Erneylou V Ranay

Civil Law Review 2

1. Salonte v COA G.R. No. 207348 August 19, 2014

Facts:

In 1989, the City of Mandaue and F.F. Cruz and Co., Inc. (F.F. Cruz) entered into a Contract of
Reclamation in which F.F. Cruz, in consideration of a defined land sharing formula thus stipulated,
agreed to undertake, at its own expense, the reclamation of foreshore and submerged lands from
the Cabahug Causeway in that city. The project was to be completed in six (6) years or until 1995. In
connection with the reclamation project, the parties also agreed, by way of a Memorandum of
Agreement, on the use of a parcel of land belonging to the city where, as a compensation for its use
for building housing facilities for F.F. Cruz’s employees, the improvements introduced thereto by F.F.
Cruz shall be owned by the City. The project was not completed by that date.

Thereafter, in 1997, the Department of Public Works and Highways entered into an agreement with
F.F. Cruz to demolish the said housing facilities because these improvements stand in the way of the
Metro Cebu Development Project II (MCDP II), which included the widening of the Plaridel Extension
Mandaue Causeway.

Petitioner Rowena Salonte, then the Human Resources Management Officer III, prepared
disbursement vouchers in favor of F.F. Cruz. This was done with approval of Project Director of the
MCDP II, who addressed the said disbursement through a Letter-Complaint, alleging that F.F. Cruz
was no longer the owner of the property as the ownership thereof has passed to the City pursuant
to the Contract of Reclamation.

The Commission on Audit (COA) disallowed the disbursement, ruling that the fact that the project
was not completed in 1995 did not negate the government’s ownership of the improvements. Also,
it was the intention of the parties that the government be compensated for the use of the land for
the housing facilities, and making the government pay for the use of the land would render such
intention of the parties inutile.

Issue:

Whether or not F.F. Cruz owned during the period material the properties that were demolished.

Ruling:
Yes. The COA and its audit team obviously misread the relevant stipulations of the MOA in relation
to the provisions on project completion and termination of contract of the Mandaue-F.F. Cruz
reclamation contract.

Article 1193. Obligations for whose fulfillment a day certain has been fixed, shall be demandable
only when that day comes.

Obligations with a resolutory period take effect at once, but terminate upon arrival of the day
certain.

A day certain is understood to be that which must necessarily come, although it may not be known
when.

If the uncertainty consists in whether the day will come or not, the obligation is conditional, and it
shall be regulated by the rules of the preceding Section.

A plain reading of the Contract of Reclamation reveals that the six (6)-year period provided for
project completion, or, with like effect, termination of the contract was a mere estimate and cannot
be considered a period or a "day certain" in the context of the afore quoted Art. 1193.

Doctrine: If the period in the contract is merely an estimate, then the lapse of the said period will
not make the obligation immediately demandable because it cannot be deemed a “day certain” in
the context of Article 1193, the first paragraph of which provides that “Obligations for whose
fulfillment a day certain has been fixed, shall be demandable only when that day comes.”

2. Quesada v Bonanza Restaurants G.R. No. 207500 November 14, 2016

Facts:

Bonanza Restaurant, Inc. is the registered owner of a property situated in EDSA, Balintawak, Quezon
City. Efren S. Quesada was Bonanza’s General Property Manager while his brother, Miguel Quesada,
was the Company President. Bonanza, represented by Miguel, allegedly leased the subject lot to
Efren. The lease was supposedly “effective July 1, 2003 until such time that it is replaced or
amended by another resolution agreement” and “effective until such time that the parcel of land is
sold”. Using the contract of lease, Efren entered into various subleases with third parties.

Later, Bonanza rescinded the lease contract and formally demanded the return of the subject lot.
Bonanza filed a complaint for unlawful detainer against Efren and his sublessees. The complaint
alleged that Efren constructed concrete structures on the subject lot – in bad faith and without its
knowledge or consent – to prolong his enjoyment of the lot, and that Efren had been forestalling the
sale of the subject lot.
The Metropolitan Trial Court dismissed the complaint prematurely after finding that Bonanza had no
cause of action yet against Efren and his sublessess. The MetC further observed that Bonanza’s
unilateral rescission of the lease was unjustified because the contract did not grant it the power to
unilaterally or extra judicially rescind the agreement. The RTC later reversed the MeTC decision,
ejecting Efren and his sublessees from the property. The CA affirmed the RTC’s ruling.

Issue:

Whether or not the contract specifically fix the period of the obligation.

Ruling:

No. The contract did not specifically fix the period of the obligation. Therefore, we cannot conclude
that the lease had already expired. While the nature and the circumstances of the contract make it
apparent that a period was intended, this does not authorize the lessor to unilaterally conclude that
the period had lapsed or to summarily eject the lessee. The Civil Code only grants the lessor the
right to ask the courts to fix the period.

Doctrine: Art. 1197. If the obligation does not fix a period, but from its nature and the circumstances
it can be inferred that a period was intended, the courts may fix the duration thereof.

The courts shall also fix the duration of the period when it depends upon the will of the debtor.

In every case, the courts shall determine such period as may under the circumstances have been
probably contemplated by the parties. Once fixed by the courts, the period cannot be changed by
them.

3. Clemente v Rep of the Phil G.R. No. G.R. No. 220008 February 20, 2019

Facts:

Municipal Mayor Amado A. Clemente (Mayor Clemente), Dr. Vicente A. Clemente, Judge Ramon A.
Clemente, and Milagros A. Clemente (Clemente Siblings) were the owners of a parcel of land in
which they executed a Deed of Donation in favor of the Republic of the Philippines.

In the same Deed of Donation, the District Engineer of DPWH Region IV-A accepted said and
donation.
In accordance with the Deed of Donation, the construction of a building for a hospital was started in
the following year. However, for reasons unknown, the construction was never completed and only
its foundation remains today.

The heirs of Mayor Clemente wrote the District Engineer asking for information on the development
of the government hospital. In a subsequent letter restating their inquiry and consultation, the
District Engineer informed Socorro Clemente, one of the heirs, that the DPWH no longer had a plan
to construct a hospital at the site and that the DPWH had no budget for the hospital construction.

In 2004, Socorro filed a Complaint, and subsequently an Amended Complaint for Revocation of
Donation, Reconveyance and Recovery of Possession alleging that the Republic of the Philippines
failed to comply with the condition imposed on the Deed of Donation, which was to use the
property " solely for hospital site only and for no other else, where a [government hospital shall be
constructed.”

The Regional Trial Court held that since the parties did not fix the period within which to comply
with the condition, but a period was indeed intended, the Court may fix the period for the
performance of the donee’s obligation, under Article 1197 of the Civil Code. However, since Socorro
failed to pray for the fixing of the period, the RTC dismissed the case.

The appeal was denied by the Court of Appeals, finding that while there may be basis for the
recovery of the property, Socorro, as an heir of a deceased co-donor, cannot assert the concept of
heirship to participate in the revocation of the property donated by her successor-in-interest.

Issue:

Whether or not the Regional Trial Court is correct that the action is premature because there can be
no breach before the court fixes a period to comply with the obligation.

Ruling:

No. When the obligation does not fix a period but from its nature and circumstances it can be
inferred that a period was intended, the general rule provided in Art. 1197 of the Civil Code applies,
which provides that the courts may fix the duration thereof because the fulfillment of the obligation
itself cannot be demanded until after the court has fixed the period for compliance therewith and
such period has arrived.

This general rule however cannot be applied considering the different set of circumstances existing
in the instant case. More than a reasonable period of fifty (50) years has already been allowed
petitioner to avail of the opportunity to comply with the condition even if it be burdensome, to
make the donation in its favor forever valid. But, unfortunately it failed to do so. Hence, there is no
more need to fix the duration of a term of the obligation when such procedure would be a mere
technicality and formality and would serve no purpose than to delay or lead to an unnecessary and
expensive multiplication of suits. Moreover, under Art. 1191 of the Civil Code, when one of the
obligors cannot comply with what is incumbent upon him, the oblige may seek rescission and the
court shall decree the same unless there is just cause authorizing the fixing of a period. In the
absence of any just cause for the court to determine the period of the compliance, there is no more
obstacle for the court to decree the rescission claimed.

Doctrine: There is no more need to fix the duration of a term of the obligation when such procedure
would be a mere technicality and formality and would serve no purpose than to delay or lead to an
unnecessary and expensive multiplication of suits. Moreover, under Art. 1191 of the Civil Code,
when one of the obligors cannot comply with what is incumbent upon him, the oblige may seek
rescission and the court shall decree the same unless there is just cause authorizing the fixing of a
period

4. Camp John Hay Dev v Charter Chemical G.R. No. 198849 August 7, 2019

Facts:

Camp John Hay Development Corporation is the investment arm of a consortium engaged in the
construction of the Camp John Hay Manor in Baguio City.

In January 2001, Camp John Hay Development entered into a Contractor's Agreement with Charter
Chemical, the company awarded to complete the interior and exterior painting works of unit 2E of
the Camp John Hay Manor.

In 2003, Charter Chemical completed the painting works, after which Camp John Hay Development
issued a Final Inspection and Acceptance Certificate belatedly on May 30, 2005. Charter Chemical
demanded the execution of the deed of sale and delivery of the titles of the two (2) units in
September 2004, with a follow-up in April 2005. In June 2005, Camp John Hay Development and
Charter Chemical executed contracts to sell.

Due to unforeseen delay in the construction, Charter Chemical, through counsel, wrote Camp John
Hay Development, demanding that it transfer the units or pay the value of these units in the sum of
P6,996,517.48.

When it felt that further demands would be futile, Charter Chemical, on June 12, 2008, filed before
the Construction Industry Arbitration Commission a Request for Arbitration under the arbitration
clause in the Contractor's Agreement which it ruled in favor of Charter Chemical then it was affirmed
by the Court of Appeals.

Issue:
Whether or not a period should be fixed under Article 1197 of the Civil Code.

Ruling:

No. There is no just cause for this Court to fix the period for the benefit of petitioner.

Article 1197 applies "when the obligation does not fix a period but from its nature and
circumstances it can be inferred that a period was intended[.] "This provision allows the courts to fix
the duration "because the fulfillment of the obligation itself cannot be demanded until after the
court has fixed the period for compliance therewith and such period has arrived."

There is no just cause for this Court to determine the period of compliance. As can be gleaned from
the records of this case, the obligation of petitioner to build the Camp John Hay Suites had been
dragging for years even before it entered into the Contractor's Agreement with respondent.

The Memorandum of Agreement that petitioner executed with the Bases Conversion and
Development Authority shows that the construction of the Camp John Hay Suites began in 1996.
When respondent demanded the units' transfer in 2007, more than 10 years had lapsed; yet, within
those years, petitioner was still not able to complete the construction of the Camp John Hay Suites.

To tolerate petitioner's excuses would only cause more delay and burden to respondent. Petitioner
failed to forward any just cause to convince this Court to set a period. It merely reasoned force
majeure and mutual delays with Bases Conversion and Development Authority without offering any
explanation for its alleged difficulty in building the units.

To belatedly fix the period for petitioner's compliance would mean refusing immediate payment to
respondent. Petitioner's noncompliance with its obligation to deliver the two (2) units as payment to
respondent can no longer be excused.

The law and jurisprudence are clear. When the obligor cannot comply with its obligation, the obligee
may exercise its right to rescind the obligation, and this Court will order the rescission in the
absence of any just cause to fix the period. Here, lacking any reasonable explanation and just cause
for the fixing of the period for petitioner's noncompliance, the rescission of the obligation is
justified.

Doctrine: Rescission under Article 1191 of the Civil Code is the proper remedy when a party
breaches a reciprocal obligation. Because each case has its own distinct circumstances, the Court’s
power to fix a period of an obligation under Article 1197 is discretionary and should be exercised
only if there is a just cause.
5. Sps Berot v Siapno G.R. No. 188944 July 9, 2014

Facts:

On May 23, 2002, Macaria Berot and spouses Rodolfo A. Berot and Lilia P. Berot obtained a loan
from Felipe C. Siapno in the sum of Php250,000.00, payable within one year together with interest
thereon.

A security for the loan, Macaria and Lilia mortgaged to Felipe a portion of land in Banaoang,
Calasiao, Pangasinan in the names of Macaria and her husband Pedro, deceased. On June 23, 2003,
Macaria died.

Felipe filed an action for foreclosure of mortgage and damages on July 15, 2004 in the Regional trial
Court of Dagupan City because of the mortgagor’s default.

Petitioners alleged that the contested that their obligation is only joint, and that the lower court has
no jurisdiction over Macaria for the reason that no summons were served on her as she was already
dead.

The Regional Trial Court ruled in favor of Siapno. The Court of Appeals affirmed the decision of the
RTC.

Issue:

Whether the nature of the loan obligation contracted by petitioners is joint.

Ruling:

Yes. The loan obligation is joint. Under Article 1207 of the Civil Code of the Philippines, 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:

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.

The law further provides that to consider the obligation as solidary in nature, it must expressly be
stated as such, or is provided by the law or is required by the nature of the obligation.
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.

Doctrine: Under Article 1207 of the Civil Code of the Philippines, 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:

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.

6. Sps Ibañez v Harper G.R. No. 194272 February 15, 2017

Facts:

On October 1996, spouses Amado and Esther Ibañez borrowed from Francisco E. Muñoz, Sr.,
Consuelo Estrada, and Ma. Consuelo E. Muñoz the amount of ₱1,300,000. The petitioners issued a
promissory note to respondents to pay the loan amount with interest and executed a deed of real
estate over a parcel of land as security.

On September 23, 1997, alleging that the conditions of the mortgage have been violated since
November 17, 1996 and that all check payments were dishonored by the drawee, Ma. Consuelo and
Consuelo applied for foreclosure of the real estate mortgage.

On June 11, 2002, the parties filed a Joint Motion for Approval of Amended Compromise
Agreement. The Amended Compromise Agreement, signed by the spouses Ibañez and Francisco, for
himself and on behalf of Ma. Consuelo and Consuelo.

However, the defendants failed to comply with the agreement and during the period to do so
Francisco died. His heirs then substituted him.

Aggrieved by the Regional Trial Court order, the heirs of Francisco filed before the CA a Petition for
Certiorari under Rule 65 of the Revised Rules of Court. They assailed the Orders dated August 11,
2006 and February 20, 2007 of the trial court and clarified that contrary to the findings of the trial
court, they are pushing for the execution of the Amended Compromise Agreement.
The CA ruled that the Amended Complaint and the Hatol identified Francisco, Ma. Consuelo and
Consuelo as the creditors and the parties who were supposed to receive the proceeds of the
Amended Compromise Agreement. Since the Deed of Assignment was executed only in favor of Ma.
Consuelo and Consuelo, the loan obligation of the spouses Ibañez to Francisco remained unsettled.

Issue:

Whether or not the obligation created in the amended compromise agreement and hatol is solidary.

Ruling:

No. As correctly identified by the CA, the Amended Compromise Agreement clearly refers to the
spouses Ibañez as plaintiffs and Francisco, Consuelo and Ma. Consuelo as the defendants they
covenanted to pay. There is nothing in the Hatol, and the Amended Compromise Agreement it is
based on, which shows a declaration that the obligation created was solidary.

In any case, solidary obligations cannot be inferred lightly. They must be positively and clearly
expressed. Articles 1207 and 1208 of the Civil Code provide:

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.

Art. 1208. If from the law, or the nature or the wording of the obligations 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 or debtors, the credits or debts being considered
distinct from one another, subject to the Rules of Court governing the multiplicity of suits.

In this case, given that solidarity could not be inferred from the agreement, the presumption under
the law applies-the obligation is joint.

Doctrine: Solidary obligations cannot be inferred lightly. They must be positively and clearly
expressed.