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  • 67 - Gregorio Araneta Inc. v. Philippine Sugar Estates Development Co. LTD (G.R. No. L-22558, May 31, 1967)

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    67 - Gregorio Araneta Inc. v. Philippine Sugar Estates Development Co. Ltd (G.R. No. L-22558, May 31, 1967)

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    763 views2 pages

    67 - Gregorio Araneta Inc. v. Philippine Sugar Estates Development Co. LTD (G.R. No. L-22558, May 31, 1967)

    Uploaded by

    chachaarm

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    © All Rights Reserved
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    Case Title: Gregorio Araneta, Inc. v. The Philippine Sugar Estates Development Co, Ltd (G.R.

    No. L-22558, May 31, 1967)


    Ticker: Sto domingo church; Sto Domingo Avenue

    FACTS

     J.M Tuason &Co, Inc, owner of a big tract of land situated in Quezon City, sold a portion of
    the said land through Gregorio Araneta, Inc, to Philippine Sugar Estates Development Co. Ltd. 
     The contract of purchase and sale with mortgage stipulated the following:
    o Buyer will build Sto. Domingo church and convent
    o Seller will construct streets on the NE and NW and SW sides of the land, so the land
    will be a block surrounded by streets on all four sides and the street on the NE side
    shall be named “Sto Domingo Avenue”
     The buyer, Philippine Sugar Estates finished the construction of Sto. Domingo Church and
    Convent, but the seller, Gregorio Araneta which began constructing the streets, is unable to
    finish the construction of the street in the NE (named Sto. Domingo Ave) because a certain
    third party, by the name of Manuel Abundo, who has been physically occupying a middle part
    thereof refused to vacate the same. 
     On May 7, 1958, Philippine Sugar Estate (buyer) filed its complaint against JM Tuason and
    Gregorio Araneta (seller), seeking to compel the latter to comply with their obligation, and/or
    to pay damages in the event they failed or refused to perform said obligation. 
     The seller answered the complaint arguing that the action was premature since its obligation to
    construct the streets in question was without a definite period which needs to be fixed first
    by the court in a proper suit for that purpose before a complaint for specific performance
    will prosper.

    ISSUE/S

    Whether the parties agreed that the petitioner should have reasonable time to perform its part of the
    bargain? YES

    RULING

    If the contract provided a period that is a "reasonable time", then there was a period fixed, and all that
    the court should have done was to determine if that reasonable time had already elapsed when suit was
    filed. If it had passed, then the court should declare that petitioner had breached the contract, as averred
    in the complaint, and 􏰀fix the resulting damages. On the other hand, if the reasonable time had not yet
    elapsed, the court perforce was bound to dismiss the action for being premature.

    The last paragraph of Article 1197 is clear that the period can not be set arbitrarily. The law expressly
    prescribes that —
    “The courts shall determine such period as may under the circumstance have been probably
    contemplated by the parties.”

    It must be recalled that Article 1197 of the Civil Code involves a two-step process. The Court must
    􏰀first determine that "the obligation does not fi x a period" (or that the period is made to depend upon
    the will of the debtor), "but from the nature and the circumstances it can be inferred that a period was
    intended". This preliminary point settled, the Court must then proceed to the second step, and decide
    what period was "probably contemplated by the parties". So that, ultimately, the Court can not fix a
    period merely because in its opinion it is or should be reasonable, but must set the time that the parties
    are shown to have intended.

    As the parties must have known that they could not take the law into their own hands, but must resort
    to legal processes in evicting the squatters, they must have realized that the duration of the suits to be
    brought would not be under their control nor could the same be determined in advance. The conclusion
    is thus forced that the parties must have intended to defer the performance of the obligations
    under the contract until the squatters were duly evicted, as contended by the petitioner Gregorio
    Araneta, Inc.

    There is no justification in law for the setting of the date of performance at any other time than that of
    the eviction of the squatters occupying the land in question; and in not so holding, both the trial Court
    and the Court of Appeals committed reversible error.

    The time for the performance of the obligations of petitioner Gregorio Araneta, Inc. is hereby fixed at
    the date that all the squatters on affected areas are finally evicted therefrom.

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