G.R. No. 48618; September 27, 1943
FRANCISCO ABELARDE and ADELA ARAULLO, plaintiffs-appellants, vs. MARIA LOPEZ, ET AL., defendants; MARIA LOPEZ, appellee.

FACTS

Plaintiffs-appellants Francisco Abelarde and Adela Araullo sold their sugar haciendas (Canaan Nos. 1 and 2, Milagros, and Patrocinio) to defendant-appellee Maria Lopez through a “dacion en pago” deed dated October 15, 1936. This deed was executed to settle a judgment debt from a foreclosure case (Civil Case No. 6050), the rights to which had been assigned to Lopez. The deed contained a clause wherein the appellants renounced in favor of Lopez “cualquier derecho, titulo, interes, participacion, accion, renta” (any right, title, interest, participation, action, rent) they had or might have in relation to the conveyed parcels. A dispute arose over whether this sale included the sugar quota (34,227.34 piculs) allocated to the haciendas under Act No. 4166. The appellants sued Lopez for payment for the use of this quota, claiming it was not included in the sale. The trial court absolved Lopez. The appellants appealed, arguing the quota was excluded, citing non-compliance with Executive Order No. 873, which required registration and specific description of the sugar coefficient in the transfer instrument. Evidence showed that Lopez’s attorney later presented forms for the quota’s assignment, which Abelarde initially signed but ultimately, both appellants refused to complete.

ISSUE

Whether the sale of the sugar haciendas from Abelarde and Araullo to Lopez included the sugar quota allocated under Act No. 4166.

RULING

Yes, the sugar quota was included in the sale. The Supreme Court affirmed the trial court’s judgment.
1. The express waiver clause in the deed of conveyance, wherein the appellants renounced all rights and interests in the lands, plainly included the sugar quota or allotment.
2. Even without that clause, the conveyance of the sugar haciendas would have carried the sugar allotment by operation of law, as Act No. 4166 deemed such provisions “an improvement attaching to the land entitled thereto.” At the time of the sale, sugar lands were practically useless without their allotment, making it inconceivable that Lopez would purchase them without it.
3. The appellants’ argument regarding non-compliance with Executive Order No. 873’s formalities (registration and specific description) is without merit. The parties’ clear intention to include the quota made these formalities subsequent steps that did not invalidate the transfer. The appellants’ subsequent refusal to sign the required assignment forms, after Abelarde had initially signed one, constituted a violation of their duty under Article 1279 of the Civil Code to complete the necessary formalities of a valid contract and was an attempt to take advantage of their own wrong.
4. The Court upheld the trial court’s findings discrediting testimony about an oral agreement excluding the quota and finding the purchase price adequate given the foreclosure context.
The judgment absolving appellee Maria Lopez was affirmed.