Pichel vs. Alonzo 111 SCRA 341

digested by LLB 1-4 College of Law, Polytechnic University of the Philippines

Facts: This case originated in the lower Court as an action for the annulment of a "Deed of Sale" dated August 14, 1968 and executed by Prudencio Alonzo, as vendor, in favor of Luis Pichel, as vendee, involving property awarded to the former by the Philippine Government under Republic Act No. 477. That the sale of the coconut fruits are for all the fruits on the aforementioned parcel of land presently found therein as well as for future fruits to be produced on the said parcel of land during the years period; which shall commence to run as of SEPTEMBER 15,1968; up to JANUARY 1, 1976.

In July 1972, defendant for the first time since the execution of the deed of sale in his favor, caused the harvest of the fruit of the coconut trees in the land.

Issue: Whether or not the agreement in question is denominated by the parties as a deed of sale of fruits of the coconut trees found in the vendor's land or it actually is, for all legal intents and purposes, a contract of lease of the land itself?

Held: The Supreme Court ruled that construction or interpretation of the document in question is not called for. A perusal of the deed fails to disclose any ambiguity or obscurity in its provisions, nor is there doubt as to the real intention of the contracting parties. The terms of the agreement are clear and unequivocal, hence the literal and plain meaning thereof should be observed. Such is the mandate of the Civil Code of the Philippines which provides that:

Art. 1370. If the terms of a contract are clear and leave no doubt upon the intention of the contracting parties, the literal meaning of its stipulation shall control ... .

Pursuant to the afore-quoted legal provision, the first and fundamental duty of the courts is the application of the contract according to its express terms, interpretation being resorted to only when such literal application is impossible. 9 The provisions of the contract itself and its characteristics govern its nature. 4

Simply and directly stated, the "Deed of Sale dated August 14, 1968 is precisely what it purports to be. It is a document evidencing the agreement of herein parties for the sale of coconut fruits of Lot No. 21, and not for the lease of the land itself as found by the lower Court. In clear and express terms, the document defines the object of the contract thus: "the herein sale of the coconut fruits are for the fruits on the aforementioned parcel of land during the years (from) SEPTEMBER 15, 1968; up to JANUARY 1, 1976." Moreover, as petitioner correctly asserts, the document in question expresses a valid contract of sale. It has the essential elements of a contract of sale as defined under Article 1485 of the New Civil Code which provides thus:

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

Manila Trading and Supply Co. vs. Santos Saez 66 Phil. 237

Digested by LLB 1-4 College of Law, Polytechnic University of the Philippines

Facts: Manila Trading and Supply Co., the plaintiff sold to Santos Saez, the defendant a determinate equipment. There was an unpaid balance amounting to P2,200.00. Defendant executed 20 promissory notes, the first three installments for P150 each and the others for P100 payable on the 16th day of every month beginning November 16, 1933 and mortgage the said equiptment as a security.The defendant failed to pay any of the promissory notes, the plaintiff attached the chattel mortgage and was sold in public auction in accordance with Act No.1508 for P700.00 in favor of the plaintiff as the highest bidder.

Defendant still owed the plaintiff for P1,897.55. The plaintiff filed an action for the payment of the unpaid balance. The defendant claimed that the plaintiff’s action will not prosper because it is contrary to Act No.4122. The lower court favored the plaintiff, hence this appeal was filed.

Issue: Whether or not the plaintiff had a right to a deficiency in conformity with the Chattel Mortgage Law (Act No.4122)?

RULING: The court held that Act No.4122 has no application with this case otherwise it would be given a retroactive effect. The said act is not applicable to this case for the reason that the mortgage which gave rise to the plaintiff’s requirements was executed on October 3, 1933 and the aforesaid act took effect on December 9, 1933. The action is the correlative of a right and is nothing more than a remedy conceded by law to protect.

If the plaintiff was entitled to the deficiency, judgment under Act No 1508, this right already existed when Act No.4122 was approved and cannot be effected by the prohibition contained in the latter Act. The court did not err in declaring AAct No.4122 to be inapplicable and in ruling that the plaintiff is entitled to the deficiency jjudgment in accordance with Act No.1508.