INTERPRETATION OF DOCUMENTS 10.

10. Horrigan also stated that she stopped paying the yearly increase since August 1986
HORRINGAN V. TROIKA | GR NO. 148411
SANDOVAL GUTIERREZ, J.
Respondent Troika Commercial Inc. (Troika) is the lessee of the entire ground floor of a two-
story building in Annapolis St., San Juan, Metro Manila. Troika sub-let a portion of this
ground floor to petitioner Martha Horrigan to be used for her restaurant Tia Maria. The
aforementioned parties had different interpretations of the phrase "a guaranteed yearly
increase equivalent to 10% thereof whether it referred to (a) the Php 12,500 monthly rental
or (b) only to the additional Php 4,500 rental increase. The Court sided with the respondent's
interpretation [interpretation (a)] citing Article 1377 of the Civil Code and Section 17 Rule
130 as its legal bases.
DOCTRINE
Section 17, Rule 130 of the ROC
Of two constructions, which preferred. 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.
FACTS
1. Respondent Troika is the lessee of the entire ground floor of a two-story building in 53-
A Annapolis Street, San Juan, Metro Manila.
2. Troika then sub-let a portion of his leased floor to petitioner Martha Horrigan to be used
for her restaurant Tia Maria.
3. The contract of sub-lease was prepared by Horrigan's husband. The following are the
contentious provisions:
2. In consideration thereof, Martha R. Horrigan undertakes, promises and
guarantees payment to Troika of the following:
because of the demand of Troika for her to pay the 10% increase on the Php 12,000.
11. The RTC ruled in favor of Troika and was upheld in toto by the CA.
12. Hence the instant review on certiorari by the Supreme Court.
ISSUE with HOLDING
1. Whether or not the CA correctly ruled that the interpretation of Troika (i.e. 10% applies
to both the original rental and the additional monthly rental) YES, the interpretation
of Troika should be followed.
a. Article 1377 of the Civil Code provides: The interpretation of obscure words
or stipulations in a contract shall not favor the party who caused the
obscurity.
i. Jurisprudence has consistently held that the party who causes the
obscurity in a contract should bear the responsibility and the same
must be construed against him. In this case, it was Horrigan's
spouse who prepared the sub-lease contract in question and
she is presumed to have confirmed the same.
b. The 10% guaranteed yearly increase provision is for the benefit of Troika,
hence it should be interpreted in favor of Troika.
i. Section 17 Rule 130 of the ROC states that when different
constructions of a provision are otherwise equally proper, what
is to be followed is the interpretation which is the most
favorable to the party in whose favor the provision was made
DISPOSITIVE PORTION
WHEREFORE, the petition is DENIED. The challenged Decision of the Court of Appeals in
CA-G.R. CV No. 50330 is AFFIRMED IN TOTO. Costs against the petitioner.
SO ORDERED.

2.1 Php 12,500 monthly starting March 15, 1984 and every month OTHER NOTES
thereafter until December 31, 1989 payable every ___ day of the I'm not sure but this could be the Tia Maria that the case is talking about hehehe:
month.
2.2 In addition to the above (sub-par. 2.1), Php 4,500 monthly starting
August 1, 1983 and every month thereafter for seven (7) years until
December 31, 1989 plus a guaranteed yearly increase equivalent
to 10% thereof.

4. Troika construes the underlined statement to apply to both the original monthly rental
of Php 12,500 and the additional Php 4,500.
5. Horrigan on the other hand claims that such statement only applies to the additional
Php 4,500 monthly.
6. Troika sent Horrigan letters, together with billing statements explaining the 10% yearly
increase of all rental rates but Horrigan ignored them.
7. Troika sent a final demand letter on May 3, 1991 demanding Php 318,489.
8. When Horrigan still refused to pay, Troika filed with the RTC Branch 148 of Makati City
a complaint for the collection of a sum of money.
9. Horrigan averred in her defense that she has been paying the corresponding amounts
according to her interpretation since 1984 and admits that from June 1984 she has
been giving respondent a "Php 1,200 monthly ex-gratis" in appreciation of its efforts to
improve her business, but denied that these were rental adjustments. DIGESTER: Kim