REPUBLIC OF THE PHILIPPINES POLYTECHNIC POLYTECHNIC UNIVERSITY OF THE PHILIPPINES COLLEGE OF LAW
OBLIGATIONS AND CONTRACT DOCTRINES AND CASE DIGEST
Alonzo, Eymarie Julia A. Lantin, John Lester C. a!a"uan, #ar$ Ir%in JD &'(
Atty. Reynal"o )lores
Obligations and Contrats! "otrin#s and Cas# "ig#sts
DOCTRINES
Pag# $ %
Obligations and Contrats! "otrin#s and Cas# "ig#sts
I. OBLIGATIONS &. DE)INITION * ART. &&+ -. RE/ISITES RE/ISITES O) O) A 0ALID OBLIGA OBLIGATION TION a1 RE/IS RE/ISITE ITES S O) RES REST TATION TION (. SO/RCES O) OBLIGATIONS *ART. && &&+2 a1 LA3 i. ARTS. &&+4, &&+4, 554, ( AND -6&5 O) T7E CI0IL CODE8 CODE8 ART ART. &99 O) )A#IL )A#IL: : CODE Cases! ELA:O 0. LA/RON &G'R No' L()*+,- %. P/il )01- %. 2an3ar4 %,*,5
Torres, J.: According According to the Article Article 1089 of the Spanish Civil Code, and currently currently Article Article 11!, 11!, "#ligations "#ligations arise fro$: %a&, %a&, Contracts, 'uasi(contracts, 'uasi(contracts, and )llicit acts and o$issions or #y those in &hich any *ind of fault or negligence occurs+elicts and 'uasi(delicts-. And that "#ligations arising fro$ fro$ la& are not presu$ed. presu$ed. Those Those epressly epressly deter$ined deter$ined #y the code or special la&s, la&s, etc., are the only de$anda#le ones. +Article 118-. The rendering of $edical assistance in case of illness is co$prised a$ong the $utual o#ligations to &hich the spouses are #ound #y &ay of $utual support. Spouses are $utually #ound to support each other, and &hen either of the$ #y reason of illness should #e in need of $edical $edical assistance, assistance, the other is under the unavoida#le unavoida#le o#ligation o#ligation to furnish the necessary services of a physician in order that health $ay #e restored, and he or she $ay #e freed freed fro$ fro$ the sic*ness #y &hich life is /eopardied /eopardied the party #ound to furnish such support is therefore lia#le for all epenses, including the fees of the $edical epert for his professional services. services. DELA CR/; 0. NORT7ERN T7EATRICAL ENTERRISE INC. &GR' No' 6*+,- 0* O'G' )..0). .0- 1% A3g3st %,0)5
2onte$ayor 2onte$ayor, J.: Although it $ay #e said that it &ould #e in the interest of the e$ployer to give legal help to and defend its e$ployee in order to sho& that the latter &as not guilty of any cri$e either deli#erately deli#erately or through through negligence, #ecause should the e$ployee #e found cri$inally lia#le and he &as found insolvent, insolvent, the e$ployer &ill #e su#sidiarily lia#le. 3o&ever, 3o&ever, the court is una#le to Pag# $ .
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say and hold that the giving of legal assistance to its e$ployees is a legal o#ligation, as it does not count &ith the sanction of $an($ade la&s. <1 CONT CONTR RACTS ACTS i. ARTS ARTS.. &&+9 &&+9 AND AND &(6+ &(6+ =1 /AS /ASI' I'CO CONT NTRA RACT CTS S i. DE)INITION * ART. -&5ii. NEGOTI NEGOTIOR/ OR/# # GESTIO GESTIO ' ARTS. ARTS. -&55TO -&55TO -&+( -&+( iii. iii. SOL/TIO SOL/TIO INDEBIT INDEBITII * ART ARTS. S. -&+5 -&+5 TO TO -&( i%. i%. OT7ER /ASI'CONTR /ASI'CONTRACTS ACTS * ARTS. ARTS. -&5 TO -&2+ -&2+ %. SOL/TIO INDEBITI INDEBITI 0S. 0S. NAT/RAL NAT/RAL OBLIGA OBLIGATIONS >ARTS. >ARTS. &5-( TO &5(61 "1 DELICTS i. ART ART. &66 O) T7E RE0IS RE0ISED ED ENAL ENAL CODE CODE ii. ART. -& -&22 e1 /AS /ASI' I'DE DELI LICT CT i. ARTS. -&2 &2 ii. 0ICARIO/S 0ICARIO/S LIABILIT: LIABILIT: ' ART ART.. -&46 O) T7E CI0IL CI0IL CODE CODE AND AND ARTS. ARTS. -&4, -&9 AND -( O) T7E )A#IL: CODE iii. ART. (( Cases? AD/A 0. ROBLES &GR &GR No' L()*)+ L()*)+77- 77 SCRA SCRA )+0- ., A3g3st A3g3st %,605 %,605 Castro, J.:
Civil lia#ility coeists &ith cri$inal responsi#ility. )n negligence cases the offended party +or his heirs- has the option #et&een an action for enforce$ent of civil lia#ility #ased on culpa cri$inal under article 100 of the 4evised 5enal Code and an action for recovery of da$ages #ased on culpa a6uiliana under article 71!! of the Civil Code. The action for enforce$ent of civil lia#ility #ased on culpa cri$inal section 1 of 4ule 111 of the 4ules of Court dee$s si$ultaneously insti institut tuted ed &ith &ith the the cri$in cri$inal al actio action, n, unles unlesss epr epressly essly &aiv &aived ed or reserv eserved ed for a separa separate te application #y the offended party. Article 71!! of the Civil Code, ho&ever, precludes recovery of da$ages t&ice for the sa$e negligent act or o$ission. )n the present case, the Court finds it i$$aterial that the 5aduas chose, in the first instance, an action for recovery of da$ages #ased on culpa a6uiliana &hich action proved ineffectual. The Court also ta*es note of the a#sence of any inconsistency #et&een the afore$entioned action prior availed of #y the 5aduas 5aduas and their su#se6uent su#se6uent application application for enforce$ent enforce$ent of civil lia#ility arising fro$ the offense co$$itted #y 5unalan and conse6uently, for eaction of 4o#les Pag# $ 1
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su#sidiary responsi#ility. Allo&ance of the latter application involves no violation of the proscription against dou#le recovery of da$ages for the sa$e negligent act or o$ission. )t &as stated that the &rit of eecution for the /udg$ent on the civil case &as left unsatisfied. SINGSON 0. BI &GR' No' L(.)+16- .1 SCRA %%%6- .6 23n# %,7+5
Concepcion, C.J.: The court repeatedly held that the eistence of a contract #et&een the parties does not #ar the co$$ission of a tort #y the one against the order and the conse6uent recovery thereof. Stating the case of Air rance v. Carrascoso, the tort on the air carriers part, for, although the relation #et&een the carrier and passenger is contractual #oth in origin and nature; the act #rea*s the contract $ay also #e a tort. #ALIOL %. TAN &GR' No' L(.661*- 00 SCRA %%%6- .% 2an3ar4 %,6)5
4egalado, J.: The diligence of a good father of a fa$ily re6uired #y la& in a parent and child relationship consists, to a large etent of the instruction and supervision of the child. Su#sidiary lia#ility of parents for da$ages co$$itted #y their $inor children i$posed #y Article 7180 of the >e& Civil Code covers o#ligations arising fro$ #oth 6uasi(delictsand cri$inal offenses. )n the present case, the petitioners are gravely re$iss in their duties in not diligently supervising the activities of their son, despite his i$$aturity and $inority, so $uch that it &as only at the ti$e of ?endells death that they allegedly discovered that he &as a CA>@ agent and that his fathers gun &as $issing fro$ the safety deposit #o. Pag# $ )
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#ADEJA %. CARO &GR No' L(0%%+1- .%) SCRA .**.- .% "##9b#r %,+15
A#ad Santos, J '! According to the Supre$e Court, the rule that applies in this case is the Section 7, 4ule 111 of the 4ules of Court for )ndependent Civil Action that in civil action entirely separate and distinct fro$ the cri$inal actions $ay #e #rought #y the in/ured party during the pendency of the cri$inal case in relation to Article BB of the Civil Code that )n cases of defa$ation, fraud, and physical in/uries a civil action for da$ages entirely separate fro$ the cri$inal action $ay #e #rought #y the in/ured partD and that Such civil action shall proceed independently of the cri$inal prosecution;D )t also noted that civil action for da$ages &hich it allo&s to #e instituted is e(delicto. Another is that the ter$ 5hysical )n/uries in Article BB of the Civil code is to #e ta*en in the generic sense as it includes consu$$ated, frustrated, and atte$pted ho$icide. Stating the case of Carandang v. Santiago, it $ust #e understood to $ean #odily in/ury and not the cri$e of 5hysical )n/uries. )n the light of the foregoing circu$stances of the case, it is apparent that the civil action against private respondent $ay proceed independently fro$ the cri$inal case. #ARCIA %. CA &GR' No' L(1)0.,- %.* SCRA %,1- .6 2an3ar4 %,+15
4elova, J.: The Section 7 of the 4ule 111 $erely refers to the institution of an independent civil action &ithout &aiting for the filing or ter$ination of the cri$inal action and re6uires only preponderance of evidence to prosper and not proof of #eyond reasona#le dou#t as re6uired for conviction in cri$inal cases. 3o&ever, an ac6uittal #ased on the finding that the facts upon &hich civil lia#ility did not eist, #ars the filing of an independent civil action if it is #ased on the cri$e. Also, Article BB&hich prescri#es that in cases of defa$ation, fraud and physical in/uries the offended parties $ay #ring a civil action separate and distinct fro$ the cri$inal action. Stating Tan v. Standard Eacuu$ "il Co$pany: Fthe ac6uittal of the accused fro$ the cri$inal charge &ill not necessarily etinguish the civil lia#ility unless the court declares in the /udg$ent that the fact fro$ &hich the civil lia#ility $ight arise did not eist. ?here the court states that the evidence thro&s no light on the cause of fire and that it &as an unfortunate accident for &hich the accused cannot #e held responsi#le, this declaration fits &ell into the eception of the rule &hich ee$pts the accused, fro$ civil lia#ility.D Pag# $ 0
Obligations and Contrats! "otrin#s and Cas# "ig#sts
CAS/ARAN %. LARO:A &GR' No' %)01,%- 1++ SCRA .+- .7 A3g3st .**.5
Carpio, J.: @nder Section 1 of the present 4ule 111, the independent civil action in Articles B7, BB, B= and 71!G of the Civil Code is not dee$ed instituted &ith the cri$inal action #ut $ay #e filed separately #y the offended party even &ithout reservation. The co$$ence$ent of the cri$inal action does not suspend the prosecution of the independent civil action under these articles of the Civil Code. Also, the accused can file a civil action for 6uasi(delict for the sa$e act or o$ission he is accused of in the cri$inal case. This is epressly allo&ed in paragraph G, Section 1 of the present 4ule 111 &hich states that the counterclai$ of the accused $ay #e litigated in a separate civil action. This is only fair for t&o reasons. irst, the accused is prohi#ited fro$ setting up any counterclai$ in the civil aspect that is dee$ed instituted in the cri$inal case. The accused is therefore forced to litigate separately his counterclai$ against the offended party. )f the accused does not file a separate civil action for 6uasi(delict, the prescriptive period $ay set in since the period continues to run until the civil action for 6uasi(delict is filed. Second, the accused, &ho is presu$ed innocent, has a right to invo*e Article 71!! of the Civil Code, in the sa$e &ay that the offended party can avail of this re$edy &hich is independent of the cri$inal action. To disallo& the accused fro$ filing a separate civil action for 6uasi(delict, &hile refusing to recognie his counterclai$ in the cri$inal case, is to deny hi$ due process of la&, access to the courts, and e6ual protection of the la&. RA)AEL TR/C@ING CORORATION %. eole &GR' No' %.,*.,- 1.,SCRA 7**- *. A8ril .***5
5ardo, J.: )n negligence cases, the aggrieved party has the choice #et&een +1- an action to enforce civil lia#ility arising fro$ cri$e under Article 100 of the 4evised 5enal Code and +7- a separate action for 6uasi delict under Article 71!G of the Civil Code of the 5hilippines. "nce the choice is $ade, the in/ured party can not avail hi$self of any other re$edy #ecause he $ay not recover da$ages t&ice for the sa$e negligent act or o$ission of the accused. This is the rule against dou#le recovery. @nder the la&, this vicarious lia#ility of the e$ployer is founded on at least t&o specific provisions of la&. The first is epressed in Article 71!G in relation to Article 7180 of the Civil Code, &hich &ould allo& an action predicated on 6uasi(delict to #e instituted #y the in/ured party against the e$ployer for an act or o$ission of the e$ployee and &ould need only a preponderance of evidence to prevail. The lia#ility of the e$ployer for the negligent conduct of Pag# $ 7
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the su#ordinate is direct and pri$ary, su#/ect to the defense of due diligence in the selection and supervision of the e$ployee. The second, epressed in Article 10B of the 4evised 5enal Code, provides that an e$ployer $ay #e held civilly lia#le+su#sidiarily- for a felony co$$itted #y his e$ployee in the discharge of his duty. This lia#ility attaches &hen the e$ployee is convicted of a cri$e done in the perfor$ance of his &or* and is found to #e insolvent that renders hi$ una#le to properly respond to the civil lia#ility ad/udged. Also, pursuant to the provision of 4ule 111, Section 1, paragraph B of the 198 4ules of Cri$inal 5rocedure, &hen private respondents, as co$plainants in the cri$inal action, reserved the right to file the separate civil action, they &aived other availa#le civil actions predicated on the sa$e act or o$ission of the accused(driver. )ERNANDO %. CA &GR' No' ,.*+6- .*+ SCRA 6%)- *+ :a4 %,,.5
2edialdea, J.: >egligence has #een defined as the failure to o#serve for the protection of the ineterst of another person in the degree of care, precaution, and vigilance &hich the circu$stances /ustify de$and, &here#y such other person suffers in/ury. A person &ho #y his o$ission causes da$age to another, there #eing negligence is o#liged to pay for the da$age done. Stating the case of 5icart v. S$ith, the court stated that the test #y &hich the eistence of negligence in a particular case $ay #e stated as: id the defendant in doing the alleged negligent act use that reasona#le care and caution &hich an ordinary prudent person &ould have used in the sa$e situationH )f not, then he is guilty of negligence. To #e entitled for da$ages for an in/ury resulting fro$ negligence of another, a clai$ant $ust esta#lish the relation #et&een the o$ission and the da$age. 3e $ust prove under Article 71!9 of the Civil Code, that the defendants negligence &as the i$$ediate and proi$ate cause of his in/ury. 5roi$ate cause has #een defined as that cause, &hich, in natural and continuous se6uence un#ro*en #y any efficient intervening cause, produces the in/ury, and &ithout &hich the result &ould not have occurred. ?here the resulting in/ury &as the product of the negligence of #oth parties, there eist a difficulty to discern &hich acts shall #e considered the proi$ate cause of the accident. The court, stating the case of Taylor v. 2anila Ilectric 4ailroad and %ight Co. provided a guideline for a /udicious assess$ent of the situation: istinction $ust #e $ade #et&een the accident and the in/ury #et&een the event itself, &ithout &hich there could have #een no accident, and those acts of the victi$ not entering into it, independent of it #ut contri#uting to his o&n proper hurt.D ##TC %. CA &G'R' No' %*))*+- ..1 SCRA 0.%- .% 23n# %,,15 Pag# $ 6
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4egalado, J.: ue diligence in the selection and supervision of its e$ployees is $ore often honored in the #reach than in the o#servance. According to Article 71!G and 71!!, in relation to Article 7180, of the Civil Code provisions on 6uasi(delicts as all the ele$ents thereof are present, to &it: +1- da$ages suffered #y the plaintiff, +7- fault or negligence of the defendant or so$e other person for &hose act he $ust respond, and +B- the connection of cause and effect #et&een fault or negligence of the defendant and the da$ages incurred #y plaintiff. The pertinent parts of &hich provides that e$ployers shall #e lia#le for da$ages caused #y their e$ployees and household helpers acting &ithin the scope of their assigned tas*s, even though the for$er are not engaged in any #usiness or industry. The responsi#ility treated of in this article shall cease &hen the persons herein $entioned prove that they o#served all the diligence of a good father of a fa$ily to prevent da$age. This arises #y virtue of a presu$ption /uristantu$ of negligence on the part of the persons $ade responsi#le under the article, derived fro$ their failure to eercise due care and vigilance over the acts of su#ordinates to prevent the$ fro$ causing da$age. >egligence is i$puted to the$ #y la&, unless they prove the contrary. )t should #e #orne in $ind that the legal o#ligation of e$ployers to o#serve due diligence in the selection and supervision of e$ployees is not to #e considered as an e$pty play of &ords or a $ere for$alis$, as appears to #e the fashion of the ti$es, since the non(o#servance thereof actually #eco$es the #asis of their vicarious lia#ility under Article 7180. ue diligence in the supervision of e$ployees includes for$ulation of rules and regulations for the guidance of e$ployees and the issuance of proper instructions intended for the protection of the pu#lic persons &ith &ho$ the e$ployer has relations through his or its e$ployees. )t also includes disciplinary $easures in cases of #reach of the e$ployee to the regulations.
EOLE 0. SENDA:DIEGO &GR' No' L(11.0)- +%SCRA %.*- .* 2an3ar4 %,6+5
A6uino, J.: The civil action for the civil lia#ility is dee$ed i$pliedly instituted &ith the cri$inal action in the a#sence of epress &aiver or its reservation in a separate action. ?hen the action is for the recovery of $oney and the defendant dies #efore final /udg$ent in the Court of irst )nstance, it Pag# $ +
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shall #e dis$issed to #e prosecuted in the $anner especially provided in the 4ule of Court. The i$plication is that if the defendant dies after a $oney /udg$ent had #een rendered against hi$ #y the Court of irst )nstance, the action survives hi$. )n so$e instances an accounta#le pu#lic officer $ay still #e civilly lia#le for the funds i$properly dis#ursed although he has no cri$inal lia#ility. EOLE %. BA:OTAS &G'R' No' %*.**6- .17 SCRA .00- *. S#8t#9b#r %,,)5
4o$ero, J.: )n the Sendaydiego case, although Article B0 &as not applied in the final deter$ination of the civil lia#ility there &as a reopening of the cri$inal case to deter$ine his civil lia#ility. The court reiterated that upon death of the accused pending the appeal of his conviction the cri$inal action is etinguished in as $uch as there is no longer a defendant to stand as the accused the civil action instituted therein for recovery of civil lia#ility e delicto is ipso facto etinguished grounded as it is on the cri$inal. Also the court e$phasied that the clai$ for civil lia#ility survives not&ithstanding the death of accused if the sa$e $ay also #e predicated in a source of o#ligation other than delict. And if the civil lia#ility survives in accordance &ith the afore$entioned, an action for recovery therefor $ay #e pursued #ut only #y &ay of filing a separate civil action. 0DA. DE A#AN %. SENERIS &G'R' No' L(1671.- %%0 SCRA 6*,- 1* 23l4 %,+.5
uerrero, J.: According the Section 1, 4ule 111 of the 4ules of Court &hen a cri$inal action is instituted the civil action for recovery of civil lia#ility arising fro$ the offense charged is i$pliedly instituted &ith the cri$inal action, unless the offended party epressly &aives the civil action or reserves his right to institute it separately.D )t $eans that the civil action $ay #e tried and prosecuted, &ith all the ancillary processes provided #y la&. 0ILLEGAS %. CA &G'R' No' +.07.- .6% SCRA %)+- %% A8ril %,,65
4o$ero, J.: As the court held in the case of 5eople v. Kayotas: the survival of the civil lia#ility depends on &hether the sa$e can #e predicated on sources of o#ligations other than delict; The clai$ for Pag# $ ,
Obligations and Contrats! "otrin#s and Cas# "ig#sts
civil lia#ility is also etinguished together &ith the cri$inal action if it &ere solely #ased thereon, i.e civil lia#ility e delicto. The clai$ for civil lia#ility survives not&ithstanding the death of accused if the sa$e $ay also #e predicated in a source of o#ligation other than delict. And if the civil lia#ility survives in accordance &ith the afore$entioned, an action for recovery therefor $ay #e pursued #ut only #y &ay of filing a separate civil action. 7EIRS O) T7E LATE TEODORO G/ARING, JR. %. CA &G'R' No' %*+1,0- .7, SCRA .+1- *6 :ar/ %,,65
2endoa, J.: The present action &as instituted pursuant to Art. 71!G of the Civil Code, &hich provides: Art. 71!G. ?hoever #y act or o$ission causes da$age to another, there #eing fault or negligence, is o#liged to pay for the da$age done. Such fault or negligence, if there is no pre(eisting contractual relation #et&een the parties, is called a 6uasi(delict and is governed #y the provisions of this Chapter. )t is no& settled that the ac6uittal of the accused, even if #ased on a finding that he is not guilty, does not carry &ith it the etinction of the civil lia#ility #ased on 6uasi delict. Iven if da$ages are sought on the #asis of cri$e and not 6uasi delict, the ac6uittal of the #us driver &ill not #ar recovery of da$ages if the ac6uittal &as #ased not on a finding that he &as not guilty #ut only on reasona#le dou#t. )n the present case, the ac6uittal of the #us driver &as #ecause of the 4TC entertaining reasona#le dou#t to his guilt. The appellate court erred in s*ipping the revie& of the evidence in this case and #ased its decision on the findings of the trial court in the cri$inal case. Ky doing this, the appellate court disregarded the fact that this case had #een instituted independently of the cri$inal case and that petitioners herein too* no part in the cri$inal prosecution. AG/ILAR, Sr. %. CO##ERCIAL SA0INGS BAN@ &G'R' No' %.+6*0- 17 SCRA 1,0- ., 23n# .**%5
'uisu$#ing, J.: The Supre$e Court stated the past ruling fro$ the case of KA inance Corporation v. CA that the registered o&ner of any vehicle, even if not for pu#lic service, is pri$arily responsi#le to third persons for any da$ages it caused. Also, the court held in the case of Ireo v. Jepte that the rationale for holding the registered o&ner of a vehicle to #e directly lia#le is that registration is re6uired not to $a*e said registration the operative act #y &hich o&nership in vehicle is transferred #ut to per$it the use and operation of the vehicle upon any pu#lic high&ay. The Pag# $ %*
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$ain ai$ of the $otor vehicle registration is to identify the o&ner in case any da$age or in/ury is caused #y the vehicle on pu#lic high&ays, responsi#ility therefor can #e fied on a definite individual, the registered o&ner. 5. CO#LIANCE O) RESTATIONS a1 GENERALL: * ART. &9 <1 SECI)ICALL: i. TO GI0E >REAL OBLIGATION1 * ARTS. &&( TO && ii. TO DO >ERSONAL OBLIGATION1 * ART. &&2 iii. NOT TO DO >ERSONAL OBLIGATION1 * ART. &&4 +. BREAC7 O) OBLIGATIONS a1 CA/SES? ART. &&26 i. )RA/D &. ART. &&2& 0S. ART. &((4 -. DOLO INCIDENTE 0S. DOLO CA/SANTE ii. NEGLIGENCE &. ARTS. &&2- AND &&2( -. C/LA CONTRACT/AL 0S. C/LA A/ILIANA >OR C/LA E'CONTRACT/1 (. )ORT/ITO/S E0ENT * ART. &&25 a1 RE/ISITES O) )ORT/ITO/S E0ENT
CASES? LASA# %. S#IT7 &G'R' No' %,),0- )0 P/il 706- *. F#br3ar4 %,.)5
"strand, J.: The court agrees &ith the ruling of the lo&er court &hen it found that the defendants lia#ility is contractual. Ky entering in the contract of carriage, he #ound hi$self to deliver the plaintiffs safely and securely to their destination and having failed to do so, he is lia#le for da$ages, ecept in ti$es &hen such #reach occurred in accordance &ith the Article 110 +no& Article 11!=- &hich states: Pag# $ %%
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>o one shall #e lia#le for events &hich could not #e foreseen or &hich, even if foreseen, &ere inevita#le, &ith the eception of the cases in &hich the la& epressly provides other&ise and those in &hich the o#ligation itself i$poses such lia#ility. The Supre$e Court stated that the epression Fevents &hich cannot #e foreseen and &hich having #een foreseen, are inevita#leF is synony$ous &ith the ter$ Ffortuitous eventF +casofortuito- of &hich so$e etraordinary circu$stance independent of the &ill of the o#ligor, or of his e$ployees, is one of the essential ele$ents. SER0ANDO %. 7ILIINE STEA# NA0IGATION CO. &G'R No' L(17)+%- %%6 SCRA +1.- .1 Otob#r %,+.5
Iscolin, J.: The court agrees &ith the validity of the provision in the #ill of lading, as it is not contrary to la&, $orals or pu#lic policy. Though the plaintiffs contend that they did not sign it, it &as held that they &ere #ound #y the provisions thereof, as previously held in the case of "ngLui v. CA. Also, the 6uestioned provision is a $ere iteration of the #asic principle of la& in Article 11!= of the Civil Code &hich pertains to the ee$ption of the o#ligor fro$ lia#ility in cases of loss due to fortuitous events. 'uoting the Inciclopedia Juridicada Ispanola, the court enu$erated the characteristics of a fortuitous event: +1- the cause of the unforeseen and unepected occurrence, or of the failure of the de#tor to co$ply &ith his o#ligation, $ust #e independent of the hu$an &ill +7- it $ust #e i$possi#le to foresee the event &hich constitutes the casofortuito, or if it can #e foreseen, it $ust #e i$possi#le to avoid +B- the occurrence $ust #e such as to render it i$possi#le for the de#tor to fulfill his o#ligation in a nor$al $anner and +=- the o#ligor $ust #e free fro$ any participation in the aggravation of the in/ury resulting to the creditor. A/STRIA %. CA &G'R' No' L(.,7)*- 1, SCRA 0.6- %* 23n# %,6%5
4eyes, J.K.%., J.: The Article 11!= of the Civil Code provides for the etinction of lia#ility of the de#tors or o#ligors in cases of fortuitous events. Casoortuito&ould ee$pt a person fro$ responsi#ility of the loss of an o#/ect of an o#ligation if all of its characteristics are present: Pag# $ %.
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+1+7+B-
the event $ust #e independent of the hu$an &ill +or rather, of the de#tors or o#ligors- the occurrence $ust render it i$possi#le for the de#tor to fulfill the o#ligation in a nor$al $anner and that the o#ligor $ust #e free of participation in or aggravation of the in/ury to the creditor.
To #e a#le to #e ee$pted in accordance &ith the a#ove provision, the court held that it is not necessary that the persons responsi#le for the event to #e found or punished. )t is sufficient to esta#lish that the enforcea#le event happened did ta*e place &ithout any concurrent fault on the de#tors part and can #e done &ith preponderance of evidence. 3o&ever, to co$pletely free the de#tor fro$ the lia#ility #y fortuitous event, such de#tor $ust #e free fro$ any contri#utory fault or negligence. O0ERSEAS BAN@ O) #ANILA %. CA &G'R' No' L(),101- %*0 SCRA ),- %% 23n# %,+%5
Karredo, J.: The Court ta*es /udicial notice that &hat ena#les a #an* to pay stipulated interest on $oney deposited &ith it is that through the other aspects of its operation it is a#le to generate funds to cover the pay$ent of such interest. @nless a #an* can lend $oney, engage in international transactions, ac6uire foreclosed $ortgaged properties or their proceeds and generally engage in other #an*ing and financing activities fro$ &hich it can derive inco$e, it is inconceiva#le ho& it can carry on as a depository o#ligated to pay stipulated interest. O0ERSEAS BAN@ O) #ANILA %. CA &G'R' No' L(110+.- %%1 SCRA 66+- 1* :ar/ %,+.5
Iscolin, J.: The court reiterated the doctrine founded in the case of "verseas Kan* of 2anila v. CA. The Court ta*es notice that &hat ena#les a #an* to pay stipulated interest on $oney deposited &ith it is that through the other aspects of its operation it is a#le to generate funds to cover the pay$ent of such interest. @nless a #an* can lend $oney, engage in international transactions, ac6uire foreclosed $ortgaged properties or their proceeds and generally engage in other #an*ing and financing activities fro$ &hich it can derive inco$e, it is inconceiva#le ho& it can carry on as a depository o#ligated to pay stipulated interest. 0AS/E; %. CA Pag# $ %1
Obligations and Contrats! "otrin#s and Cas# "ig#sts
&G'R' No' L().,.7- %1 S#8t#9b#r %,+05
2elencio(3errera, J.: The court agrees &ith the decision of the trial court. To avail of the defense of fortuitous events, it $ust #e independent of hu$an &ill, such occurrence $ust render it i$possi#le for the o#ligor to fulfill the o#ligation in the nor$al $anner, and that the o#ligor $ust #e free of participation in, or aggravation of, the in/ury to the creditor. )t $ust #e i$possi#le to foresee, or if it can #e foreseen, $ust have #een i$possi#le to avoid. S3EET LINES, INC. %. CA &G'R' No' L()71)*- %.% SCRA 67,- .+ A8ril %,+15
2elencio(3errera, J.: Article 7770 states that $oral da$ages are /ustly due in #reaches of contract &here the defendant acted fraudulently or in #ad faith. The court defined #ad faith as a #reach of a *no&n duty through so$e $otive or interest or ill&ill. Self(enrich$ent or fraternal interest, and not personal ill&ill $ay have #een the $otive, #ut it is $alice nevertheless. The court held that there is #ad faith &hen defendants(appellants did not give notice to plaintiffs( appellees as to the change of schedule of the vessel, &hile *no&ing fully &ell that it &ould ta*e no less than fifteen hours to effect the repairs of the da$aged engine, defendants( appellants instead $ade announce$ent of assurance that the vessel &ould leave &ithin a short period of ti$e, and &hen plaintiffs(appellees &anted to leave the port and gave up the trip, defendants(appellants e$ployees &ould co$e and say, &e are leaving, already and &hen defendants(appellants did not offer to refund plaintiffs(appellees tic*ets nor provide the$ &ith transportation fro$ Taclo#an City to Cat#alogan. J/NTILLA %. )ONTANAR &G'R' No' L()0716- %17 SCRA 7.0- 1% :a4 %,+05
utierre, J.: Citing the case of %asa$ v. S$ith, the court laid do&n the essential characteristics of fortuitous event, such as it $ust #e independent of hu$an &ill, such occurrence $ust render it i$possi#le for the o#ligor to fulfill the o#ligation in the nor$al $anner, the o#ligor $ust #e free of participation in, or aggravation of, the in/ury to the creditor and it $ust also #e i$possi#le to foresee or if it can #e foreseen, it $ust #e inevita#le. 0ICTORIAS LANTERS ASSOCIATION %. 0ICTORIAS #ILLING CO., INC. Pag# $ %)
Obligations and Contrats! "otrin#s and Cas# "ig#sts
&G'R' No' L(77)+- ,6 P/il 1%+- .0 23l4 %,005
5adilla, J.: The court stated ortuitous Ivent relieves the o#ligor fro$ fulfilling the contractual o#ligation under Article 11!= of the Civil Code. The stipulation regarding the fortuitous events in the contract and its suspension, should such events happen, only relieves the parties fro$ the fulfil$ent of the respective o#ligations during that ti$e. )t doesnt stop the period of the contract. iii.
i%.
DELA: &. ART. &&9 -. @INDS O) DELA: a1 #ORA SOL0ENDI i. E RE ii. E ERSONA <1 #ORA ACCIIENDI i. RE/ISITES =1 CO#ENSATIO #ORAE CONTRA0ENTION O) T7E TENOR
CASES? ARRIETA %. NLRC &G'R' No' L(%07)0- %* SCRA 6,- 1% 2an3ar4 %,7)5
4egala, J.: According to Article 11!0 of the Civil Code, Those &ho in the perfor$ance of their o#ligation are guilty of fraud, negligence, or delay, and those &ho in any $anner contravene the tenor thereof, are lia#le in da$ages.D )n the said provision it stated that in general, every de#tor &ho fails to fulfill his o#ligation is lia#le for da$ages, not only those &ho are guilty of fraud, negligence or delay. The phrase any $anner contravene the tenorD includes any illicit acts &hich i$pairs the strict and faithful fulfill$ent of the o#ligation or every *ind of defective perfor$ance. The lia#ility of the appellant started not alone in the failure or ina#ility to satisfy the conditions provided #y the 5>K, #ut fro$ its &illful and deli#erate assu$ption of contractual o#ligations Pag# $ %0
Obligations and Contrats! "otrin#s and Cas# "ig#sts
even as it &as a&are of the financial incapacity to underta*e such. )t is evident that >A4)C &as *no&ledgea#le of this financial position as it has stated in the trans$ittal letter that they do not have sufficient deposit &ith 5>K to cover the re6uired a$ount. SS.G/ANIO %. #A@ATI S7ANGRI'LA 7OTEL an" RESORT, INC. &G'R' No'%,*7*%- *6 F#br3ar4 .*%%5
Carpio(2orales, J.: The court held that since the co$plaint rose fro$ a contract, the doctrine of proi$ate cause cannot #e applied. The doctrine of proi$ate cause is only applica#le on actions for 6uasi( delicts and not on actions involving #reach of contract. And thus the Article 11!0 is the applica#le rule in this case. Article 11!0 states Those &ho in the perfor$ance of their o#ligation are guilty of fraud, negligence, or delay, and those &ho in any $anner contravene the tenor thereof, are lia#le in da$ages.D Kreach of contract is defined as the failure &ithout legal reason to co$ply &ith the ter$s of a contract. iven the respondents vast eperience, it is safe to presu$e that it is not the first ti$e it encounters events #oo*ed eceeding the guaranteed cover. The respondents ad$itted the three hotel functions coincided &ith the petitioners event. The delay in service $ight have #een avoided or $ini$ied if respondents eercised prescience in scheduling events. The Court also stated that no less than 6uality service should #e delivered especially in events &hich possi#ility of repetition is close to none. . RE#EDIES )OR BREAC7 a1 ETRA'J/DICIAL >NO CO/RT ACTION NEEDED1 ARTS. &+- AND &+9<1 J/DICIAL >CO/RT ACTION NEEDED1 i. RINCIAL RE#EDIES &. ARTS. &&+, &&2, &&4 AND &&9& CASES? CENTRAL BAN@ O) T7E 7ILIINES %. CA &G'R' No' L()06%*- %1,
*
SCRA )7- *1 Otob#r %,+05
2a*asiar, CJ.: )n reciprocal o#ligations, the o#ligation or pro$ise of each party is the consideration for that of the other and &hen one party has perfor$ed or is ready and &illing to perfor$ his part of the contract, the other party &ho has not perfor$ed or is not ready and &illing to perfor$ incurs in Pag# $ %7
Obligations and Contrats! "otrin#s and Cas# "ig#sts
delay as stated in Article 11G9 of the Civil Code.2oreover Article 1191 stated that in reciprocal o#ligations, in cases of the o#ligors should not co$ply &ith &hat is incu$#ent upon hi$, the in/ured party $ay choose #et&een the perfor$ance of the o#ligation or the rescission of the o#ligation. )n the present case, since the )sland Savings Kan* &as in default in not fulfilling the reciprocal o#ligation under the loan agree$ent, Tolentino $ay choose #et&een specific perfor$ance or rescission &ith da$ages in either case. 3o&ever, since the #an* &as for#idden #y the 2onetary Koard to do further #usiness, the court cannot grant the petition of Tolentino for specific perfor$ance. 4escission is the only re$edy left. The court ruled that the rescission should only #e on the part of the a$ount of 5hpGB,000.00 as it is the default of the #an* as the 5hp 1!,000.00 &as already given to Tolentino. Tolentinos eecution of the pro$issory note gave rise to his o#ligation to pay the 5hp1!,000.00 &hen it #eca$e due. A:SON'SI#ON %. ADA#OS &G'R' No' L(1,16+- %1% SCRA )1,- .+ A3g3st %,+)5
2elencio(3errera, J.: The rule &hen the in/ured party can only choose #et&een fulfil$ent and rescission of the o#ligation, and cannot have #oth, applies only to o#ligations &hich its fulfil$ent is possi#le. Article 1191 allo&s the in/ured party to see* rescission even after see*ing for its fulfil$ent provided that the fulfil$ent of the o#ligation is dee$ed i$possi#le. GABO:A %. C/I &G'R' No' L(%,7%)- 1+ SCRA +0- .6 :ar/ %,6%5
4eyes, J.K.%., J.: The argu$ent of the appellants invo*ing Article !1 has not convinced the court. According to the$, Article == to =G of the Civil Code pertaining to industrial accession #y $odification on the principal land, such accession is li$ited to either to #uildings erected on the land of another, or #uildings constructed #y the o&ner of the land &ith $aterials o&ner #y so$eone else. 2oreover, Article == stated has esta#lished the #asic rule of industrial accession and prescri#es: F?hatever is #uilt, planted or so&n on the land of another, and the i$prove$ents or repairs $ade thereon, #elong to the o&ner of the land su#/ect to the provisions of the follo&ing articles.F ?hile Article ==9 stated that: F3e &ho #uilds, plants or so&s in #ad faith on the land of another, loses &hat is #uilt, planted or so&n &ithout right to inde$nity.D There is none in the provision of the civil code &hich particularly epresses the present case: a lando&ner #uilding on their o&n lot &ith their o&n $aterials. Pag# $ %6
Obligations and Contrats! "otrin#s and Cas# "ig#sts
/NI0ERSAL )OOD COR. %. CA &G'R' No' L(.,%00- 11 SCRA %- %1 :a4 %,6*5
Castro, J.: According to the Article 1191 of the Civil Code, The po&er to rescind o#ligations is i$plied in reciprocal ones, in case one of the o#ligors should not co$ply &ith &hat is incu$#ent upon hi$D and that The in/ured party $ay choose #et&een the fulfill$ent and the rescission of the o#ligation, &ith the pay$ent of da$ages in either case. 3e $ay also see* rescission even after he has chosen fulfill$ent, if the latter should #eco$e i$possi#le.D Though rescission of a contract &ill not #e per$itted for a slight or casual #reach and only for such su#stantial and funda$ental #reach as &ould defeat the very o#/ect of the parties in $a*ing the agree$ent. RO#AN %. CA &G'R' No' 66).0- %16 SCRA 071- %, 23n# %,,%5
4egalado, J.: @nder Article !G= of the Civil Code an action for the revocation of a donation $ust #e #rought &ithin four +=- years fro$ the non(co$pliance of the conditions of the donation. Article !B7 of the Civil Code provides that donations inter vivos shall #e governed #y the general provisions on contracts and o#ligations in all that is not deter$ined in Title ))), Koo* ))) on donations. The Title ))) does not have an eplicit provision on the $atter of a donation &ith a resolutory condition and &hich is su#/ect to an epress provision that the sa$e shall #e considered ipso facto revo*ed upon the #reach of said resolutory condition i$posed in the deed therefor. ?hen a deed of donation epressly provides for auto$atic revocation and reversion of the property donated, the rules on contract and the general rules on prescription should apply, and not Article !G= of the Civil Code. 2oreover, the court reiterated the doctrine that a /udicial action is proper only &hen there is a#sence of a special provision granting the po&er of cancellation. The validity of such a stipulation in the deed of donation providing for the auto$atic reversion of the donated property to the donor upon non(co$pliance of the condition &as upheld in the recent case of e %una, et al. vs. A#rigo, et al &here the Supre$e Court held that such stipulation is in the nature of an agree$ent granting a party the right to rescind a contract unilaterally in case of #reach, &ithout need of going to court, and that, upon the happening of the resolutory condition or non(co$pliance &ith the conditions of the contract, the donation is auto$atically revo*ed &ithout need of a /udicial declaration to that effect. SONGC/AN 0. IAC &G'R' No' 60*,7- %,% SCRA .+- ., Otob#r %,,*5
Pag# $ %+
Obligations and Contrats! "otrin#s and Cas# "ig#sts
2edialdea, J.: Article 1191 is not applica#le in the present case. The o#ligation is not reciprocal, #ecause to define reciprocal o#ligations, the o#ligation of one is a resolutory condition of the o#ligation of the other, the non(fulfill$ent of &hich entitles the other party to rescind the contract. )n the present case, there are t&o and distinct o#ligations &hich is independent of the other: Songcuans o#ligation is to reconvey the property and Alviars is to lease the pre$ises to the for$er. Koth is not dependent of the other. SANC7O %. LI;ARRAGA &G'R' No' L(110+*- 00 P/il 7*%- *7 F#br3ar4 %,1%5
4o$ualde, J.: The provision of Article 117= is not applica#le in the present case as it pertains to resolutions of o#ligations in general. 3o&ever, Articles 1G81 and 1G87 refers to contract partnerships. )n the present case, though the defendant failed to pay for the &hole a$ount he had #ound hi$self to pay, the plaintiff $ay still not ac6uire the right to de$and rescission. The defendant $ay have inde#ted hi$self to the partnership &ith interest and da$ages #ut rescission under Article 117= cannot #e invo*ed. )t is a &ell settled rule that special provisions prevail over general ones. CALTE 7ILIINES, INC. %. IAC &G'R' No' 6)61*- %67 SCRA 6)%- .0 A3g3st %,+,5
2edialdea, J.: or non(pay$ent of a note secured #y $ortgage, the creditor has a single cause of action against the de#tor. This single cause of action consists in the recovery of the credit &ith eecution of the security. )n other &ords, the creditor in his action $ay $a*e t&o de$ands, the pay$ent of the de#t and the foreclosure of his $ortgage. Kut #oth de$ands arise fro$ the sa$e cause, the non(pay$ent of the de#t, and, for that reason, they constitute a single cause of action. Though the de#t and the $ortgage constitute separate agree$ents, the latter is su#sidiary to the for$er, and #oth refer to one and the sa$e o#ligation. S/RIA %. IAC &G'R' No' 61+,1- %0% SCRA 77%- 1* 23n# %,+65
utierre, J.: Pag# $ %,
Obligations and Contrats! "otrin#s and Cas# "ig#sts
Art. 1B8B of the Civil Code provides: provides: The action for rescission rescission is su#sidiary su#sidiary it cannot #e instituted ecept &hen the party suffering da$age has no other legal $eans to o#tain reparation for the sa$e.D Also, According According to Article 1=8, #y the contract of sale, the vendor o#ligates hi$self to transfer the o&nership of and to deliver a deter$inate thing to the #uyer, &ho in turn, is o#ligated to pay a price certain in $oney or its e6uivalent. ii.
S/BSIDIA IDIAR R: RE#EDIE IES S &. ART. &&2 &&222 iii. ANCIL ILL LAR: RE#E RE#ED DIE IES S &. ATT TTAC7#EN AC7#ENT T, RELE0IN, GARNIS7#ENT GARNIS7#ENT,, RECEI0ERS7I RECEI0ERS7I,, EA#INATION O) DEBTOR, ETC. 2. @INDS @INDS O) OBLI OBLIGA GATI TION ON a1 /RE /RE AND AND COND CONDITI ITION ONAL AL i. @INDS O) O) CONDITION LIEBENO3 %. 7ILIINE 0EGETABLE OIL CO#AN: &G'R No' %1)71- 1, P/il 7*- *, No;#9b#r %,%+5
Street, J.: According According to the Article 1B08, then Article 17G provides provides that the validity and perfor$ance perfor$ance of a contract cannot #e left to the &ill of one of the contracting parties. The pro$ise to provide #onus creates a legal o#ligation #inding upon the pro$isor. This *ind of pro$ise is not nugatory, under Article 1187, then 111, as e$#odying a condition condition dependent dependent eclusively eclusively upon the &ill of the o#ligor. Also, under Article 1B=9, then Article 17!B, ; The fact that the 6uantity is not deter$inate shall not#e an o#stacle to the eistence of the contract;D )n the present present case, the uncertainty of the a$ount of the #onus does not #ar the validity of the contract. 2oreover, the pro$ise is a#solute and unconditional. )t is not conditioned upon satisfactory satisfactory service nor to the duration of the service nor upon the profits profits earned. These $ay operate upon the $inds of the #oard of directors, directors, #ut these are unconnected unconnected to legal right of the plaintiff to to receive receive so$ething so$ething as a #onus. #onus. TRILLANA %. /E;ON COLLEGE &G'R' No' L(0**1- ,1 P/il 1+1- .6 23n# %,015
5aras, J.: According According to the then Article 111, and no& the Article 1187, of the Civil Code, ?hen the fulfill$ent of the condition depends upon the sole &ill of the de#tor, de#tor, the conditional conditional o#ligation o#ligation Pag# $ .*
Obligations and Contrats! "otrin#s and Cas# "ig#sts
shall #e void.)f it depends upon chance or upon the &ill of a third third person, the o#ligation o#ligation shall ta*e effect in confor$ity &ith the provisions of thisCode.D )n the present present case, case, the proposal proposal of a$asa a$asa Crisosto$o Crisosto$o to pay pay the value of of the su#scription su#scription after after she has harvested harvested fish is a condition condition o#viously dependent upon her sole &ill. )t is facultative in nature, &hich according to the a#ove stated provision is void. TIBLE %. A/INO A/INO &G'R' No' L(.+,76- 70 SCRA .*6- .. 23l4 %,605
Isguerra, Isguerra, J.: Article 111, 111, or presently presently the Article 1187, 1187, of the Civil Code states that ?hen the fulfill$ent of the condition depends upon the sole &ill of the de#tor, the conditional o#ligation shall #e void...D )n the present case, the condition for the pay$ent of the a$ounts sho&n in the pro$issory pro$issory notes &as clearly dependent upon Ti#les operation of the forest concession that he ac6uired fro$ A6uino. )t is undou#tedly undou#tedly a void conditional conditional o#ligation, o#ligation, since its fulfil$ent fulfil$ent is $ade to depend on the eclusive &ill of the de#tor, &hich is Ti#le and on &hether or not he &ill operate the ti$#er concession. ATENTE %. O#EGA &G'R' No' L())11- ,1 P/il .%+- ., :a4 %,015
5a#lo, J.: Article 111 111 of the old Civil Code states that ?hen the fulfil$ent of the condition depends on the &ill of the de#tor, the conditional o#ligation shall #e null and void...D Also Article 1178 of the sa$e code provides that if the o#ligation does not indicate the ter$, #ut its nature and circu$stances , it is deduced that iti is intended to #e granted to the de#tor, the court shall deter$ine the duration of that de#t. )n the present present case, the pro$issory pro$issory note does not epress epress the period &ithin &hich the de#t $ust #e paid.. )t &as left to the discretion of the de#tor as to &hen to pay his de#t. )n applying the Article 1178 1178 of the old civil code, it is the court &ho shall deter$ine deter$ine the period. As stated #y the Supre$e Court, it is unfair to leave it at the eclusive discretion of the de#tor. CENTRAL 7ILIINE /NI0ERSIT: %. CA &G'R' No' %%.%.6- .)7 SCRA 0%%0%%- %6 23l4 %,,05
Pag# $ .%
Obligations and Contrats! "otrin#s and Cas# "ig#sts
Kellosillo, Kellosillo, J. M
?hen a donati donation on i$poses i$poses a #urd #urden en e6uival e6uivalent ent to the the a$ount a$ount of the the donation donation,, the donatio donationn is onerous. @nder Article 1181 of the Civil Code, on conditional o#ligations, the ac6uisition of rights, as &ell as the etinguish$ent or loss of those already ac6uired, shall depend upon the happening of the event &hich constitutes the condition. ?hen a person donates land to another on the condition that the latter &ould #uild upon the land a school, the condition i$posed &as not a condition precedent or a suspensive condition #ut a resolutory one. )f there &as no co$pliance &ith the condition, the donation $ay no& #e revo*ed and all rights &hich the donee $ay have ac6uired under it shall #e dee$ed lost and etinguished.
M
The CA #ased #ased their their decisi decision on on the genera generall rule provid provided ed in the Art. Art. 119! 119! of the the Civil Civil Code applies, &hich provides that the courts $ay fi the duration thereof #ecause the fulfill$ent of the o#ligation itself cannot #e de$anded until after the court has fied the period for co$pliance there&ith and such period has arrived. According According to the Supre$e Supre$e Court, ho&ever, ho&ever, the general rule cannot #e applied in the present case. or the span of fifty +0- years the petitioner &as given a ti$e to co$ply &ith tghe conditions of the donation. 3o&ever, the petitioners &ere still una#le to create a $edical college in the parcel of land donated #y the late on 4a$on %ope. As the SC stated: 5etitioner has slept on its o#ligation for an unreasona#le length of ti$e.D. Thus it is only fair that the donation donation #e dee$ed ineffective ineffective and revo*ed revo*ed in favor of the herein herein private respondents. i.
E))ECTS O) O) CONDITION LA)ORTE;A %. #AC7/CA
&G'R' No' %1600.- 111 SCRA 7)1- %7 23n# .***5
onaga(4eyes, J.: ailure ailure to co$ply &ith &ith condition condition i$posed upon the perfection perfection of the contract contract results results in the the failure failure of a contract, contract, &hile the the failure failure to co$ply &ith &ith condition condition i$posed i$posed on the perfor$ance perfor$ance of of an o#ligation only gives the other party the option either to refuse to proceed &ith the sale or to &aive the condition. According to Article 1=, ?here the o#ligation of either party to a contract of sale is su#/ect to any condition &hich is not perfor$ed, such party $ay refuse to proceed proceed &ith the the contract contract or he $ay &aive &aive perfor$ance perfor$ance of the the condition. condition. )f the other other party has has pro$ised pro$ised that the the condition condition should happen happen or #e perfor$ed, perfor$ed, such first $entioned $entioned party party $ay also also treat the non(perfor$ance of the condition as a #reach of &arranty...D CALERO %. CARRION Pag# $ ..
Obligations and Contrats! "otrin#s and Cas# "ig#sts
&G'R' No' L(%1.)7- %*6 P/il 0),- 1* :ar/ %,7*5
Karrera, Karrera, J.: According According to Article 119! )f the o#ligation o#ligation does not fi a period, #ut fro$ fro$ its nature nature and the circu$stances it can #e inferred that a period &as intended, the courts $ay fi the duration thereof. The courts shall also fi the duration of the period &hen it depends upon the &ill of the de#tor. )n every case, the courts shall deter$ine such period as $ay under the circu$stances have #een pro#a#ly conte$plated #y the parties. "nce fied #y the courts, the period cannot #e changed #y the$.D Itra/udicial Itra/udicial de$and is not essential for the creation of the cause of action to have the period fied. )t eists #y operation operation of la& fro$ the $o$ent such an agree$ent agree$ent su#/ect to an undeter$ined period is entered into, &hether the period depends upon the &ill of the de#tor alone, or of the parties the$selves, or &here fro$ the nature and the circu$stances of the o#ligation it can #e inferred that a period &as intended. BORRO#EO %. CA &G'R' No' L(..,7.- )6 SCRA 70- .+ S#8t#9b#r %,6.5
ernando, ernando, J.: According According to the Article 1B!0, )t is a funda$ental funda$ental principle in the interpretation interpretation of contracts contracts that &hile ordinarily the literal sense of the &ords e$ployed is to #e follo&ed, such is not the case &here they Fappear to #e contrary to the evident intention of the contracting parties,F &hich intention shall prevailD. The rule is that a la&ful pro$ise $ade for a la&ful consideration is not invalid $erely #ecause an unla&ful pro$ise &as $ade at the sa$e ti$e and for the sa$e consideration, and this rule applies, although the invalidity is due to violation of a statutory provision, provision, unless the statute epressly or #y necessary i$plication declares declares the entire entire contract void. GREGORIO ARANETA, INC. %. 7ILIINE S/GAR ESTATE DE0ELO#ENT CO. &G'R' No' ..00+- .* SCRA 11*- 1% :a4 %,765 %,76 5
4eyes, J.K.%., J.K.%., J.: Article 119! of the Civil Code is applica#le applica#le in cases &here &here the period is not stipulated stipulated in the contract. 2oreover, this provision clearly stated that periods cannot #e set ar#itrarily and that the the period periodss to #e deter deter$in $ined ed #y the court court shall #e pro# pro#a# a#le le that that the parties parties $ust $ust have have conte$plated such period. or the court to proceed into deter$ining the period &ithin &hich the o#ligation $ust #e co$plied &ith, it $ust #e included in the co$plaint. Pag# $ .1
Obligations and Contrats! "otrin#s and Cas# "ig#sts
)n the present present case, the deed deed of sale epressly epressly stated stated that the contract contract &ith responden respondentt 5hilippine 5hilippine Sugar Istates evelop$ent Co., %td. gave petitioner regorio Araneta, )nc. Freasona#le ti$e &ithin &hich to co$ply &ith its o#ligation to construct and co$plete the streets.F The contract so provided provided that there there &as a period fied, a Freasona#le Freasona#le ti$eF and all that the court should have done &as to deter$ine if that reasona#le ti$e had already elapsed &hen suit &as filed if it had passed, then then the court should should declare declare that that petitioner petitioner had #reached #reached the the contract, contract, as averred averred in the co$plaint, and fi the resulting da$ages. 2oreover 2oreover,, should it #e said that there &as no fied ti$e in the co$plaint not having sought that the Court should set a period, the court could not proceed to do so unless the co$plaint in as first a$ended. And granted that this is &ithin the po&er to #e deter$ined deter$ined #y the court, the a$ended decision is still untena#le as no #asis is stated to support the conclusion that the period should #e set at t&o years after finality of the /udg$ent. The trial Court appears to have pulled the t&o(year period set in its decision out of thin air, since no circu$stances are $entioned to support it. it. C7A0ES %. GON;ALES &G'R' No' L(.6)0)- 1. SCRA 0)6- 1* A8ril %,6*5
4eyes, J.K.%., J.K.%., J.: ?here the ti$e for co$pliance had epired and there &as #reach of contract #y non( perfor$ance, perfor$ance, it &as acade$ic acade$ic for the plaintiff plaintiff to have first first petitioned petitioned the court court to fi a period period for the perfor$ance of the contract #efore filing his co$plaint. 3o&ever in in the present present case, case, they intended intended that the the defendant defendant &as to finish finish it at so$e future future ti$e although such ti$e &as not specified and that such ti$e had passed &ithout the &or* having #een acco$plished. the defendant ad$itted hi$self that he returned the type&riter canni#alied and unrepaired, &hich is clearly a #reach of his o#ligation. efendant cannot invo*e Article 119! of the Civil Code for he virtually ad$itted non(perfor$ance #y returning the type&riter that he &as o#liged to repair in a non(&or*ing condition, &ith essential parts $issing. The fiing of a period &ould thus #e a $ere for$ality and &ould serve no purpose than to delay. RADIO3EALT7 )INANCE CO#AN: %s. DEL ROSARIO &G'R' No' %1+61,' 110 SCRA .++ 23l4 7< .***'5
5A>A>) 5A>A>)KA>, KA>, J: "K%) "K%)A AT) T)"> ">S: S: ?)T3 ?)T3 A 5I 5I4) 4)" ":: ?3I> ?3I> C"@4 C"@4TS TS 2AL 2AL >"T >"T )NI )NI 5I4) 5I4)" ":: C">T C">TI2 I25" 5"4A 4A>" >"@S @S )>TI )>TI>T >T:: 4esp 4espon onde dent ntss theo theori rie e that that the the acti action on for for i$$e i$$edi diat atee Pag# $ .)
Obligations and Contrats! "otrin#s and Cas# "ig#sts
enforce$ent enforce$ent of their o#ligation o#ligation is pre$atur pre$aturee #ecause its fulfill$ent fulfill$ent is dependent dependent on the sole &ill of the de#tor. 3ence, they consider that the proper court should first fi a period for pay$ent, pursuant to Articles Articles 1180 1180 and 119! 119! of the Civil Civil Code. This contention is untena#le. The act of leaving #lan* the due date of the first install$ent did not necessarily $ean that the de#tors &ere allo&ed to pay as and &hen they could. )f this &as the intention of the parties, they should have so indicated in the 5ro$issory >ote. 3o&ever, 3o&ever, it did not reflect reflect any such such intention. intention. Eerily, the conte$poraneous and su#se6uent acts of the parties $anifest their intention and *no&ledge that the $onthly install$ents &ould #e due and de$anda#le each $onth. )n this case, the conclusion that the install$ents had already #eca$e due and de$anda#le is #olstered #y the fact that responden respondents ts started paying paying install$ents install$ents on the 5ro$issory 5ro$issory >ote, >ote, even if the chec*s chec*s &ere &ere dishonored #y their dra&ee #an*. ?e are convinced neither #y their avo&als that the o#ligation had not yet $atured nor #y their clai$ that a period for pay$ent should #e fied #y a court. B/CCAT %s. DISO &G'R' No' L())11+- A8ril %0< %,++5
Sar$iento, J: "K%)AT)">S: ?)T3 A 5I4)": ?3I> T3I 4)3T " ACT)"> "4 T3I )N)> " T3I 5I4)" 5I4)" " %IASI %IASI ACC4@I: ACC4@I: ?e hold that it &as only in >ove$#er >ove$#er 19!7 that the cause of action for the fiing of the period of lease accrued. This is as it should #e #ecause prior to that, the validity of the second contract of lease &as #eing challenged. The case for unla&ful detainer filed #y the plaintiff(appellee #eca$e in fact a case 6uestioning the validity of the second contract on the grounds grounds that the said contract contract &as si$ulated and that there there &as no consideration. The plaintiff(appellee could not have #een epected to file an action for the fiing of the period of the lease #efore the Court of Appeals pro$ulgated its decision #ecause she &as not yet a&are that the said paragraph of the second contract &as a provision that called for an indefinite period. or the reason that the very eistence, and su#se6uently, the interpretation of the second contract of lease, particularly par. B thereof, &ere put in issue in the unla&ful detai detaine nerr case, case, the court court tryin tryingg the the case case &as re6uir e6uired ed to interp interprret the prov provisi ision onss of, and and conse6uently, rule on the validity of the said contract. This &as precisely &hat the trial courts decision &hich &as affir$ed #y the Court of Appeals, in fact, resolved. And in confor$ity &ith the suggestion of the said court, the plaintiff(appellee filed the present case. The re$edy or the cause of action for the filing of a case for the fiing of a period in the contract, therefore, only accrued &hen the court finally declared the second contract valid #ut that the provision as to the period &as indefinite and hence, an action for the fiing of the period of the contract had to #e filed. urther$ore urther$ore,, should the plaintiff(appellee plaintiff(appellee have opted to file a case for the fiing of the period of the lease contract #efore the ter$ination of the unla&ful detainer case, the latter case Pag# $ .0
Obligations and Contrats! "otrin#s and Cas# "ig#sts
&ould have #een rendered $oot and acade$ic and the plaintiff(appellee &ould have inevita#ly and un&ittingly ratified the second contract. >o person in his right $ind &ould have done such. DAG/7O: ENTERRISES, INC. %s. ONCE &G'R' No' L(70%0' Otob#r %+< %,0)'5
2onte$ayor 2onte$ayor, J: "K%) "K%)A AT) T)"> "> A> A> C">T C">T4A 4ACT CTS S %"A> %"A>S S "K%) "K%)A AT) T)"> "> ?)T3 ?)T3 A5 A5I4 I4)" )" 5@4I 5@4I "K%)AT)">. O Although the original loan, including its increased a$ount, &as paya#le &ithin si years, and so did not #eco$e due and paya#le until the epiration thereof, the de#tor lost the #enefit of the period #y reason of her failure to give and register the security agreed upon in the for$ of the t&o deeds of $ortgage and so the o#ligation #eca$e pure and &ithout any condition. Conse6uently, the loan #eca$e due and i$$ediately de$anda#le "K%)AT)"> A> C">T4ACTS %"A>SI5"S)T " T3I A2"@>T " T3I %"A> )> A>"T3I4 ACT)"> )S >"T I'@)EA%I>T I'@)EA%I>T T" 5AL2I>T AL2I>T IKT"4 )S >"T 4I%)IEI 4I%)IEI 4"2 5AL2I>T 5AL2I>T " )>TI4IST )>TI4IST.. O The deposit $ade #y the the de#tor, de#tor, in another action action separate and different fro$ the present, in favor of the creditor, though eventually &ould #e given to the latter, did not relieve the de#tor fro$ the pay$ent of interest fro$ the ti$e of the deposit #ecause it did not a$ount to the pay$ent of the loan. =1 ALTERNA ALTERNATI0E TI0E AND AND )AC/L )AC/LT TATI0E * ARTS. ARTS. &&99 TO TO &-6 "1 JOINT AND SOLIDAR SOLIDAR: : * ARTS. ARTS. &-62 TO TO &--7ILIINE NATIONAL NATIONAL BAN@ %s. AS/NCION &G'R' No' L()7*,0- No;#9b#r .1< %,665
2a*asiar, 2a*asiar, J: J")>T A> S"%)A4)%L S"%)A4)%L "K%)AT)">S: "K%)AT)">S: Article 171G of the >e& Civil Code gives the creditor the right to Fproceed against anyone of the solidary de#tors or so$e or all of the$ si$ultaneously si$ultaneously.F .F The choice is undou#tedly left to the solidary creditor to deter$ine against &ho$ he &ill enforce collection. )n case of the death of one of the solidary de#tors, he +the creditor- $ay, if he so chooses, proceed against the surviving solidary de#tors &ithout necessity of filing a clai$ in the estate of the deceased de#tors. )t is not $andatory for hi$ to have the case dis$issed as against the surviving de#tors and file its clai$ against the estate of the deceased solidary de#tor, as &as $ade apparent in the afore6uoted decision. or to re6uire the creditor to proceed against the estate, $a*ing it a condition precedent for any collection action against the surviving de#tors to prosper prosper,, &ould deprive hi$ of his su#stantive su#stantive rights provided #y Article 171G of the >e& Civil Code. Pag# $ .7
Obligations and Contrats! "otrin#s and Cas# "ig#sts
INC7A/STI CO. %s. % s. :/LO, &G'R' No' 66.%- :ar/ .0< %,%)5
Arrellano. Arrellano. J: C">J")>T A> S"%)A4L "K%)AT)">S ACT)"> KL T3I C4I)T"4 AA)>ST A>L " T3I IKT"4S IICTS " A S@KSI'@I>T )>ST4@2I>T. O ?hen the o#ligation is a solidary one, the creditor $ay #ring his action in toto against any of the de#tors o#ligated in solidu$ and although although the creditor $ay have, #y $eans of a su#se6uent instru$ent, covenanted &ith so$e of the solidary de#tors different periods of pay$ent and different conditions, not on this account $ay it #e understood that the solidarity stipulated in the previous instru$ent has #een #ro*en. e1 DI0ISIB DI0ISIBLE LE AND AND INDI0I INDI0ISIBL SIBLE E * ARTS. ARTS. &--( &--( TO &--+ 1 3IT7 3IT7 A ENAL ENAL CLA/ CLA/SE SE * AR ARTS. &-- &-- TO TO &-(6 #A@ATI #A@ATI DE0ELO#ENT CORORATION %s. E#IRE INS/RANCE CO. &G'R' No' L(.%6+*' 23n# 1*< %,76'5
C)E)% C)E)% %A? %A? "K%)A "K%)AT)"> T)">SS A> C">T4AC C">T4ACTS TS 5I>A% 5I>A% C%A@SI, C%A@SI, 2)T)A 2)T)AT)"> T)"> ". ". O ?here a contract of sale of real property i$poses a Fspecial conditionF upon the vendee to construct a house thereon and co$plete at least 0P of such construction &ithin t&o years other&ise the surety #ond of 517,000.00 &ould #e forfeited in favor of the vendor, such Fspecial conditionF is in reality an o#ligation &ith a penal clause, and the o#ligors lia#ility $ay #e $itigated pursuant to Article 1779 of the Civil Code, considering that such penalty is intended not to inde$nify the vendor for any da$age it $ight suffer as a result of a #reach of contract, #ut rather to co$pel perfor$ance and thus encourage ho$e #uilding a$ong lot o&ners in the @rdaneta Eillage. C)E)% C)E)% %A? %A? "K%) "K%)A AT)">S T)">S A> A> C">T4 C">T4AC ACTS TS 54 54)E )E)TL )TL " C">T C">TACT ACT 5A4 A4T)A T)A% % 5I4"42A>CI 5I4"42A>CI KL T3)4 5I4S">. O ?here the vendee in the case at #ar has sold the lot to a third person &ho, #efore the epiration of the stipulated period of t&o years, had fenced the pre$ises pre$ises &ith a stone &all, stoc*ed #uilding $aterials therein therein &ithin said period, and had co$pleted, although #elatedly, very $uch $ore than the 0P stipulated, there &as a partial perfor$ance perfor$ance of the o#ligation &ithin the $eaning of Art. 1779 of the Civil Code and the ruling in the case of en. )ns. Q Surety Corp. vs. 4epu#lic, %(1B8!B, January B1, 19GB, &here there &as no partial perfor$ance, cannot #e invo*ed as authority for the forfeiture of the full a$ount of the #ond. )ndeed the stipulation in this case to co$$ence the construction and co$plete at least 0P of the vendees house &ithin t&o years cannot #e construed as i$posing a strictly personal o#ligation o#ligation on hi$. To To adopt such such a construction construction &ould &ould #e to li$it li$it his right to dispose of Pag# $ .6
Obligations and Contrats! "otrin#s and Cas# "ig#sts
the lot. There is nothing in the deed of sale restricting his right to sell the lot at least &ithin the t&o(year period, and &e thin* it plain that a reading of such a li$itation on one of the rights of o&nership $ust rest on $ore eplicit language in the contract. )t cannot #e left to $ere inference. CO##ERCIAL CREDIT CORORATION O) CAGA:AN DE ORO, etitioner, %s. T7E CO/RT O) AEALS &G'R' No' 6+1%0- 2an3ar4 .< %,+,5
angayco,J: 2"))CAT)"> " C"254"2)SI J@2I>T @>I4 A4T)C%I 1779 " T3I >.C.C. >"T A55%)CAK%I T" A )>A% A> INIC@T"4L J@2I>T.O Article 1779 of the Civil Code applies only to o#ligations or contract, su#/ect of a litigation, the condition #eing that the sa$e has #een partly or irregularly co$plied &ith #y the de#tor. The provision also applies even if there has #een no perfor$ance, as long as the penalty is ini6uituous or unconsciona#le. )t cannot apply to a final and eecutory /udg$ent. ?hen the parties entered into the said co$pro$ise agree$ent and su#$itted the sa$e for the approval of the trial court, its ter$s and conditions $ust #e the pri$ordial consideration &hy the parties voluntarily entered into the sa$e. The trial court approved it #ecause it is la&ful, and is not against pu#lic policy or $orals. Iven the respondent Court of Appeals upheld the validity of the said co$pro$ise agree$ent. 3ence, the respondent court has no authority to reduce the penalty and attorneys fees therein stipulated &hich is the la& #et&een the parties and is res /udicata. RADIO3EALT7 )INANCE CO#AN: %s. DEL ROSARIO, &G'R' No' %1+61,' 110 SCRA .++ 23l4 7< .***'5
5A>A>)KA>, J: "K%)AT)">S: ?)T3 A 5I>A%TL: ?here a contract of sale of real property i$poses a Fspecial conditionF upon the vendee to construct a house thereon and co$plete at least 0P of such construction &ithin t&o years other&ise the surety #ond of 517,000.00 &ould #e forfeited in favor of the vendor, such Fspecial conditionF is in reality an o#ligation &ith a penal clause, and the o#ligors lia#ility $ay #e $itigated pursuant to Article 1779 of the Civil Code, considering that such penalty is intended not to inde$nify the vendor for any da$age it $ight suffer as a result of a #reach of contract, #ut rather to co$pel perfor$ance and thus encourage ho$e #uilding a$ong lot o&ners in the @rdaneta Eillage 4. ETING/IS7#ENT O) OBLIGATIONS A. #ODES * ART. &-(& TEJ/CO %s . E. R. S/IBB SON Pag# $ .+
Obligations and Contrats! "otrin#s and Cas# "ig#sts
&G'R' No' L(%%*0.- A8ril 1*< %,0+5
5A4AS, J: "K%)AT)">S A> C">T4ACTS INT)>@)S32I>T " "K%)AT)">S 2"IS. O @pon the other hand, Article 17B1 of the Civil Code is to the effect that F. . . other causes of etinguish$ent of o#ligations, such as annul$ent, rescission, fulfill$ent of a resolutory condition, and prescription, are governed else&here in this Code.F "n the $atter of prescription, the applica#le provision is Article 1179 of the Civil Code &hich states that Factions prescri#e #y $ere lapse of ti$e fied #y la&.F This necessarily leads us to Article 11=! of the Civil Code &hich re6uires that an action for defa$ation $ust #e filed &ithin one year. The #road ter$ Fdefa$ationF in the a#sence of any other specific provisions, includes li#el. SA/RA I#ORT EORT CO., INC. %s. DE0ELO#ENT BAN@ O) T7E 7ILIINES &G'R' No' L(.),7+- A8ril .6< %,6.5
2ARA%)>TA%, J: C)E)% %A? "K%)AT)">S A> C">T4ACTS C">T4ACTS 5I4ICT)"> @5"> ACCI5TA>CI " 54"2)SI T" I%)EI4 S"2IT3)> KL ?AL " S)25%I %"A> A4T. 19= " T3I C)E)% C"I. O ?here the application of Saura )nc. for a loan of 500,000.00 &as approved #y resolution of the defendant, and the corresponding $ortgage eecuted and registered, there is undou#tedly offer and acceptance and ?e hold that there &as indeed a perfected consensual contract as recognied in Article 19= of the Civil Code. INT)>@)S32I>T " "K%)AT)"> KL 2@T@A% IS)STA>CI )> )>STA>T CASI. O ?hen 4C turned do&n the re6uest of Saura )nc., the negotiations &hich had #een going on for the i$ple$entation of the agree$ent reached an i$passe. Saura )nc., o#viously &as in no position to co$ply &ith 4Cs conditions. So instead of doing so and insisting that the loan #e released as agreed upon, Saura )nc., as*ed that the $ortgage #e cancelled, &hich &as done on June 1, 19. The action thus ta*en #y #oth parties &as in the nature of $utual desistance O &hat 2anresa ter$s F$utuo disensoF O &hich is a $ode of etinguishing o#ligations. )t is a concept that derives fro$ the principle that since $utual agree$ent #y the parties can create a contract, $utual disagree$ent #y the parties can cause its etinguish$ent. B. A:#ENT OR ER)OR#ANCE * ART. &-(I. C7ARACTERISTICS &. INTEGRIT: O) A:#ENT * ART. &-(( A. ECETIONS * ARTS. &-(5 AND &-(+ -. IDENTIT: O) A:#ENT * ART. &-55 Pag# $ .,
Obligations and Contrats! "otrin#s and Cas# "ig#sts
A. ECETION * ART. &-5+ (. INDI0ISIBILIT: O) A:#ENT * ART. &-54 A. ECETION * ART. &-5+ II. 37O CAN #A@E A:#ENT * ARTS. &-( TO &-(9
GON;AGA %s. GARCIA &G'R' No' +.0)-:ar/ 1< %,%)5
T4I>T,J: EI>"4 A> 5@4C3ASI4 INIC@T)"> SA%I " 4)3T T" 4I5@4C3ASI S@KSI'@I>T SA%I KL INIC@T)"> 5@4C3ASI4. O A /udg$ent creditor purchased the right to repurchase under a pacto de retro sale of land of his /udg$ent de#tor, at an eecution sale. The period for rede$ption of the interest thus sold under eecution epired &ithout the /udg$ent de#tors having eercised his right of rede$ption. The latter did, ho&ever, tender the repurchase price under the pacto de retro contract to the vendee, &ho accepted it, at the sa$e ti$e canceling the annotation of the said contract in the property registry. 5etitioners clai$ of o&nership of the land, #ased on a su#se6uent purchase fro$ the /udg$ent creditor, &as invalid, as the latter did not ac6uire the fee #y the repurchase of the land under the pacto de retro contract #y the /udg$ent de#tor. Article 118 of the Civil Code is not applica#le to this case for the reason that the /udg$ent creditor &as not a de#tor of the pacto de retro vendee. 3aving ac6uired the right to repurchase, the eercise of this right &as optional &ith hi$. SISON %s. BALGOS &G'R' No' %*1*0- S#8t#9b#r 0< %,%75
A4I%%A>", CJ: "K%)AT)">S 5AL2I>T ?3" CA> 2ARI T3I 5AL2I>T. O Any person, &hether he has an interest or not in the fulfill$ent of the o#ligation, and &hether the de#tor *no&s approves it or is not a&are thereof, can $a*e the pay$ent. +Civil Code, art. 118.III. TO 37O# CAN A:#ENT BE #ADE * ARTS. &-56 TO &-5( I0. A:#ENT O) DEBTS IN #ONE: * ART. &-59 &. SEC. & O) RA +-9 >E))ECTI0IT:? & J/NE &9+61, AS A#ENDED B: RA 5&66 Pag# $ 1*
Obligations and Contrats! "otrin#s and Cas# "ig#sts
-. SEC. & AND - O) RA 4&4( >&& J/NE &991 B/ENA0ENT/RA %s. CO/RT O) AEALS &G'R' No' L()1+1*- 2an3ar4 ..< %,,*5
I4>A>, J: @>)"42 C@44I>CL ACT +4I5@K%)C ACT >". 79- I>I4A% 4@%I "> 5AL2I>T " "K%)AT)"> )> C@44I>CL "T3I4 T3A> T3I 53)%)55)>I C@44I>CL INCI5T)">. O An agree$ent to pay an o#ligation in a currency other than 5hilippine currency is null and void as contrary to pu#lic policy, &hat the la& specifically prohi#its is pay$ent in currency other than legal tender #ut does not defeat a creditors clai$ for pay$ent. A contrary rule &ould allo& a person to profit or enrich hi$self ine6uita#ly at anothers epense. ?ith regard to o#ligations incurred prior to the effectivity of 4epu#lic Act >o. 79 re6uiring pay$ent in a particular *ind of coin or currency other than 5hilippine currency, it is specifically provided that the sa$e shall #e discharged in 5hilippine currency $easured at the prevailing rate of echange at the ti$e the o#ligation &as incurred ecept in case of a loan $ade in a foreign currency stipulated to #e paya#le in the sa$e currency in &hich case the rate of echange prevailing at the stipulated date of pay$ent shall prevail. )n the case #efore @s, petitioners o#ligation &as incurred after the enact$ent of 4epu#lic Act >o. 79, as a$ended. As held in Ralalo vs. %u +supra- and as correctly relied upon #y respondent appellate court, the rate of echange should #e that prevailing at the ti$e of pay$ent. (. LEGAL TENDER * SECS. (& AND (- O) D2- >&& NO0E#BER &92-1 A. COINS * CIRC/LAR NO. +(2 0. A:#ENT IN #ERCANTILE DOC/#ENT * -ND ARAGRA7 O) ART. &-59 NE3 ACI)IC TI#BER S/L: CO#AN:, INC. %s. SENERIS &G'R' No' L()%67)- "##9b#r %,< %,+*5
C">CI5C)">, J4., J:
OBLICON: PAYMENT IN MERCANTILE. — It is a well-known an a!!e"te "ra!ti!e in t#e $%siness se!tor t#at a Cas#ier&s C#e!k is ee'e as !as#. Moreo(er, sin!e t#e sai !#e!k #a $een !erti)ie $* t#e rawee $ank, $* t#e !erti)i!ation, t#e )%ns re"resente $* t#e !#e!k are trans)erre )ro' t#e !reit o) t#e 'aker to t#at o) t#e "a*ee or #oler, an )or all intents an "%r"oses, t#e latter $e!o'es t#e e"ositor o) t#e rawee $ank, wit# ri+#ts an %ties o) one in s%!# sit%ation. #ere a !#e!k is !erti)ie $* t#e $ank on w#i!# it is rawn, t#e !erti)i!ation is e%i(alent to a!!e"tan!e. ai !erti)i!ation /i'"lies t#at t#e !#e!k is rawn %"on s%))i!ient Pag# $ 1%
Obligations and Contrats! "otrin#s and Cas# "ig#sts
)%ns in t#e #ans o) t#e rawee, t#at t#e* #a(e $een set a"art )or its satis)a!tion, an t#at t#e* s#all $e so a""lie w#ene(er t#e !#e!k is "resente )or "a*'ent. It is an %nerstanin+ t#at t#e !#e!k is +oo t#en, an s#all !ontin%e to $e +oo, an t#is a+ree'ent is as $inin+ on t#e $ank as its notes in !ir!%lation, a !erti)i!ate o) e"osit "a*a$le to t#e orer o) t#e e"ositor, or an* ot#er o$li+ation it !an ass%'e.
TIBAJIA, JR. %s. CO/RT O) AEALS &G'R' No' %**.,*- 23n# )< %,,15
5A)%%A, J: C)E)% %A? INT)>@)S32I>T " "K%)AT)">S 5AL2I>T "4 5I4"42A>CI %IA% TI>I4 CAS3)I4S C3ICR )S >"T %IA% TI>I4. O )n the recent cases of 5hilippine Airlines, )nc. vs. Court of Appeals and 4o$an Catholic Kishop of 2alolos, )nc. vs. )nter$ediate Appellate Court, this Court held that O FA chec*, &hether a $anagers chec* or ordinary chec*, is not legal tender, and an offer of a chec* in pay$ent of a de#t is not a valid tender of pay$ent and $ay #e refused receipt #y the o#ligee or creditor.F The ruling in these t&o +7- cases $erely applies the statutory provisions &hich lay do&n the rule that a chec* is not legal tender and that a creditor $ay validly refuse pay$ent #y chec*, &hether it #e a $anagers, cashiers or personal chec*. 5etitioners erroneously rely on one of the dissenting opinions in the 5hilippine Airlines case to support their cause. The dissenting opinion ho&ever does not in any &ay support the contention that a chec* is legal tender #ut, on the contrary, states that F)f the 5A% chec*s in 6uestion had not #een encashed #y Sheriff 4eyes, there &ould #e no pay$ent #y the 5A% and, conse6uently, no discharge or satisfaction of its /udg$ent o#ligation.F 2oreover, the circu$stances in the 5hilippine Airlines case are 6uite different fro$ those in the case at #ar for in that case the chec*s issued #y the /udg$ent de#tor &ere $ade paya#le to the sheriff, I$ilio <. 4eyes, &ho encashed the chec*s #ut failed to deliver the proceeds of said encash$ent to the /udg$ent creditor. )n the $ore recent case of ortunado vs. Court of Appeals, this Court stressed that, F?e are not, #y this decision, sanctioning the use of a chec* for the pay$ent of o#ligations over the o#/ection of the creditor.F )ORT/NADO %s. CO/RT O) AEALS &G'R' No' 6+007' A8ril .0< %,,%'5
C4@<, J.: C)E)% %A? INT)>@)S32I>T " "K%)AT)">S 5AL2I>T "4 5I4"42A>CI %IA% TI>I4 CAS3)I4S C3ICR )S >"T %IA% TI>I4. O )n the recent cases of Pag# $ 1.
Obligations and Contrats! "otrin#s and Cas# "ig#sts
5hilippine Airlines, )nc. vs. Court of Appeals and 4o$an Catholic Kishop of 2alolos, )nc. vs. )nter$ediate Appellate Court, this Court held that O FA chec*, &hether a $anagers chec* or ordinary chec*, is not legal tender, and an offer of a chec* in pay$ent of a de#t is not a valid tender of pay$ent and $ay #e refused receipt #y the o#ligee or creditor.F The ruling in these t&o +7- cases $erely applies the statutory provisions &hich lay do&n the rule that a chec* is not legal tender and that a creditor $ay validly refuse pay$ent #y chec*, &hether it #e a $anagers, cashiers or personal chec*. 5etitioners erroneously rely on one of the dissenting opinions in the 5hilippine Airlines case to support their cause. The dissenting opinion ho&ever does not in any &ay support the contention that a chec* is legal tender #ut, on the contrary, states that F)f the 5A% chec*s in 6uestion had not #een encashed #y Sheriff 4eyes, there &ould #e no pay$ent #y the 5A% and, conse6uently, no discharge or satisfaction of its /udg$ent o#ligation.F 2oreover, the circu$stances in the 5hilippine Airlines case are 6uite different fro$ those in the case at #ar for in that case the chec*s issued #y the /udg$ent de#tor &ere $ade paya#le to the sheriff, I$ilio <. 4eyes, &ho encashed the chec*s #ut failed to deliver the proceeds of said encash$ent to the /udg$ent creditor. )n the $ore recent case of ortunado vs. Court of Appeals, this Court stressed that, F?e are not, #y this decision, sanctioning the use of a chec* for the pay$ent of o#ligations over the o#/ection of the creditor.F CO %s. 7ILIINE NATIONAL BAN@ &G'R' No' L(0%676- 23n# .,< %,+.5
KA44I", J: TI>I4 " C3ICR S@)C)I>T T" C"25I% 4II25T)"> K@T )S >"T )> )TSI% A 5AL2I>T. O ?e are not, #y this decision, sanctioning the use of a chec* for the pay$ent of o#ligations over the o#/ection of the creditor. ?hat &e are saying is that a chec* $ay #e used for the eercise of the right of rede$ption, the sa$e #eing a right and not an o#ligation. The tender of a chec* is sufficient to co$pel rede$ption #ut is not in itself a pay$ent that relieves the rede$ptioner fro$ his lia#ility to pay the rede$ption price. )n other &ords, &hile &e hold that the private respondents properly eercised their right of rede$ption, they re$ain lia#le, of course, for the pay$ent of the rede$ption price. NATIONAL #AR@ETING CORORATION %s. )EDERATION O) /NITED NA#ARCO DISTRIB/TORS, INC. &G'R' No' L(..06+- 2an3ar4 1%< %,615
A>T">)", J: C)E)% %A? "K%)AT)">S A> C">T4ACTS 5AL2I>T 2I4I I%)EI4L " >I"T)AK%I "C@2I>TS "IS >"T C">ST)T@TI 5AL2I>T. O The $ere delivery #y II4AT)"> of the do$estic letters of credit to >A2A4C" did not operate to discharge the de#t of II4AT)">. As sho&n #y the appealed /udg$ent, >A2A4C" accepted the three Pag# $ 11
Obligations and Contrats! "otrin#s and Cas# "ig#sts
letters of credit Fto insure the pay$ent of those goods #y the II4AT)"> . . .F They &ere given therefore as $ere guarantee for the pay$ent of the $erchandise. The delivery of pro$issory notes paya#le to order, or #ills of echange or drafts or other $ercantile docu$ent shall produce the effect of pay$ent only &hen realied, or &hen #y the fault of the creditor, the privileges inherent in their negotia#le character have #een i$paired 0I. ETRA'ORDINAR: IN)LATION OR DE)LATION O) T7E C/RRENC: * ART. &-+6 )ILIINO IE AND )O/NDR: CORORATION %s. NATIONAL 3ATER3OR@S AND SE3ERAGE A/T7ORIT: &G'R' No' L()1))7- :a4 1< %,++5
4)"(A'@)>", J: C)E)% %A? "K%)AT)">S A> C">T4ACTS INT4A("4)>A4L )>%AT)">, I)>I. O Itraordinary inflation eists &hen Fthere is a decrease or increase in the purchasing po&er of the 5hilippine currency &hich is unusual or #eyond the co$$on fluctuation in the value of said currency, and such decrease or increase could not have #een reasona#ly foreseen or &as $anifestly #eyond the conte$plation of the parties at the ti$e of the esta#lish$ent of the o#ligation. #OBIL OIL 7ILIINES, INC. %s. CO/RT O) AEALS &G'R' No' 0+%..' "##9b#r .,< %,+,'5
5A4AS, J: C)E)% %A? "K%)AT)"> A> C">T4ACTS EA%@I " T3I C@44I>CL AT T3I T)2I " T3I ISTAK%)S32I>T " T3I "K%)AT)"> 2AL >"T KI A55%)I ?)T3"@T A 54"5I4 IC%A4AT)"> " T3I IN)STI>CI " INT4A"4)>A4L )>%AT)"> "4 I%AT)">. O "n the second issue for ad/ust$ent clai$s, private respondent has no #asis in contract or in la&. 5arenthetically, the principle ?e laid do&n in the case of Co$$issioner of 5u#lic 3igh&ays vs. Kurgos +9G SC4A 8B1- can #e applied here, to &it: F. . . an agree$ent is needed for the effects of an etraordinary inflation to #e ta*en into account to alter the value of the currency at the ti$e of the esta#lish$ent of the o#ligation &hich, as a rule, is al&ays the deter$inative ele$ent, to #e varied #y agree$ent that &ould find reason only in the supervention of etraordinary inflation or deflation.F +pp. 8B!(8B8 e$phasis supplied- 2oreover, in his concurring opinion in the sa$e case, Justice Claudio Teehan*ee stated: F) concur in the result &ith the o#servation that the state$ents in the $ain opinion re the applica#ility or non( applica#ility of Article 170 of the Civil Code should #e ta*en as o#iter dicta, since said article $ay not #e invo*ed nor applied &ithout a proper declaration of etraordinary inflation or deflation of currency #y the co$petent authorities. )n the case at #ar, the o#ligation of the Pag# $ 1)
Obligations and Contrats! "otrin#s and Cas# "ig#sts
petitioner, if any, is #ased on la& since the sa$e calls for the application of the Civil Code provisions on da$ages. 2oreover, there has #een no official pronounce$ent or declaration of the eistence of etraordinary inflation or deflation. -. 37EN ARTICLE &-+6 DOES NOT AL: >OBLIGATIONS, NOT CONTRACT/AL1? 0ELASCO, %s. #ANILA ELECTRIC CO., ET AL., &G'R' No' L(%+1,*' "##9b#r .*< %,6%'5
4ILIS, JK% C)E)% %A? "K%)AT)">S 5AL2I>T A4T)C%I 170 A55%)IS T" C">T4ACT@A% "K%)AT)">S, >"T T" T"4TS AS )> CASI AT KA4. O )t can #e seen fro$ the e$ploy$ent of the &ords Fetraordinary inflation or deflation of the currency stipulatedF that the legal rule envisages contractual o#ligations &here a specific currency is selected #y the parties as the $ediu$ of pay$ent hence it is inapplica#le to o#ligations arising fro$ tort and not fro$ contract, as in the case at #ar, #esides there #eing no sho&ing that the factual assu$ption of the article has co$e into eistence. CO##ISSIONER O) /BLIC 7IG73A:S %s. B/RGOS &G'R' No' L(176*7- :ar/ 1%< %,+*5
I CAST4", J: C)E)% %A? "K%)AT)">S 5AL2I>T ?3I> A4T)C%I 170 "IS >"T A55%L. O Article 170 of the >e& Civil Code see$s to #e the only provision in our statutes &hich provides for pay$ent of an o#ligation in an a$ount different fro$ &hat has #een agreed upon #y the parties #ecause of the supervention of etra(ordinary inflation or deflation. FA4T. 170. )n case etra( ordinary inflation or deflation of the currency stipulated should supervene, the value of the currency at the ti$e of the esta#lish$ent of the o#ligation shall #e the #asis of pay$ent, unless there is an agree$ent to the contrary.F )t is clear that the foregoing provision applies only to cases &here a contract or agree$ent is involved. )t does not apply &here the o#ligation to pay arises fro$ la&, independent of contract. The ta*ing of private property #y the overn$ent in the eercise of its po&er of vie& in the case of Eelasco vs. 2anila Ilectric Co., et al., %(19B90, ece$#er 79, 19!1.
ST. A/L )IRE #ARINE INS/RANCE CO. %s. #ACONDRA: CO., INC. &G'R' No' L(.66,7- :ar/ .0< %,675
A>T">)", J:
Pag# $ 10
Obligations and Contrats! "otrin#s and Cas# "ig#sts
EA%))TL " %)2)TAT)"> " CA44)I4S %)AK)%)TL. O The li$itation of the carriers lia#ility is sanctioned #y the freedo$ of the contracting parties to esta#lished such stipulations, clauses, ter$s, or conditions as they $ay dee$ convenient, provide they are not contrary to la&, $orals, good custo$s and pu#lic policy. A stipulation fiing or li$iting the su$ that $ay #e recovered fro$ the carrier on the loss or deterioration of the goods is valid provide it is +areasona#le and /ust under the circu$stances, and +#- has #een fairly and freely agreed upon. 0II. )OR#S O) A:#ENT &. ALICATION O) A:#ENT * ARTS. &-+- TO &-+5 REARATIONS CO##ISSION %s. /NI0ERSAL DEE'SEA )IS7ING CORORATION &G'R' Nos' L(.%,*% and L(.%,,7- 23n# .6< %,6+5
C">CI5T)">, J: "K%)AT)">S A> C">T4ACTS A55%)CAK)%)TL " A4T)C%IS 177 T" 17= " T3I >I? C)E)% C"I. O The rules contained in Articles 177 to 17= of the Civil Code apply to a person o&ing several de#ts of the sa$e *ind to a single creditor. They cannot #e $ade applica#le to a person &hose o#ligation as a $ere surety is #oth contingent and singular, &hich in this case is the full and faithful co$pliance &ith the ter$s of the contract of conditional purchase and sale of reparations goods. The o#ligation included the pay$ent, not only of the first install$ent in the a$ount of 5B,G=B.00, #ut also of the ten +10- e6ual yearly install$ents of 5G,9!.70 per annu$. The a$ount of 510,000.00 &as, indeed, deducted fro$ the a$ount of 5B,G=B.00, #ut then the first of the ten +10- e6ual yearly install$ents had also accrued hence, no error &as co$$itted in holding the surety co$pany to the full etent of its underta*ing. #AGDALENA ESTATES, INC. %s. RODRIG/E; &G'R' No' L(%+)%%- "##9b#r %6< %,775
4IA%A, J: "K%)AT)">S A55%)CAT)"> " 5AL2I>T A4TS. 177 A> 17=, C)E)% C"I, )>TI454ITI A4T. 17B, C.C., 2I4I%L )4ICT"4L A> >"T 2A>AT"4L. O The rules contained in Arts. 177 and 17= of the Civil Code applies to a person o&ing several de#ts of the sa$e *ind of a single creditor. They cannot #e $ade applica#le to a person &hose o#ligation as a $ere surety is #oth contingent and singular his lia#ility is confined to such o#ligation, and he is entitled to have all pay$ents $ade applied eclusively to said application and to no other. Kesides Art. 17B of the Civil Code is $erely directory, and not $andatory T7E BAC7RAC7 GARAGE AND TAICAB CO. >INC.1 %s. 0ICENTE GOLINGCO &G'R' No' %167%- 23l4 %.< %,%,5 Pag# $ 17
Obligations and Contrats! "otrin#s and Cas# "ig#sts
AEA>CIA, J.: 5AL2I>T )25@TAT)">. O 3e &ho o&es several de#ts of the sa$e *ind to a single creditor $ay declare, at the ti$e of $a*ing a pay$ent, to &hich of the$ it is to #e applied. +Article 11!7 Civil Code.- )f, in $a*ing use of this right, the defendant applied the pay$ent of 5!,000 to a de#t, he cannot clai$ that it #e applied to another de#t. T7E CO##ON3EALT7 O) T7E 7ILIINES %s . T7E )AR EASTERN S/RET: INS/RANCE CO#AN: &G'R' No' L(,6,- A8ril %1< %,),5
KI><">, J: S@4ITLS3)5 S"%)A4L %)AK)%)TL A55%)CAT)"> " 5AL2I>T. OF?here in a #ond the de#tor and surety have #ound the$selves solidarily, #ut li$iting the lia#ility of the surety to a lesser a$ount than that due fro$ the principal de#tor, any such pay$ent as the latter $ay have $ade on account of such o#ligation $ust #e applied first to the unsecured portion of the de#t, for, as regards the principal de#tor, the o#ligation is $ore onerous as to the a$ount not secured.F +3ong*ong Q Shanghai Kan*ing Corporation vs. Aldanese, =8 5hil., 990.-. A:#ENT B: CESSION >ART. &-++1 0S. DATION IN A:#ENTDACION EN AGO >ART. &-5+1 A. @INDS O) A:#ENT B: CESSION B. DATION IN A:#ENT AND A:#ENT B: CESSION DISTING/IS7ED (. TENDER O) A:#ENT AND CONSIGNATION ' ARTS. &-+ TO &-& A. SECIAL RE/ISITES O) CONSIGNATION DALTON %s. )GR REALT: AND DE0ELO#ENT CORORATION &G'R' No' %6.066- 2an3ar4 %,< .*%%5
CA45)", J.: OBLIGATIONS- E=TINGUISH:ENT OF OBLIGATIONS- PAY:ENTS- FOR:S OF PAY:ENT- TEN"ER OF PAY:ENT AN" CONSIGNATION- SPECIAL RE>UISITES OF CONSIGNATION' O )n )nsular %ife Assurance Co$pany, %td. v. Toyota Kel(Air, )nc. , the Court
enu$erated the re6uisites of a valid consignation: +1- a de#t due +7- the creditor to &ho$ tender of pay$ent &as $ade refused &ithout /ust cause to accept the pay$ent, or the creditor &as a#sent, un*no&n or incapacitated, or several persons clai$ed the sa$e right to collect, or the title of the o#ligation &as lost +B- the person interested in the perfor$ance of the o#ligation &as given notice #efore consignation &as $ade +=- the a$ount &as placed at the disposal of the Pag# $ 16
Obligations and Contrats! "otrin#s and Cas# "ig#sts
court and +- the person interested in the perfor$ance of the o#ligation &as given notice after the consignation &as $ade. B. 37EN TENDER NOT NECESSAR: * -ND ARAGRA7 O) ART. &-+ C. LOSS O) T7E T7ING D/E * ARTS. &-- TO &-9 I. DE)INITION * ART. &&49 >-1 II. LOSS IN OBLIGATION TO DO * ART. &- III. T7EOR: O) I#RE0ISIBILIT: >)R/STRATION O) ENTERRISE1 * ART. &-2 OCCEFA %s. JABSON &G'R' No' L())1),- Otob#r .,< %,675
TII3A>RII, J: OBLIGATIONS- E=TINGUISH:ENT OF OBLIGATIONS- LOSS OF THE THING "UETHEORY OF I:REVISIBILITY' O ?hile respondent court correctly cited in its decision the
Code Co$$issions report giving the rationale for Article 17G! of the Civil Code, to &it: FThe general rule is that i$possi#ility of perfor$ance releases the o#ligor. 3o&ever, it is su#$itted that &hen the service has #eco$e so difficult as to #e $anifestly #eyond the conte$plation of the parties, the court should #e authoried to release the o#ligor in &hole or in part. The intention of the parties should govern and if it appears that the service turns out to #e so difficult as have #een #eyond their conte$plation, it &ould #e doing violence to that intention to hold the o#ligor still responsi#le. . . .,F it $isapplied the sa$e to respondents co$plaint. I0. 37O BEARS T7E RIS@ O) LOSS * ARTS. &--, &-9, &&49 &. SEE ALSO ARTS. &+65, &++, &2&2 AND &&9& D. CONDONATION OR RE#ISSION O) DEBT * ARTS. &-26 TO &-25 E. CON)/SION OR #ERGER * ARTS. &-2+ TO &-22 ). CO#ENSATION * ARTS. &-24 TO &-96 I. @INDS O) CO#ENSATION II. RE/ISITES )OR LEGAL CO#ENSATION * ART. &-29 III. 37EN CO#ENSATION NOT ROER * ART. &-42 AND &-44 )RANCIA %s. INTER#EDIATE AELLATE CO/RT &G'R' No' 767),- 23n# .+< %,++5
@)TI44I<, J4 OBLIGATIONS- E=TINGUISH:ENT OF OBLIGATIONS- CO:PENSATION- WHEN CO:PENSATION NOT PROPER' O ?e have consistently ruled that there can #e no off(setting
of taes against the clai$s that the tapayer $ay have against the govern$ent. A person cannot Pag# $ 1+
Obligations and Contrats! "otrin#s and Cas# "ig#sts
refuse to pay a ta on the ground that the govern$ent o&es hi$ an a$ount e6ual to or greater than the ta #eing collected. The collection of a ta cannot a&ait the results of a la&suit against the govern$ent. G. NO0ATION * ARTS. &-9& TO &(65 I. @INDS? ETINCTI0E AND #ODI)ICATOR: &. ETINCTI0E A. RE/ISITES O) ETINCTI0E NO0ATION B. S/BSTIT/TION O) DEBTORS * ARTS. &-9( AND &-9+ C. ERO#ISSION * ART. &-95 D. DELEGACION * ART. &-9+ E. S/BROGATION * ART. &(66 TO &(65 I. LEGAL * ART. &(6II. CON0ENTIONAL * ART. &(6& -. #ODI)ICATOR:
:O/NG %. CA &G'R' No' 6,0%+ 2an3ar4 %1< %,+,5 OBLIGATIONS- E=TINGUISH:ENT OF OBLIGATIONS- NOVATION- :O"IFICATORYSTIPULATION POR ATRUI O The stipulation that young gave $ay #e a stipulation pour
autrui #ut it is unre#utted that she did not co$$unicate her acceptance &hether epressly or i$pliedly. The re6uisites of a stipulation pour autrui or a stipulation in favor of a third person are the follo&ing: +1- there $ust #e a stipulation in favor of a third person +7- the stipulation $ust #e a part, not the &hole of the contract +B- the contracting parties $ust have clearly and deli#erately conferred a favor upon a third person, not a $ere incidental #enefit or interest +=the third person $ust have co$$unicated his acceptance to the o#ligor #efore its revocation. +neither of the contracting parties #ears the legal representation or authoriation of the third party. The argu$ent is pointless, considering that the sale of su#/ect property to so$e other person or entity constitutes in effect a revocation of the grant of the right of first refusal to 4e#ecca C. Loung. 7ERNANDE;'NIE0ERA%s . 7ERNANDE; &G'R' No' %6%%70- F#br3ar4 %)< .*%%5
5I4A%TA, J: OBLIGATIONS- E=TINGUISH:ENT OF OBLIGATIONS- NOVATION- :O"IFICATORY O
e$etrio as attorney(in(fact, have agreed to novate the ter$s of the 2"A #y etinguishing the core o#ligations of 524C on the pay$ent of option $oney. This see$s to suggest that &ith the Pag# $ 1,
Obligations and Contrats! "otrin#s and Cas# "ig#sts
eecution of the AC, 524C has already entered into the eercise of its option ecept that its o#ligation to deliver the option $oney has, #y su#se6uent agree$ent e$#odied in the AC, #een su#stituted instead #y the o#ligation to issue participation certificates in e$etrios na$e #ut &hich, li*e&ise, has not yet #een perfor$ed #y 524C. #ILLAR %s. CO/RT O) AEALS &G'R' No' L(.,,+%- A8ril 1*< %,6%5
CAST4", J: C)E)% %A? INT)>@)S32I>T " "K%)AT)">S )25%)I >"EAT)"> "IS >"T TARI 5%ACI ) T3I T?" "K%)AT)">S A4I >"T )>C"25AT)K%I. O The defense of i$plied novation re6uires clear and convincing proof of co$plete inco$pati#ility #et&een the t&o o#ligations. +2agda Istates, )nc. v. 4odrigue and 4odrigue, %(18=11, ec. 1!, 19GG, 18 SC4A 9G!.- The la& re6uires no specific for$ for an effective novation #y i$plication. The test is &hether the t&o o#ligations can stand together. )f they cannot, inco$pati#ility arises, and the second o#ligation novates the first. )f they can stand together, no inco$pati#ility results and novation does not ta*e place. #ACONDRA: CO., INC. %s . R/I; &G'R' No' ))76%- No;#9b#r .7< %,1+5
)25I4)A%, J C">T4ACTS >"EAT)">. O According to article 170B of the Civil Code o#ligations are $odified #y altering their o#/ect or principal conditions, #y su#stituting another in place of the de#tor, or #y su#rogating a third person to the rights of creditor and article 170= provides that in order that an o#ligation $ay #e etinguished #y another &hich su#stitutes it, it shall #e necessary that it #e declared epressly, or that the old and ne& o#ligations #e inco$pati#le in every respect. )n the first contract the de#tors &ere 4 and K and they &ere ans&era#le /ointly and severally for the su$ of 5B,7!0. )n the second contract the de#tors &ere the sa$e 4 and I. C. and the a$ount for &hich they &ere lia#le &as only 57,7=G.18. )n the latter contract the dates of $aturity of the o#ligations &ere changed due to the lapse of ti$e and to the partial pay$ents $ade #y the for$er de#tors. These facts sho& at a glance that the first contract &as in its ter$s su#stituted #y the second, and that the latter &as inco$pati#le &ith the for$er.
INC7A/STI CO. %s. :/LO, &G'R' No' 66.%- :ar/ .0< %,%)5
A44I%%A>". J:
Pag# $ )*
Obligations and Contrats! "otrin#s and Cas# "ig#sts
CONTRACT- NOVATION- :O"IFICATORY' O e$etrio as attorney(in(fact, have agreed to
novate the ter$s of the 2"A #y etinguishing the core o#ligations of 524C on the pay$ent of option $oney. This see$s to suggest that &ith the eecution of the AC, 524C has already entered into the eercise of its option ecept that its o#ligation to deliver the option $oney has, #y su#se6uent agree$ent e$#odied in the AC, #een su#stituted instead #y the o#ligation to issue participation certificates in e$etrios na$e #ut &hich, li*e&ise, has not yet #een perfor$ed #y 524C. @ABAN@ALAN S/GAR CO., INC. %s. AC7ECO &G'R' No' 1170)' "##9b#r .,< %,1*'5
E)%%A(4IA%, J: C">T4ACT >"EAT)"> IASI2I>T " 4)3T " ?AL. O ?hen an ease$ent of right of &ay is one of the principal conditions of a contract, and the duration of said ease$ent is specified, the reduction of said period in a su#se6uent contract, &herein the sa$e o#ligation is one of the principal conditions, constitutes a novation and to that etent etinguishes the for$er contractual o#ligation. B. CONCET * ART. &&+9 C. C7ARACTERISTICS >TENETS1 O) CONTRACTS? I. A/TONO#: * ART. &(6 BANCO )ILIINO SA0INGS AND #ORTGAGE BAN@ %s. NA0ARRO &G'R' No' L()70,%' 23l4 .+< %,+6'5
2I%I>C)"(3I44I4A, J: CONTRACTS- CHARACTERISTICS- AUTONO:Y.O In Kanco ilipino Savings and
2ortgage Kan* vs. >avarro, 1 SC4A B=G +198!-, this Court disauthoried the #an* fro$ raising the interest rate on the #orro&ers loan fro$ 17P to 1!P despite an escalation clause in the loan agree$ent signed #y the de#tors authoriing Kanco ilipino Fto correspondingly increase the interest rate stipulated in this contract &ithout advance notice to $eus in the event a la& should #e enacted increasing the la&ful rates of interest that $ay #e charged on this particular *ind of loan.F
)LA0IO @. #ACASAET ASSOCIATES, INC %s. CO##ISSION ON A/DIT Pag# $ )%
Obligations and Contrats! "otrin#s and Cas# "ig#sts
&G'R' No' +16)+- :a4 %.< %,+,'5
2I%I>C)"(3I44I4A, J: C)E)% %A? C">T4ACTS )>TI454ITAT)"> " C">T4ACTS %)TI4A% 2IA>)> " TI42)>"%")IS " C">T4ACT C">T4"% ?3I> T3IL A4I C%IA4. O The ter$inologies in the contract #eing clear, leaving no dou#t as to the intention of the contracting parties, their literal $eaning control +Article 1B!0, Civil Code-. "K%)AT)">S 3AEI "4CI " %A? KIT?II> C">T4ACT)> 5A4T)IS A> S3"@% KI C"25%)I ?)T3 )> "" A)T3 ?3I> A4)S)> 4"2 C">T4ACT. O The price escalation cost $ust #e dee$ed included in the final actual pro/ect cost and petitioner held entitled to the pay$ent of its additional professional fees. "#ligations arising fro$ contract have the force of la& #et&een the contracting parties and should #e co$plied &ith in good faith +Article 119, Civil Code-. 7ILIINE NATIONAL BAN@ %s. CO/RT O) AEALS &G'R' No' ++++*' A8ril 1*< %,,%'5
4)>"(A'@)>", J: C">T4ACTS C3A4ACTI4)ST)CS 2@T@A%)TL.O Kesides violating 5.. 11G, the unilateral action of the 5>K in increasing the interest rate on the private respondents loan, violated the $utuality of contracts ordained in Article 1B08 of the Civil Code: FA4T. 1B08. The contract $ust #ind #oth contracting parties its validity or co$pliance cannot #e left to the &ill of one of the$.F RE/BLIC O) T7E 7ILIINES %s. 7ILIINE LONG DISTANCE TELE7ONE CO#AN: &G'R' No' L(%++)%' 2an3ar4 .6< %,7,'5
4ILIS, J.K.% C)E)% %A? C">T4ACTS 4II"2 T" ST)5@%ATI TI42S A> C">)T)">S 5A4T)IS CA> >"T KI C"I4CI. O 5arties cannot #e coerced to enter into a contract &here no agree$ent is had #et&een the$ as to the principal ter$s and conditions of the contract. reedo$ to stipulate such ter$s and condition is of the essence of our contractual syste$, and #y epress provision of the statute, a contract $ay #e annulled if tainted #y violence, inti$idation or undue influence +Articles 1B0G, 1BBG, 1BB!, Civil Code of the 5hilippines-.
Pag# $ ).
Obligations and Contrats! "otrin#s and Cas# "ig#sts
LITA ENTERRISES, INC %s. SECOND CI0IL CASES DI0ISION, INTER#EDIATE AELLATE CO/RT &G'R' No' 7)7,1- A8ril .6< %,+)'5
ISC"%)>, J "K%)C">: 5@K%)C 5"%)CL. O Although not outrightly penalied as a cri$inal offense, the F*a#it syste$F is invaria#ly recognied as #eing contrary to pu#lic policy and, therefore, void and ineistent under Article 1=09 of the Civil Code. )t is a funda$ental principle that the court &ill not aid either party to enforce an illegal contract, #ut &ill leave the$ #oth &here it finds the$. @pon this pre$ise, it &as flagrant error on the part of #oth the trial and appellate courts to have accorded the parties relief fro$ their predica$ent. Article 1=17 of the Civil Code denies the$ such aid. C)E)% %A? "K%)AT)">S A> C">T4ACTS E") C">T4ACTS, CA>>"T KI C@4I KL 4AT))CAT)"> "4 54ISC4)5T)">. O The defect of ineistence of a contract is per$anent and incura#le, and cannot #e cured #y ratification or #y prescription. As this Court said in Iugenio vs. 5erdido, 9! 5hil. =1, Fthe $ere lapse of ti$e cannot give efficacy to contracts that are null and void.F C/I %s. ARELLANO /NI0ERSIT: &G'R' No' L(%0%.6- :a4 1*< %,7%'5
C">CI5C)">, J: C">T4ACTS ST@I>TS A> I@CAT)">A% )>ST)T@T)">S SC3"%A4S3)5S ST)5@%AT)"> ?3I4IKL ST@I>T CA>>"T T4A>SI4 T" A>"T3I4 SC3""% ?)T3"@T 4I@>)> SC3"%A4S3)5 CAS3 >@%% A> E"). O The stipulation in a contract, #et&een a student and the school, that the students scholarship is good only if he continues in the sa$e school, and that he &aives his right to transfer to another school &ithout refunding the e6uivalent of his scholarship in cash, is contrary to pu#lic policy and, hence, null and void, #ecause scholarships are a&arded in recognition of $erit and to help gifted students in &ho$ society has an esta#lished interest or a first lien, and not to *eep outstanding students in school to #olster its prestige and increase its #usiness potential.
NON %s. DA#ES &G'R' No' +,1%6' :a4 .*< %,,*'5 Pag# $ )1
Obligations and Contrats! "otrin#s and Cas# "ig#sts
C"4TI<, J: CONTRACTS- CHARACTERISTICS- AUTONO:Y- CONTRACT FOR PUBLIC POLICY' ?
The Supre$e Court ruled that the trial court cannot anchor the Ter$ination of ContractD theory the contract #et&een the school and the student is not an ordinary contract. )t is i$#ued &ith pu#lic interest, considering the high priority given #y the Constitution to education and the grant to the State of supervisory and regulatory po&ers over all educational institutions. )t is intended $erely to protect schools &herein tuition fees are collected and paid on install$ent #asis. )t cannot #e construed to $ean that a student shall #e enrolled for only one se$ester. CAITOL #EDICAL CENTER, INC %s. CO/RT O) AEALS &G'R' No' +.),,' Otob#r %1< %,+,'5
4)"(A'@)>", J: C">T4ACT I>4"%%2I>T "4 A SI2ISTI4 C">T4ACT ?)T3 T3I SC3""% II2I "4 T3I 5I4)" I>4"%%I A> 5A) "4. O The contract #et&een the college and a student &ho is enrolled and pays the fees for a se$ester, is for the entire se$ester only, not for the entire course. The la& does not re6uire a school to see a student through to the co$pletion of his course. )f the school closes or is closed #y proper authority at the end of a se$ester, the student has no cause of action for #reach of contract against the school. Thus did this Court rule in FAlcua, et al. vs. 5hilippine School of Kusiness Ad$inistration, 'ueon City Kranch, et al.,F .4. >o. !GBB, pro$ulgated on 2ay 7, 1988. I>4"%%2I>T )> C"%%II, >"T A> "K%)AT)"> "4 T3I %ATTI4 T" 4I2A)> "5I> T)%% T3I ST@I>T C"25%ITIS T3I C"@4SI. O ?e, therefore, hold that the lo&er court gravely a#used its discretion in co$pelling the C2CC to reopen and re(ad$it the stri*ing students for enroll$ent in the second se$ester of their courses. Since their contracts &ith the school &ere ter$inated at the end of the first se$ester of 198!, and as the school has already ceased to operate, they have no Fclear legal rightF to reenroll and the school has no legal o#ligation to reopen and read$it the$. >o provision in the Iducation Act of 1987, nor in the 2anual of 4egulations for 5rivate Schools can #e, or has #een, cited to support the novel vie& that a school is o#ligated to re$ain open until its students have co$pleted their courses therein. )ndeed, neither is there a la& or rule that o#ligates a student &ho has enrolled in a school, to re$ain there until he finishes his course. "n the contrary he $ay transfer at any ti$e to any school that is &illing to accept. II. CONSENS/ALIT: * ARTS. &(6+ AND &(&+8 SEE ALSO ART. 554 III. #/T/ALIT: * ART. &(64 Pag# $ ))
Obligations and Contrats! "otrin#s and Cas# "ig#sts
7ILIINE NATIONAL BAN@ , etitioner, %s. T7E 7ON. CO/RT O) AEALS an" A#BROSIO ADILLA, reson"ents. &G'R' No' ++++*' A8ril 1*< %,,%'5
4)>"(A'@)>", J: @>)%ATI4A% ACT)"> T" )>C4IASI )>TI4IST 4ATIS, A E)"%AT)"> " A4T)C%I 1B08 " C)E)% C"I. O Kesides violating 5.. 11G, the unilateral action of the 5>K in increasing the interest rate on the private respondents loan, violated the $utuality of contracts ordained in Article 1B08 of the Civil Code: FA4T. 1B08. The contract $ust #ind #oth contracting parties its validity or co$pliance cannot #e left to the &ill of one of the$.F S@CCISS)EI )>C4IASI " )>TI4IST 4ATIS, A E)"%AT)"> " A4T)C%I 19G " C)E)% C"I. O 5>Ks successive increases of the interest rate on the private respondents loan, over the latters protest, &ere ar#itrary as they violated an epress provision of the Credit Agree$ent +Ih. 1- Section 9.01 that its ter$s F$ay #e a$ended only #y an instru$ent in &riting signed #y the party to #e #ound as #urdened #y such a$end$ent.F The increases i$posed #y 5>K also contravene Art. 19G of the Civil Code &hich provides that Fno interest shall #e due unless it has #een epressly stipulated in &riting.F 0ICENTE SINGSON ENCARNACION, LAINTI))'AELLEE, 0S . JACINTA BALDO#AR, ET AL., DE)ENDANTS'AELLANTS. &G'R' No' L(.7)' Otob#r )< %,)7'5
3)A%". J: "K%)AT)">S A> C">T4ACTS %IASI EA%))TL A> @%)%%2I>T CA>>"T KI %IT T" INC%@S)EI ?)%% " %ISSII. O The continuance and fulfill$ent of the contract of lease cannot #e $ade to depend solely and eclusively upon the free and uncontrolled choice of the lessees #et&een continuing paying the rentals or not, co$pletely depriving the o&ner of all say in the $atter. or if this &ere allo&ed, so long as defendants elected to continue the lease #y continuing the pay$ent of the rentals, the o&ner &ould never #e a#le to discontinue it conversely, although the o&ner should desire the lease to continue, the lessees could effectively th&art his purpose if they should prefer to ter$inate the contract #y the si$ple epedient of stopping pay$ent of the rentals. This, of course, is prohi#ited #y article 17G of the Civil Code. I0. 0.
OBLIGATORINESS * ART. &&+, &(&+ AND &(& RELATI0IT: * ART. &(&& TO &(&5 &. STI/LATION O/R ATR/I * -ND ARAGRAG7 O) ART. &(&& A. RE/ISITES CO/IA %s. )IELD#ENS INS/RANCE CO., &G'R' No' L(.1.67< No;#9b#r .,< %,7+5 Pag# $ )0
Obligations and Contrats! "otrin#s and Cas# "ig#sts
C">CI5C)">, C.J.: )f a contract should contain so$e stipulation in favor of a third person, he $ay de$and its fulfill$ent provided he co$$unicated his acceptance to the o#ligor #efore its revocation. A $ere incidental #enefit or interest of a person is not sufficient. The contracting parties $ust have clearly and deli#erately conferred a favor upon a third person. @A/))#AN %s. NATIONAL BAN@ &G'R' No' %7)0)< S#8t#9b#r .,< %,.%5
ST4IIT, J.: F)n applying this test to a stipulation pour autrui, it $atters not &hether the stipulation is in the nature of a gift or &hether there is an o#ligation o&ing fro$ the pro$ise to the third person. That no such o#ligation eists $ay in so$e degree assist in deter$ining &hether the parties intended to #enefit a third person, &hether they stipulated for hi$.F :O/NG %s. CA &G'R' No' 6,0%+ 2an3ar4 %1< %,+,5
5A4AS, J.: The re6uisites of a stipulation pour autrui or a stipulation in favor of a third person are the follo&ing: +1- there $ust #e a stipulation in favor of a third person. +7- the stipulation $ust #e a part, not the &hole of the contract. +B- the contracting parties $ust have clearly and deli#erately conferred a favor upon a third person, not a $ere incidental #enefit or interest. +=- the third person $ust have co$$unicated his acceptance to the o#ligor #efore its revocation. +- neither of the contracting parties #ears the legal representation or authoriation of the third party. D. STAGES O) CONTRACTS? >NEGOTIATION, ER)ECTION, CONS/##ATION1 ANG :/ %. CA &G'R' No' %*,%.0- "##9b#r .< %,,)5
E)T@, J.: An o#ligation is a /uridical necessity to give, to do or not to do +Art. 11G, Civil Code-. The o#ligation is constituted upon the concurrence of the essential ele$ents thereof, vi: +a- The vinculu$ /uris or /uridical tie &hich is the efficient cause esta#lished #y the various sources of Pag# $ )7
Obligations and Contrats! "otrin#s and Cas# "ig#sts
o#ligations +la&, contracts, 6uasi(contracts, delicts and 6uasi(delicts- +#- the o#/ect &hich is the prestation or conduct re6uired to #e o#served +to give, to do or not to do- and +c- the su#/ect( persons &ho, vie&ed fro$ the de$anda#ility of the o#ligation, are the active +o#ligee- and the passive +o#ligor- su#/ects. i.
NEGOTIATION' ARTICLE &(&9 TO &(- &. ART. &(-5 0S. ART. &529 -. Cases? SO/T7 3ESTERN S/GAR %s. ATLANTIC G/L) &G'R' No' L(61+.< 23n# .,< %,005
KA@T)STA A>I%", J.: )t is true that under article 1B7= of the ne& Civil Code, the general rule regarding offer and acceptance is that, &hen the offerer gives to the offeree a certain period to accept, Fthe offer $ay #e &ithdra&n at any ti$e #efore acceptanceF ecept &hen the option is founded upon consideration, #ut this general rule $ust #e interpreted as $odified #y the provision of article 1=!9 a#ove referred to, &hich applies to Fa pro$ise to #uy and sellF specifically. As already stated, this rule re6uires that a pro$ise to sell to #e valid $ust #e supported #y a consideration distinct fro$ the price. AT@INS @ROLL AND CO., INC. %s. C/A 7IAN TE@ &G'R' No' L(,+6%< 2an3ar4 1%< %,0+5
KI><">, J.: urther$ore, an option is unilateral: a pro$ise to sell at the price fied &henever the offeree should decide to eercise his option &ithin the specified ti$e. After accepting the pro$ise and #efore he eercises his option, the holder of the option is not #ound to #uy. 3e is free either to #uy or not to later. )n this case, ho&ever, upon accepeting herein petitioners offer a #ilateral pro$ise to sell and to #uy ensued, and the respondent ipso facto assu$ed the o#ligations of a purchaser. 3e did not /ust get the right su#se6uently to #uy or not to #uy. )t &as not a $ere option then it &as #ilalteral contract of sale.
SANC7E; 0S. RIGOS &G'R' No' L(.0),) 23n# %)< %,6.5
C">CI5C)">, C.J.: Pag# $ )6
Obligations and Contrats! "otrin#s and Cas# "ig#sts
This vie& has the advantage of avoiding a conflict #et&een Articles 1B7= O on the general principles on contracts O and 1=!9 O on sales O of the Civil Code, in line &ith the cardinal rule of statutory construction that, in construing different provisions of one and the sa$e la& or code, such interpretation should #e favored as &ill reconcile or har$onie said provisions and avoid a conflict #et&een the sa$e. )ndeed, the presu$ption is that, in the process of drafting the Code, its author has $aintained a consistent philosophy or position. R/RAL BAN@ O) ARANA/E %s. RE#OLADO &G'R' No' L(7.*0% :ar/ %+< %,+05
A'@)>", J.: Courts operate not #ecause one person has #een defeated or overco$e #y another, #ut #ecause he has #een defeated or overco$e illegally. 2en $ay do foolish things, $a*e ridiculous contracts, use $isera#le /udg$ent, and lose $oney #y the$(indeed, all they have in the &orld #ut not for that alone can the la& intervene and restore. There $ust #e, in addition, a violation of la&, the co$$ission of &hat the la& *no&s as an actiona#le &rong #efore the courts are authoried to lay hold of the situation and re$edy it. #ONTILLA %s. CA &G'R' No' L()6,7+' :a4 ,< %,++5
>A4EASA, J.: The action is also dis$issi#le upon another legal ground. Assu$ing arguendo verita#ility of the oral pro$ise to sell #y 2ontilla, the pro$ise &as nevertheless not #inding upon her in vie& of the a#sence of any consideration therefor distinct fro$ the stipulated price. This is the principle laid do&n #y the second paragraph of Article 1=!9: FAn accepted unilateral pro$ise to .. sell a deter$inate thing for a price certain is #inding upon the pro$issor if the pro$ise is supported #y a consideration distinct fro$ the price.F NATINO %s. IAC G'R' No' 61061 :a4 .1< %,,%
AE)I, J4., J.: The second paragraph of Article 1=!9 of the Civil Code epressly provides: An accepted unilateral. pro$ise to #uy or to sell a deter$inate thing for a price certain is #inding upon the pro$issory if the pro$ise is supported #y a consideration distinct fro$ the price. :AO @A SIN TRADING %s. CA &G'R' No' L(01+.* 23n# %0< %,,.5 Pag# $ )+
Obligations and Contrats! "otrin#s and Cas# "ig#sts
AE)I, J4., J.: Since a corporation, such as the private respondent, can act only through its officers and agents, Fall acts &ithin the po&ers of said corporation $ay #e perfor$ed #y agents of its selection and, ecept so far as li$itations or restrictions $ay #e i$posed #y special charter, #y(la&, or statutory provisions, the sa$e general principles of la& &hich govern the relation of agency for a natural person govern the officer or agent of a corporation, of &hatever status or ran*, in respect to his po&er to act for the corporation and agents &hen once appointed, or $e$#ers acting in their stead, are su#/ect to the sa$e rules, lia#ilities and incapacities as are agents of individuals and private persons.F DIA#ANTE 0S. CA &G'R' No' L(0%+.) F#br3ar4 6< %,,.5
AE)I, J4., J.: The right of repurchase is not a right granted the vendor #y the vendee in a su#se6uent instru$ent, #ut is a right reserved #y the vendor in the sa$e instru$ent of sale as one of the stipulations of the contract. "nce the instru$ent of a#solute sale is eecuted, the vendor can no longer reserve the right to repurchase, and any right thereafter granted the vendor #y the vendee in a separate instru$ent cannot #e a right of repurchase #ut so$e other right li*e the option to #uy in the instant case. 1' EARNEST #ONE: >ART. &54-1 %s. OTION #ONE: >ART. &5291 II'
&. -. (. 5. +. .
ER)ECTION * ART. &(&+, &(&, AND &(&9>-ND ARAGRA718 SEE ALSO ART. +5 O) T7E CODE O) CO##ERCE ESSENTIAL RE/ISITES O) A 0ALID CONTRACT 37O ARE INCAACITATED TO GI0E CONSENT LAC@ O) CAACIT: >ART. &(-21 %s. 3ANT O) CAACIT:>ART. &56(1 %s. DIS/ALI)ICATION >ART. 9 O) T7E )A#IL: CODE1 T7EOR: O) GENERAL CAACITIES %s. T7EOR: O) SECIAL CAACITIES 0ICES O) CONSENT SI#/LATION O) CONTRACTS A. OBJECT * ART. &(25 B. CA/SE * ART. &(+6 C. CASES? LIG/E; %s. 7ON. CA &G'R' No' L(%%.)*- "##9b#r %+< %,065
4ILIS, J.K.%., J.: Pag# $ ),
Obligations and Contrats! "otrin#s and Cas# "ig#sts
To deter$ine the pre/udice to the &ido&, it $ust #e sho&n that the value of her share in the property donated cannot #e paid out of the hus#ands share of the co$$unity profits. The re6uisite data, ho&ever, are not availa#le to us and necessitate a re$and of the records to the court of origin that settled the estate of the late Salvador 5. %ope. ONG %s. ONG &G'R' No' L(76+++- Otob#r +< %,+05
4I%"EA, J.: The eecution of a deed purporting to convey o&nership of a realty is in itself pri$a facie evidence of the eistence of a valua#le consideration, the party alleging lac* of consideration has the #urden of proving such allegation. BAGNAS %s. CA &G'R' No' L(1+),+- A3g3st %*< %,+,5
>A4EASA, J.: ?ithout necessarily according all these assertions its full concurrence, #ut upon the consideration alone that the apparent gross, not to say enor$ous, disproportion #et&een the stipulated price +in each deed- of 5 l.00 plus unspecified and un6uantified services and the undisputa#ly valua#le real estate allegedly sold &orth at least 510,00.00 going only #y assess$ents for ta purposes &hich, it is &ell(*no&n, are notoriously lo& indicators of actual value plainly and un6uestiona#ly de$onstrates that they state a false and fictitious consideration, and no other true and la&ful cause having #een sho&n, the Court finds #oth said deeds, insofar as they purport to #e sales, not $erely voida#le, #ut void a# initio. E. )OR#S O) CONTRACTS * ARTS. &(+ TO &(+4 I. )OR 0ALIDIT: &. IN 3RITING A. DONATION * ART. 254 B. CO##ON CARRIERS LIABILIT: * ART. &255 C. AGENTS A/T7ORIT: * ART. &425 D. INTEREST ON LOAN * ART. &9+ E. ANTIC7RESIS * ART. -&(5 -. IN /BLIC INSTR/#ENTS A. DONATION * ART. 259 B. ARTNERS7I * ART. &22& AND &22( II. )OR EN)ORCEABILIT: Pag# $ 0*
Obligations and Contrats! "otrin#s and Cas# "ig#sts
&. STAT/TE O) )RA/D * ART. &56( III. )OR CON0ENIENCE &. TO A))ECT T7IRD ERSON * ART. &(+4 ). RE)OR#ATION O) INSTR/#ENTS * ARTS. &(+9 TO &(9 CABANAT/AN %s. LA;ARO &G'R' No' L(.,.07 23n# 1*< %,6%5
4ILIS, J.: Ivery party to a contract has a clear interest that the instru$ent #odying its ter$s should confor$ to the actual and true agree$ent had #y and #et&een the contracting parties. 3ence, if #y accident or $ista*e, as epressly pleaded in the co$plaint, the docu$ent does not confor$ to or reflect the actual agree$ent, either party can as* for the refor$ation of the instru$ent as provided #y Articles 1B9, et se6. +Chapter =, Title 7, Koo* =- of the Civil Code of the 5hilippines, to forestall future litigations on the true i$port of the agree$ent. COSIO %s. ALILEO &G'R' No' L(%+)0.- :a4 1%< %,705
4IA%A, J.: )n refor$ing instru$ents, courts do not $a*e another contract for the parties +See Civil Code, Arts. 1B9(1BG9 and the 4eport of the Code Co$$ission, p. G-. They $erely in6uire into the intention of the parties and, having found it, refor$ the &ritten instru$ent +not the contract- in order that it $ay epress the real intention of the parties +See )d., Arts. 1BG and 1G07-. G. INTERRETATION O) CONTRACTS * ARTS. &(26 TO &(29 GSIS %s. CA &G'R' No' L(0.)6+ Otob#r 1*< %,+75
5A4AS, J.: )t is a #asic and funda$ental rule in the interpretation of contract that if the ter$s thereof are clear and leave no dou#t as to the intention of the contracting parties, the literal $eaning of the stipulations shall control #ut &hen the &ords appear contrary to the evident intention of the parties, the latter shall prevail over, the for$er. )n order to /udge the intention of the parties, their conte$poraneous and su#se6uent acts shall #e principally considered. /NI0ERSIT: O) T7E 7ILIINES %s. Ga
Obligations and Contrats! "otrin#s and Cas# "ig#sts
&G'R' No' 6*+.7- Otob#r %.< %,+65
@T)I44I<, J4., J.: Act B99 &as intended for private persons, co$panies, fir$s, or corporations using the services of contractors &ho $ay e$ploy their o&n carpenters, $asons, and la#orers or hire su#( contractors. This is $ade even $ore evident #y the fact that 5residential ecree >o. ==7. The %a#or Code of the 5hilippines, Articles 10G to 109 and its 4ules and 4egulations, 4ule E))), Sections !(9, have superseded Act B99. The %a#or Code does not cover govern$ent e$ploy$ent. BA: 0IE3 7OTEL, INC., 0S. @ER AND CO., LTD &G'R' No' L(.+.16- A3g3st 1%< %,+.5
TII3A>RII, J.: Ad$ission is in the nature of evidence and its legal effects &ere already part of the records of the case and therefore could #e availed of #y any party even #y one su#se6uently i$pleaded. The a$end$ent of the co$plaint per se cannot set aside the legal effects of the re6uest for ad$ission since its $ateriality has not #een affected #y the a$end$ent. )f a fact is ad$itted to #e true at any stage of the proceedings, it is not stric*en out through the a$end$ent of the co$plaint. To allo& a party to alter the legal effects of the re6uest for ad$ission #y the $ere a$end$ent of a pleading &ould constitute a dangerous and undesira#le precedent. ANGELES %s. CALASAN; &G'R' No' L()..+1- :ar/ %+< %,+05
@T)I44I<, J4., J.: Article 1191 is eplicit. )n reciprocal o#ligations, either party the right to rescind the contract upon the failure of the other to perfor$ the o#ligation assu$ed thereunder. 2oreover, there is nothing in the la& that prohi#its the parties fro$ entering into an agree$ent that violation of the ter$s of the contract &ould cause its cancellation even &ithout court intervention LABASAN %s. LAC/ESTA &G'R' No' L(.0,1%- Otob#r 1*< %,6+5
2@"< 5A%2A, J.: Article 1G07 paragraph 1 of the >e& Civil Code epressly provides that in case of dou#t a contract purporting to #e a sale &ith a right to repurchase shall #e construed as an e6uita#le $ortgage &hen the price or consideration of the sale is unusually inade6uate. Pag# $ 0.
Obligations and Contrats! "otrin#s and Cas# "ig#sts
S: 0S. CA &G'R' No' L(1,+01- A3g3st %6< %,+15
2I%I>C)"(3I44I4A, J.: As provided for #y Article 777! of the Civil Code, ho&ever, %i6uidated da$ages, &hether intended as an inde$nity or a penalty, shall #e e6uita#ly reduced if they are ine6uitous or unconsciona#le. 7. DE)ECTI0E CONTRACTS I. RESCISSIBLE CONTRACTS &. ART. &(46 >RESCISSION1 0S. ART. &&9& >RESOL/TION1 -. ARTS. &(4&, &(4-, &694, &&49, &+-, &+(5, &+(9, &+5-, &++, &+6, &+2 AND &+9 II. 0OIDABLE CONTRACTS * ART. &(96 &. #ODES TO ETING/IS7 AN ACTION )OR ANN/L#ENT III. /NEN)ORCEABLE CONTRACTS * ART. &56( ORD/NA %s. )/ENTEBELLA &G'R' No' %67+)%- 23n# .,< .*%*5
EI%ASC", J4., J.: The Statute of rauds, in contet, provides that a contract for the sale of real property or of an interest therein shall #e unenforcea#le unless the sale or so$e note or $e$orandu$ thereof is in &riting and su#scri#ed #y the party or his agent. 3o&ever, &here the ver#al contract of sale has #een partially eecuted through the partial pay$ents $ade #y one party duly received #y the vendor, as in the present case, the contract is ta*en out of the scope of the Statute. I0. 0OID AND INEISTENT CONTRACTS * ART. &569 I. ESTOEL * ARTS. &5(& TO &5(9 I. @INDS O) ESTOELS &. ELE#ENTS II. LAC7ES 0S. RESCRITION LA/REL %s. CSC &G'R' No' 6%07.- Otob#r .+< %,,%5
AE)I, J4., J.:
Pag# $ 01
Obligations and Contrats! "otrin#s and Cas# "ig#sts
5er Article 1=B1 of the Civil Code, through estoppel an ad$ission or representation is rendered conclusive upon the person $a*ing it, and cannot #e denied or disproved as against the person relying thereon. NB %s. IAC &G'R' No' 776%0- S#8t#9b#r %+< %,,*5
4)"(A'@)>", J. The doctrine of estoppel is #ased upon the grounds of pu#lic policy, fair dealing, good faith and /ustice, and its purpose is to for#id one to spea* against its o&n act, representations, or co$$it$ents to the in/ury of one to &ho$ they &ere directed and &ho reasona#ly relied thereon. The doctrine of estoppel springs fro$ e6uita#le principles and the e6uities in the case. )t is designed to aid the la& in the ad$inistration of /ustice &here &ithout its aid in/ustice $ight result. )t has #een applied #y this Court &herever and &henever the special circu$stances of a case so de$ands. @ALALO %s. L/; &G'R' No' L(.66+.- 23l4 1%< %,6*5
2ARAS)A4, J.:
Pag# $ 0)
Obligations and Contrats! "otrin#s and Cas# "ig#sts
An estoppel #y laches arises fro$ the negligence or o$ission to assert a right &ithin a reasona#le ti$e, &arranting a presu$ption that the party entitled to assert it either has a#andoned it or declined to asset it +Ti/a$ et al. vs. Si#onghanoy, 7B SC4A 79-. )ts essence is the doctrine of estoppel, a concept derived fro$ A$erican la& that ai$s to #ring out /ustice #et&een parties, through the operation of the principle that an ad$ission or representation is rendered conclusive upon the person $a*ing it, and cannot #e denied or disproved as against the person relying thereon +4eport of the Code Co$$ission, p. 9-. ).A.T. @ee Comuter %s. Online NetHor$s &G'R' No' %6%.1+- F#br3ar4 .< .*%%5
%I">A4" I CAST4", J.: The ele$ents of estoppel are: first, the actor &ho usually $ust have *no&ledge, notice or suspicion of the true facts, co$$unicates so$ething to another in a $isleading &ay, either #y &ords, conduct or silence second, the other in fact relies, and relies reasona#ly or /ustifia#ly, upon that co$$unication third, the other &ould #e har$ed $aterially if the actor is later per$itted to assert any clai$ inconsistent &ith his earlier conduct and fourth, the actor *no&s, epects or foresees that the other &ould act upon the infor$ation given or that a reasona#le person in the actors position &ould epect or foresee such action. #AA III %s. G/AN;ON &G'R' No' L(.07*0- 23n# .*< %,665
A>T">)", J.: @nder the doctrine of res /udicata an ad/udication is final and conclusive not only as to the $atter actually deter$ined, #ut as to every other $atter &hich the parties $ight have litigated and have had decided as incident to or essentially connected &ith the su#/ect $atter of the litigation, and every $atter co$ing &ithin the legiti$ate purvie& of the original action, #oth in respect to $atters of clai$ and of defense. INS/RANCE O) T7E 7ILIINE ISLANDS COR %s. SS. GREGORIO &G'R' No' %6)%*)- F#br3ar4 %)< .*%%5
5I4A%TA, J.: The essence of laches or Fstale de$andsF is the failure or neglect for an unreasona#le and uneplained length of ti$e to do that &hich, #y eercising due diligence, could or should have #een done earlier, thus, giving rise to a presu$ption that the party entitled to assert it either has Pag# $ 00
Obligations and Contrats! "otrin#s and Cas# "ig#sts
a#andoned or declined to assert it. )t is not concerned &ith $ere lapse of ti$e the fact of delay, standing alone, #eing insufficient to constitute laches. CARAGA:'LA:NO %s. CA &G'R' No' L(0.*7)- "##9b#r .7< %,+)5
2I%I>C)"(3I44I4A, J.: The re$edy of the lando&ner &hose property has #een &rongfully or erroneously registered in anothers na$e is, after one year fro$ the date of the decree, not to set aside the decree, #ut, respecting the decree as incontroverti#le and no longer open to revie&, to #ring an ordinary action in the ordinary court of /ustice for reconveyance or, if the property has passed into the hands of an innocent purchaser for value, for da$ages.
JOSE #AR/ES AND #AILITE TEC7NOLOGIES, INC. %s. )AR EAST BAN@ AND TR/ST CO#AN: &G'R' No' %6%16,- 2an3ar4 %*< .*%%5
CA45)", J.: )n estoppel, a party creating an appearance of fact, &hich is false, is #ound #y that appearance as against another person &ho acted in good faith on it. Istoppel is #ased on pu#lic policy, fair dealing, good faith and /ustice. )ts purpose is to for#id one to spea* against his o&n act, representations, or co$$it$ents to the in/ury of one &ho reasona#ly relied thereon. )t springs fro$ e6uity, and is designed to aid the la& in the ad$inistration of /ustice &here &ithout its aid in/ustice $ight result. #ANILA LODGE NO. 2& %s. CA &G' R' No' L()%**%- S#8t#9b#r 1*< %,675
CAST4", C.J.: TC finally clai$s that the City of 2anila is estopped fro$ 6uestioning the validity of the sale it eecuted on July 1B,1911 conveying the su#/ect property to the 2anila %odge >o. !G1, K5"I. This contention cannot #e seriously defended in the light of the doctrine repeatedly enunciated #y this Court that the overn$ent is never estopped #y $ista*es or errors on the pan of its agents, and estoppel does not apply to a $unicipal corporation to validate a contract that is prohi#ited #y la& or its against 4epu#lic policy, and the sale of July 1B, 1911 eecuted #y the City of 2anila to 2anila %odge &as certainly a contract prohi#ited #y la&. 2oreover, estoppel cannot #e urged even if the City of 2anila accepted the #enefits of such contract of sale and the Pag# $ 07
Obligations and Contrats! "otrin#s and Cas# "ig#sts
2anila %odge >o. !G1 had perfor$ed its part of the agree$ent, for to apply the doctrine of estoppel against the City of 2anila in this case &ould #e tanta$ount to ena#ling it to do indirectly &hat it could not do directly. Central Ban$ %s. CA &G'R' No' L(0**1%(1.- 23l4 .6< %,+%5
C">CI5C)">, J4., J.: The #road general rule to the effect that a pro$ise to do or not to do so$ething in the future does not &or* an estoppel $ust #e 6ualified, since there are nu$erous cases in &hich an estoppel has #een predicated on pro$ises or assurances as to future contract. The doctrine of Upro$issory estoppel is #y no $eans ne&, although the na$e has #een adopted only in co$paratively recent years. According to that doctrine, an estoppel $ay arise fro$ the $a*ing of a pro$ise, even though &ithout consideration, if it &as intended that the pro$ise should #e relied upon and in fact it &as relied upon, and if a refusal to enforce it &ould #e virtually to sanction the perpetration of fraud or &ould result in other in/ustice. )n this respect, the reliance #y the pro$isee is generally evidenced #y action or for#earance on his part, and the idea has #een epressed that such action of for#earance &ould reasona#ly have #een epected #y the pro$issor. 2ere o$ission #y the pro$isee to do &hatever the pro$issor pro$ised to do has #een held insufficient Ufor#earance U to give rise to a pro$issory estoppel.
RE/BLIC %s. ALAGAD &G'R' No' L(77+*6- 2an3ar4 .7< %,+,5
SA42)I>T", J.: %a*es, ponds, and pools eisting upon the lands of private individuals, or the State or provinces, #elong to the respective o&ners of such lands, and those situated upon lands of co$$unal use #elong to their respective pue#los. Assu$ing, therefore, for purposes of this petition, that the lands su#/ect of the 4epu#lics reversion efforts are foreshore in nature, the 4epu#lic has legiti$ate reason to de$and reconveyance. )n that case, res /udicata or estoppel is no defense. NIE0A %s. #ANILA BAN@ING CORORATION Pag# $ 06
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&G'R' No' L(1*+%%- S#8t#9b#r .< %,+15
@T)I44I<, J4., J.: Considering that the petitioner had actively participated in all stages of the proceedings in the this court, #e cannot, this stage, 6uestion the courts /urisdiction. As $atter of fact, >ieva &as the one &ho proposed &hat a$ounted to a co$pro$ise agree$ent, &hich for$ed the #asis of the decision after the respondent #an* agreed to the proposal. "nly after the court had pro$ulgated the decision did >ieva have second thoughts &hich led to the $anifestation raising the issue of /urisdiction. And &hen his $anifestation denied, he did not pursue the denial and raise the $atter to an appellant tri#unal. >ieva allo&ed the decision to #eco$e final and eecutory #ANILA ELECTRIC CO#AN: %s. CA &G'R' No' L(116,)- :a4 1%< %,+.5
2I%I>C)"(3I44I4A, J.: Contracts should #e given effect as the parties construe it. FActs done #y the parties to a contract in the course of its perfor$ance are ad$issi#le in evidence upon the 6uestion of its $eaning as #eing their o&n conte$poraneous interpretation of , its ter$sF. Thus, EI%ASC" should #e held as estopped fro$ see*ing cancellation of his sale of the 54"5I4TL to 2I4A%C" #ecause the su#(station, &hile it &as #uilt, &as considered #y EI%ASC" as not violative of the re6uire$ent for Fresidential purposesF. Istoppel against EI%ASC" has set in.
BAILON'CASILAO %s. CA &G'R' No' 6+%6+- A8ril %0< %,++5
C"4TIS, J.: ?ell(stated in this /urisdiction are the four #asic ele$ents of laches, na$ely: +1- conduct on the part of the defendant or of one under &ho$ he clai$s, giving rise to the situation of &hich co$plaint is $ade and for &hich the co$plainant see*s a re$edy +7- delay in asserting the corporations co$plainants rights, the co$plainant having had *no&ledge or notice of the defendants conduct and having #een afforded an opportunity to institute suit +B- lac* of *no&ledge or notice on the part of the defendant that the co$plainant &ould assert the right on &hich he #ases his suit and, +=- in/ury or pre/udice to the defendant in the event relief is accorded to the co$plainant, or the suit is not held to #e #arred. 7eirs o Batio! La=umen %s. 7eirs o Laruan Pag# $ 0+
Obligations and Contrats! "otrin#s and Cas# "ig#sts
&G'R' No' L(.6*++ 23l4 1%< %,605
2A4T)>, J.: Clai$ of a#solute o&nership over the land cannot #e countenanced. )t has #een held that &hile a person $ay not ac6uire title to the registered property through continuous adverse possession, in derogation of the title of the original registered o&ner, the heir of the latter, ho&ever, $ay lose his right to recover #ac* the possession of such property and the title thereto, #y reason of laches. 2uch $ore should it #e in the instant case &here the possession of nearly B0 years or al$ost half a century no& is in pursuance of sale &hich regretta#ly did not #ear the approval of the eecutive authority #ut &hich the vendor never 6uestioned during his life ti$e. %aruans laches etends to his heirs, the respondents(appellants herein, since they stand in privity &ith hi$. J. TR/ST * ART. &556 TO &5+2 DEL/AO %s. CASTEEL &G'R' No' L(.%,*7- "##9b#r .)< %,7+5
CAST4", J.: )t &as the duty of Atty. 4ui, or of the other la&yers of record, not ecluding the appellant hi$self, to appear #efore Judge ernande on the scheduled dates of hearing 5arties and their la&yers have no right to presu$e that their $otions for postpone$ent &ill #e granted. or indeed, the appellant and his 17 la&yers cannot pretend ignorance of the recorded fact that since Septe$#er 7=, 19B until the trial held on 2ay 7, 19G, the case &as under the advise$ent of Judge ernande &ho presided over Kranch ). There &as, therefore, no necessity to Fre(assignF the sa$e to Kranch )) #ecause Judge ernande had eclusive control of said case, unless he &as legally inhi#ited to try the case O and he &as not. 0ALDE; %s. OLORGA &G'R' No' L(..06%- :a4 .0< %,615
2ARA%)>TA%, J.: )nsofar as the aspect of etinctive prescription referred to in this article is concerned, it is #ut a restate$ent of Article 19G of the Spanish Civil Code, &hich provides: FAs #et&een co(heirs, co( o&ners, or proprietors of ad/acent estates, the action to de$and the partition of the inheritance or of the thing held in co$$on, or the survey of the ad/acent properties, does not prescri#e.F And fro$ the standpoint of ac6uisitive prescription, or prescription of o&nership, this Court has held in nu$erous decisions involving fiduciary relations such as those occupied #y a trustee &ith respect to the cestui 6ue trust that as a general(rule the for$ers possession is not adverse and Pag# $ 0,
Obligations and Contrats! "otrin#s and Cas# "ig#sts
therefore cannot ripen into a title #y prescription. Adverse possession in such a case re6uires, the concurrence of the follo&ing(circu$stances: +a- that the trustee has perfor$ed une6uivocal acts of repudiation a$ounting to an ouster of the cestui 6ue trust +#- that such, positive acts of repudiation have #een $ade *no&n to the cestui 6ue trust and +c- that the evidence thereon should #e clear and conclusive. )ABIAN %s. )ABIAN &G'R' No' L(.*)),- 2an3ar4 .,< %,7+5
CAST4", J.: Article 1=G of the ne& Civil Code, &hile not retroactive in character, $erely epresses a rule already recognied #y our courts prior to the Codes pro$ulgation +see ayondato vs. )nsular Treasurer, =9 5hil. 7==-. Appellants are, ho&ever, in error in #elieving that li*e epress trust, such constructive trusts $ay not #e #arred #y lapse of ti$e. The A$erican la& on trusts has al&ays $aintained a distinction #et&een epress trusts created #y the intention of the parties, and the i$plied or constructive trusts that are eclusively created #y la&, the latter not #eing trusts in their technical sense +ayondato vs. )nsular Treasurer, supra-. The epress trusts disa#le the trustee fro$ ac6uiring for his o&n #enefit the property co$$itted to his $anage$ent or custody, at least &hile he does not openly repudiate the trust, and $a*es such repudiation *no&n to the #eneficiary or cestui 6ue trust. or this reason, the old Code of Civil 5rocedure +Act 190- declared that the rules on adverse possession does not apply to Fcontinuing and su#sistingF +i.e., unrepudiated- trusts. )ERRER'LOE; %s. CA &G'R' No' L(0*).*- :a4 .,< %,+65
5A4AS, J.: The doctrine of i$plied trust asserted #y petitioners finds no application in the case at #ar, #ecause there are no proven facts to this effect. ?hile an i$plied trust +of real or personal property- does not re6uire the for$alities of an epress trust over realty +&hich as $andated #y the la& cannot #e proved #y oral evidence under Art. 1==B of the Civil Code, still there $ust #e proof that the trustor &anted to grant one party only the #eneficial o&nership of a parcel of land, although said #eneficiary $ay have legal title in hi$self. )$plied trusts are ee$plified in Arts, 1==!(1=G of the Civil Code. 5rivate respondents have #een in possession of %ot. >o. 1710 as o&ners since its purchase in 19B thru their late father 4a$on 5uon. 4a$on 5uon &as the overseer of petitioners $other over another lot +%ot >o. 1709- and not over the lot in 6uestion +%ot >o. 1710-. )t is therefore o#vious that there could not have #een any possi#le conflict of interest in the role of private respondents father. And even if indeed he had #een the overseer of #oth lots, there &as also no such conflict of interest. Koth lots had their o&n $ar*ed Pag# $ 7*
Obligations and Contrats! "otrin#s and Cas# "ig#sts
and natural #oundaries #oth had their o&n separate registered titles of o&nership do$inion over each &as eercised #y t&o separate groups of o&ners. #ORALES %s. CA &G'R' No' %%6..+- 23n# %,< %,,65
AE)I, J4., J.: A trust is the legal relationship #et&een one person having an e6uita#le o&nership in property and another person o&ning the legal title to such property, the e6uita#le o&nership of the for$er entitling hi$ to the perfor$ance of certain duties and the eercise of certain po&ers #y the latter. The characteristics of a trust are: 1. )t is a relationship 7. it is a relationship of fiduciary character B. it is a relationship &ith respect to property, not one involving $erely personal duties =. it involves the eistence of e6uita#le duties i$posed upon the holder of the title to the property to deal &ith it for the #enefit of another and . it arises as a result of a $anifestation of intention to create the relationship.
NB %s. CA &G'R' No' ,6,,0- 2an3ar4 .%< %,,15
4"2I4", J.: )n turn, i$plied trusts are su#divided into resulting and constructive trusts. A resulting trust is a trust raised #y i$plication of la& and presu$ed al&ays to have #een conte$plated #y the parties, the intention of &hich is found in the nature of the transaction, #ut not epressed in the deed or instru$ent of conveyance. Ia$ples of resulting trusts are found in Articles 1==8 to 1= of the Civil Code. "n the other hand, a constructive trust is one not created #y &ords either epressly or i$pliedly, #ut #y construction of e6uity in order to satisfy the de$ands of /ustice. An ea$ple of a constructive trust is Article 1=G 6uoted a#ove. TIGNO %s. CA &G'R' No' %%*%%0- Otob#r +< %,,65
5A>A>)KA>, J.: Pag# $ 7%
Obligations and Contrats! "otrin#s and Cas# "ig#sts
)$plied trusts are those &hich are deduci#le #y operation of la& fro$ the nature of the transaction as $atters of e6uity, independently of the particular intention of the parties. An i$plied trust arises &here a person purchases land &ith his o&n $oney and ta*es conveyance thereof in the na$e of another. )n such a case, the property is held on resulting trust in favor of the one furnishing the consideration for the transfer, unless a different intention or understanding appears. The trust &hich results under such circu$stances does not arise fro$ a contract or an agree$ent of the parties, #ut fro$ the facts and circu$stances that is to say, the trust results #ecause of e6uity and it arises #y i$plication or operation of la&. ARLEG/I %s. CA G.R. No. &-5(28 #ar=h , -66- L>A4IS(SA>T)A", J.: A constructive trust, other&ise *no&n as a trust e $aleficio, a trust e delicto, a trust de son tort, an involuntary trust, or an i$plied trust, is a trust #y operation of la& &hich arises contrary to intention and in invitu$, against one &ho, #y fraud, actual or constructive, #y duress or a#use of confidence, #y co$$ission of &rong, or #y any for$ of unconsciona#le conduct, artifice, conceal$ent, or 6uestiona#le $eans, or &ho in any &ay against e6uity and good conscience, either has o#tained or holds the legal right to property &hich he ought not, in e6uity and good conscience, hold and en/oy. )t is raised #y e6uity to satisfy the de$ands of /ustice. 3o&ever, a constructive trust does not arise on every $oral &rong in ac6uiring or holding property or on every a#use of confidence in #usiness or other affairs ordinarily such a trust arises and &ill #e declared only on &rongful ac6uisitions or retentions of property of &hich e6uity, in accordance &ith its funda$ental principles and the traditional eercise of its /urisdiction or in accordance &ith statutory provision, ta*es cogniance. )t has #een #roadly ruled that a #reach of confidence, although in #usiness or social relations, rendering an ac6uisition or retention of property #y one person unconsciona#le against another, raises a constructive trust. III.
RESCRITION &. Art. &&6 to &&++
Pag# $ 7.
Obligations and Contrats! "otrin#s and Cas# "ig#sts
CASE DIGESTS Pag# $ 71
Obligations and Contrats! "otrin#s and Cas# "ig#sts
I.
OBLIGATIONS &. DE)INITION * ART. &&+ -. RE/ISITES O) A 0ALID OBLIGATION a. RE/ISITES O) RESTATION (. SO/RCES O) OBLIGATIONS *ART. &&+2 A. LA3 I. ARTS. &&+4, 554, ( AND -6&5 O) T7E CI0IL CODE8 ART. &99 O) )A#IL: CODE
Cases! ELA:O 0. LA/RON &G'R No' L()*+,- %. P/il )01- %. 2an3ar4 %,*,5
Torres, J.: )a=ts? On %1 Otob#r %,*7< Art3ro P#la4o< a P/4siian @as all#d at nig/t to r#nd#r 9#dial assistan# to d##ndants da3g/t#r(in(la@ @/o is abo3t to gi;# birt/' T/# o8#ration @#nt 3ntil t/# ollo@ing 9orning' T/# 8#tition#r also ;isit#d t/# 8ati#nt s#;#ral ti9#s t/at da4' It @as all#g#d b4 t/# Pag# $ 7)
Obligations and Contrats! "otrin#s and Cas# "ig#sts
d##ndants t/at t/#ir da3g/t#r(in(la@ di#d as a ons#3#n# o t/# /ild d#li;#r4 8#ror9#d b4 t/# 8#tition#r'B#or# t/# inid#nt< t/# da3g/t#r(in(la@ li;#s @it/ /#r /3sband in a s#8arat# /o3s#< and t/at /#r sta4 t/at nig/t @it/ t/# d##ndants @as 9#r#l4 aid#ntal and d3# to ort3ito3s ir39stan#s' T/# 8#tition#r d#9ands t/# 8a49#nt or /is s#r;i#s in t/# a9o3nt o P/8 0**'** ro9 t/# d##ndants< @/i/ t/# d##ndants r#3s#d to 8a4' T/# lo@#r o3rt r3l#d on 0 A8ril %,*6 t/at d##ndants ar# absol;#d ro9 t/# o98laint as t/#r# @as laD o s3ii#nt #;id#n# to #stablis/ a rig/t o ation ag ainst t/#9'
Issue? W/#t/#r or not t/# at/#r and 9ot/#r(in(la@ or t/# /3sband is bo3nd to 8a4 t/# 9#dial bill'
7el"? T/# /3sband 93st 8a4 t/# 9#dial bill' Aording to t/# Artil# %*+, o t/# S8anis/ Ci;il Cod#< and 3rr#ntl4 Artil# %%06< Obligations aris# ro9! La@< Contrats< >3asi(ontrats< and Illiit ats and o9issions or b4 t/os# in @/i/ an4 Dind o a3lt or n#glig#n# o3rs"#lits and >3asi(d#lits' And t/at Obligations arising ro9 la@ ar# not 8r#s39#d' T/os# #8r#ssl4 d#t#r9in#d b4 t/# od# or s8#ial la@s< #t'< ar# t/# onl4 d#9andabl# on#s' Artil# %%0+' T/# r#nd#ring o 9#dial assistan# in as# o illn#ss is o98ris#d a9ong t/# 93t3al obligations to @/i/ t/# s8o3s#s ar# bo3nd b4 @a4 o 93t3al s388ort' S8o3s#s ar# 93t3all4 bo3nd to s388ort #a/ ot/#r< and @/#n #it/#r o t/#9 b4 r#ason o illn#ss s/o3ld b# in n##d o 9#dial assistan#< t/# ot/#r is 3nd#r t/# 3na;oidabl# obligation to 3rnis/ t/# n##ssar4 s#r;i#s o a 8/4siian in ord#r t/at /#alt/ 9a4 b# r#stor#d< and /# or s/# 9a4 b# r##d ro9 t/# siDn#ss b4 @/i/ li# is #o8ardi#d- t/# 8art4 bo3nd to 3rnis/ s3/ s388ort is t/#r#or# liabl# or all #8#ns#s< inl3ding t/# ##s o t/# 9#dial #8#rt or /is 8ro#ssional s#r;i#s' In t/# 8r#s#nt as#< it is t/# /3sband t/at /as t/# obligation to 8a4 or t/# 9#dial assistan# r#nd#r#d b4 t/# 8#tition#r< and not t/# d##ndants' It is not a bar to t/# obligation t/at it @as not t/# /3sband @/o all#d t/# 8#tition#r to r#nd#r t/# assistan#' Wit/in t/# 9#aning o la@< t/# at/#r and 9ot/#r(in(la@ ar# strang#rs @it/ r#s8#t to t/# obligation t/at d#;ol;#s 38on t/# /3sband to 8ro;id# s388ort< a9ong @/i/ is t/# 3rnis/ing o 9#dial assistan# to /is @i# at t/# ti9# o /#r onin#9#nt' T/#r#or#< it is t/# /3sband< and not t/# at/#r and 9ot/#r(in(la@< t/at is obligat#d to 8a4 or t/# s#r;i#s r#nd#r#d b4 t/# 8#tition#r'
Pag# $ 70
Obligations and Contrats! "otrin#s and Cas# "ig#sts
DELA CR/; 0. NORT7ERN T7EATRICAL ENTERRISE INC. &GR' No' 6*+,- 0* O'G' )..0- 1% A3g3st %,0)5
2onte$ayor, J.: )a=ts? In %,)%< t/# 8lainti @orDs or t/# d##ndant as s8#ial g3ard and is assign#d in t/# #ntran# o t/# 9o;i# /o3s#' As s3/< /# @as allo@#d to arr4 @it/ /i9 a r#;ol;#r' On# at#rnoon< B#na9in :artin tri#d to tr#s8ass t/# 9o;i# /o3s#' :artin attaD#d 8lainti @it/ a bolo< @/i/ 8lainti d##nd#d /i9(s#l b4 s/ooting :artin @/i/ a3s#d t/# latt#rs d#at/' Plainti @as /arg#d @it/ /o9iid#' At#r r#in;#stigation< t/# 8ro;inial isal il#d a 9otion to dis9iss t/# /arg#s< @/i/ @as grant#d' Ho@#;#r< on + 23l4 %,)+< /arg#s @#r# il#d on# again< and /# @as inall4 a3itt#d on 1% 2an3ar4 %,)+' Plainti t/#n d#9and#d t/# d##ndant or t/# r#i9b3rs#9#nt o t/# #8#ns#s ro9 t/# 8ro##dings as /# @as an ag#nt o t/# d##ndants and is t/#r#or# #ntitl#d or s3/ r#i9b3rs#9#nt His d#9and @as d#ni#d b4 t/# Co3rt o First Instan# o IloosNort#'
Issue? W/#t/#r or not an #98lo4## or s#r;ant< @/o in lin# o d3t4 and @/il# in t/# 8#ror9an# o t/# tasD assign#d to /i9< 8#ror9s an at @/i/ #;#nt3all4 r#s3lts in in3rring #8#ns#s< a3s#d not dir#tl4 b4 /is 9ast#r or #98lo4#r or /is #llo@ s#r;ants< or b4 r#ason o /is 8#ror9an# o /is d3t4< b3t rat/#r b4 a t/ird 8art4 or strang#r not in t/# #98lo4 o /is #98lo4#r< 9a4 r#o;#r said da9ag#s against /is #98lo4#r'
7el"? T/# #98lo4#r is not l#gall4 oblig#d to gi;# l#gal assistan# to its #98lo4## and 8ro;id# /i9 @it/ a la@4#r< nat3rall4 said #98lo4## 9a4 not r#o;#r t/# a9o3nt /# 9a4 /a;# 8aid a la@4#r /ir#d b4 /i9' Alt/o3g/ it 9a4 b# said t/at it @o3ld b# in t/# int#r#st o t/# #98lo4#r to gi;# l#gal /#l8 to and d##nd its #98lo4## in ord#r to s/o@ t/at t/# latt#r @as not g3ilt4 o an4 ri9# #it/#r d#lib#rat#l4 or t/ro3g/ n#glig#n#< b#a3s# s/o3ld t/# #98lo4## b# o3nd ri9inall4 liabl# and /# @as o3nd insol;#nt< t/# #98lo4#r @ill b# s3bsidiaril4 liabl#' Ho@#;#r< t/# o3rt is 3nabl# to sa4 and /old t/at t/# gi;ing o l#gal assistan# to its #98lo4##s is a l#gal obligation< as it do#s not o3nt @it/ t/# santion o 9an(9ad# la@s'
Pag# $ 77
Obligations and Contrats! "otrin#s and Cas# "ig#sts
T/#r#or#< t/# 3dg9#nt o t/# lo@#r o3rt is air9#d< and t/# d##ndant is not oblig#d to r#i9b3rs# t/# l#gal #8#ns#s o t/# 8lainti'
1 CONTRACTS ii. ARTS. &&+9 AND &(6+ !1 /ASI'CONTRACTS %i. DE)INITION * ART.-&5%ii. NEGOTIOR/# GESTIO ' ARTS. -&55TO -&+( %iii. SOL/TIO INDEBITI * ARTS. -&+5 TO -&( iK. OT7ER /ASI'CONTRACTS * ARTS. -&5 TO -&2+ K. SOL/TIO INDEBITI 0S. NAT/RAL OBLIGATIONS >ARTS. &5-( TO &5(61 h1 DELICTS iii. ART. &66 O) T7E RE0ISED ENAL CODE i%. ART. -&22 i1 /ASI'DELICT i%. ARTS. -&2 %. 0ICARIO/S LIABILIT: ' ART. -&46 O) T7E CI0IL CODE AND ARTS. -&4, -&9 AND -( O) T7E )A#IL: CODE %i. ART. (( Cases? AD/A 0. ROBLES &GR No' L()*)+7- 77 SCRA )+0- ., A3g3st %,605 Castro, J.:
)a=ts? Earl4 9orning o N#@ Y#ars "a4 o %,7, a taiab dri;#n b4 Ro9#o P3nalan and o8#rat#d b4 Ba4 Taiab o@n#d b4 t/# d##ndant str3D t/# %*(4#ar(old Nor9and4 Pad3a on t/# National Road in Barrio Barr#tto< Olonga8o Cit4< @/i/ r#s3lt#d to t/# /ilds d#at/' T/# /ilds 8ar#nts< /#r#in 8laintis il#d a o98laint to t/# Co3rt o First Instan# o Ja9bal#s and so3g/t da9ag#s ro9 P3nalan and t/# "##ndant' A ri9# o Ho9iid# t/ro3g/ r#Dl#ss i98r3d#n# @as il#d b4 t/# Cit4 Fisal o Olonga8o against P3nalan' On t/# d#ision r#nd#r#d b4 t/# o3rt on .6 Otob#r %,7, or t/# i;il as#< P3nalan @as ord#r#d to 8a4 or t/# a9o3nt o P.6<***'**< and t/# o98laint against Ba4 Taiab @as dis9iss#d'
Pag# $ 76
Obligations and Contrats! "otrin#s and Cas# "ig#sts
On 0 Otob#r %,6*< t/# o3rt r#nd#r#d its d#ision or t/# ri9inal< inding P3nalan g3ilt4 b#4ond r#asonabl# do3bt o t/# ri9# /arg#d against /i9' T/# Pad3as so3g/t or t/# ##3tion o t/# 3dg9#nt o t/# i;il as#< /o@#;#r P3nalan @as 3nabl# to 8a4 or it' Unabl# to oll#t s3/ a9o3nts< t/# Pad3as il#d a as# against d##ndant to #nor# t/# latt#rs s3bsidiar4 r#s8onsibilit4' "##ndant /o@#;#r 9o;#d to dis9iss t/# as# on t/# gro3nds o t/# 8rior 3dg9#nt o t/# o3rt in t/# i;il as# and also to t/# ail3r# o t/# o98laint to stat# t/# a3s# o ation' On .0 Otob#r %,6.< t/# o3rt grant#d t/# d##ndants 9otion to dis9iss on t/# gro3nd t/at t/# Pad3as o98laint stat#s no a3s# o ation'
Issue? W/#t/#r or not t/# 3dg9#nt or t/# ri9inal as# inl3d#s a d#t#r9ination and ad3diation o P3nalans i;il liabilit4 arising ro9 /is ri9inal at 38on @/i/ "##ndan ts s3bsidiar4 9a4 b# bas#d'
7el"? Y#s< t/# 3dg9#nt o t/# ri9inal as# inl3d#s a d#t#r9ination and ad3diation o P3nalans i;il liabilit4 arising ro9 /is ri9inal at 38on @/i/ "##ndants s3bsidiar4 9a4 b# bas#d' Ci;il liabilit4 o#ists @it/ ri9inal r#s8onsibilit4' In n#glig#n# as#s t/# o#nd#d 8art4 or /is /#irs /as t/# o8tion b#t@##n an ation or #nor#9#nt o i;il liabilit4 bas#d on 3l8a ri9inal 3nd#r artil# %** o t/# R#;is#d P#nal Cod# and an ation or r#o;#r4 o da9ag#s bas#d on 3l8a a3iliana 3nd#r artil# .%66 o t/# Ci;il Cod#' T/# ation or #nor#9#nt o i;il liabilit4 bas#d on 3l8a ri9inal s#tion % o R3l# %%% o t/# R3l#s o Co3rt d##9s si93ltan#o3sl4 instit3t#d @it/ t/# ri9inal ation< 3nl#ss #8r#ssl4 @ai;#d or r#s#r;#d or a s#8arat# a88liation b4 t/# o#nd#d 8art4' Artil# .%66 o t/# Ci;il Cod#< /o@#;#r< 8r#l3d#s r#o;#r4 o da9ag#s t@i# or t/# sa9# n#glig#nt at or o9ission' In t/# 8r#s#nt as#< t/# Co3rt inds it i99at#rial t/at t/# Pad3as /os#< in t/# irst instan#< an ation or r#o;#r4 o da9ag#s bas#d on culpa a6uiliana @/i/ ation 8ro;#d in##t3al' T/# Co3rt also taD#s not# o t/# abs#n# o an4 inonsist#n4 b#t@##n t/# aor#9#ntion#d ation 8rior a;ail#d o b4 t/# Pad3as and t/#ir s3bs#3#nt a88liation or #nor#9#nt o i;il liabilit4 arising ro9 t/# o#ns# o99itt#d b4 P3nalan and ons#3#ntl4< or #ation o Robl#sK s3bsidiar4 r#s8onsibilit4' Allo@an# o t/# latt#r a88liation in;ol;#s no ;iolation o t/# 8rosri8tion against do3bl# r#o;#r4 o da9ag#s or t/# sa9# n#glig#nt at or o9ission' It @as stat#d t/at t/# @rit o ##3tion or t/# 3dg9#nt on t/# i;il as# @as l#t 3nsatisi#d'
Pag# $ 7+
Obligations and Contrats! "otrin#s and Cas# "ig#sts
T/# Co3rt t/#r#or# /olds t/at t/# Pad3as o98laint in t/# i;il as# stat#s a a3s# o ation against Robl#s< @/os# s3bsidiar4 r#s8onsibilit4< 8#r t/# 3dg9#nt in ri9inal as#< s3bsist' T/# as# @as r#9and#d to t/# lo@#r o3rt or 3rt/#r 8ro##ding'
SINGSON 0. BI &GR' No' L(.)+16- .1 SCRA %%%6- .6 23n# %,7+5
Concepcion, C.J.: )a=ts? Plainti is on# o t/# d##ndants in a i;il as# in Co3rt o First Instan#< :anila in @/i/ t/# 3dg9#nt @as r#nd#r#d s#nt#ning /i9 and /is o(d##ndants to 8a4 t/# T/# P/ili88in# :illing Co' t/# a9o3nt o P%*0<01,'07' Singson and Lobr#gat il#d an a88#al b3t not Villa Abrill# Co'< as against @/i/ 3dg9#nt /as b#o9# inal and ##3tor4' A @rit o garnis/9#nt @as s3bs#3#ntl4 s#r;#d 38on t/# /#r#in d##ndant in so ar as t/# ao3nt o Villa Abrill# Co' is on#rn#d' U8on t/# r##i8t o t/# @rit< /o@#;#r< t/# l#rD o banD< 38on r#ading t/# na9# o t/# 8lainti as a 8art4 d##ndant< and not t/# @/ol# bod4 o t/# @rit its#l< /as iss3#d a l#tt#r dat#d %6 A8ril %,71 inor9ing 8lainti o t/# garnis/9#nt o /is ao3nt sign#d b4 t/# 8r#sid#nt o t/# BPI' S3bs#3#ntl4 t@o /#Ds @#r# iss3#d b4 t/# 8lainti in a;or o B' :' Glass S#r;i#s< and L#ga Cor8oration and dra@n against t/# banD' B#li#;ing t/at t/# 8laintis ao3nt /as b##n garnis/#d< t/# /#Ds @#r# dis/onor#d @/i/ r#s3lt#d or B' : Glass S#r;i#s to @rit# to 8lainti in r#gards to t/is and also inor9ing /i9 o t/# losing o /is r#dit ao3nt @it/ t/#9' In ;i#@ o t/is 8lainti @rot# to t/# banD t/at /is ao3 nt is not inl3d#d in Writ o Garnis/9#nt' At#r ;#ri4ing and inding o3t t/at 8laintis ao3nt is ind##d not inl3d#d in t/# @rit' T/# 8r#sid#nt o t/# banD t/#n a8ologi#d and r#3#st#d /i9 to disr#gard t/# l#tt#r o %6 A8ril %,71 and t/# ation o garnis/9#nt @as r#9o;#d ro9 /is ao3nt' T/# "##ndants r#tii#d t/#ir 9istaD#s i99#diat#l4' On + :a4 %,71< Plainti il#d an ation or da9ag#s against d##ndant or ill#gall4 r##ing /is ao3nt' In @/i/ t/# Co3rt o First Instan# o :anila r#nd#r#d 3dg9#nt dis9issing t/# o98laint on t/# gro3nds t/at 8lainti annot r#o;#r ro9 t/# d##ndants 38on t/# basis o a 3asi(d#lit b#a3s# t/#ir r#lation is not ontrat3al in nat3r#'
Issue? W/#t/#r or not t/# d##ndant is liabl# or da9ag#s to t/# 8lainti'
Pag# $ 7,
Obligations and Contrats! "otrin#s and Cas# "ig#sts
7el"? Y#s' BPI is liabl# or no9inal da9ag#s in a;or o t/# 8lainti' T/# o3rt r#8#at#dl4 /#ld t/at t/# #ist#n# o a ontrat b#t@##n t/# 8arti#s do#s not bar t/# o99ission o a tort b4 t/# on# against t/# ord#r and t/# ons#3#nt r#o;#r4 t/#r#o' Stating t/# as# o Air rance v. Carrascoso < t/# tort on t/# air arri#rs 8art< or< alt/o3g/ t/# r#lation b#t@##n t/# arri#r and 8ass#ng#r is ontrat3al bot/ in origin and nat3r#M t/# at br#aDs t/# ontrat 9a4 also b# a tort' In t/# as# at bar< t/# @rong don# to t/# 8lainti @as r#9#di#d as soon as t/# Pr#sid#nt o t/# banD r#ali#d t/# 9istaD# t/#4 /ad o99itt#d< t/#n t/#r#or#< t/# o3rt d#id#d or no9inal da9ag#s s/o3ld b# a@ard#d to t/# 8lainti' T/#r#or#< t/# 3dg9#nt r#nd#r#d b4 t/# lo@#r o3rt is r#;#rs#d'
#ALIOL %. TAN &GR' No' L(.661*- 00 SCRA %%%6- .% 2an3ar4 %,6)5
Pag# $ 6*
Obligations and Contrats! "otrin#s and Cas# "ig#sts
T/3s t/# a88#al o t/# d##ndants'
Issue? W/#t/#r or not t/# o3rt #rr#d in in inding t/at t/# a88#llants tooD t/# o98laint or grant#d b4 r#ason o t/# at t/at t/# d##ndants r##rr#d to t/# la@4#r t/# o98laint or ans@#r onl4 at#r t/# la8s# o #l#;#n da4s ro9 t/# r##i8t t/#r#o'
7el"? No< t/# o3rt did not #rr in inding t/at t/# a88#llants tooD t/# o98laint or grant#d b4 r#ason o t/# at t/at t/# d##ndants r##rr#d to t/# la@4#r t/# o98laint or ans@#r onl4 at#r t/# la8s# o #l#;#n da4s ro9 t/# r##i8t t/#r#o' T/# d##ndants /ad %0 da4s ro9 t/# r##i8t o t/# s399ons to il# t/#ir ans@#r to t/# o3rt' Ho@#;#r t/# o98laint @as r##rr#d to t/# d##ndants la@4#r onl4 on t/# #l#;#nt/ da4' T/# lat# la@4#r Att4' C/a;# still /ad ) da4s to il# t/# ans@#r' Also< gi;#n t/at d##ndant Li9 Dno@s o /#r obligation to 8a4 or t/# da9ag#s don# b4 /#r #98lo4##< b#ing s3bsidiaril4 liabl#< b3t still tooD /#r t/# la8s# o t#n da4s b#or# s/# tooD t/# o98laint to /#r la@4#r' T/#r# @as< t/#r#or#< no s/o@ing o d3# dilig#n# on t/# 8art o a88#llants'
LIBI %. IAC &GR' No' 6*+,*- .%) SCRA .**.- %+ S#8t#9b#r %,,.5
4egalado, J.: )a=ts? 23li# Ann Gotiong and W#nd#ll Libi @#r# s@##t/#arts 3ntil "##9b#r %,6+ @/#n 23li# Ann broD# 38 @it/ W#nd#ll' "3ring t/# irst t@o @##Ds o 2an3ar4 %,6,< W#nd#ll D#8t on 8#st#ring 23li# Ann asDing or r#oniliation' 23li# Ann /o@#;#r ada9antl4 r#3s#d and t/is l#d to W#nd#ll t/r#at#ning /#r' To a;oid /i9 s/# d#id#d to li;# @it/ /#r ri#nd' On %) 2an3ar4 %,6,< 23li# Ann and W#nd#ll di#d bot/ ro9 t/# sa9# g3ns/ot ro9 t/# sa9# @#a8on @/i/ is 3nd#r t/# na9# o Cr#s#nioLibi' T/# said g3n @as D#8t in a sa#t4 d#8osit bo< in @/i/ #a/ o t/# 8#tition#rs /old a D#4 and t/at A9#litas D#4 @as al@a4s in /#r bag and is Dno@n b4 W#nd#ll' T/#r# @as no #4#(@itn#ss and t/#r#or# 8arti#s @#r# to il# t/#ir o@n ir39stantial #;id#n#s' T/# 8ri;at# r#s8ond#nts< @/o ar# 23li# Anns 8ar#nts all#g#d t/at W#nd#ll Dill#d t/#ir da3g/t#r and at#r@ards o99itting s3iid#' On t/# ot/#r /and< t/# 8#tition#rs all#g#d t/at t/# o38l#
Pag# $ 6%
Obligations and Contrats! "otrin#s and Cas# "ig#sts
@#r# Dill#d b4 an 3nDno@n t/ird 8art4 @/o9 W#nd#ll 9a4 /a;# antagoni#d @/il# @orDing as a narotis inor9#r o t/# Constab3lar4 Anti(Narotis Unit CANU' Pri;at# R#s8ond#nts il#d a i;il as# or t/# 8#tition#rs ;iario3s liabilit4< @/i/ t/# o3rt dis9iss#d or ins3ii#nt #;id#n#' On a88#al< t/# /#r#in r#s8ond#nt o3rt s#t asid# t/# r3ling o t/# lo@#r o3rt'
Issue? W/#t/#r or not W#nd#lls 8ar#nts ar# i;ill4 liabl# or t/# ri9# o99itt#d b4 t/#ir 9inor son gi;#n t/#ir d##ns# t/at t/#4 /a;# s/o@n d3# dilig#n# o a good at/#r o a a9il4'
7el"? Y#s' W#nd#lls 8ar#nts ar# i;ill4 liabl# or t/# ri9# o99itt#d b4 t/#ir 9inor son' T/# dilig#n# o a good at/#r o a a9il4 r#3ir#d b4 la@ in a 8ar#nt and /ild r#lations/i8 onsists< to a larg# #t#nt o t/# instr3tion and s38#r;ision o t/# /ild' S3bsidiar4 liabilit4 o 8ar#nts or da9ag#s o99itt#d b4 t/#ir 9inor /ildr#n i98os#d b4 Artil# .%+* o t/# N#@ Ci;il Cod# o;#rs obligations arising ro9 bot/ 3asi(d#litsand ri9inal o#ns#s' In t/# 8r#s#nt as#< t/# 8#tition#rs ar# gra;#l4 r#9iss in t/#ir d3ti#s in not dilig#ntl4 s38#r;ising t/# ati;iti#s o t/#ir son< d#s8it# /is i99at3rit4 and 9inorit4< so 93/ t/at it @as onl4 at t/# ti9# o W#nd#lls d#at/ t/at t/#4 all#g#dl4 diso;#r#d t/at /# @as a CANU ag#nt and t/at /is at/#rs g3n @as 9issing ro9 t/# sa#t4 d#8osit bo' T/#r#or# t/# 8#tition /as b##n d#ni#d< t/# d#ision o t/# Co3rt o A88#als @as air9#d< and t/# W#nd#ll Libis 8ar#nts ar# i;ill4 liabl# or t/# da9ag#s don# b4 t/#ir 9inor /ild'
#ADEJA %. CARO &GR No' L(0%%+1- .%) SCRA .**.- .% "##9b#r %,+15
A#ad Santos, J '! )a=ts? A ri9inal as# @as il#d against "r' E;a A'2a8on b4 Ca9#n L' :ad#a or /o9iid# t/ro3g/ r#Dl#ss i98r3d#n# or t/# d#at/ o Cl#to:ad#a at#r an a88#nd#to94' W/il# t/# ri9inal as# @as 8#nding< a i;il as# @as also il#d b4 t/# 8#tition#r against t/# r#s8ond#nt or gross n#glig#n# o "r'2a8on< A 9otion to dis9iss @as il#d b4 t/# d##ndants in;oDing S#tion 1a o R3l# %%% o t/# R3l#s o Co3rt @/i/ @as grant#d b4 t/# r#s8ond#nt 3dg#< Hon' F#li T' Caro< stating t/at t/# i;il as# 9a4 onl4 b# instit3t#d at#r t/# ri9inal ation @/#n t/# inal 3dg9#nt /as b##n r#nd#r#d' Pag# $ 6.
Obligations and Contrats! "otrin#s and Cas# "ig#sts
T/# 8#tition#r s##Ds to s#t asid# t/# ord#r o t/# r#s8ond#nt 3dg#'
Issue? W/#t/#r or not t/# r#s8ond#nt 3dg# #rr#d in granting t/# d##ndants 9otions to dis9iss t/# i;il as# and a88l4ing S#tion 1a o R3l# %%% o t/# R3l#s o Co3rt'
7el"? Y#s< t/# r#s8ond#nt 3dg# 3dg# #rr#d in granting t/# d##ndants 9otions to dis9iss t/# i;il as# and a88l4ing S#tion 1a o R3l# %%% o t/# R3l#s o Co3rt' Aording to t/# S38r#9# Co3rt< t/# r3l# t/at a88li#s in t/is as# is t/# S#tion .< R3l# %%% o t/# R3l#s o Co3rt or Ind#8#nd#nt Ci;il Ation t/at in i;il ation #ntir#l4 s#8arat# and distint ro9 t/# ri9inal ations 9a4 b# bro3g/t b4 t/# in3r#d 8art4 d3ring t/# 8#nd#n4 o t/# ri9inal as# in r#lation to Artil# 11 o t/# Ci;il Cod# t/at In as#s o d#a9ation< ra3d< and 8/4sial in3ri#s a i;il ation or da9ag#s #ntir#l4 s#8arat# ro9 t/# ri9inal ation 9a4 b# bro3g/t b4 t/# in3r#d 8art and t/at S3/ i;il ation s/all 8ro##d ind#8#nd#ntl4 o t/# ri9inal 8ros#3tionM It also not#d t/at i;il ation or da9ag#s @/i/ it allo@s to b# instit3t#d is #(d#lito' Anot/#r is t/at t/# t#r9 P/4sial In3ri#s in Artil# 11 o t/# Ci;il od# is to b# taD#n in t/# g#n#ri s#ns# as it inl3d#s ons399at#d< r3strat#d< and att#98t#d /o9iid#' Stating t/# as# o Carandang ;' Santiago< it 93st b# 3nd#rstood to 9#an bodil4 in3r4 and not t/# ri9# o P/4sial In3ri#s' In t/# lig/t o t/# or#going ir39stan#s o t/# as#< it is a88ar#nt t/at t/# i;il ation against 8ri;at# r#s8ond#nt 9a4 8ro##d ind#8#nd#ntl4 ro9 t/# ri9inal as#' T/#r#or#< t/# ord#r dis9issing t/# i;il as# @as s#t asid#'
#ARCIA %. CA &GR' No' L(1)0.,- %.* SCRA %,1- .6 2an3ar4 %,+15
4elova, J.: )a=ts? On .1 "##9b#r %,07< a 8ass#ng#r b3s o8#rat#d b4 Vitor4 Lin#r< In' dri;#n b4 F#lardoPa# ollid#d @it/ a ##8 dri;#n b4 Cl#9#nt# :aria r#s3lting to t/# latt#rs d#at/ and in t/# 8/4sial in3ri#s o t/# /#r#in 8#tition#rs< Edgar :aria< and R#nato Ya8' Fro9 t/# inid#nt< a as# or /o9iid# and s#rio3s 8/4sial in3ri#s t/r3 r#Dl#ss i98r3d#n# @as il#d against Pa# in t/# Co3rt o First Instan# o Pa98anga'
Pag# $ 61
Obligations and Contrats! "otrin#s and Cas# "ig#sts
On .1 2an3ar4 %,06< an ation or da9ag#s @as il#d in Co3rt o First Instan# o Rial b4 Edgar :ari and R#nato Ya8< tog#t/#r @it/ t/#ir r#s8#ti;# 8ar#nts against Vitor4 Lin#r< In' and Pa# and t/at t/# 9is/a8 @as d3# to r#Dl#ss i98r3d#n# and n#glig#n# o t/# latt#r in dri;ing t/# 8ass#ng#r b3s' W/il# t/# i;il as# @as in 8rogr#ss< t/# ri9inal ation @as also in 8rogr#ss' Pa# @as on;it#d o t/# o#ns# /arg#d' Ho@#;#r< on a88#al /# @as a3itt#d on t/# gro3nds t/at! t/# a88#llant @as dilig#nt and /#n# not liabl# or t/# ollision @/i/ is at t/# l#ast a ort3ito3s #;#nt' As a ons#3#n# o t/is a3ittal< t/# d##ndants 9o;#d or t/# dis9issal o t/# i;il as# il#d against t/#9 in;oDing t/# a3ittal o Pa# and iting 3rt/#r S#tion 1 < R3l# %%% o t/# N#@ R3l#s o Co3rt' T/# trial o3rt d#ni#d t/# 9otion to dis9iss' On %* A3g3st %,77< /o@#;#r< t/# Co3rt o First Instan# r#nd#r#d a d#ision dis9issing t/# o98laint' T/# 8#tition#rs a88#al#d t/# as# to t/# Co3rt o A88#als< all#ging t/at t/# a3ittal o Pa# is not a gro3nd or t/# said dis9issal and t/# i;il ation is #ntir#l4 s#8arat# ro9 t/# ri9inal ation and t/at @/at#;#r 9a4 b# t/# r#s3lt o t/# ri9inal ation is irr#l#;ant to t/# r#s3lts o t/# i;il ation' T/# CA r3l#d /o@#;#r t/at t/# 8ri;at# r#s8ond#nts annot b# /#ld i;ill4 liabl# at#r it /ad r3l#d t/at t/# ollision @as in 83r# aid#nt' T/3s t/# 8r#s#nt as# in t/# S38r#9# Co3rt'
Issue? W/#t/#r or not t/# a3ittal o Pa# in t/# ri9inal as# is irr#l#;ant to t/# instant i;il ation and t/at it 93st b# t/# S#tion .< R3l# %%% o t/# R3l#s o Co3rt and not S#tion 1 @/i/ s/o3ld a88l4'
7el"? No< t/# t/#or4 o t/# 8#tition#rs t/at it t/at it 93st b# t/# S#tion .< R3l# %%% o t/# R3l#s o Co3rt and not S#tion 1 @/i/ s/o3ld a88l4 is 3nt#nabl#' T/# S#tion . o t/# R3l# %%% 9#r#l4 r##rs to t/# instit3tion o an ind#8#nd#nt i;il ation @it/o3t @aiting or t/# iling or t#r9ination o t/# ri9inal ation and r#3ir#s onl4 8r#8ond#ran# o #;id#n# to 8ros8#r and not 8roo o b#4ond r#asonabl# do3bt as r#3ir#d or on;ition in ri9inal as#s' Ho@#;#r< an a3ittal bas#d on t/# inding t/at t/# ats 38on @/i/ i;il liabilit4 did not #ist< bars t/# iling o an ind#8#nd#nt i;il ation i it is bas#d on t/# ri9#' Also< Artil# 11@/i/ 8r#srib#s t/at in as#s o d#a9ation< ra3d and 8/4sial in3ri#s
Pag# $ 6)
Obligations and Contrats! "otrin#s and Cas# "ig#sts
t/# o#nd#d 8arti#s 9a4 bring a i;il ation s#8arat# and distint ro9 t/# ri9inal ation' Stating Tan ;' Standard Va339 Oil Co98an4! Qt/# a3ittal o t/# a3s#d ro9 t/# ri9inal /arg# @ill not n##ssaril4 #ting3is/ t/# i;il liabilit4 3nl#ss t/# o3rt d#lar#s in t/# 3dg9#nt t/at t/# at ro9 @/i/ t/# i;il liabilit4 9ig/t aris# did not #ist' W/#r# t/# o3rt stat#s Kt/at t/# #;id#n# t/ro@s no lig/t on t/# a3s# o ir# and t/at it @as an 3nort3nat# aid#nt or @/i/ t/# a3s#d annot b# /#ld r#s8onsibl#
CAS/ARAN %. LARO:A &GR' No' %)01,%- 1++ SCRA .+- .7 A3g3st .**.5
Carpio, J.: )a=ts? A ;#/il# dri;#n b4 :ario Lla;or#Laro4a and anot/#r o@n#d b4 Rob#rto Ca8it3lo dri;#n b4 8#tition#r A;#linoCas38anan got into an aid#nt @/i/ a3s#d t/# iling o t@o as#s in t/# :CTC o Ca8as< Tarla' Laro4a il#d a ri9inal as# against Cas38a9a9 or r#Dl#ss i98r3d#n# r#s3lting in da9ag# to 8ro8#rt4 and Cas38anan il#d a i;il as# against Laro4a or 3asi(d#lit' T/# i;il as# @as il#d @/il# t/# ri9inal as# @as at t/# 8r#li9inar4 in;#stigation stag#' Laro4a< t/# d##ndant or t/# i;il as# il#d a 9otion to dis9iss t/# i;il as# on t/# gro3nds o or39(s/o88ing onsid#ring t/# 8#nd#n4 o t/# ri9inal as#' T/# :CTC grant#d t/# 9otion' Cas38anan and Ca8it3lo il#d a 9otion or r#onsid#ration @/i/ @as d#ni#d b4 t/# :CTC< @/i/ #l#;at#d t/# as# to t/# R#gional Trial Co3rt o Ca8as< Tarla @it/ t/# 8#tition or #rtiorari' T/# RTC /o@#;#r d#ni#d t/# 8#tition or #rtiorari or laD o 9#rit' It stat#d t/at t/# 8ro8#r r#9#d4 is a88#al< and t/at a s8#ial i;il ation or #rtiorari is not a s3bstit3t# or a lost a88#al' Cas38anan and Ca8it3lo il#d a 9otion or r#onsid#ration b3t @as d#ni#d' T/3s t/# 8r#s#nt 8#tition'
Pag# $ 60
Obligations and Contrats! "otrin#s and Cas# "ig#sts
Issue? W/#t/#r or not an a3s#d in a 8#nding ri9inal as# or r#Dl#ss i98r3d#n# an ;alidl4 il#< si93ltan#o3sl4 and ind#8#nd#ntl4< a s#8arat# i;il ation or 3asi(d#lit against t/# 8ri;at# o98lainant in t/# ri9inal as#'
7el"? Y#s< an a3s#d in a 8#nding ri9inal as# or r#Dl#ss i98r3d#n# an ;alidl4 il#< si93ltan#o3sl4 and ind#8#nd#ntl4< a s#8arat# i;il ation or 3asi(d#lit against t/# 8ri;at# o98lainant in t/# ri9inal as#' Und#r S#tion % o t/# 8r#s#nt R3l# %%%< t/# ind#8#nd#nt i;il ation in Artil#s 1.< 11< 1) and .%67 o t/# Ci;il Cod# is not d##9#d instit3t#d @it/ t/# ri9inal ation b3t 9a4 b# il#d s#8arat#l4 b4 t/# o#nd#d 8art4 #;#n @it/o3t r#s#r;ation' T/# o99#n#9#nt o t/# ri9inal ation do#s not s3s8#nd t/# 8ros#3tion o t/# ind#8#nd#nt i;il ation 3nd#r t/#s# artil#s o t/# Ci;il Cod#' Also< t/# a3s#d an il# a i;il ation or 3asi(d#lit or t/# sa9# at or o9ission /# is a3s#d o in t/# ri9inal as#' T/is is #8r#ssl4 allo@#d in 8aragra8/ 7< S#tion % o t/# 8r#s#nt R3l# %%% @/i/ stat#s t/at t/# o3nt#rlai9 o t/# a3s#d 9a4 b# litigat#d in a s#8arat# i;il ation' T/is is onl4 air or t@o r#asons' First< t/# a3s#d is 8ro/ibit#d ro9 s#tting 38 an4 o3nt#rlai9 in t/# i;il as8#t t/at is d##9#d instit3t#d in t/# ri9inal as#' T/# a3s#d is t/#r#or# or#d to litigat# s#8arat#l4 /is o3nt#rlai9 against t/# o#nd#d 8art4' I t/# a3s#d do#s not il# a s#8arat# i;il ation or 3asi(d#lit< t/# 8r#sri8ti;# 8#riod 9a4 s#t in sin# t/# 8#riod ontin3#s to r3n 3ntil t/# i;il ation or 3asi(d#lit is il#d' S#ond< t/# a3s#d< @/o is 8r#s39#d inno#nt< /as a rig/t to in;oD# Artil# .%66 o t/# Ci;il Cod#< in t/# sa9# @a4 t/at t/# o#nd#d 8art4 an a;ail o t/is r#9#d4 @/i/ is ind#8#nd#nt o t/# ri9inal ation' To disallo@ t/# a3s#d ro9 iling a s#8arat# i;il ation or 3asi(d#lit< @/il# r#3sing to r#ogni# /is o3nt#rlai9 in t/# ri9inal as#< is to d#n4 /i9 d3# 8ro#ss o la@< a#ss to t/# o3rts< and #3al 8rot#tion o t/# la@' T/3s< t/# i;il ation bas#d on 3asi(d#lit il#d s#8arat#l4 b4 Cas38anan and Ca8it3lo is 8ro8#r' T/#r#or#< t/# r#;i#@ on #rtiorari is grant#d< and t/# i;il as# @as r#instat#d'
RA)AEL TR/C@ING CORORATION %. eole &GR' No' %.,*.,- 1.,SCRA 7**- *. A8ril .***5
5ardo, J.: )a=t? On .* 23n# %,+,< a trail#r tr3D r#gist#r#d 3nd#r t/# na9# o t/# 8#tition#r and dri;#n b4 Ro9#o "3na /it a Nissan PiD(38 Dilling F#liiano Balita and Franiso "4< 2r'
Pag# $ 67
Obligations and Contrats! "otrin#s and Cas# "ig#sts
T/# said trail#r @as arr4ing .<*** as#s o #98t4 b##r bottl#s and @/il# d#s#nding at a slig/t do@ngrad# slo8# it a88roa/#d a da9ag#d 8ortion o t/# road' "3na t#stii#d t/at /# 3s3all4 taD# t/# l#t lan# @/i/ is s9oot/' B3t at t/at 8arti3lar 9o9#nt< t/#r# @as an ino9ing ;#/il#' "3na t/#n r3n o;#r t/# da9ag#d 8ortion o t/# road @/i/ a3s#d /i9 to los# ontrol o t/# @/##ls and t/# tr3D s@#r;#d l#t< ra99ing t/# Nissan PiD(38 dri;#n b4 t/# d##as#d' On %* Otob#r %,+,< t/# Pro;inial Pros#3tor il#d /arg#s against "3na or R#Dl#ss I98r3d#n# R#s3lting in "o3bl# Ho9iid# and "a9ag# to Pro8#rt4' A3s#d #nt#r#d t/# 8l#a o not g3ilt4 and on t/# sa9# da4< o#nd#d 8arti#s r#s#r;#d to il# a s#8arat# i;il ation ag ainst t/# a3s#d' On ., No;#9b#r %,+, o#nd#d 8arti#s il#d a s#8arat# i;il ation against 8#tition#r bas#d on 3asi(d#lit' T/# 8#tition#r s#ttl#d t/# lai9 or t/# /#irs o F#liiano Balita ' T/# Pri;at# r#s8ond#nts o8t#d to 83rs3# t/# ri9inal ation b3t did not @it/dra@ t/# i;il as# t/#4 il#d against 8#tition#r' On %0 "##9b#r %,+,< Pri;at# r#s8ond#nts @it/dr#@ t/# r#s#r;ation to il# or a s#8arat# i;il ation b3t did not @it/dra@ t/# s#8arat# i;il ation' U8on agr##9#nt o t/# 8arti#s< t/# o3rt onsolidat#d t/# as#' On 7 23n# %,,.< t/# trial o3rt r#nd#r#d a d#ision inding "3na g3ilt4 b#4ond r#asonabl# do3bt o t/# /arg#s il#d against /i9 and ord#ring t/at t/# 8lainti in t/# i;il as# b# 8aid or t/# da9ag#s' T/# 8#tition#r and t/# a3s#d il#d a noti# o a88#al ro9 t/# oint d#ision< and t/# 8ri;at# r#s8ond#nts /#r#in also 9o;#d or an a9#nd9#nt so as to /old /#r#in 8#tition#r s3bsidiaril4 liabl# or t/# da9ag#s' T/# trial o3rt r#nd#r#d a s388l#9#ntal d#ision a9#nding t/# 8r#;ios d#ision and /olding /#r#in 8#tition#r s3bsidiaril4 liabl#' P#tition#r il#d in t/# trial o3rt a s388l#9#ntal noti# o a88#al ro9 t/# s388l#9#ntal d#ision on %. No;#9b#r %,,.' "3ring t/# 8#nd#n4 o t/# as# t/# a3s#d 398#d bail and l#d to a di#r#nt o3ntr4' T/# Co3rt o A88#als dis9iss#d t/# a88#al in t/# ri9inal as# and r#nd#r#d a d#ision air9ing t/# d#ision o t/# trial o3rt' T/# 8#tition#r il#d a 9otion or r#onsid#ration b3t @as d#ni#d b4 t/# CA' T/3s< t/# 8r#s#nt 8#tition or r#;i#@'
Issue? W/#t/#r or not t/# 8#tition#rs 9a4 still b# /#ld s3bsidiaril4 liabl# or t/# da9ag#s a@ard#d to t/# o#nd#d 8arti#s in t/# ri9inal ation against t/# tr3D dri;#r d#s8it# t/# iling o a s#8arat# i;il ation b4 t/# o#nd#d 8arti#s against t/# 8#tition#rs' Pag# $ 66
Obligations and Contrats! "otrin#s and Cas# "ig#sts
7el"? No< t/# 8#tition#rs an no long#r b# /#ld s3bsidiaril4 liabl# or t/# da9ag#s a@ard#d to t/# o#nd#d 8arti#s in t/# ri9inal ation against t/# tr3D dri;#r' In n#glig#n# as#s< t/# aggri#;#d 8art4 /as t/# /oi# b#t@##n % an ation to #nor# i;il liabilit4 arising ro9 ri9# 3nd#r Artil# %** o t/# R#;is#d P#nal Cod#- and . a s#8arat# ation or 3asi d#lit 3nd#r Artil# .%67 o t/# Ci;il Cod# o t/# P/ili88in#s' On# t/# /oi# is 9ad#< t/# in3r#d 8art4 an not a;ail /i9s#l o an4 ot/#r r#9#d4 b#a3s# /# 9a4 not r#o;#r da9ag#s t@i# or t/# sa9# n#glig#nt at or o9ission o t/# a3s#d' T/is is t/# r3l# against do3bl# r#o;#r4' Pri;at# r#s8ond#nts s3#d 8#tition#r Raa#l R#4#s Tr3Ding Cor8oration< as t/# #98lo4#r o t/# a3s#d< to b# ;iario3sl4 liabl# or t/# a3lt or n#glig#n# o t/# latt#r' Und#r t/# la@< t/is ;iario3s liabilit4 o t/# #98lo4#r is o3nd#d on at l#ast t@o s8#ii 8ro;isions o la@' T/# irst is #8r#ss#d in Artil# .%67 in r#lation to Artil# .%+* o t/# Ci;il Cod#< @/i/ @o3ld allo@ an ation 8r#diat#d on 3asi(d#lit to b# instit3t#d b4 t/# in3r#d 8art4 against t/# #98lo4#r or an at or o9ission o t/# #98lo4## and @o3ld n##d onl4 a 8r#8ond#ran# o #;id#n# to 8r#;ail' T/# liabilit4 o t/# #98lo4#r or t/# n#glig#nt ond3t o t/# s3bordinat# is dir#t and 8ri9ar4< s3b#t to t/# d##ns# o d3# dilig#n# in t/# s#l#tion and s38#r;ision o t/# #98lo4##' T/# s#ond< #8r#ss#d in Artil# %*1 o t/# R#;is#d P#nal Cod#< 8ro;id#s t/at an #98lo4#r 9a4 b# /#ld i;ill4 liabl#s3bsidiaril4 or a #lon4 o99itt#d b4 /is #98lo4## in t/# dis/arg# o /is d3t4' T/is liabilit4 atta/#s @/#n t/# #98lo4## is on;it#d o a ri9# don# in t/# 8#ror9an# o /is @orD and is o3nd to b# insol;#nt t/at r#nd#rs /i9 3nabl# to 8ro8#rl4 r#s8ond to t/# i;il liabilit4 ad3dg#d' Also< 83rs3ant to t/# 8ro;ision o R3l# %%%< S#tion %< 8aragra8/ 1 o t/# %,+0 R3l#s o Cri9inal Pro#d3r#< @/#n 8ri;at# r#s8ond#nts< as o98lainants in t/# ri9inal ation< r#s#r;#d t/# rig/t to il# t/# s#8arat# i;il ation< t/#4 @ai;#d ot/#r a;ailabl# i;il ations 8r#diat#d on t/# sa9# at or o9ission o t/# a3s#d(dri;#r' In t/# instant as#< t/# o#nd#d 8arti#s #l#t#d to il# a s#8arat# i;il ation or da9ag#s against 8#tition#r as #98lo4#r o t/# a3s#d< bas#d on 3asi d#lit< 3nd#r Artil# .%67 o t/# Ci;il Cod# o t/# P/ili88in#s' T/# int#ntion o 8ri;at# r#s8ond#nts to 8ro##d 8ri9aril4 and dir#tl4 against 8#tition#r as #98lo4#r o a3s#d tr3D dri;#r b#a9# l#ar @/#n t/#4 did not asD or t/# dis9issal o t/# i;il ation against t/# latt#r bas#d on 3 asi d#lit' T/#r#or#< t/# Co3rt o A88#als and t/# trial o3rt #rr#d in /olding t/# a3s#d i;ill4 liabl#< and 8#tition#r(#98lo4#r o t/# a3s#d s3bsidiaril4 liabl# or da9ag#s arising ro9 ri9# # d#lito in t/# ri9inal ation as t/# o#nd#d 8arti#s in at il#d a s#8arat# i;il ation against t/# #98lo4#r bas#d on 3asi d#lit r#s3lting in t/# @ai;#r o t/# i;il ation # d#lito' Pag# $ 6+
Obligations and Contrats! "otrin#s and Cas# "ig#sts
)ERNANDO %. CA &GR' No' ,.*+6- .*+ SCRA 6%)- *+ :a4 %,,.5
2edialdea, J.: )a=ts? On *6 No;#9b#r %,60< Bibiano:orta< t/# 9arD#t 9ast#r o Agdao P3bli :arD#t il#d a r#3#st @it/ t/# C/i# Pro8#rt4 o t/# Tr#ass3r#rs Oi# to r#(#98t4 t/# s#8ti tanD o t/# 9arD#t' An in;itation to bid @as iss3#d to A3r#lio B#rt3lano< LitoCatarsa< F#liiano Bason< F#d#rio Bolo and Antonio S3n#r 2r' Bason @on t/# bid' On .. No;#9b#r o t/# sa9# 4#ar< bidd#r B#rt3lano tog#t/#r @it/ ot/#r o3r 9#n @#r# o3nd d#ad in t/# s#8ti tanD' U8on in;#stigation t/# 9#n #nt#r#d t/# s#8ti tanD @it/o3t l#aran# ro9 t/# Cit4 Engin##rs Oi# nor @it/ t/# Dno@l#dg# or ons#nt o t/# 9arD#t 9ast#r' T/# s#8ti tanD @as o3nd al9ost #98t4 and it @as 8r#s39#d t/at it @as t/# ;iti9s @/o did t/# r#( #98t4ing' U8on a3to8s4 o t/# bod4< it @as o3nd t/at t/# d#at/ o t/# 9#n @#r# a3s#d b3di93nation o o4g#n s388l4 o t/# bod4 @orDing b#lo@ nor9al ondition' T/#ir l3ngs b3rst d3# to t/# intaD# o toi gas' T/# /#irs o t/# ;iti9 s3#d t/# it4 o "a;ao or da9ag#s' T/# trial o3rt dis9iss#d t/# as#' P#tition#r il#d an a88#al in t/# t/#n Int#r9#diat# A88#llat# Co3rt no@ Co3rt o A88#als' On 1 2an3ar4 %,+7< t/# o3rt r3l#d in a;or o t/# 8#tition#rs< a@arding t/# total o P/8 0*<***'** to #a/ 8#tition#r' Bot/ 8arti#s il#d a 9otion or r#onsid#ration' On %% 2an3ar4 %,,*< t/# Co3rt o A88#als a9#nd#d t/# d#ision granting t/# 8#tition o t/# d##ndant "a;ao Cit4 and r#;#rsing t/# d#ision o 1% 2an3ar4 %,+7' T/3s t/# 8r#s#nt 8#tition or #rtiorari' T/# 8#tition#rs bla9# t/# it4 go;#rn9#nt or ailing to l#an t/# s#8ti tanD or %, 4#ars< @/i/ a3s#d t/# a393lation o /4drog#n s3lid# gas @/i/ Dill#d t/# labor#rs' It also o98o3nd#d Pag# $ 6,
Obligations and Contrats! "otrin#s and Cas# "ig#sts
t/at t/#r# @as no @arning sign o t/# #isting dang#r and no #orts ##rt#d b4 t/# 83bli r#s8ond#nt to n#3trali# or r#nd#r /ar9l#ss t/# ##t o t/# toi gas'
Issue? W/#t/#r or not t/# r#s8ond#nt is n#glig#nt and b#ing so it is t/# i99#diat# and 8roi9at# a3s# o d#at/ o t/# d##as#d'
7el"? No< t/# r#s8ond#nt is n#glig#nt and b#ing so it is t/# i99#diat# and 8roi9at# a3s# o d#at/ o t/# ;iti9s' N#glig#n# /as b##n d#in#d as t/# ail3r# to obs#r;# or t/# 8rot#tion o t/# in#t#rst o anot/#r 8#rson in t/# d#gr## o ar#< 8r#a3tion< and ;igilan# @/i/ t/# ir39stan#s 3sti4 d#9and< @/#r#b4 s3/ ot/#r 8#rson s3#rs in3r4' A 8#rson @/o b4 /is o9ission a3s#s da9ag# to anot/#r< t/#r# b#ing n#glig#n# is oblig#d to 8a4 or t/# da9ag# don#' Stating t/# as# o 5icart v. S$ith< t/# o3rt stat#d t/at t/# t#st b4 @/i/ t/# #ist#n# o n#glig#n# in a 8arti3lar as# 9a4 b# stat#d as! id the defendant in doing the alleged negligent act use that reasona#le care
and caution &hich an ordinary prudent person &ould have used in the sa$e situationH )f not, then he is guilty of negligence. To b# #ntitl#d or da9ag#s or an in3r4 r#s3lting ro9 n#glig#n# o anot/#r< a lai9ant 93st #stablis/ t/# r#lation b#t@##n t/# o9ission and t/# da9ag#' H# 93st 8ro;# 3nd#r Artil# .%6, o t/# Ci;il Cod#< t/at t/# d##ndants n#glig#n# @as t/# i99#diat# and 8roi9at# a3s# o /is in3r4' Proi9at# a3s# /as b##n d#in#d as t/at a3s#< @/i/< in nat3ral and ontin3o3s s#3#n# 3nbroD#n b4 an4 #ii#nt int#r;#ning a3s#< 8rod3#s t/# in3r4< and @it/o3t @/i/ t/# r#s3lt @o3ld not /a;# o3rr#d' W/#r# t/# r#s3lting in3r4 @as t/# 8rod3t o t/# n#glig#n# o bot/ 8arti#s< t/#r# #ist a dii3lt4 to dis#rn @/i/ ats s/all b# onsid#r#d t/# 8roi9at# a3s# o t/# aid#nt' T/# o3rt< stating t/# as# o Ta4lor ;' :anila El#tri Railroad and Lig/t Co' 8ro;id#d a g3id#lin# or a 3diio3s ass#ss9#nt o t/# sit3ation! istinction $ust #e $ade
#et&een the accident and the in/ury #et&een the event itself, &ithout &hich there could have #een no accident, and those acts of the victi$ not entering into it, independent of it #ut contri#uting to his o&n proper hurt.D In t/# as# at bar< t/o3g/ it is tr3# t/at t/# Cit4 Go;#rn9#nt @as at a3lt in ailing to #98t4 t/# s#8ti tanD ann3all4< t/# n#glig#n# is not a ontin3ing on#' U8on l#arning ro9 t/# 9arD#t 9ast#r t/at t/#r# is a n##d to do so< i99#diat#l4 tooD ation' T/# aid#nt in t/is as# o3rr#d b#a3s# t/# ;iti9s on t/#ir o@n and @it/o3t a3t/orit4 ro9 t/# 83bli r#s8ond#nt o8#n#d t/# s#8ti tanD' An ordinaril4 8r3d#nt 9an @o3ld Dno@ t/# att#ndant risDs o #98t4ing a s#8ti tanD @/i/ /as not b##n l#an#d or 4#ars' Also< B#rt3lano<
Pag# $ +*
Obligations and Contrats! "otrin#s and Cas# "ig#sts
b#ing onsid#r#d to b# an old /and in t/is Dind o s#r;i# is 8r#s39#d to Dno@ t/# /aards o t/# ob' T/#r#or#< t/# a9#nd#d d#ision o t/# Co3rt o A88#als @as air9#d< and t/# Cit4 Go;#rn9#nt o "a;ao is not n#glig#nt and /#n# not liabl# or da9ag#s'
##TC %. CA &G'R' No' %*))*+- ..1 SCRA 0.%- .% 23n# %,,15
4egalado, J.: )a=ts? On .+ A3g3st %,6,< N#nitaC3stodio board#d a P3bli Utilit4 2##8n#4< dri;#n b4 Ag3doCal#bag and o@n#d b4 VitorianoLa9a4o bo3nd or /#r @orD at Bi3tan< Tag3ig< :#tro :anila' And @/#n t/# ##8n#4 @as tra;#lling in a ast 8a# in t/# int#rs#tion in "BP A;#n3#< a :#tro :anila Transit Cor8' ::TC B3s< dri;#n b4 Godor#do L#onardo< @as also tra;#lling in a ast 8a# in Hon#4d#@ Road' In t/# int#rs#tion< @it/o3t slo@ing do@n< and blo@ing o /orn< t/# t@o ;#/il#s ollid#d and r#s3lt#d or C3stodio to /it t/# @inds/i#ld and t/ro@n o3t o t/# ##8n#4' S/# got s#rio3s 8/4sial in3ri#s and @as 3nabl# to @orD or t/r## and on# /al 9ont/s' A o98laint or da9ag#s @as il#d b4 t/# 8ri;at# r#s8ond#nt against ::TC< L#onardo< Cal#bag and La9a4o' Ho@#;#r< t/# d##ndants d#ni#d all 9at#rial all#gations in t/# o98laint and 8oint#d an a3sing ing#r at #a/ ot/#r as b#ing t/# 8art4 at a3lt' ::TC 8r#s#nt#d t/at it /ad ##ris#d d3# dilig#n# in s#l#ting its #98lo4##s @/i/ inl3d#s s3b#ting a88liants to #a9inations and training 8rogra9s< and also r#3iring t/#9 to s3b9it 93lti8l# r#3ir#9#nts' T/# trial o3rt t/#n iss3#d its d#ision inding bot/ t/# dri;#rs tog#t/#r @it/ La9a4o as solidaril4 liabl# or t/# in3ri#s s3stain#d b4 8lainti C3stodio' T/# o98laint against ::TC< /o@#;#r< @as dis9iss#d' Plainti t/#n il#d a 9otion or r#onsid#ration< @/i/ @as d#ni#d b4 t/# trial o3rt' T/#4 t/#n il#d t/#ir a88#al to Co3rt o A88#als @/i/ 9odii#d t/# trial o3rts d#ision and o3nd t/# ::TC to b# solidaril4 liabl# @it/ t/# ot/#r o#nd#rs or t/# da9ag#s a@ard#d to 8lainti C3stodio' T/# Co3rt o A88#als d#ni#d t/# 9otion or r#onsid#ration il#d b4 ::TC' H#n#< t/# 8r#s#nt 8#tition' Pag# $ +%
Obligations and Contrats! "otrin#s and Cas# "ig#sts
Issue? W/#t/#r or not t/# #;id#n# 8r#s#nt#d d3ring t/# trial @it/ r#s8#t to t/# 8roo o d3# dilig#n#o 8#tition#r ::TC in t/# s#l#tion and s38#r;ision o its #98lo4##s< 8arti3larl4 dri;#r L#onardo< is s3ii#nt'
7el"? No< t/# #;id#n# 8r#s#nt#d d3ring t/# trial @it/ r#s8#t to t/# 8roo o d3# dilig#n#o 8#tition#r ::TC in t/# s#l#tion and s38#r;ision o its #98lo4##s< 8arti3larl4 dri;#r L#onardo< is not s3ii#nt' "3# dilig#n# in t/# s#l#tion and s38#r;ision o its #98lo4##s is 9or# ot#n /onor#d in t/# br#a/ t/an in t/# obs#r;an#' Aording to Artil# .%67 and .%66< in r#lation to Artil# .%+*< o t/# Ci;il Cod# 8ro;isions on 3asi(d#lits as all t/# #l#9#nts t/#r#o ar# 8r#s#nt< to @it! % da9ag#s s3#r#d b4 t/# 8lainti< . a3lt or n#glig#n# o t/# d##ndant or so9# ot/#r 8#rson or @/os# at /# 93st r#s8ond< and 1 t/# onn#tion o a3s# and ##t b#t@##n a3lt or n#glig#n# o t/# d##ndant and t/# da9ag#s in3rr#d b4 8lainti' T/# 8#rtin#nt 8arts o @/i/ 8ro;id#s t/at #98lo4#rs s/all b# liabl# or da9ag#s a3s#d b4 t/#ir #98lo4##s and /o3s#/old /#l8#rs ating @it/in t/# so8# o t/#ir assign#d tasDs< #;#n t/o3g/ t/# or9#r ar# not #ngag#d in an4 b3sin#ss or ind3str4' T/# r#s8onsibilit4 tr#at#d o in t/is artil# s/all #as# @/#n t/# 8#rsons /#r#in 9#ntion#d 8ro;# t/at t/#4 obs#r;#d all t/# dilig#n# o a good at/#r o a a9il4 to 8r#;#nt da9ag#' T/is aris#s b4 ;irt3# o a 8r#s398tion /uristantu$ o n#glig#n# on t/# 8art o t/# 8#rsons 9ad# r#s8onsibl# 3nd#r t/# artil#< d#ri;#d ro9 t/#ir ail3r# to ##ris# d3# ar# and ;igilan# o;#r t/# ats o s3bordinat#s to 8r#;#nt t/#9 ro9 a3sing da9ag#' N#glig#n# is i983t#d to t/#9 b4 la@< 3nl#ss t/#4 8ro;# t/# ontrar4' It s/o3ld b# born# in 9ind t/at t/# l#gal obligation o #98lo4#rs to obs#r;# d3# dilig#n# in t/# s#l#tion and s38#r;ision o #98lo4##s is not to b# onsid#r#d as an #98t4 8la4 o @ords or a 9#r# or9alis9< as a88#ars to b# t/# as/ion o t/# ti9#s< sin# t/# non(obs#r;an# t/#r#o at3all4 b#o9#s t/# basis o t/#ir ;iario3s liabilit4 3nd#r Artil# .%+*'
"3# dilig#n# in t/# s38#r;ision o #98lo4##s inl3d#s or93lation o r3l#s and r#g3lations or t/# g3idan# o #98lo4##s and t/# iss3an# o 8ro8#r instr3tions int#nd#d or t/# 8rot#tion o t/# 83bli 8#rsons @it/ @/o9 t/# #98lo4#r /as r#lations t/ro3g/ /is or its #98lo4##s' It also inl3d#s disi8linar4 9#as3r#s in as#s o br#a/ o t/# #98lo4## to t/# r#g3lations' T/# o3rt r#it#rat#d t/at t/# 9#r# or93lation o ;ario3s o98an4 8olii#s on sa#t4 @it/o3t s/o@ing tat t/#4 @#r# b#ing o98li#d @it/ is not s3ii#nt to ##98t t/#9 ro9 liabilit4 arising ro9 n#glig#n# o its #98lo4##s'
Pag# $ +.
Obligations and Contrats! "otrin#s and Cas# "ig#sts
T/#r#or#< t/# o3rt /#ld ::TC to b# solidaril4 liabl#< along @it/ t/# ot/#r o#nd#rs< or t/# da9ag#s against C3stodio'
EOLE 0. SENDA:DIEGO &GR' No' L(11.0)- +%SCRA %.*- .* 2an3ar4 %,6+5
A6uino, J.: )a=ts? T/r## as#s o 9al;#rsation t/ro3g/ alsiiation @as il#d against Li#rio P' S#nda4di#go in ons8ira4 @it/ 23an Sa9son and Anastaio>3iri9it as an ao98li# or 3sing si org#d ;o3/#r to #9b#l# t/# a9o3nt o P/8 06<*)+'.1' T/# Lo@#r o3rt a3itt#d t/# a3ditor and o3nd S#nda4di#go and Sa9son g3ilt4 o 9al;#rsation t/ro3g/ alsiiation' S#nda4di#go and Sa9son il#d an a88#al to t/# S38r#9# Co3rt' Ho@#;#r< S#nda4di#go di#d on *0 Otob#r %,67' His a88#al to /is ri9inal liabilit4 @as dis9iss#d in a r#sol3tion dat#d *+ 23l4 %,66'
Issue? W/#t/#r or not in t/# #;#nt o t/# d#at/ o S#nda4di#go< /is #stat# s/o3ld still b# i;ill4 liabl# to t/# Pro;in# o Pangasinan and t/#r#or# /is ri9inal liabilit4 s/o3ld still b# r#sol;#d i t/#4 ar# i;ill4 liabl# or s3/ da9ag#s'
7el"? Y#s'S#nda4di#gos #stat# s/o3ld still b# i;ill4 liabl# to t/# Pro;in# o Pangasinan and t/#r#or# /is ri9inal liabilit4 s/o3ld still b# r#sol;#d i t/#4 ar# i;ill4 liabl# or s3/ da9ag#s' T/# i;il ation or t/# i;il liabilit4 is d##9#d i98li#dl4 instit3t#d @it/ t/# ri9inal ation in t/# abs#n# o #8r#ss @ai;#r or its r#s#r;ation in a s#8arat# ation' W/#n t/# ation is or t/# r#o;#r4 o 9on#4 and t/# d##ndant di#s b#or# inal 3dg9#nt in t/# Co3rt o First Instan#< it s/all b# dis9iss#d to b# 8ros#3t#d in t/# 9ann#r #s8#iall4 8ro;id#d in t/# R3l# o Co3rt' T/# i98liation is t/at i t/# d##ndant di#s at#r a 9on#4 3dg9#nt /ad b##n r#nd#r#d against /i9 b4 t/# Co3rt o First Instan#< t/# ation s3r;i;#s /i9' In so9# instan#s an ao3ntabl# 83bli oi#r 9a4 still b# i;ill4 liabl# or t/# 3nds i98ro8#rl4 disb3rs#d alt/o3g/ /# /as no ri9inal liabilit4'
Pag# $ +1
Obligations and Contrats! "otrin#s and Cas# "ig#sts
In t/# 8r#s#nt as#< t/# dis9issal o t/# a88#al o t/# d##as#d S#nda4di#go insoar as /is ri9inal liabilit4 is on#rn#d< t/# o3rt d#id#d to ontin3# ##rising a88#llat# 3risdition o;#r /is 8ossibl# i;il liabilit4 in aordan# @it/ t/# Artil# 1* o t/# Ci;il Cod#' T/#r#or#< t/# d#at/ o S#nda4di#go< /is #stat# s/o3ld still b# i;ill4 liabl# to t/# Pro;in# o Pangasinan and t/#r#or# /is ri9inal liabilit4 s/o3ld still b# r#sol;#d i t/#4 a r# i;ill4 liabl# or s3/ da9ag#s'
EOLE %. BA:OTAS &G'R' No' %*.**6- .17 SCRA .00- *. S#8t#9b#r %,,)5
4o$ero, J.: )a=ts? Rog#lio Ba4otas @as il#d @it/ /arg#s o ra8# and @as #;#nt3all4 on;it#d t/#r#o' P#nding t/# a88#al o /is on;ition< Ba4otas di#d on *) F#br3ar4 %,,. at t/# National Bilibid Hos8ital' Cons#3#ntl4 t/# S38r#9# Co3rt dis9iss#d t/# ri9inal as8#t o t/# a88#al' Ho@#;#r< t/# o3rt r#3ir#d t/# Soliitor G#n#ral to il# its o99#nts r#garding t/# i;il liabilit4 o t/# d##as#d' In /is o99#nt< t/# Soliitor G#n#ral #8r#ss#d /is ;i#@ t/at t/# d#at/ o t/# a3s#d a88#llant did not #ting3is/ /is i;il liabilit4 as a r#s3lt o /is o99ission o t/# /arg#d' T/# Soliitor G#n#ral r#li#d on t/# as# o P#o8l# ;' S#nda4di#go' T/# o3ns#l or t/# a3s#d a88#llant o88os#d t/# ;i#@ o t/# Soliitor G#n#ral t/at t/# d#at/ o t/# a3s#d #ting3is/#d bot/ /is ri9inal and i;il 8#nalti#s< r#l4ing to t/# as# o P#o8l# ;' Castillo and O#9ia @/i/ /#ld t/at i;il obligation in a ri9inal as# taD#s roots in t/# ri9inal liabilit4'
Issue? W/#t/#r or not t/# d#at/ o t/# a3s#d 8#nding a88#al o /is on;ition #ting3is/ /is i;il liabilit4'
7el"? Y#s< t/# d#at/ o t/# a3s#d 8#nding a88#al o /is on;ition #ting3is/ /is i;il liabilit4' In 83rs3ing r#o;#r4 o i;il liabilit4 arising ro9 ri9#< t/# inal d#t#r9ination o t/# ri9inal liabilit4 is a ondition 8r##d#nt to t/# 8ros#3tion o t/# i;il ation< s3/ t/at @/#n t/# ri9inal ation is #ting3is/#d b4 t/# d#9is# o a3s#d(a88#llant 8#nding a88#al t/#r#o< said i;il ation annot s3r;i;#' T/# i;il liabilit4 s8rings o3t o and is d#8#nd#nt 38on ats< @/i/ i tr3#< @o3ld onstit3t# a ri9#'
Pag# $ +)
Obligations and Contrats! "otrin#s and Cas# "ig#sts
In t/# S#nda4di#go as#< alt/o3g/ Artil# 1* @as not a88li#d in t/# inal d#t#r9ination o t/# i;il liabilit4 t/#r# @as a r#o8#ning o t/# ri9inal as# to d#t#r9in# /is i;il liabilit4' T/# o3rt r#it#rat#d t/at 38on d#at/ o t/# a3s#d 8#nding t/# a88#al o /is on;ition t/# ri9inal ation is #ting3is/#d in as 93/ as t/#r# is no long#r a d##ndant to stand as t/# a3s#d- t/# i;il ation instit3t#d t/#r#in or r#o;#r4 o i;il liabilit4 e delicto is ipso facto #ting3is/#d gro3nd#d as it is on t/# ri9inal' Also t/# o3rt #98/asi#d t/at t/# lai9 or i;il liabilit4 s3r;i;#s not@it/standing t/# d#at/ o a3s#d i t/# sa9# 9a4 also b# 8r#diat#d in a so3r# o obligation ot/#r t/an d#lit' And i t/# i;il liabilit4 s3r;i;#s in aordan# @it/ t/# aor#9#ntion#d< an ation or r#o;#r4 t/#r#or 9a4 b# 83rs3#d b3t onl4 b4 @a4 o iling a s#8arat# i;il ation' In a88l4ing t/# s#t o r3l#s laid do@n b4 t/# o3rt< t/# d#at/ o t/# a88#llant Ba4otas #ting3is/#d /is ri9inal liabilit4 and t/# i;il liabilit4 bas#d sol#l4 on t/# at o ra8#' T/# a88#al is dis9iss#d @it/o3t 3aliiations'
0DA. DE A#AN %. SENERIS &G'R' No' L(1671.- %%0 SCRA 6*,- 1* 23l4 %,+.5
uerrero, J.: )a=ts? On .) :a4 %,7%< a3s#d r#s8ond#nt T#odoro "# los Santos @as /arg#d b4 t/# Cit4 Attorn#4 o Ja9boanga @it/ Ho9iid# t/r3 R#Dl#ss I98r3d#n# bas#d on t/# inid#nt t/at /a88#n#d on .% "##9b#r %,07in t/# Cit4 o Ja9boanga@/#n /# @as dri;ing a tr3D o@n#d b4 W#st#rn :indanao L39b#r Co' and @it/o3t 8r#a3tion Dill#d VitorianoPa9an' U8on arraign9#nt on .7 23n# %,6.< "# los Santos #nt#r#d t/# 8l#a o g3ilt4 and @as o3nd#d to b# t/# sa9#' On *) A3g3st %,6.< t/# 8#tition#r il#d a 9otion or ##3tion o t/# i;il liabilit4 o t/# a3s#d @/i/ @as grant#d on 1% A3g3st %,6.' Ho@#;#r< t/# S/#ris R#t3rn oS#r;i# s/o@#d t/at "# Los Santos /as no 8ro8#rt4 r#gist#r#d 3nd#r /is na9#' U8on t/is diso;#r4< 8#tition#r il#d a :otion or E#3tion o S3bsidiar4 Liabilit4 o E98lo4#r W#st#rn :indanao L39b#r Co' 3nd#r Artil# %*1 o R#;is#d P#nal Cod#' On *+ S#8t#9b#r %,61 r#s8ond#nt 3dg# d#ni#d t/# 9otion on t/# gro3nds t/at all#g#d #98lo4#r not /a;in b##n notii#d t/at its dir;#r is aing a ri9inal /arg#< /#n# a s#8arat# i;il ation 93st b# il#d'
Pag# $ +0
Obligations and Contrats! "otrin#s and Cas# "ig#sts
Issue? W/#t/#r or not t/# s3bsidiar4 liabilit4 #stablis/#d 3nd#r Artil# %*1 o t/# R#;is#d P#nal Cod# 9a4 b# #nor#d in t/# sa9# ri9inal as# @/#r# t/# a@ard @as 9ad#< or in a s#8arat# i;il ation'
7el"? T/# s3bsidiar4 liabilit4 9a4 b# #nor#d in t/# sa9# ri9inal as# @/#r# t/at a@ard @as 9ad#' Aording t/# S#tion %< R3l# %%% o t/# R3l#s o Co3rt @/#n a ri9inal ation is instit3t#d t/# i;il ation or r#o;#r4 o i;il liabilit4 arising ro9 t/# o#ns# /arg#d is i98li#dl4 instit3t#d @it/ t/# ri9inal ation< 3nl#ss t/# o#nd#d 8art4 #8r#ssl4 @ai;#s t/# i;il ation or r#s#r;#s /is rig/t to instit3t# it s#8arat#l4' It 9#ans t/at t/# i;il ation 9a4 b# tri#d and 8ros#3t#d< @it/ all t/# anillar4 8ro#ss#s 8ro;id#d b4 la@' In t/# 8r#s#nt as#< t/# 3dg9#nt o t/# r#s8ond#nt 3dg# is @ill r#nd#r t/# abo;#9#ntion#d 8ro;ision i t/# s3bsidiar4 i;il liabilit4 is not allo@#d to b# #nor#d in t/# sa9# 8ro##ding' T/#r#or#< t/# o3rt d#id#d to s#t asid# t/# ord#r o t/# r#s8ond#nt 3dg# and t/# o3rt a 3o @as ord#r#d to ond3t 3rt/#r 8ro##ding in t/# sa9# as# r#garding t/# s3bsidiar4 liabilit4 on t/# all#g#d #98lo4#r o t/# a3s#d r#s8ond#nt'
0ILLEGAS %. CA &G'R' No' +.07.- .6% SCRA %)+- %% A8ril %,,65
4o$ero, J.: )a=ts? T/is as# aris#s ro9 t/# lib#l as# il#d against Ass#9bl49an Antonio Ra3ia against t/# t/#n :anila :a4or Antonio 2' Vill#gas' It @as said t/at Vill#gas 83blil4 i983t#d Ra3ia ats in ;iolation o t/# Anti(Grat and Corr38t Prati#s At on /is s#;#ral s8##/#s' T/# o99itt## obs#r;#d t/at all t/# all#gations @#r# bas#d 8ri9aril4 on t/# t#sti9on4 o P#dro U' F#rnand#< @/os# r#dibilit4< as lat#r o3nd o3t< @as 3#stionabl#' Vill#gas ail#d to s3b9it /is do39#ntar4 #;id#n#s' As a r#s3lt< Ra3ia @as o3nd l#ar#d o all /arg#s b4 t/# o99itt##' T/is #;#nt gain#d t/# #t#nsi;# att#ntion ro9 t/# 9#dia' On .0 23l4 %,7,< t/# as# or lib#l @as il#d b4 t/# Oi# o t/# Fisal o :anila @it/ t/# t/#n Co3rt o First Instan# o :anila against Vill#gas< @/o d#ni#d all /arg#s' At#r losing t/# %,6% #l#tion< Vill#gas li;#d in t/# U'S'A @/#r# /# sta4#d 3ntil /is d#at/ on %7 No;#9b#r %,+)' Pag# $ +7
Obligations and Contrats! "otrin#s and Cas# "ig#sts
T/o3g/ Vill#gas @as abs#nt< t/# trial ontin3#d trial or t/# as# and b4 t/# ti9# o /is d#at/< t/# 8ros#3tion /ad r#st#d its as#' T@o 9ont/s at#r< t/# o3rt dis9iss#d t/# ri9inal as8#t o t/# as# b3t r#s#r;#d t/# rig/t to r#sol;# t/# i;il as8#t o t/# as#' In t/# 3dg9#nt r#nd#r#d on *6 :ar/ %,+0< t/o3g/ a3itting t/# d##as#d o /is ri9inal liabilit4< /is /#irs ar# liabl# or da9ag#s against t/# o#nd#d 8art4' Fro9 t/is 3dg9#nt< t/# Vill#gass /#irs a88#al#d to t/# Co3rt o A88#als' T/# CA< /o@#;#r< air9#d t/# trial o3rts 3dg9#nt b3t r#d3#d t/# a9o3nt o da9ag#s a@ard#d'
Issue? W/#t/#r or not t/# d#at/ o t/# a3s#d b#or# t/# inal 3dg9#nt #ting3is/ /is i;il liabilit4'
7el"? Y#s< t/# d#at/ o t/# a3s#d b#or# t/# inal 3dg9#nt #ting3is/#d /is i;il liabilit4' As t/# o3rt /#ld in t/# as# o 5eople v. Kayotas ! t/# s3r;i;al o t/# i;il liabilit4 d#8#nds on @/#t/#r t/# sa9# an b# 8r#diat#d on so3r#s o obligations ot/#r t/an d#litM T/# lai9 or i;il liabilit4 is also #ting3is/#d tog#t/#r @it/ t/# ri9inal ation i it @#r# sol#l4 bas#d t/#r#on< i'# i;il liabilit4 # d#lito' T/# lai9 or i;il liabilit4 s3r;i;#s not@it/standing t/# d#at/ o a3s#d i t/# sa9# 9a4 also b# 8r#diat#d in a so3r# o obligation ot/#r t/an d#lit' And i t/# i;il liabilit4 s3r;i;#s in aordan# @it/ t/# aor#9#ntion#d< an ation or r#o;#r4 t/#r#or 9a4 b# 83rs3#d b3t onl4 b4 @a4 o iling a s#8arat# i;il ation' In t/# 8r#s#nt as#< t/# o3rt a 3o s/o3ld /a;# dis9iss#d bot/ ations against Vill#gas @/i/ dis9issal s/all not sto8 Ra3ia ro9 83rs3ing /is lai9 or da9ag#s against t/# /#irs o t/# or9#r' T/#r#or#< t/# o3rt r3l#d to r#;#rs# t/# CA and trial o3rts r3ling and grant#d t/# 8#tition o t/# /#irs o Vill#gas< @it/o3t t/# 8r#3di# to t/# rig/t o Ra3ia as t/# 8ri;at# o#nd#d 8art4 in t/# lib#l as# to instit3t# a i;il ation or da9ag#s against t/# /#irs o t/# d##as#d Vill#gas'
7EIRS O) T7E LATE TEODORO G/ARING, JR. %. CA Pag# $ +6
Obligations and Contrats! "otrin#s and Cas# "ig#sts
&G'R' No' %*+1,0- .7, SCRA .+1- *6 :ar/ %,,65
2endoa, J.: )a=ts? T/is as# start#d on t/# ;#/i3lar aid#nt on t/# *6 No;#9b#r %,+6 along Nort/ E8r#ss@a4 in Pa98anga in;ol;ing a :its3bis/i Lan#r dri;#n b4 T#odoroG3aring< 2r' and s#at#d b#sid# /i9 @as Boniaio Cl#9#nt#< a P/ili88in# Rabbit B3s dri;#n b4 Ang#l# C3#;as< and a To4ota Cr#ssida ar dri;#n b4 Sgt'Eligio Enri3# @it/ /is 9ot/#r< @i# and da3g/t#r as /is 8ass#ng#rs' T/# 8#tition#rs il#d a as# or da9ag#s against 8ri;at# r#s8ond#nts' Bas#d on t/#ir #;id#n#< t/# b3s tri#d to o;#rtaD# G3arings ar b4 8assing on t/# rig/t s/o3ld#r o t/# road and t/at in so doing it /it t/# r#ar 8ortion o G3arings ar' T/# i98at a3s#d t/# Lan#r to s@#r;# on t/# so3t/ bo3nd lan# and ollid#d @it/ t/# Enri3#s ar' T/is ollision Dill#d G3aring and Sgt' Enri3#s 9ot/#r and in3r#d Cl#9#nt# and t/# o38ants o t/# Cr#ssida ar' T/# 8ri;at# r#s8ond#nt< /o@#;#r< 8r#s#nt#d an #;id#n# ont#nding t/at t/# aid#nt @as d3# to t/# n#glig#n# o G3aring< lai9ing t/at it @as G3aring @/o tri#d to o;#rtaD# t/# ;#/il# and in so doing #nroa/#d t/# So3t/ bo3nd lan# and ollid#d @it/ t/# Cr#ssida and as a r#s3lt o t/# ollision t/# Lan#r @as t/ro@n baD to t/# lan# @/#r# it ras/#d @it/ t/# b3s' On %7 :a4 %,,*< t/# trial o3rt r#nd#r#d 3dg9#nt t/at 8ri;at# r#s8ond#nts @#r# at a3lt and t/3s solidaril4 liabl# to t/# 8#tition#rs' P/ili88in# Rabbit B3s In' a88#al#d t/# d#ision o t/# trial o3rt and on %7 "##9b#r %,,.< t/# CA /#ld t/at t/# d#ision o t/# trial o3rt s/all b# s#t asid# and dis9iss#s t/# o98laint against t/# 8ri;at# r#s8ond#nts on t/# gro3nds o t/# a3ittal o t/# b3s dri;#r ro9 t/# /arg#s o r#Dl#ss i98r3d#n# r#s3lting to da9ag# to 8ro8#rt4 and do3bl# /o9iid#' T/# CA /#ld t/at sin# t/# i;il liabilit4 @as 8r#diat#d 38on t/# /arg#d ri9inal o#ns# and t/at s3/ is o3nd non(#ist#nt< it ollo@s t/at t/# a3ittal o t/# a3s#d in t/# ri9inal as# arri#s @it/ it t/# #tintion o t/# i;il liabilit4 arising ro9 it' H#n#< t/# 8r#s#nt 8#tition'
Issue? W/#t/#r or not t/# 3dg9#nt in t/# ri9inal as# #ting3is/#d t/# liabilit4 o 8ri;at# r#s8ond#nts or da9ag#s or t/# d#at/ o G3aring'
7el"? Pag# $ ++
Obligations and Contrats! "otrin#s and Cas# "ig#sts
No< t/# 3dg9#nt in t/# ri9inal as# do#s #ting3is/#d t/# liabilit4 o 8ri;at# r#s8ond#nts or da9ag#s or t/# d#at/ o G3aring' T/# 8r#s#nt ation @as instit3t#d 83rs3ant to Art' .%67 o t/# Ci;il Cod#< @/i/ 8ro;id#s! Art' .%67' W/o#;#r b4 at or o9ission a3s#s da9ag# to anot/#r< t/#r# b#ing a3lt or n#glig#n#< is oblig#d to 8a4 or t/# da9ag# don#' S3/ a3lt or n#glig#n#< i t/#r# is no 8r#(#isting ontrat3al r#lation b#t@##n t/# 8arti#s< is all#d a 3asi(d#lit and is go;#rn#d b4 t/# 8ro;isions o t/is C/a8t#r' It is no@ s#ttl#d t/at t/# a3ittal o t/# a3s#d< #;#n i bas#d on a inding t/at /# is not g3ilt4< do#s not arr4 @it/ it t/# #tintion o t/# i;il liabilit4 bas#d on 3asi d#lit' E;#n i da9ag#s ar# so3g/t on t/# basis o ri9# and not 3asi d#lit< t/# a3ittal o t/# b3s dri;#r @ill not bar r#o;#r4 o da9ag#s i t/# a3ittal @as bas#d not on a inding t/at /# @as not g3ilt4 b3t onl4 on r#asonabl# do3bt' In t/# 8r#s#nt as#< t/# a3ittal o t/# b3s dri;#r @as b#a3s# o t/# RTC #nt#rtaining r#asonabl# do3bt to /is g3ilt' T/# a88#llat# o3rt #rr#d in sDi88ing t/# r#;i#@ o t/# #;id#n# in t/is as# and bas#d its d#ision on t/# indings o t/# trial o3rt in t/# ri9inal as#' B4 doing t/is< t/# a88#llat# o3rt disr#gard#d t/# at t/at t/is as# /ad b##n instit3t#d ind#8#nd#ntl4 o t/# ri9inal as# and t/at 8#tition#rs /#r#in tooD no 8art in t/# ri9inal 8ros#3tion' T/#r#or#< t/# S38r#9# Co3rt d#id#d to r#;#rs# t/# CAs r3ling and r#9and#d t/# as# baD @it/ an ord#r to d#id# t/# as# in t/# basis o t/# #;id#n# 8r#s#nt#d in t/# i;il as#'
AG/ILAR, Sr. %. CO##ERCIAL SA0INGS BAN@ &G'R' No' %.+6*0- 17 SCRA 1,0- ., 23n# .**%5
'uisu$#ing, J.: )a=ts? P#tition#r is t/# at/#r o Conrado Ag3ilar< 2r' @/o di#d at#r g#tting in;ol;#d in a ;#/i3lar aid#nt @it/ a Lan#r ar 3nd#r t/# na9# o t/# r#s8ond#nt banD and dri;#n b4 t/# o( r#s8ond#n F#rnando Bora on *+ S#8t#9b#r %,+)' Ag3ilar< 2r' @as rossing t/# str##t @it/ /is o98anions< as t/#4 @#r# rossing t/# str##t< t/# Lan#r o;#rtooD a ##8n#4 and /it Ag3ilar' H# @as bro3g/t to t/# /os8ital b3t /# @as 8rono3n#d d#ad on arri;al' On ., 23l4 %,+0< t/# 8#tition#rs il#d a o98laint or da9ag#s against r#s8ond#nt b3t t/# latt#r ail#d to il# /is ans@#r @it/in t/# r#gl#9#ntar4 8#riod and t/3s /# @as d#lar#d d#a3lt b4 t/# o3rt'
Pag# $ +,
Obligations and Contrats! "otrin#s and Cas# "ig#sts
"3ring t/# trial< t/# banD ad9itt#d t/at t/# ar @as 3nd#r t/#ir na9# at t/# ti9# o t/# inid#nt' P#tition#rs t/#n @as abl# to s/o@ t/at Bora @as n#glig#nt' On %) 23n# %,,%< t/# o3rt /#ld t/at t/# r#s8ond#nts @#r# liabl# or Ag3ilars d#at/' T/# trial o3rt d#lar#d t/at Boras n#glig#n#< ar#l#ssn#ss and i98r3d#n# a3s#d t/# ;iti9s d#at/' It also o3nd t/at Bora< as assistant ;i# 8r#sid#nt o r#s8ond#nt banD at t/# ti9# o t/# inid#nt< 3nd#r Art' .%+*&15 o t/# Ci;il Cod#< t/# n#glig#n# o t/# #98lo4## is 8r#s39#d to b# t/at o t/# #98lo4#r< @/os# liabilit4 is 8ri9ar4 and dir#t- and t/at r#s8ond#nt banD ail#d to ##ris# d3# dilig#n# in t/# s#l#tion o its #98lo4##s' R#s8ond#nt banD a88#al#d to t/# Co3rt o A88#als< @/i/ r#;#rs#d t/# r3ling o t/# trial o3rt on t/# gro3nds t/at t/#r# is no #;id#n# t/at Bora /ad at#d as r#s8ond#nt banDs assistant ;i#( 8r#sid#nt at t/# ti9# o t/# aid#nt' A 9otion or r#onsid#ration< il#d b4 t/# 8#tition#r< @as d#ni#d' T/3s< t/# 8r#s#nt 8#tition'
Issue? W/#t/#r or not r#s8ond#nt banD< as t/# Lan#rs r#gist#r#d o@n#r< is liabl# or da9ag#s
7el"? Y#s< t/# r#s8ond#nt banD is liabl# or da9ag#s' T/# S38r#9# Co3rt stat#d t/# 8ast r3ling ro9 t/# as# o KA inance Corporation v. CA t/at t/# r#gist#r#d o@n#r o an4 ;#/il#< #;#n i not or 83bli s#r;i#< is 8ri9aril4 r#s8onsibl# to t/ird 8#rsons or an4 da9ag#s it a3s#d' Also< t/# o3rt /#ld in t/# as# o Ireo v. Jepte t/at t/# rational# or /olding t/# r#gist#r#d o@n#r o a ;#/il# to b# dir#tl4 liabl# is t/at r#gistration is r#3ir#d not to 9aD# said r#gistration t/# o8#rati;# at b4 @/i/ o@n#rs/i8 in ;#/il# is trans#rr#d b3t to 8#r9it t/# 3s# and o8#ration o t/# ;#/il# 38on an4 83bli /ig/@a4' T/# 9ain ai9 o t/# 9otor ;#/il# r#gistration is to id#nti4 t/# o@n#r in as# an4 da9ag# or in3r4 is a3s#d b4 t/# ;#/il# on 83bli /ig/@a4s< r#s8onsibilit4 t/#r#or an b# i#d on a d#init# indi;id3al< t/# r#gist#r#d o@n#r' In a88l4ing s3/ 3ris8r3d#n# to t/# 8r#s#nt as#< t/# o3rt /#ld t/at t/# banD is 8ri9aril4 r#s8onsibl# or t/# da9ag#s a3s#d b4 t/# ;#/il#' T/# banD< /o@#;#r< still /as t/# rig/t to b# ind#9nii#d b4 t/# r#al or at3al o@n#r o t/# a9o3nt t/at /# 9a4 b# r#3ir#d to 8a4 as da9ag#s' T/#r#or#< t/# d#ision o t/# Co3rt o A88#als is r#;#rs#d and t/# d#ision o t/# trial o3rt is air9#d< /olding t/# r#s8ond#nt banD liabl# or da9ag#s' Pag# $ ,*
Obligations and Contrats! "otrin#s and Cas# "ig#sts
4. CO#LIANCE O) RESTATIONS =1 GENERALL: * ART. &9 "1 SECI)ICALL: i%. TO GI0E >REAL OBLIGATION1 * ARTS. &&( TO && %. TO DO >ERSONAL OBLIGATION1 * ART. &&2 %i. NOT TO DO >ERSONAL OBLIGATION1 * ART. &&4 9. BREAC7 O) OBLIGATIONS <1 CA/SES? ART. &&26 i%. )RA/D (. ART. &&2& 0S. ART. &((4 5. DOLO INCIDENTE 0S. DOLO CA/SANTE %. NEGLIGENCE 5. ARTS. &&2- AND &&2( +. C/LA CONTRACT/AL 0S. C/LA A/ILIANA >OR C/LA E'CONTRACT/1 . )ORT/ITO/S E0ENT * ART. &&25 <1 RE/ISITES O) )ORT/ITO/S E0ENT CASES? LASA# %. S#IT7 &G'R' No' %,),0- )0 P/il 706- *. F#br3ar4 %,.)5
"strand, J.: )a=ts? .% F#br3ar4 %,%+ d##ndant is on t/# b3sin#ss o arr4ing 8ass#ng#rs ro9 on# 8oint to anot/#r in t/# Pro;in# o La Union and s3rro3nding 8ro;in#s and @as /ir#d b4 t/# 8lainti in a ord a3to9obil#' W/il# l#a;ing San F#rnando< t/# ;#/il# @as dri;#n b4 a li#ns#d dri;#r< /o@#;#r /a;ing r#a/#d t/# to@n o San 23an< t/# dri;#r allo@#d /is assistant< R#9igio B3#no to dri;# t/# ar' At#r rossing t/# Abra Ri;#r in Tag3din< d##ts d#;#lo8#d in t/# st##ring g#ar so as to 9aD# a3rat# st##ring i98ossibl# and at#r igagging< t/# ar l#t t/# road and @#nt do@n a st##8 #9banD9#nt' T/# d##ndant a;#rr#d t/at t/#r# @as no 8robl#9 @it/ t/# st##ring g#ar b#or# nor at#r t/# aid#nt and t/at t/# igagging 93st /a;# b##n a3s#d b4 t/# ##ssi;# rat# o s8##d in @/i/ it @as dri;#n' T/# a3to9obil# @as o;#rt3rn#d and 8inn#d t/# 8laintis do@n 3nd#r it' :r' Lasa9 #sa8#d @it/ a #@ on3ssions and a disloat#d rib< b3t :rs 'Lasa9 r##i;#d s#rio3s 8/4sial in3ri#s' S/# also /ad n#r;o3s br#aDdo@ns'
Pag# $ ,%
Obligations and Contrats! "otrin#s and Cas# "ig#sts
T/# o98laint @as il#d abo3t a 4#ar and a /al at#r t/# inid#nt o3rr#d' It all#g#d t/at t/# a3to9obil# as @#ll as to t/# ino98#t#n# and n#glig#n# o t/# dri;#r and t/at t/# liabilit4 o t/# d##ndant is in aordan# @it/ t/# Artil# %,*1 o t/# Ci;il Cod#' T/# trial o3rt /#ld t/at t/# a3s# o ation r#st on t/# d##ndants br#a/ o ontrat o arriag# and t/at Artil# %%*% %%*6 o t/# Ci;il od# s/all go;#rn' It also stat#d t/at t/# br#a/ o ontrat is not d3# a ort3ito3s #;#nt and t/#r#or# d##ndant is liabl# or da9ag#s'
Issue? W/#t/#r or not t/# aid#nt is a ort3ito3s #;#nt'
7el"? No< t/# aid#nt t/at /a88#n#d is not a ort3ito3s #;#nt' T/# o3rt agr##s @it/ t/# r3ling o t/# lo@#r o3rt @/#n it o3nd t/at t/# d##ndants liabilit4 is ontrat3al' B4 #nt#ring in t/# ontrat o arriag#< /# bo3nd /i9s#l to d#li;#r t/# 8laintis sa#l4 and s#3r#l4 to t/#ir d#stination and /a;ing ail#d to do so< /# is liabl# or da9ag#s< ##8t in ti9#s @/#n s3/ br#a/ o3rr#d in aordan# @it/ t/# Artil# %%*0 no@ Artil# %%6) @/i/ stat#s! No on# s/all b# liabl# or #;#nts @/i/ o3ld not b# or#s##n or @/i/< #;#n i or#s##n< @#r# in#;itabl#< @it/ t/# ##8tion o t/# as#s in @/i/ t/# la@ #8r#ssl4 8ro;id#s ot/#r@is# and t/os# in @/i/ t/# obligation its#l i98os#s s3/ liabilit4' T/# S38r#9# Co3rt stat#d t/at t/# #8r#ssion Q#;#nts @/i/ annot b# or#s##n and @/i/ /a;ing b##n or#s##n< ar# in#;itabl#Q is s4non49o3s @it/ t/# t#r9 Qort3ito3s #;#ntQ casofortuito o @/i/ so9# #traordinar4 ir39stan# ind#8#nd#nt o t/# @ill o t/# obligor< or o /is #98lo4##s< is on# o t/# #ss#ntial #l#9#nts' In t/# 8r#s#nt as#< t/# abo;# 9#ntion#d #l#9#nt is laDing or t/# d##ndants to 3s# t/# d##ns# o ort3ito3s #;#nt' T/# said aid#nt @as a3s#d #it/#r b4 d##ts in t/# a3to9obil# or #ls# t/ro3g/ t/# n#glig#n# o its dri;#r and s3/ ar# not ort3ito3s #;#nts' T/#r#or#< t/# r#s8ond#nts ar# liabl# or da9ag#s'
SER0ANDO %. 7ILIINE STEA# NA0IGATION CO. &G'R No' L(17)+%- %%6 SCRA +1.- .1 Otob#r %,+.5
Iscolin, J.: )a=ts? Pag# $ ,.
Obligations and Contrats! "otrin#s and Cas# "ig#sts
On *7 No;#9b#r %,71< Plaintis load#d on board t/# r#s8ond#nts ;#ss#l %<0.+ a;ans o ri# or Clara U4 Bio and )) artons o olor#d 8a8#r or A98aro S#r;ando' U8on arri;al o t/# ;#ss#l to its d#stination< t/# argos @#r# dis/arg#d and 8la#d in t/# @ar#/o3s# o t/# B3r#a3 o C3sto9s @/i/ @as ra#d @it/ ir# aro3nd . o loD in t/# at#rnoon< t/at sa9# da4' B#or# t/# ir#< U4 Bio @as abl# to g#t ,*6 a;ans o ri#' T/# 8laintis @ant#d to lai9 t/# ;al3# o said good @/i/ @#r# d#stro4#d b4 t/# ir#' T/# lo@#r o3rt d#id#d in a;or o t/# 8laintis' It stat#d t/at Artil# %617 o t/# i;il od# i98os#s 38on o99on arri#rs t/# d3t4 to obs#r;# #traordinar4 dilig#n# ro9 t/# 9o9#nt t/# goods ar# 3nonditionall4 8la#d in t/#ir 8oss#ssion Q3ntil t/# sa9# ar# d#li;#r#d< at3all4 or onstr3ti;#l4< b4 t/# arri#r to t/# onsign## or to t/# 8#rson @/o /as a rig/t to r##i;# t/#9< @it/o3t 8r#3di# to t/# 8ro;isions o Artil# %61+' It 3rt/#r stat#d t/# d#li;#r4 o t/# s/i89#nt in 3#stion to t/# @ar#/o3s# o t/# B3r#a3 o C3sto9s is not t/# d#li;#r4 ont#98lat#d b4 Artil# %617- and sin# t/# b3rning o t/# @ar#/o3s# o3rr#d b#or# at3al or onstr3ti;# d#li;#r4 o t/# goods to t/# a88#ll##s< t/# loss is /arg#abl# against t/# a88#llant' Ho@#;#r< aording to t/# bill o lading iss3#d or t/# argo#s 8ro;id#d t/at t/# 8arti#s agr##d to li9it t/# r#s8onsibilit4 o t/# arri#r or t/# loss or da9ag# t/at 9a4 b# a3s#d to t/# s/i89#nt' T/3s< t/# 8r#s#nt 8#tition'
Issue? W/#t/#r or not t/# r#s8ond#nts ar# liabl# or da9ag#s'
7el"? No< t/# P/ili88in# St#a9 Na;igation Co' is not liabl# or t/# da9ag#s against t/# 8laintis' T/# o3rt agr##s @it/ t/# ;alidit4 o t/# 8ro;ision in t/# bill o lading< as it is not ontrar4 to la@< 9orals or 83bli 8oli4' T/o3g/ t/# 8laintis ont#nd t/at t/#4 did not sign it< it @as /#ld t/at t/#4 @#r# bo3nd b4 t/# 8ro;isions t/#r#o< as 8r#;io3sl4 /#ld in t/# as# o OngY3i ;' CA' Also< t/# 3#stion#d 8ro;ision is a 9#r# it#ration o t/# baso 8rini8l# o la@ in Artil# %%6) o t/# Ci;il Cod# @/i/ 8#rtains to t/# ##98tion o t/# obligor ro9 liabilit4 in as#s o loss d3# to ort3ito3s #;#nts' >3oting t/# Enilo8#dia23ridiada Es8anola< t/# o3rt #n39#rat#d t/# /arat#ristis o a ort3ito3s #;#nt! % t/# a3s# o t/# 3nor#s##n and 3n#8#t#d o3rr#n#< or o t/# ail3r# o t/# d#btor to o98l4 @it/ /is obligation< 93st b# ind#8#nd#nt o t/# /39an @ill. it 93st b# i98ossibl# to or#s## t/# #;#nt @/i/ onstit3t#s t/# Kasoort3itoK< or i it an b# or#s##n< it 93st b# i98ossibl# to a;oid1 t/# o3rr#n# 93st b# s3/ as to r#nd#r it i98ossibl# or t/# d#btor to 3lill /is obligation in a nor9al 9ann#r- and Pag# $ ,1
Obligations and Contrats! "otrin#s and Cas# "ig#sts
) t/# obligor 93st b# r## ro9 an4 8artii8ation in t/# aggra;ation o t/# in3r4 r#s3lting to t/# r#ditor' In t/# 8r#s#nt as#< t/#r# is no 8roo t/at t/# r#s8ond#nt in3rr#d d#la4 in 3lilling t/#ir obligation' T/#4 not onl4 ontat#d t/# 8laintis o t/# arri;al o t/#ir argo#s b3t also d#9and#d t/at it b# @it/dra@n' Nor t/#r# is an #;id#n# s/o@ing t/at t/# r#s8ond#nt @as n#glig#nt in t/# 3lill9#nt o t/#ir @orD' T/# @ar#/o3s# t/at b3rn#d @as o@n#d b4 t/# go;#rn9#nt and it @o3ld b# 3nair to i983t# n#glig#n# to t/# r#s8ond#nt @/#n it /as no ontrol o;#r t/# said @ar#/o3s#' T/#r# is also no 8roo t/at t/# a3s# o t/# ir# @as in an4 @a4 attrib3tabl# to t/# n#glig#n# o t/# r#s8ond#nt' T/#r#or#< t/# r#s8ond#nt is not liabl# or da9ag#s to t/# 8laintis'
A/STRIA %. CA &G'R' No' L(.,7)*- 1, SCRA 0.6- %* 23n# %,6%5 Re*es, J.B.L., J.:
)a=ts? :aria G' Abad r##i;#d ro9 G3ill#r9o A3stria a 8#ndant @it/ dia9ond ;al3#d at P)<0**'**< @/i/ @as to b# sold b4 t/# or9#r on o99ission basis or to b# r#t3rn#d 38on t/# latt#rs d#9and' On *% F#br3ar4 %,7%< @/il# @alDing on /#r @a4 /o9# in :andal34ong< Abad @as robb#d' A9ong t/os# @/i/ @#r# taD#n b4 t/# robb#rs @as t/# 8#ndant' T/is r#s3lt#d to t/# ail3r# o Abad to r#t3rn t/# 8#ndant to A3stria' T/# 8#tition#r t/#n il#d @it/ t/# Co3rt o First Instan# o :anila an ation against Abad and /#r /3sband or t/# r#o;#r4 o t/# 8#ndant or o its ;al3# and da9ag#s' T/# r#s8ond#nts /o@#;#r ass#rt#d t/at t/# all#g#d robb#r4 /ad #ting3is/#d t/#ir obligation' T/# trial o3rt d#id#d in a;or o t/# 8laintiand ord#r#d t/# s8o3s#s to 8a4 t/# 8lainti' "##ndants t/#n il#d a88#al to t/# CA @/i/ r#;#rs#d t/# r3ling o t/# lo@#r o3rt' It d#lar#d t/at t/# r#s8ond#nts ar# not r#s8onsibl# or t/# loss o t/# #@#lr4 on ao3nt o ort3ito3s #;#nt'
Issue? W/#t/#r or not in ontrat o ag#n4< it is n##ssar4 t/at t/#r# b# a 8rior on;ition or robb#r4 b#or# t/# loss o t/# artil# s/all ##98t t/# onsign## ro9 liabilit4 or s3/ loss'
7el"? No< it is not n##ssar4 t/at t/#r# b# a 8rior on;ition or robb#r4 b#or# t/# loss o t/# artil# s/all ##98t t/# onsign## ro9 liabilit4 or s3/ loss
Pag# $ ,)
Obligations and Contrats! "otrin#s and Cas# "ig#sts
T/# Artil# %%6) o t/# Ci;il Cod# 8ro;id#s or t/# #tintion o liabilit4 o t/# d#btors or obligors in as#s o ort3ito3s #;#nts' Casoortuito @o3ld ##98t a 8#rson ro9 r#s8onsibilit4 o t/# loss o an ob#t o an obligation i all o its /arat#ristis ar# 8r#s#nt! % t/# #;#nt 93st b# ind#8#nd#nt o t/# /39an @ill or rat/#r< o t/# d#btorKs or obligorKs. t/# o3rr#n# 93st r#nd#r it i98ossibl# or t/# d#btor to 3lill t/# obligation in a nor9al 9ann#r- and t/at 1 t/# obligor 93st b# r## o 8artii8ation in or aggra;ation o t/# in3r4 to t/# r#ditor' To b# abl# to b# ##98t#d in aordan# @it/ t/# abo;# 8ro;ision< t/# o3rt /#ld t/at it is not n##ssar4 t/at t/# 8#rsons r#s8onsibl# or t/# #;#nt to b# o3nd or 83nis/#d' It is s3ii#nt to #stablis/ t/at t/# #nor#abl# #;#nt /a88#n#d did taD# 8la# @it/o3t an4 on3rr#nt a3lt on t/# d#btors 8art and an b# don# @it/ 8r#8ond#ran# o #;id#n#' Ho@#;#r to o98l#t#l4 r## t/# d#btor ro9 t/# liabilit4 b4 ort3ito3s #;#nt< s3/ d#btor 93st b# r## ro9 an4 ontrib3tor4 a3lt or n#glig#n#' In t/# 8r#s#nt as#< it @as 3nd#niabl# t/at d##ndant :aria Abad @as robb#d' H#n#< a88l4ing t/# abo;# r3ling< it is a88ar#nt t/at d##ndants ar# not liabl# or t/# loss o t/# 8#ndant' T/# o3rt< /o@#;#r< #98/asi#d t/at t/is r3ling is onl4 a88liabl# in t/is as#' T/# robb#r4 /a88#n#d %* 4#ars b#or# t/# d#ision @as r#nd#r#d< and it @as in %,7%< @/#n t/# ri9# rat# /ad not ar r#a/#d 4#t t/# l#;#l it /as attain#d b4 t/# ti9# t/# d#ision @as r#nd#r#d and ar 9or# as to t/is da4' T/#r#or#< t/# S38r#9# Co3rt /#ld t/at t/# d##ndants @#r# not liabl# or t/# loss o t/# 8#ndant'
O0ERSEAS BAN@ O) #ANILA %. CA &G'R' No' L(),101- %*0 SCRA ),- %% 23n# %,+%5
Karredo, J.:
)a=ts? Pri;at# r#s8ond#nt Ton4 "' Ta8ia< in /is a8ait4 as t/# attorn#4(in(at o Enri3#ta :i/#l d# C/a98o3rin TAPIA< instit3t#d t/# as# in t/# Co3rt o First Instan# against t/# 8r#s#nt Pag# $ ,0
Obligations and Contrats! "otrin#s and Cas# "ig#sts
8#tition#r TOB: or t/# oll#tion o t/# 8ro##ds o t/# ti9# d#8osit o t/# 8ri;at# r#s8ond#nt @it/ t/# 8#tition#r in t/# a9o3nt o P/8 %**<***'** @it/ an int#r#st o ) 8#r ann39' T/# trial o3rt r3l#d in a;or o t/# 8ri;at# r#s8ond#nts' T/# TOB: il#d an a88#al in t/# Co3rt o A88#als' CA onsid#r#d t/# ollo@ing #;#nts in r#nd#ring its d#isions! T/# C#ntral BanD iss3#d a r#sol3tion stating t/at t/# TOB: @as #l3d#d ro9 int#r(banD l#aring< its o8#ration @as also s3s8#nd#d' Und#r a C#ntral BanD r#sol3tion dat#d %1 A3g3st %,7+< it @as o98l#t#l4 orbidd#n to do b3sin#ss in 8r#8aration to its oribl# li3idation' T/# S38r#9# Co3rt /o@#;#r r#sol;#d to s#t t/#s# r#sol3tions asid# and 3rt/#r ord#r#d or its r#/abilitation< nor9aliation< and stabiliation' T/# CA /o@#;#r /#ld t/at t/# TOB: s/o3ld 8a4 t/# 8#tition#rs t/# a9o3nt o t/# ti9# d#8osit @it/ t/# int#r#st< t/#r#or# air9ing t/# trial o3rts d#ision' T/3s< t/# 8r#s#nt 8#tition'
Issue? W/#t/#r or not or t/# 83r8os#s o t/# 8a49#nt o int#r#st in 3#stion< sto88ag# o t/# o8#rations o a banD b4 a l#gal ord#r o li3idation 9a4 b# #3at#d @it/ t/# at3al #ssation o t/# banDs o8#ration < not di#r#nt< in its ##t< ro9 l#gal li3idation< t/# at3al #ssation /a;ing b##n ord#r#d b4 t/# C#ntral BanD'
7el"? No< it is 3tt#rl4 3nair to a@ard 8ri;at# r#s8ond#nt /is 8#tition or t/# 8a49#nt o int#r#st d3ring t/# 8#riod t/at t/# 8#tition#r banD @as not allo@#d to o8#rat# b4 t/# C#ntral BanD' T/# Co3rt taD#s 3diial noti# t/at @/at #nabl#s a banD to 8a4 sti83lat#d int#r#st on 9on#4 d#8osit#d @it/ it is t/at t/ro3g/ t/# ot/#r as8#ts o its o8#ration it is abl# to g#n#rat# 3nds to o;#r t/# 8a49#nt o s3/ int#r#st' Unl#ss a banD an l#nd 9on#4< #ngag# in int#rnational transations< a3ir# or#los#d 9ortgag#d 8ro8#rti#s or t/#ir 8ro##ds and g#n#rall4 #ngag# in ot/#r banDing and inaning ati;iti#s ro9 @/i/ it an d#ri;# ino9#< it is inon#i;abl# /o@ it an arr4 on as a d#8ositor4 obligat#d to 8a4 sti83lat#d int#r#st' T/# sto88ing o t/# TOB:s o8#ration b4 t/# C#ntral BanD< @/i/ @as o3nd to b# ill#gal b4 t/# S38r#9# Co3rt 9a4 b# onsid#r#d as or# 9a#3r#' TOB: /as no /oi# b3t to ollo@ t/# r#sol3tions iss3#d b4 t/# CB @/il# t/# as# is 8#nding r#sol3tion' T/o3g/ t/# S38r#9# Co3rt r#nd#r#d in a;or o t/# banD< it still r#9ains t/at TOB: @as 3nabl# to #arn t/# ino9#'
Pag# $ ,7
Obligations and Contrats! "otrin#s and Cas# "ig#sts
T/#r#or#< t/# S38r#9# Co3rt d#id#d to r#;#rs# t/# r3ling o t/# CA in r#gards t/# 8a49#nt o t/# TOB: o t/# int#r#sts in3rr#d b4 t/# ti9# d#8osit at t/# ti9# t/# banD @as orbidd#n to o8#rat# b4 t/# C#ntral BanD'
O0ERSEAS BAN@ O) #ANILA %. CA &G'R' No' L(110+.- %%1 SCRA 66+- 1* :ar/ %,+.5
Iscolin, J.: )a=ts? On .* 23l4 %,76< t/# 8ri;at# r#s8ond#nt o8#n#d a on#(4#ar ti9# d#8osit @it/ TOB: @it/ t/# a9o3nt o P/8 +*<***'** @/i/ @ill 9at3r# on .* 23l4 %,7+ @it/ an int#r#st rat# o 7 8#r ann39' T/# TOB: ail#d to 8a4 Pri;at# R#s8ond#nt b#a3s# o distr#ss#d inanial ondition' T/# #nor# 8a49#nt 8ri;at# r#s8ond#nt il#d t/# as# in t/# Co3rt o First Instan# o :anila' In its ans@#r< TOB: rais#d t/# d##ns# o insol;#n4 b#ing o3nd b4 t/# :on#tar4 Board as s3/' In t/# 8r#(trial t/# TOB: il#d a 9otion to dis9iss 3sing t/# sa9# d##ns#' T/# trial o3rt /o@#;#r< inding t/at it is not 9#ritorio3s< r#nd#r#d t/# d#ision in a;or o Cord#ro' Not satisi#d @it/ t/# trial o3rts d#ision< t/#4 il#d an a88#al in t/# CA' T/# CA /o@#;#r< air9#d t/# d#ision o t/# lo@#r o3rt' H#n#< t/# 8r#s#nt 8#tition'
Issue? W/#t/#r or not 8ri;at# r#s8ond#nts ar# #ntitl#d or t/# int#r#st on /is ti9# d#8osit d3ring t/# 8#riod t/at 8#tition#r @as los#d and to attorn#4s ##s'
7el"? No< 8ri;at# r#s8ond#nts ar# not #ntitl#d or t/# int#r#st on /is ti9# d#8osit d3ring t/# 8#riod t/at 8#tition#r @as los#d' T/# o3rt r#it#rat#d t/# dotrin# o3nd#d in t/# as# o O;#rs#as BanD o :anila ;' CA' T/# Co3rt taD#s noti# t/at @/at #nabl#s a banD to 8a4 sti83lat#d int#r#st on 9on#4 d#8osit#d @it/ it is t/at t/ro3g/ t/# ot/#r as8#ts o its o8#ration it is abl# to g#n#rat# 3nds to o;#r t/# 8a49#nt o s3/ int#r#st' Unl#ss a banD an l#nd 9on#4< #ngag# in int#rnational transations< a3ir# or#los#d 9ortgag#d 8ro8#rti#s or t/#ir 8ro##ds and g#n#rall4 #ngag# in ot/#r banDing and inaning ati;iti#s ro9 @/i/ it an d#ri;# ino9#< it is inon#i;abl# /o@ it an arr4 on as a d#8ositor4 obligat#d to 8a4 sti83lat#d int#r#st'
Pag# $ ,6
Obligations and Contrats! "otrin#s and Cas# "ig#sts
T/#r#or#< t/# o3rt s#t asid# t/# d#ision o t/# lo@#r o3rt /olding t/at t/# banD is liabl# or int#r#st o t/# ti9# d#8osit'
0AS/E; %. CA &G'R' No' L().,.7- %1 S#8t#9b#r %,+05
2elencio(3errera, J.: )a=ts? On %0 :a4 %,77< t/# :V Pion##r C#b3 l#t t/# 8ort o :anila bo3nd or C#b3 @/i/ @as originall4 s/#d3l#d to l#a;# on %) :a4 %,77'T/# ;#ss#l start#d its ;o4ag# 3nd#r a s8#ial 8#r9it iss3#d b4 t/# Coll#tor o C3sto9s @/#n it @as o3nd o3t t/at t/# ;#ss#l /as no #9#rg#n4 #l#trial 8o@#r s4st#9' W/#n t/# ;#ss#l l#t :anila< t/# oi#rs o t/# ;#ss#l alr#ad4 Dn#@ o t/# t48/oon laring b3ilding 38 so9#@/#r# in :indanao' T/#r# b#ing no t48/oon signal on t/#ir ro3t# ro9 :anila to C#b3< t/# r#@ d#id#d to ontin3# @it/ t/# ;o4ag#' W/#n t/# ;#ss#l r#a/#d t/# Ro9blon Island< it d#id#d not to taD# s/#lt#r b#a3s# t/# @#at/#r ondition is still good' Ho@#;#r< @/#n it r#a/#d t/# island o Tang3ig3i< t/# @#at/#r /ang#d' F#aring o /itting t/# C/oolat# Island Gro38< t/# a8tain ord#r#d to r#;#rs# t/# ;#ss#l so t/at it an @#at/#r o3t t/# t48/oon' Unort3nat#l4< it /it a r## n#ar t/# :ala8as3a Island at abo3t noon ti9# on %7 :a4 %,77' T/# ;#ss#l s3stain#d l#aDs and #;#nt3all4 s3nD< bringing @it/ it t/# Ca8tain o t/# ;#ss#l' T/# 8#tition#rs @#r# t/# 8ar#nts o so9# o t/# d##as#d ro9 t/# sinDing o t/# s/i8' T/#4 s3#d or da9ag#s b#or# t/# Co3rt o First Instan#' Pri;at# r#s8ond#nts #nt#r#d t/# 8l#a o force $a/eure and t/#r#or# t/#ir liabilit4 /as b##n #ting3is/#d' T/# trial o3rt r#nd#r#d its d#ision inding t/# r#s8ond#nts liabl# or da9ag#s' U8on a88#al t/# CA r#;#rs#d t/# r3ling' T/# 8#tition#rs il#d t/# 8r#s#nt 8#tition or r#;i#@ on #rtiorari'
Issue? W/#t/#r or not t/# 8ri;at# r#s8ond#nts ar# liabl# or da9ag#s on t/# d#at/ o t/# 8r#s398ti;# d#at/ o t/# /ildr#n o t/# 8#tition#rs'
7el"? Y#s< t/# 8ri;at# r#s8ond#nts ar# liabl# or da9ag#s on t/# d#at/ o t/# /ildr#n o t/# 8#tition#rs'
Pag# $ ,+
Obligations and Contrats! "otrin#s and Cas# "ig#sts
T/# o3rt agr##s @it/ t/# d#ision o t/# trial o3rt' To a;ail o t/# d##ns# o ort3ito3s #;#nts< it 93st b# ind#8#nd#nt o /39an @ill< s3/ o3rr#n# 93st r#nd#r it i98ossibl# or t/# obligor to 3lill t/# obligation in t/# nor9al 9ann#r< and t/at t/# obligor 93st b# r## o 8artii8ation in< or aggra;ation o< t/# in3r4 to t/# r#ditor' It 93st b# i98ossibl# to or#s##< or i it an b# or#s##n< 93st /a;# b##n i98ossibl# to a;oid' T/# trial o3rt said t/at t/# d##ns# o t/# ort3ito3s #;#nt is 3nt#nabl# d3# to t/# Dno@l#dg# o t/# r#@ o t/# ino9ing t48/oon and still tooD t/# risD o 8ro##ding @it/ t/# ;o4ag#< ignoring t/# t48/oon ad;isor4' T/o3g/ t/#4 /#ld ;ario3s on#r#n#s< and obli;io3s o t/# 3t9ost dilig#n# r#3ir#d o ;#r4 a3tio3s 8#rsons< t/#4 still tooD t/# risD' B4 doing so< t/#4 ail#d to s/o@ o3t9ost dilig#n# r#3ir#d b4 la@ or t/# sa#t4 o t/# 8ass#ng#rs trans8ort#d b4 t/#9' T/#ir ations #8os#d t/#ir 8ass#ng#rs to t/# trag#d4' T/#r#or#< t/# 8ri;at# r#s8ond#nt is liabl# or da9ag#s on t/# d#at/ o t/# /ildr#n o t/# 8#tition#rs'
S3EET LINES, INC. %. CA &G'R' No' L()71)*- %.% SCRA 67,- .+ A8ril %,+15
2elencio(3errera, J.: )a=ts? Pri;at# r#s8ond#nts 83r/as#d irst(lass tiD#ts ro9 8#tition#r to board t/# ;#ss#l :V S@##t Gra# bo3nd or Catbalogan< W#st#rn Sa9ar' T/# ;#ss#l @as s388os#d to sto8 irst in Catbalogan b#or# 8ro##ding to Taloban' T/# s/#d3l#d d#8art3r# o t/# ;#ss#l @as abo3t 9idnig/t on *+ 23l4 %,6.< /o@#;#r t/# s/i8 s#t sail at 1!**a9 o *, 23l4 %,6. b3t @as to@#d baD to C#b3 b#a3s# o 8robl#9s in its #ngin# arri;ing in C#b3 at )!**89 t/at sa9# da4' T/# #ngin# @as i#d and sail#d again on %* 23l4 %,6. at *+!**a9' Inst#ad o sto88ing in Catbalogan< t/# s/i8 @#nt dir#tl4 to Taloban @/#r# t/# 8ri;at# r#s8ond#nts @#r# or#d to taD# a #rr4boat to taD# t/#9 to Catbalogan' T/# G#n#ral :anag#r ad9itt#d t/at t/# r#ason @/4 t/# ;#ss#l did not sto8 in Catbalogan @as to allo@ it to at/(38 @it/ its s/#d3l# or t/# n#t @##D' T/# 8ri;at# r#s8ond#nts il#d an ation or da9ag#s against t/# 8#tition#r< @/i/ t/# trial o3rt grant#d' And 38on a88#al< t/# CA air9#d t/# trial o3rts d#ision' T/3s< t/# 8r#s#nt 8#tition' T/# 8#tition#rs a;#r t/# 8r#s#n# o a ort3ito3s #;#nt'
Issue? Pag# $ ,,
Obligations and Contrats! "otrin#s and Cas# "ig#sts
W/#t/#r or not t/#r# is a ort3ito3s #;#nt in t/# inid#nt and t/#r#or# it #ting3is/#s t/# liabilit4 o t/# 8#tition#r'
7el"? No< t/#r# is no ort3ito3s #;#nt in t/# inid#nt< t/3s< t/# 8#tition#r is liabl# or t/# da9ag#s to t/# 8ri;at# r#s8ond#nts' Artil# ...* stat#s t/at 9oral da9ag#s ar# 3stl4 d3# in br#a/#s o ontrat @/#r# t/# d##ndant at#d ra3d3l#ntl4 or in bad ait/' T/# o3rt d#in#d bad ait/ as a br#a/ o a Dno@n d3t4 t/ro3g/ so9# 9oti;# or int#r#st or ill@ill' S#l(#nri/9#nt or rat#rnal int#r#st< and not 8#rsonal ill@ill 9a4 /a;# b##n t/# 9oti;#< b3t it is 9ali# n#;#rt/#l#ss' T/# o3rt /#ld t/at t/#r# is bad ait/ @/#n d##ndants(a88#llants did not gi;# noti# to 8laintis( a88#ll##s as to t/# /ang# o s/#d3l# o t/# ;#ss#l< @/il# Dno@ing 3ll4 @#ll t/at it @o3ld taD# no l#ss t/an it##n /o3rs to ##t t/# r#8airs o t/# da9ag#d #ngin#< d##ndants(a88#llants inst#ad 9ad# anno3n#9#nt o ass3ran# t/at t/# ;#ss#l @o3ld l#a;# @it/in a s/ort 8#riod o ti9#< and @/#n 8laintis(a88#ll##s @ant#d to l#a;# t/# 8ort and ga;# 38 t/# tri8< d##ndants( a88#llantsK #98lo4##s @o3ld o9# and sa4< K@# ar# l#a;ing< alr#ad4 and @/#n d##ndants( a88#llants did not o#r to r#3nd 8laintis(a88#ll##sK tiD#ts nor 8ro;id# t/#9 @it/ trans8ortation ro9 Taloban Cit4 to Catbalogan' In t/# d##ns# o t/# 8#tition#r o ort3ito3s #;#nt< t/# o3rt stat#d t/at 9#/anial d##ts o t/# ;#ss#l is not onsid#r#d as a ort3ito3s #;#nt' T/# o3rt o3nd no ort3ito3s #;#nts @/i/ 8r#;#nt#d t/# ;#ss#l ro9 3lilling its obligation to taD# t/# 8ass#ng#rs to Catbalogan' And #;#n i it @as grant#d t/at t/# 9#/anial d##t is a force $a/eure< t/# 9o9#nt t/# ;#ss#l s#t sail on %* 23l4 %,6.< t/# or# 9a#3r# is no long#r #ist#nt b#a3s# t/# ;#ss#l /as b##n o98l#t#l4 r#8air#d' T/#r#or#< /a;ing o3nd to /a;# at#d o bad ait/ and no or# 9a#3r# in t/# inid#nt< t/# 8#tition#r is liabl# or da9ag#s against r#s8ond#nts'
J/NTILLA %. )ONTANAR &G'R' No' L()0716- %17 SCRA 7.0- 1% :a4 %,+05
utierre, J.: )a=ts? Plainti is a 8ass#ng#r o a ##8n#4 bo3nd ro9 "anao Cit4 to C#b3 Cit4 @/i/ @as dri;#n b4 d##ndant Ca9oro' T/# ran/is# @as r#gist#r#d 3nd#r t/# d##ndant Fontanar< b3t is originall4 o@n#d b4 d##ndant Banon' It arri#d 1 8ass#ng#rs in ront s#at and o3rt##n 8ass#ng#rs in t/# r#ar' U8on r#a/ing :anda3# Cit4< @/il# b#ing dri;#n at a ast s8##d< as stat#d in t/# #;id#n#s Pag# $ %**
Obligations and Contrats! "otrin#s and Cas# "ig#sts
o3nd d3ring t/# trial< t/# rig/t r#ar tir# o t/# ##8n#4 #8lod#d< and a3s#d t/# ;#/il# to to88l# o;#r' T/# 8lainti< s#ating in t/# ront s#at< @as t/ro@n o3t o t/# ;#/il# and /# lost onsio3sn#ss' W/#n /# a9# to /is s#ns#s< /# o3nd t/at /# s3#r#d 93lti8l# in3ri#s and diso;#r#d t/at /is O9#ga @rist @at/ @as lost' H# @#nt baD to "anao Cit4 and @#nt to t/# /os8ital< @#r# /is in3ri#s @#r# att#nd#d' H# r#3#st#d /is at/#r(in(la@ to looD or t/# @at/ @/i/ ar# no long#r o3nd' Plainti t/#n il#d a as# or br#a/ o ontrat @it/ da9ag#s b#or# t/# Cit4 Co3rt o C#b3 against d##ndants' In t/#ir ans@#r< t/# d##ndants stat#d t/at t/# aid#nt t/at a3s#d t/# loss to t/# 8#tition#r @as b#4ond t/# ontrol o t/# r#s8ond#nts' T/#4 ont#nd#d t/at t/# tir# t/at #8lod#d @#r# n#@ and @as onl4 slig/tl4 3s#d @/#n t/# aid#nt /a88#n#d' T/# trial o3rt r#nd#r#d its d#ision in a;or o t/# 8lainti' T/# d##ndants il#d an a88#al to t/# Co3rt o First Instan# @/#r# t/# d#ision @as r#;#rs#d on t/# gro3nds o ort3ito3s #;#nt' It also d#ni#d t/# 9otion or r#onsid#ration'
Issue? W/#t/#r or not t/# aid#nt @as a3s#d b4 a ort3ito3s #;#nt'
7el"? No< t/# aid#nt @as not a3s#d b4 a ort3ito3s #;#nt' Citing t/# as# o %asa$ v. S$ith, t/# o3rt laid do@n t/# #ss#ntial /arat#ristis o ort3ito3s #;#nt< s3/ as it 93st b# ind#8#nd#nt o /39an @ill< s3/ o3rr#n# 93st r#nd#r it i98ossibl# or t/# obligor to 3lill t/# obligation in t/# nor9al 9ann#r< t/# obligor 93st b# r## o 8artii8ation in< or aggra;ation o< t/# in3r4 to t/# r#ditor and it 93st also b# i98ossibl# to or#s## or i it an b# or#s##n< it 93st b# in#;itabl#' In t/# 8r#s#nt as#< t/# blo@ing 38 o t/# tir# o t/# ##8n#4 is not ind#8#nd#nt o t/# /39an @ill' T/# o3rt /#ld t/at t/# aid#nt @as #it/#r d3# to t/# n#glig#n# o t/# dri;#r< or b#a3s# o t/# 9#/anial d##ts o t/# tir#' E;id#n#s s/o@#d t/at t/# ;#/il# @as r3nning ;#r4 ast b#or# t/# aid#nt' Co99on arri#rs s/o3ld t#a/ t/#ir dri;#rs not to o;#rload t/#ir ;#/il#s< not to ###d sa# and l#gal s8##d li9its and to Dno@ orr#t 9#as3r#s to taD# @/#n inid#nts liD# t/is /a88#ns' T/#r#or#< t/# o3rt r3l#d to s#t asid# t/# r3ling o t/# Co3rt o First Instan# and t/# d#ision o t/# Cit4 Co3rt o C#b3 @as r#instat#d< inding t/# d##ndants liabl# or da9ag#s against 8lainti'
0ICTORIAS LANTERS ASSOCIATION %. 0ICTORIAS #ILLING CO., INC. Pag# $ %*%
Obligations and Contrats! "otrin#s and Cas# "ig#sts
&G'R' No' L(77)+- ,6 P/il 1%+- .0 23l4 %,005
5adilla, J.: )a=ts? P#tition#rs ar# or8orations o98os#d o s3gar an# 8lant#r' P#tition#rs s3gar an#s @#r# 9ill#d b4 r#s8ond#nts' :illing ontrats @#r# ##3t#d b4 t/# 8arti#s on %6 No;#9b#r %,%7' In t/# said ontrat it stat#d t/at t/# 8#tition#rs @ill 9ill t/# s3gar an#s t/#4 @ill 8rod3# @it/ t/# r#s8ond#nts or t/# n#t 1* 4#ars' It @as also sti83lat#d t/at in as#s o ort3ito3s #;#nt< t/# ontrat s/all b# d##9#d s3s8#nd#d' For o3r 4#ars< t/# 2a8an#s# o38ation o3rr#d in t/# P/ili88in#s and at#r s3/< anot/#r t@o 4#ars o 8ost(@ar r#onstr3tion o t/# #ntral o t/# r#s8ond#nt' In %,)+< t/# 8#tition#rs< b#li#;ing t/at t/# ontrat or 9illing /as #8ir#d< r#8#at#dl4 asD#d t/# r#s8ond#nts to ##3t# a n#@ 9illing ontrat @/i/ @o3ld taD# into onsid#ration o t/# ir39stan#s 8r#;ailing in t/# s3gar ind3str4 in t/# 8r#s#nt ti9# as o98ar#d to t/# tr#nd 1* 4#ars ago< and s3/ @ill b#n#it t/# 8lant#rs and @orD#rs' T/# r#s8ond#nts r#3s#d to a#d# to t/# r#3#st' Aording to t/#9< as t/#r# @as no 9illing d3ring t/# 7 4#ars ) 4#ars o 2a8an#s# o38ation and . 4#ars o 8ost(@ar r#onstr3tions t/# ontrat @as to #nd in %,0.' T/# trial o3rt r3l# r3l#d in a;or o t/# 8#tition#rs and ro9 t/is 3dg9#nt< t/# r#s8ond#nt a88#al#d'
Issue? W/#t/#r or not t/# 8#tition#rs ontrat o 9illing s/all #8ir# on %,0.< 7 4#ars at#r t/# sti83lat#d #8iration o t/# ontrat< to 9aD# 38 ro9 t/# lost 7 4#ars o 8rod3tion b#a3s# o t/# @ar'
7el"? No< t/# ontrat o 9illing s/all #8ir# at#r 1* 4#ars o t/# ##3tion o t/# irst ontrat< as sti83lat#d t/#r#on' T/# o3rt stat#d Fort3ito3s E;#nt r#li#;#s t/# obligor ro9 3lilling t/# ontrat3al obligation 3nd#r Artil# %%6) o t/# Ci;il Cod#' T/# sti83lation r#garding t/# ort3ito3s #;#nts in t/# ontrat and its s3s8#nsion< s/o3ld s3/ #;#nts /a88#n< onl4 r#li#;#s t/# 8arti#s ro9 t/# 3lil9#nt o t/# r#s8#ti;# obligations d3ring t/at ti9#' It do#snt sto8 t/# 8#riod o t/# ontrat' T/#r#or#< ontrat annot b# #t#nd#d on %,0.< and t/# 7 4#ars annot b# d#d3t#d ro9 t/# originall4 sti83lat#d 1* 4#ars' Pag# $ %*.
Obligations and Contrats! "otrin#s and Cas# "ig#sts
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%.
DELA: (. ART. &&9 5. @INDS O) DELA: "1 #ORA SOL0ENDI iii. E RE i%. E ERSONA e1 #ORA ACCIIENDI ii. RE/ISITES 1 CO#ENSATIO #ORAE CONTRA0ENTION O) T7E TENOR
CASES? ARRIETA %. NLRC &G'R' No' L(%07)0- %* SCRA 6,- 1% 2an3ar4 %,7)5
4egala, J.: )a=ts? On %, :a4 %,0.< 8lainti 8artii8at#d in a 83bli bidding b4 NARIC or .*<*** 9#tri tons o B3r9#s# Ri#' T/# 8lainti @on t/# bidding and #nt#r#d into a Contrat o Sal# o Ri# or t/# 8ri# o .*1 8#r 9#tri tons' In t3rn< t/# d##ndant NARIC o99itt#d its#l to 8a4 b4 9#ans l#tt#r o r#dit in U'S 3rr#n4' On 1* 23l4 %,0.< t/# d##ndant or8oration tooD t/# irst o8#n l#tt#r o r#dit b4 or@arding its a88liation or o99#rial l#tt#r o r#dit to t/# PNB @/i/ inl3d#d a l#tt#r asDing t/at it b# onsid#r#d as a s8#ial as# as t/# d##ndant or8oration /as no #no3g/ 3nds to o;#r t/# a9o3nt r#3ir#d and t/at 8laintis d#adlin# is on *) A3g3st %,0. t/#r#or# it is n##ssar4 t/at t/# l#tt#r s/o3ld b# o8#n#d 8rior said dat#' At t/# sa9# ti9#< 8lainti ad;is#d NARIC o t/# n##ssit4 o o8#ning o t/# l#tt#r o r#dit as s/# alr#ad4 9ad# a t#nd#r @it/ t/# s388li#r in B3r9a' On *) A3g3st %,0.< t/# PNB l#tt#r o r#dit /as b##n a88ro;#d @it/ a ondition t/at t/# 9arginal d#8osit and drats b# 8aid 38on 8r#s#nt9#nt' Ho@#;#r< NARIC ail#d to o98l4 @it/ t/# ondition' It on#ss#d t/at it is in not in t/# inanial 8osition to do so as r#l#t#d in t/# l#tt#r dat#d *. A3g3st %,0.' T/# r#dit instr39#nt @as onl4 o8#n#d on *+ S#8t#9b#r %,0.' B#a3s# o t/is d#la4< t/# alloation o t/# s388li#r @as an#ll#d and t/# 0 d#8osit @as or#it#d' Plainti tri#d to Pag# $ %*1
Obligations and Contrats! "otrin#s and Cas# "ig#sts
r#stor# t/# alloation b3t still ail#d' S/# o#r#d to NARIC to s3bstit3t# inst#ad T/ailand ri#< b3t t/# latt#r r##t#d t/# o#r' T/# 8lainti t/#n d#9and#d o98#nsation or t/# loss ro9 NARIC' T/# d##ndants dislai9 t/# r#s8onsibilit4 and stating t/at t/# a3lt o t/# d#la4 @as b#a3s# o t/# 8lainti b#a3s# it did not 8ro98tl4 ga;# t/# data @/i/ is n##d#d in o8#ning o t/# l#tt#r'
Issue? W/#t/#r or not t/# d#la4 in t/# o8#ning o t/# l#tt#r o r#dit in dis83t# b4 NARIC a9o3nt#d to a br#a/ o ontrat or @/i/ it 93st b# /#ld liabl# or da9ag#s'
7el"? Y#s< t/# d#la4 in t/# o8#ning o t/# l#tt#r o r#dit in dis83t# b4 NARIC a9o3nt#d to a br#a/ o ontrat or @/i/ it 93st b# /#ld liabl# or da9ag#s' Aording to Artil# %%6* o t/# Ci;il Cod#< T/os# @/o in t/# 8#ror9an# o t/#ir obligation ar# g3ilt4 o ra3d< n#glig#n#< or d#la4< and t/os# @/o in an4 9ann#r ontra;#n# t/# t#nor t/#r#o< ar# liabl# in da9ag#s' In t/# said 8ro;ision it stat#d t/at in g#n#ral< #;#r4 d#btor @/o ails to 3lill /is obligation is liabl# or da9ag#s< not onl4 t/os# @/o ar# g3ilt4 o ra3d< n#glig#n# or d#la4' T/# 8/ras# an4 9ann#r ontra;#n# t/# t#nor inl3d#s an4 illiit ats @/i/ i98airs t/# strit and ait/3l 3lill9#nt o t/# obligation or #;#r4 Dind o d##ti;# 8#ror9an#' T/# liabilit4 o t/# a88#llant start#d not alon# in t/# ail3r# or inabilit4 to satis4 t/# onditions 8ro;id#d b4 t/# PNB< b3t ro9 its @ill3l and d#lib#rat# ass398tion o ontrat3al obligations #;#n as it @as a@ar# o t/# inanial ina8ait4 to 3nd#rtaD# s3/' It is #;id#nt t/at NARIC @as Dno@l#dg#abl# o t/is inanial 8osition as it /as stat#d in t/# trans9ittal l#tt#r t/at t/#4 do not /a;# s3ii#nt d#8osit @it/ PNB to o;#r t/# r#3ir#d a9o3nt' T/#r#or#< t/# o3rt r3l#d in a;or o t/# 8lainti @it/ t/# 9odiiation t/at it 93st b# in P/ili88in# 3rr#n4 and to b# on;#rt#d at t/# 8r#;ailing #/ang# rat# at t/# ti9# o t/# obligation @as in3rr#d'
SS.G/ANIO %. #A@ATI S7ANGRI'LA 7OTEL an" RESORT, INC. &G'R' No'%,*7*%- *6 F#br3ar4 .*%%5
Carpio(2orales, J.: )a=ts? T/# 8#tition#rs booD#d t/# r#s8ond#nts or t/#ir @#dding r##8tion on .+ 23l4 .**%' For t/# initial ood tasting< t/# 8#tition#rs lai9 t/at t/#4 r#3#st#d t/# /ot#l to 8r#8ar# or s#;#n Pag# $ %*)
Obligations and Contrats! "otrin#s and Cas# "ig#sts
8#rsons< /o@#;#r t/#4 8r#8ar#d onl4 si' T/#4 initiall4 /os# a 9#n3 @/i/ osts P/8%<*** 8#r 8#rson b3t t/#4 @#r# gi;#n an o8tion t/at b4 /anging t/# 9#n3 ro9 Ding 8ra@ns to sal9on< it @ill onl4 ost P/8 ,0*'**' T/#4 d#id#d to taD# t/# sal9on inst#ad' T/r## da4s b#or# t/# #;#nt< on t/# inal ood tasting< t/# sal9on @as s#r;#d /al t/# si# o t/at @/i/ @as s#r;#d in t/# initial ood tasting' T/# /ot#l #8lain#d t/at s/o3ld t/# si# b# t/at o @/at @as initiall4 s#r;#d to t/#9< it @o3ld ost P/8 %<.**'**' T/#4 #;#nt3all4 agr##d on a inal 8ri# o P/8%<%0*'** 8#r 8#rson' On .6 23l4 .**%< t/# 8arti#s inali#d t/# arrang#9#nts and t/#4 ##3t#d t/# ontrat' Ho@#;#r< on t/# dat# o t/# #;#nt< t/# r#8r#s#ntati;#s o t/# r#s8ond#nts did not s/o@ 38< t/# g3#sts o98lain#d o t/# d#la4 o t/# s#r;i# or dinn#r< and so9# it#9s list#d in t/# 9#n3 @as not a;ailabl#' It @as also stat#d t/at t/# /ot#l @ait#rs @#r# r3d# and 3na8olog#ti @/#n told abo3t t/# d#la4' T/# 8#tition#rs @#r# also 8ro9is#d b4 t/# r#8r#s#ntati;#s t/at t/#r# @ill b# no /arg#s or #t#nsions o t/# r##8tion b#4ond %. 9idnig/t< b3t t/#4 @#r# bill#d +<***'** or t/# 1(/o3r #t#nsions o t/# #;#nt 38 to )!**a9 t/# n#t da4' P#tition#rs 3rt/#r lai9 t/at t/#4 bro3g/t @in# and li3or in aordan# @it/ t/#ir o8#n bar arrang#9#nts b3t t/#s# @#r# not s#r;#d and t/#ir g3#sts 8aid or t/#ir o@n drinDs' P#tition#rs t/3s s#nt a l#tt#r to t/# r#s8ond#nt and @#r# abl# to r##i;# an a8olog#ti l#tt#r ro9 on# rist#n S;#nson< t/# /ot#ls E#3ti;# Assistant :anag#r in /arg# o Food and B#;#rag#' T/# 8#tition#r< n#;#rt/#l#ss< il#d a o98laint or br#a/ o ontrat and da9ag#s b#or# t/# RTC o :aDati' In its ans@#r< t/# r#s8ond#nt stat#d t/at t/# 8#tition#rs r#3#st#d a o9bination o Ding 8ra@ns and sal9on< /#n# t/# 8ri# @as inr#as#d to P/8 %<.**'** and @as diso3nt#d to P/8 %<%0*'**' Also< t/at t/# r#8r#s#ntati;#s @#r# 8r#s#nt in t/# #;#nt b3t @#r# not 8#r9an#ntl4 station#d t/#r#in as t/#r# @#r# ot/#r t/r## #;#nts in t/# /ot#l t/at da4' And t/at t/# d#la4 in t/# s#r;i# o 9#als @#r# b#a3s# o t/# s3dd#n inr#as# on t/# n39b#rs o g3#sts to )6* ro9 t/# #8#t#d 10*(1+* g3#sts' T/is d#la4 @as also r#la4#d to t/# at/#r o t/# groo9' In r#gards to S;#nssons l#tt#r< it @as not an ad9ission o g3ilt b3t 9#ant to 9aintain good@ill to its 3sto9#rs' :aDati RTC r3l#d in a;or o t/# 8#tition#rs r#l4ing /#a;il4 on S;#nssons l#tt#r o a8olog4 @/i/ stat#d t/at t/# s#r;i#s r##i;#d b4 t/# 8#tition#rs @#r# 3na#8tabl# and not 38 to t/#ir standards' T/# Co3rt o A88#als /o@#;#r r#;#rs#d t/# trial o3rts r3ling stating t/at t/# 8roi9at# a3s# o t/# inon;#ni#n# @as attrib3tabl# to t/# 8#tition#rs' A 9otion or r#onsid#ration @as il#d b4 t/# 8#tition#rs b3t @as d#ni#d'
Pag# $ %*0
Obligations and Contrats! "otrin#s and Cas# "ig#sts
Issue? W/#t/#r or not t/# r#s8ond#nts ar# liabl# or da9ag#s'
7el"? Y#s< t/# r#s8ond#nts ar# liabl# or da9ag#s' T/# o3rt /#ld t/at sin# t/# o98laint ros# ro9 a ontrat< t/# dotrin# o 8roi9at# a3s# annot b# a88li#d' T/# dotrin# o 8roi9at# a3s# is onl4 a88liabl# on ations or 3asi(d#lits and not on ations in;ol;ing br#a/ o ontrat' And t/3s t/# Artil# %%6* is t/# a88liabl# r3l# in t/is as#' Artil# %%6* stat#s T/os# @/o in t/# 8#ror9an# o t/#ir obligation ar# g3ilt4 o ra3d< n#glig#n#< or d#la4< and t/os# @/o in an4 9ann#r ontra;#n# t/# t#nor t/#r#o< ar# liabl# in da9ag#s' Br#a/ o ontrat is d#in#d as t/# ail3r# @it/o3t l#gal r#ason to o98l4 @it/ t/# t#r9s o a ontrat' Gi;#n t/# r#s8ond#nts ;ast #8#ri#n#< it is sa# to 8r#s39# t/at it is not t/# irst ti9# it #no3nt#rs #;#nts booD#d ###ding t/# g3arant##d o;#r' T/# r#s8ond#nts ad9itt#d t/# t/r## /ot#l 3ntions oinid#d @it/ t/# 8#tition#rs #;#nt' T/# d#la4 in s#r;i# 9ig/t /a;# b##n a;oid#d or 9ini9i#d i r#s8ond#nts ##ris#d 8r#si#n# in s/#d3ling #;#nts' T/# Co3rt also stat#d t/at no l#ss t/an 3alit4 s#r;i# s/o3ld b# d#li;#r#d #s8#iall4 in #;#nts @/i/ 8ossibilit4 o r#8#tition is los# to non#' T/#r#or#< t/# S38r#9# Co3rt r3l#d in a;or o t/# 8#tition#rs a@arding no9inal da9ag#s in t/# a9o3nt o P/8 0*<***'**'
&6. RE#EDIES )OR BREAC7 =1 ETRA'J/DICIAL >NO CO/RT ACTION NEEDED1 ARTS. &+- AND &+9"1 J/DICIAL >CO/RT ACTION NEEDED1 i%. RINCIAL RE#EDIES -. ARTS. &&+, &&2, &&4 AND &&9& CASES? CENTRAL BAN@ O) T7E 7ILIINES %. CA
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&G'R' No' L()06%*- %1, SCRA )7- *1 Otob#r %,+05
2a*asiar, CJ.: )a=ts? Island Sa;ings BanD a88ro;#d t/# loan o S3l8iioTol#ntino in t/# a9o3nt o P/8+*<***'**' As s#3rit4 to t/# loan< Tol#ntino ##3t#d a R#al Estat# :ortgag# o;#r /is %**(/#tar# land'T/# said loan is r#8a4abl# in s#9i(ann3al install9#nts or a 8#riod o 1 4#ars @it/ %. ann3al int#r#st' T/# said loan is to b# 3s#d to d#;#lo8 /is 8ro8os#d s3bdi;ision' Pag# $ %*7
Obligations and Contrats! "otrin#s and Cas# "ig#sts
On .. :a4 %,70< t/# a9o3nt o P/8%6<***'** @as r#l#as#d as 8art o t/# P/8+*<***'**' Tol#ntino and /is @i# iss3#d a 8ro9issor4 not# or P/8%6<***'** at %. int#r#st 8#r ann39< 8a4abl# @it/in 1 4#ars ro9 ##3tion o t/# ontrat at s#9i(ann3al install9#nt' An ad;an# int#r#st or t/# P/8+*<***'**loand o;#ring a 7(9ont/ 8#riod a9o3nting to P/8)<+**'** @as d#d3t#d ro9 t/# 8artial r#l#as# o P/8 %6<***'**' T/is 8r#d#d3t#d int#r#st /o@#;#r @as r#3nd#d to Tol#ntino at#r /# @as inor9#d t/at t/# banD /as no 3nds 4#t to r#l#as# t/# r#9aining P/871<***'**' On %1 A3g3st %,70< t/# C#ntral BanD 8ro/ibit#d t/# Island Sa;ings BanD ro9 9aDing n#@ loans and in;#st9#nts #l3ding #t#nsions or r#n#@als o alr#ad4 #isting loans @/i/ s/all b# s3b#t to r#;i#@ b4 S38#rint#nd#nt o BanDs @/o @ill i98os# li9itations' U8on ailing to a3ir# 3nds r#3ir#d to r#stor# sol;#n4< C#ntral BanD r#l#as#d a R#sol3tion 8ro/ibiting Island Sa;ings BanD ro9 doing b3sin#ss in t/# P/ili88in#s'and ord#r#d t/# ating S38#rint#nd#nt o BanDs to taD# /arg# o t/# Ass#ts o t/# Island Sa;ings BanD' On *% A3g3st %,7+< t/# Island Sa;ings BanD< il#d an a88liation or t/# #tra(3diial or#los3r# o Tol#ntinos lot in lin# @it/ t/# non(8a49#nt o t/# P/8%6<***'**' T/# a3tion @as s/#d3l#d to b# on t/# .. 2an3ar4 %,7,' On .* 2an3ar4 %,7,< Tol#ntino il#d a 8#tition @it/ t/# Co3rt o First Instan# o Ag3san or in3ntion< s8#ii 8#ror9an# or r#sission and da9ag#s @it/ 8r#li9inar4 in3ntion' T/# all#g#d t/at Island Sa;ings banD ail#d to d#li;#r t/# P/871<***'** t/#r#or# /# is #ntitl#d or t/# s8#ii 8#ror9an# b4 ord#ring t/# banD to d#li;#r t/# balan# o P/871<***'** and i said balan# annot b# d#li;#r#d t/# r#al #stat# 9ortgag# s/o3ld b# r#sind#d' T/# trial o3rt r3l#d in a;or o t/# Island Sa;ings BanD< ord#ring Tol#ntino to 8a4 t/# or9#r t/# a9o3nt o %6<***'** and liting t/# r#straining ord#r allo@ing t/# or#los3r# o t/# land' T/# Co3rt o A88#als air9#d t/# dis9issal o Tol#ntinos 8#tition or s8#ii 8#ror9an# b3t r3l#d t/at Island Sa;ings BanD an n#it/#r or#los# t/# r#al #stat# 9ortgag# nor oll#t t/# %6<***'**' H#n#< t/# 8#tition b4 t/# C#ntral BanD'
Issue? W/#t/#r or not t/# ation or s8#ii 8#ror9an# 9#ritorio3s'
7el"? No< t/# t/# ation or s8#ii 8#ror9an# annot 8ros8#r' Pag# $ %*6
Obligations and Contrats! "otrin#s and Cas# "ig#sts
In r#i8roal obligations< t/# obligation or 8ro9is# o #a/ 8art4 is t/# onsid#ration or t/at o t/# ot/#r and @/#n on# 8art4 /as 8#ror9#d or is r#ad4 and @illing to 8#ror9 /is 8art o t/# ontrat< t/# ot/#r 8art4 @/o /as not 8#ror9#d or is not r#ad4 and @illing to 8#ror9 in3rs in d#la4 as stat#d in Artil# %%7, o t/# Ci;il Cod#':or#o;#r Artil# %%,% stat#d t/at in r#i8roal obligations< in as#s o t/# obligors s/o3ld not o98l4 @it/ @/at is in39b#nt 38on /i9< t/# in3r#d 8art4 9a4 /oos# b#t@##n t/# 8#ror9an# o t/# obligation or t/# r#sission o t/# obligation' In t/# 8r#s#nt as#< sin# t/# Island Sa;ings BanD @as in d#a3lt in not 3lilling t/# r#i8roal obligation 3nd#r t/# loan agr##9#nt< Tol#ntino 9a4 /oos# b#t@##n s8#ii 8#ror9an# or r#sission @it/ da9ag#s in #it/#r as#' Ho@#;#r< sin# t/# banD @as orbidd#n b4 t/# :on#tar4 Board to do 3rt/#r b3sin#ss< t/# o3rt annot grant t/# 8#tition o Tol#ntino or s8#ii 8#ror9an#' R#sission is t/# onl4 r#9#d4 l#t' T/# o3rt r3l#d t/at t/# r#sission s/o3ld onl4 b# on t/# 8art o t/# a9o3nt o P/871<***'** as it is t/# d#a3lt o t/# banD as t/# P/8 %6<***'** @as alr#ad4 gi;#n to Tol#ntino' Tol#ntinos ##3tion o t/# 8ro9isor4 not# ga;# ris# to /is obligation to 8a4 t/# P/8%6<***'** @/#n it b#a9# d3#' T/#r#or#< r#sission is a88liabl# onl4 to t/# 6+'60 /#tar#s o t/# land and t/# r#9aining .%'.0 s/all #it/#r b# 8aid b4 Tol#ntino< or in ail3r# to do so< s/all b# or#los#d b4 t/# banD'
A:SON'SI#ON %. ADA#OS &G'R' No' L(1,16+- %1% SCRA )1,- .+ A3g3st %,+)5
2elencio(3errera, J.: )a=ts? %1 "##9b#r %,)1< Niolas Ada9os and Vi#nt# F#ria 83r/as#d t@o lots ro9 23an Pori3n3la' T/# s3#ssors(in(int#r#st< /o@#;#r il#d a Ci;il Cas# or t/# Ann3l9#nt o t/# Sal#' T/# Co3rt o First Instan# r#nd#r#d its d#ision ann3lling s3/' W/il# t/# abo;# as# @as 8#nding< t/# d##ndants sold t/# said lots to G#n#rosaA4son(Si9on or P/8 1<+**'** @it/ additional P/8 +**'** or t/# iss3an# o t/# n#@ titl# 3nd#r t/# na9# o t/# 8#tition#rs' T/# d##ndants /o@#;#r ail#d to o98l4 @it/ t/#ir o99it9#nt to trans#r t/# titl#s to t/# 8#tition#r @/i/ l#d to /#r iling o s3it or t/# s8#ii 8#ror9an#' T/# trial o3rt r#nd#r#d its d#ision in a;or o t/# 8#tition#r' Ho@#;#r< t/# ##3tion o t/# ord#r @as r#nd#r#d i98ossibl# b#a3s# o t/# d#ision r#nd#r#d in t/# Ci;il Cas# il#d b4 t/# s3#ssors(in(int#r#st o t/# lots' P#tition#r< il#d anot/#r s3it or r#sission o sal# @it/ da9ag#s' On *6 23n# %,7, t/# o3rt d#id#d in a;or o t/# 8#tition#r'"##ndants a88#al#d on t/# gro3nds t/at 8#tition#rs ation /ad 8r#srib#d onsid#ring Pag# $ %*+
Obligations and Contrats! "otrin#s and Cas# "ig#sts
t/at s/# onl4 /ad o3r 4#ars ro9 ., :a4 %,)7 to r#sind t/# transation and t/at /#r ation or s8#ii 8#ror9an# @as a @ai;#r o /#r rig/ts to r#sind'
Issue? W/#t/#r or not t/# 3lil9#nt and r#sission in r#i8roal obligations ar# alt#rnati;# r#9#di#s and t/# 8#tition#r /a;ing /os#n 3lil9#nt b#or#/and an no long#r s##D r#sission'
7el"? No< t/o3g/ t/# 8#tition#r /as alr#ad4 il#d a s3it or s8#ii 8#ror9an#< it do#snt bar /#r ro9 s##Ding r#sission' T/# r3l# @/#n t/# in3r#d 8art4 an onl4 /oos# b#t@##n 3lil9#nt and r#sission o t/# obligation< and annot /a;# bot/< a88li#s onl4 to obligations @/i/ its 3lil9#nt is 8ossibl#' Artil# %%,% allo@s t/# in3r#d 8art4 to s##D r#sission #;#n at#r s##Ding or its 3lil9#nt 8ro;id#d t/at t/# 3lil9#nt o t/# obligation is d##9#d i98ossibl#' In t/# 8r#s#nt as#< t/o3g/ t/# o3rt /as d#id#d in a;or o t/# 8#tition#r in t/# i;il as# or t/# 3lil9#nt< t/# at t/at it is i98ossibl# or t/# d##ndants to d#li;#r t/# titl#s to t/# 8#tition#r< t/# 8ortion o t/# d#ision r#3iring t/# d##ndants to 3lill t/#ir obligation is d##9#d @it/o3t or# and ##t' T/#r#or#< t/# 8#tition#r 9a4 still r#sind t/# transation'
GABO:A %. C/I &G'R' No' L(%,7%)- 1+ SCRA +0- .6 :ar/ %,6%5
4eyes, J.K.%., J.: )a=ts? "on :ariano C3i is t/# o@n#r o s#;#ral lots in C#b3 Cit4' On *+ :ar/ %,)7< /# sold t/r## lots to /is /ildr#n< 3ndi;id#d or t/# a9o3nt o P/87)<***'**' B3t b#a3s# Rosario C' "# Enarnaion laD 3nds and @as 3nabl# to 8a4 or /#r 8art and t/#r#or# t/# sal# to /#r @as an#ll#d' T/#s# t/r## lots @#r# o99#rial lot' T/# i98ro;#9#nts @#r# d#stro4#d d3ring t/# @ar so t/at in %,)7< t/# ti9# o t/# sal#< t/#r# @as no b3ilding on it' B#a3s# o t/# sal# o t/# 8ro8#rt4 to t/# t@o /ildr#n o "on :ariano< and t/# inabilit4 to 83r/as# o Rosario< "on :ariano< and /is /ildr#n :#r#d#s and Antonio b#a9# o(o@n#rs o t/# @/ol# lot' A b3ilding @as s3bs#3#ntl4 b3ilt on a 8ortion o t/is 9ass aing Cald#ron str##t and @as o38i#d b4 a C/in#s# b3sin#ss9an or @/i/ /# 8aid "on :ariano P7** a 9ont/ as r#ntal'
Pag# $ %*,
Obligations and Contrats! "otrin#s and Cas# "ig#sts
At#r t/# sal# o t/# 8ro8#rt4< :#r#d#s and Antonio a88li#d to t/# R#/abilitation Finan# Cor8oration RFC a loan a9o3nting to P/8 %1*<***'** to onstr3t a o99#rial b3ilding< on t/# 8ortion o t/# land orr#s8onding to t/#ir s/ar#' "on :ariano t/#n ##3t#d an a3t/orit4 to 9ortgag# /is s/ar# in t/# land' T/# loan @as grant#d and "on :ariano @as t/#n inl3d#d in t/# 9ortgagors o t/# land' H#< /o@#;#r< did not taD# 8art in t/# onstr3tion o t/# o99#rial b3ilding' W/#n it @as inis/#d< :#r#d#s and Antonio r##i;#d t/# r#nts t/#r#o a9o3nting to P)<+** a 9ont/ ro9 @/i/ t/# 8a49#nts or t/# install9#nts on t/# loan to t/# R#/abilitation Finan# Cor8oration a9# ro9' On :ar/ .0< %,)+< t@o ot/#r /ildr#n o "on :ariano na9#d 2#s3s and 2org# bro3g/t an ation in t/# Co3rt o First Instan# o C#b3 or t/# 83r8os# o ann3lling t/# d##d o sal# o t/# t/r## lots in 3#stion on t/# gro3nd t/at t/#4 b#long#d to t/# on3gal 8artn#rs/i8 o "on :ariano and /is d##as#d @i# Antonia P#ral#s' T/#4 also 8#tition#d to b# a88oint#d as t/# r##i;#r to taD# /arg# o t/# lots and o t/# r#ntals o t/# b3ilding' S3/ @as d#ni#d b4 t/# o3rt' On %, :ar/ %,),< Rosario Enarnaion il#d a 8#tition to d#lar# /#r at/#r ino98#t#nt @/i/ @as /##d#d b4 t/# o3rt and a88oint#d Vitorino R#4n#s to b# t/# g3ardian o "on :arianos 8ro8#rt4' On %0 23n# %,),< g3ardian Vitorino R#4n#s il#d a 9otion in t/# g3ardians/i8 8ro##dings s##Ding a3t/orit4 to oll#t t/# r#ntals ro9 t/# t/r## lots in 3#stion and asDing t/# Co3rt to ord#r Antonio and :#r#d#s to d#li;#r to /i9 all t/# r#ntals t/#4 /ad 8r#;io3sl4 oll#t#d ro9 t/# %.(door o99#rial b3ilding< tog#t/#r @it/ all t/# 8a8#rs b#longing to /is @ard< @/i/ @as #;#nt3all4 d#ni#d' :a4 ..< %,0%< a d#ision @as r#nd#r#d inding t/at t/# t/r## lots in 3#stion @#r# not on3gal 8ro8#rt4 and t/# sal# o t/# 8ortion o lots to :#r#d#s and Antonio @#r# ;alid' T/# 8r#s#nt 8#tition start#d b4 t/# #rst@/il# g3ardian o "on :ariano C3i @/il# t/# latt#r @as still ali;# in ord#r to r#o;#r P%.7<1))',% 8l3s l#gal int#r#st ro9 Antonio C3i and :#r#d#s C3i R#ord on A88#al< 8ag#s .(1 a88ar#ntl4 as r3its d3# to /is @ard b4 ;irt3# o /is 3s3r3t' T/# o98laint all#g#s t/at t/# 3s3r3t3ar4 rig/t r#s#r;#d in a;or o "on :ariano C3i #t#nds to and inl3d#s t/# r#ntals o t/# b3ilding onstr3t#d b4 Antonio and :#r#d#s on t/# land sold to t/#9 b4 t/#ir at/#r- t/at t/# d##ndants r#tain#d t/os# r#ntals or t/#9s#l;#s- t/at t/# 3s3r3t3ar4 rig/ts o t/# ;#ndor @#r# o t/# #ss#n# o t/# sal#< and t/#ir ;iolation #ntitl#d /i9 to r#sind or r#sol;# t/# sal#' In t/#ir ans@#r< @/il# ad9itting t/# r#s#r;#d 3s3r3t and t/# oll#tion o r#ntals o t/# b3ilding b4 t/# d##ndants< t/#4 d#ni#d t/at t/# 3s3r3t3ar4 rig/ts inl3d#d or #t#nd#d to t/# said r#ntals< or t/at s3/ 3s3r3t @as o t/# #ss#n# o t/# sal# and t/at t/# ;#ndor "on :ariano C3i /ad @ai;#d and r#no3n#d t/# 3s3r3t and t/at t/# d##ndants ;#nd##s ga;# t/# ;#ndor Pag# $ %%*
Obligations and Contrats! "otrin#s and Cas# "ig#sts
P)**'** a 9ont/ b4 @a4 o aid' It also ont#nd#d t/at at t/# original o98laint /a;ing so3g/t 3lill9#nt o t/# ontrat< 8lainti an no long#r s##D r#sission' P#tition#rs d#ni#d all all#gations' T/# a88#llants a;#r t/at t/# b3ilding is an a#ssion to t/# land in aordan# @it/ t/# Artil# 06% o t/# Ci;il Cod#'
Issue? W/#t/#r or not t/# 3s3r3t r#s#r;#d b4 t/# ;#ndor in t/# d##d o sal# o;#r t/# lots in 3#stion t/at @#r# at t/# ti9# ;aant and 3no38i#d< ga;# t/# 3s3r3t3ar4 t/# rig/t to r##i;# t/# r#ntals o t/# o99#rial b3ilding onstr3t#d b4 t/# ;#nd##s @it/ 3nds borro@#d ro9 t/# R#/abilitation and Finan# Cor8oration< t/# loan b#ing s#3r#d b4 a 9ortgag# o;#r t/# lots sold'
7el"? No< t/# 3s3r3t annot b# #t#nd#d to t/# r#ntals or t/# b3ilding' T/# arg39#nt o t/# a88#llants in;oDing Artil# 06% /as not on;in#d t/# o3rt' Aording to t/#9< Artil# ))0 to )07 o t/# Ci;il Cod# 8#rtaining to ind3strial a#ssion b4 9odiiation on t/# 8rini8al land< s3/ a#ssion is li9it#d to #it/#r to b3ildings #r#t#d on t/# land o anot/#r< or b3ildings onstr3t#d b4 t/# o@n#r o t/# land @it/ 9at#rials o@n#r b4 so9#on# #ls#' :or#o;#r< Artil# ))0 stat#d /as #stablis/#d t/# basi r3l# o ind3strial a#ssion and 8r#srib#s! QW/at#;#r is b3ilt< 8lant#d or so@n on t/# land o anot/#r< and t/# i98ro;#9#nts or r#8airs 9ad# t/#r#on< b#long to t/# o@n#r o t/# land s3b#t to t/# 8ro;isions o t/# ollo@ing artil#s'Q W/il# Artil# )), stat#d t/at! QH# @/o b3ilds< 8lants or so@s in bad ait/ on t/# land o anot/#r< los#s @/at is b3ilt< 8lant#d or so@n @it/o3t rig/t to ind#9nit4' T/#r# is non# in t/# 8ro;ision o t/# i;il od# @/i/ 8arti3larl4 #8r#ss#s t/# 8r#s#nt as#! a lando@n#r b3ilding on t/#ir o@n lot @it/ t/#ir o@n 9at#rials' Also< t/# o3rt agr##d @it/ t/# r3ling o t/# lo@#r o3rt< t/# t#r9s o t/# %,)7 d##d o sal# o t/# ;aant lots in 3#stion 9ad# b4 t/# lat# "on :ariano C3i in a;or o /is t/r## /ildr#n< Rosario< :#r#d#s and Antonio C3i< in onsid#ration o t/# s39 o P7)<***'** and t/# r#s#r;#d 3s3r3t o t/# said lot in a;or o t/# ;#ndor< as a98lii#d b4 t/# d##d a3t/oriing :#r#d#s< and Antonio C3i to borro@ 9on#4< @it/ t/# s#3rit4 o a 9ortgag# o;#r t/# #ntir#t4 o t/# lots< in ord#r to #nabl# t/#9 to onstr3t a /o3s# or b3ilding t/#r#on ?l#arl4 8ro;# t/at t/# r#s#r;#d 3s3r3t in a;or o t/# ;#ndor< :ariano C3i< @as li9it#d to t/# r#ntals o t/# land alon#' T/#r#or#< t/# 3s3r3t r#s#r;#d b4 t/# ;#ndor in t/# d##d o sal# o;#r t/# lots in 3#stion t/at @#r# at t/# ti9# ;aant and 3no38i#d< do#s not gi;# t/# 3s3r3t3ar4 t/# rig/t to r##i;# t/# r#ntals o t/# o99#rial b3ilding onstr3t#d b4 t/# ;#nd##s @it/ 3nds borro@#d ro9 t/# R#/abilitation and Finan# Cor8oration< t/# loan b#ing s#3r#d b4 a 9ortgag# o;#r t/# lots sold' Pag# $ %%%
Obligations and Contrats! "otrin#s and Cas# "ig#sts
/NI0ERSAL )OOD COR. %. CA &G'R' No' L(.,%00- 11 SCRA %- %1 :a4 %,6*5
Castro, J.: )a=ts? BaD in %,1+< :agdalo Franiso Sr' diso;#r#d and in;#nt#d a or93la or t/# 9an3at3r# o ood s#asoning 9ad# o banana Dno@n as :aran sa3#' Plainti r#gist#r#d /is trad#9arD as o@n#r and in;#ntor in t/# B3r#a3 o Pat#nts' "3# to laD o 3nds to #8ands /is b3sin#ss< /# d#id#d to a;ail o a s#3r#d inanial assistan# @it/ Tirso T' R#4#s< and or9#d t/# Uni;#rsal Food Cor8oration along @it/ s#;#ral ot/#r 8#o8l#' :agdalo Franiso @as a88oint#d as t/# /#ad /#9ist and Vitoriano Franiso @as a88oint#d as a3ditor' Sin# t/# start o t/# or8oration< :agdalo Franiso n#;#r allo@#d an4on# insid# t/# laborator4< to D##8 t/# or93la s#r#t' Ho@#;#r< t/# 8lainti #8r#ss#d /is @illingn#ss to gi;# t/# or93la to d##ndants 8ro;id#d t/at it s/o3ld b# D#8t insid# t/# sa# and 9a4 onl4 b# o8#n#d @/#n /# is alr#ad4 ina8aitat#d or /is ob as t/# /i# /#9ist' Tirso T' R#4#s r#3#st#d to allo@ on# or t@o a9il4 9#9b#rs to obs#r;# t/# 8r#8aration o t/# sa3# b3t it @as d#ni#d b4 t/# 8lainti' "3# to sarit4 o 9at#rials< a 9#9orand39 @as iss3#d stating t/at onl4 Riardo Franiso an b# r#tain#d in t/# ator4 and t/# salar4 o :agdalo Franiso s/all b# sto88#d or t/# 9#an ti9# and s/all r#s39# onl4 @/#n t/# or8oration s/all r#s39# its o8#ration' Fi;# da4 lat#r< a 9#9orand39 @as iss3#d to Vitoriano Franiso ord#ring /i9 to r#8ort to t/# ator4 and 8rod3# Q:aran Sa3#Q at t/# rat# o not l#ss t/an %** as#s a da4 so as to o8# @it/ t/# ord#rs @it/ instr3tions to taD# onl4 t/# n##ssar4 dail4 #98lo4##s @it/o3t #98lo4ing 8#r9an#nt on#s' On "##9b#r .,< %,7*< anot/#r 9#9orand39 @as iss3#d instr3ting Riardo Franiso< as C/i# C/#9ist< and Poririo Jarraga< as Ating S38#rint#nd#nt< to 8rod3# :aran Sa3# r#g3larl4 starting 2an3ar4 .< %,7% @it/ 3rt/#r instr3tions to /ir# dail4 labor#rs in ord#r to o8# @it/ t/# 3ll blast 8rot#tion' :agdalo V' Franiso< Sr' r##i;#d /is salar4 as C/i# C/#9ist in t/# a9o3nt o P1**'** a 9ont/ onl4 3ntil /is s#r;i#s @#r# t#r9inat#d on No;#9b#r 1*< %,7*'
Pag# $ %%.
Obligations and Contrats! "otrin#s and Cas# "ig#sts
On *, and %7 2an3ar4 %,7% t/# Uni;#rsal Food Cor8oration start#d looDing or a b34#r o t/# or8oration inl3ding its trad#9arDs< or93la and ass#ts at a 8ri# o not l#ss t/an P1**<***'**' Wit/ all t/# 9#9orand39 iss3#d< :agdalo Franiso Sr' @as n#;#r r#all#d baD to @orD' On %) F#br3ar4 %,7%< :agdalo Franiso and Vitoriano Franiso il#d an ation or r#sission o a ontrat #ntitl#d Bill o Assign9#nt' T/#4 8ra4#d t/at t/# Uni;#rsal Food Cor8oration b# ad3dg#d as @it/o3t an4 rig/t to t/# 3s# o t/# :aran trad#9arD and or93la< t/at s3/ rig/t b# r#stor#d to t/#9 and t/at :agdalo Franiso b# 8aid o /is 3n8aid salar4 ro9 "##9b#r %< %,7*< as @#ll as da9ag#s in t/# s39 o P)*<***< and to 8a4 t/# osts o s3it'
Issue? W/#t/#r or not t/# r#sission o t/# Bill o Assign9#nt is 8ro8#r'
7el"? Y#s< t/# Bill o Assign9#nt s/o3ld b# r#sind#d' Aording to t/# Artil# %%,% o t/# Ci;il Cod#< T/# 8o@#r to r#sind obligations is i98li#d in r#i8roal on#s< in as# on# o t/# obligors s/o3ld not o98l4 @it/ @/at is in39b#nt 38on /i9 and t/at T/# in3r#d 8art4 9a4 /oos# b#t@##n t/# 3lill9#nt and t/# r#sission o t/# obligation< @it/ t/# 8a49#nt o da9ag#s in #it/#r as#' H# 9a4 also s##D r#sission #;#n at#r /# /as /os#n 3lill9#nt< i t/# latt#r s/o3ld b#o9# i98ossibl#' T/o3g/ r#sission o a ontrat @ill not b# 8#r9itt#d or a slig/t or as3al br#a/ and onl4 or s3/ s3bstantial and 3nda9#ntal br#a/ as @o3ld d##at t/# ;#r4 ob#t o t/# 8arti#s in 9aDing t/# agr##9#nt' In t/# 8r#s#nt as#< t/# dis9issal o t/# r#s8ond#nt ro9 /is 8osition is a 3nda9#ntal and s3bstantial br#a/ o t/# Bill o Assign9#nt< and /# @as not at a3lt or did not o99it n#glig#n# to b# dis9iss#d' T/# o8tion to /oos# b#t@##n 3lill9#nt and r#sission r#sts in t/# in3r#d 8art4< and t/# r#s8ond#nts /ad no alt#rnati;# b3t to il# t/# 8r#s#nt ation or r#sission @it/ da9ag#s' T/# r#s8ond#nt 9a4 not /a;# agr##d to t/# Bill o Assign9#nt i not or t/# t#r9s t/at r#s8ond#nt @ill b# a88oint#d as t/# or8orations S#ond Vi# Pr#sid#nt and C/i# C/#9ist in a 8#r9an#nt basis< t/at t/# 9an3at3ring o t/# sa3# @ill b# 3nd#r /is absol3t# ontrol and s38#r;ision o;#r t/# laborator4 assistants and 8#rsonn#l and or /i9 to #ns3r# 9ono8ol4 o t/# or93la o t/# sa3# and in t/# 8ro#ss s/all s#3r# a li#ti9# ob and st#ad4 ino9#' T/#r#or#< t/# Bill o Assign9#nt s/o3ld b# r#sind#d'
RO#AN %. CA &G'R' No' 66).0- %16 SCRA 071- %, 23n# %,,%5
4egalado, J.: Pag# $ %%1
Obligations and Contrats! "otrin#s and Cas# "ig#sts
)a=ts? On ., No;#9b#r %,+) 8ri;at# r#s8ond#nts il#d a o98laint or n3lliiation o d##d o donation< r#sission o ontrat and r#on;#4an# o r#al 8ro8#rt4 @it/ da9ag#s against 8#tition#rs Flor#nio and Sol#dad C' Ignao and t/# Ro9an Cat/oli Bis/o8 o I93s< Ca;it#< tog#t/#r @it/ t/# Ro9an Cat/oli Ar/bis/o8 o :anila< b#or# t/# R#gional Trial Co3rt< Bran/ ==< I93s< Ca;it#' On .1 A3g3st %,1*< t/# s8o3s#s E3s#bio d# Castro and :artina Ri#ta< no@ bot/ d##as#d< ##3t#d a d##d o donation in a;or o t/#r#in d##ndant Ro9an Cat/oli Ar/bis/o8 o :anila o;#ring a 8ar#l o land ontaining an ar#a o ,7) s3ar# 9#t#rs< 9or# or l#ss< @it/ a ondition t/at t/# don## s/all not dis8os# or s#ll t/# 8ro8#rt4 @it/in a 8#riod o on# /3ndr#d %** 4#ars ro9 t/# ##3tion o t/# d##d o donation< ot/#r@is# a ;iolation o s3/ ondition @o3ld r#nd#r i8so ato n3ll and ;oid' Aro3nd 1* 23n# %,+*< and @/il# still @it/in t/# 8ro/ibiti;# 8#riod to dis8os# o t/# 8ro8#rt4< t/# 8#tition#r ##3t#d a d##d o absol3t# sal# o t/# 8ro8#rt4 s3b#t o t/# donation in a;or o 8#tition#rs Flor#nio and Sol#dad C' Ignao in onsid#ration o t/# s39 o P/8%%)<***'**' T/is l#d to t/# iling o t/# o98laint b4 t/# 8ri;at# r#s8ond#nts' P#tition#rs il#d 9otion to dis9iss on t/# gro3nds t/at 8ri;at# r#s8ond#nts /a;# no l#gal a8ait4 to s3#- t/# o98laint stat#s no a3s# o ation< and t/# a3s# o ation< i an4< /as 8r#srib#d' On *, 2an3ar4 %,+)< Ro9an Cat/oli Ar/bis/o8 o :anila also il#d a 9otion to dis9iss gi;#n t/at /# is not a r#al 8art4 in int#r#st and< t/#r#or#< t/# o98laint do#s not stat# a a3s# o ation against /i9' T/# trial o3rt iss3#d an ord#r dat#d 1% 2an3ar4 %,+0< dis9issing t/# o98laint on t/# gro3nd t/at t/# a3s# o ation /as 8r#srib#d' Pri;at# r#s8ond#nts t/#r#at#r a88#al#d to t/# Co3rt o A88#als< @/i/ /#ld t/at t/# ation /as not 4#t 8r#srib#d< and r#nd#r#d a d#ision in a;or o 8ri;at# r#s8ond#nts' It r#9and#d t/# as# baD to t/# lo@#r o3rt or 3rt/#r 8ro##ding' P#tition#rs il#d t/#ir s#8arat# 9otions or r#onsid#ration<< @/i/ @#r# d#ni#d b4 t/# CA' H#n#< t/# 8r#s#nt 8#tition'
Issue? W/#t/#r or not t/# 8#tition#rs 9a4 in;oD# Artil# 67) o t/# Ci;il Cod# @/i/ 8ro;id#s t/at Qt/# donation s/all b# r#;oD#d at t/# instan# o t/# donor< @/#n t/# don## ails to o98l4 @it/ Pag# $ %%)
Obligations and Contrats! "otrin#s and Cas# "ig#sts
an4 o t/# onditions @/i/ t/# or9#r i98os#d 38on t/# latt#r
7el"? No< t/# 8#tition#rs 9a4 not in;oD# Artil# 67) o t/# Ci;il Cod#' Und#r Artil# 67) o t/# Ci;il Cod# an ation or t/# r#;oation o a donation 93st b# bro3g/t @it/in o3r ) 4#ars ro9 t/# non(o98lian# o t/# onditions o t/# donation' Artil# 61. o t/# Ci;il Cod# 8ro;id#s t/at donations inter vivos s/all b# go;#rn#d b4 t/# g#n#ral 8ro;isions on ontrats and obligations in all t/at is not d#t#r9in#d in Titl# III< BooD III on donations' T/# Titl# III do#s not /a;# an #8liit 8ro;ision on t/# 9att#r o a donation @it/ a r#sol3tor4 ondition and @/i/ is s3b#t to an #8r#ss 8ro;ision t/at t/# sa9# s/all b# onsid#r#d ipso facto r#;oD#d 38on t/# br#a/ o said r#sol3tor4 ondition i98os#d in t/# d##d' W/#n a d##d o donation #8r#ssl4 8ro;id#s or a3to9ati r#;oation and r#;#rsion o t/# 8ro8#rt4 donat#d< t/# r3l#s on ontrat and t/# g#n#ral r3l#s on 8r#sri8tion s/o3ld a88l4< and not Artil# 67) o t/# Ci;il Cod#' :or#o;#r< t/# o3rt r#it#rat#d t/# dotrin# t/at a 3diial ation is 8ro8#r onl4 @/#n t/#r# is abs#n# o a s8#ial 8ro;ision granting t/# 8o@#r o an#llation' T/# ;alidit4 o s3/ a sti83lation in t/# d##d o donation 8ro;iding or t/# a3to9ati r#;#rsion o t/# donat#d 8ro8#rt4 to t/# donor 38on non(o98lian# o t/# ondition @as 38/#ld in t/# r##nt as# o e %una, et al. vs. A#rigo, et al @/#r# t/# S38r#9# Co3rt /#ld t/at s3/ sti83lation is in t/# nat3r# o an agr##9#nt granting a 8art4 t/# rig/t to r#sind a ontrat 3nilat#rall4 in as# o br#a/< @it/o3t n##d o going to o3rt< and t/at< 38on t/# /a88#ning o t/# r#sol3tor4 ondition or non( o98lian# @it/ t/# onditions o t/# ontrat< t/# donation is a3to9atiall4 r#;oD#d @it/o3t n##d o a 3diial d#laration to t/at ##t' T/# as# at bar is also s3b#t to t/# sa9# r3l#s b#a3s# o its 8ro;ision on a3to9ati r#;oation 38on t/# ;iolation o a r#sol3tor4 ondition< ro9 8arit4 o r#asons said 8rono3n#9#nts in "# L3na 8#rtin#ntl4 a88l4'
SONGC/AN 0. IAC &G'R' No' 60*,7- %,% SCRA .+- ., Otob#r %,,*5
2edialdea, J.: )a=ts? Vitoriano Al;iar @as t/# o@n#r o t@o 8ar#ls o lands in La Union and on t/# land< a b3ilding o@n#d b4 /is son stood' On ., S#8t#9b#r %,77< t/# Al;iars sold t/# 8ro8#rti#s to t/# 8#tition#r' On %* Otob#r %,77< Song3an ##3t#d a "##d O R#83r/as# o T@o Par#ls o Land and a R#sid#ntial B3ilding gi;ing t/# Al;iars t/# rig/t to r#83r/as# t/# 8ro8#rt4 or t/# a9o3nt o Pag# $ %%0
Obligations and Contrats! "otrin#s and Cas# "ig#sts
P/8 1)<*.7'*, or t/# 8#riod o %* 4#ars and t/# r#d#98tion#r s/all 8a4 or t/# ost o i98ro;#9#nts' An 3ndat#d additional ondition @as s/o@ in t/# dorsal 8ortion o t/# do39#nt stating t/at @/#n t/# Al;iars @as abl# to ##ris# t/#ir ig/t to r#83r/as#< Song3an s/all b# gi;#n t/# rig/t o l#as# or t/# 8#riod o t@#nt4(i;# 4#ars' Wit/ a 9ont/l4 r#ntal o t/r## /3ndr#d and nin#t4 8#sos' T/# signat3r#s o t/# Al;iars a88#ar in t/# botto9 8art o t/# ondition' In :ar/ %,7,< t/# b3ilding @as ra#d b4 ir#' Song3an t/#n b3ilt a n#@ b3ilding at /is o@n #8#ns#' In %,6)< t/# Al;iars il#d a o98laint against Song3an or R#d#98tion @it/ onsignation and o98#l Song3an to l#t t/#9 r#d##9 t/# r#alti#s' B3t Song3an r#3s#d to s#ll t/#9 baD t/# 8ro8#rti#s b#a3s# t/# Al;iars is onl4 t#nd#ring t/# a9o3nt o P/8 1)<*.7'** b3t /# @ant#d to b# r#i9b3rs#d o t/# a9o3nt /# /ad s8#nt in r#(b3ilding t/# #stablis/9#nt and or t/# r#gistration o s3/' Al;iars lai9#d< /o@#;#r< t/at t/#ir transation @as #3itabl# and t/#r#or#< Song3an annot o98#l t/#9 to 8a4 or t/# ost o t/# n#@ b3ilding @it/o3t t/#ir 8#r9ission' On ., 23l4 %,66< t/# Co3rt o First Instan# in La Union r#nd#r#d its d#ision #noining t/# 8arti#s to o98l4 @it/ t/# d##d o sal# @it/ rig/t o r#83r/as# and o98#lling t/# Al;iars t/at in ##rising t/#ir rig/t o r#83r/as#< t/#4 s/o3ld 8a4 or t/# n#@ b3ilding in addition to t/# r#83r/as# 8ri# and t/# additional #8#ns# o P/8%<***'**' Song3an a88#al#d ro9 t/is d#ision< on t/# gro3nds t/at /is rig/t to l#as# t/# 8ro8#rt4 @as not addr#ss#d< b3t d#ision @as air9#d b4 t/# Co3rt o A88#als @/il# addr#ssing t/at sin# t/# o3rt /as 38/#ld t/# ;alidit4 o t/# d##d< it is 3nn##ssar4 to 8rono3n# t/# ;alidit4 o t/# said la3s#' T/# d#ision /as b#o9# inal and ##3tor' T/# @rit o ##3tion @as iss3#d on *% A8ril %,+%< b3t @a 3nsatisi#d b#a3s# Song3an r#3s#d to a#8t t/# /#D as it @as not a l#gal t#nd#r and also t/at t/# r#ason t/at t/# Al;iars r#3s#d to ##3t# t/# l#as# ontrat in /is a;or' On *6 23l4 %,+%< Song3an il#d a o98laint or t/# R#sission o t/# rig/t to r#83r/as# on t/# gro3nds t/at t/# Al;iars /as or#it#d t/#ir rig/t to r#83r/as# b4 ailing to ##ris# s3/ rig/t 1* da4s at#r t/# d#ision o t/# Co3rt /as b##n inal in ontrast @it/ t/# Artil# %7*7 o t/# Ci;il Cod#' On *, 23l4 %,+%< t/# trial o3rt in t/# or9#r i;il as# iss3#d a d##d o r#on;#4an# in a;or o t/# Al;iars' And on %% 23l4 %,+%< Song3an a9#nd#d /is o98laint stating t/at t/# r#ason or /i9 in r#sinding t/# d##d o r#83r/as# @as t/# ail3r# o t/# Al;iars to ##3t# t/# ontrat o l#as# in a;or to /i9 iting Artil# %%,% o t/# Ci;il Cod#' On %, :ar/ %,+)< t/# trial o3rt r#nd#r#d its d#ision granting t/# @rit o r#on;#4an# and o98#lling t/# Al;iars to ##3t# a ontrat o l#as# in a;or o So ng3an' Pag# $ %%7
Obligations and Contrats! "otrin#s and Cas# "ig#sts
Bot/ 8arti#s a88#al#d ro9 t/# d#ision' CA r#nd#r#d its d#ision to o98#l t/# Al;iars to allo@ Song3an to l#as# %1 o t/# 8ro8#rt4' Song3an il#d t/# a88#al or t/is d#ision'
Issue? W/#t/#r or not t/# rig/t to r#83r/as# 9a4 b# r#sind#d on t/# gro3nds 8r#s#nt#d b4 Song3an'
7el"? No< t/# rig/t to r#83r/as# 9a4 not b# r#sind#d' Artil# %%,% is not a88liabl# in t/# 8r#s#nt as#' T/# obligation is not r#i8roal< b#a3s# to d#in# r#i8roal obligations< t/# obligation o on# is a r#sol3tor4 ondition o t/# obligation o t/# ot/#r< t/# non(3lill9#nt o @/i/ #ntitl#s t/# ot/#r 8art4 to r#sind t/# ontrat' In t/# 8r#s#nt as#< t/#r# ar# t@o and distint obligations @/i/ is ind#8#nd#nt o t/# ot/#r! Song3ans obligation is to r#on;#4 t/# 8ro8#rt4 and Al;iars is to l#as# t/# 8r#9is#s to t/# or9#r' Bot/ is not d#8#nd#nt o t/# ot/#r' T/#r#or#< r#sission o t/# rig/t to r#83r/as# annot b# in;oD#d b4 8#tition#r'
SANC7O %. LI;ARRAGA &G'R' No' L(110+*- 00 P/il 7*%- *7 F#br3ar4 %,1%5
4o$ualde, J.: )a=ts? T/# 8lainti il#d t/# as# asDing or t/# r#sission o t/# 8artn#rs/i8 ontrat b#t@##n /i9s#l and t/# d##ndant and t/# r#i9b3rs#9#nt o /is in;#st9#nt in t/# a9o3nt o it4 t/o3sand 8#sos' T/# d##ndant d#ni#s t/# all#gations o t/# 8lainti and asD#d t/# o3rt or t/# dissol3tion o t/# 8artn#rs/i8 and /is 8a49#nt as its 9anag#r and ad9inistrator' T/# Co3rt o First Instan# o :anila d#lar#d t/at 8artn#rs/i8 ontrat is dissol;#d< ord#ring t/# d##ndant to li3idat# t/# 8artn#rs/i8' T/# 8#tition#r a88#al#d ro9 said d#ision'
Issue? W/#t/#r or not t/# o3rt #rr#d in /olding t/at t/# 8lainti and a88#llant is not #ntitl#d to t/# r#sission o t/# 8artn#rs/i8 ontrat and t/at Artil# %%.) is not a88liabl# in t/# 8r#s#nt as#' Pag# $ %%6
Obligations and Contrats! "otrin#s and Cas# "ig#sts
7el"? No< t/# o3rt did not o99it an #rror in /olding t/at t/# 8lainti and a88#llant is not #ntitl#d to t/# r#sission o t/# 8artn#rs/i8 ontrat and t/at Artil# %%.) is not a88liabl# in t/# 8r#s#nt as#' T/# 8ro;ision o Artil# %%.) is not a88liabl# in t/# 8r#s#nt as# as it 8#rtains to r#sol3tions o obligations in g#n#ral' Ho@#;#r< Artil#s %7+% and %7+. r##rs to ontrat 8artn#rs/i8s' In t/# 8r#s#nt as#< t/o3g/ t/# d##ndant ail#d to 8a4 or t/# @/ol# a9o3nt /# /ad bo3nd /i9s#l to 8a4< t/# 8lainti 9a4 still not a3ir# t/# rig/t to d#9and r#sission' T/# d##ndant 9a4 /a;# ind#bt#d /i9s#l to t/# 8artn#rs/i8 @it/ int#r#st and da9ag#s b3t r#sission 3nd#r Artil# %%.) annot b# in;oD#d' It is a @#ll s#ttl#d r3l# t/at s8#ial 8ro;isions 8r#;ail o;#r g#n#ral on#s' T/#r#or#< t/# o3rt did not o99it an #rror in /olding t/at t/# 8lainti and a88#llant is not #ntitl#d to t/# r#sission o t/# 8artn#rs/i8 ontrat and t/at Artil# %%.) is not a88liabl# in t/# 8r#s#nt as#'
CALTE 7ILIINES, INC. %. IAC &G'R' No' 6)61*- %67 SCRA 6)%- .0 A3g3st %,+,5
2edialdea, J.: )a=ts? Pri;at# r#s8ond#nt :anana 83r/as#d r#dit 8#trol#39 8rod3ts ro9 8#tition#r' As o 1% A3g3st %,7, /is d#bt a9o3nt#d to P/8 17%<.%+'77' On *) Otob#r %,7,< 8ri;at# r#s8ond#nt ##3t#d a "##d 9ortgaging in a;or o t/# 8#tition#r to s#3r# r#s8ond#nts d#bt @it/ t/#9' P#tition#r s#nt stat#9#nt o ao3nts to r#s8ond#nt 93lti8l# ti9#s and d#9and#d its 8a49#nt' Ho@#;#r t/# r#s8ond#nt still ails and r#3s#s to 8a4 t/# d#bt' T/is r#s3lt#d to 8#tition#r iling a o98laint or t/# r#o;#r4 o t/# a9o3nt ro9 t/# r#s8ond#nt' On %0 S#8t#9b#r %,6*< Calt# or#los#d t/# 9ortgag#d 8ro8#rt4' On 1* Otob#r %,6*< t/# 8ro8#rt4 @as sold to Calt# in an a3tion' It @as all#g#d t/at t/# or#los3r# @as Dno@n b4 :anana onl4 on *) Otob#r %,+* @/#n it @as 9ani#st#d b4 t/# 8#tition#r in its r#8l4 to t/# o88osition o :anana in t/# 9otion or ##3tion 8#nding a88#al' On .1 23l4 %,+*< t/# trial o3rt d#id#d in a;or o Calt#< ord#ring :anana to 8a4 t/# or9#r o t/# a9o3nt o P/8101<.%+'77 at#r d#d3ting P/8+<***'** aid b4 t/# ins3ran#' It /as an int#r#st o %. 8#r ann39 ro9 %6 A3g3st %,6* and .* or attorn#4s ##s' Pag# $ %%+
Obligations and Contrats! "otrin#s and Cas# "ig#sts
:anana a88#al#d t/# d#ision< b3t t/# Int#r9#diat# A88#llat# Co3rt IAC air9#d t/# a88#al#d d#ision' B3t 38on 9otion or r#onsid#ration o bot/ 8arti#s< t/# o3rt r#nd#r#d a d#ision
Issue? W/#t/#r or not t/# iling o t/# o98laint or r#o;#r4 o t/# a9o3nt o ind#bt#dn#ss and t/# s3bs#3#nt #tra3diial or#los3r# o t/# d##d o irst 9ortgag# onstit3t#s s8litting o a singl# a3s# o ation'
7el"? No< t/# instit3tion o ation or r#o;#r4 and t/# s3bs#3#nt ation or #tra3diial or#los3r# do#s not s8lit t/# a3s# o ation For non(8a49#nt o a not# s#3r#d b4 9ortgag#< t/# r#ditor /as a singl# a3s# o ation against t/# d#btor' T/is singl# a3s# o ation onsists in t/# r#o;#r4 o t/# r#dit @it/ ##3tion o t/# s#3rit4' In ot/#r @ords< t/# r#ditor in /is ation 9a4 9aD# t@o d#9ands< t/# 8a49#nt o t/# d#bt and t/# or#los3r# o /is 9ortgag#' B3t bot/ d#9ands aris# ro9 t/# sa9# a3s#< t/# non( 8a49#nt o t/# d#bt< and< or t/at r#ason< t/#4 onstit3t# a singl# a3s# o ation' T/o3g/ t/# d#bt and t/# 9ortgag# onstit3t# s#8arat# agr##9#nts< t/# latt#r is s3bsidiar4 to t/# or9#r< and bot/ r##r to on# and t/# sa9# obligation' In t/# 8r#s#nt as#< t/# 8#tition#r /as onl4 on# a3s# o ation @/i/ is t/# non(8a49#nt o d#bt' T@o /oi#s< /o@#;#r< @as gi;#n as r#9#di#s to t/is a3s# o ation< @/i/ is #it/#r or t/# 8a49#nt o d#bt and t/# or#los3r# o t/# 9ortgag#'
S/RIA %. IAC &G'R' No' 61+,1- %0% SCRA 77%- 1* 23n# %,+65
utierre, J.: )a=ts? On 1% :ar/ %,60< Pri;at#(r#s8ond#nts ar# t/# o@n#r o a 8ar#l o land' T/#4 #nt#r#d a "##d o Sal# @it/ :ortgag# @it/ t/# 8#tition#rs' T/# 8#tition#rs /as all#g#dl4 ;iolat#d t/# t#r9s o t/# ontrat b4 ailing to 8a4 t/# sti83lat#d instal9#nts< as onl4 on# o t/# instal9#nt @as 8aid' R#8#at#d d#9ands @#r# 9ad# b4 t/# 8ri;at# r#s8ond#nts< b3t 8laintis ail#d to o98l4' On .* 23n# %,+1< 8ri;at# r#s8ond#nts il#d an ation or r#sission o t/# ontrat and da9ag#s' W/il# on %) No;#9b#r %,+1 8#tition#rs il#d t/#ir ans@#r @it/ o3nt#r lai9 and a 9otion dis9iss on %7 23l4 %,+)' P#tition#rs all#g# t/at r#s8ond#nts ar# not #ntitl#d to t/# r#9#d4 o r#sission b#a3s# o t/# 8r#s#n# o t/# r#9#d4 o or#los3r# in t/# "##d o Sal# @it/ :ortgag#'
Pag# $ %%,
Obligations and Contrats! "otrin#s and Cas# "ig#sts
On *7 A3g3st %,+)< 8#tition#rs o#r#d to 8a4 r#s8ond#nts all t/# o3tstanding balan# b3t t/# latt#r r##t#d t/# 8a49#nt' On .7 No;#9b#r %,+)< r#s8ond#nt o3rt r##t#d t/# 9otion to dis9iss il#d b4 t/# 8#tition#rs' P#tition#rs il#d a 9otion or r#onsid#ration< b3t @as d#ni#d b4 t/# r#s8ond#nt o3rt'
Issue? W/#t/#r or not t/# s#ll#r 9a4 r#sort to t/# r#9#d4 o r#sission 3nd#r Artil# %%,% o t/# Ci;il Cod#< @/i/ 8ro;id#s or t/# s3bsidiar4 r#9#d4 o r#sission in as# o br#a/ o r#i8roal obligation'
7el"? No< t/# s#ll#r 9a4 not r#sort to t/# r#9#d4 o r#sission 3nd#r Artil# %%,% o t/# Ci;il Cod#' Art' %1+1 o t/# Ci;il Cod# 8ro;id#s! T/# ation or r#sission is s3bsidiar4- it annot b# instit3t#d ##8t @/#n t/# 8art4 s3#ring da9ag# /as no ot/#r l#gal 9#ans to obtain r#8aration or t/# sa9#' Also< Aording to Artil# %)0+< b4 t/# ontrat o sal#< t/# ;#ndor obligat#s /i9s#l to trans#r t/# o@n#rs/i8 o and to d#li;#r a d#t#r9inat# t/ing to t/# b34#r< @/o in t3rn< is obligat#d to 8a4 a 8ri# #rtain in 9on#4 or its #3i;al#nt' In t/# 8r#s#nt as#< Artil# %%,% is not a88liabl# sin# t/# r#s8ond#nts /a;# 3ll4 o98li#d @it/ t/#ir 8art o t/# r#i8roal obligation and t/# 8#tition#r 3lill#d /is #nd o t/# bargain @/#n /# ##3t#d t/# d##d o 9ortgag#' T/# 8#tition#rsK br#a/ o obligations is not @it/ r#s8#t to t/# 8#r#t#d ontrat o sal# b3t in t/# obligations r#at#d b4 t/# 9ortgag# ontrat' T/# r#9#d4 o r#sission is not a 8rini8al ation r#taliator4 in /arat#r b3t b#o9#s a s3bsidiar4 on# @/i/ b4 la@ is a;ailabl# onl4 in t/# abs#n# o an4 ot/#r l#gal r#9#d4' Ho@#;#r< or#los3r# @as sti83lat#d in t/#ir ontrat and t/#r#or#< aording to t/# Artil# %0*)< it 93st b# ollo@#d' T/#r#or#< r#s8ond#nts 9a4 onl4 or#los# t/# 8ro8#rt4 in t/# #;#nt t/at t/# 8#tition#rs @ill still d#a3lt in t/# 8a49#nt o t/# d##d o sal# @it/ 9ortgag#'
%.
S/BSIDIAR: RE#EDIES -. ART. &&22 %i. ANCILLAR: RE#EDIES -. ATTAC7#ENT, RELE0IN, GARNIS7#ENT, RECEI0ERS7I, EA#INATION O) DEBTOR, ETC. &&. @INDS O) OBLIGATION <1 /RE AND CONDITIONAL ii. @INDS O) CONDITION Pag# $ %.*
Obligations and Contrats! "otrin#s and Cas# "ig#sts
LIEBENO3 %. 7ILIINE 0EGETABLE OIL CO#AN: &G'R No' %1)71- 1, P/il 7*- *, No;#9b#r %,%+5
Street, J.: )a=ts? Plainti il#d t/# 8r#s#nt as# against d##ndant or t/# r#o;#r4 o t/# s39 o 9on#4 to @/i/ t/# 8#tition#r b#li#;#s t/at /# is #ntitl#d o b4 @a4 o an additional salar4 @/il# b#ing #98lo4#d ro9 t/# r#s8ond#nt as sti83lat#d in a ontrat' It @as stat#d t/#r#in t/at t/# a88oint9#nt o t/# 8lainti s/all b# as t/# s38#rint#nd#nt o t/# d##ndants ator4 in Nagta/an< :anila or a 8#riod o on# 4#ar ro9 *% A8ril %,%) @it/ a 9ont/l4 o98#nsation o P/80**'**< a li;ing 3art#rs and an4 ot/#r @a4 o bon3s t/at t/# board o dir#tors 9a4 d##9 it' T/# 8lainti a#8t#d t/# t#r9s o t/# ontrat' H# all#g#d t/at /is sDill and abilit4 /as inr#as#d t/# 8rod3ti;it4 and 8roit o t/# o98an4 @/i/ @as not d#ni#d' T/# 8lainti ont#nd#d t/at t/# sti83lation r#garding t/# bon3s @as not 3lill#d b4 t/# d##ndant' T/# P/8 )<0**'** gi;#n b4 P/8 60*'** 8#r 9ont/ or si 9ont/< @as onsid#r#d b4 t/# 8lainti as a r## git' T/# Co3rt o First Instan# d#id#d in a;or o t/# d##ndant' T/# 8lainti a88#al#d t/# d#ision< t/3s< t/# 8r#s#nt 8#tition'
Issue? %' W/#t/#r or not t/# sti83lation o t/# ontrat in r#gards to t/# bon3s is binding' .' W/#t/#r or not t/# a9o3nt o t/# bon3s an b# 3diiall4 r#;i#@#d'
7el"? Y#s< t/# sti83lation o t/# ontrat in r#gards to t/# bon3s is binding' Aording to t/# Artil# %1*+< t/#n Artil# %.07 8ro;id#s t/at t/# ;alidit4 and 8#ror9an# o a ontrat annot b# l#t to t/# @ill o on# o t/# ontrating 8arti#s' T/# 8ro9is# to 8ro;id# bon3s r#at#s a l#gal obligation binding 38on t/# 8ro9isor' T/is Dind o 8ro9is# is not n3gator4< 3nd#r Artil# %%+.< t/#n %%%0< as #9bod4ing a ondition d#8#nd#nt #l3si;#l4 38on t/# @ill o t/# obligor' Also< 3nd#r Artil# %1),< t/#n Artil# %.61< M T/# at t/at t/# 3antit4 is not d#t#r9inat# s/all notb# an obstal# to t/# #ist#n# o t/# ontratM In t/# 8r#s#nt as#< t/# 3n#rtaint4 o t/# a9o3nt o t/# bon3s do#s not bar t/# ;alidit4 o t/# ontrat' :or#o;#r< t/# 8ro9is# is absol3t# and 3nonditional' It is not ondition#d 38on satisator4 s#r;i# nor to t/# d3ration o t/# s#r;i# nor 38on t/# 8roits #arn#d' T/#s# 9a4 o8#rat# 38on t/# 9inds o t/# board o dir#tors< b3t t/#s# ar# 3nonn#t#d to l#gal rig/t o t/# 8lainti to r##i;# so9#t/ing as a bon3s' Pag# $ %.%
Obligations and Contrats! "otrin#s and Cas# "ig#sts
T/#r#or# t/# ontrat is ;alid and binding b3t t/# a9o3nt to b# gi;#n as a bon3s is o3t o t/# o3rts 3risdition'
TRILLANA %. /E;ON COLLEGE &G'R' No' L(0**1- ,1 P/il 1+1- .6 23n# %,015
5aras, J.: )a=ts? "a9asaCrisosto9o s#nt a l#tt#r to t/# board o tr3st##s o t/# >3#on Coll#g# In'< /#r#in r#s8ond#nt< sa4ing t/at s/# @ill #nt#r /#r s3bsri8tion o t@o(/3ndr#d s/ar#s @it/ a 8ar ;al3# o P/8%**'** #a/' Ho@#;#r< s/# also stat#d t/at s/# @ill gi;# t/# a9o3nt @/#n s/# @as abl# to /ar;#st is/#s' T/# l#tt#r @as dat#d *% 23n# %,)+' "a9asa Crisosto9o di#d on .7 Otob#r %,)+' T/# r#s8ond#nt 8r#s#nt#d a lai9 b#or# t/# Co3rt o First Instan# or t/# a9o3nt o P/8.*<***'** r#8r#s#nting t/# ;al3# o t/# s3bsri8tion to t/# a8ital stoD o t/# r#s8ond#nt' T/# lai9 @as o88os#d b4 t/# 8#tition#r< @/o is t/# ad9inistrator o t/# #stat# o t/# d##as#d' T/# o3rt iss3#d t/# d#ision dis9issing t/# r#s8ond#nts lai9 on t/# gro3nds t/at it @as not r#gist#r#d in t/# S#3rit4 and E/ang# Co99ission' It @as o3nd o3t t/at t/# a88liation s#nt b4 Crisosto9o @as @ritt#n in a g#n#ral or9' :or#o;#r t/# l#tt#r @as s#nt not @it/ t/# a9o3nt o t/# initial 8a49#nt b3t @it/ a ondition t/at t/# a9o3nt s/all b# 8aid b4 /#r 38on /#r /ar;#st o is/#s' T/#r# @as not/ing in t/# r#ords o t/# >3#on Coll#g# t/at it /as a#8t#d Crisosto9os t#r9 o 8a49#nt'
Issue? W/#t/#r or not t/# obligation o "a9asa Crisosto9o @/i/ aros# ro9 t/# l#tt#r s#nt to r#s8ond#nts stating t/# t#r9s o /#r 8a49#nt is binding'
7el"? No< t/# obligation o "a9asa Crisosto9o @/i/ aros# ro9 t/# l#tt#r s#nt to r#s8ond#nts is ;oid' Aording to t/# t/#n Artil# %%%0< and no@ t/# Artil# %%+.< o t/# Ci;il Cod#< W/#n t/# 3lill9#nt o t/# ondition d#8#nds 38on t/# sol# @ill o t/# d#btor< t/# onditional obligation s/all b# ;oid' I it d#8#nds 38on /an# or 38on t/# @ill o a t/ird 8#rson< t/# obligation s/all taD# ##t in onor9it4 @it/ t/# 8ro;isions o t/is Cod#'
Pag# $ %..
Obligations and Contrats! "otrin#s and Cas# "ig#sts
In t/# 8r#s#nt as#< t/# 8ro8osal o "a9asa Crisosto9o to 8a4 t/# ;al3# o t/# s3bsri8tion at#r s/# /as /ar;#st#d is/ is a ondition ob;io3sl4 d#8#nd#nt 38on /#r sol# @ill' It is a3ltati;# in nat3r#< @/i/ aording to t/# abo;# stat#d 8ro;ision is ;oid' T/#r#or#< t/# obligation o "a9asa Crisosto9o @/i/ aros# ro9 t/# l#tt#r s#nt to r#s8ond#nts stating t/# t#r9s o /#r 8a49#nt is ;oid< air9ing t/# ord#r a88#al#d t/#r#o'
TIBLE %. A/INO &G'R' No' L(.+,76- 70 SCRA .*6- .. 23l4 %,605
Isguerra, J.: )a=ts? P#tition#r @as a88oint#d ad9inistrator o t/# lat# E9ilio Tibl# @/o di#d on %) A3g3st %,06' R#s8ond#nt A3ino il#d @it/ t/# o3rt t/# lai9 against t/# #stat# o t/# lat# Tibl# t/# a9o3nt o P/8 1*<***'** on *7 F#br3ar4 %,0,' Aording to t/# lai9ant< /# 9#t Tibl# in t/# oi# o B3r#a3 o For#str4 in :anila< /i9 b#ing a ti9b#r li#ns##' Tibl# @as said to /a;# borro@#d 9on#4 ro9 /i9 in t/# total a9o3nt o P/80*<***'**' T/#r#at#r< Tibl# bo3g/t ro9 /i9 a or#st on#ssion in t/# a9o3nt o P/8%*6<***'**' U8on /is d#at/ aording to A3ino< Tibl# /as a d#bt a9o3nting to P/8 1*<***'** as s/o@n in t/# 8ro9issor4 not#s' H# 3rt/#r said t/at t/# on#ssion @as alr#ad4 trans#rr#d to Tibl#' H# r#9ind#d Tibl# r#8#at#dl4 o t/# d#bt< b3t Tibl# @o3ld 3st r#8l4 t/at /# do#snt /a;# 9on#4 4#t' T/# agr##9#nt b#t@##n /i9 and Tibl# in t/# #ssion o t/# .<*** /#tar#s o or#st land @as not 9ad# into @riting' Ho@#;#r< t/# ad9inistrator o t/# #stat# 8r#s#nt#d a di#r#nt stor4 r#garding t/# said transation' T/#4 said t/at t/# r#al agr##9#nt b#t@##n t/# 8arti#s @as or t/# #ssion o .<*** /#tar#s o ti9b#rland to Tibl# in onsid#ration o t/# a9o3nt o P/80*<***'** @/i/ @as alr#ad4 8aid b4 t/# latt#r' On *, A8ril %,00< t/# lai9ant @as abl# to on;in# t/# Tibl# to inr#as# t/# 8ri# ro9 P/80*<***'** to P/8+*<***'**' T/is l#d to t/# ##3tion o o3r 8ro9issor4 not#s b4 Tibl# 3nd#r onditions t/at t/# 8a49#nt s/all b# 9ad# d#8#nding on t/# o8#ration o t/# or#st land to /i9' At#r *+ :ar/ %,00< t/# lai9ant borro@#d s#;#ral a9o3nts o 9on#4 ro9 Tibl# in total o P/80*<***'**' In ail3r# to 8a4 s3/ borro@#d 9on#4< Tibl# s/all b#o9# a 8artn#r o t/# lai9ant in t/# o8#ration o t/# ti9b#rland' T/# o3rt o First Instan# b#li#;#d t/# 8#tition#rs sid# o t/# #;#nts' And r3l#d to dis9iss t/# lai9 o r#s8ond#nt A3ino and ord#r#d /i9 to 8a4 t/# a9o3nt o P/80*<***'**' A88#llat# o3rt r#;#rs#d t/is d#ision o t/#d lo@#r o3rt' It b#li#;#d t/# lai9ants sid# o t/# stor4' Pag# $ %.1
Obligations and Contrats! "otrin#s and Cas# "ig#sts
T/3s< t/# 8r#s#nt 8#tition or r#;i#@ on #rtiorari'
Issue? W/#t/#r or not t/# o3rt #rr#d in d#iding t/at t/# onditions 8ro;id#d b4 t/# lat# Tibl# or t/# 8a49#nt o a9o3nts #9bodi#d in t/# 8ro9issor4 not#s a ;oid onditional obligation'
7el"? No< t/# a88#llat# o3rt did not o99it an #rror into /olding t/at t/# ondition 8ro;id#d b4 Tibl# @as a ;oid onditional obligation' Artil# %%%0< or 8r#s#ntl4 t/# Artil# %%+.< o t/# Ci;il Cod# stat#s t/at W/#n t/# 3lill9#nt o t/# ondition d#8#nds 38on t/# sol# @ill o t/# d#btor< t/# onditional obligation s/all b# ;oid''' In t/# 8r#s#nt as#< t/# ondition or t/# 8a49#nt o t/# a9o3nts s/o@n in t/# 8ro9issor4 not#s @as l#arl4 d#8#nd#nt 38on Tibl#s o8#ration o t/# or#st on#ssion t/at /# a3ir#d ro9 A3ino' It is 3ndo3bt#dl4 a ;oid onditional obligation< sin# its 3lil9#nt is 9ad# to d#8#nd on t/# #l3si;# @ill o t/# d#btor< @/i/ is Tibl# and on @/#t/#r or not /# @ill o8#rat# t/# ti9b#r on#ssion' T/#r#or#< d#ision o t/# Co3rt o A88#als /as b##n air9#d and t/# ondition 8ro;id#d b4 t/# d##as#d Tibl# is ;oid'
ATENTE %. O#EGA &G'R' No' L())11- ,1 P/il .%+- ., :a4 %,015
5a#lo, J.: )a=ts? On .) A3g3st %,),< R#s8ond#nt iss3#d a r##i8t aDno@l#dging t/# a9o3nt o P/8%<7**'** ro9 8#tition#r' T/is a9o3nt is gi;#n to r#s8ond#nt as d#bt to b# 8aid' T/# r#s8ond#nt also stat#d t/at t/# 9on#4 s/all b# 8aid as soon as 8ossibl# or as soon as /# /as 9on#4 to 8a4 or it' It @as also sti83lat#d in t/# do39#nt t/at t/#r# @as no s#3rit4 or t/# said loan< and t/at r#s8ond#nt 93st 8a4 /is ind#bt#dn#ss to 8#tition#r b#or# /# an ##ris# /is rig/t to r#83r/as# t/# 8ro8#rt4 @/i/ /# sold to t/# 8#tition#r< 3nd#r a pacto de retro sal#' T/# Co3rt o First Instan# o L#4t# d#id#d in a;or o t/# 8#tition#r< and ord#r#d or t/# 8a49#nt o t/# d#bt' H#n# t/# 8r#s#nt a88#al'
Pag# $ %.)
Obligations and Contrats! "otrin#s and Cas# "ig#sts
Issue? W/#t/#r or not t/# o3rt /as 3risdition in t/# as# and s/o3ld b# t/# on# to d#t#r9in# t/# t#r9 o t/# 8a49#nt o t/# ind#bt#dn#ss'
7el"? Y#s< t/# o3rt /as 3risdition in t/# as# and s/o3ld b# t/# on# to d#t#r9in# t/# t#r9 o t/# 8a49#nt o t/# ind#bt#dn#ss' Artil# %%%0 o t/# old Ci;il Cod# stat#s t/at W/#n t/# 3lil9#nt o t/# ondition d#8#nds on t/# @ill o t/# d#btor< t/# onditional obligation s/all b# n3ll and ;oid''' Also Artil# %%.+ o t/# sa9# od# 8ro;id#s t/at i t/# obligation do#s not indiat# t/# t#r9< b3t its nat3r# and ir39stan#s < it is d#d3#d t/at it is int#nd#d to b# grant#d to t/# d#btor< t/# o3rt s/all d#t#r9in# t/# d3ration o t/at d#bt' In t/# 8r#s#nt as#< t/# 8ro9issor4 not# do#s not #8r#ss t/# 8#riod @it/in @/i/ t/# d#bt 93st b# 8aid'' It @as l#t to t/# disr#tion o t/# d#btor as to @/#n to 8a4 /is d#bt' In a88l4ing t/# Artil# %%.+ o t/# old i;il od#< it is t/# o3rt @/o s/all d#t#r9in# t/# 8#riod' As stat#d b4 t/# S38r#9# Co3rt< it is 3nair to l#a;# it at t/# #l3si;# disr#tion o t/# d#btor' T/#r#or#< t/# o3rt /as 3risdition o;#r t/# as# and t/at it s/all d#t#r9in# t/# 8#riod @/#n t/# d#btor 93st 8a4 or /is d#bt'
CENTRAL 7ILIINE /NI0ERSIT: %. CA &G'R' No' %%.%.6- .)7 SCRA 0%%- %6 23l4 %,,05
Kellosillo, J. )a=ts? In %,1,< "on Ra9on Lo8# donat#d a 8ar#l o land to t/# 8#tition#r @/#r# /# @as a 9#9b#r o its board o tr3st##s' T/# said land @as donat#d 3nd#r t/# ondition t/at t/# 8#tition#r s/all b3ild on t/at 8ar#l o land a 9#dial oll#g#< t/at it s/all b# all#d RA:ON LOPEJ CA:PUS< and t/at t/# land s/all not b# sold< trans#rr#d< on;#4#d nor in an4 @a4 #n39b#r#d' On 1% :a4 %,+,< t/# r#s8ond#nts< t/# /#irs o t/# lat# "on Ra9on Lo8#< il#d an ation or t/# ann3l9#nt o donation< r#on;#4an# and da9ag#s against 8#tition#r< as t/# latt#r /as not o98li#d @it/ t/# onditions o t/# donation ro9 t/# ti9# it @as ##3t#d' T/# 8#tition#r ans@#r#d t/at it /as not ;iolat#d an4 o t/# onditions o t/# donation' On 1% :a4 %,,%< t/# trial o3rt d#id#d in a;or o t/# r#s8ond#nts and d#lar#d t/# donation n3ll and ;oid'
Pag# $ %.0
Obligations and Contrats! "otrin#s and Cas# "ig#sts
P#tition#r a88#al#d to t/# Co3rt o A88#als' T/# a88#llat# o3rt o3nd t/at t/# donor did not i t/# 8#riod t/at t/# ondition 93st b# 3lill#d' Until a 8#riod /as not b##n i#d t/# 8#tition#rs annot b# onsid#r#d as in d#a3lt in t/# onditions o t/# donation' It r#9and#d t/# as# baD to t/# lo@#r o3rt to d#t#r9in# t/# 8#riod o t/# ondition' T/3s< t/# 8r#s#nt 8#tition or r#;i#@ on #rtiorari il#d b4 t/# 8#tition#r'
Issue? %' W/#t/#r or not t/# Co3rt o A88#als #rr#d in /olding t/at t/# annotations in t/# #rtiiat# o titl# o t/# 8#tition#r ar# on#ro3s obligation and r#sol3tor4 onditions o t/# donation @/i/ 93st b# 3lill#d and non(o98lian# t/#r#@it/ @o3ld r#nd#r t/# donation r#;oabl#' .' W/#t/#r or not t/# Co3rt o A88#als #rr#d in r#9anding t/# as# baD to t/# lo@#r o3rt to i t/# 8#riod @it/in @/i/ t/# 8#tition#r s/all o98l4 @it/ t/# ondition'
7el"? %' No< t/# Co3rt o A88#als did not o99it an #rror in /olding t/at t/# annotations in t/# #rtiiat# o titl# o t/# 8#tition#r ar# on#ro3s obligation and r#sol3tor4 onditions o t/# donation @/i/ 93st b# 3lill#d and non(o98lian# t/#r#@it/ @o3ld r#nd#r t/# donation r#;oabl#' W/#n a donation i98os#s a b3rd#n #3i;al#nt to t/# a9o3nt o t/# donation< t/# donation is on#ro3s' Und#r Artil# %%+% o t/# Ci;il Cod#< on onditional obligations< t/# a3isition o rig/ts< as @#ll as t/# #ting3is/9#nt or loss o t/os# alr#ad4 a3ir#d< s/all d#8#nd 38on t/# /a88#ning o t/# #;#nt @/i/ onstit3t#s t/# ondition' W/#n a 8#rson donat#s land to anot/#r on t/# ondition t/at t/# latt#r @o3ld b3ild 38on t/# land a s/ool< t/# ondition i98os#d @as not a ondition 8r##d#nt or a s3s8#nsi;# ondition b3t a r#sol3tor4 on#' I t/#r# @as no o98lian# @it/ t/# ondition< t/# donation 9a4 no@ b# r#;oD#d and all rig/ts @/i/ t/# don## 9a4 /a;# a3ir#d 3nd#r it s/all b# d##9#d lost and #ting3is/#d' In t/# 8r#s#nt as#< 38on t/# onditions sti83lat#d in t/# d##d o donation ##3t#d b4 "on Ra9on Lo8#< Sr'< t/# S38r#9# Co3rt @as gi;#n no alt#rnati;# b3t to onl3d# t/at /is donation @as on#ro3s' Also< it is l#ar t/at t/#r# @as no o98lian# in t/# 8art o t/# s/ool ro9 t/is ondition' R#ords ar# l#ar t/at sin# t/# ##3tion o t/# d##d o donation 38 to t/# ti9# o iling o t/# instant ation< @/i/ is abo3t it4 4#ars< 8#tition#r /as ail#d to o98l4 @it/ its obligation as don##' T/#r#or#< t/# inabilit4 o t/# 8#tition#r to o98l4 @it/ t/# donations ondition r#nd#rs t/# donation ;oid' Pag# $ %.7
Obligations and Contrats! "otrin#s and Cas# "ig#sts
.' Y#s< t/# Co3rt o A88#als o99itt#d an #rror in r#9anding t/# as# baD to t/# lo@#r o3rt or t/# d#t#r9ination o t/# 8#riod @it/in @/i/ t/# 8#tition#rs 9a4 o98l4 @it/ t/# ondition' T/# CA bas#d t/#ir d#ision on t/# g#n#ral r3l# 8ro;id#d in t/# Art' %%,6 o t/# Ci;il Cod# a88li#s< @/i/ 8ro;id#s t/at t/# o3rts 9a4 i t/# d3ration t/#r#o b#a3s# t/# 3lill9#nt o t/# obligation its#l annot b# d#9and#d 3ntil at#r t/# o3rt /as i#d t/# 8#riod or o98lian# t/#r#@it/ and s3/ 8#riod /as arri;#d' Aording to t/# S38r#9# Co3rt< /o@#;#r< t/# g#n#ral r3l# annot b# a88li#d in t/# 8r#s#nt as#' For t/# s8an o it4 0* 4#ars t/# 8#tition#r @as gi;#n a ti9# to o98l4 @it/ tg/# onditions o t/# donation' Ho@#;#r< t/# 8#tition#rs @#r# still 3nabl# to r#at# a 9#dial oll#g# in t/# 8ar#l o land donat#d b4 t/# lat# "on Ra9on Lo8#' As t/# SC stat#d! 5etitioner has slept on its o#ligation for an unreasona#le length of ti$e. ' T/3s it is onl4 air t/at t/# donation b# d##9#d in##ti;# and r#;oD#d in a;or o t/# /#r#in 8ri;at# r#s8ond#nts' T/#r#or#< t/# Co3rt o A88#als o99itt#d an #rror in r#9anding t/# as# baD to t/# lo@#r o3rt or t/# d#t#r9ination o t/# 8#riod @it/in @/i/ t/# 8#tition#rs 9a4 o98l4 @it/ t/# ondition'
iii.
E))ECTS O) CONDITION LA)ORTE;A %. #AC7/CA &G'R' No' %1600.- 111 SCRA 7)1- %7 23n# .***5
onaga(4eyes, J.: )a=ts? A :#9orand39 o Agr##9#nt Contrat to S#ll @as ##3t#d in a;or o t/# r#s8ond#nt b4 t/# 8#tition#rs' T/# 8ro8#rt4 s3b#t in t/# said :OA @as a /o3s# and lot o@n#d b4 t/# lat# Franiso Laort#a' It is sti83lat#d in t/# ontrat t/at t/# a9o3nt o P/81*<***'** s/all b# 8aid b4 t/# r#s8ond#nt as #arn#st 9on#4< and t/# balan# o P/87**<***'** s/all b# 8aid 38on t/# iss3an# o t/# titl# 3nd#r t/# na9# o t/# lat# Franiso Laort#a and 38on ##3tion o t/# #tra(3diial s#ttl#9#nt o t/# d##d#nts #stat# @it/ sal# in a;or o t/# r#s8ond#nt' It also stat#d t/at 38on iss3an# o t/# titl#< t/# r#s8ond#nt s/all b# notii#d b4 @riting and t/# r#s8ond#nt s/all /a;# 1* da4s to 8a4 t/# a9o3nt o P/87**<***'**'
Pag# $ %.6
Obligations and Contrats! "otrin#s and Cas# "ig#sts
On .* 2an3ar4 %,+,< t/# 8lainti 8aid t/# #arn#st 9on#4' And on %+ S#8t#9b#r %,+,< t/# 8#tition#rs @rot# a l#tt#r 3rnis/ing t/# r#onstit3t#d titl# to t/# s3b#t 8ro8#rt4 and 3rt/#r ad;ising /i9 t/at /# /as 1* da4s to 8rod3# t/# r#9aining P/87**<***'**' On %+ Otob#r %,+,< t/# r#s8ond#nt @rot# to t/# 8#tition#r asDing or an #t#nsion o 1* 9or# da4s 38 3ntil %00 No;#9b#r %,+, to b# abl# to 8rod3# t/at a9o3nt' Rob#rto Laort#a sign#d t/# onor9it4 to t/# r#3#st' Ho@#;#r< on %0 No;#9b#r %,+, r#s8ond#nt inor9#d t/# 8#tition#rs t/at /# an no@ 3rnis/ t/# P/87**<***'**' T/# 8#tition#rs r#3s#d to r##i;# t/# a9o3nt stating t/at t/# 8ro8#rt4 is no long#r or sal#' And on .* No;#9b#r %,+, 8#tition#rs inor9#d t/# r#s8ond#nt t/at t/#4 @#r# no@ an#lling t/# :#9orand39 o Agr##9#nt d3# to t/# r#s8ond#nts ail3r# to o98l4 @it/ t/# onditions o t/# ontrat' R#s8ond#nt il#d an ation or s8#ii 8#ror9an# b#or# t/# o3rt' W/i/ t/# lo@#r o3rt d#id#d in a;or o t/# r#s8ond#nt< ord#ring 8#tition#rs to a#8t t/# 8a49#nt t#nd#r#d b4 t/# r#s8ond#nt' P#tition#r a88#al#d to t/# Co3rt o A88#als< @/i/ onl4 air9#d t/# d#ision o t/# lo@#r o3rt' :otion or R#onsid#ration @as d#ni#d' T/3s t/# 8r#s#nt 8#tition or r#;i#@ on #rtiorari'
Issue? W/#t/#r or not t/# 8#tition#rs no long#r /ad an obligation to 8ro##d @it/ t/# sal# sin# t/# ondition o t/# iss3an# o t/# n#@ #rtiiat# o titl# and t/# ##3tion o an #tra3diial s#ttl#9#nt o /is #stat# @as not o98li#d @it/'
7el"? No< t/# 8#tition#rs still /as t/# obligation to 8ro##d @it/ t/# sal#' Fail3r# to o98l4 @it/ ondition i98os#d 38on t/# 8#r#tion o t/# ontrat r#s3lts in t/# ail3r# o a ontrat< @/il# t/# ail3r# to o98l4 @it/ ondition i98os#d on t/# 8#ror9an# o an obligation onl4 gi;#s t/# ot/#r 8art4 t/# o8tion #it/#r to r#3s# to 8ro##d @it/ t/# sal# or to @ai;# t/# ondition' Aording to Artil# %0)0< W/#r# t/# obligation o #it/#r 8art4 to a ontrat o sal# is s3b#t to an4 ondition @/i/ is not 8#ror9#d< s3/ 8art4 9a4 r#3s# to 8ro##d @it/ t/# ontrat or /# 9a4 @ai;# 8#ror9an# o t/# ondition' I t/# ot/#r 8art4 /as 8ro9is#d t/at t/# ondition s/o3ld /a88#n or b# 8#ror9#d< s3/ irst 9#ntion#d 8art4 9a4 also tr#at t/# non(8#ror9an# o t/# ondition as a br#a/ o @arrant4'''
Pag# $ %.+
Obligations and Contrats! "otrin#s and Cas# "ig#sts
In t/# 8r#s#nt as#< t/# :#9orand39 o Agr##9#nt is a 8#r#t#d ontrat' T/# ondition i98os#d @as onl4 or t/# 8#ror9an# o t/# obligations sti83lat#d in t/# said ontrat' In t/# #;#nt t/at t/# n#@ #rtiiat# o titl# @as r#l#as#d< and t/at t/# 8#tition#rs /as ad9itt#d t/at t/#4 no@ /a;# t/# abilit4 to ##3t# an #tra3diial s#ttl#9#nt on t/#ir at/#rs #stat#< t/# r#s8ond#nt no@ /as t/# rig/t to d#9and t/# 3lil9#nt o t/# d#li;#r4 o t/# o@n#rs/i8 o t/# /o3s# and lot' T/#r#or#< t/# 8#tition#rs ar# still obligat#d to s#ll t/# 8ro8#rt4 r#gardl#ss o t/# br#a/ in t/# ondition'
i%.
LOSS, DETERIORATION AND I#RO0E#ENT D/RING T7E ENDENC: O) T7E CONDITION * ART. &&49 %. E))ECTS 37EN RESOL/TOR: CONDITION IS )/L)ILLED * ART. &&96 =1 3IT7 A ERIOD * ARTS. &&9( TO &&46 i. @INDS O) ERIODTER# ii. E))ECTS O) ERIOD iii. LOSS, DETERIORATION AND I#RO0E#ENT BE)ORE ARRI0AL O) ERIOD i%. 37EN CO/RTS #A: )I ERIOD * ART. &&92 CALERO %. CARRION &G'R' No' L(%1.)7- %*6 P/il 0),- 1* :ar/ %,7*5
Karrera, J.: )a=ts? In %,16< "on Enri3# Carrion @as asD#d b4 Cal#ro to a3ir# a 8ro8#rt4 in Plaa Santa Cr3 @ort/ P/8.0*<***'**' @/#r# t/# Cal#ro @ill 8a4 P/8%0<***'** and Carrion @ill 8a4 P/8%*<***'** as do@n 8a49#nt' T/is "on Carrion a#8t#d' T/# 8ro8#rti#s @#r# 8la#d 3nd#r t/# na9# o "on Carrions da3g/t#rs< /#r#in r#s8ond#nt' T/is is @it/ t/# obligation to 8a4 Cal#ro .* o t/# 8roits @/#n t/# 8ro8#rt4 @as sold' Cal#ro 9ad# s#;#ral o#rs to t/# r#s8ond#nts to s#ll t/# 8ro8#rt4' B3t r#s8ond#nts r#3s#d to s#ll it' On .* "##9b#r %,07< 8#tition#r il#d a as# b#or# t/# o3rt to i t/# 8#riod @it/in @/i/ t/# r#s8ond#nts 9a4 3lil t/#ir obligation o gi;ing /i9 .* o t/# 8roit s/ar#s /# 9a4 g#t 38on t/# s#lling o t/# 8ro8#rt4' On *. F#br3ar4 %,07< r#s8ond#nts il#d a 9otion to dis9iss all#ging t/at t/# o98laint stat#d no a3s# o ation< and i t/#r# is< t/# iling o o98laint is barr#d b4 t/# stat3t# o li9itation' Pag# $ %.,
Obligations and Contrats! "otrin#s and Cas# "ig#sts
T/# as# @as dis9iss#d b4 t/# lo@#r o3rt' T/# 8#tition#r il#d a 9otion or r#onsid#ration @/i/ @as also d#ni#d b4 t/# o3rt' T/3s t/# 8r#s#nt dir#t a88#al to t/# S38r#9# Co3rt'
Issue? W/#t/#r or not t/# 8#tition#r 9a4 still asD t/# o3rt to d#t#r9in# t/# 8#riod @it/in @/i/ t/# r#s8ond#nts 9a4 8#ror9 t/#ir obligation o gi;ing t/# 8#tition#r t/# .* o t/# 8roit s/ar# @/#n t/# 8ro8#rt4 is sold'
7el"? No< t/# 8#tition#r 9a4 still asD t/# o3rt to d#t#r9in# t/# 8#riod @it/in @/i/ t/# r#s8ond#nts 9a4 8#ror9 t/#ir obligation' Aording to Artil# %%,6 I t/# obligation do#s not i a 8#riod< b3t ro9 its nat3r# and t/# ir39stan#s it an b# in#rr#d t/at a 8#riod @as int#nd#d< t/# o3rts 9a4 i t/# d3ration t/#r#o' T/# o3rts s/all also i t/# d3ration o t/# 8#riod @/#n it d#8#nds 38on t/# @ill o t/# d#btor' In #;#r4 as#< t/# o3rts s/all d#t#r9in# s3/ 8#riod as 9a4 3nd#r t/# ir39stan#s /a;# b##n 8robabl4 ont#98lat#d b4 t/# 8arti#s' On# i#d b4 t/# o3rts< t/# 8#riod annot b# /ang#d b4 t/#9' Etra3diial d#9and is not #ss#ntial or t/# r#ation o t/# a3s# o ation to /a;# t/# 8#riod i#d' It #ists b4 o8#ration o la@ ro9 t/# 9o9#nt s3/ an agr##9#nt s3b#t to an 3nd#t#r9in#d 8#riod is #nt#r#d into< @/#t/#r t/# 8#riod d#8#nds 38on t/# @ill o t/# d#btor alon#< or o t/# 8arti#s t/#9s#l;#s< or @/#r# ro9 t/# nat3r# and t/# ir39stan#s o t/# obligation it an b# in#rr#d t/at a 8#riod @as int#nd#d' In t/# 8r#s#nt as#< /o@#;#r< t/# agr##9#nt @as ##3t#d on :a4 .+< %,16 and t/# o98laint to /a;# t/# 8#riod i#d @as il#d on "##9b#r .%< %,07 or at#r al9ost .* 4#ars' T/#r#or#< it is 3ndis83t#d t/at t/# a3s# o ation o t/# 8#tition#r /as 8r#srib#d< /# an no long#r asD t/# o3rt or t/# 8#ror9an# o t/# obligation'
BORRO#EO %. CA &G'R' No' L(..,7.- )6 SCRA 70- .+ S#8t#9b#r %,6.5
ernando, J.: )a=ts? Pag# $ %1*
Obligations and Contrats! "otrin#s and Cas# "ig#sts
In %,11 t/# d##ndant @as a distrib3tor o l39b#r b#longing t a #rtain :r' :ill#r' T/# d##ndant 3s#d to borro@ ro9 t/# 8lainti 9on#4< b#ing t/# d##ndants ri#nd and old lass9at#' On on# oasion< d##ndant @as obligat#d to :r' :ill#r< /# borro@#d ro9 t/# d##ndant larg# a9o3nt o 9on#4 and /is /o3s# and lot @as 9ortgag#d' :r' :ill#r il#d a as# against d##ndant and atta/#d /is 8ro8#rti#s inl3ding t/os# 9ortgag#d to t/# 8lainti' Plainti 8r#ss#d t/# d##ndant o /is obligation< b3t t/# latt#r inst#ad ##3t#d a do39#nt 8ro9ising t/at /# @ill 8a4 /is obligation #;#n at#r t/# la8s# o %* 4#ars' Li3idation @as 9ad# and it @as o3nd t/at t/# d##ndant is ind#bt#d to t/# 8lainti in t/# a9o3nt o P/86<.**'**' "##ndant t/#n sign#d a 8ro9issor4 not# sti83lating an int#r#st o %. 8#r ann39 and t/at /# @ill 8a4 t/# 8lainti as soon as /# /a;# 9on#4' It 3rt/#r sti83lat#s t/at /# r#lin3is/#d< r#no3n#s r ot/#r@is# @ai;# /is rig/ts to t/# 8r#sri8tion #stablis/#d 3nd#r t/# Cod# o Ci;il Pro#d3r#' At#r t/at< t/# 8lainti li9it#d /i9s#l into ;#rball4 r#3#sting or t/# 9on#4 ro9 ti9# to ti9# and did not il# a i;il ation @it/in %* 4#ars onsid#ring t/at t/#r# @as no 8ro8#rt4 r#gist#r#d 3nd#r t/# na9# o t/# d##ndant' At#r t/# last @ar< s3bs#3#nt r#9ind#rs ro9 t/# 8lainti to t/# d##ndant @#r# 9ad#< b3t t/# latt#r ail#d to 8a4 t/# d#bt' T/# 8lainti t/#n il#d a as# b#or# t/# o3rt or t/# oll#tion o t/# a9o3nt o 9on#4' T/# o3rt o irst instan# o #b3 s#nt#n#d t/# d##ndant to 8a4 t/# a9o3nt o P/86<.**'** to t/# 8lainti @it/in ,* da4s< and a %. int#r#st 8#r ann39 s/o3ld t/# d##ndant still not abl# to 8a4 t/# d#bt at#r ,* da4s' U8on a88#al< t/# Co3rt o A88#als r#;#rs#d t/# said d#ision or laD o ;alidit4 o t/# sti83lation a9o3nting to t/# @ai;#r as a 8#rson annot r#no3n# 3t3r# 8r#sri8tion'
Issue? W/#t/#r or not t/# Co3rt o A88#als /as #rr#d in r#;#rsing t/# d#ision o t/# CFI in t/# gro3nds t/at it laDs ;alidit4'
7el"? Y#s< Co3rt o A88#als /as o99itt#d an #rror r#;#rsing t/# d#ision o t/# CFI in t/# gro3nds t/at it laDs ;alidit4' Aording to t/# Artil# %16*< It is a 3nda9#ntal 8rini8l# in t/# int#r8r#tation o ontrats t/at @/il# ordinaril4 t/# lit#ral s#ns# o t/# @ords #98lo4#d is to b# ollo@#d< s3/ is not t/# as# @/#r# t/#4 Qa88#ar to b# ontrar4 to t/# #;id#nt int#ntion o t/# ontrating 8arti#s
Obligations and Contrats! "otrin#s and Cas# "ig#sts
int#ntion s/all 8r#;ail' T/# r3l# is t/at a la@3l 8ro9is# 9ad# or a la@3l onsid#ration is not in;alid 9#r#l4 b#a3s# an 3nla@3l 8ro9is# @as 9ad# at t/# sa9# ti9# and or t/# sa9# onsid#ration< and t/is r3l# a88li#s< alt/o3g/ t/# in;alidit4 is d3# to ;iolation o a stat3tor4 8ro;ision< 3nl#ss t/# stat3t# #8r#ssl4 or b4 n##ssar4 i98liation d#lar#s t/# #ntir# ontrat ;oid' In t/# 8r#s#nt as#< t/# irst t#n 4#ars at#r No;#9b#r .,< %,11 s/o3ld not b# o3nt#d in d#t#r9ining @/#n t/# ation o r#ditor< no@ r#8r#s#nt#d b4 8#tition#rs< o3ld b# il#d' Fro9 t/# oint r#ord on a88#al< it is 3ndo3bt#d t/at t/# o98laint @as il#d on 2an3ar4 6< %,01' I t/# irst t#n(4#ar 8#riod @as to b# #l3d#d< t/# r#ditor /ad 3ntil No;#9b#r .,< %,01 to start 3diial 8ro##dings' At#r d#d3ting t/# irst t#n(4#ar 8#riod @/i/ #8ir#d on No;#9b#r .,< %,)1< t/#r# @as t/# additional 8#riod o still anot/#r t#n 4#ars'
GREGORIO ARANETA, INC. %. 7ILIINE S/GAR ESTATE DE0ELO#ENT CO. &G'R' No' ..00+- .* SCRA 11*- 1% :a4 %,765
4eyes, J.K.%., J.: )a=ts? On .+ 23l4 %,0*< Gr#gorio Aran#ta< In'< sold a 8ortion o t/# land to @it/ an ar#a o )1<*1) s' 9' or t/# s39 o P/8)1*<0%)'**' T/# 8arti#s sti83lat#d t/at t/# b34#r s/all b3ild on t/# sa9# land t/# Sto' "o9ingo C/3r/ and Con;#nt and t/# s#ll#r s/all r#at# str##ts aro3nd t/# /3r/ and on;#nt' T/# b34#r inis/#d onstr3ting t/# /3r/ and on;#nt' Ho@#;#r< t/# str##ts @#r# not inis/#d b#a3s# o t/# r#3sal to ;aat# o a #rtain :an3#l Ab3ndo< @/o 8/4siall4 o38i#s t/# 9iddl# 8art o t/# ar#a' On *6 :a4 %,0+ t/# r#s8ond#nt il#d its o98laint against 8#tition#r< s##Ding to o98#l t/# latt#r to o98l4 @it/ t/# obligation' T/# 8#tition#rs o3nt#r#d t/at t/# ation is 8r#9at3r# as t/#r# @as no d#init# 8#riod 8r#srib#d @it/in @/i/ t/# 8#tition#rs 93st o98l4 @it/ it' On 1% :a4 %,7*< t/# lo@#r o3rt d#id#d in a;or o t/# 8#tition#r' T/# r#s8ond#nt il#d a 9otion or r#onsid#ration and on %7 23l4 %,7*< t/# lo@#r o3rt grant#d t/# 9otion and i#d t/# 8#riod to t@o 4#ars' U8on a88#al< t/# a88#llat# o3rt air9#d t/# d#ision o t/# lo@#r o3rt and 9odii#d it to t/# t#r9 o t@o 4#ars starting ro9 t/# dat# o inalit4 o t/# d#ision' T/3s< t/# 8r#s#nt 8#tition or r#;i#@ on #rtiorari'
Pag# $ %1.
Obligations and Contrats! "otrin#s and Cas# "ig#sts
Issue? W/#t/#r or not t/# o3rt 9a4 i t/# 8#riod to 8#ror9 t/# obligation'
7el"? No< t/# o3rt 9a4 not i t/# 8#riod @it/in @/i/ t/# 8#tition#r 93st o98l4 @it/ t/# obligation sti83lat#d in t/# d##d o sal# o t/# land' Artil# %%,6 o t/# Ci;il Cod# is a88liabl# in as#s @/#r# t/# 8#riod is not sti83lat#d in t/# ontrat' :or#o;#r< t/is 8ro;ision l#arl4 stat#d t/at 8#riods annot b# s#t arbitraril4 and t/at t/# 8#riods to b# d#t#r9in#d b4 t/# o3rt s/all b# 8robabl# t/at t/# 8arti#s 93st /a;# ont#98lat#d s3/ 8#riod' For t/# o3rt to 8ro##d into d#t#r9ining t/# 8#riod @it/in @/i/ t/# obligation 93st b# o98li#d @it/< it 93st b# inl3d#d in t/# o98laint' In t/# 8r#s#nt as#< t/# d##d o sal# #8r#ssl4 stat#d t/at t/# ontrat @it/ r#s8ond#nt P/ili88in# S3gar Estat#s "#;#lo89#nt Co'< Ltd' ga;# 8#tition#r Gr#gorio Aran#ta< In' Qr#asonabl# ti9# @it/in @/i/ to o98l4 @it/ its obligation to onstr3t and o98l#t# t/# str##ts'Q T/# ontrat so 8ro;id#d t/at t/#r# @as a 8#riod i#d< a Qr#asonabl# ti9#-Q and all t/at t/# o3rt s/o3ld /a;# don# @as to d#t#r9in# i t/at r#asonabl# ti9# /ad alr#ad4 #la8s#d @/#n s3it @as il#d i it /ad 8ass#d< t/#n t/# o3rt s/o3ld d#lar# t/at 8#tition#r /ad br#a/#d t/# ontrat< as a;#rr#d in t/# o98laint< and i t/# r#s3lting da9ag#s' :or#o;#r< s/o3ld it b# said t/at t/#r# @as no i#d ti9# in t/# o98laint not /a;ing so3g/t t/at t/# Co3rt s/o3ld s#t a 8#riod< t/# o3rt o3ld not 8ro##d to do so 3nl#ss t/# o98laint in as irst a9#nd#d' And grant#d t/at t/is is @it/in t/# 8o@#r to b# d#t#r9in#d b4 t/# o3rt< t/# a9#nd#d d#ision is still 3nt#nabl# as no basis is stat#d to s388ort t/# onl3sion t/at t/# 8#riod s/o3ld b# s#t at t@o 4#ars at#r inalit4 o t/# 3dg9#nt' T/# trial Co3rt a88#ars to /a;# 83ll#d t/# t@o(4#ar 8#riod s#t in its d#ision o3t o t/in air< sin# no ir39stan#s ar# 9#ntion#d to s388ort it' T/#r#or#< t/# o3rt 9a4 not i t/# 8#riod @it/in @/i/ t/# 8#tition#r 93st o98l4 @it/ t/# obligation sti83lat#d in t/# d##d o sal# o t/# land and t/# ti9# or t/# 8#ror9an# o t/# obligations o 8#tition#r Gr#gorio Aran#ta< In' is /#r#b4 i#d at t/# dat# t/at all t/# s3att#rs on a#t#d ar#as ar# inall4 #;it#d t/#r#ro9'
C7A0ES %. GON;ALES &G'R' No' L(.6)0)- 1. SCRA 0)6- 1* A8ril %,6*5
4eyes, J.K.%., J.: )a=ts? On 23l4 %,71< t/# 8lainti d#li;#r#d a t48#@rit#r to t/# d##ndant< @/o is a t48#@rit#r r#8air#r< a 8ortabl# t48#@rit#r or ro3tin# l#aning and s#r;iing' T/# d##ndant @as not abl# to inis/ t/# Pag# $ %11
Obligations and Contrats! "otrin#s and Cas# "ig#sts
ob or so9# ti9# and onl4 ass3r#s t/# 8lainti' On Otob#r %,71< t/# d##ndant asD#d or t/# a9o3nt o P/87'** or t/# a9o3nt o t/# s8ar# 8art @/i/ t/# 8lainti 8ro;id#d' On .7 Otob#r %,71< t/# d##ndant got #as8#rat#d and t/#r#or# d#id#d to 3st taD# baD t/# t48#@rit#r' T/# d##ndant d#li;#r#d t/at t48#@rit#r in a @ra88#d 8aDag#' U8on /#Ding< t/# 8lainti diso;#r#d t/at t/# t48#@rit#r @as in s/a9bl#s' T/# 8lainti tooD t/# t48#@rit#r to Fr#ias B3sin#ss :a/in#s @/i/ ost /i9 P/8+,'+0' T/# 8lainti t/# il#d a o98laint d#9anding t/# 8a49#nt o P/8,*'** as at3al and o98#nsator4 da9ag#s< P/8%**'** or t#98#rat# da9ag#s< P/80**'** or 9oral da9ag#s< and P/80**'** as attorn#4s ##s' T/# trial o3rt /#ld t/at t/# d##ndant is onl4 liabl# to t/# a9o3nt o t/# 8arts @/i/ @as P/81%'%*'
Issue? W/#t/#r or not t/# 8#riod s/o3ld b# i#d b4 t/# o3rt'
7el"? No< t/# o3rt do#s not n##d to i t/# t#r9 @it/in @/i/ t/# obligation 93st b# o98li#d @it/' W/#r# t/# ti9# or o98lian# /ad #8ir#d and t/#r# @as br#a/ o ontrat b4 non( 8#ror9an#< it @as aad#9i or t/# 8lainti to /a;# irst 8#tition#d t/# o3rt to i a 8#riod or t/# 8#ror9an# o t/# ontrat b#or# iling /is o98laint' Ho@#;#r in t/# 8r#s#nt as#< t/#4 int#nd#d t/at t/# d##ndant @as to inis/ it at so9# 3t3r# ti9# alt/o3g/ s3/ ti9# @as not s8#ii#d and t/at s3/ ti9# /ad 8ass#d @it/o3t t/# @orD /a;ing b##n ao98lis/#d' t/# d##ndant ad9itt#d /i9s#l t/at /# r#t3rn#d t/# t48#@rit#r annibali#d and 3nr#8air#d< @/i/ is l#arl4 a br#a/ o /is obligation' "##ndant annot in;oD# Artil# %%,6 o t/# Ci;il Cod# or /# ;irt3all4 ad9itt#d non(8#ror9an# b4 r#t3rning t/# t48#@rit#r t/at /# @as oblig#d to r#8air in a non(@orDing ondition< @it/ #ss#ntial 8arts 9issing' T/# iing o a 8#riod @o3ld t/3s b# a 9#r# or9alit4 and @o3ld s#r;# no 83r8os# t/an to d#la4' T/#r#or#< t/# o3rt do#s not n##d to i t/# 8#riod @it/in @/i/ t/# obligation 93st b# o98li#d @it/'
RADIO3EALT7 )INANCE CO#AN: %s. DEL ROSARIO &G'R' No' %1+61,' 110 SCRA .++ 23l4 7< .***'5
5angani#an, J: )a=ts! Pag# $ %1)
Obligations and Contrats! "otrin#s and Cas# "ig#sts
On :ar/ .< %,,%< S8s Vi#nt# and :aria S39ilang d#l Rosario' r#s8ond#nts< ointl4 and s#;#rall4 ##3t#d< sign#d and d#li;#r#d in a;or o Radio@#alt/ Finan# Co98an4 /#r#in 8#tition#r< a Pro9issor4 Not# or s39 o P%1+<,)+'** to b# 8aid on install9#nt basis' T/#r#at#r< t/# r#s8ond#nt d#a3lt#d on 9ont/l4 install9#nts' On t/# o3rs# o trial t/# r#s8ond#nt /ad a 3diial ad9issions o #stablis/#d t/#ir ind#bt#dn#ss to t/# 8#tition#r< on t/# gro3nds t/at t/#4 ad9itt#d t/# d3# ##3tion o t/# Pro9issor4 Not#< and t/at t/#ir onl4 d##ns# @as t/# abs#n# o an agr##9#nt on @/#n t/# install9#nt 8a49#nts @#r# to b#gin'
Issue? W/#n t/# obligation b#a9# d3# and d#9andabl#
Rulin!? R#s8ond#nts t/#ori# t/at t/# ation or i99#diat# #nor#9#nt o t/#ir obligation is 8r#9at3r# b#a3s# its 3lill9#nt is d#8#nd#nt on t/# sol# @ill o t/# d#btor' H#n#< t/#4 onsid#r t/at t/# 8ro8#r o3rt s/o3ld irst i a 8#riod or 8a49#nt< 83rs3ant to Artil#s %%+* and %%,6 o t/# Ci;il Cod#' T/is ont#ntion is 3nt#nabl#' T/# at o l#a;ing blanD t/# d3# dat# o t/# irst install9#nt did not n##ssaril4 9#an t/at t/# d#btors @#r# allo@#d to 8a4 as and @/#n t/#4 o3ld' I t/is @as t/# int#ntion o t/# 8arti#s< t/#4 s/o3ld /a;# so indiat#d in t/# Pro9issor4 Not#' Ho@#;#r< it did not r#l#t an4 s3/ int#ntion' V#ril4< t/# ont#98oran#o3s and s3bs#3#nt ats o t/# 8arti#s 9ani#st t/#ir int#ntion and Dno@l#dg# t/at t/# 9ont/l4 install9#nts @o3ld b# d3# and d#9andabl# #a/ 9ont/' In t/is as#< t/# onl3sion t/at t/# install9#nts /ad alr#ad4 b#a9# d3# and d#9andabl# is bolst#r#d b4 t/# at t/at r#s8ond#nts start#d 8a4ing install9#nts on t/# Pro9issor4 Not#< #;#n i t/# /#Ds @#r# dis/onor#d b4 t/#ir dra@## banD' W# ar# on;in#d n#it/#r b4 t/#ir a;o@als t/at t/# obligation /ad not 4#t 9at3r#d nor b4 t/#ir lai9 t/at a 8#riod or 8a49#nt s/o3ld b# i#d b4 a o3rt'
B/CCAT %s. DISO &G'R' No' L())11+' A8ril %0< %,++'5
Sar$iento, J: )a=ts! F#b' %,01< B3at and "is8o #nt#r#d into a ontrat o l#as#< t/# #8iration dat# o @/i/ @as A3g3st 1%< %,76< "is8o onstr3t#d t/# National B3sin#ss Instit3t#< a s9all ;oational s/ool on t/# 8ar#l o land s3b#t o t/# l#as# agr##9#nt' In %,0+< nin# 4#ars b#or# t/# #8iration o t/# Pag# $ %10
Obligations and Contrats! "otrin#s and Cas# "ig#sts
ontrat< t/# 8arti#s #nt#r#d into anot/#r l#as# agr##9#nt o;#r t/# sa9# 8ar#l o land s3bstantiall4 9odi4ing t/# d3ration o t/# l#as# as s/o@n b4 t/# ollo@ing 8ro;ision< to @it! Par' 1! QT/at t/# l#as# ontrat s/all r#9ain in 3ll or# and ##t as long as t/# land @ill s#r;# t/# 83r8os# or @/i/ it is int#nd#d as a s/ool sit# o t/# National B3sin#ss Instit3t# b3t t/# r#ntals no@ sti83lat#d s/all b# s3b#t to r#;i#@ #;#r4 at#r t#n %* 4#ars b4 93t3al agr##9#nt o t/# 8arti#s'Q Eig/t 9ont/s at#r t/# s388os#d #8iration dat# o t/# irst ontrat< B3at il#d a o98laint or Unla@3l "#tain#r against t/# "is8o< t/# basis o @/i/ @as t/# #8iration ob3at t/# irst l#as# ontrat< as t/# s#ond agr##9#nt< aording to t/# 8lainti(a88#ll##< @as n3ll and ;oid or b#ing si93lat#d and or @ant o onsid#ration' T/# Co3rt o A88#als @as r#sol;#d in a;or o t/# ;alidit4 o t/# s#ond l#as# ontrat< b3t t/# 8ro;ision as to t/# d3ration o t/# ontrat @as int#r8r#t#d b4 t/# Co3rt o A88#als as on# t/at @as l#t to t/# @ill o "is8o so t/at t/# 8#riod o l#as# @as ind#init#'
Issue! W/#n t/# rig/t o ation or t/# iing o t/# 8#riod o l#as# ar3#dX
Rulin!! W# /old t/at it @as onl4 in No;#9b#r %,6. t/at t/# a3s# o ation or t/# iing o t/# 8#riod o l#as# ar3#d' T/is is as it s/o3ld b# b#a3s# 8rior to t/at< t/# ;alidit4 o t/# s#ond ontrat o l#as# @as b#ing /all#ng#d' T/# as# or 3nla@3l d#tain#r il#d b4 t/# 8lainti(a88#ll## b#a9# in at a as# 3#stioning t/# ;alidit4 o t/# s#ond ontrat on t/# gro3nds t/at t/# said ontrat @as si93lat#d and t/at t/#r# @as no onsid#ration' T/# 8lainti(a88#ll## o3ld not /a;# b##n #8#t#d to il# an ation or t/# iing o t/# 8#riod o t/# l#as# b#or# t/# Co3rt o A88#als 8ro93lgat#d its d#ision b#a3s# s/# @as not 4#t a@ar# t/at t/# said 8aragra8/ o t/# s#ond ontrat @as a 8ro;ision t/at all#d or an ind#init# 8#riod' For t/# r#ason t/at t/# ;#r4 #ist#n#< and s3bs#3#ntl4< t/# int#r8r#tation o t/# s#ond ontrat o l#as#< 8arti3larl4 8ar' 1 t/#r#o< @#r# 83t in iss3# in t/# 3nla@3l d#tain#r as#< t/# o3rt tr4ing t/# as# @as r#3ir#d to int#r8r#t t/# 8ro;isions o< and ons#3#ntl4< r3l# on t/# ;alidit4 o t/# said ontrat' T/is @as 8r#is#l4 @/at t/# trial o3rtKs d#ision @/i/ @as air9#d b4 t/# Co3rt o A88#als< in at< r#sol;#d' And in onor9it4 @it/ t/# s3gg#stion o t/# said o3rt< t/# 8lainti(a88#ll## il#d t/# 8r#s#nt as#' T/# r#9#d4 or t/# a3s# o ation or t/# iling o a as# or t/# iing o a 8#riod in t/# ontrat< t/#r#or#< onl4 ar3#d @/#n t/# o3rt inall4 d#lar#d t/# s#ond ontrat ;alid b3t t/at t/# 8ro;ision as to t/# 8#riod @as ind#init# and /#n#< an ation or t/# iing o t/# 8#riod o t/# ontrat /ad to b# il#d' F3rt/#r9or#< s/o3ld t/# 8lainti(a88#ll## /a;# o8t#d to il# a as# or t/# iing o t/# 8#riod o t/# l#as# ontrat b#or# t/# t#r9ination o t/# 3nla@3l d#tain#r as#< t/# latt#r as# @o3ld /a;# b##n r#nd#r#d 9oot and aad#9i and t/# 8lainti( a88#ll## @o3ld /a;# in#;itabl4 and 3n@ittingl4 ratii#d t/# s#ond ontrat' No 8#rson in /is rig/t 9ind @o3ld /a;# don# s3/' Pag# $ %17
Obligations and Contrats! "otrin#s and Cas# "ig#sts
%.
LOSS O) T7E BENE)IT O) ERIOD * ART. &&94 DAG/7O: ENTERRISES, INC. %s. ONCE &G'R' No' L(70%0' Otob#r %+< %,0)'5
2onte$ayor, J: )a=ts? On 23n# .)t/< Rita L' Pon#< @i# o "o9ingo< ##3t#d in a;or o 8lainti or8oration a d##d o 9ortgag# o;#r a 8ar#l o land inl3ding t/# i98ro;#9#nts t/#r#on< sit3at#d in :anila< to s#3r# t/# 8a49#nt o a loan o P0<*** grant#d to /#r b4 said or8oration< 8a4abl# @it/in si 4#ars @it/ int#r#st at %. 8#r #nt 8#r ann39' On :ar/ %*< %,0%< Rita L' Pon# @it/ t/# ons#nt o /#r /3sband "o9ingo ##3t#d anot/#r 9ortgag# d##d a9#nding t/# irst on#< @/#r#b4 t/# loan @as inr#as#d ro9 P0<*** to P7<%,*< t/# t#r9s and onditions o t/# 9ortgag# r#9aining t/# sa9#' Rita and "o9ingo 8r#s#nt#d t/# t@o 9ortgag# d##ds or r#gistration in t/# oi# o t/# r#gist#r o d##ds< b3t t/# said r#gist#r at#r going o;#r t/# 8a8#rs not#d d##ts and d#ii#ni#s and ad;is#d Rita and "o9ingo to 3r# t/# d##ts and 3rnis/ t/# n##ssar4 data Inst#ad o o98l4ing @it/ t/# s3gg#stion and r#3ir#9#nts< t/# t@o @it/dr#@ t/# t@o 9ortgag# d##ds and t/#n 9ortgag#d t/# sa9# 8ar#l o land in a;or o t/# R#/abilitation Finan# Cor8oration RFC to s#3r# a loan' Pot#niano Ga8ol @as t/# 9aorit4 stoD/old#r in t/# "ag3/o4 Ent#r8ris#s< In' and nat3rall4 @as int#r#st#d in t/# s#3rit4 o t/# 8a49#nt o t/# loan aor#said' U8on l#arning t/at t/# d##ds o 9ortgag# @#r# not r#gist#r#d and @/at is 9or#< t/at t/#4 @#r# @it/dra@n ro9 t/# oi# o t/# r#gist#r o d##ds and t/# land o;#r#d b4 t/# t@o d##ds @as again 9ortgag#d to t/# RFC< /# il#d Ci;il Cas# No' %1601 #ntitl#d QPot#niano Ga8ol< or and on b#/al o "ag3/o4 Ent#r8ris#s< In' ;s' "o9ingo Pon# and B3/a4 :' Pon#Q
Issue! W/#t/#r or not t/# loan b#a9# d3# and d#9andabl#X
Rulin!s? Alt/o3g/ t/# original loan< inl3ding its inr#as#d a9o3nt< @as 8a4abl# @it/in si 4#ars< and so did not b#o9# d3# and 8a4abl# 3ntil t/# #8iration t/#r#o< t/# d#btor lost t/# b#n#it o t/# 8#riod b4 r#ason o /#r ail3r# to gi;# and r#gist#r t/# s#3rit4 agr##d 38on in t/# or9 o t/# t@o d##ds o 9ortgag#- and so t/# obligation b#a9# 83r# and @it/o3t an4 ondition' Cons#3#ntl4< t/# loan b#a9# d3# and i99#diat#l4 d#9andabl#'
"1 ALTERNATI0E AND )AC/LTATI0E * ARTS. &&99 TO &-6 e1 JOINT AND SOLIDAR: * ARTS. &-62 TO &--7ILIINE NATIONAL BAN@, %s. AS/NCION Pag# $ %16
Obligations and Contrats! "otrin#s and Cas# "ig#sts
&G'R' No' L()7*,0' No;#9b#r .1< %,66'5
2a*asiar, J: )a=ts? PNB on 2an3ar4 %7< %,71< grant#d in a;or o r#s8ond#nt Fabar In';ario3s r#dit ao99odations and ad;an#s in t/# or9 o a diso3nting lin#< o;#rdrat lin#< t#98orar4 o;#rdrat lin# and l#tt#rs o r#dit o;#ring t/# i98ortation o 9a/in#r4 and #3i89#nt' P#tition#r liD#@is# 9ad# ad;an#s b4 @a4 o ins3ran# 8r#9i39s o;#ring t/# /att#ls s3b#t 9att#r o a 9ortgag# s#3ring t/# aor#9#ntion#d r#dit ao99odations' Said r#dit ao99odations /ad an o3tstanding balan# o P+<)),<%7,',+ as o :a4 %1< %,66' For ail3r# o 8ri;at# r#s8ond#nts to 8a4 t/#ir obligations not@it/standing r#8#at#d d#9ands< 8#tition#r instit3t#d a as# or oll#tion against all 8ri;at# r#s8ond#nts'
Issue? W/#t/#r t/# r#s8ond#nt Co3rt #rr#d in dis9issing t/# as# against all t/# d##ndants< inst#ad o dis9issing t/# as# onl4 as against t/# d##as#d d##ndantX
Rulin!? P#tition#rKs ont#ntion is @#ll taD#n' R#s8ond#nt Co3rtKs r#lian# on S#tion 7< R3l# +7 o t/# R#;is#d R3l#s o Co3rt @as #rron#o3s' Artil# %.%7 o t/# N#@ Ci;il Cod# gi;#s t/# r#ditor t/# rig/t to Q8ro##d against an4on# o t/# solidar4 d#btors or so9# or all o t/#9 si93ltan#o3sl4'Q T/# /oi# is 3ndo3bt#dl4 l#t to t/# solidar4 r#ditor to d#t#r9in# against @/o9 /# @ill #nor# oll#tion' In as# o t/# d#at/ o on# o t/# solidar4 d#btors< /# t/# r#ditor 9a4< i /# so /oos#s< 8ro##d against t/# s3r;i;ing solidar4 d#btors @it/o3t n##ssit4 o iling a lai9 in t/# #stat# o t/# d##as#d d#btors' It is not 9andator4 or /i9 to /a;# t/# as# dis9iss#d as against t/# s3r;i;ing d#btors and il# its lai9 against t/# #stat# o t/# d##as#d solidar4 d#btor< as @as 9ad# a88ar#nt in t/# aor#3ot#d d#ision' For to r#3ir# t/# r#ditor to 8ro##d against t/# #stat#< 9aDing it a ondition 8r##d#nt or an4 oll#tion ation against t/# s3r;i;ing d#btors to 8ros8#r< @o3ld d#8ri;# /i9 o /is s3bstanti;# rig/ts 8ro;id#d b4 Artil# %.%7 o t/# N#@ Ci;il Cod#'
INC7A/STI CO. %s. :/LO, &G'R' No' 66.%' :ar/ .0< %,%)'5
Arrellano. J: )a=ts! T/is s3it is bro3g/t or t/# r#o;#r4 o a #rtain s39 o 9on#4< t/# balan# o a 3rr#nt ao3nt o8#n#d b4 t/# ir9 o In/a3sti Co98an4 @it/ T#odoro Y3lo and at#r /is d#at/ ontin3#d Pag# $ %1+
Obligations and Contrats! "otrin#s and Cas# "ig#sts
@it/ /is @ido@ and /ildr#n< @/os# 8rini8al r#8r#s#ntati;# is Gr#gorio Y3lo' T#odoro Y3lo< a 8ro8#rt4 o@n#r o Iloilo< or t/# #8loitation and3lti;ation o /is n39#ro3s /ai#ndas in t/# 8ro;in# o Oid#ntal N#gros< /ad b##n borro@ing 9on#4 ro9 t/# In/a3sti Co98an4 3nd#r s8#ii onditions' On A8ril ,< %,*1< T#odoro Y3lo di#d t#stat# and or t/# ##3tion o t/# 8ro;isions o /is @ill /# /ad a88oint#d as ad9inistrators /is @ido@ and 0 o /is sons< Gr#gorio Y3lo b#ing on# o t/# latt#r' H# t/3s l#t a @ido@< Gr#goria R#galado< @/o di#d on Otob#r ..d o t/# ollo@ing 4#ar< %,*)< t/#r# r#9aining o t/# 9arriag# t/# ollo@ing l#giti9at# /ildr#n! P#dro< Franiso< T#odoro< :an3#l< Gr#gorio< :ariano< Car9#n< Con#8tion< and 2os# Y3lo 4 R#galado' O t/#s# /ildr#n Con#8tion and 2os# @#r# 9inors< @/il# T#odoro @as 9#ntall4 ino98#t#nt' At t/# d#at/ o t/#ir 8r#d##ssor in int#r#st< T#odoro Y3lo< /is @ido@ and /ildr#n /#ld t/# on3gal 8ro8#rt4 in o99on and at t/# d#at/ o t/is said @ido@< Gr#goria R#galado< t/#s# /ildr#n 8r#s#r;#d t/# sa9# r#lations 3nd#r t/# na9# o Hios d# T' Y3lo ontin3ing t/#ir 3rr#nt ao3nt @it/ In/a3sti Co98an4 in t/# b#st and 9ost /ar9onio3s r#i8roit4 3ntil said balan# a9o3nt#d to t@o /3ndr#d t/o3sand 8#sos' In t/is stat# o aairs t/# r#ditor ir9 tri#d to obtain s#3rit4 or t/# 8a49#nt o t/# disb3rs#9#nts o 9on#4 @/i/ 3ntil t/at ti9# it /ad b##n 9aDing in a;or o its d#btors< t/# Y3los'
Issue! W/#t/#r t/# 8lainti an s3# Gr#gorio Y3lo alon#< t/#r# b#ing ot/#r ObligorsX
Rulin!! W/#n t/# obligation is a solidar4 on#< t/# r#ditor 9a4 bring /is ation in toto against an4 o t/# d#btors obligat#d in solid39 and alt/o3g/ t/# r#ditor 9a4 /a;#< b4 9#ans o a s3bs#3#nt instr39#nt< o;#nant#d @it/ so9# o t/# solidar4 d#btors di#r#nt 8#riods o 8a49#nt and di#r#nt onditions< not on t/is ao3nt 9a4 it b# 3nd#rstood t/at t/# solidarit4 sti83lat#d in t/# 8r#;io3s instr39#nt /as b##n broD#n'
1 DI0ISIBLE AND INDI0ISIBLE * ARTS. &--( TO &--+ !1 3IT7 A ENAL CLA/SE * ARTS. &-- TO &-(6 #A@ATI DE0ELO#ENT CORORATION %s. E#IRE INS/RANCE CO &G'R' No' L(.%6+*' 23n# 1*< %,76'5
)a=ts? On :ar/ 1%< %,0,< t/# :aDati "#;#lo89#nt Cor8oration sold to Rodolo P' Andal a lot< @it/ an ar#a o %<0+, s3ar# 9#t#rs< in t/# Urdan#ta Villag#< :aDati< Rial< or P00<7%0' A so(all#d Qs8#ial onditionQ ontain#d in t/# d##d o sal# 8ro;id#s t/at Q&T5/# VEN"EES s/all o99#n# t/# onstr3tion and o98l#t# at l#ast 0* o /is/#rt/#ir its r#sid#n# on t/# Pag# $ %1,
Obligations and Contrats! "otrin#s and Cas# "ig#sts
8ro8#rt4 @it/in t@o . 4#ars ro9 :ar/ 1%< %,0, to t/# satisation o t/# VEN"OR and< in t/# #;#nt o /is/#rt/#irits ail3r# to do so< t/# bond @/i/ t/# VEN"EES /as d#li;#r#d to t/# VEN"OR in t/# s39 o P%%<%.1'** and #;id#n#d b4 a as/ bond r##i8t dat#d A8ril %*< %,0, @ill b# or#it#d in a;or o t/# VEN"OR b4 t/# 9#r# at o ail3r# o t/# VEN"EES to o98l4 @it/ t/is s8#ial ondition'Q To ins3r# ait/3l o98lian# @it/ t/is Qondition
Issue? W/#t/#r t/# s8#ial ondition i98os#d on t/# ontrat is bindingX
Rulin!? W/#r# a ontrat o sal# o r#al 8ro8#rt4 i98os#s a Qs8#ial onditionQ 38on t/# ;#nd## to onstr3t a /o3s# t/#r#on and o98l#t# at l#ast 0* o s3/ onstr3tion @it/in t@o 4#ars ot/#r@is# t/# s3r#t4 bond o P%.<***'** @o3ld b# or#it#d in a;or o t/# ;#ndor< s3/ Qs8#ial onditionQ is in r#alit4 an obligation @it/ a 8#nal la3s#< and t/# obligorKs liabilit4 9a4 b# 9itigat#d 83rs3ant to Artil# %.., o t/# Ci;il Cod#< onsid#ring t/at s3/ 8#nalt4 is int#nd#d not to ind#9ni4 t/# ;#ndor or an4 da9ag# it 9ig/t s3#r as a r#s3lt o a br#a/ o ontrat< b3t rat/#r to o98#l 8#ror9an# and t/3s #no3rag# /o9# b3ilding a9ong lot o@n#rs in t/# Urdan#ta Villag#'
CO##ERCIAL CREDIT CORORATION O) CAGA:AN DE ORO %s. CO/RT O) AEALS &G'R' No' 6+1%0' 2an3ar4 .< %,+,'5
angayco,J: )a=ts! So9#ti9# in %,6+ 8ri;at# r#s8ond#nt Caga4an "# Oro Colis#39< In' ##3t#d a 8ro9issor4 not# in t/# a9o3nt o P1.,<+0.'0) in a;or o 8#tition#r Co99#rial Cr#dit Cor8oration o Pag# $ %)*
Obligations and Contrats! "otrin#s and Cas# "ig#sts
Caga4an d# Oro< 8a4abl# in 17 9ont/l4 install9#nts' T/# not# is s#3r#d b4 a r#al #stat# 9ortgag# d3l4 ##3t#d b4 8ri;at# r#s8ond#nt in a;or o 8#tition#r' As said r#s8ond#nt d#a3lt#d in t/# 8a49#nt o t/# 9ont/l4 install9#nts d3#< 8#tition#r 8ro##d#d @it/ t/# #tra3diial or#los3r# o t/# r#al #stat# 9ortgag# in S#8t#9b#r< %,6,' In d3# o3rs# a o98ro9is# agr##9#nt @as #nt#r#d into b4 t/# 8arti#s on t/# basis o @/i/ a o98ro9is# 3dg9#nt @as r#nd#r#d b4 t/# trial o3rt on :ar/ %%< %,+*' Ho@#;#r as 8ri;at# r#s8ond#nt ail#d to o98l4 @it/ t/# t#r9s o t/# 3dg9#nt or ail3r# to 8a4 s#;#ral install9#nts in t/# a9o3nt o P6*<%0.'70 @/i/ 9at3r#d on 23l4 %1< %,+.< 8#tition#r il#d an #(8art# 9otion or t/# iss3an# o a @rit o ##3tion on :ar/ )< %,+1'
Issue! W/#t/#r t/# /onorabl# o3rt o a88#als o99itt#d gra;# and r#;#rsibl# #rror @/#n it 9odii#d t/# ##ts o t/# 1 8#nalt4 int#r#st and attorn#4Ks ##s< at#r it 38/#ld t/# l#galit4 o t/# o98ro9is# 3dg9#nt o t/# trial o3rtX
Rulin!! Artil# %.., o t/# Ci;il Cod# a88li#s onl4 to obligations or ontrat< s3b#t o a litigation< t/# ondition b#ing t/at t/# sa9# /as b##n 8artl4 or irr#g3larl4 o98li#d @it/ b4 t/# d#btor' T/# 8ro;ision also a88li#s #;#n i t/#r# /as b##n no 8#ror9an#< as long as t/# 8#nalt4 is ini3it3o3s or 3nonsionabl#' It annot a88l4 to a inal and ##3tor4 3dg9#nt' W/#n t/# 8arti#s #nt#r#d into t/# said o98ro9is# agr##9#nt and s3b9itt#d t/# sa9# or t/# a88ro;al o t/# trial o3rt< its t#r9s and onditions 93st b# t/# 8ri9ordial onsid#ration @/4 t/# 8arti#s ;ol3ntaril4 #nt#r#d into t/# sa9#' T/# trial o3rt a88ro;#d it b#a3s# it is la@3l< and is not against 83bli 8oli4 or 9orals' E;#n t/# r#s8ond#nt Co3rt o A88#als 38/#ld t/# ;alidit4 o t/# said o98ro9is# agr##9#nt' H#n#< t/# r#s8ond#nt o3rt /as no a3t/orit4 to r#d3# t/# 8#nalt4 and attorn#4Ks ##s t/#r#in sti83lat#d @/i/ is t/# la@ b#t@##n t/# 8arti#s and is r#s 3diata'
RADIO3EALT7 )INANCE CO#AN: %. DEL ROSARIO &G'R' No' %1+61,' 110 SCRA .++ 23l4 7< .***'5
5angani#an, J: )a=ts! On :ar/ .< %,,%< S8s Vi#nt# and :aria S39ilang d#l Rosario' r#s8ond#nts< ointl4 and s#;#rall4 ##3t#d< sign#d and d#li;#r#d in a;or o Radio@#alt/ Finan# Co98an4 /#r#in 8#tition#r< a Pro9issor4 Not# or s39 o P%1+<,)+'** to b# 8aid on install9#nt basis' T/#r#at#r< t/# r#s8ond#nt d#a3lt#d on 9ont/l4 install9#nts'
Pag# $ %)%
Obligations and Contrats! "otrin#s and Cas# "ig#sts
On t/# o3rs# o trial t/# r#s8ond#nt /ad a 3diial ad9issions o #stablis/#d t/#ir ind#bt#dn#ss to t/# 8#tition#r< on t/# gro3nds t/at t/#4 ad9itt#d t/# d3# ##3tion o t/# Pro9issor4 Not#< and t/at t/#ir onl4 d##ns# @as t/# abs#n# o an agr##9#nt on @/#n t/# install9#nt 8a49#nts @#r# to b#gin'
Issue! W/#t/#r or not t/# d#btor s/all 8a4 8#nalt4X
Rulin!! P#tition#r< in its Co98laint< 8ra4#d or Q%) int#r#st 8#r ann39 ro9 :a4 7< %,,1 3ntil 3ll4 8aid'Q W# disagr##' T/# Not# alr#ad4 sti83lat#d a lat# 8a49#nt 8#nalt4 o .'0 8#r#nt 9ont/l4 to b# add#d to #a/ 3n8aid install9#nt 3ntil 3ll4 8aid' Pa49#nt o int#r#st @as not #8r#ssl4 sti83lat#d in t/# Not#' T/3s< it s/o3ld b# d##9#d inl3d#d in s3/ 8#nalt4'
4. ETING/IS7#ENT O) OBLIGATIONS A. #ODES * ART. &-(& TEJ/CO %s . E. R. S/IBB SON &G'R' No' L(%%*0.' A8ril 1*< %,0+'5
5A4AS, J: )ACTS! A i;il o98laint @as il#d in t/# Co3rt o First Instan# o :anila b4 t/#a88#llant< all#ging t/at t/# a88#ll##s< /#r or9#r #98lo4#rs @rot# /#r a lib#lo3s l#tt#r o s#8aration< a o84 o @/i/ @as 8ost#d in t/# o98an4Ks b3ll#tin board' As t/# a88#llant ad9its t/at t/# o98laint @as il#d on# 4#ar and si 9ont/s at#r t/# 83bliation o t/# lib#lo3s l#tt#r on Otob#r %+< %,0)'
Pag# $ %).
Obligations and Contrats! "otrin#s and Cas# "ig#sts
ISS/E! W/#t/#r or not t/# obligation arising ro9 t/# ri9# o lib#l alr#ad4 #ting3is/#dX
R/LING! Con#rning #ting3is/9#nt o obligations arising ro9 #loni#s< Artil# %%. o t/# R#;is#d P#nal Cod# 8ro;id#s t/at Qi;il liabilit4 #stablis/#d in Artil#s %**< %*%< %*. an d %*1 o t/is Cod# s/all b# #ting3is/#d in t/# sa9# 9ann#r as ot/#r obligations in aordan# @it/ t/# 8ro;isions o t/# Ci;il La@'Q U8on t/# ot/#r /and< Artil# %.1% o t/# Ci;il Cod# is to t/# ##t t/at Q' ' ' ot/#r a3s#s o #ting3is/9#nt o obligations< s3/ as ann3l9#nt< r#sission< 3lill9#nt o a r#sol3tor4 ondition< and 8r#sri8tion< ar# go;#rn#d #ls#@/#r# in t/is Cod#'Q On t/# 9att#r o 8r#sri8tion< t/# a88liabl# 8ro;ision is Artil# %%., o t/# Ci;il Cod# @/i/ stat#s t/at Qations 8r#srib# b4 9#r# la8s# o ti9# i#d b4 la@'Q T/is n##ssaril4 l#ads 3s to Artil# %%)6 o t/# Ci;il Cod# @/i/ r#3ir#s t/at an ation or d#a9ation 93st b# il#d @it/in on# 4#ar' T/# broad t#r9 Qd#a9ationQ in t/# abs#n# o an4 ot/#r s8#ii 8ro;isions< inl3d#s lib#l'
SA/RA I#ORT EORT CO., INC. %s. DE0ELO#ENT BAN@ O) T7E 7ILIINES &G'R' No' L(.),7+' A8ril .6< %,6.'5
2ARA%)>TA%, J: )ACTS? In 23l4 %,01 Sa3ra< In' a88li#d to t/# R#/abilitation Finan# Cor8oration RFC< b#or# its on;#rsion into "BP< or an ind3strial loan o P0**<***'**< to b# 3s#d as ollo@s! P.0*<***'** or t/# onstr3tion o a ator4 b3ilding- P.)*<,**'** to 8a4 t/# balan# o t/# 83r/as# 8ri# o t/# 3t# 9ill 9a/in#r4 and #3i89#nt- and P,<%**'** as additional @orDing a8ital' Par#nt/#tiall4< it 9a4 b# 9#ntion#d t/at t/# 3t# 9ill 9a/in#r4 /ad alr#ad4 b##n 83r/as#d b4 Sa3ra on t/# str#ngt/ o a l#tt#r o r#dit #t#nd#d b4 t/# Pr3d#ntial BanD and Tr3st Co'< and arri;#d in "a;ao Cit4 in 23l4 %,01- and t/at to s#3r# its r#l#as# @it/o3t irst 8a4ing t/# drat< Sa3ra< In' ##3t#d a tr3st r##i8t in a;or o t/# said banD' On 2an3ar4 6< %,0) RFC 8ass#d R#sol3tion No' %)0 a88ro;ing t/# loan a88liation or P0**<***'**< to b# s#3r#d b4 a irst 9ortgag# on t/# ator4 b3ildings to b# onstr3t#d< t/# land sit# t/#r#o< and t/# 9a/in#r4 and #3i89#nt to b# install#d' Sa3ra< In' @rot# a l#tt#r to RFC< r#3#sting a 9odiiation o t/# t#r9s laid do@n b4 it< na9#l4! t/at in li#3 o /a;ing C/ina Engin##rs< Ltd' sign as o(9aD#r on t/# orr#s8onding 8ro9issor4 not#s< Sa3ra< In' @o3ld 83t 38 a bond or P%.1<0**'**< an a9o3nt #3i;al#nt to s3/ s3bsri8tion- and t/at :aria S' Roa @o3ld b# s3bstit3t#d or Ino#nia Ar#llano as on# o t/# ot/#r o(9aD#rs< /a;ing a3ir#d t/# latt#rKs s/ar#s in Sa3ra< In'
Pag# $ %)1
Obligations and Contrats! "otrin#s and Cas# "ig#sts
In ;i#@ o s3/ r#3#st RFC a88ro;#d R#sol3tion No' 617
ISS/E! W/#t/#r t/#r# is an #ting3is/9#nt o obligation in t/# as# at barX
R/LING! W/#n RFC t3rn#d do@n t/# r#3#st o Sa3ra In'< t/# n#gotiations @/i/ /ad b##n going on or t/# i98l#9#ntation o t/# agr##9#nt r#a/#d an i98ass#' Sa3ra In'< ob;io3sl4 @as in no 8osition to o98l4 @it/ RFCKs onditions' So inst#ad o doing so and insisting t/at t/# loan b# r#l#as#d as agr##d 38on< Sa3ra In'< asD#d t/at t/# 9ortgag# b# an#ll#d< @/i/ @as don# on 23n# %0< %,00' T/# ation t/3s taD#n b4 bot/ 8arti#s @as in t/# nat3r# o 93t3al d#sistan# ? @/at :anr#sa t#r9s Q93t3o dis#nsoQ ? @/i/ is a 9od# o #ting3is/ing obligations' It is a on#8t t/at d#ri;#s ro9 t/# 8rini8l# t/at sin# 93t3al agr##9#nt b4 t/# 8arti#s an r#at# a ontrat< 93t3al disagr##9#nt b4 t/# 8arti#s an a3s# its #ting3is/9#nt'
B. A:#ENT OR ER)OR#ANCE * ART. &-(I. C7ARACTERISTICS &. INTEGRIT: O) A:#ENT * ART. &-(( A. ECETIONS * ARTS. &-(5 AND &-(+ -. IDENTIT: O) A:#ENT * ART. &-55 A. ECETION * ART. &-5+ (. INDI0ISIBILIT: O) A:#ENT * ART. &-54 A. ECETION * ART. &-5+ II. 37O CAN #A@E A:#ENT * ARTS. &-( TO &-(9
GON;AGA %s. GARCIA &G'R' No' +.0)' :ar/ 1< %,%)'5
T4I>T,J: )ACTS? R3ino Franiso a3ir#d t/# land in 3#stion b4 in/#ritan# ro9 t/# r#gist#r#d o@n#r' On A3g3st .*< %,*,< /# sold it @it/ t/# rig/t to r#83r/as# t/# sa9# @it/in on# 4#ar and @it/ t/# 3nd#rstanding t/at t/# ti9# o3ld b# #t#nd#d on# 4#ar 9or#< to Vi#nt# San :artin' On A3g3st 1*< %,*,< FranisoKs rig/t to r#83r/as# @as atta/#d b4 on# "#l Rosario' T/is rig/t o r#83r/as# @as sold 3nd#r ##3tion on "##9b#r .,< %,*,< at a s/#riKs sal#< "#l Rosario b#ing t/# 83r/as#r' T/# #rtiiat# o sal# @as r#gist#r#d 2an3ar4 7< %,%*< and Franiso /a;ing ail#d to ##ris# /is rig/t o r#d#98tion @it/in on# 4#ar< t/# s/#ri iss3#d /is d##d to "#l Rosario or t/# int#r#st o Franiso in t/# land t/3s sold at t/# ##3tion sal#' On No;#9b#r ,< %,*+< Franiso sold t/# sa9# land to 2os# d# La;#ngo' T/# do39#nt #;id#ning t/is sal# @as n#;#r r#gist#r#d' T/# o88on#nts ar# t/# @ido@ and 9inor /ildr#n o 2os# d# La;#ngo' N#it/#r 2os# Pag# $ %))
Obligations and Contrats! "otrin#s and Cas# "ig#sts
nor t/# o88on#nts #;#r #nt#r#d into t/# 8oss#ssion o t/# 8ro8#rt4' T/# a88#llants Dn#@ not/ing o t/# sal# b4 R3ino Franiso to 2os# d# Lan;#ngo'
ISS/E! "id t/# a88#llants a3ir# a r#gist#rabl# titl#X
R/LING! T/# rig/t to r#83r/as# r#al #stat# sold 3nd#r 8ato d# r#tro is s3b#t to ##3tion and 9a4 b# sold at 83bli a3tion to satis4 a 3dg9#nt against t/# o@n#r o s3/ a rig/t' B4 ;irt3# o t/# s/#riKs sal# o "##9b#r .,< %,*,< "#l Rosario a3ir#d t/# rig/t to r#83r/as# t/# land in 3#stion ro9 :artin' In No;#9b#r or "##9b#r< %,%%< "#l Rosario sold all o /is int#r#st to t/# a88#llants' T/# onl4 int#r#st a3ir#d b4 "#l Rosario at t/# s/#riKs sal# @as t/# rig/t to r#83r/as# ro9 :artin b#a3s# t/is @as t/# onl4 int#r#st t/at Franiso /ad at t/at ti9#' Franiso r#83r/as#d t/# land s#;#ral 9ont/s b#or# "#l Rosario sold /is int#r#st to t/# a88#llants' It is t/#r#or# l#ar t/at t/# a88#llants a3ir#d no int#r#st @/at#;#r in t/# land 3nl#ss t/# r#83r/as# 9ad# b4 Franiso ;#st#d t/# titl# in "#l Rosario< t/# t/#n o@n#r o t/# rig/t to r#83r/as#' W# t/inD t/at FranisoKs r#83r/as# did not /a;# t/is ##t' W/#n FranisoKs rig/t to r#83r/as# @as sold at 83bli a3tion t/# 3dg9#nt against /i9 @as o98l#t#l4 satisi#d< and /# @as t/#r#or# a strang#r to t/# 8ro##dings' B3t it is said t/at 3nd#r t/# 8ro;isions o artil# %%0+ o t/# Ci;il Cod# t/# r#83r/as# b4 Franiso @as a 8a49#nt or "#l Rosario and t/at t/# or9#r 9a4 r#o;#r ro9 t/# latt#r t/# 8ri# 8aid' "#l Rosario @as not a d#btor' H# @as 3nd#r no obligations to r#83r/as# t/# land ro9 :artin' H# /ad a rig/t to do so b3t @/#t/#r /# ##ris#d t/is rig/t or not d#8#nd#d 38on /is o@n ;olition' Artil# %%0+ is not or t/#s# r#asons a88liabl#' T/# 3dg9#nt a88#al#d ro9 is t/#r#or# air9#d< @it/ osts against t/# a88#llants'
SISON %s. BALGOS &G'R' No' %*1*0' S#8t#9b#r 0< %,%7'5
A4I%%A>", CJ: )ACTS! Isidro Aarraga @as g3ardian o #rtain 9inors na9#d :aria F#lisa and 2#s3s B#llosillo' "3ring /is ad9inistration< as t/# r#s3lt o a @rit o ##3tion iss3#d b4 t/# Co3rt o First Instan# o Ca8i< t/# s/#ri o Ca8i sold at 83bli a3tion' T/is land @as DnoD#d do@n to Al#andro Balgos or P%.7' On :a4 %6< %,%%< t/# 8#riod or r#d#98tion @as to #8ir#' B3t it /a88#n#d t/at Isidro Aarraga di#d on :a4 .< %,%%< t/# 9inors t/3s b#ing l#t @it/o3t an4 g3ardian' Not@it/standing t/is< on t/# #;#r4 last da4 o t/# 8#riod or r#d#98tion< :a4 %6< %,%%< L#od#gario Aarraga< an 3nl# o said 9inors< d#8osit#d @it/ t/# s/#ri t/# s39 o P%)%'%. in r#3nd o t/# 8rini8al 8aid b4 t/# Pag# $ %)0
Obligations and Contrats! "otrin#s and Cas# "ig#sts
83r/as#r and t/# int#r#st t/#r#on' T/# s/#ri notii#d t/# latt#r o t/# d#8osit in ord#r t/at /# 9ig/t r##i;# t/# 9on#4 and t3rn o;#r t/# land' B3t t/# 83r/as#r r#3s#d and still r#3s#s to allo@ t/# r#d#98tion'
ISS/E! W/#t/#r L#od#gario Aarraga< t/# 3nl# o t/# 9inors r#83r/as# t/# 8ar#l o land in 3#stionX
R/LING! An4 8#rson< @/#t/#r /# /as an int#r#st or not in t/# 3lill9#nt o t/# obligation< and @/#t/#r t/# d#btor Dno@s a88ro;#s it or is not a@ar# t/#r#o< an 9aD# t/# 8a49#nt' Ci;il Cod#< art' %%0+'
III. TO 37O# CAN A:#ENT BE #ADE * ARTS. &-56 TO &-5( I0. A:#ENT O) DEBTS IN #ONE: * ART. &-59 &. SEC. & O) RA +-9 >E))ECTI0IT:? & J/NE &9+61, AS A#ENDED B: RA 5&66 -. SEC. & AND - O) RA 4&4( >&& J/NE &991
B/ENA0ENT/RA %s. CO/RT O) AEALS &G'R' No' L()1+1*' 2an3ar4 ..< %,,*'5
I4>A>, J: )ACTS? On No;#9b#r .%< "##9b#r .% 4#ar %,76 and 2an3ar4 1< %,7+< 8#tition#r San B3#na;#nt3ra 83r/as#d dir#tl4 on r#dit t#til# 9at#rials and ot/#r alli#d goods ro9 8ri;at# r#s8ond#nt in t/# total a9o3nt o US%)<7%.'.*< @/i/ 83r/as#s @#r# to b# 8aid b4 8#tition#r @it/in t/irt4 1* da4s ro9 t/# dat# o sal#' On A8ril %,< %,7, and in S#8t#9b#r o %,7,< 8#tition#rs 8aid dir#tl4 to 8ri;at# r#s8ond#nt t/# total a9o3nt o US 6<0**'**< t/#r#b4 r#d3ing t/#ir 3ndis83t#d 8rini8al obligation o US %)<7%.'.* to US 6<%%.'.*' T#n 8#r#nt %* o t/# balan# @as add#d as oll#tion /arg#s< gi;ing a total balan# o US 6<+.1').- @/i/ 8#tition#r Lil4 San B3#na;#nt3ra< on F#br3ar4 %,< %,6*< aDno@l#dg#d and 8ro9is#d to 8a4 t/ro3g/ t/# S43ia La@ Oi#s' T/#r#at#r< 8#tition#rs 9ad# s#;#ral 8artial install9#nt 8a49#nts a9o3nting to a total s39 o P1.<+%.'** @/i/ aording to 8ri;at# r#s8ond#nt< i o983t#d at t/# loating 9arD#t rat# o t/# US dollar at t/# ti9# o t/# said 8a49#nt @o3ld onl4 a9o3nt to 0<.*,'**' All#g#dl4< t/is a9o3nt i d#d3t#d ro9 t/# original balan# o 6<+.1'). as r#l#t#d in t/# aor#3ot#d l#tt#r Pag# $ %)7
Obligations and Contrats! "otrin#s and Cas# "ig#sts
agr##9#nt dat#d F#br3ar4 %,< %,6* @o3ld l#a;# an 3n8aid balan# o .<7%)').' On t/# ot/#r /and< 8#tition#rs ont#nd t/at t/# a9o3nt o 6<+.1'). /ad b##n 3ll4 8aid t/ro3g/ t/# S43ia La@ Oi#s r#tain#d b4 8ri;at# r#s8ond#nt or oll#tion 83r8os#s'
ISS/E! W/#t/#r t/# rat# o #/ang# o t/# U'S' "ollar to t/# P/ili88in# P#so s/o3ld b# a88li#d in on;#rting 8#tition#rKs 9on#tar4 obligation to 8ri;at# r#s8ond#nt in t/# a9o3nt o US .<7%)'). to its #3i;al#nt ;al3# in P/ili88in# P#so' Is it t/# rat# o #/ang# 8r#;ailing at t/# ti9# t/# obligation @as in3rr#d or t/at 8r#;ailing at t/# ti9# o its 8a49#ntX
R/LING! An agr##9#nt to 8a4 an obligation in a 3rr#n4 ot/#r t/an P/ili88in# 3rr#n4 is n3ll and ;oid as ontrar4 to 83bli 8oli4< @/at t/# la@ s8#iiall4 8ro/ibits is 8a49#nt in 3rr#n4 ot/#r t/an l#gal t#nd#r b3t do#s not d##at a r#ditorKs lai9 or 8a49#nt' A ontrar4 r3l# @o3ld allo@ a 8#rson to 8roit or #nri/ /i9s#l in#3itabl4 at anot/#rKs #8#ns#' Wit/ r#gard to obligations in3rr#d 8rior to t/# ##ti;it4 o R#83bli At No' 0., r#3iring 8a49#nt in a 8arti3lar Dind o oin or 3rr#n4 ot/#r t/an P/ili88in# 3rr#n4< it is s8#iiall4 8ro;id#d t/at t/# sa9# s/all b# dis/arg#d in P/ili88in# 3rr#n4 9#as3r#d at t/# 8r#;ailing rat# o #/ang# at t/# ti9# t/# obligation @as in3rr#d ##8t in as# o a loan 9ad# in a or#ign 3rr#n4 sti83lat#d to b# 8a4abl# in t/# sa9# 3rr#n4 in @/i/ as# t/# rat# o #/ang# 8r#;ailing at t/# sti83lat#d dat# o 8a49#nt s/all 8r#;ail' In t/# as# b#or# Us< 8#tition#rsK obligation @as in3rr#d at#r t/# #nat9#nt o R#83bli At No' 0.,< as a9#nd#d' As /#ld in alalo ;s' L3 s38ra and as orr#tl4 r#li#d 38on b4 r#s8ond#nt a88#llat# o3rt< t/# rat# o #/ang# s/o3ld b# t/at 8r#;ailing at t/# ti9# o 8a49#nt'
(. LEGAL TENDER * SECS. (& AND (- O) D2- >&& NO0E#BER &92-1 A. COINS * CIRC/LAR NO. +(2 0. A:#ENT IN #ERCANTILE DOC/#ENT * -ND ARAGRA7 O) ART. &-59 NE3 ACI)IC TI#BER S/L: CO#AN:, INC. %s. SENERIS &G'R' No' L()%67)' "##9b#r %,< %,+*'5
C">CI5C)">, J4., J: )ACTS! On 23l4 %,< %,6)< a o98ro9is# 3dg9#nt @as r#nd#r#d b4 t/# r#s8ond#nt 23dg# in aordan# @it/ an a9iabl# s#ttl#9#nt #nt#r#d into b4 t/# 8arti#s' For ail3r# o 8#tition#r to o98l4 @it/ /is 3dg9#nt obligation< t/# r#s8ond#nt 23dg#< 38on 9otion o t/# 8ri;at# r#s8ond#nt< iss3#d an ord#r or t/# iss3an# o a @rit o ##3tion on "##9b#r .%< %,6)' Aordingl4< @rit o ##3tion @as iss3#d or t/# a9o3nt o P71<%1*'** Pag# $ %)6
Obligations and Contrats! "otrin#s and Cas# "ig#sts
In a l#tt#r dat#d 2an3ar4 %)< %,60< to t/# E(Oiio S/#ri< 8ri;at# r#s8ond#nt t/ro3g/ o3ns#l< r#3s#d to a#8t t/# /#D as @#ll as t/# as/ d#8osit' In t/# sa9# l#tt#r< 8ri;at# r#s8ond#nt r#3#st#d t/# s/#d3l#d a3tion sal# on 2an3ar4 %0< %,60 to 8ro##d i t/# 8#tition#r annot 8rod3# t/# as/'
ISS/E! W/#t/#r or not t/# 8ri;at# r#s8ond#nt an ;alidl4 r#3s# a#8tan# o t/# 8a49#nt o t/# 3dg9#nt obligation 9ad# b4 t/# 8#tition#r onsisting o P0*<***'** in Cas/i#rKs C/#D and P%1<%1*'** in as/ @/i/ it d#8osit#d @it/ t/# E(Oiio S/#ri b#or# t/# dat# o t/# s/#d3l#d a3tion sal#X
R/LING! W# ind t/# 8#tition to b# i98r#ss#d @it/ 9#rit' In 38/olding 8ri;at# r#s8ond#ntKs lai9 t/at /# /as t/# rig/t to r#3s# 8a49#nt b4 9#ans o a /#D< t/# r#s8ond#nt 23dg# it#d t/# ollo@ing! S#tion 71 o t/# C#ntral BanD At! QS#' 71' L#gal C/arat#r' ? C/#Ds r#8r#s#nting d#8osit 9on#4 do not /a;# l#gal t#nd#r 8o@#r and t/#n a#8tan# in 8a49#nt o d#bts< bot/ 83bli and 8ri;at#< is at t/# o8tion o t/# r#ditor< Pro;id#d< /o@#;#r< t/at a /#D @/i/ /as b##n l#ar#d and r#dit#d to t/# ao3nt o t/# r#ditor s/all b# #3i;al#nt to a d#li;#r4 to t/# r#ditor in as/ in an a9o3nt #3al to t/# a9o3nt r#dit#d to /is ao3nt'Q Artil# %.), o t/# N#@ Ci;il Cod#! QArt' %.),' ? T/# 8a49#nt o d#bts in 9on#4 s/all b# 9ad# in t/# 3rr#n4 sti83lat#d< and i it is not 8ossibl# to d#li;#r s3/ 3rr#n4< t/#n in t/# 3rr#n4 @/i/ is l#gal t#nd#r in t/# P/ili88in#s' T/# d#li;#r4 o 8ro9issor4 not#s 8a4abl# to ord#r< or bills o #/ang# or ot/#r 9#rantil# do39#nts s/all 8rod3# t/# ##t o 8a49#nt onl4 @/#n t/#4 /a;# b##n as/#d< or @/#n t/ro3g/ t/# a3lt o t/# r#ditor t/#4 /a;# b##n i98air#d'
TIBAJIA %s. CO/RT O) AEALS &G'R' No' %**.,*' 23n# )< %,,1'5
5A)%%A, J: )ACTS! Pag# $ %)+
Obligations and Contrats! "otrin#s and Cas# "ig#sts
S3it or oll#tion o a s39 o 9on#4 il#d b4 Ed#n Tan against t/# Tibaia s8o3s#s' A @rit o atta/9#nt @as iss3#d b4 t/# trial o3rt on %6 A3g3st %,+6 and on %6 S#8t#9b#r %,+6< t/# "#83t4 S/#ri il#d a r#t3rn stating t/at a d#8osit 9ad# b4 t/# Tibaia s8o3s#s in t/# R#gional Trial Co3rt o alooDan Cit4 in t/# a9o3nt o P)).<60*'** in anot/#r as#< /ad b##n garnis/#d b4 /i9'
ISS/E! W/#t/#r or not 8a49#nt b4 9#ans o /#D #;#n b4 as/i#rKs /#Dis onsid#r#d 8a49#nt in l#gal t#nd#r as r#3ir#d b4 t/# Ci;il Cod#< R#83bli At No' 0.,< and t/# C#ntral BanD AtX
R/LING! In t/# r##nt as#s o P/ili88in# Airlin#s< In' ;s' Co3rt o A88#als and Ro9an Cat/oli Bis/o8 o :alolos< In' ;s' Int#r9#diat# A88#llat# Co3rt< t/is Co3rt /#ld t/at ? QA /#D< @/#t/#r a 9anag#rKs /#D or ordinar4 /#D< is not l#gal t#nd#r< and an o#r o a /#D in 8a49#nt o a d#bt is not a ;alid t#nd#r o 8a49#nt and 9a4 b# r#3s#d r##i8t b4 t/# oblig## or r#ditor'Q T/# r3ling in t/#s# t@o . as#s 9#r#l4 a88li#s t/# stat3tor4 8ro;isions @/i/ la4 do@n t/# r3l# t/at a /#D is not l#gal t#nd#r and t/at a r#ditor 9a4 ;alidl4 r#3s# 8a49#nt b4 /#D< @/#t/#r it b# a 9anag#rKs< as/i#rKs or 8#rsonal /#D' P#tition#rs #rron#o3sl4 r#l4 on on# o t/# diss#nting o8inions in t/# P/ili88in# Airlin#s as# to s388ort t/#ir a3s#' T/# diss#nting o8inion /o@#;#r do#s not in an4 @a4 s388ort t/# ont#ntion t/at a /#D is l#gal t#nd#r b3t< on t/# ontrar4< stat#s t/at QI t/# PAL /#Ds in 3#stion /ad not b##n #nas/#d b4 S/#ri R#4#s< t/#r# @o3ld b# no 8a49#nt b4 t/# PAL and< ons#3#ntl4< no dis/arg# or satisation o its 3dg9#nt obligation'Q :or#o;#r< t/# ir39stan#s in t/# P/ili88in# Airlin#s as# ar# 3it# di#r#nt ro9 t/os# in t/# as# at bar or in t/at as# t/# /#Ds iss3#d b4 t/# 3dg9#nt d#btor @#r# 9ad# 8a4abl# to t/# s/#ri< E9ilio J' R#4#s< @/o #nas/#d t/# /#Ds b3t ail#d to d#li;#r t/# 8ro##ds o said #nas/9#nt to t/# 3dg9#nt r#ditor' In t/# 9or# r##nt as# o Fort3nado ;s' Co3rt o A88#als< t/is Co3rt str#ss#d t/at< QW# ar# not< b4 t/is d#ision< santioning t/# 3s# o a /#D or t/# 8a49#nt o obligations o;#r t/# ob#tion o t/# r#ditor'Q
)ORT/NADO %s. CO/RT O) AEALS &G'R' No' 6+007' A8ril .0< %,,%'5
C4@<, J.: )ACTS! On A8ril .%< %,+%< t/# RTC >C r#nd#r#d 3dg9#nt in Ci;il Cas# No' >(..176< #ntitl#d QAlaro Fort3nado ;s' Ang#l Ba3tista
Obligations and Contrats! "otrin#s and Cas# "ig#sts
At#r d3# noti#< t/#s# lots @#r# sold at 83bli a3tion to t/# 8#tition#rs as t/# onl4 bidd#r on A8ril .1< %,+)' T/#4 @#r# iss3#d a #rtiiat# o sal# @/i/ @as r#gist#r#d on A8ril .0< %,+) On :ar/ .%< %,+0< Ba3tista s#nt t/# s/#ri a l#tt#r b#aring NSCKs onor9it4 in @/i/ /# a;ail#d /i9s#l o NSCKs /#D< @/i/ @as s3ii#nt to o;#r t/# 3ll r#d#98tion 8ri# or bot/ lots< to r#d##9 t/# ot/#r lot o;#r#d b4 TCT No' T(67.0' T/# s/#ri aDno@l#dg#d r##i8t o t/# /#D as r#d#98tion 9on#4 or t/# t@o 8ar#ls o land on :ar/ .%< %,+0< and on :ar/ ..< %,+0< iss3#d a #rtiiat# o r#d#98tion in a;or o NSC and Ba3tista'
ISS/E! W/#t/#r t/# 8a49#nt o /#D onstit3t# l#gal t#nd#rX
R/LING! W# ar# not< b4 t/is d#ision< santioning t/# 3s# o a /#D or t/# 8a49#nt o obligations o;#r t/# ob#tion o t/# r#ditor' W/at @# ar# sa4ing is t/at a /#D 9a4 b# 3s#d or t/# ##ris# o t/# rig/t o r#d#98tion< t/# sa9# b#ing a rig/t and not an obligation' T/# t#nd#r o a /#D is s3ii#nt to o98#l r#d#98tion b3t is not in its#l a 8a49#nt t/at r#li#;#s t/# r#d#98tion#r ro9 /is liabilit4 to 8a4 t/# r#d#98tion 8ri#' In ot/#r @ords< @/il# @# /old t/at t/# 8ri;at# r#s8ond#nts 8ro8#rl4 ##ris#d t/#ir rig/t o r#d#98tion< t/#4 r#9ain liabl#< o o3rs#< or t/# 8a49#nt o t/# r#d#98tion 8ri#'
CO %s. 7ILIINE NATIONAL BAN@ &G'R' No' L(0%676' 23n# .,< %,+.'5
KA44I", J: )ACTS! On No;#9b#r %*< %,7%< t/# STAN"AR"< ##3t#d a r#al #stat# 9ortgag# in a;or o PNB< o;#r 8ro8#rti#s o;#r#d b4 TCT Nos' T(0%*+ and T(01.*< bot/ sit3at#d in Bag3io Cit4< as ollat#ral or a loan onsid#ration o P0**<***'**' On F#br3ar4 .*< %,71< t/# sa9# d#btor or8oration ##3t#d an a9#nd#d r#al #stat# 9ortgag# to inl3d# as ollat#ral or t/# inr#as# o t/# abo;# loan to P%<***<***'** a 8ro8#rt4 loat#d at Pasong Ta9o Et#nsion' Additionall4< on F#br3ar4 .*< %,71< t/# sa9# or8oration ##3t#d in a;or o PNB a /att#l 9ortgag# o its 8#rsonal 8ro8#rti#s list#d on 8ag#s ,7 to %*+ o t/# R#ord on A88#al' On 8ag#s 7(6 o a88#llantKs bri# it is stat#d t/at as o 23l4 %,< %,6)< t/# Qborro@#d loanQ o STAN"AR" total#d P)<.,7<+*1'07< and t/at t/# said obligation @as s#3r#d< as aor#9#ntion#d< b4 t/# Pag# $ %0*
Obligations and Contrats! "otrin#s and Cas# "ig#sts
9ortgag#s on t/# Bag3io and :aDati r#al #stat#s o STAN"AR" and t/# /att#l 9ortgag# on its 8#rsonal 8ro8#rti#s abo;# r##rr#d to' W/#n STAN"AR" ail#d to 8a4 its obligation< PNB #tra(3diiall4 or#los#d t/# 9ortgag# on t/# Bag3io 8ro8#rti#s as @#ll as t/# /att#l 9ortgag# on 23l4 %,< %,6)< @it/ PNB as t/# /ig/#st bidd#r or P%<0%)<1*0'**' S3bs#3#ntl4< on A3g3st +< %,6)< PNB also or#los#d t/# 9ortgag# on t/# :aDati 8ro8#rt4 and 83r/as#d t/# sa9#< as /ig/#st bidd#r< or P%<171<***'**'
ISS/E? W/at is t/# la@ a88liabl# to t/is as# as to t/# 8#riod o r#d#98tionX
R/LING? R#83bli At %1** #ntitl#d QAn At R#;ising t/# C/art#r o t/# P/ili88in# National BanDQ @as a88ro;#d and 9ad# ##ti;# on 23n# %7< %,00' It @as t/#r#or# t/# la@ @/#n in %,71 t/# 9ortgag# /#r# in dis83t# @as ##3t#d' It @as t/# ;#r4 la@ t/at t/# abo;#(3ot#d 8aragra8/ g o t/# 9ortgag# ontrat 9ad# r##r#n# to' In t/is onn#tion< #;id#ntl4 o;#rlooD#d b4 o3ns#l or PNB is t/at R#83bli At %1** do#s not ont#98lat# #tra3diial 8ro#d3r#' Cl#arl4 indiati;# o t/is is S#tion .* t/#r#o @/i/ 8ro;id#s! QS#' .*' Rig/t o r#d#98tion o 8ro8#rt4 or#los#d' ? T/# 9ortgagor s/all /a;# t/# rig/t< @it/in t/# 4#ar at#r t/# sal# o r#al #stat# as a r#s3lt o t/# or#los3r# o a 9ortgag#< to r#d##9 t/# 8ro8#rt4 b4 8a4ing t/# a9o3nt i#d b4 t/# o3rt in t/# ord#r o ##3tion< @it/ int#r#st t/#r#on at t/# rat# s8#ii#d in t/# 9ortgag#< and all t/# osts and ot/#r 3diial #8#ns#s in3rr#d b4 t/# BanD b4 r#ason o t/# ##3tion and sal# and or t/# 3stod4 o said 8ro8#rt4'Q Ind##d< on;#ntional l#gal and banDing b3sin#ss s#ns# ditat#s t/at it 93st /a;# b##n b#a3s# o s3/ o9ission t/at 8aragra8/ g abo;# /ad to #8r#ssl4 inor8orat# At 1%10 @/i/ 8ro;id#s or #tra3diial or#los3r#' W# annot< t/#r#or#< #sa8# t/# onl3sion t/at @/at STAN"AR" agr##d to in r#s8#t to t/# 8ossibl# or#los3r# o its 9ortgag# @as to s3b#t t/# sa9# to t/# 8ro;isions o At 1%10 s/o3ld t/# PNB o8t to 3tili# said la@ inst#ad o R#83bli At %1**'
NATIONAL #AR@ETING CORORATION %s. )EDERATION O) /NITED NA#ARCO DISTRIB/TORS, INC. &G'R' No' L(..06+' 2an3ar4 1%< %,61'5
A>T">)", J: )ACTS! On No;#9b#r %7< %,0,< t/# NA:ARCO and t/# FE"ERATION #nt#r#d into a Contrat o Sal#' NA:ARCO instit3t#d t/# 8r#s#nt ation Ci;il Cas# No' )7%.) all#ging< a9ong ot/#rs< t/at t/# FE"ERATIONKS at or o9ission in r#3sing to satis4 t/# or9#rKs ;alid< 3st and d#9andabl# lai9 /as o98#ll#d it to il# t/# instant ation- and 8ra4ing t/at t/# FE"ERATION b# ord#r#d to 8a4 t/# NA:ARCO t/# s39 o P7%%<*01'10< r#8r#s#nting t/# ost o 9#r/andis# 9#ntion#d Pag# $ %0%
Obligations and Contrats! "otrin#s and Cas# "ig#sts
in t/# 8r##ding 8aragra8/< @it/ int#r#st t/#r#on at t/# l#gal rat# ro9 t/# dat# o d#li;#r4 o t/# 9#r/andis# in 3#stion< 3ntil t/# @/ol# obligation is 8aid- P.*<***'** as attorn#4Ks ##s and ot/#r #8#ns#s o litigation< 8l3s osts'
ISS/E! W/#t/#r t/# d#li;#r4 o n#gotiabl# do39#nts do#s onstit3t# 8a49#ntX
R/LING! T/# 9#r# d#li;#r4 b4 FE"ERATION o t/# do9#sti l#tt#rs o r#dit to NA:ARCO did not o8#rat# to dis/arg# t/# d#bt o FE"ERATION' As s/o@n b4 t/# a88#al#d 3dg9#nt< NA:ARCO a#8t#d t/# t/r## l#tt#rs o r#dit Qto ins3r# t/# 8a49#nt o t/os# goods b4 t/# FE"ERATION ' ' 'Q T/#4 @#r# gi;#n t/#r#or# as 9#r# g3arant## or t/# 8a49#nt o t/# 9#r/andis#' T/# d#li;#r4 o 8ro9issor4 not#s 8a4abl# to ord#r< or bills o #/ang# or drats or ot/#r 9#rantil# do39#nt s/all 8rod3# t/# ##t o 8a49#nt onl4 @/#n r#ali#d< or @/#n b4 t/# a3lt o t/# r#ditor< t/# 8ri;il#g#s in/#r#nt in t/#ir n#gotiabl# /arat#r /a;# b##n i98air#d
0I. ETRA'ORDINAR: IN)LATION OR DE)LATION O) T7E C/RRENC: * ART. &-+6 )ILIINO IE AND )O/NDR: CORORATION %s. NATIONAL 3ATER3OR@S AND SE3ERAGE A/T7ORIT: &G'R' No' L()1))7' :a4 1< %,++'5
4)"(A'@)>", J: )ACTS! On 23n# %.< %,7%< t/# NAWASA #nt#r#d into a ontrat @it/ t/# 8lainti FPFC or t/# latt#r to s388l4 it @it/ )Q and 7Q dia9#t#r #ntri3gall4 ast iron 8r#ss3r# 8i8#s @ort/ P.6*<%+6'0* to b# 3s#d in t/# onstr3tion o t/# Anono4 Wat#r@orDs in :asbat# and t/# Barrio San Andr#s( Villar#al Wat#r@orDs in Sa9ar' "##ndant NAWASA 8aid in install9#nts on ;ario3s dat#s< a total o P%1)<7+*'** l#a;ing a balan# o P%10<0*6'0* #l3ding int#r#st' Ha;ing o98l#t#d t/# d#li;#r4 o t/# 8i8#s< t/# 8lainti d#9and#d 8a49#nt ro9 t/# d##ndant o t/# 3n8aid balan# o t/# 8ri# @it/ int#r#st in aordan# @it/ t/# t#r9s o t/#ir ontrat' W/#n t/# NAWASA ail#d to 8a4 t/# balan# o its ao3nt< t/# 8lainti il#d a oll#tion s3it on :ar/ %7< %,76'
ISS/E!
Pag# $ %0.
Obligations and Contrats! "otrin#s and Cas# "ig#sts
@/#t/#r< on t/# basis o t/# ontin3o3sl4 s8iralling 8ri# ind# indis83tabl4 s/o@n b4 t/# 8lainti< t/#r# #ists an #traordinar4 inlation o t/# 3rr#n4 3sti4ing an ad3st9#nt o d##ndant(a88#ll##Ks 3n8aid 3dg9#nt obligation to t/# 8lainti(a88#llantX
R/LING! Etraordinar4 inlation #ists @/#n Qt/#r# is a d#r#as# or inr#as# in t/# 83r/asing 8o@#r o t/# P/ili88in# 3rr#n4 @/i/ is 3n3s3al or b#4ond t/# o99on l3t3ation in t/# ;al3# o said 3rr#n4< and s3/ d#r#as# or inr#as# o3ld not /a;# b##n r#asonabl4 or#s##n or @as 9ani#stl4 b#4ond t/# ont#98lation o t/# 8arti#s at t/# ti9# o t/# #stablis/9#nt o t/# obligation'
#OBIL OIL 7ILIINES, INC. %s. CO/RT O) AEALS &G'R' No' 0+%..' "##9b#r .,< %,+,'5
5A4AS, J: )ACTS! Plainti is a d#al#r o d##ndantKs 8#trol#39 8rod3ts and a#ssori#s< o8#rating a :obil gasolin# s#r;i# station 3nd#r t/# na9# o Ann# :ari# :obil S#r;i# Station loat#d at A3rora Bl;d'< San 23an< :#tro :anila' T/# ontrat3al r#lations/i8 b#t@##n 8lainti and d##ndant is go;#rn#d b4 a R#tail "#al#r Contrat< E/' A< also E/' %' In t/# lat#r 8art o %,61< an int#rnational oil risis a9# abo3t b4 r#ason o t/# on#rt#d ation o 8rini8al oil 8rod3ing o3ntri#s to inr#as# t/# oil 8ri#s' T/# P/ili88in#s @as not s8ar#d o t/is #ono9i so3rg#< and to 9##t t/# #9#rg#n4< as t/# o99odit4 b#a9# sar# @/il# t/# d#9and t/#r#or# r#9ain#d t/# sa9#' On F#br3ar4 %0< %,6) ? a Frida4 ? @/il# t/#r# @as still t/is oil risis< 8lainti 8la#d @it/ d##ndant a 8r#(8aid ord#r or +<*** lit#rs o 8r#9i39 gasolin# and .<*** lit#rs o r#g3lar gasolin# 8a4ing t/#r#or# a PBTC Cas/i#rKs C/#D in t/# a9o3nt o P)<7%*'** @as r##i;#d' :r' Alb#rto Lat3no 3rt/#r stat#s t/at t/# ord#r< E/' B< did not o9# baD to /i9 or in;oiing t/at Frida4 at#rnoon F#br3ar4 %0< %,6)- it @as on F#br3ar4 %,< %,6) t/at /# r##i;#d again t/# ord#r< b#a3s# t/# 8ro#ssing t/#r#o b4 on# o38on o98troll#r @as o98l#t#d onl4 on t/at da4< t/# r#ason or t/# d#la4 b#ing t/at on F#br3ar4 %+ t/#r# @as a 8ri# inr#as# and t/#4 /ad to gi;# 8riorit4 to t/# r#all o in;oi#s alr#ad4 @it/ t/#ir @ar#/o3s# and dis8at/#r or r#(8riing'
ISS/E! W/#t/#r or not t/# o98an4 s/o3ld b# liabl# or a9o3nt o inlation o t/# gasolin# 8ri#X
R/LING! Pag# $ %01
Obligations and Contrats! "otrin#s and Cas# "ig#sts
On t/# iss3# or ad3st9#nt lai9s< 8ri;at# r#s8ond#nt /as no basis in ontrat or in la@' Par#nt/#tiall4< t/# 8rini8l# W# laid do@n in t/# as# o Co99ission#r o P3bli Hig/@a4s ;s' B3rgos ,7 SCRA +1% an b# a88li#d /#r#< to @it! Q' ' ' an agr##9#nt is n##d#d or t/# ##ts o an #traordinar4 inlation to b# taD#n into ao3nt to alt#r t/# ;al3# o t/# 3rr#n4 at t/# ti9# o t/# #stablis/9#nt o t/# obligation @/i/< as a r3l#< is al@a4s t/# d#t#r9inati;# #l#9#nt< to b# ;ari#d b4 agr##9#nt t/at @o3ld ind r#ason onl4 in t/# s38#r;#ntion o #traordinar4 inlation or d#lation'Q 88' +16(+1+ #98/asis s388li#d :or#o;#r< in /is on3rring o8inion in t/# sa9# as#< 23sti# Cla3dio T##/anD## stat#d! QI on3r in t/# r#s3lt @it/ t/# obs#r;ation t/at t/# stat#9#nts in t/# 9ain o8inion r# t/# a88liabilit4 or non(a88liabilit4 o Artil# %.0* o t/# Ci;il Cod# s/o3ld b# taD#n as obit#r dita< sin# said artil# 9a4 not b# in;oD#d nor a88li#d @it/o3t a 8ro8#r d#laration o #traordinar4 inlation or d#lation o 3rr#n4 b4 t/# o98#t#nt a3t/oriti#s' In t/# as# at bar< t/# obligation o t/# 8#tition#r< i an4< is bas#d on la@ sin# t/# sa9# alls or t/# a88liation o t/# Ci;il Cod# 8ro;isions on da9ag#s' :or#o;#r< t/#r# /as b##n no oiial 8rono3n#9#nt or d#laration o t/# #ist#n# o #traordinar4 inlation or d#lation'
-. 37EN ARTICLE &-+6 DOES NOT AL: >OBLIGATIONS, NOT CONTRACT/AL1? 0ELASCO %s. #ANILA ELECTRIC CO. &G'R' No' L(%+1,*' "##9b#r .*< %,6%'5
4ILIS, JK% )ACTS! T/# t/r3st o t/is 9otion is t/at t/# d#ision /as inorr#tl4 ass#ss#d a88#llantKs da9ag#s and 3nr#asonabl4 r#d3#d t/#ir a9o3nt' It is irst arg3#d t/at t/# d#ision #rr#d in not taDing into ao3nt< in o983ting a88#llantKs loss o ino9#< t/# a88#llantKs 3nd#lar#d ino9# o P+<11+'.*< ass#ss#d b4 BIR or t/# 4#ar %,0)< in addition to /is d#lar#d ino9# or t/at 4#ar P%*<,60< it b#ing arg3#d t/at a88#llant n#;#r lai9#d an4 ot/#r so3r# o ino9# b#sid#s /is 8ro#ssional #arnings S#;#ral ir39stan#s o r#ord dis8ro;# t/is lai9' % T/at t/# a9o3nt o P+<11+'.* @as D#8t a8art ro9 t/# ordinar4 #arnings o a88#llant or t/# 4#ar %,0) P%*<,60< and not d#lar#d @it/ it< is in its#l ir39stantial #;id#n# t/at it @as not o o98arabl# /arat#r' . I it @as 8art o /is ordinar4 8ro#ssional ino9#< a88#llant @as g3ilt4 o ra3d in not d#laring it and /# s/o3ld not b# allo@#d to d#ri;# ad;antag# ro9 /is o@n @rongdoing' 1 T/# d#ision 8oint#d o3t t/at b4 inl3ding t/# 3nd#lar#d a9o3nt in a88#llantKs dislos#d 8ro#ssional #arnings or %,0)< to a grand total o P%,<1%1'.*< t/# ino9# or said 4#ar b#o9#s abnor9all4 /ig/ in at< 9or# t/an do3bl#< as o98ar#d to a88#llantKs #arnings or t/# t/r## 8r##ding 4#ars< %,0%(%,01< t/at a;#rag#d not 9or# t/an P6<*** 8#r ann39' S3/ abnor9alit4 3stii#s t/# Co3rtKs r#3sal to onsid#r t/# 3ndislos#d P+<11+'.* as 8art o a88#llantKs r#g3lar ino9# or t/# 83r8os# o o983ting t/# r#d3tion in /is #arnings as a r#s3lt o t/# o98lain#d ats o a88#ll##' ) Finall4< t/# tr3# so3r# o t/# 3nd#lar#d a9o3nt la4 in a88#llantKs o@n
Pag# $ %0)
Obligations and Contrats! "otrin#s and Cas# "ig#sts
Dno@l#dg#< b3t /# /os# not to dislos# it- n#it/#r did /# all 38on t/# ass#ssing r#;#n3# oi#r to r#;#al its /arat#r'
ISS/E! W/#t/#r Art' %.0* o Ci;il Cod# is a88liabl# in t/# as# at barX
R/LING! W# do not d##9 t/# r3l#s in;oD#d to b# a88liabl#' Artil# %.0* o t/# Ci;il Cod# is to t/# ##t t/at! QART' %.0*' In as# an #traordinar4 inlation or d#lation o t/# 3rr#n4 sti83lat#d s/o3ld s38#r;#n#< t/# ;al3# o t/# 3rr#n4 at t/# ti9# o t/# #stablis/9#nt o t/# obligation s/all b# t/# basis o 8a49#nt< 3nl#ss t/#r# is an agr##9#nt to t/# ontrar4'Q It an b# s##n ro9 t/# #98lo49#nt o t/# @ords Q#traordinar4 inlation or d#lation o t/# 3rr#n4 sti83lat#dQ t/at t/# l#gal r3l# #n;isag#s ontrat3al obligations @/#r# a s8#ii 3rr#n4 is s#l#t#d b4 t/# 8arti#s as t/# 9#di39 o 8a49#nt- /#n# it is ina88liabl# to obligations arising ro9 tort and not ro9 ontrat< as in t/# as# at bar< b#sid#s t/#r# b#ing no s/o@ing t/at t/# at3al ass398tion o t/# artil# /as o9# into #ist#n# As to t/# Pantoa r3ling< t/# r#gard 8aid to t/# d#r#asing 83r/as# o t/# 8#so @as onsid#r#d a ator in #sti9ating t/# ind#9nit4 d3# or loss o li#< @/i/ in its#l is not s3s#8tibl# o a3rat# #sti9ation' It s/o3ld not b# orgott#n t/at t/# da9ag#s a@ard#d to /#r#in a88#llant @#r# b4 no 9#ans 3ll o98#nsator4 da9ag#s< sin# t/# d#ision 9aD#s l#ar t/at a88#llant< b4 /is ail3r# to 9ini9i# /is da9ag#s b4 9#ans #asil4 @it/in /is r#a/< @as d#lar#d #ntitl#d onl4 to a r#d3#d a@ard or t/# n3isan# s3#d 38on St##l ;s' Rail Ri;#r Coal Co'< )1 O/io A88' ..+< %+. N'E' 00.- and t/# a9o3nt grant#d /i9 /ad alr#ad4 taD#n into ao3nt t/# /ang#d #ono9i ir39stan#s' Nor is t/# at t/at a88#llant lost a /an# to s#ll /is /o3s# or P,0<*** to 2os# Val#nia onstit3t# a gro3nd or an a@ard o da9ag#s in t/at a9o3nt' As r#9arD#d in t/# 9ain d#ision< t/#r# is no ad#3at# 8roo o loss< sin# t/#r# is no #;id#n# o t/# d#8r#iation in t/# 9arD#t ;al3# o t/# /o3s# in 3#stion a3s#d b4 t/# ats o d##ndant :#ralo' T/# /o3s#< at#r all< /as r#9ain#d @it/ a88#llant< and /# ad9its in /is 9otion or r#onsid#ration 8ag# )+ t/at 8ro8#rti#s /a;# inr#as#d in ;al3# b4 .** sin# t/#n'
CO##ISSIONER O) /BLIC 7IG73A:S %s. B/RGOS &G'R' No' L(176*7' :ar/ 1%< %,+*'5
I CAST4", J: )ACTS!
Pag# $ %00
Obligations and Contrats! "otrin#s and Cas# "ig#sts
Vitoria A9igabl# is t/# o@n#r o 8ar#l o land sit3at#d in C#b3 Cit4 @it/ an ar#a o 7<%76 s3ar# 9#t#rs' So9#ti9# in %,.)< t/# Go;#rn9#nt tooD t/is land or road(rig/t(o @a4 83r8os#' T/# land /ad sin# b#o9# str##ts Dno@n as :ango A;#n3# and Gorordo A;#n3# in C#b3 Cit4' Vitoria A9igabl# il#d in t/# CFI o C#b3 Cit4 a o98laint< to r#o;#r o@n#rs/i8 and 8oss#ssion o t/# land< and or da9ag#s in t/# s39 o P0*<***'** or t/# all#g#d ill#gal o38ation o t/# land b4 t/# Go;#rn9#nt< 9oral da9ag#s in t/# s39 o P.0<***'**< and attorn#4Ks ##s in t/# s39 o P0<***'**< 8l3s osts o s3it' T/# o98laint @as doD#t#d as Ci;il Cas# No' R(0,66 o t/# Co3rt o First Instan# o C#b3< #ntitl#d QVitoria A9igabl# ;s' Niolas C3#na< in /is a8ait4 as Co99ission#r o P3bli Hig/@a4s and R#83bli o t/# P/ili88in#s'Q
ISS/E! W/#t/#r or not t/# 8ro;ision o Artil# %.0* o t/# N#@ Ci;il Cod# is a88liabl# in d#t#r9ining t/# a9o3nt o o98#nsation to b# 8aid to r#s8ond#nt Vitoria A9igabl# or t/# 8ro8#rt4 taD#n is rais#d b#a3s# t/# r#s8ond#nt o3rt a88li#d said Artil# b4 onsid#ring t/# ;al3# o t/# 8#so to t/# dollar at t/# ti9# o /#aring< in d#t#r9ining d3# o98#nsation to b# 8aid or t/# 8ro8#rt4 taD#n' T/# Soliitor G#n#ral ont#nds t/at in so doing< t/# r#s8ond#nt o3rt ;iolat#d t/# ord#r o t/is Co3rt< in its d#ision in G'R' No' L(.7)**< F#br3ar4 .,< %,6.< to 9aD# as basis o t/# d#t#r9ination o 3st o98#nsation t/# 8ri# or ;al3# o t/# land at t/# ti9# o t/# taDing'
R/LING! It is to b# not#d t/at r#s8ond#nt 3dg# did onsid#r t/# ;al3# o t/# 8ro8#rt4 at t/# ti9# o t/# taDing< @/i/ as 8ro;#n b4 t/# 8#tition#r @as P.'16 8#r s3ar# 9#t#r in %,.)' Ho@#;#r< a88l4ing Artil# %.0* o t/# N#@ Ci;il Cod#< and onsid#ring t/at t/# ;al3# o t/# 8#so to t/# dollar d3ring t/# /#aring in %,6. @as P7'660 to a dollar< as 8ro;#n b4 t/# #;id#n# o t/# 8ri;at# r#s8ond#nt Vitoria A9igabl#< t/# Co3rt i#d t/# ;al3# o t/# 8ro8#rt4 at t/# d#bat#d ;al3# o t/# 8#so in r#lation< to t/# dollar< and a9# 38 @it/ t/# s39 o P),<)0,'1) as t/# 3st o98#nsation to b# 8aid b4 t/# Go;#rn9#nt' To t/is ation o t/# r#s8ond#nt 3dg#< t/# Soliitor G#n#ral /as taD#n ##8tion' Artil# %.0* o t/# N#@ Ci;il Cod# s##9s to b# t/# onl4 8ro;ision in o3r stat3t#s @/i/ 8ro;id#s or 8a49#nt o an obligation in an a9o3nt di#r#nt ro9 @/at /as b##n agr##d 38on b4 t/# 8arti#s b#a3s# o t/# s38#r;#ntion o #tra(ordinar4 inlation or d#lation' QART' %.0*' In as# #tra(ordinar4 inlation or d#lation o t/# 3rr#n4 sti83lat#d s/o3ld s38#r;#n#< t/# ;al3# o t/# 3rr#n4 at t/# ti9# o t/# #stablis/9#nt o t/# obligation s/all b# t/# basis o 8a49#nt< 3nl#ss t/#r# is an agr##9#nt to t/# ontrar4'Q It is l#ar t/at t/# or#going 8ro;ision a88li#s onl4 to as#s @/#r# a ontrat or agr##9#nt is in;ol;#d' It do#s not a88l4 @/#r# t/# obligation to 8a4 aris#s ro9 la@< ind#8#nd#nt o ontrat' Pag# $ %07
Obligations and Contrats! "otrin#s and Cas# "ig#sts
T/# taDing o 8ri;at# 8ro8#rt4 b4 t/# Go;#rn9#nt in t/# ##ris# o its 8o@#r o ;i#@ in t/# as# o V#laso ;s' :anila El#tri Co'< #t al'< L(%,1,*< "##9b#r .,< %,6%' :or#o;#r< t/# la@ as 3ot#d< l#arl4 8ro;id#s t/at t/# ;al3# o t/# 3rr#n4 at t/# ti9# o t/# #stablis/9#nt o t/# obligation s/all b# t/# basis o 8a49#nt @/i/< in as#s o #8ro8riation< @o3ld b# t/# ;al3# o t/# 8#so at t/# ti9# o t/# taDing o t/# 8ro8#rt4 @/#n t/# obligation o t/# Go;#rn9#nt to 8a4 aris#s' It is onl4 @/#n t/#r# is an Qagr##9#nt to t/# ontrar4Q t/at t/# #traordinar4 inlation @ill 9aD# t/# ;al3# o t/# 3rr#n4 at t/# ti9# o 8a49#nt< not at t/# ti9# o t/# #stablis/9#nt o t/# obligation< t/# basis or 8a49#nt' In ot/#r @ords< an agr##9#nt is n##d#d or t/# ##ts o an #traordinar4 inlation to b# taD#n into ao3nt to alt#r t/# ;al3# o t/# 3rr#n4 at t/# ti9# o t/# #stablis/9#nt o t/# obligation @/i/< as a r3l#< is al@a4s t/# d#t#r9inati;# #l#9#nt< to b# ;ari#d b4 agr##9#nt t/at @o3ld ind r#ason onl4 in t/# s38#r;#ntion o #traordinar4 inlation or d#lation' W# /old< t/#r#or#< t/at 3nd#r t/# la@< in t/# abs#n# o an4 agr##9#nt to t/# ontrar4< #;#n ass39ing t/at t/#r# /as b##n an #traordinar4 inlation @it/in t/# 9#aning o Artil# %.0* o t/# N#@ Ci;il Cod#< a at W# d#lin# to d#lar# at#goriall4< t/# ;al3# o t/# 8#so at t/# ti9# o t/# #stablis/9#nt o t/# obligation< @/i/ in t/# instant as# is @/#n t/# 8ro8#rt4 @as taD#n 8oss#ssion o b4 t/# Go;#rn9#nt< 93st b# onsid#r#d or t/# 83r8os# o d#t#r9ining 3st o98#nsation' Ob;io3sl4< t/#r# an b# no Qagr##9#nt to t/# ontrar4Q to s8#aD o b#a3s# t/# obligation o t/# Go;#rn9#nt so3g/t to b# #nor#d in t/# 8r#s#nt ation do#s not originat# ro9 ontrat< b3t ro9 la@ @/i/< g#n#rall4 is not s3b#t to t/# @ill o t/# 8arti#s' And t/#r# b#ing no ot/#r l#gal 8ro;ision it#d @/i/ @o3ld 3sti4 a d#8art3r# ro9 t/# r3l# t/at 3st o98#nsation is d#t#r9in#d on t/# basis o t/# ;al3# o t/# 8ro8#rt4 at t/# ti9# o t/# taDing t/#r#o in #8ro8riation b4 t/# Go;#rn9#nt< t/# ;al3# o t/# 8ro8#rt4 as it is @/#n t/# Go;#rn9#nt tooD 8oss#ssion o t/# land in 3#stion< not t/# inr#as#d ;al3# r#s3lting ro9 t/# 8assag# o ti9# @/i/ in;ariabl4 brings 3n#arn#d inr#9#nt to land#d 8ro8#rti#s< r#8r#s#nts t/# tr3# ;al3# to b# 8aid as 3st o98#nsation or t/# 8ro8#rt4 taD#n'
ST. A/L )IRE #ARINE INS/RANCE CO. %s. #ACONDRA: CO., INC., &G'R' No' L(.66,7' :ar/ .0< %,67'5
A>T">)", J: )ACTS! On A3g3st 6< %,7*< t/# SS QTai PingQ arri;#d at t/# Port o :anila and dis/arg#d its aor#said s/i89#nt into t/# 3stod4 o :anila Port S#r;i#< t/# arrastr# ontrator or t/# Port o :anila' T/# said s/i89#nt @as dis/arg#d o98l#t# and in good ord#r @it/ t/# ##8tion o on# % dr39 and s#;#ral artons @/i/ @#r# in bad ord#r ondition' B#a3s# onsign## ail#d to r##i;# Pag# $ %06
Obligations and Contrats! "otrin#s and Cas# "ig#sts
t/# @/ol# s/i89#nt and as s#;#ral artons o 9#diin# @#r# r##i;#d in bad ord#r ondition< t/# onsign## il#d t/# orr#s8onding lai9 in t/# a9o3nt o P%<%*,'76 r#8r#s#nting t/# C'I'F' ;al3# o t/# da9ag#d dr39 and artons o 9#diin# @it/ t/# arri#r< /#r#in d##ndants(a88#ll##s and t/# :anila Port S#r;i#' Ho@#;#r< bot/ r#3s#d to 8a4 s3/ lai9' Cons#3#ntl4< t/# onsign## il#d its lai9 @it/ t/# ins3r#r< St' Pa3l Fir# :arin# Ins3ran# Co'< and t/# ins3ran# o98an4< on t/# basis o s3/ lai9< 8aid to t/# onsign## t/# ins3r#d ;al3# o t/# lost and da9ag#d goods< inl3ding ot/#r #8#ns#s in onn#tion t/#r#@it/< in t/# total a9o3nt o %<%1)')7 U'S' 3rr#n4
ISS/E! W/#t/#r or not< in as# o loss or da9ag#< t/# liabilit4 o t/# arri#r to t/# onsign## is li9it#d to t/# C'I'F' ;al3# o t/# goods @/i/ @#r# lost or da9ag#dX
R/LING! T/# li9itation o t/# arri#rKs liabilit4 is santion#d b4 t/# r##do9 o t/# ontrating 8arti#s to #stablis/#d s3/ sti83lations< la3s#s< t#r9s< or onditions as t/#4 9a4 d##9 on;#ni#nt< 8ro;id# t/#4 ar# not ontrar4 to la@< 9orals< good 3sto9s and 83bli 8oli4' A sti83lation iing or li9iting t/# s39 t/at 9a4 b# r#o;#r#d ro9 t/# arri#r on t/# loss or d#t#rioration o t/# goods is ;alid 8ro;id# it is a r#asonabl# and 3st 3nd#r t/# ir39stan#s< and b /as b##n airl4 and r##l4 agr##d 38on'
0II. )OR#S O) A:#ENT &. ALICATION O) A:#ENT * ARTS. &-+- TO &-+5 REARATIONS CO##ISSION %s. /NI0ERSAL DEE'SEA )IS7ING CORORATION &G'R' Nos' L(.%,*% and L(.%,,7' 23n# .6< %,6+'5
C">CI5T)">, J: )ACTS! UNIVERSAL @as a@ard#d si 7 tra@l boats b4 t/# R#8arations Co99ission as #nd(3s#r o r#8arations goods' T/#s# is/ing boats< @#r# d#li;#r#d to UNIVERSAL on No;#9b#r .*< %,0+< and t/# ontrat o Conditional P3r/as# and Sal# o R#8arations Goods< ##3t#d b4 and b#t@##n t/# 8arti#s on F#br3ar4 %.< %,7*< 8ro;id#d a9ong ot/#rs< t/at Qt/# irst install9#nt r#8r#s#nting %* o t/# a9o3nt or P01<7).'+) s/all b# 8aid @it/in .) 9ont/s ro9 t/# dat# o o98l#t# d#li;#r4 t/#r#o< t/# balan# s/all b# 8aid in t/# 9ann#r /#r#in stat#d in t/# ontrat'
Pag# $ %0+
Obligations and Contrats! "otrin#s and Cas# "ig#sts
To g3arant## t/# ait/3l o98lian# @it/ t/# obligations 3nd#r said ontrat< a 8#ror9an# bond in t/# a9o3nt o P01<7)1'**< @it/ UNIVERSAL as 8rini8al and t/# :anila S3r#t4 Fid#lit4 Co'< In'< as s3r#t4< @as ##3t#d in a;or o t/# R#8arations Co99ission' A orr#s8onding ind#9nit4 agr##9#nt @as ##3t#d to ind#9ni4 t/# s3r#t4 o98an4 or an4 da9ag#< loss /arg#s< #t'< @/i/ it 9a4 s3stain or in3r as a ons#3#n# o /a;ing b#o9# a s3r#t4 38on t/# 8#ror9an# bond' On A3g3st %*< %,7.< t/# R#8arations Co99ission instit3t#d t/# 8r#s#nt ation against UNIVERSAL and t/# s3r#t4 o98an4 to r#o;#r ;ario3s a9o3nts o 9on#4 d3# 3nd#r t/#s# ontrats' In ans@#r< UNIVERSAL lai9#d t/at t/# a9o3nts o 9on#4 so3g/t to b# oll#t#d ar# not 4#t d3# and d#9andabl#'
ISS/E! W/#t/#r or not t/# irst install9#nts 3nd#r t/# t/r## 1 ontrats o onditional 83r/as# and sal# o r#8arations goods @#r# alr#ad4 d3# and d#9andabl# @/#n t/# o98laint @as il#dX
R/LING! T/# r3l#s ontain#d in Artil#s %.0. to %.0) o t/# Ci;il Cod# a88l4 to a 8#rson o@ing s#;#ral d#bts o t/# sa9# Dind to a singl# r#ditor' T/#4 annot b# 9ad# a88liabl# to a 8#rson @/os# obligation as a 9#r# s3r#t4 is bot/ onting#nt and sing3lar< @/i/ in t/is as# is t/# 3ll and ait/3l o98lian# @it/ t/# t#r9s o t/# ontrat o onditional 83r/as# and sal# o r#8arations goods' T/# obligation inl3d#d t/# 8a49#nt< not onl4 o t/# irst install9#nt in t/# a9o3nt o P01<7)1'**< b3t also o t/# t#n %* #3al 4#arl4 install9#nts o P07<0,6'.* 8#r ann39' T/# a9o3nt o P%*<***'** @as< ind##d< d#d3t#d ro9 t/# a9o3nt o P01<7)1'**< b3t t/#n t/# irst o t/# t#n %* #3al 4#arl4 install9#nts /ad also ar3#d- /#n#< no #rror @as o99itt#d in /olding t/# s3r#t4 o98an4 to t/# 3ll #t#nt o its 3nd#rtaDing'
#AGDALENA ESTATES, INC. %s. RODRIG/E; &G'R' No' L(%+)%%' "##9b#r %6< %,77'5
4IA%A, J: )ACTS! T/# a88#llants bo3g/t ro9 t/# a88#ll## a 8ar#l o land in >C Dno@n as Lot 6(( .(G< Psd( .7%,1' In ;i#@ o an 3n8aid balan# o P0<***'** on ao3nt o t/# 83r/as# 8ri# o t/# lot< t/# a88#llants ##3t#d on 2an3ar4 )< %,06< t/# ollo@ing 8ro9issor4 not# r#8r#s#nting t/# said ao3nt' T/# all#g#d a393lat#d int#r#sts on t/# 8rini8al o P0<***'**' "3# to t/# r#3sal o t/# a88#llants to 8a4 t/# said int#r#st< t/# a88#ll## start#d t/is s3it in t/# :TC o :anila to #nor# t/# oll#tion t/#r#o' T/# said o3rt< on F#br3ar4 0< %,0,< r#nd#r#d 3dg9#nt in a;or o t/# Pag# $ %0,
Obligations and Contrats! "otrin#s and Cas# "ig#sts
a88#ll## and against t/# a88#llants< ord#ring t/# latt#r to 8a4 ointl4 and s#;#rall4 t/# a88#ll## t/# s39 o P700'+, @it/ int#r#st t/#r#on at t/# l#gal rat# ro9 No;#9b#r %*< %,0+< t/# dat# o t/# iling o t/# o98laint< 3ntil t/# @/ol# a9o3nt is 3ll4 8aid' Not satisi#d @it/ t/at 3dg9#nt< a88#llants a88#al#d to t/# CFI o :anila< @/#r# t/# as# @as s3b9itt#d or d#ision on t/# 8l#adings' T/# CFI o :anila r#nd#r#d t/# 3dg9#nt stat#d at t/# o3ts#t o t/is d#ision'
ISS/E! W/#t/#r t/# s39 onstit3t# 3ll 8a49#ntX
R/LING! W# do not agr## @it/ t/# ont#ntion o t/# a88#llants' It is ;#r4 l#ar in t/# 8ro9issor4 not# t/at t/# 8rini8al obligation is t/# balan# o t/# 83r/as# 8ri# o t/# 8ar#l o land Dno@n as Lot 6( (.(C< Psd(.7%,1< @/i/ is t/# s39 o P0<***'**< and in t/# s3r#t4 bond< t/# L3on S3r#t4 Co'< In' 3nd#rtooD Qto 8a4 t/# a9o3nt o P0<***'** r#8r#s#nting balan# o t/# 83r/as# 8ri# o a 8ar#l o land Dno@n as Lot 6((.(C< Psd(.7%,1< ' ' 'Q T/# a88#ll## did not 8rot#st nor ob#t @/#n it a#8t#d t/# 8a49#nt o P0<***'** b#a3s# it Dn#@ t/at @as t/# o98l#t# a9o3nt 3nd#rtaD#n b4 t/# s3r#t4 as a88#aring in t/# ontrat' T/# liabilit4 o a s3r#t4 is not #t#nd#d< b4 i98liation< b#4ond t/# t#r9s o /is ontrat' It is or t/# sa9# r#ason t/at t/# a88#ll## annot a88l4 a 8art o t/# P0<***'** as 8a49#nt or t/# ar3#d int#r#st' A88#llants ar# r#l4ing on Artil# %.01 o t/# Ci;il Cod#< b3t t/# r3l#s ontain#d in Artil#s %.0. to %.0) o t/# Ci;il Cod# a88l4 to a 8#rson o@ing s#;#ral d#bts o t/# sa9# Dind o a singl# r#ditor' T/#4 annot b# 9ad# a88liabl# to a 8#rson @/os# obligation as a 9#r# s3r#t4 is bot/ onting#nt and sing3lar/is liabilit4 is onin#d to s3/ obligation< and /# is #ntitl#d to /a;# all 8a49#nts 9ad# a88li#d #l3si;#l4 to said a88liation and to no ot/#r' B#sid#s< Artil# %.01 o t/# Ci;il Cod# is 9#r#l4 dir#tor4< and not 9andator4' Inas93/ as t/# a88#ll## annot 8rot#st or non(8a49#nt o t/# int#r#st @/#n it a#8t#d t/# a9o3nt o P0<***'** ro9 t/# L3on S3r#t4 Co'< In'< nor a88l4 a 8art o t/at a9o3nt as 8a49#nt or t/# int#r#st< @# annot no@ sa4 t/at t/#r# @as a @ai;#r or ondonation on t/# int#r#st d3#' It is lai9#d t/at t/#r# @as a no;ation andor 9odiiation o t/# obligation o t/# a88#llants in a;or o t/# a88#ll## b#a3s# t/# a88#ll## a#8t#d @it/o3t r#s#r;ation t/# s3bs#3#nt agr##9#nt s#t ort/ in t/# s3r#t4 bond d#s8it# its ail3r# to 8ro;id# t/at it also g3arant##d 8a49#nt o ar3ing int#r#st' T/# r3l# is s#ttl#d t/at no;ation b4 8r#s398tion /as n#;#r b##n a;or#d' To b# s3stain#d< it n##ds to b# #stablis/#d t/at t/# old and n#@ ontrats ar# ino98atibl# in all 8oints< or t/at t/# @ill to no;at# a88#ars b4 #8r#ss agr##9#nt o t/# 8arti#s or in ats o si9ilar i98ort' T/# r3l#s ontain#d in Arts' %.0. and %.0) o t/# Ci;il Cod# a88li#s to a 8#rson o@ing s#;#ral d#bts o t/# sa9# Dind o a singl# r#ditor' T/#4 annot b# 9ad# a88liabl# to a 8#rson @/os# obligation as a 9#r# s3r#t4 is bot/ onting#nt and sing3lar- /is liabilit4 is onin#d to s3/ Pag# $ %7*
Obligations and Contrats! "otrin#s and Cas# "ig#sts
obligation< and /# is #ntitl#d to /a;# all 8a49#nts 9ad# a88li#d #l3si;#l4 to said a88liation and to no ot/#r' B#sid#s Art' %.01 o t/# Ci;il Cod# is 9#r#l4 dir#tor4< and not 9andator4
T7E BAC7RAC7 GARAGE AND TAICAB CO. >INC.1 %s. GOLINGCO &G'R' No' %167%' 23l4 %.< %,%,'5
AEA>CIA, J.: )ACTS! T/is as# is bro3g/t or t/# r#o;#r4 o a s39 o 9on#4' T/r## a3s#s o ation ar# all#g#d' B4 t/# irst a3s# o ation< t/# 8lainti lai9s t/# a9o3nt o P6<0+1',1 @it/ int#r#sts t/#r#on ro9 "##9b#r %)t/ t/# 4#ar not b#ing 9#ntion#d t/#r#in< till t/# dat# it is 3ll4 8aid in addition to t/# .0 8#r #nt o t/# total a9o3nt' B4 t/# s#ond a3s# o ation< /# lai9s t/# a9o3nt o P%<*0,'%6 @it/ int#r#sts t/#r#on 3ntil 3ll4 8aid 8l3s t/# .0 8#r #nt o t/# total a9o3nt- b4 t/# t/ird a3s# o ation< t/# a9o3nt o P%<01)'60 @it/ l#gal int#r#sts t/#r#on' T/# lo@#r o3rt r#nd#r#d 3dg9#nt s#nt#ning t/# d##ndant< or t/# irst a3s# o ation< to 8a4 t/# a9o3nt o P6<0+1',1 @it/ %* 8#r#nt int#r#st t/#r#on ro9 2an3ar4 %,< %,%6< 8l3s %. %. 8#r#nt on t/# said a9o3nt- or t/# s#ond a3s# o ation P%<*0,'%6 @it/ t/# sa9# int#r#st ro9 t/# said dat# 8l3s %. %. 8#r#nt on t/# sa9# a9o3nt- or t/# t/ird< P%0)'60 @it/ l#gal int#r#st ro9 2an3ar4 %,< %,%6' Fro9 t/is 3dg9#nt< t/# d##ndant a88#al#d'
ISS/E! W/#t/#r< as all#g#d b4 t/# d##ndant< t/# 8a49#nt o P6<*** @/i/ a88#ars in E/ibit % is on t/# ao3nt o t/# 8ro9issor4 not# or P+<60*X
R/LING! H# @/o o@#s s#;#ral d#bts o t/# sa9# Dind to a singl# r#ditor 9a4 d#lar#< at t/# ti9# o 9aDing a 8a49#nt< to @/i/ o t/#9 it is to b# a88li#d' Artil# %%6. Ci;il Cod#' I< in 9aDing 3s# o t/is rig/t< t/# d##ndant a88li#d t/# 8a49#nt o P6<*** to a d#bt< /# annot lai9 t/at it b# a88li#d to anot/#r d#bt'
T7E CO##ON3EALT7 O) T7E 7ILIINES %s . T7E )AR EASTERN S/RET: INS/RANCE CO#AN: &G'R' No' L(,6,' A8ril %1< %,),'5
KI><">, J: Pag# $ %7%
Obligations and Contrats! "otrin#s and Cas# "ig#sts
)ACTS! On A3g3st .* and Otob#r %< %,10< t/# Vda' d# Ti3 S#ng and Tan iang< a soi#dad #n o9andita< as 8rini8al and t/# Far East#rn S3r#t4 Ins3ran# Co'< In'< as s3r#t4 ##3t#d t@o bonds b4 @/i/ t/#4 bo3nd t/#9s#l;#s ointl4 and s#;#rall4 to 8a4 t/# go;#rn9#nt t/# s39 o P%*<*** @/i/ @as t/# a9o3nt d3# ro9 Ti3 S#ng or t/# saD# o br#;it4 @# s/all 3s# t/# na9# Ti3 S#ng or t/# Vda' d# Ti3 S#ng and Tan iang as int#rnal r#;#n3# ta#s and s3r/arg#' T/#s# bonds @#r# il#d b#or# t/# ind#bt#dn#ss @as a3rat#l4 as#rtain#d' It @as at#r@ards o3nd b4 t/# Coll#tor o Int#rnal R#;#n3# t/at t/# a9o3nt d3# ro9 Ti3 S#ng @as P1*<0%.'7)' "#9and or 8a49#nt o t/is a9o3nt @as 9ad#< b3t @it/o3t s3#ss' Ho@#;#r< a o98ro9is# @as ##t#d on No;#9b#r 7< %,17< b4 @/i/ t/# ta d3# @as r#d3#d to P%.<+6)'%6 Paid P.<+6)'%6 on 2an3ar4 1*< %,16< and t/# balan# o P%*<*** on 9ont/l4 8a49#nts o P0** #a/< b#ginning F#br3ar4 %6< %,16' Finall4< it @as agr##d t/at t/# 8a49#nt b# 9ad# as ollo@s! P.<+6)'%6 on 2an3ar4 .*< %,16 and t/# balan# o P%*<*** @it/in a 8#riod o %* 9ont/s at t/# rat# o P%<*** 8#r 9ont/' Und#r t/is agr##9#nt< Ti3 S#ng /as 8aid t/# Coll#tor t/# total a9o3nt o P%%<7))'%. l#a;ing a balan# o P%<.1*'*0< t/# a9o3nt @/i/ t/# 8lainti no@ s##Ds to r#o;#r ro9 t/# d##ndant< t/# Far East#rn S3r#t4 Ins3ran# Co'< In'
ISS/E! W/#t/#r said s39 o P%<.1*'*0 is o;#r#d b4 t/# t@o bonds abo;# 9#ntion#dX
R/LING! Wit/in t/# ra9#@orD o t/# abo;# stat#9#nt o ats attorn#4 or a88#llant ;igoro3sl4 arg3#s t/# 8ro8osition t/at it 9#r#l4 g3arant##d t/# 8a49#nt o P%*<*** to t/# Co99on@#alt/ o t/# P/ili88in#s no@ t/# R#83bli< @it/o3t 3nd#rtaDing to 8a4 an4 balan# o t/# obligation o t/# 8rini8al d#btor< and t/at at#r s3/ s39 /ad b##n 3ll4 satisi#d< as in t/is as#< it /ad no 3rt/#r liabilit4' It is an ad9itt#d ir39stan# t/at Tin S#ng /ad d#li;#r#d< at#r t/# ##3tion o t/# bonds< t/# total a9o3nt o P%%<7))'%. to t/# B3r#a3 o Int#rnal R#;#n3#' It 93st b# obs#r;#d< /o@#;#r< at t/is 3nt3r# t/at t/# trial 3dg# 38/#ld t/# 8laintiKs ont#ntion t/at t/# a9o3nts 8aid s/o3ld b# a88li#d irst to t/# 3ns#3r#d 8ortion o Tin S#ngKs liabilit4< t/3s l#a;ing 3n8aid and o;#r#d b4 t/# bonds t/# s39 o P%<.1*'*0< @/i/ 9a4 l#gall4 b# oll#t#d ro9 d##ndant as a solidar4 s3r#t4' A88#llantKs 8ro8osition< @/i/ is t/# r3 o t/is a88#al< @o3ld 3ndo3bt#dl4 b# 3nassailabl# /ad all t/# 8a49#nts b##n 9ad# s8#iiall4 on ao3nt o t/# d#bt s#3r#d b4 t/# bond' B3t alt/o3g/ it is agr##d t/at t/# 8a49#nts @#r# 9ad# on ao3nt o ta#s t/#r# is no 8roo as to t/# i983tation t/#r#o' T/is 8oint is d#isi;#- or< in ##t Ti3 S#ng /ad t@o liabiliti#s to t/# Co99on@#alt/! on# or t/# s39 not o;#r#d b4 t/# bonds and anot/#r or t/# s39 s#3r#d t/#r#b4' Par#nt/#tiall4 it s/o3ld b# obs#r;#d t/at 3nd#r t/# la@ artil# %+.7< Ci;il Cod# t/# obligation o t/# g3arantor 9a4 b# l#ss t/an t/at o t/# 8rini8al'
Pag# $ %7.
Obligations and Contrats! "otrin#s and Cas# "ig#sts
-. A:#ENT B: CESSION >ART. &-++1 0S. DATION IN A:#ENTDACION EN AGO >ART. &-5+1 A. @INDS O) A:#ENT B: CESSION B. DATION IN A:#ENT AND A:#ENT B: CESSION DISTING/IS7ED (. TENDER O) A:#ENT AND CONSIGNATION ' ARTS. &-+ TO &-& A. SECIAL RE/ISITES O) CONSIGNATION DALTON %s. )GR REALT: AND DE0ELO#ENT CORORATION &G'R' No' %6.066' 2an3ar4 %,< .*%%'5
CA45)", J.: )ACTS? P#tition#r "alton< Cl#9#nt# Sasa9< Ro93lo Villalonga< :ig3#la Villar#nt#< Ani#ta F3#nt#s< P#rla Por9#nto< Boniaio Cabaar< Car9#nita Y3son< Ang#l Pon#< P#dro R#g3do< P#dro >3#b#do< :ar4 Cabanlit< :ariana Enabo and "olor#s Li9 Sasa9< #t al' l#as#d 8ortions o t/# 8ro8#rt4' In 23n# %,+0< "a4rit sold t/# 8ro8#rt4 to r#s8ond#nt FGR R#alt4 and "#;#lo89#nt Cor8oration FGR' In A3g3st %,+0< "a4rit and FGR sto88#d a#8ting r#ntal 8a49#nts b#a3s# t/#4 @ant#d to t#r9inat# t/# l#as# agr##9#nts @it/ "alton and Sasa9< #t al' In a o98laint dat#d %% S#8t#9b#r %,+0< "alton and Sasa9< #t al' onsign#d t/# r#ntal 8a49#nts @it/ t/# RTC' T/#4 ail#d to noti4 "a4rit and FGR abo3t t/# onsignation' In 9otions dat#d .6 :ar/ %,+6< %* No;#9b#r %,+6< + 23l4 %,++< and .+ No;#9b#r %,,)< "a4rit and FGR @it/dr#@ t/# r#ntal 8a49#nts' In t/#ir 9otions< "a4rit and FGR r#s#r;#d t/# rig/t to 3#stion t/# ;alidit4 o t/# onsignation' "a4rit< FGR and Sasa9< #t al' #nt#r#d into o98ro9is# agr##9#nts dat#d .0 :ar/ %,,6 and .* 23n# %,,6' In t/# o98ro9is# agr##9#nts< t/#4 agr##d to abandon all lai9s against #a/ ot/#r' "alton did not #nt#r into a o98ro9is# agr##9#nt @it/ "a4rit and FGR'
ISS/E! W/#t/#r t/# onsignation @as ;oidX
R/LING! T/# 8#tition is 3n9#ritorio3s' "alton lai9s t/at< Qt/# iss3# as to @/#t/#r t/# onsignation 9ad# b4 t/# 8#tition#r is ;alid or not or laD o noti# /as alr#ad4 b##n r#nd#r#d 9oot and aad#9i @it/ t/# @it/dra@al b4 t/# 8ri;at# r#s8ond#nts o t/# a9o3nts onsign#d and d#8osit#d b4 t/# 8#tition#r as r#ntal o t/# s3b#t 8r#9is#s'Q Pag# $ %71
Obligations and Contrats! "otrin#s and Cas# "ig#sts
T/# Co3rt is not i98r#ss#d' First< in @it/dra@ing t/# a9o3nts onsign#d< "a4rit and FGR #8r#ssl4 r#s#r;#d t/# rig/t to 3#stion t/# ;alidit4 o t/# onsignation' In Ri#s#nb#D ;' Co3rt o A88#als< t/# Co3rt /#ld t/at! A s#ns3 ontrario< @/#n t/# r#ditorKs a#8tan# o t/# 9on#4 onsign#d is onditional and @it/ r#s#r;ations< /# is not d##9#d to /a;# @ai;#d t/# lai9s /# r#s#r;#d against /is d#btor' T/3s< @/#n t/# a9o3nt onsign#d do#s not o;#r t/# #ntir# obligation< t/# r#ditor 9a4 a#8t it< r#s#r;ing /is rig/t to t/# balan# Tol#ntino< Ci;il Cod# o t/# P/il'< Vol' IV< %,61 Ed'< 8' 1%6< iting 1 Ll#r#na .71' T/# sa9# at3al 9ili#3 obtains /#r# b#a3s# t/# r#s8ond#nt r#ditor a#8t#d @it/ r#s#r;ation t/# a9o3nt onsign#d ro9 raising /is ot/#r lai9s< as /# did in /is ans@#r @it/ s8#ial d##ns#s and o3nt#rlai9 against 8#tition#r(d#btor' As r#s8ond#nt(r#ditorKs a#8tan# o t/# a9o3nt onsign#d @as @it/ r#s#r;ations< it did not o98l#t#l4 #ting3is/ t/# #ntir# ind#bt#dn#ss o t/# 8#tition#r(d#btor' It is a88osit# to not# /#r# t/at onsignation is o98l#t#d at t/# ti9# t/# r#ditor a#8ts t/# sa9# @it/o3t ob#tions< or< i /# ob#ts< at t/# ti9# t/# o3rt d#lar#s t/at it /as b##n ;alidl4 9ad# in aordan# @it/ la@' E98/asis s388li#d S#ond< o98lian# @it/ t/# r#3isit#s o a ;alid onsignation is 9andator4' Fail3r# to o98l4 stritl4 @it/ an4 o t/# r#3isit#s @ill r#nd#r t/# onsignation ;oid' S3bstantial o98lian# is not #no3g/' In Ins3lar Li# Ass3ran# Co98an4< Ltd' ;' To4ota B#l(Air< In' < t/# Co3rt #n39#rat#d t/# r#3isit#s o a ;alid onsignation! % a d#bt d3#- . t/# r#ditor to @/o9 t#nd#r o 8a49#nt @as 9ad# r#3s#d @it/o3t 3st a3s# to a#8t t/# 8a49#nt< or t/# r#ditor @as abs#nt< 3nDno@n or ina8aitat#d< or s#;#ral 8#rsons lai9#d t/# sa9# rig/t to oll#t< or t/# titl# o t/# obligation @as lost- 1 t/# 8#rson int#r#st#d in t/# 8#ror9an# o t/# obligation @as gi;#n noti# b#or# onsignation @as 9ad#- ) t/# a9o3nt @as 8la#d at t/# dis8osal o t/# o3rt- and 0 t/# 8#rson int#r#st#d in t/# 8#ror9an# o t/# obligation @as gi;#n noti# at#r t/# onsignation @as 9ad#'
B. 37EN TENDER NOT NECESSAR: * -ND ARAGRA7 O) ART. &-+ C. LOSS O) T7E T7ING D/E * ARTS. &-- TO &-9 I. DE)INITION * ART. &&49 >-1 II. LOSS IN OBLIGATION TO DO * ART. &- III. T7EOR: O) I#RE0ISIBILIT: >)R/STRATION O) ENTERRISE1 * ART. &-2
Pag# $ %7)
Obligations and Contrats! "otrin#s and Cas# "ig#sts
OCCEFA %s. JABSON &G'R' No' L())1),' Otob#r .,< %,67'5
TII3A>RII, J: )ACTS! On i
F#br3ar4 .0< %,60 8ri;at# r#s8ond#nt Tro8ial Ho9#s< In'il#d a o98laint or 9od iation o t/# t#r9s and onditions o its s3bdi;ision ontrat @it/ 8#tition#rs lando@n#rs o a 00<11* s3ar# 9#t#r 8ar#l o land in "a;ao Cit4< Und#r t/# s3bdi;ision ontrat< r#s8ond#nt Qg3arant##d 8#tition#rs as lando@n#rs as t/# latt#rKs #d and sol# s/ar# and 8artii8ation an a9o3nt #3i;al#nt to ort4 )* 8#r #nt o all as/ r##i8ts ro9 t/# sal# o t/# s3bdi;ision lotsQ' R#s8ond#nt 8ra4#d o t/# Rial o3rt o rst instan# t/at Qat#r d3# trial< t/is Honorabl# Co3rt r#nd#r 3dg9#nt 9odi4ing t/# t#r9s and onditions o t/# ontrat ' ' ' b4 iing t/# 8ro8#r s/ar#s t/at s/o3ld 8#rtain to t/# /#r#in 8arti#s o3t o t/# gross 8ro##ds ro9 t/# sal#s o s3bdi;id#d lots o s3b#t s3bdi;isionQ P#tition#rs 9o;#d to dis9iss t/# o98laint 8rini8all4 or laD o a3s# o ation< and 38on d#nial t/#r#o and o r#onsid#ration b4 t/# lo@#r o3rt #l#;at#d t/# 9att#r on #rtiorari to r#s8ond#nt Co3rt o A88#als' R#s8ond#nt o3rt in its 3#stion#d r#sol3tion o 23n# .+< %,67 s#t asid# t/# 8r#li9inar4 in3ntion 8r#;io3sl4 iss3#d b4 it and dis9iss#d 8#tition on t/# gro3nd t/at 3nd#r Artil# %.76 o t/# Ci;il Cod# @/i/ 8ro;id#s t/at' QART' %.76' W/#n t/# s#r;i# /as b#o9# so dii3lt as to b# 9ani#stl4 b#4ond t/# ont#98lation o t/# 8arti#s< t/# obligor 9a4 also b# r#l#as#d t/#r#ro9< in @/ol# or in 8art'Q Q' ' ' a 8ositi;# rig/t is r#at#d in a;or o t/# obligor to b# r#l#as#d ro9 t/# 8#ror9an# o an obligation in 3ll or in 8art @/#n its 8#ror9an# K/as b#o9# so dii3lt as to b# 9ani#stl4 b#4ond t/# ont#98lation o t/# 8arti#sK'Q
ISS/E! W/#t/#r or not Art' %.76 is a88liabl#X
R/LING! T/# 8#tition 93st b# grant#d' Pag# $ %70
Obligations and Contrats! "otrin#s and Cas# "ig#sts
W/il# r#s8ond#nt o3rt orr#tl4 it#d in its d#ision t/# Cod# Co99issionKs r#8ort gi;ing t/# rational# or Artil# %.76 o t/# Ci;il Cod#< to @it! QT/# g#n#ral r3l# is t/at i98ossibilit4 o 8#ror9an# r#l#as#s t/# obligor' Ho@#;#r< it is s3b9itt#d t/at @/#n t/# s#r;i# /as b#o9# so dii3lt as to b# 9ani#stl4 b#4ond t/# ont#98lation o t/# 8arti#s< t/# o3rt s/o3ld b# a3t/ori#d to r#l#as# t/# obligor in @/ol# or in 8art' T/# int#ntion o t/# 8arti#s s/o3ld go;#rn and i it a88#ars t/at t/# s#r;i# t3rns o3t to b# so dii3lt as /a;# b##n b#4ond t/#ir ont#98lation< it @o3ld b# doing ;iol#n# to t/at int#ntion to /old t/# obligor still r#s8onsibl#' ' ' '
I0. 37O BEARS T7E RIS@ O) LOSS * ARTS. &--, &-9, &&49 &. SEE ALSO ARTS. &+65, &++, &2&2 AND &&9& D. CONDONATION OR RE#ISSION O) DEBT * ARTS. &-26 TO &-25 E. CON)/SION OR #ERGER * ARTS. &-2+ TO &-22 ). CO#ENSATION * ARTS. &-24 TO &-96 I. @INDS O) CO#ENSATION Pag# $ %77
Obligations and Contrats! "otrin#s and Cas# "ig#sts
II. RE/ISITES )OR LEGAL CO#ENSATION * ART. &-29 III. 37EN CO#ENSATION NOT ROER * ART. &-42 AND &-44 )RANCIA %s. INTER#EDIATE AELLATE CO/RT &G'R' No' 767),' 23n# .+< %,++'5
@)TI44I<, J4 )ACTS? Engraio Frania is t/# r#gist#r#d o@n#r o a r#sid#ntial lot and a t@o(stor4 /o3s# b3ilt 38on it sit3at#d at Barrio San Isidro< no@ "istrit o Sta' Clara< Pasa4 Cit4< :#tro :anila' T/# lot< @it/ an ar#a o abo3t 1.+ s3ar# 9#t#rs< is d#srib#d and o;#r#d b4 TCT No' )61, 166,0 o t/# R#gistr4 o "##ds o Pasa4 Cit4' On Otob#r %0< %,66< a %.0 s3ar# 9#t#r 8ortion o FraniaKs 8ro8#rt4 @as #8ro8riat#d b4 t/# R#83bli o t/# P/ili88in#s or t/# s39 o P)<%%7'** r#8r#s#nting t/# #sti9at#d a9o3nt #3i;al#nt to t/# ass#ss#d ;al3# o t/# aor#said 8ortion' Sin# %,71 38 to %,66 inl3si;#< Frania ail#d to 8a4 /is r#al #stat# ta#s' T/3s< on "##9b#r 0< %,66< /is 8ro8#rt4 @as sold at 83bli a3tion b4 t/# Cit4 Tr#as3r#r o Pasa4 Cit4 83rs3ant to S#tion 61 o Pr#sid#ntial "#r## No' )7) Dno@n as t/# R#al Pro8#rt4 Ta Cod# in ord#r to satis4 a ta d#lin3#n4 o P.<)**'**' Ho F#rnand# @as t/# /ig/#st bidd#r or t/# 8ro8#rt4 Frania @as not 8r#s#nt d3ring t/# a3tion sal# sin# /# @as in Iligan Cit4 at t/at ti9# /#l8ing /is 3nl# s/i8 bananas' On :ar/ 1< %,6,< Frania r##i;#d a noti# o /#aring o LRC Cas# No' %0,1(P QIn r#! P#tition or Entr4 o N#@ C#rtiiat# o Titl#Q il#d b4 Ho F#rnand#< s##Ding t/# an#llation o TCT No' )61, 166,0 and t/# iss3an# in /is na9# o a n#@ #rtiiat# o titl#' U8on ;#riiation t/ro3g/ /is la@4#r< Frania diso;#r#d t/at a Final Bill o Sal# /ad b##n iss3#d in a;or o Ho F#rnand# b4 t/# Cit4 Tr#as3r#r on "##9b#r %%< %,6+' T/# a3tion sal# and t/# inal bill o sal# @#r# bot/ annotat#d at t/# baD o TCT No' )61, 166,0 b4 t/# R#gist#r o "##ds' On :ar/ .*< %,6,< Frania il#d a o98laint to ann3l t/# a3tion sal#' H# lat#r a9#nd#d /is o98laint on 2an3ar4 .)< %,+*'
ISS/E! W/#t/#r r#s8ond#nt int#r9#diat# a88#llat# o3rt o99itt#d a gra;# #rror o la@ in not /olding t/at 8#tition#rKs obligation to 8a4 P.<)**'** or s388os#d ta d#lin3#n4 @as s#t(o b4 t/# a9o3nt o 8)<%%7'** @/i/ t/# go;#rn9#nt is ind#bt#d to t/# or9#rX
R/LING! Pag# $ %76
Obligations and Contrats! "otrin#s and Cas# "ig#sts
W# ga;# d3# o3rs# to t/# 8#tition or a 9or# t/oro3g/ in3ir4 into t/# 8#tition#rKs all#gations t/at /is 8ro8#rt4 @as sold at 83bli a3tion @it/o3t noti# to /i9 and t/at t/# 8ri# 8aid or t/# 8ro8#rt4 @as s/oDingl4 inad#3at#< a9o3nting to ra3d and d#8ri;ation @it/o3t d3# 8ro#ss o la@' A ar#3l r#;i#@ o t/# as#< /o@#;#r< dislos#s t/at :r' Frania bro3g/t t/# 8robl#9s rais#d in /is 8#tition 38on /i9s#l' W/il# @# o99is#rat# @it/ /i9 at t/# loss o /is 8ro8#rt4< t/# la@ and t/# ats 9ilitat# against t/# grant o /is 8#tition' W# ar# onstrain#d to dis9iss it' Frania ont#nds t/at /is ta d#lin3#n4 o P.<)**'** /as b##n #ting3is/#d b4 l#gal o98#nsation' H# lai9s t/at t/# go;#rn9#nt o@#d /i9 P)<%%7'** @/#n a 8ortion o /is land @as #8ro8riat#d on Otob#r %0< %,66' H#n#< /is ta obligation /ad b##n s#t(o b4 o8#ration o la@ as o Otob#r %0< %,66' T/#r# is no l#gal basis or t/# ont#ntion' B4 l#gal o98#nsation< obligations o 8#rsons< @/o in t/#ir o@n rig/t ar# r#i8roall4 d#btors and r#ditors o #a/ ot/#r< ar# #ting3is/#d Art' %.6+< Ci;il Cod#' T/# ir39stan#s o t/# as# do not satis4 t/# r#3ir#9#nts 8ro;id#d b4 Artil# %.6,< to @it! Q% t/at #a/ on# o t/# obligors b# bo3nd 8rini8all4 and t/at /# b# at t/# sa9# ti9# a 8rini8al r#ditor o t/# ot/#r Q1 t/at t/# t@o d#bts b# d3#' T/is 8rini8al ont#ntion o t/# 8#tition#r /as no 9#rit' W# /a;# onsist#ntl4 r3l#d t/at t/#r# an b# no o(s#tting o ta#s against t/# lai9s t/at t/# ta8a4#r 9a4 /a;# against t/# go;#rn9#nt' A 8#rson annot r#3s# to 8a4 a ta on t/# gro3nd t/at t/# go;#rn9#nt o@#s /i9 an a9o3nt #3al to or gr#at#r t/an t/# ta b#ing oll#t#d' T/# oll#tion o a ta annot a@ait t/# r#s3lts o a la@s3it against t/# go;#rn9#nt'
G. NO0ATION * ARTS. &-9& TO &(65 I. @INDS? ETINCTI0E AND #ODI)ICATOR: &. ETINCTI0E A. RE/ISITES O) ETINCTI0E NO0ATION B. S/BSTIT/TION O) DEBTORS * ARTS. &-9( AND &-9+ C. ERO#ISSION * ART. &-95 D. DELEGACION * ART. &-9+ E. S/BROGATION * ART. &(66 TO &(65 I. LEGAL * ART. &(6II. CON0ENTIONAL * ART. &(6& Pag# $ %7+
Obligations and Contrats! "otrin#s and Cas# "ig#sts
-. #ODI)ICATOR:
:O/NG %. CA &G'R' No' 6,0%+ 2an3ar4 %1< %,+,5
)ACTS! T/# "##ndant P/ili88in# Holding< In' is t/# or9#r o@n#r o a 8i## o land loat#d at Sol#r St'< Sta' Cr3< :anila< and a t@o stor#4 b3ilding #r#t#d t/#r#on< onsisting o si 3nits' T/# o@n#r P/ili88in# Holding< In' s#3r#d an ord#r ro9 t/# Cit4 Engin##r o :anila to d#9olis/ t/# b3ilding' Antonio Yo3ng< t/#n a t#nant o said Unit %10.< il#d an ation to ann3l t/# Cit4 Engin##rKs d#9olition As an inid#nt in said as#< t/# 8arti#s s3b9itt#d a Co98ro9is# Agr##9#nt to t/# Co3rt' Paragra8/ 1 o said agr##9#nt 8ro;id#s t/at 8lainti Antonio S' Yo3ng and R#b#a Yo3ng and all 8#rsons lai9ing rig/ts 3nd#r t/#9 bind t/#9s#l;#s to ;ol3ntaril4 and 8#a#3ll4 ;aat# t/# 8r#9is#s @/i/ t/#4 @#r# o384ing as l#ss##s @/i/ ar# t/# s3b#t o t/# ond#9nation and d#9olition ord#r and to s3rr#nd#r 8oss#ssion ' A as# @as il#d to t/# RTC and Yo3ng ont#nd#d t/at #;#n ass39ing t/at /#r s388os#d rig/t o irst r#3sal is a sti83lation or t/# b#n#it o a t/ird 8#rson< s/# did not inor9 t/# obligor o /#r a#8tan# as r#3ir#d b4 t/# s#ond 8aragra8/ o Artil# %1%% o t/# Ci;il Cod#'
ISS/E! W/#t/#r or not Yo3ngs sti83lation t/at ga;# /#r t/# rig/t o r#3sal is a sti83lation 8o3r a3tr3i'
R/LING! T/# sti83lation t/at 4o3ng ga;# 9a4 b# a sti83lation 8o3r a3tr3i b3t it is 3nr#b3tt#d t/at s/# did not o993niat# /#r a#8tan# @/#t/#r #8r#ssl4 or i98li#dl4' T/# r#3isit#s o a sti83lation pour autrui or a sti83lation in a;or o a t/ird 8#rson ar# t/# ollo@ing! % t/#r# 93st b# a sti83lation in a;or o a t/ird 8#rson . t/# sti83lation 93st b# a 8art< not t/# @/ol# o t/# ontrat 1 t/# ontrating 8arti#s 93st /a;# l#arl4 and d#lib#rat#l4 on#rr#d a a;or 38on a t/ird 8#rson< not a 9#r# inid#ntal b#n#it or int#r#st ) t/# t/ird 8#rson 93st /a;# o993niat#d /is a#8tan# to t/# obligor b#or# its r#;oation' 0 n#it/#r o t/# ontrating 8arti#s b#ars t/# l#gal r#8r#s#ntation or a3t/oriation o t/# t/ird 8art4' T/# arg39#nt is 8ointl#ss< onsid#ring t/at t/# sal# o s3b#t 8ro8#rt4 to so9# ot/#r 8#rson or #ntit4 onstit3t#s in ##t a r#;oation o t/# grant o t/# rig/t o irst r#3sal to R#b#a C' Yo3ng'
Pag# $ %7,
Obligations and Contrats! "otrin#s and Cas# "ig#sts
7ERNANDE;'NIE0ERA %s. 7ERNANDE; &G'R' No' %6%%70' F#br3ar4 %)< .*%%'5
5I4A%TA, J: )ACTS! Pro#t :o;#rs R#alt4 "#;#lo89#nt Cor8oration P:R"C< on# o t/# r#s8ond#nts /#r#in< is a d3l4 organi#d do9#sti or8oration #ngag#d in r#al #stat# d#;#lo89#nt' So9#ti9# in %,,0< it #nt#r#d t/ro3g/ its 8r#sid#nt< r#s8ond#nt :ario Villa9or Villa9or< into ;ario3s agr##9#nts @it/ o(r#s8ond#nts Ho9# Ins3ran# G3arant4 Cor8oration HIGC and Land BanD o t/# P/ili88in#s LBP< in onn#tion @it/ t/# onstr3tion o t/# Isab#l Ho9#s /o3sing 8ro#t in Batangas and o t/# :on39#nto Plaa o99#rial and r#r#ation o98l# in Calooan Cit4' In its Ass#t Pool For9ation Agr##9#nt< P:R"C on;#4#d to HIGC t/# onstit3#nt ass#ts o t/# t@o 8ro#ts< @/#r#as LBP agr##d to at as tr3st## o t/# r#s3lting Ass#t Pool or a onsid#ration' T/# ##3tion o t/# 8ro#ts @o3ld b# 3nd#d larg#l4 t/ro3g/ s#3ritiation< a 9#t/od o so3ring d#;#lo89#nt 3nds b4 t/# iss3an# o 8artii8ation #rtiiat#s against t/# dir#t baDing ass#ts o t/# 8ro#ts< @/#r#b4 LBP @o3ld at as t/# no9inal iss3#r o s3/ #rtiiat#s @it/ t/# Ass#t Pool its#l ating as t/# r#al iss3#r' %* HIGC< in t3rn< @o3ld 8ro;id# g3arant4 o;#rag# to t/#s# 8artii8ation #rtiiat#s in aordan# @it/ its Contrat o G3arant4 @it/ P:R"C and LBP' On No;#9b#r %1< %,,6< P:R"C #nt#r#d into a :#9orand39 o Agr##9#nt :OA @/#r#b4 it @as gi;#n t/# o8tion to b34 8i##s o land o@n#d b4 8#tition#rs Carolina H#rnand#(Ni#;#ra Carolina< :argarita H' :al;ar :argarita and "#9#trio P' H#rnand#< 2r' "#9#trio' "#9#trio< 3nd#r a3t/orit4 o a S8#ial Po@#r o Attorn#4 to S#ll or :ortgag#< %. sign#d t/# :OA also in b#/al o Carolina and :argarita' In t/# aggr#gat#< t/# r#alt4 9#as3r#d )<0+*<)0% s3ar# 9#t#rs and @as s#gr#gat#d b4 agr##9#nt into Ar#a I and Ar#a II< r#s8#ti;#l4 8#rtaining to t/# 8ar#ls o;#r#d b4 Trans#r C#rtiiat# o Titl# TCT Nos' T(1%16< T(1%1+< T(1%1, and T( 1%)* on t/# on# /and< and on t/# ot/#r b4 TCT Nos' T(1%1.< T(1%11< T(1%1)< T(1%10 and T( 1%17< all
ISS/E? W/#t/#r or not no;ation tooD 8la#X
R/LING! T/# Co3rt d#ni#s t/# 8#tition' P#tition#rsK a3s# st#9s ro9 t/# ail3r# o P:R"C to r#stor# to 8#tition#rs t/# 8oss#ssion o t/# TCTs o t/# lands @it/in Ar#a II 38on its ail3r# to ##ris# t/# o8tion to 83r/as# @it/in t/# %.(9ont/ 8#riod sti83lat#d in t/# :OA' R#s8ond#nts 9aintain< /o@#;#r< t/at said obligation< d#8#nd#nt as it is on t/# ##ris# o t/# o8tion to 83r/as#< /as altog#t/#r b##n #8r#ssl4 oblit#rat#d b4 t/# t#r9s o t/# "AC @/#r#b4 8#tition#rs< t/ro3g/ "#9#trio as attorn#4(in(at< /a;# agr##d to no;at# t/# t#r9s o t/# :OA b4 #ting3is/ing t/# Pag# $ %6*
Obligations and Contrats! "otrin#s and Cas# "ig#sts
or# obligations o P:R"C on t/# 8a49#nt o o8tion 9on#4' T/is s##9s to s3gg#st t/at @it/ t/# ##3tion o t/# "AC< P:R"C /as alr#ad4 #nt#r#d into t/# ##ris# o its o8tion ##8t t/at its obligation to d#li;#r t/# o8tion 9on#4 /as< b4 s3bs#3#nt agr##9#nt #9bodi#d in t/# "AC< b##n s3bstit3t#d inst#ad b4 t/# obligation to iss3# 8artii8ation #rtiiat#s in "#9#trioKs na9# b3t @/i/< liD#@is#< /as not 4#t b##n 8#ror9#d b4 P:R"C' B3t 8#tition#rs stand against t/# ;alidit4 o t/# "AC on t/# gro3nd t/at t/# signat3r# o "#9#trio t/#r#in @as s83rio3s'
#ILLAR %s. CO/RT O) AEALS &G'R' No' L(.,,+%' A8ril 1*< %,6%'5
CAST4", J: )ACTS! :illar obtain#d a a;orabl# ond#9ning Antonio P' Gabri#l to 8a4 /i9 t/# s39 o P%<6)7',+ @it/ int#r#st at %. 8#r ann39 ro9 t/# dat# o t/# iling o t/# o98laint< t/# s39 o P)** as attorn#4Ks ##s< and t/# osts o s3it' T/# lo@#r o3rt iss3#d t/# @rit o ##3tion on t/# basis o @/i/ t/# s/#ri s#i#d t/# r#s8ond#ntKs Will4Ks Ford ##8' T/# r#s8ond#nt< /o@#;#r< 8l#ad#d @it/ t/# 8#tition#r to r#l#as# t/# ##8 3nd#r an arrang#9#nt @/#r#b4 t/# r#s8ond#nt< to s#3r# t/# 8a49#nt o t/# 3dg9#nt d#bt< agr##d to 9ortgag# t/# ;#/il# in a;or o t/# 8#tition#r' T/# 8#tition#r agr##d to t/# arrang#9#nt- t/3s< t/# 8arti#s ##3t#d a /att#l 9ortgag# on t/# ##8' R#sol3tion o t/# ontro;#rs4 8os#d b4 t/# 8#tition at bar /ing#s #ntir#l4 on a d#t#r9ination o @/#t/#r or not t/# s3bs#3#nt agr##9#nt o t/# 8arti#s as #9bodi#d in t/# d##d o /att#l 9ortgag# i98li#dl4 no;at#d t/# 3dg9#nt obligation'
ISS/E! W/#t/#r or not t/# s3bs#3#nt agr##9#nt o t/# 8arti#s as #9bodi#d in t/# d##d o /att#l 9ortgag# i98li#dl4 no;at#d t/# 3dg9#nt obligation in i;il as# .6%%7X
R/LING! No s3bstantial ino98atibilit4 b#t@##n t/# 9ortgag# obligation and t/# 3dg9#nt liabilit4 o t/# r#s8ond#nt s3ii#nt to 3sti4 a onl3sion o i98li#d no;ation' T/# sti83lation or t/# 8a49#nt o t/# obligation 3nd#r t/# t#r9s o t/# d##d o /att#l 9ortgag# s#r;#s onl4 to 8ro;id# an #8r#ss and s8#ii 9#t/od or its #ting3is/9#nt ? 8a49#nt in t@o #3al install9#nts' T/# /att#l 9ortgag# si98l4 ga;# t/# r#s8ond#nt a 9#t/od and 9or# ti9# to #nabl# /i9 to 3ll4 satis4 t/# 3dg9#nt ind#bt#dn#ss' T/# /att#l 9ortgag# agr##9#nt in no 9ann#r introd3#d an4 s3bstantial 9odiiation or alt#ration o t/# 3dg9#nt' Inst#ad o #ting3is/ing t/# obligation o t/# r#s8ond#nt arising ro9 t/# 3dg9#nt< t/# d##d o /att#l 9ortgag# #8r#ssl4 ratii#d and onir9#d t/# #ist#n# o t/# sa9#< a98li4ing onl4 t/# 9od# and 8#riod or o98lian# b4 t/# r#s8ond#nt'
Pag# $ %6%
Obligations and Contrats! "otrin#s and Cas# "ig#sts
T/# d##ns# o i98li#d no;ation r#3ir#s l#ar and on;ining 8roo o o98l#t# ino98atibilit4 b#t@##n t/# t@o obligations' T/# la@ r#3ir#s no s8#ii or9 or an ##ti;# no;ation b4 i98liation' T/# t#st is @/#t/#r t/# t@o obligations an stand tog#t/#r' I t/#4 annot< ino98atibilit4 aris#s< and t/# s#ond obligation no;at#s t/# irst' I t/#4 an stand tog#t/#r< no ino98atibilit4 r#s3lts and no;ation do#s not taD# 8la#'
#ACONDRA: CO., INC. %s. R/I; &G'R' No' ))76%' No;#9b#r .7< %,1+'5
)25I4)A%, J )a=ts? On 2an3ar4 .%< %,1. 8lainti sold to t/# d##ndant Antonio E' R3i an a3to9obil# Q"# Sotto "# L3# S#danQ or P<06.' T/#4 agr##d t/at d##ndant @o3ld 8a4 in as/ P1*. and or t/# balan# o P1<.6* /# @o3ld ##3t# s#;#ral 8ro9issor4 not#s in di#r#nt a9o3nts 9at3ring on di#r#nt dat#s' T/# d##ndant ##3t#d ointl4 @it/ on# Ra9on Borro9#o .6 8ro9issor4 not#s @/#r#in bot/ 3nd#rtooD to 8a4 ointl4 and s#;#rall4 t/# ;al3# o said not#s on t/# dat#s o t/#ir 9at3rit4' In addition< R3i 9ortgag#d t/# a3to9obil#< ##3ting t/# orr#s8onding d##d' R3i 9ad# so9# 8a49#nts on ao3nt o /is 8ro9issor4 not#s and /is ind#bt#dn#ss @as r#d3#d to P.<.)7'%+' On :ar/ %0< %,1) t/# 8arti#s agr##d to ##3t# anot/#r ontrat #l3ding Ra9on Borro9#o< @/#r#b4 R3i and anot/#r 8#rson @o3ld sign t/# 8ro9issor4 not#s or t/# balan#' Cons#3#ntl4< on said dat# R3i and t/# ot/#r d#andant< Ern#sto C3isia< sign#d anot/#r 8ro9issor4 not# @/#r#b4 t/#4 8ro9is#d ointl4 and s#;#rall4 to 8a4 t/# 8lainti t/# s39 o P.<.)7'%+ @it/ int#r#st t/#r#on at %. 8#r #nt 8#r ann39' In t/is latt#r ontrat t/# 8arti#s sti83lat#d t/at t/# 9ortgag# o t/# a3to9obil# @o3ld b# l#t to stand' R3i again 9ad# ot/#r 8a49#nts and /is ind#bt#dn#ss @as r#d3#d to P.'*++'+, 8l3s t/# int#r#st t/#r#on' As t/# d##ndants ail#d to 8a4 so9# o t/# install9#nts 38on t/#ir 9at3rit4< t/# 8lainti or#los#d t/# 9ortgag# and t/# s/#ri sold t/# a3to9obil# at 83bli a3tion< a@arding it to t/# 8lainti or t/# s39 o P0**' At#r t/# ao3nt o t/# d##ndants /ad b##n li3idat#d and t/# 8ro##ds o t/# 83bli sal# o t/# a3to9obil# tog#t/#r @it/ t/# #8#ns#s o t/# 8ro##ding /ad b##n d#d3t#d< it a88#ar#d t/at t/# d##ndants @#r# o@ing t/# 8lainti t/# s39 o P%<7,7'.*' In ord#r to r#o;#r t/is a9o3nt 8l3s t/# int#r#st t/#r#on and t/# 8#nalt4 agr##d 38on< t/# 8lainti bro3g/t t/is ation against t/# d##ndants' At#r trial t/# o3rt absol;#d t/# d##ndants ro9 t/# o98laint< @it/o3t osts' T/# 8lainti a88#al#d ro9 t/# d#ision and ti9#l4 il#d t/# bill o ##8tions @/i/ @as a88ro;#d and #rtii#d'
ISS/E! Pag# $ %6.
Obligations and Contrats! "otrin#s and Cas# "ig#sts
W/#t/#r t/# o3rt did o99it t/# all#g#d #rror< or it l#arl4 a88#ars t/at t/# irst ontrat @as s3bstit3t#d in its #ntir#t4 b4 t/# s#ond< b#a3s# t/# sti83lations ontain#d in t/# irst @#r# s3bstantiall4 alt#r#d b4 ot/#r sti83lations t/at @#r# ins#rt#d in t/# s#ondX
R/LING! T/# o3rt absol;#d t/# d##ndants b#a3s# in its o8inion t/# irst 9ortgag# and t/# 8ro9issor4 not#s sign#d b4 R3i and Ra9on Borro9#o on 2an3ar4 .%< %,1. @#r# s3bstit3t#d and no;at#d b4 t/# d##d ##3t#d b4 R3i and Ern#sto C3isia on :ar/ %)< %,1)< and b#a3s# on t/is latt#r dat# At No' )%.. @as alr#ad4 in or#< 3nd#r @/i/ t/# 8lainti annot 9aintain t/# 8r#s#nt ation or t/# r#o;#r4 ro9 t/# d##ndants o t/# balan# o@ing at#r it /ad #l#t#d to or#los# t/# 9ortgag#' In its irst assign9#nt o #rror 8lainti ont#nds t/at t/# o3rt #rron#o3sl4 a88li#d t/# la@ in onsid#ring as no;at#d t/# irst 9ortgag# and t/# 8ro9issor4 not#s @/i/ @#r# t/#n ##3t#d' W# /old t/at t/# o3rt did not o99it t/# all#g#d #rror< or it l#arl4 a88#ars t/at t/# irst ontrat @as s3bstit3t#d in its #ntir#t4 b4 t/# s#ond< b#a3s# t/# sti83lations ontain#d in t/# irst @#r# s3bstantiall4 alt#r#d b4 ot/#r sti83lations t/at @#r# ins#rt#d in t/# s#ond' Aording to artil# %.*1 o t/# Ci;il Cod# obligations ar# 9odii#d b4 alt#ring t/#ir ob#t or 8rini8al onditions< b4 s3bstit3ting anot/#r in 8la# o t/# d#btor< or b4 s3brogating a t/ird 8#rson to t/# rig/ts o t/# r#ditor- and artil# %.*) 8ro;id#s t/at in ord#r t/at an obligation 9a4 b# #ting3is/#d b4 anot/#r @/i/ s3bstit3t#s it< it s/all b# n##ssar4 t/at it b# so d#lar#d #8r#ssl4< or t/at t/# old and n#@ obligations b# ino98atibl# in #;#r4 r#s8#t In t/# irst ontrat t/# d#btors @#r# R3i and Borro9#o and t/#4 @#r# ans@#rabl# ointl4 and s#;#rall4 or t/# s39 o P1<.6*' In t/# s#ond ontrat t/# d#btors @#r# t/# sa9# R3i and Ern#sto C3isia and t/# a9o3nt or @/i/ t/#4 K@#r# liabl# @as onl4 P.<.)7'%+' In t/# latt#r ontrat t/# dat#s o t/# 9at3rit4 o t/# obligations @#r# /ang#d d3# to t/# la8s# o ti9# and to t/# 8artial 8a49#nts 9ad# b4 t/# or9#r d#btors' T/#s# ats s/o@ at a glan# t/at t/# irst ontrat @as in its t#r9s s3bstit3t#d b4 t/# s#ond< and t/at t/# latt#r is ino98atibl# @it/ t/# or9#r' Wit/ r#s8#t to t/# irst 9ortgag#< t/# 8rini8al obligation< onsisting o t/# 8r#;io3s ind#bt#dn#ss< /a;ing b##n #ting3is/#d< its t#r9s and onditions s/o3ld b# 3nd#rstood as s3b#t to t/os# o t/# ontrat s3bs#3#ntl4 #nt#r#d into'
INC7A/STI CO. %. :/LO &G'R' No' 66.%' :ar/ .0< %,%)'5
A44I%%A>". J: )ACTS? T/is s3it is bro3g/t or t/# r#o;#r4 o a #rtain s39 o 9on#4< t/# balan# o a 3rr#nt ao3nt o8#n#d b4 t/# ir9 o In/a3sti Co98an4 @it/ T#odoro Y3lo and at#r /is d#at/ ontin3#d @it/ /is @ido@ and /ildr#n< @/os# 8rini8al r#8r#s#ntati;# is Gr#gorio Y3lo' T#odoro Y3lo< a 8ro8#rt4 o@n#r o Iloilo< or t/# #8loitation and 3lti;ation o /is n39#ro3s /ai#ndas in t/# 8ro;in# o Oid#ntal N#gros< /ad b##n borro@ing 9on#4 ro9 t/# In/a3sti Co98an4 3nd#r s8#ii onditions' On A8ril ,< %,*1< T#odoro Y3lo di#d t#stat# and or t/# ##3tion o Pag# $ %61
Obligations and Contrats! "otrin#s and Cas# "ig#sts
t/# 8ro;isions o /is @ill /# /ad a88oint#d as ad9inistrators /is @ido@ and 0 o /is sons< Gr#gorio Y3lo b#ing on# o t/# latt#r' H# t/3s l#t a @ido@< Gr#goria R#galado< @/o di#d on Otob#r .. o t/# ollo@ing 4#ar< %,*)< t/#r# r#9aining o t/# 9arriag# t/# ollo@ing l#giti9at# /ildr#n! P#dro< Franiso< T#odoro< :an3#l< Gr#gorio< :ariano< Car9#n< Con#8tion< and 2os# Y3lo 4 R#galado' O t/#s# /ildr#n Con#8tion and 2os# @#r# 9inors< @/il# T#odoro @as 9#ntall4 ino98#t#nt' At t/# d#at/ o t/#ir 8r#d##ssor in int#r#st< T#odoro Y3lo< /is @ido@ and /ildr#n /#ld t/# on3gal 8ro8#rt4 in o99on and at t/# d#at/ o t/is said @ido@< Gr#goria R#galado< t/#s# /ildr#n 8r#s#r;#d t/# sa9# r#lations 3nd#r t/# na9# o Hios d# T' Y3lo ontin3ing t/#ir 3rr#nt ao3nt @it/ In/a3sti Co98an4 in t/# b#st and 9ost /ar9onio3s r#i8roit4 3ntil said balan# a9o3nt#d to t@o /3ndr#d t/o3sand 8#sos' In t/is stat# o aairs t/# r#ditor ir9 tri#dto obtain s#3rit4 or t/# 8a49#nt o t/# disb3rs#9#nts o 9on#4 @/i/ 3ntil t/at ti9# it /ad b##n 9aDing in a;or o its d#btors< t/# Y3los'
ISS/E? W/#t/#r t/# 8lainti an s3# Gr#gorio Y3lo alon#< t/#r# b#ing ot/#r ObligorsX
R/LING! W/#n t/# obligation is a solidar4 on#< t/# r#ditor 9a4 bring /is ation in toto against an4 o t/# d#btors obligat#d in solid39 and alt/o3g/ t/# r#ditor 9a4 /a;#< b4 9#ans o a s3bs#3#nt instr39#nt< o;#nant#d @it/ so9# o t/# solidar4 d#btors di#r#nt 8#riods o 8a49#nt and di#r#nt onditions< not on t/is ao3nt 9a4 it b# 3nd#rstood t/at t/# solidarit4 sti83lat#d in t/# 8r#;io3s instr39#nt /as b##n broD#n'
@ABAN@ALAN S/GAR CO., INC. %s. AC7ECO &G'R' No' 1170)' "##9b#r .,< %,1*'5
E)%%A(4IA%, J: )ACTS? 2os#a Pa/#o binds /#rs#l to aDno@l#dg# in a;or o t/# abanDalan S3gar Co'< In'< all t/# #as#9#nts @/i/ t/# abanDalan 9a4 onsid#r on;#ni#nt and n##ssar4 or its railroad on t/# HilabaZgan #stat# b#longing to t/# Pa/#o- t/# onl4 di#r#n#s b#ing t/at t/# t#r9 o t/# ontrat o No;#9b#r %< %,.*< is t@#nt4 4#ars< @/il# t/at o t/# ontrat #nt#r#d into on S#8t#9b#r .,< %,..< is s#;#n ro8s on# o t/# sti83lations o t/# ontrat'
ISS/E! W/#t/#r t/# ontrat o S#8t#9b#r .,< %,..< /as #ting3is/#d t/# ontrat o No;#9b#r %< %,.*< b4 no;ationX
R/LING! Pag# $ %6)
Obligations and Contrats! "otrin#s and Cas# "ig#sts
W/#n an #as#9#nt o rig/t @a4 is on# o t/# 8rini8al onditions o a ontrat< and t/# d3ration o said #as#9#nt is s8#ii#d< t/# r#d3tion o said 8#riod in a s3bs#3#nt ontrat< @/#r#in t/# sa9# obligation is on# o t/# 8rini8al onditions< onstit3t#s a no;ation and to t/at #t#nt #ting3is/#s t/# or9#r ontrat3al obligation' In t/# ontrat o No;#9b#r %< %,.*< t/# d3ration o t/# rig/t o @a4 @/i/ t/# d##ndant bo3nd /#rs#l to i98os# 38on /#r #stat# in a;or o t/# 8lainti @as t@#nt4 4#ars< @/il# in t/# ontrat o S#8t#9b#r .,< %,..< t/at 8#riod @as r#d3#d to s#;#n ro8s @/i/ is #3i;al#nt to s#;#n 4#ars' T/#r# an b# no do3bt t/at t/#s# t@o ontrats< in so ar as t/# d3ration o t/# rig/t o @a4 is on#rn#d< ar# ino98atibl# @it/ #a/ ot/#r< or t/# s#ond ontrat r#d3#s t/# 8#riod agr##d 38on in t/# irst ontrat< and so bot/ ontrats annot s3bsist at t/# sa9# ti9#' T/# d3ration o t/# rig/t o @a4 is on# o t/# 8rini8al onditions o t/# irst as @#ll as o t/# s#ond ontrat< and inas93/ as said 8rini8al ondition /as b##n 9odii#d< t/# ontrat /as b##n no;at#d< in aordan# @it/ t/# 8ro;ision 3ot#d abo;#'
B. CONCET * ART. &&+9 C. C7ARACTERISTICS >TENETS1 O) CONTRACTS? I. A/TONO#: * ART. &(6 BANCO )ILIINO SA0INGS AND #ORTGAGE BAN@ %s. NA0ARRO &G'R' No' L()70,%' 23l4 .+< %,+6'5
2I%I>C)"(3I44I4A, J: )ACTS! On :a4 .*< %,60< r#s8ond#nt Florant# d#l Vall# t/# BORROWER obtain#d a loan s#3r#d b4 a r#al #stat# 9ortgag# t/# LOAN< or s/ort ro9 8#tition#r BANCO FILIPINO in t/# s39 o P)%<1**'** P#sos< 8a4abl# and to b# a9orti#d @it/in %0 4#ars at %. 8#r #nt int#r#st ann3all4' H#n#< t/# LOAN still /ad 9or# t/an 61* da4s to r3n b4 2an3ar4 .< %,67< t/# dat# @/#n CIRCULAR No' ),) @as iss3#d b4 t/# C#ntral BanD' Sta98#d on t/# 8ro9issor4 not# #;id#ning t/# loan is an Esalation Cla3s#< r#ading as ollo@s! QIW# /#r#b4 a3t/ori# Bano Fili8ino to orr#s8ondingl4 inr#as# t/# int#r#st rat# sti83lat#d in t/is ontrat @it/o3t ad;an# noti# to 9#3s in t/# #;#nt a la@ s/o3ld b# #nat#d inr#asing t/# la@3l rat#s o int#r#st t/at 9a4 b# /arg#d on t/is 8arti3lar Dind o loan'Q T/# Esalation Cla3s# is bas#d 38on C#ntral BanD CIRCULAR No' ),) iss3#d on 2an3ar4 .< %,67< t/# 8#rtin#nt 8ortion o @/i/ r#ads! Q1' T/# 9ai939 rat# o int#r#st< inl3ding o99issions< 8r#9i39s< ##s and ot/#r /arg#s on loans @it/ 9at3rit4 o 9or# t/an s#;#n /3ndr#d t/irt4 61* da4s< b4 banDing Pag# $ %60
Obligations and Contrats! "otrin#s and Cas# "ig#sts
instit3tions< inl3ding t/rit banDs and r3ral banDs< or b4 inanial int#r9#diari#s a3t/ori#d to #ngag# in 3asi(banDing 3ntions s/all b# nin#t##n 8#r #nt %, 8#r ann39' Q For its 8art< BANCO FILIPINO 9aintain#d t/at t/# Esalation Cla3s# sign#d b4 t/# BORROWER a3t/ori#d it to inr#as# t/# int#r#st rat# on# a la@ @as 8ass#d inr#asing t/# rat# o int#r#st and t/at its a3t/orit4 to inr#as# @as 8ro;id#d or b4 CIRCULAR No' ),)' In its 3dg9#nt< r#s8ond#nt Co3rt n3llii#d t/# Esalation Cla3s# and ord#r#d BANCO FILIPINO to d#sist ro9 #noring t/# inr#as#d rat# o int#r#st on t/# BORROWERKs loan' It r#ason#d o3t t/at P'"' No' %%7 do#s not #8r#ssl4 grant t/# C#ntral BanD a3t/orit4 to 9ai9i# int#r#st rat#s @it/ r#troati;# ##t and t/at BANCO FILIPINO annot l#gall4 i98os# a /ig/#r rat# o int#r#st b#or# t/# #8iration o t/# %0(4#ar 8#riod in @/i/ t/# loan is to b# 8aid ot/#r t/an t/# %. 8#r ann39 in or# at t/# ti9# o t/# ##3tion o t/# loan' It is ro9 t/at "#ision in a;or o t/# BORROWER t/at BANCO FILIPINO /as o9# to t/is instan# on r#;i#@ b4 C#rtiorari' W# ga;# d3# o3rs# to t/# P#tition< t/# 3#stion b#ing on# o la@'
R/LING! In Bano Fili8ino Sa;ings and :ortgag# BanD ;s' Na;arro< %0 SCRA 1)7 %,+6< t/is Co3rt disa3t/ori#d t/# banD ro9 raising t/# int#r#st rat# on t/# borro@#rsK loan ro9 %. to %6 d#s8it# an #salation la3s# in t/# loan agr##9#nt sign#d b4 t/# d#btors a3t/oriing Bano Fili8ino Qto orr#s8ondingl4 inr#as# t/# int#r#st rat# sti83lat#d in t/is ontrat @it/o3t ad;an# noti# to 9#3s in t/# #;#nt a la@ s/o3ld b# #nat#d inr#asing t/# la@3l rat#s o int#r#st t/at 9a4 b# /arg#d on t/is 8arti3lar Dind o loan'Q #98/asis s388li#d' In t/# Bano Fili8ino as#< t/# banD r#li#d on S#tion 1 o CB Cir3lar No' ),) dat#d 23l4 %< %,67 6. O'G' No' 1< 8' 767(2 @/i/ 8ro;id#d t/at Qt/# 9ai939 rat# o int#r#st< inl3ding o99issions 8r#9i39s< ##s and ot/#r /arg#s on loans @it/ a 9at3rit4 o 9or# t/an 61* da4s b4 banDing instit3tion s/all b# %,'
)LA0IO @. #ACASAET ASSOCIATES, INC. %s. CO##ISSION ON A/DIT &G'R' No' +16)+' :a4 %.< %,+,'5
2I%I>C)"(3I44I4A, J: )ACTS! Pag# $ %67
Obligations and Contrats! "otrin#s and Cas# "ig#sts
On %0 S#8t#9b#r %,66 r#s8ond#nt P/ili88in# To3ris9 A3t/orit4 PTA #nt#r#d into a Contrat or QPro#t "#sign and :anag#9#nt S#r;i#s or t/# d#;#lo89#nt o t/# 8ro8os#d Ja9boanga Gol and Co3ntr4 Cl3b< Calarian< Ja9boanga Cit4Q @it/ 8#tition#r o98an4< b3t originall4 @it/ Fla;io ' :aasa#t alon# /#r#inat#r r##rr#d to si98l4 as t/# QContratQ' Und#r t/# Contrat< PTA obligat#d its#l to 8a4 8#tition#r a 8ro#ssional ## o s#;#n 6 o t/# at3al onstr3tion ost< P3rs3ant to t/# or#going S/#d3l#< t/# PTA 9ad# 8#riodi 8a49#nts o t/# sti83lat#d 8ro#ssional ##s to 8#tition#r' And< 38on o98l#tion o t/# 8ro#t< PTA 8aid 8#tition#rs @/at it 8#r#i;#d to b# t/# balan# o t/# latt#rKs 8ro#ssional ##s' It t3rn#d o3t< /o@#;#r< t/at at#r t/# 8ro#t @as o98l#t#d< PTA 8aid S38ra Constr3tion Co98an4< t/# 9ain ontrator< t/# additional s39 o P1<%)+<%,+'.7 r#8r#s#nting t/# #salation ost o t/# ontrat 8ri# d3# to t/# inr#as# in t/# 8ri# o onstr3tion 9at#rials' U8on l#arning o t/# 8ri# #salation< 8#tition#r r#3#st#d 8a49#nt o P.%,<1*.')6 additional 8ro#ssional ## r#8r#s#nting s#;#n 6 8#r#nt o P1<%)+<%,+'.7' On 1 23l4 %,+0 PTA d#ni#d 8a49#nt on t/# gro3nd t/at Qt/# s3b#t 8ri# #salation r##rr#d to inr#as#d ost o onstr3tion 9at#rials and did not #ntail additional @orD on t/# 8art o 8#tition#r as to #ntitl# it to additional o98#nsation 3nd#r Artil# VI o t/# ontratQ R#onsid#rations so3g/t b4 t/# 8#tition#r< 38 to r#s8ond#nt COA< @#r# to no a;ail' T/# latt#r #8r#ss#d t/# o8inion t/at Qto allo@ s3b#t lai9 in t/# abs#n# o a s/o@ing t/at #tra or additional s#r;i#s /ad b##n r#nd#r#d b4 lai9ant @o3ld #rtainl4 r#s3lt in o;#r8a49#nt to /i9 to t/# 8r#3di# o t/# Go;#rn9#ntQ
ISS/E! W/#t/#r 8#tition#rKs #ntitl#9#nt to additional 8ro#ssional ##s< @/i/< in t3rn< /ing#s on @/#t/#r or not t/# 8ri# #salation s/o3ld b# inl3d#d in t/# Qinal at3al 8ro#t ost'QX
R/LING! T/# t#r9inologi#s in t/# ontrat b#ing l#ar< l#a;ing no do3bt as to t/# int#ntion o t/# ontrating 8arti#s< t/#ir lit#ral 9#aning ontrol Artil# %16*< Ci;il Cod#' T/# 8ri# #salation ost 93st b# d##9#d inl3d#d in t/# inal at3al 8ro#t ost and 8#tition#r /#ld #ntitl#d to t/# 8a49#nt o its additional 8ro#ssional ##s' Obligations arising ro9 ontrat /a;# t/# or# o la@ b#t@##n t/# ontrating 8arti#s and s/o3ld b# o98li#d @it/ in good ait/ Artil# %%0,< Ci;il Cod#'
7ILIINE NATIONAL BAN@ %s. CO/RT O) AEALS &G'R' No' ++++*' A8ril 1*< %,,%'5
4)>"(A'@)>", J: Pag# $ %66
Obligations and Contrats! "otrin#s and Cas# "ig#sts
)ACTS! In 23l4 %,+.< t/# 8ri;at# r#s8ond#nt a88li#d or< and @as grant#d b4 8#tition#r PNB< a r#dit lin# o 1.%'+ 9illion< s#3r#d b4 a r#al #stat# 9ortgag#< or a t#r9 o t@o . 4#ars< @it/ %+ int#r#st 8#r ann39' Pri;at# r#s8ond#nt ##3t#d in a;or o t/# PNB a Cr#dit Agr##9#nt< t@o . 8ro9issor4 not#s in t/# a9o3nt o P,**<***'** #a/< and a R#al Estat# :ortgag# Contrat' T/# Cr#dit Agr##9#nt 8ro;id#d t/at Q,'*7 Ot/#r Conditions' T/# Borro@#rs /#r#b4 agr## to b# bo3nd b4 t/# r3l#s and r#g3lations o t/# C#ntral BanD and t/# 3rr#nt and g#n#ral 8olii#s o t/# BanD and t/os# @/i/ t/# BanD 9a4 ado8t in t/# 3t3r#< @/i/ 9a4 /a;# r#lation to or in an4 @a4 a#t t/# Lin#< @/i/ r3l#s< r#g3lations and 8olii#s ar# inor8orat#d /#r#in b4 r##r#n# as i s#t ort/ /#r#in in 3ll' Pro98tl4 38on r##i8t o a @ritt#n r#3#st ro9 t/# BanD< t/# Borro@#rs s/all ##3t# and d#li;#r s3/ do39#nts and instr39#nts< in or9 and s3bstan# satisator4 to t/# BanD< in ord#r to ##t3at# or ot/#r@is# o98l4 @it/ s3/ r3l#s< r#g3lations and 8olii#s'Q T/# Pro9issor4 Not#s< in t3rn< 3nior9l4 a3t/ori#d t/# PNB to inr#as# t/# sti83lat#d %+ int#r#st 8#r ann39 Q@it/in t/# li9its allo@#d b4 la@ at an4 ti9# d#8#nding on @/at#;#r 8oli4 it &PNB5 9a4 ado8t in t/# 3t3r#- Pro;id#d< t/at< t/# int#r#st rat# on t/is not# s/all b# orr#s8ondingl4 d#r#as#d in t/# #;#nt t/at t/# a88liabl# 9ai939 int#r#st rat# is r#d3#d b4 la@ or b4 t/# :on#tar4 Board'Q T/# R#al Estat# :ortgag# Contrat liD#@is# 8ro;id#d t/at! QD INCREASE OF INTEREST RATE QT/# rat# o int#r#st /arg#d on t/# obligation s#3r#d b4 t/is 9ortgag# as @#ll as t/# int#r#st on t/# a9o3nt @/i/ 9a4 /a;# b##n ad;an#d b4 t/# :ORTGAGEE< in aordan# @it/ t/# 8ro;isions /#r#o< s/all b# s3b#t d3ring t/# li# o t/is ontrat to s3/ an inr#as# @it/in t/# rat# allo@#d b4 la@< as t/# Board o "ir#tors o t/# :ORTGAGEE 9a4 8r#srib# or its d#btors'Q 8' +7< Rollo- #98/asis s388li#d' Fo3r ) 9ont/s ad;an# int#r#st and inid#ntal #8#ns#s/arg#s @#r# d#d3t#d ro9 t/# loan< t/# n#t 8ro##ds o @/i/ @#r# r#l#as#d to t/# 8ri;at# r#s8ond#nt b4 r#diting or trans#rring t/# a9o3nt to /is 3rr#nt ao3nt @it/ t/# banD'
ISS/E! W/#t/#r t/# banD< @it/in t/# t#r9 o t/# loan @/i/ it grant#d to t/# 8ri;at# r#s8ond#nt< 9a4 3nilat#rall4 /ang# or inr#as# t/# int#r#st rat# sti83lat#d t/#r#in at @ill and as ot#n as it 8l#as#dX
R/LING! T/# ans@#r to t/at 3#stion is no' In t/# irst 8la#< alt/o3g/ S#tion .< P"' No' %%7 o 2an3ar4 .,< %,61< a3t/ori#s t/# :on#tar4 Board to 8r#srib# t/# 9ai939 rat# or rat#s o int#r#st or loans or r#n#@al t/#r#o and to /ang# s3/ rat# or rat#s @/#n#;#r @arrant#d b4 8r#;ailing Pag# $ %6+
Obligations and Contrats! "otrin#s and Cas# "ig#sts
#ono9i and soial onditions< it #8r#ssl4 8ro;id#s t/at Qs3/ /ang#s s/all not b# 9ad# ot#n#r t/an on# #;#r4 t@#l;# 9ont/s'Q B#sid#s ;iolating P'"' %%7< t/# 3nilat#ral ation o t/# PNB in inr#asing t/# int#r#st rat# on t/# 8ri;at# r#s8ond#ntKs loan< ;iolat#d t/# 93t3alit4 o ontrats ordain#d in Artil# %1*+ o t/# Ci;il Cod#! QART' %1*+' T/# ontrat 93st bind bot/ ontrating 8arti#s- its ;alidit4 or o98lian# annot b# l#t to t/# @ill o on# o t/#9'Q PNBKs s3#ssi;# inr#as#s o t/# int#r#st rat# on t/# 8ri;at# r#s8ond#ntKs loan< o;#r t/# latt#rKs 8rot#st< @#r# arbitrar4 as t/#4 ;iolat#d an #8r#ss 8ro;ision o t/# Cr#dit Agr##9#nt E/' % S#tion ,'*% t/at its t#r9s Q9a4 b# a9#nd#d onl4 b4 an instr39#nt in @riting sign#d b4 t/# 8art4 to b# bo3nd as b3rd#n#d b4 s3/ a9#nd9#nt'Q T/# inr#as#s i98os#d b4 PNB also ontra;#n# Art' %,07 o t/# Ci;il Cod# @/i/ 8ro;id#s t/at Qno int#r#st s/all b# d3# 3nl#ss it /as b##n #8r#ssl4 sti83lat#d in @riting'Q
RE/BLIC O) T7E 7ILIINES %s. 7ILIINE LONG DISTANCE TELE7ONE CO#AN: &G'R' No' L(%++)%' 2an3ar4 .6< %,7,'5
4ILIS, J.K.% )ACTS! T/# B3r#a3 o T#l#o993niations /ad a ontrat @it/ PL"T- t/at t/# B3r#a3 @o3ld 8a4 PL"T or t/# 3s# t/# tr3nD lin#s o PL"T to #stablis/ 8/on# lin#s in all go;#rn9#nt oi#s in t/# o3ntr4' Ho@#;#r< at#r so9#ti9#< t/# B3r#a3 #t#nd#d its s#r;i#s or o99#rial 3s# as PL"T o3ld not o8# @it/ t/# d#9ands o t/# 83bli or 8/on# lin# onn#tions' PL"T Dn#@ abo3t t/# at3ations o t/# B3r#a3 b3t it tooD PL"T a long ti9# to il# a o98laint or t/# B3r#a3s at'
ISS/E! W/#t/#r an b# o#r#d to #nt#r into a ontrat @/#r# no agr##9#nt is /ad b#t@##n t/#9 as to t/# 8rini8al t#r9s and onditions o t/# ontratX
R/LING! W# agr## @it/ t/# o3rt b#lo@ t/at 8arti#s annot b# o#r#d to #nt#r into a ontrat @/#r# no agr##9#nt is /ad b#t@##n t/#9 as to t/# 8rini8al t#r9s and onditions o t/# ontrat' Fr##do9 to sti83lat# s3/ t#r9s and onditions is o t/# #ss#n# o o3r ontrat3al s4st#9< and b4 #8r#ss 8ro;ision o t/# stat3t#< a ontrat 9a4 b# ann3ll#d i taint#d b4 ;iol#n#< inti9idation< or 3nd3# inl3#n#' B3t t/# o3rt a 3o /as a88ar#ntl4 o;#rlooD#d t/at @/il# t/# R#83bli 9a4 not o98#l t/# PL"T to #l#brat# a ontrat @it/ it< t/# R#83bli 9a4< in t/# ##ris# o t/# so;#r#ign 8o@#r o #9in#nt do9ain< r#3ir# t/# t#l#8/on# o98an4 to 8#r9it int#ronn#tion o t/# go;#rn9#nt t#l#8/on# s4st#9 and t/at o t/# PL"T< as t/# n##ds o t/# go;#rn9#nt s#r;i# 9a4 r#3ir#< s3b#t to t/# 8a49#nt o 3st o98#nsation to b# d#t#r9in#d b4 t/# o3rt' No9inall4< o Pag# $ %6,
Obligations and Contrats! "otrin#s and Cas# "ig#sts
o3rs#< t/# 8o@#r o #9in#nt do9ain r#s3lts in t/# taDing or a88ro8riation o titl# to< and 8oss#ssion o< t/# #8ro8riat#d 8ro8#rt4- b3t no og#nt r#ason a88#ars @/4 t/# said 8o@#r 9a4 not b# a;ail#d o to i98os# onl4 a b3rd#n 38on t/# o@n#r o ond#9n#d 8ro8#rt4< @it/o3t loss o titl# and 8oss#ssion' It is 3n3#stionabl# t/at r#al 8ro8#rt4 9a4< t/ro3g/ #8ro8riation< b# s3b#t#d to an #as#9#nt o rig/t o @a4' T/# 3s# o t/# PL"TKs lin#s and s#r;i#s to allo@ int#r( s#r;i# onn#tion b#t@##n bot/ t#l#8/on# s4st#9s is not 93/ di#r#nt' In #it/#r as# 8ri;at# 8ro8#rt4 is s3b#t#d to a b3rd#n or 83bli 3s# and b#n#it' I< 3nd#r s#tion 7< Artil# =III< o t/# Constit3tion< t/# Stat# 9a4< in t/# int#r#st o national @#lar#< trans#r 3tiliti#s to 83bli o@n#rs/i8 38on 8a49#nt o 3st o98#nsation< t/#r# is no r#ason @/4 t/# Stat# 9a4 not r#3ir# a 83bli 3tilit4 to r#nd#r s#r;i#s in t/# g#n#ral int#r#st< 8ro;id#d 3st o98#nsation is 8aid t/#r#or' Ulti9at#l4< t/# b#n#iiar4 o t/# int#ronn#ting s#r;i# @o3ld b# t/# 3s#rs o bot/ t#l#8/on# s4st#9s< so t/at t/# ond#9nation @o3ld b# or 83bli 3s#'
LITA ENTERRISES, INC. %s. SECOND CI0IL CASES DI0ISION, INTER#EDIATE AELLATE CO/RT &G'R' No' 7)7,1' A8ril .6< %,+)'5
ISC"%)>, J )ACTS! So9#ti9# in %,77< t/# s8o3s#s Niasio :' Oa98o and Franisa Garia< /#r#in 8ri;at# r#s8ond#nts< 83r/as#d in install9#nt ro9 t/# "#lta :otor Sal#s Cor8oration i;# 0 To4ota Corona Standard ars to b# 3s#d as taiabs' Sin# t/#4 /ad no ran/is# to o8#rat# taiabs< t/#4 ontrat#d @it/ 8#tition#r Lita Ent#r8ris#s< In'< t/ro3g/ its r#8r#s#ntati;#< :an3#l Conordia< or t/# 3s# o t/# latt#rKs #rtiiat# o 83bli on;#ni#n# in onsid#ration o an initial 8a49#nt o P%<***'** and a 9ont/l4 r#ntal o P.**'** 8#r taiab 3nit' To ##t3at# said agr##9#nt< t/# aor#said ars @#r# r#gist#r#d in t/# na9# o 8#tition#r Lita Ent#r8ris#s< In' Poss#ssion< /o@#;#r< r#9ain#d @it/ t/# s8o3s#s Oa98o @/o o8#rat#d and 9aintain#d t/# sa9# 3nd#r t/# na9# A9# Tai< 8#tition#rKs trad# na9#' Abo3t a 4#ar lat#r< on :ar/ %+< %,76< on# o said taiabs dri;#n b4 t/#ir #98lo4##< E9#t#rio :artin< ollid#d @it/ a 9otor4l# @/os# dri;#r< on# Florant# Gal;#< di#d ro9 t/# /#ad in3ri#s s3stain#d t/#r#ro9' A ri9inal as# @as #;#nt3all4 il#d against t/# dri;#r E9#t#rio :artin< @/il# a i;il as# or da9ag#s @as instit3t#d b4 Rosita S#bastian Vda' d# Gal;#< /#ir o t/# ;iti9< against Lita Ent#r8ris#s< In'< as r#gist#r#d o@n#r o t/# taiab' In t/# latt#r as#< Ci;il Cas# No' 6.*76 o t/# Co3rt o First Instan# o :anila< 8#tition#r Lita Ent#r8ris#s< In' @as ad3dg#d liabl# or da9ag#s in t/# a9o3nt o P.0<***'** and P6<***'** or attorn#4Ks ##s' T/is d#ision /a;ing b#o9# inal< a @rit o ##3tion @as iss3#d' On# o t/# ;#/il#s o r#s8ond#nt s8o3s#s @it/ Engin# No' .R( ,%))6. @as l#;i#d 38on and sold at 83bli a3tion or Pag# $ %+*
Obligations and Contrats! "otrin#s and Cas# "ig#sts
P.<%0*'** to on# Sonni# Cort#< t/# /ig/#st bidd#r' Anot/#r ar @it/ Engin# No' .R(,%0*17 @as liD#@is# l#;i#d 38on and sold at 83bli a3tion or P+<***'** to a #rtain :r' Lo8#' T/#r#at#r< in :ar/ %,61< r#s8ond#nt Niasio Oa98o d#id#d to r#gist#r /is taiabs in /is na9#' H# r#3#st#d t/# 9anag#r o 8#tition#r Lita Ent#r8ris#s< In' to t3rn o;#r t/# r#gistration 8a8#rs to /i9< b3t t/# latt#r all#g#dl4 r#3s#d' H#n#< /# and /is @i# il#d a o98laint against Lita Ent#r8ris#s< In'< Rosita S#bastian Vda' d# Gal;#< Visa4an S3r#t4 Ins3ran# Co' and t/# S/#ri o :anila or r#on;#4an# o 9otor ;#/il#s @it/ da9ag#s< doD#t#d as Ci;il Cas# No' ,*,++ o t/# Co3rt o First Instan# o :anila'
ISS/E! W/#t/#r ;oid ontrats< annot b# 3r#d b4 ratiiation or 8r#sri8tionX
R/LING! T/# d##t o in#ist#n# o a ontrat is 8#r9an#nt and in3rabl#< and annot b# 3r#d b4 ratiiation or b4 8r#sri8tion' As t/is Co3rt said in E3g#nio ;s' P#rdido< ,6 P/il' )%< Qt/# 9#r# la8s# o ti9# annot gi;# #ia4 to ontrats t/at ar# n3ll and ;oid'Q
C/I %s. ARELLANO /NI0ERSIT: &G'R' No' L(%0%.6' :a4 1*< %,7%'5
C">CI5C)">, J: )ACTS! C3i @as a la@ s/olar at t/# Ar#llano Uni;#rsit4- /# 8aid t/# t3ition ##s b3t it @as r#t3rn#d to /i9 at t/# #nd o #;#r4 s#9#st#r' B#or# Ar#llano a@ard#d t/# s/olars/i8 grant< C3i @as 9ad# to sign a ontrat o;#nant and agr##9#nt sa4ing t/at /# @ai;#s /is rig/t to trans#r to anot/#r s/ool in onsid#ration o t/# s/olars/i8 grant and i /# trans#rs< /# s/all 8a4 t/# t3ition ##s a@ard#d to /i9 @/il# b#ing a s/olar' H# trans#rr#d to anot/#r s/ool to inis/ /is last t#r9 in la@ s/ool' W/#n /# @as abo3t to taD# t/# Bar< /is TOR at Ar#llano @as not iss3#d 3nl#ss /# 8a4s t/# a9o3nt o t/# t3ition ##s t/at @#r# r#t3rn#d to /i9 @/#n /# @as still t/#ir s/olar' H# 8aid 3nd#r 8rot#st'
ISS/E! W/#t/#r t/# abo;# 3ot#d 8ro;ision o t/# ontrat b#t@##n 8lainti and t/# d##ndant @/#r#b4 t/# or9#r @ai;#d /is rig/t to trans#r to anot/#r s/ool @it/o3t r#3nding to t/# latt#r t/# #3i;al#nt o /is s/olars/i8s in as/< is ;alid or notX
R/LING! T/# @ai;#r sign#d b4 C3i @as ;oid as it @as ontrar4 to 83bli 8oli4- it @as n3ll and ;oid'
Pag# $ %+%
Obligations and Contrats! "otrin#s and Cas# "ig#sts
T/# sti83lation in a ontrat< b#t@##n a st3d#nt and t/# s/ool< t/at t/# st3d#ntKs s/olars/i8 is good onl4 i /# ontin3#s in t/# sa9# s/ool< and t/at /# @ai;#s /is rig/t to trans#r to anot/#r s/ool @it/o3t r#3nding t/# #3i;al#nt o /is s/olars/i8 in as/< is ontrar4 to 83bli 8oli4 and< /#n#< n3ll and ;oid< b#a3s# s/olars/i8s ar# a@ard#d in r#ognition o 9#rit and to /#l8 git#d st3d#nts in @/o9 soi#t4 /as an #stablis/#d int#r#st or a irst li#n< and not to D##8 o3tstanding st3d#nts in s/ool to bolst#r its 8r#stig# and inr#as# its b3sin#ss 8ot#ntial'
NON %s. DA#ES &G'R' No' +,1%6' :a4 .*< %,,*'5
C"4TI<, J: )ACTS! P#tition#rs< st3d#nts in 8ri;at# r#s8ond#nt :abini Coll#g#s< In' @#r# not allo@#d to r#(#nroll b4 t/# s/ool or t/# aad#9i 4#ar %,++(%,+, or l#ading or 8artii8ating in st3d#nt 9ass ations against t/# s/ool in t/# 8r##ding s#9#st#r' T/# s3b#t o t/# 8rot#sts is not< /o@#;#r< 9ad# l#ar in t/# 8l#adings' T/# trial o3rt dis9iss#d t/# 8#tition r##rring to t/# r3ling in Al3a ;s' PSBA stating< t/at b#ing a 9#r# 8ri;il#g# and not a l#gal rig/t or a st3d#nt to b# #nroll#d or r#(#nroll#d< r#s8ond#nt :abini Coll#g# is r## to ad9it or not ad9it t/# 8#tition#rs or r#(#nroll9#nt in ;i#@ o t/# aad#9i r##do9 #no4#d b4 t/# s/ool' T/# r#s8ond#nts< in 3sti4ing t/#ir ation< stat#d t/at + o t/# 8#tition#rs /a;# in3rr#d ailing grad#s' In r#s8ons#< t/# 8#tition#rs stat#d t/at! a t/r## o t/#9 @#r# grad3ating' b T/#ir aad#9i d#ii#ni#s do not @arrant non(r#ad9ission' T/# i98ro8#r ond3t attrib3t#d to t/#9 @as d3ring t/# ##ris# o t/# ognat# rig/ts o r## s8##/ and 8#a#abl# ass#9bl4' d T/#r# @as no d3# in;#stigation t/at o3ld s#r;# as basis or disi8linar4 ation' # R#s8ond#nt s/ool is t/#ir /oi# instit3tion n#ar t/#ir 8la#s o r#sid#n#< @/i/ t/#4 an aord to 8a4 or t#rtiar4 #d3ation'
ISS/E! W/#t/#r or not t/# s/ool /as t/# rig/t not to r#(ad9it t/# 8#tition#rsX
R/LING! T/# S38r#9# Co3rt r3l#d t/at t/# trial o3rt annot an/or t/# T#r9ination o Contrat t/#or4 t/# ontrat b#t@##n t/# s/ool and t/# st3d#nt is not an ordinar4 ontrat' It is i9b3#d @it/ 83bli int#r#st< onsid#ring t/# /ig/ 8riorit4 gi;#n b4 t/# Constit3tion to #d3ation and t/# grant to t/# Stat# o s38#r;isor4 and r#g3lator4 8o@#rs o;#r all #d3ational instit3tions' It is int#nd#d 9#r#l4 to 8rot#t s/ools @/#r#in t3ition ##s ar# oll#t#d and 8aid on install9#nt basis' It annot b# onstr3#d to 9#an t/at a st3d#nt s/all b# #nroll#d or onl4 on# s#9#st#r' Pag# $ %+.
Obligations and Contrats! "otrin#s and Cas# "ig#sts
T/# rig/t o an instit3tion o /ig/#r l#arning to s#t aad#9i standards annot b# 3tili#d to disri9inat# against st3d#nts @/o ##ris# t/#ir onstit3tional rig/ts to s8##/ and ass#9bl4< or ot/#r@is# t/#r# @ill b# a ;iolation o t/#ir rig/t to #3al 8rot#tion' It 8ro;id#s t/at #;#r4 st3d#nt /as t/# rig/t to #nroll in an4 s/ool oll#g# or 3ni;#rsit4 38on 9##ting its s8#ii r#3ir#9#nts and r#asonabl# r#g3lations- ' ' ' and t/at t/# st3d#nt is 8r#s39#d to b# 3alii#d or #nroll9#nt or t/# #ntir# 8#riod /# is #8#t#d to o98l#t# t/# o3rs#< @it/o3t 8r#3di# to /is rig/t to trans#r'
CAITOL #EDICAL CENTER, INC. %s. CO/RT O) AEALS &G'R' No' +.),,' Otob#r %1< %,+,'5
4)"(A'@)>", J: )ACTS! On "##9b#r .< %,+6< it##n %0 st3d#nts and 8ar#nts 83r8orting to r#8r#s#nt t/# ,** st3d#nts o t/# C:CC il#d a lass s3it Ci;il Cas# No' 0.)., against QCa8itol :#dial C#nt#r Coll#g#Q and 8#tition#r "r' Cl#9#nt#< in t/# R#gional Trial Co3rt o >3#on Cit4 8ra4ing or t/# r#o8#ning o t/# Ca8itol :#dial C#nt#r Coll#g# @/i/ /ad b##n los#d ##ti;# at t/# #nd o t/# irst s#9#st#r o t/# s/ool 4#ar %,+6(%,++ 8' .*+< Rollo' As t/# o98laint 8ra4#d or t/# iss3an# o a @rit o 8r#li9inar4 9andator4 in3ntion< t/# o3rt s#t t/# /#aring o t/# a88liation on "##9b#r ,< %,+6' As agr##d at t/# /#aring< an o88osition @as il#d b4 C:CC on "##9b#r %)< %,+6' On t/# sa9# da4< t/# lo@#r o3rt grant#d t/# @rit o 8r#li9inar4 9andator4 in3ntion and dir#t#d t/# d##ndants Qto r#o8#n t/# s/ool and allo@ 8laintis st3d#nts to #nroll in t/#ir r#s8#ti;# o3rs#&s5 ' ' 'Q It i#d t/# 8laintisK bond in t/# s39 o P0*<***' T/# 8#tition#rs il#d a 9otion or r#onsid#ration o t/# abo;# ord#r b3t t/# o3rt d#ni#d t/#ir 9otion' In d3# ti9#< t/# 8#tition#rs #l#;at#d t/# ord#r to t/# Co3rt o A88#als on a 8#tition or #rtiorari @it/ 8r#li9inar4 in3ntion' T/# Co3rt o A88#als iss3#d a r#straining ord#r and dir#t#d t/# r#s8ond#nts to o99#nt on t/# 8#tition' At#r /#aring t/# 8arti#s in oral arg39#nt< t/# Co3rt o A88#als r#nd#r#d a d#ision on F#br3ar4 %0< %,++ /olding t/at t/# r#s8ond#nt RTC 23dg# did not ab3s# /is disr#tion in iss3ing t/# ord#r o 8r#li9inar4 9andator4 in3ntion b#a3s# t/# 8#tition#rs /ad no rig/t to s3dd#nl4 los# t/#
Pag# $ %+1
Obligations and Contrats! "otrin#s and Cas# "ig#sts
s/ool or t/# #nroll9#nt o t/# st3d#nts r#at#d a binding ontrat b#t@##n t/#9 and t/# s/ool or t/# latt#r to ontin3# o8#rating 3ntil t/# or9#r s/all /a;# inis/#d t/#ir o3rs#s' On F#br3ar4 .7< %,++< t/# 8#tition#rs il#d a 9otion or r#onsid#ration and r#/#aring @/i/ @as /#ld on :ar/ 1< %,++' N#;#rt/#l#ss< on :ar/ +< %,++< t/# Co3rt o A88#als d#ni#d 8#tition#rKs 9otion or r#onsid#ration' H#n#< t/is 8#tition or r#;i#@'
ISS/E! W/#t/#r a s/ool t/at< at#r d3# noti# to t/# S#r#tar4 o Ed3ation< C3lt3r# and S8orts< los#d at t/# #nd o t/# irst s#9#st#r o t/# s/ool 4#ar %,+6(%,++< b#a3s# its t#a/#rs and st3d#nts d#lar#d a striD#< r#3sing to /old lass#s and taD# #a9inations< 9a4 b# or#d to r#o8#n b4 t/# o3rts at t/# instan# o t/# striDing st3d#ntsX
R/LING! T/# 8#tition or r#;i#@ /as 9#rit' T/# sol# ob#t o a 8r#li9inar4 in3ntion< @/#t/#r 8ro/ibitor4 or 9andator4< is to 8r#s#r;# t/# stat3s 3o 3ntil t/# 9#rits o t/# as# an b# /#ard' T/# stat3s 3o is t/# last at3al 8#a#abl# 3nont#st#d stat3s @/i/ 8r##d#d t/# ontro;#rs4 Rod3la ;s' Alonso< 67 P/il' ..0' It 9a4 onl4 b# r#sort#d to b4 a litigant or t/# 8r#s#r;ation or 8rot#tion o /is rig/ts or int#r#sts and or no ot/#r 83r8os# d3ring t/# 8#nd#n4 o t/# 8rini8al ation Calo ;s' Roldan< 67 P/il' ))0' It s/o3ld onl4 b# grant#d i t/# 8art4 asDing or it is l#arl4 #ntitl#d t/#r#to Cli9ao ;s' :aara#g< ) SCRA ,1*- S3bido ;s' Go8#ngo< .6 SCRA )00- Poli# Co99ission ;s' B#llo< 16 SCRA .1*' Inas93/ as a 9andator4 in3ntion t#nds to do 9or# t/an to 9aintain t/# stat3s 3o< it is g#n#rall4 i98ro8#r to iss3# s3/ an in3ntion 8rior to t/# inal /#aring :anila El#tri Railroad and Lig/t Co' ;s' "#l Rosario< .. P/il' )11' It 9a4< /o@#;#r< iss3# Qin as#s o #tr#9# 3rg#n4- @/#r# t/# rig/t is ;#r4 l#ar- @/#r# onsid#rations o r#lati;# inon;#ni#n# b#ar strongl4 in o98lainantKs a;or- @/#r# t/#r# is a @ill3l and 3nla@3l in;asion o 8laintis rig/t against /is 8rot#st and r#9onstran#< t/# in3r4 b#ing a ontin3ing on#- and @/#r# t/# ##t o t/# 9andator4 in3ntion is rat/#r to r##stablis/ and 9aintain a 8r##isting ontin3ing r#lation b#t@##n t/# 8arti#s< r##ntl4 and arbitraril4 int#rr38t#d b4 t/# d##ndant< t/an to #stablis/ a n#@ r#lation' Ind##d< t/# @rit s/o3ld not b# d#ni#d t/# o98lainant @/#n /# 9aD#s o3t a l#ar as#< r## ro9< do3bt and dis83t#'Q Co99ission#r o C3sto9s ;s' Clorib#l< #t al'< %, SCRA .10'
II. CONSENS/ALIT: * ARTS. &(6+ AND &(&+8 SEE ALSO ART. 554 III. #/T/ALIT: * ART. &(64 7ILIINE NATIONAL BAN@ %s. CO/RT O) AEALS &G'R' No' ++++*' A8ril 1*< %,,%'5 Pag# $ %+)
Obligations and Contrats! "otrin#s and Cas# "ig#sts
4)>"(A'@)>", J: )ACTS! In 23l4 %,+.< t/# 8ri;at# r#s8ond#nt a88li#d or< and @as grant#d b4 8#tition#r PNB< a r#dit lin# o 1.%'+ 9illion< s#3r#d b4 a r#al #stat# 9ortgag#< or a t#r9 o t@o . 4#ars< @it/ %+ int#r#st 8#r ann39' Pri;at# r#s8ond#nt ##3t#d in a;or o t/# PNB a Cr#dit Agr##9#nt< t@o . 8ro9issor4 not#s in t/# a9o3nt o P,**<***'** #a/< and a R#al Estat# :ortgag# Contrat' T/# Cr#dit Agr##9#nt 8ro;id#d t/at Q,'*7 Ot/#r Conditions' T/# Borro@#rs /#r#b4 agr## to b# bo3nd b4 t/# r3l#s and r#g3lations o t/# C#ntral BanD and t/# 3rr#nt and g#n#ral 8olii#s o t/# BanD and t/os# @/i/ t/# BanD 9a4 ado8t in t/# 3t3r#< @/i/ 9a4 /a;# r#lation to or in an4 @a4 a#t t/# Lin#< @/i/ r3l#s< r#g3lations and 8olii#s ar# inor8orat#d /#r#in b4 r##r#n# as i s#t ort/ /#r#in in 3ll' Pro98tl4 38on r##i8t o a @ritt#n r#3#st ro9 t/# BanD< t/# Borro@#rs s/all ##3t# and d#li;#r s3/ do39#nts and instr39#nts< in or9 and s3bstan# satisator4 to t/# BanD< in ord#r to ##t3at# or ot/#r@is# o98l4 @it/ s3/ r3l#s< r#g3lations and 8olii#s'Q 8' +0< Rollo' T/# Pro9issor4 Not#s< in t3rn< 3nior9l4 a3t/ori#d t/# PNB to inr#as# t/# sti83lat#d %+ int#r#st 8#r ann39 Q@it/in t/# li9its allo@#d b4 la@ at an4 ti9# d#8#nding on @/at#;#r 8oli4 it &PNB5 9a4 ado8t in t/# 3t3r#- Pro;id#d< t/at< t/# int#r#st rat# on t/is not# s/all b# orr#s8ondingl4 d#r#as#d in t/# #;#nt t/at t/# a88liabl# 9ai939 int#r#st rat# is r#d3#d b4 la@ or b4 t/# :on#tar4 Board'Q T/# R#al Estat# :ortgag# Contrat liD#@is# 8ro;id#d t/at! QD INCREASE OF INTEREST RATE QT/# rat# o int#r#st /arg#d on t/# obligation s#3r#d b4 t/is 9ortgag# as @#ll as t/# int#r#st on t/# a9o3nt @/i/ 9a4 /a;# b##n ad;an#d b4 t/# :ORTGAGEE< in aordan# @it/ t/# 8ro;isions /#r#o< s/all b# s3b#t d3ring t/# li# o t/is ontrat to s3/ an inr#as# @it/in t/# rat# allo@#d b4 la@< as t/# Board o "ir#tors o t/# :ORTGAGEE 9a4 8r#srib# or its d#btors'Q 8' +7< Rollo Fo3r ) 9ont/s ad;an# int#r#st and inid#ntal #8#ns#s/arg#s @#r# d#d3t#d ro9 t/# loan< t/# n#t 8ro##ds o @/i/ @#r# r#l#as#d to t/# 8ri;at# r#s8ond#nt b4 r#diting or trans#rring t/# a9o3nt to /is 3rr#nt ao3nt @it/ t/# banD'
ISS/E?
Pag# $ %+0
Obligations and Contrats! "otrin#s and Cas# "ig#sts
W/#t/#r t/# banD< @it/in t/# t#r9 o t/# loan @/i/ it grant#d to t/# 8ri;at# r#s8ond#nt< 9a4 3nilat#rall4 /ang# or inr#as# t/# int#r#st rat# sti83lat#d t/#r#in at @ill and as ot#n as it 8l#as#d'
R/LING! T/# ans@#r to t/at 3#stion is no' In t/# irst 8la#< alt/o3g/ S#tion .< P"' No' %%7 o 2an3ar4 .,< %,61< a3t/ori#s t/# :on#tar4 Board to 8r#srib# t/# 9ai939 rat# or rat#s o int#r#st or loans or r#n#@al t/#r#o and to /ang# s3/ rat# or rat#s @/#n#;#r @arrant#d b4 8r#;ailing #ono9i and soial onditions< it #8r#ssl4 8ro;id#s t/at Qs3/ /ang#s s/all not b# 9ad# ot#n#r t/an on# #;#r4 t@#l;# 9ont/s'Q B#sid#s ;iolating P'"' %%7< t/# 3nilat#ral ation o t/# PNB in inr#asing t/# int#r#st rat# on t/# 8ri;at# r#s8ond#ntKs loan< ;iolat#d t/# 93t3alit4 o ontrats ordain#d in Artil# %1*+ o t/# Ci;il Cod#! QART' %1*+' T/# ontrat 93st bind bot/ ontrating 8arti#s- its ;alidit4 or o98lian# annot b# l#t to t/# @ill o on# o t/#9'Q PNBKs s3#ssi;# inr#as#s o t/# int#r#st rat# on t/# 8ri;at# r#s8ond#ntKs loan< o;#r t/# latt#rKs 8rot#st< @#r# arbitrar4 as t/#4 ;iolat#d an #8r#ss 8ro;ision o t/# Cr#dit Agr##9#nt' S#tion ,'*% t/at its t#r9s Q9a4 b# a9#nd#d onl4 b4 an instr39#nt in @riting sign#d b4 t/# 8art4 to b# bo3nd as b3rd#n#d b4 s3/ a9#nd9#nt'Q T/# inr#as#s i98os#d b4 PNB also ontra;#n# Art' %,07 o t/# Ci;il Cod# @/i/ 8ro;id#s t/at Qno int#r#st s/all b# d3# 3nl#ss it /as b##n #8r#ssl4 sti83lat#d in @riting'Q
SINGSON ENCARNACION %s. BALDO#AR &G'R' No' L(.7)' Otob#r )< %,)7'5
3)A%". J: )ACTS! Vi#nt# Singson Enarnaion< o@n#r o t/# /o3s# n39b#r#d 0+, L#garda Str##t< :anila< so9# si 4#ars ago l#as#d said /o3s# to 2ainta Baldo9ar and /#r son< L#rado F#rnando< 38on a 9ont/(to(9ont/ basis or t/# 9ont/l4 r#ntal o P10' At#r :anila @as lib#rat#d in t/# last @ar< s8#iiall4 on :ar/ %7< %,)0< and on A8ril 6< o t/# sa9# 4#ar< 8lainti Singson Enarnaion notii#d d##ndants< t/# said 9ot/#r and son< to ;aat# t/# /o3s# abo;#(9#ntion#d on or b#or# A8ril %0< %,)0< b#a3s# 8lainti n##d#d it or /is oi#s as a r#s3lt o t/# d#str3tion o t/# b3ilding @/#r# said 8lainti /ad said oi#s b#or#' "#s8it# t/is d#9and< d##ndants insist#d on ontin3ing t/#ir o38an4' W/#n t/# original ation @as lodg#d @it/ t/# :3nii8al Co3rt o :anila on A8ril .*< %,)0< d##ndants @#r# in arr#ars in t/# 8a49#nt o t/# r#ntal orr#s8onding to said 9ont/< t/# agr##d r#ntal b#ing 8a4abl# @it/in t/# irst i;# da4s o #a/ 9ont/' Pag# $ %+7
Obligations and Contrats! "otrin#s and Cas# "ig#sts
T/at r#ntal @as 8aid 8rior to t/# /#aring o t/# as# in t/# 93nii8al o3rt< as a ons#3#n# o @/i/ said o3rt #nt#r#d 3dg9#nt or r#stit3tion and 8a49#nt o r#ntals at t/# rat# o P10 a 9ont/ ro9 :a4 %< %,)0< 3ntil d##ndants o98l#t#l4 ;aat# t/# 8r#9is#s' Alt/o3g/ 8lainti inl3d#d in said original o98laint a lai9 or P0** da9ag#s 8#r 9ont/< t/at lai9 @as @ai;#d b4 /i9 b#or# t/# /#aring in t/# 93nii8al o3rt< on ao3nt o @/i/ not/ing @as said r#garding said da9ag#s in t/# 93nii8al o3rtKs d#ision'
ISS/E! W/#t/#r ontin3an# and 3lill9#nt o t/# ontrat o l#as# an b# 9ad# to d#8#nd sol#l4 and #l3si;#l4 38on t/# r## and 3nontroll#d /oi# o t/# l#ss##sX
R/LING! T/# ontin3an# and 3lill9#nt o t/# ontrat o l#as# annot b# 9ad# to d#8#nd sol#l4 and #l3si;#l4 38on t/# r## and 3nontroll#d /oi# o t/# l#ss##s b#t@##n ontin3ing 8a4ing t/# r#ntals or not< o98l#t#l4 d#8ri;ing t/# o@n#r o all sa4 in t/# 9att#r' For i t/is @#r# allo@#d< so long as d##ndants #l#t#d to ontin3# t/# l#as# b4 ontin3ing t/# 8a49#nt o t/# r#ntals< t/# o@n#r @o3ld n#;#r b# abl# to disontin3# it- on;#rs#l4< alt/o3g/ t/# o@n#r s/o3ld d#sir# t/# l#as# to ontin3#< t/# l#ss##s o3ld ##ti;#l4 t/@art /is 83r8os# i t/#4 s/o3ld 8r##r to t#r9inat# t/# ontrat b4 t/# si98l# #8#di#nt o sto88ing 8a49#nt o t/# r#ntals' T/is< o o3rs#< is 8ro/ibit#d b4 artil# %.07 o t/# Ci;il Cod#'
I0. OBLIGATORINESS' ARTS. &&+, &(&+ AND &(& 0. RELATI0IT:' ART. &(&& TO &(&5 &. STI/LATION O/R A/TR/I * -ND ARAGRA7 O) ART. &(&& A. RE/ISITES CO/IA %s. )IELD#ENS INS/RANCE CO. &G'R' NO' L(.1.67< NOVE:BER .,< %,7+'5
C">CI5C)">, C.J.: )ACTS! On "#' %< %,7%< Fi#ld9#ns Ins3ran# Co' iss3#d in a;or o t/# :anila Y#llo@ Taiab a o99on arri#r ins3ran# 8oli4 @it/ a sti83lation t/at t/# o98an4 s/all ind#9ni4 t/# ins3r#d o t/# s39s @/i/ t/# latt#r 9a4 b# /#ld liabl# or @it/ r#s8#t to d#at/ or bodil4 in3r4 to an4 air#(8a4ing 8ass#ng#r inl3ding t/# dri;#r and ond3tor'
Pag# $ %+6
Obligations and Contrats! "otrin#s and Cas# "ig#sts
T/# 8oli4 also stat#d t/at in t/# #;#nt o t/# d#at/ o t/# dri;#r< t/# Co98an4 s/all ind#9ni4 /is 8#rsonal r#8r#s#ntati;#s and at t/# Co98an4s o8tion 9a4 9aD# ind#9nit4 8a4abl# dir#tl4 to t/# lai9ants or /#irs o t/# lai9ants' "3ring t/# 8oli4s li#ti9#< a taiab o t/# ins3r#d dri;#n b4 Co3ia 9#t an aid#nt and Co3ia di#d' W/#n t/# o98an4 r#3s#d to 8a4 t/# onl4 /#irs o Co3ia< /is 8ar#nts< t/#4 instit3#d t/is o98laint' T/# o98an4 ont#nds t/at 8laintis /a;# no a3s# o ation sin# t/# Co3ias /a;# no ontrat3al r#lations/i8 @it/ t/# o98an4'
ISS/E! W/#t/#r or not 8laintis /a;# t/# rig/t to oll#t on t/# 8oli4'
7ELD! At/o3g/< in g#n#ral< onl4 8arti#s to a ontrat 9a4 bring an ation bas#d t/#r#on< t/is r3l# is s3b#t to ##8tions< on# o @/i/ is o3nd in t/# s#ond 8aragra8/ o Artil# %1%% o t/# Ci;il Cod# o t/# P/ili88in#s< r#ading! QI a ontrat s/o3ld ontain so9# sti83lation in a;or o a t/ird 8#rson< /# 9a4 d#9and its 3lill9#nt 8ro;id#d /# o993niat#d /is a#8tan# to t/# obligor b#or# its r#;oation' A 9#r# inid#ntal b#n#it or int#r#st o a 8#rson is not s3ii#nt' T/# ontrating 8arti#s 93st /a;# l#arl4 and d#lib#rat#l4 on#rr#d a a;or 38on a t/ird 8#rson'Q T/is is b3t t/# r#stat#9#nt o a @#ll(Dno@n 8rini8l# on#rning ontrats 8o3r a3tr3i< t/# #nor#9#nt o @/i/ 9a4 b# d#9and#d b4 a t/ird 8art4 or @/os# b#n#it it @as 9ad#< alt/o3g/ not a 8art4 to t/# ontrat< b#or# t/# sti83lation in /is a;or /as b##n r#;oD#d b4 t/# ontrating 8arti#s T/# 8oli4 3nd#r onsid#ration is t48ial o ontrats pour autrui < t/is /arat#r b#ing 9ad# 9or# 9ani#st b4 t/# at t/at t/# d##as#d dri;#r 8aid it4 8#r#nt 0* o t/# orr#s8onding 8r#9i39s< @/i/ @#r# d#d3t#d ro9 /is @##Dl4 o99issions' Und#r t/#s# onditions< it is l#ar t/at t/# Co3ias ? @/o< ad9itt#dl4< ar# t/# sol# /#irs o t/# d##as#d ? /a;# a dir#t a3s# o ation against t/# Co98an4< and< sin# t/#4 o3ld /a;# 9aintain#d t/is ation b4 t/#9s#l;#s< @it/o3t t/# assistan# o t/# Ins3r#d< it go#s @it/o3t sa4ing t/at t/#4 o3ld and did 8ro8#rl4 oin t/# latt#r in iling t/# o98laint /#r#in'
@A/))#AN %s. NATIONAL BAN@ &G'R' NO' %7)0)< SEPTE:BER .,< %,.%'5
ST4IIT, J.: )ACTS! G#org# A' a39an< @as t/# 8r#sid#nt o a do9#sti or8oration #ngag#d /i#l4 in t/# #8ortation o /#98 ro9 t/# P/ili88in# Islands and Dno@n as t/# P/ili88in# Fib#r and Prod3# Pag# $ %++
Obligations and Contrats! "otrin#s and Cas# "ig#sts
Co98an4< o @/i/ o98an4 t/# 8lainti a88ar#ntl4 /#ld in /is o@n rig/t n#arl4 t/# #ntir# iss3# o a8ital stoD' H# @as bas#d in N#@ YorD Cit4 and as t/# 8r#sid#nt o t/# said o98an4< /# @as #ntitl#d to r##i;# a di;id#nd- as 8#r instr3tion< WiDs @/o @orD#d as t/# tr#as3r#r o t/# o98an4< @#nt to t/# #/ang# d#8art9#nt o PNB and r#3#st#d a t#l#gra8/i trans#r o t/# 9on#4 to a39an' T/# PNB agr##d @it/ additional /arg#s or t/# transation' T/# tr#as3r#r iss3#d a /#D to PNB and it @as a#8t#d' T/# PNBs r#8r#s#ntati;# in N#@ YorD s#nt a 9#ssag# s3gg#sting t/# ad;isabilit4 o @it//olding t/is 9on#4 ro9 a39an< in ;i#@ o /is r#l3tan# to a#8t #rtain bills o t/# o98an4' PNB a3i#s#d in t/is and dis8at/#d to its NY ag#n4 a 9#ssag# to @it//old t/# a39an 8a49#nt as s3gg#st#d' :#an@/il#< WiDs t/#n inor9#d a39an t/at /is di;id#nds /ad b##n @ir#d to /is r#dit in t/# NY ag#n4 o PNB' So a39an @#nt to PNB oi# in NYC and d#9and#d t/# 9on#4< /o@#;#r< /# @as r#3s#d 8a49#nt' So /# il#d t/is o98laint'
ISS/E! W/#t/#r or not a39an /as a rig/t o ation against PNBX
7ELD! In Art' %.06< 8ar' .< s/o3ld t/# ontrat ontain an4 sti83lation in a;or o a t/ird 8#rson< /# 9a4 d#9and its 3lill9#nt< 8ro;id#d /# /as gi;#n noti# o /is a#8tan# to t/# 8#rson bo3nd b#or# t/# sti83lation /as b##n r#;oD#d' In t/# lig/t o t/# onl3sion t/3s stat#d< t/# rig/t o t/# 8lainti to 9aintain t/# 8r#s#nt ation is l#ar #no3g/- or it is 3nd#niabl# t/at t/# banDKs 8ro9is# to a3s# a d#init# s39 o 9on#4 to b# 8aid to t/# 8lainti in NYC is a sti83lation in /is a;or @it/in t/# 9#aning o t/# 8aragra8/ abo;# 3ot#d- and t/# ir39stan#s 3nd#r @/i/ t/at 8ro9is# @as gi;#n dislos# an #;id#nt int#ntion on t/# 8art o t/# ontrating 8arti#s t/at t/# 8lainti s/o3ld /a;# t/# 9on#4 38on d#9and in NYC' T/# r#ognition o t/is 3n3alii#d rig/t in t/# 8lainti to r##i;# t/# 9on#4 i98li#s in o3r o8inion t/# rig/t in /i9 to 9aintain an ation to r#o;#r it' It @ill b# not#d t/at 3nd#r t/# 8aragra8/ it#d a t/ird 8#rson s##Ding to #nor# o98lian# @it/ a sti83lation in /is a;or 93st signi4 /is a#8tan# b#or# it /as b##n r#;oD#d' In t/is as# t/# 8lainti l#arl4 signii#d /is a#8tan# to t/# banD b4 d#9anding 8a49#nt- and alt/o3g/ PNB /ad alr#ad4 dir#t#d its NY ag#n4 to @it//old 8a49#nt @/#n t/is d#9and @as 9ad#< t/# rig/ts o t/# 8lainti annot b# onsid#r#d to as t/#r# 3s#d< 93st b# 3nd#rstood to i98l4 r#;oation b4 t/# 93t3al ons#nt o t/# ontrating 8arti#s< or at l#ast b4 dir#tion o t/# 8art4 83r/asing /# #/ang#' T/3s< it @as said< QCabl# trans#rs< t/#r#or#< 9#an a 9#t/od o trans9itting 9on#4 b4 abl# @/#r#in t/# s#ll#r #ngag#s t/at /# /as t/# balan# at t/# 8oint on @/i/ t/# 8a49#nt is ord#r#d and t/at on r##i8t o t/# abl# dir#ting t/# trans#r /is orr#s8ond#nt at s3/ 8oint @ill 9aD# 8a49#nt to t/# b#n#iiar4 d#srib#d in t/# abl#' All t/#s# transation ar# 9att#rs o 83r/as# and sal# r#at# no tr3st r#lations/i8'Q Pag# $ %+,
Obligations and Contrats! "otrin#s and Cas# "ig#sts
:O/NG 0S. CA &G'R' NO' 6,0%+ 2ANUARY %1< %,+,5
5A4AS, J.: )ACTS! "##ndant P/ili88in# Holding< In' is t/# or9#r o@n#r o a 8i## o land loat#d at Sol#r St'< Sta' Cr3< :anila< and a t@o stor#4 b3ilding #r#t#d t/#r#on< onsisting o si 3nits- Unit %10* @/i/ is ;aant< Unit %10. o38i#d b4 Antonio Yo3ng< Unit %10) b4 R#b#a C' Yo3ng< Unit %107 b4 C/3i Wan and F#lisa Tan Y3< Unit %10+ b4 Fong YooD L3 and Ell#n Y## Fong and Unit %17* b4 t/# G3an H#ng Hard@ar# Rollo< 88' %)(%0' T/# o@n#r P/ili88in# Holding< In' s#3r#d an ord#r ro9 t/# Cit4 Engin##r o :anila to d#9olis/ t/# b3ilding' Antonio Yo3ng< t/#n a t#nant o said Unit %10.< il#d an ation to ann3l t/# Cit4 Engin##rKs d#9olition Ord#r Ci;il Cas# No' %.1++1 #ntitl#d Antonio S. Loung vs. 5hilippine 3olding, )nc. b#or# t/# t/#n Co3rt o First Instan# o :anila< Bran/ ===' As an inid#nt in said as#< t/# 8arti#s s3b9itt#d a Co98ro9is# Agr##9#nt to t/# Co3rt on S#8t#9b#r .)< %,+%' Paragra8/ 1 o said agr##9#nt 8ro;id#s t/at 8lainti Antonio S' Yo3ng and R#b#a Yo3ng and all 8#rsons lai9ing rig/ts 3nd#r t/#9 bind t/#9s#l;#s to ;ol3ntaril4 and 8#a#3ll4 ;aat# t/# 8r#9is#s @/i/ t/#4 @#r# o384ing as l#ss##s Units %10. and %10)< r#s8#ti;#l4 @/i/ ar# t/# s3b#t o t/# ond#9nation and d#9olition ord#r and to s3rr#nd#r 8oss#ssion t/#r#o to t/# d##ndant P/ili88in# Holding< In' @it/in sit4 7* da4s ro9 @ritt#n noti#< s3b#t to t/# 8ro;iso t/at s/o3ld d##ndant d#id#d to s#ll t/# s3b#t 8ro8#rt4 or 8ortion t/#r#o< Q8lainti and R#b#a C' Yo3ng /a;# t/# rig/t o irst r#3sal t/#r#o'Q Rollo< 8' ),' On S#8t#9b#r %6< %,+%< P/ili88in# Holding< In' /ad 8r#;io3sl4 sold t/# abo;# said 8ro8#rt4 d#srib#d in t/# o98ro9is# agr##9#nt b4 @a4 o daion in 8a49#nt to PH Cr#dit Cor8oration Rollo< 8' ),' On No;#9b#r ,< %,+.< t/# 8ro8#rt4 @as s3bdi;id#d into t@o 8ar#ls< on# .))'*, s'9' in ar#a o;#ring Units %10*< %10. and %10) TCT No' %0.)1, and t/# ot/#r .)%'6% s'9' in ar#a o;#ring Units %107< %10+ and %17* TCT No' %0.))* and bot/ titl#s @#r# 8la#d in t/# na9# o PH Cr#dit Cor8oration' On "##9b#r +< %,+.< PH Cr#dit Cor8oration sold t/# 8ro8#rt4 o;#r#d b4 TCT %0.)1, to t/# Bl#ss#d Land "#;#lo89#nt Cor8oration r#8r#s#nt#d b4 its Pr#sid#nt Antonio T' S' Yo3ng- and on S#8t#9b#r %7< %,+1< PH Cr#dit Cor8oration sold t/# 8ro8#rt4 o;#r#d b4 TCT %0.))* #9braing Units %107< %10+ and %17* to s8o3s#s Fong YooD L3 and Ell#n Y## Fong Rollo< 8' %0'
Pag# $ %,*
Obligations and Contrats! "otrin#s and Cas# "ig#sts
ISS/E! W/#t/#r or not 8#tition#r an #nor# t/# o98ro9is# agr##9#nt
7ELD! T/is iss3# /as alr#ad4 b##n s3ar#l4 s#ttl#d b4 t/is Co3rt in t/# n#gati;# in J.2. Tuason Q Co., )nc. v. Cada$pog 6 SCRA +*+ &%,715@/#r# it @as r3l#d t/at a88#llant is not #ntitl#d to #nor# a o98ro9is# agr##9#nt to @/i/ /# @as not a 8art4 and t/at as to its ##t and so8#< it /as b##n d#t#r9in#d in t/# s#ns# t/at its ##ti;it4 i at all< is li9it#d to t/# 8arti#s t/#r#to and t/os# 9#ntion#d in t/# #/ibits T/# r#3isit#s o a sti83lation pour autrui or a sti83lation in a;or o a t/ird 8#rson ar# t/# ollo@ing! % t/#r# 93st b# a sti83lation in a;or o a t/ird 8#rson' . t/# sti83lation 93st b# a 8art< not t/# @/ol# o t/# ontrat' 1 t/# ontrating 8arti#s 93st /a;# l#arl4 and d#lib#rat#l4 on#rr#d a a;or 38on a t/ird 8#rson< not a 9#r# inid#ntal b#n#it or int#r#st' ) t/# t/ird 8#rson 93st /a;# o993niat#d /is a#8tan# to t/# obligor b#or# its r#;oation' 0 n#it/#r o t/# ontrating 8arti#s b#ars t/# l#gal r#8r#s#ntation or a3t/oriation o t/# t/ird 8art4' Flor#ntino ;' Enarnaion< Sr'< 6, SCRA %,1 &%,665' Ass39ing t/at 8#tition#r is orr#t in lai9ing t/at t/is is a sti83lation pour autrui it is 3nr#b3tt#d t/at s/# did not o993niat# /#r a#8tan# @/#t/#r #8r#ssl4 or i98li#dl4' S/# insists /o@#;#r< t/at t/# sti83lation /as not 4#t b##n r#;oD#d< so t/at /#r 8r#s#nt lai9 or d#9and is still ti9#l4'
D. STAGES O) CONS/##ATION1
CONTRACTS?
>NEGOTIATION8
ER)ECTION8
ANG :/ %. CA &G'R' No' %*,%.0- "##9b#r .< %,,)5
E)T@, J.: )a=ts? On 23l4 .,< %,+6< a S#ond A9#nd#d Co98laint or S8#ii P#ror9an# @as il#d b4 Ang Y3 As3nion and #/ Tiong< #t al'< against Bobb4 C3 Uni#ng and 2os# Tan b#or# t/# R#gional Trial Co3rt o :anila' T/# 8laintis @#r# t#nants or l#ss##s o r#sid#ntial and o99#rial s8a#s o@n#d b4 d##ndants in Binondo< :anila' On s#;#ral onditions d##ndants inor9#d t/# 8laintis t/at t/#4 ar# o#ring to s#ll t/# 8r#9is#s and ar# gi;ing t/#9 8riorit4 to a3ir# t/# sa9#' "3ring n#gotiations< Bobb4 C3 Uni#ng o#r#d a 8ri# o P7(9illion @/il# 8laintis 9ad# a o3nt#r o o#r o P0(9illion' Plainti t/#r#at#r asD#d t/# d##ndants to 83t t/#ir o#r in @riting to @/i/ Pag# $ %,%
Obligations and Contrats! "otrin#s and Cas# "ig#sts
t/# d##ndants a#d#d' In r#8l4 to d##ndants l#tt#r< 8laintis @rot#< asDing t/at t/#4 s8#i4 t/# t#r9s and onditions o t/# o#r to s#ll' W/#n t/# 8laintis did not r##i;# an4 r#8l4< t/#4 s#nt anot/#r l#tt#r @it/ t/# sa9# r#3#st'Sin# d##ndants ail#d to s8#i4 t/# t#r9s and onditions o t/# o#r to s#ll and b#a3s# o inor9ation r##i;#d t/at t/# d##ndants @#r# abo3t to s#ll t/# 8ro8#rt4< 8laintis @#r# o98#ll#d to il# t/# o98laint to o98#l d##ndants to s#ll t/# 8ro8#rt4 to t/#9' T/# o3rt dis9iss#d t/# o98laint on t/# gro3nd t/at t/# 8arti#s did not agr## 38on t/# t#r9s and onditions o t/# 8ro8os#d sal#< /#n#< t/#r# @as no ontat o sal# at all' On No;#9b#r %0< %,,*< t/# C3 Uni#ng s8o3s#s ##3t#d a "##d o Sal# trans#rring t/# 8ro8#rt4 in 3#stion to B3#n R#alt4 and "#;#lo89#nt Cor8oration' B3#n R#alt4< as t/# n#@ o@n#r o t/# s3b#t 8ro8#rt4< @rot# to t/# l#ss##s d#9anding t/# latt#r to ;aat# t/# 8r#9is#s' In its r#8l4< it stat#d t/at B3#n R#alt4 and "#;#lo89#nt Cor8oration bro3g/t t/# 8ro8#rt4 s3b#t to t/# noti# o lis 8#nd#ns'
Issue! W/#t/#r or not B3#n R#alt4 b# bo3nd b4 t/# @rit o ##3tion b4 ;irt3# o t/# noti# o lis 8#nd#nsX
7el"? An obligation is a 3ridial n##ssit4 to gi;#< to do or not to do Art' %%07< Ci;il Cod#' T/# obligation is 38on t/# on3rr#n# o t/# #ss#ntial #l#9#nts t/#r#o< ;i! a t/# ;in3l39 3ris or 3ridial ti# @/i/ is t/# #ii#nt a3s# #stablis/#d b4 t/# ;ario3s so3r#s o obligations- b t/# ob#t @/i/ is t/# 8r#station or ond3t< r#3ir#d to obs#r;#dand t/# s3b#t(8#rsons @/o< ;i#@#d d#9andabilit4 o t/# obligation ar# t/# ati;# oblig# and t/# 8assi;# obligor s3b#ts' A9ong t/# so3r#s o an obligation is a ontrat Art' %%06< @/i/ is a 9##ting o 9inds b#t@##n t@o 8#rsons @/#r#b4 on# binds /i9s#l< @it/ r#s8#t to t/# ot/#r< to gi;# so9#t/ing or to r#nd#r so9# s#r;i#' A ontrat 3nd#rgo#s ;ario3s stag#s t/at inl3d# its n#gotiation or 8r#8aration< its 8#r#tion and< inall4< its ons399ation' Until t/# ontrat is 8#r#t#d< it annot< as an ind#8#nd#nt so3r# o obligation< s#r;# as a binding 3ridial r#lation' In sal#s< 8arti3larl4< to @/i/ t/# as# at b#n/ b#longs< t/# ontrat is 8#r#t#d @/#n a 8#rson< all#d t/# s#ll#r< obligat#s /i9s#l< or a 8ri# #rtain< to d#li;#r and to trans#r o@n#rs/i8 o a t/ing or rig/t to anot/#r< all#d t/# b34 #r< o;#r @/i/ t/# latt#r agr##s' T/# r#gistration o lis pendens 93st b# ind#8#nd#ntl4 addr#ss#d in a88ro8riat# 8ro##dings' T/#r#or#< B3#n R#alt4 annot b# /#ld s3b#t to t/# @rit o ##3tion iss3#d b4 t/# r#s8ond#nt 23dg#< l#t alon# o3st#d ro9 t/# o@n#rs/i8 and 8oss#ssion o t/# 8ro8#rt4< @it/o3t irst b#ing d3l4 aord#d its da4 in o3rt'
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Obligations and Contrats! "otrin#s and Cas# "ig#sts
I. NEGOTIATION * ARTS. &(&9 TO &(- &. ART. &(-5 0S. ART. &529 SO/T7 3ESTERN S/GAR 0S. ATLANTIC G/L) &G'R' NO' L(61+.< 2UNE .,< %,005
KA@T)STA A>I%", J.: )ACTS! On :ar/ .)< %,01< d##ndant(a88#llant Atlanti grant#d 8lainti(a88#ll## So3t/@#st#rn an o8tion 8#riod o nin#t4 da4s to b34 t/# or9#rs barg# No' %* or t/# s39 o P1*<***' On :a4 %% o t/# sa9# 4#ar< So3t/@#st#rn Co98an4 o993niat#d its a#8tan# o t/# o8tion to Atlanti t/ro3g/ a l#tt#r< to @/i/ t/# latt#r r#8li#d t/at t/#ir 3nd#rstanding @as t/at t/# Qo#r o o8tionQ is to b# a as/ transation and to b# ##t#d Qat t/# ti9# t/# lig/t#r is a;ailabl#'Q On 23n# .0< Atlanti ad;is#d t/# So3t/@#st#rn Co98an4 t/at sin# t/#r# is still 3rt/#r @orD or it< t/# barg# o3ld not b# t3rn#d o;#r to t/# latt#r o98an4' On 23n# .6< %,01< t/# So3t/@#st#rn Co98an4 il#d t/is ation to o98#l Atlanti to s#ll t/# barg# in lin# @it/ t/# o8tion< d#8ositing @it/ t/# o3rt a /#D o;#ring t/# s39 o P1*<***< b3t said /#D @as lat#r @it/dra@n @it/ t/# a88ro;al o t/# o3rt' On 23n# .,< t/# Atlanti @it/dr#@ its Qo#r o o8tionQ @it/ d3# noti#s to So3t/@#st#rn Co98an4 stating t/at t/# o8tion @as grant#d 9#r#l4 as a a;or' T/# Atlanti ont#nd#d t/at t/# o8tion to s#ll it 9ad# to So3t/@#st#rn Co98an4 is n3ll and ;oid b#a3s# said o8tion to s#ll is not s388ort#d b4 an4 onsid#ration' T/# trial o3rt grant#d /#r#in 8lainti(a88#ll## So3t/@#st#rn Co98an4s ation or s8#ii 8#ror9an# and ord#r#d /#r#in d##ndant(a88#llant Atlanti to 8a4 da9ag#s #3i;al#nt to 7 8#r #nt39 8#r ann39 on t/# s39 o P1*<*** ro9 t/# dat# o t/# iling o t/# o98laint'
ISS/E! W/#t/#r or not Atlanti is liabl# or s8#ii 8#ror9an# and to 8a4 da9ag#s in a;or o So3t/@#st#rn Co98an4'
7ELD! T/# Co3rt r#it#rat#d t/at Qan a#8t#d 3nilat#ral 8ro9is#Q an onl4 /a;# a binding ##t i s388ort#d b4 a onsid#ration< @/i/ 9#ans t/at t/# o8tion an still b# @it/dra@n< #;#n i a#8t#d< i said o8tion is not s388ort#d b4 an4 onsid#ration' T/# o8tion t/at Atlanti /ad 8ro;id#d @as @it/o3t onsid#ration< /#n#< an b# @it/dra@n not@it/standing So3t/@#st#rn Co98an4s a#8tan# o said o8tion' A9#rian 3ris8r3d#n# /old t/at an o#r< on# a#8t#d< annot b# @it/dra@n< r#gardl#ss o @/#t/#r it is s388ort#d or not b4 a onsid#ration< b3t t/# s8#ii 8ro;isions o Artil# %)6, Pag# $ %,1
Obligations and Contrats! "otrin#s and Cas# "ig#sts
o99ands ot/#r@is#' W/il# 3nd#r t/# Qo#r o o8tionQ in 3#stion a88#llant Atlanti /as ass39#d a l#ar obligation to s#ll its barg# to a88#ll## So3t/@#st#rn Co98an4 and t/# o8tion /as b##n ##ris#d in aordan# @it/ its t#r9s< and t/#r# a88#ars to b# no ;alid or 3stiiabl# r#ason or t/# or9#r to @it/dra@ its o#r< t/# Co3rt annot ado8t a di#r#nt attit3d# b#a3s# t/# la@ on t/# 9att#r is l#ar'
AT@INS @ROLL AND CO., INC. 0S. C/A 7IAN TE@ &G'R' NO' L(,+6%< 2ANUARY 1%< %,0+5
KI><">, J.: )ACTS! On S#8t#9b#r %1< %,0%< 8#tition#r AtDins roll Co' AtDins s#nt a l#tt#r to r#s8ond#nt B' C3 Hian T#D Hian T#D o#ring a )** artons o L3n#ta brand Sardin#s in To9ato Sa3# )+ %0( o' O;als at +'.0 8#r arton< b 1** artons o L3n#ta brand Sardin#s Nat3ral )+%0 o' talls at 7'.0 8#r arton< and 1** artons o L3n#ta brand Sardin#s in To9ato Sa3# %**0(o' talls at 6')+ 8#r arton< @it/ all o t/# o#rs s3b#t to r#8l4 b4 S#8t#9b#r .1< %,0%' Hian T#D 3nonditionall4 a#8t#d t/# said o#r t/ro3g/ a l#tt#r d#li;#r#d on S#8t#9b#r .%< %,0%< b3t AtDins ail#d to d#li;#r t/# o99oditi#s d3# to t/# s/ortag# o at/ o sardin#s b4 t/# 8aD#rs in Caliornia' Hian T#D< t/#r#or#< il#d an ation or da9ag#s in t/# CFI o :anila @/i/ grant#d t/# sa9# in /is a;or' U8on AtDins a88#al< t/# Co3rt o A88#als air9#d said d#ision b3t r#d3#d t/# da9ag#s to P1<.)*'%0 r#8r#s#nting 3nr#ali#d 8roits' AtDins /#r#in ont#nds t/at t/#r# @as no s3/ ontrat o sal# b3t onl4 an o8tion to b34< @/i/ @as not #nor#abl# or laD o onsid#ration b#a3s# it is 8ro;id#d 3nd#r t/# .nd 8aragra8/ o Artil# %)6, o t/# N#@ Ci;il Cod# t/at Qan a#8t#d 3nilatat#ral 8ro9is# to b34 or to s#ll a d#t#r9inat# t/ing or a 8ri# #rtain is binding 38on t/# 8ro9isor i t/# 8ro9is# is s388ort#d b4 a onsid#ration distint ro9 t/# 8ri#' AtDins also insist#d t/at t/# o#r @as a 9#r# o#r o o8tion< b#a3s# t/# Qir9 o#rQ @as a ontin3ing o#r to s#ll 3ntil S#8t#9b#r .1'
ISS/E! W/#t/#r or not t/#r# is a ontrat o sal#'
7ELD! P#tition#rs arg39#nt ass39#d t/at onl4 a 3nilat#ral 8ro9is# aros# @/#n t/# r#s8ond#nt a#8t#d t/# o#r< @/i/ is inorr#t b#a3s# a bilat#ral ontrat to s#ll and to b34 @as r#at#d 38on r#s8ond#nts a#8tan#' Had B' C3a Hian T#D baD#d o3t at#r a#8ting< b4 r#3sing to g#t t/# sardin#s and or to 8a4 or t/#ir 8ri#< /# o3ld also b# s3#d' B3t /is l#tt#r(r#8l4 to AtDins indiat#d t/at /# a#8t#d Qt/# Pag# $ %,)
Obligations and Contrats! "otrin#s and Cas# "ig#sts
ir9 o#r or t/# sal#Q and t/at Qt/# 3nd#rsign#d b34#r /as i99#diat#l4 il#d an a88liation or i98ort li#ns#' At#r a#8ting t/# 8ro9is# and b#or# /# ##ris#s /is o8tion< t/# /old#r o t/# o8tion is not bo3nd to b34' In t/is as# at bar< /o@#;#r< 38on r#s8ond#nts a#8tan# o /#r#in 8#tition#rKs o#r< a bilat#ral 8ro9is# to s#ll and to b34 #ns3#d< and t/# r#s8ond#nt /ad i99#diat#l4 ass39#d t/# obligations o a 83r/as#r'
SANC7E; 0S. RIGOS &G'R' NO' L(.0),) 2UNE %)< %,6.5
C">CI5C)">, C.J.: )ACTS! In an instr39#nt #ntitl#d QO8tion to P3r/as#
ISS/E! W/#t/#r or not t/#r# is a Contrat to B34 and S#ll
7ELD! T/# instr39#nt ##3t#d in %,7% is not a Qontrat to b34 and s#ll
Obligations and Contrats! "otrin#s and Cas# "ig#sts
in t/# ontrat to indiat# t/at /#r aor#9#ntion#d agr##9#nt< 8ro9is# and 3nd#rtaDing is s388ort#d b4 a onsid#ration Qdistint ro9 t/# 8ri#Q sti83lat#d or t/# sal# o t/# land' T/# lo@#r o3rt r#li#d 38on Artil# %10) o t/# Ci;il Cod# @/#n it 8r#s39#d t/# #ist#n# o said onsid#ration< b3t t/# said Artil# onl4 a88li#s to ontrats in g#n#ral'
Ho@#;#r< it is not Artil# %10) b3t t/# Artil# %)6, o t/# sa9# Cod# @/i/ is ontrolling in t/# as# at bar b#a3s# t/# latt#rs .nd 8aragra8/ r##rs to Qsal#sQ in 8arti3lar< and< 9or# s8#iiall4< to Qan a#8t#d 3nilat#ral 8ro9is# to b34 or to s#ll'Q Sin# t/#r# 9a4 b# no ;alid ontrat @it/o3t a a3s# or onsid#ration< t/# 8ro9isor is not bo3nd b4 /is 8ro9is# and 9a4< aordingl4< @it/dra@ it' P#nding noti# o its @it/dra@al< /is a#8t#d 8ro9is# 8artaD#s< /o@#;#r< o t/# nat3r# o an o#r to s#ll @/i/< i a#8t#d< r#s3lts in a 8#r#t#d ontrat o sal#' U8on 9at3r# d#lib#ration< t/# Co3rt r#it#rat#s t/# dotrin# laid do@n in t/# AtDins as# and d##9#d abandon#d or 9odii#d t/# ;i#@ ad/#r#d to in t/# So3t/@#st#rn Co98an4 as#'
R/RAL BAN@ O) ARANA/E 0S. RE#OLADO &G'R' NO' L(7.*0% :ARCH %+< %,+05
A'@)>", J.: )ACTS? Isidra R#9olado< a r#sid#nt o Rial< o@n#d a lot @it/ a b3ngalo@ @/i/ @as l#as#d to B#atri Cabagnot' T/# said lot is loat#d at :ola;# St'< Unit#d Parana3#< Rial' In %,77 s/# 9ortgag#d t/# lot to t/# R3ral BanD o Parana3# as s#3rit4 or a loan o P%0<***' S/# 8aid t/# loan' On A8ril %6< %,6% s/# again 9ortgag#d it to t/# banD' S/# ail#d to 8a4 t/# loan a9o3nting toP%+<***' T/# banD or#los#d t/# 9ortgag# on 23l4 .%< %,6. and bo3g/t t/# lot at t/# or#los3r# sal# at P..<%,.'6*' T/# lot /ad a on# 4#ar 8#riod o r#d#98tion @/i/ @as to #8ir# on A3g3st.%< %,61'On A3g3st + <%,61 t/# banD ad;is#d /#r t/at s/# /as 38 to A3g3st .1 to r#d##9 t/# 8ro8#rt4 @it/ t/# 8ri# a9o3nting to P .0<),%',7' No r#d#98tion @as 9ad#' T/# banD onsolidat#d its o@n#rs/i8 o t/# 8ro8#rt4 and @as iss3#d t/# titl# o t/# land on S#8t#9b#r 0' Ho@#;#r< on S#8t#9b#r .) t/# banD< again< #t#nd#d t/# d#adlin# to Otob#r 1%< @it/o3t s8#i4ing t/#r# 83r/as# 8ri#' On Otob#r .7< R#9olado and /#r da3g/t#r 8ro9is#d to 8a4 t/# banD P11<*** on Otob#r 1%' S/# ail#d to 9##t t/# d#adlin# and onl4 8aid t/# banD on No;#9b#r 0'T/# a9o3nt @as r#t3rn#d to /#r t/# ollo@ing da4 or t/# assistant 9anag#r did not int#nd to r##i;# t/# 9on#4 or t/# banD @as no long#r @illing to allo@ t/# r#83r/as#' On t/at da4< No;#9b#r 7< s/# il#d an ation to o98#l t/# banD to r#t3rn t/# 8ro8#rt4 to /#r or P.0<),%',7 8l3s int#r#st and ot/#r /arg#s and 8a4 P10<*** as da9ag#s' T/# r#83r/as# 8ri# @as not onsign#d' A noti# o lis 8#nd#ns @as r#gist#r#d' On No;#9b#r %0< t/# banD sold t/# 8ro8#rt4 to Pilar A4si8 or P0*<***< along @it/ t/# n#@ titl# iss3#d to A4si8 @it/ an annotation
Pag# $ %,7
Obligations and Contrats! "otrin#s and Cas# "ig#sts
o lis 8#nd#ns' T/# trial o3rt ord#r#d t/# banD to r#t3rn t/# 8ro8#rt4 to R#9olado 38on 8a49#nt o P.0<),%',7 8l3s int#r#st and ot/#r banD /arg#s and P%0<*** or da9ag#s'
ISS/E! W/#t/#r or not t/# 8ro8#rt4 9a4 b# r#t3rn#d to R#9olado
7ELD! T/#r# @as no binding agr##9#nt or its r#83r/as#' E;#n on t/# ass398tion t/at t/# banD s/o3ld b# bo3nd b4 its o99it9#nt to allo@ r#83r/as# on or b#or# Otob#r 1%< %,61< still R#9olado /ad no a3s# o ation b#a3s# s/# did not r#83r/as# t/# 8ro8#rt4 on t/at dat#' As a r3l#< #3it4 ollo@s t/# la@' T/#r# 9a4 b# a 9oral obligation< ot#n r#gard#d as an #3itabl# onsid#ration 9#aning o98assion< b3t i t/#r# is no #nor#abl# l#gal d3t4< t/# ation 93st ail alt/o3g/ t/# disad;antag#d 8art4 d#s#r;#s o99is#ration or s498at/4'
#ONTILLA 0S. CA &G'R' NO' L()6,7+' :AY ,< %,++5
>A4EASA, J.: )ACTS? An ation @as initiat#d in t/# Co3rt o First Instan# o Iloilo on A8ril .6< %,6. b4 E9ilio Aragon< 2r'< to o98#l Lina :ontilla to o98l4 @it/ a ;#rbal ontrat to s#ll to /i9 a 8i## o land sit3at#d at 5o#lacion, Iloilo Cit4< Dno@n as Lot No' ) o t/# Consolidat#d S3bdi;ision 8lan LRC Ps(%%7*0' In /is o98laint< Aragon lai9#d t/at in t/# last @##D o 23n#< %,7,< :ontilla /ad orall4 o#r#d to s#ll t/# lot to /i9 at a 8ri# o P06<70*'** at t/# rat# o P0*'** 8#r s3ar# 9#t#r< t/# 8ri# b#ing 8a4abl# at an4 ti9# @it/in a t/r##(4#ar 8#riod ro9 23n#< %,7, 8ro;id#d t/at Aragon onstr3t#d on t/# lot a /o3s# o strong 9at#rials and 8aid a no9inal 9ont/l4 r#ntal in t/# 9#anti9#- b3t d#s8it# AragonKs a#8tan# o t/# o#r< 3lill9#nt b4 /i9 o t/# s8#ii#d onditions< and /is s#asonabl# t#nd#r o t/# 83r/as# 8ri#< :ontilla /ad r#3s#d to o98l4 @it/ /#r obligation' In /#r ans@#r :ontilla at#goriall4 d#ni#d #;#r /a;ing #nt#r#d into s3/ an agr##9#nt< and s#t 38 t/# air9ati;# d##ns#s o % 3n#nor#abilit4 o t/# all#g#d agr##9#nt 3nd#r t/# Stat3t# o Fra3ds- and . ail3r# o t/# o98laint to stat# a a3s# o ation< no all#gation /a;ing b##n 9ad# t/#r#in o an4 onsid#ration or t/# 8ro9is# to s#ll distint and s#8arat# ro9 t/# 8ri#< as r#3ir#d b4 Artil# %)6, o t/# Ci;il Cod#'
ISS/E! Pag# $ %,6
Obligations and Contrats! "otrin#s and Cas# "ig#sts
W/#t/#r or not t/#r# is an #nor#abl# ontrat to s#ll'
7ELD! It is dii3lt to s## b4 @/at 8ro#ss o ratioination t/# Trial Co3rt arri;#d at t/# onl3sion t/at :ontillas ans@#r /ad ad9itt#d t/# o#r to s#ll as an4 s3/ ad9ission is absol3t#l4 8r#l3d#d b4 t/# s8#ii and 3n#3i;oal d#nial b4 :ontilla o t/# lai9#d ;#rbal ontrat to s#ll' S/# in at brand#d t/# all#gations to t/at ##t in t/# o98laint as o3trag#o3sl4 als#< antastiall4 ridi3lo3s and d#s8iabl# abriations o 8lainti ' Nor 9a4 an4 ad9ission b# in#rr#d ro9 t/# ir39stan# t/at :ontilla< a8art ro9 3n3alii#dl4 d#n4ing t/# ontrat to s#ll< /ad also ass#rt#d in /#r r#s8onsi;# 8l#ading t/at t/# ontrat @as 3n#nor#abl# b#a3s# ;iolati;# o t/# Stat3t# o Fra3ds and b#a3s# not s388ort#d b4 an4 onsid#ration distint ro9 t/# 8ri#' For @/il# t/os# d##ns#s i98l4 an a#8tan# b4 t/# 8l#ad#r o t/# tr3t/ o t/# agr##9#nt at @/i/ t/# d##ns#s ar# dir#t#d< t/# a#8tan# is at b#st /48ot/#tial< ass39#d onl4 or 83r8os#s o d#t#r9ining t/# ;alidit4 o t/# d##ns#s< b3t annot in an4 s#ns# b# taD#n as an 3nonditional and irr#tri#;abl4 binding at3al ad9ission' T/# i98ort o t/# ans@#r< o3/#d in lang3ag# t/at o3ld not b# 9ad# an4 8lain#r< is t/at t/#r# @as no ;#rbal ontrat to s#ll #;#r agr##d to b4 :ontilla< b3t t/at< #;#n ass39ing /48ot/#tiall4< or or t/# saD# o arg39#nt t/at t/#r# @as< t/# agr##9#nt @as 3n#nor#abl# b#a3s# in br#a/ o t/# Stat3t# o Fra3ds'
NATINO 0S. IAC &G'R' NO' 61061 :AY .1< %,,%5
AE)I, J4., J.: )ACTS! P#tition#rs Trinidad and E8ianio Natino ##3t#d a r#al(#stat# 9ortgag# in a;or o r#s8ond#nt( banD R3ral BanD o Ag3ilar< or s#3rit4 to a loan a9o3nting to P.***' On t/# agr##d dat#< t/# s8o3s#s ail#d to 8a4 t/# said loan and in t/# or#los3r# o t/# 8ro8#rt4< t/# banD @as t/# /ig/#st bidd#r at its a3tion' Along @it/ t/# #rtiiat# o sal#< a noti# or t/# r#d#98tion 8#riod @as s#nt to t/# s8o3s#s' Still< 38on t/# #8iration o t/# said 8#riod< no r#d#98tion @as 9ad#' U8on inaliation o t/# d##d o sal#< t/# s8o3s#s d#8osit#d P)*** to t/# banD< and stat#d t/at t/#4 @#r# grant#d t/# #t#nsion o t/# r#d#98tion 8#riod and it @as 3nd#rstood t/at it @as a 8a4 @/#n abl# arrang#9#nt' T/is said agr##9#nt @as not a88ro;#d b4 t/# banDs Board o "ir#tors< nor @as it ratii#d' T/# o3rt r3l#d in a;or o t/# banD < /#n# t/is 8#tition'
ISS/E! W/#t/#r or not t/# agr##9#nt is ;alid'
7ELD! Gi;#n t/# 8ro;isions o artil# %%+*< t/# ont#ntions o t/# 8#tition#r @o3ld b# 9#ritorio3s' Ho@#;#r< b#a3s# o t/# at t/at s3/ agr##9#nt @as not a88ro;#d b4 t/# Board o "ir#tors< it Pag# $ %,+
Obligations and Contrats! "otrin#s and Cas# "ig#sts
@as /#ld t/at a 9##ting o 9inds did not o3r< t/#r#or# 9aDing t/# said arrang#9#nt not binding' T/# as# @as dis9iss#d'
:AO @A SIN TRADING 0S. CA &G'R' NO' L(01+.* 2UNE %0< %,,.5
AE)I, J4., J.: )ACTS! In %,61< Constanio :aglana< 8r#sid#nt o Pri9# W/it# C#9#nt Cor8oration< s#nt an o#r l#tt#r to Yao a Sin Trading' T/# o#r stat#s t/at Pri9# W/it# is @illing to s#ll )0<*** bags o #9#nt at P.)'1* 8#r bag' T/# o#r l#tt#r @as r##i;#d b4 Yao a Sins 9anag#r< H#nr4 Yao' Yao a#8t#d t/# l#tt#r and 83rs3ant to t/# l#tt#r< /# s#nt a /#D in t/# a9o3nt o P.)1<***'** #3i;al#nt to t/# ;al3# o %*<*** bags o #9#nt' Ho@#;#r< t/# Board o "ir#tors o Pri9# W/it# r##t#d t/# o#r l#tt#r s#nt b4 :aglana b3t it onsid#r#d Yaos a#8tan# l#tt#r as a n#@ ontrat o#r /#n# t/# Board s#nt a l#tt#r to Yao t#lling /i9 t/at Pri9# W/it# is inst#ad @illing to s#ll onl4 %*<*** bags to Yao a Sin and t/at /# /as t#n da4s to r#8l4- t/at i no r#8l4 is 9ad# b4 Yao t/#n t/#4 @ill onsid#r it as an a#8tan# and t/at t/#r#at#r Pri9# W/it# s/all d#8osit t/# P.)1D /#D in its ao3nt and t/#n d#li;#r t/# #9#nts to Yao a Sin' H#nr4 Yao n#;#r r#8li#d' Lat#r< Yao a Sin s3#d Pri9# W/it# to o98#l t/# latt#r to o98l4 @it/ @/at Yao a Sin onsid#r#d as t/# tr3# ontrat< i'#'< )0<*** bags at P.)'1* 8#r bag' Pri9# W/it# in its d##ns# a;#rr#d t/at alt/o3g/ :aglana is #98o@#r#d to sign ontrats in b#/al o Pri9# W/it#< s3/ ontrats ar# still s3b#t to a88ro;al b4 Pri9# W/it#s Board< and t/#n it still r#3ir#s 3rt/#r a88ro;al b4 t/# National In;#st9#nt and "#;#lo89#nt Cor8oration NI"C< a go;#rn9#nt o@n#d and ontroll#d or8oration b#a3s# Pri9# W/it# is a s3bsidiar4 o NI"C' H#nr4 Yao ass#rts t/at t/# l#tt#r ro9 :aglana is a binding ontrat b#a3s# it @as 9ad# 3nd#r t/# a88ar#nt a3t/orit4 o :aglana'
ISS/E! W/#t/#r or not t/# Pr#sid#nt /as a3t/orit4 to #nt#r into binding ontrats o t/ird 8#rson
7ELD! T/# Board 9a4 #nt#r into ontrats t/ro3g/ t/# 8r#sid#nt' T/# 8r#sid#nt 9a4 onl4 #nt#r into ontrats 38on a3t/orit4 o t/# Board' H#n#< an4 agr##9#nt sign#d b4 t/# 8r#sid#nt is s3b#t to a88ro;al b4 t/# Board' UnliD# a g#n#ral 9anag#r liD# t/# as# o Franiso ;s GSIS< t/# 8r#sid#nt /as no a88ar#nt a3t/orit4 to #nt#r into binding ontrats @it/ t/ird 8#rsons' F3rt/#r< i ind##d t/# b4(la@s o Pri9# W/it# did 8ro;id# :aglana @it/ a88ar#nt a3t/orit4< t/is @as not 8ro;#n b4 Yao a Sin' As a r3l#< a88ar#nt a3t/orit4 9a4 r#s3lt ro9 % t/# g#n#ral 9ann#r< b4 @/i/ t/# or8oration /olds o3t an oi#r or ag#nt as /a;ing 8o@#r to at or< in ot/#r @ords< t/# a88ar#nt a3t/orit4 Pag# $ %,,
Obligations and Contrats! "otrin#s and Cas# "ig#sts
@it/ @/i/ it lot/#s /i9 to at in g#n#ral or . a3i#s#n# in /is ats o a 8arti3lar nat3r#< @it/ at3al or onstr3ti;# Dno@l#dg# t/#r#o< @/#t/#r @it/in or @it/o3t t/# so8# o /is ordinar4 8o@#rs' T/#s# ar# not 8r#s#nt in t/is as#' Also< t/# s3bs#3#nt l#tt#r b4 Pri9# W/it# to Yao a Sin is binding b#a3s# Yao a Sins ail3r# to r#s8ond onstit3t#s an a#8tan#< 8#r stat#d in t/# l#tt#r its#l @/i/ @as not ont#st#d b4 H#nr4 Yao d3ring trial'
DIA#ANTE 0S. CA &G'R' NO' L(0%+.) FEBRUARY 6< %,,.5
AE)I, J4., J.: )ACTS! A is/#r4 lot< #no98assing an ar#a o ,') /#tar#s and d#signat#d as Lot No' 0%+(A o t/# Cadastral S3r;#4 o "39angas< Iloilo< @as 8r#;io3sl4 o;#r#d b4 Fis/8ond P#r9it No' F(.*.% iss3#d in t/# na9# o An#ita "ionio' U8on An#itaKs d#at/< /#r /#irs< 8#tition#r "ia9ant# and Pri9iti;o "a#li< in/#rit#d t/# 8ro8#rt4 @/i/ t/#4 lat#r di;id#d b#t@##n t/#9s#l;#s- 8#tition#r got )')' /#tar#s @/il# "a#li got 0 /#tar#s' It is t/# 8#tition#rKs s/ar# t/at is t/# s3b#t o t/# 8r#s#nt ontro;#rs4' Pri9iti;o "a#li lat#r sold /is s/ar# to 8ri;at# r#s8ond#nt' On .% :a4 %,0,< 8#tition#r sold to 8ri;at# r#s8ond#nt /is l#as#/old rig/ts o;#r t/# 8ro8#rt4 in 3#stion or P+<***'** @it/ t/# rig/t to r#83r/as# t/# sa9# @it/in t/r## 1 4#ars ro9 said dat#' On %7 A3g3st %,7*< 8ri;at# r#s8ond#nt il#d an a88liation @it/ t/# B3r#a3 o Fis/#ri#s< dat#d %. 23l4 %,7*< or a is/8ond 8#r9it and a is/8ond l#as# agr##9#nt o;#r t/# #ntir# lot< s3b9itting t/#r#@it/ t/# d##ds o sal# ##3t#d b4 "a#li and t/# 8#tition#r' Pr#ss#d b4 3rg#nt inanial n##ds< 8#tition#r< on %6 Otob#r %,7*< sold all /is r#9aining rig/ts o;#r t/# 8ro8#rt4 in 3#stion to t/# 8ri;at# r#s8ond#nt or P)<***'**' On .0 Otob#r %,7*< 8ri;at# r#s8ond#nt< @it/ /is @i#Ks ons#nt< ##3t#d in a;or o t/# 8#tition#r an O8tion to R#83r/as# t/# 8ro8#rt4 in 3#stion @it/in t#n %* 4#ars ro9 said dat#< @it/ a t#n(4#ar gra# 8#riod' Pri;at# r#s8ond#nt s3b9itt#d to t/# B3r#a3 o Fis/#ri#s t/# d#init# d##d o sal#- /# did not< /o@#;#r< s3b9it t/# O8tion to R#83r/as#' T/#r#at#r< on . A3g3st %,7%< t/# B3r#a3 o Fis/#ri#s iss3#d to 8ri;at# r#s8ond#nt Fis/8ond P#r9it No' ),01(>- on %6 "##9b#r %,7.< it a88ro;#d FLA No' %16. in t/# latt#rKs a;or'
Pag# $ .**
Obligations and Contrats! "otrin#s and Cas# "ig#sts
On %% "##9b#r %,71< 8#tition#r< ont#nding t/at /# /as a ;alid t@#nt4(4#ar o8tion to r#83r/as# t/# s3b#t 8ro8#rt4< r#3#st#d t/# B3r#a3 o Fis/#ri#s to n3lli4 FLA No' %16. insoar as t/# said 8ro8#rt4 is on#rn#d' On %+ "##9b#r %,7)< /is l#tt#r(o98laint @as dis9iss#d' P#tition#r t/#n so3g/t a r#onsid#ration o t/# dis9issal- t/# sa9# @as d#ni#d on ., A8ril %,70' His a88#al to t/# S#r#tar4 o t/# "ANR @as liD#@is# dis9iss#d on 1* Otob#r %,7+' Again< on .* No;#9b#r %,7+< 8#tition#r so3g/t or a r#onsid#ration- t/is ti9#< /o@#;#r< /# @as s3#ss3l' On ., A3g3st %,7,< t/# "ANR S#r#tar4 grant#d /is 9otion in an Ord#r an#lling FLA No' %16.'
ISS/E! W/#t/#r or not t/# O8tion to R#83r/as# @as a 8ro9is# to s#ll'
7ELD! T/# O8tion to R#83r/as# ##3t#d b4 8ri;at# r#s8ond#nt in t/# 8r#s#nt as#< @as 9#r#l4 a pro$ise to sell < @/i/ 93st b# go;#rn#d b4 Artil# %)6, o t/# Ci;il Cod# @/i/ r#ads as ollo@s! Art' %)6,' ? A 8ro9is# to b34 and s#ll a d#t#r9inat# t/ing or a 8ri# #rtain is r#i8roall4 d#9andabl#' An a#8t#d 3nilat#ral 8ro9is# to b34 or to s#ll a d#t#r9inat# t/ing or a 8ri# #rtain is binding 38on t/# 8ro9issor i t/# 8ro9is# is s388ort#d b4 a onsid#ration distint ro9 t/# 8ri#' A 3nilat#ral 8ro9is# to b34 or s#ll is a 9#r# o#r< @/i/ is not on;#rt#d into a ontrat ##8t at t/# 9o9#nt it is a#8t#d' A#8tan# is t/# at t/at gi;#s li# to a 3ridial obligation< b#a3s#< b#or# t/# 8ro9is# is a#8t#d< t/# 8ro9issor 9a4 @it/dra@ it at an4 ti9#' U8on a#8tan#< /o@#;#r< a bilat#ral ontrat to s#ll and to b34 is r#at#d< and t/# o#r## ipso facto ass39#s t/# obligations o a 83r/as#r- t/# o#ror< on t/# ot/#r /and< @o3ld b# liabl# or da9ag#s i /# ails to d#li;#r t/# t/ing /# /ad o#r#d or sal#'
(. EARNEST #ONE: >ART. &54-1 0S. OTION #ONE: >ART. &5291 II. ER)ECTION * ARTS. &(&+, &(& AND &(&9 >-ND ARAGRA718 SEE ALSO ART. +5 O) T7E CODE O) CO##ERCE &. ESSENTIAL RE/ISITES O) A 0ALID CONTRACT A. CONSENT * REREAD ARTS. &(&9 TO &(- -. 37O ARE INCAACITATED TO GI0E CONSENT * ARTS. &(-2 TO &(-9 (. LAC@ O) CAACIT: >ART. &(-21 0S. 3ANT O) CAACIT: >ART. &56( &1 0S. DIS/ALI)ICATION >ART. 9 O) T7E )A#IL: CODE1 5. T7EOR: O) GENERAL CAACITIES 0S. T7EOR: O) SECIAL CAACITIES +. 0ICES O) CONSENT * ARTS. &((6 TO &(55 Pag# $ .*%
Obligations and Contrats! "otrin#s and Cas# "ig#sts
. SI#/LATION O) CONTRACTS * ARTS. &(5+ TO &(++ A. OBJECT ' ART. &(52 B. CA/SE * ART. &(+6 LIG/E; 0S. CA &G'R' NO' L(%%.)*< "ECE:BER %+< %,065
4ILIS, J.K.%., J.: )ACTS? Plainti a;#rr#d to b# a l#gal o@n#r< 83rs3ant to a d##d o donation o a land< ##3t#d in /#r a;or b4 t/# lat# o@n#r< Sal;ador P' Lo8#< on %+ :a4 %,)1' T/# d##ns# int#r8os#d @as t/at t/# donation @as n3ll and ;oid or /a;ing an illiit a3sa or onsid#ration< @/i/ @as t/# 8laintiKs #nt#ring into 9arital r#lations @it/ Sal;ador P' Lo8#< a 9arri#d 9an- and t/at t/# 8ro8#rt4 /ad b##n ad3diat#d to t/# a88#ll##s as /#irs o Lo8# b4 t/# o3rt o First Instan#< sin# %,),' T/# Co3rt o A88#als r##t#d t/# a88#llantKs lai9 on t/# basis o t/# @#ll( Dno@n r3l# Qin 8ari d#lito non orit3r atioQ as #9bodi#d in Artil# %1*7 o %++,
ISS/E! W/#t/#r or not CAs r##tion @as orr#t
7ELD! CA #rr#d in a88l4ing to t/# 8r#s#nt as# t/# 8ari d#lito r3l#' First< b#a3s# it an not b# said t/at bot/ 8arti#s /#r# /ad #3al g3ilt @/#n @# onsid#r t/at as against t/# d##as#d Sal;ador P' Lo8#< @/o @as a 9an ad;an#d in 4#ars and 9at3r# #8#ri#n#< t/# a88#llant @as a 9#r# 9inor< %7 4rs o ag#< @/#n t/# donation @as 9ad#- t/at t/#r# is no inding 9ad# b4 CA t/at s/# @as 3ll4 a@ar# o t/# t#r9s o t/# bargain #nt#r#d into b4 and Lo8# and /#r 8ar#nts- t/at< /#r a#8tan# in t/# d##d o donation Art' 6)% did not n##ssaril4 i98l4 Dno@l#dg# o onditions and t#r9s not s#t ort/ t/#r#in- and t/at t/# s3bstan# o t/# t#sti9on4 o t/# instr39#ntal @itn#ss#s is t/at it @as t/# a88#llantKs 8ar#nts @/o insist#d on t/# donation b#or# allo@ing /#r to li;# @it/ Lo8#' T/#s# ats ar# 9or# s3gg#sti;# o s#d3tion t/an o i99oral bargaining on t/# 8art o a88#llant' It 93st not b# orgott#n t/at ill#galit4 is not 8r#s39#d< b3t 93st b# d3l4 and ad#3at#l4 8ro;#d' S#ond< t/# r3l# t/at 8arti#s to an ill#gal ontrat< i #3all4 g3ilt4< @ill not b# aid#d b4 t/# la@ b3t @ill bot/ b# l#t @/#r# it inds t/#9< /as b##n int#r8r#t#d b4 t/is Co3rt as barring t/# 8art4 ro9 8l#ading t/# ill#galit4 o t/# bargain #it/#r as a a3s# o ation or as a d##ns#' CA orr#tl4 /#ld t/at Lo8# o3ld not donat# t/# #ntir#t4 o t/# 8ro8#rt4 in litigation< to t/# 8r#3di# o /is @i# :aria Ngo< b#a3s# said 8ro8#rt4 @as on3gal in /ara t#r and t/# rig/t o t/# /3sband to donat# o993nit4 8ro8#rt4 is stritl4 li9it#d b4 la@
Pag# $ .*.
Obligations and Contrats! "otrin#s and Cas# "ig#sts
ONG 0S. ONG &G'R' NO' L(76+++ OCTOBER +< %,+05
4I%"EA, J.: )ACTS? On F#br3ar4 .0< %,67< I9#lda Ong< or and in onsid#ration o P%'** and ot/#r ;al3abl# onsid#rations< ##3t#d a 3itlai9 o;#r a 8ar#l o land in :aDati in a;or o Sandra :ar3o< t/#n a 9inor' On No;#9b#r %,< %,+*< I9#lda r#;oD#d t/# 3itlai9 and donat#d t/# 8ro8#rt4 to /#r son R#' On 23n# .*< %,+1< Sandra< t/ro3g/ /#r g3ardial ad lit#9 Alr#do Ong< il#d an ation to r#o;#r t/# land and to d#lar# t/# donation to R# n3ll and ;oid' In t/#ir r#s8onsi;# 8l#ading< 8#tition#rs lai9#d t/at t/# 3itlai9 is #3i;al#nt to a donation @/i/ r#3ir#s a#8tan# b4 t/# don##< and sin# Sandra @as a 9inor< t/#r# @as no ;alid a#8tan#' T/# trial o3rt r3l#d t/at t/# 3itlai9 is #3i;al#nt to a sal#' T/# Int#r9#diat# A88#llat# Co3rt air9#d t/# d#ision'
ISS/E! W/#t/#r or not t/# 3itlai9 is #3i;al#nt to a d##d o sal#'
7ELD! T/# ##3tion o a d##d 83r8orting to on;#4 o@n#rs/i8 o a r#alt4 is in its#l 8ri9a ai# #;id#n# o t/# #ist#n# o a ;al3abl# onsid#ration< t/# 8art4 all#ging laD o onsid#ration /as t/# b3rd#n o 8ro;ing s3/ all#gation' E;#n granting t/at t/# >3itlai9 d##d in 3#stion is a donation< Artil# 6)% o t/# Ci;il Cod# 8ro;id#s t/at t/# r#3ir#9#nt o t/# a#8tan# o t/# donation in a;or o 9inor b4 8ar#nts o l#gal r#8r#s#ntati;#s a88li#s onl4 to on#ro3s and onditional donations @/#r# t/# donation 9a4 /a;# to ass39# #rtain /arg#s or b3rd#ns' "onation to an ina8aitat#d don## do#s not n##d t/# a#8tan# b4 t/# la@3l r#8r#s#ntati;# i said donation do#s not ontain an4 ondition' In si98l# and 83r# donation< t/# or9al a#8tan# is not i98ortant or t/# donor r#3ir#s no rig/t to b# 8rot#t#d and t/# don## n#it/#r 3nd#rtaD#s to do an4t/ing nor ass39#s an4 obligation' T/# >3itlai9 no@ in 3#stion do#s not i98os# an4 ondition'
BAGNAS %s. CA &G'R' No' L(1+),+- A3g3st %*< %,+,5
>A4EASA, J.: )a=ts? Hilario :at#39 o a@it< Ca;it#< di#d on %% :ar/ %,7)< singl#< @it/o3t as#ndants or d#s#ndants< and s3r;i;#d onl4 b4 ollat#ral r#lati;#s< o @/o9 Isaa< Enarnaion< Sil;#str#< :ai9ina< and Sito Bagnas< and Agatona Enarnaion< /is irst o3sins< @#r# t/# n#ar#st' :at#39 l#t no @ill< no d#bts< and an #stat# onsisting o ., 8ar#ls o land in a@it and I93s< Pag# $ .*1
Obligations and Contrats! "otrin#s and Cas# "ig#sts
Ca;it#< %* o @/i/ ar# in;ol;#d in t/# as#' On 1 A8ril %,7)< Rosa L' R#tonil< T#oilo Enarnaion and 2os# B' Na9ba4an< t/#9s#l;#s ollat#ral r#lati;#s o :at#39 t/o3g/ 9or# r#9ot# in d#gr##< r#gist#r#d @it/ t/# R#gistr4 o "##ds or t/# Pro;in# o Ca;it# . d##ds o sal# 83r8ort#dl4 ##3t#d b4 :at#39 in t/#ir a;or o;#ring %* 8ar#ls o land' Bot/ d##ds @#r# in Tagalog< sa;# or t/# Englis/ d#sri8tions o t/# lands on;#4#d 3nd#r on# o t/#9- and #a/ r#it#d t/# r#onsid#ration o t/# sal# to b# P%< s#r;i#s r#nd#r#d and to b# r#nd#r#d or :at#39s b#n#it' On# d##d @as dat#d 7 F#br3ar4 %,71 and o;#r#d 0 8ar#ls o land< and t/# ot/#r @as dat#d ) :ar/ %,71< o;#ring 0 ot/#r 8ar#ls< bot/< t/#r#or#< ant#dating :at#39s d#at/ b4 9or# t/an a 4#ar' It is ass#rt#d b4 t/# Bagnas< #t'al'< b3t d#ni#d b4 R#tonil< #t'al'< t/at said sal#s not@it/standing< :at#39 ontin3#d in t/# 8oss#ssion o t/# lands 83r8ort#dl4 on;#4#d 3ntil /is d#at/< t/at /# r#9ain#d t/# d#lar#d o@n#r t/#r#o and t/at t/# ta 8a49#nts t/#r#on ontin3#d to b# 8aid in /is na9#' W/at#;#r t/# tr3t/< /o@#;#r< is not r3ial- @/at is not dis83t#d is t/at on t/# str#ngt/ o t/# d##ds o sal#< R#tonil< #t'al' @#r# abl# to s#3r# titl# in t/#ir a;or o;#r 1 o t/# %* 8ar#ls o land on;#4#d t/#r#b4' On .. :a4 %,7)< Bagnas #t'al' o99#n#d s3it against R#tonil< #t'al' in t/# CFI Ca;it#< s##Ding ann3l9#nt o t/# d##ds o sal# as ititio3s< ra3d3l#nt or alsii#d< or< alt#rnati;#l4< as donations ;oid or @ant o a#8tan# #9bodi#d in a 83bli instr39#nt' Clai9ing o@n#rs/i8 8ro indi;iso o t/# lands s3b#t o t/# d##ds b4 ;irt3# o b#ing int#stat# /#irs o Hilario :at#39< Bagnas< #t' al' 8ra4#d or r#o;#r4 o o@n#rs/i8 and 8oss#ssion o said lands< ao3nting o t/# r3its t/#r#o and da9ag#s' Alt/o3g/ t/# o98laint originall4 so3g/t r#o;#r4 o all t/# ., 8ar#ls o land l#t b4 :at#39< at t/# 8r#( trial t/# 8arti#s agr##d t/at t/# ontro;#rs4 b# li9it#d to t/# %* 8ar#ls s3b#t o t/# 3#stion#d sal#s< and t/# Trial Co3rt ord#r#d t/# #l3sion o t/# %, ot/#r 8ar#ls ro9 t/# ation' O t/# %* 8ar#ls @/i/ r#9ain#d in litigation< , @#r# ass#ss#d or 83r8os#s o taation at ;al3#s aggr#gating P%*<0**'**' T/# r#ord do#s not dislos# t/# ass#ss#d ;al3# o t/# t#nt/ 8ar#l< @/i/ /as an ar#a o %<))1 s'9s' R#tonil< #t'al' d#ni#d t/# all#gations' At#r Bagnas< #t'al' /ad 8r#s#nt#d t/#ir #;id#n#< R#tonil< #t'al' il#d a 9otion or dis9issal ? in ##t< a d#93rr#r to t/# #;id#n# ? r#ass#rting t/# d##ns# s#t 38 in t/#ir ans@#r t/at Bagnas< #t'al'< as 9#r# ollat#ral r#lati;#s o Hilario :at#39 /ad no rig/t to i983gn t/# latt#rs dis8osition o /is 8ro8#rti#s b4 9#ans o t/# 3#stion#d on;#4an#s and s3b9itting< additionall4< t/at no #;id#n# o ra3d tainting said trans#rs /ad b##n 8r#s#nt#d' T/# Trial Co3rt grant#d t/# 9otion to dis9iss< /olding on t/# a3t/orit4 o Ar9#ntia ;s' Patriara< t/at Bagnas< #t'al'< as 9#r# ollat#ral r#lati;#s< not or#d /#irs< o Hilario :at#39< o3ld not l#gall4 3#stion t/# dis8osition 9ad# b4 said d##as#d d3ring /is li# ti9#< r#gardl#ss o @/#t/#r< as a 9att#r o ob#ti;# r#alit4< said dis8ositions @#r# ;alid or not- and t/at Bagnas< #t'al's #;id#n# o all#g#d ra3d @as ins3ii#nt< t/# at t/at t/# d##ds o sal# #a/ stat#d a onsid#ration o onl4 P% not b#ing in its#l #;id#n# o ra3d or si93lation' On a88#al b4 Bagnas< #t' al' to t/# Co3rt o A88#als< t/at o3rt air9#d< ad;#rting @it/ a88ro;al to t/# Trial Co3rts r#lian# on t/# Ar9#ntia r3ling @/i/< it @o3ld a88#ar< bot/ o3rts sa@ as d#n4ing< @it/o3t ##8tion< to ollat#rals< o a d##d#nt< not or#d /#irs< t/# rig/t to i983gn t/# latt#rs dis8ositions int#r ;i;os o /is 8ro8#rt4' T/# S38r#9# Co3rt r#;#rs#d t/# a88#al#d "#ision o t/# Co3rt o A88#als< and d#lar#d t/# 3#stion#d trans#rs ;oid and o no or# or ##t' T/# Co3rt ord#r#d t/# ann3l9#nt o s3/ #rtiiat#s o titl# R#tonil< #t'al' 9a4 /a;# obtain#d o;#r t/# 8ro8#rti#s s3b#t o said trans#rs< and ord#r#d t/#9 to r#t3rn to Bagnas< #t'al' 8oss#ssion o all t/# 8ro8#rti#s in;ol;#d in t/# Pag# $ .*)
Obligations and Contrats! "otrin#s and Cas# "ig#sts
ation< to ao3nt to t/# latt#r or t/# r3its t/#r#o d3ring t/# 8#riod o t/#ir 8oss#ssion< and to 8a4 t/# osts' No da9ag#s< attorn#4s ##s or litigation #8#ns#s @#r# a@ard#d< t/#r# b#ing no #;id#n# t/#r#o b#or# t/# Co3rt'
Issue? W/#t/#r or not t/# sal# is ;oid
7el"? T/# onsid#ration alon# t/at t/# a88ar#nt gross< not to sa4 #nor9o3s< dis8ro8ortion b#t@##n t/# sti83lat#d 8ri# in #a/ d##d o P%'** 8l3s 3ns8#ii#d and 3n3antii#d s#r;i#s and t/# 3ndis83t#dl4 ;al3abl# r#al(#stat# all#g#dl4 sold (( @ort/ at l#ast P%*<0**'** going onl4 b4 ass#ss9#nts or ta 83r8os#s @/i/< it is @#ll(Dno@n< ar# notorio3sl4 lo@ indiators o at3al ;al3# (( 8lainl4 and 3n3#stionabl4 d#9onstrat#s t/at t/#4 stat# a als# and ititio3s onsid#ration< and no ot/#r tr3# and la@3l a3s# /a;ing b##n s/o@n< t/# Co3rt o3nd bot/ said d##ds< insoar as t/#4 83r8ort to b# sal#s< not 9#r#l4 ;oidabl#< b3t ;oid ab initio' N#it/#r an t/# ;alidit4 o said on;#4an#s b# d##nd#d on t/# t/#or4 t/at t/#ir tr3# a3sa is t/# lib#ralit4 o t/# trans#ror and t/#4 9a4 b# onsid#r#d in r#alit4 donations< b#a3s# t/# la@ also 8r#srib#s t/at donations o i99o;abl# 8ro8#rt4< to b# ;alid< 93st b# 9ad# and a#8t#d in a 83bli instr39#nt< and it is not d#ni#d b4 t/# r#s8ond#nts t/at t/#r# /as b##n no s3/ a#8tan# @/i/ t/#4 lai9 is not r#3ir#d' T/# trans#rs in 3#stion b#ing ;oid< it ollo@s as a n##ssar4 ons#3#n# and onor9abl4 to t/# on3rring o8inion in Ar9#ntia< @it/ @/i/ t/# Co3rt 3ll4 agr##s< t/at t/# 8ro8#rti#s 83r8ort#dl4 on;#4#d r#9ain#d 8art o t/# #stat# o Hilario :at#39< said trans#rs not@it/standing< r#o;#rabl# b4 /is int#stat# /#irs< t/# 8#tition#rs /#r#in< @/os# stat3s as s3/ is not /all#ng#d'
E. )OR#S O) CONTRACTS * ARTS. &(+ TO &(+4 I. )OR 0ALIDIT: &. IN 3RITING A. DONATION * ART. 254 B. CO##ON CARRIERS LIABILIT: * ART. &255 C. AGENTS A/T7ORIT: * ART. &425 D. INTEREST ON LOAN * ART. &9+ E. ANTIC7RESIS * ART. -&(5 -. IN /BLIC INSTR/#ENTS A. DONATION * ART. 259 B. ARTNERS7I * ART. &22& AND &22( II. )OR EN)ORCEABILIT: &. STAT/TE O) )RA/D * ART. &56( III. )OR CON0ENIENCE &. TO A))ECT T7IRD ERSON * ART. &(+4 ). RE)OR#ATION O) INSTR/#ENTS * ARTS. &(+9 TO &(9 Pag# $ .*0
Obligations and Contrats! "otrin#s and Cas# "ig#sts
CABANAT/AN 0S. LA;ARO &G'R' NO' L(.,.07- 2UNE 1*< %,6%5
4ILIS, J.: )ACTS? Plainti(a88#llant so3g/t t/# r#or9ation o an agr##9#nt 83rs3ant to Artil# %10, o t/# N#@ Ci;il Cod#' T/# said l#as# @as #nt#r#d into on .+ "##9b#r %,0, b#t@##n 8lainti(a88#llant< t/ro3g/ its Cit4 :a4or< and d##ndants(a88#ll##s o;#r a 8ortion o Lot No' %0%% o Cabanat3an Cadastr# Cad' Cas# No' 1< G'L'R'O' R#' No' ,) sit3at#d in t/# Cit4 o Cabanat3an @/i/ 8lainti(a88#llant o@n#d< b4 s8#iiall4 d#l#ting 8aragra8/ 7 t/#r#o' T/# said 8aragra8/ gi;#s t/# d##ndants(a88#ll##s an o8tion to r#n#@ t/# l#as# or anot/#r %* 4#ars at#r t/# #8iration o t/# original 8#riod< and r#ads! 7' T/at at#r t/# #8iration o t/# t#n %* 4#ars ro9 2an3ar4 %< %,7*< t/# 8art4 o t/# s#ond 8art 9a4< at /is o8tion /oos# to #t#nd t/is l#as# or anot/#r 8#riod o t#n 4#ars' It is all#g#d< a9ong ot/#rs< t/at d3# to 9istaD# or aid#nt< t/# aor#said 8ro;ision @as ins#rt#d in t/# agr##9#nt and t/at t/# sa9# do#s not r#l#t t/# tr3# int#ntion o t/# 8arti#s' It is ont#nd#d t/at @/il# R#sol3tion No' %*1* o t/# :3nii8al Board o t/# Cit4 o Cabanat3an< a88ro;#d on< %6 "##9b#r %,0,
ISS/E! W/#t/#r or not t/# agr##9#nt an b# r#or9#d'
7ELD! E;#r4 8art4 to a ontrat /as a l#ar int#r#st t/at t/# instr39#nt bod4ing its t#r9s s/o3ld onor9 to t/# at3al and tr3# agr##9#nt /ad b4 and b#t@##n t/# ontrating 8arti#s' H#n#< i b4 aid#nt or 9istaD#< as #8r#ssl4 8l#ad#d in t/# o98laint< t/# do39#nt do#s not onor9 to or r#l#t t/# at3al agr##9#nt< #it/#r 8art4 an asD or t/# r#or9ation o t/# instr39#nt as 8ro;id#d b4 Artil#s %10,< #t s#' C/a8t#r )< Titl# .< BooD ) o t/# Ci;il Cod# o t/# P/ili88in#s< to or#stall 3t3r# litigations on t/# tr3# i98ort o t/# agr##9#nt' T/at t/# l#ss##Ks o8tion to r#n#@ t/# Contrat or anot/#r t#r9 o %* 4#ars @/i/ is all#g#d b4 a88#llant not to /a;# b##n int#nd#d b4 t/# 8arti#s @as not 4#t ##risabl# @/#n t/# s3it or Pag# $ .*7
Obligations and Contrats! "otrin#s and Cas# "ig#sts
r#or9ation @as instit3t#d b4 t/# 8#tition#r Cit4 8lainti b#lo@ b#a3s# t/# original and 3nont#st#d l#as# t#r9 o %* 4#ars /ad not 4#t #8ir#d< do#s not r#nd#r t/# ation 8r#9at3r#< or 8r#is#l4 its 83r8os# @as to /a;# s3/ o8tion #9bodi#d in t/# instr39#nt d#lar#d in##ti;# as on# not agr##d 38on b4 t/# 8arti#s' No og#nt r#ason #ists @it/ t/# 8lainti(a88#llant s/o3ld @ait or t/# la8s# o t/# irst t#n 4#ars b#or# /a;ing t/# instr39#nt r#or9#d< @/#n t/# inonsist#n4 b#t@##n it and t/# tr3# agr##9#nt #ist#d rig/t ro9 t/# ti9# t/# do39#nt @as ##3t#d' T/# ontrar4 r3l# in;oD#d b4 t/# a88#ll##< and s3stain#d b4 t/# o3rt b#lo@< t#nds to 9aD# t/# r#or9ation 9or# dii3lt< or t/# #;id#n# on t/# ti9# int#nt o t/# 8arti#s 9a4 disa88#ar b#or# t/# irst t#n 4#ars ar# o;#r'
COSIO 0S. ALILEO &G'R' NO' L(%+)0.< :AY 1%< %,705
4IA%A, J.: )ACTS? A t@o(stor4 b3ilding< @as or9#rl4 o@n#d b4 F#liisi9a Vda' d# Bara' It is loat#d at .0 or9#rl4 7 Anti8olo Str##t< Pasa4 Cit4< on a lot b#longing to t/# Hos8iio d# San 23an d# "ios' On Otob#r )< %,0*< t/is /o3s# and t/# l#as#/old rig/t to t/# lot @#r# bo3g/t b4 r#s8ond#nt C/#ri# Palil#o @/o 8aid 8art o t/# 83r/as# 8ri# and 9ortgag#d t/# /o3s# to s#3r# t/# 8a49#nt o t/# balan#' It a88#ars t/at r#s8ond#nt Palil#o d#a3lt#d in /#r obligation< b#a3s# o @/i/ t/# 9ortgag# @as or#los#d and t/# /o3s# @as ad;#rtis#d or sal#' Fort3nat#l4 or /#r< /o@#;#r< r#s8ond#nt Palil#o @as abl# to rais# 9on#4 on "##9b#r %+< %,0% b#or# t/# /o3s# o3ld b# sold at 83bli a3tion' On t/is dat#< r#s8ond#nt Palil#o r##i;#d ro9 8#tition#r B#atri Cosio d# Ra9a t/# s39 o P%.<*** in onsid#ration o @/i/ s/# sign#d a do39#nt #ntitl#d QConditional Sal# o R#sid#ntial B3ilding
Pag# $ .*6
Obligations and Contrats! "otrin#s and Cas# "ig#sts
At t/# instan# o /is sist#r< 8#tition#r Cosio d# Ra9a< t/# ot/#r 8#tition#r A3g3sto Cosio #nt#r#d t/# 8r#9is#s and b#gan t/# r#8air o t/# /o3s#' Soon at#r an ation @as il#d b4 r#s8ond#nt Palil#o against Cosio d# Ra9a or t/# r#or9ation o t/# d##d o pacto de retro sal# into a loan @it/ an #3itabl# 9ortgag#' T/is as# @as il#d in t/# Co3rt o First Instan# o Rial on "##9b#r )< %,0.' On# @##D at#r "##9b#r %%< r#s8ond#nt Palil#o il#d anot/#r ation in t/# :3nii8al Co3rt o Pasa4 Cit4< t/is ti9# s##Ding t/# ##t9#nt o 8#tition#r Cosio @/o< it @as all#g#d< /ad #nt#r#d and o38i#d t/# /o3s# @it/o3t t/# Dno@l#dg# and ons#nt o r#s8ond#nt Palil#o' 23st t/# sa9#< /o@#;#r< r#8air @orD @#nt on and alt/o3g/ at ti9#s int#rr38t#d it @as inall4 o98l#t#d in %,01 at a ost o P%.<***'
ISS/E! W/#t/#r or not t/#r# is r#or9ation o t/# d##d o sal#'
7ELD! T/# 8#tition#rs and t/# Co3rt o A88#als ar# in #rror in sa4ing t/at t/# or9#r /ad a rig/t to t/# 8oss#ssion o t/# /o3s# 3nd#r t/# d##d o pacto de retro sal#' P#tition#rs did not /a;# s3/ a rig/t at an4 ti9# and t/#4 Dn#@ t/is' In r#or9ing instr39#nts< o3rts do not 9aD# anot/#r ontrat or t/# 8arti#s S## Ci;il Cod#< Arts' %10,(%17, and t/# R#8ort o t/# Cod# Co99ission< 8' 07' T/#4 9#r#l4 in3ir# into t/# int#ntion o t/# 8arti#s and< /a;ing o3nd it< r#or9 t/# @ritt#n instr39#nt not t/# ontrat in ord#r t/at it 9a4 #8r#ss t/# r#al int#ntion o t/# 8arti#s S## )d '< Arts' %170 and %7*.' T/is is @/at @as don# in t/# #arli#r as# b#t@##n t/# 8arti#s' In /olding t/at t/# do39#nt #ntitl#d QConditional Sal# o R#sid#ntial B3ildingQ @as in at a 9ortgag#< t/is Co3rt said! QT/is do39#nt did not #8r#ss t/# tr3# int#ntion o t/# 8arti#s @/i/ @as 9#r#l4 to 8la# said 8ro8#rt4 t/# /o3s# as s#3rit4 or t/# 8a49#nt o t/# loan'Q Palil#o ;' Cosio< 0% O'G' 7%+% at 7%+) I t/at @as t/# int#ntion o t/# 8arti#s to onor9 to @/i/ t/#ir @ritt#n instr39#nt @as r#or9#d t/#n 8#tition#r Cosio d# Ra9a Dn#@ ro9 t/# b#ginning t/at s/# @as not #ntitl#d to t/# 8oss#ssion o t/# /o3s# b#a3s# s/# @as a 9#r# 9ortgag##' For t/# sa9# r#ason< s/# o3ld not /a;# b##n 9istaD#n as to t/# tr3# nat3r# o t/#ir agr##9#nt' H#n#< in bidding /#r brot/#r< 8#tition#r Cosio< to #nt#r t/# 8r#9is#s and 9aD# r#8airs and in lat#r o384ing t/# /o3s# /#rs#l< 8#tition#r Cosio d# Ra9a did so @it/ t/is Dno@l#dg#' As 8oss#ssors in bad ait/< 8#tition#rs ar# ointl4 liabl# or t/# 8a49#nt o r#ntal< t/# r#asonabl# ;al3# o @/i/< as o3nd b4 t/# a88#llat# o3rt is P1** a 9ont/' Art' 0),' S## L#r9a ;' "# la Cr3< 6 P/il' 0+% T/is inding is s388ort#d b4 t/# #;id#n# and @# ind no r#ason to dist3rb it'
Pag# $ .*+
Obligations and Contrats! "otrin#s and Cas# "ig#sts
G. INTERRETATION O) CONTRACTS * ARTS. &(26 TO &(29 GSIS 0S. CA &G'R' NO' L(0.)6+ OCTOBER 1*< %,+75
5A4AS, J.: )ACTS? In %,7%< /#r#in 8ri;at# r#s8ond#nts s8o3s#s N#9#nio R' :#dina and 2os#ina G' :#dina :#dinas or s/ort a88li#d @it/ t/# /#r#in 8#tition#r Go;#rn9#nt S#r;i# Ins3ran# S4st#9 GSIS or s/ort or a loan o P7**<***'**' T/# GSIS Board o Tr3st##s< in its R#sol3tion o "##9b#r .*< %,7%< a88ro;#d 3nd#r R#sol3tion No' 0*)% onl4 t/# a9o3nt o P10*<***'**< s3b#t to t/# ollo@ing onditions! t/at t/# rat# o int#r#st s/all b# , 8#r ann39 o98o3nd#d 9ont/l4- r#8a4abl# in t#n %* 4#ars at a 9ont/l4 a9ortiation o P)<)11'70 inl3ding 8rini8al and int#r#st< and t/at an4 install9#nt or a9ortiation t/at r#9ains d3# and 3n8aid s/all b#ar int#r#st at t/# rat# o ,%. 8#r 9ont/' T/# Oi# o t/# Eono9i Coordinator< in a .nd Indors#9#nt dat#d :ar/ .7< %,7.< 3rt/#r r#d3#d t/# a88ro;#d a9o3nt to P.,0<***'**' On A8ril )< %,7.< t/# :#dinas a#8ting t/# r#d3#d a9o3nt< ##3t#d a 8ro9issor4 not# and a r#al #stat# 9ortgag# in a;or o GSIS' On :a4 .,< %,7.< t/# GSIS< and on 23n# 7< %,7.< t/# Oi# o t/# Eono9i Coordinator< 38on r#3#st o t/# :#dinas< bot/ a88ro;#d t/# r#storation o t/# a9o3nt o P10*<***'** P.,0<***'** [ P00<***'** originall4 a88ro;#d b4 t/# GSIS' T/is P10*<***'** loan @as d#no9inat#d b4 t/# GSIS as Ao3nt No' 1%*00' On 23l4 7< %,7.< t/# :#dinas ##3t#d in a;or o t/# GSIS an A9#nd9#nt o R#al Estat# :ortgag#' U8on a88liation b4 t/# :#dinas< t/# GSIS Board o Tr3st##s ado8t#d R#sol3tion No' %.% on 2an3ar4 %+< %,71< as a9#nd#d b4 R#sol3tion No' 1)+ dat#d F#br3ar4 .0< %,71< a88ro;ing an additional loan o P.1*<***'** in a;or o t/# :#dinas on t/# s#3rit4 o t/# sa9# 9ortgag#d 8ro8#rti#s and t/# additional 8ro8#rti#s o;#r#d b4 TCT Nos' ),.1)< ),.10 and ),.17< to b#ar int#r#st at , 8#r ann39 o98o3nd#d 9ont/l4 and r#8a4abl# in t#n 4#ars' T/is additional loan o P.1*<***'** @as d#no9inat#d b4 t/# GSIS as Ao3nt No' 1%)).' B#ginning %,70< t/# :#dinas /a;ing d#a3lt#d in t/# 8a49#nt o t/# 9ont/l4 a9ortiation on t/#ir loan< t/# GSIS i98os#d ,%. int#r#st on an install9#nts d3# and 3n8aid' In %,76< t/# :#dinas b#gan d#a3lting in t/# 8a49#nt o ir# ins3ran# 8r#9i39s'
ISS/E! W/#t/#r or not t/# a9#nd#d RE: s38#rs#d#d t/# :ortgag# ontrat'
7ELD! Pag# $ .*,
Obligations and Contrats! "otrin#s and Cas# "ig#sts
B4 agr##9#nt o t/# 8arti#s t/# iss3#s in t/is as# ar# li9it#d to t/# loan o P10*<***'** d#no9inat#d as Ao3nt No' 1%*00 s3b#t o t/# A9#nd9#nt o R#al :ortgag# dat#d 23l4 7< %,7.< t/# int#r8r#tation o @/i/ is t/# 9aor iss3# in t/is as#' GSIS lai9s t/at t/# a9#nd9#nt o t/# r#al #stat# 9ortgag# did not s38#rs#d# t/# original 9ortgag# ontrat dat#d A8ril )< %,7. @/i/ @as b#ing a9#nd#d onl4 @it/ r#s8#t to t/# a9o3nt s#3r#d t/#r#b4< and t/# a9o3nt o 9ont/l4 a9ortiations' All ot/#r 8ro;isions o aor#said 9ortgag# ontrat inl3ding t/at on o98o3nding o int#r#st @#r# d##9#d r#@ritt#n and t/3s binding on and #nor#abl# against t/# r#s8ond#nt s8o3s#s' Aordingl4< 8a49#nts 9ad# b4 t/# :#dinas in t/# total a9o3nt o P,,%<+)0'01 @as a88li#d as ollo@s! t/# a9o3nt o P7**<),0'0% to Ao3nt No' 1%*00< P)77<,70'1% o @/i/ to int#r#st and P%11<01*'.* to 8rini8al and P1,*<+)0'77 to Ao3nt No' 1%)).< P.1*<66)'., to int#r#st and P%0,<,6%'16 to 8rini8al' On t/# ot/#r /and t/# :#dinas 9aintain t/at t/#r# is no #8r#ss sti83lation on o98o3nd#d int#r#st in t/# a9#nd9#nt o 9ortgag# ontrat o 23l4 7< %,7. so t/at t/# o98o3nd#d int#r#st sti83lation in t/# original 9ortgag# ontrat o A8ril )< %,7. @/i/ /as b##n s38#rs#d#d annot b# #nor#d in t/# lat#r 9ortgag#'
/NI0ERSIT: O) T7E 7ILIINES 0S. GABRIEL &G'R' No' 6*+.7- Otob#r %.< %,+65
@T)I44I<, J4., J.: )ACTS? On "##9b#r .6< %,77< t/# UP and B#ta< Constr3tion Co'< In'< #nt#r#d into a ontrat or t/# latt#r to onstr3t t/# Biologial Si#n# B3ilding o t/# U'P' Coll#g# o Agri3lt3r# at Los BaZos< Lag3na or a total l398 s39 8ri# o T/r## :illion S#;#n H3ndr#d Nin#t4 T@o T/o3sand T@o H3ndr#d Eig/t##n P#sos and S#;#n C#nta;os P1<6,.<.%+'*6' On 2an3ar4 )< %,76< B#ta< s3b(ontrat#d its 8l39bing @orDs to 8ri;at# r#s8ond#nt Alli#d Pl39bing Co98an4 r#8r#s#nt#d b4 its g#n#ral 9anag#r "o9ingo P' Gabri#l or t/# total a9o3nt o On# H3ndr#d Fit4 Fi;# T/o3sand Eig/t##n H3ndr#d T@#nt4 Eig/t and 7*%** P#sos P%00<+.+'7*' T/# 8l39bing ontrat @as d3l4 a88ro;#d b4 t/# U'P' Bidding Co99itt##' On t/# gro3nd t/at at#r Alli#d Pl39bing Co98an4 o98l#t#d its @orDs< B#ta< r#3s#d to r#9it t/# balan# o P7)<7.7'*+' 8l3s t/# 8a49#nt o additional @orDs asD#d b4 B#ta< in t/# total
Pag# $ .%*
Obligations and Contrats! "otrin#s and Cas# "ig#sts
a9o3nt o P)<*%6',*< t/# or9#r il#d a o98laint or Qs39 o 9on#4 @it/ da9ag#sQ against U'P' and B#ta< @it/ t/# Co3rt o First Instan# o Rial' T/# d##ndants d#ni#d t/# all#gations o t/# 8lainti t/at t/# latt#r /ad o98l#t#d its 8l39bing @orDs 3nd#r t/# s3b(ontrat' T/#4 ont#nd#d t/at t/#r# @as d#la4 in 8a49#nt d3# to t/# i98ro8#r and a3lt4 8l39bing onn#tions 9ad# b4 t/# 8lainti- t/at t/# 8lainti @as 3nabl# to o98l#t# t/# @orD sti83lat#d in t/# s3b(ontrat and t/at t/# @orD o98l#t#d inl3ding t/# additional @orDs b4 t/# 8lainti @#r# lat#r o3nd to b# grossl4 d##ti;# and /ad to b# r#8air#d and r#(don# b4 B#ta- t/at b#a3s# o t/# ino98#t#n# o t/# 8lainti< B#ta< @as o98#ll#d to #ngag# t/# s#r;i#s o anot/#r 8l39bing ontrator @/o r#8air#d t/# @orD- and t/at B#ta o;#r8aid t/# a9o3nt o P+%<7+7'** 3nd#r t/# 8l39bing s3b(ontrat @/i/ 8lainti is 3nd#r obligation to r#t3rn to B#ta' At#r trial on t/# 9#rits< t/# lo@#r o3rt r#nd#r#d a d#ision in a;or o t/# 8lainti' T/# dis8ositi;# 8ortion o t/#
ISS/E! W/#t/#r or not Uni;#rsit4 o t/# P/ili88in#s is solidarit4 liabl# @it/ B#ta< Constr3tion Co98an4< In'
7ELD! At 1,0, @as int#nd#d or 8ri;at# 8#rsons< o98ani#s< ir9s< or or8orations 3sing t/# s#r;i#s o ontrators @/o 9a4 #98lo4 t/#ir o@n ar8#nt#rs< 9asons< and labor#rs or /ir# s3b( ontrators' T/is is 9ad# #;#n 9or# #;id#nt b4 t/# at t/at Pr#sid#ntial "#r## No' )).' T/# Labor Cod# o t/# P/ili88in#s< Artil#s %*7 to %*, and its R3l#s and R#g3lations< R3l# VIII< S#tions 6(,< /a;# s38#rs#d#d At 1,0,' T/# Labor Cod# do#s not o;#r go;#rn9#nt #98lo49#nt' T/# a88liabl# la@ is At 17++ @/i/ is titl#d QAN ACT FOR THE PROTECTION OF PERSONS FURNISHING :ATERIAL AN" LABOR FOR THE CONSTRUCTION OF PUBLIC WORS'Q Pri;at# r#s8ond#nt s/o3ld /a;# r#3#st#d or a #rtii#d o84 o t/# ontrat and bond ro9 UP and s3#d B#ta Constr3tion and t/# s3r#t4 o98an4 or 3n8aid labor and 9at#rials inst#ad o 8ro##ding against UP' Und#r t/# ir39stan#s o t/is as#< UP is not solidarit4 liabl# @it/ B#ta< or t/# lai9s o t/# s3b(ontrator against B#ta'
BA: 0IE3 7OTEL, INC., 0S. @ER AND CO., LTD &G'R' NO' L(.+.16 AUGUST 1%< %,+.5
TII3A>RII, J.: Pag# $ .%%
Obligations and Contrats! "otrin#s and Cas# "ig#sts
)ACTS? So9#ti9# in 2an3ar4< %,0+< 8lainti(a88#llant Ba4 Vi#@ Hot#l< In'< t/#n t/# l#ss## arid o8#rator o t/# :anila Hot#l< s#3r#d a id#lit4 g3arant## bond ro9 d##ndant(a88#ll## #r Co'< Ltd'< or its ao3ntabl# #98lo4##s against ats o ra3d and dis/on#st4' Said d##ndant(a88#ll## #r Co'< Ltd'< is t/# P/ili88in# g#n#ral ag#nt o P/o#ni Ass3ran# Co'< Ltd' a or#ign or8oration d3l4 li#ns#d to do ins3ran# b3sin#ss in t/# P/ili88in#s' W/#n on# o t/# bond#d #98lo4##s< To9as E' Ablaa< @/il# ating in /is a8ait4 as as/i#r< @as diso;#r#d b4 8lainti(a88#llant to /a;# /ad a as/ s/ortag# and 3nr#9itt#d oll#tions in t/# total a9o3nt o P).<),*',0< it il#d lai9s or 8a49#nts on t/# said id#lit4 g3arant## bond b3t d##ndant(a88#ll## #r Co' d#ni#d and r#3s#d ind#9niiation and 8a49#nt' To #nor# its lai9s< 8lainti(a88#llant instit3t#d its o98laint< dat#d A3g3st 1*< %,70 doD#t#d as Ci;il Cas# No' 71%+% o t/# Co3rt o First Instan# o :anila' In its ans@#r< d##ndant(a88#ll## #r Co' 3stii#d its d#nial o t/# lai9s o 8lainti(a88#llant on ;ario3s r#asons< s3/ as non(o98lian# @it/ t/# onditions sti83lat#d in t/# ins3ran# 8oli4- non(8r#s#ntation o #;id#n# r#garding t/# ;ario3s /arg#s o dis/on#st4 and 9isr#8r#s#ntation against To9as E' Ablaa and non(8rod3tion o t/# do39#nts to 8ro;# t/# all#g#d loss' #r Co' liD#@is# a;#rr#d t/at it @as 9#r#l4 an ag#nt and( as s3/ it @as not liabl# 3nd#r t/# 8oli4' Plainti(a88#llant 9aintains t/at Condition No' + o t/# 8oli4 8ro;id#s or arbitration onl4 i an4 dis83t# s/o3ld aris# as to t/# a9o3nt o o98an4s liabilit4 ons#3#ntl4< t/# r##r#n# to arbitration is not a ondition 8r##d#nt to t/# iling o t/# s3it ontrar4 to t/# ins3r#r o98an4s 8ost3r#' Plainti(a88#llant 8oints o3t t/at in t/# instant as#< t/#r# is a total and o98l#t# n#gation o liabilit4' T/#r# is no dis83t# as to t/# a9o3nt o o98an4s liabilit4 b#a3s# t/is 8r#s388os#s an ad9ission o r#s8onsibilit4 alt/o3g/ not to t/# #t#nt o t/# ost t/#r#o< @/il# /#r# t/# ins3r#r d#ni#s liabilit4 @/oll4 and totall4'
ISS/E! W/#t/#r or not Condition No' + o t/# 8oli4 s/o3ld a88l4'
7ELD! T/# 8ro;isions o Condition No' +< 9or# s8#iiall4 t/# 8ortion t/#r#o @/i/ r#ads< i an4 dis83t# s/all aris# as to t/# a$ount o o98an4s liabilit4 3nd#r t/is 8oli4 M< do not a88#ar to r#3ir# an4 #t#nd#d int#r8r#tation' Condition No' + r#3ir#s arbitration onl4 as to dis83t#s r#garding t/# a$ount o t/# ins3r#rs liabilit4 b3t not as to an4 dis83t# as to t/# eistence or non( eistence o liabilit4' T/3s< Condition No' + o9#s into 8la4 onl4 i t/# ins3r#r ad9its liabilit4 b3t annot agr## @it/ t/# ins3r#d as to t/# a9o3nt t/#r#o and annot b# in;oD#d in as#s liD# t/at at bar @/#r# t/# ins3r#r o98l#t#l4 d#ni#s an4 liabilit4' "##ndants(a88#ll##s ont#ntion t/at 8lainti(a88#llants ail3r# to r#3#st arbitration 8ro##dings is a bar to its iling Pag# $ .%.
Obligations and Contrats! "otrin#s and Cas# "ig#sts
o t/# s3it at bar against t/# ins3r#r o98an4 annot b# s3stain#d< s8#iall4 onsid#ring t/# #stablis/#d 8rini8l# t/at ontrats o ad/#sion s3/ as t/# ins3ran# 8oli4 in 3#stion ar# to b# stritl4 onstr3#d in as# o do3bt against t/# ins3r#r'
ANGELES 0S. CALASAN; &G'R' NO' L()..+1 :ARCH %+< %,+05
@T)I44I<, J4., J.: )ACTS? On "##9b#r %,< %,06< d##ndants(a88#llants Urs3la Torr#s Calasan and 8laintis(a88#ll##s B3#na;#nt3ra Ang#l#s and T#oila 23ani #nt#r#d into a ontrat to s#ll a 8i## o land loat#d in Cainta< Rial or t/# a9o3nt o P1<,.*'** 8l3s 6 int#r#st 8#r ann39' T/# 8laintis(a88#ll##s 9ad# a do@n8a49#nt o P1,.'** 38on t/# ##3tion o t/# ontrat' T/#4 8ro9is#d to 8a4 t/# balan# in 9ont/l4 install9#nts o P)%'.* 3ntil 3ll4 8aid< t/# install9#nt b#ing d3# and 8a4abl# on t/# %,t/ da4 o #a/ 9ont/' T/# 8laintis(a88#ll##s 8aid t/# 9ont/l4 install9#nts 3ntil 23l4 %,77< @/#n t/#ir aggr#gat# 8a49#nt alr#ad4 a9o3nt#d to P)<011'1+' On "##9b#r 6< %,77< t/# d##ndants(a88#llants @rot# t/# 8lantis(a88#ll##s a l#tt#r r#3#sting t/# r#9ittan# o 8ast d3# ao3nts' On 2an3ar4 .+< %,76< t/# d##ndants(a88#llants an#ll#d t/# said ontrat b#a3s# t/# 8laintis ail#d to 9##t s3bs#3#nt 8a49#nts' T/# 8laintis l#tt#r @it/ t/#ir 8l#a or r#onsid#ration o t/# said an#llation @as d#ni#d b4 t/# d##ndants' T/# 8laintis(a88#ll##s il#d a as# b#or# t/# Co3rt o First Instan# to o98#l t/# d##ndant to ##3t# in t/#ir a;or t/# inal d##d o sal# all#ging int#r alia t/at at#r o983ting all s3bs#3#nt 8a49#nts or t/# land in 3#stion< t/#4 o3nd o3t t/at t/#4 /a;# alr#ad4 8aid t/# total a9o3nt inl3ding int#r#sts< r#alt4 ta#s and inid#ntal #8#ns#s' T/# d##ndants all#g#d in t/#ir ans@#r t/at t/# 8laintis ;iolat#d 8ar' 7 o t/# ontrat to s#ll @/#n t/#4 ail#d and r#3s#d to 8a4 andor o#r to 8a4 9ont/l4 install9#nts orr#s8onding to t/# 9ont/ o A3g3st< %,77 or 9or# t/an 0 9ont/s< t/#r#b4 onstraining t/# d##ndants to an#l t/# said ontrat'
ISS/E! W/#t/#r or not t/# Contrat to S#ll @as ;alidl4 an#ll#d'
7ELD! No' W/il# it is tr3# t/at 8ar'. o t/# ontrat obligat#d t/# 8laintis(a88#ll##s to 8a4 t/# d##ndants t/# s39 o P1<,.* 8l3s 6 int#r#st 8#r ann39< it is liD#@is# tr3# t/at 3nd#r 8ar %. t/# s#ll#r is obligat#d to trans#r t/# titl# to t/# b34#r 38on 8a49#nt o t/# said 8ri#' Pag# $ .%1
Obligations and Contrats! "otrin#s and Cas# "ig#sts
T/# ontrat to s#ll< b#ing a ontrat o ad/#sion< 93st b# onstr3#d against t/# 8art4 a3sing it' T/# S38r#9# Co3rt agr## @it/ t/# obs#r;ation o t/# 8laintis a88#ll##s to t/# # #t t/at t/# t#r9s o a ontrat 93st b# int#r8r#t#d against t/# 8art4 @/o drat#d t/# sa9#< #s8#iall4 @/#r# s3/ int#r8r#tation @ill /#l8 ##t 3sti# to b34#rs @/o< at#r /a;ing in;#st#d a big a9o3nt o 9on#4< ar# no@ so3g/t to b# d#8ri;#d o t/# sa9# t/r3 t/# 8ra4#d a88liation o a ontrat l#;#r in its 8/ras#olog4< ond#9nabl# in its lo8sid#dn#ss and in3rio3s in its ##t @/i/< in #ss#n#< and its #ntir#t4 is 9ost 3nair to t/# b34#rs'
T/3s< sin# t/# 8rini8al obligation 3nd#r t/# ontrat is onl4 P1<,.*'** and t/# 8laintis( a88#ll##s /a;# alr#ad4 8aid an aggr#gat# a9o3nt o P)<011'1+< t/# o3rts s/o3ld onl4 ord#r t/# 8a49#nt o t/# #@ r#9aining install9#nts b3t not 38/old t/# an#llation o t/# ontrat' U8on 8a49#nt o t/# balan# o P76%'76 @it/o3t an4 int#r#st t/#r#on< t/# d##ndant 93st i99#diat#l4 ##3t# t/# inal d##d o sal# in a;or o t/# 8laintis and ##3t# t/# n##ssar4 trans#r o do39#nts< as 8ro;id#d in 8ar'%. o t/# ontrat'
LABASAN 0S. LAC/ESTA &G'R' NO' L(.0,1% OCTOBER 1*< %,6+5
2@"< 5A%2A, J.: )ACTS? S8o3s#s La3#sta @#r# t/# o@n#rs o an 3nr#gist#r#d< irrigat#d ri#land in Iloos Nort#' T/#4 on;#4#d b4 9#ans o a @ritt#n do39#nt t/# land @it/ t/# rig/t to r#83r/as# at#r %* 4#ars' T/#4 ail#d to ##ris# t/#ir rig/t @it/in t/# sti83lat#d 8#riod' T/#4 il#d a 8#tition s##Ding t/# r#on;#4an# o t/# 8ar#l o land< all#g#dl4 as s#3rit4 or a loan' T/# trial o3rt r3l#d t/at t/# do39#nt ##3t#d b4 t/# La3#stas @as a pacto de retro sal# and t/at t/#4 lost t/#ir rig/t to r#d##9 t/# land or not /a;ing taD#n an4 st#8 @it/in t/# agr##d %* 4#ars' On a88#al< t/# Co3rt o A88#als s#t asid# t/# 3dg#9#nt o t/# trial o3rt and d#lar#d t/# ontrat an #3itabl# 9ortgag# and ord#r#d t/# Labasans to r#on;#4 t/# land< and t/at t/# loan b4 t/# La3#stas b# d##9#d 8aid ro9 t/# r3its o t/# 8ro8#rt4 @/i/ t/# Labasans /ad b##n r##i;ing or t/# 8ast 1. 4#ars'
ISS/E! W/#t/#r or not t/# ontrat is a pacto de retro sal# or an #3itabl# 9ortgag#'
Pag# $ .%)
Obligations and Contrats! "otrin#s and Cas# "ig#sts
7ELD! It is an #3itabl# 9ortgag#' It is a basi 3nda9#ntal r3l# in t/# int#r8r#tation o a ontrat t/at i t/# t#r9s t/#r#o ar# l#ar and l#a;# no do3bt 38on t/# int#ntion o t/# ontrating 8arti#s t/# lit#ral 9#aning o t/# sti83lation s/all ontrol< b3t @/#n t/# @ords a88#ar to b# ontrar4 to t/# #;id#nt int#ntion o t/# 8arti#s< t/# latt#r s/all 8r#;ail o;#r t/# or9#r Artil# %16*< NCC' In as# o do3bt on#rning t/# s3rro3nding ir39stan#s in t/# ##3tion o a ontrat< t/# l#ast trans9ission o rig/ts and int#r#st s/all 8r#;ail i t/# ontrat is grat3ito3s< and i on#ro3s< t/# do3bt is to b# s#ttl#d in a;or o t/# gr#at#st r#i8roit4 o int#r#st'
S: 0S. CA &G'R' NO' L(1,+01 AUGUST %6< %,+15
2I%I>C)"(3I44I4A, J.: Fats! On :ar/ .*< %,7,< 8#tition#r< B3#nas#nso SY< and 8ri;at# r#s8ond#nt< 2ai9# LUJON , #nt#r#d into a "istrib3tors/i8 Agr##9#nt< @/#r#b4 LUJON< as 8rod3#r< @o3ld s388l4 SY< as distrib3tor< sit4 9#tri tons 9ont/l4 o i8il(i8il l#a;#s at t/# 8ri# sti83lat#d t/#r#in' T/# agr##9#nt @as to last or t@o 4#ars< #t#ndibl# or anot/#r t@o 4#ars 38on 93t3al agr##9#nt o t/# 8arti#s' Fro9 :ar/ to 23n#< %,7,< or a 8#riod o a88roi9at#l4 t/r## 1 9ont/s< LUJON ##t#d d#li;#ri#s o a88roi9at#l4 %11'. 9#tri tons o i8il(i8il l#a;#s E/ibits QB("Q< ;al3#d at P.,<7)0'%)< s/ort o t/# sti83lat#d 3antit4 o 7* 9#tri tons a 9ont/' In 23n#< at#r t/# s#;#nt/ and #ig/t/ s/i89#nts< t/# d##ndant B3#nas#nso SY 8r#s#nt#d to t/# 8lainti 2ai9# LUJON t/# stat#9#nt o ao3nt< E/ibit "< @/#r#b4 d##ndant d#d3t#d ro9 t/# ;al3# o t/# s/i89#nts all t/# ad;an#s< inl3ding t/# s39 o P1<6**'** still d3# on t/# r#;ol;ing a8ital l#a;ing a n#t 8ro##d in a;or o t/# 8lainti in t/# s39 o P%<,71'%,' T/is @as r##i;#d b4 t/# 8lainti and /# sign#d t/# stat#9#nt o ao3nt< E/ibit "< on t/# 8ro9is# o t/# d##ndant t/at /# @o3ld s#nd t/# 9on#4 to t/# 8lainti' W/#n d##ndant ail#d to s#nd t/# r#;ol;ing a8ital to t/# 8lainti< t/# latt#r s#nt a t#l#gra9 on 23n# .%< %,7,< E/ibit E< r#it#rating /is r#3#st t/at d##ndant trans9it to /i9 i99#diat#l4 t/# agr##d a9o3nt and to @ir# /is r#8l4' "##ndant did not ans@#r t/is l#tt#r' Abo3t t/# #nd o 23l4< 8lainti a9# to :anila and asD#d t/# d##ndant to d#li;#r to /i9 t/# ad;an# a8ital' "##ndant did not gi;# it< and 8lainti /ad to b#g /i9 #;#n or /is #8#ns#s- and d##ndant ga;# /i9 t/# 9#asl4 a9o3nt o P0*'** or @/i/ /# sign#d a r##i8t dat#d 23l4 .,< %,7,' W/#n t/# ad;an# a8ital @as not Pag# $ .%0
Obligations and Contrats! "otrin#s and Cas# "ig#sts
ort/o9ing< t/# 8lainti @rot# t/# l#tt#r< E/ibit F< dat#d A3g3st 6< %,7,< r#3#sting t/at d##ndant orr#t t/# ;iolation o t/# t#r9s o t/# agr##9#nt @it/in sit4 da4s ro9 t/# r##i8t t/#r#o< and t/at Kt/# sa9# l#tt#r s/all b# t/# @ritt#n noti# in aordan# @it/ 8aragra8/ 7 o t/# ontrat'K "##ndant liD#@is# did not ans@#r t/is l#tt#r'
Issue? W/#t/#r or not Li3idat#d da9ag#s 93st b# r#d3#d
7el"? T/#r# is no 3#stion t/at li3idat#d da9ag#s o P.*<***'** @#r# agr##d 38oil b4 t/# 8arti#s in as# o br#a/ t/#r#o' T/#r# is no 3#stion #it/#r t/at SY /ad ;iolat#d t/# ontrat b4 not ontin3ing to 8ro;id# t/# r#;ol;ing a8ital' As 8ro;id#d or b4 Artil# ...6 o t/# Ci;il Cod#< /o@#;#r< Li3idat#d da9ag#s< @/#t/#r int#nd#d as an ind#9nit4 or a 8#nalt4< s/all b# #3itabl4 r#d3#d i t/#4 ar# in#3ito3s or 3nonsionabl#' In t/# 8r#s#nt as#< t/# Co3rt o A88#als o3nd as a at t/at LUJON Q/ad not d#li;#r#d t/# 7* tons o i8il(i8il l#a;#s 9ont/l4 as agr##d 38onQ< a at3al inding t/at is binding 38on 3s' H#< t/#r#or#< n#it/#r o98li#d ait/3ll4 @it/ t/# agr##9#nt' E3itabl4< t/#r#or#< sin# LUJON /ad also ;iolat#d t/# ontrat< alt/o3g/ t/# ;iolation @as not ationabl#< and in t/# ##ris# o t/# Co3rtKs disr#tion< @# r#d3# t/# li3idat#d da9ag#s to P%*<***'**< @/i/ a9o3nt< @# b#li#;#< is ad#3at# or t/# 83r8os# int#nd#d'
7. DE)ECTI0E CONTRACTS I. RESCISSIBLE CONTRACTS &. ART. &(46 >RESCISSION1 0S. ART. &&9& >RESOL/TION1 -. ARTS. &(4&, &(4-, &694, &&49, &+-, &+(5, &+(9, &+5-, &++, &+6, &+2 AND &+9 II. 0OIDABLE CONTRACTS * ART. &(96 &. #ODES TO ETING/IS7 AN ACTION )OR ANN/L#ENT III. /NEN)ORCEABLE CONTRACTS * ART. &56( ORD/NA 0S. )/ENTEBELLA &G'R' NO' %67+)%- 2UNE .,< .*%*5
EI%ASC", J4., J.: )ACTS? Antonita Ord3na 83r/as#d a r#sid#ntial lot ro9 Gabri#l Sr' 8a4abl# in install9#nts b3t no d##d o sal# @as ##3t#d' T/# install9#nts @#r# 8aid to Gabri#l Sr' and lat#r to Gabri#l 2r' at#r t/# d#at/ o t/# or9#r' I98ro;#9#nts @#r# t/#r#at#r introd3#d b4 8#tition#r and t/# latt#r #;#n 8aid its r#al 8ro8#rt4 ta sin# %,6*' UnDno@n to Ord3na< t/# 8ro8#rt4 /as b##n s3b#t to 3rt/#r ali#nations 3ntil t/# sa9# @as #d#d to r#s8ond#nt< F3#nt#b#lla< 2r' Ord3na< at#r b#ing d#9and#d b4 F3#nt#b#lla to ;aat# t/# dis83t#d land< t/#n il#d a Co98laint or Ann3l9#nt o Pag# $ .%7
Obligations and Contrats! "otrin#s and Cas# "ig#sts
Sal#< Titl#< R#on;#4an# @it/ "a9ag#s @it/ a 8ra4#r to a3ir# o@n#rs/i8 o;#r t/# s3b#t lot 38on 8a49#nt o t/#ir r#9aining /alan#'
ISS/E! W/#t/#r or not t/# sal# o t/# s3b#t lot @as 3n#nor#abl#'
7ELD! Stat3t# o Fra3ds #8r#ss#d in Artil# %)*1< 8ar' .< o t/# Ci;il Cod# a88li#s onl4 to ##3tor4 ontrats< i'#'< t/os# @/#r# no 8#ror9an# /as 4#t b##n 9ad#' Stat#d a bit di#r#ntl4< t/# l#gal ons#3#n# o non(o98lian# @it/ t/# Stat3t# do#s not o9# into 8la4 @/#r# t/# ontrat in 3#stion is o98l#t#d< ##3t#d< or 8artiall4 ons399at#d' T/# Stat3t# o Fra3ds< in ont#t< 8ro;id#s t/at a ontrat or t/# sal# o r#al 8ro8#rt4 or o an int#r#st t/#r#in s/all b# 3n#nor#abl# 3nl#ss t/# sal# or so9# not# or 9#9orand39 t/#r#o is in @riting and s3bsrib#d b4 t/# 8art4 or /is ag#nt' Ho@#;#r< @/#r# t/# ;#rbal ontrat o sal# /as b##n 8artiall4 ##3t#d t/ro3g/ t/# 8artial 8a49#nts 9ad# b4 on# 8art4 d3l4 r##i;#d b4 t/# ;#ndor< as in t/# 8r#s#nt as#< t/# ontrat is taD#n o3t o t/# so8# o t/# Stat3t#'
I0. 0OID AND INEISTENT CONTRACTS * ART. &569 I. ESTOEL * ARTS. &5(& TO &5(9 I. @INDS O) ESTOELS &. ELE#ENTS II. LAC7ES 0S. RESCRITION LA/REL %s. CSC &G'R' No' 6%07.- Otob#r .+< %,,%5
AE)I, J4., J.: )ACTS? P#tition#r< t/# d3l4 #l#t#d Go;#rnor o t/# Pro;in# o Batangas< a88oint#d /is brot/#r< B#na9in La3r#l< as S#nior E#3ti;# Assistant in t/# Oi# o t/# Go;#rnor< a non(ar##r s#r;i# 8osition @/i/ b#longs to t/# 8#rsonal and onid#ntial sta o an #l#ti;# oiial' U8on t/# ;aan4 o t/# 8osition o Pro;inial Ad9inistrator o Batangas< 8#tition#r d#signat#d /is brot/#r as Ating Pro;inial Ad9inistrator' T/#n< /# iss3#d B#na9in La3r#l a 8ro9otional a88oint9#nt as Ci;il S#3rit4 Oi#r @/i/ is a 8osition @/i/ t/# Ci;il S#r;i# Co99ission lassii#s as Q8ri9aril4 onid#ntialQ 83rs3ant to P'"' No' +7+'
ISS/E! W/#t/#r or not n#8otis9 a88l4 to d#signation
Pag# $ .%6
Obligations and Contrats! "otrin#s and Cas# "ig#sts
7ELD! T/# o3rt r3l#d t/at 8#tition#r o3ld not l#gall4 and ;alidl4 a88oint /is brot/#r B#na9in La3r#l to said 8osition b#a3s# o t/# 8ro/ibition on n#8otis9 3nd#r S#tion ), o P'"' No' +*6' T/#4 ar# r#lat#d @it/in t/# t/ird d#gr## o onsang3init4 and t/# as# do#s not all @it/in an4 o t/# ##98tions 8ro;id#d t/#r#in' T/# ##98tion in t/# said s#tion o;#ring onid#ntial 8ositions annot b# onsid#r#d sin# t/# said 8osition is not 8ri9aril4 onid#ntial or it b#longs to t/# ar##r s#r;i#' P#tition#rs ont#ntion t/at t/# d#signation o /is brot/#r is not o;#r#d b4 t/# 8ro/ibition annot b# a#8t#d or b4 l#gal ont#98lation< t/# 8ro/ibiti;# 9antl# on n#8otis9 @o3ld inl3d# d#signation< b#a3s# @/at annot b# don# dir#tl4 annot b# don# indir#tl4' His s8#io3s and t#n3o3s distintion b#t@##n a88oint9#nt and d#signation is not/ing 9or# t/an #it/#r a 8lo4 ing#nio3sl4 on#i;#d to ir39;#nt t/# rigid r3l# on n#8otis9 or a last(dit/ 9an#3;#r to 3s/ion t/# i98at o its ;iolation' S#tion ), o P'"' No' +*6 do#s not s3gg#st t/at d#signation s/o3ld b# di#r#ntiat#d ro9 a88oint9#nt' R#ading t/# s#tion @it/ S#tion .0 o said d#r##< ar##r s#r;i# 8ositions 9a4 b# ill#d 38 onl4 b4 a88oint9#nt< #it/#r 8#r9an#nt or t#98orar4- /#n# a d#signation o a 8#rson to ill it 38 b#a3s# it is ;aant< is n##ssaril4 inl3d#d in t/# t#r9 a88oint9#nt< or it 8r#is#l4 ao98lis/#s t/# sa9# 83r8os#'
NB 0S. IAC &G'R' NO' 776%0 SEPTE:BER %+< %,,*5
4)"(A'@)>", J. )ACTS? On :ar/ .*< %,7+< L#tiia d# la Vina(S#8# ##3t#d a r#al #stat# 9ortgag# in a;or o PNB< San Carlos Bran/< o;#r a lot r#gist#r#d in /#r na9# 3nd#r TCT No' T(1%,%1 to s#3r# t/# 8a49#nt o a s3gar ro8 loan o P1<)**' Lat#r< L#tiia S#8#< ating as attorn#4(in(at or /#r brot/#r(in(la@< 8ri;at# r#s8ond#nt Ro9#o Al#do< ##3t#d an a9#nd#d r#al #stat# 9ortgag# to inl3d# /is Al#doKs Lot No' %7.7 b#ing a 8ortion o Lot No' %)*.< o;#r#d b4 TCT 0.6*0 o t/# Isab#la Cadastr# as additional ollat#ral or S#8#Ks inr#as#d loan o P%7<0**' L#tiia S#8# and 8ri;at# r#s8ond#nt Al#do ;#rball4 agr##d to s8lit it4(it4 0*(0* t/# 8ro##ds o t/# loan 8' ,)< Rollo b3t ailing to r##i;# /is on#(/al s/ar# ro9 /#r< Al#do @rot# a l#tt#r on :a4 %.< %,6* to t/# PNB< San Carlos Bran/< r#;oDing t/# S8#ial Po@#r o Attorn#4 @/i/ /# /ad gi;#n to L#tiia S#8# to 9ortgag# /is Lot No' %7.7' R#8l4ing on :a4 ..< %,6*< t/# PNB Bran/ :anag#r< 2os# T' G#ll#gani ad;is#d Al#do t/at /is land /ad alr#ad4 b##n inl3d#d as ollat#ral or S#8#Ks %,6*(6% s3gar ro8 loan< @/i/ t/# latt#r /ad alr#ad4 a;ail#d o< n#;#rt/#l#ss< /# ass3r#d Al#do t/at t/# banD @o3ld #l3d# /is lot as ollat#ral or S#8#Ks ort/o9ing %,6%(6. s3gar ro8 loan' On t/# sa9# da4< :a4 ..< %,6*< PNB ad;is#d S#8# in @riting to r#8la# Lot No' %)*. @it/ anot/#r ollat#ral o #3al or /ig/#r ;al3#' Pag# $ .%+
Obligations and Contrats! "otrin#s and Cas# "ig#sts
"#s8it# t/# abo;# ad;i# ro9 PNB< S#8# @as still abl# to obtain an additional loan ro9 PNB inr#asing /#r d#bt o P %7<0** to P07<71+'7, on t/# s#3rit4 o Al#doKs 8ro8#rt4 as ollat#ral' On 2an3ar4 %0< %,6)< Al#do r##i;#d t@o . l#tt#rs ro9 PNB! % inor9ing /i9 o S#8#Ks ail3r# to 8a4 /#r loan in t/# total a9o3nt o P 07<71+'7,- and . gi;ing /i9 si 7 da4s to s#ttl# S#8#Ks o3tstanding obligation< as ot/#r@is#< or#los3r# 8ro##dings @o3ld b# o99#n#d against /is 8ro8#rt4' Al#do r#3#st#d S#8# to 8a4 /#r ao3nts to or#stall or#los3r# 8ro##dings against /is 8ro8#rt4< b3t to no a;ail'
ISS/E! W/#t/#r or not #sto88#l a88li#s in t/is as#'
7ELD! In t/# as# at bar< sin# PNB /ad 8ro9is#d to #l3d# Al#doKs 8ro8#rt4 as ollat#ral or S#8#Ks %,6%(6. s3gar ro8 loan< it s/o3ld /a;# r#l#as#d t/# 8ro8#rt4 to Al#do' T/# 9ortgag# @/i/ S#8# ga;# to t/# banD on Al#doKs lot as ollat#ral or /#r %,6%(6. s3gar ro8 loan @as n3ll and ;oid or /a;ing b##n alr#ad4 disa3t/ori#d b4 Al#do' Sin# Al#doKs 8ro8#rt4 s#3r#d onl4 51B,100.00 o S#8#Ks %,6*(6% s3gar ro8 loan o P%7<0**'** b#a3s# P1<)** @as s#3r#d b4 S#8#Ks o@n 8ro8#rt4< Al#doKs 8ro8#rt4 9a4 b# /#ld to ans@#r or onl4 t/# 3n8aid balan#< i an4< o S#8#Ks %,6*(6% loan< b3t not t/# %,6%(6. ro8 loan' T/# PNB at#d @it/ bad ait/ in 8ro##ding against Al#doKs 8ro8#rt4 to satis4 S#8#Ks 3n8aid %,6%(6. s3gar ro8 loan' T/# #tra3diial or#los3r# b#ing n3ll and ;oid a# initio < t/# #rtiiat# o sal# @/i/ t/# S/#ri d#li;#r#d to PNB as t/# /ig/#st bidd#r at t/# sal# is also n3ll and ;oid'
@ALALO 0S. L/; &G'R' NO' L(.66+. 2ULY 1%< %,6*5
ISS/E! W/#t/#r or not alalo s/o3ld b# 8aid in US 3rr#n4' Pag# $ .%,
Obligations and Contrats! "otrin#s and Cas# "ig#sts
7ELD! No' T/# agr##9#nt @as org#d in %,7%< 4#ars b#or# t/# 8assag# o R#83bli At 0., in %,0*' T/# said la@ r#3ir#s t/at 8a49#nt in a 8arti3lar Dind o oin or 3rr#n4 ot/#r t/an t/# P/ili88in# 3rr#n4 s/all b# dis/arg#d in P/ili88in# 3rr#n4 9#as3r#d at t/# 8r#;ailing rate of echange at the ti$e the o#ligation &as incurred ' Not/ing in t/# la@ /o@#;#r 8ro;id#s @/i/ rat# o #/ang# s/all b# 3s#d /#n# it is b3t logial to 3s# t/# rat# o #/ang# at t/# ti9# o 8a49#nt'
#EDIJA 0S. ATC7O &G'R' NO' L(1*1%* OCTOBER .1< %,+)5
2ARAS)A4, J.: )ACTS? Ci;il Cas# No' %++) @as an ation or 8artition and da9ag#s il#d b4 Ern#sto Pat/o< La3riana Pat/o< Tarila Batilona< Si9#on Batilona< T#odoro Baroro< "onata Bal3ran and :ar#lino Bal3ran d##ndants /#r#in against t/#ir 3nl# Agri8ino :orant#< Cirila :orant#< Ignaio Pat/o and Sat3rnino :#dia 8lainti(a88#llant /#r#in' T/# s3b#t 9att#r o t/# ation @#r# i;# 8ar#ls o land o@n#d b4 t/# lat# Lor#no Florant# @/o di#d in %,)1 l#a;ing t/# 8laintis d##ndants /#r#in as /#irs' T/#4 lai9#d t/at t/# d##ndants /a;# b##n 3nla@3ll4 /olding and 3sing 8ortions o t/# lands sin# t/# d#at/ o Lor#no Florant#' At#r trial< t/# lo@#r o3rt /#ld t/at t/# 8laintis /ad ail#d to #stablis/ t/# all#gations o t/#ir o98laint and dis9iss#d t/# sa9#' T/# as# @as #l#;at#d on a88#al to t/# t/#n Co3rt o A88#als' On Otob#r ..< %,71< t/# Co3rt o A88#als r#;#rs#d t/# sa9# in a;or o t/# 8laintis or t/# 8artition o t/os# 8ortions not 4#t 8artition#d a9ong t/# /#irs o Lor#no :orant# b#ing 3nla@3ll4 /#ld b4 d##ndants sin# t/# d#at/ o aor#said Lor#no :orant# in %,)1 and or t/# 8a49#nt o t/# 8ro8ortionat# 8rod3# orr#s8onding to t/# l#giti9at# s/ar#s o t/# 8laintis ro9 t/# 4#ar %,)1 88' )%().< R#ord on A88#al< 8' 0< r#'' T/# as# @as r#9and#d to t/# Co3rt o First Instan# an#@ @it/ t/# s8#ii ord#r to 8artition a9ong t/# orr#s8onding /#irs o Lor#no :orant# t/# 8ortion o t/# lands l#t 3n8artition#d and to r##i;# #;id#n# on t/# da9ag#s to b# 8aid b4 t/# d##ndants to t/# 8laintis d##ndants /#r#in and t/#r#at#r to r#nd#r 3dg9#nt' On A8ril %6< %,76< t/# lo@#r o3rt iss3#d its ord#r #9bod4ing t/# 8artition o t/os# 3ndi;id#d 8ortions o t/# land and t/# da9ag#s to b# 8aid b4 t/# d##ndants Pag# $ ..*
Obligations and Contrats! "otrin#s and Cas# "ig#sts
T/#r#at#r< on :ar/ %7< %,7+< Sat3rnino :#dia il#d a o98laint in t/# sa9# Co3rt o First Instan# o :isa9is Oid#ntal' T/is is t/# 8r#s#nt Ci;il Cas# No' .770 or 3i#ting o titl# and da9ag#s @it/ 8ra4#r or 8r#li9inar4 in3ntion' T/# 8lainti(a88#llant all#g#d t/at /# is t/# l#gal o@n#r o t@o 8ar#ls o land sit3at#d at "a8aan Alto< Cala9ba< :isa9is Oid#ntal T/# o98laint stat#s t/at Par#l I /ad b##n a3ir#d b4 8lainti(a88#llant ro9 t/# d##ndants b4 ;irt3# o do39#nts o sal# ##3t#d b4 t/# latt#r at ;ario3s dat#s b#t@##n t/# 4#ars %,)+ and %,0. @/il# Par#l II /ad b##n a3ir#d b4 t/# 8lainti(a88#llant ro9 on# Agri8ino :orant#' T/# d##ndants il#d t/#ir ans@#r on A8ril %6< %,7+' T/#4 all#g#d t/at t/# 8ro3r#9#nt o t/# titl# o t/# 8lainti(a88#llant is taint#d @it/ bad ait/ and ra3d'
ISS/E! W/#t/#r or not t/#r# ar# lat/#s in t/# as#
7ELD! An #sto88#l b4 la/#s aris#s ro9 t/# n#glig#n# or o9ission to ass#rt a rig/t @it/in a r#asonabl# ti9#< @arranting a 8r#s398tion t/at t/# 8art4 #ntitl#d to ass#rt it #it/#r /as abandon#d it or d#lin#d to ass#t it Tia9 #t al' ;s' Sibong/ano4< .1 SCRA .,' Its #ss#n# is t/# dotrin# o #sto88#l< a on#8t d#ri;#d ro9 A9#rian la@ t/at ai9s to bring o3t 3sti# b#t@##n 8arti#s< t/ro3g/ t/# o8#ration o t/# 8rini8l# t/at an ad9ission or r#8r#s#ntation is r#nd#r#d onl3si;# 38on t/# 8#rson 9aDing it< and annot b# d#ni#d or dis8ro;#d as against t/# 8#rson r#l4ing t/#r#on R#8ort o t/# Cod# Co99ission< 8' 0,' In ot/#r @ords< it 8r#l3d#s a 8#rson ro9 d#n4ing or ass#rting an4t/ing to t/# ontrar4 o t/at @/i/ /as< in ont#98lation o la@< b##n #stablis/#d as t/# tr3t/< #it/#r b4 t/# ats o 3diial or l#gislati;# oiials or b4 /is o@n d##d or r#8r#s#ntation< #it/#r #8r#ss#d or i98li#d' In t/# instant as#< t/# o98laint o a88#llant stat#s t/at Par#l I /ad b##n a3ir#d b4 8lainti( a88#llant ro9 t/# d##ndants b4 ;irt3# o do39#nts o sal# ##3t#d b4 t/# latt#r at ;ario3s dat#s b#t@##n t/# 4#ars %,)+ and %,0.< @/il# Par#l II /ad b##n a3ir#d b4 t/# 8lainti( a88#llant ro9 on# Agri8ino :orant# 8' 1< R#ord on A88#al< 8' 0< r#'' I t/is @#r# t/# as#< /# s/o3ld /a;# 8r#s#nt#d t/# d##ds o sal# @/#n Ci;il Cas# No' %++) @as il#d on :a4 %*< %,07' H# did not' N#it/#r did /# 8r#s#nt an4 lai9 o o@n#rs/i8 @/#n Ci;il Cas# No' %++) @as a88#al#d to t/# Co3rt o A88#als' Appellant did not contest the partition and the assess$ent of da$ages $ade #y the lo&er court in its order dated April 1!, 19G! in Civil Case >o. 188=. It @as onl4 @/#n Ci;il Cas# No' %++) @as b#ing ##3t#d t/at a88#llant 9o;#d to il# a o98laint or 3i#ting o titl# in t/# sa9# Co3rt o First Instan# o :isa9is Oid#ntal' S3/ ond3t annot b# allo@#d'
Pag# $ ..%
Obligations and Contrats! "otrin#s and Cas# "ig#sts
).A.T. @ee Comuter %s. Online NetHor$s &G'R' No' %6%.1+- F#br3ar4 .< .*%%5
%I">A4" I CAST4", J.: )ACTS? P#tition#r F'A'T' ## Co983t#r S4st#9s< In' FAT EE is a do9#sti or8oration #ngag#d in t/# b3sin#ss o s#lling o983t#r #3i89#nt and ond3ting 9aint#nan# s#r;i#s or t/# 3nits it sold' ONLINE is also a do9#sti or8oration 8rini8all4 #ngag#d in t/# b3sin#ss o s#lling o983t#r 3nits< 8arts and sot@ar#'ONLINE sold o983t#r 8rint#rs to FAT EE' Ho@#;#r< FAT EE ail#d to 8a4 its obligations to ONLINE @it/o3t an4 ;alid r#ason' ONLINE il#d a Co98laint or S39 o :on#4 against FAT EE' "3ring t/# trial FAT EE insist#d t/at t/# on;#rsion rat# t/#4 agr##d 38on @as P1)!US% and not P)* as insist#d b4 ONLINE'T/# RTC dis9iss#d t/# o98laint o ONLINE or t/# latt#rs ail3r# to #stablis/ its lai9' T/# a88#llat# o3rt r#;#rs#d and s#t asid# t/# "#ision o t/# RTC' T/# CA r3l#d t/at #;#n granting t/at FAT EE @as o t/# i98r#ssion t/at P1)!%@as t/# a88liabl# rat# or its obligation< ONLINE annot b# 83t in #sto88#l as t/is @as i99#diat#l4 r#tii#d b4 ONLINE'
ISS/E! W/#t/#r or not ONLINE is #sto88#d as to t/# on;#rsion rat# 3s#d'
7ELD! On# @/o lai9s t/# b#n#it o an #sto88#l on t/# gro3nd t/at /# /as b##n 9isl#d b4 t/# r#8r#s#ntations o anot/#r 93st not /a;# b##n 9isl#d t/ro3g/ /is o@n @ant o r#asonabl# ar# and ir39s8#tion' A laD o dilig#n# b4 a 8art4 lai9ing an #sto88#l is g#n#rall4 atal' T/3s< at#r 8artii8ating in t/# 9##ting on 2an3ar4 %0< %,,+< s3b9itting its o@n 8ro8osals and 3rt/#r n#gotiating or t/# lo@#ring o t/# #/ang# rat#< FAT EE annot an49or# insist t/at it @as o98l#t#l4 3nd#r t/# i98r#ssion t/at t/# a88liabl# #/ang# rat# @as P1)!US%'R#s8ond#nt Onlin# il#d a o98laint against 8#tition#r or s39 o 9on#4' It all#g#d t/at 8#tition#r ail#d to 8a4 t/# 83r/as# 8ri# o t/# o983t#r' P#tition#r FATEE ans@#r#d t/# o98laint and d#ni#d all t/# all#gations against /i9' P#tition#r ont#nd#d t/at t/# arg39#nt o Onlin# t/at t/# instant 8#tition is atall4 d##ti;# or ail3r# o t/# or9#r to atta/ t/# Transri8t o St#nogra8/i Not#s TSN o RTC 8ro##dings' H# o3nt#r#d t/at t/#r# is no n##d to ann# t/# said TSN gi;#n t/at Onlin# do#s not dis83t# t/# a3ra4 o t/# 3ot#d 8ortions o t/# transri8ts and t/# 8#tition do#s not r#3#st or a r#(#;al3ation o t/# #;id#n# o t/# 8arti#s
#AA III 0S. G/AN;ON &G'R' NO' L(.07*0 2UNE .*< %,665
A>T">)", J.:
Pag# $ ...
Obligations and Contrats! "otrin#s and Cas# "ig#sts
)ACTS? On S#8t#9b#r .%< %,.0< an original #rtiiat# o titl# @as iss3#d to Isidoro Ba4#ta o;#r a #rtain 8ro8#rt4 lot /#r#inat#r r##rr#d to as Lot No' .717' On S#8t#9b#r S#8 t#9b#r 6< %,.+< Isidoro Ba4#ta and /is @i#< Cris8ina G3anon< sold t/# said land to S8o3s#s 2o/n Ro#9#r and 23lia Ro#9#r' On :ar/ %%< %,10< t/# Ro#9#rs sold t/# land to L3as G3irn#la' On No;#9b#r %*< %,17< G3irn#la< sold said land to F#rnando :a8a< 2r' On 2an3ar4 1%< %,0*< F#rnando :a8a 2r' l#as#d said land to O9ar#9#ntaria and Ball#st#ros or a 8#riod o #ig/t + 4#ars' On 2an3ar4 .7< %,01< said land @as sold at 83bli 83bli a3tion or non(8a49#nt non(8a49#nt o ta#s and @as bo3g/t b4 t/# Pro;in# o N#gros Oid#ntal t/#r# b#ing no bidd#rs'It @as r#83r/as#d b4 F#rnando :a8a< 2r' on 2an3ar4 .7< %,0)' On "##9b#r .+< %,07< said land @as again sold at 83bli a3tion or non(8a49#nt o ta#s and t/# Pro;in# o N#gros Oid#ntal again bo3g/t t/# sa9#< t/#r# b#ing also no bidd#rs' T/# inal bill o sal# in a;or o t/# Pro;in# o N#gros Oid#ntal @as iss3#d on :ar/ )< %,0,< and r#gist#r#d in t/# R#gist#r o "##ds on :ar/ .0< %,0,' :#an@/il#< or on 2an3ar4 %1< %,0+< t/# original #rtiiat# o titl# in t/# na9# o Isidoro Ba4#ta @as r#onstit3t#d ad9inistrati;#l4' On t/# sa9# dat#< t/# /#irs o Isidoro Ba4#ta< il#d an ation against F#rnando :a8a or r#o;#r4 o o@n#rs/i8 o Lot No' .717 doD#t#d as Ci;il Cas# No' )777' T/# o98laint< /o@#;#r< @as dis9iss#d on Otob#r 0< %,0, or laD o int#r#st' On No;#9b#r .,< %,0,< t/# sa9# /#irs o Isidoro Ba4#ta il#d @it/ t/# CFI anot/#r o98laint against F#rnando :a8a< doD#t#d as Ci;il Cas# No' 0006< also or r#o;#r4 o o@n#rs/i8 and 8oss#ssion o t/# sa9# 8ar#l o land s3b#t o Ci;il Cas# No' )777' T/# Co3rt o First Instan# dis9iss#d t/# sa9# on F#br3ar4 %7< %,7* on t/# gro3nd o r#s 3diata' T/# 8laintis a88#al#d to t/# CA< b3t t/# CA s3stain#d t/# r3ling o t/# lo@#r o3rt' On 2an3ar4 .6< %,7%< t/# /#irs o Isidoro Ba4#ta< t/# d##ndants(a88#llants /#r#in< ##3t#d an Etra3diial Partition to t/# aor#9#ntion#d lot' Plainti F#rnando :a8a III< s3#ssor(in(int#r#st o F#rnando :a8a< 2r'< il#d on :a4 %+< %,7.< t/# 8r#s#nt as# against t/# /#irs o Isidoro Ba4#ta and t/# Pro;inial Tr#as3r#r o N#gros Oid#ntal or an#llation o t/# trans#r #rtiiat# in t/# na9# o Ag3stin Ba4#ta and t/# C#rtiiat# o R#83r/as# iss3#d b4 t/# Pro;inial Tr#as3r#r in a;or o Ag3stin Ba4#ta and t/# iss3an# o an ord#r r#3iring t/# Pro;inial Tr#as3r#r to ##3t# t/# d##d o sal# in a;or o said 8lainti< at#r 8a49#nt o all ta#s ta#s d3# on said 8ro8#rt4' On No;#9b#r )< %,70< t/# lo@#r o3rt r#nd#r#d 3dg9#nt in a;or o t/# 8lainti(a88#ll## and against t/# d##ndants a88#llants'
ISS/E!
Pag# $ ..1
Obligations and Contrats! "otrin#s and Cas# "ig#sts
W/#t/#r or not t/# 3#stion o o@n#rs/i8 o;#r Lot No' .717 o3ld still b# r#litigat#d< in ;i#@ o t/# inal dis9issal on t/# 9#rits o Ci;il Cas#s Nos' )777 and 0006< @/i/ @#r# ations instit3t#d b4 /#r#in d##ndants(a88#llants to r#o;#r t/# o@n#rs/i8 and 8oss#ssion o t/# sa9# 8ro8#rt4 ro9 :a8a'
7ELD! O@n#rs/i8 o t/# said lot annot b# litigat#d an#@ in t/is as#' Ind##d< not on# o t/# d##ndants( a88#llants as /#irs o Isidoro Ba4#ta< o3ld /a;# ;alidl4 ##ris#d t/# rig/t o r#d#98tion or r#83r/as# o t/# 8ro8#rt4' T/#4 @#r# alr#ad4 barr#d b4 t/# 8rior 3dg9#nt o t/# Co3rt o First Instan# o N#gros Oid#ntal in Ci;il Cas# No' )777 ro9 ass#rting an4 rig/t o o@n#rs/i8 or titl# titl# o;#r said 8ro8#rt4' 8ro8#rt4' T/#4 o3ld not also ##ris# t/# rig/t to r#83r/as# r#83r/as# as t/# Qd#lin3#nt Qd#lin3#nt ta8a4#rQ sin# t/#4 @#r# n#;#r t/# ta8a4#r o said 8ro8#rt4< b3t F#rnando :a8a' :a8a is< t/#r#or#< t/# 8art4 all#d 38on b4 t/# la@ to ##ris# t/# rig/t o r#d#98tion or r#83r/as# @it/in t@o . 4#ars ro9 t/# dat# o t/# r#gistration o t/# sal#< t/at is< 38 to :ar/ .0< %,7%'
INS/RANCE O) T7E 7ILIINE ISLANDS COR 0S. SS. GREGORIO &G'R' NO' %6)%*) FEBRUARY FEBRUARY %)< .*%%5
5I4A%TA, 5I4A%TA, J.: )ACTS? S8o3s#s Vidal Gr#gorio and 23lita Gr#gorio obtain#d loans ro9 t/# Ins3ran# o t/# P/ili88in# Islands Cor8oration' B4 @a4 o s#3rit4 or t/# said loan< r#s8ond#nts ##3t#d R#al Estat# :ortgag#' R#s8ond#nts ail#d to 8a4 t/#ir loans< as a r#s3lt o @/i/ t/# 9ortgag#d 8ro8#rti#s @#r# #tra3diiall4 or#los#d' P#tition#r il#d a Co98laint or da9ag#s against r#s8ond#nts all#ging t/at in %,,0< @/#n it @as in t/# 8ro#ss o gat/#ring do39#nts or t/# 83r8os# o iling an a88liation or t/# r#gistration and onir9ation o its titl# o;#r t/# or#los#d 8ro8#rti#s< it diso;#r#d t/at t/# said lots @#r# alr#ad4 r#gist#r#d in t/# na9#s o t/ird 8#rsons and trans#r #rtiiat#s o titl# TCT @#r# iss3#d to t/#9' T/# RTC o :orong< Rial< r3l#d in a;or o 8#tition#r< @/il# t/# CA r#nd#r#d a "#ision r#;#rsing and s#tting asid# t/# d#ision o t/# RTC and dis9issing t/# o98laint o 8#tition#r' It r3l#d t/at 8#tition#rKs ation or da9ag#s is barr#d b4 8r#sri8tion 8 r#sri8tion and la/#s'
ISS/E! W/#t/#r or not 8#tition#rKs rig/t o ation 8r#srib#d o3r 4#ars at#r t/# s3b#t 8ro8#rti#s @#r# r#gist#r#d @it/ t/# R#gist#r o "##ds o :orong< Rial and TCTs @#r# s3bs#3#ntl4 iss3#d in t/# na9#s o t/ird 8#rsons'
7ELD! Pag# $ ..)
Obligations and Contrats! "otrin#s and Cas# "ig#sts
T/# Co3rt inds no #rror in t/# r3ling o t/# CA t/at 8#tition#rKs a3s# o ation ar3#d at t/# ti9# it diso;#r#d t/# all#g#d ra3d o99itt#d b4 r#s8ond#nts' It is at t/is 8oint t/at t/# o3r( 4#ar 8r#sri8ti;# 8#riod s/o3ld b# o3nt#d' Ho@#;#r< t/# Co3rt do#s not agr## @it/ t/# CA in its r3ling t/at t/# diso;#r4 o t/# ra3d s/o3ld b# r#Don#d ro9 t/# ti9# o r#gistration o t/# titl#s o;#ring t/# s3b#t 8ro8#rti#s' T/# #ss#n# #ss#n# o la/#s la/#s or stal# stal# d#9and d#9andss is t/# ail3r ail3r## or n#gl#t n#gl#t or an 3nr#as 3nr#asona onabl# bl# and 3n#8lain#d l#ngt/ o ti9# to do t/at @/i/< b4 ##rising d3# dilig#n#< o3ld or s/o3ld /a;# b##n don# #arli#r< t/3s< gi;ing ris# to a 8r#s398tion t/at t/# 8art4 #ntitl#d to ass#rt it #it/#r /as abandon#d or d#lin#d to ass#rt it' It is not on#rn#d @it/ 9#r# la8s# o ti9#- t/# at o d#la4< standing alon#< b#ing ins3ii#nt to onstit3t# la/#s'
CARAGA:'LA:NO 0S. CA &G'R' NO' L(0.*7) "ECE:BER .7< %,+)5
2I%I>C)"(3I44I4 2I%I>C)"(3I44I4A, A, J.: )ACTS? :ariano "# V#ra di#d in %,0%' His @ido@ ad9inist#r#d /is 8ro8#rt4 3ntil /#r d#at/ in %,77' "# V#ras n#8/#@ Sal;ador Estrada tooD o;#r as ad9inistrator o "# V#ras #stat#' Prior to t/# @ido@s d#at/< s/# 9ad# an in;#ntor4 s/o@ing t/at "# V#ras 8ro8#rt4 loat#d in Calasiao< Pangasinan 9#as3r#s 0)%6 s' 9 9or# or l#ss' Estrada /o@#;#r noti#d t/at t/# Torr#ns titl# 3nd#r "# V#ra indiat#d t/at /is 8ro8#rt4 9#as3r#s +60. s' 9' H# l#arn#d t/at t/# disr#8an4 is t/# 161. s' 9' b#ing o38i#d b4 23liana' Estrada s3#d to #;it 23liana' 23liana a;#rr#d t/at s/# and /#r at/#r /a;# b##n in o8#n< ontin3o3s< #l3si;# and notorio3s 8oss#ssion and in t/# on#8t o an o@n#r o t/# land sin# %,.%- t/at t/#4;# b##n 8a4ing ta#st/at t/# titl# /#ld b4 Estrada @as r#gist#r#d in %,)6 b3t it onl4 tooD t/#9 to initiat# an ation in %,76 t/#r#or# la/#s /as s#t in'
ISS/E! W/#t/#r or not t/# dis83t#d 8ortion s/o3ld b# ad3dg#d in a;or o "# V#ra V#rass #stat#'
7ELD! T/# inl3sion o 23lianas land in "# V#ras titl# @as #rron#o3sl4 don#' It @as s/o@n t/at 23liana< an 3nl#tt#r#d @o9an< agr##d to /a;# :ariano d# V#ra borro@ /#r titl# or t/# 83r8os#s o :ariano obtaining a loan d3ring d# V#ras V#ras li#ti9#li#ti9#- t/at @/#n d# V#ra V#ra r#gist#r#d /is 8ortion o land adoin#d to t/at o 23liana< t/# latt#rs land @as #rron#o3sl4 inl3d#d' T/# #rror is /ig/lig/t#d b4 t/# at t/at d# V#ras @ido@< in /#r in;#ntor4 b#or# s/# di#d< att#st#d t/at d# V#ras 8ortion o land is onl4 0)%6 s' 9' 9or# or l#ss' T/# disr#8an4 a88roi9at#s t/# 8ortion o land at3all4 b#ing o38i#d b4 23liana' B4 t/at< t/# onl4 8ortion t/at an b# ad3dg#d in a;or o d# V#ras #stat# is t/at @/i/ @as b#ing lai9#d b4 t/# @ido@ Pag# $ ..0
Obligations and Contrats! "otrin#s and Cas# "ig#sts
in /#r in;#ntor4' A r#al3lation 93st /o@#;#r b# 9ad# to s8#i4 t/# #at 9#as3r# o land b#longing to #a/! 161. s 9 s/o3ld b# r#tain#d b4 23liana 8ortion @/i/ s/# at3all4 o38i#s and 0*.* s' 9' s/o3ld go g o to d# V#ras V#ras #stat#'
JOSE #AR/ES AND #AILITE TEC7NOLOGIES, INC. 0S. )AR EAST BAN@ AND TR/ST CO#AN: &G'R' NO' %6%16, 2ANUARY 2ANUARY %*< .*%%5
CA45)", J.: )ACTS? :ailit# T#/nologi#s< In' :ailit# is a do9#sti or8oration #ngag#d in t/# i98ortation and trading o #3i89#nt or #n#rg4(#ii#n4 s4st#9s' 2os# N' :ar3#s :ar3#s is t/# Pr#sid#nt and ontrolling stoD/old#r o :ailit#' Far East BanD and Tr3st Co' FEBTC is a loal banD @/i/ /andl#d t/# inaning and r#lat#d r#3ir#9#nts o :ar3#s and :ailit#' :ar3#s and :ailit# 9aintain#d ao3nts @it/ FEBTC' Aordingl4 Aordingl4<< FEBTC inan#d inan#d :ailit#s :ailit#s a8ital a8ital and o8#rational o8#rational r#3ir#9#nts r#3ir#9#nts t/ro3g/ t/ro3g/ loans s#3r#d @it/ 8ro8#rti#s o :ar3#s 3nd#r t/# latt#rs na9#' On %6 23n# %,,1< :ailit# and :ar3#s #nt#r#d into a tr3st r##i8t transation @it/ FEBTC< in t/# s39 o US+*<670'**< or t/# s/i89#nt o ;ario3s /ig/(t#/nolog4 #3i89#nt ro9 t/# Unit#d Stat#s< @it/ t/# 9#r/andis# s#r;ing as ollat#ral' T/# or#going i98ortation @as o;#r#d b4 a tr3st r##i8t do39#nt sign#d b4 :ar3#s on b#/al o :ailit# So9#ti9# in A3g3st %,,1< FEBIBI< 38on t/# ad;i# o FEBTC< ailitat#d t/# 8ro3r#9#nt and 8ro#ssing ro9 :aDati Ins3ran# Co98an4 o o3r s#8arat# and ind#8#nd#nt ir# ins3ran# 8olii#s o;#r t/# tr3st r##i8t#d 9#r/andis#' On %, A3g3st %,,)< Ins3ran# Poli4 No' %*.))1,< o;#ring t/# 8#riod .) 23n# %,,) to .) 23n# %,,0< @as r#l#as#d to o;#r t/# tr3st r##i8t#d 9#r/andis#' Finding t/at :ailit# ail#d to 8a4 t/# ins3ran# 8r#9i39 in t/# s39 o P+<.70'7* or Ins3ran# Poli4 No' %*.))1, o;#ring t/# 8#riod .) 23n# %,,) to .) 23n# %,,0< FEBIBI s#nt @ritt#n
Pag# $ ..7
Obligations and Contrats! "otrin#s and Cas# "ig#sts
r#9ind#rs to FEBTC< dat#d %, Otob#r %,,)< .) 2an3ar4 %,,0< and 7 :ar/ %,,0< to d#bit :ailit#s ao3nt' On .) and .7 Otob#r %,,)< :ailit# 3ll4 s#ttl#d its tr3st r##i8t ao3nt' On , :ar/ %,,0< a ir# g3tt#d t/# Aboiti S#a Trans8ort B3ilding along :'2' C3#no A;#n3#< C#b3 Cit4< @/#r# :ailit#s oi# and @ar#/o3s# @#r# loat#d' As a r#s3lt< :ailit# s3#r#d loss#s a9o3nting to at l#ast P.'% 9illion< @/i/ :ailit# lai9#d against t/# ir# ins3ran# 8oli4 @it/ :aDati Ins3ran# Co98an4' Co98an4' :aDati Ins3ran# Co98an4 d#ni#d t/# ir# loss lai9 on t/# gro3nd o non(8a49#nt o 8r#9i39' 8r#9i39' FEBTC and FEBIBI dislai9#d dislai9#d an4 r#s8onsibilit r#s8onsibilit4 4 or t/# d#nial o t/# lai9'
ISS/E! W/#t/#r or not t/#r# is #sto88#l on t/# 8art o FEBTC
7ELD! Artil# %)1% o t/# Ci;il Cod# d#in#s #sto88#l as ollo@s! Art' %)1%' T/ro3g/ #sto88#l an ad9ission or r#8r#s#ntation is r#nd#r#d onl3si;# 38on t/# 8#rson 9aDing it< and annot b# d#ni#d or dis8ro;#d as against t/# 8#rson r#l4ing t/#r#on' :#an@/il#< S#tion .a< R3l# %1% o t/# R3l#s o Co3rt 8ro;id#s! SEC' SEC' .' Con Conl3 l3si si;# ;# 8r#s 8r#s39 398t 8tio ions ns'' T/ T/## oll ollo@ o@in ing g ar# ar# inst instan an# #ss o on onl3 l3si si;# ;# 8r#s398tions! a W/#n#;#r a 8art4 /as< b4 /is o@n d#laration< at< or o9ission< int#ntionall4 and d#lib#rat#l d#lib#rat#l4 4 l#d anot/#r to b#li#;# b#li#;# a 8arti3lar 8arti3lar t/ing is tr3#< and to at 38on s3/ b#li#< /# annot< in an4 litigation arising o3t o s3/ d#laration< at or o9ission< b# 8#r9itt#d to alsi4 it' In #sto88#l< a 8art4 r#ating an a88#aran# o at< @/i/ is als#< is bo3nd b4 t/at a88#aran# as against anot/#r 8#rson @/o at#d in good ait/ on it' Esto88#l is bas#d on 83bli 8oli4< air d#aling< good ait/ and 3sti#' Its 83r8os# is to orbid on# to s8#aD against /is o@n at< r#8r#s#ntations< or o99it9#nts to t/# in3r4 o on# @/o r#asonabl4 r#li#d t/#r#on' It s8rings ro9 #3it4< and is d#sign#d to aid t/# la@ in t/# ad9inistration o 3sti# @/#r# @it/o3t its aid in3sti# 9ig/t r#s3lt' In Santiago Sy/uco, )nc. v. Castro
Obligations and Contrats! "otrin#s and Cas# "ig#sts
#ist#n# o a stat# o ats in r#lian# on @/i/ /# ats to /is 8r#3di#' Sil#n# 9a4 s388ort an #sto88#l @/#t/#r t/# ail3r# to s8#aD is int#ntional or n #glig#nt'
#ANILA LODGE NO. 2& 0S. CA &G' R' NO' L()%**% SEPTE:BER 1*< %,675
CAST4", C.J.: )ACTS? T/# P/ili88in# Co99ission #nat#d At No' %1*7 @/i/ a3t/ori#d t/# Cit4 o :anila to r#lai9 r#lai9 a 8ortion 8ortion o :anila Ba4' T/# r#lai9#d r#lai9#d ar#a @as to or9 8art o t/# L3n#ta #t#nsi #t#nsion' on' T/# at 8ro;id#d t/at t/# r#lai9#d ar#a s/all b# t/# 8ro8#rt4 o t/# Cit4 o :anila< and t/# it4 is a3t/ori#d to s#t asid# a trat o t/# r#lai9#d land or a /ot#l sit# and to l#as# or to s#ll t/# sa9#' Lat#r< t/# Cit4 o :anila on;#4#d a 8ortion o t/# r#lai9#d ar#a to P#tition#r' T/#n P#titi P#tition#r on#r sold sold t/# land< land< tog#t/ tog#t/#r #r @it/ @it/ all t/# i98ro i98ro;#9# ;#9#nts nts<< to t/# Tarla arla "#;#lo "#;#lo89# 89#nt nt Cor8oration T"C'
ISS/E! W/#t/#r or not t/# s3b#t 8ro8#rt4 @as 8atri9onial 8ro8#rt4 o t/# Cit4 o :anila'
7ELD! T/# 8#titions @#r# d#ni#d or laD o 9#rit' T/# o3rt o3nd it n##ssar4 to anal4# all t/# 8ro;isions o At No' %17*< as a9#nd#d< in ord#r to 3nra;#l t/# l#gislati;# int#nt' T/# grant 9ad# b4 At No' %17* o t/# r#lai9#d land to t/# Cit4 o :anila is a grant o a 83bli nat3r#' S3/ grants /a;# al@a4s b##n stritl4 onstr3#d against t/# grant## b#a3s# it is a grat3ito3s donation donation o 83bli 83bli 9on#4 or r#so3r#s< r#so3r#s< @/i/ r#s3lt#d r#s3lt#d in an 3nair ad;antag# to t/# grant##' grant##' In t/# as# at bar< t/# ar#a r#lai9#d @o3ld b# ill#d at t/# #8#ns# o t/# Ins3lar Go;#rn9#nt and @it/o3t ost to t/# Cit4 o :anila' H#n#< t/# l#tt#r o t/# stat3t# s/o3ld b# narro@#d to #l3d# 9att#rs @/i/< i inl3d#d< @o3ld d##at t/# 8oli4 8 oli4 o l#gislation'
CENTRAL BAN@ 0S. CA &G'R' NO' L(0**1%(1.- 2ULY 2ULY .6< %,+%5
C">CI5C)">, J4., J.: )ACTS? Isidro F#rnand# and 2#s3s 2a49# ar# t/# 9aorit4 and ontrolling stoD/old#rs o Pro;id#nt BanD' W/#n Pro;id#nt Sa;ings BanD #8#ri#n#d #8#ri#n#d banDr3n< banDr3n< @/i/ @as trigg#r#d o b4 ad;#rs# ad;#rs# 83bliit4 in t/# n#@s8a8#rs< radio and t#l#;ision o in;#stigations ond3t#d b4 Congr#ss t/at so9# banDs @#r# 3nabl# to 8a4 d#8osit @it/dra@als' T/# BanD @as or#d to borro@ 3nds ro9
Pag# $ ..+
Obligations and Contrats! "otrin#s and Cas# "ig#sts
ot/#r banDs and t/# C#ntral BanD b3t d#s8it# t/# borro@ing< t/# 3nds r#9ain#d ins3ii#nt to satis4 t/# @it/dra@als' H#n#< t/# Isidro F#rnand# and 2#s3s 2a49# a88#al#d to C#ntral BanD or 3rt/#r assistan#' Ho@#;#r< t/# C#ntral BanD r#8li#d to t/#9 stating t/at t/#4 /a;# to r#lin3is/ and t3rno;#r t/# 9anag 9anag#9 #9#nt #nt and and ont ontro roll o t/# t/# banD banD to Igl# Igl#si siaa ni ris risto to IN IN ai aili liat at#d #d #ntit #ntit4 4 Eagl Eagl## Broadasting in ord#r or it to assist t/# distr#ss#d distr#ss#d 8ro;id#nt' Und#r t/# agr##9#nt< EB agr##d to 83r/as# 0.<*** a8ital stoD @it/ 8ro;id#nt' T/# Eagl# Broadasting Cor8oration< /o@#;#r< did not o98l4 @it/ its o99it9#nt to 83r/as# 01<*** o99on s/ar#s o stoD and to on;#rt its d#8osits into #3it4' Inst#ad< t/# n#@ 9anag#9#nt o PROVI"ENT a3s#d t/# on;#rsion o t/# t/# d#8os d#8osit itss o Igl# Igl#si siaa Ni ris risto to into into bill billss 8a4a 8a4abl bl# # #arn #arnin ing g %. %. int# int#r# r#st st<< @/i @/i/ / @#r# @#r# s3bs#3#ntl4 @it/dra@n' ) PROVI"ENT< 3nd#r t/# n#@ 9anag#9#nt< also ail#d to o98l4 @it/ t/# :on#tar4 Board dir#ti;#s r#lati;# to t/# r#/abilitation o t/# banD so t/at it r#stor#d t/# int#r#st rat# o %. on o3tstanding loans' T/#s# ats @#r# 9ad# d#s8it# t/# 8r#s#n# o C#ntral BanD #a9in#rs' S3bs#3#ntl4< C#ntral BanD :on#tar4 Board iss3#d a r#sol3tion d#laring t/# los3r# o Pro;id#nt Sa;ings BanD and ord#ring its li3idation' H#n#< F#rnand# and 2a49# il#d @it/ t/# Co3rt o First Instan# a 8#tition or #rtiorari< 8ro/ibition< and 9anda93s against C#ntral BanD to ann3l t/# r#sol3tion and r#strain CB ro9 8ro##ding @it/ t/# li3idation @/i/ t/# o3rt grant#d'
ISS/E! W/#t/#r or not t/# los3r# o t/# banD 9a4 b# s3b#t to 3diial in3ir4 and @/#t/#r or not t/# r#sol3tion @as iss3#d arbitraril4 and in bad ait/'
7ELD! Ha;ing d#id#d in %,7+ t/at PROVI"ENT @as sal;ag#abl# and o3ld b# 8#r9itt#d to ontin3# in b3s b3sin# in#ss ss @it/ @it/ its s388ort< s388ort< 8ro;id 8ro;id#d #d t/#r# t/#r# is /ang# /ang# in 9anag#9 9anag#9#nt #nt and introd introd3ti 3tion on o r#or9s< t/# CB s/o3ld /a;# b##n ;igilant in its o;#rs##ing o t/# ait/3l o98lian# b4 t/# 8arti#s o t/# t#r9s o t/# :#9orand39 Agr##9#nt< as @#ll as in s38#r;ising and ontrolling t/# o8#rations o t/# banD 3nd#r t/# 9anag#9#nt o EAGLE' T/# 8#rs3asi;#< na4< o983lsor4< 8o@#rs o t/# CB to ao98lis/ t/#s# annot b# do3bt#d' T/# CB ##ris#s s3/ ontrol o 8ri;at# banDs 3nd#r its broad 8o@#rs t/at it an d#r## li# or d#at/ o an4 banD b4 si98l4 @it//olding ro9 it t/# ailitat#s t/at it nor9all4 aords banDs' W/il# t/# los3r# and li3idation o a banD 9a4 b# onsid#r#d an ##ris# o 8oli# 8o@#r< t/# ;alidit4 o s3/ ##ris# o 8oli# 8o@#r is s3b#t to 3diial in3ir4 and o3ld b# s#t asid# i it is #it/#r a8riio3s< disri9inator4< @/i9sial< arbitrar4< 3n3st< or a d#nial o d3# 8ro#ss and #3al 8rot#tion la3s#s o t/# t/# Constit3tion' T/# arbitrarin#ss and bad ait/ ait/ o C#ntral BanD is #;id#nt ro9 t/# at t/at it 8r#ss3r#d F#rnand# and 2a49# into r#lin3is/ing t/# 9anag#9#nt Pag# $ ..,
Obligations and Contrats! "otrin#s and Cas# "ig#sts
and ontrol o Pro;id#nt Sa;ings BanD to Igl#sia Igl#sia Ni risto risto @/i/ did not /a;# an4 int#ntion int#ntion o r#storing t/# banD into its or9#r so3nd inanial ondition b3t @/os# int#r#st @as 9#r#l4 to r#o;#r its d#8osits ro9 t/# banD and t/#r#at#r allo@ing IN to 9is9anag# t/# banD 3ntil t/# banDs inanial d#t#rioration and s3bs#3#nt los3r#' C#ntral BanD at#d @/i9siall4 and @it/dr#@ its o99it9#nt to s388ort t/# banD to t/# d#tri9#nt o t/# latt#r' I 3risdition @as alr#ad4 a3ir#d to d#l;# into t/# ;alidit4 o R#sol3tions %.71 and %.,* and t/is t/# C#ntral BanD ad9its< t/#r# is no og#nt r#ason @/4< at#r s3/ 3risdition /ad b##n a3ir#d< a3ir#d< t/# Co3rt s/o3ld b# d#8ri;#d d#8ri;#d t/#r#o b4 t/# s3bs#3#nt ado8tion ado8tion o R#sol3tion R#sol3tion %111< 8arti3larl4 b#a3s# t/# latt#r< latt#r< in r#lation to t/# ant##d#nt ats< a88#ars to b# no 9or# t/an a d#lib#rat# #ort to #;ad# t/# 3risdition o t/is Co3rt< and /a;# t/# as# t/ro@n baD to t/# Co3rt o First Instan#' T/# C#ntral BanD< b4 8ro9ising to r#/abilitat# t/# banD< is #sto88#d ro9 losing losing it do@n' T/# ond3t o t/# C#ntral BanD r#;#als r#;#als a al3lat#d att#98t att#98t to #;ad# r#/abilita r#/abilitating ting OB: d#s8it# d#s8it# its 8ro9is#s' 8ro9is#s' H#n#< r#s8ond#nt C#ntral BanD o t/# P/ili88in#s P/ili88in#s is dir#t#d to o98l4 @it/ its obligations 3nd#r t/# ;oting tr3st agr##9#nt< and to d#sist ro9 taDing ation in ;iolation t/#r#o' T/# C#ntral BanD 9ad# #8r#ss r#8r#s#ntations to 8#tition#rs /#r#in t/at it @o3ld s388ort t/# OB:< and a;oid its li3idation i t/# 8#tition#rs @o3ld ##3t# a t/# ;oting tr3st agr##9#nt t3rning o;#r t/# 9anag#9#nt o OB: to t/# C#ntral BanD or its no9in##s< and b 9ortgag# or assi assign gn t/#i t/#irr 8ro8# 8ro8#rt rti# i#ss to t/# t/# C#nt C#ntra rall BanD BanD to o;# o;#rr t/# t/# o;#r o;#rdr dra att balan balan## o OB:' OB:' T/ T/## 8#tition#rs /a;ing o98li#d @it/ t/#s# onditions and 8art#d @it/ ;al3# ; al3# to t/# 8roit o t/# CB @/i/ t/3s a3ir#d additional s#3rit4 or its o@n ad;an#s< t/# C#ntral BanD 9a4 not no@ r#n#g# r#n#g# on its r#8r#s#n r#8r#s#ntat tation ionss and li3i li3idat dat## t/# OB:< OB:< to t/# d#tri9 d#tri9#nt #nt o its stoD/ stoD/old old#rs #rs<< d#8ositors and ot/#r r#ditors< 3nd#r t/# r3l# o 8ro9issor4 #sto88#l'
RE/BLIC 0S. ALAGAD &G'R' NO' L(77+*6 2ANUARY 2ANUARY .7< %,+,5
SA42)I>T", J.: )ACTS? On %% Otob#r Otob#r %,0%< %,0%< :#lito :#litona< na< Car9#n Car9#n @it/ @it/ s8o s8o3s# 3s# Es8 Es8iri iridio dion n oli9l oli9li9 i9<< 23s 23sto< to< Carlos Carlos<< Librada @it/ s8o3s# E9#rson Abano< "#9#trio< and Antonio Alagad il#d an a88liation or r#gistration o t/#ir titl# o;#r a 8ar#l o land sit3at#d at Linga< Pila< Lag3na< @it/ an ar#a o +'%.71 /#tar#s s3r;#4 s3r;#4 8lan Ps3(%%7,6%< Ps3(%%7,6%< @/i/ @as a9#nd#d a9#nd#d at#r t/# land @as di;id#d into t@o 8ar#ls< na9#l4< Lot % @it/ an ar#a o 0'.)67 /#tar#s and Lot . @it/ an ar#a o .'+).% /#tar#s s3r;#4 8lan Ps3(..7,6%< a9#nd9#nt .' T/# R#83bli o88os#d t/# a88liation on t/# st#r#o(t48#d gro3nd t/at a88liants and t/#ir 8r#d##ssors /a;# not b##n in 8oss#ssion o t/# land o8#nl4< ontin3o3sl4< 83blil4 and ad;#rs#l4 3nd#r a bona id# lai9 o o@n#rs/i8 sin# .7 Pag# $ .1*
Obligations and Contrats! "otrin#s and Cas# "ig#sts
23l4 %+,) and t/# land /as not #as#d to b# a 8art o t/# 83bli do9ain' It a88#ars t/at barrio olD also o88os#d t/# a88liation' On %7 2an3ar4 %,07< b4 ;irt3# o a inal 3dg9#nt in said as#< s388l#9#nt#d b4 ord#rs iss3#d on .% :ar/ %,07 and %1 A3g3st %,07< t/# Alagads @#r# d#lar#d o@n#rs o Lot % and t/# r#9aining 8ortion< or Lot .< @as d#lar#d 83bli land' "#r## N(0%)6, @as #nt#r#d and OCT *()*%< dat#d %+ Otob#r %,07< @as iss3#d in t/# na9#s o t/# Alagads' In A3g3st %,77< t/# Alagads il#d b#or# t/# :3nii8al Co3rt o Pila< Lag3na Ci;il Cas# 0. an ation to #;it t/# barrio olD o384ing 8ortions o Lot %' On + A3g3st %,7+< 3dg9#nt @as r#nd#r#d in t/# #;ition as# ord#ring t/# barrio olD t/#r#in to r#t3rn 8oss#ssion o t/# 8r#9is#s to t/# Alagads' T/# barrio olD did not a88#al' T/# R#83bli il#d a 8#tition or ann3l9#nt o titl# and r#;#rsion< insoar as t/# %'). /#tar# nort/@#st#rn 8ortion on #nd o Lot % is on#rn#d< ont#nding t/at s3/ is or#s/or# land< and t/at t/# Alagads o3ld not /a;# /ad an i98#r#t titl# to it as it @as t/# barrio olD @/o ill#d 38 t/# land to #l#;at# t/# land to its 8r#s#nt ondition' T/# Co3rt< on 7 Otob#r %,6*< iss3#d a @rit o 8r#li9inar4 in3ntion #noining t/# Pro;inial S/#ri o Lag3na or /is d#83ti#s ro9 #noring t/# @rit o ##3tion iss3#d in Ci;il Cas# 0.< and t/# Alagads ro9 s#lling< 9ortgaging< dis8osing or ot/#r@is# #nt#ring into an4 transation a#ting t/# ar#a' T/# as# @as s#t or 8r#(trial on 7 23l4 %,6%< to @/i/ t/# attorn#4 r#8r#s#nting t/# R#83bli did not a88#ar' On %7 23l4 %,6%< t/# o3rt dis9iss#d t/# o98laint' T/# R#83bli il#d a 9otion or r#onsid#ration< @as s#t or /#aring< and inall4 d#ni#d b4 t/# o3rt' A88#al @as 9ad# to t/# Co3rt o A88#als< @/i/ s3stain#d t/# trial'
ISS/E! W/#t/#r or not t/# stat# an b# #sto88#l#d'
7ELD! T/# Stat# annot b# bo3nd b4< or #sto88#d ro9< t/# 9istaD#s or n#glig#nt ats o its oiial or ag#nts< 93/ 9or#< non(s3it#d as a r#s3lt t/#r#o' T/is is so b#a3s# t/# stat# as a 8#rsona in la@ is t/# 3diial #ntit4< @/i/ is t/# so3r# o an4 ass#rt#d rig/t to o@n#rs/i8 in land 3nd#r t/# basi dotrin# #9bodi#d in t/# %,10 Constit3tion as @#ll as t/# 8r#s#nt /art#r' It is /arg#d 9or#o;#r @it/ t/# ons#r;ation o s3/ 8atri9on4' T/#r# is n##d t/#r#or# o t/# 9ost rigoro3s sr3tin4 b#or# 8ri;at# lai9s to 8ortions t/#r#o ar# 3diiall4 aord#d r#ognition' S3/ 8ri9ordial onsid#ration< not t/# a88ar#nt ar#l#ssn#ss< 93/ l#ss t/# a3i#s#n# o 83bli oiials< is t/# ontrolling nor9'
NIE0A 0S. #ANILA BAN@ING CORORATION &G'R' NO' L(1*+%%' SEPTE:BER .< %,+1'5
@T)I44I<, J4., J.: )ACTS? Pag# $ .1%
Obligations and Contrats! "otrin#s and Cas# "ig#sts
Ci;il Cas# No' 61+71< #ntitl#d :anila BanDing Cor8oration ;#rs3s Antonio Ni#;a and Ignaio Arro4o @as an ation to r#o;#r P%*<+,6'6+ @it/ int#r#st at %) 8#r#nt 8#r ann39 3ntil 3ll4 8aid' T/# 8ro9issor4 not# #;id#ning t/# d#bt @as originall4 or P+<***'** onl4 b3t b#a3s# o ar3#d int#r#sts< t/# all#g#d d#bt /ad inr#as#d to P%*<+,6'6+ @/#n t/# ation @as o99#n#d' Ignaio Arro4o @as inl3d#d in /is a8ait4 as g3arantor or t/# 8a49#nt o t/# a9o3nt in t/# 8ro9issor4 not#' In addition to t/# d##ndants obligation on t/# not#< t/# 8lainti banD asD#d or t/# 8a49#nt o attorn#4s ##s all#g#dl4 in3rr#d d3# to t/# r#3sal o t/# d##ndants to 8a4 t/#ir obligation d#s8it# r#8#at#d d#9ands' Costs o s3it and inid#ntal #8#ns#s or oll#tion @#r# also inl3d#d "##ndant Ni#;a il#d a 9ani#station 3#stioning t/# o3rtKs 3risdition onsid#ring t/at t/# 8rini8al d#9and o t/# 8lainti @as onl4 P+<***'**' Ni#;a 8ra4#d or t/# s#tting asid# o t/# d#ision and t/# dis9issal o t/# as#' At#r onsid#ring t/# 9ani#station and t/# o88osition o t/# r#s8ond#nt banD< t/# o3rt d#ni#d Ni#;aKs 8ra4#r' No a88#al @as taD#n ro9 t/# d#ision' At#r t/# d#ision /ad alr#ad4 b#o9# inal and ##3tor4< t/# 8lainti banD il#d a 9otion or ##3tion @/i/ @as grant#d b4 t/# o3rt' T/#r#at#r< :anila BanDing Cor8oration il#d an 3rg#nt #(8art# 9otion to lari4 t/# d#ision 3nd#r ##3tion' T/# r#s8ond#nt o3rt iss3#d t/# 3#stion#d ord#r and grant#d t/# 9otion'
ISS/E! W/#t/#r or not t/# 3risdition o t/# o3rt an still b# 3#stion
7ELD! It @as /#ld in Taon#ra ;' La9aroa %%* SCRA ))6! QT/# r3l# is t/at 3risdition is on#rr#d b4 la@ and t/# ob#tion to t/# a3t/orit4 o t/# trib3nal to taD# ognian# o a as# 9a4 b# rais#d at an4 stag# o t/# 8ro##dings' Ho@#;#r< onsid#ring t/# att#ndant ir39stan#s in t/# as# at bar< 8#tition#rs ar# no@ barr#d ro9 lai9ing laD o 3risdition at t/is stag# @it/ t/#ir ati;# 8artii8ation' T/#4 n#;#r 3#stion#d t/# a3t/orit4 o r#s8ond#nts L#ogardo< 2r' and Estr#lla t/ro3g/o3t t/# d3ration o t/# 8ro##dings @/#n t/#4 /a;# t/# /an# to do so' T/#4 n#;#r 9#ntion#d laD o 3risdition in t/#ir 9#9orand39 o a88#al< in t/#ir 9otion or r#onsid#ration or in t/#ir 8osition 8a8#r' T/#4 ar# no@ #sto88#d ro9 raising s3/ ob#tion' It /as b##n /#ld t/at a 8art4 annot in;oD# t/# 3risdition o a o3rt to s#3r# air9ati;# r#li# against /is o88on#nt and at#r ailing to obtain s3/ r#li#< r#83diat# or 3#stion t/at sa9# 3risdition' Tia9 ;' Sibong/ano4< .1 SCRA 10 T/# Co3rt ro@ns 38on and do#s not tol#rat# t/# 3nd#sirabl# 8rati# o so9# litigants @/o s3b9it ;ol3ntaril4 a a3s# and t/#n a#8ting t/# 3dg9#nt @/#n a;orabl# to t/#9 and attaDing it or laD o 3risdition @/#n ad;#rs#'Q
Pag# $ .1.
Obligations and Contrats! "otrin#s and Cas# "ig#sts
T/# 8#tition#rKs arg39#nts a88#ar to b# 9#ritorio3s' Ho@#;#r< onsid#ring t/at t/# 8#tition#r /ad ati;#l4 8artii8at#d in all stag#s o t/# 8ro##dings in t/# trial o3rt< /# annot< at t/is stag#< 3#stion t/# o3rtKs 3risdition' As a 9att#r o at< Ni#;a @as t/# on# @/o 8ro8os#d @/at a9o3nt#d to a o98ro9is# agr##9#nt< @/i/ or9#d t/# basis o t/# d#ision at#r t/# r#s8ond#nt banD agr##d to t/# 8ro8osal' Onl4 at#r t/# o3rt /ad 8ro93lgat#d t/# d#ision did Ni#;a /a;# s#ond t/o3g/ts @/i/ l#d to t/# 9ani#station raising t/# iss3# o 3risdition' And @/#n /is 9ani#station @as d#ni#d< /# did not 83rs3# t/# d#nial and rais# t/# 9att#r to an a88#llat# trib3nal' Ni#;a allo@#d t/# d#ision to b#o9# inal and ##3tor4'
#ANILA ELECTRIC CO#AN: 0S. CA &G'R' NO' L(116,) :AY 1%< %,+.5
2I%I>C)"(3I44I4A, J.: )ACTS? P#dro V#laso bo3g/t 1 lot ro9 P#o8l#s Ho9#sit# and Ho3sing Cor8oration< @/#r#in an agr##9#nt @as 9ad# t/at t/# lots s/all onl4 b# 3s#d or r#sid#ntial 83r8os#s onl4' T/#r#at#r V#laso sold t/# . o t/# lots to :#ralo' Ho@#;#r< :#ralo 3s#d t/# lots to #r#t a s3bstation' V#laso no@ alls or t/# an#llation o t/# sal# on t/# gro3nd t/at t/#r# @as a ;iolation @it/ t/# ondition t/at t/# lot an onl4 b# 3s#d or r#sid#ntial 83r8os#s'
ISS/E! W/#t/#r or not t/# sal# an b# an#ll#d'
7ELD! T/# ontrat o sal# b#t@##n PHHC and VELASCO 8ro;id#d t/at onl4 onstr3tions #l3si;#l4 or Qr#sid#ntial 83r8os#sQ s/all b# b3ilt on t/# PROPERTY' T/at r#3ir#9#nt< nat3rall4< @as binding on VELASCO /i9s#l< as it is also binding on :ERALCO as /is assign##' B# t/at as it 9a4< t/at ontrat i98li#s t/at it is PHHC its#l @/i/ /as t/# rig/t o ation against an4 assign## o VELASCO' E;#n i t/# r#3ir#9#nt or Qr#sid#ntial 83r8os#sQ @#r# a ondition i98os#d b4 VELASCO /i9s#l in t/# ontrat o sal# b#t@##n VELASCO and :ERALCO< t/# or9#r an no long#r an#l t/# ontrat on t/# all#g#d ;iolation o t/# ondition' W/#n :ERALCO #r#t#d t/# s3b( station in S#8t#9b#r< %,01< VELASCO did not ob#t to its onstr3tion as s3/' Contrats s/o3ld b# gi;#n ##t as t/# 8arti#s onstr3# it' QAts don# b4 t/# 8arti#s to a ontrat in t/# o3rs# o its 8#ror9an# ar# ad9issibl# in #;id#n# 38on t/# 3#stion o its 9#aning as b#ing t/#ir o@n ont#98oran#o3s int#r8r#tation o < its t#r9sQ'
Pag# $ .11
Obligations and Contrats! "otrin#s and Cas# "ig#sts
BAILON'CASILAO 0S. CA &G'R' NO' 6+%6+ APRIL %0< %,++5
C"4TIS, J.: )ACTS? T/#r# is a 8ar#l o land in t/# na9#s o t/# Bailons Rosalia< Ga3d#nio< Sabina B#rnab#< N#nita and "#lia as o(o@n#rs< #a/ @it/ a %7 s/ar#' It a88#ars t/at Rosalia and Ga3d#nio sold a 8ortion o t/# land to "onato "#lgado' Rosalia alon#< t/#n sold t/# r#9aind#r o t/# land to Poniana Ar#sgado d# Lan3a' On t/# sa9# dat#< Lan3a a3ir#d ro9 "#lgado land @/i/ t/# "#lgado /ad #arli#r a3ir#d ro9 Rosalia and Ga3d#nio' H3sband 2o/n Lan3a< ating 3nd#r a s8#ial 8o@#r o attorn#4 gi;#n b4 /is @i#< Poniana< sold t/# t@o 8ar#ls o landto C#l#stino Aabl#< Sr' In all t/#s# trans#rs< it @as stat#d in t/# d##ds o sal# t/at t/# land @as not r#gist#r#d 3nd#r t/# 8ro;isions o At No'),7 @/#n t/# at is t/at it is' It a88#ars t/at t/# land /ad b##n s3#ssi;#l4 d#lar#d or taation irst< in t/# na9# o Ciriaa "#lla9as<9ot/#r o t/# o(o@n#rs< t/#n in t/# na9# o Rosalia Bailon< t/#n in t/at o "onato "#lgado< t/#n in Ponianad# Lan3aKs na9#< and inall4 in t/# na9# o C#l#stino Aabl#< Sr'
ISS/E! W/#t/#r or not lat/#s a88l4 in t/# as#
7ELD! W#ll(stat#d in t/is 3risdition ar# t/# o3r basi #l#9#nts o la/#s< na9#l4! % ond3t on t/# 8art o t/# d##ndant or o on# 3nd#r @/o9 /# lai9s< gi;ing ris# to t/# sit3ation o @/i/ o98laint is 9ad# and or @/i/ t/# o98lainant s##Ds a r#9#d4- . d#la4 in ass#rting t/# or8orations o98lainantKs rig/ts< t/# o98lainant /a;ing /ad Dno@l#dg# or noti# o t/# d##ndantKs ond3t and /a;ing b##n aord#d an o88ort3nit4 to instit3t# s3it- 1 laD o Dno@l#dg# or noti# on t/# 8art o t/# d##ndant t/at t/# o98lainant @o3ld ass#rt t/# rig/t on @/i/ /# bas#s /is s3it- and< ) in3r4 or 8r#3di# to t/# d##ndant in t/# #;#nt r#li# is aord#d to t/# o98lainant< or t/# s3it is not /#ld to b# barr#d &Go C/ina G3n< #t al' ;' Co C/o #t al'< ,7 P/il' 7.. %,005' W/il# t/# irst and last #l#9#nts ar# 8r#s#nt in t/is as#< t/# s#ond and t/ird #l#9#nts ar# 9issing'
7EIRS O) BATIOG LAC/#EN 0S. 7EIRS O) LAR/AN &G'R' NO' L(.6*++ 2ULY 1%< %,605
2A4T)>, J.: )ACTS?
Pag# $ .1)
Obligations and Contrats! "otrin#s and Cas# "ig#sts
Lar3an ##3t#d a d##d o sal# in a;or o La39#n or a 8ar#l o land in La Trinidad< B#ng3#t' La39#n 9ad# 3s# o t/# 8ro8#rt4 #;#n @it/o3t s#3ring a trans#r #rtiiat# o titl#' T/# 3s# and i98ro;#9#nt ontin3#d #;#n at#r /is d#at/' At#r World War II< La39#ns /#irs tri#d to i t/#ir 8a8#rs< b3t it a88#ar#d t/at t/# Lar3ans @as abl# to 8ro3r# a n#@ titl# and na9#d t/# land or t/#9s#l;#s' T/#r#at#r< t/# La39#ns il#d or lai9ing o@n#rs/i8 o;#r t/# land in dis83t#'
ISS/E! W/#t/#r or not t/# La39#ns s/o3ld b# onsid#r#d t/# la@3l o@n#rs'
7ELD! QLa/#sQ /as b##n d#in#d as Qs3/ n#gl#t or o99ission to ass#rt a rig/t< taD#n in on3ntion @it/ la8s# o ti9# and ot/#r ir39stan#s a3sing 8r#3di# to an ad;#rs# 8art4< as @ill o8#rat# as a bar in #3it4'Q It is a d#la4 in t/# ass#rtion o a rig/t Q@/i/ @orDs disad;antag# to anot/#rQ b#a3s# o t/# Qin#3it4 o3nd#d on so9# /ang# in t/# ondition or r#lations o t/# 8ro8#rt4 or 8arti#s'Q It is bas#d on 83bli 8oli4 @/i/< or t/# 8#a# o soi#t4< ordains t/at r#li# @ill b# d#ni#d to a stal# d#9and @/i/ ot/#r@is# o3ld b# a ;alid lai9' It is di#r#nt ro9 and a88li#s ind#8#nd#ntl4 o 8r#sri8tion' W/il# 8r#sri8tion is on#rn#d @it/ t/# at o d#la4< la/#s is on#rn#d @it/ t/# ##t o d#la4' Pr#sri8tion is on#rn#d @it/ t/# ##t o d#la4' Pr#sri8tion is a 9att#r o ti9#- la/#s is 8rini8all4 a 3#stion o in#3it4 o 8#r9itting a lai9 to b# #nor#d< t/is in#3it4 b#ing o3nd#d on so9# /ang# in t/# ondition o t/# 8ro8#rt4 or t/# r#lation o t/# 8arti#s' Pr#sri8tion is stat3tor4- la/#s is not' La/#s a88li#s in #3it4< @/#r#as 8r#sri8tion a88li#s at la@' Pr#sri8tion is bas#d on a i#d ti9#< la/#s is not' Lar3anKs sal# o t/# s3b#t lot to Laa9#n o3ld /a;# b##n ;alid @#r# it not or t/# sol# at t/at it laD#d t/# a88ro;al o t/# "ir#tor o t/# B3r#a3 o Non(C/ristian Trib#s' T/#r# @as i98r#ss#d 38on its a# 3ll ait/ and r#dit at#r it @as notari#d b4 t/# notar4 83bli' T/# non( a88ro;al @as t/# onl4 Qdra@baDQ o @/i/ t/# trial o3rt /as o3nd t/# r#s8ond#nts(a88#llants to Q/a;# taD#n ad;antag# as t/#ir l#;#r to d#8ri;# &8#tition#rs(a88#llants5 o t/is land and t/at t/#ir 9oti;# is o3t and o3t gr##d'Q As b#t@##n Lar3an and Laa9#n< t/# sal# @as r#g3lar< not in#t#d @it/ an4 la@' Lar3anKs d#li;#r4 o /is #rtiiat# o titl# to Laa9#n 3st at#r t/# sal# s49boli#s not/ing 9or# t/an a bar#d r#ognition and a#8tan# on /is 8art t/at Laa9#n is t/# n#@ o@n#r o t/# 8ro8#rt4' T/3s< not an4 antagonisti s/o@ o o@n#rs/i8 @as #;#r #/ibit#d b4 Lar3an at#r t/at sal# and 3ntil /is d#at/ in :a4 %,1+' It r#s3lts t/at as against Lar3an and /is /#irs< r#s8ond#nts(a88#llants /#r#in< t/# lat# Batiog Laa9#n and /is /#irs< 8#tition#rs(a88#llants /#r#in< /a;# s38#rior rig/t and< /#n#< /a;# ;alidl4 a3ir#d o@n#rs/i8 o t/# litigat#d land' Eigilanti#us non dor$ienti#os se6uitas su#venit.
Pag# $ .10
Obligations and Contrats! "otrin#s and Cas# "ig#sts
J. TR/ST * ARTS. &556 TO &5+2
DEL/AO 0S. CASTEEL &G'R' NO' L(.%,*7< "ECE:BER .)< %,7+5
CAST4", J.: )ACTS? In %,)* Nianor Cast##l 3ns3#ss3ll4 r#gist#r#d a is/8ond in a big trat o s@a984 land< %6+'67 /#tar#s< in t/# t/#n sitio o :alalag< 93nii8alit4 o Padada< "a;ao or 1 ons#3ti;# ti9#s b#a3s# t/# B3r#a3 o Fis/#ri#s did not at 38on /is 8r#;io3s a88liations' "#s8it# t/# said r##tion< Cast##l did not los# int#r#st' B#a3s# o t/# t/r#at 8ois#d 38on /is 8osition b4 t/# ot/#r a88liants @/o #nt#r#d 38on and s8r#ad t/#9s#l;#s @it/in t/# ar#a< Cast##l r#ali#d t/# 3rg#nt n##ssit4 o #8anding /is o38ation t/#r#o b4 onstr3ting diD#s and 3lti;ating 9arD#tabl# is/#s' B3t laDing inanial r#so3r#s at t/at ti9#< /# so3g/t inanial aid ro9 /is 3nl# F#li8# "#l3ao' :or#o;#r< 38on l#arning t/at 8ortions o t/# ar#a a88li#d or b 4 /i9 @#r# alr#ad4 o38i#d b4 ri;al a88liants< Cast##l i99#diat#l4 il#d a 8rot#st' Cons#3#ntl4< t@o ad9inistrati;# as#s #ns3#d in;ol;ing t/# ar#a in 3#stion' Ho@#;#r< d#s8it# t/# inding 9ad# in t/# in;#stigation o t/# abo ;# ad9inistrati;# as#s< t/# "ir#tor o Fis/#ri#s n#;#rt/#l#ss r##t#d Cast##lKs a88liation on Otob#r .0< %,),< r#3ir#d /i9 to r#9o;# all t/# i98ro;#9#nts @/i/ /# /ad introd3#d on t/# land< and ord#r#d t/at t/# land b# l#as#d t/ro3g/ 83bli a3tion On No;#9b#r .0< %,), Ino#nia "#l3ao @i# o F#li8# "#l3ao as 8art4 o t/# irst 8art< and Nianor Cast##l as 8art4 o t/# s#ond 8art< ##3t#d a ontrat ? d#no9inat#d a Qontrat o Pag# $ .17
Obligations and Contrats! "otrin#s and Cas# "ig#sts
s#r;i#Q' On t/# sa9# dat# t/# abo;# ontrat @as #nt#r#d into< Ino#nia "#l3ao ##3t#d a s8#ial 8o@#r o attorn#4 in a;or o 2#s3s "on#sa On No;#9b#r .,< %,), t/# "ir#tor o Fis/#ri#s r##t#d t/# a88liation il#d b4 F#li8# "#l3ao on No;#9b#r %6< %,)+' Una#d b4 t/is r##tion< "#l3ao r#it#rat#d /is lai9 o;#r t/# sa9# ar#a in t/# t@o ad9inistrati;# as#s and asD#d or r#in;#stigation o t/# a88liation o Nianor Cast##l o;#r t/# s3b#t is/8ond' T/# S#r#tar4 o Agri3lt3r# and Nat3ral R#so3r#s r#nd#r#d a d#ision ord#ring Cast##l to b# r#instat#d in t/# ar#a and t/at /# s/all 8a4 or t/# i98ro;#9#nt 9ad# t/#r#38on' So9#ti9# in 2an3ar4 %,0% Nianor Cast##l orbad# Ino#nia "#l3ao ro9 3rt/#r ad9inist#ring t/# is/8ond< and ##t#d t/# latt#rKs r#8r#s#ntati;# #nargado< 2#s3s "on#sa< ro9 t/# 8r#9is#s'
ISS/E! W/#t/#r or not t/# r#instat#9#nt o Cast##l o;#r t/# s3b#t land onstit3t# a dissol3tion o t/# 8artn#rs/i8 b#t@##n /i9 and "#l3ao'
7ELD! T/# S38r#9# Co3rt r3l#d t/at t/# arrang#9#nt 3nd#r t/# so(all#d Qontrat o s#r;i#Q ontin3#d 3ntil t/# d#ision bot/ dat#d S#8t' %0< %,0* @#r# iss3#d b4 t/# S#r#tar4 o Agri3lt3r# and Nat3ral R#so3r#s in "ANR Cas#s 101 and 101(B' T/is d#;#lo89#nt< b4 its#l< bro3g/t abo3t t/# dissol3tion o t/# 8artn#rs/i8' Sin# t/# 8artn#rs/i8 /ad or its ob#t t/# di;ision into t@o #3al 8arts o t/# is/8ond b#t@##n t/# a88#ll##s and t/# a88#llant at#r it s/all /a;# b##n a@ard#d to t/# latt#r< and t/#r#or# it #n;isag#d t/# 3na3t/ori#d trans#r o on# /al t/#r#o to 8arti#s ot/#r t/an t/# a88liant Cast##l< it @as dissol;#d b4 t/# a88ro;al o /is a88liation and t/# a@ard to /i9 o t/# is/8ond' T/# a88ro;al @as an #;#nt @/i/ 9ad# it 3nla@3l or t/# 9#9b#rs to arr4 it on in 8artn#rs/i8' :or#o;#r< s3bs#3#nt #;#nts liD#@is# r#;#al t/# int#nt o bot/ 8arti#s to t#r9inat# t/# 8artn#rs/i8 b#a3s# #a/ r#3s#d to s/ar# t/# is/8ond @it/ t/# ot/#r'
0ALDE; 0S. OLORGA &G'R' NO' L(..06% :AY .0< %,615
2ARA%)>TA%, J.: )ACTS? A lot @as sold to S8o3s#s G3ti#rr# to S8o3s#s Vald#' A 8ortion @as l#as#d to :r' >3i/o @/i/ @as #;#nt3all4 83r/as#d or a onsid#ration' T/# r#9aining 8ortions r#9ain#d r#gist#r#d
Pag# $ .16
Obligations and Contrats! "otrin#s and Cas# "ig#sts
to F#d#rio Vald# 2r'' T/# trans#r o t/# lot in t/# na9# o F#d#rio Sr'< @as n#;#r don b#a3s# t/# original titl# @as lost' It @as lat#r diso;#r#d b4 t/# 8laintis t/at t/# lot @as in t/# na9# o F#d#rio Vald# 2r'< as t/# onl4 ;#nd##' T/is @as don# 83rs3ant to t/# @is/#s o :r' >3i/o @/o ad;an#d t/# 9on#4< in ord#r t/at /# o3ld ailitat# t/# d##d o sal# b#t@##n /i9 and t/# Vald##s< @it/ t/# 3nd#rstanding t/at F#d#rio Vald# 2r'< @ill /old t/# sa9# in tr3st or /is ot/#r brot/#rs and sist#rs'
ISS/E! W/#t/#r or not 8r#sri8tion a88li#s'
7ELD! W/#n F#d#rio Vald#< 2r' @as still li;ing< /# n#;#r att#98t#d to #l3d# t/# /#r#in 8laintis ro9 o@n#rs/i8 o t/# land in 3#stion' Said 8laintis /a;# b##n in o8#n ontin3o3s and 3nint#rr38t#d 8oss#ssion o t/# 8r#9is#s t/#4 ar# o384ing insid# t/# lot in 3#stion long b#or# t/# ##3tion o t/# d##d o sal#' It @as onl4 at#r t/# d#at/ o F#d#rio Vald#< 2r' t/at t/# @ido@ T#oila Olorga tri#d to ##t t/# 8laintis' Gi;#n t/# ant##d#nts o t/# 8ro8#rt4 and t/# at t/at its a3isition b4 F#d#rio Vald#< 2r' @as or t/# b#n#it not o /i9s#l alon# b3t also o /is brot/#r and sist#rs< alt/o3g/ or 83r8os#s o on;#ni#n# /# @as 9ad# to a88#ar as t/# sol# ;#nd##< t/# 3ridial r#lation t/at aros# a9ong t/#9 @as on# o o(o@n#rs/i8< @it/ t/# 8laintis(a88#ll##s at3all4 in 8oss#ssion o a 8ortion o t/# 8ro8#rt4' Und#r Artil# ),) o t/# Ci;il Cod#< QNo 8r#sri8tion s/all r3n in a;or o a o( o@n#r or o(/#ir against /is o(o@n#rs or o(/#irs so long as /# #8r#ssl4 or i98li#dl4 r#ogni#s t/# o(o@n#rs/i8'Q Insoar as t/# as8#t o #tinti;# 8r#sri8tion r##rr#d to in t/is artil# is on#rn#d< it is b3t a r#stat#9#nt o Artil# %,70 o t/# S8anis/ Ci;il Cod#< @/i/ 8ro;id#s! QAs b#t@##n o(/#irs< o(o@n#rs< or 8ro8ri#tors o ada#nt #stat#s< t/# ation to d#9and t/# 8artition o t/# in/#ritan# or o t/# t/ing /#ld in o99on< or t/# s3r;#4 o t/# ada#nt 8ro8#rti#s< do#s not 8r#srib#'Q And ro9 t/# stand8oint o a3isiti;# 8r#sri8tion< or 8r#sri8tion o o@n#rs/i8< t/is Co3rt /as /#ld in n39#ro3s d#isions in;ol;ing id3iar4 r#lations s3/ as t/os# o38i#d b4 a tr3st## @it/ r#s8#t to t/# cestui 6ue trust t/at as a g#n#ral( r3l# t/# or9#rKs 8oss#ssion is not ad;#rs# and t/#r#or# annot ri8#n into a titl# b4 8r#sri8tion' Ad;#rs# 8oss#ssion in s3/ a as# r#3ir#s< t/# on3rr#n# o t/# ollo@ing(ir39stan#s! a t/at t/# tr3st## /as 8#ror9#d 3n#3i;oal ats o r#83diation a9o3nting to an o3st#r o t/# cestui 6ue trust - b t/at s3/< 8ositi;# ats o r#83diation /a;# b##n 9ad# Dno@n to t/# cestui 6ue trust and t/at t/# #;id#n# t/#r#on s/o3ld b# l#ar and onl3si;#'
)ABIAN 0S. )ABIAN &G'R' NO' L(.*)),< 2ANUARY .,< %,7+5
CAST4", J.: Pag# $ .1+
Obligations and Contrats! "otrin#s and Cas# "ig#sts
)ACTS? Pablo Fabian bo3g/t ro9 t/# P/ili88in# Go;#rn9#nt lot %7) o t/# Friar Lands Estat# in :3ntinl38a< Rial' B4 ;irt3# o t/is 83r/as#< /# @as iss3#d sal# #rtiiat# 0)6' H# di#d on A3g3st .< %,.+< s3r;i;#d b4 o3r /ildr#n< na9#l4< Es8#rana< B#nita I< B#nita II< and Silbina' On Otob#r 0< %,.+ Silbina Fabian and T#odora Fabian< ni## o t/# d##as#d< ##3t#d an aida;it' On t/# str#ngt/ o t/is aida;it< sal# #rtiiat# 0)6 @as assign#d to t/#9' T/# ating "ir#tor o Lands< on b#/al o t/# Go;#rn9#nt< sold lot %7) to Silbina Fabian T#odora Fabian' T/# ;#nd##s s8o3s#s ort/@it/ tooD 8/4sial 8oss#ssion t/#r#o< 3lti;at#d it< and a88ro8riat#d t/# 8rod3#' In t/at sa9# 4#ar< t/#4 d#lar#d t/# lot in t/#ir na9#s or taation 83r8os#s' In %,16 t/# R" o Rial iss3#d a TCT o;#r lot %7) in t/#ir na9#s' T/#4 lat#r s3bdi;id#d t/# lot into . #3al 8arts' T/# 8laintis il#d t/# 8r#s#nt ation or r#on;#4an# against t/# d##ndants s8o3s#s< a;#rring t/at Silbina and T#odora< t/ro3g/ ra3d 8#r8#trat#d in t/#ir aida;it aor#said' T/at b4 ;irt3# o t/is aida;it< t/# said d##ndants s3##d#d in /a;ing t/# sal# #rtiiat# assign#d to t/#9 and t/#r#at#r in /a;ing lot %7) o;#r#d b4 said #rtiiat# trans#rr#d in t/#ir na9#s- and t/at b4 ;irt3# also o t/#s# assign9#nt and trans#r< t/# d##ndants s3##d#d ra3d3l#ntl4 in /a;ing lot %7) r#gist#r#d in t/#ir na9#s' T/#4 3rt/#r all#g# t/at t/# land /as not b##n trans#rr#d to an inno#nt 83r/as#r or ;al3#' A r#on;#4an# t/#r#o is 8ra4#d or' In t/#ir ans@#r< t/# d##ndants s8o3s#s lai9 t/at Pablo Fabian @as not t/# o@n#r o lot %7) at t/# ti9# o /is d#at/ on A3g3st .< %,.+ b#a3s# /# /ad not 8aid in 3ll t/# a9ortiations on t/# lot- t/at t/#4 ar# t/# absol3t# o@n#rs t/#r#o< /a;ing 83r/as#d it ro9 t/# Go;#rn9#nt< and ro9 t/at 4#ar /a;ing ##ris#d all t/# attrib3t#s o o@n#rs/i8 t/#r#o 38 to t/# 8r#s#nt- and t/at t/# 8r#s#nt ation or r#on;#4an# /as alr#ad4 8r#srib#d' T/# dis9issal o t/# o98laint is 8ra4#d or' T/# lo@#r o3rt r#nd#r#d 3dg9#nt d#laring t/at t/# d##ndants s8o3s#s /ad a3ir#d a ;alid and o98l#t# titl# to t/# 8ro8#rt4 b4 a3isiti;# 8r#sri8tion< and aordingl4 dis9iss#d t/# o98laint' T/# latt#rs 9otion or r#onsid#ration @as t/#r#at#r d#ni#d'
ISS/E! W/#t/#r or not a3isiti;# 8r#sri8tion /as a88li#d
7ELD! It is alr#ad4 s#ttl#d in t/is 3risdition t/at an ation or r#on;#4an# o r#al 8ro8#rt4 bas#d 38on a onstr3ti;# or i98li#d tr3sts< r#s3lting ro9 ra3d< 9a4 b# barr#d b4 t/# stat3t# o li9itations' t/# diso;#r4 in t/at as# b#ing d##9#d to /a;# taD#n 8la# @/#n n#@ #rtiiat#s o titl# @#r# iss3#d #l3si;#l4 in t/# na9#s o t/# r#s8ond#nts t/#r#in'
Pag# $ .1,
Obligations and Contrats! "otrin#s and Cas# "ig#sts
Alt/o3g/< as a g#n#ral r3l#< an ation or 8artition a9ong o(/#irs do#s not 8r#srib#< t/is is tr3# onl4 as long as t/# d##ndants do not /old t/# 8ro8#rt4 in 3#stion 3nd#r an ad;#rs# titl#' T/# stat3t# o li9itations o8#rat#s< as in ot/#r as#s< ro9 t/# 9o9#nt s3/ ad;#rs# titl# is ass#rt#d b4 t/# 8oss#ssor o t/# 8ro8#rt4 Inas93/ as 8#tition#rs s##D to ann3l t/# aor#9#ntion#d d##d o #tra(3diial s#ttl#9#nt 38on t/# gro3nd o ra3d in t/# ##3tion t/#r#o< t/# ation t/#r#or 9a4 b# il#d @it/in o3r ) 4#ars ro9 t/# diso;#r4 o t/# ra3d' U8on t/# 3ndis83t#d ats in t/# as# at bar< not onl4 /ad la/#s s#t in @/#n t/# a88#llants instit3t#d t/#ir ation or< r#on;#4an# in %,7*< b3t as @#ll t/#ir rig/t to #nor# t/# onstr3ti;# tr3st /ad alr#ad4 8r#srib#d' It logiall4 ollo@s ro9 t/# abo;# dis3isition t/at a3isiti;# 8r#sri8tion /as liD#@is# o8#rat#d to ;#st absol3t# titl# in t/# a88#ll##s< 83rs3ant to t/# 8ro;isions o s#tion )% o At %,* t/at! T#n 4#ars at3al ad;#rs# 8oss#ssion b4 an4 8#rson lai9ing to b# t/# o@n#r or t/at ti9# o an4 land or int#r#st in land< 3nint#rr38t#dl4 ontin3#d or t#n 4#ars b4 o38an4< d#s#nt< grants< or ot/#r@is#< in @/at#;#r @a4 s3/ o38an4 9a4 /a;# o99#n#d or ontin3#d< s/all ;#st in #;#r4 at3al o38ant or 8oss#ssor o s3/ land a 3ll and o98l#t# titl# U8on t/# or#going dis3isition< @# /old not onl4 t/at t/# a88#llants ation to #nor# t/# onstr3ti;# tr3st r#at#d in t/#ir a;or /as 8r#srib#d< b3t as @#ll t/at a ;alid< 3ll and o98l#t# titl# /as ;#st#d in t/# a88#ll##s b4 a3isiti;# 8r#sri8tion'
)ERRER'LOE; 0S. CA &G'R' NO' L(0*).* :AY .,< %,+65
5A4AS, J.: )ACTS? P#tition#rs ar# t/# /ildr#n o t/# lat# "o9inga V#laso @/o in/#rit#d Lot %.0*, o t/# Cadastral S3r;#4 o :alasi3i< Pangasinan' P#tition#rs ont#nd t/at t/# ar#a o said 8ro8#rt4 @as originall4 0) /#tar#s b3t %* /#tar#s @#r# sold b4 t/#ir 9ot/#r so t/at @/at t/#4 in/#rit#d b4 @a4 o t#sta9#ntar4 s3#ssion ar# t/# r#9aining )) /#tar#s' P#tition#rs 9aintain t/at 8ri;at# r#s8ond#nts ar# #nroa/ing on t/# 8ortion o t/# land @/i/ b#longs to t/#9< t/at @/at t/# at/#r o 8ri;at# r#s8ond#nts bo3g/t ro9 "a9asa Catalan in %,10 @as t/# adoining @#st#rn 8ortion o t/# land @it/ onl4 a total o .0<6*) s'9' or .'06*) /#tar#s and not a total ar#a o 0.<,*+ s' 9' as a88li#d or b4 r#s8ond#nts in t/# r#gistration o t/# land in %,06' P#tition#rs all#g# t/at at t/# ti9# o t/# B3r#a3 o Lands Cadastral S3r;#4 in t/# 4#ar %,10 and %,17< Ra9on P3on @as t/#n r#8r#s#nting . t@o onliting int#r#sts- na9#l4< as o;#rs##r o "o9inga V#laso o;#r /#r 0)(/#tar# land and as o;#rs##r o /is /ildr#n in t/# land bo3g/t b4 t/#9 ro9 "a9asa Catalan' P#tition#rs s3r9is# t/at Ra9on P3on 8oint#d to t/# s3r;#4or t/# Pag# $ .)*
Obligations and Contrats! "otrin#s and Cas# "ig#sts
bo3ndar4 b#t@##n t/# lot bo3g/t b4 /is /ildr#n< and t/at o "o9inga V#laso as @#ll as t/# 8la#s @/#r# t/# 9on39#nts @o3ld b# 8la#d' T/#4 ont#nd t/at t/# o3lar ins8#tion r#8ort and sD#t/ o t/# Co3rtKs Co99ission#r l#arl4 and 8at#ntl4 s/o@ t/# int#ntional d#;iation o t/# bo3ndar4 lin# ro9 t/# barrio road to t/# lo@#r 8ortion going to@ards t/# Nort/ @/i/ is 9or# t/an on# Dilo9#t#r in l#ngt/ and t/at t/# d#;iation is d#init#l4 against t/# land o "o9inga V#laso ro9 @/o9 t/# 8#tition#rs in/#rit#d' P#tition#rs lai9 t/at 8ri;at# r#s8ond#nts @#r# n#;#r in at3al 8oss#ssion o t/# land in 3#stion and it @as onl4 so9#ti9# in F#br3ar4 %,76 or a total o 9or# t/an 1. 4#ars t/at 8ri;at# r#s8ond#nts irst att#98t#d to lai9 o@n#rs/i8 o;#r t/# all#g#d #nroa/#d 8ortion o 9or# t/an . %. /#tar#s< @/i/ 8ortion is 8art and 8ar#l o t/# )) /#tar#s o@n#d b4 "o9inga V#laso' P#tition#rs 9aintain t/at t/#4 /a;# b##n in s3#ssi;#< ontin3o3s< 83bli< 8#a#3l and 3nint#rr38t#d 8oss#ssion o said )) /#tar#s inl3ding t/# 3#stion#d 8ortion o 9or# t/an . %. /#tar#s< in t/# on#8t o absol3t# o@n#rs< @it/ 3st and ;alid titl# to t/# #l3sion o all ot/#r 8#rson or 9or# t/an 7* 4#ars and 38 to t/# o99#n#9#nt o t/# litigation'
ISS/E? W/#t/#r or not a3isiti;# 8r#sri8tion /as s#t in
7ELD? T/# dotrin# o i98li#d tr3st ass#rt#d b4 8#tition#rs inds no a88liation in t/# as# at bar< b#a3s# t/#r# ar# no 8ro;#n ats to t/is ##t' W/il# an i98li#d tr3st o r#al or 8#rsonal 8ro8#rt4 do#s not r#3ir# t/# or9aliti#s o an #8r#ss tr3st o;#r r#alt4 @/i/ as 9andat#d b4 t/# la@ annot b# 8ro;#d b4 oral #;id#n# 3nd#r Art' %))1 o t/# Ci;il Cod#< still t/#r# 93st b# 8roo t/at t/# tr3stor @ant#d to grant on# 8art4 onl4 t/# b#n#iial o@n#rs/i8 o a 8ar#l o land< alt/o3g/ said b#n#iiar4 9a4 /a;# l#gal titl# in /i9s#l' I98li#d tr3sts ar# ##98lii#d in Arts< %))6(%)07 o t/# Ci;il Cod#' Pri;at# r#s8ond#nts /a;# b##n in 8oss#ssion o Lot' No' %.0%* as o@n#rs sin# its 83r/as# in %,10 t/r3 t/#ir lat# at/#r Ra9on P3on' Ra9on P3on @as t/# o;#rs##r o 8#tition#rsK 9ot/#r o;#r anot/#r lot Lot No' %.0*, and not o;#r t/# lot in 3#stion Lot No' %.0%*' It is t/#r#or# ob;io3s t/at t/#r# o3ld not /a;# b##n an4 8ossibl# onlit o int#r#st in t/# rol# o 8ri;at# r#s8ond#ntsK at/#r' And #;#n i ind##d /# /ad b##n t/# o;#rs##r o bot/ lots< t/#r# @as also no s3/ onlit o int#r#st' Bot/ lots /ad t/#ir o@n 9arD#d and nat3ral bo3ndari#s- bot/ /ad t/#ir o@n s#8arat# r#gist#r#d titl#s o o@n#rs/i8- do9inion o;#r #a/ @as ##ris#d b4 t@o s#8arat# gro38s o o@n#rs' P#tition#rsK lai9 o a3isiti;# 8r#sri8tion is 3na;ailing against t/# onl3si;# and ind##asibl# /arat#r o OCT %10*0 o;#ring Lot No' %.0%* in t/# na9# o 8ri;at# r#s8ond#nts #;#n i t/# latt#r ar# not in at3al 8oss#ssion o t/# 8r#9is#s' It is an #l#9#ntal r3l# t/at t/# d#r## o r#gistration bars all lai9s or rig/ts< @/i/ aros# or 9a4 /a;# #ist#d 8rior to t/# d#r## o r#gistration' In s399ar4 t/#r#or#< t/# #;id#n# o t/# 8#tition#rs is grossl4 inad#3at# to o;#ro9# t/# r#s8ond#ntsK onl3si;# and ind##asibl# titl# and rig/t o o@n#rs/i8 and 8oss#ssion' W# r#s8#t Pag# $ .)%
Obligations and Contrats! "otrin#s and Cas# "ig#sts
t/# indings o t/# trial o3rt t/at t/# ontro;#rsial 8i## o land @as @#ll @it/in t/# titl#d 8ro8#rt4 o t/# 8ri;at# r#s8ond#nts as W# ind no ;ital ats @/i/ /a;# b##n o;#rlooD#d or 9isa88r#iat#d'
#ORALES 0S. CA &G'R' NO' %%6..+ 2UNE %,< %,,65
AE)I, J4., J.: )ACTS? Ran3lo and Erlinda Orti lai9 t/at t/#4 ar# t/# absol3t# and #l3si;# o@n#rs o t/# 8r#9is#s in 3#stion 1%+ s'9' land loat#d at orn#r U9bria St' and Rosal#s Bl;d' Brg4' C#ntral< Calba4og Cit4 t/ro3g/ t/#ir 83r/as# o t/# said 8ro8#rt4 ro9 C#lso A;#lino and stat#d t/# ollo@ing! T/# 8ro8#rt4 @as 83r/as#d b4 C#lso A;#lino t/# OrtiKs 8r#d##ssor in int#r#st @/#n /# @as still a ba/#lor and a it4 isal o Calba4og it4 ro9 Al#andra :#ndiola and C#lita Bartolo9# t/ro3g/ an QEsrit3ra d# V#nta'Q At#r t/# 83r/as#< /# a3s#d t/# trans#r o t/# titl# as @#ll as t/# ta d#larations in /is na9#' H# ait/3ll4 8aid t/# ta#s and D#8t t/# r##i8ts t/#r#o' H# also a3s#d a s3r;#4 o t/# 8r#9is#s in 3#stion @it/ t/# B3r#a3 o Lands and b3ilt a r#sid#ntial /o3s# t/#r#on' H# tooD /is 8ar#nts Ros#ndo A;#lino and 23ana Riaort# and /is sist#r A3r#a to li;# in /is 8ro8#rt4 3ntil t/#ir d#at/' C#lso A;#lino t/#n b#a9# an I99igration Oi#r and lat#r a 23dg# o t/# Co3rt o First Instan# in C#b3 so /# l#t /is 8ro8#rt4 3nd#r t/# ar# o /is sist#r< A3r#a' Wit/o3t /is Dno@l#dg#< /is n#8/#@ Rodolo :oral#s a son o/is ot/#r sist#r< Prisilla onstr3t#d a b#a3t4 s/o8 on t/# 8r#9is#s in 3#stion' C#lso t/#r#at#r sold t/# 8ro8#rt4 to Ran3lo and Erlinda Orti C#lsoKs n#ig/bors< t/#4 8aid t/# 83r/as# 8ri# and a d##d o absol3t# sal# @as ##3t#d' Rodolo :oral#s< /o@#;#r< r#3s#d to ;aat# t/# 8r#9is#s 3nl#ss /# is r#i9b3rs#d P10<***' H# also o38i#d t/# r#sid#ntial b3ilding on t/# 8ro8#rt4< tooD in 8a4ing board#rs and #;#n lai9#d o@n#rs/i8 o t/# 8r#9is#s in 3#stion' Rodolo :oral#s ont#nds t/at /is grand8ar#nts Ros#ndo A;#lino and 23ana Riaort# originall4 o@n#d t/# 8r#9is#s in 3#stion' T/# 8ro8#rt4 @as all#g#dl4 bo3g/t b4 C#lso A;#lino @/o @as #ntr3st#d b4 Ros#ndo @it/ t/# 9on#4 to b34 it' T/#4 a3s#d t/# na9# o t/# 8ro8#rt4 to b# 3nd#r C#lso A;#lino b#ing t/# onl4 son' W/#n Ros#ndo A;#lino and 23ana Riaort# di#d< t/#ir /ildr#n! C#lso A;#lino< Trinidad Cr3< Con#8ion P#ralta< Prisilla :oral#s and A3r#a A;#lino s3##d#d as o@n#rs t/#r#o'
ISS/E! Pag# $ .).
Obligations and Contrats! "otrin#s and Cas# "ig#sts
W/#t/#r or not C#lso A;#lino a3ir#d t/# 8ro8#rt4 as a 9#r# tr3st##'
7ELD! Tr3sts ar# #it/#r #8r#ss or i98li#d' E8r#ss tr3sts ar# r#at#d b4 t/# in t#ntion o t/# tr3stor or o t/# 8arti#s< @/il# i98li#d tr3sts o9# into b#ing b4 o8#ration o la@< #it/#r t/ro3g/ i98liation o an int#ntion to r#at# a tr3st as a 9att#r o la@ or t/ro3g/ t/# i98osition o t/# tr3st irr#s8#ti;# o< and #;#n ontrar4 to< an4 s3/ int#ntion' In t3rn< i98li#d tr3sts ar# #it/#r r#s3lting or onstr3ti;# tr3sts' R#s3lting tr3sts ar# bas#d on t/# #3itabl# dotrin# t/at ;al3abl# onsid#ration and not l#gal titl# d#t#r9in#s t/# #3itabl# titl# or int#r#st and ar# 8r#s39#d al@a4s to /a;# b##n ont#98lat#d b4 t/# 8arti#s' T/#4 aris# ro9 t/# nat3r# or ir39stan#s o t/# onsid#ration in;ol;#d in a transation @/#r#b4 on# 8#rson t/#r#b4 b#o9#s in;#st#d @it/ l#gal titl# b3t is obligat#d in #3it4 to /old /is l#gal titl# or t/# b#n#it o anot/#r' On t/# ot/#r /and< onstr3ti;# tr3sts ar# r#at#d b4 t/# onstr3tion o #3it4 in ord#r to satis4 t/# d#9ands o 3sti# and 8r#;#nt 3n3st #nri/9#nt' T/#4 aris# ontrar4 to int#ntion against on# @/o< b4 ra3d< d3r#ss or ab3s# o onid#n#< obtains or /olds t/# l#gal rig/t to 8ro8#rt4 @/i/ /# o3g/t not< in #3it4 and good onsi#n#< to /old' A r#s3lting tr3st is ##98lii#d b4 Artil# %))+ o t/# Ci;il Cod#< @/i/ r#ads! Art' %))+' T/#r# is an i98li#d tr3st @/#n 8ro8#rt4 is sold< and t/# l#gal #stat# is grant#d to on# 8art4 b3t t/# 8ri# is 8aid b4 anot/#r or t/# 83r8os# o /a;ing t/# b#n#iial int#r#st o t/# 8ro8#rt4' T/# or9#r is t/# tr3st##< @/il# t/# latt#r is t/# b#n#iiar4' Ho@#;#r< i t/# 8#rson to @/o9 t/# titl# is on;#4#d is a /ild< l#giti9at# or ill#giti9at#< o t/# on# 8a4ing t/# 8ri# o t/# sal#< no tr3st is i98li#d b4 la@< it b#ing dis83tabl4 8r#s39#d t/at t/#r# is a git in a;or o t/# /ild' T/# tr3st r#at#d 3nd#r t/# irst s#nt#n# o Artil# %))+ is so9#ti9#s r##rr#d to as a purchase $oney resulting trust ' T/# tr3st is r#at#d in ord#r to ##t3at# @/at t/# la@ 8r#s39#s to /a;# b##n t/# int#ntion o t/# 8arti#s in t/# ir39stan#s t/at t/# 8#rson to @/o9 t/# land @as on;#4#d /olds it as tr3st## or t/# 8#rson @/o s388li#d t/# 83r/as# 9on#4' To gi;# ris# to a 83r/as# 9on#4 r#s3lting tr3st< it is #ss#ntial t/at t/#r# b#! %' an at3al 8a49#nt o 9on#4< 8ro8#rt4 or s#r;i#s< or an #3i;al#nt< onstit3ting ;al3abl# onsid#ration.' and s3/ onsid#ration 93st b# 3rnis/#d b4 t/# all#g#d b#n#iiar4 o a r#s3lting tr3st'
Pag# $ .)1
Obligations and Contrats! "otrin#s and Cas# "ig#sts
T/#r# ar# r#ogni#d ##8tions to t/# #stablis/9#nt o an i98li#d r#s3lting tr3st' T/# irst is stat#d in t/# last 8art o Artil# %))+ its#l' T/3s< @/#r# A 8a4s t/# 83r/as# 9on#4 and titl# is on;#4#d b4 absol3t# d##d to AKs /ild or to a 8#rson to @/o9 A stands in loco parentis and @/o 9aD#s no #8r#ss 8ro9is#< a tr3st do#s not r#s3lt< t/# 8r#s398tion b#ing t/at a git @as int#nd#d' Anot/#r ##8tion is< o o3rs#< t/at in @/i/ an at3al ontrar4 int#ntion is 8ro;#d' Also @/#r# t/# 83r/as# is 9ad# in ;iolation o an #isting stat3t# and in #;asion o its #8r#ss 8ro;ision< no tr3st an r#s3lt in a;or o t/# 8art4 @/o is g3ilt4 o t/# ra3d'
NB 0S. CA G.R. NO. 9299+ JAN/AR: -&, &99( 4"2I4", J.: )ACTS? Pri;at# R#s8ond#nt B'P' :ata Co' In' :ata< a 8ri;at# or8oration #ngag#d in 8ro;iding goods and s#r;i#s to s/i88ing o98ani#s' /as at#d as a 9anning or r#@ing ag#nt or Star ist Foods< In'< USA Star ist' :ata 9aD#s ad;an#s or t/# r#@Ks #8#ns#s< ##s< and basi 8#rsonal n##ds' S3bs#3#ntl4< :ata s#nds 9ont/l4 billings to Star ist< @/i/ in t3rn r#i9b3rs#s :ata b4 s#nding a t#l#gra8/i trans#r t/ro3g/ banDs or r#dit to t/# latt#rKs ao3nt' In %,60< S#3rit4 Paii National BanD SEPAC o Los Ang#l#s trans9itt#d a abl# 9#ssag# to t/# Int#rnational "#8art9#nt o P/ili88in# National BanD to 8a4 t/# a9o3nt o US%)<*** to :ata b4 r#diting t/# latt#rKs ao3nt @it/ t/# Ins3lar BanD o Asia and A9#ria IBAA< 8#r ord#r o Star ist' PNBKs Int#rnational "#8art9#nt noti#d an #rror and s#nt a s#r;i# 9#ssag# to SEPAC BanD' T/# latt#r r#8li#d @it/ instr3tions t/at t/# a9o3nt o US%)<*** s/o3ld onl4 b# or US%<)**' A as/i#rKs /#D in t/# a9o3nt o US%<)** r#8r#s#nting r#i9b3rs#9#nt ro9 Star ist< @as iss3#d b4 t/# Star ist or t/# ao3nt o :ata on F#br3ar4 .0< %,60 t/ro3g/ t/# Ins3lar BanD o Asia and A9#ria IBAA' Ho@#;#r< a #@ da4s lat#r< PNB ##t#d anot/#r 8a49#nt in t/# a9o3nt o US%)<*** 83r8orting to b# anot/#r trans9ittal o r#i9b3rs#9#nt ro9 Star ist< 8ri;at# r#s8ond#ntKs or#ign 8rini8al' Si 4#ars lat#r< in %,+%< PNB r#3#st#d :ata or r#3nd o US%)<** at#r it diso;#r#d its #rror in ##ting t/# s#ond 8a49#nt' On F#br3ar4 )< %,+.< PNB il#d a i;il as# or oll#tion and r#3nd o US%)<*** against :ata arg3ing t/at bas#d on a onstr3ti;# tr3st 3nd#r Artil# %)07 o t/# Ci;il Cod#< it /as a rig/t to r#o;#r t/# said a9o3nt it #rron#o3sl4 r#dit#d to r#s8ond#nt :ata'
Pag# $ .))
Obligations and Contrats! "otrin#s and Cas# "ig#sts
At#r trial< t/# R#gional Trial Co3rt o :anila r#nd#r#d 3dg9#nt dis9issing t/# o98laint r3ling t/at t/# instant as# alls s3ar#l4 3nd#r Artil# .%0) on solutio inde#iti and not 3nd#r Artil# %)07 on onstr3ti;# tr3st' T/# lo@#r o3rt r3l#d o3t onstr3ti;# tr3st< a88l4ing stritl4 t/# t#/nial d#inition o a tr3st as Qa rig/t o 8ro8#rt4< r#al or 8#rsonal< /#ld b4 on# 8art4 or t/# b#n#it o anot/#r- t/at t/#r# is a id3iar4 r#lation b#t@##n a tr3st## and a cestui 6ue trust as r#gards #rtain 8ro8#rt4< r#al< 8#rsonal< 9on#4 or /os#s in ation'Q T/# a88#llat# o3rt< in air9ing t/# lo@#r o3rt< onl3d#d t/at 8#tition#rKs d#9and or t/# r#t3rn o US%)<*** annot 8ros8#r b#a3s# its a3s# o ation /ad alr#ad4 8r#srib#d 3nd#r Artil# %%)0< 8aragra8/ . o t/# Ci;il Cod# @/i/ stat#s t/at ation 38on 3asi(ontrat 93st b# o99#n#d @it/in 7 4#ars' T/is is b#a3s# 8#tition#rKs o98laint @as il#d onl4 on F#br3ar4 )< %,+.< al9ost s#;#n 4#ars at#r :ar/ %%< %,60 @/#n 8#tition#r 9istaD#nl4 9ad# 8a49#nt to 8ri;at# r#s8ond#nt' P#tition#r nat3rall4 o8ts or an int#r8r#tation 3nd#r onstr3ti;# tr3st as its ation il#d on F#br3ar4 )< %,+. an still 8ros8#r< as it is @#ll @it/in t/# 8r#sri8ti;# 8#riod o t#n %* 4#ars as 8ro;id#d b4 Artil# %%))< 8aragra8/ . o t/# Ci;il Cod#'
ISS/E! W/#t/#r or not 8#tition#r 9a4 still lai9 t/# US%)<*** it #rron#o3sl4 8aid 8ri;at# r#s8ond#nt 3nd#r a onstr3ti;# tr3st'
7ELD! Alt/o3g/ t/# Co3rt is a@ar# t/at onl4 s#;#n 6 4#ars la8s#d at#r 8#tition#r #rron#o3sl4 r#dit#d 8ri;at# r#s8ond#nt @it/ t/# said a9o3nt and t/at 3nd#r Artil# %%))< 8#tition#r is @#ll @it/in t/# 8r#sri8ti;# 8#riod or t/# #nor#9#nt o a onstr3ti;# or i98li#d tr3st< t/# Co3rt r3l# t/at 8#tition#rKs lai9 annot 8ros8#r sin# it is alr#ad4 barr#d b4 la/#s' It is a @#ll(s#ttl#d r3l# no@ t/at an ation to #nor# an i98li#d tr3st< @/#t/#r r#s3lting or onstr3ti;#< 9a4 b# barr#d not onl4 b4 8r#sri8tion b3t also b4 la/#s' W/il# 8r#sri8tion is on#rn#d @it/ t/# at o d#la4< la/#s d#als @it/ t/# ##t o 3nr#asonabl# d#la4' It is a9aing t/at it tooD 8#tition#r al9ost s#;#n 4#ars b#or# it diso;#r#d t/at it /ad #rron#o3sl4 8aid 8ri;at# r#s8ond#nt'
TIGNO 0S. CA &G'R' NO' %%*%%0' OCTOBER +< %,,65
5A>A>)KA>, J.: )ACTS? So9#ti9# in 2an3ar4< %,+*< Bi#n;#nido Sison< R#9#dios Sison and t/# /#irs o Isaa Sison< na9#l4! :an3#l Sison< G#rardo Sison and Ad#laida Sison a88oint#d "o9inador Cr3 as ag#nt to s#ll t/r## 1 8ar#ls o land adoining #a/ ot/#r loat#d at Padilla St'< Linga4#n< Pangasinan'
Pag# $ .)0
Obligations and Contrats! "otrin#s and Cas# "ig#sts
So9#ti9# in A8ril %,+*< Rodolo Tigno l#arn#d t/at t/# abo;#d#srib#d 8ro8#rti#s @#r# or sal#' Aordingl4< /# a88roa/#d Cr3 and told t/# latt#r to o#r t/#s# 8ar#ls o land to /is brot/#r< Ed3ardo Tigno< /#r#in a88#llant' Ha;ing r#a/#d an agr##9#nt o sal#< a88#llant t/#n instr3t#d Cr3 to bring t/# o@n#rs o t/#s# 8ar#ls o land to /is an#stral /o3s# at G3ilig Str##t< Linga4#n< Pangasinan on :a4 .< %,+*< as /# @ill b# t/#r# to att#nd t/# to@n i#sta On :a4 .< %,+*< Cr3< tog#t/#r @it/ Bi#n;#nido Sison< :an3#l Sison< Ad#laida Sison and R#9#dios Sison @#nt to a88#llants /o3s# at G3ilig Str##t< Linga4#n< Pangasinan' At aro3nd 0!** o loD in t/# at#rnoon< t/# abo;#na9#d 8#rsons and a88#llant @#nt to Att4' :od#sto :an3#ls /o3s# at "##nsor#s W#st Str##t< Linga4#n< Pangasinan or t/# 8r#8aration o t/# a88ro8riat# d##ds o sal#' Ho@#;#r< d#s8it# t/# at t/at no d##d o sal# @as 8r#8ar#d b4 Att4' :an3#l< R#9#dios Sison< Bi#n;#nido Sison and :an3#l Sison asD#d a88#llant to 8a4 a it4 8#r#nt 0* do@n8a49#nt or t/# 8ro8#rti#s' T/# latt#r a#d#d to t/# r#3#st and ga;# Fi;# T/o3sand P#sos P0<***'** #a/ to t/# 1 abo;#na9#d 8#rsons or a total o Fit##n T/o3sand P#sos P%0<***'** TSN< S#8t' 0< %,+,< 88' %,(.*'T/is @as @itn#ss#d b4 Cr3 and Att4' :an3#l' At#r gi;ing t/# do@n8a49#nt< a88#llant instr3t#d Cr3 and Att4' :an3#l to 8la# t/# na9# o Rodolo Tigno as ;#nd## in t/# d##ds o sal# to b# s3bs#3#ntl4 8r#8ar#d' T/is instr3tion @as gi;#n to #nabl# Rodolo Tigno to 9ortgag# t/#s# 8ro8#rti#s at t/# P/ili88in# National BanD PNB< Linga4#n Bran/< or a88ro8riat# 3nds n##d#d or t/# d#;#lo89#nt o t/#s# 8ar#ls o land as is/8onds' On A8ril .,< %,+,< Rodolo Tigno< @it/o3t t/# Dno@l#dg# and ons#nt o a88#llant< sold to S8o3s#s Ed3alino Casi8it and A;#lina Casi8it 0*+'07 s3ar# 9#t#rs o t/# land 8r#;io3sl4 o@n#d b4 Bi#n;#nido Sison' At t/# ti9# o sal#< t/# Casi8its @#r# a@ar# t/at t/# 8ortion o t/# land t/#4 bo3g/t @as o@n#d b4 a88#llant< not Rodolo Tigno' On :a4 .)< %,+,< t/# 8lainti il#d Ci;il Cas# No' %7761 or R#on;#4an#< Ann3l9#nt o "o39#nt< R#o;#r4 o Poss#ssion and "a9ag#s against Rodolo :' Tigno and d##ndant s8o3s#s Ed3alino Casi8it and A;#lina Estrada'
ISS/E! W/#t/#r or not t/#r# @as i98li#d tr3st
7ELD! As a r3l#< t/# b3rd#n o 8ro;ing t/# #ist#n# o a tr3st is on t/# 8art4 ass#rting its #ist#n#< and s3/ 8roo 93st b# l#ar and satisatoril4 s/o@ t/# #ist#n# o t/# tr3st and its #l#9#nts' W/il# i98li#d tr3sts 9a4 b# 8ro;#d b4 oral #;id#n#< t/# #;id#n# 93st b# tr3st@ort/4 and r##i;#d b4 t/# o3rts @it/ #tr#9# a3tion< and s/o3ld not b# 9ad# to r#st on loos#< #3i;oal or ind#init# d#larations' Tr3st@ort/4 #;id#n# is r#3ir#d b#a3s# oral #;id#n# an #asil4 b# abriat#d'
Pag# $ .)7
Obligations and Contrats! "otrin#s and Cas# "ig#sts
Fro9 t/# or#going< it is l#ar t/at t/# na9# o Rodolo Tigno a88#ar#d in t/# d##ds o sal# not or t/# 83r8os# o trans#rring o@n#rs/i8 to /i9 b3t onl4 to #nabl# /i9 to /old t/# 8ro8#rt4 in tr3st or /is brot/#r< /#r#in 8ri;at# r#s8ond#nt'
ARLEG/I 0S. CA &G'R' NO' %.7)16' :ARCH 7< .**.5
L>A4IS(SA>T)A", J.: )ACTS? T/# ob#t o a ontro;#rs4 is a r#sid#ntial a8art9#nt 3nit @/i/ @as or9#rl4 o@n#d b4 S#raia R#al Estat# In' and l#as#d to s8o3s#s G#ng34on' T/#r#at#r t/# s8o3s#s @#r# inor9#d t/at S#raia and its ass#ts /ad b##n assign#d to A' B' Barr#to #nt#r8ris#s< @/i/ @as s3bs#3#ntl4 sold to :at#o Tan L3' S8o3s#s G#ng34on ontin3#d to 9aD# 8a49#nts or t/# r#ntal o t/# aor#9#ntion#d a8art9#nt' B#or# t/# sal# to :at#o Tan L3 and to Arl#g3i< t/# G#ng34on S8o3s#s #8r#ss#d t/#ir d#sir# to 83r/as# t/# said a8art9#nt 3nit ro9 A' B' Barr#to Ent#r8ris#s- o#rs or t/is @as 9ad# t/ro3g/ Barr#to A8art9#nts T#nant Assoiation< @it/ :at#o Tan L3 and Arl#g3i 9ad# oi#r s in t/is assoiation' T/# sal# o t/# 8ro8#rt4 @as don# at#r Arl#g3i and Tan L3 @#r# 9ad# oi#rs in t/# aor#9#ntion#d assoiation'
ISS/E! W/#t/#r or not :at#o Tan L3 and 2os3# Arl#g3i annot b# onsid#r#d inno#nt 83r/as#rs or ;al3# or ;iolating t/# tr3st r#8os#d 38on t/#9 b4 t/# s8o3s#s G#ng34on @/#n t/#4 s3rr#8titio3sl4 83r/as#d t/# ob#t 8ro8#rt4'
7ELD! It an b# gainsaid t/at Arl#g3i ;iolat#d t/# onstr3ti;# tr3st t/at @as r#at#d @/#n Tan L3 and t/# P#tition#r a88ro8riat#d or t/#9s#l;#s t/# 8ro8#rt4 or @/i/ t/#4 @#r# n#gotiating or in b#/al o t/# Assoiation' T/#r# is t/# 8r#s#n# o ab3s# o onid#n#' P#tition#r a;#rs t/at t/#r# @as no onstr3ti;# tr3st r#at#d- /o@#;#r< onstr3ti;# tr3sts do not onl4 aris# ro9 ra3d or d3r#ss< b3t also b4 ab3s# o onid#n#< in ord#r to satis4 t/# d#9ands o 3sti#' T/#r# is a98l# do39#ntar4 and t#sti9onial #;id#n# to #stablis/ t/# #ist#n# o a id3iar4 r#lations/i8 b#t@##n t/#9< and t/os# s3bs#3#nt ats o t/# 8#tition#r b#tra4#d t/# tr3st and onid#n# r#8os#d on /i9' P#tition#r annot arg3# t/at t/# s8o3s#s G#ng34on s/o3ld and o3ld /a;# n#gotiat#d dir#tl4 @it/ t/# Barr#tos at#r /# /ad alr#ad4 a#8t#d t/# r#s8onsibilit4 and a3t/orit4 to n#gotiat# in t/#ir b#/al' A9#rian 3ris8r3d#n# 8ro;id#s 8r##d#nt r3lings t/at a onstr3ti;# tr3st is an a88ro8riat# r#9#d4 against 3n3st #nri/9#nt- it is rais#d b4 #3it4 in Pag# $ .)6
