1-15 Obligon Cases (Detailed)

CASE # 1G.R. No. L-7859February 12, 1913VICTRIA SEANE, a!"#$#%&ra&r#' o( T)e I$&e%&a&e E%&a&e o( E!uar!o Far*a%, plaintif-appellee, vs.CATALINA FRANC, a!"#$#%&ra&r#' o( T)e I$&e%&a&e E%&a&e o( +a$ue, Fra$-o, defendant-appellant.Ramon Salinas, for appellant.Gibbs, McDonough and Blanco, for appellee.+RELAN., J.:This is an appealfroma judgment of the Court of First Instance ofZamboanga in favor of the plaintif, holding that the right of actionupon the mortgage debt hich as the basis of the claim presentedagainst the plaintif!s estate had prescribed.The mortgage in "uestion as e#ecuted on the $%th of &ctober, $''(,to secure thepa)ment of the sumof *(,'+,.-$, themortgagoragreeing to pa) the sum .little b) little.. The claim appears to havebeen presented to the plaintif!s intestate on the 'th of /ugust, $0$$.1othing has been paid either of principal or of interest.2eareof theopinionthat thiscasefallsithintheprovisionsofarticle $$3' of the Civil Code, hich reads as follos:$$3'. 2hen the obligation does not 4# a term, but it can beinferred from itsnatureandcircumstancethatthere asanintention of granting it to the debtor, the courts shall 4# theduration of such a term.The courts shallalso 4# the duration of a term hen it ma)have been left at the ill of the debtor.The obligation in "uestion seems to leave the duration of the periodfor the pa)ment thereof to the ill of the debtor. It appears also thatit as the intention of the instrument to give the debtor time ithinhichtopa)theobligation. Insuchcasesthiscourthasheld, onseveral occasions, that the obligation is not due and pa)able until anaction has been commenced b) the mortgagee against the mortgagorfor the purpose of having the court 4# the date on and after hich theinstrument shall bepa)ableandthedateof maturit)is 4#edinpursuance thereof. The case of Eleizegui vs. The Manila a!n Tennis"lub 53 *hil. 6ep., %-07, in hich the opinion as ritten b) the Chief8ustice of the court, is the leading case upon the subject. In that casethe "uestion as over the duration of a lease concerning .a piece ofland for a 4#ed consideration and to endure at the ill of the lessee..In discussing the "uestion the court said 5p. %$-7:2ith respect to the term of the lease the present "uestion hasarisen. Inits discussion three theories havebeen presented:&nehichma9esthedurationdependupontheill of thelessor, ho, upon one month!s notice given to the lessee, ma)terminate the lease so stipulated: another hich, on thecontrar), ma9es it dependent upon the illof the lessee, asstipulated: and the third, in accordance ith hich the right isreserved to the court to 4# the duration of the term.The clause on hich the case turns is as follos 5p. %$37:;r. 2illiamson, or hoever ma) succeed him as secretar) ofthe club, ma) terminate this lease henever desired ithoutother formalit) than that of giving a month!s notice. Theoners of the land underta9e to maintain the club as tenant aslong as the latter shall see 4t.Considering the case the court said 5%$(7:The Civil Code has made provision for such a case in all 9indsof obligations. In spea9ing in general of obligations ith a termit has supplied the de4cienc) of the former la ith respect tothe .duration of the term hen it has been left to the ill ofthe debtor,. and provides that in this case the term shall be4#ed b) the courts. 5/rt. $$3', sec. 3.7 In ever) contract, aslaid don b) the authorities, there is ala)s a creditor ho isentitled to demand the performance, and a debtor upon homreststheobligationtoperformtheunderta9ing. Inbilateralcontractsthecontractingpartiesaremutuall)creditorsanddebtors. Thus, inthis contract of lease, thelesseeis thecreditor ith respect to the rights enumerated in article $cult as to be manifestl) be)ond thecontemplation of the parties, the court should be authoriGed toreleasetheobligorinholeorinpart. Theintentionof theparties should govern and if it appears that the service turnsout to be so di>cult as to have been be)ond theircontemplation, it ould be doing violence to that intention toholdtheircontemplation, itouldbedoingviolencetothatintention to hold the obligor still responsible. 2In other ords,fair and s"uareconsiderationunderscores the legalprecept therein.1aga Telephone Co., Inc. remonstrates mainl) against the applicationb) the Court of /ppeals of /rticle $3,+ in favor of Camarines @ur IIBlectric Cooperative, Inc. in the case before us. @tated diferentl), theformer insists that thecomplaint shouldhavebeendismissedforfailure to state a cause of action.Theantecedent facts, asnarratedb)respondent Courtof /ppealsare, as follos:*etitioner 1aga Telephone Co., Inc. 51/TBCC&7 is a telephonecompan) rendering local as ell as long distance telephone service in1aga Cit) hile private respondent Camarines @ur II BlectricCooperative, Inc. 5C/@A6BC& II7 is a private corporation establishedforthe purposeof operatinganelectricpoer serviceinthesamecit).&n 1ovember $, $0++, the parties entered into a contract 5B#h. ./.7for the use b) petitioners in the operation of its telephone service theelectric light posts of private respondent in 1aga Cit). In considerationtherefor, petitioners agreed to install, free of charge, ten 5$-7telephone connections for the use b) private respondent in thefolloing places:5a7 % units = The ;ain &>ce of 5private respondent7:5b7 3 Anits = The 2arehouse of 5private respondent7:5c7 $ Anit =The @ub-@tation of 5private respondent7 atConcepcion *e"ueNa:5d7 $ Anit = The 6esidence of 5private respondent!s7 *resident:5e7$Anit=The6esidenceof 5privaterespondent!s7 /ctingFeneral ;anager: K5f7 3 Anits = To be determined b) the Feneral ;anager. 3@aid contract also provided:5a7 That the term or period of this contract shall be as long asthe part) of the 4rst part has need for the electric light postsof the part) of the second part it being understood that thiscontract shall terminate hen for an) reason hatsoever, thepart) of the second part is forced to stop, abandoned OsicP itsoperationasapublicserviceandit becomesnecessar)toremove the electric lightpost: 5sic7 /It as prepared b) or ith the assistance of the other petitioner, /tt).Cuciano;. ;agga), thenamember of the?oardof Hirectors ofprivate respondent and at the same time the legal counsel ofpetitioner./fter the contract had been enforced for over ten 5$-7 )ears, privaterespondent 4led on 8anuar) 3, $0'0 ith the 6egional Trial Court of1aga Cit) 5?r. 3'7 C.C. 1o. '0-$,(3 against petitioners for reformationof the contract ith damages, on the ground that it is too one-sided infavor of petitioners: that it is not in conformit) ith the guidelines ofthe 1ational Blectri4cation /dministration 51B/7 hich direct that thereasonable compensation for the use of the posts is *$-.-- per post,per month: that after eleven5$$7 )earsof petitioners! useof theposts, thetelephonecablesstrungb)themthereonhavebecomemuchheavieriththeincreaseinthevolumeoftheirsubscribers,orsened b) the fact that their linemen bore holes through the postsat hich points those posts ere bro9en during t)phoons: that a postno costs as much as *3,,%-.--: so that justice and e"uit) demandthat the contract be reformed to abolish the ine"uities thereon./s second cause of action,privaterespondent alleged that startingith the )ear $0'$, petitioners have used %$0 posts in the tons of*ili, Canaman, ;agarao and ;ilaor, Camarines @ur, all outside 1agaCit), ithout an) contract ith it: that at the rate of *$-.-- per post,petitioners should pa) private respondent for the use thereof the totalamount of *3,+,0,-.-- from$0'$ up to the 4ling ofits complaint:andthat petitioners had refusedto pa) private respondent saidamount despite demands./ndasthirdcauseof action, privaterespondentcomplainedaboutthe poor servicing b) petitioners of the ten 5$-7 telephone units hichhad caused it great inconvenience and damages to the tune of notless than *$--,---.--In petitioners! anser to the 4rst cause of action, the) averred that itshould be dismissed because 5$7 it does not su>cientl) state a causeof action for reformation of contract: 537 it is barred b) prescription,the same having been4led more than ten 5$-7 )ears after thee#ecutionof thecontract: and5%7 it isbarredb)estoppel, sinceprivate respondent see9s to enforce the contract in the same action.*etitioners further alleged that their utiliGation of private respondent!spostscouldnothave caused theirdeteriorationbecausethe)havealread) been in use for eleven 5$$7 )ears: and that the value of theire#pensesfor theten5$-7 telephonelineslongenjo)edb)privaterespondent free of charge are far in e#cess of the amounts claimed b)the latter for the use of the posts, so that if there as an) ine"uit), itas sufered b) them.6egarding the second cause of action, petitioners claimed that privaterespondent had as9ed for telephone lines in areas outside 1aga Cit)forhichitspostsereusedb)them: andthatifpetitionershadrefused to compl) ith private respondent!s demands for pa)ment forthe use of the posts outside 1aga Cit), it as probabl) because hatis due to them from private respondent is more than its claim againstthem./ndithrespecttothethirdcauseof action, petitionersclaimed,inter alia, that their telephone service had been categoriGed b) the1ational Telecommunication Corporation 51TC7 as .ver) high. and of.superior "ualit)..Huring the trial, private respondent presented the folloingitnesses:5$7 Hioscoro 6agragio, one of the to o>cials ho signed the contractin its behalf, declared that it as petitioner ;agga) ho prepared thecontract: that theunderstandingbeteenprivaterespondent andpetitioners as that the latter ould onl) use the posts in 1aga Cit)because at that time, petitioners! capabilit) as ver) limited and the)had noe#pectation of e#pansion because oflegals"uabbles ithinthe compan): that private respondent agreed to allo petitioners touseits posts in1agaCit)becausethereereman)subscriberstherein ho could not be served b) them because of lac9 of facilities:and that hile the telephone lines strung to the posts ere ver) lightin $0++, said posts have become heavil) loaded in $0'0.537 Bngr. /ntonio ?orja, Chief of private respondent!s Cine &perationand ;aintenance Hepartment, declared that the posts being used b)petitioners totalled $,(-% as of /pril $+, $0'0, $03 of hich ere inthe tons of *ili, Canaman, and ;agarao, all outside 1aga Cit) 5B#hs..?. and .?-$.7: that petitioners! cables strung to the posts in $0'0 aremuch bigger than those in 1ovember, $0++: that in $0'+, almost $--posts ere destro)ed b) t)phoon @isang: around 3- posts erelocatedbeteen1agaCit)andthetonof *ili hilethepostsinbaranga) Concepcion, 1aga Cit) ere bro9en at the middle hich hadbeen bored b) petitioner!s linemen to enable them to string biggertelephone lines: that hile the cost per post in $0++ as onl) from*+--.-- to *$,---.--, their costs in $0'0 ent up from *$,cers, namel): Bngr. 8oventinoCruG,Bngr. /ntonio ?orja, Bngr. /ntonio ;acandog, ;r. 8esus &pianaand/tt).Cuis Feneral, 8r. beginning 8anuar), $0'0. *laintif!sclaimfor attorne)!s fees and e#penses of litigation anddefendants! counterclaim are both hereb) ordered dismissed.2ithout pronouncement as to costs.Hisagreeingiththeforegoingjudgment, petitioners appealedtorespondentCourt of /ppeals. Inthedecisiondated;a)3', $003,respondent court a>rmed the decision of the trial court,5but basedon diferent grounds to it: 5$7 that /rticle $3,+ of the 1e Civil Codeis applicable and 537 that the contract as subject to a potestativecondition hich rendered said condition void. The motion forreconsiderationasdeniedintheresolutiondated@eptember $-,$003. 2 Eence, the present petition. *etitioners assign the folloing pertinent errors committed b)respondent court:$7 in ma9ing a contract for the parties b) invo9ing /rticle $3,+of the 1e Civil Code:37inrulingthatprescriptionoftheaction forreformation ofthe contract in this case commenced from the time it becamedisadvantageous to private respondent: and %7 inrulingthat thecontract as subject toapotestativecondition in favor of petitioners.*etitioners assert earnestl) that /rticle $3,+ of the 1e Civil Code isnotapplicableprimaril)becausethecontractdoesnotinvolvetherendition of service or a personalprestation and it is not for futureservice ith future unusual change. Instead, the ruling in the case of-cce0a, et al. v. (abson, etc., et al.,7hich interpreted the article,shouldbefolloedinresolvingthiscase. ?esides, saidarticleasnever raisedb)thepartiesintheir pleadingsandasnever thesubject of trial and evidence.In appl)ing /rticle $3,+, respondent court rationaliGed:2e agree ith appellant that in order that an action forreformation of contract ould lie and ma) prosper, there mustbe su>cient allegations as ellas proof that the contract in"uestion failed to e#press the true intention of the parties dueto error or mista9e, accident, or fraud. Indeed, in embod)ingthe e"uitable remed) of reformation of instruments in the 1eCivil Code, the Code Commission gave its reasons as follos:B"uit) dictates the reformationof an instrument inorder that the true intention of the contracting partiesma)bee#pressed. Thecourtsb)thereformationdonot attempt to ma9e a ne contract for the parties, butto ma9e the instrument e#press their realagreement.The rationale of the doctrine is that it ould be unjustand ine"uitable to allo the enforcement of a ritteninstrument hichdoes not reMector disclose therealmeeting ofthe minds ofthe parties. Therigor ofthelegalistic rule that a ritten instrument should be the4nal and inMe#ible criterion and measure of the rightsand obligations of the contracting parties is thustempered to forestall the efects of mista9e, fraud,ine"uitable conduct, or accident. 5pp. ces and other places chosen b)plaintif!s generalmanager hich as the onl) considerationprovided for in said agreement for appellant!s use of plaintifselectric posts. 1ot onl)that, appellant evenstartedusingplaintif!selectricpostsoutside1agaCit)althoughthisasnot provided for in the agreement B#h. ./. as it e#tended ande#pandeditstelephoneservicestotonsoutsidesaidcit).Eence, hile ver) fe ofplaintif!s electric posts ere beingusedb)appellant in$0++andthe)ereall intheCit)of1aga, thenumber of plaintif!selectricpoststhat appellantas usingin$0'0hadjumpedto$,(-%,$03of hichareoutside1agaCit)5B#h. .?.7. /ddtothisthedestructionofsome of plaintif!s poles during t)phoons li9e the strongt)phoon @isang in $0'+ because of the heav) telephonecablesattachedthereto, andtheescalationof thecostsofelectric poles from $0++ to $0'0, and the conclusion is indeedineluctable that the agreement B#h. ./. has alread) becometoo one-sided in favor of appellant to the great disadvantageof plaintif, in short, the continued enforcement of saidcontract has manifestl) gone far be)ond the contemplation ofplaintif, so much so that it should no be released therefromunder /rt. $3,+of the1eCivil Codetoavoidappellant!sunjust enrichment at its 5plaintif!s7 e#pense. /s statedb)Tolentino in his commentaries on the Civil Code citing foreigncivilist 6uggiero,1e/uit# demands a certain economice/uilibrium bet!een the prestation and the counter.prestation, and does not permit the unlimited impoverishmentof onepart#for thebene2t of theother b#thee3cessiverigidit# of the principle of the obligator# force of contracts 5IJTolentino, Civil Code of the *hilippines, $0', ed.,pp. 3(+-3('7.2etherefore, 4ndnothingrongiththerulingof thetrialcourt, although based on a diferent and rong premise 5i.e.,reformation of contract7, that from the date of the 4ling of thiscase, appellant must pa) for the use of plaintif!s electric postsin 1aga Cit) at the reasonable monthl) rentalof *$-.-- perpost, hile plaintif should pa) appellant for the telephones inthe same Cit) that it as formerl) using free of charge underthe terms of the agreement B#h. ./. at the same rate beingpaid b) the general public. In a>rming said ruling, e are notma9ing a necontract for the parties herein,but e 4nditnecessar)to do soinorder not to disrupt thebasic andessential services being rendered b) both parties herein to thepublicandtoavoidunjust enrichment b)appellant at thee#penseof plaintif, saidarrangementtocontinueonl)untilsuch time as said parties can re-negotiate another agreementover the samesubject-matter covered b) the agreement B#h. ./.. &nce saidagreement is reached and e#ecuted b) the parties, theaforesaidrulingof theloercourtanda>rmedb)usshallceasetoe#ist andshall besubstitutedandsupersededb)their ne agreement. . . .. 8/rticle $3,+ spea9s of .service. hich has become so di>cult. Ta9inginto considerationtherationale behindthis provision,9theterm.service. should be understood as referring to the .performance. ofthe obligation. In the present case, the obligation of privaterespondent consists inalloing petitioners to useitsposts in 1agaCit), hich is the service contemplated in said article. Furthermore, abare reading of this article reveals that it is not a re"uirementthereunder that the contract be for future service ith future unusualchange. /ccordingto@enator /rturo;. Tolentino,10/rticle$3,+states in our la the doctrine of unforseen events. This is said to bebasedon the discredited theor) ofrebus sic stantibusinpublicinternational la: under this theor), the parties stipulate in the lightof certain prevailing conditions, and once these conditions cease toe#istthecontractalsoceasestoe#ist. Consideringpractical needsand the demands of e"uit) and good faith, the disappearance of thebasis of a contract gives rise to a right to relief in favor of the part)prejudiced.In a nutshell, private respondent in the &cceNa case 4led a complaintagainst petitioner before the trial court pra)ing for modi2cation of theterms and conditions of the contract that the) entered into b) 4#ingthe proper shares that should pertainto themout of the grossproceeds from the sales of subdivided lots. 2e ordered the dismissalof thecomplaint thereinfor failuretostateasu>cient causeofaction. 2e rationaliGed thatthe Court of/ppeals misapplied /rticle$3,+ because:. . . respondent!s complaint see9snotrelease fromthesubdivision contract but that the court .render judgmentmodif#ingthetermsandconditionsof thecontract . . . b)23ingtheproper sharesthat shouldpertaintothehereinparties out of the gross proceeds from the sales of subdividedlots of subject subdivision.. Thecitedarticle5/rticle$3,+7does not grant the courts 5the7 authorit) to rema9e, modif) orrevise the contract or to 4# the division of shares beteen theparties as contractuall) stipulated ith the force of labeteentheparties, soas tosubstituteitsonterms forthosecovenantedb)theparties themselves. 6espondent!scomplaint for modi4cation of contract manifestl) has no basisinlaandthereforestates nocauseof action. Ander theparticular allegations of respondent!s complaint and thecircumstances therein averred, the courts cannot even ine"uit) grant the relief sought. 11The ruling in the &cceNa case is not applicable because e agree ithrespondent court that the allegations in private respondent!scomplaint and the evidence it has presented su>cientl) made out acause of action under /rticle $3,+. 2e, therefore, release the partiesfromtheircorrelativeobligationsunderthecontract. Eoever, ourdisposition of the present controvers) does not end here. 2e have tota9e into account the possible conse"uences of merel) releasing theparties therefrom: petitioners ill remove the telephone iresQcablesinthepostsof privaterespondent, resultingindisruptionof theirserviceto thepublic: hile privaterespondent,in consonance iththe contract12ill return all the telephone units to petitioners,causing prejudice to its business. 2e shall not allo such eventualit).6ather, e re"uire, as ordered b) the trial court: $7 petitioners to pa)privaterespondent fortheuse of its posts in 1agaCit) and in thetonsof;ilaor, Canaman, ;agarao and *ili, Camarines @urandinother placesherepetitionersuseprivaterespondent!sposts, thesum of ten 5*$-.--7 pesosper post, per month, beginning 8anuar),$0'0: and 37 private respondent to pa) petitioner the monthl) dues ofall its telephones at the same rate being paid b) the public beginning8anuar), $0'0. Thepeculiar circumstancesof thepresent case, asdistinguished further from the &cceNa case, necessitates e#ercise ofour e"uit) jurisdiction.13?) a) of emphasis, e reiterate therationaliGation of respondent court that:. . . In a>rming said ruling, e are not ma9ing a ne contractfor the parties herein, but e 4nd it necessar) to do so in ordernot to disrupt the basic and essential services being renderedb) both partiesherein to the public and to avoid unjustenrichment b) appellant at the e#pense of plaintif . . . . 1/*etitioners! assertion that /rticle $3,+ as never raised b) the partiesin their pleadings and as never the subject of trial and evidence hasbeen passed upon b) respondent court in its ell reasoned resolution,hich e hereunder "uote as our on:First, e do not agree ith defendant-appellant that inappl)ing /rt. $3,+ of the 1e Civil Code to this case, e havechangeditstheor)anddecidedthesameonanissuenotinvo9ed b) plaintif in the loer court. For basicall), the mainand pivotal issue in this case is hether the continuedenforcement of the contract B#h. ./. beteen the parties has,throughthe)ears 5since$0++7, becometooine"uitous ordisadvantageous to the plaintif and too one-sided in favor ofdefendant-appellant, so that a solution must be found torelieve plaintif from the continued operation of saidagreement andtoprevent defendant-appellant fromfurtherunjustl) enriching itself at plaintif!s e#pense. It is indeedunfortunate that defendant had turned deaf ears to plaintifsre"uests for renegotiation, constrainingthelatter togotocourt. ?ut although plaintif cannot, as e have held, correctl)invo9e reformationof contract as a proper remed) 5therehaving been no shoing of a mista9e or error in said contracton the part of an) of the parties so as to result in its failure toe#press their true intent7, this does not mean that plaintif isabsolutel) ithoutaremed) in order torelieve itselffrom acontract that has gone far be)ond its contemplation and hasbecome so highl) ine"uitous and disadvantageous to itthroughthe)ears becauseof thee#pansionof defendant-appellant!s business andtheincreaseinthevolumeof itssubscribers./nd as it is the dut) of the Court to administerjustice, it must do so in this case in the best a) and mannerit caninthelight of theprovenfactsandthelaor lasapplicable thereto.It is settled that hen the trial court decides a case in favor ofa part) on a certain ground, the appellant court ma) upholdthe decision belo upon some other point hich as ignoredor erroneousl)decidedb)thetrial court 5FarciaJaldeG v.TuaGon, (- *hil. 0(%: 6elativo v. Castro, +, *hil. rmed b) us in abrief opinion, e no avail ourselves of the occasion of the 4ling of amotiontorehear b)theattorne)s for theplaintiftomodif)thejudgment inaslight measureandtostatemorefull)thereasonsunderl)ing our decision.ItappearsthatonHecember$3, $0$', theplaintifcontractedhisservicestoTanCiuanandCo., assuperintendent of anoil factor)hich the latter contemplated establishing in this cit). The period ofthe contract e#tended over to )ears from the date mentioned: andthe salar) as to be at the rate of *,-- per month during the 4rst)ear and *+-- per month during the second, ith electric light andater for domestic consumption, and a residence to live in, or in lieuthereof *,- per month./t the time this agreement as made the machiner) for thecontemplatedfactor)hadnot beenac"uired, thoughtene#pellershad been ordered from the Anited @tates: and among the stipulationsinsertedinthecontract iththeplaintifas aprovisiontothefolloing efect:It is understood and agreed that should the machiner) to beinstalled in the said factor) fail, for an) reason, to arrive in thecit) of ;anila ithin a period of si# months from date hereof,this contract ma) be cancelled b) the part) of the second partat its option, such cancellation, hoever, not to occur beforethe e#piration of such si# months.The machiner) above referred to did not arrive in the cit) of ;anilaithin the si# months succeeding the ma9ing of the contract: nor asothere"uipmentnecessar)fortheestablishmentof thefactor)atan) timeprovided b)thedefendants.The reason forthis does notappear ith certaint), but a preponderance of the evidence is to theefect that the defendants, in the 4rst months of $0$0, seeing that theoil businessnolongerpromisedlargereturns, eithercancelledtheorderforthemachiner)fromchoiceorereunabletosuppl)thecapital necessar) to 4nance the project. /t an) rate on 8une 3', $0$0,availing themselves in part of the option given in the clause above"uoted, the defendants communicated in riting to the plaintif thefact that the) had decided to rescind the contract, efective 8une %-ththen current, upon hich date he as discharged. The plaintifthereupon instituted this action to recover damages in the amount of*$%,---, coveringsalar)andper"uisitesdueandtobecomedueunder the contract.Thecasefortheplaintifproceedsontheideathatthestipulationabove "uoted, giving to the defendants the right to cancel thecontract upon the contingenc) of the nonarrival of the machiner) in;anila ithin si# months, must be understood as applicable onl) inthose cases here such nonarrival is due to causes not having theirorigin in the ill or act of the defendants, as dela)s caused b) stri9esor unfavorableconditionsof transportingb)landorsea: anditisurged that the right to cancel cannot be admitted unless thedefendantsa>rmativel)shothat thefailureof themachiner)toarrive as due to causes of that character, and that it did not have itsorigin in their on act or volition. In this connection the plaintif reliesonarticle$3cient reason can be adduced for limiting the operationof the ords conferring the right of cancellation. Apon this point it isour opinion that the language used in the stipulation should be givenefect in its ordinar) sense, ithout technicalit) or circumvention: andin this sense it is believed that the parties to the contract must haveunderstood it./rticle $3