Facts:

The case of Servillano Aquino vs. Emeterio Tanedo was decided by the Supreme Court of the Philippines on January 22, 1919. The plaintiff, Servillano Aquino, filed a complaint against the defendant, Emeterio Tanedo, seeking the payment of P10,000, along with legal interest from the date of the filing of the complaint. The defendant counterclaimed for P6,791.75, also with legal interest, from March 28, 1914. The dispute arose from a contract dated May 5, 1913, wherein Aquino purchased several parcels of land from Tanedo for a total price of P45,000. The contract stipulated that Tanedo received P10,000 as a down payment, with the remaining balance to be paid in installments over the following years. However, on March 28, 1914, both parties entered into a second contract that rescinded the original sale, leading to the return of the lands by Aquino to Tanedo. In this second agreement, Tanedo acknowledged a debt of P12,000 to Aquino, which included P2,000 as interest for one yea...

Facts:

1. Contract of Sale and Payment Terms:

   • On May 5, 1913, plaintiff Servillano Aquino purchased several parcels of land from defendant Emeterio Tanedo for P45,000.
   • The defendant acknowledged receipt of P10,000 as part of the price, with the remaining balance to be paid in installments: P7,000 in September 1913, P10,000 in May 1914, and P18,000 in 1915.
   • The plaintiff took possession of the lands upon execution of the contract (Exhibit X).

2. Rescission of the Contract:

   • On March 28, 1914, the parties executed another contract (Exhibit Z), rescinding the original sale agreement.
   • The plaintiff returned the lands and related documents to the defendant.
   • Instead of returning the P10,000 received, the defendant executed a document (Exhibit A) acknowledging a debt of P12,000 to the plaintiff, with P2,000 (interest on P10,000 for one year) to be paid by May 31, 1915, and the remaining P10,000 to be paid at a later date.

3. Payment of Interest and Legal Proceedings:

   • On May 28, 1915, the defendant paid the P2,000 interest as agreed.
   • The plaintiff filed a case (Civil Case No. 792) demanding payment of the P10,000.
   • The court fixed a three-month period (from October 1, 1915) for the defendant to pay the P10,000.

4. Counterclaim by the Defendant:

   • The defendant filed a counterclaim demanding P6,791.75, representing the value of the products collected by the plaintiff from the lands during his possession (May 5, 1913, to March 28, 1914).
   • The plaintiff argued that the judgment in Civil Case No. 792 resolved all issues, including the counterclaim.

Issue:

• (Unlock)

Ruling:

• (Unlock)

Ratio:

1. Nature of Rescission:

   • The rescission in Exhibit Z was a mutual agreement for the dissolution of the contract, not a rescission under Article 1295 of the Civil Code. Article 1295 applies only to rescissions based on legal causes specified in Articles 1291 and 1292, which protect parties or third parties from injury caused by the contract.

2. Presumption of Written Contracts:

   • The written contract (Exhibit Z) is presumed to contain all agreements between the parties. The defendant failed to prove the existence of a verbal agreement obliging the plaintiff to return the fruits.

3. Interest Payment and Reciprocity:

   • The defendant paid interest on the P10,000 only for the period after the rescission, not for the period during which the plaintiff collected the fruits. Thus, there was no reciprocity requiring the plaintiff to return the fruits.

4. Possession in Good Faith:

   • The plaintiff possessed the lands in good faith as a purchaser. Under Article 451 of the Civil Code, a possessor in good faith is entitled to the fruits collected and is not obligated to return them.

5. Equity Considerations:

   • The plaintiff incurred expenses to improve the lands and produce the fruits. The value of the fruits collected was reasonably equivalent to the interest on the P10,000 paid to the defendant.