Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No.

L-4089 January 12, 1909

ARTURO PELAYO, plaintiff-appellant, vs. MARCELO LAURON, ET AL., defendants-appellees. J.H. Junquera, for appellant. Filemon Sotto, for appellee. TORRES, J.: On the 23rd of November, 1906, Arturo Pelayo, a physician residing in Cebu, filed a complaint against Marcelo Lauron and Juana Abella setting forth that on or about the 13th of October of said year, at night, the plaintiff was called to the house of the defendants, situated in San Nicolas, and that upon arrival he was requested by them to render medical assistance to their daughter-in-law who was about to give birth to a child; that therefore, and after consultation with the attending physician, Dr. Escao, it was found necessary, on account of the difficult birth, to remove the fetus by means of forceps which operation was performed by the plaintiff, who also had to remove the afterbirth, in which services he was occupied until the following morning, and that afterwards, on the same day, he visited the patient several times; that the just and equitable value of the services rendered by him was P500, which the defendants refuse to pay without alleging any good reason therefor; that for said reason he prayed that the judgment be entered in his favor as against the defendants, or any of them, for the sum of P500 and costs, together with any other relief that might be deemed proper. In answer to the complaint counsel for the defendants denied all of the allegation therein contained and alleged as a special defense, that their daughter-in-law had died in consequence of the said childbirth, and that when she was alive she lived with her husband independently and in a separate house without any relation whatever with them, and that, if on the day when she gave birth she was in the house of the defendants, her stay their was accidental and due to fortuitous circumstances; therefore, he prayed that the defendants be absolved of the complaint with costs against the plaintiff. The plaintiff demurred to the above answer, and the court below sustained the demurrer, directing the defendants, on the 23rd of January, 1907, to amend their answer. In compliance with this order the defendants presented, on the same date, their amended answer, denying each and every one of the allegations contained in the complaint, and requesting that the same be dismissed with costs. As a result of the evidence adduced by both parties, judgment was entered by the court below on the 5th of April, 1907, whereby the defendants were absolved from the former complaint, on account of the lack of sufficient evidence to establish a right of action against the defendants, with costs against the plaintiff, who excepted to the said judgment and in addition moved for a new trial on the ground that the judgment was contrary to law; the motion was overruled and the plaintiff excepted and in due course presented the corresponding bill of exceptions. The motion of the defendants requesting that the declaration contained in the judgment that the defendants had demanded therefrom, for the reason that, according to the evidence, no such request had been made, was also denied, and to the decision the defendants excepted.

Assuming that it is a real fact of knowledge by the defendants that the plaintiff, by virtue of having been sent for by the former, attended a physician and rendered professional services to a daughterin-law of the said defendants during a difficult and laborious childbirth, in order to decide the claim of the said physician regarding the recovery of his fees, it becomes necessary to decide who is bound to pay the bill, whether the father and mother-in-law of the patient, or the husband of the latter. According to article 1089 of the Civil Code, obligations are created by law, by contracts, by quasicontracts, and by illicit acts and omissions or by those in which any kind of fault or negligence occurs. Obligations arising from law are not presumed. Those expressly determined in the code or in special laws, etc., are the only demandable ones. Obligations arising from contracts have legal force between the contracting parties and must be fulfilled in accordance with their stipulations. (Arts. 1090 and 1091.) The rendering of medical assistance in case of illness is comprised among the mutual obligations to which the spouses are bound by way of mutual support. (Arts. 142 and 143.) If every obligation consists in giving, doing or not doing something (art. 1088), and spouses are mutually bound to support each other, there can be no question but that, when either of them by reason of illness should be in need of medical assistance, the other is under the unavoidable obligation to furnish the necessary services of a physician in order that health may be restored, and he or she may be freed from the sickness by which life is jeopardized; the party bound to furnish such support is therefore liable for all expenses, including the fees of the medical expert for his professional services. This liability originates from the above-cited mutual obligation which the law has expressly established between the married couple. In the face of the above legal precepts it is unquestionable that the person bound to pay the fees due to the plaintiff for the professional services that he rendered to the daughter-in-law of the defendants during her childbirth, is the husband of the patient and not her father and mother- in-law, the defendants herein. The fact that it was not the husband who called the plaintiff and requested his assistance for his wife is no bar to the fulfillment of the said obligation, as the defendants, in view of the imminent danger, to which the life of the patient was at that moment exposed, considered that medical assistance was urgently needed, and the obligation of the husband to furnish his wife in the indispensable services of a physician at such critical moments is specially established by the law, as has been seen, and compliance therewith is unavoidable; therefore, the plaintiff, who believes that he is entitled to recover his fees, must direct his action against the husband who is under obligation to furnish medical assistance to his lawful wife in such an emergency. From the foregoing it may readily be understood that it was improper to have brought an action against the defendants simply because they were the parties who called the plaintiff and requested him to assist the patient during her difficult confinement, and also, possibly, because they were her father and mother-in-law and the sickness occurred in their house. The defendants were not, nor are they now, under any obligation by virtue of any legal provision, to pay the fees claimed, nor in consequence of any contract entered into between them and the plaintiff from which such obligation might have arisen. In applying the provisions of the Civil Code in an action for support, the supreme court of Spain, while recognizing the validity and efficiency of a contract to furnish support wherein a person bound himself to support another who was not his relative, established the rule that the law does impose the obligation to pay for the support of a stranger, but as the liability arose out of a contract, the stipulations of the agreement must be held. (Decision of May 11, 1897.)

Within the meaning of the law, the father and mother-in-law are strangers with respect to the obligation that devolves upon the husband to provide support, among which is the furnishing of medical assistance to his wife at the time of her confinement; and, on the other hand, it does not appear that a contract existed between the defendants and the plaintiff physician, for which reason it is obvious that the former can not be compelled to pay fees which they are under no liability to pay because it does not appear that they consented to bind themselves. The foregoing suffices to demonstrate that the first and second errors assigned to the judgment below are unfounded, because, if the plaintiff has no right of action against the defendants, it is needless to declare whether or not the use of forceps is a surgical operation. Therefore, in view of the consideration hereinbefore set forth, it is our opinion that the judgment appealed from should be affirmed with the costs against the appellant. So ordered.

Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. L-7089 August 31, 1954

DOMINGO DE LA CRUZ, plaintiff-appellant, vs. NORTHERN THEATRICAL ENTERPRISES INC., ET AL., defendants-appellees. Conrado Rubio for appellant. Ruiz, Ruiz, Ruiz, Ruiz, and Benjamin Guerrero for appellees. MONTEMAYOR, J.: The facts in this case based on an agreed statement of facts are simple. In the year 1941 the Northern Theatrical Enterprises Inc., a domestic corporation operated a movie house in Laoag, Ilocos Norte, and among the persons employed by it was the plaintiff DOMINGO DE LA CRUZ, hired as a special guard whose duties were to guard the main entrance of the cine, to maintain peace and order and to report the commission of disorders within the premises. As such guard he carried a revolver. In the afternoon of July 4, 1941, one Benjamin Martin wanted to crash the gate or entrance of the movie house. Infuriated by the refusal of plaintiff De la Cruz to let him in without first providing himself with a ticket, Martin attacked him with a bolo. De la Cruz defendant himself as best he could until he was cornered, at which moment to save himself he shot the gate crasher, resulting in the latter's death. For the killing, De la Cruz was charged with homicide in Criminal Case No. 8449 of the Court of First Instance of Ilocos Norte. After a re-investigation conducted by the Provincial Fiscal the latter filed a motion to dismiss the complaint, which was granted by the court in January 1943. On July 8, 1947, De la Cruz was again accused of the same crime of homicide, in Criminal Case No. 431 of the same Court. After trial, he was finally acquitted of the charge on January 31, 1948. In both criminal cases De la Cruz employed a lawyer to defend him. He demanded from his former employer reimbursement of his expenses but was refused, after which he filed the present action against the movie corporation and the three members of its board of directors, to recover not only the amounts he had paid his lawyers but also moral damages said to have been suffered, due to his worry, his neglect of his interests and his family as well in the supervision of the cultivation of his land, a total of P15,000. On the basis of the complaint and the answer filed by defendants wherein they asked for the dismissal of the complaint, as well as the agreed statement of facts, the Court of First Instance of Ilocos Norte after rejecting the theory of the plaintiff that he was an agent of the defendants and that as such agent he was entitled to reimbursement of the expenses incurred by him in connection with the agency (Arts. 1709-1729 of the old Civil Code), found that plaintiff had no cause of action and dismissed the complaint without costs. De la Cruz appealed directly to this Tribunal for the reason that only questions of law are involved in the appeal. We agree with the trial court that the relationship between the movie corporation and the plaintiff was not that of principal and agent because the principle of representation was in no way involved. Plaintiff was not employed to represent the defendant corporation in its dealings with third parties. He was a mere employee hired to perform a certain specific duty or task, that of acting as special guard and staying at the main entrance of the movie house to stop gate crashers and to maintain peace and order within the premises. The question posed by this appeal is whether an employee or

servant who in line of duty and while in the performance of the task assigned to him, performs an act which eventually results in his incurring in expenses, caused not directly by his master or employer or his fellow servants or by reason of his performance of his duty, but rather by a third party or stranger not in the employ of his employer, may recover said damages against his employer. The learned trial court in the last paragraph of its decision dismissing the complaint said that "after studying many laws or provisions of law to find out what law is applicable to the facts submitted and admitted by the parties, has found none and it has no other alternative than to dismiss the complaint." The trial court is right. We confess that we are not aware of any law or judicial authority that is directly applicable to the present case, and realizing the importance and far-reaching effect of a ruling on the subject-matter we have searched, though vainly, for judicial authorities and enlightenment. All the laws and principles of law we have found, as regards master and servants, or employer and employee, refer to cases of physical injuries, light or serious, resulting in loss of a member of the body or of any one of the senses, or permanent physical disability or even death, suffered in line of duty and in the course of the performance of the duties assigned to the servant or employee, and these cases are mainly governed by the Employer's Liability Act and the Workmen's Compensation Act. But a case involving damages caused to an employee by a stranger or outsider while said employee was in the performance of his duties, presents a novel question which under present legislation we are neither able nor prepared to decide in favor of the employee. In a case like the present or a similar case of say a driver employed by a transportation company, who while in the course of employment runs over and inflicts physical injuries on or causes the death of a pedestrian; and such driver is later charged criminally in court, one can imagine that it would be to the interest of the employer to give legal help to and defend its employee in order to show that the latter was not guilty of any crime either deliberately or through negligence, because should the employee be finally held criminally liable and he is found to be insolvent, the employer would be subsidiarily liable. That is why, we repeat, it is to the interest of the employer to render legal assistance to its employee. But we are not prepared to say and to hold that the giving of said legal assistance to its employees is a legal obligation. While it might yet and possibly be regarded as a normal obligation, it does not at present count with the sanction of man-made laws. If the employer is not legally obliged to give, legal assistance to its employee and provide him with a lawyer, naturally said employee may not recover the amount he may have paid a lawyer hired by him. Viewed from another angle it may be said that the damage suffered by the plaintiff by reason of the expenses incurred by him in remunerating his lawyer, is not caused by his act of shooting to death the gate crasher but rather by the filing of the charge of homicide which made it necessary for him to defend himself with the aid of counsel. Had no criminal charge been filed against him, there would have been no expenses incurred or damage suffered. So the damage suffered by plaintiff was caused rather by the improper filing of the criminal charge, possibly at the instance of the heirs of the deceased gate crasher and by the State through the Fiscal. We say improper filing, judging by the results of the court proceedings, namely, acquittal. In other words, the plaintiff was innocent and blameless. If despite his innocence and despite the absence of any criminal responsibility on his part he was accused of homicide, then the responsibility for the improper accusation may be laid at the door of the heirs of the deceased and the State, and so theoretically, they are the parties that may be held responsible civilly for damages and if this is so, we fail to see now this responsibility can be transferred to the employer who in no way intervened, much less initiated the criminal proceedings and whose only connection or relation to the whole affairs was that he employed plaintiff to perform a special duty or task, which task or duty was performed lawfully and without negligence.

Still another point of view is that the damages incurred here consisting of the payment of the lawyer's fee did not flow directly from the performance of his duties but only indirectly because there was an efficient, intervening cause, namely, the filing of the criminal charges. In other words, the shooting to death of the deceased by the plaintiff was not the proximate cause of the damages suffered but may be regarded as only a remote cause, because from the shooting to the damages suffered there was not that natural and continuous sequence required to fix civil responsibility. In view of the foregoing, the judgment of the lower court is affirmed. No costs.

Republic of the Philippines SUPREME COURT Manila EN BANC

G.R. No. 109125 December 2, 1994 ANG YU ASUNCION, ARTHUR GO AND KEH TIONG, petitioners, vs. THE HON. COURT OF APPEALS and BUEN REALTY DEVELOPMENT CORPORATION, respondents. Antonio M. Albano for petitioners. Umali, Soriano & Associates for private respondent.

VITUG, J.: Assailed, in this petition for review, is the decision of the Court of Appeals, dated 04 December 1991, in CA-G.R. SP No. 26345 setting aside and declaring without force and effect the orders of execution of the trial court, dated 30 August 1991 and 27 September 1991, in Civil Case No. 8741058. The antecedents are recited in good detail by the appellate court thusly: On July 29, 1987 a Second Amended Complaint for Specific Performance was filed by Ang Yu Asuncion and Keh Tiong, et al., against Bobby Cu Unjieng, Rose Cu Unjieng and Jose Tan before the Regional Trial Court, Branch 31, Manila in Civil Case No. 87-41058, alleging, among others, that plaintiffs are tenants or lessees of residential and commercial spaces owned by defendants described as Nos. 630-638 Ongpin Street, Binondo, Manila; that they have occupied said spaces since 1935 and have been religiously paying the rental and complying with all the conditions of the lease contract; that on several occasions before October 9, 1986, defendants informed plaintiffs that they are offering to sell the premises and are giving them priority to acquire the same; that during the negotiations, Bobby Cu Unjieng offered a price of P6-million while plaintiffs made a counter offer of P5-million; that plaintiffs thereafter asked the defendants to put their offer in writing to which request defendants acceded; that in reply to defendant's letter, plaintiffs wrote them on October 24, 1986 asking that they specify the terms and conditions of the offer to sell; that when plaintiffs did not receive any reply, they sent another letter dated January 28, 1987 with the same request; that since defendants failed to specify the terms and conditions of the offer to sell and because of information received that defendants were about to sell the property, plaintiffs were compelled to file the complaint to compel defendants to sell the property to them.

Defendants filed their answer denying the material allegations of the complaint and interposing a special defense of lack of cause of action. After the issues were joined, defendants filed a motion for summary judgment which was granted by the lower court. The trial court found that defendants' offer to sell was never accepted by the plaintiffs for the reason that the parties did not agree upon the terms and conditions of the proposed sale, hence, there was no contract of sale at all. Nonetheless, the lower court ruled that should the defendants subsequently offer their property for sale at a price of P11-million or below, plaintiffs will have the right of first refusal. Thus the dispositive portion of the decision states: WHEREFORE, judgment is hereby rendered in favor of the defendants and against the plaintiffs summarily dismissing the complaint subject to the aforementioned condition that if the defendants subsequently decide to offer their property for sale for a purchase price of Eleven Million Pesos or lower, then the plaintiffs has the option to purchase the property or of first refusal, otherwise, defendants need not offer the property to the plaintiffs if the purchase price is higher than Eleven Million Pesos. SO ORDERED. Aggrieved by the decision, plaintiffs appealed to this Court in CA-G.R. CV No. 21123. In a decision promulgated on September 21, 1990 (penned by Justice Segundino G. Chua and concurred in by Justices Vicente V. Mendoza and Fernando A. Santiago), this Court affirmed with modification the lower court's judgment, holding: In resume, there was no meeting of the minds between the parties concerning the sale of the property. Absent such requirement, the claim for specific performance will not lie. Appellants' demand for actual, moral and exemplary damages will likewise fail as there exists no justifiable ground for its award. Summary judgment for defendants was properly granted. Courts may render summary judgment when there is no genuine issue as to any material fact and the moving party is entitled to a judgment as a matter of law (Garcia vs. Court of Appeals, 176 SCRA 815). All requisites obtaining, the decision of the court a quo is legally justifiable. WHEREFORE, finding the appeal unmeritorious, the judgment appealed from is hereby AFFIRMED, but subject to the following modification: The court a quo in the aforestated decision gave the plaintiffs-appellants the right of first refusal only if the property is sold for a purchase price of Eleven Million pesos or lower; however, considering the mercurial and uncertain forces in our market economy today. We find no reason not to grant the same right of first refusal to herein appellants in the event that the subject property is sold for a price in excess of Eleven Million pesos. No pronouncement as to costs. SO ORDERED.

The decision of this Court was brought to the Supreme Court by petition for review on certiorari. The Supreme Court denied the appeal on May 6, 1991 "for insufficiency in form and substances" (Annex H, Petition). On November 15, 1990, while CA-G.R. CV No. 21123 was pending consideration by this Court, the Cu Unjieng spouses executed a Deed of Sale (Annex D, Petition) transferring the property in question to herein petitioner Buen Realty and Development Corporation, subject to the following terms and conditions: 1. That for and in consideration of the sum of FIFTEEN MILLION PESOS (P15,000,000.00), receipt of which in full is hereby acknowledged, the VENDORS hereby sells, transfers and conveys for and in favor of the VENDEE, his heirs, executors, administrators or assigns, the above-described property with all the improvements found therein including all the rights and interest in the said property free from all liens and encumbrances of whatever nature, except the pending ejectment proceeding; 2. That the VENDEE shall pay the Documentary Stamp Tax, registration fees for the transfer of title in his favor and other expenses incidental to the sale of above-described property including capital gains tax and accrued real estate taxes. As a consequence of the sale, TCT No. 105254/T-881 in the name of the Cu Unjieng spouses was cancelled and, in lieu thereof, TCT No. 195816 was issued in the name of petitioner on December 3, 1990. On July 1, 1991, petitioner as the new owner of the subject property wrote a letter to the lessees demanding that the latter vacate the premises. On July 16, 1991, the lessees wrote a reply to petitioner stating that petitioner brought the property subject to the notice of lis pendens regarding Civil Case No. 8741058 annotated on TCT No. 105254/T-881 in the name of the Cu Unjiengs. The lessees filed a Motion for Execution dated August 27, 1991 of the Decision in Civil Case No. 87-41058 as modified by the Court of Appeals in CA-G.R. CV No. 21123. On August 30, 1991, respondent Judge issued an order (Annex A, Petition) quoted as follows: Presented before the Court is a Motion for Execution filed by plaintiff represented by Atty. Antonio Albano. Both defendants Bobby Cu Unjieng and Rose Cu Unjieng represented by Atty. Vicente Sison and Atty. Anacleto Magno respectively were duly notified in today's consideration of the motion as evidenced by the rubber stamp and signatures upon the copy of the Motion for Execution. The gist of the motion is that the Decision of the Court dated September 21, 1990 as modified by the Court of Appeals in its decision in CA G.R. CV-21123, and elevated to the Supreme Court upon the petition for review and that the same was denied by the

highest tribunal in its resolution dated May 6, 1991 in G.R. No. L-97276, had now become final and executory. As a consequence, there was an Entry of Judgment by the Supreme Court as of June 6, 1991, stating that the aforesaid modified decision had already become final and executory. It is the observation of the Court that this property in dispute was the subject of theNotice of Lis Pendens and that the modified decision of this Court promulgated by the Court of Appeals which had become final to the effect that should the defendants decide to offer the property for sale for a price of P11 Million or lower, and considering the mercurial and uncertain forces in our market economy today, the same right of first refusal to herein plaintiffs/appellants in the event that the subject property is sold for a price in excess of Eleven Million pesos or more. WHEREFORE, defendants are hereby ordered to execute the necessary Deed of Sale of the property in litigation in favor of plaintiffs Ang Yu Asuncion, Keh Tiong and Arthur Go for the consideration of P15 Million pesos in recognition of plaintiffs' right of first refusal and that a new Transfer Certificate of Title be issued in favor of the buyer. All previous transactions involving the same property notwithstanding the issuance of another title to Buen Realty Corporation, is hereby set aside as having been executed in bad faith. SO ORDERED. On September 22, 1991 respondent Judge issued another order, the dispositive portion of which reads: WHEREFORE, let there be Writ of Execution issue in the aboveentitled case directing the Deputy Sheriff Ramon Enriquez of this Court to implement said Writ of Execution ordering the defendants among others to comply with the aforesaid Order of this Court within a period of one (1) week from receipt of this Order and for defendants to execute the necessary Deed of Sale of the property in litigation in favor of the plaintiffs Ang Yu Asuncion, Keh Tiong and Arthur Go for the consideration of P15,000,000.00 and ordering the Register of Deeds of the City of Manila, to cancel and set aside the title already issued in favor of Buen Realty Corporation which was previously executed between the latter and defendants and to register the new title in favor of the aforesaid plaintiffs Ang Yu Asuncion, Keh Tiong and Arthur Go. SO ORDERED.
On the same day, September 27, 1991 the corresponding writ of execution (Annex C, Petition) was issued. 1

On 04 December 1991, the appellate court, on appeal to it by private respondent, set aside and declared without force and effect the above questioned orders of the court a quo. In this petition for review on certiorari, petitioners contend that Buen Realty can be held bound by the writ of execution by virtue of the notice of lis pendens, carried over on TCT No. 195816 issued in the name of Buen Realty, at the time of the latter's purchase of the property on 15 November 1991 from the Cu Unjiengs. We affirm the decision of the appellate court. A not too recent development in real estate transactions is the adoption of such arrangements as the right of first refusal, a purchase option and a contract to sell. For ready reference, we might point out some fundamental precepts that may find some relevance to this discussion. An obligation is a juridical necessity to give, to do or not to do (Art. 1156, Civil Code). The obligation is constituted upon the concurrence of the essential elements thereof, viz: (a) The vinculum juris or juridical tie which is the efficient cause established by the various sources of obligations (law, contracts, quasi-contracts, delicts and quasi-delicts); (b) the object which is the prestation or conduct; required to be observed (to give, to do or not to do); and (c) the subject-persons who, viewed from the demandability of the obligation, are the active (obligee) and the passive (obligor) subjects. Among the sources of an obligation is a contract (Art. 1157, Civil Code), which is a meeting of minds between two persons whereby one binds himself, with respect to the other, to give something or to render some service (Art. 1305, Civil Code). A contract undergoes various stages that include its negotiation or preparation, its perfection and, finally, its consummation. Negotiation covers the period from the time the prospective contracting parties indicate interest in the contract to the time the contract is concluded (perfected). The perfection of the contract takes place upon the concurrence of the essential elements thereof. A contract which is consensual as to perfection is so established upon a mere meeting of minds, i.e., the concurrence of offer and acceptance, on the object and on the cause thereof. A contract which requires, in addition to the above, the delivery of the object of the agreement, as in a pledge or commodatum, is commonly referred to as a real contract. In a solemn contract, compliance with certain formalities prescribed by law, such as in a donation of real property, is essential in order to make the act valid, the prescribed form being thereby an essential element thereof. The stage of consummationbegins when the parties perform their respective undertakings under the contract culminating in the extinguishment thereof. Until the contract is perfected, it cannot, as an independent source of obligation, serve as a binding juridical relation. In sales, particularly, to which the topic for discussion about the case at bench belongs, the contract is perfected when a person, called the seller, obligates himself, for a price certain, to deliver and to transfer ownership of a thing or right to another, called the buyer, over which the latter agrees. Article 1458 of the Civil Code provides: Art. 1458. By the contract of sale one of the contracting parties obligates himself to transfer the ownership of and to deliver a determinate thing, and the other to pay therefor a price certain in money or its equivalent. A contract of sale may be absolute or conditional. When the sale is not absolute but conditional, such as in a "Contract to Sell" where invariably the ownership of the thing sold is retained until the fulfillment of a positive suspensive condition (normally, the full payment of the purchase price), the breach of the condition will prevent the

obligation to convey title from acquiring an obligatory force. 2 In Dignos vs. Court of Appeals (158 SCRA 375), we have said that, although denominated a "Deed of Conditional Sale," a sale is still absolute where the contract is devoid of any proviso that title is reserved or the right to unilaterally rescind is stipulated, e.g., until or unless the price is paid. Ownership will then be transferred to the buyer upon actual or constructive delivery (e.g., by the execution of a public document) of the property sold. Where the condition is imposed upon the perfection of the contract itself, the failure of the condition would prevent such perfection. 3 If the condition is imposed on the obligation of a party which is not fulfilled, the other party may either waive the condition or refuse to proceed with the sale (Art. 1545, Civil Code). 4 An unconditional mutual promise to buy and sell, as long as the object is made determinate and the price is fixed, can be obligatory on the parties, and compliance therewith may accordingly be exacted. 5 An accepted unilateral promise which specifies the thing to be sold and the price to be paid, when coupled with a valuable consideration distinct and separate from the price, is what may properly be termed a perfected contract ofoption. This contract is legally binding, and in sales, it conforms with the second paragraph of Article 1479 of the Civil Code, viz: Art. 1479. . . .
An accepted unilateral promise to buy or to sell a determinate thing for a price certain is binding upon the promissor if the promise is supported by a consideration distinct from the price. (1451a) 6

Observe, however, that the option is not the contract of sale itself. 7 The optionee has the right, but not the obligation, to buy. Once the option is exercised timely, i.e., the offer is accepted before a breach of the option, a bilateral promise to sell and to buy ensues and both parties are then reciprocally bound to comply with their respective undertakings. 8 Let us elucidate a little. A negotiation is formally initiated by an offer. An imperfect promise (policitacion) is merely an offer. Public advertisements or solicitations and the like are ordinarily construed as mere invitations to make offers or only as proposals. These relations, until a contract is perfected, are not considered binding commitments. Thus, at any time prior to the perfection of the contract, either negotiating party may stop the negotiation. The offer, at this stage, may be withdrawn; the withdrawal is effective immediately after its manifestation, such as by its mailing and not necessarily when the offeree learns of the withdrawal (Laudico vs. Arias, 43 Phil. 270). Where a period is given to the offeree within which to accept the offer, the following rules generally govern: (1) If the period is not itself founded upon or supported by a consideration, the offeror is still free and has the right to withdraw the offer before its acceptance, or, if an acceptance has been made, before the offeror's coming to know of such fact, by communicating that withdrawal to the offeree (see Art. 1324, Civil Code; see also Atkins, Kroll & Co. vs. Cua, 102 Phil. 948, holding that this rule is applicable to a unilateral promise to sell under Art. 1479, modifying the previous decision in South Western Sugar vs. Atlantic Gulf, 97 Phil. 249; see also Art. 1319, Civil Code; Rural Bank of Paraaque, Inc., vs. Remolado, 135 SCRA 409; Sanchez vs. Rigos, 45 SCRA 368). The right to withdraw, however, must not be exercised whimsically or arbitrarily; otherwise, it could give rise to a damage claim under Article 19 of the Civil Code which ordains that "every person must, in the exercise of his rights and in the performance of his duties, act with justice, give everyone his due, and observe honesty and good faith."

(2) If the period has a separate consideration, a contract of "option" is deemed perfected, and it would be a breach of that contract to withdraw the offer during the agreed period. The option, however, is an independent contract by itself, and it is to be distinguished from the projected main agreement (subject matter of the option) which is obviously yet to be concluded. If, in fact, the optioner-offeror withdraws the offer before its acceptance(exercise of the option) by the optioneeofferee, the latter may not sue for specific performance on the proposed contract ("object" of the option) since it has failed to reach its own stage of perfection. The optioner-offeror, however, renders himself liable for damages for breach of the option. In these cases, care should be taken of the real nature of the consideration given, for if, in fact, it has been intended to be part of the consideration for the main contract with a right of withdrawal on the part of the optionee, the main contract could be deemed perfected; a similar instance would be an "earnest money" in a contract of sale that can evidence its perfection (Art. 1482, Civil Code). In the law on sales, the so-called "right of first refusal" is an innovative juridical relation. Needless to point out, it cannot be deemed a perfected contract of sale under Article 1458 of the Civil Code. Neither can the right of first refusal, understood in its normal concept, per se be brought within the purview of an option under the second paragraph of Article 1479, aforequoted, or possibly of an offer under Article 1319 9 of the same Code. An option or an offer would require, among other things, 10 a clear certainty on both the object and the cause or consideration of the envisioned contract. In a right of first refusal, while the object might be made determinate, the exercise of the right, however, would be dependent not only on the grantor's eventual intention to enter into a binding juridical relation with another but also on terms, including the price, that obviously are yet to be later firmed up. Prior thereto, it can at best be so described as merely belonging to a class of preparatory juridical relations governed not by contracts (since the essential elements to establish the vinculum juris would still be indefinite and inconclusive) but by, among other laws of general application, the pertinent scattered provisions of the Civil Code on human conduct. Even on the premise that such right of first refusal has been decreed under a final judgment, like here, its breach cannot justify correspondingly an issuance of a writ of execution under a judgment that merely recognizes its existence, nor would it sanction an action for specific performance without thereby negating the indispensable element of consensuality in the perfection of contracts. 11 It is not to say, however, that the right of first refusal would be inconsequential for, such as already intimated above, an unjustified disregard thereof, given, for instance, the circumstances expressed in Article 19 12 of the Civil Code, can warrant a recovery for damages. The final judgment in Civil Case No. 87-41058, it must be stressed, has merely accorded a "right of first refusal" in favor of petitioners. The consequence of such a declaration entails no more than what has heretofore been said. In fine, if, as it is here so conveyed to us, petitioners are aggrieved by the failure of private respondents to honor the right of first refusal, the remedy is not a writ of execution on the judgment, since there is none to execute, but an action for damages in a proper forum for the purpose. Furthermore, whether private respondent Buen Realty Development Corporation, the alleged purchaser of the property, has acted in good faith or bad faith and whether or not it should, in any case, be considered bound to respect the registration of the lis pendens in Civil Case No. 87-41058 are matters that must be independently addressed in appropriate proceedings. Buen Realty, not having been impleaded in Civil Case No. 87-41058, cannot be held subject to the writ of execution issued by respondent Judge, let alone ousted from the ownership and possession of the property, without first being duly afforded its day in court.

We are also unable to agree with petitioners that the Court of Appeals has erred in holding that the writ of execution varies the terms of the judgment in Civil Case No. 87-41058, later affirmed in CAG.R. CV-21123. The Court of Appeals, in this regard, has observed:
Finally, the questioned writ of execution is in variance with the decision of the trial court as modified by this Court. As already stated, there was nothing in said decision 13 that decreed the execution of a deed of sale between the Cu Unjiengs and respondent lessees, or the fixing of the price of the sale, or the cancellation of title in the name of petitioner (Limpin vs. IAC, 147 SCRA 516; Pamantasan ng Lungsod ng Maynila vs. IAC, 143 SCRA 311; De Guzman vs. CA, 137 SCRA 730; Pastor vs. CA, 122 SCRA 885).

It is likewise quite obvious to us that the decision in Civil Case No. 87-41058 could not have decreed at the time the execution of any deed of sale between the Cu Unjiengs and petitioners. WHEREFORE, we UPHOLD the Court of Appeals in ultimately setting aside the questioned Orders, dated 30 August 1991 and 27 September 1991, of the court a quo. Costs against petitioners.

Republic of the Philippines SUPREME COURT Manila SECOND DIVISION G.R. No. 127695 December 3, 2001

HEIRS OF LUIS BACUS, namely: CLARA RESMA BACUS, ROQUE R. BACUS, SR., SATURNINO R. BACUS, PRISCILA VDA. DE CABANERO, CARMELITA B. SUQUIB, BERNARDITA B. CARDENAS, RAUL R. BACUS, MEDARDO R. BACUS, ANSELMA B. ALBAN, RICARDO R. BACUS, FELICISIMA B. JUDICO, and DOMINICIANA B. TANGAL, petitioners, vs. HON. COURT OF APPEALS and SPOUSES FAUSTINO DURAY and VICTORIANA DURAY, respondents. QUISUMBING, J.: This petition assails the decision dated November 29, 1996, of the Court of Appeals in CA-G.R. CV No. 37566, affirming the decision dated August 3, 1991, of the Regional Trial Court of Cebu City, Branch 6, in Civil Case No. CEB-8935. The facts, as culled from the records, are as follows: On June 1, 1984, Luis Bacus leased to private respondent Faustino Duray a parcel of agricultural land in Bulacao, Talisay, Cebu. Designated as Lot No. 3661-A-3-B-2, it had an area of 3,002 square meters, covered by Transfer Certificate of Title No. 48866. The lease was for six years, ending May 31, 1990. The contract contained an option to buy clause. Under said option, the lessee had the exclusive and irrevocable right to buy 2,000 square meters of the property within five years from a year after the effectivity of the contract, at P200 per square meter. That rate shall be proportionately adjusted depending on the peso rate against the US dollar, which at the time of the execution of the contract was fourteen pesos.1 Close to the expiration of the contract, Luis Bacus died on October 10, 1989. Thereafter, on March 15, 1990, the Duray spouses informed Roque Bacus, one of the heirs of Luis Bacus, that they were willing and ready to purchase the property under the option to buy clause. They requested Roque Bacus to prepare the necessary documents, such as a Special Power of Attorney authorizing him to enter into a contract of sale,2 on behalf of his sisters who were then abroad. On March 30, 1990, due to the refusal of petitioners to sell the property, Faustino Duray's adverse claim was annotated by the Register of Deeds of Cebu, at the back of TCT No. 63269, covering the segregated 2,000 square meter portion of Lot No. 3661-A-3-B-2-A.3 Subsequently, on April 5, 1990, Duray filed a complaint for specific performance against the heirs of Luis Bacus with the Lupon Tagapamayapa of Barangay Bulacao, asking that he be allowed to purchase the lot specifically referred to in the lease contract with option to buy. At the hearing, Duray presented a certification4 from the manager of Standard Chartered Bank, Cebu City, addressed to Luis Bacus, stating that at the request of Mr. Lawrence Glauber, a bank client, arrangements were being made to allow Faustino Duray to borrow funds of approximately P700,000 to enable him to meet his obligations under the contract with Luis Bacus.5

Having failed to reach an agreement before the Lupon, on April 27, 1990, private respondents filed a complaint for specific performance with damages against petitioners before the Regional Trial Court, praying that the latter, (a) execute a deed of sale over the subject property in favor of private respondents; (b) receive the payment of the purchase price; and (c) pay the damages. On the other hand, petitioners alleged that before Luis Bacus' death, private respondents conveyed to them the former's lack of interest to exercise their option because of insufficiency of funds, but they were surprised to learn of private respondents' demand. In turn, they requested private respondents to pay the purchase price in full but the latter refused. They further alleged that private respondents did not deposit the money as required by theLupon and instead presented a bank certification which cannot be deemed legal tender. On October 30, 1990, private respondents manifested in court that they caused the issuance of a cashier's check in the amount of P650,0006 payable to petitioners at anytime upon demand. On August 3, 1991, the Regional Trial Court ruled in favor of private respondents, the dispositive portion of which reads: Premises considered, the court finds for the plaintiffs and orders the defendants to specifically perform their obligation in the option to buy and to execute a document of sale over the property covered by Transfer Certificate of Title # T-63269 upon payment by the plaintiffs to them in the amount of Six Hundred Seventy-Five Thousand Six Hundred Seventy-Five (P675,675.00) Pesos within a period of thirty (30) days from the date this decision becomes final. SO ORDERED.7 Unsatisfied, petitioners appealed to the respondent Court of Appeals which denied the appeal on November 29, 1996, on the ground that the private respondents exercised their option to buy the leased property before the expiration of the contract of lease. It held: . . . After a careful review of the entire records of this case, we are convinced that the plaintiffs-appellees validly and effectively exercised their option to buy the subject property. As opined by the lower court, "the readiness and preparedness of the plaintiff on his part, is manifested by his cautionary letters, the prepared bank certification long before the date of May 31, 1990, the final day of the option, and his filing of this suit before said date. If the plaintiff-appellee Francisco Duray had no intention to purchase the property, he would not have bothered to write those letters to the defendant-appellants (which were all received by them) and neither would he be interested in having his adverse claim annotated at the back of the T.C.T. of the subject property, two (2) months before the expiration of the lease. Moreover, he even went to the extent of seeking the help of the Lupon Tagapamayapa to compel the defendants-appellants to recognize his right to purchase the property and for them to perform their corresponding obligation.8 xxx xxx xxx

We therefore find no merit in this appeal. WHEREFORE, the decision appealed from is hereby AFFIRMED.9

Hence, this petition where petitioners aver that the Court of Appeals gravely erred and abused its discretion in: I. . . . UPHOLDING THE TRIAL COURT'S RULING IN THE SPECIFIC PERFORMANCE CASE BY ORDERING PETITIONERS (DEFENDANTS THEREIN) TO EXECUTE A DOCUMENT OF SALE OVER THE PROPERTY IN QUESTION (WITH TCT NO. T-63269) TO THEM IN THE AMOUNT OF P675,675.00 WITHIN THIRTY (30) DAYS FROM THE DATE THE DECISION BECOMES FINAL; II. . . . DISREGARDING LEGAL PRINCIPLES, SPECIFIC PROVISIONS OF LAW AND JURISPRUDENCE IN UPHOLDING THE DECISION OF THE TRIAL COURT TO THE EFFECT THAT PRIVATE RESPONDENTS HAD EXERCISED THEIR RIGHT OF OPTION TO BUY ON TIME; THUS THE PRESENTATION OF THE CERTIFICATION OF THE BANK MANAGER OF A BANK DEPOSIT IN THE NAME OF ANOTHER PERSON FOR LOAN TO RESPONDENTS WAS EQUIVALENT TO A VALID TENDER OF PAYMENT AND A SUFFICIENT COMPLAINCE (SIC) OF A CONDITION FOR THE EXERCISE OF THE OPTION TO BUY; AND III. . . . UPHOLDING THE TRIAL COURT'S RULING THAT THE PRESENTATION OF A CASHER'S (SIC) CHECK BY THE RESPONDENTS IN THE AMOUNT OF P625,000.00 EVEN AFTER THE TERMINATION OF THE TRIAL ON THE MERITS WITH BOTH PARTIES ALREADY HAVING RESTED THEIR CASE, WAS STILL VALID COMPLIANCE OF THE CONDITION FOR THE PRIVATE RESPONDENTS' (PLAINTIFFS THEREIN) EXERCISE OF RIGHT OF OPTION TO BUY AND HAD A FORCE OF VALID AND FULL TENDER OF PAYMENT WITHIN THE AGREED PERIOD.10 Petitioners insist that they cannot be compelled to sell the disputed property by virtue of the nonfulfillment of the obligation under the option contract of the private respondents. Private respondents first aver that petitioners are unclear if Rule 65 or Rule 45 of the Rules of Court govern their petition, and that petitioners only raised questions of facts which this Court cannot properly entertain in a petition for review. They claim that even assuming that the instant petition is one under Rule 45, the same must be denied for the Court of Appeals has correctly determined that they had validly exercised their option to buy the leased property before the contract expired. In response, petitioners state that private respondents erred in initially classifying the instant petition as one under Rule 65 of the Rules of Court. They argue that the petition is one under Rule 45 where errors of the Court of Appeals, whether evidentiary or legal in nature, may be reviewed. We agree with private respondents that in a petition for review under Rule 45, only questions of law may be raised.11 However, a close reading of petitioners' arguments reveal the following legal issues which may properly be entertained in the instant petition: a) When private respondents opted to buy the property covered by the lease contract with option to buy, were they already required to deliver the money or consign it in court before petitioner executes a deed of transfer? b) Did private respondents incur in delay when they did not deliver the purchase price or consign it in court on or before the expiration of the contract? On the first issue, petitioners contend that private respondents failed to comply with their obligation because there was neither actual delivery to them nor consignation in court or with the Municipal,

City or Provincial Treasurer of the purchase price before the contract expired. Private respondents' bank certificate stating that arrangements were being made by the bank to release P700,000 as a loan to private respondents cannot be considered as legal tender that may substitute for delivery of payment to petitioners nor was it a consignation. Obligations under an option to buy are reciprocal obligations.12 The performance of one obligation is conditioned on the simultaneous fulfillment of the other obligation.13 In other words, in an option to buy, the payment of the purchase price by the creditor is contingent upon the execution and delivery of a deed of sale by the debtor. In this case, when private respondents opted to buy the property, their obligation was to advise petitioners of their decision and their readiness to pay the price. They were not yet obliged to make actual payment. Only upon petitioners' actual execution and delivery of the deed of sale were they required to pay. As earlier stated, the latter was contingent upon the former. In Nietes vs. Court of Appeals, 46 SCRA 654 (1972), we held that notice of the creditor's decision to exercise his option to buy need not be coupled with actual payment of the price, so long as this is delivered to the owner of the property upon performance of his part of the agreement. Consequently, since the obligation was not yet due, consignation in court of the purchase price was not yet required. Consignation is the act of depositing the thing due with the court or judicial authorities whenever the creditor cannot accept or refuses to accept payment and it generally requires a prior tender of payment. In instances, where no debt is due and owing, consignation is not proper.14 Therefore, petitioners' contention that private respondents failed to comply with their obligation under the option to buy because they failed to actually deliver the purchase price or consign it in court before the contract expired and before they execute a deed, has no leg to stand on. Corollary, private respondents did not incur in delay when they did not yet deliver payment nor make a consignation before the expiration of the contract. In reciprocal obligations, neither party incurs in delay if the other does not comply or is not ready to comply in a proper manner with what is incumbent upon him. Only from the moment one of the parties fulfills his obligation, does delay by the other begin.15 In this case, private respondents, as early as March 15, 1990, communicated to petitioners their intention to buy the property and they were at that time undertaking to meet their obligation before the expiration of the contract on May 31, 1990. However, petitioners refused to execute the deed of sale and it was their demand to private respondents to first deliver the money before they would execute the same which prompted private respondents to institute a case for specific performance in the Lupong Tagapamayapa and then in the RTC. On October 30, 1990, after the case had been submitted for decision but before the trial court rendered its decision, private respondents issued a cashier's check in petitioners' favor purportedly to bolster their claim that they were ready to pay the purchase price. The trial court considered this in private respondents' favor and we believe that it rightly did so, because at the time the check was issued, petitioners had not yet executed a deed of sale nor expressed readiness to do so. Accordingly, as there was no compliance yet with what was incumbent upon petitioners under the option to buy, private respondents had not incurred in delay when the cashier's check was issued even after the contract expired. WHEREFORE, the instant petition is DENIED. The decision dated November 29, 1996 of the Court of Appeals is hereby AFFIRMED. Costs against petitioners.

Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. L-13602 April 6, 1918

LEUNG BEN, plaintiff, vs. P. J. O'BRIEN, JAMES A OSTRAND and GEO. R. HARVEY, judges of First Instance of city of Manila,defendants. Thos. D. Aitken and W. A. Armstrong for plaintiff. Kincaid & Perkins for defendants. STREET, J.: This is an application for a writ of certiorari, the purpose of which is to quash an attachment issued from the Court of First Instance of the City of Manila under circumstances hereinbelow stated. Upon December 12, 1917, an action was instituted in the Court of First Instance of the city of Manila by P. J. O'Brien to recover of Leung Ben the sum of P15,000 alleged to have been lost by the plaintiff to the defendant in a series of gambling, banking and percentage games conducted ruing the two or three months prior to the institution of the suit. In his verified complaint the plaintiff asked for an attachment, under section 424, and 412 (1) of the Code of Civil Procedure, against the property of the defendant, on the ground that the latter was about to depart from the Philippine islands with intent to defraud his creditors. This attachment was issued; and acting under the authority thereof, the sheriff attached the sum of P15,000 which had been deposited by the defendant with the International Banking Corporation. The defendant thereupon appeared by his attorney and moved the court to quash the attachment. Said motion having dismissed in the Court of First Instance, the petitioner, Leung Ben, the defendant in that action, presented to this court, upon January 8, 1918 his petition for the writ of certiorari directed against P. J. O'Brien and the judges of the Court of First Instance of the city of Manila whose names are mentioned in the caption hereof. The prayer is that the Honorable James A. Ostrand, as the judge having cognizance of the action in said court be required to certify the record to this court for review and that the order of attachment which had been issued should be revoked and discharged. with costs. Upon the filing of said petition in this court the usual order was entered requiring the defendants to show cause why the writ should not issue. The response of the defendants, in the nature of a demurrer, was filed upon January 21, 1918; and the matter is now heard upon the pleadings thus presented. The provision of law under which this attachment was issued requires that there should be accuse of action arising upon contract, express or implied. The contention of the petitioner is that the statutory action to recover money lost at gaming is that the statutory action to recover money lost at gaming is no such an action as is contemplated in this provision, and he therefore insists that the original complaint shows on its face that the remedy of attachment is not available in aid thereof; that the Court of First Instance acted in excess of its jurisdiction in granting the writ of attachment; that the petitioner has no plain, speedy, and adequate remedy by appeal or otherwise; and that consequently the writ of certiorari supplies the appropriate remedy for his relief.

The case presents the two following questions of law, either of which, if decided unfavorably to the petitioner, will be fatal to his application: (1) Supposing that the Court of First Instance has granted an attachment for which there is no statutory authority, can this court entertain the present petition and grant the desired relief? (2) Is the statutory obligation to restore money won at gaming an obligation arising from "contract, express or implied?" We are of the opinion that the answer to the first question should be in the affirmative. Under section 514 of the Code of Civil Procedure the Supreme Court has original jurisdiction by the writ of certiorari over the proceedings of Courts of First Instance, wherever said courts have exceeded their jurisdiction and there is no plaint, speedy, and adequate remedy. In the same section, it is further declared that the proceedings in the Supreme Court in such cases hall be as prescribed for Courts of First Instance in section 217-221, inclusive, of said Code. This Supreme Court, so far as applicable, the provisions contained in those section to the same extent as if they had been reproduced verbatim immediately after section 514. Turning to section 217, we find that, in defining the conditions under which certiorari can be maintained in a Court of First Instance substantially the same language is used as is the same remedy can be maintained in the Supreme Court of First Instance, substantially the same language is used as is found in section 514 relative to the conditions under which the same remedy can be maintained in the Supreme Court, namely, when the inferior tribunal has exceeded its jurisdiction and there is no appeal, nor any plain, speedy and adequate remedy. In using these expressions the author of the Code of Civil Procedure merely adopted the language which, in American jurisdictions at least, had long ago reached the stage of stereotyped formula. In section 220 of the same Code, we have a provision relative to the final proceedings in certiorari, and herein it is stated that the court shall determine whether the inferior tribunal has regularly pursued its authority it shall give judgment either affirming annulling, or modifying the proceedings below, as the law requires. The expression, has not regularly pursued its authority as here used, is suggestive, and we think it should be construed in connection with the other expressions have exceeded their jurisdiction, as used in section 514, and has exceeded their jurisdiction as used in section 217. Taking the three together, it results in our opinion that any irregular exercise of juridical power by a Court of First Instance, in excess of its lawful jurisdiction, is remediable by the writ of certiorari, provided there is no other plain, speedy, and adequate remedy; and in order to make out a case for the granting of the writ it is not necessary that the court should have acted in the matter without any jurisdiction whatever. Indeed the repeated use of expression excess of jurisdiction shows that the lawmaker contemplated the situation where a court, having jurisdiction should irregularly transcend its authority as well as the situation where the court is totally devoid of lawful power. It may be observed in this connection that the word jurisdiction as used in attachment cases, has reference not only to the authority of the court to entertain the principal action but also to its authority to issue the attachment, as dependent upon the existence of the statutory ground. (6 C. J., 89.) This distinction between jurisdiction to issue the attachment as an ancillary remedy incident to the principal litigation is of importance; as a court's jurisdiction over the main action may be complete, and yet it may lack authority to grant an attachment as ancillary to such action. This distinction between jurisdiction over the ancillary has been recognized by this court in connection with actions involving the appointment of a receiver. Thus in Rocha & Co. vs. Crossfield and Figueras (6 Phil. Rep., 355), a receiver had been appointed without legal justification. It was held that the order making the appointment was beyond the jurisdiction of the court; and though the court admittedly had jurisdiction of the main cause, the order was vacated by this court upon application a writ

of certiorari. (See Blanco vs. Ambler, 3 Phil. Rep., 358, Blanco vs. Ambler and McMicking 3 Phil. Rep., 735, Yangco vs. Rohde, 1 Phil. Rep., 404.) By parity of reasoning it must follow that when a court issues a writ of attachment for which there is no statutory authority, it is acting irregularly and in excess of its jurisdiction, in the sense necessary to justify the Supreme Court in granting relief by the writ of certiorari. In applying this proposition it is of course necessary to take account of the difference between a ground of attachment based on the nature of the action and a ground of attachment based on the acts or the conditions of the defendant. Every complaint must show a cause of action some sort; and when the statue declares that the attachment may issue in an action arising upon contract, the express or implied, it announces a criterion which may be determined from an inspection of the language of the complaint. The determination of this question is purely a matter of law. On the other hand, when the stature declares that an attachment may be issued when the defendant is about to depart from the Islands, a criterion is announced which is wholly foreign to the cause of action; and the determination of it may involve a disputed question of fact which must be decided by the court. In making this determination, the court obviously acts within its powers; and it would be idle to suppose that the writ of certiorari would be available to reverse the action of a Court of First Instance in determining the sufficiency of the proof on such a disputed point, and in granting or refusing the attachment accordingly. We should not be understood, in anything that has been said, as intending to infringe the doctrine enunciated by this court in Herrera vs. Barretto and Joaquin (25 Phil. Rep., 245), when properly applied. It was there held that we would not, upon application for a writ of certiorari, dissolve an interlocutory mandatory injunction that had been issued in a Court of First Instance as an incident in an action of mandamus. The issuance of an interlocutory injunction depends upon conditions essentially different from those involved in the issuance of an attachment. The injunction is designed primarily for the prevention of irreparable injury and the use of the remedy is in a great measure dependent upon the exercise of discretion. Generally, it may be said that the exercise of the injunctive powers is inherent in judicial authority; and ordinarily it would be impossible to distinguish between the jurisdiction of the court in the main litigation and its jurisdiction to grant an interlocutory injunction, for the latter is involved in the former. That the writ of certiorari can not be used to reverse an order denying a motion for a preliminary injunction is of course not to cavil. (Somes vs. Crossfield and Molina, 8 Phil. Rep., 284.) But it will be said that the writ of certiorari is not available in this cae, because the petitioner is protected by the attachment bond, and that he has a plain, speedy, and adequate remedy appeal. This suggestion seems to be sufficiently answered in the case of Rocha & Co vs. Crossfield and Figueras (6 Phil. Rep., 355), already referred to, and the earlier case there cited. The remedy by appeal is not sufficiently speedy to meet the exigencies of the case. An attachment is extremely violent, and its abuse may often result in infliction of damage which could never be repaired by any pecuniary award at the final hearing. To postpone the granting of the writ in such a case until the final hearing and to compel the petitioner to bring the case here upon appeal merely in order to correct the action of the trial court in the matter of allowing the attachment would seem both unjust and unnecessary. Passing to the problem propounded in the second question it may be observed that, upon general principles,. recognize both the civil and common law, money lost in gaming and voluntarily paid by the loser to the winner can not in the absence of statue, be recovered in a civil action. But Act No. 1757 of the Philippine Commission, which defines and penalizes several forms of gambling, contains numerous provisions recognizing the right to recover money lost in gambling or in the playing of certain games (secs. 6, 7, 8, 9, 11). The original complaint in the action in the Court of First Instance is not clear as to the particular section of Act No. 1757 under which the action is brought, but it is alleged that the money was lost at gambling, banking, and percentage game in which the defendant

was banker. It must therefore be assumed that the action is based upon the right of recovery given in Section 7 of said Act, which declares that an action may be brought against the banker by any person losing money at a banking or percentage game. Is this a cause arising upon contract, express or implied, as this term is used in section 412 of the Code of Civil Procedure? To begin the discussion, the English version of the Code of Civil Procedure is controlling (sec. 15, Admin. Code, ed. of 1917). Furthermore it is universally admitted to be proper in the interpretation of any statute, to consider its historical antecedents and its juris prudential sources. The Code of Civil Procedure, as is well known, is an American contribution to Philippine legislation. It therefore speaks the language of the common-law and for the most part reflects its ideas. When the draftsman of this Code used the expression contract, express or implied, he used a phrase that has been long current among writers on American and English law; and it is therefore appropriate to resort to that system of law to discover the appropriate to resort to that system of law to discover the meaning which the legislator intended to convey by those meaning which the legislator intended to convey by those terms. We remark in passing that the expression contrato tracito, used in the official translation of the Code of Civil Procedure as the Spanish equivalent of implied contract, does not appear to render the full sense of the English expression. The English contract law, so far as relates to simple contracts is planted upon two foundations, which are supplied by two very different conceptions of legal liability. These two conceptions are revealed in the ideas respectively underlying (1) the common- law debt and (2) the assumptual promise. In the early and formative stages of the common-law the only simple contract of which the courts took account was the real contract or contract re, in which the contractual duty imposed by law arises upon the delivery of a chattle, as in the mutuum, commodatum,depositum, and the like; and the purely consensual agreements of the Roman Law found no congenial place in the early common law system. In course of time the idea underlying the contract re was extended so as to include from one person to another under such circumstances as to constitute a justa cuas debendi. The obligation thereby created was a debt. The constitutive element in this litigation is found in the fact that the debtor has received something from the creditor, which he is bound by the obligation of law to return or pay for. From an early day this element was denominated the quid pro quo, an ungainly phrase coined by Mediaeval Latinity. The quid pro quo was primarily a materials or physical object, and its constituted the recompense or equivalent acquired by the debtor. Upon the passage of thequid pro quo from one party to the other, the law imposed that real contractual duty peculiar to the debt. No one conversant with the early history of English law would ever conceive of the debt as an obligation created by promise. It is the legal duty to pay or deliver a sum certain of money or an ascertainable quantity of ponderable or measurable chattles. The ordinary debt, as already stated, originates in a contract in which a quid pro quo passes to the debtor at the time of the creation of the debt, but the term is equally applicable to duties imposed by custom or statute, or by judgment of a court. The existence of a debt supposes one person to have possession of thing (res) which he owes and hence ought to turn over the owner. This obligation is the oldest conception of contract with which the common law is familiar; and notwithstanding the centuries that have rolled over Westminster Hall that conception remains as one of the fundamental bases of the common-law contract. Near the end of the fifteenth century there was evolved in England a new conception of contractual liability, which embodied the idea of obligation resulting from promise and which found expression in the common law assumpsit, or parol promise supported by a consideration. The application of this novel conception had the effect of greatly extending the filed of contractual liability and by this

means rights of action came to be recognized which had been unknown before. The action of assumpsit which was the instrument for giving effect to this obligation was found to be a useful remedy; and presently this action came to be used for the enforcement of common-law debts. The result was to give to our contract law the superficial appearance of being based more or less exclusively upon the notion of the obligation of promise. An idea is widely entertained to the effect that all simple contracts recognized in the common-law system are referable to a singly category. They all have their roots, so many of us imagine, in one general notion of obligation; and of course the obligation of promise is supposed to supply this general notion, being considered a sort of menstruum in which all other forms of contractual obligation have been dissolved. This a mistake. The idea of contractual duty embodied in the debt which was the first conception of contract liability revealed in the common law, has remained, although it was detained to be in a measure obscured by the more modern conception of obligation resulting from promise. What has been said is intended to exhibit the fact that the duty to pay or deliver a sum certain of money or an ascertainable quantity of ponderable or measurable chattles which is indicated by them debt has ever been recognized, in the common-law system, as a true contract, regardless, of the source of the duty or the manner in which it is create whether derived from custom, statue or some consensual transaction depending upon the voluntary acts of the parties. the form of contract known as the debt is of the most ancient lineage; and when reference is had to historical antecedents, the right of the debt to be classed as a contract cannot be questioned. Indeed when the new form of engagement consisting of the parol promise supported by a consideration first appeared, it was looked upon as an upstart and its right to be considered a true contract was questioned. It was long customary to refer to it exclusively as an assumpsit, agreement, undertaking, or parol promise, in fact anything but a contract. Only in time did the new form of engagement attain the dignity of being classed among true contract. The term implied takers us into shadowy domain of those obligations the theoretical classification of which has engaged the attention of scholars from the time of Gaius until our own day and has been a source of as much difficulty to the civilian as to the common-law jurist. There we are concerned with those acts which make one person debtor to another without there having intervened between them any true agreement tending to produce a legal bond (vinculum juris). Of late years some American and English writers have adopted the term quasi-contract as descriptive of these obligations or some of them; but the expression more commonly used is implied contract. Upon examination of these obligations, from the view point of the common-law jurisprudence, it will be found that they fall readily into two divisions according as they bear an analogy to the commonlaw debt or to the common law assumpsit. To exhibit the scope of these different classes of obligations is here impracticable. It is only necessary in this connection to observe that the most conspicuous division is that which comprises duties in the nature of debt. The characteristic feature of these obligations is that upon certain states of fact the law imposes an obligation to pay a sum certain of money; and it is characteristic of this obligation that the money in respect to which the duty is raised is conceived as being equivalent of something taken or detained under circumstances giving rise to the duty to return or compensate therefore. The proposition that no one shall be allowed to enrich himself unduly at the expense of another embodies the general principle here lying at the basis of obligation. The right to recover money improperly paid (repeticion de lo indebido) is also recognized as belong to this class of duties. It will observed that according to the Civil Code obligations are supposed to be derived either from (1) the law, (2) contracts and quasi-contracts, (3) illicit acts and omission, or (4) acts in which some sort ob lame or negligence is present. This enumeration of sources of obligations and the obligation

imposed by law are different types. The learned Italian jurist, Jorge Giorgi, criticises this assumption and says that the classification embodied in the code is theoretically erroneous. His conclusion is that one or the other of these categories should have been suppressed and merged in the other. (Giorgi, Teoria de las Obligaciones, Spanish ed., vol. 5 arts. 5, 7, 9.) The validity of this criticism is, we thin, self-evident; and it is of interest to note that the common law makes no distinction between the two sources of liability. The obligations which in the Code are indicated as quasi-contracts, as well as those arising ex lege, are in the common la system, merged into the category of obligations imposed by law, and all are denominated implied contracts. Many refinements, more or less illusory, have been attempted by various writers in distinguishing different sorts of implied contracts, as for example, the contract implied as of fact and the contract implied as of law. No explanation of these distinctions will be here attempted. Suffice it to say that the term contract, express or implied, is used to by common-law jurists to include all purely personal obligations other than those which have their source in delict, or tort. As to these it may be said that, generally speaking, the law does not impose a contractual duty upon a wrongdoer to compensate for injury done. It is true that in certain situations where a wrongdoer unjustly acquired something at the expense of another, the law imposes on him a duty to surrender his unjust acquisitions, and the injured party may here elect to sue upon this contractual duty instead of suing upon the tort; but even here the distinction between the two liabilities, in contract and in tort, is never lost to sight; and it is always recognized that the liability arising out of the tort is delictual and not of a contractual or quasi-contractual nature. In the case now under consideration the duty of the defendant to refund the money which he won from the plaintiff at gaming is a duty imposed by statute. It therefore arises ex lege. Furthermore, it is a duty to return a certain sum which had passed from the plaintiff to the defendant. By all the criteria which the common law supplies, this a duty in the nature of debt and is properly classified as an implied contract. It is well- settled by the English authorities that money lost in gambling or by lottery, if recoverable at all, can be recovered by the loser in an action ofindebitatus assumpsit for money had and received. (Clarke vs. Johnson. Lofft, 759; Mason vs. Waite, 17 Mass., 560; Burnham vs. Fisher, 25 Vt., 514.) This means that in the common law the duty to return money won in this way is an implied contract, or quasi-contract. It is no argument to say in reply to this that the obligation here recognized is called an implied contract merely because the remedy commonly used in suing upon ordinary contract can be here used, or that the law adopted the fiction of promise in order to bring the obligation within the scope of the action of assumpsit. Such statements fail to express the true import of the phenomenon. Before the remedy was the idea; and the use of the remedy could not have been approved if it had not been for historical antecedents which made the recognition of this remedy at one logical and proper. Furthermore, it should not be forgotten that the question is not how this duty but what sort of obligation did the author of the Code of Civil Procedure intend to describe when he sued the term implied contract in section 412. In what has been said we have assumed that the obligation which is at the foundation of the original action in the court below is not a quasi-contract, when judge by the principles of the civil law. A few observations will show that this assumption is not by any means free from doubt. The obligation in question certainly does not fall under the definition of either of the two-quasi- contracts which are made the subject of special treatment in the Civil Code, for its does not arise from a licit act as contemplated in article 1895. The obligation is clearly a creation of the positive law a circumstance which brings it within the purview of article 1090, in relation with article, 1089; and it is also derived from an illicit act, namely, the playing of a prohibited game. It is thus seen that the provisions of the Civil Code which might be consulted with a view to the correct theoretical classification of this obligation are unsatisfactory and confusing.

The two obligations treated in the chapter devoted to quasi-contracts in the Civil Code are (1) the obligation incident to the officious management of the affairs of other person (gestion de negocios ajenos) and (2) the recovery of what has been improperly paid (cabro de lo indebido). That the authors of the Civil Code selected these two obligations for special treatment does not signify an intention to deny the possibility of the existence of other quasi-contractual obligations. As is well said by the commentator Manresa. The number of the quasi-contracts may be indefinite as may be the number of lawful facts, the generations of the said obligations; but the Code, just as we shall see further on, in the impracticableness of enumerating or including them all in a methodical and orderly classification, has concerned itself with two only namely, the management of the affairs of other person and the recovery of things improperly paid without attempting by this to exclude the others. (Manresa, 2d ed., vol. 12, p. 549.) It would indeed have been surprising if the authors of the Code, in the light of the jurisprudence of more than a thousand years, should have arbitrarily assumed to limit the quasi-contract to two obligations. The author from whom we have just quoted further observes that the two obligations in question were selected for special treatment in the Code not only because they were the most conspicuous of the quasi-contracts, but because they had not been the subject of consideration in other parts of the Code. (Opus citat., 550.) It is well recognized among civilian jurists that the quasi- contractual obligations cover a wide range. The Italian jurist, Jorge Giorgi, to whom we have already referred, considers under this head, among other obligations, the following: payments made upon a future consideration which is not realized or upon an existing consideration which fails; payments wrongfully made upon a consideration which is contrary to law, or opposed to public policy; and payments made upon a vicious consideration or obtained by illicit means (Giorgi, Teoria de las Obligaciones, vol. 5, art. 130.) Im permitting the recovery of money lost at play, Act No. 1757 has introduced modifications in the application of articles 1798, 180`, and 1305 of the Civil Code. The first two of these articles relate to gambling contracts, while article 1305 treats of the nullity of contracts proceeding from a vicious or illicit consideration. Taking all these provisions together, it must be apparent that the obligation to return money lost at play has a decided affinity to contractual obligations; and we believe that it could, without violence to the doctrines of the civil law, be held that such obligations is an innominate quasi-contract. It is, however, unnecessary to place the decision on this ground. From what has been said it follows that in our opinion the cause of action stated in the complaints in the court below is based on a contract, express or implied and is therefore of such nature that the court had authority to issue writ of attachment. The application for the writ of certiorari must therefore be denied and the proceedings dismissed. So ordered. Arellano, C.J., Torres, Johnson and Carson, JJ., concur.

Separate Opinions MALCOLM, J., concurring:

As I finished reading the learned and interesting decision of the majority, the impression which remained was that the court was enticed by the nice and unusual points presented to make a hard case out of an easy one and unfortunately t do violence to the principles of certiorari. The simple questions are : Di the Court of First Instance of city of Manila exceed its jurisdiction in granting an attachments against the property of the defendant, now plaintiff? Has this defendant, now become the plaintiff, any other plain, speedy and adequate remedy? The answer are found in the decision of thinks court, in Herrera vs. Barretto and Joaquin ([1913], 25 Phil., 245), from which I quote the following: It has been repeatedly held by this court that a writ of certiorari will not be issued unless it clearly appears that the court to which it is to be directed acted without or in excess of jurisdiction. It will not be issued to cure errors in the proceedings or to correct erroneous conclusions of law or of fact. If the court has jurisdiction. It will not be issued to cure errors in the proceedings to correct jurisdiction of the subject matter and f the person, decisions upon all question pertaining to the cause are decisions within its jurisdiction and, however irregular or erroneous they may be, cannot be corrected by certiorari. The Code of Civil Procedure giving Courts of First Instance general jurisdiction in actions for mandamus, it goes without saying that the Court of First Instance had jurisdiction in the present case to resolve every question arising in such an action and t decide every question presented to it which pertained to the cause. It has already been held by this court, that while it is a power to be exercised only in extreme case, a Court of First Instance has power to issue a mandatory injunction t stand until the final determination of the action in which it is issued. While the issuance of the mandatory injunction in this particular case may have been irregular and erroneous, a question concerning which we express no opinion, nevertheless its issuance was within the jurisdiction of the court and its action is not reveiwable on certiorari. It is not sufficient to say that it was issued wrongfully and without sufficient grounds and in the absence of the other party. The question is, Did the court act with jurisdiction? It has been urged that the court exceeded its jurisdiction in requiring the municipal president t issue the license, for the reason that he was not the proper person to issue it and that, if he was the proper person, he had the right to exercise a discretion as to whom the license should be issued. We do not believe that either of these questions goes to the jurisdiction of the court to act. One of the fundamental question in amandamus against a public officer is whether or not that officer has the right to exercise discretion in the performance of the act which the plaintiff asks him to perform. It is one of the essential determinations of the cause. To claim that the resolution of that question may deprive the court of jurisdiction is to assert a novel proposition. It is equivalent to the contention that a court has jurisdiction if he decides right but no jurisdiction if he decides wrong. It may be stated generally that it is never necessary to decide the fundamental questions of a cause to determine whether the court has jurisdiction. The question of jurisdiction is preliminary and never touches the merits of the case. The determination of the fundamental questions of a cause are merely the exercise of a jurisdiction already conceded. In the case at bar no one denies the power, authority or jurisdiction of the Court of First Instance to take cognizance of an action formandamus and to decide very question which arises in that cause and pertains thereto. The contention that the decision of one of those question, if wrong, destroys jurisdiction involves an evident contradiction. Jurisdiction is the authority to hear and determine a cause the right to act in a case. Since it is the power to hear and determine, it does not depend either upon the regularity of the exercise of that power or upon the rightfulness of the decision made. Jurisdiction should therefore be distinguished from the exercise of jurisdiction. The authority to decide a case at all, and not the decision rendered therein, is what makes up jurisdiction. Where there is

jurisdiction of the person and subject matter, as we have said before, the decision of all other questions arising in the case an exercise of that jurisdiction. Then follows an elaborate citation and discussion of American authorities, including a decision of the United States Supreme Court and of the applicable Philippine cases. The decision continues" The reasons givens in these cases last cited for the allowance of the writ of prohibition are applicable only to the class of cases with which the decision deal and do not in any way militate against the general proposition herein asserted. Those which relate to election contest are based upon the principle that those proceedings, are special in their nature and must be strictly followed, a material departure from the statute resulting a loss, or in an excess of jurisdiction. The cases relating to receivers are based, in a measure, upon the principle the appointment of a receiver being governed by the statute; and in part upon the theory that the appointment of a receiver in an improper case is in substance a bankruptcy proceeding, the taking of which is expressly prohibited by law. The case relative to the allowance of alimony pendente lite when the answer denies the marriage is more difficult to distinguish. The reasons in support of the doctrine laid down in that case are given the opinion in full and they seem to place the particular case to which they refer in a class by itself. It is not alight things that the lawmakers have abolished writs of error and with them certiorari and prohibition, in so far as they were methods by which the mere errors of an inferior curt could be corrected. As instruments to that end they no longer exist. Their place is no taken by the appeal. So long as the inferior court retains jurisdiction its errors can be corrected only by that method. The office of the writ ofcertiorari has been reduced to the correction of defects of jurisdiction solely and cannot legally be used for any other purpose. It is truly an extra ordinary remedy and in this jurisdiction, its use is restricted to truly extraordinary cases cases in which the action of the inferior court is wholly void, where any further steps in the case would result in a waste of time and money and would produce no result whatever; where the parties, or their privies, would be utterly deceived; where a final judgment or decree would be nought but a snare and a delusion, deciding nothing, protecting nobody, a juridical pretension, a recorded falsehood, a standing menace. It is only to avoid such result as these that a writ of certiorari is issuable; and even here an appeal will lie if the aggrieved party prefers to prosecute it. A full and thorough examination of all the decided cases in this court touching the question of certiorari and prohibition fully supports the proposition already stated that, where a Court of First Instance has jurisdiction of the subject matter and of the person, its decision of any question pertaining to the cause, however, erroneous, cannot be reviewed by certiorari, but must be corrected by appeal. I see no reason to override the decision in Herrera vs. Barretto and Joaquin (supra). Accordingly, I can do no better than to make the language of Justice Moreland my own. applying these principles, it is self-evident that this court should no entertain the present petition and should not grant the desired relief.

FISHER, J., dissenting:

I am in full accord with the view that the remedy of certiorari may be invoked in such cases as this, but I am constrained to dissent from the opinion of the majority as regards the meaning of the term implied contract. Section 412 of the code of Civil Procedure in connection with section 424, authorizes the preliminary attachment of the property of the defendant: "(1) In an action for the recovery of money or damages on a cause of action arising upon contract, express or implied, when the defendant is about to depart from the Philippine Islands, with intent to defraud his creditors; (2) . . .; (3) . . .; (4) . . .; (5) When the defendant has removed or disposed of his property, or is about to do so, with intent to defraud his creditors." It is evident that the terms of paragraph five of the article cited are much broader than those of the first paragraph. The fifth paragraph is not limited to action arising from contract, but is by its terms applicable to actions brought for the purpose of enforcing extra-contractual rights as well as contract rights. The limitation upon cases falling under paragraph five is to be found, not in the character of the obligation for the enforcement for which the action is brought, but in the terms of article 4265, which requires that the affidavit show that the amount due the plaintiff . . . is as much as the sum for which the order is granted. That is to say, when application is made for a preliminary attachment upon the ground that the plaintiff is about to dispose of his property with intent to defraud his creditors thus bringing the case within the terms of paragraph five of the section it is not necessary to show that the obligation in suit is contractual in its origin, but is sufficient to show that the breach of the obligation, as shown by the facts stated in the complaint and affidavit, imposes upon the defendant the obligation to pay a specific and definite sum. For example, if it is alleged in the complaint that the defendant by negligence, has caused the destruction by fire of a building belonging to plaintiff, and that such building was worth a certain sum of money, these facts would show a definite basis upon which to authorize the granting of the writ. But if it were averred that the defendant has published a libel concerning the plaintiff, to the injury of his feeling and reputation, there is no definite basis upon which to grant an attachment, because the amount of the damage suffered, being necessarily uncertain and indeterminate, cannot be ascertained definitely until the trail has been completed. But it appears that the legislature although it has seen fit to authorize a preliminary attachment in aid of action of all kinds when the defendant is concealing his property with intent to defraud his creditors, has provided is about to depart from the country with intent to defraud his creditos, the writ will issue only when the action in aid of which it is sought arises from a contract express or implied. If an attachment were permitted upon facts bringing the application with the first paragraph of the section in support of action of any kind, whether the obligation sued upon is contractual or not, then paragraph five would by construction be made absolutely identical with paragraph one, and this would be in effect equivalent to the complete eliminated of the last two lines of the first paragraph. It is a rule of statutory construction that effect should be given to all parts of the statue, if possible. I can see no reason why the legislature should have limited cases falling within the firs paragraph to action arising from contract and have refrained from imposing this limitation with respect to cases falling within the terms of the fifth paragraph, but this should have no effect upon us in applying the law. Whether there be a good reason for it or not the distinction exists. Had the phrase express or implied not been used to qualify contract, there would be no doubt whatever with regard to the meaning of the word. In the Spanish Civil law contract are always consensual, and it would be impossible to define as a contract the judicial relation existing between a person who has lost money at gaming and the winner of such money, simple because the law imposes upon the winner the obligation of making restitution. An obligation of this kind, far from

being consensual in its origin, arises against the will of the debtor. To call such a relation a contract is, from the standpoint of the civil law, a contradiction in terms. But is said that as the phase express or implied has been used to qualify the word contract and these words are found in statue which speaks the language of the common law, this implies the introduction into our law of the concept of the implied contract of the English common-law, a concept which embraces a certain class of obligation originating ex lege, which have been arbitrarily classified as contracts, so that they might be enforced by one of the formal actions of the common law which legal tradition and practice has reserved for the enforcement of contract. I cannot concur in this reasoning. I believe that when a technical juridical term of substantive law is used in the adjective law of these islands, we should seek its meaning in our own substantive law rather than in the law of America or of England. The code of Civil Procedure was not enacted to establish rules of substantive law, but upon the assumption of the existence of these rules. In the case of Cayce vs. Curtis (Dallam's Decisions Texas Reports, 403), it appears that the legislature, at a time when that State still retained to a large extent the Spanish substantive civil law, enacted a statue in which the word bonds is used. In litigation involving the construction of that statute, one of the parties contended that the work bond should be given the technical meaning which it had in the English Common Law. The court rejected this contention saying On the first point it is urged by counsel for the appellant that the word bond used in the statute being a common law term, we must refer to the common law for its legal signification; and that by that law no instrument is a bond which is not under seal. The truth of the proposition that sealing is an absolute requisite to the validity of a bond at common law is readily admitted; but the applicability of that rule of the case under consideration is not perceived. This bond was taken at a time when the common law afforded no rule of decision or practice in this country, and consequently that law cannot be legitimately resorted to, even for the purpose for which it is invoked by the counsel for the appellant, unless it be shown that the civil law had not term of similar import for we regard it as a correct rule of construction, that where technical terms are used in a statute they are to be referred for their signification to terms f similar import in the system of laws which prevails in the country where the statues is passed, and not to another system which is entirely foreign t the whole system of municipal regulations by which that country is governed. (Martin's Reports, vol. 3, 185; 7 Martin [N. S.], 162.)" Consequently, I believe that in the interpretation of phase "contract, express or implied," we should apply the rules of our own substantive law. The phrase in itself offers no difficulty. The concept of the contract, under the Civil Code, as a legal relation of exclusively consensual origin, offers no difficulty. Nor is any difficulty encountered in the gramatical sense of the words express and "implied". Express according to the New International Dictionary is that which is directly and distinctly stated; expressed, not merely implied or left to interference. Therefore, a contract entered into by means of letters, in which the offer and the acceptance have been manifested by appropriate words, would be an "express contract." The word "imply" according to the same dictionary, is to involve in substance or essence, or by fair inference, or by construction of law, when not expressly stated in words or signs; to contain by implication to include virtually. Therefore, if I enter a tailor shop and order a suit of clothes, although nothing is said regarding payment, it is an inference, both logical and legal, from my act that is my intention to pay the reasonable value of the garments. The contract is implied, therefore, is that in which the consent of the parties is implied. Manresa, commenting upon article 1262 of the Civil Code, says:

The essence of consent is the agreement of the parties concerning that which is to constitute the contract . . . . The forms of this agreement may vary according to whether it is expressed verbally or in writing, by words or by acts. Leaving the other differences for consideration hereafter, we will only refer now to those which exist between express consent and implied consent . . . . It is unquestionable that implied consentmanifested by act or conduct, produces a contract. . . . If it were necessary to have recourse to the English common law for the purpose of ascertaining the meaning of the phrase under consideration, we could find many decisions which gave it the same meaning as that for which I contend. An implied contract is where one party receives benefits from another party, under such circumstances that the law presume a promise on the part of the party benefited to pay a reasonable price for the same. (Jones vs. Tucker [Del.], 84 Atlantic, 1012.) It is true that English courts have extended the concept of the term contract to include certain obligations arisingex lege without consent, express or implied. True contracts created by implied consent are designated in the English common law as contracts implied in the fact, while the socalled contracts in which the consent is a fiction of law are called contracts implied by law. But is evident that the latter are not real contracts. They have been called contract arbitrarily by the courts of England, and those of the Untied States in which the English common law is in force, in order that certain actions arising ex lege may be enforced by the action of assumpsit. In the rigid formulism of the English common law the substantive right had to be accommodated to the form of action. As is stated in the monograph on the action of assumpsit in Ruling Case Law. (volume 2, 743) In theory it wan action to recover for the nonperformance f simple contracts, and the formula and proceedings were constructed and carried on accordingly. . . . From the reign of Elizabeth this action has been extended to almost every case where an obligation arises from natural reason, . . . and it is now maintained in many cases which its principles do not comprehend and where fictions and intendments are resorted to, to fit the actual cause of action to the theory of the remedy. It is thus sanctioned where there has been no . . . real contract, but where some duty is deemed sufficient to justify the court in imputing the promise to perform its, and hence in bending the transaction to the form of action. In the ancient English common law procedure the form of the action was regarded as being much more important than the substantive right to be enforced. If no form of action was found in which the facts would fit, so much the worse for the facts! to avoid the injustices to which this condition of affairs gave rise, the judges invented those fictions which permitted them to preserve the appearance of conservatism and change the law without expressly admitting that they were doing so. The indispensable averment, that they were doing so. The indispensable avernment without which the action of assumpsit would not lie, was that the defendant promised to pay plaintiff the amount demanded. (Sector vs. Holmes, 17 Vs., 566.) In true contracts, whether express or implied, this promise in fact exists. In obligations arising ex lege there is no such promise, and therefore the action of assumpsit could not be maintained, and therefore the action of assumpsit could not be maintained, although by reason of its relative simplicity it was one of the most favored forms of action. In order to permit the litigant to make use of this form of action for the enforcement of ascertain classes of obligations arising ex lege, the judges invented the fiction of the promise of the defendant to pay the amount of the obligation, and as this fictitious promise give the appearance of consensuality to the legal relations of the parties, the name of implied contract is given to that class of extra-contractual obligations enforcible by the action of assumpsit.

Now, it is not be supposed that it was the intention of the Legislature in making use in the first paragraph of article 412 of the phrase contract, express or implied to corrupt the logical simplicity of our concept of obligations by importing into our law the antiquated fictions of the mediaeval English common law. If one of the concepts of the term "implied contract" in the English common law, namely, that in which consent is presume from the conduct of the debtor, harmonizes with the concept of the contract in our law, why should we reject that meaning and hold that the Legislature intended to use this phrase in the foreign and illogical sense of a contract arising without consent? This is a civil law country. why should we be compelled to study the fictions of the ancient English common law, in order to be informed as to the meaning of the word contract in the law of the Philippine Islands? Much more reasonable to my mind was the conclusion of the Texas court, under similar circumstances, to the effect to be referred for their signification to terms of similar import in the system of laws which prevails in the country where the statue is passed." (Cayce vs. Curtis, supra.) My conclusion is that the phase contract, express or implied should be interpreted in the grammatical sense of the words and limited to true contracts, consensual obligations arising from consent, whether expressed in words, writing or signs, or presumed from conduct. As it is evident that the defendant in the present case never promised, him in the gambling game in question, his obligation to restor the amounts won, imposed by the law, is no contractual, but purely extra-contractual and therefore the action brought not being one arising upon contract express or implied, the plaintiff is not entitled to a preliminary attachment upon the averment that the defendant is about to depart from the Philippine Islands with with intent t defraud his creditors, no averment being made in the compliant or in the affidavit that the defendant has removed or disposed of his property, or is about to depart with intent to defraud his creditors, so as to bring the case within the terms of the fifth paragraph of section 412. I am unable to agree with the contention of the application (Brief, p. 39) here that the phase in question should be interpreted in such a way as to include all obligations, whether arising from consent or ex lege, because that is equivalent to eliminating all distinction between the first and the fifth paragraphs by practically striking out the first two lines of paragraph one. The Legislature has deliberately established this distinction, and while we may be unable to see any reason why it should have been made, it is our duty to apply and interpret the law, and we are not authorized under the guise of interpretation to virtually repeal part of the statute. Nor can it be said that the relations between the parties litigant constitute a quasi-contract. In the first place, quasi- contracts are "lawful and purely voluntary acts by which the authors thereof become obligated in favor of a third person. . . ." The act which gave rise to the obligation ex lege relied upon by the plaintiff in the court below is illicit an unlawful gambling game. In the second place, the first paragraph of section 412 of the Code of Civil Procedure does not authorize an attachment in actions arising out of quasi contracts, but only in actions arising out of contract, express or implied. I am therefore of the opinion that the court below was without jurisdiction to issue that writ of attachment and that the writ should be declared null and void.

Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. 43861 September 26, 1938

THE MANILA TRADING AND SUPPLY COMPANY, plaintiff-appellee, vs. TOMAS SANTOS and GENARO D. SAEZ, defendants-appellants. Dionisio C. Mayor and Mariano P. Duldulao for appellants. Ross, Lawrence and Selph and E. D. Arevalo for appellee. IMPERIAL, J.: On October 3, 1933, the plaintiff sold to the defendants a "Ford Truck chassis, Model BB, 157-WB, L. S. Dual Wheels standard equipment." For the unpaid balance of the price amounting to P2,200, the defendants executed twenty promissory notes, the first three for P150 each and the others for P100 each, payable successively on the 16th of every month beginning November 16, 1933. The defendants also bound themselves to pay interest at 12 per cent per annum. To secure these promissory notes, the defendants mortgaged to the plaintiff the "Ford Truck chassis" and accordingly executed on the same date the corresponding instrument which was acknowledged before a notary public on the 9th of the same month and later registered in the office of the registrar of deeds. As the defendants failed to pay any of the promissory notes, the plaintiff attached the chattel mortgaged, which was sold by the sheriff at public auction on February 24, 1934, in accordance with Act No. 1508, for the sum of P700 in favor of said plaintiff who was the highest bidder. The plaintiff credited the defendants with said amount, as a result of which the latter still owed P1,897.55. The plain-tiff instituted the present action for the purpose of collecting this balance with its interest. In their answer the defendants set up the special defense that plaintiff's action cannot prosper because it is contrary to Act No. 4122. The case was submitted under the following stipulation: Come now the parties in the above-entitled case, by their respective attorneys, and to this honorable court respectfully submit this case for decision in conformity with the pleadings, for the reason that the only issue raised therein is the applicability of Act No. 4122 of the Philippine Legislature; and the parties accordingly agree: 1. That the mortgage instrument was executed on October 3, 1933. 2. That the mortgaged property was sold at public auction on February 24, 1934, by reason of the failure to pay some installments. 3. That the complaint was filed on August 31, 1934. 4. That the defendants admit that they were required to pay the sum of P1,897.55 on May 23, 1934, or after the public sale of the mortgaged property which took place while Act No. 4122 was already effective. Wherefore, it is respectfully prayed that this case be considered submitted for decision of this honorable court.

The defendants appealed from the decision of the court sentencing them to pay the plaintiff the sum of P1,897.55, with interest at 12 per cent per annum from February 24, 1934, and the costs. 1. Under their first assignment of error the defendants contend that the court erred in not applying to this case the provisions of Act No. 4122 which took effect on December 9, 1933. In the part pertinent hereto, this law provides that the vendor who has chosen to foreclose the mortgage shall have no further action against the purchaser for the recovery of any unpaid balance owing by the same, any agreement to the contrary being null and void. The prohibition undoubtedly refers to the deficiency judgment spoken of in section 260 of the Code of Civil Procedure which is applicable to real estate mortgages. The court held that Act No. 4122 has no application, because otherwise it would be given retroactive effect. The defendants insist that the aforesaid law should govern, because it was already in full force and effect when the present action was brought. We are of the opinion that this pretension is unfounded. It is a legal principle embodied in article 3 of the Civil Code that laws have no retroactive effect unless it is otherwise provided therein. It is conceded that there is nothing in Act No. 4122 which states that its provisions have retroactive effect. In criminal law the principle of irretroactivity equally applies, except when the penal provisions are favorable to the accused (article 22, Revised Penal Code). As a corollary principle, rights and obligations are governed by the law by which they are created (article 1090, Civil Code). Rights and obligations arising from contracts have the force of law between the contracting parties and are governed by their stipulations (article 1091, Civil Code), and consensual agreements are binding provided they are not contrary to law, morals or public order (article 1255, Civil Code). In accordance with the rule of irretroactivity, Act No. 4122 is not applicable to this case, for the reason that the mortgage which gave rise to the plaintiff's rights was executed on October 3, 1933 and the aforesaid Act took effect only on December 9, 1933. The contention that said Act must be applied because the present action was instituted when it was already effective, cannot be sustained. The action is the correlative of a right and is nothing more than a remedy conceded by law to protect that right. If the plaintiff was entitled to a deficiency judgment under Act No. 1508, this right already existed when Act No. 4122 was approved and cannot be affected by the prohibition contained in the latter Act. As to whether the plaintiff had a right to a deficiency judgment in conformity with the Chattel Mortgage Law, Act No. 1508, we have already so held in the cases of Bank of the Philippine Islands vs. Olutanga Lumber Co. (47 Phil., 20), and Manila Trading and Supply Co. vs. Tamaraw Plantation Co. (47 Phil., 513). In the latter case it was said: "Under these two cases, the appellant argues: "It is, therefore, beyond doubt that a chattel mortgage executed in accordance with Act No. 1508 is aconditional sale, or sale of the chattels with right of repurchase. "A chattel mortgage under Act No. 1508 is a sale with right of repurchase, almost identical to that with similar name of the Civil Code; it was so held by this Honorable Court in Meyers vs. Thein (15 Phil., 303), and incidentally it was said in Rosales vs. Reyes and Ordoveza (25 Phil., 495) that ". . . a chattel mortgage, is in many respects similar to a sale under pacto de retro. . . . It is, therefore, clear that a chattel mortgage partakes of the character of the sale with right of repurchase of the Civil Code, and that it is not a mortgage within the meaning of said Code. What then is a contract of sale with right of repurchase? According to this Honorable Court, interpreting articles 1507 and 1518 of the Civil Code "Conventional redemption is the right which the vendor reserves to himself to recover the thing sold, with the obligation to reimburse to the vendee the price of the sale, the expenses of the

contract, and any other legitimate payment made by reason of the sale, and the useful and necessary expenses incurred for account of the thing sold." (Lichauco vs. Berenguer, 20 Phil., 12.) "What would be the effect of a contract of sale with right of repurchase, if the vendor does not comply with the condition subsequent? Article 1509 of the Civil Code says that "the vendee shall acquire irrevocably the owner-ship of the thing sold," and no more. There is no law whatever providing that, if the value of the thing sold is not sufficient to cover the debt owing from the vendor to the purchaser, that is to say, the purchase price, the purchaser shall have an action against the vendor to recover the difference. Nor is there any such provision in Act No. 1508, the Chattel Mortgage Law. All said Act No. 1508 provides on this point is what appears in section 14 thereof. "A reading of said section 14 of Act No. 1508 will show that there does not exist any such right to maintain an action for the difference between the price obtained in a sale at public auction and that which must really be paid." In answer to this argument, it must be noted in the first place that in Meyers vs. Thein, supra, it is not said that a chattel mortgage is in effect the same as a contract of sale with right of repurchase, but is a sale with right of repurchase almost identical to that of the Civil Code having said denomination. And in Bachrach vs. Mantel, supra, the court holds that the mortgagee in a chattel mortgage is the legal, and the mortgagor the equitable, owner. Secondly, what is held in those two cases is that a chattel mortgage is a conditional sale as security for the payment of the debt, according to section 3 of Act No. 1508. If the thing pledged is sold, it is for the purpose of securing the payment of the debt; so that if the price of the sale is insufficient to cover the debt, the debtor is not thereby relieved from the payment of the balance, just as the creditor cannot retain the surplus in case the price of the sale should exceed the debt secured. In the case of Bachrach Motor Co. vs. Summers (42 Phil., 3), we said that: "The definition of the chattel mortgage found in section 3 of the Chattel Mortgage Law (Act No. 1508) is a description of the form in which the contract used to be commonly drafted in common-law countries rather than a statement of its legal effects; and while it is true that the contract has been customarily written in the form of an out and out sale, conditioned to be void upon performance of some condition subsequent as for instance, the payment of the secured debt, nevertheless the equitable conception of the mortgage, now generally dominant, treats the mortgage merely as a security. There is no real analogy between the chattel mortgage contract and a conditional sale as understood in the civil law." Section 14 of Act No. 1508 provides, with regard to the application of the proceeds of the sale of the chattels mortgaged, as follows: . . . The proceeds of such sale shall be applied to the payment, first, of the costs and expenses of keeping and sale, and then to the payment of the demand or obligation secured by such mortgage, and the residue shall be paid to persons holding subsequent mortgages in their order, and the balance, after paying the mortgages, shall be paid to the mortgagor or person holding under him on demand. Which simply shows that the contention of the appellant is untenable. But where the same question now raised by the appellant was directly solved is in Bank of the Philippine Islands vs. Olutanga Lumber Co. (47 Phil., 20). In that case there was raised the question whether or not a creditor, holding a chattel mortgage as security for the

payment of the debt, may maintain an action for the recovery of the balance remaining unpaid after the foreclosure of the mortgage. This court decided this question in the affirmative. In the body of the decision the court said: "The theory of the court a quo evidently is, that a chattel mortgage is a conditional sale of the property, and, in case of a failure of the condition, to wit: to pay the debt, the sale becomes absolute and the creditor is obliged to resort to the mortgaged property for a payment of this debt, and the foreclosure of the mortgage is his sole recourse. "While it is true that section 3 of Act No. 1508 provides that "a chattel mortgage is a conditional sale," it further provides that it "is a conditional sale of personal property as security for the payment of a debt, or for the performance of some other obligation specified therein." The lower court overlooked the fact that the chattels included in the chattel mortgage are only given as a security and not as a payment of the debt, in case of a failure of payment. . . . "The theory of the lower court would lead to the absurd conclusion that if the chattels mentioned in the mortgage, given as security, should sell for more than the amount of the indebtedness secured, that the creditor would be entitled to the full amount for which it might be sold, even though that amount was greatly in excess of the indebtedness. Such a result certainly was not contemplated by the legislature when it adopted Act No. 1508. There seems to be no reason supporting that theory under the provision of the law. The value of chattels changes greatly from time to time, and sometimes very rapidly. If, for example, the chattels should greatly increase in value and a sale under that condition should result in largely overpaying the indebtedness, and if the creditor is not permitted to retain the excess, then the same token would require the debtor to pay the deficiency in case of a reduction in the price of the chattels between the date of the contract and a breach of the condition. "Mr. Justice Kent, in the 12th edition of his commentaries, as well as other authors on the question of chattel mortgages, have said, that "in case of a sale under a foreclosure of a chattel mortgage, there is no question that the mortgagee or creditor may maintain an action for the deficiency, if any should occur." And the fact that Act No. 1508 permits a private sale, such sale is not, in fact, a satisfaction of the debt, to any greater extent than the value of the property at the time of the sale. The amount received at the time of the sale, of course, always requiring good faith and honestly in the sale, is only a payment, pro tanto, and an action may be maintained for a deficiency in the debt." We hold, in conclusion, that the court did not err in declaring Act No. 4122 to be inapplicable and in ruling that the plaintiff is entitled to a deficiency judgment in accordance with Act No. 1508. 2. The defendants pretend under their second assignment of error that the court erred in sentencing them jointly and severally to pay the sum hereinbefore mentioned with interest and the costs. It is argued that the promissory notes signed by them are imaginary or fictitious because they did not receive any money, and said notes represent the unpaid balance of the price of the Ford Truck chassis. The argument is so unfounded that we would be justified to disregard this assignment of error. However, it may be stated that said notes are not without consideration and that, as they are onerous contracts, their consideration is the undertaking or promise assumed by the defendants to pay their value (article 1274, Civil Code). As regards the amounts of the notes, there is no doubt that

they are true and correct since their total represents the unpaid balance of the price of the chassis sold to the defendants. 3. The last assignment of error refers to the denial of the motion for new trial filed by the defendants pro forma for purposes of their appeal. We hold, for the reasons already set forth in connection with the other assignments of error, that the court properly denied the motion for new trial. The appealed judgment, being in accordance with law, is affirmed with costs against the defendantsappellants. So ordered.