ARTICLE 1157 G.R. No. L-3489 September 7, 1907 VICENTE NAVALES vs.

EULOGIA RIAS, ET AL FACTS: It is undeniable that, in order to remove from the land of Eulogia Rias, situated within the jurisdiction of the town of Naga, the house which Vicente Navales had constructed thereon, by virtue of the decision of the justice in the action instituted by the said Eulogia Rias against the owner of the house, Vicente Navales, the deputy sheriff who carried the judgment into execution was obliged to destroy the said house and removed it from the land, according to the usual procedure in the action for ejectment. In the order of execution issued to the deputy sheriff, the directive portion of the judgment of the justice of the peace was inserted, and it contained the essential statement that the said judgment, by reason of its not having been appealed from, had become final, and from the contents of the same may be inferred that there had been an action for ejectment between the above-named parties, and that there was no reason why it should not be enforced when it had already become final and acquired the nature of res adjudicata. Section 72 of the CC Procedure reads: Execution. If no appeal from a judgment of a justice of the peace shall be perfected as herein provided, the justice of the peace shall, at the request of the successful party, issue execution for the enforcement of the judgment, and the expiration of the time limited by law for the perfection of an appeal. HELD: Assuming that the order for execution of final judgment was issued in accordance with the law, and in view of the fact that it has not been alleged nor proven that the sheriff when complying with the same had committed trespass or exceeded his functions, it must be presumed according to section 334 (14) of the said Code of Procedure, that the official duty was regularly performed. Therefore, it is not possible to impute liability to the plaintiff who obtained the judgment and the execution thereof, when the same was not disputed nor alleged to be null or illegal, and much less to compel the payment of damages to the person who was defeated in the action and sentenced to be ejected from the land which he improperly occupied with his house. No proof has been submitted that a contract had been entered into between the plaintiff and the defendants or that the latter had committed illegal acts or omissions or incurred in any kind of fault or negligence, from any of which an obligation might have arisen on the part of the defendants to indemnify the plaintiff. For this reason, the claim for indemnity, on account of acts performed by the sheriff while enforcing a judgment, cannot under any consideration be sustained. (Art. 1089, Civil Code.) The illegality of the judgment of the justice of the peace that of the writ of execution thereunder, or of the acts performed by the sheriff for the enforcement of the judgment, has not been shown. Therefore, for the reasons hereinbefore set forth, the judgment appealed from is hereby reversed, and the complaint for damages filed by Vicente Navales against Eulogia Rias and Maximo Requiroso is dismissed without special ruling as to costs. So ordered.

G.R. No. L-46179 Virata vs Ochoa FACTS: In September 1975, Borilla was driving a jeep when he hit Arsenio Virata thereby causing the latters death. The heirs of Virata sued Borilla through an action for homicide through reckless imprudence in the CFI of Rizal. Viratas lawyer reserved their right to file a separate civil action the he later withdrew said motion. But in June 1976, pending the criminal case, the Viratas again reserved their right to file a separate civil action. Borilla was eventually acquitted as it was ruled that what happened was a mere accident. The heirs of Virata then sued Borilla and Ochoa (the owner of the jeep and employer of Borilla) for damages based on quasi delict. Ochoa assailed the civil suit alleging that Borilla was already acquitted and that the Viratas were merely trying torecover damages twice. The lower court agreed with Ochoa and dismissed the civil suit. ISSUE: Whether or not the heirs of Virata may file a separate civil suit. HELD: Yes. It is settled that in negligence cases the aggrieved parties may choose between an action under the Revised PenalCode or of quasi-delict under Article 2176 of the Civil Code of the Philippines. What is prohibited by Article 2177 of the Civil Code of the Philippines is to recover twice for the same negligent act. Therefore, under the proposed Article 2177, acquittal from an accusation of criminal negligence, whether on reasonable doubt or not, shall not be a bar to a subsequent civil action, not for civil liability arising f

G.R. No. 140847 September 23, 2005 HOSPICIO DE SAN JOSE DE BARILI, CEBU CITY vs. DAR
FACTS: Hospicio de San Jose de Barili is a charitable organization created as a body corporate in 1925 by Act No. 3239. The law was enacted in order to formally accept the offer made by Pedro Cui and Benigna Cui to establish a home for the care and support, free of charge, of indigent invalids and incapacitated and helpless persons. Hospicio was to be maintained with the revenues of the personal and real properties to be endowed by the Cuis and other donors. Sec. 4 of Act No. 3239 provides that 'the personal and real property donated to Hospicio by its founders or by other persons shall not be sold under any consideration. On Oct. 10, 1987, the Department of Agrarian Reform Regional Office (DARRO) R7 issued an order ordaining that two parcels of land owned by Hospicio be placed under Operation Land Transfer in favor of twenty-two (22) tillers as beneficiaries. PD No. 27, a land reform law, was cited as legal basis for the order. Hospicio filed a motion for recon of the order with DAR Sec, citing Sec. 4 of Act No. 3239. They argued that Act No. 3239 is a special law, which could not have been repealed by P.D. No. 27, a general law, or by the latter's general repealing clause. The DAR Sec rejected the motion for recon,DAR Secretary held that P.D. No. 27 was a special law, as it applied only to particular individuals in the State, specifically the tenants of rice and corn lands. Moreover, P.D. No. 27, which covered all rice and corn lands, provides no exemptions based on the manner of acquisition of the land by the landowner. The Order of the DAR Secretary was assailed in a Petition for Certiorari filed with the CA. In a Decision 9 July 1999, the CAs Special 11th Division affirmed the DAR Secretary's issuance. It sustained the position of the Office of the Solicitor General (OSG) position that Section 4 of Act No. 3239 was expressly repealed not only by P.D. No. 27, but also by Republic Act No. 6657, otherwise known as the Comprehensive Agrarian Reform Law of 1988, both laws being explicit in mandating the distribution of agricultural lands to qualified beneficiaries. ISSUE: whether a provision in the law prohibiting the sale of the properties donated to the charitable organization that was incorporated by the same law bars the implementation of agrarian reform laws as regards said properties. HELD: SC agrees with CAs decision that neither P.D. No. 27 nor the CARL exempts the lands of the Hospicio or other charitable institutions from the coverage of agrarian reform. Ultimately, the result arrived at in the assailed issuances should be affirmed. Nonetheless, both the DAR Secretary and the appellate court failed to appreciate what to this Court is indeed the decisive legal dimension of the case. Sec. 4 of Act No. 3239 prohibits the sale 'under any consideration of the lands donated to the Hospicio. But the land transfers mandated under P.D. No. 27 cannot be considered a conventional sale under our civil laws. Generally, sale arises out of a contractual obligation. Thus, it must meet the first essential requisite of every contract that is the presence of consent. Consent implies an act of volition in entering into the agreement. The absence or vitiation of consent renders the sale either void or voidable. In this case, the deprivation of the Hospicio's property did not arise as a consequence of the Hospicio's consent to the transfer. There was no meeting of minds between the Hospicio, on one hand, and the DAR or the tenants, on the other, on the properties and the cause which are to constitute the contract that is to serve ultimately as the basis for the transfer of ownership of the subject lands. Instead, the obligation to transfer arises by compulsion of law, particularly P.D. No. 27.

G.R. No. 186382 April 5, 2010 PP vs. DOMINGO PANITERCE

FACTS: That sometime in the year 1997 in Philippines, Domingo Paniterce y Martinez, with grave abuse of confidence being the father of the offended party with lewd designs by means of force and intimidation, did then and there wilfully, unlawfully and feloniously succeed in having carnal knowledge with his daughter AAA, a 10 year-old minor, against her will and without her consent. In two Amended Informations, both dated Dec. 3, 2002, Asst. Provl Prosecutor Daniel M. Salvador a charged Paniterce with two counts of rape of his other daughter BBB. When arraigned, Paniterce pleaded not guilty to all the charges. After trial on the merits, the RTC rendered a Decision and found him guilty and sentenced him imprisonment to death. On June 4, 2005, Paniterce was committed to the Bureau of Corrections in Muntinlupa City. He filed an appeal with the CA, which rendered a Decision on August 22, 2008 affirming the RTC judgment with modifications. On Sept. 16, 2008, Paniterce, through counsel, filed a Notice of Appeal with the CA conveying his intention to appeal to SC. The CA gave due course to his Notice of Appeal on Sept. 23, 2008, and directed its Judicial Records Division to elevate to SC the original records. On 15 April 2009, SC required the parties to file their supplemental briefs, and the Dir. of the Bureau of Corrections to confirm the commitment of Paniterce at the Bureau of Corrections and submit his report within10 days from notice. Paniterce filed his Supplemental Brief while the OSG filed a Manifestation stating that it would no longer file a supplemental brief considering that Paniterce did not raise any new issue in his appeal. On July 22, 2009, SC submitted for resolution. However, in a letter dated Oct. 12, 2009, Julio A. Arciaga, Asst. Dir. for Prisons and Security of the Bureau of Corrections, informed us that Paniterce had died on August 22, 2009 at the New Bilibid Prison Hospital his Death Certificate was attached to said letter. Given Paniterces death, we are now faced with the question of the effect of such death on the present appeal. Paniterces death on August 22, 2009, during the pendency of his appeal, extinguished not only his criminal liabilities for the rape and acts of lasciviousness committed against his daughters, but also his civil liabilities solely arising from or based on said crimes. According to Art. 89(1) of the RPC, criminal liability is totally extinguished:1. By the death of the convict, as to the personal penalties; and as to pecuniary penalties, liability therefor is extinguished only when the death of the offender occurs before final judgment. ISSUE: HELD: Clearly, it is unnecessary for the Court to rule on Paniterces appeal. Following Article 89(1) of RPC and our disquisition in Bayotas, even assuming Paniterce had incurred criminal liabilities, they were totally extinguished by his death. Moreover, because Paniterces appeal was still pending and no final judgment of conviction had been rendered against him when he died, his civil liabilities arising from the crimes, being civil liabilities ex delicto, were likewise extinguished by his death. Consequently, the appealed Decision dated August 22, 2008 of the Court of Appeals finding Paniterce guilty of rape and acts of lasciviousness, sentencing him to imprisonment, and ordering him to indemnify his victims had become ineffectual. WHEREFORE, in view of the death of accused-appellant Domingo Paniterce y Martinez, the Decision dated August 22,2008 of the Court of Appeals in CA-G.R. CR-H.C. No. 01001 is SET ASIDE and Criminal Case Nos. 6076, 6077, 6078,6079, 6080, and 6081 before the Regional Trial Court of Iriga City are DISMISSED. Costs de oficio.SO ORDERED.

ARTICLE 1158 G.R. No. L-30511 February 14, 1980 SERRANO vs. CBP; et al FACTS: On Oct. 13, 1966 and Dec.12, 1966, MANUEL M. SERRANO made a time deposit, for 1year with 6% interest, of Php 150k with Overseas Bank of Manila. Concepcion Maneja also made a time deposit, for 1year with 6-% interest, on March 6, 1967, of Php200k Overseas Bank of Manila. 4 On August 31, 1968, Concepcion Maneja, married to Felixberto M. Serrano, assigned and conveyed to Manuel M. Serrano, her time deposit. Notwithstanding series of demands for encashment Overseas Bank of Manila, from Dec. 6, 1967-March 4, 1968, not a single one of the time deposit certificates was honored by Overseas Bank of Manila. Central Bank admits that it is charged with the duty of administering the banking system of the Republic and it exercises supervision over all doing business in the Philippines, but denies the Serranos allegation that the Central Bank has the duty to exercise a most rigid and stringent supervision of banks, implying that Central Bank has to watch every move or activity of all banks, including Overseas Bank of Manila. Central Bank claims that as of March 12, 1965, the Overseas Bank of Manila, while operating, was only on a limited degree of banking operations since the Monetary Board decided in its Reso No. 322, dated March 12, 1965, to prohibit the Overseas Bank of Manila from making new loans and investments in view of its chronic reserve deficiencies against its deposit liabilities. This limited operation of Overseas Bank of Manila continued up to 1968. Central Bank also denied that it is guarantor of the permanent solvency of any banking institution as claimed by Serrano. It claims that neither the law nor sound banking supervision requires respondent Central Bank to advertise or represent to the public any remedial measures it may impose upon chronic delinquent banks as such action may inevitably result to panic or bank "runs". In the years 1966-1967, there were no findings to declare the Overseas Bank of Manila as insolvent. Central Bank likewise denied that a constructive trust was created in favor of Serrano and his predecessor in interest Concepcion Maneja when their time deposits were made in 1966 and 1967 with the Overseas Bank of Manila as during that time the latter was not an insolvent bank and its operation as a banking institution was being salvaged by the Central Bank. Central Bank avers no knowledge of Serranos claim that the properties given by Overseas Bank of Manila as additional collaterals to Central Bank of the Philippines for the former's overdrafts and emergency loans were acquired through the use of depositors' money, including that of the petitioner and Concepcion Maneja. ISSUE: HELD: By the very nature of the claims and causes of action against respondents, they in reality are recovery of time deposits plus interest from Overseas Bank of Manila, and recovery of damages against Central Bank for its alleged failure to strictly supervise the

acts of the other Bank and protect the interests of its depositors by virtue of the constructive trust created when Central Bank required the OBM to increase its collaterals for its overdrafts said emergency loans, said collaterals allegedly acquired through the use of depositors money. These claims should be ventilated in the CFI of proper jurisdiction as We already pointed out when this Court denied Serranos motion to intervene in G.R. No. L-29352. Claims of these nature are not proper in actions for mandamus and prohibition as there is no shown clear abuse of discretion by the Central Bank in its exercise of supervision over the Overseas Bank of Manila, and if there was, Serrano here is not the proper party to raise that question, but rather the Overseas Bank of Manila, as it did in G.R. No. L-29352. Neither is there anything to prohibit in this case, since the questioned acts of Central Bank (the acts of dissolving and liquidating the Overseas Bank of Manila), which he here intends to use as his basis for claims of damages against Central Bank, had been accomplished a long time ago. Furthermore, both parties overlooked one fundamental principle in the nature of bank deposits when the he claimed that there should be created a constructive trust in his favor when the Overseas Bank of Manila increased its collaterals in favor of Central Bank for the former's overdrafts and emergency loans, since these collaterals were acquired by the use of depositors' money. Bank deposits are in the nature of irregular deposits. They are really loans because they earn interest. All kinds of bank deposits, whether fixed, savings, or current are to be treated as loans and are to be covered by the law on loans. Current and savings deposit are loans to a bank because it can use the same. The petitioner here in making time deposits that earn interests with Overseas Bank of Manila was in reality a creditor of the Bank and not a depositor. The Bank was in turn a debtor of petitioner. Failure of the Bank to honor the time deposit is failure to pay its obligation as a debtor and not a breach of trust arising from depositary's failure to return the subject matter of the deposit

SANTOS vs. COURT OF APPEALS G.R. No. 120820. August 1, 2000

FACTS: Spouses Santos owned the house and lot in Better Living Subdivision, Paranaque, Metro Manila. The land together with the house was mortgaged with the Rural Bank of Salinas, Inc., to secure a loan of P150K. The bank sent Rosalinda Santos a letter demanding payment of P16K in unpaid interest and other charges. Since the Santos couple had no funds, Rosalinda offered to sell the house and lot to Carmen Caseda. After inspecting the real property, Carmen and her husband agreed. Carmen and Rosalinda signed a document, involving the sale of the house P350K as full amount, P54K as down payment. Among other condition set is that Caseda will pay the balance of the mortgage in the bank, real estate taxes and the electric and water bills. The Casedas complied with the bank mortgage and the bills. The Santoses, seeing that the Casedas lacked the means to pay the remaining instalments and/or amortization of the loan, repossessed the property. The Santoses then collected the rentals from the tenants. Carmen approached petitioners and offered to pay the balance of the purchase price for the house and lot. The parties, however, could not agree, and the deal could not push through because the Santoses wanted a higher price. Carmen is now praying that the Santoses execute the final deed of conveyance over the property. ISSUE: WON there was a perfected contract of sale? NO HELD: A contract is what the law defines it to be, taking into consideration its essential elements, and not what the contracting parties call it. Article 1458 expressly obliges the vendor to transfer ownership of the thing sold as an essential element of a contract of sale. This is because the transfer of ownership in exchange for a price paid or promised is the very essence of a contract of sale. There was no transfer of ownership simultaneously with the delivery of the property purportedly sold. The records clearly show that, notwithstanding the fact that the Casedas first took then lost possession of the disputed house and lot, the title to the property has remained always in the name of Rosalinda Santos. Although the parties had agreed that the Casedas would assume the mortgage, all amortization payments made by Carmen Caseda to the bank were in the name of Rosalinda Santos. The foregoing circumstances categorically and clearly show that no valid transfer of ownership was made by the Santoses to the Casedas. Absent this essential element, their agreement cannot be deemed a contract of sale. It was a contract to sell. Ownership is reserved by the vendor and is not to pass until full payment of the purchase price. This we find fully applicable and understandable in this case, given that the property involved is a titled realty under mortgage to a bank and would require notarial and other formalities of law before transfer thereof could be validly effected. The CA cannot order rescission. If the vendor should eject the vendee for failure to meet the condition precedent, he is enforcing the contract and not rescinding it. When the petitioners in the instant case repossessed the disputed house and lot for failure of private respondents to pay the purchase price in full, they were merely enforcing the contract and not rescinding it

G.R. No. L-5671 August 24, 1910 BENITO DE LOS REYES vs.VERONICA ALOJADO
FACTS: On or about Jan.22, 1905, Veronica Alojado received, as a loan, from Benito de los Reyes that the sum P67 .60, for the purpose of paying a debt she owed to Olimpia Zaballa. It was agreed between Alojado and Reyes that the she should remain as a servant in the house and in the service of her creditor, without any renumeration whatever, until she should find someone who would furnish her with the said sum where with to repeat the loan. Veronica Alojado, afterwards left the house of the plaintiff, on March 12, 1906, without having paid him her debt, nor did she do so at any subsequent date, notwithstanding his demands. Benito, on March 15, 1906, filed suit in the CFI of Santa Rosa, La Laguna, against Veronica Alojado to recover the said sum or, in a contrary case, to compel her to return to his service. Besides the Php 67.70, had also received from the plaintiff, under the same conditions, various small amounts between the dates of January 22, 1905, and March 10, 1906, aggregating altogether P11.97, and that they had not been repaid to him. He therefore asked that judgment be rendered sentencing the Alojado to comply with the said contract and to pay to the plaintiff the sums referred to, amounting in all to P79.57, and that until this amount should have been in paid, she should remain gratuitously in the service of plaintiff's household, and that she should pay the costs of the trial. In her written answer of the complaint, she denied the allegations contained and alleged that, although she had left the Benitos service, it was because the he had paid her no sum whatever for the services she had rendered in his house. ISSUE: WON Veronica should be compiled to return to the house of Benito to impose the contract they have? HELD: No. The duty to pay the said sum, as well as that of P11.97 delivered to the defendant in small amounts during the time that she was in the his house, is unquestionable, inasmuch as it is a positive debt demandable of the Veronica by her creditor. (Arts. 1754, 1170, Civil Code.) However, the reason alleged by the plaintiff as a basis for the loan is untenable, to wit, that she was obliged to render service in his house as a servant without remuneration whatever and to remain therein so long as she had not paid her debt, inasmuch as this condition is contrary to law and morality. (Art. 1255, Civil Code.) Domestic services are always to be remunerated, and no agreement may subsist in law in which it is stipulated that any domestic service shall be absolutely gratuitous, unless it be admitted that slavery may be established in this country through a covenant entered into between the interested parties. When legal regulations prohibit even a usurious contract and all abuses prejudicial to subordinates and servant, in connection with their salaries and wages, it will be understood at once that the compact whereby service rendered by a domestic servant in the house of any inhabitant of this country is to be gratuitous, is in all respects reprehensible and censurable; and consequently, the contention of the Benito, that until the she shall have paid him her debt she must serve him in his house gratuitously is absolutely inadmissible.

G.R. No. 177056 September 18, 2009 OSG vs. AYALA LAND INCORP., ROBINSON'S LAND CORP., SHANGRI-LA PLAZA CORP. and SM PRIME HOLDINGS, INC., FACTS: Ayala Land, Robinsons, and Shangri-la maintain and operate shopping malls in various locations in Metro Manila. SM Prime constructs, operates, and leases out commercial buildings and other structures, among which, are SM City, Manila; SM Centerpoint, Sta. Mesa, Manila; SM City, North Avenue, Quezon City; and SM Southmall, Las Pias. They have parking facilities for all kinds of motor vehicles, either by way of parking spaces inside the mall buildings or in separate buildings and/or adjacent lots that are solely devoted for use as parking spaces. Ayala Land, Robinsons, and SM Prime spent for the construction of their own parking facilities. Shangri-la is renting its parking facilities, consisting of land and building specifically used as parking spaces, which were constructed for the lessors account. They expend for the maintenance and administration of their respective parking facilities. They provide security personnel to protect the vehicles parked in their parking facilities and maintain order within the area. In turn, they collect parking fees from the persons making use of their parking facilities, regardless of whether said persons are mall patrons or not. SM Prime received information that, pursuant to Senate Committee Report No. 225, the DPWH Secretary and the local building officials of Manila, QC, and Las Pias intended to institute, through the OSG, an action to enjoin SM Prime and similar establishments from collecting parking fees, and to impose upon said establishments penal sanctions under PD No. 1096, (National Building Code), and its Implementing Rules and Regulations (IRR). With the threatened action against it, SM Prime filed, on Oct. 3, 2000, a Petition for Declaratory Relief under Rule 63 of the Revised Rules of Court, against the DPWH Secretary and local building officials of Manila, Quezon City, and Las Pias. ISSUE: Whether Ayala Land, Robinsons, Shangri-La and SM Prime are obligated to provide parking spaces in their malls for the use of their patrons or the public in general, free of charge. HELD: The Building Code, which is the enabling law and the Implementing Rules and Regulations do not impose that parking spaces shall be provided by the mall owners free of charge. Absent such directive, Ayala Land, Robinsons, Shangri-la and SM Prime are under no obligation to provide them for free. Article 1158 of the Civil Code is clear: Obligations derived from law are not presumed. Only those expressly determined in this Code or in special laws are demandable and shall be regulated by the precepts of the law which establishes them; and as to what has not been foreseen, by the provisions of this Book (1090).[] xxxx

The provision on ratios of parking slots to several variables, like shopping floor area or customer area found in Rule XIX of the Implementing Rules and Regulations cannot be construed as a directive to provide free parking spaces, because the enabling law, the Building Code does not so provide. x x x. To compel Ayala Land, Robinsons, Shangri-La and SM [Prime] to provide parking spaces for free can be considered as an unlawful taking of property right without just compensation. Parking spaces in shopping malls are privately owned and for their use, the mall operators collect fees. The legal relationship could be either lease or deposit. In either case, the mall owners have the right to collect money which translates into income. Should parking spaces be made free, this right of mall owners shall be gone. This, without just compensation. Further, loss of effective control over their property will ensue which is frowned upon by law. The presence of parking spaces can be viewed in another light. They can be looked at as necessary facilities to entice the public to increase patronage of their malls because without parking spaces, going to their malls will be inconvenient. These are, however, business considerations which mall operators will have to decide for themselves. They are not sufficient to justify a legal conclusion, as the OSG would like the Court to adopt that it is the obligation of the mall owners to provide parking spaces for free.

ARTICLE 1159 G.R. No. 121810 December 7, 2001 SPS INOCENCIO AND ADORACION SAN ANTONIO, vs. CA AND SPS MARIO AND GREGORIO GERONIMO FACTS: Spouses Mario and Gregoria Geronimo obtained a loan in the amount of Php 1,028,000 from the spouses Inocencio and Adoracion San Antonio. To secure the loan, Sps Geronimo mortgaged two parcels of land, both situated in Barrio Tabe, Guiguinto, Bulacan. Subsequently, Sps. Geronimo obtained an addl loan of Php 991,859 with an interest of 3.33% per month, thus making their total obligation in the amount of Php 2,019,859, payable on or before Feb. 15, 1991. Sps. Geronimo failed to pay the loan and the interest on the due date, hence, the mortgage was extrajudicially foreclosed. During the auction sale, Sps. San Antonio, being the highest bidder bought the two parcels of land. Before the 1year redemption period expired, Sps. Geronimo filed a complaint for annulment of extrajudicial foreclosure with preliminary mandatory injunction with the RTC of Bulacan, B22. After the parties presented their respective evidence, they submitted to the court on Sept.16, 1993, a compromise agreement dated August 25, 1993, the terms and conditions of which are within 6months from signing of the compromise agreement simultaneous to which delivery of the title to the properties in the names of the SPs. San Antonio, the they will execute the corresponding instrument of resale/reconveyance/redemption over that property together with its improvements, for the purpose of the cancellation of the annulment of the sale in the title subject to the condition that should Sps. Geronimo fail to deliver the titles to the 3 lots heretofore mentioned to the San Antonio, they shall be deemed to have waived and renounced any all rights, claims and demands whatsoever they may have over that property covered by including its improvements and bind themselves to respect the right of ownership, and possession of the defendants San Antonio over said property, or to pay Php 2M within the same period. The terms and conditions thereof are not contrary to law, morals and public policy. In accordance with the stipulations in par 1 of the Compromise Agreement, Sps. San Antonio executed a Certificate of Redemption and Cancellation of Sale covering TCT No. RT-6653 after Sps. Geronimo paid them Php 2M. Sps. Geronimo, however, failed to transfer the ownership and deliver the titles of the three parcels of land described in paragraph 2 of the agreement or to pay 2 Million Pesos within the six-month period from August 25, 1993. It was only on March 4, 1994, after the lapse of six months that they delivered the three titles to SPs. San Antonio. As the delivery was beyond the agreed six-month period, they refused to accept the same or execute an instrument for the resale, reconveyance or redemption of the property. Consequently, TCT No. RT-6652 was cancelled and TCT No. T-47229 was issued in the names of petitioners.

Sps. Geronimo filed a motion for execution of the September 22, 1993 order with the trial court. This was granted on May 5, 1994. Sps. San Antonio filed two motion for recon but these were denied. So they filed a Petition for Certiorari with application for TRO and/or Writ of Preliminary Injunction with the CA. ISSUE: HELD: A compromise agreement, once approved by final order of the court, has the force of res judicata between the parties and should not be disturbed except for vices of consent or forgery. In this case, the compromise agreement clearly provided Sps. Geronimo 6 months, i.e. from Aug. 25, 1993- Feb. 25, 1994, to deliver the titles to the three parcels of land described in the agreement. If after the lapse of the said period and no delivery is yet made by Sps. Geronimo, ownership over the land covered by TCT No. RT-6652 would be transferred to Sps. San Antonio. As the facts of this case show, Sps. Geronimo failed to deliver the titles on Feb. 25, 1994, as it was only on March 4, 1994, when they gave the titles to SPs. San Antonio. Hence, pursuant to the terms of the compromise agreement, petitioners could rightfully refuse acceptance of the titles. It was error therefore for the trial court to grant the writ of execution in favor of private respondents because it effectively compelled petitioners to accept delivery of the three titles in exchange for the release of the land covered by TCT No. RT-6652 even after the lapse of the six-month period. Sps. Geronimo claim that the trial court, in issuing the writ, was merely performing a ministerial duty. While it becomes the trial courts ministerial duty to issue a writ of execution when a judgment or order becomes final and executory, a writ of execution may be refused on equitable grounds. In this case, it will be unjust to Sps. San Antonio if we compel them to accept the three titles despite the lapse of the agreed period. 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 be complied with in good faith. (Art. 1159)

G.R. No. 142830 March 24, 2006 WILLIAM GOLANGCO CONSTRUCTION CORPORATION vs. PHILIPPINE COMMERCIAL INTERNATIONAL BANK FACTS: William Golangco Construction Corporation (WGCC) and the Philippine Commercial International Bank (PCIB) entered into a contract for the construction of the extension of PCIB Tower II (denominated as PCIB Tower II, Extension Project [project]) on October 20, 1989. The project included, among others, the application of a granitite wash-out finish on the exterior walls of the building. PCIB, with the concurrence of its consultant TCGI Engineers (TCGI), accepted the turnover of the completed work by WGCC in a letter dated June 1, 1992. To answer for any defect arising within a period of one year, WGCC submitted a guarantee bond dated July 1, 1992 issued by Malayan Insurance Company, Inc. in compliance with the construction contract. The controversy arose when portions of the granitite wash-out finish of the exterior of the building began peeling off and falling from the walls in 1993. WGCC made minor repairs after PCIB requested it to rectify the construction defects. In 1994, PCIB entered into another contract with Brains and Brawn Construction and Development Corporation to re-do the entire granitite wash-out finish after WGCC manifested that it was "not in a position to do the new finishing work," though it was willing to share part of the cost. PCIB incurred expenses amounting to Php 11,665,000 for the repair work. PCIB filed a request for arbitration with the Construction Industry Arbitration Commission (CIAC) for the reimbursement of its expenses for the repairs made by another contractor. It complained of WGCCs alleged non-compliance with their contractual terms on materials and workmanship. WGCC interposed a counterclaim for Php 5,777,157.84 for material cost adjustment. The CIAC declared WGCC liable for the construction defects in the project. WGCC filed a petition for review with the CA which dismissed it for lack of merit. Its motion for reconsideration was similarly denied. ISSUE: WON WGCC is liable for defects in the granitite wash-out finish that occurred after the lapse of the one-year defects liability period provided in Art. XI of the construction contract. HELD: The autonomous nature of contracts is enunciated in Article 1306 of CC. Article 1306. The contracting parties may establish such stipulations, clauses, terms and conditions as they may deem convenient, provided they are not contrary to law, morals, good customs, public order, or public policy. Obligations arising from contracts have the force of law between the parties and should be complied with in good faith. In characterizing the contract as having the force of law between the parties, the law stresses the obligatory nature of a binding and valid agreement. The provision in the construction contract providing for a defects liability period was not shown as contrary to law, morals, good customs, pubic order or public policy. By the

nature of the obligation in such contract, the provision limiting liability for defects and fixing specific guaranty periods was not only fair and equitable; it was also necessary. Without such limitation, the contractor would be expected to make a perpetual guarantee on all materials and workmanship. The adoption of a one-year guarantee, as done by WGCC and PCIB, is established usage in the Philippines for private and government construction contracts. The contract did not specify a different period for defects in the granitite wash-out finish; hence, any defect therein should have been brought to WGCCs attention within the one-year defects liability period in the contract. We cannot countenance an interpretation that undermines a contractual stipulation freely and validly agreed upon. The courts will not relieve a party from the effects of an unwise or unfavorable contract freely entered into. [T]he inclusion in a written contract for a piece of work [,] such as the one in question, of a provision defining a warranty period against defects, is not uncommon. This kind of a stipulation is of particular importance to the contractor, for as a general rule, after the lapse of the period agreed upon therein, he may no longer be held accountable for whatever defects, deficiencies or imperfections that may be discovered in the work executed by him. The lower courts conjectured that the peeling off of the granitite wash-out finish was probably due to "defective materials and workmanship." This they characterized as hidden or latent defects. We, however, do not agree with the conclusion that the alleged defects were hidden. First, PCIBs team of experts14 (who were specifically employed to detect such defects early on) supervised WGCCs workmanship. Second, WGCC regularly submitted progress reports and photographs. Third, WGCC worked under fair and transparent circumstances. PCIB had access to the site and it exercised reasonable supervision over WGCCs work. Fourth, PCIB issued several "punch lists" for WGCCs compliance before the issuance of PCIBs final certificate of acceptance. Fifth, PCIB supplied the materials for the granitite wash-out finish. And finally, PCIBs team of experts gave their concurrence to the turnover of the project.

ARTICLE 1197
G.R. No. L-12692 COSMIC LUMBER COMPANY, INC. vs. GAPITA MANAOIS, FACTS: On different dates from 10 November 1952 to 30 June 1953 the appellant bought, took delivery and received from the appellee hardware goods, lumber and construction materials valued at the total sum of P12,127.57 and from 4 November 1952 to 10 March 1954 the appellant paid the appellee the total sum of P6,979.83 which the latter credited to the former's account). On 23 December 1954, after the original complaint had been filed by the appellee ( 24 March 1954), the appellant paid the appellee the sum on P1,000 which the latter also credited to the former's account thereby reducing her total indebtedness to P4, 147.74. The appellant does not deny that she received the wares and materials listed in the invoices, and that she is still indebted to the appellee in the sum of P4,147.74. At the hearing of the case on 4 June 1956, her counsel withdrew the objection (filed earlier during the day) to the items listed in some of the invoices (Minutes of the session of 4 June 1956). However, she argues that as no time for payment was stipulated or fixed and from the nature and the circumstances of the obligation it could be inferred that a period was intended, the Court should fix the period for payment pursuant to article 1197 of the new Civil Code. The parties entered into a contract of sale on credit. In the invoices of the wares and material sold and delivered to the appellant, the words "credit sales" appear and it is stated that All civil actions on this contract shall be instituted in the courts of the City of Dagupan and it is hereby agreed that all may/or purchases from this Company are payable in the said City of Dagupan. It is agreed that if this bill is not paid within . . . days from date hereof I/we will pay interest at the rate of 10 percentum per annum on all overdue accounts. The buyer hereby agrees to pay and all attorney's fees and court costs should the seller institute legal action. Goods travel at buyer's risk. No claim of whatsoever nature will be considered after 24 hours from date of delivery. The parties intended to fix a period for payment of the appellant's obligation but failed to do so. Under article 1197 of the new Civil Code, the Court may fix it. Taking into consideration that from 10 November 1952, the first sale, and 30 June 1953, the last sale, to the present, more than six and nearly seven years already have elapsed, the appellant who does not deny her obligation must be ordered to pay the appellee the amount she still owes it within fifteen (15) days from the date the judgment shall have become final. With the slight modification just mentioned, the judgment appealed from is affirmed, with costs against the appellant.