Professional Documents
Culture Documents
PROVREM Case Digests Set 2
PROVREM Case Digests Set 2
YLLAS LENDING CORP 2. FBDC should have filed a separate complaint against
respondents instead of filing a motion to intervene. (The trial
November 11, 2010 ~ vbdiaz
court quoted Bayer Phils. v. Agana )
ISSUE:
October 6, 2008
HELD: Petition granted
In 2002, Yllas Lending Corporation caused the sheriff of the
trial court to serve an alias writ of seizure against FBDC.
1.NO. Respondents, as well as the trial court, contend that
FBDC found out that in 2001, respondents filed a complaint
Section 22 constitutes a pactum commissorium, a void
for Foreclosure of Chattel Mortgage with Replevin, against
stipulation in a pledge contract. FBDC, on the other hand,
Tirreno, et al. In their complaint, Yllas alleged that they lent a
states that Section 22 is merely a dacion en pago.
sum of money to Tirreno et al and in 2000 executed a Deed of
Chattel Mortgage in favor of Yllas as security for the loan. The
Section 22 of the Lease Contract between FBDC and Terrano
Chattel Mortgage covered properties of the Tirreno’s
states:
restaurant and bar.
(4) the thing pledged is placed in the possession of the Section 1. Who may intervene. — A person who has a legal
creditor, or of a third person by common agreement. Article interest in the matter in litigation, or in the success of either
2088 of the Civil Code prohibits the creditor from of the parties, or an interest against both, or is so situated as
appropriating or disposing the things pledged, and any to be adversely affected by a distribution or other disposition
contrary stipulation is void. of property in the custody of the court or of an officer thereof
may, with leave of court, be allowed to intervene in the
Section 22, as worded, gives FBDC a means to collect action. The court shall consider whether or not the
payment from Tirreno in case of termination of the lease intervention will unduly delay or prejudice the adjudication of
contract or the expiration of the lease period and there are the rights of the original parties, and whether or not the
unpaid rentals, charges, or damages. The existence of a intervenor’s rights may be fully protected in a separate
contract of pledge, however, does not arise just because proceeding.
FBDC has means of collecting past due rent from Tirreno
other than direct payment. Although intervention is not mandatory, nothing in the Rules
proscribes intervention.
The fourth requisite, that the thing pledged is placed in
the possession of the creditor, is absent. There is non- 3. YES. Pursuant to Section 14 of Rule 57, the sheriff is not
compliance with the fourth requisite even if Tirreno’s personal obligated to turn over to respondents the properties subject
properties are found in FBDC’s real property. Tirreno’s of this case in view of respondents’ failure to file a bond.
personal properties are in FBDC’s real property because of the
Contract of Lease, which gives Tirreno possession of the The bond in Section 14 of Rule 57 (proceedings where
personal properties. Since Section 22 is not a contract of property is claimed by third person) is different from the bond
pledge, there is no pactum commissorium. in Section 3 of the same rule (affidavit and bond).
On the other hand, Article 1245 of the Civil Code Under Section 14 of Rule 57, the purpose of the bond is to
defines dacion en pago, or dation in payment, as the indemnify the sheriff against any claim by the intervenor to
alienation of property to the creditor in satisfaction of a debt the property seized or for damages arising from such seizure,
in money. Philippine National Bank v. Pineda held that dation which the sheriff was making and for which the sheriff was
in payment requires delivery and transmission of ownership of directly responsible to the third party.
a thing owned by the debtor to the creditor as an accepted
equivalent of the performance of the obligation. There is no Section 3, Rule 57, on the other hand, refers to the
dation in payment when there is no transfer of ownership in attachment bond to assure the return of defendant’s personal
the creditor’s favor, as when the possession of the thing is property or the payment of damages to the defendant if the
merely given to the creditor by way of security. plaintiff’s action to recover possession of the same property
fails, in order to protect the plaintiff’s right of possession of
2. NO. The Bayer ruling is inapplicable to the present case. said property, or prevent the defendant from destroying the
The third party in Bayer filed his claim during execution; in same during the pendency of the suit.
the present case, FBDC filed for intervention during the trial.
Because of the absence of the indemnity bond in the present
The timing of the filing of the third party claim is important case, FBDC may also hold the sheriff for damages for the
because the timing determines the remedies that a third party taking or keeping of the properties seized from FBDC.
4. YES. A lease contract may be terminated without judicial let alone be bound by the terms of the chattel mortgage
intervention. Consing v. Jamandre upheld the validity of a contract, simply because the mortgagee brings up an
contractually-stipulated termination clause: action for replevin.
This stipulation is in the nature of a resolutory condition, for FBDC exercised its lien to Tirreno’s properties even before
upon the exercise by the [lessor] of his right to take respondents and Tirreno executed their Deed of Chattel
possession of the leased property, the contract is deemed Mortgage. FBDC is adversely affected by the disposition of the
terminated. This kind of contractual stipulation is not illegal, properties seized by the sheriff. Moreover, FBDC’s
there being nothing in the law proscribing such kind of intervention in the present case will result in a complete
agreement. adjudication of the issues brought about by Tirreno’s creation
of multiple liens on the same properties and subsequent
xxx default in its obligations.
Judicial permission to cancel the agreement was not, Ching v. CA, 423 SCRA 356, February 23, 2004
therefore necessary because of the express stipulation in the FACTS: The Philippine Blooming Mills Company, Inc. (PBMCI)
contract of [lease] that the [lessor], in case of failure of the obtained a loan of P9,000,000 from the Allied Banking
[lessee] to comply with the terms and conditions thereof, can Corporation (ABC). As an added security for the said loan,
take-over the possession of the leased premises, thereby Alfredo Ching, together with Emilio Tadeo and Chung Kiat
cancelling the contract of sub-lease. Resort to judicial action Hua, executed a continuing guaranty with the ABC binding
is necessary only in the absence of a special provision them to jointly and severally guarantee the payment of all the
granting the power of cancellation.14 PBMCI obligations owing to the ABC. The PBMCI defaulted in
the payment of all its loans.
A lease contract may contain a forfeiture clause. In the same
manner, we allow FBDC’s forfeiture of Tirreno’s properties in Hence, the ABC filed a complaint for sum of money with
the leased premises. By agreement between FBDC and prayer for a writ of preliminary attachment. Citing as one of
Tirreno, the properties are answerable for any unpaid rent or the grounds for the writ was the fraud defendants employed
charges at any termination of the lease. Such agreement is in incurring the obligations by representing themselves as
not contrary to law, morals, good customs, or public policy. having the financial capacity to pay the loan when in fact they
Forfeiture of the properties is the only security that FBDC may did not have such capacity. In the meantime, on July 26,
apply in case of Tirreno’s default in its obligations. 1983, the deputy sheriff of the trial court levied on
attachment the 100,000 common shares of Citycorp stocks in
NOTES: the name of Alfredo Ching.
1. A chattel mortgagee, unlike a pledgee, need not be in, nor On November 16, 1993, Encarnacion T. Ching, assisted by her
entitled to, the possession of the property, unless and until husband Alfredo Ching, filed a Motion to Set Aside the levy on
the mortgagor defaults and the mortgagee thereupon seeks attachment. She alleged inter alia that the 100,000 shares of
to foreclose thereon. Since the mortgagee’s right of stocks levied on by the sheriff were acquired by her and her
possession is conditioned upon the actual default which itself husband during their marriage out of conjugal funds after the
may be controverted, the inclusion of other parties, like the Citycorp Investment Philippines was established in 1974. She,
debtor or the mortgagor himself, may be required in order to likewise, alleged that being the wife of Alfredo Ching, she was
allow a full and conclusive determination of the case. When a third-party claimant entitled to file a motion for the release
the mortgagee seeks a replevin in order to effect the eventual of the properties. She attached therewith a copy of her
foreclosure of the mortgage, it is not only the existence of, marriage contract with Alfredo Ching.
but also the mortgagor’s default on, the chattel mortgage
that, among other things, can properly uphold the right to ISSUE: WON 100,000 shares of stocks may be levied on by
replevy the property. The burden to establish a valid the sheriff to answer for the loans guaranteed by petitioner
justification for that action lies with the plaintiff [- Alfredo Ching
mortgagee]. An adverse possessor, who is not the
mortgagor, cannot just be deprived of his possession, HELD: No.
RATIO: The CA erred in holding that by executing a daughter, filed with RTC for Collection of Sum of
continuing guaranty and suretyship agreement with the Money and Damages with Prayer for Preliminary
private respondent for the payment of the PBMCI loans, the Attachment. She also attached to her complaint an
petitioner-husband was in the exercise of his profession, affidavit executed by Sy that petitioners were guilty
pursuing a legitimate business. of fraud in entering into the purchase agreement for
they never intended to pay the contract price, and
The shares of stocks are, thus, presumed to be the conjugal that, based on reliable information, they were about
partnership property of the petitioners. The private to move or dispose of their properties to defraud
respondent failed to adduce evidence that the petitioner- their creditors.
husband acquired the stocks with his exclusive money. The RTC ordered for the properties of petitioners to
be levied and attached consisting of one parcel of
The appellate court erred in concluding that the conjugal land and four units of motor vehicle. Petitioners filed
partnership is liable for the said account of PBMCI. an Answer with counterclaim, Urgent Motion to
Article 121 provides: The conjugal partnership shall be liable Dissolve writ of Preliminary Attachment, and Claim
for: (1) All debts and obligations contracted by the husband against Surety Bond. The RTC, then, discharged from
for the benefit of the conjugal partnership, and those attachment the Toyota Ford Fierra, jeep, and
contracted by the wife, also for the same purpose, in the delivery van on humanitarian grounds. The CA later
cases where she may legally bind the partnership. on lifted the RTC Order of Attachment on the ground
that the complaint and affidavit only contain general
For the conjugal partnership to be liable for a liability that averments and failed to states particularly how fraud
should appertain to the husband alone, there must be a was committed by petitioners. The Motion for
showing that some advantages accrued to the spouses. Reconsideration was likewise denied. The SC also
denied Te’s Petition for Review on Certiorari for
having been filed late and for failure to show that a
In this case, the private respondent failed to prove that the reversible error was committed by the CA.
conjugal partnership of the petitioners was benefited by the The RTC, however, apparently not informed of SCs
petitioner-husband’s act of executing a continuing guaranty decision, ruled in favor of herein respondents. On
and suretyship agreement with the private respondent for and their appeal with CA, Spouses Yu questioned only
in behalf of PBMCI. The contract of loan was between the that portion of the July 20, 1994 Decision where the
private respondent and the PBMCI, solely for the benefit of RTC declined to rule on their counterclaim for
the latter. No presumption can be inferred from the fact that damages. However, Spouses Yu did not dispute the
when the petitioner-husband entered into an accommodation specific monetary awards granted to respondent Te;
agreement or a contract of surety, the conjugal partnership and therefore, the same have become final and
would thereby be benefited. The private respondent was executory. The CA, while affirming RTCs decision in
burdened to establish that such benefit redounded to the toto, made a ruling on the counterclaim of Spouses
conjugal partnership. Yu by declaring that the latter had failed to adduce
sufficient evidence of their entitlement to damages.
SPOUSES YU vs NGO YET TE Hence, this petition.
4. On Ruling IV
The SC agrees with the CA that without trial on
the merits having been conducted in the case,
In September 1980, Chuidian allegedly a dummy of Ferdinand compelled by the Marcos administration to agree to the terms
and Imelda Marcos, was able to obtain, allegedly under false of the settlement; (b) Chuidian blackmailed Marcos into
pretenses, a loan guarantee from Philguarantee Corp., the pursuing the settlement agreement by threatening to expose
BOI and the Central Bank, in favor of the Asian Reliability Co. the fact that the Marcoses made investments in Chuidian’s
Inc. (ARCI). ARCI, 98% of which was allegedly owned by American enterprises; and (c) the Aquino administration had
Chuidian, was granted a loan guarantee of US $25M for the ordered Philguarantee not to make further payments on the
establishment of 5 inter-related projects in the country. L/C to Chuidian. However, the Californian court concluded
that Philguarantee was not able to sufficiently show that the
However, Chuidian used the same in investing in corporations settlement should be set aside. On appeal, the CA of the
operating in the US. ARCI then defaulted in the payments of State of California affirmed the judgment of the Superior
the loan, compelling Philguarantee to undertake payments for Court denying Philguarantee’s motion.
the same. Philguarantee sued Chuidian before a Californian
court, charging him of violating the terms of the loan, Chuidian filed before the California Central District Court, an
defaulting in payments and misusing the proceeds for his action against PNB seeking to compel the latter to pay the
personal benefit. Chuidian claimed that he himself was a proceeds of the L/C. Philguarantee intervened in said action,
victim of the systematic plunder perpetrated by the Marcoses. raising the same issues and arguments it had earlier raised in
the action before the Santa Clara Superior Court, alleging that
On November 1985, Philguarantee entered into a compromise PNB was excused from making payments on the L/C since the
agreement with Chuidian whereby Chuidian shall assign and settlement was void due to illegality, duress and fraud.
surrender title to all his companies in favor of the Phil.
Gov’t. In return, Philguarantee shall absolve Chuidian from The Federal Court rendered judgment ruling: (1) in favor of
all civil and criminal liability concerning the payments PNB excusing the said bank from making payment on the L/C;
Philguarantee had made on Chuidian’s defaulted loans. It was and (2) in Chuidian’s favor by denying intervenor
further stipulated that the Phil. government shall pay Philguarantee’s action to set aside the settlement agreement.
Chuidian the amount of US $5.3M. Chuidian received the
1st two installments of the payment. The remaining balance of
US $4.6M was to be paid through an irrevocable Letter of
Credit (L/C) from which Chuidian would draw US $100k
monthly.
Meanwhile a Deed of Transfer was executed between then
Sec. of Finance and then PNB President Edgardo Espiritu, to
facilitate the rehabilitation of PNB. Thus, the gov’t assumed all
liabilities of PNB including the L/C listed in favor of Chuidian in
the amount of US $4.4M
With the advent of the Aquino administration, the newly-
established PCGG exerted earnest efforts to search and
recover properties and assets suspected as having been
illegally acquired by the Marcoses, their relatives and
cronies.Chuidian was among those whose assets were
On July 1987, the gov’t filed before the Sandiganbayan a civil
sequestered by the PCGG. The PNB was directed to place the
case against the Marcos spouses, several gov’t officials, and a
letters of credit under its custody, in behalf of the PCGG.
number of individuals known to be cronies of the Marcoses,
including Chuidian, seeking the reconveyance, accounting and
restitution of all forms of wealth allegedly procured illegally by
the defendants.
In the meantime, Philguarantee filed a motion before the While the case was pending, the Republic filed a motion for
Superior Court of California, seeking to vacate the stipulated issuance of a writ of attachment over the L/C in the name of
judgment containing the settlement between Philguarantee Chuidian, citing as grounds therefor the following:
and Chuidian on the grounds that: (a) Philguarantee was
(1) Chuidian embezzled or fraudulently misapplied the funds (5) Chuidian’s absence from the country does not necessarily
of ARCI acting in a fiduciary capacity, justifying issuance of make him a non-resident; and
the writ under Section 1(b), Rule 57 of the Rules of Court;
(6) Service of summons by publication cannot be used to
(2) The writ is justified under Section 1(d) of the same rule as justify the issuance of the writ since Chuidian had already
Chuidian is guilty of fraud in contracting the debt or incurring submitted to the jurisdiction of the Court by way of a motion
the obligation upon which the action was brought, or that he to lift the freeze order filed through his counsel.
concealed or disposed of the property that is the subject of
the action;
The Sandganbayan denied petitioner’s motion and also the are fixed in Rule 57 of the Rules of Court and the power of the
ISSUE:
UNITED PULP AND PAPER CO., INC vs. the counter-bond. Neither can novation be presumed in this
ACROPOLIS CENTRAL GUARANTY CORPORATION case.
G.R. No. 171750 January 25, 2012 Novation by presumption has never been favored. To be
sustained, it need be established that the old and new
FACTS: contracts are incompatible in all points, or that the will to
novate appears by express agreement of the parties or in acts
On September 29, 2003, Unibox, Ortega and UPPC executed a of similar import.
compromise agreement, wherein Unibox and Ortega
acknowledged their obligation to UPPC in the amount of ALFREDO C. LIM, JR., PETITIONER, vs. SPOUSES TITO S.
P35,089,544.00 as of August 31, 2003, inclusive of the LAZARO AND CARMEN T. LAZARO, RESPONDENTS.
principal and the accrued interest, and bound themselves to
pay the said amount in accordance with a schedule of G.R. No. 185734 July 3, 2013
payments agreed upon by the parties. Consequently, the RTC
promulgated its Judgment dated October 2, 2003 approving
the compromise agreement.
For failure of Unibox and Ortega to pay the required amounts FACTS: Petitioner Lim Jr filed a complaint for a sum of money
for the months of May and June 2004 despite demand by with a prayer for the issuance of a writ of preliminary
UPPC, the latter filed its Motion for Execution to satisfy the attachment against the respondent Sps Lazaro. The RTC
remaining unpaid balance. In the July 30, 2004 Order, the granted the writ of preliminary attachment application and
RTC acted favorably on the said motion and, on August 4, upon the posting of the required bond issued the
2004, it issued the requested Writ of Execution. corresponding writ on October 14, 2005. 3 parcels of land
owned by the respondent spouses were levied upon.
ISSUE:
The parties later entered into a Compromise Agreement
Whether the execution of the compromise agreement whereby Sps. Lazaro agreed to pay Lim, Jr. the amount of
between UPPC and Unibox and Ortega was tantamount to a P2,351,064.80 on an installment basis, following a schedule
novation, which had the effect of releasing Acropolis from its of payments covering the period from September 2006 until
obligation under the counter-attachment bond. October 2013. The RTC rendered a decision on the basis of
the compromise.
RULING:
xxxx