TAN SENGUAN & CO., INC., PLAINTIFF AND APPELLANT, VS. PHILIPPINE TRUST COMPANY, DEFENDANT AND APPELLEE.

Plaintiff brought suit in the Court of First Instance of Manila for the sum of P10,000 based on the following agreement:

“Know all men by these presents:

“That
on this 27th day of June, 1924, and in this City of Manila, Tan Sen
Guan & Co., a mercantile partnership registered in accordance with
the laws of the Philippine Islands and the Philippine Trust Company, a
corporation properly organized and with its principal place of business
in this City of Manila, have entered into the following:

“AGREEMENT

“Whereas
Tan Sen Guan & Co. on September 21, 1923, secured a judgment for
the sum of twenty-one thousand four hundred twenty-six (P21,426) pesos
against the Mindoro Sugar Co., of which the Philippine Trust is the Trustee;

“Whereas the Tan Sen Guan & Co., desires to convey to said Philippine Trust Company as such trustee the amount of said judgment, and the Philippine Trust Company, Trustee, offers satisfactory consideration therefor;

“Wherefore, Tan Sen Guan & Co., hereby assigns, conveys, transfers and sells to said Philippine Trust Company, Trustee,
the full amount of said judgment against the Mindoro Sugar Co.,
together with all its rights thereto, said Philippine Trust Company, Trustee,
hereafter to have the full use and benefit of said judgment to the same
extent and in the same manner as if originally entered in favor of said
Company; and in consideration for the covenants and stipulations
following:

“1. Upon the signing of this Agreement, the Philippine Trust Company, Trustee, shall pay to Tan Sen Guan & Co., the sum of five thousand (P5,000) pesos.

“2. The Philippine Trust Company, Trustee,
agrees that should the Mindoro Sugar Co. be sold, assigned or its
ownership transferred in any manner whatsoever to any person or entity
including the Philippine Trust Company, Trustee, itself, it
shall pay to Tan Sen Guan & Co., an additional sum of ten thousand
(P10,000) pesos, said amount to be paid immediately upon the perfection
of said sale or transfer and irrespective to the amount which might be
paid for it.

“3. In case any other creditor of the Mindoro
Sugar Company obtains in the payment of his credit, a greater
proportion than the price hereby paid to Tan Sen Guan & Co. which
is fifteen thousand (P15,000) pesos for a debt of P21,426, or seventy
per cent (70%) thereof, the Philippine Trust Company, Trustee,
shall pay to Tan Sen Guan & Co., whatever sum may be necessary in
order that the amount received by said Tan Sen Guan & Co. be equal,
in proportion to its claim, to that received by said other creditor, in
proportion to his claim.

“4. In case, however, that the
Mindoro Sugar Company is sold to any person or entity which pays
nothing to the creditors or pay to them in satisfaction of their
credits an amount equal or less than 70 per cent of their respective
claims; or, should said creditors from whatever source obtain in
payment of their credits an amount equal or less than 70 per cent of
their respective claims, then the Philippine Trust Company, Trustee,
will only pay to Tan Sen Guan & Co. the above-mentioned additional
sum of P10,000 upon the sale or transfer of the Mindoro Sugar Co., as
above stated.

“In witness whereof, the Philippine Trust Company, Trustee
thru its Vice-President and the Tan Sen Guan & Co. thru its
Manager, have hereunto set their hand in the date and year above noted.

			“PHILIPPINE TRUST COMPANY
				“Trustee for Mindoro Sugar Co.
		” By (Sgd.) W.D. CLIFFORD
				“Vice-President
			“TAN SEN GUAN & COMPANY
		” By (Sgd.) CHUA CHO CHING
					“Manager

After
trial on an agreed statement of facts which had been entered into by
the respective attorneys, the court absolved the defendant on two
grounds, first, that in the contract it was bound only as a trustee and
not as an individual and second, that it had not been proved that all
the properties of the Mindoro Sugar Company had been sold.

The stipulation of facts relative to the second point reads:

“(9)
That, pursuant to the attached copy of notice of sale, marked Exhibit
C, which is made a part hereof, on November 4, 1929, Modesto Manahan,
justice of the peace of the municipality of San Jose, Province of
Mindoro, sold at public auction to the Roman Catholic Archbishop of
Manila, a corporation sole, all the properties belonging to the Mindoro
Sugar Company which appear described in the certificate of sale
executed by the said justice of the peace Modesto Manahan in favor of
the said the Roman Catholic Archbishop of Manila, a copy of which
certificate is herein attached, marked Exhibit D, and made a part
hereof.”

Defendant claims that the omission
of a comma between the words “Mindoro Sugar Company” and the words
“which appear described” shows that only a portion of the Mindoro Sugar
Company’s properties were sold.

From this decision plaintiff appeals. The first two errors assigned read:

“1.
The lower court erred in holding that the defendant is not personally
responsible for the claim of the plaintiff based on the deed of
assignment Exhibit B because of having executed the same in its
capacity as trustee of the properties of the Mindoro Sugar Company.

“2.
The lower court erred in holding that it has not been stipulated that
all the properties of the Mindoro Sugar Company were sold at public
auction to the Roman Catholic Archbishop of Manila.”

It appears from Exhibit A, being a deed of trust from the Mindoro Sugar
Company to the Philippine Trust Company as trustee, that to protect
certain bonds to be issued by the Mindoro Sugar Company and to be
purchased by the Philippine Trust Company as trustee, the real estate,
franchises, and personal property of the Mindoro Sugar Company were
made over and assigned to the Philippine Trust Company as trustee. That
indenture was dated the 21st of December, 1917.

While the
legal title of the properties of the Mindoro Sugar Company were in the
Philippine Trust Company as trustee, appellant secured a judgment
against the Mindoro Sugar Company and sold, transferred, and assigned
that judgment to appellee by the contract which is known in this record
as Exhibit B above quoted. Whether all the proper- ties of the Mindoro
Sugar Company were sold by the justice of the peace as recited in
paragraph 9 of the stipulation of facts, is not controlled by the
insertion or omission of a comma in the stipulation of facts. An
examination of any of the standard dictionaries will show that the
relative pronoun “which” is descriptive and not restrictive. If a
restrictive relative pronoun were desired, the word “that” should have
been used. But a real interpretation of the stipulation of facts need
not rely upon either the rules of punctuation or the rules of grammar,
because if we go to Exhibit D, we will find that all the properties
transferred to the appellee as trustee were included in the sale. The
sale apparently included all the real and personal properties which the
sugar company held, as even the accounts receivable by the sugar
company were included. The only thing reserved from the sale was the
standing crops, and it is reasonable to presume that they had also been
sold between the date of the sale by the justice of the peace and the
institution of this action. Where the real estate, the personal
property including animals, and all the bills receivable are sold, it
would be a forced construction of the contract Exhibit B to hold that
the assets of the Mindoro Sugar Company had not been sold.

The trial court was therefore in error in holding that the condition
contemplated in paragraph 2 of the contract between the parties,
Exhibit B, had not taken place.

While in the contract in
question the Philippine Trust Company was usually referred to as
trustee, it must be noted that nowhere in Exhibit A, the deed of trust
from the Mindoro Sugar Company to the Philippine Trust Company, was any
authority given to enter into a contract such as is here presented. The
Philippine Trust Company held the legal title to the properties of the
Mindoro Sugar Company to protect the bond holders. So far as the
Philippine Trust Company was concerned, it was not authorized to manage
the affairs of the Mindoro Sugar Company or to enter into contracts in
its behalf. But even if the contract had been authorized by the trust
indenture, the Philippine Trust Company in its individual capacity
would still be responsible for the contract as there was no express
stipulation that the trust estate and not the trustee should be held
liable on the contract in question. (26 R. C. L., 1316-1318; 39 Cyc.,
338; 47 Am. Dig., sec. 300, and cases therein cited.)

Not
only is there no express stipulation that the trustee should not be
held responsible but in the “Wherefore” clause of the contract, the
judgment was expressly assigned in favor of the Philippine Trust
Company, not the Philippine Trust Company, trustee.

It
therefore follows that appellant had a right to proceed directly
against the Philippine Trust Company on its contract and has no claim
against either the Mindoro Sugar Company or the trust estate.

The judgment of the Court of First Instance is therefore reversed, and
a judgment will be entered in favor of plaintiff-appellant and against
defendant-appellee in the sum of P10,000, with legal interest from the
8th of October, 1931, until paid, and with costs in both instances
against defendant-appellee. So ordered.

Malcolm, Villa-Real, Imperial, and Butte, JJ., concur.