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EN BANC

[G.R. No. L-26002. October 31, 1969.]

ABELARDO BAUTISTA and ROBERTO TAN TING, petitioners-appellees, vs. FEDERICO O. BORROMEO, INC., HONORABLE CESARC. CRUZ, Judge of the Municipal Court of Mandaluyong, Rizal andJESUS BAUTISTA, Deputy Sheriff of Manila as Special Sheriff,respondent-appellants.

Dante O. Tinga and Leopoldo V. Repotente, Jr. for petitioners-appellees.

Modesto S. Mendoza for respondents-appellants.

SYLLABUS

1.REMEDIAL LAW; PETITION FOR RELIEF; UNAVAILABILITY WHENTHERE IS ANOTHER REMEDY OPEN TO PARTY. A basic precept isthat when another remedy at law is open to a party, he cannotsue out a petition for relief under Rule 38. Thus, a petition forrelief is not a substitute for appeal. It has been held that where adefendant could have appealed but did not appeal from the

decision of the inferior court to the CFI but instead filed a petitionfor relief, his petition was inappropriate as it "would amount toreviving his right to appeal which he had irretrievably lost throughthe gross inaction of his counsel."

2.ID.; ID.; ID.; INSTANT CASE. Petitioners learned of themunicipal court judgment on August 6, 15, when they received acopy of its decision. They moved to set aside that judgment onAugust 13, 1965. On September 2, 1965, petitioners learned ofthe court's order of August 14, 1965 denying their motion to setaside. They could have appealed but did not perfect their appealto the CFI on time they paid the appellate docket fee anddeposited their appeal bond only on September 28, eleven (11)days late. Clearly, their own fault to seasonably appeal wasthrough their own fault. Then they filed a petition for relief onOctober 26, 1965, it was way beyond the 60-day period from

August 6, 1965, the time they first learned of the judgment to beset aside, as required by Section 3, Rule 38 of the Rules of Court.The petition for relief must therefore fail.

3.ID.; ID.; GROUNDS; EXCUSABLE NEGLIGENCE NOT AVAILABLE ININSTANT CASE. Counsel of petitioners attributes his failure toattend the hearing upon his reliance on the assurance of hisassociate in substituting for him to said hearing due to the factthat he had another case before the City Court of Quezon City. Hisassociate, in turn, was unable to attend the hearing because the"records of the case had been misplaced." Considering thatcounsel of petitioners had consulted his calendar before thehearing was scheduled, it can be safely presumed that his othercase was not yet calendared for hearing hence he could not haveagreed in good faith to set the hearing on a day on which he hadanother previously scheduled. He even failed to notify his clientsof the hearing set for July 23, 1965, thus, they also failed toappear thereat. The excuse that the record of the case had beenmisplaced is a stereotyped excuse resorted by lawyers in order towin a new trial. Granting the same to be true, counsel's associatecould have appeared at the hearing and inform the court of suchfact on the ground of which a postponement could have beenasked. There is no excusable negligence upon which petitionerscould cling.

4.LABOR AND SOCIAL LEGISLATION; WORKMEN'SCOMPENSATION ACT; RIGHT TO COMPENSATION ANDSUBROGATION; SECTIONS 2 and 6. The compensation andfuneral expenses paid to the widow of the deceased by Borromeowas an obligation arising from law Sec. 2 of the Workmen'sCompensation Act and Section 6 of the same Act.

5.ID.; ID.; ID.; NO NEED TO ESTABLISH CONTRACTUALRELATIONSHIP. There is no need to establish contractualrelationship between Quintin Delgado, the deceased employeeand petitioners, owner and driver of the Ford Truck that hit thepanel truck driven by Delgado thereby causing his death. Thecause of action recovery from petitioners, the compensation andfuneral expenses it paid the widow of said deceased employee, isone which does not spring from a creditor-debtor relationship. Itarises by virtue of its subrogation to the right of Quintin Delgado

to sue the guilty party. Such subrogation is sanctioned by theWorkmen's Compensation Law.

D E C I S I O N

SANCHEZ, J p:

Respondents-appellants seek to overturn the decision of theCourt of First Instance of Rizal of January 6, 1966 grantingpetitioners-appellees' petition for relief from judgment, settingaside the July 23, 1965 decision of the Municipal Court ofMandaluyong, Rizal, in Civil Case 1365 and ordering a new trial.

The background facts are as follows:

On September 15, 1964, the Ford truck of petitioner Roberto TanTing driven by Abelardo Bautista, the other petitioner, and theVolkswagen delivery panel truck owned by respondent FedericoO. Borromeo, Inc. (hereinafter called Borromeo) were involved ina traffic accident along Epifanio de los Santos Avenue. In saidtraffic accident, Quintin Delgado, a helper in Borromeo's deliverypanel truck, sustained injuries which resulted in his instantaneousdeath. Borromeo had to pay Delgado's widow the sum of P4,444

representing the compensation (death benefit) and funeralexpenses due Delgado under the Workmen's Compensation Act.

On June 17, 1965, upon the averment that the said vehicularaccident was caused by petitioners' negligence, Borromeo startedsuit in the Municipal Court of Mandaluyong, Rizal to recover frompetitioners the compensation and funeral expenses it paid to thewidow of Quintin Delgado. 1

At the scheduled hearing of the case on July 23, 1965, neitherpetitioners nor their counsel appeared. Borromeo was thusallowed to present its evidence ex parte. On the same day, July23, 1965, the municipal court rendered judgment in favor ofBorromeo and against the petitioners in the principal sum ofP4,444, and P500 attorney's fees, and costs. Respondents averthat this judgment has been executed and satisfied.

On August 6, 1965, petitioners received copy of the municipalcourt's decision.

On August 13, 1965, petitioners moved to set aside the decision.On August 14, 1965, this motion was denied.

On August 16, 1965, copy of this order of denial was sent byregistered mail to counsel of petitioners. Said counsel did notreceive this registered mail and the mail matter was returned tothe court unclaimed. However, said counsel learned of this denialon September 2, 1965 allegedly "in the course of hisinvestigation."

Petitioners filed a notice of appeal dated September 2, 1965.They, however, paid the appellate docket fee and deposited theircash appeal bond only on September 28, 1965. Their appeal wasconsequently turned down by the municipal court, for the reasonthat the deposit of the bond and the payment of the docket feewere done after the lapse of the reglementary period.

Nothing was done by petitioners until October 26, 1965, whenthey lodged a petition for relief from the inferior court's judgmentin the Court of First Instance of Rizal. 2 They there claimedexcusable negligence for the failure of petitioners' counsel toappear in the July 23, 1965 hearing at the municipal court andasserted that they had a good and substantial defense in that"there was no contractual relationship between the parties,whether express or implied." They sought preliminary injunction,prayed for trial de novo on the merits. A restraining order was atfirst issued by the court; but the prayer for preliminary injunction

was eventually denied.

Respondents' answer contended that the petition for relief wasfiled out of time; that petitioners' counsel's failure to attend thehearing of July 23, 1965 does not constitute excusable negligence;and that the affidavits attached to the petition do not show goodand substantial defense.

Petitioners thereafter moved for judgment on the pleadings. Noobjection thereto was interposed by respondents. The lower court

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then rendered the judgment mentioned in the first part of thisopinion.

A move to reconsider failed. Hence, this appeal.

We vote to reverse the lower court's judgment for the followingreasons:

1.The petition for relief from judgment under Rule 38 of the Rulesof Court is unavailable to petitioners.

A basic precept is that when another remedy at law is open to aparty, he cannot sue out a petition for relief under Rule 38. 3Thus, a petition for relief is not a substitute for appeal. It has beenheld that where a defendant could have appealed but did notappeal from the decision of the inferior court to the Court ofFirst Instance but instead filed a petition for relief, his petition wasinappropriate as it "would amount to reviving his right to appealwhich he had irretrievably lost through the gross inaction of hiscounsel." 4

Here, petitioners learned of the municipal court judgment onAugust 6, 1965, when they received a copy of its decision. They

moved to set aside that judgment on August 13, 1965. At thattime, a petition for relief could not be availed of because the judgment of the municipal court had not yet become final. 5 But,on September 2, 1965, petitioners learned of the court's order ofAugust 14, 1965 denying their motion to set aside. They couldhave appealed. Because, nothing in the record suggests that thenotices to petitioners to take delivery of the registered envelope containing the inferior court's resolution denying petitioners'motion to set aside the decision were ever served on saidpetitioners. On the contrary, Teresita Roxas, secretary ofpetitioners' counsel, in her affidavit dated October 23, 1965,Annex E of the petition for relief, categorically denied receipt ofany such notice, thus: "That I have not received any registry noticecorresponding to a registered mail at the Manila Post Officecontaining an order by the Municipal Court of Mandaluyong, Rizal,dated August 14, 1965." 6

But petitioners did not perfect their appeal to the Court of FirstInstance on time they paid the appellate docket fee anddeposited their appeal bond only on September 28, eleven (11)days late. Clearly, their failure to seasonably appeal was throughtheir own fault.

And, when they did file a petition for relief on October 26, 1965, itwas way beyond the sixty-day period from August 6, 1965, thetime they first learned of the judgment to be set aside, asrequired by Section 3, Rule 38 of the Rules of Court.

We accordingly, rule that petitioners' petition for relief must fail.

2.Petitioners failed to make out a case of excusable negligence forcounsel's non-attendance at the July 23, 1965 hearing.

Their counsel, Atty. Leopoldo V. Repotente, Jr., explains his failureto attend the hearing in this wise "he relied on the assurance ofhis associate, Atty. Lucenito N. Tagle, that the latter will attend tothe case for him since on that same date he (Atty. Repotente) hadanother case before the City Court of Quezon City." In his swornstatement, Atty. Tagle in turn stated that he was unable to attendthe hearing despite his promise to do so because, in his ownwords, "when I transferred to my new office at A & T Building,Escolta, Manila, the record of this case was misplaced, mislaid orotherwise lost by my helpers and was not among those turnedover to my possession" and "it was only a few days after the dateof hearing on July 23, 1965, that I found the record of this case in

one of the drawers of my table in my former office and it was onlythen that I realized my failure to attend the hearing on July 23,1965, . . ."

We cannot view such negligence of petitioners' two attorneys asexcusable. There was no plausible reason for Repotente to entrustthe hearing of the case to another lawyer. His lame excuse wasthat he requested Tagle to attend the hearing of said case for himbecause he had another hearing at the City Court of Quezon City.This is unworthy of serious consideration. For, as respondentsaver and this is not denied by petitioners the hearing of July

23, 1965 before the municipal court was set in open court duringthe initial date of hearing held on July 1, 1965 after Atty.Repotente consulted his calendar. When Repotente agreed inopen court to set the trial of the case for July 23, 1965, it may verywell be presumed that his other case in Quezon City was not yetcalendared for hearing. He could not have, in good faith, agreedto set the case for hearing on the day on which he had anotherpreviously scheduled trial. Further, he failed to notify his clients ofthe hearing set for July 23, 1965; they also failed to appearthereat. Certainly, Repotentes' inadvertence cannot be labeled asexcusable.

Nor may Atty. Tagle offer as excuse the fact that the record of thecase "was misplaced, mislaid or otherwise lost." This is astereotyped excuse. It is resorted to by lawyers in order to winnew trial of the case and thereby move farther away the day ofreckoning. To be remembered is that the life of each case is in itsrecord. If the record of the case was misplaced, mislaid or lost, heshould have nevertheless attended the scheduled hearing andrequested for a postponement by reason thereof. But he did not.Appropriate it is to recall here that a prudent lawyer keeps aseparate record or diary of hearings of cases he handles and of hisprofessional engagements. A lawyer's schedules of hearings

intended as reminder are not noted by the lawyer in his recordof the case. That would be useless for the purpose.

There is then no excusable negligence to which the petition forrelief can cling.

3.Even on the merits, petitioners' case must fall.

Borromeo paid the widow of its employee, Quintin Delgado,compensation (death benefit) and funeral expenses for thelatter's death while in the course of employment. This obligationarises from law Section 2 of the Workmen's Compensation Act.7 The same law in its Section 6 also provides that "[i]n case anemployee suffers an injury for which compensation is due underthis Act by any other person besides his employer, it shall beoptional with such injured employee either to claim

compensation from his employer, under this Act, or sue suchother person for damages, in accordance with law; and in casecompensation is claimed and allowed in accordance with this Act,the employer who paid such compensation or was found liable topay the same, shall succeed the injured employee to the right ofrecovering from such person what he paid: . . ." 8

It is evident from the foregoing that "if compensation is claimedand awarded, and the employer pays it, the employer becomessubrogated to and acquires, by operation of law, the worker'srights against the tortfeasor." 9

No need then there is to establish any contractual relationshipbetween Quintin Delgado and herein petitioners. Indeed, there isnone. The cause of action of respondent corporation is one whichdoes not spring from a creditor-debtor relationship. It arises byvirtue of its subrogation to the right of Quintin Delgado to sue theguilty party. Such subrogation is sanctioned by the Workmen'sCompensation Law aforesaid. It is as a subrogee to the rights of itsdeceased employee, Quintin Delgado, that Borromeo filed a suitagainst petitioners in the Municipal Court of Mandaluyong, Rizal.10

FOR THE REASONS GIVEN, the appealed decision of January 6,1966 under review is hereby reversed and the petition for relief ishereby dismissed.

Costs against petitioners-appellees. So ordered.

Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Castro,Fernando, Teehankee and Barredo, JJ., concur.

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EN BANC

[G.R. No. 4089. January 12, 1909.]

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

J. H. Junquera, for appellant.

Filemon Sotto, for appellees.

SYLLABUS

1.RECIPROCAL OBLIGATION OF HUSBAND AND WIFE; SUPPORT. Among the reciprocal obligations existing between a husband andwife is that of support, which obligation is established by law.

2.ID.; SUPPORT OF STRANGERS. The law does not compel anyperson to support a stranger unless such person bound himself todo so by an express contract.

3.ID.; SUPPORT OF WIFE. Where a husband whom the lawcompels to support his wife in living, the father and mother-in-lawof the latter are under no liability to provide for her.

D E C I S I O N

TORRES, J p:

On the 23d of November, 1906, Arturo Pelayo, a physician-residing in Cebu, filed a complaint against Marcelo Lauron andJuana Abella setting forth that on or about the 13th of October ofsaid year, at night, the plaintiff was called to the house of thedefendants, situated in San Nicolas, and that upon arrival he wasrequested by them to render medical assistance to theirdaughter-in-law who was about to give birth to a child; thattherefore, and after consultation with the attending physician, Dr.

Escano, it was found necessary, on account of the difficult birth,to remove the fetus by means of forceps which operation wasperformed by the plaintiff, who also had to remove the afterbirth, in which service he was occupied until the followingmorning, and that afterwards, on the same day, he visited thepatient several times; that the just and equitable value of theservices rendered by him was P500, which the defendants refuseto pay without alleging any good reason there for; that for saidreason he prayed that judgment be entered in his favor as againstthe 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 allof the allegations therein contained and alleged as a specialdefense, that their daughter-in-law had died in consequence ofthe said childbirth, and that when she was alive she lived with herhusband independently and in a separate house without anyrelation whatever with them, and that, if on the day when shegave birth she was in the house of the defendants, her stay therewas accidental and due to fortuitous circumstances; therefore, heprayed that the defendants be absolved of the complaint withcosts against the plaintiff.

The plaintiff demurred to the above answer, and the court belowsustained the demurrer, directing the defendants, on the 23d ofJanuary, 1907, to amend their answer. In compliance with thisorder the defendants presented, on the same date, theiramended answer, denying each and every one of the allegationscontained in the complaint, and requesting that the same bedismissed with costs.

As a result of the evidence adduced by both parties, judgmentwas entered by the court below on the 5th of April, 1907,whereby the defendants were absolved from the formercomplaint, on account of the lack of sufficient evidence toestablish a right of action against the defendants, with costsagainst the plaintiff, who excepted to the said judgment and inaddition moved for a new trial on the ground that the judgmentwas contrary to law; the motion was overruled and the plaintiffexcepted and in due course presented the corresponding bill ofexceptions. The motion of the defendants requesting that thedeclaration contained in the judgment that the defendants had

demanded he professional services of the plaintiff he eliminatedtherefrom, for the reason that, according to the evidence, no suchrequest had been made, was also denied, and to the decision thedefendants excepted.

Assuming that it is a real fact acknowledged by the defendants,that the plaintiff, by virtue of having been sent for by the former,attended as physician and rendered professional services to adaughter-in-law of the said defendants during a difficult andlaborious childbirth, in order to decide the claim of the saidphysician regarding the recovery of his fees, it becomes necessaryto decide who is bound to pay the bill, whether the father andmother-in-law of the patient, or the husband of the latter.

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

Obligations arising from law are not presumed. Those expresslydetermined in the code or in special laws, etc., are the onlydemandable ones. Obligations arising from contracts have legalforce 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 comprisedamong the mutual obligations to which spouses are bound by wayof mutual support. (Arts. 142 and 143.).

If every obligation consists in giving, doing, or not doingsomething (art. 1088), and spouses are mutually bound to supporteach other, there can be no question but that, when either ofthem by reason of illness should be in need of medical assistance,the other is under the unavoidable obligation to furnish thenecessary services of a physician in order that health may berestored, and he or she may be freed from the sickness by whichlife is jeopardized; the party bound to furnish such support istherefore liable for all expenses, including the fees of the medicalexpert for his professional services. This liability originates from

the above-cited mutual obligation which the law has expresslyestablished between the married couple.

In the face of the above legal precepts it is unquestionable thatthe person bound to pay the fees due to the plaintiff for theprofessional services that he rendered to the daughter-in-law ofthe defendants during her childbirth is the husband of the patientand not her father and mother- in-law, the defendants herein. Thefact that it was not the husband who called the plaintiff andrequested his assistance for his wife is no bar to the fulfillment ofthe said obligation, as the defendants, in view of the imminentdanger to which the life of the patient was at that momentexposed, considered that medical assistance was urgentlyneeded, and the obligation of the husband to furnish his wife withthe indispensable services of a physician at such critical momentsis specially established by the law, as has been seen, andcompliance therewith is unavoidable; therefore, the plaintiff, whobelieves that he is entitled to recover his fees, must direct hisaction against the husband who is under obligation to furnishmedical assistance to his lawful wife in such an emergency.

From the foregoing it, may readily be understood that it wasimproper to have brought an action against the defendants simplybecause they were the parties who called the plaintiff andrequested him to assist the patient during her difficultconfinement, and also, possibly, because they were her fatherand mother-in-law and the sickness occurred in their house. Thedefendants were not, nor are they now, under any obligation byvirtue of any legal provision, to pay the fees claimed, nor inconsequence of any contract entered into between them and theplaintiff from which such obligation might have arisen.

In applying the provisions of the Civil Code in an action forsupport, the supreme court of Spain, while recognizing the validityand efficiency of a contract to furnish support wherein a personbound himself to support another who was not his relative,established the rule that the law does impose the obligation topay for the support of a stranger, but as the liability arose out of acontract, the stipulations of the agreement must be upheld.(Decision of May 11 1897.)

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Within the meaning of the law, the father and mother law arestrangers with respect to the obligation that devolves upon thehusband to provide support, among which is the furnishing ofmedical assistance to his wife at the time of her confinement;and, on the other hand, it does not appear that a contract existedbetween the defendants and the plaintiff physician, for whichreason it is obvious that the former can not be compelled to payfees which they are under no liability to pay because it does notappear that they consented to bind themselves.

The foregoing suffices to demonstrate that the first and seconderrors assigned to the judgment below are unfounded, because, ifthe plaintiff has no right of action against the defendants, it isneedless to declare whether or not the use of forceps is a surgicaloperation.

Therefore, in view of the considerations hereinbefore set forth, itis our opinion that the judgment appealed from should beaffirmed with the costs against the appellant. So ordered.

Mapa and Tracey, JJ., concur.

Arellano, C.J. and Carson. J., concur in the result.

Willard, J., dissents.

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FIRST DIVISION

[G.R. No. 858 . January 23, 1903.]

FRANCISCO MARTINEZ, plaintiff-appellee, vs. PEDRO MARTINEZ,defendant-appellant.

Carlos Ledesma, for appellant.

Felipe G. Calderon, for appellee.

SYLLABUS

1.OWNERSHIP OF VESSELS; REGISTRY. The person in whosename a vessel is registered is presumed to have the legal titlethereto.

2.ID; ID. The fact that a vessel registered in the name of oneparty was purchased with funds of another does not give thelatter either a legal or an equitable title to the vessel, nor does itraise a resulting trust in his favor.

3.CIVIL PROCEDURE; FINDING OF FACT. Where the facts recited

in the decision, together with those admitted in the pleadings, donot support the judgment it will be reversed.

4.ID.; ID. The statement that a person is the owner of a vessel isa conclusion of law and not a finding of fact.

5.OWNERSHIP OF VESSELS; REGISTRY. The exercise of acts ofownership over a vessel registered in another's name, by one withwhose funds the vessel was purchased, does not overcome thepresumption that the registered owner is the legal owner.

Per COOPER, J ., dissenting:

6.CIVIL PROCEDURE; FINDINGS OF FACT. The finding that aperson is the owner of a vessel is the finding of an ultimate factand not of a conclusion of law

D E C I S I O N

WILLARD, J p:

In the decision in this case it is found as a fact that the titles to thesteamer Balayan and the coasting vessel Ogoo are registered inthe name of the defendant. It must be assumed from this that thedefendant has the legal title to the vessels, as without it theycould not be so registered.

These facts standing alone show that the defendant is the ownerof the property.

Two other facts, however, appear in the decision which theappellee claims warranted the court below in deciding that thedefendant was not the owner.

1.The court found that the money with which the vessels werepurchased was furnished by the plaintiff, the father of thedefendant. Does this fact make him the owner of them, the titlehaving been taken and registered in the son's name?

The various ways in which the title to property may be acquiredare stated in article 609 of the Civil Code.

The plaintiff never acquired the title to these vessels in any one ofthe ways therein described. He did not acquire it by donation orsuccession. He did not acquire it by means of any contract.

The court does not find that the father and son had between

themselves any contract of any kind by virtue of the son agreed totransfer the title to the father or to hold it for his benefit.

There is an allegation in the complaint that the defendant actedas the agent of the plaintiff in the purchase. This is denied in theanswer and there is no finding in the decision which supports thisallegation of the complaint.

There is only the bare fact that the price of property which wasconveyed to the defendant by a third person was paid by the

plaintiff. It can not be said that the law by reason of this facttransfers any title or interest in the thing itself to the plaintiff.

Article 1090 of the Civil Code provides that "obligations derivedfrom the law are not to be presumed. Only those expresslyprovided for in this Code or in special laws are enforceable."

It is provided in Article 161 of the same Code, relating to minors,that "the ownership or enjoyment of property acquired by aminor child with funds of his parents, pertain to the latter." Thisarticle does not apply to the present case, for the son was of age.

This is the only provision which we have found anywhere in thelaws now in force that declares the property to belong to theperson who paid the money.

Nor can such general doctrine be found in the former law. Law 49,title 5, partida 5, the effect of which is incorrectly stated in thebrief of the appellee, expressly provided that property boughtwith another's money should not belong to the owner of themoney except in certain enumerated cases of which this is notone.

Law 48, title 5, partida 5, also expressly provided that where onebought with his own money property the title to which heprocured to be transferred to a third person, such third personhad the right to keep it by reimbursing the other for his outlay.

It may be true that the laws in some of the United States would inthis case raise a resulting trust in favor of the plaintiff. But suchlaws are not in force here; and whatever other right the plaintiffmay have against the defendant, either for the recovery of themoney paid or for damages, it is clear that such payment gave himno title either legal or equitable to these vessels.

If there were evidence in the case which would have justified thecourt below in finding that the defendant acted as the agent ofthe plaintiff or that there was some other contract between them,he should have incorporated such findings in his decision.

Article 133 of the Code of Civil Procedure requires the court to filea written decision. If the facts stated in that decision togetherwith those admitted in the pleadings are not sufficient as a matterof law to support the judgment, it must be reversed, if exceptedto.

The record, however, contains all the evidence and anexamination of it shows that no such findings would have beenwarranted. As to the Balayan, it appears that the son had nothingwhatever to do with its purchase. It was bought by the father withthe money of the conjugal partnership, and the title by hisdirection placed in the son's name.

As to the Ogoo, the father's intervention in the purchasenowhere appears. He simply testified that it was bought with hismoney.

It is said that the court below found as a fact that the father wasthe owner of the vessels and that we can not disturb this findingbecause there was no motion for a new trial. This contention cannot be sustained. The ultimate question in the whose case was:Who owned this property? The resolution of that questiondepended upon the application of legal principles to the factsconnected with its acquisition and subsequent management.Those facts were that the father bought and paid for it, and thatthe titles to it were taken and registered in the son's name. Astatement that by reason of these facts the father is the owner isa statement of law and not a finding of fact.

2.It was found as a fact the father had exercised acts of ownership

over the vessel. That finding is entirely consistent with the legalownership by the son. The exercise of such acts could not transfersuch ownership from the son.

3.There is in the record a letter written by the defendant to theplaintiff in which the latter is asked if he desires to sell theBalayan. This letter is not incorporated into the findings and wehave no right to consider it. But, if we had, it would not in ouropinion change the result. Such a letter might well have beenwritten by a son to a father, both of them recognizing the fact

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that the son was the owner of the property as to which theinquiry was made.

4.In conclusion we may say that even on the supposition that awritten and recorded title to vessels may be overcome by parolevidence, that offered in this case was insufficient to accomplishsuch a result. As to the Balayan, there is nothing whatever toshow why the father placed the title in his son's name. It mayhave been either as a gift or a loan. As to the Ogoo, there is thesimple declaration of the father that he paid for it. This may havebeen either a gift or a loan.

The judgment is reversed and a new trial is granted with costsagainst the appellee.

Torres, Mapa and Ladd, JJ ., concur.

Arellano, C .J ., did not sit in this case.

Separate Opinions

COOPER, J ., dissenting:

This action was brought by Don Francisco Martinez against DonPedro Martinez, the appellant, for the recovery as owner of twocertain vessels, the steamship Balayan and the schooner Ogoo.

The plaintiff brings the suit for himself and in representation of hisdeceased wife, alleging that the ships were bought with fundsbelonging to the community estate.

The defendant in his answer claims that he is the exclusive ownerof the ships, basing his right to such ownership upon theirregistration in his name in the office of the Captain of the Port,and further, that the ships were purchased with his individualmoney.

The first assignment of error is that "the court erred in adjudgingthe ownership of the property of the ships Balayan and Ogoo to

Don Francisco Martinez, the latter not having presented writtendocuments of the acquisition of said ships nor certificates ofincsription in the registry."

1.This assignment of error raises the question of the sufficiency ofthe proof to sustain the judgment of the court below and requiresan examination of the evidence taken in the court below and atrial of the questions of fact as to the ownership of the property.

Section 497 of the Code of Civil Procedure provides that in thehearings upon bills of exceptions in civil actions and specialproceedings, the Supreme Court shall not review the evidencetaken in the court below nor retry the questions of fact except asin that section provided, which are in the following cases:

(1)Where assessors have sat with the judge and both assessorsare of the opinion that the findings of fact and judgment arewrong and have certified their dissent.

(2)Upon the ground of the discovery of new and materialevidence.

(3)Where the excepting party files a motion in the Court of FirstInstance for a new trial upon the grounds that the findings of factare plainly and manifestly against the weight of evidence and the judge overrules the motion and die exception was taken to hisoverruling the same.

There was no motion for a new trial in the Court of First Instance,not is it contended that this case falls within either of the otherexceptions.

It is insisted that while this court will not review or retry questionsof fact, yet if it appears from the findings of fact as contained inthe decision of the lower court that the facts do not justify the judgment or conclusions of law the case will be reversed for anew trial.

There was no exception taken to the judgment, the exceptionbeing only such as is inferred from the presentation andallowance of the bill of exceptions.

This is not sufficient to justify this court in entertaining suchobjection; the rule is that were a judgment is entered notwarranted by the findings the proper remedy is by application tothe court in which it is entered to correct or vacate the judgment,and unless the action of the court has been thus invoked thepetition will not be considered on appeal. (Scott vs. MinneapolisR. R. Co., 42 Minn., 179).

But had the exception been properly taken an examination of thefindings clearly shows that the judgment is sustained by them.The following findings of fact were made by the lower court andare contained in the judgment, to wit: "I am of the opinion thatDon Francisco Martinez, for himself and in representation of hiswife, is the actual and true owner of said steamship and schoonerand has exercised over them acts of ownership and dominion, andthat these ships were bought with the funds by him furnished.With respect to the fact that the steamship and schooner mayhave been registered in the name of the defendant, PedroMartinez, it is my opinion that this fact can not be considered as

prejudicial to the true right of the plaintiff."

An analysis of this finding will show that it consists of the findingof, first, an ultimate fact, that is, that the plaintiff D. FranciscoMartinez is the actual and true owner of the steamship andschooner, the property in controversy; second, the probative factthat he has exercised over them acts of ownership and dominionand that these ships were bought with funds furnished by him,and, third, the probative fact that the ships were registered in thename of the defendant, Pedro Martinez.

The majority of the court regard the first finding that is, thatthe plaintiff is the actual and true owner of the property incontroversy as a statement of law and not a finding of fact, andhave rejected it as a finding of fact. In reversing the case for a newtrial the decision is based upon the finding that the vessels are

registered in the name of the defendant, and it is said that it mustbe assumed that the defendant has a title to the vessels aswithout it they could not be so registered.

The conclusion I reach is the reverse of that reached by the court.The finding of the plaintiff's ownership of the vessel and schooneris not a conclusion of law, but is the finding of an ultimate fact inthe case, and was the proper and the only finding that could havebeen made. As stated in the opinion, the ultimate question in thewhole case was, Who owned this property?

The supreme court of Minnesota has passed upon the precisequestion in the case of Common vs. Grace (36 Minn., 276). Thefinding of the lower court in that case was that "John Grace was,at the time of his death, the owner in fee simple of the realestate." The appellant made a request in the court below foradditional findings. Upon the refusal of the lower court to makesuch additional findings it was assigned as error on appeal.Mitchell, J., says: "The facts required to be found are the ultimatefacts forming the issued presented by the pleadings and whichconstitute the foundation of a judgment and not those which aresimply evidentiary of them. The court is not required to findmerely evidentiary facts or to set forth and explain the means orprocesses by which it arrived at such findings. Neither evidence,argument, nor comment has any legitimate place in the findingsof fact. The test of the sufficiency of the findings of fact by a court,we apprehend, is, Would they answer if presented by a jury in theform of a special verdict, which is required to present theconclusions of fact as established by the evidence, and not theevidence to prove them, and to present those conclusions of factso that nothing remains to the court but to draw from them

conclusion of law? In the case at bar the finding of fact that JohnGrace was, at the time of his death, the owner in fee simple of thereal estate in question was the ultimate fact upon which thedecision of the case depended. It covered the only issue in thecase, and was a sufficient foundation for a judgment in favor ofdefendants. It could only be arrived at upon the hypothesis thatthe deeds in dispute were duly executed, and the findingnecessarily implied and included this."

In the case of Daly vs. Socorro (80 Cal., 367) it is said: "Theappellant further contends that the cause should be reversed

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because the court failed to find upon certain other issuespresented. His right to maintain the action was based wholly uponhis ownership and right of possession, and these being foundagainst him it is immaterial to him whether the court found as toother facts or not, as the judgment must have been against himwhatever the other finding might have been."

The finding of the court that the ships were registered in thename of the defendant is the finding only of a probative orevidentiary fact, that is, it is the finding simply of evidence tendingto prove the ultimate fact, to wit, the fact of ownership. Thevarious means of proving this ultimate fact is the evidence. Thus,a bill of sale is evidence of ownership. The possession of propertyis prima facie evidence of ownership, and so perhaps is theregistry of ship evidence of the ownership of the person in whosename it is made; but while it is evidence tending to proveownership, there may be other evidence in the case totallydestroying its value, such as a sale and conveyance of the ship bythe owner or person in whose name it is registered madesubsequent to the date of the registration; title by prescription asagainst the party in whose name the ship is registered; by proofthat the party in whose name the ship is registered held the titlesimply as agent of the party claiming ownership. For this reason

the finding that the vessels are registered in the name of thedefendant is inconclusive and is entirely insufficient as a finding offact.

The finding of fact must be such as includes the entire issue or theultimate fact to be proven, and in this case, as is stated in theopinion, the ultimate question in the whole case was who ownedthis property. The lower court has responded to this issue bysaying that "while the ships are registered in the name of thedefendant that this fact can not be considered as prejudicial tothe direct ownership of the plaintiff. That D. Francisco Martinez,the plaintiff, for himself and in representation of his wife, is theactual and true owner of said ships and has exercised over themacts of ownership and dominion."

There is not conflict in the findings, for, as stated by the lower

court, the ship may be registered in the name of the defendantand still be owned by the plaintiff. But, if any such conflict exists,then the finding of the ultimate fact that the ownership is withthe plaintiff.

When the ultimate fact is found no finding of probative factswhich may tend to establish that the ultimate fact was foundagainst the evidence can overcome the finding of the ultimatefact. (Smith vs. Acker, 52 Cal., 217; Perry vs. Quackenbush, 105Cal., 299; Smith vs. Jones, 131 Ind.)

Not only is the ultimate fact of ownership which is the paramountfinding in the case allowed to be overthrown by the lessimportant and subsidiary finding of the evidentiary fact ofregistration of the ship, but the opinion wholly ignores the otherfinding of the probative fact, that is, that the plaintiff hasexercised acts of ownership and dominion over the property andthat the ships were purchased with funds furnished by him.

II.It is said in the opinion in referring to a letter written by thedefendant to the plaintiff that this letter is not incorporated in thefindings and we have no right to consider it, yet the court in itsdecision has gone into an examination of the evidence thusimproperly brought here.

This ambiguity in the opinion makes it necessary to refer briefly tothe evidence. Such review will show that the evidence before thelower court was entirely sufficient to support the finding ofownership in the plaintiff. It consists of letters written to theplaintiff by his agents, Armstrong & Sloan, who acted for him inthe purchase of the ship Balayan; the testimony of the plaintiff as

to his purchase an payment of the price of the ship; proof ofwitnesses of the acts of ownership on the part of the plaintiffafter the purchase of the ships by him; that the defendant residedwith the plaintiff, who was his father, and that the defendant hadno means with which to make such purchase; various acts of thedefendant recognizing the plaintiff's ownership in the vessel;evidence introduced on the part of the plaintiff tending to showhis ownership and tending to show that the defendant actedsimply as plaintiff's agent in the control which he exercised overthe ship.

In one of the letters written by Armstrong & Sloan to the plaintiffdated August 22, 1892, they say:

"We have credited to your account $18,843.65 which you leftbefore your departure for the cost of the ship bought for you inHongkong." Also the book entries in the mercantile office ofArmstrong & Sloan, in which appear the following:

Cash, August, 1892.

Aug. 24. Francisco Martinez, received from him account

of cost of one launch in Hongkong$18,843.65

Cash, September, 1892.

Sept. 13. Francisco Martinez to Chartered Bank, remittance to

Hongkong accounts of steam launch, $18,300 at 3/4 per

cent discount16,881.75

Cost of message3.23

_______

TOTAL$16,884.98

Another letter is evidence from the same parties to the plaintiffdated October 13, 1892, in which they say that they hadtelegraphed the day before to Hongkong for the ship to sail "andwe have written that the name Balayan be given it."

Several other letters were introduced written by the same partiesto the plaintiff concerning the ship Balayan, in which they say thedeal was closed and by which they make arrangements forincidental expenses in the equipment of ship, insurance upon it,and its sailing from Hongkong to Manila.

A letter is also contained in the record written by the defendantto the plaintiff on the 27th of October, 1899, which is as follows:

"Manila, October 27, 1899. Esteemed Father: With my kindestregards (beso a V. la mano). With respect to the steamshipBalayan, Seor Sloan sends word to you that there is an Americanwho wishes to purchase it for 24,000 pesos, and asks whether youdesire to sell it or not that you reply because he awaits youranswer . . ."

It also appears in evidence that the ship Balayan had the initials ofthe plaintiff "F. M." on the smokestack, and that at some recentdate the defendant had caused these initials to be erased andthose of his own substituted.

The defendant for a number of years managed the plaintiff'sbusiness under a general power of attorney, and was a memberof his family, and such acts of ownership as he exercised overthese ships may be properly referred to this authority.

When the relationship of the parties that is, that of son andfather is considered in connection with other proof in the case,the conclusion is irresistible that the ships are owned by theplaintiff and that there has been a most flagrant abuse on the partof the defendant of a father's confidence.

For the reason above stated I dissent from the decision.

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EN BANC

[G.R. No. 1299. November 16, 1903.]

VICENTE PEREZ, plaintiff-appellee, vs. EUGENIO POMAR, Agent ofthe Compania-General de Tabacos, defendant-appellant.

Francisco Dominguez for appellant.

Ledesma, Sumulong & Quintos for appellee.

SYLLABUS

1.CONTRACTS; CONSENT. Contracts resulting from an impliedconsent of the parties are valid and enforceable.

2.ID.; ID.; HIRING. Where one has rendered services to another,and these services are accepted by the latter, in the absence ofproof that the service was rendered gratuitously, an obligationresults to pay the reasonable worth of the services rendered uponthe implied contract of hiring.

3.ID.; ID.; ID. Although no fixed amount may have beendetermined as the consideration for the contract of hiring, thecontract is nevertheless valid if the amount of the impliedcompensation can be determined by custom or frequent use inthe place where the services were rendered.

D E C I S I O N

TORRES, J p:

In a decision dated February 9, 1903, the judge of the SixthJudicial District, deciding a case brought by the plaintiff againstthe defendant for the recovery of wages due and unpaid, gave judgment against the latter for the sum of $600 and the costs ofsuit, less the sum of $50, Mexican.

On August 27, 1902, Don Vicente Perez filed in the Court of FirstInstance of Laguna a complaint, which was amended on the 17thof January of this year, asking that the court determine theamount due the plaintiff, at the customary rate of compensationfor interpreting in these Islands, for services rendered theTabacalera Company, and that, in view of the circumstances ofthe case, judgment be rendered in his favor for such sum. Thecomplaint also asked that the defendant be condemned to thepayment of damages in the sum of $3,200, gold, together with thecosts of suit. In this complaint it was alleged that Don EugenioPomar, as general agent of the Compania General de Tabacos inthe said province, verbally requested the plaintiff on the 8th ofDecember, 1901, to act as interpreter between himself and themilitary authorities, that after the date mentioned the plaintiffcontinued to render such services up to and including May 31,1902; that he had accompanied the defendant, Pomar during thattime at conferences between the latter and the colonelcommanding the local garrison, and with various officers anddoctors residing in the capital, and at conferences with CaptainLemen in the town of Pilar, and with the major in command at thetown of Pagsanjan, concerning the shipment of goods fromManila, and with respect to goods shipped from the towns ofSanta Cruz, Pilar, and Pagsanjan to this city; that the plaintiffduring this period of time was at the disposal of the defendant,Pomar, and held himself in readiness to render services wheneverrequired; that on this account his private business, and especiallya soap factory established in the capital, was entirely abandoned;that to the end that such services might be punctually rendered,the agent, Pomar, assured him that the Tabacalera Companyalways generously repaid services rendered it, and that hetherefore did not trouble himself about his inability to devote the

necessary amount of time to his business, the defendant going sofar as to make him flattering promises of employment with thecompany, which he did not accept; that these statements weremade in the absence of witnesses and that therefore his onlyproof as to the same was Mr. Pomar's word as a gentleman; thatthe employees of the company did not understand English, and byreason of the plaintiff's mediation between the agent and themilitary authorities large profits were obtained, as would appearfrom the account and letterpress books of the agencycorresponding to those dates. In the amended complaint it wasadded that the defendant, on behalf of the company, offered to

remunerate the plaintiff for the services rendered in the mostadvantageous manner in which such services are compensated, inview of the circumstances under which they were requested; andthat the plaintiff, by rendering the company such services, wasobliged to abandon his own business, the manufacture of soap,and thereby suffered damages in the sum of $3,200, United Statescurrency.

The defendant, on the 25th of September, 1902, filed an answerasking for the dismissal of the complaint, with costs to theplaintiff. In his answer the defendant denied the allegation in thefirst paragraph of the complaint, stating that it was wholly untruethat the company, and the defendant as its agent, had solicitedthe services of the plaintiff as interpreter before the militaryauthorities for the period stated, or for any other period, or thatthe plaintiff had accompanied Pomar at the conferencesmentioned, concerning shipments from Manila and exports fromsome of the towns of the province to this capital. He stated thathe especially denied paragraph 2 of the complaint, as it wasabsolutely untrue that the plaintiff had been at the disposal of thedefendant for the purpose of rendering such services; that hetherefore had not been obliged to abandon his occupation or hissoap factory, and that the statement that an offer of employment

with the company had been made to him was false. Thedefendant also denied that through the mediation of the plaintiffthe company and himself had obtained large profits. Thestatements in paragraphs 6, 7, 8, and 9 of the complaint were alsodenied. The defendant stated that, on account of the friendlyrelations which sprang up between the plaintiff and himself, theformer borrowed from him from time to time money amountingto $175 for the purposes of his business, and that he had alsodelivered to the plaintiff 36 arrobas of oil worth $106, and threepackages of resin for use in coloring his soap; that the plaintiffaccompanied the defendant to Pagsanjan, Pilar, and other townswhen the latter made business trips to them for the purpose ofextending his business and mercantile relations therein; that onthese excursions, as well as on private and official visits which hehad to make, the plaintiff occasionally accompanied him throughmotives of friendship, and especially because of the free

transportation given him, and not on behalf of the company ofwhich he was never interpreter and for which he rendered noservices; that the plaintiff in these conferences acted asinterpreter of his own free will, without being requested to do soby the defendant and without any offer of payment orcompensation; that therefore there existed no legal relationwhatever between the company and the plaintiff, and that thedefendant, when accepting the spontaneous voluntary, andofficious services of the plaintiff, did so in his private capacity andnot as agent of the company, and that it was for this reason thathe refused to enter into negotiations with the plaintiff, he being inno way indebted to the latter. The defendant concluded by sayingthat he answered in his individual capacity.

A complaint having been filed against the Compania General deTabacos and Don Eugenio Polmar, its agent in the Province ofLaguna, the latter, having been duly summoned, replied to thecomplaint, which was subsequently amended, and stated that hemade such reply in his individual capacity and not as agent of thecompany, with which the plaintiff had no legal relations. The suitwas instituted between the plaintiff and Pomar, who, as such,accepted the issue and entered into the controversy withoutobjection, opposed the claim of the plaintiff, and concluded byasking that the complaint be dismissed, with the costs to theplaintiff. Under these circumstances and construing the statutesliberally, we think it proper to decide the case pending betweenboth parties in accordance with law and the strict principles of justice.

From the oral testimony introduced at the trial, it appears thatthe plaintiff, Perez, did on various occasions render Don Eugenio

Pomar services as interpreter of English; and that he obtainedpasses and accompanied the defendant upon his journeys tosome of the towns in the Province of Laguna. It does not appearfrom the evidence, however, that the plaintiff was constantly atthe disposal of the defendant during the period of six months orthat he rendered services as such interpreter continuously anddaily during that period of time.

It does not appear that any written contract was entered intobetween the parties for the employment of the plaintiff asinterpreter, or that any other innominate contract was entered

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into; but whether the plaintiff's services were solicited or whetherthey were offered to the defendant for his assistance, inasmuchas these services were accepted and made use of by the latter, wemust consider that there was a tacit and mutual consent as to therendition of the services. This gives rise to the obligation upon theperson benefited by the services to make compensation therefor,since the bilateral obligation to render service as interpreter, onthe one hand, and on the other to pay for the services rendered,is thereby incurred. (Arts. 1088, 1089, and 1262 of the Civil Code).The supreme court of Spain in its decision of February 12, 1889,holds, among other things, "that not only is there an express andtacit consent which produces real contracts but there is also apresumptive consent which is the basis of quasi contracts, thisgiving rise to the multiple juridical relations which result inobligations for the delivery of a thing or the rendition of aservice."

Notwithstanding the denial of the defendant, it is unquestionablethat it was with his consent that the plaintiff rendered him-services as interpreter, thus aiding him at a time when, owing tothe existence of an insurrection in the province, the mostdisturbed conditions prevailed. It follows, hence, that there wasconsent on the part of both in the rendition of such services as

interpreter. Such service not being contrary to law or to goodcustom, it was a perfectly licit object of contract, and such acontract must necessarily have existed between the parties, asalleged by the plaintiff. (Art. 1271, Civil Code.)

The consideration for the contract is also evident, it being clearthat a mutual benefit was derived in consequence of the servicerendered. It is to be supposed that the defendant accepted theseservices and that the plaintiff in turn rendered them with theexpectation that the benefit would be reciprocal. This shows theconcurrence of the three elements necessary under article 1261of the Civil Code to constitute a contract of lease of service, orother innominate contract, from which an obligation has arisenand whose fulfillment is now demanded.

Article 1254 of the Civil Code provides that a contract exists themoment that one or more persons consent to be bound. Withrespect to another or others, to deliver some thing or to rendersome service. Article 1255 provides that the contracting partiesmay establish such covenants, terms, and conditions as theydeem convenient, provided they are not contrary to law, morals,or public policy. Whether the service was solicited or offered, thefact remains that Perez rendered to Pomar services as interpreter.As it does not appear that he did this gratuitously, the duty isimposed upon the defendant, he having accepted the benefit ofthe service, to pay a just compensation therefor, by virtue of theinnominate contract of facio ut des implicitly established.

The obligations arising from this contract are reciprocal, and,apart from the general provisions with respect to contracts andobligations, the special provisions concerning contracts for leaseof services are applicable by analogy.

In this special contract, as determined by article 1544 of the CivilCode, one of the parties undertakes to render the other a servicefor a price certain. The tacit agreement and consent of bothparties with respect to the service rendered by the plaintiff, andthe reciprocal benefits accruing to each, are the best evidence ofthe fact that there was an implied contract sufficient to create alegal bond, from which arose enforceable rights and obligations ofa bilateral character.

In contracts the will of the contracting parties is law, this being alegal doctrine based upon the provisions of articles 1254, 1258,

1262, 1278, 1281, 1282, and 1289 of the Civil Code. If it is a factsufficiently proven that the defendant, Pomar, on variousoccasions consented to accept an interpreter's services, renderedin his behalf and not gratuitously, it is but just that he should paya reasonable remuneration therefor, because it is a well-knownprinciple of law that no one should be permitted to enrich himselfto the damage of another.

With respect to the value of the services rendered on differentoccasions, the most important of which was the first, as it doesnot appear that any salary was fixed upon by the parties at the

time the services were accepted, it devolves upon the court todetermine, upon the evidence presented, the value of suchservices, taking into consideration the few occasions on whichthey were rendered. The fact that no fixed or determinedconsideration for the rendition of the services was agreed upondoes not necessarily involve a violation of the provisions of article1544 of the Civil Code, because at the time of the agreement thisconsideration was capable of being made certain. Thediscretionary power of the court, conferred upon it by the law, isalso supported by the decisions of the supreme court of Spain,among which may be cited that of October 18, 1899, which holdsas follows: "That as stated in the article of the Code cited, whichfollows the provisions of law 1 title 8, of the fifth partida, thecontract for lease of services is one in which one of the partiesundertakes to make some thing or to render some service to theother for a certain price, the existence of such a price beingunderstood, as this court has held not only when the price hasbeen expressly agreed upon but also when it may be determinedby the custom and frequent use of the place in which suchservices were rendered."

No exception was taken to the judgment below by the plaintiff onaccount of the rejection of his claim for damages. The decision

upon this point is, furthermore, correct.

Upon the supposition that the recovery of the plaintiff should notexceed 200 Mexican pesos, owing to the inconsiderable numberof times he acted as interpreter, it is evident that the contractthus implicitly entered into was not required to be in writing andthat therefore it does not fall within article 1280 of the Civil Code;nor is it included within the provisions of section 335 of the Codeof Civil Procedure, as this innominate contract is not covered bythat section. The contract of lease of services is not included inany of the cases expressly designated by that section of theprocedural law, as affirmed by the appellant. The interpretation ofthe other articles of the Code alleged to have been infringed hasalso been stated fully in this opinion.

For the reasons stated, we are of the opinion that judgmentshould be rendered against Don Eugenio Pomar for the paymentto the plaintiff of the sum of 200 Mexican pesos, from which willbe deducted the sum of 50 pesos due the defendant by theplaintiff. No special declaration is made as to the costs of thisinstance. The judgment below is accordingly affirmed in so far asit agrees with this opinion, and reversed in so far as it may be inconflict therewith. Judgment will be entered accordingly twentydays after this decision is filed.

Arellano, C .J ., Willard and Mapa, JJ ., concur.

Separate Opinions

McDONOUGH, J ., with whom concurs COOPER, J ., dissenting:

I dissent from the opinion of the majority. In my opinion there isno legal evidence in the case from which the court may concludethat the recovery should be 200 Mexican pesos. I am therefore infavor of affirming the judgment.Johnson, J ., did not sit in this case.

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EN BANC

[G.R. No. L-29203. July 26, 1971.]

MARITIME COMPANY OF THE PHILIPPINES, plaintiff-appellant, vs.REPARATIONS COMMISSION or REPARATIONS MISSION,defendant-appellee.

Rafael Dinglasan for plaintiff-appellant.

Panfilo M. Manguera and Jober Ayura, for defendant-appellee.

SYLLABUS

1.CIVIL LAW; OBLIGATIONS AND CONTRACTS; AUTONOMY OFCONTRACTS; PARTIES CAN STIPULATE TERMS NOT CONTRARY TOLAW; LIMIT. It is to be recognized that a large degree ofautonomy is accorded contracting parties. Not that it isunfettered. They may, according to the Civil Code, "establish suchstipulations, clauses, terms and conditions as they may deemconvenient, provided they are not contrary to law, morals, goodcustoms, public order, or public policy."(Art. 1306) The law thus

sets limits. It is a fundamental requirement that the contractentered into must be in accordance with, and not repugnant to,an applicable statute. Its terms are embodied therein. Thecontracting parties need not repeat them. They do not even haveto be referred to. Every contract thus contains not only what hasbeen explicitly stipulated, but the statutory provisions that haveany bearing on the matter.

2.ID.; ID.; EXISTING LAW FORMS PART OF CONTRACT WITHOUTNEED OF EXPRESS REFERENCE. "(A)n existing law enters intoand forms part of a valid contract without the need for the partiesexpressly making reference to it. Only thus could its validityinsofar as some of its provisions are concerned be assured."(Lakas ng Manggagawang Makabayan (LMM) v. Abiera, L-29474,Dec. 19, 1970, 36 SCRA 437, 442) A fairly recent restatement ofthe principle, in the language of Justice J.B.L. Reyes, speaking for

the Court, appears in Liberation Steamship Co., Inc. v. Court ofIndustrial Relations. Thus: "The rule is that the law forms part of,and is read into, every contract, unless clearly excluded therefromin those cases where such exclusion is allowed . . ." (L-25389-90,June 27, 1968, 23 SCRA 1105)

3.ID.; ID.; ID.; CASE AT BAR. What is the law that forms part of,and is to be read into, the contract between plaintiff-appellantand defendant-appellee? It is, to repeat, Section 11 of RepublicAct No. 1789 as amended. More specifically: "The insurance,ocean freight and other expenses incident to importation shall bepaid by the end-user in accordance with usual business practices."The last sentence is equally plain: "Nothing herein shall beconstrued as exempting the end-user from paying in full all thenecessary costs, charges and expenses incident to the applicationfor and the procurement, production, delivery and acquisition, of,the goods concerned." The above provisions, then, form part ofand must be read into the shipping contracts between plaintiff-appellant and defendant-appellee, unless they could be "clearlyexcluded therefrom," assuming "such exclusion is allowed."

4.STATUTORY CONSTRUCTION; CONSTRUCTION NOT REQUIREDWHERE STATUTORY PROVISION IS FREE FROM AMBIGUITY. Thisis one of those cases where a statutory provision free from anyambiguity, quite specific and definite, calls for application. Undersuch circumstances, there is not even any need for construction.The task of the judiciary is clear. It must consider the law ascontrolling. This is what the lower court did. Certainly, no errorcould justly be imputed to it.

5.REMEDIAL LAW; EVIDENCE; FINDINGS OF FACT OF THE TRIAL

COURT, GENERALLY UPHELD ON APPEAL. Clearly, then, thisassignment of error is lacking in merit. Plaintiff-appellant, it mustbe stressed, cannot possibly be unaware of the controlling legalprovisions, considering that it has been itself the beneficiary ofthe Reparation Act, not to mention the fact that it has previouslycollected from end-users. Such was a finding of the lower court,which we are not at liberty to disturb, the appeal being purely onquestions of law.

D E C I S I O N

FERNANDO, J p:

Decisive of the crucial issue posed by this appeal from a decisionof the lower court is the applicability of the well-settled principlethat a statute should be considered as entering into and formingpart of a contract. Plaintiff Maritime Company of the Philippines,now appellant, would deny that it is controlling in its suit to holddefendant Reparations Commission, now appellee, liable for thefreight charges as the consignee of reparations goods,notwithstanding that under Section 11 of the Reparations Act, 1ocean freight and other expenses incident to importation shall bepaid by the end-user and not by such agency. That defendant isexempt from such obligation is further stressed by the concludingsentence thereof: "Nothing herein shall be construed asexempting the end-user from playing in full all the necessarycosts, charges and expenses incident to the application for andthe procurement, production, delivery and acquisition, of, thegoods concerned." It could not have been entirely unexpectedtherefore for the lower court to reach the conclusion that it hadno choice on the matter in view of the explicit character of suchstatutory language which must be read into the contract ofshipment. So it held in dismissing plaintiff's complaint for therecovery of freight charges. As such decision is not vitiated by any

infirmity, we affirm.

In plaintiff's complaint of July 29, 1965, after setting forth itscorporate character as well as that of the defendant ReparationsCommission, which is vested by law with the power to enter intocontracts and to sue and be sued, it alleged that shipments ofreparations goods were loaded in three of its vessels consigned todefendant, with corresponding freight charges amounting toP228,250.58. 2 Then came the allegation that said vessels arrivedin Manila and discharged all such shipment of reparations goods,which were duly delivered to and received by defendant asconsignee in good order and condition, but defendant failed andrefused to pay, notwithstanding repeated demands, the totalamount of the freight charges above-mentioned. 3 There was aclaim for attorney's fees in the amount of P20,000.00, plaintiff,according to the complaint, being compelled to engage counsel. 4

The prayer was for a judgment against defendant in favor ofplaintiff in the aforesaid sum of P228,250.58 as freight chargesplus 6% interest thereon from the date of the filing of thecomplaint until fully paid, and the sum of P20,000.00 by way ofattorney's fees.

There was no denial in the answer of defendant filed onSeptember 10, 1965 of the facts as alleged, but Section 11 of theReparations Act was invoked to show that it was not liable at allfor the freight charges, a matter which, according to defendant,was fully known to plaintiff as it had in several instances collectedfreight charges from the end-users concerned. 5 In its specialaffirmative defenses, defendant contended that plaintiff's claimwas barred by a prior judgment under the principle of resadjudicata and that "as a carrier of reparations goods, [it] is noton]y presumed to know the law but is chargeable with knowledgeof that law, and when it thus entered into a contract of carriage oraffreightment of reparations goods, it rendered itself bound bythe pertinent provision of Section 11 of the Reparations Law . . .on the question of who is liable for said freight charges; that as amatter of fact, plaintiff in its prior dealings with the defendant onthis matter had so recognized and accepted the set-up asenvisioned by Section 11 of the Reparations Law." 6 Its prayer wasfor the dismissal of the complaint with costs against plaintiff.

As noted, defendant's contention was sustained by the lowercourt in its decision of March 29, 1968 dismissing the complaint.After referring to the language of Section 11 of the ReparationsAct, mentioned at the opening of this opinion, it reached theabove conclusion, there being "no doubt on the interpretation asto who will pay for the freight charges." 7 It was likewise set forth

therein that plaintiff in fact had been collecting freight chargesfrom end-users and turning over a portion thereof, at least 50%,to defendant to pay its outstanding obligations, plaintiff havingpurchased several vessels through the Reparations Commissionpayable on installments. 8 There was no question then, to itsmind, that plaintiff, considering such conduct, had no right todemand the payment of freight charges from defendant. 9

From the above decision, an appeal was taken to this Court onApril 26, 1968. The brief for plaintiff-appellant was filed onSeptember 7 of the same year. Defendant-appellee Reparations

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Commission, in turn submitted its brief on October 7, 1968. Therewas no reply brief on the part of the appellant. Notwithstandingthe vigorous presentation of the alleged errors imputed to thelower court, there is no legal justification, as was alreadyindicated, for a reversal.

1.It is to be recognized that a large degree of autonomy isaccorded contracting parties. Not that it is unfettered. They may,according to the Civil Code, 10 "establish such stipulations,clauses, terms and conditions as they may deem convenient,provided they are not contrary to law, morals, good customs,public order, or public policy." The law thus sets limits. It is afundamental requirement that the contract entered into must bein accordance with, and not repugnant to, an applicable statute.Its terms are embodied therein. The contracting parties need notrepeat them. They do not even have to be referred to. Everycontract thus contains not only what has been explicitlystipulated, but the statutory provisions that have any bearing onthe matter. So it has been invariably held from United States v.Constantino, 11 a 1919 decision, to Lakas Ng ManggagawangMakabayan (LMM) v. Abiera, 2 promulgated only a year ago. 13According to Justice Malcolm, speaking for the Court in theformer: "It is an elementary rule of contracts that the laws, in

force at the time the contract was made, enter into and governit." 14 This is how the matter is put in the Latest decision: "Theprinciple is thus well-settled that an existing law enters into andforms part of a valid contract without the need for the partiesexpressly making reference to it. Only thus could its validityinsofar as some of its provisions are concerned are assured." 15

A fairly recent restatement of the principle, in the language ofJustice J.B.L. Reyes, speaking for the Court, appears in LiberationSteamship Co., Inc. vs. Court of Industrial Relations. 16 Thus: "Therule is that the law forms part of, and is read into, every contract,unless clearly excluded therefrom in those cases where suchexclusion is allowed . . ." 17 What is the law that forms part of,and is to be read into, the contract between plaintiff-appellant

and defendant-appellee? It is, to repeat, Section 11 of RepublicAct No. 1789 as amended. 18 More specifically: "The insurance,ocean freight and other expenses incident to importation shall bepaid by the end-user in accordance with usual business practice."The last sentence is equally plain: "Nothing herein shall beconstrued as exempting the end-user from paying in full all thenecessary costs, charges and expenses incident to the applicationfor and the procurement, production, delivery and acquisition, of,the goods concerned." The above provisions, then, form part ofand must be read into the shipping contracts between plaintiff-appellant and defendant appellee, unless they could be "clearlyexcluded therefrom", assuming "such exclusion is allowed."

There is thus no persuasive force to the first error imputed to thelower court for their being applied to the contractual relationshipbetween the parties. There is no showing that the shippingcontracts between them are clearly excluded from the law, muchless that such exclusion could be allowed. The lower court had nochoice then. It yielded obedience to the law. What it did certainlycannot be stigmatized as error.

It is in that sense that reliance by plaintiff-appellant on the forceand effect to be given the usual contracts between shipper andcarriers, while finding support in the applicable provisions both ofthe Civil Code and the Code of Commerce, is far from persuasive.As was pointed out in the equally forceful brief of defendant-appellee, to so view the matter is to ignore what has beenexplicitly set forth in Section 11 of the Reparations Act which iscontrolling.

Nor did the attempt by plaintiff-appellant to invoke equitable

considerations strengthen an inherently weak case. It assertedthat defendant-appellee was in a better position to collect thefreight charges. This is the answer of the latter: "Contrary toappellant's contention, it is itself and not the appellee which is ina better position to collect the corresponding ocean freight. This isbecause under the Reparations Law and established reparationsset-up, the incidental charges to reparations importations,including freight charges are to be paid by the end-user to theparty concerned upon the arrival but before delivery of the goodsto the end-user, and 'in accordance with usual business practices.'( Sect. 11 R.A. 1789, as amended) Under this concept, before the

carrier issues the 'Permit to deliver' the shipments, it couldrightfully demand payment as a settlement of the freight charges.This is the stage more appropriate and commands a better facilityin so far as the collection of the freight charges is concerned, andnot after the goods shall have been released to the end-user bythe carrier and the corresponding contract of ConditionalPurchase and Sale executed by and between the Commission andthe End-user concerned." 19 It cannot be said then that plaintiff-appellant's effort to thus collect would be futile. Moreover, thereis always the remedy of a court action. Both in the answer ofdefendant-appellee 20 as well as in its brief, 21 reference wasmade to such a suit actually being filed by plaintiff-appellantagainst a reparations end-user, C. G. Nazario and Sons, Inc. as wellas the Reparations Commission as far back as 1961. 22 It wastherein decided that defendant-appellee was not liable for thefreight charges, such obligation being incumbent on its co-defendant C. G. Nazario and Sons, Inc., the end-user.

At bottom then, this is one of those cases where a statutoryprovision free from any ambiguity, quite specific and definite, callsfor application. Under such circumstances, there is not even anyneed for construction. The task of the judiciary is clear. 23 It mustconsider the law as controlling. This is what the lower court did.

Certainly, no error could justly be imputed to it.

2.Nor is the second assignment of error deserving of a better fate.Plaintiff-appellant would find fault with the holding of the lowercourt that its having collected the freight charges on certainoccasions from the end-users of reparations goods and applyingportions thereof to the payment of its obligation to defendant-appellee for the purchase of several vessels indicated it had noright to demand payment thereof from the latter. On this point,the appealed decision reads: "The practice followed by theplaintiff in its dealings with the defendant establishes the fact thatthe plaintiff has been collecting the freight charges from the end-users and turning over a portion thereof (at least 50%) to the[defendant] in payment of the outstanding obligation of theplaintiff to the defendant, the plaintiff having purchased severalvessels thru the Reparations Commission and paying the latter by

installments . . . There is, therefore, no question that as far as theplaintiff in its relation with the defendant is concerned, saidplaintiff has been collecting from the end-users the freightcharges of reparations goods from the end-users and, therefore, ithas no right to demand the same from the defendant." 24 On theface thereof, the imputation of error would be hard to justify. Theconclusion reached proceeds from an accurate appraisal ofplaintiff-appellant's conduct. Nor is it without support in theevidence.

So it was made manifest in defendant-appellee's brief in thesewords: "To exemplify and bolster the foregoing view, attention isrespectfully invited to the herein quoted contents of Exhs. 6, 7and 8 of defendant-appellee: From Exh. '6' which is a letter of theplaintiff-appellant to the defendant-appellee, dated August 7,1963 containing the manifestation of plaintiff to turn over to thedefendant 50% of freightage collected, we quote in part: 'Allowingsome time for the collection of freights from the various end-users, we expect to remit to the Reparations Commission anapproximate total of P60,000.00 within 60 days', (italics supplied)From Exh. '7' which is a letter dated October 3, 1963, of plaintiff-appellant to defendant-appellee we quote the following: 'As ofAugust 28, 1963, the only remaining past due account, on thisvessel was a delinquency interest of P4,600.46. On that date,however, we paid the Reparations Commission the sum ofP37,629.80 representing 50% of the freights on reparations cargo. . .' (Italics supplied) And per Exh. '8' which is also a letter ofplaintiff-appellant to defendant-appellee, dated Feb. 6, 1964, andwhich requests authority to load reparations cargoes on non-reparations vessels, there is manifested therein: 'We undertake toapply 10% of whatever freights collected on reparations cargo

loaded on the above vessels to the Reparations Commission forour reparations account with you.' (Italics supplied)" 25

All that plaintiff-appellant could say on the matter is thefollowing: "It is respectfully submitted, that even assumingarguendo only that on certain occasions plaintiff-appellant wouldcollect the freight charges from the end-users concerned;nevertheless, that practice does not at all affect the question ofwho is liable for the freight charges under the contracts ofcarriage, . . . Just because herein plaintiff-appellant would, oncertain occasions, collect the freight charges from the end-users

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by virtue of an understanding with the consignee or owner of saidreparations goods, it does not necessarily follow that under thesaid contracts of affreightment, the end-users are already liablefor said freight charges which are collectible and demandablethereunder only from the consignee thereof." 26 This attempt byplaintiff-appellant to erode its conduct of its legal significance isunavailing, considering that it is based on an assumption as todefendant-appellee being liable for the payment of the freightcharges, which, as had been made clear, is at war with the specificlanguage of the controlling statutory provision.

Clearly, then, this assignment of error is lacking in merit. Plaintiff-appellant, it must be stressed, cannot possibly be unaware of thecontrolling legal provisions, considering that it has been itself thebeneficiary of the Reparations Act, not to mention the fact that ithas previously collected from end-users. Such was a finding of thelower court, which we are not at liberty to disturb, the appealbeing purely on questions of law. As the last two errors allegedlycommitted by the lower court were based on plaintiff-appellant'sbasic premise as to the non-applicability of Section 11 of theReparations Act, no useful purpose would be served by anyfurther discussion. It suffices to state that the appealed decisioncan thus stand the vigorous attack launched against it.

3.One last word. This opinion deals with a shipping contractgoverned by specific provisions of the Reparations Act. Nothing inthe opinion is to be considered applicable to contracts of a similarnature where ordinarily what has been explicitly agreed upon inthe bill of lading is the measure of the respective rights andobligations of the parties.

WHEREFORE, the lower court decision of March 29, 1968 isaffirmed. With costs against plaintiff-appellant.

Concepcion, C.J., Reyes, J.B.L., Makalintal, Zaldivar, Teehankee,Barredo, Villamor and Makasiar, JJ., concur.

Dizon, J., is on leave.

Castro, J., did not take part.

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FIRST DIVISION

[G.R. No. 156437. March 1, 2004.]

NATIONAL HOUSING AUTHORITY, petitioner, vs. GRACE BAPTISTCHURCH and the COURT OF APPEALS, respondents.

D E C I S I O N

YNARES-SANTIAGO, J p:

This is a petition for review under Rule 45 of the Rules of Court,seeking to reverse the Decision of the Court of Appeals datedFebruary 26, 2001, 1 and its Resolution dated November 8, 2002,2 which modified the decision of the Regional Trial Court ofQuezon City, Branch 90, dated February 25, 1997. 3

On June 13, 1986, respondent Grace Baptist Church (hereinafter,the Church) wrote a letter to petitioner National HousingAuthority (NHA), manifesting its interest in acquiring Lots 4 and 17of the General Mariano Alvarez Resettlement Project in Cavite. 4In its letter-reply dated July 9, 1986, petitioner informedrespondent:

In reference to your request letter dated 13 June 1986, regardingyour application for Lots 4 and 17, Block C-3-CL, we are glad toinform you that your request was granted and you may now visitour Project Office at General Mariano Alvarez for processing ofyour application to purchase said lots.

We hereby advise you also that prior to approval of suchapplication and in accordance with our existing policies andguidelines, your other accounts with us shall be maintained ingood standing. 5

Respondent entered into possession of the lots and introducedimprovements thereon. 6

On February 22, 1991, the NHA's Board of Directors passed

Resolution No. 2126, approving the sale of the subject lots torespondent Church at the price of P700.00 per square meter, or atotal price of P430,500.00. 7 The Church was duly informed of thisResolution through a letter sent by the NHA. 8

On April 8, 1991, the Church tendered to the NHA a managerscheck in the amount of P55,350.00, purportedly in full payment ofthe subject properties. 9 The Church insisted that this was theprice quoted to them by the NHA Field Office, as shown by anunsigned piece of paper with a handwritten computationscribbled thereon. 10 Petitioner NHA returned the check, statingthat the amount was insufficient considering that the price of theproperties have changed. The Church made several demands onthe NHA to accept their tender of payment, but the latter refused.Thus, the Church instituted a complaint for specific performanceand damages against the NHA with the Regional Trial Court ofQuezon City, 11 where it was docketed as Civil Case No. Q-91-9148.

On February 25, 1997, the trial court rendered its decision, thedispositive portion of which reads:

WHEREFORE, premises considered, judgment is hereby renderedas follows:

1.Ordering the defendant to reimburse to the plaintiff the amountof P4,290.00 representing the overpayment made for Lots 1, 2, 3,18, 19 and 20;

2.Declaring that there was no perfected contract of sale withrespect to Lots 4 and 17 and ordering the plaintiff to return

possession of the property to the defendant and to pay the latterreasonable rental for the use of the property at P200.00 permonth computed from the time it took possession thereof untilfinally vacated. Costs against defendant.

SO ORDERED. 12

On appeal, the C ourt of Appeals, affirmed the trial courts findingthat there was indeed no contract of sale between the parties.However, petitioner was ordered to execute the sale of the lots toGrace Baptist Church at the price of P700.00 per square meter,

with 6% interest per annum from March 1991. The dispositiveportion of the Court of Appeals decision, dated February 26,2001, reads:

WHEREFORE, the appealed Decision is hereby AFFIRMED with theMODIFICATION that defendant-appellee NHA is hereby ordered tosell to plaintiff-appellant Grace Baptist Church Lots 4 and 17 at theprice of P700.00 per square meter, or a total cost P430,000.00with 6% interest per annum from March, 1991 until full paymentin cash.

SO ORDERED. 13

The appellate court ruled that the NHA's Resolution No. 2126,which earlier approved the sale of the subject lots to GraceBaptist Church at the price of P700.00 per square meter, has notbeen revoked at any time and was therefore still in effect. As aresult, the NHA was estopped from fixing a different price for thesubject properties. Considering further that the Church had beenoccupying the subject lots and even introduced improvementsthereon, the Court of Appeals ruled that, in the interest of equity,it should be allowed to purchase the subject properties. 14

Petitioner NHA filed a Motion for Reconsideration which wasdenied in a Resolution dated November 8, 2002. Hence, theinstant petition for review on the sole issue of: Can the NHA becompelled to sell the subject lots to Grace Baptist Church in theabsence of any perfected contract of sale between the parties?

Petitioner submits that the Court cannot compel it to sell thesubject property to Grace Baptist Church without violating itsfreedom to contract. 15 Moreover, it contends that equity shouldbe applied only in the absence of any law governing therelationship between the parties, and that the law on sales andthe law on contracts in general apply to the present case. 16

We find merit in p etitioners submission.

Petitioner NHA is not estopped from selling the subject lots at a

price equal to their fair market value, even if it failed to expresslyrevoke Resolution No. 2126. It is, after all, hornbook law that theprinciple of estoppel does not operate against the Governmentfor the act of its agents, 17 or, as in this case, their inaction.HTcDEa

On the application of equity, it appears that the crux of thecontroversy involves the characterization of equity in the contextof contract law. Preliminarily, we reiterate that this Court, whileaware of its equity jurisdiction, is first and foremost, a court oflaw. While equity might tilt on the side of one party, the samecannot be enforced so as to overrule positive provisions of law infavor of the other. 18 Thus, before we can pass upon thepropriety of an application of equitable principles in the case atbar, we must first determine whether or not positive provisions oflaw govern.

It is a fundamental rule that contracts, once perfected, bind bothcontracting parties, and obligations arising therefrom have theforce of law between the parties and should be complied w