Campbell and Go-Tauco vs. Behn, Meyer & Co.

Facts: There are 2 contracts involved here: a) Campbell and Go-Tauco to build a dwelling in Manila for Behn, Meyer & Co. according to plan and specifications. The parties to the building contract agreed to have certain alterations and additions made to the house, and these were made during the progress of the work. The amount charged by the plaintiffs for the material and labor for these alterations and the extra work was 7,750 pesos, making the total cost of the structures and appurtenances the sum of 22,750.62 pesos, of which sum the defendants paid to the plaintiffs the sum of 13,500 pesos, leaving an unpaid balance claimed by the plaintiffs of $9,250.62, Mexican currency, for which sum the plaintiffs brought this action. b) Campbell contracted with Behn, Meyer &Co. to fill a certain lot, on the bank of the Pasig River, with earth and sand, at the rate of $1.30, Mexican currency, per cubic meter. that plaintiff represented to the defendants that the amount of sand and earth used in the filling of the lot was 62,090.50 cubic meters, and that the defendants paid to the plaintiffs therefor, $81,497.65, Mexican currency; that the amount of earth and sand actually deposited on said lot was 31,000 cubic meter, and that they had paid the plaintiffs for 31,690.50 cubic meters of sand or dirt which was not used to fill the lot in question, amounting to the sum of $41,197.65, Mexican currency. (amount of sand actually delivered was less than represented by the receipts) Plaintiffs claim that they delivered to the defendants 64,444 cubic meters and ask in their reply to the defendants answer for payment of 1,753.50 cubic meters, not paid for, amounting to $2,279.55, Mexican currency. Issues: a) W/N defendants are entitled to claim damages for substandard house that was built b) W/N defendants are entitled to be reimbursed for the sand, which they claim was not received Held: a) No and they need to pay for the unpaid balance amounting to $9,250.62, Mexican currency. By the very fact of accepting the house and occupying it, the defendants acknowledged that it was constructed substantially as required by the contracts, plans, and specifications; and this is the law even when the work is not done according to the contract, but accepted. b) No, but they are no longer required to pay the balance claimed by the plaintiffs. In view of the fact that this filling was measured at so long a time after it was placed on the lot; in view of the fact that the estimates of these witnesses of the amount delivered is but an approximation or guess; in view of the conflict of testimony regarding such amount, and in view of the fact that the defendants,

by their authorized representatives, actually measured the sand and earth, at the time of the delivery of each banca load, in the manner directed by the manager of the defendant, we can not now say that this latter measurement is all wrong and the new measurement all right; especially when there is no proof that any fraud or deceit was practiced on the defendants in the matter of measurements or in the keeping of the accounts thereof. In the absence of fraud, the owner is estopped from denying the receipt of the sand.

Yuson vs. Vitan Facts: From his inheritance, Mar Yuson bought a second hand taxi, with the assistance of Atty. Vitan. Atty. Vitan borrowed Php 100k from Yuson, and executed several postdated checks to cover the debt. Six checks were dishonored, several attempts were made to recover but were unsuccessful, so Yuson seeked help from IBP National Committee on Legal Aid. Atty. Vitan made a promise to settle the debt in time for the debut of Yusons daughter. When the date passed without any payment, complainant demanded a collateral to secure the loan. Thus, in his favor, Atty. Vitan executed a document denominated as a Deed of Absolute Sale, covering the latter's parcel of land located in Sta. Maria, Bulacan. According to complainant, their intention was to transfer the title of the property to him temporarily, so that he could either sell or mortgage15 it. It was further agreed that, if it was mortgaged, respondent would redeem it as partial or full payment of the loan. Curiously, however, the parties executed a second Deed of Absolute Sale, this time in favor of Atty. Vitan, with complainant as vendor. Yuson, mortgaged the land for Php 30k to a 3 rd party, but Atty. Vitan failed to redeem it, contrary to their agreement. Issue: W/N there was a valid dation in payment that extinguished the obligation as claimed by the defendant? Held: NO. Going over the records of this case, we find the contention of Atty. Vitan undeserving of credence. The records reveal that he did not really intend to sell and relinquish ownership over his property in Sta. Maria, Bulacan, notwithstanding the execution of a Deed of Absolute Sale in favor of complainant. The second Deed of Absolute Sale, which reconveyed the property to respondent, is proof that he had no such intention. This second Deed, which he referred to as his "safety net," betrays his intention to counteract the effects of the first one . In a manner of speaking, Atty. Vitan was taking back with his right hand what he had given with his left. The second Deed of Absolute Sale returned the parties right back where they started, as if there were no sale in favor of complainant to

begin with. In effect, on the basis of the second Deed of Sale, respondent took back and asserted his ownership over the property despite having allegedly sold it. Thus, he fails to convince us that there was a bona fide dation in payment or sale that took place between the parties; that is, that there was an extinguishment of obligation.

C.F. Sharp vs. Northwest Airlines Facts: Petitioner was authorized to sell tickets of Northwest Airlines-Japan, but failed to remit the proceeds. This prompted NWA to file suit against petitioner in Tokyo and judgment was rendered in its favor. Thereafter, the RTC issued a writ of execution for foreign courts decision, ordering the plaintiff to pay the amount in Yen at the exchange rate prevailing on the date of foreign judgment, plus 6% interest until May 18, 1983, 12% interest until full payment. Plaintiff appealed claiming that they had already made partial payments and that they should not be liable for the additional 6% interest. CA sustained imposition of 6% interest, lowered the additional interest to 6% and reckoning date to Feb 9, 1995- date of execution of decision, and ruled that the basis of conversion of petitioners liability in its peso equivalent should be the prevailing rate at the time of payment and not on the date of foreign judgment. Issue: W/N conversion rate should be based on the prevailing rate at the time of payment Held: RA 529 states that any provision requiring payment to be made in another currency other than Philippine pesos shall be void. However, this was repealed by R.A. No. 8183. Just like R.A. No. 529, however, the new law does not provide for the applicable rate of exchange for the conversion of foreign currencyincurred obligations in their peso equivalent. It follows, therefore, that the jurisprudence established in R.A. No. 529 regarding the rate of conversion remains applicable. Thus, in Asia World Recruitment, Inc. v. National Labor Relations Commission, the Court, applying R.A. No. 8183, sustained the ruling of the NLRC that obligations in foreign currency may be discharged in Philippine currency based on the prevailing rate at the time of payment. The wisdom on which the jurisprudence interpreting R.A. No. 529 is based equally holds true with R.A. No. 8183. Verily, it is just and fair to preserve the real value of the foreign exchange- incurred obligation to the date of its payment. Petitioners contention that it is Article 1250 of the Civil Code that should be applied is untenable. The rule that the value of the currency at the time of the establishment of the obligation shall be the basis of payment finds application only when there is an official pronouncement or declaration of the existence of an extraordinary inflation or deflation.