Oblicon Cases

CASE TITLE 1157 Vicente Navales v.
Eulogia Rias/Sep 7, 1907/ BAlabastro
FACTS On November 18, 1904, , Vicente Navales filed a complaint with the Court of First Instance of Cebu against Eulogia Rias and Maximo Requiroso, claiming that the latter should be sentenced to pay him the sum of 1,200 pesos as damages. Navales alleged that the said defendants, without due cause, ordered the pulling down and destruction of his house erected in Daanbuangan, town of Naga, Island of Cebu (6m. in height, 8.70m2, built of wood with a nipa roof, and worth 1,000 pesos) on April 1904. Since he had not obtained any reimbursement from the defendants, by reason of their refusal he had been prejudiced to the extent of 200 pesos. Defendants denied all the allegations therein contained, and asked that judgment be entered dismissing the complaint. On Jan. 17, 1906, CFI rendered judgment declaring that the decision entered by the justice of the peace of Naga, and the order given by virtue thereof were illegal, as well as the action of the deputy sheriff Luciano Bacayo. The defendants were thereby liable for the damages caused to the plaintiff, which amounted to 500 pesos, and that they were sentenced to pay the said sum to the plaintiff.
ISSUE/S WON the defendants are liable for damages arising from the said order to destroy the house of Navales.
RULING No. No proof has been submitted that a contract had been entered into between the plaintiff and the defendants or that the latter had committed illegal acts or omissions or incurred in any kind of fault or negligence, from any of which an obligation might have arisen on the part of the defendants to indemnify the plaintiff. For this reason, the claim for indemnity, on account of acts performed by the sheriff while enforcing a judgment, can not under any consideration be sustained. (Art. 1089, Civil Code.) NOTE: The illegality of the judgment of the justice of the peace, that of the writ of execution thereunder, or of the acts performed by the sheriff for the enforcement of the judgment, has not been shown. Therefore, the (CFI) judgment appealed from is hereby reversed, and the complaint for damages filed by Vicente Navales against Eulogia Rias and Maximo Requiroso is DISMISSED.
Virata vs. Ochoa/January 31, 1978/ MMAndoy
Torts & Damages Double Recovery of Civil Liability This is an appeal by certiorari, from the order of the Court of First Instance of Cavite, Branch V, in Civil Case No. B-134 granting the motion of the defendants to dismiss the complaint on the ground that there is another action pending between the same parties for the same cause. In September 24, 1975, Maximo Borilla was driving a jeep (registered in the name of Victorio Ochoa) when he hit Arsenio Virata thereby causing the latters death. The heirs of Virata sued Borilla through an action for homicide through reckless imprudence in the Court of First Instance of Rizal. December 12, 1975, Atty. Julio Francisco, Viratas lawyer, reserved their right to file a separate civil action then he later withdrew said motion. But in June 29, 1976 the heirs of Arsenio Virata again reserved their right to institute a separate civil action. July 19, 1977, the heirs of Virata, petitioners, commenced for damages based on quasi-delict against the driver Maximo Borilla & the registered owner of the jeepney, Victorio Ochoa. August 13, 1976,
W/N the heirs of Virata may file a separate civil suit based on quasidelict against Borilla & Ochoa.
Yes. It is settled that in negligence cases the aggrieved parties may choose between an action under the Revised Penal Code or of quasi-delict under Article 2176 of the Civil Code of the Philippines. What is prohibitedby Article 2177 of the Civil Code of the Philippines is to recover twice for the same negligent act. Therefore, under Article 2177,acquittal from an accusation of criminal negligence, whether on reasonable doubt or not, shall not be a bar to a subsequent civil action, not for civil liability arising from criminal negligence, but for damages due to a quasi-delict or culpa aquiliana. But said article forestalls a double recovery. And also, Article 2176, where it refers to 'fault covers not only acts 'not punishable by law' but also criminal in character, whether intentional & voluntary or consequently, a separate civil action lies against the in a criminal act, whether or not he is criminally prosecuted & found guilty & acquitted, provided that the offended party is not allowed, if he is actually charged also criminally, to recover damages on both scores, & would be entitled in such eventuality only to the bigger award of the, two assuming the awards made in the two cases vary. The petitioners are not seeking to recover twice for the same negligent act. Before criminal case was decided, they manifested in said criminal case that they were filing a
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private respondents filed a motion to dismiss on the ground that there is another action, pending between the same parties for the same cause. September 8, 1976, the Court of First Instance of Rizal at Pasay City a decision in Criminal Case acquitting the accused Maximo Borilla on the ground that he caused an injury by name accident. Private respondents assailed that the Viratas were merely trying to recover damages twice. The lower court agreed with Ochoa & dismissed the civil suit.
separate civil action for damages against the owner & driver of the passenger jeepney based on quasi-delict. The acquittal of the driver, Maximo Borilla, of the crime charged in criminal case is not a bar to the prosecution of civil case for damages based on quasi-delict The source of the obligation sought to be enforced in civil case is quasidelict, not an act or omission punishable by law. Under Article 1157 of the Civil Code of the Philippines, quasi-delict & an act or omission punishable by law are two different sources of obligation. Moreover, for the petitioners to prevail in the action for damages, civil case, they have only to establish their cause of action by preponderance of the evidence. WHEREFORE, the order of dismissal appealed from is hereby set aside & civil case is reinstated & remanded to the lower court for further proceedings, with costs against the private respondents.
Hospicio de Barili, Cebu v. DAR/ Sep. 23, 2005/ JAstillo
Petitioner Hospicio de San Jose de Barili (Hospicio) is a charitable organization created as a body corporate in 1925 by Act No. 3239. The law was enacted in order to formally accept the offer made by Pedro Cui and Benigna Cui to establish a home for the care and support, free of charge, of indigent invalids and incapacitated and helpless persons. The Hospicio was to be maintained with the revenues of the personal and real properties to be endowed by the Cuis and other donors. Section 4 of Act No. 3239 provides that *t]he personal and real property donated to the [Hospicio] by its founders or by other persons shall not be sold under any consideration. On 10 October 1987, the Department of Agrarian Reform Regional Office (DARRO) Region VII issued an order ordaining that two parcels of land owned by the Hospicio be placed under Operation Land Transfer in favor of twenty-two (22) tillers thereof as beneficiaries. Presidential Decree (P.D.) No. 27, a land reform law, was cited as legal basis for the order. The Order of the DAR Secretary was assailed in a Petition for Certiorari filed with the Court of Appeals. In a Decision[5] dated 9 July 1999, the Court of Appeals Special Eleventh Division affirmed the DAR Secretarys issuance. It sustained the position of the Office of the Solicitor General (OSG) position that Section 4 of Act No. 3239 was expressly repealed not only by P.D. No. 27, but also by Republic Act No. 6657, otherwise known as the Comprehensive Agrarian Reform Law of 1988, both laws being explicit in mandating the distribution of agricultural lands to qualified beneficiaries. The Court of Appeals further
Whether or not PD No. 27, CARL and EO No. 407 violates Section 10 of the Constitution.
NO. The inanity of this argument is palpable. The nonimpairment clause reads: No law impairing the obligation of contracts shall be passed. If, as the Hospicio argues, the constitutional provision applies as well to the impairment of obligations created by law, then Section 10, Article III operates to bar the legislature from amending or repealing its own enactments. This is of course not the case, as the provision was intended to shield the impairment of obligations created by private agreements, and not by legislative fiat. Certainly, Congress can at any time expressly amend or repeal any and all sections of Act No. 3239 without fear of violating the non-impairment clause of the Constitution. In fine, Section 10 of Act 3239 provides that the privileges granted by the Act to the Hospicio are subject to the conditions on the grant of franchises as provided in the Jones Law. Section 28 of the Jones Law in turn provides in part, thus: No franchise or right shall be granted to any individual, firm, or corporation except under the conditions that it shall be subject to amendment, alteration, or repeal by the Congress of the United States, and that lands or right of use and occupation of lands thus granted shall revert to the government by which they were respectively granted upon the termination of the franchises and rights under which they were granted or upon their revocation or repeal.
noted that the subject lands did not fall among the exemptions provided under Section 10 of Rep. Act No. 6657. Finally, the appellate court brought into play the aims of land reform, affirming as it did the need to distribute and create an economic equilibrium among the inhabitants of this land, most especially those with less privilege in life, our peasant farmer. Unsatisfied with the Court of Appeals Decision, the Hospicio lodged the present Petition for Review. The Hospicio alleges that P.D. No. 27, the CARL, and Executive Order No. 407 all violate Section 10, Article III of the Constitution, which provides that no law impairing the obligation of contracts shall be passed. More pertinently, what the Hospicio alleges would be impaired is not actually a contract, but a legislative act, Act No. 3239. The Hospicio admits just as much in its petition, *Act No. 3239+ is not merely an ordinary contract but a contract enacted into law Act No. 3239 is thus a contract within the purview of the impairment clause of the Constitution. PP v. Paniterce/ Apr. 5, 2010/ LBejamin The RTC found appellant Dominggo Paniterce guilty beyond reasonable doubt of the crimes of rape and acts of lasciviousness. Sometime in the year 1997, appellant paniterce with lewd designs, by means of force and intimidation willfully, unlawfully and feloniously had carnal knowledge with his daughter AAA, 10 years old minor gaaints her will and consent and on the other occassion on August 26, 2000 rape his 12 year old daughter BBB. When arraigned, Paniterce pleaded not guilty to he charges. the RTC convicted appellant for acts of lasciviousness in Criminal Cases Nos. 6077, 6078, 6080 and 6081, appeallant is hereyby sentenced to suffer in each and every case an indeterminate prison term of 6 months of arresto mayor, as minimum. to 6 years of prison correctional as maximum and pay AAA and BBB 50,000 each as moral damages and 50.000 as exemplary damages and for rape on Criminal case No. 6079, appellant is hereby sentenced to suffer the penalty of Reculsion Perpetua and to pay AAA the amount 50,000 as moral damages and 50, 000 as exemplary damages. On september 16, 2008, Paniterce filed a notice of appeal with the Court of Appeals which was granted. Pending Appeal, on August 22, 2009 Paniterce died. WON death of the accused is extinguishes his criminal liability as well as civil liability. Yes, Paniterces death on August 22, 2009, during the pendency of his appeal, extinguished not only his criminal liability for rape and acts of lasciviousness but also his civil liabilities solely arising from or based on said crimes. According to Article 89(1) of the RPC, criminal liability is extinguished: By the death of the convict, as to the personal penalties; and as to pecuniary penalties, liability therefor is extinguished only when the death of the offender occurs before final judgment. The SC laid down the following guidelines in People vs Bayotas: 1. Death of the accused pending appeal of his conviction extinguishes his criminal liability as well as the civil liability based solely thereon. As opined by Justice Regalado, in this regard, the death of the accused prior to final judgment terminates his criminal liability and only the civil liability directly arising from and based solely on the offense committed, i.e., civil liability ex delicto in senso strictiore. 2. Corollarily, the claim for civil liability survives notwithstanding the death of (the) accused, if the same may also be predicated on a source of obligation other than delict. Article 1157 of the Civil Code enumerates these other sources of obligation from which the civil liability may arise as a result of the same act or omission: a) Law b) Contracts c) Quasi-contracts xxxx e) Quasi-delicts
3. Where the civil liability survives, as explained in Number 2 above, an action for recovery therefor may be pursued but only by way of filing a separate civil action and subject to Section 1, Rule 111 of the 1985 Rules on Criminal Procedure as amended. This separate civil action may be enforced either against the executor/administrator or the estate of the accused, depending on the source of obligation upon which the same is based as explained above. 4. Finally, the private offended party need not fear a forfeiture of his right to file this separate civil action by prescription, in cases where during the prosecution of the criminal action and prior to its extinction, the privateoffended party instituted together therewith the civil action. In such case, the statute of limitations on the civil liability is deemed interrupted during the pendency of the criminal case, conformably with the provisions of Article 1155 of the Civil Code that should thereby avoid any apprehension on a possible privation of right by prescription Thus, the criminal liability of the accused were totally extinguish by his death. Moreover, because Paniterces appeal was still pending and no final judgment of conviction had been rendered against him when he died, his civil liabilities arising from the crimes, being civil liabilities ex delicto, were likewise extinguished by his death. 1158 Manuel Serrano v. Central Bank/ Feb. 14, 1980/ JCanada
On October 13, 1966 and December 12, 1966, petitioner made a time deposit, for one year with 6% interest, P150,000.00 with the respondent Overseas Bank of Manila. Concepcion Maneja also made a time deposit, for one year with 6-% interest, on March 6, 1967 P200,000.00 with the same respondent Overseas Bank of Manila. 1968- Concepcion Maneja, married to Felixberto M. Serrano, assigned and conveyed to petitioner Manuel M. Serrano, her time deposit of P200,000.00 with respondent Overseas Bank of Manila. Notwithstanding series of demands for encashment of the aforementioned time deposits from the respondent Overseas Bank of Manila, dating from December 6, 1967 up to March 4, 1968, not a single one of the time deposit certificates was honored by respondent Overseas Bank of Manila. Respondent Central Bank admits that it is charged with the duty of administering the banking system of the Republic and it exercises supervision over all doing business in the Philippines, but denies the petitioner's allegation that the Central Bank has the duty to exercise a most rigid and stringent supervision of banks, implying that respondent Central Bank has to watch every move or activity of all
WON Central Bank is jointly and severally liable with respondent Overseas Bank of Manila to the petitioner for the P350,000 time deposit , with all interests due therein
By the very nature of the claims and causes of action against respondents, they in reality are recovery of time deposits plus interest from respondent Overseas Bank of Manila, and recovery of damages against respondent Central Bank for its alleged failure to strictly supervise the acts of the other respondent Bank and protect the interests of its depositors by virtue of the constructive trust created when respondent Central Bank required the other respondent to increase its collaterals for its overdrafts said emergency loans, said collaterals allegedly acquired through the use of depositors money. These claims shoud be ventilated in the Court of First Instance of proper jurisdiction as We already pointed out when this Court denied petitioner's motion to intervene in G.R. No. L-29352. Neither is there anything to prohibit in this case, since the questioned acts of the respondent Central Bank (the acts of dissolving and liquidating the Overseas Bank of Manila), which petitioner here intends to use as his basis for claims of damages against respondent Central Bank, had been accomplished a long time ago. Furthermore, both parties overlooked one fundamental principle in the nature of bank deposits when the petitioner claimed that there should be created a constructive trust in his favor when the respondent Overseas Bank of Manila increased its collaterals in favor of respondent Central Bank for the former's overdrafts and emergency loans, since these collaterals were acquired by the use of depositors' money. Bank deposits are in the nature of irregular deposits. They are really loans because they earn interest. All kinds of Atty, Espejo Addu Law 4 OBLI Case Digests Uno Manresa 2012 2013
banks, including respondent Overseas Bank of Manila. Respondent Central Bank also denied that it is guarantor of the permanent solvency of any banking institution as claimed by petitioner. It claims that neither the law nor sound banking supervision requires respondent Central Bank to advertise or represent to the public any remedial measures it may impose upon chronic delinquent banks as such action may inevitably result to panic or bank "runs". In the years 1966-1967, there were no findings to declare the respondent Overseas Bank of Manila as insolvent. Respondent Central Bank avers no knowledge of petitioner's claim that the properties given by respondent Overseas Bank of Manila as additional collaterals to respondent Central Bank of the Philippines for the former's overdrafts and emergency loans were acquired through the use of depositors' money, including that of the petitioner and Concepcion Maneja. in the case of Emerita M. Ramos, et al. vs. Central Bank of the Philippines, a case was filed by the petitioner Ramos, wherein respondent Overseas Bank of Manila sought to prevent respondent Central Bank from closing, declaring the former insolvent, and liquidating its assets. Petitioner Manuel Serrano in this case, filed on September 6, 1968, on the ground that Serrano had a real and legal interest as depositor of the Overseas Bank of Manila in the matter in litigation in that case. Respondent Central Bank in G.R. No. L-29352 opposed petitioner Manuel Serrano's motion to intervene in that case, on the ground that his claim as depositor of the Overseas Bank of Manila should properly be ventilated in the Court of First Instance, and if this Court were to allow Serrano to intervene as depositor , thousands of other depositors would follow and thus cause an avalanche of cases in this Court. In the resolution dated October 4, 1968, this Court denied Serrano's, motion to intervene. This Court rendered decision in G.R. No. L29352 on October 4, 1971, which became final and executory favorable to the respondent Overseas Bank of Manila Because of the above decision, petitioner in this case filed a motion for judgment in this case, praying for a decision on the merits, adjudging respondent Central Bank Santos v. CA/PCanada OSG v. Ayala Land Inc. et al/ Sep. 18,
bank deposits, whether fixed, savings, or current are to be treated as loans and are to be covered by the law on loans. Current and savings deposit are loans to a bank because it can use the same. The petitioner here in making time deposits that earn interests with respondent Overseas Bank of Manila was in reality a creditor of the respondent Bank and not a depositor. The respondent Bank was in turn a debtor of petitioner. Failure of he respondent Bank to honor the time deposit is failure to pay s obligation as a debtor and not a breach of trust arising from depositary's failure to return the subject matter of the deposit WHEREFORE, the petition is dismissed for lack of merit, with costs against petitioner.
Before this Court is a Petition for Review on Certiorari, under Rule 45 of the Revised Rules of Court, filed by petitioner Office of the Solicitor
Whether respondent Ayala Land, Robinsons,
The Court finds no merit in the present Petition. The Building Code, which is the enabling law and the
2009/HCano
General (OSG), seeking the reversal and setting aside of the Decision dated 25 January 2007 of the Court of Appeals in CA-G.R. CV No. 76298, which affirmed in toto the Joint Decision dated 29 May 2002 of the Regional Trial Court (RTC) of Makati City, Branch 138, in Civil Cases No. 00-1208 and No. 00-1210; and (2) the Resolution dated 14 March 2007 of the appellate court in the same case which denied the Motion for Reconsideration of the OSG. The RTC adjudged that respondents Ayala Land Incorporated (Ayala Land), Robinsons Land Corporation (Robinsons), Shangri-la Plaza Corporation (Shangri-la), and SM Prime Holdings, Inc. (SM Prime) could not be obliged to provide free parking spaces in their malls to their patrons and the general public.
Shangri-La and SM Prime are obligated to provide parking spaces in their malls for the use of their patrons or the public in general, free of charge.
Implementing Rules and Regulations do not impose that parking spaces shall be provided by the mall owners free of charge. Absent such directive[,] Ayala Land, Robinsons, Shangri-la and SM [Prime] are under no obligation to provide them for free. Article 1158 of the Civil Code is clear: "Obligations derived from law are not presumed. Only those expressly determined in this Code or in special laws are demandable and shall be regulated by the precepts of the law which establishes them; and as to what has not been foreseen, by the provisions of this Book (1090). Statutory construction has it that if a statute is clear and unequivocal, it must be given its literal meaning and applied without any attempt at interpretation. In conclusion, the total prohibition against the collection by respondents of parking fees from persons who use the mall parking facilities has no basis in the National Building Code or its IRR. The State also cannot impose the same prohibition by generally invoking police power, since said prohibition amounts to a taking of respondents property without payment of just compensation.
1159 Sps. Inocencio v. CA/Dec. 2001/ CClimaco
Private respondents spouses Mario and Gregoria Geronimo obtained a loan in the amount of P1,028,000 from petitioners, the spouses Inocencio and Adoracion San Antonio. To secure the loan, private respondents mortgaged two parcels of land covered by TCT No. RT6653 with an area of 10,390 square meters and TCT No. RT-6652 with an area of 2,556 square meters, both situated in Barrio Tabe, Guiguinto, Bulacan. Subsequently, private respondents obtained an additional loan of Nine Hundred Ninety One Thousand Eight Hundred Fifty Nine Pesos (P991,859) with an interest of 3.33% per month, thus making their total obligation in the amount of Two Million Nineteen Thousand Eight Hundred Fifty Nine Pesos (P2,019,859), payable on or before February 15, 1991. Private respondents failed to pay the loan and the interest on the due date, hence, the mortgage was extrajudicially foreclosed. During the auction sale, petitioners, being the highest bidder bought the two parcels of land. Before the one-year redemption period expired, private respondents filed a complaint for annulment of extrajudicial foreclosure with preliminary mandatory injunction, docketed as Civil Case No. 233-M92, with the Regional Trial Court of Bulacan, Branch 22. After the parties presented their respective evidence, they submitted to the court on September 16, 1993, a compromise agreement dated August 25, 1993, the terms and conditions of which are quoted as follows: 1. For a consideration of TWO MILLION PESOS (P2,000,000.00), Philippine Currency, in hand received by the defendants spouses Inocencio and Adoracion San Antonio from the plaintiffs, defendants San Antonio will execute a deed of resale/reconveyance/redemption of that subject property covered by TCT No. RT-6653 (T-209250) of the Registry of Deeds of Bulacan including its improvements; 2. For the release/resale/reconveyance of the other property involved in the case described in TCT No. RT-6652 (T-296744) of the Registry of
1. Did the trial court err in granting the writ to execute the compromise judgment?
1. Yes, the trial court erred in granting the writ of execution in favor of private respondents because it effectively compelled petitioners to accept delivery of the three titles in exchange for the release of the land covered by TCT No. RT-6652 even after the lapse of the six-month period. A compromise agreement, once approved by final order of the court, has the force of res judicata between the parties and should not be disturbed except for vices of consent or forgery.[9] In this case, the compromise agreement clearly provided private respondents six months, i.e. from August 25, 1993 to February 25, 1994, to deliver the titles to the three parcels of land described in the agreement. If after the lapse of the said period and no delivery is yet made by private respondents, ownership over the land covered by TCT No. RT-6652 would be transferred to petitioners. As the facts of this case show, private respondents failed to deliver the titles on February 25, 1994, as it was only on March 4, 1994, when they gave the titles to petitioners. Hence, pursuant to the terms of the compromise agreement, petitioners could rightfully refuse acceptance of the titles.
2. Is Article 1191 of the New Civil Code applicable in this case?
Deeds of Bulacan together with its improvements, plaintiffs obligate themselves to transfer the ownership of 3 lots to the defendants San Antonio namely: a. That lot including its improvements situated in Brgy. Tuctucan, Municipality of Guiguinto, Bulacan, covered by TCT No. 29832, Blk. 4, Lot No. 3 consisting of 135 square meters; b. That lot situated in Brgy. Tuctucan, Municipality of Guiguinto, Bulacan covered by TCT No. 30078, Blk. 9, Lot 27 consisting of 78 square meters; c. Another lot situated in Brgy. Tuctucan, Municipality of Guiguinto, Bulacan, covered by TCT No. 30079, Blk. No. 38 consisting of 75 square meters. Within 6 months from signing of this compromise agreement simultaneous to which delivery of the title to the afore-mentioned properties in the names of the defendants San Antonio, the defendants San Antonio will execute the corresponding instrument of resale/reconveyance/redemption over that property together with its improvements covered by TCT No. RT-6652 , for the purpose of the cancellation of the annulment of the sale in the title subject to the condition that should plaintiffs fail to deliver the titles to the three lots mentioned to the defendants San Antonio, the said plaintiffs shall be deemed to have waived and renounced any all rights, claims and demands whatsoever they may have over that property covered by TCT No. RT-6652 including its improvements and thenceforth bind themselves to respect the right of ownership, and possession of the defendants San Antonio over said property, or to pay Two Million Pesos (P2,000,000.00) within the same period; 3. That the parties further agree to set aside any claim, damages and counterclaims they may have against each other; 4. That in the meantime, the possession of the plaintiffs of the subject property covering TCT No. 6652 and TCT No. RT-6653 shall it be respect; 5. This compromise agreement shall be in full settlement of the obligations of the plaintiffs with respect to Kasulatan ng Sanglaan dated February 14, 1989 and the Susog ng Kasulatan ng Sanglaan dated July 16, 1990, subject matter of the complaint, and those related therein; 6. This compromise agreement is immediately executory. Finding the above to be in order, the trial court approved the same in its order dated September 22, 1993, thus: A careful perusal of the Compromise Agreement dated August 25, 1993 reveals that the terms and conditions thereof are not contrary to law, morals and public policy. The parties are enjoined to comply faithfully with their obligation under said agreement. However, respondents failed to deliver the 3 titles on time. Private respondents counter that there has been no modification of the final judgment when the trial judge issued the writ of execution, as the judge was merely performing a ministerial duty. Also, private respondents deny that they delivered the three titles late and if ever the delivery was delayed it was the Register of Deeds who was to blame. Private respondents additionally point out that in reciprocal obligations, like the ones in this case, delay sets in only when one party fulfills his obligation and the other is unable to perform his part of the obligation. Likewise, a person obligated to deliver something incurs in delay only after demand. As herein petitioners have not yet made the demand and as they have not yet performed their part of the agreement, which was the execution of the deed of reconveyance, delay by private respondents has not yet occurred.
2. Is Article 1191 of the New Civil Code applicable in this case? According to petitioners, the Court of Appeals erred when it found that private respondents delay did not constitute substantial breach to warrant rescission of the compromise agreement. They assert that they were not seeking rescission of the compromise agreement but its full enforcement regardless of whether the delay is slight or substantial. While indeed private respondents did not meet head on this issue, we find that it should be properly addressed. In filing the petition before the Court of Appeals, petitioners sought the appellate courts declaration that the trial court committed grave abuse of discretion. In their view, the trial court should have enforced the compromise agreement instead of rescinding it. Thus, it was error for the Court of Appeals to apply Article 1191 of the New Civil Code which concerns rescission of contract. Applicable here is Article 1159 which enjoins compliance in good faith by the parties who entered into a valid contract. Compromise agreements are contracts, whereby the parties undertake reciprocal obligations to avoid litigation, or put an end to one already commenced. WHEREFORE, the petition is GRANTED. The decision dated April 28, 1995, and resolution dated September 11, 1995, of the Court of Appeals in CA-G.R. SP No. 35271 are REVERSED AND SET ASIDE. Accordingly, the orders dated May 5, 1994, July 12, 1994 and September 1, 1994, of the Regional Trial Court of Malolos, Bulacan, Branch 22, are hereby declared NULL AND VOID. Private respondents are ordered to cease and desist from disturbing the ownership and possession by petitioners of the parcel of land covered by TCT No. RT-6652. Costs against private respondents.
William Golanco Construction v. Phil. Commercial International Bank/March 24, 2006/ BCorpuz
William Golangco Construction Corporation (WGCC) and the Philippine Commercial International Bank (PCIB) entered into a contract for the construction of the extension of PCIB Tower II on October 20, 1989. The project included, among others, the application of a granitite wash-out finish on the exterior walls of the building. PCIB, with the concurrence of its consultant TCGI Engineers (TCGI), accepted the turnover of the completed work by WGCC in a letter dated June 1, 1992. To answer for any defect arising within a period of one year, WGCC submitted a guarantee bond dated July 1, 1992 issued by Malayan Insurance Company, Inc. in compliance with the construction contract. The controversy arose when portions of the granitite wash-out finish of the exterior of the building began peeling off and falling from the walls in 1993. WGCC made minor repairs after PCIB requested it to rectify the construction defects. In 1994, PCIB entered into another contract with Brains and Brawn Construction and Development Corporation to re-do the entire granitite wash-out finish after WGCC manifested that it was "not in a position to do the new finishing work," though it was willing to share part of the cost. PCIB incurred expenses amounting to P11,665,000 for the repair work. PCIB filed a request for arbitration with the Construction Industry Arbitration Commission (CIAC) for the reimbursement of its expenses for the repairs made by another contractor. It complained of WGCCs alleged non-compliance with their contractual terms on materials and workmanship. WGCC interposed a counterclaim for P5,777,157.84 for material cost adjustment. The CIAC declared WGCC liable for the construction defects in the project. WGCC filed a petition for review with the Court of Appeals (CA) which dismissed it for lack of merit. However, its motion for reconsideration was similarly denied. There is a question of certiorari in this case.
WON petitioner WGCC is liable for defects in the granite wash-out finish that occurred after the lapse of one-year defects liability period provided in Art. XI of the construction contract?
The court ruled in favor of WGCC. The controversy pivots on a provision in the construction contract referred to as the defects liability period: Guarantee In Article XI on Guarantee - the CONTRACTOR hereby guarantees the work stipulated in this Contract, and shall make good any defect in materials and workmanship which [becomes] evident within one (1) year after the final acceptance of the work. The CONTRACTOR shall leave the work in perfect order upon completion and present the final certificate to the ENGINEER promptly. If in the opinion of the OWNER and ENGINEER, the CONTRACTOR has failed to act promptly in rectifying any defect in the work which appears within the period mentioned above, the OWNER and the ENGINEER may, at their own discretion, using the Guarantee Bond amount for corrections, have the work done by another contractor at the expense of the CONTRACTOR or his bondsmen. However, nothing in this section shall in any way affect or relieve the CONTRACTORS responsibility to the OWNER. Although both parties based their arguments on the same stipulations, they reached conflicting conclusions. A careful reading of the stipulations, however, leads us to the conclusion that WGCCs arguments are more tenable. Autonomy of Contracts The autonomous nature of contracts is enunciated in Article 1306 of the Civil Code. Article 1306. The contracting parties may establish such stipulations, clauses, terms and conditions as they may deem convenient, provided they are not contrary to law, morals, good customs, public order, or public policy. Obligations arising from contracts have the force of law between the parties and should be complied with in good faith. The adoption of a one-year guarantee, as done by WGCC and
PCIB, is established usage in the Philippines for private and government construction contracts. However, the contract did not specify a different period for defects in the granitite wash-out finish; hence, any defect therein should have been brought to WGCCs attention within the one-year defects liability period in the contract. The inclusion in a written contract for a piece of work, such as the one in question, of a provision defining a warranty period against defects, is not uncommon. This kind of a stipulation is of particular importance to the contractor, for as a general rule, after the lapse of the period agreed upon therein, he may no longer be held accountable for whatever defects, deficiencies or imperfections that may be discovered in the work executed by him. Unfulfilled Obligations PCIB calls our attention to Article 62.2 which provides: Notwithstanding the issue of the Defects Liability Certificate[,] the Contractor and the Owner shall remain liable for the fulfillment of any obligation[,] incurred under the provisions of the Contract prior to the issue of the Defects Liability Certificate[,] which remains unperformed at the time such Defects Liability Certificate is issued[. And] for the purpose of determining the nature and extent of any such obligation, the Contract shall be deemed to remain in force between the parties of the Contract. (emphasis ours). Ruling The lower courts conjectured that the peeling off of the granitite washout finish was probably due to "defective materials and workmanship." This they characterized as hidden or latent defects. WGCC does not agree with the conclusion that the alleged defects were hidden. First, PCIBs team of experts (who were specifically employed to detect such defects early on) supervised WGCCs workmanship. Second, WGCC regularly submitted progress reports and photographs. Third, WGCC worked under fair and transparent circumstances. PCIB had access to the site and it exercised reasonable
supervision over WGCCs work. Fourth, PCIB issued several "punch lists" for WGCCs compliance before the issuance of PCIBs final certificate of acceptance. Fifth, PCIB supplied the materials for the granitite washout finish. And finally, PCIBs team of experts gave their concurrence to the turnover of the project. The purpose of the defects liability period was precisely to give PCIB additional, albeit limited, opportunity to oblige WGCC to make good any defect, hidden or otherwise, discovered within one year. Contrary to the CAs conclusion, the first sentence of the third paragraph of Article XI on guarantee previously quoted did not operate as a blanket exception to the one-year guarantee period under the first paragraph. Neither did it modify, extend, nullify or supersede the categorical terms of the defects liability period. Under the circumstances, there were no hidden defects for which WGCC could be held liable. Neither was there any other defect for which PCIB made any express reservation of its rights against WGCC. Indeed, the contract should not be interpreted to favor the one who caused the confusion, if any. The contract was prepared by TCGI for PCIB. WHEREFORE, the petition is hereby GRANTED. The decision of the Court of Appeals in CA-G.R. SP No. 41152 is ANNULED and SET ASIDE. etrobank was empowered to make lawful deductions from ari as accounts for such amounts due it. This was authorized in the Promissory Notes and eeds of Assignment with Power of Attorney executed by ari as, under which he gave Metrobank a general lien on, and/or a right of set-off and/or the right to apply to his loan account, all his rights, title and interest in any of his deposit accounts held by Metrobank. As provided in Article 1159 of the Civil Code, obligations arising from contract have the force of law between the contracting parties and should be complied with in good faith. Verily, parties may freely stipulate their duties and obligations which perforce would be binding on them. Not being repugnant to any
Metropolitan Bank & Trust Comp. v. Marinas/July 2010/ KDelacruz
arry ari as ( ari as) opened a personal dollar savings account by depositing US$100,000. with etropolitan Bank and Trust Company ( etrobank). On 3 April 998, ari as obtained a Php2.3million loan from Metrobank, payable on 8 April 1999 with 22.929% annual interest. He withdrew US$67,227.95 from his US$100,000.00 savings deposit and placed it in a Foreign Currency Deposit account (FCD 1) which he used as security for said loan. He opened two more FCD accounts, depositing in them US$25,000.00 (FCD 2) and US$17,000.00 (FCD 3), respectively. He used FCD 3 as security for a second loan of Php645,150.00 which he obtained from the same bank on 30 April 1999 and which was payable on 24 April 2000 with 16.987% annual interest. The principal of the first loan was paid on 21 April 1999 out of FCD 1, while the principal of the second loan was paid on 10 May 1999 (or barely a month after the loan was taken out) out of FCD 3. ari as later discovered that etrobank made deductions from his accounts which were all depleted. He demanded a complete accounting and a restoration of his dollar deposits without deductions. In response, etrobank explained that the deductions were used to pay for the interest due on his loans. It added that such
Whether or not etrobanks deductions from ari as dollar accounts were valid.
deductions were authorized by ari as through the eeds of Assignment with Power of Attorney which he voluntarily executed and under which he gave Metrobank a general lien on, and/or a right of set-off, and/or the right to apply to his loan account, all his rights, title and interest in any of his deposit accounts held by Metrobank. nconvinced, ari as filed a case for Damages against Metrobank and the Manager of the Metrobank Branch where he opened said accounts. The Regional Trial Court (RTC) held that the deductions were valid but Metrobank and the Branch Manager should account for and return the US$30,000.00 and S 25, . deposits since these were not assigned to answer for the loans. The RTC held etrobank and the Branch anager solidarily liable to pay ari as moral and exemplary damages. On appeal, the Court of Appeals sustained the RTCs decision but absolved the Branch Manager from liability absent proof of bad faith or gross negligence or a personal commitment to answer for such liability. Metrobank, thus, brought the case to the Supreme Court for review.
legal proscription, the said stipulation must be respected and given the force of law between the parties. In addition to its authority to effect deductions from ari ass accounts for the principal loan amount, Metrobank was authorized to make further deductions for interest payments as stipulated. However, the issue of whether it acted judiciously was an entirely different matter. As a business affected with public interest, and because of the nature of their functions, banks are under obligation to treat the accounts of their depositors with meticulous care, always having in mind the fiduciary nature of their relationship. ari as had interest-earning deposits with etrobank. Considering the total amount of ari as deposits in his dollar accounts inclusive of interests earned vis- -vis his total obligations to etrobank, the total depletion of his accounts was not warranted. Thus, despite its authority to make lawful deductions from ari as deposit accounts, Metrobank should still account for whatever excess deductions made on ari as deposits and return to him such excess amounts together with earned interest. For this reason, the award of damages was upheld. YES. SC finds the PCICs position meritorious. The issue before us calls for a discussion of a courts basic appreciation of allegations in a complaint. The fundamental rule is that reliefs granted to a litigant are limited to those specifically prayed for in the complaint; other reliefs prayed for may be granted only when related to the specific prayer(s) in the pleadings and supported by the evidence on record. Necessarily, any such relief may be granted only where a cause of action therefor exists, based on the complaint, the pleadings, and the evidence on record. It must be borne in mind that each of the two bonds is a distinct contract by itself, subject to its own terms and conditions. The extent of a surety's liability is determined only by the clause of the contract of suretyship
Phil. Charter Insurance Corp. v. Phil. National Construction/ Oct. 2009/ RDilangalen
PNCC, engaged in the construction business and tollway operations, conducted a public bidding on October 16, 1997 for the supply of labor, materials, tools, supervision, equipment, and other incidentals necessary for the fabrication and delivery of 27 tollbooths to be used for the automation of toll collection along the expressways. Orlando Kalingo won in the bidding and therefore was awarded the contract. Thereafter, PNCC issued two Purchase Order (P.O.) Nos. namely-71024L for 25 units of tollbooths (P2,100,000) and 71025L for two units of tollbooths (P168, 000). These issuances were subject to the condition that each P.O. shall be covered by surety bond (50% of the total cost reflected on the P.O.) and that the surety bond shall continue in full force until the supplier shall have complied with all the undertakings and convenants to the full satisfaction of PNCC. Kalingo, hence posted surety bonds--Surety Bond Nos. 27546 and 27547--issued by the PCIC. The terms and conditions read as follows: XXXXXXXXXXXXXXX Surety Bond No. 27546 To supply labor, materials, tools, supervision equipment, and other incidentals necessary for the fabrication and delivery of Two (2) Units Toll Booth at San Fernando Interchange SB Entry as per Purchase Order No. 7 25 , copy of which is attached as Annex A. This bond also guarantees the repayment of the down payment or whatever balance thereof in the event of failure on the part of the
WON THE APPELLATE COURT ERRED IN RULING THAT PCIC SHOULD ALSO BE HELD LIABLE UNDER BOND NO. 27546 which was not included in the complaint filed by PNCC
Principal to finish the project due to his own fault. Surety Bond No. 27547 To supply labor, materials, tools, supervision equipment, and other incidentals necessary for the fabrication and delivery of Twenty-five (25) Units Toll Booth at designated Toll Plaza as per Purchase Order No. 7 24 , copy of which is attached as AnnexA. This bond also guarantees the repayment of the down payment or whatever balance thereof in the event of failure on the part of the Principal to finish the project due to his own fault. To illustrate, the PCIC surety bonds are in the amounts corresponding to down payments on each P.O., as follows: Surety Bond No. Purchase Units Order Covered Total Cost Surety Amount(equivalent to 50% down payment) P1,050,000
and by the conditions stated in the bond. It cannot be extended by implication beyond the terms of the contract. Equally basic is the principle that obligations arising from contracts have the force of law between the parties and should be complied with in good faith. In the case at bar, PCIC will not be liable for any claim not presented to it in writing as stipulated in the contract within 15 days from the expiration of the bond. For its failure to file a written claim with PCIC within 5 days from the bonds expiry date, PNCC clearly waived its right to collect under PCIC Bond No. 27546. PNCC complied with the written claim provision ONLY with respect to PCIC Bond No. 27547.Conversely, nothing in the records shows that PNCC ever complied with the provision with respect to PCIC Bond No. 27546. Under the circumstances, PNCCs cause of action with respect to PCIC Bond No. 27546 did not and cannot exist, such that no relief for collection thereunder may be validly awarded. Furthermore, PCIC Bond No. 27546 was not raised or pleaded in the complaint, ergo the same cannot juridically exist and no cause of action must arise in PNCCs favor with respect to this bond. Consequently, the CA invalidly rendered judgment with respect to the subject bond.
Bond No.27547 Bond No.27546
P.O. No. 71024L P.O. No. 71025L
25
P2,100,000
P 168,000
P 84,000
The following stipulation appears further in the last paragraph of these bonds: The liability of PCIC under this bond will expire on March 16, 1998. Furthermore, it is hereby agreed and understood that PCIC will not be liable for any claim not presented to it in writing within FIFTEEN (15) DAYS from the expiration of this bond, and that the Obligee (PNCC) hereby waives its right to claim or file any court action against the Surety after the termination of FIFTEEN (15) DAYS from the time its cause of action accrues. XXXXXXXXXXXXXXX March 3-5, 1998-- Kalingo made partial/initial delivery of four units of tollbooths under P.O. No. 71024L. However, the tollbooths delivered were incomplete or were not fabricated according to PNCC specifications. Kalingo failed to deliver the other 23 tollbooths up to the time of filing of the complaint; despite demands, he failed and refused to comply with his obligation under the POs. March 9, 1998-- six days before the expiration of the surety bonds and after the expiration of the delivery period provided for under the award, PNCC filed a written extrajudicial claim against PCIC notifying it of Kalingos default and demanding the repayment of the down payment on P.O. No. 71024L as secured by PCIC Bond No. 27547, in the amount of P1,050,000.00. April 24, 2001, PNCC filed with the RTC a complaint for collection of a sum of money against Kalingo and PCIC. PNCC's complaint involved only the collection of money solely on Bond No. 27547; it did not raise or plead collection under PCIC Bond No. 27546. PCIC argued that the partial delivery of four out of the 25 units of tollbooth under P.O. No. 71024L should reduce Kalingo's obligation. The court did not agree and ruled the case in favor of PNCC. Apparently, the court also made no ruling on PCICs liability under PCIC Bond No. 27546, a claim that was not pleaded in the complaint. On appeal, the appellate court held that PCIC, as surety, is liable jointly and severally with Kalingo for the amount of the two bonds securing the two POs to Kalingo; thus, the CA also held PCIC liable under surety Bond No. 27546 which secured the P84,000.00 down
payment on P.O. No. 71025L. PCIC, having been denied for reconsideration, file this petition for review on certiorari. Delos Reyes v. Alejado/ LEnriquez On or about January 22, 1905, Veronica Alojado received, as a loan, from Benito de los Reyes that the sum P67 .60, for the purpose of paying a debt she owed to Olimpia Zaballa. It was agreed between Alojado and Reyes that the debtor should remain as a servant in the house and in the service of her creditor, without any renumeration whatever, until she should find someone who would furnish her with the said sum where with to repeat the loan. The defendant, Veronica Alojado, afterwards left the house of the plaintiff, on March 12, 1906, without having paid him her debt, nor did she do so at any subsequent date, notwithstanding his demands. The plaintiff, therefore, filed suit against Veronica Alojado to recover the said sum or, in a contrary case, to compel her to return to his service. The trial court rendered judgment whereby he sentenced the defendant to pay to the plaintiff the sum claimed and declared that, in case the debtor should be insolvent, she should be obliged to fulfill the agreement between her and the plaintiff, which was reversed in favor of defendant. Hence, this appeal. The defendant appealed from the said judgment, denying all the allegations of the complaint and alleged that, although she had left the plaintiff's service, it was because the latter had paid her no sum whatever for the services she had rendered in his house. Whether or not the agreement entered into by both parties is valid. The duty to pay the said sum, as well as that of P11.97 delivered to the defendant in small amounts during the time that she was in the plaintiff's house, is unquestionable, inasmuch as it is a positive debt demandable of the defendant by her creditor. However, the reason alleged by the plaintiff as a basis for the loan is untenable, to wit, that the defendant was obliged to render service in his house as a servant without remuneration whatever and to remain therein so long as she had not paid her debt, inasmuch as this condition is contrary to law and morality. Domestic services are always to be remunerated, and no agreement may subsist in law in which it is stipulated that any domestic service shall be absolutely gratuitous, unless it be admitted that slavery may be established in this country through a covenant entered into between the interested parties. Action for damages of payment of the debt should be brought. Petition is dismissed. (1) It is alleged in support of this contention that plaintiff and defendant were residents of the Island of Catanduanes, as would appear, as the plaintiff is concerned, from a power of attorney, executed by him to Antonio Vallejo Valencia and introduced in evidence during the trial. This power of attorney was executed August 22, 1901. The instrument in fact contains the statement that plaintiff was a resident of Catanduanes. Nothing is said however, either in the power of attorney or in the contract upon which this action is based, as to the residence of the defendant. The complaint was filed March 10, 1905, and it alleges that both plaintiff and defendant were residents of the city of Manila. This allegation was not either generally or specifically denied by the defendant, who refused and failed to give an answer to the complaint, having merely demurred thereto. This allegation, therefore, must be demurred admitted. The power of attorney above referred to
Molina vs. De La Riva/ March 1906 / LFordan
This is an action to recover a debt due upon a contract executed July 27, 1903, whereby plaintiff transferred to the defendant the abaca and coprax business theretofore carried on by him at various places in the Island of Catanduanes, with all the property and right pertaining to the said business, or the sum of 134,636 pesos and 12 cents, payable in Mexican currency or its equivalent in local currency. Defendant paid at the time of the execution of the contract, on account of the purchase price, the sum of P33,659 pesos and 3 cents, promising to pay the balance on three installments P33,659 pesos and 3 cents each, with interest at the rate of 5 per cent per annum from the date of the contract. The first installment became due July 27, 1904. It was for the recovery of this first installment that their action was brought in the Court of First Instance of the City of Manila. Defendant demurred to the complaint on the ground that the court had no jurisdiction of the subject of the action. The court overruled the demurrer and defendant refused to and did not, as a matter of fact, answer plaintiffs complaint. Judgment having been rendered in favor of the plaintiff for the sum of 33,659 pesos and 3 cents, Mexican currency, equal to 30,052 pesos and 70 centavos, Philippine currency, an interest thereon at the rate of 5 per cent per annum from July 27, 1903 and costs, the defendant duly excepted.
(1) WON the court had no jurisdiction of the subject of the action. (2) WON the court erred in fixing in Philippine currency the sum which the appellee should recover. (3) WON the court erred in rendering judgment in a sum larger than that sought to be recovered in the complaint. (4) WON the court took into consideration as the basis of its judgment
the contract in question.
having been executed in August, 1901, does not and can not by itself prove that the parties were not residents of the city of Manila in March, 1905, when the complaint was filed. The actual residence, and not that which the parties had four years, prior to the filing of the complaint, is the one that should govern the question as to the jurisdiction of the court. Both parties to this case being residents the city of Manila, it is apparent that the Court of First Instance of that city had jurisdiction to try and determine this action. (2) The second error assigned by the appellant is that the court erred in fixing in Philippine currency the sum which the appellee should recover, without hearing evidence as to the relative value of Mexican and Philippine currency. The amount sought to be recovered in this action, under the terms of the contract, was 33,859 pesos and 3 cents, payable in Mexican currency, or its equivalent in local currency. Consequently it was not necessary for the court to hear evidence as to the relative value of Mexican and Philippine currency. There is no dispute between the parties as to the fact that the 33,659 pesos and 3 Cents, Mexican currency, referred to in the contract, were equal to 28,049 pesos and 19 centavos, Philippine currency, at the time of the filing of the complaint. The proof required by section 3 of Act No. 1045, cited by the appellant, should be received only when the parties disagree as to the relative value of the currency. The court below did not, therefore, err in not hearing evidence upon this point, even under the assumption that no such evidence as heard in regard thereto, as claimed by the appellant. (3) The third error assigned by the appellant is that the court erred in rendering judgment in a sum larger than that sought to be recovered in the complaint. The prayer of the complaint is for the specific amount of 28,049 pesos and 19 centavos, Philippine currency, and the court in its judgment ordered the defendant
to pay to the plaintiff 30,052 pesos and 70 centavos, in the same currency. Section 126 of the Code of Civil Procedure provides in part as follows: The relief granted to the plaintiff, if there be no answer, can not exceed that which he shall have demanded in his complaint. . . . The defendant failed to answer. Under such circumstances plaintiff could not have obtained more than what he had demanded in his complaint. Plaintiffs demand was for the sum of 28,049 pesos and 19 centavos only. The court had no power to enter judgment in favor of the plaintiff for 30,052 pesos and 70 centavos. We hold that this was error on the part of the trial court. The judgment of the court below should be modified in this respect. (4) The fourth and last error assigned by the appellant is that the court took into consideration as the basis of its judgment the contract in question, the same being null and void. The appellant alleges in support of his contention that the contract did not bear the internal-revenue stamp required by Act No. 1045 of the Philippine Commission enacted January 27, 1904, and relies particularly upon the provisions of sections 9 and 10 of the act. It seems clear from the language of these two latter sections that only such contracts payable in local currency as were made on or after October 1, 1904, are subject to the stamp tax. The provisions of the section in question are very clear and leave no room for doubt. Sections 9 and 10 are merely supplementary to sections 6 and 7. They provide a method for proving the exemption from the stamp tax and penalty in case of failure to comply with the provisions of sections 6 and 7. These latter sections are the ones which require a stamp tax upon all contracts payable in local currency and declare what documents shall be subject to such tax. It is therefore necessary to construe these sections together with sections 9 and 10 in order to arrive at the proper conclusion. A full and correct interpretation of the act in question
would not be possible if we only consider the two latter sections. They are, as has been said before, merely supplementary to the preceding sections. The contract under consideration was executed July 27, 1903. Such contract was not subject to the stamp tax provided in Act No. 1045. The penalty of nullity prescribed in section 10 of the act is not applicable to that contract. The court, therefore, committed no error in finding that the absence of revenue stamp did not render the contract void. The judgment of the court below is hereby affirmed, provided, however, that the plaintiff shall only be entitled to recover from the defendant the sum of 28,049 pesos and 19 centavos, Philippine currency, with accrued interest thereon from July 27, 1903, until fully paid, at the rate of 5 per cent per annum, no special order being made as to costs of this appeal. After the expiration of twenty days from the date hereof let judgment be entered accordingly, and let the case be remanded to the Court of First Instance for such action as may be proper. So ordered. 1161 Maniago v. CA/Feb. 1996/ YGalias
Petitioner Ruben Maniago was the owner of shuttle buses which were used in transporting employees of the Texas Instruments,Philippines Inc. from Baguio City proper to its plant site at the Export Processing Authority in Loakan, Baguio City. On January 7, 1990, one of his buses figured in a vehicular accident with a passenger jeepney owned by private respondent Alfredo Boado Maniago moved for the suspension of the proceeding in the civil case denied by trial court; the reasons are first, pursuant to the Civil Code, the action could proceed independently of the criminal action and Maniago was not the accused in the criminal case. Maniago filed petition for Certiorari and Prohibition with CA, Maniago says civil action could not proceed independently of the criminal case because no reservation of the right to bring it separately had been made a court of appeals dismissed petition;.Hence, this petition for review on certiorari.
WON respondent Boada may bring an action for damages against Maniago under 2176 and 2180 of the Civil Code despite the absence of reservation in the criminal case previously filed.
NO, In the present case, the criminal action was filed against the employee, bus driver. Had the driver been convicted and found insolvent, his employer would have been held subsidiarily liable for damages. But if the right to bring a separate civil action (whether arising from the crime or from quasi-delict) is reserved, there would be no possibility that the employer would be held liable because in such a case there would be no pronouncement as to the civil liability of the accused. In such a case the institution of a separate and independent civil action under the Civil Code would not result in the employee being held liable for the same act or omission. The rule requiring reservation in the end serves to implement the prohibition against double recovery for the same act or omission. As held in Barredo v. Garcia, the injured party must choose which of the available causes of action for damages he will bring. If he fails to reserve the filing of a separate civil action he will be deemed to have elected to recover damages from the bus driver on the basis of the crime. In such a case his cause of action against the employer will be limited to the recovery of the latters subsidiary liability under Art. 103 of the Revised Penal Code.
San Ildefonso Lines/ NGumba

Joaquin et al v. Aniceto/ October 1964/ CIncio
While Pilar Joaquin was on the sidewalk of Aviles Street, Manila, on April 27, 1960, a taxicab driven by Felix Aniceto and owned by Ruperto Rodelas bumped her. As a result, she suffered physical injuries. Aniceto was charged with serious physical injuries through reckless imprudence. He was subsequently found guilty and sentenced to imprisonment. However, no ruling was made on his civil liability to the offended party in view of Joaquin's reservation to file a separate civil action for damages for the injuries suffered by her. Aniceto appealed the judgment of conviction. While the criminal case was thus pending, Pilar Joaquin, the injured party, filed this case for damages in accordance with the reservation which she had earlier made. Felix Aniceto and Ruperto Rodelas, driver and owner, respectively, of the taxicab were made party defendants. The lower court dismissed the case on the ground that in the absence of a final judgment of conviction against the driver in the criminal case, any action to enforce the employer's subsidiary civil liability would be premature. Such liability, the trial court added, may only be enforced on proof of the insolvency of the employee.
May an employee's primary civil liability for crime and his employer's subsidiary liability therefor be proved in a separate civil action even while the criminal case against the employee is still pending?
According to appellant, her action is one to enforce the civil liability arising from crimes. With respect to obligations arising from crimes, Article 1161 of the New Civil Code provides: Civil obligations arising from criminal offenses shall be governed by the penal laws, subject to the provisions of article 2177, and of the pertinent provisions of Chapter 2, Preliminary, Title, on Human Relations, and of Title XVIII of this Book, regulating damages. The Revised Penal Code provides in turn that "every person criminally liable for a felony is also civilly liable" and that in default of the persons criminally liable, employers, teachers persons and corporations engaged in any kind of industry shall be civilly liable for felonies committed by their servants, pupils, workmen, apprentices or employees in the discharge of their duties. It is now settled that for an employer to be subsidiarily liable, the following requisites must be present: (1) That an employee has committed a crime in the discharge of his duties; (2) that said employee is insolvent and has not satisfied his civil liability; (3) that the employer is engaged in some kind of industry. Without the conviction of the employee, the employer cannot be subsidiarily liable. Now, it is no reason to bring such action against the employer on the ground that in cases of defamation, fraud and physical injuries, Article 33 of the Civil Code authorizes a civil action that is "entirely separate, and distinct from the criminal action," Article 33 cannot be made applicable to an employer in a civil action for subsidiary liability. What this article 33 authorizes is an action against the employee on his primary civil liability. It cannot apply to an action against the employer to enforce his subsidiary civil liability because such liability arises only after conviction of the employee in the criminal case. Any action brought against him before the conviction of his employee is premature. In cases of negligence, the injured party or his heirs has the choice, between an action to enforce the civil liability arising from crime under Article 100 of the Revised Penal Code and an action for quasi-delict under Articles 21762194 of the Civil Code. If he chooses an action for quasi-delict, he may hold an employer liable for the negligent act of the employee subject, however, to the employer's defense of exercise of the diligence of a good father of the family. (Art. 2180, Civil Code) On the other hand, should he choose to prosecute his action under Article 100 of the Penal Code, he can hold the employer subsidiarily liable only upon prior conviction of the employee. While a separate and independent civil action for damages may be brought
against the employee under Article 33 of the Civil Code, no such action may be filed against the employer on the latter's subsidiary civil liability because such liability is governed not by the Civil Code but by the Penal Code, under which conviction of the employee is a condition sine qua non for the employer's subsidiary liability. Pacis vs. Morales/ February 2010/KJavier On January 1991, 17 year old-Alfred Dennis Pacis died due to a gunshot wound in the head which he sustained while he was at the Top Gun Firearm[s] and Ammunition[s] Store located at Upper Mabini Street, Baguio City. The gun store was owned and operated by defendant Jerome Jovanne Morales. With Alfred Pacis at the time of the shooting were Aristedes Matibag and Jason Herbolario. They were sales agents of the defendant, and at that particular time, the caretakers of the gun store. The gun, an AMT Automag II Cal. 22 Rimfire Magnum was left by defendant Morales in a drawer of a table located inside the gun store. It was supposedly for a repair. Defendant Morales was in Manila at the time. His employee Armando Jarnague, who was the regular caretaker of the gun store was also not around. He left earlier and requested sales agents Matibag and Herbolario to look after the gun store while he and defendant Morales were away. Jarnague entrusted to Matibag and Herbolario a bunch of keys used in the gun store which included the key to the drawer where the fatal gun was kept. It appears that Matibag and Herbolario later brought out the gun from the drawer and placed it on top of the table. Attracted by the sight of the gun, the young Alfred Dennis Pacis got hold of the same. Matibag asked Alfred Dennis Pacis to return the gun. The latter followed and handed the gun to Matibag. It went off, the bullet hitting the young Alfred in the head. A criminal case for homicide was filed against Matibag before branch VII of this Court. Matibag, however, was acquitted of the charge against him because of the exempting circumstance of "accident" under Art. 12, par. 4 of the Revised Penal Code. By agreement of the parties, the evidence adduced in the criminal case for homicide against Matibag was reproduced and adopted by them as part of their evidence in the instant case. The trial court held respondent civilly liable for the death of Alfred under Article 2180 in relation to Article 2176 of the Civil Code. The trial court held that the accidental shooting of Alfred which caused his death was partly due to the negligence of respondents employee Aristedes Matibag (Matibag). Under the Civil Code, WON THE PETITIONERS (parents of Alfred) HAS CLEAR RIGHTS TO THE AWARD OF DAMAGES. We find the petition meritorious. Under Article 1161 of the Civil Code, petitioners may enforce their claim for damages based on the civil liability arising from the crime under Article 100 of the Revised Penal Code or they may opt to file an independent civil action for damages under the Civil Code. In this case, instead of enforcing their claim for damages in the homicide case filed against Matibag, petitioners opted to file an independent civil action for damages against respondent whom they alleged was atibags employer. Petitioners based their claim for damages under Articles 2176 and 2180 of the Civil Code. Unlike the subsidiary liability of the employer under Article 103 of the Revised Penal Code, the liability of the employer, or any person for that matter, under Article 2176 of the Civil Code is primary and direct, based on a persons own negligence. Article 2 76 states: Art. 2176. Whoever by act or omission causes damage to another, there being fault or negligence, is obliged to pay for the damage done. Such fault or negligence, if there is no pre-existing contractual relation between the parties, is called quasi-delict and is governed by the provisions of this Chapter. This case involves the accidental discharge of a firearm inside a gun store.1avvphi1 Under PNP Circular No. 9, entitled the "Policy on Firearms and Ammunition Dealership/Repair," a person who is in the business of purchasing and selling of firearms and ammunition must maintain basic security and safety requirements of a gun dealer, otherwise his License to Operate Dealership will be suspended or canceled. Indeed, a higher degree of care is required of someone who has in his possession or under his control an instrumentality extremely dangerous in character, such as dangerous weapons or substances. Such person in possession or control of dangerous instrumentalities has the duty to take exceptional precautions to prevent any injury being done thereby. Unlike the ordinary affairs of life or business which involve little or no risk, a business dealing with dangerous weapons requires the exercise of a higher degree of care. As a gun store owner, respondent is presumed to be knowledgeable about firearms safety and should have known never to keep a loaded weapon in his store to avoid unreasonable risk of harm or injury to others. Respondent has the duty to ensure that all the guns in his store are not loaded. Firearms should be stored unloaded and separate from ammunition when the firearms are not needed for ready-access defensive use.
respondent (owner) is liable for the damages caused by Matibag on the occasion of the performance of his duties, unless respondent proved that he observed the diligence of a good father of a family to prevent the damage. The trial court held that respondent failed to observe the required diligence when he left the key to the drawer containing the loaded defective gun without instructing his employees to be careful in handling the loaded gun. The CA held that respondent cannot be held civilly liable since there was no employeremployee relationship between respondent and Matibag as the latter is only paid in commission basis. The CA found that Matibag was not under the control of respondent with respect to the means and methods in the performance of his work. There can be no employer-employee relationship where the element of control is absent. Thus, Article 2180 of the Civil Code does not apply in this case and respondent cannot be held liable. Furthermore, the CA ruled that even if respondent is considered an employer of Matibag, still respondent cannot be held liable since no negligence can be attributed to him. 1162 Picart v Smith/ March 1915/JMacacua
Clearly, respondent did not exercise the degree of care and diligence required of a good father of a family, much less the degree of care required of someone dealing with dangerous weapons, as would exempt him from liability in this case. WHEREFORE, we GRANT the petition. CA decision is set aside, and Trial Courts decision is REINSTATE .
On 12 December 1912, on the Carlatan Bridge, at San Fernando, La Union, Amado Picart was riding on his pony over said bridge. Before he had gotten half way across, Frank Smith Jr. approached from the opposite direction in an automobile, going at the rate of about 10 or 12 miles per hour. As Smith neared the bridge he saw a horseman on it and blew his horn to give warning of his approach. He continued his course and after he had taken the bridge he gave two more successive blasts, as it appeared to him that the man on horseback before him was not observing the rule of the road. Picart saw the automobile coming and heard the warning signals. However, being perturbed by the novelty of the apparition or the rapidity of the approach, he pulled the pony closely up against the railing on the right side of the bridge instead of going to the left. As the automobile approached, Smith guided it toward his left, that being the proper side of the road for the machine. In so doing Smith assumed that the horseman would move to the other side. The pony had not as yet exhibited fright, and the rider had made no sign for the automobile to stop. Seeing that the pony was apparently quiet, Smith, instead of veering to the right while yet some distance away or slowing down, continued to approach directly toward the horse without diminution of speed. When he had gotten quite near, there being then no possibility of the horse getting across to the other side, Smith quickly turned his car sufficiently to the right to escape hitting the horse alongside of the railing where it was then standing; but in so doing the
Whether or not Smith is guilty of negligence.
Yes. Smith, in maneuvering his car in the manner described, was guilty of negligence such as gives rise to a civil obligation to repair the damage done. In the nature of things the control of the situation had passed entirely to Smith, and it was his duty either to bring his car to an immediate stop or, seeing that there were no other persons on the bridge, to take the other side and pass sufficiently far away from the horse to avoid the danger of collision. Instead of doing this, Smith ran straight on until he was almost upon the horse. When Smith exposed the horse and rider to this danger he was negligent in the eye of the law. The test by which to determine the existence of negligence in a particular case may be stated as follows: Did the defendant in doing the alleged negligent act use that person would have used in the same situation? If not, then he is guilty of negligence. What would constitute the conduct of a prudent man in a given situation must of course be always determined in the light of human experience and in view of the facts involved in the particular case. Abstract speculation cannot be of much value; as reasonable men govern their conduct by the circumstances which are before them or known to them, and hence they can be expected to take care only when there is something before them to suggest or warn of danger. Reasonable foresight of harm is always necessary before negligence can be held to exist. In fine, the Atty, Espejo Addu Law 19 OBLI Case Digests Uno Manresa 2012 2013
automobile passed in such close proximity to the animal that it became frightened and turned its body across the bridge with its head toward the railing. In so doing, it was struck on the hock of the left hind leg by the flange of the car and the limb was broken. The horse fell and its rider was thrown off with some violence. As a result of its injuries the horse died. Picart received contusions which caused temporary unconsciousness and required medical attention for several days. BPI Express Credit Card v. CA/ Sep. 1998/ AMartinez The case arose from the dishonor of the credit card of the plaintiff Atty. Ricardo J. Marasigan by Cafe Adriatico, a business establishment accredited with the defendant-appellant BPI Express Card Corporation (BECC for brevity) on December 8, 1989 when the plaintiff entertained some guests thereat. The records of this case show that plaintiff, who is a lawyer by profession was a complimentary member of BECC from February 1988 to February 1989 and was issued Credit Card No. 100-012-5534 with a credit limit of P3,000.00 and with a monthly billing every 27th of the month (Exh. N), subject to the terms and conditions stipulated in the contract (Exh. 1-b). His membership was renewed for another year or until February 1990 and the credit limit was increased to P5,000.00 (Exh. A). The plaintiff oftentimes exceeded his credit limits (Exhs. I, I-1 to I-12) but this was never taken against him by the defendant and even his mode of paying his monthly bills in check was tolerated. Their contractual relations went on smoothly until his statement of account for October, 1989 amounting to P8,987.84 was not paid in due time. Plaintiff issued Far East Bank and Trust Co. Check No. 494675 in the amount of P15,000.00, postdated December 15, 1989 which was received on November 23, 1989 by Tess Lorenzo, an employee of the defendant (Exhs. J and J-1), who in turn gave the said check to Jeng Angeles, a coemployee who handles the account of the plaintiff. The check remained in the custody of Jeng Angeles. Mr. Roberto Maniquiz, head of the collection department of defendant was formally informed of the postdated check about a week later. On November 28, 1989, defendant served plaintiff a letter by ordinary mail informing him of the temporary suspension of the privileges of his credit card and the inclusion of his account number in their Caution List. He was also told to refrain from further use of his credit card to avoid any inconvenience/embarrassment and that unless he settles his outstanding account with the defendant within 5 days from receipt of the letter, his membership will be permanently cancelled (Exh. 3). There is no showing that the plaintiff received this letter before December 8, 1989. Confident that he had settled his account with the THE LOWER COURT ERRED IN DECLARING THAT THERE WAS INDEED AN AGREEMENT OR ARRANGEMENT ENTERED INTO BETWEEN THE PARTIES WHEREIN THE DEFENDANT REQUIRED THE PLAINTIFF TO ISSUE A POSTDATED CHECK IN ITS FAVOR IN THE AMOUNT OF P15,000.00 AS PAYMENT FOR HIS OVERDUE ACCOUNTS, WITH THE CONDITION THAT THE PLAINTIFF'S CREDIT CARD WILL NOT BE SUSPENDED OR CANCELLED. THE LOWER COURT ERRED IN HOLDING DEFENDANT LIABLE FOR DAMAGES AND ATTORNEY'S FEES ARISING OUT FROM THE DISHONOR OF THE PLAINTIFF'S CREDIT CARD.
proper criterion for determining the existence of negligence in a given case is this: Conductis said to be negligent when a prudent man in the position of the tortfeasor would have foreseen that an effect harmful to another was sufficiently probable to warrant his foregoing the conduct or guarding against its consequences.
We find the petition meritorious. Whether prior to the suspension of private respondent's credit card on 28 November 1989, the parties entered into an agreement whereby the card could still be used and would be duly honored by duly accredited establisments. We agree with the findings of the respondent court, that there was an arrangement between the parties, wherein the petitioner required the private respondent to issue a check worth P15,000 as payment for the latter's billings. However, we find that the private respondent was not able to comply with his obligation. Clearly, the purpose of the arrangement between the parties on November 22, 1989, was for the immediate payment of the private respondent's outstanding account, in order that his credit card would not be suspended. As agreed upon by the parties, on the following day, private respondent did issue a check for P15,000. However, the check was postdated 15 December 1989. Settled is the doctrine that a check is only a substitute for money and not money, the delivery of such an instrument does not, by itself operate as payment. This is especially true in the case of a postdated check. Thus, the issuance by the private respondent of the postdated check was not effective payment. It did not comply with his obligation under the arrangement with Miss Lorenzo. Petitioner corporation was therefore justified in suspending his credit card. Finally, we find no legal and factual basis for private respondent's assertion that in canceling the credit card of the private respondent, petitioner abused its right under the terms and conditions of the contract. To find the existence of an abuse of right under Article 19 the following elements must be present: (1) There is a legal right or duty; (2) which is exercised in bad faith; (3) for the sole intent of prejudicing or injuring another. Time and again this Court has held that good faith is presumed and the burden of proving bad faith is on the party alleging it. This private respondent failed to do. In fact, the action of the petitioner belies the existence of bad faith. As early as 28 October 1989, petitioner could have suspended private respondent's card outright. Instead,
issuance of the postdated check, plaintiff invited some guests on December 8, 1989 and entertained them at Caf Adriatico. When he presented his credit card to Caf Adriatico for the bill amounting to P735.32, said card was dishonored. One of his guests, Mary Ellen Ringler, paid the bill by using her own credit card, a Unibankard (Exhs. M, M-1 and M-2). Thus, on May 7, 1990 private respondent filed a complaint for damages against petitioner before the Regional Trial Court of Makati, Branch 150, docketed as Civil Case No. 90-1174. After trial, the trial court ruled for private respondent, finding that herein petitioner abused its right in contravention of Article 19 of the Civil Code.[3] The dispositive portion of the decision reads: Wherefore, judgment is hereby rendered ordering the defendant to pay plaintiff the following: 1. P100,000.00 as moral damages; 2. P50,000.00 as exemplary damages; and 3. P20,000.00 by way of attorney's fees. On the other hand, plaintiff is ordered to pay defendant its outstanding obligation in the amount of P14,439.41, amount due as of December 15, 1989.[4] Not satisfied with the Regional Trial Court's decision, petitioner appealed to the Court of Appeals, which, in a decision promulgated on March 9, 1995 ruled in its dispositive portion: WHEREFORE, premises considered, the decision appealed from is hereby AFFIRMED with the MODIFICATION that the defendant-appellant shall pay the plaintiff-appellee the following: P50,000.00 as moral damages; P25,000.00 as exemplary damages; and P10,000.00 by way of attorney's fees. SO ORDERED.
petitioner allowed private respondent to use his card for several weeks. Petitioner had even notified private respondent of the impending suspension of his credit card and made special accommodations for him for settling his outstanding account. As such, petitioner cannot be said to have capriciously and arbitrarily canceled the private respondent's credit card. We do not dispute the findings of the lower court that private respondent suffered damages as a result of the cancellation of his credit card. However, there is a material distinction between damages and injury. Injury is the illegal invasion of a legal right; damage is the loss, hurt, or harm which results from the injury; and damages are the recompense or compensation awarded for the damage suffered. Thus, there can be damage without injury in those instances in which the loss or harm was not the result of a violation of a legal duty. In such cases, the consequences must be borne by the injured person alone, the law affords no remedy for damages resulting from an act which does not amount to a legal injury or wrong. These situations are often called damnum absque injuria. In other words, in order that a plaintiff may maintain an action for the injuries of which he complains, he must establish that such injuries resulted from a breach of duty which the defendant owed to the plaintiff - a concurrence of injury to the plaintiff and legal responsibility by the person causing it. The underlying basis for the award of tort damages is the premise that an individual was injured in contemplation of law. Thus, there must first be a breach of some duty and the imposition of liability for that breach before damages may be awarded; and the breach of such duty should be the proximate cause of the injury. We therefore disagree with the ruling of the respondent court that the dishonor of the credit card of the private respondent by Caf Adriatico is attributable to petitioner for its willful or gross neglect to inform the private respondent of the suspension of his credit card, the unfortunate consequence of which brought social humiliation and embarrassment to the private respondent. It was petitioner's failure to settle his obligation which caused the suspension of his credit card and subsequent dishonor at Caf Adriatico. He cannot now pass the blame to the petitioner for not notifying him of the suspension of his card. As quoted earlier, the application contained the stipulation that the petitioner could automatically suspend a card whose billing has not been paid for more than thirty days. Nowhere is it stated in the terms and conditions of the application that there is a need of notice before suspension may be effected as private respondent claims.
This notwithstanding, on November 28, 1989, the day of the suspension of private respondent's card, petitioner sent a letter by ordinary mail notifying private respondent that his card had been temporarily suspended. Under the Rules on Evidence, there is a disputable presumption that letters duly directed and mailed were received on the regular course of mail. Aside from the private respondent's bare denial, he failed to present evidence to rebut the presumption that he received said notice. In fact upon cross examination, private respondent admitted that he did received the letter notifying him of the cancellation: Private respondent's own negligence which was the proximate cause of his embarrassing and humiliating experience, we find the award of damages by the respondent court clearly unjustified. We take note of the fact that private respondent has not yet paid his outstanding account with petitioner. IN VIEW OF THE FOREGOING, the decision of the Court of Appeals ordering petitioner to pay private respondent P100,000.00 as moral damages, P50,000.00 as exemplary damages andP20,000.00 as attorney's fees, is SET ASIDE. Private respondent is DIRECTED to pay his outstanding obligation with the petitioner in the amount of P14,439.41. Urbano vs. Intermediate Appelate Court/Jan 1988/DMiles This is a petition to review the decision of the then Intermediate Appellate Court which affirmed the decision of the then Circuit Criminal Court of Dagupan City finding petitioner Filomeno Urban guilty beyond reasonable doubt of the crime of homicide. At about 8:00 o'clock in the morning of October 23, 1980, petitioner Filomeno Urbano went to his ricefield at Barangay Anonang, San Fabian, Pangasinan located at about 100 meters from the tobacco seedbed of Marcelo Javier. He found the place where he stored his palay flooded with water coming from the irrigation canal nearby which had overflowed. Urbano went to the elevated portion of the canal to see what happened and there he saw Marcelo Javier and Emilio Erfe cutting grass. He asked them who was responsible for the opening of the irrigation canal and Javier admitted that he was the one. Urbano then got angry and demanded that Javier pay for his soaked palay. A quarrel between them ensued. Urbano unsheathed his bolo (about 2 feet long, including the handle, by 2 inches wide) and hacked Javier hitting him on the right palm of his hand, which was used in parrying the bolo hack. Javier who was then unarmed ran away from Urbano but was overtaken by Urbano who hacked him again hitting Javier on the left leg with the back portion of said bolo, causing a swelling on said leg. Urbano advanced P400.00 to Javier at the police station. On November 3, 1980, the additional P300.00 was given to Javier at Urbano's house in the presence of barangay captain Soliven. Whether or not there was an efficient intervening cause from the time Javier was wounded until his death which would exculpate Urbano from any liability for Javier's death. We look into the nature of tetanus. The incubation period of tetanus, i.e., the time between injury and the appearance of unmistakable symptoms, ranges from 2 to 56 days. However, over 80 percent of patients become symptomatic within 14 days. A short incubation period indicates severe disease, and when symptoms occur within 2 or 3 days of injury the mortality rate approaches 100 percent. Mild tetanus is characterized by an incubation period of at least 14 days and an onset time of more than 6 days. Trismus is usually present, but dysphagia is absent and generalized spasms are brief and mild. Moderately severe tetanus has a somewhat shorter incubation period and onset time; trismus is marked, dysphagia and generalized convulsive spasms. Therefore, medically speaking, the reaction to tetanus found inside a man's body depends on the incubation period of the disease. In the case at bar, Javier suffered a 2-inch incised wound on his right palm when he parried the bolo which Urbano used in hacking him. This incident took place on October 23, 1980. After 22 days, or on November 14, 1980, he suffered the symptoms of tetanus, like lockjaw and muscle spasms. The following day, November 15, 1980, he died. If, therefore, the wound of Javier inflicted by the appellant was already infected by tetanus germs at the time, it is more medically probable that Javier should have been infected with only a mild cause of tetanus because the symptoms of tetanus appeared on the 22nd day afterthe hacking incident or more
than 14 days after the infliction of the wound. At about 1:30 a.m. on November 14, 1980, Javier was rushed to the Nazareth General Hospital in a very serious condition. When admitted to the hospital, Javier had lockjaw and was having convulsions. Dr. Edmundo Exconde who personally attended to Javier found that the latter's serious condition was caused by tetanus toxin. He noticed the presence of a healing wound in Javier's palm which could have been infected by tetanus. On November 15, 1980 at exactly 4:18 p.m., Javier died in the hospital. In an information dated April 10, 1981, Filomeno Urbano was charged with the crime of homicide before the then Circuit Criminal Court of Dagupan City, Third Judicial District. Therefore, the onset time should have been more than six days. Javier, however, died on the second day from the onset time. The more credible conclusion is that at the time Javier's wound was inflicted by the appellant, the severe form of tetanus that killed him was not yet present. Consequently, Javier's wound could have been infected with tetanus after the hacking incident. Considering the circumstance surrounding Javier's death, his wound could have been infected by tetanus 2 or 3 or a few but not 20 to 22 days before he died. The rule is that the death of the victim must be the direct, natural, and logical consequence of the wounds inflicted upon him by the accused. (People v. Cardenas, supra) And since we are dealing with a criminal conviction, the proof that the accused caused the victim's death must convince a rational mind beyond reasonable doubt. The medical findings, however, lead us to a distinct possibility that the infection of the wound by tetanus was an efficient intervening cause later or between the time Javier was wounded to the time of his death. The infection was, therefore, distinct and foreign to the crime. (People v. Rellin, 77 Phil. 1038). It strains the judicial mind to allow a clear aggressor to go scot free of criminal liability. At the very least, the records show he is guilty of inflicting slight physical injuries. However, the petitioner's criminal liability in this respect was wiped out by the victim's own act. After the hacking incident, Urbano and Javier used the facilities of barangay mediators to effect a compromise agreement where Javier forgave Urbano while Urbano defrayed the medical expenses of Javier. This settlement of minor offenses is allowed under the express provisions of Presidential Decree G.R. No. 1508, Section 2(3). (See also People v. Caruncho, 127 SCRA 16). We must stress, however, that our discussion of proximate cause and remote cause is limited to the criminal aspects of this rather unusual case. It does not necessarily follow that the petitioner is also free of civil liability. The well-settled doctrine is that a person, while not criminally liable, may still be civilly liable. This position is in our opinion untenable. With respect to the case of Remegio Rodrigueza it is to be inferred that his house stood upon this ground before the Railroad Company laid its line over this course; and at any rate there is no proof that this plaintiff had unlawfully intruded upon the railroad's property in the act of building his house. What really occurred undoubtedly is that the company, upon making this extension, had acquired the land only, leaving the owner of the house free to remove it. Hence he cannot be considered to have been a trespasser in the beginning. Rather, he
Rodriguez v. Manila Railroad Comp/ Nov. 1921/ LMonday
Defendant Railroad Company operates a line through the district of Daraga in the municipality of Albay; that on January 29, 1918, as one of its trains passed over said line, a great quantity of sparks were emitted from the smokestack of the locomotive, and fire was thereby communicated to four houses nearby belonging to the four plaintiffs respectively, and the same were entirely consumed. All of these houses were of light construction with the exception of the house of Remigio Rodrigueza, which was of strong materials, though the roof was covered with nipa and cogon. The fire occurred immediately after the
W/N there was contributory negligence on the part of Remigio Rodrigueza in having his house partly on the premises of the Railroad Company, and that the company is not liable
passage of the train, and a strong wind was blowing at the time. It does not appear either in the complaint or in the agreed statement whose house caught fire first, though it is stated in the appellant's brief that the fire was first communicated to the house of Remigio Rodrigueza, from whence it spread to the others. it is alleged that the defendant Railroad Company was conspicuously negligent in relation to the origin of said fire, in the following respects, namely, first, in failing to exercise proper supervision over the employees in charge of the locomotive; secondly, in allowing the locomotive which emitted these sparks to be operated without having the smokestack protected by some device for arresting sparks; thirdly, in using in its locomotive upon this occasion Bataan coal, a fuel of known inferior quality which, upon combustion, produces sparks in great quantity. The sole ground upon which the defense is rested is that the house of Remigio Rodrigueza stood partly within the limits of the land owned by the defendant company, though exactly how far away from the company's track does not appear. It further appears that, after the railroad track was laid, the company notified Rodrigueza to get his house off the land of the company and to remove it from its exposed position. Rodrigueza did not comply with this suggestion, though he promised to put an iron roof on his house, which he never did. Instead, he changed the materials of the main roof to nipa, leaving the kitchen and media-aguas covered with cogon. 1163 Ongsiako vs. Intermediate Appellate Court/ July 31, 1987/ MMuoz
was there at the sufferance of the defendant company, and so long as his house remained in this exposed position, he undoubtedly assumed the risk of any loss that might have resulted from fires occasioned by the defendant's locomotives if operated and managed with ordinary care. But he cannot be held to have assumed the risk of any damage that might result from the unlawful negligence acts of the defendant. Nobody is bound to anticipate and defend himself against the possible negligence of another. Rather he has a right to assume that the other will use the care of the ordinary prudent man. In the situation now under consideration the proximate and only cause of the damage that occurred was the negligent act of the defendant in causing this fire. The circumstance that Remigio Rodrigueza's house was partly on the property of the defendant company and therefore in dangerous proximity to passing locomotives was an antecedent condition that may in fact have made the disaster possible, but that circumstance cannot be imputed to him as contributory negligence destructive of his right of action, because, first, that condition was not created by himself; secondly, because his house remained on this ground by the toleration, and therefore with the consent of the Railroad Company; and thirdly, because even supposing the house to be improperly there, this fact would not justify the defendant in negligently destroying it.
This case arose from a collision between the car driven by the petitioner and the jeep of Robert Ha on December 30, 1981 in Moncada, Tarlac. The petitioner had a companion, Leon Miguel Heras, who was seated beside him. Robert Ha was at the wheel of his vehicle, which had seven other passengers. It appears that the petitioner was south-bound, toward Manila, and the jeep was coming from the opposite direction; that a Philippine Rabbit bus ahead of the jeep swerved into the petitioner's lane to overtake and bypass a tricycle; and that as a result of this sudden move, the petitioner, to avoid a head-on collision, immediately veered his car to the shoulder of the highway. The car went out of control when it hit the soft shoulder, moved back diagonally across the cemented highway, then collided with Ha's jeep, damaging it and causing multiple injuries to its passengers. The Philippine Rabbit bus sped away. After considering the arguments of the parties in the petition itself, the comment thereon of the public respondent and the reply thereto, we gave due course to this petition and
WON the accused is criminally liable for reckless imprudence resulting in multiple physical injuries and damage to property. (WON an accused absolved criminally is totally free from all criminal and civil charges)
There was discrepancy in ascertaining the evidences in the trial court. It was also affirmed by the respondent court. The real culprit in this unfortunate incident, as the Court sees it, could be the driver of the Philippine Rabbit bus whose recklessness was the cause of the collision between the petitioner's car and Robert Ha's jeep. We notice that the trial court made the meaningful observation that "the Philippine Rabbit bus may be faulted," but added rather helplessly, that "it is not here charged." We hope it did not mean by this that someone else had to be made liable, to vindicate the victims' rights. At any rate, it is the finding of the Court, in view of the misappreciation of the evidence of record by the respondent court and the trial court, that the guilt of the petitioner has not been proved beyond reasonable doubt. Consequently, he should not have been held guilty of even simple negligence and instead is entitled to be completely absolved of criminal responsibility. However, the civil liability is a different question. While the quantum of proof necessary for conviction has not been established, there is, in our view, a preponderance of evidence to hold the petitioner liable in damages for the injuries sustained by the victims of this Atty, Espejo Addu Law 24 OBLI Case Digests Uno Manresa 2012 2013
required the parties to file simultaneous memoranda. The petitioner complied in due time but the Solicitor General, to avoid repetitiousness, as he put it, merely adopted his sketchy comment as the memorandum for the respondent. The accused was prosecuted for reckless imprudence resulting in multiple physical injuries and damage to property, the petitioner was convicted by the trial court of only simple negligence resulting in serious physical injuries and damage to property. On appeal, the conviction was affirmed but the respondent court reduced the moral damages by P84,000.00, thus lowering the total indemnity to P61,131,04. Still not satisfied, the petitioner has come to this Court for a complete reversal of the judgment
accident. Although it is really doubtful that he was criminally negligent, SC finds there is enough evidence to sustain the conclusion that a little more caution and discretion on his part in reacting to the threat of a headon collision with the oncoming bus, could have avoided the unfortunate accident. For this shortcoming, SC hold him liable for the hospitalization expenses and unearned salaries of the victims as itemized by the trial court and affirmed by the respondent court. SC absolves him, however, from the payment of moral damages and so reduces his total civil liability. SC apply here the doctrine announced in the recent case of People v. Ligon, where the accused was acquitted of the crime of homicide for lack of clear and convincing proof that he had criminally caused a cigarette vendor to fall to his death from the jeep where he was hanging onto. Nevertheless, from the totality of the facts presented and declared there was a preponderance of evidence to hold the accused liable in damages for the tragic mishap that befell the victim. We make a similar finding in this case and hold the petitioner civilly answerable for his quasidelict. Whether or not Father de la Pea is liable for the loss of the money under his trust? The court, therefore, finds and declares that the money which is the subject matter of this action was deposited by Father De la Pea in the Hongkong and Shanghai Banking Corporation of Iloilo; that said money was forcibly taken from the bank by the armed forces of the United States during the war of the insurrection; and that said Father De la Pea was not responsible for its loss. Father De la Pea's liability is determined by those portions of the Civil Code which relate to obligations.(Book 4, Title 1.)Although the Civil Code states that "a person obliged to give something is also bound to preserve it with the diligence pertaining to a good father of a family" (art.1094), it also provides, following the principle of the Roman law,major casus est, cui humana infirmitas resistere non potest , that "no one shall be liable for events which could not be foreseen, or which having been foreseen were inevitable, with the exception of the cases expressly mentioned in the law or those in which the obligation so declares." (Art. 1105.)By placing the money in the bank and mixing it with his personal funds De la Pea did not thereby assume an obligation different from that under which he would have lain if such deposit had not been made, nor did he thereby make himself liable to repay the money at all hazards. If the had been forcibly taken from his pocket or from his house by the military forces of one of the combatants during a state of war, it is clear that under the provisions of the Civil Code he would have been exempt from responsibility. The fact that he placed the trust fund in the bank in his personal account does not add to his responsibility. Such deposit did not make him a debtor who must respond at all hazards.
Bishop of Jaro vs. Dela Pena/ November 21, 1915/PJNg
The plaintiff is the trustee of a charitable bequest made for the construction of a leper hospital and that father Agustin de la Pea was the duly authorized representative of the plaintiff to receive the legacy. The defendant is the administrator of the estate of Father Dela Pea. In the year 1898 the books Father De la Pea, as trustee, showed that he had on hand as such trustee the sum of P6,641, collected by him for the charitable purposes aforesaid. In the same year he deposited in his personal account P19,000 in the Hongkong and Shanghai Bank at Iloilo. Shortly thereafter and during the war of the revolution, Father De la Pea was arrested by the military authorities as a political prisoner, and while thus detained made an order on said bank in favor of the United States Army officer under whose charge he then was for the sum thus deposited in said bank. The arrest of Father De la Pea and the confiscation of the funds in the bank were the result of the claim of the military authorities that he was an insurgent and that the funds thus deposited had been collected by him for revolutionary purposes. The money was taken from the bank by the military authorities by virtue of such order, was confiscated and turned over to the Government. While there is considerable dispute in the case over the question whether the P6,641 of trust funds was included in the P19,000 deposited as aforesaid, nevertheless, a careful examination of the case leads us to the conclusion that said trust funds were a part of the funds deposited and which were removed and confiscated by the military authorities of the United States.
1164 Norkis vs. CA/ February 7, 1991/ROmega
On September 20, 1979, private respondent Alberto Nepales bought from the Norkis Distributors, Inc. (Norkis) in its Bacolod branch a brand new Yamaha Wonderbike motorcycle Model YL2DX with Engine No.L2-329401K Frame No.NL2-0329401, color maroon, which was then on display in the Norkis showroom. The Branch Manager Avelino Labajo agreed to accept the P7,500.00 price payable by means of a Letter of Guaranty from the Development Bank of the Philippines (DBP), Kabankalan. Hence, credit was extended to Nepales, and as security for the loan, he executed a chattel mortgage on the motorcycle in favor of DBP. Labajo issued the Norkis Sales Invoice No. 0120 perfecting the contract of sale, and Nepales signed the same to conform to the terms of the sale, while the unit remained in Norkis' possession. On November 6, 1979, it was registered under Alberto Nepales name in the and Transportation Commission. On January 22, 1980, the motorcycle was delivered to a certain Julian Nepales who was allegedly the agent of Alberto Nepales but the latter denies it. The record shows, however, that Alberto and Julian Nepales presented the unit to DBP's AppraiserInvestigator Ernesto Arriesta at the DBP offices in Kabankalan, Negros Occidental Branch. On February 3, 1980, the motorcycle met an accident at Binalbagan, Negros Occidental while being driven by a certain Zacarias Payba. The unit was a total wreck, was returned, and stored inside Norkis' warehouse. On March 20, 1980, DBP released the proceeds of private respondent's motorcycle loan to Norkis in the total sum of P7,500. As the price of the motorcycle later increased to P7,828 in March, 1980, Nepales paid the difference of P328 and demanded the delivery of the motorcycle. Norkis failed to deliver the unit, and Nepales filed an action for specific performance with damages in the RTC of Himamaylan, Negros Occidental. Norkis answered that the motorcycle had already been delivered to private respondent before the accident, hence, he should bear the risk of loss or damage as owner of the unit. The lower court ruled in favor of Nepales, and the Court of Appeals affirmed the decision but deleted the award of damages "in the amount of P50.00 a day from February 3, 1980 until payment of the present value of the damaged vehicle." Norkis concedes that there was no "actual" delivery of the vehicle, but insists that there
Who should bear the loss of the motorcycle.
In the case of Addison vs. Felix and Tioco (38 Phil. 404, 408), this Court held: The Code imposes upon the vendor the obligation to deliver the thing sold. The thing is considered to be delivered when it is "placed in the hands and possession of the vendee." (Civil Code, Art. 1462). It is true that the same article declares that the execution of a public instrument is equivalent to the delivery of the thing which is the object of the contract, but, in order that this symbolic delivery may produce the effect of tradition, it is necessary that the vendor shall have had such control over the thing sold that, at the moment of the sale, its material delivery could have been made. It is not enough to confer upon the purchaser the ownership and the right of possession. The thing sold must be placed in his control. When there is no impediment whatever to prevent the thing sold passing into the tenancy of the purchaser by the sole will of the vendor, symbolic delivery through the execution of a public instrument is sufficient. But if notwithstanding the execution of the instrument, the purchaser cannot have the enjoyment and material tenancy of the thing and make use of it himself or through another in his name, because such tenancy and enjoyment are opposed by the interposition of another will, then fiction yields to reality-the delivery has riot been effects .(Emphasis supplied.) Affirming the decision of the Court of Appeals, the Supreme Court reiterated that Article 1496 of the Civil Code which provides that "in the absence of an express assumption of risk by the buyer, the things sold remain at seller's risk until the ownership thereof is transferred to the buyer," is applicable to this case, for there was neither an actual nor constructive delivery of the thing sold, hence, the risk of loss should be borne by the seller, Norkis, which was still the owner and possessor of the motorcycle when it was wrecked. This is in accordance with the well-known doctrine of res perit domino. The Court of Appeals correctly ruled that the purpose of the execution of the sales invoice dated September 20, 1979 and the registration of the vehicle in the name of Alberto Nepales with the Land Registration Commission was not to transfer the ownership and dominion over the motorcycle to him, but only to comply with the requirements of the DBP for processing private respondent's motorcycle loan. The circumstances in the case itself more than amply rebut the disputable presumption of delivery upon which Norkis anchors its defense to Nepales' action.
CRUZADO vs BUSTOS and ESCALER/ February 29, 1916/ BCPandita
was constructive delivery of the unit upon the issuance of the sales invoice, upon the registration of the unit in Nepales name, and upon the issuance of the official receipt. On September 25, 1913, an amended written complaint was filed by plaintiff Santiago Cruzado who alleged that he was the owner of certain rural property situated in the barrio of Dolores, formerly San Isidro, of the municipality of Bacolor, Pampanga, containing an area of 65 balitas and bounded as set forth in the complaint; that Estafania Bustos, during her lifetime, and now the administrator of her estate, together with the other defendant, Manuel Escaler, had, since the year 1906 up to the present, been detaining the said parcel of land, and had refused to deliver the possession thereof to plaintiff and to recognize his ownership of the same, notwithstanding the repeated demands made upon them; that by such detention, the plaintiff had suffered losses and damages to the amount of P3,500. He therefore asked for judgment declaring plaintiff to be the owner of the said parcel of land and ordering defendants to return it to plaintiff and to pay the latter P3,500 for losses and damages, and the costs. Defendant Bustos alleged that the title to the said land, produced by the plaintiff, was not a lawful one, for the reason that only a simulated sale of the land was made by the between herself and the deceased Agapito Geronimo Cruzado, plaintiff's father, and that for more than thirty years preceding the present time she had been the sole, exclusive, and lawful owner of the said parcel of land in question; that she had been holding it quietly, peaceably, publicly and in good faith; that it formed an integral part of another larger parcel of land, both parcels aggregating a total area of 100 balitas, 9 loanes, and 41 square brazas; that in September, 1891, with plaintiff's knowledge, the defendant Bustos sold and conveyed all the said property to the other defendant Manuel Escaler who then acquired the possession and ownership of the said parcel of land, and had retained such ownership and possession up to the present time; that at no time and on no account whatever had plaintiff or any other person except defendants acquired possession of the said parcel of land or any part thereof, nor any right or title therein. The other defendant, Manuel Escaler, likewise likewise alleged unlawful title of plaintiff. He further alleged that he purchased in good faith the land in question
1. It is or is it not true that, notwithstanding such apparent alienation of the 65 balitas of land, the supposed vendee continued in possession thereof, without the supposed purchaser having taken possession of the property until September 10, 1891, when its owner Bustos sold to Escaler, not only the said 65 balitas of land, but also all the remainder of a large tract of agricultural land of which the portion appearing as sold to Agapito G. Cruzado formed and forms a part, and that Escaler was then and, until the date of plaintiff's claim, continued to be in peaceable, uninterrupted possession of the said whole tract of land, including the aforementioned portion of 65 balitas? (FROM FULL TEXT) * THE THOUGHT: WON the supposed vendee (Cruzado) has the right for recovery of possession based on the deed of sale of the land in question, founded on the right transmitted to him by his father at his death.
At the present time we have only to explain what rights Agapito G. Cruzado transmitted at his death to his son, the herein plaintiff, by virtue of the deed of sale of the land in litigation, executed by its owner Estefania Bustos. It is unquestionable that the contract of sale of the 65 balitas of land was perfect and binding upon both contracting parties, since they both appear in that instrument to have agreed upon the thing sold, to wit, the 65 balitas of land, and upon the price, P2,200; but it is also undeniable that the said contract was not consummated, inasmuch as, notwithstanding that the deed of sale Exhibit A was accomplished and this document was kept by the pretended purchaser, it is positively certain that the latter did not pay the purchase price of P2,200, and never took possession of the land apparently sold in the said deed. All that this vendee afterwards did was to pledge the land on March 14, 1876, that is, six months and some days after the 7th of September, 1875, the date when he purchased it as security for the faithful discharge of the duties of his office of procurador of the Court of First Instance of Pampanga. The plaintiff, Santiago Cruzado, a son of the vendee, claiming that the said land was being detained by the vendor, or by the administrator of the latter's estate or her death after the commencement of these proceedings, and by the other defendant Manuel Escaler, prayed the court to declare him to be the owner thereof, to order the defendants to return it to him and to pay him for losses and damages, and the costs. The action brought by the plaintiff is evidently one for recovery of possession, founded on the right transmitted to him by his father at his death, a right arising from the said simulated deed of sale of the land in question. This action is of course improper, not only because the sale was simulated, but also because it was not consummated. The price of the land was not paid nor did the vendee take possession of the property from the 7th of September, 1875, when the said sale was feigned, until the time of his death; nor did any of his successors, nor the plaintiff himself until the date of his claim, enter into possession of the land. It is indeed true that it is not necessary that the thing sold or its price should have been delivered in order that the contract of purchase and sale be deemed perfect on account of its being consensual, and from it reciprocal obligations arise mutually to compel the parties to effect its fulfillment; but there is no transmission of ownership until the thing, as in the case at bar, the land, has been delivered, and the moment such delivery is made the contract of purchase and sale is regarded as consummated. Article 1450 of the Civil Code, relied upon in this connection by the appellant, refers solely to the perfection of the contract and not to its consummation.
from Estefania Bustos, widow of Dizon, without ever having had any notice of any defect in the vendor's title; that plaintiff had knowledge of the contract of sale of the land in question yet did nothing to oppose its purchase by the defendant Escaler, wherefore the latter, in acquiring the property, did so under the belief that the plaintiff Santiago Cruzado had no right or interest therein. He therefore prayed that the complaint be dismissed, with the costs against plaintiff, and that an injunction issue to restrain the latter from interfering with the defendant Escaler in the enjoyment of his property and rights and from performing any act prejudicial to his interests.
The purchaser is also a creditor with respect to the products of the thing sold, and article 1095 of the Civil Code prescribes as follows: A creditor has a right to the fruits of a thing from the time the obligation to deliver it arises. However, he shall not acquire a property right thereto until it has been delivered to him. The provisions of this article are in agreement with that of the second paragraph of article 609 of the same Code, which is of the following tenor: Ownership is acquired by retention. Ownership and other property rights are required and transmitted by law, by gift, by testate or intestate succession, and, in consequence of certain contracts, by tradition. They can also be acquired by prescription. The provisions of the said article 1095 are also in accord with those of article 1462 which reads: A thing sold shall be considered as delivered, when it is placed in the hands and possession of the vendee. When the sale should be made by means of a public instrument, the execution thereof shall be equivalent to the delivery of the thing which is the object of the contract, if in said instrument the contrary does not appear or may be clearly inferred. It is true that the deed of sale Exhibit A remained in possession of the vendee Cruzado, but the sale is not to be considered as consummated by this because the said vendee never entered into possession of the land and neither did his son the plaintiff. The latter, moreover, was unable to prove that at any time as owner of the land he collected the fruits harvested thereon, or that any other person cultivated the said land in the name and representation of his deceased father or of the plaintiff himself. The fiction created by means of the execution and delivery of a public instrument produces no effect if the person acquiring it never takes possession of the thing sold or acquired, as happened in the case at bar. If, as prescribed by the preinserted article 1095, the creditor, and in the present case the vendee, does not acquire a property right in the land purchased until the property has been delivered to him or he has taken possession of it, it is unquestionable that, as neither the plaintiff nor his predecessor in interest took possession of the land in litigation, neither of them acquired any property right therein and, consequently, could not and cannot now bring an action for recovery of possession which arises out of a property right in a thing which belongs to them and not a mere right productive of a personal obligation. The plaintiff Santiago Cruzado could only, in a proper case, exercise the personal right of action flowing from the right possessed by his father to compel the vendor to fulfill the contract made in a public instrument to deliver the land sold or to give him possession of it, in consequence of the said contract,
NIELSON & COMPANY v. LEPANTO CONSOLIDATED MINING COMPANY/ December 1966/ JPinili
It appears that the suit involves an operating agreement executed before World War II between the plaintiff and the defendant whereby the former operated and managed the mining properties owned by the latter for a management fee of P2,500.00 a month and a 10% participation in the net profits resulting from the operation of the mining properties. For brevity and convenience, hereafter the plaintiff shall be referred to as NIELSON and the defendant, LEPANTO. The antecedents of the case are: The contract in question (Exhibit `C') was made by the parties on January 30, 1937 for a period of five (5) years. In the latter part of 1941, the parties agreed to renew the contract for another period of five (5) years, but in the meantime, the Pacific War broke out in December, 1941. In January, 1942 operation of the mining properties was disrupted on account of the war. In February of 1942, the mill, power plant, supplies on hand, equipment, concentrates on hand and mines, were destroyed upon orders of the United States Army, to prevent their utilization by the invading Japanese Army. The Japanese forces thereafter occupied the mining properties, operated the mines during the continuance of the war, and who were ousted from the mining properties only in August of 1945. After the mining properties were liberated from the Japanese forces, LEPANTO took possession thereof and embarked in rebuilding and reconstructing the mines and mill; setting up new organization; clearing the mill site; repairing the mines; erecting staff quarters and bodegas and repairing existing structures; installing new machinery and equipment; repairing roads and maintaining the same; salvaging equipment and storing the same within the bodegas; doing police work necessary to take care of the materials and equipment recovered; repairing and renewing the water system; and remembering (Exhibits "D" and "E"). The rehabilitation and reconstruction of the mine and mill was not completed until 1948 (Exhibit "F"). On June 26, 1948 the mines resumed operation under the exclusive management of LEPANTO (Exhibit "F-l").
Whether or not the management contract basis of the action has been extended for a period equivalent to the period of suspension entitling the plaintiff to recover the sums of money representing damages in view of lepanto to comply with the terms of management contract.
though simulated and executed for the sole purpose that the deceased Cruzado in default of P700 in cash might appear to own real estate with which to insure the proper performance of his duties as procurador, an office he then desired to hold. The Court ruled in the affirmative. For appellant Nielson two witnesses testified, declaring that the suspension had the effect of extending the period of the contract, namely, George T. Scholey and Mark Nestle. Scholey was a mining engineer since 1929, an incorporator, general manager and director of Nielson and Company; and for some time he was also the vicepresident and director of the Lepanto Company during the pre-war days and, as such, he was an officer of both appellant and appellee companies. As vice-president of Lepanto and general manager of Nielson, Scholey participated in the negotiation of the management contract to the extent that he initialed the same both as witness and as an officer of both corporations. This witness testified in this case to the effect that the standard force majeure clause embodied in the management contract was taken from similar mining contracts regarding mining operations and the understanding regarding the nature and effect of said clause was that when there is suspension of the operation that suspension meant the extension of the contract. Thus, to the question, "Before the war, what was the understanding of the people in the particular trend of business with respect to the force majeure clause?", Scholey answered: "That was our understanding that the suspension meant the extension of time lost." Mark Nestle, the other witness, testified along similar line. He had been connected with Nielson since 1937 until the time he took the witness stand and had been a director, manager, and president of the same company. When he was propounded the question: "Do you know what was the custom or usage at that time in connection with force majeure clause?", Nestle answered, "In the mining world the force majeure clause is generally considered. When a calamity comes up and stops the work like in war, flood, inundation or fire, etc., the work is suspended for the duration of the calamity, and the period of the contract is extended after the calamity is over to enable the person to do the big work or recover his money which he has invested, or accomplish what his obligation is to a third person ."7 And the above testimonial evidence finds support in the very minutes of the special meeting of the Board of Directors of the Lepanto Company issued on March 10, 1945 which was then chairmaned by Atty. C. A. DeWitt. We read the following from said report: The Chairman also stated that the contract with Nielson and Company would soon expire if the obligations were not suspended, in which case we should have to pay them the retaining fee of P2,500.00 a month. He believes however, that there is a provision in the contract suspending the effects thereof in cases like the present,
Shortly after the mines were liberated from the Japanese invaders in 1945, a disagreement arose between NIELSON and LEPANTO over the status of the operating contract in question which as renewed expired in 1947. Under the terms thereof, the management contract shall remain in suspense in case fortuitous event or force majeure, such as war or civil commotion, adversely affects the work of mining and milling. "In the event of inundations, floodings of mine, typhoon, earthquake or any other force majeure, war, insurrection, civil commotion, organized strike, riot, injury to the machinery or other event or cause reasonably beyond the control of NIELSON and which adversely affects the work of mining and milling; NIELSON shall report such fact to LEPANTO and without liability or breach of the terms of this Agreement, the same shall remain in suspense, wholly or partially during the terms of such inability. It is, therefore, clear from the foregoing that the Lepanto mines were liberated on August 1, 1945, but because of the period of rehabilitation and reconstruction that had to be made as a result of the destruction of the mill, power plant and other necessary equipment for its operation it cannot be said that the suspension of the contract ended on that date. Hence, the contract must still be deemed suspended during the succeeding years of reconstruction and rehabilitation, and this period can only be said to have ended on June 26, 1948 when, as reported by the defendant, the company officially resumed the mining operations of the Lepanto. It should here be stated that this period of suspension from February, 1942 to June 26, 1948 is the one urged by plaintiff. It having been shown that the operation of the Lepanto mines on the part of Nielson had been suspended during the period set out above within the purview of the management contract, the next question that needs to be determined is the effect of such suspension. Stated in another way, the question now to be determined is whether such suspension had the effect of extending the period of the management contract for the period of said suspension. To elucidate this matter, we again need to resort to the evidence.
and that even if it were not there, the law itself would suspend the operations of the contract on account of the war. Anyhow, he stated, we shall have no difficulty in solving satisfactorily any problem we may have with Nielson and Company.8 At the outset, it should be stated that, as a rule, in the construction and interpretation of a document the intention of the parties must be sought (Rule 130, Section 10, Rules of Court). This is the basic rule in the interpretation of contracts because all other rules are but ancilliary to the ascertainment of the meaning intended by the parties. It is likewise noteworthy that in this issue of the intention of the parties regarding the meaning and usage concerning the force majeure clause, the testimony adduced by appellant is uncontradicted. If such were not true, appellee should have at least attempted to offer contradictory evidence. This it did not do. Not even Lepanto's President, Mr. V. E. Lednicky who took the witness stand, contradicted said evidence. In holding that the suspension of the agreement meant the extension of the same for a period equivalent to the suspension, We do not have the least intention of overruling the cases cited by appellee. We simply want to say that the ruling laid down in said cases does not apply here because the material facts involved therein are not the same as those obtaining in the present. The rule of stare decisis cannot be invoked where there is no analogy between the material facts of the decision relied upon and those of the instant case. IN VIEW OF THE FOREGOING CONSIDERATIONS, We hereby reverse the decision of the court a quo and enter in lieu thereof another, ordering the appellee Lepanto to pay appellant Nielson the different amounts as specified hereinbelow: (1) 10% share of cash dividends of December, 1941 in the amount of P17,500.00, with legal interest thereon from the date of the filing of the complaint; (2) management fee for January, 1942 in the amount of P2,500.00, with legal interest thereon from the date of the filing of the complaint; (3) management fees for the sixty-month period of extension of the management contract, amounting to P150,000.00, with legal interest from the date of the filing of the complaint; (4) 10% share in the cash dividends during the period of extension of the management contract, amounting to P1,400,000.00, with legal interest thereon from the date of the filing of the complaint; (5) 10% of the depletion reserve set up during the period of extension, amounting to P53,928.88, with legal interest thereon from the date of the filing of the complaint; (6) 10% of the expenses for capital account during the period of extension, amounting to P694,364.76, with legal interest thereon from the date of the filing of the complaint; (7) to issue and deliver to Nielson and Co., Inc. shares of
stock of Lepanto Consolidated Mining Co. at par value equivalent to the total of Nielson's l0% share in the stock dividends declared on November 28, 1949 and August 22, 1950, together with all cash and stock dividends, if any, as may have been declared and issued subsequent to November 28, 1949 and August 22, 1950, as fruits that accrued to said shares; If sufficient shares of stock of Lepanto's are not available to satisfy this judgment, defendant-appellee shall pay plaintiff-appellant an amount in cash equivalent to the market value of said shares at the time of default (12 C.J.S., p. 130), that is, all shares of the stock that should have been delivered to Nielson before the filing of the complaint must be paid at their market value as of the date of the filing of the complaint; and all shares, if any, that should have been delivered after the filing of the complaint at the market value of the shares at the time Lepanto disposed of all its available shares, for it is only then that Lepanto placed itself in condition of not being able to perform its obligation (Article 1160, Civil Code); (8) the sum of P50,000.00 as attorney's fees; and (9) the costs. It is so ordered. No. Equatorial has no right of ownership to the subject property and the fruits thereof. LAW: According to Art 1164, the creditor has a right to the fruits of the thing from the time the obligation to deliver it arises. However, he shall acquire no real right over it until the same has been delivered to him. Ownership of the thing sold is a real right, which the buyer acquires only upon delivery of the thing to him or in any way signifying an agreement that the possession is transferred from the vendor to the vendee. The transfer of rights is not only done by contract alone but by tradition or delivery. There is delivery when the thing sold is placed in the possession of the vendee. With a contract of sale, one of the contracting parties obligates himself to transfer ownership of and to deliver a determinate thing and the other to pay therefore a price certain in money or its equivalent. In the case at bar, Ownership was not transferred from C&B to, petitioner (Equatorial) never took actual control of the property sold because the respondent has objected timely on the sale. Though the execution of the public instrument of sale is recognized by law and equivalent to the delivery, such symbolic or constructive delivery is just presumed. It is negated by the failure of the vendee to take actual control or possession of the subject property. Mayfairs opposition is considered as a legally sufficient reason to bar the passing of the property into the Petitioners hands. Thus, the rentals that fell due from the time of the perfection of the sale to petitioner until its rescission by final judgment should belong to the owner (C&B) of the property during that period. Not having been the owner, Equatorial cannot be entitled to the civil fruits
Equatorial Realty v. Mayfair Theater/ Nov. 2001/ CRemoroza
Carmelo & Bauermann, Inc. (C&B) owned a land w/ two 2-storey bldgs. At Claro M. Recto. On June 1, 1967, C&B entered into a Contract of Lease w/ Mayfair Theater Inc. for a period of 20 yrs covering a part of the nd 2 flr and mezzanine of the 2-storey bldg. used as Maxim Theater. 2 yrs later, they entered into another contract of lease for a portion of C&Bs property, this time portion nd of 2 flr of 2 storey bldg and 2 store spaces at the ground flr. Used as another movie house (Miramar Theater) still for 20 years. Both contracts of lease contained a clause giving Mayfair a right of first refusal to buy subject properties. But, within the 20 year lease term, the properties were sold by C&B to Equatorial Realty Development Inc, for 11.3 M without offering it first to Mayfair. Mayfair filed for rescission of Deed of Absolute Sale, specific performance and damages. RTC ruled in favor of C&B and Equatorial. Upon appeal to the CA, the decision was reversed. The case reached the SC and the petition was denied. The contract was rescinded, C&B was ordered to return to 11M to Equatorial. Equatorial was directed to execute the deeds and documents to return ownership to C&B. C&B was mandated to allow Mayfair buy the lots. Mayfair filed a Motion for Execution, which the trial court granted. However, Carmelo could no longer be located. Mayfair deposited with the clerk of court a quo its payment to C&B. Registry of Deeds
Whether or not Equatorial was the owner of the subject property and could enjoy the fruits and rentals.
cancelled Equatorials titles and issued new Certificates of Title in the name of Mayfair. But, Equatorial filed an action for collection of sum of money against Mayfair. It claims payment for rentals or reasonable compensation for ayfairs use of the subject premises after its lease of contracts had expired. Equatorial said that representing itself as the owner of the subject premises by reason of the Contract of Sale; it claimed rentals arising from ayfairs occupation thereof. Gonzalez v Haberer/Feb 1925/ MRequillo This action is brought to recover the sum of P34,260 alleged to be due the plaintiffs from the defendant upon a written agreement for the sale of a tract of land. The defendant in his answer admits that of the purchase price stated in the agreement a balance of P31,000 remains unpaid, but by way of special defense, cross-complaint and counter-claim alleges that at the time of entering into the contract the plaintiffs through false representations lead him to believe that they were in possession of the land and that the title to the greater portion thereof was not in dispute; that on seeking to obtain possession he found that practically the entire area of the land was occupied by adverse claimants and the title thereto disputed; that he consequently has been unable to obtain possession of the land; and that the plaintiffs have made no efforts to prosecute the proceedings for the registration of the land. He therefore asks that the contract be rescinded; that the plaintiffs be ordered to return to him the P30,000 already paid by him to them and to pay P25,000 as damages for breach of the contract. The court below dismissed the plaintiffs' complaint, declared the contract rescinded and void and gave the defendant judgment upon his counterclaim for the sum of P30,000, with interest from the date upon which the judgment becomes final. The case is now before this court upon appeal by the plaintiffs from that judgment.
of ownership like rentals of the thing sold.
It is conceded by the plaintiffs that the defendant never obtained actual or physical possession of the land, but it is argued that under the contract quoted the plaintiffs were under no obligation to place him in possession. This contention cannot be sustained. Cause 3 of paragraph 3 of the contract gave the defendant the right to take possession of the land immediately upon the execution of the contract and necessarily created the obligation on the part of the plaintiffs to make good the right thus granted; it was one of the essential conditions of the agreement and the failure of the plaintiffs to comply with this condition, without fault on the part of the defendant, is in itself sufficient ground for the rescission, even in the absence of any misrepresentation on their part. We may say, however, that the evidence leaves no doubt that some misrepresentations were made and that but for such misrepresentations the defendant would not have been likely to enter into the agreement in the form it appeared. As to the contention that the plaintiff Gonzalez cannot be charged with the misrepresentations of Gomez, it is sufficient to say that the latter in negotiating for the sale of the land acted as the agent and representative of the other plaintiff, his wife; having accepted the benefit of the representations of her agent she cannot, of course, escape liability for them. (Haskell vs. Starbird, 152 Mass., 117; 23 A.S.R., 809.) The contention of the appellants that the symbolic delivery effected by the execution and delivery of the agreement was a sufficient delivery of the possession of the land, is also without merit. The possession referred to in the contract is evidently physical; if it were otherwise it would not have been necessary to mention it in the contract. (See Cruzado vs. Bustos and Escaler, 34 Phil., 17.) The judgment appealed from is in accordance with the law, is fully sustained by the evidence, and is therefore affirmed, with the costs against the appellants. So ordered.
1165 Repide vs. Afzelius/ November 1918/ZSabelita
The plaintiff is the owner of a certain parcel of realty consisting of 2,695.24 square meters situated in the city of Manila. About the month of December, 1916, the defendants made a proposition to the plaintiff for the purchase of this property.
Whether or not the plaintiff (vendor) can compel the defendants (vendee) to sign
Yes. The vendee is entitled to specific performance essentially as a matter of course. Philippine cases have so held. The plaintiff, who has lived up to his bargain and who has been put to expense to do so, should be permitted to coerce the defendant into going through
CENTRAL BANK OF THE PHILIPPINES vs. CA, ISIDRO E. FERNANDEZ, and JESUS R. JAYME/ Sandico
After negotiating for some time, it was agreed that the defendants would pay plaintiff the sum of P10,000 for the land, P2,000 of which was to be handed over upon the signing of the deed, and the balance of P8,000, paid in monthly installments of P150. The property was to be mortgaged to the plaintiff to secure the payment of this balance of P8,000. Expenses to the amount of P83.93 were incurred for having survey made of the land and preparing the deed and mortgage. The deed was ready about December 28, 1916, when the defendants were notified to appear and sign the same. They failed to do this, and instead, the defendant, Patrocinio R. Afzelius, wrote a letter to plaintiff stating that they did not have the money to purchase the plaintiffs property. Plaintiff, in his action in the Court of First Instance of the city of Manila, asked judgment against the defendants condemning them to sign the deed and mortgage to the land in question, and to pay the purchase price stipulated, with costs. The defendants filed a general denial, alleging that the plaintiff has not sustained damages of any kind or character, and praying that the case be dismissed at the cost of the plaintiff. The judgment then was in favor of the defendants, dismissing the plaintiff's complaint, without prejudice to any other remedy which the plaintiff might have, and without any finding as to the costs because it the court finds it useless, unjust and inequitable to render judgment herein for specific performance. PROVIDENT has an authorized capital of P10 million, divided into 100,000 shares of common stock with a par value of P100.00 each. At the time of its incorporation, 25% of the stock was subscribed and paid for by its incorporators. There were subsequent subscriptions received so that by the end of 1967 the total paid up capital of the bank amounted to P6.7 million out of the aggregate P7.5 million subscribed shares of stock. The herein private respondents, Isidro E. Fernandez and Jesus R. Jayme, are the majority and controlling stockholders thereof, holding 41% and 22%, respectively, of the total subscribed capital stock of the bank.A major portion of PROVI ENTs loanable funds was granted to directors, officers and stockholders and their related interests. In September 1968, PROVIDENT among others, experienced a bank run which was triggered off by adverse publicity in the newspapers, radio and television of investigations conducted by Congress that some banks were unable to pay
the deed and mortgage to the land in question
with the contract. The excuse of the defendants is that they do not now have the money to pay the first installment. In other words, they plead impossibility of performance. The rule of equity jurisprudence in such a case is that mere pecuniary inability to fulfill an engagement does not discharge the obligation of the contract, nor does it constitute any defense to a decree for specific performance. Judgment was reversed, and an order was issued, condemning the defendants to sign the deed and mortgage to the land in question and to pay the first installment of the purchase price as stipulated.
1. W/N respondent CA erred in not applying PD No. 1007. 2. W/N that the Court of Appeals erred in not holding that there can be no estoppel against the petitioner in view of the latters valid exercise of police power by its lawful overseeing of Provident Savings Bank. 3. W/N that the Court of Appeals
Hence, the present recourse. 1. The petitioner claims that the respondent Court of Appeals erred in not applying Presidential Decree No. 1007, dated September 22, 1976, which amended Section 29 of Republic Act No. 265 during the pendency of the appeal and should have dismissed the petition of Fernandez and Jayme in view of the findings of the said appellate court that there is no clear proof of gross and evident bad faith on the part of the petitioner and the Eagle Broadcasting Corporation. In support of its contention, the petitioner invokes the case of Lucas Ramirez vs. The Hon. Court of Appeals, et al. Indeed, the appellate court, in reviewing a judgment on appeal, should dispose of a question according to the law prevailing at the time of such disposition and not according to the law prevailing at the time of the rendition of the appealed judgment. Accordingly, Section 29 of Republic Act No. 265, as amended by Presidential Decree No. 1007, should be applied. Under this section, as amended, the action of the Monetary Board in ordering the closure and liquidation of an insolvent bank is final and executory and can be
deposit withdrawals. In view of the unusually heavy withdrawals, PROVIDENT had no recourse but to request emergency loans from the Central Bank to meet the demands of the depositors. The Monetary Board, however, denied these requests for emergency loans. PROVIDENT, therefore, had to borrow from other banks, foremost of which is the Banco Filipino Mortgage and Savings Bank which granted PROVIDENT advances up to P8 million, on the security of real estate properties and a pledge of P4.074 million worth of shares of stock representing about 60% of the outstanding shares of stock of PROVIDENT owned by Fernandez and Jayme. But, these loans were not enough to meet the demands of the depositors. As a result, PROVIDENT was forced to temporarily close its doors to the public on September 12, 1968.Subsequently, however, the Central Bank extended emergency loans to PROVIDENT in order to stop the bank run and to prevent the bank run from eroding the confidence of the public in the banking system, thus enabling PROVIDENT to reopen on September 16, 1968. The Hon. Alfonso Calalang, then Governor of the Central Bank, together with other high officials of the Central Bank, visited the premises of PROVIDENT soon after its reopening and assured the public that PROVIDENT was sound and had the full backing of the Central Bank. Then followed a series of emergency releases. But, the assistance given to PROVIDENT was not sufficient to meet and service the unusually heavy withdrawals of deposits. Fernandez and Jayme appealed to the Central Bank for continued assistance. At one time, Fernandez and Jayme were summoned to the Central Bank for a conference with the Governor and Deputy Governor and were introduced to representatives of the Iglesia Ni Kristo (INK) which had a sizeable deposit of P5.5 million with PROVIDENT and was having difficulty in withdrawing the same. Central Bank Deputy Governor Amado Brias voiced the decision of the Central Bank that unless Fernandez and Jayme relinquished and turned over the management and control of PROVIDENT to the Iglesia Ni Kristo, the Central Bank would not further support and assist the distressed PROVIDENT. Governor Brias, in turn, persuaded the representatives of the Iglesia Ni Kristo, headed by Rogelio Manalo, that the only way they could withdraw their deposit was to take control and management of PROVIDENT. Left with no other alternative, but to accede, and in order to protect their investment, Fernandez and Jayme reluctantly executed a Memorandum Agreement with the Eagle Broadcasting Corporation, a company identified with the Iglesia Ni Kristo, on December 6, 1968.
erred in not appreciating certain facts, mainly PROVI ENTs anomalous grant of substantial loans to its own directors, officers, stockholders, and related interests, which caused its insolvency, thereby rendering the remedy of liquidation proper and rehabilitation improper.
set aside only if there is convincing proof that the action is plainly arbitrary and made in bad faith. The arbitrariness and bad faith of the petitioner is evident from the fact that it pressured Fernandez and Jayme into relinquishing the management and control of PROVIDENT to the Iglesia Ni Kristo cranad(INK) which did not have any intention of restoring the bank into its former sound financial condition but whose interest was merely to recover its deposits from PROVIDENT, and, thereafter, allowing the Iglesia Ni Kristo to mismanage PROVI ENT until the banks financial deterioration and subsequent closure. Besides, the Central Bank has already rehabilitated similarly distressed banks, the Republic Bank and the Overseas Bank of Manila, among several others, so that it would be unjust to PROVIDENT to be deprived of the Central Banks continued support. 2. The petitioner next claims that the Court of Appeals erred in not holding that there can be no estoppel against the petitioner in view of the latters valid exercise of police power by its lawful overseeing of Provident Savings Bank. The contention is without merit. While the closure and liquidation of a bank may be considered an exercise of police power, the validity of such exercise of police power is subject to judicial inquiry and could be set aside if it is either capricious, discriminatory, whimsical, arbitrary, unjust, or a denial of the due process and equal protection clauses of the Constitution. In the cases under consideration, it is not disputed that the Central Bank had committed itself to support PROVIDENT and restore it to its former sound financial position provided that Fernandez and Jayme should relinquish and give up its control and management of the bank to the Iglesia Ni Kristo, and thereafter, whimsically withdrew such support to the detriment of PROVIDENT. In the case of Ramos vs. Central Bank, where the Central Bank committed itself to the continued operation of, and rehabilitation of the Overseas Bank of Manila, and later on reneged on that promise, the Court therein ruled: Even in the absence of contract, the record plainly shows that the CB made express representations to petitioners herein that it would support the OBM, and avoid its liquidation if the petitioners would execute cranad(a) the Voting Trust Agreement turning over the management of OBM to the CB or its nominees, and cranad(b) mortgage or assign their properties to the Central Bank to cover the overdraft balance of OBM. The petitioners having complied with these conditions and parted with value to the profit of the CB cranad(which thus acquired additional security for its own advances), the CB may not now renege on its representations and liquidate the OBM, to the detriment of its stockholders, depositors and other creditors, under the rule of promissory estoppel cranad(19 Am. Jur., pp. 657-658, 28 Am. Jur. 2d, 656-657; Ed. Note. 115 ALR, 157).
The parties therein made the following commitments: 1. That the Iglesia Ni Kristo will convert its time deposit with the Bank in the amount of P5.5 million into voting preferred shares of stock; 2. That the stockholders will cause the amendment of the Articles of Incorporation to increase the capital stock by creating voting preferred shares of stock at a par value of P70.00 per share; 3. That the Iglesia Ni Kristo shall purchase from Fernandez and Jayme group 53,000 shares of stock within the period of six months; 4. That the Fernandez and Jayme group shall execute a voting trust agreement in favor of the Iglesia Ni Kristo group to subsist only until the amendment to the Articles of incorporation shall have been registered with the Securities and Exchange Commission; and 5. That the Iglesia Ni Kristo group shall not foreclose mortgages securing loans of various borrowers until after four years, provided that the schedule of payments on loans of the Fernandez and Jayme group shall be complied with. A Voting Trust Agreement was, likewise, executed in favor of the Eagle Broadcasting Corporation on certain shares of stock owned by Reynaldo Panopio, a stockholder identified with the Fernandez and Jayme group, after which Fernandez and Jayme withdrew from the management of PROVIDENT in favor of the Iglesia Ni Kristo group effective December 1,1968. The Central Bank forthwith released additional loans to PROVIDENT at a much reduced rate of interest of 10% instead of the 12% interest charged on previous loans. PROVIDENT was further allowed to resume its lending activities. At the time of the transfer of the management to the Iglesia Ni Kristo the net worth of PROVIDENT was P7.2 million. The Eagle Broadcasting Corporation, however, did not comply with its commitment to purchase 53,000 common shares of stock and to convert its deposits into equity. Instead, the new management of PROVIDENT caused the conversion of the deposits of Iglesia Ni Kristo into bills payable earning 2% interest. On August 22, 1972, Rogelio W. Manalo resigned as Chairman and President of PROVIDENT, giving rise to large withdrawals from its big depositors which the bank could not readily meet. PROVIDENT had to seek assistance from other banks, the Savings Bankers Association of the Philippines, and other sources to prevent the recurrence of another bank run. 9 But, the
3. Finally, the petitioner claims that the Court of Appeals erred in not appreciating certain facts, mainly PROVI ENTs anomalous grant of substantial loans to its own directors, officers, stockholders, and related interests, which caused its insolvency, thereby rendering the remedy of liquidation proper and rehabilitation improper. The contention is without merit. We believe that the judgment complained of is based upon substantial evidence and that the trial court had not overlooked, nor misinterpreted certain facts and circumstances of weight in making its findings, so that the respondent appellate court did not commit any error in affirming the said judgment. Besides, the issue of whether or not certain alleged facts should be appreciated is a question of fact, not properly cognizable on appeal, since it involves an examination of the probative value of the evidence presented by the parties. At any rate, the fact that the directors, officers, and stockholders of PROVIDENT had been extended loans by the bank which may have caused its insolvency, is of little importance since these loans were already known to and taken into consideration by the Central Bank when it decided in 1968 to allow PROVIDENT to continue in business. WHEREFORE, the decision of the Court of Appeals is hereby AFFIRMED. Without pronouncement as to costs.
financial condition of PROVIDENT continued to worsen after considering further that the principal stockholders and/or the Iglesia Ni Kristo/Eagle Broadcasting Corporation group have not come up with concrete and substantial proposals towards the rehabilitation of the Provident Savings Bank, which proposals were required of them in the conference held in September of 1971; and in pursuance of Section 29 of Republic Act No. 265, decided as follows: a) To forbid the Provident Savings Bank to do business in the Philippines; b) To instruct the Superintendent of Banks to take charge, in the name of the Monetary Board, of the assets of the Provident Savings Bank; c) To instruct the Superintendent of Banks to take such further action as may be necessary pursuant to Section 29 of Republic Act No. 265; and d) To refer the subject memoranda of the Superintendent of Banks and all pertinent reports of the examiners of the Department of Supervision and Examination to the Central Bank Legal Counsel for appropriate legal action(s). Pursuant thereto, the Central Bank instructed its Legal Counsel on September 25, 1972: ) To request the Solicitor General to file, pursuant to the last paragraph of Section 29 of Republic Act No. 265, a petition in the Court of First Instance reciting the proceedings which have been taken and praying the assistance and supervision of the court in the liquidation of the affairs of the Provident Savings Bank; and 2) To take such other action as may be appropriate and legal to safeguard the interests of the Banks creditors. Consequently, on September 28, 1972, Fernandez and Jayme filed a petition for certiorari, prohibition and mandamus and/or specific performance, with preliminary injunction, against the Central Bank and Eagle Broadcasting Corporation to annul and set aside the said Monetary Board Resolution No. 1766 and to restrain the Central Bank from liquidating PROVIDENT, and to order the Central Bank to comply with its commitments to the petitioners and reorganize and rehabilitate PROVIDENT in the manner it did to the Overseas Bank of Manila, as well as for damages and costs. Eagle Broadcasting Corporation, upon the other hand, blames both the Central Bank and Fernandez and Jayme for the failure of PROVIDENT. On December 11, 1972, the Central Bank filed a
Petition for Assistance and Supervision in Liquidation of the Provident Savings Bank with the Court of First Instance of Manila. Upon motion, the two cases were heard jointly, 14 and on February 20, 1974, judgment was rendered, as follows: Respondent Central Bank is ordered to desist from liquidating PROVIDENT and is ordered to specifically perform its obligation to reorganize and rehabilitate the Provident Savings Bank Respondent Central Bank and Eagle Broadcasting Corporation are hereby ordered to pay the petitioners. The Central Bank and the Eagle Broadcasting Corporation appealed. CA affirmed the Decision of the RTC. Vda. De Lacson v. Diaz/August 1950/ JTan This case, here on appeal from the Court of First Instance of Negros Occidental, involves an interpretation of a pre-war contract of lease of sugar-cane lands and the liability of the lessee, defendant and appellant, to pay rent for the period during and immediately following the Japanese occupation. The defendant resisted payment of that rent of the theory of force majeure, and claims, besides, right to an extension of the lease to make-up for the time when no cane was planted. It appears that on June 2, 1939, the plaintiff, Rosario S. Vda. de Lacson, as atty.-in-fact of the other plaintiffs leased to the defendant, Abelardo G. Diaz, lots Nos. 429 and 1179 of the Talisay Cadastre, together with its sugar quota of about 5,728.50 piculs. The term of the lease was for five crop years beginning with the crop year 1940-41; with an option in favor of the defendant for another two years, after the expiration of the original period. The contract provided that the defendant was to pay to the plaintiffs an annual rental of 1,000 piculs of export sugar , of which 500 piculs were to be paid in the month of January of every year and the rest at the end of every milling season. The defendant also obligated himself to pay to the plaintiff 20% of whatever alcohol he receive from the Talisay-Silay Milling Co. Inc. corresponding to thehaciendas abovementioned. To guarantee the payment of the said annual rentals, the defendant Abelardo Diaz, loaned to the plaintiffs the sum of P10,000 without interest, which was to be paid by plaintiffs with the proceeds of the annual rentals in sugar provided however, that the sum of P7,000 was to be maintained as the permanent balance until the termination of the lease period, as security for the payment by the defendant of said rentals. On October 23, 1940, a supplementary agreement (was) entered into between the Whether or not defendant appellant Abelardo Diaz is liable to pay the rent based on a pre-war contract of lease of sugarcane lands. The court gave judgment for the plaintiffs for rent with interest corresponding to the crop years 1945-46 and 1946-47, amounting to P60,000, the value of 2,000 piculs of sugar, from which amount was to be deducted the sum of P8,015.24 due the defendant by the plaintiffs for advances. The court likewise declared the lease terminated after the crop year 1946-47. On the last point, it is the defendant's contention that he and the plaintiffs stipulated seven sugar "crops" and not seven "crop years as the duration of the lease and that this period should be computed by the number of times sugar crops were raised and not by number of years that transpired from the inception of the contract. We are unable to see any essential difference between crops and crop years sufficient to alter the result. Under one or the other theory, it seems to us that the contract contemplated seven consecutive agricultural years. To the lessors time was of the essence of the lease and they could not conceivably have agreed to have discounted from the period, years which the lessees, who had the exclusive disposition of the lands, might not care to plant sugar cane or not use the lands at all. Any how the contract speaks of "cosechas agricolas", and nowhere is there any insinuation that the defendant-lessee was to have possession of the lands for seven years excluding years on which he could not harvest sugar. On the contrary, the parties not only used the generic expression "cinco cosechas agricolas" but followed it with the phrase "periodo de cinco aos." The more important issue, though by no means difficult to decide, concerns the obligation of the lessee to pay the stipulated rent for the crop years 1945-46 and 194647. Admitting that those post-liberation years, the lessee claims exemption from the obligation stipulated for delivery of 1,000 piculs of centrifugal sugar as rent for each milling season, and the Talisay-Silay Milling Co. Inc., he adds, had been destroyed and he could not mill any sugar. The law regulating the facts of force majeure on contracts is to be found in the following articles of the Civil Code:
parties so as to include in the lease contract the rights and interests also of the plaintiff, Rosario S. Vda. de Lacson in the haciendas in question. It was further agreed that out of the annual rental of 1,000 piculs to be sold by the defendant, Abelardo Diaz in such price as may be agreeable to the plaintiff, Rosario S. Vda. de Lacson, from the proceeds of which the sum of P2,000.00 was to be applied to the loan of P10,000 extended by the defendant to the plaintiffs. The balance of 100 piculs of said yearly rental was to be placed at the complete disposition of the plaintiff, Rosario S. Vda. de Lacson. The defendant took possession of the haciendas in question beginning with the crop year 1940-41. In that year he paid to the plaintiffs the corresponding rental of 1,000 piculs of sugar and their share in alcohol. As provided for in the supplementary agreement the defendant Abelardo G. Diaz, with the approval of the plaintiff, Rosario S. Vda. de Lacson, sold 400 piculs of said rentals for the sum of P1,984.76, and this amount was applied on the loan of the plaintiffs thereby leaving a balance of P8,015.24 against them and in favor of the defendant at the beginning of the crop year 1941-42. On December 8, 1941, the war broke out. The defendant claims that due to the unsettled conditions which follows, he was unable to mill all his sugar canes so that during the crop year 1941-42 he produced only the total amount of 966.42 piculs of sugar from the two haciendas, of which 579.86 piculs went to him as his planter's share. It appears that the defendant failed to pay the plaintiffs the rentals of 1,000 piculs of export sugar and alcohol for said crop year. The defendant tried to prove, however, that he assigned 225.65 piculs in 1941-42 to the Agricultural and Industrial Bank for the account of the plaintiffs, but it was not duly established to the satisfaction of this court that the said Bank actually received the assignment. The defendant also failed to pay the plaintiffs the stipulated rentals for the remaining crop years up to the present time, although the plaintiffs had made several demands for their payment, so that on September 17, 1946, this action was commenced by the plaintiffs for the rescission of the lease contract. From the evidence adduced during the trial it was established that during the years 1943 and 1944 the haciendas in question were worked and cultivated by the tenants of the defendant who planted cereal crops thereon like corn and rice but there was no evidence as to how much was really produced on the land. The defendant himself admitted that he planted rice on the
ART. 1096. Should the thing to be delivered be a determinate one the creditor, independently of the right granted him by article 1004, may compel the debtor to make the delivery. Should the thing be determinate or generic, he may demand that the obligation be performed at the expense of the debtor. Should the person obligated be in default, or should be have engaged himself to deliver the same thing or two or more different persons, it shall be at his risk, even in case of inevitable accident, until the delivery is made. ART. 1105. No one shall be liable for events which could not be foreseen or which, even if foreseen, were inevitable, with the exception of the cases in which the law expressly provides otherwise and these in which the obligation itself imposes such liability. ART. 1182. Any obligation which consists in the delivery of a determinate thing shall be extinguished if such thing should be lost or destroyed without fault on the part of the debtor and before he is in default. In binding himself to deliver centrifugal sugar, the defendant promised a generic thing. It could be any centrifugal sugar without regard to origin or how he secured it. Hence, his inability to produce sugar, irrespective of the cause, did not relieve him from his commitment. War, like floods and other catastrophes, was a contingency, acollateral incident, which he could have provided for by proper stipulation. (Reyes vs. Caltex (Philippines) Inc., 47 Off. Gaz., 1193. In reality there was no fortuitous event which interfered with the exploitation of the leased property in the form and manner the defendant had intended. We refer to the agricultural years 1945-46 and 1946-47. It should be observed that the defendant was not bound to keep the lands during those years; it was entirely optional on his part to put an end to the lease after the 1944-45 crop year. When he decided to exercise the option he was fully aware that there were no sugar mills in operation and he did not except to produce sugar, He must have had an object other than to plant sugar cane when he chose to retain the lands for two more years. His purpose was, beyond doubt, to plant other crops, which he did. If those crops did not bring good return he can not, under any principle of law or equity, shift the loss to the lessor. Performance is not excused by the fact that the contract turns out to be hard and improvident, unprofitable or impracticable, ill-advised, or even foolish. (Reyes vs. Caltex,supra.) The defendant's counterclaim was, in our opinion, rightly overruled by the court below. Said the court: As to the counterclaims filed by the defendant the court cannot reasonably entertain it for the simple reason that there was no sufficient evidence supporting it and the fact that the seven-year period, stipulated in
haciendas during the years 1945 and 1946, which brought him a net participation of 200 cavanes for each of these years. The defendant also admitted that he did not give the plaintiffs any participation in the rice or other crops he had produced in the said haciendas, because according to him, his obligation was to pay rentals in sugar only, and not in any other kind of products. It also appears that the defendant has been unable to plant sugar canes on the haciendas in question except in preparation for the 19947-48 crop year which he estimated to be around ten hectares. The court absolved the defendant, on the principle of fortuitous circumstance, from any liability for rent for the crop years 1942-43, 1943-44 and 1944-45. END OF PART 1
the contract, including the option of two years in favor of the defendant, had already expired at the end of the crop year 1946-47, which is of judicial notice to be at the end of May, 1947. After the period, the defendant is no longer entitled to the possession of the haciendas in question, nor their corresponding sugar quota for the crop year 1947-48. If the defendant had already planted sugar canes to the extent he had testified to during the trial in preparation for the 1947-48 milling season, he did so at his own risk and responsibility for which he could not hold the plaintiffs herein liable for any loss he may suffer thereby. The judgment is affirmed.

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