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VOL. 73, OCTOBER 29, 1976 637


Occena vs. Jabson

*
No. L-443349. October 29, 1976.

JESUS V. OCCEÑA and EFIGENIA C. OCCEÑA,


petitioners, vs. HON. RAMON V. JABSON, Presiding
Judge of the Court of First Instance of Rizal, Branch XXVI;
COURT OF APPEALS and TROPICAL HOMES, INC.,
respondents.

Obligations and contracts; Extinguishment of; Difficulty of


service; Difficulty of service authorizes release of obligor but does
not authorizes courts to modify or revise contract between the
parties.—Respondent’s complaint seeks not release form the
subdivision contract but that the court “render judgment
modifying the terms and conditions of the contract. . . by fixing
the proper shares that should pertain to the herein parties out of
the gross proceeds from the sales of subdivided lots of subject
subdivision.” Article 1267 of the Civil Code does not grant the
courts this authority to remake, modify or revise the contract or to
fix the division of shares between the parties as contractually
stipulated with the force of law between the parties, so as to
substitute its own terms for those covenant by the parties
themselves.
Same; Same; Same; Absence of stipulation for non-
performance in case of contingencies.—Without article 1267,
respondent would remain bound by its contract under the
therefore prevailing doctrine that performance therewith is not
excused “by the fact that the contract turns out to be hard and
improvident, profitable or unexpectedly burdensome,” since in
case a party desires to be excused from performance in the event
of such contingencies arising, it is his duty to provide therefore in
the contract.
Actions; Cause of action; Difficulty of service does not
constitute a sufficient cause of action for modification of contract.
—Respondent’s complaint for modification of contract manifestly
has no basis in law and therefore states no cause of action. Under
the particular allegations of respondent’s complaint and the

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circumstances therein averred, the court cannot even in equity


grant the relief sought.
Certiorari; When available.—Respondent cites the general
rule that an erroneous order denying a motion to dismiss is
interlocutory

_______________

* FIRST DIVISION.

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638 SUPREME COURT REPORT ANNOTATED

Occena vs. Jabson

and should not be corrected by certiorari but by appeal in due


course. This case however manifestly falls within the recognized
exception that certiorari will lie when appeal would not prove to
be a speedy and adequate remedy. Where the remedy of appeal
would not promptly relieve petitioners from the injurious effects
of the patently erroneous order maintaining respondent’s baseless
action and compelling petitioners needlessly to go through a
protracted trial and clogging the court dockets by one more futile
case, certiorari will issue as the plain, speedy and adequate
remedy of an aggrieved party.

APPEAL from the resolution of the Court of Appeals.

The facts are stated in the opinion of the Court.


     Occeña Law Office for petitioners.
     Serrano, Diokno & Serrano for respondents.

TEEHANKEE, J.:

The Court reverses the Court of Appeals’ appealed


resolution. The Civil Code authorizes the release of an
obligor when the service has become so difficult as to be
manifestly beyond the contemplation of the parties but
does not authorize the courts to modify or revise the
subdivision contract between the parties or fix a different
sharing ratio from that contractually stipulated with the
force of law between the parties. Private respondent’s
complaint for modification of the contract manifestly has no
basis in law and must therefore be dismissed for failure to
state a cause of action.

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On February 25, 1975 private respondent Tropical


Homes, Inc. filed a complaint for modification of the terms
and conditions of its subdivision contract with petitioners
(landowners of a 55,330 square meter parcel of land in
Davao City), making the following allegations:

“That due to the increase in price of oil and its derivatives and the
concomitant worldwide spiralling of prices, which are not within
the control of plaintiff, of all commodities including basis raw
materials required for such development work, the cost of
development has risen to levels which are unanticipated,
unimagined and not within the remotest contemplation of the
parties at the time said agreement was entered into and to such a
degree that the conditions and factors which formed the original
basis of said contract, Annex ‘A’, have been totally changed;
“That further performance by the plaintiff under the contract,

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VOL. 73, OCTOBER 29, 1976 639


Occena vs. Jabson

Annex ‘A’, will result in situation where defendants would be


unjustly enriched at the expense of the plaintiff; will cause an
inequitous distribution of proceeds from the sales of subdivided
lots in manifest contravention of the original essence of the
agreement; and will actually result in the unjust and intolerable
exposure of plaintiff to implacable losses, all such situations
resulting in an unconscionable, unjust and immoral situation
contrary to and in violation of the primordial concepts of good
faith, fairness and equity which should pervade all human
relations.”

Under the subdivision contract, respondent “guaranteed


(petitioners as landowners) as the latter’s fixed and sole
share and participation an amount equivalent to forty
(40%) per cent ofall cash receipts from the sale of the
subdivision lots”.
Respondent prayed of the Rizal court of first instance
that “after due trial, this Honorable Court render judgment
modifying the terms and conditions of the contract x x x by
fixing the proper shares that should pertain to the herein
parties out of the gross proceeds from the sales of
subdivided lots of subject subdivision”.
Petitioners moved to dismiss the complaint principally
for lack of cause of action, and upon denial thereof and of
reconsideration by the lower court elevated the matter on
certiorari to respondent Court of Appeals.

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Respondent court in its questioned resolution of June 28,


1976 set aside the preliminary injunction previously issued
by it and dismissed petition on the ground that under
Article 1267 of the Civil Code which provides that

“ART. 1267. When the service has become so difficult as to be


manifestly beyond the contemplation of the parties, 1
the obligor
may also be released therefrom, in whole or in part.”

“x x x a positive right is created in favor of the obligor to be


released from the performance of an obligation in full or in
part

_______________

1 Other Civil Code articles cited by respondent court as justifying the


complaint were Articles 19 and 1159 which read:
“ART. 19. 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.”

x x x      x x x      x x x

“ART. 1159. Obligations arising from contracts have the force of law
between the contracting parties and should be complied with in good
faith.”

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640 SUPREME COURT REPORT ANNOTATED


Occena vs. Jabson

when its performance ‘has become so difficult as to be


manifestly beyond the contemplation of the parties’.”
Hence, the petition at bar wherein petitioners insist that
the worldwide increase in prices cited by respondent does
not constitute a sufficient cause of action for modification of
the subdivision contract. After receipt of respondent’s
comment, the Court in its Resolution of September 13, 1976
resolved to treat the petition as a special civil action and
declared the case submitted for decision.
The petition must be granted.
While respondent court correctly cited in its decision the
Code Commission’s report giving the rationale for Article
1267 of the Civil Code, to wit,

“The general rule is that impossibility of performance releases the


obligor. However, it is submitted that when the service has
become so difficult as to be manifestly beyond the contemplation

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of the parties, the court should be authorized to release the obligor


in whole or in part. The intention of the parties should govern and
if it appears that the service turns out to be so difficult as have
been beyond their contemplation, it would be doing violence 2
to
that intention to hold the obligor still responsible. x x x,”

it misapplied the same to respondent’s complaint.


If respondent’s complaint were to be released from
having to comply with the subdivision contract, assuming it
could show at the trial that the service undertaken
contractually by it had “become so difficult as to be
manifestly beyond the contemplation of the parties”, then
respondent court’s upholding of respondent’s complaint and
dismissal of the petition would be justifiable under the
cited codal article. Without said article, respondent would
remain bound by its contract under the theretofore
prevailing doctrine that performance therewith is not
excused “by the fact that the contract turns out to be hard
and improvident, unprofitable or impracticable, ill advised
or even foolish,3
or less profitable, or unexpectedly
burdensome”, since in case a party desires to be excused
from performance in the event of such contingencies
arising, it is his duty to provide therefor in the contract.

_______________

2 At p. 113, cited in Vol IV, Padilla’s Civil Code, 6th Ed., p. 476;
emphasis supplied.
3 Reyes vs. Caltex (Phil.) Inc., 84 Phil. 654.

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VOL. 73, OCTOBER 29, 1976 641


Occena vs. Jabson

But respondent’s complaint seeks not release from the


subdivision contract but that the court “render judgment
modifying the terms and conditions of the contract . , . by
fixing the proper shares that should pertain to the herein
parties out of the gross proceeds from the sales of
subdivided lots of subject subdivision”. The cited article
does not grant the courts this authority to remake, modify
or revise the contract or to fix the division of shares
between the parties as contractually stipulated with the
force of law between the parties, so as to substitute its own
terms for those covenanted by the parties themselves.
Respondent’s complaint for modification of contract
manifestly has no basis in law and therefore states no
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cause of action. Under the particular allegations of


respondent’s complaint and the circumstances therein
averred, the courts cannot even in equity grant the relief
sought.
A final procedural note. Respondent cites the general
rule that an erroneous order denying a motion to dismiss is
interlocutory and should not be corrected by certiorari but
by appeal in due course. This case however manifestly falls
within the recognized exception that certiorari will lie
when appeal
4
would not prove to be a speedy and adequate
remedy. Where the remedy of appeal would not, as in this
case, promptly relieve petitioners from the injurious effects
of the patently erroneous order maintaining respondent’s
baseless action and compelling petitioners needlessly to go
through a protracted trial and clogging the court dockets by
one more futile case, certiorari will issue as the plain,
speedy and adequate remedy of an aggrieved party.
ACCORDINGLY, the resolution of respondent appellate
court is reversed and the petition for certiorari is granted
and private respondent’s complaint in the lower court is
ordered dismissed for failure to state a sufficient cause of
action. With costs in all instances against private
respondent.

          Makasiar, Muñoz Palma, Concepcion, Jr., and


Martin, JJ, concur.

Resolution reversed and petition granted and private


respondent’s complaint ordered dismissed for failure to
state a sufficient cause of action.

_______________

4 Cf. 3 Moran’s Rules of Court 1970 Ed., pp. 164-165, and cases cited.

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642 SUPREME COURT REPORT ANNOTATED


Occena vs.Jabson

Notes. Difficulty of service.—It is elemental that the


law requires parties to do what they have agreed to do. If a
party charges himself with an obligation possible to be
performed, he must abide by it unless performance is
rendered impossible by the act of God, the law, or the other
party. A showing of mere inconvenience, unexpected
impediments, or increased expenses is not enough. Equity
cannot relieve from bad bargains simply because they are

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such. So one must answer in damages where the


impossibility is only so in fact. The foregoing are familiar
principles to be found in the American and English law of
contracts. The Civil law in the subject of obligations is not
essentially different. Article 1272 of the Civil Code provides
“Impossible things or services cannot be the subject matter
of contracts.” And article 1184 of the Code provides: “The
debtor shall also be relieved from obligations which consist
in the performance of an act if fulfillment of the
undertaking becomes legally or physically impossible.” May
one obligate himself to do something which, when
accomplished, will prove to be dangerous to life and
property? We doubt it. Take the contract in question as an
example. It was a general contract of the form used by the
central and various proprietors of sugar cane fields. It was
intended to be limited in particular application to
haciendas where not impeded by physical impossibility.The
contract was qualified by an implied condition which, if
given practical effect, results in absolving the central from
its promise Not to sanction an execution to the general rule
would run counter to public policy and law by forcing the
performance of a contract undesirable and harmful. (Castro
vs. Longa, 89 Phil. 581, 591),

——o0o——

643

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