Sing v Feb Leasing

8/9/2019 Sing v Feb Leasing

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principall& considered. If the doubts are cast upon the principal ob?ect of the contract in such a a& that it

cannot be >non hat 7a& have been the intention or ill of the parties, the contract shall be null and

void."%

Thus, the court concluded ith the folloin! disposition2

In this case, hich is held b& this Court as a sale on install7ent there is no chattel 7ort!a!e on the thin!

sold, but it appears a7on!st the Co7plaint@s pra&er, that the plaintiff elected to e9act fulfill7ent of the

obli!ation.

3or the vehicles returned, the plaintiff can onl& recover the unpaid balance of the price because of the

previous pa&7ents 7ade b& the defendants for the reasonable use of the units, speciall& so, as it

appears, these returned vehicles ere sold at auction and that the plaintiff can appl& the proceeds to the

balance. ;oever, ith respect to the unreturned units and 7achineries still in the possession of the

defendants, it is this Court@s vie and so hold that the defendants are liable therefore and accordin!l& are

ordered ?ointl& and severall& to pa& the price thereof to the plaintiff to!ether ith attorne&@s fee and the

costs of suit in the su7 of Php$#,%%%.%%.

SO ORDERED.""

On Dece7ber $, $%%$, 3E4 filed its Notice of (ppeal."$ (ccordin!l&, on 8anuar& ", $%%', the court

issued an Order "' elevatin! the entire records of the case to the C(. 3E4 averred that the trial court erred2

(. hen it ruled that the a!ree7ent beteen the Parties+5iti!ants is one of sale of personal properties on

install7ent and not of lease

4. hen it ruled that the applicable la on the case is (rticle "/1/ )of the Civil Code* and not R.(. No.

1##=

C. hen it ruled that the Plaintiff+(ppellant can no lon!er recover the unpaid balance of the price because

of the previous pa&7ents 7ade b& the defendants for the reasonable use of the units

D. hen it failed to 7a>e a rulin! or ?ud!7ent on the 8oint and Solidar& 5iabilit& of -icente On! 5i7, 8r. to

the Plaintiff+(ppellant."/

On March "#, $%%#, the C( issued its Decision"# declarin! the transaction beteen the parties as a

financial lease a!ree7ent under Republic (ct )R.(.* No. 1##=."= The fallo of the assailed Decision reads2

$HEREORE, the instant appeal is GR"NTED and the assailed Decision dated $$ Nove7ber $%%$

rendered b& the Re!ional Trial Court of Manila, 4ranch /0 in Civil Case No. %%+00/#"

is REVERSED and SET "SIDE, and a ne ?ud!7ent is hereb& ENTERED orderin! appellees 8-5 3ood

Products and -icente On! 5i7, 8r. to solidaril& pa& appellant 3E4 5easin! and 3inance Corporation the

a7ount of T%&ee M'(('on ou& Hun)&e) ou&*een T%ou+n) ou& Hun)&e) S'-* E'/%* Pe+o+ n)

75100 P%3,414,468.75, ith interest at the rate of telve percent )"$F* per annum startin! fro7 the

date of ?udicial de7and on %= Dece7ber $%%%, until full pa&7ent thereof. Costs a!ainst appellees.

SO ORDERED."

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5i7 filed the instant Petition for Revie on Certiorari under Rule /#

contendin! that2

I

The ;onorable Court of (ppeals erred hen it failed to consider that the undated co7plaint as filed b&

Saturnino 8. alan!, 8r., ithout an& authorit& fro7 respondent@s 4oard of Directors and+up

vehicle is of no conse6uence.

-II

The ;onorable Court of (ppeals failed to ta>e into consideration that the contract of lease, a contract of

adhesion, concealed the true intention of the parties, hich is a contract of sale.

-III

The ;onorable Court of (ppeals erred in rulin! that the petitioner is a lessee ith insurable interest over

the sub?ect personal properties.

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The ;onorable Court of (ppeals erred in construin! the intentions of the Court a quo in its usa!e of the

ter7 7erchantabilit&."1

e affir7 the rulin! of the appellate court.

3irst, 5i7 can no lon!er 6uestion alan!@s authorit& as 3E4@s authoriBed representative in filin! the suit

a!ainst 5i7. alan! as the representative of 3E4 in the proceedin!s before the trial court up to the

appellate court. Petitioner never placed in issue the validit& of alan!@s representation before the trial and

appellate courts. Issues raised for the first ti7e on appeal are barred b& estoppel. (r!u7ents not raised in

the ori!inal proceedin!s cannot be considered on revie otherise, it ould violate basic principles of

fair pla&."0

Second, there is no le!al basis for 5i7 to 6uestion the authorit& of the C( to !o be&ond the 7atters

a!reed upon durin! the pre+trial conference, or in not dis7issin! the appeal for failure of 3E4 to file its

brief on ti7e, or in not rulin! separatel& on the petitioner@s 7otion to dis7iss.

Courts have the prero!ative to rela9 procedural rules of even the 7ost 7andator& character, 7indful of

the dut& to reconcile both the need to speedil& put an end to liti!ation and the parties@ ri!ht to dueprocess. In nu7erous cases, this Court has alloed liberal construction of the rules hen to do so ould

serve the de7ands of substantial ?ustice and e6uit&.$% In Aguam v. Court of Appeals , the Court e9plained2

The court has the discretion to dis7iss or not to dis7iss an appellants appeal. It is a poer conferred on

the court, not a dut&. The Gdiscretion 7ust be a sound one, to be e9ercised in accordance ith the tenets

of ?ustice and fair pla&, havin! in 7ind the circu7stances obtainin! in each case.G Technicalities, hoever,

7ust be avoided. The la abhors technicalities that i7pede the cause of ?ustice. The courts pri7ar& dut&

is to render or dispense ?ustice. G( liti!ation is not a !a7e of technicalities.G G5asuits unli>e duels are not

to be on b& a rapiers thrust. Technicalit&, hen it deserts its proper office as an aid to ?ustice and

beco7es its !reat hindrance and chief ene7&, deserves scant consideration fro7 courts.G 5iti!ations 7ust

be decided on their 7erits and not on technicalit&. Ever& part& liti!ant 7ust be afforded the a7plest

opportunit& for the proper and ?ust deter7ination of his cause, free fro7 the unacceptable plea of

technicalities. Thus, dis7issal of appeals purel& on technical !rounds is froned upon here the polic& of

the court is to encoura!e hearin!s of appeals on their 7erits and the rules of procedure ou!ht not to be

applied in a ver& ri!id, technical sense rules of procedure are used onl& to help secure, not override

substantial ?ustice. It is a far better and 7ore prudent course of action for the court to e9cuse a technical

lapse and afford the parties a revie of the case on appeal to attain the ends of ?ustice rather than

dispose of the case on technicalit& and cause a !rave in?ustice to the parties, !ivin! a false i7pression of

speed& disposal of cases hile actuall& resultin! in 7ore dela&, if not a 7iscarria!e of ?ustice.$"

Third, hile e affir7 that the sub?ect lease a!ree7ent is a contract of adhesion, such a contract is not

void per se. It is as bindin! as an& ordinar& contract. ( part& ho enters into an adhesion contract is free

to re?ect the stipulations entirel&.$$ If the ter7s thereof are accepted ithout ob?ection, then the contractserves as the la beteen the parties.

In Section $' of the lease contract, it as e9pressl& stated that2

SECTION $'. ENTIRE (REEMENT SE-ER(4I5ITJ C5(:SE

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the repa&7ent over ti7e of the purchase price of the e6uip7ent, plus financin! char!es, throu!h the

pa&7ent of lease rentals that le!al title is the upfront securit& held b& the financial lessor, a securit&

probabl& superior in so7e instances to a chattel 7ort!a!ees lien.$#

3ourth, the validit& of 5ease No. $20#2$% beteen 3E4 and 8-5 should be upheld. 8-5 entered into the

lease contract ith full >noled!e of its ter7s and conditions. The contract as in force for 7ore than four

&ears. Since its inception on March 0, "00#, 8-5 and 5i7 never 6uestioned its provisions. The& onl&

attac>ed the validit& of the contract after the& ere ?udiciall& 7ade to anser for their default in the

pa&7ent of the a!reed rentals.

It is settled that the parties are free to a!ree to such stipulations, clauses, ter7s, and conditions as the&

7a& ant to include in a contract. (s lon! as such a!ree7ents are not contrar& to la, 7orals, !ood

custo7s, public polic&, or public order, the& shall have the force of la beteen the parties.$= Contractin!

parties 7a& stipulate on ter7s and conditions as the& 7a& see fit and these have the force of la

beteen the7.$

The stipulation in Section "/$1 of the lease contract, that the e6uip7ent shall be insured at the cost and

e9pense of the lessee a!ainst loss, da7a!e, or destruction fro7 fire, theft, accident, or other insurableris> for the full ter7 of the lease, is a bindin! and valid stipulation. Petitioner, as a lessee, has an

insurable interest in the e6uip7ent and 7otor vehicles leased. Section " of the Insurance Code provides

that the 7easure of an insurable interest in propert& is the e9tent to hich the insured 7i!ht be da7nified

b& loss or in?ur& thereof. It cannot be denied that 8-5 ill be directl& da7nified in case of loss, da7a!e, or

destruction of an& of the properties leased.

5i>eise, the stipulation in Section 0." of the lease contract that the lessor does not arrant the

7erchantabilit& of the e6uip7ent is a valid stipulation. Section 0." of the lease contract is stated as2

0." IT IS :NDERSTOOD 4ETEEN T;E P(RTIES T;(T T;E 5ESSOR IS NOT T;E

M(N:3(CT:RER OR S:PP5IER O3 T;E E:IPMENT NOR T;E (ENT O3 T;E M(N:3(CT:RER

OR S:PP5IER T;EREO3. T;E 5ESSEE ;ERE4J (CNO5EDES T;(T IT ;(S SE5ECTED T;E

E:IPMENT (ND T;E S:PP5IER T;EREO3 (ND T;(T T;ERE (RE NO (RR(NTIES,

CONDITIONS, TERMS, REPRESENT(TION OR IND:CEMENTS, EHPRESS OR IMP5IED,

ST(T:TORJ OR OT;ERISE, M(DE 4J OR ON 4E;(53 O3 T;E 5ESSOR (S TO (NJ 3E(T:RE

OR (SPECT O3 T;E E:IPMENT OR (NJ P(RT T;EREO3, OR (S TO ITS 3ITNESS, S:IT(4I5ITJ,

C(P(CITJ, CONDITION OR MERC;(NT(4I5ITJ, NOR (S TO ;ET;ER T;E E:IPMENT I55

MEET T;E RE:IREMENTS O3 (NJ 5(, R:5E, SPECI3IC(TIONS OR CONTR(CT ;IC;

PRO-IDE 3OR SPECI3IC M(C;INERJ OR (PP(R(T:S OR SPECI(5 MET;ODS.$0

In the f inancial lease a!ree7ent, 3E4 did not assu7e responsibilit& as to the 6ualit&, 7erchantabilit&, or

capacit& of the e6uip7ent. This stipulation provides that, in case of defect of an& >ind that ill be found b&

the lessee in an& of the e6uip7ent, recourse should be 7ade to the 7anufacturer. GThe financial lessor,bein! a financin! co7pan&, i.e., an e9tender of credit rather than an ordinar& e6uip7ent rental co7pan&,

does not e9tend a arrant& of the fitness of the e6uip7ent for an& particular use. Thus, the financial

lessee as precisel& in a position to enforce such arrant& directl& a!ainst the supplier of the e6uip7ent

and not a!ainst the financial lessor. e find nothin! contra le!e7 or contrar& to public polic& in such a

contractual arran!e7ent.G'%

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3ifth, petitioner further proffers the vie that the real intention of the parties as to enter into a contract of

sale on install7ent in the sa7e 7anner that a previous transaction beteen the parties over a "00#

Mitsubishi 5+$%% Strada DC+Pic>+:p as initiall& covered b& an a!ree7ent deno7inated as a lease and

eventuall& beca7e the sub?ect of a Deed of (bsolute Sale.

e ?oin the C( in re?ectin! this vie because to allo the transaction involvin! the pic>+up to be read into

the ter7s of the lease a!ree7ent ould e9pand the covera!e of the a!ree7ent, in violation of (rticle

"'$ of the Ne Civil Code. '" The lease contract sub?ect of the co7plaint spea>s onl& of a lease. (n&

a!ree7ent beteen the parties after the lease contract has ended is a different transaction alto!ether and

should not be included as part of the lease. 3urther7ore, it is a cardinal rule in the interpretation of

contracts that if the ter7s of a contract are clear and leave no doubt as to the intention of the contractin!

parties, the literal 7eanin! of its stipulations shall control. No a7ount of e9trinsic aid is necessar& in order

to deter7ine the parties intent.'$

;ERE3ORE, in the li!ht of all the fore!oin!, the petition is DENIED. The Decision of the C( in C(+.R.

C- No. /01 dated March "#, $%%# and Resolution dated Ma& $', $%%# are (33IRMED. Costs a!ainst

petitioner.

SO ORDERED.
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Sing v Feb Leasing

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