Sagrada Orden de Predicadores de

Filipinas vs. National Coconut

Corporation.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-3756

June 30, 1952

SAGRADA ORDEN DE PREDICADORES DEL SANTISMO ROSARIO DE

FILIPINAS, plaintiff-appellee,
vs.
NATIONAL COCONUT CORPORATION, defendant-appellant.
First Assistant Corporate Counsel Federico C. Alikpala and Assistant Attorney
Augusto
Kalaw
for
appellant.
Ramirez and Ortigas for appellee.
LABRADOR, J.:
This is an action to recover the possession of a piece of real property (land and
warehouses) situated in Pandacan Manila, and the rentals for its occupation and use.
The land belongs to the plaintiff, in whose name the title was registered before the war.
On January 4, 1943, during the Japanese military occupation, the land was acquired by
a Japanese corporation by the name of Taiwan Tekkosho for the sum of P140,00, and
thereupon title thereto issued in its name (transfer certificate of title No. 64330,
Register of Deeds, Manila). After liberation, more specifically on April 4, 1946, the Alien
Property Custodian of the United States of America took possession, control, and
custody thereof under section 12 of the Trading with the Enemy Act, 40 Stat., 411, for
the reason that it belonged to an enemy national. During the year 1946 the property was
occupied by the Copra Export Management Company under a custodianship agreement
with United States Alien Property Custodian (Exhibit G), and when it vacated the
property it was occupied by the defendant herein. The Philippine Government made
representations with the Office Alien Property Custodian for the use of property by the
Government (see Exhibits 2, 2-A, 2-B, and 1). On March 31, 1947, the defendant was
authorized to repair the warehouse on the land, and actually spent thereon the repairs
the sum of P26,898.27. In 1948, defendant leased one-third of the warehouse to one
Dioscoro Sarile at a monthly rental of P500, which was later raised to P1,000 a month.
Sarile did not pay the rents, so action was brought against him. It is not shown, however,
if the judgment was ever executed.

Plaintiff made claim to the property before the Alien Property Custodian of the United
States, but as this was denied, it brought an action in court (Court of First Instance of
Manila, civil case No. 5007, entitled "La Sagrada Orden Predicadores de la Provinicia
del Santisimo Rosario de Filipinas," vs. Philippine Alien Property Administrator,
defendant, Republic of the Philippines, intervenor) to annul the sale of property of
Taiwan Tekkosho, and recover its possession. The Republic of the Philippines was
allowed to intervene in the action. The case did not come for trial because the parties
presented a joint petition in which it is claimed by plaintiff that the sale in favor of the
Taiwan Tekkosho was null and void because it was executed under threats, duress, and
intimidation, and it was agreed that the title issued in the name of the Taiwan Tekkosho
be cancelled and the original title of plaintiff re-issued; that the claims, rights, title, and
interest of the Alien Property Custodian be cancelled and held for naught; that the
occupant National Coconut Corporation has until February 28, 1949, to recover its
equipment from the property and vacate the premises; that plaintiff, upon entry of
judgment, pay to the Philippine Alien Property Administration the sum of P140,000;
and that the Philippine Alien Property Administration be free from responsibility or
liability for any act of the National Coconut Corporation, etc. Pursuant to the agreement
the court rendered judgment releasing the defendant and the intervenor from liability,
but reversing to the plaintiff the right to recover from the National Coconut Corporation
reasonable rentals for the use and occupation of the premises. (Exhibit A-1.)
The present action is to recover the reasonable rentals from August, 1946, the date when
the defendant began to occupy the premises, to the date it vacated it. The defendant
does not contest its liability for the rentals at the rate of P3,000 per month from
February 28, 1949 (the date specified in the judgment in civil case No. 5007), but resists
the claim therefor prior to this date. It interposes the defense that it occupied the
property in good faith, under no obligation whatsoever to pay rentals for the use and
occupation of the warehouse. Judgment was rendered for the plaintiff to recover from
the defendant the sum of P3,000 a month, as reasonable rentals, from August, 1946, to
the date the defendant vacates the premises. The judgment declares that plaintiff has
always been the owner, as the sale of Japanese purchaser was void ab initio; that the
Alien Property Administration never acquired any right to the property, but that it held
the same in trust until the determination as to whether or not the owner is an enemy
citizen. The trial court further declares that defendant can not claim any better rights
than its predecessor, the Alien Property Administration, and that as defendant has used
the property and had subleased portion thereof, it must pay reasonable rentals for its
occupation.
Against this judgment this appeal has been interposed, the following assignment of
error having been made on defendant-appellant's behalf:
The trial court erred in holding the defendant liable for rentals or compensation
for the use and occupation of the property from the middle of August, 1946, to
December 14, 1948.

1. Want to "ownership rights" of the Philippine Alien Property Administration did

not render illegal or invalidate its grant to the defendant of the free use of
property.
2. the decision of the Court of First Instance of Manila declaring the sale by the
plaintiff to the Japanese purchaser null and void ab initio and that the plaintiff
was and has remained as the legal owner of the property, without legal
interruption, is not conclusive.
3. Reservation to the plaintiff of the right to recover from the defendant
corporation not binding on the later;
4. Use of the property for commercial purposes in itself alone does not justify
payment of rentals.
5. Defendant's possession was in good faith.
6. Defendant's possession in the nature of usufruct.
In reply, plaintiff-appellee's counsel contends that the Philippine Allien Property
Administration (PAPA) was a mere administrator of the owner (who ultimately was
decided to be plaintiff), and that as defendant has used it for commercial purposes and
has leased portion of it, it should be responsible therefore to the owner, who had been
deprived of the possession for so many years. (Appellee's brief, pp. 20, 23.)
We can not understand how the trial court, from the mere fact that plaintiff-appellee
was the owner of the property and the defendant-appellant the occupant, which used for
its own benefit but by the express permission of the Alien Property Custodian of the
United States, so easily jumped to the conclusion that the occupant is liable for the value
of such use and occupation. If defendant-appellant is liable at all, its obligations, must
arise from any of the four sources of obligations, namley, law, contract or quasicontract, crime, or negligence. (Article 1089, Spanish Civil Code.) Defendant-appellant
is not guilty of any offense at all, because it entered the premises and occupied it with
the permission of the entity which had the legal control and administration thereof, the
Allien Property Administration. Neither was there any negligence on its part. There was
also no privity (of contract or obligation) between the Alien Property Custodian and the
Taiwan Tekkosho, which had secured the possession of the property from the plaintiffappellee by the use of duress, such that the Alien Property Custodian or its permittee
(defendant-appellant) may be held responsible for the supposed illegality of the
occupation of the property by the said Taiwan Tekkosho. The Allien Property
Administration had the control and administration of the property not as successor to
the interests of the enemy holder of the title, the Taiwan Tekkosho, but by express
provision of law (Trading with the Enemy Act of the United States, 40 Stat., 411; 50
U.S.C.A., 189). Neither is it a trustee of the former owner, the plaintiff-appellee herein,
but a trustee of then Government of the United States (32 Op. Atty. Gen. 249; 50
U.S.C.A. 283), in its own right, to the exclusion of, and against the claim or title of, the
enemy owner. (Youghioheny & Ohio Coal Co. vs. Lasevich [1920], 179 N.W., 355; 171
Wis., 347; U.S.C.A., 282-283.) From August, 1946, when defendant-appellant took

possession, to the late of judgment on February 28, 1948, Allien Property

Administration had the absolute control of the property as trustee of the Government of
the United States, with power to dispose of it by sale or otherwise, as though it were the
absolute owner. (U.S vs. Chemical Foundation [C.C.A. Del. 1925], 5 F. [2d], 191; 50
U.S.C.A., 283.) Therefore, even if defendant-appellant were liable to the Allien Property
Administration for rentals, these would not accrue to the benefit of the plaintiffappellee, the owner, but to the United States Government.
But there is another ground why the claim or rentals can not be made against
defendant-appellant. There was no agreement between the Alien Property Custodian
and the defendant-appellant for the latter to pay rentals on the property. The existence
of an implied agreement to that effect is contrary to the circumstances. The copra
Export Management Company, which preceded the defendant-appellant, in the
possession and use of the property, does not appear to have paid rentals therefor, as it
occupied it by what the parties denominated a "custodianship agreement," and there is
no provision therein for the payment of rentals or of any compensation for its custody
and or occupation and the use. The Trading with the Enemy Act, as originally enacted,
was purely a measure of conversation, hence, it is very unlikely that rentals were
demanded for the use of the property. When the National coconut Corporation
succeeded the Copra Export Management Company in the possession and use of the
property, it must have been also free from payment of rentals, especially as it was
Government corporation, and steps where then being taken by the Philippine
Government to secure the property for the National Coconut Corporation. So that the
circumstances do not justify the finding that there was an implied agreement that the
defendant-appellant was to pay for the use and occupation of the premises at all.
The above considerations show that plaintiff-appellee's claim for rentals before it
obtained the judgment annulling the sale of the Taiwan Tekkosho may not be predicated
on any negligence or offense of the defendant-appellant, or any contract, express or
implied, because the Allien Property Administration was neither a trustee of plaintiffappellee, nor a privy to the obligations of the Taiwan Tekkosho, its title being based by
legal provision of the seizure of enemy property. We have also tried in vain to find a law
or provision thereof, or any principle in quasi contracts or equity, upon which the claim
can be supported. On the contrary, as defendant-appellant entered into possession
without any expectation of liability for such use and occupation, it is only fair and just
that it may not be held liable therefor. And as to the rents it collected from its lessee, the
same should accrue to it as a possessor in good faith, as this Court has already expressly
held. (Resolution, National Coconut Corporation vs. Geronimo, 83 Phil. 467.)
Lastly, the reservation of this action may not be considered as vesting a new right; if no
right to claim for rentals existed at the time of the reservation, no rights can arise or
accrue from such reservation alone.
Wherefore, the part of the judgment appealed from, which sentences defendantappellant to pay rentals from August, 1946, to February 28, 1949, is hereby reversed. In
all other respects the judgment is affirmed. Costs of this appeal shall be against the
plaintiff-appellee.

Paras, C.J., Pablo, Bengzon, Padilla, Tuason, Montemayor, and Bautista Angelo,
JJ, concur.

Arturo Pelayo vs. Marcelo Lauron,

et al.
Republic of the Philippines
SUPREME 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,
Filemon Sotto, for appellee.

for

appellant.

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 said year, at night, the plaintiff was called to the house of the
defendants, situated in San Nicolas, and that upon arrival he was requested by them to
render medical assistance to their daughter-in-law who was about to give birth to a
child; that therefore, and after consultation with the attending physician, Dr. Escao, it
was found necessary, on account of the difficult birth, to remove the fetus by means of
forceps which operation was performed by the plaintiff, who also had to remove the
afterbirth, in which services he was occupied until the following morning, and that
afterwards, on the same day, he visited the patient several times; that the just and
equitable value of the services rendered by him was P500, which the defendants refuse
to pay without alleging any good reason therefor; that for said reason he prayed that the
judgment be entered in his favor as against the defendants, or any of them, for the sum
of P500 and costs, together with any other relief that might be deemed proper.
In answer to the complaint counsel for the defendants denied all of the allegation
therein contained and alleged as a special defense, that their daughter-in-law had died

in consequence of the said childbirth, and that when she was alive she lived with her
husband independently and in a separate house without any relation whatever with
them, and that, if on the day when she gave birth she was in 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, directing the defendants, on the 23rd of January, 1907, to amend their
answer. In compliance with this order the defendants presented, on the same date, their
amended answer, denying each and every one of the 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 on the 5th of April, 1907, whereby the defendants were absolved from the former
complaint, on account of the lack of sufficient evidence to establish a right of action
against the defendants, with costs against the plaintiff, who excepted to the said
judgment and in addition moved for a new trial on the ground that the judgment was
contrary to law; the motion was overruled and the plaintiff excepted and in due course
presented the corresponding bill of exceptions. The motion of the defendants requesting
that the declaration contained in the judgment that the defendants had demanded
therefrom, for the reason that, according to the evidence, no such request had been
made, was also denied, and to the decision the defendants excepted.
Assuming that it is a real fact of knowledge by the defendants that the plaintiff, by virtue
of having been 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 of the said physician regarding the recovery of
his fees, it becomes necessary to decide who is bound to 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 negligence occurs.
Obligations arising from law are not presumed. Those expressly determined in the code
or in special laws, etc., are the only demandable ones. Obligations arising from contracts
have legal force between 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 to which 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 are mutually bound to support each other, there can be no question but that,
when either of them by reason of illness should be in need of medical assistance, the
other is under the unavoidable obligation to furnish the necessary services of a physician
in order that health may be restored, and he or she may be freed from the sickness by
which life is jeopardized; the party bound to furnish such support is therefore liable for
all expenses, including the fees of the medical expert for his professional services. This
liability originates from the above-cited mutual obligation which the law has expressly
established between the married couple.
In the face of the above legal precepts it is unquestionable that the person bound to pay
the fees due to the plaintiff for the professional services that he rendered to the
daughter-in-law of the defendants 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 of the imminent danger,
to which the life of the patient was at that moment exposed, considered that medical
assistance was urgently needed, and the obligation of the husband to furnish his wife in
the indispensable services of a physician at such critical moments is specially
established by the law, as has been seen, and compliance therewith is unavoidable;
therefore, the plaintiff, who believes that he is entitled to recover his fees, must direct
his action against the husband who is under obligation to 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 action against the defendants simply because they were the parties who called the
plaintiff and requested him to assist the patient during her difficult confinement, and
also, possibly, because they were her father 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 in consequence of
any contract entered into between them and the plaintiff from which such obligation
might 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 bound himself to support another who was not his relative,
established the rule that the law does impose the obligation to pay for the support of a
stranger, but as the liability arose out of a contract, the stipulations of the agreement
must be held. (Decision of May 11, 1897.)

Within the meaning of the law, the father and mother-in-law are strangers with respect
to the obligation that devolves upon the husband to provide support, among which is the
furnishing of medical assistance to his wife at the time of her confinement; and, on the
other hand, it does not appear that a contract existed between the defendants and the
plaintiff physician, for which reason it is obvious that the former can not be compelled
to pay fees which they are under no liability to pay because it does not appear that they
consented to bind themselves.
The foregoing suffices to demonstrate that the first and second errors assigned to the
judgment below are unfounded, because, if the plaintiff has no right of action against
the defendants, it is needless 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
judgment appealed from should be affirmed with the costs against the appellant. So
ordered.
Mapa
Arellano,
C.J.,
Willard, J., dissents.

and
and

Carson,

Tracey,
J., concurs

in

the

JJ., concur.
result.

Leung Ben vs. P. J. O'brien, et al.

Republic of the Philippines
SUPREME COURT
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 of Manila, defendants.
Thos.
D.
Aitken
and
Kincaid & Perkins for defendants.

W.

A.

Armstrong

for

plaintiff.

STREET, J.:
This is an application for a writ of certiorari, the purpose of which is to quash an
attachment issued from 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 Manila by P. J. O'Brien to recover of Leung Ben the sum of P15,000 alleged to
have been lost by the plaintiff to the defendant in a series of gambling, banking and
percentage games conducted ruing the two or three months prior to the institution of
the suit. In his verified complaint the plaintiff asked for an attachment, under section
424, and 412 (1) of the Code of Civil Procedure, against the property of the defendant, on
the ground that the latter was about to depart from the Philippine islands with intent to
defraud his creditors. This attachment was issued; and acting under the authority
thereof, the sheriff attached the sum of P15,000 which had been deposited by the
defendant 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 defendant in that action, presented to this court, upon January 8, 1918
his petition for the writ ofcertiorari directed against P. J. O'Brien and the judges of the
Court of First Instance of the city of Manila 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 the record to this court for
review and that the order of attachment which had been issued should be revoked and
discharged. with costs. Upon the filing of said petition in this court the usual order was
entered requiring the defendants to show cause why the writ should not issue. The
response of the defendants, in the nature of a demurrer, was filed upon January 21,
1918; and the matter is now heard upon the pleadings thus presented.
The provision of law under which this attachment was issued requires that there should
be accuse of action arising upon contract, express or implied. The contention of the
petitioner is that the statutory action to recover money lost at gaming is that the
statutory action to recover money lost at gaming is no such an action as is contemplated
in this provision, and he therefore insists that the original complaint shows on its face
that the remedy of attachment is not available in aid thereof; that the Court of First
Instance acted in excess of its jurisdiction in granting the writ of attachment; that the
petitioner has no plain, speedy, and adequate remedy by appeal or otherwise; and that
consequently the writ of certiorari supplies the appropriate remedy for his relief.
The case presents the two following questions of law, either of which, if decided
unfavorably to the petitioner, will be fatal to his application:

(1) Supposing that the Court of First Instance has granted an attachment for which there
is no statutory 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 section 514 of the Code of Civil Procedure the Supreme Court has original
jurisdiction by the writ of certiorari over the proceedings of Courts of First Instance,
wherever said courts have exceeded their jurisdiction and there is no plaint, speedy, and
adequate remedy. In the same section, it is further declared that the proceedings in the
Supreme Court in such cases hall be as prescribed for Courts of First Instance in section
217-221, inclusive, of said Code. This Supreme Court, so far as applicable, the provisions
contained in those section to the same extent as if they had been reproduced verbatim
immediately after section 514. Turning to section 217, we find that, in defining the
conditions under which certiorari can 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 First Instance, substantially the same language is used as is found in
section 514 relative to the conditions under which the same remedy can be maintained
in the Supreme Court, namely, when the inferior tribunal has exceeded its jurisdiction
and there is no appeal, nor any plain, speedy and adequate remedy. In using these
expressions the author of the Code of Civil Procedure merely adopted the language
which, in American jurisdictions at least, had long ago reached the stage of stereotyped
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 regularly pursued its authority it shall give judgment either affirming
annulling, or modifying the proceedings below, as the law requires. The expression, has
not regularly pursued its authority as here used, is suggestive, 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 in section 217. Taking
the three together, it results in our opinion that any irregular exercise of juridical power
by a Court of First Instance, in excess of its lawful jurisdiction, is remediable by the writ
of certiorari, provided there is no other plain, speedy, and adequate remedy; and in
order to make out a case for the granting of the writ it is not necessary that the court
should have acted in the matter without any jurisdiction whatever. Indeed the repeated
use of expression excess of jurisdiction shows that the lawmaker contemplated the
situation where a court, having jurisdiction should irregularly transcend its authority as
well as the situation where the court is totally devoid of lawful power.

It may be observed in this connection that the word jurisdiction as used in attachment
cases, has reference 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.) This distinction between jurisdiction to issue the
attachment as an ancillary remedy incident to the principal 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 distinction between
jurisdiction over the ancillary has been recognized by this court in connection with
actions involving 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 order making the appointment was beyond the jurisdiction of the
court; and though the court admittedly had jurisdiction of the main cause, the order was
vacated by this court upon application a writ of certiorari. (See Blanco 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 is no statutory authority, it is acting irregularly and in excess of its
jurisdiction, in the sense necessary to justify the Supreme Court in granting relief by the
writ of certiorari. In applying this proposition it is of course necessary to take account of
the difference between a ground of attachment based on the nature of the action and a
ground of attachment based on the acts or the conditions of the defendant. Every
complaint must show a cause of action some sort; and when the statue declares that the
attachment may issue in an action arising upon contract, the express or implied, it
announces 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 stature declares 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 it may involve a disputed question of fact
which must be decided by the court. In making this determination, the court obviously
acts within its powers; and it would be idle to suppose that the writ of certiorari would
be available to reverse the action of a Court of First Instance in determining the
sufficiency of the proof on such a disputed point, and in granting or refusing the
attachment accordingly.
We should not be understood, in anything that has been said, as intending to infringe
the doctrine enunciated by this court in Herrera vs.Barretto and Joaquin (25 Phil. Rep.,
245), when properly applied. It was there held that we would not, upon application for a
writ of certiorari, dissolve an interlocutory mandatory injunction that had been issued
in a Court of First Instance as an incident in an action of mandamus. The issuance of an
interlocutory injunction depends upon conditions essentially different from those

involved in the issuance of an attachment. The injunction is designed primarily for the
prevention of irreparable injury and the use of the remedy is in a great measure
dependent upon the exercise of discretion. Generally, it may be said that the exercise of
the injunctive powers is inherent in judicial authority; and ordinarily it would be
impossible to distinguish between the jurisdiction of the court in the main litigation and
its jurisdiction to grant an interlocutory injunction, for the latter is involved in the
former. That the writ of certiorari can not be used to reverse an order denying a motion
for a preliminary injunction is of course not to cavil. (Somes vs. Crossfield and Molina, 8
Phil. Rep., 284.)
But it will be said that the writ of certiorari is not available in this cae, because the
petitioner is protected 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 and Figueras (6 Phil. Rep., 355), already referred to, and
the earlier case there cited. The remedy by appeal is not sufficiently speedy to meet the
exigencies of the case. An attachment is extremely violent, and its abuse may often result
in infliction of damage which could never be repaired by any pecuniary award at the
final hearing. To postpone the granting of the writ in such a case until the final hearing
and to compel the petitioner to bring the case here upon appeal merely in order to
correct the action of the trial court in the matter of allowing the attachment would seem
both unjust and unnecessary.
Passing to the problem propounded in the second question it may be observed that,
upon general principles,. recognize both the civil and common law, money lost in
gaming and voluntarily paid by the 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, contains numerous provisions
recognizing the right to recover money lost in gambling or in the playing of certain
games (secs. 6, 7, 8, 9, 11). The original complaint in the action in the Court of First
Instance is not clear as to the particular section of Act No. 1757 under which the action is
brought, but it is alleged that the money was lost at gambling, banking, and percentage
game in which the defendant was banker. It must therefore be assumed that the action
is based upon the right of recovery given in Section 7 of said Act, which declares that an
action may be brought against the banker by any person 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 the Code 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 proper in the interpretation of any statute, to consider its
historical antecedents and its juris prudential sources. The Code of Civil Procedure, as is

well known, is an American contribution to Philippine legislation. It therefore speaks

the language of the common-law and for the most part reflects its ideas. When the
draftsman of this Code used the expression contract, express or implied, he used a
phrase that has been long current among writers on American and English law; and it is
therefore appropriate to resort to that system of law to discover the appropriate to resort
to that system of law to discover the meaning which the legislator intended to convey by
those meaning which the legislator intended to convey by those terms. We remark in
passing that the expression contrato tracito, used in the official translation of the Code
of Civil Procedure as the Spanish equivalent of implied 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 are revealed in the ideas respectively underlying (1) the commonlaw debt and (2) the assumptual promise. In the early and formative stages of the
common-law the only simple contract of which the courts took account was
thereal contract or contract re, in which the contractual duty imposed by law 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 early common law system.
In course of time the idea underlying the contract re was extended so as to include from
one person to another under such circumstances as to constitute a justa cuas debendi.
The obligation thereby created was a debt. The constitutive element in this litigation is
found in the fact that the debtor has received 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 by Mediaeval Latinity.
The quid pro quo was primarily a materials or physical object, and its constituted the
recompense or equivalent acquired by the debtor. Upon the passage of the quid pro
quo from one party to the other, the law imposed that real contractual duty peculiar to
the debt. No one conversant with the early history of English law would ever conceive of
the debt as an obligation created by promise. It is the legal duty to pay or deliver a sum
certain of money or an ascertainable quantity of ponderable or measurable chattles.
The ordinary debt, as already stated, originates in a contract in which aquid pro
quo passes to the debtor at the time of the creation of the debt, but the term is equally
applicable to duties imposed by custom or statute, or by judgment of a court.
The existence of a debt supposes one person to have possession of thing (res) which
he owes and hence ought to turn over the owner. This obligation is the oldest conception
of contract with which the common law is familiar; and notwithstanding the centuries

that have rolled over Westminster Hall that 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
contractual liability, which embodied the idea of obligation resulting from promise and
which found expression in the common law assumpsit, or parol promise supported by a
consideration. The application of this novel conception had the effect of greatly
extending the filed of contractual liability and by this means rights of action came to be
recognized which had been unknown before. The action of assumpsit which was the
instrument for giving effect to this obligation was found to be a useful remedy; and
presently this action came to be used for the enforcement of common-law debts. The
result was to give to our contract law the superficial appearance of being based more or
less exclusively upon the notion of the obligation of promise.
An idea is widely entertained to the effect that all simple contracts recognized in the
common-law system are referable to a singly category. They all have their roots, so many
of us imagine, in one general notion of obligation; and of course the obligation of
promise is supposed to supply this general notion, being considered a sort
ofmenstruum in which all other forms of contractual obligation have been dissolved.
This a mistake. The idea of contractual duty embodied in the debt which 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 obligation
resulting from promise.
What has been said is intended to exhibit the fact that the duty to pay or deliver a sum
certain of money or an ascertainable quantity of ponderable or measurable chattles
which is indicated by them 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, statue or some consensual transaction
depending upon the voluntary acts of the parties. the form of contract known as the debt
is of the most ancient lineage; and when reference is had to historical antecedents, the
right of the debt to be classed as a contract cannot be questioned. Indeed when the new
form of engagement consisting of the parol promise supported by a consideration first
appeared, it was looked upon as an upstart and its right to be considered a true contract
was questioned. 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 attain the dignity of being classed among true contract.
The term implied takers us into shadowy domain of those obligations the theoretical
classification of which has engaged the attention of scholars from the time of Gaius until
our own day and has been a 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 between them 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 these obligations
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 will be 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 of obligations is here impracticable. It is only
necessary in this connection to observe that the most conspicuous division is that which
comprises duties in the nature of debt. The characteristic feature of these obligations is
that upon certain states of fact the law imposes an obligation to pay a sum certain of
money; and it is characteristic of this obligation that the money in respect to which the
duty is raised is conceived as being equivalent of something taken or detained under
circumstances giving rise to the duty to return or compensate therefore. The proposition
that no one shall be allowed to enrich himself unduly at the expense of another
embodies the general principle here lying at the basis of obligation. The right to recover
money improperly paid (repeticion de lo indebido) is also 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 some sort ob lame or negligence is present. This enumeration of
sources of obligations and the obligation imposed by law are different types. The learned
Italian jurist, Jorge Giorgi, criticises this assumption and says that the classification
embodied in the code is theoretically erroneous. His conclusion is that 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 between the 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 obligations imposed by law, and all are
denominated implied contracts.
Many refinements, more or less illusory, have been attempted by various writers in
distinguishing different sorts of implied contracts, as for example, the contract implied
as of fact and the contract implied as of law. No explanation of these distinctions will be
here attempted. Suffice it to say that the term contract, express or implied, is used to by
common-law jurists to include all purely personal obligations 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 for injury
done. It is true that in certain situations where a wrongdoer unjustly acquired
something at the expense of another, the law imposes on him a duty to surrender his
unjust acquisitions, and the injured party may here elect to sue upon this contractual
duty instead of suing upon the tort; but even here the distinction between the two
liabilities, in contract and in tort, is never lost to sight; and it is always recognized that
the liability arising out of the tort is delictual and not of a contractual or quasicontractual nature.
In the case now under consideration the duty of the defendant to refund the money
which he won from the plaintiff at gaming is a duty imposed by statute. It therefore
arises ex lege. Furthermore, it is a duty to return a certain sum which had passed from
the plaintiff to the defendant. By all the criteria which the common law supplies, this a
duty in the nature of debt and is properly classified as an implied contract. It is wellsettled 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 assumpsit for
money had 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 is an implied contract, or quasi-contract.
It is no argument to say in reply to this that the obligation here recognized is called an
implied contract merely because the remedy commonly used in suing upon ordinary
contract can be here used, or that the law adopted the fiction of promise in order to
bring the obligation within the scope of the action of assumpsit. Such statements fail to
express the true import of the phenomenon. Before the remedy was the idea; and the
use of the remedy could not have been approved if it had not been for 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 of obligation did the author of the Code of Civil Procedure intend to describe when
he sued the term implied contract in section 412.
In what has been said we have assumed that the obligation which is at the foundation of
the original action in the court below is not a quasi-contract, when judge by the
principles of the civil law. A few observations will show that this assumption is not by
any means free from doubt. The obligation in question certainly does not fall under the
definition of either of the two-quasi- contracts which are made the subject of special
treatment in the Civil Code, for its does not arise from a licit act as contemplated in
article 1895. The obligation is clearly a creation of the positive law a circumstance
which brings it within the purview of article 1090, in relation with article, 1089; and it is
also derived from an illicit act, namely, the playing of a prohibited game. It is thus seen

that the provisions of the Civil Code which might be consulted with a view to the correct
theoretical classification of this obligation are unsatisfactory and confusing.
The two obligations treated in the chapter devoted to quasi-contracts in the Civil Code
are (1) the obligation incident to the officious management of the affairs of other person
(gestion de negocios ajenos) and (2) the recovery of what has been improperly paid
(cabro de lo indebido). That the authors of the Civil Code selected these two obligations
for special treatment does not signify an intention to deny the possibility of the existence
of other quasi-contractual obligations. As is well said by 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 the impracticableness of enumerating or including them all in a
methodical and orderly classification, has concerned itself with two only
namely, the management of the affairs of other person and the recovery of things
improperly paid without attempting by this to exclude 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 of more than a thousand years, should have arbitrarily assumed to limit
the quasi-contract to two obligations. The author from whom we have just quoted
further observes that the two obligations in question were selected for special treatment
in the Code not only because they were the most conspicuous of the quasi-contracts, but
because they had not been the subject of consideration in other 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, among other obligations, the following: payments made upon a future
consideration which is not realized or upon an existing consideration which fails;
payments wrongfully made upon a consideration which is contrary to law, or opposed to
public policy; and payments made upon a vicious consideration or obtained 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 the application of articles 1798, 180`, and 1305 of the Civil Code. The
first two of these articles relate to gambling 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 to return money lost at play
has a decided affinity to contractual obligations; and we believe that it could, without
violence to the doctrines of the civil law, be held that such obligations is an innominate
quasi-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 in the court below is based on a contract, express or implied and is therefore
of such nature that the court had authority to issue writ of attachment. The application
for the writ ofcertiorari must therefore be denied and the proceedings dismissed. So
ordered.
Arellano, C.J., Torres, Johnson and Carson, JJ., concur.

Separate Opinions
MALCOLM, J., concurring:
As I finished reading the learned and interesting decision of the majority, the
impression which remained was that the court was enticed by the nice and unusual
points presented to make a hard case out of an easy one and unfortunately t do violence
to the principles of certiorari. The simple questions are : Di the Court of First Instance
of city of Manila exceed its jurisdiction in granting an attachments against the property
of the defendant, now plaintiff? Has this defendant, now become the 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 the
following:
It has been repeatedly held by this court that a writ of certiorari will not be
issued unless it clearly 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 erroneous conclusions of law or of fact. If the court has
jurisdiction. It will not be issued to cure errors in the proceedings to correct
jurisdiction of the subject matter and f the person, decisions upon all question
pertaining to the cause are decisions within its jurisdiction and, however
irregular or erroneous they may be, cannot be corrected bycertiorari. The Code of
Civil Procedure giving Courts of First Instance general jurisdiction in actions
for mandamus, it goes without saying that the Court of First Instance had
jurisdiction in the present case to resolve every question arising in such an action
and t decide every question presented to it which pertained to the cause. It has
already been held by this court, that while it is a power to be exercised only in
extreme case, a Court of First Instance has power to issue a mandatory injunction
t stand until the final determination of the action in which it is issued. While the
issuance of the mandatory injunction in this particular case may have been
irregular and erroneous, a question concerning which we express no opinion,
nevertheless its issuance was within the jurisdiction of the court and its action is

not reveiwable oncertiorari. It is not sufficient to say that it was issued

wrongfully and without sufficient grounds and in the absence 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 t issue the license, for the reason that he was not the proper
person to issue it and that, if he was 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 of the court to act. One of
the fundamental question in a mandamus against a public officer is whether or
not that officer has the right to exercise discretion in the performance of the act
which 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 a novel proposition. It is equivalent to the contention
that a court has jurisdiction if he decides right but no jurisdiction if he decides
wrong. It may be stated generally that it is never necessary to decide the
fundamental questions of a cause to determine whether the court has
jurisdiction. The question of jurisdiction is preliminary and never touches the
merits of the case. The determination of the fundamental questions of a cause are
merely the exercise of 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 formandamus and to decide 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 evident contradiction.
Jurisdiction is the authority to hear and determine a cause the right to act in a
case. Since it is the power to hear and determine, it does not depend either upon
the regularity of the exercise of that power or upon the rightfulness of the
decision made. Jurisdiction should therefore be distinguished from the exercise
of jurisdiction. The authority to decide a case at all, and not the decision rendered
therein, is what makes up jurisdiction. Where there is jurisdiction of the person
and subject matter, as we have said before, the decision of all other questions
arising in the case an exercise of that jurisdiction.
Then follows an elaborate citation and discussion of American authorities, including a
decision of the United 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 are applicable only to the class of cases with which the decision deal
and do not in any way militate against the general proposition herein asserted.

Those which relate to election contest are based upon the principle that those
proceedings, are special in their nature and must be strictly followed, a material
departure from the statute resulting a loss, or in an excess of jurisdiction. The
cases relating to receivers are based, in a measure, upon the principle the
appointment of a receiver being governed by the statute; and in part upon the
theory that the appointment of a receiver in an improper case is in substance a
bankruptcy proceeding, the taking of which is expressly prohibited by law. The
case relative to the allowance of alimony pendente lite when the answer denies
the marriage is more difficult to distinguish. The reasons in support of the
doctrine laid down in that case are given the opinion in full and they seem to
place the particular case to which they refer in a class by itself.
It is not alight things that the lawmakers have abolished writs of error and with
them certiorari and prohibition, in so far as they were methods by which the
mere errors of an inferior curt could be corrected. As instruments to that end they
no longer exist. Their place is no taken by the appeal. So long as the inferior court
retains jurisdiction its errors can be corrected only by that method. The office of
the writ of certiorari has been reduced to the correction of defects
of jurisdiction solely and cannot legally be used for any other purpose. It is truly
an extra ordinary remedy and in this jurisdiction, its use is restricted to truly
extraordinary cases cases in which the action of the inferior court is wholly
void, where any further steps in the case would result in a waste of time and
money and would produce no result whatever; where the parties, or their privies,
would be utterly deceived; where a final judgment or decree would be nought but
a snare and a delusion, deciding nothing, protecting nobody, a juridical
pretension, a recorded falsehood, a standing menace. It is only to avoid such
result as these that a writ of certiorari is issuable; and even here an appeal will lie
if the aggrieved party prefers to prosecute it.
A full and thorough examination of all the decided cases in this court touching
the question of certiorari and prohibition fully supports the proposition already
stated that, where a Court of First Instance has jurisdiction of the subject
matter and of the person, its decision of any question pertaining to the cause,
however, erroneous, cannot be reviewed by certiorari, but must be corrected by
appeal.
I see no reason to override the decision in Herrera vs. Barretto and Joaquin (supra).
Accordingly, I can do no better than to make the language of Justice Moreland my own.
applying these principles, it is self-evident that this court should no entertain the
present petition and should not grant the desired relief.

FISHER, J., dissenting:

I am in full accord with the view that the remedy of certiorari may be invoked in such
cases as this, but I am constrained to dissent from the opinion of the majority as regards
the meaning of the term implied contract.
Section 412 of the code of Civil Procedure in connection with section 424, authorizes the
preliminary attachment of the property of the defendant: "(1) In an action for the
recovery of money or damages on a cause of action arising upon contract, express or
implied, when the defendant is about to depart from the Philippine Islands, with intent
to defraud his creditors; (2) . . .; (3) . . .; (4) . . .; (5) When the defendant has removed or
disposed of his property, or is about to do so, with intent to defraud his creditors."
It is evident that the terms of paragraph five of the article cited are much broader than
those of the first paragraph. The fifth paragraph is not limited to action arising from
contract, but is by its terms applicable to actions brought for the purpose of enforcing
extra-contractual rights as well as contract rights. The limitation upon cases falling
under paragraph five is to be found, not in the character of the obligation for the
enforcement for which the action is brought, but in the terms of article 4265, which
requires that the affidavit show that the amount due the plaintiff . . . is as much as the
sum for which the order is granted.
That is to say, when application is made for a preliminary attachment upon the ground
that the plaintiff is about to dispose of his property with intent to defraud his creditors
thus bringing the case within the terms of paragraph five of the section it is not
necessary to show that the obligation in suit is contractual in its origin, but is sufficient
to show that the breach of the obligation, as shown by the facts stated in the complaint
and affidavit, imposes upon the defendant the obligation to pay a specific and definite
sum. For example, if it is alleged in the complaint that the defendant by negligence, has
caused the destruction by fire of a building belonging to plaintiff, and that such building
was worth a certain sum of money, these facts would show a definite basis upon which
to authorize the granting of the writ. But if it were averred that the defendant has
published a libel concerning the plaintiff, to the injury of his feeling and reputation,
there is no definite basis upon which to grant an attachment, because the amount of the
damage suffered, being necessarily uncertain and indeterminate, cannot be ascertained
definitely until the trail has been completed.
But it appears that the legislature although it has seen fit to authorize a preliminary
attachment in aid of action of all kinds when the defendant is concealing his property
with intent to defraud his creditors, has provided is about to depart from the country

with intent to defraud his creditos, the writ will issue only when the action in aid of
which it is sought arises from a contract express or implied. If an attachment were
permitted upon facts bringing the application with the first paragraph of the section in
support of action of any kind, whether the obligation sued upon is contractual or not,
then paragraph five would by construction be made absolutely identical with paragraph
one, and this would be in effect equivalent to the complete eliminated of the last two
lines of the first paragraph. It is a rule of statutory construction that effect should be
given to all parts of the statue, if possible. I can see no reason why the legislature should
have limited cases falling within the firs paragraph to action arising from contract and
have refrained from imposing this limitation with respect to cases falling within the
terms of the fifth paragraph, but this should have no effect upon us in applyingthe law.
Whether there be a good reason for it or not the distinction exists.
Had the phrase express or implied not been used to qualify contract, there would be no
doubt whatever with regard to the meaning of the word. In the Spanish Civil law
contract are always consensual, and it would be impossible to define as a contract the
judicial relation existing between a person who has lost money at gaming and the
winner of such money, simple because the law imposes upon the winner the obligation
of making restitution. An obligation of this kind, far from being consensual in its origin,
arises against the will of the debtor. To call such a relation a contract is, from the
standpoint of the civil law, a contradiction in terms.
But is said that as the phase express or implied has been used to qualify the word
contract and these words are found in statue which speaks the language of the common
law, this implies the introduction into our law of the concept of the implied contract of
the English common-law, a concept which embraces a certain class of obligation
originating ex lege, which have been arbitrarily classified as contracts, so that they
might be enforced by one of the formal actions of the common law which legal tradition
and practice has reserved for the enforcement of contract. I cannot concur in this
reasoning. I believe that when a technical juridical term of substantive law is used in the
adjective law of these islands, we should seek its meaning in our own substantive law
rather than in the law of America or of England. The code of Civil Procedure was not
enacted to establish rules of substantive law, but upon the assumption of the existence
of these rules.
In the case of Cayce vs. Curtis (Dallam's Decisions Texas Reports, 403), it appears that
the legislature, at a time when that State still retained to a large extent the Spanish
substantive civil law, enacted a statue in which the word bonds is used. In litigation
involving the construction of that statute, one of the parties contended that the work
bond should be given the technical meaning which it had in the English Common Law.
The court rejected this contention saying

On the first point it is urged by counsel for the appellant that the word bond used in the
statute being a common law term, we must refer to the common law for its legal
signification; and that by that law no instrument is a bond which is not under seal. The
truth of the proposition that sealing is an absolute requisite to the validity of a bond at
common law is readily admitted; but the applicability of that rule of the case under
consideration is not perceived. This bond was taken at a time when the common law
afforded no rule of decision or practice in this country, and consequently that law
cannot be legitimately resorted to, even for the purpose for which it is invoked by the
counsel for the appellant, unless it be shown that the civil law had not term of similar
import for we regard it as a correct rule of construction, that where technical terms are
used in a statute they are to be referred for their signification to terms f similar import
in the system of laws which prevails in the country where the statues is passed, and not
to another system which is entirely foreign t the whole system of municipal regulations
by which that country is governed. (Martin's Reports, vol. 3, 185; 7 Martin [N. S.], 162.)"
Consequently, I believe that in the interpretation of phase "contract, express or
implied," we should apply the rules of our own substantive law. The phrase in itself
offers no difficulty. The concept of the contract, under the Civil Code, as a legal relation
of exclusively consensual origin, offers no difficulty. Nor is any difficulty encountered in
the gramatical sense of the words express and "implied". Express according to the New
International Dictionary is that which is directly and distinctly stated; expressed, not
merely implied or left to interference. Therefore, a contract entered into by means of
letters, in which the offer and the acceptance have been manifested by appropriate
words, would be an "express contract." The word "imply" according to the same
dictionary, is to involve in substance or essence, or by fair inference, or by construction
of law, when not expressly stated in words or signs; to contain by implication to include
virtually.
Therefore, if I enter a tailor shop and order a suit of clothes, although nothing is said
regarding payment, it is an inference, both logical and legal, from my act that is my
intention to pay the reasonable value of the garments. The contract is implied, therefore,
is that in which theconsent of the parties is implied.
Manresa, commenting upon article 1262 of the Civil Code, says:
The essence of consent is the agreement of the parties concerning that which is to
constitute the contract . . . . The forms of this agreement may vary according to
whether it is expressed verbally or in writing, by words or by acts. Leaving the
other differences for consideration hereafter, we will only refer now to those
which exist between express consent and implied consent . . . . It is

unquestionable that implied consent manifested by act or conduct, produces a

contract. . . .
If it were necessary to have recourse to the English common law for the purpose of
ascertaining the meaning of the phrase under consideration, we could find many
decisions which gave it the same meaning as that for which I contend.
An implied contract is where one party receives benefits from another party,
under such circumstances that the law presume a promise on the part of the party
benefited to pay a reasonable price for the same. (Jones vs. Tucker [Del.], 84
Atlantic, 1012.)
It is true that English courts have extended the concept of the term contract to include
certain obligations arising ex lege without consent, express or implied. True contracts
created by implied consent are designated in the English common law as contracts
implied in the fact, while the so-called contracts in which the consent is a fiction of law
are called contracts implied by law. But is evident that the latter are not real contracts.
They have been called contract arbitrarily by the courts of England, and those of the
Untied States in which the English common law is in force, in order that certain actions
arising ex lege may be enforced by the action of assumpsit. In the rigid formulism of the
English common law the substantive right had to be accommodated to the form of
action. As is stated in the monograph on the action of assumpsit in Ruling Case Law.
(volume 2, 743)
In theory it wan action to recover for the nonperformance f simple contracts, and
the formula and proceedings were constructed and carried on accordingly. . . .
From the reign of Elizabeth this action has been extended to almost every case
where an obligation arises from natural reason, . . . and it is now maintained in
many cases which its principles do not comprehend and where fictions and
intendments are resorted to, to fit the actual cause of action to the theory of the
remedy. It is thus sanctioned where there has been no . . . real contract, but where
some duty is deemed sufficient to justify the court in imputing the promise to
perform its, and hence in bending the transaction to the form of action.
In the ancient English common law procedure the form of the action was regarded as
being much more important than the substantive right to be enforced. If no form of
action was found in which the facts would fit, so much the worse for the facts! to avoid
the injustices to which this condition of affairs gave rise, the judges invented those
fictions which permitted them to preserve the appearance of conservatism and change
the law without expressly admitting that they were doing so. The indispensable
averment, that they were doing so. The indispensable avernment without which the
action of assumpsit would not lie, was that the defendant promised to pay plaintiff the

amount demanded. (Sector vs. Holmes, 17 Vs., 566.) In true contracts, whether express
or implied, this promise in fact exists. In obligations arising ex lege there is no such
promise, and therefore the action of assumpsit could not be maintained, and therefore
the action of assumpsit could not be maintained, although by reason of its relative
simplicity it was one of the most favored forms of action. In order to permit the litigant
to make use of this form of action for the enforcement of ascertain classes of obligations
arising ex lege, the judges invented the fiction of the promise of the defendant to pay the
amount of the obligation, and as this fictitious promise give the appearance of
consensuality to the legal relations of the parties, the name of implied contract is given
to that class of extra-contractual obligations enforcible by the action of assumpsit.
Now, it is not be supposed that it was the intention of the Legislature in making use in
the first paragraph of article 412 of the phrase contract, express or implied to corrupt
the logical simplicity of our concept of obligations by importing into our law the
antiquated fictions of the mediaeval English common law. If one of the concepts of the
term "implied contract" in the English common law, namely, that in whichconsent is
presume from the conduct of the debtor, harmonizes with the concept of the contract in
our law, why should we reject that meaning and hold that the Legislature intended to
use this phrase in the foreign and illogical sense of a contract arising without consent?
This is a civil law country. why should we be compelled to study the fictions of the
ancient English common law, in order to be informed as to the meaning of the word
contract in the law of the Philippine Islands? Much more reasonable to my mind was the
conclusion of the Texas court, under similar circumstances, to the effect to be referred
for their signification to terms of similar import in the system of laws which prevails in
the country where the statue is passed." (Cayce vs. Curtis, supra.)
My conclusion is that the phase contract, express or implied should be interpreted in the
grammatical sense of the words and limited to true contracts, consensual obligations
arising from consent, whether expressed in words, writing or signs, or presumed from
conduct. As it is evident that the defendant in the present case never promised, him in
the gambling game in question, his obligation to restor the amounts won, imposed by
the law, is no contractual, but purely extra-contractual and therefore the action brought
not being one arising upon contract express or implied, the plaintiff is not entitled to a
preliminary attachment upon the averment that the defendant is about to depart from
the Philippine Islands with with intent t defraud his creditors, no averment being made
in the compliant or in the affidavit that the defendant has removed or disposed of his
property, or is about to depart with intent to defraud his creditors, so as to bring the
case within the terms of the fifth paragraph of section 412.
I am unable to agree with the contention of the application (Brief, p. 39) here that the
phase in question should be interpreted in such a way as to include all obligations,

whether arising from consent or ex lege, because that is equivalent to eliminating all
distinction between the first and the fifth paragraphs by practically striking out the first
two lines of paragraph one. The Legislature has deliberately established this distinction,
and while we may be unable to see any reason why it should have been made, it is our
duty to apply and interpret the law, and we are not authorized under the guise of
interpretation to virtually repeal part of the statute.
Nor can it be said that the relations between the parties litigant constitute a quasicontract. In the first place, quasi- contracts are "lawful and purely voluntary acts by
which the authors thereof become obligated in favor of a third person. . . ." The act
which gave rise to the obligation ex lege relied upon by the plaintiff in the court below
is illicit an unlawful gambling game. In the second place, the first paragraph of section
412 of the Code of Civil Procedure does not authorize an attachment in actions arising
out of quasi contracts, but only in actions arising out of contract, express or implied.
I am therefore of the opinion that the court below was without jurisdiction to issue that
writ of attachment and that the writ should be declared null and void.
Avancea, J., concurs.

People's Car Inc. vs. Commando

Security Service Agency
Republic of the Philippines
SUPREME COURT
Manila
EN BANC

G.R. No. L-36840 May 22, 1973

PEOPLE'S
CAR
INC., plaintiff-appellant,
vs.
COMMANDO SECURITY SERVICE AGENCY, defendant-appellee.

TEEHANKEE, J.:

In this appeal from the adverse judgment of the Davao court of first instance limiting
plaintiff-appellant's recovery under its complaint to the sum of P1,000.00 instead of the
actual damages of P8,489.10 claimed and suffered by it as a direct result of the wrongful
acts of defendant security agency's guard assigned at plaintiff's premises in pursuance of
their "Guard Service Contract", the Court finds merit in the appeal and accordingly
reverses the trial court's judgment.
The appeal was certified to this Court by a special division of the Court of Appeals on a
four-to-one vote as per its resolution of April 14, 1973 that "Since the case was submitted
to the court a quo for decision on the strength of the stipulation of facts, only questions
of law can be involved in the present appeal."
The Court has accepted such certification and docketed this appeal on the strength of its
own finding from the records that plaintiff's notice of appeal was expressly to this Court
(not to the appellate court)" on pure questions of law" 1and its record on appeal
accordingly prayed that" the corresponding records be certified and forwarded to the
Honorable Supreme Court." 2The trial court so approved the same 3on July 3, 1971
instead of having required the filing of a petition for review of the judgment sought to be
appealed from directly with this Court, in accordance with the provisions of Republic
Act 5440. By some unexplained and hitherto undiscovered error of the clerk of court,
furthermore, the record on appeal was erroneously forwarded to the appellate court
rather than to this Court.
The parties submitted the case for judgment on a stipulation of facts. There is thus no
dispute as to the factual bases of plaintiff's complaint for recovery of actual damages
against defendant, to wit, that under the subsisting "Guard Service Contract" between
the parties, defendant-appellee as a duly licensed security service agency undertook in
consideration of the payments made by plaintiff to safeguard and protect the business
premises of (plaintiff) from theft, pilferage, robbery, vandalism and all other unlawful
acts of any person or person prejudicial to the interest of (plaintiff)." 4
On April 5, 1970 at around 1:00 A.M., however, defendant's security guard on duty at
plaintiff's premises, "without any authority, consent, approval, knowledge or orders of
the plaintiff and/or defendant brought out of the compound of the plaintiff a car
belonging to its customer, and drove said car for a place or places unknown, abandoning
his post as such security guard on duty inside the plaintiff's compound, and while so
driving said car in one of the City streets lost control of said car, causing the same to fall
into a ditch along J.P. Laurel St., Davao City by reason of which the plaintiff's complaint
for qualified theft against said driver, was blottered in the office of the Davao City Police
Department."5

As a result of these wrongful acts of defendant's security guard, the car of plaintiff's
customer, Joseph Luy, which had been left with plaintiff for servicing and maintenance,
"suffered extensive damage in the total amount of P7,079." 6besides the car rental value
"chargeable to defendant" in the sum of P1,410.00 for a car that plaintiff had to rent and
make available to its said customer to enable him to pursue his business and occupation
for the period of forty-seven (47) days (from April 25 to June 10, 1970) that it took
plaintiff to repair the damaged car, 7or total actual damages incurred by plaintiff in the
sum of P8,489.10.
Plaintiff claimed that defendant was liable for the entire amount under paragraph 5 of
their contract whereunder defendant assumed "sole responsibility for the acts done
during their watch hours" by its guards, whereas defendant contended, without
questioning the amount of the actual damages incurred by plaintiff, that its liability
"shall not exceed one thousand (P1,000.00) pesos per guard post" under paragraph 4 of
their contract.
The parties thus likewise stipulated on this sole issue submitted by them for
adjudication, as follows:
Interpretation of the contract, as to the extent of the liability of the
defendant to the plaintiff by reason of the acts of the employees of the
defendant is the only issue to be resolved.
The defendant relies on Par. 4 of the contract to support its contention
while the plaintiff relies on Par. 5 of the same contract in support of its
claims against the defendant. For ready reference they are quoted
hereunder:
'Par. 4. Party of the Second Part (defendant) through the
negligence of its guards, after an investigation has been
conducted by the Party of the First Part (plaintiff) wherein
the Party of the Second Part has been duly represented shall
assume full responsibilities for any loss or damages that may
occur to any property of the Party of the First Part for which
it is accountable, during the watch hours of the Party of the
Second Part, provided the same is reported to the Party of
the Second Part within twenty-four (24) hours of the
occurrence, except where such loss or damage is due to force
majeure, provided however that after the proper
investigation to be made thereof that the guard on post is
found negligent and that the amount of the loss shall not

exceed ONE THOUSAND (P1,000.00) PESOS per guard

post.'
'Par. 5 The party of the Second Part assumes the
responsibility for the proper performance by the guards
employed, of their duties and (shall) be solely responsible for
the acts done during their watch hours, the Party of the First
Part being specifically released from any and all liabilities to
the former's employee or to the third parties arising from the
acts or omissions done by the guard during their tour of
duty.' ... 8
The trial court, misreading the above-quoted contractual provisions, held that "the
liability of the defendant in favor of the plaintiff falls under paragraph 4 of the Guard
Service Contract" and rendered judgment "finding the defendant liable to the plaintiff in
the amount of P1,000.00 with costs."
Hence, this appeal, which, as already indicated, is meritorious and must be granted.
Paragraph 4 of the contract, which limits defendant's liability for the amount of loss or
damage to any property of plaintiff to "P1,000.00 per guard post," is by its own terms
applicable only for loss or damage 'through the negligence of its guards ... during the
watch hours" provided that the same is duly reported by plaintiff within 24 hours of the
occurrence and the guard's negligence is verified after proper investigation with the
attendance of both contracting parties. Said paragraph is manifestly inapplicable to the
stipulated facts of record, which involve neither property of plaintiff that has been lost
or damaged at its premises nor mere negligence of defendant's security guard on duty.
Here, instead of defendant, through its assigned security guards, complying with its
contractual undertaking 'to safeguard and protect the business premises of (plaintiff)
from theft, robbery, vandalism and all other unlawful acts of any person or persons,"
defendant's own guard on duty unlawfully and wrongfully drove out of plaintiffs
premises a customer's car, lost control of it on the highway causing it to fall into a ditch,
thereby directly causing plaintiff to incur actual damages in the total amount of
P8,489.10.
Defendant is therefore undoubtedly liable to indemnify plaintiff for the entire damages
thus incurred, since under paragraph 5 of their contract it "assumed the responsibility
for the proper performance by the guards employed of their duties and (contracted to)
be solely responsible for the acts done during their watch hours" and "specifically
released (plaintiff) from any and all liabilities ... to the third parties arising from the acts
or omissions done by the guards during their tour of duty." As plaintiff had duly

discharged its liability to the third party, its customer, Joseph Luy, for the undisputed
damages of P8,489.10 caused said customer, due to the wanton and unlawful act of
defendant's guard, defendant in turn was clearly liable under the terms of paragraph 5
of their contract to indemnify plaintiff in the same amount.
The trial court's approach that "had plaintiff understood the liability of the defendant to
fall under paragraph 5, it should have told Joseph Luy, owner of the car, that under the
Guard Service Contract, it was not liable for the damage but the defendant and had Luy
insisted on the liability of the plaintiff, the latter should have challenged him to bring
the matter to court. If Luy accepted the challenge and instituted an action against the
plaintiff, it should have filed a third-party complaint against the Commando Security
Service Agency. But if Luy instituted the action against the plaintiff and the defendant,
the plaintiff should have filed a crossclaim against the latter," 9was unduly technical and
unrealistic and untenable.
Plaintiff was in law liable to its customer for the damages caused the customer's car,
which had been entrusted into its custody. Plaintiff therefore was in law justified in
making good such damages and relying in turn on defendant to honor its contract and
indemnify it for such undisputed damages, which had been caused directly by the
unlawful and wrongful acts of defendant's security guard in breach of their contract. As
ordained in Article 1159, Civil Code, "obligations arising from contracts have the force of
law between the contracting parties and should be complied with in good faith."
Plaintiff in law could not tell its customer, as per the trial court's view, that "under the
Guard Service Contract it was not liable for the damage but the defendant" since the
customer could not hold defendant to account for the damages as he had no privity of
contract with defendant. Such an approach of telling the adverse party to go to court,
notwithstanding his plainly valid claim, aside from its ethical deficiency among others,
could hardly create any goodwill for plaintiff's business, in the same way that
defendant's baseless attempt to evade fully discharging its contractual liability to
plaintiff cannot be expected to have brought it more business. Worse, the administration
of justice is prejudiced, since the court dockets are unduly burdened with unnecessary
litigation.
ACCORDINGLY, the judgment appealed from is hereby reversed and judgment is
hereby rendered sentencing defendant-appellee to pay plaintiff-appellant the sum of
P8,489.10 as and by way of reimbursement of the stipulated actual damages and
expenses, as well as the costs of suit in both instances. It is so ordered.
Makalintal, Zaldivar, Castro, Fernando, Barredo, Makasiar, Antonio and Esguerra,
JJ., concur.

Footnotes
1 Rec. on appeal, p. 39.
2 Idem, pp. 40-41.
3 Idem, p. 42.
4 Annex A, complaint, Rec. on app., pp. 8-13.
5 Par. 1. Stipulation of Facts, Rec. on app., p. 24.
6 Par. 2, idem.
7 Par. 3, idem.
8 Rec. on app., pp. 26-27; notes in emphasis supplied.
9 Decision, Rec. on App, pp. 29-30.

Luis Pichel vs. Prudencio Alonzo

Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. L-36902 January 30, 1982
LUIS
vs.
PRUDENCIO ALONZO, respondent.

GUERRERO, J.:

PICHEL, petitioner,

This is a petition to review on certiorari the decision of the Court of First Instance of
Basilan City dated January 5, 1973 in Civil Case No. 820 entitled "Prudencio Alonzo,
plaintiff, vs. Luis Pichel, defendant."
This case originated in the lower Court as an action for the annulment of a "Deed of
Sale" dated August 14, 1968 and executed by Prudencio Alonzo, as vendor, in favor of
Luis Pichel, as vendee, involving property awarded to the former by the Philippine
Government under Republic Act No. 477. Pertinent portions of the document sued upon
read as follows:
That the VENDOR for and in consideration of the sum of FOUR
THOUSAND TWO HUNDRED PESOS (P4,200.00), Philippine Currency,
in hand paid by the VENDEE to the entire satisfaction of the VENDOR,
the VENDOR hereby sells transfers, and conveys, by way of absolute sale,
all the coconut fruits of his coconut land, designated as Lot No. 21 Subdivision Plan No. Psd- 32465, situated at Balactasan Plantation,
Lamitan, Basilan City, Philippines;
That for the herein sale of the coconut fruits are for all the fruits on the
aforementioned parcel of land presently found therein as well as for future
fruits to be produced on the said parcel of land during the years period;
which shag commence to run as of SEPTEMBER 15,1968; up to JANUARY
1, 1976 (sic);
That the delivery of the subject matter of the Deed of Sale shall be from
time to time and at the expense of the VENDEE who shall do the
harvesting and gathering of the fruits;
That the Vendor's right, title, interest and participation herein conveyed is
of his own exclusive and absolute property, free from any liens and
encumbrances and he warrants to the Vendee good title thereto and to
defend the same against any and all claims of all persons whomsoever. 1
After the pre-trial conference, the Court a quo issued an Order dated November 9, 1972
which in part read thus:
The following facts are admitted by the parties:
Plaintiff Prudencio Alonzo was awarded by the Government that parcel of
land designated as Lot No. 21 of Subdivision Plan Psd 32465 of Balactasan,
Lamitan, Basilan City in accordance with Republic Act No. 477. The award
was cancelled by the Board of Liquidators on January 27, 1965 on the
ground that, previous thereto, plaintiff was proved to have alienated the
land to another, in violation of law. In 197 2, plaintiff's rights to the land
were reinstated.
On August 14, 1968, plaintiff and his wife sold to defendant an the fruits of
the coconut trees which may be harvested in the land in question for the

period, September 15, 1968 to January 1, 1976, in consideration of

P4,200.00. Even as of the date of sale, however, the land was still under
lease to one, Ramon Sua, and it was the agreement that part of the
consideration of the sale, in the sum of P3,650.00, was to be paid by
defendant directly to Ramon Sua so as to release the land from the
clutches of the latter. Pending said payment plaintiff refused to snow the
defendant to make any harvest.
In July 1972, defendant for the first time since the execution of the deed of
sale in his favor, caused the harvest of the fruit of the coconut trees in the
land.
xxx xxx xxx
Considering the foregoing, two issues appear posed by the complaint and
the answer which must needs be tested in the crucible of a trial on the
merits, and they are:
First. Whether or nor defendant actually paid to plaintiff the full sum of
P4,200.00 upon execution of the deed of sale.
Second. Is the deed of sale, Exhibit 'A', the prohibited encumbrance
contemplated in Section 8 of Republic Act No. 477? 2
Anent the first issue, counsel for plaintiff Alonzo subsequently 'stipulated and agreed
that his client ... admits fun payment thereof by defendant. 3 The remaining issue being
one of law, the Court below considered the case submitted for summary judgment on
the basis of the pleadings of the parties, and the admission of facts and documentary
evidence presented at the pre-trial conference.
The lower court rendered its decision now under review, holding that although the
agreement in question is denominated by the parties as a deed of sale of fruits of the
coconut trees found in the vendor's land, it actually is, for all legal intents and purposes,
a contract of lease of the land itself. According to the Court:
... the sale aforestated has given defendant complete control and
enjoyment of the improvements of the land. That the contract is
consensual; that its purpose is to allow the enjoyment or use of a thing;
that it is onerous because rent or price certain is stipulated; and that the
enjoyment or use of the thing certain is stipulated to be for a certain and
definite period of time, are characteristics which admit of no other
conclusion. ... The provisions of the contract itself and its characteristics
govern its nature. 4
The Court, therefore, concluded that the deed of sale in question is an encumbrance
prohibited by Republic Act No. 477 which provides thus:

Sec. 8. Except in favor of the Government or any of its branches, units, or

institutions, land acquired under the provisions of this Act or any
permanent improvements thereon shall not be thereon and for a term of
ten years from and after the date of issuance of the certificate of title, nor
shall they become liable to the satisfaction of any debt contracted prior to
the expiration of such period.
Any occupant or applicant of lands under this Act who transfers whatever
rights he has acquired on said lands and/or on the improvements thereon
before the date of the award or signature of the contract of sale, shall not
be entitled to apply for another piece of agricultural land or urban,
homesite or residential lot, as the case may be, from the National Abaca
and Other Fibers Corporation; and such transfer shall be considered null
and void. 5
The dispositive portion of the lower Court's decision states:
WHEREFORE, it is the judgment of this Court that the deed of sale,
Exhibit 'A', should be, as it is, hereby declared nun and void; that plaintiff
be, as he is, ordered to pay back to defendant the consideration of the sale
in the sum of P4,200.00 the same to bear legal interest from the date of
the filing of the complaint until paid; that defendant shall pay to the
plaintiff the sum of P500.00 as attorney's fees.
Costs against the defendant. 6
Before going into the issues raised by the instant Petition, the matter of whether, under
the admitted facts of this case, the respondent had the right or authority to execute the
"Deed of Sale" in 1968, his award over Lot No. 21 having been cancelled previously by
the Board of Liquidators on January 27, 1965, must be clarified. The case in point is Ras
vs. Sua 7wherein it was categorically stated by this Court that a cancellation of an award
granted pursuant to the provisions of Republic Act No. 477 does not automatically divest
the awardee of his rights to the land. Such cancellation does not result in the immediate
reversion of the property subject of the award, to the State. Speaking through Mr.
Justice J.B.L. Reyes, this Court ruled that "until and unless an appropriate proceeding
for reversion is instituted by the State, and its reacquisition of the ownership and
possession of the land decreed by a competent court, the grantee cannot be said to have
been divested of whatever right that he may have over the same property." 8
There is nothing in the record to show that at any time after the supposed cancellation
of herein respondent's award on January 27, 1965, reversion proceedings against Lot
No. 21 were instituted by the State. Instead, the admitted fact is that the award was
reinstated in 1972. Applying the doctrine announced in the above-cited Ras case,
therefore, herein respondent is not deemed to have lost any of his rights as grantee of
Lot No. 21 under Republic Act No. 477 during the period material to the case at bar, i.e.,
from the cancellation of the award in 1965 to its reinstatement in 1972. Within said
period, respondent could exercise all the rights pertaining to a grantee with respect to
Lot No. 21.

This brings Us to the issues raised by the instant Petition. In his Brief, petitioner
contends that the lower Court erred:
1. In resorting to construction and interpretation of the deed of sale in
question where the terms thereof are clear and unambiguous and leave no
doubt as to the intention of the parties;
2. In declaring granting without admitting that an interpretation is
necessary the deed of sale in question to be a contract of lease over the
land itself where the respondent himself waived and abandoned his claim
that said deed did not express the true agreement of the parties, and on
the contrary, respondent admitted at the pre-trial that his agreement with
petitioner was one of sale of the fruits of the coconut trees on the land;
3. In deciding a question which was not in issue when it declared the deed
of sale in question to be a contract of lease over Lot 21;
4. In declaring furthermore the deed of sale in question to be a contract of
lease over the land itself on the basis of facts which were not proved in
evidence;
5. In not holding that the deed of sale, Exhibit "A" and "2", expresses a
valid contract of sale;
6. In not deciding squarely and to the point the issue as to whether or not
the deed of sale in question is an encumbrance on the land and its
improvements prohibited by Section 8 of Republic Act 477; and
7. In awarding respondent attorney's fees even granting, without
admitting, that the deed of sale in question is violative of Section 8 of
Republic Act 477.
The first five assigned errors are interrelated, hence, We shall consider them together.
To begin with, We agree with petitioner that construction or interpretation of the
document in question is not called for. A perusal of the deed fails to disclose any
ambiguity or obscurity in its provisions, nor is there doubt as to the real intention of the
contracting parties. The terms of the agreement are clear and unequivocal, hence the
literal and plain meaning thereof should be observed. Such is the mandate of the Civil
Code of the Philippines which provides that:
Art. 1370. If the terms of a contract are clear and leave no doubt upon the
intention of the contracting parties, the literal meaning of its stipulation
shall control ... .
Pursuant to the afore-quoted legal provision, the first and fundamental duty of the
courts is the application of the contract according to its express terms, interpretation
being resorted to only when such literal application is impossible. 9

Simply and directly stated, the "Deed of Sale dated August 14, 1968 is precisely what it
purports to be. It is a document evidencing the agreement of herein parties for
the sale of coconut fruits of Lot No. 21, and not for the lease of the land itself as found by
the lower Court. In clear and express terms, the document defines the object of the
contract thus: "the herein sale of the coconut fruits are for an the fruits on the
aforementioned parcel of land during the years ...(from) SEPTEMBER 15, 1968; up to
JANUARY 1, 1976." Moreover, as petitioner correctly asserts, the document in question
expresses a valid contract of sale. It has the essential elements of a contract of sale as
defined under Article 1485 of the New Civil Code which provides thus:
Art. 1458. By the contract of sale one of the contracting parties obligates
himself to transfer the ownership of and to deliver a determinate thing,
and the other to pay therefor a price certain in money or its equivalent.
A contract of sale may be absolute or conditional.
The subject matter of the contract of sale in question are the fruits of the coconut trees
on the land during the years from September 15, 1968 up to January 1, 1976, which
subject matter is a determinate thing. Under Article 1461 of the New Civil Code, things
having a potential existence may be the object of the contract of sale. And in Sibal vs.
Valdez, 50 Phil. 512, pending crops which have potential existence may be the subject
matter of the sale. Here, the Supreme Court, citing Mechem on Sales and American
cases said which have potential existence may be the subject matter of sale. Here, the
Supreme Court, citing Mechem on Sales and American cases said:
Mr. Mechem says that a valid sale may be made of a thing, which though
not yet actually in existence, is reasonably certain to come into existence as
the natural increment or usual incident of something already in existence,
and then belonging to the vendor, and the title will vest in the buyer the
moment the thing comes into existence. (Emerson vs. European Railway
Co., 67 Me., 387; Cutting vs. Packers Exchange, 21 Am. St. Rep. 63) Things
of this nature are said to have a potential existence. A man may sell
property of which he is potentially and not actually possess. He may make
a valid sale of the wine that a vineyard is expected to produce; or the grain
a field may grow in a given time; or the milk a cow may yield during the
coming year; or the wool that shall thereafter grow upon sheep; or what
may be taken at the next case of a fisherman's net; or fruits to grow; or
young animals not yet in existence; or the goodwill of a trade and the like.
The thing sold, however, must be specific and Identified. They must be
also owned at the time by the vendor. (Hull vs. Hull 48 Conn. 250 (40 Am.
Rep., 165) (pp. 522-523).
We do not agree with the trial court that the contract executed by and between the
parties is "actually a contract of lease of the land and the coconut trees there." (CFI
Decision, p. 62, Records). The Court's holding that the contract in question fits the
definition of a lease of things wherein one of the parties binds himself to give to another
the enjoyment or use of a thing for a price certain and for a period which may be definite
or indefinite (Art. 1643, Civil Code of the Philippines) is erroneous. The essential

difference between a contract of sale and a lease of things is that the delivery of the thing
sold transfers ownership, while in lease no such transfer of ownership results as the
rights of the lessee are limited to the use and enjoyment of the thing leased.
In Rodriguez vs. Borromeo, 43 Phil. 479, 490, the Supreme Court held:
Since according to article 1543 of the same Code the contract of lease is
defined as the giving or the concession of the enjoyment or use of a thing
for a specified time and fixed price, and since such contract is a form of
enjoyment of the property, it is evident that it must be regarded as one of
the means of enjoyment referred to in said article 398, inasmuch as the
terms enjoyment, use, and benefit involve the same and analogous
meaning relative to the general utility of which a given thing is capable.
(104 Jurisprudencia Civil, 443)
In concluding that the possession and enjoyment of the coconut trees can therefore be
said to be the possession and enjoyment of the land itself because the defendant-lessee
in order to enjoy his right under the contract, he actually takes possession of the land, at
least during harvest time, gather all of the fruits of the coconut trees in the land, and
gain exclusive use thereof without the interference or intervention of the plaintiff-lessor
such that said plaintiff-lessor is excluded in fact from the land during the period
aforesaid, the trial court erred. The contract was clearly a "sale of the coconut fruits."
The vendor sold, transferred and conveyed "by way of absolute sale, all the coconut
fruits of his land," thereby divesting himself of all ownership or dominion over the fruits
during the seven-year period. The possession and enjoyment of the coconut trees cannot
be said to be the possession and enjoyment of the land itself because these rights are
distinct and separate from each other, the first pertaining to the accessory or
improvements (coconut trees) while the second, to the principal (the land). A transfer of
the accessory or improvement is not a transfer of the principal. It is the other way
around, the accessory follows the principal. Hence, the sale of the nuts cannot be
interpreted nor construed to be a lease of the trees, much less extended further to
include the lease of the land itself.
The real and pivotal issue of this case which is taken up in petitioner's sixth assignment
of error and as already stated above, refers to the validity of the "Deed of Sale", as such
contract of sale, vis-a-vis the provisions of Sec. 8, R.A. No. 477. The lower Court did not
rule on this question, having reached the conclusion that the contract at bar was one of
lease. It was from the context of a lease contract that the Court below determined the
applicability of Sec. 8, R.A. No. 477, to the instant case.
Resolving now this principal issue, We find after a close and careful examination of the
terms of the first paragraph of Section 8 hereinabove quoted, that the grantee of a parcel
of land under R.A. No. 477 is not prohibited from alienating or disposing of the natural
and/or industrial fruits of the land awarded to him. What the law expressly disallows is
the encumbrance or alienation of the land itself or any of the permanent improvements
thereon. Permanent improvements on a parcel of land are things incorporated or
attached to the property in a fixed manner, naturally or artificially. They include
whatever is built, planted or sown on the land which is characterized by fixity,

immutability or immovability. Houses, buildings, machinery, animal houses, trees and

plants would fall under the category of permanent improvements, the alienation or
encumbrance of which is prohibited by R.A. No. 477. While coconut trees are permanent
improvements of a land, their nuts are natural or industrial fruits which are meant to be
gathered or severed from the trees, to be used, enjoyed, sold or otherwise disposed of by
the owner of the land. Herein respondents, as the grantee of Lot No. 21 from the
Government, had the right and prerogative to sell the coconut fruits of the trees growing
on the property.
By virtue of R.A. No. 477, bona fide occupants, veterans, members of guerilla
organizations and other qualified persons were given the opportunity to acquire
government lands by purchase, taking into account their limited means. It was intended
for these persons to make good and productive use of the lands awarded to them, not
only to enable them to improve their standard of living, but likewise to help provide for
the annual payments to the Government of the purchase price of the lots awarded to
them. Section 8 was included, as stated by the Court a quo, to protect the grantees from
themselves and the incursions of opportunists who prey on their misery and poverty." It
is there to insure that the grantees themselves benefit from their respective lots, to the
exclusion of other persons.
The purpose of the law is not violated when a grantee sells the produce or fruits of his
land. On the contrary, the aim of the law is thereby achieved, for the grantee is
encouraged and induced to be more industrious and productive, thus making it possible
for him and his family to be economically self-sufficient and to lead a respectable life. At
the same time, the Government is assured of payment on the annual installments on the
land. We agree with herein petitioner that it could not have been the intention of the
legislature to prohibit the grantee from selling the natural and industrial fruits of his
land, for otherwise, it would lead to an absurd situation wherein the grantee would not
be able to receive and enjoy the fruits of the property in the real and complete sense.
Respondent through counsel, in his Answer to the Petition contends that even
granting arguendo that he executed a deed of sale of the coconut fruits, he has the
"privilege to change his mind and claim it as (an) implied lease," and he has the
"legitimate right" to file an action for annulment "which no law can stop." He claims it is
his "sole construction of the meaning of the transaction that should prevail and not
petitioner. (sic). 10 Respondent's counsel either misapplies the law or is trying too hard
and going too far to defend his client's hopeless cause. Suffice it to say that respondentgrantee, after having received the consideration for the sale of his coconut fruits, cannot
be allowed to impugn the validity of the contracts he entered into, to the prejudice of
petitioner who contracted in good faith and for a consideration.
The issue raised by the seventh assignment of error as to the propriety of the award of
attorney's fees made by the lower Court need not be passed upon, such award having
been apparently based on the erroneous finding and conclusion that the contract at bar
is one of lease. We shall limit Ourselves to the question of whether or not in accordance
with Our ruling in this case, respondent is entitled to an award of attorney's fees. The
Civil Code provides that:

Art. 2208. In the absence of stipulation, attorney's fees and expenses of

litigation, other than judicial costs, cannot be recovered, except:
(1) When exemplary damages are awarded;
(2) When the defendant's act or omission has compelled the plaintiff to
litigate with third persons or to incur expenses to protect his interest;
(3) In criminal cases of malicious prosecution against the plaintiff;
(4) In case of a clearly unfounded civil action or proceeding against the
plaintiff;
(5) Where the defendant acted in gross and evident bad faith in refusing to
satisfy the plaintiff's plainly valid, just and demandable claim;
(6) In actions for legal support;
(7) In actions for the recovery of wages of household helpers, laborers and
skilled workers;
(8) In actions for indemnity under workmen's compensation and
employer's liability laws;
(9) In a separate civil action to recover civil liability arising from a crime;
(10) When at least double judicial costs are awarded;
(11) In any other case where the court deems it just and equitable that
attorney's fees and expenses of litigation should be recovered.
In all cases, the attorney's fees and expenses of litigation must be
reasonable.
We find that none of the legal grounds enumerated above exists to justify or warrant the
grant of attorney's fees to herein respondent.
IN VIEW OF THE FOREGOING, the judgment of the lower Court is hereby set aside
and another one is entered dismissing the Complaint. Without costs.
SO ORDERED.
Teehankee (Chairman), Makasiar, Fernandez, Melencio-Herrera and Plana, JJ.,
concur.

Footnotes

1 Exhibit "A", Folder of Exhibits.

2 Order of the lower Court dated November 9, 1972, Original Record on Appeal pp. 9-10.
The first issue was originally phrased thus: "Was the partial consideration of sale in the
sum of P 3,650.00 paid by defendant to Ramon Sua as agreed upon by the parties?," but
was later changed to what appears above, in an Order dated November 21, 197 2,
Original Record on Appeal p. 12.
3 Decision of the lower Court dated January 5, 1973, Original Record on Appeal p. 16.
4 Ibid, pp. 17-18.
5 This provision has been amended by Section 2 of Presidential Decree No. 967,
promulgated on June 24, 1976, to read as follows:
"Sec. 8. Any provision of law, executive order, rules or regulations to the contrary
notwithstanding, an applicant who has acquired land pursuant to the provisions of this
Act and to whom a certificate of title has been issued covering such land may sell, cede,
transfer, or convey his rights and interests therein, including the permanent
improvements on the land, to any interested party."
6 Decision of the lower Court dated January 5, 1973, Original Record on Appeal, p. 19.
7 L-23302, September 25, 1968, 25 SCRA 153.
8 Ibid, p. 160.
9 See Pacific Oxygen and Acetylene Co. vs. Central Bank, L-21881, March 1, 1968, 22
SCRA 917, 921.
10 Respondent's Answer to Petition for Review, p. 5; Rollo, p. 74.

Short Title
Luis Pichel vs. Prudencio Alonzo

G.R. Number

G.R. No. L-36902

Date of Promulgation

January 30, 1982