[G.R. No. 139677.October 5, 1999]
CORPORATION vs. PILIPINO TELEPHONE
Quoted hereunder, for your information, is a
resolution of this Court dated OCT 5, 1999.
G.R. No. 139677(Marubeni
Corporation vs. Pilipino Telephone Corporation.)
is a petition for review on certiorari
of the order, dated July 9, 1999, of the Regional Trial Court, Branch 150,
Makati City, dismissing the petition for declaratory relief filed by petitioner
Marubeni Corporation against respondent Pilipino Telephone Corporation for
failure to state a cause of action.
facts of the instant case are as follows:
Petitioner and respondent
entered into a Build-Transfer Agreement (BTA) dated August 9, 1996 involving
the installation of 400,000 telephone lines in Mindanao. Under the BTA,
petitioner undertook to procure, construct, and interconnect the materials and
equipment for the installation of the said telephone lines. Upon substantial
completion of the project, petitioner agreed to transfer control over the
telephone lines to respondent, which would finance the project with the
revenues obtained from its operation. Under the BTA, petitioner would retain
ownership of the materials and equipment used in the installation of the
telephone lines until it was fully paid by respondent.
Apprehensive that the
creditors of respondent might attach the materials and equipment for the
installation of the telephone lines in the event respondent defaulted,
petitioner filed a petition for declaratory relief in the trial court.
Petitioner sought a declaration that it was the sole owner of the said
materials and equipment. Respondent moved to dismiss the petition on the ground
that it failed to state a cause of action. Respondent argued that the
interpretation of the BTA was not called for because its provisions were not
ambiguous and that it had not been declared in default in paying its creditors.
The petition for declaratory relief was thus premature.
In dismissing the petition
for declaratory relief, the trial court said in its order dated July 9, 1999:
Section 1 of Rule 63 is
specific as to the purpose of declaratory relief. It is to determine any
question of construction or, validity arising, and for a declaration of a person's
right or duties under a deed, will, contract or written instrument whose rights
are affected by a statute, executive order or regulation or any other
governmental regulation before breach or violation thereof. In the instant
petition, petitioner prays that it be declared as the sole and legal owner of
the materials equipments, tools, components, and suppliers which had already
been delivered and installed in their project sites in Mindanao covered by the
Build and Transfer Agreement dated August 9, 1996 and its subsequent amendment
of October 8, 1998.
As correctly pointed out
by the movant [Pilipino Telephone Corporation], the terms and conditions of the
agreement are clear requiring no judicial construction. Their rights and duties
are spelled out clearly and without any ambiguity. Thus, declaration or
construction of its terms is not necessary (Sec. 5, Rule 63).
considered the instant petition is hereby ordered DISMISSED.
Petitioner filed a motion
for reconsideration, which respondent opposed. Respondent argued that any
judgment rendered by the trial court would bind only the immediate parties and
not third parties such as the creditors of respondent. In an order dated August
12, 1999, the trial court denied the motion for reconsideration of petitioner.
Petitioner now raises the
following assignments of error:
I.THE TRIAL COURT COMMITTED GRAVE ERROR IN
ISSUING THE ASSAILED ORDERS (ANNEXES A AND B) GRANTING RESPONDENT'S MOTION TO
DESPITE THE FACT THAT THE REQUISITES
FOR THE SUFFICIENCY OF A PETITION FOR DECLARATORY RELIEF WERE CLEARLY STATED IN
THE PETITION, THEREBY ABROGATING THE CLEAR PROVISIONS OF THE RULES AND CASE LAW
ON THE MATTER.
II.THE TRIAL COURT GRAVELY ERRED IN DISMISSING A PETITION FOR DECLARATOTY
RELIEF PURPOSELY FILED IN ORDER TO PREVENT THE PROLIFERATION OF NUMEROUS SUITS
WHOSE IMMINENCE IS NOT DISPUTED, THEREBY ABROGATING THE CLEAR PROVISIONS OF THE
RULES AND CASE LAW ON THE MATTER.
The instant petition is
As we ruled in Chan v. Galang 1 18 SCRA 345 (1966). it
is discretionary on the part of the court to entertain a petition for
declaratory relief. It may refuse to declare the rights and duties of the
parties under an instrument if the construction of the same is not necessary. 2
Pickel v. Alonzo, 111 SCRA 341 (1982).
Art. 1370 of the Civil Code provides that "if the terms of a contract are
clear and leave no doubt upon the intention of the parties, the literal meaning
of its stipulations shall control." Since petitioner admits in its petition
that the provisions of the BTA are not in any way ambiguous, 3
Petition, Rollo, pp. 17-18.
there is no necessity for all interpretation of the contract.
Furthermore, as correctly
pointed out by respondent, any judgment in the case cannot affect third
parties, such as the creditors of respondent. On this point, Rule 63, §2 of the
Rules of Court provides that "no declaration shall, except as otherwise
provided in these Rules, prejudice the rights of persons not parties to the
petition is DISMISSED. Bellosillo, J.,
Chairman is on official leave.
TOMASITA M. DRIS
Clerk of Court