Facts:
Gregorio Araneta, Inc. was the seller, acting through its agent, of a portion of a tract of land in
Quezon City sold by
J.M. Tuason & Co., Inc. to
Philippine Sugar Estates Development Co., Ltd. on July 28, 1950, for P430,514.00. The deed of sale with mortgage expressly required the buyer to build the Sto. Domingo Church and Convent and required the seller to construct streets on the NE, NW and SW sides of the lot, the NE street to be named "Sto. Domingo Avenue." The buyer completed the church and convent. The seller began the streets but could not finish the NE street because a third party, Manuel Abundo, and other squatters physically occupied a middle portion and refused to vacate. On May 7, 1958,
Philippine Sugar Estates Development Co., Ltd. filed suit in the Court of First Instance of Manila seeking specific performance or damages for breach.
Gregorio Araneta, Inc. answered pleading, among other defenses, that its obligation to construct the streets was subject to a *reasonable time* and that the action was premature. The trial court dismissed the complaint on May 31, 1960, but on reconsideration amended its decision on July 16, 1960, and ordered
Gregorio Araneta, Inc. to comply within two years from notice. The trial court denied a motion for reconsideration, and
Gregorio Araneta, Inc. appealed. The Court of Appeals affirmed with modification on December 27, 1963, granting defendant two years from finality of that decision to perform.
Gregorio Araneta, Inc. petitioned for certiorari to this Court.
Issues:
Whether the trial court and the Court of Appeals properly fixed a two-year period for performance under
Article 1197 of the Civil Code when the defendant had pleaded that the contract allowed a *reasonable time* for performance. Whether a court may, absent a prayer in the complaint to set a period, proceed sua sponte to fix the time for performance. Whether, on the facts, the proper time for performance is the date of final eviction of the squatters occupying the land.
Ruling:
Ratio:
Doctrine: