Waite v. Williams, Chandler & Co.
REITERATIONFacts
The Antecedents: The Obras Pias were declared owners of certain houses in Manila, formerly owned by Ricardo Regidor. On May 21, 1903, the Obras Pias were placed in actual possession of the property. Prior to this, Regidor had leased the property to Williams, Chandler & Co. (defendants) under a contract where rent was payable in advance within the first five days of the month. On May 13, 1903, Regidor assigned the rent for May to the plaintiff, Frederick Garfield Waite. The defendants were notified of this assignment on May 16, 1903, and payment of $325 was demanded. On May 21, 1903, the defendants were notified by the sheriff that the Obras Pias had taken possession and that rent from that date should be paid to them. The defendants paid the Obras Pias the portion of the rent corresponding to the period from May 21 to the end of the month, leaving a balance of $216.66 in their hands. Procedural History: The plaintiff brought an action against the defendants to recover the full sum of $325. The lower court rendered judgment in favor of the plaintiff. The defendants moved for a new trial, which was denied, and they appealed to the Supreme Court. The Petition: The defendants appealed the judgment, claiming it should be reversed because the Obras Pias was a necessary party. This objection was not raised in the lower court.
Issue(s)
Whether the failure to implead the Obras Pias as a necessary party constitutes a valid ground for reversal on appeal. Whether the plaintiff, as assignee of Regidor, is entitled to the full rent for May 1903, or only the portion corresponding to Regidor's period of ownership. Whether Regidor's good or bad faith affects the rights of the assignee and the tenants regarding the rent.
Ruling
The Supreme Court modified the judgment of the lower court, ordering the plaintiff to recover the sum of $216.66 from the defendants, with interest and costs.
Ratio Decidendi
On the issue of the Obras Pias as a necessary party: The Court held that the objection regarding the Obras Pias being a necessary party was not made in the court below, either by demurrer or answer. Therefore, this objection was deemed waived, as provided by Section 93 of the Code of Civil Procedure and jurisprudence. The defendants could not raise this issue for the first time on appeal. On the entitlement to the rent for May 1903: The Court applied Article 355 and Article 451 of the Civil Code, which state that civil fruits are considered daily proceeds and belong to the possessor in good faith in proportion to the time of possession. For the first twenty days of May, Regidor was the owner and entitled to the rent. From May 20th to the end of the month, the Obras Pias were the owners and entitled to the rent produced during that period. The rent for the entire month was thus divided proportionally. Regidor assigned his right to the rent for the first twenty days to the plaintiff. On the effect of Regidor's good or bad faith: The Court noted that the contract between Regidor and the defendants, stipulating rent payable in advance, could not affect the rights of the Obras Pias. Regidor had no right to rent the property for any period after May 20th and could not deprive the Obras Pias of rent for that period. The finding in a previous case that Regidor was not a possessor in good faith was relevant for accounting for past rents but did not alter the principle of proportional division of rent based on ownership periods for the month in question. For the defendants (Williams, Chandler & Co.), Regidor's good or bad faith was not important in determining their obligation to pay rent proportionally to the actual owners.
Main Doctrine
Civil fruits, such as rent, are considered daily proceeds and belong to the possessor in good faith in proportion to the time of possession. An assignment of rent cannot affect the rights of the true owner of the property for periods after the assignment.