RCBC vs CA

G.R. No 133107, March 25, 1999

Facts: Petitioner and private respondent stipulated a contract of sale, where

payment of latter consisted of an initial lump sum and monthly installments,
which he already made in post-dated checks. They also executed a contract of
chattel mortgage (the car itself) stating that in the event of private
respondent’s default, he is bound to pay the entire remaining balance, along
with the interests of the balance. Unfortunately, one of the checks were left
unsigned, thus money debited from private respondent was returned in his
account. Later thereafter, petitioner declared him in default

Remedies: Regional Trial Court (won by PRIVATE RESPONDENT)

Court of Appeals (won by PRIVATE RESPONDENT)

Issue: Given of the facts, the questions posed is whether or not the unsigned
check causes respondent to be in default, and (underlying issue?) whether or
not the chattel mortgage should be enforced.

Rule: Art. 1159 of the Civil Code provides contractual obligations must be
complied with good faith. Also, Art. 1370 provides that if the terms of a
contract are clear and leave no doubt of intention of the contracting parties,
the literal meaning shall control.

Application: In this case, petitioner could have simply communicated such

error to private respondent and asked for the signature. Instead, the former
chose to inform him late that he “defaulted” from his payments, clearly an
absence of good faith (Art. 1159). Also, it is clearly indicated that the chattel
mortgage should only be enforced in the event that private respondent fails
to pay for any of the installments (Art. 1370). He however did not fail to pay,
given of the existence of sufficient funds, only the absence of required
signature.

Conclusion: From the foregoing, it is likely the Court may declare him not in
default, and the mortgage will not be enforced.
 Chaves vs Gonzales
G.R. No. L-27454, April 30, 1970

Facts: Petitioner commissioned respondent for the cleaning and repairing of

his typewriter. However, after repeated requests of the former for the latter’s
speedy service, the typewriter was ultimately left unrepaired. Petitioner
eventually asked for the return of his typewriter. Alas, it was returned in
shambles and some of its parts missing. He commissioned another for its
repair. He then asked through the Court, payment for damages (isolated on
the relevant ones only) for the non-repair, and the payment petitioner made
to another repairman.

Remedies: Court of First of Instance (actually won by PETITIONER but

unsatisfied with the rule.

Issue: Given these set of facts, the question posed now is whether or not
defendant is liable for these damages petitioner is allegedly entitled to

Rule: Art. 1167 of the Civil Code provides that if a person obliged to do
something is fails to do it, the same shall be executed at his cost. Also, Art.
1170 provides that those who in the performance of their obligation are guilty
of contravening the tenor of such, are liable for damages.

Application: In this case, even from his own admission, respondent failed to
repair the typewriter. By virtue of Art. 1167, he is liable for the cost petitioner
incurred when he commissioned another person for its repair. As to his return
to petitioner of an already-cannibalized, unrepaired, and incomplete
typewriter, he contravened the tenor of his obligation, for he was obliged to
return it to the same condition it was when he received it (Art. 1170).

Conclusion: From the foregoing, it is likely that defendant will be liable for
the damages petitioner, as he claimed, are entitled to.

Note: Moral and temperate damages, and attorney fees was not affirmed as
they were not alleged in the complaint.
 Tanguilig vs CA
G.R. No. 117190, January 2, 1997

Facts: Petitioner proposed to private respondent to construct windmill for

him with a guaranty. They eventually agreed upon such, with respondent
paying for a downpayment and an installment payment, with a certain
balance. Later on, respondent refused to pay the balance, because he already
paid another to construct a deep well, which petitioner failed to build.
Furthermore, petitioner states that non-payment may also because of
destruction of the windmill, which he claims a cause of fortuitous event.

Remedies: Regional Trial Court (won by PETITIONER)

Court of Appeals (won by RESPONDENT)

Issue: Given these set of facts, the questions posed is whether or not such
construction of the windmill included the installation of deep well
(underlying issue: which may institute respondent to commission it to
another – if it was allowed.) and whether petitioner is under obligation the
reconstruction.

Rule: Art. 1371 of the Civil Code provides that the parties’ contemporaneous
and subsequent acts shall be the consideration to judge intention of
contracting parties. Next, Art. 1240 provides that payment shall be made to
the person whose favor the obligation has been constituted or any person
authorized to receive it. Then, Art. 1174 provides that no person shall be
responsible for events which could not be foreseen or inevitable. Finally,
Nakpil v CA provides for the precepts to who may avail defense of a
“fortuitous event.”

Application: In this case, the words “suitable for” and “for” in the proposal
were meant to convey the idea it appropriateness for a deep well. Also acts
before and after the contract does not uphold respondent’s defense (Art.
1371). Consequently, Art. 1240 cannot be raised for two reasons: (1) obligation
did not include construction of the deep well, (2) no substantial proof that he
was authorize to receive such payment in lieu of petitioner.
Onto the second issue, Art. 1174 cannot be invoked because it
was proven that it was not a typhoon that wrecked the windmill but a strong
wind, which does not constitute a fortuitous event.

Conclusion: From the foregoing, it is likely that the Court will award
petitioner of the balance. However, he is liable for the reconstruction of the
windmill
 Enriquez vs Ramos
G.R. No. L-23616, September 30, 1976

Facts: Plaintiffs averred they sold to defendant lots, of which P200,000 the
remaining balance with interests. They also executed a mortgage (if not
registered, obligation is due and demandable; mortgagor to shoulder taxes)
of various lands in favor of plaintiff should defendant fail to pay. Currently,
plaintiffs argued that defendant violated such agreement/s (?): (1) refused to
pay on stipulated period, (2) a property was not registered for mortgage, and
(3) taxes were not paid. Defendants replied: (1) by res judicata, she has not
paid the taxes and registered the mortgage as it was only a minor matter, (2)
the paving of the roads, which attracted defendant on the sold lots, were still
incomplete, and (3) no demands of payment were made upon completion. No
contention however that she has not paid the balance.

Remedy: Court of First Instance (won by DEFENDANT)

Issue: From the foregoing facts, the question posed is whether or not
respondent has defaulted from her payments.

Rule: Art. 1187 of the Civil Code provides that effects of a conditional
obligation to give, once condition is fulfilled, shall retroact to the day of the
constitution of the obligation.

Application: In this case, the paving of the roads was the prime consideration
of defendant of buying the lots, which she will turn to a subdivision. Any
aversion by defendant (e.g. no trees and water system, acceptance of City
Planning) definitely are not within those contemplated. With such obligation
resolved, defendant cannot argue that proper demands were not made as
effect of such demand retroacts of the constitution of obligation (Art. 1187)

Conclusion: From the foregoing, it seems that the Court may favor the
plaintiff-appellee for his cause.

Notes: Art. 1169 provides demand by creditor shall not be necessary when the
law expressly so declare (may refer to Art. 1187)
 DBP vs Mirang
G.R. No. L-29130, August 8, 1975

Facts: Petitioner granted defendant (now the appealing party) a loan for the
latter’s farming needs, with his homestead as the guaranty. Unfortunately, a
mosaic disease affected defendant’s plantation, and has eventually failed to
pay for the annual amortizations of his loan. His property then was sold for
public auction, with which plaintiff itself the winning bidder. Defendant then
aver that the mortgage absolves him from indebtedness. If not, he prays for
reduction by reason of the attack of the mosaic disease upon the plants.

Remedy: Court of First Instance (won by Plaintiff-appellee)

Issue: Given of the facts, the question posed is whether or not the sale of
defendant’s property absolves him of his indebtedness. Also whether he can’t
be absolved, be at least granted reduction to such indebtedness

Rule: In Philippine Bank of Commerce vs de Vera, it is provided that a real

estate mortgage does not limit or minimize the amount of the obligation.
Furthermore, if after the sale, there is deficiency, the mortgagee may proceed
for a proper action.

Application: In this case, sale of defendant’s homestead in public auction,

upon collection of proceeds thereafter, does not absolve him of his total debt.
Also, the misfortune defendant faced does not justify disregard of the terms
of the contract he entered into.

Conclusion: From the foregoing, it is likely that defendant would be required

for the payment of the deficiency and cannot be necessarily entitled to
reduction of such indebtedness.
 Repide vs Afzelius
G.R. No. L-13438, November 20, 1918

Facts: Plaintiff agreed to sell his land to defendant, on a terms of payment of

lump sum and the remaining balance to be paid in monthly installments. The
land itself was to be mortgaged for security. Unfortunately, defendant
withdrew his interest of the purchase. for reasons of equity or lack of money.
He furthers that obligation is extinguished. Plaintiff however demand the
execution of the agreement.

Remedy: Court of First Instance (won by DEFENDANT)

Issue: From the given facts, the question posed is whether or not plaintiff may
demand the performance of creditor of their agreement.

Rule: According to Art. 1451 of the Spanish Civil Code, a promise to sell or
buy, when there is an agreement as to the thing and the price, entitles the
contracting parties reciprocally to demand the fulfillment of the contract.

Application: In this case, they already had a prior agreement for plaintiff to
sell the land, and for defendant to buy it. Reasons of equitable doctrine cannot
be held if there exists a law demanding such and does not absolve him of
obligation.

Conclusion: From the foregoing, it is likely that plaintiff in this case may have
a favorable judgment against the defendant.

Note: Art. 1124 provides right of prejudiced person exacting performance of

obligation or indemnity for damages and payment of interest.
 Dioquino vs Laureano
G.R. No. L-25906, May 28, 1970

Facts: Plaintiff and defendant drove together to the office of the latter to
register former’s vehicle. While on the way, some mischievous kids stoned
said vehicle, breaking the windshield. The defendant, who effectively
borrowed the car, refused to hold the children liable for shattering the
windshield as it was due to a fortuitous event. Plaintiff then filed this action
against defendant.

Remedy: Court of First Instance (won by PLAINTIFF v principal defendant)

Issue: Given of the facts, the question posed is whether or not the defendant,
the borrower of the car, is absolved of liability and (underlying issue) the
stoning of children may be considered fortuitous.

Rule: Art. 1174 of the Civil Code provides no person shall be responsible for
those events which could not be, foreseen, or which, though foreseen were
inevitable.

Application: In this case, defendant clearly did not foresee children would
perform such mischief upon plaintiff’s vehicle. It definitely constitutes a
fortuitous event (Art. 1174). Also mere difficulty to foresee is not impossibility
to foresee the same.

Conclusion: From the foregoing, it seems that defendant may be relieved from
paying any indemnity to plaintiff as such circumstance was fortuitous in
nature.
 Republic vs Luzon Stevedoring Corp.
G.R. No. L-21749, September 29, 1967
I — The lower court erred in not holding that the herein defendant-appellant had exercised the diligence required of
it in the selection and supervision of its personnel to prevent damage or injury to others. 1aw phîl.nèt

II — The lower court erred in not holding that the ramming of the Nagtahan bailey bridge by barge L-1892 was
caused by force majeure.

III — The lower court erred in not holding that the Nagtahan bailey bridge is an obstruction, if not a menace, to
navigation in the Pasig river.

IV — The lower court erred in not blaming the damage sustained by the Nagtahan bailey bridge to the improper
placement of the dolphins.

V — The lower court erred in granting plaintiff's motion to adduce further evidence in chief after it has rested its
case.

VI — The lower court erred in finding the plaintiff entitled to the amount of P192,561.72 for damages which is clearly
exorbitant and without any factual basis.

Rule For caso fortuito or force majeure(which in law are identical in so far as they exempt an obligor from
liability)2 by definition, are extraordinary events not foreseeable or avoidable, "events that could not be foreseen, or
which, though foreseen, were inevitable" (Art. 1174, Civ. Code of the Philippines). It is, therefore, not enough that
the event should not have been foreseen or anticipated, as is commonly believed, but it must be one impossible to
foresee or to avoid. The mere difficulty to foresee the happening is not impossibility to foresee the same:
 Victoria Planters Association vs Victorias Milling Co.
G.R. No. L-6648, July 25, 1955

Rule: Fortuitous event relieves the obligor from fulfilling a contractual obligation. 1174
 In Re: Estate of Ceballos
G.R. No. L-4190, December 17, 1908
First. That judge erred in allowing the appeal of the widow from the order of
partition, but it appears in the case that the appeal has since been abandoned
and in concluding their presentation of this point the appellant's counsel say:

Second. That the judge erred in not declaring that Doña Matilde Aramburu had
no further interest in the estate.
Third. That the court erred in not declaring the purchaser subrogated to the
rights of Doña Matilde Aramburu in the state

Rule: art. 1111 Spanish Civil Code

 Bastida and Ysmael & Co. vs Dy Buncio
G.R. No. L-5145, May 27, 1953
This is an appeal from a decision of the Court of First Instance of Manila ordering defendant to execute a deed of sale
covering its oil and lard factory located in Makati, Rizal, together with the lot but excluding the machinery for
manufacturing paper, in favor of plaintiff Juan Ysmael & Co., Inc., which in turn is ordered to pay defendant the sum
of P260,000 as purchase price, and the sum of P4,503.10 as rental for September, 1950, said decision further ordering
defendant to pay the plaintiffs the sum of P10,000 as attorney's fees and the costs of action.

Rule: There are certain moral and legal considerations that stand on his way. He is barred from doing so not only
to buy the rule of equity which requires that whoever goes to court must do so with clean hands, but by the well-known
rule of law that he who has capacity to contract may not invoke the incapacity of the party with whom he contacted as
a defense against performance (Articles 1937, New Civil Code

All rights acquired by virtue of an obligation are transmissible in accordance with law if the contrary is not stipulated