Professional Documents
Culture Documents
Notably, all the other checks issued by the appellee dated subsequent
to August 10, 1991 and dated earlier than the demand letter, were duly
encashed. This fact should have already prompted the appellant bank
to review its action relative to the unsigned check. xxx[4]
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.
In the early part of July, 1963, the plaintiff delivered to the defendant,
who is a typewriter repairer, a portable typewriter for routine cleaning and
servicing. The defendant was not able to finish the job after some time
despite repeated reminders made by the plaintiff. The defendant merely
gave assurances, but failed to comply with the same. In October, 1963, the
defendant asked from the plaintiff the sum of P6.00 for the purchase of
spare parts, which amount the plaintiff gave to the defendant. On October
26, 1963, after getting exasperated with the delay of the repair of the
typewriter, the plaintiff went to the house of the defendant and asked for
the return of the typewriter. The defendant delivered the typewriter in a
wrapped package. On reaching home, the plaintiff examined the
typewriter returned to him by the defendant and found out that the same
was in shambles, with the interior cover and some parts and screws
missing. On October 29, 1963, the plaintiff sent a letter to the defendant
formally demanding the return of the missing parts, the interior cover and
the sum of P6.00 (Exhibit D). The following day, the defendant returned to
the plaintiff some of the missing parts, the interior cover and the P6.00.
"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 defendant through a
certain Julio Bocalin, which the defendant denied allegedly because the
typewriter was delivered to him personally by the plaintiff.
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]
[2] Malonzo v. Galang, L-13851, 27 July 1960; Darang v. Belizar, L-22399, 31 March 1967, 19 SCRA 214.
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.
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
DECISION MAKALINTAL, J:
In his brief the appellant assigns five (5) errors, which may be
condensed into the following issues:
(1)Whether or not the creditor Development Bank of the
Philippines has a right to recover the balance of the indebtedness after
the mortgaged property was sold for less than the amount thereof
under extrajudicial foreclosure pursuant to Act 3135, as amended:
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.
The third issue has likewise been resolved by this Court in a similar
case. 4 The issue posed there involved the price at which the
mortgagor should redeem his property after the same had been sold at
public auction whether the amount for which the property was sold, as
contended by the mortgagor, or the balance of the loan obtained from
the banking institution, as contended by the mortgagee RFC. Cited in
that case was Section 31 of Com. Act No. 459, which was the special
law applicable exclusively to properties mortgaged with the RFC, as
follows:
"The mortgagor or debtor to the Agricultural and Industrial Bank *
, whose real property has been sold at public auction, judicially or
extrajudicially, for the full or partial payment of an obligation to said
Bank, shall, within one year from the date of the auction sale, have the
right to redeem the real property by paying to the Bank all the amount
he owed the latter on the date of the sale, with interest on the total
indebtedness at the rate agreed upon in the obligation from said date,
unless the bidder has taken material possession of the property or
unless this has been delivered to him, in which case the proceeds of
the property shall compensate the interest. . . ."
Separate Opinions
CASTRO, J., concurring:
(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.
(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;
(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
3.As originally conceived on October 29, 1946 in its charter, Republic Act
No. 85 as approved by Congress, the main purpose of the RFC was "to
provide credit facilities for the rehabilitation and development of
agriculture, commerce and industry, the reconstruction of property
damaged by war, and broadening and diversification of the national
economy . . ." (Sec. 1, R.A. No. 85). As amended on June 15, 1958 by the
passage of Republic Act No. 2081, the DBP, the successor to RFC, was
primarily established "to provide credit facilities for rehabilitation and
development and expansion of agriculture and industry, the reconstruction
of property damaged by war and the broadening and diversification of the
national economy . . ." It is thus patent that the RFC, now the DBP, was
created principally to assist the agricultural producers and industrialists in
developing their farms and industries to accelerate national progress, more
than to realize profit for itself. Appellant is in great need of such assistance
as he apparently is not a man of means. For the DBP to exact its "pound of
flesh" would be to play the hated role of a Shylock, which is at war with the
ideals of a compassionate society, to which the government is dedicated. It
would be unjust enrichment on the part of DBP, which could breed
disenchantment and discontent.
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
In that case then, the risk was quite evident and the nature of
the obligation such that a party could rightfully be deemed as
having assumed it. It is not so in the case before us. It is anything
but that. If the lower court, therefore, were duly mindful of what
this particular legal provision contemplates, it could not have
reached the conclusion that defendant Federico Laureano could be
held liable. To repeat, that was clear error on its part.
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.
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).
This is an action for declaratory judgment under Rule 66. The relief
prayed for calls for an interpretation of contracts entered into by and
between the sugar cane planters in the districts of Manapla, Cadiz and
Victorias, Occidental Negros, and the Victorias Milling Company, Inc.
After issues had been joined the parties submitted the case for
judgment upon the testimony of Jesus Jose Ossorio and the following
stipulation of facts:
3. That at various dates, from the year 1917 to 1934, the sugar cane
planters pertaining to the districts of Manapla and Cadiz, Negros
Occidental, executed identical milling contracts, setting forth the
terms and conditions under which the sugar central "North
Negros Sugar Co. Inc." would mill the sugar produced by the sugar
cane planters of the Manapla and Cadiz districts;
4. The North Negros Sugar Co., Inc. had its first molienda or milling
during the 1918-1919 crop year, and the Victorias Milling Co., had
its first molienda or milling during the 1921-1922 crop year.
Subsequent moliendas or millings took place every successive crop
year thereafter, except the 6-year period, comprising 4 years of the last
World War II and 2 years of post-war reconstruction of respondent's
central at Victorias, Negros Occidental.
5. That after the liberation, the North Negros Sugar Co., Inc. did
not reconstruct its destroyed central at Manapla, Negros
Occidental, and in 1946, it advised the North Negros Planters
Association, Inc. that it had made arrangements with the
respondent Victorias Milling Co., Inc. for said respondent
corporation to mill the sugar cane produced by the planters of
Manapla and Cadiz holding milling contracts with it. Thus, after
the war, all the sugar cane produced by the planters of petitioner
associations, in Manapla, Cadiz, as well as in Victorias, who held
milling contracts, were milled in only one central, that of the
respondent corporation at Victorias;
6. Beginning with the year 1948, and in the following years, when
the planters-members of the North Negros Planters Association,
Inc. considered that the stipulated 30-year period of their milling
contracts executed in the year 1918 had already expired and
terminated in the crop year 1947-1948, and the planters-members
of the Victorias Planters Association, Inc. likewise considered the
stipulated 30-year period of their milling contracts, as having
likewise expired and terminated in the crop year 1948-1949, under
the pertinent provisions of the standard milling contract (Annex
"A") on the duration thereof, which provided in Par. 21 thereof as
follows:
In accord with the rule laid down in the case of Lacson vs. Diaz, 47
Off. Gaz., Supp. No. 12, p. 337, where despite the fact that the lease
contract stipulated seven sugar crops and not seven crop years as the
term thereof, we held that such stipulation contemplated seven
consecutive agricultural years and affirmed the judgment which
declared that the leasee was not entitled to an extension of the term
of the lease for the number of years the country was occupied by the
Japanese Army during which no sugar cane was planted2 we are of the
opinion and so hold that the thirty-year period stipulated in the
contracts expired on the thirtieth agricultural year. The period of six
years — four during the Japanese occupation when the appellant did
not operate its mill and the last two during which the appellant
reconstructed its mill — cannot be deducted from the thirty-year
period stipulated in the contracts.
Bengzon, Acting C. J., Montemayor, Reyes, A., Jugo, Bautista Angelo, Labrador, Concepcion, and Reyes, J. B. L.,
JJ., concur.
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
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.