VILLAROEL vs ESTRADA G.R. No.

47362 December 19, 1940

FACTS:

On May 9, 1912, Alejandro Callao, mother of Juan Villaroel, obtained a loan of P1,000 from spouses
Mariano Estrada and Severina payable after seven years.

Alejandra died, leaving Juan Villaroel as sole heir, Spouses Mariano Estrada and Severina also died,
leaving Bernardino Estrada as sole heir.

On August 9, 1930, Juan Villaroel signed a document in which he declared to pay the debt of his
deceased mother in the amount of P1,000 with legal interest of 12% per annum.

The Court of First Instance of Laguna ordered Juan Villaroel to pay the amount of P1,000 with an interest
of 12% per annum since August 9, 1930 until full payment

Villaroel appealed.

ISSUE: Whether or not the right to prescription may be waived or renounced.

HELD: Yes, right to prescription may be waived or renounced. As a general rule, when a debt has already
prescribed, it cannot be imposed by the creditor. However, a new contract which recognizes and
assumes the prescribed debt is an exception, for it would be valid and enforceable. Hence, a person who
acknowledges the correctness of the debt and promises to pay it despite knowing that the debt has
already prescribed, such as the case at bar, waived the benefit of the prescription.

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Labels: Obligations and Contracts

SAGRADA ORDEN VS NACOCO G.R. NO. L-3756 JUNE 30, 1952

FACTS:

The land in question belongs to plaintiff Sagrada Orden in whose name the title was registered before
the war

On January 4, 1943, during the Japanese military occupation, the land was acquired by a Japanese
corporation by the name of Taiwan Tekkosho

After liberation on April 4, 1946, the Alien Property Custodian of the United States of America took
possession, control, and custody of the property pursuant to the Trading with the Enemy Act

The property was occupied by the Copra Export Management Company under a custodian agreement
with US Alien Property Custodian. When it vacated the property, it was occupied by defendant National
Coconut Corporation

The plaintiff made claim to the said property before the Alien Property Custodian. Alien Property
Custodian denied such claim

It bought an action in court which resulted to the cancellation of the title issued in the name of Taiwan
Tekkosho which was executed under threats, duress, and intimidation; reissuance of the title in favor of
the plaintiff; cancellation of the claims, rights, title, interest of the Alien property Custodian; and
occupant National Coconut Corporation’s ejection from the property. A right was also vested to the
plaintiff to recover from the defendants rentals for its occupation of the land from the date it vacated.

Defendant contests the rental claims on the defense that it occupied the property in good faith and
under no obligation to pay rentals.
ISSUE: Whether or not the defendant is obliged to pay rentals to the plaintiff

HELD: No. Nacoco is not liable to pay rentals prior the judgment. If defendant-appellant is liable at all, its
obligations, must arise from any of the four sources of obligations, namley, law, contract or quasi-
contract, crime, or negligence. (Article 1089, Spanish Civil Code.) Defendant-appellant is not guilty of any
offense at all, because it entered the premises and occupied it with the permission of the entity which
had the legal control and administration thereof, the Allien Property Administration. Neither was there
any negligence on its part.

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Labels: Obligations and Contracts

PUYAT & SONS INC vs CITY OF MANILA G.R. No. L-17447 April 30, 1963

FACTS:

Plaintiff Gonzalo Puyat & Sons Inc is engaged in the business of manufacturing and selling all kinds of
furniture.

Acting pursuant to an ordinance, the defendant City Treasurer of Manila assessed from plaintiff retail
dealer’s tax the sales of furniture manufactured and sold by it and its factory site.

All assessments were paid by plaintiff without protest in the erroneous belief that it was liable thereof
not knowing that pursuant to an ordinance, it is exempt from the payment of taxes being a
manufacturer of various kinds of furniture.
After learning about the ordinance, plaintiff filed with defendant City Treasurer of Manila a formal
request for refund of the retail dealer’s taxes unduly paid.

The City Treasurer, however, denied the said request for refund.

ISSUE: Whether or not the defendant is obliged to refund the amount which the plaintiff paid

HELD: Yes. The plaintiff was actually exempted from paying the tax assessed, hence, it was clearly an
error or mistake which makes it fall under Art 2154 of solution indebiti. Art 2154 provides that if
something is received when there is no right to demand it, and it was unduly delivered through mistake,
the obligation to return it arises.

Alongside with this, Art 2156 is also applicable which states that if the payer was in doubt whether the
debt was due, he may recover if he proves that it was not due. Plaintiff had duly proved that taxes were
not lawfully due. Therefore, there is no doubt that the provisions of solution indebiti apply in this case.

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PEOPLE’S CAR VS COMMANDO SECURITY G.R. L-36840 MAY 22, 1973

FACTS:

People’s Car entered into a contract with Commando Security to safeguard and protect the business
premises of the plaintiff from theft, pilferage, robbery, vandalism, and all other unlawful acts of any
person/s prejudicial to the interest of the plaintiff.
On April 5, 1970, around 1:00am, defendant’s security guard on duty at plaintiff’s premises, without any
authority, consent, approval, or orders of the plaintiff and/or defendant brought out the compound of
the plaintiff a car belonging to its customer and drove said car to a place or places unknown, abandoning
his post and while driving the car lost control of it causing it to fall into a ditch.

As a result, the car of plaintiff’s customer, which had been left with plaintiff for servicing and
maintenance, suffered extensive damage besides the car rental value for a car that plaintiff had to rent
and make available to its customer, Joseph Luy, to enable him to pursue his business and occupation.

Plaintiff instituted a claim against defendant for the actual damages it incurred due to the unlawful act
of defendant’s personnel citing paragraph 5 of the contract wherein defendant accepts sole
responsibility for the acts done during their watch hours.

Defendant claimed that they may be liable but its liability is limited under paragraph 4 of the contract
which provides that its liability shall not exceed P1,000 per guard post for loss or damage through the
negligence of its guards during the watch hours provided that it is reported within 24 hours of the
incident.

ISSUE: Whether or not the defendant is obliged to indemnify the plaintiff for the entire costs as result of
the incident

HELD: Yes. Plaintiff was in law liable to its customer for the damages caused the customer’s car, which
had been entrusted into its custody. Plaintiff therefore was in law justified in making good such damages
and relying in turn on defendant to honor its contract and indemnify it for such undisputed damages,
which had been caused directly by the unlawful and wrongful acts of defendant’s security guard in
breach of their contract.

Plaintiff in law could not tell its customer that under the Guard Service Contract it was not liable for the
damage but the defendant since the customer could not hold defendant to account for the damages as
he had no privity of contract with defendant.

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Labels: Obligations and Contracts

GUTIERREZ VS GUTIERREZ G.R. NO. 34840 SEPTEMBER 23, 1931

FACTS:

On February 2, 1930, a passenger truck and an automobile of private ownership collided while
attempting to pass each other on a bridge. The truck was driven by the chauffeur Abelardo Velasco, and
was owned by saturnine Cortez. The automobile was being operated by Bonifacio Gutierrez, a lad 18
years of age, and was owned by Bonifacio’s father and mother, Mr. and Mrs. Manuel Gutierrez. At the
time of the collision, the father was not in the car, but the mother, together with several other members
of the Gutierrez family were accommodated therein.

The collision between the bus and the automobile resulted in Narciso Gutierrez suffering a fractured
right leg which required medical attendance for a considerable period of time.

ISSUE: Whether or not both the driver of the truck and automobile are liable for damages and
indemnification due to their negligence. What are the legal obligations of the defendants?

HELD: Bonifacio Gutierrez’s obligation arises from culpa aquiliana. On the other hand, Saturnino Cortez’s
and his chauffeur Abelardo Velasco’s obligation rise from culpa contractual.

The youth Bonifacio was na incompetent chauffeur, that he was driving at an excessive rate of speed,
and that, on approaching the bridge and the truck, he lost his head and so contributed by his negligence
to the accident. The guaranty given by the father at the time the son was granted a license to operate
motor vehicles made the father responsible for the acts of his son. Based on these facts, pursuant to the
provisions of Art. 1903 of the Civil Code, the father alone and not the minor or the mother would be
liable for the damages caused by the minor.
The liability of Saturnino Cortez, the owner of the truck, and his chauffeur Abelardo Velasco rests on a
different basis, namely, that of contract.

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Labels: Obligations and Contracts

GUTIERREZ HERMANOS vs ORENSE G.R. No. 9188 December 4, 1914

FACTS:

On and before Februaru 14, 1907, Engracio Orense had been the owner of a parcel of land in
Guinobatan, Albay.

On February 14, 1907, Jose Duran, a nephew of Orense, sold the property for P1,500 to Gutierrez
Hermanos, with Orense’s knowledge and consent, executed before a notary a public instrument. The
said public instrument contained a provision giving Duran the right to repurchase it for the same price
within a period of four years from the date of the said instrument.

Orense continued occupying the land by virtue of a contract of lease.

After the lapse of four years, Gutierrez asked Orense to deliver the property to the company and to pay
rentals for the use of the property.

Orense refused to do so. He claimed that the sale was void because it was done without his authority
and that he did not authorize his nephew to enter into such contract.

During trial, Orense was presented as witness of the defense. He states that the sale was done with his
knowledge and consent. Because of such testimony, it was ascertained that he did give his nephew,
Duran, authority to convey the land. Duran was acquitted of criminal charges and the company
demanded that Orense execute the proper deed of conveyance of the property.

ISSUE: Whether or not Orense is bound by Duran’s act of selling the former’s property

HELD: Yes. It was proven during trial that he gave his consent to the sale. Such act of Orense impliedly
conferred to Duran the power of agency. The principal must therefore fulfill all the obligations
contracted by the agent, who acted within the scope of his jurisdiction.

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Labels: Obligations and Contracts

DBP VS CONFESOR G.R. No. 48889 May 11, 1988

FACTS:

On February 10, 1940, spouses Patricio Confesor and Jovita Villafuerte obtained an agricultural loan
from Agricultural and Industrial Bank, now Development Bank of the Philippines, in the sum of P2,000,
as evidenced by a promissory note of said date whereby they bound themselves jointly and severally to
pay the amount in ten equal yearly amortizations.

As the obligation remained unpaid even after the lapse if the ten-year period, Confesor, who was then a
member of the Congress of the Philippines, executed a second promissory note on April 11, 1961,
expressly acknowledging the said loan and promising to pay the same on or before June 15, 1961.

The spouses still failed to pay the obligation on the specified date. As a result, the DBP filed a complaint
on September 11, 1970 in the City Court of Iloilo City. The city court ordered payment from spouses. The
CFI of Iloilo reversed the decision. Hence, this petition.
ISSUE: Whether or not a promissory which was executed in consideration of a previous promissory note
which has already been barred by prescription is valid.

HELD: Yes, the second promissory note is valid because the said promissory note is not a mere
acknowledgement of the debt that has prescribed already. Rather, it is a new promise to pay the debt. A
new promise is a new cause of action. Although a debt barred by prescription is enforceable, a new
contract recognizing and assuming the prescribed debt would be valid and enforceable.

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Labels: Obligations and Contracts

CRUZ vs TUASON & CO. G.R. No. L-23749 April 29, 1977

FACTS:

As requested by the Deudors, the family of Telesforo Deudor who laid claim in question on the strength
of an informacion posesoria, Cruz made permanent improvements on the said land having an area of
more or less 20 quinones.

The improvements were valued at P30,400 and for which he incurred expenses amounting to P7,781.74

In 1952, Tuason & Co. availed of Cruz’ services as an intermediary with the Deudors, to work for the
amicable settlement in a civil case. The said case involved 50 quiones of land, of which the 20 quiones of
land mentioned formed part.

A compromise agreement between the Deudors and Tuason & Co. was entered into on 1963 which was
approved by court.
Cruz alleged that Tuason & Co. promised to convey him the 3,000 sq. meters of land occupied by him
which was part of the 20 quiones of land within 10 years from the date of signing of the compromise
agreement between the Deudors and the latter as consideration of his services. The said land was not
conveyed to him by Tuason & Co.

Cruz further alleged that Tuason & Co. was unjustly enriched at his expense since they enjoyed the
benefits of the improvements he made on the land acquired by the latter.

The trial court dismissed the case on the ground that there was no cause of action. Hence, this appeal.

ISSUE: Whether or not a presumed quasi-contract be emerged as against one part when the subject
matter thereof is already covered by a contract with another party.

HELD: From the very language of this provision, it is obvious that a presumed qauasi-contract cannot
emerge as against one party when the subject mater thereof is already covered by an existing contract
with another party. Predicated on the principle that no one should be allowed to unjustly enrich himself
at the expense of another, Article 2124 creates the legal fiction of a quasi-contract precisely because of
the absence of any actual agreement between the parties concerned. Corollarily, if the one who claims
having enriched somebody has done so pursuant to a contract with a third party, his cause of action
should be against the latter, who in turn may, if there is any ground therefor, seek relief against the
party benefited. It is essential that the act by which the defendant is benefited must have been
voluntary and unilateral on the part of the plaintiff. As one distinguished civilian puts it, "The act is
voluntary. because the actor in quasi-contracts is not bound by any pre-existing obligation to act. It is
unilateral, because it arises from the sole will of the actor who is not previously bound by any reciprocal
or bilateral agreement. The reason why the law creates a juridical relations and imposes certain
obligation is to prevent a situation where a person is able to benefit or take advantage of such lawful,
voluntary and unilateral acts at the expense of said actor." In the case at bar, since appellant has a
clearer and more direct recourse against the Deudors with whom he had entered into an agreement
regarding the improvements and expenditures made by him on the land of appellees. It Cannot be said,
in the sense contemplated in Article 2142, that appellees have been enriched at the expense of
appellant.

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Labels: Obligations and Contracts

CANGCO VS MANILA RAILROAD COMPANY G.R. L-12191 OCTOBER 14, 1918

FACTS:

On January 20, 1915, Jose Cangco was riding the train of Manila Railroad Company where he was an
employee. As the train drew near to his destination, he arose from his seat. When he was about to alight
from the train, Cangco accidentally stepped on a sack of watermelons which he failed to notice because
it was already 7:00pm and it was dim when it happened. As a result, he slipped and fell violently on the
platform. His right arm was badly crushed and lacerated which was eventually amputated.

Cangco sued Manila Railroad Company on the ground of negligence of its employees placing the sacks of
melons upon the platform and in leaving them so placed as to be a menace to the security of passenger
alighting from the company’s trains.

The company’s defense was that granting that its employees were negligent in placing an obstruction
upon the platform, the direct and proximate cause of the injury suffered by plaintiff was his own
contributing negligence.

ISSUE: Whether or not there was a contributing negligence on the part of the plaintiff.

HELD: In determining the question of contributory negligence in performing such act – that is to say,
whether the passenger acted prudently or recklessly – the age, sex, and physical condition of the
passenger are circumstances necessarily affecting the safety of the passenger, and should be
considered.
The place was perfectly familiar to the plaintiff as it was his daily custom to get on and off the train at
the station. There could, therefore, be no uncertainty in his mind with regard either to the length of the
step which he was required to take or the character of the platform where he was alighting. The
Supreme Court’s conclusion was that the conduct of the plaintiff in undertaking to alight while the train
was yet slightly under way was not characterized by imprudence and that therefore he was not guilty of
contributory negligence.

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Labels: Obligations and Contracts

ANSAY VS NATIONAL DEVELOPMENT COMPANY G.R No. L-13667 April 29, 1960

FACTS:

On July 25, 1956, Primitivo Ansay et al filed against the Board of Directors of the National Development
Company in the Court of First Instance of Manila a complaint praying for a 20% Christmas bonus for the
years 1954 and 1955.

Appellants contend that there exists a cause of action in their complaint because their claim rests on
moral grounds or what in brief is defined by law as a natural obligation.

ISSUE: Whether or not the Christmas bonus is demandable.

HELD: No, it is not demandable. Appellants admit that appellees are not under legal obligation to give
such claimed bonus and such grant only arises from a moral obligation or natural obligation. However,
natural obligation is only enforceable with the presence of the element of voluntary fulfillment by the
obligor. In the case at bar, there has been no voluntary performance on the part of the appellees.
Hence, the bonus is not demandable.

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Labels: Obligations and Contracts

Adille vs CA G.R. No. L-44546 January 29, 1988

FACTS:

The property in dispute was originally owned by Felisa Alzul who got married twice. Her child in the first
marriage was petitioner Rustico Adile and her children in the second marriage were respondents
Emetria Asejo et al.

During her lifetime, Felisa Alzul sodl the property in pacto de retro with a three-year repurchase period.

Felisa died before she could repurchase the property.

During the redemption period, Rustico Adille repurchased the property by himself alone at his own
expense, and after that, he executed a deed of extra-judicial partition representing himself to be the
only heir and child of his mother Felisa. Consequently, he was able to secure title in his name alone.

His half-siblings, herein respondents, filed a case for partition and accounting claiming that Rustico was
only a trustee on an implied trust when he redeemed the property, and thus, he cannot claim exclusive
ownership of the entire property.

ISSUE:

Whether or not a co-owner may acquire exclusive ownership over the property held in common.

Whether or nor Rustico had constituted himself a negotiorum gestor

HELD: No. The right to repurchase may be exercised by a co-owner with respect to his share alone.
Although Rustico Adille redeemed the property in its entirety, shouldering the expenses did not make
him the owner of all of it.
Yes. The petitioner, in taking over the property, did so on behalf of his co-heirs, in which event, he had
constituted himself a negotiorum gestor under Art 2144 of the Civil Code, or for his exclusive benefit, in
which case, he is guilty of fraud, and must act as trustee, the respondents being the beneficiaries,
pursuant to Art 1456.

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ANDRES VS MANTRUST G.R. NO. 82670 SEPTEMBER 15, 1989

FACTS:

Andres, using the business name “Irene’s Wearing Apparel” was engaged in the manufacture of ladies
garments, children’s wear, men’s apparel and linens for local and foreign buyers. Among its foreign
buyers was Facts of the United States.

Sometime in August 1980, Facts instructed the First National State Bank (FNSB) of New Jersey to transfer
$10,000 to Irene’s Wearing Apparel via Philippine National Bank (PNB) Sta. Cruz, Manila branch. FNSB
instructed Manufacturers Hanover and Trust Corporation (Mantrust) to effect the transfer by charging
the amount to the account of FNSB with private respondent.

After Mantrust effected the transfer, the payment was not effected immediately because the payee
designated in the telex was only “Wearing Apparel.” Private respondent sent PNB another telex stating
that the payment was to be made to “Irene’s Wearing Apparel.”

On August 28, 1980, petitioner received the remittance of $10,000.

After learning about the delay, Facets informed FNSB about the situation. Facts, unaware that petitioner
had already received the remittance, informed private respondent and amended its instruction y asking
it to effect the payment to Philippine Commercial and Industrial Bank (PCIB) instead of PNB.
Private respondent, also unaware that petitioner had already received the remittance, instructed PCIB
to pay $10,000 to petitioner. Hence, petitioner received another $10,000 which was charged again to
the account of Facets with FNSB.

FNSB discovered that private respondent had made a duplication of remittance. Private respondent
asked petitioner to return the second remittance of $10,000 but the latter refused to do so contending
that the doctrine of solution indebiti does not apply because there was negligence on the part of the
respondents and that they were not unjustly enriched since Facets still has a balance of $49,324.

ISSUE: Whether or not the private respondent has the right to recover the second $10,000 remittance it
had delivered to petitioner

HELD: Yes. Art 2154 of the New Civil Code is applicable. For this article to apply, the following requisites
must concur: 1) that he who paid was not under obligation to do so; and 2) that payment was made by
reason of an essential mistake of fact.

There was a mistake, not negligence, in the second remittance. It was evident by the fact that both
remittances have the same reference invoice number.