Add TAGS to your cases to easily locate them or to build your SYLLABUS.
Please SIGN IN to use this feature.
Highlight text as FACTS, ISSUES, RULING, PRINCIPLES to generate case DIGESTS and REVIEWERS.
Please LOGIN use this feature.
Show printable version with highlights
23 Phil. 76

[ G.R. No. 7313, August 29, 1912 ]




A partnership composed of Isidoro Aragon, Lucio Cuneta Cruz and  Modesto  de la Cruz, owned a cockpit which  it rented to  the defendant  company.   On the 14th of December,  1908, Lucio Cuneta Cruz sold his interest in the partnership  (two-fifths  share)  to  the plaintiff, reserving the right to  repurchase under certain conditions.  Plaintiff claims that  the vendor  having failed to exercise his  right to repurchase,  the  sale  became  absolute on  the 15th day  of February , 1909, and that since that date he has been the sole owner of this two-fifths interest in the partnership.  It appears also that plaintiff purchased the interest of Isidoro Aragon in the partnership (also a two-fifths share), on the 21st of May, 1910, and that Modesto de la Cruz, one of the defendants  in this action, continues  to  hold his original interest in the partnership (a one-fifth share).
Plaintiff  in this action seeks  (1)  to, recover  of the defendant company the  amount of the  monthly rental which he claims to be due him as the owner of Lucio Cuneta Cruz' interest since the 15th day of February,  1909; and  (2)  to terminate the rental  contract,  on  the ground that  as the owner  of a four-fifths share in the renting partnership he is entitled to exercise the right of control therein.
We think that the  evidence  of  record fully  establishes the claim of the plaintiff as to his  purchase of the interest of Lucio Cuneta Cruz  in the partnership which entered into the rental contract with  the defendant company;  and also that under the terms of that contract the defendant company obligated itself to pay  to the owner of that interest the sum of P280 per  month so long as  the contract continued  in force; that the  contract continued in  force up to  the  date of the entry of  judgment in the court below; and  that the plaintiff became the  absolute  owner  of  Cuneta Cruz' interest on February 15, 1909.

The  trial judge  recognized the right of the plaintiff  to recover this monthly  rental from  the defendant company from the date of the judgment entered by him, but declined to give judgment for the monthly rental from the date when the purchase of Cuneta Cruz' interest was perfected (February 15, 1909)  to the date of the judgment.  This on the ground that during that period Cuneta Cruz was contesting plaintiff's claim that he had purchased this interest in the jpartnership.  The trial  judge appears  to have  been  of opinion that since there had been no formal adjudication of plaintiff's ownership of Cuneta Cruz' interest prior to the pate of the judgment, the defendant company was not obligated to pay the plaintiff the monthly rental corresponding to that interest pending the adjudication of this question, since, as he held, to have done so might have exposed it to the risk of having the contract terminated "by Cuneta Cruz for failure to pay to him the stipulated rental, in the event that it should  later be judicially determined that  Cuneta Cruz and not the plaintiff was the true owner, and that the purchase had not been consummated on the 15th of February, 1909, as claimed by the plaintiff.
  In this we  hold that the trial judge erred.  The defendant company had due and sufficient notice of the sale at the time when the plaintiff perfected his purchase of Cuneta Cruz' interest.  Demand was formally and promptly made upon it for the payment of the rent to which  plaintiff  was thereafter entitled.   Under  its contract  it  was the  defendant company's duty to pay the stipulated rent  to the owner of the interest originally held by Cuneta.  If with  due notice of the purchase of this interest by plaintiff, it paid any other person than  the true owner, such payment in no wise relieved  it of its  obligations under the contract to pay the true owner.  It must fulfill and comply with the terms of its contract, and the plaintiff is entitled  to recover the stipulated  rent from the 15th day of February, 1909,  and  so long as the rental contract between the partnership and the defendant company  remains in force.  Judgment for  the rent in question from  the  15th day  of  February, 1909,  to the date of the judgment should have been rendered in favor of the plaintiff, together  with interest  at  the rate of six per centum per  annum upon the amount of the rent for each month from the date when it fell due to the date of payment.
We do not recognize the  force of the  contention  that merely because the right of ownership was in dispute the defendant company lawfully refused  to pay the rent to the plaintiff, on the ground that it could not be required to take the rink of paying the wrong person  and suffering the consequences.  Section  120  of the Code  of  Civil  Procedure provides for  just such  a case.  If the defendant company had any sufficient ground to be in doubt as  to which of the claimants was entitled  to the rent, it could have protected thus leaving the determination of the doubt to the courts.  The defendant company not having exercised this right, it voluntarily assumed the risk of payment to the wrong person, and of course payment to the wrong person under such circumstances  (even if it  were actually made,  which does £»ot affirmatively appear from the record in the case), would not relieve it of liability to the person lawfully entitled to receive payment under the rental contract.
We agree with the trial court that the plaintiff's prayer that the rental contract with the defendant company be terminated can not be granted in this action.   We, however, place our denial of this prayer on a different ground from that assigned in the court below.  Plaintiff appears to rest his demand for the termination of the contract on the ground that as the owner of two of the  three interests which originally constituted the partnership (a "sociedad colectiva" as defined in article 2 of title 1 of the Code of Commerce) that entered into the rental contract with the defendant company, these two interests constituting a four-fifths share in that partnership, he is entitled to control the operations of the partnership.  But  without discussing or deciding that question, we  hold that even if it be admitted that plaintiff's purchase of two of the three original interests representing a four-fifths share in the partnership gave him the right to  control the operations  of the partnership, subject; of course, to the Code provisions in such cases, it does not necessarily follow that he can arbitrarily repudiate the rental contract entered into by the partnership before he purchased the majority interest therein.
The  right  to terminate the contractual relations  between the parties, and the conditions upon which one  or  other of the contracting parties may exercise this right necessarily depends on the contract itself.  It does not definitely appear from  the record whether the contract was or was not reduced to writing; and while there does not seem to have been any question in the court below as to some of its terms, the contract itself is not before us.  It is alleged that it contained a stipulation that the contract was to continue in force so long as the defendant company continued in existence.   Of course,  if the contract was not in writing, this condition  could  not be  enforced; but if  the  contract was executed in due form,  and as such  is enforceable in the courts, and if this  was the only condition touching its duration contained therein, it would appear that the relation of landlord and tenant could not be terminated at the will of one of the parties so long at least as the other party lived up to its obligations, and the defendant company continued in existence.   We reserve our opinion, however, on the question as  to the  precise  conditions under which such a contract might be terminated, it  not being necessary to go into that question in the absence of the contract itself.
Plaintiff having failed to establish satisfactorily the terms and conditions of  the rental contract, it  is impossible for us to determine the conditions, if any,  upon which he, acting for the partnership, may exercise his alleged right to terminate it; or to hold that under the contract, the society or partnership in which plaintiff holds  a controlling  interest has a right to have the contract rescinded.   So far therefore as the judgment of the  court below denies the right of the plaintiff to have  the rental contract in question terminated in this action it should be affirmed, reserving to the plaintiff, however, the right to institute a new action or to take such steps as he may deem proper, hereafter, with a view to the exercise of any right he may have, under the contract,  to rescind or  terminate the same.
Ten  days hereafter let judgment be entered  reversing the judgment of the court below without costs  in this instance, and twenty days thereafter let the record be returned to the court wherein it  originated, which will enter final judgment,  in accordance  with the  principles herein laid down.  So ordered.

Arellano, C.  J., Torres,  Mapa, Johnson,  and Trent, JJ. concur.