YNCHAUSTI vs. YULO [1916] RFC vs. CA Facts: ♦
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JAUCIAN vs. QUEROL [1918] ♦
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June 7, 1948 – Dominguez signed a contract with Realty Investments, Inc. to purchase a registered lot. He made a downpayment downpayment of 39.98 and promising to pay the balance in 119 monthly instalments. After 3 months he obtained a loan from RFC. RFC. RFC agreed to loan him 10,000 on the security of a mortgage upon the house and lot. September 17, 1948 – RFC requested that the necessary documents for the transfer of title of the vendee be executed so that it can be registered together with the mortgage, this with the assurance that as soon as title to the lot had been issued in the name of Dominguez Dominguez and the mortgage in favour of RFC registered as first lien on the lot and building thereon, the RFC would ay Realty Investments “the balance of the purchase price of the lot in the amount of P3,086.98.” Relying on the assurance made by RFC, Realty investment deeded over the lot to Dominguez Dominguez “free of all liens and encumbrances” encumbrances” and thereafter the mortgage deed was recorded in the Registry of Deeds in Manila. Once the mortgage was recorded RFC released to Dominguez P6,500 but the remainder of the loan was never released because Dominguez defaulted in the payment of the amortization due and as a consequence RFC RFC foreclosed the mortgage. RFC bought the mortgaged property in the foreclosure sale and obtain title for it. RFC refused to ay Realty Investments the balance of the purchase price of the lot. TC allowed recovery from Dominguez CA reversed the verdict and sentenced RFC to pay. It is contended by RFC that its obligation to pay “has been modified if not extinguished” by the letter dated September 20, 1948: We want to inform you that, at the request of Mr. Dominguez, o we are agreeable to have the amount paid us at the second release of the proceeds of his loan.
Issue: WON RFC is liable liable for the balance of the purchase price of the lot? YES Ratio: ♦
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Dominguez Dominguez and RFC kept the Realty Investment ignorant on the terms and conditions of their agreement concerning the loan of 10,000 and the manner that sum was to be released Realty Investment was induced to part with his title to a piece of realty property upon the assurance of RFC that it would itself pay the balance of the purchase price due from the Dominguez after its mortgage lien thereon had been registered. If RFC was not to make any further release of funds on the loan, or if such release was to subject to future developments, it was the duty of
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RFC to answer the letter dated September 20, and to inform Realty Investment of the terms and conditions of the loan. The officers of RFC failed to do this and cannot be upheld by the courts of justice. It was the RFC that induced Realty Investment to issue title to the lot free from all encumbrances to Dominguez on its guaranty. Dominguez’s Dominguez’s original obligation to pay realty was affirmed by RFC upon the conveyance of the title of the lot to Dominguez and the registration thereon of the mortgage in favour of RFC. This condition was already fulfilled hence RFC’s obligation to pay the remaining balance became due and demandable.
QUIOMBING vs. CA [1990] Petitioner: Nicencio Tan Quiombing Respondent: CA, Spouses Francisco and Manuelita Saligo Petition to review CA decision Cruz, J. Facts: On Aug. 30, 1983, a “Construction and Service Agreement” Agreement” was entered into by both parties wherein petitioner and Dante Biscocho jointly and severally bound themselves to construct a house for the Saligo spouses for the contract price of Php 137,940. On Oct. 10, 1984, petitioner and Manuelita Saligo entered into a 2nd agreement wherein the latter acknowledged the completion completion of the house and undertook to pay the balance of the contract price. On Nov. 19, 1984, Manuelita Saligo signed a promissory note for Php 125,363.50, representing the balance of the contract price, which she promised to pay on or before Dec. 31, 1984 For failure to pay the balance of the contract price, petitioner filed a complaint for recovery of the amount plus charges and interest. The spouses moved to dismiss the complaint contending that Biscocho was an indispensable indispensable party to the case and should be included as a co-plaintiff. Issue:
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WON the 2nd solidary creditor is an indispensable party in this case? No WON 1 of 2 solidary solidary credit creditors ors may sue sue by himself himself alone alone for the recovery of amounts due to both of them, w/o joining the other creditor as co-plaintiff? Yes
Ratio: The Court disagrees w/ t he private respondents: According to Tolentino, a joint a joint obligation is one wherein each of the debtors is liable only for a proportionate part of the debt and each creditor is entitled to only a proportionate part of the credit, while in a solidary obligation each debtor
is liable for the entire obligation and each creditor is entitled to demand the whole obligation. In accordance with this, active solidarity consists in the authority of each creditor to claim and enforce the rights of all. The Court said that the question as to who should sue the spouses was a personal issue between Quiombing and Biscocho in which the spouses had no right to interfere. It did not matter who filed the complaint because the spouses were liable to either of the 2 as a solidary creditor . If they satisfied one creditor, creditor, it would also discharge their obligation to the other . Also according to Art 1212 of CC “Each “Each one of the solidary creditors may do whatever may be useful to the others, but not anything w/c may prejudicial to the latter.” latter.” And to Art 1214 “the “the debtor may pay any of the solidary creditors; but if any demand … payment should be made to him.” him.” Suing for recovery of the balance of the contract price is certainly useful. And if Quiombing Quiombing eventually collects, Biscocho may claim his share later on. Here the Court also differentiated between indispensable and necessary parties. Indispensable parties are those w/ such interest in the controversy that a final decree will affect their rights therefore the court cannot proceed w/o them. While necessary parties are those whose presence are necessary to adjudicate the controversy but whose interests are so remote that a final decree won’t affect them. Held: Held: Petition is Granted. CA decision finding for the spouses Saligo is Set Aside. INCIONG vs. CA [1996]
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YNCHAUSTI vs. YULO, SUPRA
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Purita ALIPIO, petitioner, vs. COURT OF APPEALS and Romeo Jaring, represented by his Atorney-in-Fact Ramon Jaring [2000] Jaring (Romeo) was the lessee of a 14.5 hec f ishpond in Barito, Mabuco, Hermosa, Bataan. Lease was for 5 yrs ending on Sep. 12, 1990.
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June 19, 1987 til the end of the lease period, Jaring subleased the fishpond to sps Alipio and sps Manuel. Stipulated rent: P485,600.00 payable in 2 installments installments of P300k and P185,600.00. 2nd installment due on June 30, 1989. They all signed the contract.
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Sublessees failed to pay entire 2nd installment, installment, leaving a balance of P50,600.00 w/c they failed to pay despite Alipio’s demands. demands. Thus, he f iled a case against said sublessees asking for payment of the balance or rescission of the contract should they fail to pay the balance.
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Defense of Purita Alipio: petitioned for the dismissal of the case invoking Rule 3, Sec. 21 of the 1964 Rules of Court1, claiming that such was applicable since her husband and co-sublessee passed away prior to the filing of this action. Said rule has been amended by Rule 3, Sec. 20, 1997 Rules of Civil Procedure 2. ♥ Trial court: denied Alipio’s Alipio’s petition. Ratio: she was a party to the contract & should be independently impleaded together w/the Manuel sps. Death of her husband merely resulted in his exclusion from the case. Petitioner & Manuels ordered to pay balance + P10k atty’s fees and costs of suit. ♥ CA: dismissed appeal. Rule invoked is not applicable. The action f or recovery of a sum of money does not survive the death of the defendant, thus the remaining defendants cannot avoid the action by claiming that such death totally extinguished their obligation. When the action is solidary, creditor may bring his action against any of the debtors obligated in solidum. Alipio’s liability is independent of & separate from her husband’s. (Climaco vs. Siy Uy, Imperial vs. David, and Agacoili vs. Vda de Agcaoili) Issues & Ratio:
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When the action is for recovery for recovery of money, debt or interest thereon, and the defendant dies before final judgment in the CFI, it shall be dismissed to be prosecuted in the manner especially provided in these rules. 2
When the action is for the recovery of money arising from contract, contract, express or implied and the defendant dies before entry of final judgment in the court in w/c action was pending at the time of such death, it shall not be dismissed but shall instead be allowed to continueuntil continueuntil entry of final judgment A favorable judgment obtained by the plaintiff therein plaintiff therein shall be enforced in the manner especially provided in these Rules for prosecuting claimsagainst claimsagainst the estate of a deceasedperson. deceased person.
WON a creditor can sue the surviving spouse of a decedent in an ordinary proceeding for the collection of a sum of money chargeable against the conjugal partnership. – NO. Proper remedy would be to file a claim in the settlement of the decedent’s estate or if none has been commenced, commenced, he can file a petition either for the issuance of letters of administration administration or for the allowance of will, depending on whether its testate/intestate. No shortcut by lumping claim against Alipios Alipios w/those against the Manuels. Alipio’s husband husband died before case was instituted. Thus, Rule 3, Sec. 20 of ♥ the 1997 Rules of Civ Proc is not applicable since it only applies to defendants who die during the pendency of the case. ♥ CC Art. 161 (1) provides that the obligation of the Alipios is chargeable against their conjugal partnership since it was contracted by the spouses for the benefit of the conjugal partnership. When petitioner’s spouse died, their CP was dissolved & debts chargeable against it are to be paid in t he settlement of estate proceedings in accordance w/Rule 73, Sec. 2 w/c provides that the community property will be inventoried, administered, & liquidated and debts thereof paid, in the testate or intestate proceedings of the deceased spouse. Calma vs.Tanedo: No complaint for collection of indebtedness chargeable ♥ to the CP can be brought against the surviving spouse. Claim must be made in the proceedings for the liquidation & settlement of the CP. Surviving spouse’s spouse’s powers of admin ceases & is passed on to courtappointed administrator. administrator. Affirmed in Ventura vs. Militante where Court held that lack of liquidation proceedings does not mean that the CP continues. Creditor may apply for letters of admin in his capacity as a principal creditor. ♥ Cases invoked by CA are not applicable, being based on different set of facts. In Climaco, claim was not against the CP & it did not survive the death of the defendant but not as to the remaining defendant. Imperial, on the other hand, involved spouses who were solidarily liable, thus, surviving spouse could be independently sued in an ordinary action for the enforcement of the entire obligation. ♥ Note that for marriages governed by CPG, obligations entered into by sps are chargeable vs their CP & partnership is primarily bound for the repayments. They’ll be impleaded as representatives of the CP and concept of joint/solidary liability does not apply. At best, it will not be solidary but joint. 2. WON trial trial court court properly properly ordered ordered Manuels Manuels & petition petitioner er to pay the balance w/o specifying whether it should be paid jointly or solidarily. – NO. It should have specified the debtors’ liability. ♥ CC Art. 1207: Concurrence of 2 or more creditors or 2 or more debtors in one & the same obligation does not imply a solidary liability. liability. Solidary liability only arises when the obligation expressly so states or when the law or nature of the obligation requires solidarity. solidarity. Otherwise, it’s presumed to be joint, w/the debt divided into as many equal shares as there are debtors, each debt distinct from one another.
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Should lessees/sublessees lessees/sublessees refuse to vacate leased property after expiration of the leased period despite due demands, they can be held solidarily liable to pay for the use of the property being joint tortfeasors. However, there’s’ no allegation that sublessees refused to vacate the fishpond after the expiration of the term. Petitioner does not contend that nature of the lease w/more t han 2 sublessees result into a solidary liability. Rather, contract provides that rent will be paid to the sub-lessor by the sub-lessees, clearly indicating that liability is merely joint. Since obligation of both couples is chargeable against their respective CPs, balance of P50,600.00 should be divided into 2 so that each couple is liable to pay P25,300.00
Holding: Petition is granted. 1. Manuels Manuels ordered ordered to pay pay P25,300.00 P25,300.00 + atty’s atty’s fees of of P10k and and costs of suit. suit. 2. Complaint Complaint against ipio dismissed dismissed w/o w/o prejudice to filing of claim by Jaring in proceedings for the settlement of deceased’s estate for the collection of the share of the Alipio sps amounting to P25,300.00
MAKATI DEV’T CORP. vs. EMPIRE INSURANCE CO. [1967] Makati Devt Corp (MDC) sold to Rodolfo P. Andal a lot in the Urdaneta Village for P55,615 w/ a "special condition" contained in the deed of sale providin providing g that: "[T]he "[T]he VENDEE VENDEE/S /S shall shall commenc commence e the constructi construction on and complete at least 50% of his/her/their/ its residence on the property within two (2) years from March 31, 1959 to the satisfaction of the VENDOR and, in the event of his/he his/her/t r/thei heir/i r/its ts failur failure e to do so, the bond bond which which the VENDEE/S has delivered to the VENDOR in the sum of P11,123.00 and evidenced by a cash bond receipt dated April 10, 1959 will be forfeited in favor of the VENDOR by the mere fact of failure of the VENDEE/S to comply with this special condition." Andal gave a surety bond wherein he, as principal, & the Empire Insurance Co. (EIC) as surety, jointly & severally, undertook to pay the MDC P12K in case Andal failed to comply w/ his obligation. Andal instead he sold the lot to Juan Carlos. As neither Andal nor Carlos built a house on the lot w/in the stipulated period, the MDC timely sent a notice of claim to the EIC advising it of Andal's failure to comply w/ his undertaking. Demand for the payment of P12K was refused, whereupon the MDC filed a complaint in CFI against EIC to recover on the bond in the full amount, plus attorney's fees. EIC filed its answer w/ a 3rd-party complaint against Andal, asking that the complaint be dismissed or, in the event of a judgment in MDC’s favor, that judgment be rendered ordering Andal to pay the EIC whatever amount it may be ordered to pay the MDC, plus interest at 12%, from the date of the filing of the complaint until said amount was fully reimbursed, & attorney's fees.
Andal Andal admitt admitted ed execut execution ion of the bond bond but allege alleged d that that the "speci "special al condition" in the deed of sale was contrary to law, morals & public policy. He averred that, at any rate, Carlos had started construction of a house on the lot. CFI sentenced EIC to pay MDC P1,500, w/ interest at 12% from the time of the filing filing of the complai complaint nt until until the amount amount was was fully fully paid, paid, plus plus pay attorney's fees (P500), & the proportionate part of the costs. And in case the judgment was paid by EIC, Andal should pay EIC P1,500 w/ interest at 12% from the time of the filing of the complaint to the time of payment plus attorney's fees (P500) & proportionate part of the costs. MDC appealed directly to SC. TC explained that it reduced Andal's liability from P12K to P1.5K because while no building has actually been constructed before the target date, it is also a fact that even before that date the entire area was already fenced w/ a stone wall & building materials materials were also stocked in the premises w/c are clear clear indicia indicia of the owner's owner's desire desire to construct construct his house w/ the least possible delay. In fact, Carlos had finished more than 50% of his house barely a month after the expiration of the stipulated period. But appellant argues that Andal became liable for the full amount of his bond upon his failure to build a house w/in the 2-year period & that TC had no authority to reduce Andal's liability liability on the basis of Carlos' construction of a house a month after the stipulated period as there was no privity of contract between Carlos & MDC
WON TC may reduce Andal’s liability from P12K to P1.5K YES. The so-called "special condition" in the deed of sale is in reality an obligation. It was to secure the performance of this obligation that a penal clause was inserted. While it is true that in obligations with a penal sanction the penalty takes the place of "damages and the payment of interest in case of non-compliance" (Art. 1226, CC) & that the obligee is entitled to recover upon the breach of the obligation w/o the need of proving damages, it is nonetheless true that in certain certain instances instances a mitigatio mitigation n of the obligor's liability liability is allowed allowed (Art. 1229, CC) The TC found that Carlos had finished more than 50% of his house barely a month after the expiration of the stipulated period. There was therefore a partial performance of the obligation within the meaning and intent of article 1229. General Ins. & Surety Corp. vs. Rep. can’t be invoked since in that case there was no performance at all of any part of the obligation to secure the payment of salaries to teachers. Indeed, it has been held that where there has been partial or irregular compliance w/ the provisions in a contract for special indemnification in the event of failure to comply w/ its terms, courts will rigidly apply the doctrine of strict construction against the enforcement in its entirety of the indemnification, where it is clear from the contract that the amount or character of t he indemnity is fixed w/o regard to the probable damages w/c might be anticipated as a result of a breach of the terms of the contract, contract, or, in other words, words, where the indemnity indemnity provided provided for is
essent essentia ially lly a mere mere penalt penalty y having having for its object object the enfor enforcem cement ent of compliance w/ the contract. The penal clause in this case was inserted to compel performance of the so-called "special condition" & thus encourage home building among lot owners in the Urdaneta Village. Still it is insisted that Carlos' construction of a house on the lot sold cannot be considered a partial performance of Andal's obligation because Carlos bears no contractual relation to the MDC. In the case Insular Gov't. vs. Amechazurra, Amechazurra, a similar claim was made by a party & rejected by this Court. The The stipul stipulati ation on in the instan instantt case case to comme commence nce the constr construct uctio ion n & complete at least 50% of the vendee's house w/in 2 yrs can’t be construed as imposing imposing a strictly strictly personal obligatio obligation n on Andal. To To adopt adopt such a construction would be to limit Andal's Andal's right to dispose of the lot.
Holding: Decision appealed from is affirmed, at appellant's cost.
ANTONIO TAN vs. CA [2001]
