PONCE DE LEON V SYJUCO, INC.BAUTISTA; October 31, 1951

NATURE This is an appeal from a decision of the Court of First Instance of Manila absolving defendant Santiago Syjuco, Inc. of the complaint and condemning the plaintiff to pay to said defendant the sum of P18,000 as principal and the further sum of P5,130 as interest thereon from August 6, 1944, to May 5, 1949, or a total of P23,130, Philippine currency, with interest thereon at the rate of 6% per annum from May 6, 1949, until said amount is paid in full, with costs against the plaintiff. FACTS- The appellee, Philippine National Bank, was the owner of 2 parcels of land known as Lots 871 and 872 of the Murcia Cadastre, Negros Occidental.- On March 9, 1936 the Bank executed a contract to sell the said properties to the plaintiff, Jose Ponce de Leon, the total price of P26,300, payable as follows: (a) P2,630 upon the execution of the said deed; and (b) the balance P23,670 in 10 annual amortizations, the first amortization to fall due one year after the execution of the said contract.- On May 5, 1944, Ponce de Leon obtained a loan from Santiago Syjuco, Inc., in the amount of P200,000 in Japanese Military Notes, payable within one (1) year from May 5, 1948. - It was also provided in said promissory note that the promisor (Ponce de Leon) could not pay, and the payee (Syjuco) could not demand, the payment of said note except within the aforementioned period. - To secure the payment of said obligation, Ponce de Leon mortgaged in favor of Syjuco the parcels of land which he agreed to purchase from the Bank.- On May 6, 1944, Ponce de Leon paid the Bank of the balance of the purchase price amounting to P23,670 in Japanese Military notes and, on the same date, the Bank executed in favor of Ponce de Leon, a deed of absolute sale of the aforementioned parcels of land.- The deed of sale executed by the Bank in favor of Ponce de Leon and the deed of mortgage executed by Ponce de Leon in favor of Syjuco were registered in the Office of the Register of Deeds. - On July 31, 1944, Ponce de Leon obtained an additional loan from Syjuco in the amount of P16,000 in Japanese Military notes and executed in the latter's favor a promissory note of the same tenor as the one had previously executed.- On several occasions in October, 1944, Ponce de Leon tendered to Syjuco the amount of P254,880 in Japanese military notes in full payment of his indebtedness to Syjuco.- The amount tendered included not only the interest up to the time of the tender, but also all the interest up to May 5, 1948.- Ponce de Leon also wrote to Syjuco a letter tendering the payment of his indebtedness, including interests up to May 5, 1948.- Syjuco, however, refused to accept such repeated tenders. - During the trial, Ponce de Leon explained that he wanted to settle his obligations because as a member of the guerilla forces he was being hunted by the Japanese and he was afraid of getting caught and killed.- In view of Syjuco's refusal to accept the payment tendered by Ponce de Leon, the latter deposited with the Clerk of Court P254,880.- On November 4, 1944, Ponce de Leon filed a complaint consigning the amount so deposited to Syjuco. - On May 15, 1946, Ponce de Leon filed a petition for the reconstitution of Transfer Certificates of Title Nos. 17175 and 17176 in the name of the Bank. - The Court ordered the reconstitution of said titles.

- On August 16, 1946, Ponce de Leon obtained an overdraft account from the Bank in an amount not exceeding P135,000.- Ponce de Leon executed a mortgage of the two parcels of land covered by the reconstituted Transfer Certificates of Title in favor of the said Bank to secure the payment of any amount, which he may obtain from the Bank under the aforementioned overdraft account. - The overdraft account was granted by the Bank to Ponce de Leon in good faith, said Bank not being aware of the mortgage which Ponce de Leon had executed in favor of Syjuco and the said Bank believing that the said properties had no lien or encumbrance.- Syjuco claimed that Ponce de Leon had violated the conditions of the mortgage which Ponce de Leon had executed in its favor. - Syjuco prayed that the mortgage executed by Ponce de Leon in favor of the Bank be declared null and void. - The lower court absolved Syjuco from Ponce de Leon's complaint and condemned Ponce de Leon to pay Syjuco the total amount of P23,130 with interest at the legal rate from May 6, 1949, until fully paid.

ISSUES 1. WON the plaintiff is justified in accelerating the payment of the obligation because he was willing to pay the interests due up to the date of its maturity2. WON the consignation made by the plaintiff is valid in the light of the law and the stipulations agreed upon in the two promissory notes signed by the plaintiff -

HELD 1. NO.Ratio- In the 2 promissory notes, it was expressly agreed upon that plaintiff shall pay the loans "within one year from May 5, 1948, . . . peso for peso in the coin or currency of the Government of the Philippines that, at the time of payment above fixed it is the legal tender for public and private debts, with interests at the rate of 6% per annum, payable in advance for the first year, and semi-annually in advance during the succeeding years".- And that, the period above set forth having been established for the mutual benefit of the debtor and creditor, the former binds himself to pay, and the latter not to demand the payment of, the loans except within the period above mentioned. Reasoning - Under the law, in a monetary obligation contracted with a period, the presumption is that the same is deemed constituted in favor of both the creditor and the debtor unless from its tenor or from other circumstances it appears that the period has been established for the benefit of either one of them (Art. 1127, Civil Code). - Here no such exception or circumstance exists.- It may be argued that the creditor has nothing to lose but everything to gain by the acceleration of payment of the obligation because the debtor has offered to pay all the interests up to the date it would become due.- But this argument loses force if we consider that the payment of interests is not the only reason why a creditor cannot be forced to accept payment contrary to the stipulation. - There are other reasons why this cannot be done. One of them is that the creditor may want to keep his money invested safely instead of having it in his hands, or that the creditor by fixing a period protects himself against sudden decline in the purchasing power of the currency loaned specially at a time when there are many factors that influence the fluctuation of the currency.

- Unless the creditor consents, the debtor has no right to accelerate the time of payment even if the premature tender included an offer to pay principal and interest in full.

2. NO. The consignation is invalid, and, therefore, did not have the effect of relieving him of his obligation.Ratio - In order that consignation may be effective, the debtor must first comply with certain requirements. - In the instant case, while it is admitted a debt existed, that the consignation was made because of the refusal of the creditor to accept it, and the filing of the complaint to compel its acceptance on the part of the creditor can be considered sufficient notice of the consignation to the creditor, nevertheless, it appears that at least two of the requirements have not been complied with. - The plaintiff, before making the consignation with the clerk of the court, failed to give previous notice thereof to the person interested in the performance of the obligation.- More importantly, the obligation was not yet due and demandable when the money was consigned, because the obligation was to be paid within one year after May 5, 1948.- The consignation was made before this period matured. - The failure of these two requirements is enough ground to render the consignation ineffective. Reasoning In order that cogsignation may be effective, the debtor must first comply with certain requirements prescribed by law. The debtor must show

(1) that there was a debt due;(2) that the consignation of the obligation had been made bacause the creditor to whom tender of

payment was made refused to accept it, or because he was absent for incapacitated, or because several persons claimed to be entitled to receive the amount due (Art. 1176, Civil Code);

(3) that previous notice of the consignation have been given to the person interested in the performance of the obligation (Art. 1177, Civil Code);

(4) that the amount due was placed at the disposal of the court (Art 1178, Civil Code); and(5) that after the consignation had been made the person interested was notified thereof (Art.

1178, Civil Code).

BUCE V CADAVIDE; May 12, 2000

NATUREPetition to review the decision of the CA.

FACTS- Petitioner leased a 56-square meter parcel of land. The lease contract was for a period of fifteen years to commence on 1 June 1979 and to end on 1 June 1994 "subject to renewal for another ten (10) years, under the same terms and conditions." -Petitioner then constructed a building and paid the required monthly rental of P200. Private respondents, later demanded a gradual increase in the rental until it reached P400 in 1985. For July and August 1991, petitioner paid private respondents P1,000 as monthly rental.- On 6 December 1991, private respondents' counsel wrote petitioner informing her of the increase in the rent to P1,576.58 effective January 1992 pursuant to the provisions of the Rent Control Law. Petitioner, however, tendered checks dated 5 October 1991, 5 November 1991, 5 December 1991, 5 January 1992, 31 May 1992, and 2 January 1993 for only P400 each. Private respondents refused to accept the same.

- Petitioner filed with the RTC of Manila a complaint for specific performance with prayer for consignation, that private respondents be ordered to accept the rentals in accordance with the lease contract and to respect the lease of fifteen years, which was renewable for another ten years, at the rate of P200 a month.- In their Answer, private respondents countered that petitioner had already paid the monthly rent of P1,000 for July and August 1991. Under Republic Act No. 877, as amended, rental payments should already be P1,576.5810 per month; hence, they were justified in refusing the checks for P400 that petitioner tendered. Moreover, the phrase in the lease contract authorizing renewal for another ten years does not mean automatic renewal; rather, it contemplates a mutual agreement between the parties. - During the pendency of the controversy, counsel for private respondents wrote petitioner reminding her that the contract expired on 1 June 1994 and demanding that she pay the rentals in arrears, which then amounted to P33,000.- RTC declared the lease contract automatically renewed for ten years and considered as evidence thereof (a) the stipulations in the contract giving the lessee the right to construct buildings and improvements and (b) the filing by petitioner of the complaint almost one year before the expiration of the initial term of fifteen years. It then fixed the monthly rent at P400 from 1 June 1990 to 1 June 1994; P1,000 from 1 June 1994 until 1 June 1999; and P1,500 for the rest of the period or from 1 June 2000 to 1 June 2004, reasoning that the continuous increase of rent from P200 to P250 then P300, P400 and finally P1,000 caused "an inevitable novation of their contract."- Court of Appeals reversed the decision of the RTC, and ordered petitioner to immediately vacate the leased premises on the ground that the contract expired on 1 June 1994 without being renewed and to pay the rental arrearages at the rate of P1,000 monthly.- The Court of Appeals denied petitioner's motion for reconsideration. Hence this petition.

ISSUES1. WON the parties intended an automatic renewal of the lease contract when they agreed that the lease shall be for a period of fifteen years "subject to renewal for another ten (10) years."2. WON CA erred in ordering the petitioner to vacate the land upon expiration of the lease contract.

HELD1. NO.- Rules of interpretation: the literal meaning of the stipulations shall control if the terms of the contract are clear and leave no doubt upon the intention of the contracting parties. However, if the terms of the agreement are ambiguous resort is made to contract interpretation which is the determination of the meaning attached to written or spoken words that make the contract. Also, to ascertain the true intention of the parties, their actions, subsequent or contemporaneous, must be principally considered.- *The phrase "subject to renewal for another ten (10) years" is unclear on whether the parties contemplated an automatic renewal or extension of the term, or just an option to renew the contract; and if what exists is the latter, who may exercise the same or for whose benefit it was stipulated. -There is nothing in the stipulations in the contract and the parties' actuation that shows that the parties intended an automatic renewal or extension of the term of the contract. The fact that the lessee was allowed to introduce improvements on the property is not indicative of the intention of the lessors to automatically extend the contract. Neither the filing of the complaint a year before the expiration of the 15-year term nor private respondents' acceptance of the increased rentals has any bearing on the intention of the parties regarding renewal. It must be recalled that the filing of the complaint was even spawned by private respondents' refusal to accept the payment of monthly rental in the amount of only P400.

- Fernandez v. CA is applicable to the case at bar, thus: In a reciprocal contract like a lease, the period must be deemed to have been agreed upon for the benefit of both parties, absent language showing that the term was deliberately set for the benefit of the lessee or lessor alone . It was not specifically indicated who may exercise the option to renew, neither was it stated that the option was given for the benefit of herein petitioner. Thus, pursuant to the Fernandez ruling and Article 1196 of the Civil Code, the period of the lease contract is deemed to have been set for the benefit of both parties. Renewal of the contract may be had only upon their mutual agreement or at the will of both of them. Since the private respondents were not amenable to a renewal, they cannot be compelled to execute a new contract when the old contract terminated on 1 June 1994. It is the owner-lessor's prerogative to terminate the lease at its expiration. 2. YES- After the lease terminated on 1 June 1994 without any agreement for renewal being reached, petitioner became subject to ejectment from the premises. It must be noted, however, that private respondents did not include in their Answer with Counterclaim a prayer for the restoration of possession of the leased premises. Neither did they file with the proper Metropolitan Trial Court an unlawful detainer suit against petitioner after the expiration of the lease contact. Moreover, the issues agreed upon by the parties to be resolved during the pre-trial were the correct interpretation of the contract and the validity of private respondents' refusal to accept petitioner's payment of P400 as monthly rental. The issue of possession of the leased premises was not among the issues agreed upon by the parties or threshed out before the court a quo. Neither was it raised by private respondents on appeal. T he Court of Appeals went beyond the bounds of its authority when after interpreting the questioned provision of the lease contract in favor of the private respondents it proceeded to order petitioner to vacate the subject premises.Disposition Petition is partly GRANTED. The decision of the CA is REVERSED insofar as it ordered the petitioner to immediately vacate the leased premises, without prejudice, however, to the filing by the private respondents of an action for the recovery of possession of the subject property.

ARANETA V PHILIPPINE SUGAR ESTATES DEVT. CO.REYES; May 31, 1967

NATURE Review by certiorari

FACTS - On July 28, 1950, J. M. Tuason & Co. sold a portion of its land in Sta. Mesa Heights Subdivision, Q.C. to Philippine Sugar Estates Development (PSED) Co., Ltd., through Gregorio Araneta Inc. (GAI) for P 430, 514. In their contract of purchase and sale, the parties stipulated that the buyer will build the Sto. Domingo Church and the seller will construct streets on the NE and NW and SW sides of the land.- The buyer PSED finished the construction of the church but the seller, GAI, was unable to finish the construction of the street in the NE side because a certain third party, Manuel Abundo, who has been physically occupying a middle part thereof, refused to vacate the same. - On May 7, 1958, PSED filed a complaint against J. M. Tuason & Co, Inc., and GAI in CFI Manila, seeking to compel the latter to comply with their obligation and/or to pay damages in the event they failed or refused to perform the obligation.- Both defendants answered the complaint with GAI setting up the principal defense that the action was premature since its obligation to construct the streets in question was without a definite period which needs to be fixed first by the court in a proper suit for that purpose before a complaint for specific performance will prosper.

- After the lower court dismissed the complaint, PSED moved for a reconsideration praying that the court fix a period within which defendants will comply with their obligation to construct the streets in question. Defendant GAI opposed said motion, maintaining that plaintiff's complaint did not expressly or impliedly allege and pray for the fixing of a period to comply with its obligation and that the evidence presented at the trial was insufficient to warrant the fixing of such a period.- On July 16, 1960, the lower court amended its previous decision and, after finding that the proven facts warrant the fixing of such a period, rendered judgment giving defendant GAI, a period of Two (2) Years from notice within which to comply with its obligation under the contract: to construct streets on the NE, NW and SW sides of the land sold to plaintiff so that the same would be a block surrounded by streets on all four sides.- The case was brought to the CA by GAI and the same rendered a decision affirming that of the lower court’s, setting a period of 2 years from finality of judgment to comply with the obligation. GAI now resorted to the SC, hence this petition for certiorari

ISSUEWON the trial court and the CA erred in setting the date for the performance of the contract

HELDThe decision of the CA, affirming that of the CFI is legally untenable. It does not lie within them to fix the period of the performance of the obligation.Ratio Article 1197 is predicated on the absence of any period fixed by the parties and it involves a two-step process. The court must first determine that “the obligation does not fix a period” (or that the period is made to depend upon the will of the debtor), “but from the nature and the circumstances it can be inferred that a period was intended.” The court must then proceed to the second step, and decide what period was “probably contemplated by the parties.”Reasoning - In no case can it be logically held that the intervention of the court to fix the period for performance was warranted, for even on the assumption that the court should have found that no reasonable time or no period at all had been fixed (the trial court's amended decision nowhere declared any such fact) still, the complaint not having sought that the court should set a period, the court could not proceed to do so unless the complaint was first amended; for the original decision is clear that the complaint proceeded on the theory that the period for performance had elapsed already, that the contract had been breached and defendant was already answerable in damages.- Granting, however, that it lay within the Court's power to fix the period of performance, still the amended decision is defective in that no basis is stated to support the conclusion that the period should be set at two years after finality of the judgment. The last paragraph of Article 1197 is clear that the period can not be set arbitrarily. The law expressly prescribes that “the courts shall determine such period as may under the circumstance have been probably contemplated by the parties.”All that the trial court's amended decision says is that “the proven facts precisely warrant the fixing of such a period,” which is insufficient to explain how the two-year period given to petitioner herein was arrived at. The trial court appears to have pulled the two-year period set in its decision out of thin air, no circumstances are mentioned to support it.- The contract shows that the parties were fully aware that the land described was occupied by squatters. As the parties must have known that they could not take the law into their own hands and must resort to legal processes in evicting the squatters, they must have realized that the duration of the suits to be brought would not be under their control nor could the same be determined in advance. The conclusion is thus forced that the parties must have intended to defer the performance of the obligations under the contract until the squatters were duly evicted, as contended by the petitioner GAI.

- CA objected to this conclusion that it would render the date of performance indefinite. However, this very indefiniteness is what explains why the agreement did not specify any exact periods or dates of performance. It follows that there is no justification in law, for the setting of the date of performance at any other time than that of the eviction of the squatters occupying the land in question; and in not so holding, both the trial court and the CA committed reversible error. In addition, the case against one of the squatters, Abundo, was still pending in the CA when its decision in this case was rendered.Disposition decision appealed from is reversed. The time for the performance of the obligations of petitioner Gregorio Araneta, Inc. fixed at the date that all the squatters on affected areas are finally evicted.

CENTRAL PHILIPPINE UNIVERSITY V COURT OF APPEALSBELLOSILLO; 1995

FACTS- in 1939, Don Ramon Lopez, Sr. who was a member of the Board of Trustees of the Central Philippine College (now Central Philippine University) executed a deed of donation in favor of the latter of a parcel of land with the following annotations:

1. the land described shall be utilized by the CPU exclusively for the establishment and use of a medical college with all its buildings as part of the curriculum

2. the said college shall not sell, transfer or convey to any third party nor in any way encumber said land

3. the said land shall be called RAMON LOPEZ CAMPUS and the said college shall be under obligation to erect a cornerstone bearing that name. Any net income from the land or any of its parks shall be put in a fund to be known as the RAMON LOPEZ CAMPUS FUND to be used for improvements of said campus and erection of a building thereon

- on May 31, 1989, the heirs of Don Ramon Lopez, Sr. filed an action for annulment of donation, reconveyance and damages against CPU alleging that:

1. since 1939 up to the time the action was filed the latter had not complied with the conditions of the donation

2. that CPU had in fact negotiated with the National Housing Authority to exchange the donated property with another land owned by the latter

- CPU, in its answer alleged that:1. the right of the private respondents to file the action had prescribed2. that it did not violate any of the conditions in the deed of donation because it never used the

donated property for any other purpose than that for which it was intended3. that it did not sell, transfer, or convey it to any third party

- the TC held that petitioner failed to comply with the conditions of the donation and declared it null and void. It further directed the petitioner to execute a deed of reconveyance of the property in favor of the heirs of the donor, namely, private respondents herein-- the CA ruled that the annotations at the back of petitioner’s certificate of title were resolutory conditions breach of which should terminate the rights of the donee thus making the donation revocable. It also found that while the first condition mandated petitioner to utilize the donated property for the establishment of a medical school, the donor did not fix a period within which the condition must be fulfilled, hence, until a period was fixed for the fulfillment of the condition, petitioner could not be considered as having failed to comply with its part of the bargain, thus, it remanded the case to the court of origin for the determination of the time within which the petitioner should comply with the first condition annotated in the certificate of title

ISSUES1. WON the quoted annotations are onerous obligations and resolutory conditions2. WON the right of the respondents to initiate an action has already prescribed3. WON the Court may fix a period within which petitioner would establish a medical college

HELD1. Yes. Don Ramon Lopez, Sr. executed for a valuable consideration which is considered the equivalent of the donation itself. Under Art. 1181 of the Civil Code, on conditional obligations, the acquisition of rights, as well as the extinguishment or loss of those already acquired, shall depend upon the happening of the even which constitutes the condition.2. No. The condition imposed by the donor depended upon the exclusive will of the donee as to when this condition shall be fulfilled. Since the time within which the condition should be fulfilled depended upon the exclusive will of the petitioner, it has been held that its absolute acceptance and the acknowledgment of its obligation provided in the deed of donation were sufficient to prevent the statute of limitations from barring the action of private respondents upon the original contract which was the deed of donation. In this case, the starting point from which the obligation to comply must be counted from the expiration of a reasonable period and opportunity for petitioner to fulfill what has been charged upon it by the donor. 3. No. Art. 1197, where the courts may fix the duration for fulfillment, cannot be applied in this case. More than a reasonable period of 50 years has already been allowed petitioner to avail of the opportunity to comply with the condition even if it be burdensome, to make the donation in its favor forever valid, hence, there is no more need to fix the duration of a term of the obligation when such procedure would be a mere technicality and formality and would serve no purpose than to delay or lead to an unnecessary and expensive multiplication of suits.

SEPARATE OPINION

DAVIDE [dissent]- pointed out an inconsistency in the majority opinion’s description of the donation in question. In one part, it says that the donation in question is onerous. Yet in the last paragraph it states that the donation is basically a gratuitous one.- the discussion on conditional obligations is unnecessary as there is no conditional obligation to speak of in this case. The conditions imposed by the donor determines neither the existence nor the extinguishment of the obligations of the donor and the donee with respect to the donation. In fact, the conditions imposed are the very obligations of the donation.- the court should fix the duration for the performance of the conditions/obligations in the donation. The mere fact that there is no time fixed as to when the conditions of the donation are to be fulfilled does not ipso facto mean that the statute of limitations will not apply anymore and the action to revoke the donation becomes imprescriptible.

PACIFICA MILLARE V. HON. HAROLD M. HERNANDO G.R. No. L-55480 June 30, 1987

FACTS: A five-year Contract of Lease was executed between petitioner Pacifica Millare as lessor and private respondent Elsa Co, married to Antonio Co, as lessee. Under the written agreement, lessor-petitioner agreed to rent out to thelessee at a monthly rate of P350 the "People's Restaurant." Paragraph 13 of the Contract of Lease reads as follows: 13. This contract of lease is subject to the laws and regulations ofthe goverrunent; and that this contract of lease may be renewed after a period of 5 years under the terms and conditions as will be mutually agreed upon by the parties at the time of

renewal. CIV LAW REVIEW - OBLICON DIGESTS According to the Co spouses, sometime during the last week of May 1980, the lessor informed them that they could continue leasing the People's Restaurant so long as they were amenable to paying increased rentals of P1,200 a month. In response, a counteroffer of P700 a month was made by the Co spouses. At this point, the lessor allegedly stated that the amount of monthly rentals could be resolved at a later time since "the matter is simple among us", which alleged remark was supposedly taken by the spouses Co to mean that the Contract of Lease had been renewed, prompting them to continue occupying the subject premises and to forego their search for a substitute place to rent. In contrast, the lessor flatly denied ever having considered, much less offered, a renewal of the Contract of Lease. Mrs. Millare then requested the Co spouses to vacate the leased premises as she had no intention of renewing the Contract of Lease which had, in the meantime, already expirecl. In reply, the Co spouses reiterated their unwillingness to pay the Pl,200 monthly rentals supposedly sought bv Mrs. Millare which they considered "highly excessive, oppressive and contrary to existing laws". They also signified their intention to deposit the amount of rentals in court, in view of Mrs. Millare's refusal to accept their counter-offer. CO spouses then filed a complaint seeking renewal of the Contract of Lease at a rental rate of P700/month and for a period of 10 years, and damages.

ISSUE: WON THE CO SPOUSES MAY CLAIM RENEWAL OF THE CONTRACT

HELD: NO. The first paragraph of Article 1197 is clearly inapplicable, since the Contract of Lease did in fact fix an original period of five years, which had expired. It is also clear from paragraph 13 of the Contract of Lease that the parties reserved to themselves the faculty of agreeing upon the period of the renewal contract. The second paragraph of Article 1197 is equally clearly inapplicable since the duration of the renewal period was not left to the wiu of the lessee alone, but rather to the will of both the lessor and the lessee. Most importantly, Article 1197 applies only where a contract of lease clearly exists. Here, the contract was not renewed at all, there was in fact no contract at all the period of which could have been fixed. Article 1670 of the Civil Code reads thus: “If at the end of the contract the lessee should continue enjoying the thing left for 15 days with the acquiescence of the lessor and unless a notice to the contrary by either party has previously been given. It is understood that there is an implied new lease, not for the period of the original contract but for the time established in Articles 1682 and 1687. The ther terms of the original contract shall be revived.” The respondents themselves, public and private, do not pretend that the continued occupancy of the leased premises after the date of expiration of the contract, was with the acquiescence of the lessor. Even if it be assumed that tacite reconduccion had occurred, the implied new lease could not possibly have a period of 5 years, but rather would have been a month-to-month lease since the rentals (under the original contract) were payable on a monthly basis. At the latest, an implied new lease (had one arisen) would have expired as of the end of July 1980 in view of the written demands served by the petitioner upon the private respondents to vacate the previously leased premises. It follows that the respondent judge's decision requiring renewal of the lease has no basis in law or in fact. Save in the limited and exceptional situations envisaged in Articles ll97 and 1670 of the Civil Code, which do not obtain here, courts have no authority to prescribe the terms and conditions of a contract for the parties. As pointed out by Mr. Justice J.B.L. Reyes in Republic vs. PLDT: “[P]arties cannot be coerced to enter into a contract where no agreement is had between them as to the principal terms and conditions of the contract. Freedom to stipulate such terms and conditions is of the essence of our contractual system, and by express provision of the statute, a contract may be annulled if tainted by violence, intimidation or undue influence.” Contractual terms and conditions created by a court for two parties are a contradiction in terms. If they are imposed by a judge who draws upon his own private notions of what morals, good customs, justice, equity and public policy" demand, the resulting "agreement" cannot, by definition, be consensual or contractual in nature. It would also follow that such coerced terms and conditions cannot be the law as between the parties

themselves. Contracts spring from the volition of the parties. That volition cannot be supplied by a judge and a judge who pretends to do so, acts tyrannically, arbitrarily and in excess of his jurisdiction. 19