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YULO [1916]
RFC vs. CA
♦ June 7, 1948 – Dominguez signed a contract with Realty Investments,
Inc. to purchase a registered lot. He made a downpayment of 39.98
and promising to pay the balance in 119 monthly instalments.
♦ After 3 months he obtained a loan from RFC. RFC agreed to loan him
10,000 on the security of a mortgage upon the house and lot.
♦ September 17, 1948 – RFC requested that the necessary documents
for the transfer of title of the vendee be executed so that it can be
registered together with the mortgage, this with the assurance that as
soon as title to the lot had been issued in the name of Dominguez and
the mortgage in favour of RFC registered as first lien on the lot and
building thereon, the RFC would ay Realty Investments “the balance of
the purchase price of the lot in the amount of P3,086.98.”
♦ Relying on the assurance made by RFC, Realty investment deeded
over the lot to Dominguez “free of all liens and encumbrances” and
thereafter the mortgage deed was recorded in the Registry of Deeds in
♦ Once the mortgage was recorded RFC released to Dominguez P6,500
but the remainder of the loan was never released because Dominguez
defaulted in the payment of the amortization due and as a
consequence RFC foreclosed the mortgage. RFC bought the
JAUCIAN vs. QUEROL [1918] mortgaged property in the foreclosure sale and obtain title for it.
♦ RFC refused to ay Realty Investments the balance of the purchase
price of the lot.
♦ TC allowed recovery from Dominguez
♦ CA reversed the verdict and sentenced RFC to pay.
♦ It is contended by RFC that its obligation to pay “has been modified if
not extinguished” by the letter dated September 20, 1948:
o We want to inform you that, at the request of Mr. Dominguez,
we are agreeable to have the amount paid us at the second
release of the proceeds of his loan.

Issue: WON RFC is liable for the balance of the purchase price of the lot? YES

♦ Dominguez and RFC kept the Realty Investment ignorant on the terms
and conditions of their agreement concerning the loan of 10,000 and
the manner that sum was to be released
♦ Realty Investment was induced to part with his title to a piece of realty
property upon the assurance of RFC that it would itself pay the balance
of the purchase price due from the Dominguez after its mortgage lien
thereon had been registered.
♦ If RFC was not to make any further release of funds on the loan, or if
such release was to subject to future developments, it was the duty of
RFC to answer the letter dated September 20, and to inform Realty is liable for the entire obligation and each creditor is entitled to demand the
Investment of the terms and conditions of the loan. The officers of whole obligation. In accordance with this, active solidarity consists in the
RFC failed to do this and cannot be upheld by the courts of justice. authority of each creditor to claim and enforce the rights of all.
♦ It was the RFC that induced Realty Investment to issue title to the lot The Court said that the question as to who should sue the spouses was a
free from all encumbrances to Dominguez on its guaranty. personal issue between Quiombing and Biscocho in which the spouses had no
♦ Dominguez’s original obligation to pay realty was affirmed by RFC right to interfere. It did not matter who filed the complaint because the spouses
upon the conveyance of the title of the lot to Dominguez and the were liable to either of the 2 as a solidary creditor. If they satisfied one
registration thereon of the mortgage in favour of RFC. This condition creditor, it would also discharge their obligation to the other.
was already fulfilled hence RFC’s obligation to pay the remaining
balance became due and demandable. Also according to Art 1212 of CC “Each one of the solidary creditors may do
whatever may be useful to the others, but not anything w/c may prejudicial to
the latter.” And to Art 1214 “the debtor may pay any of the solidary creditors; but
QUIOMBING vs. CA [1990] if any demand … payment should be made to him.”
Petitioner: Nicencio Tan Quiombing
Respondent: CA, Spouses Francisco and Manuelita Saligo Suing for recovery of the balance of the contract price is certainly useful. And if
Quiombing eventually collects, Biscocho may claim his share later on.
Petition to review CA decision
Cruz, J. Here the Court also differentiated between indispensable and necessary
parties. Indispensable parties are those w/ such interest in the controversy that
Facts: a final decree will affect their rights therefore the court cannot proceed w/o them.
On Aug. 30, 1983, a “Construction and Service Agreement” was entered into by While necessary parties are those whose presence are necessary to adjudicate
both parties wherein petitioner and Dante Biscocho jointly and severally bound the controversy but whose interests are so remote that a final decree won’t
themselves to construct a house for the Saligo spouses for the contract price of affect them.
Php 137,940.
On Oct. 10, 1984, petitioner and Manuelita Saligo entered into a 2nd agreement Held: Petition is Granted. CA decision finding for the spouses Saligo is Set
wherein the latter acknowledged the completion of the house and undertook to Aside.
pay the balance of the contract price.
On Nov. 19, 1984, Manuelita Saligo signed a promissory note for Php INCIONG vs. CA [1996]
125,363.50, representing the balance of the contract price, which she promised
to pay on or before Dec. 31, 1984
For failure to pay the balance of the contract price, petitioner filed a complaint
for recovery of the amount plus charges and interest.
The spouses moved to dismiss the complaint contending that Biscocho was an
indispensable party to the case and should be included as a co-plaintiff.

1) WON the 2nd solidary creditor is an indispensable party in this case?
2) WON 1 of 2 solidary creditors may sue by himself alone for the
recovery of amounts due to both of them, w/o joining the other creditor
as co-plaintiff? Yes

The Court disagrees w/ the private respondents:
According to Tolentino, a joint obligation is one wherein each of the debtors is
liable only for a proportionate part of the debt and each creditor is entitled to
only a proportionate part of the credit, while in a solidary obligation each debtor
1. WON a creditor can sue the surviving spouse of a decedent in an
ordinary proceeding for the collection of a sum of money chargeable
against the conjugal partnership. – NO. Proper remedy would be to file a
claim in the settlement of the decedent’s estate or if none has been
commenced, he can file a petition either for the issuance of letters of
YNCHAUSTI vs. YULO, SUPRA administration or for the allowance of will, depending on whether its
testate/intestate. No shortcut by lumping claim against Alipios w/those
against the Manuels.
Purita ALIPIO, petitioner, vs. COURT OF APPEALS and Romeo Jaring, ♥ Alipio’s husband died before case was instituted. Thus, Rule 3, Sec. 20 of
represented by his Atorney-in-Fact Ramon Jaring [2000]
the 1997 Rules of Civ Proc is not applicable since it only applies to
♥ Jaring (Romeo) was the lessee of a 14.5 hec fishpond in Barito, Mabuco, defendants who die during the pendency of the case.
Hermosa, Bataan. Lease was for 5 yrs ending on Sep. 12, 1990. ♥ CC Art. 161 (1) provides that the obligation of the Alipios is chargeable
♥ June 19, 1987 til the end of the lease period, Jaring subleased the fishpond against their conjugal partnership since it was contracted by the spouses for
to sps Alipio and sps Manuel. Stipulated rent: P485,600.00 payable in 2 the benefit of the conjugal partnership. When petitioner’s spouse died, their
installments of P300k and P185,600.00. 2nd installment due on June 30, CP was dissolved & debts chargeable against it are to be paid in the
1989. They all signed the contract. settlement of estate proceedings in accordance w/Rule 73, Sec. 2 w/c
♥ Sublessees failed to pay entire 2nd installment, leaving a balance of provides that the community property will be inventoried, administered, &
liquidated and debts thereof paid, in the testate or intestate proceedings of
P50,600.00 w/c they failed to pay despite Alipio’s demands. Thus, he filed a
the deceased spouse.
case against said sublessees asking for payment of the balance or
♥ Calma vs.Tanedo: No complaint for collection of indebtedness chargeable
rescission of the contract should they fail to pay the balance.
to the CP can be brought against the surviving spouse. Claim must be
♥ Defense of Purita Alipio: petitioned for the dismissal of the case invoking made in the proceedings for the liquidation & settlement of the CP.
Rule 3, Sec. 21 of the 1964 Rules of Court1, claiming that such was Surviving spouse’s powers of admin ceases & is passed on to court-
applicable since her husband and co-sublessee passed away prior to the appointed administrator. Affirmed in Ventura vs. Militante where Court held
filing of this action. Said rule has been amended by Rule 3, Sec. 20, 1997 that lack of liquidation proceedings does not mean that the CP continues.
Rules of Civil Procedure2. Creditor may apply for letters of admin in his capacity as a principal creditor.
♥ Trial court: denied Alipio’s petition. Ratio: she was a party to the contract & ♥ Cases invoked by CA are not applicable, being based on different set of
should be independently impleaded together w/the Manuel sps. Death of facts. In Climaco, claim was not against the CP & it did not survive the
her husband merely resulted in his exclusion from the case. Petitioner & death of the defendant but not as to the remaining defendant. Imperial, on
Manuels ordered to pay balance + P10k atty’s fees and costs of suit. the other hand, involved spouses who were solidarily liable, thus, surviving
♥ CA: dismissed appeal. Rule invoked is not applicable. The action for spouse could be independently sued in an ordinary action for the
recovery of a sum of money does not survive the death of the defendant, enforcement of the entire obligation.
thus the remaining defendants cannot avoid the action by claiming that ♥ Note that for marriages governed by CPG, obligations entered into by sps
such death totally extinguished their obligation. When the action is solidary, are chargeable vs their CP & partnership is primarily bound for the
creditor may bring his action against any of the debtors obligated in repayments. They’ll be impleaded as representatives of the CP and concept
solidum. Alipio’s liability is independent of & separate from her husband’s. of joint/solidary liability does not apply. At best, it will not be solidary but
(Climaco vs. Siy Uy, Imperial vs. David, and Agacoili vs. Vda de Agcaoili) joint.
Issues & Ratio: 2. WON trial court properly ordered Manuels & petitioner to pay the
balance w/o specifying whether it should be paid jointly or solidarily. –
NO. It should have specified the debtors’ liability.
When the action is for recovery of money, debt or interest thereon, and the defendant dies before ♥ CC Art. 1207: Concurrence of 2 or more creditors or 2 or more debtors in
final judgment in the CFI, it shall be dismissed to be prosecuted in the manner especially provided in one & the same obligation does not imply a solidary liability. Solidary liability
these rules. only arises when the obligation expressly so states or when the law or
When the action is for the recovery of money arising from contract, express or implied and the nature of the obligation requires solidarity. Otherwise, it’s presumed to be
defendant dies before entry of final judgment in the court in w/c action was pending at the time of
such death, it shall not be dismissed but shall instead be allowed to continue until entry of final
joint, w/the debt divided into as many equal shares as there are debtors,
judgment A favorable judgment obtained by the plaintiff therein shall be enforced in the manner each debt distinct from one another.
especially provided in these Rules for prosecuting claims against the estate of a deceased person.
♥ Should lessees/sublessees refuse to vacate leased property after expiration  Andal admitted execution of the bond but alleged that the "special
of the leased period despite due demands, they can be held solidarily liable condition" in the deed of sale was contrary to law, morals & public policy. He
to pay for the use of the property being joint tortfeasors. However, there’s’ averred that, at any rate, Carlos had started construction of a house on the
no allegation that sublessees refused to vacate the fishpond after the lot.
expiration of the term.  CFI sentenced EIC to pay MDC P1,500, w/ interest at 12% from the time of
♥ Petitioner does not contend that nature of the lease w/more than 2 the filing of the complaint until the amount was fully paid, plus pay
sublessees result into a solidary liability. Rather, contract provides that rent attorney's fees (P500), & the proportionate part of the costs. And in case
will be paid to the sub-lessor by the sub-lessees, clearly indicating that the judgment was paid by EIC, Andal should pay EIC P1,500 w/ interest at
liability is merely joint. 12% from the time of the filing of the complaint to the time of payment plus
♥ Since obligation of both couples is chargeable against their respective CPs, attorney's fees (P500) & proportionate part of the costs. MDC appealed
balance of P50,600.00 should be divided into 2 so that each couple is liable directly to SC.
to pay P25,300.00  TC explained that it reduced Andal's liability from P12K to P1.5K because
while no building has actually been constructed before the target date, it is
Holding: Petition is granted. also a fact that even before that date the entire area was already fenced w/
1. Manuels ordered to pay P25,300.00 + atty’s fees of P10k and costs of suit. a stone wall & building materials were also stocked in the premises w/c are
2. Complaint against ipio dismissed w/o prejudice to filing of claim by Jaring in clear indicia of the owner's desire to construct his house w/ the least
proceedings for the settlement of deceased’s estate for the collection of the possible delay. In fact, Carlos had finished more than 50% of his house
share of the Alipio sps amounting to P25,300.00 barely a month after the expiration of the stipulated period.
 But appellant argues that Andal became liable for the full amount of his
MAKATI DEV’T CORP. vs. EMPIRE INSURANCE CO. [1967] bond upon his failure to build a house w/in the 2-year period & that TC had
 Makati Devt Corp (MDC) sold to Rodolfo P. Andal a lot in the Urdaneta no authority to reduce Andal's liability on the basis of Carlos' construction of
Village for P55,615 w/ a "special condition" contained in the deed of sale a house a month after the stipulated period as there was no privity of
providing that: "[T]he VENDEE/S shall commence the construction and contract between Carlos & MDC
complete at least 50% of his/her/their/ its residence on the property within
two (2) years from March 31, 1959 to the satisfaction of the VENDOR and, WON TC may reduce Andal’s liability from P12K to P1.5K
in the event of his/her/their/its failure to do so, the bond which the  YES. The so-called "special condition" in the deed of sale is in reality an
VENDEE/S has delivered to the VENDOR in the sum of P11,123.00 and obligation. It was to secure the performance of this obligation that a penal
evidenced by a cash bond receipt dated April 10, 1959 will be forfeited in clause was inserted.
favor of the VENDOR by the mere fact of failure of the VENDEE/S to  While it is true that in obligations with a penal sanction the penalty takes the
comply with this special condition." place of "damages and the payment of interest in case of non-compliance"
 Andal gave a surety bond wherein he, as principal, & the Empire Insurance (Art. 1226, CC) & that the obligee is entitled to recover upon the breach of
Co. (EIC) as surety, jointly & severally, undertook to pay the MDC P12K in the obligation w/o the need of proving damages, it is nonetheless true that
case Andal failed to comply w/ his obligation. in certain instances a mitigation of the obligor's liability is allowed (Art.
 Andal instead he sold the lot to Juan Carlos. As neither Andal nor Carlos 1229, CC)
built a house on the lot w/in the stipulated period, the MDC timely sent a  The TC found that Carlos had finished more than 50% of his house barely a
notice of claim to the EIC advising it of Andal's failure to comply w/ his month after the expiration of the stipulated period. There was therefore a
undertaking. partial performance of the obligation within the meaning and intent of article
 Demand for the payment of P12K was refused, whereupon the MDC filed a 1229.
complaint in CFI against EIC to recover on the bond in the full amount, plus  General Ins. & Surety Corp. vs. Rep. can’t be invoked since in that case
attorney's fees. there was no performance at all of any part of the obligation to secure the
 EIC filed its answer w/ a 3rd-party complaint against Andal, asking that the payment of salaries to teachers. Indeed, it has been held that where there
complaint be dismissed or, in the event of a judgment in MDC’s favor, that has been partial or irregular compliance w/ the provisions in a contract for
judgment be rendered ordering Andal to pay the EIC whatever amount it special indemnification in the event of failure to comply w/ its terms, courts
may be ordered to pay the MDC, plus interest at 12%, from the date of the will rigidly apply the doctrine of strict construction against the enforcement
filing of the complaint until said amount was fully reimbursed, & attorney's in its entirety of the indemnification, where it is clear from the contract that
fees. the amount or character of the indemnity is fixed w/o regard to the probable
damages w/c might be anticipated as a result of a breach of the terms of
the contract, or, in other words, where the indemnity provided for is
essentially a mere penalty having for its object the enforcement of
compliance w/ the contract. The penal clause in this case was inserted to
compel performance of the so-called "special condition" & thus encourage
home building among lot owners in the Urdaneta Village.
 Still it is insisted that Carlos' construction of a house on the lot sold cannot
be considered a partial performance of Andal's obligation because Carlos
bears no contractual relation to the MDC. In the case Insular Gov't. vs.
Amechazurra, a similar claim was made by a party & rejected by this Court.
The stipulation in the instant case to commence the construction &
complete at least 50% of the vendee's house w/in 2 yrs can’t be construed
as imposing a strictly personal obligation on Andal. To adopt such a
construction would be to limit Andal's right to dispose of the lot.

Holding: Decision appealed from is affirmed, at appellant's cost.

ANTONIO TAN vs. CA [2001]