oblicon cases part 1

7/30/2019 oblicon cases part 1

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Republic of the PhilippinesSUPREME COURT

Manila

EN BANC

G.R. No. L-4089 January 12, 1909

ARTURO PELAYO, plaintiff-appellant,vs.MARCELO LAURON, ET AL., defendants-appellees.

J.H. Junquera, for appellant.Filemon Sotto, for appellee.

TORRES, J.:

On the 23rd of November, 1906, Arturo Pelayo, a physician residing in Cebu, filed a complaint

against Marcelo Lauron and Juana Abella setting forth that on or about the 13th of October of saidyear, at night, the plaintiff was called to the house of the defendants, situated in San Nicolas, andthat upon arrival he was requested by them to render medical assistance to their daughter-in-lawwho was about to give birth to a child; that therefore, and after consultation with the attendingphysician, Dr. Escao, it was found necessary, on account of the difficult birth, to remove the fetusby means of forceps which operation was performed by the plaintiff, who also had to remove theafterbirth, in which services he was occupied until the following morning, and that afterwards, on thesame day, he visited the patient several times; that the just and equitable value of the servicesrendered by him was P500, which the defendants refuse to pay without alleging any good reasontherefor; that for said reason he prayed that the judgment be entered in his favor as against thedefendants, or any of them, for the sum of P500 and costs, together with any other relief that mightbe deemed proper.

In answer to the complaint counsel for the defendants denied all of the allegation therein containedand alleged as a special defense, that their daughter-in-law had died in consequence of the saidchildbirth, and that when she was alive she lived with her husband independently and in a separatehouse without any relation whatever with them, and that, if on the day when she gave birth she wasin the house of the defendants, her stay their was accidental and due to fortuitous circumstances;therefore, he prayed that the defendants be absolved of the complaint with costs against the plaintiff.

The plaintiff demurred to the above answer, and the court below sustained the demurrer, directingthe defendants, on the 23rd of January, 1907, to amend their answer. In compliance with this orderthe defendants presented, on the same date, their amended answer, denying each and every one ofthe allegations contained in the complaint, and requesting that the same be dismissed with costs.

As a result of the evidence adduced by both parties, judgment was entered by the court below onthe 5th of April, 1907, whereby the defendants were absolved from the former complaint, on accountof the lack of sufficient evidence to establish a right of action against the defendants, with costsagainst the plaintiff, who excepted to the said judgment and in addition moved for a new trial on theground that the judgment was contrary to law; the motion was overruled and the plaintiff exceptedand in due course presented the corresponding bill of exceptions. The motion of the defendantsrequesting that the declaration contained in the judgment that the defendants had demandedtherefrom, for the reason that, according to the evidence, no such request had been made, was alsodenied, and to the decision the defendants excepted.


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Assuming that it is a real fact of knowledge by the defendants that the plaintiff, by virtue of havingbeen sent for by the former, attended a physician and rendered professional services to a daughter-in-law of the said defendants during a difficult and laborious childbirth, in order to decide the claim ofthe said physician regarding the recovery of his fees, it becomes necessary to decide who is boundto pay the bill, whether the father and mother-in-law of the patient, or the husband of the latter.

According to article 1089 of the Civil Code, obligations are created by law, by contracts, by quasi-contracts, and by illicit acts and omissions or by those in which any kind of fault or negligenceoccurs.

Obligations arising from law are not presumed. Those expressly determined in the code or in speciallaws, etc., are the only demandable ones. Obligations arising from contracts have legal forcebetween the contracting parties and must be fulfilled in accordance with their stipulations. (Arts.1090 and 1091.)

The rendering of medical assistance in case of illness is comprised among the mutual obligations towhich the spouses are bound by way of mutual support. (Arts. 142 and 143.)

If every obligation consists in giving, doing or not doing something (art. 1088), and spouses aremutually bound to support each other, there can be no question but that, when either of them byreason of illness should be in need of medical assistance, the other is under the unavoidableobligation to furnish the necessary services of a physician in order that health may be restored, andhe or she may be freed from the sickness by which life is jeopardized; the party bound to furnishsuch support is therefore liable for all expenses, including the fees of the medical expert for hisprofessional services. This liability originates from the above-cited mutual obligation which the lawhas expressly established between the married couple.

In the face of the above legal precepts it is unquestionable that the person bound to pay the feesdue to the plaintiff for the professional services that he rendered to the daughter-in-law of thedefendants during her childbirth, is the husband of the patient and not her father and mother- in-law,the defendants herein. The fact that it was not the husband who called the plaintiff and requested his

assistance for his wife is no bar to the fulfillment of the said obligation, as the defendants, in view ofthe imminent danger, to which the life of the patient was at that moment exposed, considered thatmedical assistance was urgently needed, and the obligation of the husband to furnish his wife in theindispensable services of a physician at such critical moments is specially established by the law, ashas been seen, and compliance therewith is unavoidable; therefore, the plaintiff, who believes thathe is entitled to recover his fees, must direct his action against the husband who is under obligationto furnish medical assistance to his lawful wife in such an emergency.

From the foregoing it may readily be understood that it was improper to have brought an actionagainst the defendants simply because they were the parties who called the plaintiff and requestedhim to assist the patient during her difficult confinement, and also, possibly, because they were herfather and mother-in-law and the sickness occurred in their house. The defendants were not, nor are

they now, under any obligation by virtue of any legal provision, to pay the fees claimed, nor inconsequence of any contract entered into between them and the plaintiff from which such obligationmight have arisen.

In applying the provisions of the Civil Code in an action for support, the supreme court of Spain,while recognizing the validity and efficiency of a contract to furnish support wherein a person boundhimself to support another who was not his relative, established the rule that the law does imposethe obligation to pay for the support of a stranger, but as the liability arose out of a contract, thestipulations of the agreement must be held. (Decision of May 11, 1897.)


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Within the meaning of the law, the father and mother-in-law are strangers with respect to theobligation that devolves upon the husband to provide support, among which is the furnishing ofmedical assistance to his wife at the time of her confinement; and, on the other hand, it does notappear that a contract existed between the defendants and the plaintiff physician, for which reason itis obvious that the former can not be compelled to pay fees which they are under no liability to paybecause it does not appear that they consented to bind themselves.

The foregoing suffices to demonstrate that the first and second errors assigned to the judgmentbelow are unfounded, because, if the plaintiff has no right of action against the defendants, it isneedless to declare whether or not the use of forceps is a surgical operation.

Therefore, in view of the consideration hereinbefore set forth, it is our opinion that the judgmentappealed from should be affirmed with the costs against the appellant. So ordered.


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Manila

EN BANC

G.R. No. L-7089 August 31, 1954

DOMINGO DE LA CRUZ, plaintiff-appellant,vs.NORTHERN THEATRICAL ENTERPRISES INC., ET AL., defendants-appellees.

Conrado Rubio for appellant.Ruiz, Ruiz, Ruiz, Ruiz, and Benjamin Guerrero for appellees.

MONTEMAYOR, J.:

The facts in this case based on an agreed statement of facts are simple. In the year 1941 the

Northern Theatrical Enterprises Inc., a domestic corporation operated a movie house in Laoag,Ilocos Norte, and among the persons employed by it was the plaintiff DOMINGO DE LA CRUZ, hiredas a special guard whose duties were to guard the main entrance of the cine, to maintain peace andorder and to report the commission of disorders within the premises. As such guard he carried arevolver. In the afternoon of July 4, 1941, one Benjamin Martin wanted to crash the gate or entranceof the movie house. Infuriated by the refusal of plaintiff De la Cruz to let him in without first providinghimself with a ticket, Martin attacked him with a bolo. De la Cruz defendant himself as best he coulduntil he was cornered, at which moment to save himself he shot the gate crasher, resulting in thelatter's death.

For the killing, De la Cruz was charged with homicide in Criminal Case No. 8449 of the Court of FirstInstance of Ilocos Norte. After a re-investigation conducted by the Provincial Fiscal the latter filed a

motion to dismiss the complaint, which was granted by the court in January 1943. On July 8, 1947,De la Cruz was again accused of the same crime of homicide, in Criminal Case No. 431 of the sameCourt. After trial, he was finally acquitted of the charge on January 31, 1948. In both criminal casesDe la Cruz employed a lawyer to defend him. He demanded from his former employerreimbursement of his expenses but was refused, after which he filed the present action against themovie corporation and the three members of its board of directors, to recover not only the amountshe had paid his lawyers but also moral damages said to have been suffered, due to his worry, hisneglect of his interests and his family as well in the supervision of the cultivation of his land, a total ofP15,000. On the basis of the complaint and the answer filed by defendants wherein they asked forthe dismissal of the complaint, as well as the agreed statement of facts, the Court of First Instance ofIlocos Norte after rejecting the theory of the plaintiff that he was an agent of the defendants and thatas such agent he was entitled to reimbursement of the expenses incurred by him in connection withthe agency (Arts. 1709-1729 of the old Civil Code), found that plaintiff had no cause of action and

dismissed the complaint without costs. De la Cruz appealed directly to this Tribunal for the reasonthat only questions of law are involved in the appeal.

We agree with the trial court that the relationship between the movie corporation and the plaintiff wasnot that of principal and agent because the principle of representation was in no way involved.Plaintiff was not employed to represent the defendant corporation in its dealings with third parties.He was a mere employee hired to perform a certain specific duty or task, that of acting as specialguard and staying at the main entrance of the movie house to stop gate crashers and to maintainpeace and order within the premises. The question posed by this appeal is whether an employee or


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servant who in line of duty and while in the performance of the task assigned to him, performs an actwhich eventually results in his incurring in expenses, caused not directly by his master or employeror his fellow servants or by reason of his performance of his duty, but rather by a third party orstranger not in the employ of his employer, may recover said damages against his employer.

The learned trial court in the last paragraph of its decision dismissing the complaint said that "after

studying many laws or provisions of law to find out what law is applicable to the facts submitted andadmitted by the parties, has found none and it has no other alternative than to dismiss thecomplaint." The trial court is right. We confess that we are not aware of any law or judicial authoritythat is directly applicable to the present case, and realizing the importance and far-reaching effect ofa ruling on the subject-matter we have searched, though vainly, for judicial authorities andenlightenment. All the laws and principles of law we have found, as regards master and servants, oremployer and employee, refer to cases of physical injuries, light or serious, resulting in loss of amember of the body or of any one of the senses, or permanent physical disability or even death,suffered in line of duty and in the course of the performance of the duties assigned to the servant oremployee, and these cases are mainly governed by the Employer's Liability Act and the Workmen'sCompensation Act. But a case involving damages caused to an employee by a stranger or outsiderwhile said employee was in the performance of his duties, presents a novel question which underpresent legislation we are neither able nor prepared to decide in favor of the employee.

In a case like the present or a similar case of say a driver employed by a transportation company,who while in the course of employment runs over and inflicts physical injuries on or causes the deathof a pedestrian; and such driver is later charged criminally in court, one can imagine that it would beto the interest of the employer to give legal help to and defend its employee in order to show that thelatter was not guilty of any crime either deliberately or through negligence, because should theemployee be finally held criminally liable and he is found to be insolvent, the employer would besubsidiarily liable. That is why, we repeat, it is to the interest of the employer to render legalassistance to its employee. But we are not prepared to say and to hold that the giving of said legalassistance to its employees is a legal obligation. While it might yet and possibly be regarded as anormal obligation, it does not at present count with the sanction of man-made laws.

If the employer is not legally obliged to give, legal assistance to its employee and provide him with alawyer, naturally said employee may not recover the amount he may have paid a lawyer hired byhim.

Viewed from another angle it may be said that the damage suffered by the plaintiff by reason of theexpenses incurred by him in remunerating his lawyer, is not caused by his act of shooting to deaththe gate crasher but rather by the filing of the charge of homicide which made it necessary for him todefend himself with the aid of counsel. Had no criminal charge been filed against him, there wouldhave been no expenses incurred or damage suffered. So the damage suffered by plaintiff wascaused rather by the improper filing of the criminal charge, possibly at the instance of the heirs of thedeceased gate crasher and by the State through the Fiscal. We say improper filing, judging by theresults of the court proceedings, namely, acquittal. In other words, the plaintiff was innocent andblameless. If despite his innocence and despite the absence of any criminal responsibility on his parthe was accused of homicide, then the responsibility for the improper accusation may be laid at thedoor of the heirs of the deceased and the State, and so theoretically, they are the parties that maybe held responsible civilly for damages and if this is so, we fail to see now this responsibility can betransferred to the employer who in no way intervened, much less initiated the criminal proceedingsand whose only connection or relation to the whole affairs was that he employed plaintiff to performa special duty or task, which task or duty was performed lawfully and without negligence.


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Still another point of view is that the damages incurred here consisting of the payment of the lawyer'sfee did not flow directly from the performance of his duties but only indirectly because there was anefficient, intervening cause, namely, the filing of the criminal charges. In other words, the shooting todeath of the deceased by the plaintiff was not the proximate cause of the damages suffered but maybe regarded as only a remote cause, because from the shooting to the damages suffered there wasnot that natural and continuous sequence required to fix civil responsibility.

In view of the foregoing, the judgment of the lower court is affirmed. No costs.


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Manila

EN BANC

G.R. No. 109125 December 2, 1994

ANG YU ASUNCION, ARTHUR GO AND KEH TIONG, petitioners,vs.THE HON. COURT OF APPEALS and BUEN REALTY DEVELOPMENTCORPORATION, respondents.

Antonio M. Albano for petitioners.

Umali, Soriano & Associates for private respondent.

VITUG, J.:

Assailed, in this petition for review, is the decision of the Court of Appeals, dated 04 December1991, in CA-G.R. SP No. 26345 setting aside and declaring without force and effect the orders ofexecution of the trial court, dated 30 August 1991 and 27 September 1991, in Civil Case No. 87-41058.

The antecedents are recited in good detail by the appellate court thusly:

On July 29, 1987 a Second Amended Complaint for Specific Performance was filedby Ang Yu Asuncion and Keh Tiong, et al., against Bobby Cu Unjieng, Rose CuUnjieng and Jose Tan before the Regional Trial Court, Branch 31, Manila in CivilCase No. 87-41058, alleging, among others, that plaintiffs are tenants or lessees ofresidential and commercial spaces owned by defendants described as Nos. 630-638Ongpin Street, Binondo, Manila; that they have occupied said spaces since 1935 andhave been religiously paying the rental and complying with all the conditions of thelease contract; that on several occasions before October 9, 1986, defendantsinformed plaintiffs that they are offering to sell the premises and are giving thempriority to acquire the same; that during the negotiations, Bobby Cu Unjieng offered aprice of P6-million while plaintiffs made a counter offer of P5-million; that plaintiffsthereafter asked the defendants to put their offer in writing to which request

defendants acceded; that in reply to defendant's letter, plaintiffs wrote them onOctober 24, 1986 asking that they specify the terms and conditions of the offer tosell; that when plaintiffs did not receive any reply, they sent another letter datedJanuary 28, 1987 with the same request; that since defendants failed to specify theterms and conditions of the offer to sell and because of information received thatdefendants were about to sell the property, plaintiffs were compelled to file thecomplaint to compel defendants to sell the property to them.


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Defendants filed their answer denying the material allegations of the complaint andinterposing a special defense of lack of cause of action.

After the issues were joined, defendants filed a motion for summary judgment whichwas granted by the lower court. The trial court found that defendants' offer to sell wasnever accepted by the plaintiffs for the reason that the parties did not agree upon the

terms and conditions of the proposed sale, hence, there was no contract of sale atall. Nonetheless, the lower court ruled that should the defendants subsequently offertheir property for sale at a price of P11-million or below, plaintiffs will have the right offirst refusal. Thus the dispositive portion of the decision states:

WHEREFORE, judgment is hereby rendered in favor of thedefendants and against the plaintiffs summarily dismissing thecomplaint subject to the aforementioned condition that if thedefendants subsequently decide to offer their property for sale for apurchase price of Eleven Million Pesos or lower, then the plaintiffshas the option to purchase the property or of first refusal, otherwise,defendants need not offer the property to the plaintiffs if the purchaseprice is higher than Eleven Million Pesos.

SO ORDERED.

Aggrieved by the decision, plaintiffs appealed to this Court inCA-G.R. CV No. 21123. In a decision promulgated on September 21, 1990 (pennedby Justice Segundino G. Chua and concurred in by Justices Vicente V. Mendoza andFernando A. Santiago), this Court affirmed with modification the lower court's

judgment, holding:

In resume, there was no meeting of the minds between the partiesconcerning the sale of the property. Absent such requirement, theclaim for specific performance will not lie. Appellants' demand for

actual, moral and exemplary damages will likewise fail as there existsno justifiable ground for its award. Summary judgment for defendantswas properly granted. Courts may render summary judgment whenthere is no genuine issue as to any material fact and the moving partyis entitled to a judgment as a matter of law (Garcia vs. Court of

Appeals, 176 SCRA 815). All requisites obtaining, the decision of thecourt a quois legally justifiable.

WHEREFORE, finding the appeal unmeritorious, the judgmentappealed from is hereby AFFIRMED, but subject to the followingmodification: The court a quoin the aforestated decision gave theplaintiffs-appellants the right of first refusal only if the property is sold

for a purchase price of Eleven Million pesos or lower; however,considering the mercurial and uncertain forces in our marketeconomy today. We find no reason not to grant the same right of firstrefusal to herein appellants in the event that the subject property issold for a price in excess of Eleven Million pesos. No pronouncementas to costs.

SO ORDERED.


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The decision of this Court was brought to the Supreme Court by petition for reviewon certiorari. The Supreme Court denied the appeal on May 6, 1991 "for insufficiencyin form and substances" (Annex H, Petition).

On November 15, 1990, while CA-G.R. CV No. 21123 was pending consideration bythis Court, the Cu Unjieng spouses executed a Deed of Sale (Annex D, Petition)

transferring the property in question to herein petitioner Buen Realty andDevelopment Corporation, subject to the following terms and conditions:

1. That for and in consideration of the sum of FIFTEEN MILLIONPESOS (P15,000,000.00), receipt of which in full is herebyacknowledged, the VENDORS hereby sells, transfers and conveysfor and in favor of the VENDEE, his heirs, executors, administratorsor assigns, the above-described property with all the improvementsfound therein including all the rights and interest in the said propertyfree from all liens and encumbrances of whatever nature, except thepending ejectment proceeding;

2. That the VENDEE shall pay the Documentary Stamp Tax,registration fees for the transfer of title in his favor and otherexpenses incidental to the sale of above-described property includingcapital gains tax and accrued real estate taxes.

As a consequence of the sale, TCT No. 105254/T-881 in the name of the Cu Unjiengspouses was cancelled and, in lieu thereof, TCT No. 195816 was issued in the nameof petitioner on December 3, 1990.

On July 1, 1991, petitioner as the new owner of the subject property wrote a letter tothe lessees demanding that the latter vacate the premises.

On July 16, 1991, the lessees wrote a reply to petitioner stating that petitionerbrought the property subject to the notice oflis pendensregarding Civil Case No. 87-41058 annotated on TCT No. 105254/T-881 in the name of the Cu Unjiengs.

The lessees filed a Motion for Execution dated August 27, 1991 of the Decision inCivil Case No. 87-41058 as modified by the Court of Appeals in CA-G.R. CV No.21123.

On August 30, 1991, respondent Judge issued an order (Annex A, Petition) quotedas follows:

Presented before the Court is a Motion for Execution filed by plaintiffrepresented by Atty. Antonio Albano. Both defendants Bobby Cu

Unjieng and Rose Cu Unjieng represented by Atty. Vicente Sison andAtty. Anacleto Magno respectively were duly notified in today'sconsideration of the motion as evidenced by the rubber stamp andsignatures upon the copy of the Motion for Execution.

The gist of the motion is that the Decision of the Court datedSeptember 21, 1990 as modified by the Court of Appeals in itsdecision in CA G.R. CV-21123, and elevated to the Supreme Courtupon the petition for review and that the same was denied by the


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highest tribunal in its resolution dated May 6, 1991 in G.R. No.L-97276, had now become final and executory. As a consequence,there was an Entry of Judgment by the Supreme Court as of June 6,1991, stating that the aforesaid modified decision had alreadybecome final and executory.

It is the observation of the Court that this property in dispute was thesubject of theNotice of Lis Pendensand that the modified decision ofthis Court promulgated by the Court of Appeals which had becomefinal to the effect that should the defendants decide to offer theproperty for sale for a price of P11 Million or lower, and consideringthe mercurial and uncertain forces in our market economy today, thesame right of first refusal to herein plaintiffs/appellants in the eventthat the subject property is sold for a price in excess of Eleven Millionpesos or more.

WHEREFORE, defendants are hereby ordered to execute thenecessary Deed of Sale of the property in litigation in favor ofplaintiffs Ang Yu Asuncion, Keh Tiong and Arthur Go for theconsideration of P15 Million pesos in recognition of plaintiffs' right offirst refusal and that a new Transfer Certificate of Title be issued infavor of the buyer.

All previous transactions involving the same property notwithstandingthe issuance of another title to Buen Realty Corporation, is hereby setaside as having been executed in bad faith.

SO ORDERED.

On September 22, 1991 respondent Judge issued another order, the dispositiveportion of which reads:

WHEREFORE, let there be Writ of Execution issue in the above-entitled case directing the Deputy Sheriff Ramon Enriquez of thisCourt to implement said Writ of Execution ordering the defendantsamong others to comply with the aforesaid Order of this Court withina period of one (1) week from receipt of this Order and for defendantsto execute the necessary Deed of Sale of the property in litigation infavor of the plaintiffs Ang Yu Asuncion, Keh Tiong and Arthur Go forthe consideration of P15,000,000.00 and ordering the Register ofDeeds of the City of Manila, to cancel and set aside the title alreadyissued in favor of Buen Realty Corporation which was previouslyexecuted between the latter and defendants and to register the new

title in favor of the aforesaid plaintiffs Ang Yu Asuncion, Keh Tiongand Arthur Go.

SO ORDERED.

On the same day, September 27, 1991 the corresponding writ of execution (Annex C,Petition) was issued. 1


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On 04 December 1991, the appellate court, on appeal to it by private respondent, set aside anddeclared without force and effect the above questioned orders of the court a quo.

In this petition for review on certiorari, petitioners contend that Buen Realty can be held bound by thewrit of execution by virtue of the notice oflis pendens, carried over on TCT No. 195816 issued in thename of Buen Realty, at the time of the latter's purchase of the property on 15 November 1991 from

the Cu Unjiengs.

We affirm the decision of the appellate court.

A not too recent development in real estate transactions is the adoption of such arrangements as theright of first refusal, a purchase option and a contract to sell. For ready reference, we might point outsome fundamental precepts that may find some relevance to this discussion.

An obligation is a juridical necessity to give, to do or not to do (Art. 1156, Civil Code). The obligationis constituted upon the concurrence of the essential elements thereof, viz: (a) The vinculum

jurisorjuridical tiewhich is the efficient cause established by the various sources of obligations (law,contracts, quasi-contracts, delicts and quasi-delicts); (b) the objectwhich is the prestation or

conduct; required to be observed (to give, to do or not to do); and (c) the subject-personswho,viewed from the demandability of the obligation, are the active (obligee) and the passive (obligor)subjects.

Among the sources of an obligation is a contract (Art. 1157, Civil Code), which is a meeting of mindsbetween two persons whereby one binds himself, with respect to the other, to give something or torender some service (Art. 1305, Civil Code). A contract undergoes various stages that include itsnegotiation or preparation, its perfection and, finally, its consummation. Negotiationcovers theperiod fromthe time the prospective contracting parties indicate interest in the contract tothe timethe contract is concluded (perfected). The perfectionof the contract takes place upon theconcurrence of the essential elements thereof. A contract which is consensualas to perfection is soestablished upon a mere meeting of minds, i.e., the concurrence of offer and acceptance, on theobject and on the cause thereof. A contract which requires, in addition to the above, the delivery of

the object of the agreement, as in a pledge orcommodatum, is commonly referred to asa realcontract. In a solemncontract, compliance with certain formalities prescribed by law, such asin a donation of real property, is essential in order to make the act valid, the prescribed form beingthereby an essential element thereof. The stage ofconsummationbegins when the parties performtheir respective undertakings under the contract culminating in the extinguishment thereof.

Until the contract is perfected, it cannot, as an independent source of obligation, serve as a bindingjuridical relation. In sales, particularly, to which the topic for discussion about the case at benchbelongs, the contract is perfected when a person, called the seller, obligates himself, for a pricecertain, to deliver and to transfer ownership of a thing or right to another, called the buyer, overwhich the latter agrees. Article 1458 of the Civil Code provides:

Art. 1458. By the contract of sale one of the contracting parties obligates himself totransfer the ownership of and to deliver a determinate thing, and the other to paytherefor a price certain in money or its equivalent.

A contract of sale may be absolute or conditional.

When the sale is not absolutebut conditional, such as in a "Contract to Sell" where invariably theownership of the thing sold is retained until the fulfillment of a positive suspensive condition(normally, the full payment of the purchase price), the breach of the condition will prevent the


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obligation to convey title from acquiring an obligatory force. 2In Dignos vs. Court of Appeals(158SCRA 375), we have said that, although denominated a "Deed of Conditional Sale," a sale is stillabsolute where the contract is devoid of any provisothat title is reserved or the right to unilaterallyrescind is stipulated, e.g., until or unless the price is paid. Ownership will then be transferred to thebuyer upon actual or constructive delivery (e.g., by the execution of a public document) of theproperty sold. Where the condition is imposed upon the perfection of the contract itself, the failure of

the condition would prevent such perfection.3

If the condition is imposed on the obligation of a partywhich is not fulfilled, the other party may either waive the condition or refuse to proceed with the sale(Art. 1545, Civil Code). 4

An unconditional mutual promiseto buy and sell, as long as the object is made determinate and theprice is fixed, can be obligatory on the parties, and compliance therewith may accordingly beexacted. 5

An accepted unilateral promisewhich specifiesthe thing to be sold and the price to bepaid, whencoupled with a valuable consideration distinctand separate from the price, is what may properly betermed a perfected contract ofoption. This contract is legally binding, and in sales, it conforms withthe second paragraph of Article 1479 of the Civil Code, viz:

Art. 1479. . . .

An accepted unilateral promise to buy or to sell a determinate thing for a price certain isbinding upon the promissor if the promise is supported by a consideration distinct fromthe price. (1451a) 6

Observe, however, that the option is notthe contract of sale itself. 7 The optionee has the right, butnot the obligation, to buy. Once the option is exercised timely, i.e., the offer is accepted before abreach of the option, a bilateral promise to sell and to buy ensues and both parties are thenreciprocally bound to comply with their respective undertakings. 8

Let us elucidate a little. A negotiation is formally initiated by an offer. An imperfectpromise (policitacion) is merely an offer. Public advertisements or solicitations and the like areordinarily construed as mere invitations to make offers or only as proposals. These relations, until acontract is perfected, are not considered binding commitments. Thus, at any time prior to theperfection of the contract, either negotiating party may stop the negotiation. The offer, at this stage,may be withdrawn; the withdrawal is effective immediately after its manifestation, such as by itsmailing and not necessarily when the offeree learns of the withdrawal (Laudico vs. Arias, 43 Phil.270). Where a period is given to the offeree within which to accept the offer, the following rulesgenerally govern:

(1) If the period is not itself founded upon or supported by a consideration, the offeror is still free andhas the right to withdraw the offer before its acceptance, or, if an acceptance has been made, beforethe offeror's coming to know of such fact, by communicating that withdrawal to the offeree (see Art.

1324, Civil Code; see also Atkins, Kroll & Co. vs. Cua, 102 Phil. 948, holding that this rule isapplicable to a unilateral promise to sell under Art. 1479, modifying the previous decision in SouthWestern Sugar vs. Atlantic Gulf, 97 Phil. 249;see also Art. 1319, Civil Code; Rural Bank ofParaaque, Inc., vs. Remolado, 135 SCRA 409; Sanchez vs. Rigos, 45 SCRA 368). The right towithdraw, however, must not be exercised whimsically or arbitrarily; otherwise, it could give rise to adamage claim under Article 19 of the Civil Code which ordains that "every person must, in theexercise of his rights and in the performance of his duties, act with justice, give everyone his due,and observe honesty and good faith."


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(2) If the period has a separate consideration, a contract of "option" is deemed perfected, and itwould be a breach of that contract to withdraw the offer during the agreed period. The option,however, is an independent contract by itself, and it is to be distinguished from the projected mainagreement (subject matter of the option) which is obviously yet to be concluded. If, in fact, theoptioner-offerorwithdraws the offer before its acceptance(exercise of the option) by the optionee-offeree, the latter may not sue forspecific performanceon the proposed contract ("object" of the

option) since it has failed to reach its own stage of perfection. The optioner-offeror, however, rendershimself liable for damages for breach of the option. In these cases, care should be taken of the realnature of the considerationgiven, for if, in fact, it has been intended to be part of the considerationfor the main contract with a right of withdrawal on the part of the optionee, the main contract couldbe deemed perfected; a similar instance would be an "earnest money" in a contract of sale that canevidence its perfection (Art. 1482, Civil Code).

In the law on sales, the so-called "right of first refusal" is an innovative juridical relation. Needless topoint out, it cannot be deemed a perfected contract of sale under Article 1458 of the Civil Code.Neither can the right of first refusal, understood in its normal concept, per sebe brought within thepurview of an option under the second paragraph of Article 1479, aforequoted, or possibly of an offerunder Article 1319 9of the same Code. An option or an offer would require, among other things, 10aclear certainty on both the object and the cause or consideration of the envisioned contract. In a rightof first refusal, while the object might be made determinate, the exercise of the right, however, wouldbe dependent not only on the grantor's eventual intention to enter into a binding juridical relation withanother but also on terms, including the price, that obviously are yet to be later firmed up. Priorthereto, it can at best be so described as merely belonging to a class of preparatory juridicalrelations governed not by contracts (since the essential elements to establish the vinculum

juriswould still be indefinite and inconclusive) but by, among other laws of general application, thepertinent scattered provisions of the Civil Code on human conduct.

Even on the premise that such right of first refusal has been decreed under a final judgment, likehere, its breach cannot justify correspondingly an issuance of a writ of execution under a judgmentthat merely recognizes its existence, nor would it sanction an action for specific performance withoutthereby negating the indispensable element of consensuality in the perfection of contracts. 11It is not

to say, however, that the right of first refusal would be inconsequential for, such as already intimatedabove, an unjustified disregard thereof, given, for instance, the circumstances expressed in Article19 12of the Civil Code, can warrant a recovery for damages.

The final judgment in Civil Case No. 87-41058, it must be stressed, has merely accorded a "right offirst refusal" in favor of petitioners. The consequence of such a declaration entails no more than whathas heretofore been said. In fine, if, as it is here so conveyed to us, petitioners are aggrieved by thefailure of private respondents to honor the right of first refusal, the remedy is not a writ of executionon the judgment, since there is none to execute, but an action for damages in a proper forum for thepurpose.

Furthermore, whether private respondent Buen Realty Development Corporation, the allegedpurchaser of the property, has acted in good faith or bad faith and whether or not it should, in anycase, be considered bound to respect the registration of the lis pendensin Civil Case No. 87-41058are matters that must be independently addressed in appropriate proceedings. Buen Realty, nothaving been impleaded in Civil Case No. 87-41058, cannot be held subject to the writ of executionissued by respondent Judge, let alone ousted from the ownership and possession of the property,without first being duly afforded its day in court.


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We are also unable to agree with petitioners that the Court of Appeals has erred in holding that thewrit of execution varies the terms of the judgment in Civil Case No. 87-41058, later affirmed in CA-G.R. CV-21123. The Court of Appeals, in this regard, has observed:

Finally, the questioned writ of execution is in variance with the decision of the trial courtas modified by this Court. As already stated, there was nothing in said decision 13 that

decreed the execution of a deed of sale between the Cu Unjiengs and respondentlessees, or the fixing of the price of the sale, or the cancellation of title in the name ofpetitioner (Limpin vs. IAC, 147 SCRA 516; Pamantasan ng Lungsod ng Maynila vs. IAC,143 SCRA 311; De Guzman vs. CA, 137 SCRA 730; Pastor vs. CA, 122 SCRA 885).

It is likewise quite obvious to us that the decision in Civil Case No. 87-41058 could not have decreedat the time the execution of any deed of sale between the Cu Unjiengs and petitioners.

WHEREFORE, we UPHOLD the Court of Appeals in ultimately setting aside the questioned Orders,dated 30 August 1991 and 27 September 1991, of the court a quo. Costs against petitioners.


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Manila

SECOND DIVISION

G.R. No. 127695 December 3, 2001

HEIRS OF LUIS BACUS, namely: CLARA RESMA BACUS, ROQUE R. BACUS, SR.,SATURNINO R. BACUS, PRISCILA VDA. DE CABANERO, CARMELITA B. SUQUIB,BERNARDITA B. CARDENAS, RAUL R. BACUS, MEDARDO R. BACUS, ANSELMA B. ALBAN,RICARDO R. BACUS, FELICISIMA B. JUDICO, and DOMINICIANA B. TANGAL, petitioners,vs.HON. COURT OF APPEALS and SPOUSES FAUSTINO DURAY and VICTORIANADURAY, respondents.

QUISUMBING, J.:

This petition assails the decision dated November 29, 1996, of the Court of Appeals in CA-G.R. CVNo. 37566, affirming the decision dated August 3, 1991, of the Regional Trial Court of Cebu City,Branch 6, in Civil Case No. CEB-8935.

The facts, as culled from the records, are as follows:

On June 1, 1984, Luis Bacus leased to private respondent Faustino Duray a parcel of agriculturalland in Bulacao, Talisay, Cebu. Designated as Lot No. 3661-A-3-B-2, it had an area of 3,002 squaremeters, covered by Transfer Certificate of Title No. 48866. The lease was for six years, ending May31, 1990. The contract contained an option to buy clause. Under said option, the lessee had theexclusive and irrevocable right to buy 2,000 square meters of the property within five years from ayear after the effectivity of the contract, at P200 per square meter. That rate shall be proportionately

adjusted depending on the peso rate against the US dollar, which at the time of the execution of thecontract was fourteen pesos.1

Close to the expiration of the contract, Luis Bacus died on October 10, 1989. Thereafter, on March15, 1990, the Duray spouses informed Roque Bacus, one of the heirs of Luis Bacus, that they werewilling and ready to purchase the property under the option to buy clause. They requested RoqueBacus to prepare the necessary documents, such as a Special Power of Attorney authorizing him toenter into a contract of sale,2 on behalf of his sisters who were then abroad.

On March 30, 1990, due to the refusal of petitioners to sell the property, Faustino Duray's adverseclaim was annotated by the Register of Deeds of Cebu, at the back of TCT No. 63269, covering thesegregated 2,000 square meter portion of Lot No. 3661-A-3-B-2-A.3

Subsequently, on April 5, 1990, Duray filed a complaint for specific performance against the heirs ofLuis Bacus with the Lupon Tagapamayapa of Barangay Bulacao, asking that he be allowed topurchase the lot specifically referred to in the lease contract with option to buy. At the hearing, Duraypresented a certification4 from the manager of Standard Chartered Bank, Cebu City, addressed toLuis Bacus, stating that at the request of Mr. Lawrence Glauber, a bank client, arrangements werebeing made to allow Faustino Duray to borrow funds of approximately P700,000 to enable him tomeet his obligations under the contract with Luis Bacus.5


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Having failed to reach an agreement before the Lupon, on April 27, 1990, private respondents filed acomplaint for specific performance with damages against petitioners before the Regional Trial Court,praying that the latter, (a) execute a deed of sale over the subject property in favor of privaterespondents; (b) receive the payment of the purchase price; and (c) pay the damages.

On the other hand, petitioners alleged that before Luis Bacus' death, private respondents conveyed

to them the former's lack of interest to exercise their option because of insufficiency of funds, butthey were surprised to learn of private respondents' demand. In turn, they requested privaterespondents to pay the purchase price in full but the latter refused. They further alleged that privaterespondents did not deposit the money as required by theLuponand instead presented a bankcertification which cannot be deemed legal tender.

On October 30, 1990, private respondents manifested in court that they caused the issuance of acashier's check in the amount of P650,0006 payable to petitioners at anytime upon demand.

On August 3, 1991, the Regional Trial Court ruled in favor of private respondents, the dispositiveportion of which reads:

Premises considered, the court finds for the plaintiffs and orders the defendants tospecifically perform their obligation in the option to buy and to execute a document of saleover the property covered by Transfer Certificate of Title # T-63269 upon payment by theplaintiffs to them in the amount of Six Hundred Seventy-Five Thousand Six HundredSeventy-Five (P675,675.00) Pesos within a period of thirty (30) days from the date thisdecision becomes final.

SO ORDERED.7

Unsatisfied, petitioners appealed to the respondent Court of Appeals which denied the appeal onNovember 29, 1996, on the ground that the private respondents exercised their option to buy theleased property before the expiration of the contract of lease. It held:

. . . After a careful review of the entire records of this case, we are convinced that theplaintiffs-appellees validly and effectively exercised their option to buy the subject property.

As opined by the lower court, "the readiness and preparedness of the plaintiff on his part, ismanifested by his cautionary letters, the prepared bank certification long before the date ofMay 31, 1990, the final day of the option, and his filing of this suit before said date. If theplaintiff-appellee Francisco Duray had no intention to purchase the property, he would nothave bothered to write those letters to the defendant-appellants (which were all received bythem) and neither would he be interested in having his adverse claim annotated at the backof the T.C.T. of the subject property, two (2) months before the expiration of the lease.Moreover, he even went to the extent of seeking the help of the Lupon Tagapamayapa tocompel the defendants-appellants to recognize his right to purchase the property and forthem to perform their corresponding obligation.8

xxx xxx xxx

We therefore find no merit in this appeal.

WHEREFORE, the decision appealed from is hereby AFFIRMED.9


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Hence, this petition where petitioners aver that the Court of Appeals gravely erred and abused itsdiscretion in:

I. . . . UPHOLDING THE TRIAL COURT'S RULING IN THE SPECIFIC PERFORMANCECASE BY ORDERING PETITIONERS (DEFENDANTS THEREIN) TO EXECUTE ADOCUMENT OF SALE OVER THE PROPERTY IN QUESTION (WITH TCT NO. T-63269)

TO THEM IN THE AMOUNT OF P675,675.00 WITHIN THIRTY (30) DAYS FROM THEDATE THE DECISION BECOMES FINAL;

II. . . . DISREGARDING LEGAL PRINCIPLES, SPECIFIC PROVISIONS OF LAW ANDJURISPRUDENCE IN UPHOLDING THE DECISION OF THE TRIAL COURT TO THEEFFECT THAT PRIVATE RESPONDENTS HAD EXERCISED THEIR RIGHT OF OPTIONTO BUY ON TIME; THUS THE PRESENTATION OF THE CERTIFICATION OF THE BANKMANAGER OF A BANK DEPOSIT IN THE NAME OF ANOTHER PERSON FOR LOAN TORESPONDENTS WAS EQUIVALENT TO A VALID TENDER OF PAYMENT AND ASUFFICIENT COMPLAINCE (SIC) OF A CONDITION FOR THE EXERCISE OF THEOPTION TO BUY; AND

III. . . . UPHOLDING THE TRIAL COURT'S RULING THAT THE PRESENTATION OF ACASHER'S (SIC) CHECK BY THE RESPONDENTS IN THE AMOUNT OF P625,000.00EVEN AFTER THE TERMINATION OF THE TRIAL ON THE MERITS WITH BOTHPARTIES ALREADY HAVING RESTED THEIR CASE, WAS STILL VALID COMPLIANCEOF THE CONDITION FOR THE PRIVATE RESPONDENTS' (PLAINTIFFS THEREIN)EXERCISE OF RIGHT OF OPTION TO BUY AND HAD A FORCE OF VALID AND FULLTENDER OF PAYMENT WITHIN THE AGREED PERIOD.10

Petitioners insist that they cannot be compelled to sell the disputed property by virtue of thenonfulfillment of the obligation under the option contract of the private respondents.

Private respondents first aver that petitioners are unclear if Rule 65 or Rule 45 of the Rules of Courtgovern their petition, and that petitioners only raised questions of facts which this Court cannot

properly entertain in a petition for review. They claim that even assuming that the instant petition isone under Rule 45, the same must be denied for the Court of Appeals has correctly determined thatthey had validly exercised their option to buy the leased property before the contract expired.

In response, petitioners state that private respondents erred in initially classifying the instant petitionas one under Rule 65 of the Rules of Court. They argue that the petition is one under Rule 45 whereerrors of the Court of Appeals, whether evidentiary or legal in nature, may be reviewed.

We agree with private respondents that in a petition for review under Rule 45, only questions of lawmay be raised.11 However, a close reading of petitioners' arguments reveal the following legal issueswhich may properly be entertained in the instant petition:

a) When private respondents opted to buy the property covered by the lease contract withoption to buy, were they already required to deliver the money or consign it in court beforepetitioner executes a deed of transfer?

b) Did private respondents incur in delay when they did not deliver the purchase price orconsign it in court on or before the expiration of the contract?

On the first issue, petitioners contend that private respondents failed to comply with their obligationbecause there was neither actual delivery to them nor consignation in court or with the Municipal,


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City or Provincial Treasurer of the purchase price before the contract expired. Private respondents'bank certificate stating that arrangements were being made by the bank to release P700,000 as aloan to private respondents cannot be considered as legal tender that may substitute for delivery ofpayment to petitioners nor was it a consignation.

Obligations under an option to buy are reciprocal obligations.12 The performance of one obligation is

conditioned on the simultaneous fulfillment of the other obligation.13

In other words, in an option tobuy, the payment of the purchase price by the creditor is contingent upon the execution and deliveryof a deed of sale by the debtor. In this case, when private respondents opted to buy the property,their obligation was to advise petitioners of their decision and their readiness to pay the price. Theywere not yet obliged to make actual payment. Only upon petitioners' actual execution and delivery ofthe deed of sale were they required to pay. As earlier stated, the latter was contingent upon theformer. In Nietes vs. Court of Appeals, 46 SCRA 654 (1972), we held that notice of the creditor'sdecision to exercise his option to buy need not be coupled with actual payment of the price, so longas this is delivered to the owner of the property upon performance of his part of the agreement.Consequently, since the obligation was not yet due, consignation in court of the purchase price wasnot yet required.

Consignation is the act of depositing the thing due with the court or judicial authorities whenever thecreditor cannot accept or refuses to accept payment and it generally requires a prior tender ofpayment. In instances, where no debt is due and owing, consignation is not proper.14 Therefore,petitioners' contention that private respondents failed to comply with their obligation under the optionto buy because they failed to actually deliver the purchase price or consign it in court before thecontract expired and before they execute a deed, has no leg to stand on.

Corollary, private respondents did not incur in delay when they did not yet deliver payment nor makea consignation before the expiration of the contract. In reciprocal obligations, neither party incurs indelay if the other does not comply or is not ready to comply in a proper manner with what isincumbent upon him. Only from the moment one of the parties fulfills his obligation, does delay bythe other begin.15

In this case, private respondents, as early as March 15, 1990, communicated to petitioners theirintention to buy the property and they were at that time undertaking to meet their obligation beforethe expiration of the contract on May 31, 1990. However, petitioners refused to execute the deed ofsale and it was their demand to private respondents to first deliver the money before they wouldexecute the same which prompted private respondents to institute a case for specific performance inthe Lupong Tagapamayapaand then in the RTC. On October 30, 1990, after the case had beensubmitted for decision but before the trial court rendered its decision, private respondents issued acashier's check in petitioners' favor purportedly to bolster their claim that they were ready to pay thepurchase price. The trial court considered this in private respondents' favor and we believe that itrightly did so, because at the time the check was issued, petitioners had not yet executed a deed ofsale nor expressed readiness to do so. Accordingly, as there was no compliance yet with what wasincumbent upon petitioners under the option to buy, private respondents had not incurred in delaywhen the cashier's check was issued even after the contract expired.

WHEREFORE, the instant petition is DENIED. The decision dated November 29, 1996 of the Courtof Appeals is hereby AFFIRMED.

Costs against petitioners.


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Manila

EN BANC

G.R. No. L-13602 April 6, 1918

LEUNG BEN, plaintiff,vs.P. J. O'BRIEN, JAMES A OSTRAND and GEO. R. HARVEY, judges of First Instance of city ofManila,defendants.

Thos. D. Aitken and W. A. Armstrong for plaintiff.Kincaid & Perkins for defendants.

STREET, J.:

This is an application for a writ ofcertiorari, the purpose of which is to quash an attachment issuedfrom the Court of First Instance of the City of Manila under circumstances hereinbelow stated.

Upon December 12, 1917, an action was instituted in the Court of First Instance of the city of Manilaby P. J. O'Brien to recover of Leung Ben the sum of P15,000 alleged to have been lost by theplaintiff to the defendant in a series of gambling, banking and percentage games conducted ruingthe two or three months prior to the institution of the suit. In his verified complaint the plaintiff askedfor an attachment, under section 424, and 412 (1) of the Code of Civil Procedure, against theproperty of the defendant, on the ground that the latter was about to depart from the Philippineislands with intent to defraud his creditors. This attachment was issued; and acting under theauthority thereof, the sheriff attached the sum of P15,000 which had been deposited by thedefendant with the International Banking Corporation.

The defendant thereupon appeared by his attorney and moved the court to quash the attachment.Said motion having dismissed in the Court of First Instance, the petitioner, Leung Ben, the defendantin that action, presented to this court, upon January 8, 1918 his petition for the writofcertioraridirected against P. J. O'Brien and the judges of the Court of First Instance of the city ofManila whose names are mentioned in the caption hereof. The prayer is that the Honorable James

A. Ostrand, as the judge having cognizance of the action in said court be required to certify therecord to this court for review and that the order of attachment which had been issued should berevoked and discharged. with costs. Upon the filing of said petition in this court the usual order wasentered requiring the defendants to show cause why the writ should not issue. The response of thedefendants, in the nature of a demurrer, was filed upon January 21, 1918; and the matter is nowheard upon the pleadings thus presented.

The provision of law under which this attachment was issued requires that there should be accuse ofaction arising upon contract, express or implied. The contention of the petitioner is that the statutoryaction to recover money lost at gaming is that the statutory action to recover money lost at gaming isno such an action as is contemplated in this provision, and he therefore insists that the originalcomplaint shows on its face that the remedy of attachment is not available in aid thereof; that theCourt of First Instance acted in excess of its jurisdiction in granting the writ of attachment; that thepetitioner has no plain, speedy, and adequate remedy by appeal or otherwise; and that consequentlythe writ ofcertiorarisupplies the appropriate remedy for his relief.


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The case presents the two following questions of law, either of which, if decided unfavorably to thepetitioner, will be fatal to his application:

(1) Supposing that the Court of First Instance has granted an attachment for which there is nostatutory authority, can this court entertain the present petition and grant the desired relief?

(2) Is the statutory obligation to restore money won at gaming an obligation arising from "contract,express or implied?"

We are of the opinion that the answer to the first question should be in the affirmative. Under section514 of the Code of Civil Procedure the Supreme Court has original jurisdiction by the writofcertiorariover the proceedings of Courts of First Instance, wherever said courts have exceededtheir jurisdiction and there is no plaint, speedy, and adequate remedy. In the same section, it isfurther declared that the proceedings in the Supreme Court in such cases hall be as prescribed forCourts of First Instance in section 217-221, inclusive, of said Code. This Supreme Court, so far asapplicable, the provisions contained in those section to the same extent as if they had beenreproduced verbatim immediately after section 514. Turning to section 217, we find that, in definingthe conditions under which certiorarican be maintained in a Court of First Instance substantially the

same language is used as is the same remedy can be maintained in the Supreme Court of FirstInstance, substantially the same language is used as is found in section 514 relative to theconditions under which the same remedy can be maintained in the Supreme Court, namely, whenthe inferior tribunal has exceeded its jurisdiction and there is no appeal, nor any plain, speedy andadequate remedy. In using these expressions the author of the Code of Civil Procedure merelyadopted the language which, in American jurisdictions at least, had long ago reached the stage ofstereotyped formula.

In section 220 of the same Code, we have a provision relative to the final proceedings in certiorari,and herein it is stated that the court shall determine whether the inferior tribunal has regularlypursued its authority it shall give judgment either affirming annulling, or modifying the proceedingsbelow, as the law requires. The expression, has not regularly pursued its authority as here used, issuggestive, and we think it should be construed in connection with the other expressions have

exceeded their jurisdiction, as used in section 514, and has exceeded their jurisdiction as used insection 217. Taking the three together, it results in our opinion that any irregular exercise of juridicalpower by a Court of First Instance, in excess of its lawful jurisdiction, is remediable by the writofcertiorari, provided there is no other plain, speedy, and adequate remedy; and in order to makeout a case for the granting of the writ it is not necessary that the court should have acted in thematter without any jurisdiction whatever. Indeed the repeated use of expression excess of

jurisdiction shows that the lawmaker contemplated the situation where a court, having jurisdictionshould irregularly transcend its authority as well as the situation where the court is totally devoid oflawful power.

It may be observed in this connection that the word jurisdiction as used in attachment cases, hasreference not only to the authority of the court to entertain the principal action but also to its authority

to issue the attachment, as dependent upon the existence of the statutory ground. (6 C. J., 89.) Thisdistinction between jurisdiction to issue the attachment as an ancillary remedy incident to theprincipal litigation is of importance; as a court's jurisdiction over the main action may be complete,and yet it may lack authority to grant an attachment as ancillary to such action. This distinctionbetween jurisdiction over the ancillary has been recognized by this court in connection with actionsinvolving the appointment of a receiver. Thus in Rocha & Co. vs. Crossfield and Figueras (6 Phil.Rep., 355), a receiver had been appointed without legal justification. It was held that the ordermaking the appointment was beyond the jurisdiction of the court; and though the court admittedlyhad jurisdiction of the main cause, the order was vacated by this court upon application a writ


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ofcertiorari. (SeeBlanco vs. Ambler, 3 Phil. Rep., 358, Blanco vs. Ambler and McMicking 3 Phil.Rep., 735, Yangco vs. Rohde, 1 Phil. Rep., 404.)

By parity of reasoning it must follow that when a court issues a writ of attachment for which there isno statutory authority, it is acting irregularly and in excess of its jurisdiction, in the sense necessaryto justify the Supreme Court in granting relief by the writ ofcertiorari. In applying this proposition it is

of course necessary to take account of the difference between a ground of attachment based on thenature of the action and a ground of attachment based on the acts or the conditions of thedefendant. Every complaint must show a cause of action some sort; and when the statue declaresthat the attachment may issue in an action arising upon contract, the express or implied, itannounces a criterion which may be determined from an inspection of the language of the complaint.The determination of this question is purely a matter of law. On the other hand, when the staturedeclares that an attachment may be issued when the defendant is about to depart from the Islands,a criterion is announced which is wholly foreign to the cause of action; and the determination of itmay involve a disputed question of fact which must be decided by the court. In making thisdetermination, the court obviously acts within its powers; and it would be idle to suppose that the writofcertiorariwould be available to reverse the action of a Court of First Instance in determining thesufficiency of the proof on such a disputed point, and in granting or refusing the attachmentaccordingly.

We should not be understood, in anything that has been said, as intending to infringe the doctrineenunciated by this court in Herrera vs. Barretto and Joaquin (25 Phil. Rep., 245), when properlyapplied. It was there held that we would not, upon application for a writ of certiorari, dissolve aninterlocutory mandatory injunction that had been issued in a Court of First Instance as an incident inan action ofmandamus. The issuance of an interlocutory injunction depends upon conditionsessentially different from those involved in the issuance of an attachment. The injunction is designedprimarily for the prevention of irreparable injury and the use of the remedy is in a great measuredependent upon the exercise of discretion. Generally, it may be said that the exercise of theinjunctive powers is inherent in judicial authority; and ordinarily it would be impossible to distinguishbetween the jurisdiction of the court in the main litigation and its jurisdiction to grant an interlocutoryinjunction, for the latter is involved in the former. That the writ ofcertiorarican not be used to reverse

an order denying a motion for a preliminary injunction is of course not to cavil. (Somes vs. Crossfieldand Molina, 8 Phil. Rep., 284.)

But it will be said that the writ ofcertiorariis not available in this cae, because the petitioner isprotected by the attachment bond, and that he has a plain, speedy, and adequate remedy appeal.This suggestion seems to be sufficiently answered in the case of Rocha & Co vs. Crossfield andFigueras (6 Phil. Rep., 355), already referred to, and the earlier case there cited. The remedy byappeal is not sufficiently speedy to meet the exigencies of the case. An attachment is extremelyviolent, and its abuse may often result in infliction of damage which could never be repaired by anypecuniary award at the final hearing. To postpone the granting of the writ in such a case until thefinal hearing and to compel the petitioner to bring the case here upon appeal merely in order tocorrect the action of the trial court in the matter of allowing the attachment would seem both unjustand unnecessary.

Passing to the problem propounded in the second question it may be observed that, upon generalprinciples,. recognize both the civil and common law, money lost in gaming and voluntarily paid bythe loser to the winner can not in the absence of statue, be recovered in a civil action. But Act No.1757 of the Philippine Commission, which defines and penalizes several forms of gambling, containsnumerous provisions recognizing the right to recover money lost in gambling or in the playing ofcertain games (secs. 6, 7, 8, 9, 11). The original complaint in the action in the Court of First Instanceis not clear as to the particular section of Act No. 1757 under which the action is brought, but it isalleged that the money was lost at gambling, banking, and percentage game in which the defendant


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was banker. It must therefore be assumed that the action is based upon the right of recovery givenin Section 7 of said Act, which declares that an action may be brought against the banker by anyperson losing money at a banking or percentage game.

Is this a cause arising upon contract, express or implied, as this term is used in section 412 of theCode of Civil Procedure? To begin the discussion, the English version of the Code of Civil Procedure

is controlling (sec. 15, Admin. Code, ed. of 1917). Furthermore it is universally admitted to be properin the interpretation of any statute, to consider its historical antecedents and its juris prudentialsources. The Code of Civil Procedure, as is well known, is an American contribution to Philippinelegislation. It therefore speaks the language of the common-law and for the most part reflects itsideas. When the draftsman of this Code used the expression contract, express or implied, he used aphrase that has been long current among writers on American and English law; and it is thereforeappropriate to resort to that system of law to discover the appropriate to resort to that system of lawto discover the meaning which the legislator intended to convey by those meaning which thelegislator intended to convey by those terms. We remark in passing that the expression contratotracito, used in the official translation of the Code of Civil Procedure as the Spanish equivalent ofimplied contract, does not appear to render the full sense of the English expression.

The English contract law, so far as relates to simple contracts is planted upon two foundations,which are supplied by two very different conceptions of legal liability. These two conceptions arerevealed in the ideas respectively underlying (1) the common- law debt and (2) the assumptualpromise. In the early and formative stages of the common-law the only simple contract of which thecourts took account was the realcontract or contract re, in which the contractual duty imposed bylaw arises upon the delivery of a chattle, as in the mutuum, commodatum,depositum, and the like;and the purely consensual agreements of the Roman Law found no congenial place in the earlycommon law system.

In course of time the idea underlying the contract re was extended so as to include from one personto another under such circumstances as to constitute a justa cuas debendi. The obligation therebycreated was a debt. The constitutive element in this litigation is found in the fact that the debtor hasreceived something from the creditor, which he is bound by the obligation of law to return or pay for.

From an early day this element was denominated the quid pro quo, an ungainly phrase coined byMediaeval Latinity. The quid pro quowas primarily a materials or physical object, and its constitutedthe recompense or equivalent acquired by the debtor. Upon the passage of the quid pro quofromone party to the other, the law imposed that real contractual duty peculiar to the debt. No oneconversant with the early history of English law would ever conceive of the debt as an obligationcreated by promise. It is the legal duty to pay or deliver a sum certain of money or an ascertainablequantity of ponderable or measurable chattles.

The ordinary debt, as already stated, originates in a contract in which a quid pro quopasses to thedebtor at the time of the creation of the debt, but the term is equally applicable to duties imposed bycustom or statute, or by judgment of a court.

The existence of a debt supposes one person to have possession of thing ( res) which he owesandhence ought to turn over the owner. This obligation is the oldest conception of contract with whichthe common law is familiar; and notwithstanding the centuries that have rolled over Westminster Hallthat conception remains as one of the fundamental bases of the common-law contract.

Near the end of the fifteenth century there was evolved in England a new conception of contractualliability, which embodied the idea of obligation resulting from promise and which found expression inthe common law assumpsit, or parol promise supported by a consideration. The application of thisnovel conception had the effect of greatly extending the filed of contractual liability and by this


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means rights of action came to be recognized which had been unknown before. The action ofassumpsit which was the instrument for giving effect to this obligation was found to be a usefulremedy; and presently this action came to be used for the enforcement of common-law debts. Theresult was to give to our contract law the superficial appearance of being based more or lessexclusively upon the notion of the obligation of promise.

An idea is widely entertained to the effect that all simple contracts recognized in the common-lawsystem are referable to a singly category. They all have their roots, so many of us imagine, in onegeneral notion of obligation; and of course the obligation of promise is supposed to supply thisgeneral notion, being considered a sort ofmenstruumin which all other forms of contractualobligation have been dissolved. This a mistake. The idea of contractual duty embodied in the debtwhich was the first conception of contract liability revealed in the common law, has remained,although it was detained to be in a measure obscured by the more modern conception of obligationresulting from promise.

What has been said is intended to exhibit the fact that the duty to pay or deliver a sum certain ofmoney or an ascertainable quantity of ponderable or measurable chattles which is indicated bythem debt has ever been recognized, in the common-law system, as a true contract, regardless,of the source of the duty or the manner in which it is create whether derived from custom, statueor some consensual transaction depending upon the voluntary acts of the parties. the form ofcontract known as the debt is of the most ancient lineage; and when reference is had to historicalantecedents, the right of the debt to be classed as a contract cannot be questioned. Indeed whenthe new form of engagement consisting of the parol promise supported by a consideration firstappeared, it was looked upon as an upstart and its right to be considered a true contract wasquestioned. It was long customary to refer to it exclusively as an assumpsit, agreement, undertaking,or parol promise, in fact anything but a contract. Only in time did the new form of engagement attainthe dignity of being classed among true contract.

The term implied takers us into shadowy domain of those obligations the theoretical classification ofwhich has engaged the attention of scholars from the time of Gaius until our own day and has beena source of as much difficulty to the civilian as to the common-law jurist. There we are concerned

with those acts which make one person debtor to another without there having intervened betweenthem any true agreement tending to produce a legal bond (vinculum juris). Of late years some

American and English writers have adopted the term quasi-contract as descriptive of theseobligations or some of them; but the expression more commonly used is implied contract.

Upon examination of these obligations, from the view point of the common-law jurisprudence, it willbe found that they fall readily into two divisions according as they bear an analogy to the common-law debt or to the common law assumpsit. To exhibit the scope of these different classes ofobligations is here impracticable. It is only necessary in this connection to observe that the mostconspicuous division is that which comprises duties in the nature of debt. The characteristic featureof these obligations is that upon certain states of fact the law imposes an obligation to pay a sumcertain of money; and it is characteristic of this obligation that the money in respect to which the dutyis raised is conceived as being equivalent of something taken or detained under circumstancesgiving rise to the duty to return or compensate therefore. The proposition that no one shall beallowed to enrich himself unduly at the expense of another embodies the general principle here lyingat the basis of obligation. The right to recover money improperly paid (repeticion de lo indebido) isalso recognized as belong to this class of duties.

It will observed that according to the Civil Code obligations are supposed to be derived either from(1) the law, (2) contracts and quasi-contracts, (3) illicit acts and omission, or (4) acts in which somesort ob lame or negligence is present. This enumeration of sources of obligations and the obligation


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imposed by law are different types. The learned Italian jurist, Jorge Giorgi, criticises this assumptionand says that the classification embodied in the code is theoretically erroneous. His conclusion isthat one or the other of these categories should have been suppressed and merged in the other.(Giorgi, Teoria de las Obligaciones, Spanish ed., vol. 5 arts. 5, 7, 9.) The validity of this criticism is,we thin, self-evident; and it is of interest to note that the common law makes no distinction betweenthe two sources of liability. The obligations which in the Code are indicated as quasi-contracts, as

well as those arising ex lege, are in the common la system, merged into the category of obligationsimposed by law, and all are denominated implied contracts.

Many refinements, more or less illusory, have been attempted by various writers in distinguishingdifferent sorts of implied contracts, as for example, the contract implied as of fact and the contractimplied as of law. No explanation of these distinctions will be here attempted. Suffice it to say thatthe term contract, express or implied, is used to by common-law jurists to include all purely personalobligations other than those which have their source in delict, or tort. As to these it may be said that,generally speaking, the law does not impose a contractual duty upon a wrongdoer to compensate forinjury done. It is true that in certain situations where a wrongdoer unjustly acquired something at theexpense of another, the law imposes on him a duty to surrender his unjust acquisitions, and theinjured party may here elect to sue upon this contractual duty instead of suing upon the tort; buteven here the distinction between the two liabilities, in contract and in tort, is never lost to sight; andit is always recognized that the liability arising out of the tort is delictual and not of a contractual orquasi-contractual nature.

In the case now under consideration the duty of the defendant to refund the money which he wonfrom the plaintiff at gaming is a duty imposed by statute. It therefore arises ex lege. Furthermore, it isa duty to return a certain sum which had passed from the plaintiff to the defendant. By all the criteriawhich the common law supplies, this a duty in the nature of debt and is properly classified as animplied contract. It is well- settled by the English authorities that money lost in gambling or by lottery,if recoverable at all, can be recovered by the loser in an action ofindebitatus assumpsitfor moneyhad and received. (Clarke vs. Johnson. Lofft, 759; Mason vs. Waite, 17 Mass., 560; Burnham vs.Fisher, 25 Vt., 514.) This means that in the common law the duty to return money won in this way isan implied contract, or quasi-contract.

It is no argument to say in reply to this that the obligation here recognized is called an impliedcontract merely because the remedy commonly used in suing upon ordinary contract can be hereused, or that the law adopted the fiction of promise in order to bring the obligation within the scope ofthe action ofassumpsit. Such statements fail to express the true import of the phenomenon. Beforethe remedy was the idea; and the use of the remedy could not have been approved if it had not beenfor historical antecedents which made the recognition of this remedy at one logical and proper.Furthermore, it should not be forgotten that the question is not how this duty but what sort ofobligation did the author of the Code of Civil Procedure intend to describe when he sued the termimplied contract in section 412.

In what has been said we have assumed that the obligation which is at the foundation of the originalaction in the court below is not a quasi-contract, when judge by the principles of the civil law. A fewobservations will show that this assumption is not by any means free from doubt. The obligation inquestion certainly does not fall under the definition of either of the two-quasi- contracts which aremade the subject of special treatment in the Civil Code, for its does not arise from a licit act ascontemplated in article 1895. The obligation is clearly a creation of the positive law acircumstance which brings it within the purview of article 1090, in relation with article, 1089; and it isalso derived from an illicit act, namely, the playing of a prohibited game. It is thus seen that theprovisions of the Civil Code which might be consulted with a view to the correct theoreticalclassification of this obligation are unsatisfactory and confusing.


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The two obligations treated in the chapter devoted to quasi-contracts in the Civil Code are (1) theobligation incident to the officious management of the affairs of other person (gestion de negociosajenos) and (2) the recovery of what has been improperly paid (cabro de lo indebido). That theauthors of the Civil Code selected these two obligations for special treatment does not signify anintention to deny the possibility of the existence of other quasi-contractual obligations. As is well saidby the commentator Manresa.

The number of the quasi-contracts may be indefinite as may be the number of lawful facts,the generations of the said obligations; but the Code, just as we shall see further on, in theimpracticableness of enumerating or including them all in a methodical and orderlyclassification, has concerned itself with two only namely, the management of the affairs ofother person and the recovery of things improperly paid without attempting by this toexclude the others. (Manresa, 2d ed., vol. 12, p. 549.)

It would indeed have been surprising if the authors of the Code, in the light of the jurisprudence ofmore than a thousand years, should have arbitrarily assumed to limit the quasi-contract to twoobligations. The author from whom we have just quoted further observes that the two obligations inquestion were selected for special treatment in the Code not only because they were the mostconspicuous of the quasi-contracts, but because they had not been the subject of consideration inother parts of the Code. (Opus citat., 550.)

It is well recognized among civilian jurists that the quasi- contractual obligations cover a wide range.The Italian jurist, Jorge Giorgi, to whom we have already referred, considers under this head, amongother obligations, the following: payments made upon a future consideration which is not realized orupon an existing consideration which fails; payments wrongfully made upon a consideration which iscontrary to law, or opposed to public policy; and payments made upon a vicious consideration orobtained by illicit means (Giorgi, Teoria de las Obligaciones, vol. 5, art. 130.)

Im permitting the recovery of money lost at play, Act No. 1757 has introduced modifications in theapplication of articles 1798, 180`, and 1305 of the Civil Code. The first two of these articles relate togambling contracts, while article 1305 treats of the nullity of contracts proceeding from a vicious or

illicit consideration. Taking all these provisions together, it must be apparent that the obligation toreturn money lost at play has a decided affinity to contractual obligations; and we believe that itcould, without violence to the doctrines of the civil law, be held that such obligations is an innominatequasi-contract. It is, however, unnecessary to place the decision on this ground.

From what has been said it follows that in our opinion the cause of action stated in the complaints inthe court below is based on a contract, express or implied and is therefore of such nature that thecourt had authority to issue writ of attachment. The application for the writ ofcertiorarimust thereforebe denied and the proceedings dismissed. So ordered.

Arellano, C.J., Torres, Johnson and Carson, JJ., concur.

Separate Opinions

MALCOLM, J., concurring:


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As I finished reading the learned and interesting decision of the majority, the impression whichremained was that the court was enticed by the nice and unusual points presented to make a hardcase out of an easy one and unfortunately t do violence to the principles ofcertiorari. The simplequestions are : Di the Court of First Instance of city of Manila exceed its jurisdiction in granting anattachments against the property of the defendant, now plaintiff? Has this defendant, now becomethe plaintiff, any other plain, speedy and adequate remedy? The answer are found in the decision of

thinks court, in Herrera vs. Barretto and Joaquin ([1913], 25 Phil., 245), from which I quote thefollowing:

It has been repeatedly held by this court that a writ ofcertiorariwill not be issued unless itclearly appears that the court to which it is to be directed acted without or in excess of

jurisdiction. It will not be issued to cure errors in the proceedings or to correct erroneousconclusions of law or of fact. If the court has jurisdiction. It will not be issued to cure errors inthe proceedings to correct jurisdiction of the subject matter and f the person, decisions uponall question pertaining to the cause are decisions within its jurisdiction and, however irregularor erroneous they may be, cannot be corrected by certiorari. The Code of Civil Proceduregiving Courts of First Instance general jurisdiction in actions formandamus, it goes withoutsaying that the Court of First Instance had jurisdiction in the present case to resolve everyquestion arising in such an action and t decide every question presented to it whichpertained to the cause. It has already been held by this court, that while it is a power to beexercised only in extreme case, a Court of First Instance has power to issue a mandatoryinjunction t stand until the final determination of the action in which it is issued. While theissuance of the mandatory injunction in this particular case may have been irregular anderroneous, a question concerning which we express no opinion, nevertheless its issuancewas within the jurisdiction of the court and its action is not reveiwable on certiorari. It is notsufficient to say that it was issued wrongfully and without sufficient grounds and in theabsence of the other party. The question is, Did the court act with jurisdiction?

It has been urged that the court exceeded its jurisdiction in requiring the municipal president tissue the license, for the reason that he was not the proper person to issue it and that, if hewas the proper person, he had the right to exercise a discretion as to whom the license

should be issued. We do not believe that either of these questions goes to the jurisdiction ofthe court to act. One of the fundamental question in amandamusagainst a public officer iswhether or not that officer has the right to exercise discretion in the performance of the actwhich the plaintiff asks him to perform. It is one of the essential determinations of the cause.To claim that the resolution of that question may deprive the court of jurisdiction is to assert anovel proposition. It is equivalent to the contention that a court has jurisdiction if he decidesright but no jurisdiction if he decides wrong. It may be stated generally that it is nevernecessary to decide the fundamental questions of a cause to determine whether the courthas jurisdiction. The question of jurisdiction is preliminary and never touches the merits ofthe case. The determination of the fundamental questions of a cause are merely the exerciseof a jurisdiction already conceded. In the case at bar no one denies the power, authority or

jurisdiction of the Court of First Instance to take cognizance of an action formandamusand todecide very question which arises in that cause and pertains thereto. The contention that the

decision of one of those question, if wrong, destroys jurisdiction involves an evidentcontradiction.

Jurisdiction is the authority to hear and determine a cause the right to act in a case. Sinceit is the power to hear and determine, it does not depend either upon the regularity of theexercise of that power or upon the rightfulness of the decision made. Jurisdiction shouldtherefore be distinguished from the exercise of jurisdiction. The authority to decide a case atall, and not the decision rendered therein, is what makes up jurisdiction. Where there is


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jurisdiction of the person and subject matter, as we have said before, the decision of all otherquestions arising in the case an exercise of that jurisdiction.

Then follows an elaborate citation and discussion of American authorities, including a decision of theUnited States Supreme Court and of the applicable Philippine cases. The decision continues"

The reasons givens in these cases last cited for the allowance of the writ of prohibition areapplicable only to the class of cases with which the decision deal and do not in any waymilitate against the general proposition herein asserted. Those which relate to electioncontest are based upon the principle that those proceedings, are special in their nature andmust be strictly followed, a material departure from the statute resulting a loss, or in anexcess of jurisdiction. The cases relating to receivers are based, in a measure, upon theprinciple the appointment of a receiver being governed by the statute; and in part upon thetheory that the appointment of a receiver in an improper case is in substance a bankruptcyproceeding, the taking of which is expressly prohibited by law. The case relative to theallowance of alimony pendente litewhen the answer den

oblicon cases part 1

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