Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. L-932 December 31, 1902 PEDRO REGALADO, plaintiff-appellee, vs.

LUCHSINGER & CO., defendants-appellants. Manuel M. de Hazañas, for appellants. Ramon Avanceña, for appellee. SMITH, J.: This is an appeal by Messrs. Luchsinger & Co., against a judgment of the Court of First Instance of the Province of Iloilo. No motion was made for a new trial in the court below, nor was any exception taken other than that against the judgment. This court, therefore can only consider in this instance whether the pleadings and facts admitted and those found by the Court of First Instance are sufficient to support the judgment by him rendered. From the admissions in the pleadings and from the judgment sought to be reversed the following appear to be the facts in the case: In March, 1893, Messrs. Luchsinger & Co. brought an executive action against Jose Regalado y Santa Ana for the recovery of 3,929 pesos and 60 cents, alleged to have been owed by the latter upon a promissory note, and, among other property of his, attached a certain warehouse and lot which it is admitted the maker of the note at that time possessed. In 1896 the Court of First Instance entered a judgment in favor of Luchsinger & Co. and against Jose Regalado y Santa Ana for the total amount of the note, interest, and costs, which judgment was finally affirmed by the Royal Audiencia of Manila in 1897. The record and the judgment so affirmed were returned to the Court of First Instance of Iloilo for execution, but, owing to the complications arising from claims made by third persons to some of the personality embargoed, the destruction of part of the official record, and the general disturbance occasioned by the Spanish-American and Filipino wars, nothing further was done in the case until the 13th of April, 1900, upon which date the warehouse and lot which this action concerns and which were under attachment, were put up at public auction by an order of the court of the 30th of that month. On the day of the sale Pedro Regalado, a son of Jose Regalado y Santa Ana, instituted this suit in intervention under claim of ownership, and sought to obtain the suspension of the sale and the dissolution of the attachment, upon the ground that the judgment debtor was not, and that

he, the said Pedro Regalado, was the absolute owner of the property to be sold. Luchsinger & Co. opposed the contention of Pedro Regalado as to the ownership of the property attached, alleging that the acquisition of the property by the latter occurred subsequently to the attachment levied by them, and was therefore unavailing. In consequence of the filing of this complaint in intervention the sale of the warehouse and lot was suspended, and has so continued up to the present time. On the 21st of March, 1902, more than one year before Luchsinger & Co. sought to obtain payment of their note, Jose Regalado y Santa Ana executed to Samuel Bischoff a mortgage on the warehouse and lot in question, as security for the payment for the latter of the sum of $7,024.74. This mortgage was recorded in Iloilo on the 10th of June, 1892, and was assigned to Jose Maria Regalado by the mortgagee in July 12, 1897, but the instrument of assignment was never recorded in the register. Jose Maria Regalado, as owner of the Bischoff mortgage, received the sum of $9,834.48 in payment thereof, and canceled the mortgage in favor of the mortgagor, Jose Regalado y Santa Ana on the sum 28th of March, 1900; but the cancellation was not recorded in the register. On the 2nd of March, 1893, Jose Regalado y Santa Ana executed a second mortgage upon the same warehouse and lot in favor of Alejandro Montelibano, to secure to him they payment of the sum of $7,984.87, which mortgage appears to have been recorded on the 18th of March, 1893. The Montelibano mortgage was assigned by the Mortgagee to Jose Maria Regalado on the 8th of August, 1895, and the instrument of assignment was duly recorded on June 19, 1896. Jose Maria Regalado, as owner of the Montelibano mortgage, received the sum due thereon, amounting to $7,984.87, and canceled the same in favor of Jose Regalado y Santa Ana on March 9, 1901, but did not record its cancellation. Pedro Regalado, the plaintiff in this action, purchased the warehouse and lot above referred to subsequent to the levy of attachment by Luchsinger & Co. for the sum $15,000, and the instrument of conveyance in his favor was recorded in the register on May 25, 1900. The $15,000 which was the consideration for the sale made by Jose Regalado y Santa Ana to his son Pedro was devoted to the satisfaction of the Bischoff and Montelibano mortgages, transferred, as above stated, to Jose Maria Regalado. Upon the facts the Court of First Instance dismissed the action brought by the plaintiff, Pedro Regalado, with the costs to the latter, and ordered execution in favor of Luchsinger & Co., as prayed for, against Jose Regalado y Santa Ana for the sum total of their claim, with the interest and costs, and ordered that the warehouse and lot be sold.

The Court of First Instance nevertheless recognized Pedro Regalado as a preferred creditor with respect to Luchsinger & Co. for the sum of $15,000, devoted to the payment of the Bischoff and Montelibano mortgages, and decided that this sum, in addition to the expenses of repairs and preservation of the property, less the rents, issues and profits obtained by him from the said property, should be first paid to the plaintiff, and that the product of the sale should be applied in the second place to the satisfaction of the claim of Luchsinger & Co., and that the balance, if any, should be paid to Pedro Regalado. The plaintiff alleged in his complaint that he was the owner of the property attached by the judgment creditors. He did not allege or claim at any time in the course of the proceedings that he was a proferred creditor. The introduction by him into the suit of the Bischoff and Montelibano mortgages was not for the purpose of proving that he had a preferred claim upon the money which might be obtained by the judicial sale of the warehouse and lot, but only to show that he was the real owner of the property attached, purchased for a valuable consideration, and that the sale made to him by his father was a true and not a fictitious sale. Pedro Regalado intervened in the executive action upon the sole ground that he was the owner of the property attached, and the judicial sale of the property directed by the Court of First Instance was suspended upon this ground ² a result which could not have followed had the plaintiff sought to make use of the appropriate remedy available to a preferred creditor. (See arts. 1514, 1517, and 1518, of the Spanish Law of Civil Procedure.) This case was considered and tried by both parties as an intervention under the claim of ownership, and not as an intervention by a preferred creditor. The only question of fact or law raised by the pleadings was that of ownership, and to this issue alone the judgment of the court should have been limited. The evidence might have been quite sufficient to justify the belief of the learned judge of First Instance that Pedro Regalado was rather a preferred creditor than the owner, but as the claim to a preferred credit with respect to the property of the judgment debtor was not raised by the pleadings, judgment should not have been rendered in favor of the plaintiff upon this consideration of the facts. The purpose of the pleadings according to the Spanish procedure was that of stating therein, in a clear and precise manner, the points of fact and law in controversy between the parties litigant in such a way that the court might be informed of the issues, and that the parties might be prepared to contest the debated points. The court was without authority to raise or decide issues not presented by the pleadings. In this case the question as to whether the plaintiff was or was not a preferred creditor by reason of having paid the Montelibano and Bischoff mortgages was raised by the court itself, and the case was decided upon this issue without previous notice to the parties. The plaintiff may or may not have ground of complaint, but it is certain that the defendants have sufficient reason to object to a judgment which gives to

the plaintiff a character which he has never claimed and which, therefore, the appellants had no opportunity to oppose. The judgment of the court below is therefore reversed, with the costs to the appellee. In view of the condition of the record we are satisfied that justice requires that the case be returned to the court below for a new trial, and the clerk is directly to remand the case, after the entry of the judgment, in accordance with this decision. So ordered. Arellano, C.J., Torres, Cooper, Willard, and Ladd, JJ., concur. Mapa, J., disqualified. Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. L-11386 March 31, 1917 EMILIO NATIVIDAD, administrator of the estate of the deceased Tiburcio Salvador y Reyes, petitioner-appellant, vs. BASILIA GABINO, respondent-appellee. Herrero and Marasigan and I. Santiago for appellant. Perfecto Gabriel for appellee. TORRES, J.: This is an appeal, filed by the administrator of the estate of the decedent Tiburcio Salvador y Reyes, from the order of August 21, 1915, by which the judge of the Court of First Instance of Manila, interpreting the true wishes of the testator, expressed the opinion that the ownership and dominion of the property mentioned in clause 6 of the will should be awarded to Basilia Gabino, subject to the reservation made in behalf of Lorenzo Salvador and Emilio Natividad. Therefore the trial court ordered an amendment made to the fourth basis for the proposed partition of the decedent's estate, presented by the testamentary executor, and, as soon as such be made, a day set for the hearing and approval of the proposed amended partition. The testator Salvador y Reyes contracted a valid and legal marriage with Anselma Nicasio, who died in 1868, leaving a daughter named Higinia who married Clemente Natividad. Higinia Salvador died in 1913, survived by two children Emilio and Purificacion, both surnamed Natividad y Salvador. Tiburcio Salvador disposed of all his property in the manner recorded in the will executed in legal form on November 9, 1914, instituting as sole heirs his grandchildren Emilio and Purificacion, both surnamed Natividad y Salvador. In the sixth clause of this will the testator left to Basilia Gabino the legacy mentioned therein. Literally, this clause is as follows: I bequeath to Doña Basilia Gabino the ownership and dominion of the urban property, consisting of a house and lot situated on Calle Lavezares of the said district of San Nicolas and designated by No.

520, and in addition eleven meters by two meters of the lot designated by No. 419, situated on Calle Madrid. This portion shall be taken from that part of the lot which is adjacent to the rear of said property No. 520. If the said legatee should die, Lorenzo Salvador shall be obliged to deliver this house, together with the lot on which it stands, to my grandson Emilio Natividad, upon payment by the latter to the former of the sum of four thousand pesos (P4,000), Philippine currency. The executor of the estate of the decedent is the decedent's own heir, Emilio Natividad, who in due season and by counsel presented to the court for its approval a proposed partition of the property pertaining to the estate, setting forth in the fourth basis the following relative to the legacy made to Basilia Gabino: Summarizing the statements made in respect to this matter, we are of the opinion that the sixth clause expresses in itself a right of usufruct, in favor of Doña Basilia Gabino, of the house at No. 520 Calle Lavezares, and a general legacy in favor of Lorenzo Salvador of the sum of P4,000 whenever Basilia should die; but that the ownership of the property upon which this right and legacy are established belongs to the heir Emilio Natividad who, by the express will of the testator, had been made liable for these encumbrances. By a writing of August 5, 1915, counsel for the legatee Basilia Gabino opposed the approval of the proposed partition with regard to the adjudication to the legatee of the usufruct only of the property at No. 520 Calle Lavezares, claiming that said legatee ought to be recognized as entitled to the dominion and ownership of the same. For this and the other reasons set forth, her counsel requested that the testamentary executor be ordered to amend the fourth basis of the proposed partition in order that ownership and dominion, instead of usufruct only, of said property be adjudicated to the objector-legatee, Basilia Gabino. After proper legal steps had been taken and the written briefs of the parties and the schedule of the proposed partition filed by the testamentary executor had been examined, the trial judge issued the order aforementioned. Appeal was taken by counsel for the executor to this court, and a transcript of the record of the proceedings below was forwarded to the clerk of this court. The only question raised by this appeal and submitted to us for decision is: What construction must be given to the above-quoted sixth clause of the will executed by Tiburcio Salvador? A person is entirely free to make his will in such manner as may best please him, provided the testamentary provisions conform to law and meet its requirements. He may impose conditions, either with respect to the institution of heirs or to the designation of legatees, and, when the conditions imposed upon the former or the latter do not fall within the provisions of those articles of the Civil Code touching heirs and legatees,

they shall be governed by the rules therein prescribed for conditional obligations, (Civ. Code, arts. 790 and 791.) In the sixth clause of the will executed by the decedent Tiburcio Salvador y Reyes, he bequeathed to Basilia Gabino the ownership and dominion of the property therein specified as to its location and other circumstances, on condition that if the legatee should die Lorenzo Salvador would be obliged, upon the payment of P4,000 by the testator's grandson and heir Emilio Natividad, to hand over this property to the latter. The condition imposed by the testator in the double legacy mentioned depends upon the happening of the event constituting the condition, to wit, the death of the legatee Basilia Gabino, a perfectly legal condition according to article 1114 of the Civil code, as it is not impossible of performance and is not contrary to law or public morals, as provided in article 1116 of said code. The moment the legatee Gabino dies the other legatee, Lorenzo Salvador, is obliged to deliver the property to the heir Emilio Natividad who, in his turn and in exchange, must pay the legatee Salvador the sum of P4,000, thereby fulfilling the double legacy contained in the said sixth clause of the will, the first of these legacies being the voluntary reservation to Basilia Gabino of the ownership of the said house, and the second, the conditional legacy of P4,000 to Lorenzo Salvador. Making use of his right, the testator provided in his will that the dominion, that is, the ownership and possession of his house situated on Calle Lavezares, No. 520 together with a part of the lot at No. 419, should be delivered as a legacy, provided that if the legatee should die, this property instead of passing to the successor, would revert to the testator's grandson and heir, provided that he in turn would pay to Lorenzo Salvador the sum of P4,000. It cannot be understood that the legacy conveyed only the usufruct of the property because the plain and literal meaning of the words employed by the testator in the said clause sixth clearly shows beyond all doubt the express wished of the testator who, establishing a voluntary reservation of the ulterior and final disposition of the bequeathed property, ordered that the legatee's right of dominion should end at her death, and that on this occurrence his wish was that the ownership of the property should pass to Emilio Natividad, provided the latter in turn delivered said P4,000 to Lorenzo Salvador who appears to be the son of the legatee Gabino. If the provisions of article 675 of the Civil Code are to be complied with, it cannot be understood that the testator meant to bequeath to Basilia Gabino the mere usufruct of the property, inasmuch as, by unmistakable language employed in the said sixth clause, he bequeathed her the ownership or dominion of the said property ² language which expresses without the slightest doubt his wishes which should be complied with literally, because it is constant rule or jurisprudence that in matters of last wills and testaments the testator's will is the law.

It is true that the legatee could not make any disposal of the bequeathed real property to be effective after her death, nor could the property be acquired from her by her heir through testate or intestate succession; but if we take into account that the institution of donations and legacies depends on the full free will of the testator, and that if the testator intended no more than that Basilia Gabino should enjoy the ownership of the property during her lifetime, this testamentary provisions is not contrary to law or to public morals, inasmuch as the testator thereby intended that the property should revert to its lawful heir, the latter being obliged to make a monetary compensation to Lorenzo Salvador who appears to be the successor of the legatee Gabino. For the foregoing reasons, considering that the order appealed from is in accordance with law and that the several features of the sole assignment of error made thereto are without merit, the said order of August 21, 1915, must be affirmed, with the costs against the appellant. So ordered. Carson, Trent and Araullo, JJ., concur. Moreland, J., concurs in the result. Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. L-24190 July 13, 1926 GEORGE L. PARKS, plaintiff-appellant, vs. PROVINCE OF TARLAC, MUNICIPALITY OF TARLAC, CONCEPCION CIRER, and JAMES HILL, her husband,defendants-appellees. Jos. N. Wolfson for appellant. Provincial Fiscal Lopez de Jesus for the Province and Municipality of Tarlac. No appearance for the other appellees. AVANCEÑA, C. J.: On October 18, 1910, Concepcion Cirer and James Hill, the owners of parcel of land No. 2 referred to in the complaint, donated it perpetually to the municipality of Tarlac, Province of Tarlac, under certain conditions specified in the public document in which they made this donation. The donation was accepted by Mr. Santiago de Jesus in the same document on behalf of the municipal council of Tarlac of which he was the municipal president. The parcel thus donated was later registered in the name of the donee, the municipality of Tarlac. On January 15, 1921, Concepcion Cirer and James Hill sold this parcel to the herein plaintiff George L. Parks. On August 24, 1923, the municipality of Tarlac transferred the parcel to the Province of Tarlac which, by reason of this transfer, applied for and obtained the registration thereof in its name, the corresponding certificate of title having been issued to it.

The plaintiff, George L. Parks, alleging that the conditions of the donation had not been complied with and invoking the sale of this parcel of land made by Concepcion Cirer and James Hill in his favor, brought this action against the Province of Tarlac, the municipality of Tarlac, Concepcion Cirer and James Hill and prayed that he be declared the absolute owner entitled to the possession of this parcel, that the transfer of the same by the municipality of Tarlac to the Province of Tarlac be annulled, and the transfer certificate issued to the Province of Tarlac cancelled. The lower court dismissed the complaint. The plaintiff has no right of action. If he has any, it is only by virtue of the sale of this parcel made by Concepcion Cirer and James Hill in his favor on January 15, 1921, but that sale cannot have any effect. This parcel having been donated by Concepcion Cirer and James Hill to the municipality of Tarlac, which donation was accepted by the latter, the title to the property was transferred to the municipality of Tarlac. It is true that the donation might have been revoked for the causes, if any, provided by the law, but the fact is that it was not revoked when Concepcion Cirer and James Hill made the sale of this parcel to the plaintiff. Even supposing that causes existed for the revocation of this donation, still, it was necessary, in order to consider it revoked, either that the revocation had been consented to by the donee, the municipality of Tarlac, or that it had been judicially decreed. None of these circumstances existed when Concepcion Cirer and James Hill sold this parcel to the plaintiff. Consequently, when the sale was made Concepcion Cirer and James Hill were no longer the owners of this parcel and could not have sold it to the plaintiff, nor could the latter have acquired it from them. But the appellant contends that a condition precedent having been imposed in the donation and the same not having been complied with, the donation never became effective. We find no merit in this contention. The appellant refers to the condition imposed that one of the parcels donated was to be used absolutely and exclusively for the erection of a central school and the other for a public park, the work to commence in both cases within the period of six months from the date of the ratification by the partes of the document evidencing the donation. It is true that this condition has not been complied with. The allegation, however, that it is a condition precedent is erroneous. The characteristic of a condition precedent is that the acquisition of the right is not effected while said condition is not complied with or is not deemed complied with. Meanwhile nothing is acquired and there is only an expectancy of right. Consequently, when a condition is imposed, the compliance of which cannot be effected except when the right is deemed acquired, such condition cannot be a condition precedent. In the present case the condition that a public school be erected and a public park made of the donated land, work on the same to commence within six months from the date of the ratification of the donation by the parties, could not be complied with except after giving effect to the donation. The donee could not do any work on the donated land if the donation had not really been effected, because it would be an

invasion of another's title, for the land would have continued to belong to the donor so long as the condition imposed was not complied with. The appellant also contends that, in any event, the condition not having been complied with, even supposing that it was not a condition precedent but subsequent, the non-compliance thereof is sufficient cause for the revocation of the donation. This is correct. But the period for bringing an action for the revocation of the donation has prescribed. That this action is prescriptible, there is no doubt. There is no legal provision which excludes this class of action from the statute of limitations. And not only this, ² the law itself recognizes the prescriptibility of the action for the revocation of a donation, providing a special period of five years for the revocation by the subsequent birth of children (art. 646, Civil Code), and one year for the revocation by reason of ingratitude. If no special period is provided for the prescription of the action for revocation for noncompliance of the conditions of the donation (art. 647, Civil Code), it is because in this respect the donation is considered onerous and is governed by the law of contracts and the general rules of prescription. Under the law in force (sec. 43, Code of Civ. Proc.) the period of prescription of this class of action is ten years. The action for the revocation of the donation for this cause arose on April 19, 1911, that is six months after the ratification of the instrument of donation of October 18, 1910. The complaint in this action was presented July 5, 1924, more than ten years after this cause accrued. By virtue of the foregoing, the judgment appealed from is affirmed, with the costs against the appellant. So ordered. Street, Villamor, Ostrand, Johns, Romualdez and Villa-Real, JJ., concur. Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. L-5003 June 27, 1953 NAZARIO TRILLANA, administrator-appellee, vs. QUEZON COLLEGE, INC., claimant-appellant. Singson, Barnes, Yap and Blanco for appellant. Delgado, Flores & Macapagal for appellee. PARAS, J.: Damasa Crisostomo sent the following letter to the Board of Trustees of the Quezon College: June 1, 1948 The BOARD OF TRUSTEES Quezon College Manila

Gentlemen: Please enter my subscription to dalawang daan (200) shares of your capital stock with a par value of P100 each. Enclosed you will find (Babayaran kong lahat pagkatapos na ako ay makapag-pahuli ng isda) pesos as my initial payment and the balance payable in accordance with law and the rules and regulations of the Quezon College. I hereby agree to shoulder the expenses connected with said shares of stock. I further submit myself to all lawful demands, decisions or directives of the Board of Trustees of the Quezon College and all its duly constituted officers or authorities (ang nasa itaas ay binasa at ipinaliwanag sa akin sa wikang tagalog na aking nalalaman). Very respectfully, (Sgd.) DAMASA CRISOSTOMO Signature of subscriber Nilagdaan sa aming harapan: JOSE CRISOSTOMO EDUARDO CRISOSTOMO Damasa Crisostomo died on October 26, 1948. As no payment appears to have been made on the subscription mentioned in the foregoing letter, the Quezon College, Inc. presented a claim before the Court of First Instance of Bulacan in her testate proceeding, for the collection of the sum of P20,000, representing the value of the subscription to the capital stock of the Quezon College, Inc. This claim was opposed by the administrator of the estate, and the Court of First Instance of Bulacan, after hearing issued an order dismissing the claim of the Quezon College, Inc. on the ground that the subscription in question was neither registered in nor authorized by the Securities and Exchange Commission. From this order the Quezon College, Inc. has appealed. It is not necessary for us to discuss at length appellant's various assignments of error relating to the propriety of the ground relief upon by the trial court, since, as pointed out in the brief for the administrator and appellee, there are other decisive considerations which, though not touched by the lower court, amply sustained the appealed order. It appears that the application sent by Damasa Crisostomo to the Quezon College, Inc. was written on a general form indicating that an applicant will enclose an amount as initial payment and will pay the balance in accordance with law and the regulations of the College. On the other hand, in the letter actually sent by Damasa Crisostomo, the latter (who requested that her subscription for 200 shares be entered) not only did not enclose any initial payment but stated that "babayaran kong lahat pagkatapos na ako ay makapagpahuli ng isda." There is nothing in the record to show that the Quezon College, Inc. accepted the term of payment suggested by Damasa Crisostomo, or that if there was any

acceptance the same came to her knowledge during her lifetime. As the application of Damasa Crisostomo is obviously at variance with the terms evidenced in the form letter issued by the Quezon College, Inc., there was absolute necessity on the part of the College to express its agreement to Damasa's offer in order to bind the latter. Conversely, said acceptance was essential, because it would be unfair to immediately obligate the Quezon College, Inc. under Damasa's promise to pay the price of the subscription after she had caused fish to be caught. In other words, the relation between Damasa Crisostomo and the Quezon College, Inc. had only thus reached the preliminary stage whereby the latter offered its stock for subscription on the terms stated in the form letter, and Damasa applied for subscription fixing her own plan of payment, ² a relation, in the absence as in the present case of acceptance by the Quezon College, Inc. of the counter offer of Damasa Crisostomo, that had not ripened into an enforceable contract. Indeed, the need for express acceptance on the part of the Quezon College, Inc. becomes the more imperative, in view of the proposal of Damasa Crisostomo to pay the value of the subscription after she has harvested fish, a condition obviously dependent upon her sole will and, therefore, facultative in nature, rendering the obligation void, under article 1115 of the old Civil Code which provides as follows: "If the fulfillment of the condition should depend upon the exclusive will of the debtor, the conditional obligation shall be void. If it should depend upon chance, or upon the will of a third person, the obligation shall produce all its effects in accordance with the provisions of this code." It cannot be argued that the condition solely is void, because it would have served to create the obligation to pay, unlike a case, exemplified by Osmeña vs. Rama (14 Phil., 99), wherein only the potestative condition was held void because it referred merely to the fulfillment of an already existing indebtedness. In the case of Taylor vs. Uy Tieng Piao, et al. (43 Phil., 873, 879), this Court already held that "a condition, facultative as to the debtor, is obnoxious to the first sentence contained in article 1115 and renders the whole obligation void." Wherefore, the appealed order is affirmed, and it is so ordered with costs against appellant. Tuason, Padilla and Reyes, JJ., concur in the result. Republic of the Philippines SUPREME COURT Manila EN BANC DECISION

LUNETA MOTOR CO., plaintiff-appellant, vs. FEDERICO ABAD, defendant-appellee. Jose Agbulos for appellant. Valle and Valle for appellee. Moran, J.: Plaintiff sought recovery of the sum of P2,674.05 with accrued stipulated interest and attorney's fees for balance due on four promissory notes executed by the defendant on March 12, 1931. The complaint sued for a writ of attachment which was issued. Defendant, in his answer, petitioned, for reasons therein stated, that the attachment be lifted, and to that effect a counterbond was tendered by the terms of which the sureties "jointly and severally bind themselves in the sum of P2,600, under the condition that in case the plaintiff recovered judgment in the action the defendant will on demand redeliver the attached property so released to the other court to be applied to the payment of the judgment or in default thereof that the defendant and sureties will on demand pay the plaintiff the full value of the property released." The lower court granted this petition and issued an order for the dissolution of the writ. Thereafter, defendant died; whereupon, his attorney moved for the dismissal of the case. The trial court acceded to this motion, and plaintiff's motion for reconsideration thereof having been denied, the instant appeal was taken. The case was rightly dismissed in accordance with section 119 of Act No. 190, the action being for money, and pending when defendant died. It is contended by plaintiff-appellant that this provision is not applicable, for a writ of attachment has been issued on property of the defendant, and the lien was transferred to the counterbond filed for the dissolution of the writ. This contention is disposed of unfavorably to appellant by the provision of section 700 of Act No. 190 which reads as follows: All actions commenced against the deceased person, for the recovery of money, debt, or damages, and pending at the time the committee are appointed, shall be discontinued, and the property, if any, therein attached, shall be discharged from the attachment, and the claim embraced in such action may be presented to the committee, . . . . (Emphasis supplied.) Besides, the obligation of the sureties, under the counterbond, is subject to the condition that when the plaintiff recovered judgment, they shall deliver the property so released to the officer of the court for the payment of said judgment or in default thereof, pay its full value to the plaintiff. This condition has become a legal impossibility, for no judgment can be recovered by the plaintiff in the case which should be dismissed under section 119 aforementioned. Therefore, the obligation dependent upon this condition must be deemed extinguished, according to article 1116 of our

April 10, 1939 G.R. No. L-45273

Civil Code. Judgment is affirmed with costs against the appellant. Avanceña, C. J., Villa-Real, Imperial, Diaz, Laurel, and Concepcion, JJ., concur. . Republic of the Philippines SUPREME COURT Manila

present contract of purchase and sale, in which case Marciana Felix shall be obliged to return to me, A. A. Addison, the net value of all the products of the four parcels sold, and I shall obliged to return to her, Marciana Felix, all the sums that she may have paid me, together with interest at the rate of 10 per cent per annum." In January, 1915, the vendor, A. A. Addison, filed suit in Court of First Instance of Manila to compel Marciana Felix to make payment of the first installment of P2,000, demandable in accordance with the terms of the contract of sale aforementioned, on July 15, 1914, and of the interest in arrears, at the stipulated rate of 8 per cent per annum. The defendant, jointly with her husband, answered the complaint and alleged by way of special defense that the plaintiff had absolutely failed to deliver to the defendant the lands that were the subject matter of the sale, notwithstanding the demands made upon him for this purpose. She therefore asked that she be absolved from the complaint, and that, after a declaration of the rescission of the contract of the purchase and sale of said lands, the plaintiff be ordered to refund the P3,000 that had been paid to him on account, together with the interest agreed upon, and to pay an indemnity for the losses and damages which the defendant alleged she had suffered through the plaintiff's non-fulfillment of the contract. The evidence adduced shows that after the execution of the deed of the sale the plaintiff, at the request of the purchaser, went to Lucena, accompanied by a representative of the latter, for the purpose of designating and delivering the lands sold. He was able to designate only two of the four parcels, and more than two-thirds of these two were found to be in the possession of one Juan Villafuerte, who claimed to be the owner of the parts so occupied by him. The plaintiff admitted that the purchaser would have to bring suit to obtain possession of the land (sten. notes, record, p. 5). In August, 1914, the surveyor Santamaria went to Lucena, at the request of the plaintiff and accompanied by him, in order to survey the land sold to the defendant; but he surveyed only two parcels, which are those occupied mainly by the brothers Leon and Julio Villafuerte. He did not survey the other parcels, as they were not designated to him by the plaintiff. In order to make this survey it was necessary to obtain from the Land Court a writ of injunction against the occupants, and for the purpose of the issuance of this writ the defendant, in June, 1914, filed an application with the Land Court for the registration in her name of four parcels of land described in the deed of sale executed in her favor by the plaintiff. The proceedings in the matter of this application were subsequently dismissed, for failure to present the required plans within the period of the time allowed for the purpose. The trial court rendered judgment in behalf of the defendant, holding the contract of sale to be rescinded and ordering the return to the plaintiff the P3,000 paid on account of the price, together with interest thereon at the rate of 10 per cent per annum. From this judgment the plaintiff appealed.

EN BANC

DECISION

August 3, 1918 G.R. No. L-12342 A. A. ADDISON, plaintiff-appellant, vs. MARCIANA FELIX and BALBINO TIOCO, defendants-appellees. Thos. D. Aitken for appellant. Modesto Reyes and Eliseo Ymzon for appellees. Fisher, J.: By a public instrument dated June 11, 1914, the plaintiff sold to the defendant Marciana Felix, with the consent of her husband, the defendant Balbino Tioco, four parcels of land, described in the instrument. The defendant Felix paid, at the time of the execution of the deed, the sum of P3,000 on account of the purchase price, and bound herself to pay the remainder in installments, the first of P2,000 on July 15, 1914, and the second of P5,000 thirty days after the issuance to her of a certificate of title under the Land Registration Act, and further, within ten years from the date of such title P10, for each coconut tree in bearing and P5 for each such tree not in bearing, that might be growing on said four parcels of land on the date of the issuance of title to her, with the condition that the total price should not exceed P85,000. It was further stipulated that the purchaser was to deliver to the vendor 25 per centum of the value of the products that she might obtain from the four parcels "from the moment she takes possession of them until the Torrens certificate of title be issued in her favor." It was also covenanted that "within one year from the date of the certificate of title in favor of Marciana Felix, this latter may rescind the

In decreeing the rescission of the contract, the trial judge rested his conclusion solely on the indisputable fact that up to that time the lands sold had not been registered in accordance with the Torrens system, and on the terms of the second paragraph of clause (h) of the contract, whereby it is stipulated that ". . . within one year from the date of the certificate of title in favor of Marciana Felix, this latter may rescind the present contract of purchase and sale . . . ." The appellant objects, and rightly, that the cross-complaint is not founded on the hypothesis of the conventional rescission relied upon by the court, but on the failure to deliver the land sold. He argues that the right to rescind the contract by virtue of the special agreement not only did not exist from the moment of the execution of the contract up to one year after the registration of the land, but does not accrue until the land is registered. The wording of the clause, in fact, substantiates the contention. The one year's deliberation granted to the purchaser was to be counted "from the date of the certificate of title ... ." Therefore the right to elect to rescind the contract was subject to a condition, namely, the issuance of the title. The record show that up to the present time that condition has not been fulfilled; consequently the defendant cannot be heard to invoke a right which depends on the existence of that condition. If in the cross-complaint it had been alleged that the fulfillment of the condition was impossible for reasons imputable to the plaintiff, and if this allegation had been proven, perhaps the condition would have been considered as fulfilled (arts. 1117, 1118, and 1119, Civ. Code); but this issue was not presented in the defendant's answer. However, although we are not in agreement with the reasoning found in the decision appealed from, we consider it to be correct in its result. The record shows that the plaintiff did not deliver the thing sold. With respect to two of the parcels of land, he was not even able to show them to the purchaser; and as regards the other two, more than two-thirds of their area was in the hostile and adverse possession of a third person. The Code imposes upon the vendor the obligation to deliver the thing sold. The thing is considered to be delivered when it is placed "in the hands and possession of the vendee." (Civ. Code, art. 1462.) It is true that the same article declares that the execution of a public instruments is equivalent to the delivery of the thing which is the object of the contract, but, in order that this symbolic delivery may produce the effect of tradition, it is necessary that the vendor shall have had such control over the thing sold that, at the moment of the sale, its material delivery could have been made. It is not enough to confer upon the purchaser the ownership and the right of possession. The thing sold must be placed in his control. When there is no impediment whatever to prevent the thing sold passing into the tenancy of the purchaser by the sole will of the vendor, symbolic delivery through the execution of a public instrument is sufficient. But if, notwithstanding the execution of the instrument, the purchaser cannot have the enjoyment and material tenancy of the thing and make use of it

himself or through another in his name, because such tenancy and enjoyment are opposed by the interposition of another will, then fiction yields to reality ² the delivery has not been effected Ce9I. As Dalloz rightly says (Gen. Rep., vol. 43, p. 174) in his commentaries on article 1604 of the French Civil code, "the word "delivery" expresses a complex idea . . . the abandonment of the thing by the person who makes the delivery and the taking control of it by the person to whom the delivery is made." The execution of a public instrument is sufficient for the purposes of the abandonment made by the vendor; but it is not always sufficient to permit of the apprehension of the thing by the purchaser. The supreme court of Spain, interpreting article 1462 of the Civil Code, held in its decision of November 10, 1903, (Civ. Rep., vol. 96, p. 560) that this article "merely declares that when the sale is made through the means of a public instrument, the execution of this latter is equivalent to the delivery of the thing sold: which does not and cannot mean that this fictitious tradition necessarily implies the real tradition of the thing sold, for it is incontrovertible that, while its ownership still pertains to the vendor (and with greater reason if it does not), a third person may be in possession of the same thing; wherefore, though, as a general rule, he who purchases by means of a public instrument should be deemed . . . to be the possessor in fact, yet this presumption gives way before proof to the contrary." It is evident, then, in the case at bar, that the mere execution of the instrument was not a fulfillment of the vendors' obligation to deliver the thing sold, and that from such non-fulfillment arises the purchaser's right to demand, as she has demanded, the rescission of the sale and the return of the price. (Civ. Code, arts. 1506 and 1124.) Of course if the sale had been made under the express agreement of imposing upon the purchaser the obligation to take the necessary steps to obtain the material possession of the thing sold, and it were proven that she knew that the thing was in the possession of a third person claiming to have property rights therein, such agreement would be perfectly valid. But there is nothing in the instrument which would indicate, even implicitly, that such was the agreement. It is true, as the appellant argues, that the obligation was incumbent upon the defendant Marciana Felix to apply for and obtain the registration of the land in the new registry of property; but from this it cannot be concluded that she had to await the final decision of the Court of Land Registration, in order to be able to enjoy the property sold. On the contrary, it was expressly stipulated in the contract that the purchaser should deliver to the vendor one-fourth "of the products ... of the aforesaid four parcels from the moment when she takes possession of them until the Torrens certificate of title be issued in her favor." This obviously shows that it was not forseen that the purchaser might be

deprived of her possession during the course of the registration proceedings, but that the transaction rested on the assumption that she was to have, during said period, the material possession and enjoyment of the four parcels of land JvzmnT. Inasmuch as the rescission is made by virtue of the provisions of law and not by contractual agreement, it is not the conventional but the legal interest that is demandable. It is therefore held that the contract of purchase and sale entered into by and between the plaintiff and the defendant on June 11, 1914, is rescinded, and the plaintiff is ordered to make restitution of the sum of P3,000 received by him on account of the price of the sale, together with interest thereon at the legal rate of 6 per annum from the date of the filing of the complaint until payment, with the costs of both instances against the appellant. So ordered. Torres, Johnson, Street, Malcolm and Avanceña, JJ., concur. . Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. L-29298 December 15, 1928 REYNALDO LABAYEN, ET AL., plaintiffs. REYNALDO LABAYEN, appellant, vs. TALISAY-SILAY MILLING CO., INC., defendant-appellee. Angel S. Gamboa for appellant. R. Nolan for appellee. MALCOLM, J.: This is an action for damage in the amount of P28,620 for the alleged breach of a contract to grind sugar cane in 1920-1921. After a rehearing, the defendant was absolved from the complaint, andthe plaintiff was condemned, on the cross-complaint, to pay the defendant the sum of P12,114, without special pronouncement as to costs. An examination of the record on appeal discloses that the exhibits are missing. Still this is not in this instance of great importance. The facts as found by the trial judge are not seriously disputed from the facts which worry the parties. The plaintiff, along with another, possesses the hacienda known as Dos Hermanos of Talisay, Occidental Negros. The defendant is a corporation dedicated to the milling of sugar cane. On August 27, 1919, the plaintiff and the defendant entered into a contract similar to contracts entered into

by the defendant and other planters. It is this contract which is the basis of plaintiff's cause of action. Among the clauses in the contract are the following: COVENANTS OF 'LA CENTRAL' Third: That it shall build and after building it shall do or cause to be done all that is necessary for its preservation in good condition, and shall, during the period of this agreement, without charge to the Procedure or Procedures, operate a permanent railroad run by steam or motor, or both, for the use of the plantation or plantations in the transportation of sugar cane, sugar, fertilizer, and all such articles as the procedure may need for his estate, his use and that of his family and employees, and shall cause the main line or a branch thereof, as the case may be, to reach the point of the plantation to be hereafter described not farther than one mile from ay of the boundaries of said plantation, whenever the contour of the land, the curves, and elevations permit the same; it shall provide said railroad with locomotives or motors and wagons in a number sufficient to make the transportation of sugar cane, sugar, fertilizer, and the above mentioned articles, and shall likewise build a branch of said railroad in such a way that from the main line, mill and warehouses, it shall reach the wharf above mentioned, and it shall also cause the yard of the factory near the sugar mill to be available for use with switches or otherwise. All the steam locomotives shall be provided with safety spark devices. The railroad shall consist of a road or path conveniently and duly designated so that, so far as possible, all the producers may derive equal benefit from said railroad. The right-of way for the main line of the railroad shall be three and a half (3-½) meters wide measured from the center of the road to each side, and the branches, switches, or curves shall have more if necessary. OBLIGATIONS OF THE PRODUCER

Fifth: That he shall accept the provisions of clauses 7, 8, and 9 of the covenants of "La Central" and shall deliver the cane as therein provided; hereby binding himself to plant each year according to the usage and custom of a good agriculturist not less than one-half of his own lands devoted to sugar cane subject to the approval of the Committee of Producers leaving the remainder uncultivated.1awphi1.net MUTUAL OBLIGATIONS

10. In case of . . . inability to secure, under reasonable conditions such rights-of-way as "La Central" may require, . . . "La Central" shall notify the Committee of Producers and without incurring any

liability for the non-fulfillment of the terms of this contract, its effects shall be suspended in part or in whole during such period of incapacity. . . . (Emphasis inserted.) With particular reference to the third paragraph of the clauses obligating the central, it is admitted that the central has not continued its railroad through to the Hacienda Dos Hermanos. The railroad comes to the HaciendaEsmeralda No. 2 and there stops. For the railroad to extend to the Hacienda Dos Hermanos, a distance of four kilometers would require a gradual elevation of 4.84 per cent to 7 per cent, would make necessary the providing of twenty-six curves, and would cost about P80,000. The witness H. W. Corp, a civil engeneer employed in the construction work of the Manila Railroad Company, the Pampanga Sugar Milling Co., and the Binalbagan Central, testified that it was possible to construct a railroad to the Hacienda Dos Hermanos but that to do so would be very dangerous. Recalling that the contract provided for the construction of a railroad "whenever the contour of the land, the curves, and elevations permit the same," and that such construction is possible but very dangerous, the question then arises if the defendant can excuse itself on this ground, or if the plaintiff can recover from the defendant for damages for breach of contract, through inability to mill cane. It is elemental that the law requires parties to do what they have agreed to do. If a party charges himself with an obligation possible to be performed, he must abide by it unless performance is rendered impossible by the act of God, the law, or the other party. A showing of mere inconvenience, unexpected impediments, or increased expenses is not enough. Equity cannot relieve from bad bargains simply because they are such. So one must answer in damages where the impossibility is only so in fact. (Thornborow vs. Whitacre, 2 Ld. Raym. [1164], 92 E. R., 270; Reid vs. Alaska Packing Co. [1903], 43 Or., 429; Columbus Ry. & Power Co. vs. Columbus [1919], 249 U. S., 399.) The foregoing are familiar principles to be found in the American and English law of contracts. The civil law on the subject of obligations is not essentially different. Article 1272 of the Civil Code provides: "Impossible things of services cannot be the subject-matter of contracts." And article 1184 of the same Code provides: "The debtor shall also be relieved from obligations which consist in the performance of a act if fulfillment of the undertaking becomes legally or physically impossible." May one obligate himself to do something which, when accomplished, will prove to be dangerous to life and property? We doubt it. Take the contract in question as an example. It was a general contract of the form used by the central and various proprietors of sugar-cane fields. It was intended to be limited in particular application to haciendas where not impeded by physical impossibility. The contract was qualified by an implied condition which, if given practical effect, results in absolving the central from its promise. Not to sanction an exception to the general rule would run counter to public policy and the law by forcing the performance of a

contract undesirable and harmful. (8 Manresa's Codigo Civil Espanol, p. 355.) There is another aspect to the case which has to do with the tenth paragraph of the mutual obligations of the contract and which concerned the securing of the right- of-way for the proposed railroad. To get from theHacienda Esmeralda No. 2 to the Hacienda Dos Hermanos, the railroad would have to pass through the haciendasof Esteban de la Rama. But he would not grant permission to use his land for this purpose in 1920, and only consented to do so in 1924. Here then was a clear case of such a condition of affairs as was contemplated by the contract. The foregoing points being admitted, it logically follows that the defendant can recover on its cross-complaint. The defense to the cross-complaint is identical with the theory of the complaint. For the same reasons that the plaintiff cannot recover must be make good for his debt to the defendant. Accepting, therefore, the facts as found by the trial judge, and nothing no reversible error on any legal question, the judgment appealed from must be as it is hereby affirmed, with the costs of this instance against the appellant. Avanceña, C. J., Johnson, Street, Villamor, Ostrand, Johns and Romualdez, JJ., concur. Republic of the Philippines SUPREME COURT Manila THIRD DIVISION G.R. No. 117247 April 12, 1996 MANUEL I. RAMIREZ, petitioner, vs. COURT OF APPEALS and ESMERALDO PONCE, respondents. PANGANIBAN, J.:p Does the judgment in a land registration case denying the application filed in court in 1957 by the parents of the herein petitioner for the registration of land allegedly formed by alluvial deposits, which judgment was eventually affirmed by the Court of Appeals in 1968 and became final, constitute res judicata as to bar a subsequent application by the herein petitioner to register the same property? This is the question tackled by this Court in the instant petition for review on certiorari assailing the Decision 1dated September 6, 1994 of the respondent Court 2 in CA-G.R. SP No. 33735, and the subsequent Resolution 3denying petitioner's motion for reconsideration.

By a Resolution dated October 23, 1995, the First Division of this court transferred the instant case to the Third. After careful deliberation on the submissions of the parties, this case was assigned to the undersigned ponente, who assumed his position as a member of the Court on October 10, 1995, for the writing of the herein Decision. Antecedent Facts In August, 1929, the Supreme Court rendered a decision in Government of the Phil. Islands vs. Colegio de San Jose 4, declaring that two parcels of land bordering on Laguna de Bay and identified as Lots 1 and 2 form an integral part of the Hacienda de San Pedro Tunasan belonging to the Colegio de San Jose. Ten years later, the Colegio de San Jose sold the said two lots, together with an adjoining unregistered land, to the Government. The three parcels of land acquired by the Government became known as the Tunasan Homesite. The Rural Progress Administration (RPA), which was charged with the administration and disposition of the homesite, caused the subdivision thereof into small lots for the purpose of selling them to bona fide occupants. In December, 1940, Lot 17, Block 78 of the Tunasan Homesite, which was part of Lot 2, and containing an area of 5,158 square meters, was sold by the RPA to Apolonio Diaz. In May, 1948, Lot 19 of the same homesite, which was also apart of Lot 2, with an area of 1,170 square meters, was acquired by Apolonio Diaz, although his son Pastor Diaz was made to appear as the vendee. In January, 1955, the heirs of Apolonio Diaz transferred their rights to both Lots 17 and 19 to Marta Ygonia, wife of Arcadio Ramirez (said spouses being the parents of herein petitioner), who paid the balance of the purchase price for the lots. The Secretary of Agriculture and Natural Resources approved the deeds of transfer of rights executed by the heirs of Apolonio Diaz, and in July, 1958, the Land Tenure Administration executed a deed of sale in favor of Marta Ygonia over Lots 17 and 19. An original application for registration was filed by spouses Marta Ygonia and Arcadio Ramirez (docketed as LRC Case No . B-46) with the then Court of First Instance of Laguna in May, 1957. It had for its subject matter a parcel of land on the eastern side of Lot 17, with an area of 11,055 square meters (later increased to 11,311 sq. meters), which was claimed by the applicants as an accretion to their land gradually formed by alluvial deposits. The Director of Lands opposed the application on the grounds that the applicants did not possess sufficient title to the land sought to be registered, and that the land in question is a part of the public domain. Canuto Ponce (herein private respondent's predecessor) also filed an opposition claiming that the land applied for is foreshore land covered by a revocable permit granted to him in June 1956 by the Bureau of Lands. The Land Tenure Administration likewise opposed the application on behalf of the Republic of the Philippines, on the ground that, inasmuch as the Government was the previous owner of Lots 17 and 19, and considering that only the two lots ² excluding the accretion ² were sold to the

predecessors of the applicant-spouses, the latter cannot claim ownership of the accretion and the same should be declared as part of the Government's patrimonial property. The principal question raised, both in the lower court and on appeal before the Court of Appeals (in CA-G.R. No. 28938-R) was simply whether the accretion came into existence only in 1943 , as the applicant-spouses claimed, or as far back as 1918, as maintained by the oppositors. As the appellate Court noted, resolution of said question rested on the credibility of witnesses presented. In its decision of October 31, 1960, the court a quo found for the oppositors, and denied the application for registration, holding that the accretion, based on preponderance of evidence, must have been gradual and dated back even before the acquisition of the Tunasan Homesite by the Government in 1939. The appellate court upheld the findings of the lower court since the applicants-spouses failed to show any fact or circumstance of weight which was overlooked or misinterpreted by the trial court, and since the testimonies of the witnesses for the applicants-spouses were either not credible or else tended to support the oppositors' position instead. The appellate court further stated: Considering that the Colegio de San Jose was the owner of Lot 2 (of which Lots 17 and 19 are part) to which the accretion in question is contiguous, it follows that the Colegio de San Jose also became the owner of said accretion at the time of its formation. Neither the applicants nor their predecessors can lay a claim of ownership over the land because it is clear from the documents that the property sold by the Government to Apolonio Diaz which was in turn conveyed to the applicants (herein petitioner's parents) was just a little more than one-half hectare, True it is that the applicants tried to prove that the heirs of Apolonio Diaz verbally agreed with them to include the accretion in the transfer deeds, but such oral evidence cannot prevail over the solemn recitals of the documents. Besides, the heirs of Apolonio Diaz cannot pretend to convey what did not belong to them. As a final attempt to have the land in dispute decreed in their names, the applicants claim that their possession of the land, tacked to that of their predecessors. is sufficient to vest title in them by acquisitive prescription. However, the evidence clearly demonstrates that from 1918 to 1940 it was Juan Ponce who was in possession of the land, and the possession of Canuto Ponce commenced from 1940 and extends up to the time this case was being tried. There is therefore no basis for the applicants' claim of acquisitive prescription. 5

The decision of the Court of Appeals in the above case, promulgated on July 6, 1968, became final and executory for failure of the applicantsspouses (parents of herein petitioner) to appeal therefrom. However, that was not to he the end of the story. Herein petitioner, as the buyer of Lots 17 and 19 from his parents, filed on May 17, 1989, in LRC Case No. B-526, before the Regional Trial Court of Laguna, Branch XXV, Biñan, Laguna 6, an application for registration of the same land formed by accretion. After due publication, mailing and posting of notices, the petition was called for hearing. Among petitioner's witnesses was Mario Lantican, chief of the Forest Engineering and Infrastructure Unit at Los Baños, Laguna, who testified that the function of said office is to know whether the property involved is alienable and disposable. He testified that he conducted an inspection to determine the status of the subject property and prepared a report to the effect that the land is indeed disposable. The trial court also noted the following findings in its Order of May 13, 1991: The REPORT of the Community Environment and Natural Resources states that the parcel of land, after it has been inspected/investigated, was verified to be within the alienable and disposable land under the Land Certification Project No. 10-A of San Pedro, Laguna certified and declared as such on September 28, 1981 pursuant to the Forestry Administrative Order No. 4-1627 per BFIC Map No. 3004 (Exh. "T"). Likewise, (sic) the Director of the Land Management Bureau in its "COMPLIANCE WITH REPORT", dated December 12, 1990, states that the land applied for registration is not covered by any kind of public land application filed by third persons, nor by any patent issued by said office (Exh. "U".) 7 Thereafter, the court a quo, considering the testimonial and documentary evidence on record, ruled that applicant (herein petitioner) possessed an imperfect title to the accretion, which could already be confirmed and registered, and ordered 8 registration and confirmation of title over the claimed accretion in favor of herein petitioner, and issuance of a decree of registration. Pursuant to said order, a decree of registration was eventually issued, followed by an original certificate of title. It was only a matter of time before herein private respondent ² son of the late Canuto Ponce ² became aware of the situation. He filed a special civil action for certiorari on February 14, 1994 which this Court referred to the Court of Appeals for appropriate action) seeking to annul the land decree issued in favor of petitioner and the judicial proceedings had in LRC Case No. B-526. In its assailed Decision of September 6, 1994, the respondent Court upheld herein private respondent's contention that the judgment in LRC Case No. B-526 approving the application over the accretion was improper

since the earlier application in Case No. B-46 had been denied, which denial, as previously affirmed by the respondent Court in CA-G.R. No. 28938-R, constituted res judicata. The respondent Court ratiocinated: There is merit in petitioner's principal submission that res judicata had set in when private respondent applied for registration in 1989 over the same lot because of the previous rejection of the application of private respondent's parents in 1960. All of the requisites of res judicata . . . xxx xxx xxx are present which prevent private respondent from relitigating the same issue of registration of the identical lot. There is no question that the judgment in Case No. B46 (p. 27, Rollo) became final after it was affirmed in CAG.R. No. 28938-R on July 6, 1968 (p. 39, Rollo) which was not appealed. There is equally no doubt that Case No. B-46 was rendered by a court having jurisdiction over the same subject matter and parties. Moreover, there was, between Case No. B-46 and LRC Case No. B-526, identity of parties, of subject matter and parties (should be cause of action). The fact that private respondent was not a party in the first registration case (p. 88, Rollo) is of no moment because private respondent is a successor-in-interest of his parents who acquired the disputed lot by title in 1988 subsequent to the commencement of the first registration case in 1960 (Section 49[b], Rule 39, Revised Rules of Court). In fact, only substantial identity of parties is required (San Diego vs. Cardona, 70 Phil. 281; 2 Martin, Rules of Court, 1982 Ed., p. 425). Similarly, there is identity of subject matter from a mere perusal of Case No. B-46 (p, 13, Rollo) and Case No. B526 (p. 48, Rollo) which refer to the same property consisting of 11,311 sq. m. Lastly, there is no dispute that identity of causes of action between Case No. B-46 and Case No. B-526 exist since they both sought registration of the land formed by alluvial deposits. (CA Decision, p. 5; rollo, p. 36.) Thus, the respondent Court ruled as follows: WHEREFORE, the petition is hereby given DUE COURSE. The Order in LRC Case No. B-526 dated May 13, 1991 and Decree No. N-198605 issued by the LRA pursuant thereto are hereby SET ASIDE. Accordingly, the application (in) LRC Case No. B-526 is hereby ordered DISMISSED. The Issues The instant petition for review on certiorari raises two issues:

I. Respondent Hon. Court of Appeals committed grave error in the interpretation and application of the doctrine of res judicata, more particularly on the issue of "public domain." and II. Respondent Hon. Court of Appeals committed grave error when it violated the provisions of Section 38 of Act No. 496, as amended (The Land Registration Act) relative to the doctrine of non-collateral attack of a decree or title. However, as we shall soon see, the resolution of this case hinges on the first issue, and there is really no need to delve into the second. The Main Issue: Res Judicata Petitioner argues that res judicata did not apply in the instant case because of the ruling of this Court in the case of Director of Lands vs. Court of Appeals, 9 which quoted from the decision in an earlier but similarly titled case, Director of Lands vs. Court of Appeals, 10 as follows: But granting for a moment, that the defenses (sic) of res adjudicata was properly raised by petitioner herein, WE still hold that, factually, there is no prior final judgment at all to speak of. The decision in Cadastral Case No. 41 does not constitute a bar to the application of respondent Manuela Pastor; because a decision in a cadastral proceeding declaring a lot public land is not the final decree contemplated in Sections 38 and 40 of the Land Registration Act. A judicial declaration that a parcel of land is public, does not preclude even the same applicant from subsequently seeking a judicial confirmation of his title to the same land, provided he thereafter complies with the provisions of Section 48 of Commonwealth Act No. 141, as amended, and as long as said public land remains alienable and disposable (now sections 3 and 4, P.D. No. 1073). (emphasis supplied) 11 After careful deliberation and consultation, we find ourselves in agreement with petitioner's contention. Seen from the perspective offered by the aforequoted ruling, it is evident that one of the elements of res judicata is lacking in the case at bar. Respondent Court declared that "identity of causes of action between Case No. B-46 and Case No. B-526 exist since they both sought registration of the land formed by alluvial deposits", but failed to recognize that the basis for claiming such registration was different in each case. In Case No. B-46, applicants-spouses Arcadio Ramirez and Marta Ygonia (herein petitioner's parents) claimed that their possession of the land, tacked to that of their predecessors Apolonio Diaz, et al. (allegedly from 1953 onwards). was sufficient to vest title in them by acquisitive prescription. 12 On the other hand, in LRC Case No. B-526, petitioner claimed that the duration of possession by his parents

(commencing allegedly in 1958), combined with his own possession (counted from 1988 when he purchased the accretion from his parents) gave him sufficient title thereto by acquisitive prescription. 13 In other words, because of the different relevant periods of possession being referred to, the basis of the application in Case No. B-46 is actually different from that in Case No. 526. Stated in another way, the right to relief in one case rests upon a set of facts different from that upon which the other case depended. Hence, there was no res judicata to bar the proceedings in LRC Case No. R-526. Incidentally, the Solicitor General reached essentially the same conclusion in his Comment filed in CA-G.R. SP No. 33735 before the respondent Court. 14 As to the parties' pleas 15 before the respondent Court for the issuance of an order to cause the taking of a verification survey to determine whether they are referring to the same parcel of land or to two different properties, suffice it to say that the disposition of this case is not a bar to such a survey. 16 WHEREFORE, premises considered, the instant petition is hereby GRANTED. The assailed Decision of the Court of Appeals is hereby SET ASIDE and the Order dated May 13, 1991 issued by the RTC of Laguna, Br. 25 granting registration and confirmation of title in favor of petitioner is hereby AFFIRMED. No costs. SO ORDERED. Narvasa, C.J., Melo and Francisco, JJ., concur Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. 23769 September 16, 1925 SONG FO & COMPANY, plaintiff-appellee, vs. HAWAIIAN PHILIPPINE CO., defendant-appellant. Hilado and Hilado, Ross, Lawrence and Selph and Antonio T. Carrascoso, Jr., for appellant. Arroyo, Gurrea and Muller for appellee. MALCOLM, J.: In the court of First Instance of Iloilo, Song Fo & Company, plaintiff, presented a complaint with two causes of action for breach of contract against the Hawaiian-Philippine Co., defendant, in which judgment was asked for P70,369.50, with legal interest, and costs. In an amended answer and cross-complaint, the defendant set up the special defense that since the plaintiff had defaulted in the payment for the molasses delivered to it by the defendant under the contract between the parties, the latter

was compelled to cancel and rescind the said contract. The case was submitted for decision on a stipulation of facts and the exhibits therein mentioned. The judgment of the trial court condemned the defendant to pay to the plaintiff a total of P35,317.93, with legal interest from the date of the presentation of the complaint, and with costs. From the judgment of the Court of First Instance the defendant only has appealed. In this court it has made the following assignment of errors: "I. The lower court erred in finding that appellant had agreed to sell to the appellee 400,000, and not only 300,000, gallons of molasses. II. The lower court erred in finding that the appellant rescinded without sufficient cause the contract for the sale of molasses executed by it and the appellee. III. The lower court erred in rendering judgment in favor of the appellee and not in favor of the appellant in accordance with the prayer of its answer and cross-complaint. IV. The lower court erred in denying appellant's motion for a new trial." The specified errors raise three questions which we will consider in the order suggested by the appellant. 1. Did the defendant agree to sell to the plaintiff 400,000 gallons of molasses or 300,000 gallons of molasses? The trial court found the former amount to be correct. The appellant contends that the smaller amount was the basis of the agreement. The contract of the parties is in writing. It is found principally in the documents, Exhibits F and G. The First mentioned exhibit is a letter addressed by the administrator of the Hawaiian-Philippine Co. to Song Fo & Company on December 13, 1922. It reads: SILAY, OCC. NEGROS, P.I. December 13, 1922 Messrs. SONG FO AND CO. Iloilo, Iloilo. DEAR SIRS: Confirming our conversation we had today with your Mr. Song Fo, who visited this Central, we wish to state as follows: He agreed to the delivery of 300,000 gallons of molasses at the same price as last year under the same condition, and the same to start after the completion of our grinding season. He requested if possible to let you have molasses during January, February and March or in other words, while we are grinding, and we agreed with him that we would to the best of our ability, altho we are somewhat handicapped. But we believe we can let you have 25,000 gallons during each of the milling months, altho it interfere with the shipping of our own and planters sugars to Iloilo. Mr. Song Fo also asked if we could supply him with another 100,000 gallons of molasses, and we stated we believe that this is possible and will do our best to let you have these extra 100,000 gallons during the next year the same to be taken by you before November 1st, 1923, along with the 300,000, making 400,000 gallons in all.

Regarding the payment for our molasses, Mr. Song Fo gave us to understand that you would pay us at the end of each month for molasses delivered to you. Hoping that this is satisfactory and awaiting your answer regarding this matter, we remain. Yours very truly, HAWAIIAN-PHILIPPINE COMPANY BY R. C. PITCAIRN Administrator. Exhibit G is the answer of the manager of Song Fo & Company to the Hawaiian-Philippine Co. on December 16, 1922. This letter reads: December 16th, 1922. Messrs. HAWAIIAN-PHILIPPINE CO., Silay, Neg. Occ., P.I. DEAR SIRS: We are in receipt of your favours dated the 9th and the 13th inst. and understood all their contents. In connection to yours of the 13th inst. we regret to hear that you mentioned Mr. Song Fo the one who visited your Central, but it was not for he was Mr. Song Heng, the representative and the manager of Messrs. Song Fo & Co. With reference to the contents of your letter dated the 13th inst. we confirm all the arrangements you have stated and in order to make the contract clear, we hereby quote below our old contract as amended, as per our new arrangements. (a) Price, at 2 cents per gallon delivered at the central. (b) All handling charges and expenses at the central and at the dock at Mambaguid for our account. (c) For services of one locomotive and flat cars necessary for our six tanks at the rate of P48 for the round trip dock to central and central to dock. This service to be restricted to one trip for the six tanks. Yours very truly, SONG FO & COMPANY By __________________________ Manager. We agree with appellant that the above quoted correspondence is susceptible of but one interpretation. The Hawaiian-Philippine Co. agreed to deliver to Song Fo & Company 300,000 gallons of molasses. The Hawaiian-Philippine Co. also believed it possible to accommodate Song Fo

& Company by supplying the latter company with an extra 100,000 gallons. But the language used with reference to the additional 100,000 gallons was not a definite promise. Still less did it constitute an obligation. If Exhibit T relied upon by the trial court shows anything, it is simply that the defendant did not consider itself obliged to deliver to the plaintiff molasses in any amount. On the other hand, Exhibit A, a letter written by the manager of Song Fo & Company on October 17, 1922, expressly mentions an understanding between the parties of a contract for P300,000 gallons of molasses. We sustain appellant's point of view on the first question and rule that the contract between the parties provided for the delivery by the HawaiianPhilippine Co. to song Fo & Company of 300,000 gallons of molasses. 2. Had the Hawaiian-Philippine Co. the right to rescind the contract of sale made with Song Fo & Company? The trial judge answers No, the appellant Yes. Turning to Exhibit F, we note this sentence: "Regarding the payment for our molasses, Mr. Song Fo (Mr. Song Heng) gave us to understand that you would pay us at the end of each month for molasses delivered to you." In Exhibit G, we find Song Fo & Company stating that they understand the contents of Exhibit F, and that they confirm all the arrangements you have stated, and in order to make the contract clear, we hereby quote below our old contract as amended, as per our new arrangements. (a) Price, at 2 cents per gallon delivered at the central." In connection with the portion of the contract having reference to the payment for the molasses, the parties have agree on a table showing the date of delivery of the molasses, the amount and date thereof, the date of receipt of account by plaintiff, and date of payment. The table mentioned is as follows: Date of receipt of account by plaintiff 1923 P206.16 206.16 Dec. 26/22 Jan. 3/23 Jan. 5 do

Feb. 27 Mar. 5 Mar. 16 Mar. 24 Mar. 29

206.16 206.16 206.16 206.16 206.16

do do Mar. 20/23 Mar. 31/23 do

do do Apr. 2/23 do do

Do Do Apr. 19 Do Do

Some doubt has risen as to when Song Fo & Company was expected to make payments for the molasses delivered. Exhibit F speaks of payments "at the end of each month." Exhibit G is silent on the point. Exhibit M, a letter of March 28, 1923, from Warner, Barnes & Co., Ltd., the agent of the Hawaiian-Philippine Co. to Song Fo & Company, mentions "payment on presentation of bills for each delivery." Exhibit O, another letter from Warner, Barnes & Co., Ltd. to Song Fo & Company dated April 2, 1923, is of a similar tenor. Exhibit P, a communication sent direct by the HawaiianPhilippine Co. to Song Fo & Company on April 2, 1923, by which the Hawaiian-Philippine Co. gave notice of the termination of the contract, gave as the reason for the rescission, the breach by Song Fo & Company of this condition: "You will recall that under the arrangements made for taking our molasses, you were to meet our accounts upon presentation and at each delivery." Not far removed from this statement, is the allegation of plaintiff in its complaint that "plaintiff agreed to pay defendant, at the end of each month upon presentation accounts." Resolving such ambiguity as exists and having in mind ordinary business practice, a reasonable deduction is that Song Fo & Company was to pay the Hawaiian-Philippine Co. upon presentation of accounts at the end of each month. Under this hypothesis, Song Fo & Company should have paid for the molasses delivered in December, 1922, and for which accounts were received by it on January 5, 1923, not later than January 31 of that year. Instead, payment was not made until February 20, 1923. All the rest of the molasses was paid for either on time or ahead of time. The terms of payment fixed by the parties are controlling. The time of payment stipulated for in the contract should be treated as of the essence of the contract. Theoretically, agreeable to certain conditions which could easily be imagined, the Hawaiian-Philippine Co. would have had the right to rescind the contract because of the breach of Song Fo & Company. But actually, there is here present no outstanding fact which would legally sanction the rescission of the contract by the Hawaiian-Philippine Co. The general rule is that rescission will not be permitted for a slight or casual breach of the contract, but only for such breaches as are so substantial and fundamental as to defeat the object of the parties in making the agreement. A delay in payment for a small quantity of

Date of delivery

Account and date thereof

Date of payment

1922 Dec. 18 Dec. 29 1923 Jan. 5 Feb. 12 206.16 206.16 Jan. 9/23 Mar. 12/23

1923 Feb. 20 Do

Mar. 7 or 8 do

Mar. 31 Do

molasses for some twenty days is not such a violation of an essential condition of the contract was warrants rescission for non-performance. Not only this, but the Hawaiian-Philippine Co. waived this condition when it arose by accepting payment of the overdue accounts and continuing with the contract. Thereafter, Song Fo & Company was not in default in payment so that the Hawaiian-Philippine co. had in reality no excuse for writing its letter of April 2, 1923, cancelling the contract. (Warner, Barnes & Co. vs. Inza [1922], 43 Phil., 505.) We rule that the appellant had no legal right to rescind the contract of sale because of the failure of Song Fo & Company to pay for the molasses within the time agreed upon by the parties. We sustain the finding of the trial judge in this respect. 3. On the basis first, of a contract for 300,000 gallons of molasses, and second, of a contract imprudently breached by the Hawaiian-Philippine Co., what is the measure of damages? We again turn to the facts as agreed upon by the parties. The first cause of action of the plaintiff is based on the greater expense to which it was put in being compelled to secure molasses from other sources. Three hundred thousand gallons of molasses was the total of the agreement, as we have seen. As conceded by the plaintiff, 55,006 gallons of molasses were delivered by the defendant to the plaintiff before the breach. This leaves 244,994 gallons of molasses undelivered which the plaintiff had to purchase in the open market. As expressly conceded by the plaintiff at page 25 of its brief, 100,000 gallons of molasses were secured from the Central North Negros Sugar Co., Inc., at two centavos a gallon. As this is the same price specified in the contract between the plaintiff and the defendant, the plaintiff accordingly suffered no material loss in having to make this purchase. So 244,994 gallons minus the 100,000 gallons just mentioned leaves as a result 144,994 gallons. As to this amount, the plaintiff admits that it could have secured it and more from the Central Victorias Milling Company, at three and one-half centavos per gallon. In other words, the plaintiff had to pay the Central Victorias Milling company one and one-half centavos a gallon more for the molasses than it would have had to pay the Hawaiian-Philippine Co. Translated into pesos and centavos, this meant a loss to the plaintiff of approximately P2,174.91. As the conditions existing at the central of the Hawaiian-Philippine Co. may have been different than those found at the Central North Negros Sugar Co., Inc., and the Central Victorias Milling Company, and as not alone through the delay but through expenses of transportation and incidental expenses, the plaintiff may have been put to greater cost in making the purchase of the molasses in the open market, we would concede under the first cause of action in round figures P3,000. The second cause of action relates to lost profits on account of the breach of the contract. The only evidence in the record on this question is the stipulation of counsel to the effect that had Mr. Song Heng, the manager of Song Fo & Company, been called as a witness, he would have testified that the plaintiff would have realized a profit of P14,948.43, if the contract

of December 13, 1922, had been fulfilled by the defendant. Indisputably, this statement falls far short of presenting proof on which to make a finding as to damages. In the first place, the testimony which Mr. Song Heng would have given undoubtedly would follow the same line of thought as found in the decision of the trial court, which we have found to be unsustainable. In the second place, had Mr. Song Heng taken the witness-stand and made the statement attributed to him, it would have been insufficient proof of the allegations of the complaint, and the fact that it is a part of the stipulation by counsel does not change this result. And lastly, the testimony of the witness Song Heng, it we may dignify it as such, is a mere conclusion, not a proven fact. As to what items up the more than P14,000 of alleged lost profits, whether loss of sales or loss of customers, or what not, we have no means of knowing. We rule that the plaintiff is entitled to recover damages from the defendant for breach of contract on the first cause of action in the amount of P3,000 and on the second cause of action in no amount. Appellant's assignments of error are accordingly found to be well taken in part and not well taken in part. Agreeable to the foregoing, the judgment appealed from shall be modified and the plaintiff shall have and recover from the defendant the sum of P3,000, with legal interest form October 2, 1923, until payment. Without special finding as to costs in either instance, it is so ordered. Avanceña, C.J., Johnson, Street, Villamor, Ostrand, Johns, Romualdez and Villa-Real, JJ., concur. Republic of the Philippines SUPREME COURT Manila SECOND DIVISION G.R. No. 75256 January 26, 1989 JOHN PHILIP GUEVARRA, petitioner, vs. HONORABLE IGNACIO ALMODOVAR, respondent. Teresita Dy-Liacco and Roberto Madrid for petitioner. PARAS, J.: Presented before Us is a special civil action for certiorari against the Honorable Judge Ignacio Almodovar of the City Court of Legaspi, Branch 1, Legaspi City, raising beautiful questions of law which We are tasked to resolve. Considering the issues and arguments raised by petitioner, We impleaded the People of the Philippines as party respondents herein in a resolution dated 17 September 1986 (p. 41, Rollo). The relevant facts gathered from the records are as follows:

Petitioner John Philip Guevarra, then 11 years old, was playing with his best friend Teodoro Almine, Jr. and three other children in their backyard in the morning of 29 October 1984. They were target-shooting a bottle cap (tansan) placed around fifteen (15) to twenty (20) meters away with an air rifle borrowed from a neighbor. In the course of their game, Teodoro was hit by a pellet on his left collar bone which caused his unfortunate death. After conduct a preliminary investigation, the examining Fiscal exculpated petitioner due to his age and because the unfortunate occurrence appeared to be an accident. The victim's parents appealed to the Ministry of Justice, which ordered the Fiscal to file a case against petitioner for Homicide through reckless Imprudence. The information dated 9 October 1985 was consequently filed, which narrated in part: . . . the above-named accused, who is over 9 years but below 15 years of age and acting with discernment, did then and there, without taking the necessary precautions to prevent and/or avoid accident or injuries to persons, willfully, unlawfully and feloniously operate and cause to be fired, in a reckless and imprudent manner, an air rifle with .22 caliber bore with rifling, oxygen and bolt operated thereby hitting as a result of said carelessness and imprudence one TEODORICO PABLO ALMINE at the left side of the body with its pellet, causing injuries which directly caused his untimely death; . . . (p. 8, Rollo) On 25 October 1985, petitioner moved to quash the said information on the following grounds: I THAT THE FACTS CHARGED DO NOT CONSTITUTE OFFENSE. II THAT THE INFORMATION CONTAINS AVERMENTS WHICH IF TRUE WOULD CONSTITUTE A LEGAL EXCUSE OR JUSTIFICATION. III THAT THIS HONORABLE COURT HAS NO JURISDICTION OVER THE OFFENSE CHARGED AND THE PERSON OF THE DEFENDANT. (p. 9, Rollo) This motion, in an Order dated 4 April 1986, was denied with respect to the first and third grounds relied upon. However, the resolution of the second ground was deferred until evidence shall have been presented during trial. On 26 July 1986, this present petition for certiorari was filed, raising two (2) issues, to wit:

I WHETHER AN ELEVEN (11) YEAR OLD BOY COULD BE CHARGED WITH THE CRIME OF HOMICIDE THRU RECKLESS IMPRUDENCE, AND II WHETHER THE COURT HAD JURISDICTION OVER THE CASE NOTWITHSTANDING THE FACT THAT IT DID NOT PASS THRU THE BARANGAY LUPON. (Petition, p. 3, Rollo) Going through the written arguments of the parties, the surfacing of a corollary controversy with respect to the first issue raised is evident, that is, whether the term "discernment", as used in Article 12(3) of the Revised Penal Code (RPC) is synonymous with "intent." It is the position of the petitioner that "discernment" connotes 'intent' (p. 96, Rollo), invoking the unreported case of People vs. Nieto, G.R. No. 11965, 30 April 1958. In that case We held that the allegation of "with intent to kill . . ." amply meets the requirement that discernment should be alleged when the accused is a minor between 9 and 15 years old. Petitioner completes his syllogism in saying that: If discernment is the equivalent of 'with intent', then the allegation in the information that the accused acted with discernment and willfully unlawfully, and feloniously, operate or cause to be fired in a reckless and imprudent manner an air rifle .22 caliber' is an inherent contradiction tantamount to failure of the information to allege a cause of action or constitute a legal excuse or exception. (Memorandum for Petitioner, p. 97, Rollo) If petitioner's argument is correct, then no minor between the ages of 9 and 15 may be convicted of a quasi-offense under Article 265 of the RPC. On the contrary, the Solicitor General insists that discernment and intent are two different concepts. We agree with the Solicitor General's view; the two terms should not be confused. The word "intent" has been defined as (a) design; a determination to do a certain things; an aim; the purpose of the mind, including such knowledge as is essential to such intent;. . .; the design resolve, or determination with which a person acts.' (46 CJS Intent p. 1103.) It is this intent which comprises the third element of dolo as a means of committing a felony, freedom and intelligence being the other two. On the other hand, We have defined the term discernment, as used in Article 12(3) of the RPC, in the old case of People vs. Doquena, 68 Phil. 580(1939), in this wise: The discernment that constitutes an exception to the exemption from criminal liability of a minor under fifteen

years of age but over nine, who commits an act prohibited by law, is his mental capacity to understand the difference between right and wrong . . . (Emphasis supplied) p. 583 From the foregoing, it is clear that the terms "intent" and "discernment" convey two distinct thoughts. While both are products of the mental processes within a person, the former refers to the desired of one's act while the latter relates to the moral significance that person ascribes to the said act. Hence a person may not intend to shoot another but may be aware of the consequences of his negligent act which may cause injury to the same person in negligently handling an air rifle. It is not connect, therefore, to argue, as petitioner does, that since a minor above nine years of age but below fifteen acted with discernment, then he intended such act to be done. He may negligently shoot his friend, thus did not intend to shoot him, and at the same time recognize the undesirable result of his negligence. In further outlining the distinction between the words "intent" and "discernment," it is worthy to note the basic reason behind the enactment of the exempting circumstances embodied in Article 12 of the RPC; the complete absence of intelligence, freedom of action, or intent, or on the absence of negligence on the part of the accused. 1In expounding on intelligence as the second element of dolus, Albert 2 has stated: The second element of dolus is intelligence; without this power, necessary to determine the morality of human acts to distinguish a licit from an illicit act, no crime can exist, and because ... the infant 3 (has) no intelligence, the law exempts (him) from criminal liability. (Emphasis supplied) lt is for this reason, therefore, why minors nine years of age and below are not capable of performing a criminal act. On the other hand, minors above nine years of appeal but below fifteen are not absolutely exempt. However, they are presumed to be without criminal capacity, but which presumption may be rebutted if it could be proven that they were "capable of appreciating the nature and criminality of the act, that is, that (they) acted with discernment. " 4 The preceding discussion shows that "intelligence" as an element of dolo actually embraces the concept of discernment as used in Article 12 of the RPC and as defined in the aforecited case of People vs. Doquena, supra. It could not therefore be argued that discernment is equivalent or connotes 'intent' for they refer to two different concepts. Intelligence, which includes discernment, is a distinct element of dolo as a means of committing an offense. In evaluating felonies committed by means of culpa, three (3) elements are indispensable, namely, intelligence, freedom of action, and negligence. Obviously, intent is wanting in such felonies. However, intelligence remains as an essential element, hence, it is necessary that a minor above nine but below fifteen years of age be possessed with intelligence in committing a negligent act which results in a quasi-offense. For him to be criminally liable, he must discern the rightness or wrongness of the effects of his negligent act. Indeed, a minor over nine years of age but below

fifteen may be held liable for a quasi-offense under Article 365 of the RPC. A reading of the said Article would reveal such fact as it starts off with the phrase "Any person. . ." without any distinction or exception made. Ubi lex non distinquit nec nos distinguere debemos. In his last attempt to justify his position equating the words "intent" and "discernment" used under the law, he cites the case of People vs. Nieto, supra. However, petitioner failed to present the qualifying sentence preceding the ruling he now invokes, which reads: That requirement should be deemed amply met with the allegation in the information that she. . ."with the intent to kill, did then and there wilfully, criminally and feloniously push one Lolita Padilla . . ." into a deep place of the Peñaranda River and as a consequence thereof Lolita Padilla got drowned and died right then and there.' This allegation clearly conveys the Idea that she knew what would be the consequence of her unlawful act of pushing her victim into deep water and that she knew it to be wrong. (Emphasis supplied) From the above, it is clear that We did not mean to equate the words "intent" and "discernment." What We meant was that the combined effect of the words used in the information is to express a knowledge, on the part of the accused Nieto, of the wrongness or rightness of her act. Hence, petitioner may not validly contend that since the information now in question alleged "discernment", it in effect alleged "intent." The former may never embrace the Idea of the latter; the former expresses the thought of passivity while the latter signifies activity. Coming now to the second issue of jurisdiction, it is contended by the petitioner that the case against him should have first been brought before the Lupong Tagapayapa pursuant to Presidential Decree No. 1508, Section 2(3). He submits that, considering his entitlement to a two-degree privileged mitigating circumstance due to his minority, P.D. 1508 applies to his case because the penalty imposable is reduced to not higher than arresto menor from an original arresto mayor maximum to prision correccional medium as prescribed in Article 365 of the RPC. This is not correct. The jurisdiction of a court over a criminal case is determined by the penalty imposable under the law for the offense and not the penalty ultimately imposed (People vs. Caldito, 72 Phil. 263; People vs. Purisima, 69 SCRA 314; Dioquino vs. Cruz and People vs. Savellano, 116 SCRA 451). The same principle applies in construing Section 2(3) of P.D. 1508, which states: xxx xxx xxx (3) Offense punishable by imprisonment exceeding 30 day , or a fine exceeding P 200.00; ... (emphasis supplied) Expounding on the above provision, a member of the committee that drafted P.D. 1508 has said:

The law says 'punishable,' not 'punished.' One should therefore consider the penalty provided for by law or ordinance as distinguished from the penalty actually imposed in particular cases after considering the attendant circumstances affecting criminal liability. 5 The foregoing finds support in our jurisprudence as above cited. We therefore rule that, in construing Section 2(3) of P.D. 1508, the penalty which the law defining the offense attaches to the latter should be considered. Hence, any circumstance which may affect criminal liability must not be considered. The petitioner, in his arguments, asserts that since P.D. 1508 has not been complied with, the trial court has no jurisdiction over the case. This erroneous perception has been corrected long before. As intimated in the case ofRoyales vs. IAC, 127 SCRA 470, and categorically stated in Ebol vs. Amin, 135 SCRA 438, P.D. 1508 is not jurisdictional. WHEREFORE, PREMISES CONSIDERED, this petition is hereby DISMISSED for lack of merit and the Temporary Restraining Order effective 17 September 1986 is LIFTED. Let this case be REMANDED to the lower court for trial on the merits. No cost. SO ORDERED. Melencio-Herrera, (Chairperson), Padilla, Sarmiento and Regalado, JJ., concur. Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. L-47774 March 14, 1941 MAGDALENA ESTATE, INC., petitioner-appellant, vs. LOUIS J. MYRICK, respondent-appellee. Felipe Ysmael and Eusebio C. Encarnacion for petitioner. Andres C. Aguilar for respondent. LAUREL, J.: On January 2, 1928, the Magdalena Estate, Inc., sold to Louis J. Myrick lots Nos. 28 and 29 of Block 1, Parcel 9 of the San Juan Subdivision, San Juan Rizal, their contract of sale No. SJ-639 (Exhibits B and 1) providing that the price of P7,953 shall be payable in 120 equal monthly installments of P96.39 each on the second day of every month beginning the date of execution of the agreement. Simultaneously, the vendee executed and delivered to the vendor a promissory note (Exhibits C and 2) for the whole purchase price, wherein it was stipulated that "si cualquier pago o pagos de este pagare quedasen en mora por mas de dos meses, entonces todos el saldo no pagado del mismo con cualesquiera intereses que hubiese

devengado, vercera y sera exigible inmediatamente y devengara intereses al mismo tipo de 9 por ciento al año hasta su completo pago, y en tal caso me comprometo, ademas, a pagar al tenedor de este pagare el 10 por ciento de la cantidad en concepto de honorarios de abogado." In pursuance of said agreement, the vendee made several monthly payments amounting to P2,596.08, the last being on October 4, 1930, although the first installment due and unpaid was that of May 2, 1930. By reason of this default, the vendor, through its president, K.H. Hemady, on December 14, 1932, notified the vendee that, in view of his inability to comply with the terms of their contract, said agreement had been cancelled as of that date, thereby relieving him of any further obligation thereunder, and that all amounts paid by him had been forfeited in favor of the vendor, who assumes the absolute right over the lots in question. To this communication, the vendee did not reply, and it appears likewise that the vendor thereafter did not require him to make any further disbursements on account of the purchase price. On July 22, 1936, Louis J. Myrick, respondent herein, commenced the present action in the Court of First Instance of Albay, praying for an entry of judgment against the Magdalena Estate, Inc. for the sum of P2,596.08 with legal interest thereon from the filing of the complaint until its payment, and for costs of the suit. Said defendant, the herein petitioner, on September 7, 1936, filed his answer consisting in a general denial and a cross-complaint and counterclaim, alleging that contract SJ-639 was still in full force and effect and that, therefore, the plaintiff should be condemned to pay the balance plus interest and attorneys' fees. After due trial, the Court of First Instance of Albay, on January 31, 1939, rendered its decision ordering the defendant to pay the plaintiff the sum of P2,596.08 with legal interest from December 14, 1932 until paid and costs, and dismissing defendant's counterclaim. From this judgment, the Magdalena Estate, Inc. appealed to the Court of Appeals, where the cause was docketed as CA-G.R. No. 5037, and which, on August 23, 1940, confirmed the decision of the lower court, with the only modification that the payment of interest was to be computed from the date of the filing of the complaint instead of from the date of the cancellation of the contract. A motion for reconsideration was presented, which was denied on September 6, 1940. Hence, the present petition for a writ of certiorari. Petitioner-appellant assigns several errors which we proceed to discuss in the course of this opinion. Petitioner holds that contract SJ-639 has not been rendered inefficacious by its letter to the respondent, dated December 14, 1932, and submits the following propositions: (1) That the intention of the author of a written instrument shall always prevail over the literal sense of its wording; (2) that a bilateral contract may be resolved or cancelled only by the prior mutual agreement of the parties, which is approved by the judgment of the proper court; and (3) that the letter of December 14, 1932 was not assented to by the respondent, and therefore, cannot be deemed to have produced a cancellation, even if it ever was intended. Petitioner contends

that the letter in dispute is a mere notification and, to this end, introduced in evidence the disposition of Mr. K.H. Hemady, president of the Magdalena Estate, Inc. wherein he stated that the word "cancelled" in the letter of December 14, 1932, "es un error de mi interpretacion sin ninguna intencion de cancelar," and the testimony of Sebastian San Andres, one of its employees, that the lots were never offered for sale after the mailing of the letter aforementioned. Upon the other hand, the Court of Appeals, in its decision of August 23, 1940, makes the finding that "notwithstanding the deposition of K.H. Hemady, president of the defendant corporation, to the effect that the contract was not cancelled nor was his intention to do so when he wrote the letter of December 14, 1932, marked Exhibit 6 and D (pp. 6-7, deposition Exhibit 1-a), faith and credit cannot be given to such testimony in view of the clear terms of the letter which evince his unequivocal intent to resolve the contract. His testimony is an afterthought. The intent to resolve the contract is expressed unmistakably not only in the letter of December 14, 1932, already referred to (Exhibit 6 and D), but is reiterated in the letters which the president of the defendant corporation states that plaintiff lost his rights for the land for being behind more than two years, and of April 10, 1035 (Exhibit G), where defendant's president makes the following statements: "Confirming the verbal arrangement had between you and our Mr. K.H. Hemady regarding the account of Mr. Louis J. Myrick under contract No. SJ-639, already cancelled." This conclusion of fact of the Court of Appeals is final and should not be disturbed. (Guico vs. Mayuga and Heirs of Mayuga, 63 Phil., 328; Mamuyac vs. Abena, XXXVIII Off. Gaz. 84.) Where the terms of a writing are clear, positive and unambiguous, the intention of the parties should be gleaned from the language therein employed, which is conclusive in the absence of mistake (13 C.J. 524; City of Manila vs. Rizal Park Co., 52 Phil. 515). The proposition that the intention of the writer, once ascertained, shall prevail over the literal sense of the words employed is not absolute and should be deemed secondary to and limited by the primary rule that, when the text of the instrument is explicit and leaves no doubt as to its intention, the court may not read into it any other which would contradict its plain import. Besides, we have met with some circumstances of record which demonstrate the unequivocal determination of the petitioner to cancel their contract. They are: (1) the act of the petitioner in immediately taking possession of the lots in question and offering to resell them to Judge M.V. del Rosario, as demonstrated by his letter marked Exhibit G, shortly after December 14, 1932; (2) his failure to demand from the respondent the balance of the account after the mailing of the disputed letter; and (3) the letters of January 10, 1933 (Exhibit F-2) and April 10, 1935 (Exhibit G) reiterate, in clear terms, the intention to cancel first announced by petitioner since December 14, 1932. It is next argued that contract SJ-639, being a bilateral agreement, in the absence of a stipulation permitting its cancellation, may not be resolved by the mere act of the petitioner. The fact that the contracting parties herein did not provide for resolution is now of no moment, for the reason that the

obligations arising from the contract of sale being reciprocal, such obligations are governed by article 1124 of the Civil Code which declares that the power to resolve, in the event that one of the obligors should not perform his part, is implied. (Mateos vs. Lopez, 6 Phil., 206; Cortez vs. Bibaño & Beramo, 41 Phil. 298; Cui. vs. Sun Chan, 41 Phil., 523; Po Pauco vs. Siguenza, 49 Phil., 404.) Upon the other hand, where, as in this case, the petitioner cancelled the contract, advised the respondent that he has been relieved of his obligations thereunder, and led said respondent to believe it so and act upon such belief, the petitioner may not be allowed, in the language of section 333 of the Code of Civil Procedure (now section 68 (a) of Rule 123 of the New Rules of Court), in any litigation the course of litigation or in dealings in nais, be permitted to repudiate his representations, or occupy inconsistent positions, or, in the letter of the Scotch law, to "approbate and reprobate." (Bigelow on Estoppel, page 673; Toppan v. Cleveland, Co. & C.R. Co., Fed. Cas. 14,099.) The contract of sale, contract SJ-639, contains no provision authorizing the vendor, in the event of failure of the vendee to continue in the payment of the stipulated monthly installments, to retain the amounts paid to him on account of the purchase price. The claim, therefore, of the petitioner that it has the right to forfeit said sums in its favor is untenable. Under article 1124 of the Civil Code, however, he may choose between demanding the fulfillment of the contract or its resolution. These remedies are alternative and not cumulative, and the petitioner in this case, having to cancel the contract, cannot avail himself of the other remedy of exacting performance. (Osorio & Tirona vs. Bennet & Provincial Board of Cavite, 41 Phil., 301; Yap Unki vs. Chua Jamco, 14 Phil., 602.) As a consequence of the resolution, the parties should be restored, as far as practicable, to their original situation (Po Pauco vs. Siguenza, supra) which can be approximated only by ordering, as we do now, the return of the things which were the object of the contract, with their fruits and of the price, with its interest (article 1295, Civil Code), computed from the date of the institution of the action. (Verceluz vs. Edaño, 46 Phil. 801.) The writ prayed for is hereby denied, with costs against the petitioner. So ordered. Imperial, Diaz, Moran, and Horrilleno, JJ., concur. Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. L-18500 October 2, 1922 FILOMENA SARMIENTO and her husband EUSEBIO M. VILLASEÑOR, plaintiffs-appellants, vs. GLICERIO JAVELLANA, defendant-appellant.

Montinola, Montinola and Hontiveros for plaintiffs-appellants. J. M. Arroyo and Fisher and DeWitt for defendant-appellant. AVANCEÑA, J.: On August 28, 1991, the defendant loaned the plaintiffs the sum of P1,500 with interest at the rate of 25 per cent per annum for the term of one year. To guarantee this loan, the plaintiffs pledged a large medal with a diamond in the center and surrounded with ten diamonds, a pair of diamond earrings, a small comb with twenty-two diamonds, and two diamond rings, which the contracting parties appraised at P4,000. This loan is evidenced by two documents (Exhibits A and 1) wherein the amount appears to be P1,875, which includes the 25 per cent interest on the sum of P1,500 for the term of one year. The plaintiffs allege that at the maturity of this loan, August 31, 1912, the plaintiff Eusebio M. Villaseñor, being unable to pay the loan, obtained from the defendant an extension, with the condition that the loan was to continue, drawing interest at the rate of 25 per cent per annum, so long as the security given was sufficient to cover the capital and the accrued interest. In the month of August, 1919, the plaintiff Eusebio M. Villaseñor, in company with Carlos M. Dreyfus, went to the house of the defendant and offered to pay the loan and redeem the jewels, taking with him, for this purpose, the sum of P11,000, but the defendant then informed them that the time for the redemption had already elapsed. The plaintiffs renewed their offer to redeem the jewelry by paying the loan, but met with the same reply. These facts are proven by the testimony of the plaintiffs, corroborated by Carlos M. Dreyfus. The plaintiffs now bring this action to compel the defendant to return the jewels pledged, or their value, upon the payment by them of the sum they owe the defendant, with the interest thereon. The defendant alleges, in his defense, that upon the maturity of the loan, August 31, 1912, he requested the plaintiff, Eusebio M. Villaseñor, to secure the money, pay the loan and redeem the jewels, as he needed money to purchase a certain piece of land; that one month thereafter, the plaintiff, Filomena Sarmiento, went to his house and offered to sell him the jewels pledged for P3,000; that the defendant then told her to come back on the next day, as he was to see his brother, Catalino Javellana, and ask him if he wanted to take the jewels for that sum; that on the next day the plaintiff, Filomena Sarmiento, went back to the house of the defendant who then paid her the sum of P1,125, which was the balance remaining of the P3,000 after deducting the plaintiff's loan. It appearing that the defendant possessed these jewels originally, as a pledge to secure the payment of a loan stated in writing, the mere testimony of the defendant to the effect that later they were sold to him by the plaintiff, Filomena Sarmiento, against the positive testimony of the latter that she did not make any such sale, requires a strong corroboration to be accepted. We do not find the testimony of Jose Sison to be of sufficient value as such corroboration. This witness testified to having been

in the house of the defendant when Filomena went there to offer to sell the defendant the jewels, as well as on the third day when she returned to receive the price. According to this witness, he happened to be in the house of the defendant, having gone there to solicit a loan, and also accidentally remained in the house of the defendant for three days, and that that was how he happened to witness the offer to sell, as well as the receipt of the price on the third day. But not only do we find that the defendant has not sufficiently established, by his evidence, the fact of the purchase of the jewels, but also that there is a circumstance tending to show the contrary, which is the fact that up to the trial of this cause the defendant continued in possession of the documents, Exhibits A and 1, evidencing the loan and the pledge. If the defendant really bought these jewels, its seems natural that Filomena would have demanded the surrender of the documents evidencing the loan and the pledge, and the defendant would have returned them to plaintiff. Our conclusion is that the jewels pledged to defendant were not sold to him afterwards. Another point on which evidence was introduced by both parties is as to the value of the jewels in the event that they were not returned by the defendant. In view of the evidence of record, we accept the value of P12,000 fixed by the trial court. From the foregoing it follows that, as the jewels in question were in the possession of the defendant to secure the payment of a loan of P1,500, with interest thereon at the rate of 25 per cent per annum from Augusts 31, 1911, to August 31, 1912, and the defendant having subsequently extended the term of the loan indefinitely, and so long as the value of the jewels pledged was sufficient to secure the payment of the capital and the accrued interest, the defendant is bound to return the jewels or their value (P12,000) to plaintiffs, and the plaintiffs have the right to demand the same upon the payment by them of the sum of P1,5000, plus the interest thereon at the rate of 25 per cent per annum from August 28, 1911. The judgment appealed from being in accordance with this findings, the same is affirmed without special pronouncement as to costs. So ordered. Araullo, C.J., Street, Malcolm, Villamor, Ostrand and Romualdez, JJ., concur. RESOLUTION April 4, 1923 AVANCEÑA, J.: The defendant contends that the plaintiffs' action for the recovery of the jewels pledged has prescribed. Without deciding whether or not the action to recover the thing pledged may prescribe in any case, it not being necessary for the purposes of this opinion, but supposing that it may, still the defendant's contention is untenable. In the document evidencing the

loan in question there is stated: "I transfer by way of pledge the following jewels." That this is a valid contract of pledge there can be no question. As a matter of fact the defendant does not question it, but take s it for granted. However, it is contended that the obligation of the defendant to return the jewels pledged must be considered as not stated in writing, for this obligation is not expressly mentioned in the document. But if this contract of pledge is in writing, it must necessarily be admitted that the action to enforce the right, which constitutes the essence of this contract, is covered by a written contract. The duty of the creditor to return the thing pledged in case the principal obligation is fulfilled is essential in all contracts of pledge. This constitutes, precisely, the consideration of the debtor in this accessory contract, so that if this obligation of the creditor to return to thing pledged, and the right of the debtor to demand the return thereof, are eliminated, the contract would not be a contract of pledge. It would be a donation. If the right of the plaintiffs to recover the thing pledged is covered by a written contract, the time for the prescription of this action is ten years, according to section 43 of the Code of Civil Procedure. The defendant contends that the time of prescription of the action of the plaintiffs to recover the thing pledged must be computed from August 28, 1911, the date of the making of the contract of loan secured by this pledge. The term of this loan is one year. However, it is contended that the action of the plaintiff to recover the thing pledged accrued on the very date of the making of the contract, inasmuch as from that date they could have recovered the same by paying the loan even before the expiration of the period fixed for payment. This view is contrary to law. Whenever a term for the performance of an obligation is fixed, it is presumed to have been established for the benefit of the creditor as well as that of the debtor, unless from its tenor or from other circumstances it should appear that the term was established for the benefit of one or the other only (art. 1128 of the Civil Code.) In this case it does not appear, either from any circumstance, or from the tenor of the contract, that the term of one year allowed the plaintiffs to pay the debt was established in their favor only. Hence it must be presumed to have been established for the benefit of the defendant also. And it must be so, for this is a case of a loan, with interest, wherein the term benefits the plaintiffs by the use of the money, as well as the defendant by the interest. This being so, the plaintiffs had no right to pay the loan before the lapse of one year, without the consent of the defendant, because such a payment in advance would have deprived the latter of the benefit of the stipulated interest. It follows from this that appellant is in error when he contents that the plaintiffs could have paid the loan and recovered the thing pledged from the date of the execution of the contract and, therefore, his theory that the action of the plaintiffs to recover the thing pledged accrued from the date of the execution of the contract is not tenable. 1awph!l.net It must, therefore, be admitted that the action of the plaintiffs for the recovery of the thing pledged did not accrue until August 31, 1912,

when the term fixed for the loan expired. Computing the time from that date to that of the filing of the complaint in this cause, October 9, 1920, it appears that the ten years fixed by the law for the prescription of the action have not yet elapsed. On the other hand, the contract of loan with pledge is in writing and the action of the defendant for the recovery of the loan does not prescribe until after ten years. It is unjust to hold that the action of the plaintiffs for the recovery of the thing pledged, after the payment of the loan, has already prescribed while the action of the defendant for the recovery of the loan has not yet prescribed. The result of this would be that the defendant might have collected the loan and at the same time kept the thing pledged. The motion for reconsideration is denied. Araullo, C.J., Malcolm, Ostrand and Romualdez, JJ., concur. Separate Opinions STREET, J., concurring: I agree, Prescription cannot become effective against the right of the pledgor to redeem so long as the written contract evidencing the debt remains in the hands of the pledgee as evidence of a valid and unbarred debt. The pledgor may always claim at least as long a period within which to redeem as is allowed to the creditor to enforce his debt. (Gilmer vs. Morris, 80 Ala., 78; 60 Am. Rep., 85, 89.)

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