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OBLICON DIGEST REVIEWER CHAPTER 2 (Credits to all its employees that the damages to the bridge were caused

sources) by force majeure, that plaintiff has no capacity to sue, and
that the Nagtahan bailey bridge is an obstruction to
navigation. After due trial, the court rendered judgment
on June 11, 1963, holding the defendant liable for the
AUSTRIA vs COURT OF APPEALS (39 SCRA 527) damage caused by its employees and ordering it to pay
plaintiff the actual cost of the repair of the Nagtahan
FACTS: Maria G. Abad received from Guillermo Austria a bailey bridge which amounted to Php 192,561.72, with
pendant with diamonds to be sold on a commission basis legal interest from the date of the filing of the complaint.
or to be returned on demand. While walking home, the
purse containing the jewelry and cash was snatched by ISSUE: Was the collision of appellant's barge with the
two men. A complaint of the incident was filed in the supports or piers of the Nagtahan bridge caused by
Court of First Instance against certain persons. Abad failed fortuitous event or force majeure?
to return the jewelry or pay for its value despite demands
made by Austria. Austria brought an action against the RULING: Yes. Considering that the Nagtahan bridge was an
Abad spouses for the recovery of the pendant or of its immovable and stationary object and uncontrovertibly
value and damages. Abad spouses set up the defense that provided with adequate openings for the passage of water
the alleged robbery had extinguished their obligation. craft, including barges like of appellant's, it was undeniable
that the unusual event that the barge, exclusively
ISSUE: Should the Abad spouse be held liable for the loss controlled by appellant, rammed the bridge supports
of the pendant? raises a presumption of negligence on the part of
appellant or its employees manning the barge or the tugs
RULING: No. The Court ruled that the exempting provision that towed it. For in the ordinary course of events, such a
of Article 1174 of the Civil Code is applicable in the case. It thing will not happen if proper care is used. In Anglo-
is a recognized jurisdiction that to constitute a caso American Jurisprudence, the inference arises by what is
fortuito that would exempt a person from responsibility, it known as the "res ipsa loquitur" rule. The appellant
is necessary that the event must be independent of the strongly stressed the precautions taken by it on the day in
human will or of the obligor’s will; the occurrence must question: that it assigned two of its most powerful
render it impossible for the debtor to fulfill the obligation tugboats to tow down river its barge L-1892; that it
in a normal manner; and that the obligor must be free of assigned to the task the more competent and experienced
participation in, or aggravation of, the injury to the among its patrons, had the towlines, engines and
creditor. To avail of the exemption granted, it is not equipment double-checked and inspected' that it
necessary that the persons responsible for the event instructed its patrons to take extra precautions; and
should be found or punished. It is sufficient that to concludes that it had done all it was called to do, and that
unforeseeable event which is the robbery took place the accident, therefore, should be held due to force
without concurrent fault or negligence on the part of the majeure or fortuitous event. These very precautions,
obligor which can be proven by preponderant evidence. It however, completely destroyed the appellant's defense.
was held that the act of Maria Abad in walking home alone For caso fortuito or force majeure (which in law are
carrying the jewelry was not negligent for at that time the identical in so far as they exempt an obligor from liability)
incidence of crimes was not high. by definition, are extraordinary events not foreseeable or
avoidable, "events that could not be foreseen, or which,
though foreseen, were inevitable" (Art. 1174, Civ. Code of
the Philippines). It was, therefore, not enough that the
REPUBLIC vs LUZON STEVEDORING CORPORATION (21
event should not have been foreseen or anticipated, as
SCRA 279)
was commonly believed but it must be one impossible to
foresee or to avoid. The mere difficulty to foresee the
FACTS: In the early afternoon of August 17, 1960, barge L-
happening was not impossibility to foresee the same. The
1892, owned by the Luzon Stevedoring Corporation was
very measures adopted by appellant prove that the
being towed down the Pasig River by two tugboats when
possibility of danger was not only foreseeable, but actually
the barge rammed against one of the wooden piles of the
foreseen, and was not caso fortuito.
Nagtahan bailey bridge, smashing the posts and causing
the bridge to list. The river, at the time, was swollen and
the current swift, on account of the heavy downpour in
Manila and the surrounding provinces on August 15 and
16, 1960. The Republic of the Philippines sued Luzon
Stevedoring for actual and consequential damage caused
by its employees, amounting to Php 200,000. Defendant
Corporation disclaimed liability on the grounds that it had
exercised due diligence in the selection and supervision of

R. The popular notion that credit card purchases are obligation. ISSUE: Was there delay in the performance of the private ISSUE: respondent's obligation? 1. and duly advised him that resolving the same could take some time. The somewhat unusual attending circumstances to the purchase at Coster – that there was a deadline for the completion of that purchase by petitioner before any delay would redound to the injury of his several traveling companions – gave rise to the moral shock. it was two- deviated from Pantaleon's established charge purchase and-a-half (2-1/2) days behind schedule. led to the particular injuries under Article 2217 of the Civil Code for which moral damages are remunerative. Yes. Whether or not AmEx had committed a breach of its RULING: Yes. There was a specific time agreed upon RULING: for the delivery of the materials to the cemetery. wounded feelings and social humiliation sustained by Pantaleon. the damage he suffered as a consequence of the delay or contractual breach. Even assuming that AmEx’s credit authorizers did not have sufficient basis on hand to make a judgment. 174269. as the purchase at Coster Barzaga's wife was finally laid to rest.” there really is no strict. Pantaleon commenced a complaint for moral before Christmas day to spare her family of the long vigils and exemplary damages before the RTC against American as it was almost Christmas.826. serious anxiety.00 at the impending death. holding that AmEx had not breached its completed in the afternoon of the 27th of December. much less one specifically contracted otherwise delay would attach. 1997) FACTS: After the Amsterdam incident that happened FACTS: The petitioner’s wife was suffering from a involving the delay of American Express Card to approve debilitating ailment and with forewarning of her his credit card purchases worth US $13. Yes. . No. No. Private authorization. but the more elemental failure to timely act on the same. BARZAGA vs COURT OF APPEALS (G. Express. we see no reason why it could not have promptly informed Pantaleon the reason for the delay. 2. This is clearly a case of non-performance of a reciprocal 1. mental anguish. It was incumbent upon respondent to take for a credit card company to approve or disapprove a immediately fulfill his obligation to deliver the goods customer’s purchase. The culpable failure of AmEx herein is not the failure to timely approve petitioner’s purchase. which is the payment determinative point of demarcation on how long must it of the price. as concluded by the RTC. the approved “within seconds. After his wife passed away. as in the contract of purchase and sale. for which culpability lies under Article 1170. 115129 May 8 2009) February 12. However. CA reversed the award of damages in favor of date despite repeated follow-ups. Whether or not AmEx is liable for damages. An award of moral damages upon by the parties. pattern. she expressed her wish to be laid to rest Coster store.PANTALEON vs AMERICAN EXPRESS (G. The reason why Pantaleon is entitled to damages is not simply because AmEx incurred delay. but because the delay. credit card purchase. and obligations to Pantaleon. RTC rendered a decision in favor of respondents however failed to deliver on agreed time and Pantaleon. He said that he and his family experienced petitioner bought materials from herein private inconvenience and humiliation due to the delays in credit respondents for the construction of her niche. whether favorably or unfavorably. Since the respondent was negligent and obligations to Pantaleon. One hour appears to be patently is incumbent in this case as the petitioner has suffered so unreasonable length of time to approve or disapprove a much. incurred delay in the performance of his contractual obligations. legally petitioner had already done his part.R. The niche was Pantaleon. the petitioner is entitled to be indemnified for 2.

Leoncio is the sole person entitled to properties in Baesa.R. 2008) MERALCO’s actions. The fees against MERALCO under the circumstances that the RTC ruled in favor of respondents. NCC) were awarded electricity to which they were entitled under the Service in the amount of Php 5. Thus.R. There was no evident bad faith or fraud in upgrade MERALCO. In a letter not present. Clearly. 1999 NPC Since the Court does not deem it proper to award wrote to MERALCO requesting the immediate exemplary damages in this case then the CA’s award of disconnection of electric power supply to all residential attorney’s fees should likewise be deleted. it was March 14. due to the lack of power supply. (2) NO. they demanded that they be indemnified in the amount of P1million for the “humiliation and embarrassment” caused (2) W/N the Court of Appeals gravely erred when it by its employees. It was not enough for MERALCO to merely rely on the (1) YES.CATHAY PACIFIC. Verily. exercise utmost care and diligence i the performance of its obligation. Quezon City. The Court of Appeals latter acted in good faith in the disconnection of the affirmed the RTC decision with modification in the award electric services of the respondents. factual milieu of the present case. oppressive or malevolent. On April 28. Nominal damages (Art. exemplary damages cannot be rendered judgment for MERALCO to demolish or remove awarded as MERALCO’s acts cannot be considered the building and structure they built on the land of the wanton. vs RAMOY (G. 2003) found out that the residence of the plaintiffs-spouses was indeed outside the NPC property. 1990 MERALCO requested NPC for a joint survey to determine all the establishments which are considered under NPC property. 158911. of seat neither on overbooking of flight as it is within 10% tolerance. Nevertheless. NCC) and attorney’s fees were set aside and deleted from MERALCO. thus. 1989 the MTC 2232 of the Civil Code. one of the witness stand of his wounded feelings. RULING: ISSUE: Whether or not the petitioners (1) breached the contract of carriage. 2221. the electric service connection of the plaintiffs was disconnected. MERALCO’s failure to exercise utmost care and diligence in the performance of its obligation to Leoncio Ramoy is tantamount to bad faith. as become final and executory. No. among the defendants in moral damages as he is the only who testified on the the ejectment case was Leoncio Ramoy. fraudulent. The Court agrees with the CA that under the liable for damages. therefore Leoncio Ramoy is (NPC) filed with the MTC Quezon City a case for ejectment entitled to moral damages in the amount awarded by the against several persons allegedly illegally occupying its CA. is expected to the Court of Appeals’ ruling. such priority may be waived. Moral damages (Art. electric service of respondents. This is contrary to public policy because. Quezon City. pursuant to Articles 1170 & 1173 of the Civil Code. Since respondents were privileged members. their seats were (1) W/N the Court of Appeals gravely erred when it found upgraded to First Class. (2) acted with fraud and (3) were (1) NO. the National Power Corporation left the premises. are not entitled to the services of (2) NO.00. No. 150843. Furthermore. On June 20. reckless. During the ocular inspection ordered by the Court. MERALCO willfully caused injury to Leoncio Ramoy by withholding from him and his tenants the supply of (3) YES. Upon return to Manila. Petitioner’s Country Manager failed to awarded moral and exemplary damages and attorney’s respond. dated August 17. . It should have not been imposed on the said Decision can it be said with conclusiveness that them over their vehement objection. FACTS: In respondents’ return flight to Manila from Hong Kong. 2220. of damages. Pursuant to Article plaintiffs in the case at bar. as pursuant to and commercial establishments beneath the NPC Article 2208 of the Civil Code of which the grounds were transmission lines along Baesa. In due time. Leoncio Ramoy MANILA ELECTRIC CO. MERALCO failed to exercise the utmost degree of care and diligence required RULING: of it. being a vital public utility. the lessees of his four apartments on subject lot FACTS: In the year 1987. plaintiff and to vacate the premises. respondents have no right or proper interest over the subject property. vs SPOUSES VASQUEZ (G.000. they were deprived of their original seats in Business ISSUES: Class with their companions because of overbooking. Although respondents have the priority of Decision of the MTC without ascertaining whether it had upgrading their seats. testified that he suffered wounded feelings because of March 4. Contract. Respondents refused but MERALCO negligent when it disconnected the subject eventually persuaded to accept it. Respondents instituted action for damages. only upon finality of what respondents did.

40. private respondent insurance company. His act of receiving the premiums collected is well erroneous and that the premiums were paid in full by within the province of his authority. denying bad faith in unilaterally respondent insurance company was itself defrauded due cancelling the policy. Had the it expressly or tacitly. Court of Appeals: cancellation of the insurance policy was based on what the “A bank is liable for wrongful acts of its officers done in the existing records showed. acts year. obliterate documentary stamp of Php 110. the company offered to reinstate same solely thru its employees. such as respondent insurance company. The court even added that the interests of the bank or in the course of dealings of the errant manager who didn’t remit the profits was forced to officers in their representative capacity but not for acts resign. but never gave him an official receipt. After policy. a banking Court. Petitioner alleged that the manager’s to petitioner telling him that the provisional receipt would misappropriation of his premium payments is the be confirmed by an official one. Malapit represented its interest and acted in its extend its lifetime on finding that the cancellation was behalf. Areola then filed for a petition in the Supreme outside the scope of their authority.65 cancelled insurance policy by respondent insurance which included the premium of Php 1. Mr.” of Areola and asked Prudential to pay Php 250.25 and 2% premium tax of whatever liability for damages it may have to bear.AREOLA vs COURT OF APPEALS (G. 1910. company. Rather. the principal is not bound except when he ratifies company was in bad faith in cancelling the policy. He contended that damage had was a mistake. Areola confronted a company agent and absolve respondent insurance company from liability. Prudential averred that the equitable Areola sent a letter demanding that he be reinstated or he relief sought by petitioner-insured was granted to the would file for damages if his demand was not met. petitioner-insured is left without a company then told him that his payments weren’t in full cause of action. The filing of the complaint. Malapit. there was reason to believe that no payment has been made since no official receipt was issued. The court held that the power. by provision of law is bound by the acts of its agent. no exoneration This ruling was challenged on appeal by respondent from liability could result therefrom. they were too late for Areola already filed an action for breach of contract in the trial court. 1994) (1) Did the erroneous act of cancelling subject insurance FACTS: Prudential Guarantee cancelled Areola’s personal policy entitle petitioner-insured to payment of damages? accident insurance on the grounds that the latter failed to pay his premiums 7 months after issuing the policy. A premium and that they would extend the policy by one corporation. As held in bad faith in cancelling subject policy. Accordingly. It also reminded the customer to ask for a receipt after payment. Areola (2) Did the subsequent act of reinstating the wrongfully was supposed to pay the total amount of Php 1. due demanded an official receipt. Article 1910 thus reads: However. The statement of account had a stipulation not absolving it? considering it a receipt. already been done. hence. The company replied to Areola by telling him that petitioner-insured to all his rights under the policy.R.00. Reinstatement effectively restored yet. No. The latter told him that it to the breach of contract. Thereby. the Prudential Bank v. obligations which the agent may have contracted within there was no breach of contract. malice or from its obligation to petitioner Areola. There was also a RULING: stipulation calling for a demand for a provisional receipt after payment to an agent.470. he wouldn’t be premiums he received cannot constitute a defense for covered by the policy. Subsequent reinstatement could not possibly being surprised. A provisional receipt was sent (1) YES. company who. Thus. The principal must comply with all the company’s defense lay in rectifying its omission. his receipt of petitioner-insured but were not remitted by the said premiums is receipt by private respondent insurance company's branch manager. The company then confirmed that he paid the is directly imputable to respondent insurance company.609. Malapit's failure to remit the insured met an accident at that time. corporation is liable to innocent third persons where the representation is made in the course of its business by an agent acting within the general scope of his authority even . The court ruled in favor the scope of his authority. The CA absolved Prudential on the to the anomalies that took place does not free the same grounds that it was not motivated by negligence. The fact that private insurance company.000 in As for any obligation wherein the agent has exceeded his moral and exemplary damages. thus Php 29. The latters' acts are considered policy it had previously cancelled and even proposed to as its own. The “Art. The company The court held that Malapit's fraudulent act of then told him that they would still hold him under the misappropriating the premiums paid by petitioner-insured policy. The company then proximate cause of the cancellation of the insurance cancelled the policy for non-payment of premiums. in an effort to rectify such error. 95641 ISSUE: September 22.

Pursuant to the agreement Herce paid the downpayment of Php 30.000. upon him. No. 125994. Due to the agreement to enter into a contract of requisites must concur that there must be: insurance where Prudential promised to extend protection to petitioner-insured against the risk insured. since it needs strong winds for it to work.00 balance. Court of Appeals. cause of the loss or destruction of the object of the contract.” are the perfect locations to put up a windmill. Prudential is liable for damages for the fraudulent acts ISSUE: Can the collapse of the windmill be attributed to committed by Malapit.00 this should be offset by the defects in the windmill system which caused the structure to collapse after strong winds hit their place. There was also no actual or substantial damage inflicted. and there has been a breach of contract and no substantial a strong wind in this case is not fortuitous. said article entitles the injured party to payment of damages.000. June 29. such that the obligation the Civil Code the event should be the sole and proximate of one is dependent upon the obligation of the other. the injured party is given a choice between fulfillment or rescission of the obligation in case (b) the event must be either unforeseeable or one of the obligors fails to comply with what is incumbent unavoidable. The the debtor to fulfill his obligation in a normal damages would be nominal because the insurance manner.C.000. A contract of Tanguilig? insurance creates reciprocal obligations for both insurer and insured. must be independent of the will of debtor Under Article 1191. it was neither injury or actual damages whatsoever have been or can be unforeseeable nor unavoidable.00. held that 4 (2) NO.00. has produced no actual present loss of any kind. In order for a party to claim exemption from from the same cause and in which each party is both a liability by reason of fortuitous event under Art 1174 of debtor and a creditor of the other. regardless of whether he (c) the event be such to render it impossible for demands fulfillment or rescission of the obligation. places with strong winds shown. but this decision was attempting to perpetrate a fraud upon his principal or overturned by the Court of Appeals which ruled in favor of some other person.000. Herce refused to pay the balance because he had already paid this amount to SPGMI which constructed a deep well to which the windmill system was to be connected. the S. and company took steps to rectify the contract. the Php 60.000. 2001) FACTS: Herce contracted Tanguilig to construct a windmill system for him. or where Tanguilig merely stated that there was a strong wind.00 consideration is only for the construction of the windmill and the construction of the deep well was not part of it.000. extinguishing the liability of cannot obliterate the injury inflicted.00 and installment of Php 15. In Nakpil vs.R.” Herce. since he delivered it in good and working condition and Herce accepted it without protest. Herce contested that the collapse is attributable to a typhoon. leaving a Php 15. a force majeure that relieved him of liability. for consideration of Php 60. The collapse of the windmill cannot be attributed to him as well. Nominal (d) the debtor must be free from any damages are "recoverable where a legal right is technically participation in or aggravation of the injury to violated and must be vindicated against an invasion that the creditor. Reinstating the insurance policy force majeure? Thus. and assuming that he owed the Php 15.though the agent is secretly abusing his authority and The RTC ruled in favor of Tanguilig. JACINTO TANGUILIG vs COURT OF APPEALS and VICENTE HERCE JR. there was a (a) the cause of the breach of the obligation debtor creditor relationship between the two parties. According to Tanguilig. Reciprocal obligations are those which arise RULING: YES. (G. . However.

000. ISSUE: Whether or not Far Eastern University failed to comply with their obligation in implementing a safe and ISSUE: Whether or not private respondents are entitled of secure learning environment. “Cancelled Card” in its master file. Article 23 of the Civil Code contemplates a conscious act to cause harm. they have the obligation to give back Clarita informed FEBTC that she lost her credit card. the bank’s internal failed to comply with their obligation when a student of security procedures and policy would be to record the lost theirs.FAR EAST BANK vs COURT OF APPEALS (G. admitting that within the hands of the security guards. Moral damages for to malice or bad faith. and provide a safe and secure environment for every student. In relation to a breach of contract. demanded from FEBTC the for Galaxy being the first employers of Rosete. moral damages may be Edilberto De Jesus as well as the counterclaims of the recovered where the defendant is shown to have acted in respondents. The Regional Trial Court of Manila found FEU bad faith or with malice in the breach of the contract. SALUDAGA vs FAR EASTERN UNIVERSITY (553 SCRA 741) February 23. Private respondent for the university. it is different from jointly and severely pay the respondent FEU damages the negative idea of negligence in that malice or bad faith equivalent to the amount awarded to Saludaga. Malice or bad faith implies a Php 100. and attorney’s fees. whose name is Joseph Saludaga was shot inside the card. Far Eastern University affidavit of loss. forcing him to pay the bill in cash. In the respect for their respective colleges and to excel and order to replace the lost card. It is also payment of damages. there are also complaints Luis Luna. through Galaxy. FEU was ordered to pay actual Luis of his own card’s cancellation. was accorded. FEU was ordered to pay temperate Luis is not considered to be so gross that it would amount damages in the amount of Php 20. HELD: The court dismissed the petitioner’s complaints for HELD: NO. the third party which hires security guards Luis felt embarrassed by this incident. in any case. give way to the specific provision of Article 2224 of the Civil Code authorizing the grant of moral damages in culpa contractual solely when the breach is due to fraud or bad faith. the card was check the qualifications of the security guards hired not honored. contemplates a state of mind affirmatively operating with furtive design or ill-will. expressed the bank’s apologies. In culpa contractual. president of FEU. 1995) FACTS: It is the obligation of any college institution to FACTS: Private respondent Luis A. indicate any deliberate intent on the part of FEBTC to After the execution.000. in its stead. Luna applied for. a vice president of said that the safety of the university should not only be the bank. its application can be warranted only when the defendant’s disregard of his contractual obligation is so deliberate as to approximate a degree of misconduct certainly no less worse than fraud or bad faith. Most importantly. The failure to inform its satisfaction. private respondents moral damages. Adrian Festejo. plus 6% interest per annum of the trial court and the appellate court can sufficiently from the filing of the case until the finality of decision. however. The University also failed to Far East card to pay for the lunch.R. the bank was negligent for failing to inform obligation to the petitioner. From there. taken by Saludaga by surprised including physical and Private respondents then filed a complaint for damages in moral damages obtained from the said accidental shooting the RTC. which rendered a decision ordering FEBTC to pay by Rosete who claimed that it was an accident. along with the principal card. attorney’s fees and litigation expenses for conscious and intentional design to do a wrongful act for a Php 50. as a “Hot Card” or campus by their security guard named Alejandro Rosete. despedida lunch for a close friend. exemplary damages. Nothing in the findings damage of Php 35. The decision is modified by deleting the award of moral and exemplary damages to private respondents. Then he presented his De Jesus. to be liable for the damages and a breach of their Concededly.000. moral damages. a Far East card issued by petitioner FEBTC.298. Naturally. Article 23 is a mere declaration of a general principle in human relations that clearly must. Damages are they have failed to inform Luis about its security policy. Galaxy was and its presidents were ordered to dishonest purpose or moral obliquity. 108164. As for the students. through his counsel. Luis then tendered a The victim petitioned a case against FEU and Edilberto C. petitioner is ordered to pay nominal damages sanctioned under Article 2223 of the Civil Code. In cases of this nature. Clarita submitted an do well with the institution’s goals. the rate shall be 12% per annum until cause harm to private respondents.25. . No.

33 monthly amortizations until September 1998. 185798. Respondents performing their contractual obligation. costs of suit reciprocal ones.949. 63.198.” rescission with payment of damages.949. He may also seek rescission. Petitioners sought reconsideration but it was a reservation agreement wherein they deposited P200. breach which warrants a refund of the total amount paid. Civil Code which states: The HLURB rendered judgment ordering petitioners to jointly and severally pay respondents the amount of Php “Article 1191. the non- construction to the 1997 Asian financial crisis. comply with what is incumbent upon him. 2014) The appellate court supported the HLURB Arbiter’s conclusion.96. He also stated that mere economic hardship is not an excuse for contractual Conformably with these provisions of law. reglementary period despite service of summons. which was affirmed by the HLURB and the FACTS: Petitioner Fil-Estate.198. No. that petitioners’ failure to develop Central Park Place Tower. . The power to rescind obligations is implied in 2. even after he has obligation which entitles respondents to seek for chosen fulfillment.949. The appellate court agreed to the HLURB Arbiter’s ruling. the Asian financial crisis is not a Complaint for Refund and Damages before the Housing fortuitous event that would excuse petitioners from and Land Use Regulatory Board (HLURB). the Office of the attached their position paper attributing the delay in President and the Court of appeals. On August 29. second. ISSUE: Whether or not the Asian financial crisis constitute Respondents also stopped paying their monthly a fortuitous event which would justify delay by petitioners amortization when they learned that construction works in the performance of their contractual obligation. Claiming to have paid a total of Php 2. The HLURB issued an Order of Default against damages and third petitioners are likewise obligated to petitioners for failing to file their answer within the pay attorney’s fees and the administrative fine. as well as the attorney’s fees.363. respondents are and legal delay. respondents were constrained to file a consistent that first. Inc. if the latter should become impossible. January 13. This petition did not present any justification for us to Petitioners filed a motion to lift order of default and deviate from the rulings of the HLURB. When their demands went raised by petitioners in all the legal fora.198. Aggrieved. After the exhaustion of the remedies available.200 and had been paying the Php grounds for review. The appellate court pointed out that purchased from petitioners an 82-square meter petitioners failed to prove that the Asian financial crisis condominium unit at the Central Park Place Tower in constitutes a fortuitous event which could excuse them Mandaluyong City for a pre-selling contract price of Php from the performance of their contractual and statutory 5.000. The rulings were unheeded. Indeed.96 to petitioners. Repondents Spouses Conrado and Maria Vicotria Ronquillo including interest. owner and developer of the Office of the President. Php 200. is its authorized marketing agent. with payment of damages in condominium project as a substantial breach of their either case. attorney’s fees and other litigation amount of amortizations paid including interest and expenses. respondents entered into obligations. petitioners from the performance of their contractual obligation. denied by the Court of Appeals. stopped.96 representing the of the breach committed by petitioners. The HLURB reiterated that the entitled to rescind the contract and demand depreciation of the peso as a result of the Asian financial reimbursement for the payments they had made to crisis is not a fortuitous event which will exempt petitioners. The injured party may choose between the fulfillment and the The Arbiter considered petitioners’ failure to develop the rescission of the obligation. Respondents paid the full down filed the instant petition advancing substantially the same payment of Php 1.000 as and by way entitled to rescind the contract and to be refunded the of moral damages.552. in case one of the obligors should not and administrative fine. respondents are total amortization payments. petitioners 000 as reservation fee.FIL-ESTATE vs SPS RONQUILLO (G. petitioners sought relief from the Court of Appeals through a petition for review under Rule 43 containing the same arguments they raised before the HLURB and the Office of the President but was denied for lack of merit. as a result prayed for refund of Php 2. 1997. respondents demanded a full refund of HELD: It is apparent that these issues were repeatedly their payment with interest. while co-petitioner Fil-Estate the condominium project is tantamount to a substantial Network. Petitioners performance of petitioners’ obligation entitles denied committing fraud or misrepresentation which respondents to rescission under Article 1191 of the New could entitle respondents to an award of moral damages.R.174.

alleged that petitioner made a "follow-up" upon respondent. Petitioner wrote a demand letter for reimbursement of the amount paid. Despite such payment. which was reversed demand upon the obligee is still necessary before the by the Court of appeals ordering appellee to pay appellant obligor can be considered in default and before a cause of Php 954. Petition is denied. which. petitioner failed contending rules given in the first paragraph of the present article. Lorenzo Shipping ordered the general rule is that the fulfillment of the parties' for the second time cylinder lines from the respondent respective obligations should be simultaneous. even in reciprocal obligations.000 plus interest. with respect to the term of payment. FACTS: Petitioner Lorenzo Shipping is engaged in coastwise HELD: No. The Complaint only was no demand. BJ for rescission against the respondent. RTC held respondents bound to the quotation the period for the fulfillment of the obligation is fixed. (G. if fir order”. would not qualify as a ISSUE: Whether or not respondent incurred delay in demand for the fulfillment of the obligation. vs DAVAO CORRUGATED CARTON CORP. Thus. There having been no failure on the part of the respondent to perform its obligations.R. as in a contract of sale. There was no delay since there action for rescission will accrue. Petitioner filed a Complaint for sum of money and damages against respondent. however. The Complaint averred that the parties agreed that the boxes will be delivered within 30 days from payment but respondent failed to manufacture and deliver the boxes within such time. Court of appeals decision is affirmed. petitioner would not have a cause of action for rescission RULING: By accepting the cylinders when they were against respondent as the latter would not yet be delivered to the warehouse. Without a performing its obligation under the contract of sale previous demand for the fulfillment of the obligation. the power to rescind the contract is unavailing to the petitioner. July 26. Respondent replied that the boxes had been completed as early as April 3. 2010) FACTS: Petitioners entered into an agreement with the respondent for the purchase of corrugated carton boxes specifically designed for petitioner's business of exporting fresh bananas. 1998 and that petitioner failed to pick them up from the former's warehouse 30 days from completion. no fulfills his obligation and the other party does not fulfill his. 176868. ISSUE: Whether or not the petitioner would have a cause November 19. as agreed upon.LORENZO SHIPPING vs BJ MARTHEL (443 SCRA 163. Hence. It was the latter automatically incurs in delay. The agreement was not reduced into writing. the other party would incur in delay only from the cylinders and that there was a delay since the respondent moment the other party demands fulfillment of the committed said items “ within two months after receipt of former's obligation. that time was of the essence in the delivery of the that is. 2004) of action for rescission against the respondent. Despite due default for each obligation must be determined by the demands by the respondent. again stating the date of the cylinder’s delivery. once a party balance payable in 5 bi-monthly equal installments. the demand is generally necessary because. The Supreme Court Marthel is engaged in trading. various industrial commodities. the petitioner would not have a cause of action shipping and owns the cargo M/V Dadiangas Express. delay in the delivery of said items. . the dishonored due to insufficiency of funds. petitioner did not receive any boxes from respondent. Supreme Court held that time was not of the essence. petitioner waived the claimed considered in breach of its contractual obligation. marketing and selling ruled that in reciprocal obligations. But when different allegedly paid through postdated checks but the same was dates for performance of the obligations are fixed. SOLAR HARVEST INC. no. no stating the term of payment to be 25% upon delivery. Petitioner deposited in respondent's US Dollar Savings Account as full payment for the ordered boxes.