Title
Marmont Resort Hotel vs. Guiang
Case
G.R. No. 79734
Decision Date
Dec 8, 1988
Marmont Resort sued Guiang spouses for denying access to a water facility. Court ruled in favor of Marmont, citing judicial admissions, valid agreements, and violations of good faith under the Civil Code.

Case Digest (G.R. No. 79734)
Expanded Legal Reasoning Model

Facts:

  • Parties Involved
    • Petitioner: Marmont Resort Hotel Enterprises, Inc., a corporation engaged in the hotel and resort business located in Olongapo City.
    • Respondents: Federico Guiang and Aurora Guiang, private individuals occupying a portion of land in Olongapo City.
    • Third Party: Maris Trading, which executed contractual agreements relating to the water supply facility of the hotel.
  • Transactional Background and Agreements
    • First Memorandum of Agreement (May 2, 1975)
      • Executed between Maris Trading and Marmont Resort Hotel Enterprises.
      • Maris Trading undertook to drill a well and install a water pump along with complete equipment for a water supply facility for the hotel for a fee of ₱40,000.00.
    • Second Memorandum of Agreement (Approximately October 7, 1975)
      • Executed between Maris Trading and Aurora Guiang with Federico Guiang serving as a witness.
      • Contained provisions wherein Aurora Guiang, for the sum of ₱1,500.00, transferred all possessory rights, interests, and claims over the portion of land housing the water facility to Maris Trading.
      • Acknowledged the work done under the first memorandum and evidenced consent by the parties.
  • Development of the Dispute
    • Inadequacy of Water Supply
      • After some time, the water supply installation became insufficient to meet the hotel’s requirements.
      • Marmont Resort Hotel engaged an additional contractor who recommended the installation of a submersible pump to enhance water pressure and flow.
    • Request for Access and Subsequent Refusal
      • Juan Montelibano, Jr., the hotel manager, sought permission from the Guiang spouses to inspect the water pump and facilitate additional installations.
      • The Guiang spouses denied access, precipitating the dispute.
    • Filing of the Complaint
      • On May 13, 1980, Marmont Resort Hotel Enterprises filed a Complaint seeking damages, which included:
        • ₱10,000.00 advanced to the second contractor.
ii. ₱40,000.00 project cost for the installation work by Maris Trading. iii. ₱50,000.00 for additional expenses and incidental losses due to the pump’s inadequacy. iv. ₱10,000.00 for attorney’s fees.
  • In their Answer, the Guiang spouses denied prior knowledge of the first memorandum and challenged the validity of the second memorandum on legal grounds (lack of proper execution according to the law regarding conjugal property).
  • Pre-Trial Conference and Stipulations
    • At the pre-trial conference on October 2, 1980, both parties agreed on a stipulation of facts:
      • Confirmation of the existence and contents of the two Memorandum of Agreements.
      • Acknowledgment that the water facility, including its construction work, was performed on the land occupied by the Guiang spouses, with the latter’s consent.
      • Recognition that the testaments of the agreements were entered as evidence (albeit not formally offered at trial) and formed part of the judicial record.
    • The issues thus stipulated included:
      • Whether the Guiang spouses had prohibited Marmont Resort from making repairs to the water facility.
      • Whether the spouses had the right to prohibit Maris Trading from performing such repairs.
      • Whether the spouses were liable for damages under the human relations provision of the Civil Code.
  • Procedural History
    • On January 1, 1980, the Guiang spouses moved to dismiss the complaint on the grounds that the second Memorandum of Agreement was invalid. They argued that:
      • The subject matter involved the alienation of conjugal property by Aurora Guiang without the marital consent of Federico Guiang.
      • The land in question was still part of the public domain and subject to pending sales applications.
    • The trial court denied the motion to dismiss and, on May 31, 1983, rendered a decision dismissing the complaint.
    • The Court of Appeals subsequently affirmed the trial court’s dismissal, holding that neither Memorandum of Agreement was properly admitted into evidence because they were not formally offered, and that no proof existed of Marmont acquiring any rights from Maris Trading.
  • Issues Raised on Petition for Review
    • Petitioner Marmont contended that:
      • The Court of Appeals erred by not considering the Memoranda of Agreement as admitted judicial admissions, given that both parties had stipulated their existence during the pre-trial.
      • The finding that ownership and the right to bar access belonged to Maris Trading (and by extension, to the Guiang spouses) was erroneous.
    • The crux of the debate centered on the evidentiary status of the Memoranda and the legal effect of the judicial admissions made during the pre-trial conference.

Issues:

  • Admissibility and Evidentiary Effect of the Memoranda of Agreement
    • Whether the Memorandum of Agreement of May 2, 1975, and the subsequent Memorandum of Agreement were judicially admitted in the pre-trial stipulation and thus should be considered as part of the evidence despite not being formally offered at trial.
    • Whether the judicial admissions, by virtue of Section 2, Rule 129 of the Revised Rules of Court, are binding unless shown to have been made through a palpable mistake.
  • Validity of the Second Memorandum of Agreement
    • Whether the second Memorandum of Agreement is valid despite the allegation that it was executed by Aurora Guiang without the marital consent of her husband, Federico Guiang.
    • Whether Federico Guiang’s signature as a witness implies his consent and thereby validates the agreement.
  • Rights Conferred and Stipulation pour Autrui
    • Whether the transfer of possessory rights over the land to Maris Trading was intended to benefit a third party (petitioner Marmont) and qualifies as a stipulation pour autrui under Article 1311 of the Civil Code.
    • Whether the contractual intent was solely to facilitate the water supply facility for the hotel, thus precluding respondent spouses from denying access.
  • Liability for Damages and Breach of Good Faith
    • Whether the refusal of the Guiang spouses to permit repairs and additional installations constitutes a breach of principles of honesty, good faith, and fair dealing as enshrined in Articles 19 and 21 of the Civil Code.
    • Whether such conduct merits the imposition of damages upon the respondents.

Ruling:

  • (Subscriber-Only)

Ratio:

  • (Subscriber-Only)

Doctrine:

  • (Subscriber-Only)
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