Doctrine

Accessory
obligations

Case Title
Land Bank of
the
Philippines v.
Atlanta
Industries

Breach of
contract &
proximate
cause

Spouses
Guanio v.
Makati
Shangri-La

Breach of
contract

R.S. Tomas,
Inc. v. Rizal

Facts
Land Bank and the International Bank for
Reconstruction and Development entered into
a loan agreement for the implementation of
the IBRDs Support for Strategic Local
Development and Investment Project.
Pursuant to this, Land Bank entered into a
Service Level Agreement with the City of Iligan
to finance the development and expansion of
the water supply system. Iligan then
conducted a public bidding for the supply and
delivery of pipes, which Atlanta Industries won.
However their bid was contested, as it did not
comply with certain requirements of
government procurement authorities. Land
Bank contends that the SLA between them and
IBRD is an executive agreement and must be
exempt from the public bidding requirements.
Spouses Guanio booked the Makati Shangri-La
for their wedding reception. Respondents claim
that at the reception, they were served half
the size of the food that was promised and a
much higher price was quoted to them.
Additionally, there was a delay in the service
of dinner, certain food items listed on the
menu were unavailable, and despite a promise
from the hotel that there would be no charge if
they extended beyond midnight, they were
billed and paid an additional P8,000 per hour
for the three hour extension. Petitioners thus
sent a complaint letter which was responded
to by the Executive Assistant Manager.
Nevertheless petitioners filed this case. The
issue is whether or not the rule of breach of
contract and the doctrine of proximate cause
are applicable.
The contract involved in this case refers to the
rewinding and conversion of one transformer

Held/Ratio
YES. While there are requirements
for government procurement, it is
also recognized that the country has
a commitment to abide by its
obligations under any treaty,
international, or executive
agreement. The provisions of the
SLA cannot be treated as
independent of the original loan
agreement Land Bank and IBRD
entered into. It is an accessory
obligation of said loan. Thus it is
covered by the rule on treaties and
international agreements.

YES.
The petitioners were remiss in their
obligation to inform respondent of
the change in the expected number
of guests. This failure was the
proximate cause of the delay,
thereby excusing respondent from
any liability for damage or
inconvenience.

YES.

Breach of
contract

Compromise
agreement

Cement
Company

to supply respondent Rizal Cement Companys

power requirements. The project was
embodied in 3 orders which were awarded to
petitioner R.S Tomas, Inc. who represented
itself to be capable and competent. However
they failed to complete the projects within the
agreed period of time allegedly due to some
misrepresentation or fraud committed by
respondent as to the true nature of the subject
transformer. Would this be a breach of
contract?

San Fernando
Regala
Trading v.
Cargill
Philippines

Cargill and San Fernando were molasses

traders that did business with each other. San
Fernando claimed that Cargill reneged on its
contractual obligations to deliver certain
quantities of molasses. However Cargill
contended that San Fernando actually refused
to accept the goods, so they filed a complaint
for damages against San Fernando. The RTC
dismissed but the CA found Cargill in breach of
contract. The issue is whether or not Cargill
was guilty of breach.

Spouses
Cachopero v.
Rachel
Celestial

Celestial owned an old residential house where

the Spouses Cachopero were living. Thereafter
Celestial filed an ejectment case against them,
which was later resolved through a
Compromise Agreement. The agreement
stated the Spouses Cachopero were to vacate
the premises while Celestial would shoulder
the expenses of dismantling and
reconstructing the house. However a portion of
the house beyond Celestials lot was not
demolished, so Celestial filed for Writ of

Petitioner is guilty of breach of

contract as they did not complete
the projects they had undertaken to
do. They had repeatedly asked for
extensions on the project, which
does not lend credence to their
contention that they belatedly
discovered the defects in the
transformer as they could have
asked for another extension or
another transformer from
respondent.
YES.
Cargill was required to deliver 4000
metric tons of molasses during the
period April to May 1997, anything
less constitutes a breach of contract.
When Cargill wrote to San Fernando
proposing that they move the due
date to May to July 1997, San
Fernandos refusal to signify its
conformity on the letter proposal
suggests it was not amenable to
change. Thus Cargil; was already in
delay.
YES.
The terms of the compromise
agreement involved herein are clear
and unequivocal. The spouses
Cachopero agreed to vacate
Celestials lot and transfer the old
house to the land at the back of
Celestials lot. Thus Celestials
petition is anchored on her rights
emanating from the Compromise

Compromise
agreement

Consideration
without the
requisite
consideration,
the contract
is void

Moldex Realty
Inc. v.
Spouses
Villabona

Cojuangco, Jr.
v. Republic of
the
Philippines

Execution but was denied. Does Celestial have

the right to have that part of the house
demolished?
The Spouses Villabona alleged that they were
the true owners of certain lots. They claimed
that Moldex, through representatives Anselmo
Agero and Levi Sayo, negotiated for the
purchase of both lots and was able to obtain
original copies of OCTs covering said lots.
Villabona alleged that Moldex caused the
cancellation of said OCTs through a falsified
deed of absolute sale. However Agero and
Sayo denied being Moldexs agents. Moldex
alleged that they were real estate brokers and
that Villabona himself had delivered the OCTs.
During the trial the Villabonas counsel
manifested that there was a compromise
agreement approved by them and submitted
such for approval of the court. However the
Villabonas repeatedly failed to appear in court,
and Moldex had some absences as well. RTC
gave Moldex 15 days to submit written formal
offer of evidence. However without waiting for
such the RTC rendered a decision in favor of
Villabona, which Moldex now contests.
This case involves the coconut levy fund case
of Republic v. COCOFED (the judgment of
which is called PSJ-A). The issue at bar
revolves around the compensation paid to the
petitioner for exercising his personal and
exclusive option to acquire the shares of UCPB.
The Sandiganbayan struck down this
agreement as void for lack of consideration. Is
the PCA-Cojuangco Agreement valid for having
the requisite consideration?

Agreement executed with the

Spouses Cachopero.
NO.
While some of the delays were
attributable to Moldex, such was
agreed upon in the compromise
agreement in order to reach an
amicable settlement. Upon failure to
present such, what the RTC should
have done was to continue the trial
by allowing Moldex to present
evidence in chief rather than
immediately considering the case
submitted for decision.

YES.
A perusal of the PCA-Cojuangco
Agreement discloses an express
statement of consideration for the
transaction. Although there was a
perceived lack of any pecuniary
value or advantage to the
government which could
compensate for the generous
advantage given to Cojuangco,
inadequacy of cause does not

invalidate a contract.
Consignation

Soledad
Dalton v. FGR
Realty and
Development
Corp.