G.R. No. 169578 - Dio vs. St. Ferdid Memorial Park, Inc.

On December 11, 1973, Teresita Dio entered into a Pre-Need Purchase Agreement (Contract No. 384) with St. Ferdinand Memorial Park, Inc. (SFMPI) for a 36-square-meter memorial lot in Lucena City, thereby agreeing to purchase the lot on an installment basis.
The transaction was further evidenced by the Deed of Sale and Certificate of Perpetual Care (Contract No. 284) dated April 1, 1974, which expressly subjected Dio’s ownership of the lot to the rules and regulations of SFMPI, including future amendments, additions, and modifications.

SFMPI had established rules and regulations governing the use and development of lot areas in the memorial park, including a specific provision—Rule 69—which stated that mausoleum buildings and memorials should be constructed solely by the Park Personnel.
Rule 69 allowed a lot owner to submit a preferred design for the mausoleum provided it conformed to park standards, but it strictly prohibited hiring outside contractors for the actual construction work.
The rule was incorporated in the Pre-Need Purchase Agreement and the Deed of Sale, thereby binding lot owners to comply with both the existing and any future park standards.

Without SFMPI’s direct involvement, Dio initially had the mortal remains of her husband and father interred on her lot at her own expense, and later, similarly interred her daughter’s remains in a constructed niche by a private contractor.
In 1986, Dio decided to build a mausoleum over the existing interments. She prepared plans through a private contractor, estimating the construction cost at ₱60,000.
In early October 1986, after informing SFMPI—through its president and controlling stockholder, Mildred F. Tantoco—of her intention to build using her design, Dio was told that Rule 69 required the mausoleum to be constructed by the park’s agents at a minimum cost of ₱100,000, excluding additional design features.
Dio, through her counsel, demanded in a letter dated October 13, 1986, that she be allowed to construct the mausoleum within 10 days, failing which she threatened legal action against SFMPI and Tantoco.
On October 17, 1986, SFMPI formally communicated that, as per Rule 69 of its Rules and Regulations, no outside contractor could be contracted for such construction, permitting only the submission of a preferred design as long as it met park standards.

Dissatisfied with the imposition of Rule 69 and the higher construction cost, Dio filed a Complaint for Injunction with Damages on December 23, 1986 before the Regional Trial Court (RTC) of Lucena City, seeking a permanent injunction to restrain SFMPI and Tantoco from enforcing Rule 69.
The RTC issued a cease and desist order against the respondents, but ultimately rendered a judgment in favor of SFMPI after assessing the evidence concerning Dio’s awareness and agreement to abide by the contractual stipulations.
The Court of Appeals (CA) affirmed the trial court’s decision, emphasizing that by voluntarily entering into the contracts, Dio had thereby consented to the binding effect of all incorporated rules and regulations, including Rule 69.
Subsequent evidentiary presentations—including testimony by an NBI Document Examiner regarding the authenticity and timing of the Rules and Regulations—did not alter the finding that Dio was sufficiently aware of the contractual provisions.

Whether or not petitioner Teresita Dio actually knew or was constructively aware of Rule 69 at the time of executing the Pre-Need Purchase Agreement and the Deed of Sale.
Whether her subsequent actions—such as informing SFMPI of her intent to build a mausoleum—indicate acceptance of the rule.

Whether a lot owner can be held to be bound by rules and regulations that may be adopted after the execution of a contract, even if those rules were not expressly acknowledged at the time of purchase.
Whether the contractual provision that subjects the lot to both existing and future regulations is enforceable.

Whether Rule 69, which restricts the construction of mausoleums to SFMPI personnel and imposes a minimum construction cost, is unconscionable, oppressive, or contrary to law, morals, public order, or public policy.
Whether the pricing stipulation (minimum cost of ₱100,000) is justified in light of the park’s standards and the interests of uniformity and quality control.

Whether the contracts, alleged to be contracts of adhesion, should be strictly construed against the party that drafted them (SFMPI) or can be enforced as binding agreements given that the petitioner had the opportunity to reject them.
Whether the doctrine of estoppel applies as a result of Dio’s voluntary acceptance and observance of the contractual stipulations.