85577257 compiled digests in oblicon

8/13/2019 85577257 Compiled Digests in ObliCon

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Compilation of Cases in Obligations and Contracts

Prepared by LLB 1-4 (2ndsemester 09-10)


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Article 1158

Manila Trading and Supply Co. vs. Santos Saez 66 Phil. 2!

"acts#Manila Trading and Supply Co., the plaintiff sold to Santos Saez, the defendant a

determinate equipment. There was an unpaid balance amounting to P2,2.. !efendante"ecuted 2 promissory notes, the first three installments for P#$ each and the others for

P# payable on the #%th day of e&ery month beginning 'o&ember #%, #()) and mortgage

the said equiptment as a security.The defendant failed to pay any of the promissory notes,

the plaintiff attached the chattel mortgage and was sold in public auction in accordance with

*ct 'o.#$+ for P. in fa&or of the plaintiff as the highest bidder.

!efendant still owed the plaintiff for P#,+(.$$. The plaintiff filed an action for the payment

of the unpaid balance. The defendant claimed that the plaintiff-s action will not prosper

because it is contrary to *ct 'o.#22. The lower court fa&ored the plaintiff, hence this

appeal was filed.

$ssue#/hether or not the plaintiff had a right to a deficiency in conformity with the Chattel

Mortgage 0aw1*ct 'o.#223

%&'$()#The court held that *ct 'o.#22 has no application with this case otherwise it

would be gi&en a retroacti&e effect. The said act is not applicable to this case for the reason

that the mortgage which ga&e rise to the plaintiff-s requirements was e"ecuted on 4ctober ),

#()) and the aforesaid act too5 effect on !ecember (, #()). The action is the correlati&e of

a right and is nothing more than a remedy conceded by law to protect.

6f the plaintiff was entitled to the deficiency, 7udgment under *ct 'o #$+, this right alreadye"isted when *ct 'o.#22 was appro&ed and cannot be effected by the prohibition

contained in the latter *ct. The court did not err in declaring **ct 'o.#22 to be

inapplicable and in ruling that the plaintiff is entitled to the deficiency 77udgment in

accordance with *ct 'o.#$+.

Article 115*

Pichel vs. Alonzo 111 SC%A +1

"acts#This case originated in the lower Court as an action for the annulment of a 8!eed of

Sale8 dated *ugust #, #(%+ and e"ecuted by Prudencio *lonzo, as &endor, in fa&or of 0uis

Pichel, as &endee, in&ol&ing property awarded to the former by the Philippine 9o&ernment

under :epublic *ct 'o. . That the sale of the coconut fruits are for all the fruits on the

aforementioned parcel of land presently found therein as well as for future fruits to be

Civil Law Obligations and Contracts Page 2


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produced on the said parcel of land during the years period; which shall commence to run as

of S


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-illia /llendor0 vs. $ra Arahason 8 Phil. 585

"acts#Derein plaintiff 4llendorf and defendant *brahamson made and entered into

Contract of *greement. The first part hereby agrees to employ the defendant and the party

of the second obliges himself to wor5 for the plaintiff within the period of two years.

!efendant obligates and binds himself to de&ote his entire time, attention, energies andindustry on the promotion of the furtherance of the business and interest of the party. Eailure

on the said duty shall entitle the plaintiff to discharge and dismiss the defendant. The second

part of the contract further binds the party that he will not enter whether directly or

indirectly to engage in a similar or competiti&e business. ?nder the term of this agreement,

the plaintiff left the employment due to illness and went to ?.S. *fter his departure, the

defendant returns to Manila as the Manager of the Philippine ?nderwear Company.

!efendant admits that both firms turn out the same class of goods and those they are

e"ported to the same mar5et. Dowe&er, he alleged that the said contract with the plaintiff

was &oid for it &iolates the right for free trade.

$ssue#/hether or not the contract is &oid due to the &iolation of the rights of trade.

,eld#'o, the contract was not &oid as constituting an unreasonable restraint of trade. The

rule is that the obligations created by contracts ha&e the force of law between the contracting

parties and must be enforce in accordance with their tenor. The only limitation upon the

freedom of contractual agreement is that the facts established shall not contrary to law,

morals or public order. The industry of counsel failed to disco&er direct e"pression of the

legislati&e which will prohibits such.

Article 1161

ernae Castillo3 et al. vs. The ,onorale Court o0 Appeals3 et al. 1!6 SC%A 5*1

"acts#This is a petition for re&iew on certiorari where petitioners see5 for the renewal of the

Court of *ppeals decision affirming the dismissal of the Court of Eirst 6nstance of the

complaint for damages filed by petitioners against the respondents >uanito :osario and

Cresencia :osario.

4n May 2, #(%$, petitioner =ernabe Castillo 1in his own behalf, and in behalf of Serapion

Castillo who has since then become deceased, and uanito

:osario and Cresencia :osario at =agac, Fillasis, Pangasinan causing in7uries to their

persons and damages to their respecti&e &ehicles.

The parties ha&e their own &ersion of what actually happened on that fateful day.


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/hile the case was pending in the Court of Eirst 6nstance of Manila, the Pro&incial Eiscal of

Pangasinan file an information dated September 2(. #(%$ against >uanito :osario for double

physical in7uries, double less serious physical in7uries, and damage to property thru rec5less

imprudence in the Court of Eirst 6nstance of ?rdaneta. :osario was prosecuted and

con&icted in the criminal case. Castillo then appealed to the Court of *ppeals which

rendered a decision acquitting him from the crime charged on the ground that his guilt has

not been pro&ed beyond reasonable doubt. 4n the other hand, the Court of Eirst 6nstance of

Manila rendered a decision on the basis of the testimonies and e&idence submitted by the

petitioners as well as the records of the case, dismissing the complain of the petitioners

against pri&ate respondents as well as the counterclaim of pri&ate respondents against

the petitioners. 4n >anuary 2, #(), petitioners appealed to the Court of *ppeals which

then affirmed the decision of the Court of Eirst 6nstance of Manila as it found no negligence

committed by >uanito :osario to warrant an award of damages to the petitioners. Dence, the

present petition for re&iew on certiorari.

$ssue#/hether or not the 7udgement of acquittal e"tinguishes ci&il liability based on the

same incident.

%uling#@es. The Court of *ppealsA findings that the collision was not due to the negligence

of >uanito :osario but =ernabe CastilloAs own act of dri&ing was actually the pro"imate

cause of the collision. /ith such findings and citing the cases Corpus &s Pa7e, 2+ SC:*

#%2, #%, #%; Earaon &s Priela, 2 SC:* $+2, $+); !e Soriano &s *lbornoz, (+ Phil.

+$, +++; Tan &s Standard Facuum 4il Co., (# Phil. %2, %$, the Court of *ppeals

e"onerated :osario from the ci&il liability on the ground that the alleged negligence did not

e"ist.

Petition denied. 'o pronouncement as to costs.

Article 1162

Padua vs. %oles 66 SC%A +85

"acts#The citation of the case was a negligent act, homicide through rec5less imprudence

filed to dri&er :omeo Punzalan and defendants appellees as subsidiary liable, which gi&e

rise to two separate liabilities, namely 1# the ci&il liability arising from crime or culpacriminal and 12 the liability arising from ci&il negligence or so called culpa aquiliana.

$ssue#/hether or not that negligent act of Punzalan gi&es rise to the two separate and

independent liabilities.

,eld#6t is by now settled beyond all ca&il as to dispense with the citation of 7urisprudence,

that a negligent act such as that committed by Punzalan gi&es rise to at least two separate



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and independent 5inds of liabilities, 1# the ci&il liability arising from crime or culpa

criminal and 12 the liability arising from ci&il negligence or the socalled culpa aquiliana.

These two concepts of fault are so distinct from each other that e"oneration from one does

not result in e"oneration from the other. *d7ecti&ely and substanti&ely, they can be

prosecuted separately and independently of each other, although *rticle 2# of the Ci&il

Code precludes reco&ery of damages twice for the same negligent act or omission, which

means that should there be &arying amounts awarded in two separate cases, the plaintiff may

reco&er, in effect, only the bigger amount. That is to say, if the plaintiff has already been

ordered paid an amount in one case and in the other case the amount ad7udged is bigger, he

shall be entitled in the second case only to the e"cess o&er the one fi"ed in the first case, but

if he has already been paid a bigger amount in the first case, he may not reco&er anymore in

the second case. Thus, in the case at bar, inasmuch as Punzalan had already been sentenced

to pay the herein petitioners the amounts abo&estated, in the subsequent criminal case, he

could not be ad7udged to pay a higher amount.

Article 116 4 1166

Agcaoili vs. )S$S 165 SC%A 1

"actsB 6n this case, appellant 9S6S appro&ed an application of the appellee *gcaoli for the

purchase of a house and lot in the 9S6S Dousing Pro7ect at 'ang5a, Mari5ina, sub7ect to the

condition that the latter should forthwith occupy the house, a condition that *gcaoli tried to

fulfill but could not because the house was absolutely uninhabitable. Dowe&er, *gcaoli as5

a homeless friend, a certain Fillanue&a, to stay in the premises as some sort of watchman,pending completion of the construction of the house.

*gcaoli after paying the first installment and other fees, ha&ing thereafter refused to ma5e

further payment of other stipulated installments until 9S6S had made the house habitable;

and appellant ha&ing refused to do so, opting instead to cancel the award and demanded the

&acation by *gcaoli of the premises; and the latter ha&ing sued the 9S6S in the Court of

Eirst 6nstance of Manila for specific performance with damages and ha&ing obtained a

fa&orable 7udgment, the cases was appealed by the 9S6S.

$ssue#/hether or not *gcaoli is entitled for specific performance with damages.

,eldB *ppeal of 9S6S must fail.

There was then a perfected contract of sale between the parties; there had been a meeting of

minds upon the purchase by *gcaoli of a determinate house and lot from 9S6S at a definite

price which is payable in amortizations and from that moment the parties acquired the right

to reciprocally demand performance. 6t was, to be sure, the duty of the 9S6S, as seller, to



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deli&er the thing soled in acondition suitable for its en7oyment by the buyer, in other words

to deli&er the house sub7ect of the contract in a reasonably li&able state. This it failed to do.

Since 9S6S failed to fulfill its obligation, and was not willing to put the house in a habitable

state, it cannot in&o5e *gcaoli-s suspension of payment as cause to cancel the contract

between them. 6n recipient obligation, neither party incur in delay of the other does notcomply or is not ready to comply in a proper manner with what is incumbent upon him. 'or

may the 9S6S succeed in 7ustifying its cancellation of the award by the claim tha *gcaoli

had not complied with the condition of occupying the house within three 1) days. The

record shows that *gcaoli did try to fulfill the condition.

Einally appellant ha&ing caused the ambiguity as the e"act prestation of the agreement, the

question of interpretation arising therefrom, should be resol&ed against it.

"rancisco )uttierez %epide vs. A0zetius and A0zetius * Phil. 1*

"acts#The sub7ect of specific performance, with reference to its common law and ci&il law

status, is to be considered on this appeal. The particular action is for the specific

performance of a contract for the sale and purchase of seal estate.

The plaintiff is the owner of a certain parcel of realty, the defendants made a proposition to

the plaintiff for the purchase of this property. The property was to be mortgaged to the

plaintiff to rescue the payment of this balance. The plaintiff proceeded to ha&e sur&ey made

of the land and to prepare the deed and mortgage.


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mentioned merely tend to corroborate what is selfe&ident, namely, the e"istence of a &alid

contract between the parties. 6ndisputably, there has been an offer and an acceptance, and all

that remained to effectuate the contract was the e"ecution of the deed and the mortgage.

Dere we ha&e presented a good and &alid contract, bilateral in character, and free from all

taint of fraud. The stability or commercial transaction requires that the rights of the seller beprotected 7ust as effecti&ely as the right of the buyer. 6f this plaintiff had refused to comply

with the contract, specific performance of the obligation could ha&e been as5ed by the

defendants. >ust as surely should the plaintiff who has li&ed up to his bargain and who has

been put to e"pense to do so, be permitted to coerce the defendant into going through with

the contract.

The e"cuse of the defendants is that they do not now ha&e the money to pay the first

installment. 6n other words, they plead impossibility of performance. The rule of equity

7urisprudence 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 forspecific performance.

>udgment re&ersed.

Porellosa vs. 'and Tenure Adinistration 1 SC%A !5

"acts# The lot in contro&ersy is a part of the Santa Clara


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,eld#The 7udgment under re&iew was affirmed.

The lot on which San >ose-s house stood had not been specified, nor had the boundaries

thereof been mentioned. Significantly, the plaintiff cannot show a contract whereby the

:ural Progress *dmin., has sold or promised to sell them a lot of 2 sq.m. * party claiming

a right granted or created by law must pro&e his claim by competent e&idence. De must relyon the strength of his e&idence and not on the wea5ness of that of his opponent.

Moreo&er the !eed of Sale allegedly e"ecuted by Ficente San >ose in fa&or of Pornellosa is

a mere pri&ate document and does not conclusi&ely establish their right to the parcel of land.

*cts and contracts which ha&e for their sub7ect the creation, transmission, modification or

e"tinguishment of real rights o&er immo&able property must appear in a public document.

Article 116! 41168

Chaves vs. %osales 2 SC%A 5*!

"acts#Cha&ez is an owner of a typewriter and he as5ed 9onzales to fi" his typewriter for

him. Dowe&er, 9onzales was not able to accomplish his obligation of fi"ing the said

typewriter. 6n accordance with this e&ent, Cha&ez as5ed 9onzales to return the typewriter to

him which the latter did wrapped in a pac5age. Dowe&er, Cha&ez disco&ered that there were

missing parts of the typewriter. *fter this incident, Cha&ez as5ed another person to repair

the typewriter for him and this time the typewiter was fi"ed and Cha&ez pad for the repair as

well as for the missing parts of the typewriter.

$ssue#/hether or not Cha&ez can as5 for the payment of the full price of the repair made by

the other person as well payment for the missing parts.

,eld#The court held that under the law Cha&ez in entitled for reimbursement for the full

price of the repair for the typewriter as well as for the missing parts. ?nder the law, in the

obligation to do if the obligor fails to do his obligation; the creditor can as5 for damages plus

the price of the repair which the obligor failed to do.

6n the instant case at bar, the obligor 9onzales failed to do his obligation thus he is required

by law to pay the full price of repair made by another person in the fulfillment of his

supposed obligation plus the price of the missing parts of the typewriter.

Dence, this court order 9onzales to pay the full price of the repair as well as the missing

parts of the typewriter.



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Article 116*

%ose Pacing Co. vs. Court o0 Appeals 16! SC%A *

EactsB This is a petition for re&iew on certiorari of the decision of the Court of *ppeals in

C*9.:. 'o. )# (+#2 promulgated on !ecember #%, #.

4n !ecember #2, #(%2 respondent ban5 Philippine Commercial and 6ndustrial =an5 1PC6=

appro&ed a letter request by petitioner for the reacti&ation of its o&erdraft line of P$,.,

discounting line of P#,. and a letter of credittrust receipt line of P$$,. as

well as an application for loan of P),. on fully secured real estate and chattel

mortgage and on the further condition that respondent PC6= appoint its e"ecuti&e &ice

president :oberto S. =enedicto as its representati&e in petitioner-s board of directors.

4n 'o&ember ), #(%$ the 'ational 6n&estment and !e&elopment 1'6!C, appro&ed a P2.%

million loan application of petitioner with certain conditions. The '6!C released to

petitioner the amount of P #,.. Petitioner purchased fi&e 1$ parcels of land in Pasig,

:izal ma5ing down payment thereon.

*ugust ), #(%% and 4ctober $,, #(%%, respondent PC6= appro&ed additional

accommodations to petitioner consisting of P #,. loan for the payment of the

balance of the purchase price of those lots in Pasig. Dowe&er, PC6= released only P

),. of the P #,. on appro&ed loan for the payment of the Pasig lands and

some P ), . for operating capital.

4n >une 2( #(%, the !e&elopment =an5 of the Philippines appro&ed on application by

petitioner for a loan of P #,+,. and a guarantee for H %$2,%+2. for the purchase ofcan ma5ing equipment. Petitioner ad&ised respondent PC6= of the a&ailability of P

+,. to partially pay off its account and requested the release of the titles to the Pasig

lots for deli&ery to the !=P.

4n >anuary $, #(%+ respondent PC6= filed a complaint against petitioner and :ene Inecht,

its president for the collection of petitioner-s indebtedness to respondent ban5. The PC6=

ga&e petitioner notice that it would cause the real estate mortgage to be foreclosed at an

auction sale.

Petitioner filed a complaint in the Court of Eirst 6nstance of :izal to en7oin respondents

PC6= and the sheriff from the proceeding with the foreclosure sale, and to as5 the lower

court to fi" a new period for the payment of the obligations of petitioner to PC6=. The lower

court issued an order denying the petition. The petitioner filed with respondent Court of

*ppeals a petition for certiorari with application for restraining order and preliminary

in7unction. Dence, the petition is also denied.



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$ssue#/hether or not pri&ate respondent ha&e the right to the e"tra7udicial foreclosure sale

of petitioner-s mortgaged properties before trial on the merits.

,eld#1# The decision of the Court of *ppeals is :

of the foreclosure sale; 12 the lower court is ordered to proceed with the trial on the meritsof the main case together with a determination of e"actly how much are petitioner-s

liabilities in fa&or of respondent ban5 PC6= so that proper measures may be ta5en for their

e&entual liquidation; 1) the preliminary

6n7unction issued by this Court on *pril 2+, #(# remains in force until the merits of the

main case are resol&ed; and 1 the motion of respondent ban5 dated *pril #, #(+#, for lea&e

to lease the real properties in custodia legis is denied.

The loans of petitioner corporation from respondent ban5 were supposed to become due

only at the time that if recei&es from the '6!C and P!CP the proceeds of the appro&edscheme. *s it is, the conditions did not happen.

Eor an obligation to become due there must generally a demand. !efault generally begins

from the moment the creditor demands the performance of the obligation. /ithout such

demand, 7udicial or e"tra7udicial, the effectso0 de0ault 7ill not arise.

ayla v. Silang Tra00ic Co. ! Phil. +55

"acts#Petitioner 1subscriber entered into an agreement with respondent 1seller regarding

the purchase of fifteen 1#$ shares of capital stoc5 by the former from the latter for the sum

of P#, $.. Said agreement has with it certain terms and conditions, among which are

cases where the subscriber shall fail to pay the installments or to perform the conditions or if

said shares shall be attached or le&ied upon by creditors of the subscriber, said shares are to

be automatically re&erted to the seller and the payments already made are to be forfeited in

fa&or of the seller.

4n or before >uly )#, #(), petitioners failed to pay the installment due that day resulting

for the automatic forfeiture of the payments they already made. 4n the other hand, on

*ugust#, #(), the respondent corporation issued a resolution was authorizing the refund of

the installments already paid by their subscribers. Said resolution was issued by respondent

for the purpose of terminating the pending ci&il case in&ol&ing the &alidity of the shares in

question which was subsequently dismissed. =ased on the said resolution, the petitioners

instituted an action for the reco&ery of the sum of money which they ha&e paid se&erally to

the corporation. The corporation set up a defense stating that said resolution was no longer

applicable to the petitioners since their shares was already re&erted in fa&or of the seller due



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to their failure to pay on the due date long before the resolution was issued. Moreo&er,

another resolution was issued by the corporation on *ugust 22, 2() re&o5ing and

cancelling the earlier resolution. The trial court issued an order against the petitioners; and

on appeal, the C* affirmed the decision of the trial court with some modifications as to the

cancellation of the petitioner-s subscription which was re&ersed by said appellate court.

Dence, an appeal by both parties for certiorari.

$ssues##. /4' the said contract is a subscription or a sale of stoc5

2. /4' under the contract between the parties the failure of the purchaser to pay

any of the quarterly installments on the purchase price automatically gi&e rise to the

forfeitures of the amount already paid and the re&ersions of the shares to the corporation.

). /4' the resolution of *ugust #, #() is &alid.

,eldB >udgment against the defendant.

/hether a particular contract is a subscription or a sale of stoc5 is a matter of construction

and depends upon its terms and the intention of the parties. 6t should be noted that the

agreement entered into by the parties in this case is entitled J*greement for 6nstallment

Sales of Shares in the Silang Traffic Company, 6nc.K 6t also appears that in the ci&il case

which was earlier dismissed, the CE6 mentioned the right of the corporation to sell the shares

of stoc5 to the person named in the resolution, including the petitioner, was impugned by the

petitioners in the said case, who claimed a preferred right to buy said shares. This shows that

said contract is simply a contract of purchase and sale. * purchase is an independent

agreement between indi&idual and the corporation to buy shares of stoc5 from it at a

stipulated price; different from that of a subscription which is a mutual agreement of the

subscribers to ta5e and pay for the stoc5 of the corporation.

/ith regards to the second issue, the pro&ision regarding interest on deferred payments

would not ha&e been inserted if it had been the intention of the parties to pro&ide for

automatic forfeiture and cancellation of the contract. Moreo&er, the contract did not

specifically pro&ide that the failure of the purchaser to pay any installments would gi&e rise

to forfeiture and cancellation without the necessity of any demand from the seller. ?nder

article ## of the Ci&il Code 1'ow art. ##%( of the 'CC persons obliged to deli&er or do

something are not in default until the moment the creditor demands of them, 7udicially or

e"tra7udicially, the fulfillment of their obligation, unless the law e"pressly pro&ides that

demand is no longer necessary in order that default may arise, or if the time of deli&ery or

ser&ice is a controlling moti&e for the establishment of contract.

*s to the third issue, the resolution which was made for the good of the corporation and for

the termination of the ci&il case benefited other petitioners. 6t would be an un7ust

discrimination to deny the same benefit to the herein petitioners.



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Article 11!

Arrieta3 et al. vs. (ational %ice and Corn Corp. 1 SC%A !*

"acts#This is a appeal of the defendantappellant '*:6C from the decision of the trial

court, awarding to the plaintiffsappellees the amount of H2+%,. as damages for breachof contract and dismissing the counterclaim and third party complaint of the defendant

appellant '*:6C.

4n May #(,#($2, plaintiffappellee participated in the public bidding called by the '*:6C

for the supply of 2, metric tons of =urmese rice. *s her bid of H2). per metric ton

was the lowest, she was awarded for the contract. Plaintiffappellee Paz P. *rrieta and the

appellant corporation entered into a contract of sale of rice, under the terms of which the

former obligated herself to deli&er the latter 2, metric tons of =urmese :ice at H2).

per metric ton, C6E Manila. 6n turn, the defendant corporation committed itself to pay for the

imported rice Jby means of an irre&ocable, confirmed and assignable letter of credit in ?.S.currency in fa&or of the plaintiffappellee and Lor supplier in =urma, immediately.K

!espite the commitments to pay immediately, it was only on >uly ),#($2, or afull month

from the e"ecution of the contract, that the defendant Corp. too5 the first step to open a letter

of credit.

4n *ugust , #($2, the ban5 informed the appellant corporation that its application, Jfor a

letter of credit has been appro&ed with the condition that $ marginal cash deposit be paid

and that drafts are to be paid upon presentment.K Eurthermore, the =an5 represent that it

Jwill hold your application in abeyance pending compliance with the abo&e stated

requirement.K

6t turned out that the appellant corporation was not in any financial position to meet the

condition, '*:6C bluntly confessed to the appellee.

Consequently, the credit instrument applied for was opened only on September +, #($2. *s a

result of the delay, the allocation of the appellees supplier in :angoon was cancelled.

$ssue#/hether or not the appellant failure to open immediately the letter of credit in dispute

amounted to a breach of the contract of >uly #, #($2 for which it may be held liable in

damages.

%uling#it is clear upon the records that the sale and principal reason for the cancellation of

the allocation contracted by the appellee herein in :angoon, =urma, was the the failure of

the letter of credit to be opened with the contemplated period. This failure must, therefore,

be ta5en as the immediate cause for the consequent damage which resulted.



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Secondly, from the correspondence and communications which form part of the record of

this case, it is clear that what singularly delayed the opening of the stipulated letter of credit

and which, in turn, caused the cancellation of the allocation in =urma, was the inability of

the appellant corporation to meet the condition imposed by the =an5 for granting the same.

The liability of the appellant, howe&er stems not alone from the failure or inability to satisfythe requirements of the ban5. 6ts culpability arises from its willful and deliberate assumption

of contractual obligations e&en as it was well aware of its financial incapacity to underta5e

the presentation.

?nder the pro&ision of *rticle ## of the Ci&il Code, not only debtors guilty of fraud,

negligence or defaults in the performance of obligations are decreed liable; in general, e&ery

debtor who fails in the performance of his obligations is bound to indemnify for the losses

and damages caused.

The decision appealed from is hereby affirmed.

Meralco vs. Court o0 Appeals 15! SC%A 2+

"acts#To reco&er the damages due to embarrassment, humiliation, hurt pride, and wounded

feelings inflicted by the petitionerappellant during the disconnection of the respondent-s

electrical ser&ice; the latter filed a complaint at Court of Eirst 6nstance of Manila. The court

ordered the petitioner to rendered #, pesos to the respondents as payment for damages.

Dence, petitioner filed a petitioned in the Court of *ppeals, but the court denied the petition.

Erom the facts adopted by the Court of *ppeals, it was found that the respondents are clientsof the petitioner. The respondents stated that the petitioner did not pro&ide any notice before

the disconnection, that it must be compulsory to the plaintiff to issue disconnection notice.

The petitioner disputed the respondents- statement stating that it has the right to disconnect

the electric ser&ice of the delinquent customer, for they formerly stated that the respondents

failed to pay the bill in a gi&en time.

$ssue#/hether or not Court of *ppeals committed gra&e abuse of discretion in affirming

the Trial Court-s decision.

,eld#There is no abuse of discretion in the part of the respondent court in affirming the

assailed decision of the CE6 Manila. The right to disconnect the electric ser&ice of a

delinquent customer shall be accompanied by a gi&en notice + hours in ad&ances as

pro&ided for in Section ( of the :e&ised 4rder 'o. # of the Public Ser&ice Commission. 6n

accordance with the pre&ious rulings, failure to gi&e such prior notice amounts to a tort. *nd

since, petitioner M


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prior to disconnection which is protected by law, petitioner is liable for damages according

to *rticle ## of the ci&il code, therefore, the respondents are entitled to claim damages.

*rticle ## states that, JThose who in the performance of their obligations are guilty of

fraud, negligence, or delay, and those who in any manner contra&ene the tenor thereof, are

liable for damages.K

Article 11!+

&niversity o0 Santo Thoas vs. escals 8 Phil. 26!

"acts# * house in 6ntramuros, was sub7ected, e"clusi&e of the land on which it as erected, to

a censo in fa&or of the ?ni&ersity of Santo Thomas. The censo was created in a public

document, duly registered, wherein the &alue of the capital was e"pressly stipulated, and the

pension to paid on account thereof was fi"ed.

4ne Sal&ador Earre bought the house and the land on which it stood, apparently in ignorance

of the censo to which the house was sub7ected and refused to recognize the rights of the

?ni&ersity in the premises. The ?ni&ersity instituted an action, wherein, upon appeal to this

court, the right of the ?ni&ersity in and to the censo was maintained, and 7udgment was

entered against Earer for the amount of the payments due thereunder.

$ssue# /hether or not the deterioration and decay in the materials of which a building is

constructed, incident to the lapse of time, are causes embraced within the terms Jforce

ma7eure or by a fortuitous e&entK.

,eld# The deterioration and decay in the materials of which a building is constructed,

incident to the lapse of time, are causes embraced within the term Jforce ma7eure or

fortuitous e&entK as those terms are used in article #%2$ of the code, and in support of our

ruling it will be sufficient to insert here some e"tracts from the commentaries upon this

article of the code by the learned Spanish author Manresa.

J=y the words force ma7eure or fortuitous e&ent used in the first paragraph of article #%2$,

as already stated, the law alludes to e&ery cause independent of the will of the annuitant, of

e&ery fault on his part. There is nothing else to do but to so admit, not only because the code

opposes to the annuitant no other defense e"cept fortuitous e&ent and fault, without ma5ingother distinctions, but also because in reality e&ery cause foreign, if that term maybe used, to

the annuitant, 7uridically and reasonably demands the same solution, and because all these

causes can be reduced to a fortuitous e&ent, or to force ma7eure.

/e conclude that the 7udgment entered in the court below should be affirmed, with the costs

of this instance against the appellant. So ordered.



16/128

Paci0ic 9egetale /il Corporation vs Angel Singzon ).%. '4!*1!

"acts#*ppeal from the decision of the CE6 of 0eyte dismissing the case holding that the

plaintiff, a foreign corporation, had no personality to institute the present case e&en if it

afterwards obtained a license to transact business because this belated act did not ha&e the

effect of curing the defect e"isted when the case was instituted.

$ssue#/hether or not the CE6 of 0eyte committed a gra&e abuse of discretion in dismissing

the case.

,eld#@es. The 7udgment of the CE6 is re&ersed and a new one will be entered ordering the

appellee to pay the appellant the sum of P#$,%. plus interest from the filing of the

complaint, and the costs.

Article 11!6

,ill vs. 9eloso 1 Phil. 16

"acts#6t is belie&ed that defendant Ma"ima Ch. Feloso is indebted to !amasa :icablanca,

her sisterinlaw and widow of Potenciano Ch. Feloso, with the amount of P+, . 6t is also

belie&ed that !omingo Eranco, defendant-s soninlaw and minor child of :icablanca, had

the latter sign a blan5 document for the purpose of compelling her to e"ecute a document

regarding the ac5nowledgment of the abo&ementioned debt in his behalf. The guardian of

Eranco, named 0e&ering, according to the latter, is the one who compelled the defendant to

sign the said document on Eranco-s behalf. 0ater on, the document that was signed by the

defendant turned out to be a document containing a different tenor which states that the

defendant had e"ecuted the said document for &alue of the goods that they recei&ed in 0a

Cooperati&e Eilipina which they 1the defendant and her husband are bound to pay 7ointly

and se&erally to Michael and Co., for the sum of P%, )#(.)). 0e&ering, as the guardian of the

minor children of !amasa :icablanca, commenced proceedings against the defendant for

the reco&ery of the sum of P+, . The defendant, in turn, pray for the annulment of the

contract with Michael and Co. on the grounds of deceit and error committed by her sonin

law Eranco who was then a deceased.

$ssue# /hether or not the alleged deceit caused by Eranco may be a ground for the

annulment of the contract.

%uling#The 7udgment is against defendant.

The deceit, in order that it may annul the consent, must be that which the law defines as a

cause. *ccording to *rticle #2%( of the Ci&il Code 1now *rticle #))+ of the 'ew Ci&il

Code, Jthere is deceit, when by words or insidious machinations on the part of one of the



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contracting parties, the other is induced to e"ecute a contract which without them he would

not ha&e made.K !omingo Eranco is not one of the contracting parties who may ha&e

deceitfully induced the other contracting party, Michael and Co., to e"ecute the contract.

The one and the other contracting parties, to whom the law refers, are the acti&e and the

passi&e sub7ects of the obligation, the party of the first part and the party of the second part

who e"ecute the contract. The acti&e sub7ect and the party of the first part of the promissory

note in question is Michael and Co., and the passi&e sub7ect and the party of the second part

are Ma"ima Ch. Feloso and !omingo Eranco; two, or they be more, who are one single

sub7ect, one single party. !omingo Eranco is not one contracting party with regard to

Ma"ima Ch. Feloso as the other contracting party. They both are but one single contracting

party in contractual relation with, Michael and Co. !omingo Eranco, li5e any other person

who might ha&e been able to induce Ma"ima Ch. Feloso to act in the manner she is said to

ha&e done, under the influence of deceit, would be for this purpose, but a third person. There

would then be not deceit on the part of the one of the contracting parties e"ercised upon the

other contracting party, but deceit practiced by a third person.

Article 11!8

Azzaraga vs. %odriguez * Phil. 6!

"acts#!ecember )#, #+(+, the defendant :odriguez e"ecuted in fa&or of :egino :amirez a

document whereby he bound himself to pay the latter on the #$th of May, #+((, the a sum

of money, which Eray 0esmes Perez owed the said :amirez, who, in payment of a debt to

the plaintiff. *zarraga, indorsed assigned to the latter the said document from the defendant,:odriguez, for the abo&estated sum, for account of his indebtedness.

$ssue# /hether the transfer of rights was &alid.

,eld#The court held that the assignment or transfer of the credit in question, made by

:amirez, the creditor is &alid, and notwithstanding the fact that the cause or consideration of

the transfer is not stated in the indorsement, it must be presumed that one e"ists and that it is

a lawful one, unless file debtor should pro&e the contrary which he has not done in this case.

Article 11!*

"loriano vs elgado 1 Phil 15+

"acts# 4n >anuary 2, #(,


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the amount has not been paid, for which reason the plaintiff as5ed the court to enter

7udgment against defendants on #th Eebruary #(. The Court sentenced the defendants to

pay the sum plus interest, with costs. The defendants appeared but did not answer the

complaint. 4n the 22nd of March #(, the defendants held to be in default and entered

7udgment ordering the defendants to pay the amount plus interests with costs. 4n (th of

*pril, defendant !elgado, alone and on behalf of his wife, appealed said 7udgment as5ing

the court simply to e"empt themsel&es from said 7udgment, hence this certiorari.

$ssue# /hether or not the 7udgment appealed from is in accordance with the law.

,eld# @es.

#. *s to the nature and character of the obligationB /hen an obligation is pure, simple and

unconditional and no particular day had been fi"ed for its fulfillment of the same may be

demanded ten days after it is contracted. The plaintiff filed his complaint 2 days after the

obligation was e"ecuted. The payment had been demandable, and the debtors ha&e no rightto as5 for further e"tension. The document of indebtedness is pure, simple and

unconditional; there e"ists no reason that would e"empt the debtors from compliance.

2. *ccording to the mutual character of the obligationB Sentencing the debtors to pay their

obligation 7ointly is in accordance with *rticle ##) and ##)+ of the Ci&il Code.

). There-s no error charging only the husband in default. The plaintiff only made an error

in his writing. Complaint was filed against both of them, and they were both summoned.

The husband is the natural representati&e of his wife; therefore they are both in default.

>udgment affirmed.

Testate :state o0 Mota vs. Serra +! Phil. +6+

"acts# 4n Eebruary #, #(#(, Testate


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of PalLLma and San 6sidro be dissol&ed. Dacienda Palma became the property of /hita5er

and Concepcion, howe&er they failed to pay the defendant the unpaid balance. Serra

foreclosed. Since the defendant failed to pay onehalf of the amount e"pended by the

plaintiffs upon the construction of railroad line that is P ##),%.% as well as the balance of

the &endees, the plaintiffs instituted this action. The lower court fa&ored the defendant and

held that there was a no&ation. Plaintiffs ha&e appealed from this 7udgment.

$ssue# /hether or not there was a no&ation of the contract by the substitution of the debtor

with the consent of the creditor3

,eld# There was nothing to show the e"press consent, the manifest and deliberate intention

of the plaintiffs to e"empt the defendant from his obligations. The plaintiffs were not a

party to the transfer of the defendant of his Dacienda to /hita5er and Concepcion. There is

no record that would show any stipulation that the obligation of the defendant was no&ated

with the consent of the creditor.

The intention of the parties must clearly result from the terms of the agreement on by a full

discharge of the original debt. 'o&ation by substitution of a new debtor can ta5e place

without the consent of the debtor, but the delegation does not operate a no&ation unless the

creditor has e"pressly declared that he intends to discharge with delegating debtor and the

delegating debtor was not in open failure or insol&ency at the time. The mere indication by

a debtor of a person who is to pay in his place does not operate a no&ation.

Thus, the 7udgment appealed from is re&ersed and defendant is hereby sentenced to pay the

plaintiff P ##),%.% with interest.

Article 118

Patente vs /ega ).%. '4++

"acts# 4n May , #(, :oman 4mega sold his agricultural land to Salud Patente, under a

pacto de retro sale. 4n 2th of *ugust #((, :oman 4mega e"ecuted a promissory note,

promising to pay his indebtedness amounting to #,% pesos , to her, her heirs, assigns and

successors as soon as possible or as soon as he has the money. That, he will pay the whole

amount before he e"ercises his right of repurchase of his agricultural land.

4n the promissory note, no definite term is fi"ed and that its performance is left to the will

of the debtor.

$ssue# /hether of not the court has 7urisdiction to ta5e cognizance of the case and to fi" a

definite term for the payment of the indebtedness.



20/128

,eld# @es. Promissory notes are go&erned by *rticle ##2+ of the Ci&il Code, because

under the terms thereof the plaintiff intended to grant the defendant a period within which to

pay his debts. *s the promissory notes do not fi" this period, it is for the court to fi" the

same.

Article 1181

)eorge '. Pars vs. Province o0 Tarlac +* Phil. 1+2

"actsB 4n 4ctober #+, #(#, Conception Cirer and >ames Dill, the owners of parcel of land

'o. 2 referred to in the complaint, donated it perpetually to the Municipality of Tarlac,

sub7ect to the condition that it will be absolutely and e"clusi&ely for the erection of a central

school and the other for a public par5, the wor5 to commence in both cases within the period

of si" months from the date of the ratification by the parties of the document e&idencing the

donation. The donation was accepted by Mr. Santiago de >esus in the same document on

behalf of the municipal council of Tarlac of which he was the municipal president and

subsequently transferred the title to this property to the Pro&ince of Tarlac.

4n >anuary #$, #(2#, Conception Cirer and >ames Dill sold this parcel of land to herein

plaintiff 9eorge 0. Par5s. The plaintiff alleging that the condition of the donation had not

been complied with and in&o5ing the sale of this parcel of land made by Corception Cirer

and >ames Dill in his fa&or, brought this action against the Pro&ince of Tarlac, the

Municipality of Tarlac, Corception Cirer and >ames Dill and prayed that he be declared the

absolute owner entitled to the possession of this parcel of land.

The 0ower Court dismissed the complaint.

$ssueB/hether or not the plaintiff, 9eorge 0. Par5s, has a right of action to reco&er the

parcel of land from the Pro&ince of Tarlac on the ground that the condition imposed is a

suspensi&e or condition precedent and therefore, the said municipality had ne&er acquired a

right thereto since the condition was ne&er performed.

,eld#The Supreme Court ruled that the contention of the appellant that a condition

precedent ha&ing been imposed in the donation and the same not ha&ing been complied

with, the donation ne&er became effecti&e is without merit and erroneous. The characteristic

of a condition precedent is that the acquisition of the right is not effected while said

condition is not complied with or is not deemed complied with. Meanwhile, nothing is

acquired and there is only an e"pectancy of right. Consequently, when a condition is

imposed, the compliance of which cannot be effected e"cept when the right is deemed

acquired, such a condition cannot be a condition precedent but a condition subsequent or

resolutory condition.



21/128

(atividad vs. )aino 6 Phil. 66

"acts#The testator Sal&ador y :eyes contracted a &alid and legal marriage with *nselma

'icasio, who died in #+%+, lea&ing a daughter named Diginia who married Clemente

'ati&idad. Diginia Sal&ador died in #(#), sur&i&ed by two children


22/128

6n the si"th clause of the will e"ecuted by the decedent Tiburcio Sal&ador y :eyes, he

bequeathed to =asilia 9abino the ownership and dominion of the property therein specified

as to its location and other circumstances, on condition that if the legatee should die 0orenzo

Sal&ador would be obliged, upon the payment of P, by the testatorAs grandson and heir


23/128

twentyse&en days of *ugust, when they were released by the quartermaster, and the

plaintiff immediately notified by the defendants that they were at his disposal.

Plaintiff claims that defendants made use of these lorchas, under the terms of the abo&e set

out contract of *pril 2, as amended by the contract of *pril 2(, and therefore that

defendants are responsible to him for hire of the lorchas for e&ery day of the month at theper diem emergency rate paid by the quartermaster on the days when the boat was in use.

$ssue#/hether or not defendants should pay those days of the month during which they did

not ma5e use of lorchas and left them at the disposal of the plaintiff.

,eld# /e do not thin5 that the plaintiff, on whom rests the burden of proof, succeeded in

establishing this contention.

The amendment to the contract between the plaintiff and defendant was e"pressly

conditioned on defendantsA being the successful bidders at the letting of May 2, #($, and it

cannot be doubted that the amendment became of no force or effect when the result of the

letting was announced, for it is manifest that thereafter neither party could base a claim

against the other on a failure to e"ecute its terms, unless it was gi&en new life by a new

agreement, either e"press or implied.

6n conditional obligations, the acquisition of rights, as well as the e"tinction or loss of those

already acquired, shall depend upon the e&ent constituting the condition. 1*rt. ### of the

Ci&il Code.

6t is said, howe&er, that e&en though the obligation of the conditional amendment was

e"tinguished by defendantsA failure to secure the entire lighterage contract or to secure it atthe time specified in the condition, ne&ertheless the defendants, by ta5ing and using these

lorchas for the purpose of carrying out their contract with the quartermaster without any new

agreement the obligation with the plaintiffs, impliedly and tacitly assumed the obligation of

the original contract together with the amendment, so that their use of the lorcha was sub7ect

to its terms. /e do not thin5 we are entitled to draw such an inference from the use of these

boats in the months of >uly and *ugust.

The 7udgment of the trial court should be and is hereby re&ersed, without special

condemnation of costs in this instance, and after the e"piration of twenty days the cause will

be returned to the trial court wherein it originated.



24/128

Article 1182

/sena v %aa 1+ Phil. **

"acts# 4n the #$th of 'o&ember #+(, Cenona :ama e"ecuted a contract to Fictoriano

4smena, which states that she owes 4smena the sum of 2 pesos, which she will pay insugar plus interest. *s a guarantee, :ama pledged as a security all her present and future

property and as a special security her house in which she li&es.

4' the 2ht of 4ctober #+(#, another contract was e"ecuted , for further loan amounting to

pesos, wherein she loaned $ pesos to Penares, lea&ing her only 2 pesos.

4smena died sometime after the e"ecution and deli&ery of the said contract. *fter the

settlement and di&ision of his estate, the said contract became the property of *gustina

:afols, his heir. 4n the #$th of March #(2, the plaintiff presented the contracts to

defendant for payment and she ac5nowledged her responsibility, thus, e"ecuting another

contract promising the plaintiff to pay, if her house is sold.

4n the 2%th of >une, #(%, the defendant failed to pay her obligations, the plaintiff filed a

complaint in court. The defendant answered by filing a general denial and setting up the

special defense of prescription. *fter the hearing of e&idence, the court rendered its

7udgment in fa&or of the plaintiff. 4rdering the defendant to pay 2 pesos plus interests

and 2 pesos plus interests on both at the rate of #+ Q per annum.

The defendant appealed.

$ssue# /hether of not the lower court erred in its 7udgment, as the appellant alleges, there-s

insufficiency of e&idences to support its findings.

,eld# 'o. 6n the ac5nowledgment of the indebtedness made by the defendant, she imposed

the condition that she would pay the obligation if she sold her home. 6f the statement found

in her ac5nowledgment of the indebtedness should be regarded as a condition, it was a

condition which depended upon her e"clusi&e will and is therefore &oid. The

ac5nowledgment therefore was an absolute ac5nowledgment of the obligation and was

sufficient to pre&ent the statute of limitation from barring the action upon the original

contract.

Trillana vs ;uezon College ).%. '452+5

"acts#!amasa Crisostomo subscribed 2 shares of capital stoc5 with a par &alue of P#

each through a letter sent to the =oard of Trustees of the uezon College, enclosed with the

letter are a sum of money as her initial payment and her assurance of full payment after she

har&ested fish. 4n 4ctober 2%, #(+, !amasa Crisostomo passed away. *s no payment



25/128

appears to ha&e been made on the subscription mentioned in the foregoing letter, the uezon

College, 6nc. presented a claim before the CE6 of =ulacan in her testate proceeding, for the

collection of the sum of P2,, representing the &alue of the subscription to the capital

stoc5 of the uezon College, 6nc. which was then opposed by the administrator of the estate.

$ssue#/hether or not the condition entered into by both parties are &alid.

,eld#'o, ?nder article ###$ of the old Ci&il Code which pro&ides as followsB 86f the

fulfillment of the condition should depend upon the e"clusi&e will of the debtor, the

conditional obligation shall be &oid.K

Article 118

'uneta v Aad 6! Phil.26

"acts# The plaintiff sought to reco&er a sum of money plus interest and attorney-s fees for

balance due on four promissory notes e"ecuted by the dependant. The complaint sued for a

writ of attachment which was issued, !efendant petitioned that the attachment be lifted and

to that effect a counterbond was tendered by the terms of which the sureties J7ointly and

se&erally bind themsel&es to answer for the defendants liability under the condition thatB a

in case the plaintiff reco&ered 7udgment the defendant will on demand redeli&er the attached

properties to be applied to the payment of the 7udgment, or b in default thereof that the

defendant and sureties will on demand pay the plaintiff the full &alue of the released

property. The lower court granted this petition and issued an order for the dissolution of the

writ. Thereafter, dependant died, his attorney mo&ed for the dismissal of the case. The trialcourt acceded to this motion and the plaintiff-s motion for reconsideration ha&ing been

denied. The instant appeal was ta5en.

$ssues##. /hether or not the plaintiff has a cause of action

2. /hether of not *bad-s sureties are still bound.

,eld# #. 'o more cause of action and the case was rightly dismissed in accordance with

Section ##( of *ct 'o. #(, the action being for money and pending when the defendant

died. *nd the pro&ision of Section of *ct 'o. #( which readsB J all actions

commenced against the deceased person, for the reco&ery of money, debt or damages andpending at the time the committee are appointed, shall be discontinued and the property be

discharged from the attachment.

2. 'o. =ecause the condition has became a legal impossibility because the plaintiff can

ne&er win the case ha&ing been dismissed.



26/128

Article 118!

,erosa vs. 'ongara ).%. '4526!

"acts#This is an appeal by way of certiorari against a decision of the Court of *ppeals,

appro&ing certain claims presented by r. from #($ to ##(,

after the death of the intestate, which occurred in !ecember #(. The claimant presented

e&idence and the Court of *ppeals found, that the intestate had as5ed for the said credit

ad&ances for himself and for the members of his family Jon condition that their payment

should be made by Eernando Dermosa, Sr. as soon as he recei&es funds deri&ed from the

sale of his property in Spain J. Claimant had testified without opposition that the credit

ad&ances were to be Jpayable as soon as Eernando Dermosa. Sr.-s property in Spain was

sold and he recei&ed money deri&ed from the saleK.

The Court of *ppeals held that payment of the ad&ances did not become due until

administrati" recei&ed the sum of P 2,. from the buyer of the property.

$ssue#/hether or not the obligation contracted by the intestate was sub7ect to a condition

e"clusi&ely dependent upon the will of the debtor 1a condicion potestati&a and therefore

null and &oid.

,eld#The 7udgment appealed from is hereby affirmed in so far as it appro&es the claims of

appellee in the amounts of P 2,)# and P #2,(2.#2, and re&ersed as to that P ),2..

The condition upon which payment of the sums ad&anced was made to depend. Jas soon as

he 1intestate recei&e funds deri&ed from the sale of his property in Spain,K discloses the fact

that the condition in question does not depend e"clusi&ely upon the will of the debtor, but

also upon their circumstances beyond his power or control.

The condition is suspensi&e condition, upon the happening of which the obligation to pay is

made dependent and upon the happening of the condition, the debt became immediately due

and demandable only when the house was sold and the proceeds recei&ed in the islands, the

action to reco&er the same only accrued, within the meaning of the statute of limitations, on

date the money became a&ailable here hence the action to reco&er the ad&ances has not yetprescribed.



27/128

:nri


28/128

annotation of the lien of the mortgage on the =ulacan property as soon as the &endors

proceeded with the construction of the roads on the purchased lots.

'ow returning to the case at bar, the plaintiffsappellants charged on May , #(%) before the

Court of Eirst 6nstance of :izal 1uezon City that the defendantappellee has not yet paid

the sum of P2, despite the fact that the roads on the questioned lots were completed onMay (, #(%; that the mortgage on the =ulacan property has not yet been registered; and that

the realty ta"es corresponding to the years #($( to #(%) on the mortgaged lots had not been

paid.

The defendantappellee contended that e&en if the roads in question ha&e already been

constructed in accordance with the mentioned ordinance, still her obligation to pay the sum

of P2, has not yet arisen as no pre&ious notice and demand for payment has been made

on her.

$ssue#/hether or not the lac5 of pre&ious notice and demand for payment will not gi&e risethe defendantappelleeAs obligation of paying the sum of P 2,.

,eld#The court held that as to the alleged lac5 of pre&ious notice completion and demand

for payment, the filing of the case below is sufficient notice to the defendantappellee of the

completion of the roads in question and of the plaintiffsappelleeAs desire to be paid the

purchase price of the questioned lots. The effect of such demand retroacts to the day of the

constitution of the defendantappelleeAs obligation. Thus, *rticle ##+ pro&ides the 8The

effects of a conditional obligation to gi&e, once the condition has been fulfilled, shall

retroact to the day of the constitution obligation...8 The contacted obligation of the

defendantappellee under the facts of the case at bar was to pay the balance of P2,within two years from the date the roads in question are completed.

*ccordingly the order of the court a quo dated !ecember ), #(%) is set aside, and 7udgment

is hereby rendered ordering the defendant appellee to pay to the plaintiffsappellants, within

ninety 1( days from the finality of this decision, the following B

#. The sum of P2, representing the unpaid balance of her contractual obligation;

2. 6nterest thereon, as stipulated in the deed of sale with mortgage, at the rate of % per

annum from May (, #(% up to May (, #(%#, and, thereafter, #2 interest per annum until

the principal amount shall ha&e been fully paid;

). *n amount equi&alent to $ of the mortgage indebtedness of attorneyAs fees; and

. The costs.

Should the defendantappellee fail to pay the aforementioned mortgage indebtedness within

the period granted in this decision, and the properties mortgaged shall be sold at public



29/128

auction and the proceeds thereof shall be applied to the satisfaction of this 7udgement and

the costs of the auction sale. Costs against the defendantappellee.

Article 1188 = 11*1

orroeo vs. "ranco 5 Phil. +*

"acts# *n agreement to sell a property owned by defendantsappellees, namely frame

houses with nipa roofs built upon lots, to plaintiffappellant with the corresponding set of

conditions wherein each party is set to fulfill. 4ne of the conditions as pro&ided for in the

agreement is that plaintiff be gi&en si" months from the date of the e"ecution of the

instrument to complete the documents for said property. Dowe&er, plaintiff failed to comply

with the condition, hence, with liberty defendants disposed the property as they may deemed

fit. Plaintiff instituted a complaint in the Court of Eirst 6nstance praying that 7udgment be

rendered in his fa&or and against the defendants. !efendants in their answer stated that the

plaintiff has failed to comply with the conditions under which the promise to sell the

property to him was made.

$ssue#/hether or not plaintiff has the right to compel the defendants to carry out their

agreement to sell notwithstanding his failure to comply with the condition in the agreement.

,eld#@es, plaintiff has the right to do so. The agreement on the part of plaintiff as set out in

clause 1c, to complete the title papers to the said property within the si" months, is not a

condition subsequent of the obligation to sell. 6t is only a mere incidental stipulation which

the parties saw fit to include in the agreement. =eing not contrary to law, public morals, orpublic policy, unable to complete the title papers of the said property does not pre&ent

performance of sale. The stipulation is incidental and not inherent to the agreement or

promise to sell.

*lso, The contract in question contains mutual obligations and is considered bilateral in

nature.

6n this regard, the obligation to buy the property in question is correlati&e with the obligation

to sell it. Plaintiff to perfect the papers to the property within si" 1% months is not

correlati&e to obligation to sell the property. Dence the stipulation in the agreement does not

create reciprocal rights and therefore, defendants do not ha&e the right to cancel the

obligation. *s state in the case, one obligation is entirely independent of the other. The latter

obligation is not subordinate to nor does it depend upon the fulfillment of the obligation to

perfect the title deeds to the property.



30/128

Dence, the 7udgment of the lower court is :

pro&ided for in the agreement.

Cortez vs. iano and erao +1 Phil. 2*8

"acts# Petioner *nacleta Cortez acquired an hacienda from her deceased husband and

applies for the registration of the hacienda in her name. se&eral oppositors appeared among

them were respondents =ibano and =eramo. The court rendered 7udgment decreeing the

registration of the hacienda in the name of the petitioner and o&erruled the opposition of the

respondents.

6n the beginning this hacienda did not ha&e the area the registration of which is now as5ed,

but, it grew in e"tent due to the acquisition, by its original owners of the ad7acent parcel,

among which are those claimed by the oppositors herein respondents.

/ith respect to the parcel claimed by =ibano, it appears from the e&idence that :odriguez

and :amirez purchased this parcel from =ibano for P$. *lthough in this document it is

stated that =ibano recei&ed the price, the ne"t day :amirez signed another document, in

which he stated that by agreement of the parties the price was not deli&ered to =ibano, but

was paid to him when he needed it which was denied by =ibano and declared that what

happened was that the day after the sale of his lands, he demanded the payment of the price,

but instead of paying him, they gi&e him a document. *nd the truth is that the purchase price

has not yet been paid to the &endor.

,eld# *lthough the contract was perfect and produced the effect of transmitting to the

purchaser the ownership of the land sold, this ownership, howe&er was still dependent upon

the payment of the price. *s the obligation in a contract of purchase and sale is reciprocal,

any of the contracting parties may, upon nonfulfillment by the other party of his part of the

obligation, resol&e the contract 1*rt. ##2, Ci&il Code. The agreed price not ha&ing as yet

been paid to the &endor, the effect of the sale was still sub7ect by e"press pro&ision of law,

to this resolutory condition.

Dence, the ownership acquired by the purchasers is still limited by the right of =ibano to as5

for the resolution of the sale. *nd this limitation upon the right of the petitioner is a chargesusceptible of registration. The registration of this parcel in the name of the applicant is

proper, but sub7ect to this charge. >udgment modified.



31/128

Angeles vs. Calasanz 15 SC%A 2

"actsB !efendantsappellants ?rsula Torres Calansanz and Tomas Calansanz and plaintiff

appelles =uena&entura *ngeles and Teofila >uani entered into a contract to sell a piece of

land located in Cainta, :izal for the amount of P),(2. plus interest per annum. The

latter paid the down payment of P)(2. upon the e"ecution of the contract. They promisedto pay the balance in monthly installments of P#.2 until fully paid, the installments being

due and payable on the #(th day of each month. The payment already amounted to P,

$)).)+. !efendantsappellants cancelled the said contract for failure of subsequent

payments.

$ssue#/hether or not the contract to sell has been automatically and &alidly cancelled by

the defendantsappellants.

,eld#The contract entered into by the parties has some characteristics of a contract of

adhesion. Dence, it must be construed against the party causing it.

Since the principal obligation under the contract is on P),(2. and the plaintiffsappellees

ha&e already paid an aggregate amount of P,$)).)+, the court should only order the

payment of the few remaining installments but not uphold the cancellation of the contract.

Article 11*2

Central an vs. CA 1* SC%A +6

"acts# 6sland Sa&ings =an5 upon fa&orable recommendation of its legal departmentappro&ed the loan application for P+,. of Sulpicio Tolentino, who as a security loan

e"ecuted on the same day a real estate mortgage o&er his # hectare land. The appro&ed

loan application called for a lump sum P+,. loan repayable in semiannual

installments for a period of ) years with #2 interest. * mere P#,. was made by the

=an5. Tolentino and his wife


32/128

,eld#@es, 6sland Sa&ings =an5 was in default in not fulfilling the reciprocal obligation

under the loan agreement. Tolentino under *rticle ##(# of the Ci&il Code may choose

between specific performance or recission with damages in either case. =ut since 6sland

Sa&ings =an5 is now prohibited from doing further business by Monetary =oard :esolution,

it cannot be granted said specific performance in fa&or of Tolentino. :escission is the only

alternati&e left. The rescission is only for the balance of %),. balance of +,.

loan. The promissory note ga&e rise to Tolentino-s reciprocal obligation to pay #,..

Dis failure to pay o&erdue amortization under the promissory note made him a party in

default. Meanwhile, *rt.##(2 of the Ci&il Code pro&ides that in case both parties ha&e

committed a breach in their reciprocal obligation the liability of the first infraction shall be

equitable tempered by the court. Thus, the liability of 6sland Sa&ings =an5 for damages is

offset by the liability of Tolentino in the form of penalties and sub charges for not paying his

debts.

Article 11*

Sith3 ell > Co. vs. Sotelo Matii ++ Phil. 8!+

"acts#6n *ugust, #(#+, the plaintiff corporation and the defendant, Mr. Ficente Sotelo,

entered into contracts whereby the former obligated itself to sell two steel tan5s, two

e"pellers, and two electric motors to the latter. *s to the tan5s, the agreement was that the

deli&ery was to be made within three or four months, but the seller shall not be responsible

for delays caused by fires, riots on land or on sea, stri5es or other causes 5nown as Eorce

Ma7eure. /ith regard to the e"pellers, he contract says within the month of September,#(#+, or as soon as possible. *nd with reference to the motors, appro"imate deli&ery within

ninety days but not guaranteed.

The tan5s arri&ed at Manila on *pril, #(#(; the e"pellers on 4ctober 2%, #(#+, and the

motors of Eebruary 2, #(#(. The plaintiff notified the defendant of the arri&al of the said

goods but the latter refused to recei&e them and pay the prices. This caused the plaintiff to

file a suit against defendant. The defendant, in turn, denied the allegations of the plaintiff,

stating that it was only on May, #(#( when plaintiff infirmed them that the tan5s ha&e

arri&ed. The Trial court rendered a decision absol&ing the defendant insofar as the tan5s and

motors are concerned but it rendered a decision against the defendant with regards to therecei&ing of the goods. Dence, an appeal by both parties.

$ssue#/hether or not under the contracts entered into and the circumstances established in

the record, the plaintiff has fulfilled, in due time, it obligation to bring the goods in question

to Manila.



33/128

%uling#>udgment appealed from is modified and defendant is sentenced to accept the goods

form the plaintiff.

The obligation must be regarded as conditional. The fulfillment of the condition, in

this case, depends not only upon the will of the plaintiff but also that of the third person.

*ccording to article ##2$ of the Ci&il Code 1now art. ##() of the 'CC, J4bligations forthe performance of which a day certain has been fi"ed shall be demandable only when the

day arri&es; * day certain must be understood to be one which must necessarily arri&e, e&en

though its date be un5nown; 6f the uncertainty should consists at the arri&al or nonarri&al of

the day, the obligation is conditional..K Time is regarded as unessential in this 5ind of

contract, though the deli&ery must be made within the reasonable time.

Moreo&er, the obligor will be deemed to ha&e sufficiently performed his part of the

obligation, if he has done all that was in his power, e&en if the condition has not been

fulfilled in reality. 6t is sufficient in the record that the plaintiff has made all the efforts it

could possibly be e"pected to ma5e under the circumstances, to bring the goods in questionto Manila.

&llan vs. ,ernaez 2 Phil. 6*

"acts#This is an *PP


34/128

=ut a right of action that has not yet arisen cannot prescribe. 6n time obligations, as that at

bar, to pay 8as soon as 6 recei&e the portion that as an heir must come to me from the estate

of >uana uly 2$, #(#+, the

defendant spouses, Ela&iano 0opez and Ma"imina del Castillo mortgaged realty located inn

the Pro&ince of 4ccidental 'egros to secure the payment of a loan of P 2, granted by

the plaintiff, the Philippine 'ational =an5 1P'=. The defendants bound themsel&es to pay

the loan with interest in ten annual installments of P ),%2.% each payable on or before >uly#+th of each year from; the date of said contract. !efendants failed to pay the sums

corresponding to the si" yearly installments and interest thereon, hence, the plaintiff

instituted this action. The trial court rendered 7udgment ordering the defendants to pay the

plaintiff the sum of P #),.#+ with + interest reser&ing to plaintiff the proper action on

last installment and interest thereon.

$ssueB /hether or not the trial court committed an error in adding that the eight annual

installment of P 2,++.++ is not yet demandable3

%uling# The defendants right to a&ail themsel&es of the periods was by the will of the

contracting parties themsel&es made sub7ect to the resolutory conditioned contained in

paragraph $ of the mortgage contract. 6t has resolutory effects, since its fulfillment resol&es

the period and lea&es the creditor at liberty to demand the performance of the debtors

obligations and to proud to foreclosure of mortgage. Dowe&er, this court ruled that the

mortgage installments in question ha&e matured by the failure of the mortgagor to pay, the

mortgagee may collect the uncle with law. /herefore, the trial court erred and its 7udgment

is hereby modified in fa&or of the plaintiff.

Article 11*6

Sariento vs. 9illasenor + Phil. 88

"acts# 4n *ugust 2+, #((#, the defendant loaned the plaintiffs the sum of P#,$ with

interest at the rate of 2$ per cent per annum for the term of one year. To guarantee this loan,

the plaintiffs pledged certain 7ewelries, which the contracting parties appraised at P,.

This loan is e&idenced by two documents.



35/128

The plaintiffs allege that at the maturity of this loan, *ugust )#, #(#2, the plaintiff


36/128

Ponce e 'eon vs. Sy?uco ).%. '416

"acts# The plaintiff obtained from defendant Sy7uco on May $, #(, a loan of P2,

and on >uly )#, #(, another loan of P#%,, payable within one year from May $, #(+.8

4n 'o&ember #$, #(, the plaintiff offered to pay the entire indebtedness plus all the

interest up to the date of maturity. ?pon Sy7ucoAs refusal to accept the tendered payment, theplaintiff deposited the amount with the cler5 of the Court of Eirst 6nstance of Manila and

instituted the present action to compel Sy7uco to accept payment. The records of the case

were destroyed during the war, but they were duly reconstituted after the liberation.

The trial court sentenced the plaintiff to pay Sy7uco the defendant the sum of P#+, as

principal and the further sum of P$,#) as interest thereon from *ugust %, #(, to May $,

#((, or total sum of P2),#), representing the whole indebtedness plus all the interest from

*ugust %, #(, to May $, #((, computed according to the =allantyne scale of &alues, with

interest thereon at the rate of % per annum from May %, #((, until said amount is paid in

full, with costs against the plaintiff. Erom this 7udgment Sy7uco has appealed, claiming hisright to be paid the sum of P2#%,, actual Philippine currency, plus P2,, as penalty

agreed upon in the contract.

$ssue#/hether or not the consignation made by the plaintiff &alid in the light of the law and

the stipulations agreed upon in the two promissory notes signed by the plaintiff3

,eld#The Supreme Court held in the negati&e. 6n order that consignation may be effecti&e,

the debtor must first comply with certain requirements prescribed by law. The debtor must

show 1# that there was a debt due; 12 that the consignation of the obligation had been made

because the creditor to whom tender of payment was made refused to accept it, or becausehe was absent for incapacitated, or because se&eral persons claimed to be entitled to recei&e

the amount due 1*rt. ##%, Ci&il Code; 1) that pre&ious notice of the consignation ha&e

been gi&en to the person interested in the performance of the obligation 1*rt. ##, Ci&il

Code; 1 that the amount due was placed at the disposal of the court 1*rt ##+, Ci&il

Code; and 1$ that after the consignation had been made the person interested was notified

thereof 1*rt. ##+, Ci&il Code.

/hile it is admitted a debt e"isted, that the consignation was made because of the refusal of

the creditor to accept it, and the filing of the complaint to compel its acceptance on the part

of the creditor can be considered sufficient notice of the consignation to the creditor,ne&ertheless, it appears that at least two of the abo&e requirements ha&e not been complied

with. Thus, it appears that plaintiff, before ma5ing the consignation with the cler5 of the

court, failed to gi&e pre&ious notice thereof to the person interested in the performance of

the obligation. 6t also appears that the obligation was not yet due and demandable when the

money was consigned, because, as already stated, by the &ery e"press pro&isions of the

document e&idencing the same, the obligation was to be paid within one year after May $,



37/128

#(+, and the consignation was made before this period matured. The failure of these two

requirements is enough ground to render the consignation ineffecti&e. *nd it cannot be

contended that plaintiff is 7ustified in accelerating the payment of the obligation because he

was willing to pay the interests due up to the date of its maturity, because, under the law, in

a monetary obligation contracted with a period, the presumption is that the same is deemed

constituted in fa&or of both the creditor and the debtor unless from its tenor or from other

circumstances it appears that the period has been established for the benefit of either one of

them.

Article 11*!

elgado and "igueroa v. Aenaar 16 Phil. +

"acts#Some time prior to ##th of Eebruary, #(+, there had been &arious transactions

carried on between the plaintiffs and the defendants whereby the defendant was indebted to

the plaintiffs in &arious sums of the rent and use of a certain hacienda, the property of the

plaintiffs. * settlement was made ac5nowledging the indebtedness in fa&or of the plaintiffs

in the sum of P2, 2%#.. Such obligation to pay is pure, simple and unconditional. 'o date

was fi"ed for its fulfillment. Dowe&er, a demand by the plaintiffs was made after May $,

#(+ when the obligation was finally signed. !efendant failed to pay which resulted for an

action which was instituted by the plaintiffs to reco&er the abo&ementioned sum of money

from the defendant.

The CE6 of 'egros 4ccidental rendered a 7udgment in fa&or of the plaintiffs. !efendant, in

turn, appealed on the grounds that the action was prematurely brought and that promissory

note which he ha&e issued is null and &oid for the reason that the internalre&enue stamps

are not affi"ed thereto, as required by section $+ of *ct. 'o. ##+(.

$ssue# #. /4' there was an implied intention of granting the defendant an e"tension of

time to pay his debt.

2. /4' failure to affi" the required stamp in the document will render such

document null and &oid.

,eldB The appealed 7udgment is affirmed.

?nder the pro&ision of the Ci&il Code now in force, the plaintiffs could ha&e demanded the

payment of this obligation at once, inasmuch as it has not been shown, neither can it be

inferred from the nature and circumstances of the obligation, that it was the intention of the

plaintiffs to grant the defendant an e"tension of time.



38/128

*ccording to paragraphs #, 2 and ## of section ##% of *ct. 'o. ##+(, it was the duty of the

defendant, as ma5er of the promissory note, to pay for the stamps and affi" the same thereto

at the time of the ma5ing and signing of the said note. The defendant failed to comply with

this pro&ision of law and he now see5s to ta5e ad&antage of his own wrong by insisting that

the said promissory note has no legal &alue.

Article 11*8

Tiol vs. Martin ).%. '4 +6*

"acts#6n *ugust, #((, in the court of first instance of Manila, =ernardo P. Timbol sued the

defendant spouses to reco&er the &alue of eight promissory notes, si" e"ecuted on different

dates in #( and two in >anuary #($. The first two were payable in *pril and >uly #($,

but the rest were due 8si"ty days after the declaration of peace in the Philippines.8

!efendants were intending to dispose of their properties in the Philippines and thereafter

return to *merica, the plaintiff obtained a writ of preliminary attachment. 6n&o5ing the

moratorium orders, :epublic *ct 'o. )2 and se&eral decisions of this Court, the defendants

mo&ed for dismissal of the complaint. The court dismissed the case, hence this appeal.

PlaintiffAs argument is the proposition that the period for the performance of defendantsA

obligation in the different promissory notes, or the 8terms8 thereof were superseded by the

Moratorium 0aw, which in itself is a 8term8. This term for defendants,plaintiff contends

has been lost to them, in accordance with the aforesaid article ##2( of the Ci&il Code 1#. 6f,

after contracting the obligation, it should appear that he is insol&ent, unless he gi&es security

for the debt R R R.8 , for the reason that they became insol&ent.

$ssueB /hether the debtors lost the benefit of the period.

,eldB The court held that the theory of wai&er or forfeiture may not be properly sustained.

Eirstly, article ##2( ob&iously contemplates a period fi"ed by the contracting parties. The

moratorium law was not so fi"ed. 6t was not e&en foreseen by the parties at the time they

entered into the contract.

Secondly, under article ##2( of the Ci&il Code the insol&ency must be one occurring after

the term was fi"ed. Dere there is no proof that defendants became insol&ent after the

promulgation of the moratorium orders.

Thirdly, the insol&ency of the debtor could not rightly be pleaded in a&oidance of the

moratorium, because the general inability of debtors to satisfy their obligations, their

temporary insol&ency so to spea5, was precisely the raison dAetre for the suspension of

collection suits. *nd it would be plain inconsistency to declare that the debtorAs financial

difficulties depri&e him automatically of the benefits of the moratorium statute.



39/128

Article 11**

Agoncillo vs. @avier 8 Phil. +2+

"actsB This action was brought on March #, #(#%, based on a document e"ecuted on

Eebruary 2, #(, in which the defendants promised to pay the plaintiffs the sum of P2,).$ within one year, with #2 interest per annum, and in case of insol&ency of the

debtors Jwe cede by &irtue of these presents the said house and lot which is gi&en in

mortgage, transferring all our rights and ownership and possession of the lotK. This action is

to compel the defendants to pay the debt, and if they fail to do so, to con&ey the house and

lot. The defendants claim that the action is barred by prescription.

$ssue#/hether or not the action is barred by prescription.

,eldB @es. The agreement to con&ey the house and lot at an appraised &aluation in the e&ent

of failure to pay the debt in money at its maturity is perfectly &alid. 6t is simply an

underta5ing that if the debt is not paid in money, it will be paid in another way. The contract

is not susceptible of the interpretation that the title of the house and lot questioned was to be

transferred to the creditor ipso facto upon mere

85577257 compiled digests in oblicon

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