147028237 oblicon-cases-from-1168-to-1170edted

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G.R. No. 107737 October 1, 1999
JUAN L. PEREZ, LUIS KEH, CHARLIE LEE and ROSENDO G.
TANSINSIN, JR., petitioners,
vs.
COURT OF APPEALS, LUIS CRISOSTOMO and VICENTE ASUNCION,
respondents.
GONZAGA-REYES, J.:
This is a petition for review on certiorari of the Decision 1
of the Court of
Appeals affirming the decision of the Regional Trial Court of Bulacan, Branch
9 2
that disposed of Civil Case No. 5610-M (Luis Crisostomo v. Luis Keh,
Juan Perez, Charlie Kee and Atty. Rosendo G. Tansinsin, Jr.) as follows:
WHEREFORE, premises considered, judgment is hereby
rendered:
a) directing defendant JUAN PEREZ to allow
plaintiff LUIS CRISOSTOMO to occupy and
operate the "Papaya Fishpond" for a period of 5
1/2 years at the rental rates of P150,000.00 for
the first six months and P175,000.00 for the
remaining five years (the same rates provided for
in Exh. 4);
b) ordering defendants LUIS KEH, CHARLIE
LEE, JUAN PEREZ and Atty. ROSENDO
TANSINSIN, JR. to pay unto the plaintiff the
amounts of P150,000.00 as actual damages;
P20,000.00 as moral damages; P20,000.00 as
exemplary damages; and P10,000.00 as
attorney's fees, plus the costs of the suit;
c) directing the release, delivery or payment
directly to plaintiff LUIS CRISOSTOMO of the
amounts of P128,572.00 and P123,993.85,
including the interests which may have already
accrued thereon, deposited with the Paluwagan
ng Bayan Savings Bank (Paombong, Bulacan
Branch) in the name of the Clerk of Court and/or
Deputy Clerk of Court Rodrigo C. Libunao under
this Court's Order dated February 14, 1980;
however, the plaintiff is required to pay defendant
Perez the corresponding rental on the fishpond
for the period June 1979-January 1980 based on
the rate of P150,000.00 per annum, deducting
therefrom the amount of P21,428.00 already paid
to and received by then co-usufructuary Maria
Perez (Exh. E);
d) dismissing the defendants' separate counter-
claims for damages, for lack of merit; and
e) dismissing the Pleading in Intervention Pro
Interesse Suo filed by VICENTE ASUNCION on
the ground of lis pendens.
SO ORDERED.
The facts upon which the Court of Appeals based its Decision are the
following:
Along with Maria Perez, Fructuosa Perez, Victoria Perez, Apolonio Lorenzo
and Vicente Asuncion, petitioner Juan Perez is a usufructuary of a parcel of
land popularly called the "Papaya Fishpond." Covered by Transfer Certificate
of Title No. 8498 of the Registry of Deeds for the Province of Bulacan, the

fishpond is located in Sto. Rosario, Hagonoy, Bulacan and has an area of
around 110 hectares. On June 5, 1975, the usufructuaries entered into a
contract leasing the fishpond to Luis Keh for a period of five (5) years and
renewable for another five (5) years by agreement of the parties, under the
condition that for the first five-year period the annual rental would be
P150,000.00 and for the next five years, P175,000.00. Paragraph 5 of the
lease contract states that the lessee "cannot sublease" the fishpond "nor
assign his rights to anyone." 3
Private respondent Luis Crisostomo, who reached only the 5th grade, is a
businessman engaged in the operation of fishponds. On September 20,
1977, while he was at his fishpond in Almazar, Hermosa, Bataan, his bosom
friend named Ming Cosim arrived with petitioner Charlie Lee. The two
persuaded private respondent to take over the operation of "Papaya
Fishpond" as petitioner Lee and his partner, petitioner Luis Keh, were
allegedly losing money in its operation. Private respondent having acceded
to the proposal, sometime in December of that year, he and petitioners Lee
and Keh executed a written agreement denominated as "pakiao buwis"
whereby private respondent would take possession of the "Papaya
Fishpond" from January 6, 1978 to June 6, 1978 in consideration of the
amount of P128,000.00 broken down as follows: P75,000.00 as rental,
P50,000.00 for the value of milkfish in the fishpond and P3,000 for labor
expenses. Private respondent paid the P75,000.00 to petitioner Keh at the
house of petitioner Lee in Sta. Cruz, Hagonoy, Bulacan in the presence of
Lee's wife, brother-in-law and other persons. He paid the balance to
petitioner Lee sometime in February or March 1978 because he was
uncertain as to the right of petitioners Keh and Lee to transfer possession
over the fishpond to him. Private respondent made that payment only after
he had received a copy of a written agreement dated January 9, 1978 4
whereby petitioner Keh ceded, conveyed and transferred all his "rights and
interests" over the fishpond to petitioner Lee, "up to June 1985." From private
respondent's point of view, that document assured him of continuous
possession of the property for as long as he paid the agreed rentals of
P150,000.00 until 1980 and P.175,000.00 until 1985.1âwphi1.nêt
For the operation of the fishpond from June 1978 to May 1979, private
respondent, accompanied by Ming Cosim and Ambrocio Cruz, paid the
amount of P150,000.00 at the Malabon, Metro Manila office of petitioner Keh.
The following receipt was issued to him:
R E C E I P T
June 6, 1978
P150.000,00
Received from Mr. LUIS KEH the sum of ONE HUNDRED
FIFTY THOUSAND PESOS (P150,000.00), Philippine
Currency, as full payment of the yearly leased rental of the
Papaya Fishpond for the year beginning June 1978 and ending
on May 1979. The next payment shall be made on June 6,
1979.
Said sum was paid in Producers Bank of the Philippines Check
No. (illegible) 164595 dated June 6, 1978.
Mr. Luis Keh has not transferred his rights over the fishpond to
any person.
Caloocan City, June 6, 1978.
JUAN L. PEREZ ET AL.
By:
(Sgd.)
Rosendo G. Tansinsin, Jr.
CONFORME TO THE ABOVE:
(Sgd.)
LUIS KEH
Handwritten below that receipt but above the signature of petitioner
Charlie Lee, are the following: "Rec'd from Luis Crisostomo sum of
one hundred fifty-four thousand P154,000.00 for above payment. 5
Private respondent incurred expenses for repairs in and improvement of the
fishpond in the total amount of P486,562.65. 6
However, sometime in June
1979, petitioners Tansinsin and Juan Perez, in the company of men bearing
armalites, went to the fishpond and presented private respondent with a letter
dated June 7, 1979 showing that petitioner Luis Keh had surrendered
possession of the fishpond to the usufructuaries.
Because of the threat to deprive him of earnings of around P700,000.00 that
the 700,000 milkfish in the fishpond would yield, and the refusal of petitioners
Keh, Juan Perez and Lee to accept the rental for June 5, 1979 to June 6,
1980, private respondent filed on June 14, 1979 with the then Court of First
Instance of Bulacan an action for injunction and damages. He prayed for the
issuance of a restraining order enjoining therein defendants Keh, Perez and
Lee from entering the premises and taking possession of the fishpond. He
also prayed for actual damages of P50,000.00, moral damages of
P20,000.00, exemplary damages in an amount that the court might award,
and attorney's fees of P10,000.00. 7

That same day, June 14, 1979, the lower court granted the prayer for a
restraining order. On November 13, 1979, Crisostomo paid one of the
usufructuaries, Maria Perez (who died in 1984), the amount of P21,428.00 as
her 1/7 share of the annual rental of the fishpond for 1979-80. Maria Perez
issued a notarized receipt for that amount. 8
On January 11, 1980, the court lifted the restraining order thereby effectively
depriving private respondent of possession over the fishpond. On February
14, 1980, the parties submitted a partial compromise agreement with the
following stipulations:
1. The amount of P128,572.00 that private
respondent deposited as rental with the Office of
the Clerk of Court under O.R. No. 21630 dated
November 15, 1979 be withdrawn from that office
and deposited with the Paluwagan ng Bayan
Savings & Loan Association, Inc. (Paombong,
Bulacan branch) and which deposit shall not be
withdrawn unless authorized by the court; and
2. The plaintiff could personally harvest milkfish
"with commercial value" in the presence of Perez
and under the supervision of the deputy clerk of
court within the appointed period and that the net
proceeds of the sale (P123,993.85 per the Report
dated March 4, 1980 of the deputy clerk of court)
be deposited in the name of the deputy clerk of
court of Branch 6 of the then Court of First
Instance of Bulacan with the same branch of the
Paluwagan ng Bayan Savings & Loan
Association, Inc. and which deposit shall not be
withdrawn unless upon order of the court after
hearing.
The court approved that agreement on that same date.
Thereafter, the usufructuaries entered into a contract of lease with Vicente
Raymundo and Felipe Martinez for the six-year period of June 1, 1981 to
May 30, 1987 in consideration of the annual rentals of P550,000.00 for the
first two years and P400,000.00 for the next four years. Upon expiration of
that lease, the same property was leased to Pat Laderas for P1 million a
year.
The complaint was later amended to include petitioner Tansinsin, the alleged
administrator of the fishpond, as one of the defendants. 9
Except in the joint
answer that the defendants had filed, petitioners Keh and Lee did not appear
before the court. Neither did they testify.
In their defense, petitioners Juan Perez and Tansinsin presented evidence to
prove that they had negotiated for the lease of the property with Benito Keh
in 1975. However, they averred, for reasons unknown to petitioner Perez, in
the contract of lease that petitioner Tansinsin prepared, petitioner Luis Keh
was named as lessee. Petitioner Perez had never met Keh or Lee but
according to petitioner Tansinsin, petitioner Luis Keh was substituted for
Benito Keh because the latter was preoccupied with his other businesses.
Sometime in 1979, petitioner Keh's agent named Catalino Alcantara relayed
to petitioner Perez, Keh's intention to surrender possession of the fishpond to
the usufructuaries. Because petitioner Perez demanded that said intention
should be made in writing, on June 5, 1979, Perez received from Keh a letter
to that effect.
When private respondent received a copy of that letter of petitioner Keh, he
took the position that petitioner Perez had no right to demand possession of
the fishpond from him because Perez had no contract with him. Private
respondent was allowed four (4) months within which to vacate the premises
but he immediately filed the complaint for injunction and damages.
Thereafter, private respondent's counsel, Atty. Angel Cruz and other persons
tried to prevail upon petitioner Perez to allow private respondent to occupy
the property for three (3) more years. Petitioner Perez declined that
proposition.
On September 6, 1989, the lower court rendered the aforesaid decision. It
arrived at the conclusion that the defendants therein "conspired with one
another to exploit the plaintiff's naivete and educational inadequacies and, in
the process, to defraud him by inducing him into taking possession of the
"Papaya Fishpond" in their fond hope that, as soon as the plaintiff —
applying his known expertise as a successful fishpond operator — shall have
considerably improved the fishpond, they will regain possession of the
premises and offer the lease thereof to other interested parties at much
higher rental rates as laid bare by supervening realities." That conclusion
was founded on the following:
1. The plaintiffs (private respondent Crisostomo's)
testimony bears the "hallmarks of truth: candid,
straightforward and uncontrived." He had proven
himself a "much more credible witness than his
opponents."

2. The notarized receipt of Maria Perez of her
share as a usufructuary in the rental for 1979-80
is a "clear avowal of plaintiffs legitimate operation
of the "Papaya Fishpond" as assignee or
transferee thereof." It was impossible for the other
usufructuaries, especially Juan Perez who was
residing in the same locality and actively involved
in the "affairs of the fishpond," not to have known
that plaintiff occupied the fishpond for one and a
half years as assignee of Keh and Lee. It was
unbelievable that both Tansinsin and Perez would
only perceive the plaintiff as a mere encargado of
Keh and Lee.
3. The receipt whereby Tansinsin acknowledged
payment of P150,000.00 as rental for June 1978-
May 1979 bears "tell-tale signs" of the conspiracy.
Firstly, the statement "Mr. Luis Keh has not
transferred his rights over the fishpond to any
person" is entirely irrelevant to that receipt unless
it was intended "to preempt plaintiff's claim of
rights and interests over the said property as
either sub-lessee or assignee." Secondly, Keh's
having signified "Conforme to the above" is a
gratuitous notation as it actually indicates that the
money came from the plaintiff. Thirdly, Atty.
Tansinsin's receipt of the amount for and in behalf
of "JUAN L. PEREZ ET AL." illustrates his "active
and dominant role in the affairs" of the fishpond
whether as administrator thereof or as beneficiary
of a share from its fruits.
4. Service upon plaintiff of Keh's letter
surrendering possession of the fishpond implied
that defendants knew that plaintiff was in
possession thereof. That they resorted to the
intimidating presence of armed men is proof that
they expected the plaintiff to refuse to give up
possession of the property. These circumstances
"completely belie the protestations of Perez and
Tansinsin of lack of knowledge of the contract
entered into" between the plaintiff, and Lee and
Keh.
5. The nonpresentation of Lee and Keh on the
witness stand by Atty. Tansinsin "can very well be
construed as a smart maneuver to cover up the
sinister cabal for deception inferrable from the
attendant facts and circumstances." In their joint
answer, Keh and Lee tried to relieve Perez of any
liability in favor of the plaintiff. That is
understandable "because, should the Court
disregard the reliance of Perez on the prohibition
against sub-lease or assignment of the "Papaya
Fishpond", then all the defendants shall have
exposed themselves to unavoidable liability for
the acts complained of by the plaintiff."
6. Atty. Tansinsin was the common legal counsel
of all the defendants and, by his testimony, even
the plaintiff. Atty. Tansinsin's denial that he was
plaintiffs counsel was his way of "deflecting
plaintiffs imputations of professional improprieties
against him." Plaintiff must have assumed that
Atty. Tansinsin was also his lawyer considering
that they were "on very friendly terms" and
therefore Atty. Tansinsin might have been
instrumental in dispelling whatever fears plaintiff
had entertained as regards the business
transactions involved.
7. The fact that the fishpond was subsequently
rented out for astronomical amounts is proof that
the plaintiff had considerably improved the
fishpond. 10
The lower court added:
Bluntly yet succinctly put, the foregoing circumstances when
viewed collectively with other cogent aspects of the instant
case inexorably lead to the Court's well-considered view that
the defendants — tempted by the bright prospect of a lucrative
business coup — embarked themselves in an egregious
scheme to take undue advantage of the gullibility of the plaintiff
who, as borne by ensuing events, proved himself an ideal

victim to prey upon: pathetically unsuspecting yet only too
eager to invest his material resources and self-acquired
technical know-how to redeem what was then a dwindling
business enterprise from total collapse. Plaintiffs impressive
performance, alas, only redounded ultimately to the supreme
benefit exclusively of the defendants. A classic case of "ako
ang nagsaing, iba ang kumain!"
The defendants elevated the case to the Court of Appeals which, as earlier
mentioned, affirmed the decision of the trial court and disposed of the appeal
on February 18, 1992 as follows:
WHEREFORE, in view of all the foregoing, judgment appealed
from, is hereby AFFIRMED.
However, intervenor-appellant is hereby declared co-
usufructuary of the Papaya fishpond, and is, therefore, entitled
to all rights and interest due to the usufructuaries of the said
fishpond.
SO ORDERED.
On the defendant-appellants' contention that the principle of res judicata
should be applied because the Court of Appeals had ruled on the issue of
possession in CA-G.R. No. 10415-R, a petition for certiorari and injunction
with preliminary mandatory injunction, the Court of Appeals held that said
principle was unavailing. The petition in CA-G.R. No. 10415-R involved a writ
of injunction "which presupposes the pendency of a principal or main action."
Moreover, the decision in that case did not resolve the issue of who should
be in possession of the Papaya Fishpond as findings of fact of the trial court
cannot be reviewed in a certiorari proceeding.1âwphi1.nêt
The Court of Appeals ruled further that appellee Crisostomo "cannot be
considered a possessor in bad faith, considering that he took possession of
the fishpond when appellants Keh and Lee assigned to him appellant Keh's
leasehold right." It held that appellant Perez knew of the transfer of
possession of the fishpond to appellee and that the receipt evidencing
payment of the 1978-1979 rental even bears an expressed admission by Lee
that the payment came from appellee Crisostomo.
Agreeing with the court a quo that "defendants-appellants employed fraud to
the damage and prejudice of plaintiff-appellee," the Court of Appeals held
that appellants should be held liable for damages. As regards the
intervention pro interesse suo, the appellate court ruled that the same should
be allowed because, even if the litigation would not be technically binding
upon him, complications might arise that would prejudice his rights. Pointing
out that a usufruct may be transferred, assigned or disposed of, the Court of
Appeals ruled that the intervenor cannot be excluded as a usufructuary
because he had acquired his right as such from a sale in execution of the
share of Jorge Lorenzo, one of the usufructuaries of the fishpond.
Herein petitioners filed a motion for the reconsideration of that Decision of
the Court of Appeals. They alleged that the Decision was premature because
it was rendered when they had not yet even received a copy of the
intervenor's brief wherein assignments of errors that directly affected their
rights and interests were made. They insisted that the principle of res
judicata was applicable because in G.R. No. 64354, this Court upheld the
Decision of the Court of Appeals in CA-G.R. No. 10415. They added that
appellee Crisostomo was guilty of forum shopping because the issue of
possession had been "squarely decided" in CA-G.R. No. 10415. They
stressed that the contract of lease between Keh and the usufructuaries
prohibited subleasing of the fishpond; that by the receipt dated June 6, 1978,
it was Keh who paid the rental; that appellee Crisostomo was a perjured
witness because in the notebook showing his expenses, the amount of
P150,000.00 for rentals does not appear; that the term of the contract had
expired and there was no renewal thereof, and that the consideration of
P150,000.00 was grossly inadequate. They averred that the Court of Appeals
erred in awarding damages that were not prayed for in the second amended
complaint and that amounts not specified in the complaint were awarded as
damages. They disclaimed that Atty. Tansinsin was the administrator of the
fishpond.
On October 30, 1992, the Court of Appeals denied the motion for
reconsideration for lack of merit. It ruled that the Decision was not
prematurely promulgated "considering that the intervention proceeding is
solely between intervenor and defendants-appellants, which is completely
separable and has nothing to do with the merits of the appeal."
In the instant petition for review on certiorari, petitioners raise six (6) grounds
for giving due course to it. 11
Those grounds may be distilled into the
following: (a) the applicability of the principle of res judicata; (b) the
premature promulgation of the Decision of the Court of Appeals, and (c)
private respondent was not a sublesee of the fishpond under the law.
In arguing that the principle of res judicata applies in this case, petitioners
rely on the portion of the Decision 12
of the Court of Appeals in CA-G.R. No.
10415 that states:
We find no basis for declaring respondent Judge guilty of grave
abuse of discretion on this regard. The trial court's finding that

petitioner does not appear entitled to any contract or law to
retain possession of the fishpond in question since he is neither
an assignee or sub-lessee and, therefore, merely a stranger to
the contract of lease is a finding of fact review of which is not
proper in a certiorari proceedings. Not only is petitioner not a
party to the lease agreement over the fishpond in question but
also the very authority upon which he predicates his
possession over the fishpond — that the leasehold right of Luis
Keh had been assigned to him — undoubtedly lacks basis for
the very contract between Luis Keh and the lessors expressly
provides —
That the lessee cannot sub-lease above-
described fishpond nor assign his rights to
anyone.
xxx xxx xxx
(Emphasis supplied by petitioners.) 13
Petitioners assert that said Decision of the Court of Appeals which was in
effect upheld by this Court when it denied the petition for review on certiorari
in G.R. No. 64354 (Luis Crisostomo v. Intermediate Appellate Court), 14
is
"res judicata to the issue of possession in this case." 15
However, as
expressed in that quoted portion of the Decision in CA-G.R. No. 10415, the
issue of whether private respondent is an assignee or a sub-lessee "is a
finding of fact review of which is not proper in a certiorari proceeding" or the
proceeding in that case.
CA-G.R. No. 10415 was spawned by the lifting on January 11, 1980 of the
restraining order previously issued by the trial court on June 14, 1979.
Private respondent filed a special civil action of certiorari and injunction with
preliminary mandatory injunction and/or mandatory restraining order to
question the order of January 11, 1980. Thus, the issue in that petition was
whether or not the trial court gravely abused its discretion in lifting the
restraining order. The statement in that Decision of the Court of Appeals that
a writ of preliminary injunction may be denied "if the party applying for it has
insufficient title or interest to sustain it and no claim to an ultimate relief (is)
sought" by no means resolved the issue of who is entitled to possess the
fishpond. In denying the petition for certiorari, the Court of Appeals was
simply saying that there was no reason to restore private respondent to the
possession of the fishpond pursuant to the restraining order that he had
earlier obtained. The issue of possession was collaterally discussed only to
resolve the propriety of the lifting of the restraining order based on evidence
available at that time. Hence, there was no judgment on the merits in the
main case or in Civil Case No. 5610-M. Simply put, the Decision in CA-G.R.
No. 10415 involves an interlocutory order on the propriety of the lifting of the
restraining order and not a judgment on the merits of Civil Case No. 5610-M.
For res judicata to apply, the following requisites must concur: (a) the former
judgment must be final; (b) the court which rendered it had jurisdiction over
the subject matter and the parties; (c) the judgment must be on the merits,
and (d) there must be between the first and second actions identity of parties,
subject matter and causes of action. 16
The Decision in CA-G.R. No. 10415
having resolved only an interlocutory matter, the principle of res judicata
cannot be applied in this case. There can be no res judicata where the
previous order in question was not an order or judgment determinative of an
issue of fact pending before the court but was only an interlocutory order
because it required the parties to perform certain acts for final adjudication. 17
In this case, the lifting of the restraining order paved the way for the
possession of the fishpond on the part of petitioners and/or their
representatives pending the resolution of the main action for injunction. In
other words, the main issue of whether or not private respondent may be
considered a sublessee or a transferee of the lease entitled to possess the
fishpond under the circumstances of the case had yet to be resolved when
the restraining order was lifted.
Petitioners assail the Court of Appeals' Decision as "premature" and
therefore null and void, because prior to the promulgation of that Decision,
private respondent-intervenor Vicente Asuncion failed to furnish them with a
copy of his brief the assignment of errors of which allegedly "directly"
affected their rights and interests. 18
While it is true that petitioners were
deprived of the opportunity to contravene the allegations of the intervenor in
his brief, that fact can not result in the nullity of the Decision of the Court of
Appeals. 19
Vicente Asuncion intervened pro interesse suo or "according to
his interest." 20
Intervention pro interessse suo is a mode of intervention in
equity wherein a stranger desires to intervene for the purpose of asserting a
property right in the res, or thing, which is the subject matter of the litigation,
without becoming a formal plaintiff or defendant, and without acquiring
control over the course of a litigation, which is conceded to the main actors
therein. 21
In this case, intervenor Vicente Asuncion aimed to protect his right
as a usufructuary. Inasmuch as he has the same rights and interests as
petitioner Juan Perez, any judgment rendered in the latter's favor entitled him
to assert his right as such usufructuary against his co-usufructuary. Should

said intervenor claim his share in the usufruct, no rights of the petitioners
other than those of Juan Perez would be prejudiced thereby.
Worth noting is the fact that after the trial court had allowed Vicente
Asuncion's intervention pro interesse suo, petitioner Juan Perez filed a
petition for certiorari docketed as CA-G.R. No. 13519 to set aside the order
denying his motion to dismiss the pleading in intervention. In its Decision of
January 27, 1988, the Seventh Division of the Court of Appeals 22
denied the
petition for certiorari for lack of merit. It upheld the trial court's ruling to allow
the intervention pro interesse suo to protect Vicente Asuncion's right as a co-
usufructuary in the distribution or disposition of the amounts representing the
rentals that were deposited with the court. That Vicente Asuncion had filed
Civil Case No. 8215-M seeking recovery of his alleged share in the fruits of
the Papaya Fishpond from 1978 would not be a reason for the dismissal of
the motion for intervention pursuant to Rule 16, Sec. 1 (e) of the Rules of
Court. 23
The Court of Appeals explained as follows:
Indeed, if by means of intervention a stranger to a lawsuit is
permitted to intervene without thereby becoming a formal
plaintiff or defendant (Joaquin v. Herrera, 37 Phil. 705, 723
[1918]), then there is in the case at bar no identity of parties to
speak of. Lis pendens as a ground for a motion to dismiss
requires as a first element identity of parties in the two cases.
Nor is there an identity of relief sought. Civil Case No. 8295-M
seeks an accounting of the proceeds of the fishpond while Civil
Case No. 5610-M is for injunction to prevent the petitioner from
retaking the fishpond from Luis Crisostomo. The herein private
respondent sought to intervene in the latter case simply to
protect his right as usufructuary in the money deposited in the
court by the plaintiff Luis Crisostomo. We hold that in allowing
the intervention in this case the trial court acted with prudence
and exercised its discretion wisely. 24
Unconvinced by the Court of Appeals' Decision in CA-G.R. SP No. 13519,
petitioner Juan Perez filed a petition for review on certiorari with this Court
under G.R. No. 82096. On May 9, 1988, this Court denied the petition on the
grounds that the issues raised are factual and that there is no sufficient
showing that the findings of the respondent court are not supported by
substantial evidence or that the court had committed any reversible error in
the questioned judgment. 25
The Resolution of the Court dated May 9, 1988
became final and executory on August 26, 1988. 26
Moreover, granting that the intervention be considered as Vicente Asuncion's
"appeal," a litigant's failure to furnish his opponent with a copy of his appeal
does not suffice to warrant dismissal of that appeal. In such an instance, all
that is needed is for the court to order the litigant to furnish his opponent with
a copy of his appeal. 27
This is precisely what happened in this case. On May
13, 1992, the Court of Appeals issued a Resolution directing counsel for
intervenor to furnish herein petitioners with a copy of intervenor Vicente
Asuncion's brief within a 10-day period. It also granted petitioners an
opportunity to file a reply-brief or memorandum and the intervenor, a reply to
said memorandum. 28
That Resolution is proper under the premises because,
by the nature of an intervention pro interesse suo, it can proceed
independently of the main action. Thus, in the Resolution of October 30,
1992, in resolving the issue of the alleged prematurity of its Decision, the
Court of Appeals held that "the proceeding is solely between intervenor and
defendants-appellants, which is completely separable and has nothing to do
with the merits of the appeal." 29
At the hearing of Civil Case No. 5610-M, petitioner Juan Perez attempted to
establish the death on October 14, 1979 of Jorge Lorenzo, 30
the
usufructuary from whom Vicente Asuncion derived his right to intervene pro
interesse suo. Since under Article 603 of the Civil Code a usufruct is
extinguished "by the death of the usufructuary, unless a contrary intention
clearly appears," there is no basis by which to arrive at the conclusion that
the usufruct originally exercised by Jorge Lorenzo has indeed been
extinguished or, on the contrary, has survived Lorenzo's demise on account
of provisions in the document constituting the usufruct. That matter is best
addressed in Civil Case No. 8215-M wherein Vicente Asuncion seeks his
share as a transferee of the usufruct established for Jorge Lorenzo. All that is
discussed here is the matter of intervention pro interesse suo vis-a-vis the
issue of prematurity of the Decision of the Court of Appeals.
Petitioners' principal argument against the Court of Appeals' Decision in favor
of private respondent Crisostomo is that he could not have been an assignee
or sub-lessee of the fishpond because no contract authorized him to be so.
Petitioners' argument is anchored on factual issues that, however, have no
room for discussion before this Court. It is well-entrenched doctrine that
questions of fact are not proper subjects of appeal by certiorari under Rule
45 of the Rules of Court as this mode of appeal is confined to questions of
law. 31
Factual findings of the Court of Appeals are conclusive on the parties
and carry even more weight when said court affirms the factual findings of
the trial

court. 32
Accordingly, this review shall be limited to questions of law arising
from the facts as found by both the Court of Appeals and the trial court.
Admittedly, the contract between the usufructuaries and petitioner Keh has a
provision barring the sublease of the fishpond. However, it was petitioner
Keh himself who violated that provision in offering the operation of the
fishpond to private respondent. Apparently on account of private
respondent's apprehensions as regards the right of petitioners Keh and Lee
to transfer operation of the fishpond to him, on January 9, 1978, petitioner
Keh executed a document ceding and transferring his rights and interests
over the fishpond to petitioner Lee. That the same document might have
been a ruse to inveigle private respondent to agree to their proposal that he
operate the fishpond is of no moment. The fact is, petitioner Keh did transfer
his rights as a lessee to petitioner Lee in writing and that, by virtue of that
document, private respondent acceded to take over petitioner Keh's rights as
a lessee of the fishpond.
Although no written contract to transfer operation of the fishpond to private
respondent was offered in evidence, 33
the established facts further show that
petitioner Juan Perez and his counsel, petitioner Tansinsin, knew of and
acquiesced to that arrangement by their act of receiving from the private
respondent the rental for 1978-79. By their act of receiving rental from private
respondent through the peculiarly written receipt dated June 6, 1978,
petitioners Perez and Tansinsin were put in estoppel to question private
respondent's right to possess the fishpond as a lessee. Estoppel in pais
arises when one, by his acts, representations or admissions, or by his own
silence when he ought to speak out, intentionally or through culpable
negligence, induces another to believe certain facts to exist and such other
rightfully relies and acts on such belief, so that he will be prejudiced if the
former is permitted to deny the existence of such facts. 34
Nevertheless, we hesitate to grant private respondent's prayer that he should
be restored to the possession of the fishpond as a consequence of his
unjustified ejectment therefrom. To restore possession of the fishpond to him
would entail violation of contractual obligations that the usufructuaries have
entered into over quite a long period of time now. Supervening events, such
as the devaluation of the peso as against the dollar as well as the addition of
improvements in the fishpond that the succeeding lessees could have
introduced, have contributed to the increase in rental value of the property.
To place private respondent in the same position he was in before the lifting
of the restraining order in 1980 when he was deprived the right to operate the
fishpond under the contract that already expired in 1985 shall be to sanction
injustice and inequity. This Court, after all, may not supplant the right of the
usufructuaries to enter into contracts over the fishpond through this Decision.
Nonetheless, under the circumstances of the case, it is but proper that
private respondent should be properly compensated for the improvements he
introduced in the fishpond.1âwphi1.nêt
Art. 1168 of the Civil Code provides that when an obligation "consists in not
doing and the obligor does what has been forbidden him, it shall also be
undone at his expense." The lease contract prohibited petitioner Luis Keh, as
lessee, from subleasing the fishpond. In entering into the agreement for
pakiao-buwis with private respondent, not to mention the apparent artifice
that was his written agreement with petitioner Lee on January 9, 1978,
petitioner Keh did exactly what was prohibited of him under the contract — to
sublease the fishpond to a third party. That the agreement for pakiao-buwis
was actually a sublease is borne out by the fact that private respondent paid
petitioners Luis Keh and Juan Perez, through petitioner Tansinsin the
amount of annual rental agreed upon in the lease contract between the
usufructuaries and petitioner Keh. Petitioner Keh led private respondent to
unwittingly incur expenses to improve the operation of the fishpond. By
operation of law, therefore, petitioner Keh shall be liable to private
respondent for the value of the improvements he had made in the fishpond or
for P486,562.65 with interest of six percent (6%) per annum from the
rendition of the decision of the trial court on September 6, 1989. 35
The law supports the awards of moral and exemplary damages in favor of
private respondent and against the petitioners. Their conspiratorial scheme
to utilize private respondent's expertise in the operation of fishponds to bail
themselves out of financial losses has been satisfactorily established to
warrant a ruling that they violated Article 21 of the Civil Code and therefore
private respondent should be entitled to an award of moral damages. Article
21 states that "(a)ny person who wilfully causes loss or injury to another in a
manner that is contrary to morals, good customs or public policy shall
compensate the latter for the damage." Exemplary damages shall likewise be
awarded pursuant to Article 2229 of the Civil Code. 36
Because private
respondent was compelled to litigate to protect his interest, attorney's fees
shall also be awarded. 37
WHEREFORE, in light of the foregoing premises, the decision of the Court of
Appeals is AFFIRMED insofar as it (a) directs the release to private
respondent of the amounts of P128,572.00 and P123,993.85 deposited with
the Paluwagan ng Bayan Savings Bank in Paombong, Bulacan and (b)
requires private respondent Crisostomo to pay petitioner Juan Perez the

rental for the period June 1979 to January 1980 at the rate of P150,000.00
per annum less the amount of P21,428.00 already paid to usufructuary Maria
Perez. It should, however, be subject to the MODIFICATIONS that:
1. Petitioner Luis Keh shall pay private
respondent Luis Crisostomo in the amount of
P486,562.25 with legal interest from the rendition
of the judgment in Civil Case No. 5610-M or on
September 6, 1989, and
2. Petitioners be made liable jointly and severally
liable for moral damages of P50,000.00,
exemplary damages of P20,000 and attorney's
fees of P10,000.00.
No costs.
SO ORDERED.
G.R. No. L-22359 November 28, 1924
JULIO DE LA ROSA, plaintiff-appellant,
vs.
THE BANK OF THE PHILIPPINE ISLANDS, defendant-appellant.
Ramon Sotelo for plaintiff-appellant.
Araneta and Zaragoza for defendant-appellant.
ROMUALDEZ, J.:
This action was instituted on June 11, 1923, by means of a complaint on the
ground that the defendant bank started a contest of designs and plans for the
construction of a building, announcing that the prizes would be awarded not later
that on November 30, 1921; that the plaintiff took part in said contest, having
performed work and incurred expenses for that purpose; that said bank refrained
from naming judges and awarding the prizes in accordance with the conditions
stipulated. The plaintiff prays that judgment be rendered in his favor for the sum of
P30,000 as damages, with interest and the costs.
The defendant bank answered denying the facts contained in the second and
following paragraphs of the complaint.
After the trial, the court rendered judgment ordering the defendant bank to pay
the plaintiff an indemnity of P4,000 and the costs.
Both parties appealed from this judgment, the plaintiff assigning the following
errors as committed by the trial court:
1. In holding that the sum of P4,000 was a just and reasonable indemnity to
the plaintiff.
2. In not ordering the defendant bank to pay the P30,000 prayed for in the
complaint.
The defendant bank, in turn, assigned the following errors as committed by the
trial court:
1. In holding that the date set for the award of prizes is essential in the
contract.
2. In ordering that the sum of P4,000 be paid to the plaintiff.
The fundamental question on which the plaintiff's action depends is raised in
the first assignment of error made by the defendant bank, or, whether or not the date
set for the award of the prizes was essential in the contract and, therefore, whether or
not the failure to award the prizes on said date was breach of contract on the part of
the defendant.
First of all, we find that due to the fact that the bank started and advertised the
said contest, offering prizes under certain conditions, and the plaintiff prepared, by
labor and expense, and took part in said contest, the bank is bound to comply with
the promise made in the rules and conditions prepared and advertised by it.
A binding obligation may even originate in advertisements addressed
to the general public. (6 R. C. L., 600.)
It is an elementary principle that where a party publishes an offer to the
world, and before it is withdrawn another acts upon it, the party making the
offer is bound to perform his promise. This principle is frequently applied in
cases of the offer of rewards, . . . (6 R. C. L., 607.)
What is to be determined is whether or not the defendant bank was in default
in not awarding the prizes on November, 30, 1921.
The plaintiff contends that it was, according to paragraph 2 of article 1100 of
the Civil Code, the complete text of which is as follows:
Persons obliged to deliver or to do something are in default from the
moment the creditor demands of them judicially or extrajudicially the
fulfillment of their obligation.
Nevertheless, the demand of the creditor shall not be necessary in order
that the default may arise —
1. When the obligator or the law expressly so provides;
2. When by reason of the nature and circumstances of the obligation it
shall appear that the designation of the time at which the thing was to
be delivered or the service rendered was the principal inducement to
the creation of the obligation.
In reciprocal obligations neither of the obligators shall be in default if
the other does not fulfill or does not submit to the fulfillment of that which is
incumbent upon him. From the time on the obliges performs his obligation
the default begins for the other party.

And the party plaintiff contends that the said date was the principal
inducement because the current cost of concrete buildings at the time was fixed. The
fixation of said price cannot be considered as the principal inducement of the
contract, but undoubtedly only for the uniformity of the designs to be presented and
to secure greater justice in the appreciation of the relative merits of each work
submitted.
Such fixation of price, naturally, was not the principal inducement for the
contestants. Neither was it for the bank which could not certain that said price would
continue to be current price when it desired to construct the building designed.
We do not find sufficient reason for considering that the date set for the reward
of the prizes was the principal inducement to the creation of the obligation. And,
taking into consideration the criterion that must be followed in order to judge
whether or not the time for the performance of the obligation is the principal
inducement in a given case, we hold that it was not in the instant case.
The distinguished Manresa explains the matter in the following terms:
1awphi1.net
These words ("principal inducement" in paragraph 2 of article 1100 of
the Civil Code) whose special meaning in connection with this article and the
circumstances of each obligation does not permit of their being confused with
the permanent general idea, and the distinct clearness of consideration of
contracts, may give rise to serious doubts by reason of the breadth of
expression, and must be judged in each particular case, it being impossible to
give a general rule to explain them. It will for instance, be unquestionable
that the hypothesis implied in this exception is affected when the matter, for
instance, is the delivery of things of the rendition of services to be employed
in agricultural work, and the time of said work has been designated as the
date for the fulfillment of the obligation; it will also exist when, for instance,
fruits or any objects are to be delivered which might be used by the creditor
in industrial operations having a determinate period for carrying them out and
designated for their delivery; and, finally, it will also assist whenever, as in
these cases, it appears that the obligation would not have been created for a
date other than that fixed.
The defendant bank cannot be held to have been in default through the mere
lapse of time. For this judicial or extrajudicial demand was necessary for the
performance of the obligation, and it was not alleged here, nor does it appear that
before bringing this action the plaintiff had ever demanded it from the defendant
bank in any manner whatsoever. The defendant bank, therefore, was not in default.
The plaintiff's allegation that the defendant bank abstained from continuing the
contest was not proven. On the contrary, it was proved, and so stated in the decision
appealed from, that during the trial of this case in the Court of First Instance the
designs were on the way to New York where they were sent to a technical
committee.
This committee, according to the new evidence before us presented by the
defendant bank and which we now hold admissibe and admit, was appointed by the
defendant bank for the study and determination of the designs presented and entitled
to the prizes advertised, and which rendered its report and awarded the prizes in
accordance with the rules and conditions of the contract, except in regard to the date
of such award of prizes which, as we have found, is not essential to the contract in
question.
It appearing that the defendant bank was not in default it is needles to discuss
the other questions raised, all depending upon the existence of said default.
We find the plaintiff has no cause of action in this case,
The judgment appealed from is reversed and the defendant is entirely absolved
from the complaint, without any express finding as to costs. So ordered.
Johnson, Street, Malcolm, Villamor, Ostrand and Johns, JJ., concur.
PEDRO MARTINEZ,
Plaintiff-Appellant,
G. R. No. 7663
October 20, 1913
-versus-
MATIAS CAVIVES, ET AL.,
Defendants-Appellees.
ROBERT LINEAU, ADMINISTRATOR,
Intervener-Appellant.
D E C I S I O N
TRENT, J:
Pedro Martinez, the plaintiff in this case, seeks to recover from Matias
Cavives and Severino Cavives, the defendants, on some promissory notes
executed by them in 1896. The first note, in the sum of $4,317.15 Mexican
currency, was executed on April 8 of that year, and was jointly signed by
them and their brother, Carlos Cavives, now deceased. The note calls for
interest at ten per cent annum. Matias Cavives obtained $300 on April 30

$200 on May 30 and $200 on June 7 of that year, and Severino Cavives,
$600 on June 9 [all Mexican currency], each of which stipulated that the
sums mentioned therein had been borrowed under the same terms and
conditions as were expressed in the joint obligation of the three brothers
above mentioned. The due execution of all these notes is admitted. None of
these notes were ever paid by any of the three brothers. On June 14, 1898, the
deceased brother Carlos entered into an agreement with the plaintiff whereby
all the obligations contracted by the three brothers during the year 1896 were
liquidated and a new note was executed and signed by these two parties
(Exhibit 4), its amount, $9,483,5 reales, 17 cuartos, purporting to include the
principal and interest at the specified rate up to the date of its execution. The
evidence of record shows that Carlos Cavives, in executing this note, agreed
to obtain the signatures of his brothers to it, but this was never done. During
the settlement of the estate of the deceased Carlos, an agreement was entered
into by his widow and Pedro Martinez, whereby the latter agreed to accept
P3,000 in full satisfaction of his claim against her husband's estate, a sum
considerably less than the principal and accumulated interest of the original
notes. A note [Exhibit 5] was executed under these conditions, whereby the
widow was to pay its face value in annual installments.
The contention of the defendants, sustained by the Court below, was that the
original obligations had been novated by the agreement made in 1898
between Carlos Cavives and Pedro Martinez. It was held that as either party
to this agreement exercised proper diligence in securing the signatures of the
other brothers, there was a tacit consent to permit the obligation to stand as a
debt against Carlos Cavives alone. The fact that the compromise settlement
made between the plaintiff and the widow of Carlos Cavives made no
mention of the amounts borrowed by Matias and Severino Cavives was
deemed by the court further proof of the intention of the plaintiff to novate
the debts of the three brothers and hold only Carlos liable for their payment.
Article 1205 of the Civil Code reads as follows: "Novation, consisting in the
substitution of a debtor in the place of the original one, may be made without
the knowledge of the latter, but not without the consent of the creditor."
So far as Exhibit 4 is concerned, it cannot be presumed that the plaintiff
considered the liability of Carlos alone as better than the liability of all three
of the brothers, since Carlos promised, at his request, to secure the signatures
of his brothers to this document. Nor can it be presumed, in the absence of
evidence, that there was any consideration present to induce Carlos to
assume what was theretofore strictly a liability of his brothers. So that to
construe Exhibit 4 to the effect that by its terms Carlos was substituted as the
sole debtor of the plaintiff would mean that the latter accepted less security
for his loans than he originally had, and that the former assumed liabilities
which he was under no obligation to assume and for which he was no valid
consideration. At the time this instrument was executed, then, it was not the
intention of either of the signers to release these defendants as debtors of the
plaintiff. As to the subsequent silence of both parties to this agreement, We
do not consider that it was, at least so far as the plaintiff was concerned, of
any significance. He signed Exhibit 4 at the time Carlos Cavives signed it on
the condition that the latter would secure the signatures of his two brothers
to it, thereby creating a joint obligation against the three. Carlos Cavives
never secured the signatures of his brothers. The contract in question
contained mutual obligations which were to be fulfilled by each of the
signers, i.e., on the part of Carlos to secure the signatures of his brothers to
the instrument, and then on the part of the plaintiff to recognized it as a joint
obligation of the three brothers covering their indebtedness to him.
The last paragraph of Article 1100 of the Civil Code reads as follows: "In
mutual obligations, none of the persons bound shall incur default if the other
does not fulfill or does not submit to properly fulfill what is incumbent upon
him. From the time one of the persons obligated fulfills his obligation, the
default begins for the other party."
Until Carlos obtained the signatures of his brothers to this instrument, We
cannot say that the plaintiff was in any way bound to acknowledge it as
anything more than an executory contract containing a condition precedent
which was to be performed by Carlos Cavives before his [the plaintiff's]
obligation was due. Mere continued silence on his part could signify nothing
until the signatures of the two brothers had been secured. As further
indication that this contract [Exhibit 4] was not considered as discharging
the original obligation of the defendants in this case, it may be noted that the
plaintiff has never surrendered, nor was he ever called upon to surrender so
far as this record shows, the original promissory notes executed by these
defendants. They are still in his possession. Up to the time of the compromise
settlement between the plaintiff and the widow of Carlos, at least, there is not
a scintilla of evidence to show that either party to the contract of 1898
considered it as a discharge of the original debtors, Severino and Matias

Cavives. The compromise settlement with the widow of Carlos, Exhibit 5, is
relied upon to show novation. In this document, plaintiff makes the
settlement, in effect, that the whole sum of the liquidated obligation of the
brothers set forth in Exhibit 4 was a liability against the estate of Carlos. It is
urged that this shows the plaintiff's intention to novate the debt by
substituting Carlos as his sole debtor in lieu of the defendants. There is one
fact which points strongly against this conclusion. That is, that the present
action against these defendants was instituted some months previous to the
date of the compromise settlement and has been prosecuted by the plaintiff
with due diligence ever since its institution. But admitting, for the moment,
that by this compromise settlement he was desirous of so substituting Carlos
as his sole debtor in lieu of the defendants, it does not by any means follow
that he could do so without the consent of Carlos. The consent of the new
debtor is as essential to the novation as is that of the creditor. As We have
seen, there is nothing to show that Carlos ever consented to such an
arrangement. Indeed, the evidence is all the other way. A mere recital that he
had so consented to accept full liability for the debts of his brothers,
especially after his death, would not be sufficient to establish the fact. But We
cannot believe that this statement was intended to have any such meaning by
the plaintiff in view of the fact that at the time it was made he was actively
prosecuting a suit against the brothers who were originally liable as his
debtors, and the further fact that the total amount due him, including
interest, was greatly in excess of the sum due him in 1898.
Furthermore, the position taken by these defendants in their Amended
Answer is diametrically opposed to the defense of novation. In that Amended
Answer, they say: "That these defendants have never refused to pay the
proportion of the total amount borrowed which they justly owe, that is, one-
third of it, to Don Francisco Martinez, or his executor or administrator, or to
all of his heirs, but they do refuse to pay to one of the heirs what belongs to
all of them."
Article 1204 of the Civil Code reads: "In order that an obligation may be
extinguished by another which substituted it, it is necessary that it should be
so expressly declared, or that the old and new be incompatible in all points."
In its Decision of December 31, 1904, the Supreme Court of Spain said:
"Novation of contracts cannot be presumed in any case unless it is a
necessary result of the express will of the parties, or that the old and the new
obligations are incompatible in all points."
To the same effect is its Decision of January 25, 1899. In its Decision of
March 14, 1908, that High Court said [quoting from the syllabus]: "It is not
proper to consider an obligation novated by unimportant modifications
which do not alter its essence and when it is not extinguished by another
which takes its place or substitutes the person of the debtor." To the same
effect are the Decisions of April 15, 1909, and July 8, 1910.
In Latiolais, Admrx. vs. Citizens' Bank of Louisiana [33 La. Ann., 1444], one
Duclozel mortgaged property to the defendant band for the triple purpose of
obtaining shares in the capital stock of the bank, bonds which the bank was
authorized to issue, and loans to him as a stockholder. Duclozel subsequently
sold this mortgaged property to one Sproule, who, as one of the terms of the
sale, assumed the liabilities of his vendor to the bank. Sproule sold part of the
property to Graff and Chalfant. The debt becoming due, the bank brought
suit against the last two named persons and Sproule as owners. Duclozel was
not made a party. The bank discontinued these proceedings and subsequently
brought suit against Latiolais, administratrix of Duclozel, who had died.
The Court said:
"But the plaintiff insists that in its petition in the proceeding first
brought the bank ratified the sale made by Duclozel to Sproule, and by
the latter to other parties, in treating them as owners. Be that so, but it
does not follow, in the absence of either a formal and express or of an
implied consent to novate, which should be irresistibly inferred from
surrounding circumstances, that it has discharged Duclozel
unconditionally, and has accepted those parties as new delegated
debtors in his place. Nemo presumitur donare.
"Novation is a contract, the object of which is: either to extinguish an
existing obligation and to substitute a new one in its place; or to
discharge an old debtor and substitute a new one to him; or to
substitute a new creditor to an old creditor with regard to whom the
debtor is discharged.
"It is never presumed. The intention must clearly result from the
terms of the agreement or by a full discharge of the original debt.
Novation by the substitution of the new debtor can take place without
the consent of the debtor, but the delegation does not operate a

novation, unless the creditor has expressly declared that he intends to
discharge with delegating debtor, and the delegating debtor was not in
open failure or insolvency at the time. The mere indication by a debtor
of a person who is to pay in his place does not operate a novation.
Delegatus debitor est odiosus in lege.
"The most that could be inferred would be that the bank in the
exercise of a sound discretion, proposed to better its condition by
accepting an additional debtor to be and remain bound with the
original one."
In Fidelity L. & T. Co. vs. Engleby (99 Va., 168), the Court said: "Whether or
not a debt has been novated is a question of fact and depends entirely upon
the intention novated. In the absence of satisfactory proof to the contrary, the
presumption is that the debt has not been extinguished by taking the new
evidence of indebtedness; such new evidence, in the absence of an intention
expressed or implied, being treated as a conditional payment merely."
In Hamlin vs. Drummond [91 Me., 175; 39 A., 551], it was said that novation
is never presumed but must always be proven. In Netterstorm vs. Gallistel
[110 Ill. App., 352], it was said that the burden of establishing a novation is
on the party who asserts its existence; that novation is not easily presumed;
and that it must clearly appear before the court will recognize it.
There is no express stipulation in any of the documents of record that the
obligation of the defendants was novated, and the parole evidence tending to
show that it was novated is not sufficient in law to establish that fact.
During the progress to this case, Robert Lineau, administrator of the estate of
Francisco Martinez, father of the plaintiff, intervened claiming that the
obligations of the defendant were justly due to the estate of the said Francisco
Martinez. The notes themselves [Exhibit G] make no mention whatever of
Francisco Martinez, nor is there any evidence upon which the relation of
principal and agent between Francisco Martinez and Pedro Martinez could be
predicated. The notes must therefore be declared the sole property of the
plaintiff, and the intervener's claim must be denied.
For the foregoing reasons, it is hereby ordered that the defendants Severino
Cavives and Matias Cavives, comply with their obligations as set forth in
Exhibit G, by the payment of the principal and interest thereon at the rate of
ten per cent per annum as called for in the said notes, from the date of their
execution up to the full satisfaction of the judgment in this case. It is
understood that as to the first note signed by the three brothers, these
defendants are each liable for one-third of its principal and accumulated
interest; that Matias Cavives is alone liable for the notes executed by him of
April 30th, May 30th , and June 7th, 1896, whose amounts are $300, $200,
and $200, respectively; and that Severino Cavives is alone liable for the note
of June 9, 1896, signed by him, amounting to $600.
The judgment appealed from is reversed and in accordance with Sections 3,
4, and 5 of Act No. 1045, and the Decision of this Court in Urbano vs.
Ramirez [15 Phil. Rep., 371], the record will be returned to the Court below
and a new trial will be had for the sole purpose of ascertaining, after due
hearing, the present actual value of Mexican money as compared with
Philippine currency, in order to reduce the debt to Philippine currency. Final
judgment will then be entered against the defendant in accordance with this
decisions. Without costs.
Arellano, C.J., Torres, Johnson, Carson and Moreland, JJ.,
concur.
G.R. No. L-11328 January 15, 1918
RUFINA CAUSING, plaintiff-appellant,
vs.
ALFONSO BENCER, defendant-appellee.
Perfecto J. Salas Rodriguez for appellant.
De leon and Magalona and J. M.a Arroyo for appellee.
STREET, J.:
This action was instituted by Rufina Causing upon November 14, 1914, in the Court
of First Instance of Iloilo, to annul a contract for the sale of a parcel of land and to
recover the property itself from Alfonso Bencer as follows:
A parcel of land for rice and sugar cane in the barrio of Bokbokay, Vista
Alegre, district of Barotac Viejo municipality of Banate, Province of Iloilo, P.
I., having an area of about 70 hectares, bounded on the North by lands
belonging to Pacifico Bencer, Maria Salome Causing, and that of Alfonso
Balleza; on the South by those of Esteban Navarro, Maria Salome Causing,
and the heirs of Jorge Lachica; on the East by the Barotac Viejo River; and
on the West by those of Alfonso Bencer, Ignacio Balleza, Alfonso Balleza,
and Maria Salome Causing.

It appears that in years gone by this land had been owned by the plaintiff, a single
woman of full legal age, in common with certain nieces of hers who were then
minors and over whom she seems to have exercised an informal guardianship. In the
year 1909 negotiations were begun between her and the defendant with a view to the
sale of this land to him; and an agreement was effected by which she undertook to
convey the property to him for the sum of P1,200. Needing legal assistance in order
to get the conveyance drawn up properly, the parties repaired to the office of her
relative, Casiano Causing, attorney, but when he learned that the minors had an
interest in the property, he informed them that the conveyance could not be legalized
without judicial sanction.
The efforts to effect the transfer of title by deed was then abandoned for the time
being; but Bencer paid her P800 of the purchase price upon August 14, 1909, and
took possession of the land, with the understanding that he was to pay the balance
later and that meanwhile she would take steps to procure judicial approval of the sale
as regards the interests of the minors. In 1910 a new engagement was made in regard
to the price to be paid, which was to the effect that Bencer should pay P600 in
addition to what he had already paid or P1,400 in all, provided the plaintiff would
give him an extension of time to May, 1911, within which to pay the balance.
Time went on and neither party performed the engagement. Bencer's failure to pay
may have been due in part, as the plaintiff alleges, to his lack of ready money; or it
may have been due as he claims, to the fact that the plaintiff had become reluctant to
carry out the engagement and did not appear to collect the money at the place
stipulated as the place of payment. However this may be, it is evident that the
plaintiff was not yet in a position to execute a deed conveying the entire interest in
the property, as no steps had been taken to get judicial approval for the sale of the
shares belonging to the minors. However, as these heirs reached majority the
plaintiff successively acquired their respective interests by purchase, and before the
action in this case was instituted she had become the possessor of all their shares.
The property meanwhile increased in value-a circumstance possibly due in part to
improvements which the defendant claims to have made on property. In view of the
changed conditions, the plaintiff appears to have become desirous of rescinding the
contract, and accordingly brought this suit to annul the contract and recover the
property, together with the sum of P3,850 alleged to be due as damages for the use
and occupation of the land by the defendant during the time he has been in
possession. The plaintiff also prayed for general relief.
At the hearing the court below dismissed the action in so far as it sought the recovery
of the land and damages for use and occupation, but gave judgment in plaintiff's
favor for P600 with interest at 6 per cent from August 14, 1910, until paid. From this
action of the court the plaintiff has appealed.
We can see no valid reason why the plaintiff should be permitted to rescind this
contract, It is evidently a case where the contract entailed mutual obligation, and if
either party can be said to have been in default it was the plaintiff, Rufina Causing,
rather than the defendant, Bencer. In article 1100 of the Civil Code it is declared that
in mutual obligations neither party shall be deemed to be in default if the other does
not fulfill, or offer to fulfill his own obligation, and that from the time one person
obligated fulfills his obligation the default begins for the other party. We find that the
contract contemplated a conveyance of the entire interest in the land; and the plaintiff
clearly obligated herself to that extent. She was therefore not in a position to compel
the defendant to pay until she could offer to him a deed sufficient to pass the whole
legal estate; and for the same reason, she cannot now be permitted to rescind the
contract on the ground that the defendant has heretofore failed to pay the purchase
price.
At the time the plaintiff accepted the payment of P800 in 1909, from an agent of the
defendant, she executed a receipt in which it was said that this was an advance
payment for the land in case the sale that should be effected (anticipo del terreno en
caso se effective la venta); and from this it is argued that it was understood that the
negotiations were merely provisional and that the sale could be abandoned. We do
not so interpret the transaction; and it was evidently not so interpreted by the
defendant Bencer, who has been continuously in possession claiming as owner by
virtue of the original contract.
Reduced to its simplest terms the case presented is this.
One of several owners of a piece of property pro indiviso has made a valid contract
for the sale thereof with the understanding that she should convey the interest of her
coowners or procure the same to be conveyed. Since the contract was executed she
has acquired the interest of the coowners by purchase and is now in a position fully
to perform the contract. It results that she is, in our opinion, under a legal obligation
to transfer the estate, and is not entitled to rescind the contract and recover the
property from the person to whom she contracted to convey it. In this situation either
party is entitled to enforce performance, and neither will be relieved from his
obligation without the consent of the other. There can be no question of the power of
a person to bind himself to sell something which he does not yet possess; acquiring
title to the thing sold. The most reasonable interpretation of the action of the plaintiff
in buying out the minor heirs as they reached majority was that she thereby intended
to place herself in a position to comply with the contract which she had made with
the defendant Bencer. Of course if she had never acquired these interests an action
for damages would have been Bencer's only remedy.
Under the prayer for general relief the court gave judgment in favor of the plaintiff
for the sum of P600 the unpaid balance of the purchase money. This was proper. The

court also allowed interest on this sum from August 14, 1910. The right of the
plaintiff to recover interest for the period prior to the institution of the suit is
questionable in point of law, but the justice of allowing it is evident, in view of the
fact that the defendant has had continuous use of the property. As the defendant has
not appealed, or complained of the action of the court, the judgment will be affirmed
in all respects, with costs against the appellant. So ordered.
G.R. No. 77648 August 7, 1989
CETUS DEVELOPMENT, INC., petitioner,
vs.
COURT OF APPEALS and ONG TENG, respondents.
G.R. No. 77647 August 7, 1989
vs.
COURT OF APPEALS and EDERLINA NAVALTA, respondents.
G.R. No. 77649 August 7, 1989
vs.
COURT OF APPEALS and JOSE LIWANAG, respondents.
G.R. No. 77650 August 7, 1989
vs.
COURT OF APPEALS and LEANDRO CANLAS, respondents.
G.R. No. 77651 August 7, 1989
vs.
COURT OF APPEALS and VICTORIA SUDARIO respondents.
G.R. No.77652 August 7, 1989
vs.
COURT OF APPEALS and FLORA NAGBUYA respondents.
MEDIALDEA, J.:
This is a petition for review on certiorari of the decision dated January 30,
1987 of the Court of Appeals in CA-GR Nos. SP-07945-50 entitled, "Cetus
Development, Inc., Petitioner vs. Hon. Conrado T. Limcaoco, Presiding
Judge, Regional Trial Court of Manila, Branch Ederlina Navalta, et. al.,
respondents.
The following facts appear in the records:
The private respondents, Ederlina Navalta, Ong Teng, Jose Liwanag,
Leandro Canlas, Victoria Sudario, and Flora Nagbuya were the lessees of
the premises located at No. 512 Quezon Boulevard, Quiapo, Manila,
originally owned by the Susana Realty. These individual verbal leases were
on a month-to month basis at the following rates: Ederlina Navalta at the rate
of P80.50; Ong Teng at the rate of P96.10; Jose Liwanag at the rate of
P40.35; Leandro Canlas at the rate of P80.55; Victoria Sudario at the rate of
P50.45 and Flora Nagbuya at the rate of P80.55. The payments of the
rentals were paid by the lessees to a collector of the Susana Realty who
went to the premises monthly.
Sometime in March, 1984, the Susana Realty sold the leased premises to
the petitioner, Cetus Development, Inc., a corporation duly organized and
existing under the laws of the Philippines. From April to June, 1984, the
private respondents continued to pay their monthly rentals to a collector sent
by the petitioner. In the succeeding months of July, August and September
1984, the respondents failed to pay their monthly individual rentals as no
collector came.
On October 9, 1984, the petitioner sent a letter to each of the private
respondents demanding that they vacate the subject premises and to pay the
back rentals for the months of July, August and September, 1984, within
fifteen (15) days from the receipt thereof. Immediately upon the receipt of the
said demand letters on October 10, 1984, the private respondents paid their
respective arrearages in rent which were accepted by the petitioner subject
to the unilateral condition that the acceptance was without prejudice to the
filing of an ejectment suit. Subsequent monthly rental payments were
likewise accepted by the petitioner under the same condition.
For failure of the private respondents to vacate the premises as demanded in
the letter dated October 9, 1984, the petitioner filed with the Metropolitan
Trial Court of Manila complaints for ejectment against the manner, as follows:
(1) 105972-CV, against Ederlina Navalta (2) 105973-CV, against Jose
Liwanag; (3) 105974-CV, against Flora Nagbuya; (4) 105975-CV, against
Leandro Canlas; (5) 105976-CV, against Victoria Sudario and (6) 105977-
CV, against Ong Teng.
In their respective answers, the six (6) private respondents interposed a
common defense. They claimed that since the occupancy of the premises
they paid their monthly rental regularly through a collector of the lessor; that
their non-payment of the rentals for the months of July, August and
September, 1984, was due to the failure of the petitioner (as the new owner)

to send its collector; that they were at a loss as to where they should pay
their rentals; that sometime later, one of the respondents called the office of
the petitioner to inquire as to where they would make such payments and he
was told that a collector would be sent to receive the same; that no collector
was ever sent by the petitioner; and that instead they received a uniform
demand letter dated October 9, 1984.
The private respondents, thru counsel, later filed a motion for consolidation of
the six cases and as a result thereof, the said cases were consolidated in the
Metropolitan Trial Court of Manila, Branch XII, presided over by Judge
Eduardo S. Quintos, Jr. On June 4, 1985, the trial court rendered its decision
dismissing the six cases, a pertinent portion of which reads, as follows:
The records of this case show that at the time of the filing of
this complaint, the rentals had all been paid. Hence, the plaintiff
cannot eject the defendants from the leased premises, because
at the time these cases were instituted, there are no rentals in
arrears.
The acceptance of the back rental by the plaintiff before the
filing of the complaint, as in these case, the alleged rental
arrearages were paid immediately after receipt of the demand
letter, removes its cause of action in an unlawful detainer case,
even if the acceptance was without prejudice.
x x x.
Furthermore, the court has observed that the account involved
which constitutes the rentals of the tenants are relatively small
to which the ejectment may not lie on grounds of equity and for
humanitarian reasons.
Defendants' counterclaim for litigation expenses has no legal
and factual basis for assessing the same against plaintiff.
WHEREFORE, judgment is hereby rendered dismissing these
cases, without pronouncement as to costs.
Defendants' counterclaim is likewise dismissed.
SO ORDERED. (pp. 32-33, Rollo, G.R. No. 77647)
Not satisfied with the decision of the Metropolitan Trial Court, the petitioner
appealed to the Regional Trial Court of Manila and the same was assigned to
Branch IX thereof presided over by Judge Conrado T. Limcaoco (now
Associate Justice of the Court of Appeals).lâwphî1.ñèt In its decision dated
November 19, 1985, the Regional Trial Court dismissed the appeal for lack of
merit.
In due time, a petition for review of the decision of the Regional Trial Court
was filed by the petitioner with the Court of Appeals. Said petition was
dismissed on January 30, 1987, for lack of merit.
Aggrieved by the decision of the Court of Appeals, petitioner now comes to
Us in this petition, assigning the following errors:
ASSIGNMENT OF ERRORS
I
RESPONDENT COURT OF APPEALS COMMITTED A
GRAVE ABUSE OF DISCRETION, AMOUNTING TO LACK OF
JURISDICTION, WHEN IT ERRED IN HOLDING THAT THE
CAUSE OF ACTION FOR UNLAWFUL DETAINER IN THESE
CASES DID NOT EXIST WHEN THE COMPLAINTS WERE
FILED BECAUSE PRIVATE RESPONDENTS TENDERED,
AND PETITIONER ACCEPTED, THE PAYMENT OF THE
THREE (3) MONTHS RENTAL IN ARREARS WITHIN THE
FIFTEEN (15) DAY PERIOD FROM PRIVATE
RESPONDENTS' RECEIPT OF PETITIONER'S DEMAND
LETTERS TO VACATE THE SUBJECT PREMISES AND TO
PAY THE RENTALS IN ARREARS.
II
GRAVEABUSE OF DISCRETION, AMOUNTING TO LACK OF
JURISDICTION COMMITTED A GRAVE WHEN IT ERRED IN
AFFIRMING THE DISMISSAL OF THE COMPLAINTS IN
THESE CASES NOTWITHSTANDING THE EXISTENCE OF
VALID GROUNDS FOR THE JUDICIAL EJECTMENT OF
PRIVATE RESPONDENT.
III
GRAVE ABUSE OF DISCRETION, AMOUNTING TO LACK OF
JURISDICTION, WHEN IT ERRED IN HOLDING THAT THESE
CASES ARE CLASSIC EXAMPLES TO CIRCUMVENT THE
RENT CONTROL LAW. (pp. 164-165, Rollo, G.R. No. 77647)
The Court of Appeals defined the basic issue in this case as follows: whether
or not there exists a cause of action when the complaints for unlawful
detainer were filed considering the fact that upon demand by petitioner from
private respondents for payment of their back rentals, the latter immediately
tendered payment which was accepted by petitioner.

In holding that there was no cause of action, the respondent Court relied on
Section 2, Rule 70 of the Rules of Court, which provides:
Sec. 2. Landlord to proceed against tenant only after demand.
— No landlord or his legal representative or assign, shall be
such action against a tenant for failure to pay rent due or to
comply with the conditions of his lease, unless the tenant shall
have failed to pay such rent or comply with such conditions for
a period of fifteen (15) days or five (5) days in case of building,
after demand therefor, made upon qqqm personally, or by
serving written notice of such demand upon the person found
on the premises, or by posting such notice on the premises if
no persons be found thereon.
It interpreted the said provision as follows:
.....the right to bring an action of ejectment or unlawful detainer
must be counted from the time the defendants failed to pay rent
after the demand therefor. It is not the failure per se to pay rent
as agreed in the contract, but the failure to pay the rent after a
demand therefor is made, that entitles the lessor to bring an
action for unlawful detainer. In other words, the demand
contemplated by the above-quoted provision is not a demand to
vacate, but a demand made by the landlord upon his tenant for
the latter to pay the rent due if the tenant fails to comply with
the said demand with the period provided, his possession
becomes unlawful and the landlord may then bring the action
for ejectment. (p. 28, , G.R. No. 77647)
We hold that the demand required and contemplated in Section 2,
aforequoted, is a jurisdictional requirement for the purpose of bringing an
unlawful detainer suit for failure to pay rent or comply with the conditions of
lease. It partakes of an extrajudicial remedy that must be pursued before
resorting for judicial action so much so that when there is full compliance with
the demand, there arises no necessity for court action.
As to whether this demand is merely a demand to pay rent or comply with the
conditions of the lease or also a demand to vacate, the answer can be
gleaned from said Section 2. This section presupposes the existence of a
cause of action for unlawful detainer as it speaks of "failure to pay rent due or
comply with the conditions of the lease." The existence of said cause of
action gives the lessor the right under Article 1659 of the New Civil Code to
ask for the rescission of the contract of lease and indemnification for
damages, or only the latter, allowing the contract to remain in force.
Accordingly, if the option chosen is for specific performance, then the
demand referred to is obviously to pay rent or to comply with the conditions
of the lease violated. However, if rescission is the option chosen, the demand
must be for the lessee to pay rents or to comply with the conditions of the
lease and to vacate. Accordingly, the rule that has been followed in our
jurisprudence where rescission is clearly the option taken, is that both
demands to pay rent and to vacate are necessary to make a lessee a
deforciant in order that an ejectment suit may be filed (Casilan et al. vs.
Tomassi, L-16574, February 28,1964, 10 SCRA 261; Rickards vs. Gonzales,
109 Phil. 423, Dikit vs. Icasiano, 89 Phil. 44).lâwphî1.ñèt
Thus, for the purpose of bringing an ejectment suit, two requisites must
concur, namely: (1) there must be failure to pay rent or comply with the
conditions of the lease and (2) there must be demand both to pay or to
comply and vacate within the periods specified in Section 2, Rule 70, namely
15 days in case of lands and 5 days in case of buildings. The first requisite
refers to the existence of the cause of action for unlawful detainer while the
second refers to the jurisdictional requirement of demand in order that said
cause of action may be pursued.
It is very clear that in the case at bar, no cause of action for ejectment has
accrued. There was no failure yet on the part of private respondents to pay
rents for three consecutive months. As the terms of the individual verbal
leases which were on a month-to-month basis were not alleged and proved,
the general rule on necessity of demand applies, to wit: there is default in the
fulfillment of an obligation when the creditor demands payment at the
maturity of the obligation or at anytime thereafter. This is explicit in Article
1169, New Civil Code which provides that "(t)hose obliged to deliver or to do
something incur in delay from the time the obligee judicially or extrajudicially
demands from them the fulfillment of their obligation." Petitioner has not
shown that its case falls on any of the following exceptions where demand is
not required: (a) when the obligation or the law so declares; (b) when from
the nature and circumstances of the obligation it can be inferred that time is
of the essence of the contract; and (c) when demand would be useless, as
when the obligor has rendered it beyond his power to perform.
The demand required in Article 1169 of the Civil Code may be in any form,
provided that it can be proved. The proof of this demand lies upon the
creditor. Without such demand, oral or written, the effects of default do not
arise. This demand is different from the demand required under Section 2,
Rule 70, which is merely a jurisdictional requirement before an existing cause
of action may be pursued.

The facts on record fail to show proof that petitioner demanded the payment
of the rentals when the obligation matured. Coupled with the fact that no
collector was sent as previously done in the past, the private respondents
cannot be held guilty of mora solvendi or delay in the payment of rentals.
Thus, when petitioner first demanded the payment of the 3-month arrearages
and private respondents lost no time in making tender and payment, which
petitioner accepted, no cause of action for ejectment accrued. Hence, its
demand to vacate was premature as it was an exercise of a non-existing
right to rescind.
In contradistinction, where the right of rescission exists, payment of the
arrearages in rental after the demand to pay and to vacate under Section 2,
Rule 70 does not extinguish the cause of action for ejectment as the lessor is
not only entitled to recover the unpaid rents but also to eject the lessee.
Petitioner correctly argues that acceptance of tendered payment does not
constitute a waiver of the cause of action for ejectment especially when
accepted with the written condition that it was "without prejudice to the filing
of an ejectment suit". Indeed, it is illogical or ridiculous not to accept the
tender of payment of rentals merely to preserve the right to file an action for
unlawful detainer. However, this line of argument presupposes that a cause
of action for ejectment has already accrued, which is not true in the instant
case.
Petitioner likewise claims that its failure to send a collector to collect the
rentals cannot be considered a valid defense for the reason that sending a
collector is not one of the obligations of the lessor under Article 1654. While it
is true that a lessor is not obligated to send a collector, it has been duly
established that it has been customary for private respondents to pay the
rentals through a collector. Besides Article 1257, New Civil Code provides
that where no agreement has been designated for the payment of the
rentals, the place of payment is at the domicile of the defendants. Hence, it
could not be said that they were in default in the payment of their rentals as
the delay in paying the same was not imputable to them. Rather, it was
attributable to petitioner's omission or neglect to collect.
Petitioner also argues that neither is its refused to accept the rentals a
defense for non-payment as Article 1256 provides that "[i]f the creditor to
whom the tender of payment has been made refuses without just cause to
accept it, the debtor shall be released from responsibility by the consignation
of the thing due." It bears emphasis that in this case there was no unjustified
refusal on the part of petitioner or non-acceptance without reason that would
constitute mora accipiendi and warrant consignation. There was simply lack
of demand for payment of the rentals.
In sum, We hold that respondent Court of Appeals did not commit grave
abuse of discretion amounting to lack of jurisdiction in its conclusion affirming
the trial court's decision dismissing petitioner's complaint for lack of cause of
action. We do not agree, however, with the reasons relied upon.
ACCORDINGLY, the petition for review on certiorari is hereby DENIED for
lack of merit and the decision dated January 30, 1987 of respondent Court of
Appeals is hereby AFFIRMED.
SO ORDERED.
[G.R. No. 103577. October 7, 1996]
ROMULO A. CORONEL, ALARICO A. CORONEL, ANNETTE A.
CORONEL, ANNABELLE C. GONZALES (for herself and on behalf of
Floraida C. Tupper, as attorney-in-fact), CIELITO A. CORONEL, FLORAIDA
A. ALMONTE, and CATALINA BALAIS MABANAG, Petitioners, vs. THE
COURT OF APPEALS, CONCEPCION D. ALCARAZ and RAMONA
PATRICIA ALCARAZ, assisted by GLORIA F. NOEL as attorney-in-fact,
Respondents.
D E C I S I O N
MELO, J.:chanroblesvirtualawlibrary
The petition before us has its roots in a complaint for specific performance to compel
herein petitioners (except the last named, Catalina Balais Mabanag) to consummate
the sale of a parcel of land with its improvements located along Roosevelt Avenue in
Quezon City entered into by the parties sometime in January 1985 for the price of
P1,240,000.00.chanroblesvirtualawlibrary
The undisputed facts of the case were summarized by respondent court in this
wise:chanroblesvirtualawlibrary
On January 19, 1985, defendants-appellants Romulo Coronel, et. al. (hereinafter
referred to as Coronels) executed a document entitled "Receipt of Down Payment"
(Exh. "A") in favor of plaintiff Ramona Patricia Alcaraz (hereinafter referred to as
Ramona) which is reproduced hereunder:chanroblesvirtualawlibrary
RECEIPT OF DOWN PAYMENTchanroblesvirtualawlibrary
P1,240,000.00 - Total amountchanroblesvirtualawlibrary
50,000.00 - Down paymentchanroblesvirtualawlibrary
------------------------------------------chanroblesvirtualawlibrary
P1,190,000.00 - Balancechanroblesvirtualawlibrary
Received from Miss Ramona Patricia Alcaraz of 146 Timog, Quezon City, the sum of
Fifty Thousand Pesos purchase price of our inherited house and lot, covered by TCT

No. 119627 of the Registry of Deeds of Quezon City, in the total amount of
P1,240,000.00.chanroblesvirtualawlibrary
We bind ourselves to effect the transfer in our names from our deceased father,
Constancio P. Coronel, the transfer certificate of title immediately upon receipt of
the down payment above-stated.chanroblesvirtualawlibrary
On our presentation of the TCT already in or name, We will immediately execute the
deed of absolute sale of said property and Miss Ramona Patricia Alcaraz shall
immediately pay the balance of the P1,190,000.00.chanroblesvirtualawlibrary
Clearly, the conditions appurtenant to the sale are the
following:chanroblesvirtualawlibrary
1. Ramona will make a down payment of Fifty Thousand (P50,000.00) pesos upon
execution of the document aforestated;chanroblesvirtualawlibrary
2. The Coronels will cause the transfer in their names of the title of the property
registered in the name of their deceased father upon receipt of the Fifty Thousand
(P50,000.00) Pesos down payment;chanroblesvirtualawlibrary
3. Upon the transfer in their names of the subject property, the Coronels will execute
the deed of absolute sale in favor of Ramona and the latter will pay the former the
whole balance of One Million One Hundred Ninety Thousand (P1,190,000.00)
Pesos.chanroblesvirtualawlibrary
On the same date (January 15, 1985), plaintiff-appellee Concepcion D. Alcaraz
(hereinafter referred to as Concepcion), mother of Ramona, paid the down payment
of Fifty Thousand (P50,000.00) Pesos (Exh. "B", Exh.
"2").chanroblesvirtualawlibrary
On February 6, 1985, the property originally registered in the name of the Coronels
father was transferred in their names under TCT No. 327043 (Exh. "D"; Exh
"4")chanroblesvirtualawlibrary
On February 18, 1985, the Coronels sold the property covered by TCT No. 327043
to intervenor-appellant Catalina B. Mabanag (hereinafter referred to as Catalina) for
One Million Five Hundred Eighty Thousand (P1,580,000.00) Pesos after the latter
has paid Three Hundred Thousand (P300,000.00) Pesos (Exhs. "F-3"; Exh. "6-
C")chanroblesvirtualawlibrary
For this reason, Coronels canceled and rescinded the contract (Exh. "A") with
Ramona by depositing the down payment paid by Concepcion in the bank in trust for
Ramona Patricia Alcaraz.chanroblesvirtualawlibrary
On February 22, 1985, Concepcion, et. al., filed a complaint for a specific
performance against the Coronels and caused the annotation of a notice of lis
pendens at the back of TCT No. 327403 (Exh. "E"; Exh.
"5").chanroblesvirtualawlibrary
On April 2, 1985, Catalina caused the annotation of a notice of adverse claim
covering the same property with the Registry of Deeds of Quezon City (Exh. "F";
Exh. "6").chanroblesvirtualawlibrary
On April 25, 1985, the Coronels executed a Deed of Absolute Sale over the subject
property in favor of Catalina (Exh. "G"; Exh. "7").chanroblesvirtualawlibrary
On June 5, 1985, a new title over the subject property was issued in the name of
Catalina under TCT No. 351582 (Exh. "H"; Exh. "8").chanroblesvirtualawlibrary
(Rollo, pp. 134-136)chanroblesvirtualawlibrary
In the course of the proceedings before the trial court (Branch 83, RTC, Quezon
City) the parties agreed to submit the case for decision solely on the basis of
documentary exhibits. Thus, plaintiffs therein (now private respondents) proffered
their documentary evidence accordingly marked as Exhibits "A" through "J",
inclusive of their corresponding submarkings. Adopting these same exhibits as their
own, then defendants (now petitioners) accordingly offered and marked them as
Exhibits "1" through "10", likewise inclusive of their corresponding submarkings.
Upon motion of the parties, the trial court gave them thirty (30) days within which to
simultaneously submit their respective memoranda, and an additional 15 days within
which to submit their corresponding comment or reply thereto, after which, the case
would be deemed submitted for resolution.chanroblesvirtualawlibrary
On April 14, 1988, the case was submitted for resolution before Judge Reynaldo
Roura, who was then temporarily detailed to preside over Branch 82 of the RTC of
Quezon City. On March 1, 1989, judgment was handed down by Judge Roura from
his regular bench at Macabebe, Pampanga for the Quezon City branch, disposing as
follows:chanroblesvirtualawlibrary
WHEREFORE, judgment for specific performance is hereby rendered ordering
defendant to execute in favor of plaintiffs a deed of absolute sale covering that parcel
of land embraced in and covered by Transfer Certificate of Title No. 327403 (now
TCT No. 331582) of the Registry of Deeds for Quezon City, together with all the
improvements existing thereon free from all liens and encumbrances, and once
accomplished, to immediately deliver the said document of sale to plaintiffs and
upon receipt thereof, the plaintiffs are ordered to pay defendants the whole balance
of the purchase price amounting to P1,190,000.00 in cash. Transfer Certificate of
Title No. 331582 of the Registry of Deeds for Quezon City in the name of intervenor
is hereby canceled and declared to be without force and effect. Defendants and
intervenor and all other persons claiming under them are hereby ordered to vacate
the subject property and deliver possession thereof to plaintiffs. Plaintiffs claim for
damages and attorneys fees, as well as the counterclaims of defendants and
intervenors are hereby dismissed.chanroblesvirtualawlibrary
No pronouncement as to costs.chanroblesvirtualawlibrary

So Ordered.chanroblesvirtualawlibrary
Macabebe, Pampanga for Quezon City, March 1, 1989.chanroblesvirtualawlibrary
(Rollo, p. 106)chanroblesvirtualawlibrary
A motion for reconsideration was filed by petitioners before the new presiding judge
of the Quezon City RTC but the same was denied by Judge Estrella T. Estrada,
thusly:chanroblesvirtualawlibrary
The prayer contained in the instant motion, i.e., to annul the decision and to render
anew decision by the undersigned Presiding Judge should be denied for the
following reasons: (1) The instant case became submitted for decision as of April 14,
1988 when the parties terminated the presentation of their respective documentary
evidence and when the Presiding Judge at that time was Judge Reynaldo Roura. The
fact that they were allowed to file memoranda at some future date did not change the
fact that the hearing of the case was terminated before Judge Roura and therefore the
same should be submitted to him for decision; (2) When the defendants and
intervenor did not object to the authority of Judge Reynaldo Roura to decide the case
prior to the rendition of the decision, when they met for the first time before the
undersigned Presiding Judge at the hearing of a pending incident in Civil Case No.
Q-46145 on November 11, 1988, they were deemed to have acquiesced thereto and
they are now estopped from questioning said authority of Judge Roura after they
received the decision in question which happens to be adverse to them; (3) While it
is true that Judge Reynaldo Roura was merely a Judge-on-detail at this Branch of the
Court, he was in all respects the Presiding Judge with full authority to act on any
pending incident submitted before this Court during his incumbency. When he
returned to his Official Station at Macabebe, Pampanga, he did not lose his authority
to decide or resolve cases submitted to him for decision or resolution because he
continued as Judge of the Regional Trial Court and is of co-equal rank with the
undersigned Presiding Judge. The standing rule and supported by jurisprudence is
that a Judge to whom a case is submitted for decision has the authority to decide the
case notwithstanding his transfer to another branch or region of the same court (Sec.
9, Rule 135, Rule of Court).chanroblesvirtualawlibrary
Coming now to the twin prayer for reconsideration of the Decision dated March 1,
1989 rendered in the instant case, resolution of which now pertains to the
undersigned Presiding Judge, after a meticulous examination of the documentary
evidence presented by the parties, she is convinced that the Decision of March 1,
1989 is supported by evidence and, therefore, should not be
disturbed.chanroblesvirtualawlibrary
IN VIEW OF THE FOREGOING, the "Motion for Reconsideration and/or to Annul
Decision and Render Anew Decision by the Incumbent Presiding Judge" dated
March 20, 1989 is hereby DENIED.chanroblesvirtualawlibrary
SO ORDERED.chanroblesvirtualawlibrary
Quezon City, Philippines, July 12, 1989.chanroblesvirtualawlibrary
(Rollo, pp. 108-109)chanroblesvirtualawlibrary
Petitioners thereupon interposed an appeal, but on December 16, 1991, the Court of
Appeals (Buena, Gonzaga-Reyes, Abad-Santos (P), JJ.) rendered its decision fully
agreeing with the trial court.chanroblesvirtualawlibrary
Hence, the instant petition which was filed on March 5, 1992. The last pleading,
private respondents Reply Memorandum, was filed on September 15, 1993. The case
was, however, re-raffled to undersigned ponente only on August 28, 1996, due to the
voluntary inhibition of the Justice to whom the case was last
assigned.chanroblesvirtualawlibrary
While we deem it necessary to introduce certain refinements in the disquisition of
respondent court in the affirmance of the trial courts decision, we definitely find the
instant petition bereft of merit.chanroblesvirtualawlibrary
The heart of the controversy which is the ultimate key in the resolution of the other
issues in the case at bar is the precise determination of the legal significance of the
document entitled "Receipt of Down Payment" which was offered in evidence by
both parties. There is no dispute as to the fact that the said document embodied the
binding contract between Ramona Patricia Alcaraz on the one hand, and the heirs of
Constancio P. Coronel on the other, pertaining to a particular house and lot covered
by TCT No. 119627, as defined in Article 1305 of the Civil Code of the Philippines
which reads as follows:chanroblesvirtualawlibrary
Art. 1305. A contract is a meeting of minds between two persons whereby one binds
himself, with respect to the other, to give something or to render some
service.chanroblesvirtualawlibrary
While, it is the position of private respondents that the "Receipt of Down Payment"
embodied a perfected contract of sale, which perforce, they seek to enforce by means
of an action for specific performance, petitioners on their part insist that what the
document signified was a mere executory contract to sell, subject to certain
suspensive conditions, and because of the absence of Ramona P. Alcaraz, who left
for the United States of America, said contract could not possibly ripen into a
contract of absolute sale.chanroblesvirtualawlibrary
Plainly, such variance in the contending parties contention is brought about by the
way each interprets the terms and/or conditions set forth in said private instrument.
Withal, based on whatever relevant and admissible evidence may be available on
record, this Court, as were the courts below, is now called upon to adjudge what the
real intent of the parties was at the time the said document was
executed.chanroblesvirtualawlibrary
The Civil Code defines a contract of sale, thus:chanroblesvirtualawlibrary

147028237 oblicon-cases-from-1168-to-1170edted

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