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1. Fua Cam Lu vs.

Yap, 74 Phil 287


G.R. No. L-48797 July 30, 1943
FUA CAM LU, plaintiff-appellee,
vs.
YAP FAUCO and YAP SINGCO, defendants-appellants.
Vicente J. Francisco for petitioner.
M.H. de Joya for respondents.
The plaintiff-appellee, Fua Cam Lu, obtained in civil case No. 42125 of the Court of First Instance of
Manila a judgment sentencing the defendants-appellants, Yap Fauco and Yap Singco, to pay P1,538.04
with legal interest and costs. By virtue of a writ of execution, a certain parcel of land belonging to the
appellants, assessed at P3,550 and situated in Donsol, Sorsogon was levied upon the provincial sheriff of
Sorsogon who, on November 15, 1933, made a notice, duly posted in three conspicuous places in the
municipalities of Donsol and Sorsogon and published in the Mamera Press, that said land would be sold at
public auction on December 12, 1933. On December 16, 1933, the appellants executed a mortgage in
favor of the appellee, wherein it was stipulated that their obligation under the judgment in civil case No.
41225 was reduced to P1,200 which was made payable in four installments of P300 during the period
commencing on February 8, 1934, and ending on August 8, 1935l that to secure the payment of the said
P1,200, a camarin belonging to the appellants and built on the above-mentioned land, was mortgaged to
the appellee; that in case the appellants defaulted in the payment of any of the installments, they would
pay ten per cent of the unpaid balance as attorney's fees. plus the costs of the action to be brought by the
appellee by reason of such default, and the further amount of P338, representing the discount conceded
to the appellants. As a result of the agreement thus reached by the parties, the sale of the land advertised
by the provincial sheriff did not take place. However, pursuant to an alias writ of execution issued by the
Court of First instance of manila in civil case No. 42125 on March 31, 1934, the provincial sheriff, without
publishing a new notice, sold said land at a public auction held on May 28, 1934, to the appellee for
P1,923.32. On June 13, 1935, the provincial sheriff executed a final deed in favor of the appellee. On
August 29, 1939, the appellee instituted the present action in the Court of First Instance of Sorsogon
against the appellants in view of their refusal to recognize appellee's title and to vacate the land. The
appellants relied on the legal defenses that their obligation under the judgment in civil case No. 42125
was novated by the mortgage executed by them in favor of the appellee and that the sheriffs sale was void
for lack of necessary publication. These contentions were overruled by the lower court which rendered
judgment declaring the appellee to be the owner of the land and ordering the appellants to deliver the
same to him, without special pronouncement as to costs. The appellants seek the reversal of this
judgment.
We concur in the theory that appellants liability under the judgment in civil case No. 42125 had been
extinguished by the settlement evidenced by the mortgage executed by them in favor of the appellee on
December 16, 1933. Although said mortgage did not expressly cancel the old obligation, this was
impliedly novated by reason of incompatibly resulting from the fact that, whereas the judgment was for
P1,538.04 payable at one time, did not provide for attorney's fees, and was not secured, the new
obligation is or P1,200 payable in installments, stipulated for attorney's fees, and is secured by a
mortgage. The appellee, however, argues that the later agreement merely extended the time of payment
and did not take away his concurrent right to have the judgment executed. This court not have been the
purpose for executive the mortgage, because it was therein recited that the appellants promised to pay
P1,200 to the appellee as a settlement of the judgment in civil case No. 42125 (en forma de transaccion de
la decision . . . en el asunto civil No. 42125). Said judgment cannot be said to have been settled, unless it
was extinguished.
Moreover, the sheriff's sale in favor of the appellee is void because no notice thereof was published other
than that which appeared in the Mamera Press regarding the sale to be held on December 12, 1933. Lack
of new publication is shown by appellee's own evidence and the issue, though not raised in the pleadings,
was thereby tried by implied consent of the parties, emphasized by the appellants in the memorandum
filed by them in the lower court and squarely threshed out in this Court by both the appellants and the
appellee. The latter had, besides, admitted that there was no new publication, and so much so that in his
brief he merely resorted to the argument that "section 460 of Act 190 authorized the sheriff to adjourn
any sale upon execution to any date agreed upon in writing by the parties . . . and does not require the
sheriff to publish anew the public sale which was adjourned." The appellee has correctly stated the law
but has failed to show that it supports his side, for it is not pretended that there was any written
agreement between the parties to adjourn the sale advertised for December 12, 1933, to May 28, 1934.
Neither may it be pretended that the sale in favor of the appellee was by virtue of a mere adjournment, it
appearing that it was made pursuant to an alias writ of execution. Appellee's admission has thus
destroyed the legal presumption that official duty was regularly performed.
The appealed judgment is, therefore, reversed and the defendants-appellants, who are hereby declared to
be the owners of the land in question are absolved from the complaint, with costs against the appellee. So
ordered.
Yulo, C.J., Ozaeta and Bocobo, JJ., concur.
2. Millar vs. CA, 38 SCRA 642
G.R. No. L-29981 April 30, 1971
EUSEBIO S. MILLAR, petitioner,
vs.
THE HON. COURT OF APPEALS and ANTONIO P. GABRIEL, respondents.
Fernandez Law Office and Millar and Esguerra for petitioner.
Francisco de la Fuente for respondents.

CASTRO, J.:
On February 11, 1956, Eusebio S. Millar (hereinafter referred to as the petitioner) obtained a favorable
judgment from the Court of First Instance of Manila, in civil case 27116, condemning Antonio P. Gabriel
(hereinafter referred to as the respondent) to pay him the sum of P1,746.98 with interest at 12% per
annum from the date of the filing of the complaint, the sum of P400 as attorney's fees, and the costs of
suit. From the said judgment, the respondent appealed to the Court of Appeals which, however, dismissed
the appeal on January 11, 1957.
Subsequently, on February 15, 1957, after remand by the Court of Appeals of the case, the petitioner
moved ex parte in the court of origin for the issuance of the corresponding writ of execution to enforce
the judgment. Acting upon the motion, the lower court issued the writ of execution applied for, on the
basis of which the sheriff of Manila seized the respondent's Willy's Ford jeep (with motor no. B-192297
and plate no. 7225, Manila, 1956).
The respondent, however, pleaded with the petitioner to release the jeep under an arrangement whereby
the respondent, to secure the payment of the judgement debt, agreed to mortgage the vehicle in favor of
the petitioner. The petitioner agreed to the arrangement; thus, the parties, on February 22, 1957,
executed a chattel mortgage on the jeep, stipulating, inter alia, that
This mortgage is given as security for the payment to the said EUSEBIO S. MILLAR,
mortgagee, of the judgment and other incidental expenses in Civil Case No. 27116 of the
Court of First Instance of Manila against Antonio P. Gabriel, MORTGAGOR, in the amount of
ONE THOUSAND SEVEN HUNDRED (P1,700.00) PESOS, Philippine currency, which
MORTGAGOR agrees to pay as follows:
March 31, 1957 EIGHT HUNDRED FIFTY (P850) PESOS;
April 30, 1957 EIGHT HUNDRED FIFTY (P850.00) PESOS.
Upon failure of the respondent to pay the first installment due on March 31, 1957, the petitioner obtained
an alias writ of execution. This writ which the sheriff served on the respondent only on May 30, 1957
after the lapse of the entire period stipulated in the chattel mortgage for the respondent to comply with
his obligation was returned unsatisfied.
So on July 17, 1957 and on various dates thereafter, the lower court, at the instance of the petitioner,
issued several alias writs, which writs the sheriff also returned unsatisfied. On September 20, 1961, the
petitioner obtained a fifth alias writ of execution. Pursuant to this last writ, the sheriff levied on certain
personal properties belonging to the respondent, and then scheduled them for execution sale.
However, on November 10, 1961, the respondent filed an urgent motion for the suspension of the
execution sale on the ground of payment of the judgment obligation. The lower court, on November 11,
1961, ordered the suspension of the execution sole to afford the respondent the opportunity to prove his
allegation of payment of the judgment debt, and set the matter for hearing on November 25, 1961. After
hearing, the lower court, on January 25, 1962, issued an order the dispositive portion of which reads:
IN VIEW WHEREOF, execution reiterated for P1,700.00 plus costs of execution.
The lower court ruled that novation had taken place, and that the parties had executed the chattel
mortgage only "to secure or get better security for the judgment.
The respondent duly appealed the aforesaid order to the Court of Appeals, which set aside the order of
execution in a decision rendered on October 17, 1968, holding that the subsequent agreement of the
parties impliedly novated the judgment obligation in civil case 27116.
The appellate court stated that the following circumstances sufficiently demonstrate the incompatibility
between the judgment debt and the obligation embodied in the deed of chattel mortgage, warranting a
conclusion of implied novation:
1. Whereas the judgment orders the respondent to pay the petitioner the sum of P1,746.98 with interest
at 12% per annum from the filing of the complaint, plus the amount of P400 and the costs of suit, the
deed of chattel mortgage limits the principal obligation of the respondent to P1,700;
2. Whereas the judgment mentions no specific mode of payment of the amount due to the petitioner, the
deed of chattel mortgage stipulates payment of the sum of P1,700 in two equal installments;
3. Whereas the judgment makes no mention of damages, the deed of chattel mortgage obligates the
respondent to pay liquidated damages in the amount of P300 in case of default on his part; and
4. Whereas the judgment debt was unsecured, the chattel mortgage, which may be foreclosed
extrajudicially in case of default, secured the obligation.
On November 26, 1968, the petitioner moved for reconsideration of the appellate court's decision, which
motion the Court of Appeals denied in its resolution of December 7, 1968. Hence, the present petition for
certiorari to review the decision of the Court of Appeals, seeking reversal of the appellate court's decision
and affirmance of the order of the lower court.
Resolution of the controversy posed by the petition at bar hinges entirely on a determination of whether
or not the subsequent agreement of the parties as embodied in the deed of chattel mortgage impliedly
novated the judgment obligation in civil case 27116. The Court of Appeals, in arriving at the conclusion
that implied novation has taken place, took into account the four circumstances heretofore already
adverted to as indicative of the incompatibility between the judgment debt and the principal obligation
under the deed of chattel mortgage.
1. Anent the first circumstance, the petitioner argues that this does not constitute a circumstance in
implying novation of the judgment debt, stating that in the interim from the time of the rendition of the
judgment in civil case 27116 to the time of the execution of the deed of chattel mortgage the
respondent made partial payments, necessarily resulting in the lesser sum stated in the deed of chattel
mortgage. He adds that on record appears the admission by both parties of the partial payments made
before the execution of the deed of chattel mortgage. The erroneous conclusion arrived at by the Court of
Appeals, the petitioner argues, creates the wrong impression that the execution of the deed of chattel
mortgage provided the consideration or the reason for the reduced judgment indebtedness.
Where the new obligation merely reiterates or ratifies the old obligation, although the former effects but
minor alterations or slight modifications with respect to the cause or object or conditions of he latter,
such changes do not effectuate any substantial incompatibility between the two obligations Only those
essential and principal changes introduced by the new obligation producing an alteration or modification
of the essence of the old obligation result in implied novation. In the case at bar, the mere reduction of the
amount due in no sense constitutes a sufficient indictum of incompatibility, especially in the light of (a)
the explanation by the petitioner that the reduced indebtedness was the result of the partial payments
made by the respondent before the execution of the chattel mortgage agreement and (b) the latter's
admissions bearing thereon.
At best, the deed of chattel mortgage simply specified exactly how much the respondent still owed the
petitioner by virtue of the judgment in civil case 27116. The parties apparently in their desire to avoid
any future confusion as to the amounts already paid and as to the sum still due, decoded to state with
specificity in the deed of chattel mortgage only the balance of the judgment debt properly collectible from
the respondent. All told, therefore, the first circumstance fails to satisfy the test of substantial and
complete incompatibility between the judgment debt an the pecuniary liability of the respondent under
the chattel mortgage agreement.
2. The petitioner also alleges that the third circumstance, considered by the Court of Appeals as indicative
of incompatibility, is directly contrary to the admissions of the respondent and is without any factual
basis. The appellate court pointed out that while the judgment made no mention of payment of damages,
the deed of chattel mortgage stipulated the payment of liquidated damages in the amount of P300 in case
of default on the part of the respondent.
However, the petitioner contends that the respondent himself in his brief filed with the Court of Appeals
admitted his obligation, under the deed of chattel mortgage, to pay the amount of P300 by way of
attorney's fees and not as liquidated damages. Similarly, the judgment makes mention of the payment of
the sum of P400 as attorney's fees and omits any reference to liquidated damages.
The discrepancy between the amount of P400 and tile sum of P300 fixed as attorney's fees in the
judgment and the deed of chattel mortgage, respectively, is explained by the petitioner, thus: the partial
payments made by the respondent before the execution of the chattel mortgage agreement were applied
in satisfaction of part of the judgment debt and of part of the attorney's fee fixed in the judgment, thereby
reducing both amounts.
At all events, in the absence of clear and convincing proof showing that the parties, in stipulating the
payment of P300 as attorney's fees in the deed of chattel mortgage, intended the same as an obligation
for the payment of liquidated damages in case of default on the part of the respondent, we find it difficult
to agree with the conclusion reached by the Court of Appeals.
3. As to the second and fourth circumstances relied upon by the Court of Appeals in holding that the
montage obligation superseded, through implied novation, the judgment debt, the petitioner points out
that the appellate court considered said circumstances in a way not in accordance with law or accepted
jurisprudence. The appellate court stated that while the judgment specified no mode for the payment of
the judgment debt, the deed of chattel mortgage provided for the payment of the amount fixed therein in
two equal installments.
On this point, we see no substantial incompatibility between the mortgage obligation and the judgment
liability of the respondent sufficient to justify a conclusion of implied novation. The stipulation for the
payment of the obligation under the terms of the deed of chattel mortgage serves only to provide an
express and specific method for its extinguishment payment in two equal installments. The chattel
mortgage simply gave the respondent a method and more time to enable him to fully satisfy the judgment
indebtedness.
1
The chattel mortgage agreement in no manner introduced any substantial modification or
alteration of the judgment. Instead of extinguishing the obligation of the respondent arising from the
judgment, the deed of chattel mortgage expressly ratified and confirmed the existence of the same,
amplifying only the mode and period for compliance by the respondent.
The Court of Appeals also considered the terms of the deed of chattel mortgage incompatible with the
judgment because the chattel mortgage secured the obligation under the deed, whereas the obligation
under the judgment was unsecured. The petitioner argues that the deed of chattel agreement clearly
shows that the parties agreed upon the chattel mortgage solely to secure, not the payment of the reduced
amount as fixed in the aforesaid deed, but the payment of the judgment obligation and other incidental
expenses in civil case 27116.
The unmistakable terms of the deed of chattel mortgage reveal that the parties constituted the chattel
mortgage purposely to secure the satisfaction of the then existing liability of the respondent arising from
the judgment against him in civil case 27116. As a security for the payment of the judgment obligation,
the chattel mortgage agreement effectuated no substantial alteration in the liability of the respondent.
The defense of implied novation requires clear and convincing proof of complete incompatibility between
the two obligations.
2
The law requires no specific form for an effective novation by implication. The test
is whether the two obligations can stand together. If they cannot, incompatibility arises, and the second
obligation novates the first. If they can stand together, no incompatibility results and novation does not
take place.
We do not see any substantial incompatibility between the two obligations as to warrant a finding of an
implied novation. Nor do we find satisfactory proof showing that the parties, by explicit terms, intended
the full discharge of the respondent's liability under the judgment by the obligation assumed under the
terms of the deed of chattel mortgage so as to justify a finding of express novation.
ACCORDINGLY, the decision of the Court of Appeals of October 17, 1968 is set aside, and the order of the
Court of First Instance of Manila of January 25, 1962 is affirmed, at respondent Antonio Gabriel's cost.
3. Sandico vs. Piguing, 42 SCRA 322
G.R. No. L-26115 November 29, 1971
CARLOS SANDICO, SR., and TEOPISTO P. TIMBOL, petitioners,
vs.
THE HONORABLE MINERVA R. INOCENCIO PIGUING, Judge of the Court of First Instance of
Pampanga, and DESIDERIO PARAS, respondents.
Lorenzo G. Timbol for petitioners.
Abel de Ocera for respondent Desiderio Paras.

CASTRO, J.:
On April 16, 1960 the spouses Carlos Sandico and Enrica Timbol, and Teopisto P. Timbol, administrator
of the estate of the late Sixta Paras, obtained a judgment in their favor against Desiderio Paras
(hereinafter referred to as the respondent) in civil case 1554, an action for easement and damages in the
Court of First Instance of Pampanga. On appeal, the Court of Appeals affirmed and modified the judgment,
as follows:
IN VIEW WHEREOF, judgment affirmed and modified; as a consequence, defendant is
condemned to recognize the easement which is held binding as to him; he is sentenced to
pay plaintiffs the sums of P5,000.00 actual, and P500.00 exemplary damages, and P500.00
attorney's fees; plus costs in both instances.
1

Thereafter, upon remand to the court a quo of civil case 1554, the Sandicos and Timbol (hereinafter
referred to as the petitioners) moved for the issuance of a writ of execution to enforce the appellate
court's judgment which had acquired finality. Acting upon the motion, the court a quo issued a writ of
execution on July 22, 1964. This writ the provincial sheriff served upon the respondent on August 22,
1964.
Meanwhile the petitioners and the respondent reached a settlement, finally agreeing to the reduction of
the money judgment from P6,000 to P4,000. Thus, the respondent, on August 5, 1964, paid the
petitioners the sum of P3,000; he made another payment in the amount of P1,000 as evidenced by a
receipt issued by the petitioners' counsel. This receipt is hereunder reproduced in full:
P1,000.00
RECEIVED from Mr. Desiderio Paras the sum of ONE THOUSAND PESOS (P1,000.00),
Philippine Currency, in full satisfaction of the money judgment rendered against him in
Civil Case No. 1554 of the Court of First Instance of Pampanga, it being understood that the
portion of the final judgment rendered in the said case ordering him to reconstruct the
irrigation canal in question shall be complied with by him immediately.
City of Angeles, August 31, 1964.
(SGD.) DALMACIO P. TIMBOL
Counsel for Plaintiffs
in Civil Case No. 1554
I AGREE:
(SGD.) DESIDERIO PARAS
Subsequently, the petitioners sent the respondent a letter dated November 5, 1964 demanding
compliance by the latter with the portion of the judgment in civil case 1554 relative to the reconstruction
and reopening of the irrigation canal.
On February 12, 1965 the provincial sheriff returned the writ of execution issued on July 22, 1964
unsatisfied.
Upon failure and refusal of the respondent to rebuild and reopen the irrigation canal, the petitioners, on
March 3, 1965, filed with the court a quo, with Judge Minerva R. Inocencio Piguing (hereinafter referred
to as the respondent judge) presiding, a motion to declare the said private respondent in contempt of
court, pursuant to provisions of section 9, Rule 39 of the Rules of Court. Opposing the motion, the
respondent alleged recognition by him of the existence of the easement and compliance with the
appellate court's judgment, stating that he had dug a canal in its former place, measuring about one and-
a-half feet deep, for the petitioners' use.
On September 8, 1965 the respondent judge issued an order denying the petitioners' motion to declare
the respondents in contempt of court, ruling that.
... it appears from the dispositive part of the decision that the defendant was only ordered
to recognize the easement which is held binding as to him and to pay the plaintiffs the sums
P5,000.00 of actual, and P500.00 exemplary damages.
Apparently, it is clear from the dispositive part of the decision that there is nothing to show
that the defendant was ordered to reconstruct the canal.
On September 16, 1965 the petitioners moved for issuance of an alias writ of execution to enforce the
judgement of the Court of Appeals. This motion the respondent judge granted in an order dated
September 25, 1965. On November 3, 1965. the respondent moved to set aside the said alias writ,
alleging full satisfaction of the judgment per agreement of the parties when the petitioner received the
sum of P4,000 in August, 1964 as evidenced by the receipt dated August 31, 1964.
The respondent judge then issued an order dated November 11, 1965 directing the provincial sheriff to
suspend the execution of the alias writ until further orders. On February 3, 1966 the respondent judge
issued an order calling, and directing the quashal of the alias writ of execution. The respondent judge
stated in her order that the agreement of the parties "novated" the money judgment provided for in the
decision of the Court of Appeals, ruling that the said decision.
... which is sought now to be executed by this Court, has already been fully satisfied as to
the money judgment and nothing more is left to be executed from the aforesaid Decision as
it does not allege (aside from money judgment) any other condition except for the
defendants to recognize the easement therein.
With their subsequent motion for reconsideration denied by the respondent judge, the petitioners, on
May 27, 1966, filed with this Court the present petition
2
for certiorari seeking to set aside (1) the order of
the respondent judge dated September 8, 1965 denying their motion to declare the respondent in
contempt of court in civil case 1554, and (2) the orders of the respondent judge dated February 3, 1966
and March 30, 1966 granting the respondent's motion to set aside the alias writ of execution issued in the
same civil case, on the ground that the respondent judge acted in excess of jurisdiction or with grave
abuse of discretion.
Here tendered for resolution are the following issues:
(1) Whether the respondent judge correctly constructed the judgment of the Court of Appeals as not
requiring the respondent to reconstruct and reopen the irrigation canal, and consequently, whether the
said respondent judge acted in excess of jurisdiction or with grave abuse of discretion in denying the
petitioners' motion to declare the respondent in contempt of court for failing and refusing to comply with
the appellate court's judgment; and
(2) Whether the payment by the respondent to the petioners of the amount of P4,000 extinguished the
money judgment, and, consequently, whether the respondent judge acted in excess of jurisdiction or with
grave abuse of discretion in ordering the recall and quashal of the alias writ of execution.
1. Anent the first issue, the petitioners argue that although the dispositive portion of the appellate court's
judgment omitted any directive to the respondent to reconstruct and reopen the irrigation canal, the
Court of Appeals' order requiring recognition of the easement on the part of the said respondent suffices
to make him aware of his obligation under the judgment. The only way of recognizing the easement, the
petitioners continue, consists in performing positive act the reconstruction and restoration of the
irrigation canal to its former condition. Moreover, to understand the full intendment of the dispositive
portion of the judgment directing the respondent "to recognize the easement" necessitates reference to a
statement in the decision of the Court of Appeals that reads:
... the result of this must be to justify the conclusion prayed for by the plaintiffs that the
easement should be held to be existing and binding upon defendant and he should be held
to have acted without authority in closing the canal which should be ordered reopened.
On the other hand, the respondent alleges that there is no ambiguity in the phraseology of the portion of
the Court of Appeals' judgment condemning to recognize the easement. Said decision requires him only
to "recognize" the easement and in compliance therewith, he gives the petitioners permission to
reconstruct and reopen the irrigation canal themselves. Neither the decision a quo nor that of the
appellate court orders him to reconstruct and reopen the irrigation canal.
The agreement reached by the petitioners and the respondent in August, 1964 relative to the judgment of
the appellate court which had acquired finality and the interpretation by the parties themselves of the
said judgment, specifically its dispositive portion, as embodied in the receipt dated August 31, 1964,
constitute the considerations of prime importance in the resolution of the first question. No doubt exists
that the parties entered into the agreement, fully aware of the judgment of the appellate court ordering
the respondent to comply with two obligations, to wit, payment of a sum of money and recognition of the
easement. The receipt evidencing the agreement, aside from providing for the reduction of the money
judgment, provides for the reconstruction of the irrigation canal. Such constitutes the interpretation
accorded by the parties to that part of the dispositive portion of the appellate court's judgment
condemning the respondent to recognize the easement. This stipulation one wherein the respondent
clearly recognizes his obligation "to reconstruct the irrigation canal" embodied in precise and clear
terms in the receipt binds the said respondent, a signatory to the said receipt, and requires from him full
compliance. We thus fail to perceive any reason to sustain the contention of the respondent that he has
no obligation at all to reconstruct and reopen the irrigation canal, a position utterly inconsistent with his
agreement with the petitioners as embodied in the receipt dated August 31, 1964.
The record, however, shows that the respondent exerted efforts to reconstruct the portion of the
irrigation canal running through his land by digging a canal about one meter wide and about one-and-a-
half feet deep. This partial reconstruction of the irrigation canal the petitioners admit. Still, the
petitioners demand the reconstruction of the irrigation canal to its former condition measuring four
meters wide, five feet deep, and one-hundred and twenty-eight meters long contending that the rebuilt
canal serves no useful purpose because the water passing through it overflows, which overflow
ultimately causes the destruction of the canal itself. Nonetheless, we believe that need to give full force
and effect to the existence of the easement demands that the respondent reconstruct the irrigation canal
to its condition before he closed and destroyed the same. After all, the respondent himself in his answer
dated June 16, 1959 filed with the court a quo admitted the original dimensions of the irrigation canal as
four meters wide and one-hundred and twenty-eight meters long. The respondent's attempt, to rebuild
the irrigation canal, partially and not in conformity with the dimensions of the original one, does not
constitute satisfactory and substantial compliance with his obligation to recognize the easement per the
appellate court's judgment and to reconstruct the irrigation canal pursuant to his agreement with the
petitioners in August, 1964.
Due to the respondent's failure and refusal to reconstruct and reopen the irrigation canal, the petitioners
sought to declare him in contempt of court, under the provisions of section 9 of Rule 39 of the Rules of
Court. The respondent judge, however, believing that the appellate court's judgement required the
respondent merely to recognize the equipment without doing any positive act of reconstruction and
reopening of the irrigation canal, dismissed the petition motion to declare the respondent in contempt of
court. In doing so, the petitioners allege, the respondent judge acted in excess of jurisdiction or with
grave abuse of discretion. The petitioners thus ask us now to annul the order of the respondent judge
denying their motion to declared the respondent in contempt of court or, by way of native, to declare the
respondent in contempt of court and to punish him accordingly.
The petitioners predicate their stand mainly upon the provisions of section 9 of Rule 39 of the Rules of
Court. Said section reads:
Sec. 9. Writ of execution of special judgment. When judgment requires the performance of
any other act than the payment of money, or the sale or delivery of real or personal
property, a certified copy of the judgment shall be attached the writ of execution and shall
be served by the officer upon the party against whom the same is rendered, or upon any of
person required thereby, or by law, to obey the same, and party or person may be punished
forcontempt if he disobeys such judgment.
Section 9 applies to specific acts other than those cover by section 10 of the same rule. Section 10
pertinently provides:
See. 10. Judgment for an acts; vesting title. If a judgment directs a party to execute a
conveyance of land, or to deliver deeds or other documents, or to perform any other
specific act, and the party fails to comply within the time specified, the court may direct the
act to be done at the cost of disobedient party by some other person appointed by the court
and the act when so done shall have like effect as if done by the party. ...
Section 9 refers to a judgment directing the performance of a specific act which the said judgment
requires the party or person to personally do because of his personal qualifications and circumstances.
Section 10 refers to a judgment requiring the execution of a conveyance of land or the delivery of deeds
or other documents or the performance of any other specific act susceptible of execution by some other
person or in some other way provided by law with the same effect. Under section 10, the court may
designate some other person to do the act ordained to be done by the judgment, the reasonable cost of its
performance chargeable to the disobedient party. The act, when so done, shall have the same effect as if
performed by the party himself. In such an instance, the disobedient party incurs no liability for
contempt.
3
Under section 9, the court may resort to proceedings for contempt in order to enforce
obedience to a judgment which requires the personal performance of a specific act other than the
payment of money, or the sale or delivery of real or personal property.
An examination of the case at bar makes it apparent that the same falls within the contemplation of
section 10, and not of section 9 as the petitioners contend. The reconstruction and reopening of the
irrigation canal may be done by same other person designated by the court, at the cost of the respondent.
In fact, the respondent in his attempt to rebuild the irrigation canal, contracted the services of one
Gerardo Salenga. Accordingly, in conformity with the appellate court's judgment as further mutually
interpreted by the parties themselves, the court a quo, because of the failure and refusal of the
respondent to restore the irrigation canal to its former condition and to reopen it, should have appointed
some other person to do the reconstruction, charging the expenses therefor to the said respondent.
2. As to the second question, which relates to the money judgment, the petitioners vehemently insist on
their right to recover an additional sum of P2,000 the alleged unsatisfied portion of the appellate
court's judgement requiring the respondent to pay to the petitioners the total amount of P6,000
corresponding to damages and attorney's fees. The petitioners allege that their agreement with the
respondent in August, 1964, reducing the amount due from the respondent, constitutes neither waiver of
their claim for the sum of P2,000 nor novation of the money judgment provided for in the Court of
Appeals' decision. They state that their agreement with the respondent reduced the amount of the money
judgment, subject to the condition that the latter reconstruct and reopen the irrigation canal
immediately. This, they argue, does not constitute alteration of the appellate court's judgment.
For his part, the respondent contends that his payment of the sum of P4,000, received and acknowledged
by the petitioners through their counsel as "in full satisfaction of the money judgment" in civil case 1554,
extinguished his pecuniary liability. Thus, when the petitioners, notwithstanding the admitted payment
of the judgment debt in the lesser amount of P4,000, still sought to enforce the money judgment for the
full amount of P6,000 through an alias writ of execution, the court a quo, in recalling and quashing the
alias writ previously issued, acted correctly andwithin its authority.
Parenthetically, the petitioner's application for the issuance of the alias writ of execution dated
September 16, 1965, the alias writ of execution dated September 29, 1965, and the levy on execution and
the notice of sheriff's sale, both dated October 21, 1965, all refer to the amount of P6,000 and make no
mention whatsoever of the true status of the judgement debt. On this point the respondent charges the
petitioners with concealing from the court a quo the true amount, if any, still due from him. And in effect,
he alleges, the petitioners apparently seek the payment of the judgment debt twice. The petitioners,
however, emphasize that they demand payment of only the balance of P2,000. To rebut the respondents
charge of concealment, they state that they informed the court a quo that the respondent already paid
them the sum of P4,000. Furthermore, they allege that another lawyer, a former associate of their
counsel, prepared their motion for the issuance of the alias writ of execution, received the alias writ and
delivered the same to the sheriff. Impliedly, therefore, they attribute the inconsistency regarding the
amount still allegedly due from the respondent to the former associate of their counsel.
Reverting to the second question, the appellate court's judgment obliges the respondent to do two things:
(1) to recognize the easement, and (2) to pay the petitioners the sums of P5,000 actual and P500
exemplary damages and P500 attorney's fees, or a total of P6,000. The full satisfaction of the said
judgment requires specific performance and payment of a sum of money by the respondent.
We adjudge the respondent's judgment debt as having been fully satisfied. We see no valid objection to
the petitioners and the respondent entering into an agreement regarding the monetary obligation of the
latter under the judgment of the Court of Appeals, reducing the same from P6,000 to P4,000. The
payment by the respondent of the lesser amount of P4,000, accepted by the petitioners without any
protest or objection and acknowledged by them as "in full satisfaction of the money judgment" in civil
case 1554, completely extinguished the judgment debt and released the respondent from his pecuniary
liability.
Both the petitioners and the respondent take exception to the respondent judge's ruling that their
agreement of August, 1964 to reduce the judgment debt, as evidenced by the receipt hereinbefore
adverted to, "novated" the money judgment rendered by the appellate court.
Novation results in two stipulations one to extinguish an existing obligation, the other to substitute a
new one in its place.
4
Fundamental it is that novation effects a substitution or modification of an
obligation by another or an extinguishment of one obligation in the creation of another. In the case at
hand, we fail to see what new or modified obligation arose out of the payment by the respondent of the
reduced amount of P4,000 and substitute the monetary liability for P6,000 of the said respondent under
the appellate court's judgment. Additionally, to sustain novation necessitates that the same be so
declared in unequivocal terms clearly and unmistakably shown by the express agreement of the
parties or by acts of equivalent import or that there is complete and substantial incompatibility
between the two obligations.
5

Neither do we appreciate the petitioners' stand that, according to their agreement with the respondent,
their assent to the reduction of the money judgment was subject to the condition that the respondent
reconstruct and reopen the portion of the irrigation canal passing through his land immediately. The
petitioners even state that the receipt of August 31, 1964 embodies this condition.
The terms of the receipt dated August 31, 1964, we find clear and definite. The receipt neither expressly
nor impliedly declares that the reduction of the money judgment was conditioned on the respondent's
reconstruction and reopening of the irrigation canal. The receipt merely embodies the recognition by the
respondent of his obligation to reconstruct the irrigation canal. And the receipt simply requires the
respondent to comply with such obligation "immediately." The obligation of the respondent remains as a
portion of the Court of Appeals' judgment. In fact, the petitioners themselves, in their letter dated
November 5, 1964, sent to the respondent, demanding that the latter reconstruct the irrigation canal
immediately, referred to the same not as a condition but as "the portion of the judgment" in civil case
1594.
Consequently, the respondent judge, when she granted the motion of the respondent to set aside the alias
writ of execution and issued the order dated February 3, 1966 recalling and quashing the said alias writ,
acted correctly. Courts have jurisdiction to entertain motions to quash previously issued writs of
execution because courts have the inherent power, for the advancement of justice, to correct the errors of
their ministerial officers and to control their own processes. However, this power, well circumscribed, to
quash the writ, may be exercised only in certain situations, as when it appears that (a) the writ has been
improvidently issued, or (b) the writ is defective in substance, or (c) the writ has been issued against the
wrong party, or (d) the judgment debt has been paid or otherwise satisfied, or (e) the writ has been
issued without authority, or (f) there has been a change in the situation of the parties which renders such
execution inequitable, or (g) the controversy has never been submitted to the judgment of the court, and,
therefore, no judgment at all has ever been rendered thereon.
6
In the instant case, the payment of the
judgment debt by the respondent, although in a reduced amount but accepted by the petitioners as "in
full satisfaction of the money judgment," warrants the quashal of the alias writ.
ACCORDINGLY, judgment is hereby rendered, (1) declaring that the respondent judge did not act in
excess of jurisdiction or with grave abuse of discretion in issuing the order dated February 3, 1966
(granting the respondent's motion to set aside the alias writ of execution, and recalling and guashing the
said alias writ) and the order dated March 30, 1966 (denying the petitioners' motion for reconsideration,
of the order dated February 3, 1966) ; and (2) remanding the case to the court a quo with instructions
that the respondent court (a) conduct an ocular inspection of the irrigation canal passing through the
respondent's land to determine whether or not the said canal has been rebuilt in accordance with its
original dimensions; (b) in the event that the said canal fails to meet the measurements of the original
one, order the respondent to reconstruct the same to its former condition; and (3) in the event of the
respondent's further refusal or failure to do so, appoint some other person to reconstruct the canal in
accordance with its original dimensions, at the cost of the said respondent, pursuant to section 10 of Rule
39 of the Rules of Court. Without pronouncement as to costs.

4. NPC vs. Dayrit, 125 SCRA 849
G.R. Nos. L-62845-46 November 25, 1983
NATIONAL POWER CORPORATION, petitioner,
vs.
JUDGE ABELARDO M. DAYRIT, Court of First Instance of Manila, Branch 39, and DANIEL R. ROXAS,
doing business as United Veterans Security Agency and Foreign Boats Watchmen, respondents.
The Solicitor General for petitioner.
William C. Arceno for respondents.

ABAD SANTOS, J.:+.wph!1
This is a petition to set aside the Order, dated September 22, 1982, of the respondent judge. The prayer is
premised on the allegation that the questioned Order was issued with grave abuse of discretion.
In Civil Case No. 133528 of the defunct Court of First Instance of Manila, DANIEL E. ROXAS, doing
business under the name and style of United Veterans Security Agency and Foreign Boats Watchmen,
sued the NATIONAL POWER CORPORATION (NPC) and two of its officers in Iligan City. The purpose of
the suit was to compel the NPC to restore the contract of Roxas for security services which the former
had terminated.
After several incidents, the litigants entered into a Compromise Agreement on October 14, 1981, and they
asked the Court to approve it. Accordingly, a Decision was rendered on October 30, 1981, which reads as
follows: t.hqw
In order to abbreviate the proceedings in this case, the parties, instead of going into trial,
submitted a compromise agreement, as follows: t.hqw
The parties, DANIEL E. ROXAS, etc. and NATIONAL POWER CORPORATION,
ET AL., represented by its President Mr. Gabriel Y. Itchon with due and
proper authority under NP Board Resolution No. 81-224, assisted by their
respective counsel, to this Honorable Court respectfully submit the following
compromise agreement:
1. The defendant National Power Corporation shall pay to plaintiff the sum of
P7,277.45, representing the amount due to plaintiff for the services of one of
plaintiff's supervisors;
2. The defendant shall pay plaintiff the value of the line materials which were
stolen but recovered, by plaintiff's agency which value is to be determined
after a joint inventory by the representatives of both parties;
3. The parties shall continue with the contract of security services under the
same terms and conditions as the previous contract effective upon the
signing thereof;
4. The parties waive all their respective claims and counterclaims in favor of
each other;
5. The parties agree to faithfully comply with the foregoing agreement.
PRAYER
WHEREFORE, it is respectfully prayed that the Hon. Court approve the following
compromise agreement.'
Examining the foregoing agreement, the Court finds that the same is in accordance with law
and not against morals and public policy.
CONFORMABLY, the Court hereby renders judgment in accordance with the terms and
conditions thereof, enjoining the parties to strictly comply with the terms and conditions of
the compromise agreement, without pronouncement as to cost. (Rollo, pp. 33-34.)
The judgment was not implemented for reasons which have no relevance here.
On May 14, 1982, the NPC executed another contract for security services with Josette L. Roxas whose
relationship to Daniel is not shown. At any rate Daniel has owned the contract. The NPC refused to
implement the new contract for which reason Daniel filed a Motion for Execution in the aforesaid civil
case which had been re-numbered R-82-10787. The Motion reads: t.hqw
PLAINTIFF, by counsel, respectfully shows:
1. On October 30, 1981, this Honorable Court rendered its decision based on compromise
agreement submitted by the parties, under which it was provided, among others, that
t.hqw
3. The parties shall continue with the contract of security services under the
same terms and conditions as the previous contract effective upon the
signing thereof;
2. To date, after more than about eight (8) months since the decision of this Honorable
Court, defendant National Power Corporation, through bad faith by reason of excuses made
one after another, has yet to comply with the aforesaid terms of the decision. It has not
reinstated the contract with the plaintiff in gross violation of the terms of the said
compromise agreement which this Honorable Court approved, 'enjoining the parties to
strictly comply with the terms and conditions of the compromise agreement,
3. Hence, plaintiff is compelled to seek the assistance of this Honorable Court for the
execution of its decision.
PRAYER t.hqw
WHEREFORE, it is respectfully prayed that this Honorable Court order the issuance of the
writ of execution for the enforcement of the aforesaid portion of its decision. (Rollo, pp. 35-
36.)
Acting on the Motion, the respondent judge issued the following Order: t.hqw
Acting on the motion for execution dated July 14, 1982, visibly over the objection and/or
opposition to the motion for execution dated July 19, 1982, the Court, considering that the
decision of October 30, 1981 was based on a Compromise Agreement entered into by and
between the parties which decidedly, become final and executory, is inclined to grant said
action.
CONFORMABLY, let the corresponding writ of execution be issued to be served by the
Deputy Sheriff assigned to this branch. (Rollo, p. 54.)
The NPC assails the Order on the ground that it directs execution of a contract which had been novated
by that of May 14, 1982. Upon the other hand, Roxas claims that said contract was executed precisely to
implement the compromise agreement for which reason there was no novation.
We sustain the private respondent. Article I of the May 14, 1982, agreement supports his contention. Said
article reads: t.hqw
ARTICLE I
DOCUMENTS COMPRISING THE CONTRACT
The letter proposal dated September 5, 1981; CORPORATION'S counter- proposal dated
September 11, 1981; Board Resolution No. 81-244 dated September 28, 1981; the
Compromise Agreement and Court Decision dated October 30, 1981 in Civil Case No.
133528 CFI-Manila; other subsequent letters and the performance bond of AGENCY to be
flied in favor of CORPORATION in the manner hereinafter provided, are hereby expressly
made integral parts of this contract by reference. (Rollo, pp. 59-60.)
It is elementary that novation is never presumed; it must be explicitly stated or there must be manifest
incompatibility between the old and the new obligations in every aspect. Thus the Civil Code provides:
t.hqw
Art. 1292. In order that an obligation may be extinguished by another which substitutes the
same, it is imperative that it be so declared in unequivocal terms, or that the old and the
new obligations be on every point incompatible with each other.
In the case at bar there is nothing in the May 14, 1982, agreement which supports the petitioner's
contention. There is neither explicit novation nor incompatibility on every point between the "old" and
the "new" agreements.
WHEREFORE, the petition is denied for lack of merit with costs against the petitioner.
SO ORDERED.1wph1.t
5. Rodriguez vs. Reyes, 37 SCRA 195
December 28, 1970
G.R. No. L-26396
ANTONIO RODRIGUEZ, petitioner-appellant,
vs.
THE HON. ANDRES REYES, Presiding Judge, Branch VI, CFI, Rizal, et al., respondent-appellees.
G.R. Nos. L-27016-27 December 28, 1970 ABELARDO SUBIDO, as Commissioner of Civil Service, petitioner,
, J.:
Salonga, Ordoez, Yap, Sicat and Associates for petitioner-appellant.
Office of the Solicitor General for respondents-appellees.
Nos. L-27026-27:
Office of the Solicitor Bernardo P. Pardo, and Alfredo Daza, Ricardo Diaz and Ernesto Ross for petitioner.
Salonga, Ordoez, Yap, Sicat and Associates for respondents.
MAKALINTAL, J.:
These three cases are interrelated. L-26396 is an appeal by Dr. Antonio Rodriguez from the judgment of
the Court of First Instance of Rizal dismissing the petition for certiorari he had filed against Abelardo
Subido, Commissioner of Civil Service, in connection with the latter's decision in two administrative cases
against said petitioner.
L-27026 and L-27027 are original petitions for certiorari and prohibition filed in this Court by
Commissioner Subido, questioning the actuation of the Civil Service Board of Appeals in taking
cognizance of the appeal from the same decision rendered by him against Dr. Rodriguez.
Dr. Rodriguez was Medical Adviser (Chief of Section) in the Bureau of Medical Services. On July 1, 1959,
he was detailed as head of the National Mental Hospital by the then Secretary of Health, Dr. Elpidio
Valencia. On July 8, 1960 he was administratively charged on nine counts (Adm. Case No. R-23237), to
investigate which the Secretary formed a committee composed of several members. Pending
investigation, or on May 29, 1961, Dr. Rodriguez was appointed "Chief of Hospital IV (R-54) in the
Hospital Services (National Mental Hospital), Field Operations," which appointment was approved by the
Acting Chief, Personnel Transaction Division, in behalf of then Commissioner of Civil Service Amado del
Rosario. After the investigation, where evidence was adduced by both parties, the committee rendered its
report on November 20, 1961, finding the respondent innocent. Upon its recommendation the Secretary
of Health exonerated him completely and indorsed the findings to Commissioner del Rosario, who,
however, in his decision dated May 17, 1962, found Dr. Rodriguez "guilty of indiscretion" in connection
with specification "b" of the charges, for having caused slaughtered pigs (belonging to the National
Mental Hospital) to be given to his superior and to the Auditor General." The penalty administered to him
was an "admonition to be more careful in his activities."
On June 29, 1962 Dr. Rodriguez moved for reconsideration. In his motion he did not question the factual
findings in the decision; he simply pointed out that the offense of "indiscretion" did not exist in the
statutes or in the civil service rules and regulations. His prayer was that the verdict on that particular
count "be entirely deleted from the records of the case." Eight months thereafter, or on February 22,
1963, Rodriguez wrote a letter to the Commissioner of Civil Service withdrawing his motion for
reconsideration and manifesting his conformity to the decision of May 17, 1962. The reason he gave for
the withdrawal was that the administrative case had been pending for a long time and affected not only
his peace of mind but also the "interest of (the) public institution committed to his responsibility." On
March 18, 1963 the request for withdrawal was granted by the Department Legal Counsel of the Civil
Service Commission, who signed the corresponding indorsement "For the Commissioner." On May 6,
1963 Abelardo Subido, then Acting Commissioner of Civil Service, revoked the grant of withdrawal as
having been issued without authority.
Meanwhile, under date of January 23, 1962, another administrative complaint, No. 24354, had been
lodged with the Secretary of Health against Dr. Rodriguez. One of the seven charges was electioneering.
Again the Secretary created an investigating committee, to which he issued the following directive: .
To study the nature of such charges and determine the merit of each case. In case this committee finds
sufficient grounds for investigation, it is hereby directed that a formal investigation be conducted in
accordance with existing rules and regulations. After the investigation of the case, the Committee shall
submit to the undersigned its findings, comments and recommendations.
The investigating committee required Dr. Rodriguez to submit his explanation, which he did on March 6,
1962. On August 29, 1962 the committee, on the basis of the said explanation alone and without
conducting a formal investigation, rendered a memorandum report recommending exoneration. On
October 29, 1962 the Secretary of Health indorsed the recommendation, with his full concurrence, to the
Civil Service Commissioner.
On September 12, 1963 Commissioner Abelardo Subido rendered a joint decision in the two cases. In
Case No. 23237 he found Dr. Rodriguez guilty of misconduct in office for having loaned government
construction materials to a private contractor in connection with a project the latter was doing for the
National Mental Hospital. It was a charge not touched upon in the motion for reconsideration of Dr.
Rodriguez, and of which he had already been found innocent by the investigating Committee created by
the Secretary of Health, by the Secretary himself, and by Civil Service Commissioner del Rosario. In Case
No. 24354 the Commissioner found the respondent guilty of the charge of electioneering. The penalty
imposed was dismissal from office, which the Commissioner ordered, in the same decision, immediately
executed "in the public interest."
Dr. Rodriguez personally received a copy of the decision on September 14, 1963. On the same day he filed
a petition for certiorari with preliminary injunction in the Court of First Instance of Rizal, alleging that the
decision had been rendered without due process of law, and without jurisdiction or with grave abuse of
discretion. The injunction was issued by the Court, restraining immediate execution of the verdict of
dismissal.
On February 23, 1966 Dr. Rodriguez appealed the decision of Commissioner Subido to the Civil Service
Board of Appeals. On May 4, 1966 the Court of First Instance dismissed the petition for certiorari on the
ground of non-exhaustion of administrative remedies. Dr. Rodriguez moved to reconsider, and after his
motion was denied, filed a petition for review with preliminary injunction in the Court of Appeals, which
thereafter certified the case to this Court, where it was docketed as Case No. 26396.
Commissioner Subido, on his part, tried to have the Civil Service Board of Appeals dismiss the
respondent's appeal before it on the ground that the same had been filed out of time and that his decision
was already final. The Board turned down the plea, and Commissioner Subido came to this Court on
certiorari and prohibition, his petition being docketed under Nos. L-27026 and 27027.
On January 5, 1967, this Court issued an order temporarily restraining the Civil Service Board of Appeals
from taking cognizance of and assuming jurisdiction over the appeal taken by Dr. Rodriguez, but the
order failed to take effect because two days before, or on January 3, the Board had decided the appeal,
declaring the decision of Commissioner Subido null and void for having been rendered "without
jurisdiction and without due process of law," and ordering the reinstatement of Dr. Rodriguez to his
position.
There are two issues presented for resolution: (a) whether or not the decision of Commissioner Subido
was rendered with jurisdiction and/or due process; and (b) whether or not the appeal taken by Dr.
Rodriguez to the Civil Service Board of Appeals was timely.
1. With respect to Administrative Case No. 23237 our position is that the decision of Commissioner
Amado del Rosario dated May 17, 1962, finding Dr. Rodriguez guilty of indiscretion and imposing upon
him the penalty of admonition, had already become final and therefore beyond the jurisdiction of
Commissioner Subido to set it aside when he did so and rendered his own decision on September 12,
1963. True, Dr. Rodriguez moved for reconsideration of the del Rosario decision. But he withdrew that
motion on February 22, 1963; and since no action thereon had yet been taken at the time, the withdrawal
was a matter of right on his part, subject neither to approval nor to disapproval by the Commissioner.
It has been said, however, that the complainant in the said administrative case sent a letter to the
Commissioner on December 20, 1962, asking for a "revaluation of the entire evidence in this case ...." We
do not believe, however, that the step thus taken by the complainant kept the case open independently of
the motion of Dr. Rodriguez and its subsequent withdrawal. It bears emphasis that this motion of Dr.
Rodriguez did not question the findings of fact in the del Rosario decision. The only point it raised was a
legal one - that in connection with the specific charge of which he had been found guilty, there was no
such offense in the civil service law or regulations as "indiscretion"; and on this ground he asked that the
decision be modified accordingly.
The letter of the complainant was evidently not intended to be a motion for reconsideration, since the
complainant was later on to request the Commissioner that it be considered as such a motion - this on
April 3, 1963, after Dr. Rodriguez had withdrawn his own motion. If the letter was but an answer or
opposition to the said motion of Dr. Rodriguez, then it became functus oficio after the latter was
withdrawn. On the other hand, if it was an independent motion for reconsideration in itself then it was
filed out of time - more than seven (7) months after the Del Rosario decision was rendered. In either case
that decision had already become final when Commissioner Subido reconsidered it and rendered his own
decision on September 12, 1963.
2. Going now to Administrative Case No. 24354, our view is that the decision of the Commissioner suffers
from a basic infirmity - that it violated the principle of due process, having been rendered without
investigation and without first affording the respondent an opportunity to defend himself. It must be
remembered that the authority given by the Secretary of Health to the investigating committee he had
created was, "to study the nature of (the) charges and determine the merit of each case (and) in case this
committee finds sufficient grounds for investigation, it is hereby directed that a formal investigation be
conducted in accordance with existing rules and regulations."
The validity of the Subido decision is sought to be justified by the argument that under Section 32 of the
Civil Service Act of 1959 Dr. Rodriguez had the right to elect a formal investigation, and since he made no
such election he cannot later on be heard that an investigation was denied him. There is here a confusion
as to the order of priority among the rungs of the procedural ladder. Dr. Rodriguez could hardly have
asked for a formal investigation at the stage in which the administrative case was at the time. He had
merely been required to submit his explanation in writing, which he did. The committee was still to
determine whether there were sufficient grounds for investigation, and if there were, to conduct a formal
investigation. This is explicit in the instruction given by the Secretary of Health. The committee found, on
the basis of the charges and the explanation, that no formal investigation was necessary, and hence it
recommended that the charges be dropped for lack of merit. The recommendation was thereupon
favorably indorsed by the Secretary of Health to the Commissioner of Civil Service. There was manifestly
neither need nor occasion for Dr. Rodriguez to elect a formal investigation pursuant to the Civil Service
Law. It would have been not only premature but inconsistent for him to ask that he be formally
investigated on charges of which he had already been exonerated.
If, despite the findings of the investigating committee and the concurring recommendation of the
Secretary of Health, the Civil Service Commissioner still considered the charges grave enough to warrant
further action, the basic principle of due process required that Dr. Rodriguez be first heard in his own
defense, or at least allowed to express a choice to undergo a formal investigation or not in accordance
with Section 32 of the Civil Service Act. This right was not accorded him. Ironically enough Dr. Rodriguez
was found guilty of electioneering on the strength of a letter he had annexed to his explanation submitted
to the investigating committee - a letter which, if anything, was exculpatory in the light of the charge
against him and the explanation that he had submitted. He was accused of electioneering for the benefit
of the Nacionalista Party; the letter was sent to him by some Liberal Party men in Bulacan thanking him
for having employed fourteen (14) skilled workers who turned out to be "Liberals."
A revealing sidelight on this aspect of the case, which shows how precipitate and groundless was the
pronouncement of the guilt of Dr. Rodriguez, is the following excerpt from the decision of the Civil Service
Board of Appeals:
In the instant case, the Commissioner, without giving the respondent a chance to be heard, found him
guilty of partisan political activity on the basis of a letter from Liberal Party officials thanking him for
having employed skilled laborers, 14 of whom were election inspectors of the party in Malolos, Bulacan.
If a hearing had been conducted by the Commissioner before he convicted the respondent of
electioneering, the latter could have had the opportunity to explain how he came to employ the 14 skilled
laborers referred to. Upon questioning by the Board at the hearing of this appeal, the respondent
informed the Board that he did not know the 14 men before he employed them; that they were screened
by a screening committee in the hospital, before they were employed, together with hundreds of other
recommendees; that these 14 were only part of the 300 casual laborers employed in the hospital because
it was greatly undermanned; that the screening committee recommended the employment of the 14
because they were found to be skilled and with tools; that these applicants for employment who were not
skilled or did not have tools were not employed in the hospital regardless of recommendation; that the
14 workers were not employed at the same time, but they represent the total workers from Malolos who
had been employed at various times; and that he came to know that the 14 were election inspectors of
the Liberal Party in Malolos after he had already the letter of thanks regarding their employment.
Respondent, however, was barred from making this explanation by his immediate conviction and
dismissal without a hearing. Consequently, respondent was denied due process.
3. Assuming that Commissioner Subido could validly render his joint decision of September 12, 1963, the
next question was the appeal taken by Dr. Rodriguez to the Civil Service Board of Appeal timely? As
already observed hereinabove, over the Commissioner's objection the Board took cognizance of the
appeal, held itself with jurisdiction to entertain the same, and on January 3, 1967 promulgated its
resolution declaring the decision appealed from null and void and ordering the reinstatement of Dr.
Rodriguez to his position.
The recourse taken by Dr. Rodriguez to the Court of First Instance of Rizal on certiorari with preliminary
injunction was eventually dismissed by that Court on the ground that the petitions had not exhausted the
administrative remedy available to him, namely, by appeal to the Civil Service Board of Appeals. It is, to
our mind, open to serious doubt whether such an appeal was an adequate remedy for the purposes
sought by the petitioner in that case. He was, first of all, challenging the jurisdiction of the Commissioner
to render the decision with, respect to the first administrative case, and pleading lack of due process and
grave abuse of discretion with respect to the other. And the immediate relief prayed for was preliminary
injunction to restrain the execution of the decision already ordered by the Commissioner. These
remedies, while clearly spelled out in the Rules of Court as within the dispensation of the courts, are
nebulous and unsettled when sought in administrative bodies. An appeal to the Civil Service Board of
Appeals connotes a review of the case on its merits, a reappraisal of the evidence and of the penalty
meted below. When the need of the moment, however, is to stop immediate execution of that penalty and,
after hearing, to set aside the decision altogether on grounds of jurisdiction and due process, we are not
prepared to say the doors of the courts must remain shut. It is preferable to overlook slight deviations
from procedural paths which even to the discerning may appears quite hazy than disregard the greater
imperatives of justice and fair play. After all the course pursued in the court below was one in equity, and
the function of equity is to avert or prevent civil injury which may otherwise be irreparable.
Considering all these circumstances, we are of the view that the issuance of the writ of preliminary
injunction by the Court of First Instance interrupted the running of the period within which an appeal
could be taken from the Civil Service Commissioner to the Civil Service Board of Appeals; and that
therefore the appeal, actually taken on the day Dr. Rodriguez received copy of the court's decision,
wherein the injunction was dissolved, was a timely one. In the case of Geukeko vs. Araneta, etc., 102 Phil.
706, decided December 24, 1957, the party adversely affected by a decision of the Director of Lands
relative to disputed lot in the Tambobong estate went directly to the Court of First Instance and sought to
annul the said decision instead of appealing to the Secretary of Agriculture and Natural Resources, which
he was supposed to do within 60 days under the rules promulgated by that official. No injunction was
issued by the court, which dismissed the case after more than two years on the ground that the plaintiff
had not exhausted his available administrative remedies. An appeal was then taken from the decision of
the Director of the Bureau of Lands to the Secretary of Agriculture and Natural Resources. This Court
held, when the matter came up before it on mandamus and prohibition, that the institution of the court
action suspended the running of the period for such appeal, making reference to the administrative policy
of the Department to that effect.
In connection with the administrative cases against Dr. Rodriguez, the Civil Service Board of Appeals
similarly took cognizance of his appeal and held that it was timely. Indeed in its decision it cites a number
of cases where appeals (forwarded to it by the Commissioner) were entertained even after the expiration
of the time limit. It did no more than what the Secretary of Agriculture and Natural Resources did in the
Geukeko case, and with even greater justification, for there was a judicial injunction issued against the
execution of the decision of the Civil Service Commmissioner.
When the vote on these cases was taken, four members of this Court, including the undersigned,
concurred in this opinion; two members dissented four abstained from voting; and the last one, Justice
Felix V. Makasiar, had not yet been appointed. Since the votes on either side are short of the required
majority, the petition of Commissioner Abelardo Subido in G. R. Nos. L-27026 and L-27027 should be, as
it is hereby, dismissed, and the jurisdiction of the Civil Service Board of Appeals in the appeal taken by Dr.
Antonio Rodriguez is deemed upheld. Considering that the said Board has already rendered its decision,
the petition in No. L-26396 is, likewise, dismissed as moot and academic.

6. Batchelder vs. CA, 44 SCRA 45
GEORGE W. BATCHELDER, doing business under the name and style of Batchelder Equipment,
Plaintiff-Appellant, v. THE CENTRAL BANK OF THE PHILIPPINES, Defendant-Appellant.

SYLLABUS

1. CIVIL LAW; OBLIGATIONS AND CONTRACTS; SOURCES OF OBLIGATIONS; LAW AS SOURCE OF
OBLIGATION. One of the sources of an obligation is law. A legal norm could so require that a particular
party be chargeable with a prestation or undertaking to give or to deliver or to do or to render some
service. It is an indispensable requisite though that such a provision thus in fact exists. There must be a
showing to that effect.

2. ID.: ID.; ID.: CB CIRCULAR NOT SOURCE OF OBLIGATION IN INSTANT CASE. It is true that a Central
Bank circular may have the force and effect of law. especially so when issued in pursuance of its quasi-
legislative power. That of itself, however, is no justification to conclude that it has thereby assumed an
obligation. To be impressed with such a character, however, it must be categorically demonstrated that
the very administrative agency, which is the source of such obligation, would place such a burden on
itself. In the instant case, it cannot be so plausibly maintained. The assertion that there is a self-imposed
obligation on the part of defendant Central Bank to resell US$154,094.56 to plaintiff at the exchange rate
of P2.00375 to US$1.00 by the issuance of the circulars in question is thus lacking in persuasiveness.

R E S O L U T I O N

FERNANDO, J.:

An ably-written motion for the reconsideration of our decision of March 29, 1972 was submitted by
plaintiff-appellant through its counsel, Delegate Mauro Baradi. It is based primarily on this contention:
"Said decision failed to consider that if there was no contract obligating the defendant to resell
US$154,094.56 to plaintiff at the exchange rate of P2.00375 to US$1.00, the judgment of the lower court
can and should nevertheless be sustained on the basis of there being such an obligation arising from law."
1 It is clear therefore that there is a retreat from the untenable position taken by it, both in the lower
court and here on appeal, that there was a contract between it and defendant Central Bank of the
Philippines that gave rise to such a duty on the part of the latter. This time, it would predicate its alleged
right to the exchange rate of P2.00375 to US$1.00 to an obligation of defendant Central Bank arising from
law. This point, while strongly pressed in a pleading that is not without its plausibility, loses sight of the
ratio decidendi of our decision of March 29, 1972 that the Central Bank acted not as a juridical person
with power to enter into contracts but as a regulatory agency entrusted with the delicate function of
managing the currency. It is far-fetched to assume that such an administrative body by the issuance of the
circulars in question did transform itself into just another party to a juridical relation, called upon to
satisfy a credit. As will be more fully explained, the motion for reconsideration cannot suffice to call for a
reversal of our judgment Our decision of March 29, 1972 therefore stands.

Plaintiff-appellant would sustain its principal contention thus:" Laws, as used in the Civil Code, include
administrative orders and regulations not contrary to the laws or the Constitution. Thus, in his Outlines
on Civil Law, a distinguished member of this Court, Hon. Jose B.L. Reyes (with Judge Ricardo Puno as co-
author), in outlining the sources from which the rule of law applicable to a given controversy is to be
found, states . . .B. Statute (laws) applicable to the point in controversy. The word includes enactments
by the legislative authority, original or delegated (executive or administrative orders or regulations). But
the latter shall be valid only when they are not contrary to the laws or the Constitution. In People v. Que
Po Lay, this Honorable Court held: . . . It is true that Circular No. 20 of the Central Bank is not a statute or
law but being issued for the implementation of the law authorizing its issuance, it has the force and effect
of law according to settled jurisprudence. (See U.S. v. Tupasi Molina, 29 Phil. 119 and authorities cited
therein). [Underscoring supplied]. The various resolutions and memoranda issued by the defendant,
having the force and effect of law, if not themselves laws, therefore can be the sources of obligations." 2

It is, of course, true that obligations arise from 1) law; 2) contracts; 3) quasi-contracts; 4) acts or
omissions punished by law and 5) quasi-delicts. 3 One of the sources of an obligation then is a law. A legal
norm could so require that a particular party be chargeable with a prestation or undertaking to give or to
deliver or to do or to render some service. It is an indispensable requisite though that such a provision
thus in fact exists. There must be a showing to that effect. As early as 1909 in Pelayo v. Lauron, 4 this
Court through Justice Torres, categorically declared: "Obligation arising from law are not presumed." 5
For in the language of Justice Street in Leung Ben v. OBrien, 6 a 1918 decision, such an obligation is "a
creation of the positive law." 7 They are ordinarily traceable to code or statute. 8 It is true though, as
noted in the motion for reconsideration, following People v. Que Po Lay, 9 that a Central Bank circular
may have the force and effect of law, especially so when issued in pursuance of its quasi-legislative
power. That of itself, however, is no justification to conclude that it has thereby assumed an obligation. To
be impressed with such a character, however, it must be categorically demonstrated that the very
administrative agency, which is the source of such regulation, would place such a burden on itself.

Here certainly, it cannot be so plausibly maintained. As was noted in the decision sought to be
reconsidered after a recital of the statutory objectives of defendant Central Bank to maintain monetary
stability as well as to preserve the international value of the peso: "It would be then to set at naught
fundamental concepts in administrative law that accord due recognition to the vesting of quasi-legislative
and quasi-judicial power in administrative law for the purpose of attaining statutory objectives,
especially now that government is saddled with greater responsibilities due to the complex situation of
the modern era, if the lower court is to be upheld. For if such be the case then, by the judiciary failing to
exercise due care in its oversight of an administrative agency, substituting its own discretion for what
usually is the more expert appraisal of such an instrumentality, there may even be a frustration if not a
nullification of the objective of the law." 10 The assertion that there is such a self-imposed obligation on
the part of defendant Central Bank is thus lacking in persuasiveness. 11

With the above disposition of the principal contention, the two other points of the motion for
reconsideration that there was in fact such compliance with the rules and regulations of defendant
Central Bank and that he has acquired a vested right, likewise fall to the ground. It is not to be lost sight of
that all the while defendant Central Bank precisely had denied that there was such a compliance,
indicating in what respect such deficiency was incurred. No reliance could be placed on the lower court
decision reversed by us based on the assumption that there was a contract between plaintiff and
defendant. Commendably, plaintiff-appellant in this motion for reconsideration appears to be of the same
mind. Necessarily any claim that a vested right has accrued is likewise untenable. It cannot be said then
that our decision of March 29, 1972 should be overturned.

WHEREFORE, the motion for reconsideration is denied.

7. Republic vs. PLDT, 26 SCRA 620
G.R. No. L-18841 January 27, 1969
REPUBLIC OF THE PHILIPPINES, plaintiff-appellant,
vs.
PHILIPPINE LONG DISTANCE TELEPHONE COMPANY, defendant-appellant.
Office of the Solicitor General Arturo A. Alafriz, Assistant Solicitor General Antonio A. Torres and Solicitor
Camilo D. Quiason for plaintiff-appellant.
Ponce Enrile, Siguion Reyna, Montecillo and Belo for defendant-appellant.
REYES, J.B.L., J.:
Direct appeals, upon a joint record on appeal, by both the plaintiff and the defendant from the dismissal,
after hearing, by the Court of First Instance of Manila, in its Civil Case No. 35805, of their respective
complaint and counterclaims, but making permanent a preliminary mandatory injunction theretofore
issued against the defendant on the interconnection of telephone facilities owned and operated by said
parties.
The plaintiff, Republic of the Philippines, is a political entity exercising governmental powers through its
branches and instrumentalities, one of which is the Bureau of Telecommunications. That office was
created on 1 July 1947, under Executive Order No. 94, with the following powers and duties, in addition
to certain powers and duties formerly vested in the Director of Posts: 1awphil.t
SEC. 79. The Bureau of Telecommunications shall exercise the following powers and duties:
(a) To operate and maintain existing wire-telegraph and radio-telegraph offices, stations, and
facilities, and those to be established to restore the pre-war telecommunication service under the
Bureau of Posts, as well as such additional offices or stations as may hereafter be established to
provide telecommunication service in places requiring such service;
(b) To investigate, consolidate, negotiate for, operate and maintain wire-telephone or radio
telephone communication service throughout the Philippines by utilizing such existing facilities in
cities, towns, and provinces as may be found feasible and under such terms and conditions or
arrangements with the present owners or operators thereof as may be agreed upon to the
satisfaction of all concerned;
(c) To prescribe, subject to approval by the Department Head, equitable rates of charges for
messages handled by the system and/or for time calls and other services that may be rendered by
said system;
(d) To establish and maintain coastal stations to serve ships at sea or aircrafts and, when public
interest so requires, to engage in the international telecommunication service in agreement with
other countries desiring to establish such service with the Republic of the Philippines; and
(e) To abide by all existing rules and regulations prescribed by the International
Telecommunication Convention relative to the accounting, disposition and exchange of messages
handled in the international service, and those that may hereafter be promulgated by said
convention and adhered to by the Government of the Republic of the Philippines.
1

The defendant, Philippine Long Distance Telephone Company (PLDT for short), is a public service
corporation holding a legislative franchise, Act 3426, as amended by Commonwealth Act 407, to install,
operate and maintain a telephone system throughout the Philippines and to carry on the business of
electrical transmission of messages within the Philippines and between the Philippines and the telephone
systems of other countries.
2
The RCA Communications, Inc., (which is not a party to the present case but
has contractual relations with the parties) is an American corporation authorized to transact business in
the Philippines and is the grantee, by assignment, of a legislative franchise to operate a domestic station
for the reception and transmission of long distance wireless messages (Act 2178) and to operate
broadcasting and radio-telephone and radio-telegraphic communications services (Act 3180).
3

Sometime in 1933, the defendant, PLDT, and the RCA Communications, Inc., entered into an agreement
whereby telephone messages, coming from the United States and received by RCA's domestic station,
could automatically be transferred to the lines of PLDT; and vice-versa, for calls collected by the PLDT for
transmission from the Philippines to the United States. The contracting parties agreed to divide the tolls,
as follows: 25% to PLDT and 75% to RCA. The sharing was amended in 1941 to 30% for PLDT and 70%
for RCA, and again amended in 1947 to a 50-50 basis. The arrangement was later extended to radio-
telephone messages to and from European and Asiatic countries. Their contract contained a stipulation
that either party could terminate it on a 24-month notice to the other.
4
On 2 February 1956, PLDT gave
notice to RCA to terminate their contract on 2 February 1958.
5

Soon after its creation in 1947, the Bureau of Telecommunications set up its own Government
Telephone System by utilizing its own appropriation and equipment and by renting trunk lines of the
PLDT to enable government offices to call private parties.
6
Its application for the use of these trunk lines
was in the usual form of applications for telephone service, containing a statement, above the signature of
the applicant, that the latter will abide by the rules and regulations of the PLDT which are on file with the
Public Service Commission.
7
One of the many rules prohibits the public use of the service furnished the
telephone subscriber for his private use.
8
The Bureau has extended its services to the general public since
1948,
9
using the same trunk lines owned by, and rented from, the PLDT, and prescribing its (the
Bureau's) own schedule of rates.
10
Through these trunk lines, a Government Telephone System (GTS)
subscriber could make a call to a PLDT subscriber in the same way that the latter could make a call to the
former.
On 5 March 1958, the plaintiff, through the Director of Telecommunications, entered into an agreement
with RCA Communications, Inc., for a joint overseas telephone service whereby the Bureau would convey
radio-telephone overseas calls received by RCA's station to and from local residents.
11
Actually, they
inaugurated this joint operation on 2 February 1958, under a "provisional" agreement.
12

On 7 April 1958, the defendant Philippine Long Distance Telephone Company, complained to the Bureau
of Telecommunications that said bureau was violating the conditions under which their Private Branch
Exchange (PBX) is inter-connected with the PLDT's facilities, referring to the rented trunk lines, for the
Bureau had used the trunk lines not only for the use of government offices but even to serve private
persons or the general public, in competition with the business of the PLDT; and gave notice that if said
violations were not stopped by midnight of 12 April 1958, the PLDT would sever the telephone
connections.
13
When the PLDT received no reply, it disconnected the trunk lines being rented by the
Bureau at midnight on 12 April 1958.
14
The result was the isolation of the Philippines, on telephone
services, from the rest of the world, except the United States.
15

At that time, the Bureau was maintaining 5,000 telephones and had 5,000 pending applications for
telephone connection.
16
The PLDT was also maintaining 60,000 telephones and had also 20,000 pending
applications.
17
Through the years, neither of them has been able to fill up the demand for telephone
service.
The Bureau of Telecommunications had proposed to the PLDT on 8 January 1958 that both enter into an
interconnecting agreement, with the government paying (on a call basis) for all calls passing through the
interconnecting facilities from the Government Telephone System to the PLDT.
18
The PLDT replied that it
was willing to enter into an agreement on overseas telephone service to Europe and Asian countries
provided that the Bureau would submit to the jurisdiction and regulations of the Public Service
Commission and in consideration of 37 1/2% of the gross revenues.
19
In its memorandum in lieu of oral
argument in this Court dated 9 February 1964, on page 8, the defendant reduced its offer to 33 1/3 %
(1/3) as its share in the overseas telephone service. The proposals were not accepted by either party.
On 12 April 1958, plaintiff Republic commenced suit against the defendant, Philippine Long Distance
Telephone Company, in the Court of First Instance of Manila (Civil Case No. 35805), praying in its
complaint for judgment commanding the PLDT to execute a contract with plaintiff, through the Bureau,
for the use of the facilities of defendant's telephone system throughout the Philippines under such terms
and conditions as the court might consider reasonable, and for a writ of preliminary injunction against
the defendant company to restrain the severance of the existing telephone connections and/or restore
those severed.
Acting on the application of the plaintiff, and on the ground that the severance of telephone connections
by the defendant company would isolate the Philippines from other countries, the court a quo, on 14
April 1958, issued an order for the defendant:
(1) to forthwith reconnect and restore the seventy-eight (78) trunk lines that it has disconnected
between the facilities of the Government Telephone System, including its overseas telephone
services, and the facilities of defendant; (2) to refrain from carrying into effect its threat to sever
the existing telephone communication between the Bureau of Telecommunications and defendant,
and not to make connection over its telephone system of telephone calls coming to the Philippines
from foreign countries through the said Bureau's telephone facilities and the radio facilities of RCA
Communications, Inc.; and (3) to accept and connect through its telephone system all such
telephone calls coming to the Philippines from foreign countries until further order of this
Court.
On 28 April 1958, the defendant company filed its answer, with counterclaims.
It denied any obligation on its part to execute a contrary of services with the Bureau of
Telecommunications; contested the jurisdiction of the Court of First Instance to compel it to enter into
interconnecting agreements, and averred that it was justified to disconnect the trunk lines heretofore
leased to the Bureau of Telecommunications under the existing agreement because its facilities were
being used in fraud of its rights. PLDT further claimed that the Bureau was engaging in commercial
telephone operations in excess of authority, in competition with, and to the prejudice of, the PLDT, using
defendants own telephone poles, without proper accounting of revenues.
After trial, the lower court rendered judgment that it could not compel the PLDT to enter into an
agreement with the Bureau because the parties were not in agreement; that under Executive Order 94,
establishing the Bureau of Telecommunications, said Bureau was not limited to servicing government
offices alone, nor was there any in the contract of lease of the trunk lines, since the PLDT knew, or ought
to have known, at the time that their use by the Bureau was to be public throughout the Islands, hence
the Bureau was neither guilty of fraud, abuse, or misuse of the poles of the PLDT; and, in view of serious
public prejudice that would result from the disconnection of the trunk lines, declared the preliminary
injunction permanent, although it dismissed both the complaint and the counterclaims.
Both parties appealed.
Taking up first the appeal of the Republic, the latter complains of the action of the trial court in
dismissing the part of its complaint seeking to compel the defendant to enter into an interconnecting
contract with it, because the parties could not agree on the terms and conditions of the interconnection,
and of its refusal to fix the terms and conditions therefor.
We agree with the court below that parties can not be coerced to enter into a contract where no
agreement is had between them as to the principal terms and conditions of the contract. Freedom to
stipulate such terms and conditions is of the essence of our contractual system, and by express provision
of the statute, a contract may be annulled if tainted by violence, intimidation, or undue influence (Articles
1306, 1336, 1337, Civil Code of the Philippines). But the court a quo has apparently overlooked that while
the Republic may not compel the PLDT to celebrate a contract with it, the Republic may, in the exercise of
the sovereign power of eminent domain, require the telephone company to permit interconnection of the
government telephone system and that of the PLDT, as the needs of the government service may require,
subject to the payment of just compensation to be determined by the court. Nominally, of course, the
power of eminent domain results in the taking or appropriation of title to, and possession of, the
expropriated property; but no cogent reason appears why the said power may not be availed of to impose
only a burden upon the owner of condemned property, without loss of title and possession. It is
unquestionable that real property may, through expropriation, be subjected to an easement of right of
way. The use of the PLDT's lines and services to allow inter-service connection between both telephone
systems is not much different. In either case private property is subjected to a burden for public use and
benefit. If, under section 6, Article XIII, of the Constitution, the State may, in the interest of national
welfare, transfer utilities to public ownership upon payment of just compensation, there is no reason why
the State may not require a public utility to render services in the general interest, provided just
compensation is paid therefor. Ultimately, the beneficiary of the interconnecting service would be the
users of both telephone systems, so that the condemnation would be for public use.
The Bureau of Telecommunications, under section 78 (b) of Executive Order No. 94, may operate and
maintain wire telephone or radio telephone communications throughout the Philippines by utilizing
existing facilities in cities, towns, and provinces under such terms and conditions or arrangement with
present owners or operators as may be agreed upon to the satisfaction of all concerned; but there is
nothing in this section that would exclude resort to condemnation proceedings where unreasonable or
unjust terms and conditions are exacted, to the extent of crippling or seriously hampering the operations
of said Bureau.
A perusal of the complaint shows that the Republic's cause of action is predicated upon the radio
telephonic isolation of the Bureau's facilities from the outside world if the severance of interconnection
were to be carried out by the PLDT, thereby preventing the Bureau of Telecommunications from properly
discharging its functions, to the prejudice of the general public. Save for the prayer to compel the PLDT to
enter into a contract (and the prayer is no essential part of the pleading), the averments make out a case
for compulsory rendering of inter-connecting services by the telephone company upon such terms and
conditions as the court may determine to be just. And since the lower court found that both parties "are
practically at one that defendant (PLDT) is entitled to reasonable compensation from plaintiff for the
reasonable use of the former's telephone facilities" (Decision, Record on Appeal, page 224), the lower
court should have proceeded to treat the case as one of condemnation of such services independently of
contract and proceeded to determine the just and reasonable compensation for the same, instead of
dismissing the petition.
This view we have taken of the true nature of the Republic's petition necessarily results in overruling
the plea of defendant-appellant PLDT that the court of first instance had no jurisdiction to entertain the
petition and that the proper forum for the action was the Public Service Commission. That body, under
the law, has no authority to pass upon actions for the taking of private property under the sovereign right
of eminent domain. Furthermore, while the defendant telephone company is a public utility corporation
whose franchise, equipment and other properties are under the jurisdiction, supervision and control of
the Public Service Commission (Sec. 13, Public Service Act), yet the plaintiff's telecommunications
network is a public service owned by the Republic and operated by an instrumentality of the National
Government, hence exempt, under Section 14 of the Public Service Act, from such jurisdiction,
supervision and control. The Bureau of Telecommunications was created in pursuance of a state policy
reorganizing the government offices
to meet the exigencies attendant upon the establishment of the free and independent
Government of the Republic of the Philippines, and for the purpose of promoting simplicity,
economy and efficiency in its operation (Section 1, Republic Act No. 51)
and the determination of state policy is not vested in the Commission (Utilities Com. vs. Bartonville Bus
Line, 290 Ill. 574; 124 N.E. 373).
Defendant PLDT, as appellant, contends that the court below was in error in not holding that the Bureau
of Telecommunications was not empowered to engage in commercial telephone business, and in ruling
that said defendant was not justified in disconnecting the telephone trunk lines it had previously leased
to the Bureau. We find that the court a quo ruled correctly in rejecting both assertions.
Executive Order No. 94, Series of 1947, reorganizing the Bureau of Telecommunications, expressly
empowered the latter in its Section 79, subsection (b), to "negotiate for, operate and maintain wire
telephone or radio telephone communication service throughout the Philippines", and, in subsection (c),
"to prescribe, subject to approval by the Department Head, equitable rates of charges for messages
handled by the system and/or for time calls and other services that may be rendered by the system".
Nothing in these provisions limits the Bureau to non-commercial activities or prevents it from serving the
general public. It may be that in its original prospectuses the Bureau officials had stated that the service
would be limited to government offices: but such limitations could not block future expansion of the
system, as authorized by the terms of the Executive Order, nor could the officials of the Bureau bind the
Government not to engage in services that are authorized by law. It is a well-known rule that erroneous
application and enforcement of the law by public officers do not block subsequent correct application of
the statute (PLDT vs. Collector of Internal Revenue, 90 Phil. 676), and that the Government is never
estopped by mistake or error on the part of its agents (Pineda vs. Court of First Instance of Tayabas, 52
Phil. 803, 807; Benguet Consolidated Mining Co. vs. Pineda, 98 Phil. 711, 724).
The theses that the Bureau's commercial services constituted unfair competition, and that the Bureau
was guilty of fraud and abuse under its contract, are, likewise, untenable.
First, the competition is merely hypothetical, the demand for telephone service being very much more
than the supposed competitors can supply. As previously noted, the PLDT had 20,000 pending
applications at the time, and the Bureau had another 5,000. The telephone company's inability to meet
the demands for service are notorious even now. Second, the charter of the defendant expressly provides:
SEC. 14. The rights herein granted shall not be exclusive, and the rights and power to grant to any
corporation, association or person other than the grantee franchise for the telephone or electrical
transmission of message or signals shall not be impaired or affected by the granting of this
franchise: (Act 3436)
And third, as the trial court correctly stated, "when the Bureau of Telecommunications subscribed to the
trunk lines, defendant knew or should have known that their use by the subscriber was more or less
public and all embracing in nature, that is, throughout the Philippines, if not abroad" (Decision, Record on
Appeal, page 216).
The acceptance by the defendant of the payment of rentals, despite its knowledge that the plaintiff had
extended the use of the trunk lines to commercial purposes, continuously since 1948, implies assent by
the defendant to such extended use. Since this relationship has been maintained for a long time and the
public has patronized both telephone systems, and their interconnection is to the public convenience, it is
too late for the defendant to claim misuse of its facilities, and it is not now at liberty to unilaterally sever
the physical connection of the trunk lines.
..., but there is high authority for the position that, when such physical connection has been
voluntarily made, under a fair and workable arrangement and guaranteed by contract and the
continuous line has come to be patronized and established as a great public convenience, such
connection shall not in breach of the agreement be severed by one of the parties. In that case, the
public is held to have such an interest in the arrangement that its rights must receive due
consideration. This position finds approval in State ex rel. vs. Cadwaller, 172 Ind. 619, 636, 87 N.E.
650, and is stated in the elaborate and learned opinion of Chief Justice Myers as follows: "Such
physical connection cannot be required as of right, but if such connection is voluntarily made by
contract, as is here alleged to be the case, so that the public acquires an interest in its continuance,
the act of the parties in making such connection is equivalent to a declaration of a purpose to
waive the primary right of independence, and it imposes upon the property such a public status
that it may not be disregarded" citing Mahan v. Mich. Tel. Co., 132 Mich. 242, 93 N.W. 629, and
the reasons upon which it is in part made to rest are referred to in the same opinion, as follows:
"Where private property is by the consent of the owner invested with a public interest or privilege
for the benefit of the public, the owner can no longer deal with it as private property only, but
must hold it subject to the right of the public in the exercise of that public interest or privilege
conferred for their benefit." Allnut v. Inglis (1810) 12 East, 527. The doctrine of this early case is
the acknowledged law. (Clinton-Dunn Tel. Co. v. Carolina Tel. & Tel. Co., 74 S.E. 636, 638).
It is clear that the main reason for the objection of the PLDT lies in the fact that said appellant did not
expect that the Bureau's telephone system would expand with such rapidity as it has done; but this
expansion is no ground for the discontinuance of the service agreed upon.
The last issue urged by the PLDT as appellant is its right to compensation for the use of its poles for
bearing telephone wires of the Bureau of Telecommunications. Admitting that section 19 of the PLDT
charter reserves to the Government
the privilege without compensation of using the poles of the grantee to attach one ten-pin cross-
arm, and to install, maintain and operate wires of its telegraph system thereon; Provided, however,
That the Bureau of Posts shall have the right to place additional cross-arms and wires on the poles
of the grantee by paying a compensation, the rate of which is to be agreed upon by the Director of
Posts and the grantee;
the defendant counterclaimed for P8,772.00 for the use of its poles by the plaintiff, contending that what
was allowed free use, under the aforequoted provision, was one ten-pin cross-arm attachment and only
for plaintiff's telegraph system, not for its telephone system; that said section could not refer to the
plaintiff's telephone system, because it did not have such telephone system when defendant acquired its
franchise. The implication of the argument is that plaintiff has to pay for the use of defendant's poles if
such use is for plaintiff's telephone system and has to pay also if it attaches more than one (1) ten-pin
cross-arm for telegraphic purposes.
As there is no proof that the telephone wires strain the poles of the PLDT more than the telegraph wires,
nor that they cause more damage than the wires of the telegraph system, or that the Government has
attached to the poles more than one ten-pin cross-arm as permitted by the PLDT charter, we see no point
in this assignment of error. So long as the burden to be borne by the PLDT poles is not increased, we see
no reason why the reservation in favor of the telegraph wires of the government should not be extended
to its telephone lines, any time that the government decided to engage also in this kind of communication.
In the ultimate analysis, the true objection of the PLDT to continue the link between its network and that
of the Government is that the latter competes "parasitically" (sic) with its own telephone services.
Considering, however, that the PLDT franchise is non-exclusive; that it is well-known that defendant
PLDT is unable to adequately cope with the current demands for telephone service, as shown by the
number of pending applications therefor; and that the PLDT's right to just compensation for the services
rendered to the Government telephone system and its users is herein recognized and preserved, the
objections of defendant-appellant are without merit. To uphold the PLDT's contention is to subordinate
the needs of the general public to the right of the PLDT to derive profit from the future expansion of its
services under its non-exclusive franchise.
WHEREFORE, the decision of the Court of First Instance, now under appeal, is affirmed, except in so far
as it dismisses the petition of the Republic of the Philippines to compel the Philippine Long Distance
Telephone Company to continue servicing the Government telephone system upon such terms, and for a
compensation, that the trial court may determine to be just, including the period elapsed from the filing
of the original complaint or petition. And for this purpose, the records are ordered returned to the court
of origin for further hearings and other proceedings not inconsistent with this opinion. No costs.
8. Cui vs. Arellano University, 2 SCRA 205
EMETERIO CUI, plaintiff-appellant,
vs.
ARELLANO UNIVERSITY, defendant-appellee.
G.A.S. Sipin, Jr., for plaintiff-appellant.
E. Voltaire Garcia for defendant-appellee.
CONCEPCION, J.:
Appeal by plaintiff Emeterio Cui from a decision of the Court of First Instance of Manila, absolving
defendant Arellano University from plaintiff's complaint, with costs against the plaintiff, and dismissing
defendant's counter claim, for insufficiency of proof thereon.
In the language of the decision appealed from:
The essential facts of this case are short and undisputed. As established by the agreement of facts
Exhibits X and by the respective oral and documentary evidence introduced by the parties, it
appears conclusive that plaintiff, before the school year 1948-1949 took up preparatory law
course in the defendant University. After finishing his preparatory law course plaintiff enrolled in
the College of Law of the defendant from the school year 1948-1949. Plaintiff finished his law
studies in the defendant university up to and including the first semester of the fourth year.
During all the school years in which plaintiff was studying law in defendant law college, Francisco
R. Capistrano, brother of the mother of plaintiff, was the dean of the College of Law and legal
counsel of the defendant university. Plaintiff enrolled for the last semester of his law studies in the
defendant university but failed to pay his tuition fees because his uncle Dean Francisco R.
Capistrano having severed his connection with defendant and having accepted the deanship and
chancellorship of the College of Law of Abad Santos University, plaintiff left the defendant's law
college and enrolled for the last semester of his fourth year law in the college of law of the Abad
Santos University graduating from the college of law of the latter university. Plaintiff, during all the
time he was studying law in defendant university was awarded scholarship grants, for scholastic
merit, so that his semestral tuition fees were returned to him after the ends of semester and when
his scholarship grants were awarded to him. The whole amount of tuition fees paid by plaintiff to
defendant and refunded to him by the latter from the first semester up to and including the first
semester of his last year in the college of law or the fourth year, is in total P1,033.87. After
graduating in law from Abad Santos University he applied to take the bar examination. To secure
permission to take the bar he needed the transcripts of his records in defendant Arellano
University. Plaintiff petitioned the latter to issue to him the needed transcripts. The defendant
refused until after he had paid back the P1,033 87 which defendant refunded to him as above
stated. As he could not take the bar examination without those transcripts, plaintiff paid to
defendant the said sum under protest. This is the sum which plaintiff seeks to recover from
defendant in this case.
Before defendant awarded to plaintiff the scholarship grants as above stated, he was made to sign
the following contract covenant and agreement:
"In consideration of the scholarship granted to me by the University, I hereby waive my right to
transfer to another school without having refunded to the University (defendant) the equivalent of
my scholarship cash.
(Sgd.) Emeterio Cui".
It is admitted that, on August 16, 1949, the Director of Private Schools issued Memorandum No. 38, series
of 1949, on the subject of "Scholarship," addressed to "All heads of private schools, colleges and
universities," reading:
1. School catalogs and prospectuses submitted to this, Bureau show that some schools offer full or
partial scholarships to deserving students for excellence in scholarship or for leadership in
extra-curricular activities. Such inducements to poor but gifted students should be encouraged.
But to stipulate the condition that such scholarships are good only if the students concerned
continue in the same school nullifies the principle of merit in the award of these scholarships.
2. When students are given full or partial scholarships, it is understood that such scholarships are
merited and earned. The amount in tuition and other fees corresponding to these scholarships
should not be subsequently charged to the recipient students when they decide to quit school or to
transfer to another institution. Scholarships should not be offered merely to attract and keep
students in a school.
3. Several complaints have actually been received from students who have enjoyed scholarships,
full or partial, to the effect that they could not transfer to other schools since their credentials
would not be released unless they would pay the fees corresponding to the period of the
scholarships. Where the Bureau believes that the right of the student to transfer is being denied on
this ground, it reserves the right to authorize such transfer.
that defendant herein received a copy of this memorandum; that plaintiff asked the Bureau of Private
Schools to pass upon the issue on his right to secure the transcript of his record in defendant University,
without being required to refund the sum of P1,033.87; that the Bureau of Private Schools upheld the
position taken by the plaintiff and so advised the defendant; and that, this notwithstanding, the latter
refused to issue said transcript of records, unless said refund were made, and even recommended to said
Bureau that it issue a written order directing the defendant to release said transcript of record, "so that
the case may be presented to the court for judicial action." As above stated, plaintiff was, accordingly,
constrained to pay, and did pay under protest, said sum of P1,033.87, in order that he could take the bar
examination in 1953. Subsequently, he brought this action for the recovery of said amount, aside from
P2,000 as moral damages, P500 as exemplary damages, P2,000 as attorney's fees, and P500 as expenses
of litigation.
In its answer, defendant reiterated the stand it took, vis-a-vis the Bureau of Private Schools, namely, that
the provisions of its contract with plaintiff are valid and binding and that the memorandum above-
referred to is null and void. It, likewise, set up a counterclaim for P10,000.00 as damages, and P3,000 as
attorney's fees.
The issue in this case is whether the above quoted provision of the contract between plaintiff and the
defendant, whereby the former waived his right to transfer to another school without refunding to the
latter the equivalent of his scholarships in cash, is valid or not. The lower court resolved this question in
the affirmative, upon the ground that the aforementioned memorandum of the Director of Private
Schools is not a law; that the provisions thereof are advisory, not mandatory in nature; and that, although
the contractual provision "may be unethical, yet it was more unethical for plaintiff to quit studying with
the defendant without good reasons and simply because he wanted to follow the example of his uncle."
Moreover, defendant maintains in its brief that the aforementioned memorandum of the Director of
Private Schools is null and void because said officer had no authority to issue it, and because it had been
neither approved by the corresponding department head nor published in the official gazette.
We do not deem it necessary or advisable to consider as the lower court did, the question whether
plaintiff had sufficient reasons or not to transfer from defendant University to the Abad Santos
University. The nature of the issue before us, and its far reaching effects, transcend personal equations
and demand a determination of the case from a high impersonal plane. Neither do we deem it essential to
pass upon the validity of said Memorandum No. 38, for, regardless of the same, we are of the opinion that
the stipulation in question is contrary to public policy and, hence, null and void. The aforesaid
memorandum merely incorporates a sound principle of public policy. As the Director of Private Schools
correctly pointed, out in his letter, Exhibit B, to the defendant,
There is one more point that merits refutation and that is whether or not the contract entered into
between Cui and Arellano University on September 10, 1951 was void as against public policy. In
the case of Zeigel vs. Illinois Trust and Savings Bank, 245 Ill. 180, 19 Ann. Case 127, the court said:
'In determining a public policy of the state, courts are limited to a consideration of the
Constitution, the judicial decisions, the statutes, and the practice of government officers.' It might
take more than a government bureau or office to lay down or establish a public policy, as alleged
in your communication, but courts consider the practices of government officials as one of the four
factors in determining a public policy of the state. It has been consistently held in America that
under the principles relating to the doctrine of public policy, as applied to the law of contracts,
courts of justice will not recognize or uphold a transaction which its object, operation, or tendency
is calculated to be prejudicial to the public welfare, to sound morality or to civic honesty (Ritter vs.
Mutual Life Ins. Co., 169 U.S. 139; Heding vs. Gallaghere 64 L.R.A. 811; Veazy vs. Allen, 173 N.Y.
359). If Arellano University understood clearly the real essence of scholarships and the motives
which prompted this office to issue Memorandum No. 38, s. 1949, it should have not entered into a
contract of waiver with Cui on September 10, 1951, which is a direct violation of our
Memorandum and an open challenge to the authority of the Director of Private Schools because
the contract was repugnant to sound morality and civic honesty. And finally, in Gabriel vs. Monte
de Piedad, Off. Gazette Supp. Dec. 6, 1941, p. 67 we read: 'In order to declare a contract void as
against public policy, a court must find that the contract as to consideration or the thing to be
done, contravenes some established interest of society, or is inconsistent with sound policy and
good morals or tends clearly to undermine the security of individual rights. The policy enunciated
in Memorandum No. 38, s. 1949 is sound policy. Scholarship are awarded in recognition of merit
not to keep outstanding students in school to bolster its prestige. In the understanding of that
university scholarships award is a business scheme designed to increase the business potential of
an education institution. Thus conceived it is not only inconsistent with sound policy but also good
morals. But what is morals? Manresa has this definition. It is good customs; those generally
accepted principles of morality which have received some kind of social and practical
confirmation. The practice of awarding scholarships to attract students and keep them in school is
not good customs nor has it received some kind of social and practical confirmation except in
some private institutions as in Arellano University. The University of the Philippines which
implements Section 5 of Article XIV of the Constitution with reference to the giving of free
scholarships to gifted children, does not require scholars to reimburse the corresponding value of
the scholarships if they transfer to other schools. So also with the leading colleges and universities
of the United States after which our educational practices or policies are patterned. In these
institutions scholarships are granted not to attract and to keep brilliant students in school for their
propaganda mine but to reward merit or help gifted students in whom society has an established
interest or a first lien. (Emphasis supplied.)
WHEREFORE, the decision appealed from is hereby reversed and another one shall be entered sentencing
the defendant to pay to the plaintiff the sum of P1,033.87, with interest thereon at the legal rate from
September 1, 1954, date of the institution of this case, as well as the costs, and dismissing defendant's
counterclaim. It is so ordered.

9. Saura vs. Sindico, 107 Phil 336
G.R. No. L-13403 March 23, 1960
RAMON E. SAURA, plaintiff-appellant,
vs.
ESTELA P. SINDICO, defendant-appellee.
Anacleto Magno for appellant.
Espeque and Jalandoni for appellee.
REYES, J. B. L., J.:
Appeal on issues of law from an order of the Court of First Instance of Pangasinan dismissing plaintiff's
complaint for damages.
From the records it appears that Ramon E. Saura and Estela P. Sindico were contesting for nomination as
the official candidate of the Nacionalista Party in the fourth district of Pangasinan in the congressional
elections of November 12, 1957. On August 23, 1957, the parties entered into a written agreement
bearing the same date, containing among other matters stated therein, a pledge that
Each aspirant shall respect the result of the aforesaid convention, i.e., no one of us shall either run
as a rebel or independent candidate after losing in said convention.
In the provincial convention held by the Nacionalista Party on August 31, 1957, Saura was elected and
proclaimed the Party's official congressional candidate for the aforesaid district of Pangasinan.
Nonetheless, Sindico, in disregard of the covenant, filed, on September 6, 1957, her certificate of
candidacy for the same office with the Commission on Elections, and she openly and actively campaigned
for her election. Wherefore, on October 5, 1957, plaintiff Saura commenced this suit for the recovery of
damages. Upon motion of the defendant, the lower court, in its order of November 19, 1957, dismissed
the complaint on the basis that the agreement sued upon is null and void, in tat (1) the subject matter of
the contract, being a public office, is not within the commerce of man; and (2) the "pledge" was in
curtailment of the free exercise of elective franchise and therefore against public policy. Hence, this
appeal.
We agree with the lower court in adjudging the contract or agreement in question a nullity. Among those
that may not be the subject matter (object) of contracts are certain rights of individuals, which the law
and public policy have deemed wise to exclude from the commerce of man. Among them are the political
rights conferred upon citizens, including, but not limited to, once's right to vote, the right to present one's
candidacy to the people and to be voted to public office, provided, however, that all the qualifications
prescribed by law obtain. Such rights may not, therefore, be bargained away curtailed with impunity, for
they are conferred not for individual or private benefit or advantage but for the public good and interest.
Constitutional and statutory provision fix the qualifications of persons who may be eligible for certain
elective public offices. Said requirements may neither be enlarged nor reduced by mere agreements
between private parties. A voter possessing all the qualifications required to fill an office may, by himself
or through a political party or group, present his candidacy without further limitations than those
provided by law.
Every voter has a right to be a candidate for public office if he possesses the qualifications required to
fill the office. It does not necessarily follow that he can be the candidate of a particular political
party. The statute provides when and how one may be a candidate of a political party. If he cannot
fill the requirement so as to be the candidates of the political party of his choice, he may still be a
candidate at the general election by petition. The right of the voter to vote at the general election for
whom he pleases cannot be limited. (Roberts vs. Cleveland, Secretary of State of State of New
Mexico, 48 NM 226, 149 P (2d) 120, 153 A.L.R. 635, 637-638) (Emphasis supplied)
In common law, certain agreements in consideration of the withdrawal of candidates for office have
invariably been condemned by the courts as being against public policy, be it a withdrawal from the race
for nomination or, after nomination, from the race for election. (See notes in 37 L. R. A. (N.S.) 289 and
cases cited therein; 18 Am. Jur. Sec. 352, pp. 399-400)
In the case at hand, plaintiff complains on account of defendant's alleged violation of the "pledge" in
question by filing her own certificate o candidacy for a seat in the Congress of the Philippines and in
openly and actively campaigning for her election. In the face of the preceding considerations, we certainly
cannot entertain plaintiff's action, which would result in limiting the choice of the electors to only those
persons selected by a small group or by party boses.
The case of Pendleton vs. Pace, 9 S.W. (2nd) 437, cited by the appellant, is clearly inapplicable. The court
there only sanctioned the validity of an agreement by the opposing candidates for nomination setting
aside and re-submitting the nomination for another primary election on account of the protest or contest
filed by the losing candidate in the first primary election. To abandon the contest proceedings, the
candidates for nomination agreed to submit again their nomination to the electors in the subsequent
primary.
Appellant likewise cites and quotes a portion of our ruling in Monsale vs. Nico, 83 Phil., 758; 46 Off. Gaz.,
210, to the effect that it is not incompetent or a candidate to withdraw or annul his certificate of
candidacy. This is not in point, for while we stated there that he may do so, there being no legal
prohibition against such a voluntary withdrawal, it does not follow, nor did we imply anywhere in the
decision, that in case there is any agreement or consideration for such a withdrawal, said agreement or
consideration should be held valid or given effect.
We find it unnecessary to discuss the other points raised by the parties.
Wherefore, the order of dismissal appealed from is hereby affirmed. No pronouncement as to costs.
10. Corpus vs. CA, 98 SCRA 424
G.R. No. L-40424 June 30, 1980
R. MARINO CORPUS, petitioner,
vs.
COURT OF APPEALS and JUAN T. DAVID, respondents

MAKASIAR, J.:
This is a petition for review on certiorari of the decision of the Court of Appeals promulgated on February
14, 1975 in CA-G.R. No. 40583-R, affirming the decision of the court of Instance of Manila, Branch V. dated
september 4, 1967, in Civil Case no. 61802 entitled "Juan T. David,plaintiff, versus R. Mariano Corpus,
defendant', for the recovery of attorneys fees for professional services rendered by the plaintiff, private
respondent herein, to defendant, petitioner herein.
A
Having been close friends, aside from being membres Civil Liberties Union, petitioner Corpus intimately
calls respondent David by his nickname "Juaning" and the latter addresses the former simply as "Marino".
The factual setting of this case is stated in the decision of the lower court, thus:
It appears that in March, 1958, the defendant was charged administratively by several
employee of the Central Bank Export Department of which the defendant is the director.
The defendant was represented by Atty. Rosauro Alvarez. Pending the investigation and
effective March 18, 1958, he defendant was suspended from office. After the investigating
committee found the administrative charges to be without merit, and subsequently
recommended the immediate reinstatement of the defendant, the then Governor of Central
Bank, Miguel Cuaderno, Sr., recommended that the defendant be considered resigned as on
the ground that he had lost confidence in him. The Monetary Board, by a resolution of July
20, 1959, declared the defendant as resigned as of the date of suspension.
On August 18, 1959, the defendant, thru Atty. Alvarez, filed the Court of First Instance of
Manila a petition for certiorari, mandamus and quo warranto with preliminary mandatory
injuction and damages against Miguel Cuaderno, Sr., the Central Bank and Mario Marcos
who was appointed to the position of the defendant, said case having been docketed as Civil
Case No. 41226 and assigned to Branch VII presided over by Judge Gregorio T. Lantin. On
September 7, 1959, the respondent filed a motion to dismiss the petition, alleging among
other grounds, the failure of the defendant to exhaust, available administrative remedies
(Exh. X). On September 25, 1959, the defendant, thru Atty. Alvarez, filed his opposition to
the said motion. On March 17, 1960, during the course of the presentation of the evidence
for the petition for a writ of preliminary mandatory injunction, Atty. Alvarez manifested
that the defendant was abandoning his prayer for a writ of preliminary mandatory
injunction and asked for a ruling on the motion to dismiss. On June 14, 1960, Judge Lantin
dismissed Civil Case No. 41226 for failure to exhaust she administrative remedies available
to the herein defendant.
On June 24, 1960, Atty. Alverez received a copy of the order of dismissal It was at this state
that the plaintiff entered into the case under circumstances about which the parties herein
have given divergent versions.
According to the plaintiff, six or seven days prior to the expiration of the period for appeal
from the order of dismissal, he chanced to meet the late Rafael Corpus, father of the
defendant, at the Taza de Oro coffee shop. After they talked about the defendant's having
lost his case before Judge Lantin, and knowing that the plaintiff and the defendant were
both members of the Civil Liberties Union, Rafael Corpus requested the plaintiff to go over
the case and further said that he would send his son, the herein defendant, to the plaintiff
to find out what could be done about the case. The defendant called up the plaintiff the
following morning for an appointment, and the plaintiff agreed to am him in the latter's
office. At said conference, the defendant requested the plaintiff to handle the case because
Atty. Alvarez had already been disenchanted and wanted to give up the case. Although at
first reluctant to handle the case, the plaintiff finally agreed on condition that he and Atty.
Alverez would collaborate in the case.
The defendant's version of how the plaintiff came into the case is as follows:
After the order of dismissal issued by Judge Lantin was published in the newspapers, the
plaintiff sought a conference with the defendant at Taza de Oro, but the defendant told him
that he would rather meet the plaintiff at the Swiss Inn. Even before the case was dismissed
the plaintiff had shown interest in the same by being present during the hearings of said
case in the sala of Judge Lantin When the plaintiff and the defendant met at the Swiss Inn,
the plaintiff handed the defendant a memorandum prepared by him on how he can secure
the reversal of the order of dismissal by means of a formula stated in said memorandum.
During the said occasion the plaintiff scribbled some notes on a paper napkin (Exhibit 19).
On June 28, 1960, the defendant wrote the plaintiff, sending with it a copy of the order of
Judge Lantin dated June 14, 1960 (Exhibit S Inasmuch as said letter, Exhibit S already
mentions the 'memorandum' of the plaintiff, the defendant contends that it was not six or
seven days prior to the expiration of the period of appeal (which should be on or about July
2 or 3, 1960) but on a date even earlier than June 28, 1960 that the plaintiff and the
defendant met together to discuss the latter's case.
Laying aside for the moment the true circumstances under which the plaintiff started
rendering professional services to the defendant, the undisputed evidence shows that on
July 7, 1960, the plaintiff filed a motion for reconsideration of the order of dismissal under
the joint signatures of the plaintiff and Atty. Alverez (Exhibit B). The plaintiff argued the
said motion during the hearing thereof On August 8, 1960, he file a 13-page 'Memorandum
of Authorities in support of said motion for reconsideration (Exhibit C). A 3-page
supplemental memorandum of authorities was filed by the plaintiff on September 6, 1960
(Exhibit D)
On November 15, 1960, Judge Lantin denied the motion for reconsideration. On November
19, 1960, the plaintiff perfected the appeal from the order of dismissal dated June 14, 1960.
For purposes of said appeal the plaintiff prepared a 232-page brief and submitted the same
before the Supreme Court in Baguio City on April 20, 1961. The plaintiff was the one who
orally argued the case before the Supreme Court. In connection with the trip to Baguio for
the said oral argument, the plaintiff used his car hich broke down and necessitated
extensive repairs paid for by the plaintiff himself.
On March 30, 1962, the Supreme Court promulgated its decision reversing the order of
dismissal and remanding the case for further proceedings. On April 18, 1962, after the
promulgation of the decision of the Supreme Court reversing the dismissal of the case the
defendant wrote the plaintiff the following letter, Exhibit 'Q'. .
x x x x x x x x x
Dear Juaning
Will you please accept the attached check in the amount of TWO THOUSAND P2,000.00)
PESOS for legal services in the handling of L-17860 recently decided by the Court? I wish I
could give more but as yu know we were banking on a SC decision reinstating me and
reimburse my backstage I had been wanting to offer some token of my appreciation of your
legal fight for and in my behalf, and it was only last week that I received something on
account of a pending claim.
Looking forward to a continuation of the case in the lower court, I remain
Sincerely yours, Illegible
x x x x x x x x x
In a reply letter dated April 25, 1962, the plaintiff returned the check, explaining said act as
follows:
April 25, 1962
My dear Marino:
Yesterday, I received your letter of April 18th with its enclosure. I wished thank you for
your kind thoughts, however, please don't take offense if I have to return the check. I will
explain.
When I decided to render professional services in your case, I was motivated by the value to
me of the very intimate relations which you and I have enjoyed during the past many years. It
was nor primarily, for a professional fee.
Although we were not fortunate to have obtained a decision in your case which should
have put an end to it. I feel that we have reason to be jubilant over the outcome, because, the
final favorable outcome of the case seems certain irrespective of the length of time required
to terminate the same.
Your appreciation of the efforts I have invested in your case is enough compensation therefor,
however, when you shall have obtained a decision which would have finally resolved the case
in your favor, remembering me then will make me happy. In the meantime, you will make me
happier by just keeping the check.
Sincerely yours,
JUANING
x x x x x x x x x
When the case was remanded for further proceedings before Judge Lantin, the evidence for
the defendant was presented by Atty. 'Alvarez with the plaintiff cooperating in the same-'On
June 24, 1963, Judge Lantin rendered his decision in favor of the defendant declaring illegal
the resolution of the Monetary Board of July 20, 1959, and ordering the defendant's
reinstatement and the payment of his back salaries and allowances - The respondents in said
Civil Case No. 41226 filed a motion for reconsideration which was opposed by the herein
plaintiff. The said decision was appealed by the respondents, as well as by the herein
defendant with respect to the award of P5, 000. 00 attorney's feed The plaintiff prepared two
briefs for submission to the Court of Appeals one as appellee (Exhibit H) and the other as
appellant (Exhibit H-1). The Court of Appeal however, certified the case to the Supreme Court
in 1964.
On March 31, 1965, the Supreme Court rendered a decision affirming the judgment of the
Court of first Instance of Manila.
On April 19, 1965 the plaintiffs law office made a formal de command upon the defendant for
collection of 50% of the amount recovered by the defendant as back salaries and other
emoluments from the Central Bank (Exhibit N). This letter was written after the defendant
failed to appear at an appointment with the plaintiff so that they could go together to the
Central Bank to claim the possession of the office to which the defendant was reinstated and
after a confrontation in the office of the plaintiff wherein the plaintiff was remanding 50% of
the back salaries and other emoluments amounting to P203,000.00 recoverable by the
defendant. The defendant demurred to this demand inasmuch as he had plenty of outstanding
obligations and that his tax liability for said back salaries was around P90,000.00, and that he
expected to net only around P10,000.00 after deducting all expenses and taxes.
On the same date, April 19,1965 the plaintiff wrote the Governor for of Central Bank
requesting that the amount representing the sack salaries of the defendant be made out in
two one in favor of the defendant and the other representing the professional fees
equivalent to 50% of the said back salaries being claimed by the plaintiff (Exhibit 8). F to
obtain the relief from the Governor of Central Bank, the plaintiff instituted this action
before this Court on July 20, 1965 (Emphasis supplied).
As therein defendant, herein petitioner Marino Corpus filed in August 5, 1965 an answer with counter-
claim. On August 30, 1965, private respondent Atty. Juan T. David, plaintiff therein, filed a reply with
answer to the counterclaim of petitioner.
After due trial, the lower court rendered judgment on September 4, 1967, the dispositive portion of
which reads:
WHEREFORE, judgment is hereby rendered, ordering the defendant to pay plaintiff the sum
of P30,000.00 in the concept of professional fees, and to pay the costs (pp. 112-113, CA
Record on Appeal p. 54, rec.)
After receipt on September 7, 1967 of a copy of the aforequoted judgment, petitioner Marino Corpus,
defendant therein, filed on October 7, 1967 a notice of appeal from said judgment to the Court of Appeals.
In his appeal, he alleged that the lower court erred:
1. In not holding that the plaintiff's professional services were offered and rendered
gratuitously;
2. Assuming that plaintiff is entitled to compensation in holding that he was entitled to
attorney's fees in the amount of P30,000.00 when at most he would be entitled to only
P2,500.00;
3. In not dismissing plaintiff's complaint; and
4. In not awarding damages and attorney's fees to the defendant (p. 2, CA Decision, p. 26,
rec.)
Likewise, private respondent Atty. Juan T. David, plaintiff therein, appealed to the Court of Appeals on
October 9, 1967 assigning one error, to wit:
The lower court erred in ordering the defendant to pay the plaintiff only the sum of
P30,000.00 in the concept of attorney's fees (p. 1, CA Decision, p. 25, rec.).
On February 14, 1975, respondent Court of Appeals promulgated its decision affirming in toto the
decision of the lower court, with costs against petitioner Marino Corpus (Annex A, Petition for Certiorari,
p. 25, rec.)
Hence, the instant petition for review on certiorari, petitioner contending that the respondent Court of
Appeals erred in finding that petitioner accepted private respondent's services "with the understanding
of both that he (private respondent) was to be compensated" in money; and that the fee of private
respondent was contingent (pp. 3 & 5, Petition for Certiorari, pp. 17 & 19, rec.).
On October 1, 1975, the case was deemed submitted for decision (p. 177, rec.), after the parties filed their
respective memoranda.
B
On January 31, 1978, private respondent Atty. Juan T. David filed a petition to remand the case to the
court a quo for execution of the latter's decision in Civil Case No. 61802, dated September 4, 1967,
alleging that said decision is already deemed affirmed pursuant to Section 11(2), Article X of the New
Constitution by reason of the failure of this Tribunal to decide the case within 18 months. Then on July 7,
1978, another petition to remand the case to the lower court to execution was filed by herein private
respondent.
Subsequently, private respondent Atty. Juan T. David filed with The court a quo a motion dated
September 13, 1978 for the issuance of a writ of execution of the lower court's decision in the aforesaid
civil case, also invoking Section 11 (2), Article X of the 1973 Constitution. In an order dated September
19, 1978, the lower court, through Judge Jose H. Tecson, directed the issuance of a writ of execution. The
writ of execution was issued on October 2, 1978 and a notice of garnishment was also issued n October
13, 1978 to garnish the bank deposits of herein petitioner Marino Corpus in the Commercial Bank and
Trust Company, Makati Branch.
It appears that on October 13, 1978, herein petitioner filed a motion for reconsideration of the September
19, 1978 order. Private respondent Atty. Juan T. David filed on October 19, 1978 an opposition to said
motion and herein petitioner filed a reply on October 30, 1978. The lower court denied said motion for
reconsideration in its over dated November 7, 1978.
It appears also that in a letter dated October 18, 1978, herein petitioner Marino Corpus requested this
Court to inquire into what appears to be an irregularity in the issuance of the aforesaid garnishment
notice to the Commercial Bank and Trust Company, by virtue of which his bank deposits were garnished
and he was prevented from making withdrawals from his bank account.
In OUR resolution of November 3, 1978, WE required private respondent Atty. Juan T. David and the
Commercial Bank and Trust Company to comment on petitioner's letter, and for the bank to explain why
it did not honor petitioner's withdrawals from his bank deposits when no garnishment order has been
issued by the Supreme Court. This Court further inquired from the lower court whether it has issued any
garnishment order during the pendency of the present case.
On November 27, 1978, the Commercial Bank and Trust Company filed its comment which was noted in
the Court's resolution of December 4, 1978. In said resolution, the Court also required Judge Jose H.
Tecson to comply with the resolution of November 3, 1978, inquiring as to whether he had issued any
garnishment order, and to explain why a writ of execution was issued despite the pendency of the
present case before the Supreme Court.
Further, WE required private respondent Atty. Juan T. David Lo explain his failure to file his comment,
and to file the same as directed by the resolution of the Court dated November 3, 1978. Private
respondent's compliance came on December 13, 1978, requesting to be excused from the filing of his
comment because herein petitioner's letter was unverified. Judge Tecson's compliance was filed on
December 15, 1978, to which herein petitioner replied on January 11, 1979.
In OUR resolution dated January 3, 1979, WE set aside the order of Judge Jose H. Tecson dated September
19, 1978, the writ of execution as well as the notice of garnishment, and required private respondent
Atty. Juan T. David to show cause why he should not be cited for contempt for his failure to file his
comment as directed by the resolution of the Court dated December 4, 1978, and for filing a motion for
execution knowing that the case is pending appeal and review before this Court Likewise, the Court
required Judge Jose H. Tecson to show cause why he should not be cited for contempt for issuing an order
directing the issuance of a writ of execution and for issuing such writ despite the pendency of the present
case in the Supreme Court.
On January 12, 1979, Judge Jose H. Tecson filed his compliance explanation as directed by the aforesaid
resolution of January 3, 1979, while private respondent Atty. Juan T. David filed on January 30, 19 79 his
compliance and motion for reconsideration after the Court has granted him an extension of time to file
his compliance.
Private respondent Atty. Juan T. David filed on February 28, 1979, a petition praying that the merits of his
compliance be resolved by the Court en banc. Subsequently, on March 26, 1979, another petition was filed
by herein private respondent asking the Chief
Justice and the members of the First Division to inhibit themselves from participating in the
determination of the merits of his compliance and for its merits to be resolved by the Court en banc.
C
The main thrust of this petition for review is whether or not private respondent Atty. Juan T. David is
entitled to attorney's fees.
Petitioner Marino Corpus contends that respondent David is not entitled to attorney's fees because there
was no contract to that effect. On the other hand, respondent David contends that the absence of a formal
contract for the payment of the attorney's fees will not negate the payment thereof because the contract
may be express or implied, and there was an implied understanding between the petitioner and private
respondent that the former will pay the latter attorney's fees when a final decision shall have been
rendered in favor of the petitioner reinstating him to -his former position in the Central Bank and paying
his back salaries.
I
WE find respondent David's position meritorious. While there was express agreement between petitioner
Corpus and respondent David as regards attorney's fees, the facts of the case support the position of
respondent David that there was at least an implied agreement for the payment of attorney's fees.
Petitioner's act of giving the check for P2,000.00 through his aforestated April 18, 1962 letter to
respondent David indicates petitioner's commitment to pay the former attorney's fees, which is stressed
by expressing that "I wish I could give more but as you know we were banking on a SC decision
reinstating me and reimbursing my back salaries This last sentiment constitutes a promise to pay more
upon his reinstatement and payment of his back salaries. Petitioner ended his letter that he was "looking
forward to a continuation of the case in the lower court, ... to which the certiorari-mandamus-quo
warranto case was remanded by the Supreme Court for further proceedings.
Moreover, respondent David's letter-reply of April 25, 1962 confirms the promise of petitioner Corpus to
pay attorney's fees upon his reinstatement and payment of back salaries. Said reply states that
respondent David decided to be his counsel in the case because of the value to him of their intimate
relationship over the years and "not, primarily, for a professional fee." It is patent then, that respondent
David agreed to render professional services to petitioner Corpus secondarily for a professional fee. This
is stressed by the last paragraph of said reply which states that "however, when you shall have obtained a
decision which would have finally resolved the case in your favor, remembering me then will make me
happy. In the meantime, you will make me happier by just keeping the check." Thereafter, respondent
David continued to render legal services to petitioner Corpus, in collaboration with Atty. Alverez until he
and Atty. Alvarez secured the decision directing petitioner's reinstatement with back salaries, which legal
services were undisputedly accepted by, and benefited petitioner.
Moreover, there is no reason to doubt respondent David's assertion that Don Rafael Corpus, the late
father of petitioner Corpus, requested respondent to help his son, whose suit for reinstatement was
dismissed by the lower court; that pursuant to such request, respondent conferred in his office with
petitioner, who requested respondent to handle the case as his lawyer, Atty. Alvarez, was already
disenchanted and wanted to give up the case; and that respondent agreed on the case. It would have been
unethical for respondent to even offer his services when petitioner had a competent counsel in the
person of Atty. Alvarez, who has been teaching political, constitutional and administrative law for over
twenty years.
Likewise, it appears that after the Supreme Court affirmed on March 31, 1965 the order of the lower
court reinstating petitioner Corpus with back salaries and awarding attorney's fees of P5,000.00,
respondent David made a written demand on April 19, 1965 upon petitioner Corpus for the payment of
his attorney's fees in an amount equivalent to 50% of what was paid as back salaries (Exh. N p. 75, Folder
of Exhibits, Civil Case No. 61802). Petitioner Corpus, in his reply dated May 7, 1965 to the aforesaid
written demand, while disagreeing as to the amount of attorney's fees demanded, did not categorically
deny the right of respondent David to attorney's fees but on the contrary gave the latter the amount of
P2,500.00, which is one-half () of the court-awarded attorney's fees of P5,000.00, thus impliedly
admitting the right of respondent David to attorney's fees (Exh. K, p. 57, Folder of Exhibits, Civil Case No.
61802).
It is further shown by the records that in the motion filed on March 5, 1975 by petitioner Corpus before
the Court of Appeals for the reconsideration of its decision the order of the lower court granting
P30,000.00 attorney's fee's to respondent David, he admitted that he was the first to acknowledge that
respondent David was entitled to tion for legal services rendered when he sent the chock for P2,000.00 in
his letter of April 18, 1962, and he is still to compensate the respondent but only to the extent of
P10,000.00 (p. 44, rec.). This admission serves only to further emphasize the fact that petitioner Corpus
was aware all the time that he was liable to pay attorney's fees to respondent David which is therefore
inconsistent with his position that the services of respondent David were gratuitous, which did not entitle
said respondent to compensation.
It may be advanced that respondent David may be faulted for not reducing the agreement for attorney's
fees with petitioner Corpus in writing. However, this should be viewed from their special relationship. It
appears that both have been friends for several years and were co-members of the Civil Liberties Union.
In addition, respondent David and petitioner's father, the late Rafael Corpus, were also close friends.
Thus, the absence of an express contract for attorney's fees between respondent David and petitioner
Corpus is no argument against the payment of attorney's fees, considering their close relationship which
signifies mutual trust and confidence between them.
II
Moreover, the payment of attorney's fees to respondent David may also be justified by virtue of the
innominate contract of facio ut des (I do and you give which is based on the principle that "no one shall
unjustly enrich himself at the expense of another." innominate contracts have been elevated to a codal
provision in the New Civil Code by providing under Article 1307 that such contracts shall be regulated by
the stipulations of the parties, by the general provisions or principles of obligations and contracts, by the
rules governing the most analogous nominate contracts, and by the customs of the people. The rationale
of this article was stated in the 1903 case of Perez vs. Pomar (2 Phil. 982). In that case, the Court
sustained the claim of plaintiff Perez for payment of services rendered against defendant Pomar despite
the absence of an express contract to that effect, thus:
It does not appear that any written contract was entered into between the parties for the
employment of the plaintiff as interpreter, or that any other innominate contract was
entered into but whethertheplaintiffsservicesweresolicitedorwhethertheywereoffered to
the defendant for his assistance, inasmuch as these services were accepted and made use of
by the latter, we must consider that there was a tacit and mutual consent as to the
rendition of the services. This gives rise to the obligation upon the person benefited by the
services to make compensation therefor, since the bilateral obligation to render service as
interpreter, on the one hand, and on the other to pay for the service rendered, is thereby
incurred. (Arts. 1088, 1089, and 1262 of the Civil Code).
x x x x x x x x x
... Whether the service was solicited or offered, the fact remains that Perez rendered to
Pomar services as interpreter. As it does not appear that he did this gratuitously, the duty is
imposed upon the defendant, he having accepted the benefit of the service, to pay a just
compensation therefor, by virtue of the innominate contract of facio ut des implicitly
established.
x x x x x x x x x
... because it is a well-known principle of law that no one should permitted to enrich himself
to the damage of another" (emphasis supplied; see also Tolentino, Civil Code of the
Philippines, p. 388, Vol. IV 119621, citing Estate of Reguera vs. Tandra 81 Phil. 404 [1948];
Arroyo vs. Azur 76 Phil. 493119461; and Perez vs. Pomar. 2 Phil. 682 [1903]).
WE reiterated this rule in Pacific Merchandising Corp. vs. Consolacion Insurance & Surety Co., Inc. (73 SCRA
564 [1976]) citing the case of Perez v. Pomar, supra thus:
Where one has rendered services to another, and these services are accepted by the latter,
in the absence of proof that the service was rendered gratuitously, it is but just that he
should pay a reasonable remuneration therefor because 'it is a well-known principle of law,
that no one should be permitted to enrich himself to the damage of another (emphasis
supplied).
Likewise, under American law, the same rule obtains (7 CJS 1079; FL Still & Co. v. Powell, 114 So 375).
III
There was no contract for contingent fee between Corpus and respondent David. Contingent fees depend
on an express contract therefor. Thus, "an attorney is not entitled to a percentage of the amount
recovered by his client in the absence of an express contract to that effect" (7 C.J.S. 1063 citing Thurston
v. Travelers Ins. Co., 258 N.W. 66, 128 Neb. 141).
Where services were rendered without any agreement whatever as to the amount or terms
of compensation, the attorney is not acting under a contract for a contingent fee, and a
letter by the attorney to the client stating that a certain sum would be a reasonable amount
to charge for his services and adding that a rate of not less than five percent nor more than
ten would be reasonable and customary does not convert the original agreement into a
contract for a contingent fee (7 C.J.S. 1063 citing Fleming v. Phinizy 134 S.E. 814).
While there was no express contract between the parties for the payment of attorney's fees, the fact
remains that respondent David rendered legal services to petitioner Corpus and therefore as aforestated,
is entitled to compensation under the innominate contract of facio lit des And such being the case,
respondent David is entitled to a reasonable compensation.
IV
In determining a reasonable fee to be paid to respondent David as compensation for his services, on a
quantum meruit basis, it is proper to consider all the facts and circumstances obtaining in this case
particularly the following:
The extent of the services rendered by respondent David should be considered together with the extent
of the services of Petitioner's other counsel, Atty. Rosauro Alvarez, It is undisputed that Atty. Rosauro
Alvarez had rendered legal services as principal counsel for more shall six (6) years while respondent
David has rendered legal services as collaborating counsel for almost four (4) years. It appears that Atty.
Alvarez started to render legal services after the administrative case was filed on March 7, 1958 against
petitioner Corpus. He represented petitioner Corpus in the hearing of said case which was conducted
from May 5, 1958 to October 8, 1958, involving 56 sessions, and this resulted in the complete exoneration
by the Investigating Committee of all the charges against the petitioner. It appears further that after the
Monetary Board, in its resolution of July 20, 1959, declared petitioner Corpus as being considered
resigned from the service, Atty. Alvarez instituted on August 18, 1958 Civil Case No. 41126 in the Court of
First Instance of Manila for the setting aside of the aforestated resolution and for the reinstatement of
petitioner Corpus. Atty. Alvarez actively participated in the proceedings.
On the other hand, respondent David entered his appearance as counsel for petitioner Corpus sometime
after the dismissal on June 14, 1960 of the aforesaid civil case. From the time he entered his appearance,
both he and Atty. Alvarez rendered legal services to petitioner Corpus in connection with the appeals of
the aforementioned civil case to the Court of Appeals and to the Supreme Court. The records disclose that
in connection with the appeal from the June 14, 1960 order of dismissal, respondent David prepared and
signed pleadings although the same were made for and on behalf of Atty. Alvarez and himself And it is not
far-fetched to conclude that all appearances were made by both counsels considering that Atty. Alverez
was the principal counsel and respondent David was the collaborating counsel. Thus, when the case was
called for oral argument on April 20, 1961 before the Supreme Court, respondent David and Atty. Alverez
appeared for petitioner Corpus although it was David who orally argued the case.
When the Supreme Court, in its decision of March 30, 1962, remanded the case to the lower court for
further it was Atty. Alverez who conducted the presentation of evidence while respondent David assisted
him The records also review that respondent David prepared and signed for Atty. Alverez and himself.
certain pleadings, including a memorandum. Moreover, after the lower court rendered judgment on June
2 4, 1963 ordering the reinstatement and payment of back salaries to petitioner Corpus and awarding
him P5,000.00 by way of attorney's fees, both petitioner Corpus and the respondents in said case
appealed the judgment. At that stage, respondent David again prepared and signed for Atty. Alvarez and
himself, the necessary pleadings, including two appeal briefs. And in addition, he made oral arguments in
the hearings of motions filed in the lower court before the records of the case were forwarded to the
appellate court. Furthermore, while it appears that it was Atty. Alvarez who laid down the basic theory
and foundation of the case of petitioner Corpus in the administrative case and later in the civil case,
respondent David also advanced legal propositions. Petitioner Corpus contends that said legal
propositions were invariably rejected by the courts. This is, however, of no moment because the fact
remains that respondent David faithfully rendered legal services for the success of petitioner's case.
The benefits secured for petitioner Corpus may also be considered in ascertaining what should be the
compensation of respondent David. It cannot be denied that both Atty. Alvarez and respondent David
were instrumental in obtaining substantial benefits for petitioner Corpus which consisted primarily of his
reinstatement, recovery of back salaries and the vindication of his honor and reputation. But, note should
also be taken of the fact that respondent David came at the crucial stage when the case of petitioner
Corpus was dismissed by the lower court.
Atty. Rosauro Alvarez admittedly was paid by petitioner Corpus the sum of P20,000.00 or at most
P22,500.00 (T.s.n., Jan. 11, 1967, pp. 34-35; T.s.n., Feb. 10, 1967, pp. 48-49). On the other hand, petitioner
Corpus, after WE suggested on August 15, 1975 that they settle the case amicably has, in his September
15, 1975 pleading filed before this Court (p. 166, rec.), manifested his willingness to pay P10,000.00 for
the services of respondent David. However, respondent David has not manifested his intention to accept
the offer.
In his complaint in the instant case, he asked for P75,000.00 as his attorney's fees. The records reveal that
petitioner Corpus actually received only P150,158.50 as back salaries and emoluments after deducting
taxes as well as retirement and life insurance premiums due to the GSIS. The amount thus claimed by
respondent David represents 50% of the amount actually received by petitioner Corpus. The lower court,
however, awarded only P30,000.00 and it was affirmed by the Court of Appeals.
Considering the aforestated circumstances, WE are of the opinion that the reasonable compensation of
respondent David should be P20,000.00.
V
WE find private respondent Juan T. David and Judge Jose H. Tecson, Presiding Judge of the Court of First
Instance of Manila, Branch V, guilty of contempt of court.
Respondent David filed on or about September 13, 1978 a motion with the court a quo for the issuance of
a writ of execution to enforce its decision in Civil Case No 61802, subject of the present petition, knowing
fully well that it was then still pending appeal before this Court. In addition, no certification that the
aforesaid decision is already deemed affirmed had as yet been issued by the Chief Justice pursuant to
Section 11, paragraph 2, Article X of the New Constitution; because respondent David's petitions filed
with the Supreme Court on January 31, 1978 and on July 7, 1978 to remand the case to the trial court for
execution and for the issuance of such certification had not yet been acted upon as the same were still
pending consideration by this Court. In fact, this Court has not as of this time made any pronouncement
on the aforesaid provision of the New Constitution.
This act of respondent David constitutes disrespect to, as well as disregard of, the authority of this Court
as the final arbiter of all cases duly appealed to it, especially constitutional questions. It must be
emphasized that as a member of the Philippine Bar he is required "to observe and maintain the respect
due to the court of justice and judicial officers" (Section 20 (b), 138 of the Revised Rules of Court).
Likewise, Canon 1 of. the Canons of Professional Ethic expressly provide that: "It is the duty of the lawyer
to maintain towards the Courts a respectful attitude, not for the sake of the temporary incumbent of the
judgement office, but for the maintenance of its supreme importance." And this Court had stressed that
"the duty of an attorney to the courts 'can only be maintained by rendering no service involving any
disrespect to the judicial office which he is bound to uphold'" (Rheem of the Philippines v. Ferrer, 20
SCRA 441, 444 [1967] citing the case of Lualhati v. Albert, 67 Phil. 86, 92 [1932]).
Moreover, this Court takes judicial notice of the fact that herein respondent David, in the previous case of
Integrated Construction Services, Inc. and Engineering Construction, Inc. v. Relova (65 SCRA 638 [1975]),
had sent letters addressed to the then Chief Justice Querube C. Makalintal and later to the late Chief
Justice Fred Ruiz Castro, requesting for the issuance of certification on the basis of the aforementioned
provision of the New Constitution which were not given due consideration. And knowing this, respondent
David should have been more prudent and cautious in g with the court a quo any motion for execution.
Furthermore, there was even a taint of arrogance and defiance on the part of respondent David in not
filing his comment to the letter- complaint dated October 18, 1978 of petitioner Corpus, as required by
this Court in its November 3, 1978 and December 4,1978 resolutions which were duly received by him,
and instead, he sent on December 13, 1978 a letter requesting to be excused from the filing of his
comment on the lame excuse that petitioner's letter-complaint was not verified.
On the part of Judge Jose H. Tecson, his presumptuous and precipitate act of granting the motion for
execution of dent David likewise constitutes disrespect to, as well as of, the authority of this Court
because he know for a that the case was still pending apply as the had not yet been remanded to it and
that no certification has been issued by this Court. As a judicial officer, Judge Tecson is charged with the
knowledge of the fact that this Court has yet to make a definite pronouncement on Section 11, paragraph
2, Article X of the New Constitution. Judge Tecson should know that only the Supreme Court can
authoritatively interpret Section 11 (2) of Article X of the 1973 Constitution. Yet, Judge Tecson assumed
the role of the Highest Court of the Land. He should be reminded of what Justice Laurel speaking for the
Court, has said in People v. Vera (65 Phil 56, 82 [1937]):
A becoming modesty of inferior courts demands conscious realization of the position that
they occupy in the interrelation and operation of the integrated judged system of the
nation.
It may also be added that the improvident act of respondent David in firing the motion for execution and
the precipitate act of Judge Tecson in issuing the writ of execution are intriguing as they invite suspicion
that there was connivance between the two. Respondent David would seem to imply that his claim for
attorney's fees should be given preference over the other cams now pending in this Court. Certainly, such
should not be the case because there are cases which by their nature require immediate or preferential
attention by this Tribunal like habeas corpus cases, labor cases and c cases involving death sentence, let
alone cases involving properties and property rights of poor litigants pending decision or resolution long
before the New Constitution of 1973. Nobility and exempt forbearance were expected of Atty. David, who
is old and experienced in the practice of the legal profession, from which he has derived a great measure.
of economic well-being and independence
Consequently, the filing of the motion for immediate tion and the issuance of the writ of execution
constitute a defiance and usurpation of the jurisdiction of the Supreme Court. As a disciplinary measure
for the preservation and vindication of the dignity of this Supreme Tribunal respondent Atty. Juan T.
David should be REPRIMANDED for his precipitate action of filing a motion for execution as well as Judge
Jose H. Tecson for his improvident issuance of a writ of execution while the case is pending appeal before
the Supreme Court, and a repetition of said acts would be dealt with more severely.
WHEREFORE, PETITIONER R. MARINO CORPUS IS HEREBY DIRECTED TO PAY RESPONDENT ATTY.
JUAN T. DAVID THE SUM OF TWENTY THOUSAND (P20,000.00) PESOS AS ATTORNEY'S FEES.
RESPONDENT ATTY. JUAN T. DAVID AND JUDGE JOSE H. TECSON OF THE COURT OF FIRST INSTANCE
OF MANILA, BRANCH V, ARE HEREBY DECLARED GUILTY OF CONTEMPT AND ARE HEREBY
REPRIMANDED, WITH A WARNING THAT REPETITION TION OF THE SAME OR SIMILAR ACTS WILL BE
DEALT WITH MORE SEVERELY.
COSTS AGAINST PETITIONER.
SO ORDERED.