Oblicon Case Digests Xu

8/13/2019 Oblicon Case Digests Xu

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Ang Yu vs Court of Appeals G.R. No. 109125 December 2, 199

!acts"

Herein plaintiff-petitioners (the buyers) are tenants or lessees of the residential and commercial propertiesowned by respondents Co Unjieng (vendors). On several occasions before October ! "#$! defendantsinformed plaintiffs that they are offering to sell the premises and are giving them priority to ac%uire thesame. &espondents offered to sell the property for '$! and plaintiffs counter-offered to buy for '.

'laintiffs as*ed the respondents to put the offer in writing! in which the respondents acceded (to e+pressapproval or give consent , give in to a re%uest or demand). Upon receipt of the offer! plaintiffs as*ed therespondents specify the terms and conditions of the offer to sell. ince no response was made by therespondents! plaintiffs were compelled to file the complaint against respondents compelling them to sellthe property.he lower court decided in favor or the respondents reasoning that since parties did not agree upon theterms and conditions of the proposed sale! hence there was not contract of sale at all. /urther! it ruledthat if the respondents decide to sell the proper for '"" or lower! then plaintiffs have the right of firstrefusal. 0ggrieved by the decision! plaintiffs appealed to C0.he Court of 0ppeals affirmed the decision of the lower court with modification, 1n resume! there was nomeeting of the minds between the parties concerning the sale of the property. 0bsent such re%uirement!the claim for specific performance will not lie. 0ppellants2 demand for actual! moral and e+emplarydamages will li*ewise fail as there e+ists no justifiable ground for its award.3 C0 however granted theplaintiffs the right of first refusal regardless if the offer price e+ceeds '"".'laintiffs appealed with the upreme court but was denied for insufficiency in form and substance.4hile plaintiff as*ed the C for reconsideration! respondents transferred the properties in %uestion torespondent 5uen &ealty and 6evelopment Corporation in consideration of '".5uen &ealty after the properties came into its possession after the titles had been issued under its name!plaintiffs were as*ed to vacate the premises. 'laintiffs brought the matter to the trial court to enforce thedecision rendered by the C0 that plaintiffs has the right of first refusal. he lower court orderedrespondents to sell the property to plaintiffs for '". &espondents appealed to C0.he C0 reversed the judgment of the lower court declaring that it has no force and effect.Hence this appeal for certiorari.

#ssue"

ay a buyer (in this case 5uen &ealty) be bound by the writ of e+ecution by virtue of the notice of lispendens (while pending lawsuit)! carried over on C 7o. "#"$ issued in the name of 5uen &ealty! atthe time of the latter2s purchase of the property on " 7ovember "" (time when the decision of C0 wasstill pending e+ecution) from the Cu Unjiengs! given that 5uen realty is not a party to the suit when thedecision was rendered8

$el%"

7o. 4hat the petitioners have been granted of in the first place is just a mere 9right of first refusal2. 1n thelaw on sales! the so-called :right of first refusal3 is an innovative juridical relation. 7eedless to point out! itcannot be deemed a perfected contract of sale under 0rticle ";# of the Civil Code. 7either can the rightof first refusal! understood in its normal concept! per se be brought within the purview of an option underthe second paragraph of 0rticle ";


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disregard thereof! given! for instance! the circumstances e+pressed in 0rticle " "Aof the Civil Code! canwarrant a recovery for damages.

he final judgment in Civil Case 7o. ## are mattersthat must be independently addressed in appropriate proceedings. 5uen &ealty! not having beenimpleaded in Civil Case 7o. #


3/79

&agra%o 'r%en v. Nacoco 91 ()*l 50+

!acts"

On Ban ;! ";A! during the Bapanese occupation! aiwan e**osho (Bapanese corporation) ac%uiredthe plaintiff2s property (land with warehouse in 'andacan! anila) for 'hp";>

On 0pril ;! ";$! after the liberation! the U too* control and custody of the aforementioned enemy2sland under ect "A of the rading with the ?nemy 0ct

1n the same year! the Copra ?+port anagement Company occupied the property undercustodianship agreement with the United tates 0lien 'roperty Custodian

1n 0ugust ";$! when the Copra ?+port anagement Co. vacated the property! the 7ational CoconutCorporation (70COCO)! the defendant! occupied it ne+t

agrada Orden (plaintiff) files claims on the property with the Court of /irst 1nstance of anila andagainst the 'hilippine 0lien 'roperty 0dministrator

'laintiff petitions that the sale of the property to aiwan e**osho should be declared null and void asit was e+ecuted under duress! that the interest of the 0lien 'roperty Custodian be cancelled! and that70COCO be given until /ebruary A#! "; to recover its e%uipment form the property and vacate the

premise

he &epublic of the 'hilippines is allowed to intervene

C/1, the defendant ('hilippine 0lien 'roperty 0dministrator) and the intervenor (&') are releasedfrom any liability but the plaintiff may reserve the right to recover from 70COCO reasonable rentalsfor the use and occupation of the premises

he sale of the property to the aiwan a**esho was declared void and the plaintiff was given theright to recover 'hp=!>>>Dmonth as reasonable rental from 0ugust ";$ (date when 70COCOoccupied property) to the date 70COCO vacates the premises

he judgment is appealed to the C

#ssue"

". 4hether or not the defendant is liable to pay rent for occupying the property in %uestion

$el%"

". he C/12s decision that the defendant should pay rent from 0ugust ";$ to /ebruary A#! "; wasreversed! costs against the plaintiff.

&ationale,

Obligations can only arise from four sources, law! contracts or %uasi-contracts! crime! or negligence (0rt

">#! panish Civil Code).here were no laws or an e+press agreement between the defendant or the 0lien 'roperty Custodian withthe plaintiff regarding payment of rent. he property was ac%uired by the 0lien 'roperty 0dministratorthrough law (rading with the ?nemy 0ct) on the sei@ure of alien property and not as a successor to theinterests of the latter. here was no contract of rental bDw them and aiwan a**esho. 70COCO enteredpossession of the property from the 0lien 'roperty Custodian without any e+pectation of liability for itsuse. 70COCO did not commit any negligence or offense! and there was no contract! implied orotherwise! entered into! that can be used as basis for claiming rent on the property before the plaintiffobtained the judgment annulling the sale to aiwan a**esho. he plaintiff has no right to claim rent from70COCO.


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1mportant 7otes

0rticle ""< of the 7ew Civil Code states that there are sources of obligations, laws! contracts! %uasi-contracts! felonies (acts or omissions punished by law)! and %uasi-delicts..

('(-& CAR #NC., vs Comman%o &ecur*t/ -+0 3a/ 22, 194+

!acts"

'laintiff! a car dealer! entered into a contract with defendant! a security agency! its duty is to guard theformer2s premises from theft! robbery! vandalism and other unlawful acts. On a certain night! thesecurity guard deployed by the defendant! without authority neither from the plaintiff nor fromdefendant! drove a car! which was entrusted to the plaintiff by a customer for service andmaintenance! outside of the plaintiff2s compound and around the city which after the security guardlost control of! fell into a ditch! causing it severe damage. 'laintiff complained against the securityguard for %ualified theft. 4hile the car is undergoing repair! plaintiff rented a car for its customer for;< days until the car is fi+ed! and too* pain to repair the damaged car.

hen plaintiff instituted a claim against the defendant for recovery of the actual damages it incurred dueto the unlawful act of the latter2s personnel! citing inter alia the 'ar. of the contract that defendantaccepts :sole responsibility for the acts done during their watch hours3. 6efendant on the other hand!interposed! that it may be liable but its liability is limited under 'ar. ; of said contract providing, :that itsliability :shall not e+ceed one thousand ('"!>>>.>>) pesos per guard post3. o %uote the contract,

9'ar. ;. E 'arty of the econd 'art (defendant) through the negligence of its guards! after aninvestigation has been conducted by the 'arty of the /irst 'art (plaintiff) wherein the 'arty of the econd'art has been duly represented shall assume full responsibilities for any loss or damages that may occurto any property of the 'arty of the /irst 'art for which it is accountable! during the watch hours of the'arty of the econd 'art! provided the same is reported to the 'arty of the econd 'art within twenty-four(A;) hours of the occurrence! e+cept where such loss or damage is due to force majeure! providedhowever that after the proper investigation to be made thereof that the guard on post is found negligentand that the amount of the loss shall not e+ceed O7? HOU076 ('"!>>>.>>) '?O per guard post.2

9'ar. E he party of the econd 'art assumes the responsibility for the proper performance by theguards employed! of their duties and (shall) be solely responsible for the acts done during their watchhours! the 'arty of the /irst 'art being specifically released from any and all liabilities to the former2semployee or to the third parties arising from the acts or omissions done by the guard during their tour of

duty.2 ...

#

he trial court rendered judgment in favor of the defendant limiting its liability to '"!>>>.>> under par. ;and said that under paragraph ! it is the customer who should bring the suit before the court.

#ssue"

4hether or not the plaintiff is entitled to recover its e+penses from the defendant on account of the latter2semployee2s unlawful act! despite the provision under paragraph it is the = rdparty who should institutethe claim which held the plaintiff harmless from any and all liabilities of the defendant2s employees8

$el%"

Fes. =rdparties! the customer in the case at bar! are not bound by the contract between the defendantand plaintiff. 5ut the plaintiff is in law liable for the damages caused the customer2s car! which had beenentrusted into its custody. 'laintiff therefore was in law justified in ma*ing good such damages and relyingin turn on defendant to honor its contract and indemnify it for such undisputed damages! which had beencaused directly by the unlawful and wrongful acts of defendant2s security guard in breach of their contract.

0s ordained in 0rticle ""! Civil Code! :obligations arising from contracts have the force of law betweenthe contracting parties and should be complied with in good faith.3'laintiff in law could not tell its customer! as per the trial court2s view! that :under the Guard erviceContract it was not liable for the damage but the defendant3 E since the customer could not holddefendant to account for the damages as he had no privity of contract with defendant. uch an approachof telling the adverse party to go to court! notwithstanding his plainly valid claim! aside from its ethicaldeficiency among others! could hardly create any goodwill for plaintiff2s business! in the same way that


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defendant2s baseless attempt to evade fully discharging its contractual liability to plaintiff cannot bee+pected to have brought it more business.

Cangco vs. 3an*la Ra*lroa% GR 12191, 1 'ctober 1916

!acts"

'etitioner Cangco is employed by defendant anila &ailroad Co. in anila! and by virtue of hisemployment! he is entitled free ride from his house in an ateo to anila and vice-versa. On a fatefulnight around #,>> ' at the station of an ateo where it was dimly lighted ! petitioner while alighting thetrain (though it was still moving very slowly to the point of stop)! not *nowing that there are sac*s of melonpiled at the edge of the platform stepped on the objects! causing him to slip off balance. 'laintiff wasdrawn under the car in an unconscious condition and as a result seriously injured him. His arm wasamputated and he was prevented from wor*ing. He spent appro+ '#>> pesos for his medical e+penses.

hereupon! he sued anila &ailroad to recover damages on the ground of negligence of the servantsand employees of the defendant. he C/1 ruled that although there is an apparent negligence on the partof the defendant through its employees but nevertheless! the plaintiff cannot recover because he hadfailed to use due caution in alighting from the coach. Hence this appeal.

#ssue"

4hether or not anila &ailroad Company is liable to the plaintiff for the negligent acts of its employees!notwithstanding that plaintiff was also negligent8

$el%"

Fes 4hile the plaintiff may have been negligent! the defendant is also negligent. he case falls under thecategory that of (") culpa contractual! that is! contract of carriage by providing the passengers safe travelbeginning from the time he1t 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 thebreach of that contract by reason of the failure of defendant to e+ercise due care in its performance. hatis 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 ">= of the Civil Code! which can berebutted by proof of the e+ercise of due care in their selection and supervision. 0rticle ">= of the CivilCode is not applicable to obligations arising e+ contractu! but only to e+tra-contractual obligations E or touse the technical form of e+pression! that article relates only to culpa a%uiliana and not to culpacontractual.respondeat superior - One who places a powerful automobile in the hands of a servant whom he *nows tobe ignorant of the method of managing such a vehicle! is himself guilty of an act of negligence whichma*es him liable for all the conse%uences of his imprudence.

Culpa 0%uiliana or e+tra-contractual culpa

he liability arising from e+tra-contractual culpa is always based upon a voluntary act or omission which!without willful intent! but by mere negligence or inattention! has caused damage to another. /rom thisarticle two things are apparent, (") hat when an injury is caused by the negligence of a servant or

employee there instantly arises a presumption of law that there was negligence on the part of the masteror employer either in selection of the servant or employee! or in supervision over him after the selection!or bothI and (A) that that presumption is juris tantum and not juris et de jure! and conse%uently! may berebutted. 1t follows necessarily that if the employer shows to the satisfaction of the court that in selectionand supervision he has e+ercised the care and diligence of a good father of a family! the presumption isovercome and he is relieved from liability.6istinction between non-contractual and contractual Obligationhe fundamental distinction between obligations of this character and those which arise from contract!rests upon the fact that in cases of non-contractual obligation it is the wrongful or negligent act oromission itself which creates the vinculum juris! whereas in contractual relations the vinculum juris e+ists


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independently of the breach of the voluntary duty assumed by the parties when entering into thecontractual relation.he mere fact that a person is bound to another by contract does not relieve him from e+tra-contractualliability to such person.Comparative negligence - if the accident was caused by plaintiff2s own negligence! no liability is imposedupon defendant2s negligence and plaintiff2s negligence merely contributed to his injury! the damagesshould be apportioned. 1t is! therefore! important to ascertain if defendant was in fact guilty of negligence.

est on Contributory negligence.

4as there anything in the circumstances surrounding the plaintiff at the time he alighted from the trainwhich would have admonished a person of average prudence that to get off the train under the conditionsthen e+isting was dangerous8

Gut*erre7 vs Gut*erre7 19+16


7/79

!acts"

On /ebruary A! "=>! a passenger truc* and an automobile of private ownership collided while attemptingto pass each other on the alon bridge on the anila outh &oad in the municipality of Jas 'iKas. hediver of the car is an "# yDo boy! son of the car2s owners. 1t was found by the trial court that both the boyand the driver of the autobus were negligent by which neither of them were willing to slow up and give theright of way to the other. 'laintiff is the passenger of the bus who as a result of the incident fractured hisright leg to his damage and prejudice. hus! plaintiff sued the boy! his parents as owners of the car! thebus driver and its owner for damages. he trial court ruled in favor of plaintiff.Hence! this appeal.

#ssue"

How should civil liability be imposed upon parties in the case at bar8

$el%"

he case is dealing with the civil liability of parties for obligations which arise from fault or negligence./or the boy! it is his father who is liable (based on culpa a%uiliana) to the plaintiff because of the followingconditionsI first! the car was of general use of the family! second! the boy was authori@ed or designatedby his father to run the car! third! at the time of the collision the car is used for the purpose not of thechild2s pleasure but that of the other members of the car owner2s family members. he 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 theowner2s business! so that he is liable for the negligence of the child because of the relationship of masterand servant./or the chauffer and the bus owner (based on culpa contractual)! their liability rests upon the contract (thesafety that is assured by the operator upon the passenger) whereas that degree of care e+pected fromthe chauffer is lac*ing.

Araneta v. De 8o/a


8/79

!acts"

&espondent 6e Boya! general manager! proposed to the board of 0ce 0dvsertising Corp.! to send&icardo aylor to the U to ta*e up special studies in television. he 5oard did not act upon the proposal.7evertheless! sent aylor to the U. &espondent assured 0ntonio 0raneta! a compny director! thate+penses will be handled by other parties which later was confirmed through a memorandum.4hile abroad! aylor continued to receive his salaries. he items corresponding to his salaries appearedin vouchers prepared upon orders of! and approved by! the respondent. 'etitioner Juis 0raneta! signedthree of the vouchers! others signed by either respondent or Licente 0raneta! the company treasurer. 0lltold! 0ce 0dvertising disbursed '!>;=.A> on account of aylor2s travel and studies.hen a year after! 0ce 0dvertising filed a complaint before the C/1 against respondent for the recovery ofthe total sum disbursed to aylor alleging that the trip was made without its *nowledge! authority orratification.he respondent in his answer denied the charge and claimed that the trip was nonetheless ratified by thecompany2s board and at any event he had the discretion as general manager to authori@e the trip whichwas for the company2s benefit.

0 third party complaint was file by respondent against! Licente and Juis and aylor. &espondent provedthat some of the chec*s to cover the e+penses of aylor were signed by Licente and Juis.1n their defense! Juis and Licente claimed that they signed the chec*s in good faith as they wereapproved by respondent.he C/1 rendered judgement ordering the respondent to pay 0ce for the amount disbursed with interest at

a legal rate until full payment and dismissed the third party complaint.&espondent appealed to C0. C0 affirmed the decision of trial court with regard to its decision in favor of

0ce but reversed the dismissal of the = rdparty complaint. C0 found as a factthat aylor2s trip had neitherbeen authori@ed nor ratified by 0ce. 1t held that Juis and Licente were also privy to the authori@eddisbursement of corporate monies with the respondent. hat when they approved signed the chec*s! theyhave given their stamp of approval. 0s it is established that corporate funds were disbursed unauthori@ed!the case is of a simple %uasi-delict committed by them against the corporation.Hence! this appeal.

#ssue"

4hether or not petitioner is guilty of %uasi-delict! notwithstanding that he was occupying a contractualposition at 0ce8 Otherwise stated! whether or not %uasi-delict (tort) may be committed a party in acontract8

$el%"

Fes. he e+istence of a contract between the parties constitutes no bar to the commission of a tort by oneagainst the other and the conse%uent recovery of damages. His guilt is manifest on account of! in spite ofhis being a vice-president and director of 0ce! petitioner remained passive! through out the period ofaylor2s trip and to the payment of the latter2s salary. 0s such he neglected to perform his duties properlyto the damage of the firm of which he was an officer.

Barredo vs. Garcia and Almario 1942


9/79

!acts"

0 head-on collision between a ta+icab owned by 5arredo and a carretela occurred. he carretela wasoverturned and one of its passengers! a "$-year old boy! the son of Garcia and 0lmario! died as a resultof the injuries which he received. he driver of the ta+icab! a employee of 5arredo! was prosecuted forthe crime and was convicted. 4hen the criminal case was instituted! Garcia and 0lmario reserved theirright to institute a separate civil action for damages. ubse%uently! Garcia and 0lmario instituted a civilaction for damages against 5arredo! the employer of the ta+icab driver.1t was found that /ontanilla has been found to have been previously violating traffic rules.5arredo set up his defense claiming that being only subsidiarily liable under the &'C and the accused notbeing imputed nor adjudged to pay damages in a civil action! then it is a bar for an action against him.he C/1 ruled in favor of the plaintiff awarding them 'A!>>>.>> against the 5arredo.

#ssues"

4hether or not an employer (5arredo) should be held principally and directly liable for the negligent act ofhis employee (or for the criminal act or omission of the employee)8

0propos the employee is ac%uitted in the criminal case and the employer is e+onerated as subsidiaryliable! will it bar the civil action based on %uasi-delict a.*.a culpa e+tra-contractual or culpa a%uiliana84hether or not the law is restrictive on the liability of the employer as subsidiary to that of the accused(confining itself within the provision of the penal code)8

$el%"

16 Fes. 0n employer (5arredo) is principally liable for the negligent acts (or even criminal acts) of hisemployee in the performance of his duties) because it is presumed by law that the employer (aswell as the father! guardian ! etc.) committed an act of negligence in not preventing or avoidingthe damage. 1t is this fault that is condemned by law.

26 7o. he reason for this is that the civil liability of the employer (in the criminal case) is groundedupon the crime committed by its employee! while the liability of the employer (in %uasi-delict) iscompletely attributable to itself independent of the criminal act of the employee that is by notcarefully selecting and supervising its employees. hus,

Cuasi-delitos! include all acts in which :any *ing of fault or negligence intervenes3 which means even ifsuch act or omission has nothing to do with the actual resulting damage! li*e! for e+ample! then the ownerof a ta+i company hires a driver who is *nown to him (or should have been *nown to him) that the latter isguilty of violating traffic rules. 1n case the driver causes damage as a result of his performance as a driver!then the owner is liable for the damage! not for the act of omission of the driver (because it is covered bythe penal code which ma*es the criminal or felon primarily liable for his injury cause) but for its negligencein employing the driver.

+6 0rticles A> and A" of the 'enal Code! after distributing in their own way the civil responsibilitiesamong those who! for different reasons! are guilty of felony or misdemeanor! ma*e such civilresponsibilities applicable to enterprises and establishments for which the guilty parties renderservice! but with subsidiary character! that is to say! according to the wording of the 'enal Code!in default of those who are criminally responsible. 1n this regard! the Civil Code does not coincidebecause article ">= says, :he obligation imposed by the ne+t preceding article is demandable!not only for personal acts and omissions! but also for those of persons for whom another isresponsible.3 (7.5. cause of liability is the bond or tie between the one who caused the injury andhis employer! father! guardian! etc.) 0mong the persons enumerated are the subordinates and

employees of establishments or enterprises! either for acts during their service or on the occasionof their functions. 1t is for this reason that it happens! and it is so observed in judicial decisions!that the companies or enterprises! after ta*ing part in the criminal cases because of theirsubsidiary civil responsibility by reason of the crime! are sued and sentenced directly andseparately with regard to the obligation! before the civil courts.

4or*men and employees should be carefully chosen and supervised in order to avoid injury to the public.1t is the masters or employers who principally reap the profits resulting from the services of these servantsand employees. 1t is but right that they should guarantee the latter2s careful conduct for the personnel andpatrimonial safety of others.


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4e will not use the literal meaning of the law to smother and render almost lifeless a principle of suchancient origin and such full-grown development as culpa a%uiliana or cuasi-delito! which is conserved andmade enduring in articles ">A to ""> of the panish Civil Code.7.5. 1t is that 5ond ( in the performance of the subordinate of the act) which will determine whether or notthe superior (employer! parents may be held liable.


11/79

l Cano vs $*ll

!acts"

6efendant &eginald Hill! a minor! married at the time of the occurrence! *illed 0gapito. He wasapprehended and charged appropriately before C/1. He ac%uitted on the ground that his act was notcriminal! because of :lac* of intent to *ill! coupled with mista*e.3hereupon! the parents of 0gapito! filed a complaint for recovery of damages against the defendant andhis father! the defendant arvin Hill! with whom he was living and getting subsistence! for the *illing by&eginald of the son of the plaintiffs.6efendants filed a motion to dismiss on the grounds that, first! the civil action is barred by the ac%uittal of&eginald! andI second! the father cannot be held liable for the act of his son because the latter is alreadymarried at the time of the commission! thus! is already emancipated.

#ssues"

4hether or not %uasi-delict is restricted to negligence and cannot apply to voluntary acts or omissionsproducing injury ( or felony)84hether or not a father may be held liable for the act of his emancipated child constituting %uasi-delict8

$el%"

7o. o repeat the 5arredo case! under 0rticle A"


12/79

'ccena vs #cam*na 1990 Ant*ue6

!acts"

On ay ="! "0ccused pleaded not guilty. rial ensued and judgment was rendered finding the accused guilty beyondreasonable doubt for slight oral deflation sentencing her to pay a fine of '>.>> and subsidiary in case ofinsolvency but no damages were awarded to petitioner as held by the trial court.

6isagreeing! petitioner sought relief with the &C which affirmed the decision of the C.

Hence! this appeal.

#ssue"

4hether or not the instant appeal should be dismissed on the ground that the decision rendered by the&C has become final8

4hether or not damages are warranted to petitioner8

$el%"

7o. 4hile the criminal aspect of the case has become final! the civil aspect did not due to the timelyappeal filed by petitioner with regard to the civil aspect of the case ('eeple vs Coloma).

Fes. ?very person criminally liable for a felony is also civilly liable (0rt. ">>! &'C). Ji*ewise! article AA"of the 7ew Civil Code provides that moral damages may be recovered in libel! slander or any other formof defamation.

1n the ultimate analysis! what gives rise to the civil liability is really the obligation of everyone to repair orto ma*e whole the damage caused to another by reason of his act or omission! whether done intentionalor negligently and whether or not punishable by law.


13/79

:anal vs ;a%eo 194

!acts"

'etitioner herein is one of the complainants in the criminal cases filed against &osario Claudio. Claudio ischarged with " separate information for violation of 5' AA. Claudio pleaded not guilty! thus trial ensued.'etitioner moved to intervene through private prosecutor but it was rejected by respondent judge on theground that the charge is for the violation of 5atas 'ambansa 5lg. AA which does not provide for any civilliability or indemnity and hence! :it is not a crime against property but public order.3 'etitioner filed amotion for reconsideration but was denied by the respondent judge. Hence this appeal.

#ssue"

4hether or not a private prosecutor may intervene in the prosecution for violation of 5' AA (a specialpenal law) which does not provide for civil liability87ote,1ntervention of a private prosecutor is for the purpose of protecting the private interest of the complainantto recover damages.

$el%"

Fes Under 0rt. ">> of the &'C! 9every person criminally liable for a felony is also civilly liable.2 hus a

person committing a felony offends namely (") the society in which he lives in or the political entity calledthe tate whose law he had violatedI and (A) the individual member of that society whose person! right!honor! chastity or property was actually or directly injured or damaged by the same punishable act oromission.4hile an act or omission is felonious because it is punishable by law! it gives rise to civil liability not somuch because it is a crime but because it caused damage to another. Liewing things pragmatically! wecan readily see that what gives rise to the civil liability is really the obligation and the moral duty ofeveryone to repair or ma*e whole the damage caused to another by reason of his own act or omission!done intentionally or negligently! whether or not the same be punishable by law. 1n other words! criminalliability will give rise to civil liability only if the same felonious act or omission results in damage or injury toanother and is the direct and pro+imate cause thereof. 6amage or injury to another is evidently thefoundation of the civil action. uch is not the case in criminal actions for! to be criminally liable! it isenough that the act or omission complained of is punishable! regardless of whether or not it also causes

material damage to another. (angco! 'hilippine Jaw on orts and 6amages! "


14/79

:r*c


15/79

reasonably creates undue ris* or harm to others. 1t may be the failure to observe that degree of care!precaution! and vigilance which the circumstances justify demand! or the omission to do something whicha prudent and reasonable man! guided by considerations which ordinarily regulate the conduct of humanaffairs! would do.On the second issue! it bears emphasi@ing that a person claiming damages for the negligence of anotherhas the burden of proving the e+istence of fault or negligence causative of his injury or loss. he factsconstitutive of negligence must be affirmatively established by competent evidence! " not merely bypresumptions and conclusions without basis in fact. 'rivate respondents! in establishing the culpability ofpetitioner! merely relied on the aforementioned report submitted by a team which made an ocularinspection of petitioner2s school building after the typhoon. 0s the term imparts! an ocular inspection isone by means of actual sight or viewing. 4hat is visual to the eye through! is not always reflective of thereal cause behind.1n the present case! other than the said ocular inspection! no investigation was conducted to determinethe real cause of the partial unroofing of petitioner2s school building.


16/79

:ar7aga vs CA 199 D-AY6

!acts"

'etitioner2s wife died and her wish is to be buried before Christmas.0fter her death on 6ec A"! ">! in fulfillment of her wishes! petitioner went to respondent2s store toin%uire the availability of materials to be used in building his wife2s niche. &espondent2s employeeadvised petitioner that to come bac* the following morning. hat following morning! petitioner made apayment of 'A!">> to secure the delivery of the materials. However! the materials were not delivered ontime. everal times petitioner went to respondent2s store to as* for the delivery. Jater that day! thepetitioner was forced to dismiss his laborer since there is nothing to wor* with for the materials did notarrive.'etitioner however purchased the materials from other stores.

0fter his wife was buried! he sued respondent for damages because of delay/or his part! respondent offered a lame e+cuse of fortuitous event that the reason for delay is because thetruc*s tires were flat.

#ssue"

4hether or not respondent is guilty of delay that will entitle petitioner for damages! although it was notspecified in the invoice the e+act time of delivery8

$el%"

Fes he law e+pressly provides that those who in the performance of their obligation are guilty of fraud!negligence! or delay and those who in any manner contravene the tenor thereof! are liable for damages.(0rt "" of the Civil Code).he appellate court appears to have belittled petitioner2s submission that under the prevailingcircumstances time was of the essence in the delivery of the materials to the grave site. However! we findpetitioner2s assertion to be anchored on solid ground. he niche had to be constructed at the very least onthe twenty-second of 6ecember considering that it would ta*e about two (A) days to finish the job if theinterment was to ta*e place on the twenty-fourth of the month. &espondent2s delay in the delivery of theconstruction materials wasted so much time that construction of the tomb could start only on the twenty-third. 1t could not be ready for the scheduled burial of petitioner2s wife. his undoubtedly prolonged thewa*e! in addition to the fact that wor* at the cemetery had to be put off on Christmas day.

his case is clearly one of non-performance of a reciprocal obligation.$-$>


18/79

?+emplary 6amages

7o. 0s to the %uestion of e+emplary damages! we sustain the appellate court in eliminating the samesince it found that there was no bad faith on the part of 7'C and that neither can the latter2s negligencebe considered gross. 1n 6ee Hua Jiong ?lectrical ?%uipment Corp. v. &eyes! ("; C&0


19/79

!acts"

0 6eed of 0bsolute ale with 0ssumption of ortgage was e+ecuted between anuel 5ehis asvendorDassignor and &ayandayan and 0rceKo as vendeesDassignees for the sum of 'A>!>>>.>>. On thesame day! &ayandayan and 0rceKo together with anuel 5ehis e+ecuted another 0greement embodyingthe real consideration of the sale of the land in the sum of 'A!;>>!>>>.>>. hereafter! &ayandayan and

0rceKo negotiated with the principal stoc*holder of the ban*! ?ngr. ?dilberto 7atividad in anila! for theassumption of the indebtedness of anuel 5ehis and the subse%uent release of the mortgage on the

property by the ban*.&ayandayan and 0rceKo did not show to the ban* the 0greement with anuel 5ehis providing for the realconsideration of 'A!;>>!>>>.>> for the sale of the property to the former. ubse%uently! the ban*consented to the substitution of plaintiffs as mortgage debtors in place of anuel 5ehis in a emorandumof 0greement between private respondents and the ban* with restructured and liberali@ed terms for thepayment of the mortgage debt.1nstead of the ban* foreclosing immediately for non-payment of the delin%uent account! petitioner ban*agreed to receive only a partial payment of '";=!>>>.>> by installment on specified dates. 0fter paymentthereof! the ban* agreed to release the mortgage of anuel 5ehisI to give its consent to the transfer oftitle to the private respondentsI and to the payment of the balance of 'A>>!>>>.>> under new terms with anew mortgage to be e+ecuted by the private respondents over the same land.However! petitioner ban* did not comply with the O0 with respondents because of a supervening eventnamely the protest made by Cristina 5ehis! wife of anual 5ehis! alleging that she did not consent to thenegotiation made as regards the 6eed of absolute sale with 0ssumption of ortgage by her husband withthe respondents and that her signature was forged by respondents. he petitioner ban* then toldrespondents to settle the matter with rs. 5ehis.

0t that point! petitioner ban* cancelled its O0 with respondents because, first! the latter failed to settlethe protest of rs. 5ehisI and! secondly! the terms of the emorandum of 0greement have not been fullycomplied with as the payments were not made on time on the dates fi+ed thereinI and third! their consentto the emorandum of 0greement was secured by the plaintiffs thru fraud as the 5an* was not shown the

0greement containing the real consideration of 'A!;>>.>>>.>> of the sale of the land of anuel 5ehis toplaintiffs.hereafter! the petitioner ban* returned the initial payment of '";=!>>>.>> to respondents.1n the mean time! petitioner entered into an agreement with Halsema 5an* that the latter would assumethe mortgage of anuel 5ehis in consideration of 'A"!>!>>>.>>! and not 'A>!>>>.>> as represented to petitioner ban*. 0ccording to petitioner ban*! hadit *nown of the real consideration for the sale! i.e. 'A.; million! it would not have consented into enteringthe emorandum of 0greement with &ayandayan and 0rceKo as it was put in the dar* as to the realcapacity and financial standing of private respondents to assume the mortgage from anuel 5ehis.'etitioner ban* pointed out that it would not have assented to the agreement! as it could not e+pect theprivate respondents to pay the ban* the appro+imately '=;=!>>>.>> mortgage debt when privaterespondents have to pay at the same time 'A!;>>!>>>.>> to anuel 5ehis on the sale of the land.


20/79

he *ind of fraud that will vitiate a contract refers to those insidious words or machinations resorted to byone of the contracting parties to induce the other to enter into a contract which without them he would nothave agreed to. "=imply stated! the fraud must be the determining cause of the contract! or must havecaused the consent to be given. 1t is believed that the non-disclosure to the ban* of the purchase price ofthe sale of the land between private respondents and anuel 5ehis cannot be the :fraud3 contemplatedby 0rticle "==# of the Civil Code. ";/rom the sole reason submitted by the petitioner ban* that it was *eptin the dar* as to the financial capacity of private respondents! we cannot see how the omission orconcealment of the real purchase price could have induced the ban* into giving its consent to theagreementI or that the ban* would not have otherwise given its consent had it *nown of the real purchaseprice.

he deceit which voids the contract e+ists where the party who obtains the consent does so bymeans of concealing or omitting to state material facts! with intent to deceive! by reason of whichomission or concealment the other party was induced to give a consent which he would not otherwisehave given (olentino! Commentaries and Burisprudence on the Civil Code! Lol. 1L! p. ;#>). 1n thiscase! the consideration for the sale with assumption of mortgage was not the inducement todefendant ban* to give a consent which it would not otherwise have given.

Conse%uently! not all the elements of fraud vitiating consent for purposes of annulling a contract concur!to wit, (a) 1t was employed by a contracting party upon the otherI (b) 1t induced the other party to enterinto the contractI (c) 1t was seriousI andI (d) 1t resulted in damages and injury to the party see*ingannulment. "#'etitioner ban* has not sufficiently shown that it was induced to enter into the agreement bythe non-disclosure of the purchase price! and that the same resulted in damages to the ban*. 1ndeed! the

general rule is that whosoever alleges fraud or mista*e in any transaction must substantiate hisallegation! since it is presumed that a person ta*es ordinary care for his concerns and that privatetransactions have been fair and regular. 'etitioner ban*2s allegation of fraud and deceit have not beenestablished sufficiently and competently to rebut the presumption of regularity and due e+ecution of theagreement.

;elefast vs Castro 196


21/79

!acts"

1n "$! ofia Castro-Crouch (plaintiff-respondent) was vacationing in 'angasinan in her parent2s house.hat same year in 7ovember! her mother! Consolacion died. On the day of her mother2s death sheaddressed a telegram to her father 1gnacio who was then in the U announcing Consolacion2s death. hetelegram was accepted by elefast (defendant-petitioner) in its 6agupan office after payment of re%uiredfees or charges.he telegram never reached the addressee. Consolacion was interred without her husband and childrenbesides ofia.ofia went bac* to the U and learned that the telegram never reached her father. hus! she and hersiblings and their father sued elefast for damages arising from the breach of contract by the defendant.'etitioner-defendant elefast interposed that the reason why the telegram never reached the addresseeis because of :technical and atmospheric factors beyond its control.3 1t appears though that no attemptmade by defendant to inform ofia for that matter or any reason at all that e+plains why the telegramreached the addressee.he C/1 ruled in favor of ofia and her co-plaintiffs awarding her damages she prayed for. elefastappealed before the 10C which affirmed the decision of the C/1.Hence this appeal.

#ssues"

4hether or not petitioner is liable for damages arising from the breach of contract even though that therewas a technical and atmospheric factors that lead to its failure to comply with terms of the contract8

$el%"

Fes. 0rt. "" of the Civil Code provides! :hose who in the performance of their obligation are guilty offraud! delay! negligence! and those who in any manner contravene the tenor thereof! are liable fordamages. 0rt. A"


22/79

1n "$;! plaintiff 0gcaoili applied with the defendant G1 to purchase a house and lot in ari*ina. 1n thefollowing year in a letter! respondent approved petitioner2s application with the advise 9to occupy the saidhouse immediately2 and 9failure to occupy the same from the receipt of the notice! plaintiff2s applicationshall be considered disapproved and will be awarded to another applicant.2'laintif lost no time in occupying the house. However! he could not stay in it and had to leave thefollowing day because the house was nothing more than a shell! in such a state of incompleteness thatcivili@ed occupation was not possible. 0gcaoili did however as* a homeless friend! a certain Lillanueva! tostay in the premises as some sort of watchman! pending completion of the construction of the house.

0gcaoili thereafter complained to the G1! to no avail.he G1 as*ed 0gcaoili to pay the monthly amorti@ations and other fees. 0gcaoili paid the first monthlyinstallment and the incidental fees! =but refused to ma*e further payments until and unless the G1completed the housing unit. 4hat the G1 did was to cancel the award and re%uire 0gcaoili to vacatethe premises. ;0gcaoili reacted by instituting suit in the Court of /irst 1nstance of anila for specificperformance and damages.he C/1 ruled in favor of 0gcaoili declaring the cancellation of the award illegal and viod and orderingG1 to respect and enforce the aforesaid award! and to complete the house in %uestion to ma*e thesame habitable and authori@ing G1 to collect the monthly amorti@ation only after said house shall havebeen completed.Hence this present appeal.G1 argued the following,

". 0gcaoili had no right to suspend payment of amorti@ations on account of the incompleteness of

his housing unit! since said unit had been sold :in the condition and state of completion thene+isting ... (and) he is deemed to have accepted the same in the condition he found it when heaccepted the award.

A. 'erfection of the contract of sale between it and 0gcaoili being conditioned upon the latter2simmediate occupancy of the house subject thereof! and the latter having failed to comply with thecondition! no contract ever came into e+istence between them.

#ssues"

". 4hether or not 0gcaoli may suspend payment of amorti@ation on account of the incompleteness of hishousing unit! since said unit had been sold :in the condition and state of completion then e+isting ... (and)he is deemed to have accepted the same in the condition he found it when he accepted the award84hether or not there was a valid contract of sale between 0gcaoili and G18

A. 4hether or not 0gcaolili repudiated his contract with G18

$el%"

On the first issue! Fes! because 0rt. ""$ of the Civil Code provides that :in reciprocal obligations! neitherparty incurs in delay if the other does not comply or is not ready to comply in a proper manner with what isincumbent upon him.3 Certainly! the prestation of the contract which was ratified upon approval of G1(presupposing the meeting of the minds of G1 and 0gcaoli) is the house and lot! on the condition thatthe house should be habitable. hus, :here was then a perfected contract of sale between the partiesIthere had been a meeting of the minds upon the purchase by 0gcaoili of a determinate house and lot inthe G1 Housing 'roject at 7ang*a ari*ina! &i@al at a definite price payable in amorti@ations at '=".$per month! and from that moment the parties ac%uired the right to reciprocally demand performance.3

here would be no sense to re%uire the awardee to immediately occupy and live in a shell of a house! astructure consisting only of four walls with openings! and a roof! and to theori@e! as the G1 does! thatthis was what was intended by the parties! since the contract did not clearly impose upon it the obligationto deliver a habitable house! is to advocate an absurdity! the creation of an unfair situation. 5y anyobjective interpretation of its terms! the contract can only be understood as imposing on the G1 anobligation to deliver to 0gcaoili a reasonably habitable dwelling in return for his underta*ing to pay thestipulated price. ince G1 did not fulfill that obligation! and was not willing to put the house in habitablestate! it cannot invo*e 0gcaoili2s suspension of payment of amorti@ations as cause to cancel the contractbetween them. 1t is a+iomatic that :(i)n reciprocal obligations! neither party incurs in delay if the other doesnot comply or is not ready to comply in a proper manner with what is incumbent upon him.3"


23/79

Na


24/79

'hilippine 5ar 0ssociation! an 7GO! entered into a contract with UCC1 on administration basis and 7a*pilN ons to construct a buildingI the latter will provide the design and specifications of the said building.wo years after the building is constructed and is being leased by '50! an earth%ua*e! unusually stronghit etro anila. 0s a result! the building is severely damaged (partially collapsed) which compelled thetenants to vacate the premises. '50! sued UCC1 and 7a*pil. ince the case involves a high degree oftechnicality to ascertain the cause of action! the trial court appointed a Commissioner to report to him hisfindings.

0ccording to the Commissioner the damage is caused by,". ?arth%ua*eA. defects in the plans and specifications prepared by the third-party defendants2 architects.=. deviations from said plans and specifications by the defendant contractors;. failure of the latter to observe the re%uisite wor*manship in the construction of the building and of

the contractors! architects. failure of the owners to e+ercise the re%uisite degree of supervision in the construction of subject

buildinghe trial court agreed with the findings of the Commissioner e+cept as to the holding that the owner ischarged with full nine supervision of the construction. he Court sees no legal or contractual basis forsuch conclusion. 6efendants appealed the decision of the trial court to C0.C02s decision is to affirm the lower courts decision with the additional 'A>> damages.

#ssue"

he pivotal issue in this case is whether or not an act of God-an unusually strong earth%ua*e-whichcaused the failure of the building! e+empts from liability! parties who are otherwise liable because of theirnegligence.

$el%"

7o. 0& " years.

Upon the other hand! ""


25/79

0s already discussed! the destruction was not purely an act of God. ruth to tell hundreds ofancient buildings in the vicinity were hardly affected by the earth%ua*e. Only one thing spells out the fataldifferenceI gross negligence and evident bad faith! without which the damage would not have occurred.

( v. Delos Angeles

!acts"

U' petitioner entered into a contract with 0JUCO respondent! a logging company! where the latter isgranted a right to cut!collect and remove timber from the land grant in return for a consideration of money.5ut respondent incurred unpaid account amounting to 'AA> and despite repeated demands! it still failedto settle its dues. U' sent a notice to rescind the contract! and respondent e+ecuted an instrument!


26/79

entitled :0c*nowledgment of 6ebt and 'roposed anner of 'ayments3 wherein it undertoo* to settle thebalance on or before Bune "$ and in case of non-fulfillment! U' is entitled to rescind the contract andrespondent will pay '> as li%uidated damages without the necessity of judicial suit. U' 'residentapproved the instrument.&espondent constinued its logging operations but again failled to settle its account in addition to theindebtedness it had previously ac*nowledged.hat o Buly "$! U' informed 0JUCO that it had! as of that date! considered as rescinded and of nofurther legal effect the logging agreement that they had entered in "$>I and on < eptember "$! U'filed a complaint against 0JUCOfor the collection or payment of the herein before stated sums ofmoney and alleging the facts hereinbefore specified! together with other allegationsI it prayed for andobtained an order! dated => eptember "$! for preliminary attachment and preliminary injunctionrestraining 0JUCO from continuing its logging operations in the Jand Grant.5efore the issuance of the preliminary injuction U' had ta*en steps to have another concessionaire ta*eover the logging operationI after it advertised its invitation to bid! the concession was awarded to ta.Clara Jmber signed in /eb. "$$. 1n the mean time! 0JUCO filed a petition to enjoin U' form theconducting the bidding! the C/1 ejoined U' from awarding the logging rights. However! the order wasreceived only after it had concluded the its contract with ta. Clara.

0nd upon motion of 0JUCO! U' was declared in contempt and directed ta. Clara from e+ercisinglogging rights or conducting logging operations in the concession.U' moved to reconsider the order but it was denied.Hence this present appeal.

#ssue"

4hether or not by virtue of the instrument respondent e+ecuted! petitioner can rescind the contract upondefault of respondent without judicial pronouncement8

$el%"

Fes. U' and 0JUCO had e+pressly stipulated in the :0c*nowledgment of 6ebt and 'roposed annerof 'ayments3 that! upon default by the debtor 0JUCO! the creditor (U') has :the right and the power toconsider! the Jogging 0greement dated A 6ecember "$> as rescinded without the necessity of any

judicial suit.3 0s to such special stipulation! and in connection with 0rticle """ of the Civil Code! thisCourt stated in /roilan vs. 'an Oriental hipping Co.! et al.! J-""#

provisional! being ever subject to scrutiny and review by the proper court. 1f the other party denies thatrescission is justified! it is free to resort to judicial action in its own behalf! and bring the matter to court.hen! should the court! after due hearing! decide that the resolution of the contract was not warranted! theresponsible party will be sentenced to damagesI in the contrary case! the resolution will be affirmed! andthe conse%uent indemnity awarded to the party prejudiced.1n other words! the party who deems the contract violated may consider it resolved or rescinded! and actaccordingly! without previous court action! but it proceeds at its own ris*. /or it is only the final judgmentof the corresponding court that will conclusively and finally settle whether the action ta*en was or was notcorrect in law. 5ut the law definitely does not re%uire that the contracting party who believes itself injuredmust first file suit and wait for a judgment before ta*ing e+trajudicial steps to protect its interest.Otherwise! the party injured by the other2s breach will have to passively sit and watch its damagesaccumulate during the pendency of the suit until the final judgment of rescission is rendered when the law


27/79

itself re%uires that he should e+ercise due diligence to minimi@e its own damages (Civil Code! 0rticleAA>=).

Central :an< vs CA an% ;olent*no 195

!acts"

On 0pril "$! 1sland avings 5an* approved the loan of ulpicio olentino for '#> payable in = yearswith "AQ interest per annum! in consideration of his ">>-hectare land.On ay "$! only a mere '"


28/79

On 0ugust "$! the onetary 5oard of the Central 5an*! after finding 1sland avings was sufferingli%uidity problems! issued a resolution prhibiting it from ma*ing new loans and investments (e+ceptinvestment in government securities) e+cluding granting e+tensions and renewals of already approvedloans subject to review by the uperintendent of 5an*s.On Bune "$#! after finding that 1sland savings failed to put up the re%uired capital to restore its solvencyprohibited it from doing diong business and instructed the 0cting uperintendent of 5an*s to ta*e chargeof the 5an*2s assets.On 0ugust "$#! 1sland savings filed an application for the e+tra-judicial foreclosure of the real estatemortgage covering the ">>-hectare land of ulpicio.On Banuary " loan. He prayed the delivery of '$= plus "AQ legal interest and if the same is not fulfilled! thenthe real estate mortgage should be rescinded.Upon filing of a ' bond! the C/1 issued a &O enjoining 1sland avings from continuing withforeclosure of the mortgage.

0fter the trial! the C/1 dismissed the petition of ulpicio ordered him to pay the '">.>>!which ulpicio . olentino accepted and e+ecuted a promissory note to cover it! the ban* was deemedto have complied with its reciprocal obligation to furnish a '">>.>> loan. he promissory note gaverise to ulpicio . olentino2s reciprocal obligation to pay the '">>.>> loan when it falls due. Hisfailure to pay the overdue amorti@ations under the promissory note made him a party in default! hence notentitled to rescission (0rticle """ of the Civil Code). 1f there is a right to rescind the promissory note! itshall belong to the aggrieved party! that is! 1sland avings 5an*. 1f olentino had not signed a promissorynote setting the date for payment of '">>.>> within = years! he would be entitled to as* for rescission

of the entire loan because he cannot possibly be in default as there was no date for him to perform hisreciprocal obligation to pay. hus there is still the obligation of ulpicio to pay 1sland avings the '"


29/79

Bulueta v. 3ar*ano GR 29+0 1926

!acts"

Rulueta and 0vellana (a movie director) entered into a Contract to ell a residential house and lot for' years! with 0vellana assuming to pay '* of down payment and monthly installmentpayable in advance before thof each month! starting 6ec. "$;.


30/79

1t was also stipulate that upon failure of the 5UF?& (0vellana) to fulfill any of the conditions! it willauthori@e the owner to(") recover physical possession of the land! and (A) rescind the contract! and bysuch (=) all payments made by the 5UF?& to O47?& shall be deemed as rental payments.

0vellana failed to ma*e payment despite several demands. hus compelled Rulueta to sue 0vellana forejectment before the unicipal Court.

0vellana contended that that the unicipal Court had no jurisdiction over the nature of the action as itinvolved the interpretation andDor rescission of the contractI that prior to the e+ecution of the contract tosell! petitioner was already indebted to him in the sum of '="!A$.>> representing the cost of two movies

respondent made for petitioner and used by the latter in his political campaign in "$; when petitioner ranfor Congressman! as well as the cost of one "$ millimeter projector petitioner borrowed from respondentand which had never been returned

he unicipal Court found that respondent 0vellana had failed to comply with his financial obligationsunder the contract and ordered him to vacate the premises and deliver possession thereof to petitioner.

&espondent 0vellana appealed to the C/1 which granted his contention that the unicipal Court had nojurisdiction to try the case! thus dismissed it.Hence this appeal.

#ssue"

4as the action before the unicipal Court of 'asig essentially for detainer and! therefore! within its

e+clusive original jurisdiction! or one for rescission or annulment of a contract! which should be litigatedbefore a Court of /irst 1nstance8

$el%"

he case is essentially one for rescission of the contract.

Under those circumstances! proof of violation is a condition precedent to resolution or rescission. 1t isonly when the violation has been established that the contract can be declared resolved or rescinded.Upon such rescission! in turn! hinges a pronouncement that possession of the realty has becomeunlawful. hus! the basic issue is not possession but one of rescission or annulment of a contract! whichis beyond the jurisdiction of the unicipal Court to hear and determine.

rue! the contract between the parties provided for e+trajudicial rescission. his has legal effect! however!

where the other party does not oppose it. 4here it is objected to! a judicial determination of the issue isstill necessary.0 stipulation entitling one party to ta*e possession of the land and building if the other party violates the

contract does not e+ proprio vigore confer upon the former the right to ta*e possession thereof if objectedto without judicial intervention and2 determination. he writ of mandamus was denied.

(ala/ #nc. vs Clave 504 19+

!acts"

1n "$! 'etitioner and private respondent entered into a Contract to ell a parcel of land. 1n the saidcontract! it provided the petitioner for automatic e+trajudicial rescission upon default in payment of any

monthly installment after the lapse of > days from the e+piration of the grace period of one month!without need of notice and with forfeiture of all installments paid.


31/79

&espondent 6umpit paid the downpayment and several installments. he last payment was made on6ec. "$! "


32/79

his was reiterated in Rulueta vs. ariano where we held that e+trajudicial rescission has legal effectwhere the other party does not oppose it. 4here it is objected to! a judicial determination of the issue isstill necessary.he contention that private respondent had waived his right to be notified under paragraph $ of thecontract is neither meritorious because it was a contract of adhesion! a standard form of petitionercorporation! and private respondent had no freedom to stipulate. 0 waiver must be certain andune%uivocal! and intelligently madeI such waiver follows only where liberty of choice has been fullyaccorded. oreover! it is a matter of public policy to protect buyers of real estate on installment paymentsagainst onerous and oppressive conditions. 4aiver of notice is one such onerous and oppressivecondition to buyers of real estate on installment payments

A. Fes. he payments must be returned.0&. "=#. &escission creates the obligation to return the things which were the object of the contract!together with their fruits! and the price with its interestI conse%uently! it can be carried out only when hewho demands rescission can return whatever he may be obliged to restore.7either sham rescission ta*e place when the things which are the object of the contract are legally inthe possession of third persons who did not act in bad faith.

1n this case! indemnity for damages may be demanded from the person causing the loss.=.4e come now to the third and fourth issues regarding the personal liability of petitioner Onstott who

was made jointly and severally liable with petitioner corporation for refund to private respondent of thetotal amount the latter had paid to petitioner company. 1t is basic that a corporation is invested by lawwith a personality separate and distinct from those of the persons composing it as wen as from that ofany other legal entity to which it may be related. ""0s a general rule! a corporation may not be made to

answer for acts or liabilities of its stoc*holders or those of the legal entities to which it may beconnected and vice versa. However! the veil of corporate fiction may be pierced when it is used as ashield to further an end subversive of justice "AI or for purposes that could not have been intended bythe law that created it "=I or to defeat public convenience! justify wrong! protect fraud! or defend crime."; I or to perpetuate fraud or confuse legitimate issues " I or to circumvent the law or perpetuatedeception "$I or as an alter ego! adjunct or business conduit for the sole benefit of the stoc*holders.4e find no badges of fraud on petitioners2 part. hey had literally relied! albeit mista*enly! on paragraph$ (supra) of its contract with private respondent when it rescinded the contract to sell e+trajudicially andhad sold it to a third person.1n this case! petitioner Onstott was made liable because he was then the 'resident of the corporationand he a to be the controlling stoc*holder. 7o sufficient proof e+ists on record that said petitioner usedthe corporation to defraud private respondent. He cannot! therefore! be made personally liable justbecause he :appears to be the controlling stoc*holder3. ere ownership by a single stoc*holder or by

another corporation is not of itself sufficient ground for disregarding the separate corporate personality."#1n this respect then! a modification of the &esolution under review is called for.

Angeles v. Calasan7 G.R. No. -22+ 3arc) 1, 195

!acts"

Herein plaintiffs-appellees entered into a contract to sell with defendants-appellants for the former2spurchase of a parcel of land located in Cainta! &i@al. he agreed amount is '=!A>.>> plus


33/79

';!==.=#. 0fter several months! due to plaintiffs-appellees failure to pay the monthly installmentsdespite defendants-appellants demands! the latter cancelled the contract to sell pursuant to a provision inthe contract which states that the seller (defendants-appellants) has the :right to declare the contractcancelled and of no effect3 as a conse%uence of failure to pay the agreed amount plus interests. hus!the plaintiffs-appellees filed a civil action in court to compel defendants-appellants to e+ecute in theirfavour a final deed of sale citing their aggregate payment of ';!==.=# which includes payment ofinterests! ta+es and incidental e+penses. he lower court rendered judgement in favour of the plaintiffs-appellees and a motion for reconsideration filed by the defendants-appellants were denied. he Court of

0ppeals then brought the matter to the upreme Court as it involves pure %uestions of law.

#ssue"

4hether or not the contract has been automatically and validly cancelled by the defendant-appellants(Ursula orres Calasan@ and omas Calasan@)

$el%"

Herein plaintiffs-appellees entered into a contract to sell with defendants-appellants for the former2spurchase of a parcel of land located in Cainta! &i@al. he agreed amount is '=!A>.>> plus


34/79

GARC#A, 8R. @. C'R; '! A((A-&, G.R.N'. 0201,

!acts"

On 0pril "! "


35/79

ay "#=! Garcia moved that the complaint be dismissed on the ground that the principal obligation hasbeen novated. He claimed that there was novation due to the fact that there was re-structuring of thepayment scheme and thus! the e+isting contract has been novated. he trial court granted the petition ofGarcia but it was later reversed by the Court of 0ppeals.

#ssue"

4hether or not there was indeed novation of the old contract or obligation.

$el%"

he upreme Court held that 7ovation of contract cannot be presumed. 1n order that an obligation maybe e+tinguished by another which substitutes the same! it is imperative that it be so declared inune%uivocal terms! or that the old and the new obligations be on every point compatible with each other.1n every novation! there are four essential re%uisites, ") a previous valid obligationI A) the agreement ofthe parties to a new contractI =) the e+tinguishment of the old contractI and ;) the validity of the new one.7ovation re%uires the creation of new contractual relations as well as e+tinguishment of the old. heremust be consent of all the parties to the substitution! resulting in the e+tinction of the old obligation andthe creation of a new valid one. he legal doctrine is that an obligation to pay a sum of money is notnovated in a new instrument by changing the term of payment and adding other obligations notincompatible with the old one. 1t is not proper to consider an obligation novated as in the case at bar bythe mere granting of e+tension of payment which did not even alter its essence. he upreme Court

denied the petition of Garcia and affirmed the decision of the Court of 0ppeals.

As*a (ro%uct*on Co. #nc. v. (ano G.R. No. -5105 8anuar/ 24, 1992

!acts"

ometime in arch "


36/79

over the building and the deed of assignment of the contract of lease within si+ty ($>) days from the dateof payment of the downpayment of 'A>!>>>.>>. he balance was to be paid in monthly installments. OnA> arch ") days from receipt of this decision. his decision shall beimmediately e+ecutory.

:o/sa= v #nterp)*l (romot*ons 1 &CRA +5

!acts"

he case is an appeal by olomon 5oysaw and 0lfred Fulo Br. from C/1 ordering them to pay anuel7ieto Br. 'A>*-moral damages! '*-atty2s fees!I and to 1nterphil 'romotions! 1nc. and Jope arreal r.(additional 'A>* for moral damages)! 'A>*-unreali@ed profits! '==!=$.


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- ay "! "$"! olomon 5oysaw is a bo+er handled by 4illie etchum(wD partner &us*ay). heysigned a contract with 1nterphil (represented by arreal) for a match with Gabriel :/lash3 ?lordefor the world junior lightweight championship.

- he stipulations of the contract were the venue in the &i@al emorial stadium on ept. =>-$". 1ncase of mutually-agreed postponement! it would be no more than => days later. 0nd that 5oysawwould not prior to the match! engage in any other such contest without the written consent of1nterphil. 6ays later! ?lorde signed a similar agreement with 1nterphil. 0 supplemental agreementbDw etchum N arreal too* place.

- 5oysaw on Bune -$" fought Jouis 0vila in a ten-round non-title bout held in Jas Legas. On BulyA-$"! he changed his manager to B. 0mado 0raneta. On Buly ="-$"! 5oysaw arrived in the'hilippines to get ready. On ept. "-$"! 0raneta assigned his managerial rights to Fulo. On eptA-$"! 5oysaw finally informed arreal of his presence in the country.

- ept. -$" Fulo informed arreal of the managerial changes and readiness to comply with thecontract.

- On the same day! arreal wrote to the Games and 0musement 5oard(G05) of the lac* of formalnotification of the managerial rights switching and that 5oysaw be called for clarification.

- G05 did act upon it by calling for conferences! and decided to schedule the match for 7ov.;-$".he U0 7at2l 5o+ing 0ssoc. supervising all world-title fights approved the date.

- Fulo disagreed! and arreal offered to change to Oct. A#! wDin the =>-day pd.

- ?arly Oct. Fulo contacted amerto 5esa for promotion of the match. Oct.$-=" in one of Fulo2scommunication to 5esa! he said that he was willing to allow the 7ov.; fight! if 5esa promotes it.

- he 5oysaw-?lorde fight did push through but it wasn2t the contemplated fight in the contract.

- 5oysaw and Fulo petitioned C/1 &i@al against arreal! 1nterphil and anuel 7ieto Br. (G05chairman! resps claim to have acted arbitrarily) damages for non-fulfillment of contractcommitments.

- rial dragged for = yrs because of appellants! until 5oysaw could no longer return (ta*en asleaving wDout notice to court and counsel)! C/1 decided for the respondents and denied apostponement N motion for new trial.

#ssues"

") 4hether or not there was a violation of the contract stipulations! and who was liable8 I

A) 4hether or not there was a legal ground for postponementDwas 7ietoDG05 reasonable8

$el%"

"st 1ssue,

Fes! Fulo admitted the fact of 5oysaw and 0vila2s fight in Jas Legas and the assignment of themanagerial rights over 5oysaw to different people (novation) without '&1O& approval of 1nterphil. ?ven ifFulo sent a letter! there is no showing that 1nterphil acceded to the substitution judging from the complaintin G05. Our law recogni@es actionable in every contract breach.

0rt.""3those who in the performance of their obligations are guilty of fraud! negligence or delay! andthose who in any manner contravene the terms thereof! are liable for damages.3

0rt"""3the power to rescind obligation is implied! in reciprocal ones! in case one of the obligors should

not comply with what is incumbent upon him.37ovation which consists in substituting a new debtor in the place of the original one may be made evenwithout the *nowledge or against the will of the latter! 5U 7O 41HOU H? CO7?7 O/ H?C&?61O&.3ubstitution needs the consent of the creditor because the new debtor may cause delay orprevent the fulfillment of the obligation due to insolvency or inability. ince the creditor is at ris*! then hisconsent must first be secured to be binding.

And 1ssue,

Fes! when the contract was unlawfully novated! the aggrieved creditor is not bound to deal with thesubstitute. He has a right to demand rescission or refusal to recogni@e the substitute. 1n this case theychose to renegotiate the date. he G05 (not 7ieto himself) did not act arbitrarily when it set it to 7ov. ;


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because indeed there is a novated contract (from evidence). 0nyways! 1nterphil was willing to set it to Oct.A# to be wDin the => day period.

-/%*a -. Geral%e7 v. Court of Appeals an% enstar ;ravel Corporat*on

G.R. No. 1025+, !ebruar/ 2+ 1996

!acts"


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4ith reference to Civil Case 7o. M->-;$; of the &C of Mue@on City! 'etitioner Geralde@ filed anaction for damages against &espondent enstar ravel Corporation for breach of contract withantecedent facts as follows,

'etitioner opt a AA-day ?urope tour travel pac*age offered by &espondent Corporation paying A!>dollars as consideration. he tour did not end up as e+pected by herein petitioner! it did not asrepresented in the brochure, no ?uropean tour manager! hotels were not "stclass and the /ilipino tourguide who is supposed to accompany them is a " sttimer. 'etitioner then filed a breach of contract against&espondent Corporation for committing acts of representations constituting fraud in contracting theobligation.

&C rendered judgment ordering &espondent Corporation to pay petitioner >>!>>> as moral damages!A>>!>>> as nominal damages! =>>!>>> as e+emplary damages and >!>>> as litigation and attorney2sfees (all in pesos). On appeal! award for moral and e+emplary damages were deleted and a reduction ofnominal damages to ;>!>>> pesos! this on account that the &espondent has substantially complied withthe prestation and no malice or bad faith is imputable as a conse%uence . Hence! the petition.

#ssue"

4hether or not private respondent acted in bad faith or with gross negligence in discharging it2s obligationunder contract.

$el%"

On the foregoing considerations! respondent court erred in deleting the award for moral and e+emplarydamages which may be awarded in breaches of contract where fraud is evident. 'rivate respondentfaulted with fraud in the inducement! which is employed by a party to a contract in securing the consent ofthe other.

1n the case at bar! the 'rivate respondent has committed either dolo causante or dolo incidente byma*ing false misrepresentation. ?ither which oblige a person to indemnify damages.

4herefore! premises considered! the decision of &espondent Court of 0ppeals is hereby set aside! andanother one rendered! ordering private respondent enstar ravel Corporation to pay petitioner JydiaGeralde@ the sums of ' ">>!>>> by way of moral damages! ' >!>>> as e+emplary damages! and' A>!>>> as attorney2s fees with litigation cost against private respondent. he nominal award of

damages is hereby deleted.

A8AE 3AR;#NG F D@-'(3N; C'R(. @&. C'R; '! A((A-&

G.R. N'. 1155, &(;3:R 1, 1995

!acts"


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Flang-Flang erchandising Company! a partnership between 0ngelita &odri%ue@ and 0ntonio an!obtained a loan of 'A>!>>>.>> from etropolitan 5an* and rust Company! and to secure payment ofthe same! spouses arcial ee and Jilian an constituted a real estate mortgage in favor of the said ban*over the property in the 6istrict of 'aco! anila. he partnership had changed its name to 0ja+ ar*etingCompany without changing its composition and it obtained a loan of '">!>>>.>> from the same ban*and e+ecuted a second real estate mortgage over the same property. 0s the partnership converted into acorporation and changed its name into 0ja+ ar*eting and 6evelopment Corporation with the originalpartners and additional incorporators! another loan was obtained from the same mortgagee of'$>>!>>>.>>. 1n 6ecember "#>! the three loans were re-structured into one loan and 0ja+ ar*etingrepresented by 0ntonio an and ?lisa an in their capacity as solidary co-obligor e+ecuted a 'romissory7ote. he petitioner argue that a novation occurs when their three loans which are all secured by thesame real estate property were consolidated! thereby e+tinguishing their monetary obligations andreleasing the mortgaged property from liability.

#ssue"

4hether or not there is a novation occurred when the three loans which are all secured by the same realestate property were consolidated into one single loan under a 'romissory 7ote8

$el%"

7ovation is the e+tinguishment of an obligation by the substitution or change of the obligation by asubse%uent one which e+tinguishes or modifies the first! either by changing the object or principalconditions! or by substituting another in place of the creditor. 1t is never presumed and will not be allowedunless it is clearly shown by e+press agreement! or by acts of e%ual import. hus! to effect an objectivenovation it is imperative that the new obligation e+pressly declare that the old obligation is therebye+tinguished! or that the new obligation be on every point incompatible with the new one. here is nothingin the records to show the une%uivocal intent of the parties to novate the three loan agreements! noindication of the e+tinguishment of! or an incompatibility with. 1n addition! the consolidation of the threeloans did not release the mortgaged real estate property from liability because the mortgage annotations!all remained uncancelled! indicating the subsistence of the real estate mortgage. 7either can it be validlycontended that there was a change or substitution in the persons of either the creditor or the debtor. heconversation from a partnership to a corporation ! without sufficient evidence that they were e+presslyreleased from their obligations! with new corporate personality! a third person or new debtor within theconte+t of subjective novation. 7ovation purported change in the third person must be clear and e+press.Clearly then! neither objective nor subjective novation occurred.

-*m


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'hilippine &emnants Co.! 1nc. constituted the 5an* of the 'hilippine 1slands (5'1) as its trustee tomanage! administer! and sell its real estate property. 'edro &evilla! Br.! a licensed real estate bro*er wasgiven formal authority by 5'1 to sell the lot for '"!>>>.>> per s%.m. his arrangement was concurred in bythe owners of the 'hilippine &emnants. 5ro*er &evilla contacted 0lfonso Jim of Jim*et*ai ons illing(J) who agreed to buy the land. J2s officials and &evilla were given permission to enter and viewthe property they were buying (by &olando L. 0romin! 5'1 0ssistant Lice-'resident). &evilla formallyinformed 5'1 that he had procured a buyer! J. J2s officials! 0lfonso Jim and 0lbino Jim*et*ai! wentto 5'1 to confirm the sale. hey were entertained by Lice-'resident erlin 0lbano and 0sst. Lice-'resident 0romin. J as*ed that the price of '"!>>>.>> per s%.m. be reduced to '>>.>> while 0lbanostated the price to be '"!">>.>>. he parties finally agreed that the lot would be sold at '"!>>>.>> pers%.m. to be paid in cash. ince the authority to sell was on a first come! first served and non-e+clusivebasis! it may be mentioned at this juncture that there is no dispute over J2s being the first comer andthe buyer to be first served. 7otwithstanding the final agreement to pay '"!>>>.>> per s%.m. on a cashbasis! 0lfonso Jim as*ed if it was possible to pay on terms. he ban* officials stated that there was noharm in trying to as* for payment on terms because in previous transactions! the same had been allowed.1t was the understanding! however! that should the term payment be disapproved! then the price shall bepaid in cash. 1t was 0lbano who dictated the terms under which the installment payment may beapproved! and acting thereon! 0lfonso Jim! on the same date! "" Buly "##! wrote 5'1 through erlin

0lbano embodying the payment initially of ">Q and the remaining >Q within a period of > days. A or =days later! J learned that its offer to pay on terms had been fro@en. 0lfonso Jim went to 5'1 on "# Buly"## and tendered the full payment to 0lbano. he payment was refused because 0lbano stated that theauthority to sell that particular piece of property in 'asig had been withdrawn from his unit. he same

chec* was tendered to 5'1 Lice-'resident 7elson 5ona who also refused to receive payment.

0n action for specific performance with damages was thereupon filed on A 0ugust "## by J against5'1 with the &C 'asig (5ranch ""). 1n the course of the trial! 5'1 informed the trial court that it had soldthe property under litigation to 7ational 5oo* tore (75) on "; Buly "#. he complaint was thusamended to include 75. On "> Bune ""! the trial court rendered judgment in favor of JI holdingthat there was a perfected contract between J and 5'1! and thus declared the 6eed of ale involvingthe lot in 'asig in the name of 5'1 and in favor of 75 as null and voidI ordered the &egister of 6eeds ofthe 'rovince of &i@al to cancel the C which may have been issued in favor of 75 by virtue of the saiddeedI ordered 5'1 upon receipt by it from J the full payment to e+ecute a 6eed of ale in favor of thelatter of the said property at the price of '"!>>>.>> per s%.m. and in default thereof! the Cler* of Court isdirected to e+ecute the deed dated "; Buly "#I ordered the &egister of 6eeds of 'asig! uponregistration of the said deed! whether e+ecuted by 5'1 or the Cler* of Court and payment of the

corresponding fees and charges! to cancel said C ;="AA and to issue! in lieu thereof! another transfercertificate of title in the name of JI ordered 5'1 and 75 to pay in solidum to J the sums of'">!>>>!>>>.>> as actual and conse%uential damages and '">!>>>.>> as attorney2s fees and litigatione+penses! both with interest at "AQ per annum from date of judgmentI on the cross-claim by the ban*against 75! ordered 75 to indemnify the ban* of whatever 5'1 shall have paid to JI dismissed thecounterclaim of both 5'1 and 75 against J and the cross-claim of 75 against 5'1I with costsagainst 5'1 and 75.

Upon elevation of the case to the Court of 0ppeals! the decision of the trial court was reversed and thecomplaint dismissed on "A 0ugust ";. 1t was held that no contract of sale was perfected because therewas no concurrence of the three re%uisites enumerated in 0rticle "="# of the Civil Code. Hence! thepetition.

he upreme Court reversed and set aside the %uestioned judgment of the Court of 0ppeals! and

reinstated the "> Bune "" judgment of 5ranch "" of the &C of he 7ational Capital Budicial &egionstationed in 'asig! etro anila e+cept for the award of '">!>>>!>>>.>> damages! which was deleted.

#ssues"

".) 4as there a perfected contract

A.) 6oes 5'1 officials have full authority to bind the ban*


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=.) 0re evidence supporting the sale competent and admissible

;.) 6oes the sale of the lot to 7ational 5oo* tore characteri@ed by bad faith.

$el%"

he supremene court reversed and set aside the judgment of court of appeals and the judgment of

branch "" of the regional trial court of the national capital judicial region is reinstated e+cept for theaward of '">!>>>!>>> damages with is hereby deleted.

".) Fes. he perfection of the contract too* place when 0romin and 0lbano! acting for 5'1! agreed tosell and 0lfonso Jim with 0lbino Jim*et*ai! acting for petitioner Jim*et*ai! agreed to buy thedisputed lot at '"!>>>.>> per s%uare meter. 0side from this there was the earlier agreementbetween petitioner and the authori@ed bro*er. here was a concurrence of offer and acceptance!on the object! and on the cause thereof.

he fact that the deed of sale still had to be signed and notari@ed does not mean that no contracthad already been perfected. 0 sale of land is valid regardless of the form it may have beenentered into (Claudel vs. Court of 0ppeals! " C&0 ""=! "" ""P). he re%uisite form under

0rticle ";# of the Civil Code is merely for greater efficacy or convenience and the failure tocomply therewith does not affect the validity and binding effect of the act between the parties

(Litug! Compendium of Civil Jaw and Burisprudence! "= &evised ?dition! p. A).

A.) he alleged lac* of authority of the ban* officials acting in behalf of 5'1 is not sustained by therecord. 1f 5'1 could give the authority to sell to a licensed bro*er! there is no reason to doubt theauthority to sell of the two 5'1 Lice-'residents whose precise job in the 5an* was to manage andadminister real estate property.

=.) Fes. Counsel for respondents cross-e+amined petitionerSs witnesses at length on the contractitself! the purchase price! the tender of cash payment! the authority of 0romin and &evilla! andother details of the litigated contract. Under the 0brenica rule (reiterated in a number of cases!among them alosig vs. Lda. de 7ieba ;= C&0 ;


43/79

hree parcels of land were owned by /r. Garcia in 'arana%ue adjoining the lands owned by petitioner. 1n"$ Hernande@ and Garcia had an agreement orally to set the boundaries of their lands. he bureau oflands put up monuments to mar* the boundaries as agreed by the petitioner and respondent on the sameyear. hen after on " /r. Garcia filed for an application for registration of the three parcels of landunder his name. he court granted respondent2s application! with this petitioner discovered that the AA>s%uare meters of land included in the application was part of his property. 'etitioner filed for a review ofthe decree of registration and was denied by the C/1. Hence! an appeal was made to the C0 whoaffirmed the decision of the C/1 declaring /r. Garcia the absolute owner of said lands by ac%uisitiveprescription! stating that petitioner had made no objection to the application and that the agreement wasunenforceable since does not comply with the tatute of /rauds because it is not on writing and that only"$ s%uare meters of land was on the deed of sale upon buying the said land by the petitioner2s parents

#ssue"

". 4hether or not there was fraud on the application for registration of said lands by respondent8A. 4hether or not the agreement is valid not being in writing8=. 4hether or not the petitioner2s right to file for a review has prescribed by his inaction8

$el%"

he C upon loo*ing of the facts on record found out that the C0 overloo*ed on its factual conclusion and

failed to consider the same that is essential to the issue. On the first issue! the government through thebureau of land monuments put up mar*s to separate both their estates according to their agreement!which has been altered by the application! modifying the mar*s of separation! clearly herein petitioner is avictim of fraud! cheated to vindicate his claim to the land. On the second! according to article ";>= of thecivil code! formality to be in writing is only re%uired on leas

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