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Pay v. Palanca [G.R. No. L-29900.

June 28, 1974]

The promissory note indicated payment “upon demand”. Petitioner relied on this to mean that
prescription would not lie unless there is demand from them. The petition was filed fifteen years
after its issuance.
Whether or not a promissory note to be paid “upon demand” is immediately due and demandable.
YES. Every obligation whose performance does not depend upon a future or uncertain event, or
upon a past event unknown to the parties, is demandable at once (Art. 1179 of the New Civil Code).
The obligation being due and demandable in this case, it would appear that the filing of the suit
after fifteen years was much too late.
Smith Bell vs. Sotelo Matti (44 Phil. 874)
Smith Bell vs. Sotelo Matti (44 Phil. 874)
GR No. 16570, March 9, 1922
Romualdez, J.:

Plaintiff corporation undertook to sell and deliver equipment for Mr. Sotelo but no definite dates
were fixed for the delivery. The periods were couched in ambiguous terms such as “within 3 or 4
months”, “in the month of September or as soon as possible”, and “approximate delivery with 90
days-This is not guaranteed.” When the goods arrived, Mr. Sotelo refused to receive them and to pay
the prices. Mr. Sotelo then sued for damages because of the delay suffered.

Whether Smith Bell incurred delay in the delivery of goods to Sotelo

No, it did not incur delay.

From the record it appears that these contracts were executed at the time of the world war when
there existed connection with the tanks and "Priority Certificate, subject to the United -States
Government requirements," with respect to the motors. At the time of the execution of the contracts,
the parties were not unmindful of the contingency of the United States Government not allowing the
export of the goods, nor of the fact that the other foreseen circumstances therein stated might
prevent it.

Considering these contracts in the light of the civil law, we cannot but conclude that the term which
the parties attempted to fix is so uncertain that one cannot tell just whether, as a matter of fact,
those articles could be brought to Manila or not. If that is the case, as we think it is, the obligation
must be regarded as conditional.

When the delivery was subject to a condition the fulfillment of which depended not only upon the
effort of the herein plaintiff, but upon the will of third persons who could in no way be compelled to
fulfill .the condition. In cases like this, which are not expressly provided for, but impliedly covered,
by the Civil Code, the obligor will be deemed to have sufficiently performed his part of the
obligation, if he has done all that was in his power, even if the condition has not been fulfilled in
In connection with this obligation to deliver, occurring in a contract of sale like those in question,
the rule in North America is that when the time of delivery is not fixed in the contract, time is
regarded unessential.

When the contract provides for delivery 'as soon as possible' the seller is entitled to a reasonable
time, in view of all the circumstances, such as the necessities of manufacture, or of putting the goods
in condition for delivery. The term does not mean immediately or that the seller must stop all his
other work and devote himself to that particular order. But the seller must nevertheless act with all
reasonable diligence or without unreasonable delay. It has been held that a requirement that the
shipment of goods should be the 'earliest possible' must be construed as meaning that the goods
should be sent as soon as the seller could possibly send them, and that it signified rather more than
that the goods should be sent within a reasonable time.

"The question as to what is a reasonable time for the delivery of the goods by the seller is to be
determined by the circumstances attending the particular transaction, such as the character of the
goods, and the purpose for which they are intended, the ability of the seller to produce the goods if
they are to be manufactured, the facilities available for transportation, and the distance the goods
must be carried, and the usual course of business in the particular trade." (35 Cyc., 181-184.)

The record shows, as we have stated, that the plaintiff did all within its power to have the
machinery arrive at Manila as soon as possible, and immediately upon its arrival it notified the
purchaser of the fact and offered to deliver it to him. Taking these circumstances into account, we
hold that the said machinery was brought to Manila by the plaintiff within a reasonable time.

Therefore, the plaintiff has not been guilty of any delay in the fulfillment of its obligation, and,
consequently, it could not have incurred any of the liabilities mentioned by the intervenor in its
counterclaim or set-off.
Chavez vs. Gonzales, 32 SCRA 547
February 19, 2017cdizonblog
July 1963, Rosendo Chavez, plaintiff, brought his typewriter to Fructuoso Gonzales, defendant, a
typewriter repairman for the cleaning and servicing of the said typewriter. Three months later, the
plaintiff paid P6.00 to the defendant for the purchase of spare parts. Because of the delay of the
repair the plaintiff decided to recover the typewriter from the defendant which was wrapped like a
package. When he opened and examined it, the interior cover and some parts and screws were
missing. October 29, 1963 the plaintiff sent a letter to the defendant for the return of the missing
parts, the interior cover and the sum of P6.00. The following day, the defendant returned to the
plaintiff only some of the missing parts, the interior cover and the P6.00.
August 29, 1964, the plaintiff had his typewriter repaired by Freixas Business Machines, that cost
him a total of P89.85. A year later, the plaintiff filed an action before the City Court of Manila,
demanding from the defendant the payment for total of P1,190.00 for damages including attorney’s
fees. The defendant made no denials.
The repair invoice shows that the missing parts had a total value of P31.10 only.
Wherefore, judgment is hereby rendered ordering the defendant to pay the plaintiff the sum of
P31.10, and the costs of suit.
Chaves appealed, because it only awarded the value of the missing parts of the typewriter, instead
of the whole cost of labor and materials that went into the repair of the machine. It is clear that the
defendant-appellee contravened the tenor of his obligation because not only did he not repair the
typewriter but returned it “in shambles”.
IN VIEW OF THE FOREGOING REASONS, the appealed judgment is hereby modified, by ordering the
defendant-appellee to pay, as he is hereby ordered to pay, the plaintiff-appellant the sum of P89.85,
with interest at the legal rate from the filing of the complaint. Costs in all instances against appellee
Fructuoso Gonzales.
Whether or not the defendant is liable for the total cost of repair.
Yes. For such contravention, he is liable under Article 1167 of the Civil Code. For the cost of
executing the obligation in a proper manner. The cost of the execution of the obligation in this case
should be the cost of the labor or service expended in the repair of the typewriter.

VICENTE SINGSON ENCARNACION, plaintiff-appellee, vs.JACINTA BALDOMAR, ET AL., defendants-

G.R. No. L-264 October 4, 1946
FACTS: Vicente Singson Encarnacion his house to Jacinto Baldomar and her son, Lefrado Fernando,
upon a month-to-month basis. On March 16, 1945, and on April 7, of the same year, plaintiff Singson
Encarnacion notified defendants, the said mother and son, to vacate the house above-mentioned on
or before April 15, 1945, because plaintiff needed it for his offices as a result of the destruction of
the building where said plaintiff had said offices before. Despite this demand, defendants insisted
on continuing their occupancy. When the original action was lodged with the Municipal Court of
Manila, defendants were in arrears in the payment of the rental corresponding to said month. That
rental was paid prior to the hearing of the case in the municipal court, as a consequence of which
said court entered judgment for restitution and payment of rentals at the rate of P35 a month from
May 1, 1945, until defendants completely vacate the premises.
The defendants argue that the contract which they had celebrated with plaintiff since the beginning
authorized them to continue occupying the house indefinitely.
CFI ruled in favor of the plaintiff.
ISSUE: W/N the lease contract was for an indefinite period of time hence would entitle the
defendants the occupancy of the property in question as long as they pay rentals
HELD: NO. The Court of First Instance gave more credit to plaintiff’s witness, Vicente Singson
Encarnacion, jr., who testified that the lease had always and since the beginning been upon a month-
to-month basis. The court added in its decision that this defense which was put up by defendant’s
answer, for which reason the Court considered it as indicative of an eleventh-hour theory. We think
that the Court of First Instance was right in so declaring. Furthermore, carried to its logical
conclusion, the defense thus set up by defendant Lefrado Fernando would leave to the sole and
exclusive will of one of the contracting parties (defendants in this case) the validity and fulfillment
of the contract of lease, within the meaning of article 1256 of the Civil Code, since the continuance
and fulfillment of the contract would then depend solely and exclusively upon their free and
uncontrolled choice between continuing paying the rentals or not, completely depriving the owner
of all say in the matter. If this defense were to be allowed, so long as defendants elected to continue
the lease by continuing the payment of the rentals, the owner would never be able to discontinue it;
conversely, although the owner should desire the lease to continue, the lessees could effectively
thwart his purpose if they should prefer to terminate the contract by the simple expedient of
stopping payment of the rentals. This, of course, is prohibited by the aforesaid article of the Civil
Eleizegui v. The Manila Lawn Tennis Club Digest G.R. No. 967
Eleizegui v. The Manila Lawn Tennis Club
G.R. No. 967 May 19, 1903

A contract of lease was executed on January 25, 1980 over a piece of land owned by the plaintiffs
Eleizegui (Lessor) to the Manila Lawn Tennis Club, an English association (represented by Mr.
Williamson) for a fixed consideration of P25 per month and accordingly, to last at the will of the
lessee. Under the contract, the lessee can make improvements deemed desirable for the comfort
and amusement of its members. It appeared that the plaintiffs terminated the lease right on the first
month. The defendant is in the belief that there can be no other mode of terminating the lease than
by its own will, as what they believe has been stipulated.

As a result the plaintiff filed a case for unlawful detainer for the restitution of the land claiming
that article 1569 of the Civil Code provided that a lessor may judicially dispossess the lessee upon
the expiration of the conventional term or of the legal term; the conventional term — that is, the one
agreed upon by the parties; the legal term, in defect of the conventional, fixed for leases by articles
1577 and 1581. The Plaintiffs argued that the duration of the lease depends upon the will of the
lessor on the basis of Art. 1581 which provides that, "When the term has not been fixed for the
lease, it is understood to be for years when an annual rental has been fixed, for months when the
rent is monthly. . . ." The second clause of the contract provides as follows: "The rent of the said land
is fixed at 25 pesos per month."

The lower court ruled in favor of the Plaintiffs on the basis of Article 1581 of the Civil Code, the law
which was in force at the time the contract was entered into. It is of the opinion that the contract of
lease was terminated by the notice given by the plaintiff. The judgment was entered upon the
theory of the expiration of a legal term which does not exist, as the case requires that a term be
fixed by the courts under the provisions of article 1128 with respect to obligations which, as is the
present, are terminable at the will of the obligee.

ISSUE: a) Whether or not the parties have agreed upon the duration of the lease
b) Whether or not the lease depends upon the will of the lessee


a) YES, the parties have agreed upon a term hence Art. 1581 is inapplicable.

The legal term cannot be applied under Art 1581 as it appears that there was actually an agreement
between the parties as to the duration of the lease, albeit implied that the lease is to be dependent
upon the will of the lessee. It would be absurd to accept the argument of the plaintiff that the
contract was terminated at its notice, given this implication.

Interestingly, the contract should not be understood as one stipulated as a life tenancy, and still less
as a perpetual lease since the terms of the contract express nothing to this effect, even if they
implied this idea. If the lease could last during such time as the lessee might see fit, because it has
been so stipulated by the lessor, it would last, first, as long as the will of the lessee — that is, all his
life; second, during all the time that he may have succession, inasmuch as he who contracts does so
for himself and his heirs. (Art. 1257 of the Civil Code.) The lease in question does not fall within any
of the cases in which the rights and obligations arising from a contract can not be transmitted to
heirs, either by its nature, by agreement, or by provision of law. Moreover, being a lease, then it must
be for a determinate period. (Art. 1543.) By its very nature it must be temporary, just as by reason
of its nature, an emphyteusis must be perpetual, or for an unlimited period. (Art. 1608.)

B) The duration of the lease does not depend solely upon the will of the Lessee (defendant).
It cannot be concluded that the termination of the contract is to be left completely at the will of the
lessee simply because it has been stipulated that its duration is to be left to his will.

The Civil Code has made provision for such a case in all kinds of obligations. In speaking in general
of obligations with a term it has supplied the deficiency of the former law with respect to the
"duration of the term when it has been left to the will of the debtor," and provides that in this case
the term shall be fixed by the courts. (Art. 1128, sec. 2.) In every contract, as laid down by the
authorities, there is always a creditor who is entitled to demand the performance, and a debtor
upon whom rests the obligation to perform the undertaking. In bilateral contracts the contracting
parties are mutually creditors and debtors. Thus, in this contract of lease, the lessee is the creditor
with respect to the rights enumerated in article 1554, and is the debtor with respect to the
obligations imposed by articles 1555 and 1561. The term within which performance of the latter
obligation is due is what has been left to the will of the debtor. This term it is which must be fixed by
the courts.

The only action which can be maintained under the terms of the contract is that by which it is
sought to obtain from the judge the determination of this period, and not the unlawful detainer
action which has been brought — an action which presupposes the expiration of the term and
makes it the duty of the judge to simply decree an eviction. To maintain the latter action it is
sufficient to show the expiration of the term of the contract, whether conventional or legal; in order
to decree the relief to be granted in the former action it is necessary for the judge to look into the
character and conditions of the mutual undertakings with a view to supplying the lacking element
of a time at which the lease is to expire.