Ereñeta vs. Bezore

The phrase "accrued or accruing" in a deed of sale conveying rights, title, interest, and participation in a property includes all benefits and claims that have already accrued or may accrue up to the date of the sale. Where the terms of a contract are clear and unambiguous, the literal meaning of its stipulations controls, and there is no need for interpretation. Additionally, a lessee's continued possession and cultivation of leased property after the expiration of the written lease contract, with the lessor's acquiescence, creates an implied new lease under the same terms and conditions, not an express trust, absent any written instrument establishing a fiduciary relationship.

The claimants-appellants Bezore, Knickerbocker, and McCormick owned one-half (1/2) pro-indiviso of the Hacienda Rosario in Pontevedra, Negros Occidental, as their inheritance from the late Thomas Fallon. The other half belonged to Petronila Alunan vda. de Sta. Romana, Amparo Sta. Romana, and Alberta vda. de Hopon, as their inheritance from their mother Rosario Sta. Romana. Emilio Camon was the lessee of the hacienda for the period from crop year 1940-41 to crop year 1960-61. Upon Camon's death in 1967, his widow, Concepcion Ereñeta, filed a petition for letters of administration of his estate, which was granted, and the court ordered all persons with money claims against the estate to file their claims within the prescribed period.

Emilio Camon was the lessee of the Hacienda Rosario, located in Pontevedra, Negros Occidental, for the period from crop year 1940-41 to crop year 1960-61. One-half (1/2) pro-indiviso of the sugar plantation belonged to the claimants-appellants Ignatius Henry Bezore, Elwood Knickerbocker, and Mary Irene Fallon McCormick, as their inheritance from the late Thomas Fallon, while the other half belonged to Petronila Alunan vda. de Sta. Romana, Amparo Sta. Romana, and Alberta vda. de Hopon, as their inheritance from their mother Rosario Sta. Romana.

Upon the death of Emilio Camon in 1967, his widow, Concepcion Ereñeta, filed a petition in the court a quo, docketed as Special Proceeding 8366, praying for the grant to her of letters of administration of the estate of the deceased Camon. The petition was granted, and the court issued an order requiring all persons with money claims against the estate to file their claims within the prescribed period. The claimants-appellants, through their judicial administrator and counsel, Martiniano O. de la Cruz, filed a claim against the estate in the amounts of P62,065 as the money value of sugar allotments and allowances and P2,100 as the money value of palay and rentals, or a total of P64,165, appertaining to the claimants' half-share in the hacienda. The appellants and the administratrix-appellee agreed that the late Emilio Camon appropriated for himself the amounts claimed. The appellants had demanded payment of their claim from Emilio Camon when he was still alive, but the latter ignored the demands.

At the trial, three documents, the authenticity of each of which was not controverted by the appellants, were submitted in evidence by the administratrix-appellee. These were: (1) an "Agreement to Sell" (exhibit "1"), executed on January 11, 1961, whereby the claimants agreed to sell their one-half (1/2) share in the hacienda Rosario to Amparo Sta. Romana and Alberta vda. de Hopon; (2) a "Release and Waiver of Claims" (exhibit "3"), executed on January 12, 1961, whereby Amparo Sta. Romana and Alberta vda. de Hopon, for and in consideration of "their gratitude for the various services, financial and personal" extended to them by Emilio Camon, released him from "any and all claims that may have accrued pertaining to the two-fourth (2/4) pro-indiviso share in Hacienda Rosario" owned by the appellants who had bound themselves "to sell their share in the said Hacienda Rosario" to Amparo and Alberta, "including rights accrued or accruing," and whereby Amparo and Alberta bound themselves "to waive in favor of Mr. Emilio Camon for his own use and benefit said rights accrued or accruing"; and (3) a "Deed of Sale" (exhibit "2"), executed on August 4, 1961, whereby the claimants, for and in consideration of the sum of P78,000, to be paid in the manner stated in the instrument, sold, transferred and conveyed "all their rights, title, interest and participation, whether accrued or accruing in their two-fourth (2/4) pro-indiviso share" in the hacienda Rosario, "together with all the improvements now existing thereon, including its sugar quota," in favor of Amparo Sta. Romana and Alberta vda. de Hopon.

The lower court rejected the appellants' contention that the sugar allotments and allowances, subject of their claim against the estate of Emilio Camon, were not included in the sale, and held that by the positive and categorical terms of the deed of sale, all benefits accrued and accruing to the appellants before August 4, 1961 were included in the sale. The court then dismissed the claim per its order dated July 20, 1968.

• Exclusion of Allotments from Sale: The appellants premised their conclusion that the allotments and allowances were not included in the sale on the grounds that on January 12, 1961 there was then no sale and, therefore, by the "Release and Waiver of Claims" Amparo Sta. Romana and Alberta vda. de Hopon released and waived nothing in favor of Emilio Camon; that the waiver was made in advance, which is contrary to public policy; that Emilio Camon was not the vendee in the sale; that the vendees represented to Martiniano O. de la Cruz that the sugar quedans and palay claimed were not included in the sale and that such was the intention of the parties; that the words "accrued and accruing" in the deeds are obscure, and since the deeds were prepared by Ramon S. Ereñeta who is a brother of the administratrix Concepcion Ereñeta who, in turn, is the widow of Emilio Camon, the obscure words should not favor the party which caused the obscurity; that the consideration in the sale, which is equivalent to P1,300 per hectare, is "cheap"; and that Camon's silence regarding the demands made upon him to pay the claim was an admission of his debt.
• Express Trust: The appellants contended that notwithstanding the absence of a written contract of lease for the crop years 1952-53 to 1960-61, Emilio Camon's continued cultivation of the hacienda created an express trust in favor of the claimants.

• Inclusion of Allotments in Sale: The administratrix-appellee submitted the three documents in evidence and maintained that by the positive and categorical terms of the deed of sale, all benefits accrued and accruing to the appellants before August 4, 1961 were included in the sale.

• Interpretation of "Accrued or Accruing": Whether the phrase "accrued or accruing" in the deed of sale, having reference to the claimants' rights, title, interest and participation in the plantation, should be interpreted to exclude the sugar allotments and allowances adherent to the hacienda.
• Creation of Express Trust: Whether, notwithstanding the absence of a written contract of lease for the crop years 1952-53 to 1960-61, Emilio Camon's continued cultivation of the hacienda created an express trust in favor of the claimants.

• Interpretation of "Accrued or Accruing": No. The words "accrued or accruing" in the deed of sale are not obscure and are positive and categorical enough to include accrued allotments and allowances. Since the said words are not ambiguous, there is no need to interpret them, and the literal meaning of the stipulations controls pursuant to Article 1370 of the Civil Code.
• Creation of Express Trust: No. The continuance in the cultivation, with the acquiescence of the owners, did not convert the original relationship into an express trust, but merely implied a new lease over the property, with the same terms and conditions provided in the original contract, except as to the period of the lease, pursuant to Article 1670 of the Civil Code.

• Interpretation of "Accrued or Accruing": The claimants-appellants' view that at the time of the execution, on January 12, 1961, of the deed of "Release and Waiver of Claims," Amparo Sta. Romana and Alberta vda. de Hopon could not release or waive accrued claims belonging to the claimants, is correct because the right that Amparo and Alberta then had was a mere promise by the claimants to sell their share in the hacienda, not the right to the accrued claims. What was agreed to be sold in the future was different from what was purportedly waived; and even if the object in both contracts were the same, the waiver would still be invalid for it is essential that a right, in order that it may be validly waived, must be in existence at the time of the waiver. Nonetheless, whatever defect there was in the waiver was subsequently cured by the deed of sale of August 4, 1961 by virtue of which the appellants sold not only their pro-indiviso half-share in the hacienda but also their accrued rights therein. It is immaterial that Emilio Camon was not the vendee since what mattered is that the appellants parted with their accrued rights for a valuable consideration. That the vendees represented to Martiniano O. de la Cruz that the sugar quedans and palay were not included in the sale and that such was the intention of the parties, involves a question of fact which is not reviewable in a direct appeal to the Supreme Court. The words "accrued or accruing" in the deed of sale are not obscure and, as the lower court declared, are in fact positive and categorical enough to include accrued allotments and allowances. Since the said words are not ambiguous, there is no need to interpret them, and Article 1370 of the Civil Code provides that if the terms of a contract are clear and leave no doubt upon the intention of the contracting parties, the literal meaning of its stipulations shall control. That the consideration in the sale was "cheap" is not a ground for the infirmity of the sale, as inadequacy of cause in a contract does not of itself invalidate the contract. The appellants' stand that the silence of Camon with respect to the several demand letters sent to him was an admission of his debt is without support or sanction in the law of evidence.
• Creation of Express Trust: There was no change in the juridical relationship between the hacienda owners and Emilio Camon when, after the expiration of their written contract of lease, he continued cultivating the hacienda during the crop years 1952-53 to 1960-61. The continuance in the cultivation, with the acquiescence of the owners, did not convert the original relationship into an express trust, as contended by appellants, but merely implied a new lease over the property, with the same terms and conditions provided in the original contract, except as to the period of the lease, pursuant to Article 1670 of the Civil Code. There is nothing in the record that evidences the creation of a fiduciary relationship between the lessors and the lessee after the expiration of their written contract of lease, which fiduciary relationship is an essential characteristic of trust, and no written instrument has been pointed to as establishing an express trust, which writing is required in express trusts over immovables under Article 1443 of the Civil Code. There is therefore no basis for the appellants' claim that an express trust was created when Camon continued to cultivate the land after the expiration of the written contract of lease.

• Literal Interpretation of Clear Contracts — Under Article 1370 of the Civil Code, if the terms of a contract are clear and leave no doubt upon the intention of the contracting parties, the literal meaning of its stipulations shall control. The Court applied this doctrine in holding that the phrase "accrued or accruing" in the deed of sale was positive and categorical, requiring no interpretation, and thus included the sugar allotments and allowances.
• Implied New Lease — Under Article 1670 of the Civil Code, if at the end of the contract the lessee should continue enjoying the thing leased for fifteen days with the acquiescence of the lessor, and unless a notice to the contrary by either party has previously been given, it is understood that there is an implied new lease, not for the period of the original contract, but for the time established in Articles 1682 and 1687, and the other terms of the original contract shall be revived. The Court applied this doctrine in holding that Camon's continued cultivation after the expiration of the written lease created an implied new lease, not an express trust.
• Express Trusts Over Immovables Require Writing — Under Article 1443 of the Civil Code, no express trust concerning an immovable or any interest therein may be proved by parol evidence. The Court applied this doctrine in holding that no written instrument was pointed to as establishing an express trust, and thus no express trust was created.
• Inadequacy of Cause Does Not Invalidate Contract — Under Article 1355 of the Civil Code, inadequacy of cause does not of itself invalidate a contract, except as provided by law. The Court applied this doctrine in rejecting the appellants' argument that the "cheap" consideration in the sale was a ground for the infirmity of the sale.

• "The words 'accrued or accruing' the deed of sale are not obscure and, as the lower court declared, are in fact positive and categorical enough to include accrued allotments and allowances. Since the said words are not ambiguous, there is no need to interpret them." — This passage states the ratio decidendi on the first issue, holding that the clear terms of the deed of sale included the sugar allotments and allowances, and that no interpretation was necessary.
• "The continuance in the cultivation, with the acquiescence of the owners, did not convert the original relationship into an express trust, as contended by appellants, but merely implied a new lease over the property, with the same terms and conditions provided in the original contract, except as to the period of the lease." — This passage states the ratio decidendi on the second issue, applying Article 1670 of the Civil Code to hold that continued cultivation created an implied new lease, not an express trust.
• "There is nothing in the record that evidence the creation of a fiduciary relationship between the lessors and the lessee after the expiration of their written contract of lease, which fiduciary relationship is an essential characteristic of trust, and no written instrument has been pointed to as establishing an express trust, which writing is required in express trusts over immovables." — This passage articulates the Court's reasoning for rejecting the express trust claim, emphasizing the absence of a fiduciary relationship and the requirement of a written instrument for express trusts over immovables.

• Miguel vs. Catalino, L-23072, Nov. 29, 1968, 26 SCRA 234 — Cited for the proposition that questions of fact are not reviewable in a direct appeal to the Supreme Court.
• Victorino vs. Lao, L-25273, May 28, 1970, 33 SCRA 54 — Cited for the same proposition that questions of fact are not reviewable in a direct appeal to the Supreme Court.
• Askay vs. Cosalan, 46 Phil. 179 — Cited in support of the rule that inadequacy of cause in a contract does not of itself invalidate the contract.

• Article 1370, Civil Code — Provides that if the terms of a contract are clear and leave no doubt upon the intention of the contracting parties, the literal meaning of its stipulations shall control. The Court applied this provision in holding that the phrase "accrued or accruing" in the deed of sale was clear and included the sugar allotments and allowances.
• Article 1355, Civil Code — Provides that inadequacy of cause does not of itself invalidate a contract, except as provided by law. The Court applied this provision in rejecting the appellants' argument that the "cheap" consideration in the sale was a ground for the infirmity of the sale.
• Article 1670, Civil Code — Provides that if at the end of the contract the lessee should continue enjoying the thing leased for fifteen days with the acquiescence of the lessor, and unless a notice to the contrary by either party has previously been given, it is understood that there is an implied new lease, not for the period of the original contract, but for the time established in Articles 1682 and 1687, and the other terms of the original contract shall be revived. The Court applied this provision in holding that Camon's continued cultivation created an implied new lease, not an express trust.
• Article 1443, Civil Code — Provides that no express trust concerning an immovable or any interest therein may be proved by parol evidence. The Court applied this provision in holding that no written instrument was pointed to as establishing an express trust, and thus no express trust was created.

Makalintal, C.J., Teehankee, Makasiar, Esguerra, and Muñoz Palma, JJ., concurred.