G.R. No. 107737 October 1, 1999
00 already paid to and
JUAN L. PEREZ, LUIS KEH, CHARLIE LEE and ROSENDO G. TANSINSIN, JR.,
petitioners,
vs.
COURT OF APPEALS, LUIS CRISOSTOMO and VICENTE ASUNCION,
respondents.
This is a petition for review on certiorari of the Decision 1 of the Court of
Appeals affirming the decision of the Regional Trial Court of Bulacan, Branch
9 2 that disposed of Civil Case No. 5610-M (Luis Crisostomo v. Luis Keh, Juan
Perez, Charlie Kee and Atty. Rosendo G. Tansinsin, Jr.) as follows:
WHEREFORE, premises considered, judgment is hereby rendered:
a) directing defendant JUAN PEREZ to allow plaintiff LUIS CRISOSTOMO to
occupy and operate the "Papaya Fishpond" for a period of 5 1/2 years at the
rental rates of P150,000.00 for the first six months and P175,000.00 for the
remaining five years (the same rates provided for in Exh. 4);
b) ordering defendants LUIS KEH, CHARLIE LEE, JUAN PEREZ and Atty.
ROSENDO TANSINSIN, JR. to pay unto the plaintiff the amounts of
P150,000.00 as actual damages; P20,000.00 as moral damages; P20,000.00
as exemplary damages; and P10,000.00 as attorney's fees, plus the costs of
the suit;
c) directing the release, delivery or payment directly to plaintiff LUIS
CRISOSTOMO of the amounts of P128,572.00 and P123,993.85, including
the interests which may have already accrued thereon, deposited with the
Paluwagan ng Bayan Savings Bank (Paombong, Bulacan Branch) in the name
of the Clerk of Court and/or Deputy Clerk of Court Rodrigo C. Libunao under
this Court's Order dated February 14, 1980; however, the plaintiff is
required to pay defendant Perez the corresponding rental on the fishpond
for the period June 1979-January 1980 based on the rate of P150,000.00 per
annum, deducting therefrom the amount of P21,428.
received by then co-usufructuary Maria Perez (Exh. E);
d) dismissing the defendants' separate counter-claims for damages, for lack
of merit; and
e) dismissing the Pleading in Intervention Pro Interesse Suo filed by VICENTE
ASUNCION on the ground of lis pendens.
SO ORDERED.
The facts upon which the Court of Appeals based its Decision are the
following:
Along with Maria Perez, Fructuosa Perez, Victoria Perez, Apolonio Lorenzo
and Vicente Asuncion, petitioner Juan Perez is a usufructuary of a parcel of
land popularly called the "Papaya Fishpond." Covered by Transfer Certificate
of Title No. 8498 of the Registry of Deeds for the Province of Bulacan, the
fishpond is located in Sto. Rosario, Hagonoy, Bulacan and has an area of
around 110 hectares. On June 5, 1975, the usufructuaries entered into a
contract leasing the fishpond to Luis Keh for a period of five (5) years and
renewable for another five (5) years by agreement of the parties, under the
condition that for the first five-year period the annual rental would be
P150,000.00 and for the next five years, P175,000.00. Paragraph 5 of the
lease contract states that the lessee "cannot sublease" the fishpond "nor
assign his rights to anyone." 3
Private respondent Luis Crisostomo, who reached only the 5th grade, is a
businessman engaged in the operation of fishponds. On September 20,
1977, while he was at his fishpond in Almazar, Hermosa, Bataan, his bosom
friend named Ming Cosim arrived with petitioner Charlie Lee. The two
persuaded private respondent to take over the operation of "Papaya
Fishpond" as petitioner Lee and his partner, petitioner Luis Keh, were
allegedly losing money in its operation. Private respondent having acceded
to the proposal, sometime in December of that year, he and petitioners Lee
and Keh executed a written agreement denominated as "pakiao buwis"
whereby private respondent would take possession of the "Papaya
Fishpond" from January 6, 1978 to June 6, 1978 in consideration of the
amount of P128,000.00 broken down as follows: P75,000.00 as rental,
P50,000.00 for the value of milkfish in the fishpond and P3,000 for labor
expenses. Private respondent paid the P75,000.00 to petitioner Keh at the
house of petitioner Lee in Sta. Cruz, Hagonoy, Bulacan in the presence of
Lee's wife, brother-in-law and other persons. He paid the balance to
petitioner Lee sometime in February or March 1978 because he was
uncertain as to the right of petitioners Keh and Lee to transfer possession
over the fishpond to him. Private respondent made that payment only after
he had received a copy of a written agreement dated January 9, 1978 4
whereby petitioner Keh ceded, conveyed and transferred all his "rights and
interests" over the fishpond to petitioner Lee, "up to June 1985." From
private respondent's point of view, that document assured him of
continuous possession of the property for as long as he paid the agreed
rentals of P150,000.00 until 1980 and P.175,000.00 until 1985.1âwphi1.nêt
For the operation of the fishpond from June 1978 to May 1979, private
respondent, accompanied by Ming Cosim and Ambrocio Cruz, paid the
amount of P150,000.00 at the Malabon, Metro Manila office of petitioner
Keh. The following receipt was issued to him:
RECEIPT
June 6, 1978
P150.000,00
Received from Mr. LUIS KEH the sum of ONE HUNDRED FIFTY THOUSAND
PESOS (P150,000.00), Philippine Currency, as full payment of the yearly
leased rental of the Papaya Fishpond for the year beginning June 1978 and
ending on May 1979. The next payment shall be made on June 6, 1979.
Said sum was paid in Producers Bank of the Philippines Check No. (illegible)
164595 dated June 6, 1978.
Mr. Luis Keh has not transferred his rights over the fishpond to any person.
Caloocan City, June 6, 1978.
JUAN L. PEREZ ET AL.
By:
(Sgd.)
Rosendo G. Tansinsin, Jr.
CONFORME TO THE ABOVE:
(Sgd.)
LUIS KEH
Handwritten below that receipt but above the signature of petitioner
Charlie Lee, are the following: "Rec'd from Luis Crisostomo sum of one
hundred fifty-four thousand P154,000.00 for above payment. 5
Private respondent incurred expenses for repairs in and improvement of the
fishpond in the total amount of P486,562.65. 6 However, sometime in June
1979, petitioners Tansinsin and Juan Perez, in the company of men bearing
armalites, went to the fishpond and presented private respondent with a
letter dated June 7, 1979 showing that petitioner Luis Keh had surrendered
possession of the fishpond to the usufructuaries.
Because of the threat to deprive him of earnings of around P700,000.00 that
the 700,000 milkfish in the fishpond would yield, and the refusal of
petitioners Keh, Juan Perez and Lee to accept the rental for June 5, 1979 to
June 6, 1980, private respondent filed on June 14, 1979 with the then Court
of First Instance of Bulacan an action for injunction and damages. He prayed
for the issuance of a restraining order enjoining therein defendants Keh,
Perez and Lee from entering the premises and taking possession of the
fishpond. He also prayed for actual damages of P50,000.00, moral damages
of P20,000.00, exemplary damages in an amount that the court might
award, and attorney's fees of P10,000.00. 7
That same day, June 14, 1979, the lower court granted the prayer for a
restraining order. On November 13, 1979, Crisostomo paid one of the
usufructuaries, Maria Perez (who died in 1984), the amount of P21,428.00
as her 1/7 share of the annual rental of the fishpond for 1979-80. Maria
Perez issued a notarized receipt for that amount. 8
On January 11, 1980, the court lifted the restraining order thereby
effectively depriving private respondent of possession over the fishpond. On
February 14, 1980, the parties submitted a partial compromise agreement
with the following stipulations:
1. The amount of P128,572.00 that private respondent deposited as rental
with the Office of the Clerk of Court under O.R. No. 21630 dated November
15, 1979 be withdrawn from that office and deposited with the Paluwagan
ng Bayan Savings & Loan Association, Inc. (Paombong, Bulacan branch) and
which deposit shall not be withdrawn unless authorized by the court; and
2. The plaintiff could personally harvest milkfish "with commercial value" in
the presence of Perez and under the supervision of the deputy clerk of court
within the appointed period and that the net proceeds of the sale
(P123,993.85 per the Report dated March 4, 1980 of the deputy clerk of
court) be deposited in the name of the deputy clerk of court of Branch 6 of
the then Court of First Instance of Bulacan with the same branch of the
Paluwagan ng Bayan Savings & Loan Association, Inc. and which deposit
shall not be withdrawn unless upon order of the court after hearing.
The court approved that agreement on that same date.
Thereafter, the usufructuaries entered into a contract of lease with Vicente
Raymundo and Felipe Martinez for the six-year period of June 1, 1981 to
May 30, 1987 in consideration of the annual rentals of P550,000.00 for the
first two years and P400,000.00 for the next four years. Upon expiration of
that lease, the same property was leased to Pat Laderas for P1 million a
year.
The complaint was later amended to include petitioner Tansinsin, the
alleged administrator of the fishpond, as one of the defendants. 9 Except in
the joint answer that the defendants had filed, petitioners Keh and Lee did
not appear before the court. Neither did they testify.
In their defense, petitioners Juan Perez and Tansinsin presented evidence to
prove that they had negotiated for the lease of the property with Benito Keh
in 1975. However, they averred, for reasons unknown to petitioner Perez, in
the contract of lease that petitioner Tansinsin prepared, petitioner Luis Keh
was named as lessee. Petitioner Perez had never met Keh or Lee but
according to petitioner Tansinsin, petitioner Luis Keh was substituted for
Benito Keh because the latter was preoccupied with his other businesses.
Sometime in 1979, petitioner Keh's agent named Catalino Alcantara relayed
to petitioner Perez, Keh's intention to surrender possession of the fishpond
to the usufructuaries. Because petitioner Perez demanded that said
intention should be made in writing, on June 5, 1979, Perez received from
Keh a letter to that effect.
When private respondent received a copy of that letter of petitioner Keh, he
took the position that petitioner Perez had no right to demand possession of
the fishpond from him because Perez had no contract with him. Private
respondent was allowed four (4) months within which to vacate the
premises but he immediately filed the complaint for injunction and
damages. Thereafter, private respondent's counsel, Atty. Angel Cruz and
other persons tried to prevail upon petitioner Perez to allow private
respondent to occupy the property for three (3) more years. Petitioner
Perez declined that proposition.
On September 6, 1989, the lower court rendered the aforesaid decision. It
arrived at the conclusion that the defendants therein "conspired with one
another to exploit the plaintiff's naivete and educational inadequacies and,
in the process, to defraud him by inducing him into taking possession of the
"Papaya Fishpond" in their fond hope that, as soon as the plaintiff —
applying his known expertise as a successful fishpond operator — shall have
considerably improved the fishpond, they will regain possession of the
premises and offer the lease thereof to other interested parties at much
higher rental rates as laid bare by supervening realities." That conclusion
was founded on the following:
1. The plaintiffs (private respondent Crisostomo's) testimony bears the
"hallmarks of truth: candid, straightforward and uncontrived." He had
proven himself a "much more credible witness than his opponents."
2. The notarized receipt of Maria Perez of her share as a usufructuary in the
rental for 1979-80 is a "clear avowal of plaintiffs legitimate operation of the
"Papaya Fishpond" as assignee or transferee thereof." It was impossible for
the other usufructuaries, especially Juan Perez who was residing in the same
locality and actively involved in the "affairs of the fishpond," not to have
known that plaintiff occupied the fishpond for one and a half years as
assignee of Keh and Lee. It was unbelievable that both Tansinsin and Perez
would only perceive the plaintiff as a mere encargado of Keh and Lee.
3. The receipt whereby Tansinsin acknowledged payment of P150,000.00 as
rental for June 1978-May 1979 bears "tell-tale signs" of the conspiracy.
Firstly, the statement "Mr. Luis Keh has not transferred his rights over the
fishpond to any person" is entirely irrelevant to that receipt unless it was
intended "to preempt plaintiff's claim of rights and interests over the said
property as either sub-lessee or assignee." Secondly, Keh's having signified
"Conforme to the above" is a gratuitous notation as it actually indicates that
the money came from the plaintiff. Thirdly, Atty. Tansinsin's receipt of the
amount for and in behalf of "JUAN L. PEREZ ET AL." illustrates his "active and
dominant role in the affairs" of the fishpond whether as administrator
thereof or as beneficiary of a share from its fruits.
4. Service upon plaintiff of Keh's letter surrendering possession of the
fishpond implied that defendants knew that plaintiff was in possession
thereof. That they resorted to the intimidating presence of armed men is
proof that they expected the plaintiff to refuse to give up possession of the
property. These circumstances "completely belie the protestations of Perez
and Tansinsin of lack of knowledge of the contract entered into" between
the plaintiff, and Lee and Keh.
5. The nonpresentation of Lee and Keh on the witness stand by Atty.
Tansinsin "can very well be construed as a smart maneuver to cover up the
sinister cabal for deception inferrable from the attendant facts and
circumstances." In their joint answer, Keh and Lee tried to relieve Perez of
any liability in favor of the plaintiff. That is understandable "because, should
the Court disregard the reliance of Perez on the prohibition against sub-
lease or assignment of the "Papaya Fishpond", then all the defendants shall
have exposed themselves to unavoidable liability for the acts complained of
by the plaintiff."
6. Atty. Tansinsin was the common legal counsel of all the defendants and,
by his testimony, even the plaintiff. Atty. Tansinsin's denial that he was
plaintiffs counsel was his way of "deflecting plaintiffs imputations of
professional improprieties against him." Plaintiff must have assumed that
Atty. Tansinsin was also his lawyer considering that they were "on very
friendly terms" and therefore Atty. Tansinsin might have been instrumental
in dispelling whatever fears plaintiff had entertained as regards the business
transactions involved.
7. The fact that the fishpond was subsequently rented out for astronomical
amounts is proof that the plaintiff had considerably improved the fishpond.
10
The lower court added:
Bluntly yet succinctly put, the foregoing circumstances when viewed
collectively with other cogent aspects of the instant case inexorably lead to
the Court's well-considered view that the defendants — tempted by the
bright prospect of a lucrative business coup — embarked themselves in an
egregious scheme to take undue advantage of the gullibility of the plaintiff
who, as borne by ensuing events, proved himself an ideal victim to prey
upon: pathetically unsuspecting yet only too eager to invest his material
resources and self-acquired technical know-how to redeem what was then a
dwindling business enterprise from total collapse. Plaintiffs impressive
performance, alas, only redounded ultimately to the supreme benefit
exclusively of the defendants. A classic case of "ako ang nagsaing, iba ang
kumain!"
The defendants elevated the case to the Court of Appeals which, as earlier
mentioned, affirmed the decision of the trial court and disposed of the
appeal on February 18, 1992 as follows:
WHEREFORE, in view of all the foregoing, judgment appealed from, is
hereby AFFIRMED.
However, intervenor-appellant is hereby declared co-usufructuary of the
Papaya fishpond, and is, therefore, entitled to all rights and interest due to
the usufructuaries of the said fishpond.
SO ORDERED.
On the defendant-appellants' contention that the principle of res judicata
should be applied because the Court of Appeals had ruled on the issue of
possession in CA-G.R. No. 10415-R, a petition for certiorari and injunction
with preliminary mandatory injunction, the Court of Appeals held that said
principle was unavailing. The petition in CA-G.R. No. 10415-R involved a writ
of injunction "which presupposes the pendency of a principal or main
action." Moreover, the decision in that case did not resolve the issue of who
should be in possession of the Papaya Fishpond as findings of fact of the
trial court cannot be reviewed in a certiorari proceeding.1âwphi1.nêt
The Court of Appeals ruled further that appellee Crisostomo "cannot be
considered a possessor in bad faith, considering that he took possession of
the fishpond when appellants Keh and Lee assigned to him appellant Keh's
leasehold right." It held that appellant Perez knew of the transfer of
possession of the fishpond to appellee and that the receipt evidencing
payment of the 1978-1979 rental even bears an expressed admission by Lee
that the payment came from appellee Crisostomo.
Agreeing with the court a quo that "defendants-appellants employed fraud
to the damage and prejudice of plaintiff-appellee," the Court of Appeals
held that appellants should be held liable for damages. As regards the
intervention pro interesse suo, the appellate court ruled that the same
should be allowed because, even if the litigation would not be technically
binding upon him, complications might arise that would prejudice his rights.
Pointing out that a usufruct may be transferred, assigned or disposed of, the
Court of Appeals ruled that the intervenor cannot be excluded as a
usufructuary because he had acquired his right as such from a sale in
execution of the share of Jorge Lorenzo, one of the usufructuaries of the
fishpond.
Herein petitioners filed a motion for the reconsideration of that Decision of
the Court of Appeals. They alleged that the Decision was premature because
it was rendered when they had not yet even received a copy of the
intervenor's brief wherein assignments of errors that directly affected their
rights and interests were made. They insisted that the principle of res
judicata was applicable because in G.R. No. 64354, this Court upheld the
Decision of the Court of Appeals in CA-G.R. No. 10415. They added that
appellee Crisostomo was guilty of forum shopping because the issue of
possession had been "squarely decided" in CA-G.R. No. 10415. They stressed
that the contract of lease between Keh and the usufructuaries prohibited
subleasing of the fishpond; that by the receipt dated June 6, 1978, it was
Keh who paid the rental; that appellee Crisostomo was a perjured witness
because in the notebook showing his expenses, the amount of P150,000.00
for rentals does not appear; that the term of the contract had expired and
there was no renewal thereof, and that the consideration of P150,000.00
was grossly inadequate. They averred that the Court of Appeals erred in
awarding damages that were not prayed for in the second amended
complaint and that amounts not specified in the complaint were awarded as
damages. They disclaimed that Atty. Tansinsin was the administrator of the
fishpond.
On October 30, 1992, the Court of Appeals denied the motion for
reconsideration for lack of merit. It ruled that the Decision was not
prematurely promulgated "considering that the intervention proceeding is
solely between intervenor and defendants-appellants, which is completely
separable and has nothing to do with the merits of the appeal."
In the instant petition for review on certiorari, petitioners raise six (6)
grounds for giving due course to it. 11 Those grounds may be distilled into
the following: (a) the applicability of the principle of res judicata; (b) the
premature promulgation of the Decision of the Court of Appeals, and (c)
private respondent was not a sublesee of the fishpond under the law.
In arguing that the principle of res judicata applies in this case, petitioners
rely on the portion of the Decision 12 of the Court of Appeals in CA-G.R. No.
10415 that states:
We find no basis for declaring respondent Judge guilty of grave abuse of
discretion on this regard. The trial court's finding that petitioner does not
appear entitled to any contract or law to retain possession of the fishpond
in question since he is neither an assignee or sub-lessee and, therefore,
merely a stranger to the contract of lease is a finding of fact review of which
is not proper in a certiorari proceedings. Not only is petitioner not a party to
the lease agreement over the fishpond in question but also the very
authority upon which he predicates his possession over the fishpond — that
the leasehold right of Luis Keh had been assigned to him — undoubtedly
lacks basis for the very contract between Luis Keh and the lessors expressly
provides —
That the lessee cannot sub-lease above-described fishpond nor assign his
rights to anyone.
xxx xxx xxx
(Emphasis supplied by petitioners.) 13
Petitioners assert that said Decision of the Court of Appeals which was in
effect upheld by this Court when it denied the petition for review on
certiorari in G.R. No. 64354 (Luis Crisostomo v. Intermediate Appellate
Court), 14 is "res judicata to the issue of possession in this case." 15
However, as expressed in that quoted portion of the Decision in CA-G.R. No.
10415, the issue of whether private respondent is an assignee or a sub-
lessee "is a finding of fact review of which is not proper in a certiorari
proceeding" or the proceeding in that case.
CA-G.R. No. 10415 was spawned by the lifting on January 11, 1980 of the
restraining order previously issued by the trial court on June 14, 1979.
Private respondent filed a special civil action of certiorari and injunction
with preliminary mandatory injunction and/or mandatory restraining order
to question the order of January 11, 1980. Thus, the issue in that petition
was whether or not the trial court gravely abused its discretion in lifting the
restraining order. The statement in that Decision of the Court of Appeals
that a writ of preliminary injunction may be denied "if the party applying for
it has insufficient title or interest to sustain it and no claim to an ultimate
relief (is) sought" by no means resolved the issue of who is entitled to
possess the fishpond. In denying the petition for certiorari, the Court of
Appeals was simply saying that there was no reason to restore private
respondent to the possession of the fishpond pursuant to the restraining
order that he had earlier obtained. The issue of possession was collaterally
discussed only to resolve the propriety of the lifting of the restraining order
based on evidence available at that time. Hence, there was no judgment on
the merits in the main case or in Civil Case No. 5610-M. Simply put, the
Decision in CA-G.R. No. 10415 involves an interlocutory order on the
propriety of the lifting of the restraining order and not a judgment on the
merits of Civil Case No. 5610-M.
For res judicata to apply, the following requisites must concur: (a) the
former judgment must be final; (b) the court which rendered it had
jurisdiction over the subject matter and the parties; (c) the judgment must
be on the merits, and (d) there must be between the first and second
actions identity of parties, subject matter and causes of action. 16 The
Decision in CA-G.R. No. 10415 having resolved only an interlocutory matter,
the principle of res judicata cannot be applied in this case. There can be no
res judicata where the previous order in question was not an order or
judgment determinative of an issue of fact pending before the court but was
only an interlocutory order because it required the parties to perform
certain acts for final adjudication. 17 In this case, the lifting of the
restraining order paved the way for the possession of the fishpond on the
part of petitioners and/or their representatives pending the resolution of
the main action for injunction. In other words, the main issue of whether or
not private respondent may be considered a sublessee or a transferee of the
lease entitled to possess the fishpond under the circumstances of the case
had yet to be resolved when the restraining order was lifted.
Petitioners assail the Court of Appeals' Decision as "premature" and
therefore null and void, because prior to the promulgation of that Decision,
private respondent-intervenor Vicente Asuncion failed to furnish them with
a copy of his brief the assignment of errors of which allegedly "directly"
affected their rights and interests. 18 While it is true that petitioners were
deprived of the opportunity to contravene the allegations of the intervenor
in his brief, that fact can not result in the nullity of the Decision of the Court
of Appeals. 19 Vicente Asuncion intervened pro interesse suo or "according
to his interest." 20 Intervention pro interessse suo is a mode of intervention
in equity wherein a stranger desires to intervene for the purpose of
asserting a property right in the res, or thing, which is the subject matter of
the litigation, without becoming a formal plaintiff or defendant, and without
acquiring control over the course of a litigation, which is conceded to the
main actors therein. 21 In this case, intervenor Vicente Asuncion aimed to
protect his right as a usufructuary. Inasmuch as he has the same rights and
interests as petitioner Juan Perez, any judgment rendered in the latter's
favor entitled him to assert his right as such usufructuary against his co-
usufructuary. Should said intervenor claim his share in the usufruct, no
rights of the petitioners other than those of Juan Perez would be prejudiced
thereby.
Worth noting is the fact that after the trial court had allowed Vicente
Asuncion's intervention pro interesse suo, petitioner Juan Perez filed a
petition for certiorari docketed as CA-G.R. No. 13519 to set aside the order
denying his motion to dismiss the pleading in intervention. In its Decision of
January 27, 1988, the Seventh Division of the Court of Appeals 22 denied
the petition for certiorari for lack of merit. It upheld the trial court's ruling to
allow the intervention pro interesse suo to protect Vicente Asuncion's right
as a co-usufructuary in the distribution or disposition of the amounts
representing the rentals that were deposited with the court. That Vicente
Asuncion had filed Civil Case No. 8215-M seeking recovery of his alleged
share in the fruits of the Papaya Fishpond from 1978 would not be a reason
for the dismissal of the motion for intervention pursuant to Rule 16, Sec. 1
(e) of the Rules of Court. 23 The Court of Appeals explained as follows:
Indeed, if by means of intervention a stranger to a lawsuit is permitted to
intervene without thereby becoming a formal plaintiff or defendant
(Joaquin v. Herrera, 37 Phil. 705, 723 [1918]), then there is in the case at bar
no identity of parties to speak of. Lis pendens as a ground for a motion to
dismiss requires as a first element identity of parties in the two cases.
Nor is there an identity of relief sought. Civil Case No. 8295-M seeks an
accounting of the proceeds of the fishpond while Civil Case No. 5610-M is
for injunction to prevent the petitioner from retaking the fishpond from Luis
Crisostomo. The herein private respondent sought to intervene in the latter
case simply to protect his right as usufructuary in the money deposited in
the court by the plaintiff Luis Crisostomo. We hold that in allowing the
intervention in this case the trial court acted with prudence and exercised
its discretion wisely. 24

Unconvinced by the Court of Appeals' Decision in CA-G.R. SP No. 13519,
petitioner Juan Perez filed a petition for review on certiorari with this Court
under G.R. No. 82096. On May 9, 1988, this Court denied the petition on the
grounds that the issues raised are factual and that there is no sufficient
showing that the findings of the respondent court are not supported by
substantial evidence or that the court had committed any reversible error in
the questioned judgment. 25 The Resolution of the Court dated May 9, 1988
became final and executory on August 26, 1988. 26
Moreover, granting that the intervention be considered as Vicente
Asuncion's "appeal," a litigant's failure to furnish his opponent with a copy
of his appeal does not suffice to warrant dismissal of that appeal. In such an
instance, all that is needed is for the court to order the litigant to furnish his
opponent with a copy of his appeal. 27 This is precisely what happened in
this case. On May 13, 1992, the Court of Appeals issued a Resolution
directing counsel for intervenor to furnish herein petitioners with a copy of
intervenor Vicente Asuncion's brief within a 10-day period. It also granted
petitioners an opportunity to file a reply-brief or memorandum and the
intervenor, a reply to said memorandum. 28 That Resolution is proper under
the premises because, by the nature of an intervention pro interesse suo, it
can proceed independently of the main action. Thus, in the Resolution of
October 30, 1992, in resolving the issue of the alleged prematurity of its
Decision, the Court of Appeals held that "the proceeding is solely between
intervenor and defendants-appellants, which is completely separable and
has nothing to do with the merits of the appeal." 29
At the hearing of Civil Case No. 5610-M, petitioner Juan Perez attempted to
establish the death on October 14, 1979 of Jorge Lorenzo, 30 the
usufructuary from whom Vicente Asuncion derived his right to intervene pro
interesse suo. Since under Article 603 of the Civil Code a usufruct is
extinguished "by the death of the usufructuary, unless a contrary intention
clearly appears," there is no basis by which to arrive at the conclusion that
the usufruct originally exercised by Jorge Lorenzo has indeed been
extinguished or, on the contrary, has survived Lorenzo's demise on account
of provisions in the document constituting the usufruct. That matter is best
addressed in Civil Case No. 8215-M wherein Vicente Asuncion seeks his
share as a transferee of the usufruct established for Jorge Lorenzo. All that
is discussed here is the matter of intervention pro interesse suo vis-a-vis the
issue of prematurity of the Decision of the Court of Appeals.
Petitioners' principal argument against the Court of Appeals' Decision in
favor of private respondent Crisostomo is that he could not have been an
assignee or sub-lessee of the fishpond because no contract authorized him
to be so. Petitioners' argument is anchored on factual issues that, however,
have no room for discussion before this Court. It is well-entrenched doctrine
that questions of fact are not proper subjects of appeal by certiorari under
Rule 45 of the Rules of Court as this mode of appeal is confined to questions
of law. 31 Factual findings of the Court of Appeals are conclusive on the
parties and carry even more weight when said court affirms the factual
findings of the trial
court. 32 Accordingly, this review shall be limited to questions of law arising
from the facts as found by both the Court of Appeals and the trial court.
Admittedly, the contract between the usufructuaries and petitioner Keh has
a provision barring the sublease of the fishpond. However, it was petitioner
Keh himself who violated that provision in offering the operation of the
fishpond to private respondent. Apparently on account of private
respondent's apprehensions as regards the right of petitioners Keh and Lee
to transfer operation of the fishpond to him, on January 9, 1978, petitioner
Keh executed a document ceding and transferring his rights and interests
over the fishpond to petitioner Lee. That the same document might have
been a ruse to inveigle private respondent to agree to their proposal that he
operate the fishpond is of no moment. The fact is, petitioner Keh did
transfer his rights as a lessee to petitioner Lee in writing and that, by virtue
of that document, private respondent acceded to take over petitioner Keh's
rights as a lessee of the fishpond.
Although no written contract to transfer operation of the fishpond to
private respondent was offered in evidence, 33 the established facts further
show that petitioner Juan Perez and his counsel, petitioner Tansinsin, knew
of and acquiesced to that arrangement by their act of receiving from the
private respondent the rental for 1978-79. By their act of receiving rental
from private respondent through the peculiarly written receipt dated June
6, 1978, petitioners Perez and Tansinsin were put in estoppel to question
private respondent's right to possess the fishpond as a lessee. Estoppel in
pais arises when one, by his acts, representations or admissions, or by his
own silence when he ought to speak out, intentionally or through culpable
negligence, induces another to believe certain facts to exist and such other
rightfully relies and acts on such belief, so that he will be prejudiced if the
former is permitted to deny the existence of such facts. 34
Nevertheless, we hesitate to grant private respondent's prayer that he
should be restored to the possession of the fishpond as a consequence of
his unjustified ejectment therefrom. To restore possession of the fishpond
to him would entail violation of contractual obligations that the
usufructuaries have entered into over quite a long period of time now.
Supervening events, such as the devaluation of the peso as against the
dollar as well as the addition of improvements in the fishpond that the
succeeding lessees could have introduced, have contributed to the increase
in rental value of the property. To place private respondent in the same
position he was in before the lifting of the restraining order in 1980 when he
was deprived the right to operate the fishpond under the contract that
already expired in 1985 shall be to sanction injustice and inequity. This
Court, after all, may not supplant the right of the usufructuaries to enter
into contracts over the fishpond through this Decision. Nonetheless, under
the circumstances of the case, it is but proper that private respondent
should be properly compensated for the improvements he introduced in the
fishpond.1âwphi1.nêt
Art. 1168 of the Civil Code provides that when an obligation "consists in not
doing and the obligor does what has been forbidden him, it shall also be
undone at his expense." The lease contract prohibited petitioner Luis Keh,
as lessee, from subleasing the fishpond. In entering into the agreement for
pakiao-buwis with private respondent, not to mention the apparent artifice
that was his written agreement with petitioner Lee on January 9, 1978,
petitioner Keh did exactly what was prohibited of him under the contract —
to sublease the fishpond to a third party. That the agreement for pakiao-
buwis was actually a sublease is borne out by the fact that private
respondent paid petitioners Luis Keh and Juan Perez, through petitioner
Tansinsin the amount of annual rental agreed upon in the lease contract
between the usufructuaries and petitioner Keh. Petitioner Keh led private
respondent to unwittingly incur expenses to improve the operation of the
fishpond. By operation of law, therefore, petitioner Keh shall be liable to
private respondent for the value of the improvements he had made in the
fishpond or for P486,562.65 with interest of six percent (6%) per annum
from the rendition of the decision of the trial court on September 6, 1989.
35
The law supports the awards of moral and exemplary damages in favor of
private respondent and against the petitioners. Their conspiratorial scheme
to utilize private respondent's expertise in the operation of fishponds to bail
themselves out of financial losses has been satisfactorily established to
warrant a ruling that they violated Article 21 of the Civil Code and therefore
private respondent should be entitled to an award of moral damages.
Article 21 states that "(a)ny person who wilfully causes loss or injury to
another in a manner that is contrary to morals, good customs or public
policy shall compensate the latter for the damage." Exemplary damages
shall likewise be awarded pursuant to Article 2229 of the Civil Code. 36
Because private respondent was compelled to litigate to protect his interest,
attorney's fees shall also be awarded. 37
WHEREFORE, in light of the foregoing premises, the decision of the Court of
Appeals is AFFIRMED insofar as it (a) directs the release to private
respondent of the amounts of P128,572.00 and P123,993.85 deposited with
the Paluwagan ng Bayan Savings Bank in Paombong, Bulacan and (b)
requires private respondent Crisostomo to pay petitioner Juan Perez the
rental for the period June 1979 to January 1980 at the rate of P150,000.00
per annum less the amount of P21,428.00 already paid to usufructuary
Maria Perez. It should, however, be subject to the MODIFICATIONS that:
1. Petitioner Luis Keh shall pay private respondent Luis Crisostomo in the
amount of P486,562.25 with legal interest from the rendition of the
judgment in Civil Case No. 5610-M or on September 6, 1989, and
2. Petitioners be made liable jointly and severally liable for moral damages
of P50,000.00, exemplary damages of P20,000 and attorney's fees of
P10,000.00.
No costs.
SO ORDERED.
G.R. No. 81551 April 27, 1989
PHILIPPINE NATIONAL CONSTRUCTION CORPORATION, petitioner,
vs.
PHILIPPINE NATIONAL LABOR RELATIONS COMMISSION (THIRD DIVISION)
AND NICOLAS SACEDA, respondents.
Apolo, Anasco & Associates for petitioner.
The Solicitor General for public respondent.
Citizens Legal Assistance Office for private respondent.
GRIÑO-AQUINO, J.:
Assailed in this petition for certiorari is the resolution promulgated on
November 16, 1987 by the NLRC in POEA CASE NO. (L) 84-07-660 affirming
the decision of the POEA Officer-In-Charge, Honesto Cueva, who granted
private respondent Nicolas Saceda's claims for stand-by pay and withheld
allotments. The following undisputed facts were lifted from the Solicitor
General's Comment on the petition:
1. In the first week of December, 1981, petitioner Philippine National
Construction Corporation (hereinafter called PNCC), a duly registered
construction company, through its predecessor-in-interest Construction and
Development Corporation of the Philippines (CDCP), hired private
respondent Nicolas L. Saceda as HT Driver I (Actg. Scraper Operator) for its
Suyallil North Port road project in the Kingdom of Saudi Arabia. Respondent
Saceda was hired at an hourly rate of US$1.55 for 24 months contract
period to be effective upon his departure. He left the Philippines on January
8, 1982.
2. On January 8, 1984, private respondent Saceda completed his two (2)
years overseas contract. However, it was extended by petitioner up to
January 27, 1984.
3. On February 9,1984,private respondent was dispatched to Jeddah, Saudi
Arabia for immediate repatriation to the Philippines. He was first booked for
departure on February 21, 1984.
4. However, private respondent refused to depart because he wanted to
await the final disposition on the complaint he filed against petitioner PNCC
for payment of his completion bonus, unused vacation/sick leave and
unpaid wages from December 1, 1983 up to January 27, 1984. The decision
of the Saudi labor authorities which was favorable to private respondent
was rendered on March 24, 1984. Private respondent agreed to be
repatriated on March 27, 1984, after petitioner PNCC paid him the award
granted by the Saudi labor authorities.
5. Upon his arrival in the Philippines, private respondent Saceda found out
that the allotment representing 70% of his salary for the period November
16,1983 to January 15,1984, amounting to $408.00 was not paid by
petitioner PNCC to bis designated beneficiary in the Philippines. Despite
repeated demands, petitioner failed to pay said claim without justifiable
reason.
6. On August l6,1984,private respondent Saceda filed a complaint with the
Workers Adjudication and Assistance Office, Philippine Overseas
Employment Administration (POEA), docketed as POEA Case No. L-84- 07-
660, for non-payment of withheld salary/allotment and stand-by pay
corresponding to the period January 27, 1984 to March 27,1984 in the sum
of US$744.00. He claimed that he was not repatriated soon upon the
termination of his contract but was made to wait and remain Idle for two
months. (pp. 27-29, Rollo.)
On April 30, 1986, Honesto Cueva, officer-in-charge of the POEA, rendered a
decision, the dispositive portion of which reads as follows:
WHEREFORE, in view of the foregoing considerations, this Office hereby
ordered herein respondent Philippine National Construction Corporation
(PNCC) to pay herein complainant Nicolas Saceda the peso equivalent based
on the prevailing exchange rate at the time of actual payment of the
following amounts:
1. US$206.40 representing stand-by pay for the period covered from
January 27, 1984 to February 21, 1984;
2. US$408.00 representing the withheld allotment within ten (10) calendar
days upon receipt of this DECISION." (Annex A, pp. 8, 13, Rollo.)
As mentioned earlier, the NLRC affirmed the above decision of the POEA in
toto.
In its petition for certiorari, the petitioner questions only the award of
stand- by pay to Saceda for being allegedly devoid of legal basis.
The petition has no merit.
The legal basis of the NLRC's award of "stand-by" pay to Saceda during the
period that he was made to wait while his employer worked for the
ticketing, booking and processing of his exit visa and travel documents for
his return trip to the Philippines, is the employment contract. Under the
contract, the PNCC was obliged to notify the employee "two months before
the end of the term of the contract" whether his contract would be
extended or he would be repatriated. Within that two-month period, the
employer, which keeps in its possession the employee's passport and travel
documents for the duration of his employment, is supposed to work for the
ticketing and processing of the employee's travel documents so that he may
immediately return to the Philippines upon the expiration of his contract.
Petitioner alleged that it takes at least one month to have travel papers
processed by the Saudi Arabian authorities. Clearly, the two-month period
stipulated in the contract is more than enough for the purpose. Hence,
petitioner alone is to blame for its failure to obtain Saceda's travel papers
within the two-month period before his contract came to an end. Since it
was through its fault that Saceda's departure was delayed, it must give him
stand-by pay.
The stand-by compensation which the employer is required to pay the
employee while the latter waits for his travel papers, is actually the damages
caused to him by the employer's delay in getting his travel papers ready. As
correctly pointed out by the Solicitor General in his Comment, the basis of
the employer's liability for such damages is Article 1170 of the Civil Code
which provides:
Art. 1170. Those who in the performance of their obligations are guilty of
fraud, negligence, or delay, and those who in any manner contravene the
tenor thereof, are liable for damages.
As it was the petitioners obligation to get Saceda's travel documents ready
for his repatriation to the Philippines upon the termination of his overseas
contract, the petitioner must answer in damages for the delay in Saceda's
departure which compelled him to "stand-by," idle and jobless in a foreign
land, while waiting for his employer to hand him his ticket and travel papers
for his trip home. The measure of those damages is the income he could
have earned if he were repatriated promptly in order that he could work
again in his country.
The fact that Saceda refused to depart on February 21, 1984 because he
wanted to wait for the outcome of the complaint which he filed against
petitioner for the payment of his completion bonus, unused vacation/sick
leaves, and unpaid wages from December 1, 1983 up to January 27, 1984
(when his extended contract of employment expired) does not shift to him
the blame for his delayed departure, for, as it turned out, his suit was
justified. The decision promulgated by the Saudi Labor Authorities on March
24,1984 upheld his claims.
Since Saceda was compelled to litigate by reason of the petitioner's unjust
refusal to pay his valid and demandable claims, the petitioner is answerable
for the damages he suffered by having to stay on to see his case through.
The petitioner should, therefore, pay him stand-by compensation from
January 28, 1984 up to March 27, 1984 when he was repatriated after the
petitioner paid the judgment in his favor.
WHEREFORE, the petition is dismissed. As above modified, We affirm the
decision of the NLRC in POEA Case No. (L) 84-07-660, with costs against the
petitioner.
SO ORDERED.
G.R. No. 98695 January 27, 1993
JUAN J. SYQUIA, CORAZON C. SYQUIA, CARLOTA C. SYQUIA, CARLOS C.
SYQUIA and ANTHONY C. SYQUIA, petitioners,
vs.
THE HONORABLE COURT OF APPEALS, and THE MANILA MEMORIAL PARK
CEMETERY, INC., respondents.
Pacis & Reyes Law Offices for petitioners.
Augusto S. San Pedro & Ari-Ben C. Sebastian for private respondents.
CAMPOS, JR., J.:
Herein petitioners, Juan J. Syquia and Corazon C. Syquia, Carlota C. Syquia,
Carlos C. Syquia, and Anthony Syquia, were the parents and siblings,
respectively, of the deceased Vicente Juan Syquia. On March 5, 1979, they
filed a complaint1 in the then Court of First Instance against herein private
respondent, Manila Memorial Park Cemetery, Inc. for recovery of damages
arising from breach of contract and/or quasi-delict. The trial court dismissed
the complaint.
The antecedent facts, as gathered by the respondent Court, are as follows:
On March 5, 1979, Juan, Corazon, Carlota and Anthony all surnamed Syquia,
plaintiff-appellants herein, filed a complaint for damages against defendant-
appellee, Manila Memorial Park Cemetery, Inc.
The complaint alleged among others, that pursuant to a Deed of Sale
(Contract No. 6885) dated August 27, 1969 and Interment Order No. 7106
dated July 21, 1978 executed between plaintiff-appellant Juan J. Syquia and
defendant-appellee, the former, father of deceased Vicente Juan J. Syquia
authorized and instructed defendant-appellee to inter the remains of
deceased in the Manila Memorial Park Cemetery in the morning of July 25,
1978 conformably and in accordance with defendant-appellant's (sic)
interment procedures; that on September 4, 1978, preparatory to
transferring the said remains to a newly purchased family plot also at the
Manila Memorial Park Cemetery, the concrete vault encasing the coffin of
the deceased was removed from its niche underground with the assistance
of certain employees of defendant-appellant (sic); that as the concrete vault
was being raised to the surface, plaintiffs-appellants discovered that the
concrete vault had a hole approximately three (3) inches in diameter near
the bottom of one of the walls closing out the width of the vault on one end
and that for a certain length of time (one hour, more or less), water drained
out of the hole; that because of the aforesaid discovery, plaintiffs-appellants
became agitated and upset with concern that the water which had collected
inside the vault might have risen as it in fact did rise, to the level of the
coffin and flooded the same as well as the remains of the deceased with ill
effects thereto; that pursuant to an authority granted by the Municipal
Court of Parañaque, Metro Manila on September 14, 1978, plaintiffs-
appellants with the assistance of licensed morticians and certain personnel
of defendant-appellant (sic) caused the opening of the concrete vault on
September 15, 1978; that upon opening the vault, the following became
apparent to the plaintiffs-appellants: (a) the interior walls of the concrete
vault showed evidence of total flooding; (b) the coffin was entirely damaged
by water, filth and silt causing the wooden parts to warp and separate and
to crack the viewing glass panel located directly above the head and torso of
the deceased; (c) the entire lining of the coffin, the clothing of the deceased,
and the exposed parts of the deceased's remains were damaged and soiled
by the action of the water and silt and were also coated with filth.
Due to the alleged unlawful and malicious breach by the defendant-appellee
of its obligation to deliver a defect-free concrete vault designed to protect
the remains of the deceased and the coffin against the elements which
resulted in the desecration of deceased's grave and in the alternative,
because of defendant-appellee's gross negligence conformably to Article
2176 of the New Civil Code in failing to seal the concrete vault, the
complaint prayed that judgment be rendered ordering defendant-appellee
to pay plaintiffs-appellants P30,000.00 for actual damages, P500,000.00 for
moral damages, exemplary damages in the amount determined by the
court, 20% of defendant-appellee's total liability as attorney's fees, and
expenses of litigation and costs of suit.2
In dismissing the complaint, the trial court held that the contract between
the parties did not guarantee that the cement vault would be waterproof;
that there could be no quasi-delict because the defendant was not guilty of
any fault or negligence, and because there was a pre-existing contractual
relation between the Syquias and defendant Manila Memorial Park
Cemetery, Inc.. The trial court also noted that the father himself, Juan
Syquia, chose the gravesite despite knowing that said area had to be
constantly sprinkled with water to keep the grass green and that water
would eventually seep through the vault. The trial court also accepted the
explanation given by defendant for boring a hole at the bottom side of the
vault: "The hole had to be bored through the concrete vault because if it has
no hole the vault will (sic) float and the grave would be filled with water and
the digging would caved (sic) in the earth, the earth would caved (sic) in the
(sic) fill up the grave."3
From this judgment, the Syquias appealed. They alleged that the trial court
erred in holding that the contract allowed the flooding of the vault; that
there was no desecration; that the boring of the hole was justifiable; and in
not awarding damages.
The Court of Appeals in the Decision4 dated December 7, 1990 however,
affirmed the judgment of dismissal. Petitioner's motion for reconsideration
was denied in a Resolution dated April 25, 1991.5
Unsatisfied with the respondent Court's decision, the Syquias filed the
instant petition. They allege herein that the Court of Appeals committed the
following errors when it:
1. held that the contract and the Rules and Resolutions of private
respondent allowed the flooding of the vault and the entrance thereto of
filth and silt;
2. held that the act of boring a hole was justifiable and corollarily, when it
held that no act of desecration was committed;
3. overlooked and refused to consider relevant, undisputed facts, such as
those which have been stipulated upon by the parties, testified to by private
respondent's witnesses, and admitted in the answer, which could have
justified a different conclusion;
4. held that there was no tort because of a pre-existing contract and the
absence of fault/negligence; and
5. did not award the P25,000.00 actual damages which was agreed upon by
the parties, moral and exemplary damages, and attorney's fees.
At the bottom of the entire proceedings is the act of boring a hole by private
respondent on the vault of the deceased kin of the bereaved petitioners.
The latter allege that such act was either a breach of private respondent's
contractual obligation to provide a sealed vault, or, in the alternative, a
negligent act which constituted a quasi-delict. Nonetheless, petitioners
claim that whatever kind of negligence private respondent has committed,
the latter is liable for desecrating the grave of petitioners' dead.
In the instant case, We are called upon to determine whether the Manila
Memorial Park Cemetery, Inc., breached its contract with petitioners; or,
alternatively, whether private respondent was guilty of a tort.
We understand the feelings of petitioners and empathize with them.
Unfortunately, however, We are more inclined to answer the foregoing
questions in the negative. There is not enough ground, both in fact and in
law, to justify a reversal of the decision of the respondent Court and to
uphold the pleas of the petitioners.
With respect to herein petitioners' averment that private respondent has
committed culpa aquiliana, the Court of Appeals found no negligent act on
the part of private respondent to justify an award of damages against it.
Although a pre-existing contractual relation between the parties does not
preclude the existence of a culpa aquiliana, We find no reason to disregard
the respondent's Court finding that there was no negligence.
Art. 2176. Whoever by act or omission causes damage to another, there
being fault or negligence, is obliged to pay for the damage done. Such fault
or negligence, if there is no pre-existing contractual relation between the
parties, is called a quasi-delict . . . . (Emphasis supplied).
In this case, it has been established that the Syquias and the Manila
Memorial Park Cemetery, Inc., entered into a contract entitled "Deed of Sale
and Certificate of Perpetual Care"6 on August 27, 1969. That agreement
governed the relations of the parties and defined their respective rights and
obligations. Hence, had there been actual negligence on the part of the
Manila Memorial Park Cemetery, Inc., it would be held liable not for a quasi-
delict or culpa aquiliana, but for culpa contractual as provided by Article
1170 of the Civil Code, to wit:
Those who in the performance of their obligations are guilty of fraud,
negligence, or delay, and those who in any manner contravene the tenor
thereof, are liable for damages.
The Manila Memorial Park Cemetery, Inc. bound itself to provide the
concrete box to be send in the interment. Rule 17 of the Rules and
Regulations of private respondent provides that:
Rule 17. Every earth interment shall be made enclosed in a concrete box, or
in an outer wall of stone, brick or concrete, the actual installment of which
shall be made by the employees of the Association.7
Pursuant to this above-mentioned Rule, a concrete vault was provided on
July 27, 1978, the day before the interment, and was, on the same day,
installed by private respondent's employees in the grave which was dug
earlier. After the burial, the vault was covered by a cement lid.
Petitioners however claim that private respondent breached its contract
with them as the latter held out in the brochure it distributed that the . . .
lot may hold single or double internment (sic) underground in sealed
concrete vault."8 Petitioners claim that the vault provided by private
respondent was not sealed, that is, not waterproof. Consequently, water
seeped through the cement enclosure and damaged everything inside it.
We do not agree. There was no stipulation in the Deed of Sale and
Certificate of Perpetual Care and in the Rules and Regulations of the Manila
Memorial Park Cemetery, Inc. that the vault would be waterproof. Private
respondent's witness, Mr. Dexter Heuschkel, explained that the term
"sealed" meant "closed."9 On the other hand, the word "seal" is defined as .
. . any of various closures or fastenings . . . that cannot be opened without
rupture and that serve as a check against tampering or unauthorized
opening." 10 The meaning that has been given by private respondent to the
word conforms with the cited dictionary definition. Moreover, it is also quite
clear that "sealed" cannot be equated with "waterproof". Well settled is the
rule that when the terms of the contract are clear and leave no doubt as to
the intention of the contracting parties, then the literal meaning of the
stipulation shall control. 11 Contracts should be interpreted according to
their literal meaning and should not be interpreted beyond their obvious
intendment. 12 As ruled by the respondent Court:
When plaintiff-appellant Juan J. Syquia affixed his signature to the Deed of
Sale (Exhibit "A") and the attached Rules and Regulations (Exhibit "1"), it can
be assumed that he has accepted defendant-appellee's undertaking to
merely provide a concrete vault. He can not now claim that said concrete
vault must in addition, also be waterproofed (sic). It is basic that the parties
are bound by the terms of their contract, which is the law between them
(Rizal Commercial Banking Corporation vs. Court of Appeals, et al. 178 SCRA
739). Where there is nothing in the contract which is contrary to law,
morals, good customs, public order, or public policy, the validity of the
contract must be sustained (Phil. American Insurance Co. vs. Judge Pineda,
175 SCRA 416). Consonant with this ruling, a contracting party cannot incur
a liability more than what is expressly specified in his undertaking. It cannot
be extended by implication, beyond the terms of the contract (Rizal
Commercial Banking Corporation vs. Court of Appeals, supra). And as a rule
of evidence, where the terms of an agreement are reduced to writing, the
document itself, being constituted by the parties as the expositor of their
intentions, is the only instrument of evidence in respect of that agreement
which the law will recognize, so long as its (sic) exists for the purpose of
evidence (Starkie, Ev., pp. 648, 655, Kasheenath vs. Chundy, 5 W.R. 68 cited
in Francisco, Revised Rules of Court in the Phil. p. 153, 1973 Ed.). And if the
terms of the contract are clear and leave no doubt upon the intention of the
contracting parties, the literal meaning of its stipulations shall control
(Santos vs. CA, et al., G. R. No. 83664, Nov. 13, 1989; Prudential Bank &
Trust Co. vs. Community Builders Co., Inc., 165 SCRA 285; Balatero vs. IAC,
154 SCRA 530). 13
We hold, therefore, that private respondent did not breach the tenor of its
obligation to the Syquias. While this may be so, can private respondent be
liable for culpa aquiliana for boring the hole on the vault? It cannot be
denied that the hole made possible the entry of more water and soil than
was natural had there been no hole.
The law defines negligence as the "omission of that diligence which is
required by the nature of the obligation and corresponds with the
circumstances of the persons, of the time and of the place." 14 In the
absence of stipulation or legal provision providing the contrary, the
diligence to be observed in the performance of the obligation is that which
is expected of a good father of a family.
The circumstances surrounding the commission of the assailed act — boring
of the hole — negate the allegation of negligence. The reason for the act
was explained by Henry Flores, Interment Foreman, who said that:
Q It has been established in this particular case that a certain Vicente Juan
Syquia was interred on July 25, 1978 at the Parañaque Cemetery of the
Manila Memorial Park Cemetery, Inc., will you please tell the Hon. Court
what or whether you have participation in connection with said internment
(sic)?
A A day before Juan (sic) Syquia was buried our personnel dug a grave. After
digging the next morning a vault was taken and placed in the grave and
when the vault was placed on the grave a hole was placed on the vault so
that water could come into the vault because it was raining heavily then
because the vault has no hole the vault will float and the grave would be
filled with water and the digging would caved (sic) in and the earth, the
earth would (sic) caved in and fill up the grave. 15 (Emphasis ours)
Except for the foreman's opinion that the concrete vault may float should
there be a heavy rainfall, from the above-mentioned explanation, private
respondent has exercised the diligence of a good father of a family in
preventing the accumulation of water inside the vault which would have
resulted in the caving in of earth around the grave filling the same with
earth.
Thus, finding no evidence of negligence on the part of private respondent,
We find no reason to award damages in favor of petitioners.
In the light of the foregoing facts, and construed in the language of the
applicable laws and jurisprudence, We are constrained to AFFIRM in toto
the decision of the respondent Court of Appeals dated December 7, 1990.
No costs.
SO ORDERED.
G.R. No. 96505 July 1, 1993
LEGASPI OIL CO., INC., petitioner,
vs.
THE COURT OF APPEALS and BERNARD OSERAOS, respondent.
Duran, Lanuzo & Associates for petitioner.
Leovigildo Mijares III for private respondent.
MELO, J.:
The petition for review on certiorari before us seeks to set aside the
decision dated March 23, 1990 of the Court of Appeals in CA-G.R. CV No.
05828, penned by the Honorable Justice Abelardo Dayrit with whom
Justices Javellana and Kalalo concurred, which dismissed petitioner's
complaint for damages (p. 48, Rollo).
Petitioner does not dispute the facts of the case, as found by respondent
Court of Appeals. The findings of the respondent Court are thus adopted, to
wit:
From the evidence presented by the plaintiff-appellee [now petitioner
Legaspi Oil Company, Inc.], it appears that defendant-appellant [now private
respondent Bernard Oseraos] acting through his authorized agents, had
several transactions with appellee Legaspi Oil Co. for the sale of copra to the
latter. The price at which appellant sells the copra varies from time to time,
depending on the prevailing market price when the contract is entered into.
One of his authorized agents, Jose Llover, had previous transactions with
appellee for the sale and delivery of copra. The records show that he
concluded a sale for 70 tons of copra at P95.00 per 100 kilos on May 27,
1975 (Exhibit G-5) and another sale for 30 tons of P102.00 per 100 kilos on
September 23, 1975 (Exhibit G-3). Subsequently, on November 6, 1975,
another designated agent signed a contract in behalf of appellant for the
sale of 100 tons of copra at P79.00 per 100 kilos with the delivery terms of
25 days effective December 15, 1975 (Exhibit G-2). At this point, it must be
noted that the price of copra had been fluctuating (going up and down),
indicating its unsteady position in the market.
On February 16, 1976, appellant's agent Jose Llover signed contract No.
3804 for the sale of 100 tons of copra at P82.00 per 100 kilos with delivery
terms of 20 days effective March 8, 1976 (Exhibit G, for the plaintiff). As
compared to appellant's transaction on November 6, 1975, the current price
agreed upon is slightly higher than the last contract. In all these contracts
though, the selling price had always been stated as "total price" rather than
per 100 kilos. However, the parties had understood the same to be per 100
kilos in their previous transactions.
After the period to deliver had lapsed, appellant sold only 46,334 kilos of
copra thus leaving a balance of 53,666 kilos as per running account card
(Exhibit "F"). Accordingly, demands were made upon appellant to deliver
the balance with a final warning embodied in a letter dated October 6, 1976,
that failure to deliver will mean cancellation of the contract, the balance to
be purchased at open market and the price differential to be charged
against appellant. On October 22, 1976, since there was still no compliance,
appellee exercised its option under the contract and purchased the
undelivered balance from the open market at the prevailing price of
P168.00 per 100 kilos, or a price differential of P86.00 per 100 kilos, a net
loss of P46,152.76 chargeable against appellant.
(pp. 43-44, Rollo)
On November 3, 1976, petitioner filed a complaint against private
respondent for breach of a contract and for damages.
After trial, the then Court of First Instance (now Regional Trial Court) of
Albay in Civil Case No. 5529 rendered a decision holding herein private
respondent (then defendant) Oseraos liable for damages in the amount of
P48,152.76, attorney's fees (P2,000), and litigation costs.
Oseraos appealed to respondent Court which thereafter rendered a reversal
decision on March 23, 1990, ordering the dismissal of the complaint.
Hence, the instant petition for review on certiorari.
The sole issued posed by the petition is whether or not private respondent
Oseraos is liable for damages arising from fraud or bad faith in deliberately
breaching the contract of sale entered into by the parties.
After a review of the case, we believe and thus hold, that private
respondent is guilty of fraud in the performance of his obligation under the
sales contract whereunder he bound himself to deliver to petitioner 100
metric tons of copra within twenty (20) days from March 8, 1976. However
within the delivery period, Oseraos delivered only 46,334 kilograms of copra
to petitioner, leaving an undelivered balance of 53,666 kilograms. Petitioner
made repeated demands upon private respondent to comply with his
contractual undertaking to deliver the balance of 53,666 kilograms but
private respondent elected to ignore the same. In a letter dated October 6,
1976, petitioner made a final demand with a warning that, should private
respondent fail to complete delivery of the balance of 53,666 kilograms of
copra, petitioner would purchase the balance at the open market and
charge the price differential to private respondent. Still private respondent
failed to fulfill his contractual obligation to deliver the remaining 53,666
kilograms of copra. On October 22, 1976, since there was still no compliance
by private respondent, petitioner exercised its right under the contract and
purchased 53,666 kilograms of copra, the undelivered balance, at the open
market at the then prevailing price of P168.00 per 100 kilograms, a price
differential of P86.00 per 100 kilograms or a total price differential of
P46,152.76.
Under the foregoing undisputed circumstances, the actuality of private
respondent's fraud cannot be gainsaid. In general, fraud may be defined as
the voluntary execution of a wrongful act, or a wilfull omission, knowing and
intending the effects which naturally and necessarily arise from such act or
omission; the fraud referred to in Article 1170 of the Civil Code of the
Philippines is the deliberate and intentional evasion of the normal
fulfillment of obligation; it is distinguished from negligence by the presence
of deliberate intent, which is lacking in the latter (Tolentino's Civil Code of
the Philippines, Vol. IV, p. 110). The conduct of private respondent clearly
manifests his deliberate fraudulent intent to evade his contractual
obligation for the price of copra had in the meantime more than doubled
from P82.00 to P168 per 100 kilograms. Under Article 1170 of the Civil Code
of the Philippines, those who in the performance of their obligation are
guilty of fraud, negligence, or delay, and those who in any manner
contravene the tenor thereof, are liable for damages. Pursuant to said
article, private respondent is liable for damages.
The next point of inquiry, therefore, is the amount of damages which
private respondent is liable to pay petitioner. As aforementioned, on
account of private respondent's deliberate breach of his contractual
obligation, petitioner was compelled to buy the balance of 53,666 kilos of
copra in the open market at the then prevailing price of P168 per 100
kilograms thereby paying P46,152.76 more than he would have paid had
private respondent completed delivery of the copra as agreed upon. Thus,
private respondent is liable to pay respondent the amount of P46,152.76 as
damages. In case of fraud, bad faith, malice, or wanton attitude, the guilty
party is liable for all damages which may be reasonably attributed to the
non performance of the obligation (Magat vs. Medialdea, 121 SCRA 418
[1983]). Article 1101 of the old Civil Code, later to be reproduced as Article
1170 of our present Civil Code, was the basis of our decision in an old case,
Acme Films, Inc. vs. Theaters Supply Corporation, (63 Phil, 657 [1936]),
wherein we held:
It is not denied that the plaintiff company failed to supply the defendant
with the cinematographic films which were the subject matter of the
contracts entered into on March 20, 1934 (Exhibits 1 and 2), and two films
under the contract of March 24, 1934 (Exhibit 3), one of said films being a
serial entitled "Whispering Shadow". Guillermo Garcia Bosque testified that
because the plaintiff company had failed to supply said films, the
defendants had to resort to the Universal Pictures Corporation and ask for
films to replace those which said plaintiff had failed to supply under the
contract, having had to pay therefor five per cent more than for those films
contracted with said plaintiff Acme Films, Inc., and that the total cost
thereof, including the printing of programs, posters paraded through the
streets with bands of music to announce the showing of the films which the
plaintiff company failed to supply, amount to from P400 to P550. The
plaintiff company did not submit evidence to rebut the testimony of said
witness and the fact that the estimate of the expenses is approximate does
not make said estimate inadmissible. It was incumbent upon the plaintiff
company to submit evidence in rebuttal, or at least ascertain the amount of
the different items in cross-examination. There being no evidence to the
contrary, it is logical to admit that the defendant company spent at least the
sum of P400.
Inasmuch as the plaintiff company had failed to comply with a part of its
booking contract, and as the defendant company had suffered damages as a
result thereof, the former is liable to indemnify the damages caused to the
latter, in accordance with the provisions of Article 1101 of the Civil Code.
(at page 663.)
WHEREFORE, the instant petition is hereby GRANTED. The decision of the
respondent Court of Appeals in CA-G.R. CV No. 05828 is ANNULLED and SET
ASIDE and the decision of the trial court in Civil Case No. 5529 REINSTATED,
with costs against private respondent.
SO ORDERED.
G.R. No. 190601 February 7, 2011
SPOUSES LUIGI M. GUANIO and ANNA HERNANDEZ-GUANIO, Petitioners,
vs.
MAKATI SHANGRI-LA HOTEL and RESORT, INC., also doing business under
the name of SHANGRI-LA HOTEL MANILA, Respondent.
DECISION
CARPIO MORALES, J.:
For their wedding reception on July 28, 2001, spouses Luigi M. Guanio and
Anna Hernandez-Guanio (petitioners) booked at the Shangri-la Hotel Makati
(the hotel).
Prior to the event, Makati Shangri-La Hotel & Resort, Inc. (respondent)
scheduled an initial food tasting. Petitioners claim that they requested the
hotel to prepare for seven persons ─ the two of them, their respective
parents, and the wedding coordinator. At the scheduled food tasting,
however, respondent prepared for only six.
Petitioners initially chose a set menu which included black cod, king prawns
and angel hair pasta with wild mushroom sauce for the main course which
cost ₱1,000.00 per person. They were, however, given an option in which
salmon, instead of king prawns, would be in the menu at ₱950.00 per
person. They in fact partook of the salmon.
Three days before the event, a final food tasting took place. Petitioners aver
that the salmon served was half the size of what they were served during
the initial food tasting; and when queried about it, the hotel quoted a much
higher price (₱1,200.00) for the size that was initially served to them. The
parties eventually agreed on a final price ─ ₱1,150 per person.
A day before the event or on July 27, 2001, the parties finalized and forged
their contract.1
Petitioners claim that during the reception, respondent’s representatives,
Catering Director Bea Marquez and Sales Manager Tessa Alvarez, did not
show up despite their assurance that they would; their guests complained of
the delay in the service of the dinner; certain items listed in the published
menu were unavailable; the hotel’s waiters were rude and unapologetic
when confronted about the delay; and despite Alvarez’s promise that there
would be no charge for the extension of the reception beyond 12:00
midnight, they were billed and paid ₱8,000 per hour for the three-hour
extension of the event up to 4:00 A.M. the next day.
Petitioners further claim that they brought wine and liquor in accordance
with their open bar arrangement, but these were not served to the guests
who were forced to pay for their drinks.
Petitioners thus sent a letter-complaint to the Makati Shangri-la Hotel and
Resort, Inc. (respondent) and received an apologetic reply from Krister
Svensson, the hotel’s Executive Assistant Manager in charge of Food and
Beverage. They nevertheless filed a complaint for breach of contract and
damages before the Regional Trial Court (RTC) of Makati City.
In its Answer, respondent claimed that petitioners requested a combination
of king prawns and salmon, hence, the price was increased to ₱1,200.00 per
person, but discounted at ₱1,150.00; that contrary to petitioners’ claim,
Marquez and Alvarez were present during the event, albeit they were not
permanently stationed thereat as there were three other hotel functions;
that while there was a delay in the service of the meals, the same was
occasioned by the sudden increase of guests to 470 from the guaranteed
expected minimum number of guests of 350 to a maximum of 380, as stated
in the Banquet Event Order (BEO);2 and that Isaac Albacea, Banquet Service
Director, in fact relayed the delay in the service of the meals to petitioner
Luigi’s father, Gil Guanio.
Respecting the belated service of meals to some guests, respondent
attributed it to the insistence of petitioners’ wedding coordinator that
certain guests be served first.
On Svensson’s letter, respondent, denying it as an admission of liability,
claimed that it was meant to maintain goodwill to its customers.
By Decision of August 17, 2006, Branch 148 of the Makati RTC rendered
judgment in favor of petitioners, disposing as follows:
WHEREFORE, premises considered, judgment is hereby rendered in favor of
the plaintiffs and against the defendant ordering the defendants to pay the
plaintiff the following:
1) The amount of ₱350,000.00 by way of actual damages;
2) The amount of ₱250,000.00 for and as moral damages;
3) The amount of ₱100,000.00 as exemplary damages;
4) The amount of ₱100,000.00 for and as attorney’s fees.
With costs against the defendant.
SO ORDERED.3
In finding for petitioners, the trial court relied heavily on the letter of
Svensson which is partly quoted below:
Upon receiving your comments on our service rendered during your
reception here with us, we are in fact, very distressed. Right from minor
issues pappadums served in the soup instead of the creutons, lack of valet
parkers, hard rolls being too hard till a major one – slow service, rude and
arrogant waiters, we have disappointed you in all means.
Indeed, we feel as strongly as you do that the services you received were
unacceptable and definitely not up to our standards. We understand that it
is our job to provide excellent service and in this instance, we have fallen
short of your expectations. We ask you please to accept our profound
apologies for causing such discomfort and annoyance. 4 (underscoring
supplied)
The trial court observed that from "the tenor of the letter . . . the
defendant[-herein respondent] admits that the services the plaintiff[-herein
petitioners] received were unacceptable and definitely not up to their
standards."5
On appeal, the Court of Appeals, by Decision of July 27, 2009,6 reversed the
trial court’s decision, it holding that the proximate cause of petitioners’
injury was an unexpected increase in their guests:
x x x Hence, the alleged damage or injury brought about by the confusion,
inconvenience and disarray during the wedding reception may not be
attributed to defendant-appellant Shangri-la.
We find that the said proximate cause, which is entirely attributable to
plaintiffs-appellants, set the chain of events which resulted in the alleged
inconveniences, to the plaintiffs-appellants. Given the circumstances that
obtained, only the Sps. Guanio may bear whatever consequential damages
that they may have allegedly suffered.7 (underscoring supplied)
Petitioners’ motion for reconsideration having been denied by Resolution of
November 19, 2009, the present petition for review was filed.
The Court finds that since petitioners’ complaint arose from a contract, the
doctrine of proximate cause finds no application to it:
The doctrine of proximate cause is applicable only in actions for quasi-
delicts, not in actions involving breach of contract. x x x The doctrine is a
device for imputing liability to a person where there is no relation between
him and another party. In such a case, the obligation is created by law itself.
But, where there is a pre-existing contractual relation between the parties,
it is the parties themselves who create the obligation, and the function of
the law is merely to regulate the relation thus created.8 (emphasis and
underscoring supplied)
What applies in the present case is Article 1170 of the Civil Code which
reads:
Art. 1170. Those who in the performance of their obligations are guilty of
fraud, negligence or delay, and those who in any manner contravene the
tenor thereof, are liable for damages.
RCPI v. Verchez, et al. 9 enlightens:
In culpa contractual x x x the mere proof of the existence of the contract
and the failure of its compliance justify, prima facie, a corresponding right of
relief. The law, recognizing the obligatory force of contracts, will not permit
a party to be set free from liability for any kind of misperformance of the
contractual undertaking or a contravention of the tenor thereof. A breach
upon the contract confers upon the injured party a valid cause for
recovering that which may have been lost or suffered. The remedy serves to
preserve the interests of the promissee that may include his "expectation
interest," which is his interest in having the benefit of his bargain by being
put in as good a position as he would have been in had the contract been
performed, or his "reliance interest," which is his interest in being
reimbursed for loss caused by reliance on the contract by being put in as
good a position as he would have been in had the contract not been made;
or his "restitution interest," which is his interest in having restored to him
any benefit that he has conferred on the other party. Indeed, agreements
can accomplish little, either for their makers or for society, unless they are
made the basis for action. The effect of every infraction is to create a new
duty, that is, to make RECOMPENSE to the one who has been injured by the
failure of another to observe his contractual obligation unless he can show
extenuating circumstances, like proof of his exercise of due diligence x x x or
of the attendance of fortuitous event, to excuse him from his ensuing
liability. (emphasis and underscoring in the original; capitalization supplied)
The pertinent provisions of the Banquet and Meeting Services Contract
between the parties read:
4.3 The ENGAGER shall be billed in accordance with the prescribed rate for
the minimum guaranteed number of persons contracted for, regardless of
under attendance or non-appearance of the expected number of guests,
except where the ENGAGER cancels the Function in accordance with its
Letter of Confirmation with the HOTEL. Should the attendance exceed the
minimum guaranteed attendance, the ENGAGER shall also be billed at the
actual rate per cover in excess of the minimum guaranteed attendance.
xxxx
4.5. The ENGAGER must inform the HOTEL at least forty eight (48) hours
before the scheduled date and time of the Function of any change in the
minimum guaranteed covers. In the absence of such notice, paragraph 4.3
shall apply in the event of under attendance. In case the actual number of
attendees exceed the minimum guaranteed number
by ten percent (10%), the HOTEL shall not in any way be held liable for any
damage or inconvenience which may be caused thereby. The ENGAGER shall
also undertake to advise the guests of the situation and take positive steps
to remedy the same.10 (emphasis, italics and underscoring supplied)
Breach of contract is defined as the failure without legal reason to comply
with the terms of a contract. It is also defined as the [f]ailure, without legal
excuse, to perform any promise which forms the whole or part of the
contract.11
The appellate court, and even the trial court, observed that petitioners were
remiss in their obligation to inform respondent of the change in the
expected number of guests. The observation is reflected in the records of
the case. Petitioners’ failure to discharge such obligation thus excused, as
the above-quoted paragraph 4.5 of the parties’ contract provide,
respondent from liability for "any damage or inconvenience" occasioned
thereby.
As for petitioners’ claim that respondent departed from its verbal
agreement with petitioners, the same fails, given that the written contract
which the parties entered into the day before the event, being the law
between them.
Respecting the letter of Svensson on which the trial court heavily relied as
admission of respondent’s liability but which the appellate court brushed
aside, the Court finds the appellate court’s stance in order. It is not
uncommon in the hotel industry to receive comments, criticisms or
feedback on the service it delivers. It is also customary for hotel
management to try to smooth ruffled feathers to preserve goodwill among
its clientele.
Kalalo v. Luz holds
Statements which are not estoppels nor judicial admissions have no quality
of conclusiveness, and an opponent whose admissions have been offered
against him may offer any evidence which serves as an explanation for his
former assertion of what he now denies as a fact.
Respondent’s Catering Director, Bea Marquez, explained the hotel’s
procedure on receiving and processing complaints, viz:
ATTY. CALMA:
Q: You mentioned that the letter indicates an acknowledgement of the
concern and that there was-the first letter there was an acknowledgment of
the concern and an apology, not necessarily indicating that such or
admitting fault?
A: Yes.
Q: Is this the letter that you are referring to?
If I may, Your Honor, that was the letter dated August 4, 2001, previously
marked as plaintiff’s exhibits, Your Honor. What is the procedure of the
hotel with respect to customer concern?
A: Upon receipt of the concern from the guest or client, we acknowledge
receipt of such concern, and as part of procedure in service industry
particularly Makati Shangri-la we apologize for whatever inconvenience but
at the same time saying, that of course, we would go through certain
investigation and get back to them for the feedback with whatever concern
they may have.
Q: Your Honor, I just like at this point mark the exhibits, Your Honor, the
letter dated August 4, 2001 identified by the witness, Your Honor, to be
marked as Exhibit 14 and the signature of Mr. Krister Svensson be marked as
Exhibit 14-A.13
xxxx
Q: In your opinion, you just mentioned that there is a procedure that the
hotel follows with respect to the complaint, in your opinion was this
procedure followed in this particular concern?
A: Yes, ma’am.
Q: What makes you say that this procedure was followed?
A: As I mentioned earlier, we proved that we did acknowledge the concern
of the client in this case and we did emphatize from the client and
apologized, and at the same time got back to them in whatever
investigation we have.
Q: You said that you apologized, what did you apologize for?
A: Well, first of all it is a standard that we apologize, right? Being in the
service industry, it is a practice that we apologize if there is any
inconvenience, so the purpose for apologizing is mainly to show empathy
and to ensure the client that we are hearing them out and that we will do a
better investigation and it is not in any way that we are admitting any
fault.14 (underscoring supplied)
To the Court, the foregoing explanation of the hotel’s Banquet Director
overcomes any presumption of admission of breach which Svensson’s letter
might have conveyed.
The exculpatory clause notwithstanding, the Court notes that respondent
could have managed the "situation" better, it being held in high esteem in
the hotel and service industry. Given respondent’s vast experience, it is safe
to presume that this is not its first encounter with booked events exceeding
the guaranteed cover. It is not audacious to expect that certain measures
have been placed in case this predicament crops up. That regardless of
these measures, respondent still received complaints as in the present case,
does not amuse.
Respondent admitted that three hotel functions coincided with petitioners’
reception. To the Court, the delay in service might have been avoided or
minimized if respondent exercised prescience in scheduling events. No less
than quality service should be delivered especially in events which
possibility of repetition is close to nil. Petitioners are not expected to get
married twice in their lifetimes.
In the present petition, under considerations of equity, the Court deems it
just to award the amount of ₱50,000.00 by way of nominal damages to
petitioners, for the discomfiture that they were subjected to during to the
event.15 The Court recognizes that every person is entitled to respect of his
dignity, personality, privacy and peace of mind.16 Respondent’s lack of
prudence is an affront to this right.
WHEREFORE, the Court of Appeals Decision dated July 28, 2009 is
PARTIALLY REVERSED. Respondent is, in light of the foregoing discussion,
ORDERED to pay the amount of ₱50,000.00 to petitioners by way of nominal
damages.
SO ORDERED.