Civil Procedure-Dean JaraCase Compilation2013400059

Civil Procedure-Dean JaraCase Compilation2013400059

FIRST DIVISIONIRENE SANTE AND REYNALDO SANTE,Petitioners,- versus -HON. EDILBERTO T. CLARAVALL, in his capacity as Presiding Judge of Branch 60, Regional Trial Court of Baguio City, and VITA N. KALASHIAN,Respondents.G.R. No. 173915

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VILLARAMA, JR., J.:Before this Court is a petition for certiorari[if !supportFootnotes][1][endif] under Rule 65 of the 1997 Rules of Civil Procedure, as amended, filed by petitioners Irene and Reynaldo Sante assailing the Decision[if !supportFootnotes][2][endif] dated January 31, 2006 and the Resolution[if !supportFootnotes][3][endif] dated June 23, 2006 of the Seventeenth Division of the Court of Appeals in CA-G.R. SP No. 87563. The assailed decision affirmed the orders of the Regional Trial Court (RTC) of Baguio City, Branch 60, denying their motion to dismiss the complaint for damages filed by respondent Vita Kalashian against them.The facts, culled from the records, are as follows:On April 5, 2004, respondent filed before the RTC of Baguio City a complaint for damages[if !supportFootnotes][4][endif] against petitioners. In her complaint, docketed as Civil Case No. 5794-R, respondent alleged that while she was inside the Police Station of Natividad, Pangasinan, and in the presence of other persons and police officers, petitioner Irene Sante uttered words, which when translated in English are as follows, How many rounds of sex did you have last night with your boss, Bert? You fuckin bitch! Bert refers to Albert Gacusan, respondents friend and one (1) of her hired personal security guards detained at the said station and who is a suspect in the killing of petitioners close relative. Petitioners also allegedly went around Natividad, Pangasinan telling people that she is protecting and cuddling the suspects in the aforesaid killing. Thus, respondent prayed that petitioners be held liable to pay moral damages in the amount of P300,000.00; P50,000.00 as exemplary damages; P50,000.00 attorneys fees; P20,000.00 litigation expenses; and costs of suit.Petitioners filed a Motion to Dismiss[if !supportFootnotes][5][endif] on the ground that it was the Municipal Trial Court in Cities (MTCC) and not the RTC of Baguio, that had jurisdiction over the case. They argued that the amount of the claim for moral damages was not more than the jurisdictional amount of P300,000.00, because the claim for exemplary damages should be excluded in computing the total claim.On June 24, 2004,[if !supportFootnotes][6][endif] the trial court denied the motion to dismiss citing our ruling in Movers-Baseco Integrated Port Services, Inc. v. Cyborg Leasing Corporation.[if !supportFootnotes][7][endif] The trial court held that the total claim of respondent amounted to P420,000.00 which was above the jurisdictional amount for MTCCs outside Metro Manila. The trial court also later issued Orders on July 7, 2004[if !supportFootnotes][8][endif] and July 19, 2004,[if !supportFootnotes][9][endif] respectively reiterating its denial of the motion to dismiss and denying petitioners motion for reconsideration.Aggrieved, petitioners filed on August 2, 2004, a Petition for Certiorari and Prohibition,[if !supportFootnotes][10][endif] docketed as CA-G.R. SP No. 85465, before the Court of Appeals. Meanwhile, on July 14, 2004, respondent and her husband filed an Amended Complaint[if !supportFootnotes][11][endif] increasing the claim for moral damages from P300,000.00 to P1,000,000.00. Petitioners filed a Motion to Dismiss with Answer Ad Cautelam and Counterclaim, but the trial court denied their motion in an Order[if !supportFootnotes][12][endif] dated September 17, 2004.Hence, petitioners again filed a Petition for Certiorari and Prohibition[if !supportFootnotes][13][endif] before the Court of Appeals, docketed as CA-G.R. SP No. 87563, claiming that the trial court committed grave abuse of discretion in allowing the amendment of the complaint to increase the amount of moral damages from P300,000.00 to P1,000,000.00. The case was raffled to the Seventeenth Division of the Court of Appeals.On January 23, 2006, the Court of Appeals, Seventh Division, promulgated a decision in CA-G.R. SP No. 85465, as follows:WHEREFORE, finding grave abuse of discretion on the part of [the] Regional Trial Court of Baguio, Branch 60, in rendering the assailed Orders dated June 24, 2004 and July [19], 2004 in Civil Case No. 5794-R the instant petition for certiorari is GRANTED. The assailed Orders are hereby ANNULLED and SET ASIDE. Civil Case No. 5794-R for damages is ordered DISMISSED for lack of jurisdiction.SO ORDERED.[if !supportFootnotes][14][endif]The Court of Appeals held that the case clearly falls under the jurisdiction of the MTCC as the allegations show that plaintiff was seeking to recover moral damages in the amount of P300,000.00, which amount was well within the jurisdictional amount of the MTCC. The Court of Appeals added that the totality of claim rule used for determining which court had jurisdiction could not be applied to the instant case because plaintiffs claim for exemplary damages was not a separate and distinct cause of action from her claim of moral damages, but merely incidental to it. Thus, the prayer for exemplary damages should be excluded in computing the total amount of the claim.On January 31, 2006, the Court of Appeals, this time in CA-G.R. SP No. 87563, rendered a decision affirming the September 17, 2004 Order of the RTC denying petitioners Motion to Dismiss Ad Cautelam. In the said decision, the appellate court held that the total or aggregate amount demanded in the complaint constitutes the basis of jurisdiction. The Court of Appeals did not find merit in petitioners posture that the claims for exemplary damages and attorneys fees are merely incidental to the main cause and should not be included in the computation of the total claim.The Court of Appeals additionally ruled that respondent can amend her complaint by increasing the amount of moral damages from P300,000.00 to P1,000,000.00, on the ground that the trial court has jurisdiction over the original complaint and respondent is entitled to amend her complaint as a matter of right under the Rules.Unable to accept the decision, petitioners are now before us raising the following issues:I.WHETHER OR NOT THERE WAS GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR IN EXCESS OF JURISDICTION ON THE PART OF THE (FORMER) SEVENTEENTH DIVISION OF THE HONORABLE COURT OF APPEALS WHEN IT RESOLVED THAT THE REGIONAL TRIAL COURT OF BAGUIO CITY BRANCH 60 HAS JURISDICTION OVER THE SUBJECT MATTER OF THE CASE FOR DAMAGES AMOUNTING TO P300,000.00;II.WHETHER OR NOT THERE WAS GRAVE ABUSE OF DISCRETION ON THE PART OF THE HONORABLE RESPONDENT JUDGE OF THE REGIONAL TRIAL COURT OF BAGUIO BRANCH 60 FOR ALLOWING THE COMPLAINANT TO AMEND THE COMPLAINT (INCREASING THE AMOUNT OF DAMAGES TO 1,000,000.00 TO CONFER JURISDICTION OVER THE SUBJECT MATTER OF THE CASE DESPITE THE PENDENCY OF A PETITION FOR CERTIORARI FILED AT THE COURT OF APPEALS, SEVENTH DIVISION, DOCKETED AS CA G.R. NO. 85465.[if !supportFootnotes][15][endif]In essence, the basic issues for our resolution are:[if !supportLists]1) [endif]Did the RTC acquire jurisdiction over the case? and[if !supportLists]2) [endif]Did the RTC commit grave abuse of discretion in allowing the amendment of the complaint?Petitioners insist that the complaint falls under the exclusive jurisdiction of the MTCC. They maintain that the claim for moral damages, in the amount of P300,000.00 in the original complaint, is the main action. The exemplary damages being discretionary should not be included in the computation of the jurisdictional amount. And having no jurisdiction over the subject matter of the case, the RTC acted with grave abuse of discretion when it allowed the amendment of the complaint to increase the claim for moral damages in order to confer jurisdiction.In her Comment,[if !supportFootnotes][16][endif] respondent averred that the nature of her complaint is for recovery of damages. As such, the totality of the claim for damages, including the exemplary damages as well as the other damages alleged and prayed in the complaint, such as attorneys fees and litigation expenses, should be included in determining jurisdiction. The total claim being P420,000.00, the RTC has jurisdiction over the complaint.We deny the petition, which although denominated as a petition for certiorari, we treat as a petition for review on certiorari under Rule 45 in view of the issues raised.Section 19(8) of Batas Pambansa Blg. 129,[if !supportFootnotes][17][endif] as amended by Republic Act No. 7691,[if !supportFootnotes][18][endif] states:SEC. 19. Jurisdiction in civil cases. Regional Trial Courts shall exercise exclusive original jurisdiction:x x x x(8) In all other cases in which the demand, exclusive of interest, damages of whatever kind, attorneys fees, litigation expenses, and costs or the value of the property in controversy exceeds One hundred thousand pesos (P100,000.00) or, in such other cases in Metro Manila, where the demand, exclusive of the abovementioned items exceeds Two hundred thousand pesos (P200,000.00).Section 5 of Rep. Act No. 7691 further provides:SEC. 5. After five (5) years from the effectivity of this Act, the jurisdictional amounts mentioned in Sec. 19(3), (4), and (8); and Sec. 33(1) of Batas Pambansa Blg. 129 as amended by this Act, shall be adjusted to Two hundred thousand pesos (P200,000.00). Five (5) years thereafter, such jurisdictional amounts shall be adjusted further to Three hundred thousand pesos (P300,000.00): Provided, however, That in the case of Metro Manila, the abovementioned jurisdictional amounts shall be adjusted after five (5) years from the effectivity of this Act to Four hundred thousand pesos (P400,000.00).Relatedly, Supreme Court Circular No. 21-99 was issued declaring that the first adjustment in jurisdictional amount of first level courts outside of Metro Manila from P100,000.00 to P200,000.00 took effect on March 20, 1999. Meanwhile, the second adjustment from P200,000.00 to P300,000.00 became effective on February 22, 2004 in accordance with OCA Circular No. 65-2004 issued by the Office of the Court Administrator on May 13, 2004.Based on the foregoing, there is no question that at the time of the filing of the complaint on April 5, 2004, the MTCCs jurisdictional amount has been adjusted to P300,000.00.But where damages is the main cause of action, should the amount of moral damages prayed for in the complaint be the sole basis for determining which court has jurisdiction or should the total amount of all the damages claimed regardless of kind and nature, such as exemplary damages, nominal damages, and attorneys fees, etc., be used?In this regard, Administrative Circular No. 09-94[if !supportFootnotes][19][endif] is instructive:x x x x2. The exclusion of the term damages of whatever kind in determining the jurisdictional amount under Section 19 (8) and Section 33 (1) of B.P. Blg. 129, as amended by R.A. No. 7691, applies to cases where the damages are merely incidental to or a consequence of the main cause of action. However, in cases where the claim for damages is the main cause of action, or one of the causes of action, the amount of such claim shall be considered in determining the jurisdiction of the court. (Emphasis ours.)In the instant case, the complaint filed in Civil Case No. 5794-R is for the recovery of damages for the alleged malicious acts of petitioners. The complaint principally sought an award of moral and exemplary damages, as well as attorneys fees and litigation expenses, for the alleged shame and injury suffered by respondent by reason of petitioners utterance while they were at a police station in Pangasinan. It is settled that jurisdiction is conferred by law based on the facts alleged in the complaint since the latter comprises a concise statement of the ultimate facts constituting the plaintiffs causes of action.[if !supportFootnotes][20][endif] It is clear, based on the allegations of the complaint, that respondents main action is for damages. Hence, the other forms of damages being claimed by respondent, e.g., exemplary damages, attorneys fees and litigation expenses, are not merely incidental to or consequences of the main action but constitute the primary relief prayed for in the complaint.In Mendoza v. Soriano,[if !supportFootnotes][21][endif] it was held that in cases where the claim for damages is the main cause of action, or one of the causes of action, the amount of such claim shall be considered in determining the jurisdiction of the court. In the said case, the respondents claim of P929,000.06 in damages and P25,000 attorneys fees plus P500 per court appearance was held to represent the monetary equivalent for compensation of the alleged injury. The Court therein held that the total amount of monetary claims including the claims for damages was the basis to determine the jurisdictional amount.Also, in Iniego v. Purganan,[if !supportFootnotes][22][endif] the Court has held:The amount of damages claimed is within the jurisdiction of the RTC, since it is the claim for all kinds of damages that is the basis of determining the jurisdiction of courts, whether the claims for damages arise from the same or from different causes of action.Considering that the total amount of damages claimed was P420,000.00, the Court of Appeals was correct in ruling that the RTC had jurisdiction over the case.Lastly, we find no error, much less grave abuse of discretion, on the part of the Court of Appeals in affirming the RTCs order allowing the amendment of the original complaint from P300,000.00 to P1,000,000.00 despite the pendency of a petition for certiorari filed before the Court of Appeals. While it is a basic jurisprudential principle that an amendment cannot be allowed when the court has no jurisdiction over the original complaint and the purpose of the amendment is to confer jurisdiction on the court,[if !supportFootnotes][23][endif] here, the RTC clearly had jurisdiction over the original complaint and amendment of the complaint was then still a matter of right.[if !supportFootnotes][24][endif]WHEREFORE, the petition is DENIED, for lack of merit. The Decision and Resolution of the Court of Appeals dated January 31, 2006 and June 23, 2006, respectively, are AFFIRMED. The Regional Trial Court of Baguio City, Branch 60 is DIRECTED to continue with the trial proceedings in Civil Case No. 5794-R with deliberate dispatch.No costs. SO ORDERED.

G.R. No. L-2352 July 26, 1910ELADIO ALONSO, plaintiff-appellee, vs.TOMAS VILLAMOR, ET AL., defendants-appellants.Ledesma, Sumulong and Quintos, for appellants.J. C. Knudson, for appellee.MORELAND, J.:

This is an action brought to recover of the defendants the value of certain articles taken from a Roman Catholic Church located in the municipality of Placer, and the rental value of the church and its appurtenances, including the church cemetery, from the 11th day of December, 1901, until the month of April, 1904. After hearing the evidence, the court below gave judgment in favor of the plaintiff for the sum of P1,581, with interest at 6 per cent from the date of the judgment. The said sum of P1,581 was made up of two items, one of which, P741, was for the value of the articles taken from the church, and the other, P840, the rental value of the premises during the occupations by defendants. From this judgment the defendants appealed to this court.It appears that the defendants were on the 11th day of December, 1901, members of the municipal board of the municipality of Placer, and that they on that date addressed to the plaintiff in this case, who was the priest in charge of the church, its appurtenances and contents, the following letter: PLACER, 11th December, 1901.R. P. ELADIO ALONSO, Benedicto, Suriago.ESTEEMED PADRE: After saluting you, we take the liberty of writing you that in the municipality of which we have charged we have received an order from the provincial fiscal, dated the 5th instant, which says: "The cemeteries, convents, and the other buildings erected on land belonging to the town at the expense of the town and preserved by it belong to the town, and for this reason the municipality is under the obligation of administering them and of collecting the revenues therefrom, and for this reason we notify you that from this date all of the revenues and products therefrom must be turned into the treasury of the municipality in order that the people may properly preserve them.In the same way we notify you that the image of St. Vicente which is now in the church, as it is an image donated to the people by its owner, by virtue of said order is also the property of said people, and therefore the alms which are given it by the devotees thereof must be also turned into the municipal treasury for the proper preservation of the church and for other necessary purposes. We hope that you will view in the proper light and that you will deliver to the bearer of this letter the key of the alms box of the said image in order that we may comply with our obligation in conformity with the dispositions of said order.We beg to remain as always by your spiritual sons. Q. B. S. M.

(Signed) ANDRES OJEDA.

TOMAS VILLAMOR.

ANDRES CALINAUAN.

BERNARDINO TANDOY.

EUSEBIO LIRIO.

ELEUTERIO MONDAYA.

MAXIMO DELOLA.

SEGUNDO BECERRO.

ONOFRE ELIMANCE.On the 13th of December, 1901, the defendants took possession of the church and its appurtenances, and also of all of the personal property contained therein. The plaintiff, as priest of the church and the person in charge thereof, protested against the occupation thereof by the defendants, but his protests received no consideration, and he was summarily removed from possession of the church, its appurtenances and contents.The only defense presented by the defendants, except the one that the plaintiff was not the real party in interest, was that the church and other buildings had been erected by funds voluntarily contributed by the people of that municipality, and that the articles within the church had been purchased with funds raised in like manner, and that, therefore, the municipality was the owner thereof.The question as to the ownership of the church and its appurtenances, including the convent and cemetery, was before this court on the 23rd day of September, 1908, in an action entitled "The Roman Catholic Apostolic Church against the municipality of Placer."1 Substantially the same facts were presented on the part of the defendants in that case as are presented by the defendants in this. The question there litigated was the claim upon the part of the municipality of ownership of said church and its appurtenances on the ground that according to Spanish law the Roman Catholic Apostolic Church was not the owner of such property, having only the use thereof for ordinary ecclesiastical and religious purposes, and that the true owner thereof was the municipality or the State by reason of the contributions by them, or by the people, of the land and of the funds with which the buildings were constructed or repaired. The court decided in that case that the claim of the defendants was not well founded and that the property belonged to the Roman Catholic Church. The same question was discussed and decided in the case of Barlin vs. Ramirez (7 Phil. Rep., 41), and the case of The Municipality of Ponce vs. Roman Catholic Apostolic Church in Porto Rico (28 Sup. Ct. Rep., 737, 6 Off. Gaz., 1213).We have made a careful examination of the record and the evidence in this case and we have no doubt that the property sued for was, at the time it was taken by the defendants, the property of the Roman Catholic Church, and that the seizure of the same and occupation of the church and its appurtenances by the defendants were wrongful and illegal. We are also convinced, from such examination, that the conclusions of the court below as to the value of the articles taken by the defendants and of the rent of the church for the time of its illegal occupation by the defendants were correct and proper. While some objection was made on appeal by counsel for the defendants that the value of the articles taken and of the rent of the church and its appurtenances had not been proved by competent evidence, no objection to the introduction of the evidence of value was made at the trial and we can not consider that question raised for the first time here.We have carefully examined the assignments of error made by counsel for defendants on this appeal. We find none of them well founded. The only one which deserves especial attention at our hands is the one wherein the defendants assert that the court below erred in permitting the action to be brought and continued in the name of the plaintiff instead of in the name of the bishop of the diocese within which the church was located, or in the name of the Roman Catholic Apostolic Church, as the real party in interest.It is undoubted the bishop of the diocese or the Roman Catholic Apostic Church itself is the real party in interest. The plaintiff personally has no interest in the cause of action. Section 114 of the Code of Civil Procedure requires that every action must be prosecuted in the name of the real party in interest. The plaintiff is not such party.Section 110 of the Code of Civil Procedure, however, provides:SEC. 110. Amendments in general. The court shall, in furtherance of justice, and on such terms, if any, as may be proper, allow a party to amend any pleading or proceeding and at any stage of the action, in either the Court of First Instance or the Supreme Court, by adding or striking out the name of any party, either plaintiff or defendant, or by correcting a mistake in the name of a party, or a mistaken or inadequate allegation or description in any other respect so that the actual merits of the controversy may speedily be determined, without regard to technicalities, and in the most expeditious, and inexpensive manner. The court may also, upon like terms, allow an answer or other pleading to be made after the time limited by the rules of the court for filing the same. Orders of the court upon the matters provided in this section shall be made upon motion filed in court, and after notice to the adverse party, and an opportunity to be heard.Section 503 of the same code provides:SEC. 503. Judgment not to be reversed on technical grounds. No judgment shall be reversed on formal or technical grounds, or for such error as has not prejudiced the real rights of the excepting party.We are confident under these provisions that this court has full power, apart from that power and authority which is inherent, to amend the process, pleadings, proceedings, and decision in this case by substituting, as party plaintiff, the real party in interest. Not only are we confident that we may do so, but we are convinced that we should do so. Such an amendment does not constitute, really a change in the identity of the parties. The plaintiff asserts in his complaint, and maintains that assertion all through the record, that he is engaged in the prosecution of this case, not for himself, but for the bishop of the diocesenot by his own right, but by right of another. He seeks merely to do for the bishop what the bishop might do for himself. His own personality is not involved. His own rights are not presented. He claims no interest whatever in the litigation. He seeks only the welfare of the great church whose servant he is. Gladly permits his identity to be wholly swallowed up in that of his superior. The substitution, then, of the name of the bishop of the diocese, or the Roman Catholic Apostolic Church, for that of Padre Alonso, as party plaintiff, is not in reality the substitution of one identity for another, of one party for another, but is simply to make the form express the substance. The substance is there. It appears all through the proceedings. No one is deceived for an instant as to whose interest are at stake. The form of its expression is alone defective. The substitution, then, is not substantial but formal. Defect in mere form can not possibly so long as the substantial is clearly evident. Form is a method of speech used to express substance and make it clearly appear. It is the means by which the substance reveals itself. If the form be faulty and still the substance shows plainly through no, harm can come by making the form accurately expressive of the substance.No one has been misled by the error in the name of the party plaintiff. If we should by reason of this error send this back for amendment and new trial, there would be on the retrial the same complaint, the same answer, the same defense, the same interests, the same witnesses, and the same evidence. The name of the plaintiff would constitute the only difference between the old trial and the new. In our judgment there is not enough in a name to justify such action.There is nothing sacred about processes or pleadings, their forms or contents. Their sole purpose is to facilitate the application of justice to the rival claims of contending parties. They were created, not to hinder and delay, but to facilitate and promote, the administration of justice. They do not constitute the thing itself, which courts are always striving to secure to litigants. They are designed as the means best adapted to obtain that thing. In other words, they are a means to an end. When they lose the character of the one and become the other, the administration of justice is at fault and courts are correspondingly remiss in the performance of their obvious duty.The error in this case is purely technical. To take advantage of it for other purposes than to cure it, does not appeal to a fair sense of justice. Its presentation as fatal to the plaintiff's case smacks of skill rather than right. A litigation is not a game of technicalities in which one, more deeply schooled and skilled in the subtle art of movement and position, entraps and destroys the other. It is, rather, a contest in which each contending party fully and fairly lays before the court the facts in issue and then, brushing aside as wholly trivial and indecisive all imperfections of form and technicalities of procedure, asks that justice be done upon the merits. Lawsuits, unlike duels, are not to be won by a rapier's thrust. Technicality, when it desserts its proper office as an aid to justice and becomes its great hindrance and chief enemy, deserves scant consideration from courts. There should be no vested rights in technicalities. No litigant should be permitted to challenge a record of a court of these Islands for defect of form when his substantial rights have not been prejudiced thereby.In ordering this substitution, we are in accord with the best judicial thought. (McKeighan vs. Hopkins, 19 Neb., 33; Dixon vs. Dixon, 19 Ia., 512; Hodges vs. Kimball, 49 Ia., 577; Sanger vs. Newton, 134 Mass., 308; George vs. Reed, 101 Mass., 378; Bowden vs. Burnham, 59 Fed. Rep., 752; Phipps and Co. vs. Hurlburt, 70 Fed. Rep., 202; McDonal vs. State, 101 Fed. Rep., 171; Morford vs. Diffenbocker, 20 N. W., 600; Costelo vs. Costelo vs. Crowell, 134 Mass., 280; Whitaker vs. Pope, 2 Woods, 463, Fed. Cas. no. 17528; Miller vs. Pollock, 99 Pa. St., 202; Wilson vs. Presbyterian Church, 56 Ga., 554; Wood vs. Circuit Judge, 84 Mich., 521; Insurance Co, vs. Mueller, 77 Ill., 22; Farman vs. Doyle, 128 Mich., 696; Union Bank vs. Mott, 19 How. Pr., 114; R. R. Co. vs. Gibson, 4 Ohio St., 145; Hume vs. Kelly, 28 Oreg., 398.)It is therefore, ordered and decreed that the process, pleadings, proceedings and decision in this action be, and the same are hereby, amended by substituting the Roman Catholic Apostolic Church in the place and stead of Eladio Alonso as party plaintiff, that the complaint be considered as though originally filed by the Catholic Church, the answer thereto made, the decision rendered and all proceedings in this case had, as if the said institution which Father Eladio Alonso undertook to represent were the party plaintiff, and that said decision of the court below, so amended, is affirmed, without special finding as to the costs.Arellano, C. J., Torres, Johnson and Trent, JJ., concur.

G.R. No. 29155, Larena v. Villanueva, 53 Phil. 923content followsRepublic of the PhilippinesSUPREME COURTManilaEN BANCNovember 5, 1928G.R. No. 29155JOSEFINA RUBIO DE LARENA, plaintiff-appellant, vs.HERMENEGILDO VILLANUEVA, defendant-appellee.Abad Santos, Camus and Delgado and Jose Montano for appellant. Del Rosario and Del Rosario for appellee.

OSTRAND, J.:The case at bar is a sequel to case G. R. No. 21706, Josefina Rubio de Larena vs. Hermenegildo Villanueva, decided on March 26, 1924.[[1]]In that case we affirmed a decision of the Court of First Instance ordering the rescission of a lease of the Tacgajan Sugar Plantation and the payment by the defendant-lessee of the unpaid balance of the rent for the agricultural year 1920-1922 in the sum of P5,949.28 with interest from August 26, 1922, an for P8,000 in rent for the agricultural year 1921-1923. The decision also provided that the possession of the leased land be delivered to the plaintiff.Shortly after the record was returned to the court below, a writ of execution was issued, but before levy was made the parties came to an agreement, under which the money judgment was to be satisfied by the payment of P10,500 in cash and the transfer to the plaintiff of a dwelling house situated in the municipality of Bais. The agreement was carried out in accordance with its terms, and on September 30, 1924, the following document was executed by the plaintiff:Habiendo llegado a un convenio entre la que subscribe, ejecutante, en la causa civil No. 67 decidida por la Corte Suprema, y el ejecutado, Don Hermenegildo Villanueva, por la presente declaro haber recibido del Sheriff Provincial de Negros Oriental, y mi entera satisfaccion la suma de diez mil quinientos pesos (P10,500), mas una casa residencial con su solar, situada en la plaza del Municipio de Bais, Provincia de Negros Oriental, cuyas descripciones aparecen an un ocumento aparte, por el importnte de la ejecusacion expidida por el Jusgado de Negros Oriental al 14 de mayo de 1924, en vitud de una decision de la Corte Suprema. Con este queda definitivamente cumplimentada esta ejecucion.Y para que asi conste, firmo la presente en el Municipio de Bais, Provincia de Negros Oriental, I. F., ante el Sheriff Provincial de esta Provincia de Negros Oriental y el Notario Publico Don Francisco Romero, que ratifica este compromiso.(Fda.) JOSEFINA RUBIO, Vda. DE LARENAFirmado en presencia de:(Fdos.) BRAULIO RUBIO FRANCISCO PINERO(ACKNOWLEDGMENT)In the meantime, the defendant had harvested the sugarcane crop produced in the agricultural year 1922-1924, and after having satisfied the aforesaid money judgment, he also continued in possession of the plantation long enough to appropriate to himself the following ratoon cane crop.The present action was brought on April 13, 1925, but the last amended complaint, setting forth three causes of action, was not filed until June 17, 1927. As her first cause of action the plaintiff, after a preliminary statement of the origin of the controversy, alleges that while case G. R. No. 21706 was on appeal to the Supreme Court, the defendant knew positively that the aforesaid lease was declared rescinded by the Court of First Instance on September 8, 1923, and that he, the defendant, also knew that he thereafter was not entitled to the possession of the aforesaid hacienda; that he, nevertheless, in bad faith continued in such possession during the agricultural year 1922-1924 and appropriated to himself the cane harvest for that year, which after deducting the share of the sugar central, produced 1,679.02 piculs for his own benefit, which sugar was sold by him for the sum of P13 a picul; that the plaintiff has demanded payment to her of the total value of said 1,679.02 piculs, amounting to P21,827.26, but that the defendant refuses to pay. The plaintiff, therefore, asks judgment for the sum of P21,827.26 upon the first cause of action.For the second cause of action the plaintiff alleges that under the contract of lease of the Tacgajan Hacienda, one of the obligations assumed by the defendant was that he would use the care of a good father of the family in conserving the tools, agricultural implements, draft animals, and other effects enumerated in an inventory made at the time the defendant entered in possession under the lease; that he was further obligated to return said property to the plaintiff, but that he return said property to the plaintiff, but that he returned only a part that he returned only a part thereof and failed to returned only a part thereof and failed to return 4 carabaos, 4 vacunos, 1 corn mill, 4 wagons, 106 steel rails, 14 plows, 1 table, 1 scale, an 1 telephone, the total value of the property enumerated being P3,596 for which amount, plus P500 in damages, the plaintiff asks judgment under her second cause of action.As a third cause of action the plaintiff alleges that the harvest of sugar cane illegally made by the defendant in 1924 left ratoon sugar cane in the fields of the hacienda, which sugar can was the property of the plaintiff, and that during the year 1925, the defendant illegally harvested said ratoon cane together with some recently planted cane, which harvested after deducting the share of the sugar central, produced 1,613.25 piculs of sugar, which the defendant sold for his own benefit at the price of P13 per picul, the total amount received by him being P20,962.25 for which the plaintiff demands judgment.In his answer to the first and third causes of action, the defendants alleges that according to the pleadings in case G. R. No. 21706, the two causes of action were included in that case and, therefore, must be considered res adjudicata. In regard to the second cause of action the defendant pleads the general issue and sets up as a special defense that assuming that the property referred to in said cause of action was missing, it loss was due to its total extinction by ordinary use, for which the defendant could not be held responsible. For all three causes of action, the defendant sets up as a special defense the document executed by the plaintiff on September 30, 1924, acknowledging the satisfaction of the judgment in case G. R. No. 21706.Upon trial the Court of First Instance sustained the defendant's special defense and absolved him from the complaint with the cost against the plaintiff, whereupon the latter appealed to this court.We do not think that the court below erred in absolving the defendant from liability upon the second cause of action. It is not without significance that in her original complaint the plaintiff claimed only 5 plows, 6 carts, 3 carabaos an 4 vacunos, the total value of which was alleged to be P1,360; in the first amended complaint filed over two years later, the same claim was made, but in the last amended complaint a number of other articles were included, thus increasing the claim to P3,596. The court below found that the weight of the evidence showed that the missing draft animals died from rinderpest and that the other personal property was turned over to the provincial sheriff for delivery to the plaintiff before the writ of execution was returned to the court. If so, the action would lie against the sheriff rather than against the defendant.As to the first cause of action the defendant argues that it was included in the prayer of an amended complaint filed in case G. R. No. 21706 and that, although no express determination thereof was made in the decision of the case, it must, nevertheless, be regarded as res judicata. That such is not the case is very clear. The Code of Civil Procedure says:That only is deemed to have been so adjudged in a former judgment which appears upon its face to have been so adjudged, or which was actually and necessarily included therein or necessary thereto. (Sec. 307, Code of Civil Proc.)But the defendant maintains that the plaintiff having had an opportunity to ventilate the matter in the former case, she cannot now enforce the same cause of action in the present case. Properly speaking, this argument does not involve the doctrine of res judicata but rests on the well-known an, in American law, firmly established principle that a party will not be permitted to split up a single cause of action an make it the basis for several suits. But that is not this case. The rule is well established that when a lease provides for the payment of the rent in separate installments, each installment is an independent cause of action, though it has been held and is good law, that in an action upon such a lease for the recovery of rent, the installments due at the time the action brought must be included in the complaint an that failure to o so will constitute a bar to a subsequent action for the payment of that rent. The aforesaid action, G. R. No. 21706, was brought on August 23, 1922, the plaintiff demanding payment of then sue rent in addition to the rescission of the lease. On July 27, 1923, the plaintiff filed a motion for an amendment to paragraph 6 of the complaint adding to that paragraph the following sentence:Que tambien ha vencido ya el tercer ano el arrendamiento de la finca en cuestion y que tampoco ha pagado el demandao el canon correspondiente a icho ano.The plaintiff also amended the prayer of the complaint by asking judgment for rent for years subsequent to 1922. The motion was granted, and the case came up for trial on July 30, 1923, and on September 8, 1923, the trial court rendered its decision giving judgment for rent up to and including the rent for the agricultural year ending in 1923. The lease did not provide for payment of rent in advance or at any definite time, an it appears plainly from the record that the rent for an agricultural year was not considered due until the end of the corresponding year. It follows that the rent for the agricultural year 1922-1924 ha not become sue time of the trial of the case and that consequently the trial court could not render judgment therefore. The action referred to is, therefore, no bar to the first cause of action in the present litigation.The defendant places much weigh upon the document of September 30, 1924, hereinbefore quoted. The document speaks for itself, and it will be readily seen that it is merely a receipt for the satisfaction of the money judgment in the case G. R. No. L-21706 and has nothing to with the present case.The only question in regard to the first cause of action relates to the amount of the damages. The plaintiff contends that the defendant was a possessor in bad faith, and therefore, must pay the value of the fruits of the land in accordance with article 455 of the Civil Code. Under the circumstances of the case, we cannot so hold. The defendant held possession under the contract of lease until said contract was rescinded. The contract contained no special provision for the procedure in effecting the rescission, and it follows that it could only be accompanied by a final judgment of the court. The judgment in case G. R. No. L-210706 did not become final until March 27, 192, when our decision on appeal was rendered. As that must have been close to the end of the harvest and milling of the sugar crop for the period to which the first cause of action refers, we do not think that the defendant should be required to pay more than the amount of the stipulated rent for the period, i. e., the sum of P8,000 with interest rent for that period, i. e., the sum of P8,000 with interest. (Lerma vs. De la Cruz, 7 Phil., 581.)The action for terminating the lease was brought under article 1124 of the Civil Code, an it may, perhaps, he said that properly speaking, the subject matter of the action was a resolution of the contract an not a rescission. That may be true, but it is a distinction without a difference; in their case a judicial declaration would be necessary for the cancellation of the contract in the absence of a special agreement.Very little need be said in regard to the third cause of action. It relates to a period subsequent to the complete termination of the lease by final judicial order. The defendant had then no right whatever to the possession of the land or to the fruits thereof, and in removing the fruits, he acted in bad faith. This being the case, he must pay for the fruits received by him, less the necessary expenses of production. (Arts. 455 and 453 of the Civil Code.) As his bad faith commence long before the fruits in question were produced, he is not entitled to any part of the net proceeds of the crop. The evidence shows that the net ratoon crop of the year 1924-1925 was 1,613.25 piculs of sugar, and according to the defendant's own statement, the market value of the sugar was in the neighborhood of P11 per picul an the costs of production about P4.50. The net result is that under the third cause of action, the defendant must pay to the plaintiff the sum of P10,486.13 with interest.For the reason stated, the judgment of the court below is affirmed in regard to the second cause of action. It is reversed as to the first and third causes of action, and it is hereby ordered that the plaintiff have and recover from the defendant the sum of P18,486.13 with interest at the rate of 6 per cent per annum from April 13, 1925, the date of the filing of the complaint. No costs will be allowed. So ordered.Avancea, C. J., Johnson Street, Malcolm, Villamor, Romualdez, an Villa-Real, JJ., concur.ORDER AMENDING DECISIONDecember 10, 1928OSTRAND, J.:In the motion filed by the defendant on November 14, 1928 our attention is called to a mathematical error in that we, in discussing the plaintiff's third cause of action, failed to take into consideration the fact that one-half of the gross ratoon crop produced on the land in question in the agricultural year 1924-1925 was ceded to the sugar central as compensation for the milling of the cane and that the defendant paid the expenses of the production of the total or gross crop. Page 8 of the aforesaid decision is therefore amended so as to read as follows:Very little need be said in regard to the third cause of action. It relates to a period subsequent to complete termination of the lease by final judicial order. The defendant had then no right whatever to the possession of the land or to the fruits thereof, and in removing the fruits, he acted in bad faith. This being the case, he must pay for the fruits received by him, less the necessary expenses of production (Arts. 455 and 453 of the Civil Code.) As his bad faith commenced long before the fruits in question were produced, he is not entitled to any part of the net proceeds of the crop. The evidence shows that the gross ratoon crop for the year 1924-1925 was 3,226.50 piculs of sugar, and according to the defendant's own statement, the market value of the sugar was in the neighborhood of P11 per picul and the cost of production about P4.50. The defendant received only one-half of the gross crop, the other half going to the sugar central as compensation for the milling of the cane, but the defendant paid the cost of production both of his share of the sugar and that of the sugar central. The net result is that under the third cause of action, the defendant must pay to the plaintiff the sum of P3,226.50 with interest."For the reasons stated, the judgment of the court below is affirmed in regard to the second cause of action. It is reversed as to the first an third causes of action, an it is hereby ordered that the plaintiff have and recover from the defendant the sum of P11,226.50 with interest at the rate of 6 per cent per annum from April 13, 1925, the date of the filing of the complaint. No costs will be allowed." So ordered.Avancea, C. J., Johnson, Street, Malcolm, Villamor, Romualdez, and Villa-Real, JJ., concur.

G.R. No. L-32958 November 8, 1930BLOSSOM AND COMPANY, INC., plaintiff-appellant, vs.MANILA GAS CORPORATION, defendant-appellee.Harvey and O'Brien for appellant.Ross, Lawrence and Selph and John B. Miller for appellee.

STATEMENTIn its complaint filed March 3, 1927, the plaintiff alleges that on September 10, 1918, it entered into a contract with the defendant in which the plaintiff promised and undertook to purchase and receive from the defendant and the defendant agreed to sell and deliver to the plaintiff, for a period of four years, three tons of water gas tar per month from September to January 1, 1919 and twenty tons per month after January 1, 1919, for the remaining period of the contract; one-half ton of coal gas tar a month from September to January 1, 1919, and six tons per month after January 1, 1919, for the remainder of the contract, delivery to be made at the plant of the defendant in the City of Manila, without containers and at the price of P65 per ton for each kind of gas tar, it being agreed that this price should prevail only so long as the raw materials coal and crude oil used by the defendant in the manufacture of gas should cost the defendant the same price as that prevailing at the time of the contract, and that in the event of an increase or decrease in the cost of raw material there would be a corresponding increase or decrease in the price of the tar. That on January 31, 1919, this contract was amended so that it should continue to remain in force for a period of ten years from January 1, 1919, and it was agreed that the plaintiff should not be obliged to take the qualities of the tars required during the year 1919, but that it might purchase tars in such quantities as it could use to advantage at the stipulated price. That after the year 1919 the plaintiff would take at least the quantities specified in the contract of September 10, 1918, to be taken from and after January 1, 1919, and that at its option it would have the right to take any quantity of water gas tar in excess of the minimum quantity specified in that contract and up to the total amount of output of that tar of defendant's plant and also to take any quantity of coal gas tar in excess of the minimum quantity specified in that contract and up to 50 per cent of defendant's entire output of coal gas tar, and that by giving the defendant ninety days' notice, it would have the right at its option to take the entire output of defendant's coal gas tar, except such as it might need for its own use in and about its plant. That in consideration of this modification of the contract of September 10, 1918, plaintiff agreed to purchase from the defendant of certain piece of land lying adjacent to its plant at the price of P5 per square meter, the proof of which is evidenced by Exhibit C. That pursuant to Exhibit C, defendant sold and conveyed the land to the plaintiff which in turn executed a mortgage thereon to the defendant for P17,140.20, to secure the payment of the balance of the purchase price.It is then alleged:VIII. That about the last part of July, 1920 the defendant herein, the Manila Gas Corporation willfully, and deliberately breached its said contract, Exhibit C, with the plaintiff by ceasing to deliver any coal and water gas tar to it thereunder solely because of the increased price of its tar products and its desire to secure better prices therefor than plaintiff was obliged to pay to it, notwithstanding the frequent and urgent demands made by the plaintiff upon it to comply with its aforesaid contract by continuing to deliver the coal and water gas tar to the plaintiff thereunder, but the said defendant flatly refused to make any deliveries under said contract, and finally on November 23, 1923, the plaintiff was forced to commence action against the defendant herein in the Court of First Instance of Manila, being case No. 25352, of that court entitled 'Blossom & Co., plaintiff, vs. Manila Gas Corporation, defendant,' to recover the damages which it had up to that time suffered by reason of such flagrant violation of said contract on the part of the defendant herein, and to obtain the specific performance of the said contract and after due trial of that action, judgment was entered therein in favor of the plaintiff herein and against the said defendant, the Manila Gas Corporation, for the sum of P26,119.08, as the damages suffered by this plaintiff by the defendant's breach of said contract from July, 1920, up to and including September, 1923, with legal interest thereon from November 23, 1923, and for the costs but the court refused to order the said defendant to resume the delivery of the coal and water gas tar to the plaintiff under said contract, but left the plaintiff with its remedy for damages against said defendant for the subsequent breaches of said contract, which said decision, as shown by the copy attached hereto as Exhibit G, and made a part hereof, was affirmed by our Supreme Court on March 3, 1926;IX. That after the defendant had willfully and deliberately violated its said contract as herein-before alleged, and the plaintiff suffered great damage by reason thereof, the plaintiff claimed the right to off- set its damages against the balance due from it to said defendant on account of the purchase of said land from the defendant, and immediately thereupon and notwithstanding said defendant was justly indebted to the plaintiff at that time as shown by the judgment of the Court Exhibit G, in more that four times the amount due to it from the plaintiff, the said defendant caused to be presented against the plaintiff a foreclosure action, known as the Manila Gas Corporation versus Blossom & Company, No. 24267, of the Court of First Instance of Manila, and obtained judgment therein ordering that Blossom & Company pay the last installment and interest due on said land or else the land and improvements placed thereon by the plaintiff would be sold as provided by law in such cases to satisfy the same, and the said defendant proceeded with the sale of said property under said judgment and did everything in its power to sell the same for the sole purpose of crushing and destroying the plaintiff's business and thus rendering it impossible for the plaintiff herein to continue with its said contract in the event that said defendant might in the future consider it more profitable to resume performance of the same, but fortunately the plaintiff was able to redeem its property as well as to comply with its contract and continued demanding that the defendant performed its said contract and deliver to it the coal and water gas tar required thereby.That the defendant made no deliveries under its contract, Exhibit C, from July, 1920 to March 26, 1926, or until after the Supreme Court affirmed the judgment of the lower court for damages in the sum of P26, 119.08. 1It is then alleged that:. . . On March 26, 1926 the said defendant offered to resume delivery to the plaintiff from that date of the minimum monthly quantities of tars stated in its contract ,and the plaintiff believing that the said defendant was at least going to try to act in good faith in the further performance of its said contract, commenced to accept deliveries of said tars from it, and at once ascertained that the said defendant was deliberately charging it prices much higher than the contract price, and while the plaintiff accepted deliveries of the minimum quantities of tars stated in said contract up to and including January, 1927, (although it had demanded deliveries of larger quantities thereunder, as hereinafter alleged) and paid the increased prices demanded by the defendant, in the belief that it was its duty to minimize the damages as much as possible which the defendant would be required to pay to it by reason of its violation of said contract, it has in all cases done so under protest and with the express reservation of the right to demand from the said defendant an adjustment of the prices charged in violation of its contract, and the right to the payment of the losses which it had and would suffer by reason of its refusal to make additional deliveries under said contract, and it also has continuously demanded that the said defendant furnish to it statements supported by its invoices showing the cost prices if its raw materials coal and crude oil upon which the contract price of the tars in question is fixed, which is the only way the plaintiff has to calculate the true price of said tars, but said defendant has and still refuses to furnish such information, and will continue to refuse to do so, unless ordered to furnish such information to the plaintiff by the court, and the plaintiff believes from the information which it now has and so alleges that the said defendant has overcharged it on the deliveries of said tars mentioned in the sum of at least P10,000, all in violation of the rights of the plaintiff under its said contract with the defendant.That on January 31, 1926 and pursuant to Exhibit C. plaintiff notified the defendant in writing that commencing with the month of August, 1926 it desired to take delivery of 50 per cent of defendant's coal tar production for that month and that on November 1, 1926, it desired to take the entire output of defendant's coal gas tar, but that the defendant refused and still refuses to make such deliveries unless plaintiff would take all of its water gas tar production with the desired quantity of coal gas tar which refusal was a plain violation of the contract. That on January 29, 1927, and in accord with Exhibit C, plaintiff notified the defendant in writing that within ninety days after the initial delivery to it of its total coal gas tar production or in February, 1927, it would require 50 per cent of its total water gas tar production and that in April 1927, it would require the total output of the defendant of both coal and water gas tars, and that it refused to make either of such deliveries.It is then alleged:XIV. That as shown by the foregoing allegations of this complaint, it is apparent that notwithstanding the plaintiff in this case has at all times faithfully performed all the terms and conditions of said contract, Exhibit C, on its part of be performed, and has at all times and is now ready, able and willing to accept and pay for the deliveries of said coal and water gas tars required by said contract and the notices given pursuant thereto, the said defendant, the Manila Gas Corporation, does not intend to comply with its said contract, Exhibit C, and deliver to the plaintiff at the times and under the terms and conditions stated therein the quantities of coal and water gas tars required by said contract, and the several notices given pursuant thereto, and that it is useless for the plaintiff to insist further upon its performance of the said contract, and for that reason he only feasible course for the plaintiff to pursue is to ask the court for the rescission of said contract and for the full damages which the plaintiff has suffered from September, 1923, and will suffer for the remainder of said contract by reason of the defendant's failure and refusal to perform the same, and the plaintiff has so notified the said defendant.That since September, 1923, by reason of the bad faith of the defendant, the plaintiff has been damaged in the sum of P300,000, for which it prays a corresponding judgment, and that the contract, Exhibit C, be rescinded and declared void and without force and effect.After the filing and overruling of its demurrer, the defendant filed an answer in the nature of a general and specific denial and on April 10, 1928, and upon stipulation of the parties, the court appointed W. W. Larkin referee, "to take the evidence and, upon completion of the trial, to report his findings of law and fact to the court."July 18, 1928, the defendant filed an amended answer in which it alleged as an affirmative defense, first, that the complaint does not state facts sufficient to constitute cause of action the reason that a prior adjudication has been had of all the issues involved in this action, and, second, "that on or about the 16th day of June, 1925, in an action brought in the Court of First Instance of the City on Manila, Philippine Islands, before the Honorable Geo. R. Harvey, Judge, by Blossom & Company, plaintiff, vs. Manila Gas Corporation, defendant, being civil case No. 25353, of said court, for the same cause of action as that set fourth in the complaint herein, said plaintiff recovered judgment upon the merits thereof, against said defendant decreeing a breach of the contract sued upon herein, and awarding damages therefor in the sum of P26,119.08 with legal interest from November 23, 1923, and costs of suit, which judgment was upon appeal affirmed by the Supreme Court of the Philippine Islands, in case G. R. No. 24777 of said court, on the 3d day of March, 1926 and reported in volume 48 Philippines Reports at page 848," and it prays that plaintiff's complaint be dismissed with costs.After the evidence was taken the referee made an exhaustive report of sixty-pages in which he found that the plaintiff was entitled to P56,901.53 damages, with legal interest from the date of the filing on the complaint, to which both parties filed numerous exceptionsIn its decision the court says:Incidental references have been made to the referee's report. It was admirably prepared. Leaving aside the question of damages and the facts upon which the referee assessed them, the facts are not in dispute at least not in serious dispute. They appear in the documentary evidence and this decision is based upon documents introduced into evidence by plaintiff. If I could have agreed with the referee in respect to the question of law, I should have approved his report in toto. If defendant is liable for the damages accruing from November 23, 1923, the date the first complaint was filed, to April 1st, 1926, the date of resumption of relations; and if defendant, after such resumption of relations, again violated the contract, the damages assessed by the referee, are, to my way of thinking, as fair as could be estimated. He went to tremendous pains in figuring out the details upon which he based his decision. Unfortunately, I cannot agree with his legal conclusions and the report is set aside except wherein specifically approved.It is unnecessary to resolve specifically the many exceptions made by both partied to the referee's report. It would take much time to do so. Much time has already been spent in preparing this decision. Since both parties have informed me that in case of adverse judgment ,and appeal would be taken, I desire to conclude the case so that delay will be avoided.Let judgment be entered awarding damages to plaintiff in the sum of P2,219.60, with costs.From which plaintiff only appealed and assigns twenty-four different errors, of which the following are material to this opinion:I. The trial court erred in holding that this suit in so far as the damages from November, 1923, to March 31, 1926, are concerned , is res adjudicata.II. The trial court erred in holding that the defendant repudiated the contract in question as a whole, and that the plaintiff when it brought its first suit to collect damages had already elected and consented to the dissolution of the contract, and its choice once made, being final, it was estopped to claim that the contract was alive when that suit was brought.x x x x x x x x xVII. The trial court erred in refusing to sustain plaintiff's third exception to the legal interpretation placed on the contract in this case by the referee with reference to quantity of tars and his conclusion with respect to the terms thereof that:"1. Plaintiff must take and defendant must deliver either the minimum or maximum quantity of water gas tar and not any quantity from the minimum to the maximum and/or"2. Plaintiff must take either the minimum and any quantity up to fifty per cent of entire output of coal gas tar."3. With ninety days' notice by plaintiff to defendant the former must take and the latter must deliver total output of both tars, except such as might be needed by defendant for use in and about its plants and not any quantity from the minimum up to total output of both tars." (See page 47, Referee's report.)And in holding that the option contained in said contract, taking into consideration the purposes of both parties in entering into the contract, was a claimed by defendant: all the water gas tar and 50 per cent of the coal gas tar upon immediate notice and all tars upon ninety day's notice.VIII. The trial court erred in refusing to sustain plaintiff's fourth exception to the finding and conclusion of the referee that from the correspondence between the parties it was apparent that plaintiff did not make a right use of its option, and that the letter of June 25, 1926, and the subsequent demands, with exception of the letter of July 31, 1926, were not made in pursuance to the terms of the contract, and that defendant had no liability in refusing to comply therewith, and in allowing plaintiff damages only for the failure of the defendant to deliver quantities shown in Exhibits Ref. 21 and 22. (See pages 51, 52, Referee's report.)IX. The trial court erred in finding and holding that the demands of plaintiff for additional tars under its contract with the defendant were extravagant and not made in good faith, and that when it wrote to defendant that it desired maximum quantities of coal gas tars and only minimum of water gas tars, but with the reservation of going back to minimum quantities of both at any time it chose, it announced its intention f breaching the contract, and defendant was under no obligation to deliver maximum quantities of either tars, and since this was the efficient cause of the failure of defendant to deliver or plaintiff to accept tars, the blame is attribute to plaintiff, and it cannot recover for a rescission.x x x x x x x x xXXIII. The trial court erred in refusing to sustain plaintiff's seventeenth exception to the finding and conclusion of the referee that the plaintiff is entitled to recover from the defendant only the following sums:Water gas tar (Exhibit Ref. 21)P38,134.60

Coal gas tar (Exhibit Ref. 22)16,547.33

Overcharges on deliveries (Exhibit Ref. 23)2,219.60

or a total of56,901.53

with interest, and in not awarding to the plaintiff as damages in this case the sum of P319,253.40, with legal interest thereon from the date of filing the complaint in this case, in the manner and form computed but it, and in awarding damages to the plaintiff for the sum of only P2,219.60. with costs.x x x x x x x x xJOHNS, J.:In this action plaintiff seeks to recover damages from the defendant which it claims to have sustained after September, 1923, arising from, and growing out of, its original contract of September 10, 1918, as modified on January 1, 1919, to continue for a period of ten years from that date.In paragraph VIII of its complaint, plaintiff alleges that about the last part of July, 1920, the defendant "willfully and deliberately breached its said contract," and that it "flatly refused to make any deliveries under said contract, and finally on November 23, 1923," it was forced to commence action in the Court of First Instance against the defendant known as case No. 25352, to recover the damages which it had then sustained by reason of such flagrant violation of said contract on the part of the defendant, in which judgment was rendered in favor of the plaintiff and against the defendant for P26,1119.08, as damages suffered by this plaintiff by the defendant's breach of said contract from July 1920, up to and including September, 1923, with legal interest thereon from November 23, 1923, and for the costs," in which the court refused to order the defendant to resume the delivery of the coal and water gas tar to the plaintiff, in accord with said contract, but left it with its remedy for damages against the defendant for any subsequent breaches of the contract. A copy of that judgment, which was later affirmed by this court, is attached to, marked Exhibit G, and made a part of, the complaint in this action.In their respective briefs, opposing counsel have much to say about the purpose and intent of the judgment, and it is vigorously asserted that it was never intended that it should be or become a bar to another action by the plaintiff to recover any damages it may have sustained after September, 1923, during the remainder of the ten-year period of that contract. Be that as it may, it must be conceded that the question as to what would be the legal force and effect of that judgment in that case was never presented to, or decided by, the lower court or this court. In the very nature of things, neither court in that case would have the power to pass upon or decided the legal force and effect of its own judgment, for the simple reason that it would be premature and outside of the issues of any pleading, and could not be raised or presented until after the judgment became final and then only by an appropriate plea, as in this case.Plaintiff specifically alleges that the defendant willfully and deliverately breached the contract and "flatly refused to make any deliveries under said contract," by reason of. which it was forced to and commenced its former action in which it was awarded P26,119.08 damages against the defendant by reason of its breach of the contract from July, 1920, to September, 1923.In the final analysis, plaintiff in this action seeks to recover damages growing out of, and arising from, other and different breaches of that same contract after November, 1923, for the remainder of the ten-year period, and the question is thus squarely presented as to whether the rendition of the former judgment is a bar to the right of the plaintiff to recover damages from and after September, 1923, arising from, and growing out of, breaches of the original contract of September 10, 1918, as modified on January 1, 1919. That is to say, whether the plaintiff, in a former action, having recovered judgment for the damages which it sustained by reason of a breach of its contract by the defendant up to September, 1923, can now in this action recover damages it may have sustained after September, 1923, arising from, and growing out of, a breach of the same contract, upon and for which it recovered its judgment in the former action.In the former action in which the judgment was rendered, it is alleged in the compliant:"7. That about the last part of July or the first part of August, 1920, the Manila Gas Corporation, the defendant herein, without any cause ceased delivering coal and water gas tar to the plaintiff herein; and that from that time up to the present date, the plaintiff corporation, Blossom & Company, has frequently and urgently demanded of the defendant, the Manila Gas Corporation, that it comply with its aforesaid contract Exhibit A by continuing to deliver coal and water gas tar to this plaintiff but that the said defendant has refused and still refuses, to deliver to the plaintiff any coal and water gas tar whatsoever under the said contract Exhibit A, since the said month of July 1920."9. That owing to the bad faith of the said Manila Gas Corporation, defendant herein, in not living up to its said contract Exhibit A, made with this plaintiff, and refusing now to carry out the terms of the same, be delivering to this plaintiff the coal and water gas tar mentioned in the said Exhibit A, has caused to this plaintiff great and irreparable damages amounting to the sum total of one hundred twenty- four thousand eight hundred forty eight pesos and seventy centavos (P124,848,70);and that the said defendant corporation has refused, and still refuses, to pay to this plaintiff the whole or any part of the aforesaid sum."10. That the said contract Exhibit A, was to be in force until January 1, 1929, that is to say ten (10) years counted from January 1, 1929; and that unless the defendant again commence to furnish and supply this plaintiff with coal and water gas tar, as provided for in the said contract Exhibit A, the damages already suffered by this plaintiff will continually increase and become larger and larger in the course of years preceding the termination of the said contract on January 1, 1929."In that action plaintiff prays for judgment against the defendant:"(a) That upon trial of this this cause judgment be rendered in favor of the plaintiff and against the defendant for the sum of P124,8484.70), with legal interest thereon from November 23, 1923;"(b) That the court specifically order the defendant to resume the delivery of the coal and water gas tar to the plaintiff under the terms of the said contract Exhibit A of this complaint."In the final analysis, plaintiff must stand or fall on its own pleadings, and tested by that rule it must be admitted that the plaintiff's original cause of action, in which it recovered judgment for damages, was founded on the ten-year contract, and that the damages which it then recovered were recovered for a breach of that contract.Both actions are founded on one and the same contract. By the terms of the original contract of September 10, 1018, the defendant was to sell and the plaintiff was to purchase three tons of water gas tar per month form September to January 1, 1919, and twenty tons of water gas tar per month after January 1, 1919, one-half ton of coal gas tar per month from September to January 1, 1919, and six tons of coal gas tar per month after January 1, 1919. That from and after January 1, 1919, plaintiff would take at least the quantities specified in the contract of September 10, 1918, and that at its option, it would have the right to take the total output of water gas tar of defendant's plant and 50 per cent of the gross output of its coal gas tar, and upon giving ninety days' notice, it would have the right to the entire output of coal gas tar, except such as the defendant might need for its own use. That is to say, the contract provided for the delivery to the plaintiff from month to month of the specified amounts of the different tars as ordered and requested by the plaintiff. In other words, under plaintiff's own theory, the defendant was to make deliveries from month to month of the tars during the period of ten years, and it is alleged in both complaints that the defendant broke its contract, and in bad faith refused to make any more deliveries.In 34 Corpus Juris, p. 839, it is said:As a general rule a contract to do several things at several times in its nature, so as to authorize successive actions; and a judgment recovered for a single breach of a continuing contract or covenant is no bar to a suit for a subsequent breach thereof. But where the covenant or contract is entire, and the breach total, there can be only one action, and plaintiff must therein recover all his damages.In the case of Rhoelm vs, Horst, 178 U. U., 1; 44 Law. ed., 953, that court said:An unqualified and positive refusal to perform a contract, though the performance thereof is not yet due, may, if the renunciation goes to the whole contract, be treated as a complete breach which will entitle the injured party to bring his action at once.15 Ruling Case Law, 966, 967, sec. 441 says:Similarly if there is a breach by the vendor of a contract for the sale of goods to be delivered and paid for in installments, and the vendee maintains an action therefor and recovers damages, he cannot maintain a subsequent action to recover for the failure to deliver later installments.In Pakas vs. Hollingshead, 184 N. Y., 211; 77 N. E., 40; 3 L. R. A. (N. S.), 1024, the syllabus says:Upon refusal, by the seller, after partial performance, longer to comply with his contract to sell and deliver a quantity of articles in installments the buyer cannot keep the contract in force and maintain actions for breaches as they occur but must recover all his damages in one suit.And on page 1044 of its opinion, the court say:The learned counsel for the plaintiff contends that the former judgment did not constitute a bar to the present action but that the plaintiff had the right to elect to waive or disregard the breach, keep the contract in force, and maintain successive actions for time to time as the installments of goods were to be delivered, however numerous these actions might be. It is said that this contention is supported in reason and justice, and has the sanction of authority at least in other jurisdictions. We do not think that the contention can be maintained. There is not as it seems to us any judicial authority in this state that gives it any substantial support. On the contrary, we think that the cases, so far as we have been able to examine them, are all the other way, and are to the effect that, inasmuch as there was a total breach of the contract by the defendant's refusal to deliver, the plaintiff cannot split up his demand and maintain successive actions, but must either recover all his damages in the first suit or wait until the contract matured or the time for the delivery of all the goods had arrived. In other words, there can be but one action for damages for a total breach of an entire contract to deliver goods, and the fact that they were to be delivered in installment from time to time does not change the general rule.The case of L. Bucki & Son Lumber Co. vs. Atlantic Lumber Co. (109 Federal, 411), of the United States Circuit Court of Appeals for the Fifth Circuit, is very similar.The syllabus says:1. CONTRACTS CONSTRUCTION ENTIRE CONTRACT. A contract was made for the sale of a large quantity of logs to be delivered in monthly installments during a period of eight years, payments to be made also in installments at times having relation tot he deliveries. It contained stipulations as to such payments, and guaranties as to the average size of the logs to be delivered in each installment. Held, that it was an entire contract, and not a number of separate and independent agreements for the sale of the quantity to be delivered and paid for each month, although there might be breaches of the minor stipulations and warranties with reference thereto which would warrant suits without a termination of the contract.2. JUDGMENTS MATTERS CONCLUDED ACTION FOR BREACH OF INDIVISIBLE CONTRACT. The seller declared the contract terminated for alleged breaches by the purchaser, and brought suit for general and special damages the latter covering payments due for installments of logs delivered. By way of set-off and recoupment against this demand, the purchaser pleaded breaches of the warranty as to the size of the logs delivered during the months for which payment had not been made. Held, that the judgment in such action was conclusive as to all claims or demands or either party against the other growing out of the entire contract, and was a bar to a subsequent suit brought by the purchaser to recover for other breaches of the same warranty in relation to deliveries made in previous months.On page 415 of the opinion, the court says:When the contract was ended, the claims of each party for alleged breaches and damages therefor constituted an indivisible demand; and when the same, or any part of the same, was pleaded, litigation had, and final judgment rendered, such suit and judgment constitute a bar to subsequent demands which were or might have been litigated (Baird vs. U. S., 96 U. S., 430; 24 L. ed., 703.)In Watts vs. Weston (238 Federal, 149), Circuit Court of Appeals, Second Circuit, the syllabus says:1. JUDGMENTS 593 JUDGMENT AS BAR MATTERS CONCLUDED. Where a continuing contract was terminated by the absolute refusal of the party whose action was necessary to further perform, a claim for damages on account of the breach constituted as indivisible demand, and when the same or any part of the same was pleaded, litigated, and final judgment rendered, such suit and judgment constitute a bar to subsequent demands which were or might have been litigated therein.And on page 150 of the opinion, the court says:It is enough to show the lack of merit in the present contention to point out as an inexorable rule of law that, when Kneval's contract was discharged by his total repudiation thereof, Watt's claims for breaches and damages therefor constituted an indivisible demand, and when the same, or any part of the same, was pleaded, litigation had and final judgment rendered, such suit and judgment constitute a bar to subsequent demands which were or might have been litigated." (Bucki, etc., Co. vs. Atlantic, etc., Co., 109 Fed. at page 415; 48 C. C. A., 459; Cf. Landon vs. Bulkley, 95 Fed., 344; 337 C. C. A., 96.)The rule is usually applied in cases of alleged or supposed successive breaches, and consequently severable demands for damages; but if the contract has been discharged by breach, if suit for damages is all that is left, the rule is applicable, and every demand arising form that contract and possessed by any given plaintiff must be presented (at least as against any given defendant) in one action; what the plaintiff does not advance he foregoes by conclusive presumption.Inn Abbott vs. 76 Land and Water Co. (118 Pac., 425; 161 Cal., 42), at page 428, the court said:In Fish vs. Folley, 6 Hill (N. Y.), 54, it was held, in accord with the rule we have discussed, that, where the defendant had covenanted that plaintiff should have a continual supply of water for his mill from a dam, and subsequently totally failed to perform for nine years, and plaintiff brought an action for the breach and recovered damages sustained by him to that time, the judgment was a bar to a second action arising from subsequent failure to perform, on the theory that, although he covenant was a continuing one in one sense, it was an entire contract, and a total breach put an end to it, and gave plaintiff the right to sue for an equivalent in damages.In such a case it is no warrant for a second action that the party may not be able to actually prove in the first action all the items of the demand, or that all the damage may not then have been actually suffered. He is bound to prove in the first action not only such damages as has been actually suffered, but also such prospective damage by reason of the breach as he may be legally entitled to, for the judgment he recovers in such action will be a conclusive adjudication as to the total damage on account of the breach.It will thus be seen that, where there is a complete and total breach of a continuous contract for a term of years, the recovery of a judgment for damages by reason of the breach is a bar to another action on the same contract for and on account of the continuous breach.In the final analysis is, there is no real dispute about any material fact, and the important and decisive question is the legal construction of the pleadings in the former case and in this case, and of the contract between the plaintiff and the defendant of January 1, 1920.The complaint on the former case specifically alleges that the defendant "has refused and still refuses, to deliver to the plaintiff any coal and water gas tar whatsoever under the said contract Exhibit A, since the said month of July, 1920." " That owing to the bad faith of the said Manila Gas Corporation, defendant herein, in not living up to its said contract Exhibit A, made with this plaintiff, and refusing now to carry out the terms of the same." That is a specific allegation not only a breach of the contract since the month of July, 1920, but of the faith of the defendant in its continuous refusal to make deliveries of any coal and water gas tar. That amended complaint was filed on July 11, 1924, or four years after the alleged bad faith in breaking the contract.Having recovered damages against it, covering a period of four years, upon the theory that the defendant broke the contract, and in bad faith refused to make deliveries of either of the tars, how can the plaintiff now claim and assert that the contract is still in fierce and effect? In the instant case the plaintiff alleges and relies upon the ten year contract on January 11, 1920, which in bad faith was broken by the defendant. If the contract was then broken, how can it be enforced in this action?It is admitted that the defendant never made any deliveries of any tar from July, 1920, to April, 1936. Also that it made nine deliveries to plaintiff of the minimum quantities of coal and water gas tar from April 7, 1926, to January 5, 1927.Plaintiff contends that such deliveries were made under and in continuation of the old contract.March 26, 1926, after the decision of this court affirming the judgment in the original action, plaintiff wrote the defendant:. . . It is our desire to take deliveries of at least the minimum quantities set forth therein and shall appreciate to have you advise us how soon you will be in a position to make deliveries; . . .. . . In view of the fact that you have only effected settlement up to November 23, 1923, please inform us what adjustment you are willing to make for the period of time that has since elapsed without your complying with the contract.In response to which on March 31, 1926, the defendant wrote this letter to the plaintiff:In reply to your letter of March 26th, 1926, in regard to tar, we beg to advise you that we are prepared to furnish the minimum quantities of coal and water gas tars as per your letter, viz: twenty tons of water gas tar and six tons of coal gas tar. The price figured on present costs of raw materials is P39.01 ) Thirty-nine and 01/100 Pesos) per ton of water gas and P33.59 (Thirty-three and 59/100 Pesos) per ton of coal tar.We shall expect you to take delivery and pay for the above amount of tars at our factory on or before April 7th prox.Thereafter we shall be ready to furnish equal amounts on the first of each month. Kindly make your arrangements accordingly.On January 29, 1927, the plaintiff wrote the defendant that:On July 31st last, we made demand upon you, under the terms of our tar contract for 50 per cent of your total coal tar production for that month and also served notice on you that beginning 90 days from August 1st we would require you total output of coal tar monthly; this in addition to the 20 tons of water gas tar provided for in the contract to be taken monthly.x x x x x x x x xWe are here again on your for your total output of coal tar immediately and the regular minimum monthly quantity of water gas tar. In this connection we desire to advise you that within 90 days of your initial delivery to us of your total coal tar output we will require 50 per cent of your total water gas tar output, and, further, that two months thereafter we will require your total output of both tars.February 2, 1927, the defendant wrote the plaintiff:Replying to your letter of Jan. 29, we would sat that we have already returned to you the check enclosed there with. As we have repeatedly informed you we disagree with you as to the construction of your contract and insist that you take the whole output of both tars if you wish to secure the whole of the coal tar.With regard to your threat of further suits we presume that you will act as advised. If you make it necessary we shall do the same.lawphil.netFrom an analysis of these letters it clearly appears that the plaintiff then sought to reply upon and enforce the contract of January 1, 1920, and that defendant denied plaintiff's construction of the contract, and insisted "that you take the whole output of both tars if you wish to secure the whole of the coal tar."February 28, 1927, the plaintiff wrote the defendant:In view of your numerous violations of and repeated refusal and failure to comply with the terms and provisions of our contract dated January 30-31, 1919, for the delivery to us of water and coal gas tars, etc., we will commence action," which it did.The record tends to show that tars which the defendant delivered after April 7, 1926, were not delivered under the old contract of January 1, 1920, and that at all times since July 1920, the defendant has consistently refused to make any deliveries of any tars under that contract.The referee found as a fact that plaintiff was entitled to P2,219.60 for and on account of overcharges which the defendant made for the deliveries of fifty-four tons of coal gas tar, and one hundred eighty tons of water gas tar after April, 1926, and upon that point the lower says:The fourth charge that plaintiff makes is meritorious. The price was to be fixed on the basis of raw materials. The charge for deliveries during 1926 were too high. In this I agree with entirely with the referee and adopt his findings of fact and calculations. (See Referee's report, p. 83) The referee awarded for overcharge during the period aforesaid, the sum of P2,219.60. The defendant was trying to discharge plaintiff from buying tars and made the price of raw material appear as high as possible.That finding is sustained upon the theory that the defendant broke its contract which it made with the plaintiff for the sale and delivery of the tars on and after April, 1926.After careful study of the many important questions presented on this appeal in the exhaustive brief of the appellant, we are clearly of the opinion that, as found by the lower court, the plea of res judicata must be sustained. The judgment of the lower court is affirmed.It is so ordered, with costs against the appellant.Johnson, Street, Malcolm, Villamor, Ostrand, Romualdez, and Villa-Real, JJ., concur.

[G.R. No. 161135. April 8, 2005]SWAGMAN HOTELS AND TRAVEL, INC., petitioner, vs. HON. COURT OF APPEALS, and NEAL B. CHRISTIAN, respondents.D E C I S I O NDAVIDE, JR., C.J.:

May a complaint that lacks a cause of action at the time it was filed be cured by the accrual of a cause of action during the pendency of the case? This is the basic issue raised in this petition for the Courts consideration.Sometime in 1996 and 1997, petitioner Swagman Hotels and Travel, Inc., through Atty. Leonor L. Infante and Rodney David Hegerty, its president and vice-president, respectively, obtained from private respondent Neal B. Christian loans evidenced by three promissory notes dated 7 August 1996, 14 March 1997, and 14 July 1997. Each of the promissory notes is in the amount of US$50,000 payable after three years from its date with an interest of 15% per annum payable every three months.[1] In a letter dated 16 December 1998, Christian informed the petitioner corporation that he was terminating the loans and demanded from the latter payment in the total amount of US$150,000 plus unpaid interests in the total amount of US$13,500.[2]On 2 February 1999, private respondent Christian filed with the Regional Trial Court of Baguio City, Branch 59, a complaint for a sum of money and damages against the petitioner corporation, Hegerty, and Atty. Infante. The complaint alleged as follows: On 7 August 1996, 14 March 1997, and 14 July 1997, the petitioner, as well as its president and vice-president obtained loans from him in the total amount of US$150,000 payable after three years, with an interest of 15% per annum payable quarterly or every three months. For a while, they paid an interest of 15% per annum every three months in accordance with the three promissory notes. However, starting January 1998 until December 1998, they paid him only an interest of 6% per annum, instead of 15% per annum, in violation of the terms of the three promissory notes. Thus, Christian prayed that the trial court order them to pay him jointly and solidarily the amount of US$150,000 representing the total amount of the loans; US$13,500 representing unpaid interests from January 1998 until December 1998; P100,000 for moral damages; P50,000 for attorneys fees; and the cost of the suit.[3]The petitioner corporation, together with its president and vice-president, filed an Answer raising as defenses lack of cause of action and novation of the principal obligations. According to them, Christian had no cause of action because the three promissory notes were not yet due and demandable. In December 1997, since the petitioner corporation was experiencing huge losses due to the Asian financial crisis, Christian agreed (a) to waive the interest of 15% per annum, and (b) accept payments of the principal loans in installment basis, the amount and period of which would depend on the state of business of the petitioner corporation. Thus, the petitioner paid Christian capital repayment in the amount of US$750 per month from January 1998 until the time the complaint was filed in February 1999. The petitioner and its co-defendants then prayed that the complaint be dismissed and that Christian be ordered to pay P1 million as moral damages; P500,000 as exemplary damages; and P100,000 as attorneys fees.[4]In due course and after hearing, the trial court rendered a decision[5] on 5 May 2000 declaring the first two promissory notes dated 7 August 1996 and 14 March 1997 as already due and demandable and that the interest on the loans had been reduced by the parties from 15% to 6% per annum. It then ordered the petitioner corporation to pay Christian the amount of $100,000 representing the principal obligation covered by the promissory notes dated 7 August 1996 and