Oblicon Digests Updated

8/13/2019 Oblicon Digests Updated

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1 Stronghold Insurance vs Republic Asahi Quiachon, Rudith

STRONGHOLD INSURANCE COMPANY, INC., vs. REPUBLIC-ASAHI GLASS CORPORATION

Facts:

On may 24, !", Republic#asahi entered into a contract $ith %ose &. Santos 'r (proprietor o) %&S costruction* )or the construction o) road$ays and a drainage system in its compound in +asig

city. Republic#asahi $as to pay .-(inclusive o) /A0* to be completed $ithin 24 days beginning may !, !".

0o insure the completion, %&S eecuted a per)ormance bond 'ointly and severally $ith Stronghold Insurance 3o. Inc. $orth +hp",.

On may 2-,!", Republic asahi paid ", as do$npayment

On august, %&S sent 2 post billings $orth more than 24, $hich republic asahi paid ho$ever it constituted only .-5 o) the construction.

6e)ore nov. !", enginners o) republic asahi sent reminders to %&S 3onstruction )or the alarmingly slo$ pace o) the $or7 ho$ever it $ent unheeded.

On nov !", republic asahi rescinded the contract pursuant to art. 1- o) its contract. Such rescission does not constitute a $aiver to claim damages to %&S and its sureties pursuant to art 1 o)the contract.

&ue to %&S )ailure to comply, Republic asahi had to hire another contractor to )inish the $or7 $hich incurred an additional epense o) more than -.2m

On 'an and mar 8", republic asahi sent a letter to stronghold to claim, under the bond, an amount not less ",. such letters $ent unheeded.

0hus republic asahi )iled a complaint against %&S, as7ing payment o) more than -.2m )or the additional epenses incurred )or the ne$ contractor. And a )ile against %&S and stronghold )or anamount o) , as damages, under the bond. And also )or eemplary and attorneys )ees.

According the deputy sheri)), summons $ere duly delivered to stronghold, ho$ever, 'ose d. santos died the previous year. Since then %&S o))ice location $as already un7no$n.

Strongholds ans$er to the complaint $as that its liability as surety $as etinguished by the death o) 'ose d. santos. And i) this $as not the case, it $as still released )rom the liability on the )).

grounds9#there $as no li:uidation to ascertain the liability o) %&S and stronghold, pursuant to procedural due process, $ith the active participation o) 'ose d. santos since he is already dead.

#that its claim )or money $as conditioned on its claim )or damages in case on )ailure on the part o) %&S to )ul)il the obligation. Since 'ose d. santos already died, it can no longer proveto claim damages.

#that it $as deprived o) its right to protect its interest as surety $hen it $as not in)ormed o) the death o) 'ose d. santos and the unilateral rescission by republic asahi.

#that it $as denied due process $hen republic asahi did not in)orm them during the determining and )iing o) the amount )or the completion o) the pro'ect.

#that article 1 o) the contract $as against o) public policy and denied stronghold o) due process.

#that republic asahi deviated )rom the terms o) the contract $ithout the consent o) stronghold.

Stronghold prayed )or damages and attorneys )ees. 0he lo$er court dismissed the complaint. 3A held that it $as not released )rom its liability since it $as not the )ault o) republic asahi that the obligation $as impossible to per)orm but it $as %&Ss

)ault. So its liability still subsists.

Issue: $hether or not the liability o) stronghold as surety $as automatically etinguished by the death o) the principal debtor ('ose d. santos*;

Hel:


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Section o) Rule !=12o) the Rules o) 3ourt epressly allo$s the prosecution o) money claims arising )rom a contract against the estate o) a deceased debtor. >vidently, those claims are not actuallyetinguished.1-?hat is etinguished is only the obligees action or suit )iled be)ore the court.

In the present case, !atee% *"'eta% l$a&$l$t$es "% "&l$)at$"'s Sa't"s !a u'e% !$s c"'t%acts $t! %es+"'e't e%e '"t $'t%a's*$ss$&le & t!e$% 'atu%e, & st$+ulat$"', "% & +%"$s$"' "#la. He'ce, !$s eat! $ '"t %esult $' t!e e(t$')u$s!*e't "# t!"se "&l$)at$"'s "% l$a&$l$t$es, !$c! *e%el +asse "' t" !$s estate. Deat! $s '"t a e#e'se t!at !e "% !$s estate ca' set u+ t"$+e "ut t!e "&l$)at$"'s u'e% t!e +e%#"%*a'ce &"'. C"'se/ue'tl, +et$t$"'e% as su%et ca''"t use !$s eat! t" esca+e $ts *"'eta% "&l$)at$"' u'e% $ts +e%#"%*a'ce &"'.

As a su%et, +et$t$"'e% $s s"l$a%$l l$a&le $t! Sa't"sin accordance $ith the 3ivil 3ode, $hich provides as )ollo$s9

@Art. 24. 6y guaranty a person, called the guarantor, binds himsel) to the creditor to )ul)ill the obligation o) the principal debtor in case the latter should )ail to do so. @I) a person binds himsel) solidarily$ith the principal debtor, the provisions o) Section 4,13hapter -, 0itle I o) this 6oo7 shall be observed. In such case the contract is called a suretyship.@

@Art. 121=. 0he creditor may proceed against any one o) the solidary debtors or some or all o) them simultaneously. 0he demand made against one o) them shall not be an obstacle to those $hich maysubse:uently be directed against the others, so long as the debt has not been )ully collected.@

nder the la$ and 'urisprudence, respondent may sue, separately or together, the principal debtor and the petitioner herein, in vie$ o) the s"l$a% 'atu%e "# t!e$% l$a&$l$t . 0he death o) the principaldebtor $ill not $or7 to convert, decrease or nulli)y the substantive right o) the solidary creditor. >vidently, despite the death o) the principal debtor, respondent may still sue petitioner alone, in accordance$ith the solidary nature o) the latters liability under the per)ormance bond.

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ISSUE: ?O< there $as payment made to respondent 0an

HELD:


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(mao ni ans$er sa :uestion n imam sa a7oa na mali a7oa tubag. *

0he appellants asserted that $hile the trial courts observations $ere true, it $as the usual business practice in previous transactions bet$een them and S3. 0he S3 previously honored receiptsnot bearing the salesmans name. According to appellant Brancisco 3ulaba, he even lost some o) the receipts, but did not encounter any problems.

According to appellant Brancisco, he could not be )aulted )or paying the S3 collector $ho came in a van and $as in uni)orm, and that any regular customer $ould, $ithout any apprehension,transact $ith such an S3 employee. Burthermore, the respective receipts issued to him at the time he paid on the )our occasions mentioned had not yet then been declared lost. 0hus, thesubse:uent publication in a daily ne$spaper declaring the boo7lets lost did not a))ect the validity and legality o) the payments made. Accordingly, by its actuations, the S3 $as estopped )rom:uestioning the legality o) the payments and had no cause o) action against the appellants.

0he 3ourt o) Appeals a))irmed the decision o) the trial court.

Fence, the instant petition.

3ontentions o) +arties (Reiteration*

According to the petitioners, receiving receipts )rom the private respondents agents instead o) its salesmen $as a usual occurrence, as they had been operating the store since 1"". 0hus, on )ouroccasions in April 1"!-, $hen an agent o) the respondent came to the store $earing an S3 uni)orm and driving an S3 van, petitioner Brancisco 3ulaba, $ithout :uestion, paid his accounts. Fereceived the receipts $ithout )ear, as they $ere similar to $hat he used to receive be)ore. Burthermore, the petitioners assert that, common eperience $ill attest that unless the attention o) thecustomers is called )or, they $ould not ta7e note o) the serial number o) the receipts.

0he petitioners contend that the private respondent advertised its $arning to the public only a)ter the damage $as done, or on %uly ", 1""-. Its belated notice sho$ed its glaring lac7 o) interest or

concern )or its customers $el)are, and, in sum, its negligence.

+etitioner Brancisco 3ulaba avers that the agent to $hom the accounts $ere paid had all the physical and material attributes or indications o) a representative o) the private respondent, leaving nodoubt that he $as duly authoriCed by the latter. +etitioner Brancisco 3ulabas testimony that @he does not necessarily chec7 the contents o) the receipts issued to him ecept )or the amount indicatedi) GtheH same accurately re)lects his actual payment@ is a common attitude o) customers. Fe could, thus, not be )aulted )or paying the private respondents agent on )our occasions. +etitionerBrancisco 3ulaba asserts that he made the payment in good )aith, to an agent $ho issued S3 receipts $hich appeared to be genuine. 0hus, according to the petitioners, they had duly paid theirobligation in accordance $ith Articles 124 and 1242 o) the


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agency but also the nature and etent o) authority, and in case either is controverted, the burden o) proo) is upon them to establish it. 240he petitioners in this case )ailed to discharge this burden,considering that the private respondent vehemently denied that the payments $ere accepted by it and $ere made to its authoriCed representative.


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S3 held that Allied 6an7ing 3orporation is still liable to respondent Dim Sio ?ant.

Bor the relationship bet$een the ban7 and a client i s one o) a debtor#creditor.

0he civil code enumerated the instances $hen the obligation are etinguished under Article 12-19

0hrough payment or per)ormance

6y the loss o) the thing due.

6y condonation or remission o) the debt.

6y merger or con)usion o) the r ights o) the debtor and creditor.

6y compensation and

6y novation.

Other $ays o) etinguishing an obligation are9 1. Rescission, 2. Annulment. -. Bul)illment o) the resolutory condition and 4. +rescription.

Brom the )actual )indings o) the trial court and appellate court, Dim Sio ?an did not authoriCe the release o) her money mar7et placement to Santos and the 6an7 had been negligent in doing so.So there is no :uestion that the obligation o) the petitioner had not been etinguished.

Article 1249 +ayment shall be made only to the person in $hose )avor the obligation $as constituted, or to his successor in interest or any person authoriCed to receive such payment.

As commented by Arturo 0olentino9 +ayment by a debtor to a $rong party does not etinguish the obligation as to the creditor, i) no )raud or negligence imputable against the latter. >ven i) thedebtor acted in utmost good )aith and by mista7e as to the person o) the creditor or through error induced by the )raud o) a third person, the payment to one $ho is not in )act his creditor orauthoriCed to receive such payment is void ecept as provided in article 1241, such payment does not pre'udice the creditor and accrual o) interest is not suspended by it.

Since there $as no e))ective payment o) respondents money mar7et placement, the ban7 is still obliged to pay her at =5 per annum interest )rom arch 1=, 1"!4 until the payment thereo).

P.S. sa /uest$"' '$ *aa* 0a)a&$ ')a ala 0" 0atu&a), a') a'se% 0a, All$e Ba'0$') C"%+ s!"ul !ae as0 #"% t!e %es+"'e't3s c"'se't !e' C%$st$'a S" as $'st%ucte t" +%e-te%*$'ate t!e *"'e *a%0et +lace*e't.

>stanislao vs >ast ?est 6an7ing RodrigueC, &yan

Case &etee' Pet$t$"'e%s-S+"uses Ra#ael 6 7e'a$a Esta'$sla" . Res+"'e't East 4est Ba'0$') C"%+"%at$"'

FACTS:1. %uly 24, 1""9 +etitioners obtained -, "2, Doan )rom respondents evidenced by a +romissory


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+rayed that the in the event that the e:uipment could not be replevied, petitioners be ordered to pay the outstanding sum o) -, !4=, 12. - $ith 1".5 interest per annum rec7oned )rom %anuary 24,1"!!

!. +etitioners sought to dismiss the amended complaint alleging that their previous payments on loan amortiCations, the eecution o) the deed o) assignment on August 1=, 2, M respondentsacceptance o) the three units o) heavy e:uipment, had the e))ect o) )ull payment o) their total outstanding obligation $hich is a bar on respondent )rom recovering any more amounts. 6y $ay o) counterclaim, they sought the a$ard o) damages

". arch 14, 2=9 0rial court &ismissed the amended complaint )or lac7 o) merit holding that the deed o) assignment M petitioners delivery o) the heavy e:uipment e))ectively etinguished petitionerstotal loan obligation.

Respondent $as estopped )rom )urther collecting )rom the petitioners $hen it accepted $ithout any protest, delivery o) the - units o) heavy e:uipment as )ull M complete satis)action o) the petitionerstotal loan obligation. It )ailed to timely recti)y its alleged mista7e in the original complaint and deed o) assignment, ta7ing almost a year to act. Respondent appealed to the 3A. 3A reversed the trial courts decision.

Issue:?L< the &eed o) Assignment $as a per)ected agreement $hich etinguished petitioners total outstanding obligation to the respondent.

Rul$'):a. &eed o) Assignment $as a per)ected agreement $hich etinguished petitioners total outstanding obligation to the respondent. It eplicitly provided that petitioners (assignors* Jin )ull paymentK o) its obligation o) , -, 4". 2, shall deliver the - units o) heavy e:uipment to the assignee (respondent*, $hich Jaccepts theassignment in )ull payment o) the above#mentioned debtK0his could only mean that should petitioners complete the delivery o) the - units, respondents credit $ould have been satis)ied in )ull, and petitioners aggregate indebtedness $ould then be consideredto have been paid in )ull as $ell.

b. 0he nature o) the assignment $as a dation in payment, $hereby property is alienated to the 3R in satis)action o) a debt in money.

Assuming arguendo that it $as a compromise agreement, there $as no need )or respondents signature because $ith the delivery o) the heavy e:uipment $hich the latter accepted, the agreements $as3onsummated.Respondents approval may be in)erred )rom its un:uali)ied acceptance o) the heavy e:uipment. 3onsent to contracts is mani)ested by the meeting o) the o))er and the acceptance o) the thing. O))er must be certain and the acceptance absolute.

c. ?ith its years o) ban7ing eperience, resources M manpo$er, respondent is presumed to be )amiliar $ith the implications o) entering into the deed o) assignment $hose terms are categorical and le)tnothing $ith interpretation. Alleged non#inclusion is tantamount to inecusable mani)est negligence $hich should not invalidate the 'uridical tie +rotestations are sel)#serving. It $as not until %une 2, 21 that respondent raised the issue o) its alleged mista7e by )iling an amended complaint )or replevin involving di))erent chattels, although)ounded on the same principal obligation.

d. ?hen respondent accepted the delivery o) all three units o) heavy e:uipment under the deed o) assignment, there could be no doubt that it intended to be bound under the agreement. Since the agreement $as consummated by the delivery on arch !, 21, petitioners are deemed to have been released )rom all the obligations to respondent.


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(2L12L1* 0he parties eecuted an Amendment to Amended Real >state ortgage consolidating their loans inclusive o) charges thereon $hich totaled to +.". 0he parties eecuted a &acion in +aymentAgreement $herein petitioners assigned the properties to respondent in settlement o) their total obligation. 0hey also eecuted a emorandum o) agreement $ith the stipulations as )ollo$9

a. that they agreed upon the consolidation o) loans

b. that Sps. Ong shall sign another +romissory note $ith an amount o) +." $ith a promise to pay $ithin a year )rom the time o) the consolidation

c. other$ise, the de)endant shall proceed $ith the &acion >n +ago Agreement

(April 22* +etitioners )iled a complaint be)ore R03 0arlac )or the declarationo) mortgage contract as abandoned, accounting and damages alleging that the OAand the &acion in +ayment eecuted are void )or constituting pactum commissorium.

+etitioners alleged that the loans etended to them $ere )ounded on several +Ln +ago eecuted are valid;

RULING:

lements o) +actum 3ommissorum $hich enables the mortgagee to ac:uire o$nershipo) the mortgaged property $ithout the need o) any )oreclosure proceedings are9

1. there should be a property mortgaged by $ay o) security )or the payment o) the principal obligation

2 there should be a stipulation )or automatic appropriation by the creditor o) the thing mortgaged in case o) non#payment o) the principal obligation $ithin the stipulated period.

+actum 3ommissorium is prohibited under Art. 2!! o) 33. JA creditor may not appropriate a thing given by $ay o) pledge or mortgage, nor dispose the same. Stipulations contrary to this shall be null andvoid.K

0he OA and the &+A contain no provision )or )oreclosure proceedings or redemption $hich means that Roban Dending automatically ac:uires o$nership o) the mortgaged property upon Sps Ong )ailureto pay.

A true &acio >n +ago is the assignment or alienation o) property intended to etinguish debt and not by $ay o) security. So, the &+A does not etinguish the petitioners obligation.

Since OA and &+A constitute pactum commissorium $hich is prohibited under the la$, it is


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S3 held that the monthly interest rate o) -.5 or 425 per annum unconscionable. Respecting the charges on the loans, courts may reduce interest rates, penalty charges and attorneys )ees i) they areini:uitous or unconscionable. 0he penalty )ee at the monthly rate o) 5 or =5 per annum o) the total amount due and demandable P principal interest, $ith the interest not paid $hen due added to andbecoming part o) the principal and li7e$ise bearing interest at the same rate, compounded monthly P unconscionable and reduces it to 125 per annum.

3ase remanded to the lo$er courts )or accounting purposes.

Ocampo vs Dandban7 aphoc7un, Brances

GLORIA OCAMPO AND TERESITA TAN s LANBAN8 OF THE PHILIPPINES 9ul ;, ?

FACTS:

In 1""1, Eloria Ocampo and her daughter, 0eresita 0an, obtained )rom the Dand 6an7 o) the +hilippines a +1,,. G-Hloan (herein re)erred to as :uedan loan*, $hich $as released tothem on the separate dates9

Ocampo and 0an availed o) the Quedan Binancing +rogram )or Erain Stoc7s o) the Quedan and Rural 3redit Euarantee 3orporation (Quedancor*, $hereby the latter guaranteed to pay theDand 6an7 their loan,but upto !5 o) the outstanding loan, plus interests upon maturity, in case o) non#payment. +ursuant thereto, they delivered to the Dand 6an7 several grains $arehousereceipts (:uedans*, and eecuted a &eed o) AssignmentL3ontract o) +ledge covering 41,=" cavans o) palay.

3orollarily, the :uedans delivered by Ocampo and 0an, as security, turned out to be insu))icient. Ocampo and 0an constituted a R> over 2 parcels o) unregistered land o$ned by Ocampo tosecure the remaining 25. Such encumbrance $as annotated in the land titile $hen Ocampo )iled )or registration o) the said property.

On August 1, 1""1, Ocampo signed debit advices amounting to +1,. as partial payment o) the :uedan loan. A)ter the maturity o) the remaining three (-* promissory notes on October2, 1""1, Ocampo )ailed to pay the balance )or her :uedan loan.

0hus, the Dand 6an7 )iled $ith Quedancor a claim )or guarantee payment. It also )iled $ith the R03 a criminal case )or esta)a against Ocampo )or disposing the stoc7s o) palay covered by thegrains $arehouse receipts. Also )or the etra'udicial )oreclosure o) the R> as regards to the 25 portion o) the :uedan loan.

0herea)ter, the ExOfficio+rovincial Sheri)) issued a tra'udicial Sale, setting the sale at public auction, a copy o) $hich $as )urnished to, and received by, Ocampo.

Ocampo and 0an )iled $ith the R03 a 3omplaint )or Declaration of Nullity and Damages with Application for a Writ of reliminary !n"unction against the Dand 6an7 o) the +hilippines and the ExOfficio+rovincial Sheri)) o) +angasinan, praying that a)ter due notice and hearing on the merits, the R039 (1* ecla%e t!e ee "# %eal estate *"%t)a)e 'ull a' "$ (2* ecla%e t!ee(t%a@u$c$al #"%ecl"su%e +%"cee$')s a' '"t$ce "# e(t%a@u$c$al sale, 'ull a' "$ (-* *a0e t!e %$t "# +%el$*$'a% $'@u'ct$"' +e%*a'e't and (4* "%e% t!e e#e'a'ts t" +a,

@"$'tl a' see%all, *"%al a*a)es $' a' a*"u't t" &e #$(e & t!e RTC, +lus att"%'es #ees, e(+e'ses "# l$t$)at$"', a*"') "t!e%s. In their 3omplaint, Ocampo and 0an claimed that the real estate mortgage is a )orgery, because Dand 6an7 did not in)orm them that the properties $ould be used to secure the payment o)

a +2 loan, $hich they never applied )or, much less received its proceeds. And the properties $as $as allegedly mortagaged $as not her o$n. Dand 6an7 presented its $itnesses $hich testi)ied that Ocampo and 0an obtained a 1 loan )rom Dandban7, !5 $as secured by :uedan receipts and $as re:uired to submit an additional

collateral )or the remaining 25 unsecured portion. As )or Ocampos claim o) )ull payment o) the :uedan loan, Dand 6an7 insisted other$ise. It argued that the :uedan loan $as still not )ully satis)ied because it $as not made a party to the &eed

o) Absolute Assignment bet$een Ocampo and Quedancor. R03 rendered a decision in )avor o) Ocampo and 0an. Dand 6an7 moved )or reconsideration, but the R03 denied the same.

3A reversed the decision o) the R03 and ordered )or the dismissal o) the complaint.

Ocampo and 0an did not )ile a motion )or reconsideration o) the 3A decision. Instead, they elevated the matter be)ore the 3ourt via the present petition, $hich involves the )ollo$ing issues9

ISSUES:

(1* $hether or not the deed o) real estate mortgage $as void due to )orgery and

(2* assuming that it $as valid, $hether or not the loan $as already etinguished.RULING:

9?

Amount &ate released &ate o) maturity +


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0he real issue here is not so much on )orgery, but on the )act that the Dand 6an7 allegedly used the genuine signature o) Ocampo in order to ma7e it appear that she had eecuted a real estatemortgage to secure a +2 loan. Ocampo maintained that $hen she signed the blan7 )orm, she $as led to believe by the Dand 6an7 that such $ould be used to process her + loanapplication. She $as, there)ore, surprised $hen she received a notice )rom the sheri)) regarding the )oreclosure o) a mortgage over her properties.

n)ortunately, Ocampo )ailed to convince the court that she $as deceived, through misrepresentations andLor insidious actions, into signing a blan7 )orm )or use as security to her previous loan.0here)ore, &eed o) R> $as valid.

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+etitioner argues that the copy o) the Real >state ortgage submitted by 6+I (>hibit J1K* is inadmissible, the $itness $ho identi)ied it having no personal 7no$ledge o) its eistence and due

eecution.

Fe contends that there $as no evidence that respondents Sychinghos had other unpaid obligations $ith B>603 )or $hich the title should continue to stand as security.

ISSUE: ?hether respondent Sychinghos had the right to sell or convey title to the sub'ect property at the time o) the dacion en pago

HELD:

0he 3ourt )inds in the a))irmative.

0here having been no previous )oreclosure o) the Real >state ortgage on the sub'ect property, respondent Sychinghos o$nership thereo) remained intact.

A mortgage does not a))ect the o$nership o) the property as it is nothing more than a lien thereon serving as security )or a debt.

0he mortgagee does not ac:uire title to the mortgaged real estate unless he purchases it at a public auction.

Since petitioner agreed to the )ull etinguishment o) respondents spouses then outstanding obligation in vie$ o) the unconditional conveyance to him o) the sub'ect property, here is a per)ected

and en)orceable dacion en pago. Fe should thus en'oy )ull entitlement to the sub'ect property.

6an7 o) the +hilippine Islands, to $hich Bar >ast 6an7 and 0rust 3ompany $as merged, is ordered to surrender the o$ners duplicate copy to the Register o) &eeds o) San %uan, etro anila

in order to process the issuance o) a ne$ title over the sub'ect property in the name o) petitioner, %oseph 0ypingco.

1 0an Shuy vs aula$in Eido, >Carianne

Ta' S!u s spousesGu$lle%*" Maula$' a' Pa%$') Ca%$'" Maula$'

FACTS:

+etitioner and Respondent are both engage in the business o) buying and selling copra and corn.

/icente, petitioners son $ho helps in their business, eplained that $henever they are to buy copra or corn )rom crop sellers they $ould prepare and issue them a pessada.

A pessada is a document that contains details o) the transaction, he )urther eplained that $henever the said pessadas contains the annotationpd on the total amount o) the purchase price that$ould mean that the said crop deliveries had already been paid by the petitioner.

%uly 1,1"". Ferein petitioner etended a loan to the respondent )or the amount o) +42,. In return herein respondent obligated himsel) to pay the said loan and to sell copras to thepetitioner.

+etitioner allege that despite repeated demands, herein respondent only remitted a total amount o) 2!, $hich leaves an outstanding balance o) -"1,.

+etitioner )iled a complaint in the regional trial court.

Respondent countered that he had already paid the sub'ect amount in )ull. According to him, he continuously delivered and sold copras to petitioner an d that he had a subse:uent oralarrangement $ith petitioner that the net proceeds )or the said copra deliveries $ould be applied as installment payment )or his loan.

0o bolster his de)ense. Respondent presented copies o) the pessada issued by >lena, daughter o) the respondent and o) /icente. Fe pointed out that the said do not contain the notation pd$hich means that he did not receive the net proceeds o) the copra deliveries but instead they $ere applied as installment payment )or the loan.

R03 ruled that the net proceeds )or the copra deliveries should be applied as installment payment. 3A a))irmed the decision o) the R03.

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In the case at bar, despite there $as devaluation o) the peso, 6S+ never declared etraordinary de)lation. Also, the parties did not agree to recogniCe the e))ect o) etraordinary in)lation or

de)lation i) such case is present.

0he court ans$ered that the respondents should pay their dollar#denominated loans at the echange rate )ied by the 6S+ on the date o) maturity.

12 Almeda vs 6athala ar7eting /alle, %oan

ALMEDA S BATHALA M8TG INDUSTRIES

FACTS: Sometime in ay 1"", respondent 6athala ar7eting Industries, Inc., as lessee, represented by its president Ramon F. Earcia, rene$ed its 3ontract o) Dease 4$ith +onciano D. Almeda(+onciano*, as lessor, husband o) petitioner >u)emia and )ather o) petitioner Romel Almeda. nder the said contract, +onciano agreed to lease a portion o) the Almeda 3ompound, located at 22!+asong 0amo Street, a7ati 3ity.

3O


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14 +abugais vs Sahi'$ani Sumando, BritCie Dynne

PABUGAIS s SAHI4ANI

FACTS:

+ursuant to an Agreement and nderta7ing, petitioner +abugais sold to respondent Sahi'$ani a lot o) 12-" s:m. Docated in %aracanda St.,


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3A ABBIR>&.

1 Dlobrera vs BernandeC ungcal, ar'ouree

LLOBRERA S FERNANDE7

FACTS:

Sub'ect o) the controversy is a 1!4"#s:uare meter parcel o) land covered by 030 W "42.

Respondent, %ose)ina BernandeC served a $ritten demand letter to the petitioners to vacate the sub'ect property $ithin 1 days )rom notice.


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1", AlCul purchased )rom 6.>. San &iego Inc. 4 subdivision lots $ith an area o) 1,2 s:uare meters in Aurora Subdivision, alabon through installment under a 3ontract to Sell.

AlCul too7 immediate possession o) the property and constructed a house and perimeter )ence.

1", AlCul signed a 3onditional &eed o) Assignment and 0rans)er o) Rights, assigning to ?ilson u, AlCuls rights under the 3ontract to Sell >.

AlCul )iled to the O##$ce "# t!e P%es$e't, $hich ruled FDR6 $as correct to deny consignation.

AlCul )iled to the CA, $hich agreed to the FDR6 decision. 0he 3A, on the basis o) 'ustice, allo$ed AlCul to e))ect consignation $ithin days )rom receipt o) decision on Fe&%ua% , tension o) 0ime to 3omply )or 1 days. It $as granted.

ISSUE:

?O< AlCul is still entitled to consignation despite the lapse o) the period provided by the S3;

RULING:

NO. S3 ERA& petition and R>I& order o) the O+ and FDR6.

San &iego is declared the true and legal o$ner o) lots but must reimburse AlCul )or improvements made on property.

AlCul )ailed to comply $ith the S3 Resolution on u'e J, >>giving a non#etendible period o) - days )rom entry o) 'udgment to ma7e )ull payment. 0he resolution became )inal andeecutory on %uly 2, 1""=.

AlCul received a copy o) the entry through counsel on Au)ust >. Fe had until Se+te*&e% >to pay )ully.

A)ter - unsuccess)ul tenders o) payment, AlCul made no consignation o) the amount in court.

San &iego has t" *a$' c"'te't$"'s9

1. AlCul $ '"t e+"s$t a' a*"u't$ith the FDR6, violating the rules )or consignment $hich re:uire actual deposit o) the amount already due $ith the proper 'udicial authority.2. AlCul only o))ered to consign be)ore the FDR6 on Ma%c! >, one and a hal) years later. 0he ela "# . ea%sshould be regarded as a a$e%to claim residual remedies.

I'c!"ate R$)!ts "# Al1ul

Al1ul c"'te's

1. 0he &ecember 2=, 1"" Resolution granting her +%"+%$eta% %$)!tsover lots has long become )inal and eecutory.2. Lac!es a' est"++elsdo not apply in the case since circumstances sho$ that she has relentless pursued the protection o) her rights over the lots )or over 2 years.

0he S3 held that AlCul has inchoate proprietary rights over the lots. S3 upheld 3A ruling in declaring the titles in the name o) the /entura spouses 'ull a' "$. 0he titles are to be reinstatedin the name o) San &iego, u't$l suc! t$*e t!at "'e%s!$+ $s t%a's#e%%e t" Al1ul.

AlCuls epectant rights over the lots, ho$ever, are c"'$t$"'eon the payment o) the balance.

AlCul is deemed to have )or)eited her rights over the lots )or )ailure to e))ect )ull payment and pay monthly amortiCations and absence o) consignation $ithin the -#day period or reasonable time.

Te'e% "# Pa*e't a' C"'s$)'at$"':

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ere tender o) payment is not enough to etinguish an obligation. /alid consignation in court is also needed to e))ect the etinguishment.

C"'s$)'at$"' is the act o) depositing the thing due $ith the court $henever the creditor re)uses to accept. It generally re:uires prior tender o) payment. Te'e% is the antecedent o)consignation, $hich is the principal. 0ender is etra'udicial $hile consignation is 'udicial and both, $hen validly made, produces the e))ect o) payment and etinguishes obligation.

0here is no dispute that a valid tender o) payment $as made by AlCul. Fo$ever, $ithout valid consignation, mere tender is insu))icient to etinguish the obligation and consummate ac:uisition.

pon re)usal by San &iego to receive payment, the proper remedy )or AlCul $as consignation. ?hen the S3 resolved to re)er the case to the court o) origin, AlCul )ailed to consign the amount$ith the court o) origin.

0he S3 issued its Resolution on a'ua% >Jand AlCul pursued the action )or consignation only on Ma%c! >, $hich is $ay beyond a reasonable time therea)ter.

S3 has accorded AlCul all the opportunity to pursue consignation $ith court o) origin but respondent still )ailed. 0his is already inecusable 'e)lecton AlCuls part.

A%t velina Daserna and Eloria 3a'ipe, represented by their attorney#in#)act, +roceso B. 3ruC, as buyers, entered into a 3ontract to Sell -$ith petitioner Solid Fomes,

Inc. (SFI*, a corporation engaged in the development and sale o) subdivision lots, as seller. 0he sub'ect o) the said 3ontract to Sell $as a parcel o) land located at Dot -, 6loc7 I, +hase II, Doyola Erand /illas, QueCon 3ity, $ith a total area o) = s:uare meters, more or less.

0he total contract price agreed upon by the parties )or the said parcel o) land $as +12,2=., to be paid in the )ollo$ing manner9 (1* the +--,=. do$n payment should be paid upon thesigning o) the contract and (2* the remaining balance o) +1==,421.!!4$as payable )or a period o) three years at a monthly installment o) +4,=22.!- beginning 1 April 1".

0he respondents made the do$n payment and several monthly installments.

?hen the respondents had allegedly paid "5 o) the purchase price, they demanded the eecution and delivery o) the &eed o) Sale and the 0rans)er 3erti)icate o) 0itle (030* o) the sub'ectproperty upon the )inal payment o) the balance. 6ut the petitioner did not comply $ith the demands o) the respondents.

0he respondents $hereupon )iled against the petitioner a 3omplaint )or &elivery o) 0itle and >ecution o) &eed o) Sale $ith &amages, dated 2! %une 1"", be)ore the Fousing and Dand seRegulatory 6oard (FDR6*.

In their 3omplaint, respondents alleged that as their outstanding balance $as only +,"2!.1!, they $ere already demanding the eecution and delivery o) the &eed o) Sale and the 030 o) thesub'ect property upon )inal payment o) the said amount.

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0he petitioner )iled a otion to Admit Ans$er, together $ith its Ans$er dated 1 September 1"", asserting that the respondents have no cause o) action against it because the respondents)ailed to sho$ that they had complied $ith their obligations under the 3ontract to Sell, since the respondents had not yet paid in )ull the total purchase price o) the sub'ect property.

In vie$ o) the said non#payment, the petitioner considered the 3ontract to Sell abandoned by the respondents and rescinded in accordance $ith the provisions o) the same contract.

FDR6 Arbiter rendered a &ecisiondenying respondents prayer )or the issuance o) the &eed o) Sale and the delivery o) the 030.

Beeling aggrieved, the petitioner appealed the a)oresaid &ecision to the FDR6 6oard o) 3ommissioners $hich ruled

1. Respondent is directed to pay the balance o) +11,!.41 $ithin the thirty (-* days

2. +etitioner is directed to eecute the necessary deed o) sale and deliver the 030 over the sub'ect property immediately upon )ull payment.

-. +etitioner is directed to cease and desist )rom charging andLor collecting )ees other than those authoriCed by +.&. " and other related la$s.

+etitioner remained unsatis)ied $ith the &ecision o) the FDR6 6oard o) 3ommissioners, thus, it appealed the same be)ore the O))ice o) the +resident $hich a))irmed in toto the same. Again)eeling it )iled an appeal to the 3ourt o) Appeals $hich also a))irmed the ruling o) the O))ice o) the +resident.

Respondents have tendered payment in the amount o)+11,!4.41, representing the balance o) the purchase price o) the sub'ect property, as determined in the 1 August 1""4 &ecision o) theFDR6 6oard o) 3ommissioners, and a))irmed by both the O))ice o) the +resident and the 3ourt o) Appeals. Fo$ever, the petitioner, $ithout any 'usti)iable reason, re)used to accept the same.

Issue:

?hether or not Solid Fomes have the right to rescind the contract based on the stipulations o) the contract to sell

?hether or not the contract is still subsisting

Rul$'):

In Ramos v. Sarao, the S3 held that tender o) payment is the mani)estation by debtors o) their desire to comply $ith or to pay their obligation. I) the creditor re)uses the tender o) payment $ithout 'ustcause, the debtors are discharged )rom the obligation by the consignation o) the sum due. 3onsignation is made by depositing the proper amount $ith the 'udicial authority, be)ore $hom the tender o)payment and the announcement o) the consignation shall be proved. All interested parties are to be noti)ied o) the consignation. 3ompliance $ith these re:uisites is mandatory. In the case at bar, a)ter thepetitioner re)used to accept the tender o) payment made by the respondents, the latter )ailed to ma7e any consignation o) the sum due. 3onse:uently, there $as no valid tender o) payment and therespondents are not yet discharged )rom the obligation to pay the outstanding balance o) the purchase price o) the sub'ect property.

Since petitioner did not rescind the 3ontract to Sell it eecuted $ith the respondents by a notarial act, the said 3ontract still stands. 6oth parties must comply $ith their obligations under the said 3ontract.As ruled by the FDR6 6oard o) 3ommissioners, and a))irmed by the O))ice o) the +resident and the 3ourt o) Appeals, the respondents must )irst pay the balance o) the purchase price o) the sub'ectproperty, a)ter $hich, the petitioner must eecute and deliver the necessary &eed o) Sale and 030 o) said property.

1" +hil. . P!$l$++$'e Nat$"'al C"'st%uct$"' C"%+"%at$"' . CA

Facts:

On 1!


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+rivate respondents re)used to accede to petitioners re:uest )or the pretermination o) the lease and reiterated their demand )or the payment o) the )irst annual rental. +etitioner contended that it$as only obligated to pay +2, . representing the rental payments )or one month period o) lease. 0his prompted private respondents to institute an action )or speci)ic per)ormance $ith damagesagainst petitioner be)ore the R03 o) +asig.

0he R03 rendered a decision ordering petitioner to pay the amount o) +4"2, . $hich represented the rentals )or t$o years. 0his $as a))irmed by the 3A.

+etitioner asserts that it should be released )rom the obligatory )orce o) the contract o) lease because the purpose o) the contract did not materialiCe due to un)oreseen events and causes

beyond its control such as the abrupt change in political climate a)ter the >&SA revolution and )inancial di))iculties.

Issue: ?O< petitioner may be released )rom its obligation )ollo$ing the principle o) rebus sic stantibus.

Hel:

nder the concept o) rebus sic stantibus0 the parties stipulate in the light o) certain prevailing conditions, and once these conditions cease to eist, the contract also ceases to eist. 0his theoryis said to be the basis o) Article 12= o) the 33 $hich provides9

Art. ,123. When the service has become so difficult as to be manifestly beyond the contemplation of the parties0 the obligor may also be released therefrom0 in whole or in par t.

0his article, $hich enunciates the doctrine o) un)oreseen events, is not, ho$ever, an absolute application o) the principle o) rebus sic stantibus, $hich $ould endanger the security o) contractual

relations. 0he parties to the contract must be presumed to have assumed the ris7s o) un)avorable developments. It is there)ore only in absolutely eceptional changes o) circumstances that e:uitydemands assistance )or the debtor.

In the case at bar, petitioner contends that the abrupt change in the political climate o) the country a)ter the >&SA Revolution and its poor )inancial condition Jrendered the per)ormance o) thelease contract impractical and inimical to the corporate survivalK o) the petitioner. It is ho$ever a matter o) record that petitioner +


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0he lease shall not become binding upon us unless and until the government agencies concerned shall authoriCe, permit or license us to open and maintain our business

?e shall also noti)y you i) any o) the re:uired permits, licenses and authorities shal l not be be ( sic * given or granted $ithin )i )teen days (1* )rom your con)orm (sic*hereto. Insuch case, the agreement may be canceled and all rights and obligations hereunder shall cease.G2H (underscoring supplied*

?hile Bood Best $as able to secure the necessary licenses and permits )or the year 1""", it )ailed to commence business operations. Bor the year 2, Bood Bests application )or rene$al o)barangay business clearance $as Jheld in abeyance until )urther study o) GitsH 7itchen )acilities.

Bood Best $as unable to operate due to lac7 o) necessary licenses. Bearing )urther business losses, Bood Best communicated its intent to terminate the lease contract to So $ho did not accedeand instead o))ered to help Bood Best secure authoriCation )rom the barangay.

In August 2, Bood Best in)ormed So o) its intent to terminate the lease, and it in )act stopped paying rent. So later sent a


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Birst remittance $as made by


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(-* 0hat the t$o debts be due(4* 0hat they be l i:uidated and demandable(* 0hat over neither o) them there be any retention or controversy, commenced by third persons and communicated in due time to the debtor.

Absent any sho$ing that all o) these re:uisites eist, compensation may not ta7e place.

?hile respondent nisphere does not deny its liability )or its unpaid dues to petitioners, the latter do not admit any responsibility )or the loss su))ered by the )ormer occasioned by the burglary. At best,$hat respondent nisphere has against petitioners is 'ust a claim, not a debt. Such being the case, it is not en)orceable in court. It is only the debts that are en)orceable in court, there being no apparentde)enses inherent in them. Respondent nispheres claim )or its loss has not been passed upon by any legal authority so as to elevate it to the level o) a debt.

A debt is a claim $hich has been )ormally passed upon by the highest authority to $hich it can in la$ be submitted and has been declared to be a debt. A claim, on the other hand, is a debt in embryo. Itis mere evidence o) a debt and must pass thru the process prescribed by la$ be)ore it develops into $hat is properly called a debt.

0ested by the )oregoing yardstic7, it has not been su))iciently established that compensation or set#o)) is proper here as there is lac7 o) evidence to sho$ that petitioners >.E./. Realty and 333 andrespondent nisphere are mutually debtors and creditors to each other.

0he petition is granted.

24 0rinidad vs Acapulco +usta, 6% 6onn

HERMENEGILDO M. TRINIDAD,+etitioner, vs. ESTRELLA ACAPULCO,Respondent

FACTS:

O' Ma , >>,respondent >strella Acapulco )iled a 3omplaint see7ing the nulli)ication o) a sale she made in )avor o) petitioner Fermenegildo . 0rinidad.

S!e alle)e:Sometime in Bebruary 1""1, a certain +rimitivo 3aTete re:uested her to sell a ercedes 6enC )or +!,.. 3aTete also said that i) respondent hersel) $ill buy the car, 3aTete $as$illing to sell it )or +,..

Pet$t$"'e% &"%%"e t!e ca%)rom respondent )or t$o days but instead o) returning the car as promised, petitioner told respondent to buy the car )rom 3aTete )or +,. and that petitioner $ouldpay respondent a)ter he returns )rom &avao.

F"ll"$') +et$t$"'e%3s $'st%uct$"'s, respondent re:uested 3aTete to eecute a deed o) sale covering the car in respondents )avor )or +,. )or $hich respondent issued three chec7s in )avoro) 3aTete.

Res+"'e't t!e%ea#te% e(ecutea deed o) sale in )avor o) petitioner even though petitioner did not pay her any consideration )or the sale. ?hen petitioner returned )rom &avao, he re)used to payrespondent the amount o) +,. saying that said amount $ould 'ust be deducted )rom $hatever outstanding obligation respondent had $ith him, $hich is +==,..

Due t" +et$t$"'e%3s #a$lu%eto pay respondent, the chec7s that respondent issued in )avor o) 3aTete bounced, thus criminal charges $ere )iled against her. Respondent then prayed that the deed o)sale bet$een her and petitioner be declared null and void that the car be returned to her and that petitioner be ordered to pay damages.

I' !$s A'se%petitioner contended that9 it is not true that he borro$ed the car and that any demand $as made to return it he also did not give any instructions to respondent to buy the car )rom 3aTetebecause as early as September 2!, 1"", 3aTete has already sold the car to respondent )or +,. at the time respondent eecuted the deed o) sale in his )avor on Ma%c! K, >>, respondent$as already in possession o) the deed o) sale )rom 3aTete the amount o) +,. $as )ully paid by $ay o) dation in payment to partially etinguish respondents obligation $ith petitioner thecontract entered into $as a true sale o) a motor vehicle and the mode o) payment $as that o) dation in payment agreed upon at the time o) the sale.

RTC %e'e%e $ts Dec$s$"')inding that no dacion en pago is present in this case as common consent $as not proven.

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+etitioner )iled a otion )or Reconsideration and also a Supplemental otion $here )or the )irst time, he averred that assuming that respondent did not agree to have the purchase price charged againstthe +==,. she o$ed petitioner, nonetheless, $ith or $ithout her consent andLor 7no$ledge, the obligations parties o$ed to each other $ere etinguished by operation o) la$ or through legalcompensation in the amount o) +,..

T!e RTC e'$ethe otion )or Reconsideration and Supplemental otion stating that the claim o) dacion en pago is ineistent and the de)ense o) legal compensation $as not alleged or pleaded inpetitioners Ans$er.

CA a##$%*e t!e Dec$s$"', )inding that the issue o) legal compensation $as )iled too late as it $as brought up only in the supplemental motion )or reconsideration.

He'ce t!$s +et$t$"'.

ISSUE:?O< legal compensation has ta7en place in this case

HELD:YES, t!e%e as le)al c"*+e'sat$"' $' t!$s case.

Pet$t$"'e% a%)ues t!at:the purchase price o) the car had been automatically o))set by respondents o$n monetary obligation o) +==,., even i) he and respondent had not agreed to o))setting

)ollo$ing Article 12" o) the 3ivil 3ode ?hat petitioner is contending is that legal compensation should be appreciated, though not epressly stated in his Ans$er to the 3omplaint be)ore the trial court. Fe )urther argues that, in any case,

legal compensation ta7es place by operation o) la$ even $ithout the consent o) the interested parties.

T!e C"u%t %es"les t" )%a't t!e +et$t$"'.

C"*+e'sat$"' ta0es e##ectby operation o) la$ even $ithout the consent or 7no$ledge o) the parties concerned $hen all the re:uisites in Article 12" o) the 3ivil 3ode are present, in consonance $ithArticle 12" o) the 3ivil 3ode $hich provides that9

A%t$cle =.?hen all the re:uisites mentioned in article 12" are present, compensation ta7es e))ect by operation o) la$, and etinguishes both debts to the concurrent amount, even though thecreditors and debtors are not a$are o) the compensation.

S$'ce $t ta0es +lace ipso jure, $hen used as a de)ense, it retroacts to the date $hen all its re:uisites are )ul)illed.

A%t$cle +%"$esthat in order that compensation may be proper, it is necessary9

(1* that each one o) the obligors be bound principally, and that he be at the same time a principal creditor o) the other

(2* that both debts consist in a sum o) money, or i ) the things due are consumable, they be o) the same 7ind, and also o) the same :uality i) the latter has been stated

(-* that the t$o debts be due

(4* that they be li:uidated and demandable

(* that over neither o) them there be any retention or controversy, commenced by third persons and communicated in due time to the debtor.

He%e, +et$t$"'e%3s sta'ceis that legal compensation has ta7en place and operates even against the $ill o) the parties because9o 9a?%es+"'e't a' +et$t$"'e%$ere personally both creditor and debtor o) each other

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o 9&?t!e *"'eta% "&l$)at$"'o) respondent $as +==,. and that o) the petitioner $as +,. sho$ing that both indebtedness $ere monetary obligations t!e a*"u't "# !$c!$ere also both 7no$n and li:uidated

o 9c?&"t! *"'eta% "&l$)at$"'shad become due and demandableXpetitioners obligation as sho$n in the deed o) sale and respondents indebtedness as sho$n in the dishonored chec7sand

o 9?'e$t!e% "# t!e e&tsor obligations are sub'ect o) a controversy commenced by a third person.

T!e cla$* "# %es+"'e'tthat there could be no legal compensation in this case as one o) the obligations consists o) delivery o) a car and not a sum o) money *ust #a$l. Res+"'e't s"l t!e ca%

t" +et$t$"'e% "' Ma%c! K, >> #"% P==,===.== !$le s!e #$le !e% c"*+la$'t #"% 'ull$#$cat$"' "# t!e sale "'l "' Ma , >>. As le)al c"*+e'sat$"' ta0es +lace ipso jure, a' %et%"acts t"t!e ate !e' $ts %e/u$s$tes a%e #ul#$lle, le)al c"*+e'sat$"' !as al%ea ta0e' +lace at t!e t$*e "# t!e sale. At such time, petitioner o$ed respondent the sum o) +,. $hich is theprice o) the vehicle.

C"'se/ue'tl, & "+e%at$"' "# la,the +,. $hich petitioner o$ed respondent is o))#set against the +==,. o$ed by respondent to petitioner, lea$') a &ala'ceo) +==,.,

$hich respondent should pay $ith 125 interest per annum )rom date o) 'udicial or etra'udicial deed. S$'ce t!e%e asno etra'udicial deed in this case, the interest shall be resolved )rom the datepetitioner )iled its Supplemental otion )or Reconsideration invo7ing )or the )irst time legal compensation, that is, ay 2, 1""2.

Fence, the petition is ERA&.

6% 6onn +ustaW!4


28/44

Dicaros, through his counsel, sent demands )or payment. 6ut $ere not responded by the respondent.

Biled an action in the R03 and )avored.

3A reversed the decision o) the 0rial 3ourt.

ISSUE:?O< the OA $as a valid 3onventional Subrogation.

Hel:S3 said


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Issue: ?o<


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?O< the 3ompromise Agreement bet$een &elta and 36DI superseded andLor discharged the sub'ect promissory notes HELD1.


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As suggested by petitioners la$yer, respondent spouses indorsed the accounts o) her debtors to petitioner so that the latter $ould be the one to collect )rom her debtors and she $ould no longerhave any obligation to petitioner.

Fence, the deeds o) assignment $ere eecuted covering the sums o) money due )rom her debtors.

0hey insisted that by virtue o) these documents, petitioner became the ne$ collector o) their debtors and the obligation to pay the balance o) their loans had been etinguished.

Agri)ina $as able to collect the total amount o) -1,php )rom Belicidads debtors.

She tried to collect Belicidads balance and $hen the latter reneged on her promise, Agri)ina )iled a complaint in the o))ice o) the barangay )or the collection o) -,php. 0here $as no settlement. +etitioner )iled a complaint )or sum o) money and damages against respondents.

RTC:Belicidads obligation had not been novated by the deeds o) assignment and the promissory notes eecuted by eecuted by her borro$ers. 0he documents did not contain any epressagreement to novate and etinguish Belicidads obligation. 0he deeds and notes $ere separate contracts $hich could stand alone )rom the original indebtedness o) Belicidad. 3onsidering, ho$ever,

Agri)inas admission that she $as able to collect )rom Belicidads debtors the total amount o) -1,php this should be deducted )rom the latters accountability.Fence, the balance, eclusive o)interests, amounted to 42,.php.

CA:A))irmed R03s decision $ith modi)ication ordering de)endant to pay the balance o) total indebtedness in the amount o) 1,-41php plus =5 per month.

Issue: WON the obligation of the respondents to pay petitioner has been extinguished by the deeds of assignment of credit.

Rul$'): Yes.

0he Supreme 3ourt agreed $ith the )inding o) the 3A that petitioner had no right to collect )rom respondents the total amount o) -1,php, $hich includes more than 1!,"!php $hich respondent

Belicidad collected )rom ! debtors. +etitioner cannot again collect the same amount )rom respondents other$ise, she $ould be enriching hersel) at their epense.


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RICAR7E s. CA, PP, CALTE, PCIBAN8 G1 S3RA -2 Bebruary ", 2H

Facts:

+etitioner $as employed as a collector#messenger by 3ity Service 3orporation, a domestic corporation engaged in messengerial services. Fe $as assigned to the main o))ice o) 3alte+hilippines, Inc. (3alte* in a7ati. Fis primary tas7 $as to collect chec7s payable to 3alte and deliver them to the cashier. Fe also delivered invoices to 3altes customers. 3alte )iled a criminalcomplaint against petitioner )or esta)a through )alsi)ication o) commercial documents. 0he manager o) its 6an7ing and Insurance &epartment, Romano, alleged that $hile his department $as conducting a

daily electronic report )rom +3I6an7, one o) its depositary ban7s, it $as discovered that un7no$n to the department, a company chec7 in the amount o) +,",.2 payable to &ante R. EutierreC, hadbeen cleared through +3I6. An investigation also revealed that t$o other chec7s $ere also missing and that his signature and that o) another signatory, Eo:uinco, $ere )orgeries. A chec7, in the amounto) +1,",.2 li7e$ise payable to &ante R. EutierreC, $as also cleared through the same ban7. 0his chec7 $as li7e$ise not issued by 3alte, and the signatures appearing thereon had also been)orged. pon veri)ication, it $as uncovered that the chec7s $ere deposited at the 6&O in the name o) a regular customer o) 3alte, EutierreC. EutierreC, ho$ever, diso$ned the savings account as $ell ashis signatures on the dorsal portions thereo). Fe also denied having $ithdra$n any amount )rom said savings account. Burther investigation revealed that said savings account had actually been openedby petitioner the )orged chec7s $ere deposited and endorsed by him under EutierreCs name. A ban7 teller )rom the 6&O positively identi)ied petitioner as the person $ho opened the savings accountusing EutierreCs name.

+etitioner )urther averred that unless the In)ormations $ere amended to change the private complainant to +3I6, his right as accused $ould be pre'udiced. Fe pointed out, ho$ever, that theIn)ormations can no longer be amended because he had already been arraigned under the original In)ormations. Fe insisted that the amendments o) the In)ormations to substitute +3I6 as the o))endedparty )or 3alte $ould place him in double 'eopardy.

+3I6, through SRO, opposed the motion. It contended that the +3I6 had re#credited the amount to 3alte to the etent o) the indemnity hence, the +3I6 had been subrogated to the rightsand interests o) 3alte as private complainant. 3onse:uently, the +3I6 is entitled to receive any civil indemnity $hich the trial court $ould ad'udge against the accused. oreover, the re#credited amount$as brought out on cross#eamination by Ramon Romano $ho testi)ied )or the +rosecution. +3I6 pointed out that petitioner had mar7ed in evidence the letter o) the A33RA Da$ O))ice to +3I6an7 and

the credit memo sent by +3I6 to 3alte.

Issue:

?O< there is a valid subrogation bet$een 3alte and +3I6A


34/44

In its 3omplaint, respondent alleged that petitioner obtained )rom a s. +atrocinio S. +icache t$o loans, $ith the aggregate principal amount o) +=,., and covered by promissory notes dulysigned by petitioner.

In the )irst promissory note,dated " DO+>&O


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An assignment o) credit has been de)ined as an agreement by virtue o) $hich the o$ner o) a credit (7no$n as the assignor*, by a legal cause # such as sale, dationin payment or echange ordonation # and $ithout need o) the debtors consent, trans)ers that credit and its accessory rights to another (7no$n as the assignee*, $ho ac:uires the po$er to en)orce it, to the same etent as theassignor could have en)orced it against the debtor.

On the other hand, subrogation, by de)inition, is the trans)er o) all the rights o) the creditor to a third person, $ho substitutes him in all his rights. It may either be legal or conventional. Degalsubrogation is that $hich ta7es place $ithout agreement but by operation o) la$ because o) certain acts. 3onventional subrogation is that $hich ta7es place by agreement o) parties.

Under our Code, however, conventional subrogation is not identical to assignment of credit. In the )ormer, the debtors consent is necessary in the latter, it is not re:uired, noti)ication o) theassignment o) credit to the debtor is su))icient. Subrogation etinguishes an obligation and gives rise to a ne$ one assignment re)ers to the same right $hich passes )rom one person to another. 0henullity o) an old obligation may be cured by subrogation, such that the ne$ obligation $ill be per)ectly valid but the nullity o) an obligation is not remedied by the assignment o) the creditors right to

another.

Article 1- o) the 3ivil 3ode provides that conventional subrogation must be clearly established in order that it may ta7e e))ect. Since it is petitioner $ho claims that there is conventional subrogationin this case, the burden o) proo) rests upon him to establish the same by a preponderance o) evidence.

0here is nothing in the said Assignment o) 3redit $hich imparts to this 3ourt, $hether literally or deductively, that a conventional subrogation $as intended by the parties thereto. 0he terms o) theAssignment o) 3redit only convey the straight)or$ard intention o) s. +icache to @sell, assign, trans)er, and convey@ to respondent the debt due her )rom petitioner, as evidenced by the t$o promissorynotes o) the latter, dated "


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Eloria /alenCuelas sister, %uliet Eiron, assumed the remaining balance )or the 11! s:uare meters o) the sub'ect property at +1,. per month to alayaan, $hich the latter accepted )or and inbehal) o) Eloria. 0herea)ter, alayaan demanded that petitioners pay their outstanding obligation, but $ere unheeded. alyaan then )iled a 3omplaint )ot the Rescission o) 3ontract and &amages againstpetitioners. 0he R03 o) 3aloocan rendered a &ecision in )avor o) alayaan, rescinding the contract bet$een the parties and ordering petitioners to vacate the premises.

+etitioners sought recourse )rom the 3A. 0hey aver that the 3A )ailed to see that the original contract bet$een petitioners and alayaan $as altered, changed, modi)ied and restricted as aconse:uence o) the change in the person o) the principal debtor (Sps. /alenCuela to %uliet*. ?hen alayaan agreed to a monthly amortiCation o) +1,. per month the original contract $as changed,and that the same recogniCed %uliets capacity to pay and her designation as the ne$ debtor. >>


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monthly payments on her loan.

So, + turned over all the records o) cash advances to R. + had made monthly payments )rom %une to October 1"". 0otal o) "-,.php.

On October 2, a :uarrel bet$een R and aricion (sister* occured. A barangay hearing happened, $here R reminded + to pay. + allegedly ans$ered, ADI0A< O >< & by the deletion o) the condition that payments shall be made only a)ter completion o) the renovations.

0here)ore, by +s o$n admission and partial per)ormance, under the & AER>>>


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ISSUE:

?O< there is a subrogation o) rights bet$een Respondent Borbes Bactors and Richco 3ompany over the obligation o) petitioner, Blour ills 3orp. to Richco 3orp.

FACTS

In a contract dated 2= April 1"!-, respondent $as appointed as the eclusive +hilippine indent representative o) Richco Rotterdam 6./. (Richco*, a )oreign corporation, in the sale o) the latterscommodities.

nder one o) the terms o) the contract, respondent $as to assume the liabilities o) all the +hilippine buyers, should they )ail to honor the commitments on the discharging operations o) each

vessel, including the payment o) demurrage and other penalties. Sometime in 1"!, petitioner purchased 3anadian barley and soybean meal )rom Richco.

0he contract )urther provided that petitioner guarantees to settle any demurrage due $ithin one (1* month )rom respondents presentation o) the statement.

pon delivery o) the barley and soybean meal, petitioner )ailed to discharge the cargoes )rom the )our (4* vessels at the computed allo$able period to do so. 0hus, it incurred a demurrageamounting to a total o) SU1"-,"-.41.

On numerous occasions, on behal) o) Richco, respondent demanded )rom petitioner the payment o) the demurrage, to no avail. 3onse:uently, on 2 October 1""1, Richco sent acommunication to respondent, in)orming it that the demurrage due )rom petitioner had been debited )rom the respondents account.

Respondent )iled $ith the Regional 0rial 3ourt (R03*, S paid )or it. 0he subrogation $as pursuant to Articles 1-2 and 2=,


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- Starbright Sales vs +hilippine Realty Aranas, evienne

STARBRIGHT SALES ENTERPRISES, INC.,+etitioner, vs. PHILIPPINE REALTY CORPORATION, MSGR. DOMINGO A. CIRILOS, TROPICANA PROPERTIES AND DEELOPMENTCORPORATION and STANDARD REALTY CORPORATION,Respondents.

Facts:

April 1, 1"!! # Ramon Dicup $rote sgr. 3irilos, o))ering to buy three contiguous parcels o) land in +araTa:ue that 0he Foly See and +hilippine Realty 3orporation (+R3* o$ned )or +1,24.

per s:uare meter. Dicup accepted the responsibility )or removing the illegal settlers on the land and enclosed a chec7 )or +1 to @close the transaction.@

and to pay the balance o) the purchase price upon presentation o) the title )or trans)er and once the property has been cleared o) its occupants.

3irilos, representing 0he Foly See and +R3, signed his name on the con)orme portion o) the letter and accepted the chec7.

6ut the chec7 could not be encashed due to Dicups stop#order payment.

Dicup re:uested on April 2=, 1"!! that the titles to the land be instead trans)erred to Starbright Sales >nterprises enclosed a ne$ chec7 )or the same amount.

3irilos $rote SS> to remove the occupants on the property or i) not he $ill return the +1.

SS> replied $ith an @updated proposal.@# that it $ould be $illing to comply $ith the condition provided the purchase price is lo$ered to +1,1. per s:uare meter.

3irilos $rote bac7, re'ecting the @updated proposal.@ 0hat other buyers $ere $illing to ac:uire the property on an @as is, $here is@ basis at +1,4. per s:uare meter gave SS> seven days$ithin $hich to buy the property at +1,4. per s:uare meter. Fe also enclosed a chec7 )or +1 in his letter as re)und.

SS> $rote 3irilos that they already had a per)ected contract o) sale in the April 1, 1"!! letter $hich he signed.

SS> claimed that it got no reply )rom 3irilos and that the net thing they 7ne$, the land had been sold to 0ropicana +roperties on arch -, 1"!".

SS> demanded rescission o) that sale.

ean$hile 0ropicana +roperties sold the three parcels o) land to Standard Realty.

Its demand )or rescission unheeded,

SS> )iled a complaint )or annulment o) sale and reconveyance $ith damages be)ore the R03 o) a7ati, against 0he Foly See, +R3, 3irilos, and 0ropicana +roperties SS> amended itscomplaint impleading Standard Realty as additional de)endant.

0he Foly See sought dismissal o) the case claiming that as a )oreign government, it cannot be sued $ithout its consent. 0he R03 held other$ise but the 3ourt reversed the ruling o) the R03and ordered that 0he Foly See be dismissed.

SS> alleged that Dicups original letter o) April 1, 1"!! to 3irilos constituted a per)ected contract.

Dicup even gave an earnest money o) +1 to @close the transaction.@

Fis o))er to rid the land o) its occupants $as a @mere gesture o) accommodation i) only to epedite the trans)er o) its title.@

Burther, SS> claimed that, in representing 0he Foly See and +R3, 3irilos acted in bad )aith $hen he set the price o) the property at +1,4. per s:uare meter $hen in truth, the property $assold to 0ropicana +roperties )or only +=.=! per s:uare meter.

3irilos maintained, on the other hand, that based on their echange o) letters, no contract o) sale $as per)ected bet$een SS> and the parties he represented. And, only a)ter the negotiationsbet$een them )ell through did he sell the land to 0ropicana +roperties.

R03 treated the April 1, 1"!! letter bet$een Dicum and sgr. 3irilos as a per)ected contract o) sale bet$een the parties.

3irilos attempted to change the terms o) contract and return SS>s initial deposit but the parties reached no agreement regarding such change. Since such agreement $as $anting, the originalterms provided in the April 1, 1"!! letter continued to bind the parties.

3ourt o) Appeals reversed the R03 decision, that no per)ected contract can be gleaned )rom the April 1, 1"!! letter.

Indeed, the subse:uent echange o) letters bet$een SS> and sgr. 3irilos sho$ that the parties $ere grappling $ith the terms o) the sale. 3irilos made no unconditional acceptance that $ouldgive rise to a per)ected contract.

As to the +1 given to 3irilos, the 3A considered it an option money that secured )or SS> only the privilege to buy the property even i) Dicup called it a @deposit.@ 3A denied SS>s motion )orreconsideration.

Issue: ?hether or not there $as a per)ected contract o) sale eisted bet$een SS> and the land o$ners, represented by sgr. 3irilos.

Rul$'):

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On ay 14, 22, nited +ulp and +aper 3o., Inc. (=$* )iled a civil case )or collection o) the amount o) +42,!44,--.14 against nibo +ac7aging 3orporation (=nibox* and /icente Ortega

(Ortega* be)ore the Regional 0rial 3ourt o) a7ati, 6ranch 14! ( %T$*.++3 also prayed )or a ?rit o) +reliminary Attachment against the properties o) nibo and Ortega )or the reason that thelatter $ere on the verge o) insolvency and $ere trans)erring assets in )raud o) creditors. On August 2", 22, the R03 issued the ?rit o) Attachment a)ter ++3 posted a bond in the sameamount o) its claim. 6y virtue o) the said $rit, several properties and assets o) nibo and Ortega $ere attached.

On October 1, 22, nibo and Ortega )iled their otion )or the &ischarge o) Attachment, praying that they be allo$ed to )ile a counter#bond in the amount o)+42,!44,--.14 and that the $rit

o) preliminary attachment be discharged a)ter the )iling o) such bond. Although this $as opposed by ++3, the R03, in its Order dated October 2, 22, granted the said motion )or thedischarge o) the $rit o) attachment sub'ect to the condition that nibo and Ortega )ile a counter#bond. 0hus, on ecution. It $as discovered, ho$ever, that nibo had already ceased its business operation and all o) its assets had been )oreclosed by its

creditor ban7. oreover, the responses o) the selected ban7s $hich $ere served $ith notices o) garnishment indicated that nibo and Ortega no longer had )unds available )orgarnishment. 0he sheri)) also proceeded to the residence o) Ortega to serve the $rit but he $as denied entry to the premises. &espite his e))orts, the sheri)) reported in his


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!ssue

?hether the eecution o) the compromise agreement bet$een ++3 and nibo and Ortega $as tantamount to a novation $hich had the e))ect o) releasing Acropolis )rom its obligation under thecounter#attachment bond.

"uling

++3 argues that the underta7ing o) Acropolis is to secure any 'udgment rendered by the R03 in its )avor. It points out that because o) the posting o) the counter#bond by Acropolis and the

dissolution o) the $rit o) preliminary attachment against nibo and Ortega, ++3 lost its security against the latter t$o $ho had gone ban7rupt. It cites the cases o) >uerrero v. $ourt ofAppealsand artine9 v. $avivesto support its position that the eecution o) a compromise agreement bet$een the parties and the subse:uent rendition o) a 'udgment based on the saidcompromise agreement does not release the surety )rom its obligation nor does it novate the obligation.

Acropolis, on the other hand, contends that it $as not a party to the compromise agreement. uerrero and dra$s attention to the )act that in said case, the compromise agreement speci)ically stipulated that the surety shall continue to be liable, unli7e in the case atbench $here the compromise agreement made no mention o) its obligation to ++3.

0he terms o) the 6ond )or &issolution o) Attachment issued by nibo and Acropolis in )avor o) ++3 are clear and leave no room )or ambiguity9

NOW0 T?E%E@O%E0 we =N!4O A$BA>!N> $O%. as rincipal and ?!8!!NE %C$E A##=%AN$E $O%.0 a corporation duly organi9ed and existing under and by virtue o f the laws

of the hilippines0 as #urety0 in consideration of the dissolution of said a ttachment0 hereby "ointly and severally bind ourselves in the sum of @O%TC TWO !88!ON E!>?T ?=ND%ED @O%TC@O=% T?O=#AND T?%EE ?=ND%ED @!@TC T?%EE AND ,7, ON8C ) 710F7706-6.,7* hilippine $urrency0 in favor of the plaintiff to secure the payment of any "udgment that the plaintiffmay recover against the defendants in this action.

6ased on the )oregoing, Acropolis voluntarily bound itsel) $ith nibo to be solidarily liable to ans$er )or A


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R03 )ound illa guilty beyond reasonable doubt o) 2 counts o) >sta)a thru Balsi)ication o) +ublic &ocuments. On appeal, 3A a))irmed )indings o) R03.

ISSUE: ?hether or :uitable +3Ichec7s prior to the )iling o) the criminal complaint averted his incipient criminal liability. Fo$ever, it must be clari)ied that mere payment o) an obligation be)ore the institution o) a criminal complaint doesnot, on its o$n, constitute novation that may prevent criminal liability.0his 3ourts ruling in Nery in )act $arned that novation is not one o) the means recogniCed by the +enal 3ode $hereby criminal liability can be etinguished hence, the role o) novation may only be toeither prevent the rise o) criminal liability or to cast doubt on the true nature o) the original petition, $hether or not it $as such that its breach $ould not give rise to penal responsibility, as $hen money

loaned is made to appear as a deposit, or other similar disguise is resorted to (c). Abeto vs. +eople, " +hil. !1 /illareal, 2 +hil. 4!1*.

Ee' $' C$$l La t!e acce+ta'ce "# +a%t$al +a*e'ts, $t!"ut #u%t!e% c!a')e $' t!e "%$)$'al %elat$"' &etee' t!e c"*+la$'a't a' t!e accuse, ca' '"t +%"uce '"at$"'. F"% t!e latte% t"e($st, t!e%e *ust &e +%""# "# $'te't t" e(t$')u$s! t!e "%$)$'al %elat$"'s!$+, a' suc! $'te't ca' '"t &e $'#e%%e #%"* t!e *e%e acce+ta'ce "# +a*e'ts "' acc"u't "# !at $s t"tall ue. uchless can it be said that the acceptance o) partial satis)action can e))ect the nulli)ication o) a cr iminal liability that is )ully matured, and already in the process o) en)orcement.T!e c%$*$'al l$a&$l$t #"% esta#a al%ea c"**$tte $s t!e' '"t a# #ecte & t!e su&se/ue't '"at$"' "# c"'t%act, #"% $t $s a +u&l$c "##e'se !$c! *ust &e +%"secute a' +u'$s!e & t!e State$' $ts "' c"'at$"'.

In the case at bar, the acceptance by +I o) the >:uitable +3I chec7s tendered by illa could not have novated the original transaction, as the chec7s $ere only intended to secure the return o) the +2million the )ormer had already given him. >ven then, these chec7s bounced and $ere thus unable to satis)y his liability. oreover, the estafainvolved here $as not )or simple misappropriation orconversion, but $as committed through illas )alsi)ication o) public documents, the liability )or $hich cannot be etinguished by mere novation.

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Oblicon Digests Updated