Oblicon Cases 2011
Oblicon Cases 2011
Oblicon Cases 2011
del Rosario
Rivera:alleged buyer
del Rosario:owner
Fidela borrowed 250thou from Mariano Rivera in the early part of 1987 as
security she agreed to execute a mortgage and an agreement to sell the land.
On March 9,1987, Mariano went to his lawyer Atty. Barangan to have three(3)
documents drafted: Deed of Real Estate MOrtageg, Kasunduan, (Agreement to Sell),
Deed of Absolute Sale.
The Kasunduan provided that the children of Mariano Rivera would purchase
LOT no.1083-C for a consideration of P2,141,622.50. Purchase price was to be paid
in three(3)installments: 250,000 upon signing of the KAsunduan, 750,000 on
August 31,1987: 1,141,622.50 on December 31,1987. The Deed of Absolute
Sale would be executed only after the second installment is paid and a post dated
check for the last installment is deposited with Fidela. The said deed stipulated a
purchase price of 601,160. and covered a certain LOT no.1083-A in addition to LOT
no 1083-C. The said deed and kasunduan was signed by Mariano's children on
March 9,1987.
Fidela intended to sign tha deed and the kasuduan however she
inadvertently fixed her signature on the DEED of Absolute Sale.(March 10,1987).
Mariano then gave Fidela 250,000. On October 30,1987 he also gave a check for
200,000. Mariano gave Oscar several amounts totaling to 67,800.While Making
payments Fidela entrusted the owners copy of TCT no.T-50.668(M) to Mariano to
guarantee compliance with the KASUNDUAN.
On Sept. 7,1992 Carlos del Rosario caused the annotation on TCT no. T-
50.668(M). On October 13, 1992 Mariano registered the Deed of Absolute Sale
caused the Annotation of an Affidavit of Recovery of Title on October 14, 1992 thus,
TCT no. T-50.668 was cancelled and its place was issued TCT no.158443 in the
name of mariano's children.
The Rivera's representing themselves as the new owner of lot no. 1083-C was
negotiating with the tenant Feliciano Nieto to rid the land of the latter's tenurial
right.
ISSSUE:
HELD:
Article 1383, 1389 and 1391 of the New Civil Code. They submit the
complaint for rescission of the KASUNDUAN should have been dismissed for
respondents failure to prove that there was no other legal means available to obtain
reparation other than to file a case for rescission, as required by Article 1383.
Article 1383 of the New Civil Code applies only to rescissible contracts
enumerated undr Article 1381 of the same code, while the cause of action had not
prescribed beacuse of the 4 year prescriptive period is counted from the date of
discovery of the fraud, which, in this cae, was only in 1992.
Rescission of reciprocal obligations under Article 1191 of the New Civil Code
should be distinguished from RESCISSION OF CONTRACTS under Article 1383 of the
same code. Both presuppose contracts validly entered into as well as subsisting and
both require mutual restitution when proper, neverthelesss they are not entirely
identical
Rescission under Art 1191 and 1381 of the Civil code: based on RESOLUTION:
is a principal action that is based on breach of a party.
CONTRACT OF SALE: the title of the property passes to the vendee upon the
delivery of the sold thing.
Prescription has not yet set in. Article 1391 states that the action for
annulment is void contracts shall be brought within four years. This period shall
begin from the time the fraud or mistake is discovered.
Atlas Mining Incorporated: buyer of the equipments from PCIB and MBC
Facts:
PCIB and MBC are joint buyers of the equipment from Phil Iron Mines(PIM).
After four(4) years Atlas Inc. agreed to purchase some of the equipments owned
jointly at that time by PCIB and MBC it was evidenced by a DEED of Sale dated
February 8,1979, with the parties agreeing for intial payment of 12 million and the
balance of 18 million will be payable with a 6 months installments.
NAMAWU won the case against PCIB and was entitled to a 4,298,307.77 as
payment for damages.
On March 7, 1979 PCIB and MBC with a letter or agreement bearing the
conformity of Atlas the final purhase price was adjusted to 29,630,000. The
Following day PCIB and MBC sent a letter to Atlas informing that the remaining
balance be paid with the following portions: PCIB:63.15% and MBC: 36.84%
respectively.
ISSUE:
Ruling:
The court ruled in the negative. Stating that the payment made by
Atlas to NAMAWU was without the consent of the debtor (PCIB).
"whoever pays for another may demand from the debtor what he has
paid except that if he paid without the knowledge or against the will of the
debtor, he can recover only insofar as the payment has been beneficial to
the debtor."
PCIB is the debtor in this case, having purchased along with MBC
legally garnished properties, while Atlas is the third person who paid the
obligation of the debtor without the knowledge and consent. Since Atlas paid
NAMAWU without the knowledge and consent of PCIB. Atlas may only
recover from PCIB more precisly charge to PCIB, only the amount of payment
which has benefited PCIB. Which is only 3,697,047.77.
Facts:
Josephine Aguilar bought a car from World Cars, Incorporated with the agreed
price of 370,000 pesos and a term for 90 days. Upon the delivery of the car by
agents of World Cars, Inc. namely: Joselito Perez and Vangie Tayag asked Josephine
Aguilar to sign the following documents which at that time were blank: a promissory
note, chattel mortgage, disclosures and other documents which showed that they
would still be obliged to pay on installment in 12 months for the car (deed of
assignment to citytrust) even if checks in full payment thereof in 90 days were to be
issued. When Aguilar asked what the documents for she was informed that it was
ony for formality, for incase the checks were not cleared, the documents would take
effect.
Aguilar draw a total of five(5) checks in favor of Joselito Perez and World Cars.
There was no official receipt issued by Perez to Josephine for the last check that
was issued.
ISSUE:
RULING:
The court ruled in the negative: Stating that the check payments made by
Aguilar were all under Perez name it will constitute as payment to World Cars. The
promissory note, chattel mortgage and other accessory documents they executed
which were to take effect only in the event the checks would be dishonored were
deemed nullified, all the checks having been cleared.
Since the condition for the instruments to become effective was fulfilled, the
obligation on the part of the Aguilars to be bound thereby did not arise and World
Cars did not acquire rights.
As no rights was acquired by World Cars against the Aguilars under the
promissory note and chattel mortgage, it had nothing to assign to CITYTRUST.
4.Florentino vs supervalue
gr no: 172384 september 12, 2007
Facts:
Issue:
whether or not Florentino is entitled to claim for the security bond that she
have posted?
Ruling:
Article 1678: If the lessee makes in good faith, useful improvements which
are suitable to the use for which the lease is intended, without altering the form or
substance of the property leased,the lessor upon the termination of the lease shall
pay the lessee one-half of the of the improvements at that time. Should the lessor
refused to reimburse said amount the lessee may remove the improvements, even
though the principal thing may suffer damages thereby. He shall not, however,
cause any more impairment upon the property leased than is necessary."
On the second issue raised in this case: Florentino is entitled to half of the
security deposits made with Supervalue because it would unconscionable for
Florentino to be imposed such penalty. Obligations with Penal clause:
Article 1226: In obligations with penal clause, the penalty shall substitute the
indemnity for damages and the payment of interests in case of noncompliance, if
there is no stipulation to the contrary. Neveretheless, damages shall be paid if the
obligor refuses to pay the penalty or is guilty of fraud in the fulfillment of the
obligation.
The penalty may be enfroced only when it is demandable in accordance with
the provisions of this CODE.
As a rule the courts are not in the liberty to ignore the freedoms of the
parties to agree on such terms and conditions.The courts may equitably reduce a
stipulated penalty in the contracts in two instances:
Article 1229: The judge shall equitably reduce the penalty when the principal
obligation has been partly or irregularly complied with by the debtor. Even if there
has been no performance, the penalty may also be reduced by the courts if it is
iniquitous or unconscionable.
5.Gonzales vs Lim
gr no. 130403 july 30, 2007
Facts:
In 1998, when Ford Phils ceased operations, the Gonzales sold Motown shares
of stocks to Severino Lim and Toyota Shaw Inc. which was then putting up a Toyota
car dealership.The Agreement signed by the parties stated that the sale included
Motown's two lease contracts with Tanglaw.It read:
" whereas, motown, which owns these fixed and moveable improvements and
equipments...does not own the land on which these improvements and equipments
are located, but merely leases the bare land...from Tanglaw Realty Corp. under 2
lease contracts both dated June 17, 1978 both commencing Nov 15, 1977 and
Expiring Nov.14,2002."
Along with the lease contracts is the terms of payments by the two parties:
ISSUE:
HELD:
In the case of Romero vs CA, the court declared that if the condition was
imposed on an obligation of party which was not complied with, the other party may
either; 1. refuse to proceed with the agreement or 2. waive the fulfillment of the
condition.
Mr.Lim obviously did not choose the first option as they proceeded with their
contract with Gonzales despite the non fulfillment of the condition in the
agreement.
nature of obligation:suretyship
FACTS:
On July 1987 Danilo Alto applied for a regular (local)card with SDIC. He got as
his surety his own sister-un-law Jeanette Molino Alto. Thus, Danilo signed the
printed application and Jeanette Molino signed the Surety Understanding attached
to the Application Form was an agreement (use of Diners Card).
On the basis of the completed and signed Application Form and the Surety
Undertaking, the SDIC issued to Danilo (Diners Card) . The latter used this card and
initially paid his obligations to SDIC. On February 8, 1998, Danilo wrote SDIC a letter
requesting it to upgrade his Regular (local) Diners Club Card to a Diamond Edition
one. As a requirement of SDIC, Danilo secured from Jeanette her approval. The
latter obliged and so on March 2, 1998, she signed a note which states.
ISSUE:
HELD:
There was no doubt that the upgrading was a novation of the original
agreement covering the first credit card issued to Danilo, basically since it was
committed with the intent of cancelling and replacing the said card. However the
novation did not serve to release the petitioner from her surety obligations because
in the Surety Undertaking she expressly waived discharge in case of change or
novation in the agreement governing the use of the first card.
Article 1370:" If the terms of a contract are clear and leave no doubt
upon the intention of the contracting parties, the literal meaning of its stipulations
shall control"
Article 1216: " The creditor may proceed against any one of the
solidary debtors or some or all of them simultaneously. The demand made against
one of them shall not be an obstacle to those which may be subsequentky directed
against the others, so long as the debt has not been fully collected."
7. Filinvest Land vc CA
Facts:
After three extensions granted by Filinvest to Pacific the latter failed to finish
the contracted works. On October 16, 1979 Filinvest wrote Pacific advising the latter
of its intention to take over the project and to hold said defendant liable for all
damages which it had incurred and will incur to finish the project.
ISSUE:
Whether or not Pacific Corp is liable for the penalty for the delay they have
incurred when it did not finish the project on the date agreed upon.
HELD:
Filinvest argues that the penalty in its entirety should be respected as it was
a porduct of mutual agreement and it represents only 32% of the 12,470,000
contract price. The penalty was fixed to provide for actual or anticipated liquidated
damages and not simply to ensure compliance with the terms of the contract.
The penalty of 15,000 per day of delay was mutually agreed upon by the
parties and that the same is sanctioned by law. A penal clause is an accessory
undertaking to assume greater liability in case of breach. It is attached to the
obligatio in order to insure performance and has a double function:
As a general rule, Courts are not at liberty to ignore the freedom of the
parties to agree on such terms and conditions, as they see it as long as they are not
ocntrary o law, morals, good customs, public order or public policy. Nevertheless,
courts may equitably reduce a stipulated penalty in the contract in two instances;
Article 1229: The judge shall equitably reduce the penalty when the principal
obligation has been partly or irregularly complied with by the debtor. Even if there
has been no performance, the penalty may also be reduced by the courts if it is
iniquitous or unconscionable.
Unfortunately for Filinvest, the above-quoted doctrine is inapplicable to
herein case.That a distinction between a penalty clause imposed essentially as a
penalty in case of breach and a penalty clause imposed as indemnity for damages
should be made in cases where there has been neither partial nor irregular
compliance with the terms of the contract. In cases where there has been partial or
irregular complaince, there will be no substantial difference between a penalty and
liquidated damages insofar as legal results are concerned.
Article 2226: Liquidated damages are those agreed upon by the parties to a
contract to be paid in case of breach thereof.
In the case herein there has been substantial compliance in good faith on the
part of Pacific which renders unconscionable the application of the full force of the
penalty. Nothing in the records suggests that Pacific's delat in the performance of
5.47% of the contract was due to it having acted neligently or in bad faith.
Thus, Pacific is not liable for the penalty for the delay in the project.
respondent:neal christian, ca
Nature of Obligation:Novation
Facts:
In 1996 and 1997, Swagman Hotels, through Atty. Leonor Infante and Rodney
Hegerty, its president and vice president, respectively, obtained from Neal Christian
loans evidenced by three (3) promissory notes dated august 7, 1996 march 14,
1997 and july 14, 1997. Each promissory notes is in amount of US$ 50,000 payable
after three(3) years from its date with an interest of 15% per annum payable every
three (3) months.
Swagman corporation, together with its president and vice president filed an
answer raising as defenses lack of cause of action and novation of the principal
obligations. Christian had no cause of actio because the three(3) promissory notes
were not yet due and demandable. In December 1997, since Swagman was
experiencing huge losses due to the Asian financial crisis, Christian agreed;
Swagman paid Christian capital repayment in the amount of $750 per month
from January 1998 to Feb 1999.
On May 2000, the RTC declaring the first two(2) promissory notes due and
demandable and that the interest on the loans had been reduced by parties from
15% to 6% per annum.
ISSUE:
Whether or not there is a valid novation? May the original terms of contract
which has been novated still prevail?
HELD:
The cash voucher dated January 1998 states that the payment of $750
represents "INVESTMENT PAYMENT". All succeeding cash vouchers describe the
payments from Feb 1998 to Sept 1999 as "CAPITAL REPAYMENT". All these cash
vouchers served as receipts evidencing private respondent himslef and all the
others were signed by Christian and all others wre signed by his representatives.
Cognizant of these receipts, Christian applied these payments to the three(3)
consolidated principal loans in the summary of payments.
Article 1253: If the debt produces interest, payment of the principal shall not
be deemed to have been made untol the interest has been covered."
Christian would not have signed the receipts describing the payments made
by the petitioner as "capital repayment" if the obligation to pay the interest was
still subsistings. The receipts, as well as Christians summary of payments were for
the principal loans and that the interests on the three(3) consolidated loans were
waived by Christian during the undisputed renegotiation of the loans on the account
of the business reverses suffered by the petitioner at the time.
There was therefore a NOVATION of the terms of the three (3) promissory
notes in that the interest was waived and the principal was payable in monthly
installments of $750. Alterations of the terms and conditions of the obligation would
generally result only in MODIFICATORY NOVATION unless such terms and
conditions are considered to be the essence of the obligation itself. The resulting
NOVATION in this case was therefore, of the MODIFICATORY type, not the
EXTINCTIVE type, since the obligation to pay a sum of money remains in force.
petitioner:Garcia
respondent: THIO
FACTS:
In February 1995 Rica Marie Thio received from petitioner Carolyn Garcia a
crossed checked dated February 24, 1995 in the amount of $100,000 payable to the
order of a certain Marilou Santiago. The amount Garcia received from Thio every
month on March 24, April 26, June 26 and July 26 all in 1995. The amount of $3,000
and P76,500 on July 26, Aug 26, Sept 26 and October 26, 1995.
In June 1995, Thio received from petitioner another crossed check dated June
29,1995 in the maount of P500,000 also payable to the order of Marilou Santiago.
Garcia received from Thio the amounth of P 20,000 every month on August 5, Sept
5, Oct 5 and Nov 1995.
On February 24,1995 Thio borrowed from her the amount of $100,000 with
interest thereon at the rate of 3% per month, which loan would mature on October
26,1995. The amount of this loan was covered by the second check. For both loans
no promissory note was executed since Garcia and Thio were close friends at the
time. Thio paid the stipulated monthly interests for both loans but on their maturity
dates, she failed to pay the principal amounts despite repeated demands.
ISSUE:
Whether or not there was a valid contract of loan between Garcia and Thio?
HELD:
A loan is a real contract, not consensual, and is perfected only upon the
delivery of the object of the contract. Evident in Article 1934:
Delivery is the act by which the res or substance thereof is placed within the
actual or constructive possession or control of another. Although Thio did not
physically receive the proceeds of the checks, these instruments were placed in her
control and possession under an arrangement whereby she actually re-lent the
amounts to Santiago.
There is no valid 3% and 4% monthly interest for the $100,000 and P500,000
loans respectively. There was no written proof of the interest payable except for the
verbal agreement that the loans would earn 3% and 4% interest respectively.
Article 1956 provides that no interest shall be due unless it has been
expressly stipulated in writing.
While there can be no interest, there can legal interest pursuant to Article
2209:
Article 2209:" When the obligation is breached, and it consists in the payment
of a sum of money, the interest due should be that which may have been stipulated
in writing. Furthermore, the interest due shall itself earn legal interest from the time
it is judicially demanded. In the absence of stipulation, the rate of interest shall be
12% per annum to be computed from default.
Thio is liable for the payment of legal interest per annum to be computed
from November 21, 1995, the date when she received petitioner's demand letter.
The amount due shall earn interest at 12% per annum, the interim period being
deemed equivalent to a forbearance of credit.
Facts;
In August 1973, Diaz Realty got a loan form Pacific Banking Corp in the
amount of 720,000 the interest at 12% per annum, later increased to 14% , 16%,
18% and 29%. The loan was secured by a real estate mortgage over two(2) parcels
of land owned by the Diaz Realty, both located in Davao City.
On July 1985, the Central Bank closed Pacific Banking Corporation, placed it
under the receivership and appointed Renan Santos as its liquidator. December
1986, FEBTC purchased the credit of Diaz Realty in favor of PaBC but it was only on
March 23,1988 that Diaz wa informed.
On March 1988 Diaz went to the office of PaBC and was informed that it
was acquired by FEBTC and was informed that his loan is P 1, 447,142 million. Diaz
tendered the amount of P 1,450,000 through Interbank Check in order to prevent
the imposition of additional interest. That FEBTC did not accept it as payment and
was asked to deposit the amount with the defendant's Davao City Branch office
allegedly pending the approval of Central Bank liquidator Renan Santos.
ISSUE:
Whether or not their was a valid tender of payment made by Diaz Realty to
FEBTC?
HELD:
The Court finds that their was a valid tender of payment made by Diaz Realty
to FEBTC.
In general, a check does not constitute legal tender and that the creditor
may validly refuse it. It must be emphasized, however, that this dictum does not
prevent a creditor from accepting a checking as payment. In other words, the
crditor has the option and discretion of refusing or acpting it.
In the present case, FEBTC did not refuse Diaz's check. On the contrary it
accepted the check which, it insisted, was a deposit. The check proved to be fully
funded and was in fact honored by the drawee bank. FEBTC was in possession of
the money for several months.
"Tender of payment is the definitive act of offering the creditor what is due to
him or her, together with the demand that the creditor accept the same. More
importantly, there must be a fusion of intent, ability and capability to make good
such offer, which must be absolute and must cover the amount due.
Diaz intended to settle its obligation with FEBTC is evident from the records
of the case. Upon knowing of the loan balance was 1,447,142.03 it presented to
FEBTC a check in the amount of P 1,450,000 with the specific notification that it was
for full payment.
The tender was made by Diaz for the purpose of settling its obligation. It was
incumbent upon FEBTC to refuse, or accept it as payment. The latter, did not have
the right or the option to accept and treat it as a deposit. By accepting the tendered
check and conevrting it into money, FEBTC is presumed to have accepted it as
payment. To hold otherwise would be inequitable and unfair to DIAZ.
11.