Dio vs. St. Ferdinand Memorial Park, Inc.

A stipulation in a memorial lot purchase agreement requiring the park's personnel to construct mausoleums is valid and binding where the lot owner voluntarily agreed to be bound by the park's rules and regulations and cannot be considered a disadvantaged party to justify striking down the contract of adhesion.

On December 11, 1973, Teresita Dio purchased a memorial lot from St. Ferdinand Memorial Park, Inc. (SFMPI) on an installment basis, executing a Pre-Need Purchase Agreement and later a Deed of Sale and Certificate of Perpetual Care, both incorporating SFMPI's rules and regulations. Rule 69 of these rules mandated that mausoleums be constructed by park personnel, prohibiting outside contractors. After interring relatives and deciding to build a mausoleum in 1986, Dio sought to use her own contractor but was rebuffed by SFMPI's president, who insisted on enforcing Rule 69.

• Purchase Agreement: Dio bought a 36-square-meter memorial lot from SFMPI on December 11, 1973, executing a Pre-Need Purchase Agreement. The contract incorporated SFMPI rules, including future amendments.
• Rule 69: The SFMPI rules contained Rule 69, which mandated that mausoleums and memorials be constructed by park personnel. Lot owners were prohibited from hiring outside contractors but were free to provide their own designs, provided they conformed to park standards.
• Prior Interments: Prior to the mausoleum dispute, Dio interred the remains of her husband, father, and daughter (in August 1974) on the lot, using a private contractor for niche fabrication without SFMPI's knowledge.
• Demand to Build Mausoleum: In 1986, Dio decided to build a mausoleum. She hired Engr. Alex Tan to prepare plans and specifications, estimated at ₱60,000.00. When she sought approval from SFMPI President Mildred Tantoco, the design was approved, but Tantoco insisted that SFMPI construct the mausoleum for a minimum of ₱100,000.00, excluding certain specific designs, pursuant to Rule 69.
• Legal Demand and Refusal: Through counsel, Dio demanded that she be allowed to construct the mausoleum within ten days. SFMPI refused, reiterating the prohibition against outside contractors under Rule 69.
• NBI Examination: At trial, Dio presented an NBI document examiner who testified that the "May 25, 1972" date on the SFMPI rules was an intercalation. On cross-examination, the examiner admitted the date could have been typed on the same day as the other entries or after the page was removed from the typewriter.
• Trial Court Finding: The RTC found that Dio was aware of the rules, noting that her act of seeking permission to build a mausoleum demonstrated such awareness. The RTC dismissed her complaint.

• Validity of Rule 69 Date: Petitioner argued that respondents failed to prove the rules were approved on May 25, 1972, prior to her purchase, citing the NBI examiner's testimony that the date was an intercalation.
• Binding Effect of Future Rules: Petitioner maintained that she never consented to comply with future rules, amendments, or modifications adopted after the purchase.
• Validity of Rule 69: Petitioner averred that Rule 69 is unreasonable, oppressive, and void for being contrary to law, morals, public order, and public policy.
• Contract of Adhesion: Petitioner contended that the contracts were contracts of adhesion and that she was not in estoppel, having made no prior admission or representation regarding the rules.
• Damages: Petitioner argued that the appellate court erred in not ordering respondents to pay damages as prayed for and proved during trial.

• Mootness: Respondent countered that the plea for injunction had become moot and academic because Dio had already caused the completion of the mausoleum in July 1997, in patent violation of the lower courts' cease and desist orders.
• Estoppel on Evidence: Respondent argued that because Dio presented the NBI document examiner as a witness, she was barred from assailing the probative weight of his testimony.
• Contract Validity/Adhesion: Respondent maintained that the contracts were not contracts of adhesion, and Dio could have refused to enter into them if she had concerns regarding the stipulations.
• Reasonableness of Rule 69: Respondent insisted that Rule 69 does not permanently deprive lot owners of their right to use their property and is therefore not oppressive or unconscionable.

• Knowledge of Rules: Whether petitioner had knowledge of Rule 69 of SFMPI Rules and Regulations when the Pre-Need Purchase Agreement and the Deed of Sale were executed.
• Validity of Rule 69: Whether Rule 69 is valid and binding upon petitioner.

• Knowledge of Rules: Petitioner is precluded from asserting lack of knowledge of the rules. The contracts expressly incorporated the SFMPI rules, and her act of seeking permission to build a mausoleum demonstrated awareness of their existence. The factual findings of the trial court, as affirmed by the CA, that she was aware of the rules are binding and conclusive on review, no exception warranting a re-evaluation being present.
• Validity of Rule 69: Rule 69 is valid and binding. It constitutes a permissible restriction on property use imposed by the transmitting owner, not contrary to the nature of ownership or prohibited by law. The contract of adhesion is binding because the petitioner, an experienced businesswoman, was not a disadvantaged party under Article 24 of the Civil Code, and she freely adhered to the contract.

• Finality of Factual Findings — Factual findings of lower courts, particularly when affirmed by the appellate court, are deemed final and conclusive and are not reviewable by the Supreme Court. Exceptions exist, such as when findings are contradictory, based on speculation, or premised on a misapprehension of facts. None of the exceptions were found to apply in this case.
• Contracts of Adhesion — A contract of adhesion is as binding as ordinary contracts because the adhering party is free to reject it entirely. It is not invalid per se. It may be struck down only when the weaker party is imposed upon in dealing with the dominant bargaining party and is deprived of the opportunity to bargain on equal footing. The stringent treatment of such contracts under Article 24 of the Civil Code does not apply where the adhering party is an educated and experienced businesswoman.
• Restrictions on Ownership — The right of the owner to enjoy and dispose of a thing under Article 428 of the Civil Code is subject to limitations established by law and those imposed by the will of the transmitting owner, provided the limitations are not contrary to the nature of ownership or prohibited by law.

• "A contract of adhesion is as binding as ordinary contracts, the reason being that the party who adheres to the contract is free to reject it entirely."
• "It cannot be further emphasized that it behooves every contracting party to learn and know the contents of an instrument before signing and agreeing to it."
• "The appellant's ownership of the memorial lot was subject to the rules and regulations legally and validly restricting her enjoyment and use of the property."

• Development Bank of the Philippines v. Perez, G.R. No. 148541, November 11, 2004 — Followed. Cited for the ruling that contracts of adhesion are not invalid per se and the adhering party is free to reject the contract entirely.
• Rizal Commercial Banking Corporation v. Court of Appeals — Followed. Cited for the principle that contracts of adhesion are binding as ordinary contracts, though they may be struck down when the weaker party is imposed upon and deprived of the opportunity to bargain on equal footing.

• Article 428, Civil Code — Cited to establish that ownership is subject to limitations imposed by law and by the will of the transmitting owner. Applied to hold that petitioner's ownership of the memorial lot was subject to the validly restricting rules and regulations of the memorial park.
• Article 24, Civil Code — Cited for the rule that courts must be vigilant to protect parties at a disadvantage in contractual relations due to moral dependence, ignorance, indigence, mental weakness, tender age, or other handicap. Not applied to invalidate the contract because petitioner was an experienced businesswoman and not the weaker party.

Artemio V. Panganiban (Chief Justice), Consuelo Ynares-Santiago, Ma. Alicia Austria-Martinez, Minita V. Chico-Nazario.