Case No.

3
JOSE ARAÑAS. ET AL. v EDUARDO C. TUTUAN, ET AL.
G.R. No. 52807 February 29, 1984

Doctrine:
It is elementary that payment made by a judgment debtor to a
wrong party cannot extinguish the judgment obligation of such
debtor to its creditor.

Facts:
Universal Textile Mills, Inc. (UTEX) was ordered by the courts to
pay the cash dividends that had accrued to the shares of the
petitioners. UTEX made a supposed payment of cash dividends to
the wrong parties. The payment was made even though the courts
made it known who the owners of the stocks and the dividends
that accrued were, which was clear in the ruling of the motion of
clarification filed by UTEX.

Issue:
Whether UTEX already made a valid payment and is no longer
required to pay the petitioners.

Ruling:
No. The courts already made it clear to whom the payment of the
cash dividends should be made and yet UTEX still chose to pay
the wrong parties. UTEX is still liable to the petitioners and the
burden of recovering the supposed payment of cash dividends to
the wrong parties falls upon the debtor and it cannot be passed off
to the petitioner, who is an innocent party.
Case No. 20
BISHOPS OF MALOLOS V IAC,
G.R. NO. 100290,

DOCTRINE:
Civil law; contracts; tender of payment; cannot be presumed by
mere inference from surrounding circumstances.

FACTS:
There was a contract entered into by the petitioner, ROMAN
CATHOLIC BISHOPS OF MALOLOS and the private respondent,
Mr. Carlos F. Robes of sale over a parcel of land for a period four
(4) years from execution of the contract. The following stipulations
were included in the contract: Stipulations for cancellation,
forfeiture of previous payments and reconveyance of the land in
question in case the private respondent would fail to complete
payment within the said period, A requests was made to pay in
three installments by the respondent but was denied by the
petitioner. When the period of payment had expired, private
respondent tendered a personal check which petitioner refused to
accept.

ISSUE:
Whether or not there was tender of payment.

RULING.
NO. Since a negotiable instrument is only a substitute for money
and not money, the delivery of such an instrument does not, by
itself, operate as payment. A check is not a legal tender, and an
offer of a check in payment of a debt is not a valid tender of
payment and may be refused receipt by the oblige or creditor.
Case No. 22
NPC vs. Benguet Electric Cooperative, Inc.,
G.R. No. 218378, June 14, 2021

Doctrine:
The doctrine of unjust enrichment is not a catch-all provision that
can be conveniently invoked when a party has suffered a loss.
This is especially true when a contract exists between the parties.
Unjust enrichment exists when a person unfairly retains a benefit,
money, or property against the fundamental principles of justice,
equity, and good conscience.

Facts:
NPC a government-owned and controlled corporation and
BENECO entered into a Contract of Sale of Electricity and a
Transition Contract for the Supply of Electricity. In its Irisan
Substation, an error in the metering device was discovered, that
the Current Transformer Ratio (CTR) was set at 75/5 instead of
150/5. This means that the NPC had been billing BENECO at half
the correct amount of electricity delivered to it. The NPC informed
BENECO of its underbilling from May 2000 to February 2004 and
requested the latter the amount of Php 157,743,314.43 and an
additional amount of P7,870,456.14, representing the Prompt
Payment Discount and the interest charges from April 2004 to July
2004. However, BENECO refused to pay its underbilling.

Issue:
Whether BENECO's non-payment of the underbilling constitutes
unjust enrichment.

Ruling:
No. BENECO's liability for the underbilling is based on contract
and not on the principle of unjust enrichment. Unjust enrichment
exists when a person unfairly retains a benefit, money, or property
against the fundamental principles of justice, equity, and good
conscience. The principle of unjust enrichment is not a catch-all
provision that can be conveniently invoked when a party has
suffered a loss. In the instant case, BENECO is liable for the
underbilling representing the power bills corrected within the 90-
day period.
Case No. 23
RG Cabrera Corporation Inc. v. DPWH and COA,
GR No. 231015, January 26, 2021

Doctrine:
Quantum meruit means that in an action for work and labor,
payment shall be made in such amount as the plaintiff reasonably
deserves. To deny payment would be to permit unjust enrichment
at the expense of the contractor.

Facts:
Following the eruption of Mount Pinatubo in June 1991 which
generated several meters of volcanic ash and lahar which crippled
the areas of Pampanga, Zambales, and Tarlac, caused the DPWH
to hire bulldozers to be utilized for the maintenance and
preservation of the Porac-Gumain River and other related projects.
DPWH Pampanga entered into various contracts with RGCCI for
the lease of equipment for the maintenance and restoration of
parts of the Porac-Gumain Diversion Channel System. RGCCI
sought the collection of all the unpaid amounts from the DPWH

Issue:
Whether RGCCI is entitled to payment on the basis of Quantum
Meruit.

Ruling:
Yes. Under the principle of quantum meruit, the petitioner may
nevertheless be compensated for the services rendered by it,
concededly for the public benefit, from the general fund allotted by
law, despite the admitted absence of a specific covering
appropriation or if there is delay in the accomplishment of the
required certificate of availability of funds to support a contract.
The evidence presented by RGCCI proved that it had performed
its obligation under the contract and it established the liability of
the DPWH.
Case No. 25
NORMA M. DIAMPOC vs. JESSIE BUENAVENTURA
G.R. No. 200383, March 19, 2018

Doctrine:
Obligations arising from contracts have the force of law between
the contracting parties and should be complied with in good

Facts:
Petitioner Diampoc spouses filed a complaint for annulment of
deed of sale and recovery of duplicate original copy of title, with
damages, against respondent Buenaventura and the Registry of
Deeds for the Province of Rizal. The petitioner alleged that the
respondent asked to borrow the owner's copy of the TCT to be
used as security for a P1 million loan the latter wished to secure in
exchange for P300,000.00 out of the loan proceeds. Further, the
respondent caused them to sign a folded document without giving
them the opportunity to read its content and were not given a copy.
They later discovered that the respondent became the owner of a
one-half portion of the subject property.

Issue:
Whether the CA erred in applying the prima facie presumption of
regularity of notarized documents and upholding the validity of the
notarized deed of sale.

Ruling:
No, the CA did not err in applying the prima facie presumption of
regularity of notarized documents and upholding the validity of the
notarized deed of sale. As far as the lower courts are concerned,
the three requirements of cause, object, and consideration
concurred. This Court is left with no option but to respect the lower
courts' findings, for its jurisdiction in a petition for review on
certiorari is limited to reviewing only errors of law since it is not a
trier of facts. This is especially so in view of the identical
conclusions arrived at by them. Petitioner and her husband's
admission that they failed to exercise prudence can only be fatal to
their cause.
Case No. 27
Spouses Balila & De Guzman v. IAC,
GR No. L-68477, October 29, 1987

Doctrine:
Alleging that the respondent judge of the municipal court had acted
in excess of her jurisdiction and with grave abuse of discretion in
issuing the writ of execution of December 15, 1947, the petitioner
has filed the present petition for certiorari and prohibition for the
purpose of having said writ of execution annulled. Said petition is
meritorious.

Facts:
An amicable settlement was set by petitioners as defendants
Spouses Balila et al and the respondents IAC et al as plaintiffs.
Defendants admitted "having sold under a pacto de retro sale the
parcels of land and promised to pay within the period of 4 months.
Plaintiff filed a motion for a hearing stating that the ruling was still
unenforced for no payment of the total obligation from defendants
while defendants argued they made partial payments through
plaintiff attorney in fact and son, Waldo, as well as the sheriff.
Defendants paid plaintiff through son, Waldo, and was given a
certification being given 45 days to complete to pay the balance.
Said certification supported defendants motion for reconsideration.

Issue:
Whether the appellate court erred in not declaring that the decision
dated December 11, 1980, based upon the agreement of the
parties was novated upon subsequent mutual agreements of the
said parties?

Ruling:
Yes, The root of all the issues raised before Us is that judgment by
compromise rendered by the lower court based on the terms of the
amicable settlement of the contending parties. Such agreement
not being contrary to law, good morals or public policy was
approved by the lower court and therefore binds the parties who
are enjoined to comply therewith.
Case No. 30
HDMF v. Spouses Eulogia N. Cataquiz
GR No. 2010582, July 19, 2020

Doctrine:
A loan is under the doctrine of reciprocal obligation wherein the
performance of the obligation of one party is dependent upon the
performance of the obligation of the other, especially when a
perfected consensual contract to grant the loan was already
executed, and the borrower had complied with his part of the
obligation through the submission of the necessary documents.

Facts:
Spouses Cataquiz requested HDMF to release, in their favor, the
title of the house and lot property, which was contracted, with
Notice of Approval, through a Loan and Mortgage Agreement with
HDMF and FMSCI by their son Rudy Cataquiz, who died several
days after the completion of the said construction of the house.
However, HDMF refused on account of Rudy's failure to accept the
loan during his lifetime. As a consequence, the loan was not
covered by Mortgage Redemption Insurance (MRI) since the
premium should be taken from the loan proceeds.

Issue:
Whether the spouses are entitled to possess the property and
insurance benefits of their deceased son.

Ruling:
Yes. Upon issuance of Notice of Approval, the Loan and Mortgage
Agreement between HDMF and Rudy takes effect, including its
provisions on MRI coverage. HDFM and FMSCI are negligent in
the performance of their duties under the agreement. Considering
that a loan is a reciprocal obligation wherein the performance of
the obligation of one party is dependent upon the performance of
the obligation of the other, especially when a perfected consensual
contract to grant the loan was already executed, and the borrower
had complied with his part of the obligation through the submission
of the necessary documents. Thus, HDMF and FMSCI are ordered
to turn over to spouses Cataquiz the land title, the house and lot,
and death benefits and insurance of their deceased son.
Case No. 32
SPS SALVADOR CHUA vs. RODRIGO RIVERA,
G.R. No. 184472, January 14, 2015

Doctrine:
There are four instances when demand is not necessary to
constitute the debtor in default; (1) when there is an express
stipulation to that effect; (2) where the law so provides; (3) when
the period is the controlling motive or the principal inducement for
the creation of iobligation; and (4) where demand would be
useless.

Facts:
In February 1995, Rivera obtained a loan from the Spouses Chua,
in the tune of P120, 000.00, at the same time issued a promissory
note stipulating that failure to pay P120, 000.00, Rivera agrees to
pay 5% monthly interest from the date of default. Three years from
the date of payment stipulated in the promissory note, Rivera
issued two checks payment but was dishonored for the reason
“account closed.”

Issue:
Whether or not a demand from Sps. Chua is needed to make
Rivera liable.

Ruling:
No, a demand from Sps. Chua is not needed to make Rivera
liable. Demand is no longer necessary because the law is explicit
that when the debtor fails to pay upon maturity date, when the
obligation is due and demandable, he therefore incurs delay. The
date of default under the promissory note is January 1, 1996, the
day following December 31, 1995, the due date of obligation. On
that date, Rivera became liable for the stipulated interest which the
Promissory note says is equivalent to 5% a month.
Case No. 60
Boysaw vs. Interphil Promotions,
G.R. NO. L-22590, March 20, 1987

CASE DOCTRINE:
Recession and Compensation Morae (Reciprocal Obligation)

FACTS:
Boysaw signed an agreement through his manager with a
promotions agency, Interphil to arrange and promote a boxing
match with Flash Elorde. It was stipulated that postponement of
the date of the fight must be mutually agreed upon and prior to the
date of the fight Bosyaw should not engage to a boxing fight. The
boxer violated the terms of the contract, but in spite of these, the
agency proceeded except it negotiated for a new date for the
match. Eventually, the match as originally stated in the contract did
not materialize. Boxer and manager is now suing the promotion
agency for breach of contract.

ISSUE:
May the offending party in a reciprocal obligation compel the other
party for specific performance?

RULING:
No. Evidence shows that Bosyaw violated the contract when he
fought a boxing match in Las Vegas. Another violation was the
assignment and transfer of the managerial rights over Boysaw
without the knowledge or consent of Interphil. Where one party did
not perform the undertaking which he was bound by the terms of
the agreement to perform, he is not entitled to insist upon the
performance of the contract by the other party or recover damages
by reason of his own breach. The power to rescind obligations is
implied, in reciprocal ones, in case one of the obligors should not
comply with what is incumbent upon him.
Case No. 123
ENGRACIO FRANCIA vs. IAC
G.R. No. L-67649, June 28, 1988

DOCTRINE:
Compensation shall take place when two persons, in their own
right, are creditors and debtors of each other.

FACTS:
Engracio Francia is the registered owner of a residential lot and a
twostory house built upon it situated at Barrio San Isidro, now
District of Sta. Clara, Pasay City, Metro Manila. The lot, with an
area of about 328 square meters, is described and covered by
Transfer Certificate of Title No. 4739 (37795) of the Registry of
Deeds of Pasay City. On October 15, 1977, a 125 square meter
portion of Francia's property was expropriated by the National
government for the sum of P4,116.00 deposited to Philippine
National Bank and he was notify that the money was already
deposited. Since 1963 up to 1977 inclusive.

ISSUE:
Whether or not Francia’s tax delinquency has been extinguished
the legal compensation as the government owed him when a
portion of his land was expropriated.

RULING:
No. There is no legal basis for the contention. There can be no
offsetting of taxes against the claims that the taxpayer may have
against the government. A person cannot refuse to pay a tax on
the ground that the government owes him an amount equal to or
greater than the tax being collected. The collection of a tax cannot
await the results of a lawsuit against the government. Internal
revenue taxes cannot be the subject of compensation. The
Government and the taxpayer are not mutually creditors and
debtors of each other under Article 1278 of the Civil Code and a
claim of taxes is not such a debt, demand, contract or judgment as
is allowed to be set-off
Case No. 135
ACDC v. MERO STRUCTURES, INC.
G.R. NO. 221147, September 29, 2021

DOCTRINE:
Novation extinguishes an obligation between two parties when
there is a substitution of objects or debtors or when there is
subrogation of the creditor. It occurs only when the new contract
declares so "in unequivocal terms" or that "the old and the new
obligations be on every point incompatible with each other."

FACTS:
In line with the 100th anniversary celebration of the Philippine
Independence from Spanish colonial rule in 1998, First Centennial
Clark Corporation (FCC) was created for the purpose of designing,
constructing, operating, and managing the Philippines' National
Centennial Exposition to be held in the Clark Special Economic
Zone (CSEZ) located in Clark Field, Pampanga. On March 16,
1998, FCCC entered into a Construction Agreement with petitioner
Asian Construction and Development Corporation (Asiakonstrukt)
for the finalization of the architectural concept, design, and
storyline approved by the National Centennial Commission and to
undertake all the necessary construction works for the Exposition
Theme Park.

ISSUE:
Whether or not the obligation of Asiakonstrukt to pay MERO was
extinguished by novation.

RULING:
NO. It is evident that there was neither an express nor implied
novation through the letters exchanged between MERO and
Asiakonstrukt. Novation is a mode of extinguishing an obligation by
changing its objects or principal obligations, by substituting a new
debtor in place of the old one, or by subrogating a third person to
the rights of the creditor. First, there is nothing in the letters that
unequivocally states that the obligation of Asiakonstrukt to pay
MERO would be extinguished.
Case No. 150
PNB v. AIC CONSTRUCTION CORPORATION
G.R. NO. 228904, October 13, 2021

DOCTRINE:
The principle of mutuality of contracts is premised on the condition
that there must be an essential equality between the parties so
that obligations arising from contracts may have the force of law
between them. If a condition in the contract depends solely on the
will of one of the contracting parties, it is void.

FACTS:
In 1988, AIC Construction opened a current account with
Philippine National Bank. About a year later, Philippine National
Bank granted AIC Construction an omnibus credit line in the
amount of Php 10 million. Through the years, the omnibus credit
line increased little by little. When the loan matured in September
1998, the loan amounted to Php 65 million, with Php 40 million as
principal and Php 25 million as interest charges capitalized by the
Philippine National Bank into principal. On April 30, 2001,
Philippine National Bank made its final demand to AIC
Construction for the full payment of the loan in the amount of Php
140,837,511.29

ISSUE:
Whether or not the interest charges imposed by PNB found to be
usurious and unconscionable.

RULING:
YES. Article 1308 of the Civil Code states: "The contract must bind
both contracting parties; its validity or compliance cannot be left to
the wiII of one of them." The principle of mutuality of contracts
applies to interest rates. Monetary interest is always agreed upon
by the parties and they are free to stipulate on the rates that will
apply to their loans. However, if there is no true parity between the
parties, courts may equitably reduce iniquitous or unconscionable
interest charges. In stipulating interest rates, parties must ensure
that the rates are neither iniquitous nor unconscionable. Iniquitous
or unconscionable interest rates are illegal and, therefore, void for
being against public morals.
Case No. 154
Home Guaranty Corporation v. Manlapaz,
GR No. 202820, January 13, 2021

Doctrine:
The basic principle of relativity of contracts is that contracts can
only bind the parties who entered into it, and cannot favor or
prejudice a third person, even if he is aware of such contract and
has acted with knowledge thereof.

Facts:
Vive Eagle Land, Inc. (VELI), Planters Development Bank (Bank),
and petitioner Home Guaranty Corporation (HGC) entered into the
VELI Asset Pool Formation and Trust Agreement (Asset Pool) for
the development of the lots in Eagle Crest Village (Village) in
Baguio City which included the disputed property, a parcel of land.
Thereafter, VELI, through a Contract to Sell (first contract), sold
properties to First La Paloma Properties, Inc. (FLPPI) which
included the property in question. In turn, FLPPI, also through a
Contract to Sell (second contract), sold the disputed property to
Manlapaz amounting to P913,000.00. Almost two months later, the
Asset Pool defaulted, causing the Bank to execute a Deed of
Assignment and Conveyance in favor of HGC after it paid
P135,691,506.85 guaranty.

Issue:
Whether HGC should execute a deed of absolute sale and cause
the transfer of the certificate of title to the contested lot in favor of
Manlapaz.

Ruling:
Yes. HGC has the obligation to turn over the disputed property to
Manlapaz and then issue the corresponding deed of absolute sale
and certificate of title in her name since Manlapaz already fully
paid the purchase price. She should not be made to suffer the
consequences of the default of the Asset Pool, including the failure
of the FLPPI to comply with its obligation to HGC under their
contract to sell. It is settled that the seller's obligation to deliver the
corresponding certificates of title is simultaneous and reciprocal to
the buyer's full payment of the purchase price. The FLPPI on the
other hand, should turn over the full amount to HGC, subject to
interest rate.
Case No. 178
AMPARO S. CRUZ et al vs. ANGELITO S. CRUZ et al,
G.R. No. 211153, February 28, 2018

Doctrine:
Consent must meet the following requisites: (a) it should be
intelligent, or with an exact notion of the matter to which it refers;
(b) it should be free; and (c) it should be spontaneous. Intelligence
in consent is vitiated by error; freedom by violence, intimidation or
undue influence; and spontaneity by fraud.

Facts:
Respondents together with their siblings, petitioner Amparo and
Antonia inherited a 940-square-meter parcel of land from their late
parents. On July 31, 1986, the parties executed a deed of
extrajudicial settlement of estate covering the subject property, on
the agreement that each heir was to receive an equal portion of
the subject property as mandated by law. However, in 1998, when
the subject property was being subdivided, they discovered that
Antonia was allocated 2 lots, as against 1 each for the
respondents.

Issue:
Whether the CA erred in setting aside the deed of extrajudicial
settlement of the estate.

Ruling:
No, CA was correct in ruling in favor of Concepcion and setting
aside the subject deed of extrajudicial settlement. The present
action involves a situation where one heir was able - through the
expedient of an extrajudicial settlement that was written in a
language that is not understood by one of her co-heirs - to secure
a share in the estate of her parents that was greater than that of
her siblings, in violation of the principle in succession that heirs
should inherit in equal shares. Antonia received 2 lots as against
her siblings, including respondent Concepcion, who respectively
received only 1 lot each in the subject property. With the help of
Amparo, Antonia was able to secure Concepcion's consent and
signature without the benefit of explaining the contents of the
subject deed of extrajudicial settlement. Clearly, the issue of
literacy is relevant to the extent that Concepcion was effectively
deprived of her true inheritance.
Case No. 184
DE GUZMAN VS DE JOY,
G.R No. 30771, MAY 28, 1984

DOCTRINE:
In regards to the agreement of the parties relative to the P6,000.00
obligation, "it is presumed that it exists and is lawful, unless the
debtor proves the contrary." No evidentiary hearing having been
held, it has to be concluded that defendants had not proven that
the P6,000.00 obligation was illegal.

FACTS:
September 7, 1957, plaintiff loaned P10,000.00, without interest, to
defendant partnership and defendant Elino Lee Chi, as the
managing partner. The loan became ultimately due on January 31,
1960, but was not paid on that date, with the debtors asking for an
extension of three months, or up to April 30, 1960. On March 17,
1960, the parties executed another loan document. Payment of the
P10,000.00 was extended to April 30, 1960, but the obligation was
increased by P6,000.00 and shall form part of the principal
obligation to answer for attorney’s fees, legal interest, and other
cost incident thereto to be paid unto the creditor and his
successors in interest upon the termination of this agreement.

ISSUE:
Whether or not the increase of obligation to 6,000.00 pesos illegal
and is a usurious interest.

RULING:
No. Under Article 1354 of the Civil Code, in regards to the
agreement of the parties relative to the P6,000.00 obligation, "it is
presumed that it exists and is lawful, unless the debtor proves the
contrary." No evidentiary hearing having been held, it has to be
concluded that defendants had not proven that the P6,000.00
obligation was illegal. Section 9 of the Usury Law (Act 2655)
provides that the person or corporation sued shall file its answer in
writing under oath to any complaint brought or filed against said
person or corporation before a competent court to recover the
money or other personal or real property, seeds or agricultural
products, charged or received in violation of the provisions of this
Act.

Case No. 195

MARITO AND MARIA FE SERNA vs. DELA CRUZ
G.R. NO. 237291, February, 2021

DOCTRINE:
The purpose of the Statute of Frauds is to prevent fraud and
perjury in the enforcement of obligations depending for their
evidence on the unassisted memory of witnesses, by requiring
certain enumerated contracts and transactions to be evidenced by
a writing signed by the party to be charged

FACTS:
Petitioners are the owners of two (2) parcels of land located in
Aramaywan, Quezon, Palawan registered under Original
Certificate of Title (OCT) Nos. E-6101 and E-6103 (subject
properties). In their Complaint, respondents alleged that: (1) on
various dates, they paid petitioners various amounts of money
totaling P252,379.27 for the purchase of the subject properties; (2)
on November 9, 1998, petitioners and respondents executed a
handwritten Agreement where the former acknowledged receipt of
partial payments made by the latter, and said document was
witnessed by Nelson Cordero (Cordero) as indicated by his
signature therein; and (3) when respondents tendered the balance
for the purchase price of the subject properties, petitioners refused
to receive the same and notified them of their intent to sell the
subject properties to other buyers for a higher price.

ISSUE:
Whether or not a verbal contract of sale is barred by the Statute of
Frauds.

RULING:
NO. the Statute of Frauds applies only to executory contracts, i.e.
those where no performance has yet been made. Where the sale
of real property through a verbal contract has been partially
executed through payments made by one party duly received by
the seller, as in the present case, the contract is taken out of the
scope of the Statute. If a contract has been totally or partially
performed, the exclusion of parol evidence would promote fraud or
bad faith, for it would enable the defendant to keep the benefits
already derived by him from the transaction in litigation, and at the
same time, evade the obligations, responsibilities or liabilities
assumed or contracted by him thereby.