DOCTRINE: When it is not shown that words or phrases have a technical or special use, and they are susceptible of two interpretations, that interpretation most favorable to the party in whose favor they are used must be given.


This action was brought on April 12, 1911, by Rafael, Antonio, Trinidad, Cayetano, Rosario, Gertrudis and Carmen Enriquez, and Antonio Gascon (the latter being a minor, was represented by his guardian ad litem), as owners and lessors of the property Nos. 72, 74, an 76 Escolta, city of Manila, against A. S. Watson & Company, Ltd., as lessee of said property. The plaintiffs allege that on June 22, 1906, Rafael, Carmen, Antonio, and Trinidad Enriquez and Antonio Gascon executed to the defendant a contract of mortgage and lease upon their participation in that property; that on January 19, 1907, the other plaintiffs executed the same mortgage and lease in favor of the defendant upon their interest in the same property; that the said contract of lease has been terminated by the payment by the plaintiffs to the defendant of the principal and interest of the mortgage; that the said contract of lease is null and of no effect by reason of the minority of the plaintiff Antonio Gascon, who is still a minor; that the defendant, after June 22, 1906, made all the repairs necessary to its business with the approval of the plaintiffs.

However, the property was leased to the defendant for a period of twelve years with permission to renew the lease for a further period of six years.

Moreover,  plaintiffs further allege that there exists in that building a principal wall about one meter in thickness and five meters in height, which extends from the front of the building on the Escolta to the rear of the same; that upon this wall rests the second floor of the building and that it is necessary to safely maintain the building against earthquakes and typhoons; the defendant commenced to destroy and remove the said wall and was on the date of the filing of this complaint actually engaged in the destruction and removal of the same; and unless restrained, would continue such destruction and removal, to the irreparable injury of the plaintiffs; and that the defendant has varied the form and substance of the leased premises.

The plaintiffs therefore prayed that the defendant be prohibited from destroying and removing said wall; that it be ordered to rebuild or replace that part which it had removed or destroyed; and that the contract of lease be declared terminated and rescinded.

As a defense, the defendant alleges that under the provisions of Paragraph M of the contract of lease, it has expended the sum of over sixty thousand pesos in improving the leased premises, and that on making such expenditure it believed that it would be reimbursed by enjoying the occupancy and subrenting of the premises.(Paragraph M:The lessee may make such works on the building as the business which it has established therein requires, provided always that neither the strength nor the value of the said building is impaired.)

On the 24th day of May, 1911, The Philippines Drug Company, a corporation organized under the laws of the Philippine Islands, appeared and asked leave to intervene as an interested party. It alleged, as did the defendant, the necessity for the removal of the wall in question in order to give it more space as required by its business, and that the removal of this wall was authorized in Paragraph M of the original lease.

The trial court denies the rescission and declaration of nullity of the contract of lease demanded by the plaintiffs, declaring such contract of lease to be valid and subsisting and binding upon the parties  and upon the sublessee and intervener, the Philippine Drug Company, and continues and declares final the preliminary writ of injunction issued herein on the 12th day of April, 1911, but modifying the same by permitting the defendant, A. S. Watson & Co. Ltd., or the intervener, the Philippines Drug Company, to remove the wall in question on the condition that they substitute it with properly constructed concrete pillars and arches and such other work as may be necessary.

From this judgment the plaintiffs appealed and make the following assignment of errors: 1. The judgment is erroneous in not having declared rescinded the contract of lease.2. The judgment is erroneous in finding that the lessee and sublessee have the right to change the form and substance of the property leased.3. The judgment is erroneous in finding that the lessee acted in good faith in beginning the destruction of the wall believing that under the contract of lease it had the right to do this.4. The judgment is erroneous in not finding that the building is weakened by the destruction of the wall.5. The judgment is erroneous is so far as it modifies the preliminary injunction.6. The judgment is erroneous in not declaring perpetual the preliminary injunction.7. The judgment is erroneous in the dispositive part thereof relating to the form and manner of making the modifications in the property because it does not relate to anything at issue in the case.8. The judgment is erroneous in the part relating to the form and manner of making the modifications in the property because it does not dispose of anything judicially, but, on the contrary, gives permission to the opposing parties without commanding them to do anything.9. The judgment is erroneous because it does not order the repair of the destruction made in the wall.10. The judgment is erroneous because it declares valid the contract of lease.11. The court erred in denying the motion for a new trial.

ISSUE: WON the appellees have violated the terms of the contract of lease and thereby entitle the appellants to have said contract of lease rescinded.


Before considering the contract in question, it might be well to examine the right of the lessee to make changes in the property leased, if there were no express stipulation therefor in the contract.

Article 1573 of the Civil Code provides:

A lessee shall have, with regard to the useful and voluntary improvements, the same rights which are granted the usufructuary.

Article 487 of the same code reads:

The usufructuary may make on the property which is the object of the usufruct any improvements, useful or for recreation, which he may deem proper, provided he does not change its form or substance; but he shall have no right to be indemnified therefor. He may, however, remove said improvements, should it be possible to do so without injury to the prope he result is that the lessee may make any improvements, useful or for recreation, in the property leased that he may deem proper, provided that he does not change its form or substance.

In the said contract of lease, two clauses deserves careful consideration, to wit:

Clause K:

All the expenditures for cleaning, painting, and repairs which the building may require and all that is ordered done by the Board of Health, will be at the expense of the lessee, A. S. Watson and Company, Limited.

Clause M:

The lessee may make such works on the building as the business which it has established therein requires, provided always that neither the strength nor the value of the said building is impaired.

It will be noted that the word “reparaciones” is used in Clause K, and the word “obras” in Clause M. Counsel for the appellants insist that the word “obras” as thus used means the same as “reparaciones.” The Encyclopedic Dictionary of the Castilian Language (Diccionario Enciclopedico de la Lengua Castellana) defines these words as follows:


1. A thing made or produce by an agent.

x x x             x x x x x x

4. A building in course of construction.


1. The action an effect of repair. (Reparar-verb: To mend, to straighten, or correct the damage suffered by something.)

The New Dictionary of the Castilian Language (Nuevo Diccionario de la Lengua Castellana) defines the same words as follows:


Anything made, created, or produced by the some power or agent. Any construction of architecture, masonry, or carpentry, applied especially to buildings in course of construction or repair, as: “There are three jobs in Calle Hortaleza. Everything in my house is disordered and topsy-turvy because of the work.”


The act or effect of repairing or of being repaired. The fact of the repairing, in the sense of renewing or improving something.

The only synonym given in this work for “obra” is produccion.”

It may be that repairs are included in the definition of “obras.” Nevertheless, it cannot be denied that the word “obras,” used in its general sense, has a far more comprehensive meaning than just simple repairs.

Sections 290 and 293 of the Code of Civil Procedure, provide:

SEC. 290. Terms of a writing presumed to be in their ordinary sense. — The terms of a writing are presumed to have been used in their primary and general acceptation, but evidence is nevertheless admissible that they have a local, technical or otherwise peculiar signification, and were so used and understood in the particular instance, in which case the agreement must be construed accordingly.

SEC. 293. Where intention of different parties to instrument not the same. — When the terms of an agreement have been intended in a different sense by the different parties to it, that sense is to prevail against either party in which he supposed the other understood it; and when different constructions of a provision are otherwise equally proper, that is to be taken which is the most favorable to the party in whose favor the provision was made.

In the case at bar no proof has been presented tending to show that the word “obras” was used in a technical or special sense, or that it has a local signification, and therefore, it must be considered as used in its ordinary and general sense. If there exist any ambiguity and if the meaning that the appellants give to the word “obras” is proper, the meaning given by the appellees is likewise proper, consequently, we must apply the rule laid down in section 293, above quoted, for the reason that the stipulation contained in Clause M of the contract is a stipulation in the favor of the lessee.

Counsel for appellants insist that in order to define the meaning of the word “obras” we should refer to the articles of the Civil Code that deal with contracts of lease. This might be done in those cases where the intention of the parties could not be ascertained from either the contract itself or from the conduct of the parties in executing and carrying out the same. In the case at bar, all that is necessary is to give a fair and reasonable interpretation to the meaning of clause M of the contract of lease. This clause contains certain limitations on the exercise of the right to make alterations (obras): first, the alterations (obras) proposed to be made must be required by the business; second, such alterations must not injure the solidity of the building; and third, the same must not prejudice the value of the building. But it is insisted, as we have said, that the word “obras” in clause M must be interpreted to mean “reparaciones” as used in Clause K. Clause K imposes upon the lessee the obligation to make the repairs required by the building for its conservation. If the words have exactly the same meaning and were intended by the parties to mean the same thing, then the insertion of clause M would only have had the effect of giving to the lessee the right to keep the building in repair, when, as a matter of fact, Clause K made it its duty to repair the building. As we understand the contract, in Clause K a duty is imposed upon the lessee, while in Clause M a right is given to it. In Clause K the word “reparaciones” is used in connection with the duty, and in clause M the word “obras” is used in connection with the right. If the contracting parties had intended that the two words be used in the same sense they would have so stated, or they would have eliminated Clause M entirely as being useless, as it is meaningless to say that when a duty is imposed upon a person it is necessary to expressly give him a right to perform that duty. If he did not have the right to perform that duty, the same would not have been imposed upon him. The stipulations in Clause M are expressed as clearly and explicitly as they could have been under the circumstances. At the time of the execution of this contract of lease, it was impossible to know what would be the requirements of the business during its term of eighteen years. It was likewise impossible for the parties to have then agreed in detail as to the changes that might be necessary. The lessee wished to reserve to itself the right to make the changes in the property required by its business, and none of the parties could anticipate what might be required during this long period of time. This right was conferred upon the lessee by the lessors, but the right, as we have said, had its limitations: that is, the lessee could not prejudice the solidity or the value of the building without breaking the contract.

The question was raised as to whether the conduct of the parties in carrying out the terms of this lease has been such as to show or indicate their intention or understanding of the meaning of the word “obras” when they inserted this word in Clause M. Upon this point the trial court said:

That under and by virtue of the said contract of lease, the defendant company entered into possession of the leased premises, making therein alterations and repairs at a cost of some P60,000, including the removal of the whole front of the building facing upon the Escolta and replacing the same upon the new street line, established by the city of Manila, with a modern and a decorative commercial front; the removal of the heavy tiled roof and the replacing of the same with a light galvanized roof; the removal of various walls and replacing the same with steel columns and girders; the tearing down and rebuilding of a part of the building and the adding thereto of a camarin upon the Pasig River; and the building of a river wall and reclamation of a considerable amount of ground; and which alteration included the removal of that part of the wall in question which extended from point A to point G on the plan of the premises introduced in evidence as defendant’s Exhibit No. 9, all of which repairs, alterations and improvements, were made with final approval of the plaintiffs, although after much controversy and many disagreements, and to which alterations and improvements the plaintiffs contributed the sum of about eighteen hundred pesos paid by the city of Manila for the expropriation for street purposes of the small strip along the front of the building heretofore mentioned.

Therefore, the judgment appealed from should be affirmed with costs against the appellant.

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