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    OCCENA v. JABSON

    Uploaded by

    Rizza
    This case involves a dispute over a subdivision development contract between landowners (petitioners) and a property developer (private respondent). Under the contract, the petitioners' share of profits from lot sales was fixed at 40% of cash receipts. When development costs increased significantly, the private respondent sought to modify the contract terms in court. The Supreme Court ruled in favor of the petitioners, finding that increased costs did not release the respondent from the contract. The court cannot rewrite the contract by modifying the agreed-upon profit sharing arrangement. While performance may be excused if manifestly beyond contemplation, the complaint sought to change terms rather than be released from obligations.

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    OCCENA v. JABSON

    Uploaded by

    Rizza
    58 views2 pages
    This case involves a dispute over a subdivision development contract between landowners (petitioners) and a property developer (private respondent). Under the contract, the petitioners' share of profits from lot sales was fixed at 40% of cash receipts. When development costs increased significantly, the private respondent sought to modify the contract terms in court. The Supreme Court ruled in favor of the petitioners, finding that increased costs did not release the respondent from the contract. The court cannot rewrite the contract by modifying the agreed-upon profit sharing arrangement. While performance may be excused if manifestly beyond contemplation, the complaint sought to change terms rather than be released from obligations.

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    This case involves a dispute over a subdivision development contract between landowners (petitioners) and a property developer (private respondent). Under the contract, the petitioners' share of profits from lot sales was fixed at 40% of cash receipts. When development costs increased significantly, the private respondent sought to modify the contract terms in court. The Supreme Court ruled in favor of the petitioners, finding that increased costs did not release the respondent from the contract. The court cannot rewrite the contract by modifying the agreed-upon profit sharing arrangement. While performance may be excused if manifestly beyond contemplation, the complaint sought to change terms rather than be released from obligations.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    58 views2 pages

    OCCENA v. JABSON

    Uploaded by

    Rizza
    This case involves a dispute over a subdivision development contract between landowners (petitioners) and a property developer (private respondent). Under the contract, the petitioners' share of profits from lot sales was fixed at 40% of cash receipts. When development costs increased significantly, the private respondent sought to modify the contract terms in court. The Supreme Court ruled in favor of the petitioners, finding that increased costs did not release the respondent from the contract. The court cannot rewrite the contract by modifying the agreed-upon profit sharing arrangement. While performance may be excused if manifestly beyond contemplation, the complaint sought to change terms rather than be released from obligations.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 2

    285. OCCENA v.

    JABSON

    FACTS:
    Private respondent Tropical Homes, Inc had a subdivision contract with petitioners who
    are the owners of the land subject of subdivision development by private respondent.
    The contract stipulated that the petitioners’ fixed and sole share and participation is the
    land which is equivalent to forty percent of all cash receipts from the sale of the
    subdivision lots. When the development costs increased to such level not anticipated
    during the signing of the contract and which threatened the financial viability of the
    project as assessed by the private respondent, respondent filed at the lower court a
    complaint for the modification of the terms and conditions of the contract by fixing the
    proper shares that should pertain to the parties therein out of the gross proceeds from
    the sales of the subdivision lots. Petitioners moved for the dismissal of the complaint for
    lack of cause of action. The lower court denied the motion for dismissal which was
    upheld by the CA based on the civil code provision that “when the service has become
    so difficult as to be manifestly beyond the contemplation of the parties, the obligor may
    also be released therefrom, in whole or in part”. Insisting that the worldwide increase in
    prices cited by private respondent does not constitute a sufficient cause of action for the
    modification of the terms and conditions of the contract, petitioners filed the instant
    petition. 

    ISSUE:
    Whether private respondent may demand modification of the terms of the contract on
    the ground that the prestation has manifestly come beyond the contemplation of the
    parties

    RULING:

    No. SC ruled in favour of the Petitioner and granted the petition on Basis that there is no
    cause of action and misapplication of Article 1267 While respondent court correctly cited
    in its decision the Code Commission's report givingThe general rule is that impossibility
    of performance releases the obligor. However, it is submitted that when the service has
    become so difficult as to be manifestly beyond the contemplation of the parties, the
    court should be authorized to release the obligor in whole or in part. The intention of the
    parties should govern and if it appears that the service turns out to be so difficult as
    have been beyond their contemplation, it would be doing violence to that intention to
    hold the obligor still responsible.It misapplied the same to respondent's complaint.

    If respondent's complaint were to be released from having to comply with the


    subdivision contract, assuming it could show at the trial that the service undertaken
    contractually by it had "become so difficult as to be manifestly beyond the contemplation
    of the parties", then respondent court's upholding of respondet's complaint and
    dismissal of the petition would be justifiable under the cited codal article. Without said
    article, respondent would remain bound by its contract under the theretofore prevailing
    doctrine that performance therewith is ot excused "by the fact that the contract turns out
    to be hard and improvident, unprofitable, or unespectedly burdensome", 3 since in case
    a party desires to be excuse from performance in the event of such contingencies
    arising, it is his duty to provide threfor in the
    contract.chanroblesvirtualawlibrarychanrobles virtual law library

    But respondent's complaint seeks not release from the subdivision contract but that the
    court "render judgment I modifying the terms and Conditions of the Contract by fixing
    the proper shares that should pertain to the herein parties out of the gross proceed.,
    from the sales of subdivided lots of subject subdivision". The cited article does not grant
    the courts this authority to remake, modify or revise the contract or to fix the division of
    shares between the parties as contractually stipulated with the force of law between the
    parties, so as to substitute its own terms for those covenanted by the
    partiesthemselves. Respondent's complaint for modification of contract manifestly has
    no basis in law and therefore states no cause of action. Under the particular allegations
    of respondent's complaint and the circumstances therein averred, the courts cannot
    even in equity grant the relief sought.

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