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Development Bank of the Philippines vs.

Court with its obligation to execute a deed of conveyance of respondent all the records of the cash advances for the
of Appeals the subject land in favor of private respondents. renovations. Subsequently, or from June to October
G.R. No. 118180, September 20, 1996 of 1997, petitioner made monthly payments of P18,
262 SCRA 245 HELD: 700.00, or a total ofP93, 500.00. Petitioner never
denied the fact that she started making such monthly
FACTS: It is a rule that if the obligation depends payments. Thereafter, the petitioner can no longer be
upon a suspensive condition, the demandability as found and also stopped making the monthly
Private respondents were the original owners well as the acquisition of effectivity of the rights payments. Thus, a complaint was filed against the
of a parcel of land which they mortgaged to petitioner arising from the obligationis suspended pending the petitioner demanding payment of the loan plus
bank and was subsequently foreclosed for the formers happening or fulfillment of the fact or event which interest. Petitioner contended that the loan is not yet
default on their obligation. Consequently, a Transfer constitutes the condition. Once the event which due and demandable as the renovation of the
Certificate of Title was eventually issued in constitutes the condition is fulfilled resulting in the apartment is not yet completed.
petitioners name being the sole bidder in the auction effectivity of the obligation, its effects retroact to the
sale conducted during the foreclosure of said land. moment when the essebtial elements which gave birth Issue:
Thereafter, petitioner and private respondents to the obligation have taken place. Applying this
entered into a Deed of Conditional Salewherein precept to the case, the fullpayment by the appellees Whether or not the loan is already due and
petitioner agreed to reconvey the foreclosed property on April 6, 1990 retroacts to the time the contract of demandable.
to private respondents under the condition that conditional sale was executed on April 6, 1984. From
petitioner shall deliver to private respondents, their that time, all elements of the contract were Ruling:
heirs, administrators and assigns a good and present.Consequently; the contract of sale was
sufficient deed of conveyance covering the property, perfected. As such, the said sale does not come under The loan is already due and demandable due to
subject matter of the said deed of conditional sale, the coverage of R.A. 6657 and E.O. 407. the subsequent agreement entered in to by the parties.
upon completion of payment by said private Article 1291 of the Civil Code provides, thus:
respondents. Further, R.A. 6657 refers to the original
Upon completing the payment of the full repurchase owners of said agricultural lands and petitioner is not Art. 1291. Obligations may be modified by:
price, private respondents demanded from petitioner as such. (1) Changing their object or principal conditions;
the execution of a Deed of Conveyance in their favor. (2) Substituting the person of the debtor;
Maria Tomimbang v. Atty. Jose Tomimbang (3) Subrogating a third person in the rights of the
Petitioner then informed private respondents GR No. 165116; August 4, 2009 creditor.
that the prestation to execute and deliver a deed of
conveyance in their favor had become legally Facts: The petitioner admitted that she started to
impossible in view of Sec.6 of R.A. 6657 comply with the demand of the respondent to pay on a
(Comprehensive Agrarian Reform Law) approved on Petitioner and respondent are siblings. Their monthly basis. Her partial performance of her
June 10, 1988 and Sec.1 of E.O. 407 issued June 10, parents donated to petitioner an eight-door obligation is unmistakable proof that indeed the
1990. The former law annulling all sales, dispositions, apartment located at 149 Santolan Road, Murphy, original agreement between her and respondent had
leases, management contracts or transfers of Quezon City. Petitioner failed to obtain a loan from been novated by the deletion of the condition that
possession of private lands executed by the original PAG-IBIG Fund, hence, respondent offered to extend payments shall be made only after completion of
landowner in violation of the retention limits provided a credit line to petitioner on the following conditions: renovations. Hence, by her very own admission and
thereof upon its effectivity while the latter law (1) petitioner shall keep a record of all the advances; partial performance of her obligation, there can be no
requires all government instrumentalities to (2) petitioner shall start paying the loan upon the other conclusion but that under the novated
immediately execute deeds of transfer in favor of the completion of the renovation; (3) upon completion of agreement, petitioner's obligation is already due and
Republic of the Philippines as represented by the the renovation, a loan and mortgage agreement based demandable.
Department of Agrarian Reform and to surrender to on the amount of the advances made shall be executed
the latter department all landholdings suitable for by petitioner and respondent; and (4) the loan VDA. DE MISTICA VS NAGUIAT
agriculture. agreement shall contain comfortable terms and 418 SCRA 73 December 11, 2003
Aggrieved, private respondents filed a complaint for conditions which petitioner could have obtained from
specific performance with damages against petitioner. PAG-IBIG. FACTS:

ISSUE: A conflict between the siblings ensued leading to On April 5, 1979, Eulalio Mistica, predecessor-
The issue is whether or not said laws had a new agreement whereby petitioner was to start in-interest of herein [petitioner], entered into a
rendered legally impossible compliance by petitioner making monthly payments on her loan. Upon contract to sell with [respondent] Bernardino Naguiat
respondent's demand, petitioner turned over to over a lot. Pursuant to said agreement, respondent
gave a downpayment of P2,000.00. He made another accordance with law and the rules and regulations of P250,00.00 in favor of defendant-appellant
partial payment of P1,000.00 on February 7, 1980. He the Quezon College. Damasa died on October 26, corporation on or before May 15, 1983. On May 24,
failed to make any payments thereafter. Eulalio 1948. Since no payment was rendered on the 1983, plaintiff-appellee informed defendans-
Mistica died sometime in October 1986. On December subscription made in the foregoing letter, Quezon appellants by telegram that the letter of credit was
4, 1991, petitioner filed a complaint for rescission College presented a claim of PhP20,000.00 on her opened May 12, 1983 at the BPI main office in Ayala,
alleging that the failure and refusal of respondents to intestate proceedings. The petitioner administrator but that transmittal was delayed. On May 26, 1983,
pay the balance of the purchase price constitutes a of the estate then contests the validity of said defendants-appellants received a letter advice from
violation of the contract which entitles her to rescind proceedings? the Dumaguete City Branch of BPI dated May 26,
the same. 1983, that a domestic letter of credit had been opened
ISSUE: in favor of Visayan Sawmill Company.
ISSUE: Is the condition laid down by Damasa
Is petitioner entitled to rescission of contract? Crisostomo valid? On July 19, 1983 plaintiffs then demanded that
RULING: defendants comply with the deed of sale. On July 20,
RULING: 1983 defendant corporation informed plaintiffs
The transaction between Eulalio Mistica and There is nothing in the record to show that the lawyer that it is unwilling to continue with the sale
respondents, as evidenced by the Kasulatan, was Quezon College, Inc. accepted the term of payment due to plaintiffs failure to comply with the essential
clearly a Contract of Sale. A deed of sale is considered suggested by Damasa Crisostomo, or that if there was preconditions of the contract.
absolute in nature when there is neither a stipulation any acceptance the same came to her knowledge
in the deed that title to the property sold is reserved to during her lifetime. As the application of Damasa
Crisostomo is obviously at variance with the terms Private respondent prayed for judgment
the seller until the full payment of the price; nor a ordering the petitioner corporation to comply with the
stipulation giving the vendor the right to unilaterally evidenced in the form letter issued by the Quezon
College, Inc., there was absolute necessity on the part contract by delivering to him the scrap iron subject
resolve the contract the moment the buyer fails to pay thereof.
within a fixed period. of the College to express its agreement to Damasa's
offer in order to bind the latter. Conversely, said
acceptance was essential, because it would be unfair ISSUE:
In a contract of sale, the remedy of an unpaid to immediately obligate the Quezon College, Inc.
seller is either specific performance or rescission. under Damasa's promise to pay the price of the Did petitioner corporation violate the terms and
Rescission, however, is allowed only where the breach subscription after she had caused fish to be caught. conditions of the contract?
is substantial and fundamental to the fulfillment of Thus, it cannot be said that the letter ripened into a
the obligation. In the present case, the failure of contract. RULING:
respondents to pay the balance of the purchase price
within ten years from the execution of the Deed did
not amount to a substantial breach. Indeed, the need for express acceptance on the The petitioner corporations obligation to sell is
part of the Quezon College, Inc. becomes the more unequivocally subject to a positive suspensive
imperative, in view of the proposal of Damasa condition. The failure of the private respondent to
Moreover, it is undisputed that during the ten Crisostomo to pay the value of the subscription after comply with the positive suspensive condition cannot
year period, petitioner never made any demand for she has harvested fish, a condition obviously even be considered a breach casual or serious but
the balance of the purchase price. Petitioner even dependent upon her sole will and, therefore, simply an event that prevented the obligation of
refused the payment tendered by respondents during facultative in nature, rendering the obligation void. petitioner corporation to convey title from acquiring
her husbands funeral, thus showing she was not Under the Civil Code it is provided that if the binding force.
exactly blameless for the lapse of the ten year period. fulfillment of the condition should depend upon the
exclusive will of the debtor, the conditional obligation The letter of credit in favor of petitioner was
GR No. L-5003, June 27, 1953 indisputably not in accordance with the stipulation in
the contract signed by the parties on at three counts:
VISAYAN SAWMILL VS CA (1) it was not opened, made or indorsed by the private
FACTS: 219 SCRA 378 March 3, 1993 respondent, but by a corporation which is not a party
to the contract; (2) it was not opened with the bank
On June 1, 1948, Damasa Crisostomo applied FACTS: agreed upon and; (3) it is not irrevocable and
for 200 shares of stock worth PhP100.00 each at unconditional, for it is without recourse, it is set to
Quezon Colleges, Inc. Within her letter of application, On May 1, 1983, herein plaintiff-appellee and expire on a specific date and it stipulates certain
she stipulated, You will find (Babayaran kong lahat defendants appellants entered into a sale involving conditions with respect to shipment.
pagkatapos na ako ay makapag-pahuli ng isda) pesos scrap iron, subject to the condition that plaintiff
as my initial payment and the balance payable in appellee will open a letter of credit in the amount of
Consequently, the obligation of petitioner to sell positive suspensive condition. The buyer does not 1987, however, a year is composed of 12 calendar
did not arise; it therefore cannot be compelled by acquire ownership of the property until he fully pays months. Needless to state, under the Administrative
specific performance to comply with its prestation. the purchase price.In the present case, the deed Code of 1987, the number of days is irrelevant.
executed by the parties did not show that the owner
DE LEON v. ONG intends to reserve ownership of the properties. The There obviously exists a manifest
G.R. No. 170405 February 2, 2010 terms and conditions affected only the manner of incompatibility in the manner of computing legal
payment and not the immediate transfer of periods under the Civil Code and the Administrative
Facts: ownership. It was clear that the owner intended a sale Code of 1987. For this reason, we hold that Section 31,
On March 10, 1993, Raymundo S. De Leon because he unqualifiedly delivered and transferred Chapter VIII, Book I of the Administrative Code of
(petitioner) sold 3 parcels of land to Benita T. ownership of the properties to the respondent 1987, being the more recent law, governs the
Ong(respondent). The said properties were mortgaged computation of legal periods. Lex posteriori derogat
to a financial institution; Real Savings & Loan CIR VS PRIMETOWN priori.
Association Inc. (RSLAI). The parties then executed a GR No. 162155 August 28, 2007
notarized deed of absolute sale with assumption of Following this formula, respondents petition
mortgage. As indicated in the deed of mortgage, the FACTS: (filed on April 14, 2000) was filed on the last day of
parties stipulated that the petitioner (de Leon) shall the 24th calendar month from the day respondent
execute a deed of assumption of mortgage in favor of On March 11, 1999, Gilbert Yap, vice chair of filed its final adjusted return. Hence, it was filed
Ong (respondent)after full payment of the P415,000. respondent Primetown Property Group, Inc., applied within the reglementary period.
They also agreed that the respondent (Ong) shall for the refund or credit of income tax respondent paid
assume the mortgage. The respondent then in 1997. According to Yap, because respondent NAMARCO vs Tecson
subsequently gave petitioner P415,000 as partial suffered losses, it was not liable for income taxes. GR No. L-29131 August 27, 1969
payment. On the other hand, de Leon handed the keys Nevertheless, respondent paid its quarterly corporate
to Ong and de Leon wrote a letter to inform RSLAI income tax and remitted creditable withholding tax FACTS:
that the mortgage will be assumed by Ong. Thereafter, from real estate sales to the BIR in the total amount of On a previous court case, the CFI rendered
the respondent took repairs and made improvements P26,318,398.32. Therefore, respondent was entitled judgment:
in the properties. Subsequently, respondent learned to tax refund or tax credit.
that the same properties were sold to a certain Viloria (a) Ordering the defendants Miguel D.
after March 10, 1993 and changed the locks, rendering On May 13, 1999, revenue officer Elizabeth Y. Tecson and Alto Surety Insurance Co., Inc. to pay
the keys given to her useless. Respondent proceeded Santos required respondent to submit additional jointly and severally plaintiff PRATRA the sum of
to RSLAI but she was informed that the mortgage has documents to support its claim. Respondent complied P7,200.00 plus 7% interest from May 25, 1960 until
been fully paid and that the titles have been given to but its claim was not acted upon. Thus, on April 14, the amount is fully paid, plus P500.00 for attorney's
the said person. Respondent then filed a complaint for 2000, it filed a petition for review in the Court of Tax fees, and plus costs; (b) ordering defendant Miguel
specific performance and declaration of nullity of the Appeals (CTA). On December 15, 2000, the CTA D. Tecson to indemnify his co-defendant Alto Surety
second sale and damages. The petitioner contended dismissed the petition as it was filed beyond the two- & Insurance Co., Inc. on the cross-claim for all the
that respondent does not have a cause of action year prescriptive period for filing a judicial claim for amounts it would be made to pay in this decision, in
against him because the sale was subject to a tax refund or tax credit. Respondents now assail that case defendant Alto Surety & Insurance Co., Inc. pay
condition which requires the approval of RSLAI of the decision for dismissal of the CTA. the amount adjudged to plaintiff in this decision.
mortgage. Petitioner reiterated that they only entered From the date of such payment defendant Miguel D.
into a contract to sell. The RTC dismissed the case. On ISSUE: Tecson would pay the Alto Surety & Insurance Co.,
appeal, the CA upheld the sale to respondent and Inc., interest at 12% per annum until Miguel D.
nullified the sale to Viloria. Petitioner moved for Tecson has fully reimbursed plaintiff of the said
reconsideration to the SC. What is the expiration period for the filing of
the action? amount.
Whether the parties entered into a contract of sale or RULING: Defendant Miguel Tecson seeks the dismissal
a contract to sell? of the complaint on the ground of lack of jurisdiction
Both Article 13 of the Civil Code and Section 31, and prescription. This case was filed exactly on
Held: Chapter VIII, Book I of the Administrative Code of December 21, 1965 but more than ten years have
In a contract of sale, the seller conveys ownership of 1987 deal with the same subject matter the passed a year is a period of 365 days (Art. 13, CCP).
the property to the buyer upon the perfection of the computation of legal periods. Under the Civil Code, a Plaintiff forgot that 1960, 1964 were both leap years
contract. The non-payment of the price is a negative year is equivalent to 365 days whether it be a regular so that when this present case was filed it was filed
resolutory condition. Contract to sell is subject to a year or a leap year. Under the Administrative Code of two days too late.
ISSUE: ISSUE: would construct a sugar central or mill with a capacity
Should the complaint be dismissed on the Whether or not the obligation is one subject to of milling 300 tons of sugar cane every 24 hours and
grounds of prescription? a term. setting forth the mutual obligations and undertakings
of such central and the planters and the terms and
RULING: HELD: conditions under which the sugar cane produced by
The obligation is rather subject to a condition. said planters would be milled in the event of the
In the language of this Court, in People vs. Del Under Article 1125 of the old Civil Code, obligations construction of such sugar central by Ossorio. Such
Rosario, with the approval of the Civil Code of the with a term, for the fulfillment of which a day certain central was in fact constructed by said Ossorio in
Philippines (Republic Act 386) ... we have reverted to has been fixed, shall be demandable only when the Manapla, Negros Occidental, through the North
the provisions of the Spanish Civil Code in accordance day arrives. A day certain is understood to be that Negros Sugar Co., Inc., where after the standard form
with which a month is to be considered as the regular which must necessarily arrive, even though it is not of milling contracts were executed.The parties cannot
30-day month ... and not the solar or civil month," known when. In order that an obligation may be with stipulate as to the milling contracts executed by the
with the particularity that, whereas the Spanish Code a term, it is, therefore, necessary that it should arrive, planters by Victorias, Negros Occidental, other than
merely mentioned "months, days or nights," ours has sooner or later; otherwise, if its arrival is uncertain, as follows: 1) a number of them executed such milling
added thereto the term "years" and explicitly ordains the obligation is conditional. contracts with the North Negros Sugar Co., Inc.; 2)
that "it shall be understood that years are of three while a number of them executed milling contracts
hundred sixty-five days." Viewing in this light the clause on which with the Victorias Milling Co., Inc., which was likewise
The decision was affirmed. defendant relies for the enforcement of its right to buy organized by Miguel J. Ossorio and which had
the property, it would seem that it is not a term, but a constructed another Central at Victorias, Negros
Ernest Berg vs. Magdalena Estate, Inc. condition. Considering the first alternative, that is, Occidental. Thus, after the war, all the sugar cane
G.R. No. L-3784, October 17, 1952 until defendant shall have obtained a loan from the produced by the planters of petitioner associations, in
92 Phil 111 National City Bank of New York, it is clear that the Manapla, Cadiz, as well as in Victorias, who held
granting of such loan is not definite and cannot be milling contracts, were milled in only one central, that
FACTS: held to come within the terms day certain. And if it of the respondent corporation at Victorias. Beginning
The complaint avers that plaintiff and is considered that the period given was until such time with the year 1948, and in the following years, when
defendant are co-owners of said property, the former as defendant could raise money from other sources, the planters-members of the North Negros Planters
being the owner of one-third interest and the latter of then it is also to be indefinite and contingent, and so it Association, Inc. considered that the stipulated 30-
the remaining two-thirds. The division is asked is also a condition and not a term within the meaning year period of their milling contracts executed in the
because plaintiff and defendant are unable to agree of the law. In any event, it is apparent that the year 1918 had already expired and terminated in the
upon the management of the property and upon the fulfillment of the condition contained in this second crop year 1947-1948, and the planters-members of the
partition thereof. alternative is made to depend upon defendants Victorias Planters Association, Inc. likewise
exclusive will, and viewed in this light, the plaintiffs considered the stipulated 30-year period of their
obligation to sell did not arise, for, under article 1115 milling contracts, as having likewise expired and
Defendant answered setting up a special terminated in the crop year 1948-1949, under the
defense and counterclaim. As a special defense, of the old Civil Code, when the fulfillment of the
condition depends upon the exclusive will of the pertinent provisions of the standard milling contract.
defendant claims that on September 22, 1943, it sold Notwithstanding the repeated representations made
to plaintiff one-third of the property in litigation debtor the conditional obligation shall be void.
by the herein petitioners with the respondent
subject to the express condition that should either corporation, the herein respondent has refused and
vendor or vendee decide to sell his undivided share, Victorias Planters vs. Victorias Milling Co. Inc.
G.R. No. L-6648, July 25, 1955 still refuses to accede to the same, contending that
the party selling would grant to the other party first an under the provisions of the milling contract.
irrevocable option to purchase the same at the sellers 97 PHIL 318
price. It avers that in January 1946, plaintiff fixed the ISSUE:
sum of P200, 000 as the price of said share and FACTS:
From 1917 to 1934, the sugar cane planters Manapla Whether or not the trial court erred in rendering
offered to sell it to defendant, which offer was its disputed decision, favoring the petitioner.
accepted and for the payment of said price plaintiff and Cadiz, Negros Occidental, executed identical
gave defendant a period of time which, including the milling contracts, under which the sugar central
"North Negros Sugar Co. Inc." would mill the sugar HELD :
extensions granted would expire on May 31, 1947. The fact that the contracts make reference to
Defendant claims that in spite of its acceptance of the produced by the sugar cane planters of the Manapla
and Cadiz districts. "first milling" does not make the period of thirty (30)
offer, plaintiff refused to accept the payment of the years one of thirty (30) milling years. The term "first
price, and for this refusal defendant suffered damages The sugar cane planters of Manapla and Cadiz, Negros
Occidental had executed a contract whereby Ossorio milling" used in the contracts under consideration
in the amount of P100, 000. For these reasons, was for the purpose of reckoning the thirty-year
defendant asks for specific performance. was given a period up to December 31, 1916 within
which to make a study of and decide whether he period stipulated therein. Even if the thirty-year
period provided for in the contracts be construed as However, violation of any of the terms vacate the premises. Baluyut instead filed an action
milling years, the deduction or extension of six (6) and conditions of this contract shall be a sufficient for annulment of mortgage. His claim was rejected by
years would not be justified. At most on the last year ground for termination thereof by the LESSOR. the RTC and the CA. Petitioner claims that based on
of the thirty-year period stipulated in the contracts the the testimony of Atty. Edwina Mendoza that the
delivery of sugar cane could be extended up to a time The private respondents religiously paid the maturity of the loan which she incurred is only for one
when all the amount of sugar cane raised and monthly rental fees. On January 2, 1990, the lessor year.
harvested should have been delivered to the corporation sent a written notice to the lessees
appellant's mill as agreed upon. Further, the parties informing them of the formers intention to increase ISSUE:
stipulated that in the event of flood, typhoon, the monthly rentals on the occupied premises to Is petitioners contention tenable?
earthquake, or other force majeure, war, insurrection, P3,500.00 monthly effective February 1, 1990. The
civil commotion, organized strike, etc., the contract private respondents refused payment. An ejectment RULING:
shall be deemed suspended during said period, does case was filed against them in court.
not mean that the happening of any of those events Evidence of a prior or contemporaneous verbal
stops the running of the period agreed upon. It only ISSUE: agreement is generally not admissible to vary,
relieves the parties from the fulfillment of their Is the stipulation a potestative period and contradict or defeat the operation of a valid contract.
respective obligations during that time the planters hence void? In the instant case, aside from the testimony of Atty.
from delivering sugar cane and the central from RULING: Mendoza, no other evidence was presented to prove
milling it. In order that the central, the herein that the real date of maturity is one year.
appellant, may be entitled to demand from the other The lease contract between petitioner and
parties the fulfillment of their part in the contracts, respondents is with a period subject to a resolutory
the latter must have been able to perform it but failed The terms that were thusly reduced to writing is
condition. The wording of the agreement is deemed to contain all the terms agreed upon and no
or refused to do so and not when they were prevented unequivocal. The condition imposed in order that the
by force majeure such as war. To require the planters evidence of such terms can be admitted other than the
contract shall remain effective is that the lessee is up- contents of the agreement itself. The promissory note
to deliver the sugar cane which they failed to deliver to-date in his monthly payments. It is undisputed
during the four (4) years of the Japanese occupation is the law between petitioner and private respondents
that the lessees Gutierrez and Co Tong religiously paid and it clearly states that the loan shall mature in one
and the two (2) years after liberation when the mill their rent at the increasing rate of 20% annually. The
was being rebuilt is to demand from the obligors the month from date of the said Promissory Note.
agreement between the lessor and the lessees are
fulfillment of an obligation which was impossible of therefore still subsisting, with the original terms and
performance at the time it became due. MALAYAN REALTY VS UY
conditions agreed upon, when the petitioner GR No. 163763 November 10, 2006
unilaterally increased the rental payment to more
JESPAJO VS CA than 20% or P3,500.00 a month.
GR No. 113626 September 27, 2002 FACTS:

FACTS: The petitioner is estopped from backing out of Malayan Realty, Inc. (Malayan), is the owner of
their representations in the contract with respondent, an apartment unit known as 3013 Interior No. 90 (the
that is, they may not renege on their own acts and property), located at Nagtahan Street, Sampaloc,
On February 1, 1985, said corporation, representations, to the prejudice of the respondents
represented by its President, Jesus L. Uy, entered into Manila. In 1958, Malayan entered into a verbal lease
who relied on them. contract with Uy Han Yong (Uy) over the property at a
separate contracts of lease with Tan Te Gutierrez and
Co Tong. Pursuant to the contract, Tan Te occupied monthly rental of P262.00. The monthly rental was
BALUYUT VS POBLETE increased yearly starting 1989, and by 2001, the
room No. 217 of the subject building at a monthly rent GR No. 144435 February 6, 2007
of P847.00 while Co Teng occupied the Penthouse at a monthly rental was P4,671.65.
monthly rent of P910.00. The terms of the contract FACTS:
among others are the following: On July 17, 2001, Malayan sent Uy a written
PERIOD OF LEASE- The lease period notice informing him that the lease contract would no
shall be effective as of February 1, 1985 and shall On July 20, 1981, Guillermina Baluyut, longer be renewed or extended upon its expiration on
continue for an indefinite period provided the lessee is mortgaged her house to secure a loan in the amount of August 31, 2001, and asking him to vacate and turn
up-to-date in the payment of his monthly rentals. The PhP850,000.00 from the spouses Eulogio and Salud over the possession of the property within five days
LESSEE may, at his option, terminate this contract Poblete. The load was set to mature in one month. from August 31, 2001, or on September 5, 2001.
any time by giving sixty (60) days prior written notice After a month had passed, she was unable to pay her Despite Uys receipt of the notice on June 18, 2001, he
of termination to the LESSOR. indebtedness which led the spouses to extrajudicially refused to vacate the property, prompting Malayan to
foreclose the mortgage. The property was then sold on file before the Metropolitan Trial Court (MeTC) of
Auction to the Poblete spouses who asked Baluyut to Manila a complaint for ejectment, docketed as Civil
Case No. 171256, and was raffled to Branch 3 thereof. Complaint, wherein they alleged that the actual lessee made a new contract for the parties, a power it did not
The Court ruled in favor of Uy and granted an is the corporation. Respondents and the corporation have.
extension period of five years. denied petitioners allegations. Furthermore, the extension of a lease contract must
be made before the term of the agreement expires, not
ISSUE: The MTC dismissed the case. The MTC ruled after. Upon the lapse of the stipulated period, courts
Is respondent Uy entitled to a grant of that the lessees could extend the contract entered into cannot belatedly extend or make a new lease for the
extension by the Court? by the parties unilaterally for another five years for parties, even on the basis of equity. Because the Lease
reasons of justice and equity. It also ruled that the Contract ended on September 15, 1996, without the
RULING: corporations failure to pay the monthly rentals as parties reaching any agreement for renewal,
The 2nd paragraph of Article 1687 provides that they fell due was justified by the fact that petitioner respondents can be ejected from the premises.
in the event that the lessee has occupied the leased refused to honor the basis of the rental increase as
premises for over a year, the courts may fix a longer stated in their Lease Agreement. This was affirmed by Felipe Agoncillo vs. Crisanto Javier
term for the lease. the RTC. It also held that the parties had a reciprocal G.R. No. L-12611, August 7, 1918
The power of the courts to establish a grace period is obligation: unless and until petitioner presented the 38 Phil 124
potestative or discretionary, depending on the increased realty tax, private respondents were not
particular circumstances of the case. Thus, a longer under any obligation to pay the increased monthly FACTS:
term may be granted where equities come into play, rental. The decision was likewise affirmed by the
and may be denied where none appears, always with Court of Appeals. On February 27 1904, Anastasio Alano, Jlose
due deference to the parties freedom to contract. Alano and Florencio Alano executed in favor of the
ISSUE: plaintiff, Dra. Marcela Marino a document stipulating
In the present case, respondent has remained that the Alanos as testamentary heirs of deceased Rev.
in possession of the property from the time the Whether or not the court could still extend the Anastacio Cruz, would pay the sum of P2, 730.50
complaint for ejectment was filed on September 18, term of the lease, after its expiration. within one (1) year with interest of 12 percent per
2001 up to the present time. Effectively, respondents annum representing the amount of debt incurred by
lease has been extended for more than five years, HELD: Cruz. Moreover, the agreement provided that the
which time is, under the circumstances, deemed In general, the power of the courts to fix a Alanos are to convey the house and lot bequeathed to
sufficient as an extension and for him to find another longer term for a lease is discretionary. Such power is them by Cruz in the event of failure to pay the debt in
place to stay. to be exercised only in accordance with the particular money at its maturity.
circumstances of a case: a longer term to be granted
LL and Company Development vs. Huang where equities demanding extension come into play; No part of interest or principal due has been
Chao Chun to be denied where none appear -- always with due paid except the sum of P200 paid in 1908 by
G.R. No. 142378, March 7, 2000 deference to the parties freedom to contract. Thus, Anastacio Alano. In 1912, Anastasio died intestate. On
378 SCRA 612 courts are not bound to extend the lease. August 8, 1914, CFI of Batangas appointed Crisanto
Article 1675 of the Civil Code excludes cases falling Javier as administrator of Anastasios estate. On
FACTS: under Article 1673 from those under Article 1687. March 17, 1916, the plaintiffs filed the complaint
The case originated from an unlawful detainer Article 1673 provides among others, that the lessor against Florencio, Jose and Crisanto praying that
case filed by petitioner before the trial court alleging may judicially eject the lessee upon the expiration of unless defendants pay the debt for the recovery of
that respondents Huang Chao Chun and Yang Tung the period agreed upon or that, which is fixed for the which the action was brought, they be required to
Fa violated their amended lease contract over a 1,112 duration of the leases. Where no period has been convey to plaintiffs the house and lot described in the
square meter lot it owns, when they did not pay the fixed by the parties, the courts, pursuant to Article agreement, that the property be appraised and if its
monthly rentals thereon in the total amount of 1687, have the potestative authority to set a longer value is found to be less than the amount of the debt,
P4,322,900.00. It also alleged that the amended lease period of lease. with accrued interest at the stipulation rate, judgment
contract already expired on September 16, 1996 but In the case, the Contract of Lease provided for a fixed be rendered in favor of the plaintiffs for the balance.
respondents refused to surrender possession thereof period of five (5) years -- specifically from
plus the improvements made thereon, and pay the September 16, 1991 to September 15, 1996. Because ISSUE:
rental arrearages despite repeated demands. The the lease period was for a determinate time, it ceased, The issue is whether or not the agreement that
parties entered into the amended lease contract by express provision of Article 1669 of the Civil Code, the defendant-appellant, at the maturity of the debt,
sometime in August 1991. The same amended the on the day fixed, without need of a demand. Here, will pay the sum of the money lent by the appellees or
lease contract previously entered into by the parties the five-year period expired on September 15, 1996, will transfer the rights to the ownership and
on August 8, 1991. whereas the Complaint for ejectment was filed on possession of the house and lot bequeathed to the
Respondent were joined by the Tsai Chun October 6, 1996. Because there was no longer any former by the testator in favor of the appellees, is
International Resources Inc. in their answer to the lease that could be extended, the MeTC, in effect, valid.
46 Phil 592 pay damages in the sum of P1,000. The Court then
HELD: decided in favor of plaintiff Legarda. After the war and
This stipulation is valid because it is simply an FACTS: the subsequent defeat of the Japanese occupants,
alternative obligation, which is expressly allowed by A building of the plaintiff was insured against defendant filed a case in court claiming that plaintiff
law. The agreement to convey the house and lot on an fire by the defendant in the sum of P30,000.00 as Clara de Legarda violated her agreement with
appraised value in the event of failure to pay the debt well as the goods and merchandise therein contained defendant, by forcing to deposit worthless Japanese
in money at its maturity is valid. It is simply an in the sum of P15,000.00. The house and military notes when they originally agreed that the
undertaking that if debt is not paid in money, it will be merchandise insured were burnt early in the morning interest was to be condoned until after the occupation
paid in another way. The agreement is not open to the of February 28, 1923 while the policies issued by the and that payment was rendered either in Philippine or
objection that the agreement is pacto comisorio. It is defendant in favor of the plaintiff were in force. English currency. Defendant was later substituted
not an attempt to permit the creditor to declare the The appellants contend that under clause 14 of the upon death by his heir Miailhe and the Courts judged
forfeiture of the security upon the failure of the debtor conditions of the policies, it amay rebuild the house in defendants favor. Plaintiff now assails said
to pay at its maturity. It is simply provided that if the burnt and although the house may be smaller, yet it decision.
debt is not paid in money, it shall be paid by the would be sufficient indemnity to the insured for the
transfer of the property at a valuation. Such an actual loss suffered by him. ISSUE:
agreement unrecorded, creates no right in rem, but as Is the tender of payment by plaintiff valid?
between the parties, it is perfectly valid and specific ISSUE: RULING:
performance by its terms may be enforced unless
prevented by the creation of superior rights in favor of Whether or not the defendant company may On February 17, 1943, the only currency available
third persons. perform the alternative obligation despite the fact that was the Philippine currency, or the Japanese Military
the plaintiffs consent was not secured. notes, because all other currencies, including the
The contract is not susceptible of the English, were outlawed by a proclamation issued by
interpretation that the title to the house and lot in HELD: the Japanese Imperial Commander on January 3,
question was to be transferred to the creditor ipso 1942. The right to election ceased to exist on the date
facto upon the mere failure of the debtors to pay the It must be noted that in alternative obligations, of plaintiffs payment because it had become legally
debt at its maturity. The obligations assumed by the the debtor, the insurance company in this case, must impossible. And this is so because in alternative
debtors were in the alternative, and they had the right notify the creditor of his election, stating which of the obligations there is no right to choose undertakings
to elect which they would perform. The conduct of two prestations he is disposed to fulfill, in accordance that are impossible or illegal. In other words, the
parties shows that it was not their understanding that with the law. The object of this notice is to five the obligation on the part of the debtor to pay the
the right to discharge the obligation by the payment of creditor, that is , the plaintiff in the instant case, mortgage indebtedness has since then ceased to be
the money was lost to the debtors by their failure to opportunity to expr3ss his consent. The record shows alternative. It appears therefore, that the tender of
pay the debt at its maturity. The plaintiff accepted the that the appellant company did not give a formal payment in Japanese Military notes was a valid tender
payment from Anastacio in 1908, several years after notice of its selection to rebuild and while the because it was the only currency permissible at the
the debt matured. witnesses speaks of the propped reconstruction of the time and its payment was tantamount to payment in
house destroyed, yet the plaintiff id d not give his Philippine currency.
It is quite clear therefore that under the terms assent to the proposition, for the reason that the new
of the contract, and the parties themselves have house would be smaller and of materials of lower kind
interpreted it, the liability of the defendant as to the However, payment with the clerk of court did
than those employed in the construction of the house not have any legal effect because it was made in
conveyance of the house and lot is subsidiary and destroyed.
conditional, being dependent upon their failure to pay certified check, and a check does not meet the
the debt in money. It must follow therefore that if the requirements of legal tender. Therefore, her
LEGARDA VS MIAILHE consignation did not have the effect of relieving her
action to recover the debt was prescribed, the action GR No. L-3435 April 28, 1951
to compel a conveyance of the house and lot is from her obligation of the defendant.
likewise barred, as the agreement to make such FACTS:
conveyance was not an independent principal ESTANISLAO REYES vs. SEBASTIANA
undertaking, but merely a subsidiary alternative pact MARTINEZ ET AL.,
On June 3, 1944, plaintiffs filed a complaint G.R. No. 32226 . DECEMBER 29, 1930.
relating to the method by which the debt must be against the original defendant William J.B. Burke,
paid. alleging defendants unjustified refusal to accept FACTS:
payment in discharge of a mortgage indebtedness in Estanislao Reyes filed an action against the
Ong Guan Can vs. The Century Insurance his favor, and praying that the latter be order (1) to
Company, Ltd. Martinez heirs in which the plaintiff seeks, among
receive the sum of P75,920.83; (2) to execute the others, to recover five parcels of land, containing
G.R. No. 21196, February 6, 1924 corresponding deed of release of mortgage, and; (3) to approximately one thousand coconut trees, and to
obtain a declaration of ownership in his own favor as FACTS: their answer within the reglementary period, hence
against the defendants with respect to said parcels. This is an appeal to this Court from a decision they were declared in default. PH Credit Corp., was
This cause of action is founded upon the contract, and rendered by the Court of First Instance of then allowed to present its evidence ex-parte. The
the claim by the plaintiff is to have the five parcels Marinduque, wherein the defendants-appellants are RTC judged in favor of PH Credit Corp.
adjudged to him in lieu of another parcel formerly ordered to pay the plaintiff-appellee the sum of P550,
supposed to contain one thousand trees and described with interest from the time of the filing of the On July 27, 1990, a motion for the issuance of a
in paragraph 8 of the contract between him and complaint, and from an order of the same court writ of possession was filed and on October 12, 1990,
certain of the Martinez heirs. By this contract Reyes denying a motion of the defendants-appellants for the the same was granted. The writ of possession itself
was to be given the parcel described in clause 8, but in reconsideration of the judgment on the ground that was issued on October 26, 1990. Said order and writ
a proviso to said clause, the parties contracting with they were deprived of their day in court. of possession are now the subject of this petition.
Reyes agreed to assure to him certain other land Petitioner claims that Respondent Judge erred in
containing an equivalent number of trees in case he ISSUE: applying the presumption of a joint obligation in the
should so elect. What is the nature and effect of the actionable face of the conclusion of fact and law contained in the
document mentioned above? decision showing that the obligation is solidary.
Whether or not Reyes is entitled to the recovery RULING: ISSUE:
of ownership of the five parcels of land subject of this Is the petitioners contention tenable?
case. The decisive question at issue, therefore, is
whether the second part of the written obligation, in RULING:
RULING: which the obligors agreed and promised to deliver a
mortgage over the parcel of land described therein, The Rules of Court requires that all available
The prior history of the litigation shows that upon their failure to pay the debt on a date specified
Reyes elected to take and hold the parcel described in objections to a judgment or proceeding must be set up
in the proceeding paragraph, is valid and binding and in an Omnibus Motion assailing it; otherwise, they are
clause 8, and his right thereto has all along been effective upon the plaintiff-appellee, the creditor. This
recognized in the dispositions made by the court with deemed waived. In the case at bar, the objection of
second part of the obligation in question is what is private respondent to his solidary liability became
respect to said land. In our decision in Martinez vs. known in law as a facultative obligation, defined in
Grao (51 Phil., 287, 301), it was a basal assumption available to him, only after his real property was sold
article 1206 of Civil Code of the Philippines, which at public auction. At the time his personal properties
that Reyes would obtain the thousand trees referred provides:
to; and we are of the opinion that, from various steps were levied and sold, it was not evident to him that he
ART. 1206. When only one prestation has was being held solely liable for the monetary
taken in the prior litigation, Reyes must be taken to been agreed upon, but the obligor may render another
have elected to take that particular parcel and he is judgment rendered against him and his co-
in substitution, the obligation is called facultative. respondents. That was why his objections then did
now estopped from asserting a contrary election to
take the five parcels of land described in paragraph IX not include those he asserted when his solidary
There is nothing in the agreement which would liability became evident.
of his complaint. argue against its enforcement. it is not contrary to law
or public morals or public policy, and notwithstanding
However, the title to the parcel of land elected by the absence of any legal provision at the time it was In the dispositive portion of the January 31,
Reyes is in the heirs of Inocente Martinez and it does entered into government it, as the parties had freely 1984 Decision of the trial court, the word solidary
not appear that they have transferred said title to and voluntarily entered into it, there is no ground or neither appears nor can it be inferred therefrom. The
Reyes. It results therefore that Reyes now has a claim reason why it should not be given effect. It is a new fallo merely stated that the following respondents
for damages against the parties signatory to the right which should be declared effective at once. were liable: Pacific Lloyd Corporation, Thomas H.
contract of March 5, 1921, for the value of the Van Sebille, Carlos M. Farrales and Federico C. Lim.
aforesaid property. We therefore reach the conclusion PH CREDIT CORP VS CA Under the circumstances, the liability is joint, as
that Reyes should either have the land originally set GR No. 109648 November 22, 2001 provided by the Civil Code.
apart for him under clauses 4 and 8 of the contract,
or, in case his right thereto should fail, he should not FACTS: We should stress that respondents obligation is
be required to pay the judgment for P8,000 which based on the judgment rendered by the trial court.
was awarded to the Martinez heirs in Martinez vs. The dispositive portion or the fallo is its decisive
Grao (51 Phil., 287, 302). PH Credit Corp., filed a case against Pacific
Lloyd Corp., Carlos Farrales, Thomas H. Van Sebille resolution and is thus the subject of execution. The
and Federico C. Lim, for [a] sum of money. The case other parts of the decision may be resorted to in order
QUIZANA VS REDUGORIO to determine the ratio decidendi for the disposition.
GR No. L-6620 May 7, 1954 was docketed as Civil Case No. 83-17751 before the
Regional Trial Court, Branch 51, Manila. After service Where there is a conflict between the dispositive part
of summons upon the defendants, they failed to file and the opinion of the court contained in the text or
body of the decision, the former must prevail over the
latter on the theory that the dispositive portion is the This is a petition for certiorari assailing the On August 28, 1979, plaintiff-appellant Nenita
final order, while the opinion is merely a statement Resolution dated September 4, 1991 issued by the Custodio boarded as a paying passenger a public
ordering nothing. Hence the execution must conform National Labor Relations Commission in RAB-VII- utility jeepney with plate No. D7 305 PUJ, then driven
with that which is ordained or decreed in the 0711-84 on the alleged ground that it committed a by defendant Agudo Calebag and owned by his co-
dispositive portion of the decision. grave abuse of discretion amounting to lack of defendant Victorino Lamayo, bound for her work at
jurisdiction in upholding the Alias Writ of Execution Dynetics Incorporated located in Bicutan, Taguig,
CDCP VS ESTRELLA issued by the Labor Arbiter which deviated from the Metro Manila, where she then worked as a machine
GR No. 147791 September 8, 2006 dispositive portion of the Decision dated March 10, operator earning P16.25 a day. While the passenger
1987, thereby holding that the liability of the six jeepney was travelling at (a) fast clip along DBP
FACTS: respondents in a case adjudicated by the NLRC is Avenue, Bicutan, Taguig, Metro Manila another fast
solidary despite the absence of the word "solidary" in moving vehicle, a Metro Manila Transit Corp. bus
On December 29, 1978, respondents Rebecca the dispositive portion of the Decision, when their with plate no. 3Z 307 PUB (Philippines) '79 driven by
G. Estrella and her granddaughter, Rachel E. Fletcher, liability should merely be joint. defendant Godofredo C. Leonardo was negotiating
boarded in San Pablo City, a BLTB bus bound for Honeydew Road, Bicutan, Taguig, Metro Manila
Pasay City. However, they never reached their ISSUE: bound for its terminal at Bicutan. As both vehicles
destination because their bus was rammed from approached the intersection of DBP Avenue and
behind by a tractor-truck of CDCP in the South Is the petitioners liability pursuant to the Honeydew Road they failed to slow down and slacken
Expressway. The strong impact pushed forward their Decision of the Labor Arbiter dated March 10, 1987, their speed; neither did they blow their horns to warn
seats and pinned their knees to the seats in front of solidary or not? approaching vehicles. As a consequence, a collision
them. They regained consciousness only when between them occurred, the passenger jeepney
rescuers created a hole in the bus and extricated their RULING: ramming the left side portion of the MMTC bus. The
legs from under the seats. They suffered physical collision impact caused plaintiff-appellant Nenita
injuries as a result. Thereafter, respondents filed a Custodio to hit the front windshield of the passenger
Complaint for damages against CDCP, BLTB, In the dispositive portion of the Labor Arbiter, jeepney and (she) was thrown out therefrom, falling
Espiridion Payunan, Jr. and Wilfredo Datinguinoo the word "solidary" does not appear. The said fallo onto the pavement unconscious with serious physical
before the Regional Trial Court of Manila, Branch 13. expressly states the following respondents therein as injuries. She was brought to the Medical City Hospital
liable, namely: Filipinas Carbon and Mining where she regained consciousness only after one (1)
ISSUE: Corporation, Gerardo Sicat, Antonio Gonzales, week. Thereat, she was confined for twenty-four (24)
Are the accused jointly or solidarily liable? Industrial Management Development Corporation days, and as a consequence, she was unable to work
RULING: (petitioner INIMACO), Chiu Chin Gin, and Lo Kuan for three and one half months (3 1/2).
The case filed by respondents against petitioner Chin. Nor can it be inferred therefrom that the
is an action for culpa aquiliana or quasi-delict under liability of the six (6) respondents in the case below is A complaint for damages was filed by herein
Article 2176 of the Civil Code. The liability for the solidary, thus their liability should merely be joint. private respondent, who being then a minor was
negligent conduct of the subordinate is direct and assisted by her parents, against all of therein named
primary, but is subject to the defense of due diligence Moreover, it is already a well-settled doctrine defendants following their refusal to pay the expenses
in the selection and supervision of the employee. In in this jurisdiction that, when it is not provided in a incurred by the former as a result of the collision. Said
the instant case, the trial court found that petitioner judgment that the defendants are liable to pay jointly defendants denied all the material allegations in the
failed to prove that it exercised the diligence of a good and severally a certain sum of money, none of them complaint and pointed an accusing finger at each
father of a family in the selection and supervision of may be compelled to satisfy in full said judgment. other as being the party at fault.
Payunan, Jr. Granting that the Labor Arbiter has committed a
mistake in failing to indicate in the dispositive portion ISSUE:
It is well-settled in Fabre, Jr. v. Court of that the liability of respondents therein is solidary, the Whether the evidence presented during the
Appeals, that the owner of the other vehicle which correction -- which is substantial -- can no longer be trial with respect to the proof of due diligence of
collided with a common carrier is solidarily liable to allowed in this case because the judgment has already petitioner MMTC in the selection and supervision of
the injured passenger of the same. The Peitition was become final and executory. its employees, particularly driver Leonardo, is
thusly DENIED. sufficient.
GR No. 101723 May 11, 2000 G.R. No. 104408 1993 June 21, 1993 With the allegation and subsequent proof of
negligence against the defendant driver and of an
FACTS: FACTS: employer-employee relation between him and his co-
defendant MMTC in this instance, the case is The lower court rendered its decision holding Cagayan de Oro City. The complaint was filed against
undoubtedly based on a quasi-delict under Article petitioner solidarily liable and to pay herein both Eparwa and LDCU for underpayment of salary,
2180. When the employee causes damage due to his respondent bank the amount of P50, 000.00 plus legal holiday pay, 13th month pay, rest day, service
own negligence while performing his own duties, interest thereon. Petitioner appealed the said decision incentive leave, night shift differential, overtime pay,
there arises the juris tantum presumption that the to the Court of Appeals. The respondent court, and payment for attorneys fees.
employer is negligent, rebuttable only by proof of however, affirmed the decision of the lower court. The The Labor Arbiter found that the security guards are
observance of the diligence of a good father of a petitioner moved for reconsideration, which was later entitled to wage differentials and premium for holiday
family. For failure to rebut such legal presumption of on denied by the respondent Court of Appeals. and rest day work. The Labor Arbiter held Eparwa
negligence in the selection and supervision of and LDCU solidarily liable pursuant to Article 109 of
employees, the employer is likewise responsible for ISSUE: the Labor Code. LDCU filed an appeal before the
damages, the basis of the liability being the Whether or not the dismissal of the NLRC. LDCU agreed with the Labor Arbiters
relationship of pater familias or on the employer's complaint against Naybe, the principal debtor, and decision on the security guards entitlement to salary
own negligence. against Pantanosas, his co-maker, constituted a differential but challenged the propriety of the
release of his obligation. amount of the award. LDCU alleged that security
Hence, the court consistently held that where guards not similarly situated were granted uniform
the injury is due to the concurrent negligence of the HELD: monetary awards and that the decision did not
drivers of the colliding vehicles, the drivers and The dismissal of the complaint against Naybe include the basis of the computation of the amount of
owners of the said vehicles shall be primarily, directly and Pantanosas did not constitute a release of the award.
and solidarily liable for damages and it is immaterial petitioners obligation, especially because the
that one action is based on quasi-delict and the other dismissal of the case against Pantanosas was upon the ISSUE:
on culpa contractual, as the solidarity of the obligation motion of private respondent itself. Petitioner signed Is LDCU alone ultimately liable to the security
is justified by the very nature thereof. Hence, decision the promissory note as a solidary co-maker and not as guards for the wage differentials and premium for
of respondent Court of Appeals is affirmed. a guarantor. A solidary or joint and several obligation holiday and rest day pay?
is one in which each debtor is liable for the entire
INCIONG VS. COURT OF APPEALS obligation, and each creditor is entitled to demand the RULING:
G.R. No. 96405, June 26, 1996 whole obligation. The promissory note involved in this Articles 106, 107 and 109 of the Labor Code
case expressly states that the three signatories therein read:Art. 106. Contractor or subcontractor.
FACTS: are jointly and severally liable, any one, some or all of Whenever an employer enters into a contract with
On February 3, 1983, petitioner Baldomero L. them may be proceeded against for the entire another person for the performance of the formers
Inciong, Jr. together with Rene C. Naybe and Gregorio obligation. The choice is left to the solidary creditor to work, the employees of the contractor and of the
D. Pantanosas signed a promissory note in the determine against whom he will enforce collection latters subcontractor, if any, shall be paid in
amount of P50, 000.00 holding themselves jointly accordance with the provisions of this Code.Article
and severally liable to private respondent Philippine Under Article 1207 of the Civil Code, when 107. Indirect employer. The provisions of the
Bank of Communications. The promissory note was there are two or more debtors in one and the same immediately preceding Article shall likewise apply to
due on May 5, 1983. Said due date expired without the obligation, the presumption is that the obligation is any person, partnership, association or corporation
promissors having paid their obligation. joint so that each of the debtors is liable only for a which, not being an employer, contracts with an
proportionate part of the debt. There is solidary independent contractor for the performance of any
On November 14, 1983 and on June 8, 1984, liability only when the obligation expressly so states, work, task, job or project. Article 109. Solidary
private respondent sent petitioner telegrams when the law so provides or when the nature of the liability. The provisions of existing laws to the
demanding payment thereof. On December 11, 1983, obligation so requires. contrary notwithstanding, every employer or indirect
private respondent also sent registered mail a final employer shall be held responsible with his contractor
letter of demand to Rene C. Naybe. Since both ESPARWA SECURITY, v. LICEO DE CAGAYAN or subcontractor for any violation of any provision of
obligors did not respond to the demand made, private UNIVERSITY this Code. For purposes of determining the extent of
respondent filed on January 24, 1986 a complaint for G.R. No. 150402 Nov 8, 2006 their civil liability under this Chapter, they shall be
collection of the sum of P50, 000.00 against the three considered as direct employers.
(3) obligors. On January 27, 1987, the lower court FACTS:
dismissed the case against defendant Pantanosas as On 1 December 1997, Eparwa and LDCU, This joint and several liability of the contractor
prayed by herein private respondent. Meanwhile, only entered into a Contract for Security Services. On 21 and the principal is mandated by the Labor Code to
the summons addressed to petitioner was served for December 1998, 11 security guards (security guards) assure compliance of the provisions therein including
the reason that defendant Naybe had gone to Saudi whom Eparwa assigned to LDCU from 1 December the statutory minimum wage [Article 99, Labor Code].
Arabia. 1997 to 30 November 1998, filed a complaint before The contractor is made liable by virtue of his status as
the NLRC Regional Arbitration Branch No. 10 in direct employer. The principal, on the other hand, is
made the indirect employer of the contractors The Supreme court held that the Deed of Agreement which the trial court approved in a
employees for purposes of paying the employees their Absolute Sale is an indivisible contract founded on an Judgment.
wages should the contractor be unable to pay them. indivisible obligation. As such, it being indivisible, it
This joint and several liability facilitates, if not can not be annulled by only one of them. And since Alleging that they failed to abide by the
guarantees, payment of the workers performance of this suit was filed only by the estate of Maximino A. provisions of the Compromise Agreement by their
any work, task, job or project, thus giving the workers Nazareno, Sr. without including the estate of Aurea failure to pay the amounts due thereon, plaintiffs sent
ample protection as mandated by the 1987 Poblete, the present suit must fail. The estate of a letter demanding that the defendants vacate the
Constitution. For the security guards, the actual Maximino A. Nazareno, Sr. can not cause its premises. Plaintiffs subsequently filed an Amended
source of the payment of their wage differentials and annulment while its validity is sustained by the estate Motion for Execution. Acting on the motion, the trial
premium for holiday and rest day work does not of Aurea Poblete. An obligation is indivisible when it court issued its Order dated 11 August 1998 denying
matter as long as they are paid. This is the import of cannot be validly performed in parts, whatever may be the motion.
Eparwa and LDCUs solidary liability. Creditors, such the nature of the thing which is the object thereof. The
as the security guards, may collect from anyone of the indivisibility refers to the prestation and not to the ISSUE:
solidary debtors. Solidary liability does not mean object. The Deed of Sale of January 29, 1970 Is the RTC decision correct?
that, as between themselves, two solidary debtors are supposedly conveyed the six lots to Natividad. The
liable for only half of the payment. obligation is clearly indivisible because the RULING:
LDCUs ultimate liability comes into play because of performance of the contract cannot be done in parts, In herein case, the respondents failed to
the expiration of the Contract for Security Services. otherwise the value of what is transferred is discharge their burden of proving payment. Even
There is no privity of contract between the security diminished. Petitioners are mistaken in basing the assuming that payments were made, it has not been
guards and LDCU, but LDCUs liability to the security indivisibility of a contract on the number of obligors. shown to the full satisfaction of this Court whether the
guards remains because of Articles 106, 107 and 109 In any case, if petitioners only point is that the estate payments were made specifically to satisfy
of the Labor Code. of Maximino, Sr. alone cannot contest the validity of respondents obligation under the Compromise
the Deed of Sale because the estate of Aurea has not Agreement, nor were the circumstances under which
NAZARENO VS. COURT OF APPEALS yet been settled, the argument would nonetheless be the payments were made explained, taking into
G.R. No. 131641, February 23, 2000 without merit. The validity of the contract can be consideration the conditions of the Compromise
questioned by anyone affected by it. A void contract is Agreement.
FACTS: inexistent from the beginning. Hence, even if the
Maximino Nazareno, Sr. and Aurea Poblete estate of Maximino, Sr. alone contests the validity of
were husband and wife. Aurea died on April 15, 1970, the sale, the outcome of the suit will bind the estate of Respondents contract with the petitioners have
while Maximino, Sr. died on December 18, 1980. After Aurea as if no sale took place at all. the force of law between them. Respondents are thus
the death of Maximino, Sr., Romeo filed an intestate bound to fulfill what has been expressly stipulated
case in the Court of First Instance of Cavite, Branch ALONZO VS SAN JUAN therein. Items 11 and 12 of the Compromise
XV, where the case was docketed as Sp. Proc. No. NC- GR No. 137549 February 11, 2005 Agreement provided, in clear terms, that in case of
28. Upon the reorganization of the courts in 1983, the failure to pay on the part of the respondents, they
case was transferred to the Regional Trial Court of FACTS: shall vacate and surrender possession of the land that
Naic, Cavite. Romeo was appointed administrator of A complaint for recovery of possession was filed they are occupying and the petitioners shall be
his fathers estate. In the course of the intestate by Aurelio P. Alonzo and Teresita A. Sison against entitled to obtain immediately from the trial court the
proceedings, Romeo discovered that his parents had Jaime and Perlita San Juan docketed as Civil Case No. corresponding writ of execution for the ejectment of
executed several deeds of sale conveying a number of Q-96-29415 before the Regional Trial Court (RTC) of the respondents. This provision must be upheld,
real properties in favor of his sister, Natividad. One of Quezon City, Branch 77. In their Complaint, plaintiffs because the Agreement supplanted the Complaint
the deeds involved six lots in Quezon City which were alleged that they are the registered owners of a parcel itself. When the parties entered into a Compromise
allegedly sold by Maximino, Sr., with the consent of of land. At around June of 1996, plaintiffs discovered Agreement, the original action for recovery of
Aurea, to Natividad on January 29, 1970 for the total that a portion on the left side of the said parcel of land possession was set aside and the action was changed
amount of P47,800.00. with an area of one hundred twenty-five (125) square to a monetary obligation. Once approved judicially,
meters, more or less, was occupied by the defendants the Compromise Agreement can not and must not be
ISSUE: for more than a year, without their prior knowledge or disturbed except for vices of consent or forgery.
Whether or not the Deed of Absolute of Sale consent. A demand letter was sent to the defendants
can be equated as a divisible obligation. in August of 1996 requiring them to vacate the Tan vs. Court f Appeals
property but they refused to comply; hence, the filing G.R. No. 116285, October 19, 2001
HELD: of the Complaint. During the pendency of the case, 367 SCRA 571
the parties agreed to enter into a Compromise
On May 14, 1978, petitioner Antonio Tan the force of law between the parties and does not delicts is breached, the contravenor can be held liable
obtained two (2) loans in the total principal amount of appear to be inequitable or unjust, the said stipulation for damages. With regard particularly to an award of
four (4) million pesos from respondent Cultural must be respected. interest in the concept of actual and compensatory
Center of the Philippines (CCP), evidenced by 2 damages, the rate of interest, as well as the accrual
promissory notes with maturity dates on May 14, 1979 EASTERN SHIPPING INES, INC vs. HON. thereof, is imposed, as follows:
and July 6, 1979, respectively. Petitioner defaulted but COURT OF APPEALS 1. When the obligation is breached, and it consists in
after a few partial payments he had the loans G.R. No. 97412 Jul 12, 1994 the payment of a sum of money, i.e., a loan or
restructured by respondent CCP, and petitioner forbearance of money, the interest due should be that
accordingly executed a promissory note on August 31, which may have been stipulated in writing.
1979 in the amount of P3,411,421.32 payable in five FACTS: Furthermore, the interest due shall itself earn legal
(5) installments. Petitioner Tan, however, failed to pay On December 4, 1981, two fiber drums of interest from the time it is judicially demanded. In the
any of the supposed installments and again offered riboflavin were shipped from Yokohama, Japan for absence of stipulation, the rate of interest shall be 12%
another mode of paying restructured loan which delivery vessel `SS EASTERN COMET' owned by per annum to be computed from default, i.e., from
respondent CCP refused to consent. defendant Eastern Shipping Lines under Bill of judicial or extrajudicial demand under and subject to
On May 30, 1984, respondent, thru counsel, Lading No. YMA-8 (The shipment was insured under the provisions of Article 1169 23 of the Civil Code.
wrote petitioner demanding the full payment, within plaintiff's Marine Insurance Policy No. 81/01177 for 2. When a obligation, not constituting a loan or
ten (10) days, from receipt of the letter, of the latters P36,382,466.38. forbearance of money, is breached, an interest on the
restructured loan which as of April 30, 1984 amount of damages awarded may be imposed at the
amounted to P6, 088,735.03. Upon arrival of the shipment in Manila on discretion of the court at the rate of 6% per annum.
On August 29, 1984, respondent CCP filed with December 12, 1981, it was discharged unto the custody No interest, however, shall be adjudged on
the RTC of Manila a complaint for a collection of a of defendant Metro Port Services, Inc. The latter unliquidated claims or damages except when or until
sum of money. Eventually, petitioner was ordered to excepted to one drum, said to be in bad order, which the demand can be established with reasonable
pay said amount, with 25% thereof as attorneys fees damage was unknown to plaintiff. On January 7, 1982 certainty. Accordingly, where the demand is
and P500, 000.00 as exemplary damages. The Court defendant Allied Brokerage Corporation received the established with reasonable certainty, the interest
of Appeals, on appeal, reduced the attorneys fees to shipment from defendant Metro Port Service, Inc., shall begin to run from the time the claim is made
5% of the principal amount to be collected from one drum opened and without. On January 8 and 14, judicially or extrajudicially (Art. 1169, Civil Code) but
petitioner and deleted the exemplary damages. 1982, defendant Allied Brokerage Corporation made when such certainty cannot be so reasonably
deliveries of the shipment to the consignees' established at the time the demand is made, the
Still unsatisfied with the decision, petitioner warehouse. The latter excepted to one drum which interest shall begin to run only from the date of the
comes to this Court seeking for the deletion of the contained spillages, while the rest of the contents was judgment of the court is made (at which time the
attorneys fees and the reduction of the penalties. adulterated/fake Plaintiff contended that due to the quantification of damages may be deemed to have
losses/damage sustained by said drum, the consignee been reasonably ascertained).
ISSUE: suffered losses totaling P19,032.95, due to the fault 3. When the judgment of the court awarding a sum of
and negligence of defendants. Claims were presented money becomes final and executory, the rate of legal
against defendants who failed and refused to pay the interest, whether the case falls under paragraph 1 or
The issue is whether or not interests and paragraph 2, above, shall be 12% per annum from
penalties may be both awarded in the case at bar. same "As a consequence of the losses sustained,
plaintiff was compelled to pay the consignee such finality until its satisfaction, this interim period
P19,032.95 under the aforestated marine insurance being deemed to be by then an equivalent to a
HELD: forbearance of credit.
YES. Article 1226 of the New Civil Code policy, so that it became subrogated to all the rights of
provides that in obligations with a penal clause, the action of said consignee against defendants.
Dario Nacar vs Gallery Frames
penalty shall substitute the indemnity for damages
and the payment of interests in case of non- ISSUE:
a.)Whether the payment of legal interest on an award Dario Nacar filed a labor case against Gallery Frames
compliance, if there is no stipulation to the contrary. and its owner Felipe Bordey, Jr. Nacar alleged that he
Nevertheless, damages shall be paid if the obligor for loss or damage is to be computed from the time
the complaint is filed or form the date the decision was dismissed without cause by Gallery Frames on
refuses to pay the penalty or is guilty of fraud in the January 24, 1997. On October 15, 1998, the Labor
fulfillment of the obligation. The penalty may be appealed from is rendered; and b)Whether the
applicable rate of interest is twelve percent or six Arbiter (LA) found Gallery Frames guilty of illegal
enforced only when it is demandable in accordance dismissal hence the Arbiter awarded Nacar
with the provisions of this Code. In the case at bar, the percent.
P158,919.92 in damages consisting of backwages and
promissory note expressly provides for the imposition separation pay.
of both interest and penalties in case of default on the HELD:
part of the petitioner in the payment of the subject When an obligation, regardless of its source,
restructured loan, and since the said stipulation has i.e., law, contracts, quasi-contracts, delicts or quasi-
Gallery Frames appealed all the way to the Supreme a. If stipulated in writing: obligations with respect to said judgments on or after
Court (SC). The Supreme Court affirmed the decision July 1, 2013 shall still incur the 6% rate.
of the Labor Arbiter and the decision became final on a.1. shall run from date of judicial demand (filing of
May 27, 2002. the case) SPS. MALLARI vs. PRUDENTIAL BANK
G.R. No. 197861. June 5, 2013. 697 SCRA 555
After the finality of the SC decision, Nacar filed a a.2. rate of interest shall be that amount stipulated
motion before the LA for recomputation as he alleged DOCTRINE:
that his backwages should be computed from the time b. If not stipulated in writing Unconscionable interest rates The SC has ruled in
of his illegal dismissal (January 24, 1997) until the the following cases that the interest is
finality of the SC decision (May 27, 2002) with b.1. shall run from date of default (either failure to pay unconscionable: 3% and 3.81% per month on a P10
interest. The LA denied the motion as he ruled that upon extra-judicial demand or upon judicial demand Million loan (Toring vs. Sps. Ganzon-Olan, 2008);
the reckoning point of the computation should only be whichever is appropriate and subject to the provisions 66% per annum or 5.5% per month on a P500
from the time Nacar was illegally dismissed (January of Article 1169 of the Civil Code) thousand loan (Medel vs. Court of Appeals, 1998) and;
24, 1997) until the decision of the LA (October 15, 7% and 5% or 84% and 60% per annum (Chua vs.
1998). The LA reasoned that the said date should be b.2. rate of interest shall be 6% per annum Timan, 2008). The Court has also ruled affirmed in a
the reckoning point because Nacar did not appeal plethora of cases that stipulated interest rates of 3%
hence as to him, that decision became final and 2. Non-Monetary Obligations (such as the case at per month and higher are excessive, unconscionable
executory. bar) and exorbitant.

ISSUE: Whether or not the Labor Arbiter is correct. a. If already liquidated, rate of interest shall be 6% per Conscionable interest rates In this case 23% per
annum, demandable from date of judicial or extra- annum or 2% per month as agreed upon by petitioner
HELD: No. There are two parts of a decision when it judicial demand (Art. 1169, Civil Code) and respondent bank is NOT unconscionable. It is
comes to illegal dismissal cases (referring to cases much lower than the above mentioned
where the dismissed employee wins, or loses but wins b. If unliquidated, no interest unconscionable interest rates and there is no
on appeal). The first part is the ruling that the similarity of factual milieu.
employee was illegally dismissed. This is immediately Except: When later on established with certainty.
final even if the employer appeals but will be Interest shall still be 6% per annum demandable from FACTS:
reversed if employer wins on appeal. The second part the date of judgment because such on such date, it is [Decided 2013] In 1984, Petitioner Florentino Mallari
is the ruling on the award of backwages and/or already deemed that the amount of damages is obtained a loan from respondent Prudential Bank in
separation pay. For backwages, it will be computed already ascertained. the amount of P300,000.00. It was subject to an
from the date of illegal dismissal until the date of the interest rate of 21% per annum and, in case of default,
decision of the Labor Arbiter. But if the employer 3. Compounded Interest a penalty of 12% per annum of the total amount due
appeals, then the end date shall be extended until the and attorneys fees equivalent of 15% of the total
day when the appellate courts decision shall become This is applicable to both monetary and non- amount due. This was secured by a Deed of
final. Hence, as a consequence, the liability of the monetary obligations Assignment (DOA) over petitioner's time deposit
employer, if he loses on appeal, will increase this is account. In 1989, Spouses Florentino and Aurea
just but a risk that the employer cannot avoid when it 6% per annum computed against award of damages Mallari obtained another loan from respondent for
continued to seek recourses against the Labor (interest) granted by the court. To be computed from P1.7 million, stipulating interest of 23% per annum
Arbiters decision. This is also in accordance with the date when the courts decision becomes final and with the same penalties in case of default. This was
Article 279 of the Labor Code. executory until the award is fully satisfied by the secured by Real Estate Mortgage (REM).
losing party.
Anent the issue of award of interest in the form of Petitioners defaulted. When computed in 1992, the
actual or compensatory damages, the Supreme Court 4. The 6% per annum rate of legal interest shall be total debt was P571,218.54 and P2,991,294.82 for the
ruled that the old case of Eastern Shipping Lines vs applied prospectively: first and second loans respectively.
CA is already modified by the promulgation of the
Bangko Sentral ng Pilipinas Monetary Board Final and executory judgments awarding damages Respondent tried to extrajudicially foreclose the
Resolution No. 796 which lowered the legal rate of prior to July 1, 2013 shall apply the 12% rate; mortgage. Petitioners on the other hand tried to
interest from 12% to 6%. Specifically, the rules on nullify the mortgage claiming that the Bank imposed
interest are now as follows: Final and executory judgments awarding damages onerous terms and conditions and that the bank was
on or after July 1, 2013 shall apply the 12% rate for unilaterally increasing its charges and interest over
1. Monetary Obligations ex. Loans: unpaid obligations until June 30, 2013; unpaid and above those stipulated. The Bank claimed that the
basis for its computation was all written in the ISSUE: Whether or not an interest rate of 23% per and higher are excessive, unconscionable and
Promissory Notes. annum and 12% per annum penalty is exorbitant. thus, the 23% per annum interest rate
unconscionable. imposed on petitioners loan in this case can by no
The RTC ruled in favor of respondent bank. CA means be considered excessive or unconscionable.
affirmed. HELD: And neither is the 12% per annum penalty charge
No. The Court has also ruled affirmed in a plethora of unconscionable as the counrt found in DBP vs. Family
cases that stipulated interest rates of 3% per month Foods (2009) and Ruiz vs. Court of Appeals (2003).