OBLICON (When Court May Fix A Period) |1
G.R. No. L-22558             May 31, 1967 refused to vacate the same; hence, on May 7, 1958,
GREGORIO ARANETA, INC., petitioner,  instance, seeking to compel the latter to comply with their
vs.
THE PHILIPPINE SUGAR ESTATES DEVELOPMENT CO., LTD., respondent.
Araneta and Araneta for petitioner.
Rosauro Alvarez and Ernani Cruz Paño for respondent.
REYES, J.B.L., J.:
Petition for certiorari to review a judgment of the Court of Appeals, in its CA-G.R.
No. 28249-R, affirming with modification, an amendatory decision of the Court of
First Instance of Manila, in its Civil Case No. 36303, entitled "Philippine Sugar
Estates Development Co., Ltd., plaintiff, versus J. M. Tuason & Co., Inc. and Gregorio
Araneta, Inc., defendants."
As found by the Court of Appeals, the facts of this case are:
J. M. Tuason & Co., Inc. is the owner of a big tract land situated in Quezon City,
otherwise known as the Sta. Mesa Heights Subdivision, and covered by a Torrens title
in its name. On July 28, 1950, through Gregorio Araneta, Inc., it (Tuason & Co.) sold
a portion thereof with an area of 43,034.4 square meters, more or less, for the sum of
P430,514.00, to Philippine Sugar Estates Development Co., Ltd. The parties
stipulated, among in the contract of purchase and sale with mortgage, that the buyer
will —
Build on the said parcel land the Sto. Domingo Church and Convent
while the seller for its part will —
Construct streets on the NE and NW and SW sides of the land herein sold so
that the latter will be a block surrounded by streets on all four sides; and the
street on the NE side shall be named "Sto. Domingo Avenue;"
The buyer, Philippine Sugar Estates Development Co., Ltd., finished the construction
of Sto. Domingo Church and Convent, but the seller, Gregorio Araneta, Inc., which
began constructing the streets, is unable to finish the construction of the street in the
Northeast side named (Sto. Domingo Avenue) because a certain third-party, by the
name of Manuel Abundo, who has been physically occupying a middle part thereof,
Philippine Sugar Estates
Development Co., Lt. filed its complaint against J. M. Tuason & Co., Inc., and
obligation, as stipulated in
the above-mentioned deed of sale, and/or to pay damages in the event they failed or
refused to perform said obligation.
Both defendants J. M. Tuason and Co. and Gregorio Araneta, Inc. answered the
complaint, the latter particularly setting up the principal defense that the action was
premature since its obligation to construct the streets in question was without a definite
period which needs to he fixed first by the court in a proper suit for that purpose before
a complaint for specific performance will prosper.
The issues having been joined, the lower court proceeded with the trial, and upon its
termination, it dismissed plaintiff's complaint (in a decision dated May 31, 1960),
upholding the defenses interposed by defendant Gregorio Araneta, Inc.1äwphï1.ñët
Plaintiff moved to reconsider and modify the above decision, praying that the court fix
a period within which defendants will comply with their obligation to construct the
streets in question.
Defendant Gregorio Araneta, Inc. opposed said motion, maintaining that plaintiff's
complaint did not expressly or impliedly allege and pray for the fixing of a period to
comply with its obligation and that the evidence presented at the trial was insufficient
to warrant the fixing of such a period.
On July 16, 1960, the lower court, after finding that "the proven facts precisely
warrants the fixing of such a period," issued an order granting plaintiff's motion for
reconsideration and amending the dispositive portion of the decision of May 31, 1960,
to read as follows:
WHEREFORE, judgment is hereby rendered giving defendant Gregorio
Araneta, Inc., a period of two (2) years from notice hereof, within which to
comply with its obligation under the contract, Annex "A".
Defendant Gregorio Araneta, Inc. presented a motion to reconsider the above quoted
order, which motion, plaintiff opposed.
On August 16, 1960, the lower court denied defendant Gregorio Araneta, Inc's.
motion; and the latter perfected its appeal Court of Appeals.

In said appellate court, defendant-appellant Gregorio Araneta, Inc. contended mainly
that the relief granted, i.e., fixing of a period, under the amendatory decision of July
16, 1960, was not justified by the pleadings and not supported by the facts submitted at
the trial of the case in the court below and that the relief granted in effect allowed a
change of theory after the submission of the case for decision.
Ruling on the above contention, the appellate court declared that the fixing of a period
was within the pleadings and that there was no true change of theory after the
submission of the case for decision since defendant-appellant Gregorio Araneta, Inc.
itself squarely placed said issue by alleging in paragraph 7 of the affirmative defenses
contained in its answer which reads —
7. Under the Deed of Sale with Mortgage of July 28, 1950, herein defendant
has a reasonable time within which to comply with its obligations to construct
and complete the streets on the NE, NW and SW sides of the lot in question;
that under the circumstances, said reasonable time has not elapsed;
Disposing of the other issues raised by appellant which were ruled as not meritorious
and which are not decisive in the resolution of the legal issues posed in the instant
appeal before us, said appellate court rendered its decision dated December 27, 1963,
the dispositive part of which reads —
IN VIEW WHEREOF, judgment affirmed and modified; as a consequence,
defendant is given two (2) years from the date of finality of this decision to
comply with the obligation to construct streets on the NE, NW and SW sides
of the land sold to plaintiff so that the same would be a block surrounded by
streets on all four sides.
Unsuccessful in having the above decision reconsidered, defendant-appellant Gregorio
Araneta, Inc. resorted to a petition for review by certiorari to this Court. We gave it
due course.
We agree with the petitioner that the decision of the Court of Appeals, affirming that
of the Court of First Instance is legally untenable. The fixing of a period by the courts
under Article 1197 of the Civil Code of the Philippines is sought to be justified on the
basis that petitioner (defendant below) placed the absence of a period in issue by
pleading in its answer that the contract with respondent Philippine Sugar Estates
Development Co., Ltd. gave petitioner Gregorio Araneta, Inc. "reasonable time within
which to comply with its obligation to construct and complete the streets." Neither of
the courts below seems to have noticed that, on the hypothesis stated, what the answer
OBLICON (When Court May Fix A Period) |2
put in issue was not whether the court should fix the time of performance, but whether
or not the parties agreed that the petitioner should have reasonable time to perform its
part of the bargain. If the contract so provided, then there was a period fixed, a
"reasonable time;" and all that the court should have done was to determine if that
reasonable time had already elapsed when suit was filed if it had passed, then the court
should declare that petitioner had breached the contract, as averred in the complaint,
and fix the resulting damages. On the other hand, if the reasonable time had not yet
elapsed, the court perforce was bound to dismiss the action for being premature. But in
no case can it be logically held that under the plea above quoted, the intervention of
the court to fix the period for performance was warranted, for Article 1197 is precisely
predicated on the absence of any period fixed by the parties.
Even on the assumption that the court should have found that no reasonable time or no
period at all had been fixed (and the trial court's amended decision nowhere declared
any such fact) still, the complaint not having sought that the Court should set a period,
the court could not proceed to do so unless the complaint in as first amended; for the
original decision is clear that the complaint proceeded on the theory that the period for
performance had already elapsed, that the contract had been breached and defendant
was already answerable in damages.
Granting, however, that it lay within the Court's power to fix the period of
performance, still the amended decision is defective in that no basis is stated to support
the conclusion that the period should be set at two years after finality of the judgment.
The list paragraph of Article 1197 is clear that the period can not be set arbitrarily. The
law expressly prescribes that —
the Court shall determine such period as may under the circumstances been
probably contemplated by the parties.
All that the trial court's amended decision (Rec. on Appeal, p. 124) says in this respect
is that "the proven facts precisely warrant the fixing of such a period," a statement
manifestly insufficient to explain how the two period given to petitioner herein was
arrived at.
It must be recalled that Article 1197 of the Civil Code involves a two-step process.
The Court must first determine that "the obligation does not fix a period" (or that the
period is made to depend upon the will of the debtor)," but from the nature and the
circumstances it can be inferred that a period was intended" (Art. 1197, pars. 1 and 2).
This preliminary point settled, the Court must then proceed to the second step, and
decide what period was "probably contemplated by the parties" (Do., par. 3). So that,
ultimately, the Court can not fix a period merely because in its opinion it is or should

be reasonable, but must set the time that the parties are shown to have intended. As the
record stands, the trial Court appears to have pulled the two-year period set in its
decision out of thin air, since no circumstances are mentioned to support it. Plainly,
this is not warranted by the Civil Code.
In this connection, it is to be borne in mind that the contract shows that the parties
were fully aware that the land described therein was occupied by squatters, because the
fact is expressly mentioned therein (Rec. on Appeal, Petitioner's Appendix B, pp. 12-
13). As the parties must have known that they could not take the law into their own
hands, but must resort to legal processes in evicting the squatters, they must have
realized that the duration of the suits to be brought would not be under their control
nor could the same be determined in advance. The conclusion is thus forced that the
parties must have intended to defer the performance of the obligations under the
contract until the squatters were duly evicted, as contended by the petitioner Gregorio
Araneta, Inc.
The Court of Appeals objected to this conclusion that it would render the date of
performance indefinite. Yet, the circumstances admit no other reasonable view; and
this very indefiniteness is what explains why the agreement did not specify any exact
periods or dates of performance.
It follows that there is no justification in law for the setting the date of performance at
any other time than that of the eviction of the squatters occupying the land in question;
and in not so holding, both the trial Court and the Court of Appeals committed
reversible error. It is not denied that the case against one of the squatters, Abundo, was
still pending in the Court of Appeals when its decision in this case was rendered.
In view of the foregoing, the decision appealed from is reversed, and the time for the
performance of the obligations of petitioner Gregorio Araneta, Inc. is hereby fixed at
the date that all the squatters on affected areas are finally evicted therefrom.
Costs against respondent Philippine Sugar Estates Development, Co., Ltd. So ordered.
Concepcion, C.J., Dizon, Regala, Makalintal, Bengzon, J.P., Sanchez and Castro, JJ.,
concur.
G.R. No. L-13768             May 30, 1961
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FLORENCIO DEUDOR, ET AL., plaintiffs-appellants, 
vs.
J. M. TUASON & CO., INC., ET AL., defendants-appellees.
Laurel Law Office for plaintiffs-appellants.
Claro M. Recto for defendant J. M. Tuason and Co., Inc.
Araneta and Araneta for defendant-appellee Gregorio Araneta, Inc.
CONCEPCION, J.:
Appeal by plaintiffs Florencio, Pedro, Aniana and Maria Deudor, hereinafter referred
to as appellants, from certain orders of the Court of First Instance of Rizal dated
February 28, 1958 and January 10, 1958.
Prior to March 16, 1953, J. M. Tuason & Co., Inc., and Gregorio Araneta &Co., Inc.,
as alleged owners and attorneys-in-fact of Santa Mesa Heights Subdivision, were
involved in Civil Cases Nos. Q-135, Q-139, Q-174, Q-177 and Q-187 of the Court of
First Instance of Rizal. In Case No. Q-135, entitled "Florencio Deudor, et al. vs. J. M.
Tuason & Co., Inc., et al.", plaintiffs, therein, invoking title under an alleged
"informacion posesoria", claimed a parcel of land of about 50 "quiñones", or 225
hectares, located in Tatalon, Quezon City, over which J. M. Tuason & Co., Inc.,
asserted ownership under the Land Registration Act, by virtue of an original certificate
of title, covering a bigger tract and land, issued way back in 1914. The title of J. M.
Tuason & Co., Inc. over portions of said 50 "quiñones" was, also, contested in said
Civil Cases Nos. Q-139, entitled "J. M. Tuason & Co., Inc. vs. Agustin de Torres", Q-
174, entitled "Apolonio Misericordia vs. J. M. Tuason & Co., Inc.", Q-177, entitled
"Agripino Pascual vs. J. M. Tuason & Co., Inc.", and Q-186, entitled "Macaria
Fulgenio vs. J. M. Tuason & Co., Inc.". On March 16, 1953, these five (5) cases were
designated in said agreement, and will hereinafter be referred to collectively, as the
Deudors.
It appears that prior to the institution of said cases, the Deudors had caused the
aforementioned land of about 50 "quiñones" to be subdivided into lots and that some
of these lots, aggregating approximately 30 "quiñones", were sold to several persons,
whose names are set forth in two lists attached, as Annexes B and C, to said
compromise agreement. The Deudors, including appellants herein, acknowledge edged
therein the title, in fee simple, of, J. M. Tuason & Co., Inc. — who is referred to in the
agreement as Owners — in and to said land of 50 "quiñones", and reannounced, ceded
and quitclaimed in its favor whatever right, title or interest they (the Deudors) had over
said property, and, in consideration thereof, J. M. Tuason & Co., Inc. undertook to pay
them P1,201,063, from which the aggregate sum of P486,137.26 would be deducted

for certain purposes stated in the agreement, thereby leaving a balance of P714,295.74,
to be paid in the manner and under the conditions set forth in clause 8, section d, of the
Compromise Agreement, as follows:
1. The first payment shall be P100,000.00 and shall be made within sixty (60) days
from the date the decision rendered in the foregoing cases approving this compromise
agreement becomes final; Provided, that within said period the DEUDORS shall have
effected the delivery to the OWNERS of at least 20 quiñones, the possessory rights
over which have not been sold by the DEUDORS to third persons, out of the total area
of 50 quiñones involved herein in such manner that the OWNERS, may without
interruption, proceed with the subdivision and sale of said 20 quiñones and likewise
deliver the portions so sold to the buyers thereof, and provided further, that if the
DEUDORS FAIL TO DELIVER said 20 quiñones as above specified, then the first
payment of P100,000.00 mentioned in this paragraph shall not be made until after the
delivery is effected;
2. If the DEUDORS, within a period of 60 days from the date of decision rendered in
the foregoing cases, should be able to deliver the peaceful and complete possession of
the portion of the property occupied and possessed by the persons listed in Annex 'C'
and who are not willing to continue with their contracts of purchase and such other
persons who may later join the ones listed in said Annex 'C', the payments subsequent
to that specified in the paragraph immediately preceding shall be made as follows:
2nd payment — 1955 ............................................... P99,408.79
3rd payment — 1956 to be made 1 year after the date of the 2nd
payment ........................................... 99,408.79
4th payment — 1957 to be made 1 year after the date of the 3rd
payment ........................................... 69,510.50
5th payment — 1958 to be made 1 year after the date of the 4th
payment ............................................ 69,510.50
6th payment — 1959 to be made 1 year after the date of the 5th
payment ........................................... 69,510.50
7th payment — 1960 to be made 1 year after the date of the 6th
payment ........................................... 69,510.50
8th payment — 1961 to be made 1 year after the date of the 7th
payment ........................................... 69,510.50
9th payment — 1962 to be made 1 year after the date of the 8th
payment ...........................................     68,555.66
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            T o t a l ............................................................ P614,925.74
However, in the event that the DEUDORS fail to comply with the conditions
set forth in clause 8, section d, subsection 2, the following shall be the form
of payments to be made to the DEUDORS by the OWNERS, if they make
delivery as herinafter set forth; .
If delivery is made after the 60-day period provided for above but before the
expiration of one year from the date of the first payment, the DEUDORS
shall receive as second payment the amount of P99,400.79 two years after the
date of the first payment. If delivery is made after one year from the date of
the first payment, the DEUDORS shall receive as second payment, the
amount of P99,408.79 one year after the date of such delivery.
In either case, the succeeding payments as hereinafter provided shall become
due one year from the date of the payment immediately preceding, as follows;
.
3rd payment P 99,408.79
4th payment 69,510.50
5th payment 69,510.50
6th payment 69,510.50
7th payment 69,510.50
8th payment 69,510.50
9th payment     68,555.66
P515,516.95
It was further stipulated in the agreement that "it shall be the joint and solidary
obligation of the Deudors to make the buyers of the lots purportedly sold by them to
recognize the title of the OWNERS over the property purportedly bought by them and
to make them sign, when ever possible new contracts of purchase for said property at
the current prices and terms specified by the OWNERS in their sales of lots known as
'Sta. Mesa Heights Subdivision'"; that "the possession of the land in question shall be
turned over by the Deudors to the owners as herein provided and the former shall
guarantee that during the pendency of the sale of said property, no squatters or
unauthorized persons shall settle or take possession or continue in possession of any
portion of said property"; and that in the event of failure of the Deudors to comply

with any of the obligations and conditions of the agreement, the OWNERS shall have
the right to suspend the payments aforementioned.
This compromise agreement was submitted for approval to the Court, which, after
assuring itself that the parties understood the contents thereof, caused the agreement to
be signed in Court, and then rendered on April 10, 1953, a decision the last two (2)
paragraphs of which read:
The parties and their respective attorneys have petitioned this Court that after
rendition of judgment in the above entitled cases, steps be taken, under the
supervision of this Court, to implement said 'Compromise Agreement',and in
the interest of justice the Court grants this last mentioned petition. It should
be understood, however, that the implementation to be taken under the
supervision of the Court will not and should not be construed and interpreted
by the parties that it shall be in any way affect this decision on the merits
rendered by the Court.
IN VIEW OF ALL THE FOREGOING, decision is hereby rendered
declaring, as it is hereby declared, that J.M. Tuason & Co., Inc. is the
absolute owner of the land involved in these cases, having in its name a
transfer certificate of title issued in accordance with the provisions of the
Land Registration Act, said title being binding and conclusive against the
whole world. It is further ordered that the 'Compromise Agreement' be, as it is
hereby approved in its entirety and all the parties to the same are hereby
enjoined to abide and comply faithfully and strictly with the terms and
conditions set forth the said 'Compromise Agreement'. No pronouncement as
costs
The portion of 20 "quiñones", mentioned in clause 8, section d, subsection (1), was not
delivered by the Deudors until January 14, 1956, and this was made possible only
because the appellees had agreed to and did advance certain in sums to defray the
expenses necessary therefor. On April 6,1956, the Deudors filed a motion praying that
the appellees be required to pay them the balance of the agreed first installment —
after deducting said advance -- or the sum of P79,800.00. On or about April 13,
1957,the appellees deposited this amount in Court and at the same filed a "motion and
counter-manifestation" inviting attention to the constructions existing on the
undelivered portion of 30 "quiñones" and praying that the Deudors be ordered to
remove such constructions — regardless of whether the same existed on March 16,
1953, when the compromise Agreement was entered into, or were made after said date
— within fifteen (15) days, as well as "to comply strictly with their obligation to
maintain the status quo, with respect to said undelivered portion of 30 'quiñones' and
OBLICON (When Court May Fix A Period) |5
to hold them liable for such damages as may result from their having granted
permission to make additional constructions therein after March 16, 1953".
Soon later, or on April 27, 1956, the appellees filed supplemental motion and
"manifestation" praying that payment of said sum of P79,800.00 to the Deudors "be
withheld until after the additional 129 illegal constructions the 30 'quiñones' area shall
have been removed".
Subsequently, J. M. Tuason & Co., Inc. filed another motion and "manifestation",
dated August 8, 1956, to the effect that the number of illegal transactions on said area
had increased to 165, that, meanwhile, several alleged purchasers from the Deudors,
not mentioned in the annexes attached to the Compromise Agreement, had instituted
Civil Cases Nos. Q-1889 and Q-1890 of the Court of First Instance Quezon City,
against the Deudors and the appellees, had that, in consequence of such cases, the
amounts payable to the Deudors from the appellees may not be sufficient to satisfy the
claims of the plaintiffs in said cases, and praying, therefore, that appellees'
aforementioned "motion and counter-manifestation" and "supplemental motion and
manifestation" of April 13 and 27, 1956, be resolved and that the sum of P79,800.00
be retained to answer for the claims of the alleged purchasers not mentioned in
Annexes B and C of the Compromise Agreement.
Accordingly, on February 28, 1957, the Court issued an order, pertinent parts of which
we quote:
The attention of this Court has been called by the J.M. Tuason & Co., Inc.
and Gregorio Araneta, Inc. to the fact that the illegal constructions on the 30
quiñones, which constructions were made from and after the date of the
Compromise Agreement are growing in number, and that as of January 8,
1957 these constructions totalled 215. Whether these constructions were
made with the Deudors' permission as claimed by the J. M. Tuason & Co.,
Inc. and Gregorio Araneta, Inc. or without the Deudors' consent as claimed by
Atty. Laurel is of no moment. What is material and pertinent now is that these
houses and the continued constructions of houses appear completely unabated
and unless this is stopped by those who are supposed to be in possession of
the land, these very houses within the 30 quiñones will afford very
formidable stumbling blocks against further implementation of the
Compromise Agreement. Under the Compromise Agreement, and subject to
its other terms and conditions, these referred to collectively as the Deudors'
are obligated, and they have so bound themselves, to deliver the clear and
peaceful possession of the entire 50 quiñones to the OWNERS, J. M. Tuason

& Co., Inc. and/or to ATTORNEYS-ON-FACT FOR SANTA MESA
HEIGHTS SUBDIVISION, Gregorio Araneta, Inc.
Under paragraph 3 of the Compromise Agreement, those referred to
collectively as, the 'Deudors' claimed to have been in possession of the land,
and pursuant to par. 9 of the same Compromise Agreement, the 'Deudors'
bound themselves to deliver possession of the land in question over to the
Owners. It is, therefore, clear to this Court that unless the construction of
houses is abated in some way, the implementation of the Compromise
Agreement can never be effected. The J.M. Tuason & Co., Inc. and Gregorio
Araneta, Inc. have asked this Court to set a period of 15 days within which
the 'Deudors' would deliver the possession of the remaining 30 quiñones unto
the said companies. The impatience of the J.M. Tuason & Co., Inc. and
Gregorio Araneta, Inc. is understandable, considering that it is almost four
years since the decision became final and yet the 'Deudors' have utterly failed
to deliver the 30 quiñones. The Compromise Agreement does not state any
specified period within which the 'Deudors' have to definitely comply with
their obligations, but in accordance with Article 1197 of the new Civil Code
this Court is authorized and empowered to set a period within which they
shall fulfill and comply with all their obligation petitions. This Court is of the
opinion that a period of four (4) months from date hereof is more than ample
time within which the 'Deudors' may comply with their obligations under the
Compromise Agreement, having in mind that more than 42 months have
elapsed before the 20 quiñones were in fact delivered, and mostly through the
effort of the J.M. Tuason & Co., Inc, and Gregorio Araneta, Inc. The Court
has also in mind that the Compromise Agreement contemplated 60 days from
date thereof for compliance therewith by the parties, and certainly the 60-day
period so set could not reasonably be extended to four years. The Court
would like to call the attention of the parties to the fact that in its decision
dated April 10, 1953 the parties were enjoined to abide by and comply
faithfully and strictly with the terms and conditions set forth in the
Compromise Agreement'. Up to the present time, there does not appear to be
any sincere or effective steps taken by any of those referred to collectively as
the 'Deudors' in implementing the Compromise Agreement. The Court,
therefore, hereby sets a period of four (4) months within which the 'Deudors'
shall deliver possession of the entire 30 quiñones to the J.M. Tuason & Co.,
Inc. and Gregorio Araneta, Inc. Failure of the 'Deudors' to so deliver will
have the effect of freeing the J.M. Tuason & Co., Inc. and the Gregorio
Araneta, Inc. from all its obligations under the Compromise Agreement and
judgment, and the latter shall thereafter be entitled to possession of the 30
quiñones thru this Court's process.
OBLICON (When Court May Fix A Period) |6
Counsel for the J.M. Tuason & Co., Inc. and Gregorio Araneta, Inc. have also
called the attention of this Court to the effect that there seem to be other
persons who have allegedly bought lands from the 'Deudors' and who have
submitted the corresponding Deeds of Sale to this Court but whose names
have not been included in the lists submitted by the 'Deudors' to the attorneys
of the J.M. Tuason & Co., Inc. and attached to the Compromise Agreement as
Annexes 'B' and 'C'. The Court likewise takes cognizance of the fact that there
are presently pending cases wherein persons have filed complaints praying
that the difference in the price fixed by the Gregorio Araneta, Inc. for the
same land should be charged against or deducted from whatever amount the
'Deudors' would receive from the J.M. Tuason & Co., Inc. and Gregorio
Araneta, Inc.
This Court believes that it cannot decide the question now, but shall do so in
cases properly brought up before it. It likewise takes cognizance of Civil
Cases Nos. Q-1732, Q-1733, Q-1746, Q-1799, and Q-1932 filed against the
Deudors and J.M. Tuason & Co., Inc. and Gregorio Araneta, Inc., and other
related cases. As to those persons but whose names have not been included in
the lists, Annexes 'B' and 'C' to the Compromise Agreement, the Court cannot
at the present time issue an order without a proper motion from the proper
party.
IN VIEW OF ALL THE FOREGOING, . . .,
Those referred to collectively as the 'Deudors' in the Compromise Agreement,
namely, Florencio Deudor, Maria Deudor, Pedro Deudor, Aniana Deudor,
Jesus Gamitan Cirilo del Rosario, Tomas de la Cruz, Rufina Guerrero, Ana
Pascual, Alberta Martinez, Ambrosio Andaya, Donato Fajardo, Eustaquio
Alquiros, Agripino Pascual, Macaria Fulgencio, Carlos Javier, Aurea
Misericordia and Feliciano Misericordia, are hereby ordered to clear and
deliver the peaceful possession of the 30 quiñones to the J.M. Tuason & Co.,
Inc. and Gregorio Araneta, Inc. within a period of four (4) months from date
hereof, except such constructions by those persons who are mentioned in the
Compromise Agreement as willing to continue in the purchase of the parcel
of land which they may be occupying and who are willing to pay the price set
by the Gregorio Araneta, Inc. Failure on the part of the persons named in this
paragraph to comply with said order, the Court shall issue such writs, orders
and processes as may be necessary to place the J.M. Tuason & Co., Inc. and
Gregorio Araneta, Inc. in possession of the said 30 quiñones.

On April 4, 1957, the Deudors filed a motion for reconsideration, stating that their
failure to make delivery of the 30 "quiñones" was not due to their fault; that the period
of four (4) months given them in the order of February 28, 1957, for the delivery of
said portion, is too short; that the pendency of the other cases mentioned in appellees'
motion and manifestation dated August 8, 1956, rendered the aforementioned order
premature; and that the Deudors are themselves entitled to an order directed to the
Sheriff for the delivery to the appellees of the litigated property, and praying that said
order of February 28, 1957, be so modified as to delete therefrom all references to the
four-month period for the delivery of the 30 "quiñones" and to appellees' discharge
from their obligation petitions under the compromise agreement, and that the Sheriff
be ordered "to clear the premises of said 30 'quiñones' of all persons unlawfully
squatting on or occupying the same or portions thereof."
Gregorio Araneta, Inc. in turn, filed a motion, dated August 16, 1957, alleging, inter
alia, that the Deudors had not delivered the aforementioned portion of 30 "Quiñones",
despite the expiration of the period of four (4) months, fixed in the order of February
28, 1957, and that, owing to the failure of the Deudors to make said delivery, the
construction of houses by squatters within said area had continued so unabated that, as
of August 12, 1957, there were 341 constructions therein, and praying that an order be
issued directing the Sheriff of Quezon City to place the appellees "in possession of the
30 'quiñones' subject to these cases, now in the possession" of the Deudors, who were
named individually in said motion.
On January 9, 1958, appellants herein filed a manifestation in which they offered to
deliver to the appellees those portions of the 30 "quiñones" on which there are no
actual occupants or squatters, as well as to cooperate with the appellees in pin-pointing
the unoccupied and clear areas which they are ready to deliver and to join the
appellees in the filing of appropriate suits for the ejectment of all persons unlawfully
occupying portions of the remaining thirty (30) "quiñones" and/or handling
negotiations directed to the same end.
By an order, dated January 10, 1958, the lower court denied the motion for
reconsideration of the Deudors and granted said motion of Gregorio Araneta, Inc.
dated August 16, 1957. This order was amended by another one, dated January 21,
1958, which suspended the resolution of said motion to Gregorio Araneta, Inc., in
compliance with a writ of preliminary injunction issued by the Court of Appeals.
Appellants maintain that the orders of February 28, 1957 and January 10, 1958, are
erroneous, upon the ground that: (1) the lower court had no authority, either to fix a
period of four (4) months for the delivery of the thirty (30) "quiñones" in question, or
to declare that the appellees would be free from their obligations under the
OBLICON (When Court May Fix A Period) |7
Compromise Agreement, should the Deudors fail to make delivery within said period;
(2) the lower court's lack of authority to decide in this case the issues raised in cases
Q-1732, Q-1733, Q-1746, Q-1799 and Q-1932 thereof, as stated in its order of
February 28, 1957, shows that the same was premature, insofar as it fixed the
aforementioned period and stated the effect of the failure to make delivery within the
same; (3) neither did the lower court had authority, after the expiration of said period,
to set aside the Compromise Agreement, to the extent that it remained unimplemented
or executory, and to release the appellees from further obligations under said
agreement and (4) although the lower court held the appellees entitled to a process for
the delivery of the 30 "quiñones" to them, it denied appellants' petition for such
process in favor of the same appellees.
With respect to the period fixed by the lower court for the delivery of said 30
"quiñones" and the effect of the failure to deliver the same within said period, it is
urged that the order of February 28, 1957, amounted to an amendment of the
Compromise Agreement, without the consent of the parties therein, and of the decision
of April 10, 1953, long after the same had become final and executory. There is no
merit in this pretense. Appellants admit that the Compromise Agreement "failed to
prove for a specific period within which the Deudors should deliver possession" of
said 30 "quiñones". Upon the other hand, it is clear from the nature of said agreement
and the circumstances surrounding the same that a period was intended by the parties
thereto. Indeed, considering that the appellees had a Torrens title, they had no reason
to agree on paying P614,925.74 to the Deudors, except upon the expectation of
delivery of said area without unreasonable delay. Accordingly, said agreement is
subject to the principle set forth in Article 1197 of the Civil Code of the Philippines,
reading:
If the obligation does not fix a period, but from its nature and the
circumstances it can be inferred that a period was intended the courts may fix
the duration thereof.
The courts shall also fix the duration of the period when it depends upon the
will of the debtor.
In every case, the Courts shall determine such period as may under the
circumstances have been probably contemplated by the parties. Once fixed by
the courts, the period cannot be changed by them.
When the authority granted by this provision is exercised by courts, the same do not
amend or modify the obligation concerned. Article 1197 is part and parcel of all
obligations contemplated therein. Hence, whenever a period is fixed pursuant to said

Article, the court merely enforces or carries out an implied stipulation in the contract
in question. In fact, insofar as contracts not fixing a period are concerned, said legal
provision applies only if, from the nature and circumstances surrounding the contract
involved, "it can be inferred that a period was intended" by the parties thereto. For this
reason, the last paragraph of Article 1197, ordains that "in every case, the courts shall
determine such period as may under the circumstances have been
probably contemplated by the parties." In other words, in fixing said period, the Court
merely ascertains the will of the parties and gives effectthereto.
Neither does the order of February 28, 1957, amount to an amendment of the decision
of April 10, 1953, for the same approved the Compromise Agreement in toto and
enjoined the parties "to abide and comply faithfully with the terms and conditions"
thereof. Thus, the agreement became, for all intents and purposes, incorporated in the
decision, and acquired the same force and effect as the latter. And this is why
appellants contend that the order of February 28, 1957 constitutes an amendment of
the decision of April 10, 1953. However, this conclusion of the appellants is legally
untenable, for, as pointed out above, Article 1197 of our Civil Code is part of the
Compromise Agreement, and, consequently, of said decision, so that the application of
said Article involved merely the enforcement of an implied stipulation of the parties to
said agreement, and, accordingly, of an implied provision of the decision itself. As a
matter of fact, said decision explicitly declares that "the parties and their respective
attorneys have petitioned this Court that after rendition of judgment . . . steps be
taken . . . to implement the 'Compromise Agreement'" and that "in the interest of
justice the Court grants this petition."
The Deudors insist that, as stated by the lower court in its order of February 28, 1957,
it could not decide in this case the issues raised by a number of claimants, not named
in Annexes B and C of the Compromise Agreement, who had instituted, against the
herein appellees and appellants, civil actions other than those settled by said agreement
and that being thus aware that appellants cannot deliver the 30 "quiñones" in question
on account of said new civil actions, the lower court still required them to make said
delivery under penalty of forfeiting the right to collect P614,925.74. Thus appellants
would seem to imply that the lower court had imposed upon them an obligation which
is impossible of compliance because of "legal obstacles" to its performance.
The obligation to deliver said 30 "quiñones" arose, however, from the fact that
appellees were owners thereof and from the promise made by the Deudors in the
Compromise Agreement, not from the order of February 28, 1957. Moreover, the
period within which delivery was to be made it sprang from the same agreement, as
implemented by the court, pursuant to said Article 1197, which, impliedly, is part of
the agreement. Again, appellants represented therein that they were in possession of
OBLICON (When Court May Fix A Period) |8
the land and in a position to make delivery thereof. Indeed otherwise, appellees would
not have undertaken to pay P614,925.14 to the Deudors. Appellees' right to said
delivery was not conditioned upon appellants' actual ability to make such delivery.
Hence, the existence of other parties who, by instituting judicial proceedings, had put
legal obstacles to said delivery, did not affect appellants' obligation to make it under
the Compromise Agreement. In fact, in clause 9 thereof, they guaranteed "that during
the pendency of the sale" of the property in question, "no squatters or unauthorized
persons shall settle or take possession of any portion of said property . . .". In other
words, appellants had assumed the risks concomitant with possible incursions by
squatters or other unauthorized persons, into the aforementioned property.
It is next urged, that in case of appellants' failure to comply with any of their
obligations under the Compromise Agreement, the appellees, pursuant to clause 14
there of, had only the right to suspend the stipulated payments. It should be noted,
however, that appellees would have the obligation to pay P614,925.74 only "if the
Deudors . . . should be able to deliver the peaceful and complete possession" of the 30
"quiñones" in question. Until delivery thereof, appellants had no right, therefore, to
said sum, and, accordingly, appellees had no obligation to pay it. Since, admittedly,
said 30 "quiñones" have not been delivered, it follows that there is no occasion for the
suspension of appellees' obligation to pay, for they had no such obligation as yet. The
stipulation about suspension of payments referred to non-compliance by appellants of
their obligations under the agreement otherthan the delivery of the 30 "quiñones", for
such delivery was a suspensive condition upon the fulfillment of which the acquisition
of the right of the Deudors to said P614,925.74, and the effectiveness of the obligation
of the appellees to pay it, depended.
Because, the order of January 10, 1958, says:
It will be noted that under the agreement, the 'Deudors' are supposed to make
delivery of the areas unconditionally. In fact in several of the conferences
preceding the execution on he final compromise agreement, the registered
owners of the and made it clear that they were agreeing to the settlement only
because they wanted to obtain early possession of the whole property and the
'Deudors' through their counsels warranted hat such possession would be with
J.M. Tuason & Co., Inc. and Gregorio Araneta, Inc. in a matter of months or,
at most, in a year. There is no excuse, therefore, for the failure of the
'Deudors' to deliver the remaining 30 quiñones 4 years and 8 months after the
execution and approval of the compromise agreement. The equitable, if not
the legal, solution of the problem is the setting aside of the compromise
agreement of March 6, 1953 so far as it still remains unimplemented or
executory. The failure to deliver and the continued mushrooming of houses in
 OBLICON (When Court May Fix A Period) |9

the area, despite the compromise, justify the release of J.M. Tuason & Co., nor bound by the aforementioned decision, and, hence, are beyond the jurisdiction of
Inc. and Gregorio Araneta, Inc. from further obligation under the agreement the court in this case.
of March 16, 1953.
WHEREFORE, the orders appealed from are hereby affirmed, with costs against
appellants assert that it was improper for the lower court, in the proceedings for the herein appellants, Florencio, Maria, Aniana and Pedro, all surnamed Deudor. It is so
enforcement of its decision of April 10, 1953, to set aside the Compromise Agreement, ordered.
insofar as it still remained unimplemented or executory, rid to release the appellees
from further obligations under said agreement. The above-quoted paragraph of said Bengzon, C.J., Padilla, Bautista Angelo, Labrador, Reyes, J.B.L., Paredes, Dizon, De
order of January 10, 1958, was, however, a mere exposition of some of the reasons Leon and Natividad, JJ.,concur.
why the lower court granted appellees motion of August 16, 1957, and denied the Barrera, J., took no part.
motion for reconsideration filed by appellants on April 4, 1957. In any event, said
paragraph is but a faithful statement of the law pertinent to the subject, inasmuch as
the period of four (4) months, given to the Deudors, in said decision for the delivery of
the land of 30 "quiñones" — to which their rightto collect P614,925.74 was subject as
a suspensive condition constituted a resolutory period. When the same expired with
said suspensive condition still unfulfilled, appellants' right to comply with it was
extinguised and the conditional obligation of the appellees to pay said sum was
terminated (Article 1193, Civil Code of the Philippines).

With respect to appellants' claim to the effect that they offered to deliver "portions" of
the land of 30 "quiñones" on which there are no actual occupants or squatters at
present", suffice it to note that, under clause 8, section d, subsection 2 of the
Compromise Agreement, the appellees are bound to pay P614,925.74 only "if the
Deudors ... should be able to deliver the peaceful and complete possession" of said
land of 30 "quiñones". In short, delivery of a portion thereof would not suffice for the
acquisition appellants of the right to collect said sum or any part by thereof. The
parties clearly contemplated a full, not partial fulfillment of said condition.

Lastly, appellants say that they have as much right as appellees herein to the execution
of the decision herein, and yet the lower court granted the letter's motion for a writ of
execution thereof and denied a motion of the former to the same effect. It is not true,
however, that the two (2) motions were identical. Appellees prayed that an order be
issued directing the Sheriff of Quezon City "to place them in possession of the 30
'quiñones' subject to these cases, now in the possession of" appellants, whereas
appellants' motion was to the effect that an order be issued "commanding the Sheriff to
clear the premises of the, 30 'quiñones' from all persons unlawfully squattingon or
occupying the same or portions thereof." It was proper for the lower court to grant
appellees' motion, because the therein sought was directed against appellants who
process are bound by the decision of April 10, 1953. It would have been improper for
the lower court to grant appellants' squatters, who are neither parties in this proceeding