[G.R. No. 4895. June 15, 1909.] "1.

 That in pursuance of the provisions of Act No. 652 of the Philippine

Commission, amendatory of Act No. 175, as amended from time to time, and of
Executive Order No. 9 of March 25, 1903, as amended by Executive Order No. 27,
THE GOVERNMENT OF THE PHILIPPINE ISLANDS, plaintiff-appellant, vs. W. O. issued May 16, 1906, in conformity with the requirements of the aforesaid Act, the
BINGHAM, C. D. SQUIRES, and ALBERT BRYAN,  defendants-appellees. chief of police of the city of Manila did on the 22d day of August, 1906, issue to W.
O. Bingham a license to purchase and keep the following firearm, viz., one
revolver, Smith & Wesson, caliber .38, No. 154990, and one hundred rounds of
Attorney-General Araneta,  for appellant. ammunition.
W. H. Bishop,  for appellees. "2. That said W. O. Bingham, in accordance with the requirements of the
aforesaid Executive Order No. 9, did, on August 21, 1906, execute this bond or
written obligation with C. D. Squires and R. W. Squires as his sureties on said
SYLLABUS bond, whereby they acknowledged themselves held and firmly bound unto the
plaintiff in the sum of $200, United States currency, to be paid to said plaintiff; the
said bond was and is subject to the certain condition thereunder written in the
1. Firearms; Bond; Penalty; Enforcement After Impossibility of Performance Without following words and figures, viz:
Negligence. — On the 22d day of August, 1906, the said Bingham, with the other two defendants "'The condition of this obligation is such that, whereas, the chief of police
as sureties, obtained permission from the authorities of the Insular Government to purchase and has on this 22d day of August, 1906, issued to the above-bounden W. O. Bingham
keep one revolver and one hundred rounds of ammunition, with the condition that he would deliver a license to purchase and keep the following firearm, viz., one revolver, Smith &
the same to the Government of the Philippine Islands on demand. Prior to the time when the Wesson, caliber .38, No. 154990, and 100 rounds of ammunition; and the above-
demand was made for the return of the said revolver and ammunition, Bingham was engaged in bounden W. O. Bingham has covenanted and agreed, and does hereby covenant
the business of pearl fishing and while thus engaged a severe storm overtook him, and his boat and agree, that he will safely keep the said arms and each of them, and will deliver
was sunk in eighty fathoms of water, through no fault of his or of his crew, and the said revolver the same to the Government of the Philippine Islands on demand.'
and ammunition being on board, went down and were lost. The violence of the storm was such that
neither the said Bingham nor any member of the crew had time to save the said revolver and "The said bond is as follows:
ammunition and it was impossible to recover the same on account of the depth of the sea wherein "'Know all men by these presents, that we, W. O. Bingham, residing in the
they were lost: Held, That an obligation, consisting in the delivery of a specified thing, shall be town of Manila, Province of Manila, Philippine Islands, as principal, and C. D.
extinguished when the said thing shall be lost or destroyed without the fault of the obligor and Squires, residing in the town of Manila, Province of Manila, Philippine Islands, and
before he shall be in default. No one shall be liable for events (obligations) which could not be R. W. Squires, residing in the town of Manila, Province of Manila, Philippine
foreseen, or which being foreseen were inevitable, with the exception of cases expressly Islands, as sureties, are held and firmly bound unto the Government of the
mentioned in the law, or in those in which the obligation so declares. In the absence of stipulations Philippine Islands in the penal sum of two hundred ($200) dollars (two hundred
to contrary, impossibility of performance, without the negligence of the parties, prevents the dollars for each firearm), United States currency, to the payment of which sum well
enforcement of bond or contract. and truly to be made we bind ourselves, our heirs, executors, and administrators,
jointly and severally, firmly by these presents.
"'The condition of this obligation is such that, whereas, the chief of police
DECISION has on this 22d day of August, 1906, issued to the above-bounden W. O. Bingham,
a license to purchase and keep the following firearm; viz: One revolver, Smith and
Wesson, caliber 38, No. 154990, and 100 rounds of ammunition, and the above-
bounden W. O. Bingham has covenanted and agreed and does hereby covenant
JOHNSON,  J p: and agree that he will safely keep the said arms and each of them, and will deliver
the same to the Government of the Philippine Islands on demand.
On the second day of August, 1907, the plaintiff commenced an action in the Court of First "'Now, therefore, if the above-bounden W. O. Bingham shall and will in all
Instance of the city of Manila to recover of the defendants the sum of 200 dollars, United States respects duly and fully observe and perform all and singular the aforesaid
currency, basing said action upon a failure on the part of the defendants to perform the conditions covenants, conditions, and agreements, by the said W. O. Bingham to be observed
of a certain bond. On the 25th day of February, 1908, the defendants filed a general and special and performed, according to the true intent and meaning thereof, then the above
answer to said complaint. On the second day of March, 1908, the attorneys for the respective obligation shall be void and of no effect; otherwise to remain in full force and virtue.'
parties entered into an agreement in words and figures as follows: "3. That on the 18th day of April, 1907, the plaintiff demanded of the said
"For the trial and determination of the issues joined in this cause and now W. O. Bingham the delivery of the aforesaid revolver and ammunition mentioned
submitted to the court, and for the purpose of such trial, the said parties, by their and described in said bond, but notwithstanding said demand, the said W. O.
respective attorneys, agree that the facts are as follows:
 Bingham failed to deliver to the plaintiff the aforesaid revolver and ammunition and "The representative of the plaintiff, in view of the above facts, asks that
has not delivered same. judgment be entered as against the defendants sentencing them to pay the
aforesaid $200, United States currency, with interest thereon from the 18th of April,
"4. That on the 3d day of January, 1907, prior to the aforesaid demand
1907, and costs, for the reason that the plaintiff had been prejudiced to the said
may upon the said W. O. Bingham for the delivery of said revolver and ammunition
amount on account of the non-fulfillment of the said bond, and the defendants in
or, in default thereof, for compliance with the conditions of said bond, the said W.
turn claim that they be acquitted and exempted from such payment.
O. Bingham, with said revolver and ammunition in his possession, was engaged in
the business of pearl fishing, and with a crew of eight men was on board his  
pearling schooner known as the Tamarao  about 2 1/2 miles south of the Island of
"It is of course evident that the loss of the said revolver and ammunition,
Miripipi; that while thus engaged at said time and place there arose a severe storm;
and the material impossibility on the part of the defendant, Bingham, to deliver said
that said schooner was sunk in about 80 fathoms of water through no fault of the
article to the plaintiff on demand was due to causes which were independent of his
said W. O. Bingham or his crew, and that the said revolver and ammunition, being
will; to an event which he could not have foreseen, or which, even if he had
then and there on board said schooner, went down with it and were lost.
foreseen it, was unavoidable; to an event known under the Spanish law by the
"5. That the violence of the storm was such that neither the said W. O. name of caso fortuito, and designated in American law as 'an act of God.' arising
Bingham nor any member of the crew had time to save the said revolver and out of a natural cause, and not from man's will.
ammunition, and that it is impossible to recover same on account of the depth of
"As a matter of fact, as maintained by the representative of the plaintiff, it
the sea wherein they were lost as aforesaid.
is a well-established rule in American law, that where a person enters into or
"And upon the foregoing facts this case is submitted to the court upon the contracts an obligation by means of an express contract he can not be permitted to
issues joined herein, with leave to either party to except to any rulings of the court evade its compliance on the plea that such a contract is impracticable, or that it can
upon propositions of law that may be moved by either as applicable to this case not be carried out owing to an act of God, or to a, caso fortuito or  force majeure. It
and to take a bill of exceptions in respect thereof. — (Signed.) Gregorio Araneta, differs from where the obligation is imposed by the law, in which case the person
for plaintiff. — W. H. Bishop, for defendant." bound may be relieved from complying by reason of facts or acts of such nature.
This doctrine has been established by the courts of the United States in several
After considering the agreed facts, the lower court upon the 30th day of June, 1908,
decisions cited by the said representative.
rendered a judgment in favor of the defendants and dismissed said cause, without making any
findings as to costs. The judgment of the lower court is so full in its discussion of the facts and the "However, this rule is not so absolute as to lack exceptions even within the
law applicable thereto that we hereby make it a part of this decision. The decision of the lower court American law, and its application must be adjusted to the principles of justice and
was, in part, as follows: equity, and depends upon the character, the nature, and sometimes upon the very
conditions in the contract.
"Therefore, from the facts agreed upon between the parties to this suit it
appears: "'Executory agreements ordinarily are made on the implied condition that
the performance of the agreement shall not be rendered impossible by the
"(a) That W. O. Bingham bound himself to the Government of the
intervention of some accidental and uncontrollable superior agency. In the civil law
Philippine Islands to keep and care for a revolver and ammunition, for the
this agency is termed vis major; in the common law, act of God; and means an
possession of which he was granted a license by the chief of police of this city on
inevitable accident produced by an irresistible physical cause which human skill
the 22d of August, 1906, in accordance with the legal provisions cited, and to
could not have prevented or human judgment foreseen. The intervention of such an
surrender the said revolver and ammunition whenever so required by the
agency may excuse performance.' (Am. & Eng. Ency. of Law, 2d ed., vol. 1 (7), p.
Government.
147.)
"(b) That said obligation was secured by the other two defendants jointly
"'The act of God which exempts one from an obligation in a contract is that
and severally with W. O. Bingham, the principal, in the sum of $200, United States
which renders its performance impossible.' (Dewey vs. Alpena School Dist., 43
currency, payable to the plaintiff in case the said principal did not keep and care for
Mich., 480, 38 Am. Rep., 206.)
the said weapon and ammunition, or failed to surrender the same when called upon
by the Government of these Islands. "'And akin to this is the case of contracts relating to some specific article
which the act of God destroys. Here there is an implied condition in the promise
"(c) That the said revolver and ammunition was not surrendered, nor could
that the preventing contingency shall not arise.' (Am. & Eng. Ency. of Law, 2d ed.,
the same be surrendered by the defendant W. O. Bingham when he was called
vol. 7, p. 148.)
upon, for the reason that, without any fault of the defendant, they were lost during a
strong gale which caused the foundering of the sloop Tamarao, on which the "Furthermore, 'the rule that the intervention of the act of God will excuse
defendant, together with several members of the crew, was fishing pearls from the performance does not apply where the essential purpose of the contract is capable
sea, toward the south of Miripipi Island; the revolver and ammunition went to the of substantial accomplishment, although a literal performance has become
bottom of the sea together with the vessel, and it was impossible to recover the physically impossible.' (Ibid.)
same.
 "In the present case the purpose or essential object of contract entered "The said rule in the American law is more clearly and precisely contained
into between the government of the Philippine Islands and the defendant, W. O. in the provisions of article 1182 of the Civil Code in force, which reads:
Bingham, was that the latter should care for and keep said weapon and
"'An obligation, consisting in the delivery of a specified thing, shall be
ammunition, and deliver the same to the Government when the latter should
extinguished when said thing should be lost or destroyed without fault of the debtor
demand it. This purpose, this end, can not be substantially accomplished because
and before he should be in default.'
the said articles have disappeared and can not be recovered, as the parties have
agreed to, and therefore, said rule may be applied to the said contract, or what is "'It is understood,' so reads article 1122 of the same code, 'that the thing is
the same thing, that fortuitous event, that act of God excuses the defendant from lost when it perishes, becomes unsalable, or disappears in such a manner that it
the performance of said contract, and that the purpose or the essential object of the existence is unknown, or it is not possible to recover it.'
contract was what has already been stated is evident because the intention of the
"As the revolver and cartridges that were in the possession of W. O.
Government, upon imposing said obligation on the defendant, and of the latter in
Bingham sank with the sloop Tamarao, they undoubtedly became unsalable,
accepting it, was certainly not that said defendant and his bondsmen should pay
disappearing in such a manner that it is not known where they are, that is, their
the $200, United States currency, amount of the bond, but to prevent said revolver
existence; they were lost, and it is now impossible to recover the same, as has
and ammunition passing into the possession of another person, or falling into the
been agreed to between the parties to this suit. Said loss occurred without the fault
hands of evil doers, lawbreakers, or of persons who might make unlawful use of the
of said defendant and before he was in default, because the Government did not
same.
call upon him to surrender the weapon and cartridges before the shipwreck took
"It is also an established rule in American law, that: 'When performance of place, but several months after the occurrence.
a contract is dependent upon the continued existence of a given person or thing,
"It is therefore unquestionable that the provisions of the Civil Code in
and such continued existence was assumed as the basis of the agreement, the
regard to this matter are also in accordance with the American law. Both are based
death of the person or the destruction of the thing puts an end to the obligation.' (7
on the same thing, which is the material impossibility to comply with or substantially
Am. & Eng. Ency. of Law, 2d ed., p. 116.) And that 'where a contract is entered
perform an obligation where the subject-matter does not exist. W. O. Bingham is
into, of a continuing character, or to be performed at a future time, dependent upon
not bound to comply with the said obligation for the reason that, according to law, it
the continued existence of a particular person or thing, or the continuing ability of
has become extinguished.
the obligor to perform, subsequent death, destruction or disability will excuse the
obligor from compliance with the terms of the contract.' (1 Am. & Eng. Ency. of Law, "The bond obligation contracted for by the other two defendants jointly and
2d ed., pp. 590, 591, and decisions cited therein.) severally with the principal obligor, W. O. Bingham, that it, the defendant, is
accessory to the obligation contracted by the latter to deliver to the Government the
"And the reason of said rule is, that 'the liability of an obligor in a contract
revolver and cartridges whenever so required, and consequently it became
having reference to the continued existence of a particular person or thing does not
extinguished at the same time as the principal obligation on account of the loss of
in strictness constitute an exception to the general rule as to the liability of obligors
said articles. (Art. 1847, Civil Code.)
in express contracts, but results from a reasonable construction of the contract with
reference to its subject-matter.' (Am. & Eng. Ency. of Law, ibid., 592.) "That obligation was also an accessory one which was established or
determined by the penalty clause to pay the plaintiff $200, United States currency,
"In the case at bar, the obligation contracted by the defendant, W. O.
in case the defendant, W. O. Bingham, should fail to comply with the principal
Bingham, and secured by the other two defendants, his bondsmen, was to care for
obligation, that is, to surrender said weapon and ammunition whenever required to
and keep the revolver and ammunition, the use and possession of which had been
do so because the said obligation was secured by means of said penalty clause;
granted to the former, and to surrender the same revolver and ammunition to the
the defendants can not be compelled to suffer said penalty, to wit, to pay the said
Government whenever so demanded; so that the said contract was based on the
sum in lieu of delivering the revolver and cartridges mentioned above, for the
assumed existence of a determined thing, of the revolver and ammunition specified
reason that it is not an alternative obligation, since the defendant, W. O. Bingham,
in the respective license, and the compliance of said contract was fixed for a future
could not choose between delivering the weapon and ammunition when o required,
time, that is to say, whenever the Government should demand the surrender of the
or paying said amount; he was expressly obliged to keep said weapon and
said weapon and ammunition, on the basis, of course, that such articles were in
ammunition, and surrender them to the Government whenever so demanded in
existence.
view of the special purposes of the Government in granting such licenses, which
"Therefore, inasmuch as the said revolver and cartridges were lost, or purposes are no other than, as it has already been stated, to prevent firearms in the
rather, buried at the bottom of the sea beyond the possibility of finding or hands of private individuals or of municipalities from falling into the possession of
recovering them, which is equivalent to their destruction, there can be no doubt evil doers and enemies to law and order, and to be in a position at any given
whatever that, in applying the provisions of said rule of the American law, the moment, to gather in said weapons in order to attain said purpose; and this could
defendant, W. O. Bingham, and consequently the other defendants, his bondsmen, not be effected if the possessor or possessors of the weapons could, at their
have been excused from the performance of said obligation for the reasons which choice, fail to deliver them and pay the penalty to the Government.
will hereafter be states.
"Finally, the case of the The Government of the Philippine Islands vs.
Graciano Punsalan et. al., which was decided by the Supreme Court of these
 Islands on the 26th of February, 1907, cited by the representative of the plaintiff in law (Act No. 652, amending Act No. 175) should be solely construed under American precedents
order to sustain the theory that, as the defendants had bound themselves any more than any other law enacted by the legislative department of the Philippine Government.
unconditionally in the contract, they can not be excused from complying therewith, But whether this case is decided by applying American jurisprudence or the laws of the Philippine
and consequently from the payment of the bond as indemnity for the damages Islands, we are of the opinion that the result will be the same. Justice is about the same under
suffered for the loss of the revolver and cartridges abovementioned, can not serve whatever law. Civilized nations everywhere have adopted about the same rules of justice and law
as a precedent for the decision of the question at bar, because in said case the loss when they relate to fundamental principles affecting the rights of men. The rule of the Shylock-
of the rifles was partly due to the negligence of the members of the municipality pound-of-flesh is no longer in force where impossibility has prevented the performance of an
who had charge of said weapons; said weapons passed into the possession of the obligation between men, which impossibility neither of the parties could reasonably anticipate nor
bandits who stole them; from this it could not be held that they were lost in the legal prevent. We are of the opinion, and so hold, that the lower court committed no error in applying the
sense of the word for the very reason that it was not impossible to recover them, jurisprudence which he cites in his decision. This we believe answers both the first and the second
and because their whereabouts could be determined in some manner, while in the assignments of error
present case the revolver and cartridges that were in the hands of the defendant,
The third and fourth assignments of error may be considered together. The obligation
W. O. Bingham, were totally lost, disappeared and became unsalable, not through
which the defendants in their bond assumed was that the said revolver and ammunition should be
his fault but by ac act which was independent of his will which he could not foresee
returned to the plaintiff upon demand of the plaintiff or of its representatives. No demand was made
or avoid; by a fortuitous event or by an act of God; and as it is no longer possible to
until after the said revolver and ammunition were lost in the manner described in paragraph 4 of the
recover the said articles, the essential purpose of the contract, entered into
stipulated facts. Said paragraph 4 shows that the revolver and ammunition were lost in about 80
between him and the Government with respect to the said revolver and cartridges,
fathoms of water, through no fault of the defendants.
ca not be substantially complied with.
Article 1182 of the Civil Code provides that —
"For the reasons above set forth the court absolves the defendants of the
complaint without any special ruling as to the costs. So ordered." "An obligation, consisting in the delivery of a specified thing, shall be
extinguished when said thing should be lost or destroyed without fault of the debtor
From this decision the plaintiff appealed, and made the following assignments of error:
and before he should be in default."
"1. The court erred in not determining the liability of defendants and
It would seem that this article was a complete answer to the contention of the plaintiff.
appellees according to American legal precedents.
(See also decision of the supreme court of Spain of the 18th of February, 1897.) Under article 1183
"2. The court erred in determining the liability of defendants and appellees of said code, the loss shall be presumed to be by the negligence of the person upon whom the
under their contract or bond according to the Spanish Civil Code in force in the obligation rests to return it unless there is proof to the contrary. In the present case it is expressly
Philippine Islands. admitted that there was no fault on the part of the defendants.
"3. The court erred in holding and deciding that the obligation of Article 1105 of said Civil Code provides that —
defendants and appellees under their contract or bond was extinguished under the
"No one shall be liable for events (speaking of obligations) which could not
provisions of the Spanish Civil code by reason of the fact that the loss of said
be foreseen, or which having been foreseen were inevitable, with the exception of
firearms and ammunition resulted from fortuitous events.
the cases expressly mentioned in the law or those in which the obligation so
"4. The court erred in holding and deciding that, even under American declares."
legal precedents, defendants and appellees would be released from the obligation
In the present case there were no exceptions expressly mentioned in the law; neither were
of their bond by reason of the fact that the firearms and ammunition were lost by
they any mentioned in the bond. The loss in the present case was certainly one which, even though
act of God.
it might have been foreseen, was inevitable under the circumstances.
"5. The court erred in holding and deciding that the essential purpose of
There is no doubt but that the general rule is that one who obligates himself to do or not to
the contract or bond of defendants and appellees was to prevent the firearms and
do a particular thing is obliged to comply with his obligation unless he is relieved by some express
ammunition from falling into the hands of wrongdoers, violator of the law, or
exception or stipulation. But this general rule has so many exceptions that in fact it has but little
persons who would use them for some illegal purpose.
application. The general exception is the one commonly quoted to wit, the act of God or the public
"6. The court erred in rendering judgment for defendants and appellees enemy. To this, or to these, may be added many others.
against plaintiff and appellant.
In the case of Clifford vs. Watts (Law Reps., 5 Com. Pleas, 577), Watts undertook to dig
"7. The court erred in denying the motion of plaintiff and appellant to set from the premises of the plaintiff, and obligated himself under a bond to do so, not less than 1,000
aside the said judgment and award it a new trial on the ground that said judgment tons of potter's clay annually. There was a default on the part of Watts, and Clifford brought an
was contrary to law and that the evidence was not sufficient to sustain the action against him. Watts pleaded that there never had been so much as 1,000 tons of clay under
decision." the land. The court held that the plea furnished a good answer to the plaintiff's claims. Brett, J., who
wrote the opinion, said: "both parties might well have supposed that there was a clay equal to the
With reference to the first above assignment of error, it may be noted that the lower court
amount which the defendant had obligated to dig under the land." It was absolutely impossible for
cited both American and Philippine authorities and by following the doctrine of one or of the other,
the defendant to comply with his obligation, and the mere fact that he was mistaken in the amount
he would have reached the same conclusions. We are at a loss to understand why this particular
of clay which might be dug and the mere fact that he did not make an exception in his contract, With reference to the fifth above assignment of error, we find that the court committed no
were not sufficient to render him liable. error in his statement as to the purpose of the bond in question. That was a mere opinion, and in
our judgment did not influence the conclusions of the court.
Another illustration may be given. Parties may bind themselves in a lawful contract without
making any exceptions whatever and be prevented from the performance of the contract by a legal  
impossibility arising from a change in the law. An impossibility arising in this manner will certainly
We deem it unnecessary to discuss the assignments of error numbered six and seven.
relieve the parties from their obligations. To illustrate by a specific example: A enters into a contract
with B, obligating himself under a bond to construct a dwelling house or other building upon a In the foregoing conclusions we have not overlooked the decisions of this court in the case
particular tract of land. Before the construction of the house or building is completed by an act of of The Government of the Philippine Islands vs. Punzalan et al. (7 Phil. Rep., 546), and the case of
the legislative department of the government, acting under the law, the land is appropriated under the Government of the Philippine Islands vs. Amechazurra et al. (10 Phil. rep., 637). Neither is it
the power of eminent domain for some public purpose thus preventing the contractor from intended herein to overrule those decisions. There is no reason why those decisions should not be
complying with his obligation. The plaintiff sues him for a failure to comply with the conditions of his allowed when the facts are as the facts were in those cases. In the present case it was admitted by
bond. Will it be contended by any court that, notwithstanding the fact that he had been legally both parties that the impossibility on the part of the defendant to comply with the terms of his bond
prevented from carrying out his contract, he is still liable? Such a conclusion is nauseating to the was caused through no fault of the said defendant. In the case of Punzalan et al., this court said:
very idea of justice.
"There is evidence of record tending to show that there was more or less
A case in point may be found in Baily vs. De Crespigny (Law Reps., 4 Q. B., 180); Cordes negligence in the performance of their duties as municipal officials on the part of
vs. Miller (29 Mich., 581); People vs. Globe Mutual Life Ins. Co. (91 N. Y., 174); Jamison vs. some, if not all, of the defendants, which may have contributed to the loss of these
Indiana Natural Gas Co. (128 Ind., 555). arms."
There are also other exceptions to the general rule above stated, to-wit: where the In the case of Amechazurra there is not reference in detail to conditions under which the
existence of a specific thing is essential to the performance of the contract. If the specific thing firearms in question were lost, but inasmuch as the court followed the doctrine in the cause of
essential to the performance of the contract is destroyed from no fault of either of the parties, such Punzalan, it is to be presumed that the facts were the same substantially.
destruction will operated as a discharge of the parties from their obligation. To illustrate: A rents of
For all of the foregoing reasons we are of the opinion, and so hold, that the judgment of
B a hall for the purpose of giving a public concert on a particular day. B obligates himself to furnish
the court below should be affirmed, with costs.
the hall under a penalty. Before the day for the concern the hall is destroyed by fire, or storm, or
earthquake, for which destruction B was in noway responsible. This illustration covers the facts in ||| (Government of the Philippine Islands v. Bingham, G.R. No. 4895, [June 15, 1909], 13 PHIL 558-
the present case. Certainly under this contract A could not recover any damages from B for his 574)
failure to furnish the hall. (Dexter vs. Norton, 47 N. Y., 62; Stewart vs. Stone, 127 N. Y., 500;
Walker vs. Tucker, 70 Ill., 527; "The Tornado," 108 U. S., 342; Cleary vs. Sohier, 120 Mass., 210;
Butterfield vs. Byron, 153 Mass., 517; supreme court of Spain, July 2, 1899; supreme court of
Spain, July 8, 1903; Taylor vs. Caldwell, 3 B. & S. (Eng. Reps.), 826; Appleby vs. Meyers, Law
Reps., 2 Com. Pleas, 651.)
A further exception to the general rule is in contracts which have for their base the
rendering of personal service. Suppose a man should obligate himself in a contract to render some
particular personal service and give a bond for the performance of such service, but, before the
time arrives for the performance of the obligation, the performer dies. Can the person to whom the
obligation runs enforce the bond? This question was presented in the case of Robinson vs.
Davison (Law Reps., 6 Excheq., 269) and Bramwell, J., in answering the question said (p. 277):
"This is a contract to perform a service which no deputy could perform and
which, in case of death, could not be performed by the executors of the deceased,
and I am of opinion that by virtue of the terms of the original bargain incapacity of
body or mind in the performer, without default on his part, is an excuse for
nonperformance. The contract must in my judgment be taken to have been
conditional and not absolute."
So also may an unforeseen peril, as a general conflagration or inundation, or the
prevalence of a contagious disease, and many other things which can not be avoided, work a
discharge and a release from an absolute obligation fixed in a contract. (Lakeman vs. Pollard, 43
Me., 463.)
[G.R. No. L-4203. March 27, 1908.] The enforcement of the said bond up to the sum of P300.42, to the payment of which with
legal interest thereon Lanzon has been sentenced, is what constitutes the first point of the
complaint in this action.
MANUEL CRAME SY PANCO, plaintiff-appellee, vs. RICARDO GONZAGA, ET
AL.,  defendants-appellants. The defendants alleged and offered evidence to show that the three carabaos above
mentioned had died of a disease prevailing in the province. Two witnesses have testified without
contradictions as to the truth of this fact. The court, however, says in its judgment, "that it cannot
consider as proven that the carabaos have all died." It is apparently the opinion of the court that
Matias Hilado for appellants.
one or more of them have died, but not all. It is not easy to see on what grounds such an opinion of
Jose Felix Martinez for appellee. the court is based, inasmuch as, according to the witnesses, not one, nor two, but all of the said
three carabaos died, and there is no reason whatever to consider that the testimony of the
witnesses on this score was only true in part. The testimony of the aforesaid witnesses has not
SYLLABUS been contradicted or overcome in any manner at the trial, and is sufficiently proves that the three
carabaos in question really died of the "prevailing disease," and, therefore, without fault on the part
of the defendants.
1. FORTUITOS DESTRUCTION OF SUBJECT-MATTER OF AN OBLIGATION. — In the The death of the carabaos being fortuitous, it results upon the one hand that the obligation
absence of express stipulations to the contrary, an obligation imposed upon one person to return contracted by the defendants to return or deliver up the said carabaos was extinguished as a
certain property to another is extinguished by the fortuitos destruction of the subject-matter of the matter of fact and of law (art. 1182, Civil Code), and on the other, that they were exempted from the
agreement. (Art. 1105, Civil Code.) other subsidiary obligation contracted by them, to pay the value of the said carabaos in default of
2. BOND; LIABILITY OF SURETIES. — A bond executed by sureties conditioned upon the carabaos themselves, because, in accordance with article 1105 of the above cited Civil Code,
the return of property therein specified is not enforeable unless the value of the property be first unless there is a legal provision or an express covenant, which in this case does not exist, no one
lawfully determined or the amount be specifically agreed upon. cdll should be held to account for fortuitous cases. cda
Besides, there is another reason whereby the defendant can not, in this case, be
compelled to pay the sum of P300.42 which Alejo Lanzon owes to the plaintiff. The defendants did
not execute a bond or contract any obligation whatever for the said indebtness of Lanzon. The
DECISION obligation contracted by them was to respond for the delivery of the carabaos, and, in default
thereof, to pay the value of the same, so long as it did not exceed the sum of P500 that was fixed
as the maximum limit of their liability. Said bond was executed under the provisions of section 440
of the Code of Civil Procedure, according to which the bondsman is not responsible for other than
MAPA,  J p: the property so released, or for the payment of the value thereof. It is so much so that the same
section expressly declares that such obligation  shall stand in place of the property so released. As
In an action instituted by the plaintiff herein against a certain Alejo Lanzon in the court of the actual value of the carabaos, the delivery of which was guaranteed by means of the obligation
the justice of the peace of the town of Victorias, Province of Occidental Negros, for the recovery of executed by the defendants, has not been proven in the case, there is no true basis from which to
the sum of P300.42, the plaintiff asked for and obtained a preliminary attachment of the property of start in order to determine the sum that the latter should pay on said obligation, even on the
the defendant Lanzon, which was levied on three carabaos owned by the latter. The said hypothesis that they were so bound by virtue of the obligation mentioned above. For the reasons
attachment was released under a bond given by the defendants in this action for the sum of P500. above set forth, the judgment appealed from should be reversed in so far as it sentences the
The terms of the said bond are as follows: defendants to pay to the plaintiff the sum of P300.42 first claimed in the complaint.
"Therefore, we, the undersigned . . .do hereby bind ourselves, jointly and Payment has also been asked therein of the sum of P57.47, the amount of the costs in the
severally, in favor of the plaintiff, in the aforesaid sum of five hundred pesos, action instituted by the plaintiff against Alejo Lanzon, to which reference was made above, by virtue
Philippine currency, on the condition that, should judgment be rendered in favor of of the obligation executed by the defendants for the effects of the appeal interposed by Lanzon in
the plaintiff, the defendant, on request, shall again deliver the attached carabaos to said action. There is no question as to this point, since the defendants expressed at once their
the officer of the court, in order that the same may be applied to the enforcement of agreement to the claim of the plaintiff, saying in their answer to the complaint that they are, and
the sentence, and in the event that he should fail to do so, to pay to the plaintiff the have always been ready to pay the said sum. That portion of the judgment which refers to this
total value of the said carabaos." amount should, therefore, be affirmed. cdasia
In that suit, the defendant, Lanzon, was finally sentenced to pay to the plaintiff the amount The judgment appealed from is hereby reversed in so far as it sentences the defendants
claimed by him. In consequence thereof a writ of execution was issued which could not be enforced to pay the sum of P300.42 and legal interest thereon, and the complaint is dismissed in so far as it
because no property of any kind subject to execution was found in the possession of the latter. relates to said amount; and that portion of the judgment which sentences the defendants to pay to
Neither were the carabaos produced, the preliminary attachment of which had been raised by the plaintiff P57.47, the amount of the costs in the action against Alejo Lanzon, is hereby affirmed.
means of the bond executed by the defendants. Cdpr No special ruling is made as to costs in both instances. So ordered.
||| (Panco v. Gonzaga, G.R. No. L-4203, [March 27, 1908], 10 PHIL 646-649)
 [G.R. No. 6913. November 21, 1913.] from the bank by the military authorities by virtue of such order, was confiscated and turned over to
the Government.

THE ROMAN CATHOLIC BISHOP OF JARO, plaintiff-appellee, vs. GREGORIO While there is considerable dispute in the case over the question whether the P6,641 of
DE LA PEÑA, administrator of the estate of Father Agustin de la trust funds was included in the P19,000 deposited as aforesaid, nevertheless, a careful
Peña,defendant-appellant. examination of the case leads us to the conclusion that said trust funds were a part of the funds
deposited and which were removed and confiscated by the military authorities of the United States.
Branch of the law know in England and America as the law of the trusts had no exact
J. Lopez Vito for appellant. counterpart in the Roman law and is more has none under the Spanish law, In this jurisdiction,
therefore, Father dela Peña's liability is determined by those portions of the Civil Code which relate
Arroyo & Horrilleno for appellee. to obligations (Book 4, Title 1.)
Although the Civil Code states that a "person obliged to give something is also bound to
preserve it with the diligence pertaining to a good father of a family" (art. 1094), it also provides,
SYLLABUS
following the principle of the Roman law, major casus est, cui humana infirmitas resistere non
potest, that "no one shall be liable for events which could not be foreseen, or which having been
1. TRUST FUNDS; LIABILITY OF TRUSTEE. — One who, having in his possession trust foreseen were inevitable, with the exceptions of the cases expressly mentioned in the law of those
funds, deposits them in his personal account in a bank and mixes them with his own funds, does in which the obligation so declares." (Art. 1105).
not thereby assume an obligation different from that under which he would have lain in such By placing the money in the bank and mixing it with his personal funds De la Peña did not
deposit had not been made; not does he thereby become liable to repay the money at all hazards; thereby assume an obligation different from that under which he would have lain if such deposit
and where such funds are taken from the bank by  fuerza mayor, he is relieved from responsibility had not been made, nor did he thereby make himself liable to repay the money at all hazards. If the
in relation thereto. money had been forcibly take from his pocket or from his house by the military forces of one of the
2. ID.; ID.; ENGLISH AND AMERICAN LAW OF TRUSTS NOT APPLICABLE. — That combatants during a state of war, it is clear that under the provisions of the Civil Code he would
branch of the law, known in England and America as the law of trusts, has no counterpart in the have been exempt from responsibility. The fact that he placed the trust fund in the bank is his
Roman law and none under the Spanish law. personal account does not add to his responsibility. Such deposit did not make him a debtor who
must respond at all the hazards.
We do not enter into a discussion for the purpose of determining whether he acted more
or less negligently by depositing the money in the bank than he would if had left it in his home: or
DECISION whether he was more or less negligent by depositing the money in his personal account than he
would have been if had deposited it in a separate account as trustee. We regard such discussion
as substantially fruitless, inasmuch as the precise question is not one of the negligence. There was
no law prohibiting him from depositing it as he did and there was no law which changed his
MORELAND,  J p: responsibility by reason of the deposit, While it may be true that one who is under obligation to do
or give a things is in duty bound, when he sees events approaching the results of which will be
This is an appeal by the defendant from a judgment of the Court of First Instance of Iloilo, dangerous to his trust, to take all reasonable means and measures to escape or, if unavoidable, to
awarding to the plaintiff the sum of P6,641, with interest at the legal rate from the beginning of the temper the effects of those events, we do not been constrained to hold that, in choosing between
action. two means equally legal, he is culpably negligent in selecting negligent in selecting one whereas he
would not have been if he had selected the other.
It is established in this case that the plaintiff is the trustee of a charitable bequest made for
the construction of a leper hospital and that Father Agustin de la Peña was the duly authorized The court, therefore, finds and declares that the money which is the subject matter of this
representative of the plaintiff to receive the legacy. The defendant is the administrator of the estate action was deposited by Father De la Peña in the Hongkong and Shanghai Banking Corporation of
of Father De la Peña. Iloilo; that said money was forcibly taken from the bank by the armed forces of the United States
during the war of the insurrection; and that said Father De la Peña was not responsible for its loss.
In the year 1898 the books of Father de la Peña, as trustee, shoed that he had on hand as
such trustee the sum of P6,641, collected by him for the charitable purposes aforesaid. In the same The judgment is therefore reversed, and it is decreed that the plaintiff shall take nothing by
year he deposited in his personal account P19,000 in the Hongkong and Shanghai Bank at Iloilo. his complaint.
Shortly thereafter and during the war of the revolution, Father dela Peña was arrested by the ||| (Roman Catholic Bishop of Jaro v. de la Peña, G.R. No. 6913, [November 21, 1913], 26 PHIL 144-
military authorities as a political prisoner, and while thus detained made an order on said bank in
favor of the United States Army officer under whose charge he then was so for the sum thus 149)
deposited in said bank. The arrest of Father de la Peña and the confiscation of the funds in the
bank were the result of the claim of the military authorities that he was an insurgent and that the
funds thus deposited had been collected by him for revolutionary purposes. The money was taken
[G.R. No. 29298. December 16, 1928.] period of this agreement, without charge to the Producer or Producers, operate a
permanent railroad run by steam or motor, or both, for the use of the plantation or
plantations in the transportation of sugar cane, sugar, fertilizer, and all such articles
REYNALDO LABAYEN, ET AL., plaintiffs. REYNALDO LABAYEN,  appellant, vs. as the producer may need for his estate, his use and that of his family and
TALISAY SILAY MILLING CO., INC.,  defendant-appellee. employees, and shall cause the main line or a branch thereof, as the case may be,
to reach the point of the plantation to be hereafter described not farther than one
mile from any of the boundaries of said plantation, whenever the contour of the
Angel S. Gamboa for appellant. land, the curves, and elevations permit the same; it shall provide said railroad with
locomotives or motors and wagons in a number sufficient to make efficient the
R. Nolan for appellee. transportation of sugar cane, sugar, fertilizer, and the above mentioned articles,
and shall likewise build a branch of said railroad in such a way that from the main
line, mill, and warehouses, it shall reach the wharf above mentioned, and it shall
SYLLABUS also cause the yard of the factory near the sugar mill to be available for use with
switches or otherwise. All the steam locomotives shall be provided with safety
spark devices. The railroad shall consist of a road or path conveniently and duly
1. CONTRACTS; IMPOSSIBILITY OF PERFORMANCE. — A contract entered into by a designated so that, so far as possible, all the producers may derive equal benefit
sugar central and the owner of a hacienda provided for the construction of a railroad "whenever the from said railroad. The right-of-way for the main line of the railroad shall be three
contour of the land, the curves, and elevations permit the same." It was shown that such and a half (3-1/2) meters wide measured from the center of the road to each side,
construction was possible but very dangerous. The contract further provided that "In case of and the branches, switches, or curved shall have more if necessary.
inability to secure, under reasonable conditions such rights-of-way as 'La Central' may require, . . .
its effects shall be suspended in part or in whole during such period of incapacity." It was shown "OBLIGATION OF THE PRODUCER
that the owner of the haciendas  through which the railroad would have to pass would not grant xxx xxx xxx
permission to use his land for this purpose. On these facts, it is held that the action for damages for
the alleged breach of contract to grind sugar cane cannot prosper. "Fifth: That he shall accept the provisions of clauses 7, 8, and 19 of the
covenants of 'La Central' and shall deliver the cane as therein provided; hereby
binding himself to plant each year according to the usage and custom of a good
agriculturist not less than one-half of his own lands devoted to sugar cane subject
DECISION to the approval of the Committee of Producers leaving the remainder uncultivated
"MUTUAL OBLIGATIONS
xxx xxx xxx
MALCOLM,  J p: "10. In case of . . . inability to secure, under reasonable conditions such
rights-of-way as 'La Centra' may require, . . . 'La Central' shall notify the Committee
This is an action for damages in the amount of P28,620 for the alleged breach of a of Producers and without incurring any liability for the non-fulfillment of the terms of
contract to grind sugar cane in 1920-1921. After a rehearing, the defendant was absolved from the this contract, its effect shall be suspended in part or in whole during such period of
complaint, and the plaintiff was condemned, on the cross-complaint, to pay the defendant the sum incapacity. . . ..'' (Emphasis inserted.)
of P12,114, without special pronouncement as to costs. With particular reference to the third paragraph of the clauses obligating the central, it is
An examination of the record on appeal discloses that the exhibits are missing. Still this is admitted that the central has not continued its railroad through to theHacienda Dos Hermanos. The
not in this instance of great importance. The facts as found by the trial judge are not seriously railroad comes to the Hacienda  Esmeralda No. 2 and there stops. For the railroad to extend to
disputed. It is only the deductions which should be drawn from the facts which worry the parties. the Hacienda Dos Hermanos, a distance of four kilometers would require a gradual elevation of
4.84 per cent to 7 per cent, would make necessary the providing of twenty-six curves, and would
The plaintiff, along with another, possesses the hacienda known as Dos Hermanos of cost about P80,000. The witness H. W. Corp, a civil engineer employed in the construction work of
Talisay, Occidental Negros. The defendant is a corporation dedicated to the milling of sugar cane. the Manila Railroad Company, the Pampanga Sugar Milling Co., and the Binalbagan Central,
On August 27, 1919, the plaintiff and the defendant entered into a contract similar to contracts testified that it was possible to construct a railroad to the Hacienda Dos Hermanos but that to do
entered into by the defendant and other planters. It is this contract which is the basis of plaintiff's would be very dangerous.
cause of action. Among the clauses in the contract are the following:
Recalling that the contract provided for the construction of a railroad "whenever the
"COVENANTS OF 'LA CENTRAL' contour of the land, the curves, and elevations permit the same,'' and that such construction is
xxx xxx xxx possible but very dangerous, the question then arises if the defendant can excuse itself on this
ground, or if the plaintiff can recover from the defendant for damages for breach of contract,
"Third: That it shall build and after building it shall do or cause to be done
through inability to mill cane.
all that is necessary for its preservation in good condition, and shall, during the
 It is elemental that the law requires parties to do what they have agreed to do. If a party
charges himself with an obligation possible to be performed, he must abide by it unless
performance is rendered impossible by the act of God, the law, or the other party. A showing of
mere inconvenience, unexpected impediments, or increased expenses is not enough. Equity
cannot relieve from bad bargains simply because they are such. So one must answer in damages
where the impossibility is only so in fact. (Thornborow vs. Whitacre, 2 Ld. Raym. [1164], 92 E. R.,
270; Reid vs. Alaska Packing Co. [1903], 43 Or., 429; Columbus Ry. & Power Co. vs. Columbus
[1919], 249 U. S., 399.)
The foregoing are familiar principles to be found in the American and English law of
contracts. The civil law on the subject of obligations is not essentially different. Article 1272 of the
Civil Code provides: ''Impossible things or services cannot be the subject- matter of contracts.'' And
article 1184 of the same Code provides: ''The debtor shall also be relieved from obligations which
consist in the performance of an act if fulfillment of the undertaking becomes legally or physically
impossible.''
May one obligate himself to do something which, when accomplished, will prove to be
dangerous to life and property ? We doubt it. Take the contract in question as an example. It was a
general contract of the form used by the central and various proprietors of sugar-cane fields. It was
intended to be limited in particular application to Haciendas where not impeded by physical
impossibility. The contract was qualified by an implied condition which, if given practical effect,
results in absolving the central from its promise. Not to sanction an exception to the general rule
would run counter to public policy and the law by forcing the performance of a contract undesirable
and harmful. (8 Manresa's Codigo Civil Español, p. 355.)
There is another aspect to the case which has to do with the tenth paragraph of the
mutual obligations of the contract and which concerned the securing of the rights of-way for the
proposed railroad. To get from the Hacienda Esmeralda No. 2 to the Hacienda  Dos Hermanos, the
railroad would have to pass through thehaciendas  of Esteban de la Rama. But he would not grant
permission to use his land for this purpose in 1920, and only consented to do so in 1924. Here then
was a clear case of such a condition of affairs as was contemplated by the contract.
The foregoing points being admitted, it logically follows that the defendant can recover on
its cross-complaint. The defense to the cross-complaint is identical with the theory of the complaint.
For the same reasons that the plaintiff cannot recover must he make good for he is debt to the
defendant.
Accepting, therefore, the facts as found by the trial judge, and noting no reversible error
on any legal question, the judgment appealed from must be as it is hereby affirmed, with the costs
of this instance against the appellant.
||| (Labayen v. Talisay Silay Milling Co., Inc., G.R. No. 29298, [December 16, 1928], 52 PHIL 440-444)
[G.R. No. L-9126. January 31, 1957.] Sunday Law, which took effect on September 8, 1953, prohibiting the opening of any commercial,
industrial or agricultural enterprise on Sundays. As some of petitioner's employees claimed that
under the terms of their bargaining agreement they were entitled to their Sunday wages even if
ASIA BED FACTORY, petitioner-appellee, vs. NATIONAL BED AND KAPOK they did not work on those days, petitioner filed a petition in the Court of First Instance of Manila for
INDUSTRIES WORKERS' UNION, ET AL., respondents-appellants. a declaratory judgment that it ceased to be bound by the above-quoted clause of the collective
bargaining agreement when the Blue Sunday Law went into effect.
Without disputing the facts alleged in the petition, the respondent labor union, by way of
Paredes, Gaw, Acevedo & Associates  for appellee.
answer, filed a motion for a summary judgment declaring that petitioner's employees were entitled
Cipriano Cid & Associates for appellants. to Sunday wages notwithstanding the passage of the Blue Sunday Law.
On the basis of the pleadings thus filed, the lower court rendered judgment holding that, in
view of the provision of the Blue Sunday Law prohibiting the opening of commercial and industrial
SYLLABUS establishments on Sundays, the petitioner was relieved from compliance with its agreement "to
provide it employees with work on Sundays and to pay them for Sundays." Reconsideration of the
judgment having been denied, the respondents appealed directly to this Court on a pure question
1. EMPLOYER AND EMPLOYEE; COLLECTIVE BARGAINING AGREEMENT; of law.
IMPOSSIBLE OF PERFORMANCE, BLUE SUNDAY LAW. — Where the collective bargaining
agreement between employer and employee provides among other things for mutual prestation in The question for determination is whether the approval of the Blue Sky Law relieved
that employees now paid in the monthly basis shall be paid under said agreement on the daily petitioner from complying with its agreement to pay its laborers Sunday wages since they can not
basis at rates based on their present compensation plus the additional increase of (P0.30) thirty be given work on Sundays because of the closure of petitioner's business on those days are
centavos a day, with the understanding that these employees shall be provided with work on required by said law. The lower court answers the question in the affirmative on the ground that the
Sundays at time and one-half and that in the event no work on Sundays is available through no clause in question provided for mutual prestations between the contracting parties — the petitioner
fault of the employees, they shall be entitled to payment of the equivalent of their wages as if they to provide its employees with work on Sundays and pay them for such work and the employees to
had performed work on that day. However, when the Blue Sunday Law which prohibits the opening do the work given them on those days — and that these prestations became impossible of
of commercial and industrial establishments on Sunday was enforced, prestation became performance when the Blue Sunday Law prohibited the opening of commercial and industrial
impossible of performance. Held: That the employer is relieved from complying with its agreement establishments on Sundays.
to pay laborers Sunday wages. To this view we are inclined to agree. The bargaining agreement puts the employees on a
daily basis at rates of compensation therein provided, with the express stipulation that work shall be
DECISION provided on Sundays and at a higher compensation. As the trial court says, payment for Sundays is
in return for work done. It is true the agreement provides for the payment of wages on Sundays if
REYES, A., J  p: no work is made available on those days through no fault of the employees. But the fact is that the
agreement does give the employer the right to provide work on Sundays. And it would seem the
On June 2, 1953, the petitioner Asia Bed Factory and respondent labor union entered into height of injustice to deprive the employer of this right without, at the same time, relieving him of the
a collective bargaining agreement which contained, among other things, the following clause: obligation to pay the employees.

"XI. PAYMENTS FROM MONTHLY TO DAILY. Section 6 of the Blue Sunday Law which says that "it shall be unlawful for any employer to
reduce the compensation of any of his employees or laborers by reason of the provisions of this
"Employees now paid on the monthly basis shall be paid under this Act" does not militate against this view. There is here no attempt on the part of the employer to
agreement on the daily basis at rates based on their present compensation plus the reduce the compensation of his employees. It is the law itself which in effect reduces that
additional increase of (0.30) THIRTY CENTAVOS a day, with the understanding compensation by depriving the employees of work on Sundays, thus preventing them from earning
that these employees shall be provided with work on Sundays at time and one-half; the wages stipulated in the bargaining agreement.
and that in the event that no work on Sundays is available through no fault of the
employees, they shall be entitled to payment of the equivalent of their wages as if There is nothing to the contention that to apply the Blue Sunday Law to the present
they had performed referred for that day. The rates of payment of the employees agreement would infringe the constitutional prohibition against the impairment of the obligations of
above referred to shall be computed in the attached document marked as annex contract. The Blue Sunday Law is intended for the health, well-being and happiness of the working
"a" and made an integral part of this agreement. class and is a legitimate exercise of the police power.

"In the event that an employee shall absent himself for no excusable In view of the foregoing, the judgment appealed from is affirmed, without pronouncement
reasons, the Company shall be entitled to reduce the corresponding wage or as to costs.
wages." ||| (Asia Bed Factory v. National Bed and Kapok Industries Workers' Union, G.R. No. L-9126, [January
The petitioner faithfully complied with the terms of the above clause until it was forced to suspend 31, 1957], 100 PHIL 837-840)
its business on Sundays in obedience to the provisions ofRepublic Act No. 946, known as the Blue
[G.R. No. L-44349. October 29, 1976.] Respondent prayed of the Rizal court of first instance that "after due trial, this Honorable Court render
judgment modifying the terms and conditions of the contract . . . by fixing the proper shares that should
pertain to the herein parties out of the gross proceeds from the sales of subdivided lots of subject
JESUS V. OCCEÑA and EFIGENIA C. OCCEÑA, petitioners, vs. HON. RAMON subdivision"
V. JABSON, Presiding Judge of the Court of First Instance of Rizal, Branch
XXVI; COURT OF APPEALS and TROPICAL HOMES, INC.,  respondents. Petitioners moved to dismiss the complaint principally for lack of cause of action, and upon denial
thereof and of reconsideration by the lower court elevated the matter on certiorari to respondent Court
of Appeals.
Occeña Law Office for petitioners.
Respondent court in its questioned resolution of June 28, 1976 set aside the preliminary injunction
Serrano, Diokno & Serrano for respondents. previously issued by it and dismissed petition on the ground that under Article 1267 of the Civil Code
which provides that.
"ART. 1267. When the service has become so difficult as to be manifestly beyond
the contemplation of the parties, the obligor may also be released therefrom, in
DECISION whole or in part." 1
". . . a positive right is created in favor of the obligor to be released from the
performance of an obligation in full or in part when its performance 'has become so
TEEHANKEE, J  p: difficult as to be manifestly beyond the contemplation of the parties'."

The Court reverses the Court of Appeals' appealed resolution. The Civil Code authorizes the release of Hence, the petition at bar wherein petitioners insist that the worldwide increase in prices cited by
an obligor when the service has become so difficult as to be manifestly beyond the contemplation of the respondent does not constitute a sufficient cause of action formodification of the subdivision contract.
parties but does not authorize the courts to modify or revise the subdivision contract between the After receipt of respondent's comment, the Court in its Resolution of September 13, 1976 resolved to
parties or fix a different sharing ratio from that contractually stipulated with the force of law between the treat the petition as a special civil action and declared the case submitted for decision.
parties. Private respondent's complaint for modification of the contract manifestly has no basis in law The petition must be granted.
and must therefore be dismissed for failure to state a cause of action. LLjur
While respondent court correctly cited in its decision the Code Commission's report giving the rationale
On February 25, 1975 private respondent Tropical Homes, Inc. filed a complaint for modification of the for Article 1267 of the Civil Code, to wit,
terms and conditions of its subdivision contract with petitioners (landowners of a 55,330 square meter
parcel of land in Davao City), making the following allegations: "The general rule is that impossibility of performance releases the obligor.
However, it is submitted that when the service has become so difficult as to be
"That due to the increase in price of oil and its derivatives and the concomitant manifestly beyond the contemplation of the parties, the court should be authorized
worldwide spiralling of prices, which are not within the control of plaintiff, of all to release the obligor in whole or in part. The intention of the parties should govern
commodities including basis raw materials required for such development work, the and if it appears that the service turns out to be so difficult as have been beyond
cost of development has risen to levels which are unanticipated, unimagined and their contemplation, it would be doing violence to that intention to hold the obligor
not within the remotest contemplation of the parties at the time said agreement was still responsible. . . .," 2
entered into and to such a degree that the conditions and factors which formed the
original basis of said contract, Annex 'A', have been totally changed; it misapplied the same to respondent's complaint.
"That further performance by the plaintiff under the contract, Annex 'A', will result in If respondent's complaint were to be released from having to comply with the subdivision contract,
situation where defendants would be unjustly enriched at the expense of the assuming it could show at the trial that the service undertaken contractually by it had "become so
plaintiff; will cause an inequitous distribution of proceeds from the sales of difficult as to be manifestly beyond the contemplation of the parties", then respondent court's upholding
subdivided lots in manifest contravention of the original essence of the agreement; of respondent's complaint and dismissal of the petition would be justifiable under the cited codal article.
and will actually result in the unjust and intolerable exposure of plaintiff to Without said article, respondent would remain bound by its contract under the theretofore prevailing
implacable losses, all such situations resulting in an unconscionable, unjust and doctrine that performance therewith is not excused "by the fact that the contract turns out to be hard
immoral situation contrary to and in violation of the Primordial concepts of good and improvident, unprofitable or impracticable, ill advised or even foolish, or less profitable, or
faith, fairness and equity which should pervade all human relations." unexpectedly burdensome", 3 since in case a party desires to be excused from performance in the
event of such contingencies arising, it is his duty to provide therefor in the contract.
Under the subdivision contract, respondent "guaranteed (petitioners as landowners) as the latter's fixed
and sole share and participation an amount equivalent to forty (40%) per cent of all cash receipts from But respondent's complaint seeks not release from the subdivision contract but that the court "render
the sale of the subdivision lots" judgment modifying the terms and conditions of the contract . . . by fixing the  proper shares that should
pertain to the herein parties out of the  gross proceeds from the sales of subdivided lots of subject
subdivision". The cited article does not grant the courts this authority to remake, modify or revise the
contract or to fix the division of shares between the parties as contractually stipulated with the force of
law between the parties, so as to substitute its own terms for those covenanted by the parties
themselves. Respondent's complaints for modification of contract manifestly has no basis in law and
therefore states no cause of action. Under the particular allegations of respondent's complaint and the
circumstances therein averred, the courts cannot even in equity grant the relief sought. LLjur
A final procedural note. Respondent cites the general rule that an erroneous order denying a motion to
dismiss is interlocutory and should not be corrected by certiorari but by appeal in due course. This case
however manifestly falls within the recognized exception that certiorari will lie when appeal would not
prove to be a speedy and adequate remedy. 4 Where the remedy of appeal would not, as in this case,
promptly relieve petitioners from the injurious effects of the patently erroneous order maintaining
respondent's baseless action and compelling petitioners needlessly to go through a protracted trial and
clogging the court dockets by one more futile case, certiorari will issue as the plain, speedy and
adequate remedy of an aggrieved party. cdrep
ACCORDINGLY, the resolution of respondent appellate court is reversed and the petition for certiorari
is granted and private respondent's complaint in the lower court is ordered dismissed for failure to state
a sufficient cause of action. With costs in all instances against private respondent.
||| (Occeña v. Jabson, G.R. No. L-44349, [October 29, 1976], 165 PHIL 617-622)
[G.R. No. 116896. May 5, 1997.] the EDSA Revolution and its poor financial condition "rendered the performance of the lease contract
impractical and inimical to the corporate survival of the petitioner." This Court cannot subscribe to this
argument.
PHILIPPINE NATIONAL CONSTRUCTION CORPORATION, petitioner, vs.
COURT OF APPEALS, MA. TERESA S. RAYMUNDO-ABARRA, JOSE S. 4. ID.; SPECIAL CONTRACTS; LEASE; NOT AFFECTED BY POOR FINANCIAL CONDITION. —
RAYMUNDO, ANTONIO S. RAYMUNDO, RENE S. RAYMUNDO, and AMADOR Anent petitioner's alleged poor financial condition, the same will neither release petitioner from the
S. RAYMUNDO,  respondents. binding effect of the contract of lease. As held in Central Bank v.  Court of Appeals, mere pecuniary
inability to fulfill an engagement does not discharge a contractual obligation, nor does it constitute a
defense to an action for specific performance.
Government Corporate Counsel  for petitioner.
5. ID.; ID.; ID.; NOT AFFECTED BY NON-MATERIALIZATION OF PARTICULAR PURPOSE IN
Ramos Nobleza & Sibal for private respondent. ENTERING CONTRACT. — With regard to the non-materialization of petitioner's particular purpose in
entering into the contract of lease, i.e. to use the leased premises as a site of a rock crushing plant, the
same will not invalidate the contract. The cause or essential purpose in a contract of lease is the use or
enjoyment of a thing. As a general principle, the motive or particular purpose of a party in entering into a
SYLLABUS
contract does not affect the validity nor existence of the contract; an exception is when the realization of
such motive or particular purpose has been made a condition upon which the contract is made to
1. CIVIL LAW; SPECIAL CONTRACTS; LEASE; PETITIONER ESTOPPED IN CLAIMING THAT THE depend. The exception does not apply here.
TEMPORARY USE PERMIT IS NOT THE INDUSTRIAL CLEARANCE REFERRED IN THE
6. ID.; ID.; ID.; LEASE OF LAND; RIGHTS AND OBLIGATIONS OF THE LESSOR AND LESSEE;
CONTRACT AFTER RECOGNIZING THE SAME. — Petitioner is estopped from claiming that the
CASE AT BAR. — The temporary permit was valid for two years but was automatically revoked
Temporary Use Permit was not the industrial clearance contemplated in the contract. The "Industrial
because of its non-use within one year from its issuance. The non-use of the permit and the non-entry
Permit" mentioned in petitioners' letter could only refer to the Temporary Use Permit issued by the
into the property subject of the lease contract were both imputable to petitioner and cannot, therefore,
Ministry of Human Settlements. Petitioner recognized its obligation to pay rentals counted from the date
be taken advantage of in order to evade or lessen petitioner's monetary obligation. The damage or
the permit was issued. Thus, the suspensive condition — issuance of industrial clearance — has
prejudice to private respondents is beyond dispute. They unquestionably suffered pecuniary losses
already been fulfilled and that the lease contract has become operative.
because of their inability to use the leased premises. Thus, in accordance with Article 1659 of the Civil
2. ID.; CONTRACTS; EXTINGUISHMENT; LOSS OF THE THING DUE; ARTICLE 1266; WHEN Code,they are entitled to indemnification for damages; and the award of P492,000.00 representing the
PRESTATION BECOMES IMPOSSIBLE WITHOUT FAULT OF OBLIGOR; NOT APPLICABLE IN rent for two years is fair and just under the circumstances of the case.
CASE AT BAR. — It is a fundamental rule that contracts, once perfected, bind both contracting parties,
7. CONSTITUTIONAL LAW; BILL OF RIGHTS, DUE PROCESS; RIGHT TO BE HEARD IN COURT
and obligations arising therefrom have the force of law between the parties and should be complied with
PROCEEDINGS, NOT VIOLATED. — Petitioner submits that the trial court gravely abused its discretion
in good faith. But the law recognizes exceptions to the principle of the obligatory force of contracts. One
in denying petitioner the right to be heard. We disagree. The trial court was in fact liberal in granting
exception is laid down in Article 1266 of the Civil Code,which reads: "The debtor in obligations to do
several postponements to petitioner before it deemed terminated and waived the presentation of
shall also be released when the prestation becomes legally or physically impossible without the fault of
evidence in petitioner's behalf. Likewise, the court was liberal with respect to petitioner's motion for
the obligor." Petitioner cannot, however, successfully take refuge in the said article, since it is applicable
reconsideration. It cannot be said that petitioner was deprived of its day in court. The essence of due
only to obligations "to do," and not to obligations "to give." An obligation "to do" includes all kinds of
process is simply an opportunity to be heard. To be heard does not only mean oral arguments in court;
work or service; while an obligation "to give" is a prestation which consists in the delivery of a movable
one may be heard also through pleadings. Where opportunity to be heard, either through oral
or an immovable thing in order to create a real right, or for the use of the recipient, or for its simple
arguments or pleadings, is accorded, there is no denial of procedural due process.
possession, or in order to return it to its owner. The obligation to pay rentals or deliver the thing in a
contract of lease falls within the prestation "to give"; hence, it is not covered within the scope of Article
1266. At any rate, the unforeseen event and causes mentioned by petitioner are not the legal or
physical impossibilities contemplated in the said article. Besides, petitioner failed to state specifically the
circumstances brought about by "the abrupt change in the political climate in the country" except the DECISION
alleged prevailing uncertainties in government policies on infrastructure projects.
3. ID.; ID.; ID.; PRINCIPLE OF REBUS SIC STANTIBUS; NOT APPLICABLE. — The principle of rebus
sic stantibus neither fits in with the facts of the case. Under this theory, the parties stipulate in the light DAVIDE,  JR., J  p:
of certain prevailing conditions, and once these conditions cease to exist, the contract also ceases to
exist. This theory is said to be the basis of Article 1267 of the Civil Code.This article, which enunciates This petition for review on certiorari has its roots in Civil Case No. 53444, which was sparked by
the doctrine of unforeseen events, is not, however, an absolute application of the principle ofrebus sic petitioner's refusal to pay the rentals as stipulated in the contract of lease 1 on an undivided portion of
stantibus, which would endanger the security of contractual relations. The parties to the contract must 30,000 square meters of a parcel of land owned by private respondents. prll
be presumed to have assumed the risks of unfavorable developments. It is therefore only in absolutely
exceptional changes of circumstances that equity demands assistance for the debtor. In this case, The lease contract, executed on 18 November 1985, reads in part as follows:
petitioner wants this Court to believe that the abrupt change in the political climate of the country after
 1. TERM OF LEASE — This lease shall be for a period of five (5) years, the contract. as it had decided to cancel or discontinue with the rock crushing project "due to financial,
commencing on the date of issuance of the industrial clearance by the as well as technical, difficulties." 4
Ministry of Human Settlements, renewable for a like or other period at the
option of the LESSEE under the same terms and conditions.  

2. RATE OF RENT — LESSEE shall pay to the LESSOR rent at the monthly rate of Private respondents refused to accede to petitioner's request for the pretermination of the lease
TWENTY THOUSAND PESOS (P20,000.00), Philippine Currency, in the contract. They insisted on the performance of petitioner's obligation and reiterated their demand for the
manner set forth in Paragraph 3 below. This rate shall be increased yearly payment of the first annual rental. 5
by Five Percent (5%) based on the agreed monthly rate of P20,000.00 as
Petitioner objected to private respondents' claim and argued that it was "only obligated to pay . . the
follows:
amount of P20,000.00 as rental payments for the one-month period of lease, counted from 07 January
Monthly Rate Period Applicable 1986 when the Industrial Permit was issued by the Ministry of Human Settlements up to 07 February
1986 when the Notice of Termination was served" 6 on private respondents.
P21,000.00 Starting on the 2nd year
On 19 May 1986, private respondents instituted with the Regional Trial Court of Pasig an action against
P22,000.00 Starting on the 3rd year petitioner for Specific Performance with Damages. 7 The case was docketed as Civil Case No. 53444 at
Branch 160 of the said court. After the filing by petitioner of its Answer with Counterclaim, the case was
P23,000.00 Starting on the 4th year
set for trial on the merits.
P24,000.00 Starting on the 5th year
What transpired next was summarized by the trial court in this wise:
3. TERMS OF PAYMENT — The rent stipulated in Paragraph 2 above shall be
Plaintiffs rested their case on September 7, 1987 (p. 87 rec.). Defendant asked for
paid yearly in advance by the LESSEE. The first annual rent in the amount
postponement of the reception of its evidence scheduled on August 10, 1988 and
of TWO HUNDRED FORTY THOUSAND PESOS (P240,000.00),
as prayed for, was reset to August 25, 1988 (p. 91 rec.) Counsel for defendant
Philippine currency, shall be due and payable upon the execution of this
again asked for postponement, through representative, as he was presently
Agreement and the succeeding annual rents shall be payable every twelve
indisposed. The case was reset, intransferable to September 15 and 26, 1988 (p.
(12) months thereafter during the effectivity of this Agreement.
94 rec.) On September 2, 1988, the office of the Government Corporate Counsel
4. USE OF LEASED PROPERTY — It is understood that the Property shall be entered its appearance for defendant (p. 95, rec.) and the original counsel later
used by the LESSEE as the site, grounds and premises of a rock crushing withdrew his appearance. On September 15, 1988 the Government Corporate
plant and field office, sleeping quarters and canteen/mess hall. The Counsel asked for postponement, represented by Atty. Elpidio de Vega, and with
LESSORS hereby grant to the LESSEE the right to erect on the Leased his conformity in open court, the hearing was reset, intransferable to September 26
Property such structure(s) and/or improvement(s) necessary for or and October 17, 1988. (p. 98, rec.) On September 26, 1988 during the hearing,
incidental to the LESSEE's purposes. defendant's counsel filed a motion for postponement (urgent) as he had "sore
eyes", a medical certificate attached.
xxx xxx xxx
Counsel for plaintiffs objected to the postponement and the court considered the
11. TERMINATION OF LEASE — This Agreement may be terminated by mutual evidence of the government terminated or waived. The case was deemed
agreement of the parties. Upon the termination or expiration of the period submitted for decision upon the filing of the memorandum. Plaintiffs filed their
of lease without the same being renewed, the LESSEE shall vacate the memorandum on October 26, 1988. (p. 111, rec.).
Leased Property at its expense.
On October 18, 1988 in the meantime, the defendant filed a motion for
On 7 January 1986, petitioner obtained from the Ministry of Human Settlements a Temporary Use reconsideration of the order of the court on September 26, 1988 (p. 107, rec.) The
Permit 2 for the proposed rock crushing project. The permit was to be valid for two years unless sooner motion was not asked to be set for hearing (p. 110 rec.) There was also no proof of
revoked by the Ministry. notice and service to counsel for plaintiff  . The court in the interest of justice set the
hearing on the motion on November 29, 1988. (p. 120, rec.) but despite notice,
On 16 January 1986, private respondents wrote petitioner requesting payment of the first annual rental again defendant's counsel was absent (p. 120-A, dorsal side, rec.) without reason.
in the amount of P240,000 which was due and payable upon the execution of the contract. They also The court reset the motion to December 16, 1988, in the interest of justice. The
assured the latter that they had already stopped considering the proposals of other aggregates plants to motion for reconsideration was denied by the court. A second motion for
lease the property because of the existing contract with petitioner. 3 reconsideration was filed and counsel set for hearing the motion on January 19,
In its reply-letter, petitioner argued that under paragraph 1 of the lease contract, payment of rental 1989. During the hearing, counsel for the government was absent. The motion was
would commence on the date of the issuance of an industrial clearance by the Ministry of Human deemed abandoned but the court at any rate, after a review of the incidents and the
Settlements, and not from the date of signing of the contract. It then expressed its intention to terminate grounds relied upon in the earlier motion of defendant, found no reason to disturb
its previous order. 8
On 12 April 1989, the trial court rendered a decision ordering petitioner to pay private respondents the Moreover, the reason of petitioner in discontinuing with its project and in consequently cancelling the
amount of P492,000 which represented the rentals for two years, with legal interest from 7 January lease contract was "financial as well as technical difficulties," not the alleged insufficiency of the
1986 until the amount was fully paid, plus attorney's fees in the amount of P20,000 and costs. 9 Temporary Use Permit.
Petitioner then appealed to the Court of Appeals alleging that the trial court erred in ordering it to pay Second. Invoking Article 1266 and the principle of rebus sic stantibus, petitioner asserts that it should
private respondent the amount of P492,000 and in denying it the right to be heard. LLpr be released from the obligatory force of the contract of lease because the purpose of the contract did
not materialize due to unforeseen events and causes beyond its control, i.e., due to the abrupt change
Upon the affirmance of the trial court's decision 10 and the denial of its motion for reconsideration, in political climate after the EDSA Revolution and financial difficulties.
petitioner came to this Court ascribing to respondent Court of Appeals the same alleged errors and
reiterating their arguments. It is a fundamental rule that contracts, once perfected, bind both contracting parties, and obligations
arising therefrom have the force of law between the parties and should be complied with in good
First. Petitioner invites the attention of this Court to paragraph 1 of the lease contract, which reads: faith. 13 But the law recognizes exceptions to the principle of the obligatory force of contracts. One
"This lease shall be for a period of five (5) years, commencing on the date of issuance of the industrial exception is laid down in Article 1266 of the Civil Code,which reads: "The debtor in obligations to do
clearance by the Ministry of Human Settlements . . ." It then submits that the issuance of an industrial shall also be released when the prestation becomes legally or physically impossible without the fault of
clearance is a suspensive condition without which the rights under the contract would not be acquired. the obligor."
The Temporary Use Permit is not the industrial clearance referred to in the contract; for the said permit
requires that a clearance from the National Production Control Commission be first secured, and Petitioner cannot, however, successfully take refuge in the said article, since it is applicable only to
besides, there is a finding in the permit that the proposed project does not conform to the Zoning obligations "to do," and not to obligations "to give." 14 An obligation "to do" includes all kinds of work or
Ordinance of Rodriguez, (formerly Montalban), Rizal, where the leased property is located. Without the service; while an obligation "to give" is a prestation which consists in the delivery of a movable or an
industrial clearance the lease contract could not become effective and petitioner could not be compelled immovable thing in order to create a real right, or for the use of the recipient, or for its simple
to perform its obligation under the contract. possession, or in order to return it to its owner. 15
Petitioner is now estopped from claiming that the Temporary Use Permit was not the industrial The obligation to pay rentals 16 or deliver the thing in a contract of lease 17 falls within the prestation
clearance contemplated in the contract. In its letter dated 24 April 1986, petitioner states: "to give"; hence, it is not covered within the scope of Article 1266. At any rate, the unforeseen event and
causes mentioned by petitioner are not the legal or physical impossibilities contemplated in the said
We wish to reiterate PNCC Management's previous stand that it is only obligated to article. Besides, petitioner failed to state specifically the circumstances brought about by "the abrupt
pay your clients the amount of P20,000.00 as rental payments for the one-month change in the political climate in the country" except the alleged prevailing uncertainties in government
period of the lease, counted from 07 January 1986 when the Industrial Permit was policies on infrastructure projects.
issued by the Ministry of Human Settlements up to 07 February 1986 when the
Notice of Termination was served on your clients. 11 (Emphasis Supplied). The principle of rebus sic stantibus 18 neither fits in with the facts of the case. Under this theory, the
parties stipulate in the light of certain prevailing conditions, and once these conditions cease to exist,
The "Industrial Permit" mentioned in the said letter could only refer to the Temporary Use Permit issued the contract also ceases to exist. 19 This theory is said to be the basis of Article 1267 of the Civil
by the Ministry of Human Settlements on 7 January 1986. And it can be gleaned from this letter that Code,which provides:
petitioner has considered the permit as industrial clearance; otherwise, petitioner could have simply told
private respondents that its obligation to pay rentals has not yet arisen because the Temporary Use ART. 1267. When the service has become so difficult as to be manifestly beyond
Permit is not the industrial clearance contemplated by them. Instead, petitioner recognized its obligation the contemplation of the parties, the obligor may also be released therefrom, in
to pay rentals counted from the date the permit was issued. whole or in part.
Also worth noting is petitioner's earlier letter, thus:  
[P]lease be advised of PNCC Management's decision to cancel or discontinue with This article, which enunciates the doctrine of unforeseen events, is not, however, an absolute
the rock crushing project due to financial as well as technical difficulties. In view application of the principle of rebus sic stantibus, which would endanger the security of contractual
thereof, we would like to terminate our Lease Contract dated 18 November, 1985. relations. The parties to the contract must be presumed to have assumed the risks of unfavorable
Should you agree to the mutual termination of our Lease Contract, kindly indicate developments. It is therefore only in absolutely exceptional changes of circumstances that equity
your conformity hereto by affixing your signature on the space provided below. May demands assistance for the debtor. 20
we likewise request Messrs. Rene, Jose and Antonio, all surnamed Raymundo and
Mrs. Socorro A. Raymundo as Attorney-in-Fact of Amador S. Raymundo to sign on In this case, petitioner wants this Court to believe that the abrupt change in the political climate of the
the spaces indicated below. 12 country after the EDSA Revolution and its poor financial condition "rendered the performance of the
lease contract impractical and inimical to the corporate survival of the petitioner."
It can be deduced from this letter that the suspensive condition — issuance of industrial clearance —
has already been fulfilled and that the lease contract has become operative. Otherwise, petitioner did This Court cannot subscribe to this argument. As pointed out by private respondents: 21
not have to solicit the conformity of private respondents to the termination of the contract for the simple
It is a matter of record that petitioner PNCC entered into a contract with private
reason that no juridical relation was created because of the non-fulfillment of the condition.
respondents on November 18, 1985. Prior thereto, it is of judicial notice that after
the assassination of Senator Aquino on August 21, 1983, the country has
 experienced political upheavals, turmoils, almost daily mass demonstrations, reset "intransferable" to September 26 and October 17, 1988. 35 In the morning of 26 September 1988,
unprecedented, inflation, peace and order deterioration, the Aquino trial and many the court received Atty. Vega's Urgent Motion for Postponement on the ground that he was afflicted with
other things that brought about the hatred of people even against crony conjunctivitis or sore eyes. 36 This time, private respondents objected; and upon their motion, the court
corporations. On November 3, 1985, Pres. Marcos, being interviewed live on U.S. deemed terminated and waived the presentation of evidence for the petitioner. 37 Nevertheless, before
television announced that there would be a snap election scheduled for February 7, the court considered the case submitted for decision, it required the parties to submit their respective
1986. memoranda within thirty days. 38 But petitioner failed to comply.
On November 18, 1985, notwithstanding the above, petitioner PNCC entered into Likewise, the court was liberal with respect to petitioner's motion for reconsideration. Notwithstanding
the contract of lease with private respondents with open eyes of the deteriorating the lack of request for hearing and proof of notice and service to private respondents, the court set the
conditions of the country. hearing of the said motion on 29 November 1988. 39 Upon the denial of the said motion for lack of
merit, 40 petitioner filed a second motion for reconsideration. But during the hearing of the motion on a
Anent petitioner's alleged poor financial condition, the same will neither release petitioner from the date selected by him, Atty. Vega was absent for no reason at all, despite due notice. 41
binding effect of the contract of lease. As held in Central Bank v.Court of Appeals, 22 cited by private
respondents, mere pecuniary inability to fulfill an engagement does not discharge a contractual From the foregoing narration of procedural antecedents, it cannot be said that petitioner was deprived of
obligation, nor does it constitute a defense to an action for specific performance. cdta its day in court. The essence of due process is simply an opportunity to be heard. 42 To be heard does
not only mean oral arguments in court; one may be heard also through pleadings. Where opportunity to
With regard to the non-materialization of petitioner's particular purpose in entering into the contract of be heard, either through oral arguments or pleadings, is accorded, there is no denial of procedural due
lease, i.e., to use the leased premises as a site of a rock crushing plant, the same will not invalidate the process. 43
contract. The cause or essential purpose in a contract of lease is the use or enjoyment of a thing. 23 As
a general principle, the motive or particular purpose of a party in entering into a contract does not affect WHEREFORE, the instant petition is DENIED and the challenged decision of the Court of Appeals is
the validity nor existence of the contract; an exception is when the realization of such motive or AFFIRMED in toto. cdtech
particular purpose has been made a condition upon which the contract is made to depend. 24 The
exception does not apply here. No pronouncements as to costs.

Third. According to petitioner, the award of P492,000.00 representing the rent for two years is SO ORDERED.
excessive, considering that it did not benefit from the property. Besides, the temporary permit,
||| (Philippine National Construction Corp. v. Court of Appeals, G.R. No. 116896, [May 5, 1997], 338
conformably with the express provision therein, was deemed automatically revoked for failure of
petitioner to use the same within one year from the issuance thereof. Hence, the rent payable should PHIL 691-704)
only be for one year.
Petitioner cannot be heard to complain that the award is excessive. The temporary permit was valid for
two years but was automatically revoked because of its non-use within one year from its issuance. The
non-use of the permit and the non-entry into the property subject of the lease contract were both
imputable to petitioner and cannot, therefore, be taken advantage of in order to evade or lessen
petitioner's monetary obligation. The damage or prejudice to private respondents is beyond dispute.
They unquestionably suffered pecuniary losses because of their inability to use the leased premises.
Thus, in accordance with Article 1659 of the Civil Code, 25they are entitled to indemnification for
damages; and the award of P492,000.00 is fair and just under the circumstances of the case.
Finally, petitioner submits that the trial court gravely abused its discretion in denying petitioner the right
to be heard.
We disagree. The trial court was in fact liberal in granting several postponements 26 to petitioner before
it deemed terminated and waived the presentation of evidence in petitioner's behalf.
It must be recalled that private respondents rested their case on 7 September 1987 yet. 27 Almost a
year after, or on 10 August 1988 when it was petitioner's turn to present evidence, petitioner's counsel
asked for postponement of the hearing to 25 August 1988 due to conflict of schedules, 28 and this was
granted. 29 At the rescheduled hearing, petitioner's counsel, through a representative, moved anew for
postponement, as he was allegedly indisposed. 30 The case was then reset "intransferable" to
September 15 and 26, 1988. 31 On 2 September 1988, the Office of the Government Corporate
Counsel, through Atty. Elpidio J. Vega, entered its appearance for the petitioner, 32 and later the
original counsel withdrew his appearance. 33 On 15 September 1988, Atty. Vega requested for
postponement to enable him to go over the records of the case. 34 With his conformity, the hearing was
[G.R. No. 107112. February 24, 1994.] other conditions in the same provision, to wit: ". . . it being understood that this contract shall terminate
when for any reason whatsoever, the party of the second part (private respondent) is forced to stop,
abandoned (sic) its operation as a public service and it becomes necessary to remove the electric light
NAGA TELEPHONE CO., INC. (NATELCO) AND LUCIANO M. post (sic);" which are casual conditions since they depend on chance, hazard, or the will of a third
MAGGAY,  petitioners,  vs. THE COURT OF APPEALS AND CAMARINES SUR II person. In sum, the contract is subject to mixed conditions, that is, they depend partly on the will of the
ELECTRIC COOPERATIVE, INC. (CASURECO II), respondents. debtor and partly on chance, hazard or the will of a third person, which do not invalidate the
aforementioned provision.

SYLLABUS 4. ID.; PRESCRIPTION OF ACTIONS; RULE ON WRITTEN CONTRACT. — Article 1144 of the New
Civil Code provides, inter alia, that an action upon a written contract must be brought within ten (10)
years from the time the right of the action accrues. Clearly, the ten (10) year period is to be
1. CIVIL LAW; OBLIGATION AND CONTRACTS; RULE WHERE A PERSON BY HIS CONTRACT reckoned from the time the right of action accrues which is not necessarily the date of execution of the
CHARGES HIMSELF WITH AN OBLIGATION POSSIBLE TO BE PERFORMED. — The case of Reyes contract. As correctly ruled by respondent court, private respondent's right of action arose "sometime
v. Caltex (Philippines), Inc. enunciated the doctrine that where a person by his contract charges himself during the latter part of 1982 or in 1983 when according to Atty. Luis General, Jr. . . ., he was asked by
with an obligation possible to be performed, he must perform it, unless its performance is rendered (private respondent's) Board of Directors to study said contract as it already appeared disadvantageous
impossible by the act of God, by the law, or by the other party, it being the rule that in case the party to (private respondent). (Private respondent's) cause of action to ask for reformation of said contract
desires to be excused from performance in the event of contingencies arising thereto, it is his duty to should thus be considered to have arisen only in 1982 or 1983, and from 1982 to January 2, 1989 when
provide the basis therefor in his contract. With the enactment of the New Civil Code, a new provision the complaint in this case was filed, ten (10) years had not yet elapsed."
was included therein namely, Article 1267 which provides: "When the service has become so difficult as
to be manifestly beyond the contemplation of the parties, the obligor may also be released therefrom, in
whole or in part." In the report of the Code Commission, the rationale behind this innovation was
explained, thus: "The general rule is that impossibility of performance releases the obligor. However, it DECISION
is submitted that when the service has become so difficult as to be manifestly beyond the contemplation
of the parties, the court should be authorized to release the obligor in whole or in part. The intention of
the parties should govern and if it appears that the service turns out to be so difficult as to have been
beyond their contemplation, it would be doing violence to that intention to hold the obligor still NOCON, J  p:
responsible." In other words, fair and square consideration underscores the legal precept therein.
2. ID.; ID.; "SERVICE" UNDER ART. 1267 REFERS TO THE PERFORMANCE OF AN OBLIGATION; The case of Reyes v. Caltex (Philippines), Inc. 1 enunciated the doctrine that where a person by his
CASE AT BAR. — Petitioners assert earnestly that Article 1267 of the New Civil Code is not applicable contract charges himself with an obligation possible to be performed, he must perform it, unless its
primarily because the contract does not involve the rendition of service or a personal prestation and it is performance is rendered impossible by the act of God, by the law, or by the other party, it being the rule
not for future service with future unusual change. Instead, the ruling in the case Occeña, et al. v. that in case the party desires to be excused from performance in the event of contingencies arising
Jabson, etc, et al., (G.R. No. L-44349, October 29, 1976, 73 SCRA 637) which interpreted the article, thereto, it is his duty to provide the basis therefor in his contract. LibLex
should be followed in resolving this case. Besides, said article was never raised by the parties in their With the enactment of the New Civil Code, a new provision was included therein namely, Article 1267
pleadings and was never the subject of trial and evidence. Article 1267 speaks of "service" which has which provides:
become so difficult. Taking into consideration the rationale behind this provision,  the term "service"
should be understood as referring to the "performance" of the obligation. In the present case, the "When the service has become so difficult as to be manifestly beyond the
obligation of private respondent consists in allowing petitioners to use its posts in Naga City, which is contemplation of the parties, the obligor may also be released therefrom, in whole
the service contemplated in said article. Furthermore, a bare reading of this article reveals that it is not a or in part."
requirement thereunder that the contract be for future service with future unusual change. According to
Senator Arturo M. Tolentino, Article 1267 states in our law the doctrine of unforeseen events. This is In the report of the Code Commission, the rationale behind this innovation was explained, thus:
said to be based on the discredited theory of rebus sic stantibus in public international law; under this
"The general rule is that impossibility of performance releases the obligor.
theory, the parties stipulate in the light of certain prevailing conditions, and once these conditions cease
However, it is submitted that when the service has become so difficult as to be
to exist the contract also ceases to exist. Considering practical needs and the demands of equity and
manifestly beyond the contemplation of the parties, the court should be authorized
good faith, the disappearance of the basis of a contract gives rise to a right to relief in favor of the party
to release the obligor in whole or in part. The intention of the parties should govern
prejudiced.
and if it appears that the service turns out to be so difficult as to have been beyond
3. ID.; ID.; POTESTATIVE CONDITION; MEANING THEREOF; APPLICATION IN CASE AT BAR. — A their contemplation, it would be doing violence to that intention to hold the obligor
potestative condition is a condition, the fulfillment of which depends upon the sole will of the debtor, in still responsible." 2
which case, the conditional obligation is void. Based on this definition, respondent court's finding that
In other words, fair and square consideration underscores the legal precept therein.
the provision in the contract, to wit: "(a) That the term or period of this contract shall be as long as the
party of the first part (petitioner) has need for the electric light posts of the party of the second part
(private respondent) . . ." is a potestative condition, is correct. However, it must have overlooked the
Naga Telephone Co., Inc. remonstrates mainly against the application by the Court of Appeals of Article respondent for the use thereof the total amount of P267,960.00 from 1981 up to the filing of its
1267 in favor of Camarines Sur II Electric Cooperative, Inc. in the case before us. Stated differently, the complaint; and that petitioners had refused to pay private respondent said amount despite demands.
former insists that the complaint should have been dismissed for failure to state a cause of action. prLL
And as third cause of action, private respondent complained about the poor servicing by petitioners of
The antecedent facts, as narrated by respondent Court of Appeals are, as follows: the ten (10) telephone units which had caused it great inconvenience and damages to the tune of not
less than P100,000.00
Petitioner Naga Telephone Co., Inc. (NATELCO) is a telephone company rendering local as well as
long distance service in Naga City while private respondent Camarines Sur II Electric Cooperative, Inc. In petitioners' answer to the first cause of action, they averred that it should be dismissed because (1) it
(CASURECO II) is a private corporation established for the purpose of operating an electric power does not sufficiently state a cause of action for reformation of contract; (2) it is barred by prescription,
service in the same city. the same having been filed more than ten (10) years after the execution of the contract; and (3) it is
barred by estoppel, since private respondent seeks to enforce the contract in the same action.
On November 1, 1977, the parties entered into a contract (Exh. "A") for the use by petitioners in the Petitioners further alleged that their utilization of private respondent's post could not have caused their
operation of its telephone service the electric light posts of private respondent in Naga City. In deterioration because they have already been in use for eleven (11) years; and that the value of their
consideration therefor, petitioners agreed to install, free of charge, ten (10) telephone connections for expenses for the ten (10) telephone lines long enjoyed by private respondent free of charge are far in
the use by private respondent in the following places: excess of the amounts claimed by the latter for the use of the posts, so that if there was any inequity, it
was suffered by them.
"(a) 3 units — The Main Office of (private respondent);
Regarding the second cause of action, petitioners claimed that private respondent had asked for
(b) 2 Units — The Warehouse of (private respondent);
telephone lines in areas outside Naga City for which its posts were used by them; and that if petitioners
(c) 1 Unit — The Sub-Station of (private respondent) at Concepcion Pequeña; had refused to comply with private respondent's demands for payment for the use of the posts outside
Naga City, it was probably because what is due to them from private respondent is more than its claim
(d) 1 Unit — The Residence of (private respondent's) President; against them.
(e) 1 Unit — The Residence of (private respondent's) Acting General Manager; & And with respect to the third cause of action, petitioners claimed, inter alia, that their telephone service
had been categorized by the National Telecommunication Corporation (NTC) as "very high" and of
(f) 2 Units — To be determined by the General Manager. 3 "superior quality."
Said contract also provided: During the trial, private respondent presented the following witnesses:
"(a) That the term or period of this contract shall be as long as the party of the first
part has need for the electric light posts of the party of the second part it being (1) Dioscoro Ragragio, one of the two officials who signed the contract in its behalf, declared that it was
understood that this contract shall terminate when for any reason whatsoever, the petitioner Maggay who prepared the contract; that the understanding between private respondent and
party of the second part is forced to stop, abandoned [sic] its operation as a public petitioners was that the latter would only use the posts in Naga City because at that time, petitioners'
service and it becomes necessary to remove the electric lightpost;" (sic) 4 capability was very limited and they had no expectation of expansion because of legal squabbles within
the company; that private respondent agreed to allow petitioners to use its posts in Naga City because
It was prepared by or with the assistance of the other petitioner, Atty. Luciano M. Maggay, then a there were many subscribers therein who could not be served by them because of lack of facilities; and
member of the Board of Directors of private respondent and at the same time the legal counsel of that while the telephone lines strung to the posts were very light in 1977, said posts have become
petitioner. heavily loaded in 1989. LLphil
After the contract had been enforced for over ten (10) years, private respondent filed on January 2, (2) Engr. Antonio Borja, Chief of private respondent's Line Operation and Maintenance Department,
1989 with the Regional Trial Court of Naga City (Br. 28) C.C. No. 89-1642 against petitioners for declared that the posts being used by petitioners totalled 1,403 as of April 17, 1989, 192 of which were
reformation of the contract with damages, on the ground that it is too one-sided in favor of petitioners; in the towns of Pili, Canaman, and Magarao, all outside Naga City (Exhs. "B" and "B-1"); that
that it is not in conformity with the guidelines of the National Electrification Administration (NEA) which petitioners' cables strung to the posts in 1989 are much bigger than those in November, 1977; that in
direct that the reasonable compensation for the use of the posts is P10.00 per post, per month; that 1987, almost 100 posts were destroyed by typhoon Sisang: around 20 posts were located between
after eleven (11) years of petitioners' use of the posts, the telephone cables strung by them thereon Naga City and the town of Pili while the posts in barangay Concepcion, Naga City were broken at the
have become much heavier with the increase in the volume of their subscribers, worsened by the fact middle which had been bored by petitioner's linemen to enable them to string bigger telephone lines;
that their linemen bore holes through the posts at which points those posts were broken during that while the cost per post in 1977 was only from P700.00 to P1,000.00, their costs in 1989 went up
typhoons; that a post now costs as much as P2,630.00; so that justice and equity demand that the from P1,500.00 to P2,000.00, depending on the size; that some lines that were strung to the posts did
contract be reformed to abolish the inequities thereon. prLL not follow the minimum vertical clearance required by the National Building Code, so that there were
cases in 1988 where, because of the low clearance of the cables, passing trucks would accidentally
  touch said cables causing the posts to fall and resulting in brown-outs until the electric lines were
As second cause of action, private respondent alleged that starting with the year 1981, petitioners have repaired.
used 319 posts in the towns of Pili, Canaman, Magarao and Milaor, Camarines Sur, all outside Naga (3) Dario Bernardez, Project Supervisor and Acting General Manager of private respondent and
City, without any contract with it; that at the rate of P10.00 per post, petitioners should pay private Manager of Region V of NEA, declared that according to NEA guidelines in 1985 (Exh. "C"), for the use
by private telephone systems of electric cooperatives' posts, they should pay a minimum monthly rental when it was entered into by them during the first year of private respondent’s operation and when its
of P4.00 per post, and considering the escalation of prices since 1985, electric cooperatives have been Board of Directors did not yet have any experience in that business, it had become disadvantageous
charging from P10.00 to P15.00 per post, which is what petitioners should pay for the use of the posts. and unfair to private respondent because of subsequent events and conditions, particularly the increase
in the volume of the subscribers of petitioners for more than ten (10) years without the corresponding
(4) Engineer Antonio Macandog, Department Head of the Office of Services of private respondent, increase in the number of telephone connections to private respondent free of charge. The trial court
testified on the poor service rendered by petitioners' telephone lines, like the telephone in their concluded that while in an action for reformation of contract, it cannot make another contract for the
Complaints Section which was usually out of order such that they could not respond to the calls of their parties, it can, however, for reasons of justice and equity, order that the contract be reformed to abolish
customers. In case of disruption of their telephone lines, it would take two to three hours for petitioners the inequities therein. Thus, said court ruled that the contract should be reformed by ordering petitioners
to reactivate them notwithstanding their calls on the emergency line. to pay private respondent compensation for the use of their posts in Naga City, while private respondent
should also be ordered to pay the monthly bills for the use of the telephones also in Naga City. And
(5) Finally, Atty. Luis General, Jr., private respondent's counsel, testified that the Board of Directors
taking into consideration the guidelines of the NEA on the rental of posts by telephone companies and
asked him to study the contract sometime during the latter part of 1982 or in 1983, as it had appeared
the increase in the costs of such posts, the trial court opined that a monthly rental of P10.00 for each
very disadvantageous to private respondent. Notwithstanding his recommendation for the filing of a
post of private respondent used by petitioners is reasonable, which rental it should pay from the filing of
court action to reform the contract, the former general managers of private respondent wanted to adopt
the complaint in this case on January 2, 1989. And in like manner, private respondent should pay
a soft approach with petitioners about the matter until the term of General Manager Henry Pascual who,
petitioners from the same date its monthly bills for the use and transfers of its telephones in Naga City
after failing to settle the matter amicably with petitioners, finally agreed for him to file the present action
at the same rate that the public are paying. cdll
for reformation of contract.
On private respondent's second cause of action, the trial court found that the contract does not mention
On the other hand, petitioner Maggay testified to the following effect:
anything about the use by petitioners of private respondent's posts outside Naga City. Therefore, the
(1) It is true that he was a member of the Board of Directors of private respondent and at the same time trial court held that for reason of equity, the contract should be reformed by including therein the
the lawyer of petitioner when the contract was executed, but Atty. Gaudioso Tena, who was also a provision that for the use of private respondent's posts outside Naga City, petitioners should pay a
member of the Board of Directors of private respondent, was the one who saw to it that the contract was monthly rental of P10.00 per post, the payment to start on the date this case was filed, or on January 2,
fair to both parties. 1989, and private respondent should also pay petitioners the monthly dues on its telephone connections
located outside Naga City beginning January, 1989.
(2) With regard to the first cause of action:
 
(a) Private respondent has the right under the contract to use ten (10) telephone units of petitioners for
as long as it wishes without paying anything therefor except for long distance calls through PLDT out of And with respect to private respondent's third cause of action, the trial court found the claim not
which the latter get only 10% of the charges. LLpr sufficiently proved.

(b) In most cases, only drop wires and not telephone cables have been strung to the posts, which posts Thus, the following decretal portion of the trial court's decision dated July 20, 1990:
have remained erect up to present;
"WHEREFORE, in view of all the foregoing, decision is hereby rendered ordering
(c) Petitioners' linemen have strung only small messenger wires to many of the posts and they need the reformation of the agreement (Exh. A); ordering the defendants to pay plaintiff's
only small holes to pass through; and electric poles in Naga City and in the towns of Milaor, Canaman, Maragao and Pili,
Camarines Sur and in other places where defendant NATELCO uses plaintiff's
(d) Documents existing in the NTC show that the stringing of petitioners' cables in Naga City are electric poles, the sum of TEN (P10.00) PESOS per plaintiff's pole, per month
according to standard and comparable to those of PLDT. The accidents mentioned by private beginning January, 1989 and ordering also the plaintiff to pay defendant NATELCO
respondent involved trucks that were either overloaded or had loads that protruded upwards, causing the monthly dues of all its telephones including those installed at the residence of
them to hit the cables. its officers, namely; Engr. Joventino Cruz, Engr. Antonio Borja, Engr. Antonio
Macandog, Mr. Jesus Opiana and Atty. Luis General, Jr. beginning January, 1989.
(3) Concerning the second cause of action, the intention of the parties when they entered into the Plaintiff's claim for attorney's fees and expenses of litigation and defendants'
contract was that the coverage thereof would include the whole area serviced by petitioners because at counterclaim are both hereby ordered dismissed. Without pronouncement as to
that time, they already had subscribers outside Naga City. Private respondent, in fact, had asked for costs." llcd
telephone connections outside Naga City for its officers and employees residing there in addition to the
ten (10) telephone units mentioned in the contract. Petitioners have not been charging private Disagreeing with the foregoing judgment, petitioners appealed to respondent Court of Appeals. In
respondent for the installation, transfers and re-connections of said telephones so that naturally, they the decision dated May 28, 1992, respondent court affirmed the decision of the trial court, 5 but
use the posts for those telephone lines. based on different grounds to wit: (1) that Article 1267 of the New Civil Code is applicable and (2)
that the contract was subject to a potestative condition which rendered said condition void. The
(4) With respect to the third cause of action, the NTC has found petitioners’ cable installations to be in motion for reconsideration was denied in the resolution dated September 10, 1992. 6 Hence, the
accordance with engineering standards and practice and comparable to the best in the country. present petition.
On the basis of the foregoing countervailing evidence of the parties, the trial court found, as regards Petitioners assign the following pertinent errors committed by respondent court:
private respondent’s first cause of action, that while the contract appeared to be fair to both parties
 1) in making a contract for the parties by invoking Article 1267 of the New Civil were no complaints on the part of both sides at the time of and after the execution
Code; of said contract, and according to 73-year old Justino de Jesus, Vice President and
General manager of appellant at the time who signed the agreement Exh. "A" in its
2) in ruling that prescription of the action for reformation of the contract in this case behalf and who was one of the witnesses for the plaintiff (sic), both parties
commenced from the time it became disadvantageous to private respondent; and complied with said contract 'from the very beginning' (p. 5, tsn, April 17, 1989).
3) in ruling that the contract was subject to a potestative condition in favor of That the aforesaid contract has become iniquitous or unfavorable or
petitioners. disadvantageous to the plaintiff with the expansion of the business of appellant and
the increase in the volume of its subscribers in Naga City and environs through the
Petitioners assert earnestly that Article 1267 of the New Civil Code is not applicable primarily because
years, necessitating the stringing of more and bigger telephone cable wires by
the contract does not involve the rendition of service or a personal prestation and it is not for future
appellant to plaintiff's electric posts without a corresponding increase in the ten (10)
service with future unusual change. Instead, the ruling in the case Occeña, et al. v. Jabson, etc, et
telephone connections given by appellant to plaintiff free of charge in the
al., 7 which interpreted the article, should be followed in resolving this case. Besides, said article was
agreement Exh. "A" as consideration for its use of the latter's electric posts in Naga
never raised by the parties in their pleadings and was never the subject of trial and evidence.
City, appear, however, undisputed from the totality of the evidence on record and
In applying Article 1267, respondent court rationalized: the lower court so found. And it was for this reason that in the later (sic) part of
1982 or 1983 (or five or six years after the subject agreement was entered into by
"We agree with appellant that in order that an action for reformation of contract the parties), plaintiff's Board of Directors already asked Atty. Luis General who had
would lie and may prosper, there must be sufficient allegations as well as proof that become their legal counsel in 1982, to study said agreement which they believed
the contract in question failed to express the true intention of the parties due to had become disadvantageous to their company and to make the proper
error or mistake, accident, or fraud. Indeed, in embodying the equitable remedy of recommendation, which study Atty. General did, and thereafter, he already
reformation of instruments in the New Civil Code, the Code Commission gave its recommended to the Board the filing of a court action to reform said contract, but
reasons as follows: no action was taken on Atty. General's recommendation because the former
general managers of plaintiff wanted to adopt a soft approach in discussing the
'Equity dictates the reformation of an instrument in order that the true matter with appellant, until, during the term of General Manager Henry Pascual, the
intention of the contracting parties may be expressed. The courts by the latter, after failing to settle the problem with Atty. Luciano Maggay who had become
reformation do not attempt to make a new contract for the parties, but to the president and general manager of appellant, already agreed for Atty. General's
make the instrument express their real agreement. The rationale of the filing of the present action. The fact that said contract has become iniquitous or
doctrine is that it would be unjust and inequitable to allow the enforcement disadvantageous to plaintiff as the years went by did not, however, give plaintiff a
of a written instrument which does not reflect or disclose the real meeting cause of action for reformation of said contract, for the reasons already pointed out
of the minds of the parties. The rigor of the legalistic rule that a written earlier. But this does not mean that plaintiff is completely without a remedy, for we
instrument should be the final and inflexible criterion and measure of the believe that the allegations of its complaint herein and the evidence it has
rights and obligations of the contracting parties is thus tempered to presented sufficiently make out a cause of action under Art. 1267 of the New Civil
forestall the effects of mistake, fraud, inequitable conduct, or accident.' Code for its release from the agreement in question. LibLex
(pp. 55-56, Report of Code Commission)
xxx xxx xxx
Thus, Articles 1359, 1361, 1362, 1363 and 1364 of the New Civil Code provide in
essence that where through mistake or accident on the part of either or both of the The understanding of the parties when they entered into the Agreement Exh. "A" on
parties or mistake or fraud on the part of the clerk or typist who prepared the November 1, 1977 and the prevailing circumstances and conditions at the time,
instrument, the true intention of the parties is not expressed therein, then the were described by Dioscoro Ragragio, the President of plaintiff in 1977 and one of
instrument may be reformed at the instance of either party if there was mutual its two officials who signed said agreement in its behalf, as follows:
mistake on their part, or by the injured party if only he was mistaken. cdphil
'Our understanding at that time is that we will allow NATELCO to utilize
Here, plaintiff-appellee did not allege in its complaint, nor does its evidence prove, the posts of CASURECO II only in the City of Naga because at that time
that there was a mistake on its part or mutual mistake on the part of both parties the capability of NATELCO was very limited, as a matter of fact we do [sic]
when they entered into the agreement Exh. "A", and that because of this mistake, not expect to be able to expand because of the legal squabbles going on
said agreement failed to express their true intention. Rather, plaintiff's evidence in the NATELCO. So, even at that time there were so many subscribers in
shows that said agreement was prepared by Atty. Luciano Maggay, then a member Naga City that cannot be served by the NATELCO, so as a matter of
of plaintiff's Board of Directors and its legal counsel at that time, who was also the public service we allowed them to sue (sic) our posts within the Naga City.'
legal counsel for defendant-appellant, so that as legal counsel for both companies (p. 8, tsn April 3, 1989)
and presumably with the interests of both companies in mind when he prepared the
aforesaid agreement, Atty. Maggay must have considered the same fair and Ragragio also declared that while the telephone wires strung to the electric posts of
equitable to both sides, and this was affirmed by the lower court when it found said plaintiff were very light and that very few telephone lines were attached to the posts
contract to have been fair to both parties at the time of its execution. In fact, there
 of CASURECO II in 1977, said posts have become 'heavily loaded' in 1989 (tsn, of this article reveals that it is not a requirement thereunder that the contract be for future service with
id.). future unusual change. According to Senator Arturo M. Tolentino, 10 Article 1267 states in our law the
doctrine of unforeseen events. This is said to be based on the discredited theory of rebus sic
In truth, as also correctly found by the lower court, despite the increase in the stantibus in public international law; under this theory, the parties stipulate in the light of certain
volume of appellant's subscribers and the corresponding increase in the telephone prevailing conditions, and once these conditions cease to exist the contract also ceases to exist.
cables and wires strung by it to plaintiff's electric posts in Naga City for the more 10 Considering practical needs and the demands of equity and good faith, the disappearance of the basis
years that the agreement Exh. "A" of the parties has been in effect, there has been of a contract gives rise to a right to relief in favor of the party prejudiced.
no corresponding increase in the ten (10) telephone units connected by appellant
free of charge to plaintiff's offices and other places chosen by plaintiff's general In a nutshell, private respondent in the Occeña case filed a complaint against petitioner before the trial
manager which was the only consideration provided for in said agreement for court praying for modification  of the terms and conditions of the contract that they entered into by fixing
appellant's use of plaintiff's electric posts. Not only that, appellant even started the proper shares that should pertain to them out of the gross proceeds from the sales of subdivided
using plaintiff's electric posts outside Naga City although this was not provided for lots. We ordered the dismissal of the complaint therein for failure to state a sufficient cause of action.
in the agreement Exh. "A" as it extended and expanded its telephone services to We rationalized that the Court of Appeals misapplied Article 1267 because:
towns outside said city. Hence, while very few of plaintiff's electric posts were being
used by appellant in 1977 and they were all in the City of Naga, the number of ". . . respondent's complaint seeks not release from the subdivision contract but
plaintiff's electric posts that appellant was using in 1989 had jumped to 1,403,192 that the court 'render judgment modifying the terms and conditions of the
of which are outside Naga City (Exh. "B"). Add to this the destruction of some of contract . . . by fixing the proper shares that should pertain to the herein parties out
plaintiff's poles during typhoons like the strong typhoon Sisang in 1987 because of of the gross proceeds from the sales of subdivided lots of subject subdivision'. The
the heavy telephone cables attached thereto, and the escalation of the costs of cited article (Article 1267) does not grant the courts (the) authority to remake,
electric poles from 1977 to 1989, and the conclusion is indeed ineluctable that the modify or revise the contract or to fix the division of shares between the parties as
agreement Exh. "A" has already become too one-sided in favor of appellant to the contractually stipulated with the force of law between the parties, so as to substitute
great disadvantage of plaintiff, in short, the continued enforcement of said contract its own terms for those covenanted by the parties themselves. Respondent's
has manifestly gone far beyond the contemplation of plaintiff, so much so that it complaint for modification of contract manifestly has no basis in law and therefore
should now be released therefrom under Art. 1267 of the New Civil Code to avoid states no cause of action. Under the particular allegations of respondent's
appellant's unjust enrichment at its (plaintiff's) expense. As stated by Tolentino in complaint and the circumstances therein averred, the courts cannot even in equity
his commentaries on the Civil Code citing foreign civilist Ruggiero, 'equity demands the relief sought." 11
a certain economic equilibrium between the prestation and the counter-prestation,
The ruling in the Occeña case is not applicable because we agree with respondent court that the
and does not permit the unlimited impoverishment of one party for the benefit of the
allegations in private respondent's complaint and the evidence it has presented sufficiently made
other by the excessive rigidity of the principle of the obligatory force of contracts (IV
out a cause of action under Article 1267. We, therefore, release the parties from their correlative
Tolentino, Civil Code of the Philippines, 1986 ed., pp. 247-248). LexLib
obligations under the contract. However, our disposition of the present controversy does not end
  here. We have to take into account the possible consequences of merely releasing the parties
therefrom: petitioners will remove the telephone wires/cables in the posts of private respondent,
We therefore, find nothing wrong with the ruling of the trial court, although based on resulting in disruption of their essential service to the public; while private respondent, in
a different and wrong premise (i.e., reformation of contract), that from the date of consonance with the contract 12 will return all the telephone units to petitioners, causing prejudice
the filing of this case, appellant must pay for the use of plaintiff's electric posts in to its business. We shall not allow such eventuality. Rather, we require, as ordered by the trial
Naga City at the reasonable monthly rental of P10.00 per post, while plaintiff should court: 1) petitioners to pay private respondent for the use of its posts in Naga City and in the towns
pay appellant for the telephones in the same City that it was formerly using free of of Milaor, Canaman, Magarao and Pili, Camarines Sur and in other places where petitioners use
charge under the terms of the agreement Exh. "A" at the same rate being paid by private respondent's posts, the sum of ten (P10.00) pesos per post, per month, beginning January,
the general public. In affirming said ruling, we are not making a new contract for the 1989; and 2) private respondent to pay petitioner the monthly dues of all its telephones at the same
parties herein, but we find it necessary to do so in order not to disrupt the basic and rate being paid by the public beginning January, 1989. The peculiar circumstances of the present
essential services being rendered by both parties herein to the public and to avoid case, as distinguished further from the Occeña case, necessitates exercise of our equity
unjust enrichment by appellant at the expense of plaintiff, said arrangement to jurisdiction. 13 By way of emphasis, we reiterate the rationalization of respondent court that: cdll
continue only until such time as said parties can re-negotiate another agreement
". . . In affirming said ruling, we are not making a new contract for the parties
over the same subject-matter covered by the agreement Exh. "A". Once said
herein, but we find it necessary to do so in order not to disrupt the basic and
agreement is reached and executed by the parties, the aforesaid ruling of the lower
essential services being rendered by both parties herein to the public and to avoid
court and affirmed by us shall cease to exist and shall be substituted and
unjust enrichment by appellant at the expense of plaintiff . . . ." 1 4
superseded by their new agreement. . . ." 8
Petitioners' assertion that Article 1267 was never raised by the parties in their pleadings and was never
Article 1267 speaks of "service" which has become so difficult. Taking into consideration the rationale
the subject of trial and evidence has been passed upon by respondent court in its well reasoned
behind this provision, 9 the term "service" should be understood as referring to the "performance" of the
resolution, which we hereunder quote as our own:
obligation. In the present case, the obligation of private respondent consists in allowing petitioners to
use its posts in Naga City, which is the service contemplated in said article. Furthermore, a bare reading
"First, we do not agree with defendant-appellant that in applying Art. 1267 of the this Court to relax the well-entrenched rule that, except questions on
New Civil Code to this case, we have changed its theory and decided the same on jurisdiction, no question will be entertained on appeal unless it has been
an issue not invoked by plaintiff in the lower court. For basically, the main and raised in the court below and it is within the issues made by the parties in
pivotal issue in this case is whether the continued enforcement of the contract Exh. their pleadings (Cordero v. Cabral, L-36789, July 25, 1983, 123 SCRA
"A" between the parties has, through the years (since 1977), become too iniquitous 532). . . .'
or disadvantageous to the plaintiff and too one-sided in favor of defendant-
appellant, so that a solution must be found to relieve plaintiff from the continued  
operation of said agreement and to prevent defendant-appellant from further
We believe that the above authorities suffice to show that this Court did not err in
unjustly enriching itself at plaintiff's expense. It is indeed unfortunate that defendant
applying Art. 1267 of the New Civil Code to this case. Defendant-appellant stresses
had turned deaf ears to plaintiff's requests for renegotiation, constraining the latter
that the applicability of said provision is a question of fact, and that it should have
to go to court. But although plaintiff cannot, as we have held, correctly invoke
been given the opportunity to present evidence on said question. But defendant-
reformation of contract as a proper remedy (there having been no showing of a
appellant cannot honestly and truthfully claim that it (did) not (have) the opportunity
mistake or error in said contract on the part of any of the parties so as to result in its
to present evidence on the issue of whether the continued operation of the contract
failure to express their true intent), this does not mean that plaintiff is absolutely
Exh. "A" has now become too one-sided in its favor and too iniquitous, unfair, and
without a remedy in order to relieve itself from a contract that has gone far beyond
disadvantageous to plaintiff. As held in our decision, the abundant and copious
its contemplation and has become highly iniquitous and disadvantageous to it
evidence presented by both parties in this case and summarized in said decision
through the years because of the expansion of defendant-appellant's business and
established the following essential and vital facts which led us to apply Art. 1267 of
the increase in the volume of its subscribers. And as it is the duty of the Court to
the New Civil Code to this case: Cdpr
administer justice, it must do so in this case in the best way and manner it can in
the light of the proven facts and the law or laws applicable thereto. cdphil xxx xxx xxx." 15
It is settled that when the trial court decides a case in favor of a party on a certain On the issue of prescription of private respondent's action for reformation of contract, petitioners allege
ground, the appellate court may uphold the decision below upon some other point that respondent court's ruling that the right of action "arose only after said contract had already become
which was ignored or erroneously decided by the trial court (Garcia Valdez v. disadvantageous and unfair to it due to subsequent events and conditions, which must be sometime
Tuazon, 40 Phil. 943; Relativo v. Castro, 76 Phil. 563; Carillo v. Salak de Paz, 18 during the latter part of 1982 or in 1983 . . ." 16 is erroneous. In reformation of contracts, what is
SCRA 467). Furthermore, the appellate court has the discretion to consider an reformed is not the contract itself, but the instrument embodying the contract. It follows that whether the
unassigned error that is closely related to an error properly assigned (Paterno v. contract is disadvantageous or not irrelevant to reformation and therefore, cannot be an element in the
Jao Yan, 1 SCRA 631; Hernandez v. Andal, 78 Phil. 196). It has also been held determination of the period for prescription of the action to reform.
that the Supreme Court (and this Court as well) has the authority to review matters,
even if they are not assigned as errors in the appeal, if it is found that their Article 1144 of the New Civil Code provides, inter alia, that an action upon a written contract must be
consideration is necessary in arriving at a just decision of the case (Saura Import & brought within ten (10) years from the time the right of the action accrues. Clearly, the ten (10) year
Export Co., Inc. v. Phil. International Surety Co. and PNB, 8 SCRA 143). For it is period is to be reckoned from the time the right of action accrues  which is not necessarily the date of
the material allegations of fact in the complaint, not the legal conclusion made execution of the contract. As correctly ruled by respondent court, private respondent's right of action
therein or the prayer, that determines the relief to which the plaintiff is entitled, and arose "sometime during the latter part of 1982 or in 1983 when according to Atty. Luis General, Jr. . . .,
the plaintiff is entitled to as much relief as the facts warrant although that relief is he was asked by (private respondent's) Board of Directors to study said contract as it already appeared
not specifically prayed for in the complaint (Rosales v. Reyes and Ordoveza, 25 disadvantageous to (private respondent) (p. 31, tsn, May 8, 1989). (Private respondent's) cause of
Phil. 495; Cabigao v. Lim, 50 Phil. 844; Baguioro v. Barrios, 77 Phil. 120). To quote action to ask for reformation of said contract should thus be considered to have arisen only in 1982 or
an old but very illuminating decision of our Supreme Court through the pen of 1983, and from 1982 to January 2, 1989 when the complaint in this case was filed, ten (10) years had
American jurist Adam C. Carson: not yet elapsed." 17

'Under our system of pleading it is the duty of the courts to grant the relief Regarding the last issue, petitioners allege that there is nothing purely potestative about the prestations
to which the parties are shown to be entitled by the allegations in their of either party because petitioner's permission for free use of telephones is not made to depend purely
pleadings and the facts proven at the trial, and the mere fact that they on their will, neither is private respondent's permission for free use of its posts dependent purely on its
themselves misconstrue the legal effects of the facts thus alleged and will. llcd
proven will not prevent the court from placing the just construction thereon
and adjudicating the issues accordingly.' (Alzua v. Johnson, 21 Phil. 308) Apart from applying Article 1267, respondent court cited another legal remedy available to private
respondent under the allegations of its complaint and the preponderant evidence presented by it:
And in the fairly recent case of Caltex Phil. Inc. v. IAC, 176 SCRA 741, the
Honorable Supreme Court also held: ". . . we believe that the provision in said agreement —

'We rule that the respondent court did not commit any error in taking '(a) That the term or period of this contract shall be as long as the party of the first
cognizance of the aforesaid issues, although not raised before the trial part [herein appellant] has need for the electric light posts of the party of the
court. The presence of strong consideration of substantial justice has led second part  [herein plaintiff] it being understood that this contract shall terminate
 when for any reason whatsoever, the party of the second part is forced to stop, aforementioned provision. 21 Nevertheless, in view of our discussions under the first and second
abandoned [sic] its operation as a public service and it becomes necessary to issues raised by petitioners, there is no reason to set aside the questioned decision and resolution
remove the electric light post [sic]'; (Emphasis supplied) of respondent court.
is invalid for being purely potestative on the part of appellant as it leaves the WHEREFORE, the petition is hereby DENIED. The decision of the Court of Appeals dated May 28,
continued effectivity of the aforesaid agreement to the latter's sole and exclusive 1992 and its resolution dated September 10, 1992 are AFFIRMED.
will as long as plaintiffs is in operation. A similar provision in a contract of lease
SO ORDERED.
wherein the parties agreed that the lessee could stay on the leased premises 'for
as long as the defendant needed the premises and can meet and pay said ||| (Naga Telephone Co., Inc. v. Court of Appeals, G.R. No. 107112, [February 24, 1994], 300 PHIL
increases' was recently held by the Supreme Court in Lim v. C.A., 191 SCRA 150, 367-389)
citing the much earlier case of Encarnacion v. Baldomar, 77 Phil. 470, as invalid for
being 'a purely potestative condition because it leaves the effectivity and enjoyment
of leasehold rights to the sole and exclusive will of the lessee.' Further held the
High Court in the Lim case: llcd
'The continuance, effectivity and fulfillment of a contract of lease cannot be
made to depend exclusively upon the free and uncontrolled choice of the
lessee between continuing the payment of the rentals or not, completely
depriving the owner of any say in the matter. Mutuality does not obtain in
such a contract of lease of no equality exists between the lessor and the
lessee since the life of the contract is dictated solely by the lessee.'
The above can also be said of the agreement Exh. "A" between the parties in this
case. There is no mutuality and equality between them under the afore-quoted
provision thereof since the life and continuity of said agreement is made to depend
as long as appellant needs plaintiff's electric posts. And this is precisely why, since
1977 when said agreement was executed and up to 1989 when this case was
finally filed by plaintiff, it could do nothing to be released from or terminate said
agreement notwithstanding that its continued effectivity has become very
disadvantageous and iniquitous to it due to the expansion and increase of
appellant's telephone services within Naga City and even outside the same, without
a corresponding increase in the ten (10) telephone units being used by plaintiff free
of charge, as well as the bad and inefficient service of said telephones to the
prejudice and inconvenience of plaintiff and its customers. . . ." 18
Petitioners' allegations must be upheld in this regard. A potestative condition is a condition, the
fulfillment of which depends upon the sole will of the debtor, in which case, the conditional obligation is
void. 19 Based on this definition, respondent court's finding that the provision in the contract, to wit:
"(a) That the term or period of this contract shall be as long as the party of the first
part (petitioner) has need for the electric light posts of the party of the second part
(private respondent) . . ." LLjur
is a potestative condition, is correct. However, it must have overlooked the other conditions in the
same provision, to wit:
". . . it being understood that this contract shall terminate when for any reason
whatsoever, the party of the second part (private respondent) is forced to stop,
abandoned (sic) its operation as a public service and it becomes necessary to
remove the electric light post (sic);"
which are casual conditions since they depend on chance, hazard, or the will of a third person. 20
In sum, the contract is subject to mixed conditions, that is, they depend partly on the will of the
debtor and partly on chance, hazard or the will of a third person, which do not invalidate the
[G.R. No. 2980. January 2, 1907.] If, however, the contract be not one strictly of deposit but one according to local custom
for the pasturing of cattle, the obligations of the parties remain the same.

ANICETA PALACIO,  plaintiff-appellee, vs. DIONISIO SUDARIO, defendant- The defendant also sets up the six years' statute of limitation, under section 43 of the
appellant. present Code of Civil Procedure. This action, having arisen before that code went into effect, is
governed by the provisions of preexisting law (sec. 38) under which the prescription was one of
fifteen years. (Civil Code, art. 1964.)
Frank E. Green, for appellant. The judgment of the court below is affirmed with the costs of both instances. After
expiration of twenty days let judgment be entered in accordance herewith and ten days thereafter
R. Palma,  for appellee. the case remanded to the court from whence it came for execution. So ordered.
||| (Aniceta Palacio v. Sudario, G.R. No. 2980, [January 2, 1907], 7 PHIL 275-277)
SYLLABUS

1. LOSS OF PROPERTY ENTRUSTED TO ANOTHER. — When cattle taken for

pasturage are claimed to have perished, the burden of explaining the loss rests upon the person
pasturing them.
2. PRESCRIPTION. — In an action arising before the present Code of Civil Procedure
with into effect, the rule of prescription to be applied is that under the Civil Code.

DECISION

TRACEY,  J p:

At an interview at which were present the defendant and three herdsmen, the plaintiff
made an arrangement for the pasturing of eighty-one head of cattle, in return for which she was to
give one-half of the calves that might be born and was to pay the defendant one-half peso for each
calf branded. On demand for the whole, forty-eight head of cattle were afterwards returned to her
and this action is brought to recover the remaining thirty-three.
It is claimed as a first defense that arrangement was made between the plaintiff and the
herdsmen, the defendant, who was president of the municipality, tendering his good offices only.
Upon this question, the finding of the court below is conclusive in favor of the plaintiff and is fully
justified by the proofs, especially by a letter of the defendant in reply to the demand for the cattle, in
which he seeks to excuse himself for the loss of the missing animals.
As a second defense it is claimed that the thirty-three cows either died of disease or were
drowned in a flood. As to this point, on which the trial court has made no specific finding, the proof
is conflicting in many particulars and indicates that at least some of these cattle were living at the
time of the surrender of the forty-eight head. The defendant's witnesses swore that of the cows that
perished, six die from overfeeding, and they failed to make clear the happening of any flood
sufficient to destroy the others.
If we consider the contract as one of deposit, then under article 1183 of the Civil Code, the
burden of explanation of the loss rested upon the depositary and under article 1769 the fault is
presumed to be his. The defendant has not succeeded in showing that the loss occurred either
without fault on his part or by reason of caso fortuito.
[G.R. No. 9806. January 19, 1916.] In the judgment appealed from, the medical services rendered by the plaintiff to the
defendant's daughter are given in detail, in accordance with the statement Exhibit A, presented by
the plaintiff. The latter claimed the sum of P2,000 as the reasonable value of his services. The
LEONIDES LOPEZ LISO,  plaintiff-appellee, vs. MANUEL court, after discussing the matter of the service rendered and after taking into account that the
TAMBUNTING,  defendant-appellant. plaintiff, as soon as he had finished rendering them, asked for compensation in the sum of P700
only, and furthermore, holding that it was in no wise proven that, because said amount was not
paid the plaintiff was entitled to recover from the defendant, by means of these proceedings, the
Silvestre Apacible for appellant. sum of P2,000, held that the reasonable value of said services could only be worth said P700. We
agree with this finding of the trial court.
Gibbs, McDonough & Blanco  for appellee.
The second question raised by this appeal involves the question of whether the defendant
has really paid the plaintiff, as he claims to have done, the sum of P700 before mentioned, that is,
SYLLABUS whether the obligation alleged in the complaint has already been extinguished.
The receipt signed by the plaintiff, for P700, the amount of his fees he endeavored to
collect from the defendant after he had finished rendering the services in question (which receipt
1. EVIDENCE; PRESUMPTION; RECEIPT AS PROOF OF PAYMENT. — Number 8 of was presented by the defendant at the trial as (Exhibit 1) was in the latter's possession, and this
section 334 of the Code of Civil Procedure provides, as a legal presumption, "that an obligation fact was alleged by him as proof that he had already paid said fees to the plaintiff.
delivered up to the debtor has been paid;" article 1188 of the Civil Code prescribes that the
voluntary surrender, by a creditor to his debtor, of a private instrument proving a credit, implies the With respect to this point, and as the trial court very correctly said in the judgment
renunciation of his right of action against the debtor; and article 1189 of the same Code likewise appealed from, the testimony given by both the plaintiff and the defendant, as well as by their
prescribes that whenever the private instrument which evidences the debt is in the possession of respective witnesses, is entirely contradictory.
the debtor it shall be presumed that the creditor delivered it of his own free will. Nevertheless, The court, after hearing the testimony, reached the conclusion that, notwithstanding that
pursuant to the last cited article, this presumption cannot stand, when from the evidence it appears the defendant was in possession of the receipt, the said P700 had not been paid to the plaintiff.
that the evidence of the obligation was not returned to the debtor, but was sent to him solely for the
purpose of collecting the debt, and that the creditor's purpose was not to leave the instrument After a careful examination of the evidence we find no reason whatever for changing or
evidencing the credit in the possession of the debtor, if the latter did not forthwith pay the amount modifying this finding of the court below. The trial judge had the plaintiff and the defendant and their
mentioned therein. witnesses before him, he heard them make their respective statement and was in a position to
know which of them was telling the truth and to determine on which side the preponderance of the
evidence lay.
It is true that number 8 of section 334 of the Code of Civil Procedure provides as a legal
DECISION presumption "that an obligation delivered up to the debtor has been paid." Article 1188 of the Civil
Code also provides that the voluntary surrender by a creditor to his debtor, of a private instrument
proving a credit, implies the renunciation of the right of action against the debtor; and article 1189
prescribes that whenever the private instrument which evidences the debt is in the possession of
ARAULLO,  J p: the debtor, it will be presumed that the creditor delivered it of his own free will, unless the contrary
is proven.
These proceedings were brought to recover from the defendant the sum of P2,000, But the legal presumption established by the foregoing provisions of law cannot stand if
amount of the fees, which, according to the complaint, are owing for professional medical services sufficient proof is adduced against it. In the case at bar the trial court correctly held that there was
rendered by the plaintiff to a daughter of the defendant from March 10 to July 15, 1913, which fees sufficient evidence to the contrary, in view of the preponderance thereof in favor of the plaintiff and
the defendant refused to pay, notwithstanding the demands therefor made upon him by the plaintiff. of the circumstances connected with the defendant's possession of said receipt Exhibit 1.
The defendant denied the allegations of the complaint, and furthermore alleged that the Furthermore, in order that such a presumption may be taken into account, it is necessary, as stated
obligation which the plaintiff endeavored to compel him to fulfill was already extinguished. in the laws cited, that the evidence of the obligation be delivered up to the debtor and that the
delivery of the instrument proving the credit be made voluntarily by the creditor to the debtor. In the
The Court of First Instance of Manila, after hearing the evidence introduced by both present case, it cannot be said that these circumstances concurred, inasmuch as when the plaintiff
parties, rendered judgment on December 17, 1913, ordering the defendant to pay to the plaintiff the sent the receipt to the defendant for the purpose of collecting his fee, it was not his intention that
sum of P700, without express finding as to costs. The defendant, after entering a motion for a new that document should remain in the possession of the defendant if the latter did not forthwith pay
trial, which was denied, appealed from said judgment and forwarded to this court the proper bill of the amount specified therein.
exceptions.
By reason of the foregoing, we affirm the judgment appealed from, with the costs of this
The first question raised by this appeal relates to the amount or value of the fees which instance against the appellant. So ordered.
the defendant was ordered to pay.
||| (Liso v. Tambunting, G.R. No. 9806, [January 19, 1916], 33 PHIL 226-229)