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Hongkong and Shanghai Banking Corp.

v Broqueza Article 1179 of the Civil Code applies, to wit: every obligation whose
performance does not depend upon a future or uncertain event, or upon a
Petitioner Broqueza both obtained a car and an appliance loan from past event unknown to the parties, is demandable at once. The spouses
respondent HSBCL-SRP while petitioner Gerong obtained an emergency Broquezas obligation to pay HSBCL-SRP is a pure obligation. The fact that
loan from the same. Sometime in 1993, a labor dispute arose between HSBC HSBCL-SRP was content with the prior monthly check-off from Editha
and its employees, and the petitioners, as employees, were terminated. Broquezas salary is of no moment. Once Editha Broqueza defaulted in her
Because of their dismissal, petitioners were not able to pay the monthly monthly payment, HSBCL-SRP made a demand to enforce a pure obligation.
amortizations of their respective loans. Thus, respondent HSBCL-SRP Even though she paid for the loan amortization, which HSBC collected
considered the accounts of petitioners delinquent. Demands to pay the through payroll check-off, the payroll deduction is merely a convenient mode
respective obligations were made upon petitioners, but they failed to pay. of payment and not the sole source of payment for the loans. HSBCL-SRP
HSBCL-SRP filed a civil case to both of them for recovery and collection of never agreed that the loans will be paid only through salary deductions.
sums of money. The court then ruled in favour of the HSBCL-SRP.

Issue: Whether or not the loans were pure obligations and can be
demandable anytime. Reyes v. Tuparan

Held: Mila A. Reyes (petitioner) filed a complaint for Rescission of Contract with
Damages against Victoria T. Tuparan (respondent) before the RTC.In her
PROMISSORY NOTE Complaint, petitioner alleged, among others, that she was the registered
owner of a 1,274 square meter residential and commercial lot located in
P_____ Makati, M.M. ____ 19__
Karuhatan, Valenzuela City, and covered by TCT No. V-4130.
FOR VALUE RECEIVED, I/WE _____ jointly and severally promise to pay to
THE HSBC RETIREMENT PLAN (hereinafter called the "PLAN") at its office Petitioner mortgaged the subject real properties to the Farmers Savings Bank
in the Municipality of Makati, Metro Manila, on or before until fully paid the and Loan Bank, Inc. (FSL Bank) to secure a loan. Petitioner then decided to
sum of PESOS ___ (P___) Philippine Currency without discount, with sell her real properties so she could liquidate her bank loan and finance her
interest from date hereof at the rate of Six per cent (6%) per annum, payable businesses. As a gesture of friendship, respondent verbally offered to
monthly. conditionally buy petitioner's real properties.

I/WE agree that the PLAN may, upon written notice, increase the interest rate The parties and FSL Bank executed the corresponding Deed of Conditional
stipulated in this note at any time depending on prevailing conditions. Sale of Real Properties with Assumption of Mortgage. Due to their close
personal friendship and business relationship, both parties chose not to
I/WE hereby expressly consent to any extensions or renewals hereof for a reduce into writing the other terms of their agreement mentioned in
portion or whole of the principal without notice to the other(s), and in such a paragraph 11 of the complaint.
case our liability shall remain joint and several.1avvphi1
Respondent, however, defaulted in the payment of her obligations on their
In case collection is made by or through an attorney, I/WE jointly and
due dates. Instead of paying the amounts due in lump sum on their
severally agree to pay ten percent (10%) of the amount due on this note (but
respective maturity dates, respondent paid petitioner in small amounts from
in no case less than P200.00) as and for attorneys fees in addition to
time to time.
expenses and costs of suit.

In case of judicial execution, I/WE hereby jointly and severally waive our Respondent countered, among others, that the tripartite agreement
rights under the provisions of Rule 39, Section 12 of the Rules of Court. erroneously designated by the petitioner as a Deed of Conditional Sale of
Real Property with Assumption of Mortgage was actually a pure and absolute event that prevents the petitioner from being bound to convey title to the
contract of sale with a term period. It could not be considered a conditional respondent.
sale because the acquisition of contractual rights and the performance of the
obligation therein did not depend upon a future and uncertain event. Thus, the Court fully agrees with the CA when it resolved: Considering,
however, that the Deed of Conditional Sale was not cancelled by Vendor
Respondent further averred that she successfully rescued the properties from Reyes (petitioner) and that out of the total purchase price of the subject
a definite foreclosure by paying the assumed mortgage plus interest and property in the amount of 4,200,000.00, the remaining unpaid balance of
other finance charges. Tuparan (respondent) is only 805,000.00, a substantial amount of the
purchase price has already been paid. It is only right and just to allow
The RTC handed down its decision finding that respondent failed to pay in Tuparan to pay the said unpaid balance of the purchase price to Reyes.
full the total purchase price of the subject real properties. It stated that the
Granting that a rescission can be permitted under Article 1191, the Court still
checks and receipts presented by respondent refer to her payments of the
cannot allow it for the reason that, considering the circumstances, there was
mortgage obligation with FSL Bank. The RTC also considered the Deed of
only a slight or casual breach in the fulfillment of the obligation.
Conditional Sale of Real Property with Assumption of Mortgage executed by
and among the two parties and FSL Bank a contract to sell, and not a
contract of sale.
Heirs of Atienza v Espidol
The CA rendered its decision affirming with modification the RTC
Decision.The CA agreed with the RTC that the contract entered into by the Petitioners which are heirs of Paulino own a 21,959 square meters of
parties is a contract to sell but ruled that the remedy of rescission could not registered agricultural land at Valle Cruz, Cabanatuan City. They acquired the
apply because the respondent's failure to pay the petitioner the balance of land under an emancipation patent [3] through the governments land reform
the purchase was not a breach of contract, but merely an event that program. On August 12, 2002 the Atienzas and respondent Domingo P.
prevented the seller (petitioner) from conveying title to the purchaser Espidol entered into a contract called Kasunduan sa Pagbibili ng Lupa na
(respondent). may Paunang-Bayad (contract to sell land with a down payment) covering
the property. They agreed on a price of P130.00 per square meter or a total
Issue: of P2,854,670.00, payable in three installments:P100,000.00 upon the
signing of the contract; P1,750,000.00 in December 2002, and the
the title and ownership of the subject properties remains with the petitioner remaining P974,670.00 in June 2003. Respondent Espidol paid the
until the respondent fully pays the balance of the purchase price and the Atienzas P100,000.00 upon the execution of the contract and paid
assumed mortgage obligation. Thereafter, FSL Bank shall then issue the P30,000.00 in commission to the brokers. When the Atienzas demanded
corresponding deed of cancellation of mortgage and the petitioner shall payment of the second installment of P1,750,000.00 in December 2002,
execute the corresponding deed of absolute sale in favor of the respondent. however, respondent Espidol could not pay it. He offered to pay the
Atienzas P500.000.00 in the meantime,[6] which they did not accept. Claiming
that Espidol breached his obligation, on February 21, 2003 the Atienzas filed
Accordingly, the petitioners obligation to sell the subject properties becomes a complaint[7] for the annulment of their agreement. Respondent Espidol
demandable only upon the happening of the positive suspensive condition, argued that, since their contract was one of sale on installment, his failure to
which is the respondents full payment of the purchase price. Without pay the installment due in December 2002 did not amount to a breach. It was
respondents full payment, there can be no breach of contract to speak of merely an event that justified the Atienzas not to convey the title to the
because petitioner has no obligation yet to turn over the title. Respondents property to him. The non-payment of an installment is not a legal ground for
failure to pay in full the purchase price is not the breach of contract annulling a perfected contract of sale. Their remedy was to bring an action for
contemplated under Article 1191 of the New Civil Code but rather just an
specific performance. Moreover, Espidol contended that the action was did not arise. Since the suspensive condition did not arise, the parties stood
premature since the last payment was not due until June 2003. as if the conditional obligation had never existed. [21]

Held: Regarding the right to cancel the contract for non-payment of an Secondly, it was not a pure suspensive condition in the sense that the
installment, there is need to initially determine if what the parties had was a Atienzas made no undertaking while the installments were not yet due. Mr.
contract of sale or a contract to sell. In a contract of sale, the title to the Justice Edgardo L. Paras gave a fitting example of suspensive condition: Ill
property passes to the buyer upon the delivery of the thing sold. In a contract buy your land for P1,000.00 if you pass the last bar examinations. This he
to sell, on the other hand, the ownership is, by agreement, retained by the said was suspensive for the bar examinations results will be
seller and is not to pass to the vendee until full payment of the purchase awaited. Meantime the buyer is placed under no immediate obligation to the
price. In the contract of sale, the buyers non-payment of the price is a person who took the examinations.[22]
negative resolutory condition; in the contract to sell, the buyers full payment
of the price is a positive suspensive condition to the coming into effect of the
agreement. In the first case, the seller has lost and cannot recover the
Here, however, although the Atienzas had no obligation as yet to turn over
ownership of the property unless he takes action to set aside the contract of
title pending the occurrence of the suspensive condition, it was implicit that
sale. In the second case, the title simply remains in the seller if the buyer
they were under immediate obligation not to sell the land to another in the
does not comply with the condition precedent of making payment at the time
meantime. When Espidol failed to pay within the period provided in their
specified in the contract.[19] Here, it is quite evident that the contract involved
agreement, the Atienzas were relieved of any obligation to hold the property
was one of a contract to sell since the Atienzas, as sellers, were to retain title
in reserve for him.
of ownership to the land until respondent Espidol, the buyer, has paid the
agreed price. Indeed, there seems no question that the parties understood
this to be the case.[20]
The ruling of the RTC and the CA that, despite the default in payment, the
Atienzas remained bound to this day to sell the property to Espidol once he is
able to raise the money and pay is quite unjustified. The total price
Admittedly, Espidol was unable to pay the second installment
was P2,854,670.00. The Atienzas decided to sell the land because petitioner
of P1,750,000.00 that fell due in December 2002.That payment, said both the
Paulino Atienza urgently needed money for the treatment of his daughter who
RTC and the CA, was a positive suspensive condition failure of which was
was suffering from leukemia.[23] Espidol paid a measly P100,000.00 in down
not regarded a breach in the sense that there can be no rescission of an
payment or about 3.5% of the total price, just about the minimum size of a
obligation (to turn over title) that did not yet exist since the suspensive
brokers commission. Espidol failed to pay the bulk of the
condition had not taken place. And this is correct so far. Unfortunately, the
price, P1,750,000.00, when it fell due four months later in December
RTC and the CA concluded that should Espidol eventually pay the price of
2002. Thus, it was not such a small default as to justify the RTC and the CAs
the land, though not on time, the Atienzas were bound to comply with their
decision to continue to tie up the Atienzas to the contract to sell upon the
obligation to sell the same to him.
excuse that Espidol tried his honest best to pay.

But this is error. In the first place, since Espidol failed to pay the installment Wellex Group v U-Land Airlines
on a day certain fixed in their agreement, the Atienzas can afterwards validly
Wellex is a corporation established under Philippine law and it maintains
cancel and ignore the contract to sell because their obligation to sell under it
airline operations in the Philippines. U-Land Airlines Co. Ltd. (U-Land) is a
corporation duly organized and existing under the laws of Taiwan, registered Held: In these cases, this court held that there can be no rescission for an
to do business . . . in the Philippines.10 It is engaged in the business of air obligation that is non-existent, considering that the suspensive condition that
transportation in Taiwan and in other Asian countries. On May 16, 1998, will give rise to the obligation has not yet happened. This is based on an
Wellex and U-Land entered into a Memorandum of Agreement 12 (First allegation that the contract involved is a contract to sell. In a contract to sell,
Memorandum of Agreement) to expand their respective airline operations in the failure of the buyer to pay renders the contract without effect. A
Asia. In the First Memorandum of Agreement, Wellex and U-Land agreed to suspensive condition is one whose non-fulfillment prevents the existence of
develop a long-term business relationship through the creation of joint the obligation.192 Payment of the purchase price, therefore, constitutes a
interest in airline operations and property development projects in the suspensive condition in a contract to sell. Thus, this court held that non-
Philippines. The First Memorandum of Agreement stated that within 40 days remittance of the full price allowed the seller to withhold the transfer of the
from its execution date, Wellex and U-Land would execute a share purchase thing to be sold.
agreement covering U-Lands acquisition of the shares of stock of both AIR
PHILIPPINES INTERNATIONAL CORPORATION (APIC shares) and In this case, the First Memorandum of Agreement is not a contract to sell.
PHILIPPINE ESTATES CORPORATION (PEC shares).17 In this share Entering into the share purchase agreement or the joint development
purchase agreement, U-Land would purchase from Wellex its APIC shares agreement remained a stipulation that the parties themselves agreed to
and PEC shares. U-Land was entitled to a proportionate representation in pursue in the First Memorandum of Agreement.
the Board of Directors of APIC and PEC in accordance with Philippine
law.22 Operational control of APIC and APC would be exercised jointly by Based on the First Memorandum of Agreement, the execution of the share
Wellex and U-Land on the basis of mutual agreement and purchase agreement was necessary to put into effect respondent U-Lands
consultations.23 The parties intended that U-Land would gain primary control purchase of the shares of stock. This is the stipulation indicated in this
and responsibility for the international operations of APC. 24 Wellex memorandum of agreement. There was no suspensive condition of full
manifested that APC is a subsidiary of APIC in the second preambular clause payment of the purchase price needed to execute either the share purchase
of the First Memorandum of Agreement. Wellex and U-Land also agreed to agreement or the joint development agreement. Upon the execution of the
enter into a joint development agreement simultaneous with the execution of share purchase, the obligation of petitioner Wellex to transfer the shares of
the share purchase agreement. The joint development agreement shall cover stock and of respondent U-Land to pay the price of these shares would have
housing and other real estate development projects. arisen.

The 40-day period lapsed but Wellex and U-land were not able to enter into Enforcement of Section 9 of the First Memorandum of Agreement has the
any share purchase agreement although drafts were changed between the same effect as rescission or resolution under Article 1191 of the Civil Code.
two. However, despite the absence of a share purchase agreement, 0 2and The parties are obligated to return to each other all that they may have
remitted to Wellex a total of US$7,499,945.00. Wellex acknowledged received as a result of the breach by petitioner Wellex of the reciprocal
the receipt of these remittances in a confirmation letter addressed to U-Land obligation. Therefore, the Court of Appeals did not err in affirming the
and allegedly delivered stock certificates and TCTs of subject properties. rescission granted by the trial court.
Despite these transactions Wellex and U-land still failed to enter into the
share purchase agreement and the joint development agreement. "Thus, U- Hermosa v. Longara
land filed a complaint praying for rescission of the First Memorandum of
Agreement and damages against Wellex and for LUZ HERMOSA APPEALS AGAINST CA DECISION TO APROVE
the issuance of a Writ of Preliminary Attachment. LONGARA CLAIMS ON ESTATE OF FERNANDO HERMOSA, SR. the
Issue: Whether or not Wellexs obligation to deliver the totality of the shares
of stock would become demandable only upon remittance of the full purchase P2,341.41 representing credit advances
price of US$17.5 million.
P12,924.12 made to his son Francisco Hermosa
P3,772 made to his grandson, Fernando Hermosa, Jr. intestate. Without such a buyer the sale could not be carried out or the
proceeds thereof sent to the islands. It is evident, therefore sent to the
The Court of Appeals found that payment should be made by Fernando islands. It is evident, therefore, that the condition of the obligation was not a
Hermosa, Sr. as soon as he receive funds derived from the sale of his purely protestative one, depending exclusively upon the will of the intestate,
property in Spain." but a mixed one, depending partly upon the will of intestate and partly upon
chance, i.e., the presence of a buyer of the property for the price and under
LONGARA testified that credit advances were to be "payable as soon as
the conditions desired by the intestate. The obligation is clearly governed by
Fernando Hermosa, Sr.'s property in Spain was sold and he receive money
the second sentence of article 1115 of the old Civil Code (8 Manresa, 126).
derived from the sale."
The condition is, besides, a suspensive condition, upon the happening of
CA held payment did not become due until the administratrix received which the obligation to pay is made dependent. And upon the happening of
P20,000 from the buyer of the property. It was paid October 1947. Claim was the condition, the debt became immediately due and demandable. (Article
filed October 1948. 1114, old Civil Code; 8 Manresa, 119).

Issue: Whether or not the obligation contracted by the intestate was subject One other point needs to be considered, and this is the fact that the sale was
to a condition exclusively dependent upon the will of the debtor (a condicion not effected in the lifetime of the debtor (the intestate), but after his death and
potestativa) and therefore null and void, in accordance with article 1115 of the by his administrator, the very wife of the claimant. On this last circumstance
old Civil Code. we must bear in mind that the Court of Appeals found no evidence to show
that the claim was the product of a collusion or connivance between the
Held: A careful consideration of the condition upon which payment of the administratrix and the claimant. That there was really a promise made by the
sums advanced was made to depend, "as soon as he (intestate) receive intestate to pay for the credit advances maybe implied from the fact that the
funds derived from the sale of his property in Spain," discloses the fact that receipts thereof had been preserved. Had the advances been made without
the condition in question does not depend exclusively upon the will of the intention of demanding their payment later, said receipts would not have
debtor, but also upon other circumstances beyond his power or control. If the been preserved. Regularity of the advances and the close relationship
condition were "if he decides to sell his house." or "if he likes to pay the sums between the intestate and the claimant also support this conclusion.
advanced," or any other condition of similar import implying that upon him
(the debtor) alone payment would depend, the condition would As to the fact that the suspensive condition took place after the death of the
be protestativa, dependent exclusively upon his will or discretion. In the form debtor, and that advances were made more than ten years before the sale,
that the condition was found by the Court of Appeals however the condition we supported in our conclusion that the same is immaterial by Sanchez
implies that the intestate had already decided to sell his house, or at least Roman, who says, among other things, as to conditional obligations:
that he had made his creditors believe that he had done so, and that all that
1a The contractual obligation affected by suspensive condition. It is not
we needed to make his obligation (to pay his indebtedness) demandable is
demandable until the condition is fulfilled.
that the sale be consummated and the price thereof remitted to the islands.
Note that if the intestate would prevent or would have prevented the
consummation of the sale voluntarily, the condition would be or would have 2a The fulfillment of the suspensive condition retroacts the effects of the legal
been deemed or considered complied with (article 1119, old Civil Code).The act originating from the obligation to which it affects, at the time of the
will to sell on the part of the intestate was, therefore, present in fact, or celebration of this
presumed legally to exist, although the price and other conditions thereof
were still within his discretion and final approval. But in addition of the sale to 3a The said retroaction, not only takes place when the fulfillment of the
him (the intestate-vendor), there were still other conditions that had no condition is verified in the life of the contracting parties.
concur to effect the sale, mainly that of the presence of a buyer, ready, able
and willing to purchase the property under the conditions demanded by the
As the obligation retroacts to the date when the contract was entered into, all have been exposed to elements like a virus which could have contributed to
amounts advanced from the time of the agreement became due, upon the his ailment does not satisfy the requirement of substantial evidence. The rule
happening of the suspensive condition. As the obligation to pay became due is that awards of compensation cannot rest on speculations and
and demandable only when the house was sold and the proceeds received in presumptions as the claimant must prove a positive thing. The application of
the islands, the action to recover the same only accrued, within the meaning the rules would mean that absent any proof that the risk of contracting the
of the statute of limitations, on date the money became available here hence ailment was increased by the working conditions of the late Abraham, private
the action to recover the advances has not yet prescribed. respondents would not be entitled to compensation.

GSIS v Court of appeals

Abraham Cate complained of a mass on his left cheek which gradually Considering, however, that it is practically undisputed that under the present
increased in size. The histopath report revealed that he was suffering from state of science, the proof referred by the law to be presented by the
Osteoblastic Osteosarcoma. He underwent an operation to remove the mass. deceased private respondent claimant was unavailable and impossible to
After several months, another biopsyrevealed the recurrence of the ailment. comply with, the condition must be deemed as not imposed. The CA held
He underwent debulking of the recurrent tumor. that:

Abraham filed a claim for income benefits with Government Service

Insurance System (GSIS). But GSIS denied the claim on the ground that
The present case at bench is no different. Petitioners failure to present
Osteosarcoma is not considered an occupational disease under PD No. 626
positive evidence of a causal relation of the illness and his working conditions
and there is no showing that his duties as SPO4 in the Philippine National
is due to the pure and simple lack of available proof to be offered in
Police (PNP) had increased the risk of contracting said ailment.
evidence. Verily, to deny compensation to osteosarcoma victims who will
definitely be unable to produce a single piece of proof to that effect, is
When Abraham died, his heirs appealed the decision of GSIS to the
unrealistic, illogical and unfair. At the very least, on a very exceptional
Employees Compensation Commission (ECC). The ECC affirmed the
circumstance, the rule on compensability should be relaxed and be allowed
decision of the GSIS. On appeal, the Court of Appeals reversed and set
to apply to such situations. To disallow the benefit will even more add up to
aside the decision of the ECC.
the sufferings, this time, for the ignorance of the inability of mankind to
Issue: whether or not the CA erred in ruling that the ailment of the late discover the real truth about cancer.
Abraham is compensable under the present law on employees
As earlier noted, however, in the specific case of respondent, the requirement
is impossible to comply with, given the present state of scientific
Held: In this case, Osteosarcoma is not listed as an occupational disease in knowledge. The obligation to present such as an impossible evidence must,
the Amended Rules on Employees Compensation. Hence, it is supposed to therefore, be deemed void. Respondent, therefore, is entitled to
be upon the claimant or private respondents to prove by substantial evidence compensation, consistent with the social legislations intended beneficial
that the risk of contracting Osteosarcoma was increased by the working purpose.
conditions of the late Abraham. Substantial evidence means such relevant
evidence as a reasonable mind might accept as adequate to support a
conclusion. The records show that Abraham failed to present evidence to
establish that the development of his ailment was traceable to his working
conditions in the Philippine Navy, the now defunct Philippine Constabulary
and the PNP. Further, private respondents allegation in their petition for
review with the CA that Abraham, as a rifleman in the Philippine Navy, may Taylor vs Uy Tieng piao
G.R. No. L-16109 1. Pay Leviste P11,900,000.

October 2, 1922 2. Assume Levistes indebtedness P1,900,000 to GSIS

3. Substitute Paranaque property with his own in 6 months.

FACTS Leviste arranged conformity of GSIS to petitioners assumption of obligation.

Taylor contracted his services to Tan Liuan & Co as superintendent of an oil CONTRACT TO SELL: failure to comply shall render contract automatically
factory which the latter contemplated establishing. The contract extended cancelled, all payments forfeited, plus rental and damages.
over 2 years and the salary was P600/month during the first year and
P700/month during the second with electric, light and water for domestic HERRERA only remitted P300,000 to GSIS despite receiving rentals P21,000
consumption or in lieu thereof, P60/month. At this time, the machinery for monthly and P800,000 in 4 years. He then requested GSIS for restructuring
contemplated factory had not been acquired, though ten expellers had been of the mortgage obligation because of his own arrarages in the payment of
ordered from the US. It was understood that should the machinery to be the amortizations. GSIS replied that as a matter of policy, it could not act on
installed fail, for any reason, to arrive in Manila within the period of 6 months, his request unless he first made proper substitution of property, updated the
the contract may be cancelled by the party of the second part at its option, account, and paid 20% thereof to the GSIS. GSIS sent notice to Leviste to
such cancellation not to occur before the expiration of such 6 months. The foreclose mortgage by reason of default in payment of amortizations.
machinery did not arrive in Manila within the 6 months; the reason does not
Application for foreclosure filed, properties sold at public auction with
appear, but a preponderance of evidence show that the defendants seeing
certificate in favor of GSIS. Leviste assigned its right to redeem both
that oil business no longer promised large returns, either cancelled the order
foreclosed properties to respondent Jose Marcelo, Jr. (Marcelo for brevity).
for machinery from choice or were unable to supply the capital necessary to
finance the project. Defendants communicated to Taylor that they had Marcelo redeemed the properties from the GSIS by paying it the sum of
decided to rescind the contract. Taylor instituted this action to recover P3,232,766.94 for which he was issued a certificate of redemption.
damages in the amount of P13k, covering salary and perks due and to Paranaque property turned over to Levisted for P250,000.00. Herrera
become due. informed GSIS of his right to redeem the foreclosed properties and asking
that he be allowed to do so in installments.

1. GSIS had not favorably acted thereon.

If it were apparent, or could be demonstrated, that the defendants were
under a positive obligation to cause the machinery to arrive in Manila, they Herrera instituted suit against Leviste for "Injunction, Damages, and
would of course be liable, in the absence of affirmative proof showing that the Cancellation of Annotation."
nonarrival of the machinery was due to some cause not having its origin in
their own act or will. The contract, however, expresses no such positive Trial Court rendered lack of basis in fact and in law: Ordered payments made
obligation, and its existence cannot be implied in the fact of stipulation, by petitioner to Leviste forfeited pursuant to their contract providing for
defining the conditions under which the defendants can cancel the contract. automatic forfeiture "in the event of failure to comply with any of the
conditions contained therein, particularly the payment of the scheduled
LEVISTE OBTAINED LOAN FROM GSIS P1,900,000. amortizations."
Mortgaged 2 lots, the properties located at Paranaque and one located at Issue: Whether or not Herrera has the right to redeem the foreclosed
Buendia.. Leviste then Sold Buendia property to Herrera for P3,750,000. property
Held: It is quite true that petitioner had lost the P 1,895,688.00 he had paid to is the subject matter of the present litigation between the heirs of Juan
Leviste, plus P 300,000.00 he had paid to GSIS, less the rentals he had Galicia, Sr. who assert breach of the conditions as against private
received when in possession of the Buendia Property. That loss is respondent's claim anchored on full payment and compliance with the
attributable to his fault in: stipulations thereof. There is no dispute that the sum of P3,000.00 listed as
first installment was received by Juan Galicia, Sr. According to petitioners, of
(a) Not having been able to submit collateral to GSIS in substitution of the the P10,000.00 to be paid within ten days from execution of the instrument,
Paranaque Property; only P9,707.00 was tendered to, and received by, them on numerous
occasions. Concerning private respondent's assumption of the vendors'
(b) Not paying off the mortgage debt when GSIS decided to foreclose; and
obligation to the Philippine Veterans Bank, the vendee paid only the sum of
(c) Not making an earnest effort to redeem the property as a possible P6,926.41 while the difference the indebtedness came from Celerina
redemptioner. Labuguin. Petitioners asserted that not a single centavo of the P27,000.00
representing the remaining balance was paid to them.
3. It cannot be validly said that petitioner had fully complied with all the
conditions of his contract with Leviste. For one thing, he was not able to Issue: whether or not the conditions of the instrument were performed by
substitute the Paraaque Property with another collateral for the GSIS loan. herein private respondent as vendee.
Moreover, as stated by the Court of Appeals, "nowhere in the letter (of the
Held: Insofar as the third item of the contract is concerned, it may be recalled
GSIS) was mentioned that a final deed of sale must first be executed and
that respondent court applied Article 1186 of the Civil Code on constructive
presented before the assumption may be considered. For if it was really the
fulfillment which petitioners claim should not have been appreciated because
intention of GSIS, the requirement of Deed of Sale should have been stated
they are the obligees while the proviso in point speaks of the obligor. But,
in its letter."
petitioners must concede that in a reciprocal obligation like a contract of
purchase, (Ang vs. Court of Appeals, 170 SCRA 286 [1989]; 4 Paras, supra,
at p. 201), both parties are mutually obligors and also obligees (4 Padilla,
Tayag v. CA supra, at p. 197), and any of the contracting parties may, upon non-fulfillment
by the other privy of his part of the prestation, rescind the contract or seek
The deed of conveyance executed by Juan Galicia, Sr and Celerina fulfillment (Article 1191, Civil Code). In short, it is puerile for petitioners to say
Labuguin in favor of Albrigido Leyva involving the undivided one-half portion that they are the only obligees under the contract since they are also bound
of a piece of land with the following terms: as obligors to respect the stipulation in permitting private respondent to
assume the loan with the Philippine Veterans Bank which petitioners
1. The sum of PESOS: THREE THOUSAND (P3,000.00) is HEREBY impeded when they paid the balance of said loan. As vendors, they are
acknowledged to have been paid upon the execution of this agreement; supposed to execute the final deed of sale upon full payment of the balance
as determined hereafter.
2. The sum of PESOS: TEN THOUSAND (P10,000.00) shall be paid within
ten (10) days from and after the execution of this agreement; American Home assurance Co. v. NLRC

3. The sum of PESOS: TEN THOUSAND (P10,000.00) represents the Private respondent Romeo F. de Leon was a branch manager of petitioner
VENDORS' indebtedness with the Philippine Veterans Bank which is hereby companys office. In their desire to streamline and restructure the companys
assumed by the VENDEE; and organization and rationalize its operations, petitioners offered a Special Early
Retirement Program (SERP). to all its regular employees. The said program
4. The balance of PESOS: TWENTY SEVEN THOUSAND (P27,000.00.)
called for the voluntary separation/retirement of the employees in exchange
shall be paid within one (1) year from and after the execution of this
instrument. for cash payments consisting of two months basic salary for every year of
service and a lump sum of P50,000.00. The Company, however, reserved for
itself the sole discretion to approve or deny applications under the program. General who suggested that the award of P50,000.00 be sustained as an
The company then invited respondent to the said program and the alternative for moral and exemplary damages, but that was not made the
respondent submit its application for an early retirement but the same was basis for the award by the NLRC of the bonus or its ratiocination for the grant
denied on March by the company on the ground that its operational thereof.
requirements needed his continuous employment. Sometime in 1989,
petitioner company and Philamgen entered into a merger resulting in the The fact that private respondent signed a document of waiver and quitclaim
absorption of some of the employees of the former by the latter. A does not bar him from pursuing the P50,000.00 bonus under the SERP. His
memorandum was again circulated to all employees of the company receipt of the separation pay and the execution of the release documents
announcing the last and final re-opening of the SERP because it was cannot militate against him. That acceptance of separation pay does not
determined that there still exists a limited number of redundancies in the amount to estoppel, and the satisfaction receipt does not result in a
organization resulting from the recent restructuring of operations of American waiver. The law does not consider as valid any agreement to receive less
Home, PhilHome (another sister company) and Philamgen. Private compensation than what a worker is entitled to recover nor prevent him from
respondent applied anew under the program on the ground that Carlos Valin, demanding benefits to which he is entitled. Quitclaims executed by
had also been performing the functions of branch manager in the employees are thus commonly frowned upon as contrary to public policy and
office. Secondly, he believed that he could be more productive as an agent of ineffective to bar claims for the full measure of the workers legal
petitioner company if allowed to retire early. On the same day, petitioner rights, considering the economic disadvantage of the employee and the
company again denied his application for the same reason that it gave in inevitable pressure upon him by financial necessity.
denying his first application. It turned out that in an earlier letter, petitioners
Sps. Bronostro v. Sps. Luna
had prepared a notice of termination of employment for private respondent
1991 based on the ground that his position as a branch manager had been Respondent Constancia Luna (Constancia), as buyer, entered into a Contract
determined to be a duplication of another persons job, for which reason his to Sell with Bliss Development Corporation (Bliss) involving a house and lot.
position was declared redundant. Upon his receipt on February 7, 199l of the Barely a year after, Constancia, this time as the seller, entered into another
separation pay provided in the notice of termination amounting Contract to Sell6with petitioner Lourdes Bonrostro (Lourdes) concerning the
to P331,896.61, private respondent executed a release, waiver and quitclaim same property under the following terms and conditions:
wherein, as therein stated, he acknowledged receipt of the above amount as
full settlement of any and all claims he may have against the company 1. The stipulated price of P1,250,000.00 shall be paid by the VENDEE to the
arising from the companys retirement plan, agreement or contract relating to VENDOR in the following manner:
or arising from any and all incidents of his employment with the company.
The respondent wrote a letter to petitioner saying that was entitled to the (a) P200,000.00 upon signing x x x the Contract To Sell,
additional benefits under the SERP because the ground for termination of his
(b) P300,000.00 payable on or before April 30, 1993,
services - redundancy of position - was precisely a ground for management
to accept his application for retirement under the SERP. However, the (c) P330,000.00 payable on or before July 31, 1993,
company denied such claim.
(d) P417,000.00 payable to the New Capitol Estate, for 15 years
Issue: whether or not the additional claim of private respondent is already at P6,867.12 a month,
barred by his waiver and quitclaim under the principle of estoppel.
Immediately after the execution of the said second contract, the spouses
Held: A reading of the assailed resolution of the NLRC will show that public Bonrostro took possession of the property. However, except for
respondent did not in any way grant the P50,000.00 bonus as an alternative the P200,000.00 down payment, Lourdes failed to pay any of the stipulated
for the award of damages. Hence, petitioners objection on this ground is subsequent amortization payments.
without basis and does not deserve any consideration. It was the Solicitor
Constancia and her husband, respondent Juan Luna (spouses Luna), filed as amortizations by asserting that they were prevented by the latter from
before the RTC a Complaint for Rescission of Contract and Damages against fulfilling such obligation.
the spouses Bonrostro. In their Answer with Compulsory Counterclaim, the
spouses Bonrostro averred that they were willing to pay their total balance
of P630,000.00 to the spouses Luna after they sought from them a 60-day
the Court finds Art. 1186 inapplicable to this case. The said provision
extension to pay the same. However, during the time that they were ready to
explicitly speaks of a situation where it is the obligor who voluntarily prevents
pay the said amount in the last week of October 1993, Constancia and her
fulfillment of the condition. Here, Constancia is not the obligor but the
lawyer, Atty. Arlene Carbon (Atty. Carbon), did not show up at their
obligee. Moreover, even if this significant detail is to be ignored, the mere
rendezvous. The spouses Bonrostro likewise belied that they were not paying
intention to prevent the happening of the condition or the mere placing of
the monthly amortization to New Capitol Estates and asserted that on
ineffective obstacles to its compliance, without actually preventing fulfillment
November 18, 1993, they paid Bliss, the developer of New Capitol Estates,
is not sufficient for the application of Art. 1186. 37 Two requisites must concur
the amount of P46,303.44. Later during trial, Lourdes testified that
for its application, to wit: (1) intent to prevent fulfillment of the condition; and,
Constancia instructed Bliss not to accept amortization payments from anyone
(2) actual prevention of compliance.38
as evidenced by her March 4, 1993 letter to Bliss. The RTC ruled that the
delay could not be considered a substantial breach considering that Lourdes In this case, while it is undisputed that Constancia indeed instructed Bliss on
(1) requested for an extension within which to pay; (2) was willing and ready March 4, 1994 not to accept payment from anyone but her, there is nothing
to pay as early as the last week of October 1993 and even wrote Atty. Carbon on record to show that Bliss heeded the instruction of Constancia as to
about this on November 24, 1993; (3) gave Constancia a down payment actually prevent the spouses Bonrostro from making payments to Bliss.
of P200,000.00; and, (4) made payment to Bliss. The CA ruled that in There is no showing that subsequent to the said letter, the spouses Bonrostro
Considering that Lourdes had incurred x x x delay in the performance of her attempted to make payment to and was refused by Bliss. Neither was there a
obligations, she should pay (i) interest at the rate of 2% per month on the witness presented to prove that Bliss indeed gave effect to the instruction
sum of P300,000.00 from May 1, 1993 until fully paid and (ii) interest at the contained in Constancias letter. While Bliss Project Development Officer, Mr.
legal rate on the amounts of P330,000.00 and P214,492.62 from the date of Ariel Cordero, testified during trial, nothing could be gathered from his
default (August 1, 1993 and April 4, 1997 date of the appealed decision, testimony regarding this except for the fact that Bliss received the said
respectively) until the same are fully paid. letter.39 In view of these, the spouses Luna could not be said to have placed
an effective obstacle as to actually prevent the spouses Bonrostro from
Issue: Whether or not The spouses Bonrostro want be relieved from paying
making amortization payments to Bliss.
interest on the amount of P214,492.62 which the spouses Luna paid to Bliss