CASE DIGEST NO.

I.

Doctrine: Art. 1207. The concurrence of two or more creditors or of two

or more debtors in one and the same obligation does not imply that each
one of the former has a right to demand, or that each one of the latter is
bound to render, entire compliance with the prestations.

There is a solidary liability only when the obligation expressly so states,

or when the law or the nature of the obligation requires solidarity.

Title: Phil. Credit Corp. vs. CA., GR No. 109648, Nov. 22, 2001
(Ponente: Panganiban)

Facts: Phil. Credit Corp. (PCC) filed a case against Pacific Loyd Corp.
et.al. for a sum of money before the RTC. After service of summons,
defendants failed to file their answer within the reglementary period.
Hence, defendants were declared in default and ex-parte presentation of
evidence was allowed.

Judgment in favor of PCC were rendered and becomes final and

executory. A writ of Execution was further issued and implemented by
Deputy Sheriff. Personal and real properties of defendant Carlos
Farrales were levied and sold at a public auction having PCC as the
highest bidder.

On July 27, 1990, a motion for the issuance of a writ of possession

was filed and the same was granted. The said writ of possession is not
the subject of this petition.

It appears that respondent judge issued an order considering that

an assailed order and a writ of possession has “of no force and effect”.
The purpose of the petition is to have the order and writ of possession
be declared null and void but the same had already been declared “of no
force and effect” by the respondent judge. Well settled is the rule that
courts will not determine a moot question. This stand was likewise
affirmed by the CA declaring the following as null and void:

a. Auction Sale for the Ferrales’s real property

b. Writ of possession issued in consequence thereof.
 The CA asserts that Ferrales’ liability is merely joint and not
solidary. Hence, no basis to levy his properties for the satisfaction of the
obligation.

Issue: Whether or not the obligation of Ferralis is merely joint?

Held: Yes. A solidary obligation is one in which each of the debtors is

liable for the entire obligation, and each of the creditors is entitled to
demand the satisfaction of the whole obligation from any or all of the
debtors. On the other hand, a joint obligation is one in which each
debtors is liable only for a proportionate part of the debt, and the creditor
is entitled to demand only a proportionate part of the credit from each
debtor.

The well-entrenched rule is that solidary obligations cannot be

inferred lightly. They must be positively and clearly expressed. A liability
is solidary "only when the obligation expressly so states, when the law
so provides or when the nature of the obligation so requires. The
dispositive portion of the January 31, 1984 Decision of the trial court, the
word solidary neither appears nor can it be inferred therefrom. The fallo
merely stated that the following respondents were liable: Pacific Lloyd
Corporation, Thomas H. Van Sebille, Carlos M. Farrales and Federico C.
Lim. Under the circumstances, the liability is joint, as provided by the
Civil Code

We should stress that respondent's obligation is based on the

judgment rendered by the trial court. The dispositive portion or the fallo
is its decisive resolution and is thus the subject of execution. The other
parts of the decision may be resorted to in order to determine the ratio
decidendi for the disposition. Where there is a conflict between the
dispositive part and the opinion of the court contained in the text or body
of the decision, the former must prevail over the latter on the theory that
the dispositive portion is the final order, while the opinion is merely a
statement ordering nothing. Hence the execution must conform with that
which is ordained or decreed in the dispositive portion of the decision.

WHEREFORE, the Petition is hereby DENIED and the assailed Decision

AFFIRMED. No pronouncement as to costs.

SO ORDERED.
 II.

Doctrine:

Title: Dy-Dumalasa vs. Fernandez, GR. No. 178760, July 23, 2009
(PonenteL Carpio-Morales)

Facts: Fernandez et al., were former employees of helios Manufacturing

Corp. filed a complaint for illegal dismissal or illegal closure of business
with payment of salaries and other money claims. LA found Helios’
closure a sham by simple relocation of its operation to a new plant in
Carmona Cavite under the new name of Pat & Suzara. Thus, Helios,
BOD and stockholders were held liable.

NLRC modified the decision of LA holding Dumalasa not jointly

and severally liable with Helios there being no showing of bad faith.
Dumalasa filed MR but was denied, hence appeals to CA.

CA reversed and set aside the NLRC decision contending that LA

decision become final and executor, hence, not subject to modification.
Also, Dumalasa is merely jointly liable there being no statement in the
judgment that he is solidarily liable.

Isshe: Whethr or not Dumalasa is solidarily liable with Helios?

Held: No. The dispositive portion did not expressly mention the solidary
liability of the officers and Board members, including Dumalasa.

Ineluctably, absent a clear and convincing showing of the bad faith

in effecting the closure of HELIOS that can be individually attributed to
petitioner as an officer thereof, and without the pronouncement in the
Decision that she is being held solidarily liable, petitioner is only jointly
liable.

The Court in fact finds that the present action is actually a last-
ditch attempt on the part of Dumalasa to wriggle its way out of her share
in the judgment obligation and to discuss the defenses which she failed
to interpose when given the opportunity. Even as Dumalasa avers that
she is not questioning the final and executory Decision of the
Labor Arbiter and admits liability, albeit only joint, still, she proceeds to
interpose the defenses that jurisdiction was not acquired over her person
and that HELIOS has a separate juridical personality.

As for Dumalasa’s questioning the levy upon her house and lot, she
conveniently omits to mention that the same are
actually conjugal property belonging to her and her husband. Whether
petitioner is jointly or solidarily liable for the judgment obligation, the
levied property is not fully absolved from any lien except if it be shown
that it is exempt from execution.

WHEREFORE, the petition is DENIED. The Decision dated April 28,

2006 and the Resolution dated June 29, 2007 of the Court of Appeals
are AFFIRMED.

The liability of the respondents in NLRC-NCR South Sector Case No.

30-10-04950-01 and NLRC-NCR South Sector Case No. 30-11-05301-
01 pursuant to the Decision of Labor Arbiter Nieves V. de Castro dated
August 30, 2002 should be, as it is hereby, considered joint, without
prejudice to the enforcement of the award against petitioner’s co-
judgment obligors in said cases.

SO ORDERED.
 III.

Doctrine:

1. There is a solidary liability only when the obligation expressly so

states, or when the law or the nature of the obligation requires
solidarity.
2. Indivisibility of an obligation does not necessarily give rise to
solidarity. Nor does solidarity of itself imply indivisibility

Title: Escano vs. Ortigas, G.R. No. 151953, June 29, 2007 (Ponente:
Tingas)

Facts: On April 28, 1980, Private Dev. Corp. of the Phil. (PDCP) entered
into a loan agreement with Falcon Minerals (Falcon) whereby PDCP
agreed to lend Falcon USD 320,000 for specific purpose and subject to
terms and conditions. 3 stockholders and officers of Falcon assumed
solidary liability in their individual capacity.

2 years later, Falcon was ceded to Escano et al and shares of

deceased Scholey were transferred to the heirs and become new
stockholders. One April 28, 1989, PDCP filed a complaint for sum of
money before RTC Makati and a counter claim was filed by Ortigas.
Compromise agreement was entered into with PDCP but Ortigas
pursued his claim against Escano et.al and filed a motion for summary
judgment. RTC ruled in favor of Ortigas ordering Escano et. Al jointly
and severally liable. The decision was affirmed by CA.

Issue: Whether or not Escano et al were solidarily liable?

Held: No. The obligation was joint. In this case, there is a concurrence of

two or more creditors or of two or more debtors in one and the same
obligation. In case of concurrence of two or more creditors or of two or
more debtors in one and the same obligation, and in the absence of
express and indubitable terms characterizing the obligation as solidary,
the presumption is that the obligation is only joint. It thus becomes
incumbent upon the party alleging that the obligation is indeed solidary
in character to prove such fact with a preponderance of evidence.
 The Undertaking does not contain any express stipulation that the
petitioners agreed to bind themselves jointly and severally in their
obligations to the Ortigas group, or any such terms to that effect. Hence,
such obligation established in the Undertaking is presumed only to be
joint. Ortigas, as the party alleging that the obligation is in fact solidary,
bears the burden to overcome the presumption of jointness of
obligations. The SC ruled that he failed to discharge such burden.

WHEREFORE, the Petition is GRANTED in PART. The Order of the

Regional Trial Court dated 5 October 1995 is modified by declaring that
petitioners and Joseph M. Matti are only jointly liable, not jointly and
severally, to respondent Rafael Ortigas, Jr. in the amount of
₱1,300,000.00. The Order of the Regional Trial Court dated 7 March
1996 is MODIFIED in that the legal interest of 12% per annum on the
amount of ₱1,300,000.00 is to be computed from 14 March 1994, the
date of judicial demand, and not from 28 February 1994 as directed in
the Order of the lower court. The assailed rulings are affirmed in all other
respects. Costs against petitioners.

SO ORDERED.
 IV.
Doctrine: Art. 1207. The concurrence of two or more creditors or of
two or more debtors in one and the same obligation does not
imply that each one of the former has a right to demand, or that each
one of the latter is bound to render, entire compliance with the
prestations. There is a solidary liability only when the obligation
expressly so states, or when the law or the nature of the
obligation requires solidarity.

Title: Sps. Berot vs. Siapno, G.R. No. 188944, July 9, 2014 (Ponente:
Sereno)

Facts: On May 23, 2002, Macaria Berot and Sps. Berot obtained a loan
from Felipe Siapno amounting to Php. 250,000 payable in 1 year with
2% interest per annum. Berot et al. mortgaged a property consisting of
147 sq. meters (contested property) of 718 square meters as loan
security in Banaoag Pangasinan. The security was under the name of
Macaria Berot and her deceased husband.

On June 23, 2003, Macaria died. Due to mortgagor’s default,

action for foreclosure with damages was filed on July 15, 2004 before
RTC Dagupan. Berot et al. alleged that the contested property was the
inheritance of Marcaria from his father, Pedro, and the propert was a
family home, hence, the mortgage is void.

Appellants also contend that the obligation is joint, hence, RTC

has no jurisdiction over Macaria for non-service of summons. RTC ruled
in favor of Siapno. The record reveals that the trial court held that the
liability is solidary. RTC decision was affirmed by CA.

Issue: Whether or not the obligation was solidary?

Held: No The general rule is that when there is a concurrence of two

or more debtors under a single obligation, the obligation is presumed
to be joint. The law further provides that to consider the obligation as
solidary in nature, it must expressly be stated as such, or the law or the
nature of the obligation itself must require solidarity.
 A solidary obligation is one in which each of the debtors is liable
for the entire obligation, and each of the creditors is entitled to
demand the satisfaction of the whole obligation from any or all of the
debtors. On the other hand, a joint obligation is one in which each
debtor is liable only for a proportionate part of the debt, and the
creditor is entitled to demand only a proportionate part of the
credit from each debtor.

The well entrenched rule is that solidary obligations cannot be

inferred lightly. They must be positively and clearly expressed. A liability
is solidary "only when the obligation expressly so states, when the
law so provides or when the nature of the obligation so requires."

The contents of the real estate mortgage but found no indication in

the plain wordings of the instrument that the debtors the late
Macaria and herein petitioners had expressly intended to make their
obligation to respondent solidary in nature. Absent from the mortgage
are the express and indubitable terms characterizing the obligation as
solidary. Respondent was not able to prove by a preponderance of
evidence that petitioners' obligation to him was solidary. Hence,
applicable to this case is the presumption under the law that the nature
of the obligation herein can only be considered as joint. It is incumbent
upon the party alleging otherwise to prove with a preponderance of
evidence that petitioners' obligation under the loan contract is indeed
solidary in character.

WHEREFORE, the CA Decision in CA-G.R. CV No. 87995 sustaining

the RTC Decision in Civil Case No. 2004-0246-D is hereby AFFIRMED
with the MODIFICATION that the obligation of petitioners and the estate
of Macaria Berot is declared as joint in nature.

SO ORDERED.
 V.

Doctrine: Solidary liability must be expressly stated.

As the rule stands, solidary liability is not presumed. This stems from Art.
1207 of the Civil Code, which provides that, “There is a solidary liability
only when the obligation expressly so states, or when the law or the
nature of the obligation requires solidarity.”

Title: Olongapo City vs. Subic Water and Sewerage Co. Inc., GR. No.
171626, August 6, 2014 (Ponente Brion)

Facts: On May 25, 1973, PD 198 took effect authorizing the creation of
local water districts which may acquire, install, maintain and operate
water supply and distribution systems for domestic, industrial, municipal
and agricultural uses. Petitioner Olongapo City passed Resolution No.
161, which transferred all its existing water facilities and assets under
the Olongapo City Public Utilities Department Waterworks Division, to
the jurisdiction and ownership of the Olongapo City Water District. In lieu
of the LGU’s share in the acquired water utility plant, it shall be paid by
the LWD an amount not exceeding three percent (3%) of the LWD’s
gross receipts from water sales in any year.

On October 24, 1990, petitioner filed a complaint for sum of money and
damages against OCWD alleging that OCWD failed to pay its electricity
bills to petitioner and remit its payment under the contract to pay,
pursuant to OCWD’s acquisition of petitioner’s water system. OCWD
posed a counterclaim against petitioner for unpaid water bills amounting
to Php. 3,080,357.00. To finally settle their money claims against each
other, petitioner and OCWD entered into a compromise agreement on
June 4, 1997. In this agreement, petitioner and OCWD offset their
respective claims and counterclaims. OCWD also undertook to pay to
petitioner its net obligation amounting to Php. 135,909,467.09, to be
amortized for a period of not exceeding twenty-five (25) years at twenty-
fourpercent (24%) per annum.

Pursuant to the compromise agreement and in payment of OCWD’s

obligations to petitioner, petitioner and OCWD executed a Deed of
Assignment on November 24, 1997. OCWD assigned all of its rights in
the JVA in favor of the petitioner, including but not limited to the
assignment of its shares, lease payments, regulatory assistance fees
and other receivables arising out of or related to the Joint Venture
Agreement and the Lease Agreement. On December 15,1998, OCWD
was judicially dissolved. On May 7, 1999, to enforce the compromise
agreement, the petitioner filed a motion for the issuance of a writ of
execution with the trial court. In its July 23, 1999 order, the trial court
granted the motion, but did not issue the corresponding writ of execution.

Issue: Whether or not the liability is solidary?

Held: No. The joint and several liability of Subic Water and OCWD was
nowhere clear in the agreement. The agreement simply and plainly
stated that petitioner and OCWD were only requesting Subic Water to be
a co-maker, in view of its assumption of OCWD’s water operations. No
evidence was presented to show that such request was ever approved
by Subic Water’s board of directors.

Under these circumstances, petitioner cannot proceed after Subic

Water for OCWD’s unpaid obligations. The law explicitly states that
solidary liability is not presumed and must be expressly provided for. Not
being a surety, Subic Water is not an insurer of OCWD’s obligations
under the compromise agreement. At best, Subic Water was merely a
guarantor against whom petitioner can claim, provided it was first shown
that: a) petitioner had already proceeded after the properties of OCWD,
the principal debtor; b) and despite this, the obligation under the
compromise agreement, remains to be not fully satisfied. But as will be
discussed next, Subic Water could not also be recognized as a
guarantor of OCWD’s obligations.

WHEREFORE, premises considered, we hereby DISMISS the petition.

The Court of Appeals' decision dated July 6, 2005 and resolution dated
January 3, 2006, annulling and setting aside the orders of the Regional
Trial Court of Olongapo, Branch 75 dated July 29, 2003 and October 7,
2003, and the writ of execution dated July 31, 2003, are hereby
AFFIRMED. Costs against the City of Olongapo.
 VI.

Doctrine: Under Art. 2047 Par 2 of the CC, if a person binds himself to
be solidarily liable with the principal debtors, the provision of Sec.4,
Chapter 3, Title 1 of the Book shall be observed. In such case, the
contract is called suretyship. The said provision is with regard to joint
and solidary obligation

Title: Estanislao vs. China Banking, G.R. No 193890, March 11, 2015
(Ponente: Reyes)

Facts: Sps. Manalastas executed a REM in favour of China Banking.

Several PN were executed in favour of China Banking. In 2 PNs, Sps.
Sinamban signed a co-makers.

For non-payment, China Banking filed a complaint for sum of

money against Sps. Sinamban and Sps. Manalastas. Sps. Sinamban
admitted the signing as co-makers upon the request of Sps. Manalastas
who are their relatives, but insisted they derived no money or benefit
from the loans.

Issue: Whether or not Sps. Sinamban as co-maker may be held

solidaarily liable?

Held; Yes. Under Art. 2047 Par 2 of the CC, if a person binds himself to
be solidarily liable with the principal debtors, the provision of Sec.4,
Chapter 3, Title 1 of the Book shall be observed. In such case, the
contract is called suretyship. The said provision is with regard to joint
and solidary obligation.

When the obligor undertakes to be jointly and severally liable, the

obligation shall be solidary. A co-maker in PN who bind himself with the
maker jointly and severally renders himself directly and primarily liable
with the maker on debt without reference to his solvency.

WHEREFORE, the Decision of the Court of Appeals dated May 19, 2010
in CA-G.R. CV No. 66274 is MODIFIED. The Decision dated July 30,
1999 and the Order dated December 8, 1999 of the Regional Trial Court
of San Fernando City, Pampanga, Branch 45 in Civil Case No. 11708
are hereby AFFIRMED with MODIFICATIONS as follows:

1. Spouses Danilo and Magdalena Manalastas are solidarily liable

for the deficiency amount of 1,388,320.55 (inclusive of 10%
attorney’s fees) on Promissory Note No. OACL 634-95 dated April
24, 1995;

2. Spouses Estanislao and Africa Sinamban are solidarily liable

with spouses Danilo and Magdalena Manalastas for the deficiency
amount of ₱249,907.87(inclusive of 10% attorney’s fees) on
Promissory Note No. OACL 636-95 dated May 23, 1995;

3. Estanislao Sinamban and spouses Danilo and Magdalena

Manalastas are solidarily liable for the deficiency amount of
₱120,199.45 (inclusive of 10% attorney’s fees) on Promissory
Note No. CLF 5-93 dated February 26, 1991; and

4. The foregoing amounts shall bear interest at the rate of twelve

percent (12%) per annum from November 18, 1998 to June 30,
2013, and six percent (6%) per annum from July 1, 2013 until fully
paid.

SO ORDERED.
 VII.

Doctrine: Well-entrenched is the rule that solidary obligation cannot

lightly be inferred. There is a solidary liability only when the obligation
expressly so states, when the law so provides or when the nature of the
obligation so requires.

Title: INIMACO vs. NLRC, G.R. No. 101723, may 11, 2000 (Ponente:
Buena)

Facts: On September 1984, private respondent Enrique Sulit et al. filed a

complaint before the DOLE against INIMACO et al. for payment of
separation pay and unpaid wages. LA ruled in favor of the respondents
and an alias writ of execution was later issued.

Filipinas Carbon and Mining Corp, and Gerardo Sicat, co-

petitioner, filed a Motion to Quash and alias writ alleging that the
issuance thereof changed the tenor of the decision as t the liability of the
respondents. By insertion of the word and/or, the obligation becomes
joint and solidary. The Motion To Quash was denied by the LA. The
denial of LA was affirmed by NLRC.

Issue: Whether or not the liability of the petitioner’s are solidary?

Held: No. The Court finds that petitioner INIMACO's liability is not
solidary but merely joint and that the respondent NLRC acted with grave
abuse of discretion in upholding the Labor Arbiter's Alias Writ of
Execution and subsequent Orders to the effect that petitioner's liability is
solidary.

A solidary or joint and several obligation is one in which each

debtor is liable for the entire obligation, and each creditor is entitled to
demand the whole obligation. In a joint obligation each obligor answers
only for a part of the whole liability and to each obligee belongs only a
part of the correlative rights.

In the dispositive portion of the Labor Arbiter, the word "solidary"

does not appear. The said fallo expressly states the following
respondents therein as liable, namely: Filipinas Carbon and Mining
Corporation, Gerardo Sicat, Antonio Gonzales, Industrial Management
Development Corporation (petitioner INIMACO), Chiu Chin Gin, and Lo
Kuan Chin nor can it be inferred therefrom that the liability of the six (6)
respondents in the case below is solidary, thus their liability should
merely be joint.

WHEREFORE, the petition is hereby GRANTED. The Resolution dated

September 4, 1991 of the respondent National Labor Relations is hereby
declared NULL and VOID. The liability of the respondents in RAB-VII-
0711-84 pursuant to the Decision of the Labor Arbiter dated March 10,
1987 should be, as it is hereby, considered joint and petitioner's
payment which has been accepted considered as full satisfaction of its
liability, without prejudice to the enforcement of the award, against the
other five (5) respondents in the said case.

SO ORDERED.
 VIII.

Doctrine: ART. 1216. The creditor may proceed against any one of the
solidary debtors or some or all of then simultaneously. The demand
made against one of then shall not be an obstacle to those which may
subsequently be directed against the others, so long as the debt has not
been fully collected.

Title: PNB vs. Independent Planters, G.R. No. L-28046, may 16, 1983
(Ponente: Plana)

Facts: Appeal by PNB from the order of CFI Manila dismissing the PNB’s
complaint against the solidary debtors for collection of money on the
ground that one of the defendants (Ceferino Valencia) died during the
pendency of the case, hence the complaint, being a sum of money
based on contracts should be prosecuted in the testate or intestate
proceedings pursuant to Sec 6. Rule 86 of the Rules of Court: SEC. 6.
Solidary obligation of decedent. Where the obligation of the decedent is
solidary with another debtor, the claim shall be filed against the decedent
as if he were the only debtor, without prejudice to the right of the estate
to recover contribution from the... other debtor. In a joint obligation of the
decedent, the claim shall be confined to the portion belonging to him.

The appellant assails the order of dismissal, invoking its right of

recourse against one, some or all of its solidary debtors under Article
1216 of the Civil Code, the creditor may proceed against any one of the
solidary debtors or some or all of then simultaneously. The demand
made against one of then shall not be an obstacle to those which may
subsequently be directed against the others, so long as the debt has not
been fully collected.
Issue: Whether or not the PNB may proceed against the other solidary
debtors?
Held:
It is now settled that the quoted Article 1216 grants the creditor the
substantive right to seek satisfaction of his credit from one, some or all of
his solidary debtors, as he deems fit or convenient for the protection of
his interests, and if, after instituting a collection suit based on contract
against some or all of them and, during its pendency, one of the
defendants dies, the court retains jurisdiction to continue the
proceedings and decide the case in respect of the surviving defendants.

WHEREFORE the appealed order of dismissal of the court a quo in its

Civil Case No. 46741 is hereby set aside in respect of the surviving
defendants; and the case is remanded to the corresponding Regional
Trial Court for proceedings. No costs.

SO ORDERED.
 IX.

Doctrine:

1. Art. 1207. The concurrence of two or more debtors in one and the
same obligation does not imply that each one of the former has a
right to demand, or that each one of the latter is bound to render,
entire compliance with the prestation. There is a solidary liability
only when the obligation expressly so states, or when the law or
the nature of the obligation requires solidarity.

2. Art. 1208. If from the law, or the nature or the wording of the
obligation to which the preceding article refers the contrary does
not appear, the credit or debt shall be presumed to be divided into
as many equal shares as there are creditors and debtors, the
credits or debts being considered distinct from one another,
subject to the Rules of Court governing the multiplicity of suits.
Title: Ronquillo vs. C.A. G.R. No. L-55138, May 16, 1983 (Ponente:
Cuevas)

Facts: Petitioner Ronquillo was one of the 4 defendants in a civil case

filed by respondent Antonio So for a collection of a sum of money. The
amount sought to be collected represents the value of the checks issued
by the defendants in payment for foodstuffs delivered and received by
them. The checks were dishonored by drawee bank.

On December 24, 1979, the balance of Php. 55,000, defendant

individually and jointly agree to pay within the period of 6 months. Private
respondent filed a Motion For Execution on the ground that defendants
failed to make their initial payment on or before the agreed date. The
motion as opposed contending that the inability to pay was due to
respondent’s act of making himself scarce and inaccessible. Hence, they
prayed that respondent be ordered to accept the payment.

Tender of payment of a pro-rata share of one of the 4 defendants

were made during the hearing of the Motion For Execution. Private
respondent refused to accept the payment demanding full payment of
the Php. 55,000. Hence, the amount was deposited to the clerk of court.
 Subsequently, private respondent accepted the deposit and
prayed by MR for the execution of the entire decision against all the
defendants, jointly and severally. Petitioners opposed the MR
contending that the RTC Decision was already final and executor and
declared no solidary liability on the decision.

Attachment on the properties is made and threat of public sale was

being conducted for a solidary liability hence petition for certiorari and
prohibition were filed before the CA. The CA finds the certiorari
premature as no exhaustion of the remedies was made.

Issue: Whether or not the nature of the liability of defendant is solidary?

Held: No. Clearly then, by the express term of the compromise

agreement and the decision based upon it, the defendants obligated
themselves to pay their obligation "individually and jointly".

The term "individually" has the same meaning as "collectively",

"separately", "distinctively", respectively or "severally". An agreement to
be "individually liable" undoubtedly creates a several obligation, and a
"several obligation" is one by which one individual binds himself to
perform the whole obligation.

The obligation in the case at bar being described as "individually

and jointly", the same is therefore enforceable against one of the
numerous obligors.

IN VIEW OF THE FOREGOING CONSIDERATIONS, the instant petition

is hereby DISMISSED. Cost against petitioner.

SO ORDERED.
 X.

Doctrine:

Title: Sps. Chin Kong Wong Choi and Anna Chua vs. UCPB, G.R. No.
207747, March 11, 2015 (Ponente: Carpio)

Facts: A contract to sell involving a condo unit in Kiener Hills Cebu was
entered into by petitioner spouses and Primetown. Downpayment of Ph.
1000,000 were given while the remaining balance shall be payable in 40
equal installments for Php. 26,392.97. On April 23, 1998, a MOA and
sales of receivables and assignment of rights and interest were executed
by the respondent UCB and Primetown.

The agreement, among others, stipulate that for a consideration of

Php. 748,000,000, Primetown assigns, transfers, conveys and sets over
unto UCPB all accounts receivables accruing from Primetown Kiener
together with the assignments of all the rigths, titles, interest and
participation over the units covered by the Contract To Sell from which
the receivables have arisen.

pouses Chin Kong Wong Choi

and Ana O. Chua, Petitioners,
vs. United Coconut Planters
Bank, Respondents. (Gr. No.
207747, March 11, 2015)
CARPIO, J.:
Facts:
A Contract to Sell involving a
condominium unit in Kiener
Hills Cebu and in the amount
of P1,151,718.75, was entered
into by petitioner spouses and
Primetown Property Group,
Inc.
(Primetown). A down payment
of P100,000.00 was given by
petitioners while the remaining
balance became payable in 40
equal monthly instalments of
P26,292.97 from January 16,
1997
to April 16, 2000. In the
meantime, on April 23, 1998, a
Memorandum of Agreement
and Sale of
Receivables and Assignment
of Rights and Interests were
executed by and between
respondent
UCPB and Primetown. The
agreement, among others,
stipulate that in
consideration of
P748,000,000.00, Primetown
assigns, transfers, conveys,
and sets over unto UCPB all
Accounts
Receivables accruing from
Primetown’s Kiener together
with the assignment of all its
rights,
titles, interests and
participation over the units
covered by or arising from the
Contracts to Sell
from which the receivables
have arisen. In 2006, a
complaint for refund with
interest and
damages against Primetown
and UCPB was instituted by
petitioners for failure of
Primetown to
finish the construction and to
deliver the subject
condominium unit despite full
payment of
contract price. The HLURB
RFO VI held that both UCPB
and Primetown were liable to
Spouses
Choi. Upon appeal to the
HLURB Board of
Commissioners, the same held
that UCPB was the
legal successor-in-interest of
Primetown against whom the
Spouses’ action for refund
could be
enforced. The Office of the
President likewise ruled that
UCPB was jointly and
severally liable
with Primetown. The CA
reversed the OP’s decision and
reinstated HLURB RFO
reinstated in
another aspect.
Issue: Whether respondent
UCPB is solidarily liable with
Primetown.
Ruling: The Court held in the
negative.
As for UCPB’s alleged
solidary liability, we do not
find any merit in the claim of
Spouses
Choi that Luzon
Development Bank v.
Enriquez and Philippine Bank
of Communications v.
Pridisons Realty Corporation
apply to the present case.
Both cases involved the
failure to
comply with Sections 17, 18
and 25 of Presidential Decree
No. 957, which made the
banks in
those cases solidarily liable. A
solidary obligation cannot be
inferred lightly, but exists only
when
expressly stated, or the law or
nature of the obligation
requires it.
Since there is no other ground
to hold UCPB solidarily liable
with Primetown and there is no
reason to depart from the ratio
decidendi in UCPB v. Ho,
UCPB is only liable to refund
Spouses
Choi the amount it
indisputably received, which is
P26,292.97 based on the
evidence presented
by Spouses Choi
In 2006, complaint for refund with interest and damages were filed
against Primetown and UCPB for failure to construct and deliver the
subject condo units despite full payment thereof. HLURB held Primetown
and UCP liable which was affirmed by HLURB Board of Commissioners
stating that UCPB was a successor-in-interest for action of refund. The
Office of the President likewise ruled the joint and several liability of
UCPB but CA reversed the decision.

Issue: Whether or not UCPB may be held solidarily liable?

Hel: No. A solidary obligation cannot be inferred lightly, but exists only
when expressly stated, or the law or nature of the obligation requires it.
Since there is no other ground to hold UCPB solidarily liable with
Primetown and there is no reason to depart from the ratio decidendi in
UCPB v. Ho, UCPB is only liable to refund Spouses Choi the amount it
indisputably received, which is P26,292.97 based on the evidence
presented by Spouses Choi.

WHEREFORE, we DENY the petition and AFFIRM with MODIFICATION

the Decision dated 29 January 2013 and the Resolution dated 27 May
2013 of the Court of Appeals in CA-G.R. SP No. 117831. We ORDER
respondent United Coconut Planters Bank to RETURN to petitioner
spouses Chin Kong Wong Choi and Ana 0. Chua the amount of
P26,292.97, with 12% interest per annum from the time of its receipt on
3 February 1999 until 30 June 2013, then 6% interest per annum from 1
July 2013 until fully paid.

SO ORDERED.
 XI.

Doctrine: Article 1225. For the purposes of the preceding articles,

obligations to give definite things and those which are not susceptible of
partial performance shall be deemed to be indivisible. When the
obligation has for its object the execution of a certain number of days of
work, the accomplishment of work by metrical units, or analogous things
which by their nature are susceptible of partial performance, it shall be
divisible.

However, even though the object or service may be physically divisible,

an obligation is indivisible if so provided by law or intended by the
parties.

Title: Sps. Lam vs. Kodak, G.R. No. 167615, Jan. 1, 2016 (Ponente:
Leonen)

Facts: On Jan. 8, 1992, parties entered into an agreement for the sale of
3 units of Kdak Minilab System 22XL. Kodak delivered 1 unit of Minilab
Equipment in Tagum Davao and was installed by Noritsu representative.
Spouses Lam issued PDC amounting to Php. 35,000 each for 12
months as payment for the first delivered unit, the first will due on March
31, 1992.

Spouses Lam requested Kodak to not negotiate the check on

March 31 due to insufficiency of funds. The same request was made on
April 1992. However, checks were negotiated by Kodak and were
honored by depositary bank. The 10checks were subsequently
dishonored after spouses ordered the depositary bank to stop payment.

Kodak cancelled the sale and ordered the spouses to return the
unit but was ignored and decided to rescind the contract through a letter
for failure to deliver the remaining 2 minilab. Kodak filed for a replevin
and recovery of sum of money but spouses failed to appear at the pre-
trial conference. They were declared in default, hence, Kodak was
allowed to present ex-parte.

Trial court ruled in favor of Kodak and a writ of seizure was issued
and executed. Petition to set aside the order was filed by the spouses
before the CA but the case was remanded to trial court for pre-trial. RTC
decided against spouses but CA modified the decision.

Issue: Whether the obligation is divisible?

Held: No. The letter of agreement contained indivisible obligation. The

intention of the parties is for there to be a single transaction covering all
three (3) units of the Minilab Equipment. Respondent’s obligation was to
deliver all products purchased under a "package," and, in turn,
petitioners’ obligation was to pay for the total purchase price, payable in
installments.

The intention of the parties to bind themselves to an indivisible

obligation can be further discerned through their direct acts in relation to
the package deal. There was only one agreement covering all three
(3) units of the Minilab Equipment and their accessories. The Letter
Agreement specified only one purpose for the buyer, which was to obtain
these units for three different outlets. If the intention of the parties were
to have a divisible contract, then separate agreements could have been
made for each Minilab Equipment unit instead of covering all three in
one package deal.

In ruling that the contract between the parties intended to cover

divisible obligations, the Court of Appeals highlighted:
a. the separate purchase price of each item;
b. petitioners’ acceptance of separate deliveries of the units; and
c. the separate payment arrangements for each unit. However,
through the specified terms and conditions, the tenor of the Letter
Agreement indicated an intention for a single transaction.
 This intent must prevail even though the articles involved are
physically separable and capable of being paid for and delivered
individually, consistent with the New Civil Code.

WHEREFORE, the Petition is DENIED. The Amended Decision dated

September 9, 2005 is AFFIRMED with MODIFICATION. Respondent
Kodak Philippines, Ltd. is ordered to pay petitioners Alexander and Julie
Lam:

(a) P270,000.00, representing the partial payment made on the

Minilab Equipment;

(b) P130,000.00, representing the amount of the generator set,

plus legal interest at 12% .per annum from December 1992 until
fully paid;

(c) P440,000.00 as actual damages;

(d) P25,000.00 as moral damages;

(e) P50,000.00 as exemplary damages; and

(f) P20,000.00 as attorney's fees.

Petitioners are ordered to return the Kodak Minilab System 22XL unit
and its standard accessories to respondent.

SO ORDERED.
 XII.

Doctrine: Art. 1207. The concurrence of two or more creditors or of two

or more debtors in one and the same obligation does not imply that each
one of the former has a right to demand, or that each one of the latter is
bound to render, entire compliance with the prestation. There is a
solidary liability only when the obligation expressly so states, or when
the law or the nature of the obligation requires solidarity.

Title: Alipio vs. CA., G.R. No. 13400, September 29, 2000 (Ponente:
Medoza)

Facts: Respondent jarring was the lessee of a 1.45 hectares fishpond in

Hermosa Bataan for a period of5 years ending on September 12, 1990.
On July 19, 1987, he subleased the fishpond for the remaining period of
the lease to Sps. Manual and Alipio.

The sublessee only satisfied a portion thereto leaving unpaid

balance of Php. 50,600. Collection case were filed but Purito Alipio
moved to dismissed the case on the ground that her husband passed
away on Dec.1, 1988.

RTC ruled that the surviving spouse should pay and ruled that
since the petitioner is herself a party to the sublease contract, she
should be independently impleaded in the suit together with spouses
Manuel. The death of the husband mere resulted to his exclusion from
the case. CA ruled that the surviving spouse should pay as they are
signatories of the sublease contract. The remaining defendants cannot
avoid the action by claiming the death of one of the parties will totally
extinguish the obligation.

Issue: Whether or not the obligation is solidary?

Held: No. The obligation is joint. Indeed, if from the law or the nature or
the wording of the obligation the contrary does not appear, an obligation
is presumed to be only joint, i.e., the debt is divided into as many equal
shares as there are debtors, each debt being considered distinct from
one another. Clearly, the liability of the sublessees is merely joint. Since
the obligation of the Manuel and Alipio spouses is chargeable against
their respective conjugal partnerships, the unpaid balance of P50,600.00
should be divided into two so that each couple is liable to pay the
amount of P25,300.00. 

WHEREFORE, the petition is GRANTED. Bienvenido Manuel and

Remedios Manuel are ordered to pay the amount of P25,300.00, the
attorney’s fees in the amount of P10,000.00 and the costs of the suit.
The complaint against petitioner is dismissed without prejudice to the
filing of a claim by private respondent in the proceedings for the
settlement of estate of Placido Alipio for the collection of the share of the
Alipio spouses in the unpaid balance of the rent in the amount of
P25,300.00.chanrob1es virtua1 1aw 1ibrary

SO ORDERED.
 XIII.

Doctrine: Title: A solidary or joint and several obligation is one in which

each debtor is liable for the entire obligation, and each creditor is entitled
to demand the whole obligation.

Title: Abalos vs. CA, GR. No. 106029, October 19, 1999 (Ponente:
Purisima)

Facts: Private respondents and petitioners are co-owners, not a party to

the action, of Dupo Fishpont located in Dagupan City and Binmaley
Pangasinan. Fredisvinda was instituted as administratrix and leased the
same to petitioner Oscar for 5 years who, in turn, subleased the same to
petitioner Abalos who, in turn, hired petitioner Arellano as caretaker.

When the lease is near to termination, petitioner Fernandez

pleaded 1 year extension and was granted. On Aug. 26, 1984, the
fishpond was bidded to all co-owners and won by Jorge Coquia, through
his son Anthony. Petitioner Fernandez informed his sublessee of his lost
in bidding.
On July 1, 1985, Anthony Coqiua accompanied by the police
proceeded to the fishpond to take possession of the property but
Arellano refuse to leave the premises on the pretext that he received no
order from Abalaos. Demands were made but to no avail.
 On April 15, 1986, complaint for unlawful detainer was filed before
MTC Dagupan but Albalos and Arellano filed no answer setting the
defense of renewal of sublease for another 5 years

Issue: Whetherpetitioner Fernandez jointly and severally liable with

petitioner Abalos in paying private respondents the sum of P250,000.00
yearly, from July 1, 1985 to March 1988, as annual rental for the
Fishpond?

Held: We sustain the finding that petitioners Fernandez and Abalos are
jointly and severally liable to the private respondents for the payment of
the yearly rental of the Fishpond amounting to P250,000.00 yearly from
July 1, 1984 to March 1988 when petitioner Abalos vacated the
premises. This is because petitioner Fernandez, as lessee of the
Fishpond, and petitioner Abalos, as sublessee of the former, were
obliged to surrender the leased premises to the private respondents
upon the expiration of the lease. The lease contract of petitioner
Fernandez expired on June 30, 1985 after his plea for an extension of
one year upon the expiration of the original contract was granted by the
private respondents. Upon the expiration of the extended period, it
became incumbent upon petitioner Fernandez to return the leased
premises to private respondents. The same goes with petitioner Abalos.
Upon the expiration of the sublease agreement on June 30, 1984, he
should have surrendered possession of the Fishpond to its rightful
owners. The necessity of vacating the premises and surrendering the
same to the private respondents became more urgent when, having
been informed by petitioner Fernandez that he lost in the bidding for the
lease of the Fishpond, and having been requested to vacate the same
by oral and written demands, petitioner Abalos should have surrendered
possession of the Fishpond to private respondents.

Petitioner Fernandez, upon the expiration of the extension of the

lease, had the obligation to surrender possession of the Fishpond to the
private respondents while petitioner Abalos, upon expiration of the
sublease and having been informed that he no longer had any right over
the questioned fishpond, should have vacated and surrendered the
premises to the private respondents. For failing to do so, both petitioners
are liable for the payment of the yearly rental of P250,000.00 for the
lease of the Fishpond beginning July 1, 1985 and ending in March 1988.

WHEREFORE, the Decision dated February 17, 1992 of the Court of

Appeals is AFFIRMED in toto.
 XIV.
Doctrine: While referring to ITM as a guarantor, the Agreement
specifically stated that the corporation was "jointly and severally" liable. 
To put emphasis on the nature of that liability, the Contract further stated
that ITM was a primary obligor, not a mere surety.  Those stipulations
meant only one thing: that at bottom, and to all legal intents and
purposes, it was a surety.

Title: International Finance vs. Imperial Textile, G.R. No. 106324,

Nov.15, 005 (Ponente: Panganiban)

Facts: On December 17, 1974, petitioner IFC and respondent PPIC

entered in a loan agreement wherein IFC extended PPIC USD
7,000,000 payable in 16 semi-annual instalments from June 1, 1977 to
December 1, 1984 with 10% per annum interest.

On December 17, 1974, a guarantee agreement was executed

with Imperial Textile, Grandtex and IFC. ITM and Grandtex guarantee
the loan obligation of PPIC. Some instalments were paid religiously but
others were not despite re-scheduling. PPIC defaulted.

On April1, 1985 notice of default were received by PPIC but to no

avail. Sheriff of Calamba Laguna issued a notice of extrajudicial sale of
the PPIC properties and IFC won but still leaves a balance on the loan.
PPIC failed to make good of the balance.

Issue: Whether or not ITM and Grandex are sureties and may be held
jointly and severally liable?

Held: IFC claims that ITM is a surety, while ITM claims that it is only a
guarantor. Under the agreement: Section 2.01.  The Guarantors jointly
and severally, irrevocably, absolutely and unconditionally guarantee, as
primary obligors and not as sureties merely, the due and punctual
payment of the principal of, and interest and commitment charge on, the
Loan, and the principal of, and interest on, the Notes, whether at stated
maturity or upon prematuring, all as set forth in the Loan Agreement and
in the Notes.
The Agreement uses "guarantee" and "guarantors," prompting ITM
to base its argument on those words. This Court is not convinced that
the use of the two words limits the Contract to a mere guaranty.  The
specific stipulations in the Contract show otherwise.
The Court does not find any ambiguity in the provisions of the
Guarantee Agreement.  When qualified by the term "jointly and
severally," the use of the word "guarantor" to refer to a "surety" does not
violate the law.
As Article 2047 provides, a suretyship is created when a guarantor
binds itself solidarily with the principal obligor.  Likewise, the phrase in
the Agreement "as primary obligor and not merely as surety" stresses
that ITM is being placed on the same level as PPIC.  Those words...
emphasize the nature of their liability, which the law characterizes as a
suretyship.

WHEREFORE, the Petition is hereby GRANTED, and the assailed

Decision and Resolution MODIFIED in the sense that Imperial Textile
Mills, Inc. is declared a surety to Philippine Polyamide Industrial
Corporation. ITM is ORDERED to pay International Finance Corporation
the same amounts adjudged against PPIC in the assailed Decision. No
costs.

SO ORDERED.
 XV.

Doctrine:

Title: Chiquita brands vs. Omelio, GrR. 18902, June 7, 2017 (Ponente:
Leonen)

Facts: On Aug. 31, 1993, thousands of banana plantation workers from

14 countries filed a class suit in US against 11 corporations including the
petitioner. They claim exposure to dibromochaloropropane (DBCP), a
pesticide against roundworms and threadworms that may damage
tropical fruits such as bananas and pineapples. This exposure resulted
to permanent injuries to the worker’s reproductive system. However, US
dismissed the claim due to forum non convenience and directed the
workers to file case in their individual countries.

Filipinos file a claim before RTC Davao but before pre-trial the
foreign corporation entered into a worldwide settlement in US. Parties
executed a compromise agreement for settlement that would deposit for
escrow account and for mediation. RTC Panabo approved the
compromised agreement and dismissed the claims. Upon moving for the
execution of the agreement, Chiquita et al opposed on the gorund of
mootness arguing that they already complied with their obligations by
depositing the settlement agreement into an escrow account. RTC
Panabo still grants the motion for execution as there was no proof of
fulfillment of obligation.

On May 2003, motion to suspend the execution was filed.

Claimants picketed during the trial and accused the judge of corrupt
official for delay of the execution. They requested for a change of venue
and were granted. Judge Omelio of RTC Davao ordered the execution of
the agreement. Hence a petition before the CA.

Issue: Whether or not Judge Omelio committed grave abuse of

discretion in ordering the execution of the agreement?

Held: Yes. Courts can neither amend nor modify the terms and
conditions of a compromise validly entered into by the parties. In any
case, a compromise validly entered has the authority and effect of res
judicata as between the parties. A writ of execution that varies the
respective obligation of the parties under a judicially approved
compromise settlement is void. Petitioners' obligation under the
Compromise Agreement was limited to depositing the settlement amount
in escrow. On the other hand, the actual distribution of the settlement
amounts was delegated to the chosen mediator.

Ordinarily, courts have the ministerial duty to grant the execution of

a final judgment. The prevailing party may immediately move for
execution of the judgment, and the issuance of the writ follows as a
matter of course.

A writ of execution may be stayed or quashed when "facts and

circumstances transpire" after judgment has been rendered that would
make "execution impossible or unjust." the Compromise Agreement did
not impose solidary liability on the parties' subsidiaries, affiliates,
controlled, and related entities, successors, and assigns but merely
allowed them to benefit from its effects. Thus, respondent Judge Omelio
gravely abused his discretion in holding that the petitioners' subsidiaries
and affiliates were solidarily liable under the Compromise Agreement.

WHEREFORE, the Petition for Certiorari is GRANTED. The assailed

orders and writs are ANNULLED and SET ASIDE for having been issued
with grave abuse of discretion.
 XVI.

Doctrine: A solidary or joint and several obligation is one in which each

debtor is liable for the entire obligation, and each creditor is entitled to
demand the whole obligation.

Title: Inciong vs. CA, GR. No. 96405, June 26, 1996 (Ponente: Romero)

Facts: Inciong was adjudged solidarily and ordered to pay the plaintiff
Phil Bank of Communication Php 50,000 with interest. It resulted to a
promissory notes for Php 50,000 which he signed with Rene Naybe and
Pantanosa on Feb. 3, 1983 holding him solidarily liable. The PN expired
without payment and a collection case was filed against the three.

The lower court dismissed the case against Pantanosas and only
the respondent was served with summons as Naybe had gone to Saudi.
Petitioner alleged that he acceded with the understanding that he will
only be a co-maker of a loan and the PNs were never brought to him.
Thus, he signed under misrepresentation.

The trial court ruled against the petitioner which was affirmed by
CA. Hence, this petition.

Issue: Whether or not Inciong may be solidarily liable?

Held: Yes. It is to be noted, however, that petitioner signed the
promissory note as a solidary co-maker and not as a guarantor.

Because the promissory note involved in this case expressly states

that the three signatories therein are jointly and severally liable, any one,
some or all of them may be proceeded against for the entire obligation.
The choice is left to the solidary creditor to determine against whom he
will enforce collection. Consequently, the dismissal of the case against
Judge Pontanosas may not be deemed as having discharged petitioner
from liability as well. As regards Naybe suffice it to say that the court
never acquired jurisdiction over him. Petitioner, therefore, may only have
recourse against his co-makers, as provided by law.

WHEREFORE, the instant petition for review on certiorari is hereby

DENIED and the questioned decision of the Court of Appeals is
AFFIRMED. Costs against petitioner.

SO ORDERED.

XVII.

Doctrine: Well-entrenched is the rule that solidary obligation cannot

lightly be inferred. There is a solidary liability only when the obligation
expressly so states, when the law so provides or when the nature of the
obligation so requires.

Title: Industrial Management vs. NLRC, G.R. No. 101723, May 11, 2000
(Ponente: Buena)

Facts: On September 1984, private respondents filed a complaint before

the DOLE against Filipinas Carbon Mining Corp et al. for unpaid wages
and separation pay.

The LA decided in favor of the respondents and issued an alias

writ of execution. Petitioners filed a MotionTo Quash the Alias Writ
alleging the said order altered and change the tenor of the decision by
changing the liability from joint to solidary. Both the LA and NLRC denied
the motion to quash.

Issue: Whether or not the decision of LA entails solidarity?

Held: No. The Court finds that petitioner INIMACO's liability is not
solidary but merely joint and that the respondent NLRC acted with grave
abuse of discretion in upholding the Labor Arbiter's Alias Writ of
Execution and subsequent Orders to the effect that petitioner's liability is
solidary.

A solidary or joint and several obligation is one in which each

debtor is liable for the entire obligation, and each creditor is entitled to
demand the whole obligation. In a joint obligation each obligor answers
only for a part of the whole liability and to each obligee belongs only a
part of the correlative rights.

In the dispositive portion of the Labor Arbiter, the word "solidary"

does not appear. The said fallo expressly states the following
respondents therein as liable, namely: Filipinas Carbon and Mining
Corporation, Gerardo Sicat, Antonio Gonzales, Industrial Management
Development Corporation (petitioner INIMACO), Chiu Chin Gin, and Lo
Kuan Chin nor can it be inferred therefrom that the liability of the six (6)
respondents in the case below is solidary, thus their liability should
merely be joint.

WHEREFORE, the petition is hereby GRANTED. The Resolution dated

September 4, 1991 of the respondent National Labor Relations is hereby
declared NULL and VOID. The liability of the respondents in RAB-VII-
0711-84 pursuant to the Decision of the Labor Arbiter dated March 10,
1987 should be, as it is hereby, considered joint and petitioner's
payment which has been accepted considered as full satisfaction of its
liability, without prejudice to the enforcement of the award, against the
other five (5) respondents in the said case.

SO ORDERED.
 XVIII.

Doctrine: Art. 1207. The concurrence of two or more creditors or of two

or more debtors in one and the same obligation does not imply that each
one of the former has a right to demand, or that each of the latter is
bound to render, entire compliance with the prestation. There is solidary
liability only when the obligation expressly so states, or when the law or
the nature of the obligation requires solidarity.

Title: Sunga-Chan vs. C.A., GR No 164401, June 25, 2008 (Ponente:

Velasco)

Facts: In 1977, Sunga and Chua formed a partnership to engaged in

marketing of liquefied petroleum gas under the name Shellite Gas
Appliances Center (Shellite) as was registered as a sole proprietorship
under Sunga albeit equal sharing of net profits.

Sunga died in 1989 and his widow Sunga and married daughter
Sunga-Chan continued the business without Chua’s consent. Chua’s
repeated demand for accounting and winding up went unheaded
prompting to file a complaint for winding up of partnership affairs on June
22, 1992 before RTC Zamboanga del Norte. The RTC decision was
upheld until the SC but the writ of execution cannot be implemented.

Chua asked the trial court for CPA to undertake the accounting
and inventory should petitioner refused to do it within the time set by the
court. This was heeded and approved the computation bythe RTC due to
failure and refusal to participate despite notice. Chua’s entitled amounts
to Php 3,154,736.65 but Chua submitted a new computation applying
simple interest that went up to almost 8Million.

RTC approved the new computation but reconsideration was

sought by the petitioners. Petitioner’s lot was levied and Chua emerged
as the highest bidder. Writ of possession was granted by RTC but a
TRO was issued on May 31, 2005.

Issue: Whether or not the absolute property of spouses Shunga-Chan

and Norberto Chan can be lawfully made to answer for the liability of
Lilibeth Chan.

Held: Under the circumstances surrounding the case, we hold that the
obligation of petitioners is solidary for several reasons.

As it were, the continuance of the business and management of

Shellite by petitioners against the will of Chua gave rise to a solidary
obligation, the acts complained of not being severable in nature.
Indeed, it is well-nigh impossible to draw the line between when
the liability of one petitioner ends and the liability of the other starts. In
this kind of situation, the law itself imposes solidary obligation. Any
suggestion that the obligation to undertake an inventory, render an
accounting of partnership assets, and to wind up the partnership affairs
is divisible ought to be dismissed.
The duty of petitioners to remit to Chua his half interest and share
of the total partnership assets proceeds from petitioners indivisible
obligation to render an accounting and inventory of such assets
considering the impossibility of quantifying how much of the partnership
assets or profits was misappropriated by each petitioner.
Given the solidary liability of petitioners to satisfy the judgment
award, respondent sheriff cannot really be faulted for levying upon and
then selling at public auction the property of petitioner Sunga-Chan to
answer for the whole obligation of petitioners
The fact that the levied parcel of land is a conjugal or community
property, as the case may be, of spouses Norberto and Sunga-Chan
does not per se vitiate the levy and the consequent sale of the property.
Verily, said property is not among those exempted from execution.
Parenthetically, the records show that spouses Sunga-Chan and
Norberto were married on February 4, 1992, or after the effectivity of the
Family Code on August 3, 1988. Withal, their absolute community
property may be held liable for the obligations contracted by either
spouse.
Absent any indication otherwise, the use and appropriation by
petitioner Sunga-Chan of the assets of Shellite even after the business
was discontinued on May 30, 1992 may reasonably be considered to
have been used for her and her husband's benefit.
WHEREFORE, this petition is PARTLY GRANTED. Accordingly, the
assailed decision and resolution of the CA in CA-G.R. SP No. 75688 are
hereby AFFIRMED with the following MODIFICATIONS:

(1) The Resolutions dated November 6, 2002 and January 7, 2003 of the
RTC, Branch 11 in Sindangan, Zamboanga Del Norte in Civil Case No.
S-494, as effectively upheld by the CA, are AFFIRMED with the
modification that the approved claim of respondent Chua is hereby
corrected and adjusted to cover only the aggregate amount of PhP
5,529,392.52;

(2) Subject to the payment by respondent Chua of PhP 2,470,607.48 to

petitioner Sunga-Chan, the Resolution dated April 11, 2005 of the RTC,
confirming the sheriff's final deed of sale of the levied property, ordering
the Registry of Deeds of Manila to cancel TCT No. 208782, and issuing
a writ of possession in favor of respondent Chua, is AFFIRMED; and
The TRO issued by the Court on May 31, 2005 in the instant petition
is LIFTED.

No pronouncement as to costs.
 XIX.

Doctrine: Article 1226 of the Civil Code refers to penalties prescribed in

contracts, not to penalties embodied in a judgment. We must yield to the
specific language of the fallo which is controlling and construe its
meaning in the light of the applicable laws.

Title: National Power Corporation vs. City of Cabanatuan, GR. No.

177332, October 1, 2014 (Ponente:

Facts: The City of Cabanatuan (the City) assessed the National Power
Corporation (NAPOCOR) a franchise tax of its gross receipts for 1992.
NAPOCOR refused to pay, arguing that it is exempt from paying the
franchise tax. On 1993, the City filed a complaint before the Regional
Trial Court of Cabanatuan City, demanding NAPOCOR to pay the
assessed tax due plus surcharge and interest of 2% per month of the
unpaid tax, and costs of suit.

The trial court declared that the City could not impose a franchise
tax on NAPOCOR and accordingly dismissed the complaint for lack of
merit. The Court of Appeals (Eighth Division) reversed the trial court and
found NAPOCOR liable to pay franchise tax. In 2003 decision, this court
affirmed the Court of Appeals' March 12, 2001 decision and July 10,
2001 resolution.

After the court's decision had become final, the City filed with the
trial court a motion for execution to collect. NAPOCOR prayed that the
issuance of the writ be suspended pending resolution of its protest with
the City Treasurer of Cabanatuan City on the computation of the
surcharge.

In 2007, the Court of Appeals promulgated the assailed decision

dismissing' NAPOCOR's petition for certiorari and affirming the trial
court's order. The Court of Appeals also denied NAPOCOR's motion for
reconsideration.

Issue: Whether or not petitioner is liable to pay a surcharge of 25% of

the tax due and unpaid.

Held: Yes. Respondent's computation of the surcharge, as sustained by

the trial court and the Court of Appeals, varies the terms of the judgment
sought to be executed and contravenes Section 168 of the Local
Government Code. In effect, respondent's computation resulted in the
imposition of the 25% surcharge for every year of default in the payment
of a franchise tax. 

There is nothing in the Court of Appeals' decision that would justify

the interpretation that the statutory penalty of 25% surcharge should be
charged yearly from due date until full payment. If that was the intention
of the Court of Appeals, it should have so expressly stated in the
dispositive portion of its decision.

WHEREFORE, the petition is GRANTED and the Court of Appeals

decision and resolution dated January 15, 2007 and April 3, 2007 are
REVERSED AND SET ASIDE. The order dated October 25, 2004 of the
Regional Trial Court of Cabanatuan City, Branch 30, in Civil Case No.
1659 AF granting the writ of execution for the satisfaction of the amount
of P11,172,479.55 is ANNULLED AND SET ASIDE.
 XX.

Doctrine: A stipulation on liquidated damages is a penalty clause where

the obligor assumes a greater liability in case of breach of an obligation.
The obligor is bound to pay the stipulated amount without need for proof
on the existence and on the measure of damages caused by the breach.

Articles 1229 and 2227 of the Civil Code empower the courts to reduce
the penalty if it is iniquitous or unconscionable. The determination of
whether the penalty is iniquitous or unconscionable is addressed to the
sound discretion of the court and depends on several factors such as the
type, extent, and purpose of the penalty, the nature of the obligation, the
mode of breach and its consequences.

Title: Titan Construction vs. Uni-Field Enterprises, GR. No. 153874,

March 1, 2007 (Ponente: Carpio)

Facts: From 1990 to 1993, petitioner purchased on credit various

construction supplies and materials from respondent. Petitioner’s
purchases amounted to Php. 7,620,433.12 but petitioner was only able
to pay Php. 6,215,795.70, leaving a balance of Php. 1,404,637.42. In
1994, respondent sent a demand letter to petitioner. But the balance
remained unpaid.

In 1995, respondent filed with the trial court a complaint for

collection of sum of money with damages against petitioner.
 On 9 September 1997, the trial court rendered judgment in favor of
respondent. Petitioner appealed to the Court of Appeals.The Court of
Appeals denied the appeal for lack of merit and affirmed the trial court’s
9 September 1997 Decision.

On 20 May 2002, the Court of Appeals denied petitioner’s motion

for reconsideration. Hence, this petition.

Issue: Whether or not the CA erred in awarding liquidated damages,

attorney’s fees and interest in favor of respondent?

Held: The delivery receipts and sales invoices expressly stipulated the
payment of interest, liquidated damages, and attorney’s fees in case of
overdue accounts and collection suits. Petitioner did not only bind itself
to pay the principal amount, it also promised to pay (1) interest of 24%
per annum on overdue accounts, compounded with the principal
obligations as they accrue; (2) 25% liquidated damages based on the
outstanding total obligation; and (3) 25% attorney’s fees based on the
total claim including liquidated damages.

Since petitioner freely entered into the contract, the stipulations in

the contract are binding on petitioner. Thus, the trial court and the Court
of Appeals did not err in using the delivery receipts and sales invoices as
basis for the award of interest, liquidated damages, and attorney’s fees.

The attorney’s fees here are in the nature of liquidated damages

and the stipulation therefor is aptly called a penal clause. It has been
said that so long as such stipulation does not contravene law, morals, or
public order, it is strictly binding upon defendant. The attorney’s fees so
provided are awarded in favor of the litigant, not his counsel.

WHEREFORE, we AFFIRM the appealed Decision dated 7 January

2002 of the Court of Appeals in CA-G.R. CV No. 56816 with
MODIFICATION as regards the award of attorney’s fees. Petitioner Titan
Construction Corporation is ordered to pay respondent Uni-Field
Enterprises, Inc. attorney’s fees of Php. 351,028.50.