Crisostomo vs Court of Appeals

FACTS
: A travel agency is not an entity engaged in thebusiness of transporting either
passengersor goods and is therefore, neither a private nor acommon carrier. Respondent
did not undertake totransport petitioner from one place to another since itscovenant with
its customers is simply to make travel arrangements in their behalf. Respondents services
as a travel agency include procuring tickets andfacilitating travel permits or visas as well
as bookingcustomers for tours. It is in this sense that the contractbetween the parties in
this case was an ordinary onefor services and not one of carriage.Petitioner Estela L.
Crisostomo contracted the servicesof respondent Caravan Travel and ToursInternational,
Inc. to arrange and facilitate herbooking, ticketing, and accommodation in a tour dubbed
Jewels of Europe. A 5% discount on the total cost of P74,322.70 which included the
airfare wasgiven to the petitioner. The booking fee was also waived because petitioners
niece, Meriam Menor,was respondents ticketing manager.
On June 12, 1991, Menor went to her aunts residenceto deliver petitioners travel docume
nts and planetickets. In return, petitioner gave the full payment forthe package tour.
Menor then told her to be at theNAIA on Saturday, June 15, 1991, two hours before
herflight on board British Airways. Without checking hertravel documents, petitioner went
to NAIA and to herdismay, she discovered that the flight she wassupposed to take had
already departed the previousday. She learned that her plane ticket was for the
flightscheduled on June 14, 1991. She called up Menor tocomplain and Menor suggested
upon petitioner to takeanother tour

British Pageant. Petitioner was asked anew to pay US$785.00. Petitioner gave
respondentUS$300 as partial payment and commenced the trip.
ISSUE:
Whether or not respondent Caravan did notobserve the standard of care required of a
commoncarrier when it informed the petitioner wrongly of theflight schedule.
HELD:
The petition was denied for lack of merit. Thedecision of the Court of Appeals was
affirmed.A common carrier is defined under Article 1732 of theCivil Code as persons,
corporations, firms orassociations engaged in the business of carrying ortransporting
passengers or goods or both, by land,water or air, for compensation, affecting their
servicesto the public. It is obvious from the above definitionthat respondent is not an
entity engaged in thebusiness of transporting either passengers or goodsand is therefore,
neither a private nor a commoncarrier. Respondent did not undertake to
transportpetitioner from one place to another since its covenantwith its customers is
simply to make travel arrangements in their behalf. Respondents services as a travel
agency include procuring tickets andfacilitating travel permits or visas as well as
bookingcustomers for tours. It is in this sense that the contract between the parties in this
case was an ordinary onefor services and not one of carriage
DALAY v. AQUIATIN & MAXIMO
FACTS:
Ciriaco Villarin, being the owner of 6 parcels of land executed a document in favor of
EugenioGomez, acknowledging a debt. The document states that when he fails to pay his
debt when the dateagreed upon comes, the lands secured shall be used as
payment.Villarin failed to pay his debt and Eugenio, believing himself to be entitled to the
lands, executed adocument in favor of Juan Dalay, transferring to the latter the lands by
virtue of a sale. Therefore, JuanDalay, because of such conveyance, is now in possession
of such lands. In an affidavit made by Villarin inOct 10 1917, he acknowledged the title
and transfer of the lands to Eugenio.However, 15 days after, Villarin contracted a debt in
favor of Bernardino Aquiatin and used the sameproperties as security for payment. A civil case
was then filed in the CFI of Laguna. The CFI decided infavor of Aquiatin and the lands were

levied.Dalay then instituted this action against Aquiatin and Maximo, as deputy sheriff, to have
himself declared as the owner of said lands. The answer of Aquiatin is a general denial and
a special defensewherein he alleges that the sale upon which Dalay relies is simulated and
fraudulent, and that saidplaintiff had not had exclusive possession of, nor title to, said
lands.The court found that plaintiff had no cause of action, which he then appealed.
ISSUE: WON BY VIRTUE OF THE TRANSFER, JUAN DALAY BECAME THE OWNER OF THE
PARCELS OFLAND IN DISPUTE
RULING:
DALAY IS THE SOLE AND ABSOLUTE OWNER OF THE LANDS.The contract executed in favor of Eugenio
is merely a promise to pay the debt with the lands, if at itsmaturity, it is not satisfied. It is merely a
promise made by the debtor to assign the property given assecurity in payment of a debt,
which promise is accepted by the creditor. There is no doubt that adebtor may make an assignment
of his properties in payment of a debt. And the assignment is not madeunlawful by the fact
that said properties are mortgaged, because the title thereto remains in the debtor;nor is a promise
to make such an assignment in violation of the law.Upon the expiration of the period for
the payment of the debt without the same having been paid,Eugenio did not wait nor
require Villarin to make a formal assignment of the mortgaged property inpayment of the
debt, and transferred the same to Juan Dalay in the document. And in doing so,
EugenioGomez did not dispose of property merely mortgaged, but of property promised to
be assigned inpayment of the debt which had not been paid at the expiration of the period fixed for its
payment.Gomez had not, by virtue alone of the promise of assignment of said property,
any real right thereon,but he did have a personal action against Villarin to compel him to execute the
proper deed of assignment. For this reason the conveyance made by Gomez in favor of Dalay was
defective, it havingbeen made in advance of the actual assignment of said property in his
favor.This transfer, however, is not void per se inasmuch as Villarin consented to the said property
passing toGomez in payment of the debt after the expiration of the period for payment, if the debt was
not paid.There is no question as to the occurrence of the other elements of this contract
made in favor of Dalay,the defect consisting in Villarin not having previously executed the deed of
assignment he had promised
Macapinlac vs repide (September 20, 1922)G.R. No. 18574
Facts:The case was instituted for the purpose of declaring plaintiff as owner of a real
estate property and to
nullify the Torrens title, which was in respondents name. Plaintiff also wanted to
recover possession overthe property with damages.Plaintiff owned the real estate property
located in Pampanga. Later, plaintiff acquired a loan toBachrach Garage & Taxicab for a
price of an automobile. To secure payment, plaintiff executed fourteenpromissory notes:
11 in the hands of Bachrach and 3 in the hands of the payee of the company. Assecurity
and guaranty of payment, plaintiff executed a deed of sale with a right to repurchase.More
than a year later, respondent acquired the rights of Bachrach over the properties by
payingP5000. Be it noted that during the conveyance of rights, Repide knew of the
purpose of the transfer of title

to secure the debt owing to Bachrach by the plaintiff. He also knew that the debt had been
paid andthat only a half of the debt existed.Afterwards, Repide caused for the transfer of
title into his name by making it appear that thepurported sale was true. During those
times, respondent Repide was in actual possession of the propertyand was enjoying its
fruits.Plaintiff filed a case to recover possession in which the Court of First Instance
decided in favourof respondent. Due to this, plaintiff filed for a review of the case.
Issue:1.
Whether or not the contract was a sale de retro or a mortgage.2.

What contract should govern between the parties?

Held:(1)The court held that since the conveyance was executed to secure a debt, it should
follow that inequity, said conveyance must be treated as a security or substantially as a
mortgage. This decision wassupported by the case of Cuyugan vs Santos, in which the
court discuss the conditions in which aconveyance absolute on its face may be treated as
a mortgage.
. . The doctrine has been firmly established from an early day that when thecharacter of a
mortgage has attached at the commencement of the transaction, so that theinstrument,
whatever be its form, is regarded in equity as a mortgage, that character of mortgage
must and will always continue. If the instrument is in its essence a mortgage,the parties
cannot by any stipulations, however express and positive, render it anythingbut a
mortgage, or deprive it of the essential attributes belonging to a mortgage in equity.The
debtor or mortgagor cannot, in the inception of the instrument, as a part of orcollateral to
its execution, in any manner deprive himself of his equitable right to come inafter a
default in paying the money at the stipulated time, and to pay the debt and interest,and
thereby to redeem the land from the lien and encumbrance of the mortgage; theequitable
right of redemption, after a default is preserved, remains in full force, and willbe protected
and enforced by a court of equity, no matter what stipulations the partiesmay have made
in the original transaction purporting to cut off this right. (3 Pom. Eq.Jur., sec. 1193.
REYES v. SIERRA
Facts:

Vicente Reyes sought to register under his name a parcel of land located in Antipolo,Rizal

opposed by Sierra et al

TC approved Reyes application, declaring him owner of said land owing to his and his
predecessor-ininterests
constructive possession of the same, particularly because theyhad been paying the realty
taxes thereon since 1926 until 1961

Origin of the dispute over land was because in 1926, the Sierras predecessor, Basilia
Beltran, borrowed P100 from Vicente Reyes, Sr. and secured the loan with the said piece
of land. In so doing, Basilias children executed together with her a document(katibayan
ng papgpapahintulot sa aming ina na ipananagutan kay Vicente Reyes sa
inutang na halagang P100
)

Beltran, however, died in 1938 without being able to pay the loan and Vicente Reyes,
Jr.continued in possession thereof, believing that the document executed was a contractof
sale and not of mortgage

Oppositors Sierra et al now claiming that the words sangla, ipinanagutan

sa halagang
isangdaang piso manifest that the document was one of mortgag
Issue: What was the nature of the document?

determinative of the lands ownership

Held/Ratio:

It is a mortgage contract. The intention of the parties at the time it was executed
mustprevail, i.e., the borrowing and lending of money with security. The terms indicate

adebt and the creation of a creditor-debtor relationship, where the land was used tosecure
repayment of the loan.

Following established doctrine, once a mortgage attaches to a transaction, its characteras

a mortgage will always continue. The parties cannot by any stipulation deprive it of the
essential attributes of a mortgage in equity. Civil Code itself provides: The creditorcannot
appropriate the things given by way of mortgage

Act of Vicente Reyes in registering the property in his name after failure of mortgagor
toredeem the property constitutes a
pactum commisorium
which is against good moralsand public policy.

Court also declared that possession by Reues has not been continuous (they had onlyused
the property to spend some vacation time there, but this was discontinued for thelast 23
years). Moreover, mere failure of owner to pay taxes does not necessarily
implyabandonment of a right to property; and on the other hand, payment of realty taxes
byitself does not constitute sufficient evidence of title.

Application by Reyes for registration should therefore be dismissed. Oppositorsdirected to

pay back the P100 debt plus interest (6% p.a.) from 1926 until paid.
.
NORTHERN MOTORS VS. COQUIA G.R. No. L-40018 December 15, 1975Facts:
Manila Yellow Taxicab, executed a chattel mortgage over several taxicabs in favorof
Northern Motors. TROPICAL is a judgment creditor of Yellow Taxicab whoassigned the
judgment to ONG. On December 12 1974, Sheriff then levied upon 20taxicabs, 8 of which
are security for the chattel mortgage. Northern Motors filed anintervention on December
18, 1974; however, the levied taxicabs were sold thesame day at 2pm although
agreement shows that it should have happened at 4pm.Indemnity bond was posted by
TROPICAL, but the bond was cancelled after the salewithout notice to Northern Motors.
The petitioner now seek reconsideration also onthe reinstatement of the bond.A second
levy was made upon 35 taxicabs, 7 of which are mortgaged to NorthernMotors.This is a
motion for reconsideration in the SC decision pronouncing that theMortgagee has a better
right than the judgment debtor over the taxicabs.The taxies were levied and sold at an
auction sale. Ong argues admits that themortgagee has a better right that the judgment
creditor, but argues that thepurchaser from the auction sale must have a right superior to that of
themortgagee. The auction sale proceeded and the purchasers were of unknownaddresses,
hence the 8 taxicabs cannot be recovered. The proceeds of the auctionwere in contest and
the sheriff is deducting the expenses of the execution sale fromthe proceeds.
Issue/s:
Whether the expenses for the execution sale should be deducted from the
proceedsthereof?Whether the purchaser has a better right than the creditor?Whether the
bond should be reinstated?
Held:
1
st
: No, it was already established that the levy on the property was illegal, it
istherefore improper to deduct the expenses of an illegal auction from the
proceedsthereof. The mortgagee can only able to collect the proceeds from the auction
salebecause the purchasers are of unknown addresses. The full proceeds of the sale
aredue to the mortgagee without any unreasonable and illegal deductions.2
nd
: No, the purchaser of the auction sale merely steps in the shoes of thejudgment creditor
as they have been aware of the claim of the mortgagee. Themortgagee has a better right

to the possession of the taxicabs, however, since theaddresses of the purchasers are
unknown, the proceeds of the sale must bedelivered to the mortgagee
Acme Shoe vs. CA
Facts:
Acme Shoe, Rubber & Plastic Corporation executed a chattel mortgage in favor of
Producers Bank. The chattel mortgage contained a provision that the coverage of the
mortgage shall extend to obligations yet to be contracted or incurred. Acme was not able
to settle its obligations with Producers Bank, which prompted Producers Bank to
extrajudicially foreclose the chattel mortgage.
Issue:
Whether or not a chattel mortgage can secure after-incurred obligations.
Ruling:Yes. While a pledge, real estate mortgage, or antichresis may secire after-incurred
obligations so long as these future debts are accurately described, chattel mortgage,
however, san only cover obligations existing at the time the mortgage is constituted.
Although the promise expressed in a chattel mortgage include debts that are yet to be
contracted can be a binding commitment that can be compelled upon, the security itself,
however, doe not come into existence or arise until after a chattel mortgage agreement
covering the newly contracted debt is executed either by concluding a fresh chattel
mortgage or by amending the old contract conformably with the form prescribe by the
Chattel Mortgage Law.