25.) NAGA TELEPHONE CO. VS.

CA
Petitioner: Naga Telephone Co., Inc.(NATELCO) and Luciano M. Maggay
Respondent: CA and Camarines Sur II Electric Cooperative, Inc (CASURECO II)
Facts:
Pet. NATELCO and Resp. CASURECO II entered into a contract for the use by
NATELCO in the operation of its telephone service the electric posts of CASURECO II
in Naga City. In consideration, NATELCO agreed to install, free of charge, ten (10)
telephone connections for the use by CASURECO II. Said contract also provided that the
term or period of the contract shall be as long as the NATELCO has need for the electric
light posts of CASURECO II it being understood that the contract shall terminate when
for any reason whatsoever, CASURECO II is forced to stop, abandoned its operation as a
public service and it becomes necessary to remove the electric lightpost.
After the contract had enforced for over ten (10) years, CASURECO II filed against
NATELCO fro reformation of the contract on the ground that it is too one-sided in favor
of NATELCO. It alleged that starting with the year 1981, NATELCO have used 319 posts
in the towns of Pili, Canaman, Magarao and Milaor, Camarines Sur, all outside Naga
City, without any contract with it; that at the rate of P10.00 per post, NATELCO should
pay CASURECO II for the use thereof the total amount of P267,960.00 from 1981 up to
the filing of its complaint; and that petitioners had refused to pay private respondent said
amount despite demands. However, NATELCO claimed that CASURECO II had asked
for telephone lines in areas outside Naga City for which its posts were used by them; and
that if petitioners had refused to comply with private respondent's demands for payment
for the use of the posts outside Naga City, it was probably because what is due to them
from private respondent is more than its claim against them. RTC ordered reformation of
the agreement which the CA affirmed applying Article 1267 of NCC.
Issue:
WON Article 1267 of NCC is applicable in the instant case
Held:
Yes.
The understanding of the parties when they entered into the Agreement on November 1,
1977 and the prevailing circumstances and conditions at the time is that CASURECO II
will allow NATELCO to utilize the posts only in the City of Naga because at that time the
capability of NATELCO was very limited, as a matter of fact it did not expect to be able
to expand because of the legal squabbles going on in the NATELCO. So, even at that
time there were so many subscribers in Naga City that cannot be served by the
NATELCO, so as a matter of public service it allowed them to sue its posts within the
Naga City. It was also declared that while the telephone wires strung to the electric posts
of CASURECO II were very light and that very few telephone lines were attached to its

posts 1977, said posts have become "heavily loaded" in 1989.

In truth, despite the increase in the volume of NATELCO's subscribers and the
corresponding increase in the telephone cables and wires strung by it to CASEURECO
II's electric posts in Naga City for the more 10 years that the agreement of the parties has
been in effect, there has been no corresponding increase in the ten (10) telephone units
connected by appellant free of charge to plaintiff's offices and other places chosen by
CASUSCO II's general manager which was the only consideration provided for in said
agreement for NATELCO's use of electric posts. Not only that, NATELCO even started
using electric posts outside Naga City although this was not provided for in the
agreement as it extended and expanded its telephone services to towns outside said city.
Hence, while very few of CASUCO's electric posts were being used by NATELCO in
1977 and they were all in the City of Naga, the number of CASUCO II's electric posts
that NATELCO was using in 1989 had jumped to 1,403,192 of which are outside Naga
City. Add to this the destruction of some of Resp.'s poles during typhoons like the strong
typhoon Sisang in 1987 because of the heavy telephone cables attached thereto, and the
escalation of the costs of electric poles from 1977 to 1989, and the conclusion is indeed
ineluctable that the agreement has already become too one-sided in favor of Pet. to the
great disadvantage of Resp., in short, the continued enforcement of said contract has
manifestly gone far beyond the contemplation of plaintiff, so much so that it should now
be released therefrom under Art. 1267 of the New Civil Code to avoid NATELCO's
unjust enrichment at CASUCO II's expense.

26.) VICTOR YAM&YEK SUN LENT VS. CA

Petitioner: VICTOR YAM & YEK SUN LENT, doing business under the name and style
of Philippine Printing Works
Respondent: VICTOR YAM & YEK SUN LENT, doing business under the name and
style of Philippine Printing Works
Facts:
The parties entered into a Loan Agreement with Assumption of Solidary Liability
whereby petitioners were given a loan of P500,000.00 by private respondent.
Denominated the first Industrial Guarantee and Loan Fund (IGLF), the loan was secured
by a chattel mortgage on the printing machinery in petitioners' establishment. Petitioners
subsequently obtained a second IGLF loan of P300,000.00 evidenced by two promissory
notes, dated July 3, 1981 and September 30, 1981. By April 2, 1985, petitioners had paid
their first loan of P500,000.00. On November 4, 1985, private respondent was placed
under receivership by the Central Bank and Ricardo Lirio and Cristina Destajo were
appointed as receiver and in-house examiner, respectively. On May 17, 1986, petitioners
made a partial payment of P50,000.00 on the second loan. As of July 31, 1986,
petitioners' total liability to private respondent was P727,001.35. On the same date,
petitioners paid P410,854.47 by means of a Pilipinas Bank check, receipt of which was
acknowledged by Destajo. The corresponding voucher for the check bears the following

notation: "full payment of IGLF LOAN." However, on September 4, 1986 and September
25, 1986, respondents sent demand letters to petitioners seeking payment of the balance
of P266,146.88. Petitioners did not respond prompting respondents to file an action for
collection of sum of money, in the alternative, for the foreclosure of the mortgaged
machineries. In their answer, petitioners claimed that respondent, through its president,
Mr. Sobrepenas, agreed to waive the penalties and service charges of the loan provided
they will pay the principal and interest. RTC ruled in favor of respondents which the CA
affirmed.
Issue:
WON petitioners are liable for the payment of the penalties and service charges on their
loan
Held:
Yes.
Art. 1270, par. 2 of the Civil Code provides that express condonation must comply with
the forms of donation. Art. 748, par. 3 NCC provides that the donation and acceptance of
a movable, the value of which exceeds P5,000,00, must be made in writing, otherwise the
same shall be void. In this connection, under Art. 417, par. 1, obligations, actually
referring to credits, are considered movable property. In the case at bar, it is undisputed
than the alleged agreement to condone P266,196.88 of the second IGLF loan was not
reduced in writing.
As to the notation in "full payment of IGLF loan", it merely states petitioners' intention in
making the payment, but in no way does it bind private respondent. Indeed, if private
respondent really condoned the amount in question, petitioners should have asked for a
certificate of full payment from respondent corporation, as they did in the case of their
first IGLF loan of P500,000.00.
Moreover, it is to be noted that the alleged agreement to condone the amount in question
was supposedly entered into by the parties sometime in July 1986, that is, after
respondent corporation had been placed under receivership on November 4, 1985. As
held in Villanueva v. Court of Appeals "the appointment of a receiver operates to suspend
the authority of a [corporation] and of its directors and officers over its property and
effects, such authority being reposed in the receiver." Thus, Sobrepeas had no authority
to condone the debt.