G.R. No. L-13602 April 6, 1918 or implied.

The contention of the petitioner is that the statutory action

LEUNG BEN, plaintiff, to recover money lost at gaming is that the statutory action to recover
vs. money lost at gaming is no such an action as is contemplated in this
P. J. O'BRIEN, JAMES A OSTRAND and GEO. R. HARVEY, judges provision, and he therefore insists that the original complaint shows on
of First Instance of city of Manila, defendants. its face that the remedy of attachment is not available in aid thereof;
Thos. D. Aitken and W. A. Armstrong for plaintiff.
Kincaid & Perkins for that the Court of First Instance acted in excess of its jurisdiction in
defendants. granting the writ of attachment; that the petitioner has no plain,
STREET, J.: speedy, and adequate remedy by appeal or otherwise; and that
This is an application for a writ of certiorari, the purpose of which is to consequently the writ of certiorari supplies the appropriate remedy for
quash an attachment issued from the Court of First Instance of the City his relief.
of Manila under circumstances hereinbelow stated. The case presents the two following questions of law, either of which,
Upon December 12, 1917, an action was instituted in the Court of First if decided unfavorably to the petitioner, will be fatal to his application:
Instance of the city of Manila by P. J. O'Brien to recover of Leung Ben (1) Supposing that the Court of First Instance has granted an
the sum of P15,000 alleged to have been lost by the plaintiff to the attachment for which there is no statutory authority, can this court
defendant in a series of gambling, banking and percentage games entertain the present petition and grant the desired relief?
conducted ruing the two or three months prior to the institution of the (2) Is the statutory obligation to restore money won at gaming an
suit. In his verified complaint the plaintiff asked for an attachment, obligation arising from "contract, express or implied?"
under section 424, and 412 (1) of the Code of Civil Procedure, against We are of the opinion that the answer to the first question should be in
the property of the defendant, on the ground that the latter was about the affirmative. Under section 514 of the Code of Civil Procedure the
to depart from the Philippine islands with intent to defraud his Supreme Court has original jurisdiction by the writ of certiorari over the
creditors. This attachment was issued; and acting under the authority proceedings of Courts of First Instance, wherever said courts have
thereof, the sheriff attached the sum of P15,000 which had been exceeded their jurisdiction and there is no plaint, speedy, and
deposited by the defendant with the International Banking adequate remedy. In the same section, it is further declared that the
Corporation. proceedings in the Supreme Court in such cases hall be as prescribed
The defendant thereupon appeared by his attorney and moved the for Courts of First Instance in section 217-221, inclusive, of said Code.
court to quash the attachment. Said motion having dismissed in the This Supreme Court, so far as applicable, the provisions contained in
Court of First Instance, the petitioner, Leung Ben, the defendant in that those section to the same extent as if they had been reproduced
action, presented to this court, upon January 8, 1918 his petition for verbatim immediately after section 514. Turning to section 217, we find
the writ of certiorari directed against P. J. O'Brien and the judges of that, in defining the conditions under which certiorari can be
the Court of First Instance of the city of Manila whose names are maintained in a Court of First Instance substantially the same language
mentioned in the caption hereof. The prayer is that the Honorable is used as is the same remedy can be maintained in the Supreme Court
James A. Ostrand, as the judge having cognizance of the action in said of First Instance, substantially the same language is used as is found
court be required to certify the record to this court for review and that in section 514 relative to the conditions under which the same remedy
the order of attachment which had been issued should be revoked and can be maintained in the Supreme Court, namely, when the inferior
discharged. with costs. Upon the filing of said petition in this court the tribunal has exceeded its jurisdiction and there is no appeal, nor any
usual order was entered requiring the defendants to show cause why plain, speedy and adequate remedy. In using these expressions the
the writ should not issue. The response of the defendants, in the nature author of the Code of Civil Procedure merely adopted the language
of a demurrer, was filed upon January 21, 1918; and the matter is now which, in American jurisdictions at least, had long ago reached the
heard upon the pleadings thus presented. stage of stereotyped formula.
The provision of law under which this attachment was issued requires In section 220 of the same Code, we have a provision relative to the
that there should be accuse of action arising upon contract, express final proceedings in certiorari, and herein it is stated that the court shall
determine whether the inferior tribunal has regularly pursued its the action and a ground of attachment based on the acts or the
authority it shall give judgment either affirming annulling, or modifying conditions of the defendant. Every complaint must show a cause of
the proceedings below, as the law requires. The expression, has not action some sort; and when the statue declares that the attachment
regularly pursued its authority as here used, is suggestive, and we may issue in an action arising upon contract, the express or implied, it
think it should be construed in connection with the other expressions announces a criterion which may be determined from an inspection of
have exceeded their jurisdiction, as used in section 514, and has the language of the complaint. The determination of this question is
exceeded their jurisdiction as used in section 217. Taking the three purely a matter of law. On the other hand, when the stature declares
together, it results in our opinion that any irregular exercise of juridical that an attachment may be issued when the defendant is about to
power by a Court of First Instance, in excess of its lawful jurisdiction, depart from the Islands, a criterion is announced which is wholly
is remediable by the writ of certiorari, provided there is no other plain, foreign to the cause of action; and the determination of it may involve
speedy, and adequate remedy; and in order to make out a case for the a disputed question of fact which must be decided by the court. In
granting of the writ it is not necessary that the court should have acted making this determination, the court obviously acts within its powers;
in the matter without any jurisdiction whatever. Indeed the repeated and it would be idle to suppose that the writ of certiorari would be
use of expression excess of jurisdiction shows that the lawmaker available to reverse the action of a Court of First Instance in
contemplated the situation where a court, having jurisdiction should determining the sufficiency of the proof on such a disputed point, and
irregularly transcend its authority as well as the situation where the in granting or refusing the attachment accordingly.
court is totally devoid of lawful power. We should not be understood, in anything that has been said, as
It may be observed in this connection that the word jurisdiction as used intending to infringe the doctrine enunciated by this court in Herrera
in attachment cases, has reference not only to the authority of the court vs. Barretto and Joaquin (25 Phil. Rep., 245), when properly applied. It
to entertain the principal action but also to its authority to issue the was there held that we would not, upon application for a writ of
attachment, as dependent upon the existence of the statutory ground. certiorari, dissolve an interlocutory mandatory injunction that had been
(6 C. J., 89.) This distinction between jurisdiction to issue the issued in a Court of First Instance as an incident in an action of
attachment as an ancillary remedy incident to the principal litigation is mandamus. The issuance of an interlocutory injunction depends upon
of importance; as a court's jurisdiction over the main action may be conditions essentially different from those involved in the issuance of
complete, and yet it may lack authority to grant an attachment as an attachment. The injunction is designed primarily for the prevention
ancillary to such action. This distinction between jurisdiction over the of irreparable injury and the use of the remedy is in a great measure
ancillary has been recognized by this court in connection with actions dependent upon the exercise of discretion. Generally, it may be said
involving the appointment of a receiver. Thus in Rocha & Co. vs. that the exercise of the injunctive powers is inherent in judicial
Crossfield and Figueras (6 Phil. Rep., 355), a receiver had been authority; and ordinarily it would be impossible to distinguish between
appointed without legal justification. It was held that the order making the jurisdiction of the court in the main litigation and its jurisdiction to
the appointment was beyond the jurisdiction of the court; and though grant an interlocutory injunction, for the latter is involved in the former.
the court admittedly had jurisdiction of the main cause, the order was That the writ of certiorari can not be used to reverse an order denying
vacated by this court upon application a writ of certiorari. (See Blanco a motion for a preliminary injunction is of course not to cavil. (Somes
vs. Ambler, 3 Phil. Rep., 358, Blanco vs. Ambler and McMicking 3 Phil. vs. Crossfield and Molina, 8 Phil. Rep., 284.)
Rep., 735, Yangco vs. Rohde, 1 Phil. Rep., 404.) But it will be said that the writ of certiorari is not available in this cae,
By parity of reasoning it must follow that when a court issues a writ of because the petitioner is protected by the attachment bond, and that
attachment for which there is no statutory authority, it is acting he has a plain, speedy, and adequate remedy appeal. This suggestion
irregularly and in excess of its jurisdiction, in the sense necessary to seems to be sufficiently answered in the case of Rocha & Co vs.
justify the Supreme Court in granting relief by the writ of certiorari. In Crossfield and Figueras (6 Phil. Rep., 355), already referred to, and the
applying this proposition it is of course necessary to take account of earlier case there cited. The remedy by appeal is not sufficiently
the difference between a ground of attachment based on the nature of speedy to meet the exigencies of the case. An attachment is extremely
violent, and its abuse may often result in infliction of damage which of the English expression.
could never be repaired by any pecuniary award at the final hearing. The English contract law, so far as relates to simple contracts is
To postpone the granting of the writ in such a case until the final planted upon two foundations, which are supplied by two very different
hearing and to compel the petitioner to bring the case here upon conceptions of legal liability. These two conceptions are revealed in
appeal merely in order to correct the action of the trial court in the the ideas respectively underlying (1) the common- law debt and (2) the
matter of allowing the attachment would seem both unjust and assumptual promise. In the early and formative stages of the common-
unnecessary. law the only simple contract of which the courts took account was the
Passing to the problem propounded in the second question it may be real contract or contract re, in which the contractual duty imposed by
observed that, upon general principles,. recognize both the civil and law arises upon the delivery of a chattle, as in the mutuum,
common law, money lost in gaming and voluntarily paid by the loser to commodatum, depositum, and the like; and the purely consensual
the winner can not in the absence of statue, be recovered in a civil agreements of the Roman Law found no congenial place in the early
action. But Act No. 1757 of the Philippine Commission, which defines common law system.
and penalizes several forms of gambling, contains numerous In course of time the idea underlying the contract re was extended so
provisions recognizing the right to recover money lost in gambling or as to include from one person to another under such circumstances
in the playing of certain games (secs. 6, 7, 8, 9, 11). The original as to constitute a justa cuas debendi. The obligation thereby created
complaint in the action in the Court of First Instance is not clear as to was a debt. The constitutive element in this litigation is found in the
the particular section of Act No. 1757 under which the action is fact that the debtor has received something from the creditor, which
brought, but it is alleged that the money was lost at gambling, banking, he is bound by the obligation of law to return or pay for. From an early
and percentage game in which the defendant was banker. It must day this element was denominated the quid pro quo, an ungainly
therefore be assumed that the action is based upon the right of phrase coined by Mediaeval Latinity. The quid pro quo was primarily a
recovery given in Section 7 of said Act, which declares that an action materials or physical object, and its constituted the recompense or
may be brought against the banker by any person losing money at a equivalent acquired by the debtor. Upon the passage of the quid pro
banking or percentage game. quo from one party to the other, the law imposed that real contractual
Is this a cause arising upon contract, express or implied, as this term duty peculiar to the debt. No one conversant with the early history of
is used in section 412 of the Code of Civil Procedure? To begin the English law would ever conceive of the debt as an obligation created
discussion, the English version of the Code of Civil Procedure is by promise. It is the legal duty to pay or deliver a sum certain of money
controlling (sec. 15, Admin. Code, ed. of 1917). Furthermore it is or an ascertainable quantity of ponderable or measurable chattles.
universally admitted to be proper in the interpretation of any statute, to The ordinary debt, as already stated, originates in a contract in which
consider its historical antecedents and its juris prudential sources. The a quid pro quo passes to the debtor at the time of the creation of the
Code of Civil Procedure, as is well known, is an American contribution debt, but the term is equally applicable to duties imposed by custom
to Philippine legislation. It therefore speaks the language of the or statute, or by judgment of a court.
common-law and for the most part reflects its ideas. When the The existence of a debt supposes one person to have possession of
draftsman of this Code used the expression contract, express or thing (res) which he owes and hence ought to turn over the owner. This
implied, he used a phrase that has been long current among writers on obligation is the oldest conception of contract with which the common
American and English law; and it is therefore appropriate to resort to law is familiar; and notwithstanding the centuries that have rolled over
that system of law to discover the appropriate to resort to that system Westminster Hall that conception remains as one of the fundamental
of law to discover the meaning which the legislator intended to convey bases of the common-law contract.
by those meaning which the legislator intended to convey by those Near the end of the fifteenth century there was evolved in England a
terms. We remark in passing that the expression contrato tracito, used new conception of contractual liability, which embodied the idea of
in the official translation of the Code of Civil Procedure as the Spanish obligation resulting from promise and which found expression in the
equivalent of implied contract, does not appear to render the full sense common law assumpsit, or parol promise supported by a
consideration. The application of this novel conception had the effect There we are concerned with those acts which make one person
of greatly extending the filed of contractual liability and by this means debtor to another without there having intervened between them any
rights of action came to be recognized which had been unknown true agreement tending to produce a legal bond (vinculum juris). Of late
before. The action of assumpsit which was the instrument for giving years some American and English writers have adopted the term
effect to this obligation was found to be a useful remedy; and presently quasi-contract as descriptive of these obligations or some of them; but
this action came to be used for the enforcement of common-law debts. the expression more commonly used is implied contract.
The result was to give to our contract law the superficial appearance Upon examination of these obligations, from the view point of the
of being based more or less exclusively upon the notion of the common-law jurisprudence, it will be found that they fall readily into
obligation of promise. two divisions according as they bear an analogy to the common-law
An idea is widely entertained to the effect that all simple contracts debt or to the common law assumpsit. To exhibit the scope of these
recognized in the common-law system are referable to a singly different classes of obligations is here impracticable. It is only
category. They all have their roots, so many of us imagine, in one necessary in this connection to observe that the most conspicuous
general notion of obligation; and of course the obligation of promise is division is that which comprises duties in the nature of debt. The
supposed to supply this general notion, being considered a sort of characteristic feature of these obligations is that upon certain states of
menstruum in which all other forms of contractual obligation have been fact the law imposes an obligation to pay a sum certain of money; and
dissolved. This a mistake. The idea of contractual duty embodied in it is characteristic of this obligation that the money in respect to which
the debt which was the first conception of contract liability revealed in the duty is raised is conceived as being equivalent of something taken
the common law, has remained, although it was detained to be in a or detained under circumstances giving rise to the duty to return or
measure obscured by the more modern conception of obligation compensate therefore. The proposition that no one shall be allowed to
resulting from promise. enrich himself unduly at the expense of another embodies the general
What has been said is intended to exhibit the fact that the duty to pay principle here lying at the basis of obligation. The right to recover
or deliver a sum certain of money or an ascertainable quantity of money improperly paid (repeticion de lo indebido) is also recognized
ponderable or measurable chattles — which is indicated by them debt as belong to this class of duties.
— has ever been recognized, in the common-law system, as a true It will observed that according to the Civil Code obligations are
contract, regardless, of the source of the duty or the manner in which supposed to be derived either from (1) the law, (2) contracts and quasi-
it is create — whether derived from custom, statue or some contracts, (3) illicit acts and omission, or (4) acts in which some sort ob
consensual transaction depending upon the voluntary acts of the lame or negligence is present. This enumeration of sources of
parties. the form of contract known as the debt is of the most ancient obligations and the obligation imposed by law are different types. The
lineage; and when reference is had to historical antecedents, the right learned Italian jurist, Jorge Giorgi, criticises this assumption and says
of the debt to be classed as a contract cannot be questioned. Indeed that the classification embodied in the code is theoretically erroneous.
when the new form of engagement consisting of the parol promise His conclusion is that one or the other of these categories should have
supported by a consideration first appeared, it was looked upon as an been suppressed and merged in the other. (Giorgi, Teoria de las
upstart and its right to be considered a true contract was questioned. Obligaciones, Spanish ed., vol. 5 arts. 5, 7, 9.) The validity of this
It was long customary to refer to it exclusively as an assumpsit, criticism is, we thin, self-evident; and it is of interest to note that the
agreement, undertaking, or parol promise, in fact anything but a common law makes no distinction between the two sources of liability.
contract. Only in time did the new form of engagement attain the The obligations which in the Code are indicated as quasi-contracts, as
dignity of being classed among true contract. well as those arising ex lege, are in the common la system, merged
The term implied takers us into shadowy domain of those obligations into the category of obligations imposed by law, and all are
the theoretical classification of which has engaged the attention of denominated implied contracts.
scholars from the time of Gaius until our own day and has been a Many refinements, more or less illusory, have been attempted by
source of as much difficulty to the civilian as to the common-law jurist. various writers in distinguishing different sorts of implied contracts, as
for example, the contract implied as of fact and the contract implied In what has been said we have assumed that the obligation which is at
as of law. No explanation of these distinctions will be here attempted. the foundation of the original action in the court below is not a quasi-
Suffice it to say that the term contract, express or implied, is used to contract, when judge by the principles of the civil law. A few
by common-law jurists to include all purely personal obligations other observations will show that this assumption is not by any means free
than those which have their source in delict, or tort. As to these it may from doubt. The obligation in question certainly does not fall under the
be said that, generally speaking, the law does not impose a contractual definition of either of the two-quasi- contracts which are made the
duty upon a wrongdoer to compensate for injury done. It is true that in subject of special treatment in the Civil Code, for its does not arise
certain situations where a wrongdoer unjustly acquired something at from a licit act as contemplated in article 1895. The obligation is clearly
the expense of another, the law imposes on him a duty to surrender a creation of the positive law — a circumstance which brings it within
his unjust acquisitions, and the injured party may here elect to sue the purview of article 1090, in relation with article, 1089; and it is also
upon this contractual duty instead of suing upon the tort; but even here derived from an illicit act, namely, the playing of a prohibited game. It
the distinction between the two liabilities, in contract and in tort, is is thus seen that the provisions of the Civil Code which might be
never lost to sight; and it is always recognized that the liability arising consulted with a view to the correct theoretical classification of this
out of the tort is delictual and not of a contractual or quasi-contractual obligation are unsatisfactory and confusing.
nature. The two obligations treated in the chapter devoted to quasi-contracts
In the case now under consideration the duty of the defendant to in the Civil Code are (1) the obligation incident to the officious
refund the money which he won from the plaintiff at gaming is a duty management of the affairs of other person (gestion de negocios ajenos)
imposed by statute. It therefore arises ex lege. Furthermore, it is a duty and (2) the recovery of what has been improperly paid (cabro de lo
to return a certain sum which had passed from the plaintiff to the indebido). That the authors of the Civil Code selected these two
defendant. By all the criteria which the common law supplies, this a obligations for special treatment does not signify an intention to deny
duty in the nature of debt and is properly classified as an implied the possibility of the existence of other quasi-contractual obligations.
contract. It is well- settled by the English authorities that money lost in As is well said by the commentator Manresa.
gambling or by lottery, if recoverable at all, can be recovered by the The number of the quasi-contracts may be indefinite as may be the
loser in an action of indebitatus assumpsit for money had and received. number of lawful facts, the generations of the said obligations; but the
(Clarke vs. Johnson. Lofft, 759; Mason vs. Waite, 17 Mass., 560; Code, just as we shall see further on, in the impracticableness of
Burnham vs. Fisher, 25 Vt., 514.) This means that in the common law enumerating or including them all in a methodical and orderly
the duty to return money won in this way is an implied contract, or classification, has concerned itself with two only — namely, the
quasi-contract. management of the affairs of other person and the recovery of things
It is no argument to say in reply to this that the obligation here improperly paid — without attempting by this to exclude the others.
recognized is called an implied contract merely because the remedy (Manresa, 2d ed., vol. 12, p. 549.)
commonly used in suing upon ordinary contract can be here used, or It would indeed have been surprising if the authors of the Code, in the
that the law adopted the fiction of promise in order to bring the light of the jurisprudence of more than a thousand years, should have
obligation within the scope of the action of assumpsit. Such arbitrarily assumed to limit the quasi-contract to two obligations. The
statements fail to express the true import of the phenomenon. Before author from whom we have just quoted further observes that the two
the remedy was the idea; and the use of the remedy could not have obligations in question were selected for special treatment in the Code
been approved if it had not been for historical antecedents which made not only because they were the most conspicuous of the quasi-
the recognition of this remedy at one logical and proper. Furthermore, contracts, but because they had not been the subject of consideration
it should not be forgotten that the question is not how this duty but in other parts of the Code. (Opus citat., 550.)
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.
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.
G.R. No. 142830 March 24, 2006 In this petition for review on certiorari, WGCC raises this main question
WILLIAM GOLANGCO CONSTRUCTION CORPORATION, of law: whether or not petitioner WGCC is liable for defects in the grani
Petitioner, tite wash-out finish that occurred after the lapse of the one-year
vs. defects liability period provided in Art. XI of the construction contract.8
PHILIPPINE COMMERCIAL INTERNATIONAL BANK*, Respondent We rule in favor of WGCC.
DECISION The controversy pivots on a provision in the construction contract
CORONA, J.: referred to as the defects liability period:
The facts of this case are straightforward.1
William Golangco Construction Corporation (WGCC) and the ARTICLE XI – GUARANTEE
Philippine Commercial International Bank (PCIB) entered into a Unless otherwise specified for specific works, and without prejudice to
contract for the construction of the extension of PCIB Tower II the rights and causes of action of the OWNER under Article 1723 of
(denominated as PCIB Tower II, Extension Project [project])2 on the Civil Code, the CONTRACTOR hereby guarantees the work
October 20, 1989. The project included, among others, the application stipulated in this Contract, and shall make good any defect in
of a granitite wash-out finish3 on the exterior walls of the building. materials and workmanship which [becomes] evident within one
PCIB, with the concurrence of its consultant TCGI Engineers (TCGI), (1) year after the final acceptance of the work. The CONTRACTOR
accepted the turnover of the completed work by WGCC in a letter shall leave the work in perfect order upon completion and present the
dated June 1, 1992. To answer for any defect arising within a period of final certificate to the ENGINEER promptly.
one year, WGCC submitted a guarantee bond dated July 1, 1992 If in the opinion of the OWNER and ENGINEER, the CONTRACTOR
issued by Malayan Insurance Company, Inc. in compliance with the has failed to act promptly in rectifying any defect in the work which
construction contract.4 appears within the period mentioned above, the OWNER and the
The controversy arose when portions of the granitite wash-out finish ENGINEER may, at their own discretion, using the Guarantee Bond
of the exterior of the building began peeling off and falling from the amount for corrections, have the work done by another contractor at
walls in 1993. WGCC made minor repairs after PCIB requested it to the expense of the CONTRACTOR or his bondsmen.
rectify the construction defects. In 1994, PCIB entered into another However, nothing in this section shall in any way affect or relieve
contract with Brains and Brawn Construction and Development the CONTRACTOR’S responsibility to the OWNER. On the
Corporation to re-do the entire granitite wash-out finish after WGCC completion of the [w]orks, the CONTRACTOR shall clear away and
manifested that it was "not in a position to do the new finishing work," remove from the site all constructional plant, surplus materials, rubbish
though it was willing to share part of the cost. PCIB incurred expenses and temporary works of every kind, and leave the whole of the [s]ite
amounting to P11,665,000 for the repair work. and [w]orks clean and in a workmanlike condition to the satisfaction of
PCIB filed a request for arbitration with the Construction Industry the ENGINEER and OWNER.9 (emphasis ours)
Arbitration Commission (CIAC) for the reimbursement of its expenses Although both parties based their arguments on the same stipulations,
for the repairs made by another contractor. It complained of WGCC’s they reached conflicting conclusions. A careful reading of the
alleged non-compliance with their contractual terms on materials and stipulations, however, leads us to the conclusion that WGCC’s
workmanship. WGCC interposed a counterclaim for P5,777,157.84 for arguments are more tenable.
material cost adjustment. Autonomy of contracts
The CIAC declared WGCC liable for the construction defects in the The autonomous nature of contracts is enunciated in Article 1306 of
project.5 WGCC filed a petition for review with the Court of Appeals the Civil Code.
(CA) which dismissed it for lack of merit.6 Its motion for reconsideration Article 1306. The contracting parties may establish such stipulations,
was similarly denied.7 clauses, terms and conditions as they may deem convenient, provided
they are not contrary to law, morals, good customs, public order, or
public policy.
Obligations arising from contracts have the force of law between the The defects in the granitite wash-out finish were not the "obligation"
parties and should be complied with in good faith.10 In characterizing contemplated in Article 62.2. It was not an obligation that remained
the contract as having the force of law between the parties, the law unperformed or unfulfilled at the time the defects liability certificate
stresses the obligatory nature of a binding and valid agreement. was issued. The alleged defects occurred more than a year from the
The provision in the construction contract providing for a defects final acceptance by PCIB.
liability period was not shown as contrary to law, morals, good An examination of Article 1719 of the Civil Code is enlightening:
customs, pubic order or public policy. By the nature of the obligation Art. 1719. Acceptance of the work by the employer relieves the
in such contract, the provision limiting liability for defects and fixing contractor of liability for any defect in the work, unless:
specific guaranty periods was not only fair and equitable; it was also (1) The defect is hidden and the employer is not, by his special
necessary. Without such limitation, the contractor would be expected knowledge, expected to recognize the same; or
to make a perpetual guarantee on all materials and workmanship. (2) The employer expressly reserves his rights against the contractor
The adoption of a one-year guarantee, as done by WGCC and PCIB, by reason of the defect.
is established usage in the Philippines for private and government The lower courts conjectured that the peeling off of the granitite wash-
construction contracts.11 The contract did not specify a different period out finish was probably due to "defective materials and workmanship."
for defects in the granitite wash-out finish; hence, any defect therein This they characterized as hidden or latent defects. We, however, do
should have been brought to WGCC’s attention within the one-year not agree with the conclusion that the alleged defects were hidden.
defects liability period in the contract. First, PCIB’s team of experts14 (who were specifically employed to
We cannot countenance an interpretation that undermines a detect such defects early on) supervised WGCC’s workmanship.
contractual stipulation freely and validly agreed upon. The courts will Second, WGCC regularly submitted progress reports and
not relieve a party from the effects of an unwise or unfavorable contract photographs. Third, WGCC worked under fair and transparent
freely entered into.12 circumstances. PCIB had access to the site and it exercised
[T]he inclusion in a written contract for a piece of work [,] such as the reasonable supervision over WGCC’s work. Fourth, PCIB issued
one in question, of a provision defining a warranty period against several "punch lists" for WGCC’s compliance before the issuance of
defects, is not uncommon. This kind of a stipulation is of particular PCIB’s final certificate of acceptance. Fifth, PCIB supplied the
importance to the contractor, for as a general rule, after the lapse of materials for the granitite wash-out finish. And finally, PCIB’s team of
the period agreed upon therein, he may no longer be held accountable experts gave their concurrence to the turnover of the project.
for whatever defects, deficiencies or imperfections that may be The purpose of the defects liability period was precisely to give PCIB
discovered in the work executed by him.13 additional, albeit limited, opportunity to oblige WGCC to make good
Interpretation of contracts any defect, hidden or otherwise, discovered within one year.
To challenge the guarantee period provided in Article XI of the Contrary to the CA’s conclusion, the first sentence of the third
contract, PCIB calls our attention to Article 62.2 which provides: paragraph of Article XI on guarantee previously quoted did not operate
62.2 Unfulfilled Obligations as a blanket exception to the one-year guarantee period under the first
Notwithstanding the issue of the Defects Liability Certificate[,] the paragraph. Neither did it modify, extend, nullify or supersede the
Contractor and the Owner shall remain liable for the fulfillment of categorical terms of the defects liability period.
any obligation[,] incurred under the provisions of the Contract Under the circumstances, there were no hidden defects for which
prior to the issue of the Defects Liability Certificate[,] which WGCC could be held liable. Neither was there any other defect for
remains unperformed at the time such Defects Liability Certificate which PCIB made any express reservation of its rights against WGCC.
is issued[. And] for the purpose of determining the nature and extent Indeed, the contract should not be interpreted to favor the one who
of any such obligation, the Contract shall be deemed to remain in force caused the confusion, if any. The contract was prepared by TCGI for
between the parties of the Contract. (emphasis ours) PCIB.15
SO ORDERED.
G.R. No. L-3489 September 7, 1907 The defendant upon being informed of this decision, asked that it be
VICENTE NAVALES, plaintiff-appellee, set aside, and also moved for a new trial on the ground that the
vs. decision was not in accordance with the weight of the evidence.
EULOGIA RIAS, ET AL., defendants-appellants.
Pantaleon E. del Rosario for appellants.
F. Sevilla y Macam for appellee.
TORRES, J.: The motion was denied, to which exception was taken, and at the
request of the interested party, the corresponding bill of exceptions
was limited.
On the 18th of November, 1904, Vicente Navales filed a complaint with
the Court of First Instance of Cebu against Eulogia Rias and Maximo The aim of this litigation, therefore, is to obtain payment through a
Requiroso, claiming that the latter should be sentenced to pay him the judicial decision, of the damages said to have been caused by the
sum of 1,200 pesos, Philippine currency, as damages, together with execution of a judgment rendered by the justice of the peace, in an
costs and such other expenses as the court might consider just and action for ejectment.
equitable.
It is undeniable that, in order to remove from the land of Eulogia Rias,
To this end he alleged that the said defendants, without due cause, situated within the jurisdiction of the town of Naga, the house which
ordered the pulling down and destruction of his house erected in Vicente Navales had constructed thereon, by virtue of the decision of
Daanbuangan, town of Naga, Island of Cebu, which was 6 meters in the justice in the action instituted by the said Eulogia Rias against the
height with an area of 8.70 square meters, built of wood with a nipa owner of the house , Vicente Navales, the deputy sheriff who carried
roof, and worth 1,000 pesos, which amount he expended in its the judgment into execution was obliged to destroy the said house and
construction. He further alleged that the destruction took place in the removed it from the land, according to the usual procedure in the
month of April, 1904, and that, notwithstanding his efforts, he had not action for ejectment.
obtained any reimbursement from the defendants, and that by reason
of their refusal he had been prejudiced to the extent of 200 pesos, In the order of execution issued to the deputy sheriff, the directive
Philippine currency. portion of the judgment of the justice of the peace was inserted, and it
contained the essential statement that the said judgment, by reason of
The defendant, in answer to the foregoing complaint, denied all and its not having been appealed from, had become final, and from the
each one of the allegations therein contained, and asked that judgment contents of the same may be inferred that there had been an action for
be entered dismissing the complaint with costs against the plaintiff. ejectment between the above-named parties, and that there was no
reason why it should not be enforced when it had already become final
After considering the proofs submitted by both parties and the and acquired the nature of res adjudicata.
proceedings upon the trial, the judge, on the 17th of January, 1906,
rendered judgment declaring that the decision entered by the justice Section 72 of the Code of Civil Procedure reads:
of the peace of Naga, and the order given by virtue thereof were illegal, Execution. — If no appeal from a judgment of a justice of the peace
as well as the action of the deputy sheriff Luciano Bacayo, that the shall be perfected as herein provided, the justice of the peace shall, at
defendant were thereby liable for the damages caused to the plaintiff, the request of the successful party, issue execution for the
which amounted to 500 pesos, and that the defendants were enforcement of the judgment, and the expiration of the time limited by
sentenced to pay the said sum to the plaintiff, with costs. law for the perfection of an appeal.
Assuming that the order for execution of final judgment was issued in
accordance with the law, and in view of the fact that it has not been
alleged nor proven that the sheriff when complying with the same had
committed trespass or exceeded his functions, it must be presumed
according to section 334 (14) of the said Code of Procedure, that the
official duty was regularly performed. Therefore, it is not possible to
impute liability to the plaintiff who obtained the judgment and the
execution thereof, when the same was not disputed nor alleged to be
null or illegal, and much less to compel the payment of damages to the
person who was defeated in the action and sentenced to be ejected
from the land which he improperly occupied with his house.

No proof has been submitted that a contract had been entered into
between the plaintiff and the defendants, or that the latter had
committed illegal acts or omissions or incurred in any kind of fault or
negligence, from any of which an obligation might have arisen on the
part of the defendants to indemnify the plaintiff. For this reason, the
claim for indemnity, on account of acts performed by the sheriff while
enforcing a judgment, can not under any consideration be sustained.
(Art. 1089, Civil Code.)

The illegality of the judgment of the justice of the peace, that of the writ
of execution thereunder, or of the acts performed by the sheriff for the
enforcement of the judgment, has not been shown. Therefore, for the
reasons hereinbefore set forth, the judgment appealed from is hereby
reversed, and the complaint for damages filed by Vicente Navales
against Eulogia Rias and Maximo Requiroso is dismissed without
special ruling as to costs. So ordered.