7/24/2019 Oblicon Cases 11-24-15

1/22

Republic of the Philippines

SUPREME COURT

Manila

EN BANC

G.R. No. L-22962 September 28, 1972

PILAR N. ORROMEO, MARIA . PUTONG, !E"ERICO #.

ORROMEO, $OSE ORROMEO, CONSUELO . MORALES

%&' CANUTO #. ORROMEO, $R., petitioners,

vs.

COURT O! APPEALS %&' $OSE A. #ILLAMOR,

("e)e%*e'+ Sb*ttte' b !ELISA #ILLAMOR,

ROSARIO #. LIAO LAMCO, MANUEL #ILLAMOR, AMPARO

#. COTTON, MIGUEL #ILLAMOR %&' CARMENCITA#ILLAMOR, respondents.

Filiberto Leonardo for petitioners.

Ramon Duterte for private respondents.

!ERNAN"O,J.:p

The point pressed on us by private respondents,

1

in thispetition for review of a decision of the Court of Appeals in the

interpretation of a stipulation which adittedly is not free

fro abi!uity, there bein! a ention of a waiver of the

defense of prescription, is not calculated to elicit undue

"udicial sypathy. #or if accorded acceptance, a creditor, now

represented by his heirs,2who, followin! the war and

!enerous ipulse of friendship, cae to the rescue of a

debtor fro a serious predicaent of his own a$in! would

be barred fro recoverin! the oney loaned. Thus the

proptin!s of charity, unfortunately not often persuasive

enou!h, would be discredited. %t is unfortunate then that

respondent Court of Appeals did not see it that way. #or its

decision to be upheld would be to sub"ect the law to such a

scathin! indictent. A careful study of the relevant facts in

the li!ht of applicable doctrines calls for the reversal of its

decision.

The facts as found by the Court of Appeals follow& 'Before the

year ()**, defendant +ose A. -illaor was a distributor of

luber belon!in! to Mr. Miller who was the a!ent of the

%nsular /uber Copany in Cebu City. 0efendant bein! a

friend and forer classate of plainti1 +Canuto 2. Borroeo

used to borrow fro the latter certain aounts fro tie to

tie. 2n one occasion with soe pressin! obli!ation to settle

with Mr. Miller, defendant borrowed fro plainti1 a lar!e su

of oney for which he ort!a!ed his land and house in CebuCity. Mr. Miller 3led civil action a!ainst the defendant and

attached his properties includin! those ort!a!ed to

plainti1, inasuch as the deed of ort!a!e in favor of

plainti1 could not be re!istered because not properly drawn

up. Plainti1 then pressed the defendant for settleent of his

obli!ation, but defendant instead o1ered to e4ecute a

docuent proisin! to pay his indebtedness even after the

lapse of ten years. /i5uidation was ade and defendant was

found to be indebted to plainti1 in the su of P6,778.88, for

which defendant si!ned a proissory note therefor onNoveber 7), ()** with interest at the rate of (79 per

annu, a!reein! to pay :as soon as % have oney:. The note

further stipulates that defendant :hereby relin5uish,

renounce, or otherwise waive y ri!hts to the prescriptions

established by our Code of Civil Procedure for the collection

or recovery of the above su of P6,778.88. ... at any tie

even after the lapse of ten years fro the date of this

instruent:. After the e4ecution of the docuent, plainti1

(

7/24/2019 Oblicon Cases 11-24-15

2/22

liited hiself to verbally re5uestin! defendant to settle his

indebtedness fro tie to tie. Plainti1 did not 3le any

coplaint a!ainst the defendant within ten years fro the

e4ecution of the docuent as there was no property

re!istered in defendant:s nae, who furtherore assured

hi that he could collect even after the lapse of ten years.

After the last war, plainti1 ade various oral deands, but

defendants failed to settle his account, ; hence the present

coplaint for collection.'/%t was then noted in the decision

under review that the Court of #irst %nstance of Cebu did

sentence the ori!inal defendant, the deceased ose A.

-illaor, to pay Canuto 2. Borroeo, now represented by

petitioners, the su of P6,778.88 within ninety days fro the

date of the receipt of such decision with interest at the rate

of (79 per annu fro the e4piration of such ninety

7/24/2019 Oblicon Cases 11-24-15

3/22

the aforesaid ort!a!e, not bein! properly drawn up, could

not be re!istered. Mention was then ade of the late

Borroeo in his lifetie see$in! the satisfaction of the su

due with -illaor unable to pay, but e4ecutin! a docuent

proisin! 'to pay his indebtedness even after the lapse of

ten years.'6%t is with such a bac$!round that the words

eployed in the instruent of Noveber 7), ()** should be

viewed. There is nothin! iplausible in the view that such

lan!ua!e renouncin! the debtor:s ri!ht to the prescription

established by the Code of Civil Procedure should be !iven

the eanin!, as noted in the precedin! sentence of the

decision of respondent Court, that the debtor could be

trusted to pay even after the terination of the ten

7/24/2019 Oblicon Cases 11-24-15

4/22

becoes an inte!ral part of the contract as thou!h it had

been ori!inally e4pressed therein in une5uivocal

ters ... .' 1hile not directly in point, what was said by

ustice /abrador in "umaneng v. Abad16is relevant& 'There is

no 5uestion that the ters of the contract are not clear on

the period of redeption. But the intent of the parties

thereto is the law between the, and it ust be ascertained

and enforced.' 17Nor is it to be for!otten, followin! what was

3rst announced in Velas#uez v. "eodoro18that 'previous,

siultaneous and subse5uent acts of the parties are properly

co!niable indicia of their true intention.' 19

There is another fundaental rule in the interpretation of

contracts speci3cally referred to in $asilag v. Rodriguez, 2as

'not less iportant' 21than other principles which 'is to the

e1ect that the ters, clauses and conditions contrary to law,

orals and public order should be separated fro the validand le!al contract when such separation can be ade

because they are independent of the valid contract which

e4presses the will of the contractin! parties. Manresa,

coentin! on article (7II of the Civil Code and statin! the

rule of separation "ust entioned, !ives his views as follows&

:2n the supposition that the various pacts, clauses, or

conditions are valid, no diFculty is presented@ but should

they be void, the 5uestion is as to what e4tent they ay

produce the nullity of the principal obli!ation. nder the view

that such features of the obli!ation are added to it and do not!o to its essence, a criterion based upon the stability of

"uridical relations should tend to consider the nullity as

con3ned to the clause or pact su1erin! therefro, e4cept in

cases where the latter, by an established connection or by

anifest intention of the parties, is inseparable fro the

principal obli!ation, and is a condition, "uridically spea$in!, of

that the nullity of which it would also occasion.: ... The sae

view prevails in the An!lo

7/24/2019 Oblicon Cases 11-24-15

5/22

rather evident that since even the denoination of the entire

contract itself is not conclusively deterined by what the

parties call it but by the law, a stipulation found therein

should li$ewise be ipressed with the characteriation the

law places upon itJ

hat eer!es in the li!ht of all the principles set forth above

is that the 3rst ten years after Noveber 7), ()** should notbe counted in deterinin! when the action of creditor, now

represented by petitioners, could be 3led. #ro the "oint

record on appeal, it is undoubted that the coplaint was 3led

on anuary 6, ()I*. %f the 3rst ten

7/24/2019 Oblicon Cases 11-24-15

6/22

Republic of the Philippines

SUPREME COURT

Manila

EN BANC

G.R. No. L-11827 $3 /1, 1961

!ERNAN"O A. GAITE,plainti1

7/24/2019 Oblicon Cases 11-24-15

7/22

(( iron lode ineral clais, $nown as the 0awahan Lroup,

situated in the unicipality of ose Pan!aniban, province of

Caarines Norte.

By a '0eed of Assi!nent' dated epteber 7),

()I7E4hibit '*', #onacier constituted and appointed

plainti1 E4hibit 'A',wherein Laite

transferred to #onacier, for the consideration of P78,888.88,

plus (89 of the royalties that #onacier would receive fro

the inin! clais, all his ri!hts and interests on all the roads,

iproveents, and facilities in or outside said clais, the

ri!ht to use the business nae '/arap %ron Mines' and its

!oodwill, and all the records and docuents relative to the

ines. %n the sae docuent, Laite transferred to #onacier

all his ri!hts and interests over the '7>,888 tons of iron ore,

ore or less' that the forer had already e4tracted fro the

ineral clais, in consideration of the su of P6I,888.88,

P(8,888.88 of which was paid upon the si!nin! of the

a!reeent, and

b. The balance of %OT with hiself #onacier

as principal and the /arap Mines and eltin! Co. and its

stoc$holders Leor!e ra$ower, e!undina -ivas, Paci3co

Escandor, #rancisco 0ante, and #ernando Ty as sureties

E4hibit 'A

7/24/2019 Oblicon Cases 11-24-15

8/22

/arap Mines Q eltin! Co. for an aount of not less then

P=I,888.88, and that, furtherore, the liability of said surety

copany would autoatically e4pire on 0eceber G, ()II.

Both bonds were attached to the 'Revocation of Power of

Attorney and Contract', E4hibit 'A', and ade inte!ral parts

thereof.

2n the sae day that #onacier revo$ed the power of attorneyhe !ave to Laite and the two e4ecuted and si!ned the

'Revocation of Power of Attorney and Contract', E4hibit 'A',

#onacier entered into a 'Contract of Minin! 2peration',

cedin!, transferrin!, and conveyin! unto the /arap Mines and

eltin! Co., %nc. the ri!ht to develop, e4ploit, and e4plore

the inin! clais in 5uestion, to!ether with the

iproveents therein and the use of the nae '/arap %ron

Mines' and its !ood will, in consideration of certain royalties.

#onacier li$ewise transferred, in the sae docuent, the

coplete title to the appro4iately 7>,888 tons of iron ore

which he ac5uired fro Laite, to the /arap Q eltin! Co., in

consideration for the si!nin! by the copany and its

stoc$holders of the surety bonds delivered by #onacier to

Laite Record on Appeal, pp. G7.

p to 0eceber G, ()II, when the bond E4hibit 'B' e4pired

with respect to the #ar Eastern urety and %nsurance

Copany, no sale of the appro4iately 7>,888 tons of iron

ore had been ade by the /arap Mines Q eltin! Co., %nc.,nor had the P=I,888.88 balance of the price of said ore been

paid to Laite by #onacier and his sureties payent of said

aount, on the theory that they had lost ri!ht to a$e use of

the period !iven the when their bond, E4hibit 'B'

autoatically e4pired E4hibits 'C' to 'C'. And when

#onacier and his sureties failed to pay as deanded by Laite,

the latter 3led the present coplaint a!ainst the in the

Court of #irst %nstance of Manila Civil Case No. 7)*(8 for the

payent of the P=I,888.88 balance of the price of the ore,

conse5uential daa!es, and attorney:s fees.

All the defendants e4cept #rancisco 0ante set up the unifor

defense that the obli!ation sued upon by Laite was sub"ect

to a condition that the aount of P=I,888.88 would be

payable out of the 3rst letter of credit coverin! the 3rst

shipent of iron ore andKor the 3rst aount derived fro thelocal sale of the iron ore by the /arap Mines Q eltin! Co.,

%nc.@ that up to the tie of the 3lin! of the coplaint, no sale

of the iron ore had been ade, hence the condition had not

yet been ful3lled@ and that conse5uently, the obli!ation was

not yet due and deandable. 0efendant #onacier also

contended that only 6,I6* tons of the estiated 7>,888 tons

of iron ore sold to hi by Laite was actually delivered, and

counterclaied for ore than P788,888.88 daa!es.

At the trial of the case, the parties a!reed to liit the

presentation of evidence to two issues&

( hether or not the obli!ation of #onacier and his sureties

to pay Laite P=I,888.88 becoe due and deandable when

the defendants failed to renew the surety bond underwritten

by the #ar Eastern urety and %nsurance Co., %nc. E4hibit

'B', which e4pired on 0eceber G, ()II@ and

7 hether the estiated 7>,888 tons of iron ore sold by

plainti1 Laite to defendant #onacier were actually ine4istence in the inin! clais when these parties e4ecuted

the 'Revocation of Power of Attorney and Contract', E4hibit

'A.'

2n the 3rst 5uestion, the lower court held that the obli!ation

of the defendants to pay plainti1 the P=I,888.88 balance of

the price of the appro4iately 7>,888 tons of iron ore was

one with a ter& i.e., that it would be paid upon the sale of

G

7/24/2019 Oblicon Cases 11-24-15

9/22

suFcient iron ore by defendants, such sale to be e1ected

within one year or before 0eceber G, ()II@ that the !ivin!

of security was a condition precedent to Lait:s !ivin! of

credit to defendants@ and that as the latter failed to put up a

!ood and suFcient security in lieu of the #ar Eastern urety

bond E4hibit 'B' which e4pired on 0eceber G, ()II, the

obli!ation becae due and deandable under Article (()G

of the New Civil Code.

As to the second 5uestion, the lower court found that plainti1

Laite did have appro4iately 7>,888 tons of iron ore at the

inin! clais in 5uestion at the tie of the e4ecution of the

contract E4hibit 'A.'

ud!ent was, accordin!ly, rendered in favor of plainti1

Laite orderin! defendants to pay hi, "ointly and severally,

P=I,888.88 with interest at =9 per annu fro 0eceber ),

()II until payent, plus costs. #ro this "ud!ent,defendants "ointly appealed to this Court.

0urin! the pendency of this appeal, several incidental

otions were presented for resolution& a otion to declare

the appellants /arap Mines Q eltin! Co., %nc. and Leor!e

ra$ower in contept, 3led by appellant #onacier, and two

otions to disiss the appeal as havin! becoe acadeic

and a otion for new trial andKor to ta$e "udicial notice of

certain docuents, 3led by appellee Laite. The otion for

contept is uneritorious because the ain alle!ation

therein that the appellants /arap Mines Q eltin! Co., %nc.

and ra$ower had sold the iron ore here in 5uestion, which

alle!edly is 'property in liti!ation', has not been

substantiated@ and even if true, does not a$e these

appellants !uilty of contept, because what is under

liti!ation in this appeal is appellee Laite:s ri!ht to the

payent of the balance of the price of the ore, and not the

iron ore itself. As for the several otions presented by

appellee Laite, it is unnecessary to resolve these otions in

view of the results that we have reached in this case, which

we shall hereafter discuss.

The ain issues presented by appellants in this appeal are&

( that the lower court erred in holdin! that the obli!ation of

appellant #onacier to pay appellee Laite the P=I,888.88balance of the price of the iron ore in 5uestionis one with a

period or ter and not one with a suspensive condition, and

that the ter e4pired on 0eceber G, ()II@ and

7 that the lower court erred in not holdin! that there were

only (8,)I>.I tons in the stoc$piles of iron ore sold by

appellee Laite to appellant #onacier.

The 3rst issue involves an interpretation of the followin!

provision in the contract E4hibit 'A'&

6. That #ernando Laite or /arap %ron Mines hereby transfers

to %sabelo #. #onacier all his ri!hts and interests over the

7>,888 tons of iron ore, ore or less, above

7/24/2019 Oblicon Cases 11-24-15

10/22

precedent or suspensive to the payent of the balance of

P=I,888.88, but was only a suspensive period or ter. hat

characteries a conditional obli!ation is the fact that its

eFcacy or obli!atory force as distin!uished fro its

deandability is subordinated to the happenin! of a future

and uncertain event@ so that if the suspensive condition does

not ta$e place, the parties would stand as if the conditional

obli!ation had never e4isted. That the parties to the contract

E4hibit 'A' did not intend any such state of thin!s to prevail

is supported by several circustances&

( The words of the contract e4press no contin!ency in the

buyer:s obli!ation to pay& 'The balance of i4ty

7/24/2019 Oblicon Cases 11-24-15

11/22

The only rational view that can be ta$en is that the sale of

the ore to #onacier was a sale on credit, and not an aleatory

contract where the transferor, Laite, would assue the ris$

of not bein! paid at all@ and that the previous sale or

shipent of the ore was not a suspensive condition for the

payent of the balance of the a!reed price, but was

intended erely to 34 the future date of the payent.

This issue settled, the ne4t point of in5uiry is whether

appellants, #onacier and his sureties, still have the ri!ht to

insist that Laite should wait for the sale or shipent of the

ore before receivin! payent@ or, in other words, whether or

not they are entitled to ta$e full advanta!e of the period

!ranted the for a$in! the payent.

e a!ree with the court below that the appellant have

forfeited the ri!ht court below that the appellants have

forfeited the ri!ht to copel Laite to wait for the sale of theore before receivin! payent of the balance of P=I,888.88,

because of their failure to renew the bond of the #ar Eastern

urety Copany or else replace it with an e5uivalent

!uarantee. The e4piration of the bondin! copany:s

underta$in! on 0eceber G, ()II substantially reduced the

security of the vendor:s ri!hts as creditor for the unpaid

P=I,888.88, a security that Laite considered essential and

upon which he had insisted when he e4ecuted the deed of

sale of the ore to #onacier E4hibit 'A'. The case s5uarelycoes under para!raphs 7 and * of Article (()G of the Civil

Code of the Philippines&

'ART. (()G. The debtor shall lose every ri!ht to a$e use of

the period&

( . . .

7 hen he does not furnish to the creditor the !uaranties or

securities which he has proised.

* hen by his own acts he has ipaired said !uaranties or

securities after their establishent, and when throu!h

fortuitous event they disappear, unless he iediately !ives

new ones e5ually satisfactory.

Appellants: failure to renew or e4tend the surety copany:s

bond upon its e4piration plainly ipaired the securities !iven

to the creditor appellee Laite, unless iediately renewed

or replaced.

There is no erit in appellants: ar!uent that Laite:s

acceptance of the surety copany:s bond with full $nowled!e

that on its face it would autoatically e4pire within one year

was a waiver of its renewal after the e4piration date. No such

waiver could have been intended, for Laite stood to lose andhad nothin! to !ain barely@ and if there was any, it could be

rationally e4plained only if the appellants had a!reed to sell

the ore and pay Laite before the surety copany:s bond

e4pired on 0eceber G, ()II. But in the latter case the

defendants

7/24/2019 Oblicon Cases 11-24-15

12/22

Coin! now to the second issue in this appeal, which is

whether there were really 7>,888 tons of iron ore in the

stoc$piles sold by appellee Laite to appellant #onacier, and

whether, if there had been a shortG8, second par., New Civil Code.

The sub"ect atter of the sale is, therefore, a deterinate

ob"ect, the ass, and not the actual nuber of units or tons

contained therein, so that all that was re5uired of the seller

Laite was to deliver in !ood faith to his buyer all of the ore

found in the ass, notwithstandin! that the 5uantity

delivered is less than the aount estiated by the Mobile

Machinery Q upply Co., %nc. vs. or$ 2il3eld alva!e Co., %nc.

(6( o. G67, applyin! art. 7>I) of the /ouisiana Civil Code.

There is no char!e in this case that Laite did not deliver to

appellants all the ore found in the stoc$piles in the inin!

clais in 5uestions@ Laite had, therefore, coplied with hisproise to deliver, and appellants in turn are bound to pay

the lup price.

But assuin! that plainti1 Laite undertoo$ to sell and

appellants undertoo$ to buy, not a de3nite ass, but

appro4iately 7>,888 tons of ore, so that any substantial

di1erence in this 5uantity delivered would entitle the buyers

to recover daa!es for the short

7/24/2019 Oblicon Cases 11-24-15

13/22

while appellants contend that by actual easureent, their

witness Cirpriano ManlaS!it found the total volue of ore in

the stoc$piles to be only =.=8) cubic eters. As to the

avera!e wei!ht in tons per cubic eter, the parties are a!ain

in disa!reeent, with appellants claiin! the correct

tonna!e factor to be 7.(G tons to a cubic eter, while

appellee Laite clais that the correct tonna!e factor is about

*.6.

%n the face of the conDict of evidence, we ta$e as the ost

reliable estiate of the tonna!e factor of iron ore in this case

to be that ade by /eopoldo #. Abad, chief of the Mines and

Metallur!ical 0ivision of the Bureau of Mines, a !overnent

pensionado to the tates and a inin! en!ineerin! !raduate

of the niversities of Nevada and California, with alost 77

years of e4perience in the Bureau of Mines. This witness

placed the tonna!e factor of every cubic eter of iron ore at

between * etric tons as iniu to I etric tons as

a4iu. This estiate, in turn, closely corresponds to the

avera!e tonna!e factor of *.* adopted in his corrected report

E4hibits '##' and ##

7/24/2019 Oblicon Cases 11-24-15

14/22

N. LOPE:, CECILIA P. #"A. "E LOPE:, RE"AN LOPE:

AN" REMARENE LOPE:, respondents.

ELLOSILLO,J.:

CENTRA/ P?%/%PP%NE N%-ER%T 3led this petition for review

on %ertiorariof the decision of the Court of Appeals which

reversed that of the Re!ional Trial Court of %loilo City directin!

petitioner to reconvey to private respondents the property

donated to it by their predecessor

7/24/2019 Oblicon Cases 11-24-15

15/22

rendered its decision reversin! the appealed decision and

reandin! the case to the court of ori!in for the

deterination of the tie within which petitioner should

coply with the 3rst condition annotated in the certi3cate of

title.

Petitioner now alle!es that the Court of Appeals erred& a in

holdin! that the 5uoted annotations in the certi3cate of titleof petitioner are onerous obli!ations and resolutory

conditions of the donation which ust be ful3lled non