Beruflich Dokumente
Kultur Dokumente
[1]
Exhibit A.
[2]
Exhibit B.
[3]
Branch 108, presided by Judge Priscilla Mijares.
[4]
Rollo, pp.6-8.
[5]
Articles 1305, 1308, Civil Code. Serra vs. Court of Appeals, 229 SCRA
60 (1994).
[6]
Phil. Commercial International Bank vs. Court Bank vs. Court of
Appeals, 255 SCRA 299 (1996).
[7]
Philippine Airlines, Inc. vs. Court of Appeals, 255 SCRA 48 (1996);
Telengtan Brothers & Sons, Inc. vs. Court of Appeals, 236 SCRA 617
(1994).
[8]
Telengtan Brothers & Sons, Inc. vs. Court of Appeals, supra,
Philippine American General Insurance Co., Inc. vs. Sweet Lines, Inc.,
212 SCRA 194 (1992); Pan American Airways vs. Rapadas, 209 SCRA 67
(1992); Saludo, Jr. vs. Court of Appeals, 207 SCRA 498 (1992).
[9]
Serra vs. Court of Appeals, supra; Philippine American General
Insurance Co., Inc. vs. Sweet Lines, Inc., supra; Saludo, Jr. vs. Court of
Appeals, supra.
[10]
Angeles vs. Calasanz, 135 SCRA 323 (1985).
[11]
Article 1370, Civil Code. Salvatierra vs. Court of Appeals, 261 SCRA 45
(1996); Abella vs. Court of Appeals 257 SCRA 482 (1996); Syquia vs.
Court of Appeals, 217 SCRA 624 (1993); Lufthansa German Airlines vs.
Court of Appeals, 208 SCRA 708 (1992); Papa vs. Alonzo, 198 SCRA 564
(1991).
[12]
Leveriza vs. Intermediate Appellate Court, 157 SCRA 283 (1988).
[13]
Exhibit B.
[14]
Rollo, p. 12.
[15]
Id., at 13.
[16]
IV Tolentino, Commentaries and Jurisprudence on the Civil Code of
the Philippines, 1991 ed., p. 113.
[17]
TSN, March 10, 1994, pp. 15-16.
[18]
Article 1159, Civil Code.
[19]
Article 19, Civil Code.
[20]
Article 19, in relation to Article 21, id.
[21]
Article 2217, id.
[22]
Article 2229, id.
[23]
Article 2208 (1), id
ROSENDO O. CHAVES, PLAINTIFF-APPELLANT, VS. FRUCTUOSO
GONZALES, DEFENDANT-APPELLEE.
G.R. No. L-27454 | 1970-04-30
D E C I S I O N
This is a direct appeal by the party who prevailed in a suit for breach of
oral contract and recovery of damages but was unsatisfied with the
decision rendered by the Court of First Instance of Manila, in its Civil
Case No. 65138, because it awarded him only P31.10 out of his total
claim of P690.00 for actual, temperate and moral damages and
attorney's fees.
"On August 29, 1964, the plaintiff had his typewriter repaired by
Freixas Business Machines, and the repair Job cost him a total of
P89.85, including labor and materials (Exhibit C).
"On August 23, 1965, the plaintiff commenced this action before the
City Court of Manila, demanding from the defendant the payment of
P90.00 as actual and compensatory damages, P100.00 for temperate
damages, P500.00 for moral damages, and P500.00 as attorney's fees.
"In his answer as well as in his testimony given before this court, the
defendant made no denials of the facts narrated above, except the
claim of the plaintiff that the typewriter was delivered to the de-
fendant through a certain Julio Bocalin, which the defendant denied
allegedly because the typewriter was delivered to him personally by
the plaintiff.
"SO ORDERED."
Because the plaintiff appealed directly to the Supreme Court and the
appellee did not interpose any appeal, the facts, as found by the trial
court, are now conclusive and non-reviewable.[1]
The appealed judgment states that the "plaintiff delivered to the
defendant ……..a portable typewriter for routine cleaning and
servicing"; that the "defendant was not able to finish the job after
some time despite repeated reminders made by the plaintiff"; that the
"defendant merely gave assurances, but failed to comply with the
same"; and that "after getting exasperated with the delay of the repair
of the typewriter" , the plaintiff went to the house of the defendant
and asked for its return, which, was done. The inferences derivable
from these findings of fact, are that the appellant and the appellee had
a perfected contract for cleaning and servicing a typewriter; that they
intended that the defendant was to finish it at some future time
although such time was not specified; and that such time had passed
without the work having been accomplished, for the defendant
returned the typewriter cannibalized and unrepaired, which in itself is a
breach of his obligation, without demanding that he should be given
more time to finish the job, or compensation for the work he had
already done. The time for compliance having evidently expired, and
there being a breach of contract by non-performance, it was academic
for the plaintiff to have first petitioned the court to fix a period for the
performance of the contract before filing his complaint in this case.
Defendant cannot invoke Article 1197 of the Civil Code for he virtually
admitted non-performance by returning the typewriter that he was
obliged to repair in a non-working condition, with essential parts
missing. The fixing of a period would thus be a mere formality and
would serve no purpose than to delay (of. Tiglao, et al. v. Manila
Railroad Co., 98 Phil. 181).
[1] Perez v. Araneta, L-18414, 15 July 1968, 24 SCRA 43; Cebu Portland
Cement Co. v. Mun. of Naga, L-24116-17, 22 August 1968, 24 SCRA 708.
FIRST DIVISION
[G.R. No. 117190. January 2, 1997]
JACINTO TANGUILIG doing business under the name and style J.M.T.
ENGINEERING AND GENERAL
MERCHANDISING, petitioner, vs. COURT OF APPEALS and
VICENTE HERCE JR., respondents.
DECISION
BELLOSILLO, J.:
This case involves the proper interpretation of the contract entered
into between the parties.
Sometime in April 1987 petitioner Jacinto M. Tanguilig doing
business under the name and style J. M. T. Engineering and General
Merchandising proposed to respondent Vicente Herce Jr. to construct a
windmill system for him. After some negotiations they agreed on the
construction of the windmill for a consideration of P60,000.00 with
a one-year guaranty from the date of completion and acceptance by
respondent Herce Jr. of the project. Pursuant to the agreement
respondent paid petitioner a down payment of P30,000.00 and an
installment payment of P15,000.00, leaving a balance of P15,000.00.
On 14 March 1988, due to the refusal and failure of respondent to
pay the balance, petitioner filed a complaint to collect the amount. In
his Answer before the trial court respondent denied the claim saying
that he had already paid this amount to the San Pedro General
Merchandising Inc. (SPGMI) which constructed the deep well to which
the windmill system was to be connected. According to respondent,
since the deep well formed part of the system the payment he
tendered to SPGMI should be credited to his account by
petitioner. Moreover, assuming that he owed petitioner a balance
of P15,000.00, this should be offset by the defects in the windmill
system which caused the structure to collapse after a strong wind hit
their place.[1]
Petitioner denied that the construction of a deep well was included
in the agreement to build the windmill system, for the contract price
of P60,000.00 was solely for the windmill assembly and its installation,
exclusive of other incidental materials needed for the project. He also
disowned any obligation to repair or reconstruct the system and
insisted that he delivered it in good and working condition to
respondent who accepted the same without protest. Besides, its
collapse was attributable to a typhoon, a forcemajeure, which relieved
him of any liability.
In finding for plaintiff, the trial court held that the construction of
the deep well was notpart of the windmill project as evidenced clearly
by the letter proposals submitted by petitioner to respondent.[2] It
noted that "[i]f the intention of the parties is to include the
construction of the deep well in the project, the same should be stated
in the proposals.In the absence of such an agreement, it could be
safely concluded that the construction of the deep well is not a part of
the project undertaken by the plaintiff."[3] With respect to the repair of
the windmill, the trial court found that "there is no clear and
convincing proof that the windmill system fell down due to the defect
of the construction."[4]
The Court of Appeals reversed the trial court. It ruled that the
construction of the deep well was included in the agreement of the
parties because the term "deep well" was mentioned in both
proposals. It also gave credence to the testimony of respondent's
witness Guillermo Pili, the proprietor of SPGMI which installed the
deep well, that petitioner Tanguilig told him that the cost of
constructing the deep well would be deducted from the contract price
of P60,000.00. Upon these premises the appellate court concluded
that respondent's payment of P15,000.00 to SPGMI should be applied
to his remaining balance with petitioner thus effectively extinguishing
his contractual obligation.However, it rejected petitioner's claim
of force majeure and ordered the latter to reconstruct the windmill in
accordance with the stipulated one-year guaranty.
His motion for reconsideration having been denied by the Court of
Appeals, petitioner now seeks relief from this Court. He raises two
issues: firstly, whether the agreement to construct the windmill system
included the installation of a deep well and, secondly,whether
petitioner is under obligation to reconstruct the windmill after it
collapsed.
We reverse the appellate court on the first issue but sustain it on
the second.
The preponderance of evidence supports the finding of the trial
court that the installation of a deep well was not included in the
proposals of petitioner to construct a windmill system for
respondent. There were in fact two (2) proposals: one dated 19 May
1987 which pegged the contract price at P87,000.00 (Exh. "1"). This
was rejected by respondent. The other was submitted three days later,
i.e., on 22 May 1987 which contained more specifications but proposed
a lower contract price of P60,000.00 (Exh. "A"). The latter proposal
was accepted by respondent and the construction immediately
followed. The pertinent portions of the first letter-proposal (Exh. "1")
are reproducedhereunder -
In connection with your Windmill System and Installation, we would
like to quote to you as follows:
One (1) Set - Windmill suitable for 2 inches diameter deepwell, 2 HP,
capacity, 14 feet in diameter, with 20 pieces blade, Tower 40 feet high,
including mechanism which is not advisable to operate during extra-
intensity wind. Excluding cylinder pump.
UNIT CONTRACT PRICE P87,000.00
The second letter-proposal (Exh. "A") provides as follows:
In connection with your Windmill system Supply of Labor Materials and
Installation, operated water pump, we would like to quote to you as
follows -
One (1) set - Windmill assembly for 2 inches or 3 inches deep-well
pump, 6 Stroke, 14 feet diameter, 1-lot blade materials, 40 feet Tower
complete with standard appurtenances up to Cylinder pump, shafting
U.S. adjustable International Metal.
One (1) lot - Angle bar, G. I. pipe, Reducer Coupling, Elbow Gate valve,
cross Tee coupling.
One (1) lot - Float valve.
One (1) lot - Concreting materials foundation.
F. O. B. Laguna
Contract Price P60,000.00
Notably, nowhere in either proposal is the installation of a deep well
mentioned, even remotely. Neither is there an itemization or
description of the materials to be used in constructing the deep
well. There is absolutely no mention in the two (2) documents that a
deep well pump is a component of the proposed windmill system. The
contract prices fixed in both proposals cover only the features
specifically described therein and no other.While the words "deep
well" and "deep well pump" are mentioned in both, these do not
indicate that a deep well is part of the windmill system. They merely
describe the type of deep well pump for which the proposed windmill
would be suitable. As correctly pointed out by petitioner, the
words "deep well" preceded by the prepositions "for" and "suitable
for" were meant only to convey the idea that the proposed windmill
would be appropriate for a deep well pump with a diameter of 2 to 3
inches. For if the real intent of petitioner was to include a deep well in
the agreement to construct a windmill, he would have used instead the
conjunctions "and" or "with." Since the terms of the instruments are
clear and leave no doubt as to their meaning they should not be
disturbed.
Moreover, it is a cardinal rule in the interpretation of contracts
that the intention of the parties shall be accorded primordial
consideration[5] and, in case of doubt, their contemporaneous and
subsequent acts shall be principally considered.[6] An examination of
such contemporaneous and subsequent acts of respondent as well as
the attendant circumstances does not persuade us to uphold him.
Respondent insists that petitioner verbally agreed that the contract
price of P60,000.00 covered the installation of a deep well pump. He
contends that since petitioner did not have the capacity to install the
pump the latter agreed to have a third party do the work the cost of
which was to be deducted from the contract price. To prove his point,
he presented Guillermo Pili of SPGMI who declared that petitioner
Tanguilig approached him with a letter from respondent Herce Jr.
asking him to build a deep well pump as "part of the price/contract
which Engineer (Herce) had with Mr. Tanguilig."[7]
We are disinclined to accept the version of respondent. The claim of
Pili that Herce Jr. wrote him a letter is unsubstantiated. The alleged
letter was never presented in court by private respondent for reasons
known only to him. But granting that this written communication
existed, it could not have simply contained a request for Pili to install a
deep well; it would have also mentioned the party who would pay for
the undertaking. It strains credulity that respondent would keep silent
on this matter and leave it all to petitioner Tanguilig to verbally convey
to Pili that the deep well was part of the windmill construction and that
its payment would come from the contract price of P60,000.00.
We find it also unusual that Pili would readily consent to build a
deep well the payment for which would come supposedly from the
windmill contract price on the mere representation of petitioner,
whom he had never met before, without a written commitment at
least from the former. For if indeed the deep well were part of the
windmill project, the contract for its installation would have been
strictly a matter between petitioner and Pili himself with the former
assuming the obligation to pay the price. That it was respondent Herce
Jr. himself who paid for the deep well by handing over to Pili the
amount of P15,000.00 clearly indicates that the contract for the deep
well was not part of the windmill project but a separate agreement
between respondent and Pili. Besides, if the price of P60,000.00
included the deep well, the obligation of respondent was to pay the
entire amount to petitioner without prejudice to any action that
Guillermo Pili or SPGMI may take, if any, against the latter. Significantly,
when asked why he tendered payment directly to Pili and not to
petitioner, respondent explained, rather lamely, that he did it "because
he has (sic) the money, so (he) just paid the money in his
possession."[8]
Can respondent claim that Pili accepted his payment on behalf of
petitioner? No.While the law is clear that "payment shall be made to
the person in whose favor theobligation has been constituted, or
his successor in interest, or any person authorizedto receive it,".[9] It
does not appear from the record that Pili and/or SPGMI was so
authorized.
Respondent cannot claim the benefit of the law concerning
"payments made by a third person."[10] The Civil Code provisions do not
apply in the instant case because no creditor-debtor relationship
between petitioner and Guillermo Pili and/or SPGMI has been
established regarding the construction of the deep well. Specifically,
witness Pili did not testify that he entered into a contract with
petitioner for the construction of respondent's deep well. If SPGMI
was really commissioned by petitioner to construct the deep well, an
agreement particularly to this effect should have been entered into.
The contemporaneous and subsequent acts of the parties
concerned effectively belie respondent's assertions. These
circumstances only show that the construction of the well by SPGMI
was for the sole account of respondent and that petitioner merely
supervised the installation of the well because the windmill was to be
connected to it. There is no legal nor factual basis by which this Court
can impose upon petitioner an obligation he did not expressly assume
nor ratify.
The second issue is not a novel one. In a long line of cases[11] this
Court has consistently held that in order for a party to claim exemption
from liability by reason of fortuitous event under Art. 1174 of the Civil
Code the event should be the sole andproximate cause of the loss or
destruction of the object of the contract. In Nakpil vs. Court of
Appeals,[12] four (4) requisites must concur: (a) the cause of the breach
of the obligation must be independent of the will of the debtor; (b) the
event must be either unforeseeable or unavoidable; (c) the event must
be such as to render it impossible for the debtor to fulfill his obligation
in a normal manner; and, (d) the debtor must be free from any
participation in or aggravation of the injury to the creditor.
Petitioner failed to show that the collapse of the windmill was due
solely to a fortuitous event. Interestingly, the evidence does not
disclose that there was actually a typhoon on the day the windmill
collapsed. Petitioner merely stated that there was a "strong wind." But
a strong wind in this case cannot be fortuitous - unforeseeable nor
unavoidable. On the contrary, a strong wind should be present in
places where windmills are constructed, otherwise the windmills
will not turn.
The appellate court correctly observed that "given the newly-
constructed windmill system, the same would not have collapsed had
there been no inherent defect in it which could only be attributable to
the appellee."[13] It emphasized that respondent had in hisfavor the
presumption that "things have happened according to the ordinary
course of nature and the ordinary habits of life."[14] This presumption
has not been rebutted by petitioner.
Finally, petitioner's argument that private respondent was already
in default in the payment of his outstanding balance of P15,000.00 and
hence should bear his own loss, is untenable. In reciprocal obligations,
neither party incurs in delay if the other does not comply or is not
ready to comply in a proper manner with what is incumbent upon
him.[15]When the windmill failed to function properly it became
incumbent upon petitioner to institute the proper repairs in
accordance with the guaranty stated in the contract. Thus, respondent
cannot be said to have incurred in delay; instead, it is petitioner who
should bear the expenses for the reconstruction of the
windmill. Article 1167 of the Civil Code is explicit on this point that if a
person obliged to do something fails to do it, the same shall be
executed at his cost.
WHEREFORE, the appealed decision is MODIFIED. Respondent
VICENTE HERCE JR. is directed to pay petitioner JACINTO M.
TANGUILIG the balance of P15,000.00 with interest at the legal rate
from the date of the filing of the complaint. In return, petitioner is
ordered to "reconstruct subject defective windmill system, in
accordance with the one-year guaranty"[16]and to complete the same
within three (3) months from the finality of this decision.
SO ORDERED.
Padilla, (Chairman), Vitug, Kapunan, and Hermosisima, JJ., concur.
[1]
TSN, 20 December 1988, pp. 10-12.
[2]
Exh. "A" and Exh. "1."
[3]
Rollo, p. 36.
[4]
Id., p. 37.
[5]
Kasilag v. Rodriguez, 69 Phil. 217 (1939).
[6]
Art. 1371, New Civil Code; GSIS v. Court of Appeals, G.R. No. 52478, 30
October 1986, 145 SCRA 311; Serrano v. Court of Appeals, No. L-
46357, 9 October 1985, 139 SCRA 179.
[7]
TSN, 13 April 1989, pp. 18-19.
[8]
TSN, 13 April 1989, p. 22.
[9]
Art. 1240, New Civil Code.
[10]
Arts. 1236 and 1237, New Civil Code .
[11]
Nakpil v. Court of Appeals, Nos. L-47851, L-47863, L-47896, 3 October
1986, 144 SCRA
596; NationalPower Corporation v. Court of Appeals, G.R. Nos. L-
47379 and 47481, 16 May 1988, 161 SCRA 334;
National Power Corporation v. Court of Appeals, G.R. Nos. 103442-
45, 21 May 1993, 222 SCRA 415.
[12]
See Note 11.
[13]
Rollo, p. 44.
[14]
Sec. 3, par. (y), Rule 131, Revised Rules on Evidence.
[15]
Art. 1169, last par., New Civil Code.
[16]
See CA Decision, p. 7; Rollo, p. 27.
PARAS, J.:
This is an appeal from the Order dated December 1, 1977 in Civil Case
No. Q-22850 of the Court of First Instance of Rizal, Branch XVI sitting
in Quezon City, dismissing the complaint upon motion filed by
defendants-appellees (private respondents herein) just after answer
on grounds of res judicata, improper remedy, failure to raise the issue
of inadequacy of price as shocking to conscience, and being moot and
academic. Their motion for reconsideration having been denied,
plaintiffs-appellants (Petitioners herein) went on appeal to the
respondent Court of Appeals, docketed as CA-G.R. No. 63718-R.
By virtue of a resolution of the Court of Appeals in said case, acting on
a "Motion to Transfer Case to the Supreme Court" filed by plaintiffs-
appellants, as the issues in the present case are all purely legal, this
case was forwarded to Us for consideration as a Petition for Review
on Certiorari.
This case originated from the decision of the Court of First Instance of
Rizal Branch VII, Pasay City in Civil Case No. 3066-P entitled Guillermo
N. Pablo and Primitive C. Cruz vs. Estate of deceased Socorro
Ramosfinding in favor of the plaintiffs and which was affirmed by the
Court of Appeals on appeal in CA-G.R. No. 49848-R.
The complaint in Civil Case No. 3066-P, Court of First Instance of Rizal,
Branch VII sitting in Pasay City, alleged the following material
statements.
2. On July 31, 1957, plaintiffs entered into an 'Agreement'
with Pedro del Rosario/Del Rosario Realty, whereby the
latter agreed to sell on installment basis a parcel of land
covered by a subdivision Transfer Certificate of Title No.
34610, more particularly described as follows:
A parcel of land (Lot 3, Block 1 of the subdivision plan Psd-
5073, being a portion of Lot 614-C (LRC) described on plan
Psd. 1879, G.L.R.O. Record No. 5975, situated in the District of
Bago Bantay, Quezon City. Bounded on the NE., along line 1-2
by Lot 4; along line 2-3 by Lot 3, both of Block 1; along line 3-4
by Road Lot 2; along line 4-5 by Lot 7; and along line 5-1 by
Lot 6, both of Block 1, all the subdivision plan. Beginning at a
point marked "1" on plan, being S. 3 deg. 23'E., 978.72 m.
from L. M. 9, Piedad Estate, ... containing an area of FOUR
HUNDRED ONE (401) Square Meters.
which said contract and all rights and interests appertaining
thereto belonging to Pedro del Rosario/Del Rosario Realty
were transferred and assigned by the latter to Socorro A.
Ramos on June 16, 1959 under an Assignment of Right
whereby, Socorro A. Ramos obtained Transfer Certificate of
Title No. 44501 under her name.
3. Plaintiffs, having paid in full the amount of P8,020.00,
selling price stated in the foregoing Agreement, Socorro A.
Ramos executed a Deed of Absolute Sale of the land on
March 28, 1963 in their favor, a copy of which, is integrated
hereto as Annex A, subject to the condition that plaintiffs
will not register this deed for purposes of transferring the
title of the said property to them and in their names until
and after the final determination of the case between,
Rodrigo Enriquez, et al., and Socorro A. Ramos, presently
pending before the Supreme Court under G.R. No. L-16797,
and the subsequent release thereof by said Rodrigo
Enriquez, et al.
4. Unknown to the plaintiff, as Socorro A. Ramos did not
disclose to them, is the fact that when the foregoing deed of
sale was executed, it had already an existing mortgage in
favor of Rodrigo Enriquez and that the latter had already
filed an action for foreclosure of the same in the Court of
First Instance of Rizal on April 29, 1959, which is the subject
of appeal in the aforecited case, and the further fact, that
when the same deed was executed by Socorro A. Ramos on
March 28, 1963, she already knew that the Supreme Court
case referred to had already been decided as her lawyer,
Atty. Vicente K. Aranda received the decision rendered
therein on March 1, 1963, whereby she lost the case, and
consequently, the transfer of the land to Rodrigo Enriquez-
all wanton acts of dishonesty and bad faith.
5. Till her death on November 10, 1965, Socorro A. Ramos did
not to disclose the plaintiffs the foregoing facts nor what
happened to said case, so much so that upon verification
later with the Register of of Quezon City, plaintiffs
discovered that the land sold to them by Soccoro A. Ramos
had been foreclosed and titled under the of Rodrigo
Enriquez, who later on, sold the same to Maria F. Villadolid.
6. The acts imputed to Socorro A. Ramos in pars. 3, 4 and
5 supra, and the unjust refusal Of her children-heirs,
defendants herein, to substitute the lost land from the mass
estate of the deceased Socorro A. Ramos or to pay its
equivalent market value to the plaintiffs in spite of repeated
verbal and written demands, resulted in Plaintiffs' loss of
not less than P30,000.00, representing the present market
value of the said land, which, the defendants are duty bound
to compensate plaintiffs by way of actual damages.
7. The same acts, as well as the consquences thereof,caused
and still is, causing plaintiffs mental anguish, wounded
feelings, serious anxiety and the like which, defendants are
under obligation to compensate plaintiffs the sum of
P40,000.00, by way of moral damages.
8. And, by way of example for the public good, defendants,
are likewise, under obligation to compensate plaintiffs the
sum of P15, 000.00 by way of exemplary damages.
9. By reason of the unjust refusal of the defendants to
return to the plaintiffs the present market price of the lost
land or to substitute the same with another land from the
mass estate left by the late Socorro A. Ramos, plaintiffs
were compelled to file the instant suit and in so doing was
constrained to seek the services of their undersigned
counsel for P10,000.00, which, defendants should be
compelled to pay plus expenses of litigation as may be duly
proved and costs.
WHEREFORE, it is respectfully prayed that judgment be
rendered in favor of the plaintiffs and against the
defendants directing the latter to pay to the former the
following:
a) Actual damages in the sum of P30,000.00 or to
direct the defendants to execute a "Deed of
Absolute Sale" of a land with the same value from
the mass estate left by the deceased Socorro A.
Ramos in favor of the plaintiffs;
b) Moral damages in the sum of P40,000.00;
c) Exemplary damages in the sum of Pl5,000.00;
d) Attorney's fees in the sum of P10,000.00;
e) Expenses of tigation as may be duly provided
;and
f) Costs of the instant suit. (Emphasis supplied
Record on Appeal in CA-G.R. No. 49848-R, pp. 2-6).
Pursuant to said decision, the Ex-Officio Sheriff of Quezon City levied
upon and sold at execution 18 parcels of land, each with an average
area of 500 square meters, more or less or having a total area of
10,588 square meters covered by separate Transfer Certificates of
Title of the Registry of Deeds of Quezon City in the name of Socorro
A. Ramos to defendants-spouses (respondents herein) Guillermo N.
Pablo and Primitive C. Cruz as the sole bidders for one lump sum bid
price of P 56,885.22. Said amount constituted the entire judgment
debt of Socorro Ramos including the expenses of sale as reflected in
the "Minutes of the Public Auction Sale." The certificate of sale was
issued after a "Motion for the Confirmation of the Sheriff's Final Deed
of Sale and for the issuance of Writ of Possession" was filed
unopposed. Subsequently, the Register of Deeds (one of the
respondents herein) cancelled the certificates of title in the name of
Socorro Ramos and issued new Transfer Certificates of Title in the
name of spouses Guillermo Pablo and Primitiva Cruz.
Such facts having been brought to the knowledge of the heirs of the
deceased Socorro A. Ramos, they filed an action in the Court of First
Instance of Quezon City to declare as null and void 1) the public
auction sale or execution sale held by the Sheriff of Quezon City 2) the
minutes of the Public Auction Sale 3) the Certificate of Sale 4) the
Sheriff's Final Deed of Sale and 5) the Transfer Certificate of Title
issued in the name of spouses Pablo, alleging among other things that
the aforementioned transactions or events were in gross violation of
plaintiffs' rights as the lump sum sale of the 18 parcels of land was
contrary to the provision of Sec. 21, Rule 39 of the Rules of Court
which requires the separate bidding and individual sale of real estate
properties levied upon on execution and of Sec. 27, Rule 39 which
requires the statement of the price paid for each distinct lot or parcel.
Plaintiffs alleged that a larger amount could have been realized from
a sale in parcels or that a sale of less than the whole of the 18 parcels
would have brought sufficient proceeds to satisfy the debt. Plaintiffs
alleged that they were not given the required notice as surviving heirs
of their deceased mother, thereby preventing them from taking part
therein at least to the extent of directing the order in which the said
18 parcels of land shall be sold to their advantage as permitted by the
rules. Defendants filed their answer setting forth as special and
affirmative defenses lack of cause of action, lack of jurisdiction,
estoppel and multiplicity of suits. Thereafter, defendants filed their
motion to dismiss which was set for hearing. Defendants formally
offered their documentary exhibits for admission to the trial court.
After hearing, the trial court dismissed the case, hence this appeal by
plaintiffs assigning errors in their brief, to wit:
I
THE TRIAL COURT ERRED IN HOLDING THAT THE PRINCIPLE
OF RES JUDICATA WAS APPLICABLE IN THE INSTANT CASE.
II
GRANTING EN ARGUENDO THAT THE PRINCIPLE OF RES
JUDICATA IS APPLICABLE HAD IT BEEN RAISED, THE TRIAL
COURT ERRED IN IMPROPERLY CONSIDERING THE SAME AS
IT WAS NOT RAISED.
III
THE TRIAL COURT ERRED IN HOLDING THAT PLAINTIFFS'
"REMEDY IS NOT ANOTHER ACTION BUT A MOTION WITH
THE COURT OF ORIGIN ATTACKING THE EXECUTION SALE."
IV
THE TRIAL COURT ERRED IN CONSIDERING THE [I]N THE
INSTANT CASE IT IS NOT MERELY THE DECISION OF COURT
OF FIRST INSTANCE WHICH IS SOUGHT TO BE ANNULLED
BUT ALSO THE DECISION OF THE HIGHER COURT ...."
V
GRANTING EN ARGUENDO THAT ASSAILING AN EXECUTION
SALE CAN BE CONSIDERED AS AN ATTACK AGAINST THE
DECISION OF THE TRIAL COURT, SAID COURT ERRED IN NOT
APPLYING THE AUTHORITATIVE DOCTRINE LAID DOWN IN
DULAP V. COURT OF APPEALS, G.R. NO. L-28306,18
DECEMBER 1971, 42 SCRA 537.
VI
THE TRIAL COURT ERRED IN FINDING THAT "PLAINTIFFS DID
NOT RAISE THE ISSUE THAT THE PRICE IS SO INADEQUATE
AS SHOCKING TO CONSCIENCE."
VII
THE TRIAL COURT ERRED IN HOLDING THAT THE FINALITY
OF THE DECISION OF THE SUPREME COURT IN G.R. NO. L-
23616,30 SEPTEMBER 1976 ENTITLED "RODRIGO ENRIQUEZ,
ET AL. V. SOCORRO A. RAMOS, ET AL. "MADE THE INSTANT
CASE MOOT AND ACADEMIC."
We find merit in petitioners' contentions. The principle of res
judicata to be applicable must have the following requisites: 1) the
judgment or order invoked as res judicata must be final 2) the court
rendering the same must have jurisdiction over the subject matter
and the parties; 3) the judgment or order must be upon the merits
and 4) there must be, between the two cases, identity of parties,
identity of subject matter and identity of causes of action. Petitioner
allege that the last requirement is absent. (a) There is no identity of
parties. Petitioners while parties in the first case are impleaded only
in their representative character, the principal party is the "estate of
the deceased Socorro A. Ramos." Respondents are made parties in
the present case, they being the buyers in the execution sale, the Ex
Oficio Sheriff of Quezon City is the principal and indispensable party
since he conducted the execution sale but he was not a party in the
first case. Neither is the Register of Deeds of Quezon City who is a
new party. (b) There is no identity of causes of action. The cause of
action of the first case was the alleged failure of Socorro A. Ramos to
comply with her obligation, in the second case it is the illegal and
improper execution or holding of the public sale by the Ex-
Oficio Sheriff of Quezon City. In other words, the first is an action for
damages and the second is an action for the annulment of the
execution sale. (c) There is no identity of subject matter. In the first
case the subject matter are the contracts of 1) Agreement to Sell and
2) a Deed of Absolute Sale, dated May 28, 1963 while in the second
case the subject matter are the 18 parcels of land sold at the execution
sale. The land involved in the first case is not even part of the 18
parcels in the second case. Moreover, the issue of res judicata is not
even raised by respondents in their motion to dismiss before the
lower court.
There is no question that the action of petitioners in the lower court
for annulment does not seek to annul the final decision of the Court
of Appeals but only to annul the execution sale and acts done in
pursuance thereof. The acts complained of in the present case arose
after the Court of Appeals issued its decision and therefore, it is not
possible that the matter of execution sale now in question could have
been covered or considered in or a part of the decision of the
appellate court.
We find that a separate action for annulment of execution sales is in
order. The lower court ruled that plaintiffs' (petitioners') remedy is
not another action but a motion attacking the execution sale with the
court of origin. Petitioners do not agree because 1) improper remedy
was not raised by spouses in their motion to dismiss 2) there is no
provision of law limiting an attack on an execution sale only through
a motion with the court of origin.
A reading of plaintiffs' (petitioners') complaint shows that
inadequacy of price was raised as one of the issues. Assuming that the
price was shockingly low, the same cannot vitiate the auction sale
for redemptionwould be comparatively easier.
Finally, the lower court erred in holding that the finality of Our
decision in G.R. No. L-23616, 73 SCRA 116 entitled Rodrigo Enriquez, et.
al, vs. Socorro A. Ramos 1 made the instant case moot and academic. In
said case, Rodrigo Enriquez, et. al., sold to Socorro A. Ramos 20
subdivision lots in Quezon City for the sum of P235,056.00 of which
only P35,056.00 had been paid and the balance of P200,000.00 was
not paid within the stipulated period by the buyer Socorro A. Ramos.
The sellers obtained favorable judgment this Court ruling that:
Should the defendant-appellee 2 fail to pay the
aforementioned mortgage indebtedness within the period
granted in this decision, the properties mortgaged shall be
sold at public auction and the proceeds thereof shall be
applied to the satisfaction of this judgment and the costs of
the auction sale. Costs against the defendant-appellee. The
motion of Guillermo N. Pablo to join defendant-appellee as
co-party is denied.
We find merit in petitioners' contention that there is nothing in the
records of the present case to show what happened after an order
(Exh. "5-Motion") had been issued on October 17, 1977 in Civil Case No.
Q-7229, Court of First Instance of Rizal. But the lower court gratuitously
assumed that the issuance of said order allowed for the foreclosure
over the 18 parcels of land, the subject matter of the instant case. In
other words, the evidence on record is clear that no actual foreclosure
yet has been effected by the prevailing party in Civil Case No. 7229, and
the lower court was in palpable error in prematurely concluding that
"whoever wins in that case is of no moment, because the plaintiffs'
and defendants' rights if any on the subject 18 lots are now
subordinated to Rodrigo Enriquez in Civil Case No. Q-7229, making the
instant case moot and academic." Petitioners argue that the "action
object" of the present appeal should be litigated for if the execution
sale is vacated, and even if again sold at public sale the obligation
secured by the 18 parcels of land, also involved in the present case
would be satisfied in the best manner possible. Furthermore, for a case
to be considered as moot and academic, the determination of such
event can only be passed upon in a trial on the merits and not in a
motion to dismiss. This case is far from being moot and academic
because whoever wins will be the one who win have the right to pay
the mortgage in favor of Rodrigo Enriquez, et al. As pointed out by
petitioners in their brief, obviously, it will be foolish for herein plaintiff
s (petitioners) to pay the mortgage when the titles to the said eighteen
(18) lots have already been transferred to the names of the said
defendants-spouses Pablo (respondents).
WHEREFORE, premises considered, the Order dated December 1, 1977
and the Order, dated March 8, 1978 of the lower court are hereby SET
ASIDE, and the case is hereby REMANDED to the lower court for
proper trial on the merits.
SO ORDERED.
Feria (Chairman), Fernan, Alampay and Gutierrez, Jr., JJ., concur.
Footnotes
1 Said case is docketed as Civil Case No. Q-7229 in the Court of
First Instance of Rizal.
2 Socorro A. Ramos.
DEVELOPMENT BANK OF THE PHILIPPINES, plaintiff-appellee, vs.
DIONISIO MIRANG, defendant-appellant.
G.R. No. L-29130 | 1975-08-08
D E C I S I O N
MAKALINTAL, J:
On the first issue, the appellant contends that because the mortgage
was extrajudicially foreclosed and sold at less than the mortgage debt
under Act 3135 the appellee is not entitled to recover the deficiency
because neither this Act, as amended, nor the mortgage contract itself,
contains any provision giving such right to the mortgagee.
The same question has been settled by this Court in the case of
Philippine Bank of Commerce vs. Tomas de Vera, 3 where We held:
"The sole issue to be resolved in this case is whether the trial Court
acted correctly in holding appellee Bank entitled to recover from
appellant the sum of P99,033.20 as deficiency arising after the
extrajudicial foreclosure, under Act No. 3135, as amended, of the
mortgaged properties in question. It is urged, on appellant's part, that
since Act No. 3135, as amended, is silent as to the mortgagee's right to
recover deficiency arising after an extrajudicial foreclosure sale of
mortgage, he (Mortgagee) may not recover the same.
"Article 2131 of the new Civil Code, on the contrary, expressly provides
that 'The form, extent and consequences of a mortgage, both as to its
constitution, modification and extinguishment, and as to other matters
not included in this Chapter, shall be governed by the provisions of the
Mortgage Law and of the Land Registration Law.' Under the Mortgage
Law, which is still in force, the mortgagee has the right to claim for the
deficiency resulting from the price obtained in the sale of the real
property at public auction and the outstanding obligation at the time
of the foreclosure proceedings. (See Soriano vs. Enriquez, 24 Phil. 584;
Banco de las Islas Filipinas vs. Concepcion e Hijos, 53 Phil. 806; Banco
Nacional vs. Barreto, 53 Phil. 955.) Under the Rules of Court (Section 6,
Rule 70 * ), 'Upon the sale of property, under an order for a sale to
satisfy a mortgage or other incumbrance thereon, if there be a balance
due to the plaintiff after applying the proceeds of the sale, the Court,
upon motion, should render a judgment against the defendant for any
such balance for which, by the record of the case, he may be personally
liable to the plaintiff, . . .' It is true that this refers to a judicial
foreclosure, but the underlying principle is the same, that the
mortgage is but a security and not a satisfaction of indebtedness."
"The sale of the thing pledged shall extinguish the principal obligation,
whether or not the proceeds of the sale are equal to the amount of the
principal obligation, interest and expenses in a proper case. . . . If the
price of the sale is less, neither shall the creditor be entitled to the
deficiency, notwithstanding any stipulation to the contrary."
as well as to the fact that in chattel mortgage under Art. 1484,
paragraph 3, the creditor shall have no further action to recover any
unpaid balance if he has chosen to foreclose the chattel mortgage.
These provisions, far from supporting the appellant's stand, militate
against it, because they show that when the Legislature intends to bar
or occlude a creditor from suing for any deficiency after foreclosing
and selling the security given for the obligation, it makes express
provision to that effect. In the same case of Philippine Bank of
Commerce vs. De Vera, supra, this Court said apropos:
"It is then clear that in the absence of a similar provision in Act 3135, as
amended, it cannot be concluded that the creditor loses his right given
him under the Mortgage Law and recognized in the Rules of Court, to
take action for the recovery of any unpaid balance on the principal
obligation, simply because he has chosen to foreclose his mortgage
extrajudicially, pursuant to a special power of attorney given him by
the mortgagor in the mortgage contract. As stated by this Court in
Medina vs. Philippine National Bank (56 Phil. 651). a case analogous to
the one at bar, the step taken by the mortgagee-bank in resorting to
extrajudicial foreclosure under Act No. 3135, was 'merely to find a
proceeding for the sale, and its action cannot be taken to mean a
waiver of its right to demand the payment of the whole debt.'"
Separate Opinions
(c)To redeem his homestead Mirang must pay not merely the price
paid for it by the DBP at the auction sale but the total of his obligation
still due and owing to the DBP.
But even as I perforce concur in the above-stated conclusions, I cannot
ignore as in fact I here add my own emphasis to the cogent and
pointed observations articulated by Justice Felix V. Makasiar in his
dissenting opinion.
I find the following inescapably and at once particularly disturbing:
(a)The DBP, as the highest bidder at the auction sale, bought the
property of the debtor Mirang, which has a quite sizeable area of 18-1/2
hectares, for the minuscule sum of only P2,010, or a miserable P110 per
hectare;
(b)The DBP displayed not an ounce of sympathy for Mirang's inability
to amortize his mortgage loan, occasioned by a fortuitous event of
course beyond his control in the form of infestation of his abaca
plantation by mosaic disease, a disease that the Government itself,
with all its expertise and resources, has thus far been unable to
eradicate;
(c)The DBP apparently did not attach the least bit of importance to the
fact that the destruction of Mirang's abaca plantation by mosaic
disease was not caused by his negligence nor by his failure to take
necessary precautionary measures; and
The dictum that "the letter of the law killeth; its spirit giveth life" has a
special relevance to the instant case. And to appellant, if he is
exempted from liability for any deficiency, social justice, which
guarantees him together with the rest of the citizenry "dignity, welfare
and security" (Sec. 6, Art. II, 1973 Constitution), becomes a living
reality, not a myth.
Footnotes
Separate Opinions
Fernando, J.:
2. Appellants do not stop there. It does not suffice for them that
defendant Federico Laureano would be freed from liability. They would
go farther. They would take plaintiff to task for his complaint having
joined the wife, Aida de Laureano, and the father, Juanita Laureano.
They were far from satisfied with the lower court's absolving these
two from any financial responsibility. Appellants would have plaintiff
pay damages for their inclusion in this litigation. We are not disposed
to view the matter thus.
Plaintiff apparently was not entirely unaware that the inclusion in the
suit filed by him was characterized by unorthodoxy. He did attempt to
lend some color of justification by explicitly setting forth that the
father was joined as party defendant in the case as he was the
administrator of the inheritance of an undivided property to which
defendant Federico Laureano could lay claim and that the wife was
likewise proceeded against because the conjugal partnership would be
made to respond for whatever liability would be adjudicated against
the husband.
Footnotes
3 Crame Sy Panco v. Gonzaga, 10 Phil. 646, 648. Cf. Chan Keep v. Chan
Gioco, 14 Phil. 5 (1909) and Novo & Co. v. Ainsworth, 26 Phil. 380 (1913).
5 Lasam v. Smith, 45 Phil. 657, 661-662 (1924). Cf. Yap Kim Chuan v.
Tiaoqui, 31 Phil. 433 (1955); University of Santo Tomas v. Descals, 38
Phil. 267 (1918); Lizares v. Hernaez, 40 Phil. 981 (1920); Garcia v.
Escudero, 43 Phil. 437 (1922); Millan v. Rio y Olabarrieta, 45 Phil. 718
(1924); Obejera v. Iga Sy, 76 Phil. 580 (1946).
Footnotes
1
Article 1105, old Civil Code; article 1174, new Civil Code.
2
Cf. Lo Ching vs. Court of Appeals, 46 Off. Gaz., Supp. No. 1, p.
399, 81 Phil., 601 and American Far Eastern School of
Aviation vs. Ayala y Cia., 89 Phil., 292.
SYLLABUS
1. ESTATES; SALE; REDEMPTION; PARTIES TO ESTATE PROCEEDINGS.
— Upon the dissolution of a partnership, two haciendas were awarded
to one of the partners, now deceased. His widow had an interest in the
property, which was sold by the sheriff under an execution issued
upon a judgment against her in favor of the purchaser, the
present Appellant. The certificate purported to convey the land and all
rights and interests whatsoever of the widow. Appellant claims that he
is consequently entitled to appear as owner in the accounting and in all
other proceedings relative to the estate and to exclude the widow
from all participation therein: Held, That, as to the real estate, at least,
the widow retained the right of redemption which gave a standing in
the estate proceedings; that, for the statutory period, she was entitled
to remain in any possession she may have had of the realty sold, and
might defeat the sale by redemption at any time during such period,
and that the existence of the right of redemption was sufficient to
prevent an entire subrogation.
DECISION
TRACEY, J. :
The second order of the same date permitted the appeal of Doña
Matilde.
First. That the judge erred in allowing the appeal of the widow from
the order of partition, but it appears in the case that that appeal has
since been abandoned and in concluding their presentation of this
point the appellant’s counsel say:jgc:chanrobles.com.ph
Second. That the judge erred in not declaring that Doña Matilde
Aramburu had no further interest in the estate.
Passing over the obvious doubts as to the regularity of the sheriff ’s
sale and the procedure thereat, it is plain that in the real estate at least
the widow retained a right of redemption from the execution sale
which gave her a standing in the estate proceedings. She was entitled
to remain in any possession which she may have had of the real estate
sold, for the statutory term of twelve months, and she might at any
time defeat the sale by a proper redemption within that period. (Secs.
463 and 464, Code of Civil Procedure; De la Rosa v. Santos, 10 Phil.
Rep., 148.) Moreover, even before the Code of Civil Procedure the
creditor was not clothed with such rights of his debtor as were
inherent in the person (art. 1111, Civil Code), and in this case her strictly
personal rights would have alone entitled her to a representation in
the estate proceedings.
Third. That the court erred in not declaring the purchaser subrogated
to the rights of Doña Matilde Aramburu in the estate.
In none of the respects alleged did the Court of First Instance commit
error and its order of April 8, denying the motion of Don Angel Ortiz is
hereby affirmed, and his appeal therefrom is dismissed, with the costs
of this instance. So ordered.
On February 20, 1948, Francisco Bastida and Juan Ysmael & Co., Inc.,
hereafter to be designated as Ysmael, entered into a partnership
agreement for the operation of a lard and oil factory under the name
of "Washington Lard and Oil Factory", with the former as an industrial
partner and the latter as a capitalist partner.
While Bastida and Ysmael were thus engaged in the business of oil and
lard manufacturing, on August 10, 1948, Dy Buncio & Co., Inc., whose
president is Guillermo Dy Buncio, both of whom to be hereinafter
known as Dy Buncio, authorized Bastida as a broker to offer for sale its
own oil and lard factory in Makati, Rizal, for P300,000, of which
P100,000 would be paid on the signing of the deed of sale and the
balance of P200,000 in 12 monthly installments with interest at 8 per
cent a year. Said authority would expire 30 days from August 10, 1948.
Bastida offered the factory to his partner Ysmael who, while willing to
make the purchase, found the price of P300,000 very high, but
expressed a desire to be given some time to inspect the factory and
determine whether it was in good working condition.
Bastida transmitted to Dy Buncio the reaction of Ysmael to his offer,
and suggested that the latter be given more time to consider the offer.
Dy Buncio agreed and to this effect he leased the factory for two years
to Bastida and gave him an opinion to buy it within the same period at
the reduced price of P260,000. The rental of the factory was fixed at
P3,000 a month. Explaining why the option to buy was placed in his
name, Bastida said that Dy Buncio had previously prepared a letter
addressed to Hemady, manager of Ysmael & Co., Inc., giving him the
option to buy said factory, and granting Bastida a commission of 3 per
cent in the transaction, but Bastida suggested that the option be
placed in his name to give him a chance to earn extra money in the
transaction.
Pursuant to the lease with option to buy, Bastida and Ysmael took
possession of the lard and oil factory on September 28, 1948 and
operated the business under the name of "Washington Lard and Oil
Factory". This arrangement was well known to Dy Buncio. In fact,
Ysmael paid to Dy Buncio all the rentals beginning October 15, 1948,
and a current account was opened between Dy Buncio and Ysmael
whereby the former purchased lard and oil on credit from the factory
and sometimes Dy Buncio's debt was set off against the rentals on the
factory leased.
Upon the foregoing facts, the court a quo rendered decision holding in
substance that the option given by Dy Buncio to Bastida to buy the oil
and lard factory in question is valid and binding, that it was validly
assigned to Ysmael, who gave notice of his intention to exercise the
option within the two-year period agreed upon, and that,
consequently, defendant is bound to respect it and to execute the
corresponding deed of sale as called for in the option. From this
decision defendant has appealed.
The option which was given by defendant to Bastida to buy the factory
in question appears in the following letter of defendant dated
September 28, 1950:
"28 de septiembre de 1948
(Fdo.) G. DY BUNCIO
Presidente"
It appears from the evidence that the option to buy the factory for the
sum of P260,000 was given to Bastida, and when the latter assigned
his right to Ysmael and the latter gave notice of his desire to exercise
the option, Dy Buncio changed his mind and refused to perform the
sale alleging as his reason the fact that the option was given to Bastida
and not to any other person. Defendant, however, now contends that
the option he has given has no valid effect on Bastida because, being a
Spanish citizen, he has no right to buy the factory under our
Constitution.
In the second place, in the supposition that the lease with option to
buy was in truth and in fact given to Bastida, we believe that, to
dispute it now on the technical ground that Bastida, being a Spanish
citizen, cannot be given that option, is most unfair considering the time
and effort he has spent in the transaction. There is no doubt that this
objection is but a mere afterthought motivated by Dy Buncio's desire
to retain the factory considering its future and the handsome
improvements made thereon by Ysmael. This Dy Buncio cannot do.
There are certain moral and legal considerations that stand on his way.
He is barred from doing so not only by the rule of equity which requires
that whoever goes to court must do so with clean hands, but by the
well-known rule of law that he who has capacity to contract may not
invoke the incapacity of the party with whom he contracted as a
defense against performance (Articles 1397, New Civil Code; Article
1302, Spanish Civil Code).
"The Court cannot believe that Ysmael would have invested more than
P300,000 if it had not believed that it was entitled to exercise the
option given to its industrial partner Bastida, and if had known that it
would be required to remove all the improvements from the factory so
soon after they were installed.
Defendant makes the final plea that, should the plaintiff be declared
entitled to exercise the option given to Bastida by defendant to
purchase the land in question, it be ordered that, if plaintiff should fail
to pay the purchase price and the rental of P4,503.10, the plaintiff
should return to defendant the property and pay defendant a monthly
rental until the land should have been returned to the defendant, in
addition to a reasonable sum for attorney's fees.
This point was not raised in the lower court. It is raised for the first
time in this appeal. To accede to the plea now would be prejudging the
failure of plaintiff to exercise the option as declared in the decision.
Since this is an action for specific performance, it is to be presumed
that if the relief prayed for is granted, plaintiff will comply with the
decision of the court. To take action on defendant's plea now would be
premature.