Page 1 of 745
Saint Louis University
School of Law
Department of Civil and Labor Laws
In partial fulfillment of the requirements in the subject Obligations and
Contracts
Submitted to:
Atty. Ma. Lulu G. Reyes
Submitted by:
Dexter Cayadan
Frederick Diong-an
Jonardo Jonel Dalimag
Andrew Gondayao
Sidney Kotoken
Novelyn Balgonia
Jenny A. Sagpa-ey
Marjoree Anne S. Sagsago
Page 2 of 745
No. Cases Page
GENERAL PRINCIPLES
1 Ocampo III v. People 11
2 Leung Ben v. O‘Brien 12
3 Pelayo v. Lauron 13
4 ASI Corporation v. Evangelista 14
5 Ramas v. Quiamco 15
6 Hotel Nikko v. Reyes 16
7 St. Mary‘s Academy v. Carpitanos 17
8 Spouses Guanio v. Makati Shangri-la Hotel 18
9 TSPI, Inc. v. TSPOC Employees Union 19
10 Regino v. Pangasinan College 20
11 PSBA v. Court of Appeals 21
12 Cosmo Entertainment v. La Ville 22
13 Ayala Corporation v. Rosa Diana Realty 23
14 Bricktown Development v. Amor Tierra Development 24
15 Pilipinas Hino v. Court of Appeals 25
16 Philippine Realty and Holding Corporation v. Ley Construction and Development 26
17 Titan-Ikeda Construction v. Primetown Property 27
18 PADCOM v. Ortigas 28
19 MC Engineering v. Court of Appeals 29
20 Bank of the Philippine Islands v. Pineda 30
21 State Investment v. Court of Appeals 31
22 Abellana v. People 32 23 People v. Malicsi 33 24 People v. Sia 34 25 People v. Doctolero 35 26 People v. Abulencia 36 27 Bermudez v. Melecio-Herrera 37 28 People v. Relova 38
29 Manantan v. Court of Appeals 39
30 People v. Bayotas 40
31 Barredo v. Garcia 41
32 Philippine Hawk Corporation v. Lee 42
33 Dy Teban v. Ching 43
34 Safeguard Security v. Tiangco 44
35 Villanueva v. Domingo 45
36 Calalas v. Court of Appeals 46
37 Ludo & Luym Corporation v. Court of Appeals 47
38 Thermochem v. Naval 48
39 Picart v. Smith 49
NATURE AND EFFECTS OF OBLIGATIONS
40 Lagon v. Hooven Comalco 50
41 Francisco v. Court of Appeals 51
42 Tanguiling v. Court of Appeals 52
43 Periquet v. Court of Appeals 53
44 Legaspi oil v. Court of Appeals 54
45 Titan-Ikeda Construction v. Primetown Property 55
46 Philippine National Bank Madecor v. Uy 56
47 Barzaga v. Court of Appeals 57
48 Tanguiling v. Court of Appeals 58
Page 3 of 745
50 Periquet v. Court of Appeals 60
51 Raquel-Santos v. Court of Appeals 61
52 Rizal Commercial Banking Corporation v. Court of Appeals 62
53 Bank of the Philippine Islands v. Court of Appeals 63
54 Leano v. Court of Appeals 64
55 Heirs of Bacus v. Court of Appeals 65
56 Integrated Packing v. Court of Appeals 66
57 Laforteza v. Machuca 67
58 Regala v. Carin 68
59 International Corporate Bank v. Gucco 69
60 Republic v. Court of Appeals 70
61 Yambao v. Zuniga 71
62 Smith, Bell Dodwell v. Borja 72
63 Ilusorio v. Court of Appeals 73
64 National Power Corporation v. Court of Appeals 74
65 Muaje-Tuazon v. Wenphil 75
66 RCPI v. Verchez 76
67 Victory Liner v. Gammad 77
68 FGU v. Sarmiento 78
69 LRTA v. Natividad 79
70 Rodzssen v. Far East Bank 80
71 University of the East v. Jader 81
72 Bayne Adjusters v. Court of Appeals 82
73 Delsan Transport v. C & A Consortium 83
74 PCIB v. Court of Appeals 84
75 SMC and heirs of Ouana v. Court of Appeals 85
76 Pacis v. Morales 86
77 Philippine Hawk Corporation v. Tan Lee 87
78 Mercury Drug v. Spouses Huang 88
79 Mendoza v. Soriano 89
80 Cerezo v. Tuazon 90
81 Filipinas Synthetic v. De Los Santos 91
82 Viron v. De los Santos 92
83 Mercury Drug v. Baking 93
84 Safeguard Security v. Tangco 94
85 Pleyto v. Lomboy 95
86 Viron v. De los Santos 96
87 Sykl v. Begana 97
88 Yambao v. Zuniga 98
89 Regino v. Pangasinan College 99
90 YHT Realty v. Court of Appeals 100
91 Ramos v. Court of Appeals 101
92 Reyes v. Sisters of Mercy 102
93 Nogales v. Capitol Medical Center 103
94 Proffesional Services v. Agana 104
95 Professional Services v. Court of Appeals 105
96 Rubi Li v. Spouses Soliman 106
97 Diaz v. Davao Light 107
98 Yasonna v. De Ramos 108
99 People v. De los Santos 109
100 Magat v. Medialdea 110
101 Vda. De Mistica v. Naguiat 111
102 Co v. Court of Appeals 112
103 Reyes v. Tuparan 113
104 G.G. Sportswear Manufacturing v. World Class Properties, Inc. 114
105 UFC v. Court of Appeals 115
106 University of the Philippines v. Delos Angeles 116
107 Raquel-Santos v. Court of Appeals 117
108 Francisco v. DEAC Construction, Inc. 118
Page 4 of 745
110 Villanueva v. Estate of Gonzaga 120
111 Paguyo v. Astorga 121
112 Casino v. Court of Appeals 122
113 Carrascoso v. Court of Appeals 123
114 Goldenrod v. Court of Appeals 124
115 Serrano v. Court of Appeals 125
116 Gil v. Court of Appeals 126
117 Reyes v. Lim 127
118 Ong v. Tiu 128
119 Equatorial Realty v. Mayfair Theater 129
120 Velarde v. Court of Appeals 130
121 Asuncion v. Evangelista 131
122 Uy v. Court of Appeals 132
123 Tamayo, et. al. v. Abad Senora 133
124 Victory Liner v. Heirs 134
125 GSIS v. Labung Deang 135
126 BPI Investment v. D.G. Carreon 136
127 Khe Kong v. Court of Appeals 137
128 Philippine Realty and Holding Corp. v. Ley Construction and Dev‘t. 138
129 Megaworld Globus Asia, Inc. v. Tanseco 139
130 Sicam v. Jorge 140
131 Huibonhoa v. Court of Appeals 141
132 Ace Agro v. Court of Appeals 142
133 Dioquino v. Laureano 143
134 Bachelor Express v. Court of Appeals 144
135 Vasquez v. Court of Appeals 145
136 Yobido v. Court of Appeals 146
137 Juntilla v. Fontanar 147
138 Philamgen Insurance v. MGG Marine 148
139 Mindez v. Morillo 149
140 NAPOCOR v. Phillip Bros. 150
141 Ong Genato v. Bayhon, et. al. 151
142 Union Bank v. Santibanez 152
143 San Agustin v. Court of Appeals 153
144 Project Builders, Inc. v. Court of Appeals 154
KINDS OF OBLIGATIONS
145 Development Bank of the Philippines v. Court of Appeals 155
146 Tomimbang v. Tomimbang 156
147 Gonzales v. Heirs 157
148 Insular Life v. Young 158
149 Direct Funders v. Lavina 159
150 Vda. De Mistica v. Naguiat 160
151 Hermosa v. Longara 161
152 Trillana v. Quezon Colleges 162
153 Visayan Sawmill v. Court of Appeals 163
154 Leano v. Court of Appeals 164
155 Heirs of Sandejas v. Lim 165
156 Commissioner of Internal Revenue v. Primetown 166
157 NAMARCO v. Tecson 167
158 Berg v. Magdalena Estates 168
159 Lirag v. Court of Appeals 169
160 Daguhoy v. Ponce 170
161 Victoria Planters v. Victoria Milling 171
162 Jespajo v. Court of Appeals 172
163 Morromeo v. Court of Appeals 173
164 Gonzales v. Jose 174
165 Baluyut v. Poblete 175
166 Malayan Realty v. Uy 176
Page 5 of 745
168 Santos v. Santos 178
169 Melotindos v. Tobias 179
170 LL and Company v. Huang 180
171 Brent School v. Zamora 181
172 Lim v. People 182
173 Pacific Banking v. Court of Appeals 183
174 Agoncillo v. Javier 184
175 Ong Guan v. Century 185
176 Legarda v. Miailhe 186
177 Reyes v. Martinez 187
178 Quizana v. Redugerio 188
179 Alipio v. Court of Appeals 189
180 PH Credit Corporation v. Court of Appeals 190
181 CDCP v. Estrella 191
182 Republic Glass Corporation v. Qua 192
183 Industrial Management v. NLRC 193
184 Metro Manila Transit v. Court of Appeals 194
185 Inciong v. Court of Appeals 195
186 Philippine Blooming Mills v. Court of Appeals 196
187 Asset Builders v. Stronghold 197
188 Esparwa Security v. Liceo de Cagayan 198
189 Dimayuga v. PCIB 199
190 Cerna v. Court of Appeals 200
191 Nazareno v. Court of Appeals 201
192 Alonzo v. San Juan 202
193 David v. Court of Appeals 203
194 Republic v. Thi Thu Thuy de Guzman 204
195 Marques v. far East Bank 205
196 Prisma Construction v. Menchavez 206
197 Macalalag v. People 207
198 Tan v. Court of Appeals 208
199 Eastern Shipping v. Court of Appeals 209
200 PCI v. Ng Sheung Ngor 210
201 NSBC v. Philippine National Bank 211
202 Polotan v. Court of Appeals 212
203 New Sampaguita v. Philippine National Bank 213
204 Prisma Construction v. Menchavez 215
205 Maceda, Jr. v. DBO/DBP 216
206 Philippine National Bank v. Encina 217
207 Imperial v. Jaucian 218
208 Pabugais v. Sahijwani 219
209 Lo v. Court of Appeals 221
210 Ligutan v. Court of Appeals 222
211 Pascual v. Ramos 223
212 First Metro Investment v. Este del Sol 224
213 Domel Trading v. Court of Appeals 225
214 Medel v. Court of Appeals 227
215 Reformina v. Tomol 228
EXTINGUISHMENT OF OBLIGATIONS
216 Lo v. KJH 229
217 Philippine National Bank v. Court of Appeals 230
218 Cathay Pacific v. Vasquez 231
219 Citibank v. Sabentiano 232
220 Telengton Bros. v. US Lines 233
221 CF Sharp v. Northwest Airlines 234
222 Padilla v. Paredes 235
223 Tibajia v. Court of Appeals 236
224 Development Bank of the Philippines v. Court of Appeals 237
Page 6 of 745
226 Metrobank v. Cabilzo 239
227 Almeda v. Bathala Marketing 240
228 PCI v. Ng Sheung Ngor 241
229 Palanca v. Guides 242
230 PCIB v. Court of Appeals 243
231 Lagon v. Hooven Comalco 244
232 Bank of the Philippine Islands v. Court of Appeals 245
233 Republic v. Thi Thu Thuy De Guzman 246
234 Audio Electric v. NLRC 247
235 Land Bank of the Philippines v. Ong 248
236 Binalbagan v. Court of Appeals 249
237 Lorenzo Shipping v. BJ Marthel 251
238 Luzon Development Bank v. Enriquez 252
239 Estanislao v. East-West Banking Corporation 253
240 Aquintey v. Tibong 254
241 Vda. De Jayme v. Court of Appeals 255
242 Caltex v. IAC 256
243 Lo v. Court of Appeals 257
244 ASI Corporation v. Evangelista 258
245 Paculdo v. Regalado 259
246 CBC v. Court of Appeals 260
247 Mobil v. Court of Appeals 261
248 Dalton v. FGR Realty and Development Corporation 262
249 Benos v. Lawilao 263
250 People‘s Industrial v. Court of Appeals 264
251 Eternal Gardens v. Court of Appeals 265
252 Rayos v. Reyes 266
253 Cebu International v. Court of Appeals 267
254 De Mesa v. Court of Appeals 268
255 Occena v. Court of Appeals 269
256 Ortigas v. Feati Bank 270
257 So v. Food Fest Land, Inc. 271
258 Magat v. Court of Appeals 272
259 PNCC v. Court of Appeals 273
260 NATELCO v. Court of Appeals 274
261 Reyna v. Commission on Audit 275
262 Trans Pacific v. Court of Appeals 276
263 Dalupan v. Harden 277
264 Lopez Vito v. Tambunting 278
265 Estate of Mota v. Serra 279
266 Yek Ton Lin v. Yusingco 280
267 EGV Realty v. Court of Appeals 281
268 Aerospace Chemical v. Court of Appeals 282
269 Apodaca v. NLRC 283
270 Spouses Chung v. Ulanday Construction 284
271 Lao, et. al. v. Special Plans, Inc. 285
272 United Planters Sugar v. Court of Appeals 286
273 PNB Management v. R&R Metal 287
274 Silahis v. IAC 288
275 Francia v. Court of Appeals 289
276 Trinidad v. Acapulco 290
277 Hernandez Nievera v. Hernandez 291
278 St. James College v. Equitable PCI Bank 292
279 Tomimbang v. Tomimbang 293
280 Mindanao Savings v. Willkom 294
281 Aquintey v. Tibong 295
282 Swagman v. Court of Appeals 296
283 Azolla Farms v. Court of Appeals 297
284 California Bus Lines v. State Investment 298
Page 7 of 745
286 Reyes v. Court of Appeals 300
287 Bautista v. Pilar Development 301
288 Evadel Realty v. Soriano 302
289 B&I Realty v. Caspe 303
290 Mersina v. Garcia 304
291 Heirs of Gaudiane v. Court of Appeals 305
292 Laureano v. Court of Appeals 306
293 Banco Filipino v. Court of Appeals 307
294 Vda. De Delgado v. Court of Appeals 308
295 Maestrado v. Court of Appeals 309
296 Tanay Recreation v. Fausto 310
297 Mendoza v. Court of Appeals 311
298 Lim v. Queensland 312
299 Placewell v. Camote 313
300 Heirs of Ragua v. Court of Appeals 314
301 Metrobank v. Court of Appeals 315
302 Spouses Manuel v. Court of Appeals 316
303 Cuenco v. Cuenco 317
304 Laurel v. Desierto 318
305 Hanopol v. SM 319
306 Terminal Facilities v. PPA 320
307 Mendoza v. Court of Appeals 322
308 Roblett Construction v. Court of Appeals 325
309 Simedarby v. Goodyear 327
310 Kings Properties Corporation, Inc. v. Galido 328
311 Metrobank v. Cabilzo 330
312 Mesina v. Garcia 331
313 Pahamatong v. Philippine National Bank 322
314 Shopper‘s Paradise v. Roque 333
315 Meatmasters v. Lelis Integrated 335
316 Manipor v. Ricafort 337
317 Larena v. Mapili 338
318 Santos v. Santos 339
319 Villanueva Mijares v. Court of Appeals 341
CONTRACTS
320 Spouses Edralin v. Philippine Veterans Bank 342
321 Martin, et. al. v. DBS Bank Philippines 344
322 Heirs of Zabala, et. al. v. Court of Appeals 346
323 Star Paper v. Simbol 347
324 Tiu v. Platinum Plans 348
325 Avon Cosmetics v. Luna 349
326 Del Castillo v. Richmond 351
327 Arwood v. DM Consunji 352
328 Pascual v. Ramos 353
329 PUP v. Golden Horizon 355
330 Villegas v. Court of Appeals 357
331 Equatorial Realty v. Carmelo 358
332 PUP v. Court of Appeals 360
333 Litonjua v. L&R 362
334 Josefa v. Zhandong 363
335 Saludo v. Security Bank 364
336 PCI v. Ng Sheung Ngor 366
337 Dio v. St. Ferdinand Memorial 367
338 PILTEL v. Tecson 369
339 PAL v. Court of Appeals 370
340 Ermitano v. Court of Appeals 371
341 Uniwide v. Titan-Ikeda 372
342 Heirs of Salas v. Laperal 373
Page 8 of 745
344 Tan v. Gullas 376
345 Gozan v. Mercado 378
346 Sta. Lucia Realty v. Spouses Buenaventura 379
347 Chan v. Maceda 381
348 Baluyot v. Court of Appeals 383
349 Cuyco v. Cuyco 386
350 Go v. Cordero 388
351 Tayag v. Court of Appeals 390
352 So v. Court of Appeals 391
353 International Freeport v. Danzas 393
354 Rockland v. Mid Pasig Development 395
355 MMDA v. JANCOM 397
ESSENTIAL REQUISITES OF CONTRACTS
356 Rockland v. Mid Pasig Land Development 399
357 Manila Metal v. PNB 401
358 Montecillo v. Reynes 403
359 Soler v. Court of Appeals 405
360 Palattao v. Court of Appeals 407
361 ABS-CBN v. Court of Appeals 409
362 Limson v. Court of Appeals 411
363 Villanueva v. Philippine National Bank 412
364 Catalan v. Basa 114
365 Domingo v. Court of Appeals 416
366 Mendezona v. Ozamiz 417
367 Lim v. Court of Appeals 418
368 Ruiz v. Court of Appeals 419
369 Dela Cruz v. Sison 420
370 Rural Bank of Sta. Maria v. Court of Appeals 421
371 Carabeo v. Spouses Dingco 422
372 Chavez v. PEA 423
373 Melliza v. City of Ilo-Ilo 424
374 Catindig v. Vda. De Meneses 425
375 Orduna, et. al. v. Fuentebella 426
376 Askay v. Cosalan 428
377 Heirs of Balite v. Lim 429
378 Suntay v. Court of Appeals 431
379 Uy v. Court of Appeals 433
380 Catly v. Navarro, et. al. 434
381 Liguez v. Court of Appeals 436
382 Philbank v. Lui She 437
FORM OF CONTRACTS
383 Londres v. Court of Appeals 438
384 Spouses Vega v. SSS 440
385 Balatbat v. Court of Appeals 441
386 Universal Robina v. Heirs of Teves 442
REFORMATION OF INSTRUMENTS
387 Sarming v. Dy 444
388 Cebu v. Court of Appeals 445
INTERPRETATION OF CONTRACTS
389 ADR Shipping v. Gallardo 446
390 Movido v. Pastor 447
391 TSPIC Corp. v. TSPIC Employees Union 448
392 Estanislao v. East-West Banking Corporation 449
393 Aquintey v. Tibong 450
394 Cruz v. Court of Appeals 451
Page 9 of 745
396 Almira v. Court of Appeals 454
397 Philbank v. Lim 455
398 Rigor v. Consolidated Leasing 456
399 Velasquez v. Court of Appeals 457
DEFECTIVE CONTRACTS
400 Heirs of Qurong v. Development Bank of the Philippines 458
401 Lee v. Bangkok Bank 460
402 Equatorial Realty v. Mayfair Theater 462
403 Siguan v. Lim 463
404 Khe Kong v. Court of Appeals 465
405 Suntay v. Court of Appeals 466
406 Brobio Mangahas v. Brobio 467
407 Hernandez v. Hernandez 469
408 Fuentes, et. al. v. Roca 471
409 Associated Bank v. Spouses Montano 472
410 Miailhe v. Court of Appeals 473
411 First Philippine Holdings v. Trans Middle East Equities, Inc. 474
412 Sanchez v. Malapad Realty 475
413 Oesmer v. PDC 476
414 Vda. De Ape v. Court of Appeals 477
415 Francisco v. Herrera 478
416 Braganza v. Villa Abrille 479
417 Katipunan v. Katipunan 480
418 Jumalon v. Court of Appeals 481
419 Cabales, et. al. v. Court of Appeals 482
420 Vda. De Ouano, et. al. v. Republic 483
421 Shoemaker v. La Tondena 484
422 PNB v. Philippine Vegetable Oil Company 485
423 Vda. De Ouano, et. al. v. Republic 486
424 Municipality of Hagonoy v. Dumdum 487
425 Tan v. Villapaz 488
426 Spouses David v. Tiongson 489
427 Cordial v. Miranda 490
428 Villanueva-Mijares v. Court of Appeals 491
429 Rosencor v. Inquing 492
430 Firme v. Buka 493
431 Heirs of M. Doronio v. Heirs of F. Doronio 494
432 Gurrea v. Suplico 495
433 Frenzel v. Catito 496
434 La Bugal B‘laan v. Ramos 497
435 Agan v. PIATCO 498
436 COMELEC v. Quijano-Padilla 499
437 Jaworski v. PAGCOR 500
438 Oesmer v. PDC 501
439 Heirs of Balite v. Lim 502
440 Pineda v. Court of Appeals 503
441 Cruz v. Bancom 504
442 Cauton v. Salud 505
443 Infotech v. COMELEC 506
444 Pabugais v. Sahijwani 507
445 Liguez v. Court of Appeals 509
446 Philbank v. Lui She 510
447 Vigilar v. Aquino 511
448 EPG Construction v. Vigilar 512
449 Go Chan v. Young 513
450 Francisco v. Herrera 514
451 Mendezona v. Ozamiz 515
Page 10 of 745
452 Manzanilla v. Court of Appeals 516
453 Rural Bank of Paranaque v. Remolado 517
TRUSTS
454 Cojuangco v. Republic 518
455 Ringor v. Ringor 519
456 Salvador v. Court of Appeals 520
457 Huang v. Court of Appeals 521
458 Vda. De Esconde v. Court of Appeals 522
459 Ancog v. Court of Appeals 523
460 Morales v. Court of Appeals 524
461 Tala Realty v. Banco Filipino 526
462 Medina v. Court of Appeals 529
463 Filipinas Port v. Go 532
464 Mendizabel v. Apao 534
465 Vda. De Alberto v. Go 536
466 Heirs of Yap v. Court of Appeals 538
467 Heirs of Kionisala v. Heirs of Dacut 539
468 Ramos v. Ramos 540
469 Intestate Estate of Ty v. Court of Appeals 541
470 Vda. De Reterto v. Barz 542
471 Chia Long Tan v. Cour of Appeals 543
Page 11 of 745 OCAMPO III. VS. PEOPLE
G.R Nos. 156547-51. February 4, 2008
FACTS:
The Department of Budget and Management released the amount of Php 100 Million for the support of the local government unit of the province of Tarlac. However, petitioner Ocampo, governor of Tarlac, loaned out more than P 56.6 million in which he contracted with Lingkod Tarlac Foundation, Inc.. thus, it was the subject of 25 criminal charges against the petitioner.
The Sandiganbayan convicted the petitioner of the crime of malversation of public funds. However, the petitioner contended that the loan was private in character since it was a loan contracted with the Taralc Foundation.
ISSUE:
Whether the amount loaned out was private in nature.
RULING:
Yes, the loan was private in nature because Art. 1953 of the New Civil Code provides that ―a person who receives a loan of money or any other fungible thing acquires the ownership thereof, and is bound to pay the creditor an equal amount of the same kind and quality.‖
The fact that the petitioner-Governor contracted the loan, the public fund changed its nature to private character, thus it is not malversation which is the subject of this case, instead it must be a simple collection of money suit against the petitioner in case of non payment .
Page 12 of 745 Leung Ben vs. O’Brien
G.R. No. L-13602, April 6, 1918 38 Phil. 182
FACTS:
On December 12, 1917 an action was instituted in the CFI of Manila by O‘Brien to recover from Leung Ben the sum of P15, 000.00 alleged to have been lost by the plaintiff to the defendant in a series of gambling, banking and percentage games conducted during the two or three months prior to the institution of the suit. In his verified complaint the plaintiff asked for an attachment, under sections 424 and 412 (1) of the Code of Civil Procedure against the property of the defendant on the ground that the latter was about to depart from the Philippine Island with intent to defraud his creditors. The attachment was issued and acting on the authority thereof, the sheriff attached the sum of P15, 000.00 which had been deposited by the defendant with the International Banking Corporation.
The defendant moved to quash the attachment; the court however, dismissed said motion. On January 8, 1918, petitioner Leung Ben, the defendant in that action filed his petition for writ of certiorari directed against O‘Brien and the judges of CFI. The prayer is that, the honorable James A. Ostrand be required to certify the records for review and that the order of attachment that had been issued should be revoked and discharged with cost.
ISSUE:
The issue is whether or not the statutory obligation to restore money won at gaming is an obligation from ―contract, express or implied.‖
HELD:
The duty of the defendant to refund the money which he won from the plaintiff at gaming is not an obligation from ―contract, express or implied‖ rather it is a duty imposed by statute. Upon general principles, recognized both in civil and common law, money lost at gaming and voluntarily paid by the loser to the winner cannot, in the absence of statute, be recovered in a civil action. But Act No. 1757 of the Philippine Commission, which defines and penalizes several forms of gambling, containing numerous provisions recognizing the right to recover money lost in gambling or in the playing of certain games. The obligation of the defendant to restore or refund the money which he won from the plaintiff at gaming therefore arises ex lege.
Page 13 of 745 Arturo Pelayo vs. Marcelo Lauron
G.R. No. L-4089, January 12, 1909 12 Phil. 453
FACTS:
On or about October 13, 1906, the plaintiff Arturo Pelayo was called to the house of the defendants, Marcelo Lauron and Juana Abella situated in San Nicolas, and that upon arrival he was requested by them to render medical assistance to their daughter-in-law who was about to give birth to a child. After consultation with the attending physician, Dr. Escaño, the plaintiff found it necessary to remove the fetus by means of an operation, in which service he was occupied until the following morning, and had visited the patient several times. The equitable value of the services rendered by the plaintiff was P500.00, which the defendants refused to pay. On November 23, 1906, the plaintiff filed a complaint against the defendants and prayed that the judgment be rendered in his favor as against the defendants, or any of them, for the sum of P500 and costs, together with any other relief that may be deemed proper. In answer, the defendants denied all allegations and alleged as a special defense, that their daughter-in-law died as a consequence of the said childbirth, and when she was still alive she lived with her husband independently and in a separate house and without any relation whatsoever with them, and on the day she gave birth she was in the house of the defendants and her stay there was accidental and due to fortuitous circumstances. Thus, the defendants prayed that they be absolved from the complaint with costs against the plaintiff.
The plaintiff demurred the answer and that the lower court sustained the demurrer directing the defendants to amend their answer. In compliance, the defendants amended their answer denying each and every allegation contained in the complaint. The lower court rendered judgment in favor of the defendants absolving them from the complaint.
ISSUE:
The issue is whether or not the parents-in-law are under any obligation to pay the fees claimed by the plaintiff.
HELD:
The defendants were not, nor are they now, under any obligation by virtue of any legal provision, to pay the fees claimed, nor in consequence of any contract entered into between them and the plaintiff from which such obligation might have arisen.
The rendering of medical assistance in case of illness is comprised among the mutual obligations to which spouses are bound by way of mutual support. When either of them by reason of illness should be in need of medical assistance, the other is under the unavoidable obligation to furnish the necessary services of a physician in order that the health may be restored; the party bound to furnish such support is therefore, liable for all the expenses,
including the fees of the medical expert for his professional services. The liability arises from the obligation, which the law has expressly established, between married couples. It is therefore the husband of the patient who is bound to pay for the services of the plaintiff. The fact that it was not the husband who called the plaintiff and requested the medical assistance for his wife is no bar to his fulfillment of such obligation, as the defendants, in view of the imminent danger to which the life of the patient was at that moment exposed, considered that the medical assistance was urgently needed. Therefore, plaintiff should direct his action against the husband of the patient, and not against her parents-in-law.
Page 14 of 745 ASI CORPORATION VS. EVANGELISTA
G.R No. 158086. February 14, 2008
FACTS:
Private respondent Evangelista contracted Petitioner ASJ Corporation for the incubation and hatching of eggs and by products owned by Evangelista Spouses. The contract includes the scheduled payments of the service of ASJ Corporation that the amount of installment shall be paid after the delivery of the chicks. However, the ASJ Corporation detained the chicks because Evangelista Spouses failed to pay the installment on time.
ISSUE:
Was the detention of the alleged chicks valid and recognized under the law?
RULING:
No, because ASJ Corporation must give due to the Evangelista Spouses in paying the installment, thus, it must not delay the delivery of the chicks. Thus, under the law, they are obliged to pay damages with each other for the breach of the obligation.
Therefore, in a contract of service, each party must be in good faith in the performance of their obligation, thus when the petitioner had detained the hatched eggs of the respondents
spouses, it is an implication of putting prejudice to the business of the spouses due to the delay of paying installment to the petitioner.
Page 15 of 745 RAMAS VS. QUIAMCO
G.R No. 146322. December 6, 2006
FACTS:
Quiamco has amicably settled with Davalan, Gabutero and Generoso for the crime of robbery and that in return, the three had surrendered to Quiamco a motorcycle with its
registration. However, Atty. Ramas has sold to Gabutero the motorcycle in installment but when the latter did not able to pay the installment, Davalon continued the payment but when he
became insolvent, he said that the motorcycle was taken by Quiamco‘s men. However, after several years, the petitioner Ramas together with policemen took the motorcycle without the respondent‘s permit and shouted that the respondent Quiamco is a thief of motorcycle.
Respondent then filed an action for damages against petitioner alleging that petitioner is liable for unlawful taking of the motorcycle and utterance of a defamatory remark and filing a baseless complaint. Also, petitioners claim that they should not be held liable for petitioner‘s exercise of its right as seller-mortgagee to recover the mortgaged motorcycle preliminary to the enforcement of its right to foreclose on the mortgage in case of default.
ISSUE:
Whether the act of the petitioner is correct.
RULING:
No. The petitioner being a lawyer must know the legal procedure for the recovery of possession of the alleged mortgaged property in which said procedure must be conducted
through judicial action. Furthermore, the petitioner acted in malice and intent to cause damage to the respondent when even without probable cause, he still instituted an act against the law on mortgage.
Page 16 of 745 Nikko Hotel Manila Garden vs. Roberto Reyes
G.R. No. 154259, February 28, 2005 452 SCRA 532
FACTS:
Respondent herein Roberto Reyes, more popularly known by the screen name ―Amay Bisaya,‖ alleged that while he was having coffee at the lobby of Hotel Nikko, he was spotted by Dr. Violeta Filart, his friend of several years, invited him to join her in a party at the hotel‘s penthouse in celebration of the natal day of the hotel‘s manager, Mr. Masakazu Tsuruoka. Mr. Reyes asked if she could vouch for him for whom she replied: ―of course.‖ Reyes then went up with the party of Dr. Filart carrying the basket of fruits which was the latter‘s present for the celebrant. At the penthouse, they first had their picture taken with the celebrant after which Reyes sat with the party of Dr. Filart. After a couple of hours, when the buffet dinner was ready, Mr. Reyes lined-up at the buffet table but, to his great shock, shame and embarrassment, he was stopped by Ruby Lim, the Executive Secretary of Hotel Nikko. Reyes alleged that Ruby Lim, in a loud voice and within the presence and hearing of the other guests who were making a queue at the buffet table, told him to leave the party because he was not invited. Mr. Reyes tried to
explain that he was invited by Dr. Filart but the latter, who was within hearing distance,
completely ignored him thus adding to his shame and humiliation. Afterwards, while he was still recovering from the traumatic experience, a Makati policeman approached and asked him to step out of the hotel. Like a common criminal, he was escorted out of the party by the policeman. Claiming damages, Mr. Reyes asked for One Million Pesos actual damages, One Million Pesos moral and/or exemplary damages and Two Hundred Thousand Pesos attorney‘s fees.
Petitioners Lim and Hotel Nikko contend that pursuant to the doctrine of volenti non fit injuria, they cannot be made liable for damages as respondent Reyes assumed the risk of being asked to leave (and being embarrassed and humiliated in the process) as he was a ―gate-crasher.‖ ISSUE:
Whether or not Hotel Nikko and Ruby Lim are jointly and severally liable with Dr. Filart for damages under Articles 19 and 21 of the Civil Code.
HELD:
The doctrine of volenti non fit injuria (―to which a person assents is not esteemed in law as injury‖) refers to self-inflicted injury or to the consent to injury which precludes the recovery of damages by one who has knowingly and voluntarily exposed himself to danger, even if he is not negligent in doing so.
The Supreme Court agreed with the lower court‘s ruling that Ms. Lim did not abuse her right to ask Mr. Reyes to leave the party as she talked to him politely and discreetly. Considering the closeness of defendant Lim to plaintiff when the request for the latter to leave the party was made such that they nearly kissed each other, the request was meant to be heard by him only and there could have been no intention on her part to cause embarrassment to him. In the absence of any proof of motive on the part of Ms. Lim to humiliate Mr. Reyes and expose him to ridicule and shame, it is highly unlikely that she would shout at him from a very close distance. Ms. Lim having been in the hotel business for twenty years wherein being polite and discreet are virtues to be emulated, the testimony of Mr. Reyes that she acted to the contrary does not inspire belief and is indeed incredible. Ms. Lim, not having abused her right to ask Mr. Reyes to leave the party to which he was not invited, cannot be made liable to pay for damages under Articles 19 and 21 of the Civil Code. Necessarily, neither can her employer, Hotel Nikko, be held liable as its liability springs from that of its employee. Had respondent simply left the party as requested, there was no need for the police to take him out.
Page 17 of 745 St. Mary’s Academy vs. William Carpitanos and Lucia S. Carpitanos
G.R. No. 143363, February 6, 2002 426 Phil 878
FACTS:
From 13 to 20 February 1995, St. Mary‘s Academy of Dipolog City conducted an enrollment drive for the school year 1995-1996. A facet of the enrollment campaign was the visitation of schools from where prospective enrollees were studying. As a student of St. Mary‘s Academy, Sherwin Carpitanos was part of the campaigning group. Accordingly, on the fateful day, Sherwin, along with other high school students were riding in a Mitsubishi jeep owned by defendant Vivencio Villanueva on their way to Larayan Elementary School, Larayan, Dapitan City. The jeep was driven by James Daniel II then 15 years old and a student of the same school. Allegedly, the latter drove the jeep in a reckless manner and as a result the jeep turned
turtle.Sherwin Carpitanos died as a result of the injuries he sustained from the accident.
ISSUE:
Whether the petitioner is liable for damages for the death of Sherwin Carpitanos.
HELD:
For petitioner to be liable, there must be a finding that the act or omission considered as negligent was the proximate cause of the injury caused because the negligence must have a causal connection to the accident. In this case, the respondents failed to show that the negligence of petitioner was the proximate cause of the death of the victim.
Respondents Daniel spouses and Villanueva admitted that the immediate cause of the accident was not the negligence of petitioner or the reckless driving of James Daniel II, but the detachment of the steering wheel guide of the jeep. Hence, liability for the accident, whether caused by the negligence of the minor driver or mechanical detachment of the steering wheel guide of the jeep, must be pinned on the minor‘s parents primarily. The negligence of petitioner St. Mary‘s Academy was only a remote cause of the accident. Between the remote cause and the injury, there intervened the negligence of the minor‘s parents or the detachment of the steering wheel guide of the jeep. Hence, with the overwhelming evidence presented by petitioner and the respondent Daniel spouses that the accident occurred because of the detachment of the steering wheel guide of the jeep, it is not the school, but the registered owner of the vehicle who shall be held responsible for damages for the death of Sherwin Carpitanos.
Page 18 of 745 SPS. GUANIO v. MAKATI SHANGRI-LA HOTEL
GR No. 190601, February 7 2011 FACTS:
For their wedding reception on July 28, 2001, spouses Luigi M. Guanio and Anna Hernandez-Guanio (petitioners) booked at the Shangri-la Hotel Makati.Prior to the event, Makati Shangri-La Hotel & Resort, Inc. (respondent) scheduled an initial and final food tasting. The parties eventually agreed on a final price ─ P1,150 per person.On July 27, 2001, the parties finalized and signed their contract.
Petitioners claim that during the reception, respondent‘s representatives, Catering Director Bea Marquez and Sales Manager Tessa Alvarez, did not show up despite their assurance that they would; their guests complained of the delay in the service of the dinner; certain items listed in the published menu were unavailable; the hotel‘s waiters were rude and unapologetic when confronted about the delay; and despite Alvarez‘s promise that there would be no charge for the extension of the reception beyond 12:00 midnight, they were billed and paid P8,000 per hour for the three-hour extension of the event up to 4:00 A.M. the next day. They further claim that they brought wine and liquor in accordance with their open bar arrangement, but these were not served to the guests who were forced to pay for their drinks.
Petitioners thus sent a letter-complaint to the Makati Shangri-la Hotel and Resort, Inc.and received an apologetic reply from Krister Svensson, the hotel‘s Executive Assistant Manager in charge of Food and Beverage. They nevertheless filed a complaint for breach of contract and damages before the RTC of Makati City. Respondents averred that it was the increase in number of the unexpected guests that led to the shortage claimed by the petitioners.
The RTC rendered a decision in favor of the plaintiffs and was reversed by the CA, upon appeal, the latter holding that the proximate cause of petitioners‘ injury was an unexpected increase in their guests.
ISSUE:
Whether or not the CA correctly held that the proximate cause of petitioners‘ injury was an unexpected increase in their guests.
HELD:
The Court finds that since petitioners‘ complaint arose from a contract, the doctrine of proximate cause finds no application to it, the latter applicable only to actions for quasi-delicts, not in actions involving breach of contract.
Breach of contract is defined as the failure without legal reason to comply with the terms of a contract. It is also defined as the failure, without legal excuse, to perform any promise which forms the whole or part of the contract. The appellate court, and even the trial court, observed that petitioners were remiss in their obligation to inform respondent of the change in the expected number of guests. The observation is reflected in the records of the case. Petitioners‘ failure to discharge such obligation thus excused respondent from liability for ―any damage or inconvenience‖ occasioned thereby.
Page 19 of 745 TSPIC CORPORATION VS. TSPIC EMPLOYEES UNION
G.R No. 163419. February 13, 2008
FACTS:
TSPI Corporation entered into a Collective Bargaining Agreement with the corporation Union for the increase of salary for the latter‘s members for the year 2000 to 2002 starting from January 2000. thus, the increased in salary was materialized on January 1, 2000. However, on October 6, 2000, the Regional Tripartite Wage and production Board raised daily minimum wage from P 223.50 to P 250.00 starting November 1, 2000. Conformably, the wages of the 17 probationary employees were increased to P250.00 and became regular employees therefore receiving another 10% increase in salary. In January 2001, TSPIC implemented the new wage rates as mandated by the CBA. As a result, the nine employees who were senior to the 17 recently regularized employees, received less wages. On January 19, 2001, TSPIC‘s HRD notified the 24 employees who are private respondents, that due to an error in the automated payroll system, they were overpaid and the overpayment would be deducted from their salaries starting February 2001. The Union on the other hand, asserted that there was no error and the deduction of the alleged overpayment constituted diminution of pay.
ISSUE:
Whether the alleged overpayment constitutes diminution of pay as alleged by the Union.
RULING:
Yes, because it is considered that Collective Bargaining Agreement entered into by unions and their employers are binding upon the parties and be acted in strict compliance therewith. Thus, the CBA in this case is the law between the employers and their employees.
Therefore, there was no overpayment when there was an increase of salary for the members of the union simultaneous with the increasing of minimum wage for workers in the National Capital Region. The CBA should be followed thus, the senior employees who were first promoted as regular employees shall be entitled for the increase in their salaries and the same with lower rank workers.
Page 20 of 745 Regino vs. Pangasinan Colleges of Science and Technology
G.R. No. 156109 November 8, 2004
FACTS:
Petitioner Khristine Rea M. Regino was a first year computer science student of
Pangasinan Colleges of Science and Technology (PCST). Reared in a poor family, Regino went to college mainly through the financial support of her relatives. She enrolled Logic and Statistics subjects under Rachelle Gamurot and Elissa Baladad, respectively as teachers.
In February 2002, PCST held a fund raising campaign dubbed ―The Rave Party and Dance Revolution‖ the proceeds which were to go to the construction of the school‘s tennis and volleyball courts. Each student was required to pay for two tickets at the price of P100.00 each. The project was allegedly implemented by recompensing students who purchased tickets with additional points in their test scores; those who refused to pay were denied the opportunity to take the final examinations.
Financially strapped and prohibited by her religion from attending dance parties and celebration, Regino refused to pay tickets. On March 14 and 15, 2002, the scheduled dates of examinations in Logics and Statistics, the teachers allegedly disallowed her from taking the tests. Petitioner then filed as pauper litigant, a complaint for damages against PCST. She prayed for P500,000.00 as nominal; P500,000.00 as moral and at least P1,000,000.00 as exemplary damages, P250,000.00 as actual damages & cost of litigation and attorney‘s fees.
The Regional Trial Court dismissed the complaint for lack of merit. It ruled that Commission on Higher Education, not the court, has jurisdiction over the controversy.
ISSUES:
Whether or not court has jurisdiction over the controversy.
Whether or not there was a breach of contract and liability of tort.
HELD:
The doctrine of exhaustion of administrative remedies is basic. Court for reasons of law, comity and convenience should not entertain suits unless the available administrative remedies have first been resorted to and the proper authorities have been given the appropriate opportunity to act and correct their alleged errors. Exhaustion of administrative remedies is applicable when there is a competence on the part of the administrative bodies to act upon the matter complained of.
The terms of the school-student contract are defined at the moment of its inception-upon enrolment of the student.
PCST imposed the assailed revenue-raising measure belatedly in the middle of the semester, It exacted the dance party fee as a condition for students in taking the final
examinations and ultimately for recognition of their ability to finish a course. The fee, however, was not part of the school-student contract entered into at the start of the school year.
Wherefore, the petition is hereby granted, and the assailed orders reversed. The trial court is directed to reinstate the complaint and with all deliberate speed, to continue the proceedings in Civil Case No. U-7541. No costs.
Page 21 of 745 PSBA vs. Court of Appeals
G.R. No. 84698, February 4, 1992
FACTS:
A stabbing incident on 30 August 1985 which caused the death of Carlitos Bautista while on the second-floor premises of the Philippine School of Business Administration (PSBA) prompted the parents of the deceased to file suit in the Regional Trial Court of Manila for damages against the said PSBA and its corporate officers. At the time of his death, Carlitos was enrolled in the third year commerce course at the PSBA. It was established that his assailants were not members of the school's academic community but were elements from outside the school. Substantially, the plaintiffs (now private respondents) sought to adjudge them liable for the victim's untimely demise due to their alleged negligence, recklessness and lack of security precautions, means and methods before, during and after the attack on the victim.
Defendants a quo (now petitioners) sought to have the suit dismissed, alleging that since they are presumably sued under Article 2180 of the Civil Code, the complaint states no cause of action against them, as jurisprudence on the subject is to the effect that academic institutions, such as the PSBA, are beyond the ambit of the rule in the afore-stated article.
The respondent trial court, however, overruled petitioners‘ contention and thru an order dated 8 December 1987, denied their motion to dismiss. Said decision of the respondent appellate court was primarily anchored on the law of quasi-delicts, as enunciated in Articles 2176 and 2180 of the Civil Code.
Article 2180, in conjunction with Article 2176 of the Civil Code, establishes the rule of in loco parentis. It had been stressed that the law (Article 2180) plainly provides that the damage should have been caused or inflicted by pupils or students of the educational institution sought to be held liable for the acts of its pupils or students while in its custody. However, this material situation does not exist in the present case for the assailants of Carlitos were not students of the PSBA, for whose acts the school could be made liable.
ISSUE:
Whether or not the appellate court's failure to consider such material facts means the exculpation of the petitioners from liability.
HELD:
It does not necessarily follow. When an academic institution accepts students for
enrollment, there is established a contract between them, resulting in bilateral obligations which both parties are bound to comply with. For its part, the school undertakes to provide the student with an education that would presumably suffice to equip him with the necessary tools and skills to pursue higher education or a profession. On the other hand, the student covenants to abide by the school's academic requirements and observe its rules and regulations.Institutions of learning must also meet the implicit or "built-in" obligation of providing their students with an
atmosphere that promotes or assists in attaining its primary undertaking of imparting knowledge. Certainly, no student can absorb the intricacies of physics or higher mathematics or explore the realm of the arts and other sciences where there looms around the school premises a constant threat to life and limb. Necessarily, the school must ensure that adequate steps are taken to maintain peace and order within the campus premises and to prevent the breakdown thereof. Because the circumstances of the present case evince a contractual relation between the PSBA and Carlitos Bautista, the rules on quasi-delict do not apply.
However, there is, as yet, no finding that the contract between the school and Bautista had been breached thru the former's negligence in providing proper security measures. Even if there be a finding of negligence, the same could give rise generally to a breach of contractual obligation only. Using the test of Cangco, supra, the negligence of the school would not be relevant absent a contract. In fact, that negligence becomes material only because of the contractual relation
between PSBA and Bautista. In other words, a contractual relation is a condition sine qua non to the school's liability. The negligence of the school cannot exist independently of the contract, unless the negligence occurs under the circumstances set out in Article 21 of the Civil Code.
Page 22 of 745 Cosmo Entertainment Management, Inc. vs. La Ville Commercial Corporation
G.R. No. 152801, August 20, 2004 437 SCRA 145
FACTS:
The respondent, La Ville Commercial Corporation, is the registered owner of a parcel of land covered by TCT No. 174250 of the Registry of Deeds of Makati City together with the commercial building thereon situated at the corner of Kalayaan and Neptune Streets in Makati City.
On March 17, 1993, it entered into a Contract of Lease with petitioner Cosmo
Entertainment Management, Inc. over the subject property for a period of seven years with a monthly rental of P250 per square meter of the floor area of the building and a security deposit equivalent to three monthly rentals in the amount of P447, 000.00 to guarantee the faithful compliance of the terms and conditions of the lease agreement. Upon execution of the contract, the petitioner took possession of the subject property.
The petitioner, however, suffered business reverses and was constrained to stop operations in September 1996. Thereafter, the petitioner defaulted in its rental payments. Consequently, the respondent made a demand on the petitioner to vacate the premises as well as to pay the accrued rentals plus interests which, as of January 31, 1997, amounted to P740, 478.91. In reply to the demand, the petitioner averred that its unpaid rentals amounted to P698, 500 only and since it made a security deposit of P419, 100 with the respondent, the said amount should be applied to the unpaid rentals; hence, the outstanding accounts payable would only be P279, 400. The respondent requested that the interest charges be waived and it be given time to find a solution to its financial problems.
After negotiations between the parties failed, the respondent, on May 27, 1997, reiterated its demand on the petitioner to pay the unpaid rentals as well as to vacate and surrender the premises to the respondent. When the petitioner refused to comply with its demand, the respondent filed with the Metropolitan Trial Court of Makati City a complaint for illegal detainer. The petitioner, in its answer to the complaint, raised the defense that, under the contract, it had the right to sublease the premises upon prior written consent by the respondent and payment of transfer fees. However, the respondent, without any justifiable reason, refused to allow the petitioner to sublease the premises.
ISSUE:
Whether or not the petitioner has the right to sublease the premises. HELD:
The Court is convinced that the findings and conclusions of the court a quo and the RTC are in order. These courts uniformly found that, under the terms of the contract of lease, the respondent, as the owner-lessor of the premises, had reserved its right to approve the sublease of the same. The petitioner, having voluntarily given its consent thereto, was bound by this
stipulation. And, having failed to pay the monthly rentals, the petitioner is deemed to have violated the terms of the contract, warranting its ejectment from the leased premises. The Court finds no cogent reason to depart from this factual disquisition of the courts below in view of the rule that findings of facts of the trial courts are, as a general rule, binding on this Court.
Page 23 of 745 Ayala Corporation vs. Rosa Diana Realty
G.R. No. 134284, December 1, 2000 346 SCRA 663
FACTS:
Petitioner Ayala Corporation (Ayala) was the registered owner of a parcel of land located in Alfaro Street, Salcedo Village, Makati City with an area of 840 square meters more or less and covered by TCT no. 233435 of the Register of Deeds of Rizal.
On April 20, 1976, Ayala sold the lot to Manuel Sy married to Vilma Po and Sy Ka Kieng married to Rosa Chan. The Deed of Sale executed between Ayala and the buyers contained Special Conditions of Sale and Deed Restrictions. Manuel Sy and Sy Ka Kieng failed to construct the building in violation of the Special Conditions of Sale. Notwithstanding the violation, Manuel Sy and Sy Ka Kieng were able to sell the lot to respondent Rosa-Diana Realty and Development Corp. with Ayala’s approval. As a consideration for Ayala to release the certificate of title of the subject property, Rosa-Diana, executed an undertaking promising to abide by said Special Condition of Sale executed between Ayala and the original vendees. Upon the submission of the undertaking, together with the building plans for a condominium project, known as the Peak, Ayala released title to the lot, thereby enabling Rosa-Diana to register the Deed of Sale on its favor and obtain certificate of Title in its name.
Thereafter, Rosa-Diana submitted to the building official of Makati another set of building plans which were substantially different from those that it earlier submitted to Ayala for approval. During the construction of Rosa-Diana’s condominium project, Ayala filed an action with the RTC of Makati for specific performance with application for a writ of preliminary injunction seeking to compel the latter to comply with the contractual obligations under the Deed of Restriction annotated on the title as well as with the building plans it submitted to the latter. In the alternative, Ayala prayed for rescission of the sale of the subject lot to Rosa-Diana Realty. The lower court denied Ayala’s prayer for injunctive relief; thus, enabling Rosa-Diana to complete the construction of the building. Ayala tried to cause the annotation a notice of lis pendens on Rosa-Diana’s title but the Register of Deed of Makati refused registration on the ground that the case pending before the trial court being an action for specific performance and or rescission is an action in personam which does not involve the title, use or possession of the property. The Land Registration Authority reversed the ruling of the Register of Deeds. The decision of the LRA, however, was reversed by the CA.
ISSUE:
The issue is whether or not respondent Rosa-Diana has the obligation to enforce the Deed of Restrictions contained in the contract it entered with Ayala.
HELD:
Contractual obligations between parties have the force of law between them and absent any allegation that the same are contrary to law, morals, good customs, public order or public policy, they must be complied with in good faith. Hence, Article 1159 of the new Civil Code provides “obligations arising from contracts have the force of law between the contracting parties and should be complied with in good faith.
Hence, respondent Rosa-Diana has the obligation to enforce the Deed of Restrictions contained in the contract it entered with Ayala.
Page 24 of 745 Bricktown Development vs. Amor Tierra Development
G.R. No. 112182, December 12, 1994 239 SCRA 126
FACTS:
On 31 March 1981, petitioner Bricktown Development Corporation executed two contracts to sell in favor of petitioner Tierra Corp. covering a total of 96 residential lots situated at the Multinational Village Subdivision, La Huerta, Parañaque, Metro Manila. The total price of P21,639,875.00 was stipulated to be paid by private respondent in such amount and maturity dates, as follows; P2,200,000.00 on March 31, 1981, P3, 209, 965.75 on 30 June 1981, P4, 729, 906.25 on 31 December 1981, and the balance of P11, 500,000.00 to be paid by means of an assumption by private respondent of petitioner’s corporation’s mortgage liability to the Philippine Saving Bank or, alternatively, to be made payable in cash. On even date 31 March 1981, the parties executed a supplemental agreement providing that private respondent would additionally pay to petitioner the amount of P55, 364.68 or 21% interest on the balance of downpayment for the period from 31 March to 30 June 1981 and of P390, 367.37 representing interest paid by petitioner corporation to the Philippine Savings Bank in updating the bank loan for the period from 1 February to 31 March 1981.
On 12 October 1981, Petitioner Corporation sent notice of cancellation of contract to private respondent on account of the latter’s continued failure to pay the installment due 30 June 1981 and interest on the unpaid balance of the stipulated initial payment.
On 26 September 1983, private respondent demanded the refund of its various payment to petitioner amounting to P2, 445, 497.71. However, petitioner did not heed the demand, so private respondent filed an action with the court a quo.
The lower court ruled in favor of private respondent and it was affirmed in toto by the appellate court.
ISSUE:
The issue is whether or not the contracts to sell were validly rescinded or cancelled by Petitioner Corporation.
HELD:
The contracts to sell were validly rescinded by Petitioner Corporation. In fine, while we must conclude that petitioner corporation still acted within its legal right to declare the contracts to sell rescinded or cancelled, considering, nevertheless, the peculiar circumstances found to be extant by the trial court, confirmed by the Court of Appeals, it would be unconscionable to likewise sanction the forfeiture by petitioner corporation of payments made to it by private respondent. Indeed, the Court has intimated that the relationship between parties in any contract must always be characterized and punctuated by good faith and fair dealing. Judging from what the court below have said, petitioners did fall well behind that standard. The Court does not find it equitable to adjudge any interest payment by petitioners on the amount to be thus refunded computed from judicial demand, for indeed, private respondent should not be allowed to totally free itself from its own breach.
Page 25 of 745 Pilipinas Hino vs. Court of Appeals
G.R. No. 126570, August 18, 2000 338 SCRA 355
FACTS:
The plaintiff, Pilipinas Hino, Inc., is a corporation duly organized and existing under the laws of the Philippines, with office address at PMI Building EDSA, Mandaluyong, Metro Manila, The plaintiff filed an action for sum of money and damages against the defendants.
The contract of lease was entered into between herein parties, under which the defendants, as lessor, leased real property located at Bigaa, Balagtas Bulacan, to plaintiff for a term of 2 years. Pursuant to the contract of lease, plaintiff-lessee deposited with the defendants-lessor the amount of P400, 000.00 to answer for repairs and damages that may be caused by the lessee on the leased premises during the period of the lease. After the expiration of the lease contract, the plaintiff and defendants made a joint inspection of the premises to determine the extent of the damages thereon. Both agreed that the cost of repairs would amount to P60, 000.00 and that the amount of P340, 000.00 shall then be returned by the defendants to plaintiff. However, defendants returned to plaintiff only the amount of P200, 000.00 still having a balance of P140, 000.00.
On August 10, 1990, plaintiff and defendants entered into a contract to sell denominated as a memorandum of agreement to sell whereby the latter agreed to sell to the former the leased property subject of this suit in the amount of P45, 611,000.00. The aforesaid memorandum of agreement to sell granted the owner (defendants) the option to rescind the same upon failure of the buyer (plaintiff) to pay any of the six installments with the corresponding obligation to return to the buyer any amount paid by the buyer in excess of the down payment. Pursuant to the said memorandum of agreement, plaintiff remitted on August 10, 1990 to the defendants the amount of P1, 811,000.00 as down payment. Subsequently, plaintiff paid the first and second installments in the amount of P1, 800,000.00 and P5, 250,000.00 with the total amount of P7, 050,000.00. Unfortunately, plaintiff failed to pay the third and subsequent installments; and thereupon, defendants decided to, and in fact did rescind and terminate, the contract promised to return to the plaintiff all the amounts paid in excess of the down payment after deducting the interest due from the third to sixth installments, inclusive.
The trial court rendered a decision ruling in favor of respondents Reyes, et. al. Petitioner Pilipinas Hino elevated the case to the Court of Appeals. The appellate court, however, sustained the findings of the trial court.
ISSUE:
Whether or not the private respondent has the right to retain the interest due for the unpaid installments, despite the fact that the respondent has exercised his option to rescind the memorandum of agreement.
HELD:
In justifying the withholding of the amount of P924, 000.00 representing the interest due of the unpaid installments, both the trial and the appellate court relied on paragraph 6 of the memorandum of agreement entered into by the parties. However, both courts failed to consider paragraph 9 contained in the same memorandum of agreement which provides in very clear terms that “when the owners exercise their option to forfeit the down payment, they shall return to the buyer any amount paid by the buyer in excess of the down payment with no obligation to pay interest thereon.” This should include all amounts paid, including interest. Had it been the intention of the parties to exclude the interest from the amount to be returned to the buyer in the event that the owner exercises its option to terminate or rescind the agreement, then such should have been stated in categorical terms. Thus, there is no basis in the conclusion reached by the lower courts that “interest paid” should not be returned to the buyer. Moreever, the private respondents’ withholding of the amount corresponding to the interest violated the specific and clear stipulation in paragraph 9 of the memorandum of agreement that except for the down payment, all amounts paid shall be returned to the buyer “with no obligation to pay interest thereon.” The parties are bound by their agreement. Thus Article 1159 of the Civil Code expressly provides: Obligation arising from contracts have
Page 26 of 745 PHILIPPINE REALTY and HOLDING CORP. v. LEY CONST. and DEV. CORP.
G. R. No. 165548, June 13, 2011 FACTS:
Ley Construction and Development Corporation (LCDC) was the project contractor for the construction of several buildings for Philippine Realty & Holdings Corporation (PRHC), the project owner. Engineer Dennis Abcede (Abcede) was the project construction manager of PRHC, while Joselito Santos (Santos) was its general manager and vice-president for operations.
Sometime between April 1988 and October 1989, the two corporations entered into four major construction projects, as evidenced by four duly notarized "construction agreements." These were the four construction projects the parties entered into involving a Project 1, Project 2, Project 3 (all of which involve the Alexandra buildings) and a Tektite Building. LCDC
committed itself to the construction of the buildings needed by PRHC, which in turn committed itself to pay the contract price agreed upon. In the course of the construction of the Tektite Building, it became evident to both parties that LCDC would not be able to finish the project within the agreed period. LCDC explained that the unanticipated delay in construction was due mainly to the sudden, unexpected hike in the prices of cement and other construction materials. Both parties agreed to enter into another agreement. Abcede asked LCDC to advance the amount necessary to complete construction. Its president acceded, on the absolute condition that it be allowed to escalate the contract price. Abcede replied that he would take this matter up with the board of directors of PRHC.The board of directors turned down the request for an escalation agreement. However, On 9 August 1991 Abcede sent a formal letter to LCDC, asking for its conformity, to the effect that should it infuse P36 million into the project, a contract price escalation for the same amount would be granted in its favor by PRHC.
LCDC then proceeded with the construction of the Tektite Building, expending the entire amount necessary to complete the project. From August to December 1991, it infused amounts totaling P 38,248,463.92. These amounts were not deposited into the joint account of LCDC and PRHC, but paid directly to the suppliers upon the instruction of Santos.LCDC religiously
submitted to PRHC monthly reports that contained the amounts of infusion it made from the period August 1991 to December 1991. PRHC never replied to any of these monthly reports.On 20 January 1992, LCDC wrote a letter addressed to Santos stating that it had already complied with its commitment as of 31 December 1991 and was requesting the release of P 2,248,463.92.
In a letter dated 18 January 1993, LCDC, through counsel, demanded payment of the agreed escalation price of P 36 million. In its reply on 16 February 1993, PRHC suddenly denied any liability for the escalation price. In the same letter, it claimed that LCDC had incurred 111 days of delay in the construction of the Tektite Building and demanded that the latter pay P 39,326,817.15 as liquidated damages.
ISSUE:
Whether or not LCDC was delayed in the performance of its obligation to construct the buildings for PRHC .
HELD:
The Court held that A subsequent escalation agreement was validly entered into by the parties, but only to the extent of P 36 million. LCDC was able to establish that Abcede and Santos, on behalf of PRHC, had signed the letter-agreement containing the stipulation on the escalation. PRHC does not question the validity of these agreements; it thereby effectively admits that these two individuals had actual authority to sign on its behalf with respect to these construction projects. Thus, the lack of authority on their part should not be used to prejudice it, considering that the two were clothed with apparent authority to execute such agreements. In addition, PRHC is allegedly barred by promissory estoppel from denying the claims of the other corporation.
The Court further held that LCDC is not liable for liquidated damages for delay in the construction of the buildings for PRHC. There is no question that LCDC was not able to fully construct the Tektite Building and Projects 1, 2, and 3 on time. The shortage in supplies and cement may be characterized as force majeure. In the present case, hardware stores did not have enough cement available in their supplies or stocks at the time of the construction in the 1990s.
Page 27 of 745 TITAN-IKEDA VS. PRIMETOWN
G.R No. 158768 February 12, 2008
FACTS:
The respondent Primetown Property Corporation entered into contract weith the petitioner Titan-Ikeda Construction Corporation for the structural works of a 32-storey prime tower. After the construction of the tower, respondent again awarded to the petitioner the amount of P 130,000,000.00 for the tower‘s architectural design and structure. Howevere, in 1994, the respondent entered inot a contract of sale of the tower in favor of the petitioner in a manner called full-swapping. Since the respondent had allegedly constructed almost one third of the project as weel as selling some units to third persons unknown to the petitioner. Integrated Inc. took over the project, thus the petitioner is demanding for the return of its advanced payment in the amount of P2, 000,000.00 as weel as the keys of the unit.
ISSUE:
Whether the petitioner is entitled to damages.
RULING:
No, because in a contract necessarily that there is a meeting of the minds of the parties in which this will be the binding law upon them. Thus, in a reciprocal obligation. Both parties are obliged to perform their obligation simultaneously and in good faith. In this case, petitioner, Titan-Ikeda can not recover damages because it was found out there was no solutio indebiti or mistake in payment in this case since the latter is just entitled to the actual services it rendered to the respondent and thus it is ordered to return the condominium units to the respondent.
