Case Summary (G.R. No. L-22558)
RTC Dismissal and Subsequent Amendment
Respondent sued in the Court of First Instance of Manila on May 7, 1958, seeking to compel street construction or damages. Gregorio Araneta, Inc. defended that no definite period for performance had been fixed and that the remedy of specific performance was premature. The trial court initially dismissed the complaint (May 31, 1960). Upon respondent’s motion for reconsideration asking the court to fix a period, the court amended its judgment (July 16, 1960) to grant the seller two years from notice to perform. A motion for reconsideration by the seller was denied (August 16, 1960).
Findings and Ruling of the Court of Appeals
On appeal, petitioner argued that neither pleading nor evidence justified court-imposed deadlines and that the trial court changed theories post-submission. The Court of Appeals held that petitioner’s answer had placed the absence of a fixed period in issue by pleading entitlement to “reasonable time,” thus allowing the court to fix a period. It affirmed with modification, granting a two-year period from finality to construct the streets on three sides so the lot would be surrounded by streets.
Issues on Fixing Period of Performance under Article 1197
Article 1197 authorizes courts to fix performance periods only when “the obligation does not fix a period” or makes it dependent on the debtor’s will. The Supreme Court recognized that petitioner’s plea of “reasonable time” raised the question whether the parties had already agreed on a period. If a “reasonable time” existed, the court’s task was solely to determine whether it had elapsed, not to set a new period.
Supreme Court Analysis on Pleadings and Necessity of Court Intervention
The petition alleged breach and sought damages on the theory the period had expired; it did not pray for the fixing of a new deadline. Under established procedure, a court may not sua sponte amend the complaint’s theory or relief by imposing a performance period not requested. Accordingly, absent an express or implied prayer to fix time for performance, the trial court erred in granting respondent’s motion to establish a deadline.
Supreme Court Analysis on Determination of Reasonable Period
Even if the court had authority to fix a period, Article 1197 requires that the prescribed time be “probably contemplated by the parties,” based on nature and circumstances. The trial court’s bare assertion that “proven
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Facts of the Case
- J.M. Tuason & Co., Inc. owned a large tract of land in Quezon City (Sta. Mesa Heights Subdivision), covered by Torrens title.
- On July 28, 1950, through Gregorio Araneta, Inc., J.M. Tuason & Co. sold 43,034.4 sqm of this land to Philippine Sugar Estates Development Co., Ltd. for ₱430,514.00.
- The buyer completed the construction of Sto. Domingo Church and Convent as agreed.
- Gregorio Araneta, Inc. began street construction around the parcel but could not finish the northeast street (“Sto. Domingo Avenue”) due to a squatter, Manuel Abundo, occupying part of the route.
- On May 7, 1958, Philippine Sugar Estates Development Co., Ltd. sued J.M. Tuason & Co. and Gregorio Araneta, Inc. in the Court of First Instance of Manila, seeking specific performance or damages for failure to complete the streets.
Contractual Stipulations
- Buyer’s obligation: “Build on the said parcel of land the Sto. Domingo Church and Convent.”
- Seller’s obligation:
- “Construct streets on the NE, NW and SW sides of the land herein sold so that the latter will be a block surrounded by streets on all four sides.”
- “The street on the NE side shall be named ‘Sto. Domingo Avenue.’”
- The deed expressly acknowledged the presence of squatters on part of the street alignment.
Procedural History
- Trial court (May 31, 1960): Dismissed plaintiff’s complaint, holding the action premature because no fixed period for performance existed.
- Plaintiff’s motion for reconsideration: Requested that the court fix a period for performance.
- Trial court (July 16, 1960): Granted reconsideration and amended its judgment to give Gregorio Araneta, Inc. two years from notice to complete the streets.
- Trial court (August 16, 1960)