CASE DIGESTS IN OBLIGATIONS AND CONTRACTS (CIVIL CODE BOOK IV) UNDER THE TOPIC, “EXTINGUISHMENT OF OBLIGATIONS” CINCO vs. COURT OF APPEALS FACTS: In Decemb December er 1987, 1987, Manue Manuell Go Cinco Cinco obtain obtained ed a loan loan from from the Maai Maain n Trader! ader! "oan Cor#oration in the um of $h# 7%%,%%%&%% a e'idenced b( a #romior( note ub)ect to a monthl( interet of *+ or *+ #er annum and #a(able -ithin a rene-able #eriod of 18% da( and ecured b( a real etate mort.a.e o'er a land and /0tore( buildin.& A of ul( 1989, Manuel! obli.ation amounted to 1,%71,23&& To be able to #a( the onerou loan, Manuel and #oue a##lied for a loan -ith $45 and offered a collateral, the ame land and buildi buildin. n. #re'io #re'ioul ul( ( mort.a mort.a.ed .ed to MT"C MT"C -hich -hich the ban6 ban6 a##ro' a##ro'ed ed in the um of $h# 1,*%%,%%%& 1,*%%,%%%&%%& %%& Manuel Manuel eecuted eecuted a S#ecial S#ecial $o-er $o-er of Attorne( Attorne( authoriin. authoriin. ter ter Ser'aci Ser'acio, o, MT"C $reident to collect from the $45 the #roceed of the loan but the latter -a reuired to i.n a Deed of ;eleae
:
W!"!# $# %$" &'"& *&+!%" $- "! $&% & /!!% &!. ?"D:
N$. O/01&"0$%s &#! !2"0%10s!, &$%1 $"!#s, /+ *&+!%" $# *!#-$#&%'!, "! $! $s" #!!v&%" "$ "! -&'"& s0"&"0$% 0% "! *#!s!%" '&s!. A#"0'! 3455 $- "! C0v0 C$! s"&"!s "&" & !/" s& %$" /! %!#s"$$ "$ &v! /!!% *&0 %!ss "! "0%1 $# s!#v0'! 0% 60' "! $/01&"0$% '$%s0s"s &s /!!% '$*!"!+ !0v!#! $# #!%!#!, &s "! '&s! &+ /!. I% '$%"#&'"s $- $&%, "! !/"$# 0s !2*!'"! "$ !0v!# "! s $- $%!+ ! "! '#!0"$#. I% "! *#!s!%" '&s!, M&%! s$1" "$ *&+ Es"!# /+ &"$#070%1 !#, "#$1 &% SPA, "$ '$!'" "! *#$'!!s $- "! PNB $&% $&%.. H& Es"! Es"!## *#!s! #!s!%" %"! ! "! "! SPA SPA "$ "! "! /&%8 /&%8 &% &% s01 s01%! %! "! "! !! !! $- #!!&s!9'&%'!&"0$% $- $#"1&1!, "! !0v!#+ $- "! s $- $%!+ 6$ &v! /!!% !--!'"! &% "! $/01&"0$% !2"0%10s!. As "! #!'$#s s$6, Es"!# #!-s! "$ '$!'" &% &$6 "! '&%'!&"0$% $- "! $#"1&1!. SPOUSES DELA CRU: vs. CONCEPCION FACTS: =n 23 March March 199, the $etitioner $etitioner S#oue S#oue Dela Cru entered entered into a Contract Contract to Sell -ith ;e#ondent Conce#cion o'er a houe and lot for a conideration of $2,%%%,%%%&%% ub)ect to term term and and cond condit itio ion n&& A of 7 ul( ul( 1997 1997,, ;e# ;e#on onde dent nt! ! #a(m #a(men ent t amou amount nted ed to $2,%%%,%%%&%% but before he could dra- the lat chec6, he informed the $etitioner that her her un#a un#aid id obli obli.a .ati tion on a of ul( ul( -a -a onl( onl( $2%% $2%%,% ,%%% %%&% &%%& %& $eti $etiti tion oner er a.re a.reed ed -ith -ith ;e#ondent, and the title to the #ro#ert( -a tranferred to the latter& $etitioner later reminded ;e#ondent to #a( $2%9,%%%&%% -hich accordin. to them, ha'e remained un#aid de#ite the tranfer of title& Failin. to collect the um de#ite re#eated demand im#elled $etitioner to file a com#laint for um of mone( a.aint ;e#ondent in the ;TC& In the coure of the trial, $etitioner #reented a recei#t #ur#ortedl( indicatin. #a(ment of the remainin. balance to one Adoracion "oloo -ho alle.edl( recei'ed the ame on behalf of $etitioner& ISS>:
W!" W!"! !## $# %$" %$" R!s* R!s*$% $%! !%" %";s ;s $/0 $/01& 1&"0 "0$% $% & & &#!& &#!&+ + /!!% /!!% !2"0 !2"0%1 %10 0s s! ! /+ *&+!%".
?"D: @S& ;e#ondent! ;e#ondent! obli.ation conit of #a(ment of a um of mone(& In order to etin.uih aid obli.ation, #a(ment hould be made to the #ro#er #eron a et forth in Article 12/% of the Ci'il Code, to -it: $a(ment hall be made to the #eron in -hoe fa'or the obli.ation ha been contituted, or hi ucceor in interet, or an( #eron authoried to recei'e itB& Admitt Admittedl edl( (, #a(men #a(mentt of the remain remainin. in. balan balance ce of $2%%,% $2%%,%%%& %%&%% %% -a -a not made made to the creditor themel'e& ;ather, ;ather, it -a alle.edl( made to a certain "oloo& ;e#ondent claim that "oloo -a the authoried a.ent of #etitioner, but the latter di#ute it& In a letter dated 7 Au.ut 1997, #etitioner reminded re#ondent of her remainin. balance, to.ether -ith the amount of tae #aid& Ta6in. into conideration the bu( chedule of re#ondent, #etitioner ad'ied the latter to lea'e the #a(ment to a certain Dori -ho admittedl( i "oloo, or to her truted hel#er& Thi i an e#re authorit( .i'en to "oloo to recei'e #a(ment& Thu, a ho-n in the recei#t i.ned b( #etitioner! a.ent and #uruant to the authorit( .ranted b( #etitioner to "oloo, #a(ment made to the latter i deemed #a(ment to #etitioner and effecti'el( etin.uihed re#ondent! obli.ation&
MAVEST USA, !". &. vs. SAMPAGUITA GARMENTS CORPORATION
CASE DIGESTS IN OBLIGATIONS AND CONTRACTS (CIVIL CODE BOOK IV) UNDER THE TOPIC, “EXTINGUISHMENT OF OBLIGATIONS” FACTS: $eti $etiti tion oner er Ma'e Ma'et t >SA >SA and and Ma'e Ma'et t Mani Manila la "iai "iaio on n =ffi =ffice ce ente entere red d into into a eri erie e of tranaction tranaction -ith Sam#a.uita Garment Cor#oration Cor#oration -hereb( the former -ould furnih from abroad ra- material to be manufactured b( the latter into finihed #roduct for hi#ment to forei.n forei.n bu(er, Sear ;oebuc6 ;oebuc6 and C $enne( $enne(&& ach tranact tranaction ion -a embodied embodied in a #urchae order #ecif(in. the t(le and decri#tion& C $enne( ordered 8,%%% #iece of Cotton o'en $ant at E*&3 a #iece or a total of E29,2%%&%%& De#ite the hi#ment and recei#t b( C $enne( of aid order, no #a(ment -a made #rom#tin. ;e#ondent to end demand letter -hich -ere unheeded& ;e#ondent then filed a com#laint for the collection of E29,2%%&%% -ith dama.e before the ;TC a.aint $etitioner& The latter contend that ;e#o ;e#onde ndent nt ha alrea alread( d( been been #aid #aid b( 'irtue 'irtue of le.al le.al com#en com#enat ation ion ince ince ;e#o ;e#onde ndent nt li6e-ie o-e a um of mone( in the form of dama.e and loe a a reult of breache it committed in #re'iou hi#ment to Sear ;oebuc6& ISS>:
W!"!# $# %$" "! %*&0 &$%" ! #!s*$%!%" &s /!!% !2"0%10s! /+ #!&s$% $- !1& '$*!%s&"0$%. ?"D: 4=& Concededl(, the Ci'il Code lit com#enation a one of the mode of etin.uihin. the obli.ation of #eron -ho, -ho, in their o-n ri.ht, are creditor creditor and debtor of each other& other& For com#enation, le.al or con'entional, to 'alidl( ta6e #lace, uch reuire confluence in the #artie of the character of mutual debtor and creditor, but their ri.ht a uch creditor or obli.a obli.atio tion n a uch uch debtor debtor, , need need not #rin. #rin. from from one one and the ame ame contra contract ct or tranaction& "e.al com#enation could not ha'e occurred in thi cae& The a##ellate court #ointed to the fact that #etitioner, on one hand, and re#ondent, on the other, are not mutuall( bound a creditor and debtor& It -a onl( the $etitioner! debt to the re#ondent that had been ri.htfull( etablihed& It -a ober'ed that #etitioner e'en ac6no-led.ed their obli.ation to re#ondent in the amount of >SE29,2%%&%%& The( failed to etablih ;e#ondent! #ur#orted liabilit( to them -hich -ould ha'e then et the automatic o#eration of le.al com#enation in motion&
DEVELOPMENT BANK OF THE PHILIPPINES vs. UNION BANK FACTS:
F$$& F$$&s"! s"!#s #s I%'. I%'. & $"s"& $"s"&%0 %0%1 %1 $&% $&% $/01& $/01&"0$ "0$%s %s "$ P!"0"0 P!"0"0$%! $%!## &% B&%'$ B&%'$ D!v!$*!% D!v!$*!%"" C$#*$#&"0$ C$#*$#&"0$%, %, R!s*$%!% R!s*$%!%";s ";s *#!!'!ss$# *#!!'!ss$#<0%<0% <0%<0%"!#!s "!#!s". ". F$$&s"!# F$$&s"!#s s '!! '!! 0% -&v$# -&v$# $- "! DBP '!#"&0 '!#"&0% % *#$*!# *#$*!#"0! "0!s s 0%' 0%'0%1 0%1 & *#$'!s *#$'!ss0% s0%1 1 *&%" *&%" 0% '$%s0!#&"0$% $- "! - &% '$*!"! s&"0s-&'"0$% $- 0"s $&% $/01&"0$%s "$ DBP &% &ss*"0$% /+ DBP $- F$$&s"!#;s $/01&"0$%s "$ B&%'$ 0% "! s $- P3=,>>>,>>>.>>. DBP !&s! /&'8 "! *#$'!ss0%1 *&%" "$ F$$&s"!#s 60' 6&s 0% "#% $/01! "$ *&+ $%"+ #!%"&s "$ /! s&#! /+ DBP &% B&%'$ %!# & s!*&#&"! &1#!!!%". S/s!?!%"+, B&%'$ '$%v!+! & 0"s #!'!0v&/!s, 0%'0%1 inter alia , DBP;s &ss! $/01&"0$%s "$ U%0$% B&%8. C&00%1 "&" "! s/@!'" #!%"&s &v! %$" /!!% + #!0""! !s*0"! 0"s #!*!&"! !&%s, U%0$% B&%8 -0! & '$!'"0$% '&s! &1&0%s" DBP /!-$#! "! RTC 60' #! 0% -&v$# $- U%0$% B&%8 &% 0ss! & 6#0" $- !2!'"0$% &1&0%s" DBP. W!% "! &""!# #!&'! SC, "! 6#0" 6&s %0-0! &% U%0$% B&%8 6&s $#!#! "$ #!"#% "! ss 0" #!'!0v! -#$ DBP DBP *#s *#s& &%" %" "!# "!#!" !"$. $. T! T! RT RTC C 0* 0*! !!% !%"! "! "! "! s&! s&! 0% &%$" &%$"! !## 6#0" 6#0" $- !2!'"0$%. T$ $--s!" "! #!"#% $- "! -%s 0" *#!v0$s+ #!'!0v! -#$ DBP, U%0$% B&%8 -0! & $"0$% "$ &--0# !1& '$*!%s&"0$% /" 6&s !%0! /+ "! RTC -$# &'8 $- !#0" &% &--0#! /+ CA. ISS>:
W!"!# $# %$" "! &**!&"! '$#" '$##!'"+ *! "! !%0& $- U%0$% B&%8;s $"0$% "$ &--0# !1& '$*!%s&"0$%. ?"D: @S& Art& 1279 tate that in order that le.al com#enation ma( be #ro#er, it i necear(: 1 that each one of the obli.or be bound #rinci#all(, and that he be at the ame time a #rinci#al creditor of the otherH 2 that both debt conit in a um of mone(, or if the thin. due are conumable, the( be of the ame 6ind, and alo of the ame ualit( if the latter ha been tatedH * that the t-o debt be dueH / that the( be liuidated and dema demand ndab able leHH 3 3 that that o'er o'er neit neithe herr of them them ther there e be an( an( rete retent ntio ion n or cont contro ro'e 'er r( (, commenced b( third #eron and communicated in due time to the debtor& In the cae at bar, le.al com#enation could not ha'e ta6en #lace bet-een thee debt for the a##arent reaon that reuiite * and / under Article 1279 of the Ci'il Code are not #reent& Since D5$! D5$! aume aumed d obli.a obli.atio tion n to >nion >nion 5an6 5an6 for remitt remittan ance ce of the leae leae #a(men #a(ment t are contin.ent on the #rior #a(ment thereof b( F to D5$, D5$, it cannot be aid that both debt are
CASE DIGESTS IN OBLIGATIONS AND CONTRACTS (CIVIL CODE BOOK IV) UNDER THE TOPIC, “EXTINGUISHMENT OF OBLIGATIONS” due& It cannot alo be concluded that the ame debt had alread( been liuidated and thereb( became demandable ince an( deficienc( that D5$ had to ma6e u# for the full atifaction of the aumed obli.ation cannot be determined until after the atifaction of Foodmater! obli.ation to D5$&
SPS. FABRIGAS vs. SAN FRANCISCO DEL MONTE INC. FACTS $etitioner S#oue Fabri.a and ;e#ondent San Francico Del Monte Inc& entered to an a.reement 6no-n a Contract to Sell 4o& 2/820 co'erin. the latter! reidential land in 5arr 5arrio io Alma Alman na, a, "a "a $iJa $iJa Cit( Cit(,, Metr Metro o Mani Manila la&& $eti $etiti tion oner er made made a do-n do-n#a #a(m (ment ent of $*%,%%%&%% #uruant to the Contract, and too6 #oeion of the #ro#ert(& ?o-e'er, for failin. to ma6e intallment on the balance of the #urchae #rice in #ite of demand letter ent on different occaion, ;e#ondent cancelled the contract -ithout notice to $etitioner& After remittin. ome #a(ment, $etitioner entered into a ne- Contract to Sell 2/910 -ith ;e#ondent co'erin. the ame #ro#ert( and under retructured term of #a(ment& The Contrac Contractt -a #artiall( #artiall( and irre.ular irre.ularl( l( com#lied com#lied -ith but thereafter thereafter,, ;e#ondent ;e#ondent a.ain a.ain demanded for the #a(ment of accrued intallment& For failin. to #a( de#ite due notice, ;e#ondent filed a cae for reco'er( of #oeion -ith dama.e& ISS>:
W&s C$%"#&'" "$ S! N$. 44
ES /+ %$v&"0 %$v&"0$%. $%. N$v&"0$% N$v&"0$%,, 0% 0"s /#$& '$%'!* '$%'!*", ", &+ !0"!# !0"!# /! !2"0%' !2"0%'"0v "0v! ! $# $0-0 $0-0'&" '&"$#+ $#+.. A% !2"0%' !2"0%'"0v "0v! ! %$v&"0 %$v&"0$% $% #!s" #!s"s s !0"!# !0"!# /+ '&%10 '&%10%1 %1 "! $/@!'" $/@!'" $# *#0%'0*& '$%0"0$%s ($/@!'"0v! $# #!&), $# /+ s/s"0""0%1 "! *!#s$% $- "! !/"$# $# s/#$1&"0%1 & "0# *!#s$% 0% "! #01"s $- "! '#!0"$# (s/@!'"0v! $# *!#s$%&). T! -&'"s $- "! '&s! s$6 "&" C$%"#&'" "$ S! N$. 44:
W!"!# $# %$" %$v&"0$% & '$%v!#"! "! 0&/00"+ $- "! &''s! 0%"$ & '0v0 $%! ?"D: 4=& 4o'ation i not a .round under the la- to etin.uih criminal liabilit(& Article 89 on total etin.uihment and Article 9/ on #artial etin.uihment of the ;e'ied $enal Code lit do-n the 'ariou .round for the etin.uihment of criminal liabilit(& 4ot bein. included in the lit, no'ation i limited in it effect onl( to the ci'il a#ect of the liabilit(, and, and, for that reaon, i not an efficient defene in etafa& Thi i becaue onl( the State ma( 'alidl( -ai'e the criminal action a.aint an accued& The role of no'ation ma( onl( be either to #re'ent the rie of criminal liabilit(, or to cat doubt on the true nature of the ori.inal baic tranaction, -hether or not it -a uch that the breach of the obli.ation -ould not .i'e rie to #enal re#onibilit(, a -hen mone( loaned i made to a##ear a a de#oit, or other imilar di.uie i reorted to&
CASE DIGESTS IN OBLIGATIONS AND CONTRACTS (CIVIL CODE BOOK IV) UNDER THE TOPIC, “EXTINGUISHMENT OF OBLIGATIONS” LEONARDO BOGNOT vs. RRI LENDING CORPORATION FACTS: $etitioner "eonardo and hi brother ;olando 5o.not a##lied for and obtained a loan of $3%%,%%%&%% from ;e#ondent ;;I "endin. Cor#oration #a(able on *% 4o'ember 199 a e'idenced b( a #romior( note and ecured b( a chec6 #otdated to aid date& $etitioner rene-e rene-ed d the loan loan e'era e'erall time time on a monthl monthl( ( bai bai b( #a(in #a(in. . rene-a rene-all fee, fee, iuin iuin. . #otda #otdated ted chec6 chec6 and and eecut eecutin. in.:
W!" W!"! !## "! "! *&#" *&#"0! 0!s; s; $/0 $/01& 1&"0 "0$% $% 6& 6&s s !2"0 !2"0%1 %10 0s s! ! /+ /+ (0) (0) *&+ *&+!% !%" " &% &% (00) (00) %$v&"0$% /+ s/s"0""0$% $- !/"$#s. ?"D:
NO &s "$ /$" $!s.I % "! *#!s!%" '&s!, "! *!"0"0$%!# -&0! "$ s&"0s-&'"$#0+ *#$v! "&" 0s $/01&"0$% & &#!&+ /!!% !2"0%10s! /+ *&+!%". As "! CA '$##!'"+ %$"!, "! *!"0"0$%!# -&0! "$ *#!s!%" &%+ !v0!%'! "&" "! #!s*$%!%" & 0% -&'" !%'&s! 0s '!'8 &% &**0! "! *#$'!!s "$ "! *&+!%" $- "! $&%. N!0"!# 0 ! *#!s!%" $--0'0& #!'!0*"s !v0!%'0%1 *&+!%", %$# &%+ *#$$- "&" "! '!'8 & /!!% 0s$%$#!. C$%"#&#+ "$ "! *!"0"0$%!#;s '$%"!%"0$%, M#s. B$1%$" 0 %$" s/s"0""! "! *!"0"0$%!# &s !/"$#. S! !#!+ &""!*"! "$ #!%!6 "! $#010%& $&% /+ !2!'"0%1 & %!6 *#$0ss$#+ %$"! &% '!'8. T! *#*$#"! $%! $%" #!%!6& $- "! $&%, $6!v!#, 0 %$" *s "#$1, &s M#s. B$1%$" 0 %$" #!"#% "! $'!%"s $# 0ss! & %!6 *$s"&"! '!'8. S0%'! "! $&% 6&s %$" #!%!6! -$# &%$"!# $%", "! $#010%& ! &"!, %! 5>,3=, '$%"0%! "$ s"&%. M$#! 0*$#"&%"+, "! #!s*$%!%" %!v!# &1#!! "$ #!!&s! "! *!"0"0$%!# -#$ 0s $/01&"0$%. T&" "! #!s*$%!%" 0%0"0&+ &$6! M#s. B$1%$" "$ /#0%1 $! "! *#$0ss$# *#$0ss$#+ + %$"!, %$"!, 0s'$s#! 0s'$s#! s"&"!!%" s"&"!!%" &% "! *!"0"0$%!#;s *!"0"0$%!#;s *#!v0$s *#!v0$s '!'8 &"! %! 5>, 3=, $!s %$" 0*s$ -&'"$ #!s" 0% %$v&"0$%. N!0"!# 60 "0s &'?0!s'!%'! '$%s"0""! &% 0*0! &''!*"&%'! $- "! s/s"0""0$% $- "! !/"$#.
