with interest at 8% annually on the balance unpaid. Pursuant to this new
agreement, defendant occupied and possessed Lots 4 and 12, Block 2 of the approved subdivision plan, and enclosed them,
including the portion where his house now stands, with barbed wires and adobe walls.

However, aside from the deposit of P150.00 and the amount of P740.56 which were paid under their previous agreement,
defendant failed to make any further payment on account of the agreed monthly installments for the two lots in dispute, under
the new contract to sell. Plaintiff demanded upon defendant not only to pay the stipulated monthly installments in arrears, b ut
also to make up-to-date his payments, but defendant, instead of complying with the demands, kept on asking for extensions,
promising at first that he would pay not only the installments in arrears but also make up -to-date his payment, but later on
refused altogether to comply with plaintiff's demands.

Defendant was likewise requested by the plaintiff to sign the corresponding contract to sell in accordance with his previous
commitment. Again, defendant promised that he would sign the required contract to sell when h e shall have made up-to-date
the stipulated monthly installments on the lots in question, but subsequently backed out of his promise and refused to sign a ny

38
contract in noncompliance with what he had represented on several occasions. And plaintiff relied o n the good faith of
defendant to make good his promise because defendant is a professional and had been rather good to him (plaintiff).

On or about November 3, 1957, in a formal letter, plaintiff demanded upon defendant to vacate the lots in question and t o pay
the reasonable rentals thereon at the rate of P60.00 per month from August, 1955. (Exh. "B"). Notwithstanding the receipt of
said letter, defendant did not deem it wise nor proper to answer the same.

In reference to the mode of payment, the Honorable Court of Appeals found

Both parties are agreed that the period within which to pay the lots in question is ten years. They however, disagree on the
mode of payment. While the appellant claims that he could pay the purchase price at any time within a period of ten years with
a gradual proportionate discount on the price, the appellee maintains that the appellant was bound to pay monthly installment s.

On this point, the trial court correctly held that

It is further argued by defendant that under the agreement to sell in question, he has the right or option to pay the purchase
price at anytime within a period of ten years from 1954, he being entitled, at the same time, to a graduated reduction of the
price. The Court is constrained to reject this version not only because it is contradicted by the weight of evidence but also
because it is not consistent with what is reasonable, plausible and credible. It is highly improbable to expect plaintiff, or any
real estate subdivision owner for that matter, to agree to a sale of his land which would be payable anytime in ten years at the
exclusive option of the purchaser. There is no showing that defendant is a friend, a relative, or someone to whom plaintiff h ad
to be grateful, as would justify an assumption that he would have agreed to extend to defendant such an extra- ordinary
concession. Furthermore, the context of the document, Exhibit "B", not to mention the other evidences on records is indicativ e
that the real intention of the parties is for the payment of the purchase price of the lot in question on an equal monthly installment
basis for a period of ten years (Exhibits "A", "II", "J" and "K").

On January 22, 1960, petitioner Felipe C, Roque (plaintiff below) filed the complaint against defendant Nicanor Lapuz (private
respondent herein) with the Court of First Instance of Rizal, Quezon City Branch, for rescission and cancellation of the agre ement of
sale between them involving the two lots in question and prayed that judgment be rendered ordering the rescission and cancellation of
the agreement of sale, the defendant to vacate the two parcels of land and remove his house therefrom and to pay to the plain tiff the
reasonable rental thereof at the rate of P60.00 a month from August 1955 until such time as he shall have vacated the premises, and to
pay the sum of P2,000.00 as attorney's fees, costs of the suit and award such other relief or remedy as may be deemed just an d equitable
in the premises.

Defendant filed a Motion to Dismiss on the ground that the complaint states no cause of action, which motion was denied by the court.
Thereafter, defendant filed his Answer alleging that he bought three lots from the plaintiff containing an aggregate area of 1,200 sq.
meters and previously known as Lots 1, 2 and 9 of Block 1 of Rockville Subdivision at P16.00, P15.00 and P15.00, respectively, payable
at any time within ten years. Defendant admits having occupied the lots in question.

As affirmative and special defenses, defendant alleges that the complaint states no cause o f action; that the present action for rescission
has prescribed; that no demand for payment of the balance was ever made; and that the action being based on reciprocal obliga tions,
before one party may compel performance, he must first comply what is incumbent upon him.

As counterclaim, defendant alleges that because of the acts of the plaintiff, he lost two lots containing an area of 800 sq. meters and as
a consequence, he suffered moral damages in the amount of P200.000.00; that due to the filing of the p resent action, he suffered moral
damages amounting to P100,000.00 and incurred expenses for attorney's fees in the sum of P5,000.00.

Plaintiff filed his Answer to the Counterclaim and denied the material averments thereof.

After due hearing, the trial court rendered judgment, the dispositive portion of which reads:

WHEREFORE, the Court renders judgment in favor of plain. plaintiff and against the defendant, as follows:

(a) Declaring the agreement of sale between plaintiff and defendant involving the lot s in question (Lots 4 and 12,
Block 2 of the approved subdivision plan of the Rockville Subdivision) rescinded, resolved and cancelled;

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(b) Ordering defendant to vacate the said lots and to remove his house therefrom and also to pay plaintiff the reasonable
rental thereof at the rate of P60.00 per month from August, 1955 until he shall have actually vacated the premises; and

(c) Condemning defendant to pay plaintiff the sum of P2,000.00 as attorney's fees, as well as the costs of the suit.
(Record on Appeal, p. 118)

(a) Declaring the agreement of sale between plaintiff and defendant involving the lots in question (Lots 4 and 12,
Block 2 of the approved subdivision plan of the Rockville Subdivision) rescinded, resolved and cancelled;

(b) Ordering defendant to vacate the said lots and to remove his house therefrom and also to pay plaintiff the reasonable
rental thereof at the rate of P60.00 per month from August, 1955 until he shall have actually vacated premises; and

(c) Condemning defendant to pay plaintiff the sum of P2,000.00 as attorney's fees, as well as the costs of the suit.
(Record on Appeal. p. 118)

Not satisfied with the decision of the trial court, defendant appealed to the Court of Appeals. The latter court, finding the judgment
appealed from being in accordance with law and evidence, affirmed the same.

In its decision, the appellate court, after holding that the findings of fact of the trial court are fully supported by the e vidence, found and
held that the real intention of the parties is for the payment of the purchase price of the lots in question on an equal monthly installment
basis for the period of ten years; that there was modification of the original agreement when defendant actually occupied Lot s Nos. 4
and 12 of Block 2 which were corner lots that commanded a better price instead of the original Lots Nos. 1, 2 and 9, Block I of the
Rockville Subdivision; that appellant's bare assertion that the agreement is not rescindable because the appellee did not comply with his
obligation to put up the requisite facilities in the subdivision was insufficient to overcome the presumption that the law has been obeyed
by the appellee; that the present action has not prescribed since Article 1191 of the New Civil Code authorizing rescission in reciprocal
obligations upon noncompliance by one of the obligors is the applicable provision in relation to Article 1149 of the New Civil Code;
and that the present action was filed within five years from the time the right of action accrued.

Defendant filed a Motion for Reconsideration of the appellate court's decision on the following grounds:

First Neither the pleadings nor the evidence, testimonial, documentary or circumstantial, justify the conclusion as
to the existence of an alleged subsequent agreement novatory of the original contract admittedly entered into between
the parties:

Second There is nothing so unusual or extraordinary, as would render improbable the fixing of ten ears as the period
within which payment of the stipulated price was to be payable by appellant;

Third Appellee has no right, under the circumstances on the case at bar, to demand and be entitled to the rescission
of the contract had with appellant;

Fourth Assuming that any action for rescission is availability to appellee, th e same, contrary to the findings of the
decision herein, has prescribed;

Fifth Assumming further that appellee's action for rescission, if any, has not yet prescribed, the same is at least
barred by laches;

Sixth Assuming furthermore that a cause of action for rescission exists, appellant should nevertheless be entitled to
tile fixing of a period within which to comply with his obligation; and

Seventh At all events, the affirmance of the judgment for the payment of rentals on the premises from August, 1955
and he taxing of attorney's fees against appellant are not warranted b the circumstances at bar. (Rollo, pp. 87-88)

Acting on the Motion for Reconsideration, the Court of Appeals sustained the sixth ground raised by the appellant, that assuming that a
cause of action for rescission exists, he should nevertheless be entitled to the fixing of a period within which to comply with his
obligation. The Court of Appeals, therefore, amended its original decision in the following wise and manner:

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WHEREFORE, our decision dated April 23, 1970 is hereby amended in the sense that the defendant Nicanor Lapuz
is hereby granted a period of ninety (90) days from entry hereof within which to pay the balance of the purchase price
in the amount of P11,434,44 with interest thereon at the rate of 8% per annum from August 17, 1955 until fully paid.
In the event that the defendant fails to comply with his obligation as above stated within the period fixed herein, our
original judgment stands.

Petitioner Roque, as plaintiff-appellee below, filed a Motion for Reconsideration; the Court of Appeals denied it. He now comes and
appeals to this Court on a writ of certiorari.

The respondent Court of Appeals rationalizes its amending decision by considering that the house presently erec ted on the land subject
of the contract is worth P45,000.00, which improvements introduced by defendant on the lots subject of the contract are very substantial,
and thus being the case, "as a matter of justice and equity, considering that the removal of d efendant's house would amount to a virtual
forfeiture of the value of the house, the defendant should be granted a period within which to fulfill his obligations under the agreement."
Cited as authorities are the cases of Kapisanan Banahaw vs. Dejarme and Alvero, 55 Phil. 338, 344, where it is held that the discretionary
power of the court to allow a period within which a person in default may be permitted to perform the stipulation upon which the claim
for resolution of the contract is based should be exercised without hesitation in a case where a virtual forfeiture of valuable rights is
sought to be enforced as an act of mere reprisal for a refusal of the debtor to submit to a usurious charge, and the case of Puerto vs. Go
Ye Pin, 47 O.G. 264, holding that to oust the defendant from the lots without giving him a chance to recover what his father and he
himself had spent may amount to a virtual forfeiture of valuable rights.

As further reasons for allowing a period within which defendant could fulfill his obligation, the respondent court held that there exists
good reasons therefor, having in mind that which affords greater reciprocity of rights (Ramos vs. Blas, 51 O.G. 1920); that a fter appellant
had testified that plaintiff failed to comply with his part of the contract to put up the requisite facilities in the subdivision, plaintiff did
not introduce any evidence to rebut defendant's testimony but simply relied. upon the presumption that the law has been obeye d, thus
said presumption had been successfully rebutted as Exhibit "5-D" shows that the road therein shown is not paved The Court, however,
concedes that plaintiff's failure to comply with his obligation to put up the necessary facilities in the subdivision will no t deter him fro m
asking fr the rescission of the agreement since this obligation is not correlative with defendant's obligation to buy the property.

Petitioner assails the decision of the Court of Appeals for the following alleged errors:

I. The Honorable Court of Appeals erred in applying paragraph 3, Article 1191 of the Civil Code which refers to reciprocal
obligations in general and, pursuant thereto, in granting respondent Lapuz a period of ninety (90) days from entry of judgmen t
within which to pay the balance of the purchase price.

II. The Honorable Court of Appeals erred in not holding that Article 1592 of the same Code, which specifically covers sales of
immovable property and which constitutes an exception to the third paragraph of Article 1191 of said Code, is applicable to
the present case.

III. The Honorable Court of Appeals erred in not holding that respondent Lapuz cannot avail of the provisions of Article 1191 ,
paragraph 3 of the Civil Code aforesaid because he did not raise in his answer or in any of the pleadings he filed in the trial
court the question of whether or not he is entitled, by reason of a just cause, to a fixing of a new period.

IV. Assuming arguendo that the agreement entered into by and between petitioner and respondent Lapuz was a mere promise
to sell or contract to sell, under which title to the lots in question did not pass from petitioner to respondent, still the Honorable
Court of Appeals erred in not holding that aforesaid respondent is not entitled to a new period within which to pay petitione r
the balance of P11,434.44 interest due on the purchase price of P12.325.00 of the lots.

V. Assuming arguendo that paragraph 3, Article 1191 of the Civil Code is applicable and may be availed of by respondent, the
Honorable Court of Appeals nonetheless erred in not declaring that aid respondent has not shown the existence of a just cause
which would authorize said Court to fix a new period within which to pay the balance aforesaid.

VI. The Honorable Court of Appeals erred in reconsidering its original decision promulgated on April 23, 1970 which affirmed
the decision of the trial court.

The above errors may, however, be synthesized into one issue and that is, whether private respondent is entitled to the Benef its of the
third paragraph of Article 1191, New Civil Code, for the fixing of period within which he should comply with what is incumben t upon
him, and that is to pay the balance of P11,434,44 with interest thereon at the rate of 8% 1et annum from August 17, 1955 until fully paid

41
since private respondent had paid only P150.00 as deposit and 4 months intallments amounting to P740.46, or a total of P890.46, the
total price of the two lots agreed upon being P12,325.00.

For his part, petitioner maintains that res pondent is not entitled to the Benefits of paragraph 3, Article 1191, NCC and that instead,
Article 1592 of the New Civil Code which specifically covers sales of immovable property and which constitute an exception to the
third paragraph of Art. 1191 of aid Code, is the applicable law to the case at bar.

In resolving petitioner's assignment of errors, it is well that We lay clown the oda provisions and pertinent rulings of the Supreme Court
bearing on the crucial issue of whether Art. 1191, paragraph 3 of the New Civil Code applies to the case at Bar as held by the appellate
court and supported by the private respondent, or Art. 1592 of the same Code which petitioner strongly argues in view of the peculiar
facts and circumstances attending this case. Article 1191, New Civil Code, provides:

Art. 1191. The power to rescind obligations is implied in reciprocal ones, in case one at the obligors should not comply
with hat is incumbent upon him

The injured partner may choose between the fulfillment and the rescission of the obligation, with the payment of damages
in either case. He may also seek rescission, even after he has chosen fulfillment, if the latter should become impossible.

The court shall decree the rescission claimed, unless there be just cause authorizing the fixing of a period.

This is understood to be without prejudice to the rights of third persons who have acquired the thing, in accordance with
articles 1385 and 1388 and the Mortgage Law.

Article 1592 also provides:

Art. 1592. In the sale of immovable property, even though it may have been stipulated that upon failure to pay the
price at the time agreed upon the rescission of the contract shall of right take place, the vendee may pay, even after
the expiration of the period, as long as no demand for rescission of the contract has been made upon him either
judicially or by a notarial act. After the demand, the court may not grant him a new term.

The controlling and latest jurisprudence is established and settled in the celebrated case of Luzon Brokerage Co., Inc. vs. Maritime
Building Co., Inc. and Myers Building Co., G.R. No. L-25885, January 31, 1972, 43 SCRA 93, originally decided in 1972, reiterated in
the Resolution on Motion to Reconsider dated August 18, 1972, 46 SCRA 381 and emphatically repeated in the Resolution on Second
Motion for Reconsideration promulgated November 16, 1978, 86 SCRA 309, which once more denied Maritimes Second Motion for
Reconsideration of October 7, 1972. In the original decision, the Supreme Court speaking thru Justice J.B.L. Reyes said:

Under the circumstances, the action of Maritime in suspending payments to Myers Corporation was a breach of
contract tainted with fraud or malice (dolo), as distinguished from mere negligence (culpa), "dolo" being succinctly
defined as a "conscious and intention design to evade the normal fulfillment of existing obligations" (Capistrano, Civil
Code of the Philippines, Vol. 3, page 38), and therefore incompatible with good faith (Castan, Derecho Civil, 7th Ed.,
Vol. 3, page 129; Diaz Pairo, Teoria de Obligaciones, Vol. 1, page 116).

Maritime having acted in bad faith, it was not entitled to ask the court to give it further time to make payment and
thereby erase the default or breach that it had deliberately incurred. Thus the lower court committed no error in refusing
to extend the periods for payment. To do otherwise would be to sanction a deliberate and reiterated infringement of
the contractual obligations incurred by Maritime, an attitude repugnant to the stability and obligatory force of
contracts.

The decision reiterated the rule pointed out by the Supreme Court in Manuel vs. Rodriguez, 109 Phil. 1, p. 10, that:

In contracts to sell, where ownership is retained by the seller and is not to pass until the fun payment of the price, such
payment, as we said is a positive suspensive condition, the failure of which is not a breach, casual or serious, but
simply an event that prevented the obligation of the vendor to convey title from acquiring binding i force in accordance
with Article 1117 of the Old Civil Code. To argue that there was only a casual breach is to proceed from the assumption
that the contract is one of absolute sale, where non -payment is a resolutory condition, which is not the case."
Continuing, the Supreme Court declared:

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... appellant overlooks that its contract with appellee Myers s not the ordinary sale envisaged by Article 1592,
transferring ownership simultaneously with the delivery of the real property sold, but one in which the vendor retained
ownership of the immovable object of the sale, merely undertaking to convey it provided the buyer strictly complied
with the terms of the contract (see paragraph [d], ante page 5). In suing to recover possession of the building from
Maritime appellee Myers is not after the resolution or setting aside of the contract and the restoration of the parties to
the status quo ante as contemplated by Article 1592, but precisely enforcing the Provisions of the agreement that it is
no longer obligated to part with the ownership or possession of th e property because Maritime failed to comply with
the specific condition precedent, which is to pay the installments as they fell due.

The distinction between contracts of sale and contracts to sell with reserved title has been recognized by this Court in
repeated decisions upholding the power of promisors under contracts to sell in case of failure of the other party to
complete payment, to extrajudicially terminate the operation of the contract, refuse conveyance and retain the sums
or installments already received, where such rights are expressly provided for, as in the case at bar.

In the Resolution denying the first Motion for Reconsideration, 46 SCRA 381, the Court again speaking thru Justice J.B.L. Rey es,
reiterated the rule that in a contract to sell, the full payment of the price through the punctual performance of the monthly payments is a
condition precedent to the execution of the final sale 4nd to the transfer of the property from the owner to the proposed buy er; so that
there will be no actual sale until and unless full payment is made.

The Court further ruled that in seeking to oust Maritime for failure to pay the price as agreed upon, Myers was not rescindin g (or more
properly, resolving) the contract but precisely enforcing it according to its expressed terms. In its suit, Myers was not seeking restitution
to it of the ownership of the thing sold (since it was never disposed of), such restoration being the logical consequence of the fulfillment
of a resolutory condition, expressed or implied (Art. 1190); neither was it seeking a declaration that its obligation to sell was
extinguished. What is sought was a judicial declaration that because the suspensive condition (full and punctual payment) had not been
fulfilled, its obligation to sell to Maritime never arose or never became effective and, therefore, it (Myers) was entitled to repossess the
property object of the contract, possession being a mere incident to its right of ownership.

The decision also stressed that "there can be no rescission or resolution of an obligation as yet non-existent, because the suspensive
condition did not happen. Article 1592 of the New Civil Code (Art. 1504 of Old Civil Code) requiring demand by suit or notarial act in
case the vendor of realty wants to rescind does not apply to a contract to sell or promise to sell, where title remains with the vendor until
fulfillment to a positive condition, such as full payment of the price." (Manuel vs, Rodriguez, 109 Phil. 9)

Maritime's Second Motion for Reconsideration was denied in the Resolution of the Court dated November 16, 1978, 86 SCRA 305,
where the governing law and precedents were briefly summarized in the strong and emphatic language of Justice Teehankee, thus :

(a) The contract between the parties was a contract to sell or conditional sale with title expressly reserved in the vendor
Myers Building Co., Inc. Myers until the suspensive condition of full and punctual payment of the full price shall have
been met on pain of automatic cancellation of the contract upon failure to pay any of the monthly installments when
due and retention of the sums theretofore paid as rentals. When the vendee, appellant Maritime, willfully and in bad
faith failed since March, 1961 to pay the P5,000. monthly installments notwithstanding that it was punctually
collecting P10,000. monthly rentals from the lessee Luzon Brokerage Co., Myers was entitled, as it did in law and
fact, to enforce the terms of the contract to sell and to declare the same terminated and cancelled.

(b) Article 1592 (formerly Article 1504) of the new Civil Code is not applicable to such contracts to self or conditional
sales and no error was committed by the trial court in refusing to extend the periods for payment.

(c) As stressed in the Court's decision, "it is irrelevant whether appellant Maritime's infringement of its contract was
casual or serious" for as pointed out in Manuel vs. Rodriguez, '(I)n contracts to self. whether ownership is retained by
the seller and is not to pass until the full payment of the price, such payment, as we said, is a positive suspensive
condition, the failure of which is not a breach, casual or serious, but simply an event that prevented the obligation of
the vendor to convey title from acquiring binding force ...

(d) It should be noted, however, that Maritimes breach was far from casual but a most serious breach of contract ...

(e) Even if the contract were considered an unconditional sale so that Article 1592 of the Civil Code could be deemed
applicable, Myers' answer to the complaint for interpleaded in the court below constituted a judicial demand for
rescission of the contract and by the very provision of the cited codal article, 'after the demand, the court may not grant
him a new term for payment; and
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(f) Assumming further that Article 1191 of the new Civil Code governing rescission of reciprocal obligations could
be applied (although Article 1592 of the same Code is controlling since it deals specifically with sales of real property),
said article provides that '(T)he court shall decree the rescission claimed, unless there be just cause authorizing the
fixing of a period' and there exists to "just cause" as shown above for the fixing of a further period. ...

Under the first and second assignments of error which petitioner jointly discuss es, he argues that the agreement entered into between
him and the respondent is a perfected contract of purchase and sale within the meaning of Article 1475 of the New Civil Code which
provides that "the contract of sale is perfected at the moment there is a meeting of minds upon the thing which is the object of the
contract and upon the price. From that moment, the parties may reciprocally demand performance, subject to the provisions of the law
governing the form of contract."

Petitioner contends that "(n)othing in the decision of the courts below would show that ownership of the property remained with plaintiff
for so long as the installments have not been fully paid. Which yields the conclusion that, by the delivery of the lots to de fendant,
ownership likewise was transferred to the latter." (Brief for the Petitioner, p. 15) And he concludes that the sale was consummated by
the delivery of the two lots, the subject thereof, by him to the respondent.

Under the findings of facts by the appellate court, it appears that the two lots subject of the agreement between the parties herein were
delivered by the petitioner to the private respondent who took possession thereof and occupied the same and thereafter built his house
thereon, enclosing the lots with adobe stone walls and barbed wires. But the property being registered under the Land Registration Act,
it is the act of registration of the Deed of Sale which could legally effect the transfer of title of ownership to the transferee, pursuant to
Section 50 of Act 496. (Manuel vs. Rodriguez, et al., 109 Phil. 1; Buzon vs. Lichauco, 13 Phil. 354; Tuazon vs. Raymundo, 28 Phil.
635: Worcestor vs. Ocampo, 34 Phil. 646). Hence, We hold that the contract between the petitioner and the respondent was a co ntract
to sell where the ownership or title is retained by the seller and is not to pass until the full payment of the price, such payment be ing a
positive suspensive condition and failure of which is not a breach, casual or serious, but simply an event that prevented the obligation
of the vendor to convey title from acquiring binding force.

In the case at bar, there is no writing or document evidencing the agreement originally entered into between petitioner and p rivate
respondent except the receipt showing the initial deposit of P150.00 as shown in Exh. "A" and the payment of the 4- months installment
made by respondent corresponding to July, 1954 to October, 1954 in the sum of P740.56 as shown in Exh. "B". Neither is there any
writing or document evidencing the modified agreement when the 3 lots were changed to Lots 4 and 12 with a reduced area of 725 sq.
meters, which are corner lots. This absence of a formal deed of conveyance is a very strong indication that the parties did n ot intend
immediate transfer of ownership and title, but only a transfer after full payment of the price. Parenthetically, We must say that the
standard printed contracts for the sale of the lots in the Rockville Subdivision on a monthly installment basis showing the t erms and
conditions thereof are immaterial to the case at bar since they have not been signed by either of the parties to this case.

Upon the law and jurisprudence hereinabove cited and considering the nature of the transaction or agreement between petitione r and
respondent which We affirm and sustain to be a contract to sell, the following resolutions of petitioner's assignment of errors necessarily
arise, and so We hold that:

1. The first and second assignments of errors are without merit.

The overwhelming weight of authority culminating in the Luzon Brokerage vs. Maritime cases has laid down the rule that Article 1592
of the New Civil Code does not apply to a contract to sell where title remains with the vendor until full payment of the pric e as in the
case at bar. This is the ruling in Caridad Estates vs. Santero, 71 Phil. 120; Aldea vs. Inquimboy 86 Phil. 1601; Jocon vs. Capitol
Subdivision, Inc., L-6573, Feb. 28, 1955; Miranda vs. Caridad Estates, L-2077 and Aspuria vs. Caridad Estates, L-2121 Oct. 3, 1950,
all reiterated in Manuel vs. Rodriguez, et al. 109 Phil. 1, L-13435, July 27, 1960. We agree with the respondent Court of Appeals that
Art, 1191 of the New Civil Code is the applicable provision where the obligee, like petitioner herein, elects to rescind or c ancel his
obligation to deliver the ownership of the two lots in question for failure of the respondent to pay in fun the purchase price on the bas is
of 120 monthly equal installments, promptly and punctually for a period of 10 years.

2. We hold that respondent as obligor is not entitled to the benefits of paragraph 3 of Art. 1191, NCC Having been in default, he is not
entitled to the new period of 90 days from entry of judgment within which to pay petitioner the balance of P11,434.44 with in terest due
on the purchase price of P12,325.00 for the two lots.

Respondent a paid P150.00 as deposit under Exh. "A" and P740.56 for the 4-months installments corresponding to the months of July
to October, 1954. The judgment of the lower court and the Court of Appeals held that respondent wa s under the obligation to pay the
purchase price of the lots m question on an equal monthly installment basis for a period of ten years, or 120 equal monthly installments.
Beginning November, 1954, respondent began to default in complying with his obligation and continued to do so for the remaining 116
44
monthly interest. His refusal to pay further installments on the purchase price, his insistence that he had the option to pay the purchase
price any time in ten years inspire of the clearness and certainty of his agreement with the petitioner as evidenced further by the receipt,
Exh. "B", his dilatory tactic of refusing to sign the necessary contract of sale on the pretext that he will sign later when he shall have
updated his monthly payments in arrears but which he never attempted to update, and his failure to deposit or make available any amount
since the execution of Exh "B" on June 28, 1954 up to the present or a period of 26 years, are all unreasonable and unjustified which
altogether manifest clear bad faith and malice on the part of respondent puzzle making inapplicable and unwarranted the benefits of
paragraph 3, Art. 1191, N.C.C. To allow and grant respondent an additional period for him to pay the balance of the purchase price,
which balance is about 92% of the agreed price, would be tantamount to excusing his bad faith and sanctioning the deliberate
infringement of a contractual obligation that is repugnant and contrary to the stability, security and obligatory force of co ntracts.
Moreover, respondent's failure to pay the succeeding 116 monthly installments after paying only 4 monthly installments is a substantial
and material breach on his part, not merely casual, which takes the case out of the application of the benefits of pa paragra ph 3, Art.
1191, N.C.C.

At any rate, the fact that respondent failed to comply with the suspensive condition which is the full payment of the price t hrough the
punctual performance of the monthly payments rendered petitioner's obligation to sell ineffective and, therefore, petitioner was entitled
to repossess the property object of the contract, possession being a mere incident to his right of ownership (Luzon Brokerage Co., Inc.
vs. Maritime Building Co., Inc., et al. 46 SCRA 381).

3. We further rule that there exists no just cause authorizing the fixing of a new period within which private respondent may pay the
balance of the purchase price. The equitable grounds or considerations which are the basis of the respondent court in the fixing of an
additional period because respondent had constructed valuable improvements on the land, that he has built his house on the property
worth P45,000.00 and placed adobe stone walls with barbed wires around, do not warrant the fixing of an additional period. We cannot
sanction this claim for equity of the respondent for to grant the same would place the vendor at the mercy of the vendee who can easily
construct substantial improvements on the land but beyond the capacity of the vendor to reimburse in case he elects to rescin d the
contract by reason of the vendee's default or deliberate refusal to pay or continue paying the purchase price of the land. Un der this
design, strategem or scheme, the vendee can cleverly and easily "improve out" the vendor of his land.

More than that, respondent has not been honest, fair and reciprocal with the petitioner, hence it would not be fair and reasonable to the
petitioner to apply a solution that affords greater reciprocity of rights which the appealed decision tried to effect between the parties. As
matters stand, respondent has been enjoying the possession and occupancy of the land without paying the other 116 monthly ins tallments
as they fall due. The scales of justice are already tipped in respondent,s favor under the amended decision of the respondent court. It is
only right that We strive and search for the application of the law whereby every person must, in the exercise of his rights and in the
performance of his duties, act with justice, give everyone his due, and observe honesty and good faith (Art. 19, New Civil Code)

In the case at bar, respondent has not acted in good faith. With malice and deliberate intent, he has twisted the clear impor t of his
agreement with the petitioner in order to suit his ends and delay the fulfillment of his obligation to pay the land he had enjoyed for the
last 26 years, more than twice the period of ten years that he obliged himself to complete payment of the price.

4. Respondent's contention that petitioner has not complied with his obligation to put up the necessary facilities in the Rockville
Subdivision is not sufficient nor does it constitute good reason to justify the grant of an additional period of 90 days from entry of
judgment within which respondent may pay the balance of the purchase price agreed upon. The Judgment of the appellate court concedes
that petitioner's failure to comply with his obligation to put up the necessary facilities in the subdivision will not deter him from asking
for the rescission of the agreement since his obligation is not correlative with respondent's obligation to buy the property. Since this is
so conceded, then the right of the petitioner to rescind the agreement upon the happening or in the event that respondent fails or defaults
in any of the monthly installments would be rendered nugatory and ineffective. The right of rescission would then depend upon an
extraneous consideration which the law does not contemplate.

Besides, at the rate the two lots were sold to respondent with a combined area of 725 sq. meters at the un iform price of P17.00 per sq.
meter making a total price of P12,325.00, it is highly doubtful if not improbable that aside from his obligation to deliver t itle and transfer
ownership to the respondent as a reciprocal obligation to that of the respondent in paying the price in full and promptly as the installments
fall due, petitioner would have assumed the additional obligation "to provide the subdivision with streets ... provide said s treets with
street pavements concrete curbs and gutters, fillings as req uired by regulations, adequate drainage facilities, tree plantings, adequate
water facilities" as required under Ordinance No. 2969 of Quezon City approved on May 11, 1956 (Answer of Defendant, Record on
Appeal, pp. 35-36) which was two years after the agreement in question was entered into June, 1y54.

The fact remains, however, that respondent has not protested to the petitioner nor to the authorities concerned the alleged f ailure of
petitioner to put up and provide such facilities in the subdivision becau se he knew too well that he has paid only the aggregate sum of
P890.56 which represents more or less 7% of the agreed price of P12,325.00 and that he has not paid the real estate taxes ass essed by

45
the government on his house erected on the property under litigation. Neither has respondent made any allegation in his Answer and in
all his pleadings before the court up to the promulgation of the Resolution dated October 12, 1970 by the Court of Appeals, t o the effect
that he was entitled to a new period within which to comply with his obligation, hence the Court could not proceed to do so unless the
Answer is first amended. (Gregorio Araneta, Inc. vs. Philippine Sugar Estates Development Co., Ltd., G.R. No. L-22558, May 31, 1967,
20 SCRA 330, 335). It is quite clear that it is already too late in the day for respondent to claim an additional period within which to
comply with his obligation.

Precedents there are in Philippine jurisprudence where the Supreme Court granted the buyer of real property additional per iod within
which to complete payment of the purchase price on grounds of equity and justice as in (1) J.M. Tuazon Co., Inc. vs. Javier, 31 SCRA
829 where the vendee religiously satisfied the monthly installments for eight years and paid a total of P4,134.08 including interests on
the principal obligation of only P3,691.20, the price of the land; after default, the vendee was willing to pay all arrears, in fact offered
the same to the vendor; the court granted an additional period of 60 days -from receipt of judgment for the vendee to make all installment
in arrears plus interest; (2) in Legarda Hermanos vs. Saldaa, 55 SCRA 324, the Court ruled that where one purchase, from a subdivision
owner two lots and has paid more than the value of one lot, the former is entitled to a certificate of title to one lot in case of default.

On the other hand there are also cases where rescission was not granted and no new or additional period was authorized. Thus, in Caridad
Estates vs. Santero, 71 Phil. 114, the vendee paid, totalling P7,590.00 or about 25% of the purchase price of P30,000.00 for the three
lots involved and when the vendor demanded revocation upon the vendee's default two years after, the vendee offered to pay th e arears
in check which the vendor refused; and the Court sustained the revocation and ordered the vendee ousted from the possession of the
land. In Ayala y Cia vs. Arcache, 98 Phil. 273, the total price of the land was P457,404.00 payable in installments; the buyer initially
paid P100,000.00 or about 25% of the agreed price; the Court ordered rescission in view of the substantial breach and granted no
extension to the vendee to comply with his obligation.

The doctrinal rulings that "a slight or casual breach of contract is not a ground for rescission. It must be so substantial and fundamental
to defeat the object of the parties" (Gregorio Araneta Inc. vs. Tuazon de Paterno, L-2886, August 22, 1962; Villanueva vs. Yulo, L-
12985, Dec. 29,1959); that "where time is not of the essence of t agreement, a slight delay on the part of one party in the performance
of his obligation is not a sufficient ground for the rescission of the agreement"( Biando vs. Embestro L-11919, July 27, 1959; cases cited
in Notes appended to Universal Foods Corporation vs. Court of A ppeals, 33 SCRA 1), convince and persuade Us that in the case at bar
where the breach, delay or default was committed as early as in the payment of the fifth monthly installment for November, 1954, that
such failure continued and persisted the next month and every month thereafter in 1955, 1956, 1957 and year after year to the end of the
ten-year period in 1964 (10 years is respondent's contention) and even to this time, now more than twice as long a time as the or iginal
period without respondent adding, or even offering to add a single centavo to the sum he had originally paid in 1954 which represents a
mere 7% of the total price agreed upon, equity and justice may not be invoked and applied. One who seeks equity and justice must come
to court with clean hands, which can hardly be said of the private respondent.

One final point, on the supposed substantial improvements erected on the land, respondent's house. To grant the period to the respondent
because of the substantial value of his house is to make the land an accessory to the house. This is unjust and unconscionable since it is
a rule in Our Law that buildings and constructions are regarded as mere accessories to the land which is the principal, follo wing the
Roman maxim "omne quod solo inadeficatur solo cedit" (Everything that is built on the soil yields to the soil).

Pursuant to Art. 1191, New Civil Code, petitioner is entitled to rescission with payment of damages which the trial court and the appellate
court, in the latter's original decision, granted in the form of rental at the rate of P60.00 per month from August, 1955 unt il respondent
shall have actually vacated the premises, plus P2,000.00 as attorney's fees. We affirm the same to be fair and reasonable. We also sustain
the right of the petitioner to the possession of the land, ordering thereby respondent to vacate the same and remove his house therefrom.

WHEREFORE, IN VIEW OF THE FOREGOING, the Resolution appealed from dated October 12, 1970 is hereby REVERSED. The
decision of the respondent court dated April 23, 1970 is hereby REINSTATED and AFFIRMED, with costs against private respondent.

SO ORDERED.

46
Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. L-28602 September 29, 1970

UNIVERSITY OF THE PHILIPPINES, petitioner,


vs.
WALFRIDO DE LOS ANGELES, in his capacity as JUDGE of the COURT OF FIRST INSTANCE IN QUEZON CITY, et
al., respondents.

Office of the Solicitor General Antonio P. Barredo, Solicitor Augusto M. Amores and Special Counsel Perfecto V. Fernandez for
petitioner.

Norberto J. Quisumbing for private respondents.

REYES, J.B.L., J.:

Three (3) orders of the Court of First Instance of Rizal (Quezon City), issued in its Civil Case No. 9435, are sought to be annulled in
this petition for certiorari and prohibition, filed by herein petitioner University of the Philippines (or UP) against the ab ove-named
respondent judge and the Associated Lumber Manufacturing Company, Inc. (or ALUMCO). The first order, dated 25 February 1966,
enjoined UP from awarding logging rights over its timber concession (or Land Grant), situated at the Lubayat areas in the pro vinces of
Laguna and Quezon; the second order, dated 14 January 1967, adjudged UP in contempt of court, and directed Sta. Clara Lumber
Company, Inc. to refrain from exercising logging rights or conducting logging operations on the concession; and the third order, dated
12 December 1967, denied reconsideration of the order of contempt.

As prayed for in the petition, a writ of preliminary injunction against the enforcement or implementation of the three (3) qu estioned
orders was issued by this Court, per its resolution on 9 February 1968.

The petition alleged the following:

That the above-mentioned Land Grant was segregated from the public domain and given as an endowment to UP, an institution of
higher learning, to be operated and developed for the purpose of raising additional income for its support, pursuant to Act 3608;

That on or about 2 November 1960, UP and ALUMCO entered into a logging agreement under which the latter was granted exclusive
authority, for a period starting from the date of the agreement to 31 December 1965, extendible for a further period of five (5) years by
mutual agreement, to cut, collect and remove timber from the Land Grant, in consideration of payment to UP of royalties, fore st fees,
etc.; that ALUMCO cut and removed timber therefrom but, as of 8 December 1964, it had incurred an unpaid account of P219,362.94,
which, despite repeated demands, it had failed to pay; that after it had received notice that UP would rescind or terminate t he logging
agreement, ALUMCO executed an instrument, entitled "Acknowledgment of Debt and Proposed Manner of Payments," dated 9
December 1964, which was approved by the president of UP, and which stipulated the following:

3. In the event that the payments called for in Nos. 1 and 2 of this paragraph are no t sufficient to liquidate the
foregoing indebtedness of the DEBTOR in favor of the CREDITOR, the balance outstanding after the said payments
have been applied shall be paid by the DEBTOR in full no later than June 30, 1965;

xxx xxx xxx

5. In the event that the DEBTOR fails to comply with any of its promises or undertakings in this document, the
DEBTOR agrees without reservation that the CREDITOR shall have the right and the power to consider the
Logging Agreement dated December 2, 1960 as rescinded without the necessity of any judicial suit, and the
CREDITOR shall be entitled as a matter of right to Fifty Thousand Pesos (P50,000.00) by way of and for liquidated
damages;
47
ALUMCO continued its logging operations, but again incurred an unpaid account, for the pe riod from 9 December 1964 to 15 July
1965, in the amount of P61,133.74, in addition to the indebtedness that it had previously acknowledged.

That on 19 July 1965, petitioner UP informed respondent ALUMCO that it had, as of that date, considered as rescinde d and of no
further legal effect the logging agreement that they had entered in 1960; and on 7 September 1965, UP filed a complaint again st
ALUMCO, which was docketed as Civil Case No. 9435 of the Court of First Instance of Rizal (Quezon City), for the collection or
payment of the herein before stated sums of money and alleging the facts hereinbefore specified, together with other allegations; it
prayed for and obtained an order, dated 30 September 1965, for preliminary attachment and preliminary injunction restraining
ALUMCO from continuing its logging operations in the Land Grant.

That before the issuance of the aforesaid preliminary injunction UP had taken steps to have another concessionaire take over the
logging operation, by advertising an invitation to bid; that bidding was conducted, and the concession was awarded to Sta. Clara
Lumber Company, Inc.; the logging contract was signed on 16 February 1966.

That, meantime, ALUMCO had filed several motions to discharge the writs of attachment and preliminary injunction but were denied
by the court;

That on 12 November 1965, ALUMCO filed a petition to enjoin petitioner University from conducting the bidding; on 27 November
1965, it filed a second petition for preliminary injunction; and, on 25 February 1966, respondent judge issued the first of the
questioned orders, enjoining UP from awarding logging rights over the concession to any other party.

That UP received the order of 25 February 1966 after it had concluded its contract with Sta. Clara Lumber Company, Inc., and said
company had started logging operations.

That, on motion dated 12 April 1966 by ALUMCO and one Jose Rico, the court, in an order dated 14 January 1967, declared
petitioner UP in contempt of court and, in the same order, directed Sta. Clara Lu mber Company, Inc., to refrain from exercising
logging rights or conducting logging operations in the concession.

The UP moved for reconsideration of the aforesaid order, but the motion was denied on 12 December 1967.

Except that it denied knowledge of the purpose of the Land Grant, which purpose, anyway, is embodied in Act 3608 and, therefore,
conclusively known, respondent ALUMCO did not deny the foregoing allegations in the petition. In its answer, respondent corre cted
itself by stating that the period of the logging agreement is five (5) years - not seven (7) years, as it had alleged in its second amended
answer to the complaint in Civil Case No. 9435. It reiterated, however, its defenses in the court below, which maybe boiled d own to:
blaming its former general manager, Cesar Guy, in not turning over management of ALUMCO, thereby rendering it unable to pay the
sum of P219,382.94; that it failed to pursue the manner of payments, as stipulated in the "Acknowledgment of Debt and Propose d
Manner of Payments" because the logs that it had cut turned out to be rotten and could not be sold to Sta. Clara Lumber Company,
Inc., under its contract "to buy and sell" with said firm, and which contract was referred and annexed to the "Acknowledgment of Debt
and Proposed Manner of Payments"; that UP's unilateral rescission of the logging contract, without a court order, was invalid; that
petitioner's supervisor refused to allow respondent to cut new logs unless the logs previously cut during the management of Cesar Guy
be first sold; that respondent was permitted to cut logs in the middle of June 1965 but petitioner's supervisor stopped all logg ing
operations on 15 July 1965; that it had made several offers to petitioner for respondent to resume logging operations but res pondent
received no reply.

The basic issue in this case is whether petitioner U.P. can treat its contract with ALUMCO rescinded, and may disregard the s ame
before any judicial pronouncement to that effect. Respondent ALUMCO contended, and the lower court, in issuing the injunction
order of 25 February 1966, apparently sustained it (although the order expresses no specific findings in this regard), that it is only after
a final court decree declaring the contract rescinded for violation of its terms that U.P. could disregard ALUMCO's rights under the
contract and treat the agreement as breached and of no force or effect.

We find that position untenable.

In the first place, UP and ALUMCO had expressly stipulated in the "Acknowledgment of Debt and Proposed Manne r of Payments"
that, upon default by the debtor ALUMCO, the creditor (UP) has "the right and the power to consider, the Logging Agreement da ted 2
December 1960 as rescinded without the necessity of any judicial suit." As to such special stipulation, and in connection with Article
1191 of the Civil Code, this Court stated in Froilan vs. Pan Oriental Shipping Co., et al., L-11897, 31 October 1964, 12 SCRA 276:

48
there is nothing in the law that prohibits the parties from entering into agreement that violation o f the terms of the
contract would cause cancellation thereof, even without court intervention. In other words, it is not always necessary
for the injured party to resort to court for rescission of the contract.

Of course, it must be understood that the act of party in treating a contract as cancelled or resolved on account of infractions by the
other contracting party must be made known to the other and is always provisional, being ever subject to scrutiny and review by the
proper court. If the other party denies that rescission is justified, it is free to resort to judicial action in its own behalf, and bring the
matter to court. Then, should the court, after due hearing, decide that the resolution of the contract was not warranted, the responsible
party will be sentenced to damages; in the contrary case, the resolution will be affirmed, and the consequent indemnity awarded to th e
party prejudiced.

In other words, the party who deems the contract violated may consider it resolved or rescinded, and act accord ingly, without previous
court action, but it proceeds at its own risk . For it is only the final judgment of the corresponding court that will conclusively and
finally settle whether the action taken was or was not correct in law. But the law definitely doe s not require that the contracting party
who believes itself injured must first file suit and wait for a judgment before taking extrajudicial steps to protect its int erest.
Otherwise, the party injured by the other's breach will have to passively sit and watch its damages accumulate during the pendency of
the suit until the final judgment of rescission is rendered when the law itself requires that he should exercise due diligenc e to minimize
its own damages (Civil Code, Article 2203).

We see no conflict between this ruling and the previous jurisprudence of this Court invoked by respondent declaring that judicial
action is necessary for the resolution of a reciprocal obligation, 1 since in every case where the extrajudicial resolution is contested
only the final award of the court of competent jurisdiction can conclusively settle whether the resolution was proper or not. It is in this
sense that judicial action will be necessary, as without it, the extrajudicial resolution will remain contestable and subjec t to judicial
invalidation, unless attack thereon should become barred by acquiescence, estoppel or prescription.

Fears have been expressed that a stipulation providing for a unilateral rescission in case of breach of contract may render n ugatory the
general rule requiring judicial action (v. Footnote, Padilla, Civil Law, Civil Code Anno., 1967 ed. Vol. IV, page 140) but, as already
observed, in case of abuse or error by the rescinder the other party is not barred from questioning in court such abuse or er ror, the
practical effect of the stipulation being merely to transfer to the defaulter the initiative of instituting suit, instead of the rescinder.

In fact, even without express provision conferring the power of cancellation upon one contracting party, the Supreme Court of Spain,
in construing the effect of Article 1124 of the Spanish Civil Code (of which Article 1191 of our own Civil; Code is practically a
reproduction), has repeatedly held that, a resolution of reciprocal or synallagmatic contracts may be made extrajudicially unless
successfully impugned in court.

El articulo 1124 del Codigo Civil establece la facultad de resolver las obligaciones reciprocas para el caso de que
uno de los obligados no cumpliese lo que le incumbe, facultad que, segun jurisprudencia de este Tribunal, surge
immediatamente despuesque la otra parte incumplio su deber, sin necesidad de una declaracion previa de los
Tribunales. (Sent. of the Tr. Sup. of Spain, of 10 April 1929; 106 Jur. Civ. 897).

Segun reiterada doctrina de esta Sala, el Art. 1124 regula la resolucioncomo una "facultad" atribuida a la parte
perjudicada por el incumplimiento del contrato, la cual tiene derecho do opcion entre exigir el cumplimientoo la
resolucion de lo convenido, que puede ejercitarse, ya en la via judicial, ya fuera de ella, por declaracion del
acreedor, a reserva, claro es, que si la declaracion de resolucion hecha por una de las partes se impugna por la otra,
queda aquella sometida el examen y sancion de los Tribunale, que habran de declarar, en definitiva, bien hecha la
resolucion o por el contrario, no ajustada a Derecho. (Sent. TS of Spain, 16 November 1956; Jurisp. Aranzadi, 3,
447).

La resolucion de los contratos sinalagmaticos, fundada en el incumplimiento por una de las partes de su respect iva
prestacion, puedetener lugar con eficacia" 1. o Por la declaracion de voluntad de la otra hecha extraprocesalmente, si
no es impugnada en juicio luego con exito. y 2. 0 Por la demanda de la perjudicada, cuando no opta por el
cumplimientocon la indemnizacion de danos y perjuicios realmente causados, siempre quese acredite, ademas, una
actitud o conducta persistente y rebelde de laadversa o la satisfaccion de lo pactado, a un hecho obstativo que de un
modoabsoluto, definitivo o irreformable lo impida, segun el art. 1.124, interpretado por la jurisprudencia de esta
Sala, contenida en las Ss. de 12 mayo 1955 y 16 Nov. 1956, entre otras, inspiradas por el principio del Derecho
intermedio, recogido del Canonico, por el cual fragenti fidem, fides non est servanda. (Ss. de 4 Nov. 1958 y 22 Jun.
1959.) (Emphasis supplied).

49
In the light of the foregoing principles, and considering that the complaint of petitioner University made out a prima facie case of
breach of contract and defaults in payment by respondent ALUMCO, to the extent that the court below issued a writ of prelimin ary
injunction stopping ALUMCO's logging operations, and repeatedly denied its motions to lift the injunction ; that it is not denied that
the respondent company had profited from its operations previous to the agreement of 5 December 1964 ("Acknowledgment of Debt
and Proposed Manner of Payment"); that the excuses offered in the second amended answer, such as the misconduct of its former
manager Cesar Guy, and the rotten condition of the logs in private respondent's pond, which said respondent was in a better p osition to
know when it executed the acknowledgment of indebtedness, do not constitute on their face sufficient excuse for non-payment; and
considering that whatever prejudice may be suffered by respondent ALUMCO is susceptibility of compensation in damages, it
becomes plain that the acts of the court a quo in enjoining petitioner's measures to protect its int erest without first receiving evidence
on the issues tendered by the parties, and in subsequently refusing to dissolve the injunction, were in grave abuse of discre tion,
correctible by certiorari, since appeal was not available or adequate. Such injunction , therefore, must be set aside.

For the reason that the order finding the petitioner UP in contempt of court has open appealed to the Court of Appeals, and t he case is
pending therein, this Court abstains from making any pronouncement thereon.

WHEREFORE, the writ of certiorari applied for is granted, and the order of the respondent court of 25 February 1966, granting the
Associated Lumber Company's petition for injunction, is hereby set aside. Let the records be remanded for further proceedings
conformably to this opinion.

50
Republic of the Philippines
SUPREME COURT
Manila

FIRST DIVISION

G.R. No. L-39378 August 28, 1984

GENEROSA AYSON-SIMON, plaintiff-appellee,


vs.
NICOLAS ADAMOS and VICENTA FERIA, defendants-appellants.

Wenceslao V. Jarin for plaintiff-appellee.

Arnovit, Lacre & Adamos for defendants-appellants.

MELENCIO-HERRERA, J.:

Originally, this was an appeal by defendants from the Decision of the then Court of First Instance of Manila, Branch XX, in Civil Case
No. 73942, to the Court of Appeals (now Intermediate Appellate Court), which Tribunal, certified the case to us because the issue is a
pure question of law.

On December 13, 1943, Nicolas Adamos and Vicente Feria, defendants -appellants herein, purchased two lots forming part of the
Piedad Estate in Quezon City, with an area of approximately 56,395 square meters, from Juan Porciuncula. Sometime thereafter, the
successors-in-interest of the latter filed Civil Case No. 174 in the then Court of First Instance of Quezon City for annulment of the sale
and the cancellation of Transfer Certificate of Title No. 69475, which had been issued to defendants -appellants by virtue of the
disputed sale. On December 18, 1963, the Court rendered a Decision annulling the sale, cancelling TCT 69475, and a uthorizing the
issuance of a new title in favor of Porciuncula's successors-in-interest. The said judgment was affirmed by the Appellate Court and
had attained finality.

In the meantime, on May 29, 1946, during the pendency of the above-mentioned case, defendants-appellants sold to GENEROSA
Ayson Simon, plaintiff-appellee herein, the two lots in question for P3,800.00 each, plus an additional P800.00 paid subsequently for
the purpose of facilitating the issuance of new titles in GENEROSA's name. Due to the failure of defendants-appellants to comply
with their commitment to have the subdivision plan of the lots approved and to deliver the titles and possession to GENEROSA, the
latter filed suit for specific performance before the Court of First Instance of Qu ezon City on September 4, 1963 (Civil Case No. Q-
7275). On January 20, 1964, said Court ordered:

WHEREFORE, the plaintiff is declared entitled to a summary judgment and the defendants are hereby ordered to
have the subdivision of Lot No. 6, Block No. 2, and Lot No. 11, Block No. 3, relocated and resurveyed and the
subdivision plan approved and, if not possible for one reason or another, and in case of the absence or loss of said
subdivision, to cause and effect the subdivision of the said lots and deliver the titles and possession thereof to the
plaintiff. As to the claim and counterclaim for damages, let the hearing thereon be deferred until further move by the
parties. 1

However, since execution of the foregoing Order was rendered impossible because of t he judgment in Civil Case No. 174, which
earlier declared the sale of the lots in question by Juan Porciuncula to defendants -appellants to be null and void, GENEROSA filed, on
August 16, 1968, another suit in the Court of First Instance of Manila (Civil Case No. 73942) for rescission of the sale with damages.
On June 7, 1969, the Court rendered judgment, the dispositive portion of which reads:

WHEREFORE, judgment is rendered in favor of the plaintiff and against defendants, ordering the latter jointly and
severally, to pay the former the sum of P7,600.00, the total amount received by them from her as purchase price of
the two lots, with legal rate of interest from May 29, 1946 until fully paid; another sum of P800.00, with legal rate 6f
interest from August 1, 1966 until fully paid; the sum of P1,000 for attorney's fees; and the costs of this suit. 2

51
Hence, the appeal before the Appellate Court on the ground that GENEROSA's action had prescribed, considering that she had on ly
four years from May 29, 1946, the date of sale, within which to rescind said transaction, and that her complaint for specific
performance may be deemed as a waiver of her right to rescission since the fulfillment and rescission of an obligation are alternative
and not cumulative remedies.

The appeal is without merit. The Trial Court presided by then Judge, later Court of Appeals Associate Justice Luis B. Reyes, correctly
resolved the issues, reiterated in the assignments of error on appeal, as follows:

Defendants contend (1) that the fulfillment and the rescission of the obligation in reciprocal ones are alternative
remedies, and plaintiff having chosen fulfillment in Civil Case No. Q- 7525, she cannot now seek rescission; and (2)
that even if plaintiff could seek rescission the action to rescind the obligation has prescribed.

The first contention is without merit. The rule that the injured party can only choose between fulfillment and
rescission of the obligation, and cannot have both, applies when the obligation is possible of fulfillment. If, as in this
case, the fulfillment has become impossible, Article 1191 3 allows the injured party to seek rescission even after he
has chosen fulfillment.

True it is that in Civil Case No. 7275 the Court already rendered a Decision in favor of plaintiff, but since
defendants cannot fulfill their obligation to deliver the titles to and possession of the lots to plaintiff, the portion of
the decision requiring them to fulfill their obligations is without force and effect. Only that portion relative to the
payment of damages remains in the dispositive part of the decision, since in either case (fulfillment or rescission)
defendants may be required to pay damages.

The next question to determine is whether the action to rescind the obligation has prescribed.

Article 1191 of the Civil Code provides that the injured party may also seek rescission, if the fulfillment should
become impossible. The cause of action to claim rescission arises when the fulfillment of the obligation became
impossible when the Court of First Instance of Quezon City in Civil Case No. 174 declared the sale of the land to
defendants by Juan Porciuncula a complete nullity and ordered the cancellation of Transfer Certificate of Title No.
69475 issued to them. Since the two lots sold to plaintiff by defendants form part of the land involved in Civil Case
No. 174, it became impossible for defendants to secure and deliver the titles to and the possession of the lots to
plaintiff. But plaintiff had to wait for the finality of the decision in Civil Case No. 174, According to the certification
of the clerk of the Court of First Instance of Quezon City (Exhibit "E-2"), the decision in Civil Case No. 174 became
final and executory "as per entry of Judgment dated May 3, 1967 of the Court of Appeals." The action for rescission
must be commenced within four years from that date, May 3, 1967. Since the complaint for rescission was filed on
August 16, 1968, the four year period within which the action must be commenced had not expired.

Defendants have the obligation to return to plaintiff the amount of P7,600.00 representing the purchase price of the
two lots, and the amount of P800.00 which they received from plaintiff to expedite the issuance of titles but which
they could not secure by reason of the decision in Civil Case No. 174. Defendant has to pay interest at the legal rate
on the amount of P7,600.00 from May 29, 1946, when they received the amount upon the execution of the deeds of
sale, and legal interest on the P800.00 from August 1, 1966, when they received the same from plaintiff. 4

WHEREFORE, the appealed judgment of the former Court of First Instance of Manila, Branch XX, in Civil Case No. 73942, dated
June 7, 1969, is hereby affirmed in toto. Costs against defendants -appellants.

SO ORDERED.

52
Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. L-23707 January 17, 1968

JOSE A. V. CORPUS, petitioner,


vs.
HON. FEDERICO C. ALIKPALA, as Presiding Judge of Branch XXII, Court of First Instance of Manila and ACME
MANUFACTURING, CO., INC., respondents.

-----------------------------

G.R. No. L-23720 January 17, 1968

JOSE A. V. CORPUS, plaintiff-appellee,


vs.
ACME STEEL MANUFACTURING CO., INC., defendant-appellant.

Ciriaco C. Sayson and Associates for petitioner.


F. Garchitorina for respondents.
Ciriaco C. Sayson and Associates for plaintiff-appellee.
Jose W. Diokno for defendant-appellant.

REYES, J.B.L., J.:

In a suit for foreclosure of a real estate mortgage filed by Jose A. V. Corpus against Acme Steel Manufacturing Co., Inc. in the Court
of First Instance of Manila (docketed as Civil Case No. 56047) judgment was rendered on 26 May 1964 upon a compromise,
stipulating the following terms and conditions:

(1) That the parties hereto mutually agreed that the unpaid balance of the purchase price of the "Maria Dolores Building" now
known as the "Nestor de Castro Building" including the two (2) lots on which said building is erected, is ONE HUNDRED
THOUSAND PESOS (P100,000.00);

(2) That defendant will pay the said balance of P100,000.00 at any time between the period from the signing of this
compromise agreement up to December 15, 1965 subject to the following terms and conditions:

[a] The interest on the aforesaid balance of ONE HUNDRED THOUSAND PESOS (P100,000.00) for the period
from December 1, 1963 to December 15, 1964 at the rate of one (1%) per cent per month or a total of TWELVE
THOUSAND PESOS (P12,000.00) shall be paid in advance by the defendant as follows: P6,500.00 on May 30,
1964 and P6,000.00, on or before June 15, 1964: provided, however, that in case defendant will pay any sum on the
principal amount thereby correspondingly reducing the unpaid principal, the excess interest already paid shall
likewise be credited to the unpaid principal which will therefore be correspo ndingly reduced further.

[b] The interest for the period from December 16, 1964 to December 15, 1965 on whatever principal balance
remains, at the rate of one (1%) per cent per month shall likewise be paid in advance as follows: one -half () on or
before December 15, 1964 and the other one-half () on or before January 31, 1965 subject to the same proviso
stated in sub-paragraph (a) above;

(3) That the parties hereto waive their claim for attorney's fees and damages, each party to shoulder his own expense.

(4) That failure of the defendant to pay the plaintiff of any of the amounts stated above, the latter shall be entitled to th e
issuance of a writ of execution of the entire balance, including interests.

53
compliance with which was enjoined in the judgment.

The defendant Acme Steel Manufacturing Co., Inc. issued to plaintiff Corpus, which he accepted, two checks, one for P6,500.00,
dated 30 May 1964, and the other for P6,000.00, postdated 16 June 1964.

The first check was duly cashed, but the second check was dishonored for insufficiency of funds; whereupon, on 25 June 1964,
plaintiff Corpus, invoking the defendant's failure to pay on time the sum of P6,000.00 on 15 June 1964 moved for execution fo r the
entire balance. The defendant corporation opposed the motion on the ground that, in issuing checks after the said postdated check, it
failed to, detect, through oversight and mathematic error in computation, that its funds in the bank will run short by about a few
hundred pesos to cover the amount of the dishonored check; that immediately after it learned that the check was dishonored, it
informed the plaintiff that he may redeposit the check and the same would be honored; but instead of doing so, the plaintiff filed the
motion for execution; that the delayed payment was not a substantial violation of the compromise agreement because all that plaintiff
had to do was to redeposit the postdated check and, at any rate, the amount of P6,000.00 was only as advance payment of inter est.

After the parties had submitted their respective memoranda, the trial court, on 18 August 1964 ordered the issuance of a writ of
execution for the payment of P100,000.00 with interest of 1% per month from 16 December 1963 until fully paid.

On 26 August 1964, the defendant corporation filed a notice of appeal from the order of execution, dated 18 August 1964, to the
Supreme Court on questions of law, and an appeal bond and then a record on appeal, which was later amended. Corpus opposed th e
record on appeal and moved to dismiss the appeal; and the defendant opposed the motion to dismiss its appeal. In view of the steps
taken by the defendant to appeal, the trial court on 31 August 1964 ordered the suspension of the enforcement of the writ of execution.

On 7 October 1964, the trial Court allowed the appeal. Plaintiff Corpus moved for reconsideration but was denied on 17 October 1964.
The appeal is now before this Court as case No. L-23720. The amended record on appeal was forwarded to this Court by the Clerk of
Court of the Court of First Instance of Manila on 26 October 1964.

Meanwhile, on 23 October 1964, even before the transmittal of the amended record on appeal from the trial court, Corpus filed in this
Supreme Court a petition for certiorari, prohibition and mandamus, with preliminary injunction, praying for the nullification of the
allowance of the appeal (orders of 7 and 17 October 1964); that the respondent judge be prohibited from allowing any further, appeal
from the decision and the order of execution and to command him to give due cou rse to the writ of execution. This petition is docketed
in this Court as case No. L-23707 (Corpus vs. Judge Alikpala, et al.,)

The procedural issue in these cases is whether, under the facts, the order of execution is appealable or not or, whether some discretion
may yet be exercised by the Court below. If no discretion is left to be exercised, the issuance of the order of execution is ministerial
and non-appealable; otherwise, it is appealable. If ministerial, issuance of execution is compellable by mandamus; if
discretionary, mandamus will not lie.

In opposing the execution, the defendant corporation alleged that plaintiff accepted the postdated check, even before the app roval of
the compromise agreement, but that due to the defendant's oversight and mathe matical error in computation in issuing other checks,
the postdated check was dishonored for insufficiency of funds at the time of its presentment, which occurred after the approv al by the
court of the compromise.

The defendant company relies on Cotton vs. Almeda-Lopez, CA-G.R. No. 22875-R, June 1958, which was affirmed by the Supreme
Court in case L-14113, 19 September 1961, to support its view that the trial court could still exercise some discretion before issuing
the order of execution, but the facts therein are dissimilar to the case at bar. In the Cotton case, the compromise agreement was not
complete, definite or certain and the obligation of the defendant to perform certain acts seemed (the stipulations were not c lear) to
depend upon some conditions precedent; thus, the compromise agreement in the aforesaid case provided for a continuance of the
administration of certain properties by the defendant subject to his payment of encumbrances thereon, while at the same time
providing for the turn-over of the properties upon the expiration of certain contracts to sell, without stating in the compromise
agreement itself the dates of expiration of the said contracts; and providing also for the submission of receipts of payment "called for
in the contracts" to the judge. There was, therefore, need for the exercise of discretion in the interpretation of the terms of the
compromise agreement and the determination by the judge of whether the conditions precedent were complied with or not was nee ded
before execution could issue.

In the present case, the terms of the compromise agreement are complete, definite and certain and no suspensive condition is attached
to any of them. Therefore, insofar as the judgment upon the compromise is concerned, there was nothing left for judicial
determination, unlike that in the Cotton case.

54
The case before us is an appeal from the order of execution, not an appeal from the judgment. And the general rule is that an order of
execution is not appealable; otherwise, a case could never en d (2 Moran 360, 1963 Ed). Two exceptions to this rule were announced
in Castro vs. Surtida, 87 Phil. 166, namely, where the order of execution varies the tenor of the judgment and when the terms of the
judgment are not very clear and there is room for interpretation. The present case does not fall under either exception since the order
of execution does not vary the tenor of the judgment, but is in accord therewith; and the terms of the judgment, as previously stated,
are clear and definite; hence, the general rule of non-appealability applies.

But even if the order to issue execution were really appealable, the appeal (L-23720) is untenable. As we view the compromise
agreement, the advance payment of the interest was plainly the main consideration for the c reditor's assent to delay payment of the
balance of the purchase price (P100,000.00) up to December 15, 1965, despite previous default of the defendant -appellant. On that
basis, the dishonor of the check representing the advance interest resulted in the fo rfeiture of the period given to pay the principal, as
prescribed by Article 1198, paragraph 4 of the Civil Code of the Philippines (R.A. No. 386), which is of the following tenor:

Art. 1198 The debtor shall lose every right to make use of the period:

xxx xxx xxx

(4) When the debtor violates any undertaking in consideration of which the creditor agreed to the period.1wph1.t

The foregoing is the applicable legal rule, and not Article 1191, since in asking for execution, the app ellee was not seeking the
resolution of the compromise but its enforcement. The appellee's acceptance of the check had suspended his action to enforce the
payment of the balance of the principal; but it was not a true payment until the value of the check was realized (Civ. C. Art. 1249).
Since the check was dishonored, the appellant automatically became in default and lost the right to the period for paying the principal
of P100,000.00.

The claim that the acceptance of the check in question novated the orig inal compromise is untenable. The check was issued as a means
to comply with the provisions of the compromise; hence, there was no incompatibility from which a novation could possibly be
inferred (Inchausti vs. Yulo, 24 Phil. 978; Pablo vs. Sapungan, 71 Ph il. 145; Ramos vs. Gibbon, 67 Phil. 371; Zapanta vs. De
Rotaeche, 21 Phil. 154).

Nor can we agree to the proposition that the failure to provide funds for paying the value of the check at maturity constitut ed merely
an unsubstantial breach. Whether a breach is substantial or not depends on the attendant circumstances. Here the appellant's failure to
provide adequate funds to back its check resulted not only in a delay in payment, but in positive injury to the credit of the appellee,
who had indorsed the check to a stranger. Appellant had the duty to foresee such eventuality, since the check issued by it was
negotiable. That appellee the next day provided the requisite funds could not cure the injury. Further, after its check was d ishonored,
appellant could not expect or demand that appellee should redeposit the check once more. What assurance did the latter have that it
would not be dishonored again?

Also, whether the appellant's breach was substantial or not is primarily a question addressed to the discretio n of the trial court; and in
deciding that execution should issue, the Court a quo was clearly intimating that it regarded the breach as substantial. We find that
conclusion to be neither legally erroneous nor in abuse of discretion.

The trial court therefore, did not err in issuing the order of execution; it, however, gravely abused its discretion, or exceeded its
jurisdiction, in allowing the appeal from the same order.

For the foregoing reasons, the order to issue execution in case L-23720 is affirmed, and in case L-23707, the writs prayed for in the
petition are granted. Costs in both cases against Acme Steel Manufacturing Co., Inc. So ordered.

55
Republic of the Philippines
SUPREME COURT
Manila

SECOND DIVISION

G.R. No. L-55138 September 28, 1984

ERNESTO V. RONQUILLO, petitioner,


vs.
HONORABLE COURT OF APPEALS AND ANTONIO P. SO, respondents.

Gloria A. Fortun for petitioner.

Roselino Reyes Isler for respondents.

CUEVAS, J.:

This is a petition to review the Resolution dated June 30, 1980 of the then Court of Appeals (now the Intermediate Appellate Court) in
CA-G.R. No. SP-10573, entitled "Ernesto V. Ronquillo versus the Hon. Florellana Castro -Bartolome, etc." and the Order of said court
dated August 20, 1980, denying petitioner's motion for recon sideration of the above resolution.

Petitioner Ernesto V. Ronquillo was one of four (4) defendants in Civil Case No. 33958 of the then Court of First Instance of Rizal (now
the Regional Trial Court), Branch XV filed by private respondent Antonio P. So, on July 23, 1979, for the collection of the sum of
P17,498.98 plus attorney's fees and costs. The other defendants were Offshore Catertrade Inc., Johnny Tan and Pilar Tan. The amount
of P117,498.98 sought to be collected represents the value of the checks iss ued by said defendants in payment for foodstuffs delivered
to and received by them. The said checks were dishonored by the drawee bank.

On December 13, 1979, the lower court rendered its Decision 1 based on the compromise agreement submitted by the parties, the
pertinent portion of which reads as follows:

1. Plaintiff agrees to reduce its total claim of P117,498-95 to only P11,000 .00 and defendants agree to acknowledge the
validity of such claim and further bind themselves to initially pay out of th e total indebtedness of P10,000.00 the amount
of P55,000.00 on or before December 24, 1979, the balance of P55,000.00, defendants individually and jointly agree to
pay within a period of six months from January 1980, or before June 30, 1980; (Emphasis supp lied)

xxx xxx xxx

4. That both parties agree that failure on the part of either party to comply with the foregoing terms and conditions, the
innocent party will be entitled to an execution of the decision based on this compromise agreement and the defaulting party
agrees and hold themselves to reimburse the innocent party for attorney's fees, execution fees and other fees related with
the execution.

xxx xxx xxx

On December 26, 1979, herein private respondent (then plaintiff filed a Motion for Execution on t he ground that defendants failed to
make the initial payment of P55,000.00 on or before December 24, 1979 as provided in the Decision. Said motion for execution was
opposed by herein petitioner (as one of the defendants) contending that his inability to ma ke the payment was due to private respondent's
own act of making himself scarce and inaccessible on December 24, 1979. Petitioner then prayed that private respondent be ord ered to
accept his payment in the amount of P13,750.00. 2

During the hearing of the Motion for Execution and the Opposition thereto on January 16, 1980, petitioner, as one of the four defendants,
tendered the amount of P13,750.00, as his prorata share in the P55,000.00 initial payment. Another defendant, Pilar P. Tan, o ffered to
pay the same amount. Because private respondent refused to accept their payments, demanding from them the full initial installment of
P 55,000.00, petitioner and Pilar Tan instead deposited the said amount with the Clerk of Court. The amount deposited was sub sequently
withdrawn by private respondent. 3

56
On the same day, January 16, 1980, the lower court ordered the issuance of a writ of execution for the balance of the initial amount
payable, against the other two defendants, Offshore Catertrade Inc. and Johnny Tan 4 who did not pay their shares.

On January 22, 1980, private respondent moved for the reconsideration and/or modification of the aforesaid Order of execution and
prayed instead for the "execution of the decision in its entirety against all defendants, joint ly and severally." 5 Petitioner opposed the
said motion arguing that under the decision of the lower court being executed which has already become final, the liability o f the four
(4) defendants was not expressly declared to be solidary, consequently each defendant is obliged to pay only his own pro-rata or 1/4 of
the amount due and payable.

On March 17, 1980, the lower court issued an Order reading as follows:

ORDER

Regardless of whatever the compromise agreement has intended the payment whether jointly or individually, or
jointly and severally, the fact is that only P27,500.00 has been paid. There appears to be a non -payment in
accordance with the compromise agreement of the amount of P27,500.00 on or before December 24, 1979. The
parties are reminded that the payment is condition sine qua non to the lifting of the preliminary attachment and the
execution of an affidavit of desistance.

WHEREFORE, let writ of execution issue as prayed for

On March 17, 1980, petitioner moved for the reconsideration of the abo ve order, and the same was set for hearing on March 25,1980.

Meanwhile, or more specifically on March 19, 1980, a writ of execution was issued for the satisfaction of the sum of P82,500. 00 as
against the properties of the defendants (including petitioner), "singly or jointly hable." 6

On March 20, 1980, Special Sheriff Eulogio C. Juanson of Rizal, issued a notice of sheriff's sale, for the sale of certain fu rnitures and
appliances found in petitioner's residence to satisfy the sum of P82,500.00. The public sale was scheduled for April 2, 1980 at 10:00
a.m. 7

Petitioner's motion for reconsideration of the Order of Execution dated March 17, 1980 which was set for hearing on March 25, 1980,
was upon motion of private respondent reset to April 2, 1980 at 8:30 a.m. Realizing the actual threat to property rights poised by the re-
setting of the hearing of s motion for reconsideration for April 2, 1980 at 8:30 a.m. such that if his motion for reconsidera tion would be
denied he would have no more time to obtain a writ from the appellate court to stop the scheduled public sale of his personal properties
at 10:00 a.m. of the same day, April 2, 1980, petitioner filed on March 26, 1980 a petition for certiorari and prohibition with the then
Court of Appeals (CA-G.R. No. SP-10573), praying at the same time for the issuance of a restraining order to stop the public sale. He
raised the question of the validity of the order of execution, the writ of execution and the notice of public sale of his pro perties to satisfy
fully the entire unpaid obligation payable by all of the four (4) defendants, when the lower court's decision based on the compromise
agreement did not specifically state the liability of the four (4) defendants to be solidary.

On April 2, 1980, the lower court denied petitioner's motion for reconsideration but the scheduled public sale in that same day did not
proceed in view of the pendency of a certiorari proceeding before the then Court of Appeals.

On June 30, 1980, the said court issued a Resolution, the pertinent portion of which reads as follows:

This Court, however, finds the present petition to have been filed prematurely. The rule is that before a petition for
certiorari can be brought against an order of a lower court, all remedies available in that court must first be exhausted.
In the case at bar, herein petitioner filed a petition without waiting for a resolution of the Court on the motion for
reconsideration, which could have been favorable to the petitioner. The fact that the hearing of the motion for
reconsideration had been reset on the s ame day the public sale was to take place is of no moment since the motion for
reconsideration of the Order of March 17, 1980 having been seasonably filed, the scheduled public sale should be
suspended. Moreover, when the defendants, including herein petit ioner, defaulted in their obligation based on the
compromise agreement, private respondent had become entitled to move for an execution of the decision based on the
said agreement.

57
WHEREFORE, the instant petition for certiorari and prohibition with preliminary injunction is hereby denied due
course. The restraining order issued in our resolution dated April 9, 1980 is hereby lifted without pronouncement as
to costs.

SO ORDERED.

Petitioner moved to reconsider the aforesaid Resolution alleging that on April 2, 1980, the lower court had already denied the motion
referred to and consequently, the legal issues being raised in the petition were already "ripe" for determination. 8 The said motion was
however denied by the Court of Appeals in its Resolution d ated August 20, 1980.

Hence, this petition for review, petitioner contending that the Court of Appeals erred in

(a) declaring as premature, and in denying due course to the petition to restrain implementation of a writ of execution issue d at variance
with the final decision of the lower court filed barely four (4) days before the scheduled public sale of the attached movable pro perties;

(b) denying reconsideration of the Resolution of June 30, 1980, which declared as premature the filing of the petition, although there is
proof on record that as of April 2, 1980, the motion referred to was already denied by the lower court and there was no more motion
pending therein;

(c) failing to resolve the legal issues raised in the petition and in not declaring the lia bilities of the defendants, under the final decision
of the lower court, to be only joint;

(d) not holding the lower court's order of execution dated March 17, 1980, the writ of execution and the notice of sheriff's sale, executing
the lower court's decision against "all defendants, singly and jointly", to be at variance with the lower court's final decision which did
not provide for solidary obligation; and

(e) not declaring as invalid and unlawful the threatened execution, as against the properties of pet itioner who had paid his pro-rata share
of the adjudged obligation, of the total unpaid amount payable by his joint co -defendants.

The foregoing assigned errors maybe synthesized into the more important issues of

1. Was the filing of a petition for certiorari before the then Court of Appeals against the Order of Execution issued by the lower court,
dated March 17, 1980, proper, despite the pendency of a motion for reconsideration of the same questioned Order?

2. What is the nature of the liability of the defendants (including petitioner), was it merely joint, or was it several or solidary?

Anent the first issue raised, suffice it to state that while as a general rule, a motion for reconsideration should precede r ecourse to
certiorari in order to give the trial court an opportunity to correct the error that it may have committed, the said rule is not absolutes 9 and
may be dispensed with in instances where the filing of a motion for reconsideration would serve no useful purpose, such as wh en the
motion for reconsideration would raise the same point stated in the motion 10 or where the error is patent for the order is
void 11 or where the relief is extremely urgent, as in cases where execution had already been ordered 12 where the issue raised is one
purely of law. 13

In the case at bar, the records show that not only was a writ of execution issued but petitioner's properties were already sc heduled to be
sold at public auction on April 2, 1980 at 10:00 a.m. The records likewise show that petitioner's motion for reconsideration of the
questioned Order of Execution was filed on March 17, 1980 and was set for hearing on March 25, 1980 at 8:30 a.m., but upon mo tion
of private respondent, the hearing was reset to April 2, 1980 at 8:30 a.m., the very same clay when pe titioner's properties were to be sold
at public auction. Needless to state that under the circumstances, petitioner was faced with imminent danger of his propertie s being
immediately sold the moment his motion for reconsideration is denied. Plainly, urgenc y prompted recourse to the Court of Appeals and
the adequate and speedy remedy for petitioner under the situation was to file a petition for certiorari with prayer for restr aining order to
stop the sale. For him to wait until after the hearing of the motio n for reconsideration on April 2, 1980 before taking recourse to the
appellate court may already be too late since without a restraining order, the public sale can proceed at 10:00 that morning. In fact, the
said motion was already denied by the lower court in its order dated April 2, 1980 and were it not for the pendency of the petition with
the Court of Appeals and the restraining order issued thereafter, the public sale scheduled that very same morning could have proceeded.

The other issue raised refers to the nature of the liability of petitioner, as one of the defendants in Civil Case No. 33958, that is whether
or not he is liable jointly or solidarily.
58
In this regard, Article 1207 and 1208 of the Civil Code provides

Art. 1207. The concurrence of two or more debtors in one and the same obligation does not imply that each one of the
former has a right to demand, or that each one of the latter is bound to render, entire compliance with the prestation.
Then is a solidary liability only when the obligation expressly so states, or when the law or the nature of the obligation
requires solidarity.

Art. 1208. If from the law,or the nature or the wording of the obligation to which the preceding article refers the
contrary does not appear, the credit or debt shall be presumed to be divided into as many equal shares as there are
creditors and debtors, the credits or debts being considered distinct from one another, subject to the Rules of Court
governing the multiplicity of quits.

The decision of the lower court based on the parties' compromise agreement, provides:

1. Plaintiff agrees to reduce its total claim of P117,498.95 to only P110,000.00 and defendants agree to acknowledge
the validity of such claim and further bind themselves to initially pay out of the tota l indebtedness of P110,000.00, the
amount of P5,000.00 on or before December 24, 1979, the balance of P55,000.00, defendants individually and
jointly agree to pay within a period of six months from January 1980 or before June 30, 1980. (Emphasis supply)

Clearly then, by the express term of the compromise agreement and the decision based upon it, the defendants obligated themselv es to
pay their obligation "individually and jointly".

The term "individually" has the same meaning as "collectively", "separately" , "distinctively", respectively or "severally". An agreement
to be "individually liable" undoubtedly creates a several obligation, 14 and a "several obligation is one by which one individual binds
himself to perform the whole obligation. 15

In the case of Parot vs. Gemora 16 We therein ruled that "the phrase juntos or separadamente or in the promissory note is an express
statement making each of the persons who signed it individually liable for the payment of the fun amount of the obligation contained
therein." Likewise in Un Pak Leung vs. Negorra 17 We held that "in the absence of a finding of facts that the defendants made
themselves individually hable for the debt incurred they are each liable only for one -half of said amount

The obligation in the case at bar being described as "individually and jointly", the same is therefore enforceable against one of the
numerous obligors.

IN VIEW OF THE FOREGOING CONSIDERATIONS, the instant petition is hereby DISMISSED. Cost against petitioner.

SO ORDERED.

59
Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. L-17079 January 29, 1962

BRAULIO CASTILLO, ET AL., plaintiffs,


vs.
SIMPLICIA NAGTALON, defendants,

SIMPLICIA NAGTALON, movant-appellee,


vs.
DESIDERIO SEGUNDO, ET AL., respondents-appellants.

Mariano H. Rabago for movant-appellee.


Antonio A. Foronda for respondents-appellants.

BARRERA, J.:

On November 11, 1952, a decision was rendered in Civil Case No. 529 of the Court of First Instance of Ilocos Norte (Castillo, et al. v.
Nagtalon, et al.), the dispositive portion of which reads:

FOR ALL THE FOREGOING CONSIDERATIONS, the Court renders judgment declaring the plaintiffs owners pro-
indiviso of the land described in the complaint with the right to possess it and that the defend ants are ordered to restore the
possession of the eastern portion thereof to the plaintiffs, to pay damages in the amount of P210.00 every year since 1943
until they deliver the possession of said portion to the plaintiffs, and to pay the costs.

On appeal by the defendants, the Court of Appeals affirmed said decision in all respects, with costs against the defendants -appellants
therein.

The decision having become final, a writ of execution was issued under date of April 27, 1957, against all the defendants, twelve in
number, to satisfy the damages and costs awarded therein which, together with the expenses incidental to such execution, amou nted to
P3,401.00. Consequently, ten parcels of land, three of which belonged exclusively to herein appellee Simplicia Nagtalon, one of the
defendants, were levied upon and sold for P3,401.00 at the execution sale conducted on July 8, 1957. The certificate of sale was issued
on the same day to Martiniano Factor, the purchaser, who was a third party not involved in the original case.

On July 8, 1958, the last day of the one-year period for redemption, appellee Simplicia Nagtalon who, as already stated, was one of the
judgment debtors and the exclusive owner of three of the ten parcels of land sold in public auction, deposited with the Deputy
Provincial Sheriff the sum of P317.44 representing 1/12 of the consideration of the sale plus 1% interest thereon, and prayed for the
issuance of the corresponding deed of redemption as to the three parcels of land belonging to her. The pu rchaser, however, opposed
the same on the ground that the amount thus tendered did not cover the full redemption price of the said three parcels of lan d which
were auctioned separately at P1,240.00, P21.00, and P30.00, respectively or a total of P1,291.00 (see parcels 1, 2 and 4 of the
certificate of sale executed by the Sheriff, pp. 27-28, Record on Appeal). In view of said opposition Nagtalon filed a motion with the
court to compel the Sheriff to issue the deed of redemption prayed for.

On August 26, 1958, the court, acting on said motion, issued an order holding that the liability of the defendants, as appearing in the
dispositive part of the executed decision, was only joint and that the tender by movant Nagtalon of the sum corresponding to 1/12 of
the purchase price was sufficient to redeem her properties sold at public auction. Thus, the Deputy Provincial Sheriff was directe d to
execute and deliver to movant Nagtalon the certificate of redemption covering the three parcels of land owned by her. The pur chaser's
and the Sheriff's motion for reconsideration having been denied, they instituted the instant appeal. 1

The only question to be determined in this appeal is whether the lower court committed an error in holding movant's tender of the sum
of P317.44 as valid redemption of the three parcels of land owned by her, and in ordering the issuance of the corresponding certificate
of redemption therefor.

60
It is the contention of the appellee Nagtalon, and upheld by the lower court that her obligation under the judgment is merely "joint", as
the dispositive portion of the decision ordered, aside from the restoration of the land involved in the controversy, the payment by the
defendants of "damages in the amount of P210.00 every year since 1943 until they deliver t he possession of said portion to the
plaintiffs, and to pay the cost." Appellants sustain on the other hand, that although defendants' liability was not specifica lly declared to
be joint and several in the said dispositive part nevertheless, considering th at in the body of the decision the defendants were in effect
pronounced guilty of a tortuous act, their obligation constituted an exception to the general rule and made their liability t herefore
solidary.2

While this might have been a proper argument in a timely motion for modification of the judgment, it loses its efficacy at this stage of
the proceedings when the decision has already become final and executory. As held by this Court, the portion of the decision that
becomes the subject of execution is that ordained or decreed in the dispositive portion thereof. 3 In the absence therein of express
declaration to the contrary, the liability of the defendants in this case must be taken as did the lower court correctly to be joint
only and not solidary.

The directive, however, to execute the deed of redemption of the three parcels of land belonging to the movant, upon payment of h er
pro-rata share of the obligation, is not in order. It appears from the Sheriff's Certificate of Sale ( Pp. 27-28, Record on Appeal) that
said three parcels of land were bidded and so sold for the sums of P1,240.00, P21.00 and P30.00, respectively, or for a total amount of
P1,291.00. Although it may be contended that the sale of these properties to satisfy movant's 1/12 share of th e obligation, which was
only P317.44 might have been improper, yet by not objecting to the sale of her properties at the opportune time, and by offer ing
instead to redeem the same, she impliedly admitted the regularity of the Sheriff's sale and estopped he r from impugning later its
validity on this ground alone (See Tiaoqui v. Chavez, L-10085, May 20, 1957.) Her claim made for the first time at this late hour
when her offer of redemption is opposed, that she had no knowledge of the purchase price of her parcels of land, for the reason that
she was not furnished with a copy of the certificate of sale, and that the same was not registered with the registry of deeds , is of no
avail. There is no pretense that the provisions of Section 16, Rule 9, of the Rules of Court, regarding notice of the execution sale, were
not duly observed. Appellee, as judgment debtor whose properties were levied upon and made subject to such public sale, could have
attended the sale, directed the conduct thereof, 4 and even prevented the disposition of her properties insofar as it exceeded the amount
due from her individually as one of the judgment debtors. Having failed to do so, she cannot later be heard to complain solely on this
ground, against the regularity thereof5 which becomes binding on her.1wph1.t

In connection with appellee's contention that the sale was unregistered, it may be stated that while under Section 24, Rule 39, of the
Rules of Court, a duplicate of the certificate of sale must be filed by the executing officer in the office of the register of deeds of the
province, non-compliance therewith does not necessarily affect the validity of the sale. Execution sales made in accordance with the
provisions of Section 19, Rule 39 of said Rules, are considered final and any irregularity committed in the course thereof will not
vitiate their validity, unless it appears that injury has been caused thereby. 6 In the instant case, there is no showing tha t appellee's
alleged lack of knowledge of the exact purchase price of the prop erties was attributable to the executing officer's failure to register the
sale and, even assuming, arguendo, that it is, such situation could have been averted had appellee availed of the privilege g ranted her
under Section 19 of Rule 39.

The procedure for the redemption of the properties sold at execution sale is prescribed in Section 26, Rule 39, of the Rules of Court.
Thereunder, the judgment debtor or redemptioner may redeem the property from the purchaser, within 12 months after the sale, by
paying the purchaser the amount of his purchase, with 1% per month interest thereon up to the time of redemption, together with the
taxes paid by the purchaser after the purchase, if any. In other words, in the redemption of properties sold at an execution sale, the
amount payable is no longer the judgment debt but the purchase price. Considering that appellee tendered payment only of the sum of
P317.44, whereas the three parcels of land she was seeking to redeem were sold for the sums of P1,240.00, P21.00, and P30.00,
respectively, the aforementioned amount of P317.44 is insufficient to effectively release the properties. However, as the ten der of
payment was timely made and in good faith in the interest of justice we incline to give the appellee opportunity to comp lete the
redemption purchase of the three parcels, as provided in Section 26, Rule 39 of the Rules of Court, with and executory. In th is wise,
justice is done to the appellee who had been made to pay more than her share in the judgment, without doing an in justice to the
purchaser who shall get the corresponding interest of 1% per month on the amount of his purchase up to the time of redemption .

Should appellee fail to complete the redemption price as herein indicated, the sheriff may either release to appellee, the two smaller
lots and return to her the balance of her deposit, or return the entire deposit without releasing any of the three lots, as t he appellee may
elect.

As thus modified, the decision of the lower court is hereby affirmed, without pronounce ment as to costs. So ordered.

Bengzon, C.J., Padilla, Bautista Angelo, Labrador, Concepcion, Reyes, J.B.L., Paredes, Dizon and De Leon, JJ., concur.

61
Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. L-16968 July 31, 1962

PHILIPPINE NATIONAL BANK, plaintiff-appellee,


vs.
CONCEPCION MINING COMPANY, INC., ET AL., defendants-appellants.

Ramon B. de los Reyes for plaintiff-appellee.


Demetrio Miraflor for defendants-appellants.

LABRADOR, J.:

Appeal from a judgment or decision of the Court of First Instance of Manila, Hon. Gustavo Victoriano, presiding, sentencing
defendants Concepcion Mining Company and Jose Sarte to pay jointly and severally to the plaintiff the amount of P7,197.26 wit h
interest up to September 29, 1959, plus a daily interest of P1.3698 thereafter up to the time the amount is fully paid, plus 10% of the
amount as attorney's fees, and costs of this suit.

The present action was instituted by the plaintiff to recover from the defendants the face of a promissory note the pertinent part of
which reads as follows:

Manila, March 12, 1954

NINETY DAYS after date, for value received, I promise to pay to the order of the Philippine National Bank . . . .

In case it is necessary to collect this note by or through an attorney -at-law, the makers and indorsers shall pay ten percent (10%) of the
amount due on the note as attorney's fees, which in no case shall be less than P100.00 exclusive of all costs and fees allowe d by law as
stipulated in the contract of real estate mortgage. Demand and Dishonor Waived. Holder may accept partial payment reserving his
right of recourse again each and all indorsers.

(Purpose mining industry)


CONCEPCION MINING COMPANY, INC.,
By:
(Sgd.) VICENTE LEGARDA
President
(Sgd.) VICENTE LEGARDA
(Sgd.) JOSE S SARTE

"Please issue check to


Mr. Jose S. Sarte"

Upon the filing of the complaint the defendants presented their answer in which they allege that the co -maker the promissory note Don
Vicente L. Legarda died on February 24, 1946 and his estate is in the process of judicial determination in Special Proceedings No.
29060 of the Court of First Instance of Manila. On the basis of this allegation it is prayed, as a special defense, that the estate of said
deceased Vicente L. Legarda be included as party-defendant. The court in its decision ruled that the inclusion of said defendant is
unnecessary and immaterial, in accordance with the provisions of Article 1216 of the Deny Civil Code and section 17 (g) of th e
Negotiable Instruments Law.

A motion to reconsider this decision was denied and thereupon defendants presented a petition for relief, asking that the effects of the
judgment be suspended for the reason that the deceased Vicente L. Legarda should have been included as a party -defendant and his
liability should be determined in pursuance of the provisions of the promissory note. This motion for relief was also denied, hence
defendant appealed to this Court.

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Section 17 (g) of the Negotiable Instruments Law provides as follows:

SEC. 17. Construction where instrument is ambiguous. Where the language of the instrument is ambiguous or there are
omissions therein, the following rules of construction apply:

xxx xxx xxx

(g) Where an instrument containing the word "I promise to pay" is signed by two or more persons, they are deemed to be
jointly and severally liable thereon.

And Article 1216 of the Civil Code of the Philippines also provides as follows:

ART. 1216. The creditor may proceed against any one of the solidary debtors or some of the m simultaneously. The demand
made against one of them shall not be an obstacle to those which may subsequently be directed against the others so long as
the debt has not been fully collected.

In view of the above quoted provisions, and as the promissory no te was executed jointly and severally by the same parties, namely,
Concepcion Mining Company, Inc. and Vicente L. Legarda and Jose S. Sarte, the payee of the promissory note had the right to h old
any one or any two of the signers of the promissory note res ponsible for the payment of the amount of the note. This judgment of the
lower court should be affirmed.

Our attention has been attracted to the discrepancies in the printed record on appeal. We note, first, that the names of the defendants,
who are evidently the Concepcion Mining Co., Inc. and Jose S. Sarte, do not appear in the printed record on appeal. The title of the
complaint set forth in the record on appeal does not contain the name of Jose Sarte, when it should, as two defendants are na med in the
complaint and the only defense of the defendants is the non -inclusion of the deceased Vicente L. Legarda as a defendant in the action.
We also note that the copy of the promissory note which is set forth in the record on appeal does not contain the name of the third
maker Jose S. Sarte. Fortunately, the brief of appellee on page 4 sets forth said name of Jose S. Sarte as one of the co -maker of the
promissory note. Evidently, there is an attempt to mislead the court into believing that Jose S. Sarte is no one of the co-makers. The
attorney for the defendants Atty. Jose S. Sarte himself and he should be held primarily responsible for the correctness of th e record on
appeal. We, therefore, order the said Atty. Jose S. Sarte to explain why in his record on appeal his own name as one of the defendants
does not appear and neither does his name appear as one of the co -signers of the promissory note in question. So ordered.

Bengzon, C.J., Padilla, Bautista Angelo, Concepcion, Barrera, Paredes, Dizon, Regala and Makali ntal, JJ., concur.
Reyes, J.B.L., J., took no part.

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