VILLAROEL VS. ESTRADA 71 Phil. 140 (1940) FACTS This was originally an action commenced by the plaintiff (respondent) against the defendant (petitioner) for the purpose of enforcing a contract entered into on August 9, 1903, by virtue of which the defendant undertook to pay to the plaintiff a certain debt which his deceased mother had incurred from the deceased parents of the said plaintiff more than eighteen years ago. It is submitted that this debt had already prescribed. ISSUE Whether or not this action will prosper, considering that the debt incurred by the defendant's mother had already prescribed. HELD: YES RATIO: his action is based on the original obligation contracted by the mother of the defendant, who has already prescribed,but in which the defendant contracted the August 9, 1930 (Exhibito B) by assuming thefulfillment of that obligation, as prescribed. Being the only defendant in the original herderodebtor eligible successor into his inheritance, that debt brought by his mother in law,although it lost its effectiveness by prescription, is now, however, for a moral obligation,that is consideration enough to create and make effective and enforceable obligationvoluntarily contracted its August 9, 1930 in Exhibito B.The rule that a new promise to pay a debt prrescrita must be made by the same personobligated or otherwise legally authorized by it, is not applicable to the present case is notrequired in compliance with the mandatory obligation orignalmente but which would give itvoluntarily assumed this obligation.It confirms the judgment appealed from, with costs against the appellant. IT IS SOORDERED.
Transcript
VILLAROEL VS. ESTRADA71 Phil. 140 (1940)
FACTS
This was originally an action commenced by the plaintiff (respondent) against the defendant (petitioner) for the purpose of enforcing a contract entered into on August 9, 1903, by virtue of which the defendant undertook to pay to the plaintiff a certain debt which his deceased mother had incurred from the deceased parents of the said plaintiff more than eighteen years ago. It is submitted that this debt had already prescribed. ISSUEWhether or not this action will prosper, considering that the debt incurred by the defendant's mother had already prescribed.HELD: YESRATIO: his action is based on the original obligation contracted by the mother of the defendant, who has already prescribed,but in which the defendant contracted the August 9, 1930 (Exhibito B) by assuming thefulfillment of that obligation, as prescribed. Being the only defendant in the original herderodebtor eligible successor into his inheritance, that debt brought by his mother in law,although it lost its effectiveness by prescription, is now, however, for a moral obligation,that is consideration enough to create and make effective and enforceable obligationvoluntarily contracted its August 9, 1930 in Exhibito B.The rule that a new promise to pay a debt prrescrita must be made by the same personobligated or otherwise legally authorized by it, is not applicable to the present case is notrequired in compliance with the mandatory obligation orignalmente but which would give itvoluntarily assumed this obligation.It confirms the judgment appealed from, with costs against the appellant. IT IS SOORDERED.
ANSAY VS NATIONAL DEVELOPMENT COMPANY G.R No. L-13667 April 29, 1960
FACTS:On July 25, 1956, Primitivo Ansay et al filed against the Board of Directors of the National Development Company in the Court of First Instance of Manila a complaint praying for a 20% Christmas bonus for the years 1954 and 1955.Appellants contend that there exists a cause of action in their complaint because their claim rests on moral grounds or what in brief is defined by law as a natural obligation.ISSUE: Whether or not the Christmas bonus is demandable.HELD: No, it is not demandable. Article 1423 of the New Civil Code classifies obligations into civil or natural. "Civil obligations are a right of action to compel their performance. Natural obligations, not being based on positive law but on equity and natural law, do not grant a right of action to enforce their performance, but after voluntary fulfillment by the obligor, they authorize the retention of what has been delivered or rendered by reason thereof".It is thus readily seen that an element of natural obligation before it can be cognizable by the court is voluntary fulfillment by the obligor. Certainly retention can be ordered but only after there has been voluntary performance. But here there has been no voluntary performance. In fact, the court cannot order the performance.At this point, we would like to reiterate what we said in the case of Philippine Education Co. vs. CIR and the Union of Philippine Education Co., Employees (NUL) (92 Phil., 381; 48 Off. Gaz., 5278) —x x x x x x x x xFrom the legal point of view a bonus is not a demandable and enforceable obligation. It is so when it is made a part of the wage or salary compensation.And while it is true that the subsequent case of H. E. Heacock vs. National Labor Union, et al., 95 Phil., 553; 50 Off. Gaz., 4253, we stated that:Even if a bonus is not demandable for not forming part of the wage, salary or compensation of an employee, the same may nevertheless, be granted on equitable consideration as when it was given in the past, though withheld in succeeding two years from low salaried employees due to salary increases.
still the facts in said Heacock case are not the same as in the instant one, and hence the ruling applied in said case cannot be considered in the present action.Premises considered, the order appealed from is hereby affirmed, without pronouncement as to costs.
G.R. No. L-48889 May 11, 1989DEVELOPMENT BANK OF THE PHILIPPINES (DBP), petitioner, vs.THE HONORABLE MIDPAINTAO L. ADIL, Judge of the Second Branch of the Court of First Instance of Iloilo and SPOUSES PATRICIO CONFESOR and JOVITA VILLAFUERTE, respondents. GANCAYCO, J.:NATURE: The present case is a petition for review on certiorari.FACTS: Spouses obtained a loan in 1940. Even after the lapse of 10 years, it remained unpaid. The husband then acknowledged said loan via a promissory note in 1961. Due to their failure to pay the said loan, the creditor bank filed a collection suit in 1970.The lower court ruled in favor of the creditor.The appellate court reversed the trial court.The creditor filed a motion for reconsideration but it was denied.
ISSUE: WON the act of acknowledging the loan after it has prescribed has the force and effect of reviving the enforceability of the said obligation? YES
RATIO: The right to prescription may be waived or renounced. Article 1112 of Civil Code provides: Art. 1112. Persons with capacity to alienate property may renounce prescription already obtained, but not the right to prescribe in the future. Prescription is deemed to have been tacitly renounced when the renunciation results from acts which imply the abandonment of the right acquired.There is no doubt that prescription has set in as to the first promissory note of February 10, 1940. However, when respondent Confesor executed the second promissory note on April 11, 1961 whereby he promised to pay the amount covered by the previous promissory note on or before June 15, 1961, and upon failure to do so, agreed to the foreclosure of the mortgage, said respondent thereby effectively and expressly renounced and waived his right to the prescription of the action covering the first promissory note.
This Court had ruled in a similar case that – ... when a debt is already barred by prescription, it cannot be enforced by the creditor. But a new contract recognizing and assuming the prescribed debt would be valid and enforceable ... . 1Thus, it has been held — Where, therefore, a party acknowledges the correctness of a debt and promises to pay it after the same has prescribed and with full knowledge of the prescription he thereby waives the benefit of prescription. 2 This is not a mere case of acknowledgment of a debt that has prescribed but a new promise to pay the debt. The consideration of the new promissory note is the pre-existing obligation under the first promissory note. The statutory limitation bars the remedy but does not discharge the debt. A new express promise to pay a debt barred ... will take the case from the operation of the statute of limitations as this proceeds upon the ground that as a statutory limitation merely bars the remedy and does not discharge the debt, there is something more than a mere moral obligation to support a promise, to wit a – pre-existing debt which is a sufficient consideration for the new the new promise; upon this sufficient consideration constitutes, in fact, a new cause of action. 3... It is this new promise, either made in express terms or deduced from an acknowledgement as a legal implication, which is to be regarded as reanimating the old promise, or as imparting vitality to the remedy (which by lapse of time had become extinct) and thus enabling the creditor to recover upon his original contract.
G.R. No. L-23749 April 29, 1977FAUSTINO CRUZ, plaintiff-appellant, vs.J. M. TUASON & COMPANY, INC., and GREGORIO ARANETA, INC., defendants-appellees. BARREDO, J.:NATURE: APPEAL from CFI dismissing complaintAppeal from the order dated August 13, 1964 of the Court of First Instance of Quezon City in Civil Case No. Q-7751, Faustino Cruz vs. J.M. Tuason & Co., Inc., and Gregorio Araneta, Inc., dismissing the complaint of appellant Cruz for the recovery of improvements he has made on appellees' land and to compel appellees to convey to him 3,000 square meters of land on three grounds: (1) failure of the complaint to state a cause of action; (2) the cause of action of plaintiff is unenforceable under the Statute of Frauds; and (3) the action of the plaintiff has already prescribed. Plaintiff filed a complaint alleging two causes of action1) Reimbursement for improvements he made on the land of Deudors in which defendant was benefited. 2) Compensation for plaintiff’s services as an intermediary with the Deudors to work for the amicable settlement of Civil Case No. Q-135, notwithstanding his having performed his services, as in fact, a compromise agreement entered into on March 16, 1963 between the Deudors and the defendants was approved by the court, the latter have refused to convey to him the 3,000 square meters of land occupied by him, (a part of the 20 quinones above) which said defendants had promised to do "within ten years from and after date of signing of the compromise agreement", as consideration for his services.Defendants filed a motion to dismiss alleging the following: 1) Failure to state a cause of action; unjust enrichment not applicable2) The compromise agreement is unenforceable3) The action has already prescribedPlaintiff opposed the motion, insisting that Article 2142 of the applicable to his case; that the Statute of Frauds cannot be invoked by defendants, not only because Article 1403 of the Civil Code refers only to "sale of real property or of an interest therein" and not to promises to convey real property like the one supposedly promised by defendants to him, but also
because, he, the plaintiff has already performed his part of the agreement, hence the agreement has already been partly executed and not merely executory within the contemplation of the Statute; and that his action has not prescribed for the reason that defendants had ten years to comply and only after the said ten years did his cause of action accrue, that is, ten years after March 16, 1963, the date of the approval of the compromise agreement, and his complaint was filed on January 24, 1964. The trial court’s ruling:On the issue that the complaint insofar as it claims the reimbursement for the services rendered and expenses incurred by the plaintiff, states no cause of action, the Court is of the opinion that the same is well-founded. It is found that the defendants are not parties to the supposed express contract entered into by and between the plaintiff and the Deudors for the clearing and improvement of the 50 quinones. Furthermore in order that the alleged improvement may be considered a lien or charge on the property, the same should have been made in good faith and under the mistake as to the title. On the issue of statute of fraud, the Court believes that same is applicable to the instant case. The allegation in par. 12 of the complaint states that the defendants promised and agreed to cede, transfer and convey unto the plaintiff the 3,000 square meters of land in consideration of certain services to be rendered then. it is clear that the alleged agreement involves an interest in real property. Under the provisions of See. 2(e) of Article 1403 of the Civil Code, such agreement is not enforceable as it is not in writing and subscribed by the party charged. On the issue of statute of limitations, the Court holds that the plaintiff's action has prescribed. It is alleged in par. 11 of the complaint that, sometime in 1952, the defendants approached the plaintiff to prevail upon the Deudors to enter to a compromise agreement in Civil Case No. Q-135 and allied cases. Furthermore, par. 13 and 14 of the complaint alleged that the plaintiff acted as emissary of both parties in conveying their respective proposals and couter-proposals until the final settlement was effected on March 16, 1953 and approved by Court on April 11, 1953. In the present action, which was instituted on January 24, 1964, the plaintiff is seeking to enforce the supposed agreement entered into between him and the defendants in 1952, which was already prescribed. Plaintiff filed a motion for reconsideration which was denied. Hence this present appeal.
ISSUE: WON the statute of frauds is applicable to cases which are not included in the enumeration set forth in Article 1403 of the civil code? NO
WON the principle of unjust enrichment has application when the claim is based on a contract between the claimant and the predecessor-in-interest of the defendant? noneRATIO: We agree with appellant that the Statute of Frauds was erroneously applied by the trial court. It is elementary that the Statute refers to specific kinds of transactions and that it cannot apply to any that is not enumerated therein. And the only agreements or contracts covered thereby are the following: (1) Those entered into in the name of another person by one who has been given no authority or legal representation, or who has acted beyond his powers; (2) Those do not comply with the Statute of Frauds as set forth in this number, In the following cases an agreement hereafter made shall be unenforceable by action, unless the same, or some note or memorandum thereof, be in writing, and subscribed by the party charged, or by his agent; evidence, therefore, of the agreement cannot be received without the writing, or a secondary evidence of its contents: (a) An agreement that by its terms is not to be performed within a year from the making thereof; (b) A special promise to answer for the debt, default, or miscarriage of another; (c) An agreement made in consideration of marriage, other than a mutual promise to marry;(d) An agreement for the sale of goods, chattels or things in action, at a price not less than five hundred pesos, unless the buyer accept and receive part of such goods and chattels, or the evidences, or some of them of such things in action, or pay at the time some part of the purchase money; but when a sale is made by auction and entry is made by the auctioneer in his sales book, at the time of the sale, of the amount and kind of property sold, terms of sale, price, names of the purchasers and person on whose account the sale is made, it is a sufficient memorandum: (e) An agreement for the leasing for a longer period than one year, or for the sale of real property or of an interest therein: (f) a representation as to the credit of a third person. (3) Those where both parties are incapable of giving consent to a contract. (Art. 1403, civil Code.) In the instant case, what appellant is trying to enforce is the delivery to him of 3,000 square meters of land which he claims defendants promised to do in consideration of his services as mediator or intermediary in effecting a
compromise of the civil action, Civil Case No. 135, between the defendants and the Deudors. In no sense may such alleged contract be considered as being a "sale of real property or of any interest therein." Indeed, not all dealings involving interest in real property come under the Statute. Moreover, appellant's complaint clearly alleges that he has already fulfilled his part of the bargains to induce the Deudors to amicably settle their differences with defendants as, in fact, on March 16, 1963, through his efforts, a compromise agreement between these parties was approved by the court. In other words, the agreement in question has already been partially consummated, and is no longer merely executory. And it is likewise a fundamental principle governing the application of the Statute that the contract in dispute should be purely executory on the part of both parties thereto.We cannot, however, escape taking judicial notice, in relation to the compromise agreement relied upon by appellant, that in several cases We have decided, We have declared the same rescinded and of no effect. In J. M. Tuason & Co., Inc. vs. Bienvenido Sanvictores, 4 SCRA 123, the Court held:It is also worthy of note that the compromise between Deudors and Tuason, upon which Sanvictores predicates his right to buy the lot he occupies, has been validly rescinded and set aside, as recognized by this Court in its decision in G.R. No. L-13768, Deudor vs. Tuason, promulgated on May 30, 1961.We repeated this observation in J.M. Tuason & Co., Inc. vs. Teodosio Macalindong, 6 SCRA 938. Thus, viewed from what would be the ultimate conclusion of appellant's case, We entertain grave doubts as to whether or not he can successfully maintain his alleged cause of action against defendants, considering that the compromise agreement that he invokes did not actually materialize and defendants have not benefited therefrom, not to mention the undisputed fact that, as pointed out by appellees, appellant's other attempt to secure the same 3,000 square meters via the judicial enforcement of the compromise agreement in which they were supposed to be reserved for him has already been repudiated by the courts. As regards appellant's third assignment of error, We hold that the allegations in his complaint do not sufficiently Appellants' reliance. on Article 2142 of Civil Code is misplaced. Said article provides:Certain lawful, voluntary and unilateral acts give rise to the juridical relation of quasi-contract to the end that no one shall be unjustly enriched or benefited at the expense of another.From the very language of this provision, it is obvious that a presumed qauasi-contract cannot emerge as against one party when the subject mater thereof is already covered by an existing contract with another party. Predicated on the principle that no one should be allowed to unjustly enrich
himself at the expense of another, Article 2124 creates the legal fiction of a quasi-contract precisely because of the absence of any actual agreement between the parties concerned. Corollarily, if the one who claims having enriched somebody has done so pursuant to a contract with a third party, his cause of action should be against the latter, who in turn may, if there is any ground therefor, seek relief against the party benefited. It is essential that the act by which the defendant is benefited must have been voluntary and unilateral on the part of the plaintiff. As one distinguished civilian puts it, "The act is voluntary. because the actor in quasi-contracts is not bound by any pre-existing obligation to act. It is unilateral, because it arises from the sole will of the actor who is not previously bound by any reciprocal or bilateral agreement. The reason why the law creates a juridical relations and imposes certain obligation is to prevent a situation where a person is able to benefit or take advantage of such lawful, voluntary and unilateral acts at the expense of said actor." (Ambrosio Padilla, Civil Law, Vol. VI, p. 748, 1969 ed.) In the case at bar, since appellant has a clearer and more direct recourse against the Deudors with whom he had entered into an agreement regarding the improvements and expenditures made by him on the land of appellees. it Cannot be said, in the sense contemplated in Article 2142, that appellees have been enriched at the expense of appellant. X X XWHEREFORE, the appeal of Faustino Cruz in this case is dismissed. No costs.GUTIERREZ HERMANOS vs ORENSE G.R. No. 9188 December 4, 1914
FACTS:
On and before Februaru 14, 1907, Engracio Orense had been the owner of a parcel of land in Guinobatan, Albay.
On February 14, 1907, Jose Duran, a nephew of Orense, sold the property for P1,500 to Gutierrez Hermanos, with Orense’s knowledge and consent, executed before a notary a public instrument. The said public instrument contained a provision giving Duran the right to repurchase it for the same price within a period of four years from the date of the said instrument.
Orense continued occupying the land by virtue of a contract of lease.
After the lapse of four years, Gutierrez asked Orense to deliver the property to the company and to pay rentals for the use of the property.
Orense refused to do so. He claimed that the sale was void because it was done without his authority and that he did not authorize his nephew to enter into such contract.
During trial, Orense was presented as witness of the defense. He states that the sale was done with his knowledge and consent. Because of such testimony, it was ascertained that he did give his nephew, Duran, authority to convey the land. Duran was acquitted of criminal charges and the company demanded that Orense execute the proper deed of conveyance of the property.
ISSUE: Whether or not Orense is bound by Duran’s act of selling the former’s property
HELD: It having been proven at the trial that he gave his consent to the said sale, it follows that the defendant conferred verbal, or at least implied, power of agency upon his nephew Duran, who accepted it in the same way by selling the said property. The principal must therefore fulfill all the obligations contracted by the agent, who acted within the scope of his authority. (Civil Code, arts. 1709, 1710 and 1727.)
Even should it be held that the said consent was granted subsequently to the sale, it is unquestionable that the defendant, the owner of the property, approved the action of his nephew, who in this case acted as the manager of his uncle's business, and Orense'r ratification produced the effect of an express authorization to make the said sale. (Civil Code, arts. 1888 and 1892.)
Article 1259 of the Civil Code prescribes: "No one can contract in the name of another without being authorized by him or without his legal representation according to law.
A contract executed in the name of another by one who has neither his authorization nor legal representation shall be void, unless it should be ratified by the person in whose name it was executed before being revoked by the other contracting party.
The sworn statement made by the defendant, Orense, while testifying as a witness at the trial of Duran for estafa, virtually confirms and ratifies the sale of his property effected by his nephew, Duran, and, pursuant to article 1313 of the Civil Code, remedies all defects which the contract may have contained from the moment of its execution.
The sale of the said property made by Duran to Gutierrez Hermanos was indeed null and void in the beginning, but afterwards became perfectly valid and cured of the defect of nullity it bore at its execution by the confirmation solemnly made by the said owner upon his stating under oath to the judge that he himself consented to his nephew Jose Duran's making the said sale. Moreover, pursuant to article 1309 of the Code, the right of action for nullification that could have been brought became legally extinguished from the moment the contract was validly confirmed and ratified, and, in the present case, it is unquestionable that the defendant did confirm the said contract of sale and consent to its execution.
On the testimony given by Engacio Orense at the trial of Duran for estafa, the latter was acquitted, and it would not be just that the said testimony, expressive of his consent to the sale of his property, which determined the acquittal of his nephew, Jose Duran, who then acted as his business manager, and which testimony wiped out the deception that in the beginning appeared to have been practiced by the said Duran, should not now serve in passing upon the conduct of Engracio Orense in relation to the firm of Gutierrez Hermanos in order to prove his consent to the sale of his property, for, had it not been for the consent admitted by the defendant Orense, the plaintiff would have been the victim of estafa.
If the defendant Orense acknowledged and admitted under oath that he had consented to Jose Duran's selling the property in litigation to Gutierrez Hermanos, it is not just nor is it permissible for him afterward to deny that admission, to the prejudice of the purchaser, who gave P1,500 for the said property.
The contract of sale of the said property contained in the notarial instrument of February 14, 1907, is alleged to be invalid, null and void under the provisions of paragraph 5 of section 335 of the Code of Civil Procedure,
because the authority which Orense may have given to Duran to make the said contract of sale is not shown to have been in writing and signed by Orense, but the record discloses satisfactory and conclusive proof that the defendant Orense gave his consent to the contract of sale executed in a public instrument by his nephew Jose Duran. Such consent was proven in a criminal action by the sworn testimony of the principal and presented in this civil suit by other sworn testimony of the same principal and by other evidence to which the defendant made no objection. Therefore the principal is bound to abide by the consequences of his agency as though it had actually been given in writing (Conlu vs. Araneta and Guanko, 15 Phil. Rep., 387; Gallemit vs. Tabiliran, 20 Phil. Rep., 241; Kuenzle & Streiff vs. Jiongco, 22 Phil. Rep., 110.)
The repeated and successive statements made by the defendant Orense in two actions, wherein he affirmed that he had given his consent to the sale of his property, meet the requirements of the law and legally excuse the lack of written authority, and, as they are a full ratification of the acts executed by his nephew Jose Duran, they produce the effects of an express power of agency.
The judgment appealed from in harmony with the law and the merits of the case, and the errors assigned thereto have been duly refuted by the foregoing considerations, so it should be affirmed.
The judgment appealed from is hereby affirmed, with the costs against the appellant.
Adille vs CA
Facts:
Felisa Alzul owned a certain property in Albay. She was married twice in her life time. First with Bernabe Adille, with whom she begot a son, Rustico Adille. Second with Procopio Asejo, with whom she begot Emeteria, Teodorica, Domingo, Josefa, and Santiago. She sold said property in pacto de retro to 3rd persons but she died before the redemption period expired. Rustico, representing himself as the only heir and child of Felisa, repurchased the said property and secured a title in his own name. His siblings then filed a case for partition on the basis that Rustico was only a trustee on an implied trust when he redeemed the property.
ISSUE:
The petition raises a purely legal issue: May a co-owner acquire exclusive ownership over the property held in common?
Essentially, it is the petitioner's contention that the property subject of dispute devolved upon him upon the failure of his co-heirs to join him in its redemption within the period required by law. He relies on the provisions of Article 1515 of the old Civil Article 1613 of the present Code, giving the vendee a retro the right to demand redemption of the entire property.
ISSUE:
Whether or not a co-owner may acquire exclusive ownership over the property held in common. NO
Whether or nor Rustico had constituted himself a negotiorum gestor. YES
RATIO: The right of repurchase may be exercised by a co-owner with aspect to his share alone. 5 While the records show that the petitioner redeemed the property in its entirety, shouldering the expenses therefor, that did not make him the owner of all of it. In other words, it did not put to end the existing state of co-ownership.
Necessary expenses may be incurred by one co-owner, subject to his right to collect reimbursement from the remaining co-owners. 6 There is no doubt that redemption of property entails a necessary expense. Under the Civil Code:
ART. 488. Each co-owner shall have a right to compel the other co-owners to contribute to the expenses of preservation of the thing or right owned in common and to the taxes. Any one of the latter may exempt himself from this obligation by renouncing so much of his undivided interest as may be equivalent to his share of the expenses and taxes. No such waiver shall be made if it is prejudicial to the co-ownership.
The result is that the property remains to be in a condition of co-ownership. While a vendee a retro, under Article 1613 of the Code, "may not be compelled to consent to a partial redemption," the redemption by one co-heir or co-owner of the property in its totality does not vest in him ownership over it. Failure on the part of all the co-owners to redeem it entitles the vendee a retro to retain the property and consolidate title thereto in his name. 7 But the provision does not give to the redeeming co-owner the right to the entire property. It does not provide for a mode of terminating a co-ownership.
Neither does the fact that the petitioner had succeeded in securing title over the parcel in his name terminate the existing co-ownership. While his half-brothers and sisters are, as we said, liable to him for reimbursement as and for their shares in redemption expenses, he cannot claim exclusive right to the property owned in common. Registration of property is not a means of acquiring ownership. It operates as a mere notice of existing title, that is, if there is one.
The petitioner must then be said to be a trustee of the property on behalf of the private respondents. The Civil Code states:
ART. 1456. If property is acquired through mistake or fraud, the person obtaining it is, by force of law, considered a trustee of an implied trust for the benefit of the person from whom the property comes.
We agree with the respondent Court of Appeals that fraud attended the registration of the property. The petitioner's pretension that he was the sole heir to the land in the affidavit of extrajudicial settlement he executed preliminary to the registration thereof betrays a clear effort on his part to defraud his brothers and sisters and to exercise sole dominion over the property. The aforequoted provision therefore applies.
It is the view of the respondent Court that the petitioner, in taking over the property, did so either on behalf of his co-heirs, in which event, he had constituted himself a negotiorum gestor under Article 2144 of the Civil Code,
or for his exclusive benefit, in which case, he is guilty of fraud, and must act as trustee, the private respondents being the beneficiaries, under the Article 1456. The evidence, of course, points to the second alternative the petitioner having asserted claims of exclusive ownership over the property and having acted in fraud of his co-heirs. He cannot therefore be said to have assume the mere management of the property abandoned by his co-heirs, the situation Article 2144 of the Code contemplates. In any case, as the respondent Court itself affirms, the result would be the same whether it is one or the other. The petitioner would remain liable to the Private respondents, his co-heirs.
This Court is not unaware of the well-established principle that prescription bars any demand on property (owned in common) held by another (co-owner) following the required number of years. In that event, the party in possession acquires title to the property and the state of co-ownership is ended . 8 In the case at bar, the property was registered in 1955 by the petitioner, solely in his name, while the claim of the private respondents was presented in 1974. Has prescription then, set in?
We hold in the negative. Prescription, as a mode of terminating a relation of co-ownership, must have been preceded by repudiation (of the co-ownership). The act of repudiation, in turn is subject to certain conditions: (1) a co-owner repudiates the co-ownership; (2) such an act of repudiation is clearly made known to the other co-owners; (3) the evidence thereon is clear and conclusive, and (4) he has been in possession through open, continuous, exclusive, and notorious possession of the property for the period required by law. 9
The instant case shows that the petitioner had not complied with these requisites. We are not convinced that he had repudiated the co-ownership; on the contrary, he had deliberately kept the private respondents in the dark by feigning sole heirship over the estate under dispute. He cannot therefore be said to have "made known" his efforts to deny the co-ownership. Moreover, one of the private respondents, Emeteria Asejo, is occupying a portion of the land up to the present, yet, the petitioner has not taken pains to eject her therefrom. As a matter of fact, he sought to recover possession of that portion Emeteria is occupying only as a counterclaim, and only after the private respondents had first sought judicial relief.
It is true that registration under the Torrens system is constructive notice of title, 10 but it has likewise been our holding that the Torrens title does not
furnish a shield for fraud. 11 It is therefore no argument to say that the act of registration is equivalent to notice of repudiation, assuming there was one, notwithstanding the long-standing rule that registration operates as a universal notice of title.
For the same reason, we cannot dismiss the private respondents' claims commenced in 1974 over the estate registered in 1955. While actions to enforce a constructive trust prescribes in ten years, 12 reckoned from the date of the registration of the property, 13 we, as we said, are not prepared to count the period from such a date in this case. We note the petitioner's sub rosa efforts to get hold of the property exclusively for himself beginning with his fraudulent misrepresentation in his unilateral affidavit of extrajudicial settlement that he is "the only heir and child of his mother Feliza with the consequence that he was able to secure title in his name also." 14 Accordingly, we hold that the right of the private respondents commenced from the time they actually discovered the petitioner's act of defraudation. 15 According to the respondent Court of Appeals, they "came to know [of it] apparently only during the progress of the litigation." 16 Hence, prescription is not a bar.
Moreover, and as a rule, prescription is an affirmative defense that must be pleaded either in a motion to dismiss or in the answer otherwise it is deemed waived, 17 and here, the petitioner never raised that defense. 18 There are recognized exceptions to this rule, but the petitioner has not shown why they apply.
WHEREFORE, there being no reversible error committed by the respondent Court of Appeals, the petition is DENIED. The Decision sought to be reviewed is hereby AFFIRMED in toto. No pronouncement as to costs.
SO ORDERED,
ANDRES VS MANTRUST G.R. NO.
82670 SEPTEMBER 15, 1989
FACTS:
Andres, using the business name “Irene’s Wearing Apparel” was engaged in the manufacture of ladies garments, children’s wear, men’s apparel and linens for local and foreign buyers. Among its foreign buyers was Facts of the United States.
Sometime in August 1980, Facts instructed the First National State Bank (FNSB) of New Jersey to transfer $10,000 to Irene’s Wearing Apparel via Philippine National Bank (PNB) Sta. Cruz, Manila branch. FNSB instructed Manufacturers Hanover and Trust Corporation (Mantrust) to effect the transfer by charging the amount to the account of FNSB with private respondent.
After Mantrust effected the transfer, the payment was not effected immediately because the payee designated in the telex was only “Wearing Apparel.” Private respondent sent PNB another telex stating that the payment was to be made to “Irene’s Wearing Apparel.”
On August 28, 1980, petitioner received the remittance of $10,000.
After learning about the delay, Facets informed FNSB about the situation. Facts, unaware that petitioner had already received the remittance, informed private respondent and amended its instruction y asking it to effect the payment to Philippine Commercial and Industrial Bank (PCIB) instead of PNB.
Private respondent, also unaware that petitioner had already received the remittance, instructed PCIB to pay $10,000 to petitioner. Hence, petitioner received another $10,000 which was charged again to the account of Facets with FNSB.
FNSB discovered that private respondent had made a duplication of remittance. Private respondent asked petitioner to return the second remittance of $10,000 but the latter refused to do so contending that the doctrine of solution indebiti does not apply because there was negligence on the part of the respondents and that they were not unjustly enriched since Facets still has a balance of $49,324.
ISSUE: Whether or not the private respondent has the right to recover the second $10,000 remittance it had delivered to petitioner
HELD: Yes.
The resolution of this issue would hinge on the applicability of Art. 2154 of the New Civil Code which provides that:
Art. 2154. If something received when there is no right to demand it, and it was unduly delivered through mistake, the obligation to return it arises.
X X X
For this article to apply the following requisites must concur: "(1) that he who paid was not under obligation to do so; and, (2) that payment was made by reason of an essential mistake of fact" [City of Cebu v. Piccio, 110 Phil. 558, 563 (1960)].
It is undisputed that private respondent delivered the second $10,000.00 remittance. However, petitioner contends that the doctrine of solutio indebiti, does not apply because its requisites are absent.
First, it is argued that petitioner had the right to demand and therefore to retain the second $10,000.00 remittance. It is alleged that even after the two $10,000.00 remittances are credited to petitioner's receivables from FACETS, the latter allegedly still had a balance of $49,324.00. Hence, it is argued that the last $10,000.00 remittance being in payment of a pre-existing debt, petitioner was not thereby unjustly enriched.
The contention is without merit.
The contract of petitioner, as regards the sale of garments and other textile products, was with FACETS. It was the latter and not private respondent which was indebted to petitioner. On the other hand, the contract for the transmittal of dollars from the United States to petitioner was entered into by private respondent with FNSB. Petitioner, although named as the payee was not privy to the contract of remittance of dollars. Neither was private respondent a party to the contract of sale between petitioner and FACETS. There being no contractual relation between them, petitioner has no right to apply the second $10,000.00 remittance delivered by mistake by private respondent to the outstanding account of FACETS.
Petitioner next contends that the payment by respondent bank of the second $10,000.00 remittance was not made by mistake but was the result of negligence of its employees.
X X X There was a mistake, not negligence, in the second remittance. It was evident by the fact that both remittances have the same reference invoice number. X X X
Finally, in her attempt to defeat private respondent's claim, petitioner makes much of the fact that from the time the second $10,000.00 remittance was made, five hundred and ten days had elapsed before private respondent demanded the return thereof. Needless to say, private respondent instituted the complaint for recovery of the second $10,000.00 remittance well within the six years prescriptive period for actions based upon a quasi-contract [Art. 1145 of the New Civil Code].
WHEREFORE, the petition is DENIED and the decision of the Court of Appeals is hereby AFFIRMED.
SO ORDERED.
PUYAT & SONS INC vs CITY OF MANILA G.R. No. L-17447 April 30, 1963
FACTS:
Plaintiff Gonzalo Puyat & Sons Inc is engaged in the business of manufacturing and selling all kinds of furniture.
Acting pursuant to an ordinance, the defendant City Treasurer of Manila assessed from plaintiff retail dealer’s tax the sales of furniture manufactured and sold by it and its factory site.
All assessments were paid by plaintiff without protest in the erroneous belief that it was liable thereof not knowing that pursuant to an ordinance, it is exempt from the payment of taxes being a manufacturer of various kinds of furniture.
After learning about the ordinance, plaintiff filed with defendant City Treasurer of Manila a formal request for refund of the retail dealer’s taxes unduly paid.
The City Treasurer, however, denied the said request for refund.
ISSUE: Whether or not the defendant is obliged to refund the amount which the plaintiff paid
HELD: Yes
RATIO: Appellants do not dispute the fact that appellee-companyis exempted from the payment of the tax in question.This is manifest from the reply of appellant City Treasurer stating that sales of manufactured products at the factory site are not taxable either under the Wholesalers Ordinance or under the Retailers' Ordinance. With this admission, it would seem clear that the taxes collected from appellee were paid, thru an error or mistake, which places said act of payment within the pale of the new Civil Code provision on solutio indebiti. The appellant City of Manila, at the very start, notwithstanding the Ordinance imposing the Retailer's Tax, had no right to demand payment thereof..
"If something is received when there is no right to demand it, and it was unduly delivered through mistake, the obligationto retun it arises" (Art. 2154, NCC)..
Appelle categorically stated that the payment was not voluntarily made, (a fact found also by the lower court),but on the erronoues belief, that they
were due. Under this circumstance, the amount paid, even without protest is recoverable. "If the payer was in doubt whether the debt was due, he may recover if he proves that it was not due" (Art. 2156, NCC). Appellee had duly proved that taxes were not lawfully due. There is, therefore, no doubt that the provisions of solutio indebtiti, the new Civil Code, apply to the admitted facts of the case..
With all, appellant quoted Manresa as saying: "x x x De la misma opinion son el Sr. Sanchez Roman y el Sr. Galcon, et cual afirma que si la paga se hizo por error de derecho, ni existe el cuasi-contrato ni esta obligado a la restitucion el que cobro, aunque no se debiera lo que se pago" (Manresa, Tomo 12, paginas 611-612). This opinion, however, has already lost its persuasiveness, in view of the provisions of the Civil Code, recognizing "error de derecho" as a basis for the quasi-contract, of solutio indebiti. .
"Payment by reason of a mistake in the contruction or application of a doubtful or difficult question of law may come within the scope of the preceding article" (Art. 21555)..
There is no gainsaying the fact that the payments made by appellee was due to a mistake in the construction of a doubtful question of law. The reason underlying similar provisions, as applied to illegal taxation, in the United States, is expressed in the case of Newport v. Ringo, 37 Ky. 635, 636; 10 S.W. 2, in the following manner:.
"It is too well settled in this state to need the citation of authority that if money be paid through a clear mistake of law or fact, essentially affecting the rights of the parties, and which in law or conscience was not payable, and should not be retained by the party receiving it, it may be recovered. Both law and sound morality so dictate. Especially should this be the rule as to illegal taxation. The taxpayer has no voice in the imposition of the burden. He has the right to presume that the taxing power has been lawfully exercised. He should not be required to know more than those in authority over him, nor should he suffer loss by complying with what he bona fide believe to be his duty as a good citizen. Upon the contrary, he should be promoted to its ready performance by refunding to him any legal exaction paid by him in ignorance of its illegality; and, certainly, in such a case, if be subject to a penalty for nonpayment, his compliance under belief of its legality, and without awaitinga resort to judicial proceedings should not be regrded in law as so far voluntary as to affect his right of recovery.".
"Every person who through an act or performance by another, or any other means, acquires or comes into possession of something at the expense of the latter without just or legal grounds, shall return the same to him"(Art. 22, Civil Code). It would seems unedifying for the government, (here the City of Manila), that knowing it has no right at all to collect or to receive money for alleged taxes paid by mistake, it would be reluctant to return the same. No one should enrich itself unjustly at the expense of another (Art. 2125, Civil Code).
X X X
The decision appealed from is affirmed, in all other respects. No costs. .
SALUDAGA vs. FAR EASTERN UNIVERSITY
G.R. No. 179337 April 30, 2008
Facts:
Petitioner Joseph Saludaga was a sophomore law student of respondent Far Eastern University when he was shot by Alejandro Rosete, one of the security guards on duty at the school premises on August 18, 1996. Rosete was brought to the police station where he explained that the shooting was accidental. He was eventually released considering that no formal complaint was filed against him.
Respondents, in turn, filed a Third-Party Complaint against Galaxy Development and Management Corporation (Galaxy), the agency contracted by respondent FEU to provide security services within its premises and Mariano D. Imperial (Galaxy’s President), to indemnify them for whatever would be adjudged in favor of petitioner.
Petitioner is suing respondents for damages based on the alleged breach of student-school contract for a safe and secure environment and an atmosphere conducive to learning.
Issue:
WON FEU was not negligent and such shooting was tantamount to a caso fortuito? NO, it was negligent and such is not a fortuitous case.
Held:
In Philippine School of Business Administration v. Court of Appeals,13 we held that:
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 when bullets are flying or grenades exploding in the air or 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.14
It is undisputed that petitioner was enrolled as a sophomore law student in respondent FEU. As such, there was created a contractual obligation between the two parties. On petitioner's part, he was obliged to comply with the rules and regulations of the school. On the other hand, respondent FEU, as a learning institution is mandated to impart knowledge and equip its students with the necessary skills to pursue higher education or a profession. At the same time, it is obliged to ensure and take adequate steps to maintain peace and order within the campus.
It is settled that in culpa contractual, the mere proof of the existence of the contract and the failure of its compliance justify, prima facie, a corresponding right of relief.15 In the instant case, we find that, when petitioner was shot inside the campus by no less the security guard who was hired to maintain peace and secure the premises, there is a prima facie showing that respondents failed to comply with its obligation to provide a safe and secure environment to its students.
In order to avoid liability, however, respondents aver that the shooting incident was a fortuitous event because they could not have reasonably foreseen nor avoided the accident caused by Rosete as he was not their employee;16 and that they complied with their obligation to ensure a safe learning environment for their students by having exercised due diligence in selecting the security services of Galaxy.
After a thorough review of the records, we find that respondents failed to discharge the burden of proving that they exercised due diligence in providing a safe learning environment for their students. They failed to prove that they ensured that the guards assigned in the campus met the requirements stipulated in the Security Service Agreement. Indeed, certain documents about Galaxy were presented during trial; however, no evidence as to the qualifications of Rosete as a security guard for the university was offered.
Respondents also failed to show that they undertook steps to ascertain and confirm that the security guards assigned to them actually possess the
qualifications required in the Security Service Agreement. It was not proven that they examined the clearances, psychiatric test results, 201 files, and other vital documents enumerated in its contract with Galaxy. Total reliance on the security agency about these matters or failure to check the papers stating the qualifications of the guards is negligence on the part of respondents. A learning institution should not be allowed to completely relinquish or abdicate security matters in its premises to the security agency it hired. To do so would result to contracting away its inherent obligation to ensure a safe learning environment for its students.
Consequently, respondents' defense of force majeure must fail. In order for force majeure to be considered, respondents must show that no negligence or misconduct was committed that may have occasioned the loss. An act of God cannot be invoked to protect a person who has failed to take steps to forestall the possible adverse consequences of such a loss. One's negligence may have concurred with an act of God in producing damage and injury to another; nonetheless, showing that the immediate or proximate cause of the damage or injury was a fortuitous event would not exempt one from liability. When the effect is found to be partly the result of a person's participation - whether by active intervention, neglect or failure to act - the whole occurrence is humanized and removed from the rules applicable to acts of God.
X X X
On the issue of solidarity:
We agree with the findings of the Court of Appeals that respondents cannot be held liable for damages under Art. 2180 of the Civil Code because respondents are not the employers of Rosete. The latter was employed by Galaxy. The instructions issued by respondents' Security Consultant to Galaxy and its security guards are ordinarily no more than requests commonly envisaged in the contract for services entered into by a principal and a security agency. They cannot be construed as the element of control as to treat respondents as the employers of Rosete.
X X X
WHEREFORE, the petition is GRANTED. The June 29, 2007 Decision of the Court of Appeals in CA-G.R. CV No. 87050 nullifying the Decision of the trial court and dismissing the complaint as well as the August 23, 2007 Resolution denying the Motion for Reconsideration are REVERSED and SET ASIDE. The
Decision of the Regional Trial Court of Manila, Branch 2, in Civil Case No. 98-89483 finding respondent FEU liable for damages for breach of its obligation to provide students with a safe and secure learning atmosphere, is AFFIRMED with the following MODIFICATIONS:
a. respondent Far Eastern University (FEU) is ORDERED to pay petitioner actual damages in the amount of P35,298.25, plus 6% interest per annum from the filing of the complaint until the finality of this Decision. After this decision becomes final and executory, the applicable rate shall be twelve percent (12%) per annum until its satisfaction;
b. respondent FEU is also ORDERED to pay petitioner temperate damages in the amount of P20,000.00; moral damages in the amount of P100,000.00; and attorney's fees and litigation expenses in the amount of P50,000.00;
c. the award of exemplary damages is DELETED.
The Complaint against respondent Edilberto C. De Jesus is DISMISSED. The counterclaims of respondents are likewise DISMISSED.
Galaxy Development and Management Corporation (Galaxy) and its president, Mariano D. Imperial are ORDERED to jointly and severally pay respondent FEU damages equivalent to the above-mentioned amounts awarded to petitioner.
SO ORDERED.
SAGRADA ORDEN VS NACOCO G.R. NO. L-3756 JUNE 30, 1952
FACTS:
The land in question belongs to plaintiff Sagrada Orden in whose name the title was registered before the war
On January 4, 1943, during the Japanese military occupation, the land was acquired by a Japanese corporation by the name of Taiwan Tekkosho
After liberation on April 4, 1946, the Alien Property Custodian of the United States of America took possession, control, and custody of the property pursuant to the Trading with the Enemy Act
The property was occupied by the Copra Export Management Company under a custodian agreement with US Alien Property Custodian. When it vacated the property, it was occupied by defendant National Coconut Corporation
The plaintiff made claim to the said property before the Alien Property Custodian. Alien Property Custodian denied such claim
It bought an action in court which resulted to the cancellation of the title issued in the name of Taiwan Tekkosho which was executed under threats, duress, and intimidation; reissuance of the title in favor of the plaintiff; cancellation of the claims, rights, title, interest of the Alien property Custodian; and occupant National Coconut Corporation’s ejection from the property. A right was also vested to the plaintiff to recover from the defendants rentals for its occupation of the land from the date it vacated.
Defendant contests the rental claims on the defense that it occupied the property in good faith and under no obligation to pay rentals.
The trial court ordered defendant to pay the back rentals.
ISSUE: Whether or not the defendant is obliged to pay rentals to the plaintiff
HELD: No.
RATIO: We can not understand how the trial court, from the mere fact that plaintiff-appellee was the owner of the property and the defendant-appellant the occupant, which used for its own benefit but by the express permission of the Alien Property Custodian of the United States, so easily jumped to the
conclusion that the occupant is liable for the value of such use and occupation. If defendant-appellant is liable at all, its obligations, must arise from any of the four sources of obligations, namley, law, contract or quasi-contract, crime, or negligence. (Article 1089, Spanish Civil Code.) Defendant-appellant is not guilty of any offense at all, because it entered the premises and occupied it with the permission of the entity which had the legal control and administration thereof, the Allien Property Administration. Neither was there any negligence on its part. There was also no privity (of contract or obligation) between the Alien Property Custodian and the Taiwan Tekkosho, which had secured the possession of the property from the plaintiff-appellee by the use of duress, such that the Alien Property Custodian or its permittee (defendant-appellant) may be held responsible for the supposed illegality of the occupation of the property by the said Taiwan Tekkosho. The Allien Property Administration had the control and administration of the property not as successor to the interests of the enemy holder of the title, the Taiwan Tekkosho, but by express provision of law (Trading with the Enemy Act of the United States, 40 Stat., 411; 50 U.S.C.A., 189). Neither is it a trustee of the former owner, the plaintiff-appellee herein, but a trustee of then Government of the United States (32 Op. Atty. Gen. 249; 50 U.S.C.A. 283), in its own right, to the exclusion of, and against the claim or title of, the enemy owner. (Youghioheny & Ohio Coal Co. vs. Lasevich [1920], 179 N.W., 355; 171 Wis., 347; U.S.C.A., 282-283.) From August, 1946, when defendant-appellant took possession, to the late of judgment on February 28, 1948, Allien Property Administration had the absolute control of the property as trustee of the Government of the United States, with power to dispose of it by sale or otherwise, as though it were the absolute owner. (U.S vs. Chemical Foundation [C.C.A. Del. 1925], 5 F. [2d], 191; 50 U.S.C.A., 283.) Therefore, even if defendant-appellant were liable to the Allien Property Administration for rentals, these would not accrue to the benefit of the plaintiff-appellee, the owner, but to the United States Government.
But there is another ground why the claim or rentals can not be made against defendant-appellant. There was no agreement between the Alien Property Custodian and the defendant-appellant for the latter to pay rentals on the property. The existence of an implied agreement to that effect is contrary to the circumstances. The copra Export Management Company, which preceded the defendant-appellant, in the possession and use of the property, does not appear to have paid rentals therefor, as it occupied it by what the parties denominated a "custodianship agreement," and there is no provision therein for the payment of rentals or of any compensation for its
custody and or occupation and the use. The Trading with the Enemy Act, as originally enacted, was purely a measure of conversation, hence, it is very unlikely that rentals were demanded for the use of the property. When the National coconut Corporation succeeded the Copra Export Management Company in the possession and use of the property, it must have been also free from payment of rentals, especially as it was Government corporation, and steps where then being taken by the Philippine Government to secure the property for the National Coconut Corporation. So that the circumstances do not justify the finding that there was an implied agreement that the defendant-appellant was to pay for the use and occupation of the premises at all.
The above considerations show that plaintiff-appellee's claim for rentals before it obtained the judgment annulling the sale of the Taiwan Tekkosho may not be predicated on any negligence or offense of the defendant-appellant, or any contract, express or implied, because the Allien Property Administration was neither a trustee of plaintiff-appellee, nor a privy to the obligations of the Taiwan Tekkosho, its title being based by legal provision of the seizure of enemy property. We have also tried in vain to find a law or provision thereof, or any principle in quasi contracts or equity, upon which the claim can be supported. On the contrary, as defendant-appellant entered into possession without any expectation of liability for such use and occupation, it is only fair and just that it may not be held liable therefor. And as to the rents it collected from its lessee, the same should accrue to it as a possessor in good faith, as this Court has already expressly held. (Resolution, National Coconut Corporation vs. Geronimo, 83 Phil. 467.)
Lastly, the reservation of this action may not be considered as vesting a new right; if no right to claim for rentals existed at the time of the reservation, no rights can arise or accrue from such reservation alone.
Wherefore, the part of the judgment appealed from, which sentences defendant-appellant to pay rentals from August, 1946, to February 28, 1949, is hereby reversed. In all other respects the judgment is affirmed. Costs of this appeal shall be against the plaintiff-appellee.
PEOPLE’S CAR VS COMMANDO SECURITY G.R. L-36840 MAY 22, 1973
FACTS:
People’s Car entered into a contract with Commando Security to safeguard and protect the business premises of the plaintiff from theft, pilferage, robbery, vandalism, and all other unlawful acts of any person/s prejudicial to the interest of the plaintiff.
On April 5, 1970, around 1:00am, defendant’s security guard on duty at plaintiff’s premises, without any authority, consent, approval, or orders of the plaintiff and/or defendant brought out the compound of the plaintiff a car belonging to its customer and drove said car to a place or places unknown, abandoning his post and while driving the car lost control of it causing it to fall into a ditch.
As a result, the car of plaintiff’s customer, which had been left with plaintiff for servicing and maintenance, suffered extensive damage besides the car rental value for a car that plaintiff had to rent and make available to its customer, Joseph Luy, to enable him to pursue his business and occupation.
Plaintiff instituted a claim against defendant for the actual damages it incurred due to the unlawful act of defendant’s personnel citing paragraph 5 of the contract wherein defendant accepts sole responsibility for the acts done during their watch hours.Defendant claimed that they may be liable but its liability is limited under paragraph 4 of the contract which provides that its liability shall not exceed P1,000 per guard post for loss or damage through the negligence of its guards during the watch hours provided that it is reported within 24 hours of the incident.
ISSUE: Whether or not the defendant is obliged to indemnify the plaintiff for the entire costs as result of the incident? YES
HELD: Paragraph 4 of the contract, which limits defendant's liability for the amount of loss or damage to any property of plaintiff to "P1,000.00 per guard post," is by its own terms applicable only for loss or damage 'through the negligence of its guards ... during the watch hours" provided that the same is duly reported by plaintiff within 24 hours of the occurrence and the guard's negligence is verified after proper investigation with the attendance of both contracting parties. Said paragraph is manifestly inapplicable to the stipulated facts of record, which involve neither property of plaintiff that has
been lost or damaged at its premises nor mere negligence of defendant's security guard on duty.
Here, instead of defendant, through its assigned security guards, complying with its contractual undertaking 'to safeguard and protect the business premises of (plaintiff) from theft, robbery, vandalism and all other unlawful acts of any person or persons," defendant's own guard on duty unlawfully and wrongfully drove out of plaintiffs premises a customer's car, lost control of it on the highway causing it to fall into a ditch, thereby directly causing plaintiff to incur actual damages in the total amount of P8,489.10.
Defendant is therefore undoubtedly liable to indemnify plaintiff for the entire damages thus incurred, since under paragraph 5 of their contract it "assumed the responsibility for the proper performance by the guards employed of their duties and (contracted to) be solely responsible for the acts done during their watch hours" and "specifically released (plaintiff) from any and all liabilities ... to the third parties arising from the acts or omissions done by the guards during their tour of duty." As plaintiff had duly discharged its liability to the third party, its customer, Joseph Luy, for the undisputed damages of P8,489.10 caused said customer, due to the wanton and unlawful act of defendant's guard, defendant in turn was clearly liable under the terms of paragraph 5 of their contract to indemnify plaintiff in the same amount.
The trial court's approach that "had plaintiff understood the liability of the defendant to fall under paragraph 5, it should have told Joseph Luy, owner of the car, that under the Guard Service Contract, it was not liable for the damage but the defendant and had Luy insisted on the liability of the plaintiff, the latter should have challenged him to bring the matter to court. If Luy accepted the challenge and instituted an action against the plaintiff, it should have filed a third-party complaint against the Commando Security Service Agency. But if Luy instituted the action against the plaintiff and the defendant, the plaintiff should have filed a crossclaim against the latter," 9 was unduly technical and unrealistic and untenable.
Plaintiff was in law liable to its customer for the damages caused the customer's car, which had been entrusted into its custody. Plaintiff therefore was in law justified in making good such damages and relying in turn on defendant to honor its contract and indemnify it for such undisputed damages, which had been caused directly by the unlawful and wrongful acts of defendant's security guard in breach of their contract. As ordained in
Article 1159, Civil Code, "obligations arising from contracts have the force of law between the contracting parties and should be complied with in good faith."
Plaintiff in law could not tell its customer, as per the trial court's view, that "under the Guard Service Contract it was not liable for the damage but the defendant" — since the customer could not hold defendant to account for the damages as he had no privity of contract with defendant. Such an approach of telling the adverse party to go to court, notwithstanding his plainly valid claim, aside from its ethical deficiency among others, could hardly create any goodwill for plaintiff's business, in the same way that defendant's baseless attempt to evade fully discharging its contractual liability to plaintiff cannot be expected to have brought it more business. Worse, the administration of justice is prejudiced, since the court dockets are unduly burdened with unnecessary litigation.
ACCORDINGLY, the judgment appealed from is hereby reversed and judgment is hereby rendered sentencing defendant-appellee to pay plaintiff-appellant the sum of P8,489.10 as and by way of reimbursement of the stipulated actual damages and expenses, as well as the costs of suit in both instances. It is so ordered.
CANGCO VS MANILA RAILROAD COMPANY G.R. L-12191 OCTOBER 14, 1918
FACTS:
On January 20, 1915, Jose Cangco was riding the train of Manila Railroad Company where he was an employee. As the train drew near to his destination, he arose from his seat. When he was about to alight from the train, Cangco accidentally stepped on a sack of watermelons which he failed to notice because it was already 7:00pm and it was dim when it happened. As a result, he slipped and fell violently on the platform. His right arm was badly crushed and lacerated which was eventually amputated.
Cangco sued Manila Railroad Company on the ground of negligence of its employees placing the sacks of melons upon the platform and in leaving them so placed as to be a menace to the security of passenger alighting from the company’s trains.
The company’s defense was that granting that its employees were negligent in placing an obstruction upon the platform, the direct and proximate cause of the injury suffered by plaintiff was his own contributing negligence.
ISSUE: Whether or not there was a contributing negligence on the part of the plaintiff.
HELD: It can not be doubted that the employees of the railroad company were guilty of negligence in piling these sacks on the platform in the manner above stated; that their presence caused the plaintiff to fall as he alighted from the train; and that they therefore constituted an effective legal cause of the injuries sustained by the plaintiff. It necessarily follows that the defendant company is liable for the damage thereby occasioned unless recovery is barred by the plaintiff's own contributory negligence. In resolving this problem it is necessary that each of these conceptions of liability, to-wit, the primary responsibility of the defendant company and the contributory negligence of the plaintiff should be separately examined.
It is important to note that the foundation of the legal liability of the defendant is the contract of carriage, and that the obligation to respond for the damage which plaintiff has suffered arises, if at all, from the breach of that contract by reason of the failure of defendant to exercise due care in its performance. That is to say, its liability is direct and immediate, differing essentially, in legal viewpoint from that presumptive responsibility for the negligence of its servants, imposed by article 1903 of the Civil Code, which can be rebutted by proof of the exercise of due care in their selection and
supervision. Article 1903 of the Civil Code is not applicable to obligations arising ex contractu, but only to extra-contractual obligations — or to use the technical form of expression, that article relates only to culpa aquiliana and not to culpa contractual.
X X X
The contract of defendant to transport plaintiff carried with it, by implication, the duty to carry him in safety and to provide safe means of entering and leaving its trains (civil code, article 1258). That duty, being contractual, was direct and immediate, and its non-performance could not be excused by proof that the fault was morally imputable to defendant's servants.
The railroad company's defense involves the assumption that even granting that the negligent conduct of its servants in placing an obstruction upon the platform was a breach of its contractual obligation to maintain safe means of approaching and leaving its trains, the direct and proximate cause of the injury suffered by plaintiff was his own contributory negligence in failing to wait until the train had come to a complete stop before alighting. Under the doctrine of comparative negligence announced in the Rakes case (supra), if the accident was caused by plaintiff's own negligence, no liability is imposed upon defendant's negligence and plaintiff's negligence merely contributed to his injury, the damages should be apportioned. It is, therefore, important to ascertain if defendant was in fact guilty of negligence.
It may be admitted that had plaintiff waited until the train had come to a full stop before alighting, the particular injury suffered by him could not have occurred. Defendant contends, and cites many authorities in support of the contention, that it is negligence per se for a passenger to alight from a moving train. We are not disposed to subscribe to this doctrine in its absolute form. We are of the opinion that this proposition is too badly stated and is at variance with the experience of every-day life. In this particular instance, that the train was barely moving when plaintiff alighted is shown conclusively by the fact that it came to stop within six meters from the place where he stepped from it. Thousands of person alight from trains under these conditions every day of the year, and sustain no injury where the company has kept its platform free from dangerous obstructions. There is no reason to believe that plaintiff would have suffered any injury whatever in alighting as he did had it not been for defendant's negligent failure to perform its duty to provide a safe alighting place.
X X X
In determining the question of contributory negligence in performing such act — that is to say, whether the passenger acted prudently or recklessly — the age, sex, and physical condition of the passenger are circumstances necessarily affecting the safety of the passenger, and should be considered. Women, it has been observed, as a general rule are less capable than men of alighting with safety under such conditions, as the nature of their wearing apparel obstructs the free movement of the limbs. Again, it may be noted that the place was perfectly familiar to the plaintiff as it was his daily custom to get on and of the train at this station. There could, therefore, be no uncertainty in his mind with regard either to the length of the step which he was required to take or the character of the platform where he was alighting. Our conclusion is that the conduct of the plaintiff in undertaking to alight while the train was yet slightly under way was not characterized by imprudence and that therefore he was not guilty of contributory negligence.
The decision of lower court is reversed, and judgment is hereby rendered plaintiff for the sum of P3,290.25, and for the costs of both instances. So ordered.
Arellano, C.J., Torres, Street and Avanceña, JJ., concur.
Gutierrez vs Gutierrez
Facts:
On February 2, 1930, a passenger truck and an automobile of private ownership collided while attempting to pass each other on the Talon bridge on the Manila South Road in the municipality of Las Piñas. The driver of the car is an 18 y/o boy, son of the car’s owners. It was found by the trial court that both the boy and the driver of the auto bus were negligent by which neither of them were willing to slow up and give the right of way to the other. Plaintiff is the passenger of the bus who as a result of the incident fractured his right leg to his damage and prejudice. Thus, plaintiff sued the boy, his parents as owners of the car, the bus driver and its owner for damages. The trial court ruled in favor of plaintiff. Hence, this appeal.
Issue: how should the civil liability be imposed upon parties in the case at bar
HELD: We are dealing with the civil law liability of parties for obligations which arise from fault or negligence. At the same time, we believe that, as has been done in other cases, we can take cognizance of the common law rule on the same subject. In the United States, it is uniformly held that the head of a house, the owner of an automobile, who maintains it for the general use of his family is liable for its negligent operation by one of his children, whom he designates or permits to run it, where the car is occupied and being used at the time of the injury for the pleasure of other members of the owner's family than the child driving it. The theory of the law is that the running of the machine by a child to carry other members of the family is within the scope of the owner's business, so that he is liable for the negligence of the child because of the relationship of master and servant. (Huddy On Automobiles, 6th ed., sec. 660; Missell vs. Hayes [1914], 91 Atl., 322.) The liability of Saturnino Cortez, the owner of the truck, and of his chauffeur Abelardo Velasco rests on a different basis, namely, that of contract which, we think, has been sufficiently demonstrated by the allegations of the complaint, not controverted, and the evidence. The reason for this conclusion reaches to the findings of the trial court concerning the position of the truck on the bridge, the speed in operating the machine, and the lack of care employed by the chauffeur. While these facts are not as clearly evidenced as are those which convict the other defendant, we nevertheless hesitate to disregard the points emphasized by the trial judge. In its broader aspects, the case is one of two drivers approaching a narrow
bridge from opposite directions, with neither being willing to slow up and give the right of way to the other, with the inevitable result of a collision and an accident.
The defendants Velasco and Cortez further contend that there existed contributory negligence on the part of the plaintiff, consisting principally of his keeping his foot outside the truck, which occasioned his injury. In this connection, it is sufficient to state that, aside from the fact that the defense of contributory negligence was not pleaded, the evidence bearing out this theory of the case is contradictory in the extreme and leads us far afield into speculative matters.
X X X
HSBCL-SRP vs SPOUSES BIENVENIDO AND EDITHA BROQUEZA G.R. NO. 178610 NOV. 17, 2010 FACTS: · Petitioners Gerong and Editha Broqueza are employees of Hongkong and Shanghai Banking Corporation (HSBC). They are also members of HSBC, Ltd. Staff Retirement Plan. · The Plan is a retirement plan established by HSBC through its BOT for the benefit of the employees. · On Oct. 1, 1990, petitioner Broqueza obtained a car loan in the amount of P175,000.00. · On Dec. 12, 1991, she again applied and was granted an appliance loan in the amount of P24,000.00. · Petitioner Gerong, on the other hand applied and was granted an emergency loan in the amount of P35,780.00 on June 2, 1993. · The loans were paid through automatic salary deductions. · A labor dispute arose between HSBC and its employees. · Majority of HSBCs employees were terminated among them the petitioners. · The employees filed an illegal dismissal case before the NLRC against HSBC, which is now pending before the CA. · Because of the dismissal, petitioners were not able to pay the monthly amortizations of their respective loans. They were considered delinquent. Demands to pay were made. · On July 31, 1996, HSBCL-SRP filed a civil case against the spouses. · On Sept. 19, 1996, HSBCL-SRP filed another civil case. Both suits were civil actions for recovery and collection of sums of money. · The MeTC ruled that the nature of HSBCs demands for payment is civil and has no connection to the ongoing labor dispute. · The loans secured by their future retirement benefits to which they are no longer entitled are reduced to unsecured and pure civil obligations. They are immediately demandable. · The RTC reaffirmed the decision but the CA reversed it. · On Aug. 6, 2007, HSBCL-SRP filed a manifestation withdrawing the petition against Gerong because she already settled her obligations. ISSUE: W.O.N. the loans of the Sps. Broqueza is a pure obligation and demandable at once even if they were dismissed by HSBC. HELD: · The RTC is correct in ruling that since the Promissory Notes do not contain a period, HSBCL-SRP has the right to demand immediate payment. · Art. 1179 of the NCC applies. · The spouses obligation to pay HSBCL-SRP is a pure obligation because they do not contain a period. · Once Editha Broqueza defaulted in her monthly payment, HSBCL-SRP made a demand to enforce a pure obligation. · Despite the spouses Broquezas protestations, the payroll deduction is merely a convenient mode of payment and not the sole source of payment for the loans. · HSBCL-SRP never agreed that the loans will be paid only though salary deductions. · The same never agreed that if Editha Broqueza ceases to be an employee of HSBC, her obligation to pay the loans will be suspended. · HSBCL-SRP can immediately demand payment of the loans anytime because the obligation to pay has no period. · Moreover, the
spouses Broqueza have already incurred in default in paying the monthly instalments. · Finally, the enforcement of a loan agreement involves debtor-creditor relation founded on contract and does not in any way concern the employee relations. As such it should be enforced through a separate civil action in the regular courts and not before the Labor Arbiter.
Pay v. Palanca [G.R. No. L-29900. June 28, 1974]
20
APR
FACTS
The promissory note indicated payment “upon demand”. Petitioner relied on this to mean that prescription would not lie unless there is demand from them. The petition was filed fifteen years after its issuance.
ISSUE
Whether or not a promissory note to be paid “upon demand” is immediately due and demandable.
RULING
YES. Every obligation whose performance does not depend upon a future or uncertain event, or upon a past event unknown to the parties, is demandable at once (Art. 1179 of the New Civil Code). The obligation being due and demandable in this case, it would appear that the filing of the suit after fifteen years was much too late.
Smith, Bell & Co. v Sotelo Matti (1992)FACTS
Plaintiff Smith, Bell & Co and the defendant Mr. Vicente Sotel entered into a contract. Plaintiff hasto deliver (1) two steel tanks shipped from New York to Manila
within three or four months
, (2)two expellers shipped from SanFrancisco in the month of September 1918
or as soon aspossible,
and (3) two electric motors with ³approximate delivery
within ninety days. ± This isnot guaranteed.
´The tanks arrived at Manila on 27 April 1919; the expellers on 26 October 1918; and the motorson 27 February 1919. Upon notification from plaintiff, defendant refused to receive any of thegoods or to pay for their price. Plaintiff alleged that the expellers and motors were in goodcondition.Plaintiff filed a complaint against the defendant. The defendant, Mr Sotelo and intervenor, ManilaOil Refining and By-Products Co., Inc., denied the plaintiff¶s allegations. They allege that due toplaintiff¶s delay in the delivery of goods, the intervenor suffered damages.The lower court absolved the defendants from the complaint insofar as the tanks and the electricmotors were concerned, but rendered judgment against them ordering them to receive expellersand pay the sum of P50,000, with legal interest and cost.Both parties appealed to the Court.
ISSUEWhat period was fixed for the delivery of the goods? Did the plaintiff incur delay in thedelivery of goods?HELD
In all these contracts, there is a final clause as follows:
³The sellers are not responsible for delays cause by fires, riots on land or on thesea, strikes or other causes known as µforce majeure¶ entirely beyond the control of thesellers or their representatives.
Under these stipulations, it cannot be said that any definite date was fixed for the delivery of thegoods. xxx. From the record it appears that thee contracts were executed at the time of the worldwar when there existed rigid restrictions on the export from the united States xxx; hence clauseswere inserted in the contracts, regarding ³Government regulations, railroading
embargoes, lack of vessel space, the exigencies of the requirements of the United States Government´ xxx. At thetime of the execution of the contracts, the parties were not unmindful of the contingency of theUnited States Government not allowing the export of the goods xxx.We cannot but conclude that the term which parties attempted to fix is so uncertain that oncecannot tell just whether, as a matter of fact, those articles could be brought to manila or not.
Theobligation must be regarded as conditional.
The delivery was subject to a condition thefulfillment of which depended not only upon the effort of the plaintiff, but upon the will of thirdpersons who could in no way be compelled to fulfill the condition.It is sufficiently proven in the record that the plaintiff has made all the efforts it could possibly beexpected to make under the circumstances, to bring the goods in question to Manila, as soon aspossible. Xxx
it is obvious that the plaintiff has complied with its obligation.
When the time of delivery is not fixed in the contract, time is regarded unessential. In such cases,the delivery must be made within a reasonable time. Xxx Reasonable time for the delivery of thegoods by the seller is to be determined by circumstances attending the particular transactions.
Whether of not the delivery of the machinery in litigation was offered to the defendantwithin a reasonable time, is a question to be determined by the court. Xxx The plaintiff hasnot been guilty of any delay in the fulfillment of its obligation.
Chavez vs. Gonzales (2008) (Political Law)
Francisco Chavez vs. Raul M. Gonzales and NTC | G.R. No. 168338 | February 15, 2008
Facts: As a consequence of the public release of copies of the “Hello Garci” compact disc audiotapes involving a wiretapped mobile phone conversation between then-President Gloria Arroyo and Comelec Commissioner Virgilio Garcillano, respondent DOJ Secretary Gonzales warned reporters that those who had copies of the CD and those broadcasting or publishing its contents could be held liable under the Anti-Wiretapping Act. He also stated that persons possessing or airing said tapes were committing a continuing offense, subject to arrest by anybody. Finally, he stated that he had ordered the NBI to go after media organizations “found to have caused the spread, the playing and the printing of the contents of a tape.” Meanwhile, respondent NTC warned TV and radio stations that their broadcast/airing of such false information and/or willful misrepresentation shall be a just cause for the suspension, revocation and/or cancellation of the licenses or authorizations issued to the said media establishments. Petitioner Chavez filed a petition under Rule 65 against respondents Secretary Gonzales and the NTC directly with the Supreme Court.
Issues: (1) Will a purported violation of law such as the Anti-Wiretapping Law justify straitjacketing the exercise of freedom of speech and of the press? (2) Did the mere press statements of respondents DOJ Secretary and the NTC constitute a form of content-based prior restraint that has transgressed the Constitution?
Held: (1) No, a purported violation of law such as the Anti-Wiretapping Law will not justify straitjacketing the exercise of freedom of speech and of the press. A governmental action that restricts freedom of speech or of the press based on content is given the strictest scrutiny, with the government having the burden of overcoming the presumed unconstitutionality by the clear and present danger rule. This rule applies equally to all kinds of media, including broadcast media. Respondents, who have the burden to show that these acts do not abridge freedom of speech and of the press, failed to hurdle the clear and present danger test. For this failure of the respondents alone to offer
proof to satisfy the clear and present danger test, the Court has no option but to uphold the exercise of free speech and free press. There is no showing that the feared violation of the anti-wiretapping law clearly endangers the national security of the State.
(2) Yes, the mere press statements of respondents DOJ Secretary and the NTC constituted a form of content-based prior restraint that has transgressed the Constitution. It is not decisive that the press statements made by respondents were not reduced in or followed up with formal orders or circulars. It is sufficient that the press statements were made by respondents while in the exercise of their official functions. Any act done, such as a speech uttered, for and on behalf of the government in an official capacity is covered by the rule on prior restraint. The concept of an “act” does not limit itself to acts already converted to a formal order or official circular. Otherwise, the non formalization of an act into an official order or circular will result in the easy circumvention of the prohibition on prior restraint.
INGSON ENCARNACION VS. BALDOMAR
77 PHIL 470
FACTS:
Vicente Singson Encarnacion leased his house to
Jacinta Baldomar and her son, Lefrando Fernando upon a
month-to-month basis. After Manila was liberated in the
last war, Singson Encarnacio notified Baldomar and her
son Fernando to vacate the house because he needed it for
his office as a result of the destruction of the building
where he had his office before. Despite the demand, the
Baldomar and Fernando continued their occupancy.
The defense of Baldomar and Fernando was that the
contract with Singson Encarnacion authorized them to
continue occupancy indefinitely while they should
faithfully fulfill their obligation with respect to payment of
rentals. Singson Encarnacion contended that the lease had
always and since the beginning been upon a month-tomonth
basis.
ISSUE:
Was it tenable for Singson Encarnacion to discontinue
the lease of Baldomar and her son?
RULING:
The continuance and fulfillment of the contract of lease
cannot be made to depend solely and exclusively upon the
free and uncontrolled choice of the lessees between
continuing paying the rentals or not, completely depriving
the owner of all say in the matter. The defense of Baldomar
and Fernando would leave to the sole and exclusive will of
one of the contracting parties the validity and fulfillment of
the contract of lease, within the meaning of Article 1256 of
the Civil Code. For if this were allowed, so long as the
lessee elected to continue the lease by continuing the
payment of the rentals the owner would never be able to
discontinue the lease; conversely, although the owner
should desire the lease to continue, the lessee could
effectively thwart his purpose if he should prefer to
terminate the contract by the simple expedient of stopping
payment of the rentals.
Eleizegui v. The Manila Lawn Tennis Club
G.R. No. 967 May 19, 1903
Facts:
A contract of lease was executed on January 25, 1980 over a piece of land owned by the plaintiffs Eleizegui (Lessor) to the Manila Lawn Tennis Club, an English association (represented by Mr. Williamson) for a fixed consideration of P25 per month and accordingly, to last at the will of the lessee. Under the contract, the lessee can make improvements deemed desirable for the comfort and amusement of its members. It appeared that the plaintiffs terminated the lease right on the first month. The defendant is in the belief that there can be no other mode of terminating the lease than by its own will, as what they believe has been stipulated.
As a result the plaintiff filed a case for unlawful detainer for the restitution of the land claiming that article 1569 of the Civil Code provided that a lessor may judicially dispossess the lessee upon the expiration of the conventional term or of the legal term; the conventional term — that is, the one agreed upon by the parties; the legal term, in defect of the conventional, fixed for leases by articles 1577 and 1581. The Plaintiffs argued that the duration of the lease depends upon the will of the lessor on the basis of Art. 1581 which provides that, "When the term has not been fixed for the lease, it is understood to be for years when an annual rental has been fixed, for months when the rent is monthly. . . ." The second clause of the contract provides as follows: "The rent of the said land is fixed at 25 pesos per month."
The lower court ruled in favor of the Plaintiffs on the basis of Article 1581 of the Civil Code, the law which was in force at the time the contract was entered into. It is of the opinion that the contract of lease was terminated by the notice given by the plaintiff. The judgment was entered upon the theory of the expiration of a legal term which does not exist, as the case requires that a term be fixed by the courts under the provisions of article 1128 with
respect to obligations which, as is the present, are terminable at the will of the obligee.
ISSUE: a) Whether or not the parties have agreed upon the duration of the lease
b) Whether or not the lease depends upon the will of the lessee
RULING:
a) YES, the parties have agreed upon a term hence Art. 1581 is inapplicable.
The legal term cannot be applied under Art 1581 as it appears that there was actually an agreement between the parties as to the duration of the lease, albeit implied that the lease is to be dependent upon the will of the lessee. It would be absurd to accept the argument of the plaintiff that the contract was terminated at its notice, given this implication.
Interestingly, the contract should not be understood as one stipulated as a life tenancy, and still less as a perpetual lease since the terms of the contract express nothing to this effect, even if they implied this idea. If the lease could last during such time as the lessee might see fit, because it has been so stipulated by the lessor, it would last, first, as long as the will of the lessee — that is, all his life; second, during all the time that he may have succession, inasmuch as he who contracts does so for himself and his heirs. (Art. 1257 of the Civil Code.) The lease in question does not fall within any of the cases in which the rights and obligations arising from a contract can not be transmitted to heirs, either by its nature, by agreement, or by provision of law. Moreover, being a lease, then it must be for a determinate period. (Art. 1543.) By its very nature it must be temporary, just as by reason of its nature, an emphyteusis must be perpetual, or for an unlimited period. (Art. 1608.)
B) The duration of the lease does not depend solely upon the will of the Lessee (defendant).
It cannot be concluded that the termination of the contract is to be left completely at the will of the lessee simply because it has been stipulated that its duration is to be left to his will.
The Civil Code has made provision for such a case in all kinds of obligations. In speaking in general of obligations with a term it has supplied the deficiency of the former law with respect to the "duration of the term when it has been left to the will of the debtor," and provides that in this case the term shall be fixed by the courts. (Art. 1128, sec. 2.) In every contract, as laid down by the authorities, there is always a creditor who is entitled to demand the performance, and a debtor upon whom rests the obligation to perform the undertaking. In bilateral contracts the contracting parties are mutually creditors and debtors. Thus, in this contract of lease, the lessee is the creditor with respect to the rights enumerated in article 1554, and is the debtor with respect to the obligations imposed by articles 1555 and 1561. The term within which performance of the latter obligation is due is what has been left to the will of the debtor. This term it is which must be fixed by the courts.
The only action which can be maintained under the terms of the contract is that by which it is sought to obtain from the judge the determination of this period, and not the unlawful detainer action which has been brought — an action which presupposes the expiration of the term and makes it the duty of the judge to simply decree an eviction. To maintain the latter action it is sufficient to show the expiration of the term of the contract, whether conventional or legal; in order to decree the relief to be granted in the former action it is necessary for the judge to look into the character and conditions of the mutual undertakings with a view to supplying the lacking element of a time at which the lease is to expire.
The lower court’s judgement is erroneous and therefore reversed and the case was remanded with directions to enter a judgment of dismissal of the action in favor of the defendant, the Manila Lawn Tennis Club.
PHILIPPINE BANKING CORPORATION, representing the estate of JUSTINIASANTOS Y CANON FAUSTINO, deceased, plaintiff-appellant, vs.LUI SHE, in her own behalf and as administratrix of the intestate estate of WongHeng, deceased,defendant-appellant.
FACTS:
This is the second motion that the defendant-appellant has filed relativeto this Court's decision of September 12, 1967. Accepting the nullity of the other contracts (Plff Exhs. 4-7), the defendant-appellant nevertheless contended that thelease contract (Plff Exh. 3) is so separable from the rest of the contracts that itshould be saved from invalidation.In denying the motion, we pointed to the circumstances
—
that on November 15,1957, the parties entered into the lease contract (in favor of Wong Heng) for 50years: that ten days after, they amended the contract so as to make it cover theentire property of Justina Santos; less than a month after, they entered into another contract giving Wong Heng the option to buy the leased premises should his pending petition for naturalization be granted; that on November 18, 1958, after failing to secure naturalization and after finding that adoption does not confer thecitizenship of the adopting parent on the adopted, the parties entered into two other contracts extending the lease to 99 years and fixing the period of the option to buyat 50 years which indubitably demonstrate that each of the contracts in questionwas designed to carry out Justina Santos' expressed wish to give the land to Wongand thereby in effect place its ownership in alien hands, that "as the lease contractwas part of a scheme to violate the Constitution it suffers from the same infirmitythat renders the other contracts void and can no more be saved from illegality thanthe rest of the contracts."The present motion is for a new trial and is based on three documents (1 Codiciland 2 wills) executed by Justina Santos which, so it is claimed, constitute newly-discovered material evidence: Codicil- Justina Santos not only named TitaYaptinchay LaO the administratrix of her estate with the right to buy the propertiesof the estate, but also provided that if the said LaO was legally disqualified from buying she was to be her sole heir.Wills- Justina Santos enjoined her heirs to respect the lease contract made, and theconditional option given, in favor of Wong.
ISSUE:
WON the lease contract executed by Santos is valid.
HELD:
This is a misrepresentation of the grossest sort.
Lim vs People
Posted on November 20, 2012
Lim vs People
G.R. No. 130038
Sep.18, 2000
INTRO
The case is an appeal from the decision of the Court of Appeals affirming in toto that of the Regional Trial Court, Cebu City. Both courts found petitioner Rosa Lim guilty of twice violating Batas Pambansa Bilang 22 and imposing on her two one-year imprisonment for each of the two violations and ordered her to pay two fines, each amounting to P200,000.00.
The trial court also ordered petitioner to return to Maria Antonia Seguan, the jewelry received or its value with interest, to pay moral damages, attorney’s fees and costs.
FACTS
On August 25, 1990, petitioner bought various kinds of jewelry worth P300,000.00 from Maria Antonia Seguan. She wrote out a check with the same amount, dated August 25, 1990, payable to “cash” drawn on Metrobank and gave the check to Seguan.
The next day, petitioner again went to Seguan’s store and purchased jewelry valued at P241,668.00. Petitioner issued another check payable to “cash” dated August 16, 1990 drawn on Metrobank in the amount of P241,668.007 and sent the check to Seguan through a certain Aurelia Nadera.
Seguan deposited the two checks with her bank. The checks were returned with a notice of dishonor. Petitioner’s account in the bank from which the checks were drawn was closed.
Upon demand, petitioner promised to pay Seguan the amounts of the two dishonored checks, but she never did.
On June 5, 1991, an Assistant City Prosecutor of Cebu filed with the RTC, Cebu City, Branch 23, two informations against petitioner for violations of BP No. 22.
After due trial, on December 29, 1992, the trial court rendered a decision in the two cases convicting petitioner.
Petitioner appealed to the CA, but the same was dismissed by the CA in its October 15, 1996 Decision wherein it affirmed in toto the RTC’s Decision.
ISSUE
WON Lim violated B.P. No. 22.
HELD
The elements of B.P. Blg. 22 are:
“(1) The making, drawing and issuance of any check to apply for account or for value;
“(2) The knowledge of the maker, drawer, or issuer that at the time of issue he does not have sufficient funds in or credit with the drawee bank for the payment of such check in full upon its presentment; and
“(3) The subsequent dishonor of the check by the drawee bank for insufficiency of funds or credit or dishonor for the same reason had not the drawer, without any valid cause, ordered the bank to stop payment.”
The gravamen of B.P. No. 22 is the act of making and issuing a worthless check or one that is dishonored upon its presentment for payment. And the accused failed to satisfy the amount of the check or make arrangement for its payment within 5 banking days from notice of dishonor. The act is malum prohibitum, pernicious and inimical to public welfare. Laws are created to achieve a goal intended and to guide and prevent against an evil or mischief. Why and to whom the check was issued, and the terms & conditions surrounding the issuance of the checks, are irrelevant in determining culpability.
Under BP No. 22, one need not prove that the check was issued in payment of an obligation, or that there was damage.
It was ruled in United States v. Go Chico, that in acts mala prohibita, the only inquiry is, “has the law been violated?” When dealing with acts mala prohibita –“it is not necessary that the appellant should have acted with criminal intent. In many crimes, the intention of the person who commits the crime is entirely immaterial…”
This case is a perfect example of an act mala prohibita. The first and last elements of the offense are admittedly present. B.P. No. 22, Section 2 creates a presumption juris tantum that the second element prima facie exists when the first and third elements of the offense are present. If not rebutted, it suffices to sustain a conviction. To escape liability, she must prove that the second element was absent. Petitioner failed to rebut this presumption and she failed to pay the amount of the checks or make arrangement for its payment within 5 banking days from receipt of notice of dishonor. B.P. No. 22 was clearly violated. Hoc quidem per quam durum est sed ita lex scripta est. The law may be exceedingly hard but so the law is written.
However, the penalty imposed on petitioner must be modified. In Vaca v. Court of Appeals [298 SCRA 658 (1998)], it was held that in determining the penalty to be imposed for violation of B.P. No. 22, the philosophy underlying the Indeterminate Sentence Law applies. The philosophy is to redeem valuable human material, and to prevent unnecessary deprivation of personal liberty and economic usefulness with due regard to the protection of the social order. The prison sentence imposed on petitioners is deleted, and imposed on them only a fine double the amount of the check issued.
Consequently, the prison sentences imposed on petitioner are deleted. The two fines imposed for each violation, each amounting to P200,000.00 are appropriate and sufficient. The award of moral damages and order to pay attorney’s fees are deleted for lack of sufficient basis.
ARANETA VS PHIL. SUGAR ESTATES
DEVELOPMENT CO.
20 SCRA 330
FACTS:
J. M. Tuason & Co., Inc. is the owner of a big tract
land situated in Quezon City, and on July 28, 1950,
[through Gregorio Araneta, Inc.] sold a portion thereof to
Philippine Sugar Estates Development Co., Ltd.
The parties stipulated, among in the contract of
purchase and sale with mortgage, that the buyer will build
on the said parcel land the Sto. Domingo Church and
Convent while the seller for its part will construct streets.
But the seller, Gregorio Araneta, Inc., which began
constructing the streets, is unable to finish the
construction of the street in the Northeast side because a
certain third-party, by the name of Manuel Abundo, who
has been physically occupying a middle part thereof,
refused to vacate the same;
Both buyer and seller know of the presence of
squatters that may hamper the construction of the streets
by the seller. On May 7, 1958, Philippine Sugar Estates
Development Co., Lt. filed its complaint against J. M.
Tuason & Co., Inc., and instance, seeking to compel the
latter to comply with their obligation, as stipulated in the
above-mentioned deed of sale, and/or to pay damages in
the event they failed or refused to perform said obligation.
The lower court and the appellate court ruled in
favor of Phil. Sugar estates, and gave defendant Gregorio
Araneta, Inc., a period of two (2) years from notice hereof,
within which to comply with its obligation under the
contract, Annex "A".
Gregorio Araneta, Inc. resorted to a petition for
review by certiorari to this Court.
ISSUES:
Was there a period fixed?
RULING:
Yes. The fixing of a period by the courts under
Article 1197 of the Civil Code of the Philippines is sought to
be justified on the basis that petitioner (defendant below)
placed the absence of a period in issue by pleading in its
answer that the contract with respondent Philippine Sugar
Estates Development Co., Ltd. gave petitioner Gregorio
Araneta, Inc. "reasonable time within which to comply
with its obligation to construct and complete the streets."
If the contract so provided, then there was a period fixed, a
"reasonable time;" and all that the court should have done
was to determine if that reasonable time had already
elapsed when suit was filed if it had passed, then the court
should declare that petitioner had breached the contract,
Was it within the powers of the lower court to set the
performance of the obligation in two years time?
NO. Even on the assumption that the court should have
found that no reasonable time or no period at all had been
fixed (and the trial court's amended decision nowhere
declared any such fact) still, the complaint not having
sought that the Court should set a period, the court could
not proceed to do so unless the complaint included it as
first amended;
Granting, however, that it lay within the Court's power to
fix the period of performance, still the amended decision is
defective in that no basis is stated to support the conclusion that the period should be set at two years after
finality of the judgment. The list paragraph of Article 1197
is clear that the period can not be set arbitrarily. The law
expressly prescribes that “the Court shall determine such
period as may under the circumstances been probably
contemplated by the parties.”
It must be recalled that Article 1197 of the Civil Code
involves a two-step process. The Court must first
determine that "the obligation does not fix a period" (or
that the period is made to depend upon the will of the
debtor)," but from the nature and the circumstances it can
be inferred that a period was intended" (Art. 1197, pars. 1
and 2). This preliminary point settled, the Court must then
proceed to the second step, and decide what period was
"probably contemplated by the parties" (Do., par. 3). So
that, ultimately, the Court can not fix a period merely
because in its opinion it is or should be reasonable, but
must set the time that the parties are shown to have
intended. As the record stands, the trial Court appears to
have pulled the two-year period set in its decision out of
thin air, since no circumstances are mentioned to support
it. Plainly, this is not warranted by the Civil Code.
Does “reasonable time” mean that the date of performance
would be indefinite?
The Court of Appeals objected to this conclusion that it
would render the date of performance indefinite. Yet, the
circumstances admit no other reasonable view; and this
very indefiniteness is what explains why the agreement did
not specify any exact periods or dates of performance.
Millare v Hernando
[FULL CASE]
FACTS
Petitioner Pacifica Millare as lessor and private respondent Elsa Co, as lessee executed a 5-year contract of lease. The parties agreed to rent out a commercial unit for a monthly rate of P350. Before the expiration of the lease contract, the lessor informed them that the lessee can continue renting the unit as they were amenable to paying increased rentals of P1,200.00 a month. In response, a counteroffer of P700.00 a month was made by the lessee. At this point, the lessor allegedly stated that the amount of monthly rentals could be resolved at a later time since "the matter is simple among us", which alleged remark was supposedly taken by the spouses Co to mean that the Contract of Lease had been renewed. On 22 July 1980, Mrs. Millare wrote the Co spouses requesting them to vacate the leased premises as she had no intention of renewing the Contract of Lease. Lessees responded by reiterated their unwillingness to pay the Pl,200.00 monthly rentals and by depositing the P700 monthly rentals in court. on 1 September 1980, Mrs. Millare filed an ejectment case against the Co spouses in the Municipal Court of Bangued, Abra. The judge rendered a "Judgment by Default" ordering the renewal of the lease contract for a term of 5 years counted from the expiration date of the original lease contract, and fixing monthly rentals thereunder at P700.00 a month, payable in arrears.
ISSUE
Whether or not private respondents have a valid cause of action against petitioner?
Whether or not the trial court acquired jurisdiction over Civil Case No. 1434?
RULING
In the instant case, the lessor and the lessee conspicuously failed to reach agreement both on the amount of the rental to be payable during the renewal term, and on the term of the renewed contract. The respondent judge cited Articles 1197 and 1670 of the Civil Code to sustain the "Judgment by Default" by which he ordered the renewal of the lease for another term of five years and fixed monthly rentals thereunder at P700.00 a month. The
first paragraph of Article 1197 is clearly inapplicable, since the Contract of Lease did in fact fix an original period of five years. The second paragraph of Article 1197 is equally clearly inapplicable since the duration of the renewal period was not left to the will of the lessee alone, but rather to the will of both the lessor and the lessee. The implied new lease during the continued occupancy could not possibly have a period of five years, but rather would have been a month-to-month lease since the rentals (under the original contract) were payable on a monthly basis. It follows that the respondent judge's decision requiring renewal of the lease has no basis in law or in fact since courts have no authority to prescribe the terms and conditions of a contract for the parties. WHEREFORE, the Petition for Certiorari, Prohibition and mandamus is granted.
RELEVANT JURISPRUDENCE
Article 1197 of the Civil Code provides as follows:
If the obligation does not fix a period, but from its nature and the circumstances it can be inferred that a period was intended, the courts may fix the duration thereof.
The courts shall also fix the duration of the period when it depends upon the will of the debtor.
In every case, the courts shall determine such period as may, under the circumstances, have been probably contemplated by the parties. Once fixed by the courts, the period cannot be changed by them.
Article 1670 of the Civil Code reads thus:
If at the end of the contract the lessee should continue enjoying the thing left for 15 days with the acquiescence of the lessor and unless a notice to the contrary by either party has previously been given. It is understood that there is an implied new lease, not for the period of the original contract but for the time established in Articles 1682 and 1687. The terms of the original contract shall be revived.
