Pentacapital Realty Corporation v. Antonio M. Siojo

Summary

PentaCapital Realty Corporation (PCRC) entered into a letter-agreement with Antonio M. Siojo on June 17, 1994, committing to pay P5,770,000.00 within 90 days. When PCRC failed to pay the remaining P4,070,000.00, claiming the obligation was not yet due based on ambiguous contract language, Siojo sought enforcement. The Court of Appeals ruled in favor of Siojo, finding the obligation due and demandable. The Supreme Court affirmed, applying the contra proferentem rule under Article 1377 of the Civil Code, which requires ambiguous contract terms to be interpreted against the party who drafted them. Since PCRC's president drafted the agreement, any obscurity was resolved against PCRC. This case demonstrates the application of fundamental contract interpretation principles in Philippine civil law, particularly the contra proferentem doctrine that protects parties from ambiguities created by the opposing party's drafting.