SECOND
DIVISION
|
SIME DARBY
PILIPINAS, INC., Petitioner, - versus - GOODYEAR PHILIPPINES, INC. and MACGRAPHICS
CARRANZ INTERNATIONAL CORPORATION, Respondents. x------------------------------------------x GOODYEAR PHILIPPINES, INC., Petitioner, - versus - SIME DARBY PILIPINAS, INC. and MACGRAPHICS
CARRANZ INTERNATIONAL CORPORATION, Respondents. |
|
G.R. No. 182148
G.R.
No. 183210 Present: CARPIO,
J., Chairperson, NACHURA, PERALTA, ABAD, and MENDOZA,
JJ. Promulgated: June 8, 2011 |
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D E C I S I O N
MENDOZA, J.:
This disposition covers two petitions for review
filed separately by Sime Darby
Pilipinas, Inc. (Sime Darby) and Goodyear Philippines, Inc. (Goodyear)
assailing the February 13, 2008 Decision[1]
of the Court of Appeals (CA) and its March 13, 2008[2]
and May 28, 2008[3] Resolutions
in CA-G.R. CV No. 86032. The assailed issuances affirmed the November 8, 2004 Decision[4]
and the July 20, 2005 Order[5]
of the Regional Trial Court, Branch 61, Makati City (RTC), in Civil Case
No. 97-561 entitled Goodyear Philippines, Inc. v. Sime Darby Pilipinas, Inc.,
and/or Macgraphics Carranz International Corporation, for Partial
Rescission of a Deed of Assignment plus Damages and which essentially: [1] granted
Goodyears complaint for partial rescission against Sime Darby; and [2] ordered
Goodyear to pay respondent Macgraphics
Carranz International Corporation (Macgraphics) attorneys fees with
legal interest thereon.
The Facts:
Macgraphics owned several billboards across Metro Manila
and other surrounding municipalities, one of which was a 35 x 70 neon
billboard located at the Magallanes Interchange in P120,000.00.[6] The lease had a term of four years and was
set to expire on P1.2 million
representing the ten-month deposit which the latter would apply to the last ten
months of the lease. Thereafter, Macgraphics configured the Magallanes
billboard to feature Sime Darbys name and logo.
On P1.5 billion.
Just a day after, on P1.5 billion to P1.65
billion. The increase of the purchase price was made in consideration, among
others, of the assignment by Sime Darby of the receivables in connection with its billboard advertising in
On May 9, 1996, Sime Darby and Goodyear executed a
deed entitled Deed of Assignment in connection with Microwave Communication
Facility and in connection with Billboard Advertising in Makati City and
Pulilan, Bulacan (Deed of Assignment),[8]
through which Sime Darby assigned, among others, its leasehold rights and
deposits made to Macgraphics pursuant to its lease contract over the Magallanes
billboard.
Sime Darby then notified Macgraphics of the
assignment of the Magallanes billboard in favor of Goodyear through a letter-notice[9]
dated
After submitting a new design for the Magallanes
billboard to feature its name and logo, Goodyear requested that Macgraphics
submit its proposed quotation for the production costs of the new design. In a
letter[10]
dated P250,000.00
and explained that the increase in rental was in consideration of the
provisions and technical aspects of the submitted design.
Goodyear replied on P120,000.00
monthly rental rate given by Macgraphics to Sime Darby. It then requested that
Macgraphics send its quotation for the simple background repainting and
re-lettering of the neon tubing for the Magallanes billboard.[11]
Macgraphics then sent a letter[12]
to Sime Darby, dated
Attaching a copy of this letter to a correspondence[13]
dated July 15, 1996, Macgraphics advised Goodyear that any advertising service it
intended to get from them would have to wait until after the expiration or valid
pre-termination of the lease then
existing with Sime Darby.
On P1,239,000.00, the pro-rata value of
Sime Darbys leasehold rights over the Magallanes billboard.
As Sime Darby refused to accede to Goodyears demand
for partial rescission, the latter commenced Civil Case No. 97-561 with the RTC.
In its complaint,[15]
Goodyear alleged that Sime Darby [1] was unable to deliver the object of the
Deed of Assignment and [2] was in breach of its warranty under Title VII,
Section B, paragraph 2 of the MOA, stating that no consent of any third party
with whom Sime Darby has a contractual relationship is required in connection
with the execution and delivery of the MOA, or the consummation of the
transactions contemplated therein.[16]
Including Macgraphics as an alternative defendant, Goodyear
argued that should the court find the partial rescission of the Deed of
Assignment not proper, it must be declared to have succeeded in the rights and
interest of Sime Darby in the contract of lease and Macgraphics be ordered to
pay it the amount of P1,239,000.00.
After trial and the submission of the parties of
their respective memoranda, the RTC rendered its decision and disposed the case
in the following manner:
WHEREFORE,
premises considered, the Deed of Assignment of Receivables (Exh. C) is hereby
partially rescinded and defendant Sime Darby Pilipinas, Inc. is directed to pay
plaintiff Goodyear Philippines, Inc. the amount of P1,239,000.00 with legal interest thereon from June 1996 until fully paid.
Plaintiff Goodyear Philippines, Inc. is directed to pay defendant Macgraphics
the amount of P50,000.00 as attorneys fees with legal interest
thereon from the filing of the complaint until fully paid.
SO ORDERED.
The trial court was of the considered view that Sime
Darby should have secured the consent of Macgraphics to the assignment of the
lease before it could be effective against the latter. The trial court noted that
the contract of lease between Sime Darby and Macgraphics made no mention of any
clause that would grant Sime Darby the right to unilaterally assign the lease.
Thus, following Article 1649 of the New Civil Code,[17]
the trial court ruled that absent any stipulation to the contrary, the
assignment of the lease without the consent of Macgraphics was not valid. The RTC also stated that as far as Macgraphics
was concerned, its relationship with Goodyear was that of a new client.
With Sime Darbys failure to secure the consent of
Macgraphics, the trial court considered that it failed to deliver the object of
the Deed of Assignment. The RTC, thus,
ruled that following Article 1191 of the New Civil Code,[18]
Goodyear was entitled to demand rescission of the assignment of the lease over
the billboard.
Granting the counterclaim of Macgraphics, the trial
court found that Goodyear had no legal basis to file the complaint against it.
According to the trial court, the consent of Macgraphics was required before
any assignment of the lease over the billboard could be effective against it, there
being no stipulation allowing Sime Darby to do otherwise.
Not satisfied, both Goodyear and Sime Darby sought
partial reconsideration of the decision. Their respective pleas, however, were
denied by the RTC in its
Sime Darby and Goodyear thereafter sought relief
from the CA. In its
WHEREFORE,
premises considered, the reliefs prayed for in the instant appeal are hereby
DENIED. Accordingly, the assailed Decision of the Court a quo dated
SO ORDERED.
Both Sime Darby and Goodyear sought partial
reconsideration of the CA decision, but their motions were denied.
Unable to seek relief from the CA, Sime Darby and
Goodyear filed their respective petitions before the Court. Sime Darbys
petition was docketed as G.R. No. 182148, while Goodyears petition was
docketed as G.R. No. 183210. On
In its Memorandum,[20]
Sime Darby insists that Goodyear has no right to rescind the Deed of Assignment
as Macgraphics impliedly consented to the assignment of the lease. It argues
that Macgraphics, after being notified of the assignment, entertained
Goodyears request for a quotation on the cost of a new design for the
Magallanes billboard. The fact that there was a negotiation, Sime Darby posits,
means that Macgraphics did not really care who the lessee was for as long as it
got paid for the lease of the Magallanes billboard.
Sime Darby also asserts that Macgraphics, despite
refusing to give its consent to the assignment, still entertained Goodyears
request to have its logo featured in the Magallanes billboard. In fact, on
Further, Sime Darby argues that Macgraphics delay
of 69 days before its
On the other hand, both Goodyear and Macgraphics pray
for the affirmance of the decisions of the courts below that rescission is
proper. In addition, Goodyear assails
the petition of Sime Darby claiming that it raises only questions of fact since
the petition essentially revolves around the truth or falsity of the findings of
the courts below that Macgraphics never consented to the assignment of Sime
Darbys leasehold rights. Goodyear also insists that it is entitled to
attorneys fees due to the unjustified refusal of Sime Darby to rescind the
Deed of Assignment.
Goodyear, however, asserts that it should not be held
liable for the attorneys fees in favor of Macgraphics because it merely
impleaded the latter when Sime Darby argued that fault and liability lie with it
(Macgraphics).
Synthesized, the issues proffered by the two
petitions are:
[1] Whether partial rescission of the Deed of
Assignment is proper; and
[2] Whether Macgraphics is entitled to an award of
attorneys fees.
The Court finds no merit in the petitions.
Well-settled is the rule that a petition for review on
certiorari under Rule 45 of the Rules of Court should only include questions of
law since questions of fact are not
reviewable. A question of law arises when there is doubt as to what the law is
on a certain state of facts, while a question of fact exists when the doubt
arises as to the truth or falsity of the alleged facts. For a question to be
one of law, it must not involve an examination of the probative value of the
evidence presented by any of the litigants. The resolution of the issue must
rest solely on what the law provides under a given set of circumstances. Once
it is clear that the issue invites a review of the evidence presented, then the
question posed is one of fact. Thus, the test of whether a question is one of
law or of fact is not the appellation given to such question by the party
raising the same; rather, it is whether the appellate court resolve the
question raised without reviewing or evaluating the
evidence, in which case, it is a question of law; otherwise it is a question of
fact.[22]
Likewise well-settled is the principle that absent
grave abuse of discretion, the Court will not disturb the factual findings of
the CA. The Court will only exercise its
power of review in known exceptions such as gross misappreciation of evidence
or a total void of evidence.[23]
Whether Macgraphics gave its consent to the
assignment of leasehold rights of Sime Darby is a question of fact. It is not
reviewable. On this score alone, the petition of Sime Darby fails.
Even if the Court should sidestep this otherwise
fatal miscue, the petition of Sime Darby remains bereft of any merit. Article
1649 of the New Civil Code provides:
Art. 1649. The lessee cannot assign the
lease without the consent of the lessor, unless there is a stipulation to the
contrary. (n)
In an assignment of a lease, there is a novation by
the substitution of the person of one of the parties the lessee.[24] The
personality of the lessee, who dissociates from the lease, disappears.
Thereafter, a new juridical relation arises between the two persons who remain
the lessor and the assignee who is converted into the new lessee. The
objective of the law in prohibiting the assignment of the lease without the
lessors consent is to protect the owner or lessor of the leased property.[25]
Broadly, a novation may either be extinctive or
modificatory. It is extinctive when an old obligation is terminated by the
creation of a new obligation that takes the place of the former; it is merely
modificatory when the old obligation subsists to the extent it remains
compatible with the amendatory agreement. An extinctive novation results either
by changing the object or principal conditions (objective or real), or by
substituting the person of the debtor or subrogating a third person in the
rights of the creditor (subjective or personal). Under this mode, novation
would have dual functionsone to extinguish an existing obligation, the other
to substitute a new one in its place.
This requires a conflux of four essential requisites: (1) a previous
valid obligation; (2) an agreement of all parties concerned to a new contract;
(3) the extinguishment of the old obligation; and (4) the birth of a valid new
obligation.[26]
While there is no dispute that the first requisite
is present, the Court, after careful consideration of the facts and the
evidence on record, finds that the other requirements of a valid novation are
lacking. A review of the lease contract
between Sime Darby and Macgraphics discloses no stipulation that Sime Darby could
assign the lease without the consent of Macgraphics.
Moreover, contrary to the assertions of Sime Darby,
the records are bereft of any evidence that clearly shows that Macgraphics
consented to the assignment of the lease. As aptly found by the RTC and the CA,
Macgraphics was never part of the negotiations between Sime Darby and Goodyear.
Neither did it give its conformity to
the assignment after the execution of
the Deed of Assignment.
The consent of the lessor to an assignment of lease
may indeed be given expressly or impliedly. It need not be given simultaneously
with that of the lessee and of the assignee. Neither is it required to be in
any specific or particular form.[27]
It must, however, be clearly given. In this case, it cannot be said that Macgraphics
gave its implied consent to the assignment of lease. As aptly explained by the CA in its decision:
xxx
Neither
are We convinced with Appellant SIME DARBY's argument that Appellee MACGRAPHICS
impliedly consented to the questioned assignment when it negotiated with
Appellant GOODYEAR for the redesigning of Magallanes billboard. In fact, thru
its letter dated
xxx
RE: Your BILLBOARD LEASE
We refer to your letter dated
As anticipated, the
transfer of your rights over the lease will necessitate drastic changes to the
design and structure of the neon spectacular display advertised in the
billboard, which would thus entail commitment of manpower and resources which
we did not foresee at the inception of the lease. Much as we would like to
accommodate you, these reasons constrained us to decline giving consent to the
transfer. We hope that you will understand our position. (Emphasis included)
On
xxx
ATTENTION: MR. CARLOS
Q. CARBALLO
Manager
Distribution,
Development & Advertising
Gentlemen:
In response to your letter dated
We look forward to servicing your advertising needs at
the billboards presently leased to Sime Darby but only after the latter's
existing lease thereon has expired or been validly pre-terminated. Until then,
we are bound to abide by the terms of the existing lease contract.
Should you desire, we have other choice locations
which might suit your needs. Please let us know.
xxx
In the assertion of implied consent allegedly made by
the Appellee to the assignment, the Court a quo ratiocinated in this
wise:
xxx
On the issue of whether or not the negotiations between
Macgraphics and Goodyear is a separate negotiation or still included in the
lease, the Court rules that from the very start of the negotiations between
Goodyear and Macgraphics, the relationship between them, as far as Macgraphics
is concerned, was that of Goodyear as a new client. Nonetheless, whether the
negotiations is separate or included in the lease between Sime Darby and
Macgraphics, the fact remains that Macgraphics did not give its consent to the
assignment of the lease.
xxx
Clearly, there is no implied consent based on the
factual backdrop of this case. Evidently, what transpired between Appellant
GOODYEAR and the Appellee was a negotiation between a willing service provider and
a probable new client. On this regard, the president of the Appellee, ALVIN M.
CARRANZA (hereinafter CARRANZA), confirmed on direct examination the contents
of his judicial affidavit submitted before the Court a quo in lieu of
direct examination. The said judicial affidavit pertinently states viz:
xxx
Q: Do you know plaintiff?
A: Yes.
Q: How do you know the plaintiff?
A: I know the plaintiff Goodyear because
after Sime Darby sent us the letter dated
Q: What was your
reaction to this request?
A: Goodyear is a
big company, so we tried to be as accommodating as possible in order to attract
it as a client. (Underlining supplied)
xxx
As aptly pointed out by Appellant GOODYEAR in its
Brief filed in response to the appeal filed by the Appellant SIME DARBY, the
fact that the Appellee dealt with Appellant GOODYEAR as a new client is corroborated
by the testimony of APOLLO DE GALA (hereinafter DE GALA), Acting Manager for
Advertising of Appellant GOODYEAR, to wit:
Re-direct examination
Q: You mentioned during cross-examination
that you started negotiating with Macgraphics Carranz for the make-over of the
billboard in Magallanes, is it not?
A: Yes, sir.
Q: And this negotiation was without the
participation of Sime Darby?
A: Yes, sir.
Q: Now, why did you not include Sime Darby in
the negotiation?
A: I do not really have any reason to include
them that time, because considering that it was just a change over, we were
willing to pay for the change over. The thing that included Sime Darby was that
Carranz refused to honor. Well, Carranz proposed another scheme for the billboard.
In fact, they proposed to us that we do the whole thing over, sir. A
new set not considering the Sime Darby logo and Sime
Darby agreement,
Carranz and Sime Darby. To Carranz, it was already new set of client.
xxx
(Underlining
supplied)
Indeed, Macgraphics and Goodyear never came to terms
as to the conditions that would govern their relationship. While it is true,
that Macgraphics and Goodyear exchanged proposals, there was never a meeting of
minds between them. Contrary to the assertions of Sime Darby, the negotiations
between Macgraphics and Goodyear did not translate to its (Macgraphics) consent
to the assignment. Negotiations is just a part or a preliminary phase to the
birth of an obligation.
In general, contracts undergo three distinct
stages, to wit: negotiation; perfection or birth; and consummation. Negotiation
begins from the time the prospective contracting parties manifest their
interest in the contract and ends at the moment of agreement of the parties.
Perfection or birth of the contract takes place when the parties agree upon the
essential elements of the contract. Consummation occurs when the parties
fulfill or perform the terms agreed upon in the contract, culminating in the
extinguishment thereof.[28]
Regarding laches, it is
an issue raised by Sime Darby for the first time only in this Court. Basic is the rule that issues not raised below cannot be raised for
the first time on appeal. Points of law,
theories, issues and arguments not brought to the attention of the lower court
need not be, and ordinarily will not be, considered by the reviewing court, as
they cannot be raised for the first time at that late stage. Basic
considerations of due process impel the adoption of this rule.[29]
Notwithstanding,
the Court finds that the doctrine of laches cannot be applied in this case.
Laches is the failure or
neglect, for an unreasonable and unexplained length of time, to do that which,
by exercising due diligence, could or should have been done earlier; it is
negligence or omission to assert a right within a reasonable time, warranting
the presumption that the party entitled to assert it either has abandoned or
declined to assert it.[30] There is no absolute rule as to what constitutes
laches or staleness of demand; each case is to be determined according to its
particular circumstances, with the question of laches addressed to the sound
discretion of the court. Because laches is an equitable doctrine, its
application is controlled by equitable considerations and should not be used to
defeat justice or to perpetuate fraud or injustice.[31]
From the records, it appears that Macgraphics first
learned of the assignment when Sime Darby sent its letter-notice dated
In sum, it is clear
that by its failure to secure the consent of Macgraphics to the assignment of
lease, Sime Darby failed to perform what was incumbent upon it under the Deed
of Assignment. The rescission of the Deed of Assignment pursuant to Article
1191 of the New Civil Code is, thus, justified.
With regard to the two issues
raised by Goodyear on attorneys fees, the Court agrees with the CA which correctly
proferred the following ratiocination:
The award of attorney's fees is the exception rather
than the rule, and it must have some factual, legal and equitable bases.
Nevertheless, Art. 2208 of the Civil Code authorizes an award of attorney's
fees and expenses of litigation, other than judicial costs, when as in this
case the plaintiff's act or omission has compelled the defendant to litigate
and to incur expenses of litigation to protect her interest (par. 2), and where
the Court deems it just and equitable that attorney's fees and expenses of
litigation should be recovered (par. 11).
In the case at bar, even before the filing of the
instant case before the Court a quo, it was clear that Appellee MACGRAPHICS
was not part of the Deed of Assignment being assailed by the Appellant
GOODYEAR. It was also established during the trial that the consent of Appellee
MACGRAPHICS was not secured prior to the execution of the subject deed between
the Appellants. Thus, it is only equitable that Appellant GOODYEAR be made liable for the
unnecessary attorney's fees spent by Appellee MACGRAPHICS to protect its rights and interest due to the
filing of a baseless complaint by Appellant GOODYEAR. To stress, attorney's
fees may be awarded when a party is compelled to litigate or to incur expenses
to protect its interest by reason of an unjustified act by the other.
As to the claim of Appellant GOODYEAR that Appellant
SIME DARBY be made liable to pay the former attorney's fees, We rule to deny
the same.
The grant of attorney's fees depends on the
circumstances of each case and lies within the discretion of the court. We are
of the view that although the Court a quo was correct in ordering the
partial rescission of the deed of assignment, it does not necessarily follow
that the award of attorney's fees is a natural consequence. They are not
awarded every time a party wins a suit. In the absence of a stipulation,
attorney's fees are ordinarily not recoverable; otherwise a premium shall be
placed on the right to litigate. Since the Appellant GOODYEAR's claim from Appellant SIME DARBY, to
deliver its leasehold rights with Appellee MACGRAPHICS cannot altogether be
considered as demandable claim due to latter's lack of consent, Appellant SIME
DARBY cannot be made liable to answer for attorney's fees. [Emphases supplied]
In view of all the foregoing, the Court finds no
legal, factual, or equitable justification to disturb the findings and
conclusions of the courts below.
WHEREFORE, the petitions are hereby DENIED.
SO ORDERED.
JOSE
CATRAL
Associate Justice
WE CONCUR:
ANTONIO
T. CARPIO
Associate Justice
Chairperson
ANTONIO
EDUARDO B. NACHURA DIOSDADO M.
PERALTA
Associate Justice Associate Justice
ROBERTO A. ABAD
Associate Justice
A T T
E S T A T I O N
I attest that the conclusions in the above Decision
had been reached in consultation before the case was assigned to the writer of
the opinion of the Courts Division.
ANTONIO T. CARPIO
Associate
Justice
Chairperson, Second Division
C E R
T I F I C A T I O N
Pursuant to Section 13, Article VIII of the
Constitution and the Division Chairpersons Attestation, I certify that the
conclusions in the above Decision had been reached in consultation before the
case was assigned to the writer of the opinion of the Courts Division.
RENATO
C. CORONA
Chief Justice
[1] Penned
by Associate Justice Myrna Dimaranan Vidal with Associate Justices Jose L.
Sabio and Jose C. Reyes, Jr., concurring; CA rollo, pp. 194-210.
[2]
[3] Rollo (G.R. No. 183210), pp. 63-64.
[4] Records (Vol. II), pp. 449-454.
[5]
[6]
[7]
[8]
[9]
Rollo (G.R.
No. 182148), p. 45.
[10] Records (Vol. I), p. 29.
[11]
[12]
[13]
[14]
[15]
[16]
[17] Art. 1649. The lessee cannot assign
the lease without the consent of the lessor, unless there is a stipulation to
the contrary. (n)
[18] Art. 1191. The
power to rescind obligations is implied in reciprocal ones, in case one of the
obligors should not comply with what is incumbent upon him.
The
injured party may choose between the fulfillment and the rescission of the
obligation, with the payment of damages in either case. He may also seek
rescission, even after he has chosen fulfillment, if the latter should become
impossible.
The
court shall decree the rescission claimed, unless there be just cause
authorizing the fixing of a period.
This is understood to be without prejudice to the rights of third persons who have acquired the thing, in accordance with Articles 1385 and 1388 and the Mortgage Law. (1124)
[19] Records (Volume II), p. 526.
[20] Rollo (G.R. No. 183210), pp. 417-438.
[21] Records (Vol. I), p. 459.
[22] Leoncio
v. De Vera, G.R. No. 176842,
[23] Encarnacion
v. Court of Appeals, G..R. No. 101292,
[24] Sadhwani v. Court of Appeals, 346 Phil. 54, 64 (1997).
[25] Tamio
v. Ticson, 485 Phil. 434, 441 (2004); Dakudao v. Consolacion, 207
Phil. 750 (1983).
[26]
Fabrigas v. san Francisco del monte, 512 Phil. 627, 638-639 (2005).
[27] Babst v. Court of Appeals, 403 Phi. 244 (2001), citing Asia Banking Corporation v. Elser, 54 Phil. 994 (1929).
[28] Swedish Match, AB v. Court of Appeals, 483 Phil. 735, 750-751 (2004), citing Bugatti v. Court of Appeals, 397 Phil. 376 (2000).
[29] Pag-Asa Steel Works v. Court of Appeals,
G.R. No. 166647, March 31, 2006, 486 SCRA 475, 490.
[30]
Fangonil-Herrera v. Fangonil, G.R. No. 169356,
[31]