Heirs of Luis Bacus vs Court of Appeals, Spouses Faustino Duray and Victoriana Duray G.R.No.

127695, 03December2001

FACTS

On 1984 Luis Bacus leased to Faustino Duray a parcel of agricultural land with total land area of 3,002 of square meters, in Cebu. The lease was for six years ending in 1990, the contract contained an option to buy clause. Under the said option, the lessee had the exclusive and irrevocable right to buy 2,000 square meters 5 years from a year after the effectivity of the contract, at P200 per square meter. That rate shall be proportionately adjusted depending on the peso rate against the US dollar, which at the time of the execution of the contract was 14 pesos. Close to the expiration of the contract Luis Bacus died on 1989, after Duray informed the heirs of Bacus that they are willing and ready to purchase the property under the option to buy clause. The heirs refused to sell, thus Duray filed a complaint for specific performance against the heirs of Bacus. He showed that he is ready and able to meet his obligations under the contract with Bacus. The RTC ruled in favor of the Durays and the CA later affirmed the decision. ISSUES Can the heirs of Luis Bacus be compelled to sell the portion of the lot under the option to buy clause? - Yes, Obligations under an option to buy are reciprocal obligations. The performance of one obligation is conditioned on the simultaneous fulfillment of the other obligation. In other words, in an option to buy, the payment of the purchase price by the creditor is contingent upon the execution and delivery of the deed of sale by the debtor. - When the Duray¶s exercised their option to buy the property their obligation was to advise the Bacus¶ of their decision and readiness to pay the price, they were not yet obliged to make the payment. Only upon the Bacus¶ actual execution and delivery of the deed

of sale were they required to pay. - The Durays did not incur in delay when they did not yet deliver the payment nor make a consignation before the expiration of the contract. In reciprocal obligations, neither party incurs in delay if the other party does not comply or is not ready to comply in a proper manner with what is incumbent upon him. Only from the moment one of the parties fulfills his obligation, does delay by the other begin. HELD The petition is DENIED nad the decision of the Court of Appeals is AFFIRMED.

Obligations

and

Contracts

Terms:

‡ Reciprocal Obligations- Those which arise from the same cause, and in which each party is a debtor and a creditor of the other, such that the obligation of one is dependent upon the obligation of the other. They are to be performed simultaneously such that the performance of one is conditioned upon the simultaneous fulfillment of the other

After the stipulated term expired the respondent refused to leave the premises. and therefore beyond the ambit of art 1308 of the NCC. It was dismissed by the RTC and later affirmed by the CA for the following reasons: (1) the stipulation in the compromise agreement which allows the lessee (Benito Dy) to stay on the premises as long as he needs it and can pay rents is valid. On 1985 Dy. ISSUES Was the stipulation in the compromise agreement which allows the lessee to stay on the premises as long as he needs it and can pay rents is valid? . 87047 . being a resolutory condition. such an agreement produces no juridical effect that can be enforced. Obligations and Contracts Terms: In 1987 another ejectment suit was filed by Lim after the failure of Dy to vacate the premises.Stipulation dependent upon the sole will of the debtor . FACTS HELD: The decision of the Court of Appeals is REVERSED AND SET ASIDE.R. A potestative condition speaks of fulfillment of an obligation rests solely upon the will of the debtor. so Francisco Lim filed an ejectment suit against Benito Dy. from 1976 to 1979. Lim did not agree to the renewal. and (2) the compromise agreement has the effect of res judicata. hence it is void. Benito Dy is ordered to immediately vacate and return the possession of the premises and pay the monthly rentals due thereon in accordance with the compromise agreement until he shall have actually vacated the same. This case was then taken over by a judicially approved compromise agreement which provides an automatic increase in rent of 20% every 3 years. If it is the debtor himself who determines the fulfillment of the condition. Mutuality does not obtain in such a contract of lease and no equality exists between the lessor and the lessee. Records show that Francisco Lim.No. This Judgment is immediately executory.This can be found in Art 1182 of the NCC. informed Lim of his intention to renew the lease up to 1988. completely depriving the owner of any say in the matter.Francisco Lao Lim vs Court of Appeals and Benito VillavicencioDy G.The continuance. effectivity. An obligation which is subject to a suspensive potestative condition is nondemandable. ‡ Potestative Condition. 31October1990 This case is with regard to Art 1182 of the NCCPotestative Condition. since the stipulation ³for as long as the defendant needed the premises and can meet and pay said increases´ is a purely potestative condition because it leaves the effectivity and enjoyment of leasehold rights to the sole and exclusive will of the lessee. and fulfillment of a contract of lease cannot be made to depend exclusively upon the free and uncontrolled choice of the lessee between continuing payment of the rentals or not.No. entered into a contract of lease with Benito Dy for a period of 3 years. and thus null .

Ferrer then filed a claim for breach of contract with damages in the RTC. since its consent is required for the recovery of the increased cost to be allowed. 29June2001 FACTS . and SBTC and a representative of an architectural firm consulted by SBTC verified Ferrer s claims for additional cost. FACTS SBTC and Manhit contracted Ferrer to construct in 200 days a building in consideration of 1.a condition wherein the execution of which is suspended by a condition which has not been accomplished.T.No. CV No.00. Potestative Obligation. the appealed decision of the Court of Appeals in CA G. ISSUES Is SBTC liable for the increase in cost of the construction due to drastic increases in cost of material? .000. .a condition whose fulfillment was completely within the power of the obligated party ACINTO TANGUILIG doing business under the name and style J. a conditional obligation shall be void if its fulfillment depends upon the sole will of the debtor. and subject to which it has been contracted.000. and instead denied any liability for the additional cost. Obligations and Contracts Terms: Conditional Obligation. 11 October 1995 constructed building at a price that is far below its actual construction cost.00 but SBTC did not pay the amount.This in effect allows SBTC to acquire the HELD: WHEREFORE. Under Art IX of the building contract it allows for the adjustment of the contract price upon mutual agreement of the parties.Yes. 125994.No.R. with the above modification in respect of the amount of attorney's fees. ENGINEERING AND GENERAL MERCHANDISING vs COURT OF APPEALS and VICENTE HERCE JR. Court of Appeals affirmed the decision. MANHIT vs COURT OF APPEALS and YSMAEL C. FERRER G. 117009.00 on top of the original cost due to drastic increases in construction materials. .It is the absence of this mutual agreement that the bank is using to support its contention that it is not liable for the increased cost.M. Ferrer was able to finish the construction of the building within the prescribed time. and in effect this is an obligation dependent on SBTC s sole will. and this constitutes unjust enrichment for SBTC at the expense of Ferrer.000.SECURITY BANK & TRUST COMPANY and ROSITO C. This is not allowed by law by virtue of Art 22 of NCC. 40450 is AFFIRMED. A recommendation was then made to settle the claim for 200. but incurred additional expenses of about 300. G. Ferrer made timely demands for payment of the increased cost.R.R. which ruled in favor of Ferrer. since under Art 1182 of the NCC.760.

Fortuitous events may be produced by two (2) general causes: (1) by Nature. This case is with regard to Art 1170 of the NCC (Stipulated interest held unconscionable) Case of DANILO SOLANGON AND URSULA SOLANGON vs JOSE AVELINO SALAZAR G. Herce refused to pay the balance because he had already paid this amount to SPGMI which constructed a deep well to which the windmill system was to be connected since the deepwell. the S.00 and installment of 15. or even if foreseen. and (2) by the act of man. such as but not limited to.000. is directed to pay petitioner JACINTO M. and assuming that he owed the 15.00 consideration is only for the construction of the windmill and the construction of the deepwell was not part of it.C. 29June2001 FACTS . governmental prohibitions.Herce contracted Tanguilig to construct a windmill system for him. for consideration of 60.Tanguilig merely stated that there was a strong wind. Court of Appeals. and (d) the debtor must be free from any participation in or aggravation of the injury to the creditor. robbery.000. such as but not limited to. It is necessary that the obligor is free from negligence.00 leaving a 15. but this decision was overturned by the Court of Appeals which ruled in favor of Herce ISSUES Can the collapse of the windmill be attributed to force majeure? Thus.000. the 60. According to Tanguilig.000.R. . a force majeure that relieved him of liability. provided that they have the force of an imposition which the contractor or supplier could not have resisted. since he delivered it in good and working condition and Herce accepted it without protest. extinguishing the liability of Tanguilig? .00 balance. Respondent VICENTE HERCE JR. In return. the appealed decision is MODIFIED. and a strong wind in this case is not fortuitous. held that 4 requisites must concur that there must be a (a) the cause of the breach of the obligation must be independent of the will of debtor (b) the event must be either unforeseeable or unavoidable. since it needs strong winds for it to work. Pursuant to the agreement Herce paid the downpayment of 30.00 with interest at the legal rate from the date of the filing of the complaint.In Nakpil vs. storms. places with strong winds are the perfect locations to put up a windmill. is inevitable.No.Yes. fires. his obligation in a normal manner.00. epidemics. The collapse of the windmill cannot be attributed to him as well.000. TANGUILIG the balance of P15. Obligations and Contracts Terms: The RTC ruled in favor of Tanguilig. attack by bandits. HELD: WHEREFORE. it was not unforeseeable nor unavoidable. 125994. in accordance with the one-year guaranty" and to complete the same within three (3) months from the finality of this decision. Herce contested that the collapse is attributable to a typhoon. earthquakes.000. petitioner is ordered to "reconstruct subject defective windmill system. . (c) the event be such to render it impossible for the debtor to fulfill Fortuitous Events.00 this should be offset by the defects in the windmill system which caused the structure to collapse after strong winds hit their place.Refers to an occurrence or happening which could not be foreseen. in order for a party to claim exemption from liability by reason of fortuitous event under Art 1174 of the Civil Code the event should be the sole and proximate cause of the loss or destruction of the object of the contract.000. floods. armed invasion.

000.Yes. Bulacan. This is with regard to ART 1170. 61 MAGTANGGOL EUSEBIO AND LEILA VENTURA G.00 plus interest. in the absence of express contract as to such rate of interest. the S. 000.00 payable within a period of four (4) months. 000.A. HELD: This action was initiated by the Solangons to prevent the foreclosure of the mortgaged property. which is null and void because it provided for unconscionable rate of interest.00 and tendered P47. with interest thereon at the legal rate. unconscionable and exorbitant hence it is contrary to morals (contra bonos mores) . 113926. and that was for the amount of P60. the payment of which was secured by the first of the above-mentioned mortgages. . with interest thereon at the rate of 6% per month. and 1990 the Solangons¶ executed 3 real estate mortgages in which they mortgaged a parcel of land situated in Sta. 000. in favor of the Salazar to secure payment of a loan of P60.R. although the C. where such loan or renewal or forbearance is secured in whole or in part by a mortgage upon real estate the title to which is duly registered. the appealed decision of the Court of Appeals is AFFIRMED subject to the MODIFICATION that the interest rate of 72% per annum is ordered reduced to 12 % per annum.00. but the latter has initiated foreclosure proceedings for their alleged failure to pay the loan P230. 23October1996 Case of Security Bank and Trust Company vs. shall be 12% per annum.00. with interest thereon at the legal rate.00 more.C MAKATI BR.the legal rate of interest for the loan or forbearance of any money.a. has held that 5.00 payable within a period of four (4) months.T.In the case of Medel vs.On 1986. 512.5% per month was reduced for being iniquitous. The subsequent mortgages were merely continuations of the first one. 000. . Maria. C. They have already paid the defendant-appellee P78. 000. and to secure payment of a loan in the amount of P230.Interest rate from damages as stipulated by parties R. payable within a period of one (1) year. .In this case the Solangons¶ are in a worse situation than the Medel case (6% per month interest rate) the said interest rate should be reduced equitably.C.No. to secure payment of a loan of P136. They alleged that they obtained only one loan form the defendant-appellee. Circular No 905 lifted the ceiling on interest rates there is nothing in the said circular that grants lenders carte blanche authority to raise interest rates to levels which will either enslave their borrowers or lead to hemorrhaging of their assets. morals. unless it is unconscionable or contrary to laws. goods or credits. public policy. Obligations and Contracts Terms: Legal Interest.B. ISSUES Is a loan obligation that is secured by a real estate mortgage with an interest of 72% p. or 6% a month unconscionable? WHEREFORE. 1987.

905 no more than allow contracting parties to stipulate freely regarding any subsequent adjustment in the interest rate that shall accrue on a loan or forbearance of money. provided they are not contrary to law. as when the debtor gives his creditor an I 0 U.P. public order. without any promise to pay. and 65. No. a sum of money to a certain person therein named. stipulations in the contract where it is not illegal. C. at a time therein expressed. terms and conditions as they may deem convenient. Respondent bound himself to pay the said amounts in six (6) monthly installments plus 23% interest per annum. Eusebio refused to pay the balance payable. respondent did not question that rate. good customs. .It is not for respondent court a quo to change the This case is with regard to Art 1170 of the NCC. In its form it usually contains a promise to pay. 1983. Upon maturity there were still principal balance remaining on the notes. private respondent Magtanggol Eusebio executed 3 Promissory Notes from different dates in favor of petitioner Security Bank and Trust Co. (SBTC) in the amounts of 100. 1684 and C. goods or credits. unconditionally. . Obligations and Contracts Terms: PROMISSORY NOTE . is hereby AFFIRMED with the MODIFICATION that the rate of interest that should be imposed be 23% per annum.a.B. .A written document in which a borrower agrees (promises) to pay back money to a lender according to specified terms.000. clauses. for value received. and Lee Chuy Realty Corporation . Significantly. instead of the 12% p. the rate of interest was agreed upon by the parties freely. at a future time. A promissory note differs from a mere acknowledgment of debt. Article 1306 of the New Civil Code provides that contracting parties may establish such stipulations. so SBTC filed a collection case against him. morals. A written promise to pay a certain sum of money. or forbearance of money in the absence of express stipulations HELD: IN VIEW OF THE FOREGOING. 13February 1989 Ernesto Ang and Rosalinda Ang vs.000. instead of the agreed upon 23% p. It is never under seal.A. or public policy.a. ISSUES Did the RTC err in using 12% instead of the 23% as agreed upon by the parties? . The court denied the motion filed by SBTC to apply the 23% p. or to his order.Yes. Circular No. the decision of the respondent court a quo.a.D. Furthermore. although the rate of interest imposed by the RTC was 12% p. and he to whom it is made is the payee.The 12% shall be applied for obligations arising from loans.FACTS On April 27.On all the abovementioned promissory notes.a. 100. It is dated and signed by the maker. The RTC rendered a judgment in favor of SBTC. He who makes the promise is called the maker.Damages GR No 80058.000. private respondent Leila Ventura had signed as co-maker.

) Obligations and Contracts terms: Reciprocal Obligations. On December 1979 Lee Chuy Realty Corporation (buyer) issued in favour of Ernesto and Rosalinda Ang (seller). without the consent of the buyer.600.000. On January 12. the seller refused to proceed with the sale unless the buyer agreed to the higher price of 2. Seller should refund the down payment with legal interest from the date of the extrajudicial demand made on March 3.00.Furthermore. It may only be granted on breaches that are so substantial and fundamental as to defeat the object of the parties making the agreement.6 million while the new receipt did not. the parties should be restored to their original situation. The first receipt indicated the purchase price of 1.It was the failure of the seller to comply with aforementioned conditions of the agreement that caused the delay in the payment of the obligation of the buyer (which is to pay the balance of the total this was merely a slight¢payment on or before January 24.1980 to pay the balance of the purchase price.The power to rescind is implied and any of the contracting parties may. Issue: .000.Yes. Was the court of Appeals correct in holding the Angs liable for breach of the agreement? .000. The RTC decided in favour of the sellers. There already existed a perfected contract of sale between the parties and the purchase price was set at 1. 1980.Facts: property is cleared of all occupants and obstructions. the price due to the seller¶s refusal to sell means that it is a serious breach of contract and that it grants the buyer the right to rescind the agreement Held: The decision of the Court of Appeals is Affirmed. demanded for the refund of the down payment on account of the failure of the sellers to comply with their obligations. with which the failure to do so will result in the cancellation of their agreement.00 as initial down payment for the purchase of the property. On appeal. The seller cannot increase the price that was the disagreement with¢agreed upon. 1980 the buyers through their counsel. 1980). After the failure of the sellers to return the 50. By March 3. resolve the contract. In the receipt that was accompanied the payment it supposedly embodied the terms and conditions of their agreement. while the sellers have not yet complied with their obligation to clear the subject properties of the obstructions thereon. MBTC check in the amount of 50. as was shown the sellers breached the agreement when they failed to fulfil the obligation incumbent upon them namely: (1) That seller will undertake to remove and clear the subject property of all occupants and obstructions within the month of December 1979 and (2) That when the subject . (As a consequence of the resolution of the sale. In response the buyers duly informed the sellers that they have been ready to comply with the obligation. breach of agreement and does not merit a rescission of the contract . the Court of Appeals overturned the decision of the RTC and held that it was the sellers that committed the breach of agreement.00 the buyers filed a complaint for the collection of a sum of money plus damages before the RTC. 1980 the seller informed the buyer that they only have until January 24. the seller shall deliver a deed of absolute sale in favour of private respondent with all pertinent papers necessary for the issuance of a certificate of title in the name of the buyer. It shall not be permitted for slight or casual breaches of contract. This accompanying receipt was not returned and instead the buyers where sent another receipt prepared and signed by the Angs.340. upon non-fulfilment by the other party of his part of the obligation.00 the seller with this action committed a serious breach of agreement.000. and their subsequent withdrawal from the sale.

For the first loan it is a fact. and was granted a favourable decision. they were all secured by PCIB checks. there were other loans of various amounts that were extended by Teresita to Olivia.is the fact or combination of facts which affords a party a right to judicial interference in his behalf. and.00 which was secured by a PCIB check under the condition that if the ring was not returned within 15 days from August 15. (c) an act or omission on the part of the defendant constituting a violation of the plaintiff¶s right or breach of the obligation of the defendant to the plaintiff. It can be inferred that since the checks were all dated to 1 month after the loan. that the ring was considered sold to Olivia Navoa 15 days after August . the continuing refusal of Olivia and Ernesto Navoa to comply with the demand of payment shows the existence of a cause of action. Art 1169 of the Civil Code is explicit: those obliged to deliver or to do something incur in delay from the time the obligee judicially or extrajudicially demands from them the fulfilment of the obligations. (b) an obligation on the part of the defendant to respect and not to violate such right. Obligations and Contracts terms: Security. The requisites for a cause of action are: (a) a right in favour of the plaintiff by whatever means and under whatever law it arises or created.NO. . and also these checks were dishonoured by the bank for lack of funds.A. Cause of Action.A. 15. remanding the case to the RTC for trial on the merits is affirmed. Teresita Domdoma and Eduardo Domdoma GR No 59255 20December1995 Facts: On December 1977 Teresita Domdoma and Eduardo Domdoma filed a case with the RTC for collection of various sums of money based on loans given by them to Olivia Navoa. There were 6 instances in which the Domdoma¶s gave Olivia Navoa a loan. It may be personal or property security.As for the other loans extended by Teresita to Olivia. Teresita attempted to deposit the check on November 1977 but the check was not honoured for lack of funds. loans which were secured by PCIB checks. . Olivia Navoa failed to pay the price for the ring when the payment was due (check issued was not honoured. After this instance. and even then.A means of ensuring the enforcement of an obligation or of protecting some interest in property.This case is with regard to Art 1169 of the NCC Delay Olivia Navoa and Ernesto Navoa vs. A cause of action is the fact or combination of facts which affords a party a right to judicial interference in his behalf. Issue: Was the decision of the RTC to dismiss the case due to having no cause of action valid? . which were all dated to 1 month after the loan. Held: The petition is DENIED and the decision of the C.A. All these checks were not honoured under the same reason as the first loan. They cased was dismissed on the ground that there was no cause of action and that the Domdoma¶s do not have no capacity to sue. The first instance is when Teresita gave Olivia a diamond ring valued at 15. They appealed to the C. Thus it is confirmed that Teresita¶s right under the agreement was violated. 1977. 1977 the ring is considered sold. it follows that the loans are then payable 1 month after they were contracted. . C..Olivia and Ernesto Navoa failed to make good the checks that were issued as payment for their obligations.000.

Although the Supreme Court has already held that a quasi. instead of Art 2176. ISSUES Was the RTC and CA correct in ordering MTCC to pay damages to the plaintiff? . Obligations and Contracts Terms: CULPA AQUILIANA.Culpa Aquiliana Case of Metro Manila Transport Corporation and Apolinario Ajoc vs. Last December 24 1986 Florentina Sabalburo and her companions were making their way to Baclaran to buy foodstuffs for Noche Buena. Ms. Sabalburo et al G. The Trial court decided in favor of Sabalburo et. driven by Apolinario Ajoc. there instantly arises a presumption juris tantum that there was negligence on the part of the employer. to escape solidary liability for a quasi-delict committed by his employee.Even though MMTC argues that the proximate cause of the victim¶s death is her negligence thus requesting the court to apply Art 2179 of the civil code. Art 2176 of the Civil Code is applied if there¶s no preexisting contractual relation between the parties.C. 1987.A. both courts are correct in awarding damages to the plaintiff. al and ordered MMTC to pay damages. either in the selection of the employee (culpa in eligiendo) or the supervision over him after the selection (culpa in vigilando). wherein the obligation imposed by Article 2176 is demandable not only for one¶s own acts or omissions-. and Col. who is obliged by law to pay for the damages done. C. but also for those of persons for whom one is responsible.This case is with regard to Art 1162. Florentina Sabalburo and her companions waited for the traffic light to turn red so that they could cross the street to take a ride to Baclaran. there being fault or negligence on the part of the defendant. 01August2002 FACTS causes damage or injury to another. . Sabalburo was then taken by the driver and conductress of the MMTC bus to San Juan de Dios hospital.R. Upon crossing the street during the red light.Yes.It should be shown that whenever an employee¶s negligence HELD: The Decision of the Court of Appeals is affirmed. the S. The victim was not able to regain consciousness and she succumbed to her injuries on January 03.refers to acts or omissions which cause damage to another. Hence. Florentina Sabalburo was hit by a fast moving MMTC bus. . In the present case. petitioner MMTC failed to rebut the presumption of negligence on its part.delict can occur even if there is a contractual relation. he has exercised the care and diligence of a good father of a family. since the act that lead to the breaking a contract may also be a tort .No.Also MMTC is liable for the death of the victim due to Art 2180 of the civil code.C upheld the findings of the trial courts that the driver and MMTC had been negligent in its duties and it is this negligence that led to the death of the victim thus showing that Art 2176 is the more applicable provision in this case. an employer must rebut the presumption by presenting convincing proof that in the selection and supervision of his employee. MMTC then appealed the case to the Court of Appeals which affirmed the decision of the trial court. According to the S. . 141089.

. FMCC filed a case against MIAA. ISSUES Was the RTC correct in ordering MIAA to pay FMCC on the basis of Quantum Meuit? . FFMCC proceeded with the fence construction even if the Notice to Proceed has not yet been signed by the General Manager. C. MAÑACOP CONSTRUCTION CO.It is shown as well that MIAA was reaping the benefits from the scallop fence and wire placed by the petitioner.Unliquidated claims present a justiciable question ripe for judicial determination which is beyond the powers of COA to adjudicate. for and in consideration of the quoted price of 307. VS. Obligations and Contracts Terms: Difference of Quantum Meruit from Quantum ValebantQuantum Meruit allows recovery of the reasonable value regardless of any agreement as to value.48 based upon quantum meruit since there is an absence of a written contract between parties. For this case the Lower court has already determined the actual amount owed by MIAA to FMCC.R. FACTS [ The difference between the Eslao case and this one. . as distinguished from Quantum Valebant or to as much as what is reasonably worth. After making repeated demands to make MIAA pay for the constructed fence. is that the matter was referred to the COA for the Eslao case because the matter on the exact amount was not at issue and the determination thereof involves a review of the factual findings and evidence in support thereof. and MIAA G. 15January1997 .440.This case is with reference to Art 1160 of the New Civil CodeQuasi.Contracts .No. Commission on Audit.C.A. . During trial it has been found that MIAA is liable to pay 238. reasonable deserves .00 Due to the urgency of the need. so there was no need for referral to COA] Ff Mañacop Construction Company Inc. The S.Yes. was contracted by MIAA to construct a perimeter fence from Asia Overseas Inc to Airscope Development Corp. According to the decision of the Appellate Court. the computation for the obligation owed by MIAA should be referred to the Commission on Audit. On appeal the Court agreed with MIAA with regard to the error of the trial court in the valuation of the obligation.068. 122196.Property or benefit is not ultra vires (they can be a subject of an express contract and are within the contractual powers of the public body) HELD: The decision of the Court of Appeals is set aside and the decision of the RTC is reinstated. Case of FF. by the time of the halt in construction it is already 95% finished which was worth 282. INC. basing its decision on the Eslao case..501. It entitles the party to as much as he. as was shown in the case of Eslao v.It is also shown that the payment is limited to the actual cost of chargeable against funds authorized and certified for such purpose.00. the new general manager of MIAA stopped the construction of said fence. it was shown the contract was not fraudulent or mala in se. also it has been shown that the project was already covered by a specific appropriation. After the Feb 1986 Revolution.

The retainer fee paid by the Union is not a payment for the firm s execution or performance of the services listed in the contract.The measure of compensation for private respondent s services as against his client should be properly addressed by the rule of quantum meruit is used as the basis for determining the lawyer s professional fees in the absence of a contract.end bonus differentials while affirming the award of holiday pay differential. 1990. the S. availed itself of.year and year.C. 14March1997 FACTS That TRB Employees Union. FACTS . 1990 notified the union.00 paid as retainer fees is intended merely as a consideration for the law firm s commitment to render the services enumerated on PART A and B of the retainer agreement.This case is with reference to Art 1160 of the New Civil CodeQuasi.00 in consideration of the law firm s undertaking to render the services enumerated in their contract. G. One of the sources of extra. management. subject to the particular qualifications. .Independent vs NLRC and Emmanuel Noel A. L. HELD: The resolution of the NLRC with regard to the attorney s fees is modified. Obligations and Contracts Terms: ISSUES Was the lien made by the respondent attorney over the award as attorney s fees valid? General Retaining Fee. The NLRC granted the petition of the union with regard to the demand for bonuses. not withstanding the lack of understanding with his client as to his remuneration.000. the TRB and pay . Because the contract between the Union and the attorney stipulates that the 3. It is not necessary that the parties agree on a definite fee for the special services rendered by the firm in order that the union may be obligated to pay compensation. had a retainer agreement with Atty. The . After. 1990 modified the decision of the NLRC by deleting the award of mid. This case is with reference to Art 1157 of the New Civil CodeSources of Contracts Case of Luis Pichel vs. and Union is hereby ordered to pay 10. The reason for the remuneration is that the lawyer is deprived of the opportunity of rendering services for a fee to the opposing party or other parties. on the basis a quasi-contract.36902 30January1982 Prudencio Alonzo . and benefited from the firm s services. 120592. and the NLRC of his right to exercise enforce his attorney s lien over the award of holiday differential through a letter dated October 8.No. in favor of Luis Pichel (VENDEE).is the fee paid to a lawyer to secure his future services as general counsel for any ordinary legal problem that may arise from routinary business of the client and referred to him for legal action. Equity and fair play dictate that petitioner should pay the same after it accepted. acting upon the challenge of TRBank of the NLRC decision in its decision on August 30. respondent on September 18. Cruz.No.000. During the existence of the agreement the union referred to the private respondent the claims of its members for holiday. mid-year and year-end bonuses against their employer TRB.contractual obligations found in our civil That Prudencio Alonzo (VENDOR) executed a deed of sale for the coconut fruits of his land in Balactasan Plantation in Lamitan.Yes.Obligations do not emanate only from contracts. for 3. After TRB voluntarily complied with the decision. Cruz G.R.As early as 1903 the court has allowed the payment of reasonable professional fees to an interpreter.000 for the firm s rendered services. It is a compensation for lost opportunities.Contracts code is the quasi contract premised on the roman maxim that nemo alterius detrimento locupletari potest Case of Traders Royal Bank Employees Union. . Basilan.R.

G.200. it merely contracts the sale of the fruits of the land. Sarmiento Trucking Corporation (GPS) undertook to deliver on 18 June 1994 thirty (30) units of Condura S. . While the truck was traversing the north . since the coconut fruits are mere accessories and the land is the principal.Its interpretation in express form is the preferred.P.The vendor after having received the consideration for the sale of his coconut fruits cannot be allowed to impugn the validity of the contracts he entered into.P. regarding the rule on interpreting contracts. G.The possession of the coconut fruits for 7 years is different from possession of the land. The RTC decided in favor of the vendor. EROLES G. 141910. dismissing the complaint. ISSUES Was the Deed of Sale valid? ‡ Contract of Lease. and it was part of the agreement of the sale that the sum of 3. . and another one entered in its place. 477. .There was no need on the part of the RTC to interpret the contract. due to its supposed violation of RA No. to the prejudice of petitioner who contracted in good faith and consideration HELD: This case is with reference to Art 1159 of the New Civil Code Case of FGU INSURANCE CORPORATION vs. . due to the fact that the deed of sale that was executed was invalid.No. since there was no ambiguity.The S.land from which the subject coconut fruits are derived from was subjected to a cancellation of the award in 1965. relied upon ART 1370 of the Civil Code.defined as giving or the concession of the enjoyment or use of a thing for a specified time and fixed price.S TRUCKING CORPORATION and LAMBERT M. due to the reason of violation of the law that disallows alienation of land (the vendor¶s rights to the land were reinstated in 1972) The vendor and his wife sold to the vendee the fruits of the coconut trees from 1968 to 1976 for consideration of 4. not the land itself. Even during the date of sale.C. in which they equated the deed of sale executed by the parties as a contract of lease.R.D. the land was still leased to one Ramon Sua. white refrigerators aboard one of its Isuzu truck.650.a transfer of accessories does not necessarily mean a transfer of principal. 06August2002 The Judgment of the lower court has been set aside. driven by Lambert Eroles.Yes. . .00 was to be paid by the vendor to Ramon Sua as to release the land. Construction shall be employed when such literal interpretation is impossible. it is the other way around. The RTC erred in constructing the deed of sale as a contract of lease. Obligations and Contracts Terms: FACTS ‡ Difference between a contract of sale and a lease of things: that the delivery of the thing sold transfers ownership. while in a lease no such transfer of ownership results as the rights of the lessee are limited to the use and enjoyment of the thing leased.

and admits that the cargoes it has assumed to deliver have been lost or damaged while in its custody. . the delivery of the goods in its custody to the place of destination . is hereby ordered to pay FGU Insurance Corporation the value of the damaged and lost cargoes in the amount of P204. The RTC and CA both ruled in favor of the Respondent. Tarlac. EITHER AS A COMMON CARRIER OR A PRIVATE CARRIER. Respondents further claimed that the cause of damage was purely accidental.the interest in having the benefit of his bargain by being put in as good a position as he would have been in had the contract been performed reliance interest. In its answer. resulting in damage to the cargoes. filed with leave of court a motion to dismiss the complaint by way of demurrer to evidence on the ground that petitioner had failed to prove that it was a common carrier. A subrogee is usually the insurance company which has insured the party whose expenses were paid. FGU Insurance Corporation (FGU).the person or entity that assumes the legal right to attempt to collect a claim of another (subrogor) in return for paying the other's expenses or debts which the other claims against a third party. from GPS. Inc. . Bamban. Subrogee. Inc.00. 450. paid to Concepcion Industries.00 Obligations and Contracts Terms: expectation interest.gives rise to a presumption of lack of care and corresponding liability on the part of the contractual obligor the burden being on him to establish otherwise. Inc. since 1988. It. Since GPS failed to heed the claim. GPS has failed to do so. Thus.GPS recognizes the existence of a contract of carriage between it and petitioner s assured. causing it to fall into a deep canal. a corresponding right of relief. FGU. it collided with an unidentified truck. the value of the covered cargoes: P204. prima facie.diversion road along McArthur highway in Barangay Anupol. in turn. MAY BE PRESUMED TO HAVE BEEN NEGLIGENT WHEN THE GOODS IT UNDERTOOK TO TRANSPORT SAFELY WERE SUBSEQUENTLY DAMAGED WHILE IN ITS PROTECTIVE CUSTODY AND POSSESSION. In such a situation. FGU filed a complaint for damages and breach of contract of carriage against GPS and its driver with the Regional Trial Court. of Makati City. and it was not so engaged in business as a common carrier. HELD: . The decision of the lower courts insofar as Lambert M. or failure of compliance with. a default on. the obligation in this case. GPS. ISSUES WHETHER RESPONDENT GPS.. recognizing the obligatory force of contracts.which is his interest in having restored to him any benefit that he has conferred on the other party. an insurer of the shipment.. being the subrogee of the rights and interests of the insured sought reimbursement of the amount. 450.In culpa contractual. will not permit a party to be set free from liability for any kind of misperformance of the contractual undertaking or a contravention of the tenor thereof . upon which the action of petitioner rests as being the subrogee of Concepcion Industries.the interest in being reimbursed for loss caused by reliance on the contract by being put in as good a position as he would have been in had the contract not been made Restitution interest. FGU has a claim for the amount paid out. Branch 66.The law.. respondents asserted that GPS was the exclusive hauler only of Concepcion Industries. instead of submitting its evidence. the mere proof of the existence of the contract and the failure of its compliance justify. Eroles is concerned is affirmed but assailed decision with regard to GPS trucking is reversed.

In other words. a minor. Civil Code). assuming the awards made in the two cases vary. mother or guardian. ISSUE: Whether or not Marvin Hill may be held civilly liable under Article 2180. Ilagan was sued for homicide through reckless imprudence and while the case was pending in the CA the victims sued Ilagan and BLTB for damages via an independent civil action based on Article 2180. The acquittal of Reginald in the criminal case does not bar the filing of a separate civil action. But in the case at bar. and based on this. it is. A separate civil action lies against the offender in a criminal act. . also clear that pursuant to Article 399. HELD: Yes. to recover damages on both scores. 1977 Torts and Damages ± Civil Liability from Quasi Delicts vs Civil Liability from Crimes Reginald Hill. HELD: Yes.´ Elcano then filed a civil action against Reginald and his dad (Marvin Hill) for damages based on Article 2180 of the Civil Code. caused the death of Agapito (son of Elcano). and would be entitled in such eventuality only to the bigger award of the two. Ilagan was driving a bus owned by Batangas Laguna Tayaban Bus Company along Manila South Super Highway. Hill argued that the civil action is barred by his son¶s acquittal in the criminal case. Thus ³Emancipation by marriage or by voluntary concession shall terminate parental authority over the child¶s person. He sped pass a big cargo truck thereby taking the opposite lane and he hit the car driven by a certain de los Reyes which resulted to the latter¶s death and the latter¶s niece¶s death and causing serious injuries to the other car passengers. Article 2180 is applicable to Marvin Hill ± the SC however ruled since at the time of the decision. emancipation by marriage of the minor is not really full or absolute. It shall enable the minor to administer his property as though he were of age. Elcano filed a criminal case against Reginald but Reginald was acquitted for ³lack of intent coupled with mistake. the Corpus case was different because the damages claimed there were based on the same criminal negligence. whereas the civil liability for the same act considered as a quasi-delict only and not as a crime is not extinguished even by a declaration in the criminal case that the criminal act charged has not happened or has not been committed by the accused.´ Therefore. Reginald is already of age. BLTB vs CA 64 SCRA 427 Torts and Damages ± Civil Liability from Quasi Delicts vs Civil Liability from Crimes In February 1963. The opinion of Justice Capistrano in Corpus vs Paje is not controlling because it is not doctrinal ± this is because the majority of the court did not agree with it. Briefly stated. Marvin¶s liability should be subsidiary only ± as a matter of equity. emancipation takes place ³by the marriage of the minor child´. culpa aquiliana includes voluntary and negligent acts which may be punishable by law. or guardian. the extinction of civil liability referred to in Par. but he cannot borrow money or alienate or encumber real property without the consent of his father or mother. Rule 111. and that if ever. He can sue and be sued in court only with the assistance of his father. BLTB wanted the dismissal of the civil suits pending the criminal suit in the CA. however. (e) of Section 3. ISSUE: Whether or not a civil suit can be filed independently of the criminal negligence case pending before the CA. While it is true that parental authority is terminated upon emancipation of the child (Article 327. BLTB assailed the suit as it invoked the opinion penned by Justice Capistrano in Corpus vs Paje which states that under Article 33 of the Civil Code it excludes criminal negligence as one of those which an independent civil action can be filed. Also. provided that the offended party is not allowed. the damages sought to be recovered were based on quasi-delict or Article 2176 & 2180 of the Civil Code which is an independent civil action.Elcano vs Hill 77 SCRA 100 ± May 26. if accused is actually charged also criminally. refers exclusively to civil liability founded on Article 100 of the Revised Penal Code. whether or not he is criminally prosecuted and found guilty or acquitted. his civil liability as a parent has been extinguished by the fact that his son is already an emancipated minor by reason of his marriage. and under Article 397. hence homicide through reckless imprudence or criminal negligence comes under the general rule that the acquittal of the defendant in the criminal action is a bar to his civil liability based upon the same criminal act notwithstanding that the injured party reserved his right to institute a separate civil action.

American Airlines vs Court of Appeals 327 scra 482 Contract of Carriage Private respondent Amadeo Seno purchased from Singapore Airlines in Manila conjunction tickets. In Geneva. It held that the petitioner acted as an agent of the Singapore Airlines under IATA rules and as an agent of the principal carrier the petitioner may be held liable under contract of carriage in Manila. detained him for about an hour and allowed him to board the plane only after all the passengers have boarded. private respondent exchanged the unused portion of the conjunction ticket from International Air Transport Association clearing house in Geneva. . and go straight to New York. ISSUE: Whether or not the Philippine courts have jurisdiction over the action for damages. the petitioner decided to forego his trip to Copenhagen. Private respondent filed an action for damages before the RTC of Cebu for the alleged embarrassment and mental anguish he suffered at the Geneva Airport when the petitioner¶s security officers prevented him from boarding the plane. HELD: The Supreme Court ruled that the case was properly filed in the Philippines.