G.R. No. 164791, June 29, 2010 SELWYN F. LAO and EDGAR MANANSALA, Petitioners, vs. SPECIAL PLANS, INC.

, Respondent Facts: The Petioners Lao and Manansala entered into a Contract of Lease with Special Plans Incorporated (SPI). Upon expiration of the contract, it was further renewed for another eight months. Petitioners did not pay the allotted rental fees which prompted SPI to send a demand letter asking for full payment of rentals in arrears. Petitioners did not give payment, giving the reason that SPI failed to deliver the leased premises for their intended use and because of this they incurred expenses for necessary repairs as well as expenses for the repair of structural defects.. They counterclaimed SPI to pay the sum of 422,000 pesos as actual damages against the claim of SPI of 118,000 for accumulated unpaid rentals. The Metropolitan Court found that the unpaid rentals only amounted to 95,000 pesos and declared SPI responsible for repairing the structural defects of the leased premises and thus dismissed SPI s case. SPI then appealed to the Regional Trail Court of Quezon City which then modified the decision of the lower court, disagreeing on the off-setting of the amount allegedly spent by the petitioners for the repairs of the structural defects of subject property with their unpaid rentals and ordered the Petitioners to pay 95,000 for unpaid rentals. The petitioners then appealed to the Court of Appeals wherein they asserted that the amount of 545,000.00 that they spent for repairs, P125,000.00 of which was spent on structural repairs, should be judicially compensated against the said unpaid rentals amounting to 95,000.00. Issue: Whether or not the unpaid rentals should be judicially compensated with the expenses incurred by the Plaintiffs? Held: Petition Dismissed. In order that compensation to take place two persons, in their own right, should be creditors and debtors of each other. In order for compensation to be proper, it is necessary that: 1. 2. 3. 4. 5. Each one of the obligors be bound principally and that he be at the same time a principal creditor of the other; Both debts consist in a sum of money, or if the things due are consumable, they be of the same kind, and also of the same quality if the latter has been stated; The two debts are due: The debts are liquidated and demandable; Over neither of them be any retention or controversy, commenced by third parties and communicated in due time to the debtor.

The Petitioners failed to properly discharge their burden to show that the debts are liquidated and demandable. A claim is liquidated when the amount and time of payment is fixed. If acknowledged by the debtor, although not in writing, the claim must be treated as liquidated. When the defendant, who has an unliquidated claim, sets it up by way of counterclaim, and a judgment is rendered liquidating such claim, it can be compensated against the plaintiff s claim from the moment it is liquidated by judgment. Compensation takes place only if both obligations are liquidated.

G.R. No. 171925

July 23, 2010

SOLIDBANK CORPORATION, Petitioner, vs. PERMANENT HOMES, INCORPORATED, Respondent. FACTS: The Respondent, Permanent Homes Inc. is a real estate development company that applied and was granted an Omnibus Line credit facility in the Solidbank to finance its housing project known as Buena Vida Townhomes in the amount of sixty million pesos. Of the sixty million available to Permanent Homes, it availed of a total of 41.5 million pesos, covered by three (3) promissory notes wherein it irrevocably authorized Solidbank to increase or decrease at any time the interest rate based on the prevailing rates in the local or international capital markets. The adjustment of the interest rates shall be effective from the date indicated in the written notice or if no date was indicated the time the notice was sent. If Permanent Homes disagrees with the interest rate adjustment, they shall prepay all amounts due within thirty (30) days, from the receipt of the written notice. Otherwise, they shall be considered to have given their consent to the interest rate adjustment. Contrary to the stipulations indicated in the promissory note. There was a standing agreement by both parties that any increase or decrease in the interest rates shall be subject to the mutual agreement of the parties. There were three loan availments done, each with a series of increases and decreases in the interest rates as the provisions of the promissory note stipulated. It is now the contention of Permanent Homes that Solidbank unilaterally and arbitrarily accelerated the interest rates without any declared basis of such increases, of which Permanent Homes did not agree to or been informed of. That this was contrary to their standing agreement that any interest rate changes will be subject to mutual agreement of the parties. They aver that they could not protest the actions of the Bank for fear that it would cut off their credit facility. Solidbank, on the other hand, avers that Permanent Homes has no cause of action against it, as the aforementioned pertinent provisions of the Omnibus Credit Line and the promissory notes stipulated and agreed to and duly signed by PERMANENT HOMES. Thus, in accordance with said provisions, SOLIDBANK was authorized to, upon due notice, periodically adjust the interest rates on PERMANENT HOMES loan availments during the monthly interest repricing dates, depending on the changes in prevailing interest rates in the local and international capital markets. ISSUE: Whether or not the interest rate repricing of Solidbank in the course of the loan valid? HELD: The Supreme Court held that the repricing of the interest rates were VALID. The validity of the actions of the bank are (1) the parties mutually agreed on said stipulations; (2) repricing takes effect only upon Solidbank s written notice to Permanent of the new interest rate; and (3) Permanent has the option to prepay its loan if Permanent and Solidbank do not agree on the new interest rate. The interest rates implemented by Solidbank were consistent with prevailing rates in the local or international capital markets. In order that obligations arising from contracts may have the force of law between the parties, there must be a mutuality between the parties based on their essential equality. A contract containing a condition which makes its fulfillment dependent exclusively upon the uncontrolled will of one of the contracting parties is void. There was no showing that either Solidbank or Permanent coerced each other to enter into the loan agreements. The terms of the Omnibus Line Agreement and the promissory notes were mutually and freely agreed upon by the parties.

ANAMER SALAZAR, vs. J.Y. BROTHERS MARKETING CORPORATION G.R. No. 171998, October 20, 2010 FACTS: Anamer Salazar a freelance sales agent, was approached by Isagani Calleja and Jess Kallos and asked if she knew a supplier of rice. Salazar then accompanied the two to J.Y. Brothers Marketing Corporation (J.Y. Bros.) a corporation known to be in the business of selling sugar and rice and other commodities. Calleja and Kallos with Salazar procured 300 cavans of rice worth 214,000. The payment was with a Prudential Bank check issued by Nena Timario and with the assurance of Salazar that it was as good as cash. J.Y. Bros. parted with 300 cavans of rice. However upon presentment, the check was dishonoured the reason was due to Closed Account . J.Y. Bros. then informed Salazar, Calleja and Kallos of the state of the check and they issued a replacement a cross Solid Bank Check in the same amount but it bounced due to Insufficient Funds Despite the demand letter issued by J.Y. Bros. Salazar could not settle the amount due. This prompted J.Y. Bros. to charge Salazar and Timario with the crime of estafa before the Regional Trial Court (RTC) of Legazpi City. The decision of RTC was to acquit Salazar of the crime she was charged but held her liable for the payment of the 300 bags of rice. Aggrieved she appealed to the Supreme Court which granted her prayer to reconsider the civil aspect of the case and allow her to present evidence. The RTC dismissed the civil aspect of Salazar. It found that the first check drawn by Timario was payable to the order of J.Y. Bros and that it was negotiable order instrument and that Salazar only endorsed and negotiated the check, so it must not produce the technical effect of an indorsement arising from negotiation. The Prudential Bank check was a negotiable check, and it bounced, so it was replaced by a non-negotiable crossed Solid Bank check. A that a negotiable check being replaced by a non-negotiable one has the effect of discharging from the obligation whoever may be the endorser of the negotiable check. The RTC adjudicated that there was Novation, and the ultimate effect of such substitution was to extinguish the obligation arising from the issuance of the Prudential Bank check. J.Y. Bros. appealed to CA and it reversed RTC s decision. CA ordered Salazar to pay the amount. ISSUE: Whether or not the acceptance of the Solid Bank check by the J.Y. Bros amounted to novation? HELD: Petition Denied Novation is done by the substitution or change of the obligation by a subsequent one which extinguishes the first, either by changing the object or principal conditions or substituting the person of the debtor or by subrogating a third person in the rights of the creditor. It may either be Extinctive or Modificatory, much being dependent on the nature of the change and the intention of the parties. Extinctive Novation is never presumed, there must be an express intention to novate; if it is implied, the acts of the parties must clearly demonstrate their intent to dissolve the old obligation as the moving consideration for the emergence of the new one. Implied novation necessitates that the incompatibility between the old and new obligation be total on every point such that the old obligation is completely superceded by the new one. The test of incompatibility is whether they can stand together, each one having an independent existence; if they cannot and are irreconcilable, the subsequent obligation would also extinguish the first. An extinctive novation would thus have the twin effects of, first, extinguishing an existing obligation and, second, creating a new one in its stead. This kind of novation presupposes a confluence of four essential requisites: (1) a previous valid obligation, (2) an agreement of all parties concerned to a new contract, (3) the extinguishment of the old obligation, and (4) the birth of a valid new obligation. Novation is merely modificatory where the change brought about by any subsequent agreement is merely incidental to the main obligation (e.g., a

changes only the terms of payment. adds other obligations not incompatible with the old ones or the new contract merely supplements the old one. Secondly.000. First. novation must be explicitly stated and declared in unequivocal terms as novation is never presumed. which replaced the dishonored Prudential Bank check. the same was also indorsed by petitioner which shows petitioner s recognition of the existing obligation to respondent to pay P214. In fact. . there must be an express intention to novate. the old and the new obligations must be incompatible on every point. this is inapplicable in this case.00 subject of the replaced Prudential Bank check. did not result to novation as there was no express agreement to establish that petitioner was already discharged from his liability to pay respondent the amount of P214.1avvphi Novation speaks of two distinct obligations. respondent s acceptance of the Solid Bank check. In this case. novation is never presumed. There are only two ways which indicate the presence of novation and thereby produce the effect of extinguishing an obligation by another which substitutes the same. the new agreement will not have the effect of extinguishing the first but would merely supplement it or supplant some but not all of its provisions. As we said. when the Solid Bank check was delivered to respondent.000.change in interest rates or an extension of time to pay.00 as payment for the 300 bags of rice. in this instance.) The obligation to pay a sum of money is not novated by an instrument that expressly recognizes the old.

She was only liable to Vitarich to those purchases that were proven to be delivered and received by her or her representative. This is contrary to the well-settled rule that a receipt. these may only serve as documentary records of her business dealings with Vitarich to keep track of the payments made but these are not enough to prove payment. the Court ruled that the burden rests on the debtor to prove payment. No. Thus. she discovered that here was an overpayment to Vitarich. It was neither confirmed that the checks issued by Losin were actually encashed by Vitarich. November 15.. Her supplier for poultry meat was Vitarich the Petitioner. All she presented were copies of the list of checks allegedly issued to Vitarich through its agent Directo. Unfortunately. As her account was transferred to Vitarich branch in Gen. Losin then appealed to the CA and judged in favor of Losin. Because of the unfavorable judgment. one who pleads payment has the burden of proving it. As a general rule. made by Losin. acting within the scope of their assigned tasks. but they failed to prove that the goods were delivered to and received by Losin. Criminal acts done by Vitarich s agent (Directo) has a separate accountability and must not be imputed to their client (Losin). 2010 FACTS: Respondent Chona Losin (Losin) is the owner of Glamour Chicken House. It was for the reason that Directo was known to Losin as an agent and authorized collector of Vitarich.R. She relayed this to Vitarich and said that she issued checks that were collected by Directo.. They also left without turning over invoices covering Losin s account. Losin was not duly notified of Directo s termination so she acted in good faith. The debtor has the burden of showing with legal certainty that the obligation has been discharged by payment. Losin s poultry needs were serviced through Rodrifo Directo and Allan Rosa both salesmen and authorized collectors of Vitarich. CHONA LOSIN G. In Jimenez v. a Statement of Payments Made to Vitarich and apparently copies of the pertinent history of her checking account with Rizal Commercial Banking Corporation (RCBC).VITARICH CORPORATION vs. or when through the fault of the creditor they have been impaired. her account started to experience problems Directo had been delivering stocks to her even without prior booking which was the customary process of doing business with her. 181560. Directo was terminated by Vitarich and Rosa and Baybay resigned. It appeared that 3 checks issued by Losin were dishonored because of either for reasons Drawn Against Insufficient Funds (DAIF) or Stop Payment. NLRC. Also. Employers shall be liable for the damages caused by their employees. the Court cannot consider that payment. At best. much less overpayment. CA also said that Vitarich has the burden of proof. and Arnold Baybay (Baybay). or bills of exchange or other mercantile documents shall produce the effect of payment only when they have been cashed. Vitarich filed a complaint in RTC General Santos City and it held in favor of Vitarich. rather than on the creditor to prove non-payment. Vitarich went to SC for a petition for review. Citing Article 1249 (2) of the Civil Code The delivery of promissory notes payable to order. Demand letters were sent to Losin covering her unpaid amounts but when she checked her records. Citing Article 2180 as basis. . Santos. a supervisor of said corporation. ISSUE: Whether or not Losin is liable to Vitarich? HELD: Yes Losin is clearly liable to Vitarich. is the best evidence of the fact of payment although not exclusive. No cash payment was proved. which is a written and signed acknowledgment that money and goods have been delivered. so she paid in good faith to him. Losin failed to present a single official receipt to prove payment.

A receipt was then issued for his payment. They sold 3 mortgaged parcels of land to Evengeline s mother under a Deed of Sale with Assumption of Mortgage. Alfredo then initiated an action for recovery of sum of money with damages against Land Bank. Alfredo later found out that his application for assumption of mortgage was not approved by the Bank. respondent. G. The Second paragraph of 1236 does not apply Alfredo made the payment for his own interest and not on behalf of the Spouses Sy. Atty. as he did not have an interest in the payment of the loan of the Spouses Sy. The Spouses could no longer pay their loan. made payment not as a debtor but as a prospective mortgagor. Alfredo maintained that Land Bank's foreclosure without informing him of the denial of his assumption of the mortgage was done in bad faith. After two weeks. told Alfredo and his counsel Atty. She informed Alfredo that he should pay part of the principal which was computed at PhP750.000 with another bank and it was past due. and provided them with requirements for the assumption of mortgage. Ireneo de Lumen that there was nothing wrong with the agreement with the Spouses Sy.000 and personally gave it to Atty. Facts: Spouses Johnson and Evangeline Sy secured a loan from the Land Bank of Legazpi City in the amount of 16 million pesos. Evangeline's father. vs. . Issue: Whether or not Article 1236 does not apply and is there novation in the instant case? Held: Art. thus. Moreover. Land Bank was not bound to accept Alfredo s payment. He. 190755. There is no Novation in this case. 2010. except that if he paid without the knowledge or against the will of the debtor. the petitioner Alfredo Ong. November 24. . Alfredo issued a check for PhP750. Whoever pays for another may demand from the debtor what he has paid. petitioner. then went to Land Bank to report the sale and assumption of mortgage. He made a conditional payment so that the properties subject of the Deed of Sale with Assumption of Mortgage would be titled in his name. Land Bank required Alfredo to make payment before his assumption of mortgage would be approved.000 and to update due or accrued interests on the promissory notes so that she could easily approve the assumption of mortgage. 1236 of the Civil Code The creditor is not bound to accept payment or performance by a third person who has no interest in the fulfilment of the obligation. The bank learned from its credit investigation report that the Ongs had a real estate mortgage in the amount of PhP18. Land Bank foreclosed the mortgage of the Spouses Sy after several months. he can recover only insofar as the payment has been beneficial to the debtor. Alfredo claimed that this was fully paid later on. recourse is not against the latter.R. Not all the elements of novation were present. He was informed that the certificate of title would be transferred accordingly. The Branch Head Atty. Alfredo only learned of the foreclosure when he saw the subject mortgage properties included in a Notice of Foreclosure of Mortgage and Auction Sale at the RTC in Tabaco. The RTC and CA held that the payment was not for the arrears but for the approval of his assumption of mortgage. unless there is a stipulation to the contrary.LAND BANK OF THE PHILIPPINES. ALFREDO ONG. the conflicting intention and acts of the parties underscore the absence of any express disclosure or circumstances with which to deduce a clear and unequivocal intent by the parties to novate the old agreement. Edna Hingco. Novation must be expressly consented to. No.300. Hingco. Albay. Hingco then informed Alfredo that the certificate of title of the Spouses Sy would be transferred in his name but this never materialized and no notice of transfer was sent to him.

. the other to substitute a new one in its place requiring a conflux of four essential requisites: (1) a previous valid obligation. Under this mode. (2) an agreement of all parties concerned to a new contract. It is extinctive when an old obligation is terminated by the creation of a new obligation that takes the place of the former.Novation may be Extinctive or Modificatory. and (4) the birth of a valid new obligation. (3) the extinguishment of the old obligation. novation would have dual functions one to extinguish an existing obligation. An extinctive novation results either by changing the object or principal conditions (objective or real). it is merely modificatory when the old obligation subsists to the extent it remains compatible with the amendatory agreement. or by substituting the person of the debtor or subrogating a third person in the rights of the creditor (subjective or personal).

et cetera. Facts: Respondent-spouses Norberto and Milagros Castañares are engaged in the business of exporting shell crafts and other handicrafts. costs of extra legal services. the contract of loan was invalid and consequently the accessory contract of mortgage is likewise null and void. these future debts must be sufficiently described in the mortgage contract.000.00 stated in the REMs merely represent the maximum total loans which will be secured by the mortgage. the evidence clearly shows that said REM was constituted as security for all the promissory notes The CA held that the RTC overlooked the fact that there were no adequate evidence presented to prove that petitioner released in full to the respondents the proceeds of the REM loan the appellate court declared that where there was failure of the mortgagee bank to deliver the consideration for which the mortgage was executed. thereby saving time. Respondents executed two real estate mortgages (REMs) covering their properties evidenced by Promissory Notes. respondents. The trial court found that despite respondents insistence that the REM covered only a separate loan forP86.00.R. petitioner. the latter proceeded with the extrajudicial foreclosure of the real estate mortgages.00 although the mortgage deeds indicated the principal amounts as P86.00 and P60. buttressed the claim of petitioner that the amounts of P86.000. The petitioner only released the amount of P35.00? Held: Because of the dragnet clause or Blanket mortgage clause that would subsume all debts of past and future origins. That the respondents subsequently availed of letters of credit and export advances in various amounts as reflected in the promissory notes. vs. NORBERTO CASTAÑARES and MILAGROS CASTAÑARES. The REMs shows that its terms are broad enough to cover packing credits and export advances granted by the petitioner to respondents. December 6.00 stated in the REM was released by Traders Royal Bank and that the REM was valid only to that extent.000. Issue: Whether or not the CA erred in holding that the real estate mortgage dated 18 april 1977 is valid only in part to the extent of php35. G. Because only 35. A pledge or mortgage given to secure future advancements is a continuing security and is not discharged by the repayment of the amount named in the mortgage until the full amount of all advancements shall have been paid. 2010.00 which they believed petitioner committed to lend them. 172020. No.00 out of the P86.00 which is allegedly the amount proved to have been actually released to respondents out of the sum of php86. if from the four corners of the instrument.000. . An obligation is not secured by a mortgage unless it comes fairly within the terms of the mortgage contract. While a real estate mortgage may exceptionally secure future loans or advancements. loan closing costs. the amounts specified as consideration in the contracts do not limit the amount for which the pledge or mortgage stands as security.TRADERS ROYAL BANK.000.000. The Respondents obtained from petitioner Traders Royal Bank various loans and credit accommodations. travel. For failure of the respondents to pay their outstanding loans with petitioner.000.000.000. recording fees. the intent to secure future and other indebtedness can be gathered.000.00 and P60. A "dragnet clause" operates as a convenience and accommodation to the borrowers as it makes available additional funds without their having to execute additional security documents. It has been held as a valid and legal undertaking.

The Court of Appeals held that Yuson could claim benefits because the because "the offer was certain and the acceptance is absolute. .000. and SUK KYOO KIM. Respondent. An offer is a unilateral proposition made by one party to another for the celebration of a contract.S. a contract must come into existence by the mere acceptance of the offeree without any further act on the offeror s part." Korean Air could not have intended to ministerially approve all applications for the ERP. "MNLSM Management. Ltd. Suk informed Yuson that she was excluded from the ERP because she was retiring on 8 January 2002. YUSON. Consequently. June 16. and (3) the 21 August 2001 memorandum clearly states Korean Air s intention. and further acts on the offeror s part were necessary before the contract could come into existence. (2) applications for the ERP were forwarded to the head office for approval. there is a valid contract pursuant to the last paragraph of Article 1315 of the New Civil Code Issue: Whether or not the ERP that Korean Air offered to its employees and Yuson s acceptance constitutes a valid contract? (Art. 1319 of the Civil Code That the offer must be certain and acceptance absolute. No.R. Yuson accepted the offer for early retirement. LTD.KOREAN AIR CO. which was.. complete and intentional. "to prevent further losses. on its discretion. the offer is not certain: (1) the 21 August 2001 memorandum clearly states that. hence. 2010 Facts: Korean Air Co. Korean Air suffered a net loss of over $367. is hereby offering the said early retirement program to its staff". She reiterated her claim in that Korean Air s offer for early retirement and her acceptance of the offer constituted a perfected contract. ADELINA A. In order to cut costs. (Korean Air) hired Adelina Yuson (Yuson) as reservations agent.000. Petitioners vs. Explaining the exclusion as it was for staffs upon discretion of management who still have long years left with the company before reaching retirement age. 170369.1315) Held: No. Yuson claimed that her exclusion was discriminatory and requested Korean Air perform its obligation arising out of a Contract legally perfected with their Offer of ERP. The offer must be definite. Korean Air reduced its budget for 2001 by 10 percent. Korean Air offered its employees an early retirement program (ERP). citing Art. For an offer to be certain. G. In the present case. It was denied by Korean Air. Subsequently she was promoted to Passenger Sales Manger..

but the improvements or crops on the land may be mortgaged or pledged to qualified persons. The Original Certificate of Title containing the free patents were registered with the Registry of Deeds of Cagayan de Oro City. No. or corporations. VS. Viray filed an action for annulment of sale against the sheriff and MBTC with the RTC of Cagayan de Oro City. RESPONDENT. ISSUE: Whether or not the auction sale falls within the five-year prohibition period laid down in Section 118 of CA 141.500. in their own personal capacity and as solidary obligors (the three parties collectively known as the debtors). The Regional Trial Court (RTC) rendered judgment in favor of MBTC ordering the debtors to pay the money owed. Held: Section 118 of CA 141 states: Except in favor of the Government or any of its branches. The appellate court reversed the decision of the RTC of Cagayan de Oro City. The debtors loaned obtained two more loans from MBTC which subsequently went unpaid. together with respondent Viray. which approval shall not be denied except on constitutional and legal grounds. The CA ruled that the auction sale conducted by the sheriff was null and void ab initio since the sale was made during the five-year prohibition period in violation of Section 118 of Commonwealth Act No. the government issued Free Patents in favor of Viray over three parcels of land.000. February 25. The two loans were subsequently renewed and secured by one promissory note.. Pursuant to the writ of execution. G. On 29 December 1982. being the lis mota of the action. or instruction. 141 (CA 141) or the Public Land Act. lands acquired under free patent or homestead provisions shall not be subject to encumbrance or alienation from the date of the approval of the application and for a term of five years from and after the date of issuance of the patent and grant. the City Sheriff of Cagayan de Oro sold the lots at public auction in favor of MBTC as the winning bidder and issued a Certificate of Sale to MBTC. 2010 . The RTC of Cagayan de Oro City rendered its decision in favor of MBTC. Erlinda Viray-Jarque. Viray sought the declaration of nullity of the execution sale. represented by its President.METROPOLITAN BANK AND TRUST COMPANY. EDGARDO D. Viray filed an appeal with the CA alleging that the RTC of Cagayan de Oro City committed reversible error in ruling solely on the issue of redemption instead of the issue of validity of the auction sale.054 leaving a balance of P115. The debtors made a total payment of P134. 162218 FACTS: Rico Shipping. associations. the sheriff s deed of final conveyance and the TCT's issued by the Register of Deeds. A promissory note was executed promising payment in four semi-annual installments of P62. The RTC of Manila issued a writ of execution over the lots owned by Viray. PETITIONER. nor shall they become liable to the satisfaction of any debt contracted prior to the expiration of said period. Inc. units.R. transfer. the sheriff s certificate of sale.946 which remained unpaid despite demands by MBTC. VIRAY. No alienation. Obtained two separate loans from Metropolitan Bank and Trust Company (MBTC) in the total amount of P250. or conveyance of any homestead after five years and before twenty-five years after issuance of title shall be valid without the approval of the Secretary of Agriculture and Natural Resources.

In both instances. it is immaterial that the satisfaction of the debt by the encumbrance or alienation of the land grant was made voluntarily. just like what transpired in this case. For purposes of complying with the law. The provision that nor shall they become liable to the satisfaction of any debt contracted prior to the expiration of the five-year period is mandatory and any sale made in violation of such provision is void and produces no effect whatsoever. Its violation gives rise to the cancellation of the grant and the reversion of the land and its improvements to the government at the instance of the latter. the sale of the homestead lot acquired by the patentee less than five years before the obligation accrued even if the sale is involuntary. Clearly. is predicated on public policy. The law clearly provides that lands which have been acquired under free patent or homestead shall not be encumbered or alienated within five years from the date of issuance of the patent or be liable for the satisfaction of any debt contracted prior to the expiration of the period. or involuntarily. the auction sale falls within the five-year prohibition period laid down in Section 118 of CA 141. such as that effected through levy on the property and consequent sale at public auction. A civil obligation cannot be enforced against. In the present case. it is not within the competence of any citizen to barter away what public policy by law seeks to preserve. regardless of the dates when the loans were incurred. ruled in favor of petitioner ordering the debtors. It must be emphasized that the main purpose in the grant of a free patent or homestead is to preserve and keep in the family of the homesteader that portion of public land which the State has given to him so he may have a place to live with his family and become a happy citizen and a useful member of the society. the three loans were obtained on separate or several years before the free patents on the lots were issued by the government to respondent on 29 December 1982. The Supreme Court denied the petition and affirmed the Decision of the Court of Appeals. including respondent. The RTC of Manila. Section 118 of CA 141. or satisfied out of. The public auction conducted by the sheriff on the lots owned by respondent occurred on 12 October 1984. therefore. as in the case of an ordinary sale. in a Decision. This clearly falls within the five-year prohibition period provided in the law. . The execution sale of the lots occurred less than two years after the date of the issuance of the patents. the law would have been violated. to pay jointly and severally certain amounts of money.Yes.

It may be rebutted by clear and convincing evidence to the contrary. While it is true that a notarized document carries the evidentiary weight conferred upon it with respect to its due execution. HELD: No. Preponderance of evidence is the weight. It is evidence which is more convincing to the court as worthier of belief than that which is offered in opposition thereto. In civil cases. without . Eulogio Petitioner vs. He entered into a contract of lease with an option to purchase with the spouses. is not absolute. 5 of their Contract of Lease with Option to Purchase vesting him the right to acquire ownership of the subject property after paying the agreed amount of consideration." Preponderance of evidence is a phrase which. Before the 3-year lease period expires. the spouses Apeles were able to prove beyond preponderant evidence the invalidity of the Contract of Lease with Option to Purchase. Unfortunately. then the latter shall proceed with the execution of the contract by selling. When Arturo died. however.Enrico S. Enrico contended that Luz Apeles voluntarily signed their contract of lease and therefore the property should be transferred to him. and has in its favor the presumption of regularity. the party having the burden of proof must establish his case by a preponderance of evidence. and value of the aggregate evidence on either side and is usually considered to be synonymous with the term "greater weight of the evidence" or "greater weight of the credible evidence. R. Enrico Eulogio then instituted a Complaint for Specific Performance with Damages against the spouses Apeles. credit. means probability of the truth. The Supreme Court held that Enrico Eulogio can not compel the spouses Apeles to execute the Deed of Sale in his favor. According to Luz Apeles. Enrico decided to exercise his option to purchase the subject property by giving oral and written notice to the respondents. On the other hand. 2009 FACTS: The Spouses Apeles leased a property to Arturo Eulogio (Arturo). it was impossible for her to sign the contract because she was in the United States of America that time and that her signature thereon was just forged. spouses Apeles ignored his manifestations. 167884 January 20. this presumption. No. The Court of Appeals chose not to accord the disputed Contract full faith and credence. Spouses Clemente Apeles and Luz Apeles Respondents G. In the case at bar. his son Enrico succeeded as lessor of the subject property. The RTC ruled in favor of Enrico and ordered them to comply with the provisions of the Contract. It is stipulated in the contract that the LESSOR (Enrico) has an option to buy the subject house and lot within three years and that the monthly rentals paid by him during the 3-year lease period will just be deducted from the purchase price agreed upon by them. ISSUE: Whether or not Enrico can compel the spouses Apeles to execute the Deed of Sale over the subject property in his favor. While Enrico just relied on his own self-serving testimonies. There is also a stipulation that if Enrico gives an oral or written notice to the spouses before the expiration of the 3-year lessee period. transferring and conveying the said property to Enrico. in the last analysis. The Court of Appeals noted that the Notary Public did not observe utmost care in certifying the due execution of the Contract of Lease with Option to Purchase. Luz Apeles denied that she signed the contract. His cause of action is based on par.

In the present case. Its distinguishing characteristic is that it imposes no binding obligation on the person holding the option. It is not a sale of property but a sale of the right to purchase. or which gives to the owner of the property the right to sell or demand a sale An option is not of itself a purchase. or under. It is a condition offered or contract by which the owner stipulates with another that the latter shall have the right to buy the property at a fixed price within a certain time. he does not then agree to sell it.asserting any proof of collaborating testimony or circumstantial evidence to support his claim. aside from the consideration for the offer. there must be a separate and distinct consideration that supports it. but merely secures the privilege to buy. The absence of monetary or any material consideration keeps this court from enforcing the rights of the parties under said option contract. It is not a sale of property but a sale of right to purchase. He does not sell his land. It is a contract by which the owner of the property agrees with another person that the latter shall have the right to buy the former s property at a fixed price within a certain time.. This is considered as an option contract. the right or privilege to buy at the election or option of the other party. it is definite that Enrico gave no consideration to the spouses for the option contract. but he does sell something. or in compliance with certain terms and conditions. It is simply a contract by which the owner of the property agrees with another person that he shall have the right to buy his property at a fixed price within a certain time. . In order for an option contract to be valid. i. An option is a contract by which the owner of the property agrees with another person that the latter shall have the right to buy the former s property at a fixed price within a certain time.e.

000 inclusive of interest.000 as partial payment of the loan and a 200.240. 173227 / January 20. she paid additional amounts of cash and checks as interests for the loan. The RTC held that there was overpayment of the loan and that the respondent should refund to her the excess amount. The loan agreement was not written and there was no stipulation as to the payment of interest for the loan. vs.000 inclusive of interest. In such a case. The Petitioner insists that that there was no overpayment because the respondent admitted in the promissory note that that her monetary obligation was 1. As can be gleaned from the foregoing provision. 22 (Bouncing checks Law) when respondent failed to settle her account. The petitioner was still not satisfied with the interest of the loan threatened to block or disapprove her transactions in the Philippine Navy Office (PNO). if the borrower of loan pays interest when there has been no stipulation therefor. The petitioner said that respondent requested him to restructure the payment of the second loan as she could not give full payment to the loan. As per their agreement. monetary interest is due only if there was an express stipulation in writing for the payment of interest. Thus. She issued a check for 500. the provisions of the Civil Code concerning solutio indebiti shall be applied.SEBASTIAN SIGA-AN. He presented the checks for encashment but only one check was honoured.P. That the respondent s obligation was only to pay 540. No. ALICIA VILLANUEVA. Respondent. He then proceeded to file a criminal case for violation of B. G. Petitioner. 2009 Facts Alicia Villanueva (respondent) borrowed money from the Sebastian Siga-An (Petitioner) in the amount of 540. we have held that collection of interest without any stipulation therefor in writing is prohibited by law 1. and (2) the agreement for the payment of interest was reduced in writing. The concurrence of the two conditions is required for the payment of monetary interest. The Total amount she paid was 1. specifically mandates that no interest shall be due unless it has been expressly stipulated in writing. Under Article 1960 of the Civil Code. the obligation to return it arises.R. No.000 and that the interest should not be included as there was no agreement between them. Respondent admitted that she borrowed an amount of 1. which refers to monetary interest.000. There was no receipt given to her the reason was that there was mutual trust and confidence between them. Respondent did not categorically declare in the same case that she and respondent made an express stipulation in writing as regards payment of interest at the rate of 7%. Said provision provides that if something is received when there is no right to demand it. payment of monetary interest is allowed only if: (1) there was an express stipulation for the payment of interest. Article 2154 of the Civil Code explains the principle of solutio indebiti.200. Since she paid more than the amount of the loan the excess amount applied as interest. It concluded that the excess payment should be returned pursuant to the principle of solutio indebiti.240. respondent gave petitioner several post dated checks to guarantee payment of the obligation.000. a creditor-debtor relationship is created under a quasi-contract whereby the payor becomes the creditor who then . and it was unduly delivered through mistake.000 check as payment for the remaining balance. As earlier discussed. Issue: Whether or not there is interest payment due to the petitioner? Whether or not the principle of Solutio Indebiti applies in this case? Held: Article 1956 of the Civil Code.

The principle of solutio indebiti applies where (1) a payment is made when there exists no binding relation between the payor. Respondent was under no duty to make such payment because there was no express stipulation in writing to that effect. it applies It was duly established that respondent paid interest to petitioner. The quasi-contract of solutio indebiti harks back to the ancient principle that no one shall enrich himself unjustly at the expense of another. and not through liberality or some other cause.has the right to demand the return of payment made by mistake. who has no duty to pay. . There was no binding relation between petitioner and respondent as regards the payment of interest. and the person who received the payment. Yes. The payment was clearly a mistake. and (2) the payment is made through mistake. Since petitioner received something when there was no right to demand it. 2. he has an obligation to return it. and the person who has no right to receive such payment becomes obligated to return the same. We have held that the principle of solutio indebiti applies in case of erroneous payment of undue interest.

The demand cannot be considered a waiver for a waiver must be positively demonstrated. The lower court ruled in favor of Premiere Bank. Also any inference of a waiver made by Premiere Bank is denied by the provision of the Promissory Note that no failure on the part of Premiere Bank to exercise. xxx The debtor s right to apply payment is only directory. He who has various debts of the same kind in favor of one and the same creditor.000.00 pesos and payable to Premiere Bank. and no delay in exercising any right hereunder. should it fail to pay within ten days from date of receipt. 176246 February 13. intelligently and with sufficient awareness of relevant circumstances and likely consequences. However.00 pesos. (2) No.000. the latter returned such check and sent a letter. evidenced by Promissory Note. In the instant case. and (3) unpaid balance of the principal. The Court also recognized the standard practice in commercial transactions to send demand letters before default may set in. which is one specifically phrased to subsume all debts of past and future .000. INC. (2) Whether the release of the Wack Wack Membership pledge is in order. HELD: (1) No. Considering that the parties are bound by a contract of adhesion. Central Surety had another commercial loan with Premiere Bank worth 40. while the Court of Appeals reversed the prior decision of the lower court. as manifested by the use of the word may . G. and that there is no need for an express demand from the creditor to make the obligations due and demandable. where Central Surety imposed a readymade contract on Premiere Bank. As all debts were already due. to which of them the same must be applied. again by Promissory Note.R. Central Surety. may declare at the time of making the payment. No. When Central Surety issued a check as payment to Premiere Bank. Relevant to the case is the statutory provision on application of payments. the subsequent demand made by Premiere Bank cannot be equated with a waiver of the right to demand payment of all the matured obligations of Central Surety to Premiere Bank.PREMIERE DEVELOPMENT BANK VS CENTRAL SURETY & INSURANCE COMPANY. it knew very well that it had several loans which granted Premiere Bank the right to apply its payment. To secure payment of the loan they were secured a real estate mortgage over a Condominium Certificate. the latter had freedom to reject or adhere to the contract. Such right may be waived or even granted to the creditor if both parties agree on such circumstance. It cannot be understood that such granted right was waived by Premiere Bank. To Secure Payment for the loan Central Surety executed a Deed of Assignment with Pledge in favor of Premier Bank its proprietary share in Wack Wack and golf and country Club. would also not be considered as a disadvantaged party. the pledge and real estate mortgage. it would be liable to Premiere Bank for: (1) unpaid interest up to maturity date. Should Central Surety fail to pay. made knowingly. The contract between the parties falls on the dragnet clause. 2009 FACTS: Respondent Central Surety & Insurance Company (Central Surety) acquired an industrial loan worth six million pesos from petitioner Premiere Development Bank. as part of a normal bank procedure. it was stipulated in the contract that the right to apply payments would be enjoyed by the Premiere Bank. and voluntary. This was alleged by the latter to be an act of waiving Premiere Bank s right to apply payments. ISSUE: (1) Whether or not Premiere Bank waived its right of application of payments on the loans of Central Surety. Central Surety moves for the release of the Wack Wack Membership pledge for their supposed paid loan. and not mandatory. (2) unpaid penalties up to maturity date. particularly Article 1252 of the Civil Code. demanding payment and threatening foreclosure of Central Surety s securities. This was availed through a renewal of Central Surety s prior loan. shall operate as a waiver thereof. It was stipulated in the contract that Premiere Bank as creditor would have the right to decide to which the payment would be applied. Central Surety issued a check worth 6.898. being a well-established personality.

the instant petition is partially granted.00 pesos was clearly worth more than the industrial loan worth 6.origins.000. which was understood to secure the ballooning debt of the Central Surety.000. also for future advancements. As all demandable obligations are yet to be fulfilled. The security clause in the instant case is that of a continuing pledge. wherein the Wack Wack Membership served as security for the standing obligation.000. The decision of the Court of Appeals is set aside and the decision of the Regional Trial Court of Makati is reinstated with modification. . Such security worth 15.000. the release of the Wack Wack membership as security cannot yet to be done as prayed for by Central Surety. Wherefore.00 pesos.

HELD: decision of the Court of Appeals is reinstated (1) No. PNB could not claim the compensation as reimbursement for the payments it made to APT. No. (2) Yes. it is necessary: (1) That each one of the obligors be bound principally. are creditors and debtors of each other. PNB proceeded to offset the funds of UPSUMCO. secured by a real estate mortgage over two parcels of land where the milling plant is located and chattel mortgages over the machineries and equipment. which is required for compensation. Compensation shall take place when two persons. Because it was not evident from the voluminous records what the outstanding balance of the operational loans UPSUMCO s bank accounts were debited. However. 126890. it defaults. Even with this condonation. 2009 FACTS: Petitioner United Planters Sugar Milling Co. the remand ordered by the Court of Appeals is ultimately the wisest and fairest recourse. as it is clear that the take-off loans were actually condoned. April 2. The Supreme Court held that PNB did not have a right to offset the funds of UPSUMCO. which were allegedly not assigned to APT. as APT had already condoned the debt or obligation. Also. The debt to which these were applied to had been remitted by APT. The balance was condoned by APT upon UPSUMCO's agreement to abandon its right to redeem the mortgaged assets. as provided in Articles 1278 and 1279 of the Civil Code. PNB was silent and did not even show any proof to bolster its claims that the operational loans were still outstanding. Subsequently.. who was paying on behalf of the debtor (that is entitled to be reimbursement in so far as the payment has redounded to the benefit of the debtor).UNITED PLANTERS SUGAR MILLING CO. amounting to roughly 90 million pesos. ISSUE: (1) Whether or not PNB has the right over the offsetting of the money of UPSUMCO as well as the compensation in relation to the Deed of Assignment.1 billion pesos as take-off loans from the respondent Philippine National Bank (PNB). . and that he be at the same time a principal creditor of the other xxx. Petitioner UPSUMCO holds that this was invalid. According to Article 1278. INC. Article 1279 provides that In order that compensation may be proper.. allotted for the financing of the sugar mill enterprise s operation. (2) Whether or not operational loans may be included in the condonation of Deed of Assignment. VS COURT OF APPEALS G. PNB could not compensate since it was merely an agent and not a principal creditor in the loan. since it did not have the consent of UPSUMCO. that had been actually condoned in the agreement. Inc. APT forecloses on the mortgaged assets which were sold for . As to the issue regarding the takeoff loan and the operational loan . in their own right. Thus UPSUMCO must be given a refund for the mistakenly offsetting of its money.6 billion pesos.45 billion pesos. In relation to the proper parties to a compensation. Another loan called operational loans was obtained by UPSUMCO. PNB insisted on its validity.R. PNB may not claim the compensation also since the payments did not redound to the benefit of UPSUMCO. That it was only the takeoff loans that had been condoned convinces the Court that these had already been also included in the condonation. (UPSUMCO) obtained 2. Philippine National Bank then assigned the credit to respondent Asset and Privatization Trust (APT). and (2) the debt or the Deed of Assignment had not yet been condoned since it was only the take off loans and not the operational loans . It is emphasized by the Court that the amount claimed by APT by way of counterclaim is over and beyond what it can possibly be entitled to. claiming that it was proper because: (1) it was an exercise of its right as a 3rd party. leaving a balance of 1.

granting him the position of Chairman Emeritus of MKSE for life. INC. or any other legal source. No. for which he would pay IPO prices. contract. the right to subscribe to the IPOs of corporations listed in the stock market at their offering prices. without identifying the basis or source thereof. Investigation and Clearing Department (SICD) of the Securities and Exchange Commission (SEC) against the petitioners Makati Stock Exchange. Furthermore. CAMPOS. the SICD denied petitioner s motion to dismiss.1994. they also issued a writ of preliminary injunction for the implementation or enforcement of the MKSE Board Resolution in question. Quasi Contracts. Article 1157 of the Civil Code. the complaint will be dismissed on the ground of failure to state a cause of action. passed sometime in 1989. ISSUE: Whether or not the petition failed to state a cause of action. there is nothing in the said Petition from which the Court can deduce that respondent.. Campos filed a petition with the Securities. 138814 . A cause of action is the act or omission by which a party violates a right of another. April 16.. Contracts. which allegedly deprived him of his right to participate equally in the allocation of Initial Public Offerings (IPO) of corporations registered with MKSE. HELD: The petition filed by respondent Miguel Campos should be dismissed for failure to state a cause of action. Inc. It contains three essential elements: 1) the legal right of the plaintiff 2) the correlative obligation of the defendant and 3) the act or omission of the defendant in violation of said legal right. (2) the delivery of the IPO shares he was allegedly deprived of. However. The Respondent merely quoted in his Petition the MKSE Board Resolution.MAKATI STOCK EXCHANGE. A pleading should state the ultimate facts essential to the rights of action or defense asserted. petitioners filed a motion to dismiss on the following grounds: (1) Petition became moot due to the cancellation of the license of the MKSE (2) The SICD had no jurisdiction over the petition and (3) the petition failed to state a cause of action. On March 11. (MKSE) The petition sought: (1) to nullify the Resolution dated 3 June 1993 of the MKSE Board of Directors. 2009 FACTS: Respondent Miguel V. is merely a conclusion of fact and law. vs. as distinguished from mere conclusions of fact or conclusions of law. G. by virtue of his position as Chairman Emeritus of MKSE. MIGUEL V.R. SICD granted the issuance of a Temporary Restraining Order to enjoin petitioners from implementing or enforcing the resolution of the MKSE. The mere assertion of a right and claim of an obligation in an initiatory pleading. the petition filed by respondent failed to lay down the source or basis of respondent s right and/or petitioner s obligation. Therefore an obligation imposed on a person and the corresponding right granted to another. whether a Complaint or Petition. must be rooted in at least one of these five sources. Acts or omissions punished by law and quasi delicts. . was granted by law. However. If these elements are absent. provides that Obligations arise from: law.

who had already boarded the tour bus. P100.00 as litigation expense Issues: Whether or Not American Express committed mora solvendi in its obligations to Pantaleon Held: The accepted relationship between a credit card provider and its card holders is that of creditordebtor. Such delay would not fall under mora accipiendi. and P50. While in the United States. Ten minutes later. as moral damages.e. several times without hassle or delay.475. There was delay on the part of respondent in its normal role as creditor to the cardholder. as attorney s fees. but with two other incidents similar to the Amsterdam brouhaha. There was an obligation on the part of respondent to act on Pantaleons purchases with "timely dispatch. Pantaleon while she was in Coster she purchased a diamond.00.826.00.00. Pantaleon asked the store clerk to cancel the sale. the establishment of the debt itself (purchases on credit of the jewelry) had not yet been perfected. After 15 minutes. but it would be delay in the extension of the credit in the first place. has already been constituted.00 at a store in Boston. This relationship already takes exception to the general rule that as between a bank and its depositors. P500. .000. then instructed his daughter to return to the bus and apologize to the tour group for the delay. but he cancelled his credit card purchase and borrowed money instead from a friend. demanding an apology for the "inconvenience. The store manager though asked plaintiff to wait a few more minutes. His son. Pantaleon used the card to purchase children s shoes worth $87. No. with the card company as the creditor extending loans and credit to the card holder. the bank is deemed as the debtor while the depositor is considered as the creditor. insofar as it has the obligation to the customer as creditor/obligee to act promptly on its purchases on credit. the store manager informed Pantaleon that respondent had demanded bank references. Pantaleon sent a letter through counsel to American Express (Respondent).. Respondent did give the apology requested. Mrs.000. such delay would not have been in the acceptance of the performance of the debtor s obligation (i. the repayment of the debt). On 30 October 1991. Herein. Pantaleon then instituted an action for damages with the Regional Trial Court (RTC) of Makati City. 13. which contemplates that the obligation of the debtor. Pantaleon supplied the names of his depositary banks. pendant and a chain which totalled U. If we shift perspectives see the credit card company as the debtor/obligor. who as debtor is obliged to repay the creditor. The sales clerk took the card s imprint. Branch 145. To pay for these purchases Petitioner presented an American Express card together with his passport. the store clerk informed Pantaleon that his AmexCard had not yet been approved. and it took 20 minutes before this transaction was approved by respondent.S.Pantaleon vs American Express International G. In a guided city tour in Amsterdam. Pantaleon continued to use his Amex card. soon returned to Coster and informed the other members of the Pantaleon family that the entire tour group was waiting for them.00. Pantaleon purchased golf equipment amounting to US $1. 174269 May 8.00 using his AmEx card. Pantaleon prayed that he be awarded P2. The Pantaleon family then went United States before returning to.000. after more than 30 minutes had transpired without the purchase having been approved.000. humiliation and embarrassment he and his family thereby suffered" for respondent s refusal to provide credit authorization for the aforementioned purchases. and asked Pantaleon to sign the charge slip.R. In Manila.000. as it remained pending the approval or consent of the respondent credit card company. 2009 Facts: Polo Pantaleon (Petitioner) and his family joined an escorted tour of Western Europe. as exemplary damages." or within a period significantly less than the one hour it apparently took before the purchase at Coster was finally approved. such as the actual purchases on credit.

163244 FACTS: Kalayaan Development & Industrial Corporation (Kalayaan) found out that Spouses Jose and Gloria Valenzuela (Petitioners) had built their home on a land it owned. They requested Kalayaan to issue a deed of sale for 118 square meters of the lot where their house stood. In the instant case. The requisites of novation are: 1) There must be a previous valid obligation. In the absence of an express agreement.SPOUSES JOSE T. June 22. HELD: No. petitioners and Kalayaan entered a Contract to Sell of the subject property for P1. Kalayaan demanded that petitioners pay their remaining outstanding obligation. 2) There must be an agreement of the parties concerned to a new contract. Novation is the extinguishment of an obligation by the substitution or change of the obligation by a subsequent one which extinguishes or modifies the first. Valenzuela to Juliet). Petitioners. Juliet Giron. Upon negotiation. assumed the remaining balance for the 118 square meters of the subject property at P10. petitioners would be liable for a liquidated penalty of 3% a month compounded monthly. Kalyaan then filed a Complaint for the Rescission of Contract and Damages against petitioners. novation takes place only when the old and new obligations are incompatible on every point. they demanded that they vacate said property. changed. Kalayaan never agreed to the creation of a new contract between them or Juliet. vs. Gloria Valenzuela s sister. 000.00. Respondent. Nevertheless. The RTC of Caloocan rendered a Decision in favor of Kalayaan. The stipulation was that upon failure to pay any of said installments. which the latter accepted in behalf of Gloria. The Petitioners were only able to pay a total of P208. or by substituting another in place of the debtor. either by changing the object or principal conditions.000 in twelve equal monthly instalments. modified and restricted as a consequence of the change in the person of the principal debtor (Sps. arguing that since they had paid half the purchase price. and 4) There must be the validity of the new contract. Parties to a contract must expressly agree that they are abrogating their old contract in favor of a new one.000. 3) There must be the extinguishment of the old contract. an act of tolerance on the part of Kalayaan. but went unheeded. sent two demand letters asking petitioners to pay their outstanding obligation with penalties. instead. G.00 per month to Kalayaan.R. Novation is never presumed. VALENZUELA and GLORIA VALENZUELA. ISSUE: Whether or not the original contract was novated and the principal obligation to pay for the remaining half of the subject property was transferred from petitioners to Juliet.416. Kalayaan. rescinding the contract between the parties and ordering petitioners to vacate the premises. or by subrogating a third person in the rights of the creditor. none of the requisites are present. Kalayaan s acceptance of the late payments made by Juliet is. Petitioners aver that the CA failed to see that the original contract between petitioners and Kalayaan was altered. 2009 . No. the CA affirmed the RTC ruling. KALAYAAN DEVELOPMENT & INDUSTRIAL CORPORATION. Thereafter.

When an interested party pays the obligation. including those earlier subleased to Astro. INC.R. as lessor. QUILALA. Petitioner. ISSUE: Whether or not Cecilleville are entitled to reimbursement from the defendants. the parties entered into a Memorandum of Agreement (MOA) dated September 28. LIMITLESS POTENTIALS. pursuant to which RCAM and LPI extended the lease period for five years. Cecilleville repeatedly asked the Acuña spouses to reimburse what it paid Prudential. subject to a 10% annual increase. 157391. for a period of four years. RCAM did not turn over to LPI the possession of the sublet advertising July 13.00. Cecilleville actually steps into the shoes of Prudential and becomes entitled. the monthly rentals were to be paid directly by Astro to the office of the RCAM. To clarify and consolidate the various agreements previously executed by RCAM and LPI. The rentals were subject to 15% increase every two years. with a total duration of seven years from February 1. not a real extinguishment of the obligation. RCAM. and LPI.CECILLEVILLE REALTY AND SERVICE CORPORATION. Petitioners. not only to recover what it has paid. vs. THE HON. and Prudential initiated foreclosure proceedings. Cecilleville tried to annul the real estate mortgage but failed when the Court ruled that Cecilleville had ratified the real estate mortgage. No. RCAM leased to LPI specific advertising spaces. Branch 57. he can recover only insofar as the payment has been beneficial to the debtor. In the MOA. Inc. a Sublease Agreement was entered into by LPI and Astro Advertising. 2005 RCAM is the owner of advertising spaces located within the compounds of the Our Lady of Guadalupe Minor Seminary and San Carlos Seminary in Guadalupe. Respondents G. he is subrogated in the rights of the creditor. and (b) an Amendment To An Agreement. Cecilleville clearly has an interest in the fulfillment of the obligation because it owns the properties mortgaged to secure the Acuña spouses loan. HELD: Yes. Makati City. The Acuña spouses defaulted on their loan. in his capacity as Presiding Judge of the Regional Trial Court. Because of its payment of the Acuña spouses loan. When the sublease to Astro expired in February 1995. whereby they disregarded all prior contracts and considered them of no further force and effect. (Astro) in which the former sublet Lot 28-B to the latter for five years. REINATO G.783. vs. Cecilleville paid Prudential to avoid foreclosure of its mortgaged properties. In effect. 2009 . No.00. in such cases. but also to exercise all the rights which Prudential could have exercised.000. 1990.96 and subject to a 10% annual increment.R. Respondents G. Cecilleville became a third-party accommodation mortgagor.000. at a monthly rental of P60. entered into the following agreements for the lease of promotional areas: (a) wherein RCAM leased to LPI certain advertising spaces for 4 years at a monthly rental of P11. but a change in the active subject. City of Makati and The ROMAN CATHOLIC ARCHBISHOP OF MANILA. July 15. as lessee. except that if he paid without the knowledge or against the will of the debtor. SPOUSES TITO ACUÑA and OFELIA B.. 1993. On January 18. 1997 and wherein the monthly rental was increased to PI2. Under the agreement. ACUÑA. 162074 FACTS: The Acuña spouses obtained a loan from Prudential secured by a real estate mortgage on Cecilleville s property. 1990to March 1. but the Acuña spouses refused to do so. Article 1236 of the Civil Code applies Whoever pays for another may demand from the debtor what he has paid. There is.

In 1995.areas. In this case. and that the implementation of the court's ruling would in effect create a lease relation between the parties that would commence beyond the lapse of the lease period provided for in the MOA. Indisputably. sent a letter to LPI its delinquency in settling the rental obligations which included the rentals due from Astro. that lease over the said property in favor of ESSO STANDARD EASTERN. as lessee. The court further pronounced that the payments made directly to RCAM during the first period should not be credited to LPI because the latter had donated the amount to RCAM. such "unexpired portion'' of the contract cannot be affected by the lapse of the period pending the final resolution of the complaint for ejectment filed by the lessor.550. Ogas (Ogas) owned a parcel of land and a portion was subject to a 30-year lease agreement4 with Esso Standard Eastern. However.10 selling the property to the spouses Narvaez where they built a commercial building on the property amounting to P300. this time selling the property to Celso S. For the Court to do otherwise would be to enrich RCAM at the expense of LPI. Alciso entered into a Deed of Sale with Right to Repurchase. effectivity or fulfillment cannot be made to depend exclusively upon the free and uncontrolled choice of just one party to a lease contract.000. Bate (Bate) for P50.50 when the complaint was filed. It bears stressing that LPI had occupied the leased properly from August 1. In 1979. Alciso alleged that she . after the MOA took effect. is not in accord with the applicable laws and prevailing jurisprudence. RCAM was obliged to deliver to LPI the premises which it forcibly took over on the said dale. which directed it to deliver to LPI the possession of the areas covered by the MOA for the remaining period of the lease. like a lease. Finally. Bate entered into a Deed of Sale of Realty. As covenanted. on she entered into another Deed of Absolute Sale. for the unused portion of the four-year period provided for in the MOA.000. Instead. Its continuance. without wailing for the final outcome of the ejectment case. as lessee. the rights over which as a lessor the SELLER likewise hereby transfers in full to the buyer . Ogas sold the property to his daughter Rose O. It further insists that the MOA stipulated a fixed lease period which had long before expired. two months and two days. for a period of four (4) years . By so ruling. ISSUE: Whether or not RCAM is still obliged to deliver the premise to LPI. It bears stressing that in a reciprocal contract. HELD: Yes. the said areas were leased to Macgraphics Carranz International Corporation (MCIC) which erected its own advertising signs thereon. Alciso demanded that a stipulation be included in the 14 August 1981 Deed of Sale of Realty allowing her to repurchase the property from the Spouses Narvaez.not a day less. RCAM asserts that the Court's ruling. The Deed stated that: The SELLER warrants that her title to and ownership of the property herein conveyed are free from all liens and encumbrances except those as appear on the face of the title. RCAM. 1996. Alciso later repurchased the property from Sansano and. A lessee unlawfully evicted by the lessor is entitled to be restored to the possession of the property leased for the "unused period" of the lease contract. The MTC. the MTC held that LPI was obliged to pay rentals in the amount of P414. LPI must remain in possession of the property. Thus. specifically. counted from his eviction. INC. absent any language therein showing that the term was deliberately fixed for the benefit of either the lessor or the lessee alone. Inc.33. The MTC maintained that the stipulation contained in the sublease agreement was a stipulation pour autrui under Article 1311 of the NCC.486. RCAM unilaterally rescinded the contract. 1996. the Court would thereby be merely enforcing the same. Narvaez vs Alciso 594 SCRA 60 FACTS: Larry A. but ordered the same to pay the rentals due from September 1995 until it ceased occupying the leased premises and declaring LPI made an overpayment of P344. Alciso (Alciso). allowing the former to profit by its misdeeds. to March 1995. LPI is entitled to remain in the property. The MTC rendered a Decision declaring LPI s possession of the leased premises as lawful. 1993 to October 6. RTC and the CA found this unilateral recission of the MOA unlawful. the period of the lease must be deemed to have been agreed upon for the benefit of both parties. it had the billboards of LPI on the spaces/areas leased by the latter dismantled on October 5.. the court also maintained that LPI should be credited for the payments made by Astro during the second period. or only three (3) years.000. selling the property to Jaime Sansano (Sansano) for P10.

DBT. It was conveyed by B.00 by the City Assessor of Quezon City as of the year 1985. he may demand its fulfillment provided he communicated his acceptance to the obligor before its revocation. Alciso and the Spouses Narvaez failed to reach an agreement on the repurchase price. of the Civil Code states the rule on stipulations pour autrui: If a contract should contain some stipulation in favor of a third person. Regalado & Co. Quilala. Quezon City. alleged that it is the legitimate owner and occupant of the subject property pursuant to a dacion en pago executed by B. INC. ISSUE: Whether or not the spouses Narvaez were right in claiming that Alciso did not communicate her acceptance of the favor contained in the stipulation pour autrui. (B. traversing the complaint. PANES G. through the new judge.C.C. thus. 200519. ISSUE: Whether or not. the respondent is the lawful owner of the property in question. (2) the stipulation is a part. HELD: The petition is unmeritorious.B. The property is included in Transfer Certificate of Title (TCT) No. The contracting parties must have clearly and deliberately conferred a favor upon a third person. not the whole. (4) the favor is unconditional and uncompensated. containing an area of Two Hundred Forty Thousand. Alciso s intimation to the Spouses Narvaez that she wanted to repurchase the property was insufficient. but Alciso was willing to pay only P150. Regalado and DBT used the derivative titles which covered properties located far from Pasong Putik. Judge Juanson. the Court laid down the requisites of a stipulation pour autrui: All the requisites are present in the instant case: (1) there is a stipulation in favor of Alciso. Alciso had four years from 14 August 1981 to repurchase the property since there was no express agreement as to the period when the right can be exercised.informed the Spouses Narvaez that she wanted to repurchase the property. D. and she informed the Spouses Narvaez that she wanted to repurchase the property. Regalado). Alciso.B. issued an Order reversing the earlier RTC Decision and dismissing the Complaint for lack of merit. No. he claims that he is the rightful and lawful owner of the said property. v. vs. 8. Inc. The RTC rendered a Decision in favor of the respondents.C. and (6) Bate and the Spouses Narvaez did not represent.) Pasong Putik. she could not repurchase the property. Article 1311.146) square meters. A mere incidental benefit or interest of a person is not sufficient.190. Tender of payment of the repurchase price is necessary in the exercise of the right of redemption.000.000. Mar-Bay Construction. Dacion en pago is the delivery and transmission of ownership of a thing by the debtor to the creditor as an . Novaliches. of the contract. (3) Bate and the Spouses Narvaez clearly and deliberately conferred a favor to Alciso. 2009 FACTS: Subject of this controversy is a parcel of land identified as Lot Plan Psu-123169. 167232 July 31. On its part. On Nov. Regalado to petitioner D. and situated at Barangay (Brgy. 2001. 1974 and issued in favor of B. the RTC. it may be stressed that there was no ample proof that DBT participated in the alleged fraud. Tender of payment is the seller s manifestation of his or her desire to repurchase the property with the offer of immediate performance.T. Quezon City. In the compliant filed by Ricadero Panes. (DBT) through a dacion en pago for services rendered by the latter to the former. and were not authorized by. paragraph 2. (5) Alciso communicated her acceptance of the favor before its revocation she demanded that a stipulation be included in the Deed of Sale of Realty allowing her to repurchase the property from the Spouses Narvaez. Novaliches.T.R. DBT filed a motion for reconsideration but the RTC judge died.C. HELD: Moreover. that it was assessed in the amount of P2.602. The Court of Appeals reversed the RTC s decision. respondents alleged that B. In Limitless Potentials. Regalado in the former s favor. In essence. MAR-BAY CONSTRUCTION. One Hundred Forty-Six (240. Inc. The Spouses Narvaez demanded P300.C. entered on July 19.

interest) in the assailed judgment is proper. INC. FSI is estopped from questioning the imposable rate of interest. On June 2. Consuelo filed a complaint for consignation. SPOUSES ROGELIO PERRERAS and PRISCILLA PERRERAS G. Sampaloc Manila. 170674 August 24. HELD: In view of FSI s failure to dispute this finding of the RTC because of its failure to perfect its appeal. On September 1.a.a. vs. 2009 FACTS: Spouses Pangan were the owners of the lot and two door apartments located at 1142 Casanas St. and this reduced interest rate was accepted. Consuelo offered to return the down payment but Perreras rejected it. For the same reason. in the absence of proof of his complicity in a fraud or of manifest damage to third persons. actually made payments to Betonval with 24% p. Bentoval informed FSI that further defaults would leave it no other choice but to impose the stipulated interest for late payments and take appropriate legal action to protect its interest. upon the death of her husband. justice and equity demand that the titleholder should not be made to bear the unfavorable effect of the mistake or negligence of the State's agents. BETONVAL READY CONCRETE. but the FSI has failed to pay the outstanding balance in 1992. interest. interest on the award to Betonval (in addition to the 24% p. On January 29. being the co-owner of the property. 1989. HEIRS OF CAYETANO PANGAN and CONSUELO PANGAN vs. INC. 157374. Thus. The case was brought to the Court of Appeals and rendered a decision in favor of bentoval. While the Torrens system is not a mode of acquiring title. but merely a system of registration of titles to lands.a. Bentoval delivered the concrete materials as stipulated in the contracts. Thereafter.000.R. It is clear that FSI is liable for the damages it incurred from its delay to deliver a sum of money to bentoval. August 27. in case of overdue payments and (c) a credit limit of P600. FSI is now estopped from raising this issue. The court likewise hold that the imposition of a 12% p. Consuelo received 20. respondents issued two checks payable to Consuelo. The court granted the petition and the decision of the court of appeals is reversed. The court denied the petition.a. There can be no other conclusion but that Betonval had reduced the imposable interest rate from 30% to 24% p. The basic stipulations were: (a) for FSI to supply the cement to be made into ready mixed concrete. In compliance with the agreement. Consuelo agreed to sell the above property to respondents. albeit impliedly. Betonval demanded from FSI its balance of P2. The respondent who .000 as a down payment. 1992. (b) for FSI to pay Betonval within seven days after presentation of the invoices plus 30% interest p. 1999. It is a special mode of payment where the debtor offers another thing to the creditor. 2009 FACTS: The petitioner and the respondent entered in to three contracts for the delivery of ready mixed concrete by Bentoval to FSI.460. FSI denied Bentovals allegation and claimed that the amount claimed is not due and demandable because they are still reconciling. in fact. therefore. who accepts it as an equivalent of the payment of an outstanding debt.R. ISSUE: Whether or not. FSI filed a motion for reconsideration but it was denied. G..accepted equivalent of the performance of the obligation. the parties agreed to increase the purchase price from 540. for the price of P540.000.000 for FSI. the RTC ruled for Betonval. Bentoval later brought the matter in action claiming the payment and its interest of 30% per annum. Three days later.349. FSI still failed to pay. evidenced by a receipt that also included the terms of the parties agreement. did not want to sell the subject properties. No. No. FOUNDATION SPECIALISTS. Consuelo refused to accept the checks because her children. Bentoval s compliant is premature and the decisions of the CA and RTC in favor of the respondent is invalid. By its own actions.000 to 580. There is no cogent reason to depart from the RTC s finding. by FSI when it proposed a new schedule of payments and.a. On the same day. FSI is ordered to pay for the interest from 12% to 24% per annum.

all the essential elements of a perfected contract are present in this case. this petition. To prevent the foreclosure of their properties.00 from respondent MTLC. Cayetano. and penalties. And dismissed the spouses Go Cinco complaint. From this dismissal. GO CINCO versus COURT OF APPEALS. MTLC and Ester successfully secured a reversal of the RTC s decision. was essential to its perfection. Ester instituted foreclosure proceedings against the spouses Go Cinco. . was conditioned on the cancellation of the mortgage in favor of MTLC. Ester went to the bank and confirmed the existence of the P1.000. and preliminary injunction before the RTC. Article 1318 of the Civil Code declares that no contract exists unless the following requisites concur: (1) consent of the contracting parties. Since the object of the parties agreement involves properties co-owned by Consuelo and her children. The RTC ruled in favor of the spouses Go Cinco. Ester refused to sign the deed and did not collect the P1. Branch 25. In her Answer.3 Million. but only its execution. The trial court found that Consuelo s receipt of the P20. interest. at least insofar as the sale involved Consuelo s conjugal and hereditary shares in the subject properties. that negates the existence of a perfected contract between the parties. 151903 October 9.3 Million loan proceeds. included the principal. indeed. the spouses Go Cinco applied for a loan with the Philippine National Bank. Maasin Branch and offered as collateral the same properties they previously mortgaged to MTLC.3 Million loan. MANUEL GO CINCO and ARACELI S. the release of the amount. While the respondents required that the occupants vacate the subject properties prior to the payment of the second installment. the case contains no element. hence. it upheld the existence of a perfected contract of sale. the petitioners-heirs insist that their approval of the sale initiated by their mother.256. RTC ruled in the respondents favor. and (3) cause of the obligation established. Consuelo. The PNB approved the loan application for P1. damages.00 earnest money was an eloquent manifestation of the perfection of the contract.R. To be able to pay the loan in favor of MTLC. 2009 FACTS: Petitioner Manuel Cinco obtained a commercial loan in the amount of P700. Manuel executed a Special Power of Attorney (SPA) authorizing Ester to collect the proceeds of his PNB loan. Consuelo claimed that she was justified in backing out from the agreement on the ground that the sale was subject to the consent of the petitioners-heirs who became co-owners of the property upon the death of her husband.insisted on enforcing the agreement in turn instituted an action for specific performance against Consuelo. Manuel informed Ester Servacio. Accordingly. As the MTLC loan was already due. factual or legal. His outstanding obligation amounted to P1. The Supreme Court ruled that the terms of the parties agreement are clear and explicit. The loan was evidenced by a promissory note and secured by a real estate mortgage.071. the spouses Go Cinco filed an action for specific performance. Since the petitioners-heirs disapproved of the sale. but required Ester to first sign a deed of release/cancellation of mortgage before they could release the proceeds of the loan to her.That a thing is sold without the consent of all the co-owners does not invalidate the sale or render it void. No. MTLC s President that there was money with the PNB for the payment of his loan with MTLC. ISSUE: Whether or not there was a perfection of contracts HELD: Yes. ISSUE: Whether the loan due the MTLC had been extinguished. however. ESTER SERVACIO and MAASIN TRADERS LENDING CORPORATION (MTLC) G.000. In sum. (2) object certain which is the subject matter of the contract. their refusal amounted to the absence of the required element of consent. Through an appeal with the CA. the spouses Go Cinco filed the present appeal by certiorari. Consuelo claimed that the contract became ineffective for lack of the requisite consent.66. the stipulation does not affect the perfection of the contract.

Megaworld Globus Asia. by notice dated April 23. she was demanding the return of P14. Article 1233 of the Civil Code states that a debt shall not be understood to have been paid unless the thing or service in which the obligation consists has been completely delivered or rendered. Megaworld. and damages. HELD: The Court affirmed the decision of the Court of Appeals with modification. Tanseco replied through counsel.R. Ester refused to collect and allow the cancellation of the mortgage. by letter of May 6. As modified. payment means not only the delivery of money but also the performance. however failed to deliver the unit within the stipulated period. which rules impliedly require acceptance by the creditor of the payment in order to extinguish an obligation. Manuel sought to pay Ester by authorizing her. finding that Megaworld had effected delivery by the notice of turnover before Tanseco made a demand. .731. Her demand having been unheeded. through an SPA. the HLURB Arbiter dismissed Tanseco s complaint for lack of cause of action. A few days shy of three years later. Had Ester presented the SPA to the bank and signed the deed of release/cancellation of mortgage. Tanseco.305. 2006. the amount of P14. P100. informed Tanseco that the unit was ready for inspection preparatory to delivery. P25.281. and costs of suit. Tanseco filed on June 5. Nonetheless. 2009 FACTS: Megaworld and respondent Tanseco entered into a contract to buy and sell a 224 square meter condo unit at pre-selling price The Salcedo Park in Makati City. that in view of Megaworld s failure to deliver the unit on time. to bear 6% interest per annum starting May 6. the SPA stood as an authority to collect the proceeds of the already-approved PNB loan that. Tanseco filed a Petition for Review under Rule 43 with the Court of Appeals the appellate court granted Tanseco s petition. Petitioner. Megaworld. Admittedly. 1995 Contract to Buy and Sell between the parties is cancelled. 2002. with interest at 12% per annum from April 30.70 representing the total installment payment she had made. By Decision of May 28. and P25. Tanseco pointed out that none of the excepted causes of delay existed. the delivery of the sum of money would have been effected and the obligation extinguished. a delivery of the sum of money due to MTLC. strictly speaking. and to pay P200. 1998. Inc. 2002 and 12% interest per annum from the time the judgment becomes final and executory. 2002 (notice of turnover).HELD: Yes.000 as moral damages. upon receipt by Ester. the dispositive portion of the Decision reads: The July 7. refund of payment.70. ISSUE: Whether or not Tanseco is entitled to be reimbursed the total amount she paid Megaworld. 2002 with the Housing and Land Use Regulatory Board s (HLURB) Expanded National Capital Region Field Office a complaint against Megaworld for rescission of contract.520. and Ester could not be compelled to accept it as payment based on Article 1233. to collect the proceeds of the PNB loan an act that would have led to payment if Ester had collected the loan proceeds as authorized. Tanseco G.. No. the delivery of the SPA was not. the expiration of the six-month grace period. 181206 October 9. 2003. These provisions must be read in relation with the other rules on payment under the Civil Code. In contracts of loan. plus P25. Megaworld Globus Asia. would have constituted as payment of the MTLC loan.000 exemplary damages. 1999. Tanseco paid all instalments due up to Jan. leaving unpaid the balance of 2.000 as attorney s fees. In the present case.63 pending delivery of the unit. of an obligation. Mila S. Her Motion for Reconsideration having been denied by Resolution dated August 30. Under Article 1232 of the Civil Code. as the case may be. in any other manner. is directed to pay respondent.000 as exemplary damages. Inc. V Mila S. Tanseco was thereupon ordered to pay Megaworld the balance of the purchase price. the debtor is expected to deliver the sum of money due the creditor. As the records show.731.000 attorney s fees.281.

Heirs of Sofia Quirong vs DBP (Development Bank of the Phil. with PNB having the highest bid. a mortgaged property. 1981. . Felisa sold the whole lot to the Funcions. the mortgaged properties were then published by PNB in a local newspaper of general circulation in Mindoro named "The Island Observer". RTC decision. Notwithstanding the suit. after the Fucions failed to pay their loan.050M. It is incumbent upon PNB to disprove the averments of the complaint itself and not the allegations in the motion for review. 1979. To enable Rosa and her husband Antonio Fucion get a loan from respondent DBP. On the other hand. Subsequently. Felisa and her 8 children filed an action for partition and decleration of nullity of documents with damages against the DBP and the Funions before the RTC. HELD: The Court Affirms the decision of the Court of Appeals that the Quirong heirs action for rescission of the sale between DBP and their predecessor. Felisa has nine children one of them naming Rosa Dalope Fucion. In the negative. the CA erred in coming up with a decision for PNB. secured by 2 mortgaged parcels of land.R. a loan of P400k was secured by spouses Encina for a common carrier business. Second issue was held. ISSUE: Whether or not the Quirong heirs action for rescission of respondent DBP s sale of the subject property to Sofia Quirong was already barred by prescription. and a credit agreement. When Sofia died. 4 years later. Both loans were secured by a promissory note. DBP executed a deed of absolute sale of the subject lot in Sofia Quirong Favor. DBP foreclosed the mortgage on the lot and consolidated ownership in its name on June 17. 1992 RTC decision in Civil Case D-7159 and applying the prescriptive period of four years set by Article 1389 of the Civil Code. ISSUE: W/N the foreclosure and sale of the mortgaged properties are null and void W/N the loan was used for agricultural business HELD: Case remanded. On 4 Feb 1997 these loans were fully paid.R. PNB claims that the loan was used by the spouses for metal craft. is barred by prescription reckoned from the date of finality of the December 16. heirs filed an answer in intervention. The spouses availed of the P1. These mortgaged properties were then auctioned.050M was used for agriculture. therefore does not require to be restructured. not for metal craft business therefore PNB should not have foreclosed the mortgaged properties and instead. that DBP must reimbursed and pay the damages to Quirong. 173441 FACTS: A 589 square meter land was given to Felisa Dalope by her deceased husband. No. On February 12. PNB vs Encina G.) G. restructured the loan for a longer gestation period. No. spouses Encina failed to pay. Spouses Encina claim that the loan of P1. declaring the DBP s sale to Sofia valid only with respect to the shares of Felisa and Rosa Funcion in the Property.250M. Sofia Quirong. Upon petition for review. 174055 FACTS: Spouses Encina secured a loan in the amount of P500k from PNB Occidental Mindoro for their metal craft business. They again secured P200k loan for their agricultural business. PNB granted an all purpose credit to spouses Encina in the amount of P1. Whether or not the heirs of Quirong were entitled to the rescission of the DBP s Sale of the subject lot to the late Sofia Quirong as a consequence of her heirs having been from it. DBP conditionally sold the lot to Sofia Quirong. The RTC should not have dismissed the complaint for lack of cause of action. Upon maturity.

000. They alleged that their dismissal were arbitrary and illegal. Tamayo. Moron. Petitioner warned respondent that unless he is paid in full. On July. one of whom is Delta Mining Industries Inc. Under the Labor code. Thus. Respondent then gave P15. On the other hand. five days service and incentive leave pay . It was respondents who violated the reciprocity of the contract. Ordered to pay P408. the joint and several liability of the contractor and the principal is mandated to assure compliance with the provisions of the Labor code including the statutory minimum wage. Silva. SPS. underpaid 13th month pay. On 10 Feb 1993 respondent again went to petitioner but the latter refused because of the same reason. and Fetalvero were hired as security guards by Jaguar and was assigned in Delata office Libis. overtime pay. Sales.e. the petitioner filed a separate civil action. ISSUE/S: Whether or not Jaguar and Delta should be jointly and severally liable to the guards. he will impound respondent's vehicle and detain him in his compound. as principal is made the indirect employer of the contractor's employees for the purposes of paying the employees their wages should the contractor be unable to pay them.R No. According to article 1248. for the time they were illegally dismissed until finality of decision. under the name R. The case was filed with the Labor Arbiter.Whether or not Jaguar is already entitled for reimbursement from Delta Milling even there is no payment made yet. Jaguar being the direct employer is the one principally liable to the employees. sought reconsideration of the dismissal but NLRC denied resulting to Jaguar filing for a petition for certiorari. 1999. April 22. On 3 Feb 1993. Furthermore.852. Sales G. Caranyagan. Caranyagan and Tamayo were terminated by Jaguar. night shift differential. The Labor Arbiter rendered a decision in favor of the private respondents Sales et al. eggs and cash. No. The appeal was dismissed because it was not the proper forum to raise the issue. 158086 FACTS: Respondents. All the guard-employees claim for monetary benefits such as underpayment. Aside from those claims Caranyagan and Tamayo argue that they were entitled to separation pay and back wages. Jaguar filed a partial appeal because of the failure of NLRC to resolve it's cross claim against Delta as the party Ultimately liable to pay the security guards.M. all the respondents claim for moral and exemplary damages.2008 FACTS: Petitioner Jaguar security and investigation agency a private Corporation engaged in the business of providing security services to it's clients. Jaguar. Jaguar Security and Investigation Agency vs. furthermore. ISSUE: W/N petitioner abused his rights in not parting with the eggs. HELD: No for his retention was justified.. . the creditor cannot be compelled to receive partial payments. i. respondent went to petitioner's hatchery in order to collect the eggs but the latter refused to part with them due to unpaid balances. Delta Milling. EFREN & MAURA EVANGELISTA G. i.000 but was not able to collect the eggs.e. with legal interest of 12% from the date of finality of this judgment until fully paid. rest day and holiday premium pay. The contractor petitioner (Jaguar) is made liable by virtue of his status as direct employer. Quezon City.R. Sy Chicks are in the business of eggs and their by-products in Nueva Ecija and Bulacan. or payments which are not of the same nature. the charges of illegal dismissal on the part of Tamayo and Caranyagan was dismissed for lack of merit and the respondents Jaguar Security Agency and Delta Milling Industries were ordered to jointly and severally pay all the six complainants.10. Respondent then handed another P15. he is not religiously paid by respondent.ASJ CORPORATION and ANTONIO SAN JUAN vs. HELD: Yes. They entered into a contract with petitioner for the incubation and hatching of these eggs. 162420.

payment which means not only the delivery of money but also the performance. G. In the trial. to prove respondent's indebtedness while respondent presented 28 original copies of the 34 invoices submitted by petitioner for the purpose of proving payment of the amount sought to be recovered by the latter. VS DFS SPORTS UNLIMITED INC. 179337 APRIL 30. (2) Whether or not the subject invoices prove such payment or at least raise a disputable presumption that payment has been made. ROYAL CARGO CORP. ISSUE: (1) Whether or not respondent. they have never engaged the services of the petitioner that they have no legal obligation. Article 1170 of the Civil Code provides that those who are negligent in the performance of their obligations are liable for damages. has the burden of proving payment. a security guard on duty at the school premises. Petitioner thereafter filed a complaint for damages against the respondents on the ground that they breached their obligation to provide students with a safe and secure environment and an atmosphere conducive for learning. Rosete was brought to the police station where he explained that the shooting was an accident wherein he was released considering that no formal complaint was filed against him. The liability of Delta Milling to reimburse Jaguar will only arise if and when petitioner actually pays it's employees the adjudged liabilities. is one of the concessionaires of the Subic Bay Metropolitan Authority (SBMA).No. 2008 FACTS: Saludaga was a sophomore law student in FEU when he was shot by Rosete. to indemnify them for whatever would be adjudged in favor of the petitioner if any. filed a complaint against the agency contracted by the latter to provide security services within its premises and it's President. FAR EASTERN UNIVERSITY G. and to pay attorney's fees and cost of the suit. Respondents. petitioner presented as part of its evidence 34 carbon copies of invoices. Accordingly. who is the debtor.R NO.R. Respondent contended that since May 1994. of the obligation. in any other manner. on the other hand. for breach of contract due to negligence in providing a safe learning environment. HELD: The Court held that FEU breached the school-student contract for negligence on its obligation to ensure and take adequate steps to maintain peace and order within the campus after it was found that FEU failed to undertake steps to ascertain and confirm that the security guards assigned in the campus possess the qualifications required in the Security Service Agreement between FEU and Galaxy. On April 19. respondent FEU is liable to petitioner for damages. 1995.63 plus legal interest as well as attorney's fees and costs of suit. 158261 FACTS: Petitioner is an international freight forwarder. HELD: . Petitioner was rushed to FEU-NRMF due to the wound he sustained. is the operative fact which will entitle either of the solidary debtors to seek reimbursement for the share which corresponds to each of the debtors. NO. It is principally engaged in the importation and local sale of duty-free sporting goods and other similar products.449. JOSEPH SALUDAGA VS. Respondent. Respondent engaged the services of the petitioner to attend and undertake the former's brokerage and trucking requirements. Sometime in October 1993. ISSUE: Whether or not the plaintiff be awarded judgment favorable to the latter thus proving FEU's negligence was attendant. in turn. petitioner filed against respondent a Complaint for Collection of Sum of Money with the Regional Trial Court (RTC) of Manila seeking the recovery of the amount of P248.

) No. rather than on the creditor to prove non-payment. together with the prices and charges. it does not mean that possession by a debtor of an invoice raises the presumption that it has already paid its obligation. .(1. the general rule is that the onus rests on the debtor to prove payment. The debtor has the burden of showing with legal certainty that the obligation has been discharged by payment. Even where the creditor alleges non-payment. it follows that the former carries the burden of proving such payment. An invoice. who is then under a duty of producing some evidence to show non-payment. may not be considered evidence of payment. etc. in and by itself. consignee. (2. factor. An invoice is simply a list sent to a purchaser.. The settled rule is that one who pleads payment has the burden of proving it. containing the items. Where the debtor introduces some evidence of payment. of merchandise sent or to be sent to him. a mere detailed statement of the nature. quantity and cost or price of the things invoiced. the burden of going forward with the evidence as distinct from the general burden of proof shifts to the creditor.) No. Since respondent claims that it had already paid petitioner for the services rendered by the latter. and as opposed to a receipt. In addition.

SALAZAR V. TANSECO HEIRS OF SOFIA QUIRONG V. INC. FAR EASTERN UNIVERSITY ROYAL CARGO CORPORATION V. J. ACUNA LIMITLESS PORENTIALS.T. INC. SOLIDBANK CORPORATION V. CA MAKATI STOCK EXCHANGE. V. ULAN SARMIENTO III DATE SUBMITTED: FEBRUARY 4. BROTHERS MARKETING CORPORATION VITARICH CORPORATION V. INC. SUBMITTED BY: Jose Rene Mariano R. INC. ENCINA ASI CORPORATION V. KALAYAAN DEVELOPMENT & INDUSTRIAL CORPORATION CECILLEVILLE REALTY AND SERVIA CORP. DBP PHILIPPINE NATIONAL BANK V.Y. Cruel 1-S SUBMITTED TO: ATTY. CAMPOS PANTALEON V. INC. BENTONVAL READY CONCRETE. ONG TRADERS ROYAL BANK V. INC. SPECIAL PLANS. V. SALES SALUDAGA V. INC.B. MAR-BAY CONSTRUCTION. PANES FOUNDATION SPECIALIST. APELES SIGA-AN N. V. QUILALA NARVAEZ V. INC. DFS SPORTS UNLIMITED.CASE DIGESTS FOR OBLIGATIONS AND CONTRACTS: LAO V. CASTANARES KOREAN AIR CO. INC. EVANGELISTA JAGUAR SECURITY AND INVESTIGATION AGENCY V. V. HEIRS OD CAYETANO PANGAN AND CONSUELO PANGAN V. INC. INC. 2012 . PERRERAS CINCO V. PERMANENT HOMES. LTD. V. V. CENTRAL SECURITY & INSURANCE CO. CA MEGAWORLD GLOBUS ASIA. INC. V. V. VILLANUEVA PREMIERE DEVELOPMENT BANK V. AMERICAN EXPRESS INTERNATIONAL. VALENZUELA V. YUSON METROPOLITAN BANK & TRUST CO. VIRAY EULOGIO V. LOSIN LAND BANK OF THE PHILIPPINES V. V. UNITED PLANTERS SUGAR MILING CO. ALCISO D.