Article 1174
NATIONAL POWER CORPORATION vs. THE COURT OF APPEALSG.R. No.
96410 July 3, 1992NOCON, J.:
FACTS: In the early morning hours of October 27, 1978, at the
height of typhoon "Kading", a massive flood covered the towns near
Angat Dam, particularly the town of Norzagaray, causing several
deaths and the loss and destruction of houses, farms, plants,
working animals and other properties of the people residing near
the Angat River. Private respondents blamed the sudden rush of
water to the reckless and imprudent opening of all the three (3)
floodgates of the Angat Dam spillway, without prior warning to the
people living near or within the vicinity of the dam. In view of
these, an action for damages was filed by respondents. The trial
court ruled in favor of the latter. Likewise the Court of Appeals
affirmed with said decision. Hence, a petition for review on
certiorari was instituted by the National Power Corporation (NPC)
and Benjamin Chavez, Plant Superintendent of NPC.Petitioners denied
private respondents' allegations and, by way of defense, contended
that they have maintained the water in the Angat Dam at a safe
level and that the opening of the spillways was done gradually and
after all precautionary measures had been taken. Petitioner NPC
further contended that it had always exercised the diligence of a
good father in the selection of its officials and employees and in
their supervision. It also claimed that written warnings were
earlier sent to the towns concerned, and that there was no direct
causal relationship between the alleged damages suffered by the
respondents and the acts and omissions attributed to the former.
That it was the respondents who assumed the risk of residing near
the Angat River, and even assuming that respondents suffered
damages, the cause was due to a fortuitous event and such damages
are of the nature and character of damnum absque injuria, hence,
respondents have no cause of action against them.
ISSUE: Whether petitioners can escape civil liability by
invoking force majeure as the proximate cause of the loss and
damage.
HELD: No. Petitioners cannot escape liability because their
negligence is the proximate cause of the loss and damage. Act of
God or force majeure, by definition, are extraordinary events not
foreseeable or avoidable, events that could not be foreseen, or
which, though foreseen, are inevitable. It is therefore not enough
that the event should not have been foreseen or anticipated, as is
commonly believed, but it must be one impossible to foresee or to
avoid. 7 As a general rule, no person shall be responsible for
those events which could not be foreseen or which though foreseen,
were inevitable.However, the principle embodied in the act of God
doctrine strictly requires that the act must be occasioned solely
by the violence of nature. Human intervention is to be excluded
from creating or entering into the cause of the mischief. When the
effect is found to be in part the result of the participation of
man, whether due to his active intervention or neglect or failure
to act, the whole occurrence is then humanized and removed from the
rules applicable to the acts of God. Generally it cannot be said
that damage, injury or loss is due to an act of God where it was
caused merely by excessive or heavy rainfall, storms and to weather
conditions which are not unusual in character, those which could
have been reasonably anticipated or where the injury complained of
is due rather to the negligence or mismanagement of man than to the
disturbance of the elements or where such damage, injury or loss
might have been mitigated or prevented by diligence exercised after
the occurrence. In the case at bar, although the typhoon "Kading"
was an act of God, petitioners can not escape liability because
their negligence was the proximate cause of the loss and damage.
The Court of Appeals found that the defendants failed to take the
necessary safeguards to prevent the danger that the Angat Dam posed
in a situation of such nature as that of typhoon "Kading". The
representative of the "PAG-ASA" who testified in these proceedings,
Justo Iglesias, Jr., stated that based on their records the
rainfall on October 26 and 27, 1978 is classified only as moderate,
and could not have caused flash floods. He testified that flash
floods exceeds 50 millimeters per hour and lasts for at least two
(2) hours. He stated that typhoon "Yaning" which occurred on
October 7 to 14, 1978 gave a much heavier rainfall than "Kading",
and so did other previous typhoons. Also, despite of the
announcements of the newspaper of the expected occurrence of a
powerful typhoon code-named "Kading", the water level in the dam
was maintained at its maximum from October 21, until midnight of
October 26, 1978. It has been held in several cases that when the
negligence of a person concurs with an act of God producing a loss,
such person is not exempt from liability by showing that the
immediate cause of the damage was the act of God. To be exempt he
must be free from any previous negligence or misconduct by which
the loss or damage may have been occasioned. WHEREFORE, finding no
reversible error in the Decision appealed from, the same is hereby
affirmed in toto, with cost against petitioner.
Globe Telecom vs. Philippine Communications Satellite Corp.(G.R.
No.147324, August 25, 2004)
FACTS: Globe had been engaged in the coordination of the
provision of various communication facilities for the military
bases of the US in Clark Air Base and Subic Naval Base. The said
communication facilities were installed and configured for the
exclusive use of the US Defense Communications Agency (USDCA), and
for security reasons, were operated only by its personnel or those
of American companies contracted by it to operate said facilities.
The USDCA contracted with said American companies, and the latter,
in turn, contracted with Globe for the use of the communication
facilities. Globe, on the other hand, contracted with local service
providers such as the Philippine Communications Satellite
Corporation (Philcomsat) for the provision of the communication
facilities.On 07 May 1991, Philcomsat and Globe entered into an
Agreement whereby Philcomsat obligated itself to establish, operate
and provide an IBS Standard B earth station (earth station) within
Cubi Point for the exclusive use of the USDCA. The term of the
contract was for 5 years. In turn, Globe promised to pay Philcomsat
monthly rentals for each leased circuit involved.Both parties knew
that the Military Bases Agreement between the Republic of the
Philippines and the US was to expire in 1991. On August 6, 1992,
Globe notified Philcomsat of its intention to discontinue the use
of the earth station effective November 8, 1992 in view of the
termination of the RP-US Military Bases Agreement.After the US
military forces left Subic Naval Base, Philcomsat sent Globe a
letter dated November 24, 1993 demanding payment of its outstanding
obligations under the Agreement amounting to US$4,910,136.00 plus
interest and attorneys fees. However, Globe refused to heed
Philcomsats demand.
ISSUES:1.Whether the termination of the RP-US Military Bases
Agreement constitute force majeure which would exempt Globe from
complying with its obligation to pay rentals under its Agreement
with Philcomsat;2.Whether Globe is liable to pay rentals under the
Agreement for the month of December 1992; and3.Whether Philcomsat
is entitled to attorneys fees and exemplary damages.
HELD:First Issue: Yes. Article 1174, which exempts an obligor
from liability on account of fortuitous events or force majeure,
refers not only to events that are unforeseeable, but also to those
which are foreseeable, but inevitable. Philcomsat and Globe agreed
in Section 8 of the Agreement that the following events shall be
deemed events constituting force majeure: particularly: 1. any law,
order, regulation, direction or request of the Philippine
Government. Under Article 1306 of the Civil Code, parties to a
contract may establish such stipulations, clauses, terms and
conditions as they may deem fit, as long as the same do not run
counter to the law, morals, good customs, public order or public
policy. Not being contrary to law, morals, good customs, public
order, or public policy, Section 8 of the Agreement which
Philcomsat and Globe freely agreed upon has the force of law
between them.Second Issue:Yes. The US military forces and personnel
completely withdrew from Cubi Point only on December 31, 1992.
Thus, until that date, the USDCA had control over the earth station
and had the option of using the same thus the Court of Appeals did
not err when it affirmed the trial courts ruling that Globe is
liable for payment of rentals until December 1992.Third Issue:No.
Philcomsat is not entitled to attorneys fees and exemplary
damages.The award of attorneys fees is the exception rather than
the rule, and must be supported by factual, legal and equitable
justifications. In previously decided cases, the Court awarded
attorneys fees where a party acted in gross and evident bad faith
in refusing to satisfy the other partys claims and compelled the
former to litigate to protect his rights; when the action filed is
clearly unfounded, or where moral or exemplary damages are awarded.
However, in cases where both parties have legitimate claims against
each other and no party actually prevailed, such as in the present
case where the claims of both parties were sustained in part, an
award of attorneys fees would not be warranted.Exemplary damages
may be awarded in cases involving contracts or quasi-contracts, if
the erring party acted in a wanton, fraudulent, reckless,
oppressive or malevolent manner. In the present case, it was not
shown that Globe acted wantonly or oppressively in not heeding
Philcomsats demands for payment of rentals. It was established
during the trial of the case before the trial court that Globe had
valid grounds for refusing to comply with its contractual
obligations after 1992.SICAM VS. JORGE
MARCH 28, 2013~VBDIAZROBERTO C. SICAM and AGENCIA de R.C. SICAM,
INC. vs. SPOUSES JORGEG.R. No. 159617, August 8, 2007
FACTS: On different dates, Lulu Jorge pawned several pieces of
jewelry with Agencia de R. C. Sicam located in Paraaque to secure a
loan.On October 19, 1987, two armed men entered the pawnshop and
took away whatever cash and jewelry were found inside the pawnshop
vault.On the same date, Sicam sent Lulu a letter informing her of
the loss of her jewelry due to the robbery incident in the
pawnshop. Respondent Lulu then wroteback expressing disbelief, then
requested Sicam to prepare the pawned jewelry for withdrawal on
November 6, but Sicam failed to return the jewelry.Lulu, joined by
her husband Cesar, filed a complaint against Sicam with the RTC of
Makati seeking indemnification for the loss of pawned jewelry and
payment of AD, MD and ED as well as AF.The RTC rendered its
Decision dismissing respondents complaint as well as petitioners
counterclaim. Respondents appealed the RTC Decision to the CA which
reversed the RTC, ordering the appellees to pay appellants the
actual value of the lost jewelry and AF. Petitioners MR denied,
hence the instant petition for review on Certiorari.ISSUE: are the
petitioners liable for the loss of the pawned articles in their
possession? (Petitioners insist that they are not liable since
robbery is a fortuitous event and they are not negligent at
all.)
HELD: The Decision of the CA is AFFIRMED.
YESArticle 1174 of the Civil Code provides:Art. 1174. Except in
cases expressly specified by the law, or when it is otherwise
declared by stipulation, or when the nature of the obligation
requires the assumption of risk, no person shall be responsible for
those events which could not be foreseen or which, though foreseen,
were inevitable.Fortuitous events by definition are extraordinary
events not foreseeable or avoidable. It is therefore, not enough
that the event should not have been foreseen or anticipated, as is
commonly believed but it must be one impossible to foresee or to
avoid. The mere difficulty to foresee the happening is not
impossibility to foresee the same.To constitute a fortuitous event,
the following elements must concur:(a) the cause of the unforeseen
and unexpected occurrence or of the failure of the debtor to comply
with obligations must be independent of human will;(b) it must be
impossible to foresee the event that constitutes the caso fortuito
or, if it can be foreseen, it must be impossible to avoid;(c) the
occurrence must be such as to render it impossible for the debtor
to fulfill obligations in a normal manner; and,(d) the obligor must
be free from any participation in the aggravation of the injury or
loss.The burden of proving that the loss was due to a fortuitous
event rests on him who invokes it. And, in order for a fortuitous
event to exempt one from liability, it is necessary that one has
committed no negligence or misconduct that may have occasioned the
loss.Sicam had testified that there was a security guard in their
pawnshop at the time of the robbery. He likewise testified that
when he started the pawnshop business in 1983, he thought of
opening a vault with the nearby bank for the purpose of safekeeping
the valuables but was discouraged by the Central Bank since pawned
articles should only be stored in a vault inside the pawnshop. The
very measures which petitioners had allegedly adopted show that to
them the possibility of robbery was not only foreseeable, but
actually foreseen and anticipated. Sicams testimony, in effect,
contradicts petitioners defense of fortuitous event.Moreover,
petitioners failed to show that they were free from any negligence
by which the loss of the pawned jewelry may have been
occasioned.Robbery per se, just like carnapping, is not a
fortuitous event. It does not foreclose the possibility of
negligence on the part of herein petitioners.Petitioners merely
presented the police report of the Paraaque Police Station on the
robbery committed based on the report of petitioners employees
which is not sufficient to establish robbery. Such report also does
not prove that petitioners were not at fault. On the contrary, by
the very evidence of petitioners, the CA did not err in finding
that petitioners are guilty of concurrent or contributory
negligence as provided in Article 1170 of the Civil Code, to
wit:Art. 1170. Those who in the performance of their obligations
are guilty of fraud, negligence, or delay, and those who in any
manner contravene the tenor thereof, are liable for
damages.**Article 2123 of the Civil Code provides that with regard
to pawnshops and other establishments which are engaged in making
loans secured by pledges, the special laws and regulations
concerning them shall be observed, and subsidiarily, the provisions
on pledge, mortgage and antichresis.The provision on pledge,
particularly Article 2099 of the Civil Code, provides that the
creditor shall take care of the thing pledged with the diligence of
a good father of a family. This means that petitioners must take
care of the pawns the way a prudent person would as to his own
property.In this connection, Article 1173 of the Civil Code further
provides:Art. 1173. The fault or negligence of the obligor consists
in the omission of that diligence which is required by the nature
of the obligation and corresponds with the circumstances of the
persons, of time and of the place. When negligence shows bad faith,
the provisions of Articles 1171 and 2201, paragraph 2 shall
apply.If the law or contract does not state the diligence which is
to be observed in the performance, that which is expected of a good
father of a family shall be required.We expounded in Cruz v. Gangan
that negligence is the omission to do something which a reasonable
man, guided by those considerations which ordinarily regulate the
conduct of human affairs, would do; or the doing of something which
a prudent and reasonable man would not do. It is want of care
required by the circumstances.A review of the records clearly shows
that petitioners failed to exercise reasonable care and caution
that an ordinarily prudent person would have used in the same
situation. Petitioners were guilty of negligence in the operation
of their pawnshop business. Sicams testimony revealed that there
were no security measures adopted by petitioners in the operation
of the pawnshop. Evidently, no sufficient precaution and vigilance
were adopted by petitioners to protect the pawnshop from unlawful
intrusion. There was no clear showing that there was any security
guard at all. Or if there was one, that he had sufficient training
in securing a pawnshop. Further, there is no showing that the
alleged security guard exercised all that was necessary to prevent
any untoward incident or to ensure that no suspicious individuals
were allowed to enter the premises. In fact, it is even doubtful
that there was a security guard, since it is quite impossible that
he would not have noticed that the robbers were armed with caliber
.45 pistols each, which were allegedly poked at the employees.
Significantly, the alleged security guard was not presented at all
to corroborate petitioner Sicams claim; not one of petitioners
employees who were present during the robbery incident testified in
court.Furthermore, petitioner Sicams admission that the vault was
open at the time of robbery is clearly a proof of petitioners
failure to observe the care, precaution and vigilance that the
circumstances justly demanded.The robbery in this case happened in
petitioners pawnshop and they were negligent in not exercising the
precautions justly demanded of a pawnshop.NOTES:We, however, do not
agree with the CA when it found petitioners negligent for not
taking steps to insure themselves against loss of the pawned
jewelries.Under Section 17 of Central Bank Circular No. 374, Rules
and Regulations for Pawnshops, which took effect on July 13, 1973,
and which was issued pursuant to Presidential Decree No. 114,
Pawnshop Regulation Act, it is provided that pawns pledged must be
insured, to wit:Sec. 17. Insurance of Office Building and Pawns-
The place of business of a pawnshop and the pawns pledged to it
must be insured against fire and against burglary as well as for
the latter(sic), by an insurance company accredited by the
Insurance Commissioner.However, this Section was subsequently
amended by CB Circular No. 764 which took effect on October 1,
1980, to wit:Sec. 17 Insurance of Office Building and Pawns The
office building/premises and pawns of a pawnshop must be insured
against fire. (emphasis supplied).where the requirement that
insurance against burglary was deleted. Obviously, the Central Bank
considered it not feasible to require insurance of pawned articles
against burglary.The robbery in the pawnshop happened in 1987, and
considering the above-quoted amendment, there is no statutory duty
imposed on petitioners to insure the pawned jewelry in which case
it was error for the CA to consider it as a factor in concluding
that petitioners were negligent.Nevertheless, the preponderance of
evidence shows that petitioners failed to exercise the diligence
required of them under the Civil Code.
Japan Airlines V. Asuncion (G.R No. 161730, January 28,2005) 449
SCRA 544
FACTS:This petition for review seeks to reverse and set aside
the October 9, 2002 decision of the Court of Appeals and its
January 12, 2004 resolution, which affirmed in toto the June 10,
1997 decision of the Regional Trial Court of Makati City, Branch 61
in Civil Case No. 92-3635.
On March 27, 1992, respondents Michael and Jeanette Asuncion
left Manila on board Japan Airlines (JAL) Flight 742 bound for Los
Angeles. Their itinerary included a stop-over in Narita and an
overnight stay at Hotel Nikko Narita. Upon arrival at Narita, Mrs.
Noriko Etou-Higuchi of JAL endorsed their applications for shore
pass and directed them to the Japanese immigration official. A
shore pass is required of a foreigner aboard a vessel or aircraft
who desires to stay in the neighborhood of the port of call for not
more than 72 hours.
During their interview, the Japanese immigration official noted
that Michael appeared shorter than his height as indicated in his
passport. Because of this inconsistency, respondents were denied
shore pass entries and were brought instead to the Narita Airport
Rest House where they were billeted overnight.
Mr. Atsushi Takemoto of the International Service Center (ISC),
the agency tasked by Japans Immigration Department to handle
passengers who were denied shore pass entries, brought respondents
to the Narita Airport Rest House where they stayed overnight until
their departure the following day for Los Angeles. Respondents were
charged US$400.00 each for their accommodation, security service
and meals.
On December 12, 1992, respondents filed a complaint for damages
claiming that JAL did not fully apprise them of their travel
requirements and that they were rudely and forcibly detained at
Narita Airport.
Issue: Whether or not JAL is liable of breach of contract of
carriage.
Side Issues: Whether or not JAL is liable for moral, exemplary
damages, Whether or not the plaintiff is liable for attorneys fee
and cost of suit incurred (JAL counterclaim)
Ruling:The court finds that JAL did not breach its contract of
carriage with respondents. It may be true that JAL has the duty to
inspect whether its passengers have the necessary travel documents,
however, such duty does not extend to checking the veracity of
every entry in these documents. JAL could not vouch for the
authenticity of a passport and the correctness of the entries
therein. The power to admit or not an alien into the country is a
sovereign act which cannot be interfered with even by JAL. This is
not within the ambit of the contract of carriage entered into by
JAL and herein respondents. As such, JAL should not be faulted for
the denial of respondents shore pass applications.
In the Respondents claim that petitioner breached its contract
of carriage when it failed to explain to the immigration
authorities that they had overnight vouchers at the Hotel Nikko
Narita. They imputed that JAL did not exhaust all means to prevent
the denial of their shore pass entry applications. JAL or any of
its representatives have no authority to interfere with or
influence the immigration authorities. The most that could be
expected of JAL is to endorse respondents applications, which Mrs.
Higuchi did immediately upon their arrival in Narita.
Moral damages may be recovered in cases where one willfully
causes injury to property, or in cases of breach of contract where
the other party acts fraudulently or in bad faith. Exemplary
damages are imposed by way of example or correction for the public
good, when the party to a contract acts in wanton, fraudulent,
oppressive or malevolent manner. Attorneys fees are allowed when
exemplary damages are awarded and when the party to a suit is
compelled to incur expenses to protect his interest.[17] There
being no breach of contract nor proof that JAL acted in wanton,
fraudulent or malevolent manner, there is no basis for the award of
any form of damages.
Neither should JAL be held liable to reimburse respondents the
amount of US$800.00. It has been sufficiently proven that the
amount pertained to ISC, an agency separate and distinct from JAL,
in payment for the accommodations provided to respondents. The
payments did not in any manner accrue to the benefit of JAL.
However, we find that the Court of Appeals correctly dismissed
JALs counterclaim for litigation expenses, exemplary damages and
attorneys fees. The action was filed by respondents in utmost good
faith and not manifestly frivolous. Respondents honestly believed
that JAL breached its contract. A persons right to litigate should
not be penalized by holding him liable for damages. This is
especially true when the filing of the case is to enforce what he
believes to be his rightful claim against another although found to
be erroneous.[
WHEREFORE, in view of the foregoing, the instant petition is
PARTLY GRANTED. The October 9, 2002 decision of the Court of
Appeals and its January 12, 2004 resolution in CA-G.R. CV No.
57440, are REVERSED and SET ASIDE insofar as the finding of breach
on the part of petitioner and the award of damages, attorneys fees
and costs of the suit in favor of respondents is concerned.
Accordingly, there being no breach of contract on the part of
petitioner, the award of actual, moral and exemplary damages, as
well as attorneys fees and costs of the suit in favor of
respondents Michael and Jeanette Asuncion, is DELETED for lack of
basis. However, the dismissal for lack of merit of petitioners
counterclaim for litigation expenses, exemplary damages and
attorneys fees, is SUSTAINED. No pronouncement as to costs.
Insurance Case Digest: Gaisano Cagayan, Inc. V. Insurance
Company Of North America (2006)
G.R. No. 147839 June 8, 2006
Lessons Applicable:Existing Interest (Insurance)Laws
Applicable:Article 1504,Article 1263,Article 2207of the Civil
Code,Section 13 of Insurance Code
FACTS:Intercapitol Marketing Corporation (IMC) is the maker of
Wrangler Blue Jeans. whileLevi Strauss (Phils.) Inc. (LSPI) is the
local distributor of products bearing trademarks owned by Levi
Strauss & CoIMC and LSPI separately obtained from Insurance
Company of North Americafire insurance policies for their book debt
endorsementsrelated to their ready-made clothing materials which
have been sold or delivered to various customers and dealers of the
Insured anywhere in the Philippines which are unpaid45 days after
the time of the lossFebruary 25, 1991: Gaisano Superstore Complex
in Cagayan de Oro City, owned by Gaisano Cagayan, Inc.,
containingthe ready-made clothing materials sold and delivered by
IMC and LSPIwas consumed by fire.February 4, 1992: Insurance
Company of North America fileda complaint for damages
againstGaisano Cagayan, Inc.alleges that IMC and LSPI filed their
claims under their respective fire insurance policies which it paid
thus it was subrogated to their rightsGaisano Cagayan, Inc:not be
held liable because it wasdestroyed due to fortuities event or
force majeureRTC:IMC and LSPI retained ownership of the delivered
goods until fully paid, it must bear the loss (res perit domino)CA:
Reversed -sales invoices is an exception under Article 1504 (1) of
the Civil Code to res perit domino
ISSUE: W/NInsurance Company of North America can claim against
Gaisano Cagayan for the debt that was isnured
HELD: YES.petition is partly GRANTED.order to pay P535,613 is
DELETEDinsurance policy is clear that the subject of the insurance
is thebook debts and NOTgoods sold and delivered to the customers
and dealers of the insuredART. 1504. Unless otherwise agreed, the
goods remain at the seller's risk until the ownership therein is
transferred to the buyer, but when the ownership therein is
transferred to the buyer the goods are at the buyer's risk whether
actual delivery has been made or not, except that:
(1) Where delivery of the goods has been made to the buyer or to
a bailee for the buyer, in pursuance of the contract and the
ownership in the goods has been retained by the seller merely to
secure performance by the buyer of his obligations under the
contract, the goods are at the buyer's risk from the time of such
delivery;IMC and LSPI did not lose complete interest over the
goods. They have an insurable interest until full payment of the
value of the delivered goods. Unlike the civil law concept of res
perit domino, where ownership is the basis for consideration of who
bears the risk of loss, in property insurance, one's interest is
not determined by concept of title, but whether insured has
substantial economic interest in the propertySection 13 of our
Insurance Code defines insurable interest as "every interest in
property, whether real or personal, or any relation thereto, or
liability in respect thereof, of such nature that a contemplated
peril might directly damnify the insured." Parenthetically, under
Section 14 of the same Code, an insurable interest in property may
consist in: (a) an existing interest; (b) an inchoate interest
founded on existing interest; or (c) an expectancy, coupled with an
existing interest in that out of which the expectancy arises.Anyone
has an insurable interest in property who derives a benefit from
its existence or would suffer loss from its destruction.it is
sufficient that the insured is so situated with reference to the
property that he would be liable to loss should it be injured or
destroyed by the peril against which it is insuredan insurable
interest in property does not necessarily imply a property interest
in, or a lien upon, or possession of, the subjectmatter of the
insurance, and neither the title nor a beneficial interest is
requisite to the existence of such an interestinsurance in this
case is not for loss of goods by fire but for petitioner's accounts
with IMC and LSPI that remained unpaid 45 days after the fire
-obligation is pecuniary in natureobligor should be held exempt
from liability when the loss occurs thru a fortuitous event only
holds true when the obligation consists in the delivery of a
determinate thing and there is no stipulation holding him liable
even in case of fortuitous eventArticle 1263 of the Civil Code in
an obligation to deliver a generic thing, the loss or destruction
of anything of the same kind does not extinguish the obligation
(Genus nunquan perit)The subrogation receipt, by itself, is
sufficient to establish not only the relationship of respondent as
insurer and IMC as the insured, but also the amount paid to settle
the insurance claimArt. 2207. If the plaintiff's property has been
insured, and he has received indemnity from the insurance company
for the injury or loss arising out of the wrong or breach of
contract complained of, the insurance company shall be subrogated
to the rights of the insured against the wrongdoer or the person
who has violated the contract.As toLSPI, no subrogation receipt was
offered in evidence.Failure to substantiate the claim of
subrogation is fatal to petitioner's case for recovery of the
amount of P535,613
Obligations and ContractsG.R. No. 95897 December 14,
1999FLORENCIA T. HUIBONHOA, petitioner, vs. COURT OF APPEALS,
SPOUSESRUFINA G. LIM AND ANTHONY LIM, LORETA GOJOCCO CHUA AND
SPOUSESSEVERINO AND PRISCILLA GOJOCCO, respondents.G.R. No. 102604
December 14, 1999SEVERINO GOJOCCO and LORETA GOJOCCO CHUA,
petitioners, vs. COURT OFAPPEALS, HON. HERMOGENES R. LIWAG, as
Judge of the RTC of Manila Branch 55and FLORENCIA
HUIBONHOA,respondents.
FACTS: On June 8, 1983, Florencia T. Huibonhoa (Florencia)
entered into a memorandum ofagreement with siblings Rufina Gojocco
Lim (Rufina), Severino Gojocco (Severino) andLoreta Gojocco Chua
(Loreta) stipulating that Florencia T. Huibonhoa would lease from
them (Gojoccos) three (3) adjacent commercial lots at Ilaya Street,
Binondo, Manila. On June 30, 1983, pursuant to the memorandum of
agreement, the parties inked acontract of lease of the same three
lots.
TERMS OF THE CONTRACT: Goodwill money: P900,000 (P300,000/each)
Lesee shall pay P15,000/month to each lessor (P45,000/month) for
the leased premises, within the first 5 days of each month. Lessee
was given an eight-month period to construct the building; after
eight months, the rent payment will accrue. NOTE: During the period
of construction, nomonthly rental shall be collected from the
Lessee. Lease Period: Fifteen (15) Years (Renewable upon agreement)
Lessee will construct a four storey building Lessee can sublease.
Lessee will determine all the amount collected as rent and it will
belong to lessee. An increase in the rentals of the sub-lease will
be the basis for the percentage increase of monthly rental that
lessee will have to pay lessors. Upon the termination of the lease,
the ownership and title to the building on the lots would
automatically transfer to the lessor, even without any implementing
document. Real estate taxes on the land lessor, Taxes on the
building lessee, but the lessee was authorized to advance the money
needed to meet the lessors obligations such as the payment of real
estate taxes on their lots. The lessors would deduct from the
monthly rental due all such advances made by the lessee. After the
execution of the contract, the Gojoccos executed a power of
attorney grantingHuibonhoa the authority to obtain credit
facilities in order that the three lots could bemortgaged for a
limited one-year period from July 1983. On September 12, 1983,
Huibonhoa obtained from China Banking Corporation creditfacilities
not exceeding One Million (P1,000.000.00) Pesos. Simultaneously,
shemortgaged the three lots to the creditor bank.[2] Fifteen days
later or on September 27,1983, to be precise, Huibonhoa signed a
contract amending the real estate mortgage infavor of China Banking
Corporation whereby the credit facilities were increased to
theprincipal sum of Three Million (P3,000,000.00) Pesos.[3] During
the construction of the building which later became known as
PoulexMerchandise Center,[4] former Senator Benigno Aquino, Jr. was
assassinated. Theincident must have affected the countrys political
and economic stability. Theconsequent hoarding of construction
materials and increase in interest rates allegedlyaffected
adversely the construction of the building such that Huibonhoa
failed tocomplete the same within the stipulated eight-month period
from July 1, 1983. It wasfinished seven months later Under the
contract, Huibonhoa was supposed to start paying rental in March
1984 but shefailed to do so. Consequently, the Gojoccos made
several verbal demands uponHuibonhoa for the payment of rental
arrearages and, for her to vacate the leasedpremises. On December
19, 1984, lessors sent lessee a final letter of demand to pay the
rentalarrearages and to vacate the leased premises. The former also
notified the latter of theirintention to terminate the contract of
lease. On January 3, 1985, Huibonhoa brought an action for
reformation of contract allegingthat although there was a meeting
of the minds between the parties on the lease contract,their true
intention as to when the monthly rental would accrue was not
therein expresseddue to mistake or accident. On January 14, 1985,
the Gojoccos filed for cancellation of lease, ejectment
andcollection against Huibonhoa. On January 31, 1985, Rufina
Gojocco Lim entered into an agreement with Huibonhoa toput an end
to the case the former filed. However, there was no record that
RufinaGojocco Lim was dropped as a defendant, but only Loretta
Gojocco Chua and theSpouses Severino and Priscilla Gojocco filed
the memorandum for the defendants in thatcase. Huibonhoas Case RTC
Decision: No clear and convincing evidence to justify
thereformation of the lease contract. Gojoccos Case MTC Decision:
granted Huibonhoas prayer that the case be excludedfrom the
operation of the Rule on Summary Procedure
Republic of thePhilippinesSupreme CourtBaguioCity
SECOND DIVISION
ASIAN CONSTRUCTION AND DEVELOPMENT CORPORATION,Petitioner,
- versus -
PHILIPPINE COMMERCIAL INTERNATIONAL BANK,Respondent.G.R. No.
153827
Present:
PUNO,J.,Chairperson,*SANDOVAL-GUTIERREZ,**CORONA,AZCUNA,
andGARCIA,JJ.
Promulgated:
April 25, 2006
x-----------------------------------------------------------------------------------xD
E C I S I O NGARCIA,J.:In this petition for review under Rule 45 of
the Rules of Court, petitioner Asian Construction and Development
Corporation or ASIAKONSTRUKT, seeks the reversal and setting aside
of the decision[1]dated March 15, 2002 and the Resolution[2]dated
June 3, 2002 of the Court of Appeals (CA) inCA-G.R. CV No.
68189.The assailed decision affirmwith modification theSummary
Judgmentrendered by the Regional Trial Court (RTC) of Makati City
in an action for a sum of money thereat commenced by the herein
respondent, Philippine Commercial International Bank (PCIBANK)
against the petitioner, while the challenged resolution denied
petitioners motion for reconsideration.The facts:OnFebruary 24,
1999, in the RTC of Makati City, respondent PCIBANK filed a
complaint[3]for a sum of money with prayer for a writ of
preliminary attachment against petitioner ASIAKONSTRUKT. Docketed
as Civil Case No. 99-432, the complaint alleged,inter alia,as
follows:FIRST CAUSE OF ACTION2.01On various occasions,
ASIAKONSTRUKT obtained U.S. dollar denominated credit
accommodations from PCIBANK in the amount of Four Million Four
Hundred Eighty Seven Thousand U.S. dollars (US$4,487,000.00),
exclusive of interests, charges and fees thereon and the cost of
collecting the same. These credit accommodations are covered by the
following promissory notes:xxxxxxxxx2.02Prompt and faithful payment
of all the foregoing promissory notes was secured by the following
deeds of assignment executed by ASIAKONSTRUKT in favor of
PCIBANK:(a)Deed of Assignment of Receivables/ContractProceeds
dated20 July1994where ASIAKONSTRUKT assigned its receivables from
its Contract with the National Power Corporation (NPC) in the
amount of .P54,500,000;(b)Deed of Assignmentof Receivables dated28
June 1995where ASIAKONSTRUKT assigned its receivables from its
Contract with the NPC in the amount ofP26,281,000.00;(c)Deed of
Assignment ofReceivables dated28 August 1995where ASIAKONSTRUKT
assigned its receivables from its Sub-Contract with ABB Power,
Inc., in the amount ofP43,000,000.00;(d)Deed of Assignment of
Contract Proceeds dated 27 March 1996 where ASIAKONSTRUKT assigned
its receivables from its contracts with PNOC in the aggregate
amount ofP46,000,000.00; and(e)Deed of Assignment of Contract
Proceeds dated20 February 1997where ASIAKONSTRUKT assigned its
receivables from the Ormat Philippines, Inc., in the aggregate
amount of US$3,350,000.00;2.03All the foregoing deeds of
assignments stipulate, among others, the following terms and
conditions:a)The assignment is for the purpose of securing payment
of the principal amount and the interests and bank charges accruing
thereon, the costs of collecting the same and all other expenses
which PCIBANK may be put in connection with or as an incident of
the assignment;b)That the assignment secures also any extension or
renewal of the credit which is the subject thereof as any and all
other obligations of ASIAKONSTRUKT of whatever kind and nature as
appear in the records of PCIBANK, which ASIAKONSTRUKT accepts as
the final and conclusive evidence of such obligations to PCIBANK,
whether contracted before, during or after the constitution of [the
assignment agreement];c)That PCIBANK authorizes ASIAKONSTRUKT, at
the latters expense, to collect and receive for [PCIBANK] all the
Receivables; andd)That ASIAKONSTRUKT shall have no right, and
agrees not to use any of the proceeds of any collections, it being
agreed by the parties that [ASIAKONSTRUKT] divests itself of all
the rights, title and interest in said Receivables and the proceeds
of the collection received thereon.2.04The promissory notes have
remained not fully paid despite their having become due and
demandable. Repeated verbal and written demands were made upon
ASIAKONSTRUKT, but to no avail. It has failed and refused, and
continues to fail and refuse, to pay its outstanding obligations to
PCIBANK;2.05As a result of ASIAKONSTRUKTsrefusal to pay its
outstanding obligations, PCIBANK was constrained to refer the
matter to counsel and thus incur attorneys fees and legal
costs.2.06The aggregate unpaid obligation of ASIAKONSTRUKT to
PCIBANK, as of31 December 1998, amounts to US$4,553,446.06, broken
down as follows:PrincipalUS$
4,067,867.23InterestUS$291,263.27PenaltiesUS$194,315.56TOTALUS$
4,553,446.06For its second cause of action, PCIBANK alleged in the
same complaint as follows:SECOND CAUSE OF ACTION4.02as a result of
the fraudulent acts of ASIAKONSTRUKT, PCIBANK suffered the
following damages, all of which ASIAKONSTRUKT must be held to pay
PCIBANK:4.02.1Exemplary damages, in the interest of public good and
purposes of correction, in the amount of not less than
.P50,000.00;4.02.2Attorneys fees in the amount of not less than
.P1,800,000.00; and4.02.3Costs of suit.In support of its prayer for
a writ of preliminary attachment embodied in the complaint,
plaintiff PCIBANK alleges the following:3.02ASIAKONSTRUKT is guilty
of fraud in contracting the debt, in the performance thereof, or
both, xxx;303.PCIBANK agreed to enter into the above-mentioned
credit accommodations primarily because of the existence of the
deeds of assignment listed above. However, from telephone inquiries
made with responsible officers of the National Power Corporation,
ABB Power, Inc., PNOC and Ormat Philippines, Inc., PCIBANK was
surprised to learn that ASIAKONSTRUKT had long ago collected the
contract proceeds, or portions thereof, which were previously
assigned to PCIBANK. However, to date, it has yet to turn over
these proceeds to PCIBANK. Worse, PCIBANK learned that the contract
proceeds were used by ASIAKONSTRUKT for its own purposes clear
evidence of fraud, which has deprived PCIBANK of its security.
ASIAKONSTRUKTs unauthorized use of the contract proceeds for its
own purposes was subsequently confirmed by Mr. Napoleon Garcia,
Vice President for Finance of ASIAKONSTRUKT, in a telephone
discussion on12 January 1999with Ms. Maricel E. Salaveria of
PCIBANK. xxx Needless to say, ASIAKONSTRUKT has fraudulently
collected such receivables to the prejudice of PCIBANK.3.04it is
evident that ASIAKONSTRUKT never had any intention of complying
with the deeds of assignment. ASIAKONSTRUKT only misled PCIBANK
into believing that it had sufficient security to ensure payment of
its loan obligations.3.05Alternatively, granting,in argumenti
gratia, that ASIAKONSTRUKT, at the time it executed the foregoing
deeds of assignment, really intended to abide by their terms and
conditions, it nevertheless committed manifest fraud when it
collected the contract proceeds, and instead of remitting them to
PCIBANK, used them for its own purposes.In an order[4]datedApril
13, 1999, the trial court, after receivingex partePCIBANKs evidence
in support of its prayer for preliminary attachment, directed the
issuance of the desired writ, thus:WHEREFORE, let a writ of
preliminary attachment issue against all the property of defendant
not exempt from execution or so much thereof as may be sufficient
to satisfy plaintiffs principal claim of US$4,553,446.06,
representing the alleged unpaid obligation of defendant, inclusive
of interest and penalty charges, as of December 31, 1998, which is
equivalent toP174,260,380.72, upon plaintiffs filing of a bond in
an equal amount to answer for all it may sustain by reason of the
attachment if the Court shall finally adjudge thatplaintiff was not
entitled thereto.SO ORDERED.With plaintiff PCIBANK having posted
the requisite bond, a writ of preliminary attachment was thereafter
issued by the trial court.Per records, defendant ASIAKONSTRUKT did
not file any motion for thequashalor dissolution of the
writ.Meanwhile, onAugust 27, 1999, defendant ASIAKONSTRUKT filed
its Answer,[5]thereunder making admissions and denials.Defendant
admits, subject to its defenses, the material allegations of the
Complaint as regards its indebtedness to plaintiff PCIBANK and its
execution of the various deeds of assignment enumerated therein.
It, however, denies, for lack of knowledge sufficient to form a
belief as to the truth thereof, the averments in the Complaint that
it has not paid, despite demands, its due and demandable
obligations, as well as the amounts due the plaintiff as itemized
in paragraph 2.06,supra,of the Complaint. It likewise denies
PCIBANKs allegations in the same Complaint in support of its prayer
for a writ of preliminary attachment, particularly its having
fraudulently misappropriated for its own use the contract
proceeds/receivables under the contracts mentioned in the several
deeds of assignments, claiming in this respect that it has
stillremaining receivables from those contracts.By way of defenses,
defendant pleads in its Answer the alleged severe financial and
currency crisis which hit thePhilippinesin July 1997, which
adversely affected and ultimately put it out of business. Defendant
adds that the deeds of assignments it executed in favor of PCIBANK
were standard forms proposed by the bank as pre-condition for the
release of the loans and therefore partake of the nature of
contracts of adhesion,leaving the defendant to the alternative of
taking it or leaving it. By way of counterclaim, defendant prayed
for an award ofP1,000,000.00 as and for attorneys fees
andP200,000.00 as litigation expenses.On January 24, 2000,
plaintiff PCIBANK filed a verifiedMotion for Summary
Judgment,[6]therein contending that the defenses interposed by the
defendant are sham and contrived, that the alleged financial crisis
pleaded in the Answer is not a fortuitous event that would excuse
debtors from their loan obligations, nor is itan exempting
circumstance under Article 1262 of the New Civil Code where, as
here, the same is attended by bad faith.In the same motion, PCIBANK
also asserts that the deeds of assignments executed in itsfavor are
not contracts of adhesion, and even if they were, the same are
valid.To theMotion for Summary Judgment, defendant interposed
anOpposition[7]insisting that its Answer tendered or raised genuine
and substantial issues of material facts which require full-blown
trial, namely:1.Whether or not defendant received all or part of
the proceeds/receivables due from the contracts mentioned in the
deeds of assignment at the time the complaint was filed;2.Granting
that defendant received those proceeds/receivables, whether or not
defendant fraudulently misappropriated the same;3.Whether or not
defendant is virtually insolvent as a result of the regionwide
economic crisis that hit Asia, causing the Philippine peso to
depreciate drastically; and4.Whether the parties dealt with each
other on equal footing with respect to the execution of the deeds
of assignment as to give the defendant an honest opportunity to
reject the onerous terms imposed therein.Significantly, defendant
did not append to its aforementionedOppositionany affidavit in
support of the alleged genuine issues of material facts mentioned
therein.Before the pending incident (motion for summary judgment)
could be resolved by the trial court, plaintiff PCIBANK waived its
claim for exemplary damages and agreed to reduce its claim for
attorneys fees fromP1,800,000.00 toP1,260,000.00, but made it clear
that its waiver of exemplary damages and reduction of attorneys
fees are subject to the condition that a full and final disposition
of the case is obtainedviasummary judgment.OnMay 16, 2000, the
trial court, acting favorably on PCIBANKs motion for summary
judgment, came out with itsSummary Judgment,[8]thedecretalportion
of which reads:WHEREFORE, judgment is hereby rendered ordering
defendant to pay plaintiff:1.thesum of US$4,553,446.06, or its
equivalent in Philippine currency at the time of payment, with
interest thereon at the rate of 8.27% per annum fromFebruary 24,
1999until fully paid;2.P1,260,000.00 as and for attorneys fees;
and3.the costs of suit.SO ORDERED.Explains the trial court in
rendering itsSummary Judgment:A thorough examination of the parties
pleadings and their respective stand in the foregoing motion, the
court finds that indeed with defendants admission of the first
cause of action there remains no question of facts in issue.
Further, the proffered defenses are worthless, unsubstantial, sham
and contrived.Considering that there is no more issue to be
resolved, the court hereby grants plaintiffs Motion and renders
Judgment in favor of the plaintiff against the defendant based on
their respective pleadings in accordance with Section 4,Rule 35 of
the Rules of Court.In time, petitioner went to the CA whereat its
appellate recourse was docketed asCA-G.R. CV No. 68189.As stated at
the threshold hereof, the CA, in its decision[9]of May 15, 2002,
affirmed with modification theSummary Judgmentrendered by the trial
court, the modification being as regards the award for attorneys
fees which the CA reduced toP1,000,000.00, to wit:IN THE LIGHT OF
ALL THE FOREGOING, the appeal is PARTIALLY GRANTED. The Decision
appealed from is AFFIRMED with theMODIFICATIONTHAT THE AWARD FOR
ATTORNEYS FEES is reduced toP1,000,000.00.SO ORDERED.With its
motion for reconsideration having been denied by the CA in its
Resolution[10]ofJune 3, 2002, petitioner is now with usviathe
present recourse, raising the following issues:IWHETHER OR NOT
THERE IS A GENUINE ISSUE AS TO A MATERIAL FACT WHICH RULES OUT THE
PROPRIETY OF A SUMMARY JUDGMENT.IIWHETHER OR NOT THE AWARD OF
ATTORNEYS FEES IS EXORBITANTOR UNCONSCIONABLE.We DENY.As in the two
courts below, it is petitioners posture that summary judgment is
improper in this case because there are genuine issues of fact
which have to be threshed out during trial, to wit: (a) whether or
not petitioner was able to collect only a portion of the contract
proceeds/receivables it was bound to deliver, remit and tender to
respondent under the several deeds of assignment it executed in
favor of the latter; and (b) whether or not petitioner fraudulently
misappropriated and used for its benefit the said
proceeds/receivables.Ergo, so petitioner maintains, genuine triable
issues of fact are present in this case, which thereby precludes
rendition of summary judgment.We are not persuaded.Under Rule 35 of
the 1997 Rules of Procedure, as amended, except as to the amount of
damages, when there is no genuine issue as to any material fact and
the moving party is entitled to a judgment as a matter of law,
summary judgment may be allowed.[11]Summary or accelerated judgment
is a procedural technique aimed at weeding out sham claims or
defenses at an early stage of litigation thereby avoiding the
expense and loss of time involved in a trial.[12]Under the Rules,
summary judgment is appropriate when there are no genuine issues of
fact which call for the presentation of evidence in a full-blown
trial. Even if on their face the pleadings appear to raise issues,
when the affidavits, depositions and admissions show that such
issues are not genuine, then summary judgment as prescribed by the
Rules must ensue as a matter of law. The determinative factor,
therefore, in a motion for summary judgment, is the presence or
absence of a genuine issue as to any material fact.Agenuine issueis
an issue of fact which requires the presentation of evidence as
distinguished from a sham, fictitious, contrived or false claim.
When the facts as pleaded appear uncontested or undisputed, then
there is no real or genuine issue or question as to the facts, and
summary judgment is called for. The party who moves for summary
judgment has the burden of demonstrating clearly the absence of any
genuine issue of fact, or that the issue posed in the complaint is
patently unsubstantial so as not to constitute a genuine issue for
trial.Trial courts have limited authority to render summary
judgments and may do so only when there is clearly no genuine issue
as to any material fact. When the facts as pleaded by the parties
are disputed or contested, proceedings for summary judgment cannot
take the place of trial.[13]The CA, in its challenged decision,
stated and we are in full accord with it:In the present recourse,
the [petitioner] relied not only on the judicial admissions in its
pleadings, more specifically itsAnswerto the complaint, the
testimony of Maricel Salaveria as well asExhibits A to T-3,adduced
in evidence by the [respondent],during the hearing on its plea for
the issuance, by the Courta quo, of a writ of preliminary
attachment. Significantly, the [petitioner] did not bother filing a
motion for the quashal of theWritissued by the Courta quo.It must
be borne in mind, too, that the [petitioner] admitted, in
itsAnswerthe due execution and authenticity of the documents
appended to the complaint . The [petitioner] did not deny its
liability for the principal amount claimed by the [respondent] in
its complaint. The [petitioner] merely alleged, by way of defenses,
that it failed to pay its account because of the region-wide
economic crisis that engulfed Asia, in July, 1997, and theDeeds of
Assignmentexecuted by it in favor of the [respondent] were
contracts of adhesion:xxxxxxxxxThe [petitioner] elaborated on and
catalogued its defenses in itsAppellants Briefwhat it believed, as
genuine issues.(i)Whether or not [petitioner] received all or part
of the proceeds/receivables due from the construction contracts at
the time the civil action was filed;(ii)Granting that [petitioner]
received the proceeds/receivables from the construction contracts,
whether or not [petitioner] fraudulently misappropriated the
same;(iii)Whether or not [petitioner] had become virtually
insolvent as a resultof the region-wide economic crisis that
hitAsia, causing the Philippine peso to depreciate dramatically;
and(iv)Whether or not [respondent] and [petitioner] dealt with each
other on equal footing with respect to the execution of the deeds
of assignment of receivables as to give [petitioner] an honest
opportunity to reject the onerous terms imposed on it.However, the
[petitioner] failed to append, to itsOppositionto theMotion for
Summary Judgment,Affidavitsshowing the factual basis for its
defenses ofextraordinary deflation, including facts, figures and
data showing its financial condition before and after the economic
crisis and that the crisis was the proximate cause of its financial
distress. It bears stressing that the [petitioner] was burdened to
demonstrate, by itsAffidavitsand documentary evidence, that,
indeed, the Philippines was engulfed in an extraordinary deflation
of the Philippine Peso and that the same was the proximate cause of
the financial distress, it claimed, it suffered.xxxxxxxxxWhere, on
the basis of the records, inclusive of the pleadings of the
parties, and the testimonial and documentary evidence adduced by
the [respondent], supportive of its plea for a writ of preliminary
attachment, the [respondent] had causes of action against the
[petitioner], it behooved the [petitioner] to controvert the same
with affidavits/documentary evidence showing aprima faciegenuine
defense. As the Appellate Court of Illinois so aptly declared:The
defendant must show that he has a bona fide defense to the action,
one which he may be able to establish. It must be a plausible
ground of defense, something fairly arguable and of a substantial
character. This he must show by affidavits or other proof.The trial
court, of course, must determine from the affidavits filed whether
the defendant has interposed a sufficiently good defense to entitle
it to defend, but where defendants affidavits present no
substantial triable issues of fact, the court will grant the motion
for summary judgment.xxxxxxxxxThe failure of the [petitioner] to
append to itsOppositionanyAffidavitsshowing that its defenses were
not contrived or cosmetic to delay judgment created a presumption
that the defenses of the [petitioner] were not offered in good
faith and that the same could not be sustained (Unites
StatesversusFiedler,et al., Federal Reported, 2nd, 578).If, indeed,
the [petitioner] believed it that was prevented from complying with
its obligations to the [respondent], under its contracts, it should
have interposed a counterclaims for rescission of contracts,
conformably with the pronouncement of our Supreme Court,
thus:xxxxxxxxxThe [petitioner] did not.This only exposed the
barrenness of the pose of the [petitioner].The [petitioner] may
have experienced financial difficulties because of the1997 economic
crisisthat ensued inAsia. However, the same does not constitute a
valid justification for the [petitioner] to renege on its
obligations to the [respondent].The [petitioner] cannot even find
solace in Articles 1266 and 1267 of the New Civil Code for, as
declared by our Supreme Court:It is a fundamental rule that
contracts, once perfected, bind both contracting parties, and
obligations arising therefrom have the force of law between the
parties and should be complied with in good faith.But the law
recognizes exceptions to the principle of the obligatory force of
contracts. One exception is laid down in Article 1266 of the Civil
Code, which reads:The debtor in obligations to do shall also be
released when the prestation becomes legally or physically
impossible without the fault of the obligor.Petitioner cannot,
however, successfully take refuge in the said article, since it is
applicable only to obligations to do, and not obligations to give.
An obligation to do includes all kinds of work or service; while an
obligation to give is a prestation which consists in the delivery
of a movable or an immovable thing in order to create a real right,
or for the use of the recipient, or for its simple possession, or
in order to return it to its owner.xxxxxxxxxIn this case,
petitioner wants this Court to believe that the abrupt change in
the political climate of the country after the EDSA Revolution and
its poor financial condition rendered the performance of the lease
contract impractical and inimical to the corporate survival of the
petitioner. (Philippine National Construction Corporation versus
Court of Appeals,et al.,272 SCRA 183, at pages 191-192,supra)The
[petitioner] even failed to append anyAffidavitto
itsOppositionshowing how much it had received from its construction
contracts and how and to whom the said collections had been
appended. The [petitioner] had personal and sole knowledge of the
aforesaid particulars while the [respondent] did
not.Infine,weruleandsohold that the CA did not commit any
reversible error in affirming the summary judgment rendered by the
trial court as, at bottom, there existed no genuine issue as to any
material fact. We also sustain the CAs reduction in the award
ofattorneys fees to onlyP1,000,000.00, given the fact that there
was no full-blown trial.WHEREFORE, the assailed CA decision
isAFFIRMEDin totoand this petition isDENIEDfor lack of merit.Costs
against petitioner.SO ORDERED.
