Araneta Inc., vs. Phil. Sugar Estates, 20 SCRA 330.docx

7/25/2019 Araneta Inc., vs. Phil. Sugar Estates, 20 SCRA 330.docx

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G.R. No. L-22558 May 31, 1967

GREGORIO ARANETA, INC.,petitioner,

vs.

THE PHILIPPINE SUGAR ESTATES DEELOPMENT CO., LTD.,respondent.

Araneta and Araneta for petitioner.

Rosauro Alvarez and Ernani Cruz Pao for respondent.

RE!ES, ".#.L., J.:

Petition for certiorari to review a judgment of the Court of Appeals, in its CA-G.R. No.

282!-R, affirming with modifi"ation, an amendator# de"ision of the Court of $irst

%nstan"e of &anila, in its Civil Case No. '(')', entitled *Philippine +ugar states

evelopment Co., td., plaintiff, versus /. &. 0uason 1 Co., %n". and Gregorio Araneta,

%n"., defendants.*

As found # the Court of Appeals, the fa"ts of this "ase are3

/. &. 0uason 1 Co., %n". is the owner of a ig tra"t land situated in 4ue5on Cit#,

otherwise 6nown as the +ta. &esa 7eights +udivision, and "overed # a 0orrens title

in its name. n /ul# 28, 9!:), through Gregorio Araneta, %n"., it ;0uason 1 Co.< sold a

portion thereof with an area of ',)'. s=uare meters, more or less, for the sum of

P'),:9.)), to Philippine +ugar states evelopment Co., td. 0he parties stipulated,

among in the "ontra"t of pur"hase and sale with mortgage, that the u#er will >

?uild on the said par"el land the +to. omingo Chur"h and Convent

while the seller for its part will >

Constru"t streets on the N and N@ and +@ sides of the land herein sold so

that the latter will e a lo"6 surrounded # streets on all four sides and the

street on the N side shall e named *+to. omingo Avenue*

0he u#er, Philippine +ugar states evelopment Co., td., finished the "onstru"tion of

+to. omingo Chur"h and Convent, ut the seller, Gregorio Araneta, %n"., whi"h egan

"onstru"ting the streets, is unale to finish the "onstru"tion of the street in the Northeast

side named ;+to. omingo Avenue< e"ause a "ertain third-part#, # the name of

&anuel Aundo, who has een ph#si"all# o""up#ing a middle part thereof, refused to


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va"ate the same hen"e, on &a# B, 9!:8, Philippine +ugar states evelopment Co.,

t. filed its "omplaint against /. &. 0uason 1 Co., %n"., and instan"e, see6ing to "ompel

the latter to "ompl# with their oligation, as stipulated in the aove-mentioned deed of

sale, andor to pa# damages in the event the# failed or refused to perform said

oligation.

?oth defendants /. &. 0uason and Co. and Gregorio Araneta, %n". answered the

"omplaint, the latter parti"ularl# setting up the prin"ipal defense that the a"tion was

premature sin"e its oligation to "onstru"t the streets in =uestion was without a definite

period whi"h needs to he fiDed first # the "ourt in a proper suit for that purpose efore

a "omplaint for spe"ifi" performan"e will prosper.

0he issues having een joined, the lower "ourt pro"eeded with the trial, and upon its

termination, it dismissed plaintiffEs "omplaint ;in a de"ision dated &a# '9, 9!()


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%n said appellate "ourt, defendant-appellant Gregorio Araneta, %n". "ontended mainl#

that the relief granted, i.e., fiDing of a period, under the amendator# de"ision of /ul# 9(,

9!(), was not justified # the pleadings and not supported # the fa"ts sumitted at the

trial of the "ase in the "ourt elow and that the relief granted in effe"t allowed a "hange

of theor# after the sumission of the "ase for de"ision.

Ruling on the aove "ontention, the appellate "ourt de"lared that the fiDing of a period

was within the pleadings and that there was no true "hange of theor# after the

sumission of the "ase for de"ision sin"e defendant-appellant Gregorio Araneta, %n".

itself s=uarel# pla"ed said issue # alleging in paragraph B of the affirmative defenses

"ontained in its answer whi"h reads >

B. Fnder the eed of +ale with &ortgage of /ul# 28, 9!:), herein defendant has

a reasonale time within whi"h to "ompl# with its oligations to "onstru"t and

"omplete the streets on the N, N@ and +@ sides of the lot in =uestion that

under the "ir"umstan"es, said reasonale time has not elapsed

isposing of the other issues raised # appellant whi"h were ruled as not meritorious

and whi"h are not de"isive in the resolution of the legal issues posed in the instant

appeal efore us, said appellate "ourt rendered its de"ision dated e"emer 2B, 9!(',

the dispositive part of whi"h reads >

%N %@ @7R$, judgment affirmed and modified as a "onse=uen"e,

defendant is given two ;2< #ears from the date of finalit# of this de"ision to

"ompl# with the oligation to "onstru"t streets on the N, N@ and +@ sides ofthe land sold to plaintiff so that the same would e a lo"6 surrounded # streets

on all four sides.

Fnsu""essful in having the aove de"ision re"onsidered, defendant-appellant Gregorio

Araneta, %n". resorted to a petition for review # certiorari to this Court. @e gave it due

"ourse.

@e agree with the petitioner that the de"ision of the Court of Appeals, affirming that of

the Court of $irst %nstan"e is legall# untenale. 0he fiDing of a period # the "ourts

under Arti"le 99!B of the Civil Code of the Philippines is sought to e justified on theasis that petitioner ;defendant elow< pla"ed the asen"e of a period in issue #

pleading in its answer that the "ontra"t with respondent Philippine +ugar states

evelopment Co., td. gave petitioner Gregorio Araneta, %n". *reasonale time within

whi"h to "ompl# with its oligation to "onstru"t and "omplete the streets.* Neither of the


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"ourts elow seems to have noti"ed that, on the h#pothesis stated, what the answer put

in issue was not whether the "ourt should fiD the time of performan"e, ut whether or

not the parties agreed that the petitioner should have reasonale time to perform its part

of the argain. %f the "ontra"t so provided, then there was a period fiDed, a *reasonale

time* and all that the "ourt should have done was to determine if that reasonale time

had alread# elapsed when suit was filed if it had passed, then the "ourt should de"lare

that petitioner had rea"hed the "ontra"t, as averred in the "omplaint, and fiD the

resulting damages. n the other hand, if the reasonale time had not #et elapsed, the

"ourt perfor"e was ound to dismiss the a"tion for eing premature. ?ut in no "ase "an

it e logi"all# held that under the plea aove =uoted, the intervention of the "ourt to fiD

the period for performan"e was warranted, for Arti"le 99!B is pre"isel# predi"ated on the

asen"e of an# period fiDed # the parties.

ven on the assumption that the "ourt should have found that no reasonale time or no

period at all had een fiDed ;and the trial "ourtEs amended de"ision nowhere de"laredan# su"h fa"t< still, the "omplaint not having sought that the Court should set a period,

the "ourt "ould not pro"eed to do so unless the "omplaint in as first amended for the

original de"ision is "lear that the "omplaint pro"eeded on the theor# that the period for

performan"e had alread# elapsed, that the "ontra"t had een rea"hed and defendant

was alread# answerale in damages.

Granting, however, that it la# within the CourtEs power to fiD the period of performan"e,

still the amended de"ision is defe"tive in that no asis is stated to support the

"on"lusion that the period should e set at two #ears after finalit# of the judgment. 0he

list paragraph of Arti"le 99!B is "lear that the period "an not e set aritraril#. 0he laweDpressl# pres"ries that >

the Court shall determine su"h period as ma# under the "ir"umstan"es een

proal# "ontemplated # the parties.

All that the trial "ourtEs amended de"ision ;Re". on Appeal, p. 92< sa#s in this respe"t

is that *the proven fa"ts pre"isel# warrant the fiDing of su"h a period,* a statement

manifestl# insuffi"ient to eDplain how the two period given to petitioner herein was

arrived at.

%t must e re"alled that Arti"le 99!B of the Civil Code involves a two-step pro"ess. 0he

Court must first determine that *the oligation does not fiD a period* ;or that the period is

made to depend upon the will of the detor


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point settled, the Court must then pro"eed to the se"ond step, and de"ide what period

was *proal# "ontemplated b the parties* ;o., par. '

Documents

Araneta Inc., vs. Phil. Sugar Estates, 20 SCRA 330.docx