JOSE DE LEON, CECILIO DE LEON, ALBINA DE LEON, IN THEIR INDIVIDUAL CAPACITY, AND JOSE DE LEON AND CECILIO DE LEON, AS ADMINISTRATORS OF THE INTESTATE ESTATE OF FELIX DE LEON, PE…

This is an appeal by certiorari from a decision of the Court of
Appeals affirming a judgment of the Court of First Instance of Bulacan.
Jose de Leon, Cecilio de Leon and Albina de Leon, petitioners herein
and defendants in the court below, were natural children of Felix de
Leon, deceased, while Asuncion Soriano, respondent herein and plaintiff
below, is his widow. In the administration and settlement of the
decedent’s estate then pending in the Court of First Instance, the said
widow, on the one hand, and the natural children, on the other, reached
on March 23, 1943 an agreement, approved by the probate court, whereby
the natural children obligated themselves, among other things, as
follows:

“2. At the end of each agricultural
year, by which shall be understood for the purposes of this agreement
the month of March of every year, the following amounts of palay shall
be given to the party of the FIRST PART (Asuncion Soriano) by the
parties of the .SECOND PART (De Leons): in the month of March of
the..current. year 1943; one thousand two hundred (1,200) cavanes of
palay (macan); in the month of March of 1944, one thousand four hundred
(1,400) cavanes of palay (macan); in the month of March 1945, one
thousand five hundred (1,500) cavanes of palay (macan); and in the
month of March of 1946 and every succeeding year thereafter, one
thousand six hundred (1,600) cavanes of palay (macan). Delivery of the
palay shall be made in the warehouse required by the government, or if
there be none such, at the warehouse to be selected by the party of the
FIRST PART, in San Miguel, Bulacan,. free from. the.cost, of.hauling,
transportation, and from any and all taxes or charges.

“It
is expressly stipulated that this annual payment of palay shall cease
upon the death of the party of the FIRST PART,and shall not be
transmissible to her heirs or to any other person, but during her
lifetime this obligation for the annual payment of the palay
hereinabove mentioned shall constitute a first lien upon all the rice
lands of the estate of Dr. Felix de Leon in San Miguel, Bulacan..”

The defendants made deliveries to the plaintiff of 1,200 cavanes of
palay in 1943, 700 in 1944, 200 in 1945, and another 200 in 1946, a
total of 2,300 cavanes which was 3,400 cavanes short of the 5,700
cavanes which should have been delivered up to and including 1946. It
was to recover this shortage or its value that this action was
commenced.

For answer, the defendants averred that their
failure to pay the exact quantities of palay promised for 1944, 1945
and 1946 was due to “the Huk troubles in Central Luzon which rendered
impossible full compliance with the terns of the agreement;” and it was
contended that “inasmuch as the obligations of the defendants to
deliver the full amount of the palay is depending upon the produce as
this is in the nature of an annuity, * * * the obligations of the
defendants have been fully fulfilled by delivering in good faith all
that could be possible under the circumstances.”

The court
gave judgment for the plaintiff for 3,400 cavanes of palay or its
equivalent in cash, which was found to be P24,900, and legal interest.
As above stated, that judgment was affirmed by the appellate court.

Article 1182 of the Civil Code, which was in force at the time the
agreement in question was entered into, provides that “Any obligation
which consists in the delivery of a determinate thing shall be
extinguished if such thing should be lost or destroyed without fault on
the part of the debtor and before he is in default. Inversely, the
obligation is not extinguished if the thing that perishes is
indeterminate.

Manresa explains the distinction between
determinate and generic things in his comment on article 1096 of the
Civil Code of Spain, saying that the first is a concrete,
particularized object, indicated by its own individuality, while a
generic thing is one whose determination is confined to that of its
nature, to the genus (genero) to which it pertains, such as a horse, a
chair. These definitions are in accord with the popular meaning of the
terms defined.

Except as to quality and quantity, the first
of which is itself generic, the contract sets no bounds or limits to
the palay to be paid, nor was there even any stipulation that the
cereal was to be the produce of any particular land. Any palay of the
quality stipulated regardless of origin or however acquired (lawfully)
would be obligatory on the part.of the obligee to receive and would
discharge the obligation. It seems therefore plain that the alleged
failure of crops through alleged fortuitous cause did not excuse
performance.

As Escriche, in his Diccionario Razonado de Legislacion y Jurisprudencia, puts it, speaking of the effects of the loss of a thing:

“Extingue la obligacidn del deudor cuando la cosa debida es un cuerpo
cierto y determinado; pero si fuese generica o no estuviese determinada
sino en cuanto a la especie, como por ejemplo, una onza de oro, 50
panegas de trigo o 3 toneladas de vino, siempre se perderia para el
deudor, el cual, por consiguiente, no se libraria de la deuda, ya que
se supone que el genero por su naturaleza nunca parece, ‘nun quan genusperit‘,
ya porque aunque se diga que parece, no puede perecer, sino para su
dueño, que es el deudor !res domino suo perit’. (Libro 18, y su glosa
l.a Titulo 11, Partida 5.a)

And he gives this example:

“Si
prestais, pues, a Pedro una onza de oro que luego le roban, tendra que
pagartela, porque su obligacidn no cdinsistia en haberte de dar aquella
misma onza, sino generalmente una onza.”

In the case of Yu Tek & Go. vs.
Gonzalez, 29 Phil. 384), it appeared that the plaintiff advanced
P3,000, to defendant in payment of 600 piculs of sugar. The contract in
writing did not specify that the sugar was to come from the crop on
defendant’s land which was destroyed. It was held that the sugar to be
sold not having been segregated, the sale was not perfected and the
loss of the crop, even though through force majeur, did not extinguish defendant’s obligation to deliver the sugar.

In the more recent decision of this Court, in the case of Toribio Reyes vs.
Caltex (Phil.) Inc., (47 Off. Gaz., 1193; 84 Phil., 654), a question
similar to that at bar arose. There, we ruled that the inability of the
lessee of a commercial -property to pay the stipulated rent because of
war and because the premises had been occupied by Japanese forces did
not affect the lessee’s liability to fulfill its commitments. Shifting
to American authorities , we cited Pollard vs. Shaefer, (1
Dall. [Pa.] 210), where the Court said that, “since by the lease, the
lessee was to have the advantage of casual profits of the leased
premises, he should run the hazard of casual losses during the term and
not lay the whole burden of them upon the lessor.” This Court went on
to say:

“The general rule on performance of
contracts is graphically set forth in American treatises, which is also
the rule, iii our opinion, obtaining under the Civil Code.

“Where a person by his contract charges himself with an obligation
possible to be performed, he must”perform it, unless its performance is
rendered impossible by the act of God, by the lav;, or by the other
party, it being the rule that in case the party desires to be excused
from performance in the event of contingencies arising, it is his duty
to provide therefor in his contract. Hence, performance is not excused
by subsequent inability to perform, by unforeseen difficulties, by
unusual or unexpected expenses, by danger, by inevitable accident, by
the breaking of machinery, by strikes, by sickness, by failure of a
party to avail himself of the benefits to be had under the contract, by
weather conditions, by financial stringency, or by stagnation of
business. Neither is performance excused by the fact that the contract
turns out to be hard and improvident, unprofitable or impracticable,
ill advised, or even foolish, or less profitable, or unexpectedly
burdensome. (17 C. J. S. 946-948.)

“In the absence of a
statute to the contrary, .conditions arising from a state of war in
which the country is engaged, will not ordinarily constitute an excuse
for non-performance of contract; and impossibility of performance
arising from the acts of the legislature and the executive branch of
government in war time does not, without more, constitute an excuse for
non-performance. (17 C. J. S. 953, 951.)

“A few words are
in order to straighten out the apparent confusion (of ideas) that
exists regarding the influence.of fortuitous events in contracts; when
they excuse performance and when not.

“In considering the
effect of impossibility of performance on the rights of the parties, it
is necessary to keep in mind the distinction between; (1) Natural
impossibility preventing performance from the nature of the thing;
and (2) impossibility in-fact, in the absence of inherent impossibility
in the nature of the-thing stipulated to be performed. (17 C.J.S.
951.) In the words of one Court, impossibility must consist in the
nature of thing to be done and not’ in the inability of the party to do
it. (City of Montpelier vs. national Surety Co., 122 A. 484;
97 Vt. Ill; 33 A.L.R. 489.) As others have put it, to bring the case
within the rule of impossibility, it must appear that the thing to be
done cannot by any means be accomplished, for if it is only improbable
or out of the power of the obligor, it is not in law deemed impossible.
(17 C. J. S. 442.) The first class of impossibility goes to the
consideration and renders the contract void. The second, which is the
class of impossibility that we have to do here, does not. (17 C. J. S.
951, 952.)

“For illustration, where the entire product of a
manufacturer was taken by the government under orders pursuant to a
commandeering statute during the World War, it was held that such
action excused non-performance of a contract to supply civilian trade.
(40 S. Ct., 5; 252 U.S. 493; 64 Law. ed. 1031.) Another examples where
a party obligates himself.to deliver certain (determinate) things and
the things perish through war or in a shipwreck, performance is
excused, the destruction operating as a rescission or dissolution of
the covenant. But if the promisor is unable to deliver the goods
promised and his inability arises, not from their destruction but from,
say, his inability to raise money to buy them due to
sickness, typhoon, or the like, his liability is not discharged. In the
first case, the doing of the thing which the obligor finds impossible
is the foundation of the undertaking. (C.J.S. 951, note.)
In the second, the impossibility partakes of the nature of the risk
which the promisor took within the limits of his undertaking of being
able to perform. (C.J.S. supra, 946, note). It is a contingency which he could have taken due precaution to guard against in the contract.

“Summoning the above principles to our aid, and by way of hypothesis,
the defendant-appellee here would be relieved from the obligation to
pay rent if the subject matter of the lease, were this possible, had
disappeared, for the personal occupation of the premises is the
foundation of the contract, the consideration that induced it (lessee)
to enter into the agreement. But a mere trespass with which the
landlord had nothing to do is a casual disturbance not going to the
essence of the undertaking. It is a collateral incident which might
have been provided for by a proper stipulation.”

See also Lacson et al. vs. Diaz, supra, p. 150.

The decision of the Court of Appeals is affirmed with costs against the petitioners and appellants.

Moran, C.J., Ozaeta, Pablo, Bengzon, Montemayor, and Reyes, JJ., concur.