AMADORA VS CA ART 2180 In sum none of the respondents is liable for the injury inflicted by Pablito Damon on Alfredo

o Amadora that resulted in the latters death at the auditorium of the Colegio de San Jose-Recoletos Article !"#$ should apply to all schools% academic as &ell as non-academic 'eachers in general shall be liable for the acts of their students e(cept &here the school is technical in nature% in &hich case it is the head &ho shall be ans&erable Colegio de San Jose-Recoletos cannot be held directly liable under the article because only the teacher or the head of the school of arts and trades is made responsible for the damage caused by the student or apprentice )either can it be held to ans&er for the tort committed by any of the other pri*ate respondents for none of them has been found to ha*e been charged &ith the custody of the offending student or has been remiss in the discharge of his duties in connection &ith such custody Article !"#$% the responsibility treated of shall cease &hen the persons mentioned pro*e that they obser*ed all the diligence of a good father of a family to pre*ent damage A)+,-,S .S CA-ASA)/ - ""01 'he plaintiffs-appellees paid the monthly installments% &hen their aggregate payment already amounted to P2%344 4# from the amount of P4%0!$ $$ plus 15 interest per annum 'he Court ruled that since the principal obligation under the contract is only P4%0!$ $$ and the plaintiffsappellees ha*e already paid an aggregate amount of P2%344 4#% the courts should only order the payment of the fe& remaining installments but not uphold the cancellation of the contract 6pon payment of the balance of P71" 71 &ithout any interest thereon% the defendant must immediately e(ecute the final deed of sale in fa*or of the plaintiffs and e(ecute the necessary transfer of documents ARAAS VS. TUTAAN Plaintiff is the o&ner of 2$$ shares including the stoc8 di*idends that accrued to said shares 6',9 alleged that the cash di*idends had already been paid thereby absol*ing it from payment 'he final and e(ecutory judgment against 6',9 declared petitioners as the o&ners of the :uestioned 6',9 shares of stoc8 against its co-defendants It &as further made clear in the motion for clarification that all di*idends accruing to the said shares after the rendition of the decision of Aug 1% "01" rightfully belonged to petitioners If 6',9 ne*ertheless chose to pay the &rong parties% not&ithstanding its full 8no&ledge and understanding of the final judgment% it &as still liable to pay the petitioners as the la&ful declared o&ners of the :uestions shares of stoc8s 'he burden of reco*ering the supposed payment of the cash di*idends made by 6',9 to the &rong parties Casta;eda and <anuel falls upon itself by its o&n action and cannot be passed by it to the petitioner as the innocent parties It is elementary that payment made by a judgment debtor to a &rong party cannot e(tinguish the judgment obligation of such debtor to its creditor ARA),'A .S P=I- S6+AR ,S'A',S D,.,->P<,)' C> - ""01 'he parties stipulated% among in the contract of purchase and sale &ith mortgage% that the buyer &ill build on the said parcel land the Sto Domingo Church and Con*ent &hile the seller for its part &ill construct streets 'he buyer finished its construction but the seller% +regorio Araneta% Inc % &as unable to finish the construction of the street in the )ortheast side because a certain third-party% s:uatting?occupying in the middle part thereof% refused to *acate the same ,*en on the assumption that the court should ha*e found that no reasonable time or no period at all had been fi(ed% still% the complaint not having sought that the Court should set a period% the court could not proceed to do so unless the complaint included it as first amended@ +ranting% ho&e*er% that it lay &ithin the CourtAs po&er to fi( the period of performance% still the amended decision is defecti*e in that no basis is stated to support the conclusion that the period should be set at two years after finality of the judgment 'he list paragraph of Article ""01 is clear that the period cannot be set arbitrarily. 'he Court of Appeals objected to this conclusion that it &ould render the date of performance indefinite no justification in la& for the setting the date of performance at any other time than that of the e*iction of the s:uatters occupying the land ARRIETA VS. NARIC - 1170 PaB Arrieta &as a&arded by )ARIC the contract of deli*ery of !$%$$$ metric tons of Curmese rice in e(change of -C but failed to open -C on time so Arrieta instead offered to substitute 'hailand rice to )ARIC but &as rejected 'he liability of the corporation stemmed not alone from failure or inability to satisfy the re:uirements of the ban8% but its culpability arose from is &illful and deliberate assumption of contractual obligations e*en as it &as &ell a&are of its financial incapacity to underta8e the prestation 6nder Article ""1$% Dthose &ho in the performance of their obligation are guilty of fraud% negligence% or delay and those &ho in any manner contra*ene the tenor thereof% are liable in damages E 'he terms Din any manner contra*ene the tenor thereofE includes any illicit act &hich impairs the strict and faithful fulfillment of the obligation% or e*ery 8ind or defecti*e performance In general also% e*ery debtor &ho fails in the performance of his obligation is bound to indemnify for the losses and damages caused thereby 'he subse:uent offer to substitute the 'hailand rice for the originally contracted Curmese did not constitute a &ai*er Fai*ers are not presumed It must be clearly and con*incingly sho&n either by e(press stipulations or acts admitting no other reasonable e(planation )ARIC should be held liable in damages for breach of contract 6nder Article ""1$ of the Ci*il Code% not only debtors guilty of fraud% negligence or default but also debtor of e*ery% in general% &ho fails in the performance of his obligations is bound to indemnify for the losses and damages caused thereby PSBA vs. CA 2180 & 2176 Pri*ate respondents sued the Philippine School of Cusiness Administration GPSCAH together &ith some school authorities holding them liable for their sons untimely death due to negligence% rec8lessness and lac8 of security precautions during the time &hen respondents son &as stabbed inside the school premises 'he assailants are not members of the schools academic community A contractual relation bet&een the PSCA and Carlitos Cautista% the rules on :uasi-delict do not really go*ern A perusal of Article !"17 sho&s that obligations arising from :uasi-delicts or tort% also 8no&n as e(tra-contractual obligations% arise only bet&een parties not other&ise bound by contract% &hether e(press or implied =o&e*er% this impression has not pre*ented this Court from determining the e(istence of a tort e*en &hen there obtains a contract In the case at bar% ho&e*er% there is% as yet% no finding that the contract bet&een the school and Cautista had been breached thru the formerAs negligence in pro*iding proper security measures D,)I,D Ca8sh *ersus CA I Article !" A complaint for damages filed against petitioner Ca8sh for alleged *iolation of their agreement to get married Article !" may be applied in a breach of promise to marry &here the &oman is a *ictim of moral seduction Article !"% &hich is designed to e(pand the concept of torts or quasi-delict in this jurisdiction by granting ade:uate legal remedy for the untold number of moral &rongs &hich is impossible for human foresight to specifically enumerate and punish in the statute boo8s It justify the a&ard of damages pursuant to Article !" not because of such promise to marry but because of the fraud and deceit behind it and the &illful injury to her honor and reputation &hich follo&ed thereafter It is essential% ho&e*er% that such injury should ha*e been committed in a manner contrary to morals% good customs or public policy )o foreigner must be allo&ed to ma8e a moc8ery of our la&s% customs and traditions .alenBuela *ersus CA I !"#$ J ""7!

Plaintiff <a -ourdes .alenBuela got flat tired and &as hit by -i% an Assistant <anager of Ale(ander Commercial% Inc A case &as filed &hich &as an action to reco*er damages based on :uasi-delict 'he Court of Appeals agreed &ith the trial court that defendant -i &as liable for the injuries sustained by the plaintiff =o&e*er% it absol*ed -is employer% Ale(ander Commercial% Inc from any liability to&ards petitioner 'he circumstances established by the e*idence adduced in the court belo& plainly demonstrate that -i &as grossly negligent in dri*ing his <itsubishi -ancer It bears emphasis that he &as dri*ing at a fast speed at about !K$$ A < after a hea*y do&npour had settled into a driBBle rendering the street slippery 'here is ample testimonial e*idence on record to sho& that he &as under the influence of li:uor 'he relationship in :uestion is not based on the principle of respondeat superior% &hich holds the master liable for acts of the ser*ant% but that of pater familias% in &hich the liability ultimately falls upon the employer% for his failure to e(ercise the diligence of a good father of the family in the selection and super*ision of his employees )ot ha*ing been able to o*ercome the burden of demonstrating that it should be absol*ed of liability for entrusting its company car to -i% said company% based on the principle of bonus pater familias% ought to be jointly and se*erally liable +alar *ersus Isasi - ""10 -uis +alar borro&ed Php "3%$$$ from Juan Isasi for &hich the former dre& t&o promissory notes As a payment% +alar paid to P)C on behalf of Aberri Inc % &hich &as controlled by Isasi and his &ife% the outstanding balance of Php "3%#2# 0$ but Isasi refused to recogniBe A demand note &as subject neither to suspensi*e condition nor a suspensi*e period 'he demand &as not a condition precedent since the effecti*ity and binding effect of the note does not depend upon the ma8ing of the demand 'he note &as binding e*en before the demand is made )either did the note constitute an implied suspensi*e period since there &as nothing to pre*ent the creditor for ma8ing demand at any time It follo&s% therefore% that the demand note &as strictly a pure obligation as defined in Article ""10 'he periods of "3 and 4$ days after demand stipulated in the promissory notes could ha*e no other purpose but to protect the debtor by gi*ing him sufficient time to raise money to meet the demand 'he period being solely for the debtors protection and benefit% the debtor could renounce it *alidly at any time 'he payment of +alar of the indebtedness of Aberri Inc to the P)C redounded to the benefit of Isasi &ho had absolute control of said corporation 'hus% said payment &as *alid and discharged the obligation% e*en if such payment &as not authoriBed by Isasi or Aberri Inc % for &hich +alar had the right to demand reimbursement for the amount paid Such reimbursement &as e(tinguished by its total absorption in the larger amount due from +alar to Isasi 'he consignation% therefore% of Isasi &as in*alid since it no longer had any obligation to&ards +alar >n the other hand% the balance of Php 2%"3" "$ due and o&ing from +alar to Isasi &as e(tinguished upon the consignation of +alar in the court the sum of Php !$%$$$ NIETES VS CA - 1169 Dr Pablo +arcia and A:uilino )ietes entered into a LContract of -ease &ith >ption to Cuy L Dr +arcia GlessorH is the o&ner of the Angeles ,ducational Institute &hich is the subject of the lease the stipulates% among others% the manner of payment% that the lese &ill be for a period of 3 years% and the option to buy agreement for a price of P"$$%$$$ $$ &ithin the period of the lease )ietes &as able to pay P !2%131 $$ plus P3!$$ $$ of &hich Dr +arcia issued receipts =o&e*er% Dr +arcia sent a letter to )ietes e(pressing his desire to rescind the contract )ietes on the other hand contended that he has not *iolated any pro*ision on the contract and thus% e(pressed his desire to buy the land and building A year after% )ietes paid the balance of P #2%#7$ $$ of the purchase price of the property =e then demanded Dr +arcia for specific performance to e(ecute a deed of absolute sale of the leased property in his G)ietesH fa*or )ietes can e(ercise his option to buy the land and building 'he contract did not say that )ietes had to pay the stipulated price of P"$$%$$$ before e(ercising his option to buy the property in :uestion Accordingly% said option is go*erned by Art ""70% the general principles on obligations% pursuant to &hichKIn reciprocal obligations% neither party incurs in delay if the other does not comply or is not ready to comply in a proper manner &ith &hat is incumbent upon him Mrom the moment one of the parties fulfills his obligation% delay by the other begins )ietes &as entitled to e(ercise his option to buy L&ithin the period of the Contract of -ease%L In the case of an option to buy% the creditor may *alidly and effecti*ely e(ercise his right by merely ad*ising the debtor of the formerAs decision to buy and e(pressing his readiness to pay the stipulated price% pro*ided that the same is a*ailable and actually deli*ered to the debtor upon e(ecution and deli*ery by him of the corresponding deed of sale 6nless and until the debtor shall ha*e done this the creditor is not and cannot be in default in the discharge of his obligation to pay 2 In other &ords% notice of the creditorAs decision to e(ercise his option to buy need not be coupled &ith actual payment of the price% so long as this is deli*ered to the o&ner of the property upon performance of his part of the agreement Cha*eB *ersus +onBaleB I ""71 J ""1$ Plaintiff Cha*es deli*ered to defendant +onBales a type&riter for routine cleaning and ser*icing 'he defendant &as not able to finish the job after some time despite repeated reminders by plaintiff ,*entually% Cha*es too8 bac8 his type&riter &hich &as returned to him in shambles &ith some parts missing 'he contract contained a period Cased on the facts it &as clear that both parties had a perfected contract for cleaning and ser*icing a type&riter@ that they intended that the defendant &as to finish it at some future time although such time &as not specified@ and that such time had passed &ithout the &or8 ha*ing been accomplished 'he time for compliance ha*ing e*idently e(pired% and there being a breach of contract by nonperformance% it &as academic for plaintiff to ha*e first petitioned the court to fi( a period Defendant cannot in*o8e Article ""01 of the Ci*il Code for he *irtually admitted non-performance by returning the type&riter that he &as obliged to repair in a non-&or8ing condition &ith essential parts missing Mor such contra*ention% +onBales is liable under Article ""71 of the Ci*il Code &hich ma8es him liable for the cost of e(ecuting the obligation in a proper manner In addition% he is li8e&ise liable under Article ""1$ of the Code for cost of the missing parts% in the amount of Php 4" "$ for in his obligation to repair the type&riter he &as bound% but failed or neglected to return it in the same condition it &as &hen he recei*ed it ZU UETA VS. MARIANO - 1191 'hey entered into a DContract to SellE the said property of petitioner for P13%$$$ payable in !$ years &ith respondent buyer assuming to pay a do&n payment of P3%$$$ and a monthly installment of P74$ payable in ad*ance before the 3th day of the corresponding month% starting &ith December% "072 >ne of their stipulations &as that upon failure of the buyer to fulfill any of the conditions being stipulated% the buyer automatically and irre*ocably authoriBes o&ner to reco*er e(tra-judicially% physical possession of the land% building and other impro*ements% &hich &ere the subject of the said contract% and to ta8e possession also e(tra-judicially &hate*er personal properties may be found &ithin the aforesaid premises from the date of said failure to ans&er for &hate*er unfulfilled monetary obligations buyer may ha*e &ith o&ner Demand &as also &ai*ed 'he action before the <unicipal Court essentially one for rescission or annulment of a contract . A!!"#$%&' (" ()* S+,#*-* C"+#(. /...,#""0 "0 v%"12(%"& %s 2 !"&$%(%"& ,#*!*$*&( (" #*s"1+(%"& "# #*s!%ss%"&. I( %s "&13 4)*& ()* v%"12(%"& )2s 5**& *s(251%s)*$ ()2( ()* !"&(#2!( !2& 5* $*!12#*$ #*s"1v*$ "# #*s!%&$*$. U,"& s+!) #*s!%ss%"& %& (+#&. )%&'*s 2 ,#"&"+&!*-*&( ()2( ,"ss*ss%"& "0 ()* #*21(3 )2s 5*!"-* +&1240+1.6 T)* S+,#*-* C"+#(. %& N*#2 vs. V2!2&(* 78 SCRA 909:. 21s" s2%$. /A v%"12(%"& 53 2 ,2#(3 "0 2&3 "0 ()* s(%,+12(%"&s "0 2 !"&(#2!( "& 2'#**-*&( (" s*11 #*21 ,#",*#(3 4"+1$ *&(%(1* ()* "()*# ,2#(3 (" #*s"1v*$ "# #*s!%&$ %(.6 A1s". 2!!"#$%&' (" ()* 5""; "0 T"1*&(%&". C%v%1 C"$* "0 ()* P)%1.. V"1. IV. 1962 *$. P. 168. !%(%&' M2'$21*&2 Es(2(* vs. M3#%!;. 71 P)%1. 8<< 719<1:. *=(#2->+$%!%21 #*s!%ss%"& )2s 1*'21 *00*!( 4)*& ()* ,2#(%*s $"*s &"( ",,"s* %(. I0 %( %s "5>*!(*$ (". >+$%!%21 $*(*#-%&2(%"& "0 ()* %ss+* %s s(%11 &*!*ss2#3. ?%() #*'2#$s (" ()* >+#%s$%!(%"&s "0 %&0*#%"# !"+#(s. ()* S+,#*-* C"+#( s2%$ ()2( ()* C@I !"##*!(13 #+1*$ ()2( ()* M+&%!%,21 C"+#( )2$ &" >+#%s$%!(%"& "v*# ()* !2s* 2&$ !"##*!(13 $%s-%ss*$ ()* 2,,*21. A"4*v*#. ()* C@I *##*$ %& 2ss+-%&' "#%'%&21 >+#%s$%!(%"&. %& ()* 02!* "0 ()* "5>*!(%"& %&(*#,"s*$ 53 ,*(%(%"&*#. S*!(%"& 11. R+1* <0. 1*2v*s &" #""- 0"# $"+5( "& ()%s ,"%&(.

S*!(%"& 11 "0 R+1* <0B /S*!(%"& 11. 2!; "0 >+#%s$%!(%"&. A !2s* (#%*$ 53 2& %&0*#%"# !"+#( 4%()"+( >+#%s$%!(%"& "v*# ()* s+5>*!( -2((*# s)211 5* $%s-%ss*$ "& 2,,*21 53 ()* C"+#( "0 @%#s( I&s(2&!*. B+( %&s(*2$ "0 $%s-%ss%&' ()* !2s*. ()* C"+#( "0 @%#s( I&s(2&!* -23 (#3 ()* !2s* "& ()* -*#%(s. %0 ()* ,2#(%*s ()*#*%& 0%1* ()*%# ,1*2$%&'s 2&$ '" (" (#%21 4%()"+( 2&3 "5>*!(%"& (" s+!) >+#%s$%!(%"&.6 CAITE VS. @ONACIER - 1198 Cy a DDeed of Assignment%E Isabelo Moncier appointed Mernando +aite as his true and la&ful attorney-in-fact to enter into a contract &ith any indi*idual or juridical person for the e(ploration and de*elopment of the mining claims Monacier decided to re*o8e the authority granted by him to +aite to e(ploit and de*elop the mining claims Monacier and his sureties failed to pay as demanded by +aite% the latter filed the present complaint against them in the Court of Mirst Instance of <anila GCi*il Case )o !04"$H for the payment of the P73%$$$ $$ balance of the price of the ore% conse:uential damages% and attorneyAs fees 'he obligation of appellant Monacier to pay appellee +aite the P73%$$$ $$ Gbalance of the price of the iron ore in :uestionH is one &ith a suspensi*e period or term and not a suspensi*e condition 'he contract stipulates that Dthe balance of Si(ty-Mi*e 'housand Pesos GP73%$$$H &ill be paid out of the first letter of credit co*ering the first shipment of iron ore E etc 'here is no uncertainty that the payment &ill ha*e to be made sooner or later@ &hat is undetermined is merely the e(act date at &hich it &ill be made Cy the *ery terms of the contract% therefore% the e(istence of the obligation to pay is recogniBed@ only its maturity or demandability is deferred 'he shipment or local sale of the iron ore is not a condition precedent Gor suspensi*eH to the payment of the balance of P73%$$$ $$% but &as only a suspensi*e period or term Appellants ha*e forfeited the right to compel +aite to &ait for the sale of the ore before recei*ing payment of the balance of P73%$$$ $$% because of their failure to rene& the bond of the Mar ,astern Surety Company or else replace it &ith an e:ui*alent guarantee +aite acted &ithin his rights in demanding payment and instituting this action one year from and after the contract &as e(ecuted% either because the appellant debtors had impaired the securities originally gi*en and thereby forfeited any further time &ithin &hich to pay@ or because the term of payment &as originally of no more than one year% and the balance of P73%$$$ $$ became due and payable thereafter 'here &as% conse:uently% no short-deli*ery in this case as &ould entitle appellants to the payment of damages% nor could +aite ha*e been guilty of any fraud in ma8ing any misrepresentation to appellants as to the total :uantity of ore in the stoc8piles of the mining claims in :uestion% as charged by appellants% since +aiteAs estimate appears to be substantially correct PARDS VS PROVINCE O@ TAR AC Concepcion donated a land perpetually to the municipality of 'arlac but then sold this parcel to Par8s Par8s% alleging that the conditions of the donation had not been complied &ith and in*o8ing the sale of this parcel of land made to him% prayed that he be declared the absolute o&ner entitled to the possession of this parcel% that the transfer of the same by the municipality of 'arlac to the Pro*ince of 'arlac be annulled% and the transfer certificate issued to the Pro*ince of 'arlac cancelled 'he plaintiff has no right of action If he has any% it is only by *irtue of the sale% but that sale cannot ha*e any effect 'his parcel ha*ing been donated &hich donation &as accepted by the latter% the title to the property &as transferred to the municipality of 'arlac Fhen the sale &as made Concepcion Cirer and James =ill &ere no longer the o&ners of this parcel and could not ha*e sold it to the plaintiff% nor could the latter ha*e ac:uired it from them 'he allegation% ho&e*er% that it is a condition precedent Gused for school and par8sH is erroneous 'he period for bringing an action for the re*ocation of the donation has prescribed% the period of prescription of this class of action is ten years Pay *ersus Palanca 11<< & 1179 'he late Justo Palanca and Rosa +onBales .da De Carlos Palanca entered into a promise to pay &ith +eorge Pay on January 4$% "03! &hich promissory note states NMor *alue recei*ed from time to time since "021% &e jointly and se*erally promise to pay to <r +eorge Pay at his office at the China Can8ing Corporation the sum of t&enty si( thousand nine hundred pesos &ith interest of "!5 per annum upon receipt by either of the undersigned of cash payment from the ,state of Don Carlos Palanca or upon demand E 'he petition &as filed on August !7% "071 as8ing the sur*i*ing spouse of Justo Palanca to interpose as administrati( As there &as refusal on the part of Segundina de Palanca to act as adminitrati(@ they claim that the property no longer belonged to the debtor and that <r Pays action has already prescribed% hence% this appeal 'he obligation being due and demandable% it &ould appear that the filing of the suit after fifteen years &as much too late Mor again% according to the Ci*il Code% &hich is based on Section 24 of Act )o "0$% the prescripti*e period for a &ritten contract is that of ten years Ceing demandable at once% the actionable period of +eorge Pay started to commence the *ery moment the contract &as e(ecuted =ence% Art ""22 of the Ci*il Code &hich states that one has to bring his action upon a &ritten contract from the right to do so accrues &ithin ten years applies Mifteen years &as then much too late Smith% Cell J Co % -td *s Sotelo <atti - ""04 Plaintiff corporation and the defendant% <r .icente Sotelo% entered into contracts &hereby the former obligated itself to sell% and the latter to purchase from it% t&o steel tan8s% for the total price of t&enty-one thousand pesos GP!"%$$$H% the same to be shipped from )e& Oor8 and deli*ered at <anila L&ithin three or four months@L t&o e(pellers at the price of t&enty fi*e thousand pesos GP!3%$$$H each% &hich &ere to be shipped from San Mrancisco in the month of September% "0"#% or as soon as possible@ and t&o electric motors at the price of t&o thousand pesos GP!%$$$H each% as to the deli*ery of &hich stipulation &as made% couched in these &ordsK LAppro(imate deli*ery &ithin ninety days P 'his is not guaranteed L It cannot be said that any definite date &as fi(ed for the deli*ery of the goods As to the tan8s% the agreement &as that the deli*ery &as to be made L&ithin 4 or 2 months%L but that period &as subject to the contingencies referred to in a subse:uent clause Fith regard to the e(pellers% the contract says L&ithin the month of September% "0"#%L but to this is added Lor as soon as possible L And &ith reference to the motors% the contract contains this e(pression% LAppro(imate deli*ery &ithin ninety days%L but right after this% it is noted that Lthis is not guaranteed L 'he oral e*idence falls short of fi(ing such period Mrom the record it appears that these contracts &ere e(ecuted at the time of the &orld &ar Fhen the time of deli*ery is not fi(ed or is stated in general or indefinite terms% time is not of the essence of the contract Deli*ery must be made &ithin reasonable time Plaintiff is considered performed his obligation and defendant must pay the price for the machinery Patente *ersus >mega I ""#$ J ""01 'his is to ac8no&ledge receipt of the sum of >ne 'housand Si( =undred Pesos GP"%7$$H from Salud Patente% Milipino citiBen% of age% single% also a resident of .illaba% -eyte% li8e myself% as my indebtedness to her I am going to pay debt to her% her heirs% assigns and successors% in the said sum of P"%7$$ in Philippine currency% as soon as possible or as soon as I ha*e money 'he plaintiff intended to grant the defendant a period &ithin &hich to pay his debts As the promissory notes do not fi( this period% it is for the court to fi( the same MACDA ENA ESTATE VS. MERICD 1191 <agdalena ,state% Inc sold to -ouis <yric8 lots In pursuance of said agreement% the *endee made se*eral payments amounting to P!%307 $#% the last being due and unpaid &as that of <ay !% "04$ Cy reason of this% the *endor% through its president% notified the *endee that% in *ie& of his inability to comply &ith the terms of their contract% said agreement had been cancelled% relie*ing him of any further obligation thereunder% and that all amounts paid by him had been forfeited in fa*or of the *endor and recei*ed no reply

'he contract of sale% contract SJ-740% contains no pro*ision authoriBing the *endor% in the e*ent of failure of the *endee to continue in the payment of the stipulated monthly installments% to retain the amounts paid to him on account of the purchase price 'he claim% therefore% of the petitioner that it has the right to forfeit said sums in its fa*or is untenable 6nder article ""0" of the Ci*il Code% ho&e*er% he may choose bet&een demanding the fulfillment of the contract or its resolution 'hese remedies are alternati*e and not cumulati*e% and the petitioner in this case% ha*ing to cancel the contract% cannot a*ail himself of the other remedy of e(acting performance U@C v*#s+s CA 1191. 1889. 1888. 1881 Mrancisco filed &ith the Court of Mirst Instance of <anila% against% the 6ni*ersal Mood Corporation% an action for rescission of a contract entitled LCill of Assignment L 'he plaintiffs prayed the court to adjudge the defendant as &ithout any right to the use of the <afran trademar8 and formula% and order the latter to restore to them the said right of user@ to order the defendant to pay <agdalo . Mrancisco% Sr his unpaid salary from December "% "07$% as &ell as damages in the sum of P2$%$$$% and to pay the costs of suit 'he Cill of Assignment does in*ol*es transfer of the use of <afran sauce and not the formula itself Petitioners contention that <agdalo Mranciscos petition for rescission should be denied because under Article "4#4 of the Ci*il Code of the Philippines rescission can not be demanded e(cept &hen the party suffering damage has no other legal means to obtain reparation% &as of no merit because Dit is predicated on a failure to distinguish bet&een a rescission for breach of contract under Article ""0" of the Ci*il Code and a rescission by reason of lesion or economic prejudice% under Article "4#" E 'his &as a case of reciprocal obligation Article ""0" may be scanned &ithout disclosing any&here that the action for rescission thereunder &as subordinated to anything other than the culpable breach of his obligations by the defendant =ence% the reparation of damages for the breach &as purely secondary Simply put% unli8e Art "4#4% Art ""0" allo&s both the rescission and the payment for damages Rescission is not gi*en to the party as a last resort% hence% it is not subsidiary in nature 'he operation of "4#4 and "4#2 is limited to the cases of rescission for lesion enumerated in Article "4#" of the Ci*il Code of the Philippines% and does not% apply to cases under Article ""0" 'he po&er to rescind obligations is implied in reciprocal ones ( ( ( 'he injured party may choose bet&een fulfillment and rescission of the obligation% &ith payment of damages in either case GArts ""0"% "4#3% "4##H 'he general rule is that rescission of a contract &ill not be permitted for a slight or casual breach% but only for such substantial and fundamental breach as &ould defeat the *ery object of the parties in ma8ing the agreement R"-*#" v*#s+s CA 1191. 19<9 Mlores and his &ife offered a parcel of land to Romero Mlores called on petitioner &ith a proposal that should he ad*ance the amount of P3$%$$$ $$ &hich could be used in ta8ing up an ejectment case against the s:uatters% pri*ate respondent &ould agree to sell the property for only P#$$?s:uare meter Romero agreed -ater% a DDeed of Conditional SaleE &as e(ecuted bet&een Mlores and >ngsiong Purchase price Q P"%37"%7$$ $$@ Do&npayment Q P3$R@ Calance Q to be paid 23 days after the remo*al of all the s:uatters@ upon full payment% >ngsiong shall e(ecute deed of absolute sale in fa*our of Romero >ngsiong sought to return the P3$%$$$ $$ she recei*ed from petitioner since% she said% she could not Dget rid of the s:uattersE on the lot She opted to rescind the sale in *ie& of her failure to get rid of the s:uatters Regional 'rial Court of <a8ati rendered decision holding that pri*ate respondent had no right to rescind the contract since it &as she &ho D*iolated her obligation to eject the s:uatters from the subject propertyE and that petitioner% being the injured party% &as the party &ho could% under Article ""0" of the Ci*il Code% rescind the agreement Pri*ate respondentAs failure Lto remo*e the s:uatters from the propertyL &ithin the stipulated period gi*es petitioner the right to either refuse to proceed &ith the agreement or &ai*e that condition in consonance &ith Article "323 of the Ci*il Code 'his option clearly belongs to petitioner and not to pri*ate respondent Pri*ate respondentAs action for rescission is not &arranted She is not the injured party 'he right of resolution of a party to an obligation under Article ""0" of the Ci*il Code is predicated on a breach of faith by the other party that *iolates the reciprocity bet&een them It is pri*ate respondent &ho has failed in her obligation under the contract Petitioner did not breach the agreement 6P *ersus De los Angeles - ""0" 6P and A-6<C> entered into a logging agreement &hereby the latter &as granted e(clusi*e authority to cut% collect and remo*e timber from the -and +rant for a period starting from the date of agreement to December 4"% "073% e(tendible for a period of 3 years by mutual agreement A-6<C> continued its logging operations% but again incurred an unpaid account >n July "0%"073% 6P informed A-6<C> that it had% as of that date% considered rescinded and of no further legal effect the logging agreement% and that 6P had already ta8en steps to ha*e another concessionaire ta8e o*er the logging operation A-6<C> filed a petition to enjoin 6P from conducting the bidding 'he lo&er court ruled in fa*or of A-6<C>% hence% this appeal Petitioner 6P can treat its contract &ith A-6<C> rescinded% and may disregard the same before any judicial pronouncement to that effect 6P and A-6<C> had e(pressly stipulated that upon default by the debtor% 6P has the right and the po&er to consider the -ogging Agreement of December !% "07$ as rescinded &ithout the necessity of any judicial suit As to such special stipulation and in connection &ith Article ""0" of the Ci*il Code% the Supreme Court% stated in Mroilan *s Pan >riental Shipping CoK D'here is nothing in the la& that prohibits the parties from entering into agreement that *iolation of the terms of the contract &ould cause cancellation thereof% e*en &ithout court inter*ention In other &ords% it is not al&ays necessary for the injured party to resort to court for rescission of the contract E If the other party denies that rescission is justified% it is free to resort to judicial action in its o&n behalf% and bring the matter to court 'hen% should the court% after due hearing% decide that the resolution of the contract &as not &arranted% the responsible party &ill be sentenced to damages@ in the contrary case% the resolution &ill be affirmed% and the conse:uent indemnity a&arded to the party prejudiced AESON-SIMON VS. ADAMOS AND @ERIA 1191 During the pendency of the annulment of sale% defendants sold the said t&o lots to Petitioner +enerosa Ayson-Simon for Php4%#$$ $$ plus Php #$$ $$ for facilitating the issuance of the ne& titles in fa*or of petitioner Due to the failure of the defendants to deli*er the said lots% petitioner filed a ci*il case for specific performance Defendants could not deli*er the said lots because the CA had already annulled the sale of the t&o lots in Ci*il case )o "12 'hus% petitioner filed another ci*il case for the rescission of the contract 'he rule that the injured party can only choose bet&een fulfillment and rescission of the obligation% and cannot ha*e both% applies &hen the obligation is possible of fulfillment If% as in this case% the fulfillment has become impossible% Article ""0" allo&s the injured party to see8 rescission e*en after he has chosen fulfillment 'he cause of action to claim rescission arises &hen the fulfillment of the obligation became impossible &hen the Court declared the sale of the land to defendants by Juan Porciuncula% a complete nullity and ordered the cancellation Plaintiff had to &ait for the finality of the decision 'he action for rescission must be commenced &ithin four years from that date% <ay 4% "071 Since the complaint for rescission &as filed on August "7% "07#% the four year period &ithin &hich the action must be commenced had not e(pired ,-,I/,+6I .S <A)I-A -AF) ',))IS C-6C I "3#"% "370 'his suit concerns the lease of a piece of land for a fi(ed consideration and to endure at the &ill of the lessee Cy the contract of lease the lessee is e(pressly authoriBed to ma8e impro*ements upon the land% by erecting buildings of both permanent and temporary character% by ma8ing fills% laying pipes% and ma8ing such other impro*ements as might be considered desirable for the comfort and amusement of the members 'here &as a con*entional term% a duration% agreed upon in the contract in :uestion 'he judgment &as entered belo& upon the theory of

the e(piration of a legal term &hich does not e(ist% as the case re:uires that a term be fi(ed by the courts under the pro*isions of article ""!# &ith respect to obligations &hich% as is the present% are terminable at the &ill of the oblige H In e*ery contract% as laid do&n by the authorities% there is al&ays a creditor &ho is entitled to demand the performance% and a debtor upon &hom rests the obligation to perform the underta8ing In bilateral contracts the contracting parties are mutually creditors and debtors 'hus% in this contract of lease% the lessee is the creditor &ith respect to the rights enumerated in article "332% and is the debtor &ith respect to the obligations imposed by articles "333 and "37" 'he term &ithin &hich performance of the latter obligation is due is &hat has been left to the &ill of the debtor 'his term it is &hich must be fi(ed by the courts SINCSON ENCARNACION VS. BA DOMAR - 1296 .icente Singson ,ncarnacion leased his house to Jacinta Caldomar and her son% -efrando Mernando upon a month-to-month basis After <anila &as liberated in the last &ar% Singson ,ncarnacio notified Caldomar and her son Mernando to *acate the house because he needed it for his office as a result of the destruction of the building &here he had his office before Despite the demand% the Caldomar and Mernando continued their occupancy 'he defense thus set up by defendant -efrado Mernando &ould lea*e to the sole and e(clusi*e &ill of one of the contracting parties Gdefendants in this caseH the *alidity and fulfillment of the contract of lease% &ithin the meaning of article "!37 of the Ci*il Code% since the continuance and fulfillment of the contract &ould then depend solely and e(clusi*ely upon their free and uncontrolled choice bet&een continuing paying the rentals or not% completely depri*ing the o&ner of all say in the matter If this defense &ere to be allo&ed% so long as defendants elected to continue the lease by continuing the payment of the rentals% the o&ner &ould ne*er be able to discontinue it@ con*ersely% although the o&ner should desire the lease to continue% the lessees could effecti*ely th&art his purpose if they should prefer to terminate the contract by the simple e(pedient of stopping payment of the rentals 'his% of course% is prohibited by the aforesaid article of the Ci*il Code In support of the claim of &ant of mutuality% the lessees argued that they could occupy the premises as long as they paid the rent 'his is of course untenable% for as this Court said% LIf this defense &ere to be allo&ed% so long as defendants elected to continue the lease by continuing the payment of the rentals% the o&ner &ould ne*er be able to discontinue it@ con*ersely% although the o&ner should desire the lease to continue the lessees could effecti*ely th&art his purpose if they should prefer to terminate the contract by the simple e(pedient of stopping payment of the rentals L PAI IPPINE BANDINC CORPORATION VS. UI SAE "4$# LIn grateful ac8no&ledgment of the personal ser*ices of the -essee to her sister &ho has died% Justina Santos e(ecuted a contract of lease in fa*or of Fong for 3$ years% although the lessee &as gi*en the right to &ithdra& at any time from the agreement@ she e(ecuted another contract gi*ing Fong the option to buy the leased premises% conditioned on his obtaining Philippine citiBenship She e(ecuted t&o other contracts% one e(tending the term of the lease to 00 years% and another fi(ing the term of the option at 3$ years Coth parties ho&e*er died Fong &as substituted by his &ife% -ui She% &hile Justina Santos &as substituted by the Philippine Can8ing Corporation Justina Santos maintained P no& reiterated by the Philippine Can8ing Corporation P that the lease contract should ha*e been annulled along &ith the four other contracts because it lac8s mutuality 'he insertion in the contract of a resolutory condition% permitting the cancellation of the contract by one of the parties is *alid 'he right of the lessee to continue the lease or to terminate it is so circumscribed by the term of the contract that it cannot be said that the continuance of the lease depends upon his &ill At any rate% e*en if no term had been fi(ed in the agreement% this case &ould at most justify the fi(ing of a period but not the annulment of the contract Article "4$# of the Ci*il Code in our opinion creates no impediment to the insertion in a contract for personal ser*ice of a resolutory condition permitting the cancellation of the contract by one of the parties Such a stipulation% as can be readily seen% does not ma8e either the *alidity or the fulfillment of the contract dependent upon the &ill of the party to &hom is conceded the pri*ilege of cancellation@ for &here the contracting parties ha*e agreed that such option shall e(ist% the e(ercise of the option is as much in the fulfillment of the contract as any other act &hich may ha*e been the subject of agreement Indeed% the cancellation of a contract in accordance &ith conditions agreed upon beforehand is fulfillment >ng *s Century I ""00% "!$"% ""44 'he Court of Mirst Instance of Iloilo rendered a judgment in fa*or of the plaintiff% sentencing the defendant company to pay him the sum of P23%$$$% the *alue of certain policies of fire insurance% &ith legal interest thereon from Mebruary !#% "0!4% until payment% &ith the costs 'he defendant company appealed from this judgment% and no& insists that the same must be modified and that it must be permitted to rebuild the house burnt% subject to the alignment of the street &here the building &as erected% and that the appellant be relie*ed from the payment of the sum in &hich said building &as insured 'he appellant contends that under clause "2 of the conditions of the policies% it may rebuild the house burnt% and although the house may be smaller% yet it &ould be sufficient indemnity to the insured for the actual loss suffered by him It must be noted that in alternati*e obligations% the debtor% the insurance company in this case% must notify the creditor of his election% stating &hich of the t&o prestations he is disposed to fulfill% in accordance &ith article ""44 of the Ci*il Code 'he object of this notice is to gi*e the creditor% that is% the plaintiff in the instant case% opportunity to e(press his consent% or to impugn the election made by the debtor% and only after said notice shall the election ta8e legal effect &hen consented by the creditor% or if impugned by the latter% &hen declared proper by a competent court 'he record sho&s that the appellant company did not gi*e a formal notice of its election to rebuild and the plaintiff did not gi*e his assent to the proposition% for the reason that the ne& house &ould be smaller and of materials of lo&er 8ind than those employed in the construction of the house destroyed 6pon this point the trial judge *ery aptly says in his decisionK LIt &ould be an imposition une:uitable% as &ell as unjust% to compel the plaintiff to accept the rebuilding of a smaller house than the one burnt% &ith a lo&er 8ind of materials than those of said house% &ithout offering him an additional indemnity for the difference in siBe bet&een the t&o house% &hich circumstances &ere ta8en into account &hen the insurance applied for by the plaintiff &as accepted by the defendant L And &e may addK Fithout tendering either the insured *alue of the merchandise contained in the house destroyed% &hich amounts to the sum of P"3%$$$ IMPERIA INSURANCE INC. VS. DAVID 1207 Melicisimo . Reyes and his &ife% appellant% e(ecuted t&o G!H indemnity agreements in fa*or of appellee jointly and se*erally to assure indemnification of the latter for &hate*er liability it may incur in connection &ith its posting the security bonds to lift the attachments in Ci*il Case 'hey also jointly and se*erally% e(ecuted another indemnity agreement in fa*or of appellee to assure indemnification of the latter under a homestead bond for the sum of P1%3$$ $$ it had e(ecuted jointly and se*erally &ith them in fa*or of the De*elopment Can8 of the Philippines Judgment &as rendered against spouses and appellee made demands on ,milia ' Da*id to pay the amounts under the surety bonds and arrears in premiums Fhen appellant Da*id failed to ma8e payments% appellee filed Ci*il Case for collection of sums of money 6nder the la& and &ell settled jurisprudence% &hen the obligation is a solidary one% the creditor may bring his action in toto against any of the debtors obligated in solidum 'hus% if husband and &ife bound themsel*es jointly and se*erally% in case of his death her liability is independent of and separate from her husband s@ she may be sued for the &hole debt and it &ould be error to hold that the claim against her as &ell as the claim against her husband should be made in the decedentAs estate Appellant signed a joint and se*eral obligation &ith her husband in fa*or of herein appellee@ as a conse:uence% the latter may demand from either of them the &hole obligation As distinguished from a joint obligation

&here each of the debtor is liable only for a proportionate part of the debt and the creditor is entitled only to a proportionate part of the credit% in a solidary obligation the creditor may enforce the entire obligation against one of the debtors Fhere the obligation assumed by se*eral persons is joint and se*eral% each of the debtors is ans&erable for the &hole obligation &ith the right to see8 contribution from his co-debtors SONCCUAN VS. INTERMEDIATE APPE ATE COURT 1191. 1606 Al*iars sold land &ith building realties to Saturnino Songcuan 'hey further agreed that the Al*iars &ill ha*e the right of redemption &ithin "$ years from the date of signing of the instrument% and further stipulated in P S that in the e*ent of repurchase by the Al*iars% Songcuan shall ha*e the right of lease for a period of !3 years for the premises actually occupied by Songcuan 'he building &as raBed by fire and Songcuan erected another at his o&n e(pense Fhen the Al*iars &anted to repurchase% Songcuan refused to sell bac8 to the Al*iars the properties because the latter &as tendering only the price of P42%$!7 $$ &hereas Songcuan &anted reimbursement for the cost of the building he erected and also for the cost of the registration of the realties 'here is no merit in SongcuanAs claim that the Al*iarsA failure to abide by Article "7$7 of the )e& Ci*il Code foreclosed their right to repurchase Indeed% Art "7$7 pro*ides that the *endors-a-retro may repurchase &ithin 4$ days from the finality of the judgment =o&e*er% it is noted that the final decision in Case !7!"% &hich became final on <arch 0% "0#"% ga*e the Al*iars t&o alternati*e periods &ithin &hich to e(ercise the right to repurchase either &ithin 4$ days as prescribed in Article "7$7% or &ithin " year% "$ months and "# days from <arch 0% "0#"% Accordingly% &hiche*er of the alternati*e periods the Al*iars may a*ail of% &ould still constitute a *alid e(ercise of their right )either do &e agree that the right of the Al*iars to repurchase may be rescinded under Article ""0" of the Ci*il Code Although the parties are each obligor and obligee of the other% their corresponding obligation can hardly be called reciprocal In reciprocal obligations the obligation of one is a resolutory condition of the obligation of the other% the non-fulfillment of &hich entitles the other party to rescind the contract In the case at bar% there are t&o separate and distinct obligations% each independent of the other In other &ords% the obligation of the Al*iars to lease to Songcuan the subject premises arises only after the latter had recon*eyed the realties to them Should the Al*iars fail to lease the subject premises to Songcuan after recon*eyance% then the latterAs remedy is not for rescission but for specific performance CORONE VS. CA 1<79 & 1181 #*12(* (" 1809. 1<98. 1<79. 19<< Ramona AlcatraB and Romulo Coronel had an agreement for a sale of land &orth " !2 million Ramona ga*e a do&npayment of 3$8 &ith the condition that upon receipt of the do&npayment% the Coronels &ould cause the transfer of Ramonas name o*er the 'C' of the land 'he title of the land &as in the name of Romulos father Murthermore% upon transfer of Ramonas name% the Coronels &ould e(ecute a deed of absolute sale in fa*or of Ramona% and that Ramona &ould pay the remaining balance of " 0 million 'he Coronels did transfer Ramonas name upon receipt of the do&npayment but the Coronels later sold the land to Catalina <abanag for the price of " 3 million 'he Coronels then rescinded the earlier contract of sale Ramona filed specific performance against Coronel and caused the annotation of lis pendens at the bac8 of 'C' Article "213% in correlation &ith Article ""#"% both of the Ci*il Code% plainly applies to the case at bench Since the condition contemplated by the parties &hich is the issuance of a certificate of title in petitionersA names &as fulfilled on Mebruary 7% "0#3% the respecti*e obligations of the parties under the contract of sale became mutually demandable% that is% petitioners% as sellers% &ere obliged to present the transfer certificate of title already in their names to pri*ate respondent Ramona P AlcaraB% the buyer% and to immediately e(ecute the deed of absolute sale% &hile the buyer on her part% &as obliged to forth&ith pay the balance of the purchase price amounting to P"%"0$%$$$ $$ 'he Court may safely presume that% had the certificate of title been in the names of petitioners-sellers at that time% there &ould ha*e been no reason &hy an absolute contract of sale could not ha*e been e(ecuted and consummated right there and then <oreo*er% unli8e in a contract to sell% petitioners in the case at bar did not merely promise to sell the properly to pri*ate respondent upon the fulfillment of the suspensi*e condition 'he parties did not merely enter into a contract to sell &here the sellers% after compliance by the buyer &ith certain terms and conditions% promised to sell the property to the latter Fhat may be percei*ed from the respecti*e underta8ings of the parties to the contract is that petitioners had already agreed to sell the house and lot they inherited from their father% completely &illing to transfer full o&nership of the subject house and lot to the buyer if the documents &ere then in order Fhen the said LReceipt of Do&n PaymentL &as prepared and signed by petitioners Romeo A Coronel% et al % the parties had agreed to a conditional contract of sale% consummation of &hich is subject only to the successful transfer of the certificate of title from the name of petitionersA father% Constancio P Coronel% to their names 'he sale to the other petitioner% Catalina C <abanag% ga*e rise to a case of double sale &here Article "322 of the Ci*il Code &ill apply FAVIER VS. CA -18<6 & 1<61 Pri*ate respondent -eonardo 'iro e(ecuted a LDeed of AssignmentL in fa*or of petitioners Jose < Ja*ier and ,strella M Ja*ier to assign% transfer and con*ey his shares of stoc8s in 'imber&ealth Corporation in consideration of the sum of Php"!$%$$$ $$ in &hich the Php!$%$$$ $$ shall be paid upon signing of the said contract and the balance of Php"$$%$$$ $$ shall be paid in Php"$%$$$ $$ for e*ery shipment of e(port log actually actually produced from the forest concession At the time the said deed of assignment &as e(ecuted% pri*ate respondent had pending application for an additional !%$$$ hectares of forest concession =ence% pri*ate respondent made another agreement on Mebruary !#% "077 &ith petitioners that in the e*ent that his application &ill be appro*ed% his rights to the additional forest concession shall be transferred to petitioners in consideration of the sum of Php4$%$$$ $$ >n )o*ember "#% "077% pri*ate respondent &as informed that his forest concession &as rene&ed but since the area is only !%343 hectares% he &as ordered to form an organiBation &ith adjoining licensees so as to ha*e a total holding area of !$%$$$ hectares% other&ise% his license &ill not be rene&ed Conse:uently% petitioners% no& acting as timber license holders by *irtue of the deed of assignment e(ecuted by pri*ate respondent in their fa*or% entered into a Morest Consolidation Agreement Pri*ate respondent filed a ci*il case for the failure of petitioners to pay the balance of the t&o deeds of assignment In petitioners ans&er% they contend that pri*ate respondent failed his contractual obligations and the conditions for the enforceability of the obligations did not materialiBe Pri*ate respondent% then% replied that the deed of assignment did not only transfer his shares of stoc8s but his rights and interest in the logging concession 'hereafter% the trial court rendered judgment for the petitioners@ ho&e*er% on appeal to the Court of Appeals% the trial courts decision &as re*ersed 'he deed of assignment dated Mebruary "3% "077 is *alid 'he true cause or consideration of said deed &as the transfer of the forest concession of pri*ate respondent to petitioners for P"!$%$$$ $$ 'he deed of assignment of Mebruary "3% "077 is a relati*ely simulated contract &hich states a false cause or consideration% or one &here the parties conceal their true agreement A contract &ith a false consideration is not null and *oid per se 6nder Article "427 of the Ci*il Code% a relati*ely simulated contract% &hen it does not prejudice a third person and is not intended for any purpose contrary to la&% morals% good customs% public order or public policy binds the parties to their real agreement As to the alleged nullity of the agreement dated Mebruary !#% "077% &e agree &ith petitioners that they cannot be held liable thereon 'he efficacy of said deed of assignment is subject to the condition that the application of pri*ate respondent for an additional area for forest concession be appro*ed by the Cureau of Morestry Since pri*ate respondent did not obtain that appro*al% said deed produces no effect Fhen a contract is subject to a suspensi*e condition% its birth or effecti*ity can ta8e place only if and &hen the e*ent &hich constitutes the condition happens or is fulfilled If the suspensi*e condition does not ta8e place% the parties &ould stand as if the conditional obligation had ne*er e(isted In this case% the failure of pri*ate respondent to comply &ith his obligation negates his right to demand performance from petitioners <oreo*er% under the second paragraph of Article "27" of the Ci*il Code% the efficacy of the sale of a mere hope or e(pectancy is deemed subject to the condition that the thing &ill come into e(istence In this case% since

pri*ate respondent ne*er ac:uired any right o*er the additional area for failure to secure the appro*al of the Cureau of Morestry% the agreement e(ecuted therefore% &hich had for its object the transfer of said right to petitioners% ne*er became effecti*e or enforceable TAEAC VS. CA 1186. 1191 Pri*ate respondent% in her capacity as mother and legal guardian of minor Chad D Cuyugan% filed a complaint denominated LClaim for InheritanceL against herein petitioner as the administratri( of the estate of the late Atty Ricardo >campo Plaintiff thereafter prays% that judgment be rendered ordering defendant to render an in*entory and accounting of the real and personal properties left by Atty Ricardo >campo@ to determine and deli*er the share of the minor child Chad in the estate of the deceased@ and to gi*e him support pendente lite Petitioner filed her ans&er % that the complaint states no cause of action@ that the action is premature@ that the suit as barred by prescription@ that respondent Cuyugan has no legal and judicial personality to bring the suit@ that the lo&er court &as no jurisdiction o*er the nature of the action@ and that there is improper joinder of causes of action Resort to the t&o causes of action% one to compel recognition and the other to claim inheritance% may be joined in one complaint 'he trial court is therefore% correct in applying the pro*isions of Article !#3 of the Ci*il Code and in holding that pri*ate respondentAs cause of action has not yet prescribed 'he heirs of Juan +alicia brought an action for breach of the conditions on the deed of con*eyance e(ecuted by Juan +alicia in fa*or of pri*ate respondent% Albrigido -ey*aunder the follo&ing termsK P4%$$$ $$ is =,R,CO ac8no&ledged to ha*e been paid upon the e(ecution of this agreement@ P"$%$$$ $$ shall be paid &ithin ten days from and after the e(ecution of this agreement@ P"$%$$$ $$ represents the .,)D>RSA indebtedness &ith the Philippine .eterans Can8 &hich is hereby assumed by the .,)D,,@ and P!1%$$$ $$ shall be paid &ithin one year from and after the e(ecution of this instrument 'here is no dispute that the sum of P4%$$$ $$ listed as first installment &as recei*ed by Juan +alicia% Sr According to petitioners% of the P"$%$$$ $$ to be paid &ithin ten days from e(ecution of the instrument% only P0%1$1 $$ &as tendered to% and recei*ed by% them on numerous occasions from <ay !0% "013% up to )o*ember 4% "010 Concerning pri*ate respondentAs assumption of the *endorsA obligation to the Philippine .eterans Can8% the *endee paid only the sum of P7%0!7 2" &hile the difference the indebtedness came from Celerina -abuguin Petitioners asserted that the P!1%$$$ $$ &as not paid to them Cecause of the apprehension that the heirs of Juan +alicia% Sr are disa*o&ing the contract in8ed by their predecessor% pri*ate respondent filed the complaint for specific performance 'he trial court upheld pri*ate respondentAs theory on the basis of constructi*e fulfillment under Article ""#7 and estoppel through acceptance of piecemeal payments in line &ith Article "!43 of the Ci*il Code Anent the P"$%$$$ $$ specified as second installment% the lo&er court counted against the *endors the candid statement of Josefina 'ayag &ho and made the admission that the chec8 issued as payment thereof &as nonetheless paid on a staggered basis &hen the chec8 &as dishonored Regarding the third condition% the trial court noted that plaintiff belo& paid more than P7%$$$ $$ to the Philippine .eterans Can8 but Celerina -abuguin% the sister and co-*endor of Juan +alicia% Sr paid P4%11# 11 &hich circumstance &as construed to be a ploy under Article ""#7 Lfor the purpose of &ithdra&ing the title to the lotL 'he acceptance by petitioners of the *arious payments e*en beyond the periods agreed upon% &as percei*ed by the lo&er court as tantamount to faithful performance of the obligation pursuant to Article "!43 of the Ci*il Code Murthermore% the trial court noted that pri*ate respondent consigned P"#%3!$ $$% an amount sufficient to offset the remaining balance% lea*ing the sum of P"%4"3 $$ to be credited to pri*ate respondent ISS6,K Fere the conditions of the instrument performed by pri*ate respondent as *endeeS R6-I)+K O,S 'here is no doubt that the second installment &as actually paid to the heirs of Juan +alicia% Sr due to Josefina 'ayagAs admission in judicio that the sum of P"$%$$$ $$ &as fully li:uidated It is thus erroneous for petitioners to suppose that Lthe e*idence in the records do not support this conclusionL Insofar as the third item of the contract is concerned% it may be recalled that respondent court applied Article ""#7 of the Ci*il Code on constructi*e fulfillment &hich petitioners claim should not ha*e been appreciated because they are the obligees &hile the proviso in point spea8s of the obligor Cut% petitioners must concede that in a reciprocal obligation li8e a contract of purchase% both parties are mutually obligors and also obliges% and any of the contracting parties may% upon non-fulfillment by the other pri*y of his part of the prestation% rescind the contract or see8 fulfillment G Article 1191% Ci*il CodeH In short% it is puerile for petitioners to say that they are the only obligees under the contract since they are also bound as obligors to respect the stipulation in permitting pri*ate respondent to assume the loan &ith the Philippine .eterans Can8 &hich petitioners impeded &hen they paid the balance of said loan As *endors% they are supposed to e(ecute the final deed of sale upon full payment of the balance as determined hereafter FACINTO VS. DAPARAZ 1191. 1192. 1992 Petitioners and pri*ate respondents entered into an agreement under &hich the pri*ate respondents agreed to sell and con*ey to petitioners a portion consisting of 7$$ s:uare meters of a lot located in Da*ao >riental for a total amount of P"%#$$ $$ &ith a do&npayment of P#$$ $$ upon e(ecution of the Agreement 'he balance of P"%$$$ $$ &as to be paid by petitioners on installment at the rate of P"$$ $$ a month to the De*elopment Can8 of the Philippines to be applied to pri*ate respondentsA loan accounts 6pon the e(ecution of the agreement% petitioners paid the do&npayment of P#$$ $$ and &ere placed in possession of the portion described therein As to the P"%$$$ $$ &hich &as to be paid directly to the DCP% petitioners claim that they had e*en made an e(cess payment of P"$$ $$ In *ie& of the refusal of pri*ate respondents to e(ecute the deed of sale% petitioners filed against them a complaint for specific performance &ith the Court of Mirst Instance Pri*ate respondents alleged that the sale did not materialiBe because of the failure of petitioners to fulfill their promise to ma8e timely payments on the stipulated price to the DCP% the last t&o payments &ere applied to another account%@ as a result of such failure% they Gpri*ate respondentsH failed to secure the release of the mortgage on the property 'hey then prayed for the dismissal of the case and a declaration that the agreement is null and *oid 'he agreement in the instant case has all the earmar8s of a contract of sale 'he possession of the portion sold &as immediately deli*ered to the petitioners 'hey &ere granted the right to enjoy all the impro*ements therein effecti*e from the date of the e(ecution of the agreement 'here is no stipulation gi*ing the pri*ate respondents the right to unilaterally rescind the contract the moment the *endee fails to pay &ithin a fi(ed period In reality% the agreement &as an absolute sale &hich allo&ed the petitioners to pay the remaining balance of the purchase price in installment Iin a contract of sale% the remedy of an unpaid seller is either specific performance or rescission 'he latter% &ith respect to the sale of immo*ables% is specifically go*erned by Article "30! of the Ci*il Code In the case at bar% there &as non-compliance &ith the re:uirements prescribed in these pro*isions It is not contro*erted that pri*ate respondents had neither filed an action for specific performance nor demanded the rescission of the agreement either judicially or by a notarial act before the filing of the complaint in Ci*il Case )o 3#7 'he claim that the account to &hich it &as applied &as not the account stipulated in the agreement is &ithout merit In the first place% the agreement fails to disclose an e(press agreement that the monthly amortiBations on the P"%$$$ $$ unpaid balance of the purchase price to be made to the DCP should be applied e(clusi*ely to the agricultural loan indicated in the exordium of the agreement A mere casual breach does not justify rescission -ichauco *s Migueras =ermanos I ""#" Action to reco*er the hire for t&o lorchascalle the Chata and the olin for the month of August% "0$3 'he defendants admitted their responsibility for the rental of these lorchas for the days of that month upon &hich they &ere actual use P that is% for t&enty-three and t&enty-se*en

days% respecti*ely P and on demand made formal tender of the amount of the rental claimed for those days@ but they deny their responsibility for those days of the month during &hich they did not ma8e use oflorchas and left them at the disposal of the plaintiff In conditional obligations% the ac:uisition of rights% as &ell as the e(tinction or loss of those already ac:uired% shall depend upon the e*ent constituting the condition GArt """2 of the Ci*il Code H It is said% ho&e*er% that e*en though the obligation of the conditional amendment &as e(tinguished by defendantsA failure to secure the entire lighterage contract or to secure it at the time specified in the condition% ne*ertheless the defendants% by ta8ing and using these lorchas for the purpose of carrying out their contract &ith the :uartermaster &ithout any ne& agreement the obligation &ith the plaintiffs% impliedly and tacitly assumed the obligation of the original contract together &ith the amendment% so that their use of the lorcha &as subject to its terms 'he original obligation Gas pro*ided by their rejected contractH &as not e(tinguished and the defendants are not re:uired to pay their part of the obligation 'he amendment to the contract bet&een the plaintiff and defendant &as e(pressly conditioned on defendantsA being the successful bidders at the letting of <ay !% "0$3% and it cannot be doubted that the amendment became of no force or effect &hen the result of the letting &as announced% for it is manifest that thereafter neither party could base a claim against the other on a failure to e(ecute its terms% unless it &as gi*en ne& life by a ne& agreement% either e(press or implied <oreo*er% there is nothing in the contract bet&een the parties to indicate that either one had in mind the di*ision of the lighterage contract and indeed the language of the entire amendment suggests that both parties had in contemplation no other thing that the complete success or the complete failure of defendants to secure the lighterage contract &ith the +o*ernment DUCUSIN VS. CA 1182. 1808 Agapito Ducusin leased to pri*ate respondent% .irgilio S Caliola married to -ilia Caliola a one-door apartment% the term of this contract shall be in a month to month basis commencing on !ebruary 19"19#$ until terminated by the lessor on the ground that his children need the premises for their own use or residence or upon any ground provided for in accordance with law. %etitioner Ducusin sent a L)otice to 'erminate -ease ContractL to pri*ate respondents Caliolas terminating the lease and gi*ing them until <arch "3% "011 &ithin &hich to *acate the premises for the reason that his t&o children &ere getting married and &ill need the apartment for their o&n use and residence Respondents made no reply to the L)otice to 'erminate -ease ContractL 'he complaint for e*iction further alleged that the lessees ha*e *iolated the terms of the contract by subleasing the premises@ that the lessees ha*e not used the premises solely for residential purposes but ha*e used the same as factory and?or manufacturing premises for their commercial goods@ and that they ha*e neglected to underta8e repairs of the apartment and the premises according to their agreement 'here is% therefore% no factual and legal basis for the respondent courtAs decision dismissing the complaint for ejectment and re*ersing the findings of facts of both the City Court of <anila% Cranch 9.I% and the Court of Mirst Instance of <anila% Cranch 9.I Fe li8e&ise conclude that the intention to use the leased premises as the residence of Ducusin Jr has been satisfactorily and sufficiently pro*ed by clear% strong% and substantial e*idence found in the records of the case D'he resolutory condition in the contract of lease reK the need of the lessorAs children of the leased premises is not a condition the happening of &hich is dependent solely upon the &ill of the lessor 'he happening of the condition depends upon the &ill of a third person the lessorAs children Fhene*er the latter re:uire the use of the leased premises for their o&n needs% then the contract of lease shall be deemed terminated 'he *alidity of the said condition as agreed upon by the parties stands Fe li8e&ise conclude that the intention to use the leased premises as the residence of Ducusin Jr has been satisfactorily and sufficiently pro*ed by clear% strong% and substantial e*idence found in the records of the case RUSTAN PU P & PAPER MI S. INC. VS. IAC 1267. 1806 A contract of sale &hereby Romeo A -luch agreed to sell% and Rustan Pulp and Paper <ill% Inc undertoo8 to pay the price of P4$ $$ per cubic meter of pulp &ood ra& materials 'he contract to supply is not e(clusi*e because Rustan shall ha*e the option to buy from other suppliers &ho are :ualified and holder of appropriate go*ernment authority or license to sell and dispose pulp &ood During the test run of the pulp mill% the machinery line had major defects &hile deli*eries of the ra& materials piled up% &hich prompted the Japanese supplier of the machinery to recommend the stoppage of the deli*eries 'he suppliers &ere informed to stop deli*eries and the letter of similar ad*ice sent by petitioners to pri*ate respondents Pri*ate respondent Romeo -luch sought to clarify the tenor of the letter as to &hether stoppage of deli*ery or termination of the contract of sale &as intended% but the :uery &as not ans&ered by petitioners 'he right of stoppage e(ercised by Rustan pulp is indicati*e of a breach of contract Petitioners can stop deli*ery of pulp &ood from pri*ate respondents if the supply at the plant is sufficient as ascertained by petitioners% subject to re-deli*ery &hen the need arises as determined li8e&ise by petitioners A purely potestati*e imposition of this character must be obliterated from the face of the contract &ithout affecting the rest of the stipulations considering that the condition relates to the fulfillment of an already e(isting obligation and not to its inception 'here is no doubt that the contract spea8s loudly about petitionersA prerogati*e but &hat diminishes the legal efficacy of such right is the condition attached to it &hich% as aforesaid% is dependent e(clusi*ely on their &ill for &hich reason% Fe ha*e no alternati*e but to treat the contro*ersial stipulation as inoperati*e GArticle "4$7% )e& Ci*il CodeH It is for this same reason that Fe are not inclined to follo& the interpretation of petitioners that the suspension of deli*ery &as merely temporary since the nature of the suspension itself is again conditioned upon petitionerAs determination of the sufficiency of supplies at the plant 'he President and <anager of a corporation &ho entered into and signed a contract in his official capacity% cannot be made liable in his indi*idual capacity in the absence of stipulation to that effect due to the personality of the corporation being separate and distinct from the person composing it 'his is contemplated by Article "#01 of the )e& Ci*il Code &here agents are directly responsible are absent and &anting >nly petitioner Rustan Pulp and Paper <ills should pay moral damages and attorneys fees =ermosa *s -ogara - ""#! 'his is an appeal by certiorari against a decision appro*ing claims presented by ,pifanio -ongara against the intestate estate of Mernando =ermosa% Sr 'he claims are aH P!% 42" representing credit ad*ances made to the intestate from "04! to "022@ bH P"!% 0!2 "! made to his Mrancisco =ermosa and cH P4% 11! made to his grandson% Mernando =ermosa % Jr 'he claimant presented e*idence that the intestate had as8ed for the said credit ad*ances for himself and for the members of his family Don condition that their payment should be made from he sale of his property in SpainE Claimant had testified &ithout opposition that the credit ad*ances &ere to be Dpayable as soon as Mernando =ermosa% Sr s property in Spain &as sold and he recei*ed money deri*ed from the sale E A careful consideration of the condition upon &hich payment of the sums ad*anced &as made to depend% Las soon as he GintestateH recei*e funds deri*ed from the sale of his property in Spain%L discloses the fact that the condition in :uestion does not depend e(clusi*ely upon the &ill of the debtor% but also upon other circumstances beyond his po&er or control If the condition &ere Lif he decides to sell his house L or Lif he li8es to pay the sums ad*anced%L or any other condition of similar import implying that upon him Gthe debtorH alone payment &ould depend% the condition &ould be protestativa% dependent e(clusi*ely upon his &ill or discretion It is e*ident% therefore sent to the islands It is e*ident% therefore% that the condition of the obligation &as not a purely protestati*e one% depending e(clusi*ely upon the &ill of the intestate% but a mi(ed one% depending partly upon the &ill of intestate and partly upon chance% i e % the presence of a buyer of the property for the price and under the conditions desired by the intestate 'he condition is% besides% a suspensi*e condition% upon the happening of &hich the obligation to pay is made dependent And upon the happening of the condition% the debt became immediately due and demandable G""#"H 'he obligation to furnish support is personal and is e(tinguished upon the death of the person obliged to gi*e support and upon the death of a principal his agentAs authority or authoriBation is deemed terminated 'hat part of the decision allo&ing this group of claims% amounting to P4%11! should be re*ersed >smena *s Rama

Defendant Rama e(ecuted and deli*ered to .ictoriano >sme;a a contract 'he contract stipulates that Rama recei*ed from .ictoriano the sum of P!$$ &hich defendant &ill pay .ictoriano >sme;a in sugar and pay also an interest at a rate of half a cuartillo per month Defendant promise that he &ell sell to <r >sme;a all the sugar that he may har*est and as a guarantee pledge as a security all his present and future property and as special security his house in Pagina Defendant e(ecuted another contract &ith .ictoriano >sme;a as8ing for a loan amounting to P1$% P3$ of &hich defendant loaned to Don Pe;ares% &hich they &ill pay in sugar Sometime after the e(ecution and deli*ery of the abo*e contracts% .ictoriano died In the settlement and di*ision of the property of his estate the abo*e contracts became the property of one of his heirs% Agustina Rafols -ater% Agustina Rafols ceded to the present plaintiff 'omas >sme;a all of her right and interest in said contracts Plaintiff presented the contracts to the defendant for payment and she ac8no&ledged her responsibility upon said contracts by an endorsement &hich stipulatesK >n this date I hereby promise%Tthat if the house of strong materials in &hich I li*e in Pagina is sold% I &ill pay my indebtedness to Don 'omas >sme;a as set forth in this document 'he defendant not ha*ing paid the amount due on said contracts% the plaintiff filed an action before the CMI of Cebu 'he lo&er court rendered judgment in fa*or of the plaintiff for the sum of P!$$ &ith interest Mrom this judgment the defendant appealed 'he endorsement made by defendant Rama for payment of said obligation is not *alid in the ac8no&ledgment abo*e :uoted of the indebtedness made by the defendant% she imposed the condition that she &ould pay the obligation if she sold her house If that statement found in her ac8no&ledgment of the indebtedness should be regarded as a condition% it &as a condition &hich depended upon her e(clusi*e &ill% and is therefore% *oid GArt ""#!% Ci*il Code H 'he ac8no&ledgment% therefore% &as an absolute ac8no&ledgment of the obligation and &as sufficient to pre*ent the statute of limitation from barring the action upon the original contract TRI ANA VS GUEZON CO ECE. INC Damasa Crisostomo subscribed shares of stoc8 of the said college &herein payment &as to be made through money she &as going to generate from fishing =o&e*er% she died and as no payment appears to ha*e been made on the subscription% the UueBon College% Inc presented a claim before the Court of Mirst Instance in her testate proceeding% for the collection of the said sum of money 'he claim &as dismissed by the trial court on the ground that the subscription in :uestion &as neither registered in nor authoriBed by the Securities and ,(change Commission Damasa Crisostomo is not liable for the claim made by UueBon Colleges% Inc Indeed% the need for e(press acceptance on the part of the UueBon College% Inc becomes the more imperati*e% in *ie& of the proposal of Damasa Crisostomo to pay the *alue of the subscription after she has har*ested fish% a condition ob*iously dependent upon her sole &ill and% therefore% facultati*e in nature% rendering the obligation *oid% under article ""#! of the old Ci*il Code &hich pro*ides as follo&sK LIf the fulfillment of the condition should depend upon the e(clusi*e &ill of the debtor% the conditional obligation shall be *oid If it should depend upon chance% or upon the &ill of a third person% the obligation shall produce all its effects in accordance &ith the pro*isions of this code L )aga 'elephone *s CA I "!71 )A',-C> and CAS6R,C> II entered into a contract for the use by petitioners in the operation of its telephone ser*ice the electric light posts of pri*ate respondent in )aga City In consideration therefore% petitioners agreed to install% free of charge% ten G"$H telephone connections for the use by pri*ate respondent After the contract had been enforced for o*er ten G"$H years% pri*ate respondent filed against petitioners for reformation of the contract &ith damages% on the ground that it is too one-sided in fa*or of petitioners@ that it is not in conformity &ith the guidelines of the )ational ,lectrification Administration G),AH &hich direct that the reasonable compensation for the use of the posts is P"$ $$ per post% per month@ that after ele*en G""H years of petitionersA use of the posts% the telephone cables strung by them thereon ha*e become much hea*ier &ith the increase in the *olume of their subscribers% &orsened by the fact that their linemen bore holes through the posts at &hich points those posts &ere bro8en during typhoons@ that a post no& costs as much as P!%74$ $$@ so that justice and e:uity demand that the contract be reformed to abolish the ine:uities thereon Article "!71 spea8s of Lser*iceL &hich has become so difficult 'a8ing into consideration the rationale behind this pro*ision% 9 the term Lser*iceL should be understood as referring to the LperformanceL of the obligation In the present case% the obligation of pri*ate respondent consists in allo&ing petitioners to use its posts in )aga City% &hich is the ser*ice contemplated in said article Murthermore% a bare reading of this article re*eals that it is not a re:uirement thereunder that the contract be for future ser*ice &ith future unusual change According to Senator Arturo < 'olentino% 10 Article "!71 states in our la& the doctrine of unforseen e*ents 'his is said to be based on the discredited theory of rebus sic stantibus in public international la&@ under this theory% the parties stipulate in the light of certain pre*ailing conditions% and once these conditions cease to e(ist the contract also ceases to e(ist 'here is nothing purely potestati*e about the prestations of either party because petitionerAs permission for free use of telephones is not made to depend purely on their &ill% neither is pri*ate respondentAs permission for free use of its posts dependent purely on its &ill A potestati*e condition is a condition% the fulfillment of &hich depends upon the sole &ill of the debtor% in &hich case% the conditional obligation is *oid In sum% the contract is subject to mi(ed conditions% that is% they depend partly on the &ill of the debtor and partly on chance% haBard or the &ill of a third person% &hich do not in*alidate the aforementioned pro*ision BORROMEO VS. @RANCO - 1191. 1<91. 1091. 1299 >n April "0% "0$!% the Mrancos e(ecuted a contract to sell their property to Corromeo &herein the latter &as gi*en si( months from the e(ecution of the instrument to arrange and complete the documents and papers relating to the said property >n January 1% "0$4% Corromeo filed a complaint praying that defendants be compelled to sell to him the property in :uestion under the terms of the contract =e had already ta8en steps to complete the documents and papers relating to the property but he &as unable to complete it 'he Mrancos ans&ered and as8ed that the complaint be dismissed for Corromeo failed to comply &ith the condition of completing the documents and papers related to the property 'he Court held that the contract in :uestion is a bilateral one containing mutual obligations and the fulfillment of &hich may be demanded 'he failure of the petitioner to complete the documents and papers related to the property is not an essential part of the contract and cannot be an obstacle for the fulfillment thereof 'he obligation to buy the property is correlati*e &ith the obligation to sell it 'he obligation of Corromeo to perfect the papers of the property is not correlati*e &ith the obligation to sell the property 'hese obligations do not arise from the same cause 'hey create no reciprocal rights bet&een the contracting parties@ so that the failure to comply &ith this stipulation does not gi*e the defendants the right to cancel the obligation &hich they imposed upon themsel*es in accordance &ith Article ""0" of the Ci*il Code% since no real juridical bilaterality or reciprocity e(isted bet&een the t&o obligations >ne obligation is entirely independent of the other PAI IPPINE AMUSEMENT ENTERPRISES VS. NATIVIDAD - 1191 Plaintiff% Philippine Amusement ,nterprises% Inc % entered into a contract &ith the defendant )ati*idad% &hereby the former leased to the latter an automatic phonograph% more popularly 8no&n as Lju8ebo(L )ati*idad &rote a letter to plaintiff re:uesting for the return of the ju8ebo( as it &as defecti*e 'he plaintiff ho&e*er% contended that the stoc8ing up of coins is :uite normal in any coin-operated phonograph It then rightfully re-installed a ne& ju8ebo( in replacement of the first one Plaintiff demanded from defendant the compliance to rene& the lease contract Defendants refused the demand and ordered for the rescission of the contract in their fa*or by reason of the plaintiffAs failure to perform its obligation to render the automatic phonograph suitable for the purpose for &hich it &as intended Defendant is not entitled to rescission Rescission by judicial action under Article ""0" &ill be ordered only &here the breach complained of is substantial as to defeat the object of the parties in entering into the agreement It &ill not be granted &here the breach is slight or casual 'he defendants as8ed the plaintiff to retrie*e its phonograph% claiming that there &ere times &hen the coins dropped into the slot &ould get stuc8% resulting in its failure to play the desired music Cut apart from this bare statement% there is nothing in the e*idence &hich sho&s the fre:uency &ith &hich the

ju8ebo( failed to function properly 'he e(pression Lthere are timesL connotes occasional failure of the phonograph to operate% not fre:uent enough to render it unsuitable and unser*iceable 'he po&er to rescind obligations is implied in reciprocal ones in case one of the obligors should not comply &ith &hat is incumbent upon him So the Ci*il Code pro*ides 4 Cut it is e:ually settled that% in the absence of a stipulation to the contrary% this po&er must be in*o8ed judicially It cannot be e(ercised solely on a partyAs o&n judgment that the other has committed a breach of the obligation 2 =ence% as there is nothing in the contract of lease empo&ering the defendants to rescind it &ithout resort to the courts% the defendantsA action in unilaterally terminating the contract is unjustified ROGUE VS. APUS 1191. 1992 Plaintiff and defendant entered into an agreement of sale co*ering -ots "% ! and 0% Cloc8 " In accordance &ith said agreement% defendant paid to plaintiff the sum of P"3$ $$ as deposit and the further sum of P12$ 37 to complete the payment of four monthly installments Defendant re:uested plaintiff that he be allo&ed to abandon and substitute -ots "% ! and 0% the subject matter of their pre*ious agreement% &ith -ots 2 and "!% Cloc8 !and &as granted Aside from the deposit of P"3$ $$ and the amount of P12$ 37 &hich &ere paid under their pre*ious agreement% defendant failed to ma8e any further payment on account of the agreed monthly installments for the t&o lots in dispute% under the ne& contract to sell Plaintiff demanded upon defendant not only to pay the stipulated monthly installments in arrears% but also to ma8e up-to-date his payments% but defendant% instead of complying &ith the demands% 8ept on as8ing for e(tensions% promising at first that he &ould pay not only the installments in arrears but also ma8e up-to-date his payment% but later on refused altogether to comply &ith plaintiffAs demands Petitioner Melipe C% Ro:ue filed the complaint against defendant )icanor -apuB for rescission and cancellation of the agreement of sale bet&een them in*ol*ing the t&o lots in :uestion and prayed that judgment be rendered ordering the rescission and cancellation of the agreement of sale% the defendant to *acate the t&o parcels of land and remo*e his house therefrom and to pay to the plaintiff the reasonable rental thereof at the rate of P7$ $$ a month from August "033 until such time as he shall ha*e *acated the premises% and to pay the sum of P!%$$$ $$ as attorneyAs fees% costs of the suit and a&ard such other relief or remedy as may be deemed just and e:uitable in the premises 'he absence of a formal deed of con*eyance is a *ery strong indication that the parties did not intend immediate transfer of o&nership and title% but only a transfer after full payment of the price Respondent as obligor is not entitled to the benefits of paragraph 4 of Art ""0"% )CC =a*ing been in default and acted in bad faith% he is not entitled to the ne& period of 0$ days from entry of judgment &ithin &hich to pay petitioner the balance of P""%242 22 &ith interest due on the purchase price of P"!%4!3 $$ for the t&o lots 'o allo& and grant respondent an additional period for him to pay the balance of the purchase price% &hich balance is about 0!5 of the agreed price% &ould be tantamount to e(cusing his bad faith and sanctioning the deliberate infringement of a contractual obligation that is repugnant and contrary to the stability% security and obligatory force of contracts <oreo*er% respondentAs failure to pay the succeeding ""7 monthly installments after paying only 2 monthly installments is a substantial and material breach on his part% not merely casual% &hich ta8es the case out of the application of the benefits of pa paragraph 4% Art ""0"% ) C C Pursuant to Art ""0"% )e& Ci*il Code% petitioner is entitled to rescission &ith payment of damages &hich the trial court and the appellate court% in the latterAs original decision% granted in the form of rental at the rate of P7$ $$ per month from August% "033 until respondent shall ha*e actually *acated the premises% plus P!%$$$ $$ as attorneyAs fees 'he Court affirmed the same to be fair and reasonable 'he Court also sustained the right of the petitioner to the possession of the land% ordering thereby respondent to *acate the same and remo*e his house BOESA? VS. INTERPAI PROMOTIONS 1170. 1191 Coysa& and his <anager signed &ith Interphil Promotions a contract to engage +abriel LMlashL ,lorde in a bo(ing contest for the junior light&eight championship of the &orld It &as stipulated that Coysa& &ould not% prior to the date of the bo(ing contest% engage in any other such contest &ithout the &ritten consent of Interphil Promotions Coysa& and Oulo% Jr sued Interphil for damages allegedly occasioned by the refusal of Interphil to honor their commitments under the bo(ing contract 'he e*idence established that the contract &as *iolated by appellant Coysa& himself &hen% &ithout the appro*al or consent of Interphil% he fought -ouis A*ila on June "0% "07" in -as .egas )e*ada Appellant Oulo admitted this fact during the trial Fhile the contract imposed no penalty for such *iolation% this does not grant any of the parties the unbridled liberty to breach it &ith impunity >ur la& on contracts recogniBes the principle that actionable injury inheres in e*ery contractual breach 'husK'hose &ho in the performance of their obligations are guilty of fraud% negligence or delay% and those &ho in any manner contra*ene the terms thereof% are liable for damages VArt ""1$% Ci*il CodeW AlsoK'he po&er to rescind obligations is implied% in reciprocal ones% in case one of the obligors should not comply &ith &hat is incumbent upon him VPart "% Art ""0"% Ci*il CodeW 'here is no doubt that the contract in :uestion ga*e rise to reciprocal obligations LReciprocal obligations are those &hich arise from the same cause% and in &hich each party is a debtor and a creditor of the other% such that the obligation of one is dependent upon the obligation of the other 'hey are to be performed simultaneously% so that the performance of one is conditioned upon the simultaneous fulfillment of the other 'he po&er to rescind is gi*en to the injured party L&here the plaintiff is the party who did not perform the underta'ing which he was bound by the terms of the agreement to perform ( he is not entitled to insist upon the performance of the contract by the defendant" or recover damages by reason of his own breach L 'he assignments% from Retchum to Araneta% and from Araneta to Oulo% &ere in fact no*ations of the original contract &hich% to be *alid% should ha*e been consented to by Interphil )o*ation &hich consists in substituting a ne& debtor in the place of the original one% may be made e*en &ithout the 8no&ledge or against the &ill of the latter% but not without the consent of the creditor.VArt "!04% Ci*il Code 6nder the la& &hen a contract is unla&fully no*ated by an applicable and unilateral substitution of the obligor by another% the aggrie*ed creditor is not bound to deal &ith the substitute >n the *alidity of the fight postponement% the *iolations of the terms of the original contract by appellants *ested the appellees &ith the right to rescind and repudiate such contract altogether 'hat they sought to see8 an adjustment of one particular co*enant of the contract% is under the circumstances% &ithin the appelleeAs rights EARTA MINERA S VS. MACARAIC - 1897 /ambales Chromite% o&ner of "$ patentable chromite mining claims% and PhilBea% as operator and the herein respondent% entered into a DContract of De*elopment% ,(ploitation and Producti*e >perationE on the ten G"$H patentable mining claims During the lifetime of such contract% ,arth <inerals ,(ploration% Inc % the herein petitioner% submitted a -etter of Intent on to /ambales Chromite &hereby the former proposed and the latter agreed to operate the same mining area subject of the earlier agreement bet&een /ambales Chromite and PhilBea <ining ,arth <inerals filed a petition for cancellation of the contract bet&een /ambales Chromite and PhilBea <ining to the Cureau of <ines and +eo-Sciences GC<+SH ,arth <inerals alleged that PhilBea <ining committed gra*e and serious *iolations of the latters contract because of failure to produce the agreed *olume of chromite ores@ failure to pay ad *alorem ta(es@ failure to put up assay buildings and offices% all resulting in the non-producti*ity and non-de*elopment of the mining area PhilBea <ining filed a motion to dismiss on the ground that ,arth <inerals is not the proper party in interest C<+S denied the petition% so PhilBea ele*ated the case to <inistry of )atural Resources G<)RH to dismiss the appeal <)R on the other hand ordered C<+S to in*estigate and found out that PhilBea grossly *iolated the terms and conditions of the contract C<+S rendered a decision canceling the said mining contract Article "401 of the Ci*il Code lays the general rule that an action for the annulment of contracts can only be maintained by those &ho are bound either principally or subsidiarily by *irtue thereof 'he rule% ho&e*er% admits of an e(ception 'he Court% in 'e*es * PeopleAs =omesite and =ousing Corporation G!4 SCRA ""2" V"07#WH held that a person &ho is not obliged principally or subsidiarily in a contract may e(ercise an action for nullity of the contract if he is prejudiced in his rights &ith respect to one of the contracting parties% and can sho& the detriment &hich could positi*ely result to him from the contract in &hich he had no inter*ention Petitioner ,arth <inerals see8s the cancellation of the contract bet&een /ambales Chromite and PhilBea <ining% not as a party to the contract but because his rights are prejudiced by the said contract 'he prejudice and detriment to the rights and interest of petitioner stems from the continued

e(istence of the contract bet&een /ambales Chromite and pri*ate respondent PhilBea <ining 6nless and until the contract bet&een /ambales Chromite and PhilBea <ining is cancelled% petitionerAs contract &ith the former in*ol*ing the same mining area cannot be in effect and it cannot perform its o&n obligations and deri*e benefits under its contract Petitioner ,arth <inerals has the right to pursue the case to its logical conclusion% and during the effecti*ity of such <ining Agreement% both ,arth <inerals and /ambales Chromite are under obligation to assure peaceful possession of the mining properties from the claims of third parties CIMENEZ VS. CA 1191 Spouses +imeneB entered into a conditional contract of sale of a house and lot &ith <ercado for the price of Php 3$$%$$$ subject to the follo&ing conditionsK " A do&npayment of the >), =6)DR,D '=>6SA)D GP"$$%$$$ $$H P,S>S in cash &ill be paid by <r Jose <ercado to <r Alfredo +imeneB upon signing of this agreement ! 'he premises shall be ready for occupancy on July 7% "013% furnished 4 'he balance less the +SIS loan on said property shall be paid by the buyer in t&o or more e:ual installments but not later than one year 2 A deed of absolute sale shall be e(ecuted in fa*or of <r Jose <ercado% Jr upon payment of the 2$5 of the total selling price 'he cost of the preparation of the deed of sale and the cost of the necessary documentary stamps shall be borne by the seller &hile the cost of the registration fees to be borne by the buyer 3 =o&e*er% if the balance is not fully paid &ithin one year period% the total payments recei*ed by the seller shall be considered as ad*ance payments to the rental of the house in the amount of P3%$$$ $$ <ercado &as only able to pay Php !$%$$$ <ore than t&o years after% the parties e(ecuted another agreement &herein <ercado promise to pay the balance of P41$%$$$ on or before >ctober 7% "011 plus "5 interest on the balance from July 7% "017 to September 7% "011 and the unpaid interest on the +SIS Mi*e years after the parties e(ecuted the contract to sell% <ercado had paid only P424%$$$ on the price of the +imeneB property +imeneB demanded that <ercado pay his rents in arrears and *acate the premises 'he <etropolitan 'rial Court rendered a decision in fa*or of Spouses +imeneB =o&e*er% on appeal% the R'C dismissed the complaint on the ground of prematurity because the conflict arising from the condition Contract of Sale and subse:uent agreements relati*e thereto entered into bet&een the parties should first be resol*ed and to determine &hether or not a cause of action for ejectment e(ists >n June !$% "0##% the trial court dismissed the petition filed by the spouses for annulment of contract% reco*ery of possession% and damages based on Article ""0" of the )e& Ci*il Code% and ordered them to e(ecute a Deed of Sale &ith Assumption of <ortgage o*er the property in fa*or of <ercado 6pon appeal% CA affirmed &ith modification the decision of the trial court ISS6,K Can the Spouses +imeneB still rescind the contract to sellS R6-I)+K Oes 6nder the circumstances% and considering ho& much real estate prices ha*e jumped since "013% it &ould be a tra*esty of justice to deny the sellers right to cancel the sale under Article "0"" of the )e& Ci*il Code 'here is not gainsaying <ercados breach of the contract to sell =e failed to pay the stipulated purchase price of Php 3$$%$$$ &ithin one-year period originally fi(ed in the agreement &hich e(pire on July 3% "017 nor &ithin the e(tended period fi(ed in their supplemental agreement &hich e(pired on >ctober 7% "011%nor &ithin the other e(tensions he sought thereafter Such breaches entitled the sellers to as8 for the cancellation of the contract to sell &ith damages 'herefore% the decision of CA &as annulled and set aside 'he contract to sell and the supplemental agreement &ere cancelled and annulled Respondent <ercado &as ordered to *acate the property of the Spouses +imeneB and restore its possession to them =e &as further ordered to pay the sum of Php 3%$$$ per month from September "0#2 until he *acates the same plus Php !$%$$$ as attorneys fees T2'+52 v*#s+s CA - 1992 Cerlin 'aguba married to Sebastiana Domingo Gno& petitionerH is the o&ner of a residential lot &ith an area of 4%"!0 s:uare meters located at Cauayan% Isabela Spouses Pedro Asuncion and <arita -ungab% Galso petitionersH and herein pri*ate respondent <aria Peralta .da de De -eon% &ere separately occupying portions of the aforementioned lot as lessees Cerlin 'aguba sold a portion of the said lot consisting of 2$$ s:uare meters to pri*ate respondent <aria Peralta .da de De -eon for "#%$$$ $$ aH P4%3$$ $$ Philippine Currency upon the signing and e(ecuted petition of this contract@ bH 'o pay the amount of at least >ne 'housand GP"%$$$ $$H Pesos% Philippine Currency <>)'=-O to commence September "01!% until the &hole amount &ould ha*e been paid on or before December 4% "01!@ cH 'hat failure to pay the .,)D>R the &hole balance on December 4"% "01!% the .,)D,, shall be gi*en an e(tension of Si( G7H months &ith interest Glegal rateH after &hich .,)D>R may I)CR,AS, the purchase price to P3$ $$ per s: m &hich the .,)D,, agrees should she fail to pay &ithin said period of time Alleging that she Gpri*ate respondentH had already paid the sum of P"!%3$$ $$ and had tendered payment of the balance of P3%3$$ $$ to complete the stipulated purchase price of P"#%$$$ $$ to petitioner Cerlin 'aguba &ithin the grace period but the latter refused to recei*e payment@ a complaint for Specific Performance &ith Preliminary <andatory Injunction &ith Damages against Spouses Cerlin 'aguba &as e(ecuted Spouses 'aguba admitted the sale of the property% but claimed that pri*ate respondent failed to comply &ith her obligation under the Deed of Conditional Sale despite the se*eral e(tensions granted her% by reason of &hich petitioner &as compelled but &ith the e(press 8no&ledge and consent and e*en upon the proposal of pri*ate respondent% to negotiate the sale of a portion of the property sold% to the Spouses Asuncion &ho &ere actually in possession Fe agree &ith respondent Court of Appeals Gno& Intermediate Appellate CourtH that the contract of sale bet&een petitioner Cerlin 'aguba and pri*ate respondent <aria Peralta .da de De -eon 2 &as absolute in nature Despite the denomination of the deed as a LDeed of Conditional SaleL a reading of the conditions Gearlier :uoted in this decisionH therein set forth re*eals the contrary )o&here in the said contract in :uestion could &e find a pro*iso or stipulation to the effect that title to the property sold is reser*ed in the *endor 8 until full payment of the purchase price 'here is also no stipulation gi*ing the *endor Gpetitioner 'agubaH the right to unilaterally rescind the contract the moment the *endee Gpri*ate respondent de -eonH fails to pay &ithin a fi(ed period < Indeed% a reading of the contract in its entirety &ould sho& that the only right of petitioner 'aguba as *endor &as to collect interest at the legal rate if pri*ate respondent-*endee fails to pay the full purchase price of P"#%$$$ $$ up to December 4"% "01! and to increase the price from P23 $$ to P3$ $$ per s:uare meter if *endee still fails to pay &ithin the si( months grace period from December 4"% "01! Petitioner notify pri*ate respondent of the rescission of the contract Pursuant to Art "30! of the Ci*il Code If there &as no notification from the *endor that the contract has been rescinded% the *endor may continue to pay e*en after the e(piration of the period !ailure of vendor to notify the vendee by notarial act to rescind the contract nor filed suit in court to rescind the sale entitles the defaulting vendee to pay the contract price even after expiration of the period agreed upon. In the case at bar% it is undisputed that petitioner 'aguba ne*er notified pri*ate respondent by notarial act that he &as rescinding the contract% and neither had he filed a suit in court to rescind the sale Pri*ate respondents should be gi*en ample time to complete the payment e*en after the specified date of e(piration has lapsed &here time is not of the essence of the agreement" a slight delay by one party in the performance of his obligation is not a sufficient ground for rescission of the agreement) *quity and +ustice mandate that vendee be given additional period to complete payment of the purchase price. Considering that in the instant case% pri*ate respondent had already actually paid the sum of P"!%3$$ $$ of the total stipulated purchase price of P"#%$$$ $$ and had tendered payment of the balance of P3%3$$ $$ &ithin the grace period of si( months from December 4"% "01!% e:uity and justice mandate that she be gi*en additional period &ithin &hich to complete payment f the purchase price 'he subse:uent sale of the property to the Asuncion spouses% e*en in good faith% is not *alid %arties who bought property sold to another and with 'nowledge of the prior sale

are not considered buyers in good faith) new sale cannot prevail over previous sale. 'he Asuncion spouses cannot be considered buyers in good faith because they &ere a&are of the earlier sale to pri*ate respondent Cos:ue *s Ou Chipco I ""!2% "30" Plaintiff and defendant entered into a contract by &hich the latter &as to construct a house for the former and to complete &ithin four months 'he plaintiff made some changes in and additions to the original plans and failed to secure permit &hich caused delays 6nfortunately% the house &as totally destroyed by typhoon Plaintiff commenced the action for reco*ering of the defendant the sum of P"4!% the *alue of the said pieces of material furnished by him to the defendant% and the sum of P7$$ damages for failure of the defendant to complete the house &ithin the period of four months pro*ided for in the first contract 'he defendant denied really all of the material allegations of the complaint% set out the original contract% alleged the ne& contract and the fact that the plaintiff had refused to ma8e payments in accordance &ith the terms of the contract% and as8ed for a judgment against the plaintiff in the sum of P"%0!# 37 ,ach of the parties had more or less failed to comply &ith his respecti*e obligation It is clear that the plaintiff did not perform the underta8ing &hich he &as bound by the terms of his agreement to perform@ conse:uently he is not entitled to insist upon the performance of the contract by the defendant or to reco*er damages by reason of his o&n breach Fe thin8 the judgment of the lo&er court absol*ed each party from any further liability upon the said contract SACRADA ORDEN VS. NATIONA COCONUT CORPORATION 1197 Petitioner% Sagrada >rden o&ned a land &hich &as ac:uired by a Japanese corporation during the Japanese military occupation After the liberation% the Alien Property Custodian too8 possession% control and custody of the land 'he Copra ,(port <anagement Company occupied the property and &hen it *acated% the respondent% )ational Coconut Corporation occupied it through the representation made by the Philippine +o*ernment to the Alien Property Custodian 'he property &as returned to Sagrada >rden upon judgment that the contract of sale of the property in fa*or of the Japanese corporation &as null and *oid and upon payment of the consideration it recei*ed for the property to the Philippine Alien Property Administration Sagrada >rden &as also gi*en the right to reco*er from )ational Coconut Corporation reasonable rentals for the use and occupation of the premises Sagrada >rden filed an action to reco*er rentals from )ational Coconut Corporation from the time it used and occupied the premises )ational Coconut Corporation claimed that it &as &illing to pay only from the time the property &as returned to Sagrada >rden and not before% for it occupied the property in good faith% under no obligation to pay the rentals >bligations% must arise from any of the four sources of obligations% nameley% la&% contract or :uasi-contract% crime% or negligence Cut there is another ground &hy the claim or rentals can not be made against defendant-appellant 'here &as no agreement bet&een the Alien Property Custodian and the defendant-appellant for the latter to pay rentals on the property 'he e(istence of an implied agreement to that effect is contrary to the circumstances 'he reser*ation of this action may not be considered as *esting a ne& right@ if no right to claim for rentals e(isted at the time of the reser*ation% no rights can arise or accrue from such reser*ation alone Crinas * People ""7"% ""7! '&o of its passengers% <artina Cool% an old &oman% and ,melita +esmundo% a child about three years of age% fell from the passenger coach of the said train% as a result of &hich% they &ere o*er run% causing their instantaneous death 6pon approaching Carrio -agalag in 'iaong that night% the train slo&ed do&n and the conductor shouted A-usacanA 'hereupon% the old &oman &al8ed to&ards the left front door facing the direction of 'iaong% carrying the child &ith one hand and holding her baggage &ith the other Fhen <artina and ,melita &ere near the door% the train suddenly pic8ed up speed As a result the old &oman and the child stumbled and they &ere seen no more It too8 three minutes more before the train stopped at the ne(t barrio% -usacan% and the *ictims &ere not among the passengers &ho disembar8ed 'he pro(imate cause of the death of the *ictims &as the premature and erroneous announcement of petitionerA appelant Cri;as 'his announcement prompted the *ictims to stand and proceed to the nearest e(it 'he source of the obligation sought to be enforced in Ci*il Case )o 301# is culpa contractual% not an act or omission punishable by la& Fe also note from the appellantAs arguments and from the title of the ci*il case that the party defendant is the <anila Railroad Company and not petitioner-appellant Cri;as Culpa contractual and an act or omission punishable by la& are t&o distinct sources of obligation 'he trial court acted &ithin its jurisdiction &hen% despite the filing &ith it of the separate ci*il action against the <anila Railroad Company% it still a&arded death indemnity in the judgment of con*iction against the petitioner-appellant It is &ell-settled that &hen death occurs as a result of the commission of a crime% the follo&ing items of damages may be reco*eredK G"H an indemnity for the death of the *ictim@ G!H an indemnity for loss of earning capacity of the deceased@ G4H moral damages@ G2H e(emplary damages@ G3H attorneyAs fees and e(penses of litigation% and G7H interest in proper cases 'he indemnity for loss of earning capacity% moral damages% e(emplary damages% attorneyAs fees% and interests are reco*erable separately from and in addition to the fi(ed slim of P"!%$$$ $$ corresponding to the indemnity for the sole fact of death 'his indemnity arising from the fact of death due to a crime is fi(ed &hereas the others are still subject to the determination of the court based on the e*idence presented 'he fact that the &itnesses &ere not interrogated on the issue of damages is of no moment because the death indemnity fi(ed for death is separate and distinct from the other forms of indemnity for damages Cangco * <anila Railroad I ""1!% ""14 Cangco &as an employee &ith the defendant company% <anila Railroad =e tra*els daily by train in going to and from his office in <anila 6pon the occasion in :uestion% he &as returning home from his daily labors &hen he arose from his seat ma8ing an e(it through the door as the train slo&ed do&n nearing the station As Cangco alighted from the class-car into the stations platform% one or both of his feet came in contact &ith a sac8 of &atermelons resulting to a *iolent fall &hich caused the laceration of his right arm Cangco sought to reco*er damages from <anila Railroad for the negligence of its employees in placing the sac8s of &atermelons upon the platform in a manner that &ould menace the safety of alighting passengers 'he CMI held that albeit negligence &as attributable to the defendant% the plaintiff failed to use due diligence in alighting from the coach% hence% he is precluded from reco*ering damages Cangco appealed 'he defendant company is held liable for the negligent acts of its employees It cannot be doubted that the employees of the defendant company &ere guilty of negligence in piling the sac8s in a manner that &ould obstruct passengers alighting from the train@ that their presence caused the plaintiff to fall It is important to note that the foundation of the legal liability of the defendant is the contract of carriage% and that the obligation to respond for the damage &hich plaintiff has suffered arises% if at all% from the breach of that contract by reason of the failure of defendant to e(ercise due care in its performance 'hat is to say% its liability is direct and immediate% differing essentially% in legal *ie&point from that presumpti*e responsibility for the negligence of its ser*ants% imposed by article "0$4 of the Ci*il Code% &hich can be rebutted by proof of the e(ercise of due care in their selection and super*ision Article "0$4 of the Ci*il Code is not applicable to obligations arising e( contractu% but only to e(tra-contractual obligations P or to use the technical form of e(pression% that article relates only to culpa a:uiliana and not to culpa contractual Articles ""1! and ""14 of the Ci*il Code% clearly points out this distinction 'he contract of defendant to transport plaintiff carried &ith it% by implication% the duty to carry him in safety and to pro*ide safe means of entering and lea*ing its trains Gci*il code% article "!3#H 'hat duty% being contractual% &as direct and immediate% and its non-performance could not be e(cused by proof that the fault &as morally imputable to defendantAs ser*ants In this particular instance% that the train &as barely mo*ing &hen plaintiff alighted is sho&n conclusi*ely by the fact that it came to stop &ithin si( meters from the place &here he stepped from it 'housands of person alight from trains under these conditions e*ery day of the year% and sustain no injury &here the company has 8ept its platform free from dangerous obstructions

Peoples Car * Commando I ""30 DefendantAs security guard on duty at plaintiffAs premises% L&ithout any authority% consent% appro*al% 8no&ledge or orders of the plaintiff and?or defendant brought out of the compound of the plaintiff a car belonging to its customer% and dro*e said car for a place or places un8no&n% abandoning his post as such security guard on duty inside the plaintiffAs compound% and &hile so dri*ing said car in one of the City streets lost control of said car% causing the same to fall into a ditch along J P -aurel St % Da*ao City by reason of &hich the plaintiffAs complaint for :ualified theft against said dri*er% &as blottered in the office of the Da*ao City Police Department L Plaintiff claimed that defendant &as liable for the entire amount under paragraph 3 of their contract &hereunder defendant assumed Lsole responsibility for the acts done during their &atch hoursL by its guards% &hereas defendant contended% &ithout :uestioning the amount of the actual damages incurred by plaintiff% that its liability Lshall not e(ceed one thousand GP"%$$$ $$H pesos per guard postL under paragraph 2 of their contract Said paragraph is manifestly inapplicable to the stipulated facts of record% &hich in*ol*e neither property of plaintiff that has been lost or damaged at its premises nor mere negligence of defendantAs security guard on duty =ere% instead of defendant% through its assigned security guards% complying &ith its contractual underta8ing Ato safeguard and protect the business premises of GplaintiffH from theft% robbery% *andalism and all other unla&ful acts of any person or persons%L defendantAs o&n guard on duty unla&fully and &rongfully dro*e out of plaintiffs premises a customerAs car% lost control of it on the high&ay causing it to fall into a ditch% thereby directly causing plaintiff to incur actual damages in the total amount of P#%2#0 "$ Plaintiff &as in la& liable to its customer for the damages caused the customerAs car% &hich had been entrusted into its custody Plaintiff therefore &as in la& justified in ma8ing good such damages and relying in turn on defendant to honor its contract and indemnify it for such undisputed damages% &hich had been caused directly by the unla&ful and &rongful acts of defendantAs security guard in breach of their contract As ordained in Article ""30% Ci*il Code% Lobligations arising from contracts ha*e the force of la& bet&een the contracting parties and should be complied &ith in good faith L Carredo * +arcia I !"#$ p 1! 'here &as a head on collision bet&een a ta(i cab dri*en by Pedro Montanilla and a caratella in &hich the Maustino +arcia &as a passenger 'he collision caused the death of the Maustino +arcia 'he parents of the deceased filed a criminal case against Pedro Montanilla -i8e&ise they also reser*ed the right to a ci*il case 'he R'C rendered a decision on the criminal case and sentenced the accused to jail time Subse:uently% the ci*il case &as granted Prior to the filing of the ci*il cases% plaintiffs counsel had ! choices as to ho& to go about &ith the case% &hether to file a case pursuant to Article "4$ of the RPC or Article !"#$ of the Ci*il Code% they chose the latter In the ci*il case it &as pro*en that the Mausto Carredo% employer of the dri*er of the ta(i cab% did not e(ercise due diligence Das a good father of a familyE in selecting and in the super*ision of his employees 'herefore% R'C held him liable to pay damages to the aggrie*ed party 'he defense filed a motion for reconsideration to the Court of Appeals arguing that it should be Art "4$ of the RPC that should ha*e go*erned and that Montanilla should be primarily liable and Carredo subsidiarily liable 'he Court affirmed the decision of the R'C 'he action of the responsibility of the employer is in itself a principal action ,uasi -elicts of Culpa Aquiliana is a separate and distinct by all institution% independent from the ci*il responsibility arising from criminal liability% that an employer% under Article !"#$ of the Ci*il Code% is primarily and directly responsible for the negligent acts of his employees A ci*il case &as not filed against Montanilla &hich could ha*e made him primarily liable and Carredo &ould only ha*e been subsidiarily liable% but in the case at bar% the plaintiffs are directly suing Carredo pursuant to Article !"#$ of the Ci*il code According to the Court of Appeals% the plaintiffs &as correct in filing a case against Carredo since Montanilla may ha*e been imprisoned or insol*ent and that his employer may ha*e more assets &hich could be used to indemnify the plaintiffs 'o remedy the predicament of Carredo% his counsel should ha*e established that he De(ercised a diligence of a good father of a family in selecting his employees E If they ha*e done so% he &ould ha*e been relie*ed from indemnifying the plaintiffs Pelayo * -auron I ""3# p 74-72 Arturo Pelayo% a physician residing in Cebu% filed a complaint against <arcelo -auron and Juana Abella 'he plaintiff &as called to the house of the defendants to render medical assistance to their daughter-in-la& &ho &as about to gi*e birth to a child@ that therefore% and after consultation &ith the attending physician% Dr ,sca;o% it &as found necessary% on account of the difficult birth% to remo*e the fetus by means of forceps &hich operation &as performed by the plaintiff% &ho also had to remo*e the afterbirth% in &hich ser*ices he &as occupied until the follo&ing morning% and that after&ards% on the same day% he *isited the patient se*eral times@ that the just and e:uitable *alue of the ser*ices rendered by him &as P3$$% &hich the defendants refuse to pay &ithout alleging any good reason@ that for said reason he prayed that the judgment be entered in his fa*or as against the defendants% or any of them% for the sum of P3$$ and costs% together &ith any other relief that might be deemed proper If e*ery obligation consists in gi*ing% doing or not doing something Gart ""37H% and spouses are mutually bound to support each other% there can be no :uestion but that% &hen either of them by reason of illness should be in need of medical assistance% the other is under the una*oidable obligation to furnish the necessary ser*ices of a physician in order that health may be restored% and he or she may be freed from the sic8ness by &hich life is jeopardiBed@ the party bound to furnish such support is therefore liable for all e(penses% including the fees of the medical e(pert for his professional ser*ices In the face of the abo*e legal precepts it is un:uestionable that the person bound to pay the fees due to the plaintiff for the professional ser*ices that he rendered to the daughter-in-la& of the defendants during her childbirth% is the husband of the patient and not her father and mother- inla&% the defendants herein 'he fact that it &as not the husband &ho called the plaintiff and re:uested his assistance for his &ife is no bar to the fulfillment of the said obligation% as the defendants% in *ie& of the imminent danger% to &hich the life of the patient &as at that moment e(posed% considered that medical assistance &as urgently needed% and the obligation of the husband to furnish his &ife in the indispensable ser*ices of a physician at such critical moments is specially established by the la&% as has been seen% and compliance there&ith is una*oidable@ therefore% the plaintiff% &ho belie*es that he is entitled to reco*er his fees% must direct his action against the husband &ho is under obligation to furnish medical assistance to his la&ful &ife in such an emergency Fithin the meaning of the la&% the father and mother-in-la& are strangers &ith respect to the obligation that de*ol*es upon the husband to pro*ide support% among &hich is the furnishing of medical assistance to his &ife at the time of her confinement@ and% on the other hand% it does not appear that a contract e(isted bet&een the defendants and the plaintiff physician% for &hich reason it is ob*ious that the former cannot be compelled to pay fees &hich they are under no liability to pay because it does not appear that they consented to bind themsel*es ARAAS VS. TUTAAN >n <ay 4% "01" the lo&er court declared that Petitioner -uisa Uuijencio Gand by her spouse Jose Ara;asH &as the o&ner of 2$$ shares including the stoc8 di*idends that accrued to said shares% of respondent 6ni*ersal 'e(tile <ills% Inc G6',9H as defendant and +ene <anuel and C R Casta;eda as co-defendants% and subse:uently ordered 6',9 to cancel said certificates and issue ne& ones in the name of Plaintiff and to deli*er all di*idends appertaining to the same% &hether in cash or in stoc8s 6',9 filed a motion for clarification &hether the phrase Dto deli*er to her all di*idends appertaining to the same% &hether in cash or in stoc8sE meant di*idends properly pertaining to plaintiffs after the courts declaration of plaintiff o&nership of said 2$$ shares of stoc8 Defendant 6',9 has al&ays maintained it &ould rightfully abide by &hate*er decision may be rendered since such &ould be the logical conse:uence after the ruling in respect to the rightful o&nership of said share s of stoc8 'he motion &as granted &hich ruled against 6',9% ordering it to pay plaintiff the cash di*idends% &hich accrued to the stoc8s in :uestion after rendition of its current decision e(cluding cash di*idends already paid to +ene <anuel and C R

Casta;eda &hich accrued before its decision 6',9 alleged that the cash di*idends had already been paid thereby absol*ing it from payment thereof ISS6,K Fas the contention of 6',9% alleging that the cash di*idends of stoc8 had already been paid and thereby absol*ing it from any further payment% *alidS R6-I)+K )o 'he final and e(ecutory judgment against 6',9 declared petitioners as the o&ners of the :uestioned 6',9 shares of stoc8 against its codefendants It &as further made clear in the motion for clarification that all di*idends accruing to the said shares after the rendition of the decision of Aug 1% "01" rightfully belonged to petitioners If 6',9 ne*ertheless chose to pay the &rong parties% not&ithstanding its full 8no&ledge and understanding of the final judgment% it &as still liable to pay the petitioners as the la&ful declared o&ners of the :uestions shares of stoc8s 'he burden of reco*ering the supposed payment of the cash di*idends made by 6',9 to the &rong parties Casta;eda and <anuel falls upon itself by its o&n action and cannot be passed by it to the petitioner as the innocent parties It is elementary that payment made by a judgment debtor to a &rong party cannot e(tinguish the judgment obligation of such debtor to its creditor Milin*est *s Phil Acetylene% - "2#2% "!4!% "!23% and "201 Philippine Acetylene Co % Inc % defendant-appellant purchased from one Ale(ander -im a motor *ehicle described as Che*orlet% "070 model &ith Serial )o "47700/4$473! for P33%!21 #$ &ith a do&n payment of P!$%$$$ $$ and the balance of P43%!21 #$ payable% under the terms and conditions of the promissory note As security for the payment of said promissory note% the appellant e(ecuted a chattel mortgage Ale(ander -im assigned to the Milin*est Minance Corporation all his rights% title% and interests in the promissory note and chattel mortgage by *irtue of a Deed of Assignment Milin*est Minance Corporation assigned to the ne& corporation% the herein plaintiff-appellee Milin*est Credit Corporation% all its rights% title% and interests on the aforesaid promissory note and chattel mortgage &hich% in effect% the payment of the unpaid balance o&ed by defendant-appellant to Ale(ander -im &as financed by plaintiff-appellee such that -im became fully paid Appellant failed to comply &ith the terms and conditions set forth in the promissory note and chattel mortgage since it had defaulted in the payment of nine successi*e installments Appellant% ad*iced appellee of its decision to Lreturn the mortgaged property% &hich return shall be in full satisfaction of its indebtedness pursuant to Article "2#2 of the )e& Ci*il Code L Appellee informed appellant that appellee cannot sell the motor *ehicle as there &ere unpaid ta(es on the said *ehicle in the sum of P1$%"!! $$ Appellee offered to deli*er bac8 the motor *ehicle to the appellant but the latter refused to accept it% so appellee instituted an action for collection of a sum of money &ith damages '&o issuesK "H &hether or not the return of the mortgaged motor *ehicle to the appellee by *irtue of its *oluntary surrender by the appellant totally e(tinguished and?or cancelled its obligation to the appellee@ !H &hether or not the &arranty for the unpaid ta(es on the mortgaged motor *ehicle may be properly raised and imputed to or passed o*er to the appellee 'he mere return of the mortgaged motor *ehicle by the mortgagor% the herein appellant% to the mortgagee% the herein appellee% does not constitute dation in payment or dacion en pago in the absence% e(press or implied of the true intention of the parties -acion en pago% according to <anresa% is the transmission of the o&nership of a thing by the debtor to the creditor as an accepted e:ui*alent of the performance of obligation < In dacion en pago% as a special mode of payment% the debtor offers another thing to the creditor &ho accepts it as e:ui*alent of payment of an outstanding debt 'he underta8ing really parta8es in one sense of the nature of sale% that is% the creditor is really buying the thing or property of the debtor% payment for &hich is to be charged against the debtorAs debt As such% the essential elements of a contract of sale% namely% consent% object certain% and cause or consideration must be present In its modern concept% &hat actually ta8es place in dacion en pago is an objecti*e no*ation of the obligation &here the thing offered as an accepted e:ui*alent of the performance of an obligation is considered as the object of the contract of sale% &hile the debt is considered as the purchase price 9 In any case% common consent is an essential prere:uisite% be it sale or inno*ation to ha*e the effect of totally e(tinguishing the debt or obligation 6nder the la&% the deli*ery of possession of the mortgaged property to the mortgagee% the herein appellee% can only operate to e(tinguish appellantAs liability if the appellee had actually caused the foreclosure sale of the mortgaged property &hen it reco*ered possession thereof 6 It is &orth noting that it is the fact of foreclosure and actual sale of the mortgaged chattel that bar the reco*ery by the *endor of any balance of the purchaserAs outstanding obligation not satisfied by the sale Article "2#2 Ci*il Code - In a contract of sale of personal property the price of &hich is payable in installments% the *endor may e(ercise any of the follo&ing remediesK "H ,(act fulfillment of the obligation% should the *endee fail to pay@ !H Cancel the sale% should the *endeeAs failure to pay co*er t&o or more installments@ 4H Moreclose the chattel mortgage on the thing sold% if one has been constituted% should the *endeeAs failure to pay co*er t&o or more installments In this case% he shall ha*e no further action against the purchaser to reco*er any unpaid balance of the price Any agreement to the contrary shall be *oid Article "!4! Payment means not only the deli*ery of money but also the performance% in any manner% of an obligation Article "!23 Dation in payment% &hereby property is alienated to the creditor in satisfaction of a debt in money% shall be go*erned by the la& of sales Article "201 'he thing sold shall be understood as deli*ered% &hen it is placed in the control and possession of the *endee >n the second issue% it must be noted that the unpaid ta(es on the motor *ehicle is a burden on the property Since as earlier sho&n% the o&nership of the mortgaged property ne*er left the mortgagor% the herein appellant% the burden of the unpaid ta(es should be home by him% &ho% in any case% may not be said to be &ithout remedy under the la&% but definitely not against appellee to &hom &ere transferred only rights% title and interest% as such is the essence of assignment of credit In *ie& of the foregoing consideration% the court hereby renders judgment lH directing defendant to pay plaintiffK aH the sum of P!!%!!1 #" &hich is the outstanding unpaid obligation of the defendant under the assigned credit% &ith "! 5interest from the date of the firing of the complaint in this suit until the same is fully paid@ bH the sum e:ui*alent to l35 of P!!%!!1 #" as and for attorneyAs fees@ and !H directing plaintiff to deli*er to% and defendant to accept% the motor *ehicle% subject of the chattel may ha*e been changed by the result of ordinary &ear and tear of the *ehicle +an 'ion *s CA I legal compensation "!1#% "!10 >ng Fan Sieng &as a tenant in certain premises o&ned by +an 'ion 'he latter filed an ejectment case against the former% alleging nonpayment of rents for August and September of that year% at P"#$ a month% or P47$ altogether 'he defendant denied the allegation and said that the agreed monthly rental &as only P"7$% &hich he had offered to but &as refused by the plaintiff >ng Fan Sieng &as able to obtain a &rit of e(ecution of

the judgment for attorneyAs fees in his fa*or +an 'ion &ent on certiorari to the Court of Appeals% &here he pleaded legal compensation% claiming that >ng Fan Sieng &as indebted to him in the sum of P2%4!$ for unpaid rents 'he appellate court accepted the petition but e*entually decided for the respondent% holding that although Lrespondent >ng is indebted to the petitioner for unpaid rentals in an amount of more than P2%$$$ $$%L the sum of P3$$ could not be the subject of legal compensation% it being a Ltrust fund for the benefit of the la&yer% &hich &ould ha*e to be turned o*er by the client to his counsel L Said court opined that the re:uisites of legal compensation% namely% that the parties must be creditors and debtors of each other in their o&n right GArt "!1#% Ci*il CodeH and that each one of them must be bound principally and at the same time be a principal creditor of the other GArt "!10H% are not present in the instant case% since the real creditor &ith respect to the sum of P3$$ &as the defendantAs counsel 'his is not an accurate statement of the nature of an a&ard for attorneyAs feeAs 'he a&ard is made in fa*or of the litigant% not of his counsel% and is justified by &ay of indemnity for damages reco*erable by the former in the cases enumerated in Article !!$# of the Ci*il Code " It is the litigant% not his counsel% &ho is the judgment creditor and &ho may enforce the judgment by e(ecution Such credit% therefore% may properly be the subject of legal compensation Uuite ob*iously it &ould be unjust to compel petitioner to pay his debt for P3$$ &hen admittedly his creditor is indebted to him for more than P2%$$$ -aguna 'ayabas *s <anabat - "7#$ A contract &as e(ecuted &hereby the Ci;an 'ransportation Company leased to the -aguna-'ayabas Cus Company at a monthly rental of P!%3$$ $$ its certificates of public con*enience o*er the lines 8no&n as <anila-Ci;an% <anila-Canlubang and Sta Rosa-<anila% and to the Catangas 'ransportation Company its certificate of public con*enience o*er the line 8no&n as <anila-Catangas Fharf% together &ith one LInternationalL truc8% for a period of fi*e years% rene&able for another similar period% to commence from the appro*al of the lease contract by the Public Ser*ice Commission After the e(ecution of the lease contract% the plaintiff Ci;an 'ransportation Company &as declared insol*ent and Mrancisco C <anabat &as appointed as its assignee Mrom time to time% the defendants paid the lease rentals up to December% "031% &ith the exception of the rental for August 19$#" from which there was deducted the sum of %1"./0.91 without the consent of the plaintiff 'his deduction &as based on the ground that the employees of the defendants on the leased lines went on stri'e. 'he assignee of the plaintiff objected to such deduction% claiming that the contract of lease &ould be suspended only if the defendants could not operate the leased lines due to the action of the officers% employees or laborers of the lessor but not of the lessees% and that the deduction of %./0.91 amounted to a fraudulent preference in the insolvency proceedings as &hate*er judgment might ha*e been rendered in fa*or of any of the lessees should ha*e been filed as a claim in said proceedings Catangas 'ransportation Company and -aguna-'ayabas Cus Company separately filed &ith the Public Ser*ice Commission a petition for authority to suspend the operation on the lines co*ered by the certificates of public con*enience leased to each of them by the Ci;an 'ransportation Company due to losses PlaintiffAs assignee opposed the petition on the ground that the Public Ser*ice Commission had no jurisdiction to grant the relief prayed for as it should in*ol*e the interpretation of the lease contract% &hich act falls e(clusi*ely &ithin the jurisdiction of the ordinary courts Ci;an 'ransportation Company represented by Mrancisco C <anabat% assignee% filed this action against defendants -aguna 'ayabas Cus Company and Catangas 'ransportation Company for the reco*ery of the sum of P2!%3$$ representing the accrued rentals for the lease of the certificates of public con*enience of the former to the latter Petitioners in*o8e article "7#$ of the Ci*il Code is not applicable in this case Art "7#$K 'he lessee shall ha*e no right to a reduction of the rent on account of the sterility of the land leased% or by reason of the loss of fruits due to ordinary fortuitous e*ents@ but he shall ha*e such right in case of the loss of more than one-half of the fruits through e(traordinary and unforeseen fortuitous e*ents% sa*e al&ays &hen there is a specific stipulation to the contrary ,(traordinary fortuitous e*ents are understood to beK fire% &ar% pestilence% unusual flood% locusts% earth:ua8e% or others &hich are uncommon% and &hich the contracting parties could not ha*e reasonably foreseen >b*iously% no reduction can be sustained on the ground that the operation of the leased lines &as suspended upon the mere speculation that it &ould yield no substantial profit for the lessee bus company PetitionersA profits may be reduced due to increase operating costs@ but the *olume of passenger traffic along the leased lines not only remains same but may e*en increase as the tempo of the mo*ement of population is intensified by the industrial de*elopment of the areas co*ered or connected by the leased routes <ilitating further against a grant of reduction of the rentals to the petitioners is the petitionersA conduct &hich is not in accord &ith the rules of fair play and justice Petitioners% it must be recalled% promised to pay the accrued rentals in due time -ater% ho&e*er% &hen they belie*ed they found a con*enient e(cuse for escaping their obligation% they reneged on their earlier promise <oreo*er% petitionersA option to suspend operation on the leased lines appears malicious If it &ere true that the cause of the suspension &as the high prices of spare parts% gasoline and needed materials and the reduction of the dollar allocation% &hy &as it that only plaintiff-appelleeAs certificate of public con*enience &as sought to be suspendedS Fhy did not the defendants-appellants as8 for a corresponding reduction or suspension under their o&n certificate along the same routeS Suppose the prices of the spare parts and needed materials &ere cheap% &ould the defendantsappellants ha*e paid more than &hat is stipulated in the lease contractS Fe belie*e not =ence% the suspension of operation on the leased lines &as concei*ed as a scheme to lessen operation costs &ith the e(pectation of greater profit L -egarda J =ermanos *s Saldana I "!42 in the interest of justice and equity Pri*ate respondent as plaintiff had entered into t&o &ritten contracts &ith petitioner -egarda =ermanos as defendant subdi*ision o&ner% &hereby the latter agreed to sell to him -ots )os 1 and # of the subdi*ision &ith an area of "3$ s:uare meters each% for the sum of P"%3$$ $$ per lot% payable o*er the span of ten years di*ided into "!$ e:ual monthly installments of P"0 #4 &ith "$5 interest per annum Respondent faithfully paid for eight continuous years about 03 Gof the stipulated "!$H monthly installments totalling P4%3#! $7 but did not ma8e further payments 'he account thus sho&s that he o&ed petitioners the sum of P"%4"1 1! on account of the balance of the purchase price GprincipalH of the t&o lots Gin the total sum of P4%$$$ $$H% although he had paid more than the stipulated purchase price of P"%3$$ $$ for one lot Petitioners contend that pursuant to the pro*isions of both contracts all the amounts paid in accordance &ith the agreement together &ith the impro*ements on the premises ha*e been considered as rents paid and as payment for damages suffered by your failure%L and LSaid cancellation being in order% is hereby confirmed 'he CourtAs doctrine in the analogous case of +.2. 3uason 4 Co. 5nc. vs. +avier # is fully applicable to the present case% &ith the respondent at bar being granted lesser benefits% since no rescission of contract &as therein permitted 'he Court holds that the respondent buyer of t&o small residential lots on installment contracts on a ten-year basis &ho has faithfully paid for eight continuous years on the principal alone already more than the *alue of one lot% besides the larger stipulated interests on both lots% is entitled to the con*eyance of one fully paid lot of his choice% rules that the judgment is fair and just and in accordance &ith la& and e:uity -im8a8o *s 'eodoro - ""17 Plaintiffs and <argarita Da*id &ere co-o&ners pro indiviso of properties the former o&ning t&o-thirds and the latter one-third Plaintiffs mortgaged their t&o-third part of the properties to <argarita Da*id and the latter% before her death% donated the mortgage credit to her t&o adopted daughters >ne-third of the properties o&ned by <argarita Da*id &as% after her death% alloted to one of her adopted daughter Plaintiffs sold the mortgaged properties to Carlos < Sison After the sale of the mortgaged properties% plaintiffs informed )arcisa M de 'eodoro Gadopted daughterH of their desire to pay off her share in the mortgage credit% and% upon refusal of the latter to accept the offer% indorsed the chec8 in her consigned it in the office of the cler8 of this court% &ho% in turn% deposited the chec8 in the Insular 'reasury as fiduciary funds )arcisa M de 'eodoro refused to accept the offer on the ground that she% being the coo&ner of the mortgaged property in one-third part thereof and not Carlos < Sison% she has a preferential right to the sale 'his action &as brought by the plaintiffs to compel the defendants% )arcisa M de 'eodoro and her husband Jose 'eodoro% Jr % to accept the

chec8 in payment of their share in the mortgage credit and the complaint &as filed for them by Carlos < Sison as their attorney Defendants manifested to the court their readiness and &illingness to accept the payment offered by the plaintiffs Linstead of upholding and insisting on their right to ac:uire by purchase one-half of the properties in*ol*ed in the deed of mortgage%L inasmuch as they &ere Lpresently in bad need of cash% occasioned by the e(isting situation% to meet the obligations due the +o*ernmentL@ but it turned out that the amount deposited by the plaintiffs cannot be &ithdra&n from the )ational 'reasury for lac8 of appropriation 'he :uestion to decide is &hether or not the consignation of payment made by the plaintiffs &as *alid 6nder article ""17 of the Ci*il Code% if a creditor to &hom tender of payment has been made should refuse &ithout reason to accept it% 'he debtor may relie*e himself of liability by the consignation of the thing due LIn order that the consignation of the thing due may release the obligor% pre*ious notice thereof must be gi*en to the persons interested in the performance of the obligation L GArticle ""11 H LConsignation shall be made by the deli*ery of the things due to the court% accompanied by proof of tender% &hen re:uired% and of notice of the consignation in other cases After the consignation has been made the persons interest shall also be notified thereof L GArticle ""1# H Fe are of the opinion that the reason thus adduced by <rs 'eodoro for her refusal to accept the payment &as not *alid =er right as a coo&ner of the property% in case of its sale to a third person% &as not to pre*ent or annul the sale but to redeem the property at the same price &ithin nine days counted from the date of the record of the transfer in the registry of deeds% or in default thereof% from the time the redemptioner may ha*e had 8no&ledge of the sale GArticles "3!"% "3!!% and "3!2 of the Ci*il CodeH 'he plaintiffs had the right to sell their interest in said property to a third person Garticle 400H% &ithout prejudice to the right of <rs 'eodoro to redeem it from the purchases Garticle "3!!H Conse:uently% the plaintiffs had the right to pay off <rs 'eodoroAs participation in the mortgage &hen it fell due and to consign the amount in court upon her refusal to accept the payment 'hus the first re:uisite of consignation P tender of payment and refusal to accept it &ithout reason P appears to ha*e been fulfilled GArticle ""17 H If it cannot be collected no&% it is only because there is yet no appropriation by the present administration for the payment of said trust fund In the last analysis% the contro*ersy boils do&n to &hether it is the plaintiffs or the defendants &ho should suffer the incon*enience of petitioning and &aiting for the +o*ernment to ma8e the payment It results from the foregoing considerations that the consignation of payment made by the plaintiffs &as *alid and that conse:uently they &ere relie*ed of liability to the defendants for the sum of P3%7$$@ and in the assumption that &as all the amount due as the principal and interest of <rs 'eodoroAs participation in the mortgage up to September "% "02"% <rs 'eodoro should be ordered to release and cancel her part of the mortgage 'he consignation of said amount operated as payment thereof to her% and therefore it is she% and not the plaintiffs &ho has the right to and should claim it from the +o*ernment Fithout the notice first announced to the persons interested in the fulfillment of the obligation% the consignation as a payment is *oid -oreto *s Solinap I "!1#% "!10 'iburcio -utero and Asuncion <agalona% o&ners of the =acienda 'ambal% leased the said hacienda to petitioner -oreto Solinap for a period of ten V"$W years for the stipulated rental of P3$%$$$ $$ a year It &as further agreed in the lease contract that out of the aforesaid annual rental% the sum of P!3%$$$ $$ should be paid by Solinap to the Philippine )ational Can8 to amortiBe the indebtedness of the spouses -utero &ith the said ban8 Juanito -utero Vgrandson and heir of the late 'iburcioW and his &ife =ardi*i R -utero paid the Philippine )ational Can8 the sum of P!3%$$$ $$ as partial settlement of the deceasedAs obligations Fhereupon the respondents -utero filed a motion in the testate court for reimbursement from the petitioner of the amount thus paid Petitioner filed a separate action against the spouses Juanito -utero and =ardi*i R -utero for collection of the total amount of P1"%$$$ $$ alleging defendants -utero borro&ed from him the sum of P23%$$$ $$ for &hich they e(ecuted a deed of real estate mortgage@ obtained an additional loan of P4%$$$ $$% e*idenced by a receipt issued by them@ that defendants are further liable to him for the sum of P!4%$$$ $$% representing the *alue of certain dishonored chec8s issued by them to the plaintiff@ and that defendants refused and failed to settle said accounts despite demands 'he issue is &hether or not the obligation of petitioners to pri*ate respondents may be compensated or set- off against the amount sought to be reco*ered in an action for a sum of money filed by the former against the latter As this Court ruled in 2ialhe vs. 6alili" 2 L compensation cannot ta8e place &here oneAs claim against the other is still the subject of court litigation It is a re:uirement% for compensation to ta8e place% that the amount in*ol*ed be certain and li:uidated L Petitioner contends that respondent judge gra*ely abused her discretion in not declaring the mutual obligations of the parties e(tinguished to the e(tent of their respecti*e amounts =e relies on Article "!1# of the Ci*il Code to the effect that compensation shall ta8e place &hen t&o persons% in their o&n right% are creditors and debtors of each other 'he argument fails to consider Article "!10 of the Ci*il Code &hich pro*ides that compensation can ta8e place only if both obligations are li:uidated In the case at bar% the petitionerAs claim against the respondent -uteros in Ci*il Case )o "!410 is still pending determination by the court <indanao Portland Cement Corp * CA - "!1#% "!10 and "!0$ Appellant G<I)DA)A> P>R'-A)D C,<,)' C>RP>RA'I>)H is ordered to pay the amount of P"$%$$$ $$ attorneyAs fees directly to Atty Casiano C -a:uihon Petitioner <indanao Portland Cement Corporation GappellantH and respondent Pac&eld Steel Corporation GappelleeH% &ere creditors and debtors of each other% their debts to each other consisting in final and e(ecutory judgments of the Court of Mirst Instance in t&o G!H separate cases% ordering the payment to each other of the sum of P"$%$$$ $$ by &ay of attorneyAs fees 'he t&o G!H obligations% therefore% respecti*ely offset each other% compensation ha*ing ta8en effect by operation of la& and e(tinguished both debts to the concurrent amount of P"$%$$$ $$% pursuant to the pro*isions of Arts "!1#% "!10 and "!0$ of the Ci*il Code% since all the re:uisites pro*ided in Art "!10 of the said Code for automatic compensation Le*en though the creditors and debtors are not a&are of the compensationL &ere duly present )ecessarily% the appealed order of June !7% "01# granting Atty -a:uihonAs motion for amendment of the judgment of September "2% "017 against <indanao Portland Cement Corporation so as to ma8e the a&ard therein of P"$%$$$ $$ as attorneyAs fees payable directly to himself as counsel of Pac&eld Steel Corporation instead of payable directly to said corporation as pro*ided in the judgment% &hich had become final and e(ecutory long before the issuance of said LamendatoryL order &as a *oid alteration of judgment It &as a substantial change or amendment beyond the trial courtAs jurisdiction and authority and it could not defeat the compensation or set-off of the t&o G!H obligations of the corporations to each other &hich had already e(tinguished both debts by operation of la& )e& Pacific *s Seneris - "!20 A compromise judgment &as rendered by the respondent Judge that the entire amount of P32%3$$ $$ plus interest% plus the balance of P"%$$$ $$ for attorneyAs fees &ill be paid by defendant to the plaintiff &ithin fi*e months@ and failure on the part of the defendant to comply% a &rit of e(ecution may be issued by this Court for the satisfaction of the obligation Mor failure of the petitioner to comply &ith his judgment obligation% the respondent Judge% upon motion of the pri*ate respondent% issued an order for the issuance of a &rit of e(ecution Petitioner deposited &ith the Cler8 of Court% in his capacity as *x-7fficio Sheriff of /amboanga City% the sum of P74%"4$ $$ for the payment of the judgment obligation Pri*ate respondent through counsel% refused to accept the chec8 as &ell as the cash deposit and re:uested the scheduled auction sale *x-7fficio Sheriff issued a LSheriffAs Certificate of SaleL in fa*or of the pri*ate respondent% Ricardo 'ong% married to Pascuala 'ong for the total amount of P3$%$$$ $$ Petitioner filed an exparte motion for issuance of certificate of satisfaction of judgment but &as denied Considering that the &hole amount deposited by the petitioner consisting of CashierAs Chec8 of P3$%$$$ $$ and P"4%"4$ $$ in cash co*ers the judgment obligation of P74%$$$ $$ as mentioned in the &rit of e(ecution% then% Fe see no *alid reason for the pri*ate respondent to ha*e refused acceptance of the payment of the obligation in his fa*or 'he auction sale% therefore% &as uncalled for It is to be emphasiBed in this connection that the chec8 deposited by the petitioner in the amount of P3$%$$$ $$ is not an ordinary chec8 but a CashierAs Chec8 of the ,:uitable Can8ing Corporation% a ban8 of good standing and reputation 'hus% petitionerAs motion for the issuance of a certificate of satisfaction of judgment is clearly meritorious and the respondent Judge gra*ely abused his discretion in not granting the same under the circumstances

>ccena *s Jabson - "!71 Pri*ate respondentAs complaint for modification of the contract manifestly has no basis in la& and must therefore be dismissed for failure to state a cause of action Pri*ate respondent 'ropical =omes% Inc filed a complaint for modification of the terms and conditions of its subdi*ision contract &ith petitioners alleging that due to the increase in price of oil and its deri*ati*es and the concomitant &orld&ide spiralling of prices% &hich are not &ithin the control of plaintiff% of all commodities including basis ra& materials re:uired for such de*elopment &or8% the cost of de*elopment has risen to le*els &hich are unanticipated% unimagined and not &ithin the remotest contemplation of the parties at the time said agreement &as entered into and to such a degree that the conditions and factors &hich formed the original basis of said contract% ha*e been totally changed 'hat further performance by the plaintiff under the contract% &ill result in situation &here defendants &ould be unjustly enriched at the e(pense of the plaintiff@ &ill cause an ine:uitous distribution of proceeds from the sales of subdi*ided lots in manifest actually result in the unjust and intolerable e(posure of plaintiff to implacable losses% all such situations resulting in an unconscionable% unjust and immoral situation contrary to and in *iolation of the primordial concepts of good faith% fairness and e:uity &hich should per*ade all human relations Petitioners insist that the &orld&ide increase in prices cited by respondent does not constitute a sufficient cause of action for modification of the subdi*ision contract Article "!71 is misapplied &hich states K'he general rule is that impossibility of performance releases the obligor =o&e*er% it is submitted that &hen the ser*ice has become so difficult as to be manifestly beyond the contemplation of the parties% the court should be authoriBed to release the obligor in &hole or in part 'he intention of the parties should go*ern and if it appears that the ser*ice turns out to be so difficult as ha*e been beyond their contemplation% it &ould be doing *iolence to that intention to hold the obligor still responsible 'he cited article does not grant the courts this authority to rema8e% modify or re*ise the contract or to fi( the di*ision of shares bet&een the parties as contractually stipulated &ith the force of la& bet&een the parties% so as to substitute its o&n terms for those co*enanted by the parties themsel*es RespondentAs complaint for modification of contract manifestly has no basis in la& and therefore states no cause of action 6nder the particular allegations of respondentAs complaint and the circumstances therein a*erred% the courts cannot e*en in e:uity grant the relief sought PereB *ersus CA - "!#3 C>)+,),RIC De*elopment J Minance Corporation% a company engaged in money mar8et operations% issued ! promissory notes in the total amount of 4!$%72$ !3% in fa*or of Ramon <ojica Said promissory notes &ere set to mature on Aug 7and Aug "4 but said maturity dates &ererolledo*er Ge(tendedH to >ct 2 and >ct "" 'hese t&o obligations &ere later on assigned to <,.,R Milms Prior to the assignment% <,.,R Milms borro&ed 3$$8 from C>)+,),RIC ma8ing the latter a creditor to the former Said obligation &as set to mature on Aug 3 Also prior to the assignment% C>)+,),RIC recei*ed !$$8 from herein petitioner PereB and issued to the latter a confirmation of sale stipulating that CoraBon &as to be paid on Aug 3% and that they &ould ma8e collection on her behalf >n Aug 3% <,.,R paid C>)+,),RIC "$$8% and C>)+,),RIC paid PereB >n Aug 7 and "4% C>)+,),RIC paid <ojica just the interest due% the principal being rolled-o*er <,.,R &as ad*ised by C>)+,),RIC that of the 3$$8 it borro&ed% !$$8 &as sold to a third party &ithout naming PereB% and that it could not ta8e account of the assignment A month later% <,.,R turned 108% &hich it computed as the amount it still o&ed% to the pro*incial sheriff C>)+,),RIC then filed a petition for suspension of payments% listing <,.,R as a debtor C>)+,),RIC &as later on enjoined from paying its creditors and the court said that <,.,R &as not a debtor PereB then filed an action for reco*ery against <,.,R% &hich &as granted by the trial court but later on re*ersed by the Court of Appeals 'he "st paragraph of Art "!#3 must be applied% meaning the defense of compensation &here the debtor has consented to the assignment of rights in fa*or of a third person is barred Respondent CAK 'here &as legal compensation &hich e(tinguished <,.,Rs obligation >n September Gthe time of the assignmentH% the promissory notes &ere already due and demandable Cy operation of la&% there &as partial compensation Fhen Aug 3 came% <,.,R &as still a debtor to the e(tent of the 2$$8 balance% and a creditor to the e(tent of 4!$8 Gthe amount assigned by <ojicaH 'he deli*ery of the money to the sheriff e(tinguished the obligation <,.,R is not liable to PereB since the former &as not informed of the purchase of part of its obligation by the latter 'he 4rd paragraph of Art "!#3 &as correctly in*o8ed by <,.,R as a defense IssueK Fas there legal compensation &hich cause the e(tinguishment of the obligation under )egotiable Certificate of Indebtedness =eldK )o legal compensation could ha*e ta8en place 'here could not ha*e been any legal compensation since the loan instruments &ere not yet due and demandable Article "!10 pro*ides that for legal compensation to e(ist% the debt must be due and demandable <,.,R must be bound by the rollo*ers of said dates Re:uisites of Compensation GArt "!10HK" H'hat each one of the obligors be found principally% and the he be at the same time a principal creditor of the other@ ! H'hat both debts consist in a sum of money% or if the things due are consumable% they be of the same 8ind% and also of the same :uality if the latter has been stated@ 4 H'hat the t&o debts be due that they be li:uidated and demandable@ 3 H 'hat o*er neither of them there be any retention or contro*ersy commenced by third persons and communicated indue time to the debtor 'here is no application for the 4rd paragraph of Art "!#3 'he first paragraph is applicable 'he debtor &ho has consented to the assignment of rights made by a creditor in fa*or of a third person cannot set up against the assignee the compensation &hich &ould pertain to him against the assignor% unless the assignor &as notified by the debtor at the time he ga*e his consent that here ser*ed his right to the compensation <oney mar8et transactions are intended to pro*ide :uic8 mobility of money and securities Mund users and fund suppliers are brought together in a most impersonal manner 'hus% in practice% no notification is gi*en to borro&ers or issuers Pp *s Mran8lin - "!77 )ati*idad Mran8lin &as charged &ith estafa 6pon a bail bond posted by the Asian Surety J Insurance Company% Inc in the amount of P!%$$$ $$% she &as released from custody She failed to appear on araignment% but the court postponed the arraignment upon motion of counsel for the surety company 'he accused failed to appear again% for &hich reason the court ordered her arrest and re:uired the surety company to sho& causes &hy the bail bond posted by it should not be forfeited Appellant no& contends that the lo&er court should ha*e released it from all liability under the bail bond posted by it because its failure to produce and surrender the accused &as due to the negligence of the Philippine +o*ernment itself in issuing a passport to said accused% thereby enabling her to lea*e the country In support of this contention the pro*isions of Article "!77 of the )e& Ci*il Code are in*o8ed <entioned legal pro*ision does not apply to its case% because the same spea8s of the relation bet&een a debtor and a creditor% &hich does not e(ist in the case of a surety upon a bail bond% on the one hand% and the 8tate% on the other It is clear% therefore% that in the eyes of the la& a surety becomes the legal custodian and jailer of the accused% thereby assuming the obligation to 8eep the latter at all times under his sur*eillance% and to produce and surrender him to the court upon the latterAs demand 'hat the accused in this case &as able to secure a Philippine passport &hich enabled her to go to the 6nited States &as% in fact% due to the surety companyAs fault because it &as its duty to do e*erything and ta8e all steps necessary to pre*ent that departure 'his could ha*e been accomplished by seasonably informing the Department of Moreign Affairs and other agencies of the go*ernment of the fact that the accused for &hose pro*isional liberty it had posted a bail bond &as facing a criminal charge in a particular court of the country Soco *s <ilitante - "!37 to "!7" Plaintiff-appellee-Soco and the Adefendant-appellant-Mrancisco entered into a contract of lease &hereby Soco leased her commercial building and lot to Mrancisco for a monthly rental of P #$$ $$ for a period of "$ years rene&able for another "$ years at the option of the lessee Mrancisco

noticed that Soco did not anymore send her collector for the payment of rentals and at times there &ere payments made but no receipts &ere issued In *ie& of this alleged non-payment of rental of the leased Soco re:uested Mrancisco Ato *acate the premises leased and filed case of Illegal Detainer According to Article "!37% )e& Ci*il Code% if the creditor to &hom tender of payment has been made refuses &ithout just cause to accept it% the debtor shall be released from responsibility by the consignation of the thing or sum due Consignation alone shall produce the same effect in the follo&ing casesK G"H Fhen the creditor is absent or un8no&n% or does not appear at the place of payment@ G!H Fhen he is incapacitated to recei*e the payment at the time it is due@ G4H Fhen% &ithout just cause% he refuses to gi*e a receipt@ G2H Fhen t&o or more persons claim the same right to collect@ G3H Fhen the title of the obligation has been lost Consignation is the act of depositing the thing due &ith the court or judicial authorities &hene*er the creditor cannot accept or refuses to accept payment and it generally re:uires a prior tender of payment In order that consignation may be effecti*e% the debtor must first comply &ith certain re:uirements prescribed by la& 'he debtor must sho& G"H that there &as a debt due@ G!H that the consignation of the obligation had been made because the creditor to &hom tender of payment &as made refused to accept it% or because he &as absent or incapacitated% or because se*eral persons claimed to be entitled to recei*e the amount due GArt ""17% Ci*il CodeH@ G4H that pre*ious notice of the consignation had been gi*en to the person interested in the performance of the obligation GArt ""11% Ci*il CodeH@ G2H that the amount due &as placed at the disposal of the court GArt ""1#% Ci*il CodeH@ and G3H that after the consignation had been made the person interested &as notified thereof GArt ""1#% Ci*il CodeH Mailure in any of these re:uirements is enough ground to render a consignation ineffecti*e 'ender of payment must be distinguished from consignation 'ender is the antecedent of consignation% that is% an act preparatory to the consignation% &hich is the principal% and from &hich are deri*ed the immediate conse:uences &hich the debtor desires or see8s to obtain 'ender of payment may be e(trajudicial% &hile consignation is necessarily judicial% and the priority of the first is the attempt to ma8e a pri*ate settlement before proceeding to the solemnities of consignation 'here should be notice to the creditor prior and after consignation as re:uired by the Ci*il Code 'he reason for this is ob*ious% namely% to enable the creditor to &ithdra& the goods or money deposited Indeed% it &ould be unjust to ma8e him suffer the ris8 for any deterioration% depreciation or loss of such goods or money by reason of lac8 of 8no&ledge of the consignation L Sycip * CA - "!1# and "!10 Petitioner Mrancisco Sycip &as con*icted of the crime of estafa Petitioner claims among others that respondent appellate court erred G" in refusing to uphold the pro*isions on compensation% Articles "!1# and "!10% Ci*il Code@ G2H in not dismissing the complaint% e*en granting arguendo% that compensation does not apply Compensation cannot ta8e place in this case since the e*idence sho&s that Jose R -apuB is only an agent of Albert Smith and?or Dr D&ight Dill Compensation ta8es place only &hen t&o persons in their o&n right are creditors and debtors of each other% and that each one of the obligors is bound principally and is at the same time a principal creditor of the other <oreo*er% as correctly pointed out by the trial court% -apuB did not consent to the off-setting of his obligation &ith petitionerAs obligation to pay for the 3$$ shares 6y 'ong * Sil*a- "!10 Direct appeal from the orders declaring as duly pro*ed the indebtedness of insol*ent 6y 'ong in fa*or of herein appellants% claimants ,duardo -opeB% et al % in the amount of P"$$%313 $$ &ith legal interest@ but denying the set-off of such amount against the indebtedness of said claimants to insol*ent 6y 'ong amounting to P33%$$$ $$ &ith legal interest It is a settled principle that La debt of the ban8rupt arising prior to the ban8ruptcy cannot be set off against installments of rent falling due after ban8ruptcy% although the installments are payable under a &ritten lease in effect before the ban8ruptcy L 8 6pon this premise% the conclusion is easily reached that the debt of claimants &hich arose prior to ban8ruptcy cannot be set-off against the installments of rent falling due from the insol*ent after ban8ruptcy Mor compensation to ta8e place% it is necessary% among other legal re:uisites% Lthat o*er neither of them Gthe t&o debtsH there be any retention or contro*ersy% commenced by third persons and communicated in due time to the debtor L < 'his essential element of compensation being absent% the same cannot ta8e place Cesides% to allo& compensation to the concurrent amount of the mutual debts and credits &ould in effect gi*e claimants -opeB% et al % undue preference o*er other creditors% as such set-off &ill totally deplete the estate of the insol*ent% a situation entirely contrary to the purpose of insol*ency proceedings% &hich is to effect an e:uitable distribution of the insol*entAs estate among his creditors