SUBJECT ELEMENTS OCAMPO III. VS. PEOPLE G.R Nos. 156547-51. 156547-51. February 4, 2008 FACTS: The Department of Budget and Management released the amount of Php 100 Million for the support of the local government unit of the province province of Tarlac. However, However, petitioner petitioner Ocampo, governor of Tarlac, Tarlac, loaned out more than P 56.6 million in which he contracted with Lingkod Tarlac Foundation, Inc., thus, it was the subject of 25 criminal charges against the petitioner. The The Sandig Sandiganb anbaya ayan n convic convicted ted the petitio petitioner ner of the crime crime of malversation of public funds. However, the petitioner contended that the loan was private in character since it was a loan contracted with the Taralc Foundation.
ISSUE: Whether or not the amount loaned out was private in nature.
RULING : Yes, the loan was private in nature because Art. 1953 of the New Civil Code provides that “a person who receives a loan of money or any other fungible thing acquires the ownership thereof, and is bound to pay the creditor an equal amount of the same kind and quality.” The fact that the petitioner-Governor contracted the loan, the public fund changed its nature to private character, thus it is not malversation which is the subject of this case, instead it must be a simple collection of money suit against the petitioner in case of non payment . Therefore, the petitioner is acquitted for the crime of malversation.
SOURCES OF OBLIGATIONS
A.
LAW
1. 2. 3. 4. 5. 6.
LEUN LEUNG G BEN BEN VS. VS. O’B O’BRI RIEN EN,, 38 38 PHI PHIL L 182 182 PELA PELAYO YO VS. VS. LAU LAURO RON, N, 12 PHIL PHIL 453 453 NIKK NIKKO O HOT HOTEL EL VS. VS. REY REYES ES,, 452 452 SCRA SCRA 532 532 ST. MARY’S MARY’S ACADEM ACADEMY Y VS. VS. CARPI CARPITAN TANOS, OS, FEB. FEB. 6, 2002 2002 REGINO REGINO VS. VS. PANG PANGASI ASINAN NAN COLLE COLLEGE, GE, NOV. NOV. 18, 18, 2004 2004 COSMO COSMO ENTERT ENTERTAIN AINMEN MENT T VS. VS. LA LA VILL VILLE, E, AUG. AUG. 20, 2004 2004
LEUNG BEN; plaintiff, plaintiff, VS. P. J. O’BRIEN, JAMES A. OSTRAND and GEO. R. HARVEY, Judges of First Instance of the City of Manila, defendants April 6, 1918 FACTS: On December 12, 1917, an action was instituted in the Court of First Instance of Manila by P.J. O’Brien to recover of Leung Ben the sum of P15,000, all alleged alleged to have have been lost by the plaintiff plaintiff to the defendant defendant in a series series of gambling, banking, and percentage games conducted during the two or three months prior to the institution of the suit. The plaintiff asked for an attachment against the property of the defendant, on the ground that the latter was about to depart from the Philippines with with intent to defraud his creditors. This attachment was issued. issued. The provision provision of law under which which this attachment attachment was issued issued requires that there should be a cause of action arising upon contract, express or implied. implied. The contention contention of the petitioner petitioner is that the statutory statutory action to recover money lost at gaming is not such an action as is contemplated in this provision, and he insists that the original complaint shows on its face that the remedy of attachment is not available in aid thereof; that the Court of First Instance acted in excess of its jurisdiction in granting the writ of attachment; that the petitioner has no plain, speedy, and adequate remedy by appeal or otherwise; and that consequently the writ of certiorari supplies the appropriate remedy for this relief. ISSUE: Whether or not the statutory obligation to restore money won at gaming is an obligation arising from contract, express or implied. RULING:
Yes. In permitting the recovery money lost at play, Act No. 1757 has introduced modifications in the application of Articles 1798, 1801, and 1305 of the Civil Code. The first two of these articles relate to gambling contracts, while article 1305 1305 treats treats of the nullity nullity of contrac contracts ts proceed proceeding ing from a viciou viciouss or illici illicitt consideration. Taking all these provisions together, it must be apparent that the obligation to return money lost at play has a decided affinity to contractual obligation; and the Court believes that it could, without violence to the doctrines of the civil law, be held that such obligations is an innominate quasi-contract.
RULING: No. The Court held that the rendering of medical assistance is one of the obli obliga gati tion onss to whic which h spou spouse sess are are bound bound by mutu mutual al suppo support rt,, expr expres essl sly y determined by law and readily demanded. Therefore, there was no obligation obligation on the part of the in-laws but rather on the part of the husband who is not a party. Thus, decision affirmed.
It is however, unnecessar unnecessary y to place the decision decision on this ground. In the opinion of the Court, the cause of action stated in the complaint in the court below is based on a contract, express or implied, and is therefore of such nature that the court had authority to issue issue the writ of attachment. The application for the writ of certiorari must therefore be denied and the proceedings dismissed. LAW AS A SOURCE OF OBLIGATION
ARTURO PELAYO, plaintiff-appellant VS. MARCELO LAURON, defendant-appellee 12 Phil 453 January 12, 1909
LAW AS A SOURCE OF OBLIGATION
FACTS: On November 23, 1906, Arturo Pelayo, a physician, filed a complaint against Marcelo and Juana Abella. He alleged that on October 13, 1906 1906 at night, Pelayo was called to the house of the defendants to assist their daughter-in-law who was about to give birth to a child. Unfortunately, the daughter-in-law died as a consequence consequence of said childbirth. childbirth. Thus, the defendant defendant refuses to pay. The defen defendan dants ts argue argue that that their their daugh daughter ter-i -in-l n-law aw live lived d with with her husb husban and d independently and in a separate house without any relation, that her stay there was accidental and due to fortuitous event.
ISSUE: Whet Whether her or not not the the defe defenda ndants nts should should be held held liabl liable e for the the fees fees demanded by the plaintiff upon rendering medical assistance to the defendants’ daughter-in-law.
ASI CORPORATION, plaintiff-appellant VS. EVANGELISTA, defendant-appellee February 14, 2008 FACTS: Priv Privat ate e resp respon onde dent nt Evan Evange geli list sta a cont contrac racte ted d Peti Petiti tion oner er ASJ ASJ Corporation for the incubation and hatching of eggs and by products owned by Evangelista Evangelista Spouses. The contract contract includes the scheduled scheduled payments of the service of ASJ Corporation that the amount of installment shal shalll be paid paid afte afterr the the deli delive very ry of the the chic chicks ks.. Howe Howeve ver, r, the the ASJ ASJ Corporation detained the chicks because Evangelista Spouses failed to pay the installment on time.
ISSUE:
Yes. In permitting the recovery money lost at play, Act No. 1757 has introduced modifications in the application of Articles 1798, 1801, and 1305 of the Civil Code. The first two of these articles relate to gambling contracts, while article 1305 1305 treats treats of the nullity nullity of contrac contracts ts proceed proceeding ing from a viciou viciouss or illici illicitt consideration. Taking all these provisions together, it must be apparent that the obligation to return money lost at play has a decided affinity to contractual obligation; and the Court believes that it could, without violence to the doctrines of the civil law, be held that such obligations is an innominate quasi-contract.
RULING: No. The Court held that the rendering of medical assistance is one of the obli obliga gati tion onss to whic which h spou spouse sess are are bound bound by mutu mutual al suppo support rt,, expr expres essl sly y determined by law and readily demanded. Therefore, there was no obligation obligation on the part of the in-laws but rather on the part of the husband who is not a party. Thus, decision affirmed.
It is however, unnecessar unnecessary y to place the decision decision on this ground. In the opinion of the Court, the cause of action stated in the complaint in the court below is based on a contract, express or implied, and is therefore of such nature that the court had authority to issue issue the writ of attachment. The application for the writ of certiorari must therefore be denied and the proceedings dismissed. LAW AS A SOURCE OF OBLIGATION
ARTURO PELAYO, plaintiff-appellant VS. MARCELO LAURON, defendant-appellee 12 Phil 453 January 12, 1909
LAW AS A SOURCE OF OBLIGATION
FACTS: On November 23, 1906, Arturo Pelayo, a physician, filed a complaint against Marcelo and Juana Abella. He alleged that on October 13, 1906 1906 at night, Pelayo was called to the house of the defendants to assist their daughter-in-law who was about to give birth to a child. Unfortunately, the daughter-in-law died as a consequence consequence of said childbirth. childbirth. Thus, the defendant defendant refuses to pay. The defen defendan dants ts argue argue that that their their daugh daughter ter-i -in-l n-law aw live lived d with with her husb husban and d independently and in a separate house without any relation, that her stay there was accidental and due to fortuitous event.
ISSUE: Whet Whether her or not not the the defe defenda ndants nts should should be held held liabl liable e for the the fees fees demanded by the plaintiff upon rendering medical assistance to the defendants’ daughter-in-law.
ASI CORPORATION, plaintiff-appellant VS. EVANGELISTA, defendant-appellee February 14, 2008 FACTS: Priv Privat ate e resp respon onde dent nt Evan Evange geli list sta a cont contrac racte ted d Peti Petiti tion oner er ASJ ASJ Corporation for the incubation and hatching of eggs and by products owned by Evangelista Evangelista Spouses. The contract contract includes the scheduled scheduled payments of the service of ASJ Corporation that the amount of installment shal shalll be paid paid afte afterr the the deli delive very ry of the the chic chicks ks.. Howe Howeve ver, r, the the ASJ ASJ Corporation detained the chicks because Evangelista Spouses failed to pay the installment on time.
ISSUE:
Whether Whether or not the detent detention ion of the alleged alleged chicks chicks valid and recognized under the law?
RULING : No, becaus because e ASJ Corporat Corporation ion must must give give due to the Evange Evangelis lista ta Spouses in paying the installment, thus, it must not delay the delivery of the chicks. Thus, under the law, they are obliged to pay damages with each other for the breach of the obligation. Therefore, in a contract of service, each party must be in good faith in the perfor performan mance ce of their their obliga obligatio tion, n, thus thus when when the petiti petitione onerr had detained the hatched eggs of the respondents spouses, it is an implication of putting prejudice to the business of the spouses due to the delay of paying installment to the petitioner.
latter did not able to pay the installment, Davalon continued the payment but when he became insolvent, he said that the motorcycle was taken by Quiamc Quiamco’s o’s men. men. Howeve However, r, after after severa severall years, years, the petiti petitione onerr Ramas Ramas together with policemen took the motorcycle without the respondent’s permit and shouted that the respondent Quiamco is a thief of motorcycle. Respondent Respondent then filed an action action for damages against petitioner petitioner alleging alleging that that petitio petitioner ner is liable liable for unlawf unlawful ul taking taking of the motorcyc motorcycle le and utterance utterance of a defamatory defamatory remark and filing a baseless baseless complaint. complaint. Also, petiti petitione oners rs claim claim that that they should should not be held held liable liable for petiti petitione oner’s r’s exerci exercise se of its right right as seller seller-mo -mortg rtgage agee e to recove recoverr the mortga mortgaged ged motorcycle preliminary to the enforcement of its right to foreclose on the mortgage in case of default.
ISSUE: Whether or not the act of the petitioner is correct.
RULING :
LAW AS A SOURCE OF OBLIGATION
RAMAS, plaintiff-appellant VS. QUIAMCO, defendant-appellee December 6, 2006 FACTS: Quia Quiamc mco o has has amic amicab ably ly settl settled ed with with Dava Davala lan, n, Gabu Gabuter tero o and and Generoso for the crime of robbery and that in return, the three had surrendered to Quiamco a motorcycle with its registration. However, Atty. Ramas Ramas has sold to Gabutero the motorcycle motorcycle in installment installment but when the
No. The petitioner petitioner being a lawyer must must know the legal procedure procedure for the recovery of possession of the alleged mortgaged property in which said procedure must be conducted through judicial action. Furthermore, the petition petitioner er acted acted in malice malice and intent intent to cause cause damage damage to the respondent respondent when even without probable cause, he still instituted instituted an act against the law on mortgage.
LAW AS A SOURCE OF OBLIGATION
NIKKO HOTEL MANILA GARDEN AND RUBY LIM VS. ROBERTO REYES a.k.a. “AMAY BISAYA” 2005 Feb 28 G.R. No. 154259
FACTS: In the evening of October 13, 1994, 1994, while drinking drinking coffee at the lobby of Hotel Nikko, respondent was invited by a friend, Dr. Filart to join her in a party in celebration celebration of the birthday of the hotel’s manager. manager. During the party and when respondent was lined-up at the buffet table, he was stopped by Ruby Lim, the Executive Executive Secretary of the hotel, and asked asked to leave the party. Shocked and embarrassed, he tried to explain that he was invited by Dr. Filart, who was herself herself a guest. guest. Not long after, after, a Makati Makati policem policeman an approache approached d him and escorted him out of her party. Ms. Lim admitted having asked respondent to leave the party but not under the ignominious circumstances painted by Mr. Reyes, that she did the act politely politely and discreetly. discreetly. Mindful Mindful of the wish of the celebrant to keep the party intimate intimate and exclusive, exclusive, she spoke to the respondent herself when she saw him by the buffet table with no other guests guests in the immediate vicinity. vicinity. She asked him to leave the party after he finished eating. eating. After she had turned to leave, the latter screamed and made a big scene. Dr. Filart testified that she did not want the celebrant to think that she invited Mr. Reyes to the party. Respondent filed an action for actual, moral and/or exemplary damages and attorney’s attorney’s fees. The lower court court dismissed dismissed the complaint. complaint. On appeal, the the Court of Appeals reversed the ruling of the trial court, consequently imposing upon Hotel Nikko moral and exemplary damages and attorney’s fees. On motion for reconsideration, the Court of Appeals Appeals affirmed its decision. Thus, this instant petition for review.
ISSUES: Whether or not Ms. Ruby Lim is liable under Articles 19 and 21 of the Civil Code in asking Mr. Reyes to leave the party as he was not invited by the celebrant thereof and whether or not Hotel Nikko, as the employer of Ms. Lim, be solidarily liable with her. RULING: The Court found more credible credible the lower court’s court’s findings of facts. There was no proof of motive on the part of Ms. Lim to humiliate Mr. Reyes and to expose expose him to ridicu ridicule le and shame. Mr. Reyes’ Reyes’ version version of the story story was unsupported, unsupported, failing failing to present any witness to back his story. Ms. Lim, not having abused her right to ask Mr. Reyes to leave the party to which he was not invited, cannot be made liable for damages under Articles 19 and 21 of the Civil
Code. Necessarily, Necessarily, neither neither can her employer, employer, Hotel Nikko, be held liable as its liability springs from that of its employees. When a right is exercised in a manner which does not conform with the norms enshrined in Article 19 and results in damage to another, a legal wrong is thereby committed committed for which the wrongdoer wrongdoer must be responsible. responsible. Article Article 21 states that any person who willfully causes loss or injury to another in a manner that is contrary contrary to morals, morals, good customs customs or public policy shall compensate compensate the latter for the damage. Without proof of any ill-motive on her part, Ms. Lim’s act cannot amount to abusive conduct. The maxim “Volenti Non Fit Injuria” (self-inflicted injury) was upheld by the Court, that is, to which a person assents is not esteemed in law as injury, that consent to injury precludes the recovery of damages by one who has knowingly and voluntarily exposed himself to danger.
LAW AS A SOURCE OF OBLIGATION
ST. MARY’S ACADEMY, petitioner, VS. WILLIAM CARPITANOS and LUCIA S. CARPITANOS, GUADA DANIEL, JAMES DANIEL II, JAMES DANIEL, SR., and VIVENCIO VILLANUEVA, respondents February 6, 2002 FACTS: From February 13 to 20, 1995, defendant-appellant St. Mary’s Academy of Dipolog City conducted an enrollment drive for the school year 1995-1996. 1995-1996. As a student of St. Mary’s Academy, Sherwin Carpitanos was part of the campaigning group. Accordingly, Sherwin, along with other high school students were riding in a Mitsubishi jeep owned by defendant Vivencio Villanueva on their way to Larayan Larayan Elementary Elementary School, Larayan, Larayan, Dapitan City. City. The jeep was driven by James Daniel Daniel II then 15 years old and a student of the same school. school. Allegedly, Allegedly, the latter drove the jeep in a reckless manner and as a result the jeep turned turtle. Sherwin Carpitanos died as a result of the injuries he sustained from the accident. The trial court ordered the defendants, St. Mary’s Academy principally liable and the parents of James Daniel as subsidiarily liable for damages.
The Court of Appeals affirmed the decision of the trial court. The Court of Appeals held petitioner St. Mary’s Academy liable for the death of Sherwin Carpitanos under Articles 218 and 219 of the Family Code, pointing out that petitioner was negligent in allowing a minor to drive and in not having a teacher accompany the minor students in the jeep.
ISSUE: Whether or not the appellant St. Mary’s Academy is principally principally liable for damages for the death of Sherwin.
A.
CONTRACTS
1. 2. 3. 4. 5. 6.
TSPI, TSPI, INC INC., ., VS. TSPOC TSPOC EMPLO EMPLOYEE YEES S UNIO UNION N 545 545 S 215 215 REGI REGINO NO VS. VS. CA, CA, NOVE NOVEMB MBER ER 18, 18, 1992 1992 PSBA VS. CA, CA, FEB FEB.. 4, 4, 19 1992 COSMO COSMO ENTE ENTERTA RTAINM INMENT ENT VS. VS. LA VILLE, VILLE, 20 AUGUST AUGUST 2004 2004 AYALA AYALA CORP. CORP. VS. VS. ROSA ROSA DIANA DIANA REALTY REALTY,, 346 346 SCRA SCRA 663 663 BRIC BRICKT KTOW OWN N DEVE DEVELO LOPM PMEN ENT T VS. VS. AMOR AMOR TIE TIERR RRA A DEVELOPMENT, 239 SCRA 126 PILI PILIPI PINA NAS S HIN HINO O VS. VS. CA, CA, 338 338 SCRA SCRA 355 355
7.
RULING: No. Under Article 219 of the Family Code, if the person under custody is a minor, those exercising special parental authority are principally principally and solidarily solidarily liable for damages caused by the acts or omissions of the unemancipated minor while under their supervision, instruction, or custody. However, for petitioner to be liable, there must be a finding that the act or omission considered as negligent was the proximate cause of the injury caused because the negligence must have a causal connection to the accident. Respondents Daniel spouses and Villanueva admitted that the immediate cause of the accident was not the negligence of petitioner or the reckless driving of James Daniel II, but the detachment of the steering wheel guide of the jeep. Hence, liability for the accident, whether caused by the negligence of the minor driver or mechanical detachment of the steering wheel guide of the jeep, must be pinned on the minor’s parents primarily. primarily. The negligence negligence of petitioner St. Mary’s Mary’s Academy was only a remote remote cause of the accident. Between Between the remote cause and the injury, there intervened the negligence of the minor’s parents or the detachment of the steering wheel wheel guide of the jeep. Considering that the negligence of the minor driver or the detachment of the steering wheel guide of the jeep owned by respondent Villanueva was an event over which petitioner St. Mary’s Academy had no control, and which was the proximate cause of the accident, petitioner may not be held liable for the death resulting from such accident.
SOURCES OF OBLIGATIONS
TSPI, INCORPORATION VS. TSPIC EMPLOYEES UNION G.R No. 163419. February 13, 2008
FACTS: TSPI Corporation entered into a Collective Bargaining Agreement with with the corpor corporati ation on Union Union for the increa increase se of salary salary for the latter’s latter’s members for the year 2000 to 2002 starting from January 2000. thus, the increased in salary was materialized on January 1, 2000. However, on October October 6, 2000, the Regional Tripartite Tripartite Wage and production production Board raised daily minimum wage from P 223.50 to P 250.00 starting November 1, 2000. Conformably, the wages of the 17 probationary employees were increased to P250.00 and became regular employees therefore receiving another 10% increase in salary. In January 2001, TSPIC implemented the new wage rates as mandated by the CBA. As a result, the nine employees who were senior to the 17 recently regularized employees, received less wages. On January 19, 2001, TSPIC’s HRD notified the 24 employees who are private respondents, that due to an error in the automated payroll system, they were overpaid and the overpayment would be deducted from their salaries salaries starting February 2001. The Union on the other hand,
assert asserted ed that that there there was no error error and the deduct deduction ion of the alleged alleged overpayment constituted diminution of pay.
ISSUE: Whether the alleged overpayment constitutes diminution of pay as alleged by the Union.
Regino, Regino, an underprivil underprivileged, eged, failed to purchase the tickets tickets because because of her status as well as that project was against her religious belief, thus, she was not allowed to take the final examination by her two professors.
ISSUE: Was the refusal of the university to allow Regino to take the final examination valid?
RULING : Yes, because it is considered that Collective Bargaining Agreement entered into by unions and their employers are binding upon the parties and be acted in strict compliance therewith. Thus, the CBA in this case is the law between the employers and their employees. Therefore, there was no overpayment when there was an increase of salary for the members of the union simultaneous with the increasing of minimum wage for workers in the National Capital Region. The CBA should be followed thus, the senior employees who were first promoted as regular regular employees employees shall be entitled entitled for the increase in their salaries salaries and the same with lower rank workers.
RULING : No, the Supreme Court declared that the act of PCST was not valid, though, it can impose its administrative policies, necessarily, the amount of ticket ticketss or paymen paymentt shall shall be includ included ed or expres expressed sed in the student student handbooks given to every student before the start of the regular classes of the semester. In this case, the fund raising project was not included in the activities to be undertaken by the university during the semester. The petitioner is entitled for damages due to her traumatic experience on the acts of the university university causing causing her to stop studying sand later transfer to another school.
REGINO VS. PCST G.R No. 156109. November 18, 2004
FACTS: Petiti Petitione onerr Kristi Kristine ne Regino Regino was a poor poor studen studentt enroll enrolled ed at the Pangas Pangasina inan n Colleg College e of Scienc Science e and Techno Technolog logy. y. Thus, Thus, a fund fund raisin raising g project pertaining to a dance party was organized by PCST, requiring all its students to purchase two tickets in consideration as a prerequisite for the final exam.
CONTRACT AS A SOURCE OF OBLIGATION
PHILIPPINE SCHOOL OF BUSINESS ADMINISTRATION, ET AL. petitioners, VS. COURT OF APPEALS, HON. REGINA ORDOÑEZ-BENITEZ, SEGUNDA R. BAUTISTA, and ARSENIA D. BAUTISTA, respondents
February 4, 1992 FACTS: Carlitos Bautista was a third year student at the Philippine School of Business Business Administrati Administration. on. Assailants Assailants,, who were not members of the schools academic community, while in the premises of PSBA, stabbed Bautista to death. This incident incident prompted his parents to file a suit against against PSBA and its corporate corporate officers for damages due to their alleged negligence, recklessness and lack of security precautions, means and methods before, during and after the attack on the victim. The defendants filed a motion to dismiss, claiming that the compliant states no cause of action against them based on quasi-delict quasi-delicts, s, as the said rule does not cover cover academi academicc institu institutio tions. ns. The trial trial court court denied denied the motion motion to dismiss. dismiss. Their motion motion for reconsiderati reconsideration on was likewise likewise dismissed, dismissed, and was affirmed by the appellate court. Hence, the case was forwarded to the Supreme Court.
ISSUE: Whether or not PSBA is liable for the death of the student. RULING: Becaus Because e the circum circumsta stances nces of the present present case case evince evince a contrac contractua tuall relation between the PSBA and Carlitos Bautista, the rules on quasi-delict do not really govern. govern. A perusal of Article 2176 2176 shows that obligations obligations arising arising from quasi-delict quasi-delictss or tort, also known as extra-contract extra-contractual ual obligations, obligations, arise only between parties not otherwise otherwise bound by contract, contract, whether express or implied. implied. However, this impression has not prevented this Court from determining the existence of a tort even when there obtains a contract. Article 2180, in conjunction with Article 2176 of the Civil Code, establishes the rule in in loco parentis. Article 2180 provides that the damage should have been caused or inflicted by pupils or students of the educational institution sought to be held liable for the acts of its pupils or students while in its custody. However, this material situation does not exist in the present case for, as earlier indicated, the assailants of Carlitos were not students of the PSBA, for whose acts the school could could be made liable. But it does not necessarily necessarily follow follow that PSBA is absolved form liability. When an academic institution accepts students for enrollment, there is established a contract between them, resulting in bilateral obligations which
both parties is bound bound to comply with. For its part, the school school undertakes to provide the student with an education that would presumably suffice to equip him with the necessa necessary ry tools tools and skills skills to pursue pursue higher educatio education n or a profession. This includes ensuring the safety of the students while in the school premises. premises. On the other hand, the student covenants covenants to abide by the school's academic requirements and observe its rules and regulations. Failing on its contractual and implied duty to ensure the safety of their student, PSBA is therefore held liable for his death. Petition denied.
CONTRACT AS A SOURCE OF OBLIGATION
COSMO ENTERTAINMENT MANAGEMENT, INC., Petitioner, VS. LA VILLE COMMERCIAL CORPORATION, Respondent G.R. No. 152801 20 August 2004 FACTS: The respondent, La Ville Commercial Corporation, is the registered owner of a parcel of land covered by Transfer Certificate of Title (TCT) No. 174250 of the Registry of Deeds of Makati City together with the commercial building thereon situated situated at the corner of Kalayaan Kalayaan and Neptune Streets in Makati City. On March 17, 1993, it entered into a Contract of Lease with petitioner Cosmo Entertainment Management, Inc. over the subject property for a period of seven years with a monthly rental of P250 per square meter of the floor area of the buildi building ng and a securit security y deposit deposit equivalen equivalentt to three three monthl monthly y rentals rentals in the amount of P447,000 to guarantee the faithful compliance of the terms and condit conditions ions of the lease lease agreement. agreement. Upon Upon executi execution on of the contract contract,, the petitioner took possession of the subject property. The petitioner, however, suffered business reverses and was constrained to stop operations in September 1996. Thereafter, the petitioner defaulted in its rental payments. payments. Consequently Consequently,, on February 1, 1997, the respondent respondent made a demand on the petitioner to vacate the premises premises as well as to pay the accrued rentals plus interests which, as of January 31, 1997, amounted to P740,478.91. In reply to the demand, the petitioner averred that its unpaid rentals amounted to P698,500 only and since it made a security deposit of P419,100 with the respondent, the said amount should be applied to the unpaid rentals; hence, the outstanding outstanding account accountss payable payable would would only be P279,4 P279,400. 00. The respondent respondent
requested that the interest charges be waived and it be given time to find a solution to its financial problems. After negotiations between the parties failed, the respondent, on May 27, 1997, reiterated its demand on the petitioner to pay the unpaid rentals as well as to vacate and surrender the premises to the respondent. When the petitioner refused to comply with its demand, the respondent filed with the Metropolitan Trial Court (MeTC) of Makati City. The petitioner, in its answer to the complaint, raised the defense that, under the contract, it had the right to sublease the premises upon prior written consent by the respondent and payment of transfer fees. However, the respondent, without any justifiable reason, refused to allow the petitioner to sublease the premises. After due proceedings, the MeTC rendered judgment in favor of the respondent.
ISSUE: Whether or not the contention of the petitioner is tenable. RULING: While petitioner pleads that a liberal, not literal, interpretation of the rules should be our policy guidance, nevertheless procedural rules are not to be disdained as mere technicalities. They may not be ignored to suit the convenience of a party. Adjective law ensures the effective enforcement of substantive rights through the orderly and speedy administration of justice. Rules are not intended to hamper litigants or complicate litigation. But they help provide for a vital system of justice where suitors may be heard in the correct form and manner, at the prescribed time in a peaceful though adversarial confrontation before a judge whose authority litigants acknowledge. Public order and our system of justice are well served by a conscientious observance of the rules of procedure. In any case, the Court is convinced that the findings and conclusions of the court a quo and the RTC are in order. These courts uniformly found that, under the terms of the contract of lease, the respondent, as the owner-lessor of the premises, had reserved its right to approve the sublease of the same. The petitioner, having voluntarily given its consent thereto, was bound by this stipulation. And, having failed to pay the monthly rentals, the petitioner is deemed to have violated the terms of the contract, warranting its ejectment from the leased premises. The Court finds no cogent reason to depart from this
factual disquisition of the courts below in view of the rule that findings of facts of the trial courts are, as a general rule, binding on this Court. The petition is DENIED. CONTRACT AS A SOURCE OF OBLIGATION
AYALA CORPORATION VS. ROSA DIANA REALTY 346 SCRA 633 FACTS: In April 1976, appellant-petitioner entered into a transaction with Manuel Sy and Sy Ka Kieng where former sold a lot in Salcedo Village in Makati. The deed of sale had some encumbrances contained in the Special Conditions of Sale (SCS) and Deed of Restrictions (DR), which should be followed by the vendees. The stipulations in the SCS are: a building proposal must be submitted to Ayala which must be in accordance with the DR, the construction of the building must be completed on or before 1979, and that there will be no resale of the lot. The DR specified the limits in height and floor area of the building to be constructed. However, Sy and Kieng, failed to build a building but nonetheless with the permission of Ayala, the vendees sold the said lot to the respondent, Rosa Diana Realty. Respondent Company agreed to abode by the SCS and the DR stipulations. Prior to the construction, Rosa Diana submitted a building plan to Ayala complying with the DR but it also passed a different building plan to the building administrator of Makati, which did not comply with the stipulations in the DR. While the building, “The Peak,” was being constructed, Ayala filed a case praying that: 1) Rosa Diana, be compelled to comply with the DR and build the building in accordance with the building plan submitted to Ayala; or 2) on the alternative, the rescission of the deed of sale. The trial court ruled in favor of the respondent and thus, Rosa Diana was able to complete the construction of “The Peak.” Undeterred, Ayala filed before the Register of Deeds (RD) of Makati a cause of annotation lis pendens. RD refused to grant Ayala such registration for in the lower court; the case is of personal action for a specific performance and/or rescission. However, the Land Registration Authority (LRA) reversed RD’s ruling. The appellate court upheld the RD’s ruling stating that the case before the trial court is a personal action for
the cause of action arises from the alleged violation of the DR. The trial court sustained the respondent’s point saying that Ayala was guilty of abandonment and/or estoppels due to its failure to enforce the terms of the DR and SCS against Sy and Kieng. Ayala discriminately chose which obligor would be made to follow certain conditions, which is not fair and legal. On appeal, the CA affirmed the lower court’s ruling. Hence, this petition.
ISSUE: Whether or not Rosa Diana committed a breach of contract. RULING: Yes, the Supreme Court ruled that Rosa Diana committed a breach of contract by submitting a building plan to Ayala complying with the DR and submitting a different building plan to the building administrator of Makati, which did not comply with the stipulations in the DR. Contractual Obligations between parties have the force of law between them and absent any allegation that the same are contrary to law, morals, good customs, public order or public policy, they must complied with in good faith. Thus, the assailed decision of the Court of Appeals is reversed and set aside.
CONTRACT AS A SOURCE OF OBLIGATION
BRICKTOWN DEVELOPMENT CORP. and MARIANO Z. VERALDE VS. AMOR TIERRA DEVELOPMENT CORPORATION and the HON. COURT OF APPEALS G.R. No. 112182 December 12, 1994 239 SCRA 127 FACTS: Bricktown Development Corporation, represented by its President and copetitioner Mariano Z. Velarde, executed two Contracts to Sell in favor of Amor
Tierra Development Corporation, represented in these acts by its Vice-President, Moises G. Petilla, covering a total of 96 residential lots at the Multinational Village Subdivision, La Huerta, Parañaque, Metro Manila. The total price of P21,639,875.00 was stipulated to be paid by private respondent in such amounts and maturity dates, as follows: P2,200,000.00 on 31 March 1981; P3,209,968.75 on 30 June 1981; P4,729,906.25 on 31 December 1981; and the balance of P11,500,000.00 to be paid by means of an assumption by private respondent of petitioner corporation's mortgage liability to the Philippine Savings Bank or, alternately, to be made payable in cash. On date, March 31, 1981, the parties executed a Supplemental Agreement, providing that private respondent would additionally pay to petitioner corporation the amounts of P55,364.68, or 21% interest on the balance of down payment for the period from 31 March to 30 June 1981, and of P390,369.37 representing interest paid by petitioner corporation to the Philippine Savings Bank in updating the bank loan for the period from 01 February to 31 March 1981. Private respondent was only able to pay petitioner corporation the sum of P1,334,443.21. However, the parties continued to negotiate for a possible modification of their agreement, but nothing conclusive happened. And on October 12, 1981, petitioner’s counsel sent private respondent a “Notice of Cancellation of Contract” because of the latter’s failure to pay the agreed amount. Several months later, private respondent’s counsel, demanded the refund of private respondent's various payments to petitioner corporation, allegedly "amounting to P2,455,497.71," with interest within fifteen days from receipt of said letter, or, in lieu of a cash payment, to assign to private respondent an equivalent number of unencumbered lots at the same price fixed in the contracts. When the demand was not heeded, Amor Tierra filed an action with the court a quo which rendered a decion in its favor. The decision of the lower court was affirmed in toto by the Court of Appeals. Hence, this petition.
ISSUE: Whether or not the contract was properly rescinded. Whether or not Bricktown properly forfeited the payments of Amor Tierra. RULING: The contract between Bricktown and Amor Tierra was validly rescinded because of the failure of the latter to pay the agreed amounts stipulated in the contract on the proper date even after the sixty-days grace period. Furthermore, the records showed that private respondent corporation paid less
than the amount agreed upon. The Supreme Court also added that such cancellation must be respected. It may also be noteworthy to add that in a contract to sell, the non-payment of the purchase price can prevent the obligation to convey title from acquiring any obligatory force. On the second issue, the Supreme Court ruled that since the private respondent did not actually possessed the property under the contract, the petitioner is then ordered to return to private respondent the amount remitted. However, to adjudge any interest payment by petitioners on the amount to be thus refunded, private respondent should not be allowed to totally free itself from its own breach.
CONTRACT AS A SOURCE OF OBLIGATION
PILIPINAS HINO, INC. VS. COURT of APPEALS G. R. No. 126570 August 18, 2000 338 SCRA 355 FACTS: On or about August 14, 1989, a contract of lease was entered into between Pilipinas Hino, Inc. and herein respondents, under which the respondents, as lessors, leased real property located at Bulacan to Pilipinas Hino, Inc. for a term of two years from August 16, 1989 to August 15, 1991. Pursuant to the contract of lease, petitioner deposited with the respondents the amount of P400,000.00 to answer repairs and damages that may be caused by the lessee on the leased premises during the period of lease.
(respondents) the option to rescind the same upon failure of the buyer to pay any of the first six installments with the corresponding obligation to return to the buyer the amount paid by the buyer in excess of the down payment as stated in paragraphs 7 and 9 of the Memorandum of Agreement. Pilipinas Hino, Inc. remitted on August 10, 1990 to the respondents the amount of P1,811,000.00 as down payment. Subsequently, petitioner paid the first and second installments in the amount of P1,800,000.00 and P5,250,000.00, respectively, totaling the down payment of P7,050,000.00. Unfortunately, petitioner failed to pay the third installment and subsequent installments. Respondents decided to rescind and terminate the contract and promised to return to petitioner all the amounts paid in excess of the down payment after deducing the interest due from third to sixth installments, inclusive. From the amount of P7,050,000.00 due to be returned to the petitioner, respondents deducted P924,000.00 as interest and P220,000.00 as rent for the period from February 15 to March 15, 1991, returning to the petitioner the amoun t of P5,906,000.00 only. After trial, the lower court rendered judgment stating that the petitioner has no cause of action to demand the return of the balance of the deposits in the amount P140,000.00 and the respondents have the legal right to demand accrued interest on the unpaid installments in the amount of P924,00.00. The Court of Appeals affirmed the decision of the trial court. Hence, this petition.
ISSUE: Whether or not the petitioner is entitled to demand the balance of the deposits in the amount of P140,000.00 and to the return of the amount of P924,000.00.
After the expiration of the contract, the petitioner and respondents made a joint inspection of the premises to determine the extent of damages thereon. Both agreed that the cost or repairs would amount to P60,000.00 and that the amount of P340,000.00 shall be returned to petitioner. However, respondents returned only the amount of P200,000.00 leaving a balance of P140,000.00. Notwithstanding repeated demands, respondents averred that the true and actual damage amounte d to P298,738.90.
RULING: The Supreme Court held that the petitioner failed to prove his first cause of action that the damages to the leased property amounted to more than P60,000.00. In contrast, respondents were able to prove their counterclaim that the damage to the leased property amounted to P338,732.50, as testified by their witness who is an experienced contractor. The trial court did not hold petitioner liable for the whole amount of P384,732.50, but only for the amount of P200,000.00.
On August 10, 1990, petitioner and respondents entered into a contract to sell denominated as Memorandum of Agreement to sell whereby the latter agreed to sell to the former the leased property in the amount of P45,611,000.00. The said Memorandum of Agreement to sell granted the owner
On the other hand, the Supreme Court held that both lower and appellate court failed to consider paragraph 9 contained in the same memorandum of agreement entered into by the parties. Said paragraphs provides in very clear terms that “when the owner exercise their option to forfeit the down payment,
they shall return to the buyer any amount paid by the buyer in excess of the down payment with no obligation to pay interest thereon.” The private respondents’ withholding of the amount corresponding to the interest violated the specific and clear stipulation in paragraph 9 of the said memorandum. The parties are bound by their agreement.
respondent had allegedly constructed almost one third of the project as weel as selling some units to third persons unknown to the petitioner. Integrated Inc. took over the project, thus the petitioner is demanding for the return of its advanced payment in the amount of P2, 000,000.00 as weel as the keys of the unit.
Hence, the decision of the Court of Appeals is modified in that private respondent is ordered to return to the petitioner the amount of P924,000.00 representing the accrued interest for the unpaid installments and the decision appealed is affirmed in all other respects.
ISSUE: Whether or not the petitioner is entitled to damages.
B.
QUASI – CONTRACTS
1.
TITAN-IKEDA CONNSTRUUCTION VS. PRIMETOWN PROPERTY, 544 S 466 PADCOM CONDOMINIUM VS. ORTIGAS, MAY 9, 2002 MC ENGINEERING VS. CA, 380 SCRA 116 BPI VS. PIÑEDA, 156 SCRA 404 STATE INVESTMENT VS. CA, 198 SCRA 392
2. 3. 4. 5.
RULING : No, because in a contract necessarily that there is a meeting of the minds of the parties in which this will be the binding law upon them. Thus, in a reciprocal obligation. Both parties are obliged to perform their obligation simultaneously and in good faith. In this case, petitioner, TitanIkeda can not recover damages because it was found out there was no solutio indebiti or mistake in payment in this case since the latter is just entitled to the actual services it rendered to the respondent and thus it is ordered to return the condominium units to the respondent. QUASI-CONTRACT AS A SOURCE OF OBLIGATION
PADCOM CONDOMINIUM CORPORATION, petitioner, VS. ORTIGAS CENTER ASSOCIATION, INC., respondent G.R. No. 146807 May 9, 2002 382 SCRA 222
TITAN-IKEDA VS. PRIMETOWN G.R No. 158768. February 12, 2008
FACTS: The respondent Primetown Property Corporation entered into contract weith the petitioner Titan-Ikeda Construction Corporation for the structural works of a 32-storey prime tower. After the construction of the tower, respondent again awarded to the petitioner the amount of P 130,000,000.00 for the tower’s architectural design and structure. Howevere, in 1994, the respondent entered inot a contract of sale of the tower in favor of the petitioner in a manner called full-swapping. Since the
FACTS: Petitioner PADCOM CONDOMINIUM CORPORATION (PADCOM) bought a land from Tierra Development Corporation with terms and conditions among which is that the transferee and its successor-in-interest must become members of an Association for realty owners and long-term lessees at Ortigas Center. The Ortigas Center Association (OCA) which was subsequently formed levies membership dues of P2,700.00 per month to all members. Petitioner refused to pay the membership dues on the ground that it did not become automatic
member of the Association when it bought the land. Herein respondent OCA filed a civil case for recovery of the amounts due, which was dismissed by the Regional Trial Court and reversed on appeal. Petitioner PADCOM appealed for review on certiorari at the Supreme Court.
ISSUE: Whether or not petitioner PADCOM can be compelled to become a member of the OCA and thus pay the membership dues based on the condition of the Deed of Sale.
RULING: PADCOM became automatically a member of the OCA by virtue of the conditions of the Deed of Sale attached to its Title of the property. By voluntarily buying the land with the conditions, it subscribed to such conditions which gave rise to a quasi-contract between it and the OCA. Therefore, it could not avoid payment of the membership dues without violating the underlying principles of quasi-contract – which provides that certain lawful, unilateral, and voluntary act gives rise to a juridical relation between the parties to the end that no one shall be unjustly enriched of benefited at the expense of others. Petition denied for lack of merit.
QUASI-CONTRACT AS A SOURCE OF OBLIGATION
MC ENGINEERING, INC. VS. THE COURT OF APPEALS, GERENT BUILDERS, INC. and STRONGHOLD INSURANCE CO., INC., G.R. No. 104047 April 3, 2002 380 SCRA 116 FACTS: On October 29, 1984, Mc Engineering, Inc. and Surigao Coconut Development Corporation signed a contract for the restoration of the latter’s building, land improvement, electrical, and mechanical equipment located at Lipata Surigao City which was damaged by typhoon Nitang. The agreed
consideration was P5,150,000.00 of which P2,500,000.00 was for the restoration of the damaged buildings and land improvement, while the P3,000,000.00 was for the restoration of the electrical and mechanical works. The next day, on October 30, 1984 defendant Mc Engineering and plaintiff Gerent Builders, Inc. entered into an agreement wherein defendant subcontracted to plaintiff the restoration of the buildings and land improvement phase of its contract with Sucodeco but defendant retained for itself the restoration of the electrical and mechanical works. The subcontracted work covered the restoration of the buildings and improvement for P1,665,000.00. Two (2) months later, on December 3, 1984, Sucodeco and defendant Mc Engineering entered into an agreement amending provision No. VII, par 1 of their contract dated October 29, 1984, by increasing the price of the civil works from P2,250,000.00 to P3,104,851.51, or an increase of P854,851.51, with the express proviso that ‘except for the amendment above specified, all the other provisions of the original contract shall remain the same’. The civil work aspect consisting of the building restoration and land improvement from which plaintiff would get P1,665,000.00 was completed and the corresponding certificate of acceptance was executed, but the electrical works were cancelled. On January 2, 1985, plaintiff received from defendant the amount of P1,339,720.00 as full payment of the sub-contract price, after deducting earlier payments made by defendant to plaintiff, as evidenced by the affidavit executed by plaintiff’s president, Mr. Narciso C. Roque wherein the latter acknowledged complete satisfaction for such payment on the basis of the Statement of Account which plaintiff had earlier forwarded to defendant. Nevertheless, plaintiff is still claiming from defendant the sum of P632,590.13 as its share in the adjusted contract cost in the amount of P854,851.51, alleging that the sub-contract is subject to the readjustment provided for in Section VII of the agreement, and also the sum of P166,252.00 in payment for additional electrical and civil works outside the scope of the subcontract. Petitioner refused to pay respondent Gerent.
ISSUE: Whether or not respondent Gerent Builders, Inc. can claim a share in the adjusted contract cost between petitioner and Surigao Coconut Development Corporation basing its claim from its assertion that the quitclaim executed by plaintiff-appellant is vitiated with fraud. RULING:
Gerent Builders, Inc. cannot claim for a share in the adjusted contract cost between petitioner and Sucodeco because petitioner was under no obligation to disclose to respondent Gerent, a subcontractor, any price increase in petitioner’s main contract with Sucodeco. Respondent Gerent is not a party to the main contract. The subcontract between petitioner and respondent Gerent does not require petitioner to disclose to Gerent any price increase in the main contract. The non-disclosure by petitioner of the price increase cannot constitute fraud or breach of any obligation on the part of petitioner.
Inc., placing the supervision and management of the aforementioned vessels in the hands of GACET, Inc., which was to run for a period of six (6) months, renewable at the will of the parties, without however, terminating the booking agency of Interocean Shipping Corporation. Likewise, under the terms of said Management Contract, the Peoples Bank and Trust Company was designated as depository of all revenues coming from the operation of the subject vessels thereby enabling it to control all expenses of GACET, Inc., since they win all be drawn against said deposit.
Moreover, the record shows that the P139,720.30 representing final and full payment of the subcontract price was paid by petitioner to respondent Gerent based on the statement of account Gerent itself prepared and submitted to petitioner.
During the period comprising March 16, 1967 and August 25, 1967, GACET and Interocean in performing their obligations under said Management Contract, contracted the services of herein plaintiff-appellee, Benjamin Pineda doing business under the name and style "Pioneer Iron Works," to carry out repairs, fabrication and installation of necessary parts in said vessels in order to make them seaworthy and in good working operation. Accordingly, repairs on the vessels were made. Labor and materials supplied in connection therewith, amounted to P84,522.70, P18,141.75 of which was advanced by Interocean, thereby leaving a balance of P62,095.95. For this balance, Interocean issued three checks and the third one for P 17,377.57. When these checks were however presented to the drawee, Peoples Bank and Trust Company, they were dishonored as defendant Interocean stopped payment thereon.
QUASI-CONTRACT AS A SOURCE OF OBLIGATION
BANK OF THE PHILIPPINE ISLANDS VS. BENJAMIN PINEDA G.R. No. L-62441 156 SCRA 404 FACTS: Southern Industrial Project (SIP) and/or Bacong purchased the vessels SS "Southern Comet," SS "Southern Express" and SS "Southern Hope," thru financing furnished by defendant Peoples Bank and Trust Company, now the Bank of the Philippine Islands. To secure the payment of whatever amounts maybe disbursed for the aforesaid purpose, the said vessels were mortgaged to Peoples Bank and Trust Company. For the operation of the said vessels, these were placed under the booking agency of defendant Interocean Shipping Corporation, with the undertaking that the freight revenues from their charter and operation shall be deposited with the Trust Department of Peoples Bank and Trust Company and that disbursements made there from shall be covered by vouchers bearing the approval of SIP. As Peoples Bank and Trust Company and SIP were not satisfied with the amount of revenues being deposited with the said Bank, it being suggested that diversions thereof were being made, Gregorio A. Concon of SIP and/or Bacong and Roman Azanza of Peoples Bank and Trust Company, organized S.A. Gacet, Inc. to manage and supervise the operation of the vessels with Ezekiel P. Toeg as the manager thereof. Accordingly, on August 15, 1966, a Management Contract was entered into between SIP and GACET,
Meanwhile and by reason of the inability of SIP and/or Bacong to pay their mortgage indebtedness which was past due since 1964, the mortgagee Peoples Bank and Trust Company threatened to foreclose the mortgage on said vessels. In order to avoid the inconvenience and expense of imminent foreclosure proceedings, SIP and/or Bacong sold said vessels to Peoples Bank by way of dacion en pago. On October 1, 1968, plaintiff instituted the present action (Civil Case No. 74379) before the Court of First Instance of Manila, seeking to recover from SIP, GACET, Interocean and the Peoples Bank and 'Trust Company the principal sum of P62,095.92 with interests thereon from the respective dates of each repair order until the same is fully paid, which amount was allegedly the total unpaid balance of the cost of repairs, fabrication and installation of necessary parts carried out by the said plaintiff on the a forenamed vessels. Answering the complaint, defendants Peoples Bank and Trust Co., now Bank of P.I. and Southern Industrial Projects, Inc. (SIP) alleged that the abovementioned claim is the personal responsibility of Interocean Shipping Corporation and/or Gacet, Inc. and deny liability thereof Defendant Bacong Shipping Company, S.A.
The trial court rendered a decision dismissing the compliant against defendants Interocean Shipping Corporation and Gacet, Inc. QUASI-CONTRACT AS A SOURCE OF OBLIGATION
Defendants Bank of P.I. and Southern Industrial Projects, Inc. appealed to the Court of Appeals but the latter, finding the aforequoted decision to be in accordance with law and the evidence, affirmed the same.
ISSUE: Whether or not People's Bank, now Bank of P.I. being the purchaser of said vessels, is jointly and severally liable for the outstanding balance of said repairs, admittedly a lien on the properties in question. RULING: There is no question that at the time subject obligation was incurred, defendant Southern industrial Projects, Inc. owned the vessels although mortgaged to People's Bank and Trust Company. Hence, the former as owner is liable for the costs of repairs made on the vessels. On the other hand, Interocean Shipping Corporation and S.A. Gacet undeniably mere agents of the owner, a disclosed principal, cannot be held liable for repairs made on the vessels to keep them in good running condition in order to earn revenue, there being no showing that said agents exceeded their authority. In view of the foregoing facts, it was aptly stated by the trial court and affirmed by the Court of Appeals that when the parties executed the deed of "Confirmation of Obligation" they really intended to confirm and acknowledge the existing obligations for the purpose of the buyer assuming liability therefore and charging them to the seller after proper accounting, verification and set offs have been made. Indeed, there is merit in the trial court's view that if there was no intention on the part of People's Bank (now Bank of P.I.) to assume responsibility y for these obligations at the time of the sale of the vessels, there is no sense in executing said Deed of Confirmation together with the deeds of sale and the stipulations there under would be pointless. Finally, it is indisputable that the repairs made on the vessels ultimately redounded to the benefit of the new owner for without said repairs, those vessels would not be seaworthy. Under Art. 2142 of the Civil Code, such acts "give rise to the juridical relation of quasi-contract to the end that no one shall be unjustly enriched or benefited at the expense of another."
STATE INVESTMENT VS. COURT OF APPEALS 198 SCRA 392 FACTS: On 5 April 1982, respondent spouses Rafael and Refugio Aquino pledged certain shares of stock to petitioner State Investment House Inc. (“State”) in order to secure a loan of P120,000.00. Prior to the execution of the pledge, respondent spouses Jose and Marcelina Aquino signed an agreement with petitioner State for the latter’s purchase of receivables amounting to P375,000.00. When the 1 st Account fell due, respondent spouses paid the same partly with their own funds and partly from the proceeds of another loan which they obtained also from petitioner State designated as the 2nd Account. This new loan was secured by the same pledge agreement executed in relation to the 1st Account. When the new loan matured, State demanded payment. Respondents expressed willingness to pay, requesting that upon payment, the shares of stock pledged be released. Petitioner State denied the request on the ground that the loan which it had extended to the spouses Jose and Marcelina Aquino has remained unpaid. On 29, June 1984, Atty. Rolando Salonga sent to respondent spouses a Notice of Notarial Sale stating that upon request of State and by virtue of the pledge agreement, he would sell at public auction the shares of stock pledged to State. This prompted respondents to file a case before the Regional Trial Court of Quezon City alleging that the intended foreclosure sale was illegal because from the time the obligation under the 2nd Account became due, they had been able and willing to pay the same, but petitioner had insisted that respondents pay even the loan account of Jose and Marcelino Aquino, which had not been secured by the pledge. It was further alleged that their failure to pay their loan was excused because the Petitioner State itself had prevented the satisfaction of the obligation. On January 29, 1985, the trial court rendered a decision in favor of the plaintiff ordering State to immediately release the pledge and to deliver to respondents the share of stock upon payment of the loan. The CA affirmed in toto the decision of the trial court.
ISSUES:
Whether or not the phrase “upon payment” in the trial court’s decision means upon payment of spouses’ loan in the principal amount of P110,000.00 alone without interest, penalties and other charges. Whether or not the conditions to be complied with by the debtor desirous of being released from his obligation in cases where the creditor unjustly refuses to accept payment have been met by the spouses Aquino.
RULING: Anent the 1st issue, NO. The phrase “upon payment” as held by the Supreme Court means upon payment of the amount of P110,000.000 plus seventeen percent (17%) per annum regular interest computed from the time of maturity of the plaintiffs’ loan and until full payment of such principal and interest to defendants. For respondent spouses to continue in possession of the principal of the loan amounting to P110,000.00 and to continue to use the same after maturity of the loan without payment of regular or monetary interest, would constitute unjust enrichment on the part of the respondent spouses at the expense of petitioner State even though the spouses had not been guilty of mora.
With respect to the 2nd issue, NO. The conditions had not been complied with. Article 1256 of the civil code states that: “ If the creditor to whom tender of payment has been made refuses without just cause to accept it, the debtor shall be released from responsibility by consignation of the thing or sum due.” Where
the creditor unjustly refuses to accept payment, the debtor desirous of being released from his obligation must comply with two (2) conditions, viz : (a) tender of payment; and (b) consignation of the sum due. Tender of payment must be accompanied or followed by consignation in order that the effects of payment may be produced. Thus, in Llamas v. Abaya, the Supreme Court stressed that a written tender of payment alone, without consignation in court of the sum due, does not suspend the accruing of regular or monetary interest. In the instant case, respondent spouses Aquino, while they are properly regarded as having made a written tender of payment to petitioner state, failed to consign in court the amount due at the time of the maturity of the 2nd Account No. It follows that their obligation to pay principal-cum-regular or monetary interest under the terms and conditions of the said Account was not extinguished by such tender of payment alone.
SOURCES OF OBLIGATIONS:
D.
DELICTS
1. 2. 3. 4. 5. 6. 7. 8.
PEOPLE VS. MALICSI, 543 S 93 PEOPLE VS. SIA, NOV. 21, 2001 PEOPLE VS. DOCTOLERO, AUG. 20, 2001 PEOPLE VS. ABULENCIA, AUG. 22, 2001 BERMUDEZ VS. MELECIO- HERRERA, FEB. 26, 1988 PEOPLE VS. RELOVA, MAR, 6, 1987 MANANTAN VS. CA, JAN. 29, 2001 PEOPLE VS. BAYOTAS, 236 SCRA 239
PEOPLE VS. MALICSI G.R No. 175833. January 29, 2008 FACTS: The accused-appellant was accused for the crime of rape against his niece. The incident was repeated trice by the appellant. The appellant contended that he and the victim were sweethearts but the trial court did not give weight to that theory. The trial court found appellant guilty of the crime of four counts of qualified rape and was sentenced to suffer the penalty of death for each count of rape, to pay P300,000.00 as civil indemnity (P75,000.00 for each count), and P200,000.00 as moral damages (P50,000.00 for each count). The CA however modified the findings of the RTC declaring that appellant is guilty of four counts of simple rape and to suffer the penalty of reclusion perpetua. ISSUE: Whether the award of damages was properly made. RULING : No, because the Supreme Court declared that the crime committed was four count of simple rape only and not qualified rape because the special aggravating circumstances of minority and relationship must be
alleged in the information but the prosecution failed to do so. Since it is not included, four counts of simple rape should be undertaken. The penalty imposed then should be reclusion perpetua. The appellate court also correctly affirmed the award by the trial court of P200,000.00 for moral damages. Moral damages are automatically granted to rape victim. However, the award of civil indemnity is reduced to P200,000.00 in the amount of P50,000.00 for each count of simple rape is automatically granted.
DELICT AS A SOURCE OF OBLIGATION
PEOPLE OF THE PHILIPPINES, plaintiff-appellee, VS. ROSAURO SIA y DICHOSO, JOHNNY BALALIO y DEZA, JIMMY PONCE y TOL and JOHN DOE @ PEDRO MUÑOZ (at large), accused-appellants G.R. No. 137457 2001 Nov 21 FACTS: The taxi was taken from the garage and driven by its regular driver, Christian Bermudez, at about 6:00 a.m. on August 23, 1995. The taxi was last seen at the vicinity of the Pegasus Night Club at about 10:30 p.m. on the said date with the passenger who is the accused Rosauro Sia. Accused Rosauro Sia appears to have tipped driver Christian Bermudez to service him the following day in the morning and to be paid P150.00 per hour which was apparently accepted because Rosauro gave instructions to accused Johnny Balalio and Jimmy Ponce to wait for him (Christian) that following morning. When Christian returned to Sia’s residence he was told to come back in the afternoon. When Christian returned in the afternoon, he was asked to get inside. As soon as he alighted from the taxi, his hands were tied by Johnny Balalio and was handed to a certain “Pedro”, the accused Peter Doe who has not been arrested. Christian was taken to accused Rosauro and shortly afterwards, the latter was seen lugging with him a big carton box from which blood was dripping. Accused Jimmy Ponce saw Rosauro hand the carton-wrapped lifeless body of Christian inside the carnapped FX taxi. Before leaving with the lifeless body of Christian loaded in the taxi, accused Sia gave P3,000.00 each to Jimmy Ponce, Johnny Balalio and “Pedro” and admonished them not to say anything about what happened. The ring taken from Christian was given to accused Jimmy Ponce by Rosauro Sia.
On August 26, 1995, the lifeless body of Christian Bermudez was found and retrieved from a fishpond in Meycauayan, Bulacan. This fact was broadcast over the radio and, after hearing the same, Agripina Bermudez went to see the lifeless body retrieved from the fishpond and confirmed it to be that of Christian, whom she claims is her eldest son who was earning about P650.00 a day as a taxi driver.
ISSUE: Whether or not the trial court is correct in awarding the damages to the heirs of the victim. RULING: The Court finds no reason to reverse the ruling of the court a quo insofar as the crimes were committed. Anent the civil indemnity award, this Court finds the amount of P50,000.00 as death indemnity proper, following prevailing jurisprudence and in line with controlling policy. Award of civil indemnity may be granted without any need of proof other than the death of the victim. The victim’s heirs are likewise entitled to moral damages, pegged at P50,000.00 by controlling case law, taking into consideration the pain and anguish of the victim’s family brought about by his death. However, the award of P200,000.00 as burial and other expenses incurred in connection with the death of the victim must be deleted. The records are bereft of any receipt or voucher to justify the trial court’s award of burial and other expenses incurred in connection with the victim’s death. The trial court was correct in awarding damages for loss of earning capacity despite the non-availability of documentary evidence. Damages representing net earning capacity have been awarded by the Court based on testimony in several cases. However, the amount of the trial court’s award needs to be recomputed and modified accordingly. In determining the amount of lost income, the following must be taken into account: (1) the number of years for which the victim would otherwise have lived; and (2) the rate of the loss sustained by the heirs of the deceased. The second variable is computed by multiplying the life expectancy by the net earnings of the deceased, meaning total earnings less expenses necessary in the creation of such earnings or income less living and other incidental expenses. Considering that there is no proof of living expenses of the deceased, net earnings are computed at fifty percent (50%) of the gross earnings. The formula used by this Court in computing loss of earning capacity is:
