SANTIAGO SY JUCO AND JOSE DEL R. JEUQUECO, PLAINTIFFS AND APPELLANTS, VS. DONATA MONTEMAYOR, CLODUALDO VITUG, AMBROSIA SALAO, JUAN SALAO AND JOSEFA EVANGELISTA, DEFENDANTS AND A…

This action was commenced in the Court of First Instance of the
Province of Rizal on October 11, 1922. Its purpose was (1) to recover from all
of the defendants several sums of money aggregating P50,550 as damages for
alleged noncompliance by the defendants with the provisions of certain contracts
of lease and sublease of a fishery situated in the municipality of Lubao,
Province of Pampanga, and for repairs made on said fishery by the plaintiffs;
and (2) to recover from the defendants Ambrosia Salao, Juan Salao and Josefa
Evangelista the sum of P7,833.90 as the unaccrued portion of the rental for said
fishery paid to them in advance by the plaintiffs. The plaintiffs prayed for a
judgment in their favor and against the defendants for said amounts, and costs.
They also prayed that the contract of sublease, under which they held possession
of the fishery be rescinded.

The defendants Donata Montemayor and Clodualdo Vitug denied
generally and specifically each and every allegation of the complaint.

The defendants Ambrosia Salao, Juan Salao and Josefa
Evangelista, in their amended answer of May 20, 1927, denied generally and
specifically each and every allegation of the complaint and set up a
counterclaim for the sum of P2,000.

Upon the issue presented by the above pleadings the cause was
brought on for trial. On the 31st day of May, 1927, the Honorable Antonio M.
Opisso, judge, after a careful consideration of the evidence adduced during the
trial of the cause, rendered a judgment in favor of the plaintiffs and against
the defendants Donata Montemayor and Clodualdo Vitug in the following sums: (a)
P8,550 for reimbursement of expenses for repairs made by the plaintiffs on the
fishery; (b) P12,000, the value of fish which escaped from the fishery for the
failure of the defendants Montemayor and Vitug to make necessary repairs thereon
and (c) P4,000, the value of fish contained in the portion of said fishery taken
by one Simeon Bias, pursuant to the judgment rendered in a litigation between
him and the defendants Montemayor and Vitug. The lower court further rendered a
judgment in favor of the plaintiffs and against the three defendants Ambrosia
Salao, Juan Salao and Josef a Evangelista in the sum of P7,833.90, representing
the unaccrued portion of the rental which had been paid to them in advance by
the plaintiffs. The court allowed interest at o per cent on all of said sums
from the 11th day of October, 1922, the date of the commencement of this
action.

As to the rescission of the contract prayed for by the
plaintiffs and the alleged damages resulting from said rescission, the lower
court said:

“En cuanto al quinto motivo de accion, no ha lugar a acceder a
lo alii pedido, por no haber presentado pruebas respecto al mismo y por haber
las partes, de mutuo acuerdo, rescindido el contrato y entregado la posesion de
la pesquera el 1. de mayo de 1923.”

From said judgment plaintiffs and defendants appealed.

In this appeal the plaintiffs-appellants contend that the lower
court committed an error:

“(1) In not sentencing all the defendants Ambrosia Salao, Juan
Salao, Josefa Evangelista, Donata Montemayor and Clodualdo Vitug, to pay the
sums of P8,550, P12,000, P4,000 and P7,833.90 found and adjudicated as due to
herein plaintiffs;

“(2) In not awarding to the plaintiffs damages for the value of
fish which escaped out by reason of the acts of Simeon Bias; and

“(3) In not awarding to the plaintiffs damages resulting from
the rescission of the contract.”

The defendants-appellants Donata Montemayor and Clodualdo Vitug
contend that the lower court erred in ordering them to pay to the plaintiffs the
following sums: (a) P8,550 for repairs of the fishery; (b) P12,000 for damages,
representing the value of fish that escaped out; and (c) P4,000 as indemnity for
the value of fish included in the portion of the fishery taken by Simeon
Bias.

The defendants-appellants Salao and Evangelista contend that
the lower court committed an error in rendering a judgment against them and in
favor of the plaintiffs in the sum of P7,833.90, representing the unaccrued
portion of the rental paid to them in advance by the plaintiffs.

The following facts are not disputed:

The spouses Donata Montemayor and Clodualdo Vitug were the
owners of a fishery located in the barrio of Bancal Sinubli, municipality of
Lubao, Pampanga, with an area of about 80 hectares, more particularly described
as follows:

“Linda por el norte con el Rio Magtapat; por el este con la
pesquera de D. Romulo Mercado; por el sur con el Rio Bancal Sinubli; y por el
oeste con la propiedad de Dna. Irene Santos. Esta pesquera mide (80) ochenta
hectareas, (80) ochenta y seis areas y (81) ochenta y una centiareas. Esta
medicion es la que se encuentra en el piano hecho por el agrimensor D. Francisco
Licuanan aprobado en el Buro de Terrenos de fecha 3 de septiembre de
1917.”

On September 27, 1917, Donata Montemayor and Clodualdo Vitug
executed and delivered a contract of lease of said fishery in favor of Ambrosia
Salao and Josefa Evangelista for a period of three years, from September 30,
1917, to September 30, 1920 for the sum of P9,000, which was paid at the time of
the execution of the contract (Exhibit T). Later the owners leased said fishery
to Ambrosia Salao for one year, from October 1, 1920 to October 1, 1921. On
March 3, 1920, the owners executed and delivered another contract of lease of
said fishery in favor of Ambrosia Salao, Juan Salao and Josefa Evangelista for a
period of two years, to wit, from October 2, 1921 to October 2, 1923, for the
sum of P10,000, which amount was paid in advance at the time of the execution of
the contract (Exhibit A). The rights and obligations of the lessors and lessees,
as expressly stipulated in said contract Exhibit A are as follows:

“(b) Que como condicion accesoria del mismo, se hace saber
ademas, que esta pesquera se halla en Iitigio con D. Simeon Bias, de Malabon,
Rizal, y en el caso que por una orden judicial se segregare parte de esta
pesquera reclamada por Simeon Bias y se le adjudique a su propiedad, el precio
de cada ano de este arrendamiento sera reducido a una parte proporcional,
tomarido por base el precio anual de cada hectarea del arriendo, hasta que las
cantidades tomadas y aplicadas al arrendamiento primitivo sean completamente
saldadas por el canon de la pesquera bajo bases arriba convenidas.

“(c) Que los propietarios arrendadores se hacen responsables
del saneamiento y eviccion en toda la extension marcada por la ley, asi como de
los perjuicios que Simeon Bias pueda irrogar contra los derechos de posesidn y
disfrute de la pesquera objeto de este contrato, a los arrendatarios o segunda
parte de este contrato.

“(d) Que la descrita pesquera serd entregada al terminar el
plazo de arriendo en la misma condicion como se la hallare al hacer la entrega a
los arrendatarios.

“(f) Que todos los desperfectos por el uso de esta pesquera han
de ser a cargo de los duenos.”

On June 25, 1920, the lessees Ambrosia Salao, Juan Salao and
Josefa Evangelista executed and delivered a so-called contract of sublease
(Exhibit B) of said fishery in favor of the plaintiffs Sy Juco and Jeuqueco for
a period of three years, from October 1, 1920 to October 1, 1923, for a rental
of P17,700. Of this amount, P7,700 was paid at the time of the execution of the
contract and the balance of P10,000 on September 30, 1920.

The rights and obligations of the parties, under the terms of
the contract Exhibit B, are expressly stipulated as follows:

“(a) Que los Sres. Joso del R. Jeuqueco y Santiago Sy Juco
seran conocidos por medio de la presente como subarrendatarios de la finca, y
como tales, a falta de este convenio las disposiciones de Ley sobre este
contrato seran las que deben suplir para su debida resolucidn de cualquier
desarreglo de las partes.

“(c) Que el plazo de este subarrendamiento es de tres anos
comenzando desde el 1.° de octubre de 1920 hasta el 1.° de octubre de 1923.
Entendiendose, sin embargo, que los derechos de los arrendatarios Sres. Juan
Salao, Ambrosia Salao y Josefa Evangelista, sobre la disminucidn del precio del
arriendo en el caso que Simeon Bias ganare el pleito contra los propietarios, se
entenderan trasmitidos, asi como cualesquier derechos y obligaciones de los
citados Juan Salao y Co., a favor de los tiltimos o Sres. Jose Jeuqueco y
Santiago Sy Juco y a sus herederos.

“(d) Que las condiciones establecidas en el contrato de
arrendamiento se entenderan trasmitidas a los subarrendatarios con los derechos
y obligaciones que reciprocamente tienen las primitivas
partes.”

Pursuant to said Exhibit B the plaintiffs took possession of
the fishery on October 1, 1920.

During the trial the plaintiffs and the defendants Montemayor
and Vitug entered into the following stipulation:

“Las partes hacen constar que en virtud del convenio habido
entre las mismas y que aparece en el documento marcado como Exhibit Q, la
posesion de la parte de la pesquera no ocupada por Simeon Bias ha sido entregada
a Donata Montemayor y su marido.”

Exhibit Q shows that the fishery was returned by the plaintiffs
to Montemayor and Vitug on May 1, 1923, with the following reservation on the
part of the plaintiffs:
 

“Esto se debe entender sin perjuicio de cualquiera accion que
ya tengamos o pudieramos tener en relacion con dicha
pesqueria.”

A preponderance of the evidence shows the following facts:

When the plaintiffs took possession of the fishery on October
1, 1920, they found the dikes in bad condition, requiring immediate repairs.
This fact was immediately communicated by Sy Juco to the defendant Ambrosia
Salao. The latter, invoking the terms of the contract Exhibit B, stated that all
her rights and obligations as lessee of the fishery had been transferred to the
plaintiffs, and that the plaintiffs should directly take up the matter of
repairs with the owner Donata Montemayor. Sy Juco went to see Montemayor about
the question of repairs, and it was agreed between them that, inasmuch as
Montemayor did not have money at that time, Sy Juco would advance the expenses
for the necessary repairs and that Montemayor would reimburse him later.
Pursuant to this understanding repairs were made on the fishery in October and
November, 1920, at the expense of Sy Juco in the sum of P6,752.67.

In July or August, 1921, the fishery was again in bad
condition, and with the consent of the defendant Donata Montemayor repairs were
again made by Sy Juco for her account, amounting to P1,797.00. Thus the total
expenses for repairs made on the fishery by the plaintiffs for the account of
the defendants Donata Montemayor and Clodualdo Vitug, amounted to P8,550.27, or
P8,550 in round numbers, as found by the lower court.

On or about July 2, 1922, the fishery being again in a
dilapidated state, the plaintiffs addressed a letter (Exhibit L) to the
defendants Montemayor and Vitug, requesting them to make repairs on the dikes.
Six days later, or on July 8, 1922, the plaintiffs again addressed to said
defendants another letter (Exhibit M) the pertinent part of which reads as
follows:

“Aside from damages from Mr. Simeon Bias we have been damaged
because of the weakness of the earthen fence around the fishpond which too weak
to resist longer. It is not convenient for us any more to pay for the repairs.
If for instance the fishpond may be broken and its contents thrown out it is you
who must have the blame for we have, time and time again told the matter to you.
We don’t like to go further in paying rent. We have before shoulder up the
expenses alone. We are begging you to pay the amount which we have paid
according to clause ‘F’ of the legal papers signed before the person of Pedro
Pascual, a notary public of this province.

“After all these things and after we have not yet receive any
letter from or if you fail yet to make repairing on the fishpond, we will be
forced to ask for the rescission or return the fishpond to you and ask therewith
all the payments for rent that we made and also we shall be obliged to do all so
that you may pay for damages on the thrown fish and on the fish still in the
fishpond we, being unable to catch them in face of Mrs. Simeon Bias rejection to
permit us to catch them.”

Said letter (Exhibit M) was followed by another (Exhibit I)
addressed to all of the defendants. In this letter the plaintiffs expressed
their intention to return the fishery and to have the contract rescinded, in
view of the defendant’s failure to make repairs. No answer was made to either of
said letters.

On September 18, 1922, on account of heavy rains and flood, and
due to lack of necessary repairs, the dikes broke down in four sections of the
fishery, and the fish escaped out. The damage suffered by the plaintiffs,
representing the value of fish thus lost, was estimated by the lower court, from
data furnished during the trial, at P12,000.

Pursuant to the judgment rendered in favor of one Simeon Bias
in a litigation between him and Donata Montemayor, the former took possession of
a section of the fishery in question, including all of the fish contained
therein. From data furnished during the trial the court estimated the value of
the fish so taken by Simeon Bias at P4,000.

There are three questions to be decided in this appeal, to
wit:

(1) Are the defendants liable for the cost of repairs made by
the plaintiffs and for damages suffered by them?

(2) Are the plaintiffs entitled to recover from the defendants
Salao and Evangelista the unaccrued portion of the rental amounting to
P7,833.90?

(3) Are the plaintiffs entitled to recover damages resulting
from the rescission of the contract (Exhibit B)?

As above stated, the plaintiffs took possession of the fishery
on October 1, 1920, under the terms of the so-called contract of sublease
(Exhibit B), executed in their favor by the defendants Salao and Evangelista. A
careful reading of said contract, particularly of the clauses above quoted,
shows that under the terms thereof the defendants Salao and Evangelista, as
lessees of the fishery in question, sold and transferred to the plaintiffs, for
a consideration of P17,700, all of their rights and obligations as such lessees.
The defendants Salao and Evangelista substituted the plaintiffs in their place
and stead with reference to their relation as lessees to their lessors lsonata
Montemayor and Clodualdo Vitug. In other words, they made an absolute and
complete assignment to the plaintiffs of their lease on the fishery, including
all of their rights and obligations as such lessees. (See clauses [c] and [d] of
Exhibit B quoted above.)

It is true that contract Exhibit B is called by the parties
“contrato de subarrendamiento” and the plaintiffs are designated therein as
“subarrendatarios.” However a careful examination of said contract shows that
its real nature, purpose and effect is to make a complete assignment to the
plaintiffs of the lease held by Salao and Evangelista. Such assignment has the
effect of creating the relation of lessees and lessors between the plaintiffs
and the owners of the fishery, Donata Montemayor and Clodualdo Vitug, with the
same identical rights and obligations specified in the original contract of
lease (Exhibit A) between Salao and Evangelista as lessees and said owners as
lessors. Furthermore, the contract of assignment (Exhibit B) specifically so
provided, as follows:

“(d) Que las condiciones establecidas en el contrato de
arrendamiento (Exhibit A) se entenderan trasmitidas a los subarrendatarios con
los derechos y obligaciones que reciprocamente tienen las primitivas
partes.”

Manresa, commenting on the effect of the assignment of a lease
and the relation which it creates between the owner of the property and the
assignee (in this case, the plaintiffs), says:

“Piensa el arrendatario que sobre la cosa arrendada le
corresponde un derecho para ejercitar contra el arrendador a cambio de las
obligaciones que por su parte tiene que cumplir, y este derecho, con todos sus
accesorios, con todas las acciones que le son anejas en los distintos casos y
momentos de su ejercicio, y con todas las obligaciones que lo condicionan, lo
transmite de una vez, en un solo acto, sin ulteriores propositos de
responsabilidad por razon del mantenimiento del uso y goce del cesionario.

“4. Que el cesionario tiene accidn directs contra el
arrendador para exigir de e1 el cumplimiento de todas las obligaciones que oste
estipulo’ con el arrendatario, de igual modo que e1 esta tambien directamente
obligado con el propio arrendador por razon de todo lo que se deriva del
contrato.” (Vol. 10, Manresa, pp. 498, 499.)

It follows from the foregoing that the plaintiffs and the
defendants Donata Montemayor and Clodualdo Vitug stand in the relation of
lessees and lessors, respectively, with the rights and obligations specified in
contracts Exhibits A and B. Therefore, (1) the cost of repairs made by the
plaintiffs on the fishery to keep it in serviceable condition; (2) the damages
suffered by them by reason of the failure of the owners to make necessary
repairs on the dikes; and (3) the damages suffered by said plaintiffs by reason
of the segregation of the portion of said fishery taken by Simeon Bias, should
be paid by the owners of said fishery pursuant to the specific terms of the
contracts Exhibits A and B and the provisions of the Civil Code.

The fact that the assignment of the lease was made without the
consent of the owners, as alleged by them, does not vitiate the assignment. In
the first place, said assignment was subsequently ratified by Donate Montemayor,
when in 1920 and 1921 she allowed the plaintiffs to make the repairs for her
account, as above stated. In the second place, according to Manresa, the consent
or knowledge of the owner of the property is not necessary for the validity of
an assignment of lease. On this question he says:

“Y nosotros creemos que el arrendamiento, se halle o no
inscrito, constituya o no un derecho real, es un derecho transmisible, siempre y
cuando, naturalmente, no se haya prohibido expresamente la transmision, y que no
existiendo esta prohibicion, puede transmitirse sin la autorizacion del duefio.”
(Vol. 10, Manresa, p. 504.) In fact, we see no reason for the necessity of the
owner’s consent or knowledge. His rights and obligations as lessor are not
increased or diminished by reason of the assignment. They remain identically and
exactly the same, without any alteration whatsoever.

The lower court committed no error therefore in rendering a
judgment in favor of the plaintiffs and against the defendants Montemayor and
Vitug for cost of repairs and damages, and in relieving the other defendants
from said liability.

Plaintiffs-appellants contend in their second assignment of
error that they are entitled to damages for the value of fish which escaped out
when Bias segregated the portion recovered by him from Donata Montemayor. On
this question the lower court said:

“El Juzgado estima que, aun admitiendo que Simeon Bias hubiese
de proposito abierto las compuertas y dejado escapar parte de los peces que se
hallaban en la seccion de la pesquera en donde se hallaba la porcion que
correspondio a Simeon Bias en el litigio sostenido con Donata Montemayor, de
este dano causado no puede hacerse responsable a Donata Montemayor ni a
Clodualdo Vitug ni a alguno de los otros demandados, puesto que si el contrato
Exhibito A contenia una disposition al efecto de que los arrendadores se hacian
responsables de los perjuicios que se ocasionaron a los arrendatarios por Simeon
Bias contra los derechos de posesion y disfrute de la pesquera objeto del
contrato, dichos perjuicios deben entenderse unicamente como los que
naturalmente pudiesen ocasionarse con motivo de los actos legales de Simeon
Bias, pero no los que resultaron por cualquier atropello por este. De aqui que
el Juzgado en cuanto a este tercer motivo de action de la demanda entiende que
Donata Montemayor es solamente responsable de los peces que se hubiese apropiado
Simeon Bias o que hubiesen quedado comprendidos dentro de la porcion de la
pesquera de que se posesiond, pero no por aquellos que de intento dicho Simeon
Bias hizo escapar, a menos que hubiese probado que el boquete abierto por Simeon
Bias se hizo necesario para la construction de los diques de separacion de su
porcion, prueba que el Juzgado no encuentra suficientemente establecida por las
partes.”

We are of the opinion that the lower court is correct in its
reasoning and conclusion above quoted.

The foregoing discussion of the first two
assignments of error of the plaintiffs-appellants, answers also the assignments
of error of defendants-appellants Montemayor and Vitug.

In their third assignment of error the plaintiffs-appellants
contend that they should have been awarded damages in the sum of P10,000 by
reason of the rescission of the contract.

The proof shows that the plaintiffs had to abandon the fishery,
due to its dilapidated condition, in September, 1922, that is a little over a
year before the expiration of the contract of assignment, and that they had to
abandon it because of the failure of the defendants Montemayor and Vitug to make
necessary repairs in spite of repeated demands made upon them. The lower court
denied this claim for damages on the ground that the contract was rescinded by
mutual consent of the parties, and on the further ground that no evidence of
damages was presented by the plaintiffs.

Our examination of the record shows that no such rescission
took place. The parties only stipulated as a fact, that the defendants
Montemayor and Vitug took possession of the fishery on May 1, 1923 (Exhibit Q).
Even if such stipulation and the terms of Exhibit Q be interpreted as a
rescission of the contract by mutual consent, yet the plaintiffs have expressly
reserved in said Exhibit Q whatever right they had or might have in connection
with said fishery. (“Esto se debe entender sin perjuicio de cualquiera action
que ya tengamos o pudieramos tener en relacidn con dicha pesqueria.”)

There is no question that the plaintiffs had abandoned the
fishery one year prior to the expiration of the contract. They are therefore
entitled to recover from the defendants Montemayor and Vitug the benefits which
they might have derived from the fishery during that period. The proof shows
that in the year 1920 they made a net profit of P11,395.50 from the operation of
the fishery (Exhibit R). Taking this as a basis, the plaintiffs are entitled to
at least P10,000 as demanded in the complaint, and this sum should have been
allowed in their favor and against Montemayor and Vitug.

The appellants Salao and Evangelista contend in their
assignment of error that the contract between them and the plaintiffs (Exhibit
B) is a contract of assignment of lease, and that they are not liable for any
portion of the price paid to them by the plaintiffs.

As we have demonstrated above, said contract Exhibit B is an
assignment of the lease held by the defendants Salao and Evangelista. They sold
and transferred said lease to the plaintiffs for the sum of P17,700, and the
plaintiffs became the lessees by substitution. The defendants Salao and
Evangelista have executed fully and faithfully their part of the contract, which
was to deliver the fishery to the plaintiffs and to transfer to them all of
their rights and obligations as original lessees of the property. They have not
failed in any of their obligations as assignors. The sum of P17,700 which they
received from the plaintiffs was in full payment for the rights and obligations
they had assigned to the plaintiffs. Having thus discharged fully and faithfully
their part of the contract, they cannot be made liable to the assignees for
whatever damage the latter may subsequently suffer in the possession of the
fishery. The fact that the plaintiffs abandoned the property one year prior to
the expiration of the contract was not due to the fault of Salao and
Evangelista, and they cannot be made to pay for damages occasioned by the fault
of others. Furthermore, the plaintiffs are not entitled to recover any unaccrued
portion of the rental. In lieu thereof, they get damages growing out of the
rescission of the contract in the sum of P10,000 as above stated. Therefore, the
lower court erred in holding the defendants Salao and Evangelista liable to the
plaintiffs in the sum of P7,833.90, representing the unaccrued portion of the
rental.

In harmony with all of the foregoing, the judgment of the lower
court should be modified, and a judgment should be and is hereby rendered in
favor of the plaintiffs and against the defendants Montemayor and Vitug for the
following sums:

P8,850 for cost of repairs made on the fishery in 1920 and
1921;

P12,000 as damages representing the value of fish that escaped
out due to defendants’ failure to make necessary repairs;

P4,000 as damages
representing the value of fish contained in the portion of the fishery taken by
Simeon Bias; and

P10,000 as damages resulting from the rescission of the
contract, due to fault and negligence of defendants Montemayor and Vitug.

The defendants Ambrosia Salao, Juan Salao and Josefa
Evangelista are hereby relieved from all liability under the complaint. And
without any finding as to costs, it is so ordered.

Avanceña, C. J., Malcolm, Villamor, Ostrand, Romualdez, and
Villa-Real, JJ., concur.