G.R. No. L-1183. October 19, 1953
NICOLAS C. MERCADO AND SINFOROSO MERCADO, PLAINTIFFS AND APPELLANTS VS. BENITO GO BIO, DEFENDANT AND APPELLEE.
PADILLA, J.:
The suit as brought in the Court of First Instance of Manila (civil
case No. 55449) to annul a contract of sale and another of lease on two
parcels of land and the improvements erected thereon described in the
complaint, on the ground that the deed of sale purporting to convey to
the defendant the parcels of land and improvements thereon is not a
sale with the right to repurchase but a mortgage to secure the payment
of a loan. The deed of sale was executed by Nicolas C. Mercado in favor
of Benito Go Bio, and the contract of lease was executed by the latter
in favor of Sinforoso Mercado.
The answer of the defendant is
a general denial and a plea that he is the owner and actually in
possession of the parcels of land and improvements thereon, as
evidenced by his title thereto—transfer certificate No. 53004.
On 13 February 1940, judgment was rendered upon a stipulation which reads, as follows:
Practicadas
ya las pruebas de los demandantes, y en el curso del interrogatorio al
propio demandado, las partes, asistidas de sus respectivos abogados,
optaron por someter a decision la causa mediante el siguiente—CONVENIO
- Que el demandado Benito Go Bio otorgara una escritura de venta absoluta
a favor del demandante Nicolas C. Mercado de la finca objeto de la
presente demanda, al pagarse por este a aquel las siguientes sumas, a
saber:(a) La cantidad de P26,618.54;
(b) La suma de P200 por cada mes, desde el 1.° de Mayo de 1939 hasta el
29 de Febrero de 1940, o sea, un total de P2,000, que se pagara en la
fecha en que los demandantes optasen por ejercer su derecho de comprar
la finca, segun los presentes terminos de este convenio; (c) El
amillaramiento y prima de seguro de la finca en cuestion, desde el año
1939 hasta el tiempo de efectuarse la compra; y (d) Las cantidades que
se adjudicasen a favor de la Occidental Hardware Co., Inc., o sea, al
demandado Benito Go Bio en la causa civil No. 55010, y civil No. 55011,
ambas de este mismo Juzgado.- Que el demandante Nicolas C. Mercado debera ejercer esta opcion dentro
del periodo de cinco (5) años, contados desde el 21 de Febrero de 1938;- Que el demandante Nicolas C. Mercado, Dentro de los diez (10) primeros
dias de cada mes, pagara la suma de P200, empezando el mes de Marzo de
este año; hasta la fecha del otorgamiento de la escritura mencionada en
el parrafo primero de este convenio; entendiendose, que la falta de
pago de esta mensualidad, tal como se estipula en este parrafo, dara
por rescindida y cancelada la opcion concedida al demandante Nicolas C.
Mercado de comprar la finca objeto de esta demanda, y a peticion del
demandado, podra ordenarsa la entrega de la referida finca al citado
demandado Benito Go Bio, mediante ejecucion de sentencia;- Que el demandado Go Bio se compromete como parte de este convenio, a
pedir inmediatamente el sobreseimiento de la demanda por desahucio en
el Juzgado Municipal de Manila, Civil No. 120736, sin costas;- Que el demandante Nicolas C. Mercado podra ejercer el derecho de
comprar la finca en cuestion, tal como se conviene en esta
estipulacion, sin esperar la terminacion de los dos asuntos ya
mencionados, siempre y cuando dicho demandante Nicolas C. Mercado ponga
una garantia satisfactoria en la suma de P5,000 en la causa civil No.
55010 y P2,000 en la causa civil No. 55011, ya sea en finca de Manila
cuyo valor amillarado no sea menor de esas cantidades, o mediante una
fianza de una compañia afianzadora, sin costas.
BENITO GO BIO NICOLAS C. MERCADO Demandado Demandante FRANCISCO ASTILLA CIPRIANO DE LOS REYES Abogado del demandante Abogado del demandado Manila Manila Por: POR TANTO, no encontrando el juzgado ningun fundamento legal en contra,
por la presente, se aprueba el convenio arriba acotado y dicta
sentencia de acuerdo con el mismo, ordenando a las partes que cumplan
con los terminos convenidos, sin especial pronunciamiento en cuanto a
las costas.ASI SE ORDENA.
Manila, Febrero 13, 1940.
In
the same court but in another branch, there were pending two civil
cases, wherein the parties are Occidental Hardware Co., Inc., vs. Sinforoso Mercado (No. 55010) and Benito Go Bio vs. Sinforoso Mercado (No. 55011). On 24 June 1940, judgment was rendered in said two cases upon the following stipulation:
In the two above-entitled cases the parties have submitted the following:
STIPULATION
COME now the parties in the above-entitled cases and to this Honorable Court respectfully submit the following stipulation:
- Plaintiff company in said Civil Case No. 55010 and plaintiff Benito Go
Bio in said Civil Case No. 55011 agree to the settlement of the present
cases, relieving defendant Sinforoso Mercado in both said cases from
any and whatever liability upon payment to Benito Go Bio, president and
general manager of said Occidental Hardware Co., Inc., by Nicolas C.
Mercado of the sum of P30,000 within ninety (90) days from this date.
Said payment of P30,000 shall likewise be in full and final settlement
of the obligation due Benito Go Bio from Nicolas C. Mercado as
specified in the decision in civil case No. 55449 of this court,
entitled Nicolas C. Mercado and Sinforoso Mercado, plaintiffs, vs. Benito Go Bio, defendant.- Should Nicolas C. Mercado fail to pay said sum of P30,000 to Benito Go
Bio within the said ninety-day period, said Sinforoso Mercado shall pay
Benito Go Bio the sum of P2,500 within a period of five (5) years from
this date, without interest.WHEREFORE, it is
respectfully prayed that judgment be rendered in the above-entitled
cases in accordance with the foregoing stipulation, without special
pronouncement as to costs.Manila, June 24, 1940.
OCCIDENTAL HARDWARE CO., INC. BENITO GO BIO Plaintiff In Civil Case No. 55010 (Sgd.) BENITO GO BIO Plaintiff In Civil Case No. 55011 (Sgd.) S. MERCADO Defendant In both Civil Cases Nos. 55010 and 55011
IN VIEW OF THE FOREGOING, judgment is hereby rendered in accordance with the above-stipulation, without special
pronouncement as to costs.IT IS SO ORDERED.
Manila, Philippines, June 24, 1940.
On
15 January 1943, the defendant in this case (No. 55449) moved for the
execution of the judgment rendered on 13 February 1940, on the ground
that Nicolas C. Mercado had failed to pay monthly the sum of P200 from
December 1941 to the date of the motion. In their pleading filed on 23
January 1943, the plaintiffs objected to the motion, claiming that if
they had not paid the monthly rental it was due to the fact that the
defendant had failed to go to their office at No. 1100 Calle Narra to
collect monthly the said sum of P200; that the defendant’s office where
the plaintiffs attempted to make the payment of the monthly rental was
closed; and that the defendant insisted on collecting the full monthly
rent of P200 despite the fact that it was reduced to one-half by
Executive Order No. 117 of the Executive Commission. The plaintiffs
further claimed that the defendant had advised them that they would be
allowed to repurchase the property on or before 21 February 1943, but
that they replied that the period for the repurchase was extended to 24
June 1940 in civil cases Nos. 55010 and 55011. On 13 February 1943, the
plaintiffs filed an urgent motion praying that the defendant be ordered
to submit a complete statement of their total liability and that should
he fail to do so they be allowed to repurchase the property on 15
February 1943 at 12:00 noon. On the last mentioned date, the defendant
objected to the preceding motion upon the ground, among others, that
the option to repurchase granted to Nicolas C. Mercado had already
lapsed for his failure to pay the monthly rentals. On 19 February 1943,
the plaintiffs filed a petition praying that the defendant be ordered
to accept the sum of P33,274.66 or such other amount as the latter
might show to be the correct total liability of the former for the
repurchase of the property. On 22 February, the defendant objected to
the preceding petition on the same grounds as those stated in his
objection dated 15 February to the urgent motion of the plaintiffs
dated 13 February, to wit: that the option to repurchase granted to
Nicolas C. Mercado had already expired for his failure to pay the
monthly rentals.
The foregoing are in brief the facts set
forth in the pleadings filed and decision rendered in this case
submitted to reconstitute, upon plaintiffs’ petition, the original
record of the case which was destroyed.
On 31 January 1946, the court declared the record of the case reconstituted.
On 15 March 1946, the plaintiffs filed a motion praying that the
defendant be ordered to submit a statement of the exact liability of
Nicolas C. Mercado in accordance with the judgment rendered on 13
February 1940 and that upon payment of such liability Nicolas C.
Mercado be allowed to repurchase the property and the defendant be
ordered to execute the corresponding deed. In support of the motion,
the plaintiffs claimed that on 11 February 1943, in accordance with the
terms of the judgment rendered on 13 February 1940, Nicolas C. Mercado
offered to pay the total repurchase price of the property to the
defendant, but the latter refused to present a statement of account;
that on 13 February 1943, Nicolas C. Mercado, accompanied by Moises
Lucas, brought to the office of the defendant the sum of P33,274.66 in
cash and tendered it to him in full satisfaction of the repurchase
price, but the latter refused to accept it; that in view of the
defendant’s refusal to accept the sum thus tendered, Nicolas C. Mercado
informed him that the amount would be brought to Court on 20 February
1943 for the purpose of delivering it to him in open court; that on 19
February 1943 Nicolas C. Mercado filed a petition praying that the
defendant be ordered to accept the sum of P33,274.66; that on the
following day, at the time set for the hearing of the petition, the
defendant failed to appear; that Nicolas C. Mercado waited until late
in the morning of that day for the defendant to appear but the latter
did not show up; that the defendant insisted on refusing to accept the
payment of the repurchase price; and that Nicolas C. Mercado was
willing to repurchase the property in accordance with the terms of the
judgment rendered on 13 February 1940. On 5 April, the defendant filed
an objection to the motion, alleging that the option to repurchase had
already expired due to the failure of Nicolas C. Mercado to pay the
monthly rental of P200 from December 1941 to September 1944.
On 13 June 1946, acting upon the plaintiffs’ motion of 15 March, the
Court denied it on the ground that the judgment rendered on 24 June
1940 in civil cases Nos. 55010 and 55011 annulled or reformed the
judgment rendered on 13 February 1940 in this case (No. 55449). On 1
July 1946, claiming that the judgment rendered on 24 June 1940 in civil
cases Nos. 55010 and 55011 did not bind Nicolas C. Mercado, because he
was not a party thereto nor did he sign the stipulation upon which the
judgment in said cases was rendered, plaintiffs moved for
reconsideration of the preceding order of 13 June and for the granting
of their motion of 15 March. On 2 July, the defendant filed an
objection to the preceding motion for reconsideration. On 31 July, the
court denied the motion for reconsideration. From these two orders of
13 June and 31 July 1946, this appeal has been taken.
There
are other pleadings filed subsequently by which plaintiffs moved to
have the phrase “as well as Nicolas C. Mercado” appearing on paragraph
2 of their motion of 15 March 1946 deleted, which the court deemed
sufficient to estop Nicolas C. Mercado from alleging that the was not
bound by the judgment rendered on 24 June 1940 in civil cases Nos.
55010 and 55011, despite the fact that he was not a party thereto and
did not sign the stipulation upon which said judgment was rendered. But
the view we have taken of the case renders it unnecessary to pass upon
the error allegedly committed by the court below in denying the motion
to delete, because whether or not the judgment rendered on 24 June 1940
in civil cases Nos. 55010 and 55011 annulled or reformed the judgment
rendered in this case on 13 February 1940, Nicolas C. Mercado has lost
his option to repurchase under the judgment of 13 February 1940 which
expired on 20 February 1943. Nicolas C. Mercado’s claim that he offered
or tendered for payment the sum due in the defendant’s office at the
corner of Azcarraga and Juan Luna streets on 13 February 1943 after the
offer or tender of payment had been refused by the latter, cannot be
believed, because aside from the fact that it is denied by the
defendant, if the claim were true, Nicolas C. Mercado, who had the
advice of counsel, would have made consignation of the sum in court.
There being no consignation of the repurchase price and his claim that
he offered or made a tender of payment to the defendant in the latter’s
office being unbelievable, his right or option to repurchase the
property under the judgment rendered on 13 February 1940 lapsed on 20
February 1943. If the judgment rendered on 24 June 1940 in civil cases
Nos. 55010 and 55011 were to bind Nicolas C. Mercado, he also had lost
his option or right to repurchase under said judgment, because he was
given for that purpose ninety days from 24 June 1940 to pay P30,000 to
the defendant, which amount would “be in full and final settlement of
the obligation due Benito Go Bio from Nicolas C. Mercado as specified
in the decision in Civil Case No. 55449 of this court.” The five-year
period agreed upon in paragraph 2 of the stipulation upon which the
judgment of 24 June 1940 was predicated, did not grant to Nicolas C.
Mercado a five-year period from 24 June 1940 to 23 June 1945 within
which to repurchase the property, because said period was only
available to Sinforoso Mercado, within which he could pay to the
defendant the sum of P2,500, should Nicolas C. Mercado fail to pay the
sum of P30,000 to the defendant within ninety days from 24 June 1940.
So, from whatever angle the case be viewed, the right or option to
repurchase reserved to Nicolas C. Mercado has already expired.
We might put an end to this case by affirming the orders of 13 June and
31 July 1946 appealed from, were it not for the constitutional question
raised by counsel for the plaintiffs in his memorandum concerning
defendant’s disqualification on account of alienage from acquiring
title to urban lands.[1]
Opposing counsel objects to the consideration of the constitutional
point raised, on the ground that the plaintiffs would be altering their
theory of the case as originally submitted to the trial court and that
the consideration of such question would deprive the defendant of his
day in court or of his opportunity to be heard. These would be good
reasons if the constitutional violation were not patent or if the
defendant could set up a defense of avoidance of such violation. But as
the constitutional transgression is clear and as there could be no
avoidance thereof that might be set up in defense, it is the duty of
this Court to pass upon the constitutional question raised, for a
hearing by a trial court upon that question would be a waste of time.
The rule laid down in the Krivenko case, supra, construing the
provisions of section 5, article XIII, of the Constitution, until
overruled or reversed by this Court, is binding upon it. Under that
rule, the defendant being an alien or a Chinese citizen cannot acquire
urban lands in this country from and after the date of the taking
effect of the Constitution which was approved on 8 February 1935. The
sale of the lots involved in this litigation was made on 21 February
1938 when the Constitution was in full force and effect. Consequently,
the sale to the defendant of the parcels of land and improvements
erected thereon comes under the constitutional prohibition. Such being
the case, the sale is null and void. Nevertheless, the majority is of
the opinion that plaintiff Nicolas C. Mercado and the defendant being in pari delicto no remedy may be afforded them.[2]
Mr. Justice Pablo and the writer believe that both parties having acted
in good faith should restore to each other what they had received.[3]
The orders of 13 June and 31 July 1946 appealed from are affirmed, without costs.
Paras, C. J., Pablo, Bengzon, Tauson, Montemayor, Bautista Angelo and Labrador, JJ., concur.
Reyes, J.,
dissenting: I dissent. The majority opinion holds the sale in question
void but denies relief on the ground that the parties were in pari delicto. As I stated in my dissent in the case of Dionisio Rellosa vs. Gaw Chee Hun, Vol. 93 Phil., 827, the in pari delicto
rule does not apply to contracts forbidded by the Constitution and
therefore against public policy. In my opinion, therefore, the vendor
in the present case is entitled to a rescission.
[1] Krivenko vs. Register of Deeds, 44 Off. Gaz. 471, 79 Phil. 461.
[2]
Rellosa vs. Gaw Chee, supra, p. 827; Bautista vs. Uy, supra, p. 843; Talento vs. Makiki, supra, p. 855; and Caoile vs. Yu Chiao, supra, p. 861.[3] Mr. Justice Pablo dissenting in Rellosa vs. Gaw Chee, Bautista vs. Uy, and Caoile vs. Yu Chiao, supra; Mr. Justice Padilla dissenting in Caoile vs. Yu Chiao, supra.