Documente Academic
Documente Profesional
Documente Cultură
JESUS V. OCCEŇA and EFIGENIA C. OCCEŇA vs. H ON. However, Tropical Home’s complaint does not seek for its
RAMON V. JABSON, Presiding Judge of the Court of therefrom, but for the court “to modify the terms and
First Instance of Rizal, Branch XXVI; COURT OF conditions of the contract by fixing the proper shares that
APPEALS and TROPICAL HOMES, INC. should pertain to the parties out of the gross proceeds from
G.R. No. L-44349, October 29, 1976, Teehankee, J. the sales of the subdivision lots.” Article 1267 of the Civil Code
does not grant the courts the authority to remake, modify or
Facts: Private respondent, Tropical Homes, entered into a revise the contract or to fix the division of shares between the
contract of subdivision with petitioner, Occena, whereby the parties as contractually stipulated with the force of law
former would develop a parcel of land owned by the latter into between the parties, so as to substitute its own terms for
subdivision lots. Under said contract, Occena would receive “an those covenanted by the parties themselves.
amount equivalent to forty percent (40%) of all the cash
receipts from the sales of the subdivision lots.” Tropical Home’s complaint for the modification of the contract
has no basis in law and hence, has no cause of action.
Later, however, Tropical Homes filed a complaint to the Court
of First Instance (CFI) “to modify the terms and conditions of NAGA TELEPHONE CO., INC.(NATELCO)AND LUCIANO
the contract by fixing the proper shares that should pertain to M.MAGGAY vs. THE COURT OF APPEALS AND
the parties out of the gross proceeds from the sales of the CAMARINES SURII ELECTRIC COOPERATIVE, INC.
subdivision lots.” The complaint was grounded by certain (CASURECO II)
events and changes in the circumstances which could not have G.R. No. 107112 February 24, 1994 Nocon, J.:
been foreseen by the parties at the time of the execution of
contract resulting to extreme difficulty in the performance of Facts: NATELCO entered into contract with Camarines Sur II
the obligation and Article 1267 of the Civil Code. Electric Cooperative for the use in operation of its telephone
service, electric light posts of CASURECO II and in return,
As alleged by Tropical Homes, these changes in the there will be free use of telephone connections as long as
circumstances were consisted of: “increase in the price of oil NATELCO need electric light posts. The contract provided
and its derivatives, worldwide spiraling increase in prices and under exhibit A that the term or period of this contract shall be
increase in the prices of all commodities including basic raw as long as the party of the first part has need for the electric
materials required for such development work.” It further light post of the party of the second part it being understood
alleged that such increase in the prices had risen to levels that this contract shall terminate when for any reason
which were “unanticipated, unimagined, and not within the whatsoever the party of the second is forced to stop,
remotest contemplation of the parties at the time said abandoned its operation as a public service and it becomes
agreement was entered into and to such degree that the necessary to remove the electric light post; After 10 years,
conditions and factors which formed the original basis of said CASURECO files for reformation of contract with damages, not
contract had been totally changed.” conforming to the guideline of National Electrification
Administration of reasonable compensation for use of posts.
In filing the complaint, Tropical Homes invoked Article 1267 of Compensation is worth P10, but the consumption of telephone
the Civil Code which provides that: “When the service has cables cost P2630 NATELCO, who used 319, without the
become so difficult as to be manifestly beyond the contract of P10 each, refused to pay. The latter barred by the
contemplation of the parties, the obligor may also be released prescription.
therefrom, in whole or in part.”
Issues: 1. Whether or not Article 1267 is applicable in this
Occena moved to dismiss the complaint for want of cause of case
action. Said motion was denied by the CFI and, subsequently, 2. Whether or not the action for reformation of
by the Court of Appeals. contract has prescribed
3. Whether or not the condition is purely potestative
Hence, this petition to the Supreme Court.
Held: Yes, Article 1267 of the Civil Code is applicable in the
Issue: Does Article 1267 of the Civil Code, on extreme present case which states that when the service has become
difficulty in the performance of the obligation as a ground for so difficult as to be manifestly beyond the contemplation of the
the release of the obligor from performance thereof, authorize parties, the obligor may be release therefrom in whole or in
the court to modify the terms and conditions of the contract? part. The term “service” should be understood as referring to
the “performance” of the obligation. Here, the obligation of
Ruling: No, Article 1267 of the Civil Code does not authorize private respondent consist in allowing petitioners to use Naga
the court to change the terms and conditions of the contract. City, which is the service contemplated in said article. It is not
a requirement that the contract be for future unusual change.
Assuming arguendo that Tropical Homes sufficiently Article 1267 states in our law the doctrine of unforeseen
established by evidence its factual allegations, then it could be events. This is said to be based on the discredited theory
released from performance of its obligations, in whole or in of rebus sic stantibus in public international law; under this
part, as provided by Article 1267 of the Civil Code. theory, the parties stipulate in the light of certain prevailing
conditions, and once these conditions cease to exist the
contract also ceases to exist. Considering practical needs and
1. That each one of the obligors be bound CKH Industrial Development v. Court of Appeals, 272 SCRA
principally, and that he be at the same time 333 (1997)
a principal creditor of the other;
2. That both debts consists in a sum of money, SPOUSES ALEJANDRO MIRASOL and LILIA E. MIRASOL,
or if the things due are consumable, they be
petitioners,
of the same kind, and also of the same
quality if the latter has been stated; vs. THE COURT OF APPEALS, PHILIPPINE NATIONAL
3. That the two debts be due; BANK, and PHILIPPINE EXCHANGE CO., INC.,
4. That they be liquidated and demandable; respondents.
5. That over neither of them there by any G.R. No. 128448. February 1, 2001 Quisumbing, J.:
retention or controversy, commenced by
third persons and communicated in due time
to the debtor." Facts: The Mirasols are sugarland owners and planters. In
1973-1974, they produced 70,501.08 piculs of sugar,
Petitioners now claim that the dacion en pago and the Second, compensation cannot take place where one claim,
foreclosure of their mortgaged properties were void for want of as in the instant case, is still the subject of litigation, as
consideration. Petitioners insist that the loans granted them by the same cannot be deemed liquidated.
PNB from 1975 to 1982 had been fully paid by virtue of legal
compensation. Hence, the foreclosure was invalid and of no 2. No, the petitioners arguments were unpersuasive. Both
effect, since the mortgages were already fully discharged. It is the lower court and the appellate court found that the
also averred that they agreed to the dacion only by virtue of a Mirasols admitted that they were indebted to PNB in the
martial law Arrest, Search, and Seizure Order (ASSO). sum stated in the latters counterclaim. Petitioners
nonetheless insist that the same can be offset by the
Issue: unliquidated amounts owed them by PNB for crop years
Despite the Deed of Assignment, UPSUMCO filed a complaint The absence of the mutual creditor-debtor relation
for sum of money and damages against PNB and APT before between the new creditor APT and UPSUMCO does not
the RTC of Bais City alleging that PNB and APT illegally negate the Conventional Compensation. As soon as PNB
appropriated funds belonging to UPSUMCO through (1) assigned its credit to APT, the mutual creditor-debtor
withdrawals made from the bank accounts of UPSUMCO from relation between PNB and UPSUMCO ceased to exist.
August 27, 1987 up to February 12, 1990; (2) application of However, PNB and UPSUMCO had agreed to a
proceeds from the sale of the sugar of UPSUMCO from August Conventional Compensation, a relationship which does not
27, 1987 up to December 4, 2987 and (3) payment from the require the presence of all the requisites under Article
funds of UPSUMCO with PNB for the operating expenses of the 1279. And PNB too had assigned all its rights as creditor
sugar mill after September 3, 1987, allegedly upon the to APT including its rights under Conventional
instruction of APT and consent of PNB. Compensation.
The RTC rendered judgment in favor of UPSUMCO. The CA 2. No, only the takeoff loans were condoned by APT. By the
reversed the RTC’s ruling contending that only the takeoff very language of the Deed of Assignment, it was evident
loans were condoned by the Deed of Assignment. In a that UPSUMCO’s allegation in its complaint that all of its
Decision and Resolution dated, November 28, 2006 and July accounts were condoned was not proven. Even if neither
11, 2007, respectively, the Court (Third Division) reversed and PNB nor APT had filed an answer, there would have been
set aside the CA Decision. Thereafter, the case was referred to no basis in fact for the trial court to conclude that all of
the Court en banc which reversed the Third Division ruling. UPSUMCO’s loans were condoned or issue reliefs as if all
the loans were condoned.
Issue/s:
1. Whether or not there was Compensation between The earlier rulings of the Court were predicated on a
UPSUMCO and APT. finding that there was a “friendly foreclosure” agreement
2. Whether or not both the takeoff loans and operational between APT and UPSUMCO, whereby APT agreed to
loans of UPSUMCO were condoned by APT. condone all of UPSUMCO’s outstanding obligations in
exchange for the latter’s waiver of its right to redeem the
Ruling: foreclosed property. However, no such agreement to that
1. Yes, there was Compensation between UPSUMCO and effect was ever committed to writing.
APT. It might seem that APT has no right to set-off
payments with UPSUMCO for under Article 1279, it is
NOVATION
necessary for compensation that obligors be bound
principally, and that he be at the same time a principal FUA CAM-LU, PLAINTIFF/APPELLEE,
creditor of the other. There is, concededly, no mutual VS. YAP FAUCO AND YAP SINGCO,
creditor-debtor relation between APT and UPSUMCO. DEFENDANTS/APPELLANTS
BENEFIT ASSOCIATION, INC., AND GRACIELA
However, the Court recognized the concept of ELEAZAR, RESPONDENTS.
Conventional Compensation, defined as occurring “when G.R. No. L-48797, July 30, 1943 TORRES, JR., J.
the parties agree to compensate their mutual obligations
even if some requisite is lacking, such as that provided in Facts
Article 1282”. It is intended to eliminate or overcome By virtue of a writ of execution, a certain parcel of land
belonging to the appellants, assessed at P3,550.00 was levied
obstacles which prevent ipso jure extinguishment of their upon the Provincial Sheriff who on November 15, 1933 made a
obligations. Legal Compensation takes place by operation notice duly posted in the conspicuous places and published in
of law when all the requisites are present, as opposed to the Mamera Press, that said land be sold at public auction on
Ruling
YES. Appellants liability under the judgment in the civil case G.R. No. L-25897 August 21, 1976
had been extinguished by the statement evidenced by the AGUSTIN DORMITORIO and LEONCIA D.
mortgage executed by them in favor of appellee. Although said DORMITORIO, petitioner vs. H
ONORABLE JOSE
mortgage did not expressly cancel the old obligation, this was FERNANDEZ, Judge of the Court of First Instance of
impliedly novated by reason of the incompatibility resulting Negros Occidental, Branch Bacolod City, and SERAFIN
from the fact that, whereas the judgment was for P1, 538.04 LAZALITA, r espondents.
payable at one time, did not provide for attorney’s fees, and
was not secured, the new obligation is for P1, 200 payable in FERNANDO, A
cting C.J.:
installments, stipulates for attorney’s fee, and is secured by a Facts:
mortgage. The later agreement did not merely extend the time The Municipality of Victorias is the owner of several parcels of
to pay the judgment, because it was therein recited that lands in Victorias, Negros Occidental. In 1948, it sold lot No.1
appellant promised to pay P1, 200 to appellee as a settlement Block 16 with an area of 230 sq. m. at 1 peso per sq. meter to
of said judgment. Said judgment cannot be said to have been Serafin Lazalita. Payment for said lot was completed in 1958.
settled, unless it was extinguished.
Lazalita had been in full and peaceful possession of the
said land for eight continuous years and he introduced
Eusebio S. Millar, petitioner, vs.The Hon. Court of permanent and invaluable improvements thereon such as fruit
Appeals and Antonio P. Gabriel, respondents trees, a house of strong materials, etc.
G.R. No. L-29981 April 30, 1971 Castro, J.:
In 1955, Agustin and Leoncia Dormitorio also purchased
Facts: M illar obtained a favorable judgment from the CFI a land from the Municipality of Victorias. They bought Lot No.
condemning Antonio P. Gabriel to pay him the sum of 1,746.98 2, Block 16 having an area of 343 sq. meters at 1 peso per sq.
with the interest at 12% per annum from the date of the filing meter. They, however, have not taken actual possession of the
of the complaint, the sum of P400 as attorney’s fees, and the land.
costs of suit. The lower court issued the writ of the execution
on the basis of which the sheriff seized the respondent’s Willy’s In 1958, Dormitorio’s filed a suit for ejectment against
Ford jeep. The respondent, however, pleaded with the Lazalita. The Municipal Mayor and Council tried to settle the
petitioner to release the jeep under as arrangement whereby matter between the parties. A private surveyor was hired and
the respondent, to secure the payment of the judgment debt, it was found out that the lot sold by the Municipality to Lazalita
agreed to mortgage the vehicle in favor of petitioner. The was converted to the Municipal Road known as Jover Street
petitioner agreed to the arrangement; thus, the parties and the lot presently occupied by him is supposed to be Lot.
executed a chattel mortgage on the jeep. Resolution of the No. 2 bought by the Dormitorio’s.
controversy posed by the petition at bar hinges entirely on a
determination of whether or not the subsequent agreement of 1961- CFI rendered judgment in favor of the
the parties as embodied in the deed of chattel mortgage
G.R. No. L-18411 December 17, 1966 WHEREFORE, the judgment appealed from should be, as it is
MAGDALENA ESTATES, INC., plaintiff-appellee, hereby, affirmed, with costs against the appellants.
vs.
ANTONIO A. RODRIGUEZ and HERMINIA C.
RODRIGUEZ, defendants-appellants.
Secondly, the Nov 1980 Lease Contract made it clear that a ISSUE:
temporary and provisional concessional reduction of rentals
that Broadway might grant was not to be construed as Whether or not the petitioner is liable as surety under the
alteration or waiver of any way to the terms of the lease Diamond card revolves around the effect of the upgrading by
contract itself. The course of discussions between the parties Danilo Alto of his card. Was the upgrading a novation of the
after the execution of the letter agreement shows that there original agreement governing the use of Danilo Alto's first
was no agreement that the reduction in rentals is to persist for credit card, as to extinguish that obligation and the Surety
the rest of the 10-year lease. Undertaking which was simply accessory to it?
Finally, the “low volume of sales” that Tropical was stating as
their cause for petitioning a reduction in rental rates was based RULING:
on feasibility study that Tropical had made on its own before Yes, there is no doubt that the upgrading was a novation of
Tropical and Broadway have entered into their 1980 lease the original agreement covering the first credit card issued to
contract. It was no more than an expression of Tropical’s own Danilo Alto, basically since it was committed with the intent of
expectations when it entered into the Contract of Lease. cancelling and replacing the said card. However, the novation
did not serve to release petitioner from her surety obligations
because in the Surety Undertaking she expressly waived
MOLINO v. SECURITY DINERS discharge in case of change or novation in the agreement
G.R. No. 136780, August 16, 2001 governing the use of the first credit card.
GONZAGA-REYES, J.:
The nature and extent of petitioner's obligations are set out in
FACTS: clear and unmistakable terms in the Surety Undertaking. She
The Security Diners International Corporation ("SDIC") declared that "any change or novation in the Agreement or any
operates a credit card system under the name of Diners Club extension of time granted by SECURITY DINERS to pay such
through which it extends credit accommodation to its obligation, charges, and fees, shall not release (her) from this
cardholders for the purchase of goods and payment of services Surety Undertaking".
from its member establishments to be reimbursed later on by
The Court of Appeals rendered a decision ordering
the cardholder upon proper billing. There are two types of
defendant-appellee Jeanette D. Molino-Alto to pay
credit cards issued: one, the Regular (Local) Card which plaintiff-appellant Security Diners International, Inc. the
entitles the cardholder to purchase goods and pay services following:
from member establishments in an amount not exceeding
P10,000.00; and two, the Diamond (Edition) Card which 1. The sum of P166,408.31 plus interest of 3% per annum and
2% per month from November 9, 1988 until the obligation is
entitles the cardholder to purchase goods and pay services fully paid;
from member establishments in unlimited amounts. One of 2. The amount equivalent to 10% of the obligation mentioned
the requirements for the issuance of either of these cards is in the preceding paragraph as attorney's fees; and
that an applicant should have a surety. 3. Costs.
Ruling
Genaro Tomimbang, the younger brother of herein parties, The 12% per annum rate under CB Circular No. 416 shall apply
testified that a meeting was held among petitioner, only to loans or forbearance of money, goods, or credits, as
respondent, himself and their eldest sister Maricion, sometime well as to judgments involving such loan or forbearance of
during the first or second quarter of 1997, wherein respondent money, goods, or credit, while the 6% per annum under Art.
demanded payment of the loan, and petitioner agreed to pay. 2209 of the Civil Code applies "when the transaction involves
Indeed, petitioner began to make monthly payments from the payment of indemnities in the concept of damage arising
June to October of 1997 totalling ₱93,500.00.8 In fact, from the breach or a delay in the performance of obligations in
petitioner even admitted in her Answer with Counterclaim that general," with the application of both rates reckoned "from the
she had "started to make payments to plaintiff [herein time the complaint was filed until the [adjudged] amount is
respondent] as the same was in accord with her commitment fully paid." In either instance, the reckoning period for the
to pay whenever she was able; x x x ." commencement of the running of the legal interest shall be
subject to the condition "that the courts are vested with
Evidently, by virtue of the subsequent agreement, the parties discretion, depending on the equities of each case, on the
mutually dispensed with the condition that petitioner shall only award of interest.
begin paying after the completion of all renovations.
In accordance with the above ruling, since the obligation in
There was, in effect, a modificatory or partial novation, of this case involves a loan and there is no stipulation in writing
petitioner's obligation. Article 1291 of the Civil Code provides, as to interest due, the rate of interest shall be 12% per annum
thus: computed from the date of extrajudicial demand.
Art. 1291. Obligations may be modified by: Petition in AFFIRMED with a modification that the award for
(1) Changing their object or principal conditions; attorney’s fees be deleted.
(2) Substituting the person of the debtor;
(3) Subrogating a third person in the rights of the creditor.
In Iloilo Traders Finance, Inc. v. Heirs of Sps. Soriano, Quinto v. People, 305 SCRA 709 (1999)
the Court expounded on the nature of novation, to wit: Facts:
On March 29, 1977, accused received jewelry worth 36k to
Novation may either be extinctive or modificatory, much being Aurelia (1 set of marques w/ briliantes worth 17,500, 1 solo
dependent on the nature of the change and the intention of ring 2 karats and 30 pts worth 16000, and 1 diamond ring
the parties. Extinctive novation is never presumed; there must rosetas worth 2,500).It was agreed that the same shall sell on
be an express intention to novate; x x x . commission basis and jewelries shall be returned 5 days after
An extinctive novation would thus have the twin effects of, receipt when not sold. Quinto asked Aurelia additional time but
first, extinguishing an existing obligation and, second, creating after 6 months and the latter failed to commission sale,
a new one in its stead. demanded from Quinto to return them yet she refused. Hence,
Aurelia filed estafa against Quinto.