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ANCHETA, ANDRES, BAUZON, BRIONES, CORPUZ, DOMALANTA , FELIPE

,
MANOGAN, MILANES, REYNANTE, VILLAMOR [Type here]

Submitted to Atty. Maria Lulu G. Reyes 5/10/16 LLB1-A

1 Ocampo III v. People 543 SCRA 487
2 Leung Ben v. O'Brien 38 PHIL 182
3 Pelayo v. Lauron 12 PHIL 453
4 Hotel Nikko v. Reyes 452 SCRA 532
5 St. Mary's Academy v. Capitanos February 6 2002
6 Sps. Guanio v. Makati Shangri-La Hotel February 7 2011
7 TSPI, Inc. v. TSPIC Employees Union 545 SCRA 215
8 Regino v. Pangasinan College November 18 2004
9 PSBA v. CA February 4 1992
10 Ayala Corp v. Rosa Diana Realty 346 SCRA 663
11 Bricktown Development v. Amor Tierra Development 239 SCRA 126
12 Locsin v. Mekeni December 9 2013
13 Sarte Flores v. Sps. Lindo April 13 2011
14 Titan-Ikeda Construction v. Primetown Property 544 SCRA 466
15 PADCOM v. Ortigas May 9 2002
16 People v. Nurfrashir Hashim, et al. June 13 2012
17 Abella v. People August 17 2011
18 People v. Malicsi 543 SCRA 93
19 People v. Sia November 21 2001
20 People v. Doctolero August 20 2001
21 People v. Abulencia August 22 2001
22 Bermudez v. Melecio-Herrera February 26 1988
23 People v. Relova March 6 1987
24 Manantan v. CA January 29 2001
25 People v. Bayotas 236 SCRA 239
26 Barredo v. Garcia 73 PHIL 607
27 Del Carmen Jr. v. Geronimo Bacoy April 25 2012
28 Philippine Hawk Corporation v. Lee February 16 2010
29 Dy Teban v. Ching 543 SCRA 560
30 Safeguard Security v. Tangco 511 SCRA 67
31 Villanueva v. Domingo 438 SCRA 485
32 Calalas v. CA May 31 2000
33 Picart v. Smith 37 PHIL 813

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34 Durban Apartments v, Pioneer Insurance January 12 2011
35 Lagon v. Hooven Comalco 349 SCRA 363
36 Sps. Francisco v. CA 401 SCRA 594
37 Tanguiling v. CA 266 SCRA 78
38 Periquet v. CA 238 SCRA 697
39 Legaspi Oil v. CA 224 SCRA 213
40 Philippine Charter v. Central Colleges February 22 2012
41 TITAN-IKEDA CONSTRUCTION vs. PRIMETOWN 544 SCRA 466
42 PNB MADECOR vs. GERARDO C. UY 363 SCRA 128
43 Bargaza v. CA 268 SCRA 105
44 Tanguiling v. CA 266 SCRA 78
45 Tayag v. CA 219 SCRA 480
46 Periquet v. CA 238 SCRA 697
47 Raquel-Santos v. CA July 7 2009
48 RCBC v. CA 305 SCRA 449
49 State Investment v. CA 198 SCRA 392
50 Bank of the Philippine Islands v. Court of Appeals 377 SCRA 117
51 Leano v. Court of Appeals 369 SCRA 36
52 Heirs of Bacus v. Court of Appeals 371 SCRA 295
53 Integrated Packing v. Court of Appeals 333 SCRA 170
54 Laforteza v. Machuca 333 SCRA 643
55 Regala v. Carin April 6 2011
56 International Corporate Bank v. Gucco 351 SCRA 516
57 Republic v. Court of Tax Appeals 366 SCRA 489
58 Diaz v. Davao Light April 4 2007
59 Yasonna v. De Ramos 440 SCRA 154
60 Asian Terminals v. Philam July 24 2013
61 Yambao v. Zuniga 418 SCRA 266
62 Smith, Bell Dodwell v. Borja 383 SCRA 341
63 Ilusorio v. Court of Appeals 393 SCRA 89
64 National Power Corporation v. Court of Appeals 161 SCRA 334
65 Muaje-Tuazon v. Wenphil 511 SCRA 521
66 RCPI v. Verchez 481 SCRA 384
67 Victory Liner v. Gammad 444 SCRA 355
68 FGU v. Sarmiento 386 SCRA 312

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69 LRTA v. Natividad 397 SCRA 75
70 Rodzssen v. Far East Bank 357 SCRA 618
71 University of the East v. Jader February 17 2000
72 Bayne Adjusters v. Court of Appeals 323 SCRA 231
73 Delsan Transport v. C & A Consortium October 1 2003
74 PCIB v. Court of Appeals 350 SCRA 446
75 SMC and heirs of Ouana v. Court of Appeals July 4 2002
76 Heirs of Ochoa v. G&S Transport March 9 2011
77 Pacis v. Morales February 25 2010
78 Philippine Hawk Corporation v. Tan Lee February 16 2010
79 Mercury Drug v. Spouses Huang June 22 2007
80 Mendoza v. Soriano June 8 2007
81 Cerezo v. Tuazon 426 SCRA 167
82 Filcar Transports v. Espinas June 20 2012
83 FEB Leasing v. Sps. Baylon June 29 2011
84 Filipinas Synthetic v. De Los Santos March 16 2011
85 Viron v. De los Santos 345 SCRA 509
86 Mercury Drug v. Baking 523 SCRA 184 (2007)
87 Safeguard Security v. Tangco 511 SCRA 67
88 Pleyto v. Lomboy 423 SCRA 329
89 Viron v. De los Santos 345 SCRA 509
90 Sykl v. Begana 414 SCRA 237
91 Yambao v. Zuniga 418 SCRA 266
92 Mindanao Terminal v. Phoenix 587 SCRA 429
93 YHT Realty v. Court of Appeals 451 SCRA 638
94 Ramos v. Court of Appeals 321 SCRA 584 & 380 SCRA 467
95 Reyes v. Sisters of Mercy October 30 2000
96 Dr. Solidum v. People March 10 2014
97 Rosit v. Davao Doctor's Hospital December 7 2015
98 Nogales v. Capitol Medical Center 511 SCRA 204
99 Proffesional Services v. Agana 513 SCRA 478
100 Professional Services v. Court of Appeals 544 SCRA 170 & February 2
2010
101 Cantre v. Sps. Go 522 SCRA 547
102 Rubi Li v. Spouses Soliman June 7 2011

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103 People v. Delos Santos 355 SCRA 415
104 L.G. Foods v. Agraviador 503 SCRA 170
105 Magat v. Medialdea April 20 1983
106 Vda. De Mistica v. Naguiat 418 SCRA 73
107 Co v. Court of Appeals August 17 1999
108 Heirs of Quirong v. DBP December 3 2009
109 Heirs of Gaite v. The Plaza January 26 2011
110 Solar Harvest Incorporated v. Davao Corrugated July 26 2010
111 Reyes v. Tuparan June 1 2011
112 G.G. Sportswear Manufacturing v. World Class Properties, Inc. March 2 2010
113 Movido v. Reyes Pastor February 11 2010
114 Sps. Tongson v. Emergency Pawnshop January 15 2010
115 Sanz Maceda v. DBO August 11 2010
116 Raquel-Santos v. CA July 7 2009
117 Serrano v. Court of Appeals 417 SCRA 415
118 Gil v. Court of Appeals 411 SCRA 18
119 Reyes v. Lim 408 SCRA 560
120 Ong v. Tiu February 1 2002
121 Equatorial Realty v. Mayfair Theater 370 SCRA 56
122 Velarde v. Court of Appeals 361 SCRA 56
123 Asuncion v. Evangelista October 13 1999
124 Uy v. Court of Appeals September 9 1999
125 Tamayo, et. al. v. Abad Senora November 15 2010
126 Tan v. OMC Carriers January 12 2011
127 Victory Liner v. Heirs 394 SCRA 341
128 GSIS v. Labung Deang 365 SCRA 341
129 BPI Investment v. D.G. Carreon 371 SCRA 58
130 Khe Kong v. Court of Appeals 355 SCRA 701
131 Philippine Realty and Holding Corp. v. Ley Construction and Dev’t. June 13 2011
132 Megaworld Globus Asia, Inc. v. Tanseco October 9 2009
133 Sicam v. Jorge August 8 2007
134 Huibonhoa v. Court of Appeals December 14 1999
135 Ace Agro v. Court of Appeals 266 SCRA 429
136 Dioquino v. Laureano 33 SCRA 65
137 Bachelor Express v. Court of Appeals (Wrong SCRA # sa syllabus)

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138 Vasquez v. Court of Appeals 138 SCRA 558
139 Yobido v. Court of Appeals October 17 1997
140 Juntilla v. Fontanar 136 SCRA 625
141 Philamgen Insurance v. MGG Marine March 8 2002
142 Mindez v. Morillo March 12 2002
143 NAPOCOR v. Phillip Bros. 369 SCRA 629
144 Ong Genato v. Bayhon, et. al. August 24 2009
145 Union Bank v. Santibanez 452 SCRA 228
146 San Agustin v. Court of Appeals 371 SCRA 348
147 Project Builders, Inc. v. Court of Appeals 358 SCRA 626
148 Hongkong and Shanghai Bank v. Sps. Broqueza November 17 2010
149 Development Bank of the Philippines v. Court of Appeals 262 SCRA 245
150 Tomimbang v. Tomimbang August 4 2009
151 Gonzales v. Heirs 314 SCRA 585
152 Insular Life v. Young 373 SCRA 626
153 Direct Funders v. Lavina 373 SCRA 645
154 Vda. De Mistica v. Naguiat 418 SCRA 73
155 Hermosa v. Longara 93 PHIL 971
156 Trillana v. Quezon Colleges 93 PHIL 383
157 Visayan Sawmill v. Court of Appeals 219 SCRA 378
158 Leano v. Court of Appeals 369 SCRA 36
159 De Leon v. Ong February 2 2010
160 Heirs of Sandejas v. Lim 351 SCRA 183
161 Commissioner of Internal Revenue v. Primetown August 28 2007
162 NAMARCO v. Tecson 139 PHIL 584
163 Berg v. Magdalena Estates 92 PHIL 110
164 Lirag v. Court of Appeals 63 SCRA 375
165 Daguhoy v. Ponce 96 PHIL 15
166 Victoria Planters v. Victoria Milling 97 PHIL 318
167 Jespajo v. Court of Appeals 390 SCRA 27
168 Borromeo v. Court of Appeals 47 SCRA 65
169 Gonzales v. Jose 66 PHIL 369
170 Baluyut v. Poblete 514 SCRA 370
171 Malayan Realty v. Uy November 10 2006
172 Kasapian ng Manggagawa ng Coca-Cola v. Court of Appeals 487 SCRA 487

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173 Santos v. Santos 441 SCRA 472
174 Melotindos v. Tobias 391 SCRA 299
175 LL and Company v. Huang 378 SCRA 612
176 Brent School v. Zamora February 5 1990
177 Lim v. People November 21 1984
178 Pacific Banking v. Court of Appeals May 5 1989
179 Agoncillo v. Javier 38 SCRA 424
180 Ong Guan v. Century 46 PHIL 592
181 Legarda v. Miailhe 88 PHIL 673
182 Reyes v. Martinez 55 PHIL 492
183 Quizana v. Redugerio 94 PHIL 922
184 Marsman v. Philippine Geoanalytics June 29 2010
185 Alipio v. Court of Appeals 341 SCRA 441
186 PH Credit Corporation v. Court of Appeals 370 SCRA 155
187 CDCP v. Estrella 501 SCRA 228
188 Republic Glass Corporation v. Qua July 30 2004
189 Industrial Management v. NLRC 331 SCRA 640
190 Metro Manila Transit v. Court of Appeals June 21 1993
191 Inciong v. Court of Appeals 257 SCRA 578
192 Philippine Blooming Mills v. Court of Appeals October 15 2003
193 Queensland-Tokyo v. George September 8 2010
194 Shrimp Specialist, Inc. v. Fuji-Triumph December 7 2009
195 Asset Builders v. Stronghold October 18 2010
196 Esparwa Security v. Liceo de Cagayan 508 SCRA 373
197 Dimayuga v. PCIB August 5 1991
198 Cerna v. Court of Appeals March 30 1993
199 Nazareno v. Court of Appeals 343 SCRA 637
200 Alonzo v. San Juan 451 SCRA 45
201 David v. Court of Appeals 316 SCRA 710
202 Republic v. Thi Thu Thuy de Guzman June 15 2011
203 Marques v. far East Bank January 10 2011
204 Prisma Construction v. Menchavez March 9 2010
205 Macalalag v. People 511 SCRA 400
206 Tan v. Court of Appeals 367 SCRA 571
207 Eastern Shipping v. Court of Appeals 234 SCRA 78

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208 PCI v. Ng Sheung Ngor 541 SCRA 223
209 NSBC v. Philippine National Bank 435 SCRA 565
210 Polotan v. Court of Appeals 296 SCRA 247
211 New Sampaguita v. Philippine National Bank 435 SCRA 565
212 Nacar v. Gallery Frames August 13 2013
213 Estores v. Sps. Supangan April 18 2012
214 Hung v. BPI Card July 20 2010
215 Marques v. far East Bank January 10 2011
216 Land Bank v. Ong November 24 2010
217 Mallari v. Prudential June 5 2013
218 RGM Industries v. United Pacific June 27 2012
219 Prisma Construction v. Menchavez March 9 2010
220 Maceda, Jr. v. DBO/DBP August 11 2010
221 Philippine National Bank v. Encina 544 SCRA 508
222 Imperial v. Jaucian 427 SCRA 517
223 Pabugais v. Sahijwani 423 SCRA 596
224 Lo v. Court of Appeals 411 SCRA 523 (Sept. 23 2003)
225 Ligutan v. Court of Appeals February 12 2002
226 Pascual v. Ramos 384 SCRA 105
227 First Metro Investment v. Este del Sol 369 SCRA 99
228 Domel Trading v. Court of Appeals 315 SCRA 13
229 Medel v. Court of Appeals 299 SCRA 481
230 Reformina v. Tomol 139 SCRA 260 (Oct. 11 1985)
231 Lo v. KJH 413 SCRA 182
232 Philippine National Bank v. Court of Appeals 256 SCRA 44
233 Cathay Pacific v. Vasquez 399 SCRA 207
234 Citibank v. Sabentiano 504 SCRA 378
235 Telengton Bros. v. US Lines 483 SCRA 458
236 CF Sharp v. Northwest Airlines 381 SCRA 314
237 Padilla v. Paredes 328 SCRA 434
238 Tibajia v. Court of Appeals 223 SCRA 163
239 Development Bank of the Philippines v. Court of Appeals 494 SCRA 25
240 Vitarich v. Locsin November 15 2010
241 Metrobank v. Cabilzo 510 SCRA 259
242 Almeda v. Bathala Marketing 542 SCRA 470

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243 PCI v. Ng Sheung Ngor 541 SCRA 223
244 Palanca v. Guides 452 SCRA 461
245 PCIB v. Court of Appeals 481 SCRA 127
246 Lagon v. Hooven Comalco 349 SCRA 363
247 Bank of the Philippine Islands v. Court of Appeals 232 SCRA 302
248 Republic v. Thi Thu Thuy De Guzman June 15 2011
249 PCIB v. Franco March 5 2014
250 Audio Electric v. NLRC 308 SCRA 340
251 Land Bank of the Philippines v. Ong November 24 2010
252 Binalbagan v. Court of Appeals 256 SCRA 44
253 Lorenzo Shipping v. BJ Marthel 443 SCRA 163
254 Luzon Development Bank v. Enriquez January 12 2011
255 Estanislao v. East-West Banking Corporation 544 SCRA 369
256 Aquintey v. Tibong 511 SCRA 414
257 Lo v. CA 411 SCRA 523 (Sept. 23 2003)
258 ASI Corporation v. Evangelista 545 SCRA 300
259 Paculdo v. Regalado 345 SCRA 134
260 CBC v. Court of Appeals 265 SCRA 327
261 Mobil v. Court of Appeals 272 SCRA 523
262 Sps. Bonrostro v. Sps. Luna July 24 2013
263 Dalton v. FGR Realty and Development Corporation January 19 2011
264 Benos v. Lawilao 509 SCRA 549
265 People’s Industrial v. Court of Appeals October 24 1997
266 Eternal Gardens v. Court of Appeals December 9 1997
267 Rayos v. Reyes 398 SCRA 24
268 Occena v. Court of Appeals October 29 1976
269 Ortigas v. Feati Bank 94 SCRA 533
270 So v. Food Fest Land, Inc. April 7 2010
271 Magat v. Court of Appeals 337 SCRA 298
272 PNCC v. Court of Appeals 272 SCRA 183
273 NATELCO v. Court of Appeals 230 SCRA 351
274 Reyna v. Commission on Audit February 8 2011
275 Trans Pacific v. CA 235 SCRA 494
276 Dalupan v. Harden November 27 1951
277 Lopez Vito v. Tambunting 33 PHIL 226

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278 Estate of Mota v. Serra 47 PHIL 464
279 Yek Ton Lin v. Yusingco 64 PHIL 162
280 EGV Realty v. Court of Appeals July 20 1999
281 Aerospace Chemical v. Court of Appeals September 23 1999
282 Apodaca v. NLRC 172 SCRA 442
283 Spouses Chung v. Ulanday Construction October 11 2010
284 Mondragon v. Sola, Jr. January 21 2013
285 Insular Investment v. Capital One April 25 2012
286 Lao, et. al. v. Special Plans, Inc. June 29 2010
287 United Planters Sugar v. Court of Appeals April 2 2009
288 PNB Management v. R&R Metal 373 SCRA 1
289 Silahis v. IAC December 7 1989
290 Francia v. Court of Appeals June 28 1988
291 Trinidad v. Acapulco 494 SCRA 179
292 Heirs of Franco v. Sps. Gonzales June 27 2012
293 Hernandez-Nievera v. Hernandez February 14 2011
294 St. James College v. Equitable PCI Bank August 9 2010
295 Tomimbang v. Tomimbang August 4 2009
296 Mindanao Savings v. Willkom October 20 2010
297 Aquintey v. Tibong 511 SCRA 414
298 Asian Terminals v. Philam July 24 2013
299 Loadmasters v. Glodel Brokerage January 10 2011
300 Metrobank v. Rural Bank of Gerona July 5 2010
301 Swagman v. Court of Appeals 455 SCRA 175
302 Azolla Farms v. Court of Appeals November 11 2004
303 Bautista v. Pilar Development 312 SCRA 611
304 Evadel Realty v. Soriano 357 SCRA 395
305 Rosario v. De Guzman July 10 2013
306 Vector Shipping v. American Home July 3 2013
307 Villaza v. German Management August 8 2010
308 Insurance of the Philippine Islands v. Sps. Gregorio February 14 2011
309 Mariano v. Petron January 21 2010
310 Sps. Bernales v. Heirs of Sambaan January 15 2010
311 B&I Realty v. Caspe 543 SCRA 1
312 Mersina v. Garcia 509 SCRA 431

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313 Heirs of Gaudiane v. Court of Appeals March 11 2004
314 Laureano v. Court of Appeals March 9 2000
315 Banco Filipino v. Court of Appeals May 30 2000
316 Vda. De Delgado v. Court of Appeals August 28 2001
317 Maestrado v. Court of Appeals March 9 2000
318 F.A.T. Kee Computer v. Online Networks February 2 2011
319 Tanay Recreation v. Fausto 455 SCRA 436
320 Mendoza v. Court of Appeals March 9 2000
321 Lim v. Queensland 373 SCRA 31
322 Placewell v. Camote June 26 2006
323 Heirs of Ragua v. Court of Appeals January 31 2000
324 Metrobank v. Court of Appeals June 8 2000
325 Spouses Manuel v. Court of Appeals February 1 2000
326 Cuenco v. Cuenco 458 SCRA 496 (October 13
2004)
327 Laurel v. Desierto 383 SCRA 493
328 Hanopol v. SM 390 SCRA 439
329 Terminal Facilities v. PPA 378 SCRA 82
330 Mendoza v. Court of Appeals June 25 2001
331 Marques v. Far East Bank January 10 2011
332 Roblett Construction v. Court of Appeals 266 SCRA 71
333 Simedarby v. Goodyear June 8 2011
334 Far East Bank v. Borja January 25 1011
335 Kings Properties Corporation, Inc. v. Galido November 27 2009
336 Metrobank v. Cabilzo 510 SCRA 259
337 Mesina v. Garcia 509 SCRA 431
338 Pahamatong v. Philippine National Bank March 31 2005
339 Shopper’s Paradise v. Roque January 13 2004
340 Meatmasters v. Lelis Integrated 452 SCRA 626
341 Larena v. Mapili August 7 2003
342 Santos v. Santos October 2 2001
343 Villanueva-Mijares v. Court of Appeals April 12 2000
344 Garcia v. Villar June 27 2012
345 Spouses Edralin v. Philippine Veterans Bank March 9 2011
346 University Physicians Services v. Marian Clinics September 1 2010
347 Martin, et. al. v. DBS Bank Philippines June 16 2010

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348 Heirs of Zabala, et. al. v. Court of Appeals May 6 2010
349 Duncan v. Glaxo 438 SCRA 343
350 Star Paper v. Simbol 487 SCRA 228
351 Tiu v. Platinum Plans February 28 2007
352 Avon Cosmetics v. Luna 511 SCRA 376
353 Del Castillo v. Richmond 45 PHIL 679
354 Arwood v. DM Consunji 394 SCRA 11
355 Sps. Tecklo v. Rural Bank of Pamplona June 18 2010
356 Banate v. Phil. Countryside July 13 2010
357 Pascual v. Ramos 384 SCRA 105
358 Chua Tee Dee v. CA 429 SCRA 418 (2004)
359 GQ Garments v. Miranda 495 SCRA 741 (2006)
360 Bercero v. Capitol Development 519 SCRA 484 (2007)
361 Hermedes v. CA October 8 1999
362 PUP v. Golden Horizon March 15 2010
363 Villegas v. Court of Appeals 499 SCRA 276
364 Equatorial Realty v. Carmelo 264 SCRA 483
365 PUP v. Court of Appeals 368 SCRA 691
366 Litonjua v. L&R 320 SCRA 405
367 Josefa v. Zhandong 417 SCRA 269
368 Saludo v. Security Bank October 13 2010
369 PCI v. Ng Sheung Ngor 541 SCRA 223
370 Dio v. St. Ferdinand Memorial 509 SCRA 453
371 PILTEL v. Tecson 428 SCRA 378
372 PAL v. Court of Appeals 255 SCRA 48
373 Ermitano v. Court of Appeals 306 SCRA 218
374 Uniwide v. Titan-Ikeda 511 SCRA 335
375 Heirs of Salas v. Laperal December 13 1999
376 Medrano v. Court of Appeals 452 SCRA 77
377 Tan v. Gullas 393 SCRA 334
378 Gozan v. Mercado 511 SCRA 305
379 Sta. Lucia Realty v. Spouses Buenaventura October 2 2009
380 Chan v. Maceda 402 SCRA 352
381 Baluyot v. Court of Appeals July 22 1999
382 Cuyco v. Cuyco 487 SCRA 693

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383 Go v. Cordero May 4 2010
384 Tayag v. Court of Appeals March 25 2004
385 So v. Court of Appeals September 21 1999
386 International Freeport v. Danzas January 26 2011
387 Rockland v. Mid Pasig Development 543 SCRA 596
388 MMDA v. JANCOM 375 SCRA 320
389 Korean Air v. Yuson June 16 2010
390 Rockland v. Mid Pasig Land Development 543 SCRA 596
391 Manila Metal v. PNB 511 SCRA 444
392 Montecillo v. Reynes 385 SCRA 244
393 Soler v. Court of Appeals 358 SCRA 57
394 Palattao v. Court of Appeals May 7 2002
395 ABS-CBN v. Court of Appeals January 21 1999
396 Limson v. Court of Appeals 357 SCRA 209
397 Villanueva v. Philippine National Bank December 6 2006
398 Catalan v. Basa July 31 2007
399 Domingo v. Court of Appeals October 17 2001
400 Heirs of Sevilla v. Sevilla April 30 2003
401 Mendezona v. Ozamiz February 6 2002
402 Lim v. Court of Appeals 229 SCRA 616
403 Ruiz v. Court of Appeals 401 SCRA 594
404 Dela Cruz v. Sison 451 SCRA 754
405 Rural Bank of Sta. Maria v. Court of Appeals 314 SCRA 225
406 Carabeo v. Spouses Dingco April 4 2011
407 Chavez v. PEA 415 SCRA 403
408 Carabeo v. Spouses Dingco April 4 2011
409 Melliza v. City of Ilo-Ilo 23 SCRA 477
410 Catindig v. Vda. De Meneses February 2 2011
411 Orduna, et. al. v. Fuentebella June 29 2010
412 Brobio Mangahas v. Brobio October 20 2010
413 Golden Apple Realty v. Sierra Grande Realty July 28 2010
414 Askay v. Cosalan 46 PHIL 179
415 Heirs of Balite v. Lim 446 SCRA 56
416 Suntay v. Court of Appeals 252 SCRA 430
417 Uy v. Court of Appeals September 9 1999

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418 Pentacapital v. Makilito Mahinay July 5 2010
419 Heirs of Gaite v. The Plaza January 26 2011
420 Catly v. Navarro, et. al. May 5 2010
421 Liguez v. Court of Appeals 102 PHIL 577
422 Philbank v. Lui She 21 SCRA 52
423 Londres v. Court of Appeals 393 SCRA 133
424 Spouses Vega v. SSS September 20 2010
425 Balatbat v. Court of Appeals 261 SCRA 128
426 Universal Robina v. Heirs of Teves 389 SCRA 316
427 Sarming v. Dy June 6 2002
428 Cebu v. Court of Appeals 407 SCRA 154
429 ADR Shipping v. Gallardo 389 SCRA 82
430 Movido v. Pastor February 11 2010
431 TSPIC Corp. v. TSPIC Employees Union 545 SCRA 215
432 Estanislao v. East-West Banking Corporation 544 SCRA 369
433 Aquintey v. Tibong 511 SCRA 414
434 Cruz v. Court of Appeals 456 SCRA 165
435 Gonzales v. Court of Appeals 354 SCRA 8
436 Almira v. Court of Appeals 399 SCRA 351
437 Philbank v. Lim 455 SCRA 436
438 Rigor v. Consolidated Leasing 387 SCRA 437
439 Velasquez v. Court of Appeals June 30 1999
440 Heirs of Quirong v. Development Bank of the Philippines December 3 2009
441 Lee v. Bangkok Bank February 9 2011
442 Equatorial Realty v. Mayfair Theater 370 SCRA 56
443 Siguan v. Lim November 19 1999
444 Khe Kong v. Court of Appeals 355 SCRA 701
445 Suntay v. Court of Appeals 251 SCRA 430
446 Brobio Mangahas v. Brobio October 20 2010
447 Hernandez v. Hernandez March 9 2011
448 Fuentes, et. al. v. Roca April 21 2010
449 Associated Bank v. Spouses Montano October 16 2010
450 Miailhe v. Court of Appeals 354 SCRA 675
451 First Philippine Holdings v. Trans Middle East Equities, Inc. December 4 2009
452 Sanchez v. Malapad Realty 541 SCRA 397

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453 Oesmer v. PDC 514 SCRA 228
454 Vda. De Ape v. Court of Appeals 456 SCRA 193
455 Francisco v. Herrera 392 SCRA 317
456 Braganza v. Villa Abrille 105 PHIL 456
457 Katipunan v. Katipunan January 30 2002
458 Jumalon v. Court of Appeals January 30 2002
459 Cabales, et. al. v. Court of Appeals August 31 2007
460 Vda. De Ouano, et. al. v. Republic February 9 2011
461 Orduna, et. al. v. Fuentebella June 29 2010
462 Municipality of Hagonoy v. Hon. Dumdum March 22 2010
463 Shoemaker v. La Tondena 68 PHIL 24
464 PNB v. Philippine Vegetable Oil Company 49 PHIL 897
465 Vda. De Ouano, et. al. v. Republic February 9 2011
466 Municipality of Hagonoy v. Dumdum March 22 2010
467 Tan v. Villapaz 475 SCRA 720
468 Spouses David v. Tiongson August 25 1999
469 Cordial v. Miranda December 14 2000
470 Villanueva-Mijares v. Court of Appeals April 12 2000
471 Rosencor v. Inquing 354 SCRA 119
472 Firme v. Buka 414 SCRA 190
473 Querubin v. COMELEC December 8 2015
474 Golden Apple Realty v. Sierra Grande Realty July 28 2010
475 Heirs of M. Doronio v. Heirs of F. Doronio 541 SCRA 479
476 Sps. Bernales v. Heirs of Sambaan January 15 2010
477 Heirs of Liwagon v. Heirs of Liwagon November 26 2014
478 Campos v. Pastrana December 8 2009
479 Gurrea v. Suplico 488 SCRA 332
480 Frenzel v. Catito 406 SCRA 55
481 La Bugal B’laan v. Ramos December 1 2004
482 Agan v. PIATCO January 21 2004
483 Jaworski v. PAGCOR January 14 2004
484 Heirs of Balite v. Lim 446 SCRA 56
485 Pineda v. Court of Appeals 376 SCRA 222
486 Cruz v. Bancom 379 SCRA 490
487 Cauton v. Salud January 27 2004

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488 Hadja Fatima v. Hadji Abubacar August 2 2010
489 Infotech v. COMELEC January 13 2004
490 Pabugais v. Sahijwani 423 SCRA 596
491 Liguez v. Court of Appeals 102 PHIL 577
492 Philbank v. Lui She 21 SCRA 52
493 Vigilar v. Aquino January 18 2011
494 EPG Construction v. Vigilar 354 SCRA 566
495 Go Chan v. Young 354 SCRA 2076
496 Francisco v. Herrera 392 SCRA 317
497 Mendezona v. Ozamiz 376 SCRA 482
498 Manzanilla v. Court of Appeals March 15 1990
499 Rural Bank of Paranaque v. Remolado March 18 1985
500 Cojuangco v. Republic April 12 2011
501 Ringor v. Ringor 436 SCRA 484 (August 13 2004)
502 Salvador v. Court of Appeals 313 SCRA 369 (1995)
503 Huang v. Court of Appeals 236 SCRA 420
504 Vda. De Esconde v. Court of Appeals 253 SCRA 66
505 Tala Realty v. Banco Filipino 392 SCRA 506
506 Medina v. Court of Appeals 196 PHIL 205 (1981)
507 Filipinas Port v. Go March 16 2007
508 Mendizabel v. Apao February 20 2006
509 Vda. De Alberto v. Go July 21 2005
510 Heirs of Yap v. Court of Appeals 371 PHIL 523 (1999)
511 Heirs of Kionisala v. Heirs of Dacut 378 SCRA 206
512 Ramos v. Ramos 61 SCRA 284
513 Intestate Estate of Ty v. Court of Appeals 356 SCRA 661
514 Vda. De Reterto v. Barz 372 SCRA 712
515 Chia Long Tan v. Cour of Appeals 228 SCRA 75
516 O’laco v. Co Cho Chit 220 SCRA 656

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6 million of the P100 million to the Lingkod Tarlac Foundation. Hence. Failure to pay the indebtedness would give rise to a collection suit. petitioner. the agreement stipulates under the Conditions for Release of Funds that the Province of Tarlac shall release in lump sum the appropriate funds for the approved projects covered by individual loan documents upon signing of the respective loan agreement. The loan was made pursuant to a Memorandum of Agreement (MOA) entered into by the Province of Tarlac. HELD: The MOA shows that LTFI is allowed to borrow funds directly from the Provincial Government to fund Lingkod Tarlac Foundation projects provided the projects are livelihood projects under the Rural Industrialization Can Happen Program. represented by petitioner Ocampo. The Sandiganbayan convicted the petitioner of the crime of malversation of public funds. People of the Philippines. the Department of Budget and Management (DBM) released National Aid for Local Government Units (NALGU) funds in the total amount of P100 million to the Province of Tarlac. (LTFI) for the implementation of various livelihood projects. neglected to set up safeguards for the proper handling of the NALGU funds in the hands of LTFI which resulted in the disappearance of P1. credits and other property rights of the province. Inc. and LTFI.R Nos. monies. The P56. petitioner Ocampo.739 and P58. Tarlac Province was chosen as one of the four provinces that would serve as a test case on decentralization of local government administration. 1953 of the Civil Code provides that a person who receives a loan of money or any other fungible thing acquires the ownership thereof. 156547-51 February 4. 2008 Mariano Un Ocampo III. as governor of Tarlac. provincial governor of Tarlac loaned out P56. According to the Sandiganbayan. represented by petitioner Flores. vs. respondent. Aquino. Art. Petitioner Ocampo. on August 8. 203(t) of the Local Government Code obligated provincial governors to adopt measures to safeguard all the lands.6 million released to LTFI was utilized became the subject matter of 25 criminal cases.000 of the said funds. 1988. Sec. FACTS: During the incumbency of President Corazon C. For this purpose. G. petitioner Ocampo correctly argued that the NALGU funds shed their public character when they were lent to LTFI as it acquired ownership of the funds with an obligation to repay the Province of Tarlac the amount borrowed. buildings. The relationship between the Province of Tarlac and the LTFI is that of a creditor and debtor. However. Page 16 of 845 . the petitioner contended that the loan was private in character since it was a loan contracted with the Taralc Foundation. ISSUE: Whether the amount loaned out was private in nature. records.132. and is bound to pay to the creditor an equal amount of the same kind and quality. However. Moreover.

Page 17 of 845 .

R. Ostrand be required to certify the records for review and that the order of attachment that had been issued should be revoked and discharged with cost. J. 1917 an action was instituted in the CFI of Manila by O’Brien to recover from Leung Ben the sum of P15. the defendant in that action filed his petition for writ of certiorari directed against O’Brien and the judges of CFI. 1918. banking and percentage games conducted during the two or three months prior to the institution of the suit. containing numerous provisions recognizing the right to recover money lost in gambling or in the playing of certain games. 1757 of the Philippine Commission. The obligation of the defendant to restore or refund the money which he won from the plaintiff at gaming therefore arises ex lege.00 alleged to have been lost by the plaintiff to the defendant in a series of gambling. 1918 Leung Ben. Page 18 of 845 . express or implied HELD: The duty of the defendant to refund the money which he won from the plaintiff at gaming is not an obligation from “contract. petitioner Leung Ben. G. R. the honorable James A. money lost at gaming and voluntarily paid by the loser to the winner cannot. under sections 424 and 412 (1) of the Code of Civil Procedure against the property of the defendant on the ground that the latter was about to depart from the Philippine Island with intent to defraud his creditors. in the absence of statute. But Act No. Harvey. recognized both in civil and common law. express or implied” rather it is a duty imposed by statute. James A.00 which had been deposited by the defendant with the International Banking Corporation. defendants. FACTS: On December 12. The defendant moved to quash the attachment. O'Brien. In his verified complaint the plaintiff asked for an attachment. L-13602 April 6. On January 8. No. ISSUE: Whether or not the statutory obligation to restore money won at gaming is an obligation from contract. The attachment was issued and acting on the authority thereof. dismissed said motion. The prayer is that. P. the court however. the sheriff attached the sum of P15. 000. Judges of First Instance of City of Manila. plaintiff. vs. 000. which defines and penalizes several forms of gambling. be recovered in a civil action. Upon general principles. Ostrand and Geo.

as the defendants. In answer. 1906. under any obligation by virtue of any legal provision. Thus. 1906. that their daughter-in-law died as a consequence of the said childbirth. Escaño. defendants-appellees. plaintiff Arturo Pelayo was called to the house of the defendants. The equitable value of the services rendered by the plaintiff was P500. in which service he was occupied until the following morning. ISSUE: Whether or not the parents-in-law are under any obligation to pay the fees claimed by the plaintiff HELD: The defendants were not. the plaintiff filed a complaint against the defendants and prayed that the judgment be rendered in his favor as against the defendants. nor in consequence of any contract entered into between them and the plaintiff from which such obligation might have arisen.. which the law has expressly established. and not against her parents-in-law. which the defendants refused to pay. When either of them by reason of illness should be in need of medical assistance. On November 23.R. L-4089 January 12. liable for all the expenses. plaintiff should direct his action against the husband of the patient. and that upon arrival he was requested by them to render medical assistance to their daughter-in-law who was about to give birth to a child. the other is under the unavoidable obligation to furnish the necessary services of a physician in order that the health may be restored. Marcelo Lauron and Juana Abella situated in San Nicolas. Therefore. et al. Page 19 of 845 . The rendering of medical assistance in case of illness is comprised among the mutual obligations to which spouses are bound by way of mutual support. to pay the fees claimed. Marcelo Lauron. between married couples. nor are they now. and had visited the patient several times. plaintiff-appellant. the plaintiff found it necessary to remove the fetus by means of an operation. G. the party bound to furnish such support is therefore. After consultation with the attending physician. It is therefore the husband of the patient who is bound to pay for the services of the plaintiff. FACTS: On or about October 13. for the sum of P500 and costs. or any of them. and on the day she gave birth she was in the house of the defendants and her stay there was accidental and due to fortuitous circumstances. No. The fact that it was not the husband who called the plaintiff and requested the medical assistance for his wife is no bar to his fulfillment of such obligation. The liability arises from the obligation. considered that the medical assistance was urgently needed. in view of the imminent danger to which the life of the patient was at that moment exposed. 1909 Arturo Pelayo. and when she was still alive she lived with her husband independently and in a separate house and without any relation whatsoever with them. vs. including the fees of the medical expert for his professional services. Dr.00. the defendants prayed that they be absolved from the complaint with costs against the plaintiff. the defendants denied all allegations and alleged as a special defense. together with any other relief that may be deemed proper.

told him to leave the party because he was not invited. shame and embarrassment. Roberto Reyes.k.a. Reyes lined-up at the buffet table but.R. Violeta Filart. they first had their picture taken with the celebrant after which Reyes sat with the party of Dr.” alleged that while he was having coffee at the lobby of Hotel Nikko. a Makati policeman approached and asked him to step out of the hotel. he was escorted out of the party by the policeman. in a loud voice and within the presence and hearing of the other guests who were making a queue at the buffet table. Like a common criminal. when the buffet dinner was ready. Mr. At the penthouse. to his great shock. Reyes then went up with the party of Dr. Amay Bisaya. After a couple of hours. Masakazu Tsuruoka. Filart but the latter. Filart carrying the basket of fruits which was the latter’s present for the celebrant. the request was meant to be heard by him only and there could have been no intention on her part to cause embarrassment to him. Reyes that she acted to the contrary does not inspire belief and Page 20 of 845 . Mr. Reyes alleged that Ruby Lim. Lim did not abuse her right to ask Mr. the Executive Secretary of Hotel Nikko. more popularly known by the screen name “Amay Bisaya. his friend of several years. In the absence of any proof of motive on the part of Ms. Reyes tried to explain that he was invited by Dr. petitioners. Afterwards. Lim having been in the hotel business for twenty years wherein being polite and discreet are virtues to be emulated. even if he is not negligent in doing so. Reyes asked for P1 million actual damages. The Supreme Court agreed with the lower court’s ruling that Ms. Claiming damages. ISSUE: Whether or not Hotel Nikko and Ruby Lim are jointly and severally liable with Dr. Reyes and expose him to ridicule and shame. respondent. Mr. Ms. He was spotted by Dr. the testimony of Mr. FACTS: Respondent herein Roberto Reyes. while he was still recovering from the traumatic experience. Considering the closeness of defendant Lim to plaintiff when the request for the latter to leave the party was made such that they nearly kissed each other. 000 attorney’s fees. Filart. No. P1 million moral and/or exemplary damages and P200. 2005 Nikko Hotel Manila Garden and Ruby Lim. G. it is highly unlikely that she would shout at him from a very close distance. he was stopped by Ruby Lim. who invited him to join her in a party at the hotel’s penthouse in celebration of the natal day of the hotel’s manager. Mr. vs. who was within hearing distance. Lim to humiliate Mr. Reyes to leave the party as she talked to him politely and discreetly. 154259 February 28. Filart for damages under Articles 19 and 21 of the Civil Code HELD: The doctrine of volenti non fit injuria (“to which a person assents is not esteemed in law as injury”) refers to self-inflicted injury or to the consent to injury which precludes the recovery of damages by one who has knowingly and voluntarily exposed himself to danger. a. completely ignored him thus adding to his shame and humiliation.

Lim. not having abused her right to ask Mr. Reyes to leave the party to which he was not invited. neither can her employer. Page 21 of 845 . Ms. Necessarily. there was no need for the police to take him out. Had respondent simply left the party as requested.is indeed incredible. be held liable as its liability springs from that of its employee. Hotel Nikko. cannot be made liable to pay for damages under Articles 19 and 21 of the Civil Code.

FACTS: From 13 to 20 February 1995. William Carpitanos and Lucia S. Hence. Dapitan City. respondents. Accordingly. Sherwin Carpitanos was part of the campaigning group. Mary’s Academy was only a remote cause of the accident. Between the remote cause and the injury. petitioner. James Daniel. whether caused by the negligence of the minor driver or mechanical detachment of the steering wheel guide of the jeep. but the detachment of the steering wheel guide of the jeep.R. James Daniel Ii. Respondents Daniel spouses and Villanueva admitted that the immediate cause of the accident was not the negligence of petitioner or the reckless driving of James Daniel II. Carpitanos. As a student of St. A facet of the enrollment campaign was the visitation of schools from where prospective enrollees were studying. Marys Academy. the latter drove the jeep in a reckless manner and as a result the jeep turned turtle. it is not the school. along with other high school students were riding in a Mitsubishi jeep owned by defendant Vivencio Villanueva on their way to Larayan Elementary School. and Vivencio Villanueva. Hence. Sr. 2002 St. but the registered owner of the vehicle who shall be held responsible for damages for the death of Sherwin Carpitanos. Sherwin. must be pinned on the minor’s parents primarily. vs. the respondents failed to show that the negligence of petitioner was the proximate cause of the death of the victim. with the overwhelming evidence presented by petitioner and the respondent Daniel spouses that the accident occurred because of the detachment of the steering wheel guide of the jeep. on the fateful day. G. Allegedly. St. The jeep was driven by James Daniel II then 15 years old and a student of the same school. Sherwin Carpitanos died as a result of the injuries he sustained from the accident.. 143363 February 6. No. there must be a finding that the act or omission considered as negligent was the proximate cause of the injury caused because the negligence must have a causal connection to the accident. In this case. Page 22 of 845 . liability for the accident. Mary’s Academy. ISSUE: Whether the petitioner is liable for damages for the death of Sherwin Carpitanos HELD: For petitioner to be liable. there intervened the negligence of the minor’s parents or the detachment of the steering wheel guide of the jeep. The negligence of petitioner St. Guada Daniel. Mary’s Academy of Dipolog City conducted an enrollment drive for the school year 1995-1996. Larayan.

It is also defined as the failure.. 2001.M. the next day. 2001. 2011 Spouses Luigi M. Respondents averred that it was the increase in number of the unexpected guests that led to the shortage claimed by the petitioners. Makati Shangri-La Hotel and Resort.and received an apologetic reply from Krister Svensson. Guanio and Anna Hernandez-Guanio. FACTS: For their wedding reception on July 28. Prior to the event. the latter applicable only to actions for quasi-delicts. and despite Alvarez’s promise that there would be no charge for the extension of the reception beyond 12:00 midnight. The parties eventually agreed on a final price ─ P1. They further claim that they brought wine and liquor in accordance with their open bar arrangement. vs. not in actions involving breach of contract. HELD: The Court finds that since petitioners’ complaint arose from a contract. also doing business under the name of Shangri-La Hotel Manila. certain items listed in the published menu were unavailable. to perform any promise which forms the whole or part of the contract. the doctrine of proximate cause finds no application to it. Guanio and Anna Hernandez-Guanio booked at the Shangri-la Hotel Makati. the latter holding that the proximate cause of petitioners’ injury was an unexpected increase in their guests. respondent’s representatives. spouses Luigi M. They nevertheless filed a complaint for breach of contract and damages before the RTC of Makati City. upon appeal. their guests complained of the delay in the service of the dinner. observed that petitioners were remiss in their obligation to inform respondent of the change in the expected number of guests. Catering Director Bea Marquez and Sales Manager Tessa Alvarez. The appellate court. petitioners. but these were not served to the guests who were forced to pay for their drinks. they were billed and paid P8. Inc. without legal excuse. Makati Shangri-La Hotel & Resort. the parties finalized and signed their contract. respondent.150 per person. Inc. 190601 February 7. On July 27. scheduled an initial and final food tasting. and even the trial court. Inc.000 per hour for the three-hour extension of the event up to 4:00 A. GR No. The RTC rendered a decision in favor of the plaintiffs and was reversed by the CA. Petitioners claim that during the reception. Petitioners thus sent a letter-complaint to the Makati Shangri-la Hotel and Resort. the hotel’s waiters were rude and unapologetic when confronted about the delay. The observation is reflected in the Page 23 of 845 . the hotel’s Executive Assistant Manager in charge of Food and Beverage. did not show up despite their assurance that they would. ISSUE: Whether or not the CA correctly held that the proximate cause of petitioners’ injury was an unexpected increase in their guests. Breach of contract is defined as the failure without legal reason to comply with the terms of a contract.

Page 24 of 845 .records of the case. Petitioners’ failure to discharge such obligation thus excused respondent from liability for “any damage or inconvenience” occasioned thereby.

G. they were overpaid and the overpayment would be deducted from their salaries starting February 2001. As a result.00 starting November 1. 2001. et al. The CBA should be followed thus. the wages of the 17 probationary employees were increased to P250. On January 19. the Regional Tripartite Wage and production Board raised daily minimum wage from P 223. ISSUE: Whether the alleged overpayment constitutes diminution of pay as alleged by the Union HELD: Yes. Conformably. TSPIC’s HRD notified the 24 employees who are private respondents. the senior employees who were first promoted as regular employees shall be entitled for the increase in their salaries and the same with lower rank workers. Thus. thus. petitioner. In January 2001. The Union on the other hand. TSPIC implemented the new wage rates as mandated by the CBA. TSPIC Employees Union (FFW).50 to P 250. on October 6. Page 25 of 845 . representing Maria Fe Flores. because it is considered that Collective Bargaining Agreement entered into by unions and their employers are binding upon the parties and be acted in strict compliance therewith. the nine employees who were senior to the 17 recently regularized employees received fewer wage. the CBA in this case is the law between the employers and their employees. 2000. However. 2000. that due to an error in the automated payroll system.00 and became regular employees therefore receiving another 10% increase in salary. FACTS: TSPI Corporation entered into a Collective Bargaining Agreement with the corporation Union for the increase of salary for the latter’s members for the year 2000 to 2002 starting from January 2000. the increased in salary was materialized on January 1. 2008 TSPIC Corporation. respondents. 2000. Therefore. vs. asserted that there was no error and the deduction of the alleged overpayment constituted diminution of pay. there was no overpayment when there was an increase of salary for the members of the union simultaneous with the increasing of minimum wage for workers in the National Capital Region..R No. 163419 February 13.

Gamurot And Elissa Baladad. Petitioner then filed as pauper litigant. G.00 as exemplary damages. 156109 November 18. Assisted and Represented by Armando Regino. respectively as teachers. those who refused to pay were denied the opportunity to take the final examinations. She prayed for P500. Exhaustion of administrative remedies is applicable when there is a competence on the part of the administrative bodies to act upon the matter complained of. Financially strapped and prohibited by her religion from attending dance parties and celebration. Each student was required to pay for two tickets at the price of P100. Regino was a first year computer science student of Pangasinan Colleges of Science and Technology (PCST). It ruled that Commission on Higher Education. The project was allegedly implemented by recompensing students who purchased tickets with additional points in their test scores. vs. P500. petitioner. Regino went to college mainly through the financial support of her relatives. has jurisdiction over the controversy. FACTS: Petitioner Khristine Rea M. Rachelle A.000. PCST held a fund raising campaign dubbed “The Rave Party and Dance Revolution” the proceeds which were to go to the construction of the school’s tennis and volleyball courts. The terms of the school-student contract are defined at the moment of its inception-upon enrolment of the student. 2004 Khristine Rea M. Regino. the teachers allegedly disallowed her from taking the tests. Pangasinan Colleges Of Science And Technology.000.000. a complaint for damages against PCST. On March 14 and 15. Court for reasons of law.00 as nominal. PCST imposed the assailed revenue-raising measure belatedly in the middle of the semester.000. 2002. not the court. Reared in a poor family. In February 2002. The Regional Trial Court dismissed the complaint for lack of merit. She enrolled Logic and Statistics subjects under Rachelle Gamurot and Elissa Baladad.00 as actual damages & cost of litigation and attorney’s fees. respondents.R. Regino refused to pay tickets. No. P250. It exacted the dance party fee as a condition for students in taking the final Page 26 of 845 .00 as moral and at least P1. ISSUES: Whether or not there was a breach of contract and liability of tort HELD: The doctrine of exhaustion of administrative remedies is basic. comity and convenience should not entertain suits unless the available administrative remedies have first been resorted to and the proper authorities have been given the appropriate opportunity to act and correct their alleged errors. the scheduled dates of examinations in Logics and Statistics.00 each.000.

examinations and ultimately for recognition of their ability to finish a course. Page 27 of 845 . however. was not part of the school-student contract entered into at the start of the school year. The fee.

however. Substantially. FACTS: A stabbing incident on 30 August 1985 which caused the death of Carlitos Bautista while on the second-floor premises of the Philippine School of Business Administration (PSBA) prompted the parents of the deceased to file suit in the Regional Trial Court of Manila for damages against the said PSBA and its corporate officers. as jurisprudence on the subject is to the effect that academic institutions. When an academic institution accepts students for enrollment. as enunciated in Articles 2176 and 2180 of the Civil Code. the rules on quasi-delict do not apply. et al. Certainly. recklessness and lack of security precautions. On the other hand. 1992 Philippine School Of Business Administration. alleging that since they are presumably sued under Article 2180 of the Civil Code. 84698 February 4. the private respondents sought to adjudge them liable for the victim's untimely demise due to their alleged negligence. Page 28 of 845 . there is established a contract between them. the student covenants to abide by the school's academic requirements and observe its rules and regulations. resulting in bilateral obligations which both parties are bound to comply with. No. the school must ensure that adequate steps are taken to maintain peace and order within the campus premises and to prevent the breakdown thereof. Because the circumstances of the present case evince a contractual relation between the PSBA and Carlitos Bautista. It was established that his assailants were not members of the school's academic community but were elements from outside the school. denied their motion to dismiss.R. no student can absorb the intricacies of physics or higher mathematics or explore the realm of the arts and other sciences where there looms around the school premises a constant threat to life and limb. the school undertakes to provide the student with an education that would presumably suffice to equip him with the necessary tools and skills to pursue higher education or a profession. during and after the attack on the victim. means and methods before. Carlitos was enrolled in the third year commerce course at the PSBA. ISSUE: Whether or not the appellate court's failure to consider such material facts means the exculpation of the petitioners from liability HELD: It does not necessarily follow. Necessarily. such as the PSBA. For its part. petitioners. The respondent trial court. Said decision of the respondent appellate court was primarily anchored on the law of quasi-delicts. G. At the time of his death. Petitioners sought to have the suit dismissed. overruled petitioners’ contention and thru an order dated 8 December 1987. Court Of Appeals. the complaint states no cause of action against them. are beyond the ambit of the rule in the afore-stated article. respondents. vs. et al. Institutions of learning must also meet the implicit or "built-in" obligation of providing their students with an atmosphere that promotes or assists in attaining its primary undertaking of imparting knowledge..

unless the negligence occurs under the circumstances set out in Article 21 of the Civil Code. the same could give rise generally to a breach of contractual obligation only. the negligence of the school would not be relevant absent a contract. a contractual relation is a condition sine qua non to the school's liability. as yet. there is. Page 29 of 845 . Even if there be a finding of negligence. In other words. no finding that the contract between the school and Bautista had been breached thru the former's negligence in providing proper security measures. In fact. supra. The negligence of the school cannot exist independently of the contract. However. that negligence becomes material only because of the contractual relation between PSBA and Bautista. Using the test of Cangco.

good customs. The Deed of Sale executed between Ayala and the buyers contained Special Conditions of Sale and Deed Restrictions. Ayala released title to the lot. Rosa-Diana submitted to the building official of Makati another set of building plans which were substantially different from those that it earlier submitted to Ayala for approval. executed an undertaking promising to abide by said Special Condition of Sale executed between Ayala and the original vendees. In the alternative. Ayala sold the lot to Manuel Sy married to Vilma Po and Sy Ka Kieng married to Rosa Chan. FACTS: Petitioner Ayala Corporation was the registered owner of a parcel of land located in Alfaro Street. together with the building plans for a condominium project. During the construction of Rosa-Diana’s condominium project. Salcedo Village. HELD: Contractual obligations between parties have the force of law between them and absent any allegation that the same are contrary to law.R. vs. thus. The Land Registration Authority reversed the ruling of the Register of Deeds. public order or public Page 30 of 845 . known as the Peak. Ayala filed an action with the RTC of Makati for specific performance with application for a writ of preliminary injunction seeking to compel the latter to comply with the contractual obligations under the Deed of Restriction annotated on the title as well as with the building plans it submitted to the latter. The decision of the LRA. was reversed by the CA. with Ayala’s approval. petitioner. Upon the submission of the undertaking. however. On April 20. The lower court denied Ayala’s prayer for injunctive relief. 1976. Rosa-Diana Realty And Development Corporation. 134284 December 1. 233435 of the Register of Deeds of Rizal. G. Rosa-Diana. Notwithstanding the violation. thereby enabling Rosa-Diana to register the Deed of Sale on its favor and obtain certificate of Title in its name. use or possession of the property. 2000 Ayala Corporation. ISSUE: Whether or not respondent Rosa-Diana has the obligation to enforce the Deed of Restrictions contained in the contract it entered with Ayala. Thereafter. Manuel Sy and Sy Ka Kieng were able to sell the lot to respondent Rosa-Diana Realty and Development Corp. Ayala tried to cause the annotation a notice of lis pendens on Rosa-Diana’s title but the Register of Deed of Makati refused registration on the ground that the case pending before the trial court being an action for specific performance and or rescission is an action in personam which does not involve the title. Ayala prayed for rescission of the sale of the subject lot to Rosa-Diana Realty. Manuel Sy and Sy Ka Kieng failed to construct the building in violation of the Special Conditions of Sale. respondent. As a consideration for Ayala to release the certificate of title of the subject property. enabling Rosa-Diana to complete the construction of the building. Makati City with an area of 840 square meters more or less and covered by TCT no. No. morals.

That Rosa- Diana had acted in bad faith is manifested by the fact that it submitted two sets of building plans. Hence. Ayala had the prerogative to initiate an action against violators of the deed restrictions. Page 31 of 845 . and the other. one which was in conformity with the deed restrictions submitted to Ayala and MACEA. Article 1159 of the new Civil Code provides “obligations arising from contracts have the force of law between the contracting parties and should be complied with in good faith. they must be complied with in good faith. Moreover. respondent Rosa-Diana has the obligation to enforce the Deed of Restrictions contained in the contract it entered with Ayala.policy. which exceeded the height requirement in the deed restrictions to the Makati building official for the purpose of procuring a building permit from the latter. It bears emphasis that as complainant. Hence. the violation of the deed restrictions committed by respondent can hardly be denominated as a minor violation.

so private respondent filed an action with the court a quo.71. La Huerta. considering. alternatively.68 or 21% interest on the balance of down payment for the period from 31 March to 30 June 1981 and of P390. Judging from what the court below have said.37 representing interest paid by petitioner corporation to the Philippine Savings Bank in updating the bank loan for the period from 1 February to 31 March 1981.25 on 31 December 1981. and the balance of P11. 209. On even date 31 March 1981. ISSUE: Whether or not the contracts to sell were validly rescinded or cancelled by Petitioner Corporation HELD: The contracts to sell were validly rescinded by Petitioner Corporation. the Court has intimated that the relationship between parties in any contract must always be characterized and punctuated by good faith and fair dealing.000. 729. petitioners did fall well behind that standard. (its new corporate name Multinational Realty Development Corporation) and Mariano Z. 112182 December 12.875. respondents. private respondent demanded the refund of its various payment to petitioner amounting to P2. Page 32 of 845 . petitioners.00 on March 31. 1981. petitioner Bricktown Development Corporation executed two contracts to sell in favor of petitioner Tierra Corp. 497. However. P2. 367. to be made payable in cash.00 was stipulated to be paid by private respondent in such amount and maturity dates. P4. private respondent should not be allowed to totally free itself from its own breach. Petitioner Corporation sent notice of cancellation of contract to private respondent on account of the latter’s continued failure to pay the installment due 30 June 1981 and interest on the unpaid balance of the stipulated initial payment. the parties executed a supplemental agreement providing that private respondent would additionally pay to petitioner the amount of P55. P3. The total price of P21. 1994 Bricktown Development Corp. 445. In fine. nevertheless. for indeed. while the petitioner corporation still acted within its legal right to declare the contracts to sell rescinded or cancelled. Indeed. 906. 500. the peculiar circumstances found to be extant by the trial court would be unconscionable to likewise sanction the forfeiture by petitioner corporation of payments made to it by private respondent. Parañaque. G. as follows. petitioner did not heed the demand. vs.639. The Court does not find it equitable to adjudge any interest payment by petitioners on the amount to be thus refunded computed from judicial demand.00 to be paid by means of an assumption by private respondent of petitioner’s corporation’s mortgage liability to the Philippine Saving Bank or. covering a total of 96 residential lots situated at the Multinational Village Subdivision. No.200. On 26 September 1983. 965.75 on 30 June 1981. Metro Manila. FACTS: On 31 March 1981. 364. Veralde.000. On 12 October 1981. Amor Tierra Development Corporation and the Hon. Court Of Appeals.R.

Nor may they be retained by it as purported loan payments. Indeed. there is no such stipulation or arrangement between them. Locsin resigned effective February 25. a total of P112. and offer to purchase his service vehicle. In addition to a compensation and benefit package.00 had been deducted from his monthly salary and applied as part of the employee’s share in the car plan. Subsequently. Mekeni’s offer was contained in an Offer Sheet which was presented to petitioner.00. commissions. petitioner made an offer to purchase his service vehicle by paying the outstanding balance thereon.R. as it would have this Court believe. respondent offered petitioner the position of Regional Sales Manager to oversee Mekeni’s National Capital Region Supermarket/Food Service and South Luzon operations. Petitioner paid for his 50% share through salary deductions of P5. 2013 Antonio Locsin II.380. which used to be the service vehicle of petitioner’s immediate supervisor. The parties negotiated. it may not be said that the car plan arrangement between the parties was a benefit that the petitioner enjoyed. under which one-half of the cost of the vehicle is to be paid by the company and the other half to be deducted from petitioner’s salary. Petitioner made personal and written follow-ups regarding his unpaid salaries.000. No.00 if he opts to purchase the same.500. for this reason. By then. Mekeni replied that the company car plan benefit applied only to employees who have been with the company for five years. then all the deductions from his salary going to the cost of the vehicle will be treated as rentals for his use thereof while working with Mekeni. Mekeni offered petitioner a car plan. 2006. Mekeni Food Corporation. v. and shall not be refunded. respondent. ISSUE: Whether or not the car plan privilege is part of the compensation package offered to petitioner at the inception of his employment HELD: There is no evidence to suggest that if petitioner failed to completely cover one-half of the cost of the vehicle. FACTS: In February 2004. Secondly. In his resignation letter.000. G. To be able to effectively cover his appointed sales territory. Mekeni furnished petitioner with a used Honda Civic car valued at P280. Indeed. the Court cannot allow that payments made on the car plan should be forfeited by Mekeni and treated simply as rentals for petitioner’s use of the company service vehicle. it was an absolute necessity in Mekeni’s business operations. 192105 December 09. the balance that petitioner should pay on his service vehicle stood at P116. 2006. on the contrary. benefits.00 each month. but could not agree on the terms of the proposed purchase. In the first place. petitioner would have been unable to rapidly cover the vast sales Page 33 of 845 . petitioner. which benefited it to the fullest extent: without the service vehicle. Petitioner thus returned the vehicle to Mekeni on May 2. there is precisely no stipulation to such effect in their agreement.

Free and complete disposal is given to the petitioner only after the vehicle’s cost is covered or paid in full. the vehicle remains at the beck and call of Mekeni. Any benefit or privilege enjoyed by petitioner from using the service vehicle was merely incidental and insignificant. and sales or marketing of Mekeni’s products could not have been booked or made fast enough to move Mekeni’s inventory. because for the most part the vehicle was under Mekeni’s control and supervision. Page 34 of 845 . Until then.territory assigned to him.

Lindo. both provisions also state that “the transaction shall be construed as a continuing offer on the part of the consenting spouse and the third person. 183984 April 13. it is void pursuant to Article 96 of the Family Code. and may be perfected as a binding contract upon the acceptance by the other spouse before the offer is withdrawn by either or both offerors. Spouses Enrico L. Edna issued three checks as partial payments which were dishonored later for insufficiency of funds. respondents. it is true that the mortgage-creditor has the option of either filing a personal action for collection of sum of money or instituting a real action to foreclose on the mortgage security. FACTS: Edna Lindo obtained a loan from Arturo Flores amounting to P 400. Page 35 of 845 . and Edna C.00 and prayed for dismissal on the grounds of improper venue. vs. Any disposition or encumbrance without the written consent shall be void. Special Power of Attorney by Enrico was only constituted days after the Deed. Petitioner then filed a complaint for Sum of Money with damages against respondents.000 with monthly interest and surcharge in case of late payment. The CA ruled in general that the creditor may institute two alternative remedies: either a personal action for the collection of debt or a real action to foreclose the mortgage. This prompted petitioner to file a complaint for the foreclosure of mortgage with damages against the respondents. res judicata. it further ruled that petitioner Flores was not precluded from recovering the loan from Edna as he could file a personal action against her. In this case. Accordingly since the Deed was executed by respondent Edna without the consent and authority of her husband. However. Lindo. ISSUE: Whether or not petitioner can no longer file complaint for collection of sum of money on the ground of multiplicity of suits HELD: The Court ruled that generally. petitioner.” The execution of the SPA is the acceptance by the other spouse that perfected the continuing offer as a binding contract between the parties. 2011 Arturo Sarte Flores. The RTC denied the motion to dismiss. However. and forum shopping. Jr. there are circumstances that the Court takes into consideration. otherwise there would be multiplicity of suits in which the debtor would be tossed from one venue to another depending on the location of the mortgaged properties and the residence of the parties. Respondents admitted their loan but in the tune of Php340. No.R. making the Deed of Real Estate Mortgage a valid contract. RTC branch 33 held that Flores was not entitled to judicial foreclosure of the mortgage because it found out that the Deed was executed by Edna without her husband‘s consent. Edna executed a deed of real mortgage and promissory note to secure the said loan. however. G. An election of the first bars recourse to the second.000. but not both.

However. an engineering consultancy firm. In its September 7.88.000). (ITI). 2008 Titan-Ikeda Construction & Development Corporation. the respondent entered into a contract of sale of the tower in favor of the petitioner in a manner called full-swapping. ISSUE: Whether or not the CA erred in giving weight to ITI's report because the project evaluation was commissioned only by respondent.000. On June 30. 1995 report. they were no longer required to fully perform their respective obligations. 1994. They agreed to extinguish the supplemental agreement as evidenced by the October 12. 1994 deed of absolute sale.416. However. FACTS: The respondent Primetown Property Corporation entered into contract with the petitioner Titan-Ikeda Construction Corporation for the structural works of a 32-storey prime tower. Page 36 of 845 . the owner/developer.416. by executing the June 30. was deemed to have paid P112. Because respondent ignored petitioner's demand. had only accomplished 31.000. at that point. 158768 February 12. 1996. the parties entered into a second contract.00 for the tower’s architectural design and structure.88) in favor of petitioner pursuant to the full-swapping payment provision of the supplemental agreement. respondent. to evaluate the progress of the project. vs.716. Petitioner was relieved of its obligation to complete the project while respondent was freed of its obligation to pay the entire contract price. respondent again awarded to the petitioner the amount of P 130. Inc. On November 22.89% of the project (or was 11 months and six days behind schedule). respondent..000. in disregard of industry practice HELD: The parties first entered into a contract for a piece of work when they executed the supplemental agreement. Inc.R No. Primetown Property Group. ITI informed respondent that petitioner. petitioner. 1996. 1995 letter-agreement which was duly acknowledged by their respective representatives. Thereafter. in 1994. petitioner. because petitioner applied part of what it received to respondents outstanding liabilities. in consideration of a price certain (P130. on December 9. Because the parties agreed to extinguish the supplemental agreement. respondent engaged the services of Integratech. petitioner demanded from respondent the delivery of MPT's management certificate and the keys to the condominium units and the payment of its (respondent's) balance. In September 1995. The supplemental agreement was reciprocal in nature because the obligation of respondent to pay the entire contract price depended on the obligation of petitioner to complete the project (and vice versa). filed a complaint for specific performance in the Housing and Land Use Regulatory Board (HLURB).716. Petitioner as contractor bound itself to execute the project for respondent. G. it admitted overpayment. respondent executed a deed of sale (covering 114 condominium units and 20 parking slots of the MPT collectively valued by the parties at P112. After the construction of the tower. Nevertheless.

No. 724. vs. and even a settlement scheme proposed by PADCOM in September 1990. No application for membership is necessary.R. FACTS: Petitioner Padcom Condominium Corporation owns and manages the Padilla Office Condominium Building located at Emerald Avenue. respondent. Page 37 of 845 . HELD: As a lot owner. respondent Ortigas Center Association. It sought the collection of membership dues in the amount of P2. Inc. interests and penalty charges from April 1983 to June 1993. 961. If at all. Among the terms and conditions in the deed of sale was the requirement that the transferee and its successor-in-interest must become members of an association for realty owners and long-term lessees in the area later known as the Ortigas Center. 2002 Padcom Condominium Corporation. G. PADCOM voluntarily agreed to be bound by and respect the condition. PADCOM’s contention that the automatic membership clause is a violation of its freedom of association because it was never forced to join the association is likewise untenable. 146807 May 9. the Association filed a complaint for collection of sum of money before the trial court. Inc. was organized to advance the interests and promote the general welfare of the real estate owners and long-term lessees of lots in the Ortigas Center. The letters exchanged between the parties through the years showed repeated demands for payment. The corporate books showed that PADCOM owed the Association P639. PADCOM is a regular member of the Association. by Tierra Development Corporation (TDC) under a Deed of Sale dated 4 September 1974. Ortigas Center. ISSUE: Whether or not PADCOM is a member of the Ortigas Center Association. In 1982. acceptance by the Board of Directors is a ministerial function considering that PADCOM is deemed to be a regular member upon the acquisition of the lot pursuant to the automatic membership clause annotated in the Certificate of Title of the property and the Deed of Transfer. its predecessor-in-interest. This obligation was allegedly passed on to PADCOM when it bought the lot from TDC.. Inc. Pasig City. Ortigas Center Association. The land on which the building stands was originally acquired from the Ortigas & Company. and thus to join the Association.40 per month from PADCOM. Limited Partnership (OCLP).47. requests for extensions of payment. petitioner. including interests and penalties thereon. representing membership dues. In view of PADCOM's failure and refusal to pay its arrears in monthly dues. The Association averred that purchasers of lands within the Ortigas Center complex from OCLP are obligated under their contracts of sale to become members of the Association. Nobody forced it to buy the land when it bought the building with the annotation of the condition or lien on the Certificate of Title thereof and accepted the Deed.

voluntary and unilateral acts give rise to the juridical relation of quasi-contract to the end that no one shall be unjustly enriched or benefited at the expense of another”. Assuming in gratis argumenti that PADCOM is not a member of the Association. Having ruled that PADCOM is a member of the Association. it cannot evade payment without violating the equitable principles underlying quasi-contracts. it is obligated to pay its dues incidental thereto as mandated by Article 1159 of the Civil Code which states that “obligations arising from contracts have the force of law between the contracting parties and should be complied with in good faith”. Page 38 of 845 . Article 2142 of the Civil Code provides that “certain lawful.

the promised employment is non-existent. The Court of Appeals affirmed with modification that the amount of exemplary damages in favor of the victims to be reduced to P25. Instead of getting decent jobs. No. G.k.000 each. to pay each of the above victims P50. or other lascivious acts. ISSUE: Whether or not the award of damages was proper HELD: The Supreme Court modified the ruling of the Court of Appeals. plaintiff-appellee. To be trafficked as a prostitute without one‘s consent and to be sexually violated four to five times a day by different strangers is horrendous and atrocious. having convicted the accused therein of the crime of trafficking in persons. (2) Quasi-delicts causing physical injuries. abduction. abduction. The payment of P500.000.000 as moral damages and P100. and SENTENCES each of said accused to suffer the penalty of life imprisonment and to pay a fine of P1. it is worse. committed by a syndicate. There is no doubt that Lolita experienced Page 39 of 845 . NURFRASIR HASHIM y SARABAN a.000 to P100. or other lascivious acts. in flagrant violation of the above- mentioned law and causing damage and prejudice to said complainants. 9208 or the Anti-Trafficking in Persons Act. et al. vs.000 and from P50.000 as exemplary damages for the crime of Trafficking in Persons as a Prostitute finds basis in Article 2219 of the Civil Code. and to pay the costs.R. They promised employment abroad particularly in Brunei and Malaysia. rape. 8042 otherwise known as the ―Migrant Workers and Overseas Filipinos Act of 1995‖. In Lalli.000 as moral damages. 2219.000. they were forced to become sex workers to earn money and became prostitutes. 194255 June 13.. the Supreme Court increased the amount of moral and exemplary damages from P50. rape.a FRANZ/FRANS. It held that Congress passed R. victims found themselves in a situation that the law had sought to prevent. as principals by direct participation. FACTS: The accused were charged as having been engaged in the recruitment and deployment of workers without having previously obtained from the POEA a license or authority to do so. only a few days after. The criminal case of Trafficking in Persons as a Prostitute is an analogous case to the crimes of seduction. P300. Ironically. which states: Art. against BBB and AAA. Moral damages may be recovered in the following and analogous cases: (1) A criminal offense resulting in physical injuries. In fact.000 as exemplary damages. respectively. 2012 THE PEOPLE OF THE PHILIPPINES. accused. The lower court found the accused guilty of illegal recruitment defined under Section 6 and penalized under Section 7(b) of Republic Act No.A. (3) Seduction. Such law was approved on 26 May 2003. thus causing and prompting the persons of BBB and AAA to apply which employment however did not materialize because in truth and in fact.000 to P500.000 each.

Since the crime of Trafficking in Persons was aggravated. fright. Page 40 of 845 . and social humiliation when she was trafficked as a prostitute in Malaysia. wounded feelings. the award of exemplary damages is likewise justified. being committed by a syndicate. serious anxiety. moral shock. mental anguish.physical suffering. besmirched reputation.

ISSUE: Whether or not petitioner could still be held civilly liable notwithstanding his acquittal HELD: It is an established rule in criminal procedure that a judgment of acquittal shall state whether the evidence of the prosecution absolutely failed to prove the guilt of the accused or merely failed to prove his guilt beyond reasonable doubt. People Of The Philippines and Spouses Saapia B. Abellana extended a loan to private respondents spouses Diaga and Saapia Alonto. 6471 and 6472 located in Cebu City. or in 1987. respondent spouses filed a complaint charging petitioner with Estafa through Falsification of Public Document. And since the defective notarization does not ipso facto invalidate the Deed of Absolute Sale. we find that the acts allegedly committed by the petitioner did not cause any damage to spouses Alonto. FACTS: In 1985. 1999. petitioner. secured by a Deed of Real Estate Mortgage over Lot Nos. the transfer of said properties from spouses Alonto to petitioner remains valid. The CA held that petitioner who was charged with and arraigned for estafa through falsification of public document under Article 171(1) of the RPC could not be convicted of Falsification of Public Document by a Private Individual under Article 172(1) in relation to Article 171(2). it was notarized in Cebu City allegedly without the spouses Alonto appearing before the notary public. Page 41 of 845 . Even assuming that the spouses Alonto did not personally appear before the notary public for the notarization of the Deed of Absolute Sale. vs. it must be proven that the acts he committed had caused damage to the spouses. Based on the records of the case. The "extinction of the penal action does not carry with it the extinction of civil liability unless the extinction proceeds from a declaration in a final judgment that the fact from which the civil liability might arise did not exist. Such non-appearance is not sufficient to overcome the presumption of the truthfulness of the statements contained in the deed. The RTC found that petitioner did not intend to defraud the spouses Alonto and that petitioner can only be held guilty of Falsification of a Public Document by a private individual under Article 172(1)in relation to Article 171(2) of the Revised Penal Code and not Estafa through falsification of public document as charged in the Information. petitioner prepared a Deed of Absolute Sale conveying said lots to him.R." Hence. Subsequently. No. Alonto And Diaga Alonto. the same does not necessarily nullify or render void ab initio the parties' transaction. Abellana. On August 12. for petitioner to be civilly liable to spouses Alonto. The Deed of Absolute Sale was signed by spouses Alonto in Manila. petitioner Felixberto A. 174654 August 17. G. petitioner caused the transfer of the titles to his name and sold the lots to third persons. 2011 Felixberto A. respondents. However. Thereafter.

ISSUE: Whether or not the award of damages was properly made HELD: No. G.00 as civil indemnity (P75. Page 42 of 845 .R No.00 as moral damages (P50. appellee. The trial court found appellant guilty of the crime of four counts of qualified rape and was sentenced to suffer the penalty of death for each count of rape. However. The penalty imposed then should be reclusion perpetua.000 in the amount of P50. the award of civil indemnity is reduced to P200.000. 175833 January 29. The incident was repeated thrice by the appellant. because the Supreme Court declared that the crime committed was four count of simple rape only and not qualified rape because the special aggravating circumstances of minority and relationship must be alleged in the information but the prosecution failed to do so. 2008 People of the Philippines. The CA however modified the findings of the RTC declaring that appellant is guilty of four counts of simple rape and to suffer the penalty of reclusion perpetua. Edwin Malicsi. FACTS: The accused-appellant was accused for the crime of rape against his niece. Since it is not included. Moral damages are automatically granted to rape victim. vs. appellant.000. and P200.00 for each count).000.00 for each count).000. four counts of simple rape should be undertaken. to pay P300.000 for moral damages.000.00 for each count of simple rape is automatically granted. The appellant contended that he and the victim were sweethearts but the trial court did not give weight to that theory. The appellate court also correctly affirmed the award by the trial court of P200.

In determining the amount of lost income. the mother of the deceased Christian Bermudez the sums of: (a) P50. the court notes that the victim was 27 years old at the time of his death and his mother testified that as a driver of the Tamaraw FX taxi. he was earning P650. ISSUE: Whether or not the trial courts’ award for damages is proper. and (c) P3. The Court finds the amount of P50.R. et al. 137457 November 21. accused- appellants. pegged at P50.00 as death indemnity proper. The rule is that every pecuniary loss must be established by credible evidence before it may be awarded. 2001 People of the Philippines. The records are bereft of any receipt or voucher to justify the trial court’s award of burial and other expenses incurred in connection with the victim’s death. the victim’s heirs are likewise entitled to moral damages. plaintiff-appellee. In this case. G. HELD: The decision is partly correct. FACTS: This is an automatic review of a decision of the Regional Trial Court finding the accused Johnny Balalio y Deza and Jimmy Ponce y Tol guilty beyond reasonable doubt as principals by conspiracy for violation of RA 6539 (Anti. 307. (b) P200.00 by controlling case law.00 as burial and other expenses incurred in connection with the death of the victim must be deleted. No. and (2) the rate of the loss sustained by the heirs of the deceased. 000. 000. and sentenced them to suffer the penalty of death. Though not awarded by the trial court. However. 000.00 as compensatory damages for the death of Christian Bermudez. Credence can be given only to claims. 000. vs.199. Accused are likewise adjudged jointly and severally liable to pay Agripina Bermudez. Based on the foregoing computation. taking into consideration the pain and anguish of the victim’s family brought about by his death. 000. by receipts or other credible evidence. following prevailing jurisprudence. Page 43 of 845 .00 as burial and other expenses incurred in connection with the death of Christian. the following must be taken into account: (1) the number of years for which the victim would otherwise have lived. The award of civil indemnity may be granted without any need of proof other than the death of the victim. the award of P200.00 a day. Rosauro Sia y Dichoso. net earnings are computed at fifty percent of the gross earnings. and in line with controlling policy.Carnapping law) as amended. which are duly supported.60 (2/3 x [80-27] x 300 per day x 26 days (excluding Sundays) x 12 months) representing the loss of earning capacity of Christian Bermudez as taxi driver. the award of the trial court with regard to lost income is thus modified accordingly.. The second variable is computed by multiplying the life expectancy by the net earnings of the deceased meaning total earnings less expenses necessary in the creation of such earnings or income less living and other incidental expenses considering that there is no proof of living expenses of the deceased.

000.00 as moral damages.The court ordered the accused to pay the heirs of the victim Christian Bermudez the sum of P50. the sum of P50. Page 44 of 845 . The award of P200.00 as burial and other expenses is deleted for lack of substantial proof.000 as civil indemnity.867. 000. and the sum of P2.20 representing lost earnings. 996. 000.

Thereafter. When Dagson came back. Oliver Alimani came to Ganongans aid when the latter yelled that he was hit. When they arrived.40 as actual damages P50. he was with Oliver Alimani. No. told them to stop.80 as actual damages for expenses incurred for hospitalization.00 in accordance with existing jurisprudence. which were duly proven and covered by receipts Expenses relating to the 9th day. After two hours they went down Honeymoon road towards Rimando road to get a taxi for Litorco. and P50. Vicente Ganongan Jr. Thereat. accused-appellant.00 as civil indemnity. When Ganongan turned around to run. the same is reduced to P50. vs. Carlos Doctolero Sr. ISSUE: Whether or not the trial court’s award of damages is proper HELD: The Supreme Court modified the award for damages by the trial court. It reduced the award to P112. and to pay the costs. 000. funeral expenses. Carlos Doctolero. 000. Prosecution evidence showed that on November 20. 40th day and 1st year anniversaries cannot be considered in the award of actual damages as these were incurred after a considerable lapse of time from the burial of the victim. Daoadaoan shoved Doctoleros’ hand and retreated. Daodaoan. 2001 People of the Philippines. 131866 August 20. Ganongan and the others agreed to drink gin in Sangatan Store. FACTS: This is an appeal of the accused from the decision of the Regional Trial Court of Baguio City finding him guilty beyond reasonable doubt of the crime of murder and ordering him to indemnify the heirs of the victim the sum of P50. Dagson who was walking about 5 to 7 meters ahead with Litorco rushed to the boarding house and sought help.00 as indemnity for his death. Doctolero stepped back and fired twice at Daodaoan but missed. Tabanganay and Jeffrey Alimani. 000.40 representing funeral expenses. Sr. Oliver Alimani approached Garcia who in turn pointed his gun at Oliver and identified himself as barangay kagawad. all indemnifications being without subsidiary imprisonment in case of insolvency. Hearing the commotion. 000. G. Carlos Garcia. Arman Alimani and Dexter Daggay. With respect to the award of moral damages. with three companions. they saw Garcia pointing a gun at the group of Ganongan. vigil and burial as a result of his death.. plaintiff-appellee. Doctolero fired at him. At this time. Page 45 of 845 . 1996.00 as moral damages plus costs. which is about 20 meters from the boarding house. hitting him twice.R. and P300. was standing at the edge of Honeymoon road. He then put his arm over Daodaoan’s shoulder.00 as moral damages for the pain and mental anguish suffered by the heirs by reason of his death. pointing a gun at them. Based on the above modifications the court ordered the accused to pay the heirs of the victim P112. they hailed a taxi and rushed Ganongan to Saint Louis University Hospital where he expired. the sum of P227. 808. 000. doctor’s fees. 413. and Roderick Litorco went to their friend’s boarding house on Honeymoon Road. 413. As the latter four neared the Garcia store along Honeymoon road. Baguio City.

425.00 damages. Pangasinan finding the accused guilty beyond reasonable doubt of the crime of Aggravated Rape with Homicide sentencing the accused to suffer the penalty of death. and ordering him to indemnify the heirs of the victim.00 as actual damages. 425. 138403 August 22. as shown by the multiple burns and contusions on her body.R. ISSUE: Whether or not the trial court’s award for damages is proper HELD: The Supreme Court modified the trial court’s award for damages. physical and psychological sufferings are too obvious to still require their recital at the trial. 000. with marks of bruises. Page 46 of 845 . the Court ordered the accused to pay the heirs of the victim P100.000. Lagarto. moral damages may be awarded to the heirs of the victim without need for pleading or proof of its basis for their mental. 00. Rebelyns lifeless. moral damages in the amount of P50. 000.00 as actual damages. naked body was found floating at the Colobong creek in San Manuel. Pangasinan. Based on the above modifications.00 for exemplary damages plus P6. 000 must be awarded. and P6. This is an automatic review of a decision of the Regional Trial Court of Urdaneta City.00 as civil indemnity. defendant- appellant. a cold-blooded ravager. The trial court awarded only 75. Based on prevailing jurisprudence.00 as civil indemnity. but current jurisprudence has fixed at P100. the court held that attendant circumstances may be considered to determine civil liability. in view of the evident cruelty inflicted upon the victim. 1998. P50. Thus. the court granted the award of exemplary damages in the amount of P25.00 the civil indemnity in cases of rape with homicide. 2001 People of the Philippines. Hence. preyed on ten-year old Rebelyn Garcia.00 as moral damages. plaintiff-appellee. Rolly Abulencia y Coyos. the sum of P75. Rolly Abulencia y Coyos. 000. In the early morning of the following day. In People v. and another sum of P20.00. 000. 000.00 as exemplary damages. No. which is fully justified and properly commensurate with the seriousness of the special complex crime. The trial court did not award moral damages to the victim’s family. P25. G. 000. FACTS: On August 4. burns and injuries manifesting that she was defiled and later drowned to death. vs.

That being so.” the trial court stated that the plaintiffs had already elected to treat the accident as a “crime” by reserving in the criminal case the right to file a separate civil action. and. Plaintiff- appellants filed in the said criminal case “A Reservation to File Separate Civil Action. G. No. the injured party or his heirs has a right to choose between an action to enforce civil liability arising from crime under Article 100 of the Revised Penal Code and an action for quasi-delict under Article 2176-2194 of the Civil Code. FACTS: A cargo truck driven by Domingo Pontino and owned by Cordova Ng Sun Kwan bumped a jeep on which Rogelio. HELD: According to the Supreme Court. Judge A. Melencio-Herrera. In the case at bar. the trial court decided to order the dismissal of the complaint against defendant Cordova Ng Sun Kwan and to suspend the hearing of the case against Domingo Pontino until after the criminal case for Homicide Through Reckless Imprudence is finally terminated. If the party chooses the latter. a criminal case for Homicide through Reckless Imprudence was filed against Domingo Pontino by the Manila City Fiscal’s Office. The fact that appellants reserved their right in the criminal case to file an independent civil action did not preclude them from choosing to file a civil action for quasi- delict.R. he may hold the employer solidarily liable for the negligent act of his employee. 1988 Reynaldo Bermudez. From said order. subject to the employer’s defense of exercise of the diligence of a good father of the family. As a result. a six-year old son of plaintiff-appellants. vs. Finding that the plaintiffs instituted the action “on the assumption that defendant Pontino’s negligence in the accident constituted a quasi-delict.. L-32055 February 26. the plaintiff-appellants filed a civil case for damages with the Court of First Instance of Manila.” Subsequently. plaintiffs filed the present appeal. Adonita Yabut Bermudez petitioners-appellants. Page 47 of 845 . was riding. Domingo Pontino Y Tacorda and Cordova Ng Sun Kwan. Sr. Hon. respondents-appellees. ISSUE: Whether or not the plaintiff-appellants had already elected to treat the accident as a crime by reserving in the criminal case the right to file a separate civil action. The boy sustained injuries which caused his death. in case of negligence. the action filed by appellant was an action for damages based on quasi-delict.

no right to file a separate civil action was filed by the Batangas City Electric Light System. vs. an Assistant City Fiscal of Batangas filed an information against Opulencia for violation of Ordinance No. he did not deny having appropriated electric power. in his capacity as Presiding Judge of the Court of First Instance of Batangas. 1987 People of the Philippines. Consequently. However. equipped with a search warrant. Second Branch. Fourteen (14) days later. As regards the civil aspect of the case. and Manuel Opulencia. Batangas City. the accused filed a motion to dismiss the information upon the grounds that the crime there charged had already prescribed.R. While the accused pleaded not guilty before the City Court of Batangas City. G. 1975. the case was likewise dismissed on the ground of the constitutional right against double jeopardy. respondents. there is no evidence in the record as to the amount or value of the electric power appropriated by the accused. These electric devices were designed purposely to lower or decrease the readings of electric consumption in the electric meter of the said electric and cold storage ice plant. The Honorable Benjamin Relova. members of the Batangas City Police together with personnel of the Batangas Electric Light System. However. 1 Series of 1974. FACTS: On February 1. The police discovered that electric wiring devices and contraptions had been installed without the necessary authority from the city government. No. ISSUE: Whether or not the extinction of criminal liability whether by prescription or by the bar of double jeopardy carries with it the extinction of civil liability based on the offense charged. However. Page 48 of 845 . HELD: In the present case. the Acting City Fiscal of Batangas filed before the Court of First Instance of Batangas another Information against Opulencia this time for theft of electric power under Article 308 in relation to Article 309 of the Revised Penal Code. Accordingly. subsequently. L-45129 March 6. the civil action which has not been waived impliedly or expressly should be remanded to the Court of First Instance of Batangas City for reception of evidence on the amount or value of the electric power appropriated and converted by Manuel Opulencio and rendition of judgment conformably with such evidence. accused Opulencia freely admitted during the police investigation having stolen electric current through the installation and use of unauthorized electric connections or devices. petitioner. searched the premises of the Opulencia Carpena Ice Plant and Cold Storage owned and operated by private respondent Manuel Opulencia.

there was no second jeopardy to speak of. The Court of Appeals. temperate or exemplary damages are alleged in the complaint or information.00 for the death of Ruben Nicolas ISSUES: Whether or not petitioner’s acquittal did extinguished his civil liability HELD: The court of appeals in determining whether Article 29 of the Civil Code applied was not precluded by the petitioners’ acquittal. or if they are not so alleged. What was elevated to the Court of Appeals by private respondents was the civil aspect of Criminal Case No. The decision in Criminal Case No 066 supports the conclusions of the appellate court that the acquittal was based on reasonable doubt. FACTS: After going from one place to another and consuming large amounts of beer. At such speed. 066. the civil liability was not extinguished by his discharge. 2001 George Manantan. the deceased. At the time of the filing of the information in 1983. from looking into the question of petitioners’ negligence or reckless imprudence. the accused. The filing fees are deemed paid from the filing of the criminal complaint or information. the accused was not able to avoid the passenger jeepney and thus collided with it. shall constitute a first lien on the judgment. the implied institution of civil actions with criminal actions was governed by Rule III. are not included in the computation of the filing fees. Where the civil action is impliedly instituted together with the criminal action. nominal.R. Petitioner was not charged anew with a second criminal offense identical to the first offense. G. the actual damages claimed by the offended parties. respondents. in that defendant-appellee is held civilly liable for his negligent and reckless act of driving his car which was the proximate cause of the vehicular accident and sentenced to indemnify plaintiff-appellants in the amount of P174. petitioner. 400. No. It clearly shows that petitioner’s acquittal was predicated on the conclusion that his guilt had not been established with moral centainty. Spouses Marcelino Nicolas and Maria Nicolas. Therefore. However. as in this case. 107125 January 29. The accused immediately tried to swerve the car to the right and move his body away from the steering wheel but he was not able to avoid the oncoming vehicle and the two vehicles collided with each other at the center of the road. and two others boarded on the car of the accused where he was the driver. the Court of Appeals modified the decision of the lower court. hence. The trial court decided in favor of the accused. Page 49 of 845 . Section 1 of the 1964 Rules of Court. Driving at a high speed at the middle portion of the highway and trying to overtake tricycle. vs. Filing fees are to be paid only if other items of damages such as moral.

said counsel invoked the ruling of the Court of Appeals in People v. In his comment. liability therefore is extinguished only when the death of the offender occurs before final judgment. and therefore. The Solicitor General insists that the appeal should still be resolved for the purpose of reviewing his conviction by the lower court on which the civil liability is based. ISSUE: Whether or not the death of the accused pending appeal of his conviction extinguishes his civil liability. Rule 116 of the Rules of Court which states that the judgment in a criminal case becomes final after the lapse of the period for perfecting an appeal or when the sentence has been partially or totally satisfied or served. Castillo and Ocfemia which held that the criminal liability in a criminal case takes root in the criminal liability. No. if the civil obligation arises from other sources of obligation other than the crime complained of. on the other hand. it required the Solicitor General to file its comment with regard to Bayotas civil liability arising from his commission of the offense charged. This also brings to mind Section 7. In support of his position. civil liability is extinguished if accused should die before final judgment is rendered. Since the death of the accused occurred while his appeal is pending. dismissed the criminal aspect of the appeal. Bayotas died on February 4. The Court resolved this issue stating Article 89 of the Revised Penal Code which states that criminal liability is totally extinguished by the death of the convict. 1992 at the National Bilibid Hospital due to cardio respiratory arrest. Rogelio Bayotas y Cordova. opposed the view of the Solicitor General arguing that the death of the accused while pending appeal extinguishes both his criminal and civil penalties. the civil liability of the accused survived in spite of his death pending his appeal. 1994 People of the Philippines. Pending appeal of his conviction. his civil liability together with his criminal liability is extinguished. HELD: In People v. thus. or the defendant has expressly waived in writing his right to appeal. G. FACTS: Rogelio Bayotas was charged with rape and eventually convicted thereof on June 19. 1992. However. A preponderance of evidence is sufficient to prove his civil liability. the Solicitor General expressed his view that the death of the accused did not extinguish his civil liability as a result of his commission of the offense charged.R. Castillo. Consequently. 102007 September 2. 1991 in a decision penned by Judge Manuel Autajay. accused- appellant. plaintiff-appellee. the Supreme Court in its resolution of May 20. Page 50 of 845 . vs. Counsel of the accused. the decision has not yet become final and executory. However. As to the personal penalties and as to the pecuniary penalties.

It is the masters or employers who principally reap the profits resulting from the services of their servants. The Court of Appeals affirmed the sentence of the lower court in the criminal case. but there is also an expeditious way. 1942 Fausto Barredo. At this juncture. and individuality that is entirely apart and independent from a delict or crime. True. To hold that there is only one way to make the employer’s liability effective. vs. L-48006 July 8. ISSUE: Whether or not the plaintiffs may file a separate civil action against Fausto Barredo. FACTS: At about half past one in the morning of May 3. Workmen and employees should be carefully chosen and supervised in order to avoid injury to the public. 1939. suffered injuries from which he died two days later. thus making him primary and directly responsible under Article 1903 of the Civil Code as the employer of Pedro Fontanilla. G. A criminal action was filed against Fontanilla in the Court of First Instance of Rizal and he was convicted and sentenced to an indeterminate sentence of one year and one day to two years of prision correctional. The court in the criminal case granted the petition that the right to bring a separate civil action be reserved. and that is. Upon this principle. No. the Court of First Instance of Manila awarded damages in favor of the plaintiffs for P2. The carretela was overturned. Page 51 of 845 . Province of Rizal. there is such a remedy under our laws. Severino Garcia and Timotea Almario. which is based on the primary and direct responsibility of the employer under Article 1903 of the Civil Code. On July 8.R. It is but right that they should guarantee the latter’s careful conduct for the personnel and patrimonial safety of the others. to sue the driver and exhaust his properties is tantamount to compelling the plaintiff to follow a devious and cumbersome method of obtaining relief. HELD: A quasi-delict or culpa aquiliana is a separate and distinct legal institution under the Civil Code with substantivity of it own. respondents. parents of the deceased. and one of its passengers. petitioner. 1936. Severino Garcia and Timotea Almario.00 plus legal interest from the time the action was instituted. on the road between Malabon and Navotas. the primary and direct responsibility of employers may be safely anchored. it should be said that the primary and direct responsibility of employers and presumed negligence are principles calculated to protect society. brought an action in the Court of First Instance of Manila against Fausto Barredo as the sole proprietor of the Malate Taxicab and employer of Pedro Fontanilla. there was a head-on collision between a taxi of the Malate Taxicab driven by Pedro Fontanilla and a carretela guided by Pedro Dimapilis. 000. 16-year-old boy Faustino Garcia.

namely: Mary Marjorie B. 2012 Oscar Del Carmen. 1997. along with her spouse Leonardo Monsalud.R. liable HELD: Under the doctrine of res ipsa loquitur. Jr. and Allan at the time of the accident. In a Decision dated March 13. would not happen if those who had management or control used proper care. G. as well as the award of attorney’s fees. respondents. Geronimo Bacoy. and used as a public utility vehicle plying the Molave. namely. their son Oscar Jr. regardless of whether the employee drove the registered owner’s vehicle in connection with his employment. Monsalud. moral and exemplary damages resulting from the death of the three victims. in behalf of the six minor children of the Monsaluds. ISSUE: Whether or not whether there was an employer-employee relationship between Oscar Jr. Geronimo prayed for the reimbursement of funeral and burial expenses.. an independent civil action for damages based on culpa aquiliana. et al. Because of the unfortunate incident. Absent the circumstance of unauthorized use or that the subject vehicle was stolen which are valid defenses available to a registered owner. Aside from Allan. petitioner. vs. it affords reasonable evidence – in the absence of a sufficient. FACTS: Emilia Bacoy Monsalud. Upon reaching Purok Paglaom in Sominot. 173870 April 25. they were run over by a Fuso passenger jeep bearing plate number UV-PEK-600 that was being driven by Allan Maglasang. Geronimo Bacoy. Unfortunately.. were on their way home from a Christmas party they attended in Poblacion. and loss of net income earnings of Emilia who was employed as a public school teacher at the time of her death. there now arises a presumption of negligence which he could have overcome by evidence that he exercised due care and diligence in preventing strangers from using his jeep. Sr. said court declared Allan guilty beyond reasonable doubt of the crime charged. 96-20219. The aforementioned requisites having been met. Guardian and representing the children. Zamboanga Del Sur. The operator on record of a vehicle is primarily responsible to third persons for the deaths or injuries consequent to its operation. the spouses Oscar del Carmen. in the ordinary course of things. he failed to do so. a case for Reckless Imprudence Resulting in Multiple Homicide was filed against Allan before the RTC. No. Sr. and their daughter Glenda Monsalud. filed Civil Case No. Jr. Page 52 of 845 . The jeep was registered in the name of petitioner Oscar del Carmen. thus holding Oscar Jr. Zamboanga del Sur and vice versa route. Emilia’s father. Zamboanga del Sur to Sominot. Sominot. “where the thing that caused the injury complained of is shown to be under the management of the defendant or his servants. During the pendency of said criminal case. and Norma del Carmen and the registered owner of the jeep. and the accident. also impleaded therein were his alleged employers. he cannot escape liability for quasi-delict resulting from his jeep’s use. reasonable and logical explanation by defendant – that the accident arose from or was caused by the defendant’s want of care.

a passenger jeep. wherein it adjudged guilty of simple negligence. Gumaca. and a bus with Body No. temperate damages. moral and exemplary damages. and caused respondent physical injuries. respondent. It further held petitioner bus company liable for failing to exercise the diligence of a good father of the family in the selection and supervision of Avila. having failed to sufficiently inculcate in him discipline and correct behavior on the road. petitioner. 2010 Philippine Hawk Corporation. ISSUE: Whether or not petitioner is liable to respondent for damages HELD: The Court upholds the finding of the trial court and the Court of Appeals that petitioner is liable to respondent. The CA affirmed the decision of the trial court with modification in the award of damages. attorney's fees. in the civil case for damages against petitioner. Quezon. FACTS: On March 15. in her own behalf and in behalf of her children. 2005. for having failed to sufficiently inculcate in him discipline and correct behavior on the road. The Court also affirmed the CA's decision in awarding civil indemnity for the death of respondent's husband. petitioner's tests were concentrated on the ability to drive and physical fitness to do so. Respondent sought the payment of indemnity for the death of Silvino Tan. 1992. It also did not know that Avila had been previously involved in sideswiping incidents. The trial court rendered judgment against petitioner and defendant Margarito Avila. arising from a vehicular accident that occurred on March 17. The accident involved a motorcycle. Page 53 of 845 . the cost of the motorcycle's repair. Indeed. The bus was owned by petitioner Philippine Hawk Corporation. The accident resulted in the death of respondent's husband. Margarito Avila. and other just and equitable reliefs. since it failed to exercise the diligence of a good father of the family in the selection and supervision of its bus driver. and was then being driven by Margarito Avila. Silvino Tan. vs.R. On June 18. 166869 February 16. respondent Vivian Tan Lee filed before the RTC of Quezon City a Complaint against petitioner Philippine Hawk Corporation and defendant Margarito Avila for damages based on quasi-delict. medical and hospitalization expenses. Vivian Tan Lee. respondent filed an Amended Complaint. 119. funeral and interment expenses. No. and moral damages for the physical injuries sustained by respondent in addition to the damages granted by the trial court to respondent. G. 1991 in Barangay Buensoceso.

R No. the proximate cause of the accident was due to the position of the trailer where it covered a cemented part of the road. ISSUE: Whether there was negligence on the part of the respondent.. Jose Ching and/or Liberty Forest. petitioner. thus it cause the swerving of a Nissan van owned by the petitioner when a passenger bus was coming in between the trailer. The trailer was owned by the respondent Liberty Forest. Inc. vs. The Nissan van owner claimed for damages against the respondent. It is alleged that Limbaga likewise placed kerosene lighted tin cans on the front and rear of the trailer. Limbaga placed a banana trunk with leaves on the front and the rear portion of the prime mover to warn incoming motorists. HELD: There was negligence on the part of the respondent when the latter failed to put and used an early warning device because it was found out that there was no early warning device being prescribed by law that was used by the driver in order to warn incoming vehicle. 161803 February 4. Inc. 229. FACTS: A Prime Mover Trailer suffered a tire blow out during the night of its travel at a national highway. As substitute. Thus the respondent is declared liable due to violation of road rules and regulations. Furthermore. The trial court found that the proximate cause of the three –way accident is the negligence and carelessness of driver of the respondent. Limbaga. 2008 Dy Teban Trading. Since the car was placed at the right wing of the road. The prime mover was not equipped with triangular. thus confused and made trick way for other vehicles to pass by. Page 54 of 845 . respondents. the early warning device required under Letter of Instruction No. He parked the prime mover with trailer at the shoulder of the road. collapsible reflectorized plates. G. and Cresilito M.

In quasi-delicts cases. respondents filed a complaint for damages against Pajarillo for negligently shooting Evangeline and against Safeguard for failing to observe the diligence of a good father of a family to prevent the damage committed by its security guard. ISSUE: Whether Safeguard Security can be held liable for the acts of its agent HELD: The law presumes that any injury committed either by fault or omission of an employee reflects the negligence of the employer.R No. petitioners. Katipunan Branch. Suddenly. Page 55 of 845 . Thus. Quezon City. 1998. FACTS: On November 3. the employer must prove that there was no negligence on his part in the supervision of his employees. due diligence on the supervision and operation of employees includes the formulation of suitable rules and regulations for the guidance of employees and the issuance of proper instructions intended for the protection of the public and persons with whom the employer has relations through his employees. Safeguard Security committed negligence in identifying the qualifications and ability of its agents. It was declared that in the selection of employees and agents..m. and pulled out her firearm from her bag to deposit the same for safekeeping. employers are required to examine them as to their qualifications. et al. experience and service records. Pajarillo shot Evangeline with his service shotgun hitting her in the abdomen instantly causing her death.. and Admer Pajarillo. in this case. in order to overcome this presumption. Thus. On January 14. at about 2:50 p.. who was stationed outside the bank. Respondents prayed for actual. 1997. G. Evangeline. vs. Inc. 165732 December 14. approached security guard Pajarillo. Evangeline Tangco went to Ecology Bank. 2006 Safeguard Security Agency. respondents. moral and exemplary damages and attorney’s fees. to renew her time deposit per advise of the banks cashier as she would sign a specimen card. Lauro Tangco. a duly licensed firearm holder with corresponding permit to carry the same outside her residence.

still the registry was under his name. Hence. respondents. Domingo. impleading Albert Jaucian as principal defendant doing business under the name and style of Auto Palace Car Exchange. vs. As a result of the impact. Acido. the Assistant City recommended the filing of information for reckless imprudence resulting in damage to property and physical injuries. thus it is presumed that he still possesses the car and that the damages caused by the car be charge against him being the registered owner. even the petitioner claimed that he was no longer the present owner of the car. The primary function of Motor vehicle registration is to identify the owner so that if any accident happens. responsibility therefore can be fixed on a definite individual. FACTS: On 22 October 1991. the registered owner. The original complaint was amended twice: first. a green Mitsubishi Lancer driven by Renato Dela Cruz Ocfemia darted from Vito Cruz Street towards the South Superhighway directly into the path of Domingo’s car thereby hitting and bumping its left front portion. HELD: Under the Motor Vehicle law. 2004 Nostradamus Villanueva. Per Traffic Accident Report prepared by Traffic Investigator Patrocinio N. it was declared that the registered owner of any vehicle is primary land directly liable for any injury it incurs while it is being operated. Domingo and Leandro Luis R. Priscilla Domingo’s silver Lancer car then driven by Leandro Luis R. it hit two (2) parked vehicles at the roadside. Page 56 of 845 . Thus. Domingo was cruising along the middle lane of South Superhighway at moderate speed from north to south. Ocfemia was driving with expired license and positive for alcoholic breath. petitioner. impleading Auto Palace Car Exchange as commercial agent and/or buyer-seller and second.R No. or that any damage or injury is caused by the vehicle. G. Suddenly. ISSUE: Whether the owner Villanueva be held liable for the mishap. 144274 September 20. Priscilla R. the second hitting another parked car in front of it.

1733 and 1755 of the Code. Under Article 1756 of the New Civil Code. the petitioner Calalas filed an action against Salva. 122039 May 31. being the owner of the truck. This is a case on culpa contractual where there was pre-existing obligations and that the fault is incidental to the performance of the obligation. it was clearly observed that the petitioner has negligence in the conduct of his duty when he allowed Sunga to seat in the rear portion of the jeep which is prone to accident. In this case. FACTS: Eliza Sunga was a passenger of a jeepney owned and operated by the petitioner Calalas. On the other hand. ISSUE: Whether or not bumping of the jeepney by the truck owned by Salva was a caso fortuito HELD: The petitioner is liable for the injury suffered by Sunga. petitioner. respondents. vs. The lower court ruled in favor of ther petitioner. an Isuzu Truck driven by Verene and owned by Salva. it provides that common carriers are presumed to have been at fault or to have acted negligently unless they prove that they observed extraordinary diligence as defined in Arts. However. the law presumes that any injury suffered by a passenger of the jeep is deemed to be due to the negligence of the driver. When the jeep stopped. Eliza Jujeurche Sunga and Francisco Salva. accidentally hit Sunga causing the latter to suffer physical injuries where the attending physician ordered a three months of rest. Thus. Court Of Appeals. Sunga filed an action for damages against the petitioner for breach of contract of common carriage by the petitioner. G. Sunga gave way to a passenger going outside the jeep. Page 57 of 845 . 2000 Vicente Calalas. Private respondent Sunga sat in the rear protion of the jeepney where the conductor gave Sunga an extension seat. thus the truck owner is liable for the damage to the jeep of the petitioner. This provision necessarily shifts to the common carrier the burden of proof.R No.

and he must in a moment have perceived that it was too late for the horse to cross with safety in front of the moving vehicle. ISSUE: Whether or not the defendant is guilty of negligence HELD: As the defendant started across the bridge. going at the rate of about ten or twelve miles per hour. as it appeared to him that the man on horseback before him was not observing the rule of the road. thus liable to pay damages in favor of the plaintiff. the defendant ran straight on until he was almost upon the horse. riding on his pony was half way across the Carlatan bridge when the defendant approached from the opposite direction in an automobile. But it was the defendant who had the last clear chance to avoid the impending harm and when he failed to do so. the defendant quickly turned his car sufficiently to the right to escape hitting the horse alongside of the railing where it as then standing. As the defendant neared the bridge he saw a horseman on it and blew his horn to give warning of his approach. he pulled the pony closely up against the railing on the right side of the bridge instead of going to the left. The defendant. it struck on the hock of the left hind leg by the flange of the car and the limb was broken. FACTS: The plaintiff. In so doing. Instead of doing this. He continued his course and after he had taken the bridge he gave two more successive blasts. instead of veering to the right while yet some distance away or slowing down.R. plaintiff-appellant. and it was his duty either to bring his car to an immediate stop or. there being then no possibility of the horse getting across to the other side. G. However. The plaintiff saw the automobile coming and heard the warning signals. he is deemed negligent. for he was guilty of antecedent negligence in planting himself on the wrong side of the road. thinking that he has no sufficient time to go to the other side of the road. but as he moved toward the center of the bridge he clearly saw that this would not be done. When he had gotten quite near.. The plaintiff received contusions which caused temporary unconsciousness and required medical attention for several days. L-12219 March 15. Page 58 of 845 . to take the other side and pass sufficiently far away from the horse to avoid the danger of collision. continued to approach directly toward the horse. The horse fell and its rider was thrown off with some violence. As a result of its injuries the horse died. seeing that there were no other persons on the bridge. vs. defendant-appellee. The control of the situation had then passed entirely to the defendant. Frank Smith. he had the right to assume that the horse and the rider would pass over to the proper side. Jr. but in so doing the automobile passed in such close proximity to the animal that it became frightened and turned its body across the bridge with its head toward the railing. The plaintiff himself was not free from fault. No. 1918 Amado Picart.

doing business under the name and style of City Garden Hotel. when Page 59 of 845 . the contract of deposit was perfected from Sees delivery. got the key to said Vitara from See to park it. See received a phone call where the Hotel Chief Security Officer informed him that his Vitara was carnapped while it was parked unattended at the parking area of Equitable PCI Bank. The keepers of hotels or inns shall be responsible for them as depositaries. On May 1. Ernesto T. Pioneer Insurance and Surety Corporation. the insured See deposited his vehicle for safekeeping with petitioner. of the Civil Code defines a contract of deposit and a necessary deposit made by persons in hotels or inns: Art.175.00 money claim of See and mortgagee ABN AMRO Savings Bank. or to their employees. provided that notice was given to them.R. vs. Respondent averred that it is the insurer for loss and damage of Jeffrey S. Horlador. Justimbaste. by right of subrogation. they take the precautions which said hotel-keepers or their substitutes advised relative to the care and vigilance of their effects. petitioner. Jr. Justimbaste issued a claim stub to See. It paid the P1. See arrived and checked in at the City Garden Hotel before midnight. through the latters employee. Art. G. Vicente Justimbaste. at about 1:00 am. See’s 2001 Suzuki Grand Vitara in the amount of P1. 1962. Thus. and filed a Complaint Sheet with the PNP Traffic Management Group in Camp Crame. If the safekeeping of the thing delivered is not the principal purpose of the contract. See went to see the Security Officer. as indemnity for the loss of the Vitara. See gave his Sinumpaang Salaysay to the police investigator. 1998. and a flash alarm was issued. thereafter reported the incident to the Operations Division of the Makati City Police Anti-Carnapping Unit. in relation to Article 1998. from the facts found by the lower courts. there is no deposit but some other contract. filed with the RTC of Makati a Complaint for Recovery of Damages against Durban ApartmentsCorp (or City Garden Hotel) and defendant before the RTC. 2003. In turn. Justimbaste. of the effects brought by the guests and that. and its parking attendant.163. Inc. The police investigated Hotel Security Officer.000.00. No. on the part of the latter.2002. Pioneer Insurance and Surety Corp. On April 30. 2011 Durban Apartments Corporation. Plainly. FACTS: On July 22. A deposit is constituted from the moment a person receives a thing belonging to another. The deposit of effects made by travelers in hotels or inns shall also be regarded as necessary.250. ISSUE: Whether or not Durban Apartments is liable for damages HELD: Article 1962. 179419 January 12. respondent. and Justimbaste. with the obligation of safely keeping it and returning the same. 2002.

which Justimbaste received with the obligation of safely keeping and returning it.he handed over to Justimbaste the keys to his vehicle. Ultimately. Page 60 of 845 . petitioner is liable for the loss of Sees vehicle.

Hooven Comalco Industries. Sultan Kudarat.R. G. petitioner. Page 61 of 845 . in his answer. they were fully paid. 135657 January 17. respondent. Consequently. ISSUE: Whether or not all the materials specified in the contracts had been delivered and installed by respondent in petitioners commercial building HELD: HOOVEN's bad faith lies not so much on its breach of contract .66.377.but rather on its appalling temerity to sue petitioner for payment of an alleged unpaid balance of the purchase price notwithstanding knowledge of its failure to make complete delivery and installation of all the materials under their contracts. HOOVEN filed an action against Lagon claiming that the latter failed to pay his due despite HOOVEN’s performance of its obligation. 2001 Jose V. On the part of Lagon.000. petitioner's right to withhold full payment of the purchase price prior to the delivery and installation of all the merchandise cannot be denied since under the contracts the balance of the purchase price became due and demandable only upon the completion of the project.as there was no showing that its failure to comply with its part of the bargain was motivated by ill will or done with fraudulent intent . the resulting social humiliation and damage to petitioner's reputation as a respected businessman in the community. Lagon. HOOVEN agreed to sell and install various aluminum materials in Lagon’s commercial building in Tacurong. Inc.00 as moral damages. denied liability and averred that HOOVEN was the party guilty of breach of contract by failing to deliver and install some of the materials specified in the proposals. Although petitioner was found to be liable to respondent to the extent of P6. On 24 February 1987. occasioned by the filing of this suit provide sufficient grounds for the award of P50. vs.870. a businessman and HOOVEN entered into two contracts. Lagon. that as regards the materials duly delivered and installed by HOOVEN. Lagon. whereby for a total consideration of P104. he is ordered by the court to pay HOOVEN the amount corresponding to the value of the materials admittedly delivered to him. that as a consequence he was compelled to procure the undelivered materials from other sources. No. FACTS: Sometime in April 1981..

Moreover. rendered respondent incapable. On 27 February 1987. a report on payments collected from lot buyers with copies of all the contracts to sell. In this case. Respondent did not incur delay since the period granted him to fulfill his obligation had not expired at the time respondent filed the action for rescission on 27 February 1987. the spouses Lorenzo and Lorenza Francisco and Engineer Bienvenido C. to develop the subdivision within the Page 62 of 845 . respondent agreed to undertake at his expense the development work for the Franda Village Subdivision. since petitioners stopped respondent from selling lots and collecting payments from lot buyers. or at least made it difficult for him. Respondent also advanced P200. Honorable Court of Appeals. which was the primary source of development funds. ISSUE: Whether or not respondent Mercado incurred delay HELD: The petitioners breached the Contract by: (1) hiring Rosales to do development work on the subdivision within the 27-month period exclusively granted to respondent. FACTS: On 3 February 1984. Mercado. Because petitioners were the first to breach the Contract and even interfered with the development work.00 for the initial expenses of the development work. Francisco and Lorenza D. G. Respondent committed to complete the construction within 27 months. petitioners. In return. (2) interfering with the latter's development work.000. Since the Contract had not expired at the time respondent filed the action for rescission. they in effect. within the first 15 days of every month. 2003 Spouses Lorenzo G.R. The law provides that delay may exist when the obligor fails to fulfill his obligation within the time expressly stipulated. and therefore respondent was in delay. 118749 April 25. the HSRC extended the Contract up to July 1987. No. respondent failed to submit the monthly report. and (3) stopping respondent from managing the sale of lots and collection of payments. The Contract required respondent to submit to petitioners. Francisco. Mercado entered into a Contract of Development for the development into a subdivision of several parcels of land in Pampanga. petitioners' defense that respondent did not finish the development work on time was without basis. control and supervise the sales of the lots within the subdivision. Further. respondent would receive 50% of the total gross sales of the subdivision lots and other income of the subdivision. respondent filed with the trial court an action to rescind the Contract with a prayer for damages. the HSRC extended the period for respondent to finish the development work until 30 July 1987. and Bienvenido C. However. vs. Petitioners countered that respondent breached the Contract by failing to finish the subdivision within the 27 months agreed upon. Under the Contract. respondent did not incur delay even if he completed only 28% of the development work. Respondent also enjoyed the exclusive and irrevocable authority to manage. respondents.

Page 63 of 845 . It is only when one of the parties fulfills his obligation that delay by the other begins.allotted period. In reciprocal obligations. neither party incurs in delay if the other does not comply or is not ready to comply with what is incumbent upon him.

FACTS: Petitioner Jacinto M.00. a force majeure. this should be offset by the defects in the windmill system which caused the structure to collapse after a strong wind hit their place. Petitioner failed to show that the collapse of the windmill was due solely to Page 64 of 845 . (b) the event must be either unforeseeable or unavoidable. After some negotiations they agreed on the construction of the windmill for a consideration of P60.000. and. He also disowned any obligation to repair or reconstruct the system since its collapse was attributable to a typhoon. Respondent is directed to pay petitioner Tanguilig the balance of P15.000 plus legal interest. Petitioner denied that the construction of a deep well was included in the agreement to build the windmill system.. Tanguilig proposed to respondent Vicente Herce Jr. Moreover. G. respondents.00. assuming that he owed petitioner a balance of P15. due to the refusal and failure of respondent to pay the balance. petitioner filed a complaint to collect the amount.00 was solely for the windmill assembly and its installation. The contract prices fixed in both proposals cover only the features specifically described therein and no other.000.T. (SPGMI) which constructed the deep well to which the windmill system was to be connected. (c) the event must be such as to render it impossible for the debtor to fulfill his obligation in a normal manner. which relieved him of any liability. No.R. the Supreme Court has consistently held that in order for a party to claim exemption from liability by reason of fortuitous event under Art. Regarding the second issue. HELD: There is absolutely no mention in the two documents that a deep well pump is a component of the proposed windmill system. for the contract price of P60. Respondent denied the claim saying that he had already paid this amount to the San Pedro General Merchandising Inc. On 14 March 1988. petitioner. According to respondent. Court of Appeals and Vicente Herce Jr. since the deep well formed part of the system the payment he tendered to SPGMI should be credited to his account by petitioner.M. to construct a windmill system for him. 117190 January 2. ISSUE: (1) Whether or not the payment for the deep well is part of the contract price (2) Whether or not Tanguilig is liable to reconstruct the damaged windmill considering that its collapse is due to a typhoon. 1174 of the Civil Code four (4) requisites must concur: (a) the cause of the breach of the obligation must be independent of the will of the debtor.000. vs. Engineering And General Merchandising. 1997 Jacinto Tanguilig doing business under the name and style J. (d) the debtor must be free from any participation in or aggravation of the injury to the creditor.

Petitioner merely stated that there was a "strong wind. Petitioner is ordered to "reconstruct subject defective windmill system." But a strong wind in this case cannot be fortuitous. in accordance with the one-year guaranty". a strong wind should be present in places where windmills are constructed.a fortuitous event. Page 65 of 845 . On the contrary.

Honorable Fourth Civil Cases Division of the Intermediate Appellate Court and the Heirs Of The Late Felix R. Fernando Periquet. brother of Petra. she died before she could sign it. The same was read by him and was further explained by Atty. she was survived by her siblings. On March 20. Elvira. declared that Felix Francisco was neither forced nor intimidated to sign the assignment of hereditary rights. and was reared to manhood by the spouses Periquet. Jr. In the case at bench. L-69996 December 5. Resultantly.R. respondents.. However. 1994 Dr. No. grave abuse of confidence. When Petra died. Though he was not legally adopted. and provided for certain legacies to her other heirs. mistake and undue influence. However. assigned his hereditary rights to the petitioner. respect and give full effect to the last wishes of his deceased sister. Jr. 1966. so they took in a son out of wedlock of Marta Francisco-Reyes. FACTS: Spouses Fernando Periquet and Petra Francisco were left childless after the death of their only child. witnesses for petitioner. the boy was given the name Fernando Periquet. Felix Francisco could not be considered to have been deceived into signing the subject deed of assignment for the following reasons: The assignment was executed and signed freely and voluntarily by Felix Francisco in order to honor. sister of Petra. Fernando Periquet died. Francisco. Page 66 of 845 . petitioner. and lack of cause and/or consideration in the execution of the challenged deed of assignment. In the said will. vs. But a few days before her death. who also served as witnesses in the execution and signing of the deed of assignment. Petra. nieces and nephews and by the petitioner. Diosdado Guytingco. Felix Franciso. he filed an action for annulment of the Assignment of Hereditary Rights claiming gross misrepresentation and fraud. G. Fernando Periquet. Petra left her estate to petitioner. Petra asked her lawyer to prepare her last will and testament. Jr. later on. the assignment of hereditary rights executed by Felix Francisco in favor of herein petitioner is valid and effective. no such fraud was employed by herein petitioner. ISSUE: Whether or not the Assignment of Hereditary Rights is tainted with fraud HELD: The kind of fraud that will vitiate a contract refers to those insidious words or machinations resorted to by one of the contracting parties to induce the other to enter into a contract which without them he would not have agreed to. Furthermore.

96505 July 1.666 kilograms but private respondent ignored the same. 1976.666 kilos. appellant's agent Jose Llover signed contract No. Page 67 of 845 . Petitioner made a final demand with a warning that. On February 16.00 per 100 kilos. petitioner. However within the delivery period. After the period to deliver had lapsed. Pursuant to said article. respondent. and those who in any manner contravene the tenor thereof. The Court of Appeals and Bernard Oseraos. FACTS: Bernard Oseraos had several transactions with Legaspi Oil Co. ISSUE: Whether or not private respondent is guilty of breach of contact HELD: Private respondent is guilty of fraud in the performance of his obligation under the sales contract where under he bound himself to deliver to petitioner 100 metric tons of copra..R. 3804 for the sale of 100 tons of copra at P82.334 kilos of copra thus leaving a balance of 53. private respondent is liable for damages. The conduct of private respondent clearly manifests his deliberate fraudulent intent to evade his contractual obligation for the price of copra had in the meantime more than doubled from P82.666 kilograms of copra. those who in the performance of their obligation are guilty of fraud. the undelivered balance. Still private respondent failed to fulfill his contractual obligation to deliver the remaining 53. or a price differential of P86. or delay. Oseraos delivered only 46. appellee exercised its option under the contract and purchased the undelivered balance from the open market at the prevailing price of P168. 1976. the balance to be purchased at open market and the price differential to be charged against appellant. 1976.334 kilograms of copra to petitioner. petitioner would purchase the balance at the open market and charge the price differential to private respondent.00 per 100 kilos with delivery terms of 20 days effective March 8.666 kilograms of copra. 1993 Legaspi Oil Co.00 per 100 kilograms.76. for the sale of copra to the latter. G. appellant sold only 46. Accordingly. The price at which appellant sells the copra varies from time to time.76 chargeable against appellant.00 to P168 per 100 kilograms. a net loss of P46.666 kilograms of copra and since there was still no compliance by private respondent.00 per 100 kilos.152. should private respondent fail to complete delivery of the balance of 53. Petitioner made repeated demands upon private respondent to deliver the balance of 53. since there was still no compliance.152. Inc. at the open market at the then prevailing price of P168. negligence. petitioner exercised its right under the contract and purchased 53. No. are liable for damages. vs. a price differential of P46.. On October 22. Under Article 1170 of the Civil Code of the Philippines. depending on the prevailing market price when the contract is entered into. demands were made upon appellant to deliver the balance with a final warning that failure to deliver will mean cancellation of the contract.

the fulfillment of the obligation from the obligee. In legal parlance. The civil law concept of delay or default commences from the time the obligor demands. respondents. that the school no longer wants to collect on Performance Bond PCIC 46172 (with a value of P692. all issued by the Philippine Charter Insurance Corporation. requesting for the extension of its performance and surety bonds because the supposed revision of the plans would require more days. or (c) in other stages of the judicial proceeding. CCP wrote DPCC and PCIC informing them of the breach in the contract and its plan to claim on the construction bonds. CCP sent a letter to PCIC of its final demand for the payment of P13. and absent any showing that this was made thru palpable mistake.[38] It is an established principle that judicial admissions cannot be contradicted by the admitter who is the party himself and binds the person who makes the same. The latter denied former’s claims against the three bonds.74).000. an educational institution. FACTS: Petitioner Central Colleges of the Philippines (CCP). A party may make judicial admissions in (a) the pleadings. DPCC incurred delay from the time Page 68 of 845 . Only 47% of the work to be done was actually finished. demand is the assertion of a legal or procedural right. However. DPCC posted three (3) bonds. ISSUE: Whether or not the CA grossly erred in sustaining the CIAC award finding petitioner liable to respondent CCP under the performance bonds and the surety bond HELD: It is clear from the testimony of Crispino P. To guarantee the fulfillment of the obligation. 2012 Philippine Charter Insurance Corporation. through its President. Since CCP. Reyes.000. G. vs. CCPs President. The Phase 1 of the project was completed without issue. judicially admitted that it is no longer interested in pursuing PCIC-46172. at the same time. 180631-33 February 22. A down payment for the Phase 2 of the project was thereafter made. the scope of its claim will just be confined to Surety Bond No. CCP hired another contractor to work on the school site. PCIC-45542 and Performance Bond No. DPCC wrote PCIC confirming the delay.890. negotiations to continue on with the construction between CCP and DPCC reached a dead end. Phase 2 of the project encountered numerous delays. contracted the services of respondents Dynamic planners and Construction Corporation (DPCC) to be its general contractor for the construction of its five (5)-storey school building with a total contract price of P248. no amount of rationalization can offset it.R. either by verbal or written manifestations or stipulations. petitioner.000.351. PCIC-45541. However. PCIC approved DPCC’s request for extension of the bonds.000. Central Colleges Of The Philippines and Dynamic Planners And Construction Corporation. judicially or extrajudicially. Nos. Hence. The construction of the entire building would be done in two phases with each phase valued at P124.47 as indicated in the bonds. (b) during the trial.924.

Upon notice of default of obligor DPCC. PCICs liability. It is the obligor’s culpable delay. 2003 when CCP informed it in writing of the breach of the contract agreement and demanded the fulfillment of its obligation against the bonds.CCP called its attention that it had breached the contract and extrajudicially demanded the fulfillment of its commitment against the bonds. the November 6. not merely the time element. As such. DPCC became in default on October 29. which gives the obligee the right to seek the performance of the obligation. as surety. Page 69 of 845 . Consequently. CCPs cause of action accrued from the time that DPCC became in culpable delay as contemplated in the surety and performance bonds. 2003 letter that CCP sent to PCIC properly complied with the notice of claim requirement set forth in the said bonds. Thus. was already attached.

716. at that point. Because petitioner acknowledged that it had been overpaid. (ITI). because petitioner applied part of what it received to respondents outstanding liabilities.88. In September 1995. Meanwhile.R.89% of the project (or was 11 months and six days behind schedule).416. A debtor is deemed to have violated his obligation to the creditor from the time the latter makes a demand. slippage. Inc. Moreover. if not eliminate. Inc. to evaluate the progress of the project. Petitioner was relieved of its obligation to complete the project while respondent was freed of its obligation to pay the entire contract price. Nevertheless. respondent engaged the services of Integratech. Once the creditor makes a demand. Neither did it inform petitioner of ITI’s September 7. awarded the contract for the structural works of its 32-storey Makati Prime Tower (MPT) to petitioner Titan-Ikeda Construction and Development Corporation. Primetown demanded reimbursement for the amount it spent in having the project completed. ISSUE: Whether or not Titan-Ikeda is responsible for the project’s delay HELD: It was found that because respondent modified the MPT's architectural design. petitioner. Page 70 of 845 . Because the parties agreed to extinguish the supplemental agreement. Petitioner then demanded for the payment due him in relation to its partial performance of its obligation. had only accomplished 31. an engineering consultancy firm. was deemed to have paid P112. by executing the June 30. 2008 Titan-Ikeda Construction & Development Corporation. respondent belatedly informed petitioner of those modifications. Inc. petitioner was not responsible for the project's delay. petitioner and respondent were discussing the possibility of the latter’s takeover of the project’s supervision. petitioner filed a case for specific performance against Primetown. the debtor incurs mora or delay. In its report. It also failed to deliver the concrete mix and rebars according to schedule. 1994 deed of absolute sale. G. vs. Despite ongoing negotiations. For failure of Primetown to pay despite repeated demands. respondent Primetown Property Group. Primetown Property Group. Mora or delay is the failure to perform the obligation in due time because of dolo (malice) or culpa (negligence). respondent. Meanwhile. FACTS: In 1992. No. they were no longer required to fully perform their respective obligations. ITI informed respondent that petitioner. Respondent never sent petitioner a written demand asking it to accelerate work on the project and reduce. both parties agreed that Primetown will take over the project. 158768 February 12. For this reason. 1995 report. petitioner had to adjust the scope of work. Subsequently. it was obliged to return the excess to respondent. it admitted overpayment.. respondent did not obtain petitioner’s consent in hiring ITI as the project’s construction manager. respondent. However.

ISSUE: Whether or not PNB MADECOR is correct in its contention that compensation is applicable to its receivables from and its payables to PNEI HELD: Petitioner’s obligation to PNEI appears to be payable on demand. hence his prayer for a writ of preliminary attachment. G. This being so. The sheriff issued a notice of garnishment addressed to the Philippine National Bank (PNB) and PNB MADECOR attaching the “goods. effects. The deed of assignment included sales invoices containing stipulations regarding payment of interest and attorney’s fees.R. Since petitioner’s obligation to PNEI is payable on demand. Page 71 of 845 . it follows that the obligation is not yet due. the law does not require that the parties’ obligations be incurred at the same time. monies and all other personal properties” of PNEI in the possession of the bank. FACTS: Guillermo Uy assigned to respondent Gerardo Uy his receivables due from Pantranco North Express Inc. but one that merely informed petitioner of the conveyance of a certain portion of its obligation to PNEI. PNB MADECOR however claimed that the receivables of Guillermo Uy have been applied to PNEI’s unpaid rentals to the bank thru compensation. respondent argues that there can be no compensation since there was as yet no compensable debt in 1984 when PNEI demanded payment from petitioner. petitioner. 1995. this obligation may not be subject to compensation for lack of a requisite under the law. since PNEI was not yet indebted to petitioner at that time. and there being no demand made. Gerardo C. credits. thus private respondent is no longer entitled to such. Respondent pointed out that the demand letter sent by PNEI to petitioner was made before petitioner’s obligation to PNEI became due. vs. Therefore. Without compensation having taken place. As regards respondent’s averment that there was as yet no compensable debt when PNEI sent petitioner a demand letter on September 1984. respondent. However. the Court found that the letter sent by PNEI to PNB MADECOR was not one demanding payment. (PNEI). This obligation may undoubtedly be garnished in favor of respondent to satisfy PNEI’s judgment debt. 129598 August 15. What the law requires only is that the obligations be due and demandable at the same time. petitioner remains obligated to PNEI to the extent stated in the promissory note. Uy. No. 2001 PNB Madecor. He alleged that PNEI was guilty of fraud in contracting the obligation sued upon. Gerardo Uy filed with the RTC a collection suit against PNEI. On January 23.

date and place. The construction materials did not arrive at eight o'clock as promised. 115129 February 12. G. He saw the delivery truck but the things he purchased were not yet ready for loading. i. Page 72 of 845 . No.110. Not being able to fulfill the scheduled burial of his wife. petitioner. Distressed by the seeming lack of concern on the store’s part. Barzaga went back to the store. respondents. Barzaga decided to cancel his transaction with the store and buy from another store. ISSUE: Whether or not the respondent incurred delay in the performance of his obligation HELD: Respondent Angelito Alviar was negligent and incurred in delay in the performance of his contractual obligation. Barzaga demanded damages from Alviar but the latter refused claiming that he is not liable for damages considering that he did not incur legal delay since there was no specific time of delivery agreed upon.R. the payment of the purchase price of P2. Respondent's delay in the delivery of the construction materials wasted so much time that construction of the tomb could start only on the twenty-third. when there was yet no delivery made. This case is clearly one of non-performance of a reciprocal obligation. Court Of Appeals and Angelito Alviar. 1997 Ignacio Barzaga. The niche had to be constructed at the very least on the twenty- second of December considering that it would take about two (2) days to finish the job if the interment was to take place on the twenty-fourth of the month. vs. With this assurance. In their contract of purchase and sale. petitioner had already complied fully with what was required of him as purchaser.. FACTS: Barzaga went to the hardware store of respondent Alviar to inquire about the availability of certain materials to be used in the construction of a niche for his wife. The following morning. It was incumbent upon respondent to immediately fulfill his obligation to deliver the goods otherwise delay would attach. Barzaga purchased the materials and paid in full.e. A store employee agreed to deliver the items at the designated time. Barzaga went back to the store and told the employees that the materials he was buying would have to be delivered at the Memorial Cemetery by eight o'clock that morning since his hired workers were already at the burial site and time was of the essence. It could not be ready for the scheduled burial of petitioner's wife. After follow-ups and several hours later.

HELD: Petitioner's argument that private respondent was already in default in the payment of his outstanding balance of P15. On 14 March 1988. since the deep well formed part of the system the payment he tendered to SPGMI should be credited to his account by petitioner. No. According to respondent. After some negotiations they agreed on the construction of the windmill for a consideration of P60. Petitioner refused to pay and argued that private respondent was already in default in the payment of his outstanding balance of P15. ISSUE: Whether or not petitioner is correct in his contention that respondent is already in default thus he should bear the loss of the windmill.000 and hence should bear his own loss. petitioner filed a complaint to collect the amount. Thus. assuming that he owed petitioner a balance of P15.. instead.000 and hence should bear his own loss. it is petitioner who should bear the expenses for the reconstruction of the windmill. Moreover. Tanguilig proposed to respondent Vicente Herce Jr. to construct a windmill system for him. the same shall be executed at his cost. When the windmill failed to function properly it became incumbent upon petitioner to institute the proper repairs in accordance with the guaranty stated in the contract. Article 1167 of the Civil Code is explicit on this point that if a person obliged to do something fails to do it. G. In reciprocal obligations. Respondent denied the claim saying that he had already paid this amount to the San Pedro General Merchandising Inc. Engineering And General Merchandising. 1997 Jacinto Tanguilig doing business under the name and style J. FACTS: Petitioner Jacinto M. 117190 January 2. this should be offset by the defects in the windmill system which caused the structure to collapse after a strong wind hit their place. vs.R.M. is untenable.000. petitioner.T. respondents.000. Court Of Appeals and Vicente Herce Jr. due to the refusal and failure of respondent to pay the balance. (SPGMI) which constructed the deep well to which the windmill system was to be connected. neither party incurs in delay if the other does not comply or is not ready to comply in a proper manner with what is incumbent upon him. Page 73 of 845 . respondent cannot be said to have incurred in delay.

Page 74 of 845 . 96053 March 3. et al. only P9. them on numerous occasions from May 29. petitioners claimed that not a single centavo of the P27. G. of the P10. he paid only the sum of P6. and received by. 1993 Josefina Tayag. Sr. executed a deed of conveyance. Petitioners averred that private respondent’s failure to pay full consideration of the agreement to sell gave them the right to have the contract rescinded. Nueva Ecija for the sum of P50.. petitioners' actuation is susceptible of but one construction that they are now estopped from reneging from their commitment on account of acceptance of benefits arising from overdue accounts of private respondent.926. FACTS: Juan Galicia. up to November 3. respondents. Private respondent is ordered to pay the balance of the purchase price and to reimburse the sum paid by Juan Galicia Sr. the right to rescind is not absolute and will not be granted where there has been substantial compliance by partial payments.’s sister.41 while the difference of the indebtedness was paid by Juan Galicia. minus the attorney's fees and damages awarded in favor of private respondent.000 to be paid within ten days from execution of the instrument. however. Sr. No.’s sister to the Philippine Veteran’s bank. Sr. vs. Court Of Appeals and Albrigido Leyva.000 representing the remaining balance was paid to them. ISSUE: Whether or not the petitioners have the right to rescind the contract in the present case HELD: Considering that the heirs of Juan Galicia.R. Indeed. It was also agreed upon that private respondent will assume the vendors' obligation to the Philippine Veterans Bank. petitioners. prior to his demise in 1979 in favor of Albrigido Leyva involving the undivided one-half portion of a piece of land situated at Poblacion. 1975. 1979. And according to petitioners. Moreover.707 was tendered to. Sr.000. There is no dispute that the first installment was received by Juan Galicia. accommodated private respondent by accepting the latter's delayed payments not only beyond the grace periods but also during the pendency of the case for specific performance. Guimba.

sister of Petra. Felix Franciso. Petra left her estate to petitioner. Petra. she was survived by her siblings. Resultantly. grave abuse of confidence. The same was read by him and was further explained by Atty. she died before she could sign it. However. Fernando Periquet. he filed an action for annulment of the Assignment of Hereditary Rights claiming gross misrepresentation and fraud. the assignment of hereditary rights executed by Felix Francisco in favor of herein petitioner is valid and effective. Petra asked her lawyer to prepare her last will and testament. later on. assigned his hereditary rights to the petitioner.R.. the boy was given the name Fernando Periquet. Fernando Periquet. witnesses for petitioner. Felix Francisco could not be considered to have been deceived into signing the subject deed of assignment for the following reasons: The assignment was executed and signed freely and voluntarily by Felix Francisco in order to honor. ISSUE: Whether or not the Assignment of Hereditary Rights is tainted with fraud. vs. On March 20. Elvira. But a few days before her death. respondents. and was reared to manhood by the spouses Periquet. In the case at bench. L-69996 December 5. Francisco. declared that Felix Francisco was neither forced nor intimidated to sign the assignment of hereditary rights. petitioner. G. Fernando Periquet died. Page 75 of 845 . and lack of cause and/or consideration in the execution of the challenged deed of assignment. brother of Petra. Jr. who also served as witnesses in the execution and signing of the deed of assignment. In the said will. Jr. Furthermore. and provided for certain legacies to her other heirs. However. nieces and nephews and by the petitioner. mistake and undue influence. Though he was not legally adopted. HELD: The kind of fraud that will vitiate a contract refers to those insidious words or machinations resorted to by one of the contracting parties to induce the other to enter into a contract which without them he would not have agreed to. No. no such fraud was employed by herein petitioner. FACTS: Spouses Fernando Periquet and Petra Francisco were left childless after the death of their only child. 1966. Diosdado Guytingco. so they took in a son out of wedlock of Marta Francisco-Reyes. Jr. When Petra died. respect and give full effect to the last wishes of his deceased sister. 1994 Dr. Honorable Fourth Civil Cases Division of the Intermediate Appellate Court and the Heirs Of The Late Felix R.

the creditor judicially or extrajudicially requires the debtor’s performance. Consequently. but Finvest requested a deadline of July 31. PSE might exercise its right to sell Finvest’s membership seat and use the proceeds thereof to settle its obligations to the PSE. ISSUE: Whether or not Finvest incurred delay in its obligations HELD: Under the law on contracts. hence. by reason of a cause imputable to the debtor. respondents. Raquel-Santos and Annalissa Mallari. Mr. 1998. 1999. with the warning that. As of August 11. Inc. Page 76 of 845 . PSE also ordered Finvest to replace its nominee. FACTS: Finvest is a stock brokerage corporation duly organized under Philippine laws and is a member of the PSE with one membership seat pledged to the latter.267.339. 1998. In the present petition.990. its member-brokers and its clients. therefore. PSE also received reports that Finvest was not meeting its obligations to its clients. PSE insists that Finvest’s liability for fines. petitioners. 1999. The Securities and Exchange Commission (SEC) also suspended its license as broker. G. PSE demanded from Finvest the payment of its obligations to the PSE in the amount ofP4. PSE indefinitely suspended Finvest from trading. 2009 Armand O. In the course of its trading operations. the obligation is demandable and liquidated.. PSE had the right to sell at public auction Finvest’s pledged seat pursuant to the Pledge Agreement and in accordance with Article 2112 of the Civil Code.839. 1990 to July 16. was pegged at P5. mora solvendi or debtor’s default is defined as a delay in the fulfillment of an obligation. Finvest promised to settle all obligations to its clients and to PSE subject to verification of the amount due. should Finvest fail to meet the deadline. the debtor delays performance. 1999. penalties and charges has been established. Annalissa Mallari was Finvest’s Administrative Officer until December 31. First. No. charges and fines for violations of pertinent rules. representing penalties. PSE also demanded that Finvest settle its liabilities to it not later than March 31..99. PSE inquired from Finvest if it had already settled all duly acknowledged claims of its clients and its liabilities to PSE. Finvest’s total obligation to PSE. Finvest incurred liabilities to PSE representing fines and penalties for non-payment of its clearing house obligations. There are three requisites necessary for a finding of default. Considering. Raquel-Santos was Finvest’s President and nominee to the PSE from February 20.R. second. 1998. that Finvest already acknowledged and ascertained its obligations with PSE and yet it defaulted in the payment thereof. Raquel-Santos. vs. and third. PSE granted Finvest’s request. PSE points out that it has made several demands on Finvest for the payment of its obligations and the amount due has been computed after consultation with Finvest’s representative. On June 17. Ernesto Lee. Court of Appeals and Finvest Securities Co.99 and to Finvest’s clients within 15 days. On February 3. determined and substantiated. Armand O. 1998. 174986 July 7.

penalties and charges was still in dispute and as yet undetermined.liquidated. However. Under the attendant circumstances. apparently to allow for more time to thresh out the details of the computation of said penalties. penalties and charges. It cannot be made to pay an obligation the amount of which was not fully explained to it. thus. At the time PSE left the negotiating table. both trial court and CA have ruled otherwise. Finvest cannot be deemed to have incurred in delay in the payment of its bligations to PSE. the exact amount of Finvest’s fines. it cannot be said that Finvest’s debt is liquidated. during which period PSE repeatedly moved the deadlines it imposed for Finvest to pay the fines. The findings of fact of both the trial court and the CA are fully supported by the records and that they plainly show that the parties were negotiating to determine the exact amount of Finvest’s obligations to PSE. be premature. Page 77 of 845 . A debt is liquidated when the amount is known or is determinable by inspection of the terms and conditions of relevant documents. The public sale of the pledged seat would. Consequently.

Page 78 of 845 .

Inc.” The delay in the performance must be malicious or negligent. Felipe Lustre purchased a car from Toyota Shaw. stating that if there be default on the part of the mortgagor to pay any of the installments. including liquidated damages. G.R. The said contract provided for an acceleration clause. Lustre executed a promissory note and a contract of chattel mortgage over the vehicle in favor of Toyota Shaw. much less evidence. The Supreme Court agreed with the Court of Appeals that such omission was mere inadvertence on his part. When he refused. RCBC demanded the payment of the debt. the whole amount remaining shall become due. No. RCBC filed an action for replevin and damages. that Lustre acted with malice or negligence in failing to sign the check. On the theory that he defaulted in his payments. Toyota Shaw then assigned all its rights and interest in the Chattel Mortgage to RCBC. 133107 March 25. Page 79 of 845 . 1999 Rizal Commercial Banking Corporation (RCBC) v. the balance of which is to be paid in twenty-four (24) equal monthly installments. There was no imputation. The problem arose when a check was not signed by Lustre. Issue: Whether or not Lustre should be held in default Ruling: Article 1170 of the Civil Code states that “those who in the performance of their obligation are guilty of delay are liable for damages. Court of Appeals (CA) Facts: The private respondent Atty. for which he made a downpayment. To secure the balance.

the spouses filed a complaint against SOLID and STATE for SOLID’s failure to execute the absolute deed of sale despite full payment of the purchase price as of 1981.347. As a result. for failure of SOLID to comply with its obligations. (STATE) over its subdivided parcels of land. at 12% interest per annum. Issue: Who has the better right over the subject lot? Ruling: STATE admits the superior rights of the spouses over the subject property as it did not pray for the nullification of the contract between SOLID and the spouses. The unrecorded sale between SOLID and the spouses is preferred Page 80 of 845 . On April 6. G. including the subject lot.70. 1983. Upon signing the contract. Court of Appeals (CA) Facts: Spouses Oreta and Solid Homes. Inc. (SOLID) entered into a contract to sell involving a parcel of land for P39. 1996 State Investment House. SOLID executed several real estate mortgage contracts in favor of State Investment House Inc. No. On November 4. one of which is the subject lot of the aforementioned contract. 115548 March 5. Inc. v. the spouses paid the downpayment with the agreement that the balance shall be payable in monthly installments of P451. before it can be required to release the title in their favor. but instead asked for the payment of the release value of the property in question. attorney’s fees and costs of suit against SOLID or. plus interest. against the spouses.R. 1976. STATE extra- judicially foreclosed the mortgaged properties. in case of its inability to pay.

Court of Appeals (CA) Facts: Frank Roa obtained a loan at an interest rate of 16. No. proposed to grant them a new loan of P500. the said house and lot were mortgaged to AIDC. 2002 Bank of the Philippine Islands Investment Corporation (BPIIC) v.R. at an interest rate of 20% per annum. had parted with the ownership of the thing sold. 133632 February 15. then he no longer had free disposal of that thing so as to be able to mortgage it again. which. alleged that they were not in arrears in their payment.000 to be applied to Roa’s debt and secured by the same property. Roa sold the house and lot to the private respondents ALS Management and Development Corporation (ALS) and Antonio Litonjua. In June 1984. Issue: Whether or not BPIIC may be held liable for moral and exemplary damages Ruling: Page 81 of 845 .25% per annum from Ayala Investment and Development Corporation (AIDC). for the construction of a house on his lot. the predecessor of BPIIC.000 balance of Roa’s indebtedness with AIDC. To secure the loan. on the other hand. in this case SOLID. BPIIC instituted foreclosure proceedings against ALS and Litonjua on the ground that they failed to pay the mortgage indebtedness. but in fact made an overpayment. They.for the reason that if the original owner. who paid P350. G.000 in cash and assumed the P500. however. Sometime in 1980.

they were irregular in the payment of their monthly amortization. It merely exercised its right under the mortgage contract because the private respondents were irregular in the payment of their monthly amortization. Lastly. It did not act maliciously when it initiated the foreclosure proceedings.000 should be given in recognition of their rights violated by BPIIC. Page 82 of 845 . As admitted by the private respondents themselves. because it insisted on the payment of the amortization on the loan even before it was released. The private respondents counter that BPIIC acted in bad faith.000 is sustained in favor of the private respondents as attorney’s fees since they were compelled to litigate. consequently. Further. for which an award of nominal damages in the amount of P25. the award of P50. Thus. BPIIC claims that it should not be held liable for moral and exemplary damages. the award of moral and exemplary damages should be ruled out. Such negligence resulted in damage to the private respondents. it did not make the corresponding deduction in the monthly amortization to conform to the actual amount of loan released. BPIIC cannot be declared in bad faith and. the Court finds BPIIC negligent in relying merely on the entries found in the deed of mortgage. However. without checking and correspondingly adjusting its records on the release.

975 to be paid within a period of ten (10) years at a monthly amortization of P1. No. executed a contract to sell involving a piece of land. Court of Appeals (CA) Facts: Hermogenes Fernando. and Carmelita Leaño.R. an interest of 18% per annum will be charged on the unpaid installments. G. the vendor. In the contract. 129018 November 15. the vendee.747. Should it expire without the installments for both months. The contract also provided for a grace period of one (1) month within which to make payments. Page 83 of 845 . Leaño bound herself to pay Fernando P10.30. with the balance of P96. 2001 Carmelita Leaño v.775 upon the signing of the contract.

the same contract provided that it shall be paid in monthly installments for which the corresponding penalty shall be imposed in case of default. 2001 Heirs of Luis Bacus v. G. 127695 December 3. delay by the other begins. In the case at bar. Leaño cannot ignore the monthly installments by claiming that the ten (10) years has not yet elapsed. No. Article 1169 of the Civil Code states that in reciprocal obligations. Fernando performed his part of the obligation by allowing Leaño to continue in the use and possession of the property. the Court agrees with the trial court that Leaño’s default in respect of the obligation could be compensated by the interest and surcharges imposed upon her under the contract. From the moment one of the parties fulfills his obligation.R. However.Issue: Whether or not Leaño should be held in default Ruling: While the contract provided that the total purchase price was payable within a period of ten (10) years. Court of Appeals (CA) Facts: Page 84 of 845 . neither party incurs in delay if the other does not comply or is not ready to comply in a proper manner with what is incumbent upon him.

115117 June 8. the spouses conveyed to them their lack of interest to exercise their option due to insufficiency of funds. The contract contained an option to buy clause.R. since the obligation was not yet due. in an option to buy. that they were willing and ready to purchase the property under the option to buy clause. In other words. the petitioners alleged that before Luis Bacus’ death. Issue: Whether or not the spouses Duray should be held in default when they did not deliver the purchase price or consign it in court on or before the expiration of the contract Ruling: Obligations under an option to buy are reciprocal: the performance of an obligation is conditioned on the simultaneous performance of the other. the spouses Duray informed one of the petitioners. No. In this case. Luis Bacus leased to the private respondent Faustino Duray a parcel of agricultural land.000 square meters of the property within five (5) years from a year after the effectivity of the contract. Thereafter. consignation in court of the purchase price was not yet required. and not deposited the money required by the Lupong Tagapamayapa. On the other hand. their obligation was to advise the petitioners of their decision and readiness to pay. Luis Bacus died. when the spouses Duray opted to buy the property. Consequently. the payment of the purchase price by the creditor is conditioned on the execution and delivery of the deed of sale by the debtor. Close to the expiration of the contract. They further alleged that the spouses presented a bank certification which cannot be deemed legal tender. 2000 Page 85 of 845 . Due to the refusal of the petitioners to sell the property. Duray filed a complaint for specific performance. under which the lessee had the exclusive and irrevocable right to buy 2. G.

As of July 30. Thus. the private respondent had delivered to the petitioner 1.875 reams. Accordingly. Page 86 of 845 .097 reams of printing paper. The transaction between the parties is a contract of sale whereby the private respondent. the private respondent did not violate the order agreement. Clearly. From June 5. as the buyer. in total disregard of their agreement. which. the petitioner encountered difficulties paying the private respondent the said amount.70. the private respondent obligates to deliver printing paper of various quantities subject to the petitioner’s corresponding obligation to pay. petitioner suffered actual damages and failed to realize expected profits. Reciprocal obligations are to be performed simultaneously. 1980 to July 23. Integrated Packaging Corp. the petitioner did not fulfill his side of the contract since his last payment in August 1981 covers only the materials of the delivery invoices dated September and October 1980. obligates itself to deliver the printing paper to the petitioner.450 reams of printing paper under specified schedule of delivery. so that the performance of one is conditioned upon the simultaneous performance of the other. in turn. the private respondent delivered to the petitioner various quantities of printing paper amounting to P766. on a maximum 90-day credit. that the private respondent failed to deliver the balance of the printing paper despite demand therefor. In its answer. hence. 1979.101. the private respondent made a formal demand upon the petitioner in a collection suit. the petitioner alleged that the private respondent was able to deliver only 1. vs. Issue: Whether or not the private respondent violated the order agreement Ruling: No. as the seller. However. 1981.097 reams of printing paper which was short of 2. Court of Appeals (CA) Facts: The petitioner and the private respondent executed an order agreement whereby the latter bound itself to deliver to the former 3. obligates itself to pay its purchase price.

advising him that he had thirty (30) days to produce the balance of P600. The plaintiff requested a 30-day extension. granted by Roberto but not by Gonzalo. Page 87 of 845 . through their counsel Roberto.00 under the Memorandum of Agreement and furnishing him a copy of the reconstituted title to the subject property. G. 137552 June 16. entered into a Contract to Sell with the plaintiff over the subject house and lot for P630. On November 15.the plaintiff filed the instant action for specific performance. the defendants told him that the subject property was no longer for sale and insisted on rescission. Thereafter. On September 18. No. Issue: Whether or not the defendants may rescind the contract Ruling: Admittedly. Gonzalo and Roberto Laforteza. 1989. The extension of thirty (30) days allegedly granted to him by Roberto was correctly found by the Court of Appeals to be ineffective inasmuch as the signature of Gonzalo did not appear thereon as required by the SPA.00. Machuca Facts: In the exercise of the Special Power of Attorney (SPA) executed by their co-heirs.000. However. 2000 Laforteza v. the defendant heirs. the plaintiff informed the defendant heirs. wrote a letter to the plaintiff. 1998. through their counsel. the failure of Machuca to pay the balance of the purchase price was a breach of the contract and a ground for rescission thereof.000. that he has the money.R.

but only for such substantial breach as would defeat the very object of the parties in making the agreement. neither party incurs in delay if the other party does not comply or is not ready to comply in a proper manner with what was incumbent upon him. rescission will still not prosper. i.e. The thirty-day delay in payment. Page 88 of 845 . Machuca could not therefore be considered in delay for in reciprocal obligations. Rescission of a contract will not be permitted for a casual breach. Even assuming for the sake of argument that the petitioners were ready to comply with their obligation. was caused by the Machuca’s justified but mistaken belief that an extension was granted to him. a mere casual breach. the delivery of the reconstituted title of the house and lot. the evidence reveals that the petitioners were not ready to comply with their obligation. However.

on June 9. BF Resort Village. 1998. to which Carin verbally consented on condition that Regala would clean the area affected. 2011 Regala v. Regala approached Carin for permission to bore a hole through a perimeter wall shared by both their respective properties. As Regala failed to address the problem. Sometime in May 1998. Carin Facts: Regala and Carin are adjacent neighbors at Spirig Street. Regala decided to renovate his one-storey residence by constructing a second floor. 188715 April 6. the respondent and his wife Marietta suffered from the dust and dirt which fell on their property. Carin filed a letter-complaint with the Office of the City Engineer and Building Official of Las Piñas City. Page 89 of 845 .R. G. Las Piñas City. No. In the course of the construction of the second floor. under the guise of merely building an extension.

Regala. they executed promissory notes payable in monthly installments and a chattel mortgage over the car as security for the notes. it is unconvinced that the damage inflicted upon his property was malicious or willful. Finally. cannot steer clear from any liability whatsoever. and after some negotiations. Necessarily. but the car was not released because of his refusal to sign the Joint Page 90 of 845 . Spouses Gueco Facts: The spouses Gueco obtained a loan from the International Corporate Bank (now the Union Bank of the Philippines) to purchase a car. the car loan was lowered.Issue: Whether or not the injuries sustained by Carin were done maliciously Ruling: Malice or bad faith implies a conscious and intentional design to do a wrongful act for a dishonest purpose. the Court is not inclined to award exemplary damages. however. an element crucial to merit an award of moral damages under Article 2220 of the Civil Code. Dr. G.R. 2001 International Corporate Bank (now Union Bank of the Philippines) v. which has been violated or invaded by the Regala may be recognized. Gueco delivered a manager’s check. While the Court harbors no doubt that the incidents which gave rise to this dispute have brought anxiety and anguish to Carin. They defaulted. 141968 February 12. No. In consideration thereof. Nominal damages may thus be adjudicated in order that Carin’s right.

G. The Court failed to see how the act of the International Corporate Bank in requiring the spouses Gueco to sign could constitute as fraud. Issue: Whether or not there was fraud on the part of the International Corporate Bank Ruling: Fraud has been defined as the deliberate intention to cause damage or prejudice. however. 139050 October 2. In fact. The whole point of the compromise agreement was in order that Dr. Gueco would pay his outstanding account and in return.Motion to Dismiss. Court of Tax Appeals (CTA) Page 91 of 845 . 2001 Republic of the Philippines v. counterclaims or suits for damages. the motion was for the benefit of Dr. the International Corporate Bank would return the car and drop the case for money and replevin before the Metropolitan Trial Court. No. The International Corporate Bank. Gueco. insisted that it is standard operating procedure (SOP) in their bank to effect a compromise and to preclude future filing of claims.R.

R. No. Inc. It must be actual. Fraud must be proved to justify forfeiture. on the other hand. The conclusion of the appellate court.. maintains that there has only been an inadvertent error and not an intentional wrongful declaration by the shipper to evade payment of any tax due.. amounting to intentional wrong-doing with the clear purpose of avoiding the tax. FIL-JAPAN..Facts: On December 12. 146173 Page 92 of 845 . Inc. which will not deprive the government of its right to collect the proper tax. The MICP indorsed the document to the Customs Intelligence Investigation Services (CIIS). AGFHA. to that of AGFHA. The shipping agent. could not be located in its given address and was thus suspected to be a fictitious firm. can hardly be overturned by the Court. Forfeiture proceedings under Section 2530(f) and (l) (3-5) of the Tariff and Customs Code were initiated.. The case involved an honest mistake. 1992. Inc. Inc. Inc. not even directly attributable to AGFHA. G. a shipment of textile gray cloth arrived at the Manila International Container Port (MICP). requested for an amendment of the Inward Foreign Manifest so as to correct the name of the consignee from that of GQ GARMENTS. which placed the subject shipment under Hold Order on the ground that GQ GARMENTS. Issue: Whether or not the private respondent AGFHA. is guilty of fraud in relation to the subject shipment Ruling: The petitioner asserts that all the requisites for forfeiture proceedings under the Tariff and Customs Code are present. being consistent with the evidence on record and not contrary to law and jurisprudence. Inc.

and implementing training programs and periodic seminars on road safety and traffic efficiency for her employees. 1992. Venturina along the northbound lane of Epifanio delos Santos Avenue (EDSA) when it bumped the pedestrian Zuñiga. theorizing that he bumped into her bus. 2003 Yambao v. Yambao also failed to present convincing proof that she went to the extent of verifying Venturina’s qualifications. both in the selection and supervision of Venturina. The private respondents. Herminigildo Zuñiga Facts: In the afternoon of May 6. She further alleged that she was not liable for any damages because as an employer. The complaint alleged that Venturina drove the bus in a reckless. Issue: Whether or not Yambao exercised the diligence of a good father of a family in the selection and supervision of her Venturina thus absolving her from any liability Ruling: Her allegation that before she hired him. Yambao denied the allegations. without due regard to public safety. December 11. Hence. Venturina applied in January 1992 and submitted the said requirements only on May 6. she exercised the proper diligence of a good father of a family. trying to shift the blame to Zuñiga. and driving history. in violation of traffic rules and regulations. while avoiding an unidentified woman chasing him. he was required to submit his driver’s license and clearances is worthless. careless and imprudent manner. 1992. in view of her failure to offer in evidence certified true copies. petitioner contradicted herself. In her Answer. or on the very day of the fatal accident itself. Moreover. filed a Complaint against Yambao and Venturina for damages. thus resulting in the Zuñiga’s premature death. the bus owned by the petitioner Yambao was being driven by her employee Ceferino G. Yambao Page 93 of 845 . the heirs of the victim. safety record.

Thus. 143008 June 10. 2002 Smith Bell Dodwell v. Borja hurriedly jumped over board to save himself. Seeing the fire. a sudden explosion occurred setting the vessels afire. After weeks at the hospital.cannot claim exemption from any liability arising from the recklessness or negligence of Venturina. ran outside to check what happened. Borja. another explosion was heard. G. His attempts to shift the blame on ITTC were all for naught. Catalino Borja Facts: Dodwell filed a written request with the Bureau of Customs (BOC) for the attendance of its inspection team on vessel M/T King Family due to arrive at Manila on September 24. No. there is nothing in the record to support petitioner’s contention. 1987. In the morning of that day. the water was likewise on fire due mainly to the spilled chemicals. Borja was diagnosed to be permanently disabled due to the incident. However. while the vessel was unloading chemicals unto two (2) barges owned by the respondent ITTC. he made demands against Dodwell and ITTC for damages caused by the explosion. inside the cabin preparing reports. Despite the tremendous heat. However.R. Upon hearing the explosion. if any. Again. Issue: Who. Borja swam his way until he was rescued by the people living in the squatters’ area and sent to San Juan De Dios Hospital. Page 94 of 845 . is liable for Borja’s injuries? Ruling: Both the trial and the appellate courts ruled that the explosion and the fire had originated from Dodwell’s vessel. both denied liabilities and attributed to each other negligence.

Knowing that the vessel was carrying dangerous chemicals.R.634. 139130 November 27. (b) fault or negligence of the defendant.34. Ilusorio entrusted to his secretary Katherine E. with an aggregate amount of P119. He did not bother to check his statement of account until a business partner apprised him that he saw Eugenio use his credit cards. and instituted a criminal action for estafa thru falsification against her. The three elements of quasi-delict are: (a) damages suffered by the plaintiff. No. and (c) the connection of cause and effect between the fault or negligence of the defendant and the damages inflicted on the plaintiff. Ilusorio then requested the respondent bank to restore to his account the value of the checks which were wrongfully encashed but respondent bank refused. Issue: Is Manila Bank liable for damages for its negligence in failing to detect the discrepant checks? Ruling: Page 95 of 845 . Hence. G. Running about twenty (20) corporations and going out of the country a number of times. 2002 Ramon K. All these elements were established in this case. Court of Appeals (CA) Facts: Ilusorio is a prominent businessman and a depositor in good standing of the respondent bank. petitioner filed the instant case. Eugenio was able to encash and deposit to her personal account about seventeen (17) checks drawn against Ilusorio’s account at the respondent bank. Ilusorio fired her immediately. the Manila Banking Corporation. Eugenio his credit cards and checkbook with blank checks. Ilusorio v. Dodwell was negligent in not taking all the necessary precautions in transporting the cargo.

who was negligent. As borne by the records. guided by those considerations which ordinarily regulate the conduct of human affairs. and when in doubt. such as by referring to a more experienced verifier for further verification. Manila Bank employees exercised due diligence in cashing the checks. Negligence is the omission to do something which a reasonable man. it was Illusorio. It is only after taking such precautionary measures that the subject checks were given to the teller for payment. Its verifiers first verified the drawer’s signatures thereon as against his specimen signature cards. would do. not the bank. or the doing of something which a prudent and reasonable man would do. the verifier went further. Page 96 of 845 . In some instances the verifier made a confirmation by calling the depositor by phone. Ilusorio’s contention that Manila Bank was remiss in the exercise of its duty as drawee lacks factual basis.

Davao Light and Power Co. v. (DLPC) Facts: Davao Light and Power Co.02 and warning that if not paid. as of June 13. Inc.. Inc. informing it that.R. Inc..111. 160959 April 3. G. Page 97 of 845 .. (DLPC) sent a Notice of Disconnection to Diaz and Co. 2007 Diaz and Co. Inc. 1983.. the hotel’s unpaid electric consumption bill amounted to P190. DLPC would be impelled to discontinue its service. No.

DLPC and Mendiola executed a service contract for electricity service. and a contract was later executed between the parties. Since Diaz and Co. 1983. Inc. Inc. informed that it had assumed the electrical bills of NFA/KADIWA and requested that the monthly bills/statements be sent to it. Because he needed more electricity than what could be provided by the existing electrical wirings. its right to the connection would be transferred to Diaz. DLPC then filed a complaint for collection before. the filing of a damage suit against him before the RTC of Cebu City which was dismissed and the filing of another damage suit before the same Cebu RTC which is still pending. NFA/KADIWA also applied for electricity service with DLPC. In the end. in 1984. plaintiff asks for damages for defendant’s alleged malicious prosecution of a criminal case of theft of electricity against him.. and NFA/KADIWA vacated the Dona Segunda Building. The portion of the building formerly leased by NFA/KADIWA was leased to Matias Mendiola. Ruling: Page 98 of 845 . In its reply. DLPC rejected the request and declared that it was not aware that Diaz and Co.020. DLPC was informed that the light and power connection of NFA/KADIWA would be left behind. Meter No.. Inc. Meanwhile. 401 as amended after dismissal of the theft case. 36510 was disconnected on July 29. had refunded the NFA/KADIWA its P1..00 deposit.. The Kadiwa Center IV closed. the National Food Authority (NFA) established its KADIWA and leased a portion of the ground floor of the Imperial Hotel Building from Diaz and Co. Damages are also being sought for defendant’s removal of Electric Meter. Inc. Diaz and Co.D. for plaintiff’s filing of a charge of violation of P. ignored the letter. Issue: Whether or not there was malicious prosecution in this case.

593 July/1988 for theft of electricity. civil suit or other legal proceeding has been instituted maliciously and without probable cause. and that the action finally terminated with an acquittal. Malicious prosecution has been defined as an action for damages brought by or against whom a criminal prosecution. (2) that in bringing the action. Blg. this Court had already stressed that “one cannot be held liable in damages for maliciously instituting a prosecution where he acted with probable cause. No. First. Said requisites are not attendant in this case. 876. Esteban. the following requisites must be proven by petitioner: (1) the fact of prosecution and the further fact that the defendant (respondent) was himself the prosecutor. Although respondent DLPC initiated before the prosecutor’s office Inv. after the termination of such prosecution. Second. The cases were eventually dropped or dismissed before they could be filed in court. There was none. as amended by B.” Page 99 of 845 .S. both actions could not end in an acquittal. 92- 4590 for Violation of P. and (3) that the prosecutor was actuated or impelled by legal malice. and respondent DLPC cannot be faulted for filing them. that is. Ultimately. the prosecutor acted without probable cause.D. The events which led to the filing of the complaints are undisputed. It cannot be concluded that respondent DLPC acted without probable cause when it instituted the actions. In the early case of Buchanan v. Sheet No. or other proceeding in favor of the defendant therein. and I. It is an established rule that in order for malicious prosecution to prosper.P. no information was ever filed in court. 401. suit. by improper or sinister motive.

Rodencio. in August 1993. 73251). when Nimpha inquired from the Register of Deeds. They agreed that. However. would be foreclosed. G. the lot was surveyed and separate titles were issued by the Register of Deeds of Sta. Aurea alleged that Rodencio asked her to sign a blank paper on the pretext that it would be used in the redemption of the mortgaged property. Aurea averred that she never sold any portion of her property to Page 100 of 845 . otherwise their residential house and lot. 156339 October 6. T-32810. pursuant to a deed of sale apparently executed by Aurea in favor of Jovencio. Aurea signed the blank paper without further inquiry because she trusted her nephew. Rodencio and De Ramos Facts: In November 1971. Thereafter. Jovencio acceded to the request. As agreed upon. No. they heard nothing from Rodencio and this prompted Nimpha Yasoa Bondoc to confront Rodencio but she was told that the title was still with the Register of Deeds. Cruz. Aurea executed a deed of absolute sale in favor of Jovencio over half of the lot consisting of 123 square meters. 1971. 2004 Violeta Yasoa v. Aurea filed an estafa complaint against brothers Jovencio and Rodencio de Ramos on the ground that she was deceived by them when she asked for their assistance in 1971 concerning her mortgaged property. In her complaint. On December 29. Saturnino. Twenty-two years later. went to the house of Jovencio de Ramos to ask for financial assistance in paying their loans to Philippine National Bank (PNB). Jovencio paid Aureas bank loan. Aurea Yasoa and her son. Inasmuch as Aurea was his aunt. 73252) and Jovencio (TCT No.R. covered by TCT No. half of Yasoas subject property would be sold to him. Laguna in the names of Aurea (TCT No. Thereafter. she was shocked to find out that the lot had been divided into two. upon payment by Jovencio of the loan to PNB.

suit. Concededly. there is reason to believe that a malicious intent was behind the filing of the complaint for estafa against respondents. 1994. On account of this dismissal. Cruz. or other legal proceeding has been instituted maliciously and without probable cause. Aurea was thus forced to seek the advice of Judge Enrique Almario. Branch 91. petitioners are liable for malicious prosecution. They alleged that the filing of the estafa complaint against them was done with malice and it caused irreparable injury to their reputation. there must be proof that the prosecution was prompted by a sinister design to vex or humiliate a person. and that it was initiated deliberately by the defendant knowing that his charges were false and groundless. who suggested filing a complaint for estafa. Assistant Provincial Prosecutor Rodrigo B. In this case. Laguna. Jovencio and Rodencio filed a complaint for damages on the ground of malicious prosecution with the Regional Trial Court of Sta. as Aurea knew fully well that she had already sold half of the property to Jovencio. The records show that the sale of the property was Page 101 of 845 . civil suit. another relative. or other proceeding in favor of the defendant therein. the mere act of submitting a case to the authorities for prosecution does not make one liable for malicious prosecution. and that. in any event. however. In this jurisdiction. To constitute malicious prosecution. after the termination of such prosecution. On February 21. Issue: Whether or not the filing of the criminal complaint for estafa constituted malicious prosecution Ruling: We agree with the appellate court that the remedy availed of by petitioners was inappropriate as Rule 65 of the Rules of Court cannot be a substitute for a lost appeal. the term malicious prosecution has been defined as an action for damages brought by one against whom a criminal prosecution.[2] which was docketed as Civil Case No. Zayenis dismissed the criminal complaint for estafa for lack of evidence.Jovencio and never executed a deed of sale. SC-3230.

Separate titles were then issued in the names of Aurea Yasoa (TCT No. Petitioners were completely aware that Jovencio was the rightful owner of the lot covered by TCT No. Furthermore. when Aurea borrowed money from the Rural Bank of Lumban in 1973 and the PNB in 1979. After the execution of the deed of sale. Page 102 of 845 . 73252) and Jovencio de Ramos (TCT No. 73251. no other evidence was presented by them to substantiate their claim. Also.evidenced by a deed of sale duly notarized and registered with the local Register of Deeds. it was only in 1993 when petitioners decided to file the estafa complaint against respondents. other than petitioners bare allegations. 73251). All these pieces of evidence indicate that Aurea had long acknowledged Jovencios ownership of half of the property.[7] These two elements are present in the present controversy. If petitioners had honestly believed that they still owned the entire property. requires the elements of (1) malice and (2) absence of probable cause. That there was no probable cause at all for the filing of the estafa case against respondents led to the dismissal of the charges filed by petitioners with the Provincial Prosecutors Office in Siniloan. it would not have taken them 22 years to question Jovencios ownership of half of the property. Since 1973. Aurea even requested Jovencio to use his portion as bond for the temporary release of her son who was charged with malicious mischief. Jovencio had been paying the realty taxes of the portion registered in his name. both in criminal and civil cases. the property was surveyed and divided into two portions. Laguna. In 1974. clearly signifying that they were impelled by malice and avarice in bringing the unfounded action. The only conclusion that can be drawn from the circumstances is that Aurea knew all along that she was no longer the owner of Jovencios portion after having sold it to him way back in 1971. only her portion covered by TCT No. 73252 was mortgaged. Malicious prosecution. Likewise.

The shipment. Nos.400. tires and batteries.368 or P29. Inc Facts: On April 15. Page 103 of 845 . 181163. without engine. Philam Insurance Co. was insured with Philam against all risks under the marine Policy no. which had a declared value of US$81.000. 708-8006717-4.R. Nichimen Corporation shipped to Universal Motors Corporation 219 packages containing 120 units of brand new Nissan Pickup Truck Double Cab 4×2 model. 1995.. and 181319 July 24. G. (ATI) v. Inc. 2013 Asian Terminals. 181262. on board the vessel S/S Calayan Iris from Japan to Manila.

before the Regional Trial Court of Makati City. Revilla Customs Brokerage. Revilla Customs Brokerage. The Turn Over Survey of bad order cargoes dated April 21.84 against Westwind.963.F. The Court holds that petitioner Philam has adequately established the basis of its claim against petitioners ATI and Westwind. Issue: Whether or not Philam may claim against Westwind and ATI as a subrogee Ruling: YES. the authorized broker of Universal Motors. 5. Revilla Customs Brokerage. When Universal Motors’ demands remained unheeded. Inc.F. Universal Motors declared them a total loss. Owing to the extent of the damage to said cargoes. Inc. Universal Motors issued a Subrogation Receipt dated November 15. ATI and R. as being dented and broken. 1995. labelled 03-245-42K/1 and 03/237/7CK/2. On January 18. The carrying vessel arrived at the port of manila on April 20. filed a Complaint for damages against Westwind. it was found that the package marked as 03-245-42K/1 was in bad order. Philam.15 by Philam. as insurer. the shipment was withdrawn by R. pursuant to the Subrogation receipt executed by the Page 104 of 845 .. was subrogated to the rights of the consignee. Philam. 1996. Accordingly. and when the shipment was unloaded by the staff of ATI. On August 4. 1995 identified two packages. 1995. Upon the request of Universal Motors. On May 11. a bad order survey was conducted on the cargoes and it was found that one Frame Axle Sub without LWR was deeply dented on the buffle plate while six Frame Assembly with Bush were deformed and misaligned. Thereafter.957. Universal Motors Corporation. and delivered to the latter’s warehouse in Mandaluyong City. The trial court rendered judgment in favour of Philam which ruling was affirmed by the Court of Appeals modifying the amount to be paid by Westwind and ATI.F. Universal Motors filed a formal claim for damages in the amount of P643. 1995. 1995 in favor of Philam. Inc. it sought reparation from and was compensated in the sum of P633. as subrogee of Universal Motors. ATI and R. the cargoes were stored for temporary safekeeping inside CFS Warehouse in Pier No.

Petitioner Philam’s action finds support in Article 2207 of the Civil Code which provides that if the plaintiff’s property has been insured.latter in favour of the former. the insurance company shall be subrogated to the rights of the insured against the wrongdoer or the person who has violated the contract. Page 105 of 845 . and he has received indemnity from the insurance company for the injury or loss arising out of the wrong or breach of contract complained of. The right of subrogation accrues simply upon payment by the insurance company of the insurance claim.

398 instructing the National Power Corporation (NPC) to build the Agus Regulation Dam at the mouth of Agus River in Lanao del Sur. 124378 March 8. at a normal maximum water level of Lake Lanao at 702 meters elevation. all the improvements were washed away when the water level of the lake escalated and the subject lakeshore area was flooded. The private respondents theorized that NPC failed to increase the outflow of water even as the water level of the lake rose due to the heavy rains. 398 clothes the NPC with the power to build the Agus Regulation Dam and to operate it for the purpose of generating energy. and (2) to build benchmarks to warn the inhabitants in the area that cultivation of land below said elevation is forbidden. the Office of the President of the Philippines issued Memorandum Order No. Issue: Whether or not the Court of Appeals (CA) erred in affirming the trial court’s verdict that the NPC was legally answerable for the damages endured by the private respondents Ruling: MO No. 2005 National Power Corporation (NPC) v. Hadji Ali Langco and Diamael Pangcatan own fishponds along the Lake Lanao shore. The private respondents Hadji Abdul Carim Abdullah. Twin to such power are the duties: (1) to maintain the normal maximum lake elevation at 702 meters. No. Court of Appeals (CA) Facts: On November 15. Pursuant thereto. Caris Abdullah. G. 1973.R. Page 106 of 845 . the petitioner built and operated the said dam in 1978. In October and November 1986.

NPC has the duty to erect and maintain the benchmarks to warn the owners of the neighboring properties not to build fishponds below these marks. Due to NPC’s negligence in the performance of its duties. without such benchmarks. the NPC ought to release more water to the Agus River to avoid flooding. are indeed below the prescribed maximum level of elevation. echoing the trial court. NPC has no way of telling if the fishponds. even assuming that the fishponds were erected below the 702-meter level. Page 107 of 845 . observed that when the water level rises due to the rainy season. Conversely. the inhabitants in said areas are clueless whether or not their improvements are within the prohibited area. subject matter of the present controversy. Without such points of reference. it shall be held liable for the resulting damages suffered by private respondents. the CA. With respect to its duty to maintain the normal maximum level of the lake at 702 meters. Consequently.

Before the announcement of the third round winners. the management received reports that as early as the first round of the contest. the respondent had a second run of the contest from April 26 to July 4. some branches cheated. Abing worked as branch managers of the Wendy's food chains. Immediately Page 108 of 845 . 2006 Annabelle Muaje-Tuazon v. 1999. Because of its success. Tuazon and Almer R. G. An internal investigation ensued and the petitioners were summoned to the main office regarding the reported anomaly. In the said restaurant’s “Biggie Size It! Crew Challenge" promotion contest. No. respectively. the branches they managed won first and second places.R. 162447 December 27. Wenphil Facts: The petitioners Annabelle M.

the tape receipts presented by Wenphil showed that there were anomalies committed in the branches they managed. 164349 January 31. as in the case of petitioners. they may be held liable for negligence in the performance of their managerial duties. in writing. assign or discipline employees. and they were dismissed. transfer. a managerial employee as one who is vested with powers or prerogatives to lay down and execute management policies and/or hire. G. No. as managerial employees. the petitioners were notified.R. lay-off. In the present case. suspend. On the principle of respondeat superior or command responsibility alone.thereafter. Grace sent another Page 109 of 845 . Her daughter Grace immediately went to the Sorsogon Branch of RCPI whose services she engaged to send a telegram to her sister Zenaida. Three (3) days without a response received from Zenaida. Additionally. some employees declared in their affidavits that the cheating was actually the idea of the managers. recall. of hearings and of their immediate suspension. Consequently. unless they can positively show that they were not involved. Verchez Facts: Editha Verchez was confined in the hospital due to an ailment. the mere existence of grounds for the loss of trust and confidence justify their dismissal. Issue: Whether or not Wenphil is guilty of illegal suspension and dismissal in the case at bench Ruling: Under Article 212 (m) of the Labor Code. discharge. 2006 RCPI v.

Zenaida with her husband. will not permit a party to be set free from liability for any kind of misperformance of the contractual undertaking or a contravention of the tenor thereof. the mere proof of the existence of the contract and the failure of its compliance justify. left for Sorsogon. this time thru the JRS Delivery Service. prima facie. 2004 Victory Liner. reprimanding her for not sending any financial aid. those who in the performance of their obligations are guilty of fraud. Issue: Whether or not RCPI is negligent in the performance of its obligation Ruling: Under Article 1170 of the Civil Code. Gammad Page 110 of 845 . or delay. are liable for damages. In culpa contractual. and those who in any manner contravene the tenor thereof. The law. No. Inc. G.R. negligence.letter. Immediately after she received the letter. a corresponding right of relief. recognizing the obligatory force of contracts. Considering the public utility of the business and its contractual obligation to transmit messages. The telegram was finally delivered to Zenaida twenty-five (25) days later. RCPI should exercise due diligence to ascertain that messages are delivered to the persons at the given address and provide a system whereby in cases of undelivered messages the sender is given notice of non-delivery. 159636 November 25. v.

should be held liable for breach of the contract of carriage. Unless the presumption is rebutted. claimed that it was purely accidental and that it has always exercised extraordinary diligence in its fifty (50) years of operation. the bus running at a high speed fell on a ravine which resulted in her death and physical injuries to other passengers. RULING: Yes.Facts: Marie Grace Gammad was on board an air-conditioned Victory Liner bus bound for Tuguegarao. Cagayan from Manila. with due regard to all the circumstances. Inc. the Victory Liner. Page 111 of 845 . it is presumed that the common carrier was at fault or negligent when a passenger dies or is injured. the respondent heirs of the deceased filed a complaint for damages arising from culpa contractual against the Victory Liner. 1996...m. Issue: Whether or not the Victory Liner. In its answer. On May 14. using the utmost diligence of very cautious persons. Inc. Inc. At about 3:00 a. This statutory presumption may only be overcome by evidence that the carrier exercised extraordinary diligence. In a contract of carriage. A common carrier is bound to carry its passengers safely as far as human care and foresight can provide. the court need not even make an express finding of fault or negligence on the part of the common carrier.

resulting in damage to the cargoes. the value of the covered cargoes.P. paid to Concepcion Industries. sought reimbursement of the amount it had paid. Inc. being the subrogee of the rights and interests of Concepcion Industries. Inc. causing it to fall into a deep canal. 2002 FGU Insurance Corp.. Sarmiento Trucking Corporation (GPS) undertook to deliver refrigerators aboard one of its Isuzu trucks. GPS recognizes the existence of a contract of carriage between it and FGU.P. G. (FGU) vs. Since the GPS failed to heed the claim. driven by Lambert Eroles.. G. Issue: Whether or not the GPS is liable for damages arising from negligence Ruling: In culpa contractual. an insurer of the shipment.R. who asserted that that the cause of damage was purely accidental. 141910 August 6. in turn. FGU Insurance Corporation (FGU). FGU. Inc. the mere proof of the existence of the contract and the failure of its compliance justify a corresponding right of relief. upon which the action of FGU rests as the subrogee of Concepcion Industries. and admits that the cargoes have been lost or damaged while in its custody. No. Sarmiento Trucking Corporation (GPS) Facts: The G. Page 112 of 845 . from the plant site of Concepcion Industries. FGU filed a complaint for damages and breach of contract of carriage against GPS and Eroles. While the truck was traversing the north diversion road along McArthur Highway in Tarlac. Inc. to the Central Luzon Appliances in Dagupan City.. it collided with an unidentified truck.

His widow and their children. A misunderstanding between them apparently ensued that led to a fist fight. No. Eroles. is liable for damages in relation to the death of Navidad? Ruling: Page 113 of 845 . on the other hand. The moment Navidad fell. the Metro Transit Organization. 145804 February 6. G. FGU’s civil action against Eroles can only be based on culpa aquiliana. in its answer. While standing on the platform near the tracks. filed a complaint for damages against Escartin. without concrete proof of his negligence or fault. Prudent. Nicanor Navidad. him not being a party to the contract of carriage. A contract can only bind the parties who have entered into it or their successors who have assumed their personality or their juridical position. and Prudent for the death of Navidad. if any. The LRTA and Roman filed a counterclaim against Navidad and a cross-claim against Escartin and Prudent. 1993. denied liability and averred that it had exercised due diligence in the selection and supervision of its security guards. Issue: Who. entered the EDSA LRT station. operated by the petitioner Rodolfo Roman. the LRTA. Navidad was approached by the security guard assigned Junelito Escartin. may not himself be ordered to pay FGU. an LRT train. was coming in. Inc. Navidad Facts: In the evening of October 14. Roman. 2003 LRTA vs.R. then drunk. killing Navidad instantaneously. (Metro Transit).

00 in favor of Ekman and Company. "is to allow it to get away with its unjust enrichment at the expense of the Far East Bank. The foundation of LRTA’s liability is the contract of carriage by reason of its failure to exercise the high diligence required of the common carrier. Far East Bank & Trust Co. v. no showing that the petitioner Roman himself is guilty of any culpability. to expire on February 15. a carrier may choose to hire its own employees or avail itself of the services of an outsider or an independent firm. The Court is concluded by the factual finding of the Court of Appeals (CA) that there is nothing to link Prudent to the death of Navidad.000. Inc. 1979. he must also be absolved from liability." the Court of Appeals (CA) explained. Inc. To absolve Rodzssen Supply from liability for the price of the same. In either case. the common carrier is not relieved of its responsibilities under the contract of carriage.R.. for the purchase from the latter of five (5) units of hydraulic loaders. No. for the reason that the negligence of its employee Escartin has not been duly proven. similarly. In the discharge of its commitment to ensure the safety of passengers. There being. 109087 May 9." Issue: Whether or not Rodzssen Supply is liable to the Far East Bank and Trust Page 114 of 845 . 2001 Rodzssen Supply Co. G. Facts: Rodzssen Supply opened with the Far East Bank and Trust a 30-day domestic letter of credit in the amount of P190. Rodzssen Supply refused to pay without any valid reason.

only because it was bound to accept it under the company’s trust receipt arrangement with the Far East Bank and Trust. GR.000 plus interest thereon at the rate of 6 percent per annum computed from April 7. as in this case. Significant too is the fact that it formalized its offer to return the two pieces of equipment only after respondent’s demand for payment. for which he was given an incomplete grade.Ruling: Rodzssen Supply claims that it accepted the late delivery of the equipment. which was approved by Dean Celedonio Tiongson. the Court notes its unexplained inaction for almost four (4) years with regard to the status of the ownership or possession of the loaders. 1988. their rights and obligations may be determined equitably under the law proscribing unjust enrichment. No. Rodzssen Supply is ordered to reimburse Far East Bank and Trust Co. After the judgment becomes final. When both parties to a transaction are mutually negligent in the performance of their obligations. he took the examination and on May 30. 2000 University of the East v. He enrolled for the second semester. Granting that it was bound under such arrangement to accept. 132344 February 17. the fault of one cancels the negligence of the other. Jader Facts: Jader was enrolled in the University of the East College of Law from 1984 to 1988. P76. 1983. On March 28. Inc. Professor Carlos Ortega Page 115 of 845 . and. he failed to take the regular final examinations in Practice Court I. after payment of the required fee. 1988. In the first semester of his last year. the interest shall be 12 percent per annum. which came more than three years after it accepted delivery.. 1988. and on February 1. he filed an application for the removal of the incomplete grade given him by Professor Carlos Ortega.

submitted his grade of five (5). He took a leave of absence without pay from his job from April 20. the Dean and the Faculty Members met to deliberate on who among the fourth year students should be allowed to graduate. a contract of education is entered into between the said institution and the student. during the program of which he went up the stage when his name was called. Issue: Whether or not the University of the East is liable for damages under culpa contractual Ruling: When a student is enrolled in any institution. such as the professors with respect to the status or result of his grades. although nothing prevents either professors or students from sharing with each other such information. The professors. 1988 and enrolled at the pre-bar review class in Far Eastern University. the latter is not duty- bound to deal with the former's agents. 1988 to September 30. U. He attended the investiture ceremonies at F.. Since the contracting parties are the school and the student. the school has the obligation to promptly inform the student of any problem involving the latter's grades and performance and also most importantly. Recto Campus. The Court takes judicial notice of the traditional practice in educational institutions wherein the professor directly furnishes his/her students their grades. In the meantime. teachers or instructors hired by the school are considered merely as agents and administrators tasked to perform the school's commitment under the contract. he dropped his review class and was not able to take the bar examination. It is the contractual obligation of the school to timely inform and furnish sufficient notice and information to each and every student as to whether he or she had already complied with all the requirements for the conferment of a degree or whether they would be included among those who will graduate. of the procedures for remedying the same. Page 116 of 845 .E. dela Cruz Quadrangle. Having learned of the deficiency. Jader's name appeared in the Tentative List of Candidates for graduation for the Degree of Bachelor of Laws (LL. Prior or subsequent to the ceremony.B) as of Second Semester (1987-1988).

cannot be said to have acted in good faith.00). with legal interest of 6% per annum computed from the date of filing of the complaint until fully paid. and the costs of the suit.00) as attorney's fees. particularly at a time when he had already commenced preparing for the bar exams. the University of the East is ordered to pay Jader the sum of thirty-five thousand four hundred seventy pesos (P35. G. Wherefore. No.R. The award of moral damages is deleted. 2000 Bayne Adjusters and Surveyors Inc.000.470. the amount of five thousand pesos (P5. in belatedly informing Jader of the result of the removal examination. The University of the East. v. 116332 January 25. Court of Appeals (CA Page 117 of 845 .

When the barge men arrived in the early evening. the pumping operation commenced at 2020 hours of June 27. and it was agreed that pumping operation would resume the following day at 1030 hours. Inc. but he could not find them. is liable for the damages incurred arising from culpa contractual Page 118 of 845 . they found the valves of the tank open and resumed pumping operation in the absence of any instruction from the surveyor to the contrary. 1987. so he also left.88. 1987. not a liquid bulk surveyor.Facts: In May 1987.. When the cargo arrived in Manila. Fontillas tried to inform both the barge men and the assigned surveyor of the scheduled resumption of pumping operation.. Both the trial court and the appellate court found the Bayne Adjusters and Surveyors Inc. The said liquid cargo was insured with herein private respondent Insurance Company of North America against all risk for its full value. The following morning it was found that an undetermined amount of alkyl benzene was lost due to overflow. the surveyor left the premises without leaving any instruction with the barge foreman what to do in the event that the pump becomes operational again. The Bayne Adjusters and Surveyors Inc. imported alkyl benzene from Japan valued at US$255. Colgate Palmolive Philippine. Issue: Whether or not the Bayne Adjusters and Surveyors Inc. was contracted by the consignee to supervise the proper handling and discharge of the cargo from the chemical tanker to a receiving barge. When it broke down once again at about 1300 hours of June 29. a cargo surveyor. sent Amado Fontillas. The Bayne Adjusters and Surveyors Inc. which was interrupted several times due to mechanical problems with the pump.802.’s failure to comply with the Standard Operating Procedure for Handling Liquid Bulk Cargo when pumping operation is suspended as the proximate cause of the loss.

Ruling: The fault or negligence of the obligor in the performance of the obligation renders him liable for damages for the resulting loss suffered by the obligee. Under the Standard Operating Procedure. Both parties agree that the Bayne Adjusters and Surveyors Inc. the surveyor is required to seal all covers to avoid unsupervised discharge of the liquid cargo and to avert the contamination or loss thereof. Page 119 of 845 . is bound to supervise the proper discharge of the liquid cargo from the chemical tanker to the receiving barge and from the latter to the consignee’s shore tank. It consists of his failure to exercise due care and prudence as the nature of the obligation so demands.

Jusep ordered a full stop of the vessel. Inc.. Jusep of the aforementioned ship received a report from his radio head operator in Japan that a typhoon was going to hit Manila in about eight (8) hours. Capt. Inc. 1994. Jusep tried to seek shelter at the North Harbor. 1994. Capt. but when the engine was re-started and the ship hit the deflector wall constructed by C & A Consortium. Jusep was negligent Page 120 of 845 . anchored at the Navotas Fish Port for the purpose of installing a cargo pump and clearing the cargo oil tank. v. 156034 October 1. C & A Consortium Facts: On October 9. He succeeded in avoiding collision. Captain Demetrio T. No. 1994. He decided to drop anchor four (4) miles away from a power barge of the National Power Corporation (NAPOCOR) when the waves were already reaching eight (8) to ten (10) feet high. At around midnight of October 20. 2003 Delsan Transport Lines. G.R. At approximately 8:35 in the morning of October 21. a ship owned and operated by the Delsan Transport Lines. Issues: Whether or not Capt. but could not because it was already congested. M/V Delsan Express.

is solidarily liable under for the quasi- delict committed by Capt. thinking that the typhoon might change direction. If yes. Inc. Jusep. vicariously liable for the negligent act of Capt. Capt. it was not very cloudy and there was no weather disturbance yet. according to him. pursuant to Article 2180 of the Civil Code. whether or not Delsan Transport Lines. It is not the speculative success or failure of a decision that determines the existence of negligence in the present case. but the failure to take immediate and appropriate action under the circumstances. Jusep. Jusep was negligent. Jusep Ruling: The Court of Appeals (CA) was correct in holding that Capt. To avoid liability for a quasi-delict committed by his employee. the Court finds Delsan Transport Lines. an employer must overcome the presumption by presenting convincing proof that he exercised the care and diligence of a good father of a family in the selection and supervision of his employee. Page 121 of 845 . did not transfer as soon as the sun rose because. Inc. Anent the second issue.

Court of Appeals (CA) Facts: Page 122 of 845 . 2001 PCIB v. G.R. 121413 January 29. No.

114. The aforesaid check was deposited with the defendant IBAA (now PCIBank) and was subsequently cleared at the Central Bank.746.41 was duly received by the Bureau of Internal Revenue. Plaintiff demanded defendant to reimburse him of the said amount paid for the second time to BIR but the latter refused. upon demand of the Bureau and/or Commissioner of Internal Revenue.114.114. representing payment of plaintiff’s percentage tax for the third quarter of 1977. assuming. The Acting Commissioner of Internal Revenue addressed to the plaintiff that its check in the amount of P4. the latter’s negligence is imputed to his superior and will defeat the superior’s action against the third person.746. the plaintiff was compelled to make a second payment to the Bureau of Internal Revenue of its percentage/manufacturers’ sales taxes for the third quarter of 1977 and that said second payment of plaintiff in the amount of P4.41. SN-04867 in the amount of P4.41.41 was not paid to the government or its authorized agent and instead encashed by unauthorized persons. Upon advice of the plaintiff’s lawyers. The plaintiff Ford drew and issued its Citibank Check No. Issue: Whether or not the PCIB is liable to Ford Philippines for the amount of several checks allegedly embezzled by a syndicate group Ruling: The general rule is that if the master is injured by the negligence of a third person and by the concurring contributory negligence of his own servant or agent. Upon presentment with the defendant Citibank. The proceeds of the same Citibank check of the plaintiff was never paid to or received by the payee thereof. of Page 123 of 845 . As a consequence. hence. the Commissioner of Internal Revenue.746. in favor of the Commissioner of Internal Revenue as payment of plaintiff’s percentage or manufacturer’s sales taxes for the third quarter of 1977.114. the amount of P4.746. plaintiff paid to the Bureau of Internal Revenue. plaintiff has to pay the said amount within fifteen days from receipt of the letter. the proceeds of the check was paid to IBAA as collecting or depository bank.

could not be characterized as the proximate cause of the injury to the parties. For this reason. It appears that although the employees of Ford initiated the transactions attributable to an organized syndicate. Citibank had indeed failed to perform what was incumbent upon it. The fact that the drawee bank did not discover the irregularity seasonably. the switching of the worthless checks to Citibank Check Nos. Citibank must likewise answer for the damages incurred by Ford on Citibank Checks because of the contractual relationship existing between the two. One thing is clear from the record: the clearing stamps at the back of Citibank Check Nos. their actions were not the proximate cause of encashing the checks payable to the CIR. Had this been duly examined. SN 10597 and 16508 do not bear any initials. 10597 and 16508 would have been discovered in time. Citibank should have scrutinized Citibank Check before paying the amount of the proceeds thereof to the collecting bank of the BIR. the bank is under obligation to treat the accounts of its depositors with meticulous care. Page 124 of 845 . The degree of Ford’s negligence. constitutes negligence in carrying out the bank’s duty to its depositors.course that the contributory negligence was the proximate cause of the injury of which complaint is made. in our view. Citibank failed to notice and verify the absence of the clearing stamps. if any. The point is that as a business affected with public interest and because of the nature of its functions. Citibank. in our view. as the drawee bank breached its contractual obligation with Ford and such degree of culpability contributed to the damage caused to the latter. always having in mind the fiduciary nature of their relationship. which is to ensure that the amount of the checks should be paid only to its designated payee.

during the term of the charter. Under the terms of the agreement. 1990. 1990. 1991. of November 12. Rico Ouano turned on his radio and read the distress signal from Captain Ingiuto. for the purpose of transporting SMC’s beverage products from its Mandaue City plant to various points in Visayas and Mindanao.. at 4:00 a. The vessel was about 20 miles west of Sulauan Point.. 12. doing business under the name and style J. Ouano Marine Services. Moreno contacted Captain Inguito through the radio and advised him to take shelter.At 2:30 Page 125 of 845 . November 13.m. 1990.At 7:00 a. No.m. to sail for Opol. SMC chartered the M/V Doña Roberta owned by Julius Ouano for a period of two years. When he talked to the captain. one hour after the M/V Doña Roberta departed from Mandaue City SMC Radio Operator Rogelio P.R. On November 11. because they needed a helicopter to rescue them. son of Julius Ouano. 1989 to May 31. November 12. Court of Appeals (CA) Facts: San Miguel Corporation entered into a Time Charter Party Agreement with Julius Ouano. Captain Sabiniano Inguito. and that the winds were in their favor. The typhoon had maximum sustained winds of 240 kilometers per hour near the center with gustiness of up to 280 kilometers per hour. G. 1990.At 1:15 a. typhoon Ruping was spotted 570 kilometers east-southeast of Borongan. moving west-northwest at 22 kilometers per hour in the general direction of Eastern Visayas.m.Upon being told by SMC’s radio operator. 1990. Rico Ouano talked to the Chief Engineer who informed him that they can no longer stop the water from coming into the vessel because the crew members were feeling dizzy from the petroleum fumes. Meanwhile. SMC issued sailing orders to the Master of the MN Doña Roberta. Samar. 2002 San Miguel Corporation and Heirs of Ouana v. the latter requested for a helicopter to rescue them. Captain Inguito replied that they will proceed since the typhoon was far away from them. from June 1. Cagayan Nov. Captain Inguito called Moreno over the radio and requested him to contact Rico Ouano. 141716 July 4.

In the assailed decision. the rights and the responsibilities of ownership rest on the owner.a. It has also been defined as a contract by virtue of which the owner or the agent of the vessel leases for a certain price the whole or a portion of the vessel for the transportation of goods or persons from one port to another. which leaves the general owner in possession of the ship as owner for the voyage. the charterer. the M/V Doña Roberta sank. of November 13. only five survived. unless it be shown that the same was due to its fault or negligence. It appearing that Ouano was the employer of the captain and crew of the M/V Doña Roberta during the term of the charter. SC likewise agrees with the CA that Ouano is vicariously liable for the negligent acts of his employee. even testified that during the period that the vessel was under charter to SMC. he therefore had command and control over the vessel. The evidence does not show that SMC or its employees were amiss in their duties. Under the foregoing definitions. The charterer is free from liability to third persons in respect of the ship. owners and managers are responsible for damages caused by the Page 126 of 845 . as well as the clear terms of the Charter Party Agreement between the parties. If the charter is a contract of affreightment. 1990. SC concur with the findings of the Court of Appeals that the charter party in these cases was a contract of affreightment. His son. Captain Inguito. Under Articles 2176 and 2180 of the Civil Code. the Captain thereof had control of the navigation of all voyages. Issue: Whether or nor Ouano is liable for the negligence of his employee. contrary to petitioner Ouano’s protestation that it was a demise charter. the Court of Appeals found that the proximate cause of the sinking of the vessel was the negligence of Captain Sabiniano Inguito. Out of the 25 officers and crew on board the vessel. Rico Ouano. Ruling: A charter party is a contract by virtue of which the owner or the agent of a vessel binds himself to transport merchandise or persons for a fixed price.m. should be free from liability for any loss or damage sustained during the voyage. SMC.

Defendant Morales was in Manila at the time. Attracted by the sight of the gun. 2010 Pacis v. Matibag asked Alfred Dennis Pacis to return the Page 127 of 845 . Pacis (petitioners) filed with the trial court a civil case for damages against respondent Jerome Jovanne Morales (respondent). No. 22 Rimfire Magnum with Serial No. the master or employer is presumed to be negligent either in the selection or in the supervision of that employee. an AMT Automag II Cal. Jr. Sales agents Matibag and Herbolario were the ones left to look after the gun store. petitioners Alfredo P. It appears that Matibag and Herbolario later brought out the gun from the drawer and placed it on top of the table.R. Respondent is the owner of the gun store. Pacis and Cleopatra D. The bullet which killed Alfred Dennis Pacis was fired from a gun brought in by a customer of the gun store for repair. was left by defendant Morales in a drawer of a table located inside the gun store. 169467 February 25. The gun. SN-H34194. Petitioners are the parents of Alfred Dennis Pacis. G. the young Alfred Dennis Pacis got hold of the same.negligence of a servant or an employee. Morales Facts: On 17 January 1995. a 17-year old student who died in a shooting incident inside the Top Gun Firearms and Ammunitions Store in Baguio City.

12. The RTC however imposed a civil liability against repsondent. 4 of the Revised Penal Code. the CA absolved respondent from civil liability under Article 2180 of the Civil Code.gun. much less the degree of care required of someone dealing with dangerous weapons. Petitioners based their claim for damages under Articles 2176 and 2180 of the Civil Code. as the employer is subsidiary liable Ruling: YES. under Article 2176 of the Civil Code is primary and direct. The latter followed and handed the gun to Matibag. par. For failing to insure that the gun was not loaded. respondent himself was negligent. It went off. or any person for that matter. based on a person’s own negligence. it was not shown in this case whether respondent had a License to Repair which authorizes him to repair defective firearms to restore its original composition or enhance or upgrade firearms. the liability of the employer. but was however acquitted of the charge against him because of the exempting circumstance of accident under Art. Petitioners opted to file an independent civil action for damages against respondent whom they alleged was Matibag's employer. Issue: Whether or not Morales. Furthermore. the bullet hitting the young Alfred in the head. The Court held that respondent did not exercise the degree of care and diligence required of a good father of a family. As a gun store owner. respondent is presumed to be knowledgeable about firearms safety and should have known never to keep a loaded weapon in his store to avoid unreasonable risk of harm or injury to others. A criminal case for homicide was filed against Matibag.Upon appeal. For the subsidiary liability of the employer under Article 103 of the Revised Penal Code. Page 128 of 845 .

No. Tan Lee Facts: Page 129 of 845 . v. 2010 Philippine Hawk Corp. G.R. 166869 February 16.

and was then being driven by Margarito Avila. moral and exemplary damages. 2005. and caused respondent physical injuries. medical and hospitalization expenses. the cost of the motorcycle's repair. respondent Vivian Tan Lee filed before the RTC of Quezon City a Complaint against petitioner Philippine Hawk Corporation and defendant Margarito Avila for damages based on quasi-delict. and a bus with Body No. Petitioner asserted that it exercised the diligence of a good father of the family in the selection and supervision of its employees. The CA affirmed the decision of the trial court with modification in the award of damages. alleging that the immediate and proximate cause of the accident was the recklessness or lack of caution of Silvino Tan. including Margarito Avila. The trial court rendered judgment against petitioner and defendant Margarito Avila. On March 15. Issue: Whether or not petitioner is liable to respondent for damages Ruling: Page 130 of 845 . In its Answer. It further held petitioner bus company liable for failing to exercise the diligence of a good father of the family in the selection and supervision of Avila. 119. arising from a vehicular accident that occurred on March 17. The bus was owned by petitioner Philippine Hawk Corporation. having failed to sufficiently inculcate in him discipline and correct behavior on the road. and other just and equitable reliefs. Silvino Tan. respondent filed an Amended Complaint. petitioner denied liability for the vehicular accident. wherein it adjudged guilty of simple negligence. in her own behalf and in behalf of her children. funeral and interment expenses. Quezon. attorney's fees. 1991 in Barangay Buensoceso. a passenger jeep. 1992. The accident resulted in the death of respondent's husband. in the civil case for damages against petitioner. On June 18. Gumaca. The accident involved a motorcycle. Respondent sought the payment of indemnity for the death of Silvino Tan.

for having failed to sufficiently inculcate in him discipline and correct behavior on the road. temperate damages. and moral damages for the physical injuries sustained by respondent in addition to the damages granted by the trial court to respondent. YES. The Court also affirmed the CA's decision in awarding civil indemnity for the death of respondent's husband. since it failed to exercise the diligence of a good father of the family in the selection and supervision of its bus driver. The Court upholds the finding of the trial court and the Court of Appeals that petitioner is liable to respondent. Margarito Avila. Indeed. Page 131 of 845 . It also did not know that Avila had been previously involved in sideswiping incidents. petitioner's tests were concentrated on the ability to drive and physical fitness to do so.

At the time of the accident. 2007 Mercury Drug Corporation v. Respondent’s fault petitioner Del Rosario for committing gross negligence and reckless imprudence while driving. Respondent spouses Richard and Carmen Huang are the parents of respondent Stephen Huang and own the red 1991 Toyota Corolla. face and lung. A driver’s license had been confiscated because he had been previously apprehended for reckless driving. Respondent Stephen Huang sustained massive injuries to his spinal cord. 172122 June 22.R. The trial court found Mercury Drug and Del Rosario jointly and severally liable to pay respondents. petitioner Del Rosario only had a Traffic Violation Receipt. Issue: Whether or not petitioner Mercury Drug is liable for the negligence of its employee. Huang Facts: Petitioner Mercury Drug is the registered owner of a six-wheeler 1990 Mitsubishi Truck. and petitioner Mercury Drug for failing to exercise the diligence of a good father of a family in the selection and supervision of its driver. head. No. G. It has in its employ petitioner Rolando Del Rosario as driver. Page 132 of 845 . He is paralyzed for life from his chest down and requires continuous medical and rehabilitation treatment. These two vehicles figured in a road accident. The Court of Appeals affirmed the said decision.

To be relieved f the liability. Del Rosario has been driving for more than thirteen hours. petitioner Mercury Drug is liable jointly and severally liable to pay the respondents. In this case. Page 133 of 845 . or a prior showing of insolvency of such employee. both in the selection of the employee and in the supervision of the performance of his duties. With this. Moreover. Del Rosario took the driving test and psychological exam for the position of Delivery Man and not as Truck Man. As the time of the accident. without any alternate. the petitioner Mercury Drug does not provide for back-up driver for long trips. petitioner should show that it exercised the diligence of a good father of a family. It is also joint and solidary with the employee.Ruling: The liability of the employer under Article 2180 is direct and immediate. It is not conditioned on a prior recourse against the negligent employee.

164012 June 8. Soriano was thrown five meters away. 2007 Mendoza v. while Page 134 of 845 . G.R. Soriano Facts: Sonny Soriano. was hit by a speeding Tamaraw FX driven by Lomer Macasasa. while crossing Commonwealth Avenue near Luzon Avenue. No.

The Court of Appeals. on the other hand. Under Article 2185 of the Civil Code.the vehicle stopped some 25 meters from the point of impact. Issue: Whether or not petitioner is liable for damages Ruling: While the appellate court agreed that Soriano was negligent. such that he was unable to avoid hitting the victim. employers are liable for the damages caused by their employees acting within the scope of their assigned tasks. a person driving a motor vehicle is presumed negligent if at the time of the mishap. The trial court dismissed the complaint against Macasasa and Mendoza. under Article 2180. It found Soriano negligent for crossing not in the pedestrian overpass. the registered owner of the vehicle. the presumption of negligence of the employer in the selection and supervision of employees stood. but the first flee. Further. Gerard Villaspin. he was violating traffic regulations. asked Macasasa to bring Soriano to the hospital. It observed that Soriano’s own negligence did not preclude recovery for damages from Macasasa’s negligence. it also found Macasasa negligent for speeding. It further held that since petitioner failed to present evidenced to the contrary and conformably with Article 2180 of the Civil Code. Respondent’s wife and daughter filed a complaint for damages against Macasasa and petitioner Flordeliza Mendoza. Petitioner Mendoza contends that she was not liable since as owner of the vehicle. The liability arises due to the presumed negligence of the employers in supervising their employees unless they prove that they observed Page 135 of 845 . one of Soriano’s companions. she had exercised the diligence of a good father of a family over her employee. The records show that Macasasa violated two traffic rules under the Land Transportation and Office Code. reversed the assailed decision of the lower court. Macasas.

20% reduction of the amount of the damages awarded was awarded to petitioner. the immediate and proximate cause of the injury being the defendant’s lack of due care. In this case petitioner is held primarily and solidarily liable for the damages caused by Macasasa.all the diligence of a good father of a family to prevent the damage. but the court shall mitigate the damages awarded. the plaintiff may recover damages. Ruling that Soriano was guilty of contributory negligence for not using the pedestrian overpass. But if his negligence was only contributory. Page 136 of 845 . However. Article 2179 states that “when the plaintiff’s own negligence was the immediate and proximate cause of his injury. he cannot recover damages.

pursuant to Article 121(3) of the Family Code. No. Cerezo solely liable for the damages sustained by Tuazon arising from the negligence of Mrs. the trial court ruled in Tuazon’s favor. Cerezo liable as Tuazon failed to show that Mrs. Cerezo’s business benefited the family. Cerezo’s liability as an Page 137 of 845 . her husband Attorney Juan Cerezo. Cerezo. pursuant to Article 2180 of the Civil Code. Foronda is not an indispensable party to the case. Foronda. The trial court held Mrs. and without whom no final resolution of the case is possible. The trial court did not hold Atty. Mrs. as owner of the bus line. Cerezo’s assertion. The trial court made no pronouncement on Foronda’s liability because there was no service of summons on him. After considering Tuazon’s testimonial and documentary evidence. 141538 March 23. 2004 Cerezo v. Issue: Whether or not petitioner is solidarily liable Ruling: Contrary to Mrs. Cerezo’s employee.R. However. An indispensable party is one whose interest is affected by the court’s action in the litigation. Tuazon Facts: Country Bus Lines passenger bus collided with a tricycle. Tricycle driver Tuazon filed a complaint for damages against Mrs. and bus driver Danilo A. G.

as in this case. the present action is clearly for the quasi-delict of Mrs. This is the fault that the law condemns. Cerezo alone. To hold the employer liable in a subsidiary capacity under a delict. Cerezo. The responsibility of two or more persons who are liable for a quasi-delict is solidary. while the employer’s liability based on a delict is merely subsidiary. the petition was denied ordering the defendant Hermana Cerezo to pay the plaintiff. However. and the other is not even a necessary party because complete relief is available from either.” refer to the remedy provided by law for enforcing the obligation rather than to the character and limits of the obligation. While the employer is civilly liable in a subsidiary capacity for the employee’s criminal negligence. Although liability under Article 2180 originates from the negligent act of the employee. The idea that the employer’s liability is solely subsidiary is wrong. but only mutual representation. then the trial court’s jurisdiction over Foronda is necessary. each debtor is liable for the entire obligation. Where the obligation of the parties is solidary. The words “primary and direct. Thus. the law presumes that the employer has himself committed an act of negligence in not preventing or avoiding the damage. it is also primary and direct. either of the parties is indispensable. the employer is also civilly liable directly and separately for his own civil negligence in failing to exercise due diligence in selecting and supervising his employee. Cerezo and not for the delict of Foronda. Moreover. jurisdiction over Foronda is not even necessary as Tuazon may collect damages from Mrs.” as contrasted with “subsidiary. each debtor is liable to pay for the entire obligation in full. Hence. Therefore. an employer’s liability based on a quasi-delict is primary and direct. Foronda is not an indispensable party to the final resolution of Tuazon’s action for damages against Mrs. Page 138 of 845 . When an employee causes damage. Where there is a solidary obligation on the part of debtors.employer in an action for a quasi-delict is not only solidary. There is no merger or renunciation of rights. the aggrieved party must initiate a criminal action where the employee’s delict and corresponding primary liability are established. If the present action proceeds from a delict. the aggrieved party may sue the employer directly.

Woman of the Year. Teresa Elena Legarda-de los Santos. at the request of Wilfredo. Around 11:30 p. Mejia (Mejia). joined Teresa Elena in the Galant Sigma. He drove a 1980 Mitsubishi Galant Sigma . his brother Armando de los Santos . Metro Manila as a member of the cast for the musical play. the wife of respondent Wilfredo de los Santos . while travelling along the Katipunan Road (White Plains). No. Annabel Vilches (Annabel) and Jerome Macuja. 1984. a company car assigned to Wilfredo. the Galant Sigma collided with the shuttle bus owned by petitioner and driven by Alfredo S. G. went to the Rizal Theater to fetch Teresa Elena after the latter's performance. 152033 March 16..On that same night. namely. Page 139 of 845 .performed at the Rizal Theater in Makati City.m. husband of respondent Carmina Vda.Two other members of the cast of Woman of the Year. 2011 Filipinas Synthetic v. De Los Santos Facts: On the night of September 30. de los Santos.R.

and was affirmed by the CA with modifications in the awarding of damages.The RTC decided in favor of herein respondents. considering that Section 35 of RA 4136 states that the maximum allowable speed for trucks and buses must not exceed 50 kilometres per hour. the claimed speed of Mejia is still unlawful. there was proof more than preponderant to conclude that Mejia was travelling at an unlawful speed. As the negligence of the employee gives rise to the presumption of negligence on the part of the employer. across the White Plains Road landing near the perimeter fence of Camp Aguinaldo. which was decided in favor of Mejia. From those evidence. it is not enough to emptily invoke the existence of said company guidelines and policies on hiring and supervision The mere allegation of the existence of hiring procedures and Page 140 of 845 . Significantly. A criminal charge for reckless imprudence resulting in damage to property with multiple homicide was brought against Mejia. Issue: Whether or not Mejia is negligent and liable for damages including the bus company Ruling: YES. The family of Annabel filed a civil case against petitioner and Mejia. hence. where the Galant Sigma burst into flames and burned to death beyond recognition all four occupants of the car. the latter has the burden of proving that it has been diligent not only in the selection of employees but also in the actual supervision of their work. The excessive speed employed by Mejia was the proximate cause of the collision that led to the sudden death of Teresa Elena and Armando.an employee of petitioner. the negligent driver. The Court therefore cannot find any error on the part of the trial court in concluding that Mejia was driving more than his claim of 70 kilometres per hour. In order that the defense of due diligence in the selection and supervision of employees may be deemed sufficient and plausible. The Galant Sigma was dragged about 12 meters from the point of impact.

without anything more. the employer of Mejia merely presented evidence on the alleged care it took in the selection or hiring of Mejia way back in 1974 or ten years before the fatal accident.. It is significant to note that in employing Mejia. Filsyn. It insufficiently failed to explain the reason for such waiver other than their allegation of Mejia's maturity and skill for the job. In the present case. Inc. 54080 November 22. G. Filsyn waived its long-standing policy requirement of hiring only high school graduates. No. Delos Santos Facts: Page 141 of 845 . who is not a high school graduate.supervisory policies. 2000 Viron Transportation Co. Neither did Filsyn present any proof of the existence of the rules and regulations governing the conduct of its employees. v. is decidedly not sufficient to overcome such presumption.R.

Issue: Whether or not the employer is liable to the negligence of his employee Ruling: As employers of the bus driver. tried to overtake his truck. At about 12:30 in the afternoon. The Viron Bus. In fine. directly and primarily liable for the resulting damages. the cargo truck which he was driving was hit by the Viron bus on its left front side. when the employee causes damage due to his own negligence while performing his own duties. Dulnuan. Both the RTC and the CA rendered its decision in favor of the private respondents. is only jusris tantum. driven by Wilfredo Villanueva. Tarlac. he was driving said truck along the National Highway within the vicinity of Gerona. a Forward Cargo Truck. with the allegations and subsequent proof of negligence against the bus driver of petitioner. thus. petitioner as the employer is responsible for damages. failed to rebut such legal presumption of negligence in the selection and supervision of employees. but as soon as he occupied the right lane of the road. petitioner (employer) is liable for damages. however. Page 142 of 845 . Petitioner. Hence. That presumption. The presumption that they are negligent flows from the negligence of their employee. as the bus swerved to his lane to avoid an incoming bus on its opposite direction. Defendant Alberto delos Santos was the driver of defendant Rudy Samidan of the latter’s vehicle. not juris et de jure. Their only possible defense is that they exercised all the diligence of a good father of a family to prevent the damage. there arises the juris tantum presumption that the employer is negligent. the two of them and the driver of the Viron bus proceeded to report the incident to the Police Station. through its witnesses. under Article 2180 of the Civil Code. and he swerved to the right shoulder of the highway. the basis of the liability being the relationship of pater familias or on the employer’s own negligence. With the driver of another truck dealing likewise in vegetables. rebuttable only by proof of observance of the diligence of a good father of a family. the petitioner is.

Page 143 of 845 .

instead of the prescribed Diamicron The RTC and CA rendered their decision in favor of respondent. Page 144 of 845 . No. Respondent fell asleep while driving he could not remember anything about the collision nor felt its impact. Upon being shown the medicine. G.R. 57435 May 25. Baking Facts: Sebastian Baking. The car he was driving collided with the car of one Jose Peralta. Cesar Sy for a medical check-up. respondent. respondent returned to Dr. Respondent then proceeded to petitioner Mercury Drug Corporation (Alabang Branch) to buy the prescribed medicines. respondent took one pill of dormicum on three consecutive days. Suspecting that the tablet he took may have bearing on his physical and mental state at the time of the collision. Sy. On the third day he took the medicine. the saleslady misread the prescription Diamicron as a prescription for Dormicum. Sy was shocked to find that what was sold to him was Dormicum. and he figured in a vehicular accident. 2007 Mercury Drug Corporation v. Dr. Unaware that what was given to him was the wrong medicine. Dr. However. Sy gave respondent two medical prescriptions – Diomicron for his blood sugar and Benalize tablets for his triglyceride. went to the clinic of Dr.

” It is thus clear that the employer of a negligent employee is liable for the damages caused by the latter.Issue: Whether petitioner was negligent. but also for those of persons for whom one is responsible. Petitioner contends that the proximate cause of the accident was respondent’s negligence in driving. instead of the prescribed diamicron. The accident could have not occurred had petitioner’s employee been careful in reading the prescription. Article 2180 in complementing the preceding article states that “the obligation imposed by articles 2176 is demandable not only for one’s own acts or omissions. The court disagrees. may be rebutted by a clear showing on the part of the employer that he has exercised the care and diligence of a good father of a family in the selection and supervision of his employee. however. thus making the petitioner solidarily liable for the damages. Page 145 of 845 . petitioner failed to prove such exercised of due diligence of a good father of a family in the selection and supervision of employee. the employee should have been very cautious in dispensing medicines. whether such negligence was the proximate cause of respondent’s accident. Considering that a fatal mistake could be a matter of life and death for a buying patient. When an injury is caused by the negligence of an employee. after such selection. In this case. petitioner’s employee was grossly negligent in selling respondent domicrum. The presumption. there instantly arises a presumption of the law that there has been negligence on the part of the employer either in the selection of the employee or the supervision over him. Ruling: Obviously. and if so.

Katipunan Branch. 2006 Safeguard Security v. 165732 December 14. Evangeline.R. G. a duly licensed firearm holder with corresponding permit to carry the same outside Page 146 of 845 .. to renew her time deposit per advise of the bank's cashier as she would sign a specimen card. Quezon City. No. Tangco Facts: Evangeline Tangco (Evangeline) went to Ecology Bank.

Suddenly. whether or not they are in their proper post and with proper equipment. that the RTC erroneously found that it did not exercise the diligence required in the supervision of its employee. that it was likewise error to say that Safeguard was negligent in seeing to it that the procedures and policies were not properly implemented by reason Page 147 of 845 . and pulled out her firearm from her bag to deposit the same for safekeeping. that the fact that Pajarillo loaded his firearm contrary to Safeguard's operating procedure is not sufficient basis to say that Safeguard had failed its duty of proper supervision. and 2.her residence. wherein supervisors are assigned to routinely check the activities of the security guards which include among others. that Evangeline's death was not due to Pajarillo's negligence as the latter acted only in self-defense. approached security guard Pajarillo. Whether Safeguard should be held solidarily liable for the damages awarded to respondents. Whether Pajarillo is guilty of negligence in shooting Evangeline. who was stationed outside the bank. It claims that it had required the guards to undergo the necessary training and to submit the requisite qualifications and credentials which even the RTC found to have been complied with. Pajarillo shot Evangeline with his service shotgun hitting her in the abdomen instantly causing her death. Safeguard further claims that it conducts monitoring of the activities of its personnel. as well as regular evaluations of the employees' performances. Respondent filed a complaint for damages against Pajarillo for negligently shooting Evangeline and against Safeguard for failing to observe the diligence of a good father of a family to prevent the damage committed by its security guard. Issues: 1. Ruling: Safeguard contends that it cannot be jointly held liable since it had adequately shown that it had exercised the diligence required in the selection and supervision of its employees. Petitioners denied the material allegations in the complaint and alleged that Safeguard exercised the diligence of a good father of a family in the selection and supervision of Pajarillo.

148737 Page 148 of 845 . In the selection of prospective employees. On the other hand. The Supreme Court was not convinced. Safeguard is primarily and solidarily liable for the quasi- delict committed by the former. due diligence in the supervision of employees includes the formulation of suitable rules and regulations for the guidance of employees and the issuance of proper instructions intended for the protection of the public and persons with whom the employer has relations through his or its employees and the imposition of necessary disciplinary measures upon employees in case of breach or as may be warranted to ensure the performance of acts indispensable to the business of and beneficial to their employer. No. experience..of one unfortunate event. Safeguard is presumed to be negligent in the selection and supervision of his employee by operation of law. and service records. As the employer of Pajarillo. Article 2180 of the Civil Code provides: The obligation imposed by Article 2176 is demandable not only for one's own acts or omissions. employers are required to examine them as to their qualifications. This presumption may be overcome only by satisfactorily showing that the employer exercised the care and the diligence of a good father of a family in the selection and the supervision of its employee.R. G. but also for those of persons for whom one is responsible.

PRBL Bus No. some fifty meters away. December 16. Tarlac. Carmela suffered injuries requiring hospitalization in the same accident which resulted in her father’s death. Pleyto tried to overtake Esguerra’s tricycle but hit it instead. but only Carmela required hospitalization. The car was headed for Manila with some passengers. the master or employer is presumed to be negligent either in the selection or in the supervision of that employee. while in the back seat were Ricardo’s 18-year old daughter Carmela and her friend. driven by Arnulfo Asuncion. when an injury is caused by the negligence of a servant or an employee. in a vehicular accident. 2004 Pleyto v. Lomboy Facts: Respondent Maria D. Seated beside Arnulfo was his brother-in-law. a witness and one of the bus passengers. The Court of Appeals found PRBL liable for Pleyto’s negligence pursuant to Article 2180 in relation to Article 2176 of the Civil Code. Coming down the lane. one Rhino Daba. Under Article 2180. who died in Pasolingan. Ricardo Lomboy. Lomboy of Calasiao. is the surviving spouse of the late Ricardo Lomboy. was a southbound Mitsubishi Lancer car. Issue: Did petitioner observed the proper diligence of a good father of a family? Page 149 of 845 . Carmela and Rhino suffered injuries. Gerona. This presumption may be overcome only by satisfactorily showing that the employer exercised the care and the diligence of a good father of a family in the selection and the supervision of its employee. According to Rolly Orpilla. 1539 smashed head-on the car. Pleyto then swerved into the left opposite lane. The accident was a head-on collision between the PRBL bus driven by petitioner Pleyto and the car where Ricardo was a passenger. Pangasinan. killing Arnulfo and Ricardo instantly.

In the present case. the latter has the burden of proving that it has been diligent not only in the selection of employees but also in the actual supervision of their work. Citing precedents. the drizzle that made the road slippery. and then proceeded to collide with the incoming car with such force that the car was pushed beyond the edge of the road to the ricefield. and the proximity of the car coming from the opposite direction were duly established by the evidence. including Pleyto. Page 150 of 845 . the Court of Appeals opined. He overtook the tricycle despite the oncoming car only fifty (50) meters away from him. is evident from the fact despite the application of the brakes. However. inappropriate in the light of the aforementioned circumstances. Defendant-appellant’s claim that he was driving at a mere 30 to 35 kilometers per hour does not deserve credence as it would have been easy to stop or properly maneuver the bus at this speed. the bus still bumped the tricycle. The speed at which the bus traveled. In order that the defense of due diligence in the selection and supervision of employees may be deemed sufficient and plausible. petitioners presented several documents in evidence to show the various tests and pre-qualification requirements imposed upon petitioner Pleyto before his hiring as a driver by PRBL. The speed of the bus. The mere allegation of the existence of hiring procedures and supervisory policies without anything more is decidedly not sufficient to overcome such presumption.Ruling: The negligence and fault of appellant driver is manifest. As the negligence of the employee gives rise to the presumption of negligence on the part of the employer. it is not enough for the employer to emptily invoke the existence of company guidelines and policies on hiring and supervision. no documentary evidence was presented to prove that petitioner PRBL exercised due diligence in the supervision of its employees.

he was driving said truck along the National Highway within the vicinity of Gerona. No. the two of them and the driver of the Viron bus proceeded to report the incident to the Police Station. Inc. and he swerved to the right shoulder of the highway. the cargo truck which he was driving was hit by the Viron bus on its left front side. as the bus swerved to his lane to avoid an incoming bus on its opposite direction. Dulnuan. driven by Wilfredo Villanueva. v. At about 12:30 in the afternoon.. tried to overtake his truck. G. Tarlac. The Viron Bus. Issue: Whether or not the employer is liable to the negligence of his employee Ruling: Page 151 of 845 . Delos Santos Facts: Defendant Alberto delos Santos was the driver of defendant Rudy Samidan of the latter’s vehicle. 2000 Viron Transportation Co. but as soon as he occupied the right lane of the road.R. 54080 November 22. With the driver of another truck dealing likewise in vegetables. Both the RTC and the CA rendered its decision in favor of the private respondents. a Forward Cargo Truck.

there arises the juris tantum presumption that the employer is negligent. Petitioner. In fine. the petitioner is. however. directly and primarily liable for the resulting damages. the basis of the liability being the relationship of pater familias or on the employer’s own negligence. under Article 2180 of the Civil Code. when the employee causes damage due to his own negligence while performing his own duties. thus. As employers of the bus driver. petitioner (employer) is liable for damages. That presumption. rebuttable only by proof of observance of the diligence of a good father of a family. not juris et de jure. with the allegations and subsequent proof of negligence against the bus driver of petitioner. The presumption that they are negligent flows from the negligence of their employee. Their only possible defense is that they exercised all the diligence of a good father of a family to prevent the damage. through its witnesses. petitioner as the employer is responsible for damages. Page 152 of 845 . failed to rebut such legal presumption of negligence in the selection and supervision of employees. is only jusris tantum. Hence.

. No.R. G. Begasa Facts: Page 153 of 845 . 2003 Syki v. 149149 October 23.

Whether he exercised the diligence of a good father of a family. the owner of the passenger jeepney. the owner of the truck. a truck driven by Elizalde Sablayan and owned by petitioner Ernesto Syki bumped the rear end of the passenger jeepney. but ordered petitioner Ernesto Syki and his truck driver. even though the former are not engaged in any business or industry.. and Elizalde Sablayan. a legal presumption instantly arises that the employer was negligent. when an injury is caused by the negligence of an employee. From the above provision. After hearing. Elizalde Sablayan. While respondent was boarding the passenger jeepney (his right foot already inside while his left foot still on the boarding step of the passenger jeepney). the burden of proof is on the employer. Respondent Salvador Begasa and his three companions flagged down a passenger jeepney driven by Joaquin Espina and owned by Aurora Pisuena. Respondent fell and fractured his left thigh bone. jointly and severally Issue: 1. herein petitioner Ernesto Syki. the trial court dismissed the complaint against Aurora Pisuena.. Page 154 of 845 . If the employer successfully overcomes the legal presumption of negligence. to pay respondent Salvador Begasa. The said presumption may be rebutted only by a clear showing on the part of the employer that he had exercised the diligence of a good father of a family in the selection and supervision of his employee. In other words. either or both. the driver of the truck. the owner and operator of the passenger jeepney. Whether or not petitioner is liable for the act of his employee. 2. Respondent filed a complaint for damages for breach of common carrier’s contractual obligations and quasi-delict against Aurora Pisuena. Ruling: Employers shall be liable for the damages caused by their employees and household helpers acting within the scope of their assigned tasks. in the selection and/or supervision of his said employee duties. he is relieved of liability.

to hold sway. petitioner is liable. monitor their implementation. The reason for this is to obviate the biased nature of the employer’s testimony or that of his witnesses. In the case at bar. In sum. To establish these factors in a trial involving the issue of vicarious liability.The employer must not merely present testimonial evidence to prove that he had observed the diligence of a good father of a family in the selection and supervision of his employee. employers should formulate standard operating procedures. while there is no rule which requires that testimonial evidence. under Article 2180 of the Civil Code. in the present case. did not slow down even when he was already approaching a busy intersection within the city proper. inasmuch as the witnesses’ testimonies dwelt on mere generalities. experience. and impose disciplinary measures for breaches thereof. Petitioner’s attempt to prove its “deligentissimi patris familias” in the selection and supervision of employees through oral evidence must fail as it was unable to buttress the same with any other evidence. and service records. we cannot consider the same as sufficiently persuasive proof that there was observance of due diligence in the selection and supervision of employees. employers must submit concrete proof. which might obviate the apparent biased nature of the testimony. including documentary evidence. employers are required to examine them as to their qualifications. In the selection of prospective employees. with respect to the supervision of employees. Page 155 of 845 . the sole and proximate cause of the accident was the negligence of petitioner’s driver who. to pay damages to respondent Begasa for the injuries sustained by latter. as found by the lower courts. must be corroborated by documentary evidence. but he must also support such testimonial evidence with concrete or documentary evidence. On the other hand. object or documentary. Since the negligence of petitioner’s driver was the sole and proximate cause of the accident.

for damages. The petitioner vehemently denied the material allegations of the complaint. she exercised the proper diligence of a good father of a family. one Ceferino G. without due regard to public safety. Venturina. G. Venturina along the northbound lane of Epifanio delos Santos Avenue (EDSA). Zuniga FACTS: The bus owned by the petitioner was being driven by her driver. 146173 December 11. as heirs of the victim. filed a Complaint against petitioner and her driver. Private respondents. 2003 Yambao v. Such was the force of the impact that the left side of the front windshield of the bus was cracked. With Venturina was the bus conductor. so as not to be liable for the act committed by her employee? Page 156 of 845 .. Suddenly. both in the selection and supervision of her bus driver. but due to the massive injuries sustained. Zuñiga was rushed to the Quezon City General Hospital where he was given medical attention. the bus bumped Herminigildo Zuñiga. a pedestrian. No. She further alleged that she was not liable for any damages because as an employer.R. theorizing that Herminigildo bumped into her bus. while avoiding an unidentified woman who was chasing him. thus resulting in the victim’s premature death. Fernando Dumaliang. careless and imprudent manner. he succumbed shortly thereafter. in violation of traffic rules and regulations. ISSUE: Whether or not petitioner observed the diligence of a good father of a family. She tried to shift the blame for the accident upon the victim. The complaint essentially alleged that Venturina drove the bus in a reckless.

The court a quo then found the petitioner directly and primarily liable as Venturina’s employer pursuant to Article 2180 of the Civil Code as she failed to present evidence to prove that she has observed the diligence of a good father of a family in the selection and supervision of her employees. petitioner’s liability to private respondents for the negligent and imprudent acts of her driver. and the barangay where he resides. she required him to produce not just his driver’s license.RULING: It held that this was a case of quasi-delict. but also clearances from the National Bureau of Investigation (NBI). having failed to rebut the legal presumption of negligence in the selection and supervision of her driver. Page 157 of 845 . and only hired him after it was shown to her satisfaction that he had no blot upon his record. she points out that when Venturina applied with her as a driver in January 1992. In sum. To support her claim. Petitioner contends that as an employer. Employers shall be liable for the damages caused by their employees and household helpers acting within the scope of their assigned tasks. the Philippine National Police. even though the former are not engaged in any business or industry. Venturina. is responsible for damages. She also required him to present his Social Security System (SSS) Number prior to accepting him for employment. both in the selection and supervision of her driver and therefore. the basis of the liability being the relationship of pater familias or on the employer’s own negligence. Petitioner. She likewise stresses that she inquired from Venturina’s previous employer about his employment record. is relieved from any liability for the latter’s misdeed. she observed the proper diligence of a good father of a family. there being no pre-existing contractual relationship between the parties. under Article 2180 of the Civil Code is both manifest and clear.

On March 14 and March 15. Gamurot and Elissa Baladad -- allegedly disallowed her from taking the tests. those who refused to pay were denied the opportunity to take the final examinations. Pangasinan Colleges Facts: Petitioner Khristine Rea M.G. the scheduled dates of the final examinations in logic and statistics. Regino refused to pay for the tickets.. The project was allegedly implemented by recompensing students who purchased tickets with additional points in their test scores. Each student was required to pay for two tickets at the price of P100 each. 156109 November 18.” the proceeds of which were to go to the construction of the school’s tennis and volleyball courts. Page 158 of 845 . In February 2002.Respondents Rachelle A. 2002. No. PCST held a fund raising campaign dubbed the “Rave Party and Dance Revolution.R. her teachers -. 2004 Regino v. Financially strapped and prohibited by her religion from attending dance parties and celebrations. Regino was a first year computer science student at Respondent Pangasinan Colleges of Science and Technology (PCST).

students expect that upon their payment of tuition fees. The terms of the school-student contract are defined at the moment of its inception -.Issue: Whether or not the purchased of the tickets are mandatory and are part of the contract between school and student Ruling: The school-student relationship is also reciprocal. it also underlines the importance of major examinations. Standards of academic performance and the code of behavior and discipline are usually set forth in manuals distributed to new students at the start of every school year. Failure to take a major examination is usually fatal to the students’ promotion to the next grade or to graduation.upon enrolment of the student. The school undertakes to provide students with education sufficient to enable them to pursue higher education or a profession. Thus. the students agree to abide by the academic requirements of the school and to observe its rules and regulations. with the balance to be paid before every preliminary. completion of academic requirements and observance of school rules and Page 159 of 845 . Their failure to pay their financial obligation is regarded as a valid ground for the school to deny them the opportunity to take these examinations. The foregoing practice does not merely ensure compliance with financial obligations. it has consequences appurtenant to and inherent in all contracts of such kind -. schools inform prospective enrollees the amount of fees and the terms of payment. midterm and final examination. These tests are usually a primary and an indispensable requisite to their elevation to the next educational level and. In practice. to their completion of a course.it gives rise to bilateral or reciprocal rights and obligations. Further. On the other hand. students are normally required to make a down payment upon enrollment. satisfaction of the set academic standards. Thus. Examination results form a significant basis for their final grades. ultimately.

It exacted the dance party fee as a condition for the students’ taking the final examinations. it could not be unilaterally imposed to the prejudice of the enrollees. Court of Appeals (CA) Facts: Page 160 of 845 . in the middle of the semester. however. was not part of the school-student contract entered into at the start of the school year. GR. No. PCST imposed the assailed revenue-raising measure belatedly. Hence.regulations. 2005 YHT Realty v. 126780 February 17. The fee. and ultimately for its recognition of their ability to finish a course. the school would reward them by recognizing their “completion” of the course enrolled in.

When a registered guest wished to open his safety deposit box. both the assisting employees and YHT Realty Corporation itself. Ruling: Under Article 1170 of the New Civil Code. in the performance of their obligations. it is presumed that the employer was negligent in selecting and/or supervising him for it is hard for the victim to prove the negligence of such employer. The law in turn does not allow such duty to the Page 161 of 845 . one of which is given to the registered guest. McLoughlin arrived from Australia and registered with Tropicana. are liable for damages. are guilty of negligence. The twin duty constitutes the essence of the business. this Court has ruled that if an employee is found negligent. he noticed that his money in the envelope was lacking and that the jewelries were gone. McLoughlin was aware of the procedure observed by Tropicana relative to its safety deposit boxes. when he returned coming from a trip. The safety deposit box could only be opened through the use of two keys. and the other remaining in the possession of the management of the hotel. Issue: Whether petitioner is liable for the loss of the personal properties of respondent. as owner and operator of Tropicana. He rented a safety deposit box as it was his practice to rent a safety deposit box every time he registered at Tropicana in previous trips. he alone could personally request the management who then would assign one of its employees to accompany the guest and assist him in opening the safety deposit box with the two keys. given the fact that the loss of McLoughlin’s money was consummated through the negligence of Tropicana’s employees in allowing Tan to open the safety deposit box without the guest’s consent. Also. However. As a tourist. The hotel business like the common carrier’s business is imbued with public interest. Article 2180 provides that the owners and managers of an establishment or enterprise are likewise responsible for damages caused by their employees in the service of the branches in which the latter are employed or on the occasion of their functions. those who. should be held solidarily liable. Thus.

to have access to the safety deposit box without fear of any liability that will attach thereafter in case such person turns out to be a complete stranger. Tropicana was guilty of concurrent negligence in allowing Tan.public to be negated or diluted by any contrary stipulation in so-called “undertakings” that ordinarily appear in prepared forms imposed by hotel keepers on guests for their signature. the loss would not have occurred. Without the assistance of hotel employees. who was not the registered guest. Page 162 of 845 . To rule otherwise would result in undermining the safety of the safety deposit boxes in hotels for the management will be given imprimatur to allow any person. the responsibility of securing the safety deposit box was shared not only by the guest himself but also by the management since two keys are necessary to open the safety deposit box. In the case at bar. to open the safety deposit box of McLoughlin. This will allow the hotel to evade responsibility for any liability incurred by its employees in conspiracy with the guest’s relatives and visitors. even assuming that the latter was also guilty of negligence in allowing another person to use his key. Thus. under the pretense of being a family member or a visitor of the guest.

Page 163 of 845 . she sought professional advice." She then saw people inside the operating room "moving. G. O lumalaki ang tiyan". "ang hirap ma-intubate nito. She then heard Dr. Herminda went out of the operating room and informed the patient's husband. mali yata ang pagkakapasok. Herminda was allowed to stay inside the operating room. heard somebody say that "Dr. Hosaka approached her. Court of Appeals (CA) Facts: Ramos was a robust woman Except for occasional complaints of discomfort due to pains allegedly caused by the presence of a stone in her gall bladder. was also there for moral support... darating na iyon.R. At around 9:30 A. doing this and that. At about 12:15 P. who was the Dean of the College of Nursing at the Capitol Medical Center. of June 17. she focused her attention on what Dr.M. Herminda Cruz. Gutierrez intubating the hapless patient. Gutierrez. Calderon. who was inside the operating room with the patient. that the doctor was not yet around. preparing the patient for the operation" As she held the hand of Ramos. Hosaka issue an order for someone to call Dr. Herminda then went back to the patient who asked. Hosaka who was not yet in Dr. 1985 and while still in her room. Her sister-in- law. No. 1999 Erlinda Ramos v. Dr. Gutierrez was doing. "Mindy. she then saw Dr. Herminda Cruz. she was prepared for the operation by the hospital staff. She was advised to undergo an operation for the removal of a stone in her gall bladder. because of the remarks of Dra. wala pa ba ang Doctor"? The former replied. Because the discomforts somehow interfered with her normal ways. "Huwag kang mag-alaala. At around 7:30 A. Hosaka. Thereafter. Hosaka is already here. She thereafter heard Dr. Gutierrez thereafter informed Herminda Cruz about the prospect of a delay in the arrival of Dr.M. Gutierrez reached a nearby phone to look for Dr. She thereafter noticed bluish discoloration of the nailbeds of the left hand of the hapless Ramos even as Dr. Gutierrez say. 124354 December 29. another anesthesiologist.M. Rogelio.

Likewise. Furthermore. Ramos was neurologically sound and. brain damage. and present a question of fact for defendant to meet with an explanation At the time of submission. during the administration of anesthesia and prior to the performance of cholecystectomy she suffered irreparable damage to her brain. is an injury which does not normally occur in the process of a gall bladder operation. Thus. or make out a plaintiff's prima facie case. was likewise physically fit in mind and body. However. who are the physicians-in-charge. Page 164 of 845 . Normally. including the endotracheal tube. Obviously. In fact. for the rule that the fact of the occurrence of an injury. a person being put under anesthesia is not rendered decerebrate as a consequence of administering such anesthesia if the proper procedure was followed.Issue: Whether or not the respondent doctors are negligent Ruling: Res ipsa loquitur is a Latin phrase which literally means "the thing or the transaction speaks for itself". the instruments used in the administration of anesthesia. may permit an inference or raise a presumption of negligence. without undergoing surgery. which Ramos sustained. she went out of the operating room already decerebrate and totally incapacitated. except for a few minor discomforts. taken with the surrounding circumstances. were all under the exclusive control of private respondents. Ramos could not have been guilty of contributory negligence because she was under the influence of anesthetics which rendered her unconscious. this kind of situation does not happen in the absence of negligence of someone in the administration of anesthesia and in the use of endotracheal tube.

REYES VS. As she did not observe any adverse reaction. Rico ordered a Widal Test. Although Dr. he admitted that he had yet to do one on the body of a typhoid victim at the time he conducted the post mortem of Jorge. As her shift was only up to 5:00 p. On the other hand.m. a diplomate whose specialization is infectious diseases and microbiology and an associate professor at the Southern Page 165 of 845 . Dr. who performed the autopsy of Jorge. They vouched for the correctness of Dr. Rico concluded that Jorge was positive for typhoid fever. He was attended to by respondent Dr. expert testimony is essential. The petitioner presented Dr. At around 1:00 in the morning. injury. Chief Pathologist of the Northern Mindanao Training Hospital.. 2000 FACTS: Jorge Reyes was taken to the Mercy Community Clinic. Dr. Rico’s diagnosis. ISSUE: Whether the death of Jorge Reyes was due to or caused by the negligence. a bluish or purplish discoloration of the skin or mucous membrane due to deficient oxygenation of the blood. Dr. Dr. SISTERS OF MERCY HOSPITAL GR No. Marlyn Rico. Cagayan de Oro. However. to be performed on Jorge. As to this aspect of medical malpractice. Typhoid fever was then prevalent in the locality. The court was not persuaded. Rico indorsed Jorge to respondent Dr. namely: duty.m. imprudence. Blanes also took the physical examination of Jorge. It is breach of this duty which constitutes actionable malpractice. Gotiong. the patient did not respond to the treatment and slipped into cyanosis. RULING: Petitioner’s action is for medical malpractice. which could be due to allergic reaction or chloromycetin overdose. of said antibiotic. Antibiotics being the accepted treatment for typhoid fever. she ordered the first 500 mg. Marivie Blanes. Vacalares may have had extensive experience in performing autopsies. Four elements involve in medical negligence cases. who gave Jorge a physical examination and took his medical records. Blanes was called as Jorge’s temperature rose to 41 degrees and then valium was administered. It is also plain from his testimony that he treated only about three cases of typhoid fever. In this case. Jorge died. It is a form of negligence which consists in the failure of the physician or surgeon to apply to his practice of medicine that degree of care and skill which is ordinarily employed by the profession. and proximate causation. 130547 October 3. Vacalares. a standard test for typhoid fever. Suspecting that Jorge could be suffering from this disease. At around 2:00 a. The results of the test from which Dr. the two doctors presented by respondents clearly were experts on the subject. there is no doubt that physician-patient relationship existed between respondent doctors and Jorge Reyes. she ordered that a compatibility test with the antibiotic chloromycetin be done on Jorge. He testified that Jorge did not die of typhoid fever but of shock undetermined. breach. Dr. the determination of reasonable level of care and breach thereof. carelessness. a resident physician and admitting physician on duty. and lack of skill or foresight on the part of the defendants.

he underwentcolostomy which enabled him to excrete through a colostomy bag attached to the side of his body. Jr. The surgical team consisted of Dr. Marilyn did not depart from the reasonable standard recommended by the experts as she in fact observed the due care required under the circumstances. He subsequently went into a coma which lasted for two weeks. v. Solidum guilty beyond reasonable doubt of reckless imprudence resulting to serious physical injuries. When he regained consciousness after a month. a greater accuracy through repeated testing was rendered unobtainable by the early death of the patient. The results of the widal test and the patient’s history of fever with chills for five days. As to the treatment of the disease. complications of the disease could not be discounted. if the 1:320 results of the said test has been presented to him. 1992. Ma. Respondent. in the present case. PEOPLE OF THE PHILIPPINES. 2014 FACTS: On June 2. Gerald Albert Gercayo (Gerald) was born with an imperforate anus. Hence. in the absence of an explanation by the defendant. 192123 : March 10. People. Razon and herein Petitioner Dr. ISSUES: Whether or not the doctrine of res ipsa loquitur applies in this case? Whether the CA correctly affirmed the conviction of Dr. that the accident arose from want of care.R. testified that he has already treated over a thousand cases of typhoid fever. it affords reasonable evidence.Jarcia. It was during the said operation that Gerald experienced bradycardia or an abnormally slow heart rate of less than 60 beats per minute. it remains a standard diagnostic test for typhoid fever and. he could no longer see.University College of Medicine and the Gullas College of Medicine. G. and the accident is such as in the ordinary course of things does not happen if those who have the management use proper care. Three years later or on May 17. Resurreccion. No. 1995. two days after his birth. According to him a case of typhoid fever is suspected using the widal test. Solidum.R. Valea. and Dr. Luz Gercayo (Luz) lodged a complaint for reckless imprudence resulting in serious physical injuries against the attending physicians. here the thing which causes injury is shown to be under the management of the defendant. Solidum. No. Though the widal test is not conclusive. the requisites for the doctrine to apply are Page 166 of 845 . Res ipsa loquitur is literally translated as he thing or the transaction speaks for itself. he stated that chloromycetin was the drug of choice. The CA affirmed the conviction of Dr. The RTC found Dr. G. Luceo. hear. Petitioner. SOLIDUM. were sufficient to give upon any doctor of reasonable skill the impression that the patient had typhoid fever. Solidum for criminal negligence? RULING: The Court held that the application the doctrine of res ipsa loquitur in the case at bar is inappropriate. Dr. Dr. taken with the fact that typhoid fever was then prevalent. he was admitted at the Ospital ng Maynila for a pull-through operation. Abella. 187926 laid down that. Dr. The anesthesiologists included Dr. or move. Tibio. DR. FERNANDO P. Dr. v. He also explained that despite the measures taken by respondents and the intravenous administration of the two doses of chloromycetin.Hence.

500. 171636 defined negligence as the failure to observe for the protection of the interests of another person that degree of care. the first element was undeniably wanting. Rosit went to Cebu on February 19. Dr. Dr. Hence. but did not so inform Rosit supposing that the latter would not be able to afford the same. it is difficult to assess whether the first three elements of medical negligence were present. Pangan. People. Gestuvo knew that there were smaller titanium screws available in Manila. (2) the breach of the duty by the physician failing to act in accordance with the applicable standard of care. who. Gestuvo cut the screws on hand to make them smaller. 1999. Gestuvo to demand a loan to defray the cost of the additional operation as well as the expenses of the trip to Cebu. still suffering from pain and could hardly open his mouth. Penned by Associate During the operation. on January 19. As the operation required the smallest screws available. NILO ROSIT V. The following are the elements of medical negligence: (1) the duty owed by the physician to the patient. whereby such other person suffers injury. there must be a reasonably close and causal connection between the negligent act or omission and the resulting injury. G.. 2015 FACTS: On January 15. GR NO. Dr. Elements 2 and 3 were present in the case at bar. Page 167 of 845 . Rosit went back to Dr. Gestuvo. AND DR. and vigilance that the circumstances justly demand. 1999. 210445 DECEMBER 7. witnesses with special medical qualifications must impart the knowledge necessary to render a fair and just verdict. operated on Rosit. Dr. 1 Rollo. Most medical malpractice cases are highly technical. The dentist who checked Rosit. Dr. (3) the causation. there were no witnesses with special medical qualifications in anesthesia presented. Gaid v. Alleging that the dentist told him that the operation conducted on his mandible was improperly done.Following the procedure. Dr. X-rays done on Rosit two (2) days after the operation showed that the fracture in his jaw was aligned but the screws used on him touched his molar. ROLANDO G. precaution.as follows: (1) the accident was of the kind that does not ordinarily occur unless someone is negligent. Gestuvo used a metal plate fastened to the jaw with metal screws to immobilize the mandible. i. The X-ray soon taken the next day at the Davao Doctors Hospital (DDH) showed that he fractured his jaw.R. Gestuvo gave Rosit ₱4. and (3) the injury suffered must not have been due to any voluntary action or contribution of the person injured.e. and (4) the damages suffered by the patient. (2) the instrumentality or agency that caused the injury was under the exclusive control of the person charged. Rosit was then referred to Dr. opined that another operation is necessary and that it is to be performed in Cebu. Rosit figured in a motorcycle accident. However. In the case at bar. 56-67. a specialist in mandibular injuries. Rosit could not properly open and close his mouth and was in pain. Given the X-ray results. GESTUVO. to act in accordance with the specific norms or standards established by his profession. therefore. No. Gestuvo referred Rosit to a dentist. as created by the physician-patient relationship. The Prosecution failed to prove the existence of the elements of reckless imprudence beyond reasonable doubt. 1999. pp.

Gestuvo himself who referred Rosit to Dr. Pangan treated a molar different from that which was affected by the first operation. More importantly. Dr. both facts are the product of Dr. performed by Dr. The CA finds that Rosit is guilty of contributory negligence in having Dr. Gestuvo installed hit Rosit’s molar. Pangan. Rosit demanded that Dr. No other doctor caused such fact. he did not avail of such items and went ahead with the larger screws and merely sawed them off. Dr. Gestuvo himself referred Rosit to Dr. Gestuvo. Pangan removed the plate and screws thus installed by Dr. The first element was sufficiently established when Rosit proved that one of the screws installed by Dr. in fact. Pangan also extracted Rosit’s molar that was hit with a screw and some bone fragments. Pangan’s participation could not have contributed to the reality that the screw that Dr. Dr.000. Pangan installed. these would not have struck Rosit’s teeth causing him pain and requiring him to undergo a corrective surgery. What the CA overlooked is that it was Dr. he cut the same with a saw.15 Yet. Lastly. Dr.14 He also stated during trial that common sense dictated that the smallest screws available should be used. Gestuvo struck his molar. Gestuvo cut the same. RULING: The essential requisites for the application of the doctrine of res ipsa loquitur are present. Page 168 of 845 . Gestuvo was examined and eventually operated on by Dr. Pangan. ISSUE : Whether the appellate court correctly absolved Dr. Dr. the affidavit of Dr. Gestuvo cannot now go back and say that Dr. Clearly.000 that Rosit would have to spend for the removal of the plate and screws that Dr. had Dr. Pangan operate on him during the healing period of his fractured mandible. Three days after the operation. Dr. he also knew that these screws were available locally at the time of the operation. It was for this issue that Dr. Thus. it is apparent that he negligently placed one of the screws in the wrong area thereby striking one of Rosit’s teeth.In Cebu. Pangan presented by Dr. Pangan. Gestuvo reimburse him for the cost of the operation and the expenses he incurred in Cebu amounting to ₱140. Gestuvo installed hit Rosit’s molar. Nevertheless. whether the screw hit Rosit’s molar because it was too long or improperly placed. indeed. Even assuming that the screws were already at the proper length after Dr.7On his return to Davao. as well as for the ₱50. What is clear is that he suffered because one of the screws that Dr. Anent the second element for the res ipsa loquitur doctrine application. Gestuvo himself before the trial court narrated that the same molar struck with the screw installed by Dr. Gestuvo refused to pay. It was not shown that Rosit’s lung disease could have contributed to the pain. Gestuvo knew that the screws he used on Rosit were too large as. In any event. Gestuvo used the proper size and length of screws and placed the same in the proper locations. In fact. Gestuvo from liability. Rosit was able to eat and speak well and could open and close his mouth normally. Gestuvo’s negligence. the third element that the injury suffered must not have been due to any voluntary action or contribution of the person injured was satisfied in this case. it is sufficient that the operation which resulted in the screw hitting Rosit’s molar was. the first essential requisite is present in this case. An average man of common intelligence would know that striking a tooth with any foreign object much less a screw would cause severe pain. Gestuvo and replaced them with smaller titanium plate and screws.

Clearly then. Page 169 of 845 . the res ipsa loquitur doctrine finds application in the instant case and no expert testimony is required to establish the negligence of defendant Dr.Petitioner was deprived of the opportunity to make an “informed consent” What is more damning for Dr. Gestuvo is his failure to inform Rosit that such smaller screws were available in Manila. Gestuvo. albeit at a higher price.

Dr. When Corazon started to experience mild labor. conducted an internal examination of Corazon and notified Dr. Dr. Dr. was notified of Corazon’s admission. Dr. Then Corazon was brought to the labor room. Estrada applied low forceps to extract the baby. Estrada at his home. which is dangerous complication of pregnancy. an anesthesiologist. Espinola. Dr. Espinola. administered only 2. Dr. he and her husband. who is assisting Dr. 45641 December 19.5 grams of magnesium sulfate. 2006 FACTS: Pregnant with her fourth child. at the rate of eight to ten micro-drops per minute. Estrada ordered for 10 mg. he advised her to immediate admission to the Capitol Medical Center. Upon admission at the CMC. was apprised of Corazon’s condition by telephone. Estrada ordered blood typing and cross matching with bottled blood. The baby came out in a weak and injured condition and consequently had to be intubated and resuscitated. Corazon began to manifest moderate vaginal bleeding which rapidly became profuse. Estrada needed his service but the latter refused. However. Dr. 5% in lactated Ringers’ solution. Estrada. Dr. head of the Obstetrics- Gynecology Department of the CMC. Uy. due Page 170 of 845 . Enriquez. Estrada ordered the injectionof ten grams of magnesium sulfate. a resident physician. Rogelio Nogales executed and signed the Consent on Admission and Agreement and Admission Agreement. Estrada of her findings. While Corazon was on her lat trimester of pregnancy. Upon being informed of Corazon’s profuse bleeding. Dr. After examining Corazon. Espinola ordered immediate hysterectomy. Dr. Corazon Nogales was under the exclusive prenatal care of Dr. Dr. Estrada noted an increase in her blood pressure and development of leg edema indicating preeclampsia. prompted to see Dr. Subsequently he asked if Dr. Corazon’s water bag ruptured spontaneously and started to experience convulsions. Despite refusal he stayed to observe Corazon’s condition. of valium to be administered immediately by intramascular injection. Villaflor. Later he ordered that start of intravenous administration of syntocinon admixed with dextrose. NOGALES VS. CAPITOL MEDICAL CENTER GR No. Estrada.

Thus. Dr. Fuentes to perform hysterectomy upon Natividad. Dr. Upon request to admit Corazon. unless the patient knows. First factor focuses on the hospital’s manifestations and is sometimes described as an inquiry whether the hospital acted in a manner which would lead a responsible person to conclude that the individual who was alleged to be negligent was an employee or agent of the hospital. performed a surgery upon her. The doctrine of apparent authority involves two factors to determine the liability of an independent contractor-physician. Dr. Second. Dr. that the physician is an independent contractor. 1984. arrived about an hour late. CMC granted staff privileges to Dr. readily accommodated the patient and updated Dr. he examined the patient but despite his efforts Corazon died. CMC made Rogelio sign a consent forms printed in CMC letterhead. ISSUE: Whether CMC is vicariously liable for the negligence of Dr. Petitioners filed a case against CMC personnel and physicians on the ground that they were negligent in the treatment and management of Corazon’s condition and charged CMC with negligence in the selection and supervision of defendant physicians and hospital staff. completed the operation Page 171 of 845 . Wherefore the court finds respondent Capitol Medical Center vicariously liable for the negligence of Dr. Ampil diagnosed her to be suffering from “cancer of the sigmoid”. consistent with ordinary care and prudence. Dr. After more than 11 years the Trial Court rendered its judgment finding Dr. Afterwards. It is sometimes characterized as an inquiry on whether the plaintiff acted in reliance upon the conduct of the hospital or its agent. Estrada solely liable for damages. Thus. who then was the Head of the Obstetrics and Gynecology Department of CMC. PROFESSIONAL SERVICES VS. regardless of whether the physician is an independent contractor. The second factor focuses on the patient’s reliance. Fuentes performed and completed the hysterectomy. CMC impliedly held out Dr. Ampil took over. Estrada as a member of its medical staff. In this case. Estrada. During the surgery. 2008 FACTS: On April 04. First. Estrada when it extended its medical staff and facilities. Espinola. Estrada of the patient’s condition. Natividad Agana was admitted at the Medical City General Hospital because of difficulty of bowel movement and bloody anal discharge.to the inclement weather. through its personnel. Estrada’s referral to Dr. he found that the malignancy in her sigmoid area had spread to her left ovary. AGANA GR No. And third. necessitating the removal of certain portions of it. Ampil. RULING: Under the doctrine of apparent authority a hospital can be held vicariously liable for the negligent act of a physician providing care at eh hospital. Dr. Oscar Estrada. 126467 February 11. assisted by the medical staff of Medical City. or should have known. Ampil obtained the consent of Natividad’s husband to permit Dr.

the negligence was proven to have been committed by Dr. The CA affirmed said decision with modification that Dr. During this entire period. After a couple of days. Ampil then directed that the incision be closed. Here. Fuentes only to perform hysterectomy when he (Dr. Dr. however.a foul-smelling gauze which infected her vaginal vault. Fuentes performed the surgery and thereafter reported and showed his work to Dr. As stated before. Natividad’s daughter found a piece of gauze protruding from her vagina. Ampil. Natividad sought the treatment of Polymedic General Hospital thereat Dr. ISSUE: Whether the Court of Appeals erred in absolving Dr. He was about to finish the procedure when the attending nurses informed him that two pieces of gauze were missing. He proceeded to Natividad’s house where he extracted by hand a piece of gauze. Dr. Dr. The Trial Court found the respondents jointly and severally liable. Ampil then resumed operating on Natividad. the operating surgeon is the person in complete charge of the surgery room and all personnel connected with the operation. Fuentes of any liability. the control and management of the thing which caused the injury was in the hands of Dr. After 4 months she was told that she was free of cancer. They then flew back to the Philippines. Fuentes. Gutierrez detected a foreign object in her vagina . Ampil recommended that she consult an oncologist to treat the cancerous nodes which were not removed. Fuentes was no longer in the operating room and had. not Dr. In other words. Two weeks thereafter . Clearly. Ampil was the lead surgeon during the operation of Natividad. Page 172 of 845 . Their duty is to obey his orders. Natividad complained excruciating pain in her anal region. Ampil was the lead surgeon. Under the "Captain of the Ship" rule. Another surgical operation was performed upon her. Fuentes. Dr. She consulted both Dr. RULING: It was duly established that Dr. Fuentes. Ampil saw immediately informed. The operation. but the misplaced gauzes were not found. he was the "Captain of the Ship. Natividad and her husband went to the US to seek further treatment. in fact. Fuentes was dismissed. Ampil and Dr. Ampil and not by Dr. A recto-vaginal fistula had formed in her reproductive organ which forced stool to excrete in her vagina. appeared to be flawed as the attending nurses entered in the corresponding Record of Operation that there were 2 lacking sponge and announced that it was searched by the surgeon but to no avail. He requested the assistance of Dr. A "diligent search" was conducted.and closed the incision. Ampil) found that the malignancy in her sigmoid area had spread to her left ovary. Ampil and Dr. allowed Dr. Spouses Agana filed a complaint against PSI (owner of Medical City). Dr. Ampil. Dr. Dr." That he discharged such role is evident from his following conduct. Fuentes to leave the operating room. left the hospital. Dr. The latter examined it and finding everything to be in order. They told her that the pain was the natural consequence of the surgical operation performed upon her. Fuentes.

Spouses Agana filed a complaint against PSI (owner of Medical City). Ampil recommended that she consult an oncologist to treat the cancerous nodes which were not removed. Ampil saw immediately informed. Afterwards. Dr. 126297 February 11. After 4 months she was told that she was free of cancer. appeared to be flawed as the attending nurses entered in the corresponding Record of Operation that there were 2 lacking sponge and announced that it was searched by the surgeon but to no avail. The CA affirmed said decision with modification that Dr. Another surgical operation was performed upon her. He proceeded to Natividad’s house where he extracted by hand a piece of gauze. The operation. Ampil obtained the consent of Natividad’s husband topermit Dr. completed the operation and closed the incision. During the surgery. he found that the malignancy in her sigmoid area had spread to her left ovary. assisted by the medical staff of Medical City. Ampil diagnosed her to be suffering from “cancer of the sigmoid”. Ampil. Dr. Fuentes performed and completed the hysterectomy. Ampil and Dr. Dr. Natividad complained excruciating pain in her anal region. The Trial Court found the respondents jointly and severally liable. They told her that the pain was the natural consequence of the surgical operation performed upon her. necessitating the removal of certain portions of it. Natividad and her husband went to the US to seek further treatment. Dr.a foul-smelling gauze which infected her vaginal vault. Natividad Agana was admitted at the Medical City General Hospital because of difficulty of bowel movement and bloody anal discharge. COURT OF APPEALS GR No. She consulted both Dr. Thus. Thus. RULING: Page 173 of 845 . PROFESSIONAL SERVICES. Fuentes. Two weeks thereafter . Natividad’s daughter found a piece of gauze protruding from her vagina. Fuentes to perform hysterectomy upon Natividad. After a couple of days. Ampil and Dr. ISSUE: Whether there is an employee-employer relationship in order to hold PSI solidary liable. Fuentes. Natividad sought the treatment of Polymedic General Hospital thereat Dr. 2008 FACTS: On April 04. They then flew back to the Philippines. Dr. Dr. Dr. Dr. Ampil took over. INC. Fuentes was dismissed. A recto-vaginal fistula had formed in her reproductive organ which forced stool to excrete in her vagina. however. 1984. performed a surgery upon her. VS. Gutierrez detected a foreign object in her vagina .

However. The medico-legal said that the injury appeared to be a burn and that a droplight when placed near the skin for about 10 minutes could cause such burn. but just on one side of the arm. so her BP dropped to 40/0. Wherefore PSI and Dr. The hospital indeed made it appear that Dr. While in the recovery room. a hospital is not liable for the negligence of an independent contractor-physician. In the RTC. Ampil was indeed an employee of the hospital. When he asked the nurses about the cause of the injury. together with an assisting resident physician. Cantre. Ampil was its employee when they advertise and displayed his name in the directory at the lobby of the said hospital and that Natividad relied on such knowledge that Dr. it has been proven that the two factors were present. Dr. John David brought Nora to the NBI for a physical examination. DR. This exception is also known as the “doctrine of apparent authority”. The second factor focuses on the patient’s reliance. she was unconscious. Cantre said that what caused the injury was the blood pressure cuff. It is sometimes characterized as an inquiry on whether the plaintiff acted in reliance upon the conduct of the hospital or its agent. While Dr. he was informed that it was due to a burn. performed various medical procedures to stop the bleeding and to restore Nora's BP. she ordered a droplight to warm Nora and her baby. However. the medical director. In general. MILAGROS CANTRE V. Cantre was massaging Nora's uterus for it to contract and stop bleeding. the hospital may be held liable if the physician is the “ostensible” agent of the hospital. her arm would never be the same--the surgery left an unsightly scar. consistent with ordinary care and prudence. The doctrine of apparent authority involves two factors to determine the liability of an independent contractor-physician. an Ob-Gyne specialist and Nora's attending physician. and the injured arm aches at the slightest touch. He dismissed the likelihood that the wound was caused by a blood pressure cuff since the scar was not around the arm. Go filed a complaint for damages against Dr. but the court admitted additional exhibits [consist mostly of medical records produced by the hospital during trial pursuant to a subpoena duces tecum] offered by Page 174 of 845 . Milagros Cantre. Sps. At that time. Nora's injury was referred to a plastic surgeon for skin grafting. Nora's husband John David noticed a fresh gaping wound (2 1/2 x 3 1/2 in) in the inner portion of her left arm near the armpit. Ampil are liable jointly and severally. She then suffered hypovolemic shock. John David filed a request for investigation. her movements are restricted. Dr. Two hours later. parties have rested their respective cases. First factor focuses on the hospital’s manifestations and is sometimes described as an inquiry whether the hospital acted in a manner which would lead a responsible person to conclude that the individual who was alleged to be negligent was an employee or agent of the hospital. In this case. JOHN DAVID AND NORA GO 522 SCRA 547 FACTS: Nora Go gave birth to her 4th child. she suffered profuse bleeding inside her womb due to some placenta parts which were not completely expelled after delivery. and the hospital. SPS.

or else. Dr. provided that the following requisites concur: 1. Cantre] under the captain of the ship doctrine [surgeon in charge of an operation is held liable for his assistants' negligence during the time when they are under the surgeon's control]. it must have been done so negligently as to inflict a gaping wound. only moral damages awarded). since both are within the exclusive control of the physician in charge [Dr. Possibility of contributing conduct which would make plaintiff responsible is eliminated  Wound could only be caused by something external to and outside the control of Nora since she was unconscious while in hypervolemic shock. and this is the first time that Dr. Cantre has been Nora's ob-gyne for her past 3 deliveries. which were not testified to by any witness. Cantre is liable for the injury suffered by Nora Go. and they never set out to intentionally cause injury to their patients. YES RULING: Backgrounder The Hippocratic Oath mandates physicians to give primordial consideration to their patients' well-being. it automatically gives the injured a right to reparation for the damage caused. Cantre is being held liable for damages due to negligence in Page 175 of 845 . HOWEVER. intent is immaterial in these cases because where negligence exists and is proven. This notwithstanding. he is accountable for his acts. Accident is of a kind which ordinarily does not occur absent someone's negligence  Wound not an ordinary occurrence in the act of delivering a baby.The argument that the failed plastic surgery was a measure to prevent complication (and not intended as a cosmetic procedure) does not negate negligence on Dr. Go. the doctrine of res ipsa loquitur allows the mere existence of an injury to justify a presumption of negligence on the part of the person who controls the instrument causing the injury. ISSUE: Whether or not Dr.Sps. could not have happened unless negligence set in somewhere 2. and if a doctor fails to live up to this precept. courts face a unique restraint in adjudicating medical negligence cases because physicians are not guarantors of care. CA affirmed RTC with modification (complaint dismissed with respect to the medical director and the hospital. it could cause an injury similar to what happened to Nora. BP cuff defense does not afford her an escape. Cantre's part. If the wound was caused by the constant taking of BP. The medical practice is to deflate the cuff immediately after use. RTC ruled in favor of the spouses. In medical negligence cases. Caused by an instrumentality within defendant's exclusive control  It doesn't matter WON the injury was caused by the droplight or by the blood pressure cuff. 3.

and similar injury.the practice of her profession. DR. June 07. Angelica's right leg was amputated by Dr. fright. osteoblastic type. Jaime Tamayo in order to remove the tumor. Still. RUBI LI v. besmirched reputation. SOLIMAN G. As adjuvant treatment to eliminate any remaining cancer cells. No. respondents' 11-year old daughter. underwent a biopsy of the mass located in her lower extremity at the St. there being fault or negligence. 165279. Following this diagnosis and as primary intervention. social humiliation. SPS. mental anguish. moral damages may be recovered if they are the proximate result of the defendant's wrongful act or omission. is obliged to pay for the damage done. She promptly took care of the wound before infection set in. a high-grade cancer of the bone which usually afflicts teenage children. Since Nora was in a critical condition at that time. Though incapable of pecuniary computation. 2011 FACTS: On July 7. serious anxiety. The New Civil Code provisions applies: NCC 2176. moral shock. wounded feelings. Whoever by act or omission causes damage to another.R. Cantre's elemental concern. her good intentions characteristics do not justify negligence. and hence minimize the chances of recurrence and prevent the disease from spreading to other parts of the patient's body (metastasis). saving her life became Dr. NCC 2217. Moral damages include physical suffering. 1993. Results showed that Angelica was suffering from osteosarcoma. Angelica Soliman. chemotherapy was suggested by Page 176 of 845 . Luke's Medical Center (SLMC).

1993. that her immune system was already weak on account of the malignant tumor in her knee. so specific disclosures such as statistical data. the Court held that there was adequate disclosure of material risks inherent in the chemotherapy procedure performed with the consent of Angelica's parents. Besides. it was specifically averred that petitioner assured the respondents that Angelica would recover in view of 95% chance of healing with and when asked regarding the side effects. Examining the evidence on record. 131588 March 27. hair loss and weakness. Tamayo referred Angelica to another doctor at SLMC. Dr. ISSUE: Whether or not Dr. Rubi Li is negligent and is liable for damages. (3) as a direct and proximate result of the failure to disclose. and (4) plaintiff was injured by the proposed treatment. Dr. it is difficult to give credence to respondents' claim that petitioner told them of 95% chance of recovery for their daughter. as it was unlikely for doctors like petitioner who were dealing with grave conditions such as cancer to have falsely assured patients of chemotherapy's success rate. Leo Marbella. However. (2) he failed to disclose or inadequately disclosed those risks. petitioner mentioned only slight vomiting. informed consent laws in other countries generally require only a reasonable explanation of potential harms. Further. may not be legally necessary.On the other hand. In dismissing the complaint. Jose Ledesma. 2001 FACTS: Page 177 of 845 . health and welfare by their careless administration of the chemotherapy drugs. their failure to observe the essential precautions in detecting early the symptoms of fatal blood platelet decrease and stopping early on the chemotherapy. RULING: NO. a certain Dr. just eleven (11) days after the administration of the first cycle of the chemotherapy regimen. a medical oncologist. which bleeding led to hypovolemic shock that caused Angelica's untimely demise. Arriete and SLMC. DELOS SANTOS GR No. 1994." The gravamen in an informed consent case requires the plaintiff to "point to significant undisclosed information relating to the treatment which would have altered her decision to undergo it. the patient consented to treatment she otherwise would not have consented to. she died on September 1. Rubi Li. On August 18. 1993. herein petitioner Dr. Respondents charged them with negligence and disregard of Angelica's safety.Dr. Tamayo. respondents filed a damage suit against petitioner. PEOPLE VS. On February 21. Respondents could not have been unaware in the course of initial treatment and amputation of Angelica's lower extremity. the trial court held that petitioner was not liable for damages as she observed the best known procedures and employed her highest skill and knowledge in the administration of chemotherapy drugs on Angelica but despite all efforts said patient died. There are four essential elements a plaintiff must prove in a malpractice action based upon the doctrine of informed consent: "(1) the physician had a duty to disclose material risks. Mr. Respondents thus claimed that they would not have given their consent to chemotherapy had petitioner not falsely assured them of its side effects. Angelica was admitted to SLMC.

Considering that the incident was not a product of a malicious intent but rather the result of a single act of reckless driving. Nardo Omasas Collantes and Joselito Buyser Escartin. doing or failing to do an act from which material damage results by reason of inexcusable lack of precaution on the part of the person performing or failing to perform such act. thus forcing the rear hitting. unable to defend themselves. from a distance of 100 meters away from the jogger’s rear portion. this time putting off its headlights. and the other consistent with his guilt or graver responsibility the Court should adopt the explanation which is more favorable to the accused. RULING: It is a well-entrenched rule that if the inculpatory facts are capable of two or more explanations one consistent with the innocence or lesser degree of liability of the accused. the law imposes a duty on the actor to refrain from that course or to take precautions to guard against its mischievous results. he proceeded to operate his driven vehicle (an Isuzu Elf) on high speed directly towards the joggers. wearing black T-shirts and black short pants. because the accused ran or moved his driven vehicle on the direction of the backs of the PNP joggers in spite of the continuous warning signals made by six of the joggers. from one trainee to another. by continuously waving their hands at the accused for him to take the left lane of the highway. going to the City proper. Cagayan de Oro City. undergoing a Special Training Course (Scout Class 07-95). instead of applying his brake. Bukidnon. breaking said windshield. multiple frustrated murder. acting as guards. running in a column of 3. Waldon Sinda Sacro. but which accused failed and refused to heed. and the failure to do so constitutes negligence. bumping. Article 48 of the Revised Penal Code provides that when the single act constitutes two or more grave or less grave felonies. Artemio Jamil Villaflor. and upon being aware that bodies of the victims flew on the windshield of his driven vehicle. performing an "Endurance Run" of 35 kilometers coming from their camp in Manolo Fortich. and multiple attempted multiple murder. more or less. continued to travel on a high speed. (2) his degree of intelligence. Since Article 48 speaks of felonies. thus forming a three lines. the same to be applied in its maximum period. instead. Reasonable foresight of harm. or when an offense is a necessary means for committing the other. foresee harm to the person injured as a reasonable consequence of the course actually pursued? If so. but without malice. with a distance of two feet. with a length of more or less 50 meters from the 1st man to the last man. followed by the ignoring of the admonition born of this prevision. heading to Regional Training Headquarters in Camp Alagar. Page 178 of 845 . the penalty for the most serious crime shall be imposed. (4) his physical condition. namely: PO1 Allan Tabacon Espana. in the position of the person to whom negligence is attributed. causing the bodies to be thrown towards the windshields of said Isuzu Elf. Accused showed an inexcusable lack of precaution. ISSUE: Whether or not accused is guilty beyond reasonable doubt of the complex crime of multiple murder. thus hitting the succeeding joggers on said 1st line. it is applicable to crimes through negligence in view of the definition of felonies in Article 3 as "acts or omissions punishable by law" committed either by means of deceit {dolo) or fault (culpa). as a result thereof killed them. and (3) other circumstances regarding persons. who were at the rear echelon of said run.The test for determining whether a person is negligent in doing an act whereby injury or damage results to the person or property of another is this: Could a prudent man. Lemuel Ybanez Pangca. or ramming the first four (4) victims. Philippine National Police (PNP). should be held guilty of the complex crime of reckless imprudence resulting in multiple homicide with serious physical injuries and less serious physical injuries. taking into consideration (1) his employment or occupation. is always necessary before negligence can be held to exist. Article 365 of the Revised Penal Code states that reckless imprudence consists in voluntarily. time.

however. While not explicitly stated that the suit was for damages based on quasi-delict. Liability under A2180. CC to recover damages primarily from LG Foods as employers responsible for their negligent driver pursuant to A2180. they failed to exercise due diligence in the selection and supervision of their employees. It then said that the complaint purports to exact responsibility for fault or negligence under A2176. The case was then dismissed. it denied the motion for reconsideration of the matter. the spouses had no cause of action. however. Plus. Since such condition was not fulfilled due to the latter’s death. An information for reckless imprudence resulting to homicide was filed against the driver before the Bacolod MTCC. Charles died as a result of the accident. The CA. they argued that the complaint was a claim for subsidiary liability against an employer under A1035. In their defense. Before the trial could be concluded. CC. such as conviction and insolvency of the accused employee. and not conditioned upon prior recourse against the negligent employee or showing of insolvency. was hit by a Ford Fiera van owned by LG Foods Corporation (LG Foods) and driven by their employee. as such. The trial court denied the motion for lack of merit. 1999. RPC and. which is entirely separate and distinct from civil liability arising from negligence under the A103. RULING: The case is a negligence suit brought under A2176. affirmed the RTC decision ruling that the complaint by the spouses does not purport to be based on subsidiary liability since the basic elements of such liability. Charles Vallereja. LG Foods then went on certiorari to the CA alleging grave abuse of discretion of the part of the trial judge. 1996. AGRAVIADOR (2006) 503 SCRA 170 FACTS: On February 26. ISSUE : Whether the cause of action of the Vallejera spouses is founded on CC or RPC. Also in their motion to dismiss. it alleged gross fault and negligence on the part of the Page 179 of 845 . LG FOODS V. RPC. LG Foods denied liability by claiming to have exercised such diligence and prayed for dismissal for lack of cause of action. The obligation imposed by A2176 is demandable not only for one's own acts or omissions. Thus. CC is direct and immediate. were not even alleged in said complaint. CC. Also. the accused driver committed suicide. Vincent Norman Yeneza y Ferrer. but also for those of persons for whom one is responsible. the spouses Vallejera filed a complaint for damages against LG Foods alleging that as employers. a 7-year old son of the Vallejera spouses. the employer is liable for damages caused by his employees. there must first be a judgment of conviction against their driver to hold them liable. Nothing in the allegations in the complaint suggests that the LG Foods are being made to account for their subsidiary liability under Article 103 of the Revised Penal Code. On June 23. they argued. the complaint did not even aver the basic elements for the subsidiary liability of an employer under said provision.

Aligada were able to import from Japan with the assistance of the plaintiff and his Japanese business associates the necessary taximeters for defendant's taxicabs in partial fulfillment of defendant's commitments with the U. made representations with the plaintiff herein to the effect that defendant desired to procure from Japan thru the plaintiff herein the needed radio transceivers and to this end. Subic Bay. and because of the experience of the plaintiff in connection with his various. as employers. also acting as agent of the defendant. for the operation of a fleet of taxicabs. Subic Bay. Navy. Isidro Q. Philippines. Subic Bay. contracts with the U.S. acting as agent of the defendant herein conducted the necessary project studies on how best the defendant may meet the requirements of his contract with the U. Philippines. It was further alleged that LG Foods is civilly liable for the negligence/imprudence of their driver since they failed to exercise the necessary diligence required of a good father of the family in the selection and supervision of their employees. the plaintiff's assistance in this matter having been given to the defendant gratis et amore. Navy Exchange. Isidro Q. a copy of which is hereto attached marked as Annex 'A' and made an integral part of this complaint. MEDIALDEA L-37120 April 20. Since it is as if there was no criminal case to speak of due to its premature termination. all taximeters and radio transceivers needed by the defendant in connection with his contract with the U. LG Foods has been alleging that "they had exercised due diligence in the selection and supervision of [their] employees. be they of local origin or imported either from the United States or from Japan. each taxicab to be provided with the necessary taximeter and a radio transceiver for receiving and sending of messages from mobile taxicab to fixed base stations within the Naval Base at Subic Bay. In a methodical and logical sequence. It further avers that while petitioner had fulfilled his part of the bargain. which diligence. could have prevented the vehicular accident that resulted to the death of their 7-year old son.S. Subic Bay. Aligada. the fact that there was no prior reservation made to institute a separate civil action is of no moment. Aligada. That the defendant herein and his aforesaid agent Isidro Q. CC.S." This defense is an admission that indeed the petitioners acknowledged the private respondents' cause of action as one for quasi-delict under A2180. Navy Exchange. the said Isidro Q.S. and his goodwill already established with the Naval personnel of Subic Bay.S. the defendant entered into a contract with the U. Aligada approached the plaintiff herein in behalf of the defendant and proposed to import from Japan thru the plaintiff herein or thru plaintiff's Japanese business associates. That Isidro Q. ISSUE: Whether or not there is contravention of the terms. Philippines. Navy Exchange. Philippines.S.driver and the failure of LG Foods. Navy with needed materials or goods on time as specified by the U. Subic Bay. Philippines. especially in providing the U.S. 1983 FACTS: That sometime in September 1972. Navy Exchange. MAGAT VS. Philippines. to exercise due diligence in the selection and supervision of their employees. the complaint recites the circumstances that led to the perfection of the contract entered into by the parties. Aligada secured a firm offer in writing dated September 25. Philippines. Navy. if exercised. private respondent failed to Page 180 of 845 . 1972. RULING: We find the test of legal sufficiency of the cause of action adequately satisfied.

ISSUE: Page 181 of 845 . On 4 December 1991. A portion thereof was leased to [Respondent Bernardino Naguiat] sometime in 1970. the other would necessarily suffer loss of his expected profits. or delay. he offered to pay the remaining balance to petitioner but the latter refused and hence. recoverable under the law. negligence. malice or wanton attitude.00.comply with his correlative obligation by refusing to open a letter of credit to cover payment of the goods ordered by him and that consequently. DE MISTICA VS. he shall be liable for those damages that are the natural and probable consequences of the breach of the obligation and which the parties have foreseen or could have reasonably foreseen at the time the obligation was constituted. "fixed and vested" and." The phrase "in any manner contravene the tenor" of the obligation includes any illicit act or omission which impairs the strict and faithful fulfillment of the obligation and every kind of defective performance. He failed to make any payments thereafter. Upon breach of the contract by either of them. he shall be liable for all damages which may be reasonably attributed to the nonperformance of the obligation. Respondents contended that the contract cannot be rescinded on the ground that it clearly stipulates that in case of failure to pay the balance as stipulated. there is no breach or violation committed by them and no damages could yet be incurred by the late Eulalio Mistica. NAGUIAT GR. therefore. Pursuant to said agreement. a correlative duty of the defendant and an act or omission of the defendant in violation of the plaintiff's right.000. Eulalio Mistica entered into a contract to sell with Respondent Naguiat over a portion of the aforementioned lot containing an area of 200 square meters. Since the loss comes into being at the very moment of breach. the essential elements of a cause of action are present. to wit: the existence of a legal right to the plaintiff. Respondent Bernardino Naguiat gave a downpayment of P2. predecessor-in-interest of herein petitioner. If the obligor acted in good faith. On 5 April 1979. his heirs or assigns pursuant to the said document. is the owner of a parcel of land. during the wake of the late Eulalio Mistica. entered into the aforesaid contract with the evident intention of deriving some profits therefrom. Likewise alleged that sometime in October 1986. petitioner suffered not only loss of his expected profits. with consequent injury or damage to the latter for which he may maintain an action for recovery of damages or other appropriate relief. but moral and exemplary damages as well. Eulalio Mistica died sometime in October 1986. The damages which the obligor is liable for includes not only the value of the loss suffered by the obligee [daño emergente] but also the profits which the latter failed to obtain [lucro cesante]. No 137909 December 11. Indisputably. petitioner filed a complaint for rescission alleging inter alia: that the failure and refusal of respondents to pay the balance of the purchase price constitutes a violation of the contract which entitles her to rescind the same. VDA. the parties. and those who in any manner contravene the tenor thereof are liable for damages. both businessmen. such loss is real.000. that [respondents] have been in possession of the subject portion and they should be ordered to vacate and surrender possession of the same to petitioner. He made another partial payment of P1. 2003 FACTS: Eulalio Mistica. and in case of fraud.00 on 7 February 1980. a yearly interest of 12% is to be paid. bad faith. Article 1170 of the Civil Code provides: "Those who in the performance of their obligation are guilty of fraud. From these allegations.

000. nor a stipulation giving the vendor the right to unilaterally resolve the contract the moment the buyer fails to pay within a fixed period. as partial payment of the purchase price. ISSUE: Page 182 of 845 . Muntinlupa.000. New Alabang Village. which was well within the ten-year period. the CA held that respondents did not breach the Contract of Sale. plaintiff paid to the defendants the amounts of $1. Moreover. in order that the same may be reserved for her purchase.000. plaintiff paid to the defendant Melody Co in the United States. Leopoldo Cotaco. According to the appellate court.000. because the Contract had stipulated that payment -.000. demanding that she pay the balance of $70.00 and not receiving any response thereto. and shortly before she left for the United States. 1984 and the balance of $60.00 on December 4. One week thereafter. It explained that the conclusion of the ten-year period was not a resolutory term. 1985.. The transaction between Eulalio Mistica and respondents.with interest of 12 percent -.00. CA GR No. for and in consideration of the sum of $100. because they had already transferred the land title to their names. rescission would be unjust to respondents. 112330 August 17. We disagree. CO VS. wrote a letter to the plaintiff dated March 15. said lawyer wrote another letter to plaintiff dated August 8. because respondents committed a substantial breach when they did not pay the balance of the purchase price within the ten-year period. said earnest money to be deducted from the total purchase price. was to order them to pay the balance of the purchase price.00 on January 5. Metro Manila. A deed of sale is considered absolute in nature when there is neither a stipulation in the deed that title to the property sold is reserved to the seller until the full payment of the price. The purchase price of $100. the CA held. although the period of payment had already expired.00 as earnest money.00. 1985.000. RULING: Disallowing rescission. On January 25. with 12 percent interest. Petitioner claims that she is entitled to rescind the Contract under Article 1191 of the Civil Code.00 is payable in two payments $40. Defendant’s counsel.could still be made if respondents failed to pay within the period. The proper recourse.00 and P40. 1999 FACTS: Plaintiff entered into a verbal contract with defendant for her purchase of the latter’s house and lot located at 316 Beata St. informing her that she has lost her ‘option to purchase’ the property subject of this case and offered to sell her another property. Whether petitioner may rescind the contract.000. 1986. The CA further ruled that rescission in this case would be unjust to respondents. because a certificate of title had already been issued in their names. petitioner did not disprove the allegation of respondents that they had tendered payment of the balance of the purchase price during her husband’s funeral.000. Atty. as evidenced by the Kasulatan. was clearly a Contract of Sale. the sum of $30. 1985.

No. Felisa sold the whole lot to the Funcions. Article 1479. which is to restore the parties in their former situations. he left a 589-square meter untitled lot in Sta. G. the property involved has not been delivered to the appellee. With the deed of sale in their favor and the tax declaration transferred in their names. the Funcions mortgaged the lot with the DBP. An option is a contract granting a privilege to buy or sell within an agreed time and at a determined price. the DBP foreclosed the mortgage on the lot and consolidated ownership in its name on June 17. DEVELOPMENT BANK OF THE PHILIPPINES.00 paid by Custodio pursuant to the “option” granted to her over the Beata property? RULING: The COS’ main argument is that Custodio lost her “option” over the Beata property and her failure to exercise said option resulted in the forfeiture of any amounts paid by her pursuant to the August letter. QUIRONGv. Sofia Quirong waived any warranty against eviction. 1985 letter sent by the COS through their lawyer to the Custodio reveals that the parties entered into a perfected contract of sale and not an option contract. Felisa Dalope (Felisa) and their nine children. Barbara. She has therefore nothing to return to the appellants. the March 15.Four years later or on September 20. In their contract of sale. for such is a consequence of rescission.To enable Rosa and her husband Antonio Funcion (the Funcions) get a loan from respondent Development Bank of the Philippines (DBP).00. to his wife. On February 12.000. An accepted unilateral promise to buy or to sell a determinate thing for a price certain is binding upon the promissor if the promise is supported by a consideration distinct from the price. 1981. after the Funcions failed to pay their loan. 2009 FACTS: When the late Emilio Dalope died. one of whom was Rosa Dalope-Funcion. In the case at bar. The contract provided that the DBP did not guarantee possession of the property and that it would not be liable for any lien or encumbrance on Page 183 of 845 . 1983 the DBP conditionally sold the lot to Sofia Quirong\ for the price of P78.” However. 173441 December 3. The price received by the appellants has to be returned to the appellee as aptly ruled by the lower court.000. Represented by ROMEO P. HEIRS OF SOFIA QUIRONG. Whether or not the Court of Appeals erred in ordering the COS to return the $30.R. 1979. Pangasinan.

such as what contracts are about. Gaiterequested that they fix the problem with cooperation from the Plaza but the Reyes. INC. the permit for the construction of the restaurant was revoked for non-compliance with the National Building Code. the Plaza filed a case against Gaite and FGU for breach of contract. Later. Later. the DBP executed a deed of absolute sale of the subject lot in Sofia Quirongs favor. Tayzon. respondents. G. To secure Rhogen's compliance with its obligation. should it instead be given to the Dalopes. 1985. the trial court did not rule on the merits of their claim to the lot and. her heirs (petitioner Quirong heirs) filed an answer in intervention [ in Civil Case D-7159 in which they asked the RTC to award the lot to them and. petitioners. to relief from the DBP. on behalf of the Plaza. The trial court pointed out that Rhogen is not only expected to be aware of standard requirements and pertinent regulations on construction work. 1983 Felisa and her eight children (collectively. Article 1548 of the Civil Code. January 26.600. The RTC ruled in favor of the Plaza saying that instead of rectifying the violations.On December 27. entered into a contract with Rhogen Builders.00. that contract of sale had already been fully performed when Sofia Quirong paid the full price for the lot and when. in Civil Case D-7159. said that it was not their responsibility to help Rhogen after its failure to comply with the construction requirements. 1984. the DBP executed the deed of absolute sale in her favor. On May 11. Subsequently. in violation of the warranty against eviction that comes with every sale of property or thing. Gaite and FGU Insurance corporation executed a surety bond in favor of the Plaza. GAITE. The CA acted correctly in reversing the RTC decision and dismissing their action. The deed of sale carried substantially the same waiver of warranty against eviction and of any adverse lien or encumbrance. ISSUE: Whether or not the heirs of Quirong were entitled to the rescission of the DBPs sale of the subject lot to the late Sofia Quirong as a consequence of her heirs having been evicted from it. THE PLAZA.000. through its president.Rhogen continued with the construction work thereby causing more damage. to allow the Quirong heirs to recover the lots value from the DBP. 2011 FACTS: The Plaza. Reyes. because the heirs failed to file a formal offer of evidence. No. the Dalopes) filed an action for partition and declaration of nullity of documents with damages against the DBP and the Funcions before the Regional Trial Court (RTC) of Dagupan City. notwithstanding the suit. sum of money and damages and also a separate case for nullification of the project development contract. Two months after that sale or on November 28.R. the ejectment of squatters and/or occupants on the lot. Branch 42. RULING: The remedy of rescission is not confined to the rescissible contracts enumerated under Article 1381. Sofia Quirong having since died.00. the option to choose between fulfillment and rescission. Quirong gave a down payment of P14. Because Reyes would neither cooperate with Rhogen to fix the problem nor compensate Rhogen for the percentage of work done. Article 1191 of the Civil Code gives the injured party in reciprocal obligations. This was referred to the Plaza's Project Manager. Actually. the Quirong heirs alleged in their complaint that they were entitled to the rescission of the contract of sale of the lot between the DBP and Sofia Quirong because the decision in Civil Case D-7159 deprived her heirs of nearly the whole of that lot. vs.00. Here. for the construction of a restaurant building in Greenbelt.This point is of course entirely academic but it shows that the Quirong heirs have themselves to blame for the loss of whatever right they may have in the case. But.the same. HEIRS OF RAMON C. There was a turnover of control of the property from DBP to Sofia Quirong since she assumed under their contract. represented by Ramon C. Gaite informed the Plaza that he would be terminating their contract based on the Contractor's Right to Stop Work or Terminate Contracts as provided for in their agreement. Makati for the price of PhP7. in exchange. . Gaite. at her own expense. Gaite was ordered by Engineer Gonzales to stop construction due to violations of the National Building Code. their predecessor. alternatively. CYNTHIA GOROSTIZA GAITE and RHOGEN BUILDERS. 177685. the cause of action of the Quirong heirs stems from their having been ousted by final judgment from the ownership of the lot that the DBP sold to Sofia Quirong. and FGU INSURANCE CORPORATION. but also expressly bound Page 184 of 845 . Jose C.

The breach contemplated in the provision is the obligors failure to comply with an existing obligation. Further. it had no right to terminate the contract based on the Plaza's refusal to compensate it for the percentage of work done. Clearly. the power to rescind is given only to the injured party. the stoppage and revocation orders were issued on account of Rhogens own violations involving the construction as found by the local building official. Petition is DENIED. The injured party is the party who has faithfully fulfilled his obligation or is ready and willing to perform his obligation. city and municipal ordinances and all government regulations. The CA stressed that Rhogen obliged itself to comply with "all the laws. Reciprocal obligations are those which arise from the same cause. Respondent The Plaza predicated its action on Article 1191 of the Civil Code.Rhogen cannot blame The Plaza for its own failure to comply with its contractual obligations. They are to be performed simultaneously such that the performance of one is conditioned upon the simultaneous fulfillment of the other. RULING: The petition is unmeritorious. Page 185 of 845 . construction works were ordered stopped by the local building official and the building permit subsequently revoked on account of several violations of the National Building Code and other regulations of the municipal authorities. a principal action based on breach of faith by the other party who violates the reciprocity between them.itself under the General Construction Contract to comply with all the laws. and in which each party is a debtor and a creditor of the other. Since Rhogen had already breached its contractual obligation by not complying with the National Building Code. Rhogen was thus declared guilty of breaching the Construction Contract and is liable for damages under Articles 1170 and 1167 of the Civil Code. Thus. The CA affirmed the RTC decision saying that the Plaza cannot now be demanded to comply with its obligation under the contract since Rhogen has already failed to comply with its own contractual obligation. which provides for the remedy of "rescission" or more properly resolution. The Plaza had every reason not to pay the progress billing as a result of Rhogens inability to perform its obligations under the contract. ISSUE: Whether the CA erred in not holding that there were valid and legal grounds for Rhogen to terminate the contract pursuant to Article 1191 of the Civil Code and its agreement with the Plaza. Thus. Pursuant to its contractual obligation. just two months after commencement of the project. However. The construction contract between Rhogen and The Plaza provides for reciprocal obligations whereby the latters obligation to pay the contract price or progress billing is conditioned on the formers performance of its undertaking to complete the works within the stipulated period and in accordance with approved plans and other specifications by the owner. such that the obligation of one is dependent upon the obligation of the other. It also exercised the option of furnishing and delivering construction materials at the jobsite pursuant to Article III of the Construction Contract. the work or those engaged thereon. city and municipal ordinances and all government regulations insofar as they are binding upon or affect the parties to the contract. The Plaza furnished materials and paid the agreed down payment.Having failed to complete the project within the stipulated period and comply with its obligations.

petitioner deposited. Despite full payment. It made repeated follow-ups but respondent only showed samples.. petitioner. it did not receive any boxes. 2010 FACTS: In the first quarter of 1998. VS. He followed up the order a few months later. The agreement was not reduced into writing. INC. petitioner wrote a demand letter for reimbursement of the amount paid. one who delivered the bananas to be put on the boxes) During the trial. and that he did not give authority to respondent to deliver the boxes to TADECO because he claims that the same were not yet complete. SOLAR HARVEST.00 in respondent's US Dollar Savings Account with Westmont Bank. Solar Harvest. for the purchase of corrugated carton boxes. Because of the non-delivery of the boxes. as they had agreed. Que admitted that he was not the one who personally placed the order to Jamie Tan (president of respondent). entered into an agreement with Davao Corrugated Carton Corporation. No. sole witness Que. 1998. Eventually. specifically designed for petitioner's business of exporting fresh bananas. thus promised that the production of the order would be rushed. 176868 : July 26. on January 3. US$40. yet respondent said it had full production. and promised to deliver the boxes 30 days from completion. he asked his partner. Que denied that Solar Harvest made an additional order of 24k boxes. he saw that the boxes had no print of petitioner’s logo. on March 31. as full payment for the ordered boxes. He told respondent that it should indeed rush because the need for the boxes was urgent. to cancel the order because it was already too late for them to meet their commitment to ship the bananas to China. at US$1. it filed a complaint for sum of money (refund of the $40k) and damages against respondent. its transaction with China Zero Food for the delivery of bananas to China did not push through. the representative of Solar Harvest. Alfred Ong.10 each. Thus. Inc. To get the production underway. Thereafter.150. testified that when he visited respondent’s factory. Petitioner also claims that the agreement was that it would be respondent who would deliver the boxes to TADECO (Tagum Agricultural Dvpt Corp.R. During cross-examination. 2001. DAVAO CORRUGATED CARTON CORPORATION G. ISSUE: Page 186 of 845 .

no demand is generally necessary because. the evidence having shown that respondent did not commit any breach of its contractual obligation. Art. Based on Art. we therefore relieve respondent from the burden of having to keep the boxes within its premises and. In determining when default occurs. The Complaint only alleged that petitioner made a "follow-up" upon respondent.Whether or not Solar Harvest may be allowed to rescind the contract? RULING: None. which. after petitioner is given 30 days within which to remove them from the premises. In sum. Even assuming that a demand had been previously made before filing the present case. that is. Solar Harvest cannot demand for the refund of its payment. consequently. in reciprocal obligations. the subject boxes are still within respondent's premises. Evident from the records and even from the allegations in the complaint was the lack of demand by petitioner upon respondent to fulfill its obligation to manufacture and deliver the boxes. thus. petitioner's claim for reimbursement would still fail. Thus. 1191 should be taken in conjunction with Art. however. the right to rescind a contract arises once the other party defaults in the performance of his obligation. the default for each obligation must be determined by the rules given in the first paragraph of Art. if the period for the fulfillment of the obligation is fixed. But when different dates for performance of the obligations are fixed. would not qualify as a demand for the fulfillment of the obligation. the Court finds that petitioner failed to establish a cause of action for rescission. as in a contract of sale. as the circumstances would show that respondent was not guilty of breach of contract. give it the right to dispose of them. it was due to petitioner's fault that the boxes were not delivered to TADECO. 1169. As previously stated. The existence of a breach of contract is a factual matter. there is ample showing that the boxes had already been manufactured by respondent. In reciprocal obligations. demand upon the obligee is still necessary before the obligor can be considered in default and before a cause of action for rescission will accrue. contrary to petitioner's allegation. 1191. which in essence is actually a claim for rescission. To put a rest to this dispute. the latter automatically incurs in delay. Thus. even in reciprocal obligations. once a party fulfills his obligation and the other party does not fulfill his. As correctly observed by the CA. 1169 which provides as to when delay is incurred. Page 187 of 845 . the other party would incur in delay only from the moment the other party demands fulfillment of the former's obligation. We also believe that the agreement between the parties was for petitioner to pick up the boxes from respondent's warehouse. the general rule is that the fulfillment of the parties' respective obligations should be simultaneous. Hence.

R. Inc. On June 20. respondent leased from petitioner a space on the ground floor of the RBJ Building for her pawnshop business for a monthly rental of ₱4.00. 1990. 188064. 1988. Page 188 of 845 . June 1. with interest at the rate of 6% a month. TUPARAN G. 2011 FACTS: In December 1989. petitioner mortgaged the subject real properties to the Farmers Savings Bank and Loan Bank. No.00 payable in installments. A close friendship developed between the two which led to the respondent investing thousands of pesos in petitioner’s financing/lending business from February 7.000. 1990.000. 1990 to May 27. REYES v. to secure a loan of ₱2.000. On November 15.

Based on the stipulations of the parties. v. respondent offered the amount of ₱751. G. 1992.200. 1990. 1992.000. defaulted in the payment of her obligations on their due dates. As a gesture of friendship. Petitioner then decided to sell her real properties for at least ₱6.G. FSL Bank shall then issue the corresponding deed of cancellation of mortgage and the petitioner shall execute the corresponding deed of absolute sale in favor of the respondent. CORP. leaving a balance of ₱805. the parties and FSL Bank executed the corresponding Deed of Conditional Sale of Real Properties with Assumption of Mortgage. Respondent’s failure to pay in full the purchase price is not the breach of contract contemplated under Article 1191 of the New Civil Code but rather just an event that prevents the petitioner from being bound to convey title to the respondent. Respondent.the title and ownership of the subject properties remains with the petitioner until the respondent fully pays the balance of the purchase price and the assumed mortgage obligation.00 only payable on September 7.00 as principal on the unpaid installments and ₱466. To compensate for her delayed payments.13. Since December 1990. respondent paid petitioner in small amounts from time to time. Without respondent’s full payment. On September 10.000. which is the respondent’s full payment of the purchase price. 1992. RULING: The Court agrees with the ruling of the courts below that the subject Deed of Conditional Sale with Assumption of Mortgage entered into by and among the two parties and FSL Bank on November 26. respondent had taken possession of the subject real properties and had been continuously collecting and receiving monthly rental income from the tenants of the buildings and vendors of the sidewalk fronting the RBJ building without sharing it with petitioner.000. Thereafter. On September 2. No. SPORTSWEAR MFG. 1992. Tuparan before the RTC. Accordingly. 1990 is a contract to sell and not a contract of sale. G. Reyes filed a complaint for Rescission of Contract with Damages against Victoria T.WORLD CLASS PROPERTIES. respondent had only paid ₱395. respondent agreed to pay petitioner an interest of 6% a month.893.25 as unpaid accumulated interest. Instead of paying the amounts due in lump sum on their respective maturity dates.278.00.R. ISSUE: Whether or not petitioner has the right to rescind of the Deed of Conditional Sale with Assumption of Mortgage.500. Mila A.petitioner’s outstanding account on the mortgage reached ₱2. 2010 FACTS: Page 189 of 845 . as full payment of the purchase price of the subject real properties and demanded the simultaneous execution of the corresponding deed of absolute sale.00 payable on installment basis without interest and to assume the bank loan. there can be no breach of contract to speak of because petitioner has no obligation yet to turn over the title. the petitioner’s obligation to sell the subject properties becomes demandable only upon the happening of the positive suspensive condition. 182720 March 2. On November 26.00 so she could liquidate her bank loan and finance her businesses.078. INC.000. however. respondent verbally offered to conditionally buy petitioner’s real properties for ₱4.000. As of August 31.

272. but suggested the execution of a new Reservation Agreement to reflect the arrangement involving the replacement checks. maintaining that this lack of detail renders the Agreement void on the ground that the intention of the parties cannot be ascertained. World Class denied this request. we note that GG Sportswear signed the Agreement despite the Agreement’s omission to expressly state a specific completion date. This directly implies that a specific completion date was not a material consideration for GG Sportswear when it executed the Agreement. 1997. World Class makes much of the fact that the completion date is not indicated in the Agreement. GG Sportswear did not sign the second Reservation Agreement. World Class countered that the provisional Contract to Sell it previously submitted to GG Sportswear expressly provided for the completion date (December 15. requesting that its check dated April 24. rescission is allowed only when the breach of the contract is substantial and fundamental to the fulfillment of the obligation. GG Sportswear cannot claim that it did not know the time-frame for the project’s completion when it entered into the Agreement with World Class. ISSUE: Whether there was no breach on the part of World Class to justify the rescission and refund.8 GG Sportswear did not object to the execution of a new Reservation Agreement. 1998) and insisted that GG Sportswear pay its overdue account. As to the first ground. but requested that World Class defer the deposit of the replacement checks for 90 days. signed a Reservation Agreement that provides for the schedule of payments. When World Class rejected GG Sportswear’s request. GG Sportswear sent another letter informing World Class that the second Reservation Agreement was incomplete because it did not expressly provide the time of completion of the condominium unit. including the stipulated monthly installments on the down payment and the balance on the purchase price. Gidwani. GG Sportswear requested the return of the outstanding postdated checks it previously delivered to World Class because it (GG Sportswear) intended to replace these old checks with new ones from the corporation’s new bank. did not have an idea of the expected completion date of the condominium project before he bought the condominium units for P89.GG Sportswear offered to purchase the 38th floor penthouse unit and 16 parking slots for 32 cars in World Class's condominium project for the discounted. the parties.82. Page 190 of 845 . even if we believe GG Sportswear’s contention that it was dissatisfied with the completion date subsequently indicated in the provisional Contract to Sell.Unless the parties stipulated it. pre-selling price. we cannot consider this dissatisfaction a breach so substantial as to render the Agreement rescissible. From May to December 1996. RULING: GG Sportswear likewise has no legal basis to demand either the rescission of the Agreement or the refund of payments it made to World Class under the Agreement.624. Thus. After GG Sportswear paid the reservation fee.GG Sportswear anchors its claim for rescission on two grounds: (a) its dissatisfaction with the completion date.In a letter dated January 30. Instead. We disagree with this contention. GG Sportswear timely paid the installments due. 1997 be deposited on May 15. and (b) the lack of a Contract to Sell. It likewise demanded that GG Sportswear immediately pay its overdue January 1997 installment to avoid the penalties provided in the Agreement. the president of GG Sportswear and an experienced businessman. As World Class points out. it sent a letter to World Class. contending that a deferment would delay the subsequent monthly installment payments. 1997 because it was experiencing financial difficulties. Even assuming that GG Sportswear was not aware of the exact completion date. World Class acceded. it is absurd and unbelievable that Mr. Whether the breach is slight or substantial is largely determined by the attendant circumstances.In the first place. with the retention of the other terms and conditions of the old Agreement.

portion that is excluded from the contract as well as the portions covered by the kasunduan which will be subject to reduction of the purchase price. In this case. 2010 FACTS: Pastor alleged that he and Movido executed a contract to sell where Movido agreed to sell a parcel of his land in Cavite. REYES PASTOR GR NO. In other words. ISSUE: Whether or not the validity of a contract will depend on certain stipulations in it RULING: No.731 sq. the 2 contracts that were executed by the parties would reveal that the payment of the purchase price does not depend on the survey of the property. He also claimed that Movido undertook the cause of the survey of the property in order to determine the portion affected by the Napocor power line. On the other hand. the survey of the property to determine the metes and bounds of the 1. Movido alleged that there original negotiation for the sale of his property involved a smaller lot area and that Pastor was in delay in paying several installments and that this is a material breach because they agreed that the survery of the property would only be done after Pastor would have paid the 7 th installment. Pastor also alleged that the contract provided that if a Napocor power line transvered the subject lot. 172279 FEBRUARY 11. m. the purchase price would be lowered. the validity of a contract will not depend on certain stipulations in it. The survey of the property is important only insofar as the right of respondent to the reduction of the purchase price is concerned. MOVIDO v. his unpaid balance could not be determined with certainty. The petitioner also alleged that he already paid more than half of the price and that he was willing and ready to pay the balance of the purchase price but due to petitioner’s refusal to have the property surveyed despite incessant demands. Page 191 of 845 . is also not conditioned on the payment of any installment. the purchase price should be paid whether or not the property is surveyed.

INC. showing that the selling price of the land was only P400. 167874 JANUARY 15.000. 143020 was cancelled and TCT No.000. Finding the offer acceptable. for P3. Despite the Spouses Tongson's repeated demands to either pay the full value of the check or to return the subject parcel of land. Left with no other recourse. Jr.800. Petronilo A. RULING: Page 192 of 845 . To conform with the consideration stated in the Deed of Absolute Sale. T-186128 was issued in the name of EPBI. Davao City a Complaint for Annulment of Contract and Damages with a Prayer for the Issuance of a Temporary Restraining Order and a Writ of Preliminary Injunction. Branch 16. 2010 FACTS: In May 1992. 143020.000.000. SPOUSES TONGSON VS EMERGENCY PAWNSHOP BULA. Napala offered to purchase from the Spouses Tongson their 364-square meter parcel of land. the parties executed another Memorandum of Agreement. Upon signing the Deed of Absolute Sale. she [complained] and called the attention of Napala but the latter told her not to worry as he would be the one to pay for the taxes and she would receive the net amount of P3. the Spouses Tongson executed with Napala a Memorandum of Agreement dated 8 May 1992. which allegedly replaced the first Memorandum of Agreement. Thereafter. GR. situated in Davao City and covered by Transfer Certificate of Title (TCT) No. the Spouses Tongson filed with the Regional Trial Court. When Carmen Tongson noticed that the consideration was very low. When presented for payment. the PNB check was dishonored for the reason Drawn Against Insufficient Funds.000. representing the remaining balance of the purchase price of the subject property.000 in cash to the Spouses Tongson and issued a postdated Philippine National Bank (PNB) check in the amount ofP2. ISSUE: Whether or Not Napala employed fraud which induces the spouses to enter in the sale. TCT No.000.000. Napala paid P200. Napala failed to do either. prepared a Deed of Absolute Sale indicating the consideration as only P400. On 2 December 1992. respondents lawyer Atty. Raganas.

defendant allegedly blocked efforts of the plaintiff by delaying the release of funds from his loan with the DBP and imposing onerous conditions which made it difficult for plaintiff to pursue the construction of the New Gran Hotel. after verification by DBP of the construction progress. Macedas equity infusion was P2. 1976 plaintiff Bonifacio Maceda. the contractor. In effect.5M. allegedly imposed the condition that DBP would choose the building contractor. In the present. there is nodispute as regards the presence of two requisites. (a) determinate subjectmatter. The contractor would directly receive the loan releases from DBP. and (b) price certain in money. plaintiff Maceda executed a promissory note and a mortgage of real estate. The construction of the hotel was never finished. suppliers of equipment and furnishings for the hotel were also to be paid directly by DBP. The period of loan availment was 360 days from date of initial release of the loan. BONIFACIO SANZ MACEDA v. namely. 113498. corresponding to DBP and Macedas respective infusion in the hotel project. was able to rake in a total ofP3. before the then Manila Court of First Instance Branch 39. No. after the building contract with Moreman was already rescinded by the CFI Manila. The fraud was not employed during the negotiationand perfection stages of the sale. 2010 FACTS: It appears that on July 28. namely. it is clearly shown for the record that the spouses agreed to sell the land toNapala who offered to pay the price. Maceda filed a complaint for Rescission of the building contract with Damages against the contractor Moreman. 1977. Moreman Builders Co. Project cost of the New Gran Hotel was P10. RecioGarcia. in-charge of loans for hotels. or 30% of P10.93M. The DBP Governor at that time. 174979 August 11. The construction deadline was set for December 22. but existed in the consummation when the parties arein the process of their respective obligations. (Moreman). the period of availment of the loan expired without the plaintiffs [sic] having availed of the total approved amount of their loan. it was alleged that despite only a 15% accomplishment which should have cost only P700.The issuance of PNB check and fraudulently representation made by Napalacould not be considered as determining cause for the sale of the subject parcel of land.000.358.00. thru the active connivance of the DBP. Upon approval of said loan. It was further alleged that due to such delays on the part of the DBP.5M. DEVELOPMENT BANK OF THE PHILIPPINES G.R. Page 193 of 845 . As regards the requisite which is the consent ofthe parties.3 million to finance the expansion of the Old Gran Hotel in Leyte. which was docketed as Civil Case No. Jr. Similarly. When plaintiff Maceda himself tried to resume the completion and construction of the hotel project. DBP fixed a debt-equity ratio of 70%- 30%. (Maceda) obtained a loan from the defendant DBP in the amount of P7. A valid contract requires occurrence of three elements.174.38 or 60% of the cost of the projected hotel building.

not before. ISSUE: Page 194 of 845 . 1998. 1990 to July 16. We agree with the RTC that it is apparent that such delay in the release of plaintiffs loan is directly attributable to DBP and contributed to the construction delay.267. DBP contributed in the swindling perpetrated by Moreman against the plaintiff because it improperly discharged its duty as verifier of the construction project. instead of Moreman. Thus.In the course of its trading operations.339. it was agreed that payment to Moreman Builders would be assessed against actual construction of the project upon DBPs verification.Issue: Whether the Honorable Court of Appeals was correct in holding DBP liable for the acts of Moreman Builders. Raquel-Santos (Raquel-Santos) was Finvest’s President and nominee to the PSE from February 20. DBP treated its prestation according to its likes and dislikes.99 and to its (Finvest’s) clients within 15 days. RAQUEL-SANTOS v. PSE also or dered Finvest to replace its nominee.10 which is the total unreleased balance of the loan. PSE also received reports that Finvest was not meeting its obligations to its clients. and in failing to release the bigger sum of P1. 2009 FACTS: Finvest is a stock brokerage corporation duly organized under Philippine laws and is a member of the PSE with one membership seat pledged to the latter. PSE demanded from Finvest the payment of its obligations to the PSE in the amount of P4. COURT OF APPEALS G.952. Finvest incurred liabilities to PSE representing fines and penalties for non-payment of its clearing house obligations. the records show that checks were drawn only in the name of Moreman and plaintiffs conformity to fund releases were solicited by DBP after the fact of release. DBP falsely argues that releases on the loan were coursed thru the plaintiff-appellant and the checks were drawn jointly in the names of Maceda and Moreman. In releasing other sums but not the P1. Armand O. Raquel-Santos. 1998. 174986 July 7. ARMAND O.R.489. Direct releases to the plaintiff. PSE indefinitely suspended Finvest from trading.003 million. Consequently. As found by the RTC. No. such that radical rise in construction cost and prices of materials had already caught up with the hotel project. 1998. DBP was also at fault in not releasing the amount of P1. RULING: We find credit in the finding that DBP actively connived with the contractor in the anomalous loan releases. The Securities and Exchange Commission (SEC) also suspended its license as broker.003 Million which had already been approved for release as early as January 1978.3 Annalissa Mallari (Mallari) was Finvest’s Administrative Officer until December 31. began only after Moreman was discharged as contractor.On June 17. Further.

80 as the trial court did in this case. Whether or not rescission is the proper remedy. Rescission creates the obligation to return the object of the contract. RULING: Clearly. indemnity for damages may be demanded from the person causing the loss. Finvest’s failure to deliver the stock certificates representing the shares of stock purchased by TMEI and Garcia amounted to a substantial breach of their contract which gave rise to a right to rescind the sale. it can be carried out only when he who demands rescission can return whatever he may be obliged to restore. In addition. In this case. Neither shall rescission take place when the things which are the object of the contract are legally in the possession of third persons who did not act in bad faith. it is the purchase price that Finvest must return. This is evident from Article 1385 of the Civil Code which provides: ART. which could be in the form of interest on the price paid. Rescission does not merely terminate the contract and release the parties from further obligations to each other. The amount paid was sufficiently proven by the buy confirmation receipts. vouchers.79 Mutual restitution entails the return of the benefits that each party may have received as a result of the contract. and official/provisional receipts that respondents presented in evidence. Rescission creates the obligation to return the things which were the object of the contract. To rescind is to declare a contract void at its inception and to put an end to it as though it never was. consequently. 1385. the law awards damages to the injured party. but abrogates it from the beginning and restores the parties to their relative positions as if no contract has been made. together with their fruits. In this case. Page 195 of 845 . and the price with its interest.

R. Josefina Rocco. INC. G. entitled to demand payment of the loan extended on the security of the pledge before surrendering the jewelry. ("Long Life"). the prudent recourse of the pawnbroker was to file an interpleader suit. of course. The pawnshop ticket issued to Josefina Rocco stipulated that it was redeemable "on presentation by the bearer. If the third person Tomasa de Leon. did not dissolve that duty. who redeemed the things pledged a day after petitioner and the police had notified Long Life."Three months later. pledged the jewelry for P22.00 from Niceta Ribaya. Petitioner claims that Yu An Kiong agreed. Josefina then went to private respondent Long Life Pawnshop. The respondent pawnbroker was. LORETA SERRANO vs. when petitioner was in need of money. Suspecting that it was the same jewelry she had sold to petitioner. petitioner Loreta Serrano bought some pieces of jewelry for P48. verified that indeed her missing jewelry was pledged there and told Yu An Kiong not to permit anyone to redeem the jewelry because she was the lawful owner thereof. Inc. Such a duty was imposed by Article 21 of the Civil Code.000. The circumstance that the pawn ticket stated that the pawn was redeemable by the bearer.00 with its principal owner and General Manager. she instructed her private secretary. of the Civil Code. RULING: Having been notified by petitioner and the police that jewelry pawned to it was either stolen or involved in an embezzlement of the proceeds of the pledge. No. ISSUE: Whether or not the Court of Appeals committed reversible error in rendering its Decision. Petitioner claims she went to private respondent pawnshop. claimed to be owner thereof. upon the assumption that it had Page 196 of 845 .500. impleading both petitioner and Tomasa de Leon. private respondent pawnbroker became duty bound to hold the things pledged and to give notice to petitioner and the police of any effort to redeem them. However. The pawn ticket was not a negotiable instrument under the Negotiable Instruments Law nor a negotiable document of title under Articles 1507 et seq. 45125 1991 Apr 22 FACTS: Sometime in early March 1968. COURT OF APPEALS and LONG LIFE PAWNSHOP. Gloria Duque and Amalia Celeste informed Niceta Ribaya that a pawnshop ticket issued by private respondent was being offered for sale. Niceta informed the latter of this offer and suggested that petitioner go to the Long Life pawnshop to check the matter out. and then absconded with said amount and the pawn ticket. Yu An Kiong. to pawn the jewelry. They told Niceta the ticket probably covered jewelry once owned by the latter which jewelry had been pawned by one Josefina Rocco.

On motion of the plaintiff (Concepcion). refused to execute the requisite deed in favor of her sister.00. 1961. covered by Transfer Certificate of Title (TCT) No. without prejudice to its right to recover damages from Josefina Rocco. Nieves Palma Gil. corresponding to the amount of the loan. The spouses Angel and Nieves Villarica had constructed a two-storey commercial building on the property. or the sum of P26. Concepcion filed a complaint against her sister Nieves for specific performance. On August 2. the spouses Angel and Nieves Villarica executed a real estate mortgage over Lot 59-C-4 in favor of Prudential Bank as security for a loan. In due course. Respondent pawnbroker acted in reckless disregard of that duty in the instant case and must bear the consequences. 59-C. to compel the defendant to cede and deliver to her an undivided portion of the said property with an area of 256. Petitioner is entitled to collect the balance of the value of the jewelry. Hence. ordering the defendant to deliver to the plaintiff an undivided portion of the said property with an area of 256. and her sister.2 square meters. 2003 FACTS: Concepcion Palma Gil. After due proceedings. Iluminada filed a motion for her substitution as party-plaintiff in lieu of the deceased Concepcion. Private respondent Long Life in turn is entitled to seek reimbursement from Josefina Rocco of the amount of the damages it must pay to petitioner PERLA PALMA GIL v.2 square meters. in an appropriate action against Josefina Rocco. the court issued an order granting the motion. 1954 in favor of Concepcion. HON. Nieves appealed to the Court of Appeals which affirmed the assailed decision. In the interim. the decision became final and executory. married to Angel Villarica.500. Nieves. the trial court correctly held that private respondent was liable to petitioner for actual damages which corresponded to the difference in the value of the jewelry and the amount of the loan.given the loan in good faith and was not a "fence" for stolen articles and had not conspired with the faithless Josefina Rocco or with Tomasa de Leon. Concepcion died intestate and was survived by Nieves Villarica and her nephews and nieces. On August 4. however. 1953. 1959. 432 located in Davao City. the court issued a writ of execution. Page 197 of 845 . were the co- owners of a parcel of commercial land with an area of 829 square meters. COURT OF APPEALS G. identified as Lot No. the court rendered judgment on April 7. No. 127206 September 12. On October 13.R.

are not the injured parties entitled to a rescission of the deed of absolute sale. Thus. and the delivery thereof by the vendor Concepcion Gil to the latter. RULING: Under the last paragraph of Article 1169 of the New Civil Code. the payment by the vendee of the agreed purchase price and in the case of the vendor. including the petitioners. The vendee paid the downpayment of P7. but had failed to comply with the obligation. From the moment one of the parties fulfills his obligation.500. JOSE LIM. despite the lapse of eighteen years since Concepcion’s death. including the petitioners. including the petitioners failed to do so. the obligation of the vendee to pay the balance of the purchase price ensued only upon the issuance of the certificate of title by the Register of Deeds over the property sold to and under the name of the vendee. 1959. DAVID REYES vs. When she died intestate on August 4. free from all liens and encumbrances within 120 days from the execution of the deed of absolute sale on October 24. in the case of the vendee. Concepcion failed to secure a certificate of title over the property. The reciprocal obligation envisaged would normally be.ISSUE: Whether or not the rescission made was valid and binding upon the parties. the right to rescind the said contract depends upon the fulfillment or non-fulfillment of the prescribed condition. reciprocal obligations are to be performed simultaneously so that the performance of one is conditioned upon the simultaneous fulfillment of the other. By the terms of the contract. The court ruled that the condition pertains in reality to the compliance by one party of an undertaking the fulfillment of which would give rise to the demandability of the reciprocal obligation pertaining to the other party. in reciprocal obligations. delay in the other begins.The consignation by the vendee of the purchase price of the property is sufficient to defeat the right of the petitioners to demand for a rescission of the said deed of absolute sale. It was Concepcion’s heirs. The said heirs. 408 SCRA 560 FACTS: Page 198 of 845 .00. The right of rescission of a party to an obligation under Article 1191 of the New Civil Code is predicated on a breach of faith by the other party that violates the reciprocity between them. INC. the fulfillment of certain express warranties. neither party incurs in delay if the other does not comply or is not ready to comply in a proper manner with what is incumbent upon him. The deed of absolute sale executed by Concepcion Gil in favor of Iluminada Pacetes is an executory contract and not an executed contract is a settled matter. as successors-in-interest of the vendor. 1956. CHUY CHENG KENG and HARRISON LUMBER. In a perfected contract of sale of realty. her obligation to deliver the said title to the vendee devolved upon her heirs.The petitioners. who were obliged to deliver to the vendee a certificate of title over the property under the latter’s name.

The total consideration for the purchase of the aforedescribed parcel of land together with the perimeter walls found therein P28. on the other hand.000. has nothing to refund. On 9 March 1995.000.000. Pasay City.000.000 monthly penalty would have accumulated and equaled the unpaid purchase price of P18. Harrison Street. RULING: There is also no plausible or justifiable reason for Reyes to object to the deposit of the P10 million down payment in court. Harrison Lumber claimed that as of March 1995. Under Article 1385 of the Civil Code. Reyes also informed Keng and Harrison Lumber that if they failed to vacate by 8 March 1995.782. Keng and Harrison Lumber alleged that Reyes approved their request for an extension of time to vacate the Property due to their difficulty in finding a new location for their business. On 7 November 1994. since Reyes is demanding to rescind the Contract to Sell. ISSUE: Whether or not Reyes has the right to obje t to the deposit of the 10 million pesos downpayment in court. rescission creates the obligation to return the things that are the object of the contract. Such deposit will ensure restitution of the P10 million to its rightful owner. The complaint claimed that Reyes had informed Harrison Lumber to vacate the Property before the end of January 1995. Reyes as seller and Lim as buyer entered into a contract to sell a parcel of land located along F.840. he would hold them liable for the penalty of P400.000 a month as provided in the Contract to Sell. A court of equity will not rescind a contract unless there is restitution. that is. the parties are restored to the status quo ante. Harrison Lumber occupied the Property as lessee with a monthly rental of P35. he cannot refuse to deposit the P10 million down payment in court. as he has not received anything under the Contract to Sell. Thus. Keng and Harrison Lumber denies that they connived with Lim to defraud Reyes.000. Lim learned that Reyes had already sold the Property to Line One Foods Corporation on 1 March 1995 for P16. Rescission is possible only when the person demanding rescission can return whatever he may be obliged to restore. but Reyes kept postponing their meeting. Lim alleged that he was ready and willing to pay the balance of the purchase price on or before 8 March 1995. Lim. On the other hand. Lim rejected Reyes’ offer and proceeded to verify the status of Reyes’ title to the Property. The complaint further alleged that Lim connived with Harrison Lumber not to vacate the Property until the P400. Reyes offered to return the P10 million down payment to Lim because Reyes was having problems in removing the lessee from the Property. it had already started transferring some of its merchandise to its new business location in Malabon. Page 199 of 845 . The Contract to Sell can no longer be enforced because Reyes himself subsequently sold the Property to Line One.00 pesos.B. Both Reyes and Lim are seeking rescission of the Contract to Sell.

No. SEC confirmed the unilateral rescission of the agreement. vs. it was just. 144476 2002 Feb 1 FACTS: Masagana Citimall was owned and managed by the First Landlink Asia Development Corporation (FLADC). Such a seller may not take back his offer if the court deems it equitable. The Ongs gave P100M as payment of their 1 Million subscription shares at a par value of 1 peso per share. to prevent unjust enrichment and ensure restitution. Thus. In order to recover from floundering finances.R. FLADC was fully owned by the Tiu Group. a court may not permit a seller to retain. By seeking rescission. DAVID S. pendente lite. a seller necessarily offers to return what he has received from the buyer.30 square meter contribution and to credit the number of FLADC shares in favor of the Tius commensurate to its 151 square meter property contribution. 902. while the Tius contributing property. the Tiu group entered into a Pre-Subscription Agreement with the Ong group wherein both parties agreed to maintain equal shareholdings in FLADC the Ongs investing cash. TIU et al. ONG YONG et al. The Tius also had to advance P20M. aside from their P100M subscription payment in order to settle the P190M loan of FLADC from PNB.000 shares in FLADC. Thus. equitable and proper for the trial court to order the deposit of the P10 million down payment to prevent unjust enrichment by Reyes at the expense of Lim. RULING: Page 200 of 845 . G. ISSUE: Whether the rescission applies only to reciprocal obligations and the Pre-Subscription agreement does not provide for reciprocity. The Ongs had to pay P70M more. Masagana Telamart transferred titles of 2 properties in favor of FLADC. The Tius rescinded the Pre-Subscription Agreement when the Ongs refused to credit the FLADC shares in the name of Masagana Telamart commensurate to its 1. money paid by a buyer if the seller himself seeks rescission of the sale because he has subsequently sold the same property to another buyer.. respectively. and when David Tius and Cely Tiu were proscribed from assuming and performing their duties as V-P and Treasurer. to put the money in judicial deposit. which amount was loaned to them by the Ongs. Intraland Resources and Development Corporation executed a requisite Deed of Assignment over a building it owned in favor of FLADC and was duly credited with 200.

the correlative obligation of the Tius to let the Ongs have and exercise the functions of the positions of President and Secretary is the obligation of the Ongs to let the Tius have and exercise the functions of Vice-President and Treasurer. 1969. Inc. The Ongs illustrate reciprocity in the following manner: In a contract of sale. Mayfair put up another movie house known as Miramar Theater. EQUATORIAL REALTY DEVELOPMENT. Both leases contained a provision granting Mayfair a right of first refusal to purchase the subject properties. Two years later. Inc. On June 1. the correlative duty of the obligation of the seller to deliver the property is the obligation of the buyer to pay the agreed price. on July 30. however. and two store spaces on the ground floor and the mezzanine. In order for the rescission of the Pre-Subscription Agreement be implemented. The Contract of Lease was likewise for a period of 20 years. on March 31. 1191 of the Civil Code. 1967. the returning to the two groups whatever they delivered to the corporation in accordance with the Agreement is needed. They deny that the Tiu Group has a right to ask for rescission of their agreement per Article 1191 of the Civil Code when they themselves invoke the same law as basis for asking the specific performance of the same agreement. 133879 2001 Nov 21 FACTS: Carmelo & Bauermann. cannot be considered an act of misappropriation. Carmelo entered into a Contract of Lease with Mayfair Theater Inc. the order of the Court of Appeals to return the cash and property contribution of the parties is based on law. Manila. Petitioners keep on harping for the Pre-Subscription Agreement’s specific performance yet they also actually failed to give a legal basis therefor.R. judiciously took into account the special circumstances of the case and further justified its decision confirming the rescission of the Pre-Subscription Agreement on the basis of its perception that the two groups "can no longer work harmoniously together" and that "to pit them together in the management of FLADC will only result to further squabbles and numerous litigation. (Mayfair) for a period of 20 years. However. located at Claro M. It could have relied on the said provision and nonetheless stood on valid ground. Page 201 of 845 . In that space. Mayfair entered into a second Contract of Lease with Carmelo for the lease of another portion of the latter’s property -. The Courts of Appeals then correctly confirmed the rescission of the Pre-Subscription Agreement on the basis of Art. (Carmelo) used to own a parcel of land. Inc. MAYFAIR THEATER. It.. a part of the second floor of the two-storey building.namely. vs. 18529 issued in its name by the Register of Deeds of Manila." As a legal consequence of rescission. Recto Avenue. together with two 2-storey buildings constructed thereon. In the case. G. hence. and covered by TCT No. No.

was rescinded by a judgment rendered by this Court in the mother case. Whether or not the rentals paid concede actual delivery.300. and damages. it was prevented by a legally effective impediment. The objection took the form of a court action impugning the sale which. “fiction yields to reality . The decision of the Court became final and executory on March 17. 1997. without their first being offered to Mayfair. 2. (“Equatorial”) for the total sum of P11. petitioner’s bad faith.within the 20-year-lease term -. It holds true only when there is no impediment that may prevent the passing of the property from the hands of the vendor into those of the vendee.1978 . Carmelo could no longer be located. It has been held that the execution of a contract of sale as a form of constructive delivery is a legal fiction. Mayfair filed a Motion for Execution.the subject properties were sold by Carmelo to Equatorial Realty Development. On the basis of these documents. 1997. it shows that delivery was not actually effected. Mayfair deposited with the clerk of court a quo its payment to Carmelo in the sum of P11. as we know. In this case. Not having been the owner. but by tradition or delivery. However. When there is such impediment. RULING: A contract of sale is valid until rescinded.” Hence. specific performance. Thus.000. The lower court issued a Deed of Reconveyance in favor of Carmelo and a Deed of Sale in favor of Mayfair. On April 25. respondent’s opposition to the transfer of the property by way of sale to Equatorial was a legally sufficient impediment that effectively prevented the passing of the property into the latter’s hands. After trial on the merits. Inc. the Registry of Deeds of Manila cancelled Equatorial’s titles and issued new Certificates of Title in the name of Mayfair. Mayfair filed a Complaint before the Regional Trial Court of Manila for the annulment of the Deed of Absolute Sale between Carmelo and Equatorial. the lower court rendered a Decision in favor of Carmelo and Equatorial. it is clear that petitioner never took actual control and possession of the property sold. In the case. bars the grant of such benefits. petitioner cannot be entitled to the civil fruits of ownership like rentals of the thing sold. Whether or not the contract of sale is validly rescinded though there was no actual delivery made. in fact. On appeal CA completely reversed and set aside the judgment of the lower court. in view of respondent’s timely objection to the sale and the continued actual possession of the property. following the order of execution of the trial court.000 as withholding tax.300. as again demonstrated by the specific factual milieu of said Decision. Furthermore. and ownership of the thing sold is not acquired by mere agreement.000 less P847. which the trial court granted. Page 202 of 845 . As a result of the sale of the subject properties to Equatorial.the delivery has not been effected. ISSUES: 1.

which was. On the same date. as vendee. VELARDE VS. together with the house and other improvements thereon. as vendor. plaintiffs were advised that the Application for Assumption of Mortgage with BPI was not approved. 1986. Mariano. On January 5. plaintiff Avelina Velarde. It is further agreed and understood by the parties that the capital gains tax and documentary stamps on the sale shall be for the account of the vendor. and as part of the above-document. however. with the consent of her husband. subject to BPI’s approval of an application for assumption of mortgage by plaintiffs.8 million was from the proceeds of a loan that plaintiffs were to secure from a bank with defendant’s help. Pursuant to said agreements. however.R. The parties agreed to avail of this. as their nonperformance of their reciprocal obligation to pay the purchase price under the contract of sale. Pending BPI’s approval of the application. DAVID A. 108346 2001 JUL 11 FACTS: David Raymundo is the absolute and registered owner of a parcel of land. for the sale of said property. On August 8. Defendants had a standing approved credit line with the Bank of the Philippine Islands (BPI). under lease. executed an Undertaking. The breach committed by petitioners was not so much their nonpayment of the mortgage obligations. NO. RULING: A substantial breach of a reciprocal obligation entitles the injured party to rescind the obligation. wrote plaintiffs informing the latter that their non-payment to the mortgage bank constituted non-performance of their obligation. a Deed of Sale with Assumption of Mortgage was executed by defendant David Raymundo. which prompted plaintiffs not to make any further payment. Private Respondent George Raymundo is David’s father who negotiated with plaintiffs Avelina and Mariano Velarde. the registration fees and transfer tax thereon shall be for the account of the vendee. RAYMUNDO AND GEORGE RAYMUNDO G. ISSUE: Whether or not the Court of Appeals erred in holding that the rescission (resolution) of the contract by private respondents was justified. Rescission abrogates the contract from its inception and requires a mutual restitution of benefits received. Thereafter. 1987. the petitioners. Private respondents’ right to rescind the contract finds basis in Article 1191 of the Civil Code. defendants sent plaintiffs a notarial notice of cancellation/rescission of the intended sale of the subject property allegedly due to the latter’s failure to comply with the terms and conditions of the Deed of Sale with Assumption of Mortgage and the Undertaking. in favor of plaintiff Avelina Velarde. COURT OF APPEALS. plaintiffs paid BPI the monthly interest on the loan secured by the aforementioned mortgage for three (3) months. whereas. Page 203 of 845 . plaintiffs were to continue paying the monthly interests of the loan secured by a real estate mortgage. defendants. thru counsel. VELARDE AND AVELINA D. It appears that the negotiated terms for the payment of the balance of P1.SPOUSES MARIANO Z.

The right of rescission of a party to an obligation under Article 1191 of the Civil Code is predicated on a breach of faith by the other party who violates the reciprocity between them. 1980. petitioner agreed to pay to PAIC Savings & Mortgage Bank. The private respondents therefore validly exercised their right to rescind the contract.R. However. The breach committed by petitioners was the nonperformance of a reciprocal obligation. PAIC Savings and Mortgage Bank and Mercator Finance Corporation still remained titled in his name. the landholdings of private respondent which were mortgaged to Paluwagan ng Bayan Savings and Loan Association. Upon the execution of the Memorandum. was supposed to be remitted by petitioner to private respondent for the purpose of financing the operations of the piggery pursuant to the Memorandum. EVANGELISTA and COURT OF APPEALS G. He executed a real estate mortgage on three of his properties as security for the loan. 133491 1999 Oct 13 FACTS: On September 9. He refused to honor his obligations under the Memorandum of Agreement and even countered with a demand letter of his own. When the obligor cannot comply with what is incumbent upon it. Instead. Civil Code provisions shall govern and regulate the resolution of this controversy. Private respondents aggregate debt exposure totaled P3.78. not a violation of the terms and conditions of the mortgage contract. 1984. petitioner and private respondent executed a Memorandum of Agreement. the automatic rescission and forfeiture of payment clauses stipulated in the contract does not apply.00 within a ninety-day period in four disbursements.056. The loan was secured by a real estate mortgage on five 5 other landholdings of private respondent. The breach contemplated in the said provision is the obligor’s failure to comply with an existing obligation.000. Instead. On November 4.78 from Mercator Finance Corporation. Private respondent obtained another loan in the amount of P844. private respondent borrowed P500.On August 2. because of the failure of petitioners to comply with their obligation to pay the balance of the purchase price. but private respondent never did. ASUNCION vs. petitioner paid private respondent one million pesos. more than a year after the signing of the Memorandum of Agreement. By June 1984. in the like amount of three hundred thousand pesos. the obligee may seek rescission and. private respondent mortgaged 10 titles more in favor of PAIC Savings and Mortgage Bank. his aggregate debt had ballooned to almost six million pesos. the court shall decree the rescission.625. As to the shares of stock. However. EDUARDO B. ALEXANDER G.625.000 from Paluwagan ng Bayan Savings and Loan Association to use as working capital for Embassy Farms. The second installment. in the absence of any just cause for the court to determine the period of compliance. he defaulted in his loan payments. Considering that the rescission of the contract is based on Article 1191 of the Civil Code. No. ISSUE: Page 204 of 845 . it was incumbent upon private respondent to endorse and deliver them to petitioner so he could also have them transferred in his name. 1981. Therefore. Neither did he inform said mortgagees of the transfer of his lands. mutual restitution is required to bring back the parties to their original situation prior to the inception of the contract. P500.

private respondent was obligated to execute a deed of sale with assumption of mortgage. petitioner sought the rescission of the Memorandum of Agreement and ceased infusing capital into the piggery business of private respondent. such that the obligation of one is dependent upon the obligation of the other. both in compliance with the Memorandum of Agreement and to ensure the legal efficacy of petitioner's promise to assume his loan obligations. They are to be performed simultaneously. Reciprocal obligations. and necessarily the two obligations are created at the same time. COURT OF APPEALS G. 120465. WILLIAM UY VS. RULING: Petitioner and private respondent entered into what the law regards as reciprocal obligations. Reciprocity arises from identity of cause. and in which each party is a debtor and a creditor of the other. Whether the non-compliance of one party in a reciprocal obligation amounts to rescission of the obligation. By virtue of such authority.R. The effect of rescission is also provided in the Civil Code in Article 1385: Private respondent admitted in open court that petitioner paid him the initial sum of one million pesos upon the signing of the Memorandum of Agreement as well as various sums of money as fees for the restructuring of his loans. 1999 314 SCRA 69 FACTS: Petitioners William Uy and Rodel Roxas are agents authorized to sell eight parcels of land by owners thereof. However. NO. Thereupon. Hence. private respondent failed to perform his substantial obligations under the Memorandum of Agreement. so that the performance of one is conditioned upon the simultaneous fulfillment of the other. SEPTEMBER 9. they entered the contract of sale to respondent National Page 205 of 845 . are those which arise from the same cause. therefore. Article 1191 of the Civil Code governs the situation where there is non-compliance by one party in case of reciprocal obligations.

225 million to the land owners as danos perjuicious. due to the report of the DENR the three (3) parcels are located at an active landslide area and not suitable for housing project. The RTC rendered a decision declaring the cancellation of contract to be justified. The National Housing Authority would not have entered into the contract were the lands not suitable for housing. NHA issued a resolution canceling the sale of the three (3) parcels of land but it offered the amount of P1. HELD: The cancellation of the sale was based on the negation of the cause arising from the realization that the land. which were the object of the sale. Upon appeal by the petitioners. In other words. the Court of Appeals dismissed the complaint and cancelled the award for damages. Page 206 of 845 .Housing Authority to be utilized in developing as a housing project. NHA was justified in canceling the contract. were not suitable for housing cause is the essential reason which moves the contracting parties to enter into a contract. it awarded damages to plaintiff. Nevertheless. However. ISSUE: Whether or not the cancellation of the sale has sufficient justifiable basis. the quality of the land was an implied condition for the NHA to enter into the contract. Petitioners filed before the RTC a complaint for damages against NHA.

petitioner Constancia.. TAMAYO v. while his motorcycle was thrown a few meters away. 2010 FACTS: On September 28. No. She testified that it was Cirilo who hired their drivers. Señora (Señora). She claimed that. 1995. was driven by Elmer O. testified on his behalf. The delivery van ran over Señora. at about 11:00 a. CONSTANCIA G. where he was pronounced dead on arrival. the motorcycle was pushed into the path of an Isuzu Elf Van (delivery van). ISSUE: Whether or not damages for loss of earning capacity should be awarded. Polloso (Polloso) and registered in the name of Cirilo Tamayo (Cirilo). and supervision of his employees. ROSALIA ABAD SEÑORA G. on the other hand. Constancia narrated that she and her husband were managing a single proprietorship known as Tamayo and Sons Ice Dealer. 176946 November 15. Antonieto M. as employer. Cirilo would tell their drivers not to drive fast and not to be too strict with customers. when a tricycle allegedly bumped his motorcycle from behind. her husband exercised the due diligence of a good father of a family in the selection. Page 207 of 845 . As a result. The delivery van. Cirilo was suffering from lung cancer and was bedridden. Amparo (Amparo). was riding a motorcycle.The tricycle was driven by Leovino F. He was recovered underneath the delivery van and rushed to the Medical Center of Parañaque.R. including driver Polloso. While trial was ongoing. His wife.m. hiring. who testified that it was the delivery van that bumped Señora’s motorcycle.

MARILOU SPOONER. MYRNA MEDINA. but rather the loss of that portion of the earnings which the beneficiary would have received. OMC CARRIERS. Hence. the RTC erred in modifying the formula and using the retirement age of the members of the PNP instead of "80. This consists not of the full amount of his earnings. JR. G.reasonable and necessary living expenses). the victim’s net income was correctly pegged at 50% of his gross income in the absence of proof as regards the victim’s living expenses. to wit: Net Earning Capacity = life expectancy x (gross annual income . Meanwhile. as dependents and intestate heirs of the deceased. the amount recoverable is not the loss of the victim’s entire earnings. 190521: January 12. ROSALINDA TAN. which is." On the other hand.754.00.RULING: The award of damages for loss of earning capacity is concerned with the determination of losses or damages sustained by respondents. Life expectancy shall be computed by applying the formula (2/3 x [80 . and BONIFACIO ARAMBALA.. The RTC had misapplied the formula generally used by the courts to determine net earning capacity. LETICIA TAN. CELEDONIO TAN. Indemnity for loss of earning capacity is determined by computing the net earning capacity of the victim.R. No. 2011 Page 208 of 845 . Respondents. represented herein by their mother. LETICIA TAN. showing him to have had a gross monthly salary of P12. Thus. gross annual income requires the presentation of documentary evidence for the purpose of proving the victim’s annual income. but of the support which they received or would have received from him had he not died as a consequence of the negligent act. The CA correctly modified the RTC’s computation.Petitioners vs. and MARY JANE TAN. The victim’s heirs presented in evidence Señora’s pay slip from the PNP. MARY OY TAN. INC. and MARK ALLAN AN. MARY LYN TAN.age at death]) adopted from the American Expectancy Table of Mortality or the Actuarial of Combined Experience Table of Mortality.

and c) whether or not the reduction of exemplary damages was proper. Exemplary damages were also reduced. However. The RTC awarded actual damages. Celedonio Tan. Page 209 of 845 . Their home and property were damaged. both on the loss of property and earning capacity of Celedonio. The driver. b) the removal of actual damages for loss of earning capacity was proper. HELD: The petition is partly meritorious. The damages for loss of earning capacity was deleted for being totally unsubstantiated. temperate damages are in order. The reduction of exemplary damages are proper as exemplary damages are not meant to enrich or reduce another party to poverty. ISSUES: Whether or not: a) the reduction of actual damages for loss of property was proper. which crashed into the home of petitioners Tan when its braking mechanism failed. and that there was no motor oil which caused the accident. It is clear and undisputed that they did suffer losses. Also. The provider of the family passed away. The RTC found OMC to be liable. abandoned the truck when the brakes did not work which caused the truck to slam into the home of the Tans.FACTS: Respondent OMC Carriers owned a truck. OMC counters that the truck went out of control because of motor oil spilled on the road. The petitioners clearly suffered damages. Aramballa. since the value of the properties damaged could not be determined with certainty because of the nature of the property. driven by respondent Arambala. that the brake of the truck malfunctioned. Temperate damages are awarded when the exact amount of damages is unknown. the actual damages for loss of property was reduced as they were insufficiently substantiated. Exemplary damages were also awarded. The Tans were unable to present documents to ascertain the amount of earning capacity lost. This caused the death of the head of the family. Upon appeal to the Court of Appeals. The Tans went to court to demand damages due to the negligence of OMC. Temperate damages must be awarded. the damage caused is still undisputed. even if there are no documents supporting the earning capacity of the deceased.

Municipality of Cauayan. respondent hit the old man and the carabao on which he was riding. Subsequently.m. as Andres was crossing the highway. Baguio City. a bus of petitioner Victory Liner. from which bone fragments protruded. Inc. driven by Ricardo C. INC. also guilty of gross negligence in the selection and supervision of Joson. a Dalin Liner bus on the southbound lane stopped to allow him and his carabao to pass. which. Joson. The Victory Liner bus sped past the old man. while the beast toppled over. in a decision rendered on July 17. He was taken by Lorena. Jr. Petitioner and its driver were held liable for damages. the witness.R. while the Dalin bus proceeded to its destination without helping him. 154278 2002 Dec 27 FACTS: Andres Malecdan was a 75 year-old farmer residing in Barangay Nungnungan 2. Jr. at around 7:00 p. private respondents brought suit for damages in the Regional Trial Court. vs. Jr. while Andres was crossing the National Highway on his way home from the farm. with the modification that the award of attorney’s fees was fixed at P50.. ISSUE: Whether or not the award of damages is valid. Malecdan sustained a wound on his left shoulder. On appeal. Branch 5. 2000. found the driver guilty of gross negligence in the operation of his vehicle and Victory Liner. Andres Malecdan was thrown off the carabao. No. On July 15. 1994. the decision was affirmed by the Court of Appeals.000. and another person to the Cagayan District Hospital where he died a few hours after arrival The carabao also died soon afterwards. Province of Isabela. bypassed the Dalin bus. In so doing.. As a result. HEIRS OF ANDRES MALECDAN G. VICTORY LINER.00. RULING: Page 210 of 845 . On October 5. 1994. a criminal complaint for reckless imprudence resulting in homicide and damage to property was filed against the Victory Liner bus driver Ricardo Joson. However.

LABUNG-DEANG G. The trial court found that the wife and children of the deceased underwent "intense moral suffering" as a result of the latter’s death. Under the circumstances of this case an award of P100. SEPTEMBER 17. To justify an award of actual damages.00. did not stop the bus to help the victim. Under Art.R. The court cannot take into account receipts showing expenses incurred some time after the burial of the victim. The loan was secured by a real estate mortgage constituted over the spouses’ property covered by TCT No.000. wake or burial of the victim. Finally. 40th day and 1st year death anniversaries.439. Jr. exemplary damages are awarded. these included the amount of P5. Exemplary damages are imposed not to enrich one party or impoverish another but to serve as a deterrent against or as a negative incentive to curb socially deleterious actions.00. The spouses Deang settled their debt before the maturity date and requested for the release of the owner’s duplicate copy of the title since they intended to secure a loan from a private lender and use the land covered by it as a security but the same could not be found. 2001 365 SCRA 431 FACTS: December 1969. reduce the amount of actual damages to P82. was grossly negligent in driving at such a high speed along the national highway and overtaking another vehicle which had stopped to allow a pedestrian to cross. 2008 of the Civil Code.339. GSIS contended that it being a Government Owned and Controlled Corporation (GOCC). the cost of one pig which had been butchered for the 9th day death anniversary of the deceased. petitioner’s driver Joson. 14926-R. there should be proof of the actual amount of loss incurred in connection with the death. 2231 provides that exemplary damages may be recovered in cases involving quasi-delicts if the defendant acted with gross negligence.00. The court therefore. such as expenses relating to the 9th day.00 as actual damages. 2206 of the Civil Code.00 for moral damages should likewise be reduced. attorney’s fees may be recovered when. the award of P50. In this case.00 as exemplary damages is proper. as in the instant case. Worse. In 1979 the spouses Deang filed with the CFI of Angeles City a complaint against GSIS for damages. The award of P200. after the accident. it could not be held liable. NO. GSIS VS. primarily performing governmental functions.00 for indemnity is in accordance with current rulings of the Court. private respondents are entitled to attorney’s fees. In this case. 135644. the court believe that the trial court’s award of P50. the trial court awarded P88. the spouses Deang obtained housing loan from the GSIS.000. This item cannot be allowed.900. While these were duly supported by receipts. legitimate children and illegitimate descendants and ascendants of the deceased may demand moral damages for mental anguish by reason of the death of the deceased. Art.000. Joson. Under Art.000. Jr. The CFI Page 211 of 845 . On the other hand. Under the circumstances.00 would be in keeping with the purpose of the law in allowing moral damages. the spouse.

Temperate damages may be granted. HELD: GSIS is liable for damages. Actual damages to be compensable must be proved by clear evidence. moral damages are not awarded if defendant is not shown to have acted fraudulently or with malice or bad faith. GSIS and spouses Deang had a loan agreement secured by a real estate mortgage. is liable for a negligent act of its employees acting within the scope of the assigned task.found in favor of the petitioner. In a breach of contract. which was affirmed by the Court of Appeals on appeal by the petitioner herein. definite proof of pecuniary loss cannot be offered. There was a preexisting contract between the parties. The duty to return the owner’s duplicate copy of the title arose as soon as the mortgage was settled. Page 212 of 845 . The rationally behind temperate damages is precisely that from the nature of the case. ISSUE: Whether the GSIS as a GOCC primarily performing governmental functions.

CARREON COMMERCIAL CORP. 19. Petitioner moved for reconsideration but was denied. 1996. The agreement provided that respondent company. 000. On May 25.09 while the said controversy (transactions of the placement) would be checked within the period of five years. respondents D.R. the trial court dismissed both the complaint the counterclaim. 2001 371 SCRA 58 FACTS: Petitioner BPI Investment Corp. 937. however. G. 1982. petitioners without responding to the memorandum and proposal of the respondent company filed with the Court of First Instance of Rizal. The individual respondents. on October 8. G. On May 14. On May 10. 126524. NOVEMBER 29. G. Commercial Corp. spouses Daniel and Aurora Carreon and Josefa Jeceil asked for moral damages because of the filing of complaint and indiscriminate and wrongful attachment of their property. 1982. in the spirit of goodwill. G. petitioner wrote respondents Daniel Carreon. formerly known as Ayala Investment and Development Corp. was a client of petitioner. However. agreed to temporarily reimburse BPI the amount of P410. Respondent D. 1982. On July 30. demanding the return of an alleged overpayment amounting to P410. All respondents asked for exemplary damages. D. BPI INVESTMENT CORPORATION VS. D. Upon the request of petitioners. asserted that there was no overpayment and asked for time to go over the documents and papers. Page 213 of 845 . the Court of Appeals affirmed the dismissal of the complaint but reversed and set aside the dismissal of the counterclaim thereby awarding respondents damages amounting to more than five million in sum. 1982. G. a complaint for recovery of a sum of money against respondent D. Carreon asked for compensatory damages. On April 21. the trial court lifted the writ of attachment. ISSUE: Whether or not respondents are entitled to damages as awarded by the respondent court. G. 937. 1982. the trial court issued an order of attachment and posting a bond in the amount of P200. the spouses Daniel and Aurora Carreon sent to BPI a proposed memorandum of agreement dated May 7.09. NO. 1993. Carreon with preliminary attachment. The respondents. spouses Daniel and Aurora Carreon and Josefa Jaceil also placed with BPI their personal money in money market placements. (BPI). Carreon filed with the trial court an answer to the complaint with counterclaim. 1982. was engaged in money market operations. On July. Both parties appealed.

HELD: The Court finds petitioners not guilty of gross negligence. Khe Hong Cheng vs. 000. cannot be awarded to respondents. with the elimination of award of moral damages.R. fraudulent. March 28. Exemplary damages. oppressive. Temperate or moderate damages may be recovered when the court finds that some pecuniary loss has been suffered but its amount cannot. the Court agrees with the petitioner that such correlation is bereft of basis and is far fetched. that the damages sustained by respondents were due to petitioner’s fault or negligence. The Court deems it prudent to award reasonable temperate damage to respondents under the circumstances. is the owner of Butuan Shipping Lines to which the Philippine Agricultural Trading Corporation used its vessel M/V Prince Eric Corporation to ship 3. Court of Appeals G. As to the filing of the appellate court that the filing of the case was aggravated and eventually caused the death of two of the respondents. Hence. said vessel sank somewhere between Negros Island and Northern Mindanao which resulted to the total loss of the shipment. or in wanton disregard of his contractual obligation. reckless. 144169. Khe Hong Cheng executed deeds of donations of parcels of land in favor of his children. While the case was pending. Insurer Philam paid the amount of P 354. No. Finally. American home filed a case for Page 214 of 845 . which is the value of the copra. As a consequence of a favorable judgment for American Home. or was guilty of gross negligence amounting to bad faith. a writ of execution to garnish Khe Hong Cheng’s property was issued but the sheriff failed to implement the same for Cheng’s property were already transferred to his children. 400 bags was covered by a marine insurance policy issued by American Home Insurance Company (eventually Philam). short of gross negligence. from the nature of the case. however. be proved with certainty. therefore. There is no doubt. Consequently. based on breach of common carriage. or malevolent manner when it asked for preliminary attachment. Petitioner BPI did not act in wanton. 2001 355 SCRA 701 FACTS: Petitioner Khe Hong Cheng. The award of moral damages and attorney’s fees is also not in keeping with existing jurisprudence.400 bags of Copra at Masbate for delivery to Dipolog. alias Felix Khe. so must the award of attorney’s fees be deleted. It was just exercising a legal option. BPI is not to be blamed for the excessive and wrongful attachment. However. to Philippine Agricultural Trading Corporation.00. Such shipping of 3. The sheriff of the issuing court did the execution and the attachment. American Home was thereby subrogated unto the rights of the consignee and filed a case to recover money paid to the latter. Moral damages may be awarded in a breach of contract when the defendant acted in bad faith.

and DEV. the decision of the trial court against the debtor retroacts to the time when the debtor became indebted to the creditor. the action is thereby barred by prescription. Petitioner posited that the registration of the donation was on December 27. the following requisites must concur: (1) the plaintiff asking for rescission has a credit prior to the alienation. has been an accomplice in the fraud. and (5) that the third person who received the property conveyed. American exhausted all the properties of the debtor in futility. and 3) the failure of the sheriff to enforce and satisfy the judgment of the court. The date of the trial court’s decision is immaterial. And since the complaint was filed only in 1997. although demandable late. All the above enumerated elements are present in the case at bar. LEY CONST. if by onerous title.the rescission of the deeds of donation executed by petitioner in favor of children for such were made in fraud of his creditors. ISSUE: whether or not accion pauliana/ rescission of the deed of donation is proper. but would benefit by rescission of the conveyance to the third person. Finally. 1989 and such constituted constructive notice. v. 2) the issuance by the trial court of a writ of execution for the satisfaction of the judgment. In the case at bar. Petitioner answered saying that the action should be dismissed for it already prescribed. (3) that the creditor has no other Legal remedy to satisfy his claim. (2) that the debtor has made a subsequent contract conveying a patrimonial benefit to a third person. Page 215 of 845 . an accion pauliana presupposes the following: 1) a judgment. (4) that the act being impugned is fraudulent. more than four years after registration. What is important is that the credit of the plaintiff antedates that of the fraudulent alienation by the debtor of his property. After all. HELD: For an accion pauliana to accrue. CORP. PHILIPPINE REALTY and HOLDING CORP.

(b) the event must be either unforseeable or unavoidable. the following must concur: (a) the cause of the breach of the obligation must be independent of the will of the debtor. June 13. the two corporations entered into four major construction projects. Abcede replied that he would take this matter up with the board of directors of PRHC. Abcede asked LCDC to advance the amount necessary to complete construction. a contract price escalation for the same amount would be granted in its favor by PRHC. G.63 Page 216 of 845 . ISSUE: Whether or not there is a fortuitous event in the case at bar. or aggravation of the injury to the creditor. to the effect that should it infuse P36 million into the project. On 9 August 1991 Abcede sent a formal letter to LCDC. 165548. asking for its conformity. RULING: YES. LCDC committed itself to the construction of the buildings needed by PRHC. R." These were the four construction projects the parties entered into involving a Project 1. Both parties agreed to enter into another agreement. No. 2011 FACTS: Sometime between April 1988 and October 1989. (c) the event must be such as to render it impossible for the debtor to fulfill his obligation in a normal manner. Project 3 (all of which involve the Alexandra buildings) and a Tektite Building. to exempt the obligor from liability for a breach of an obligation due to an "act of God" or force majeure. Under Article 1174 of the Civil Code. Its president acceded. However. which in turn committed itself to pay the contract price agreed upon. Project 2.The board of directors turned down the request for an escalation agreement. as evidenced by four duly notarized "construction agreements. on the absolute condition that it be allowed to escalate the contract price. and (d) the debtor must be free from any participation in.

v . by letter of May 6. Megaworld. hardware stores did not have enough cement available in their supplies or stocks at the time of the construction in the 1990s. (2) P9. 1998 or April 30. provided that if the construction is completed earlier. leaving unpaid the balance of P2. and (3) the balance of P2.305. (Megaworld) and respondent Mila S. 1995 to January 14.802. she was Page 217 of 845 .50 through 30 equal monthly installments of P308. 1999. or P4. power failures and interruptions of water supply all clearly fall under force majeure. Likewise. Tanseco (Tanseco) entered into a Contract to Buy and Sell1 a 224 square-meter (more or less) condominium unit at a pre-selling project.63 pending delivery of the unit.R. 2009 FACTS: On July 7.037. 181206 October 9.MILA S. INC.64 In the present case. MEGAWORLD GLOBUS ASIA.241. the last day of the six-month grace period. No.32.63 on October 31. typhoons. Inc. Tanseco paid all installments due up to January. by notice dated April 23. petitioner Megaworld Globus Asia.520. 1995.520. 1998. it cannot be held liable for any delay that resulted from the causes aforementioned. Tanseco replied through counsel.305. A few days shy of three years later.000. 1995. by postdated check payable on July 14.120. 1998. The purchase price was P16. failed to deliver the unit within the stipulated period on October 31. Since LCDC could not possibly continue constructing the building under the circumstances prevailing. Megaworld. informed Tanseco that the unit was ready for inspection preparatory to delivery. 2002. that in view of Megaworld’s failure to deliver the unit on time. TANSECO G.940.037. 1998.35 from August 14. however. to be paid as follows: (1) 30% less the reservation fee of P100. the stipulated delivery date of the unit.611.19. The shortage in supplies and cement may be characterized as force majeure. Tanseco would pay the balance within seven days from receipt of a notice of turnover. 2002 (notice of turnover).

as well as business risks.R. 1174. NO. the expiration of the six-month grace period. Megaworld admittedly having failed in its obligation to deliver the unit on the agreed date. SICAM. 159617 August 8. or which.731. 1999. or when it is otherwise declared by stipulation. versus LULU V. or when the nature of the obligation requires the assumption of risk..281. That Megaworld’s sending of a notice of turnover preceded Tanseco’s demand for refund does not abate her cause.C. it is liable therefor. i. INC. not an instance of caso fortuito.70 representing the total installment payment she had made. JORGE and CESAR JORGE G. The Court cannot generalize the 1997 Asian financial crisis to be unforeseeable and beyond the control of a business corporation. SICAM and AGENCIA de R.demanding the return of P14. and to pay the balance of the purchase price at or about the time of delivery on the part of Tanseco. hence. were inevitable. 2007 FACTS: Page 218 of 845 . Megaworld’s excuse for its delay does not thus lie.e. with interest at 12% per annum from April 30. Except in cases expressly specified by the law. ROBERTO C. ISSUE: Whether or not there was a fortuitous event in the case at bar RULING: The Contract to Buy and Sell of the parties contains reciprocal obligations. Article 1174 of the Civil Code provides: Art. A real estate enterprise engaged in the pre-selling of condominium units is concededly a master in projections on commodities and currency movements. 1998 or six months thereafter on the part of Megaworld. Tanseco pointed out that none of the excepted causes of delay existed. Compliance by Megaworld with its obligation is determinative of compliance by Tanseco with her obligation to pay the balance of the purchase price. The fluctuating movement of the Philippine peso in the foreign exchange market is an everyday occurrence. to complete and deliver the condominium unit on October 31. though foreseen. no person shall be responsible for those events which could not be foreseen. Megaworld having failed to comply with its obligation under the contract. For demand would have been useless.

However. Respondent Lulu then requested petitioner Sicam to prepare the pawned jewelry for withdrawal on November 6. It further held that the corresponding diligence required of a pawnshop is that it should take steps to secure and protect the pledged items and should take steps to insure itself against the loss of articles which are entrusted to its custody as it derives earnings from the pawnshop trade which petitioners failed to do and that robberies and hold-ups are foreseeable risks in that those engaged in the pawnshop business are expected to foresee. advance notice must be given to the pawnshop so it could withdraw the jewelry from the bank. filed a complaint against petitioner Sicam with the Regional Trial Court of Makati seeking indemnification for the loss of pawned jewelry and payment of actual. not enough that the event should not have been foreseen or anticipated. To constitute a fortuitous event. 1987 informing her of the loss of her jewelry due to the robbery incident in the pawnshop. (b) it must be impossible to foresee the event that constitutes the caso fortuito or. Sicam. It is therefore. The mere difficulty to foresee the happening is not impossibility to foresee the same. moral and exemplary damages as well as attorney's fees. Inc. After trial . Sicam located at No.C. two armed men entered the pawnshop and took away whatever cash and jewelry were found inside the pawnshop vault.. 1987. as is commonly believed but it must be one impossible to foresee or to avoid. ISSUE: Whether petitioners are liable for the loss of the pawned articles in their possession. On different dates from September to October 1987. 1174 of the Civil Code. RULING: Fortuitous events by definition are extraordinary events not foreseeable or avoidable. Lulu V. respondent Lulu then wrote a letter to petitioner Sicam expressing disbelief stating that when the robbery happened. to secure a loan in the total amount of P59. and. the following elements must concur: (a) the cause of the unforeseen and unexpected occurrence or of the failure of the debtor to comply with obligations must be independent of human will. petitioner Sicam contends that he is not the real party-in-interest as the pawnshop was incorporated on April 20. 500. On November 2. BF Homes Parañaque. 1987.00. Petitioner Sicam sent respondent Lulu a letter dated October 19. Cesar Jorge.the RTC rendered its Decision dismissing respondents’ complaint as well as petitioners’ counterclaim. On September 28. 1987 but petitioner Sicam failed to return the jewelry. Jorge pawned several pieces of jewelry with Agencia de R. if it can be foreseen. 1987 and known as Agencia de R. 17 Aguirre Ave. On October 19. respondent Lulu joined by her husband. 1988. Metro Manila. (c) the occurrence must be such as to render it impossible for the debtor to fulfill obligations in a normal manner. all jewelry pawned were deposited with Far East Bank near the pawnshop since it had been the practice that before they could withdraw. it must be impossible to avoid. C. The RTC held that robbery is a fortuitous event which exempts the victim from liability for the loss and under Art. that petitioner corporation had exercised due care and diligence in the safekeeping of the articles pledged with it and could not be made liable for an event that is fortuitous. Page 219 of 845 . (d) the obligor must be free from any participation in the aggravation of the injury or loss.

Huibonhoa brought an action for reformation of the contract alleging that their true intention as to when the monthly rental would accrue was not expressed due to mistake or accident. And fourth. among others that: (1) Huibonhoa was allowed to construct a four-storey building. 1983. Further. or aggravation of. To exempt the obligor from liability for breach of an obligation due to an “act of God.” the following must concur: first. Also. Florencia Huibonhoa entered into a memorandum of agreement with the siblings Lim. (2) that the said building shall be completed within eight (8) months from the date of the execution of the contract of lease. Thus. It does not foreclose the possibility of negligence on the part of herein petitioners. (6) that the obligation to start paying the rental shall commence only upon completion of the building within the eight-month period. (3) that Huibonhoa shall pay to each lessor the sum of P 300. However. was inevitable. Robbery per se. 000. the robbery in this case took place in 1987 when robbery was already prevalent and petitioners in fact had already foreseen it as they wanted to deposit the pawn with a nearby bank for safekeeping. 1983 and renewable upon agreement of the parties. No. inflation per se. HELD: A fortuitous event is that which could not be foreseen. averring that by reason of such. the monthly rental would be reduced and the term of the lease would be extended for such duration as may be fair and equitable to both the lessor and the lessee. 000. the event must be such as to render it impossible for the debtor to fulfill his obligation in a normal manner. A contract of lease was thereafter executed between the parties. (4) that Huibonhoa shall pay to each lessor P 15. the debtor must be free from any participation in. The presentation of the police report of the Parañaque Police Station on the robbery committed based on the report of petitioners' employees is not sufficient to establish robbery. Manila. Third. does not account that a fortuitous event Page 220 of 845 . stating that she will lease from them three (3) adjacent commercial lots in Binondo. Court of Appeals G. is not a fortuitous event. Gojocco and Chua. petitioners are negligent in securing their pawnshop. the injury to the creditor. the cause of breach must be independent of the will of the obligor. where such lease over the lots shall last for fifteen (15) years commencing on July 1. December 14.00 as monthly rentals. just like carnapping. or even if foreseen. the event must be unforeseeable or inevitable. Florencia Huibonhoa vs. Second. 95897. Such report also does not prove that petitioners were not at fault. it was agreed in the terms and conditions of the contract. 1999 320 SCRA 625 FACTS: On June 8. ISSUE: Whether or not the assassination of former senator Benigno Aquino was a fortuitous event that can thereby lead the parties to reform the contract. the lease contract failed to provide that should an unforeseen event dramatically increase the cost of construction. Further.R.

for Huibonhoa to claim exemption from liability by reason of fortuitous event under Article 1174 of the Civil Code. As a result. There is inflation when there is an increase in the volume of money and credit relative to available parties to the lease contract. which they renewed every year.transpired. damages and/or separation pay. Extraordinary inflation exists when there is a decrease or increase in the purchasing power of the Philippine currency which is unusual or beyond the common fluctuation in the value of said currency. Although she repeatedly alleged that the cost of constructing the building doubled from P 6M to P 12 M. it stood to lose profits and to be held liable to its employees for back wages. she must prove that inflation was the sole and proximate cause of the loss or destruction of the contract or in this case. Huibonhoa failed to prove by evidence. ACE AGRO DEVELOPMENT CORPORATION VS. COURT OF APPEALS G. Further. On April 25. that there was an extraordinary inflation from July 1983 to February 1984. Huibonhoa has no valid ground to ask the Court to intervene and modify the lease agreement to suit her purpose. no decrease in the peso value of such magnitude having occurred. as a result.R. 119729. Petitioner expressed surprise at the termination of the contract and requested private respondent. However. the price index of goods and services had risen during that intervening period. Hence. among other places. petitioner’s work was stopped. Huibonhoa’s contention is untenable. and such decrease or increase could not have been reasonably foreseen or was manifestly beyond the contemplation of the parties at the time of the establishment of the obligation. An extraordinary inflation cannot be assumed. both documentary and testimonial. Petitioner brought this case against private respondent for breach of contract and damages it complained that the termination of its service contract was illegal and arbitrary and that. of the delay in the construction of the building. fire broke out in private respondent’s plant. only when an extraordinary inflation supervenes that the law affords the parties a relief in contractual obligations. NO. the area where petitioner did its work. 1990. Having failed to do so. Ordinary diligence on the part of the parties demanded that they execute a written agreement if indeed they wanted to enter into a new one because of the 15-year life span of the lease affecting real property and the fact that third persons would be affected thereby on account of the express agreement allowing the lessee to lease the building to third parties. destroying. for instance. she failed to show by how much. ISSUE: Page 221 of 845 . Inflation is the sharp increase of money or credit or both without a corresponding increase in business transaction. 1997 266 SCRA 429 FACTS: Petitioner Ace-Agro Development Corporation and private respondent Cosmos Bottling Corporation entered into service contracts. JANUARY 21.

which are the objects of the agreement. the very basis upon which the existence of the obligation is founded would be wanting. because in such cases. It is true that defendant-appellant still had other bottles that needed cleaning and wooden shells that needed repairing. the suspension of the work of the plaintiff-appellee brought about by the fire is. therefore. But the story did not end there. under whose influence the obligation would never have been contracted. Whether the contract terminated on account of a force majeure was justified. RULING: Obligations may be extinguished by the happening of unforeseen events. Hence. 1990 PEDRO DIOQUINO VS. temporary as found by the trial court. plaintiff-appellee’s letters of reconsideration of the termination of the agreement addressed to defendant-appellant dated June 13. FEDERICO LAUREANO Page 222 of 845 . 1990 fire was a force majeure or unforeseen event and that the same even burned practically all the soft drink bottles and wooden shells -. at best. 1990 and July 17. Both parties admitted that the April 25.

Dioquino met patrol officer Federico Laureano in the MVO office in Masbate to register his car. were inevitable. G.R. Dioquino. because Article 1174 of the Civil Code states that “Except in cases expressly specified by the law. No satisfactory arrangements were made about the damage caused on the windshield. ISSUE: The issue is whether or not the breaking of the car’s windshield due to the stone-throwing is a force majeure and thereby exculpating defendant from civil liability in favor of Atty. Page 223 of 845 . no person shall be responsible for those events which could not be foreseen. NO. MAY 28. Dioquino’s car windshield. or when it is otherwise declared by stipulation. 1970 33 SCRA 65 FACTS: Atty. and he also believed that he is not liable for any damages because the incident was a force majeure. L-25906. Thereby. Laureano helped Dioquino in the facilitation of the registration of his car. or which. though foreseen. or when the nature of the obligation requires the assumption of risk. Laureano believed that the stone-throwing was merely accidental so he refused to file any charges against the stone-thrower or the parents. Dioquino lent Laureano his car on a commodatum basis but the car’s windshield was broken due to a stone thrown by some mischievous boys. Laureano cannot be compelled to pay the damages caused on Atty.” The stone-throwing that yielded to the breaking of the windshield was clearly unforeseeable and inevitable. HELD: YES. Hence. Atty.

85691. passengers Ornominio Beter and Narcisa Rautraut were found lying down the road. the bus picked up a passenger. that when the bus stopped. 800 owned by Bachelor Express. and driven by Cresencio Rivera was the situs of a stampede which resulted in the death of passengers Ornominio Beter and Narcisa Rautraut. a passenger at the rear portion suddenly stabbed a PC soldier which caused commotion and panic among the passengers. INCORPORATED VS. The evidence shows that the bus came from Davao City on its way to Cagayan de Oro City passing Butuan City. Butuan City.R. the former already dead as a result of head injuries and the latter also suffering from severe injuries which caused her death later. Inc. Thereafter. 1990 193 SCRA 216 FACTS: On August 1. JULY 31. Bus No. BACHELOR EXPRESS. the heirs of Ornominio Page 224 of 845 . that about fifteen (15) minutes later. COURT OF APPEALS G. 1980. The passenger assailant alighted from the bus and ran toward the bushes but was killed by the police. that while at Tabon-Tabon. NO.

Considering the factual findings of the Court of Appeals-the bus driver did not immediately stop the bus at the height of the commotion. the bus was speeding from a full stop. Inc. The petitioners' argument that the petitioners "are not insurers of their passengers" deserves no merit in view of the failure of the petitioners to prove that the deaths of the two passengers were exclusively due to force majeure and not to the failure of the petitioners to observe extraordinary diligence in transporting safely the passengers to their destinations as warranted by law. RULING: The running amuck of the passenger was the proximate cause of the incident as it triggered off a commotion and panic among the passengers such that the passengers started running to the sole exit shoving each other resulting in the falling off the bus by passengers Beter and Rautraut causing them fatal injuries. the victims fell from the bus door when it was opened or gave way while the bus was still running. in order that a common carrier may be absolved from liability in case of force majeure. the conductor panicked and blew his whistle after people had already fallen off the bus. it is not enough that the accident was caused by force majeure. its alleged owner Samson Yasay and the driver Rivera. and the bus was not properly equipped with doors in accordance with law-it is clear that the petitioners have failed to overcome the presumption of fault and negligence found in the law governing common carriers. However. The common carrier must still prove that it was not negligent in causing the injuries resulting from such accident. Inc.Beter and Narcisa Rautraut. private respondents herein (Ricardo Beter and Sergia Beter are the parents of Ornominio while Teofilo Rautraut and Zoetera [should be Zotera] Rautraut are the parents of Narcisa) filed a complaint for "sum of money" against Bachelor Express. The sudden act of the passenger who stabbed another passenger in the bus is within the context of force majeure. ISSUE: Whether or not Bachelor Express. if any. Page 225 of 845 . The liability. of the petitioners is anchored on culpa contractual or breach of contract of carriage. can be held liable for the death of Beter and Rautraut.

they decided to take a calculated risk. while. they failed to observe that extraordinary diligence required of them explicitly by law for the safety of the passengers Page 226 of 845 . and oblivious of the utmost diligence required of very cautious persons. The event must have been impossible to foresee. L-42926 1985 Sep 13 FACTS: MV 'Pioneer Cebu' was owned and operated by the defendant and used in the transportation of goods and passengers in the interisland shipping. the captain and crew were well aware of the risk they were taking as they hopped from island to island from Romblon up to Tanguingui. the injury to the creditor. They held frequent conferences. although the passengers manifest only listed 106 passengers. resulting on the tallying of 168 adults and 20 minors. It undertook the said voyage on a special permit issued by the Collector of Customs inasmuch as. and that (3) the obligor must be free of participation in. its officers were already aware of the typhoon Klaring building up somewhere in Mindanao. Plaintiffs seek the recovery of damages due to the loss of Alfonso Vasquez. having been kept posted on the course of the typhoon by weather bulletins at intervals of six hours. however. or aggravation of. upon inspection. Filipinas Bagaipo and Mario Marlon Vasquez during said voyage. RULING: To constitute a caso fortuito that would exempt a person from responsibility. must have been impossible to avoid. No. or if it could be foreseen. When the vessel left Manila. (2) the occurrence must render it impossible for the debtor to fulfill the obligation in a normal manner. In so doing. PEDRO VASQUEZ v. yet. A headcount was made of the passengers on board. Under the circumstances. There must be an entire exclusion of human agency from the cause of injury or loss. it was found to be without an emergency electrical power system. THE COURT OF APPEALS G. It has been admitted. that the headcount is not reliable. The special permit authorized the vessel to carry only two hundred sixty passengers due to the said deficiency and for lack of safety devices for 322 passengers.R. It had a passenger capacity of three hundred twenty-two including the crew. ISSUE: Whether or not the respondent would be exempt from responsibility due to its defense of fortuitous event. it is necessary that (1) the event must be independent of the human will. the typhoon was an inevitable occurrence. indeed.

17. the owner of the bus. it was held that the liability of a shipowner is limited to the value of the vessel or to the insurance thereon. On the other hand. The bus fell into a ravine around three (3) feet from the road and struck a tree. its driver.transported by them with due regard for all circumstances and unnecessarily exposed the vessel and passengers to the tragic mishap. before the Regional Trial Court of Davao City. On November 21. Maria. 1988. its insurance answers for the damages that a shipowner or agent may be held liable for by reason of the death of its passengers. The plaintiffs asserted that violation of the contract of carriage between them and the defendants was brought about by the driver's failure to exercise the diligence required of the carrier in transporting passengers safely to their place of destination. Along Picop Road in Km. and physical injuries to other passengers. Sta. ALBERTA YOBIDO vs. The incident resulted in the death of 28-year-old Tito Tumboy. Page 227 of 845 . a Yobido Liner bus bound for Davao City. They failed to overcome that presumption of fault or negligence that arises in cases of death or injuries to passengers. the left front tire of the bus exploded. boarded at Mangagoy. and Cresencio Yobido. the defendants raised the affirmative defense of caso fortuito. 1988.R. Surigao del Sur. Despite the total loss of the vessel therefore. spouses Tito and Leny Tumboy and their minor children named Ardee and Jasmin. Agusan del Sur. No. With regard to the contention that the total loss of the vessel extinguished its liability pursuant to Article 587 of the Code of Commerce. a complaint for breach of contract of carriage. damages and attorney's fees was filed by Leny and her children against Alberta Yobido. ISSUE: Whether or not petitioners should be exempt from liability because the tire blowout was a fortuitous event. 113003 1997 Oct 17 FACTS: On April 26. COURT OF APPEALS G.

the Civil Code provides under Article 1755 that a common carrier is bound to carry the passengers safely as far as human care and foresight can provide.RULING: As a rule. oppressive. Accordingly. 10 1755 and 1756 of the Civil Code or that the death or injury of the passenger was due to a fortuitous event. The petitioners' contention that they should be exempt from liability because the tire blowout was no more than a fortuitous event that could not have been foreseen. a carrier is not an insurer of the safety of its passengers and is not bound absolutely and at all events to carry them safely and without injury. must fail. There are human factors involved in the situation. Neither may the fact that the tire bought and used in the vehicle is of a brand name noted for quality. However. the explosion of the new tire may not be considered a fortuitous event. reckless. The fact that the tire was new did not imply that it was entirely free from manufacturing defects or that it was properly mounted on the vehicle. awarded by way of example or correction for the public good when moral damages are awarded. fraudulent. Thus. Under the circumstances of this case. However. it is deemed to have acted recklessly. the court need not make an express finding of fault or negligence on the part of the carrier to hold it responsible for damages sought by the passenger. the carrier is presumed to have been at fault or to have acted negligently. Because petitioners failed to exercise the extraordinary diligence required of a common carrier. This disputable presumption may only be overcome by evidence that the carrier had observed extraordinary diligence as prescribed by Articles 1733. resulting in the conclusion that it could not explode within five days' use. may likewise be recovered in contractual obligations if the defendant acted in wanton. As such. or malevolent manner. It is settled that an accident caused either by defects in the automobile or through the negligence of its driver is not a caso fortuito that would exempt the carrier from liability for damages. private respondents shall be entitled to exemplary damages. L-45637 1985 May 31 FACTS: Page 228 of 845 . the same damages may be recovered when breach of contract of carriage results in the death of a passenger. After all. with a due regard for all the circumstances. while traveling. which resulted in the death of Tito Tumboy. when a passenger boards a common carrier. in culpa contractual. CLEMENTE FONTANAR G. ROBERTO JUNTILLA vs. once a passenger dies or is injured. when a passenger is injured or dies.R. Consequently. Exemplary damages. Moral damages are generally not recoverable in culpa contractual except when bad faith had been proven. he takes the risks incidental to the mode of travel he has taken. the law presumes that the common carrier is negligent. as in this case. No. using the utmost diligence of very cautious persons.

he immediately entered the Danao City Hospital to attend to his injuries. ISSUE: Whether or not the Court of First Instance of Cebu erred when it absolved the carrier from any liability upon a finding that the tire blow out is a fortuitous event. with regard to inspection and application of the necessary tests. There is also evidence to show that the passenger jeepney was overloaded at the time of the accident. We agree with the observation of the petitioner that a public utility jeep running at a regular and safe speed will not jump into a ditch when its right rear tire blows up. whenever it appears that the defect would have been discovered by the carrier if it had exercised the degree of care which under the circumstances was incumbent upon it. In the process. the plaintiff who was sitting at the front seat was thrown out of the vehicle. the manufacturer is considered as being in law the agent or servant of the carrier. as far as regards the work of constructing the appliance. he found that he had a lacerated wound on his right palm. right thigh and on his back. The preponderance of authority is in favor of the doctrine that a passenger is entitled to recover damages from a carrier for an injury resulting from a defect in an appliance purchased from a manufacturer. In spite of the efforts of his father-in-law. It was registered under the franchise of defendant Clemente Fontanar but was actually owned by defendant Fernando Banzon. According to this theory. Plaintiff was a passenger of the public utility jeepney bearing plate No. The rationale of the carrier's liability is the fact that the passenger has neither choice nor control over the carrier in the selection and use of the equipment and appliances in use by the carrier. RULING: The Court of First Instance of Cebu erred when it absolved the carrier from any liability upon a finding that the tire blow out is a fortuitous event for there are specific acts of negligence on the part of the respondents. Aside from this. For the purposes of this doctrine. the passenger has no Page 229 of 845 . which he bought for P852. The records show that the passenger jeepney turned turtle and jumped into a ditch immediately after its right rear tire exploded. the wrist watch. Having no privity whatever with the manufacturer or vendor of the defective equipment. he went back to Danao City but on the way. he suffered injuries on his left arm. The evidence shows that the passenger jeepney was running at a very fast speed before the accident. When the jeepney reached Mandaue City. and also requested his father-in-law to proceed immediately to the place of the accident and look for the watch. When he came to his senses. The jeepney was driven by defendant Berfol Camoro. the plaintiff momentarily lost consciousness. the good repute of the manufacturer will not relieve the carrier from liability. Because of his shock and injuries. Upon landing on the ground. Upon his arrival in Danao City. he discovered that his `Omega' wrist watch was lost. PUJ-71-7 on the course of the trip from Danao City to Cebu City.70 could no longer be found. the right rear tire exploded causing the vehicle to turn turtle.

and by entering into the said contract.R. The records show that this obligation was not met by the respondents. using the utmost diligence of a very cautious person. while the carrier usually has. INC. the Board rendered its decision exonerating the captain and crew of the ill-fated vessel for any administrative liability. with a due regard for all the circumstances. The following day.remedy against him. while not an insurer of the safety of his passengers. Cortes. After having been cleared by the Coast Guard Station in Cebu the previous day. Surigao del Sur. 1987. The source of a common carrier's legal liability is the contract of carriage. March 3. THE PHILIPPINE AMERICAN GENERAL INSURANCE CO. It was further held by the Board that said fortuitous event was the proximate and only cause of the vessel’s sinking. No. Subsequently. therefore. the vessel left the port of Mandaue City for Bislig. should nevertheless be held to answer for the flaws of his equipment if such flaws were at all discoverable.. 1987. 1989. The Board of Marine Inquiry conducted its own investigation of the sinking of the M/V Peatheray Patrick-G to determine whether or not the captain and crew of the vessel should be held responsible for the incident. INC. RULING: Page 230 of 845 . that the carrier. As a consequence thereof. 135645 2002 Mar 8 FACTS: On March 1. It found that the cause of the sinking of the vessel was the existence of strong winds and enormous waves in Surigao del Sur. vs. San Miguel Corporation claimed the amount of its loss from petitioner. ISSUE: Whether the cargo was lost due to a fortuitous event and whether respondents exercised due diligence to prevent the loss of the cargo. 1987. Surigao del Sur on March 2. and DOROTEO GAERLAN G. On May 11. it binds itself to carry the passengers safely as far as human care and foresight can provide. a fortuitous event that could not have been forseen at the time the M/V Peatheray Patrick-G left the port of Mandaue City. It is but logical. San Miguel Corporation insured several beer bottle cases with petitioner Philippine American General Insurance Company. the cargo belonging to San Miguel Corporation was lost. MGG MARINE SERVICES. Surigao del Sur. The cargo were loaded on board the M/V Peatheray Patrick-G to be transported from Mandaue City to Bislig. M/V Peatheray Patrick-G listed and subsequently sunk off Cawit Point.

or deterioration of the goods. Thus. lightning or other natural disaster or calamity.(3) Act or omission of the shipper or owner of the goods. as a general rule. are mandated to observe extraordinary diligence in the vigilance over the goods and for the safety of the passengers transported by them. Hence. whether international or civil.(2) Act of the public enemy in war. The findings of the Board of Marine Inquiry indicate that the attendance of strong winds and huge waves while the M/V Peatheray Patrick-G was sailing through Cortes. destroyed or if the same deteriorated.(4) The character of the goods or defects in the packing or in the containers. Surigao del Sur. this presumption of fault or negligence does not arise in the cases enumerated under Article 1734 of the Civil Code: Common carriers are responsible for the loss. the Caprain could not be expected to have foreseen the unfavorable weather condition that awaited the vessel in Cortes. It was the presence of the strong winds and enormous waves which caused the vessel to list. The appellate court likewise found that there was no negligence on the part of the crew of the M/V Peatheray Patrick-G. Surigao del Norte on March 3. keel over. unless the same is due to any of the following causes only:(1) Flood. earthquake. Page 231 of 845 . destruction. 1987 was indeed fortuitous. private respondents cannot be held liable for the said loss. storm. Common carriers.(5) Order or act of competent public authority. However. from the nature of their business and for reasons of public policy. common carriers. and consequently lose the cargo contained therein. are presumed to have been at fault or negligent if the goods transported by them are lost. Owing to this high degree of diligence required of them.

it replaced the vehicle’s burned tires and had it towed to a shop for repair and overhauling. hence. respondent pulled out the truck from the repair shop of petitioner and had it repaired elsewhere. both parties may have suffered from the burning of the truck. 138123 March 12. None yielded. however. as found by both lower courts. the truck was burned by unidentified persons while it was parked unattended. No. Petitioner failed to employ reasonable foresight. and unknown to respondent. EPHRAIM MORILLO. A review of the records clearly shows that petitioner failed to exercise reasonable care and caution that an ordinarily prudent person would have used in the same situation. it is necessary that one has committed no negligence or misconduct that may have occasioned the loss. after which they will return the same in good working condition. refused to buy the said truck and offered instead to pay the rentals. Subsequently. An act of God cannot be invoked to protect a person who has failed to take steps to forestall the possible adverse consequences of such a loss. True. When respondent found out about the same. from his own expense. the negligence of petitioner makes it responsible for the loss. which could have been avoided in the first place. Instead. G.R. he offered to sell the truck to petitioner but the latter refused. the gist of which is that the respondent was offering to sell the truck but demanding for the payment of the unpaid rentals and the valued cost of truck. A witness testified how petitioner fell short of ordinary diligence in safeguarding the leased truck against the accident. In order for a fortuitous event to exempt one from liability. repair the truck at their own expense. respondent Facts: A verbal agreement was entered into between respondent and petitioner for the lease of the former’s 6 x 6 ten-wheeler cargo truck for use in the latter’s mining operations. petitioner vs. 2002 MINDEX RESOURCES DEVELOPMENT. Both parties exchanged several offers. due to mechanical trouble. diligence and care that would have exempted it from liability resulting from the burning of the truck. Issue: Whether the burning of the truck was a fortuitous event? Held: No. due to financial constraints. Page 232 of 845 . Both the RTC and the CA found petitioner negligent and thus liable for the loss or destruction of the leased truck. The petitioner on the other hand.

governmental restrictions. storms. No. NAPOCOR once more advertised for the delivery of coal to its Calaca thermal plant. he cannot be held liable for damages for non- performance. PHILIPP BROTHERS. other than the payment of money due. it was clearly established from the evidence. 2001 NATIONAL POWER CORPORATION. the shipments point of origin. PHIBRO delivered the coal supply beyond the prescribed time. there is no reason to rule otherwise. respondent Facts: PHIBRO won in a bid by NAPOCOR bid for the supply and delivery of 120. they defined force majeure as any disabling cause beyond the control of and without fault or negligence of the party. typhoons. Therefore. wars.000 metric tons of imported coal for its Batangas Coal-Fired Thermal Power Plant. PHIBRO and NAPOCOR explicitly agreed in the Bidding Terms and Specifications that neither seller (PHIBRO) nor buyer (NAPOCOR) shall be liable for any delay in or failure of the performance of its obligations. Specifically. This means that when an obligor is unable to fulfill his obligation because of a fortuitous event or force majeure. vs. PHIBRO sent word to NAPOCOR that industrial disputes might soon plague Australia. Issue: Whether the delay in the delivery of imported coal was due to force majeure? Held: Yes. Extant in our Civil Code is the rule that no person shall be responsible for those events which could not be foreseeen. G.R. testimonial and documentary. The law is clear and so is the contract between NAPOCOR and PHIBRO. epidemics and quarantine restrictions. if any such delay or failure is due to Force Majeure. however its application was disapproved by NAPOCOR due to its purported failure to satisfy NAPOCORs demand for damages due to the delay in the delivery of the first coal shipment. 126204 November 20. that what prevented PHIBRO from complying with its obligation under the contract was the industrial disputes which besieged Australia during that time. Also. were inevitable. PHIBRO participated anew in this subsequent bidding. petitioner. acts of the Government in either its sovereign or contractual capacity. though foreseen. floods. Page 233 of 845 . strikes. They stipulated that PHIBRO will arrange and provide gearless bulk carrier for the shipment of coal to arrive at discharging port on or before thirty (30) calendar days after receipt of the Letter of Credit. fires. which causes may include but are not restricted to Acts of God or of the public enemy. Subsequently. which could seriously hamper PHIBROs ability to supply the needed coal. Consequently. or which.

2009 ONG GENATO. While he may no longer be compelled to pay the loan. BENJAMIN BAYHON. The procedure in vindicating monetary claims involving a defendant who dies before final judgment is to file a claim against the estate of the deceased respondent. Allegedly. the estate has been amply represented by the heirs of the deceased. petitioner vs. Issue: Whether the obligation of Respondent Bayhon is transmissible to his heirs? Held: No. obligations derived from a contract are transmissible. He died while the case was pending before the Court of Appeals. The loan in this case was contracted by respondent. ET AL. No property or portion of the inheritance may be transmitted to his heirs unless the debt has first been satisfied. the execution of the Deed of Real Estate Mortgage was conditioned upon the personal assurance of the petitioner that the said instrument is only a private memorandum of indebtedness and that it would neither be notarized nor enforced according to its tenor.R. The petitioner however alleged that on the date that the real estate mortgage was to be signed. Page 234 of 845 . who had died 3 years earlier. 171035 August 24. however. As a general rule. throughout the appellate stage of this case. While the case was pending in the CA. respondents Facts: Respondent filed an action before the RTC seeking for the nullification of a dacion en pago allegedly executed by respondent Bayhon in favor of petitioner. No. that to cover the loan. had executed it. respondent Bayhon died. the debt subsists against his estate. Respondent also assailed the dacion en pago as a forgery alleging that neither he nor his wife. Notably. the former obtained from the petitioner a loan.. he executed a Deed of Real Estate Mortgage over a property. that. who are also his co-parties. respondent introduced to him a woman as his wife who signed the dacion en pago. G.

Consequently. Subsequently. It was made dependent on the validity of the partition. to wit they also executed another promissory note and a Continuing Guaranty Agreement for the loan. Thus. Demand letters for the settlement of his account were sent by petitioner but the respondent failed to heed the same and refused to pay. that is. the parties entered into another loan agreement. Issue: Whether the heirs’ assumption of the indebtedness of the deceased is valid? Held: No. Both loans were used to buy 2 tractors. FCC assigned all its assets and liabilities to the petitioner. it provides that the heirs as parties thereto have agreed to divide between themselves and take possession and use the above-described chattel and each of them to assume the indebtedness corresponding to the chattel taken as herein after stated which is in favor of First Countryside Credit Corp. and the CA in affirming the same. the documentary evidence clearly reflects that the parties in the deed of assignment with assumption of liabilities were the FCCC. it had not been sufficiently shown that petitioner is the successor-in-interest of the Union Savings and Mortgage Bank to which the FCCC assigned its assets and liabilities. The petitioner in its complaint alleged that by virtue of the Deed of Assignment dated August 20. it failed to establish its cause of action. executed a promissory note in favor of the FCCC. Also. Subsequently. the trial court did not err in dismissing the complaint. leaving a holographic will. 2005 UNION BANK OF THE PHILIPPINES.R. petitioner. the heirs in effect did not receive any such tractor. and that they were to assume the indebtedness corresponding to the chattel that they were each to receive. with the conformity of Bancom Philippine Holdings. however. vs. It follows then that the assumption of liability cannot be given any force and effect. After the testate proceedings. corresponding to the tractor respectively taken by them. EDMUND SANTIBAEZ and FLORENCE SANTIBAEZ ARIOLA. No. The partition being invalid as earlier discussed. 149926 February 23. Inc. and the Union Savings and Mortgage Bank. it was agreed that the two children of Santibanez will divide the tractors among them such that each of them was to assume the indebtedness of their late father to FCCC. Efraim died. Subsequently. This being the case. respondents Facts: FCCC and Santibaez entered into a loan agreement to which the latter together with his son. the petitioner’s personality to file the complaint is wanting. 1981 executed by and between First Countryside Credit Corporation and Union Bank of the Philippines[34] However. The assumption of liability was conditioned upon the happening of an event. that each heir shall take possession and use of their respective share under the agreement. Perusing the joint agreement. G. Page 235 of 845 .

the Register of Deeds was not served notice. 2001 JESUS SAN AGUSTIN. Subsequently. The RTC and CA denied the same. petitioner. an ASSO was issued against private respondent. No. Here. A person dealing with registered property is not charged with notice of encumbrances not annotated on the back of the title. Upon learning that he was wanted by the military. To show he was the owner of the contested lot. Neither was his claim entered on the Certificate of Titles in the name of their original/former owners on file with the Register of Deeds at the time of the filing or pendency of the land registration case. which was. or appear to have. The sale is evidenced by a Deed of Absolute Sale. From a legal standpoint. Macaria sold the subject lot to private respondent as evidenced by a Deed of Absolute Sale. such is sufficient notice of the petition to the public at large. vs. and the Office of the Solicitor General and the Provincial Prosecutor who were notified did not attend. There being no opposition. Respondent then filed a petition with the RTC for the issuance of owners duplicate copy of TCT to replace the lost one. Sometime in 1979. he presented the Deed of Absolute Sale. Consequently. under Section 109 of PD 1529. Clearly. he filed his Motion to Reopen Reconstitution Proceedings. is sent to the Register of Deeds and to those persons who are known to have. petitioner received a copy of the decision.. 121940 December 4. His claim that he is an heir (nephew) of the original owner of the lot covered by the disputed lot and the present occupant is not annotated in the said memorandum of encumbrances. petitioner does not appear to have an interest in the property based on the memorandum of encumbrances annotated at the back of the title. An Affidavit of Loss was filed with the Register of Deeds of Pasig and a certified copy of TCT was issued to him. A day after the issuance of the TCT. an interest in the property as shown in the Memorandum of encumbrances at the back of the original or transfer certificate of title on file in the office of the Register of Deeds.R. hence this petition. he voluntarily surrendered and was detained and eventually released. This deed was notarized but was not registered immediately upon its execution in because GSIS prohibited him from registering the same in view of the five-year prohibition to sell. During the hearing. subject to certain encumbrances. Issue: Whether the petitioner is entitled to notice? Held: No. however. petitioner is not entitled to notice. JR. G. Claiming that he was the present occupant of the property and the heir of Macaria. Page 236 of 845 . the trial court granted his petition. a parcel of residential land of the GSIS Low Cost Housing Project. it is sufficient that the notice. he discovered that the subject TCT was missing. Subsequently. respondents Facts: The GSIS sold to a certain Macaria. for being suspected as a subversive. The fact that respondent complied with the order of publication of the petition in a newspaper of general circulation. HON. there are no other interested parties who should be notified. except those mentioned since they are the only ones who may be deemed to have a claim to the property involved. COURT OF APPEALS and MAXIMO MENEZ.

and default in the payment of installments had been duly established when petitioner corporation foreclosed on the mortgaged parcels of land. had been foreclosed? Held: Yes. the assignment partakes of the nature of a contract of sale or purchase. INC. R. CALAPATIA. even then. arising from an alleged deficiency of P1. either onerously or gratuitously. vs. and LEANDRO ENRIQUEZ. No. An assignment of credit is an act of transferring. The petitioners deny liability and in their answer they allege that respondent has no cause or right of action because the obligation is already fully paid out of the proceeds of foreclosure sale of petitioners’ property. JR. the assignee is effectively subrogated in place of the assignor and in a position to enforce the contract to sell to the same extent as the assignor could. 2001 PROJECT BUILDERS. The transfer of rights takes place upon perfection of the contract and ownership of the right. THE COURT OF APPEALS and INDUSTRIAL FINANCE CORPORATION. the right of an assignor to an assignee who would then be capable of proceeding against the debtor for enforcement or satisfaction of the credit. 99433 June 19. petitioners. after the extrajudicial foreclosure of the real estate mortgage. G. Where the assignment is on account of pure liberality on the part of the assignor.053. Upon an assignment of a contract to sell.. to raise against the assignee the same defenses he could set up against the assignor. Issue: Whether the petitioners should still answer for any deficiency after the mortgage with which they guaranty the collection of the assigned credit.323. where valuable consideration is involved. Further. The assignment binds the debtor only upon acquiring knowledge of the assignment but he is entitled. GALICANO A. The resort to foreclosure of the mortgaged properties did not preclude private respondent from collecting interest from the assigned Contracts To Sell from the time of foreclosure to the redemption of the foreclosed property. The imposition of interest was a mere enforcement or exercise of the right to the ownership of the credit or receivables which the parties stipulated in the financing agreement. including all appurtenant accessory rights. respondents Facts: This collection suit was filed by IFC against petitioners.08. is thereupon acquired by the assignee.. the rules on donation would likewise be pertinent. Page 237 of 845 . they alleged that a proper accounting of the transaction between the parties will show that it is the private respondent who is liable to the petitioners. The assignment was with recourse.

Page 238 of 845 . The RTC is correct in ruling that since the Promissory Notes do not contain a period. STAFF RETIREMENT PLAN (Now HSBC Retirement Trust Fund. SPOUSES BIENVENIDO AND EDITHA BROQUEZA.). Moreover. among whom are petitioners. The employees then filed an illegal dismissal case before the NLRC against HSBC.R. Hence a civil action for recovery and collection of sums of money was initiated. The fact that HSBCL-SRP was content with the prior monthly check-off from Editha Broquezas salary is of no moment. a labor dispute arose between HSBC and its employees. HSBCL-SRP has the right to demand immediate payment. On the other hand. There is no date of payment indicated in the Promissory Notes. and are also members of respondent trust fund. respondents Facts: Petitioners are employees of HSBC. petitioner Gerong applied and was granted an emergency loan. These loans are paid through automatic salary deduction. No. The HSBCL-SRP is a retirement plan established by HSBC through its Board of Trustees for the benefit of the employees. Majority of HSBCs employees were terminated. her obligation to pay the loans will be suspended. HSBCL-SRP can immediately demand payment of the loans at anytime because the obligation to pay has no period. 178610 November 17. G. respondent HSBCL-SRP considered the accounts of petitioners’ delinquent.. but they failed to pay. HSBCL-SRP made a demand to enforce a pure obligation. Once Editha Broqueza defaulted in her monthly payment. Issue: Whether the obligation is a pure obligation? Held: Yes. Neither did HSBCL-SRP agree that if Editha Broqueza ceases to be an employee of HSBC. Inc. Demands to pay the respective obligations were made upon petitioners. Thus. The spouses Broqueza’s obligation to pay HSBCL-SRP is a pure obligation. Petitioner Editha obtained a car loan and an appliance loan. Because of their dismissal. The HSBCL-SRP never agreed that the loans will be paid only through salary deductions. LTD. petitioner. vs. petitioners were not able to pay the monthly amortizations of their respective loans. 2010 HONGKONG AND SHANGHAI BANKING CORP. the spouses Broqueza have already incurred in default in paying the monthly installments. Subsequently.

The CARL (Rep. respondents Facts: Private respondents were the original owners of a parcel of agricultural land covered by TCT No. Consequently.O. The former then mortgaged said land to petitioner. In conditional obligations. It was enacted two (2) months after private respondents had legally fulfilled the condition in the contract of conditional sale by the payment of all installments on their due dates. 407 and DBP Circular No. demanded the execution of a Deed of Sale in their favor. In the same manner must E. T-1432.R." Held: No. 407 be regarded. vs. and Sec. private respondents had religiously paid the agreed installments on the property until they completed payment. G. Issue: Whether Rep. Subsequently. When private respondents defaulted on their obligation. as well as the extinguishment or loss of those already acquired. a TCT was eventually issued in petitioner's name. 11 rendered its obligation to execute a Deed of Sale to private respondents "a legal impossibility. 407 issued 10 June 1990. the acquisition of rights. petitioner and private respondents entered into a Deed of Conditional Sale wherein petitioner agreed to reconvey the foreclosed property to private respondents.. Page 239 of 845 . Petitioner cannot invoke the last paragraph of Sec. Act 6657. 1996 DEVELOPMENT BANK OF THE PHILIPPINES. private respondents filed a complaint for specific performance with damages against petitioner. 6 of Rep. allowed private respondents to fulfill the condition of effecting full payment. No. Petitioner.O. Act 6657) was not intended to take away property without due process of law. in fact. shall depend upon the happening of the event which constitutes the condition. 1 of E. ET AL. Nor is it intended to impair the obligation of contracts. Upon completing the payment of the full repurchase price.O. and invoked Section 6 of Rep. COURT OF APPEALS. Act 6657 (the Comprehensive Agrarian Reform Law or CARL) approved 10 June 1988. E. 6 of Rep. Act 6657 only after private respondents. 118180 September 20. Act 6657 to set aside its obligations already existing prior to its enactment. petitioner. having fully paid the repurchase price. These laws cannot have retroactive effect unless there is an express provision in them to that effect. The deed of conditional sale between petitioner and private respondents was executed and since then. Petitioner then informed private respondents that the prestation to execute and deliver a deed of conveyance in their favor had become legally impossible in view of Sec. petitioner foreclosed the mortgage on the land and emerged as sole bidder in the ensuing auction sale. Aggrieved. private respondents demanded from petitioner the execution of a Deed of Conveyance in their favor.

Evidently. of petitioner's obligation. by virtue of the subsequent agreement. Issue: Whether the loan between petitioner and respondent is already due and demandable? Held: Yes. they shall retain control over the property and petitioner shall be the administrator thereof. respondent offered to extend a credit line to petitioner. in effect. petitioner began to make monthly payments. It was also testified that when respondent demanded payment of the loan. and indeed. She also stopped making monthly payments and ignored the demand letter sent by respondent's counsel. It is undisputed that herein parties entered into a valid loan contract. Petitioner failed to obtain a loan from PAG-IBIG Fund. a modificatory or partial novation. ATTY. petitioner. Their parents donated to petitioner an eight-door apartment with the condition that during the parents' lifetime. of said apartment which she intended to use as her residence. and the work has just started on Unit A when an altercation broke out between herein parties to the end that petitioner left Unit H and could no longer be found. the parties mutually dispensed with the condition that petitioner shall only begin paying after the completion of all renovations. the evidence on record clearly shows that after renovation of seven out of the eight apartment units had been completed. G. petitioner applied for a loan from PAG-IBIG Fund to finance the renovations on Unit H. and petitioner agreed to pay. Petitioner being the owner of the apartments. JOSE TOMIMBANG. No. Petitioner accepted respondent's offer of a credit line and work on the apartment units began. petitioner and respondent agreed that the former shall already start making monthly payments on the loan even if renovation on the last unit (Unit A) was still pending. 2009 MARIA SOLIDAD TOMIMBANG. subject to certain conditions. Subsequently. Also. There was. vs. Renovations on Units B to G were completed.R. 165116 August 4. renovations on Unit A were discontinued when her whereabouts could not be located. hence. Page 240 of 845 . respondent Facts: Petitioner and respondent are siblings.

The petitioner Gonzales did not. 1999 FELIX L. resolution) of an obligation as yet non-existent. G. the petitioner thereafter took possession of the property. This Court has held that there can be no rescission (or more properly. Because the ninth clause required respondents to obtain a separate and distinct TCT in their names and not in the name of petitioner. it logically follows that such undertaking was a condition precedent to the latter’s obligation to purchase and pay for the land. A letter was sent by one of the respondent-heirs informing petitioner of the lessors decision to rescind the Contract of Lease/Purchase due to a breach thereof committed by the defendant.R. in accordance with the second provision of the Contract of Lease/Purchas. vs. petitioner’s obligation to purchase the land is a conditional one and is governed by Article 1181 of the Civil Code. The defendant Gonzales refused to vacate the property and continued possession thereof. respondents Facts: Respondents entered into a Contract of Lease/Purchase with the petitioner. The letter also served as a demand on the defendant to vacate the premises within 10 days from receipt of said letter. herein represented by ELENA C. because the suspensive condition has not happened. respondents cannot rescind the contract. installing thereon Jesus Sambrano as his caretaker. which is a condition precedent to petitioner’s obligation. 131784 September 16. however. petitioner. TALENS. then the obligation of the petitioner to purchase the land has not arisen. THE HEIRS OF THOMAS and PAULA CRUZ. Page 241 of 845 . After paying the annual rental on the half-portion of the property covered by TCT. No. GONZALES. The suspensive condition not having been fulfilled. Put differently. Hence. the obligation of the petitioner to buy the land cannot be enforced unless respondents comply with the suspensive condition that they acquire first a separate and distinct TCT in their names. He remained in possession of the property without paying the purchase price and without paying any further rentals thereon. In this case. Issue: Whether the plaintiff can rescind or terminate the Contract of Lease after the one-year period? Held: No. because they have not caused the transfer of the TCT to their names. exercise his option to purchase the property immediately after the expiration of the one- year lease.

Young and his group obtained 55% equity in the Bank. Conversely. while Jorge Go and his group owned the remaining 45%. wherein Insular Life and its Pension Fund agreed to purchase the common shares. Young's loan from Interbank became due. Page 242 of 845 . Young obtained a short-term loan from Interbank. causing his serious financial problem. now petitioner Insular Savings Bank.R. where it was found that Young committed misrepresentations against the terms and conditions of said MOA. The obligation of petitioner Insular Life to purchase. subject to certain condition precedents. After. 140964 January 16. then it is incumbent upon the parties to perform their respective obligations under the contract. A due diligence audit was then done on the bank. subject to the condition that the ownership of all the shares will be consolidated in Young's name. together with his associates and co-respondents. the stockholder backed out from the intended sale and demanded the return of his downpayment. ET AL.82% of its outstanding capital stock. from the Licaros family. the Bank granted respondents and others individual loans. No. Once the conditions. vs. LTD. Young bought from Jorge Go and his group their 45% equity in the Bank. are subject to the fulfillment of the conditions contained in the MOA. ROBERT YOUNG. It was to the end that Insular Life and Young MOA.. In order to pay this amount. G. respondents Facts: Respondent. Meanwhile.. pursuant to said MOA. ET AL.. The provisions of the MOA negate the existence of a perfected contract of sale. Subsequently. However. no obligation on the part of either party arises. a stockholder of the bank signified his intention to purchase 99. In order to carry out the intended sale. petitioners. The MOA is merely a contract to sell since the parties therein specifically undertook to enter into a contract of sale if the stipulated conditions are met and the representation and warranties given by Young prove to be true. representation and warranties are satisfied. as well as the concomitant obligation of Young to convey to it the shares. he also paid Young a downpayment. Issue: Whether the MOA is valid and enforceable between the parties despite respondent Young's failure to comply with the terms and conditions thereof? Held: No. acquired by purchase Home Bankers Savings and Trust Co. secured by promissory notes. 2002 INSULAR LIFE ASSURANCE COMPANY.. in the event that these conditions are not met or complied with.

respondents claim to the subject property was as heretofore stated ineffectual. which was the only document presented by the respondent. tantamount to lack of jurisdiction. JR. vs. On the same date. it was executed about eight (8) years after the execution of the real estate mortgage over the subject property. Despite the lawful order of a coordinate and co-equal court. The conditions of the conditional sale agreement were not fulfilled. LAVIA. the same was also a material breach of the stipulations of the real estate mortgage over the subject property. JUDGE CELSO D. To emphasize. Issue: Who between petitioner and respondent has a better right to the possession of the subject property? Held: The petitioner. United Savings Bank. is officious and ineffectual. G. Hence. It is a fundamental axiom in the law on contracts that a person not a party to an agreement cannot be affected thereby. reconveyance. Third.. 141851 January 16. the respondent Judge. not only was the conditional sale agreement executed without the consent of the mortgagee-creditor. Petitioner then filed with the CA a petition for certiorari and prohibition assailing the trial courts issuance of a writ of preliminary injunction. Second. No. hence. First. alleging an obviously grave abuse of discretion. the TRO was issued. Worse. which was dismissed. and KAMBIAK Y. 2002 DIRECT FUNDERS HOLDINGS CORPORATION. this appeal. and the court sheriff implemented the TRO and submitted the Return. issued the questioned orders to restore possession to private respondent Chan. CHAN. During the hearing for the issuance of temporary restraining order. Subsequently. it was not consummated. the motion for inhibition and the motion to dissolve the writ of preliminary injunction were also denied. respondents Facts: The action a quo is for annulment of documents. it was not registered and duly annotated on the Transfer Certificate of Title (No. the mortgagee (United Savings Bank) did not give its consent to the change of debtor. recovery of possession. 12357) covering the subject property. petitioner. R. The conditional sale agreement. Page 243 of 845 . it was made clear to the respondent Judge that the property in question was occupied by the petitioner by virtue of a writ of possession in a petition for the issuance of writ of possession thereof. damages with application for the issuance of a writ of preliminary mandatory injunction and temporary restraining order.

Had she accepted the tender. 137909 December 11. petitioner filed a complaint for rescission due to the respondent’s failure to pay the balance of the purchase price. thus. Spouses BERNARDINO NAGUIAT and MARIA PAULINA GERONA-NAGUIAT. Pursuant to said agreement. the remedy of an unpaid seller is either specific performance or rescission. was clearly a Contract of Sale. is the owner of a parcel of land.R. respondents Facts: Eulalio Mistica. In the present case. In the Kasulatan. The two entered into a contract to sell over a portion of the aforementioned lot. vs. The stipulations of the contract constitute the law between the parties. petitioner. The transaction between Eulalio Mistica and respondents. No. petitioner and her deceased husband never made any demand for the balance of the purchase price. A deed of sale is considered absolute in nature when there is neither a stipulation in the deed that title to the property sold is reserved to the seller until the full payment of the price. courts have no alternative but to enforce them as agreed upon and written. DE MISTICA. thus showing that she was not exactly blameless for the lapse of the ten-year period. In a contract of sale. it was stipulated that payment could be made even after ten years from the execution of the Contract. 2003 FIDELA DEL CASTILLO Vda. This agreement was reduced to writing in a document entitled Kasulatan sa Pagbibilihan. however. payment would have been made well within the agreed period. Eulalio Mistica died sometime after. it is undisputed that during the ten-year period. provided the vendee paid 12 percent interest. nor a stipulation giving the vendor the right to unilaterally resolve the contract the moment the buyer fails to pay within a fixed period. a portion thereof was leased to respondent. Rescission. Subsequently. Petitioner even refused the payment tendered by respondents during her husband’s funeral. as evidenced by the Kasulatan. Issue: Whether there was a breach of obligation? Held: No. Page 244 of 845 . is allowed only where the breach is substantial and fundamental to the fulfillment of the obligation. the predecessor-in-interest of petitioner. Moreover. the failure of respondents to pay the balance of the purchase price within ten years from the execution of the Deed did not amount to a substantial breach. respondent gave two partial payments but failed to make any payments thereafter. G.

Had the intestate prevented the consummation of the sale voluntarily. The will to sell on the part of the intestate was.e. a suspensive condition. The condition is. the debt became immediately due and demandable. present in fact. the same was paid for subsequently. G. Page 245 of 845 . the condition implies that the intestate had already decided to sell his house. Sr. therefore. In the form that the condition was found by the CA. and that all that we needed to make his obligation (to pay his indebtedness) demandable is that the sale be consummated and the price thereof remitted to the islands. the presence of a buyer of the property for the price and under the conditions desired by the intestate. petitioners. although the price and other conditions thereof were still within his discretion and final approval. i. And upon the happening of the condition." Upon authorization of the probate court. LONGARA. depending exclusively upon the will of the intestate. vs. JR. mainly that of the presence of a buyer. ready. therefore. Issue: Whether the condition upon which payment of the sums advanced was made to dependent exclusively upon the debtor’s will or discretion? Held: No. Without such a buyer the sale could not be carried out or the proceeds thereof sent to the islands. or presumed legally to exist. Sr. 1953 LUZ HERMOSA. able and willing to purchase the property under the conditions demanded by the intestate.. L-5267 October 27. and FERNANDO HERMOSA. It is contended on this appeal that the obligation contracted by the intestate was subject to a condition exclusively dependent upon the will of the debtor (a condicion potestativa) and therefore null and void. therefore sent to the islands.R. depending partly upon the will of intestate and partly upon chance. but a mixed one. the condition would be or would have been deemed or considered complied with. EPIFANIO M. But in addition of the sale to him (the intestate-vendor). there were still other conditions that had no concur to effect the sale. It is evident. or at least that he had made his creditors believe that he had done so. It is evident. that the condition of the obligation was not a purely protestative one. No. upon the happening of which the obligation to pay is made dependent. as soon as he receive funds derived from the sale of his property in Spain.. respondent Facts: The case is an appeal against a decision of the CA approving certain claims presented by respondent against the testate estate of Fernando Hermosa. The claimant presented evidence that the intestate had asked for the said credit advances for himself and for the members of his family "on condition that their payment should be made by Fernando Hermosa. besides.

. for the collection of the sum of P20. had only thus reached the preliminary stage whereby the latter offered its stock for subscription on the terms stated in the form letter. it cannot.R. As the application of Damasa Crisostomo is obviously at variance with the terms evidenced in the form letter issued by the Quezon College. and Damasa applied for subscription fixing her own plan of payment. in view of the proposal of Damasa Crisostomo to pay the value of the subscription after she has harvested fish. or that if there was any acceptance the same came to her knowledge during her lifetime. administrator-appellee. Inc. — a relation. No. accepted the term of payment suggested by Damasa Crisostomo.000. becomes the more imperative. Inc. There is nothing in the record to show that the Quezon College. L-5003 June 27. Inc. said acceptance was essential. in the absence as in the present case of acceptance by the Quezon College. facultative in nature. therefore. rendering the obligation void. the need for express acceptance on the part of the Quezon College. vs. Inc. of the counter offer of Damasa Crisostomo. the appellant presented a claim before the CFI in her testate proceeding. Inc. under Damasa's promise to pay the price of the subscription after she had caused fish to be caught.. representing the value of the subscription to the capital stock of the Quezon College. Conversely. there was absolute necessity on the part of the College to express its agreement to Damasa's offer in order to bind the latter. Hence. Inc. to which she will give her initial payment and the balance payable when she is able to cause fish to be caught. 1953 NAZARIO TRILLANA. claimant- appellant Facts: Damasa Crisostomo sent a letter to the Board of Trustees of the Quezon Collee asking to enter her subscription of 200 shares of the capital stock with a par value of P100 each. Issue: Whether the claimant can demand for the payment of the subscription? Held: No. because it would be unfair to immediately obligate the Quezon College. In other words. the relation between Damasa Crisostomo and the Quezon College. that had not ripened into an enforceable contract. Page 246 of 845 . The former subsequently died without any payment being made on the subscriptions. Indeed. Inc. INC. a condition obviously dependent upon her sole will and. QUEZON COLLEGE. This claim was dismissed. G.

This was evidenced by a contract entitled `Purchase and Sale of Scrap Iron' duly signed by both parties..00 in favor of appellant corporation on or before May 15.000. Consequently. appellee informed appellants by telegram that the letter of credit was opened May 12. the obligation of the petitioner corporation to sell did not arise. This. The former agreed to deliver the scrap iron only upon payment of the purchase price by means of an irrevocable and unconditional letter of credit. 83851 March 3.e. INC.. started to dig and gather and scrap iron at the appellant's premises.R. Otherwise stated. On May 24. 1993 VISAYAN SAWMILL COMPANY. respondents Facts: The parties entered into a sale involving scrap iron located at the stockyard of appellant corporation. Consequently. the private respondent's opening. 1983. Page 247 of 845 . a letter of credit was opened in favor of the appellants in the Dumaguete Branch of BPI. it therefore cannot be compelled by specific performance to comply with its prestation. but then the transmittal was delayed. they sent a telegram to appellee cancelling the contract of sale because of failure of the latter to comply with the conditions thereof. 1983. however. petitioners. there was to be no actual sale until the opening. subject to the condition that the appellee will open a letter of credit in the amount of P250. 1983. Since what obtains in the case at bar is a mere promise to sell. appellee through his man. Thus. vs. The petitioner corporation's obligation to sell is unequivocally subject to a positive suspensive condition. the failure of the private respondent to comply with the positive suspensive condition cannot even be considered a breach — casual or serious — but simply an event that prevented the obligation of petitioner corporation to convey title from acquiring binding force. the contract is not one of sale where the buyer acquired ownership over the property subject to the resolutory condition that the purchase price would be paid after delivery. Issue: Whether there is a breach in the contract? Held: No. Subsequently. 1983. is denied by appellants who allege that on May 23. THE HONORABLE COURT OF APPEALS and RJH TRADING. 1983 at the BPI main office in Ayala. proceeding with such endeavor until May 30 when appellants allegedly directed appellee's men to desist from pursuing the work in view of an alleged case filed against appellee by a certain Alberto Pursuelo. No. the appellants' lawyer informed appellee's lawyer that appellant corporation was unwilling to continue with the sale due to appellee's failure to comply with essential pre-conditions of the contract. G. i. making or indorsing of the irrevocable and unconditional letter of credit. making or indorsing of an irrevocable and unconditional letter of credit. and ANG TAY. On May 26.

In a contract to sell real property on installments. 1989. The transfer of ownership and title would occur after full payment of the price.00 as the total purchase price of the lot. assisted by her husband GREGORIO CUACHON. as if the contract had not been entered into. prevented the obligation of respondent Fernando to convey the property from arising. casual or serious. shall be considered as rents paid for the use and occupation of the premises and as liquidated damages. petitioner made several payments in lump sum. A down payment was to be paid at the signing of the contract. Issue: Whether the transaction between the parties in an absolute sale or a conditional sale? Held: The transaction between the parties was a conditional sale not an absolute sale. In the case at bar. vs. but simply an event that prevented the obligation of the vendor to convey title from acquiring any obligatory force. No. the full payment of the purchase price is a positive suspensive condition.750. Subsequently. COURT OF APPEALS and HERMOGENES FERNANDO. G. Should a period of ninety (90) days elapse from the expiration of the grace period without the overdue and unpaid installments having been paid with the corresponding interests up to that date. The payments made. petitioner bound herself to pay respondent P107. After the same was made. respondents Facts: The petitioner and private respondent executed a contract to sell involving a piece of land. together with the one corresponding to the month of grace. petitioner. the failure of which is not considered a breach. In the contract. In fact. The contract also provided for a grace period of one month within which to make payments. Page 248 of 845 . it brought into effect the provision of the contract on cancellation.R. 129018 November 15. and the balance to be paid within a period of ten years with a monthly amortization. The intention of the parties was to reserve the ownership of the land in the seller until the buyer has paid the total purchase price. respondent Fernando. the court rendered a decision ordering petitioner to vacate the premises and to pay compensation for the use and occupation of the property. She thereafter constructed a house on said lot. 2001 CARMELITA LEAÑO. petitioner Leaño's non-payment of the installments after April 1. as vendor. was authorized to declare the contract cancelled and to dispose of the parcel of land. together with all the improvements made on the premises.

The totality of petitioner’s acts clearly indicates that he had unqualifiedly delivered and transferred ownership of the properties to respondent.500 in cash to petitioner upon the execution of the deed.R. ONG. Pursuant to this deed. Nothing in said instrument implied that petitioner reserved ownership of the properties until the full payment of the purchase price. In this instance. not only did petitioner turn over the keys to the properties to respondent. Incorporated (RSLAI). petitioner and respondent executed a notarized deed of absolute sale with assumption of mortgage. Thereafter. Subsequently. Page 249 of 845 . As these properties were mortgaged to Real Savings and Loan Association. handed the keys to the properties and wrote a letter informing RSLAI of the sale and authorizing it to accept payment from respondent and release the certificates of title. it was a contract of sale the parties entered into. No. RSLAI required her to undergo credit investigation. However. not the perfection thereof nor the transfer of ownership. Moreover. respondent learned that petitioner again sold the same properties to one Leona Viloria after March 10. and petitioner. BENITA T. 2010 RAYMUNDO S. Respondent likewise informed RSLAI of her agreement with petitioner for her to assume petitioner’s outstanding loan. petitioner executed a notarized deed of absolute sale in favor of respondent. petitioner. respondent Facts: Petitioner sold three parcels of land with improvements to respondent. respondent undertook repairs and made improvements on the properties. she was informed that petitioner had already paid the amount due and had taken back the certificates of title. not the immediate transfer of ownership (upon the execution of the notarized contract) from petitioner as seller to respondent as buyer. he also authorized RSLAI to receive payment from respondent and release his certificates of title to her. the said terms and conditions pertained to the performance of the contract. vs. with the balance payable directly to RSLAI (on behalf of petitioner) within a reasonable time. on the other hand. 170405 February 2. Clearly. respondent gave petitioner a partial payment. Respondent thus proceeded to RSLAI to inquire about the credit investigation. Issue: Whether the parties entered into a contract of sale or a contract to sell? Held: The deed executed by the parties stated that petitioner sold the properties to respondent "in a manner absolute and irrevocable" for a sum of P1. 1993 and changed the locks. it required respondent to pay P415. On the contrary. G. the terms and conditions of the deed only affected the manner of payment. rendering the keys he gave her useless. With regard to the manner of payment.1 million. Otherwise stated. DE LEON.

It would seem that the suspensive condition in the present conditional sale was imposed only for this reason. In accordance with paragraph 1 of the Receipt. the intestate courts grant of the Motion for Approval of the sale filed by respondent resulted in petitioners’ obligation to execute the Deed of Sale of the disputed lots in his favor. and respondent is subject to a suspensive condition -. G. the parties were bound to fulfill what they had expressly agreed upon. they can sell their rights. vs. the contract was perfected. 2001 Heirs of Spouses REMEDIOS R. After. their contract was a conditional sale. however. its birth or effectivity can take place only if and when the condition happens or is fulfilled. The lower court granted Alex’s motion. but only with the courts permission. SANDEJAS. Page 250 of 845 . even if the suspensive condition had not been fulfilled? Held: No. petitioners. Subsequently. not full payment. When a contract is subject to a suspensive condition. 141634 February 5. No. Eliodoro died sometime thereafter. cannot adversely affect the substantive rights of heirs to dispose of their own pro indiviso shares in the co-heirship or co-ownership. Reference to judicial approval. respondent Facts: Eliodoro Sandejas. The condition having been satisfied. Issue: Whether the petitioners are obligated to sell 3/5 of the disputed properties to respondent. because petitioners did not consent to the sale of their ideal shares in the disputed lots.. After such. Henceforth. ET AL. A stipulation requiring court approval does not affect the validity and the effectivity of the sale as regards the selling heirs. Lina alleging that Sandejas. Alex was appointed by the lower court as the new administrator of the Intestate Estate of Remedios despite the heirs choosing Sixto Sandejas as new administrator. Lina and Elidioro and to compel the heirs to execute a deed of absolute sale in favor of Alex. This they could do upon the courts approval.R. LINA. There was no reservation of ownership in the agreement. was appointed by the lower court as the administrator of the estate of his late wife. Court approval is required in any disposition of the decedent’s estate per Rule 89 of the Rules of Court. the respondent filed a motion asking the court to approve the deed of conditional sale executed between Alex A. obligated to sell to Lina 4 parcels of land.the procurement of a court approval. Sr. In addition. the scope of the Receipt is only to the extent of the pro-indiviso share of Eliodoro Sr. Consequently. Hence. an Omnibus Pleading for motion to intervene was filed by Alex A. The agreement between Eliodoro Sr. the 4th floor of Manila City Hall was burned and among the records burned were the records of the Court where Sandejas filed his petition. Thus. Remedios Sandejas. It merely implies that the property may be taken out of custodia legis. in his capacity as seller. interests or participation in the property under administration. petitioners were supposed to deed the disputed lots over to respondent. In other words. ALEX A. even before full payment.

a revenue officer required respondent to submit additional documents to support its claim. and if there is not a sufficient number of days in the next month. while business was good during the first quarter of 1997. 2007 CIR and ARTURO V. Therefore. Accordingly. PARCERO. Book I of the Administrative Code of 1987 to this case. respondent was entitled to tax refund or tax credit. because respondent suffered losses.228 that year. Thus. As a consequence. Thus. respondent suffered losses amounting to P71. its right to claim a refund or credit commenced on that date. Issue: How should the two-year prescriptive period be computed? Held: A calendar month is a month designated in the calendar without regard to the number of days it may contain. respondent paid its quarterly corporate income tax and remitted creditable withholding tax from real estate sales to the BIR in the total amount. but not including. Consequently. PRIMETOWN PROPERTY GROUP.R. The same was complied with but the same was not acted upon. then up to and including the last day of that month. It found that respondent filed its final adjusted return on April 14. petitioners. applied for the refund or credit of income tax respondent paid in 1997. 1998) consisted of 24 calendar months. The CTA dismissed the petition as it was filed beyond the two-year prescriptive period for filing a judicial claim for tax refund or tax credit. respondent Facts: Gilbert Yap. Hence. INC.879. vice chair of respondent corporation. 1998.. it was not liable for income taxes. respondent's petition was filed on the last day of the 24th calendar month from the day respondent filed its final adjusted return. the corresponding numbered day of the next month. the two-year prescriptive period (reckoned from the time respondent filed its final adjusted return on April 14. respondent file a petition for review before the CTA. Chapter VIII. it was filed within the reglementary period. G. He explained that the increase in the cost of labor and materials and difficulty in obtaining financing for projects and collecting receivables caused the real estate industry to slowdown. Page 251 of 845 . 162155 August 28. Nevertheless. Hence. Applying Section 31. It is the period of time running from the beginning of a certain numbered day up to. No. vs.

whereas the Spanish Code merely mentioned "months. upon the ground of lack of jurisdiction over the subject matter thereof and prescription of action. days or nights. in a civil case. pay the amount adjudged to plaintiff in this decision. for the revival of the judgment rendered." In the language of this Court. TECSON. 1144(3) of our Civil Code." with the particularity that. vs. NAMARCO. 1969 NATIONAL MARKETING CORPORATION.. Inc. took place on December 21. Inc. in case defendant Alto Surety & Insurance Co. "commences from the time the judgment sought to be revived has become final. No.. an action upon a judgment "must be brought within ten years from the time the right of action accrues... in the language of Art. in turn. or thirty (30) days from notice of the judgment — which was received by the defendants herein on November 21... rights. with the approval of the Civil Code of the Philippines (Republic Act 386) . Del Rosario." which. with the same court. we have reverted to the provisions of the Spanish Civil Code in accordance with which a month is to be considered as the regular 30-day month . Miguel D. defendant-appellee Facts: The CFI rendered judgment. MIGUEL D. Pursuant to Section 13 of the Revised Administrative Code. Defendant Tecson moved to dismiss said complaint. as successor to all the properties. The issue is thus confined to the date on which ten (10) years from December 21. 1955 — no appeal having been taken therefrom. entitled "Price Stabilization Corporation vs. assets. and choses in action of the Price Stabilization Corporation.R. A copy of this decision was served upon the defendants in said case. "month shall be understood to refer to a calendar month. and not the solar or civil month. 1955. Pursuant to Art. filed. 1152 of the same Code. L-29131 August 27. Issue: Whether or not the present action for the revival of a judgment is barred by the statute of limitations? Held: Yes. 1955 expired." This. Tecson and Alto Surety and Insurance Co. and to indemnify the same on the cross-claim for all the amounts it would be made to pay in this decision.. as plaintiff in that case and judgment creditor therein.. . Inc. plaintiff-appellant." ours has added thereto the term "years" and explicitly ordains that "it shall be understood that years are of three hundred sixty-five days. a complaint against the same defendants. G." which ordered appellee to pay Alto Surety Insurance Co. Subsequently. in People vs." Page 252 of 845 .

defendant asks for specific performance. in spite of the acceptance of the offer. MAGDALENA ESTATE. as such. the former being the owner of one-third interest and the latter of the remaining two-thirds. As the application appears signed by Ernest Berg. and for this refusal defendant suffered damages for these reasons. but a condition. In the application exhibit "3". vs. there has been a clear agreement to sell said property for P200. INC. until defendant shall have obtained a loan from the National City Bank of New York. Issue: Whether an agreement to sell has actually been reached between plaintiff and defendant? Held: Yes. satisfy all the requirements of the statute as to contents and signature and. for. plaintiff-appellee. it is clear that the granting of such loans is not definite and cannot be held to come within the terms "day certain" provided for in the Civil code. we are of the opinion that plaintiff's obligation to sell did not arise.R. The complaint avers that plaintiff and defendant are co-owners of said property.000. it can clearly be implied that between Ernest Berg and the Magdalena Estate Inc. L-3784 October 17.. Considering the first alternative. As a matter of fact. as the purchaser. and the subject-matter. the party sought to be charged by the obligation. In any event it is apparent that the fulfillment of the condition contained in this second alternative is made to depend upon the defendant's exclusive will. Ernest Berg appears as the seller and the Magdalena Estate Inc. G. The division is asked because plaintiff and defendant are unable to agree upon the management of the property and upon the partition thereof. the party selling would grant to the other part first an irrevocable option to purchase the same at the seller's price.000 as the consideration. we also find it to be indefinite and contingent and so it is also a condition and not a term within the meaning of the law. Defendant claims that it sold to plaintiff one-third of the property in litigation subject to the express condition that should either vendor or vendee decide to sell his or its undivided share. 1952 ERNEST BERG. for it may or it may not happen. In other words. whether considered separately or jointly. the loan did not materialize. that is. Viewing in this light the clause on which defendant relies for the enforcement of its right to buy the property. plaintiff refused to accept the payment of the price. No. and the sum of P200. the former's interest in the Crystal Arcade as the subject-matter. under Article 1115 of the old Civil Code. "when the fulfillment of the condition depends upon the exclusive will of the debtor the conditional obligation shall be void. the parties. they constitute sufficient proof to evidence the agreement in question. and viewed in this light. namely. The applications marked exhibits "3" and "4".. the price or consideration. Defendant claims that." Page 253 of 845 . it would seem that it is not a term. And if we consider that the period given was until such time as defendant could raise money from other sources. Such is so because in both applications all the requirements of a contract are present. defendant-appellant Facts: This is an action for partition of the property known as Crystal Arcade situated in the City of Manila.

Inc. INC. Page 254 of 845 ." Obligations with a period are those whose consequences are subjected in one way or another to the expiration of said period or term. G. 1975 LIRAG TEXTILE MILLS. COURT OF APPEALS and CRISTAN ALCANTARA. 1963. respondents Facts: Petitioners Lirag Textile Mills. 6884 and appellee in C. It necessarily follows that if the petitioner-employer Lirag Textile Mills terminates the employment without a "valid cause or causes". petitioners. A "period" has been defined "as a space of time which has an influence on obligation as a result of a juridical act. LIRAG. it committed a breach of the contract of employment executed by and between the parties. namely — voluntary resignation on the part of private respondent Alcantara or termination of employment at the option of petitioner Lirag Textile Mills. No. No. vs. as it admittedly did. subject only to the resolutory period agreed upon which may end the indeterminate period of employment. in favor of respondent Cristan Alcantara (plaintiff in Civil Case No. and Felix K. G. and either suspends their demandableness or produces their extinguishment. Inc. The contract of employment was for an indefinite period as it shall continue without ending. 33116-R. which affirmed with costs against the appellants the decision dated September 19.R. Lirag seek a review by certiorari of the decision of the respondent Court of Appeals in its C. A. of the Court of First Instance of Rizal (Branch VI) in its Civil Case No. defendants-appellants". G. There is an indefinite period of time for employment agreed upon by and between petitioners and the private respondent. but for a "valid cause or causes". Lirag Textile Mills. 33116-R). and FELIX K. 6884. Issue: Whether there was a breach in the contract? Held: Yes. unless sooner terminated by reason of voluntary resignation or by virtue of a valid cause or causes (the resolutory period). which states that respondent was dismissed without cause in violation of the contract of employment. and Felix Lirag. entitled "Cristan Alcantara. No. plaintiff-appellee vs. subject to a resolutory period.R. A. L-30736 April 14.R.

Although the original loan of P5.. INC. No.000. and so the obligation became pure and without any condition and consequently. Page 255 of 845 . including the defendants' act in withdrawing said two deeds from the office of the register of deeds and then mortgaging the same property in favor of the RFC. at the same time filing a third party complaint against him asking for damages. Issue: Was there a breach? Held: Yes. set up affirmative defenses. G. Thereafter.190 was payable within six years from June 1950. plaintiff corporation filed a motion for judgment on the pleadings which petition was opposed by the defendants. 1954 DAGUHOY ENTERPRISES.R. with whom is joined her husband. Inc. Defendant filed an answer admitting practically all the allegations of the complaint.. They also filed a petition for the inclusion of Potenciano Gapol as a third party litigant. plaintiff-appellee. filed in the CFI a civil case against defendants for the collection of a loan. the trial court held that under article 1198 of the new Civil Code. defendants-appellants Facts: The Daguhoy Enterprises. DOMINGO PONCE. a local corporation. the loan became due and immediately demandable. The plaintiff corporation answered the counterclaim and opposed the petition for the inclusion of a third party litigant. RITA L. vs. PONCE. L-6515 October 18.00 including the increase of P1. the debtor lost the benefit of the period by reason of her failure to give the security in the form of the two deeds of mortgage and register them. and so did not become due and payable until 1956. and a counterclaim asking for the cancellation of the mortgage which secured the payment of the loan.

where the parties stipulated that in the event of flood. The appellant ceased to run its mill due to the same cause. or other force majeure. INC. The prayer that the plaintiffs be compelled to deliver sugar cane to the appellant for six more years to make up for what they failed to deliver during those trying years. The performance of what the law has written off cannot be demanded and required. insurrection. petitioners-appellees. In order that the central. would in effect be an extension of the term of the contracts entered into by and between the parties. does not mean that the happening of any of those events stops the running of the period agreed upon. war. the deduction or extension of six years would not be justified. the contract shall be deemed suspended during said period. respondent-appellant Facts: This is an action for declaratory judgment under Rule 66. G. the latter must have been able to perform it but failed or refused to do so and not when they were prevented by force majeure such as war. Nemo tenetur ad impossibilia.. may be entitled to demand from the other parties the fulfillment of their part in the contracts. At most on the last year of the thirty-year period stipulated in the contracts the delivery of sugar cane could be extended up to a time when all the amount of sugar cane raised and harvested should have been delivered to the appellant's mill as agreed upon. and "B-1"). The seventh paragraph of Annex "C". The appellant contends that the term stipulated in the contracts is thirty milling years and not thirty calendar years and postulates that the planters fulfill their obligation — the six installments of their indebtedness--which they failed to perform during the six milling years from 1941-42 to 1946-47. typhoon. if granted. The relief prayed for calls for an interpretation of contracts entered into by and between the sugar cane planters in the districts of Manapla. not found in the earlier contracts (Annexes "A". and the Victorias Milling Company. Occidental Negros. the fulfillment of which was impossible. The reason the planters failed to deliver the sugar cane was the war or a fortuitous event. ET AL. Issue: Whether there was a breach I the contract? Held: Yes.. The obligee not being entitled to demand from the obligors the performance of the latter’s' part of the contracts under those circumstances cannot later on demand its fulfillment. Fortuitous event relieves the obligor from fulfilling a contractual obligation. Even if the thirty-year period provided for in the contracts be construed as milling years. etc.. To require the planters to deliver the sugar cane which they failed to deliver during the four years of the Japanese occupation and the two years after liberation when the mill was being rebuilt is to demand from the obligors the fulfillment of an obligation which was impossible of performance at the time it became due.. quoted by the appellant in its brief. earthquake. Page 256 of 845 . vs. The term "first milling" used in the contracts under consideration was for the purpose of reckoning the thirty-year period stipulated therein. the herein appellant. civil commotion. "B". 1955 VICTORIAS PLANTERS ASSOCIATION. No. L-6648 July 25. Inc. organized strike. VICTORIAS MILLING CO. Cadiz and Victorias. The fact that the contracts make reference to "first milling" does not make the period of thirty years one of thirty milling years..R. It only relieves the parties from the fulfillment of their respective obligations during that time — the planters from delivering sugar cane and the central from milling it. INC.

The fact that such option is binding only on the lessor and can be exercised only by the lessee does not render it void for lack of mutuality. as of Jan.500. COURT OF APPEALS. No. The contention of the petitioner that a provision in a contract that the lease period shall subsist for an indefinite period provided the lessee is up-to-date in the payment of his monthly rentals is contrary to Art. Their rights and obligations become mutually fixed. petitioner. the lessees were able to pay petitioner-corporation religiously. The condition imposed in order that the contract shall remain effective is that the lessee is up-to-date in his monthly payments. For 5 years. The lessor may terminate the contract anytime should the lessees commit any violation of the terms of agreement. Tan Te occupied rm. The lessees may terminate the contract anytime provided that they give a 60 day prior written notice. and the lessor may hold him liable for the rent therefor.00 a month. Issue: Whether the stipulation in the contract shall subsist for an indefinite period provided the lessee is up-to-date in the payment of his monthly rentals? Held: Yes. After all. The contract of lease explicitly stipulated that the lessees may occupy the said premises as long as that payment for monthly rental is updated. both parties are thereafter bound by the new lease agreement. Jespajo Realty Corp vs. and the lessee is entitled to retain possession of the property for the duration of the new lease. the petitioner sent them a letter asking for an increase in the monthly rent. Respondents gave extra efforts to pay the petitioner according to the original price agreed in the contract. CA G. And while the lessee has a right to elect whether to continue with the lease or not. HON. once he exercises his option to continue and the lessor accepts. The wording of the agreement is unequivocal: The lease period xxx shall continue for an indefinite period provided the lessee is up-to-date in the payment of his monthly rentals. However. In reply to the said proposal. no. Due to the opposition. However. sent a letter of opposition to the said proposal. Page 257 of 845 . 2002 JESPAJO REALTY CORPORATION. respondents Facts: Petitioner executed a contract of lease with herein respondents Tan Te and Co Tong. 1308 of the Civil Code is not plausible. vs. the lessor is free to give or not to give the option to the lessee. TAN TE GUTIERREZ and CO TONG. when the petitioner unilaterally increased the rental payment to more than 20% or P3. Pursuant to the said contract. the respondents through their counsel. 1990. 217 of the said building at a monthly rate of P814 while Tong occupied the penthouse at a monthly rate of P917. The agreement between the lessor and the lessees are therefore still subsisting. the petitioner-corporation. The lessee cannot thereafter escape liability even if he should subsequently decide to abandon the premises. with the original terms and conditions agreed upon. filed an ejectment case against the respondents. it refused. 113626 September 27. The lease contract between petitioner and respondents is with a period subject to a resolutory condition. Mutuality obtains in such a contract and equality exists between the lessor and the lessee since they remain with the same faculties in respect to fulfillment.R.

. 1933 with interest at the rate of 12% per annum. Mr. who furthermore assured him that he could collect even after the lapse of ten years. After the execution of the document. BORROMEO.00. ET AL. Between two possible interpretations. for which defendant signed a promissory note therefor on November 29. inasmuch as the deed of mortgage in favor of plaintiff could not be registered because not properly drawn up. clauses and conditions contrary to law. The note further stipulate that defendant 'hereby relinquish. 1972 PILAR N. It is a fundamental principle in the interpretation of contracts that while ordinarily the literal sense of the words employed is to be followed. On one occasion. plaintiff made various oral demands. vs. morals and public order (in this case the contested stipulation) should be separated from the valid and legal contract when such separation can be made because they are independent of the valid contract which expresses the will of the contracting parties. The terms. No. Page 258 of 845 . Miller who was the agent of the Insular Lumber Company in Cebu City. Defendant being a friend and former classmate of plaintiff used to borrow from the latter certain amounts from time to time. but defendants failed to settle his account. CA. petitioners. Liquidation was made and defendant was found to be indebted to plaintiff in the sum of P7. L-22962 September 28. Miller filed a civil action against the defendant and attached his properties including those mortgaged to plaintiff. defendant borrowed from plaintiff a large sum of money for which he mortgaged his land and house in Cebu City to pay some pressing obligation with Mr. Miller. but defendant instead offered to execute a document promising to pay his indebtedness even after the lapse of ten years. agreeing to pay as soon as I have money'. Plaintiff then pressed the defendant for settlement of his obligation. renounce. 1370).220. * * * at any time even after the lapse of ten years from the date of this instrument'. that which saves rather than destroys is to be preferred. G.R.220. After the last war. plaintiff limited himself to verbally requesting defendant to settle his indebtedness from time to time. Issue: Whether the CA erred in reversing the ruling of the CFI? Held: Yes. ET AL. Plaintiff did not file any complaint against the defendant within ten years from the execution of the document as there was no property registered in defendant's name." which “intention shall prevail” (Art. such is not the case where they "appear to be contrary to the evident intention of the contracting parties. or otherwise waive my rights to the prescriptions established by our Code of Civil Procedure for the collection or recovery of the above sum of P7..00. respondents Facts: Defendant Villamor was a distributor of lumber belonging to Mr.

The action which should be brought in accordance with article 1128 is different from the action for the recovery of the amount of the notes. We hold that the promissory notes are governed by article 1128 because under the terms thereof the plaintiff intended to grant the defendant a period within which to pay his debts. Page 259 of 845 . and that. which has already elapsed from the execution of the promissory notes until the filing of the action on June 1. 43429 October 24. Plaintiff-Appellee. it is for the court to fix the same. Defendant appealed from the decision of the Court of First Instance of Manila ordering him to pay the plaintiff within thirty days from the date of notification of said decision. 1934. In his answer the defendant interposed the special defenses that the complaint is uncertain inasmuch as it does not specify when the indebtedness was incurred or when it was demandable. being. As the promissory notes do not fix this period. like the civil actions. the appealed decision should be reversed and the defendant absolved from the complaint. The action brought by the plaintiff having already prescribed. Defendant-Appellant Facts: This action was instituted by the plaintiff to recover from the defendant the amount of two promissory notes. The action to ask the court to fix the period has already prescribed in accordance with section 43 (1) of the Code of Civil Procedure. plus the costs. subject to the rules of prescription. FLORENTINO DE JOSE. granting that the plaintiff has any cause of action. 1938 BENITO GONZALES. the same has prescribed in accordance with law. although the effects of both are the same.R. This period of prescription is ten years. Issue: Whether the obligations are due and demandable? Held: No. vs. No. G.

000.00. To secure the payment of her obligation. Mendoza. In sum. G. 2007 GUILLERMINA BALUYUT. As evidence of her indebtedness. it is deemed to contain all the terms agreed upon and no evidence of such terms can be admitted other than the contents of the agreement itself. SALUD POBLETE and THE HON. a house and lot she owns. EULOGIO POBLETE. by way of a real estate mortgage contract. it cannot serve the purpose of incorporating into the contract additional contemporaneous conditions which are not mentioned at all in writing. the promissory note and the real estate mortgage are the law between petitioner and private respondents. Despite having been issued a TCT for the said property.R. vs. contradict or defeat the operation of a valid contract. a promissory note for the amount borrowed. Petitioner. 1981. the loan shall mature in one month from date of the said Promissory Note. Baluyut failed to pay her indebtedness. Respondents Facts: Petitioner loaned from the spouses Poblete the sum of P850. 144435 February 6. the loan shall mature in one month. aside from the testimony of Atty. she conveyed to the Poblete spouses. Issue: Whether no prior demand to pay is necessary for a loan to mature when there is conflict between the date of maturity of the loan as stated in the Deed of Real Estate Mortgage and the Promissory Note on the one hand and the real date of its maturity on the other? Held: It is a long-held cardinal rule that when the terms of an agreement are reduced to writing. NO. It is not disputed that under the Promissory Note dated July 20. petitioner failed to present clear and convincing evidence to prove her allegation that the real agreement of the parties is for the loan to mature in one year. In fact there was not even any allegation in the Complaint and in the Memorandum filed by petitioner with the trial court to the effect that there has been fraud or mistake as to the date of the loan’s maturity as contained in the Promissory Note of July 20. no other evidence was presented to prove that the real date of maturity of the loan is one year. Under the promissory note. Upon maturity of the loan. Baluyut signed.COURT OF APPEALS. unless there has been fraud or mistake. Page 260 of 845 . Evidence of a prior or contemporaneous verbal agreement is generally not admissible to vary. In the instant case. While parol evidence is admissible to explain the meaning of written contracts. Baluyut remained in possession of the subject property and refused to vacate the same. In the present case. 1981. The Poblete spouses subsequently decided to extrajudicially foreclose the real estate mortgage. on even date.

a longer term may be granted where equities come into play.671. the extension of said term has been sought by appropriate action and judgment is eventually rendered therein granting the relief. 2001. INC. Issue: Whether the lease could still be extended? Held: Yes. No. Subsequently. respondent Facts: Malayan is the owner of an apartment unit leased to the respondent by virtue of an oral contract. In the present case. a written notice was served upon respondent on January 17. 163763 November 10. deemed sufficient as an extension and for him to find another place to stay. if the rent agreed upon is monthly.65. The power of the courts to establish a grace period is potestative or discretionary. vs. Despite Uy’s receipt of the notice. the monthly rental was P4. petitioner. always with due deference to the parties freedom to contract. Thus. and asking him to vacate and turn over the possession of the property within five days from said date. prompting Malayan to file before MeTC a complaint for ejectment. 2001 up to the present time.R. effectively his right to stay in the premises had come to an end on August 31. the courts may fix a longer term for the lease. respondents lease has been extended for more than five years. G. which time is. Page 261 of 845 . unless prior thereto. depending on the particular circumstances of the case. he refused to vacate the property. 2001 terminating the lease effective August 31. Malayan sent Uy a written notice informing him that the lease contract would no longer be renewed or extended upon its expiration on August 31. UY HAN YONG. however. and may be denied where none appears. The 2nd paragraph of Article 1687 provides. 2001. As respondent was notified of the expiration of the lease. If the period of a lease contract has not been specified by the parties. and respondent has been occupying the premises since 1958. Rental was paid monthly. Effectively. respondent has remained in possession of the property from the time the complaint for ejectment was filed on September 18. 2006 MALAYAN REALTY. it is understood to be from month to month. 2001. that in the event that the lessee has occupied the leased premises for over a year. under the circumstances. As earlier stated. The lease contract thus expires at the end of each month. and by 2001.. In the case at bar. The monthly rental was increased yearly starting 1989. the lease period was not agreed upon by the parties.

Page 262 of 845 . said negotiations came to a gridlock. INC. Thus. Subsequently. on 26 December 1998. 2006 KASAPIAN NG MALAYANG MANGGAGAWA SA COCA-COLA (KASAMMA-CCO)- CFW.R. petitioner held the strike in private respondents Manila and Antipolo plants. 159828 April 19. With the aim of resolving the impasse. private respondent closed its Manila and Antipolo plants resulting in the termination of employment of 646 employees. Thereafter. However. a casual employee is only casual for one year. both parties executed and signed a MOA providing for salary increases and other economic and non-economic benefits. shall be considered a regular employee with respect to the activity in which he is employed and his employment shall continue while such activity exists. petitioner demanded the payment of salary and other benefits to the newly regularized employees retroactive to 1 December 1998. respondents Facts: The CBA for the years 1995-1998 executed between petitioner union and private respondent company expired. Issue: Whether private respondent violated the provisions of the MOA? Held: Yes. any employee who has rendered at least one year of service. private respondent violated the provision of the MOA when it did not consider the regularization of the 61 employees effective 1 December 1998. Said MOA was later incorporated to form part of the 1998-2001 CBA and was thereafter ratified by the employees of the company.. Consequently. Thus. Even if we were to follow private respondents contention that the date 1 December 1998 provided in the MOA is merely a reckoning date to determine who among the non-regular employees have rendered one year of service as of said date. Also. However. on the ground of CBA negotiation deadlock. Therefore. and it is the passage of time that gives him a regular status. under the law. several conciliation conferences were conducted but to no avail as the parties failed to reach a settlement. As the duly certified collective bargaining agent for the rank-and- file employees of private respondents Manila and Antipolo plants. even without the subject MOA provision. the private respondent refused to yield to said demands contending that the date of effectivity of the regularization of said employees were 1 May 1999 and 1 October 1999. vs. through the efforts of NCMB Administrator Buenaventura Magsalin. both parties came to an agreement settling the labor dispute. and accorded to them the full benefits of the MOA.. petitioner. CA and COCA-COLA BOTTLERS PHILS. all those who have been with the company for one year by said date must automatically be considered regular employees by operation of law. contrary to the interpretation of the NLRC. petitioner submitted its demands to the company for another round of collective bargaining negotiations. in accord with the MOA. On 19 December 1998. petitioner filed a notice of strike on 11 November 1998 with the NCMB. It must be stressed that under Article 280 of the Labor Code. No. It likewise contained a provision for the regularization of contractual. whether such service is continuous or broken. G. casual and/or agency workers who have been working with private respondent for more than one year. petitioner filed a complaint before the NLRC for the alleged violations of the subject MOA by the private respondent. the 61 employees must be extended regular employment status after the lapse of one year. on 5 November 1999. Hence. Subsequently.

2001 ZENAIDA M. a tenant of Rosalia. On January 5. then demanded the rent from Antonio Hombrebueno. When the latter refused to pay. Therefore. The original sellers retained their control and possession. that the respondents right to reconveyance was already barred by prescription and laches. G. respondents Facts: The spouses Santos owned a parcel of land. Rosa in turn sold her share to Salvador. Despite the transfer of the property to Salvador. Page 263 of 845 . Salvador was never placed in control of the property. SANTOS. Presumptive delivery can be negated by the failure of the vendee to take actual possession of the land sold. CALIXTO SANTOS. Calixto. which could only be subjected to encumbrances or liens annotated on the title. vs. As found by both the trial and appellate courts and amply supported by the evidence on record. Salvador and Rosalia all subsequently died. on it was a four-door apartment administered by Rosalia who rented them out. claiming to be an heir. Petitioner. Issue: Whether a sale through a public instrument tantamount to delivery of the thing sold? Held: Nowhere in the Civil Code. private respondents instituted an action for reconveyance of property with preliminary injunction against petitioner in the RTC. The Code merely said that the execution shall be equivalent to delivery. 1989. The spouses executed a deed of sale of the properties in favor of their children Salvador and Rosa. Zenaida denied the material allegations in the complaint and as special and affirmative defenses. Antonio and Rosa. where they alleged that the two deeds of sale were simulated for lack of consideration. argued that Salvador was the registered owner of the property. petitioner. Alberto. They were executed to accommodate Salvador in generating funds for his business ventures and providing him with greater business flexibility. No. ET AL.R. there was no real transfer of ownership. Jesus. The presumption can be rebutted by clear and convincing evidence. In her Answer. Salvador. Rosalia continued to lease and receive rentals from the apartment units. 133895 October 2. and that the complaint stated no cause of action. which was decided in her favor. Zenaida filed an ejectment suit against him with the MeTC.. The spouses had five children. does it provide that execution of a deed of sale is a conclusive presumption of delivery of possession.

Manila. hence. it is not only the evidence on record but petitioner's pleadings themselves that confirm his default in paying the rental fees for more than three (3) months in 1999 and 1998 prior to the filing of the ejectment complaint. The record plainly illustrates. Issue: Whether there is sufficient ground for ejectment? Held: Yes. MELECIO TOBIAS. it bears stressing that Art. Page 264 of 845 . The renovation of the house was commenced but had to stop midway because petitioner refused to vacate the portion he was occupying and worse he neglected to pay for the lease for four months. represented by JOSEFINA PINEDA. respondent demanded from petitioner either to pay an increased rate of monthly rentals or else to vacate the place so he and his mother could use the house during her regular medical check-up in Manila. Hence for the second time. These facts represent legal grounds to eject a tenant. G. Sometime in the last quarter of 1995. 577 Julio Nakpil Street in Malate. respondent demanded the payment of the rental arrears as well as the restoration of the house to him. 1687 does not grant a lessee an absolute right to an extension of the lease term but merely gives the courts the discretion to allow additional time for the lessee to prepare for his eventual ejection. Subsequently. respondent Facts: Petitioner was the lessee of the ground floor of a house at No. in 1997 respondent insisted upon raising the rental fee once again. respondent was compelled to file a complaint for ejectment. petitioner. for example. Also. No. Since petitioner was insisting on keeping possession of the house but did not pay the rental for January 1999. although he had settled the arrears of four (4) months. 2002 MANUEL D. respondent asked petitioner to restore the premises to him for some essential repairs of its dilapidated structure. For two (2) years nothing came out of the demand to vacate. MELOTINDOS.R. He had been renting the place since 1953 on a month-to-month basis from the respondent who was then residing in Canada. vs. owing to his sickly mother who needed constant medical attention and filial care. There is also sufficient basis for the courts a quo to conclude that respondent desperately needed the property in good faith for his own family and for the repair and renovation of the house standing thereon. 146658 October 28. This time he did not offer petitioner anymore the option to pay higher rentals. that he made no substantial or additional improvements on the house which could have hampered his transfer to another residence. In the instant case the petitioner's old age and length of his occupancy of the house alone are not just grounds for granting the extension of lease because these circumstances by themselves do not give him the equitable right to insist upon staying on the premises as long as he could pay the rentals.

322. They should remember that Article 1658 of the Civil Code provides only two instances in which the lessee may suspend payment of rent. the mere subsequent payment of rentals by the lessee and the receipt thereof by the lessor does not. HUANG CHAO CHUN AND YANG TUNG FA. absent any other circumstance that may dictate a contrary conclusion. and (2) the contracted clause authorizing an increase -. we cannot. None of these is present in the case at bar. Page 265 of 845 . Issue: Whether non-payment of rentals is a ground to eject. It also alleged that the amended lease contract already expired on September 16. on the other hand. thus.900. In the instant case. Having said that. respondents should have deposited in a bank or with judicial authorities the rent based on the previous rate. considering that (1) the option to renew is reciprocal and.R.must likewise be reciprocal.upon presentation of the increased real estate tax to lessees -. authorize a unilateral increase in the rental rate. respondents Facts: The case originated from an unlawful detainer case filed by petitioner before the MeTC against respondents for violating their amended lease contract. when they did not pay the monthly rentals thereon in the total amount of P4. vs. Moreover.including the rental rate -. petitioner. No. respondents failed to pay the rent from October 1993 to March 1998 or for four (4) years and three (3) months. namely. 2002 LL AND COMPANY DEVELOPMENT AND AGRO-INDUSTRIAL CORPORATION. legitimize the unlawful character of the possession. in case the lessor fails to make the necessary repairs or to maintain the lessee in peaceful and adequate enjoyment of the property leased. 142378 March 7. The lessor may still pursue the demand for ejectment.00. and pay the rental arrearages despite repeated demands. Is refusal of the lessor to accept or collect rentals a valid reason for non-payment of rentals? Held: Based on the foregoing. the terms and conditions thereof -. in an unlawful detainer.has not been complied with by petitioner. 1996 but respondents refused to surrender possession thereof plus the improvements made thereon. G.

No. whatever its object.. vs. and REV. Alegre was engaged as athletic director by Brent School. RONALDO ZAMORA. goods or services. i. The contract fixed a specific term for its existence. therefore. to those by nature seasonal or for specific projects with pre-determined dates of completion. Respondent Alegre's contract of employment with Brent School having lawfully terminated with and by reason of the expiration of the agreed term of period thereof. be it specie. fixed-term employment contracts are not limited. public order or public policy. Held: The Civil Code has always recognized." And a month or so later. 1973. including the expiry date. they also include those to which the parties by free choice have assigned a specific date of termination. The stated ground for the termination was "completion of contract. 1971. INC. he is declared not entitled to reinstatement and the other relief awarded and confirmed on appeal in the proceedings below.. and imposes no restraints on the freedom of the parties to fix the duration of a contract. and continues to recognize. Issue: Whether or not the provisions of the Labor Code have anathematized "fixed period employment" or employment for a term. However. he had acquired the status of a regular employee and could not be removed except for valid cause. Alegre was given a copy of the report filed by Brent School with the Department of Labor advising of the termination of his services. Some three months before the expiration of the stipulated period. Page 266 of 845 . L-48494 February 5. 1990 BRENT SCHOOL. ET AL. Subsequent subsidiary agreements dated March 15. Alegre protested the announced termination of his employment. five (5) years. at the investigation conducted by a Labor Conciliator of said report of termination of his services.. and as a general proposition. and his employment had lasted for five years. morals. petitioners. Inc. except the general admonition against stipulations contrary to law. the validity and propriety of contracts and obligations with a fixed or definite period. 1976. expiration of the definite period of employment. G. to July 17. and signed the receipt thereof. He argued that although his contract did stipulate that the same would terminate on July 17. GABRIEL DIMACHE. since his services were necessary and desirable in the usual business of his employer. Alegre accepted the amount of the full payment of his services. 1974 reiterated the same terms and conditions. the date of execution of the agreement. 1973. August 28. respondents Facts: The root of the controversy is an employment contract in virtue of which Doroteo R. Under the Civil Code. good customs. and September 14. 1976.R. as they are under the present Labor Code.e. from July 18.

Exhibit "A". Article 1197 of the New Civil Code. to indemnify the complainant in the amount of P550." The question involved in this case is whether the receipt. which provides that the courts may fix the duration of the obligation if it does not fix a period. Issue: Whether foregoing receipt gives rise to an obligation wherein the duration of the period depends upon the will of the debtor in which case the only action that can be maintained is a petition to ask the court to fix the duration of the period? Held: It is clear in the agreement. G. thereby precluding criminal liability of petitioner for the crime charged.R. Hence.From this judgment. appeal was taken to the then Court of Appeals which affirmed the decision of the lower court but modified the penalty imposed by sentencing her "to suffer an indeterminate penalty of one (1) month and one (1) day of arresto mayor as minimum to one (1) year and one (1) day of prision correccional as maximum. to indemnify the offended part. The agreement (Exhibit "A') constituted her as an agent with the obligation to return the tobacco if the same was not sold. and to pay the costs of suit. strongly negates transfer of ownership of the goods to the petitioner. Exhibit "A". the fact that appellant received the tobacco to be sold at P1. PEOPLE OF THE PHILIPPINES. or. petitioner.30 per kilo and the proceeds to be given to complainant as soon as it was sold. is a contract of agency to sell or a contract of sale of the subject tobacco between petitioner and the complainant. that the obligation was immediately demandable as soon as the tobacco was disposed of. No. respondent Facts: Petitioner Lourdes Valerio Lim was found guilty of the crime of estafa and was sentenced to suffer an imprisonment. that the proceeds of the sale of the tobacco should be turned over to the complainant as soon as the same was sold. Maria de Guzman Vda. 1984 LOURDES VALERIO LIM. Page 267 of 845 . Also. does not apply. de Ayroso. vs. L-34338 November 21.50 without subsidiary imprisonment. and to pay the costs.

renewable for another 25 years. through petitioner wrote Insular Farms Inc. Pacific Banking Corporation. G. ET AL. CA. Insular Farms Inc. The agreement for extension of the parties is clearly indicated and may be inferred from the acts and declarations of the parties. including the first installment thereon which was due on or before July 1957. giving the latter 48 hours to pay its entire obligation.00 was extended. would be sold at public auction to satisfy Insular Farms' obligation. 1958 no longer contained the provision on an installment of P 50. Issue: Whether the petitioners were granted an indefinite extension of time to pay the loan? Held: In case the period of extension is not precise. and the former was appointed President and General Manager as a result of which he resigned as Acting Manager of the First National City Bank at the Port Area. Pacific Farms Inc.. No.00 to the bank payable in five equal annual installments. The next day. After. The pledge executed as collateral security on February 9. 1989 PACIFIC BANKING CORPORATION and CHESTER G. Page 268 of 845 . the provisions of Article 1197 of the Civil Code should apply. was sufficient consideration for the extension. Consequently. all other installments shall become due and payable. Thus.000. respondents Facts: Private respondents discovered an area consisting of 480 hectares of tidewater land in Tambac Gulf of Lingayen which had great potential for the cultivation of fish and salt-making. Subsequently Joseph Hart approached businessman John Clarkin for financial assistance.00 due on or before July 1957. In this case. The private respondents commenced the case below by filing a complaint for reconveyance and damages with prayer for writ of preliminary injunction before the CFI.00 from Pacific Banking Corporation. BABST. After which they signed a MOA pursuant to which the latter was issued shares. the first installment payable on or before July 1957.000. Hart received notice that the pledged shares of stocks of Insular Farms Inc. as testified to in court. these proved unsuccessful.000. after eleven months. Inc. Due to financial difficulties. there was an agreement to extend the payment of the loan. the business floundered and while attempts were made to take in other partners.000. This was to the effect that all Insular Farms shares of stocks were pledged to petitioner bank in lieu of additional collateral and to insure an extension of the period to pay the installment. The pledge constituted on February 19. vs.. conditions may be introduced and arrangements made changing the terms of payment. Said note provided that upon default in the payment of any installment when due. was organized to engage in the same business as Insular Farms Inc. 1958 on the shares of stocks of Insular Farms. borrowed P 250. applied for and. Insular Farms Inc. L-45656 May 5. They organized Insular Farms Inc. considering that this pledge was the additional collateral required by Pacific Banking in addition to the continuing guarantee of Clarkin.R. executed a Promissory Note of P 250. obtained a lease from the Department of Agriculture for a period of 25 years. petitioners. It is settled that bills and notes may be varied by subsequent agreement. This can mean no other thing than that the time of payment of the said installment of P 50. Unfortunately.

at the instance of the plaintiff. made on her behalf. being dependent upon their failure to pay the debt in money. It must follow..R. 1916. that under the terms of the contract. The appellants Jose and Florencio Alano objected to the appointment of Javier. It is simply provided that if the debt is not paid in money it shall be paid in another specific was by the transfer of property at a valuation. that if the action to recover the debt has prescribed. It is simply an undertaking that if the debt is not paid in money. transferring to her all rights to the ownership and possession of the lot. is the purported mortgage by Anastasio Alano of his land in the barrio of San Isidro described in the third paragraph of the document. No. If the amount is not sufficient to cover the total amount of the indebtedness. Anastasio Alano died intestate. Anastasio will mortgage four parcels of land. proceedings upon the administration of his estate were had. as it is admitted that the so-called mortgage was never recorded. At the instance of one of his creditors. Equally inefficacious. it will be paid in another way. CRISANTO JAVIER. and for the same reasons. the payment of money. G. defendants-appellants Facts: Anastasio Alano. It is not an attempt to permit the creditor to declare a forfeiture of the security upon the failure of the debtor to pay the debt at maturity. It is quite clear. however. perfectly valid. and as the parties themselves have interpreted it. but their objection was overruled by the court. Marcela Mariño. Marcela Mariño. the liability of the defendants as to the conveyance of the house and lot is subsidiary and conditional. vs. therefore. plaintiff-appellees. the court reopened the intestate proceeding. and upon the statement. a document to wit. Page 269 of 845 . Issue: Whether the conveyance of the house and lot described in the contract. the agreement is not open to the objection that the stipulation is a pacto comisorio. the action to compel a conveyance of the house and lot is likewise barred. took effect upon the failure of the debtors to pay the debt? Held: The principal undertaking evidenced by the document is. as the agreement to make such conveyance was not an independent principal undertaking. and appointed one Javier to be administrator of the estate. Da. No request was made for a renewal of the commission of the committee on claims. Anastasio C. and his wife. ET AL. Cruz were to pay the latter’s debt to the lady. Subsequently. as we read it. invalid. Jose Alano. The attempt to create a mortgage upon the house and lot described in the second clause of the contract is. obviously. Da.On April 27. Marcela Mariño. therefore. L-12611 August 7. to cede a house and lot to Da. As we read the contract. that she was a creditor of the deceased and that her claim was secured by mortgage upon real estate belonging to the said deceased. MARCELA MARIÑO. in our opinion. and Florencio Alano executed in favor of the plaintiff. 1918 FELIPE AGONCILLO. The agreement to convey the house and lot at an appraised valuation in the event of failure to pay the debt in money a t its maturity is. of course. the testamentary heirs of the Rev. and in case of insolvency. but merely a subsidiary alternative pact relating to the method by which the debt might be paid.

G. Page 270 of 845 . did not arrive in the usual course until after the time had expired for filing its appearance due to the fact that said ship encountered a storm at sea. it will be ground for vacating a judgment by default. No. 1924 ONG GUAN CAN. in the exercise of a proper discretion. to extend the time fixed by law whenever the ends of justice would seem to demand such an extension. especially when the defendant shows by affidavit or otherwise that he has a valid and meritorious defense. such as occurred in the present case. and that the steamship Vizcaya. It has been frequently decided that. A delay of mail. carrying mails. including the letter containing the notice of appearance. plaintiff-appellee. The same was denied. L-21196 February 6. LTD. The latter contended that the said notice of appearance was mailed. defendant-appellant Facts: The action was commenced in the CFI for the purpose of recovering an amount due on the policy of insurance issued by the defendant to the plaintiff. Issue: Whether or not the judgment by default rendered by the lower court should be set aside and annulled? Held: Yes.R. vs. through its duly authorized representative. if pleadings or other papers essential to a case are entrusted to the mails in due season and under proper precaution and are lost or miscarried.. The time fixed for filing papers in a cause is generally directory and the court always has it in its power. the court entered a judgment by default be rendered against the defendant. THE CENTURY INSURANCE COMPANY. On the same day a copy of the complaint was served upon the defendant. Although the defendants mailed their notice appeal. in our opinion amounts to accident or surprise for which judgments by default may be set aside.

BURKE. B. (2) to execute the corresponding deed of release of mortgage. and (30 to pay damages in the sum of P1. Upon the issues raised. Burke. Honorable Jose Gutierrez David. to execute forthwith a deed of release of mortgage covering the property in question. as intimated by the plaintiff. ET AL. when. whereas Antonio Carrascoso and William J. 1942. with a continued reduction of the rate of interest.920. as claimed by plaintiffs? Held: In this case. VICTORIA DESBARATS MIAILHE. Burke testified for the defendant. through the mediation of Attorney Carrascoso. on one hand. defendant-appellee Facts: Plaintiffs filed a complaint against the original defendant William J. and defendant had lavished upon her his unusual liberality when he extended to her his help and relief whenever she so requested as the exigencies of her financial situation warranted.000. a further reduction of the interest to 3 1/2 per cent per annum was granted by the defendant. Page 271 of 845 . B. vs. Yet Vicente Legarda went out of his way to propose that his wife Clara Tambunting be exempted from paying all the interests due from January 1. 1951 CLARA TAMBUNTING DE LEGARDA. It appears that the indebtedness in question was granted to Clara Tambunting de Legarda as far back as February 1926. on the same date with the clerk of this court in payment of the mortgage indebtedness of said plaintiff to defendant herein. up to the termination of the war. ordering defendant to accept the sum deposited by plaintiff Clara Tambunting de Legarda in the office of the clerk of court. substituting WILLIAM J. No. L-3435 April 28. only Vicente Legarda testified for the plaintiffs. to pay plaintiff the sum of P120. decision was rendered by this Court through the then Judge. with the obligation to pay it within five (5) years but which period has been extended from time to time with the gradual reduction of the rate of interest up to January 1942. Issue: Whether the agreement had by the plaintiffs and William J. which caused the defendant to utter some unkind words and to be resentful. G. Nevertheless.40 representing the cost of the certification of the check deposited in the court and consignation. During this long period of time the plaintiffs enjoyed the use of the money. alleging defendant's unjustified refusal to accept payment in discharge of a mortgage indebtedness in his favor. most of the evidence presented is testimonial. Burke during the Japanese occupation was that the rate of the annual interest of the indebtedness was merely reduced to 3 ½ per cent. with only some corroborating letters. B.83 deposited by plaintiff Clara Tambunting de Legarda. B. together with the clerk's commission for the deposit of the money in court and the costs of the suit. the mortgagor.R. and on the basis of this evidence the preponderance in our opinion militates in favor of the defendant.. And we say so because. after due hearing. The life of this indebtedness would not have been so prolonged as to be overtaken by war were it not for the desire of the defendant to help the mortgagor in her hour of need. plaintiffs-appellants. plaintiffs at last became reasonable and agreed not to pay the obligation until the termination of the war provided that all interests due and which might become due be condoned. and praying that the latter be ordered (1) to receive the sum of P75.

to Reyes.R. shall stand temporarily enjoined. but which have gone. if necessary. defendants in this action. vs. to recover five parcels of land. being the alleged proceeds of some 1. Upon hearing the cause. G. No. without express pronouncement as to costs. Graño. within which to procure the execution of a sufficient deed conveying to the plaintiff.000. Issue: Whether the plaintiff can recover the five parcels of land? Held: Reyes should either have the land originally set apart for him under clauses 4 and 8 of the contract. so he claims. SEBASTIANA MARTINEZ ET AL. The Martinez heirs. In connection with this complaint the plaintiff obtained. This end will accordingly be effected in the manner set forth in the following paragraph. Page 272 of 845 . the judgment against Reyes in favor of the Martinez heirs for the sum of P8. plaintiff is seeking first. or tendered. to recover from the defendants the sum of P9. will be allowed a period of three months. And in the event that the said Martinez heirs should fail to procure said conveyance to be made within the term conceded to them. Estanislao Reyes. thirdly. containing approximately one thousand coconut trees. the judgment in their favor for said P8.000 shall be permanently enjoined. 1921.. and fourthly.50. in case his right thereto should fail. the trial court absolved the defendants from the complaint and also absolved the plaintiff from the cross-complaint of the defendants. 1930 ESTANISLAO REYES. or. to recover damages resulting from their improper meddling in the administration of the receivership property. to the benefit of the defendants in said receivership. and until such deed shall be executed and delivered. secondly. defendants-appellants Facts: In this action. several months after the litigation was begun. In reply to the complaint the defendants filed an answer and cross- complaint in which the defendants sought to recover damages and interest upon their claim against the plaintiff. extendible. containing the dispositive part of this decision. and to obtain a declaration of ownership in his own favor as against the defendants with respect to said parcels. an attachment against the defendants upon a judgment credit with the result that the execution of said money judgment against the plaintiff has been suspended since the record in said case was returned to the trial court. to recover from the defendants the sum of P43.377.860 coconut trees which had been applied to the benefit of said defendants. From this judgment both parties appealed.000. to which the plaintiff supposes himself to be entitled. plaintiff-appellant. he should not be required to pay the judgment for P8.000 which was awarded to the Martinez heirs in Martinez v. the particular parcel of land described in paragraph 8 of the contract of March 5. 32226 December 29. for a reasonable term in the discretion of the trial court.

Marinduque. in consonance with the provisions of article 2253 of the Civil Code of the Philippines. but claim. there is no ground or reason why it should not be given effect. GAUDENCIO REDUGERIO and JOSEFA POSTRADO. that they offered to pledge the land specified in the agreement and transfer possession thereof to the plaintiff-appellee. as the parties had freely and voluntarily entered into it. G. upon their failure to pay the debt on a date specified in the proceeding paragraph.R. In that court they reiterated the defenses that they presented in the justice of the peace court. but that the latter refused said offer. Page 273 of 845 . L-6220 May 7. The defendants-appellants admit the execution of the document. Cruz. 1954 MARTINA QUIZANA. Judgement having been rendered by the justice of the peace court of Sta. plaintiff-appellee. the defendants-appellants appealed to the Court of First Instance. vs. Cruz. and the same is based on an actionable document attached to the complaint. signed by the defendants-appellants. defendants-appellants Facts: The action was originally instituted in the justice of the peace court of Sta. It is a new right which should be declared effective at once. No. is valid and binding and effective upon the plaintiff-appellee. the creditor Held: The second part of the obligation in question is what is known in law as a facultative obligation. and notwithstanding the absence of any legal provision at the time it was entered into government it. in which the obligors agreed and promised to deliver a mortgage over the parcel of land described therein. as special defense. There is nothing in the agreement which would argue against its enforcement. Issue: Whether the second part of the written obligation. It is not contrary to law or public morals or public policy. defined in article 1206 of Civil Code of the Philippines.

. petitioner. They were able to drill only 4 boreholes. INC. the capital contributions of Marsman Drysdale (land) and Gotesco (cash) as well as the funding and financing mechanism for the project. PGI was never a party to the JVA. No. It is assumed that the obligation of Marsman Drysdale and Gotesco is joint since it was not expressly stated. G. Inc. PHILIPPINE GEOANALYTICS. but it entered into a Technical Service Contract with the JVA. AND GOTESCO PROPERTIES. nor does the law or the nature of the obligation required it to be solidary. On the other hand. PGI filed a case against both Marsman Drysdale and Gotesco. Inc. and that all billing invoices indicated the consortium as the client. While the JVA clearly spelled out. vs. Despite repeated demands. Inc. Marsman claims that he is not liable to PGI because according to their agreement. inter alia. the same cannot be used to defeat the lawful claim of PGI against the two joint venturers-partners. This is supported by Article 1207 and 1208 of the New Civil Code. out of 5. Page 274 of 845 . INC. and Gotesco Properties. respondents. Facts: Marsman Drysdale.. The building of the office building required the services of Philippine Geoanalytics. Gotesco contested that PGI had no cause of action because the service rendered was incomplete. Marsman Drysdale and Gotesco were listed as owners of the project in the TSC.R. After such. Parties agreed about the capital. MARSMAN DRYSDALE LAND. the Court ruled that Marsman Drysdale and Gotesco are jointly liable to PGI. PGI billed the joint venture for the work done. expenses and proceeds that each should provide and claim for the said project. entered into a Joint Venture Agreement for the construction and development of an office building on a land owned by Marsman Drysdale in Makati City. due to the failure of the partners to clear the area that was supposed to be drilled. Gotesco will be the one to shoulder monetary expenses. joint venture wasn’t able to pay PGI. 2010. Issue: Whether Marsman Drysdale and Gotesco are both liable to pay PGI the unpaid claims? Held: In the case at bar. INC. The services rendered by PGI were incomplete. 183374 June 29.

In the alternative. Under the law. so that the private respondent sued the Alipio and Manuel spouses for the collection of the said amount before the RTC. the sub-lessees failed to comply with their obligation. 2. together with the Manuel spouses. Each of the four sub-lessees signed the contract. Page 275 of 845 . signed the sublease contract binding themselves to pay the amount of stipulated rent. Despite due demand.. No. vs. The first installment was duly paid. G. 2000 PURITA ALIPIO. ET AL. the Alipios' obligation (and also that of the Manuels) is one which is chargeable against their conjugal partnership. Issue: Whether a creditor can sue the surviving spouse for the collection of a debt which is owed by the conjugal partnership of gains? Held: A creditor cannot sue the surviving spouse of a decedent in an ordinary proceeding for the collection of a sum of money chargeable against the conjugal partnership and that the proper remedy is for him to file a claim in the settlement of estate of the decedent. 134100 September 29. When petitioner's husband died. petitioner. he prayed for the rescission of the sublease contract should the defendants fail to pay the balance.5 hectare fishpond.R. CA. respondent Facts: Respondent was the lessee of a 14. The lease was for a period of five years. to the spouses Placido and Purita Alipio and the spouses Bienvenido and Remedios Manuel. but of the second installment. their conjugal partnership was automatically dissolved and debts chargeable against it are to be paid in the settlement of estate proceedings in accordance with Rule 73. Petitioner and her late husband. he subleased the fishpond. for the remaining period of his lease. the sub-lessees only satisfied a portion thereof. Subsequently. leaving an unpaid balance.

the liability is joint. No. A liability is solidary only when the obligation expressly so states. Under the circumstances. as provided by the Civil Code. In the dispositive portion of the January 31. Farrales and Federico C. Personal and real properties of defendant Carlos M. the word solidary neither appears nor can it be inferred therefrom. vs. hence they were declared in default. G. and the creditor is entitled to demand only a proportionate part of the credit from each debtor. petitioner. The fallo merely stated that the following respondents were liable: Pacific Lloyd Corporation. was the highest bidder. After service of summons upon the defendants. a Writ of Execution was issued and consequently implemented by the assigned Deputy Sheriff. a joint obligation is one in which each debtors is liable only for a proportionate part of the debt. filed a case against Pacific Lloyd Corp. Carlos Farrales. Lim. Thomas H.. Thomas H.. for a sum of money.R. COURT OF APPEALS and CARLOS M.. 2001 PH CREDIT CORPORATION. Farrales were levied and sold at public auction wherein PH Credit Corp. Lim. FARRALES. Issue: Whether the obligation is joint or joint and solidary? Held: A solidary obligation is one in which each of the debtors is liable for the entire obligation. PH Credit Corp. was then allowed to present its evidence ex-parte. After the aforesaid decision has become final and executory. The well-entrenched rule is that solidary obligations cannot be inferred lightly. Carlos M. Van Sebille and Federico C. They must be positively and clearly expressed. respondents Facts: PH Credit Corp. Van Sebille. On the other hand. 1984 Decision of the trial court. they failed to file their answer within the reglementary period. 109648 November 22. and each of the creditors is entitled to demand the satisfaction of the whole obligation from any or all of the debtors. when the law so provides or when the nature of the obligation so requires. Page 276 of 845 .

Page 277 of 845 . the trial court found that petitioner failed to prove that it exercised the diligence of a good father of a family in the selection and supervision of Payunan. respectively. In the instant case. Thereafter. fright and mental anguish. vs.00 for Fletcher. 147791 September 8. They alleged (1) that Payunan. but is subject to the defense of due diligence in the selection and supervision of the employee. ESTRELLA. G. an action based on quasi-delict may be instituted against the employer for an employee's act or omission.00 for Estrella and P300. No. observe honesty and good faith which entitles them to claim for exemplary damage. They were brought to the Makati Medical Center where the doctors diagnosed their injuries. were negligent and did not obey traffic laws. respondents Facts: Respondents and her granddaughter boarded a BLTB bus bound for Pasay City. Issue: Whether BLTB and/or its driver is solely liable for the damages sustained by herein respondents? Held: The case filed by respondents against petitioner is an action for culpa aquiliana or quasi- delict under Article 2176 of the Civil Code. (4) that they suffered actual damages amounting to P250. petitioner. REBECCA G. The strong impact pushed forward their seats and pinned their knees to the seats in front of them. The liability for the negligent conduct of the subordinate is direct and primary. However. Jr. Consequently. serious anxiety.R. Espiridion Payunan. ET AL. Jr. they never reached their destination because their bus was rammed from behind by a tractor-truck of CDCP in the South Expressway. (3) that BLTB allowed its bus to operate knowing that it lacked proper maintenance thus exposing its passengers to grave danger. (2) that BLTB and CDCP did not exercise the diligence of a good father of a family in the selection and supervision of their employees. who were the drivers of CDCP and BLTB buses. and lifelong social humiliation. besmirched reputation and wounded feelings. moral shock. and Wilfredo Datinguinoo before the RTC. (5) that they suffered physical discomfort. respondents filed a Complaint for damages against CDCP. give respondents their due. (6) that defendants failed to act with justice.000. and (7) that they are entitled to a reasonable amount of attorney's fees and litigation expenses. BLTB. and Datinguinoo. In this regard. Article 2180 provides that the obligation imposed by Article 2176 is demandable for the acts or omissions of those persons for whom one is responsible. Jr. 2006 CONSTRUCTION DEVELOPMENT CORPORATION OF THE PHILIPPINES.000. They regained consciousness only when rescuers created a hole in the bus and extricated their legs from under the seats..

respondent Facts: Petitioners and Gervel. However. However. RGC and Gervel cannot automatically claim for indemnity from Qua because Qua himself is liable directly to Metrobank and PDCP. No. QUA. together with respondent were stockholders of Ladtek. Gervel and Qua became absolute simultaneously when Ladtek defaulted in its loan payment. Ladtek obtained loans from Metropolitan Bank and Trust Company and Private Development Corporation of the Philippines with RGC. RGC. whether the solidary debtor has paid the creditor. the parties would reimburse eeach other the proportionate share of any sum that any might pay to the creditors. Issue: Whether payment of the entire obligation is an essential condition for reimbursement? Held: Payment of the entire obligation by one or some of the solidary debtors results in a corresponding obligation of the other debtors to reimburse the paying debtor. Thus. The Agreements all state that in case of default in the payment of Ladtek’s loans.R. Gervel and Qua as sureties. Among themselves. As a result. the other solidary debtors should indemnify the former once his liability becomes absolute. in this case. vs. the liability of RGC. RGC and Gervel insist that it is not an essential condition that the entire obligation must first be paid before they can seek reimbursement from Qua. Therefore. RGC.22% of any amount which they paid or would pay Metrobank and PDCP. Indemnity and Pledge of Shares of Stocks. Hence. The Agreements are contracts of indemnity not only against actual loss but against liability as well. LAWRENCE C. RGC and Gervel contend that Qua should pay 42. payment of the entire obligation is not an essential condition before they can seek reimbursement from Qua. Page 278 of 845 . Inc. Metrobank filed a collection case against Ladtek.. in this case. Gervel and Qua executed Agreements for Contribution. Gervel and Qua all became directly liable at the same time to Metrobank and PDCP. petitioners. Gervel and Qua. Ladtek defaulted on its loan obligations to Metrobank and PDCP. RGC and Gervel assail the Court of Appeals ruling that the parties’ liabilities under the Agreements depend on the full payment of the obligation. 144413 July 30. RGC. Inc. 2004 REPUBLIC GLASS CORPORATION. G.

Antonio Gonzales. 1987. thereby holding that the liability of the six respondents in a case adjudicated by the NLRC is solidary despite the absence of the word "solidary" in the dispositive portion of the Decision. none of them may be compelled to satisfy in full said judgment. The said fallo expressly states the following respondents therein as liable. it is already a well-settled doctrine in this jurisdiction that. Gerardo Sicat. 101723. solidary or not? RULING: In the dispositive portion of the Labor Arbiter.can no longer be allowed in this case because the judgment has already become final and executory. when their liability should merely be joint. Chiu Chin Gin. 189. NLRC GR No. the correction -. the word "solidary" does not appear. thus their liability should merely be joint.which is substantial -. 1987. Moreover. 1991 issued by the National Labor Relations Commission in RAB-VII-0711-84 on the alleged ground that it committed a grave abuse of discretion amounting to lack of jurisdiction in upholding the Alias Writ of Execution issued by the Labor Arbiter which deviated from the dispositive portion of the Decision dated March 10. 2000 FACTS: This is a petition for certiorari assailing the Resolution dated September 4. when it is not provided in a judgment that the defendants are liable to pay jointly and severally a certain sum of money. Nor can it be inferred therefrom that the liability of the six (6) respondents in the case below is solidary. Industrial Management Development Corporation (petitioner INIMACO). ISSUE: Is the petitioner’s liability pursuant to the Decision of the Labor Arbiter dated March 10. 331 SCRA 640 May 11. namely: Filipinas Carbon and Mining Corporation. Industrial Management v. Granting that the Labor Arbiter has committed a mistake in failing to indicate in the dispositive portion that the liability of respondents therein is solidary. Page 279 of 845 . and Lo Kuan Chin.

particularly driver Leonardo. Taguig. a Metro Manila Transit Corp.25 a day. she was unable to work for three and one half months (3 1/2). rebuttable only by proof of observance of the diligence of a good father of a family. who being then a minor was assisted by her parents. Taguig. the passenger jeepney ramming the left side portion of the MMTC bus. 1993 FACTS: On August 28. 104408 June 21. As both vehicles approached the intersection of DBP Avenue and Honeydew Road they failed to slow down and slacken their speed. the case is undoubtedly based on a quasi-delict under Article 2180. Metro Manila bound for its terminal at Bicutan. THE COURT OF APPEALS G. Bicutan. A complaint for damages was filed by herein private respondent. Leonardo was negotiating Honeydew Road. is sufficient. RULING: With the allegation and subsequent proof of negligence against the defendant driver and of an employer-employee relation between him and his co-defendant MMTC in this instance. neither did they blow their horns to warn approaching vehicles. against all of therein named defendants following their refusal to pay the expenses incurred by the former as a result of the collision. bus with plate no. plaintiff-appellant Nenita Custodio boarded as a paying passenger a public utility jeepney with plate No. a collision between them occurred. where she then worked as a machine operator earning P16.R. she was confined for twenty-four (24) days. and as a consequence. No. When the employee causes damage due to his own negligence while performing his own duties. As a consequence. Metro Manila another fast moving vehicle. 1979. D7 305 PUJ. then driven by defendant Agudo Calebag and owned by his co-defendant Victorino Lamayo. Thereat. She was brought to the Medical City Hospital where she regained consciousness only after one (1) week. The collision impact caused plaintiff-appellant Nenita Custodio to hit the front windshield of the passenger jeepney and (she) was thrown out therefrom. Metro Manila. 3Z 307 PUB (Philippines) '79 driven by defendant Godofredo C. Said defendants denied all the material allegations in the complaint and pointed an accusing finger at each other as being the party at fault. falling onto the pavement unconscious with serious physical injuries. For failure to rebut such legal presumption of negligence in Page 280 of 845 . bound for her work at Dynetics Incorporated located in Bicutan. there arises the juris tantum presumption that the employer is negligent. Bicutan. METRO MANILA TRANSIT CORPORATION vs. Taguig. While the passenger jeepney was travelling at (a) fast clip along DBP Avenue. 190. ISSUE: Whether the evidence presented during the trial with respect to the proof of due diligence of petitioner MMTC in the selection and supervision of its employees.

the selection and supervision of employees. Page 281 of 845 . the basis of the liability being the relationship of pater familias or on the employer's own negligence. the employer is likewise responsible for damages. Hence. directly and solidarily liable for damages and it is immaterial that one action is based on quasi-delict and the other on culpa contractual. the court consistently held that where the injury is due to the concurrent negligence of the drivers of the colliding vehicles. Hence. decision of respondent Court of Appeals is affirmed. the drivers and owners of the said vehicles shall be primarily. as the solidarity of the obligation is justified by the very nature thereof.

and against Pantanosas. On January 27. any one. and each creditor is entitled to demand the whole obligation. Jr. his co-maker. private respondent sent petitioner telegrams demanding payment thereof. especially because the dismissal of the case against Pantanosas was upon the motion of private respondent itself.R. Naybe and Gregorio D. 1983 and on June 8. The petitioner moved for reconsideration. affirmed the decision of the lower court. constituted a release of his obligation. HELD: The dismissal of the complaint against Naybe and Pantanosas did not constitute a release of petitioner’s obligation. private respondent also sent registered mail a final letter of demand to Rene C. The promissory note involved in this case expressly states that the three signatories therein are jointly and severally liable. Petitioner signed the promissory note as a solidary co- maker and not as a guarantor. On December 11. some or all of them may be proceeded against for the entire obligation. 000. the principal debtor. together with Rene C. which was later on denied by the respondent Court of Appeals. The lower court rendered its decision holding petitioner solidarily liable and to pay herein respondent bank the amount of P50. 1983. only the summons addressed to petitioner was served for the reason that defendant Naybe had gone to Saudi Arabia. A solidary or joint and several obligation is one in which each debtor is liable for the entire obligation. The promissory note was due on May 5. 000. Since both obligors did not respond to the demand made. No. private respondent filed on January 24. 1983. 1984. Petitioner appealed the said decision to the Court of Appeals. 1986 a complaint for collection of the sum of P50. On November 14. 1996 FACTS: On February 3. Meanwhile. COURT OF APPEALS G. 96405.00 holding themselves jointly and severally liable to private respondent Philippine Bank of Communications. ISSUE: Whether or not the dismissal of the complaint against Naybe. June 26.00 against the three (3) obligors. Inciong. Naybe. The choice is left to the solidary creditor to determine against whom he will enforce collection Page 282 of 845 . the lower court dismissed the case against defendant Pantanosas as prayed by herein private respondent. INCIONG VS. Pantanosas signed a promissory note in the amount of P50. petitioner Baldomero L. 1983. 191. 1987. Said due date expired without the promissors having paid their obligation. The respondent court. however. 000.00 plus interest thereon.

Page 283 of 845 . when the law so provides or when the nature of the obligation so requires. the presumption is that the obligation is joint so that each of the debtors is liable only for a proportionate part of the debt. Under Article 1207 of the Civil Code. when there are two or more debtors in one and the same obligation. There is solidary liability only when the obligation expressly so states.

In granting the loan to PBM. has the right under the surety to proceed against Ching for the entire amount of PBM’s loan. 2003 FACTS: This is a petition for review on certiorari to annul the Decision dated 16 July 1999 of the Court of Appeals in CA-G. Court of Appeals. 192. referring to amounts PBM "may now be indebted or may hereafter become indebted" to TRB. to the amount stated in PBM’s rehabilitation plan.R. This is evident from the tenor of the deed itself. PHILIPPINE BLOOMING MILLS VS CA GR No. The petition is a thinly veiled attempt to make the Supreme Court reconsider its decision in the prior case of Traders Royal Bank v. Ching agreed to pay in full PBM’s loan in case PBM fails to pay in full for any reason. as creditor. Ching would like the Court to rule that his liability is limited. Inc. 39690. The Court of Appeals affirmed with modification the Decision dated 31 August 1992 rendered by Branch 113 of the Regional Trial Court of Pasay City ("trial court"). This is clear from Article 1216 of the Civil Code whereby the creditor may proceed against any one of the solidary debtors. As surety. Page 284 of 845 . The law expressly allows a suretyship for "future debts (Article 2053). Ching invokes Article 1222. Thus. CV No. This was the very purpose of the surety. ("PBM"). In claiming this reduced liability. 142381 October 15. including its insolvency. The trial court’s Decision declared petitioner Alfredo Ching ("Ching") liable to respondent Traders Royal Bank ("TRB") for the payment of the credit accommodations extended to Philippine Blooming Mills. at most. TRB required Ching’s surety precisely to insure full recovery of the loan in case PBM becomes insolvent or fails to pay in full. Ching cannot use PBM’s failure to pay in full as justification for his own reduced liability to TRB. TRB. ISSUE: Is Ching is liable for obligations PBM contracted after execution of the Deed of Suretyship? RULING: Ching is liable for credit obligations contracted by PBM against TRB before and after the execution of the 21 July 1977 Deed of Suretyship. as well as its Resolution dated 17 February 2000 denying the motion for reconsideration.

Forming part of the agreement was the Special Power of Attorney executed by respondent. (Mendoza) and Oniler Lontoc (Lontoc) of QTCI met with respondent Thomas George (respondent). On the same day. 193. may validly attach. Personal liability of a corporate director. concluded the Customer's Agreement despite the fact that the appointed attorney-in-fact was not a licensed dealer. the Securities and Exchange Commission (SEC) issued a Cease-and- Desist Order against QTCI. encouraging the latter to invest with QTCI.(1) he assents to a patently unlawful act of the corporation. respondent finally invested with QTCI. 1995. QTCI claimed that they were not aware of. It was only after it became apparent that QTCI could no longer resume its business transactions by reason of the CDO that respondent raised the alleged lack of authority of the brokers or traders handling his account. rendering him estopped. any arrangement which resulted in the account of respondent being handled by unlicensed brokers. save for certain exceptions. and respondent signed the Customer's Agreement. or officer. Collado. In 1995. QUEENSLAND-TOKYO COMMODITIES et al. as a rule. along (although not necessarily) with the corporation. Alarmed by the issuance of the CDO. respondent demanded from QTCI the return of his investment. and in fact recognized. trustee. Doctrine dictates that a corporation is invested by law with a personality separate and distinct from those of the persons composing it. petitioners permitted Mendoza to handle respondent's account. in behalf of QTCI. in behalf of QTCI. but it was not heeded. corporate officers who entered into contracts in behalf of the corporation cannot be held personally liable for the liabilities of the latter. or when he is guilty of bad faith or gross Page 285 of 845 . Worse. THOMAS GEORGE GR 172727. On June 20. Jr. ISSUE: Whether or not QTCI should be held liable for the loss incurred by George in the investment he made with the corporation. On July 7. 1996. Petitioners did not object to. Mendoza's appointment as respondent's attorney-in-fact. Guillermo Mendoza. only when . nor were they privy to. Collado. 08 September 2010 FACTS: QTCI is a duly licensed broker engaged in the trading of commodity futures. RULING: YES. without questioning the license or the authority of the traders handling his account. appointing Mendoza as his attorney-in- fact with full authority to trade and manage his account. vs. They pointed out that respondent transacted business with QTCI for almost a year. upon Mendoza's prodding. It recognized Mendoza and Collado as its brokers. such that.

being the chief operating officer. himself a ranking officer of QTCI. or (4) he is made by a specific provision of law personally answerable for his corporate action.negligence in directing its affairs. or when there is a conflict of interest resulting in damages to the corporation. (2) he consents to the issuance of watered down stocks or who. Lau. cannot escape the fact that had he exercised a modicum of care and discretion in supervising the operations of QTCI. its stockholders. cannot feign innocence on the existence of these unlawful activities within the company. he could have detected and prevented the unlawful acts of Collado and Mendoza. as president of [petitioner] QTCI. especially so that Collado. Romeo Lau. Page 286 of 845 . or other persons. having knowledge thereof. does not forthwith file with the corporate secretary his written objection thereto. (3) he agrees to hold himself personally and solidarily liable with the corporation. is involved in the unlawful execution of customers orders.

Shrimp Specialists failed to comply with its obligation to make good the replacement checks Shrimp Specialists argues that despite the written agreement. Fuji’s Vice-President and owner. P30. Shrimp Specialists began purchasing prawn feeds from Fuji and paid for them in the regular course of business. Fuji deposited these checks without first replacing the defective feeds or at least informing Shrimp Specialists in advance that it would not replace the defective feeds.427 for the prawn feeds delivered plus interests. 194. the CA rendered a decision modifying the trial court’s decision. met in Ozamiz City to discuss the unpaid deliveries. Shrimp Specialists and Eugene Lim elevated the case to the CA." Fuji presents this sole issue: whether the CA erred in dismissing the case against respondent Eugene Lim and freeing him from solidary liability with Shrimp Specialists. When Fuji was informed they promised to give a better quality thereof. Thus. On 28 June 2005. ISSUE: Whether the CA erred in interpreting the provision "to inform in advance in case the same checks cannot be deposited for failure to replace the defective feeds. the drawee bank dishonored all the checks due to a stop-payment order In January 1990. However. Fuji denies that the feeds were contaminated. Fuji adds that when the checks were presented for payment. Ervin Lim. Inc. Fuji asserts that Shrimp Specialists requested to put on hold the deposit of the checks due to insufficient funds. In 1987. v. The prawn feeds would be used in prawn farms under Shrimp Specialists’ technical supervision and management. under which Fuji agreed to supply prawn feeds on credit basis to Shrimp Specialists. Fuji-Triumph December 7 2009 FACTS: Shrimp Specialists and Fuji entered into a Distributorship Agreement. Shrimp Specialists contends that it was constrained to issue another stop-payment order for these check Fuji filed criminal charges against the officers of Shrimp Specialists who signed the checks for violation of the Anti-Bouncing Checks Law. This agreement was reduced into writing and signed by both parties on behalf of their corporations Fuji claims that despite repeated demands for payment. The CA affirmed the trial court’s decision to hold Shrimp Specialists liable to pay Fuji P767. The charges were all dismissed. After the meeting.000 as attorney’s fees and cost of suit. the CA absolved Eugene Lim from any liability Hence this appeal. It was alleged that the same were contaminated. both agreed that Shrimp Specialists would issue another set of checks to cover the ones issued earlier. Page 287 of 845 . and Edward Lim. Shrimp Specialist. Shrimp Specialists’ Finance Officer.

by specific provision of law. (b) act in bad faith or with gross negligence in directing the corporate affairs. none of these exceptional circumstances is present. trustee or officer is made. (c) are guilty of conflict of interest to the prejudice of the corporation. did not forthwith file with the corporate secretary his written objection thereto. However. Hence. personally liable for his corporate action In this case. and employees. the petitions are denied Page 288 of 845 . acting through its directors. its stockholders or members. When directors and trustees or. In its decision. the officers of a corporation: (a) vote for or assent to patently unlawful acts of the corporation. having knowledge thereof. officers.DECISION: The general rule is that obligations incurred by the corporation. trustee or officer has contractually agreed or stipulated to hold himself personally and solidarily liable with the corporation. are its sole liabilities. When a director or officer has consented to the issuance of watered stocks or who. but only under the following exceptional circumstances: 1. or When a director. and other persons. the trial court failed to provide a clear ground why Eugene Lim was held solidarily liable with Shrimp Specialists. When a director. solidary liability may be incurred. in appropriate cases.

2006.00 (with 2% withholding tax) as advance payment.R. Lucky Star engaged respondent Stronghold which issued two (2) bonds in favor of petitioner. ASSET BUILDERS CORPORATION vs. 141558.004 or the required downpayment for the drilling work. and the accessory surety relationship between the principal (Lucky Star) and the surety (respondent).000. respondent’s liability under the Page 289 of 845 . does not change in any material way the obligee’s relationship with the principal obligor.000. thereafter. and equipment including technical supervision to drill one (1) exploratory production well on the project site. Lucky Star.150. RULING: Suretyship. petitioner sent a demand letter to Lucky Star for the immediate completion of the drilling work with a threat to cancel the agreement and forfeit the bonds should it still fail to complete said project within the agreed period. ABC paid Lucky Star P575. tools. The surety’s role arises only upon the obligor’s default. In the case at bench. covers the sum of P575. 2006. however. On August 3. The total contract price for the said project was P1. On the same date. G. when Lucky Star failed to finish the drilling work within the agreed time frame despite petitioner’s demand for completion. To guarantee faithful compliance with their agreement. Thus. the obligee accepts the surety’s solidary undertaking to pay if the obligor does not pay. 2006. in essence. 2006. at which time. ABC sent a Notice of Rescission of Contract with Demand for Damages to Lucky Star ISSUE: Whether or not Stronghold should be held liable. 195. the acceptance does not give the surety the right to intervene in the principal contract. INC. as a necessary consequence. 187116 October 18. 2006.000. STRONGHOLD INSURANCE COMPANY. it was already in delay. Such acceptance. SURETY BOND G(16) No. dated May 9.00. Neither does it make the surety an active party to the principal obligee-obligor relationship. 2010 FACTS: (Lucky Star) as part of the completion of its project to construct the ACG Commercial On April 28. On May 20. representing 50% of the contract price. The first. By July 18. Due to this default. it can be directly held liable by the obligee for payment as a solidary obligor. In this arrangement. Asset Builders Corporation (ABC) entered into an agreement with Lucky Star Drilling & Construction Corporation Complex 3 Lucky Star was to supply labor. just a few days before the agreed completion date of 60 calendar days. materials. Lucky Star’s liability attached and. No. commenced the drilling work. Lucky Star managed to accomplish only ten (10) % of the drilling work. contains two types of relationship – the principal relationship between the obligee (petitioner) and the obligor (Lucky Star).

in case of suretyship) in favor of the one who paid (the surety). respondent should be answerable to petitioner on account of Lucky Star’s non-performance of its obligation as guaranteed by the performance bond. Page 290 of 845 . Thus. In fine. respondent is entitled to reimbursement from Lucky Star for the amount it may be required to pay petitioner arising from its bonds. Article 1217 of the New Civil Code acknowledges the right of reimbursement from a co- debtor (the principal co-debtor. Finally.surety agreement arose.

rest day. if any. contracts with an independent contractor for the performance of any work. not being an employer. 11 security guards (“security guards”) whom Eparwa assigned to LDCU from 1 December 1997 to 30 November 1998. legal holiday pay.196. job or project. shall be paid in accordance with the provisions of this Code. LDCU agreed with the Labor Arbiter’s decision on the security guards’ entitlement to salary differential but challenged the propriety of the amount of the award. — Whenever an employer enters into a contract with another person for the performance of the former’s work. On 21 December 1998. Article 109. is made the indirect employer of the contractor’s employees for purposes of paying the employees their wages should the contractor be unable to pay them. night shift differential. entered into a Contract for Security Services. filed a complaint before the NLRC Regional Arbitration Branch No. LICEO DE CAGAYAN UNIVERSITY G. No. The Labor Arbiter held Eparwa and LDCU solidarily liable pursuant to Article 109 of the Labor Code. Eparwa and LDCU. The principal. 107 and 109 of the Labor Code read:Art. 13th month pay. v. 106. service incentive leave. on the other hand. LDCU alleged that security guards not similarly situated were granted uniform monetary awards and that the decision did not include the basis of the computation of the amount of the award. The complaint was filed against both Eparwa and LDCU for underpayment of salary.R. The Labor Arbiter found that the security guards are entitled to wage differentials and premium for holiday and rest day work. every employer or indirect employer shall be held responsible with his contractor or subcontractor for any violation of any provision of this Code. ISSUE: Is LDCU alone ultimately liable to the security guards for the wage differentials and premium for holiday and rest day pay? RULING: Articles 106. LDCU filed an appeal before the NLRC. if not guarantees. 2006 FACTS: On 1 December 1997. association or corporation which. partnership. overtime pay. Labor Code]. This joint and several liability of the contractor and the principal is mandated by the Labor Code to assure compliance of the provisions therein including the statutory minimum wage [Article 99. the employees of the contractor and of the latter’s subcontractor. 150402 Nov 8. For purposes of determining the extent of their civil liability under this Chapter. 10 in Cagayan de Oro City. task. This joint and several liability facilitates. and payment for attorney’s fees. Solidary liability. — The provisions of the immediately preceding Article shall likewise apply to any person.Article 107. payment of the workers’ performance of Page 291 of 845 . Contractor or subcontractor. they shall be considered as direct employers. Indirect employer. The contractor is made liable by virtue of his status as direct employer. — The provisions of existing laws to the contrary notwithstanding. ESPARWA SECURITY.

107 and 109 of the Labor Code. the actual source of the payment of their wage differentials and premium for holiday and rest day work does not matter as long as they are paid. LDCU’s ultimate liability comes into play because of the expiration of the Contract for Security Services. task. may collect from anyone of the solidary debtors.any work. There is no privity of contract between the security guards and LDCU. Solidary liability does not mean that. such as the security guards. job or project. This is the import of Eparwa and LDCU’s solidary liability. as between themselves. but LDCU’s liability to the security guards remains because of Articles 106. Page 292 of 845 . thus giving the workers ample protection as mandated by the 1987 Constitution. two solidary debtors are liable for only half of the payment. For the security guards. Creditors.

as above stated. however.96 as attorneys' fees. both undertook to "jointly and severally authorize the respondent Philippine Commercial and Industrial Bank. 1973. No. securities or other real or personal property of value which hands (sic) on deposit or otherwise belonging to anyone or all of us. the money claim of PCIB should be dismissed and prosecuted against the estate of the late Tanjuatco. On July 11. Defendant Carlos Dimayuga. On May 28.000.139. Hence. the sum of ten thousand (P10.000. they undertook among others to jointly and severally authorize respondent bank.60 with interest at 10% per annum until fully paid plus P913. 1970 as evidenced by corresponding receipts thereto. The Court of Appeals dismissed the appeal. the money claim of the respondents should be dismissed and prosecuted against the estate of the late Pedro Tanjuatco. In the aforementioned promissory note. 42542 Aug 5. 1962 with interest at the rate of ten percent (10%) per annum in case of non-payment at maturity as evidenced by and in accordance with the terms and conditions of the promissory note executed jointly and severally by defendants.00) pesos as evidenced by a promissory note executed and signed by Pedro Tanjuatco and Carlos Dimayuga. securities. the trial court denied the motion for lack of merit. at its option to apply to the payment of this note any and all funds. real or personal properties. 197. On June 22.000. a complaint was filed on July 11. now deceased. 1974. Upon the default of the promissors to pay. this petition. Moreover. Tanjuatco. 1991 FACTS: On February 6. Carlos Dimayuga bound himself to pay jointly and severally with Pedro Tanjuatco interest at the rate of 10% per annum on the said amount of P10. charges and partly on the principal.000. These payments were nevertheless applied to past interests. there can be no dispute that Carlos Dimayuga bound himself jointly and severally with Pedro C. ISSUE: Whether the position of the petitioner that Pedro Tanjuatco having died on December 23. at its option to apply to the payment of this note. 1974. 1974. 1962. etc. DIMAYUGA vs. the petitioner appealed to the respondent court. petitioner filed a motion alleging that since Pedro Tanjuatco died on December 23. 1969 by the PCIB for some of money. any and all funds. In addition. Otherwise stated.00 until fully paid.00 plus 10% interest per annum. PHILIPPINE COMMERCIAL & INDUSTRIAL BANK Division G. RULING: From the evidence presented.00 by way of partial payments made from August 1. The indebtedness was to be paid on May 7. 1969 to May 7. the trial court rendered a decision holding defendants jointly and severally liable to pay the plaintiff the sum of P9.R.Not satisfied. to pay the obligation with PCIB in the amount of P10. the promissory note in Page 293 of 845 . 1973. petitioner borrowed from the plaintiff-respondent. had remitted to the plaintiff -respondent the amount totalling P4. in case of non-payment. belonging to anyone or all of them.

It is well settled under the law and jurisprudence that when the obligation is solidary. the appeal interposed by petitioner-appellant is dismissed for lack of merit and the decision of the Court of First Instance is Affirmed in toto.question provides in unmistakable language that the obligation of petitioner Dimayuga is joint and several with Pedro C. Tanjuatco. As expressly allowed by Article 1216 of the Civil Code." The notice is undoubtedly left to the solidary creditor to determine against whom he will enforce collection. the creditor may proceed against any one of the solidary debtors or some or all of them simultaneously. Thus. "Hence. there is nothing improper in the creditor's filing of an action against the surviving solidary debtors alone. instead of instituting a proceeding for the settlement of the estate of the deceased debtor wherein his claim could be filed. the creditor may bring his action in toto against the debtors obligated in solidum. Page 294 of 845 .

he also mortgaged a "Taunus" car owned by the latter. at his office at 215 Buendia Ave. Petitioner had no part in the said contract. the total sum of SEVENTEEN THOUSAND FIVE HUNDRED (P17. promise to pay to the order of CONRAD C. Quezon City. Page 295 of 845 . without necessity of demand. Delgado executed a chattel mortgage over a Willy's jeep owned by him.. Makati. Manolo P. 1993 FACTS: On or about October 16.00) PESOS. he was the only one bound by the contract of loan.500. This prompted Leviste to file a collection suit docketed as Civil Case No. I. Kamias Rd. or when the law or the nature of the obligation requires solidarity. nowhere could it be seen from the agreement that petitioner was solidarily bound with Delgado for the payment of the loan. The law is clear that "(c)ontracts take effect only between the parties. Delgado. L-48359 March 30. The Court of Appeals held that petitioner and Delgado were solidary debtors. But by some stretch of the imagination. Nowhere did it appear in the promissory note that petitioner was a co-debtor. Cerna (petitioner). CELERINO DELGADO. Rizal. The period lapsed without Delgado paying the loan. 1972. CERNA VS CA GR No. with postal address at 98 K-11 St. This ignores the basic precept that "(t)here is a solidary liability only when the obligation expressly so states." We have already stated that the contract of loan. NINETY (90) DAYS after date. ISSUE: Are petitioner and Delgado solidary debtors? RULING: Only Delgado signed the promissory note and accordingly.. petitioner was held solidarily liable for the debt allegedly because he was a co- mortgagor of the principal debtor. LEVISTE. And acting as the attorney-in-fact of herein petitioner. 17507 with the Court of First Instance of Rizal. Philippine Currency.198.. Celerino Delgado (Delgado) and Conrad Leviste (Leviste) entered into a loan agreement which was evidenced by a promissory note worded as follows: FOR VALUE RECEIVED. with interest at the rate of TWELVE (12%) PERCENT per annum On the same date. Branch XXII against Delgado and petitioner as solidary debtors. was signed by Delgado only. Thus. as evidenced by the promissory note.

I. Makati. 1972. LEVISTE. This ignores the basic precept that "(t)here is a solidary liability only when the obligation expressly so states. Nowhere did it appear in the promissory note that petitioner was a co-debtor. But by some stretch of the imagination. Celerino Delgado (Delgado) and Conrad Leviste (Leviste) entered into a loan agreement which was evidenced by a promissory note worded as follows: FOR VALUE RECEIVED. Petitioner had no part in the said contract. 17507 with the Court of First Instance of Rizal. Branch XXII against Delgado and petitioner as solidary debtors.198..500.. he also mortgaged a "Taunus" car owned by the latter. promise to pay to the order of CONRAD C. CERNA VS CA GR No. The law is clear that "(c)ontracts take effect only between the parties. with postal address at 98 K-11 St. Manolo P. Thus. The Court of Appeals held that petitioner and Delgado were solidary debtors. he was the only one bound by the contract of loan. Rizal. L-48359 March 30. nowhere could it be seen from the agreement that petitioner was solidarily bound with Delgado for the payment of the loan. with interest at the rate of TWELVE (12%) PERCENT per annum On the same date. Delgado. The period lapsed without Delgado paying the loan. petitioner was held solidarily liable for the debt allegedly because he was a co- mortgagor of the principal debtor. Page 296 of 845 . or when the law or the nature of the obligation requires solidarity. as evidenced by the promissory note. NINETY (90) DAYS after date. This prompted Leviste to file a collection suit docketed as Civil Case No. And acting as the attorney-in-fact of herein petitioner.00) PESOS." We have already stated that the contract of loan. without necessity of demand. the total sum of SEVENTEEN THOUSAND FIVE HUNDRED (P17. CELERINO DELGADO. Philippine Currency. Delgado executed a chattel mortgage over a Willy's jeep owned by him. Cerna (petitioner). at his office at 215 Buendia Ave. 1993 FACTS: On or about October 16. was signed by Delgado only. Kamias Rd.. Quezon City. ISSUE: Are petitioner and Delgado solidary debtors? RULING: Only Delgado signed the promissory note and accordingly.

131641.800. alone cannot contest the validity of the Deed of Sale because the estate of Aurea has not yet been settled. Page 297 of 845 . 199. In the course of the intestate proceedings. died on December 18. 2000 FACTS: Maximino Nazareno. NC-28. it can not be annulled by only one of them. Sr. alone contests the validity of the sale. Hence. the argument would nonetheless be without merit. The obligation is clearly indivisible because the performance of the contract cannot be done in parts. and Aurea Poblete were husband and wife.. Sr. The indivisibility refers to the prestation and not to the object. can not cause its annulment while its validity is sustained by the estate of Aurea Poblete. After the death of Maximino. The estate of Maximino A. 1970. COURT OF APPEALS G. Branch XV. As such. 1970 supposedly conveyed the six lots to Natividad. with the consent of Aurea. Proc. to Natividad on January 29. Sr. Nazareno. if petitioners’ only point is that the estate of Maximino. The validity of the contract can be questioned by anyone affected by it. Sr. the outcome of the suit will bind the estate of Aurea as if no sale took place at all. it being indivisible. even if the estate of Maximino. the present suit must fail. And since this suit was filed only by the estate of Maximino A. Sr. Natividad.00. Romeo discovered that his parents had executed several deeds of sale conveying a number of real properties in favor of his sister. Romeo was appointed administrator of his father’s estate. 1980.. where the case was docketed as Sp. the case was transferred to the Regional Trial Court of Naic. Sr. Petitioners are mistaken in basing the indivisibility of a contract on the number of obligors. In any case. February 23. Sr. 1970 for the total amount of P47. Aurea died on April 15. No. Upon the reorganization of the courts in 1983. while Maximino. without including the estate of Aurea Poblete. HELD: The Supreme court held that the Deed of Absolute Sale is an indivisible contract founded on an indivisible obligation. NAZARENO VS. ISSUE: Whether or not the Deed of Absolute of Sale can be equated as a divisible obligation. Romeo filed an intestate case in the Court of First Instance of Cavite. Nazareno. whatever may be the nature of the thing which is the object thereof.R. A void contract is inexistent from the beginning. Sr. Cavite. The Deed of Sale of January 29. One of the deeds involved six lots in Quezon City which were allegedly sold by Maximino. An obligation is indivisible when it cannot be validly performed in parts. No. otherwise the value of what is transferred is diminished.

because the Agreement supplanted the Complaint itself. Sison against Jaime and Perlita San Juan docketed as Civil Case No. was occupied by the defendants for more than a year. taking into consideration the conditions of the Compromise Agreement. plaintiffs alleged that they are the registered owners of a parcel of land. When the parties entered into a Compromise Agreement. ALONZO VS SAN JUAN GR No. the trial court issued its Order dated 11 August 1998 denying the motion. 137549 February 11. plaintiffs sent a letter demanding that the defendants vacate the premises. in clear terms. they shall vacate and surrender possession of the land that they are occupying and the petitioners shall be entitled to obtain immediately from the trial court the corresponding writ of execution for the ejectment of the respondents. Once approved judicially. Acting on the motion. plaintiffs discovered that a portion on the left side of the said parcel of land with an area of one hundred twenty-five (125) square meters. Plaintiffs subsequently filed an Amended Motion for Execution. it has not been shown to the full satisfaction of this Court whether the payments were made specifically to satisfy respondents’ obligation under the Compromise Agreement. Even assuming that payments were made. hence. Alleging that they failed to abide by the provisions of the Compromise Agreement by their failure to pay the amounts due thereon. This provision must be upheld. nor were the circumstances under which the payments were made explained. the original action for recovery of possession was set aside and the action was changed to a monetary obligation. In their Complaint. Q-96-29415 before the Regional Trial Court (RTC) of Quezon City. Alonzo and Teresita A. ISSUE: Is the RTC decision correct? RULING: In herein case. During the pendency of the case. 2005 FACTS: A complaint for recovery of possession was filed by Aurelio P. Page 298 of 845 . Items 11 and 12 of the Compromise Agreement provided. 200. more or less. the Compromise Agreement can not and must not be disturbed except for vices of consent or forgery. the filing of the Complaint. At around June of 1996. Branch 77. Respondents are thus bound to fulfill what has been expressly stipulated therein. A demand letter was sent to the defendants in August of 1996 requiring them to vacate the property but they refused to comply. Respondents’ contract with the petitioners have the force of law between them. the parties agreed to enter into a Compromise Agreement which the trial court approved in a Judgment. the respondents failed to discharge their burden of proving payment. that in case of failure to pay on the part of the respondents. without their prior knowledge or consent.

1979. 1974. however.500. In cases where no interest had been stipulated by the parties.00 plus the legal rate of interest thereon from July 24. The affirmation now comes to review before the SC.00 as attorney's fees and to pay the costs of suit. 201. Article 2212 contemplates the presence of stipulated or conventional interest which has accrued when demand was judicially made. ordering him to pay to the plaintiff the sum of P66. issued a writ of attachment over real properties covered by TCT Nos. 115821 October 13. ISSUE: Should the payment of interest be simple or compound? RULING: As therein held. with Judge Ricardo Diaz. The CA affirmed the judgment. 1974. plus P5. In his Decision dated October 31. then.00 as attorney's fees.000. Page 299 of 845 . so that the legal rate of interest should be computed from January 4. Judge Diaz ordered private respondent Afable to pay petitioner P66. then presiding. Valentin Afable Jr." ordering the private respondent Afable to pay the petitioner the sum of P66.000. The amended Decision in the decretal portion reads: WHEREFORE.00 plus interest from July 24. 1974. as in the case of Philippine American Accident Insurance. 80718 and 10289 of private respondents. Branch 27.500. but the respondent judge orders payment of compound interest.000. plus the amount of P5. no accrued conventional interest could further earn interest upon judicial demand. On June 20.500. 1980. 1966 up to the time the same is fully paid plus the amount of P5. Judge Diaz issued an Order amending said Decision. 1966. until fully paid. instead of from July 24. and to pay the costs of suit. 1999 FACTS: The Regional Trial Court of Manila.00 as and for attorney's fees and to pay the costs of the suit. judgment is hereby rendered against the defendant. he goes beyond the confines of a judgment which had become final.00 plus the legal rate of interest thereon from January 4. DAVID VS CA GR No. When the judgment sought to be executed ordered the payment of simple "legal interest" only and said nothing about payment of compound interest..

however. No interest. executed a Contract of Agreement8 (the Contract) wherein MGM.562. and for the delivery of various services such as printing and rental.THI THU THUY T. DE GUZMAN G. in the amount of P62. ISSUE: What is the proper interest to be awarded? RULING: 1. as evidenced by Delivery Receipts and Sales Invoices and the "Report of Public Property Purchase" issued by the PNP’s Receiving and Accounting Officers to their Internal Auditor Chief. On December 8. vehicles. and it consists in the payment of a sum of money.R. the interest due shall itself earn legal interest from the time it is judicially demanded.e. one in the amount of P2. represented by the PNP. in favor of the BIR. from judicial or extrajudicial demand under and subject to the provisions of Article 1169 of the Civil Code. 1996.226. REPUBLIC OF THE PHILIPPINES vs. an interest on the amount of damages awarded may be imposed at the discretion of the court at the rate of 6% per annum. the interest due should be that which may have been stipulated in writing. facilities. MGM. Respondent averred that on December 11. Accordingly.. 175021 June 15. i.e. i. and spare parts. where the demand is established with reasonable certainty. and renovation of buildings. Civil Code) but when such certainty cannot be so reasonably established at the time the demand is made. and the other. Quezon City. released a Requisition and Issue Voucher for the acquisition of various building materials amounting to (P2.60) for the construction of a four-storey condominium building with roof deck at Camp Crame. through its chief. When the obligation is breached.288. Respondent claimed that after the PNP Chief approved the Contract and purchase order.415. Furthermore. the PNP Engineering Services (PNPES).60. 2011 FACTS: Respondent is a contractor accredited by the PNP for the supply of office and construction materials and equipment. 1169. proceeded with the delivery of the construction materials. the PNP issued two Disbursement Vouchers. undertook to procure and deliver to the PNP the construction materials itemized in the purchase order attached to the Contract. shall be adjudged on unliquidated claims or damages except when or until the demand can be established with reasonable certainty.288. 1995. representing the three percent (3%) withholding tax. the interest shall begin to run only from the date the judgment of the court is made (at which time the quantification of damages may Page 300 of 845 . the interest shall begin to run from the time the claim is made judicially or extrajudicially (Art. not constituting a loan or forbearance of money.26 in favor of MGM. In the absence of stipulation. No. When an obligation. tires. 202. 1995. repair of various equipment. a loan or forbearance of money. 2. on March 1. MGM and petitioner.34. is breached.. 1996.147. the rate of interest shall be 12% per annum to be computed from default. for the price of P2. Respondent asseverated that following the PNP’s inspection of the delivered materials on March 4.562.

the rate of legal interest. this interim period being deemed to be by then an equivalent to a forbearance of credit. in any case. 3. When the judgment of the court awarding a sum of money becomes final and executory. the legal interest rate to be imposed.be deemed to have been reasonably ascertained). above. shall be 12% per annum from such finality until its satisfaction. under Article 2209 of the Civil Code is six percent (6%) per annum. Page 301 of 845 . whether the case falls under paragraph 1 or paragraph 2.84 Since the obligation herein is for the payment of a sum of money. The actual base for the computation of legal interest shall. be on the amount finally adjudged.

in the sum of US$80. On 9 March 1995. Far East Bank Insurance Brokers. FEBIBI. FEBIBI and Makati Insurance Company are jointly and severally liable to pay respondents the full coverage of the subject insurance policy? Held: Contrary to Maxilite’s and Marques’ view. where Maxilite’s office and warehouse were located. On 24 and 26 October 1994. 2011 Facts: Maxilite Technologies. FEBTC is solely liable for the payment of the face value of the insurance policy and the monetary awards stated in the Court of Appeals’ decision. The foregoing importation was covered by a trust receipt document signed by Marques on behalf of Maxilite. dated 19 October 1994. FEBIBI. a subsidiary’s separate existence shall be respected. 24 January 1995. with the merchandise serving as collateral.1 million. January 10. Cuenco Avenue. the records are bereft of any evidence warranting the piercing of corporate veil in order to treat FEBTC. and the liability of the parent corporation as well as the subsidiary shall be confined to those arising in their respective business.265. even if FEBIBI and Makati Insurance Company are subsidiaries of FEBTC. Maxilite and Marques entered into a trust receipt transaction with FEBTC. Page 302 of 845 . 1024439 covering the period 24 June 1994 to 24 June 1995. Inc.765. No. 171379. Suffice it to state that FEBTC. Maxilite fully settled its trust receipt account. (FEBIBI) is a local insurance brokerage corporation while Makati Insurance Company is a local insurance company. which Maxilite claimed against the fire insurance policy with Makati Insurance Company. and Makati Insurance Company are independent and separate juridical entities. Accordingly. Besides.J. Marques and Maxilite maintained accounts with FEBTC.60 for Insurance Policy No. Sometime in August 1993. a fire gutted the Aboitiz Sea Transport Building along M. Both companies are subsidiaries of FEBTC. On 17 June 1993.R. Absent any showing of its illegitimate or illegal functions.00. and 6 March 1995. Far East Bank and Trust Co. upon the advice of FEBTC. Finding that Maxilite failed to pay the insurance premium in the sum of P8. Marques (Marques) is the President and controlling stockholder of Maxilite. Makati Insurance Company denied the fire loss claim on the ground of non-payment of premium. facilitated the procurement and processing from Makati Insurance Company of four separate and independent fire insurance policies over the trust receipted merchandise. Issue: Whether FEBTC. (Maxilite) is a domestic corporation engaged in the importation and trading of equipment for energy-efficiency systems. FEBTC financed Maxilite’s capital and operational requirements through loans secured with properties of Marques under the latter’s name. Jose N. Marques vs. FEBIBI sent written reminders to FEBTC. As a result. to debit Maxilite’s account. Cebu City. for the shipment of various high-technology equipments from the United States. (FEBTC) is a local bank which handled the financing and related requirements of Marques and Maxilite. FEBTC and FEBIBI disclaimed any responsibility for the denial of the claim. 203. Inc. Far East Bank G. Maxilite suffered losses amounting to at least P2.

there is no evidence showing FEBIBI’s and Makati Insurance Company’s negligence as regards the non-payment of the insurance premium. and Makati Insurance Company as a single entity.FEBIBI. Likewise. Page 303 of 845 .

000. 1993. rather a fixed sum equivalent to this rate was agreed upon. 1994 up to June 8. We note that this agreed sum can be computed at 4% interest per month. As of January 4. No. Pantaleon. the respondent filed a complaint for sum of money with the RTC to enforce the unpaid balance.00 payable for six months.00 loan shall be payable within six (6) months. on August 28.000. However.000. the P1. In turn. or a total obligation of P1.000. for a total obligation of P1. with a monthly interest of P40. 2010 FACTS: On December 8. the President and Chairman of the Board of PRISMA. Thus. P1.MENCHAVEZ G.00 for the six-month period.240.000. Page 304 of 845 . the respondent found that the petitioners still had an outstanding balance of P1.772. Nicdao that collection of interest without any stipulation in writing is prohibited by law.108.00 per court appearance and costs of suit. Thus.000. Thus. The concurrence of the two conditions is required for the payment of interest at a stipulated rate. Article 1956 of the Civil Code specifically mandates that "no interest shall be due unless it has been expressly stipulated in writing.151.00. 1997. Valdehueza and Ching v.000. Pantaleon issued a promissory note. 1997.000. P30.00 to be paid within six (6) months.R. 1997. During this period.00 per month.000.00. we held in Tan v.000. to which it applied a 4% monthly interest. 160545 March 9. ISSUE: What is the proper interest rate to be awarded? RULING: In the present case.00 loan from the respondent. plus 4% monthly interest. or from January 8. PRISMA CONSTRUCTION & DEVELOPMENT CORPORATION vs. the loan shall earn an interest of P40. the petitioners had already paid a total of P1. executed the promissory note quoted above. but no such rate of interest was stipulated in the promissory note.000.00 as of January 4.364.000." Under this provision.00 in attorney’s fees. in his personal capacity and as authorized by the Board. 204. the payment of interest in loans or forbearance of money is allowed only if: (1) there was an express stipulation for the payment of interest. the respondent issued a check for P1. Pantaleon. To secure the payment of the loan. 1994. obtained a P1. and (2) the agreement for the payment of interest was reduced in writing.240.

the interest due shall itself earn legal interest from the time it is judicially demanded.Applying this provision..e.e.000. 1994. and it consists in the payment of a sum of money. Inc. i. a loan or forbearance of money. as agreed upon by the parties in the promissory note. the interest due should be that which may have been stipulated in writing." Page 305 of 845 . Furthermore. or from January 8. i. the interest on the loan should be at the legal interest rate of 12% per annum. Court of Appeals: When the obligation is breached. from judicial or extrajudicial demand under and subject to the provisions of Article 1169 of the Civil Code.. consistent with our ruling in Eastern Shipping Lines. 1994 to June 8. we find that the interest of P40.00 per month corresponds only to the six (6)-month period of the loan. v. the rate of interest shall be 12% per annum to be computed from default. Thereafter. In the absence of stipulation.

00. On appealed. each in the amount of P100.R. less whatever amount was thus far paid and validly deducted from the principal sum originally claimed. On 16 April 1996 and 1 May 1996.000. No. PEOPLE OF THE PHILIPPINES G. However. Macalalag executed Acknowledgment/Affirmation Receipts promising to pay Estrella the face value of the loans in the total amount of P200. THERESA MACALALAG vs.The MTCC found the accused Theresa Macalalag guilty beyond reasonable doubt of the crime charged and is likewise ordered to pay as civil indemnity the total amount of P200. each in the amount of P100. 22. Macalalag issued two Philippine National Bank (PNB) Checks on 30 June 1996.000. in favor of Estrella.00.00 as liquidated damages and attorney's fees in the total sum of P40. petitioner Theresa Macalalag obtained loans from Grace Estrella (Estrella).000.000. particularly on 30 July 1995 and 16 October 1995. 2006 FACTS: On two separate occasions.00 within two months from the date of its execution plus 6% interest per month for each loan. Finding the interest rates so burdensome. Hence. each bearing an interest of 10% per month. she further obligated herself to pay for the two (2) loans the total sum of P100. 164358 December 20. 22 before the Municipal Trial Court in Cities (MTCC) of Bacolod City.000. Macalalag requested Estrella for a reduction of the same to which the latter agreed.00 with interest at the legal rate from the time of the filing of the informations until the amount is fully paid. Macalalag consistently paid the interests. RULING: Page 306 of 845 .00 as stipulated by the parties the moment she breaches the terms and conditions thereof. affirmed the RTC and the MTCC decisions with modification to the effect that accused was convicted only of one (1) count of Violation of Batas Pambansa Blg. Estrella sent a notice of dishonor and demand to make good the said checks to Macalalag. the Court of Appeals. Estrella filed two criminal complaints for Violation of Batas Pambansa Blg. 205.000. ISSUE: Whether petitioner`s payments over and above the value of the said checks would free her from criminal liability. Under the two Acknowledgment/Affirmation Receipts. As security for the payment of the aforesaid loans. but the latter failed to do so. the said checks were dishonored for the reason that the account against which the same was drawn was already closed.

petitioner Macalalag failed to pay the full face value of the second check issued. the same were dishonored on the ground that they were drawn against a closed account. Applying this amount to the first check (No. C-889835). A contrary interpretation would defeat the purpose of Batas Pambansa Blg. that of safeguarding the interest of the banking system and the legitimate public checking account user.000.00. Only a full payment of the face value of the second check at the time of its presentment or during the five-day grace period15 could have exonerated her from criminal liability. The Court argued that. 22. the Petition is denied. “Even if we agree with petitioner Macalalag that the interests on her loans should not be imputed to the face value of the checks she issued. Petitioner Macalalag herself declares that before the institution of the two cases against her. when Estrella presented the checks for payment. petitioner Macalalag is still liable for Violation of Batas Pambansa Blg. As stated above.16 as the drawer could very well have himself exonerated by the mere expediency of paying a minimal fraction of the face value of the check.000. Page 307 of 845 . she has made a total payment of P156. Despite notice of dishonor.00. an amount insufficient to cover her obligation with respect to the second check. 22. what will be left is P56. Hence.

1979 in the amount of P3. Still unsatisfied with the decision. 1978. if there is no stipulation to the contrary. within ten (10) days. petitioner comes to this Court seeking for the deletion of the attorney’s fees and the reduction of the penalties. October 19. with 25% thereof as attorney’s fees and P500. however. The Court of Appeals.411. Petitioner defaulted but after a few partial payments he had the loans restructured by respondent CCP. on appeal.R. In the case at bar. and since the said stipulation has the force of law between the parties and does not appear to be inequitable or unjust. ISSUE: The issue is whether or not interests and penalties may be both awarded in the case at bar. Nevertheless. and petitioner accordingly executed a promissory note on August 31. the penalty shall substitute the indemnity for damages and the payment of interests in case of non-compliance. of the latter’s restructured loan which as of April 30. Page 308 of 845 . On August 29. damages shall be paid if the obligor refuses to pay the penalty or is guilty of fraud in the fulfillment of the obligation. respectively. thru counsel. reduced the attorney’s fees to 5% of the principal amount to be collected from petitioner and deleted the exemplary damages. 1984. the promissory note expressly provides for the imposition of both interest and penalties in case of default on the part of the petitioner in the payment of the subject restructured loan. respondent. 088. Court f Appeals G.00 as exemplary damages.03. No. the said stipulation must be respected. Eventually. 1984. from receipt of the letter. 1979. 1979 and July 6. The penalty may be enforced only when it is demandable in accordance with the provisions of this Code. respondent CCP filed with the RTC of Manila a complaint for a collection of a sum of money. 206. failed to pay any of the supposed installments and again offered another mode of paying restructured loan which respondent CCP refused to consent. 000.32 payable in five (5) installments. HELD: YES. Petitioner Tan.421. 2001 367 SCRA 571 FACTS: On May 14. petitioner Antonio Tan obtained two (2) loans in the total principal amount of four (4) million pesos from respondent Cultural Center of the Philippines (CCP). Tan vs. 116285. Article 1226 of the New Civil Code provides that in obligations with a penal clause. 1984 amounted to P6. evidenced by 2 promissory notes with maturity dates on May 14. wrote petitioner demanding the full payment. petitioner was ordered to pay said amount.735. On May 30.

95 under the aforestated marine insurance policy.R.032. 1981. 81/01177 for P36. is breached. 97412 Jul 12. defendant Allied Brokerage Corporation made deliveries of the shipment to the consignees' warehouse. 1982. however. is imposed. On January 7.. INC vs. In the absence of stipulation. quasi-contracts. The latter excepted to one drum which contained spillages. and b)Whether the applicable rate of interest is twelve percent or six percent. due to the fault and negligence of defendants. The latter excepted to one drum. not constituting a loan or forbearance of money. On January 8 and 14. When a obligation. Claims were presented against defendants who failed and refused to pay the same "As a consequence of the losses sustained. the interest due shall itself earn legal interest from the time it is judicially demanded.032.. HELD: When an obligation. and it consists in the payment of a sum of money.382. 1982 defendant Allied Brokerage Corporation received the shipment from defendant Metro Port Service.)Whether the payment of legal interest on an award for loss or damage is to be computed from the time the complaint is filed or form the date the decision appealed from is rendered. Inc.. Upon arrival of the shipment in Manila on December 12. plaintiff was compelled to pay the consignee P19. Japan for delivery vessel `SS EASTERN COMET' owned by defendant Eastern Shipping Lines under Bill of Lading No. two fiber drums of riboflavin were shipped from Yokohama. 1994 FACTS: On December 4. i. 2. i. EASTERN SHIPPING INES. an interest on the amount of damages awarded may be imposed at the discretion of the court at the rate of 6% per annum.. while the rest of the contents was adulterated/fake Plaintiff contended that due to the losses/damage sustained by said drum. from judicial or extrajudicial demand under and subject to the provisions of Article 1169 23 of the Civil Code. COURT OF APPEALS G.e. When the obligation is breached. shall be adjudged on unliquidated claims or damages except Page 309 of 845 . a loan or forbearance of money. contracts.e. No interest. law.38. which damage was unknown to plaintiff. No. delicts or quasi-delicts is breached. regardless of its source. as follows: 1.e. 1981. With regard particularly to an award of interest in the concept of actual and compensatory damages. HON.466. i.95. the rate of interest shall be 12% per annum to be computed from default. the rate of interest. ISSUE: a. the contravenor can be held liable for damages. it was discharged unto the custody of defendant Metro Port Services. Furthermore. the interest due should be that which may have been stipulated in writing. one drum opened and without. YMA-8 (The shipment was insured under plaintiff's Marine Insurance Policy No. 207. so that it became subrogated to all the rights of action of said consignee against defendants. as well as the accrual thereof. Inc. the consignee suffered losses totaling P19. said to be in bad order.

the interest shall begin to run only from the date of the judgment of the court is made (at which time the quantification of damages may be deemed to have been reasonably ascertained). 3. 1169. Civil Code) but when such certainty cannot be so reasonably established at the time the demand is made. Page 310 of 845 . whether the case falls under paragraph 1 or paragraph 2.when or until the demand can be established with reasonable certainty. above. where the demand is established with reasonable certainty. shall be 12% per annum from such finality until its satisfaction. this interim period being deemed to be by then an equivalent to a forbearance of credit. the interest shall begin to run from the time the claim is made judicially or extrajudicially (Art. the rate of legal interest. When the judgment of the court awarding a sum of money becomes final and executory. Accordingly.

ISSUE: Did respondents violate the Rules of Court? RULING: By serving notices of garnishment on Citibank. Bellones and Generoso B.. N. and Benjamin Go. Sheriff Regalado should have ceased serving notices of garnishment and discontinued their implementation. Cebu City. Page 311 of 845 . “Ng Sheung Ngor. N. certified bank check or any other mode of payment acceptable to the judgment obligee. Aimee Yu and Ben Apas. This is not true in the instant case. (EPCIB) at Citibank.M. Respondents Antonio A. Plaintiffs.’ Ken Appliance Division. of the RTC of Cebu City. EPCIB cannot immediately pay by way of Manager’s Check so it exercised its option to choose and offered its real properties. Branch 16. it exercised its option because it cannot immediately pay the full amount stated in the writ of execution and all lawful fees in cash. Sheriff Regalado was adamant in his posture even if real properties have been offered which were sufficient to satisfy the judgment debt. P-05-1973. Inc. Defendants” for Annulment and/or Reformation of Documents and Contracts. PCI vs Ng Shueng Ngor A. CEB-26983 before the Regional Trial Court (RTC). Bellones and Generoso B. respectively. allegedly in violation of Section 9(b) of Rule 39 of the Rules of Court. a complaint for grave abuse of authority was filed by Atty. HSBC and PNB. vs. March 18. Regalado are the sheriffs in Branches 9 and 16. entitled. Inc. Regalado. With the exercise of the option. Yusi against Sheriffs Antonio A. In the case at bar..A. Sheriff Regalado violated EPCIB’s right to choose which property may be levied upon to be sold at auction for the satisfaction of the judgment debt. 208. doing business under the name and style ‘Ken Marketing. it is clear that when EPCIB offered its real properties. and Hongkong and Shanghai Bank Corporation (HSBC).A. Equitable PCI Bank. There was an offer of other real property by petitioner. No. Paulino L. 2005 FACTS: Complainant EPCIB is the defendant in Civil Case No. Thus. For garnishing accounts maintained by Equitable PCI Bank.

and authorizing petitioner- spouses to secure the loan and to sign any and all documents which may be required by Respondent PNB. 1989. Subsequently. PHILIPPINE NATIONAL BANK G. No. 1989 relating to the ‘revolving credit line’ of P7.3M for additional operating and working capital to mobilize its various construction projects. Page 312 of 845 . On August 31. Moreover Petitioner NSBCI executed three promissory notes. using or mortgaging the real estate properties registered in the name of its President and Chairman of the Board Petitioner Eduardo R.0M. under such terms agreed by the Bank and the NSBCI. Later on.7 Million x x x and the Credit Agreement dated September 5. (NSBCI) V. who signed as accommodation- mortgagors since all the collaterals were owned by them and registered in their names. 05. was informed by [Petitioner] Eduardo Dee of his intention to remit to Respondent PNB post- dated checks covering interests. Dee as collateral. Petitioner Eduardo R. In addition. Dee on behalf of Petitioner NSBCI sent a letter to the Branch Manager of the PNB Dagupan Branch requesting for a 90-day extension for the payment of interests and restructuring of its loan for another term. Board Resolution No. Resolution No. 1991. 148753 2004 Jul 30 FACTS: On February 11.000. petitioner corporation also signed the Credit Agreement dated August 31. Petitioner NSBCI failed to comply with its obligations under the promissory notes.00. 77 was approved by granting the request of Respondent PNB thru its Board NSBCI for an P8 Million loan broken down into a revolving credit line of P7. 1989. penalties and part of the loan principals of his due account. 209. Series of 1989 was approved by Petitioner NSBCI authorizing the company to x x x apply for or secure a commercial loan with the PNB in an aggregate amount of P8.000. Mr. NSBCI tendered payment to Respondent PNB of three (3) checks aggregating P1. On June 18. Rolly Cruzabra.7M and an unadvised line of P0. NEW SAMPAGUITA BUILDERS CONSTRUCTION. and c) a residential lot and improvements thereon located at Mangaldan. and that petitioner-spouses shall act as sureties or co-obligors who shall be jointly and severally liable with Petitioner NSBCI for the payment of any [and all] obligations. b) six (6) parcels of residential land situated at San Fabian. The loan of Petitioner NSBCI was secured by a first mortgage on the following: a) three (3) parcels of residential land located at Mangaldan. In a meeting held on August 12. INC. The loan was further secured by the joint and several signatures of Petitioners Eduardo Dee and Arcelita Marquez Dee. Pangasinan. petitioner-spouses executed a ‘Joint and Solidary Agreement’ (JSA) in favor of Respondent PNB ‘unconditionally and irrevocably binding themselves to be jointly and severally liable with the borrower for the payment of all sums due and payable to the Bank under the Credit Document. 1989 to support the ‘unadvised line’ of P300. 1991. Pangasinan. Respondent PNB’s representative.R.000.00. 1989. On August 15.

678.476. E. and P53. provided the total payment should be P4.056. On September 6.43 and thus demanded from the latter the deficiency of P2.67 in favor of Respondent PNB Upon presentment.33 as principal.476. 1991.058. 03500087 and 03500088 dated September 29 and October 29. 1992 were not sufficient to cover its total claim amounting to P12. Petitioners failed to redeem their properties within the one-year redemption period and so Respondent PNB executed a Deed of Absolute Sale consolidating title to the properties in its name.00. Petitioners refused to pay the above deficiency claim which compelled Respondent PNB to institute the instant Complaint for the collection of its deficiency claim. On April 6.111.334.93 for insurance[. 1991. Respondent PNB informed Petitioner NSBCI that the proceeds of the sale conducted on February 26.03 as interests and penalties. Page 313 of 845 . P3. the PNB Dagupan Branch sent demand letters to Petitioner NSBCI at its office address at 1611 ERDC Building.968.019. informing him that Petitioner NSBCI’s proposal was acceptable. Avenue.000. Petitioner Eduardo Dee wrote the PNB Branch Manager reiterating his proposals for the settlement of Petitioner NSBCI’s past due loan account amounting to P7. said PNB branch ‘shall recall its recommendation to the Head Office for the restructuring of the loan account and refer the matter to its legal counsel for legal action.172.128. with Respondent PNB being declared the highest bidder for the amount of P10.29 that would cover the amount of P1. 1992. Quezon City.306.33. Petitioners nevertheless failed to pay their loan obligations within the time frame given them and as a result. Respondent PNB filed with the Provincial Sheriff of Pangasinan at Lingayen a Petition for Sale The sheriff foreclosed the real estate mortgage and sold at public auction the mortgaged properties of petitioner-spouses. On August 22. On November 12. Petitioners did not heed respondent’s warning and as a result.231. Carcamo wrote Petitioner Eduardo Dee informing him that unless the dishonored checks were made good. the PNB Dagupan Branch Manager sent a letter to petitioners at their address informing them that the properties securing their loan account had been sold at public auction. Respondent bank’s Crispin Carcamo wrote Petitioner Eduardo Dee. Copies of the Sheriff’s Certificate of Sale were sent by registered mail to petitioner corporation’s address petitioner-spouses’ address.231. x x x check nos. 1991.019. Petitioner Eduardo Dee later tendered four (4) post-dated Interbank checks aggregating P1. 1991.] with the issuance of post-dated checks to be dated not later than November 29. PNB’s Mr. that the Sheriff’s Certificate of Sale had been registered with the Registry of Deeds of Pangasinan and that a period of one (1) year therefrom was granted to them within which to redeem their properties.43 plus interest and other charges until the amount was fully paid. asking it to settle its past due loan account. 1991 were dishonored by the drawee bank and returned due to a ‘stop payment’ order from petitioners. Rodriguez Sr.506. however.

However. Although escalation clauses are valid in maintaining fiscal stability and retaining the value of money on long-term contracts. because such impositions are not based on the parties’ essential equality.ISSUE: Whether or not the escalation clause is valid and whether or not it is violative of the principle of mutuality of contracts. Besides.’” Page 314 of 845 . a uniform clause therein permitted respondent to increase the rate “within the limits allowed by law at any time depending on whatever policy it may adopt in the future x x x. the Promissory Notes specified the interest rate to be charged: 19. RULING: In each drawdown. It would be the zenith of farcicality to specify and agree upon rates that could be subsequently upgraded at whim by only one party to the agreement.5 percent in the first.” without even giving prior notice to petitioners. the pro forma promissory notes have the character of a contract d’adhésion. The clause cited earlier made the fulfillment of the contracts “dependent exclusively upon the uncontrolled will” of respondent and was therefore void.” One-sided impositions do not have the force of law between the parties. the weaker party’s the debtor’s participation being reduced to the alternative ‘to take it or leave it.5 percent in the second and again in the third. giving respondent an unbridled right to adjust the interest independently and upwardly would completely take away from petitioners the “right to assent to an important modification in their agreement” and would also negate the element of mutuality in their contracts. “where the parties do not bargain on equal footing. and 21. The “unilateral determination and imposition” of increased rates is “violative of the principle of mutuality of contracts ordained in Article 1308 of the Civil Code. The Court holds that petitioners’ accessory duty to pay interest did not give respondent unrestrained freedom to charge any rate other than that which was agreed upon. unless expressly stipulated in writing. No interest shall be due.

Nevertheless. in the application form submitted by petitioner. among which is for the cardholder to pay all charges made through the use of said card within the period indicated in the statement of account and any remaining unpaid balance to earn 3% interest per annum plus prime rate of Security Bank & Trust Company. Petitioner Rodelo G. Page 315 of 845 . but does not provide for a downward adjustment of the same in violation of Central Bank Circular 905. extends credit accomodations to its cardholders for the purchase of goods and other services from member establishments. it cannot be said to be dependent solely on the will of private respondent as it is also dependent on the prevailing market rates. However. a credit card company. Ofricano Canlas obligated himself to pay jointly and severally with petitioner the latter’s obligation to private respondent. private respondent filed a Complaint for Collection of Sum of Money against petitioner before the lower court. 119379 September 25. Notably. petitioner was issued Diners Club card No. applied for membership and credit accmodations with Diners Club in October 1985. 1987. while the other party merely affixes his signature or his “adhesion” thereto. 210. Upon acceptance of his application. petitioner incurred credit charges plus appropriate interest and service charges in the aggregate amount of P33. the reason being that the party who adheres to the contract is free to reject it entirely. Demands for payment made against petitioner proved futile. these types of contracts have been declared as binding as ordinary contracts. 1998 FACTS: Private respondent Security Diners International Corporation (Diners Club). Said goods and services are reimbursed later on by cardholders upon proper billing. In this case. The application form contained terms and conditions governing the use and availment of the Diners Club card. Sr. Polotan. the second paragraph of the questioned proviso which provides that “the Cardholder hereby authorizes Security Diners to correspondingly increase the rate of such interest in the event of changes in prevailing market rates x x x” is an escalation clause. 3651- 212766-3005. Admittedly.819. giving no room for negotiation and depriving the latter of the opportunity to bargain on equal footing. One party prepares the stipulation in the contract. POLOTAN VS CA GR No. claims that the subject contract is one-sided in that the contract allows for the escalation of interests.84 which had become due and demandable. ISSUE: Is petitioner liable for payment of credit charges plus interest and service charges? RULING: A contract of adhesion is one in which one of the contracting parties imposes a ready- made form of contract which the other party may accept or reject. Hence. As of May 8. petitioner. in effect. but cannot modify.

Obviously. Page 316 of 845 . the fluctuation in the market rates is beyond the control of private respondent. Escalation clauses are not basically wrong or legally objectionable as long as they are not solely potestative but based on reasonable and valid grounds.

000. (NSBCI) V. Dee on behalf of Petitioner NSBCI sent a letter to the Branch Manager of the PNB Dagupan Branch requesting for a 90-day extension for the payment of interests and restructuring of its loan for another term. Later on. 211. Mr. petitioner-spouses executed a ‘Joint and Solidary Agreement’ (JSA) in favor of Respondent PNB ‘unconditionally and irrevocably binding themselves to be jointly and severally liable with the borrower for the payment of all sums due and payable to the Bank under the Credit Document. was informed by [Petitioner] Eduardo Dee of his intention to remit to Respondent PNB post- dated checks covering interests. 1989. Dee as collateral. On August 15. Petitioner Eduardo R. The loan of Petitioner NSBCI was secured by a first mortgage on the following: a) three (3) parcels of residential land located at Mangaldan. Petitioner NSBCI failed to comply with its obligations under the promissory notes.7 Million x x x and the Credit Agreement dated September 5. 1989 relating to the ‘revolving credit line’ of P7. 1989. Subsequently. No.0M.00. 1989 to support the ‘unadvised line’ of P300. and authorizing petitioner- spouses to secure the loan and to sign any and all documents which may be required by Respondent PNB.00. NSBCI tendered payment to Respondent PNB of three (3) checks aggregating P1. Respondent PNB’s representative. In addition. and c) a residential lot and improvements thereon located at Mangaldan. Moreover Petitioner NSBCI executed three promissory notes. 05. petitioner corporation also signed the Credit Agreement dated August 31. 77 was approved by granting the request of Respondent PNB thru its Board NSBCI for an P8 Million loan broken down into a revolving credit line of P7. INC. Resolution No. Page 317 of 845 . 1991. Series of 1989 was approved by Petitioner NSBCI authorizing the company to x x x apply for or secure a commercial loan with the PNB in an aggregate amount of P8.000. and that petitioner-spouses shall act as sureties or co-obligors who shall be jointly and severally liable with Petitioner NSBCI for the payment of any [and all] obligations. Board Resolution No. The loan was further secured by the joint and several signatures of Petitioners Eduardo Dee and Arcelita Marquez Dee. penalties and part of the loan principals of his due account.000. 148753 2004 Jul 30 FACTS: On February 11. Rolly Cruzabra. Pangasinan. On June 18.R. Pangasinan. using or mortgaging the real estate properties registered in the name of its President and Chairman of the Board Petitioner Eduardo R. 1989. PHILIPPINE NATIONAL BANK G. 1991. NEW SAMPAGUITA BUILDERS CONSTRUCTION. who signed as accommodation- mortgagors since all the collaterals were owned by them and registered in their names.7M and an unadvised line of P0.3M for additional operating and working capital to mobilize its various construction projects. under such terms agreed by the Bank and the NSBCI. On August 31. In a meeting held on August 12. b) six (6) parcels of residential land situated at San Fabian.

1991. Avenue.33.306.000.678. informing him that Petitioner NSBCI’s proposal was acceptable. On November 12. Carcamo wrote Petitioner Eduardo Dee informing him that unless the dishonored checks were made good.03 as interests and penalties.476.019.968. x x x check nos. said PNB branch ‘shall recall its recommendation to the Head Office for the restructuring of the loan account and refer the matter to its legal counsel for legal action. Petitioners failed to redeem their properties within the one-year redemption period and so Respondent PNB executed a Deed of Absolute Sale consolidating title to the properties in its name. 1992. Page 318 of 845 . 1992 were not sufficient to cover its total claim amounting to P12. Rodriguez Sr.43 plus interest and other charges until the amount was fully paid. On August 22. Petitioners refused to pay the above deficiency claim which compelled Respondent PNB to institute the instant Complaint for the collection of its deficiency claim.056.111. Respondent PNB informed Petitioner NSBCI that the proceeds of the sale conducted on February 26.231. that the Sheriff’s Certificate of Sale had been registered with the Registry of Deeds of Pangasinan and that a period of one (1) year therefrom was granted to them within which to redeem their properties. Quezon City. Petitioner Eduardo Dee later tendered four (4) post-dated Interbank checks aggregating P1.506.93 for insurance[. P3. On September 6. E.334.231.019.67 in favor of Respondent PNB Upon presentment. and P53. 03500087 and 03500088 dated September 29 and October 29. Petitioners nevertheless failed to pay their loan obligations within the time frame given them and as a result.00.128. On April 6.43 and thus demanded from the latter the deficiency of P2.058. 1991. 1991. PNB’s Mr. the PNB Dagupan Branch sent demand letters to Petitioner NSBCI at its office address at 1611 ERDC Building. Petitioner Eduardo Dee wrote the PNB Branch Manager reiterating his proposals for the settlement of Petitioner NSBCI’s past due loan account amounting to P7. 1991 were dishonored by the drawee bank and returned due to a ‘stop payment’ order from petitioners. 1991. however.172.476.29 that would cover the amount of P1. Copies of the Sheriff’s Certificate of Sale were sent by registered mail to petitioner corporation’s address petitioner-spouses’ address. Respondent PNB filed with the Provincial Sheriff of Pangasinan at Lingayen a Petition for Sale The sheriff foreclosed the real estate mortgage and sold at public auction the mortgaged properties of petitioner-spouses. asking it to settle its past due loan account.33 as principal. Petitioners did not heed respondent’s warning and as a result. the PNB Dagupan Branch Manager sent a letter to petitioners at their address informing them that the properties securing their loan account had been sold at public auction.] with the issuance of post-dated checks to be dated not later than November 29. provided the total payment should be P4. with Respondent PNB being declared the highest bidder for the amount of P10. Respondent bank’s Crispin Carcamo wrote Petitioner Eduardo Dee.

unless expressly stipulated in writing.” without even giving prior notice to petitioners.5 percent in the second and again in the third. RULING: In each drawdown.’” Page 319 of 845 . No interest shall be due. because such impositions are not based on the parties’ essential equality. Although escalation clauses are valid in maintaining fiscal stability and retaining the value of money on long-term contracts. the pro forma promissory notes have the character of a contract d’adhésion. “where the parties do not bargain on equal footing. It would be the zenith of farcicality to specify and agree upon rates that could be subsequently upgraded at whim by only one party to the agreement. The clause cited earlier made the fulfillment of the contracts “dependent exclusively upon the uncontrolled will” of respondent and was therefore void. a uniform clause therein permitted respondent to increase the rate “within the limits allowed by law at any time depending on whatever policy it may adopt in the future x x x.ISSUE: Whether or not the escalation clause is valid and whether or not it is violative of the principle of mutuality of contracts. giving respondent an unbridled right to adjust the interest independently and upwardly would completely take away from petitioners the “right to assent to an important modification in their agreement” and would also negate the element of mutuality in their contracts. and 21.5 percent in the first. The Court holds that petitioners’ accessory duty to pay interest did not give respondent unrestrained freedom to charge any rate other than that which was agreed upon. Besides. The “unilateral determination and imposition” of increased rates is “violative of the principle of mutuality of contracts ordained in Article 1308 of the Civil Code. the weaker party’s the debtor’s participation being reduced to the alternative ‘to take it or leave it. the Promissory Notes specified the interest rate to be charged: 19.” One-sided impositions do not have the force of law between the parties. However.

Respondents filed a motion for reconsideration. that since the Labor Arbiter awarded separation pay ofP62.320. praying that his backwages be computed from the date of his dismissal on January 24. ISSUE: Whether or not a re-computation in the course of execution of the labor arbiter's original computation of the awards made is legally proper. 1997 up to the finality of the Resolution of the Supreme Court on May 27. LA denied the motion but the decision was reversed by the NLRC on appeal. the Labor Arbiter rendered a Decisionin favor of petitioner and found that he was dismissed from employment without a valid or just cause. Respondents appealed to the NLRC. Respondents filed a Motion to Quash Writ of Execution. 212.computation of backwages Page 320 of 845 . Petitioner appealed to the CA but was denied. the Computation and Examination Unit of the NLRC arrived at an updated amount in the sum ofP471.933. 2002. Dissatisfied. Consequently. the same cannot be altered or amended anymore. among other things. No.92. Gallery Frames G. 2002.986. Upon recomputation. 1998 Decision of the Labor Arbiter. except to correct clerical errors or mistakes.R. They claimed that after the decision becomes final and executory. Thus. the NLRC sustained the decision of the Labor Arbiter. thereafter.31. a belated correction thereof is no longer allowed. Nacar v. HELD: Yes. The case was. 2002. no more recomputation is required to be made of the said awards. 2013 FACTS: On October 15. Thus. 189871 : August 13. Accordingly. Finding no reversible error on the part of the CA. it can no longer be modified in any respect. stating that since petitioner no longer appealed the October 15. petitioner was awarded backwages and separation pay in lieu of reinstatement in the amount ofP158.919. An Entry of Judgment was later issued certifying that the resolution became final and executory on May 27. Respondents then sought relief before the Supreme Court. arguing. which already became final and executory. Petitioner filed a Motion for Correct Computation.36. Labor Law. referred back to the Labor Arbiter for execution.56 and limited backwages ofP95. 1998. petitioner filed this petition for review on certiorari. The CA stated that there is nothing left to be done except to enforce the said judgment. but it was denied. but it was dismissed for lack of merit. respondents filed a Petition for Review on Certiorari before the CA but it was likewise denied. this Court denied the petition in the Resolution dated April 17.

the implementing labor arbiter ordered the award re-computed. backwages. he apparently read the figures originally ordered to be paid to be the computation due had the case been terminated and implemented at the labor arbiter's level. the labor arbiter's approved computation went beyond the finality of the CA decision (July 29. in turn. the petitioner disagreed with the labor arbiter's findings on all counts . Unfortunately. The decision consists essentially of two parts. Focusing on the core illegal dismissal portion of the original labor arbiter's decision. It was at this point that the present case arose. the first part contains the finding of illegality and its monetary Page 321 of 845 . the NLRC decision is final.e. However.specifically. By law. and legal interests. the petitioner appealed the case to the NLRC which. The first is that part of the decision that cannot now be disputed because it has been confirmed with finality. affirmed the labor arbiter's decision. the CA issued the decision now questioned in the present petition. The second part is the computation of the awards made. 2003) and included as well the payment for awards the final CA decision had deleted . This is the finding of the illegality of the dismissal and the awards of separation pay in lieu of reinstatement. the labor arbiter re-computed the award to include the separation pay and the backwages due up to the finality of the CA decision that fully terminated the case on the merits. It was at this point that the present case arose. and no question would have arisen had the parties terminated the case and implemented the decision at that point. attorney's fees. he apparently read the figures originally ordered to be paid to be the computation due had the case been terminated and implemented at the labor arbiter's level.i. finding that NLRC exceeded its authority in affirming the payment of 13th month pay and indemnity. The CA decision. on the finding of illegality as well as on all the consequent awards made. As we noted above. We see no error in the CA decision confirming that a re-computation is necessary as it essentially considered the labor arbiter's original decision in accordance with its basic component parts as we discussed above. Clearly implied from this original computation is its currency up to the finality of the labor arbiter's decision. lapsed to finality and was subsequently returned to the labor arbiter of origin for execution.A source of misunderstanding in implementing the final decision in this case proceeds from the way the original labor arbiter framed his decision. Thus. Hence. this implication is apparent from the terms of the computation itself. the proportionate 13th month pay and the indemnity awards. Focusing on the core illegal dismissal portion of the original labor arbiter's decision. Hence.. To reiterate. reviewable only by the CA on jurisdictional grounds. The petitioner appropriately sought to nullify the NLRC decision on jurisdictional grounds through a timely filed Rule 65 petition for certiorari. the implementing labor arbiter ordered the award re- computed.

That the amount respondents shall now pay has greatly increased is a consequence that it cannot avoid as it is the risk that it ran when it continued to seek recourses against the Labor Arbiter's decision. Page 322 of 845 . computed as of the time of the labor arbiter's original decision. the reliefs continue to add up until full satisfaction. as expressed under Article 279 of the Labor Code. and this is not a violation of the principle of immutability of final judgments. only the computation of monetary consequences of this dismissal is affected.consequences. The illegal dismissal ruling stands. the second part is the computation of the awards or monetary consequences of the illegal dismissal. By the nature of an illegal dismissal case. The recomputation of the consequences of illegal dismissal upon execution of the decision does not constitute an alteration or amendment of the final decision being implemented.

Article 2210 of the Civil Code expressly provides that “[i]nterest may.5M by the Spouses.” In this case. Estores promised to return the same within 120 days5 Spouses agreed but imposed an interest of 12% annually. Spouses demanded the return of the amount within 15 days from receipt . After almost 7 years and despite the payment of P3. Estores v. Thus. 1993. That since the Conditional Deed of Sale provided only for the return of the down payment in case of breach. Estores still failed to comply with her obligation to handle the peaceful transfer of ownership as stated in 5 provisions in the contract. despite demand. they cant be liable for legal interest as well RTC ruled saying that the Spouses are entitled to the interest but only at 6% per annum and also entitled to atty’s fees On appeal. and Spouses offered to buy a parcel of land in Cavite forP4. Hermojina Estores and Spouses Supangan entered into a Conditional Deed of Sale where Estores offered to sell. In a letter in 2000. Interest may be imposed even in the absence of stipulation in the contract. in the discretion of the court. ISSUE: Whether it is proper to impose interest for an obligation that does not involve a loan or forbearance of money in the absence of stipulation of the parties. Hence this appeal. CA said that the issue to resolve whether it is proper to impose interest for an obligation that does not involve a loan or forbearance of money in the absence of stipulation of the parties CA affirmed RTC. Petitioner enjoyed the use of the money from the time it was given to her until now. be allowed upon damages awarded for breach of contract. Supangan April 18 2012 FACTS: On Oct. Page 323 of 845 . Sps. Estores said they were willing to pay the principal amount but without the interest as it was not agreed upon. there is no question that petitioner is legally obligated to return the P3.5 million because of her failure to fulfill the obligation under the Conditional Deed of Sale.In reply. Estores still failed despite demands Thereafter. she is already in default of her obligation from the date of demand. 213.7M. Spouses filed a complaint with the RTC against Estores and Roberto Arias (allegedly acted as Estores’ agent) In Answer. HELD: YES.

“forbearance of money. should be the same rate of legal interest applicable to a loan since the use or deprivation of funds is similar to a loan. And the compensation for the use of their money. that the phrase “forbearance of money. Forbearance of money. absent any stipulation. Page 324 of 845 . In such case. from requiring the borrower or debtor to repay a loan or debt then due and payable. the respondent-spouses parted with their money even before the conditions were fulfilled. they are entitled not only to the return of the principal amount paid. goods or credits” is meant to have a separate meaning from a loan.Forbearance is defined as a “contractual obligation of lender or creditor to refrain during a given period of time. but also to compensation for the use of their money. They were deprived of the use of their money for the period pending fulfillment of the conditions and when those conditions were breached.” This definition describes a loan where a debtor is given a period within which to pay a loan or debt. otherwise there would have been no need to add that phrase as a loan is already sufficiently defined in the Civil Code. goods or credits pending happening of certain events or fulfillment of certain conditions. goods or credits” will have no distinct definition from a loan. They have therefore allowed or granted forbearance to the seller (petitioner) to use their money pending fulfillment of the conditions. In this case. goods or credits should therefore refer to arrangements other than loan agreements. We believe however. where a person acquiesces to the temporary use of his money.

.427.? DECISION: The correction on the name of the defendant has rendered moot any further discussion on the doctrine of piercing the veil of corporate fiction.43 was proven by checks credited to the account of Guess? Footwear and the P963.516. respondent has abandoned Page 325 of 845 . From May 1997 to January 1999. The letter dated 31 May 1999 was worded as follows: BPI filed a collection suit before the RTC of Makati City naming as defendant B & R Sportswear Distributor. petitioner Benny Hung transferred Nine Hundred Sixty-Three Thousand Six Hundred Four Pesos and 03/100 (P963. In any event. is not a corporation. He signed the second agreement as president of Guess? Footwear which he also referred to as B & R Sportswear Enterprises. through three hundred fifty-two (352) checks. we have said that whether the separate personality of a corporation should be pierced hinges on facts pleaded and proved. whereby Guess? Footwear agreed to honor validly issued BPI Express Credit Cards presented by cardholders in the purchase of its goods and services. 2010 FACTS: Guess? Footwear and BPI Express Card Corporation entered into two merchant agreements. It ruled that since B & R Sportswear Distributor. Three Million Four Hundred Eighty Thousand Four Hundred Twenty-Seven Pesos and 23/100 (P3. Inc. 182398 July 20. The RTC ruled that the overpayment of P3.604.427. When informed of the overpayments.68 with 6% interest from 4 October 1999. the RTC rendered a decision ordering defendant B & R Sportswear Distributor. In the first agreement.23) to the account of Guess? Footwear. BENNY Y. Inc.604. bad faith and illegal scheme/maneuver.03) from the bank account of B & R Sportswear Enterprises to BPIs account as partial payment.68 The Court of Appeals affirmed the order and dismissed petitioners appeal. No.826.826. it therefore has no personality separate from petitioner Benny Hung who induced the respondent BPI and the RTC to believe that it is a corporation Hence this appeal. petitioner Benny Hung signed as owner and manager of Guess? Footwear. ISSUE: Whether petitioner can be held liable for the satisfaction of the RTCs Decision against B & R Sportswear Distributor. Inc.R. HUNG VS BPI CARD G. dated 25 August 1994 and 16 November 1994. On 24 June 2002. Inc.480. respondent complained of deceit. In seeking to pierce the corporate veil of B & R Footwear Distributors. As stated earlier.480.03 partial payment proved that defendant ought to pay P2.516. to pay the plaintiff (BPI) P2. Inc. 214 . respondent BPI mistakenly credited..

respondent did not rely on this ground in filing the motion to pierce the corporate veil of B & R Footwear Distributors. And respondents proof the SEC certification that B & R Sportswear Distributor. Inc. the real defendant has even corrected respondents error. or Guess? Footwear as B & R Sportswear Enterprises. Inc. bad faith and illegal scheme/maneuver. Page 326 of 845 . we find more notable respondents own silence on the error it committed. Inc. Contrary to the allegation. On petitioners alleged intention to mislead for his initial silence on the non-existence of the named defendant.such accusation. Hence. While the evidence showed that petitioner has treated B & R Footwear Distributors. is not an existing corporation would surely attest to no other fact but the inexistence of a corporation named B & R Sportswear Distributor. we cannot agree with the Court of Appeals that petitioner has represented a non-existing corporation and induced the respondent and the RTC to believe in his representation. Respondents main contention therein was petitioners alleged act to represent a non-existent corporation amounting to deceit. as such name only surfaced because of its own error. Inc.

FEBTC and FEBIBI disclaimed any responsibility for the denial of the claim. FEBIBI. dated 19 October 1994.265. On 24 and 26 October 1994. Issue: Whether FEBTC. (Maxilite) is a domestic corporation engaged in the importation and trading of equipment for energy-efficiency systems. Absent any showing of its illegitimate or illegal functions. and 6 March 1995. Accordingly. Finding that Maxilite failed to pay the insurance premium in the sum of P8. January 10. On 9 March 1995. Makati Insurance Company denied the fire loss claim on the ground of non-payment of premium. a fire gutted the Aboitiz Sea Transport Building along M. 24 January 1995. Far East Bank G. even if FEBIBI and Makati Insurance Company are subsidiaries of FEBTC. Page 327 of 845 . On 17 June 1993. to debit Maxilite’s account. and the liability of the parent corporation as well as the subsidiary shall be confined to those arising in their respective business. FEBIBI and Makati Insurance Company are jointly and severally liable to pay respondents the full coverage of the subject insurance policy? Held: Contrary to Maxilite’s and Marques’ view. a subsidiary’s separate existence shall be respected. Inc. Cuenco Avenue. where Maxilite’s office and warehouse were located. and Makati Insurance Company are independent and separate juridical entities. the records are bereft of any evidence warranting the piercing of corporate veil in order to treat FEBTC.765. which Maxilite claimed against the fire insurance policy with Makati Insurance Company. (FEBTC) is a local bank which handled the financing and related requirements of Marques and Maxilite. Maxilite fully settled its trust receipt account.1 million. Marques (Marques) is the President and controlling stockholder of Maxilite. with the merchandise serving as collateral. The foregoing importation was covered by a trust receipt document signed by Marques on behalf of Maxilite. for the shipment of various high-technology equipments from the United States. Suffice it to state that FEBTC. Jose N. FEBTC financed Maxilite’s capital and operational requirements through loans secured with properties of Marques under the latter’s name. 215. Far East Bank Insurance Brokers. No. Besides.60 for Insurance Policy No. (FEBIBI) is a local insurance brokerage corporation while Makati Insurance Company is a local insurance company. 171379. 1024439 covering the period 24 June 1994 to 24 June 1995. 2011 Facts: Maxilite Technologies. Far East Bank and Trust Co. FEBTC is solely liable for the payment of the face value of the insurance policy and the monetary awards stated in the Court of Appeals’ decision. As a result. Inc. upon the advice of FEBTC. FEBIBI.R. Cebu City. Marques and Maxilite maintained accounts with FEBTC. FEBIBI sent written reminders to FEBTC. Marques vs.00. Maxilite suffered losses amounting to at least P2. in the sum of US$80. facilitated the procurement and processing from Makati Insurance Company of four separate and independent fire insurance policies over the trust receipted merchandise.J. Both companies are subsidiaries of FEBTC. Sometime in August 1993. Maxilite and Marques entered into a trust receipt transaction with FEBTC.

Likewise. there is no evidence showing FEBIBI’s and Makati Insurance Company’s negligence as regards the non-payment of the insurance premium. Page 328 of 845 .FEBIBI. and Makati Insurance Company as a single entity.

000 and to update due or accrued interests on the promissory notes so that Atty. since as far as the former was concerned. Evangeline’s mother. Alfredo initiated an action for recovery of sum of money with damages against Land Bank in Civil Case No. told Alfredo and his counsel Atty. The RTC held that that under the principle of equity and justice. Edna Hingco. as Alfredo’s payment was not returned by Land Bank. 2010 FACTS: Spouses Johnson and Evangeline Sy secured a loan from Land Bank Legazpi City in the amount of PhP 16 million. LBP vs.3 Atty. five (5) cargo trucks. Alfredo issued a check for PhP 750. 216. Evangeline’s father. 1996 contained an acceleration clause wherein any default in payment of amortizations or other charges would accelerate the maturity of the loan. Land Bank contends that Art. in the context of the second part of said paragraph. the bank should return the amount Alfredo had paid with interest at 12% per annum computed from the filing of the complaint. 1236 of the Civil Code should apply in the instant case. The Notice of Loan Approval dated February 22. T-1941. the Spouses Sy found they could no longer pay their loan.000 and personally gave it to Atty. They sold three (3) of their mortgaged parcels of land for PhP 150. A receipt was issued for his payment. The loan was secured by three (3) residential lots. Alfredo was not making payment to fulfill the Page 329 of 845 . 1997. On December 12. Atty. Two weeks later. ONG G. 1997. RULING: We agree with Land Bank on this point as to the first part of paragraph 1 of Art. Art. They were also told that Alfredo should pay part of the principal which was computed at PhP 750. ISSUE: WON the Art. and a warehouse. Hingco.R. The RTC further held that Alfredo was entitled to attorney’s fees and litigation expenses for being compelled to litigate. 1236 . while the balance of PhP 10 million would be payable in seven (7) years.000 to Angelina Gloria Ong. Ireneo de Lumen that there was nothing wrong with the agreement with the Spouses Sy but provided them with requirements for the assumption of mortgage.The CA affirmed the RTC Decision. PhP 6 million of the loan would be short-term and would mature on February 28. such as financial statements for 1994 and 1995. Hingco could easily approve the assumption of mortgage. later went to Land Bank to inform it about the sale and assumption of mortgage. However. the Legazpi City Land Bank Branch Head. 190755. however. Land Bank was not bound to accept Alfredo’s payment. November 24. Under the loan agreement. petitioner Alfredo Ong. 1236. under a Deed of Sale with Assumption of Mortgage. He also submitted the other documents required by Land Bank. No. he did not have an interest in the payment of the loan of the Spouses Sy.Subsequently. Hingco then informed Alfredo that the certificate of title of the Spouses Sy would be transferred in his name but this never materialized. 1236 of the Civil Code backs their claim that Alfredo should have sought recourse against the Spouses Sy instead of Land Bank. No notice of transfer was sent to him.

since his interest hinged on Land Bank’s approval of his application. Page 330 of 845 . thus. he cannot demand from the debtors. He was informed that the certificate of title would be transferred accordingly. as a third person.obligation of the Spouses Sy. It is clear from the records that Land Bank required Alfredo to make payment before his assumption of mortgage would be approved. did not. what he has paid. Alfredo made a conditional payment so that the properties subject of the Deed of Sale with Assumption of Mortgage would be titled in his name. which was denied. made payment not as a debtor but as a prospective mortgagor. the Spouses Sy. He. Alfredo. therefore. recourse is not against the latter. And as Alfredo was not paying for another. 1236 does not apply. have an interest in the fulfilment of the obligation of the Spouses Sy. As Alfredo made the payment for his own interest and not on behalf of the Spouses Sy. The circumstances of the instant case show that the second paragraph of Art.

Court of Appeals (2003). No. In 1989. The Court has also ruled affirmed in a plethora of cases that stipulated interest rates of 3% per month and higher are excessive. Respondent tried to extrajudicially foreclose the mortgage. HELD: No.00. Petitioner Florentino Mallari obtained a loan from respondent Prudential Bank in the amount of P300. It was subject to an interest rate of 21% per annum and. the total debt was P571. This was secured by Real Estate Mortgage (REM). 197861. Family Foods (2009) and Ruiz vs. Page 331 of 845 . SPS. The RTC ruled in favor of respondent bank. a penalty of 12% per annum of the total amount due and attorneys fees equivalent of 15% of the total amount due. in case of default.R. Petitioners on the other hand tried to nullify the mortgage claiming that the Bank imposed onerous terms and conditions and that the bank was unilaterally increasing its charges and interest over and above those stipulated. When computed in 1992. the 23% per annum interest rate imposed on petitioners’ loan in this case can by no means be considered excessive or unconscionable. The Bank claimed that the basis for its computation was all written in the Promissory Notes. 217. unconscionable and exorbitant.7 million. PRUDENTIAL BANK [G. MALLARI vs.294. thus.000. stipulating interest of 23% per annum with the same penalties in case of default.991. June 5. This was secured by a Deed of Assignment (DOA) over petitioner's time deposit account. 697 SCRA 555] FACTS: In 1984. Petitioners defaulted. And neither is the 12% per annum penalty charge unconscionable as the counrt found in DBP vs.54 and P2.218. CA affirmed.82 for the first and second loans respectively. Spouses Florentino and Aurea Mallari obtained another loan from respondent for P1. 2013. ISSUE: Whether or not an interest rate of 23% per annum and 12% per annum penalty is unconscionable.

The loan amount was sourced from individual funders on the basis of a direct- match facility for which a series of promissory notes were issued by the petitioner for the payment of the loan. 1998 was P27. In exercising this vested power to determine what is iniquitous and unconscionable. 2012 FACTS: The respondent is a domestic corporation engaged in the business of lending and financing. The respondent.5% per annum and not the varying interest rates imposed by the respondent which reached as high as 40% per annum. In case of default. 1999.167. The petitioner failed to satisfy the said promissory notes as they fell due and the loan had to be assumed in full by the respondent which thereby stepped into the shoes of the individual funders. filed the herein complaint for collection of sum of money against the petitioner. ISSUE: WON modified interest rates and penalty charges decreed by the CA are still exorbitant and that the CA failed to appreciate the partial payments already made HELD: We affirm the interest rate decreed by the CA. the Court must consider the circumstances of each case. The stipulated interest on the consolidated promissory note was 32% per annum. The respondent declined the request and on October 5.668.98 for a term of fourteen (14) days and maturing on April 28. may be Page 332 of 845 . 218. v United Pacific Capital Corporation GR 194781 June 27. On March 3. Stipulated interest rates are illegal if they are unconscionable and courts are allowed to temper interest rates when necessary. The petitioner did not dispute the loan it owes but claimed that the agreed interest rate was fixed at 15. the petitioner issued in favor of the respondent a consolidated promissory note in the principal amount of P27. on April 4. argued that the increased interest rates were mutually agreed upon and that the same cannot be considered usurious because usury is legally non-existent in this jurisdiction. the principal balance of which as of April 28. The petitioner failed to satisfy the consolidated promissory note. 1998. on the other hand.852. What may be iniquitous and unconscionable in one case. a penalty charge was imposed in an amount equivalent to 8% per month of the outstanding amount due and unpaid computed from the date of default.87. The respondent thus sent demand letters to the petitioner but the latter failed to pay and instead asked for restructuring of the loan. RGM Industries Inc. it granted a thirty million peso short-term credit facility in favor of the petitioner. 1997.075. 1998. The petitioner asserted that the respondent unilaterally imposed the increased interest rates in violation of the principle of mutuality of contracts. Consequently.

just in another. hence. (2) the attorney’s fees are not an integral part of the cost of borrowing but a mere incident of collection. Page 333 of 845 . and (3) the attorney’s fees were intended as penal clause to answer for liquidated damages. Under the premises. attorney’s fees equivalent to one percent (1%) of the outstanding balance is reasonable. The attorney’s fees must likewise be equitably reduced considering that: (1) the petitioner has already made partial payments. the rate of 10% of the unpaid obligation is too onerous.

000. or from January 8.00 payable for six months.240.00 loan shall be payable within six (6) months.000. However. executed the promissory note quoted above.000. 1994.000.000. Pantaleon issued a promissory note. as agreed upon by the parties in the promissory note.R. Thus. P1. we find that the interest of P40. the interest on the loan should be at the legal interest rate of 12% per annum. During this period. plus 4% monthly interest. the respondent found that the petitioners still had an outstanding balance of P1.108.000.000. ISSUE: What is the proper interest rate to be awarded? RULING: In the present case. 1994. consistent with our ruling in Eastern Shipping Lines. or from January 8. 1997.00 per month corresponds only to the six (6)-month period of the loan. Court of Appeals: Page 334 of 845 .772.151. Thus. To secure the payment of the loan.00 as of January 4.00 per court appearance and costs of suit. Applying this provision.00. the respondent filed a complaint for sum of money with the RTC to enforce the unpaid balance." Under this provision. rather a fixed sum equivalent to this rate was agreed upon.000. Article 1956 of the Civil Code specifically mandates that "no interest shall be due unless it has been expressly stipulated in writing. Pantaleon. 1997. the respondent issued a check for P1. No. the P1. the petitioners had already paid a total of P1. to which it applied a 4% monthly interest. but no such rate of interest was stipulated in the promissory note.MENCHAVEZ G. in his personal capacity and as authorized by the Board. 1994 to June 8. v. Thus.00 loan from the respondent.00 to be paid within six (6) months. for a total obligation of P1. 1993. 1994 up to June 8. P30. The concurrence of the two conditions is required for the payment of interest at a stipulated rate. 160545 March 9. on August 28.000. 219. the President and Chairman of the Board of PRISMA.000. 1997.240. the loan shall earn an interest of P40. or a total obligation of P1.000. Nicdao that collection of interest without any stipulation in writing is prohibited by law.000. We note that this agreed sum can be computed at 4% interest per month. As of January 4.00 per month. and (2) the agreement for the payment of interest was reduced in writing. the payment of interest in loans or forbearance of money is allowed only if: (1) there was an express stipulation for the payment of interest. obtained a P1. Inc.364. 2010 FACTS: On December 8. Valdehueza and Ching v.00.00 in attorney’s fees. with a monthly interest of P40. we held in Tan v. PRISMA CONSTRUCTION & DEVELOPMENT CORPORATION vs.00 for the six-month period. Pantaleon.000. In turn. Thereafter.

. In the absence of stipulation.When the obligation is breached. and it consists in the payment of a sum of money. a loan or forbearance of money.e. the rate of interest shall be 12% per annum to be computed from default. the interest due should be that which may have been stipulated in writing. i.e. i.. from judicial or extrajudicial demand under and subject to the provisions of Article 1169 of the Civil Code. the interest due shall itself earn legal interest from the time it is judicially demanded. Furthermore." Page 335 of 845 .

allowed Maceda to himself take over construction. The DBP was further ordered to give plaintiff Maceda such other amounts still pending release.5M. BONIFACIO SANZ MACEDA. and TERESITA MACEDADOCENA. No.3 million to finance the expansion of the Old Gran Hotel in Leyte. Project cost of the New Gran Hotel was P10.93M. suspended the period of availment. RecioGarcia. namely. JR. 1990. or 30% of P10. Upon approval of said loan. the CFI rescinded the building contract. DBP filed a Petition for Certiorari as regards the execution pending appeal before the appellate court. (Moreman). 220. The contractor would directly receive the loan releases from DBP. 135128. The appellate court. DBP fixed a debt-equity ratio of 70%-30%. Macedas equity infusion was P2. (Maceda) obtained a loan from the defendant DBP in the amount of P7. The DBP Governor at that time. Moreman Builders Co. allegedly imposed the condition that DBP would choose the building contractor. 1976 plaintiff Bonifacio Maceda. suppliers of equipment and furnishings for the hotel were also to be paid directly by DBP. August 26. 1999 FACTS: On July 28. Maceda filed a complaint for Rescission of the building contract with Damages against the contractor Moreman. Ignacio Capulong granted DBPs petition and annulled the trial courts order of partial execution pending appeal Issue: Whether or not the Court of Appeals erred when it reversed the October 2. 1977. DEVELOPMENT BANK OF THE PHILIPPINES and the COURT OF APPEALS G. after verification by DBP of the construction progress. The period of loan availment was 360 days from date of initial release of the loan. Moreman filed an appeal which was subsequently dismissed in 1990 by the Supreme Court. Jr. 1997 Order of the trial court granting execution of the latters Decision pending appeal Decision: The court held that the contentions of DPB have merit. and directed DBP to release to Maceda the sum of P1. Entry of judgment on this case was issued on April 23.5M. the applicable interest Page 336 of 845 . Similarly.003M. Hon.R. In accordance with our ruling in Sta. Lucia Realty and Development v. corresponding to DBP and Macedas respective infusion in the hotel project. which had previously been approved for release in January 1978. vs. in DBP v. Hence. Spouses Buenaventura. plaintiff Maceda executed a promissory note and a mortgage of real estate. The construction deadline was set for December 22. The trial court promulgated its Decision in favor of Maceda. in-charge of loans for hotels.

In the absence of stipulation. and it consists in the payment of a sum of money. 1169. above.. Civil Code) but when such certainty cannot be so reasonably established at the time the demand is made. the rate of interest shall be 12% per annum to be computed from default. 3. an interest on the amount of damages awarded may be imposed at the discretion of the court at the rate of 6% per annum. No interest. When the judgment of the court awarding a sum of money becomes final and executory. The imposition of interest already takes into account the passage of time. shall be adjudged on unliquidated claims or damages except when or until the demand can be established with reasonable certainty. the rate of legal interest. and is meant to compensate Maceda for any further delays in payment by DBP.e. When the obligation is breached. not constituting a loan or forbearance of money. The actual base for the computation of legal interest shall. the interest rate of 12% per annum shall apply from the finality of judgment until the total amount awarded is fully paid. the interest due should be that which may have been stipulated in writing.e. is breached. to be reckoned from the time of the filing of the complaint on 15 October 1984. a loan or forbearance of money. because the case at bar involves a breach of obligation and not a loan or forbearance of money. where the demand is established with reasonable certainty. v. the interest shall begin to run only from the date the judgment of the court is made (at which time the quantification of damages may be deemed to have been reasonably ascertained).rate on the P6. Furthermore. the interest due shall itself earn legal interest from the time it is judicially demanded. Page 337 of 845 .05 to be paid by DBP to Maceda is 6% per annum. whether the case falls under paragraph 1 or paragraph 2. Court of Appeals. Inc. from judicial or extrajudicial demand under and subject to the provisions of Article 1169 of the Civil Code. shall be 12% per annum from such finality until its satisfaction. Pursuant to these rules. Accordingly. however.. 1. i. When an obligation. 2.398. We guide ourselves with the rules of thumb established in Eastern Shipping Lines.153. this interim period being deemed to be by then an equivalent to a forbearance of credit. in any case be on the amount finally adjudged. the interest shall begin to run from the time the claim is made judicially or extrajudicially (Art. i.

among others. 224 dated 3 December 1982 of the Monetary Board of the Central Bank.R. The virtual repeal of the Usury Law is within the range of judicial notice which courts are bound to take into account. 2008 FACTS: The Philippine National Bank (PNB) assails the Decision of the Court of Appeals dated 15 May 2005. CV No. 905 which took effect on 1 January 1983 and removed the ceiling on interest rates for secured and unsecured loans regardless of maturity. Their only contention concerning the interest rate was that the charges imposed by the bank violated the Usury Law. and later by Central Bank Circular No. rendered in CA-G. February 12. the fundamental tenet is that the law is deemed part of the contract. The effect of these circulars is to allow the parties to agree on any interest that may be charged on a loan. Encina avers that there ought to be longer gestation periods on its part being engaged in a business of agricultural character. 79094 which. Page 338 of 845 . 221. After all. the Encina spouses never challenged the validity of their loan and the accessory contracts with PNB on the ground that they violated the principle of mutuality of contracts in view of the provision therein that the interest rate shall be set by management. declared null and void the interest rate imposed by PNB on the loan obtained from it by respondents and the consequent extrajudicial foreclosure of the properties offered as security for the loan. Respondents Encina spouses acquired several loans from PNB from which it failed to pay within due time. Thus. It should be definitively ruled in this regard that the Usury Law had been rendered legally ineffective by Resolution No. ISSUE: Was there a violation of the Usury Law? RULING: As borne by the records. This was the essence of the second cause of action alleged in the complaint. PNB VS ENCINA GR 174055. the trial court was correct in ruling that the second cause of action was without basis.

inter alia. Under the Page 339 of 845 . due date. especially when the defendant’s checks were dishonored. 222. the penalty may also be reduced by the courts if it is iniquitous or unconscionable. Central Bank Circular No. penalties and attorney’s fees are contrary to morals. Consequently. the corresponding guarantee checks issued by defendant. 2004 427 SCRA 517 FACTS: The present controversy arose from a case for collection of money. What may be iniquitous and unconscionable in one may be totally just and equitable in another. penalties and attorney’s fees. The face value of each promissory notes is bigger [than] the amount released to defendant because said face value already included the interest from date of note to date of maturity. In the present case. it was improper for the RTC to rule on the constitutionality of Section 1. ISSUES: (1) Whether or not the penalties charged per month is in the guise of hidden interest. If reasonably exercised. RULING: Iniquitous and unconscionable stipulations on interest rates. that defendant obtained from plaintiff six (6) separate loans for which the former executed in favor of the latter six (6) separate promissory notes and issued several checks as guarantee for payment. The trial court’s clear and detailed computation of petitioner’s outstanding obligation to respondent was affirmed by the CA for being convincing and satisfactory. iniquitous and unconscionable was the parties’ stipulated penalty charge of 5 percent per month or 60 percent per annum. However. The complaint alleges. When the said loans became overdue and unpaid. Series of 1982. Jaucian against Restituta Imperial. 149004. courts are granted authority to reduce them equitably.000. in addition to regular interests and attorney’s fees. 1989. No. filed by Alex A. courts must consider the circumstances of each case. plaintiff made repeated oral and written demands for payment. Also.R. 905. date of issue. Said promissory notes indicate the interest of 16% per month. April 14. such authority shall not be disturbed by appellate courts. Even if there has been no performance. (2) Whether or not the reduction of attorney’s fees by the RTC is reasonable. Article 1229 of the Civil Code states thus:“The judge shall equitably reduce the penalty when the principal obligation has been partly or irregularly complied with by the debtor. RESTITUTA IMPERIAL VS. The loans were covered by six (6) separate promissory notes executed by defendant.” In exercising this power to determine what is iniquitous and unconscionable. on October 26. there was partial performance by petitioner when she remitted P116. ALEX JAUCIAN G. the CA held that without judicial inquiry.540 as partial payment of her principal obligation of P320.

the attorney’s fees here are in the nature of liquidated damages and the stipulation therefor is aptly called a penal clause. it is binding upon the obligor. Article 1229 of the Civil Code specifically empowers the judge to reduce the civil penalty equitably. morals.is reasonable. who is the judgment creditor entitled to enforce the judgment by execution. we hold that the RTC’s reduction of attorney’s fees -. when the principal obligation has been partly or irregularly complied with. not the counsel.from 25 percent to 10 percent of the total amount due and payable -. the trial court was justified in reducing the stipulated penalty charge to the more equitable rate of 14 percent per annum.” So long as the stipulation does not contravene the law. Nevertheless. Strictly speaking. public order or public policy. The Promissory Note carried a stipulation for attorney’s fees of 25 percent of the principal amount and accrued interests. Page 340 of 845 . The twenty-nine partial payments she made were a manifestation of her good faith. this covenant on attorney’s fees is different from that mentioned in and regulated by the Rules of Court. “Rather. Upon this premise. Again. It is the litigant. it appears that petitioner’s failure to comply fully with her obligation was not motivated by ill will or malice.circumstances.

1994.500. February 23. agreed to sell to respondent Dave P. the amount of P672. Makati. in addition to the interest of 18% per annum on the P600. Petitioner claimed that he twice tendered to respondent. On August 15. 156846.00 to be paid within 60 days from the execution of the contract. DAVE SAHIJWANI G.00 as option/reservation fee and the balance of P14. however. No. 1994. North Forbes Park. 1994. admitted that his office received petitioner’s letter dated August 5. on the other hand. through his counsel. 1994.R. the Certificate of Non-Tax Delinquency on real estate taxes and Clearance on Payment of Association Dues. 088498.00. Petitioner failed to deliver the required documents. In compliance with their agreement. but claimed that no check was appended thereto.00 option/reservation fee plus 18% interest per annum computed from December 3. Respondent’s counsel. 1993. He averred that there was no valid tender of payment because no check was tendered and the computation of the amount to be tendered was insufficient.000. TEDDY PABUGAIS VS. Pabugais.000. Sahijwani a lot containing 1.487. dated August 3.900. simultaneous with delivery of the owner’s duplicate Transfer Certificate of Title in respondent’s name the Deed of Absolute Sale.500.00 option/reservation fee by way of Far East Bank & Trust Company Check. 1994) in the form of Far East Bank & Trust Company Manager’s Check No.000. petitioner wrote a letter to respondent saying that he is consigning the amount tendered with the Regional Trial Court of Makati City. On November 29. 2004 423 SCRA 596 FACTS: Pursuant to an “Agreement And Undertaking” on December 3. 223. petitioner Teddy G. dishonored. 1996.00 (representing the P600.887. Respondent paid petitioner the amount of P600. petitioner filed a complaint for consignation.00 option/reservation fee. because petitioner verbally promised to pay 3% monthly interest and 25% attorney’s fees as penalty for default.00 option/reservation fee. 1993 to August 3. in consideration of the amount of P15.239 square meters located at Jacaranda Street. which was.000. Metro Manila. the trial court rendered a decision declaring the consignation invalid for failure to prove that petitioner tendered payment to respondent and that the latter refused Page 341 of 845 . The parties further agreed that failure on the part of respondent to pay the balance of the purchase price entitles petitioner to forfeit the P600. but said counsel refused to accept the same. On August 11. he returned to respondent the latter’s P600.000. while non-delivery by the latter of the necessary documents obliges him to return to respondent the said option/reservation fee with interest at 18% per annum.

Hence. On a motion for reconsideration. That petitioner knowingly and voluntarily assigned the Page 342 of 845 . Rule 10 of the Canons of Professional Ethics provides that “the lawyer should not purchase any interest in the subject matter of the litigation which he is conducting. but likewise prayed that the same be released to him.00 to Atty. Atty. Unfazed. petitioner can no longer withdraw the same.900. It held that the validity of the consignation had the effect of extinguishing petitioner’s obligation to return the option/reservation fee to respondent. property and rights which are the object of any litigation in which they may take part by virtue of their profession. Petitioner’s motion to withdraw the amount consigned was denied by the Court of Appeals and the decision of the trial court was affirmed. De Guzman. Furthermore. petitioner failed to manifest his intention to comply with the “Agreement And Undertaking” by delivering the necessary documents and the lot subject of the sale to respondent in exchange for the amount deposited.. as part of his attorney’s fees was executed during the pendency of this case with the Court of Appeals.. De Guzman. Moreover. Jr. 2003. 900. which has the effect of extinguishing petitioner’s obligation. ISSUE: Whether or not assigning the amount of P672. De Guzman is prohibited. the Court of Appeals has yet to rule on the consignation’s validity and the respondent had not yet accepted the same. In his Motion to Intervene. violates Article 1491 of the Civil Code which forbids lawyers from acquiring by assignment. not only asserted ownership over said amount. Withdrawal of the money consigned would enrich petitioner and unjustly prejudice respondent. Jr. Jr.00 to Atty. the Court of Appeals declared the consignation as valid in an Amended Decision dated January 16. petitioner filed the instant petition for review contending that he can withdraw the amount deposited with the trial court as a matter of right because at the time he moved for the withdrawal thereof. RULING: The amount consigned with the trial court can no longer be withdrawn by petitioner because respondent’s prayer in his answer that the amount consigned be awarded to him is equivalent to an acceptance of the consignation. Petitioner appealed the decision to the Court of Appeals. Atty.to receive the same. The withdrawal of the amount deposited in order to pay attorney’s fees to petitioner’s counsel.” The assailed transaction falls within the prohibition because the Deed assigning the amount of P672.. De Guzman.

Page 343 of 845 . Wherefore.subject amount to his counsel did not remove their agreement within the ambit of the prohibitory provisions. in view of all the foregoing. the instant petition for review is denied. To grant the withdrawal would be to sanction a void contract.

LO VS. the MTC decision was affirmed in toto. 000. The lease was valid until December 31. Inc. or if the principal obligation has been partly or irregularly complied with. the penalty may also be reduced by courts if it is iniquitous or unconscionable. the Court of Appeals has the authority to do so. At variance. No. 000 per day of delay in surrendering the possession of the property. The agricultural cooperative refused on the ground of a contest against petitioner’s acquisition of the parcels of land in an action for annulment of sale. This power of the courts is explicitly sanctioned by Article 1229 of the Civil Code which provides that the judge shall equitably reduce the penalty when the principal obligation has been partly or irregularly complied with by the debtor. private respondent National Onion Growers Cooperative Marketing Association. Private respondent was ordered to vacate the leased premises. Unsatisfied with the decision of the CA. Even if there has been no performance. the trial court decided the case in favor of petitioner. The agricultural cooperative then elevated the case to the court of Appeals that affirmed the lower court’s decision but modified that the penalty to be imposed must be reduced to P1. public order or public policy. Lo demanded that private respondent vacate the leased premises and surrender its possession to him. 224. September 23. redemption and damages. Page 344 of 845 . COURT OF APPEALS G.1996.1995 from the Land Bank of the Philippines. On February 23. 141434. While courts are not at liberty to ignore the freedom of the parties to agree on such terms and conditions as they see fit as long as they are not contrary to law. petitioner filed an action for ejectment and subsequently asked for imposition of the contractually stipulated penalty of P5. RULING: YES. Thereafter. Upon the expiration of the lease contract. the same having been stipulated by the parties in their Contract of Lease. On appeal to the Regional Trial Court.1995. morals. Lo filed the instant petition for review. 2003 411 SCRA 523 FACTS: Antonio Lo acquired two parcels of land with an office constructed thereon in an auction sale on November 9. ISSUE: The issue raised by the petitioner is whether or not the Court of Appeals has the authority to reduce the penalty awarded by the trial court. courts may equitably reduce a stipulated penalty if it is iniquitous or unconscionable. was the occupant of the parcels of land under a subsisting contract of lease with Land Bank.R. good customs.

on the other hand. 1981 a loan in the amount of P120. to pay the sum borrowed with an interest of 15. 783. iniquitous and unconscionable. Branch 143 a complaint for recovery of the due amount. 138677. asked that the payment of interest and penalty be commenced not from the date of filing of complaint but from the time of default as so stipulated in the contract of the parties. It ordered the petitioners to pay. the trial court ruled in favor of the bank. both parties moved for reconsideration. Not fully satisfied with the decision. Petitioners prayed for the reduction of the 5% penalty for being unconscionable. commencing on May 20. 1982 until fully paid.00 with interest thereon at the rate of 15. COURT OF APPEALS G. 2% service charge and 5% per month penalty charge. February 12. however. 000. The Court of Appeals affirmed it but deleted the 2% service charge pursuant to Central Bank Circular No. LIGUTAN VS. 416. ISSUE: Whether or not the penalty is reasonable and not iniquitous.189% per annum. however. On September 5. The obligation matured on September 8. jointly and severally. have it that the penalty sought to be deleted by petitioners was even insufficient to fully cover and compensate for the cost of money brought about by the radical devaluation and decrease in the purchasing power of the peso. 1988. Respondent bank.R. petitioners agreed to pay 10% of the total amount due by way of attorney’s fees if the matter were indorsed to a lawyer for collection or if a suit were instituted to enforce payment. In addition. the sum of P114. 1982 with the RTC of Makati. The petitioner. 1981.189% per annum upon maturity and to pay a penalty of 5% every month on the outstanding principal and interest in case of default. the bank filed on November 3. jointly and severally. granted an extension but only until December 29. which did not take an appeal. the bank.00 from respondent Security Bank and Trust Company. 2002 376 SCRA 561 FACTS: Petitioners Tolomeo Ligutan and Leonidas dela Llana obtained on May 11. 1981.189% interest and the penalty of 3% per month or 36% per annum imposed by private respondent bank on petitioner’s loan obligation are still manifestly exorbitant. The bank. 225. would. contended. When petitioners defaulted on their obligation. Petitioners executed a promissory note binding themselves. before this Court. No. among others that the 15. Page 345 of 845 .

given the circumstances. when the penalty clause itself suffers from fatal infirmity. is addressed to the sound discretion of the court. and when exceptional circumstances so exist as to warrant it. not to mention the repeated acts of breach by petitioners of their contractual obligation. the standing and relationship of the parties. this Court sees no cogent ground to ruling of the appellate court. the nature of the obligation. The Court held that the question of whether a penalty is reasonable or iniquitous can be partly subjective and partly objective. extent and purpose of the penalty. In Rizal Commercial Banking Corp. for example. Its resolution would depend on such factors as. the Court has tempered the penalty charges after taking into account the debtor’s pitiful situation and its offer to settle the entire obligation with the creditor bank. the supervening realities. the penalty is not unreasonable. In the case at bar. but not necessarily confide to. the type. The stipulated penalty might likewise be reduced when a partial or irregular payment is made by the payment.RULING: NO. by and large. Court of Appeals. the application of which. v. The stipulated penalty might even be deleted such as when there has been substantial performance in good faith by the obligor. and the like. the mode of breach and its consequences. Page 346 of 845 .

500. if any. 000 but averred that what the parties had actually agreed upon and entered into was a real estate mortgage. It also found that the Pascuals had made payments in the total sum of P344. Accordingly. 000. 2002 384 SCRA 105 FACTS: Ramos alleged that on June 3. Bulacan. RAMOS G. The trial court found that the transaction between the parties was actually a loan in the amount of P150. they had overpaid the loan by P141. PASCUAL VS. the Spouses Pascual executed in his favor a Deed of Absolute Sale with Right to Repurchase over 2 parcels of land and the improvements thereon located in Bambang. that interest on the loan as stipulated by the parties in that same document should be paid. (c) the cause of action. abandoned.00. (b) Ramos had no legal capacity to sue. HELD: After the trial court sustained petitioners’ claim that their agreement with Ramos was actually a loan with real estate mortgage. the Pascuals should not be allowed to turn their back on the stipulation in that agreement to pay interest at the rate of 7% per month.00. This document was annotated at the back of the title. Bulacan. 305626. that is. waived. in its Decision of March 15. No. was barred by the statute of limitations.R. the payment of which was secured by a mortgage of the property covered by TCT No. The Pascuals interposed the following defenses: (a) the trial court had no jurisdiction over the subject or nature of the petition. They further alleged that there was no agreement limiting the period within which to exercise the right to repurchase and that they had even overpaid Ramos. when Ramos moved for a reconsideration of the decision of the trial court pointing out that the interest rate to Page 347 of 845 . for and in consideration of P150. The Pascuals should accept not only the favorable aspect of the court’s declaration that the document is actually an equitable mortgage but also the necessary consequence of such declaration.000. In their Answer. July 4. Ramos prayed that the title or ownership over the subject parcels of land and improvements thereon be consolidated in his favor. (d) the petition stated no cause of action. and (f) Ramos has not complied with the required confrontation and conciliation before the barangay. hence.000. 144712. The Pascuals did not exercise their right to repurchase the property within the stipulated one-year period. ISSUE: Whether or not the contract entered into was a contract of loan and not a contract of sale.00. 226. (e) the claim or demand set forth in Ramos’s pleading had been paid. the Pascuals admitted having signed the Deed of Absolute Sale with Right to Repurchase for a consideration of P150. and that with interest at 7% per annum. 1995 the trial court ruled in favor of the defendants. or otherwise extinguished. Besides. 1987.

mental weakness. It is a basic principle in civil law that parties are bound by the stipulations in the contracts voluntarily entered into by them. the Pascuals were at a disadvantage on account of their moral dependence. which would entitle them to the vigilant protection of the courts as mandated by Article 24 of the Civil Code. tender age or other handicap. There is nothing from the records and. The interest rate of 7% per month was voluntarily agreed upon by Ramos and the Pascuals. Page 348 of 845 . Parties are free to stipulate terms and conditions which they deem convenient provided they are not contrary to law. It was only in their motion for the reconsideration of the decision of the Court of Appeals that the Pascuals made an issue of the interest rate and prayed for its reduction to 12% per annum. Neither is there a showing that in their contractual relations with Ramos. good customs. there is no allegation showing that petitioners were victims of fraud when they entered into the agreement with Ramos.be used should be 7% per month. the Pascuals never lifted a finger to oppose the claim. morals. public order. in fact. or public policy. ignorance.

In accordance with the terms of the loan agreement.500. An apparently legal loan is usurious when it is intended that additional compensation for the loan providing for payment bye the borrower for the leaders services which of little value or which are not in fact to be rendered.R. 2001 369 SCRA 99 FACTS: Petitioner First Metro granted respondent Este Del Sol a loan of P7. 141811.00 per annum for a period of four (4) consecutive years. However.98. including those other respondents who have securities of the loan of respondent Este Del Sol by virtue of their continuing surety agreements. Simultaneous with the execution of and in accordance with the terms of the Underwriting Agreement. In addition. However.500.385. 227.863. Thus First Metro caused the extra judicial foreclosure of the real estate mortgage where First Metro was the highest bidder. there remained a balance of P 6. it executed as provided for by the loan agreement.679. FIRST METRO INVESTMENTS VS. a 20% one time penalty on the amount due and such mount shall bear interest at the highest rate permitted by law plus liquidated damages at the rate of 2% per month and attorney’s fees equivalent to 25% of the sum sought to be received. G. an Underwriting Agreement whereby Forts Metro shall underwrite on a best efforts basis the public offering of one hundred twenty thousand common shares of Este Del Sol. the Underwriting Agreement provided that for supervising the public offering of the shares. No.297. RULING: The form of the contra ct enters into between the petitioner and respondent is not conclusive for the law will not permit a usurious loan to hide itself behind a legal form. ISSUE: Whether or not Underwriting and Consultancy Agreements are mere subterfuges to camouflage the usurious interest charged by First Metro. First Metro instituted an instant collection suit against respondent. the loan Underwriting and Consultancy Agreement are not separate and independent transactions rather they were executed and delivered contemporaneous by and executed by First Metro as essential conditions for the grant of the loan.630. Este Del Sol shall pay First Metro an annual supervision fee of P 200. Here. In case of deposit. November 15. Moreover.73 Hence. respondents Este Del Sol executed several documents as security for payment. INC. ESTE DEL SOL MOUNTAIN RESERVE. Since Este Del Sol failed to meet the schedule of repayment it appeared to have incurred a total obligation of P 12. a consultancy Agreement was also executed whereby Este Del Sol engaged the services of petitioner First Metro for a fee as consultant to render general consultancy services. The loan was payable on 36 consecutive monthly amortizations and the interest on the loan was egged at 16% per annum based on the diminishing balance.000.00 to finance the construction and development of respondent’s Mountain Reserve. in usurious Page 349 of 845 .00 per annum and a consultancy fee of P 332.

loans. Page 350 of 845 . the entire obligation does not become void because the unpaid principal debt still stands and remains.

00 per bundle to be delivered within 30 working days from the date of the opening of a letter of credit.997. The specifications and provisions of both transactions. No.000 pieces while the quantity of buri midribs remained at 22. DOMEL claims that NNRMC must first inspect the ordered items before delivery could be made. 1981.057 pieces of rattan poles and 22. NNRMC filed a complaint for damages before the Regional Trial Court of Pasig.000 to only 100. Hence. on July 9. DOMEL undertook to deliver the goods on or before October 31. In violation of their agreement. on September 23.236. also to be delivered within 60 days from the date of the opening of a letter of credit. 1981. Both DOMEL and NNRMC assail the above-quoted decision in separate petitions which have been consolidated before this Court. It also reduced the quantity of the rattan poles from 300. 228. Consequently. NNRMC. 1981. 1981. private respondent NDC-NACIDA Raw Materials Corporation (NNRMC) ordered from petitioner Domel Trading Corporation (DOMEL) 22. NNRMC extended the expiry date of its two letters of credit to November 5. 1999 FACTS: On June 3. 84813. In short.00 to cover the price of 93.000.000 pieces of rattan poles at P9.000 bundles of buri midribs. In accordance with their agreement. judgment was rendered in favor of plaintiff and against defendant. After trial.000 bundles.00 to cover its order for 206. 1982 for the payment of damages. Thus. On June 4. September 22.000. 1981.00. Page 351 of 845 .R. no deliveries were again made on the said date. DOMEL failed to deliver the buri midribs and rattan poles within the stipulated period. Further. this Court has resolved to give due course to the petition and decides the same. private respondent again ordered 300.65 per piece for a total price of P2. were printed in two separate purchase orders. COURT OF APPEALS and G. opened a letter of credit with Philippine National Bank (PNB) in favor of DOMEL in the amount of P1. DOMEL TRADING CORPORATION V.943 pieces of rattan poles. demands were made by NNRMC on January 19. which demands were ignored by DOMEL.895. which served as their agreement. Under the agreement. DOMEL and NNRMC agreed to restructure the latter’s purchase orders in a Memorandum of Agreement. 1981. DOMEL submits it has not breached its contractual obligation to NNRMC inasmuch as it was the fault of the latter for not inspecting and examining the rattan poles as well as the buri midribs already shipped by the suppliers and stored in the former’s warehouse. NNRMC opened another letter of credit in favor of DOMEL in the amount of P1. However.000.000 bundles of buri midribs at P16. On July 13. 1981. Based on the pleadings submitted by the parties.

” In determining whether a penalty clause is “iniquitous and unconscionable. CV No. the penalty may also be reduced by the courts if it is iniquitous or unconscionable. RULING: While the Supreme Court did not agree with the Court of Appeals that the failure of NNRMC to conduct the inspection mitigated DOMEL’s liability for liquidated damages.” Article 2227 of the Civil Code likewise states. it agreed in the reduction of the amount of liquidated damages to only P150.85 as amendment charges on the same Letters of Credit. thus: “Liquidated damages.911. NNRMC failed to prove it had suffered actual damages resulting from the nondelivery of the specified buri midribs and rattan poles. 08952 which modified the decision of the lower court granting private respondent’s prayer for damages.83 as opening charges on the two Letters of Credit and an additional P1.00 as penalty for every day of delay is excessive and unconscionable.000. The amount of P2. which actual damages would include the interest and penalties the creditor may have had to pay on its own from its funding source. nevertheless.000. In fact.R.995. Other than that.” a court may very well take into account the actual damages sustained by a creditor who was compelled to sue the defaulting debtor. what it allegedly suffered are what it calls “Foregone Interest Income” and “Foregone Profit” from the two Letters of Credit. Article 1229 of the Civil Code states. Even if there has been no performance.00. shall be equitably reduced if they are iniquitous or unconscionable. Such could not be considered as actual damages. whether intended as an indemnity or a penalty. thus:“The judge shall equitably reduce the penalty when the principal obligation has been partly or irregularly complied with by the debtor. In this case.ISSUE: Whether or not the decision of the Court of Appeals in CA-G. Page 352 of 845 . was correct. NNRMC was only able to prove that it incurred the amounts of P5.

Servando and Leticia with the latter's husband. No.5% per month on the loan in the sum of P500. the borrowers failed to pay the indebtedness of P500.5% per month on the P500.00. under the circumstances. 1684? We agree with petitioners that the stipulated rate of interest at 5. Veronica R. contrary to morals ("contra bonos mores"). ISSUE: What is the interest that must be collected on the instant case? RULING: Basically. adopted on December 22. Branch 16. Thus. the question presented is whether or not the stipulated rate of interest at 5. has expressly removed the interest ceilings prescribed by the Usury Law and that the Usury Law is now "legally inexistent". the Court of Appeals erred in upholding the stipulation of the parties. at Malolos.D. 131622 November 27. The courts shall reduce equitably liquidated damages. On July 23. Page 353 of 845 . adopted on December 22. 20 The stipulation is void.R. 1982. Rather. plus interests and penalties. In other words. 1982. interest at 12% per annum. 1986. 1990. 116. unconscionable and exorbitant. Nevertheless. whether intended as an indemnity or a penalty if they are iniquitous or unconscionable. On February 20. However. and an additional 1% a month penalty charge as liquidated damages may be more reasonable. hence.000. Rafael Medel. Bulacan. iniquitous. Gonzales. consolidated all their previous unpaid loans totaling P440. Consequently. payable on August 23. They executed a promissory note indicating payment for the balance. is the Usury Law still effective.00. evidenced by the above-quoted promissory note. On maturity of the loan. pursuant to its powers under P. the issue revolves on the validity of the interest rate stipulated upon.00 loan is excessive. 905. bringing their indebtedness to a total of P500.000. 905 of the Central Bank. or has it been repealed by Central Bank Circular No. a complaint for collection of the full amount of the loan including interests and other charges. if not against the law. stipulated upon by the parties in the promissory note iniquitous or unconscionable. Dr.D.000. filed with the Regional Trial Court of Bulacan.000. that plaintiffs extended to the defendants is usurious. and. and sought from Veronica another loan in the amount of P60.00.000. as amended by P. Gonzales.000. or 66% per annum. No. 1986.00. MEDEL VS CA G.5% per month. we agree with the trial court that. No. joined by her husband Danilo G. we find the interest at 5. 1998 FACTS: The Medel spouses obtained several loans of which they were unable to pay in full. 229.00. we can not consider the rate "usurious" because this Court has consistently held that Circular No.

the same is dismissed with costs against petitioners. L-59096 October 11. petitioners claimed that it should be at 12% per annum invoking Central bank Circular. ordering the latter to pay jointly and severally the former. 230. 1985 FACTS: An action for Recovery of Damages for Injury to Person and Loss of Property was filed. In the computation of the legal interest decreed sought to be executed. The petition is without merit. should a judgment debtor pay the judgment creditor? RULING: The judgment spoken of and referred to are judgments in litigations involving loans or forbearances of any money. however. The respondents. The Monetary Board may not tread on forbidden grounds. PACITA REFORMINA v TOMOL. 116. Any other kind of monetary judgment does not fall within the coverage of the said law for it is not within the ambit of authority granted to the Central Bank. the decision was modified. insist that said legal interest should be at the rate of 6% per annum pursuant to Article 2209 of the New Civil code ISSUE: How much by way of legal interest. Page 354 of 845 . JR. On appeal. RTC rendered judgment in favor of the plaintiffs and against the defendants. goods or credits. 416 applicable to any case other than those specifically provided for by the Usury Law will make the same of doubtful constitutionality since the Monetary Board will be exercising legislative functions which are beyond the intendment of PD No. NO. To make Central Bank Circular No.

231. Court of appeals reversed the decision and ordered Lo to pay the plaintiff KJS with legal interests of 6% per annum until fully paid. His business suffered financial difficulties and he was unable to settle his obligations despite demands. 149420 October 8. by a legal cause. 2003 FACTS: KJS is engaged in the sale of steel scaffoldings while Lo is a building contractor. the assignor.80. it essentially meant that its obligation to the petitioner has been extinguished by compensation.R. ISSUE: Whether or not the Deed of Assignment extinguished the obligation RULING: An assignment of credit. KJS ECO-FORMWORK SYSTEM G. He paid a downpayment in the amount of P150. On October 11. The balance was made payable in 10 monthly installments.ent. dacion en pago. 1990. Petitioner was found in breach of his obligation under the Deed of assignment. Respondent delivered the equipments.000. the parties executed a Deed of Assignment whereby petitioner assigned to respondent his receivables from Jonero Realty.425. Jonero refused to honor the Dees of Assign. by virtue of which the owner of the credit. 1990. as assignor. exchange or donation and without the consent of the debtor transfers his credit and accessory rights to another. the assignee. Court of Appeals decision is affirmed. No. RTC dismissed the complaint on the ground that the assignment of credit extinguished the obligation. However. petitioner ordered scaffolding equipments from respondent worth P540.nt because it claimed that petitioner was indebted to it. Petitioner. is bound to warrant the existence and legality of the credit at the tim of the sale or assignment. such as sale. SONNY LO v. When Jonero claimed that it was no longer indebted to petitioner since the latter had also as unpaid obligation to it. On February 22. who acquires the power to enforce it against the debtor. Page 355 of 845 . Petitioner refused to pay claiming that that his obligation had been extinguished when they executed the deed of assign. Petitioner was able to pay the first two monthly installments.

consent and authority. without tan’s knowledge. Under Article 1233 of the Civil Code. 232. ISSUE: Whether the Special Power of Attorney authorized Sonia Gonzaga to receive payment intended for private respondent RULING: There is no question that no payment had ever been made to private respondent as to the check was never delivered to him.R. 108630 April 2. No. Page 356 of 845 . CA and LORETO TAN G. The burden of proof of sad payment lies with the debtor. The decision of the court of appeals is affirmed with the modification that the award by the RTC of P5.00. PHILPPINE NATIONAL BANK v. Petitioner. 1996 FACTS: Private respondent Loreto Tan is the owner of a parcel of land abutting the national highway. RTC ordered petitioner and Tagamolila to pay private respondent jointly and severally the amount worth legal interests. issued a check and delivered the same to Sonia Gonzaga on the strength of the SPA.480. damages and attorney’s fees. 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.000 as attorney’s fees is reinstated. Ca affirmed the decision. through its Assistant Manager Tagamolila. PNB was required by the trial court to release to tan the amount and deposited it by the government. as the case may be. Tan filed a motion requesting the issuance of an order for the release to him of the expropriation price of P32. Expropriaton proceedings were instituted by the government.

By insisting of the upgrade. spouses demanded to be indemnified in the amount of one million “ for the humiliation and embarrassment” caused by the employee. When the arrived in Manila. 233. Pacific Airways breached its contract of carriage with the Vazquezes. Spouses Vazquez are Gold Card Members of its Marc Polo Club.R. ISSUE: Is an involuntary upgrading of an airline’s accommodation at no extra costs cause a breach of contract of carriage? RULING: The Vazquezes are aware of the privileges. Court of Appeals’ decision is modified. Nominal damages are adjudicated in order that the right of the plaintiff. Spouses have the Business class boarding passes and economy class for the maid. the ground stewardess declared a seat change from Business class to First Class for the Vazquez.Spouses Vazquez G. Page 357 of 845 . which have been violated may be vindicated or recognized and not for indemnifying the plaintiff for any loss suffered by him. but such privileges may be waived. The Spouses refused but after insistence by the stewardess.000. No. with two friends and a maid went to HongKong for business. 150843 March 14. The Spouses. nominal damages reduced to P5. Petition is partly granted. When boarding. Spouses should have been consulted first. stating further that there was a breach of contract not because of overbooking but because the latter pushed through with the upgrading despite objections of the spouses. It should not have been imposed on them over their vehement objection. 2003 FACTS: Cathay is a common carrier engaged in transporting passenger and goods by air. the spouses gave in. RTC ruled for the Vazquez ordering Cathay Airways to pay the spouses. Moral damages deleted. CATHAY PACIFIC AIRWAYS v.

4.00 plus 14.No.R.897.5% per annum 2. thus Citibank is ordered to refund said amount in Philippine currency or its equivalent using exchange rate at the time of payment. null and void. Respondent filed a complaint against petitioners claiming to have substantial deposits.99 from respondent’s Citibank-Geneva account is declared illegal. Citibank to pay respondent moral damages of P300. Citibank is ordered to return to respondent the principal amount of P318. ordering Sabeniano. RTC declared the act illegal.000.632.847.000. 1. on the other hand to pay Citibank her indebtedness.40 inclusive off interest. Respondent to pay petitioner the balance of her outstanding loans of P1. Page 358 of 845 . SABENIANO G. CITIBANK v. Sabeniano was a client of both Petitioners Citibank and FNCB Finance. ISSUE: Whether petitioner may exercise its right to set-off respondent’s loans with her deposits and money in Citibank-Geneva RULING: Petition is partly granted with modification. 3.150.000. exemplary damages for P250. 156132. the proceeds of which were supposedly deposited automatically and directly to respondent’s account with the petitioner Citibank and that allegedly petitioner refused to despite repeated demands.34 and P203. October 16. 2006 FACTS: Petitioner Citibank is a banking corporation duly authorized under the laws of the USA to do commercial banking activities n the Philippines. attorney’s fees of P200. null and void and ordered the petitioner to refund the amount plus interest. 234. Petitioner alleged that respondent obtained several loans from the former and in default.069. Citibank exercised its right to set-off respondent’s outstanding loans with her deposits and money. CA affirmed the decision entirely in favor of the respondent. The remittance of US $149.

RTC ruled that petitioner is liable to respondent and all be computed as of the date of payment in accordance with Article 1250 of the Civil Code. Petitioner disclaims liability alleging that it has never entered into a contract nor signed an agreement to be bound by it. Petitioner incurred P94. ISSUE: Whether the re-computation of the judgment award in accordance with Article 1250 of the Civil Code proper RULING: The Supreme Court found as erroneous the trial court’s decision as affirmed y the Court of Appeals. CA affirmed the decision. UNITED STATES LINES G. TELENGTAN BROTHERS and SONS v. US Lines filed a suit against petitioner seeking payment of demurrage charges plus interest and damages. 235.R. On June 22. 1981. The Court holds that there has been an extraordinary inflation within the meaning of Article 1250 of the Civil Code.February 28.2006 FACTS: Petitioner is a domestic corporation while US Lines is a foreign corporation engaged in overseas shipping. 132284. It was made applicable that consignees who fail to take delivery of their containerized cargo within the 10-day free period are liable to pay demurrage charges. The assailed decision is affirmed with modification that the order for re-computation as of the date of payment in accordance with the provisions of Article 1250 of New Civil Code is deleted.No.000 which the latter refused to pay despite repeated demands. Page 359 of 845 . There is no reason for ordering the payment of an obligation in an amount different from what has been agreed upon because of the purported supervention of an extraordinary inflation.

Petitioner is directed to pay respondent 61. Petitioner failed to remit the proceeds of the ticket sales. respondent filed a case with the RTC. CA decision is affirmed with modification. F.195 Yen at the exchange rate on the date of foreign judgment plus 6% interest. RTC issued writ of execution ordering defendant to pay plaintiff 83. was not liable to pay additional 6% interest imposed in the foreign judgment. Unable to execute the decision in Japan.1980 up to and until payment is completed. which ordered petitioner to pay respondent 82. SHARP v. respondent filed a Collection suit against petitioner before the Tokyo District Court. petitioner contended that it had already paid partial payments hence. Page 360 of 845 . April 18. respondent entered into an International Passengers Sales Agency Agreement with petitioner. 1974. NORTHWEST AIRLINES G. for which reason. 133498. On appeal. No.734 Yen plus damages for the delay at 6% per annum from August 28. with interest at the rate of 12% per annum counted from the date of filing until fully satisfied. C. 2002 Facts: On May 9.R. Issue: Whether or not the petitioner is liable to pay additional 6% per annum for the delay Held: The petition is denied.158.195 Yen and damages for the delay at the rate of 6% per annum fro August 28. authorizing the latter to sell its air transport tickets. Petitioner’s liability may be paid in Philippine currency computed at the exchange rate prevailing at the time of payment.158.1980 until payment is completed.

RTC ruled for the petitioners stating a casual or slight breach that did not warrant rescission. 1988. The was untitled but private respondent was paying taxes thereon. 124874. SPOUSES PAREDES and COURT OF APPEALS G. respondent offered to sell to petitioner one-half of the property for all the payment. NO. 2000 Facts: On October 20. lest respondent rescinds the contract. on the precept that no one shall be unjustly enriched himself at the expense of another.840 purchase prize. petitioner was to pay downpayment of P50. petitioner Padilla and private respondent entered into a contract to sell involving a parcel of land. petitioner undertook to secure title to the property in private respondent’s names of the P312.000 upon signing and the balance was to be paid within 10 days from the issuance of the court order directing issuance of the decree of registration. The CA is correct in ordering the return to petitioner of the amounts received from him by private respondents. Petitioner refused and instituted action for specific performance alleging that they have substantially complied with the obligation. Under the contract. March 17. BERT PADILLA v.R. Issue: Whether or not the private respondents are entitled to rescind the contract to sell the land to petitioner Held: The Supreme Court sustained the ruling of CA that private respondent may validly rescind the contract to sell. For failure to pay some of the amount. Page 361 of 845 . however. the reason for this is not that respondents have the power to rescind but because their obligation thereunder did not arise. CA reversed the decision and confirmed the respondent’s rescission.

SPOUSES TIBAJIA v. COURT OF APPEALS and EDEN TAN
G. R. No. 100290, June 4, 1993

Facts:
A suit of collection of sum of money was filed by Eden Tan against the spouses. A writ of
attachment was issued, the Deputy Sheriff filed a return stating that a deposit made by Tibajia in
the amount of P442,750 in another case, had been garnished by him. RTC ruled in favor of Eden
Tan and ordered the spouses to pay her an amount in excess of P3,000,000. Court of Appeals
modified the decision by reducing the amount for damages. Tibajia Spouses delivered to Sheriff
Bolima the total money judgment of P398483.70. Tan refused to accept the payment and insisted
that the garnished funds be withdrawn to satisfy the judgment obligation.

Issue:
Whether or not payment by means of check is considered payment in legal tender

Held:
The ruling applies the statutory provisions which lay down the rule that a check is not legal
tender and that a creditor may validly refuse payment by check, whether it be a manager’s check,
cashier’s or personal check. The decision of the court of Appeals is affirmed.
A check, whether a manager’s check or ordinary check, is not legal tender, and an offer of
a check in payment of a debt is not a valid tender of payment and may be refused receipt by the
obligee or creditor. A check is not legal tender and that a creditor may validly refuse payment by
check, whether it be a manager’s, cashier’s or personal check. The Supreme Court stressed that,
“We are not, by this decision, sanctioning the use of a check for the payment of obligations over
the objection of the creditor.”

Page 362 of 845

DEVELOPMENT BANK OF THE PHILIPPINES v. COURT OF APEEALS
G.R.No. 138703, June 30, 2006

Facts:
In March 1968, DBP granted to private respondents an industrial loan in the amount of
P2,500,000 – P500,000 n cash and P2,000,000 in DBP Progress Bank. It was evidenced by a
promissory note and secured by a mortgage executed by respondents over their present and future
properties. Another loan was granted by DBP in the for of a 5-year revolving guarantee to
P1,700,000. In 1975, the outstanding accounts wth DBP was restructured in view of failure to pay.
Amounting to P4,655,992.35 were consolidated into a single account. On the other hand, all
accrued interest and charges due amounting to P3,074,672.21 were denominated as “ Notes Taken
for Interests” and evidenced by a separate promissory note. For failure to comply with its
obligation, DBP initiated foreclosure proceedings upon its computation that respondent’s loans
were arrears by P62,954,473.68. Respondents contended that the collection was unconscionable if
not unlawful or usurious . RTC, as affirmed by the CA, ruled in favor of the respondents.

Issue:
Whether the prestation to collect by the DBP is unconscionable or usurious

Held:
It cannot be determined whether DBP in fact applied an interest rate higher than what is
prescribed under the law. Assuming it did exceed 12% in addition to the other penalties stipulated
in the note, this should be stricken out for being usurious.
The petition is partly granted. Decision of the court of Appeals is reversed and set aside.
The case is remanded o the trial court for the determination of the total amount of the respondent’s
obligation based on the promissory notes, according to the interest rate agreed upon by the parties
on the interest rate of 12% per annum, whichever is lower.

Page 363 of 845

VITARICH vs. LOSIN
G.R. No. 181560, November 15, 2010

Facts:
Respondent Chona Losin (Losin) was in the fastfood and catering services business
named Glamours Chicken House. Since 1993, Vitarich, particularly its Davao Branch, had been
her supplier of poultry meat.In the months of July to November 1996, Losin’s orders of dressed
chicken and other meat products allegedly amounted to P921,083.10. During this said period,
Losin’s poultry meat needs for her business were serviced by Rodrigo Directo (Directo) and
Allan Rosa (Rosa), both salesmen and authorized collectors of Vitarich, and Arnold Baybay
(Baybay), a supervisor of said corporation.
On August 24, 1996, Directo’s services were terminated by Vitarich without Losin’s
knowledge. He left without turning over some supporting invoices covering the orders of Losin.
Rosa and Baybay, on the other hand, resigned on November 30, 1996 and December 30, 1996,
respectively. Just like Directo, they did not also turn over pertinent invoices covering Losin’s
account.On February 12, 1997, demand letters were sent to Losin covering her alleged unpaid
account amounting to P921,083.10. It appears that Losin had issued three (3) checks amounting
to P288,463.30 which were dishonored either for reasons - Drawn Against Insufficient Funds
(DAIF) or Stop Payment.
On March 2, 1998, Vitarich filed a complaint for Sum of Money against Losin, Directo,
Rosa, and Baybay before the RTC. On August 9, 2001, the RTC rendered its Decision8 in favor
of Vitarich, however the CA rendered the assailed decision in favor of Losin.

Issue:
Wether or not there is already payment on the part of Losin

Held:

No. As a general rule, one who pleads payment has the burden of proving it.The burden
rests on the debtor to prove payment, rather than on the creditor to prove non-payment. The
debtor has the burden of showing with legal certainty that the obligation has been discharged by
payment.
True, the law requires in civil cases that the party who alleges a fact has the burden of
proving it. Section 1, Rule 131 of the Rules of Court24 provides that the burden of proof is the
duty of a party to prove the truth of his claim or defense, or any fact in issue by the amount of

Page 364 of 845

evidence required by law. In this case, however, the burden of proof is on Losin because she
alleges an affirmative defense, namely, payment. Losin failed to discharge that burden.

After examination of the evidence presented, this Court is of the opinion that Losin failed to
present a single official receipt to prove payment.25 This is contrary to the well-settled rule that
a receipt, which is a written and signed acknowledgment that money and goods have been
delivered, is the best evidence of the fact of payment although not exclusive.26 All she presented
were copies of the list of checks allegedly issued to Vitarich through its agent Directo,27 a
Statement of Payments Made to Vitarich,28 and apparently copies of the pertinent history of her
checking account with Rizal Commercial Banking Corporation (RCBC). At best, 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.

Page 365 of 845

METROBANK vs. CABILZO
510 SCRA 259

Facts:
On 12 November 1994, Cabilzo issued a Metrobank Check No. 985988, payable to
“CASH” and postdated on 24 November 1994 in the amount of One Thousand Pesos (P1, 000.00).
The check was drawn against Cabilzo’s Account with Metrobank Pasong Tamo Branch under
Current Account No. 618044873-3 and was paid by Cabilzo to a certain Mr. Marquez, as his sales
commission. Subsequently, the check was presented to Westmont Bank for payment. Westmont
Bank, in turn, indorsed the check to Metrobank for appropriate clearing. After the entries thereon
were examined, including the availability of funds and the authenticity of the signature of the
drawer, Metrobank cleared the check for encashment in accordance with the Philippine Clearing
House Corporation (PCHC) Rules. On 16 November 1994, Cabilzo’s representative was at
Metrobank Pasong Tamo Branch to make some transaction when he was asked by bank personnel
if Cabilzo had issued a check in the amount of P91, 000.00 to which the former replied in the
negative. On the afternoon of the same date, Cabilzo himself called Metrobank to reiterate that he
did not issue a check in the amount of P91, 000.00 and requested that the questioned check be
returned to him for verification, to which Metrobank complied. Cabilzo demanded that Metrobank
re-credit the amount of P91, 000.00 to his account. Metrobank, however, refused reasoning that it
has to refer the matter first to its Legal Division for appropriate action. Repeated verbal demands
followed but Metrobank still failed to re-credit the amount of P91, 000.00 to Cabilzo’s account.
On 30 June 1995, Cabilzo, thru counsel, finally sent a letter-demand to Metrobank for the
payment of P90, 000.00, after deducting the original value of the check in the amount of P1,
000.00Metrobank still failed or refused to comply with its obligation. Consequently, Cabilzo
instituted a civil action for damages against Metrobank before the RTC of Manila, Branch 13. In
his Complaint docketed as Civil Case No. 95-75651, Renato D. Cabilzo v. Metropolitan Bank and
Trust Company, Cabilzo prayed that in addition to his claim for reimbursement, actual and moral
damages plus costs of the suit be awarded in his favor.

Issue:
Whether equitable estoppel can be appreciated in favor of petitioner

Held:
The degree of diligence required of a reasonable man in the exercise of his tasks and the
performance of his duties has been faithfully complied with by Cabilzo. In fact, he was wary
enough that he filled with asterisks the spaces between and after the amounts, not only those stated
in words, but also those in numerical figures, in order to prevent any fraudulent insertion, but
unfortunately, the check was still successfully altered, indorsed by the collecting bank, and cleared
by the drawee bank, and encashed by the perpetrator of the fraud, to the damage and prejudice of
Cabilzo.

Page 366 of 845

Metrobank cannot lightly impute that Cabilzo was negligent and is therefore prevented
from asserting his rights under the doctrine of equitable estoppel when the facts on record are bare
of evidence to support such conclusion. The doctrine of equitable estoppel states that when one
of the two innocent persons, each guiltless of any intentional or moral wrong, must suffer a loss,
it must be borne by the one whose erroneous conduct, either by omission or commission, was the
cause of injury. Metrobank’s reliance on this dictum is misplaced. For one, Metrobank’s
representation that it is an innocent party is flimsy and evidently, misleading. At the same time,
Metrobank cannot asseverate that Cabilzo was negligent and this negligence was the proximate
cause of the loss in the absence of even a scintilla proof to buttress such claim. Negligence is not
presumed but must be proven by the one who alleges it, which petitioner failed to.

Page 367 of 845

EUFEMIA and ROMEL ALMEDA v. BATHALA MARKETING
G.R.No. 150806, January 28, 2008

Facts:
In May 1997, Bathala Marketng, renewed its Contract of Lease with Ponciano Almeda.
Under the contract, Ponciano agreed to lease a porton of Almeda Compound for a monthly rental
of P1,107,348.69 for four years. On January 26, 1998, petitioner informed respondent that its
monthly rental be increased by 73% pursuant to the condition No. 7 of the contract and Article
1250. Respondent refused the demand and insisted that there was no extraordinary inflation to
warrant such application. Respondent refused to pay the VAT and adjusted rentals as demanded
by the petitioners but continually paid the stipulated amount. RTC ruled in favor of the respondent
and declared that plaintiff is not liable for the payment of VAT and the adjustment rental, there
being no extraordinary inflation or devaluation. CA affirmed the decision deleting the amounts
representing 10% VAT and rental adjustment.

Issue:
Whether the amount of rentals due the petitioners should be adjusted by reason of
extraordinary inflation or devaluation

Held:
Petitioners are stopped from shifting to respondent the burden of paying the VAT. 6th
Condition states that respondent can only be held liable for new taxes imposed after the effectivity
of the contract of lease, after 1977, VAT cannot be considered a “new tax”. Neither can petitioners
legitimately demand rental adjustment because of extraordinary inflation or devaluation. Absent
an official pronouncement or declaration by competent authorities of its existence, its effects are
not to be applied.
Petition is denied. CA decision is affirmed.

Page 368 of 845

EQUITABLE PCI BANK, YU and APAS v. NG SHEUNG NGOR
G.R.NO. 171545, December 19, 2007

Facts:
On October 7, 2001, respondents Ngor and Go filed an action for amendment and/or
reformation of documents and contracts against Equitable and its employees. They claimed that
they were induced by the bank to avail of its peso and dollar credit facilities by offering low
interests so they accepted and signed Equitable’s proposal. They alleged that they were unaware
that the documents contained escalation clauses granting Equitable authority to increase interest
without their consent. These were rebutted by the bank. RTC ordered the use of the 1996 dollar
exchange rate in computing respondent’s dollar-denominated loans. CA granted the Bank’s
application for injunction but the properties were sold to public auction.

Issue:
Whether or not there was an extraordinary deflation

Held:
Extraordinary inflation exists when there is an unusual decrease in the purchasing power
of currency and such decrease could not be reasonably foreseen or was beyond the contemplation
of the parties at the time of the obligation. Deflation is an inverse situation.
Despite the devaluation of the peso, BSP never declared a situation of extraordinary
inflation. Respondents should pay their dollar denominated loans at the exchange rate fixed by the
BSP on the date of maturity.
Decision of lower courts are reversed and set aside.

Page 369 of 845

SIMPLICIO PALANCA v. ULYSIUS GUIDES and LORENZO GUIDES
G.R. No. 146365, February 28, 2005

Facts:
In August 1983, petitioner Palanca executed a contract to sell a parcel of land on installment
with Jopson for P11,250. Jopson paid petitioner P1,650 as downpayment, leaving a balance of
P9600. In December 1983, Jopson assigned ad transferred all her rights and interests over the
property to respondent Guides. Believing that she had fully paid the purchase prize, respondent
found out when she verified with the Register of Deeds that the property in question was still in
the name of de Leon. Petitioner stated that she refused to execute the document of sale in favor of
the respondent since the latter failed with the said obligation- that he was not paid the complete
amount in the contract. RTC ruled in favor of the plaintiff and against Palanca, ordering him to
execute a Deed of Absolute Sale and the issuance of TCT, reimburse plaintiff the amount paid n
excess and for damages.

Issue:
Whether the petitioner’s claim of unpaid charges from the respondent proper

Held:
Petitioner was deemed to have waived his right to present evidence and thus was unable to
adduce evidence of such inflation or fluctuation. Even if there were such, petitioner did not make
a demand on respondent for the satisfaction of the claim.

When petitioner accepted respondent’s installment payments despite the alleged charges,
and without any showing that he protested the irregularity of such payment, nor demanded the
payment of the alleged charges, respondent’s liability, if any for said charges is deemed fully
satisfied.

Page 370 of 845

PCIB v. COURT OF APPEALS
G.R. NO. 121989 January 31, 2006

Facts:
PCIB and MBC were joint bidders in a foreclosure sale held of assorted mining machinery
and equipment previously mortgaged to them by Philippine Iron Mines. Atlas agreed to purchase
some of these properties and the sale was evidenced by a Deed of Sale with a downpayment of
P12,000,000 and the balance of P18,000,000 payable in 6 monthly installments. In compliance
with the contract, Atlas issued HongKong and shanghai Bank check amounting to P12,000,000.
Atlas paid to NAMAWU the amount of P4,298,307.77 in compliance with the writ of garnishment
issued against Atlas to satisfy the judgment in favor of NAMAWU. Atlas alleged that there was
overpayment, hence the suit against PCIB to obtain reimbursement. PCIB contended that Atlas
still owed P908,398.75 because NAAWU had been partially paid in the amount of P601,260.00.
RTC ruled against Atlas to pay P908,398.75 to PCIB. CA reversed the decision.

Issue:
Whether atlas had complied with its obligation to PCIB

Held:
While the original amount sought to be garnished was P4,298,307,77, the partial payment
of P601,260 naturally reduced it to P3,697,047.77 Atlas overpaid NAMAWU, thus the remedy if
Atlas would be to proceed against NAAWU nut not against PCIB in relation to article 1236 of the
Civil Code
The petition is partly granted.CA decision is reversed and set aside and in lieu thereof
Atlas is ordered to pay PCIB the sum of P146,058.96, with the legal interest commencing from
the time of first demand on August 22, 1985.

Page 371 of 845

JOSE LAGON v. HOOVEN COMALCO INDUSTRIES
G.R. No. 135657, January 17, 2001

Facts:
Petitioner is the owner of a commercial building while respondent is a domestic corporation
known to be the biggest manufacturer and installer of aluminum materials in the country. Parties
entered into 2 contracts whereby for a total consideration of P104,870. Hooven agreed to sell and
install various aluminum materials in Lagon’s building. Upon execution of contracts, Lagon paid
Hooven P48,000 in advance. On February 24, 1987, Hooven commenced an action for sum of
money. It was alleged that materials were delvered and installed but P69,329 remained unpaid
even after the completion of the project and despite repeated demands. RTC held partly on the
basis of the ocular inspection finding that the total actual deliveries cost P87,140 deducting
therefrom P48,000. CA set aside the decision and held in favor of Hooven.

Issue:
Whether all the materials specified in the contracts had been delivered and installed by
respondent in petitioner’s commercial building

Held:
Essentially, respondent has the burden of establishing its affirmative allegations of
complete delivery and installation of the materials and petitioner’s failure to pay therefor. The
evidence on its discharge is grossly anemic. The CA decision is modified. Lagon is ordered to pay
respondent P6,377.66 representing the value unpaid. On the other hand, respondent is ordered to
pay petitioner P50,000 as moral damages, P30,000 attorney’s fees and P46,554.50 as actual
damages.

Page 372 of 845

BANK OF THE PHILIPPINE ISLANDS v. EASTERN PLYWOOD and BENIGNO LIM
G.R. No. 104612, May 10, 1994

Facts:
Private respondent , Eastern and Lim, an officer and stock holder of Eastern held at least
one joint bank account with the CBTC, the predecessor-in –interest of the petitioner BPI. In March
1975, checking account with Lim in the amount of P120,000 was opened by Velasco with funds
withdrawn fro the account of Eastern and Lim. Velasco died and at the time of his death, the
outstanding balance of the account stood at P662,522.87. Thereafter, Easrtern obtained a loan of
P73,000 fro CBTC in addition, Eastern and Lim and CBTC signed another document entitled “
Holdout agreement”.
In the settlement proceeding of Velasco’s estate, the whole balance of P331,261.44 in the
joint account of Velasco and Lim was claimed as part of Velasco’s estate. The interstate court
granted the urgent motion of heirs of Velasco to withdraw the deposit and authorize them to divide
among themselves the amount. BPI filed a complaint against Lin and Eastern demanding payment
of promissory not for P73,000. RTC ruled that the promissory note is subject to the holdout
agreement. CA affirmed the division.

Issue:
Whether BPI is still liable to the private respondent on the account subject to the holdout
agreement after it is withdrawn by the heirs of Velasco

Held:
The account was proved to belong to Eastern even if it was in the names of Lim and
Velasco. As the real creditor of the bank, Eastern has the right to withdraw it or demand payment
thereof. BPI can not be relieved of its duty to pay Eastern simply because it already allowed the
heirs of Velasco to withdraw the whole balance of the account. Payment made by the debtor to the
wrong party does not extinguish the obligation as to the creditor who is without fault or negligence.

Page 373 of 845

REPUBLIC vs. THI THU THUY T. DE GUZMAN
G.R. No. 175021 June 15, 2011

Facts:
On December 8, 1995, the PNP Engineering Services (PNPES), released a Requisition and
Issue Voucher for the acquisition of various building materials amounting to Two Million Two
Hundred Eighty-Eight Thousand Five Hundred Sixty-Two Pesos and Sixty Centavos
(P2,288,562.60) for the construction of a four-storey condominium building with roof deck at
Camp Crame, Quezon City. Respondent averred that on December 11, 1995, MGM and petitioner,
represented by the PNP, through its chief, executed a Contract of Agreement (the Contract)
wherein MGM, for the price of P2,288,562.60, undertook to procure and deliver to the PNP the
construction materials itemized in the purchase order attached to the Contract. Respondent claimed
that after the PNP Chief approved the Contract and purchase order,MGM, on March 1, 1996,
proceeded with the delivery of the construction materials, as evidenced by Delivery Receipt Nos.
151-153,11 Sales Invoice Nos. 038 and 041,12 and the "Report of Public Property Purchase"
issued by the PNP’s Receiving and Accounting Officers to their Internal Auditor Chief.
Respondent asseverated that following the PNP’s inspection of the delivered materials on March
4, 1996,14 the PNP issued two Disbursement Vouchers; one in the amount of P2,226,147.26 in
favor of MGM,15 and the other, 16 in the amount of P62,415.34, representing the three percent
(3%) withholding tax, in favor of the Bureau of Internal Revenue (BIR).The respondent sent a
letter dated October 20, 199718 to the PNP, demanding the payment of P2,288,562.60 for the
construction materials MGM procured for the PNP under their December 1995 Contract. The PNP,
through its Officer-in-Charge, replied19 to respondent’s counsel, informing her of the payment
made to MGM via Land Bank of the Philippines (LBP). Respondent denying having ever received
the LBP check. On May 5, 1999, respondent filed a Complaint for Sum of Money against the
petitioner. The petitioner presented Edgardo Cruz and testified that Highland Enterprises had been
an accredited contractor of the PNP since 1975. In 1995, Cruz claimed that the PNPES was tasked
to construct "by administration" a condominium building. This meant that the PNPES had to do
all the work, from the canvassing of the materials to the construction of the building. The PNPES
allegedly lacked the funds to do this and so asked for Highland Enterprises’s help. In a meeting
with its accredited contractors, the PNPES asked if the other contractors would agree to the use of
their business name50 for a two percent (2%) commission of the purchase order price to avoid the
impression that Highland Enterprises was monopolizing the supply of labor and materials to the
PNP.51 Cruz alleged that on April 23, 1996, he and the respondent went to the PNP Finance Center
to claim the LBP check due to MGM.

Issue:
Whether or not there is already extinguishment of obligation.

Held:
In general, a payment in order to be effective to discharge an obligation, must be made to

Page 374 of 845

the proper person. Thus, payment must be made to the obligee himself or to an agent having
authority, express or implied, to receive the particular payment. Payment made to one having
apparent authority to receive the money will, as a rule, be treated as though actual authority had
been given for its receipt. Likewise, if payment is made to one who by law is authorized to act
for the creditor, it will work a discharge. The receipt of money due on a judgment by an officer
authorized by law to accept it will, therefore, satisfy the debt.

The respondent was able to establish that the LBP check was not received by her or by
her authorized personnel. The PNP’s own records show that it was claimed and signed for by
Cruz, who is openly known as being connected to Highland Enterprises, another contractor.
Hence, absent any showing that the respondent agreed to the payment of the contract price to
another person, or that she authorized Cruz to claim the check on her behalf, the payment, to be
effective must be made to her.

Page 375 of 845

PHILIPPINE COMMERCIAL INTERNATIONAL BANK (NOW BDO UNIBANK, INC.)
v. ARTURO P. FRANCO

G.R. No. 180069, March 05, 2014

Facts:
Respondent who was 51 years old then decided to save up for his retirement and to invest
his hard earned money. He chose to deposit his savings with defendant bank primarily because of
the latters representation that by making such investment, he was actually providing for his future
since his investment would be commingled, pooled and automatically rolled-over for better
investment return and which will provide for his needs upon retirement, without need for him to
take any further action. Respondent secured from the bank several Trust Indenture Certificates.
Sometime in 1995, plaintiff discovered that one of his children had leukemia and in the
ensuing hospitalization and treatment, plaintiff spent a lot of money; that because his funds were
already exhausted, plaintiff then turned to his Trust Indenture Certificates and started inquiring as
to how he could liquidate the trust. In the beginning, defendant bank constantly asked for time to
look for his records and promised to have an answer before July 15, 1998. On June 22 however,
plaintiff received a letter from defendants counsel denying plaintiffs request for payment by stating
that due to the conversion of all outstanding PCIBank trust indenture accounts into common trust
certificates, all such PCIBank trust indenture certificates have been rendered null and void.
Defendant also argues that the present action had already prescribed.

Plaintiff now prays for the payment of the amounts under the Trust Indenture Certificates,
plus interest, moral and exemplary damages and attorneys fees.

Issue:
Whether or not plaintiff is entitled the relief he seeks

Held:
Yes. Petitioner Bank failed to adduce any documentary evidence to establish the alleged
fact that the four TICs were already paid or cancelled, or that respondents participation therein was
already withdrawn. With all these findings, the CA concluded that the claim of respondent is not
yet barred by prescription, since the maturity dates of the four TICs did not terminate the express
trust created between the parties. Jurisprudence abounds that, in civil cases, one who pleads
payment has the burden of proving it. Even where the plaintiff must allege non-payment, the
general rule is that the burden rests on the defendant to prove payment, rather than on the plaintiff
to prove non-payment. When the creditor is in possession of the document of credit, he need not
prove non-payment for it is presumed. The creditors possession of the evidence of debt is proof
that the debt has not been discharged by payment.

In this case, respondents possession of the original copies of the subject TICs strongly
supports his claim that petitioner Banks obligation to return the principal plus interest of the money

Page 376 of 845

placement has not been extinguished. The TICs in the hands of respondent is a proof of
indebtedness and a prima facieevidence that they have not been paid. Petitioner Bank could have
easily presented documentary evidence to dispute the claim, but it did not. In its omission, it may
be reasonably deduced that no evidence to that effect really exist. Worse, the testimonies of
petitioner Banks own witnesses, reinforce, rather than belie, respondents allegations of non-
payment.

Page 377 of 845

payment of overtime pay. increase adjustments. The complainant was surprised to received an information stating that he will be considered terminated after the turnover of materials. Issue: Whether the respondent NLRC committed grave abuse of discretion when it ruled that private respondent was a regular employee and not a project employee Held: Private respondent’s employment status was established by the certification of employment issued by the petitioner. He continuously rendered service. AUDION ELECTRIC COMPANY v. Local Arbiter ruled in favor of Madolid and ordered Audion to pay the former. project allowances. he claims that he is entitled to reinstatement with full backwages.1999 Facts: Complainant Nicolas Madolid was employed by Audion as a fabricator. 106648. NLRC G. For this reason. Complainant claims that he was dismissed without justifiable cause. which was affirmed by the NLRC. June 17.R. There was no grave abuse of discretion committed by NLRC in finding that respondent was not a project employee. Page 378 of 845 . assigned in different offices or projects for 13 years with a clean record. The rule is that findings of facts of the NLRC affirming those of the Labor Arbiter are entitled to a great weight and will not be disturbed if they were supported by substantial evidence. 13th month pay and attorney’s fees. Decision of NLRC is affirmed with modification deleting the awards of damages and attorney’s fees. NO.

LANKBANK OF THE PHILIPPINES vs. ONG
G.R. No. 190755, November 24, 2010

Facts:
Spouses Johnson and Evangeline Sy secured a loan from Land Bank Legazpi City in the
amount of PhP 16 million. The loan was secured by three (3) residential lots, five (5) cargo trucks,
and a warehouse. Under the loan agreement, PhP 6 million of the loan would be short-term and
would mature on February 28, 1997, while the balance of PhP 10 million would be payable in
seven (7) years. The Notice of Loan Approval dated February 22, 1996 contained an acceleration
clause wherein any default in payment of amortizations or other charges would accelerate the
maturity of the loan.Subsequently, however, the Spouses Sy found they could no longer pay their
loan. They sold three (3) of their mortgaged parcels of land for PhP 150,000 to Angelina Gloria
Ong, Evangeline’s mother, under a Deed of Sale with Assumption of Mortgage.
Evangeline’s father, petitioner Alfredo Ong, later went to Land Bank to inform it about the sale
and assumption of mortgage.3 Atty. Edna Hingco, the Legazpi City Land Bank Branch Head, told
Alfredo and his counsel Atty. Ireneo de Lumen that there was nothing wrong with the agreement
with the Spouses Sy but provided them with requirements for the assumption of mortgage. They
were also told that Alfredo should pay part of the principal which was computed at PhP 750,000
and to update due or accrued interests on the promissory notes so that Atty. Hingco could easily
approve the assumption of mortgage. Two weeks later, Alfredo issued a check for PhP 750,000
and personally gave it to Atty. Hingco. A receipt was issued for his payment. He also submitted
the other documents required by Land Bank, such as financial statements for 1994 and 1995. Atty.
Hingco then informed Alfredo that the certificate of title of the Spouses Sy would be transferred
in his name but this never materialized. No notice of transfer was sent to him. On December 12,
1997, Alfredo initiated an action for recovery of sum of money with damages against Land Bank
in Civil Case No. T-1941, as Alfredo’s payment was not returned by Land Bank. The RTC held
that that under the principle of equity and justice, the bank should return the amount Alfredo had
paid with interest at 12% per annum computed from the filing of the complaint. The RTC further
held that Alfredo was entitled to attorney’s fees and litigation expenses for being compelled to
litigate.The CA affirmed the RTC Decision.
Land Bank contends that Art. 1236 of the Civil Code backs their claim that Alfredo should have
sought recourse against the Spouses Sy instead of Land Bank. Art. 1236 .

Issue:
Whether or not the Art. 1236 of the Civil Code should apply in the instant case.

Held:
We agree with Land Bank on this point as to the first part of paragraph 1 of Art. 1236.
Land Bank was not bound to accept Alfredo’s payment, since as far as the former was
concerned, he did not have an interest in the payment of the loan of the Spouses Sy. However, in
the context of the second part of said paragraph, Alfredo was not making payment to fulfill the

Page 379 of 845

obligation of the Spouses Sy. Alfredo made a conditional payment so that the properties subject
of the Deed of Sale with Assumption of Mortgage would be titled in his name. It is clear from
the records that Land Bank required Alfredo to make payment before his assumption of
mortgage would be approved. He was informed that the certificate of title would be transferred
accordingly. He, thus, made payment not as a debtor but as a prospective mortgagor.
Alfredo, as a third person, did not, therefore, have an interest in the fulfilment of the
obligation of the Spouses Sy, since his interest hinged on Land Bank’s approval of his
application, which was denied. The circumstances of the instant case show that the second
paragraph of Art. 1236 does not apply. As Alfredo made the payment for his own interest and
not on behalf of the Spouses Sy, recourse is not against the latter. And as Alfredo was not paying
for another, he cannot demand from the debtors, the Spouses Sy, what he has paid.

Page 380 of 845

BINALBAGAN VS. COURT OF APPEALS
G.R. No. 100594, March 10, 1993

Facts:

On May 11, 1967, private respondents, through Angelina P. Echaus, in her capacity as
Judicial Administrator of the intestate estate of Luis B. Puentevella, executed a Contract to Sell
and a Deed of Sale of forty-two subdivision lots within the Phib-Khik Subdivision of the
Puentevella family, conveying and transferring said lots to petitioner Binalbagan Tech., Inc.
(hereinafter referred to as Binalbagan). In turn Binalbagan, through its president, petitioner
Hermilo J. Nava (hereinafter referred to as Nava), executed an Acknowledgment of Debt with
Mortgage Agreement, mortgaging said lots in favor of the estate of Puentevella.
Upon the transfer to Binalbagan of titles to the 42 subdivision lots, said petitioner took
possession of the lots and the building and improvements thereon. Binalbagan started operating a
school on the property from 1967 when the titles and possession of the lots were transferred to it.
It appears that there was a pending case, Civil Case No. 7435 of Regional Trial Court
stationed at Himamaylan, Negros Occidental. In this pending case the intestate estate of the late
Luis B. Puentevella, thru Judicial Administratrix, Angelina L. Puentevella sold said
aforementioned lots to Raul Javellana with the condition that the vendee-promisee would not
transfer his rights to said lots without the express consent of Puentevella and that in case of the
cancellation of the contract by reason of the violation of any of the terms thereof, all payments
therefor made and all improvements introduced on the property shall pertain to the promissor and
shall be considered as rentals for the use and occupation thereof.
Javellana having failed to pay the installments for a period of five years, Civil Case No.
7435 was filed by defendant Puentevella against Raul Javellana and the Southern Negros Colleges
which was impleaded as a party defendant it being in actual possession thereof, for the rescission
of their contract to sell and the recovery of possession of the lots and buildings with damages.
Accordingly, after trial, judgment was rendered in favor of Puentevella. Came December
29, 1965 when the plaintiffs in the instant case on appeal filed their Third-Party Claim based on
an alleged Deed of Sale executed in their favor by spouses Jose and Lolita Lopez, thus Puentevella
was constrained to assert physical possession of the premises to counteract the fictitious and
unenforceable claim of herein plaintiffs.

Upon the filing of the instant case for injunction and damages on January 3, 1966, an ex-
parte writ of preliminary injunction was issued by the Honorable Presiding Judge Carlos Abiera,
which order, however, was elevated to the Honorable Court of Appeals which issued a writ of
preliminary injunction ordering Judge Carlos Abiera or any other person or persons in his behalf
to refrain from further enforcing the injunction issued by him in this case and from further issuing
any other writs or prohibitions which would in any manner affect the enforcement of the judgment
rendered in Civil Case 7435, pending the finality of the decision of the Honorable Court of Appeals
in the latter case. Thus, defendant Puentevella was restored to the possession of the lots and

Page 381 of 845

buildings subject of this case. However, plaintiffs filed a petition for review with the Supreme
Court which issued a restraining order against the sale of the properties claimed by the spouses-
plaintiffs.
When the Supreme Court dissolved the aforesaid injunction issued by the Court of Appeals,
possession of the building and other property was taken from petitioner Binalbagan and given to
the third-party claimants, the de la Cruz spouses. Petitioner Binalbagan transferred its school to
another location. In the meantime, the defendants in Civil Case No. 293 with the Court of Appeals
interposed an appeal. On October 30, 1978, the Court of Appeals rendered judgment, reversing
the appealed decision in Civil Case No. 293. On April 29, 1981, judgment was entered in CA-
G.R. No. 42211, and the record of the case was remanded to the court of origin on December 22,
1981. Consequently, in 1982 the judgment in Civil Case No. 7435 was finally executed and
enforced, and petitioner was restored to the possession of the subdivision lots an May 31, 1982. It
will be noted that petitioner was not in possession of the lots from 1974 to May 31, 1982.
After petitioner Binalbagan was again placed in possession of the subdivision lots, private
respondent Angelina Echaus demanded payment from petitioner Binalbagan for the subdivision
lots, enclosing in the letter of demand a statement of account as of September 1982 showing a total
amount due of P367,509.93, representing the price of the land and accrued interest as of that date.
As petitioner Binalbagan failed to effect payment, private respondent Angelina P. Echaus
filed on October 8, 1982 Civil Case No. 1354 of the Regional Trial Court of the Sixth Judicial
Region stationed in Himamaylan, Negros Occidental against petitioners for recovery of title and
damages. Private respondent Angelina P. Echaus filed an amended complaint by including her
mother, brothers, and sisters as co-plaintiffs, which was admitted by the trial court on March 18,
1983.
The trial court rendered a decision in favor of the petitioner because of prescription.
Nonetheless, the Court of Appeals reversed said decision.

Issue:
Whether or not the petition is with merit

Held:
No. A party to a contract cannot demand performance of the other party's obligations
unless he is in a position to comply with his own obligations. Similarly, the right to rescind a
contract can be demanded only if a party thereto is ready, willing and able to comply with his own
obligations there under (Art. 1191, Civil Code). In a contract of sale, the vendor is bound to transfer
the ownership of and deliver, as well as warrant, the thing which is the object of the sale (Art.
1495, Civil Code); he warrants that the buyer shall, from the time ownership is passed, have and
enjoy the legal and peaceful possession of the thing. As afore-stated, petitioner was evicted from
the subject subdivision lots in 1974 by virtue of a court order in Civil Case No. 293 and reinstated
to the possession thereof only in 1982. During the period, therefore, from 1974 to 1982, seller

Page 382 of 845

private respondent Angelina Echaus' warranty against eviction given to buyer petitioner was
breached though, admittedly, through no fault of her own. It follows that during that period, 1974
to 1982, private respondent Echaus was not in a legal position to demand compliance of the
prestation of petitioner to pay the price of said subdivision lots. In short, her right to demand
payment was suspended during that period, 1974-1982.
The prescriptive period within which to institute an action upon a written contract is ten
years (Art. 1144, Civil Code). The cause of action of private respondent Echaus is based on the
deed of sale afore-mentioned. The deed of sale whereby private respondent Echaus transferred
ownership of the subdivision lots was executed on May 11, 1967. She filed Civil Case No. 1354
for recovery of title and damages only on October 8, 1982. From May 11, 1967 to October 8,
1982, more than fifteen (15) years elapsed. Seemingly, the 10-year prescriptive period had expired
before she brought her action to recover title. However, the period 1974 to 1982 should be
deducted in computing the prescriptive period for the reason that, as above discussed, from 1974
to 1982, private respondent Echaus was not in a legal position to initiate action against petitioner
since as afore-stated, through no fault of hers, her warranty against eviction was breached. In the
case of it was held that a court order deferring action on the execution of judgment suspended the
running of the 5-year period for execution of a judgment. Here the execution of the judgment in
Civil Case No. 7435 was stopped by the writ of preliminary injunction issued in Civil Case No.
293. It was only when Civil Case No. 293 was dismissed that the writ of execution in Civil Case
No. 7435 could be implemented and petitioner Binalbagan restored to the possession of the subject
lots.
Deducting eight years (1974 to 1982) from the period 1967 to 1982, only seven years
elapsed. Consequently, Civil Case No. 1354 was filed within the 10-year prescriptive period.
Working against petitioner's position too is the principle against unjust enrichment, which would
certainly be the result if petitioner were allowed to own the 42 lots without full payment thereof.
WHEREFORE, the petition is DENIED and the decision of the Court of Appeals in CA-
G.R. CV No. 24635 is AFFIRMED.

Page 383 of 845

LORENZO SHIPPING COMPANY v. BJ MARTHEL INTERNATIONAL
G.R. No. 145483, November 19, 2004

Facts:
Petitioner Lorenzo Shipping is engaged in coastwise shipping and owns the cargo M/V
Dadiangas Express. BJ Marthel is engaged in trading, marketing an dselling various industrial
commodities. Lorenzo Shipping ordered for the second time cylinder lines from the respondent
stating the term of payment to be 25% upon delivery, the balance payable in 5 bi-monthly equal
installments, no again stating the date of the cylinder’s delivery. It was allegedly paid through post
dated checks but the same was dishonored due to insufficiency of funds. Despite due demands by
the respondent, petitioner falied contending that time was of the essence in the delivery of the
cylinders and that there was a delay since the respondent committed said items “ within two months
after receipt of fir order”. RTC held respondents bound to the quotation with respect to the term
of payment, which was reversed by the Court of appeals ordering appellee to pay appellant
P954,000 plus interest. There was no delay since there was no demand.

Issue:
Whether or not respondent incurred delay in performing its obligation under the contract
of sale

Held:
By accepting the cylinders when they were delivered to the warehouse, petitioner waived
the claimed delay in the delivery of said items. Supreme Court geld that time was not of the
essence. There having been no failure on the part of the respondent to perform its obligations, the
power to rescind the contract is unavailing to the petitioner.
Petition is denied. Court of appeals decision is affirmed.

Page 384 of 845

LUZON DEVELOPMENT BANK vs. ENRIQUEZ
G.R. No. 168646 January 12, 2011

Facts:
On July 3, 1995, De Leon (owner of Delta) and his spouse obtained a P4 million loan from
the BANK for the express purpose of developing Delta Homes I.8 To secure the loan, the spouses
De Leon executed in favor of the BANK a real estate mortgage (REM) on several of their
properties,9 including Lot 4. Subsequently, this REM was amended10 by increasing the amount
of the secured loan from P4 million to P8 million. Both the REM and the amendment were
annotated on TCT No. T-637183.11. Sometime in 1997, DELTA executed a Contract to Sell with
respondent Angeles Catherine Enriquez (Enriquez)14 over the house and lot in Lot 4 with the
condition that upon full payment of the total consideration the Owner shall execute a final deed of
sale in favor of the Vendee/s.
When DELTA defaulted on its loan obligation, the BANK, instead of foreclosing the REM,
agreed to a dation in payment or a dacion en pago. Enriquez filed a complaint against DELTA and
the BANK before Office of the HLURB19 alleging that DELTA violated the terms of its License
to Sell. The HLURB Arbiter Atty. Raymundo A. Foronda upheld the validity of the purchase
price, but ordered DELTA to accept payment of the balance of P108,013.36 from Enriquez, and
(upon such payment) to deliver to Enriquez the title to the house and lot free from liens and
encumbrances. DELTA appealed the arbiter’s Decision to the HLURB Board of Commissioners.
The Commission ordered [Enriquez] to pay [DELTA] the amount due from the time she suspended
payment up to filing of the complaint with 12% interest thereon per annum; thereafter the
provisions of the Contract to Sell shall apply until full payment is made.The OP adopted by
reference the findings of fact and conclusions of law of the HLURB Decisions, which it affirmed
in toto. The CA ruled against the validity of the dacion en pago executed in favor of the BANK on
the ground that DELTA had earlier relinquished its ownership over Lot 4 in favor of Enriquez via
the Contract to Sell.46

Issue:
Whether the dacion en pago extinguished the loan obligation, such that DELTA has no
more obligations to the BANK.

Held:
The violation of Section 18 renders the mortgage executed by DELTA void therefore the
8 million loans are unsecured. Since the Contract to sell did not transfer ownership of Lot 4 to
Enriquez, said ownership remained with DELTA. DELTA could then validly transfer such
ownership (as it did) to another person (the BANK). However, the transferee BANK is bound by
the Contract to Sell and has to respect Enriquez’s rights thereunder.

Page 385 of 845

BANK is also not entitled to payment of the equivalent value of the lot 4 from DELTA when the
this court ruled in favor of ENRIQUEZ over lot 4. Like in all contracts, the intention of the
parties to the dation in payment is paramount and controlling. The contractual intention
determines whether the property subject of the dation will be considered as the full equivalent of
the debt and will therefore serve as full satisfaction for the debt. "The dation in payment
extinguishes the obligation to the extent of the value of the thing delivered, either as agreed upon
by the parties or as may be proved, unless the parties by agreement, express or implied, or by
their silence, consider the thing as equivalent to the obligation, in which case the obligation is
totally extinguished."

Page 386 of 845

ESTANISLAO REYES vs. SEBASTIANA MARTINEZ ET AL.,
G.R. No. 32226 . DECEMBER 29, 1930.
Facts:
Estanislao Reyes filed an action against the Martinez heirs in which the plaintiff seeks,
among others, to recover five parcels of land, containing approximately one thousand coconut
trees, and to obtain a declaration of ownership in his own favor as against the defendants with
respect to said parcels. This cause of action is founded upon the contract, and the claim by the
plaintiff is to have the five parcels adjudged to him in lieu of another parcel formerly supposed to
contain one thousand trees and described in paragraph 8 of the contract between him and certain
of the Martinez heirs. By this contract Reyes was to be given the parcel described in clause 8, but
in a proviso to said clause, the parties contracting with Reyes agreed to assure to him certain other
land containing an equivalent number of trees in case he should so elect.

Issue:
Whether or not Reyes is entitled to the recovery of ownership of the five parcels of land
subject of this case.

Held:
The prior history of the litigation shows that Reyes elected to take and hold the parcel
described in clause 8, and his right thereto has all along been recognized in the dispositions made
by the court with respect to said land. In our decision in Martinez vs. Graño (51 Phil., 287, 301),
it was a basal assumption that Reyes would obtain the thousand trees referred to; and we are of the
opinion that, from various steps taken in the prior litigation, Reyes must be taken to have elected
to take that particular parcel and he is now estopped from asserting a contrary election to take the
five parcels of land described in paragraph IX of his complaint.

However, the title to the parcel of land elected by Reyes is in the heirs of Inocente
Martinez and it does not appear that they have transferred said title to Reyes. It results therefore
that Reyes now has a claim for damages against the parties signatory to the contract of March 5,
1921, for the value of the aforesaid property. We therefore reach the conclusion that Reyes
should either have the land originally set apart for him under clauses 4 and 8 of the contract, or,
in case his right thereto should fail, he should not be required to pay the judgment for P8,000
which was awarded to the Martinez heirs in Martinez vs. Graño (51 Phil., 287, 302).

Page 387 of 845

AQUINTEY v. SPOUSES TIBONG
G.R. No. 166704, December 20, 2006

Facts:
On May 6, 1999, petitioner Aquintey filed before RTC Baguio, a complaint for sum of
money and damages against respondents. Agrifina alleged that Felicidad secured loans from her
on several occasions at monthly interest rates of 6% to 7%. Despite demands, spouses Tibong
failed to pay their outstanding loans of P773,000,00 exclusive of interests. However, spouses
Tiong alleged that they had executed deeds of assignment in favor of Agrifina amounting to
P546,459 and that their debtors had executed promissory notes in favor of Agrifina. Spouses
insisted that by virtue of these documents, Agrifina became the new collector of their debts.
Agrifina was able to collect the total amount of P301,000 from Felicdad’s debtors. She tried to
collect the balance of Felicidad and when the latter reneged on her promise, Agrifina filed a
complaint in the office of the barangay for the collection of P773,000.00. There was no settlement.
RTC favored Agrifina. Court of Appeals affirmed the decision with modification ordering
defendant to pay the balance of total indebtedness in the amount of P51,341,00 plus 6% per month.

Issue:
Whether or not the deeds of assignment in favor of petitioner has the effect of payment of
the original obligation that would partially extinguish the same

Held:
Substitution of the person of the debtor ay be affected by delegacion. Meaning, the debtor
offers, the creditor accepts a third person who consent of the substitution and assumes the
obligation. It is necessary that the old debtor be released fro the obligation and the third person or
new debtor takes his place in the relation . Without such release, there is no novation. Court of
Appeals correctly found that the respondent’s obligation to pay the balance of their account with
petitioner was extinguished pro tanto by the deeds of credit. CA decision is affirmed with the
modification that the principal amount of the respondents is P33,841.

Page 388 of 845

SONNY LO v. KJS ECO-FORMWORK SYSTEM
G.R. No. 149420,October 8, 2003

Facts:
KJS is engaged in the sale of steel scaffoldings while Lo is a building contractor. On
February 22, 1990, petitioner ordered scaffolding equipments from respondent worth P540,425.80.
He paid a downpayment in the amount of P150,000. The balance was made payable in 10 monthly
installments. Respondent delivered the equipments. Petitioner was able to pay the first two
monthly installments. His business suffered financial difficulties and he was unable to settle his
obligations despite demands. On October 11, 1990, the parties executed a Deed of Assignment
whereby petitioner assigned to respondent his receivables from Jonero Realty. However, Jonero
refused to honor the Dees of Assign,nt because it claimed that petitioner was indebted to it.
Petitioner refused to pay claiming that that his obligation had been extinguished when they
executed the deed of assign,ent. RTC dismissed the complaint on the ground that the assignment
of credit extinguished the obligation. Court of appeals reversed the decision and ordered Lo to pay
the plaintiff KJS with legal interests of 6% per annum until fully paid.

Issue:
Whether or not the Deed of Assignment extinguished the obligation

Held:
An assignment of credit, by virtue of which the owner of the credit, the assignor, by a legal
cause, such as sale, dacion en pago, exchange or donation and without the consent of the debtor
transfers his credit and accessory rights to another, the assignee, who acquires the power to enforce
it against the debtor. Petitioner, as assignor, is bound to warrant the existence and legality of the
credit at the tim of the sale or assignment. When Jonero claimed that it was no longer indebted to
petitioner since the latter had also as unpaid obligation to it, it essentially meant that its obligation
to the petitioner has been extinguished by compensation. Petitioner was found in breach of his
obligation under the Deed of assignment. Court of Appeals decision is affirmed.

Page 389 of 845

ASI CORP and ANTONIO SAN JUAN v. SPOUSES EFREN EVANGELISTA
G.R. No. 158086, February 14, 2008

Facts:
Respondents are engaged in the large-scale business of buying broiler eggs, hatching and
selling them and egg by-products. For incubation and hatchings, respondents availed of the
hatching services of ASJ Corp. They agreed o service fees of 80 centavos per egg. Service fees
were paid upon release. Fro consecutive times the respondents failed to pay the fee until such time
that ASJ retained the chicks demanding full payment from the respondent. ASJ received P15,000
for partial payment but the chicks were still not released. RTC ruling, which was affirmed by the
Court of Appeals holding that ASJ Corp and Antonio San Juan be solidarily liable to the
respondents.

Issue:
Was petitioner’s retention of the chicks and by-products, on account of respondent’s
failure to pay the corresponding fees unjustified?

Held:
Respondents’ offer to partially satisfy their accounts is not enough to extinguish their
obligation. Respondents cannot substitute or apply as their payment the value of the chicks and
by-products they expect to derive because it is necessary that all the debts be paid for the same
kind. The petition is partly granted. The Court of Appeals decision is modified.

Page 390 of 845

NEREO PACULDO v. BONIFACIO REGALADO
G. R. No. 123855, November 20, 2000

Facts:
On December 27, 1990, petitioner Paculdo and respondent Regalado entered into a contract
of lease over a parcel of land for 25 years. For the first 5 years, Paculdo would pay monthly rental
of P450,000 payable within 5 days of each month, with 2% penalty for very month of delay. Aside
from the above lease, petitioner leased 11 other property from respondent. Petitioner failed to pay.
Without the knowledge of petitioner, respondent ortgaged the land subject of the lease contract
including the improvements to Monte de Piedad. On August 12, 1995, and on subsequent dates
thereafter, respondent refused to accepr petitioner’s daily rental payments. Petitioner filed an
action for injunction to enjoin respondent from disturbing his possession while respondent filed a
complaint for ejectment attaching the demand letters. MTC held in favor of the plaintiff which was
affired by the RTC. CA found that the petitioner impliedly consented to respondent’s application
of payment to his obligations, thus, dismissed the petition for lack of merit.

Issue:
Whether petitioner was truly in arrears in the payment of rentals on the subject property at
the time of the filing of the complaint of ejectment

Held:
The lease over the Fairview wet market property is the most onerous among all the
obligations of petitioner to respondent. It was established that the wet market is a going concern
and that petitioner has invested about P35,000,000 in form of improvements, over the property.
Hence, petitioner would stand to lose more if the lease would not proceed. CA decision was based
on a misapprehension of the facts and the law on the application of payment. Hence, the ejectment
case must be dismissed. CA decision is set aside.

Page 391 of 845

CHINA BANKING CORPORATION v. COURT OF APPEALS
G.R. No. 121158, December 5, 1996

Facts:
China Banking Corporation extended several loans to Native West and so Ching, Native
West’s President. Native west executed a promissory note in favor of China Bank. So Ching, with
the marital consent of his wife additionally executed two real estate mortgages over their
properties. The promissory notes matured and despite due demands, neither private respondents
paid. China Bank filed petition for the extrajudicial foreclosure of the mortgaged properties. Upon
receipt of the foreclosure, private respondents filed a complaint before RTC for accounting with
damages and with temporary restraining order.

Issue:
Whether or not the subject additional mortgaged properties of the spouses are not included
in the notice of foreclosure

Held:
It is well-settled that mortgages given to secure future advancements or loans are valid and
legal contracts, and that the amounts named as considerations in said contracts do not limit the
amount for which the mortgage may stand as security if from the four corners of the instrument
the intent to secure future and their indebtedness can be gathered. Supreme Court found that
petitioners are entitled to foreclose the mortgages.

Page 392 of 845

MOBIL OIL PHILIPPINES and CALTEX v. COURT OF APPEALS and
CONTINENTAL CEMENT

G.R.No. 103052,May 23, 1997

Facts:
In May 1982, petitioner Mobil Oil entered into a supply agreement with private respondent
Continental Cement, under which the former would supply the latter’s industrial fuel oil or bunker
fuel oil requirements. MOP extended to CCC an unsecured credit line of P2,000,000 against which
CCC’s purchases of oil could initially be charged. MOP made a total of 67 deliveries of BFO, each
delivery consisting of 20,000 liters to CCC’s factory. CCC discovered that, the supposed BFO was
in fact, pure water. A joint undertaking was initiated. On August 23, 1983, Caltex informed CCC
that it would be the new owner of Mop effective September 1, 1983 and that Caltex would assume
all rights and obligations of MOP under all its existing contracts. CA upheld the findings of the
trial court that the water-contaminated BFO delivered by MOP caused damages to CCC’s rotary
kin.

Issue:
Whether or not petitioners can be held liable for the contaminated BO delivered on the
ground that CFS, as carrier-hauler, was an agent of Mobil

Held:
Court of Appeals correctly ruled that MOP could be held liable for the acts of CFS. The
hauling contract executed by and between MOP and CFS laid out the responsibilities of CFS. The
presumption LAID DOWN IN Article 1523 of the Civil Code is not applicable. The questioned
decision of the court of Appeals is affirmed in toto.

Page 393 of 845

SPS. BONROSTRO vs. SPS. LUNA
G.R. No.172346, July 24, 2013
Facts:
Respondent Luna entered into a Contract to Sell with Bliss Development Corporation
involving a House and Lot. A year after, respondent Luna entered into another Contract to Sell
with petitioner Bonrostro concerning the same property. After the execution of the contract,
Bonrostro immediately took possession of the property. However, except for the initial
downpayment of P200,000, Bonrostro failed to pay any of the stipulated subsequent amortization
payments. So, Petitioner Luna filed a complaint of rescission of contract with the Bonrostros. In
their answer, the Bonrsotros allege that Luna failed to show up during their agreed date of payment
and that they received no reply in their letter expressing their desire to settle such obligation. Hence
they assert that they should not be assessed any interest subsequent to the date of such tender.
Neither should they be ordered to pay interest which covers the amortizations paid by Spouses
Luna to Bliss, because it was Spouses Luna themselves who prevented such fulfillment by
instructing Bliss not to accept amortization payments from anyone.

Issue:
Whether or not Respondent Bonrostro incurred delay in the performance of its obligation,
and is therefore liable to pay damages

Held:
Clearly, the RTC arrived at the above-quoted conclusion based on its mistaken premise
that rescission is applicable to the case. Hence, its determination of whether there was substantial
breach. As may be recalled, however, the CA, in its assailed Decision, found the contract between
the parties as a contract to sell, specifically of a real property on installment basis, and as such
categorically declared rescission to be not the proper remedy. This is considering that in a contract
to sell, payment of the price is a positive suspensive condition, failure of which is not a breach of
contract warranting rescission under Article 1191 of the Civil Code but rather just an event that
prevents the supposed seller from being bound to convey title to the supposed buyer. Also, and as
correctly ruled by the CA, Article 1191 cannot be applied to sales of real property on installment
since they are governed by the Maceda Law.
There being no breach to speak of in case of non-payment of the purchase price in a contract
to sell, as in this case, the RTC’s factual finding that Lourdes was willing and able to pay her
obligation – a conclusion arrived at in connection with the said court’s determination of whether
the non-payment of the purchase price in accordance with the terms of the contract was a
substantial breach warranting rescission – therefore loses significance. The spouses Bonrostro’s
reliance on the said factual finding is thus misplaced. They cannot invoke their readiness and
willingness to pay their obligation on November 24, 1993 as an excuse from being made liable for
interest beyond the said date.

Page 394 of 845

It is very clear that there were no prior notices of consignation (before deposit) and subsequent notices of consignation (after deposit) The Court of Appeals affirmed the RTC’s 26 February 2002 Decision. She constructed the 20 feet by 20 feet floor area house sometime in 1973. Actual consignation (deposit). 5. Cebu City. Held: No. The RTC dismissed the 11 September 1985 complaint and ordered Dalton to vacate the property. In August 1985. In June 1985. January 19. Subsequent notice of consignation. Compliance with the requisites of a valid consignation is mandatory. Requisite Nos. Dayrit sold the property to respondent FGR Realty and Development Corporation (FGR). She transferred her residence near F. et al. 3. DALTON vs.00.811-square meter parcel of land located at the corner of Rama Avenue which Dalton leased portions of the property. The last monthly rental was P69. She vacated the premises when her children got married. Soledad Dalton built a house which she initially used as a dwelling and store space. Failure to comply strictly with any of the requisites will render the consignation void. The requisites of a valid consignation: (1) a debt due. 2. Ramos Public Market. Substantial compliance is not enough. No. The existence of a valid debt. The RTC held that: The requisites of consignation are as follows: 1. Issue: Whether or not the consignation was void. (2) the creditor to whom tender of Page 395 of 845 . Dayrit (Dayrit) owned a 1.FGR REALTY AND DEVELOPMENT CORP G. Prior notice of consignation (before deposit) 4. When defendants refused to accept rent al and demanded vacation of the premises. she consignated [sic] her monthly rentals in court. Dayrit and FGR stopped accepting rental payments because they wanted to terminate the lease agreements with Dalton and Sasam. Valid prior tender. 2011 Facts: Flora R.R. unless tender is excuse [sic]. 172577. 3 and 5 are absent or were not complied with.

payment was made refused without just cause to accept the payment. (3) the person interested in the performance of the obligation was given notice before consignation was made. Page 396 of 845 . operating to impose a duty which may be enforced. The use of the words "shall" and "must" which are imperative. (4) the amount was placed at the disposal of the court. or several persons claimed the same right to collect. positively indicate that all the essential requisites of a valid consignation must be complied with. unknown or incapacitated. The Civil Code Articles expressly and explicitly direct what must be essentially done in order that consignation shall be valid and effectual. or the creditor was absent. or the title of the obligation was lost. and (5) the person interested in the performance of the obligation was given notice after the consignation was made. Substantial compliance is not enough for that would render only a directory construction to the law.

000. otherwise. 172259. restructured it twicw. Benos could redeem the property within 18 months from the date of execution by returning the contract price. which was affirmed by the Court of Appeals. Thus. there was no full and complete payment of the contract price which gives them the right to rescind. Page 397 of 845 . Hence. even before the filing of the consignation case. SPOUSES GREGORIO LAWILAO G. the sale would become irrevocable. SPOUSES JAIME BENOS v. No. Lawilao filed for consignation against the bank and deposited the amount of P159. a son of Benos and Lawilao paid the bankl but the bank refused.000. records show that Lawilao filed the petition for consignation against the bank in Civil Case without notifying the Benos. 2006 Facts: On February 11. Lawilao failed to prove their offer to pay the balance.00. as far as the Benos are concerned. On August 14. eventually the loan become due and demandable. that the Pacto de Retro Sale is rescinded and petitioner are ordered to return the amount of P150. Lawilao took possession of the property.R. Petition is granted.000. Under the contract. RTC declared Lawilao of the ownership of the subject property. petitioner-spouses Benos and respondent Lawilao executed a Pacto de Retro Sale where Benos sold their lot and the building erected thereon for P300. Issue: Whether or not the contract of Pacto de Retro Sale be rescinded by the petitioner Held: In the instant case. Court of Appeals decision is reversed and set aside.1999. 2000. one-half of which to be paid in cash to the Benos and the other half to be paid to the bank to pay off the loans of the Benos which was secured by the same lot and building. December 5. After paying the P150.000 to respondents. Lawilao never notified the Benos.

Private respondent’s act of cancelling the contract to sell was not done arbitrarily. October 24. 8.333. whereby to sell 6 subdivision lots. Except for lot no.4.5. 1997 Facts: Private respondent is the registered owner of Mar-ick Subdivision which entered into 6 agreements with petitioner. All the lots measure 240 sq each.20. After series of negotiations. 112733. It had been reduced to a mere case of an owner claiming possession of its property that had long been illegally withheld from it by another. P480 as down payment. 3. Private respondent filed a suit against the petitioner. Petitioner failed to perform its obligation. they agreed to the purchase price of P7. Issue: Whether or not there was a perfected and enforceable contracts of sale on October 11. Lot nos. Because the contracts to sell had long been cancelled when private respondent fled the accion publiciana de possession. The balance shall be payable n 120 equal monthly installments of P57.20. Page 398 of 845 . hence. which was affirmed in toto by the CA. for 10 years. Checks issued in favor of the private respondent were received but not encashed.1983 which modified the earlier contracts to sell which had not been validly rescinded Held: It is apropos to stress that the agreements are contracts to sell and not contract of sale. COURT OF APPEALS and MAR- ICK INVESTENT G. No. RTC directed petitioner to return the lots. rescission either by judicial action or notarial act is not applicable.6 and 7 similarly stipulate that petitioner agreed to pay for each lot P7. With lot no. there was no more installment buyer and seller relationship to speak of.730 with a down payment of P506 and equal installments of P60. PEOPLE’S INDUSTRIAL AND COMERCIAL v.11 every 30th of the month. the parties agreed to enter into a new contract to sell 8 lots. 8.R.

1997 Facts: Petitioner Eternal Gardens and private NPUM entered into a Land Development Agreement.065. EG was to develop a parcel of land owned by NPUM into a memorial park. Page 399 of 845 . Under the agreement. It is tantamount to a forbearance of money. December 9. the right is waived. EG was required to deposit the accruing interests with a reputable commercial bank “ to avoid possible wastage of funds” when the case was given due course. The case was remanded to the CA for proper determination and dispositions. Yet.235. hence. CA correctly held EG liable for interest of 12%.195. Issue: Whether or not the petitioner is liable for interest despite the land dispute Held: Even during the pendency of the land dispute cases. COURT OF APPEALS and 7TH DAY ADVENTIST G. 2 claimants of the land surfaced but were dismissed.5 million initial installment mentioned in the Deed of Absolute Sale. EG hedged in depository the amounts due and made obvious attempts to stay payment by filing sundry motions and pleadings.R. CA required EG to produce documents necessary for accounting but failed to do so.451. The P1. Later. shall be deducted out of the proceeds from the First Party’s 40% at the end of the 5 th year.00 as principal and P167. CA directed EG to pay private respondent the amounts of P167. 124554. ETERNAL GARDENS v. No.00 interest. Subsequent payment should be changed against what is due to the first Party under the Land Development agreement.

R. The otherwise inconsequential sale became controversial when two (2) of the three (3) parcels were again sold on 24 December 1958 by Francisco Tazal for P420. first. a declaration by the court of the validity of the consignation. to notify respondents of the intention to deposit the amount with the court. (d) the amount due was placed at the disposal of the court. to show the acceptance by the creditor of the amount deposited as full settlement of the obligation. In the instant case. Issue: Was there a valid consignation and tender of payment made in the instant case? Held: In order that consignation may be effective the debtor must show that (a) there was a debt due. In the instant case. and. with right to repurchase within two (2) years from date thereof by paying to the vendee the purchase price and all expenses incident to their reconveyance.No.00 to respondents’ predecessor-in-interest. Consignation and tender of payment must not be encumbered by conditions if they are to produce the intended result of fulfilling the obligation. After the sale the vendee a retro took physical possession of the properties and paid the taxes thereon. 150193 February 20.00 was conditional and void as it was predicated upon the argument of Francisco Tazal that he was paying a debt which he could do at any time allegedly because the 1 September 1957 transaction was a contract of equitable mortgage and not a deed of sale with right to repurchase Page 400 of 845 . second. The failure of petitioners to comply with any of these requirements rendered the consignation ineffective. to offer a valid and unconditional tender of payment.00 in favor of petitioners’ predecessor-in-interest Blas Rayos without first availing of his right to repurchase the properties. one Mamerto Reyes. or in the alternative. the tender of payment of P724. (e) after the consignation had been made the person interested was notified thereof. (b) the consignation of the obligation had been made because the creditor to whom a valid tender of payment was made refused to accept it. petitioners failed. RAYOS V REYES G. (c) previous notice of the consignation had been given to the person interested in the performance of the obligation. and third. 2003 Facts: Three parcels were formerly owned by the spouses Francisco and Asuncion Tazal who on 1 September 1957 sold them for P724.

R. in whole or in part. . so as to substitute its own terms for those covenanted by the parties themselves. the obligor may also be released therefrom. the courts cannot even in equity grant the relief sought. OCCENA V CA G. filed a complaint for modification of the terms and conditions of its subdivision contract with petitioners (landowners of a 55. and will actually result in the unjust and intolerable exposure of plaintiff to implacable losses. will cause an inequitous distribution of proceeds from the sales of subdivided lots in manifest contravention of the original essence of the agreement. modify or revise the contract or to fix the division of shares between the parties as contractually stipulated with the force of law between the parties. 44349. Inc.No. will result in situation where defendants would be unjustly enriched at the expense of the plaintiff. 1267. That further performance by the plaintiff under the contract.330 square meter parcel of land in Davao City). The cited article does not grant the courts this authority to remake. Page 401 of 845 . unimagined and not within the remotest contemplation of the parties at the time said agreement was entered into and to such a degree that the conditions and factors which formed the original basis of said contract. making the following allegations: "That due to the increase in price of oil and its derivatives and the concomitant worldwide spiralling of prices. 1976 Facts: On February 25. have been totally changed. Annex 'A'. by fixing the proper shares that should pertain to the herein parties out of the gross proceeds from the sales of subdivided lots of subject subdivision". Issue: Whether or not provisions of art 1267 of the new civil code is applicable in the case at a bar Held: ART. Under the particular allegations of respondent's complaint and the circumstances therein averred." Respondent's complaint seeks not release from the subdivision contract but that the court "render judgment modifying the terms and conditions of the contract . . Respondent's complaints for modification of contract manifestly has no basis in law and therefore states no cause of action. 1975 private respondent Tropical Homes. the cost of development has risen to levels which are unanticipated. October 29. of all commodities including basis raw materials required for such development work. Annex 'A'. which are not within the control of plaintiff. When the service has become so difficult as to be manifestly beyond the contemplation of the parties.

and used exclusively for. noise and pollution are hardly conducive to the health. of the Highway Hills Subdivision. 5 and 6 are located. the said vendees transferred their rights and interests over the aforesaid lots in favor of one Emma Chavez. that while non-impairment of contracts is constitutionally guaranteed. but which defendant-appellee claims could also be devoted to.R. Judicial notice may be taken of the conditions prevailing in the area. in passing the subject resolution. peace. 5 and 6. the municipality of Mandaluyong. 27 s-1960 can nullify or supersede the contractual obligations assumed by defendant-appellee. situated at Mandaluyong. defendant-appellee having filed building and planning permit applications with the Municipality of Mandaluyong. 1963. On or about May 5. Resolution No. 24670 December 14. good order and general welfare of the people in the locality. Held: It should be stressed. if not perfectly. plaintiff. to be devoted to banking purposes. and it had accordingly obtained building and planning permits to proceed with the construction. Rizal. 1952. Upon completion of payment of the purchase price. and Augusto Padilla y Angeles and Natividad Angeles. the plaintiff executed the corresponding deeds of sale in favor of Emma Chavez. 27. as vendor. since it has to be reconciled with the legitimate exercise of police power. On July 19. industrial and commercial complexes have flourished about the place. justified under the circumstances. was reasonably. safety or welfare of the residents in its route. Block 31. especially where Lots Nos. 1979 Facts: On March 4. EDSA from Shaw Boulevard to the Pasig River as an industrial and commercial zone. the rule is not absolute. a main traffic artery which runs through several cities and municipalities in the Metro Manila area. supports an endless stream of traffic and the resulting activity. residential purposes. The following day. ORTIGAS V FEATI BANK G. Rizal in the exercise of police power to safeguard or promote the health. contending that the building was being constructed in accordance with the zoning regulations.No. known as Lots Nos. Issue: Whether the Resolution No. plaintiff-appellant demanded in writing that defendant-appellee stop the construction of the commercial building on the said lots. through its Municipal Council. s-1960 declaring the western part of Highway 54. The latter refused to comply with the demand. was obviously passed by the Municipal Council of Mandaluyong. defendant-appellee began laying the foundation and commenced the construction of a building on Lots Nos. The lots themselves not only front the highway. as vendees. Page 402 of 845 . 1962. safety. 5 and 6. EDSA. Having been expressly granted the power to adopt zoning and subdivision ordinances or regulations. entered into separate agreements of sale on installments over two parcels of land.

April 7. the parties entered into a preliminary agreement dated July 1. the pertinent portion of which states that the lease shall not become binding upon us unless and until the government agencies concerned shall authorize. permit or license us to open and maintain our business at the proposed Lease Premises. Court of Appeals however. Makati City for a period of three years (1999-2002) on which Food Fest intended to operate a Kentucky Fried Chicken carry out branch.7 rendered judgment in favor of So. declared that Food Fest’s obligation to pay rent was not extinguished upon its failure to secure permits to operate. No. however. by its claim. 2006. 1999. The parties to the contract must be presumed to have assumed the risks of Page 403 of 845 . While Food Fest was able to secure the necessary licenses and permits for the year 1999. INC. This article. Food Fest’s application for renewal of barangay business clearance was "held in abeyance until further study of [its] kitchen facilities. The MeTC. Food Fest. the Court is not persuaded. G." As the barangay business clearance is a prerequisite to the processing of other permits. Fearing further business losses. FOOD FEST LAND.9 reversed the MeTC Decision. licenses and authority by the city government. 2010 Facts: Food Fest Land Inc. which enunciates the doctrine of unforeseen events. which would endanger the security of contractual relations. So filed a complaint for ejectment and damages against Food Fest before the Metropolitan Trial Court (MeTC) of Makati City. On April 26. did not accede and instead offered to help Food Fest secure authorization from the barangay. Food Fest was unable to operate. (Food Fest) entered into a September 14. an absolute application of the principle of rebus sic stantibus.R. SO vs. DANIEL T. communicated its intent to terminate the lease contract to So who. 1999 Contract of Lease1 with Daniel T. 183628. As for Food Fest’s invocation of the principle of rebus sic stantibus as enunciated in Article 1267 of the Civil Code to render the lease contract functus officio. Issue: Whether or not the principle of rebus sic stantibus is applicable to the instant case. it failed to commence business operations. and consequently release it from responsibility to pay rentals. So (So) over a commercial space in San Antonio Village. 2001. by Decision of July 4.The Regional Trial Court (RTC). by Decision of November 30. 2005. Before forging the lease contract. For the year 2000. is not. Held: No. however.

It is. Its failure to renew these permits. Page 404 of 845 . does not. nor can it be construed as an unforeseen event to warrant the application of Article 1267. licenses and authority for the succeeding year. therefore. suffice to declare the lease functus officio.unfavorable developments. however.19 Food Fest was able to secure the permits. only in absolutely exceptional changes of circumstances that equity demands assistance for the debtor. licenses and authority to operate when the lease contract was executed.

124221 August 4. utilizing as demand requires. Nowhere in the LOI and Admin.. sedans. Sometime in 1972. As highest bidder. Subic Bay. SEIZURE AND CONTROL OF ALL PRIVATELY OWNED NEWSPAPERS. for permits to possess. with the advent of martial law. not more than one year. in Olongapo. The Administrative Circular merely ordered the Radio Control Office to suspend the "acceptance and processing . MAGAT V CA G. 2000 Facts: Private respondent Santiago A. of applications. four-door. MAGAZINES. meter controlled. The LOI and Administrative Circular did not render "radios and transceivers" illegal per se... 1972. The LOI and Administrative Circular did not render the transceivers outside the commerce of man. Guerrero was to "provide radio-controlled taxi service within the U.[42] Transceivers were not prohibited but merely regulated goods. RADIO AND TELEVISION FACILITIES AND ALL OTHERMEDIA OF COMMUNICATION... Marcos issued Letter of Instruction No. On September 22. 160 operational taxis consisting of four wheel.R. Guerrero Transport Services won a bid for the operation of a fleet of taxicabs within the Subic Naval Base. own. Page 405 of 845 . 1. possession and importation of the radio transmitters and transceivers was legal provided one had the necessary license for it. purchase and sell radio transmitters and transceivers. President Ferdinand E. radio controlled.. Held: The contract was not void ab initio. They were valid objects of the contract.No. Naval Base. a single proprietorship. four passenger."[41] Therefore. Issue: Whether the contract between Victorino and Guerrero for the purchase of radio transceivers was void. transfer. Guerrero (hereinafter referred to as "Guerrero") was President and Chairman of[4] "Guerrero Transport Services"... S.. Circular is there an express ban on the importation of transceivers.

The principle of rebus sic stantibus neither fits in Page 406 of 845 . difficulties. The obligation to pay rentals or deliver the thing in a contract oflease falls within the prestation "to give"." An obligation "to do" includes all kinds of work or service. Besides. it is not covered within the scope of Article 1266.No. while an obligation "to give" is a prestation which consists in the delivery of a movable or an immovable thing in order to create a real right. It then expressed its intention to terminate the contract. which reads: "The debtor in obligations to do shall also be released when the prestation becomes legally or physically impossible without the fault of the obligor. petitioner obtained from the Ministry of Human Settlements a Temporary Use Permit 2 for the proposed rock crushing project. On 16 January 1986. 1997 Facts: On 7 January 1986. The permit was to be valid for two years unless sooner revoked by the Ministry. They insisted on the performance of petitioner's obligation and reiterated their demand for the payment of the first annual rental. payment of rental would commence on the date of the issuance of an industrial clearance by the Ministry of Human Settlements. or for the use of the recipient. Issue: Whether provisions of Article 1266 and the principle of rebus sic stantibus is applicable in the case at bar? Held: Article 1266 of the Civil Code. however." Private respondents refused to accede to petitioner's request for the pretermination of the lease contract. or for its simple possession. In its reply-letter. and not from the date of signing of the contract. since it is applicable only to obligations "to do." and not to obligations "to give. successfully take refuge in the said article. or in order to return it to its owner. At any rate. petitioner failed to state specifically the circumstances brought about by "the abrupt change in the political climate in the country" except the alleged prevailing uncertainties in government policies on infrastructure projects. as well as technical. as it had decided to cancel or discontinue with the rock crushing project "due to financial. private respondents wrote petitioner requesting payment of the first annual rental in the amount of P240. PNCC V CA G.000 which was due and payable upon the execution of the contract. They also assured the latter that they had already stopped considering the proposals of other aggregates plants to lease the property because of the existing contract with petitioner. petitioner argued that under paragraph 1 of the lease contract. hence. 118696 May 5.R." Petitioner cannot. the unforeseen event and causes mentioned by petitioner are not the legal or physical impossibilities contemplated in the said article.

the contract also ceases to exist. the parties stipulate in the light of certain prevailing conditions. Page 407 of 845 . and once these conditions cease to exist.with the facts of the case. Under this theory.

89-1642 against petitioners for reformation of the contract with damages. "A") for the use by petitioners in the operation of its telephone service the electric light posts of private respondent in Naga City. No. 9 the term "service" should be understood as referring to the "performance" of the obligation. 107112 February 24. per month. private respondent filed on January 2. a bare reading of this article reveals that it is not a requirement thereunder that the contract be for future service with future unusual change. under this theory. the parties entered into a contract (Exh. Furthermore. the telephone cables strung by them thereon have become much heavier with the increase in the volume of their subscribers. 1994 Facts: Petitioner Naga Telephone Co. that it is not in conformity with the guidelines of the National Electrification Administration (NEA) which direct that the reasonable compensation for the use of the posts is P10. Inc. which is the service contemplated in said article. This is said to be based on the discredited theory of rebus sic stantibus in public international law. the obligation of private respondent consists in allowing petitioners to use its posts in Naga City. In consideration therefor. and once these conditions cease to exist the contract also ceases to exist. In the present case. worsened by the fact that their linemen bore holes through the posts at which points those posts were broken during typhoons.. 1989 with the Regional Trial Court of Naga City (Br.R. free of charge. the parties stipulate in the light of certain prevailing conditions. 10 Article 1267 states in our law the doctrine of unforseen events. NATELCO V CA G. Tolentino. on the ground that it is too one-sided in favor of petitioners. Issue: Whether respondent court erred in making a contract for the parties by invoking Article 1267 of the New Civil Code. Inc. that after eleven (11) years of petitioners' use of the posts.C. Considering practical needs and the demands of equity Page 408 of 845 . Taking into consideration the rationale behind this provision. (NATELCO) is a telephone company rendering local as well as long distance service in Naga City while private respondent Camarines Sur II Electric Cooperative. (CASURECO II) is a private corporation established for the purpose of operating an electric power service in the same city. 1977. Held: Article 1267 speaks of "service" which has become so difficult. 28) C. On November 1.No. According to Senator Arturo M. ten (10) telephone connections for the use by private respondent After the contract had been enforced for over ten (10) years. petitioners agreed to install.00 per post.

and good faith. the disappearance of the basis of a contract gives rise to a right to relief in favor of the party prejudiced. Page 409 of 845 .

Zamboanga del Sur Branch (Ipil Branch) went into a massive information campaign offering the program to cooperatives. The Ipil Branch approved the applications of four cooperatives. as when the debtor becomes solvent.One of the conditions stipulated in the CFP is that prior to the release of the loan. 1996 and Notices of Disallowance Nos. and the cooperative. If in the future. In turn. In general banking practice. Three checks were issued by the Ipil Branch to REMAD to serve as advanced payment for the cattle. As alleged by petitioners. Remad Livestock Corporation (REMAD). income will be credited by the same amount of increase in the Page 410 of 845 . the write-off method is used when an account is determined to be uncollectible and an uncollectible expense is recorded in the books of account.000. In post audit. Petitioners were made liable for the amount Issue: Whether or not the writing off of a loan is considered as condonation Held: This Court rules that writing-off a loan does not equate to a condonation or release of a debt by the creditor. the use of write-off is a task that can help a company maintain a more accurate inventory of the worth of its current assets. 95-005 dated December 27. Pursuant thereto. 2011 Facts: The Land Bank of the Philippines (Land Bank) was engaged in a cattle-financing program wherein loans were granted to various cooperatives. the terms of the CFP allowed for pre-payments or advancement of the payments prior to the delivery of the cattle by the supplier REMAD but such was not stipulated in the contracts.Cooperatives who wish to avail of a loan under the program must fill up a Credit Facility Proposal (CFP) which will be reviewed by the Ipil Branch.00 under CSB No. the debt appears to be collectible. REMAD. however. shall have been signed. the Land Bank Auditor disallowed the amount of P3. COA FEBRUARY 8. REYNA V. Land Bank's Ipil.As an accounting strategy. failed to supply the cattle on the dates agreed upon. 96-014 to 96-019 in view of the non-delivery of the cattle.115. then the books will be adjusted to reflect the amount to be collected as an asset. Also made as the basis of the disallowance was the fact that advanced payment was made in violation of bank policies and COA rules and regulations. a Memorandum of Agreement (MOA) between the supplier of the cattle.

Neither is it a condonation. since in condonation gratuity on the part of the obligee and acceptance by the obligor are required.accounts receivable. It is not a compromise of liability. In making the write-off. Page 411 of 845 . Write-off is not one of the legal grounds for extinguishing an obligation under the Civil Code. only the creditor takes action by removing the uncollectible account from its books even without the approval or participation of the debtor.

NCC). petitioner applied for and was granted several financial accommodations amounting to P1. The loans were evidence and secured by four (4) promissory notes. Issue: Whether or not petitioner has indeed paid in full its obligation to respondent bank Held: Art. 1994 Facts: Sometime in 1979. Unable to settle its obligation in full. Upon a clear perception that Associated's record keeping has been less than exemplary .No. petitioner requested for. or on December 12.057. a real estate mortgage covering three parcels of land and a chattel mortgage over petitioner's stock and inventories. a restructuring of the remaining indebtedness which then amounted to P1. Associated Bank demanded from Trans-Pacific payment of the amount of P492. competent showing that the principal has been paid. 1271. .300. Subsequently. 1985." The surrender and return to plaintiffs of the promissory notes evidencing the consolidated obligation as restructured. 1271. respondent bank returned the duplicate original copies of the three promissory notes to Trans-Pacific with the word "PAID" stamped thereon. NCC).100. made voluntarily by the creditor to the debtor. . The mortgaged parcels of land were substituted by another mortgage covering two other parcels of land and a chattel mortgage on petitioner's stock inventory. Page 412 of 845 . TRANS PACIFIC V CA G. According to the bank. and has not been otherwise overcome. 109172 August 19. Indeed. applicable law is supportive of a finding that in interest bearing obligations-as is the case here.00. as all the previous payments made were applied to penalties and interests.614. Conversely. The delivery of a private document evidencing a credit.00 representing accrued interest on PN No.20. The released parcels of land were then sold and the proceeds amounting to P1. were turned over to the bank and applied to Trans-Pacific's restructured loan.R. The presumption is fortified by a showing that said promissory notes all bear the stamp "PAID". according to petitioner.000.386. implies the renunciation of the action which the former had against the latter.500. TL-9077-82. . and was granted by respondent bank. payment of principal (sic) shall not be deemed to have been made until the interests have been covered (Art. militates against postured entitlement to unpaid interests. Despite the return of the notes. a proffer of bank copies of the promissory notes without the "PAID" stamps thereon does not impress the Court as sufficient to overcome presumed remission of the obligation vis-a-vis the return of said promissory notes.00 by respondent Associated Bank. the promissory notes were erroneously released. 1253. produces a legal presumption that Associated had thereby renounced its actionable claim against plaintiffs (Art.

Defendant acknowledged this claim and prayed that judgment be rendered accordingly.43 be paid to the plaintiff from the funds under the control of the receiver "and the balance of P91. Held: Examining the terms the court finds that the stipulation limits the right of the plaintiff to ask for the execution of the judgment to whatever share Fred M. Harden may still have in the conjugal partnership between him and his wife after the final liquidation and partition thereof. filed an answer in intervention claiming that the amount sought by the plaintiff was exorbitant and prayed that it be reduced to 10 per cent of the rebate. an amicable settlement was concluded by the plaintiff and the intervenor whereby it was agreed that the sum of P22. DALUPAN V HARDEN G. de Harden. which represents 50 per cent of the reduction plaintiff was able to secure from the Collector of Internal Revenue in the amount of unpaid taxes claimed to be due from the defendant.R. It refers to the over-all and final liquidation of the partnership.837.No. R-59634 and the wife of the defendant. In the meantime. 1948. Esperanza P. Harden from whatever share he may still have in the conjugal partnership between him and Esperanza P. L-3975 November 27.767.069.17. with interest thereon from the filing of the complaint. Page 413 of 845 . it is clear that the writ of execution asked for by the plaintiff on the two checks is premature. de Harden. and the opposition of the receiver and of the wife on the other. Issue: Whether or not the writ of execution asked for by the plaintiff on the two checks is premature. The execution of the judgment is premised upon a condition precedent. plaintiff filed an action against the defendant for the collection of P113. Such being the stipulation of the parties which was sanctioned and embodied by the Court in its decision. By reason of the acquiescence of the defendant to the claim on one hand. the receiver in the liquidation case No. 1951 Facts: On August 26.74 shall be charged exclusively against the defendant Fred M. Note that the condition does not refer to the liquidation of a particular property of the partnership. which is the final liquidation and partition of the conjugal partnership.

of a private instrument proving a credit.No. and furthermore alleged that the obligation which the plaintiff endeavored to compel him to fulfill was already extinguished. In the present case. are owing for professional medical services rendered by the plaintiff to a daughter of the defendant from March 10 to July 15. according to the complaint. notwithstanding the demands therefor made upon him by the plaintiff. The defendant denied the allegations of the complaint. in order that such a presumption may be taken into account. 1913. inasmuch as when the plaintiff sent the receipt to the defendant for the purpose of collecting his fee. it was not his intention that that document should remain in the possession of the defendant if the latter did not forthwith pay the amount specified therein. In the case at bar the trial court correctly held that there was sufficient evidence to the contrary. that the evidence of the obligation be delivered up to the debtor and that the delivery of the instrument proving the credit be made voluntarily by the creditor to the debtor. 1916 Facts: These proceedings were brought to recover from the defendant the sum of P2. it will be presumed that the creditor delivered it of his own free will. amount of the fees.000. in view of the preponderance thereof in favor of the plaint iff and of the circumstances connected with the defendant's possession of said receipt Exhibit 1. Furthermore.R. which fees the defendant refused to pay. 9806. it cannot be said that these circumstances concurred. Page 414 of 845 . and article 1189 prescribes that whenever the private instrument which evidences the debt is in the possession of the debtor. January 19. LOPEZ V TAMBUNTING G. But the legal presumption established by the foregoing provisions of law cannot stand if sufficient proof is adduced against it. unless the contrary is proven. as stated in the laws cited. it is necessary. implies the renunciation of the right of action against the debtor. Issue: Whether or not implied condonation can be legally pressumed in the instant case? Held: It is true that number 8 of section 334 of the Code of Civil Procedure provides as a legal presumption "that an obligation delivered up to the debtor has been paid. which." Article 1188 of the Civil Code also provides that the voluntary surrender by a creditor to his debtor.

1920. If Messrs. executed a mortgage in favor of the plaintiffs on the same rights and titles that they had bought and also upon what they had purchased from Mr. on January 8. In other words. Whitaker and Venancio Concepcion mortgaged unto the plaintiffs what they had bought from the plaintiffs and also what they had bought from Salvador Serra. C. de Luzuriaga. Eusebio R.15. rights. whereby he sold to the latter the estate and central known as "Palma" with its running business.722.R. including the sugar plantation of the harvest year of 1920 to 1921. Salvador Serra. Whitatker and Venancio Concepcion were only those they had over the other half of the railroad line. it was undoubtedly the one-half thereof pertaining to Mr. real and personal properties. Whitaker bought from the plaintiffs the one half of the railroad line pertaining to the latter executing therefor the document Exhibit 5. C. The price of this sale was P237. as already stated. to secure the payment of the price. Therefore. and Eusebio R. Phil C. Afterwards. the herein defendant. Phil. C. since there was no novation of the contract between the plaintiffs and Page 415 of 845 . 1921. 1920. Phil. Venancio Concepcion and Phil. Salvador Serra. C. marked Exhibit A. C. Before the delivery to the purchasers of the hacienda thus sold. Venancio Concepcion and Phil. de Luzuriaga renounced all his rights under the contract of January 29. The original capital stipulated was P150. January 29. regarding the railroad line. in favor of Messrs.No. Whitaker. Salvador Serra. It was covenanted that the parties should pay this amount in equal parts and the plaintiffs were entrusted with the administration of the partnership. C. ESTATE OF MOTA V SERRA G. Whitaker and Venancio Concepcion had purchased something from Mr. Whitaker. 1925 Facts: On February 1. for the construction and exploitation of a railroad line from the "San Isidro" and "Palma" centrals to the place known as "Nandong". This clearly shows that the rights and titles transferred by the plaintiffs to Phil. Phil. covering all the property of the vendor. 22825 February 14. as well as all the improvements. excluding any amount which the defendant might be owing to the plaintiffs. machineries and buildings. Issue: Whether or not there was confusion of the rights of the creditor and debtor Held: The purchasers. the defendant entered into a contract of sale with Venancio Concepcion. choses in action and interests. plaintiffs and defendant entered into a contract of partnership.000. Whitaker and Venancio Concepcion. 1919.

evidenced by Exhibit 5. C. the allegation that the obligation of the defendant became extinguished by the merger of the rights of creditor and debtor by the purchase of Messrs.the defendant. Phil. Whitaker and Venancio Concepcion is wholly untenable. as regards the obligation of the latter to pay the former one-half of the cost of the construction of the said railroad line. and since the plaintiffs did not include in the sale. Page 416 of 845 . the credit that they had against the defendant.

Yusingco Hermanos. to the fulfillment of the obligation for the security of which it was created (article 1876. Yu Seguioc mortgaged to the plaintiff Yek Tong Lin Fire & Marine Insurance Co. thereby giving rise to civil case No. mortgage and sell his properties. 43608. 1937 Facts: Defendant Pelagio Yusingco was the owner of the steamship Yusingco and. but it so happens that it can not take such steps now because it was the purchaser of the steamship Yusingco at public auction. because he was bound thereto by reason of the bond filed by him. the only right left to the plaintiff was to collect its mortgage credit from the purchaser thereof at public auction. inasmuch as the rule is that a mortgage directly and immediately subjects the property on which it is imposed.R. Pelagio Yusingco and A.No. on March 9. which was at the rate of 9 per cent per annum. 1927. Civil code). vs. plaintiff. and it was so with full knowledge that it had a mortgage credit on said vessel. 1932. the payment then made by him having amounted to P8. he executed. the defendant and appellant Vicente Madrigal had to make payment thereof with the stipulated interest thereon.60. When neither A. with the approval of the Bureau of Customs. Obligations are Page 417 of 845 .777. as such. the steamship Yusingco needed some repairs which were made by the Earnshaw Docks & Honolulu Iron Works. on November 19. lease. Yusingco Hermanos nor Pelagio Yusingco could pay said sum to the Earnshaw Docks & Honolulu Iron Works. YEK TON LIN V YUSINGCO G. including his vessels or steamship.244. whoever its possessor may be.. July 20. 41654 for the execution of the judgment rendered in favor of Vicente Madrigal. Yusingco Hermanos to compel them to reimburse. defendants" which resulted in a judgment favorable to him and adverse to the Yusingcos. One year and some months later. entitled "Vicente Madrigal. Issue: Whether or not obligations were extinguished by reason of the merger of the rights of the debt or and creditor Held: After the steamship Yusingco had been sold by virtue of the judicial writ issued in civil case No. the steamship Yusingco belonging to the defendant. Ltd. he brought an action against his codefendant Pelagio Yusingco and A. When said defendant discovered that he was not to be reimbursed for the repairs made on the steamship Yusingco. The repairs were made upon the guaranty of the defendant and appellant Vicente Madrigal at a cost of P8.. a power of attorney in favor of Yu Seguioc to administer.66. 41654 of the Court of First Instance of Manila.

extinguished by the merger of the rights of the creditor and debtor (articles 1156 and 1192. Civil Code). Page 418 of 845 .

the conclusion that he is in truth indebted to another cannot be definitely and finally pronounced.00. Absent.295. 1982. Inc.V.130. 1982. On November 28. respondent Unisphere’s Unit 301 was allegedly robbed of various items valued at P6. The incident was reported to petitioner CCC.V. It is a claim which has been formally passed upon by the courts or quasi-judicial bodies to which it can in law be submitted and has been declared to be a debt. another robbery allegedly occurred at Unit 301 where the items carted away were valued at P6.00. bringing the total value of items lost to P12. (Art.67.142. On January 28. 120236 July 20. (hereinafter referred to as Unisphere) is the owner/occupant of Unit 301 of said condominium.G. A claim. Cristina Condominium Corporation holds title to all common areas of Cristina Condominium and is in charge of managing.67 against respondent Unisphere. 1981. REALTY V CA G. There can be no doubt that Unisphere is indebted to the Corporation for its unpaid monthly dues in the amount of P13. E. Issue: Whether or not set-off or compensation has taken place in the instant case.142. Respondent Unisphere International. maintaining and administering the condominium’s common areas and providing for the building’s security. any such categorical admission by an obligor or final adjudication.00.V. is a debt in embryo. Page 419 of 845 . petitioners E. respondent Unisphere demanded compensation and reimbursement from petitioner CCC for the losses incurred as a result of the robbery. are creditors and debtors of each other. Realty and CCC jointly filed a petition with the Securities and Exchange Commission (SEC) for the collection of the unpaid monthly dues in the amount of P13. no matter how convinced he may be from the examination of the pertinent records of the validity of that conclusion the indebtedness must be one that is admitted by the alleged debtor or pronounced by final judgment of a competent court or in this case by the Commission. On July 25. It is mere evidence of a debt and must pass thru the process prescribed by law before it develops into what is properly called a debt.No. Realty Development Corporation is the owner/developer of a seven- storey condominium building known as Cristina Condominium. Unless admitted by a debtor himself.R. A debt is an amount actually ascertained.G. 1278). This is admitted. On October 5. 1999 Facts: Petitioner E. A distinction must be made between a debt and a mere claim.165. 1987. This incident was likewise reported to petitioner CCC. however. on the other hand. no compensation or off-set can take place. Held: Compensation or offset under the New Civil Code takes place only when two persons or entities in their own rights.G.

September 1.51 MT of sulfuric acid on board. 108129. 1989. dated December 17. five days prior to the shipment date. Petitioner as buyer committed to secure the means of transport to pick-up the purchases from private respondent's loadports. Per agreement. with a capacity of approximately 500 MT. 28-29. we quote with approval the findings of the appellate court. addressed letters to private respondent. except that: (2) Where actual delivery has been delayed through the fault of either the buyer or seller the goods are at the risk of the party at fault. M/T Sultan Kayumanggi docked at Sangi. the agreement provided that the buyer shall pay its purchases in equivalent Philippine currency value. Later. one hundred metric tons (100 MT) of sulfuric acid should be taken from Basay.6 [TSN. the risk of loss is borne by the seller who is still the owner. attested to these occurrences. Again. the vessel tilted. pp. 1986 and January 2. is not applicable in this case because petitioner had incurred delay in the performance of its obligation. Article 1504 of the Civil Code clearly states: "Unless otherwise agreed. on a date not specified in the record. the general rule that before delivery. concerning additional orders of sulfuric acid to replace its sunken purchases. the goods remain at the seller's risk until the ownership therein is transferred to the buyer. while the remaining four hundred metric tons (400 MT) should be retrieved from Sangi. (Aerospace) purchased five hundred (500) metric tons of sulfuric acid from private respondent Philippine Phosphate Fertilizer Corporation (Philphos). namely sulfuric acid. petitioner Aerospace Industries.R. 1987. M/T Don Victor. thus: The defendant [herein private respondent] was not remiss in reminding the plaintiff that it would have to bear the said expenses for failure to lift the commodity for an unreasonable length of time. M/T Sultan Kayumanggi sank with a total of 227. AEROSPACE CHEMICAL V CA G.But Page 420 of 845 . Cebu." On this score. 1986. acting for the petitioner. On December 18. 1987. but withdrew only 157. be on seller's account pursuant to Article 1504 of the Civil Code? Held: Petitioner tries to exempt itself from paying rental expenses and other damages by arguing that expenses for the preservation of fungible goods must be assumed by the seller. 1999 Facts: On June 27. Petitioner chartered another vessel. Inc. Further loading was aborted. Initially set beginning July 1986. but when the ownership therein is transferred to the buyer the goods are at the buyer's risk whether actual delivery has been made or not.51 MT of sulfuric acid. No. according to petitioner. Issue: Should expenses for the storage and preservation of the purchased fungible goods. Two survey reports conducted by the Societe Generale de Surveillance (SGS) Far East Limited. Cebu. Negros Oriental storage tank. September 23. However. 1986. Rental expenses of storing sulfuric acid should be at private respondent's account until ownership is transferred.] On January 26 and March 20. Melecio Hernandez.

Page 421 of 845 .even assuming that the plaintiff did not consent to be so bound. the provisions of Civil Code come in to make it liable for the damages sought by the defendant.

accordingly. respondent Jose M. Private respondents admitted that there is due to petitioner the amount of P17.439. 1989 Facts: Petitioner was employed in respondent corporation.No. On August 28.00.060. APODACA V NLRC G. 80039 April1 8. Page 422 of 845 .00 per share or a total of P150. 1986. Issue: Does the National Labor Relations Commission (NLRC) have jurisdiction to resolve a claim for non-payment of stock subscriptions to a corporation? Assuming that it has. Mirasol persuaded petitioner to subscribe to P1. Petitioner questioned the set-off alleging that there was no call or notice for the payment of unpaid subscription and that. This controversy is within the exclusive jurisdiction of the Securities and Exchange Commission. On September 1. the NLRC has no jurisdiction to determine such intra-corporate dispute between the stockholder and the corporation as in the matter of unpaid subscriptions. the alleged obligation is not enforceable.500 shares of respondent corporation it P100. It does not even appear that a notice of such call has been sent to petitioner by the respondent corporation. on January 2. However.500. Petitioner and private respondents submitted their position papers to the labor arbiter.07 but this was applied to the unpaid balance of his subscript in the amount of P95. petitioner was appointed President and General Manager of the respondent corporation. the unpaid subscriptions are not due and payable until a call is made by the corporation for payment. petitioner instituted with the NLRC a complaint against private respondents for the payment of his unpaid wages. Private respondents have not presented a resolution of the board of directors of respondent corporation calling for the payment of the unpaid subscriptions. 1985. his cost of living allowance.000. Secondly. he resigned.00. assuming arguendo that the NLRC may exercise jurisdiction over the said subject matter under the circumstances of this case. can an obligation arising therefrom be offset against a money claim of an employee against the employer? Held: Firstly. He made an initial payment of P37.93. 1975. 1986. On December 19.R. the balance of his gasoline and representation expenses and his bonus compensation for 1986.

and works without the petitioners’ prior written approval. to the prejudice of the other party. pegged at P717. fairness and reason dictate that we simply order the set-off of the petitioners’ contractual liabilities totaling P575.922.00. 291. SPOUSES CHUNG V. In short. public order or public policy shall be binding and should be complied with in good faith. we find that both parties failed to comply strictly with their contractual stipulations on the progress billings and change orders that caused the delays in the completion of the project. Respondents demanded the remaining balance from the petitioners which the petitioners denied asserting that the respondents violated the contract. Under the circumstances. No party is permitted to change his mind or disavow and go back upon his own acts. ULANDAY CONSTRUCTION G. ISSUE: Whether or not the petitioners are liable for the remaining balance RULING: In contractual relations. Page 423 of 845 . Makati City at the contract price of P3. the respondent effected 19 change orders without the consent of the petitioners amounting to P912. Support in law for this ruling for partial legal compensation proceeds from Articles 1278. 1279.00. morals. 1281.342. (c) the Construction Manager or Architect shall check the respondent’s request for progress payment and endorse it to the petitioners for payment within 3 days from receipt. the petitioners contracted with respondent Ulanday Construction. Inc. 2010 FACTS: In February 1985. (d) the petitioners shall pay the respondents within 7 days from receipt of the Construction Manager’s or Architect’s certificate.60 downpayment. Respondent gave 12 progress billings but the petitioners were only able to pay 7 of them. 885. 156038 October 11.R.13 against the repair cost for the defective gutter. 283. leaving the amount of P141.91. to construct. and 1283 of the Civil Code. the law allows the parties leeway and considers their agreement as the law between them. In the present case.the concrete structural shell of the formers two-storey residential house in Urdaneta Village.601. or to proceed contrary thereto.524.87 still due from the respondent. with the balance to be paid in progress payments based on actual work completed. although in different amounts that are already due and demandable. On their part.142. both parties are creditors and debtors of each other.Contract stipulations that are not contrary to law. specifications. (e) the respondent cannot change or alter the plans. The contract stipulated among others that the petitioners shall pay a P987. good customs. No. within a 150-day period.

G. On April 29. petitioner withheld the payment of respondent's service fees from February to April 1995 and applied the same as partial payments to the debt which he obligated to pay.. Under the said contract.e.73 and. however.973. The agreement then came into effect when petitioner's goods were delivered to respondent's bodega and were sold by petitioner's employees. Based on the letter.R. for a period of three years. 284. 1995.73.173.019. a company engaged in the business of selling various consumer products through a network of sales representatives.88. 973. Sola. i. SOLA. Lina Sola. The Supreme Court finds that petitioner's act of withholding respondent's service fees and applying them to the latter's outstanding obligation with the former is merely an acknowledgment of the legal compensation that occurred by operation of law between the parties. No. respondent closed and suspended operation of his office cum bodega where petitioner's products were stored and customers were being dealt with. respondent’s wife. MONDRAGON V. wherein he acknowledged and confirmed his wife’s indebtedness to petitioner in the amount of P1.73 was confirmed while the remaining amount of P1. to petitioner's products. The respondent then wrote a letter to the petitioner's Vice-President for Finance. bodega cum office. bound himself to pay on instalment basis the said debt.. JR. 973.154. ISSUE: Whether or not there was legal compensation under Article 1279 of the Civil Code RULING: The letter sent by the respondent clearly shows that he solidarily bound himself to pay the debt. Compensation is a mode of extinguishing to the concurrent amount the obligations of persons who in their own right and as principals are reciprocally debtors and creditors of each Page 424 of 845 . sales force and customers in General Santos City and as such.15 would still be subject to reconciliation. would provide service facilities.154. he becomes petitioner's principal debtor to such amount.154. entered into a Contract of Services with respondent Victoriano S. Jr.490. he was entitled to commission. had an existing obligation with petitioner arising from her Franchise Distributorship Agreement with the latter being dealt with. Prior to the execution of the contract. out of which only the amount of P1. respondent's wife had an account with petitioner in the amount of P3. together with his wife. Consequently. respondent. As respondent bound himself to pay the amount of P1. 174882 January 21 2013 FACTS: Petitioner Mondragon Personal Sales Inc. 463. as service contractor.

The present case was found to have all of the requisites for legal compensation. Legal compensation takes place by operation of law when all the requisites are present. Page 425 of 845 . as opposed to conventional compensation which takes place when the parties agree to compensate their mutual obligations even in the absence of some requisites.other. there is no retention or controversy commenced by third persons over either of the debts. and petitioner's payments of service fees are liquidated and demandable every month as they fall due. while the service fees owing to respondent by petitioner become due every month. Their debts to each other consist in a sum of money. compensation is proper up to the concurrent amount where petitioner owes respondent P125.154. Respondent's debt is liquidated and demandable. Petitioner and respondent are both principal obligors and creditors of each other.73 which was already due. Respondent acknowledged and bound himself to pay petitioner the amount of P1. 973.973.01 for service fees. Thus. while respondent owes petitioner P1.73.040. Finally.154.

056.790. No. IITC should have alleged and proved that PDB sold treasury bills to IITC. Planters failed to deliver the balance worth of bills making Capital one likewise unable to deliver the remaining bills to Insular. 1994 until full payment and (b) PDB to pay IITC P136. These are purely factual issues which this Court cannot review. Petition partially granted. RULING: The issue raised by IITC is factual in nature as it requires the Court to delve into the records and review the evidence presented by the parties to determine the validity of the findings of both the RTC and the CA as to IITC’s role in the transactions in question. when adopted and confirmed by the Court of Appeals.00 with interest at the rate of 6% from June 10. 2012 FACTS: Insular and Capital One and Planters are regularly engaged in trading. the 3 companies entered into a tripartite agreement whrein Planters assigned to Insular. CAPITAL ONE G.Well-established is the principle that factual findings of the trial court. 183308 April 25. 285. Page 426 of 845 . The trial court ordered (a) IITC to pay COEC P17.000. absolved PDB from any liability. The CA. But despite the repeated demands. 1994. Then on May 10. 1994. ISSUE: Whether COEC can set-off its obligation to IITC as against the latter’s obligation to it. are binding and conclusive on this Court and will generally not be reviewed on appeal. CA affirmed the RTC finding that IITC was not a mere conduit but rather a direct seller to COEC of the treasury bills. bills with the total value of P50million.00 with interest at the rate of 6% from March 21.608. Capital One wrote a letter to Insular demanding the physical delivery of the treasury bills which the Capital one purchased. which in turn assigned to Capital one. INSULAR INVESTMENT V.R. however. sale and purchase of Philippine treasury bills. 1995 until full payment. ruling that because PDB was not involved in the transactions between IITC and COEC. Then on July 1.

On June 3. 920. herein respondent SPI. 000. 1995 over SPI’s building at No. SPI sent a Demand Letter to the petitioners asking for full payment of rentals in arrears. Page 427 of 845 . which SPI failed and refused to reimburse. legal compensation is inapplicable. ceiling and flooring.Receiving no payment. RULING: Petitioners failed to properly discharge their burden to show that the debts are liquidated and demandable. Petitioners answered faulting SPI for making them believe that it owns the leased property and that SPI did not deliver the leased premises in a condition fit for petitioners’ intended use. Consequently. they overlooked the need to establish that aforesaid repairs are structural in nature. However. it was renewed for a period of eight months at a monthly rate of P23. 1996. Petitioners intended to use the premises for their karaoke and restaurant business known as “Saporro Restaurant”. petitioners claimed that they were constrained to incur expenses for necessary repairs as well as expenses for the repair of structural defects. SPECIAL PLANS. their claim remains unliquidated and. The petitioners attempted to prove that they spent for the repair of the roofing. SELWIN LAO V. INC. 000. 286. Such want of evidence on this respect is fatal to this appeal. 1996 to August 16.40 as actual damages. Inc. 354 Quezon Avenue. ISSUE: Whether or not the cost of repairs incurred by the petitioners should be compensated against the unpaid rentals. they failed to appreciate that. Lao and Edgar Manansala (Manansala). In which case. (SPI) for the period January 16. claiming unpaid rentals of P118. Thus. attorney’s fees and exemplary damages. 2010 FACTS: Petitioners Selwyn F. 1996 a Complaint for sum of money with the MeTC of Quezon City. Quezon City. only structural repairs are for the account of the lessor. entered into a Contract of Lease with respondent Special Plans. Consequently. 1993 to January 15. SPI filed on July 23.00 covering the period March 16. 164729 June 29. Upon expiration of the lease contract.00. legal compensation is inapplicable. Petitioners prayed that the complaint be dismissed and judgment on their counterclaims be rendered ordering SPI to pay them the sum of P422. as well as moral damages. in the context of their earlier agreement. as well as for waterproofing. as per their lease contract. GR No. 1996. together with Benjamin Jim (Jim). It would have been an altogether different matter if the lessor was informed of the said structural repairs and he implicitly or expressly consented and agreed to take responsibility for the said expenses.

as the assignee of credit of PNB. V. The determinative factor is the mutual agreement between PNB and UPSUMCO to set-off payments. had the right to set-off the outstanding obligations of UPSUMCO on the basis of conventional compensation before the condonation took effect on 3 September 1987. it obtained a set of loans from respondent Philippine National Bank (PNB). Page 428 of 845 . UNITED PLANTERS MILLING CO. Petitioner United Planters Sugar Milling Co. 287. as the legal requisites for compensation under Article 1279 were present. 126890 April 2. 2009 FACTS: In 1987. titles and interests” over UPSUMCO to the respondent Asset and Privatization Trust (APT). even though all of the requisites for legal compensation were present as between those two parties. The absence of the mutual creditor-debtor relation between the new creditor APT and UPSUMCO cannot negate the conventional compensation. However. CA GR No. PNB and UPSUMCO had agreed to a conventional compensation. PNB and UPSUMCO would have been entitled to set-off of payments. RULING: The right of PNB to set-off payments from UPSUMCO arose out of conventional compensation rather than legal compensation. On 27 February 1987. And PNB too had assigned all its rights as creditor to APT. ISSUE: Whether or not there was compensation in the present case. Accordingly. the Republic of the Philippines lost around 1. through a Deed of Transfer. by virtue of a so-called “friendly foreclosure agreement” that ultimately was friendly only to petitioner. the mutual creditor-debtor relation between PNB and UPSUMCO ceased to exist.[6] The Deed of Transfer acknowledged that said assignment was being undertaken “in compliance with Presidential Proclamation No. In 1974. 50. as UPSUMCO commenced operations. titles and interests” over UPSUMCO. among several other assets.” The Government subsequently transferred these “rights. The loans were secured over two parcels of land where the milling plant stood and chattel mortgages over the machineries and equipment. a relationship which does not require the presence of all the requisites under Article 1279. (UPSUMCO) was engaged in the business of milling sugar. PNB assigned to the Government its “rights.5 Billion Pesos after it had waived its right to collect on an outstanding indebtedness from petitioner. APT. Even without an express agreement stipulating compensation. including its rights under conventional compensation. As soon as PNB assigned its credit to APT.

No. Neither did the sheriff receive a reply to the notice of garnishment he sent to PNB-Escolta. However. following the above observation made by the CA and the assertion made by petitioner. and the costs of suit. respondent filed with the trial court a motion for the issuance of subpoenae duces tecum and ad testificandum requiring petitioner PNB Management and Development Corp.050 plus interest as actual damages.000 as exemplary damages. Inc. respondent R&R Metal Casting and Fabricating.R. Therefore. P50. Page 429 of 845 . 1995. (PNB MADECOR) to produce and testify on certain documents pertaining to transactions between petitioner and PNEI from 1981 to 1995. Petitioner is obligated to pay the amount stated in the promissory note upon receipt of a notice to pay from PNEI. it follows that the obligation is not yet due. (PNEI). PNEI was ordered to pay respondent P213. this obligation may not be subject to compensation for lack of a requisite under the law. 2002 FACTS: It appears that on November 19. the writ of execution was returned unsatisfied since the sheriff did not find any property of PNEI recorded at the Registries of Deeds of the different cities of Metro Manila. Since petitioner’s obligation to PNEI is payable on demand. If petitioner fails to pay after such notice. Petitioner’s obligation to PNEI appears to be payable on demand. 1993. Inc. the obligation will earn an interest of 18 percent per annum. 25 percent of the total amount payable as attorney’s fees. petitioner remains obligated to PNEI to the extent stated in the promissory note. This obligation may undoubtedly be garnished in favor of respondent to satisfy PNEI’s judgment debt. ISSUE: Whether or not legal compensation have occured in the instant case? RULING: Legal compensation could not have occurred because of the absence of one requisite in this case: that both debts must be due and demandable. and there being no demand made. (R&R) obtained a judgment in its favor against Pantranco North Express. Without compensation having taken place. 132245 January 1. 288.On March 27. PNB MANAGEMENT V R&R METAL G.

v.000. etc. and that he be at the same time a principal creditor of the other. [3] that the two debts be due. are creditors and debtors to each other. commenced by third persons and communicated in due time to the debtor. [4] that they be liquidated and demandable. it is necessary: [1] that each one of the obligors be bound principally. 1989 FACTS: Petitioner Silahis Marketing Corporation seeks in this petition for review on certiorari a reversal of the decision of the then Intermediate Appellate Court (IAC) in AC-G. 1279 of the Civil Code are present.213. Article 1279 of the Civil Code provides that: "In order that compensation may be proper. Incorporated without coursing the same through herein petitioner. Silahis Marketing Corporation". in their own right. de Leon filed before the then Court of First Instance of Manila a complaint for the collection of the said accounts including accrued interest thereon in the amount of P661. No. compensation cannot extend to unliquidated. CV No. and also of the same quality if the latter has been stated. RULING: It must be remembered that compensation takes place when two persons. disputed claim existing from breach of contract. SILAHIS V IAC G. petitioner admits the validity of its outstanding accounts with private respondent in Page 430 of 845 .03 and attorney's fees of P5. 67162 entitled "De Leon. among others." Compensation is not proper where the claim of the person asserting the set-off against the other is not clear nor liquidated.R.Allegedly due to Silahis' failure to pay its account upon maturity despite repeated demands. A review of the record shows that on various dates in October. Undoubtedly.75 payable within thirty (30) days from date of the covering invoices.R. [2] that both debts consist in a sum of money.00 plus costs of litigation. "the two debts be due" and "they be liquidated and demandable. 74027 December 7. disallowing petitioner's counterclaim for commission to partially offset the claim against it of private respondent Gregorio de Leon for the purchase price of certain merchandise. even without the consent or knowledge of the creditors and debtors. they be of the same kind. 5 Article 1279 requires. 1975. Gregorio de Leon doing business under the name and style of Mark Industrial Sales sold and delivered to Silahis Marketing Corporation various items of merchandise covered by several invoices in the aggregate amount of P22. or if the things due are consumable. November and December. 289. compensation takes effect by operation of law. that in order that legal compensation shall take place. [5] that over neither of them there be any retention or controversy. ISSUE: Whether or not private respondent is liable to the petitioner for the commission or margin for the direct sale which the former concluded and consummated with Dole Philippines." When all the requisites mentioned in Art.

the amount of P22. This circumstance prevents legal compensation from taking place.75 as contained in its answer. But whether private respondent is liable to pay the petitioner a 20% margin or commission on the subject sale to Dole Philippines.213. Page 431 of 845 . Inc. is vigorously disputed.

The collection of a tax cannot await the results of a lawsuit against the government.116. 1593-P "In re: Petition for Entry of New Certificate of Title" filed by Ho Fernandez.Since 1963 up to 1977 inclusive.00 has been extinguished by legal compensation. a 125 square meter portion of Francia's property was expropriated by the Republic of the Philippines for the sum of P4. Metro Manila. He later amended his complaint on January 24.00 representing the estimated amount equivalent to the assessed value of the aforesaid portion. are extinguished (Art. to exclude the remedy in an action or any indebtedness of the state or municipality to one who is liable to the state or municipality for taxes. Neither are they a proper subject of recoupment since they do not arise out of the contract or transaction sued on. RULING: There is no legal basis for the contention. 290. Francia filed a complaint to annul the auction sale. No. 1979. which are construed uniformly. demand. 1977. "The general rule based on grounds Page 432 of 845 . his property was sold at public auction by the City Treasurer of Pasay City pursuant to Section 73 of Presidential Decree No.R.00. 1977. to wit: "(1) that each one of the obligors be bound principally and that he be at the same time a principal creditor of the other. obligations of persons. Pasay City. now District of Sta. 464 known as the Real Property Tax Code in order to satisfy a tax delinquency of P2. in the light of public policy. Francia was not present during the auction sale since he was in Iligan City at that time helping his uncle ship bananas. Ho Fernandez was the highest bidder for the property. A person cannot refuse to pay a tax on the ground that the government owes him an amount equal to or greater than the tax being collected. On October 15. Civil Code). 1980. On March 3. who in their own right are reciprocally debtors and creditors of each other. The circumstances of the case do not satisfy the requirements provided by Article 1279. 4739 (37795) and the issuance in his name of a new certificate of title. seeking the cancellation of TCT No.400. on December 5. 1998 FACTS: Engracio Francia is the registered owner of a residential lot and a two-story house built upon it situated at Barrio San Isidro. Francia failed to pay his real estate taxes. Francia received a notice of hearing of LRC Case No.400. We have consistently ruled that there can be no off-setting of taxes against the claims that the taxpayer may have against the government. On March 20. 1278. A claim for taxes is not such a debt. Thus. ISSUE: Whether or not francia’s tax delinquency of P2. Clara. 1979. contract or judgment as is allowed to be set-off under the statutes of set-off. 67649 June 28. FRANCIA V CA G. By legal compensation.

of public policy is well-settled that no set-off admissible against demands for taxes levied for general or local governmental purposes. the personal consent of individual taxpayers is not required Page 433 of 845 . The reason on which the general rule is based. is that taxes are not in the nature of contracts between the party and party but grow out of duty to. and are the positive acts of the government to the making and enforcing of which.

petitioner told respondent to buy the car from Cañete for P500. Following petitioner’s instructions. When all the requisites mentioned in article 1279 are present. that the car be returned to her. Cañete was willing to sell it for P500.000.000. and extinguishes both debts to the concurrent amount. 2006 FACTS: On May 6. Due to petitioner’s failure to pay respondent. When petitioner returned from Davao.R. Petitioner borrowed the car from respondent for two days but instead of returning the car as promised. ISSUE: Whether or not petitioner’s claim for legal compensation was already too late RULING: The court ruled in favor of the petitioner.[27] when used as a defense. 147477 June 27.000. it retroacts to the date when all its requisites are fulfilled.000. even though the creditors and debtors are not aware of the compensation. Page 434 of 845 . 291. the checks that respondent issued in favor of Cañete bounced.00. Compensation takes effect by operation of law even without the consent or knowledge of the parties concerned when all the requisites mentioned in Article 1279 of the Civil Code are present. She alleged: Sometime in February 1991.[3] Respondent then prayed that the deed of sale between her and petitioner be declared null and void. Since it takes place ipso jure. Cañete also said that if respondent herself will buy the car. a certain Primitivo Cañete requested her to sell a Mercedes Benz for P580. respondent requested Cañete to execute a deed of sale covering the car in respondent’s favor for P500. TRINIDAD V ACAPULCO G.000. Respondent thereafter executed a deed of sale in favor of petitioner even though petitioner did not pay her any consideration for the sale.00 and that petitioner would pay respondent after petitioner returns from Davao. he refused to pay respondent the amount of P500.00 saying that said amount would just be deducted from whatever outstanding obligation respondent had with petitioner. compensation takes effect by operation of law. respondent Estrella Acapulco filed a Complaint before the RTC seeking the nullification of a sale she made in favor of petitioner Hermenegildo M. and that petitioner be ordered to pay damages. 1991. thus criminal charges were filed against her. Trinidad.00 for which respondent issued three checks in favor of Cañete.[26] This is in consonance with Article 1290 of the Civil Code which provides that: Article 1290. No.00.

For a valid novation to take place.00 and promised to pay the balance of P375. GONZALES G. Servando contended that he did not obtain any loan from the respondents. Novation arises when there is a substitution of an obligation by a subsequent one that extinguishes the first. authorizing her to execute the mortgage. their agreement. or by substituting the person of the debtor.000. According to Servando. Servando’s heirs. the husband of Leticia Mendel of P 60.00 on February 9. the old obligation prevails. Upon maturity of the new promissory note. Extinguishment of the old obligation is a necessary element for novation and the new one will arise from such.000. There were three loans which the Servando and Leticia secured with the respondent. There is no novation in case of only slight modifications. who issued a special power of attorney in favor of Leticia Medel. HEIRS OF FRANCO V.00. 1992.000 by executing a promissory note which consolidates the other previous loans which totals to P 500. The third loan was secured by a property was owned by one Leticia Makalintal Yapintchay.000. Servando opposed that he and the respondents had agreed to fix the entire obligation at P775. No. the plaintiffs filed a complaint for the collection of the full amount of the loan. appealed that there was novation is the judgment that transpired upon the decision of the court on December 9. there Page 435 of 845 . which was allegedly embodied in a receipt dated February 5. So. he was not benefited from its proceed and he signed the promissory note as a witness. hence. the defendants failed to pay their obligation. 292. 1991 and February 5. The fourth loan was engaged with Dr. 1986 promissory note.R. or by subrogating a third person in the rights of the creditor. But the RTC ruled over Servando’s opposition and moved to the execution of the judgment for it is final and executory.000. either by changing the object or the principal conditions. the court rule that there is no novation when there is no irreconcilable incompatibility between the old and the new obligations. SPS. plus interests and other charges. ISSUE: Whether or not there is novation between the judgments rendered by the courts? RULING: No. it was decided that the parties should be liable for the loans. which was not paid on maturity. With the various appeals and motion for reconsideration with the RTC and CA. 1992. Rafael Mendel. 1992. on account of his intervening death. Then. superseded the July 23. 159709 June 27 2012 FACTS: Defendants Servando Franco and Leticia Mendel obtained loans from Veronica Gonzales for the latter was engaged in the business of financing under the company Gonzales Credit Enterprises. whereby he made an initial payment of P400.

If the two obligations cannot stand together. cause or principal conditions thereof. (c) an extinguishment of the old contract. or adds other obligations not incompatible with the old ones. the change is merely modificatory in nature and insufficient to extinguish the original obligation. the old and the new obligations must be incompatible on every point. Lastly. novation is not presumed. This means that the parties to a contract should expressly agree to abrogate the old contract in favor of a new one. In the absence of the express agreement. or changes only the terms of payment. It did not establish the novation of his agreement with the respondents. such as its object. acknowledgment or ratification of the old contract with slight modifications or alterations as to the cause or object or principal conditions can stand together with the former one. or the new contract merely supplements the old one. or the old and the new obligations are incompatible on every point. Moreover. and (d) a valid new contract. It is settled that an extension of the term or period of the maturity date does not result in novation. the latter obligation novates the first. The incompatibility must affect any of the essential elements of the obligation. the extension of the maturity date did not constitute a novation of the previous agreement. therefore: (a) a previous valid obligation. the Court has ruled that an obligation to pay a sum of money is not novated by an instrument that expressly recognizes the old. each one having its independent existence. The receipt dated February 5. To be clear. Page 436 of 845 . otherwise. There is incompatibility when the two obligations cannot stand together. and there can be no incompatibility between them. a creditor’s acceptance of payment after demand does not operate as a modification of the original contract. A new contract that is a mere reiteration. In short. Indeed. Changes that breed incompatibility must be essential in nature and not merely accidental. the new obligation extinguishes the prior agreement only when the substitution is unequivocally declared.must be. 1992 was only the proof of Servando’s payment of his obligation as confirmed by the decision of the RTC. A compromise of a final judgment operates as a novation of the judgment obligation upon compliance with either of these two conditions. (b) an agreement of the parties to make a new contract.

Indeed.into a Deed of Assignment and Conveyance (DAC). 1998. in this case. RULING: Thus. it becomes clear that Demetrio's special power of attorney to sell is sufficient to enable him to make a binding commitment under the DAC in behalf of Carolina and Margarita.580. necessarily and consequently has resulted in a novation of PMRDC's integral obligations.the latter purportedly acting under authority of the same special power of attorney as in the MOA . the same however allegedly bounced. On March 23. PMRDC delivered to petitioners certain checks representing the money. Malvar and Demetrio P. in fine. the terms of his special power of attorney allow much leeway to accommodate not only the terms of the MOA but also those of the subsequent agreement in the DAC which. 1999. Hence. Hernandez. the realty measured 4. Demetrio. petitioners demanded the return of the corresponding TCTs over the land but PMRDC said that the TCTs could no longer be delivered back to petitioners as the covered properties had already been conveyed and assigned to the Asset Pool pursuant to the March 23. on January 8. In the aggregate. ISSUE: Whether or not the novation of the MOA is valid. Jr. WILFREDO HERNANDEZ