Professional Documents
Culture Documents
NATURE Petition for review on Certiorari of the Orders of CFI Manila dismissing petitioners Complaint for Damages based on quasi-delict FACTS - Three-way vehicular accident occurred along Mac-Arthur Highway, Marilao, Bulacan involving (1) Mercedes Benz, owned and driven by petitioner MENDOZA; (2) private jeep owned and driven by respondent SALAZAR; (3) gravel and sand truck owned by respondent TIBOL and driven by MONTOYA. - Mendozas and Montoyas version: After jeep driver overtook the truck, it swerved to the left going towards Marilao, and hit car which was bound for Manila. Before impact, Salazar jumped from the jeep, Mendoza unaware that jeep was bumped from behind by truck - Salazars version: After overtaking truck, he flashed a signal indicating his intention to turn left towards Marilao but was stopped at intersection by a policeman directing traffic. While at stop position, his jeep was bumped at rear by truck causing him to be thrown out of jeep. Jeep then swerved to left and hit the car. - Oct. 22, 1969. In CFI Bulacan, two separate informations for Reckless Imprudence Causing Damage to Proprety were filed against SALAZAR (damage to Mendoza) and MONTOYA (damage to Salazar) - Salazar was acquitted; Motoya found guilty beyond reasonable doubt - Aug. 22, 1970. In CFI Manila, Mendoza filed a civil case against Salazar and Timbol either in alternative or in solidum. - Timbol filed Motion to Dismiss on grounds that complaint is barred by prior judgement; CFI Manila dismissed Complaint against Timbol - Salazar filed Motion to Dismiss; CFI Mla also dismissed Complaint against him on grounds that New Rules of Court rewuires an express reservation of civil action to be made in the criminal action ISSUES 1. WON Mendoza can file an independent civil case against Timbol a) Is the civil suit barred by prior judgment in the criminal case? b) Is the civil suit barred by failure to make a reservation in the criminal action of right to file an independent civil action (as required in Sec.2 of Rule 111)?
SONG FO & CO. V HAWAIIAN- PHILIPPINE CO. MALCOLM; September 16, 1925
NATURE Appeal from a judgment of the Court of First Instance of Iloilo FACTS Plaintiff presented a complaint with two causes of action for breach of contract against the defendant in which judgment was asked for P70,369.50, with legal interest and cost. In an amended answer and cross-complaint, the defendant set up the special defense that since the plaintiff had defaulted in the payment for molasses delivered to it by the defendant under the contract between the parties, the latter was compelled to cancel and rescind the contract. The case was submitted for decision on a stipulation of facts and exhibits. The judgment of the trial court condemned the defendant to pay to the plaintiff a total of P35,317.93 with legal interest from the date of the presentation of the complaint, and with costs. HELD - The written contract between the parties provided for the delivery by the Hawaiian-Philippine Co. to Song Fo & Co. of 300,000 gallons of molasses. The
DE GUIA V MANILA ELECTRIC, RAILROAD & LIGHT CO STREET; January 28, 1920
NATURE APPEAL from a judgment of the Court of First Instance of Manila. FACTS -The plaintiff is a physician residing in Caloocan City. -Sept 4, 1915, at about 8pm, the defendant boarded a car at the end of the line with the intention of coming to Caloocan. -At about 30 meters from the starting point the car entered a switch, the plaintiff remaining on the back platform holding the handle of the right-hand door. Upon coming out of the switch, the small wheels of the rear truck left the track ran for a short distance and hit a concrete post. -the post was shattered: at the time the car struck against the concrete post, the plaintiff was allegedly standing on the rear platform, grasping the handle of the right-hand door. The shock of the impact threw him forward, and the left part of his chest struck against the door causing him to fall. In the falling, the plaintiff alleged that his head struck one of the seats and he became unconscious. -the plaintiff was taken to his home which was a short distance away from the site of the incident. A physician of the defendant company visited the plaintiff and noted that the plaintiff was walking about and apparently suffering somewhat from bruises on his chest. The plaintiff said nothing about his head being injured and refused to go to a hospital. -The plaintiff consulted other physicians about his condition, and all these physicians testified for the plaintiff in the trial court. -the plaintiff was awarded with P6,100, with interest and costs, as damages incurred by him in consequence of physical injuries sustained. The plaintiff and the defendant company appealed. ISSUES 1. WON the defendant has disproved the existence of negligence 2. What is the nature of the relation between the parties? 3. WON the defendant is liable for the damages 4. If liable for damages, WON the defendant could avail of the last paragraph of Art 1903 on culpa aquiliana (Art 2180) 5. What is the extent of the defendants liability? 5.1 Did the trial judge err in the awarding of the damages for loss of professional earnings (P900)?
VDA. DE VILLARUEL V MANILA MOTOR CO. INC. AND COLMENARES REYES; December 13, 1958
NATURE Appeal from a judgment of the CFI of Negros Occidental FACTS - This case is a petition of the judgment that ordered Manila Motor Co., Inc. to pay Villaruel for the lease of their building from June 1, 1942 to March 29, 1945 as well as for them to pay for the destruction of the property. - Manila Motor Co., Inc. leased the building from Villaruel and entered a contract, the contract lasts for 5 years and that the amount of Php. 350 a month should be paid. It is to be placed on Manila Motor Co., Inc. possession on the 31 st day of October 1940. The leasing continued until the invasion in 1941. At this time no payment of rental was done during the said period. When the Americans liberated the country they took possession of the said property and paid for the same amount to Villaruel. Manila Motor Co., Inc. wanted to resume the contract given that the contract gives them the option to continue such lease. Villaruel however would want
TELEFAST COMMUNICATIONS / PHILIPPINE WIRELESS, INC. V CASTRO PADILLA; February 29, 1988
NATURE Petition for Review on Certiorari of the decision of the Intermediate Appellate Court dated 11 February 1986, in Castro, Sr. vs Telefast Communication/Philippine Wireless, Inc. FACTS - On November 2, 1956, Consolacion Bravo-Castro, wife of plaintiff Ignacio Castro, Sr. and mother of the other plaintiffs, passed away in Lingayen, Pangasinan. On the same day, her daughter Sofia Crouch, who was then in the Philippines, addressed a telegram to plaintiff Ignacio Castro, Sr. at 685 Wanda, Scottsburg, Indiana, U.S.A., 47170 announcing Consolacion's death. The telegram was accepted by the defendant in its Dagupan office, for transmission, after payment of the required fees or charges. However, the telegram never reached its addressee. Consolacion was interred with only her daughter Sofia in attendance. Neither the husband nor any of the other children of the deceased, then all residing in the United States, returned for the burial. - When Sofia returned to the United States, she discovered that the wire she had caused the defendant to send had not been received. She and the other plaintiffs thereupon brought action for damages arising from defendant's breach of contract. The only defense of the defendant was that it was unable to transmit the telegram because of "technical and atmospheric factors beyond its control." No evidence appears on record that defendant ever made any attempt to advise the plaintiff Sofia C. Crouch as to why it could not transmit the telegram. - The CFI of Pangasinan, after trial, ordered the defendant to pay the plaintiffs damages as follows, with interest at 6% per annum: 1. Sofia C. Crouch, P31.92 and P16,000.00 as compensatory damages and P20,000.00, as moral damages. 2. Ignacio Castro Sr., P20,000.00 as moral damages. 3. Ignacio Castro Jr., P20,000.00 as moral damages. 4. Aurora Castro, P10,000.00 moral damages. 5. Salvador Castro, P10,000.00 moral damages. 6. Mario Castro, P10,000.00 moral damages. 7. Conrado Castro, P10,000 moral damages. 8. Esmeralda C. Floro, P20,000.00 moral damages. 9. Agerico Castro, P10,000.00 moral damages. 10. Rolando Castro, P10,000.00 moral damages. 11. Virgilio Castro, P10,000.00 moral damages. 12. Gloria Castro, P10,000.00 moral damages. - Defendant is also ordered to pay P5,000.00 attorney's fees, exemplary damages in the amount of P1,000.00 to each of the plaintiffs and costs. - On appeal by petitioner, the Court of Appeals affirmed the trial court's decision but eliminated the award of P16,000.00 as compensatory damages to Sofia C. Crouch
ARRIETA V NATIONAL RICE AND CORN CORP REGALA; January 31, 1964
NATURE Appeal of the defendant-appellant NARIC from the decision of the trial court dated February 20, 1958, awarding to the plaintiffs-appellees the amount of $286,000.00 as damages for breach of contract and dismissing the counterclaim and third party complaint of the defendant-appellant NARIC. FACTS - On May 19, 1952, plaintiff-appellee participated and won in the public bidding called by the NARIC for the supply of 20,000 metric tons of Burmese rice. Accordingly, on July 1, 1952, plaintiff-appellee Paz P. Arrieta and the appellant corporation entered into a Contract of Sale of Rice, under the terms of which the former obligated herself to deliver to the latter 20,000 metric tons of Burmese Rice at $203.00 per metric ton, CIF Manila. In turn, the defendant Corporation committed itself to pay for the imported rice "by means of an irrevocable, confirmed and assignable letter of credit in U.S. currency in favor of the plaintiff-appellee and/or supplier in Burma, immediately." - Despite the commitment to pay immediately "by means of an irrevocable, confirmed and assignable Letter of Credit," however, it was only on July 30, 1952, or a full month from the execution of the contract, that the defendant corporation, thru its general manager, took the first step to open a letter of credit by forwarding to the Philippine National Bank its Application for Commercial Letter of Credit. On the same day, July 30, 1952, Mrs. Paz P. Arrieta, thru counsel, advised the appellant corporation of the extreme necessity for the immediate opening of the letter of credit since she had by then made a tender to her supplier in Rangoon, Burma "equivalent to 5% of the F.O.B. price of 20,000 tons at $180.70 and in compliance with the regulations in Rangoon this 5% will be confiscated if the required letter of credit is not received by them before August 4, 1952." - It turned out however, the appellant corporation was not in any financial position to meet the condition, which it candidly admitted in a communication with PNB. Consequently, the credit instrument applied for was opened only on September 8, 1952 "in favor of Thiri Setkya, Rangoon, Burma, and/or assignee for $3,614,000.00," (which is more than two months from the execution of the contract) the party named by the appellee as beneficiary of the letter of credit. As a result of the delay, the allocation of appellee's supplier in Rangoon was cancelled and the 5% deposit, amounting to 524,000 kyats or approximately P200,000.00 was forfeited. In this connection, it must be made of record that although the Burmese authorities had set August 4, 1952 as the deadline for the remittance of the required letter of
debtor has made a subsequent contract conveying a patrimonial benefit to a 3rd party; creditor has no other legal remedy to satisfy his claim; act impugned is fraudulent;
the 3rd person who received the property conveyed (if by onerous title), has been an accomplice in the fraud. GENERAL RULE: rescission requires existence of creditors at the time of the alleged fraud, and this must be proved as one of the bases of the judicial pronouncement setting aside the contract. W/O any prior existing debt, there can neither be no injury nor fraud. - The Deed of Donation executed is a public document, having been acknowledged before a notary public. It is evidence of the fact which gave rise to its execution and of its date (Sec. 23, Rule 132, Rules of Court) Court is not convinced that it was antedated. SEC. 23. Public documents as evidence. xxx All other public documents are evidence, even against a third person, of the fact which gave rise to their execution and of the date of the latter. This includes Documents acknowledged before a notary public except last wills and testaments - Contracts entered in fraud may be rescinded only when the creditors cannot in any manner collect the claims due them. Action for rescission is a subsidiary remedy only. The petitioner was not able to prove that she had exhausted other legal means to obtain reparation for the same. Subsidiary remedy the exhaustion of all remedies by the prejudiced creditor to collect claims due him before rescission is resorted to. - Fourth requisite for accion pauliana not present either. Art. 759 of Civil Code states that donation is always presumed to be in fraud of creditors when the donor did not reserve sufficient property to pay his debts prior to donation. Petitioners alleged credit existed only a year after the deed of donation was executed. She cannot be said to have been prejudiced or defrauded by such alienation. In addition, when the Deed was executed, LIM had properties such as farming lands, a house and lot, residential lots which were sufficient to cover the debts. - In an attempt to support the case for rescission, petitioner brought up the criminal case involving Victoria Suarez. However, Suarez, albeit a creditor prior to the alienation, is not a party to the accion pauliana. Only the creditor who brought the action for rescission can benefit from the rescission (Art. 1384, Civil Code). The revocation is only to the extent of the plaintiff creditors unsatisfied credit; as to the excess, alienation is maintained. - As for the awards of moral damages, etc., the trial court made these awards without stating any justification in their ratio decidendi.
PHILIPPINE COMMUNICATIONS SATELLITE CORPORATION V GLOBE TELECOM, INC TINGA; May 25, 2004
NATURE Petition for review on certiorari of a decision of the Court of Appeals FACTS -for several years before 1991, globe coordinated the provision of various communication facilities for US military bases in Clark Air Base and Subic Naval Base -the US Defense Communications Agency (USDCA) contracted with American companies to operate its communication facilities for its military bases. The American companies in turn contracted with Globe for the use of their communication facilities. Globe in turn entered into an Agreement with the Philippine Communications Satellite Corp. (Philcomsat) for a term of 5 years, whereby the latter would obligate itself to establish, operate and provide an IBS Standard B earth station for the use of USDCA. -at the time of the execution of the Agreement, both parties knew the RP-US Military Bases Agreement, the basis for the occupancy of the Clark and Subic bases, was to expire in 1991. -Art XVIII Sec 25 of the 1987 Constitution states that such foreign bases, its facilities, troops personnel, shall not be allowed into the Philippines unless a new treaty is concurred in by the Senate and ratified by a majority vote of the people in a national referendum. 9/16/91: the Senate passed Resolution No. 141, expressing its decision not to concur w/ the ratification of the Treaty of Friendship, Cooperation and Security w/c was extend the USs term of use of Subic Naval Base, further seeking the withdrawal of all US military forces by 12/31/92 8/06/92: Globe notified Philcomsat of its intention to discontinue the use of the earth stations in view of the withdrawal of the US forces invoking Sec 8 of their Agreement w/c states:
FIRST METRO INVESTMENT CORPORATION V ESTE DEL SOL MOUNTAIN RESERVE, INC. DE LEON; November 15, 2001
NATURE Petition for review on certiorari of a decision of the Court of Appeals FACTS On January 31, 1978, petitioner FMIC granted respondent Este Del Sol a loan of P7, 385, 500.00 to finance the construction and development of the Este Del Sol Mountain Reserve, a sports/resort complex project located at Bario Puray, Montalban, Rizal. Under the terms of the loan agreement, interest on the loan was 16% per annum based on the diminishing balance. Loan was payable in 36 equal and consecutive monthly amortizations to commence at the 13th month from the
GONZALES V HEIRS OF THOMAS AND PAULA CRUZ PANGANIBAN; September 16, 1999
NATURE Petition for review on certiorari of a decision of the Court of Appeals reversing decision of trial court and ordering Gonzales to surrender possession of the property. (RTC of San Mateo, Rizal dismissed case in favor of Gonzales) FACTS - Dec 1, 1983 Paula Ano Cruz, together with heirs of Thomas and Paula Cruz (Lessors) entered into a CONTRACT OF LEASE/PURCHASE with Felix Gonzales (sole proprietor of Felgon Farms/Lessee) of a half-portion of a parcel of land situated in Rodriguez, Rizal, covered by Transfer Certificate of Title - Contract contains the following provisions: PAR.1. The terms of this contract is for a period of one year upon the signing thereof. After the period of this Contract, the LESSEE shall purchase the property on the agreeable price of 1M payable w/in 2 years period with an interest of 12% per annum... PAR.2. The LESSEE shall pay by way of annual rental an amount equivalent to P2,500 per hectare, upon signing of contract on 12/01/83 PAR.9. The LESSORS hereby commit themselves and shall undertake to obtain a separate and distinct T.C.T. over the herein leased portion to the LESSEE within a reasonable period of time which shall not in any case exceed 4 years, after which a new Contract shall be executed by the parties which shall be the same in all respects with this Contract insofar as the terms and conditions are concerned. - Gonzales paid P2500 per hectare or P15T annual rental; he took possession of the property and installed Sambrano as his caretaker
FACTS On May 1, 1961, Boysaw and manager Ketchum signed with Interphil (represented by Sarreal) a contract to engage Flash Elorde in a boxing match at Rizal Memorial Stadium on Sept 30, 1961 or not later than 30 days shld a postponement be mutually agreed upon. Boysaw, accdg to contract, shld not engage in other bouts prior to the contest. - Interphil signed Elorde to a similar agreement. - Boysaw fought and defeated Louis Avila in Nevada. - Ketchum assigned to Amado Araneta his managerial rights, who later transferred the rights to Alfredo Yulo. - Sarreal wrote to Games and Amusement Board (GAB) regarding this switch of managers bec they werent notified. - GAB called for conferences and decided to schedule the Elorde-Boysaw bout on Nov 4, 1961. USA National Boxing Assoc approved. - Sarreal offered to move the fight to Oct 28 for it to be w/in the 30 day allowable postponement in the contract. Yulo refused. He was willing to approve the fight on Nov 4 provided it will be promoted by a certain Mamerto Besa. - The fight contemplated in the May 1 contract never materialized. Boysaw and Yulo sued Interphil, Sarreal and Nieto. - Boysaw was abroad when he was scheduled to take the witness stand. Lower court reset the trial. Boysaw was still absent on the later date. Court reset. On the third instance, a motion for postponement was denied. - Boysaw and Yulo moved for a new trial, but it was denied. Hence, this appeal. ISSUES 1. WON 2. WON 3. WON 4. WON 5. WON there was a violation of the May 1 contract and if so, who was guilty there was legal ground for postponement of the fight lower court erred in refusing postponement of the trial for 3rd time lower court erred in denying new trial lower court erred in awarding appellees damages
HELD 1. Boysaw violated the contract when he fought with Avila. Civil Code provides, the power to rescind obligations is implied, in reciprocal ones, (as in this case) in case one of the obligors shld not comply w/ what is incumbent upon him. Another violation was made in the transfers of managerial rights. These were in fact novations which, to be valid, must be consented to by Interphil. When a
ARANETA V PHILIPPINE SUGAR ESTATES DEVT. CO. REYES; May 31, 1967
NATURE Review by certiorari FACTS - On July 28, 1950, J. M. Tuason & Co. sold a portion of its land in Sta. Mesa Heights Subdivision, Q.C. to Philippine Sugar Estates Development (PSED) Co., Ltd., through Gregorio Araneta Inc. (GAI) for P 430, 514. In their contract of purchase and sale, the parties stipulated that the buyer will build the Sto. Domingo Church and the seller will construct streets on the NE and NW and SW sides of the land. - The buyer PSED finished the construction of the church but the seller, GAI, was unable to finish the construction of the street in the NE side because a certain third party, Manuel Abundo, who has been physically occupying a middle part thereof, refused to vacate the same. - On May 7, 1958, PSED filed a complaint against J. M. Tuason & Co, Inc., and GAI in CFI Manila, seeking to compel the latter to comply with their obligation and/or to pay damages in the event they failed or refused to perform the obligation. - Both defendants answered the complaint with GAI setting up the principal defense that the action was premature since its obligation to construct the streets in question was without a definite period which needs to be fixed first by the court in a proper suit for that purpose before a complaint for specific performance will prosper. - After the lower court dismissed the complaint, PSED moved for a reconsideration praying that the court fix a period within which defendants will comply with their obligation to construct the streets in question. Defendant GAI opposed said motion, maintaining that plaintiff's complaint did not expressly or impliedly allege and pray for the fixing of a period to comply with its obligation and that the evidence presented at the trial was insufficient to warrant the fixing of such a period.
LAFARGE CEMENT PHLIPPINES, INC. V CONTINENTAL CEMENT CORPORATION PANGANIBAN; November 23, 2004
FACTS - 8/11/98: in a Letter of Intent (LOI), petitioner Lafargeon behalf of its affiliates including Petitioner Luzon Continental Land Corp. (LCLC) agreed to purchase respondent Continental Cement Corporation (CCC). At the time, CCC were respondents in a pending case against Asset Privatization Trust (APT) [GR No. 119712] - 10/21/98: both parties entered into a Sale and Purchase Agreement (SPA) - under clause 2 of the SPA the parties allegedly agreed to retain P117,020,846.84 from the purchase price to be deposited in an interest-bearing account in Citibank NY for payment to APT - petitioners allegedly refused to pay APT; fearing foreclosure, CCC filed w/ the RTC of QC a Complaint w/ Application for Preliminary Attachment against petitioners [CC No. Q-00-41103] - petitioners moved to dismiss the complaint on the grounds of forum-shopping
2.
FACTS - In October, 1908, Lino Dayandante and Hermenegilda Rogero executed a private writing in which they acknowledged themselves to be indebted to Roman Jaucian in the sum of P13,332.33. - Hermenegilda Rogero signed this document in the capacity of surety for Lino Dayandante; but as clearly appears from the instrument itself both debtors bound themselves jointly and severally to the creditor - There is nothing in the terms of the obligation itself to show that the relation between the two debtors was that of principal and surety. - In November, 1909, Hermenegilda Rogero brought an action in the Court of First Instance of Albay against Jaucian, asking that the document in question be cancelled as to her upon the ground that her signature was obtained by means of fraud. - In his answer to the complaint, Jaucian, by way of cross-complaint, asked for judgment against the plaintiff for the amount due upon the obligation, which appears to have matured at that time. - While the case was pending in the Supreme Court, Hermenegilda Rogero died and the administrator of her estate was substituted as the party plaintiff and appellee. On November 25, 1913, the Supreme Court rendered its decision reversing the judgment of the trial court and holding that the disputed claim was valid. - During the pendency of the appeal, proceedings were had in the Court of First Instance of Albay for the administration of the estate of Hermenegilda Rogero; Francisco Querol was named administrator; and a committee was appointed to pass upon claims against the estate. - This committee made its report on September 3, 1912. On March 24, 1914, or about a year and a half after the filing of the report of the committee on claims against the Rogero estate, Jaucian entered an appearance in the estate proceedings, and filed with the court a petition in which he averred the execution of the document of October, 1908, by the deceased, the failure of her cobligor Dayandante, to pay any part of the debt, except P100 received from him in March, 1914, and the complete insolvency of Dayandante (note: 1918 pa ito kaya mahal na ang P100). - Upon these facts Jaucian prayed the court for an order directing the administrator of the Rogero estate to pay him the principal sum plus its interest. - CFI held that: "Hermenegilda Rogero having been simply surety for Lino Dayandante, the administrator has a right to require that Roman Jaucian produce a
MAKATI DEVELOPMENT CORP. V EMPIRE INSURANCE CO. CASTRO; June 30, 1967
NATURE Appeal from CFI Rizal FACTS - March 31, 1959, the Makati Development Corporation sold to Rodolfo P. Andal a lot, with an area of 1,589 square meters, in the Urdaneta Village, Makati, Rizal, for P55,615 - so-called "special condition" contained in the deed of sale provides that > vendee/s shall commence the construction and complete at least 50% of residence on the property within two (2) years from March 31, 1959 to the satisfaction of the vendor > in the event of failure to do so, the bond which the vendee/s has delivered to the vendor in the sum of P11,123.00 and evidenced by a cash bond receipt dated April 10, 1959 will be forfeited in favor of the vendor by the mere fact of failure of the vendee/s to comply with this special condition > to insure faithful compliance with this "condition," Andal gave a surety bond on April 10, 1959 wherein he, as principal, and the Empire Insurance Company, as surety, jointly and severally, undertook to pay the MDC the sum of P12,000 in case Andal failed to comply with his obligation under the deed of sale - January 18, 1960 - Andal did not build his house and instead sold the lot to Juan Carlos - April 3, 1961 - neither Andal nor Juan Carlos built a house on the lot within the stipulated period, the MDC, three days after the lapse of the two-year period, sent a notice of claim to the EIC advising Andal's failure to comply with his undertaking. - May 22, 1961 - Demand for the payment of P12,000 was refused and MDC filed a complaint in CFI Rizal against the Empire Insurance Co. to recover on the bond in the full amount, plus attorney's fees - EIC filed answer with a third-party complaint against Andal and asked that the complaint be dismissed or, in the event of a judgment in favor of the MDC, judgment be rendered ordering Andal to pay the EIC whatever amount it maybe ordered to pay the MDC plus interest at 12%, from the date of the filing of the complaint until said amount was fully reimbursed and attorney's fees. - Andal admitted the execution of the bond but alleged that the "special condition" was contrary to law, morals and public policy. Also, Juan Carlos had started construction of a house on the lot.
Without prejudice to the provisions of Article 2212, interest due and unpaid shall not earn interest. However, the contracting parties may by stipulation capitalize the interest due and unpaid, which as added principal, shall earn new interest.
2
Art. 1229: The judge shall equitably reduce the penalty when the principal obligation has been partly or irregularly complied with by the debtor. Even if there has been no performance, the penalty may be also be reduced by the courts if it is iniquitous or unconscionable.
NATURE
Appeal from the decision, dated February 10, 1967, of the Court of First Instance of Rizal (Branch V. Quezon City) in its Civil Case No. Q-6561 FACTS - On November 17, 1959, appellee Kalalo, a licensed civil engineer doing business under the firm name of O. A. Kalalo and Associates, entered into an agreement with appellant Luz, a licensed architect, doing business under the firm name of AJ. Luz and Associates, whereby the former was to render engineering design services to the latter for fees, as stipulated in the agreement. The services included design computation and sketches, contract drawing and technical specifications of all engineering phases of the project designed by O.A. Kalalo and Associates, bill of quantities and cost estimate, and consultation and advice during construction relative to the work. Pursuant to said agreement, appellee rendered engineering services to appellant in the following projects: (a)Fil-American Life Insurance Building at Legaspi City; (b)Fil-American Life Insurance Building at Iloilo City; (c)General Milling Corporation Flour Mill at Opon, Cebu; (d)Menzi Building at Ayala Blvd., Makati, Rizal; (e)International Rice Research Institute, Research Center, Los Baos, Laguna; (f)Aurelia's Building at Mabina, Ermita, Manila; (g)Far East Bank's Office at Fil-American Life Insurance Building at Isaac Peral, Ernita, Manila; (h)Arthur Young's residence at Forbes Park, Makati, Rizal; (i) L & S Building at Dewey Blvd., Manila; and
ST. PAUL FIRE & MARINE INSURANCE CO. V MACONDRAY & CO., INC. ANTONIO; March 25, 1976
NATURE Certified by CA in its Resolution of May 8, 1967 on the ground that the appeal involves purely questions of law. FACTS - June 29, 1960, Winthrop Products, Inc., of New York, shipped aboard the SS "Tai Ping", owned and operated by Wilhelm Wilhelmsen, 218 cartons and drums of drugs and medicine, with the freight prepaid, which were consigned to Winthrop-Stearns, Inc., Manila, Philippines. - Barber Steamship Lines, Inc., agent of Wilhelmsen, issued Bill of Lading No. 34, in the name of Winthrop Products, Inc. as shipper, with arrival notice in Manila to consignee Winthrop-Stearns, Inc., Manila, Philippines. - The shipment was insured by the shipper against loss and/or damage with the St. Paul Fire & Marine Insurance Company under its insurance Special Policy No. OC173766 dated June 23, 1960 - Aug 7, 1960, SS "Tai Ping" arrived at the Port of Manila and discharged its
FACTS In June 1982, herein private respondents A.U. Valencia and Co., Inc. and Felix Pearroyo, filed a complaint for specific performance against herein petitioner Myron C. Papa, in his capacity as administrator of the Testate Estate of one Angela M. Butte The complaint alleged that on 15 June 1973, petitioner Myron C. Papa, acting as attorney-in-fact of Angela M. Butte, sold to respondent Pearroyo, through respondent Valencia, a parcel of land, consisting of 286.60 square meters, located at corner Retiro and Cadiz Streets, La Loma, Quezon City, and covered by Transfer Certificate of Title No. 28993 of the Register of Deeds of Quezon City Prior to the alleged sale, the said property, together with several other parcels of land likewise owned by Angela M. Butte, had been mortgaged by her to the Associated Banking Corporation After the alleged sale, but before the title to the subject property had been released, Angela M. Butte passed away
PHILIPPINE AIRLINES, INC V COURT OF APPEALS, STO. TOMAS REGALADO; August 13, 1990
NATURE Certiorari FACTS - November 16, 1970,- Adelina Bagadiong and Rosario Sto. Tomas, made reservations with, and bought 2 plane tickets from,PAL (Naga City branch station), , a common carrier engaged in the business of transporting passengers by air for compensation, for Naga-Manila flight on November 26, 1970 - November 24, 1970- they went back to PAL Naga City branch station and paid the fare for two round trip tickets. They were not only issued their round trips tickets, but also their reservation in PAL's 3:40 pm Naga-Manila flight on November 26, 1970 were expressly confirmed by the Naga City branch station; - At 3 PM of November 26, 1970, or 45 minutes before the scheduled departure time of the Naga-Manila flight, they checked in at the Pili airport counter of PAL and there the latter's agent or employees got the tickets of the plaintiffs allegedly for the purpose of issuing to them a boarding pass - A few minutes before departure time, their luggage was loaded to the plane, but they were not given back their tickets and were not allowed by PAL' s agent or employees to board the plane
REPARATIONS COMMISSION V UNIVERSAL DEEP- SEA FISHING CORPORATION CONCEPCION; June 27, 1978
NATURE Appeal from the decision of the Court of First Instance FACTS - Universal was awarded 6 trawl boats by the Reparations Commission as end-user of reparation goods. These were delivered 2 at a time. - The first 2 boats were delivered Nov 20, 1958 and the Contract of Conditional Purchase and Sale of Reparations Goods executed Feb 12, 1960 provided among others, that "the first installment representing 10% of the amount shall be paid within 24 months from the date of complete delivery thereof, the balance shall be paid in the manner herein stated as shown in the Schedule of Payments". To guarantee the compliance with the obligations under said contract, a performance bond in the amount of P53,643.00, with UNIVERSAL as principal and the Manila
Where there is no imputation of payment made by either the debtor or creditor, the debt which is the most onerous to the debtor shall be deemed to have been satisfied
FILINVEST CREDIT CORP. V PHILIPPINE ACETYLENE CO, INC. DE CASTRO; January 30, 1982
NATURE Appeal from the decision of the Court of First Instance of Manila FACTS - On October 30, 1971, the Philippine Acetylene Co., Inc. purchased from Alexander Lim a 1969 Chevorlet for P55,247.80 with a down payment of P20,000.00 and the balance of P35,247.80 payable, under the terms and conditions of the promissory note, at a monthly installment of P1,036.70 for thirty-four months, due and payable on the first day of each month starting December 1971 through and inclusive September 1, 1974 with 12 % interest per annum on each unpaid installment, and attorney's fees in the amount equivalent to 25% of the total of the outstanding unpaid amount. As security for the payment, the appellant executed a chattel mortgage over vehicle in favor of Lim. On November 2, 1971, Alexander Lim assigned to the Filinvest Finance Corporation all his rights, title, and interests in the promissory note and chattel mortgage by virtue of a Deed of Assignment. Thereafter, the Filinvest Finance Corporation, as a consequence of its merger with the Credit and Development Corporation assigned to the new corporation, Filinvest Credit Corporation, all its rights, title, and interests on the aforesaid promissory note and chattel mortgage which, in effect, the payment of the unpaid balance owed by Phil. Acetylene to Alexander Lim was financed by Filinvest such that Lim became fully paid. Phil Acetylene had defaulted in the payment of nine successive installments. Filinvest then sent a demand letter for the aforesaid amount in full in addition to stipulated interest and charges or return the mortgaged property to be remitted at Filinvests office within five days from date of the letter during office hours. Appellant, thru its asst. general-manager advised Filinvest of its decision to return the mortgaged property, which return shall be in full satisfaction of its indebtedness pursuant to Article 1484 of the New Civil Code. The car was returned
NATURE Petition for the reversal of the decision of the respondent appeal appellate court which dismissed the petition to annul and set aside the orders of the Court of First Instance of Rizal, Pasay City Branch, dismissing the petitioners' appeal in Civil Case No. 5247- P and to restrain the respondents from enforcing the same FACTS - The de Guzman et al, as SELLER, and Singh, as BUYER, executed a Contract to Sell covering two parcels of land owned by the petitioners located at Pasay City
TLG INTERNATIONAL CONTINENTAL ENTERPRISING, INC. V FLORES ANTONIO; October 31, 1972
NATURE Petition for certiorari to set aside orders (of June 23, 1972 and July 30, 1972) of respondent judge denying petitioners motion to withdraw sum of P3,750.00 deposited by it by way of consignation FACTS - In Oct. 5, 1971, Respondent judge granted petitioners Motion To Intervene, and admitted its Complaint in Intervention in the case of Bearcon Trading Co., Inc. v. Juan Fabella Et Al - the case was an action for declaratory relief involving the rights of Bearcon as lessee of the premises of the defendants in that case.
NATURE Petition for review of decision of CA FACTS - Reyes maintained two joint and/or accounts in BPI Cubao branch: one with his wife and another with his grandmother. He normally deposits US Treasury warrants payable to the order of his grandmother (as a monthly pension) in the latter joint and/or account. - The grandmother died on December 28, 1989 without the knowledge of the US Treasury. A US Treasury Warrant dated January 1, 1990 was still sent to her in the amount of $377 (P10,556). Reyes deposited the check in the joint account with the grandmother. The US Veterans Administration Office in Manila conditionally cleared the check and sent the same to the US for further clearing. - 2 months after (March 8, 1990), Reyes closed the joint account with his grandmother and transferred the funds to the joint account with his wife. Almost a year later (January 16, 1991), the last US Treasury Warrant was dishonored as it was discovered that it was issued 3 days after the (pensioned) grandmother died. The US treasury requested BPI for a refund. A month later, Reyes received an urgent telegram requesting him to contact the bank, and when he did, he was informed that the treasury check was the subject of a claim of Citibank. Reyes assured the bank and verbally authorized them to debit from his joint account the amount in the warrant. Few days later, Reyes went to the bank with his lawyer and surprisingly, demanded from BPI restitution of the debited amount. He claimed that because of the debit, he failed to withdraw his money when he needed them. He filed suit for damages. RTC dismissed for lack of cause of action, but CA reversed and ordered BPI to credit the amount to Reyes account. ISSUES 1. WON Reyes gave a verbal authorization to transfer funds from the joint account with his wife 2. WON legal compensation was proper in this case (legal compensation was alleged by the bank in the appeal) HELD
SC Gabriel made partial payments between rendition of judgment and execution of chattel mortgage Stipulation for payment under chattel mortgage serves only as specific method for extinguishments Amount was paid as attorneys fees, not liquidated damages Chattel agreement clearly shows purpose as solely to secure the satisfaction of the then existing liability.
Reasoning - Implied novation requires clear proof of complete incompatibility between two obligations. - The law requires no specific form. The test is WON two oblig can stand together. If they cannot, incompatibility arises, and the second oblig novates the first. - Where the new obligation merely reiterates the old obligation, such changes do not effectuate any substantial incompatibility between the 2. Disposition The decision of CA of implied novation is set aside.
BROADWAY CENTRUM CONDOMINIUM CORP. V TROPICAL HUT FOOD MARKET, INC FELICIANO; July 5, 1993
FACTS - On Nov. 28, 1980, petitioner Broadway Centrum Condominium Corporation (Broadway) and private respondent Tropical Hut Food Market, Inc. (Tropical) executed a contract of lease. Broadway, as lessor, agreed to lease a 3,042.19 square meter portion of the Broadway Centrum Commercial Complex for 10 years from Feb. 1, 1981 to Feb. 1, 1991, renewable for a like period upon the mutual agreement of both parties. The rental provision provides: - The lessee agrees to pay the lessor a basic monthly rental of P120,000 during the first 3 years allowing 2 months grace period on rental for renovation from Dec. 1, 1980 to Jan. 31, 1981. The basic rent will be increased to P140,000 during the next 3 years then P165,000 for the last 4 years. The 1st payment is to be made in advance on or before Dec. 1, 1980 and succeeding payments to be made without necessity of the services of a collector w/in the 1st 5 dayss of the month. - No problems were experienced on the first year but on the following year, Tropical wrote to Broadway stating that Tropicals rental payments were equal to 7.31% of its actual sales, which was based merely on Tropicals sales projections of P120,000 a day (which it obviously did not meet); the current rate was too high considering its other branches paid rent below the normal 1.5% of sales. Tropical proposed to reduce the rent to P50,000 or 2% of their monthly sales whichever was higher up to the end of the 3rd year of the contract. Broadway responded stating that Tropicals financial trouble was within the control of its management and offered several suggestions to improve sales. In the meantime, Broadway offered a counter-
ASTRO ELECTRONICS CORP. V PHILIPPINE EXPORT AND FOREIGN LOAN GUARANTEE CORP. AUSTRIA-MARTINEZ; September 23, 2003
NATURE Petition for review on certiorari under Rule 45 of the Rules of Court of the decision of the Court of Appeals affirming the decision of the RTC of Makati, then Metro Manila, whereby petitioners Peter Roxas and Astro Electronics Corp. (Astro) were ordered to pay respondent Philippine Export and Foreign Loan Guarantee Corporation (Philguarantee), jointly and severally, the amount of P3,621,187.52 with interests and costs FACTS - Astro was granted several loans by the Philippine Trust Company (Philtrust) amounting to P3M with interest and secured by three promissory notes. In each of these promissory notes, it appears that petitioner Roxas signed twice, as President of Astro and in his personal capacity. Roxas also signed a Continuing Surety ship Agreement in favor of Philtrust Bank, as President of Astro and as surety. - Philguarantee guaranteed in favor of Philtrust the payment of 70% of Astros loan, subject to the condition that upon payment by Philguanrantee of said amount, it shall be proportionally subrogated to the rights of Philtrust against Astro. - As a result of Astros failure to pay its loan obligations, despite demands, Philguarantee paid 70% of the guaranteed loan to Philtrust. Subsequently,
and that, in addition to submitting information about their respective experience, said Bureau members must, likewise, share in the rather appreciable expenses entailed in compiling the aforementioned data and in analyzing the same
The contracting parties may establish such stipulations, clauses, terms and conditions as they may deem convenient, provided they are not contrary to law, morals, good customs, public order, or
public policy
INTEGRATED PACKAGING CORP V CA, FIL- ANCHOR PAPER CO, INC. QUISUMBING; June 8, 2000
NATURE Petition to review the CA decision of April 20, 1994, reversing the judgment of the RTC in an action for recovery of sum of money filed by private respondent against petitioner FACTS - May 5, 1978: Petitioner and private respondent executed an order agreement: respondent bound itself to deliver 3,450 reams of printing paper (coated, 2 sides basis, 80 lbs, short grain) under the following schedule: May and June 1978: 450 reams at P290/ream August and September: 450 reams at P290/ream January 1979: 575 reams at P307.20/ream March: 575 reams at P307.20/ream July: 575 reams at P307.20/ream October: 575 at P307.20/ream S.O.P. of parties: materials were to be paid w/in 30-90 days from delivery - June 7, 1978: petitioner entered into contract with Philacor to print 3 volumes of books, 1 volume by November, 1978; another by November, 1979, and the last one by November, 1980. - July 30, 1979: respondent had delivered to petitioner 1,097 reams out of the 3,450. - Petitioner alleged it wrote private respondent that further delay in delivering the balance would greatly prejudice petitioner - June, 1980 July, 1981: respondent delivered various quantities amounting to P766,101.70. - Petitioner had difficulties paying - Respondent made a formal demand for petitioner to settle the outstanding account - Petitioner made partial payments of P97,200.00 applied to its back accounts -Petitioner entered into additional printing contract with Philacor but unfortunately failed to comply with its contract - Thus, Philacor demanded compensation from petitioner for the delay and damage suffered
NATURE Appeal from the Judgment of the CFI of Manila FACTS - Burke owned a yacht known as Bronzewing. Elser, the plaintiff, negotiated for the purchase of the yacht. The plan of Elser was to create a yacht club and sell it afterwards for P120,000. P20,00 to be retained by Elser and P100,000 to be paid to Burke. Elser requested that a voyage be down to the south using the said yacht for purposes of advertising and creating opportunities for the sale. However, the yacht needed some repairs for the voyage thus making the plaintiff pay for such repair. Elser never accepted the offer for the purchase rather requested that the engine should replaced thus asking for a loan of P20, 000. After a talk with the bank manager Mr. Avery, they agreed that the yacht was to be sold to Elser for the amount of P80,000. Elser agreed but stated in the letter that he is in a position to entertain the purchase of the said yacht. The case focuses on the recovery of the money used to repair the yacht in the amount of P6,139.28 that is asked by Elser. The trial court ruled in favor of Elser and asked Burke to pay for P6,139.28 with legal interest of 6 percent per annum as well as the Cooper Company the sume of P1,730.84 with legal interest of 6 per cent. The plaintiff is then asked to comply with the conditions stated in the letter. Hence this appeal coming from the plaintiff. ISSUUES 1. WON the contract is valid and binding against the plaintiff 2. WON plaintiff is required to pay for the repairs of the yacht HELD 1. NO - The court looked at the intent of the plaintiff in using the language. Instead of using clear and simple words such as I offer to purchase, I want to purchase, or I am in the position to purchase he used the word entertain which implies that he is in a position to deliberate whether or not he would purchase such yacht. It is a mere invitation that is discretionary upon him.
MELO [concur]
- The Opinion will have far-searching ramifications on settled doctrines concerning the finality and conclusiveness of the factual findings of the trial court in view of its
MERCADO V ESPIRITU
HELD 1. YES Ratio The motive may be regarded as causa when it predetermines the purpose of the contract. The cohabitation was an implied condition to the donation, and being unlawful, it necessarily tainted the donation itself. Reasoning Art 1274 is not applicable because liberality of the donor therein is deemed causa in those contracts that are of "pure" beneficence. These are contracts designed solely and exclusively to procure the welfare of the beneficiary, without any intent of producing any satisfaction for the donor. Art 1274 also provides that in remuneratory contracts, the consideration is the service or benefit for which the remuneration is given; causa is not liberality in these cases because the contract or conveyance is not made out of pure beneficence, but "solvendi animo." - In making the donation, the late Lopez was not moved exclusively by the desire to benefit Conchita Liguez, but also to secure her cohabiting with him, so that he could gratify his sexual impulses. This is clear from the confession of Lopez to the witnesses Rodriguez and Ragay, that he was in love with appellant, but her parents would not agree unless he donated the land in question to her. Therefore, the donation was but one part of an onerous transaction (at least with appellant's parents) that must be viewed in its totality. - Appellant sought to differentiate between the alleged liberality of Lopez, as causa for the donation in her favor, and his desire for cohabiting with appellant, as motives that impelled him to make the donation. She quoted from Manresa and the jurisprudence of this Court on the distinction that must be maintained between causa and motives. However, Manresa himself expressly exempted from the rule those contracts that are conditioned upon the attainment of the motives of either party. 2. NO Reasoning It cannot be said that both parties had equal guilt when we consider that as against Lopez, who was a man advanced in years and mature experience, the appellant was a mere minor, 16 years of age, when the donation was made. There is no finding made by the Court of Appeals that she was fully aware of the terms of the bargain entered into by and Lopez and her parents. Her acceptance in the deed of donation did not necessarily imply knowledge of conditions and terms not set forth therein. The facts are of the case are actually more suggestive of seduction than of immoral bargaining on the part of appellant. - Memo auditor propriam turpitudinem allegans. The rule that parties to an illegal contract, if equally guilty, will not be aided by the law but will both be left where it finds them, has been interpreted by this Court as barring the party from pleading the illegality of the bargain either as a cause of action or as a defense. 3. NO Reasoning The deed of donation is regular on its face, and to defeat its effect, the appellees must plead and prove that it is illegal. But such plea on the part of the Lopez heirs is not receivable, since Lopez, himself, if living, would be barred from setting up that plea; and his heirs can have no better rights than Lopez himself.
ART. 1409. The conjugal partnership shall also be chargeable with anything which may have been given or promised by the husband alone to the children born of the marriage in order to obtain employment for them or give then, a profession or by both spouses by common consent, should they not have stipulated that such expenditures should be borne in whole or in part by the separate property of one of them.". ART. 1415. The husband may dispose of the property of the conjugal partnership for the purposes mentioned in Article 1409. ART. 1413. In addition to his powers as manager the husband may for a valuable consideration alienate and encumber the property of the conjugal partnership without the consent of the wife.
BENTIR AND PORMIDA V LEANDA AND LEYTE GULF TRADERS, INC. KAPUNAN; April 12, 2000
NATURE Certiorari with prayer for a writ of preliminary injunction FACTS - May 15, 1992- Leyte Gulf Traders, Inc. filed a complaint for reformation of instrument, specific performance, annulment of conditional sale and damages with prayer for writ of injunction against Yolanda Rosello-Bentir and the spouses Samuel and Charito Pormida. - LGT Inc alleged that it entered into a contract of lease of a parcel of land with Bentir for a period of 20 years starting May 5, 1968.
NATURE Appeal from the decision of the Court of First Instance FACTS - In 1916, Eulogio Atilano I acquired, by purchase from one Gerardo Villanueva, lot No. 535 of the then municipality of Zamboanga. The vendee thereafter obtained transfer certificate of title No. 1134 in his name. In 1920 he had the land subdivided into five parts. On May 18 of the same year, after the subdivision had been effected, Eulogio Atilano I, for the sum of P150.00, executed a deed of sale covering lot No. 535-E in favor of his brother Eulogio Atilano II, who thereupon obtained transfer certificate of title No. 3129 in his name. Three other portions, namely lots Nos. 535-B, 535-C and 535-D, were likewise sold to other persons, the original owner, Eulogio Atilano I, retaining for himself only the remaining portion of the land, presumably covered by the title to lot No. 535-A. Upon his death the title to this lot passed to Ladislao Atilano, defendant in this case, in whose name the corresponding certificate (No. T-5056) was issued. - On December 6, 1952, Eulogio Atilano II and his children obtained transfer certificate of title No. 4889 over lot No. 535-E in their names as co-owners. Then, on July 16, 1959, desiring to put an end to the co-ownership, they had the land resurveyed so that it could properly be subdivided; and it was then discovered that the land they were actually occupying on the strength of the deed of sale executed in 1920 was lot No. 535-A and not lot 535-E, as referred to in the deed, while the land which remained in the possession of the vendor, Eulogio Atilano I, and which passed to his successor, defendant Ladislao Atilano, was lot No. 535-E and not lot No. 535-A. - On January 25, 1960, the heirs of Eulogio Atilano II, who was by then also deceased, filed the present action in the CFI of Zamboanga, alleging, that they had offered to surrender to the defendants the possession of lot No. 535-A and demanded in return the possession of lot No. 535-E, but that the defendants had refused to accept the exchange. The plaintiffs' insistence is quite understandable, since lot No. 535-E has an area of 2,612 sq m, as compared to the 1,808 squaremeter area of lot No. 535-A. - In their answer to the complaint the defendants alleged that the reference to lot No. 535-E in the deed of sale of May 18, 1920 was an involuntary error; that the intention of the parties to that sale was to convey the lot correctly identified as lot No. 535-A; that since 1916, when he acquired the entirety of lot No. 535, and up to the time of his death, Eulogio Atilano I had been possessing and had his house on the portion designated as lot No. 535-E, after which he was succeeded in such possession by the defendants herein; and that as a matter of fact Eulogio Atilano I even increased the area under his possession when on June 11, 1920 he bought a portion of an adjoining lot, No. 536, from its owner Fruto del Carpio. On the basis of the foregoing allegations the defendants interposed a counterclaim, praying that the plaintiffs be ordered to execute in their favor the corresponding deed of transfer with respect to lot No. 535-E.
CONCEPCION [ dissent]
MORAN [ dissent]
- Although the document Exhibit 1 states that it is a mortgage of the improvements, with a stipulation regarding a future sale of the land in case of failure to comply with the mortgage obligations, in reality the true contract between the parties is one of absolute sale in the light of the circumstances of the case - The Homestead Act has been enacted for the welfare and protection of the poor. The law gives a needy citizen a piece of land where he may build a modest house for himself and family and plant what is necessary for subsistence and for the satisfaction of life's other needs. The right of the citizens to their homes and to the things necessary for their subsistence is as vital as the right to life itself. They have a right to live with a certain degree of comfort as become human beings, and the State which looks after the welfare of the people's happiness is under a duty to safeguard the satisfaction of this vital right. Moreover, a man with a home and a means of subsistence is a lover of peace and order and will profess affection for his country, whereas one without a home and in penury is not only a social parasite but also a dangerous element in the social order. The Homestead Act at once aims at the promotion of wholesome and happy citizenship and the wiping out of the germs of social discontent found everywhere. Considering the social and economic ends of the Homestead Act, the courts should exercise supreme care and strict vigilance towards faithful compliance with all its benign provisions and against the defeat, directly or indirectly, of its highly commendable purposes. And it is my firm conviction that where, as in the present case, a rich and clever man attempts to wrest a homestead granted to a poor and ignorant woman, the slightest tokens of illegality should be enough to move the courts to apply the strong arm of the law
AVANCEA [ dissent]
CADWALLER & CO. V SMITH, BELL, AND CO. TRACEY; February 9, 1907
NATURE Appeal from a judgment of the C FI of Manila FACTS Cadwaller & Co. as assignees of the Pacific Export Lumber Company (PELC) asks for the amount of $3,486 which is the sum differential of the money that turned over to them and the money actually received. PELC exported cedar piles to be bought by Peabody & Company (defendant/appellee) for the amount of $12 apiece however later on it was found out that P&C was able to negotiate with the government and sold the piles for $19 apiece. Hence this case. ISSUE WON there is a breach of duty from which the defendant should not benefit from HELD YES, there is a breach of duty. The concealment from their principal of the negotiation with the Government resulted in a sale at $19 apiece and in misrepresenting the condition of the market is a breach of duty. The contract of sale is founded on fraud and is subject to the annulment of the aggrieved party (CC Arts. 1265 and 1269). The defendants are not entitled to retain their commission realized upon the piles included under the annulled contract. However this is only for those that are subsequently sold at the time of the negotiation with the Government and its selling at the amount of $19 apiece. Disposition Judgment modified
JOHNSON [ dissent]
- The mortgage is a valid and subsisting contract. - PNB promised to furnish sufficient funds.
Disqualifies agents from leasing the property whose administration or sale may have been entrusted to them
MANILA LODGE NO. 761 BENEVELONT & PROTECTIVE ORDER OF THE ELKS V CA CASTRO; September 30, 1976
NATURE Petitions for review on certiorari of the decision of the Court of Appeals FACTS - On June 26, 1905 the Philippine Commission enacted Act No. 1360 which authorized the City of Manila to reclaim a portion of Manila Bay. The reclaimed area was to form part of the Luneta extension. The Act provided that the reclaimed area "shall be the property of the City of Manila" and that the City of Manila is authorized to set aside a tract of the reclaimed land formed by the Luneta extension at the north end for a hotel site, and to lease the same, with the approval of the Governor General, to a responsible person or corporation for a term not to exceed 99 years. Subsequently, the Philippine Commission passed on May 18, 1907 Act No. 1657, amending Act No. 1360, so as to authorize the City of Manila either to lease or to sell the portion set aside as a hotel site. - The total area reclaimed was a little over 25 hectares. The City of Manila applied for the registration of the reclaimed area, and on January 20, 1911, original certificate of title was issued in the name of the City of Manila. The title described the registered land as "un terreno conocido con el nombre de Luneta Extension, situado en el distrito de la Ermita." [Translation: A land known under the name of Luneta Extension, situated in the district of Ermita.] - The registration was subject, however, to the encumbrances mentioned in Article 39 of the Land Registration Act as may be subsisting and "sujeto a las disposiciones y condiciones inipuestas en la Ley No. 1360; y sujeto tambien a los contratos de venta, celebratlos y oborgados por ta Ciudad de Manila a favor del Army and Navy Club y la Manila Lodge No. 761. Benevolent and Protective Order of Elks, fechados en 29 de Diciembre de 1908 y 16 de Enero de 1909." [Translation: Subject to the dispositions and conditions provided by Act No. 1360; and subject also to contracts of sale celebrated and entered into by the City of Manila in favor of the Army and Navy Club and Manila Lodge No. 761 Benevolent and Protective Order of Elks (BPOE for short), dated 29th of December 1908 and 16th of January 1909.]
What was apparently designed to be an express trust was for the late Francisco H. Reyes to file an answer in the cadastral proceeding and to obtain title to the land for and in behalf of all the heirs of Jorge Bueno. But such express trust failed to materialize. - If any trust can be deduced at all from the foregoing facts it was an implied one - While there are some decisions which hold that an action upon a trust is imprescriptible, without distinguishing between express and implied trusts, the better rule, as laid down by this Court in other decisions, is that prescription does supervene where the trust is merely an implied one. - Upon the general proposition that an action for reconveyance such as the present is subject to prescription in ten years the appellees and the court a quo are correct. The question here, however is: from what time should the prescriptive period be counted, in the light of the allegations in the complaint? - the cause of action upon such trust must be deemed to have accrued only upon the discovery of such bad faith or mistake, or to put it more specifically, upon the discovery by the appellants that Francisco H. Reyes, in violation of their agreement with him, had obtained registration of the disputed property in his own name and in the names of his brothers. - It would not do to say that the cadastral proceeding itself, by virtue of its nature as a proceeding in rem, was constructive notice to the appellants, for as far as they were concerned the cadastral answer they had authorized Francisco H. Reyes to file was not adverse to them; and neither he nor the appellee may invoke the constructive-notice rule on the basis of their own breach of the authority thus given. On top of all this, it was the appellants and not the appellees who were in possession of the property as owners, continuously up to 1962, when for the first time the latter appeared upon the scene and tried to get such possession, thereby revealing to them the fact of the mistaken or fraudulent registration. - But the foregoing are not facts already established by evidence. They are merely alleged in the complaint. These are matters of defense that must be substantiated at the trial. - With this view we take of the case, it is unnecessary to take Lip the second error assigned. Ratio - If any trust can be deduced at all from the foregoing facts it was an implied one, arising by operation of law not from any presumed intention of the parties but to satisfy the demands of justice and equity and as A protection against unfair dealing or downright fraud. Indeed, in this kind of implied trust, commonly denominated constructive, as distinguished from resulting, trust, there exists a certain antagonism between the cestui que trust and the trustee. - Thus, for instance, under Article 1456 of the Civil Code, "if property is acquired through mistake or fraud, the person obtaining it is, by force of law, considered a trustee of a" implied trust for the benefit of the person from whom the property