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*
MELQUIADES D. AZCUNA, JR., petitioner, vs. COURT OF APPEALS,
ET AL., respondents.
Actions; Ejectment; Contracts; The rule that the only damages
that can be recovered in an ejectment suit are the fair rental
value or the reasonable compensation for the use and
occupation of the real property does not apply where the
additional award consists of stipulated liquidated damages.It is
petitioners claim that such
_______________
* THIRD DIVISION.
216
216
SUPREME COURT REPORTS ANNOTATED
Azcuna, Jr. vs. Court of Appeals
award, in addition to the fair rental value or reasonable
compensation for the use and occupation of the premises (subparagraph 1), is improper in the light of the doctrine enunciated
in the cases of Felesilda v. Villanueva, Shoemart, Inc. v. CA
and Hualam Construction and Development Corp. v. CA cited
by petitioner, that the only damages that can be recovered in
an ejectment suit are the fair rental value or the reasonable
compensation for the use and occupation of the real property.
Other damages must be claimed in an ordinary action.
Petitioners reliance on such doctrine is misplaced, inasmuch as
the Felesilda, Shoemart and Hualam cases dealt with
additional damages and charges other than liquidated damages,
defined as x x x those agreed upon by the parties to a contract,
time the defendant and all persons claiming rights under him
finally vacate the aforesaid premises;
2. The further sum of P3,000.00 per day, by way of damages
for his failure to turn over peacefully the three (3) commercial
spaces to the plaintiff from July 1, 1993 until such time the
defendant and all persons claiming rights under him vacate the
premises;
3. The further sum of P5,000.00 by way of attorneys fees; and,
218
218
SUPREME COURT REPORTS ANNOTATED
Azcuna, Jr. vs. Court of Appeals
4. The cost of this suit.
The counter-claim of the defendant is hereby Dismissed, for
lack of merit.
SO ORDERED.
Petitioner now comes to the Court via the instant petition not to
contest his ouster from the leased premises nor the amount of
monthly rental he was adjudged to pay until he vacates the
same, but only to take particular exception to respondent CAs
decision insofar as it affirmed the municipal trial courts award of
P3,000.00 per day as damages (subparagraph 2 of the
dispositive portion just quoted). It is petitioners claim that such
award, in addition to the fair rental value or reasonable
compensation for the use and occupation of the premises (subparagraph 1), is improper in the light of the doctrine enunciated
in the cases of Felesilda v. Villanueva,1 Shoemart, Inc. v. CA2
and Hualam Construction and Development Corp. v. CA3 cited
by petitioner, that the only damages that can be recovered in
220
SUPREME COURT REPORTS ANNOTATED
Azcuna, Jr. vs. Court of Appeals
upheld the then CFIs affirmatory decision by disposing of
appellant Barramedas protestation in this wise:
This Court has often stated that inferior courts have exclusive
jurisdiction over cases of forcible entry and detainer regardless
of the value of damages demanded. It has also ruled that the
damages that may be recovered in actions for ejectment are
those equivalent to a reasonable compensation for the use and
occupation of the premises by defendant. Nonetheless, this
latter legal proposition is not pertinent to the issue raised in the
instant case because here, the damage sought to be recovered
had previously been agreed to by lessee (in the contract of
lease) and imposed by lessor by way of damages. Besides,
nobody can affirm that the liquidated amount of damages
stipulated in the lease contract was not due to occupation or
loss of possession of the premises and non-compliance with the
contract. (Italics supplied)
WHEREFORE, the instant petition for review by way of certiorari
is hereby DENIED.
SO ORDERED.
Narvasa (C.J., Chairman), Davide, Jr., Melo and Panganiban,
JJ., concur.
Petition denied.
Notes.The price not greater than TWO HUNDRED PESOS in
the Contract of Lease with Option to Buy is, under the
circumstances of the case, certain and definite. (Serra vs. Court
of Appeals, 229 SCRA 60 [1994])
* THIRD DIVISION.
91
92
SUPREME COURT REPORTS ANNOTATED
Pakistan International Airlines Corporation vs. Ople
an agreement fixing a period be essentially evil or illicit,
therefore anathema? Would such an agreement come within the
scope of Article 280 which admittedly was enacted 'to prevent
the circumvention of the right of the employee to be secured in
x x (his) employment?' As it is evident from even only the three
examples already given that Article 280 of the Labor Code,
under a narrow and literal interpretation, not only fails to
exhaust the gamut of employment contracts to which the lack of
a fixed period would be an anomaly, but would also appear to
restrict, without reasonable distinctions, the right of an
employee to freely stipulate with his employer the duration of
his engagement, it logically follows that such a literal
interpretation should be eschewed or avoided. The law must be
given reasonable interpretation, to preclude absurdity in its
application. Outlawing the whole concept of term employment
and subverting to boot the principle of freedom of contract to
remedy the evil of employers' using it as a means to prevent
their employees from obtaining security of tenure is like cutting
off the nose to spite the face or, more relevantly, curing a
headache by lopping off the head. xxx xxx xxx Accordingly, and
since the entire purpose behind the development of legislation
culminating in the present Article 280 of the Labor Code clearly
appears to have been, as already observed, to prevent
circumvention of the employee's right to be secure in his tenure,
the clause in said article indiscriminately and completely ruling
out all written or oral agreements conflicting with the concept of
regular employment as defined therein should be construed to
refer to the substantive evil that the Code itself has singled out:
agreements entered into precisely to circumvent security of
tenure. It should have no application to instances where a fixed
period of employment was agreed upon knowingly and
voluntarily by the parties, without any force, duress or improper
pressure being brought to bear upon the employee and absent
any other circumstances vitiating his consent, or where it
satisfactorily appears that the employer and employee dealt
with each other on more or less equal terms with no moral
dominance whatever being exercised by the former over the
latter. Unless thus limited in its purview, the law would be made
to apply to purposes other than those explicitly stated by its
framers; it thus becomes pointless and arbitrary, unjust in its
effects and apt to lead to absurd and unintended
consequences." (Italics supplied)
Same; Contracts; Conflicts of Law; When the relationship
between the parties is much affected by public interest, the
otherwise applicable Philippine laws and regulations cannot be
rendered illusory by the parties agreeing upon some other law to
govern their relationship.Petitioner PIA cannot take refuge in
paragraph 10 of
93
93
Pakistan International Airlines Corporation vs. Ople
its employment agreement which specifies, firstly, the law of
Pakistan as the applicable law of the agreement and, secondly,
lays the venue for settlement of any dispute arising out of or in
connection with the agreement "only [in] courts of Karachi,
Pakistan". The first clause of paragraph 10 cannot be invoked to
prevent the application of Philippine labor laws and regulations
to the subject matter of this case, i.e., the employer-employee
relationship between petitioner PIA and private respondents. We
have already pointed out that that relationship is much affected
with public interest and that the otherwise applicable Philippine
laws and regulations cannot be rendered illusory by the parties
agreeing upon some other law to govern their relationship.
Neither may petitioner invoke the second clause of paragraph
10, specifying the Karachi courts as the sole venue for the
settlement of disputes between the contracting parties. Even a
cursory scrutiny of the relevant circumstances of this case will
show the multiple and substantive contacts between Philippine
law and Philippine courts, on the one hand, and the relationship
between the parties, upon the other: the contract was not only
executed in the Philippines, it was also performed here, at least
partially; private respondents are Philippine citizens and
residents, while petitioner, although a foreign corporation, is
licensed to do business (and actually doing business) and hence
resident in the Philippines; lastly, private respondents were
based in the Philippines in between their assigned flights to the
Middle East and Europe. All the above contacts point to the
Philippine courts and administrative agencies as a proper forum
for the resolution of contractual disputes between the parties.
Under these circumstances, paragraph 10 of the employment
agreement cannot be given effect so as to oust Philippine
agencies and courts of the jurisdiction vested upon them by
Philippine law. Finally, and in any event, the petitioner PIA did
not undertake to plead and prove the contents of Pakistan law
94
SUPREME COURT REPORTS ANNOTATED
Pakistan International Airlines Corporation vs. Ople
FELICIANO, J.:
xxx
xxx
6. TERMINATION
xxx
xxx
xxx
xxx
xxx
2 Id., p. 22.
3 Id., pp. 36-41.
4 Id., p. 43.
96
96
SUPREME COURT REPORTS ANNOTATED
Pakistan International Airlines Corporation vs. Ople
and that the dismissal, having been carried out without the
requisite clearance from the MOLE, was illegal and entitled
private respondents to reinstatement with full backwages.
On appeal, in an Order dated 12 August 1982, Hon. Vicente
Leogardo, Jr., Deputy Minister, MOLE, adopted the findings of
fact and conclusions of the Regional Director and affirmed the
latter's award save for the portion thereof giving PIA the option,
in lieu of reinstatement, 'to pay each of the complainants
[private respondents] their salaries corresponding to the
unexpired portion of the contract[s] [of employment] x x x".5
In the instant Petition for Certiorari, petitioner PIA assails the
award of the Regional Director and the Order of the Deputy
Minister as having been rendered without jurisdiction; for having
been rendered without support in the evidence .of record since,
allegedly, no hearing was conducted by the hearing officer, Atty.
Jose M. Pascual; and for having been issued in disregard and in
violation of petitioner's rights under the employment contracts
with private respondents.
5 Id., p. 64.
97
xxx
xxx
xx x"
(Italics supplied)
98
98
SUPREME COURT REPORTS ANNOTATED
Pakistan International Airlines Corporation vs. Ople
2. The second contention of petitioner PIA is that, even if the
Regional Director had jurisdiction, still his order was null and
void because it had been issued in violation of petitioner's right
to procedural due process.6 This claim, however, cannot be
given serious consideration. Petitioner was ordered by the
Regional Director to submit not only its position paper but also
such evidence in its favor as it might have. Petitioner opted to
rely solely upon its position paper; we must assume it had no
evidence to sustain its assertions. Thus, even if no formal or oral
hearing was conducted, petitioner had ample opportunity to
explain its side. Moreover, petitioner PIA was able to appeal his
case to the Ministry of Labor and Employment.7
There is another reason why petitioner's claim of denial of due
process must be rejected. At the time the complaint was filed by
private respondents on 21 September 1980 and at the time the
Regional Director issued his questioned order on 22 January
1981, applicable regulation, as noted above, specified that a
"dismissal without prior clearance shall be conclusively
presumed to be termination of employment without a just
cause", and the Regional Director was required in such case to
"order the immediate reinstatement of the employee and the
payment of his wages from the time of the shutdown or
dismissal until xxx reinstatement." In other words, under the
then applicable rule, the Regional Director did not even have to
require submission of position papers by the parties in view of
6 Rollo, p. 6.
7 See Llora Motors, Inc., et al. v. Hon. Franklin Drilon, et al., G.R.
No. 82895, 7 November 1989.
8 113 SCRA 257 (1982).
99
9 Rollo, p. 8.
10 Henson v. Intermediate Appellate Court, 148 SCRA 11 (1987).
11 Commissioner of Internal Revenue v. United Lines Co., 5 SCRA
175 (1962).
100
100
SUPREME COURT REPORTS ANNOTATED
Pakistan International Airlines Corporation vs. Ople
ister, MOLE, in effect held that paragraph 5 of that employment
contract was inconsistent with Articles 280 and 281 of the Labor
Code as they existed at the time the contract of employment
was entered into, and hence refused to give effect to said
paragraph 5. These Articles read as follows:
"Art. 280. Security of Tenure.In cases of regular employment,
the employer shall not terminate the services of an employee.
except for a just cause or when authorized by this Title. An
employee who is unjustly dismissed from work shall be entitled
to reinstatement without loss of seniority rights and to his
backwages computed from the time his compensation was
withheld from him up to the time his reinstatement.
Article 281. Regular and Casual Employment.The provisions of
written agreement to the contrary notwithstanding and
regardless of the oral agreements of the parties, an employment
shall be deemed to be regular where the employee has been
engaged to perform activities which are usually necessary or
desirable in the usual business or trade of the employer, except
where the employment has been fixed for a specific project or
undertaking the completion or termination of which has been
determined at the time of the engagement of the employee or
where the work or services to be performed is seasonal in nature
and the employment is for the duration of the season.
An employment shall be deemed to be casual if it is not covered
by the preceding paragraph: provided, that, any employee who
has rendered at least one year of service, whether such service
is continuous or broken, shall be considered as regular employee
with respect to the activity in which be is employed and his
xxx
xxx
102
SUPREME COURT REPORTS ANNOTATED
Pakistan International Airlines Corporation vs. Ople
being exercised by the former over the latter. Unless thus limited
in its purview, the law would be made to apply to purposes other
than those explicitly stated by its framers; it thus becomes
pointless and arbitrary, unjust in its effects and apt to lead to
absurd and unintended consequences."
(Italics supplied)
It is apparent from Brent School that the critical consideration is
the presence or absence of a substantial indication that the
period specified in an employment agreement was designed to
circumvent the security of tenure of regular employees which is
provided for in Articles 280 and 281 of the Labor Code. This
indication must ordinarily rest upon some aspect of the
agreement other than the mere specification of a fixed term of
the employment agreement, or upon evidence aliunde of the
intent to evade.
Examining the provisions of paragraphs 5 and 6 of the
employment agreement between petitioner PIA and private
respondents, we consider that those provisions must be read
together and when so read, the fixed period of three (3) years
specified in paragraph 5 will be seen to have been effectively
neutralized by the provisions of paragraph 6 of that agreement.
Paragraph 6 in effect took back from the employee the fixed
three (3)-year period ostensibly granted by paragraph 5 by
rendering such period in effect a facultative one at the option of
104
* THIRD DIVISION.
91
92
SUPREME COURT REPORTS ANNOTATED
Pakistan International Airlines Corporation vs. Ople
an agreement fixing a period be essentially evil or illicit,
therefore anathema? Would such an agreement come within the
scope of Article 280 which admittedly was enacted 'to prevent
the circumvention of the right of the employee to be secured in
x x (his) employment?' As it is evident from even only the three
examples already given that Article 280 of the Labor Code,
under a narrow and literal interpretation, not only fails to
exhaust the gamut of employment contracts to which the lack of
a fixed period would be an anomaly, but would also appear to
restrict, without reasonable distinctions, the right of an
employee to freely stipulate with his employer the duration of
his engagement, it logically follows that such a literal
interpretation should be eschewed or avoided. The law must be
given reasonable interpretation, to preclude absurdity in its
application. Outlawing the whole concept of term employment
and subverting to boot the principle of freedom of contract to
remedy the evil of employers' using it as a means to prevent
their employees from obtaining security of tenure is like cutting
off the nose to spite the face or, more relevantly, curing a
headache by lopping off the head. xxx xxx xxx Accordingly, and
since the entire purpose behind the development of legislation
culminating in the present Article 280 of the Labor Code clearly
appears to have been, as already observed, to prevent
circumvention of the employee's right to be secure in his tenure,
the clause in said article indiscriminately and completely ruling
out all written or oral agreements conflicting with the concept of
regular employment as defined therein should be construed to
refer to the substantive evil that the Code itself has singled out:
agreements entered into precisely to circumvent security of
tenure. It should have no application to instances where a fixed
period of employment was agreed upon knowingly and
voluntarily by the parties, without any force, duress or improper
pressure being brought to bear upon the employee and absent
any other circumstances vitiating his consent, or where it
satisfactorily appears that the employer and employee dealt
with each other on more or less equal terms with no moral
dominance whatever being exercised by the former over the
latter. Unless thus limited in its purview, the law would be made
to apply to purposes other than those explicitly stated by its
framers; it thus becomes pointless and arbitrary, unjust in its
effects and apt to lead to absurd and unintended
consequences." (Italics supplied)
Same; Contracts; Conflicts of Law; When the relationship
between the parties is much affected by public interest, the
otherwise applicable Philippine laws and regulations cannot be
rendered illusory by the parties agreeing upon some other law to
govern their relationship.Petitioner PIA cannot take refuge in
paragraph 10 of
93
93
Pakistan International Airlines Corporation vs. Ople
its employment agreement which specifies, firstly, the law of
Pakistan as the applicable law of the agreement and, secondly,
lays the venue for settlement of any dispute arising out of or in
connection with the agreement "only [in] courts of Karachi,
Pakistan". The first clause of paragraph 10 cannot be invoked to
prevent the application of Philippine labor laws and regulations
to the subject matter of this case, i.e., the employer-employee
relationship between petitioner PIA and private respondents. We
have already pointed out that that relationship is much affected
with public interest and that the otherwise applicable Philippine
laws and regulations cannot be rendered illusory by the parties
agreeing upon some other law to govern their relationship.
Neither may petitioner invoke the second clause of paragraph
10, specifying the Karachi courts as the sole venue for the
settlement of disputes between the contracting parties. Even a
cursory scrutiny of the relevant circumstances of this case will
show the multiple and substantive contacts between Philippine
law and Philippine courts, on the one hand, and the relationship
between the parties, upon the other: the contract was not only
executed in the Philippines, it was also performed here, at least
partially; private respondents are Philippine citizens and
residents, while petitioner, although a foreign corporation, is
licensed to do business (and actually doing business) and hence
resident in the Philippines; lastly, private respondents were
based in the Philippines in between their assigned flights to the
Middle East and Europe. All the above contacts point to the
Philippine courts and administrative agencies as a proper forum
for the resolution of contractual disputes between the parties.
Under these circumstances, paragraph 10 of the employment
agreement cannot be given effect so as to oust Philippine
agencies and courts of the jurisdiction vested upon them by
Philippine law. Finally, and in any event, the petitioner PIA did
not undertake to plead and prove the contents of Pakistan law
94
SUPREME COURT REPORTS ANNOTATED
Pakistan International Airlines Corporation vs. Ople
FELICIANO, J.:
xxx
xxx
6. TERMINATION
xxx
xxx
xxx
xxx
xxx
2 Id., p. 22.
3 Id., pp. 36-41.
4 Id., p. 43.
96
96
SUPREME COURT REPORTS ANNOTATED
Pakistan International Airlines Corporation vs. Ople
and that the dismissal, having been carried out without the
requisite clearance from the MOLE, was illegal and entitled
private respondents to reinstatement with full backwages.
On appeal, in an Order dated 12 August 1982, Hon. Vicente
Leogardo, Jr., Deputy Minister, MOLE, adopted the findings of
fact and conclusions of the Regional Director and affirmed the
latter's award save for the portion thereof giving PIA the option,
in lieu of reinstatement, 'to pay each of the complainants
[private respondents] their salaries corresponding to the
unexpired portion of the contract[s] [of employment] x x x".5
In the instant Petition for Certiorari, petitioner PIA assails the
award of the Regional Director and the Order of the Deputy
Minister as having been rendered without jurisdiction; for having
been rendered without support in the evidence .of record since,
allegedly, no hearing was conducted by the hearing officer, Atty.
Jose M. Pascual; and for having been issued in disregard and in
violation of petitioner's rights under the employment contracts
with private respondents.
5 Id., p. 64.
97
xxx
xxx
xx x"
(Italics supplied)
98
98
SUPREME COURT REPORTS ANNOTATED
Pakistan International Airlines Corporation vs. Ople
2. The second contention of petitioner PIA is that, even if the
Regional Director had jurisdiction, still his order was null and
void because it had been issued in violation of petitioner's right
to procedural due process.6 This claim, however, cannot be
given serious consideration. Petitioner was ordered by the
Regional Director to submit not only its position paper but also
such evidence in its favor as it might have. Petitioner opted to
rely solely upon its position paper; we must assume it had no
evidence to sustain its assertions. Thus, even if no formal or oral
hearing was conducted, petitioner had ample opportunity to
explain its side. Moreover, petitioner PIA was able to appeal his
case to the Ministry of Labor and Employment.7
There is another reason why petitioner's claim of denial of due
process must be rejected. At the time the complaint was filed by
private respondents on 21 September 1980 and at the time the
Regional Director issued his questioned order on 22 January
1981, applicable regulation, as noted above, specified that a
"dismissal without prior clearance shall be conclusively
presumed to be termination of employment without a just
cause", and the Regional Director was required in such case to
"order the immediate reinstatement of the employee and the
payment of his wages from the time of the shutdown or
dismissal until xxx reinstatement." In other words, under the
then applicable rule, the Regional Director did not even have to
require submission of position papers by the parties in view of
6 Rollo, p. 6.
7 See Llora Motors, Inc., et al. v. Hon. Franklin Drilon, et al., G.R.
No. 82895, 7 November 1989.
8 113 SCRA 257 (1982).
99
9 Rollo, p. 8.
10 Henson v. Intermediate Appellate Court, 148 SCRA 11 (1987).
11 Commissioner of Internal Revenue v. United Lines Co., 5 SCRA
175 (1962).
100
100
SUPREME COURT REPORTS ANNOTATED
Pakistan International Airlines Corporation vs. Ople
ister, MOLE, in effect held that paragraph 5 of that employment
contract was inconsistent with Articles 280 and 281 of the Labor
Code as they existed at the time the contract of employment
was entered into, and hence refused to give effect to said
paragraph 5. These Articles read as follows:
"Art. 280. Security of Tenure.In cases of regular employment,
the employer shall not terminate the services of an employee.
except for a just cause or when authorized by this Title. An
employee who is unjustly dismissed from work shall be entitled
to reinstatement without loss of seniority rights and to his
backwages computed from the time his compensation was
withheld from him up to the time his reinstatement.
Article 281. Regular and Casual Employment.The provisions of
written agreement to the contrary notwithstanding and
regardless of the oral agreements of the parties, an employment
shall be deemed to be regular where the employee has been
engaged to perform activities which are usually necessary or
desirable in the usual business or trade of the employer, except
where the employment has been fixed for a specific project or
undertaking the completion or termination of which has been
determined at the time of the engagement of the employee or
where the work or services to be performed is seasonal in nature
and the employment is for the duration of the season.
An employment shall be deemed to be casual if it is not covered
by the preceding paragraph: provided, that, any employee who
has rendered at least one year of service, whether such service
is continuous or broken, shall be considered as regular employee
with respect to the activity in which be is employed and his
xxx
xxx
102
SUPREME COURT REPORTS ANNOTATED
Pakistan International Airlines Corporation vs. Ople
being exercised by the former over the latter. Unless thus limited
in its purview, the law would be made to apply to purposes other
than those explicitly stated by its framers; it thus becomes
pointless and arbitrary, unjust in its effects and apt to lead to
absurd and unintended consequences."
(Italics supplied)
It is apparent from Brent School that the critical consideration is
the presence or absence of a substantial indication that the
period specified in an employment agreement was designed to
circumvent the security of tenure of regular employees which is
provided for in Articles 280 and 281 of the Labor Code. This
indication must ordinarily rest upon some aspect of the
agreement other than the mere specification of a fixed term of
the employment agreement, or upon evidence aliunde of the
intent to evade.
Examining the provisions of paragraphs 5 and 6 of the
employment agreement between petitioner PIA and private
respondents, we consider that those provisions must be read
together and when so read, the fixed period of three (3) years
specified in paragraph 5 will be seen to have been effectively
neutralized by the provisions of paragraph 6 of that agreement.
Paragraph 6 in effect took back from the employee the fixed
three (3)-year period ostensibly granted by paragraph 5 by
rendering such period in effect a facultative one at the option of
104
* FIRST DIVISION.
346
346
SUPREME COURT REPORTS ANNOTATED
De Leon vs. Court of Appeals
marital relations.
Same; Same; Same; Pari delicto; Article 1414 of the New Civil
Code, exception to the pari delicto rule.In the ultimate
analysis, therefore, both parties acted in violation of the laws.
However, the pari delicto rule, expressed in the maxims Ex dolo
malo non oritur actio and In pari delicto potior est conditio
defendentis, which refuses remedy to either party to an illegal
agreement and leaves them where they are, does not apply in
this case. Contrary to the ruling of the respondent Court that x
x x. [C]onsequently, intervenor appellees obligation under the
said agreement having been annulled, the contracting parties
shall restore to each other that things which have been subject
matter of the contract, their fruits and the price or its interest,
except as provided by law (Art. 1398, Civil Code). Article 1414
of the Civil Code, which is an exception to the pari delicto rule, is
the proper law to be applied.
1. To deliver with clear title free from all liens and encumbrances
and subject to no claims in any form whatsoever the following
properties to Sylvia Lichauco-de Leon hereinafter referred to as
the wife:
348
348
SUPREME COURT REPORTS ANNOTATED
De Leon vs. Court of Appeals
A. Suite 11-C, Avalon Condominium, Ortigas Ave., corner Xavier
St., Mandaluyong, Rizal, Philippines.
B. Apartment 702, Wack Wack Condominium, Mandaluyong,
Rizal, Philippines.
C. The rights to assignment of 2 Ayala lots in Alabang, Rizal
(Corner lots, 801 sq. meters each). (Fully paid).
D. 2470 Wexford Ave., South San Francisco, California, U.S.A.
(Lot 18 Block 22 Westborough Unit No. 2). (Fully paid).
E. 1) The sum of One Hundred Thousand Pesos (P100,000)
2) $30,000
3) $5,000
2. To give monthly support payable six (6) months in advance
every year to any designated assignee of the wife for the care
and upbringing of Susana Lichauco de Leon which is hereby
350
350
SUPREME COURT REPORTS ANNOTATED
De Leon vs. Court of Appeals
The rights to assignment of 2 Ayala lots in Alabang Rizal (corner
lots, 801 sq. meters each) (Fully paid)
could be had, the judicial reorganization took place and the case
was transferred to the Regional Trial Court of Pasig.
351
352
SUPREME COURT REPORTS ANNOTATED
De Leon vs. Court of Appeals
rial breach thereof.
The respondent court affirmed the decision in toto. The motion
for reconsideration was denied. Hence, the present petition.
The only basis by which Sylvia may lay claim to the properties
which are the subject matter of the Letter-Agreement, is the
Letter-Agreement itself. The main issue, therefore, is whether or
not the Letter-Agreement is valid.
The third paragraph of the Letter-Agreement, supra, reads:
354
SUPREME COURT REPORTS ANNOTATED
De Leon vs. Court of Appeals
it
355
Sylvia alleges further that since the nullity of the LetterAgreement proceeds from the unlawful consideration solely of
Macaria, applying the pari delicto rule, it is clear that she cannot
recover what she has given by reason of the Letter-Agreement
nor ask for the fulfillment of what has been promised her. On her
part, Macaria raises the defenses of intimidation and mistake
which led her to execute the Letter-Agreement. In resolving this
issue, the trial court said (pp. 148-151, Rollo):
In her second cause of action, intervenor claims that her
signing of Exhibits E to E-2 was due to a fear of an unpeaceful
and troublesome separation of her son with petitioner Sylvia
Lichauco de Leon. In support of her claim, intervenor testified as
follows:
Q
Will you please inform us how did Sylvia Lichauco disturb or
threaten your son or yourself?
A
Despite the fact that Sylvia Lichauco voluntarily left my son Joe
Vincent and abandoned him, she unashamedly nagged Joe and
me to get money and when her demands were not met she
resorted to threats like, she threatened to bring Joe to court for
support. Sylvia threatened to scandalize our family by these
baseless suits; in fact she caused the service of summons to Joe
when he went to the United States. (Intervenors deposition
dated Sept. 6, 1983, p. 8).
356
356
SUPREME COURT REPORTS ANNOTATED
De Leon vs. Court of Appeals
(intervenor) found out that, she was worried about what might
be, you know, involved in any future matters. She just want me
out of the picture. The aforesaid fear of intervenor was further
corroborated by her witness Concepcion Tagudin who testified as
follows:
Q
Now, you mentioned that you were present when Mrs. Macaria
De Leon signed this Exhibit E-2, will you inform us whether
there was anything unusual which you noticed when Mrs.
Macaria M. De Leon signed this Exhibit E-2?
A
Mrs. Macaria M. De Leon was in a state of tension and anger.
She was so mad that she remarked: Puetang Sylvia ito bakit ba
niya ako ginugulo. Ipakukulong daw
357
Before you were told such by your lawyers what if any were your
basis to believe that Sylvia would no longer have inheritance
rights from your son, Joe Vincent?
A
Well, that was what Sylvia told me. That she will eliminate any
inheritance rights from me or my son Joe Vincents properties if I
sign the document amicably. x x x (Intervenors deposition
Sept. 6, 1983, pp. 9-10).
On the other hand, petitioner Sylvia claims that intervenor
could not have been mistaken in her having signed the
document as she was under advice of counsel during the time
that Exhibits E to E-2 was negotiated. To support such claims
by Sylvia Lichauco De Leon, the deposition testimony of Atty.
Vicente Chuidian was presented before this Court:
Atty. Herbosa: Now you mentioned Atty. Norberto Quisumbing, would you be able to tell us in what capacity he was
present in that negotiation?
Atty. Chuidian: He was counsel for Doa Macaria and for Joe
Vincent, the spouse of Sylvia. (Deposition of V. Chuidian,
December 16, 1983, p. 8)
The New Civil Code provides:
Art. 1330. A contract where consent is given through mistake,
violence, intimidation, undue influence or fraud is void-able.
Art. 1331. In order that mistake may invalidate consent, it
should refer to the substance of the thing which is the object of
the contract, or to those conditions which have principally
moved one or both parties to enter into a contract. x x x
The preponderance of evidence leans in favor of intervenor who
even utilized the statement of the divorce lawyer of petitioner
Sylvia (Mr. Penrod) in support of the fact that intervenor was
358
SUPREME COURT REPORTS ANNOTATED
De Leon vs. Court of Appeals
ing, however, the issue of whether there was mistake of fact on
the part of intervenor or not, this Court could not see a valid
cause or consideration in favor of intervenor Macaria De Leon
having signed Exhibits E to E-2. For even if petitioner Sylvia
had confirmed Mr. Penrods statement during the divorce
proceedings in the United States that she would undertake to
eliminate her hereditary rights in the event of the property
settlement, under Philippine laws, such contract would likewise
be voidable, for under Art. 1347 of the New Civil Code no
contract may be entered into upon future inheritance.
We do not subscribe to the aforestated view of the trial court.
Article 1335 of the Civil Code provides:
x x x.
There is intimidation when one of the contracting parties is
compelled by a reasonable and well-grounded fear of an
imminent and grave evil upon his person or property, or upon
the person or property of his spouse, descendants or
ascendants, to give his consent.
To determine the degree of the intimidation, the age, sex and
condition of the person shall be borne in mind.
360
SUPREME COURT REPORTS ANNOTATED
De Ocampo, Jr. vs. National Labor Relations Commission
and its resolution dated November 24, 1987 are AFFIRMED.
SO ORDERED.
Narvasa (Chairman), Cruz and Gancayco, JJ., concur.
Grio-Aquino, J., On leave.
Petition denied. Decision and resolution affirmed.
Note.Rules of Court mandates a liberal construction of the
rules and the pleadings to effect substantial justice (Del Rosario
vs. Hamoy, 151 SCRA 719.) [De Leon vs. Court of Appeals, 186
SCRA 345(1990)]
556
SUPREME COURT REPORTS ANNOTATED
Garcia vs. Rita Legarda, Inc.
Picazo & Agcaoili for petitioners.
Gregorio Fajarda for respondent.
DIZON, J.:
(3) Contract to Sell No. 965 (Exh. 3) covering Lot No. 27, Block 5CC was executed by the respondent in favor of Angela Alvarez
Solomon on January 8, 1948. With the written consent of the
former, Solomon also sold her rights and interest to the
petitioners on May 11, 1948.
In its answer to the complaint, the respondent averred that in
relation to the Contracts to Sell Nos. 322, 965 and 324,
petitioners paid on November 7, 1951 the 53rd, 43rd and 53rd
installments, respectively, corresponding to the installments for
the month of July, 1951; that the petitioners, as of June 11,
1952, had failed to pay the stipulated monthly installments for
Contracts Nos. 322 and 324 corresponding to the period from
August, 1951 through June, 1952, and in the case of Contract
No. 965, from August, 1951 through May, 1952; that despite
several demands for payment of arrears made between
December, 1951 and June, 1952 by the respondent, the
petitioners had failed to pay the amounts due; and that upon the
expiration of the 90-day grace period on June 11, 1952
stipulated in the sixth paragraph of the contracts, the
respondent had cancelled them. The answer also prayed for an
award of damages and attorney's fees in the sum of P2.000.00.
On April 20, 1954 the petitioners filed a reply denying that they
were in arrears as to their obligations under the three contracts
and, further averred as affirmative defense that the cancellation
thereof was unlawful and arbitrary.
After trial the Court rendered judgment declaring Contracts Nos.
322, 324 and 965 as existing and subsisting; ordering the
respondent to accept the payments tendered by the petitioners
and to pay attorney's fees in the sum of Pl,500.00. but denied
the award of moral and exemplary damages. From this decision
the respondent appealed to the Court of Appeals from whose
decisionreversing that of the lower courtthe instant appeal
was taken.
558
SUPREME COURT REPORTS ANNOTATED
Garcia vs. Rita Legarda, Inc.
to cancel its contracts with the petitioners on the ground that it
had previously accepted late payments of the installments due
on such contracts.
"II. The Honorable Court of Appeals erred in declaring that par. 9
of the contracts in question is not in violation of Art. 130g of the
New Civil Code.
"III. The Honorable Court of Appeals erred in not declaring that
the respondent Rita Legarda, Inc., after having tolerated and
accepted previously late payments on the installments due on
the contracts, suddenly and without suitable warning and giving
of further opportunity to pay the same could not and should not
have precipitously decided to forfeit, as it actually forfeited, all
the payments which have already been made to it by
petitioners.
"IV. The Honorable Court of Appeals erred in reversing and in not
affirming the decision of the Court of First Instance of Manila in
its entirety."
The second assignment of error is based on petitioners'
contention that the questioned stipulations of the contracts are
in violation of the provisions of Article 1308 of the New Civil
Code, while the first and third are based on the claim that the
respondent having previously accepted late payments of
installments due on the contracts aforesaid, must be deemed to
have waived its right to cancel said contracts on the ground of
late payment of installments, and that, at any rate, after having
tolerated and accepted said late payments, it was arbitrary on
its part to cancel the contracts suddenly and without suitable
warning. The fifth and last assignment of error is merely a
consequence of the others.
Article 1308 of the New Civil Code reads as follows:
"The contract must bind both contracting parties; its validity or
compliance cannot be left to the will of one of them."
The above legal provision is a virtual reproduction of Article
1256 of the old Civil Code but it was so phrased as to emphasize
the principle that the contract must bind both parties. This, of
course, is based firstly, on the principle that obligations arising
from contracts have the force of law between the contracting
parties and secondly, that there must be mutuality between the
parties based on their essential equality to which is repugnant to
have one party bound by the contract leaving the other free
559
560
SUPREME COURT REPORTS ANNOTATED
Garcia vs. Rita Legarda, Inc.
have another "period of 90 days" to pay "all the amounts he
should have paid", etc., then the vendor "has the right to
declare this contract cancelled and of no effect." We have
heretofore upheld the validity of similar stipulations. In Taylor vs.
Ky Tieng Piao, etc., 43 Phil. 873, 876-878 the ruling was that a
contract expressly giving to one party the right to cancel, the
same if a resolutory condition therein agreed uponsimilar to
the one under considerationis not fulfilled, is valid, the reason
being that when the contract is thus cancelled, the agreement of
the parties is in reality being fulfilled. Indeed, the power thus
granted can not be said to be immoral, much less unlawful, for it
could be exercisednot arbitrarilybut only upon the other
contracting party committing the breach of contract of nonpayment of the installments agreed upon. Obviously, all that
said party had to do to prevent the other from exercising the
power to cancel the contract was for him to comply with his part
of the contract. And in this case, after the maturity of any
particular installment and its non-payment, the contract gave
him not only a month grace but an additional period of 90 days.
Having arrived at the above conclusions, We now come to the
question of whether or not by having previously accepted
* FIRST DIVISION.
358
358
SUPREME COURT REPORTS ANNOTATED
Allied Banking Corporation vs. Court of Appeals
party bound by the contract while leaving the other free
therefrom. The ultimate purpose is to render void a contract
and equality exists between the lessor and the lessee since they
remain with the same faculties in respect to fulfillment.
Same; Same; Words and Phrases; The clause may be renewed
for a like term at the option of the lessee, when exercised by
the lessee, results in the automatic extension of the contract of
lease under
359
360
SUPREME COURT REPORTS ANNOTATED
Allied Banking Corporation vs. Court of Appeals
indicating its abandonment of whatever rights it had under the
renewal clause. Consequently, what remains to be done is for
ALLIED to pay rentals for the continued use of the premises until
it vacated the same, computed from the expiration of the
There are two (2) main issues in this petition for review: namely,
(a) whether a stipulation in a contract of lease to the effect that
the contract may be renewed for a like term at the option of the
lessee is void for being potestative or violative of the principle
of mutuality of contracts under Art. 1308 of the Civil Code and,
corollarily, what is the meaning of the clause may be renewed
for a like term at the option of the lessee; and, (b) whether a
lessee has the legal personality to assail the validity of a deed of
donation executed by the lessor over the leased premises.
Spouses Filemon Tanqueco and Lucia Domingo-Tanqueco owned
a 512-square meter lot located at No. 2 Sarmiento Street corner
Quirino Highway, Novaliches, Quezon City, covered by TCT No.
136779 in their name. On 30 June 1978 they leased the property
to petitioner Allied Banking Corporation (ALLIED) for a monthly
rental of P1,000.00 for the first three (3) years, adjustable by
25% every three (3) years thereafter.1 The lease contract
specifically states in its Provision No. 1 that the term of this
lease shall be fourteen (14) years commencing from April 1,
1978 and may be renewed for a like term at the option of the
lessee.
1 Records, p. 45.
362
362
SUPREME COURT REPORTS ANNOTATED
Allied Banking Corporation vs. Court of Appeals
On 13 February 1991, a year before the expiration of the
contract of lease, the Tanquecos notified petitioner ALLIED that
they were no longer interested in renewing the lease.2 ALLIED
replied that it was exercising its option to renew their lease
under the same terms with additional proposals.3 Respondent
Ruben D. Tanqueco, acting in behalf of all the donee-lessors,
made a counter-proposal.4 ALLIED however rejected the
counter-proposal and insisted on Provision No. 1 of their lease
contract.
364
SUPREME COURT REPORTS ANNOTATED
Allied Banking Corporation vs. Court of Appeals
contracting parties; its validity or compliance cannot be left to
the will of one of them. This binding effect of a contract on both
parties is based on the principle that the obligations arising from
contracts have the force of law between the contracting parties,
and there must be mutuality between them based essentially on
their equality under which it is repugnant to have one party
bound by the contract while leaving the other free therefrom.
The ultimate purpose is to render void a contract containing a
condition which makes its fulfillment dependent solely upon the
uncontrolled will of one of the contracting parties.
An express agreement which gives the lessee the sole option to
renew the lease is frequent and subject to statutory restric-tions,
valid and binding on the parties. This option, which is provided in
7 8 Manresa 627.
8 G.R. No. 87047, 31 October 1990, 191 SCRA 156.
366
SUPREME COURT REPORTS ANNOTATED
Allied Banking Corporation vs. Court of Appeals
the specific terms and conditions of the renewed lease shall be.
Shall it be the same terms and conditions as in the original
contract, or shall it be under the terms and conditions as may be
mutually agreed upon by the parties after the expiration of the
existing lease?
In Ledesma v. Javellana10 this Court was confronted with a
similar problem. In that case the lessee was given the sole
option to renew the lease, but the contract failed to specify the
terms and conditions that would govern the new contract. When
the lease expired, the lessee demanded an extension under the
same terms and conditions. The lessor expressed conformity to
the renewal of the contract but refused to accede to the claim of
the lessee that the renewal should be under the same terms and
conditions as the original contract. In sustaining the lessee, this
Court made the following pronouncement:
x x x in the case of Hicks v. Manila Hotel Company, a similar
issue was resolved by this Court. It was held that such a clause
relates to the very contract in which it is placed, and does not
permit the defendant upon the renewal of the contract in which
the clause is found, to insist upon different terms than those
embraced in the contract to be renewed; and that a stipulation
to renew always relates to the contract in which it is found and
the rights granted thereunder, unless it expressly provides for
variations in the terms of the contract to be renewed.
368
SUPREME COURT REPORTS ANNOTATED
Allied Banking Corporation vs. Court of Appeals
same, computed from the expiration of the original term of the
contract on 31 March 1992 to the time it actually left the
premises on 20 February 1993, deducting therefrom the amount
of P68,400.00 consigned in court by ALLIED and any other
amount which it may have deposited or advanced in connection
with the lease. Since the old lease contract was deemed
renewed under the same terms and conditions upon the exercise
by ALLIED of its option, the basis of the computation of rentals
should be the rental rate provided for in the existing contract.
Finally, ALLIED cannot assail the validity of the deed of donation,
not being a party thereto. A person who is not principally or
subsidiarily bound has no legal capacity to challenge the validity
of the contract.12 He must first have an interest in it. Interest
within the meaning of the term means material interest, an
interest to be affected by the deed, as distinguished from a
mere incidental interest. Hence, a person who is not a party to a
contract and for whose benefit it was not expressly made cannot
maintain an action on it, even if the contract, if performed by
the parties thereto would incidentally affect him,13 except when
he is prejudiced in his rights with respect to one of the
contracting parties and can show the detriment which could
positively result to him from the contract in which he had no
intervention.14 We find none in the instant case.
WHEREFORE, the Decision of the Court of Appeals is REVERSED
and SET ASIDE. Considering that petitioner ALLIED BANKING
CORPORATION already vacated the leased premises as of 20
February 1993, the renewed lease contract is deemed
terminated as of that date. However, petitioner is
__________________
* FIRST DIVISION.
667
667
DKC Holdings Corporation vs. Court of Appeals
tracts for the payment of money debts are not transmitted to
the heirs of a party, but constitute a charge against his estate.
Thus, where the client in a contract for professional services of a
lawyer died, leaving minor heirs, and the lawyer, instead of
presenting his claim for professional services under the contract
to the probate court, substituted the minors as parties for his
client, it was held that the contract could not be enforced
against the minors; the lawyer was limited to a recovery on the
basis of quantum meruit.In American jurisprudence, (W)here
acts stipulated in a contract require the exercise of special
knowledge, genius, skill, taste, ability, experience, judgment,
discretion, integrity, or other personal qualification of one or
both parties, the agreement is of a personal nature, and
terminates on the death of the party who is required to render
such service.
Same; Same; There is privity of interest between an heir and his
deceased predecessorhe only succeeds to what rights his
predecessor had and what is valid and binding against the latter
is also valid and binding as against the former.It is futile for
Victor to insist that he is not a party to the contract because of
the clear provision of Article 1311 of the Civil Code. Indeed,
being an heir of Encarnacion, there is privity of interest between
him and his deceased mother. He only succeeds to what rights
his mother had and what is valid and binding against her is also
valid and binding as against him.
Same; Same; Lease; The death of a party does not excuse
nonperformance of a contract which involves a property right,
and the rights and obligations thereunder pass to the personal
representatives of the deceased.In the case at bar, the subject
matter of the contract is likewise a lease, which is a property
right. The death of a party does not excuse nonperformance of a
contract which involves a property right, and the rights and
668
SUPREME COURT REPORTS ANNOTATED
DKC Holdings Corporation vs. Court of Appeals
De Borja, Medialdea, Bello, Guevarra, Serapio & Gerodias for
petitioner.
Jesus E.
respondent.
Mendoza
and
Oscar
T.
Mercado
for
private
YNARES-SANTIAGO, J.:
670
SUPREME COURT REPORTS ANNOTATED
DKC Holdings Corporation vs. Court of Appeals
which was raffled off to Branch 171 of the Regional Trial Court of
Valenzuela. Petitioner prayed for the surrender and delivery of
possession of the subject land in accordance with the Contract
terms; the surrender of title for registration and annotation
thereon of the Contract; and the payment of P500,000.00 as
actual damages, P500,000.00 as moral damages, P500,000.00
as exemplary damages and P300,000.00 as attorneys fees.
Meanwhile, on May 8, 1990, a Motion for Intervention with
Motion to Dismiss4 was filed by one Andres Lanozo, who claimed
that he was and has been a tenant-tiller of the subject property,
which was agricultural riceland, for forty-five years. He
questioned the jurisdiction of the lower court over the property
and invoked the Comprehensive Agrarian Reform Law to protect
his rights that would be affected by the dispute between the
original parties to the case.
On May 18, 1990, the lower court issued an Order5 referring the
case to the Department of Agrarian Reform for preliminary
determination and certification as to whether it was proper for
trial by said court.
On July 4, 1990, the lower court issued another Order6 referring
the case to Branch 172 of the RTC of Valenzuela which was
designated to hear cases involving agrarian land, after the
Department of Agrarian Reform issued a letter-certification
stating that referral to it for preliminary determination is no
longer required.
On July 16, 1990, the lower court issued an Order denying the
Motion to Intervene,7 holding that Lanozos rights may well be
ventilated in another proceeding in due time.
After trial on the merits, the RTC of Valenzuela, Branch 172
rendered its Decision on January 4, 1993, dismissing the
Complaint and ordering petitioner to pay Victor P30,000.00 as
______________
(B)
672
SUPREME COURT REPORTS ANNOTATED
DKC Holdings Corporation vs. Court of Appeals
The issue to be resolved in this case is whether or not the
Contract of Lease with Option to Buy entered into by the late
Encarnacion Bartolome with petitioner was terminated upon her
death or whether it binds her sole heir, Victor, even after her
demise.
Both the lower court and the Court of Appeals held that the said
contract was terminated upon the death of Encarnacion
Bartolome and did not bind Victor because he was not a party
thereto.
Article 1311 of the Civil Code provides, as follows
ART. 1311. Contracts take effect only between the parties, their
assigns and heirs, except in case where the rights and
obligations arising from the contract are not transmissible by
their nature, or by stipulation or by provision of law. The heir is
not liable beyond the value of the property he received from the
decedent.
xxx
xxx
x x x.
674
SUPREME COURT REPORTS ANNOTATED
DKC Holdings Corporation vs. Court of Appeals
As early as 1903, it was held that (H)e who contracts does so
for himself and his heirs.12 In 1952, it was ruled that if the
predecessor was duty-bound to reconvey land to another, and at
his death the reconveyance had not been made, the heirs can
be compelled to execute the proper deed for reconveyance. This
was grounded upon the principle that heirs cannot escape the
legal consequence of a transaction entered into by their
predecessor-in-interest because they have inherited the
property subject to the liability affecting their common
ancestor.13
It is futile for Victor to insist that he is not a party to the contract
because of the clear provision of Article 1311 of the Civil Code.
Indeed, being an heir of Encarnacion, there is privity of interest
between him and his deceased mother. He only succeeds to
what rights his mother had and what is valid and binding against
her is also valid and binding as against him.14 This is clear from
Paraaque Kings Enterprises vs. Court of Appeals,15 where this
Court rejected a similar defense
With respect to the contention of respondent Raymundo that he
is not privy to the lease contract, not being the lessor nor the
lessee referred to therein, he could thus not have violated its
provisions, but he is nevertheless a proper party. Clearly, he
stepped into the shoes of the owner-lessor of the land as, by
virtue of his purchase, he assumed all the obligations of the
lessor under the lease contract. Moreover, he received benefits
in the form of rental payments. Furthermore, the complaint, as
well as the petition, prayed for the annulment of the sale of the
properties to him. Both pleadings also alleged collusion between
12 Eleizegui v. Lawn Tennis Club, G.R. No. 967, 2 Phil. 309, 313
(1903), citing Article 1257 of the old Civil Code.
13 Carillo v. Salak de Paz, G.R. No. L-4133, 91 Phil. 265 (1952).
14 See Galsinao v. Austria, G.R. No. L-7918, 97 Phil. 82 87
(1955).
15 G.R. No. 111538, 268 SCRA 727, 745 (1997).
675
One request, Your Honor. The last payment which was allegedly
made in January 1990 just indicate in that stipulation that it was
issued November of 1989 and postdated Janaury 1990 and then
we will admit all.
COURT:
676
SUPREME COURT REPORTS ANNOTATED
DKC Holdings Corporation vs. Court of Appeals
COURT:
Coming now to the issue of tenancy, we find that this is not for
this Court to pass upon in the present petition. We note that the
Motion to Intervene and to Dismiss of the alleged tenant, Andres
Lanozo, was denied by the lower court and that such denial was
never made the subject of an appeal. As the lower court stated
in its Order, the alleged right of the
_____________
under
the
678
SUPREME COURT REPORTS ANNOTATED
People vs. Delos Santos
ily and the illegitimate family. (Manuel vs. Ferrer, 247 SCRA 476
[1995])
No contract may be entered into upon a future inheritance
except in cases expressly authorized by lawsuch a contract is
not valid and cannot be the source of any right nor the creator of
* THIRD DIVISION.
374
374
SUPREME COURT REPORTS ANNOTATED
Marmont Resort Hotel Enterprises vs. Guiang
given his consent to the execution thereof by his wife.Article
165 and 172 state the general principle under our civil law, that
the wife may not validly bind the conjugal partnership without
the consent of the husband, who is legally the administrator of
the conjugal partnership. In this particular case, however, as
noted earlier, the second Memorandum of Agreement, although
ostensibly contracted solely by Aurora Guiang with Maris
Trading, was also signed by her husband Federico, as one of the
witnesses thereto. This circumstance indicates not only that
Federico was present during the execution of the agreement but
also that he had, in fact, given his consent to the execution
thereof by his wife Aurora. Otherwise, he should not have
appended his signature to the document as witness. Respondent
spouses cannot now disown the second Memorandum of
Agreement as their effective consent thereto is sufficiently
manifested in the document itself.
375
Marmont Resort Hotel Enterprises vs. Guiang
rectly pointed out by the trial court and the appellate court, the
respondent spouses could not have prevented Maris Trading
from entering the property possessory rights over which had
thus been acquired by Maris Trading. That respondent spouses
remained in physical possession of that particular bit of land, is
of no moment; they did so simply upon the sufferance of Maris
Trading. Had Maris Trading, and not the respondent spouses,
been in physical possession, we believe that Marmont would
have been similarly entitled to compel Maris Trading to give it
(Marmont) access to the site involved. The two (2) courts below
failed to take adequate account of the fact that the sole purpose
of Maris Trading in acquiring possessory rights over that specific
portion of the land where well and pump and piping had been
installed, was to supply the water requirements of petitioners
hotel. That said purpose was known by respondent spouses, is
made explicit by the second Memorandum of Agreement. Maris
Trading itself had no need for a water supply facility; neither did
the respondent spouses. The water facility was intended solely
for Marmont Resort Hotel. The interest of Marmont cannot
therefore be regarded as merely incidental. Finally, even if it
be assumed (for purposes of argument merely) that the second
Memorandum of Agreement did not constitute a stipulation pour
autrui, still respondent spouses, in the circumstances of this
case, must be regarded as having acted contrary to the
principles of honesty, good faith and fair dealing embodied in
Articles 19 and 21 of the Civil Code when they refused petitioner
Marmont access to the water facility to inspect and repair the
same and to increase its capacity and thereby to benefit from it.
In so doing, respondent spouses forced petitioner Marmont to
locate an alternative source of water for its hotel which of course
involved expenditure of money and perhaps loss of hotel
revenues. We believe they should respond in damages.
376
SUPREME COURT REPORTS ANNOTATED
Marmont Resort Hotel Enterprises vs. Guiang
Regalado C. Salvador for respondents.
FELICIANO, J.:
The present Petition for Review seeks to set aside the Decision
dated 9 December 1986 of the Court of Appeals in C.A.G.R. CV
03299. The appellate court affirmed a Decision dated 31 May
1983 of Branch 83 of the Regional Trial Court of Olongapo City
dismissing the complaint in Civil Case No. 2896-C filed by
petitioner company against private respondent spouses.
On 2 May 1975, a Memorandum of Agreement was executed
between Maris Trading and petitioner Marmont Resort Hotel
Enterprises, Inc. (Marmont), a corporation engaged in the
378
SUPREME COURT REPORTS ANNOTATED
Marmont Resort Hotel Enterprises vs. Guiang
III
The issues left to be ventilated during the trial are the following:
1. Whether defendants has actually prohibited the plaintiff
[from] making repairs, [on] the pump constructed by Maris
Trading for the plaintiff under the agreement Exhibit A, if so;
2. Whether defendants [have] the right to prohibit the Maris
Trading from performing the repairs; and if not
3. Whether defendants are liable for damages under the human
relations provision of the Civil Code.
On 1 January 1980, the Guiang spouses moved to dismiss the
Complaint.5 The spouses there assailed the validity of the
second Memorandum of Agreement, alleging that the subject
matter thereof involved conjugal property alienated by Aurora
Guiang without the marital consent of her husband, Federico
Guiang. Further, it was alleged that the land upon which the
_______________
5 Id., p. 4.
379
380
SUPREME COURT REPORTS ANNOTATED
Marmont Resort Hotel Enterprises vs. Guiang
second Memoranda of Agreement are not properly considered as
forming part of the record of this case, because neither had
been formally presented and offered in evidence at the trial of
Civil Case No. 2896-C. The record shows, however, as noted
earlier, that at the pre-trial conference held on 2 October 1980,
both petitioner Marmont and respondent spouses had agreed
upon a stipulation of facts and issues recognizing the existence
of those same two (2) agreements. Such stipulation of facts
constitutes a judicial admission, the veracity of which requires
no further proof and which may be controverted only upon a
clear showing that such stipulation had been entered into
382
SUPREME COURT REPORTS ANNOTATED
Marmont Resort Hotel Enterprises vs. Guiang
That the First Party (i.e., Maris Trading) has dug, drilled and
tapped water source for Marmont Resort, located at Bo. Barretto,
Olongapo City in accordance with their agreement executed on
May 2, 1975 and notarized before Isagani M. Jungco, Notary
Public and entered as Doc. No. 166; Page No. 135; Book No. XV;
Series of 1975.
That the First Party has erected, built and drilled for the water
source of Marmont Resort on the land owned by the Second
Party [respondent spouses] at the corner of J. Montelibano Street
and Maquinaya Drive (Provincial Road) with the latters
permission; x x x (Italics supplied)
The above paragraphs establish, among other things, that
construction work had been performed by Maris Trading on the
land occupied by respondent spouses; that such construction
work had been performed in accordance with terms and
conditions stipulated in the first Memorandum of Agreement and
that the purpose of the work was to build a water supply facility
for petitioner Marmont. The same excerpts also show that the
work so performed was with the knowledge and consent of the
Guiang spouses, who were then occupying the land.
It is clear from the foregoing stipulations that petitioner Marmont
was to benefit from the second Memorandum of Agreement. In
fact, said stipulations appear to have been designed precisely to
benefit petitioner and, thus, partake of the nature of stipulations
pour autrui, contemplated in Article 1311 of the Civil Code.
A stipulation pour autrui is a stipulation in favor of a third person
conferring a clear and deliberate favor upon him, which
stipulation is found in a contract entered into by parties neither
of whom acted as agent of the beneficiary.12 We believe and so
hold that the purpose and intent of the stipulating parties (Maris
Trading and respondent spouses) to benefit the third person
(petitioner Marmont) is sufficiently clear in the second
Memorandum of Agreement. Marmont was not of course a party
to that second Agreement but, as correctly pointed out by the
trial court and the appellate court, the respondent spouses could
not have prevented Maris Trading from enter_______________
384
SUPREME COURT REPORTS ANNOTATED
Marmont Resort Hotel Enterprises vs. Guiang
GRANTED. The Decision dated 9 December 1986 of the Court of
Appeals in C.A.G.R. CV No. 03299, as well as the Decision
dated 31 May 1983 of the Regional Trial Court of Olongapo City
in Civil Case No. 2896-C, are REVERSED. This case is REMANDED
to the trial court for determination, in further proceedings
consistent with this decision, of the amount of damages
petitioner is entitled to receive from respondent spouses. No
pronouncement as to costs.
SO ORDERED.
Fernan (C.J.), Gutierrez, Jr., Bidin and Corts, JJ., concur.
Petition granted. Decision reversed.
Notes.Petitioners are estopped to raise the question of
jurisdiction, having submitted their cause voluntarily to the
jurisdiction of the trial court. (Lee vs. Municipal Trial Court of
Legaspi City, Br. 1, 145 SCRA 408.)
Petitioners are not in estoppel to question the subsequent letter
agreement as they never acknowledged full payment by
respondent MWSS. (Integrated Construction Services, Inc. vs.
Relova, 146 SCRA 360.) [Marmont Resort Hotel Enterprises vs.
Guiang, 168 SCRA 373(1988)]
* THIRD DIVISION.
539
540
SUPREME COURT REPORTS ANNOTATED
Mandarin Villa, Inc. vs. Court of Appeals
RESOLUTION
FRANCISCO, J.:
542
_______________
doing the alleged negligent act use the reasonable care and
caution which an ordinary prudent person would have used in
the same situation? If not, then he is guilty of negligence.11 The
Point of Sale (POS) Guidelines which outlined the steps that
petitioner must follow under the circumstances provides:
x x x
xxx
xxx
CARD EXPIRED
a. Check expiry date on card.
b. If unexpired, refer to CB.
_______________
544
SUPREME COURT REPORTS ANNOTATED
Mandarin Villa, Inc. vs. Court of Appeals
b.1. If valid, honor up to maximum of SPL only.
b.2. If in CB as Lost, do procedures 2a to 2e.
b.3. If in CB as Suspended/Cancelled, do not honor card.
c. If expired, do not honor card.12
546
SUPREME COURT REPORTS ANNOTATED
Ram vs. National Labor Relations Commission
WHEREFORE, the instant petition is hereby DISMISSED.
SO ORDERED.
Davide, Jr., Melo and Panganiban, JJ., concur.
Narvasa (C.J., Chairman), No part: no participation in
deliberations.
Petition dismissed.
Notes.A bank employee is grossly negligent where she
delivered several credit cards to a person who was merely
identified and described over the telephone. (Citibank, N.A. vs.
Gatchalian, 240 SCRA 212 [1995])
In order that a fortuitous event may exempt a person from
liability, it is necessary that he be free from negligencean act
of God cannot be urged for the protection of a person who has
been guilty of gross negligence in not trying to avert its results.
(Metal Forming Corporation vs. Office of the President, 247 SCRA
731 [1995]) [Mandarin Villa, Inc. vs. Court of Appeals, 257 SCRA
538(1996)]
* SECOND DIVISION.
214
214
SUPREME COURT REPORTS ANNOTATED
Young vs. Court of Appeals
conformity appear in said agreement. While there is the printed
name of Rebecca C. Young appearing at the end of the joint
motion for approval of the Compromise Agreement, she did not
her signature above her printed name, nor on the left margin of
each and every page thereof. In fact, on cross-examination, she
admitted that she was not a party to the case and that she did
not sign the aforesaid joint motion because it was not presented
to her (Rollo, p. 18) More than that, by the aforesaid actuations
of the parties and petitioners apparent lack of interest, the
intention is evident, not to include the latter either in the
onerous, or in the beneficient provisions of said agreement.
Same; Same; Stipulation pour autrui or a stipulation in favor of a
third person; Requisites.The requisites of a stipulation pour
autrui or a stipulation in favor of a third person are the following:
(1) there must be a stipulation in favor. of a third person, (2) the
stipulation must be a part, not the whole of the contract, (3) the
contracting parties must have clearly and deliberately conferred
a favor upon a third person, not a mere incidental benefit or
interest, (4) the third person must have communicated his
acceptance to the obligor before its revocation, (5) neither of the
contracting parties bears the legal representation or
authorization of the third party. (Florentino v. Encarnacion, Sr.,
79 SCRA 193 [1977]).
Same; Same; Same; Stipulation pour autrui is not present as
petitioner did not communicate her acceptance of the
stipulation whether expressly or impliedly; Sale of the property
to some other person or entity constitutes a revocation of the
grant of the right of first refusal of the petitioner.Assuming
that petitioner is correct in claiming that this is a stipulation pour
autrui, it is unrebutted that she did not communicate her
216
SUPREME COURT REPORTS ANNOTATED
218
SUPREME COURT REPORTS ANNOTATED
Young vs. Court of Appeals
Padilla,
Sarmiento
and
* FIRST DIVISION
425
VOL.98,JUNE30,1980
425
Corpus vs. Court of Appeals
legal services for a person who is a close friend. The obligation
of such a person to pay attorneys fees is based on the law of
contracts concept of facio ut des (I do and you give).WE find
respondent Davids position meritorious. While there was no
express agreement between petitioner Corpus and respondent
David as regards attorneys fees, the facts of the case support
the position of respondent David that there was at least an
implied agreement for the payment of attorneys fees. Petitioner
s act of giving the check for P2,000.00 through his aforestated
April 18, 1962 letter to respondent David indicates petitioners
commitment to pay the former attorneys fees, which is stressed
by expressing that I wish I could give more but as you know we
were banking on a SC decision reinstating me and reimbursing
my back salaries. This last sentiment constitutes a promise to
pay more upon his reinstatement and payment of his back
salaries. Petitioner ended his letter that he was looking forward
426
VOL.98,JUNE30,1980
427
Corpus vs. Court of Appeals
428
SUPREME COURT REPORTS ANNOTATED
Corpus vs. Court of Appeals
VOL.98,JUNE30,1980
429
Corpus vs. Court of Appeals
to go over the case and further said that he would send his son,
the herein defendant, to the plaintiff to find out what could be
done about the case. The defendant called up the plaintiff the
following morning for an appointment, and the plaintiff agreed to
see him in the latters office. At said conference, the defendant
requested the plaintiff to handle the case because Atty. Alvarez
had already been disenchanted and wanted to give up the case.
Although at first reluctant to handle the case, the plaintiff finally
agreed on condition that he and Atty. Alvarez would collaborate
in the case.
The defendants version of how the plaintiff came into the case
is as follows:
After the order of dismissal issued by Judge Lantin was
published in the newspapers, the plaintiff sought a conference
with the defendant at Taza de Oro, but the defendant told him
that he would rather meet the plaintiff at the Swiss Inn. Even
before the case was dismissed the plaintiff had shown interest in
the same by being present during the hearings of said case in
the sala of Judge Lantin. When the plaintiff and the defendant
met at the Swiss Inn, the plaintiff handed the defendant a
memorandum prepared by him on how he can secure the
reversal of the order of dismissal by means of a formula stated
in said memorandum. During the said occasion the plaintiff
scribbled some notes on a paper napkin (Exhibit 19). On June 28,
1960 the defendant wrote the plaintiff, sending with it a copy of
the order of Judge Lantin dated June 14, 1960 (Exhibit S).
Inasmuch as said letter, Exhibit S, already mentions the
memorandum of the
430
430
SUPREME COURT REPORTS ANNOTATED
its
the
the
the
VOL.98,JUNE30,1980
431
Corpus vs. Court of Appeals
Looking forward to a continuation of the case in the lower court,
I remain
Sincerely yours,
Illegible
xxxxx
In a reply letter dated April 25, 1962, the plaintiff returned the
check, explaining said act as follows:
April 25, 1962
My dear Marino:
432
SUPREME COURT REPORTS ANNOTATED
Corpus vs. Court of Appeals
When the case was remanded for further proceedings before
Judge Lantin, the evidence for the defendant was presented by
Atty. Alvarez with the plaintiff cooperating in the same. On June
24, 1963, Judge Lantin rendered his decision in favor of the
defendant, declaring illegal the resolution of the Monetary Board
instituted this action before this Court on July 20, 1965 (italics
supplied).
As therein defendant, herein petitioner Marino Corpus filed on
August 5, 1965 an answer with counterclaim. On
433
VOL.98,JUNE30,1980
433
Corpus vs. Court of Appeals
August 30, 1965, private respondent Atty. Juan T. David, plaintiff
therein, filed a reply with answer to the counterclaim of
petitioner.
After due trial, the lower court rendered judgment on September
4, 1967, the dispositive portion of which reads:
WHEREFORE, judgment is hereby rendered, ordering the
defendant to pay plaintiff the sum of P30,000.00 in the concept
of professional fees, and to pay the costs (pp. 112-113, CA
Record on Appeal, p. 54, rec.)
After receipt on September 7, 1967 of a copy of the afore-quoted
judgment, petitioner Marino Corpus, defendant therein, filed on
October 7, 1967 a notice of appeal from said judgment to the
Court of Appeals. In his appeal, he alleged that the lower court
erred:
1.In not holding that the plaintiffs professional services were
offered and rendered gratuitously;
2.Assuming that plaintiff is entitled to compensation in
holding that he was entitled to attorneys fees in the amount of
P30,000.00 when at most he would be entitled to only
P2,500.00;
3.In not dismissing plaintiffs complaint; and
434
SUPREME COURT REPORTS ANNOTATED
Corpus vs. Court of Appeals
Hence, the instant petition for review on certiorari, petitioner
contending that the respondent Court of Appeals erred in finding
that petitioner accepted private respondents services with the
understanding of both that he (private respondent) was to be
compensated in money; and that the fee of private respondent
was contingent (pp. 3 & 5, Petition for Certiorari, pp. 17 & 19,
rec.)
On October 1, 1975, the case was deemed submitted for
decision (p. 177, rec.), after the parties filed their respective
memoranda.
B
On January 31, 1978, private respondent Atty. Juan T. David filed
a petition to remand the case to the court a quo for execution of
VOL.98,JUNE30,1980
435
Corpus vs. Court of Appeals
It appears also that in a letter dated October 18, 1978, herein
petitioner Marino Corpus requested this Court to inquire into
what appears to be an irregularity in the issuance of the
436
SUPREME COURT REPORTS ANNOTATED
Corpus vs. Court of Appeals
ing that the case is pending appeal and review before this Court.
Likewise, the Court required Judge Jose H. Tecson to show cause
why he should not be cited for contempt for issuing an order
directing the issuance of a writ of execution and for issuing such
writ despite the pendency of the present case in the Supreme
Court.
On January 12, 1979, Judge Jose H. Tecson filed his complianceexplanation as directed by the aforesaid resolution of January 3,
1979, while private respondent Atty. Juan T. David filed on
January 30, 1979 his compliance and motion for reconsideration
after the Court has granted him an extension of time to file his
compliance.
Private respondent Atty. Juan T. David filed on February 28,
1979, a petition praying that the merits of his compliance be
resolved by the Court en banc. Subsequently, on March 26,
1979, another petition was filed by herein private respondent
asking the Chief Justice and the members of the First Division to
inhibit themselves from participating in the determination of the
merits of his compliance and for its merits to be resolved by the
Court en banc.
C
The main thrust of this petition for review is whether or not
private respondent Atty. Juan T. David is entitled to attorneys
fees.
VOL.98,JUNE30,1980
437
Corpus vs. Court of Appeals
I
WE find respondent Davids position meritorious. While there
was express agreement between petitioner Corpus and
respondent David as regards attorneys fees, the facts of the
case support the position of respondent David that there was at
least an implied agreement for the payment of attorneys fees.
Petitioners act of giving the check for P2,000.00 through his
aforestated April 18, 1962 letter to respondent David indicates
petitioners commitment to pay the former attorneys fees,
which is stressed by expressing that I wish I could give more
but as you know we were banking on a SC decision reinstating
me and reimbursing my back salaries. This last sentiment
constitutes a promise to pay more upon his reinstatement and
payment of his back salaries. Petitioner ended his letter that he
was looking forward to a continuation of the case in the lower
court, x x x, to which the certiorari-mandamus-quo warranto
by
the
Supreme
Court
for
further
438
SUPREME COURT REPORTS ANNOTATED
Corpus vs. Court of Appeals
Moreover, there is no reason to doubt respondent Davids
assertion that Don Rafael Corpus, the late father of petitioner
Corpus, requested respondent to help his son, whose suit for
reinstatement was dismissed by the lower court; that pursuant
to such request, respondent conferred in his office with
petitioner, who requested respondent to handle the case as his
lawyer, Atty. Alvarez, was already disenchanted and wanted to
VOL.98,JUNE30,1980
439
Corpus vs. Court of Appeals
emphasize the fact that petitioner Corpus was aware all the time
that he was liable to pay attorneys fees to respondent David
which is therefore inconsistent with his position that the services
of respondent David were gratuitous, which did not entitle said
respondent to compensation.
It may be advanced that respondent David may be faulted for
not reducing the agreement for attorneys fees with petitioner
Corpus in writing. However, this should be viewed from their
special relationship. It appears that both have been friends for
several years and were co-members of the Civil Liberties Union.
In addition, respondent David and petitioners father, the late
Rafael Corpus, were also close friends. Thus, the absence of an
express contract for attorneys fees between respondent David
and petitioner Corpus is no argument against the payment of
attorneys fees, considering their close relationship which
signifies mutual trust and confidence between them.
II
Moreover, the payment of attorneys fees to respondent David
may also be justified by virtue of the innominate contract of
facio ut des (I do and you give) which is based on the principle
that no one shall unjustly enrich himself at the expense of
another. innominate contracts have been elevated to a codal
provision in the New Civil Code by providing under Article 1307
that such contracts shall be regulated by the stipulations of the
parties, by the general provisions or principles of obligations and
contracts, by the rules governing the most analogous nominate
contracts, and by the customs of the people. The rationale of
this article was stated in the 1903 case of Perez vs. Pomar (2
Phil. 982). In that case, the Court sustained the claim of plaintiff
Perez for payment of services rendered against defendant Pomar
despite the absence of an express contract to that effect, thus:
It does not appear that any written contract was entered into
between the parties for the employment of the plaintiff as
interpreter, or that any other innominate contract was entered
into; but
440
440
SUPREME COURT REPORTS ANNOTATED
Corpus vs. Court of Appeals
whether the plaintiffs services were solicited or whether they
were offered to the defendant for his assistance, inasmuch as
these services were accepted and made use of by the latter, we
must consider that there was a tacit and mutual consent as to
the rendition of the services. This gives rise to the obligation
upon the person benefited by the services to make
compensation therefor, since the bilateral obligation to render
service as interpreter, on the one hand, and on the other to pay
for the service rendered, is thereby incurred. (Arts. 1088, 1089,
and 1262 of the Civil Code).
xxxxxx
x x x. Whether the service was solicited or offered, the fact
remains that Perez rendered to Pomar services as interpreter. As
it does not appear that he did this gratuitously, the duty is
imposed upon the defendant, he having accepted the benefit of
the service, to pay a just compensation therefor, by virtue of the
innominate contract of facio ut des implicitly established.
xxxxx.
x x x because it is a well-known principle of law that no one
shouls be permitted to enrich himself to the damage of another
(italics supplied; see also Tolentino, Civil Code of the Philippines,
p. 388, Vol. IV [1962], citing Estate of Heguera vs. Tandra, 81
Phil. 404 [1948]; Arroyo vs. Azur. 76 Phil. 493 [1946]; and Perez
vs. Pomar, 2 Phil. 682 [1903]).
WE reiterated this rule in Pacific Merchandising Corp. vs.
Consolacion Insurance & Surety Co., Inc. (73 SCRA 564 [1976])
citing the case of Perez v. Pomar, supra, thus:
Where one has rendered services to another, and these
services are accepted by the latter, in the absence of proof that
the service was rendered gratuitously, it is but just that he
should pay a reasonable remuneration therefor because it is a
well-known principle of law, that no one should be permitted to
enrich himself to the damage of another (italics supplied).
Likewise, under American law, the same rule obtains (7 CJS
1079; F.L Stitt & Co. v. Powell, 114 So 375).
441
VOL.98,JUNE30,1980
441
Corpus vs. Court of Appeals
III
There was no contract for contingent fee between Corpus and
respondent David. Contingent fees depend on an express
contract therefor. Thus, an attorney is not entitled to a
percentage of the amount recovered by his client in the absence
of an express contract to that effect (7 C.J.S. 1063 citing
Thurston v. Travelers Ins. Co., 258 N.W. 66, 128 Neb. 141).
Where services were rendered without any agreement
whatever as to the amount or terms of compensation, the
attorney is not acting under a contract for a contingent fee, and
a letter by the attorney to the client stating that a certain sum
would be a reasonable amount to charge for his services and
adding that a rate of not less than five percent nor more than
ten would be reasonable and customary does not convert the
original agreement into a contract for a contingent fee (7 C.J.S.
1063 citing Fleming v. Phinizy, 134 S.E. 814).
While there was no express contract between the parties for the
payment of attorneys fees, the fact remains that respondent
David rendered legal services to petitioner Corpus and therefore
as aforestated, is entitled to compensation under the innominate
contract ot facio ut des. And such being the case, respondent
David is entitled to a reasonable compensation.
IV
In determining a reasonable fee to be paid to respondent David
as compensation for his services, on a quantum meruit basis, it
is proper to consider all the facts and circumstances obtaining in
this case particularly the following:
The extent of the services rendered by respondent David should
be considered together with the extent of the services of
petitioners other counsel, Atty. Rosauro Alvarez. It is undisputed
that Atty. Rosauro Alvarez had rendered legal services as
principal counsel for more than six (6) years while respondent
David has rendered legal services as collaborating
442
442
SUPREME COURT REPORTS ANNOTATED
Corpus vs. Court of Appeals
counsel for almost four (4) years. It appears that Atty. Alvarez
started to render legal services after the administrative case
was filed on March 7, 1958 against petitioner Corpus. He
represented petitioner Corpus in the hearing of said case which
was conducted from May 5, 1958 to October 8, 1958, involving
VOL.98,JUNE30,1980
443
Corpus vs. Court of Appeals
Moreover, after the lower court rendered judgment on June 24,
1963 ordering the reinstatement and payment of back salaries
to petitioner Corpus and awarding him P5,000.00 by way of
attorneys fees, both petitioner Corpus and the respondents in
said case appealed the judgment. At that stage, respondent
David again prepared and signed for Atty. Alvarez and himself,
the necessary pleadings, including two appeal briefs. And in
addition, he made oral arguments in the hearings of motions
filed in the lower court before the records of the case were
forwarded to the appellate court. Furthermore, while it appears
that it was Atty. Alvarez who laid down the basic theory and
foundation of the case of petitioner Corpus in the administrative
case and later in the civil case, respondent David also advanced
legal propositions. Petitioner Corpus contends that said legal
propositions were invariably rejected by the courts. This is,
however, of no moment because the fact remains that
respondent David faithfully rendered legal services for the
success of petitioners case.
The benefits secured for petitioner Corpus may also be
considered in ascertaining what should be the compensation of
respondent David. It cannot be denied that both Atty. Alvarez
and respondent David were instrumental in obtaining substantial
benefits for petitioner Corpus which consisted primarily of his
reinstatement, recovery of back salaries and the vindication of
his honor and reputation. But, note should also be taken of the
fact that respondent David came at the crucial stage when the
case of petitioner Corpus was dismissed by the lower court.
Atty. Rosauro Alvarez admittedly was paid by petitioner Corpus
the sum of P20,000.00 or at most P22,500.00 (T.s.n., Jan. 11,
1967, pp. 34-35; T.s.n., Feb. 10, 1967, pp. 48-49). On the other
444
SUPREME COURT REPORTS ANNOTATED
Corpus vs. Court of Appeals
In his complaint in the instant case, he asked for P75,000.00
as his attorneys fees. The records reveal that petitioner Corpus
actually received only P150,158.50 as back salaries and
emoluments after deducting taxes as well as retirement and life
insurance premiums due to the GSIS. The amount thus claimed
by respondent David represents 50% of the amount actually
received by petitioner Corpus. The lower court, however,
awarded only P30,000.00 and it was affirmed by the Court of
Appeals.
Considering the aforestated circumstances, WE are of the
opinion that the reasonable compensation of respondent David
should be P20,000.00.
V
WE find private respondent Juan T. David and Judge Jose H.
Tecson, Presiding Judge of the Court of First Instance of Manila,
Branch V, guilty of contempt of court.
Respondent David filed on or about September 13, 1978 a
motion with the court a quo for the issuance of a writ of
execution to enforce its decision in Civil Case No. 61802, subject
of the present petition, knowing fully well that it was then still
VOL.98,JUNE30,1980
445
Corpus vs. Court of Appeals
respect due to the courts of justice and judicial officers (Section
20 (b), Rule 138 of the Revised Rules of Court). Likewise, Canon
1 of the Canons of Professional Ethics expressly provides that: It
is the duty of the lawyer to maintain towards the Courts a
respectful attitude, not for the sake of the temporary incumbent
of the judicial office, but for the maintenance of its supreme
importance. And this Court had stressed that the duty of an
attorney to the courts can only be maintained by rendering no
service involving any disrespect to the judicial office which he is
bound to uphold (Rheem of the Philippines v. Ferrer, 20 SCRA
441, 444 [1967] citing the case of Lualhati v. Albert, 57 Phil. 86,
92 [1932]).
Moreover, this Court takes judicial notice of the fact that herein
respondent David, in the previous case of Integrated
Construction Services, Inc. and Engineering Construction, Inc. v.
Relova (65 SCRA 638 [1975]), had sent letters addressed to the
then Chief Justice Querube C. Makalintal and later to the late
Chief Justice Fred Ruiz Castro, requesting for the issuance of
certification on the basis of the aforementioned provision of the
New Constitution which were not given due consideration. And
knowing this, respondent David should have been more prudent
and cautious in filing with the court a quo any motion for
execution.
Furthermore, there was even a taint of arrogance and defiance
on the part of respondent David in not filing his comment to the
letter-complaint dated October 18, 1978 of petitioner Corpus, as
required by this Court in its November 3, 1978 and December 4,
1978 resolutions which were duly received by him; and instead,
he sent on December 13, 1978 a letter requesting to be excused
from the filing of his comment on the lame excuse that
petitioners letter-complaint was not verified.
On the part of Judge Jose H. Tecson, his presumptuous and
precipitate act of granting the motion for execution of
respondent David likewise constitutes disrespect to, as well as
disregard of, the authority of this Court because he knew for a
fact that the case was still pending appeal as the records thereof
had not yet been remanded to it and that no certification has
been issued by this Court. As a judicial officer, Judge
446
446
SUPREME COURT REPORTS ANNOTATED
VOL.98,JUNE30,1980
447
Corpus vs. Court of Appeals
while the case is pending appeal before the Supreme Court, and
a repetition of said acts would be dealt with more severely.
WHEREFORE, PETITIONER R. MARINO CORPUS IS HEREBY
DIRECTED TO PAY RESPONDENT ATTY. JUAN T. DAVID THE SUM
OF TWENTY THOUSAND (P20,000.00) PESOS AS ATTORNEYS
FEES.
RESPONDENT ATTY. JUAN T. DAVID AND JUDGE JOSE H. TECSON
OF THE COURT OF FIRST INSTANCE OF MANILA, BRANCH V, ARE
HEREBY DECLARED GUILTY OF CONTEMPT AND ARE HEREBY
REPRIMANDED, WITH A WARNING THAT REPETITION OF THE
SAME OR SIMILAR ACTS WILL BE DEALT WITH MORE SEVERELY.
COSTS AGAINST PETITIONER.
SO ORDERED.
Teehankee (Chairman), Fernandez and Melencio-Herrera, JJ.,
concur.
Guerrero, J., is on leave.
De Castro, J., in the result.
Notes.No valid notice of attorneys lien is made where the
same was filed with the trial court at the time when the record of
the case was in the Court of Appeals. (G. A. Machineries, Inc. vs.
Court of Appeals, 79 SCRA 291).
448
SUPREME COURT REPORTS ANNOTATED
Corpus vs. Court of Appeals
A counsels fee of P10,000.00 is fair where the adverse party
acted in wanton disregard of respondents rights. (St. Peter
Memorial Park, Inc. vs. Cleofas, 92 SCRA 389).
Attorneys fees awarded by inferior court may be reduced motu
proprio by the appellate court. (Ramos vs. Court of Appeals, 63
SCRA 331).
In impairment of contract, attorneys fees of 10% of the award is
reasonable. (Central Bank of the Philippines vs. Court of Appeals,
63 SCRA 431).
Even if counsel has already an existing right to his attorneys
fees at the time of issuance of the writ of preliminary mandatory
injunction in his favor, said writ will still be vitiated by absence
of showing that the non-issuance thereof would cause