G.R. No. L-26173, July 13, 1927
ZACARIAS ROBLES, plaintiff-appellee, vs. LIZARRAGA HERMANOS, defendant-appellant.

Ponente: STREET, J.

FACTS

Zacarias Robles (plaintiff) leased the hacienda “Nahalinan” from his mother, the administratrix of his father’s estate, for six years (1915-1920). The lease contract stipulated that permanent improvements made by the lessee would be at his expense without right to indemnity at the term’s end. Robles made substantial improvements and supplied equipment to the hacienda. In 1917, after his mother’s death, Robles and his siblings became co-owners of the hacienda. They negotiated to sell the entire Robles estate, including the hacienda, to Lizarraga Hermanos (defendant). A complication arose because Robles’s lease still had over two years to run. To facilitate the sale, Robles agreed to surrender the remaining two years of his lease. In consideration for this surrender, Lizarraga Hermanos allegedly agreed to pay Robles the value of all improvements he had made and to purchase from him all his personal property on the hacienda (crop, cattle, implements). The deed of absolute sale was executed, conveying the siblings’ hereditary rights to the defendant. However, Lizarraga Hermanos later refused to pay Robles for the improvements and movables. Robles filed an action to recover compensation for the improvements, the value of the implements and farming equipment, and damages for breach of contract. The trial court ruled in favor of Robles. Lizarraga Hermanos appealed.

ISSUE

1. Whether the defendant, Lizarraga Hermanos, is obligated to pay the plaintiff, Zacarias Robles, for the improvements and movables on the hacienda, despite the improvements having become part of the realty and the movables not being explicitly mentioned in the deed of sale.
2. Whether the plaintiff is entitled to damages for the defendant’s failure to take the existing crop of cane at the proper time.

RULING

1. YES, the defendant is obligated to pay for the improvements and movables. The Supreme Court affirmed the trial court’s decision.
* On the Improvements: The Court held that while it was true the fixed improvements became part of the realty and passed to the defendant with the land via the deed of sale, the central question was whether the defendant was obligated to indemnify the plaintiff for his outlay. The Court found that the defendant’s promise to pay for these improvements was the consideration for the plaintiff’s agreement to surrender the last two years of his favorable lease. This promise was separate from the sale of the hereditary rights and created a personal obligation on the part of the defendant. The validity of this promise was upheld.
* On the Movables (Personal Property): The Court rejected the defendant’s argument that the movables were included in the sale of the “hereditary rights.” The deed of sale only conveyed the grantors’ rights and participation in their mother’s estate. The movables (cattle, implements, etc.) were the plaintiff’s personal property, acquired with his own funds during his leasehold. They did not form part of the hereditary estate of Anastacia de la Rama and therefore were not conveyed by the deed. The defendant’s promise to purchase these items was a valid, separate agreement.

2. YES, the plaintiff is entitled to damages for the crop. The Court sustained the award of damages (P1,142) for the defendant’s failure to take the existing cane crop promptly. The defendant’s late notice (November 1917) that it would not take the crop left the plaintiff without time to arrange for harvesting and milling, causing delay. The Court agreed with the trial court’s use of judicial notice that protracted delay in milling sugar cane results in loss, and found the estimated damage reasonable.

DISPOSITIVE PORTION:
The judgment of the trial court is AFFIRMED, with costs against the appellant.