JANUARY

NFF INDUSTRIAL CORPORATION vs. G & L ASSOCIATED BROKERAGE

G.R. No. 178169 January 12, 2015

FACTS: On July 20, 1999, it ordered from petitioner, by way of Purchase Order No. 97-
002, one thousand (1,000) pieces of bulk bags from petitioner at a unit price of
(P380.00) per piece for a total purchase price of Three Hundred Eighty Thousand Pesos
(P380,000.00). The said bulk bags were to be used by respondent company for the
purpose of hauling cement from Hi-Cement Corporation at Norzagaray, Bulacan, toa
dam project in Casecnan, Nueva Ecija, the respondent company having been
designated as one of the many haulers at the Hi-Cement Corporation. On July 26, 1999,
respondent company formalized its offer through a letter containing the same terms as
the Purchase Order and providing for other details regarding the purchase.

According to respondents, the Purchase Order specifically provides that the bulk bags
were to be delivered at Hi-Cement Corporation to Mr. Raul Ambrosio, respondent
companys checker and authorized representative assigned thereat. Subsequently,
however, the ordered bulk bags were not delivered to respondent company, the same
not having been received by the authorized representative in conformity with the terms
of the Purchase Order.

Meanwhile, thirty (30) days elapsed from the time the last alleged delivery was made but
no payment was effected by respondent company. This prompted petitioner to send a
demand letter dated October 27, 1999 to respondent company. As respondent company
failed to respond to the demand letter, petitioner followed up its claim from the former
through a series of telephone calls. Again, since no concrete answer was provided by
respondent company, petitioner sent another demand letter dated November 23, 1999;
and finally, a third demand letter dated October 2, 2001. As the demands remained
unheeded, petitioner

ISSUE: Whether or not there was valid delivery on the part of petitioner in accordance
with law, which would give rise to an obligation to pay on the part of respondent for the
value of the bulk bags.

HELD: We find respondents' contention devoid of persuasive force.

The resolution of the issue at bar necessitates a scrutiny of the concept of "delivery" in
the context of the Law on Sales. Under the Civil Code, the vendor is bound to transfer
the ownership of and deliver, as well as warrant the thing which is the object of the sale.
The ownership of thing sold is considered acquired by the vendee once it is delivered to
him in the following wise:

Art. 1496. The ownership of the thing sold is acquired by the vendee from the moment it
is delivered to him in any of the ways specified in Articles 1497 to 1501, or in any other
manner signifying an agreement that the possession is transferred from the vendor to
the vendee.

Art. 1497. The thing sold shall be understood as delivered, when it is placed in the
control and possession of the vendee.

Thus, ownership does not pass by mere stipulation but only by delivery. Manresa
explains, "the delivery of the thing x x x signifies that title has passed from the seller to
the buyer." Moreover, according to Tolentino, the purpose of delivery is not only for the
enjoyment of the thing but also a mode of acquiring dominion and determines the
transmission of ownership, the birth of the real right. The delivery under any of the forms
provided by Articles 1497 to 1505 of the Civil Code signifies that the transmission of
ownership from vendor to vendee has taken place. Here, emphasis is placed on Article
1497 of the Civil Code, which contemplates what is known as real or actual
delivery,when the thing sold is placed in the control and possession of the vendee.

In Equatorial Realty Development, Inc. v. Mayfair Theater, Inc., the concept of "delivery"
was elucidated, to wit:
Delivery has been described as a composite act, a thing in which both parties must join
and the minds of both parties concur. It is an act by which one party parts with the title to
and the possession of the property, and the other acquires the right to and the
possession of the same. In its natural sense, delivery means something in addition to the
delivery of property or title; it means transfer of possession. In the Law on Sales, delivery
may be either actual or constructive, but both forms of delivery contemplate "the
absolute giving up of the control and custody of the property on the part of the vendor,
and the assumption of the same by the vendee."

Applying the foregoing criteria to the case at bar, We find that there were various
occasions of delivery by petitioner to respondents, and the same was duly
acknowledged by respondent Trinidad.
 EASTERN SHIPPING LINES, INC. vs. BPI/MS INSURANCE CORP.
G.R. No. 182864 January 12, 2015

FACTS: BPI/MS and Mitsui on 2 February 2004 at Yokohama, Japan, Sumitomo

Corporation shipped on board ESLIs vessel M/V "Eastern Venus 22" 22 coils of various
Steel Sheet in good order and condition for transportation to and delivery at the port of
Manila in favor of consignee Calamba Steel Center, Inc. as evidenced by a Bill of Lading
with Nos. ESLIYMA001. On 11 February 2004, the complaint alleged that the shipment
arrived at the port of Manila in an unknown condition and was turned over to ATI for
safekeeping. Upon withdrawal of the shipment by the Calamba Steels representative, it
was found out that part of the shipment was damaged and was in bad order condition.

On 12 May 2004 at Kashima, Japan, Sumitomo Corporation again shipped on board

ESLIs vessel M/V "Eastern Venus 25" 50 coils in various Steel Sheet, in good order and
condition for transportation to and delivery at the port of Manila in favor of the same
consignee Calamba Steel as evidenced by a Bill of Lading with Nos. ESLIKSMA002. On
21 May 2004, ESLIs vessel withthe second shipment arrived at the port of Manila partly
damaged and in bad order. The coils sustained further damage during the discharge
from vessel to shore until its turnover to ATIs custody for safekeeping.

Upon withdrawal from ATI and delivery to Calamba Steel, it was found out that the
damage amounted to US$12,961.63. As it did before, Calamba Steel rejected the
damaged shipment for being unfit for the intended purpose.

ISSUE: Whether or not ESLI and ATI are liable for the damages.

HELD: Common carriers, from the nature of their business and on public policy
considerations, are bound to observe extra ordinary diligence in the vigilance over the
goods transported by them. Subject to certain exceptions enumerated under Article 1734
of the Civil Code, common carriers are responsible for the loss, destruction, or
deterioration of the goods. The extraordinary responsibility of the common carrier lasts
from the time the goods are unconditionally placed in the possession of, and received by
the carrier for transportation until the carrier delivers the same, actually or constructively,
to the consignee, or to the person who has a right to receive them.

In maritime transportation, a bill of lading is issued by a common carrier as a contract,

receipt and symbol of the goods covered by it. If it has no notation of any defect or
damage in the goods, it is considered as a "clean bill of lading." A clean bill of lading
constitutes prima facie evidence of the receipt by the carrier of the goods as therein
described.

Mere proof of delivery of the goods in good order to a common carrier and of their arrival
in bad order at their destination constitutes a prima facie case of fault or negligence
against the carrier. If no adequate explanation is given as to how the deterioration, loss,
or destruction of the goods happened, the transporter shall be held responsible. From
the foregoing, the fault is attributable to ESLI. While no longer an issue, it may be
nonetheless state that ATI was correctly absolved of liability for the damage.
 NEIL B. AGUILAR and RUBEN CALIMBAS vs. LIGHTBRINGERS CREDIT
COOPERATIVE
G.R. No. 209605 January 12, 2015

FACTS: This case stemmed from the three (3) complaints for sum of money separately
filed by respondent Ligh tbringers Credit Cooperative (respondent) on July 14, 2008
against petitioners Aguilar and Calimbas, and one Perlita Tantiangco (Tantiangco).

1. In Civil Case No. 1428, Tantiangco allegedly borrowed P206,315.71 as evidenced by

Cash Disbursement Voucher No. 4010 but the net loan was only P45,862.00 as
supported by PNB Check No. 0000005133.

2. In Civil Case No. 1429, petitioner Calimbas allegedly borrowed P202,800.18 as

evidenced by Cash Disbursement Voucher No. 3962 but the net loan was
only P60,024.00 as supported by PNB Check No. 0000005088;

3. In Civil Case No. 1430, petitioner Aguilar allegedly borrowed P126,849.00 as

evidenced by Cash Disbursement Voucher No. 3902 but the net loan was
only P76,152.00 as supported by PNB Check No. 0000005026;

Tantiangco, Aguilar and Calimbas filed their respective answers. They uniformly claimed
that the discrepancy between the principal amount of the loan evidenced by the cash
disbursement voucher and the net amount of loan reflected in the PNB checks showed
that they never borrowed the amounts being collected. They also asserted that no
interest could be claimed because there was no written agreement as to its imposition.

ISSUE: Whether or not the Court holds that there was indeed a contract of loan
between the petitioners and respondent.

HELD: In Pacheco v. Court of Appeals, this Court has expressly recognized that a check
constitutes an evidence of indebtedness and is a veritable proof of an obligation. Hence,
it can be used in lieu of and for the same purpose as a promissory note. In fact, in the
seminal case of Lozano v. Martinez, We pointed out that a check functions more than a
promissory note since it not only contains an undertaking to pay an amount of money but
is an "order addressed to a bank and partakes of a representation that the drawer has
funds on deposit against which the check is drawn, sufficient to ensure payment upon its
presentation to the bank." This Court reiterated this rule in the relatively recent Lim v.
Mindanao Wines and Liquour Galleria stating that a check, the entries of which are in
writing, could prove a loan transaction.
 ||REPUBLIC V. SPOUSES CASTUERA
G.R. NO. 203384 JANUARY 14, 2015

FACTS: Andres Valiente owned a 3,135-square meter land in Barangay Siminublan,

San Narciso, Zambales. In 1978, he sold the property to respondents Jose and Perla
Castuera (Spouses Castuera). On 21 May 2003, the Spouses Castuera filed with the
RTC an application for original registration of title over the property.

The Spouses Castuera also presented documentary evidence to support their

application. The documents included tax receipts and an advance plan with a notation,
"Checked and verified against the cadastral records on file in this office and is for
registration purposes. This survey is within the Alienable and Disposable land proj. No.
3-H certified by Director of Forestry on June 20, 1927 per LC Map No. 669 Sheet 1."
Petitioner Republic of the Philippines (petitioner), through the Office of the Solicitor
General, filed an opposition to the application for original registration.
ISSUE: Whether or not advance plan and CENRO certification are sufficient to prove the
alienable and disposable character of the property.

HELD: The advance plan and the CENRO certification are insufficient proofs of the
alienable and disposable character of the property. The Spouses Castuera, as
applicants for registration of title, must present a certified true copy of the Department of
Environment and Natural Resources Secretary's declaration or classification of the land
as alienable and disposable. In Republic of the Philippines v. Heirs of Juan Fabio,
citing Republic v. T.A.N. Properties, Inc., the Court held that:
In Republic v. T.A.N. Properties, Inc., we ruled that it is not enough for
the Provincial Environment and Natural Resources Office (PENRO) or
CENRO to certify that a land is alienable and disposable. The applicant
for land registration must prove that the DENR Secretary had approved
the land classification and released the land of the public domain as
alienable and disposable, and that the land subject of the application for
registration falls within the approved area per verification through survey
by the PENRO or CENRO. In addition, the applicant must present a
copy of the original classification of the land into alienable and
disposable, as declared by the DENR Secretary, or as proclaimed by
the President. Such copy of the DENR Secretary's declaration or the
President's proclamation must be certified as a true copy by the legal
custodian of such official record. These facts must be established to
prove that the land is alienable and disposable.
 RICARDO C. HONRADO, vs. GMA NETWORK FILMS, INC.
G.R. No. 204702 January 14, 2015

FACTS: On 11 December 1998, GMA Network Films Inc. entered into a "TV Rights
Agreement" with petitioner under which petitioner granted to GMA Films, for a fee of the
exclusive right to telecast the 36 films for a period of three years. Under Paragraph 3 of
the Agreement, the parties agreed that "all betacam copies of the [films] should pass
through broadcast quality test conducted by GMA-7," the TV station operated by GMA
Network, Inc. an affiliate of GMA Films.

Two of the films covered by the Agreement were Evangeline Katorse and Bubot.

In 2003, GMA Films sued petitioner to collect P1.6 million representing the fee it paid for
Evangeline Katorse (P1.5 million) and a portion of the fee it paid for Bubot (P350,000).

GMA Films alleged that it rejected Evangeline Katorse because "its running time was too
short for telecast" and petitioner only remitted P900,000 to the owner of Bubot, keeping
for himself the balance of P350,000. GMA Films prayed for the return of such amount on
the theory that an implied trust arose between the parties as petitioner fraudulently kept
it for himself.

Petitioner denied liability, counter-alleging that after GMA Films rejected Evangeline
Katorse, he replaced it with another film, Winasak na Pangarap, which GMA Films
accepted. As proof of such acceptance, petitioner invoked a certification of GMA
Network, dated 30 March 1999, attesting that such film "is of good broadcast quality
(Film Certification). Regarding the fee GMA Films paid for Bubot, petitioner alleged that
he had settled his obligation to Alano. Alternatively, petitioner alleged that GMA Films,
being a stranger to the contracts he entered into with the owners of the films in question,
has no personality to question his compliance with the terms of such contracts.
Petitioner counterclaimed for attorneys fees.

ISSUE: Whether the CA erred in finding petitioner liable for breach of the Agreement
and breach of trust.

HELD: The Agreement, as its full title denotes ("TV Rights Agreement"), is a licensing
contract, the essence of which is the transfer by the licensor (petitioner) to the licensee
(GMA Films), for a fee, of the exclusive right to telecast the films listed in the Agreement.
Stipulations for payment of "commission" to the licensor is incongruous to the nature of
such contracts unless the licensor merely acted as agent of the film owners. Nowhere in
the Agreement, however, did the parties stipulate that petitioner signed the contract in
such capacity. On the contrary, the Agreement repeatedly refers to petitioner as
"licensor" and GMA Films as "licensee." Nor did the parties stipulate that the fees paid
by GMA Films for the films listed in the Agreement will be turned over by petitioner to the
film owners. Instead, the Agreement merely provided that the total fees will be paid in
three installments (Paragraph 3).

We entertain no doubt that petitioner forged separate contractual arrangements with the
owners of the films listed in the Agreement, spelling out the terms of payment to the
latter. Whether or not petitioner complied with these terms, however, is a matter to which
GMA Films holds absolutely no interest. Being a stranger to such arrangements, GMA
Films is no more entitled to complain of any breach by petitioner of his contracts with the
film owners than the film owners are for any breach by GMA Films of its Agreement with
petitioner.

We find it unnecessary to pass upon the question whether an implied trust arose
between the parties, as held by the CA. Such conclusion was grounded on the
erroneous assumption that GMA Films holds an interest in the disposition of the
licensing fees it paid to petitioner.
 BPI V. SPOUSES CASTRO
G.R. No. 195272 January 14, 2015

FACTS: The Complaint has its origins from the two loans contracted by respondent
Spouses David and Consuelo B. Castro from Prudential Bank in the amounts of
P100,000.00 and P55,000.00 in July and August 1987. The first loan's maturity date was
on 18 January 1988 while the second loan had a maturity date of 23 February 1988. The
P100,000.00 loan was secured by a Real Estate Mortgage (REM) over petitioners'
property located in Quezon City while the P55,000.00 loan was secured by another REM
over two parcels of land located in Alaminos, Laguna, registered in the name of David's
mother, Guellerma Malabanan.|||

The loans remained unpaid as of 30 April 1996 and the balances ballooned to
P290,205.05 on the P100,000.00 loan and P96,870.20 on the P55,000.00 loan.
Prudential Bank, through counsel, filed two separate petitions for foreclosure of the
mortgage. In their first petition, Prudential Bank admitted that through inadvertence, the
photocopies of the first two pages of the REM covering the properties in Laguna were
mixed and attached to the photocopies of the last two pages of the REM covering the
Quezon City property. Thus, in the Notice of Sheriff's Sale, the name "Guellerma
Malabanan rep. by her AIF David M. Castro" appeared as mortgagor while the amount of
mortgaged indebtedness is P96,870.20. The real property described therein however is
the Quezon City property.||

ISSUE: Whether or not the foreclosure sale is valid despite error in publication.

HELD: In Century Savings Bank v. Samonte citing Olizon v. Court of Appeals, the Court
reiterated the purpose of the rule on notice, to wit:
The object of a notice of sale is to inform the public of the nature and
condition of the property to be sold, and of the time, place and terms of
the sale. Notices are given for the purpose of securing bidders and to
prevent a sacrifice of the property. If these objects are attained,
immaterial errors and mistakes will not affect the sufficiency of the
notice; but if mistakes or omissions occur in the notices of sale, which
are calculated to deter or mislead bidders, to depreciate the value of the
property, or to prevent it from bringing a fair price, such mistakes or
omissions will be fatal to the validity of the notice, and also to the sale
made pursuant thereto.
The mistakes and omissions referred to in the above-cited ruling which would invalidate
notice pertain to those which: 1) are calculated to deter or mislead bidders, 2) to
depreciate the value of the property, or 3) to prevent it from bringing a fair price.
 RODRIGO RIVERA vs. SPOUSES SALVADOR CHUA
G.R. No. 184458 January 14, 2015

FACTS: On 24 February 1995, Rivera obtained a loan from Sps. Chua. In return, Rivera
issued a promissory note in favor of Sps. Chua. For partial payment, Rivera issued 2
checks in favor of Sps. Chua. Upon presentment for payment, the two checks were
dishonored for the reason "account closed."

The Promissory Note is unequivocal about the date when the obligation falls due and
becomes demandable31 December 1995. As of 1 January 1996, Rivera had already
incurred in delay when he failed to pay the amount ofP120,000.00 due to the Spouses
Chua on 31 December 1995 under the Promissory Note.

ISSUE: Whether or not demand is no longer necessary in applying the provisions of the
Negotiable Instruments Law.

HELD: Article 1169 of the Civil Code explicitly provides:

Art. 1169. Those obliged to deliver or to do something incur in delay from the time the
obligee judicially or extrajudicially demands from them the fulfillment of their obligation.

However, the demand by the creditor shall not be necessary in order that delay may
exist:

(1) When the obligation or the law expressly so declare; or

(2) When from the nature and the circumstances of the obligation it appears that
the designation of the time when the thing is to be delivered or the service is to
be rendered was a controlling motive for the establishment of the contract; or

(3) When demand would be useless, as when the obligor has rendered it beyond
his power to perform.

In reciprocal obligations, neither party incurs in delay if the other does not comply or is
not ready to comply in a proper manner with what is incumbent upon him. From the
moment one of the parties fulfills his obligation, delay by the other begins.

There are four instances when demand is not necessary to constitute the debtor in
default: (1) when there is an express stipulation to that effect; (2) where the law so
provides; (3) when the period is the controlling motive or the principal inducement for the
creation of the obligation; and (4) where demand would be useless. In the first two
paragraphs, it is not sufficient that the law or obligation fixes a date for performance; it
must further state expressly that after the period lapses, default will commence.
 MANUEL JUSAYAN vs. JORGE SOMBILLA
G.R. No. 163928 January 21, 2015

FACTS: Wilson Jesena owned four parcels of land situated in New Lucena, Iloilo. On
June 20, 1970, Wilson entered into an agreement with respondent Jorge, wherein
Wilson designated Jorge as his agent to supervise the tilling and farming of his riceland
in crop year 1970-1971. On August 20, 1971, before the expiration of the agreement,
Wilson sold the four parcels of land to Timoteo Jusayan. Jorge and Timoteo verbally
agreed that Jorge would retain possession of the parcels of land and would deliver 110
cavans of palay annually to Timoteo without need for accounting of the cultivation
expenses provided that Jorge would pay the irrigation fees. From 1971 to 1983, Timoteo
and Jorge followed the arrangement. In 1975, the parcels of land were transferred in the
names of Timoteos sons, the petitioners. In 1984, Timoteo sent several letters to Jorge
terminating his administration and demanding the return of the possession of the parcels
of land.

ISSUE: Whether or not the relationship between the petitioners and respondent is that of
agency or agricultural leasehold.

HELD: In agency, the agent binds himself to render some service or to do something in
representation or on behalf of the principal, with the consent or authority of the latter.
The basis of the civil law relationship of agency is representation, the elements of which
are, namely: (a) the relationship is established by the parties consent, express or
implied; (b) the object is the execution of a juridical act in relation to a third person; (c)
the agent acts as representative and not for himself; and (d) the agent acts within the
scope of his authority. Whether or not an agency has been created is determined by the
fact that one is representing and acting for another. The law does not presume agency;
hence, proving its existence, nature and extent is incumbent upon the person alleging it.

Yet, the lease of an agricultural land can be either a civil law or an agricultural
lease.1wphi1 In the civil law lease, one of the parties binds himself to give to another
the enjoyment or use of a thing for a price certain, and for a period that may be definite
or indefinite. In the agricultural lease, also termed as a lease hold tenancy, the physical
possession of the land devoted to agriculture is given by its owner or legal possessor
(landholder) to another (tenant) for the purpose of production through labor of the latter
and of the members of his immediate farm household, in consideration of which the
latter agrees to share the harvest with the landholder, or to pay a price certain or
ascertainable, either in produce or in money, or in both. Specifically, in Gabriel v.
Pangilinan, this Court differentiated between a leasehold tenancy and a civil law lease in
the following manner, namely: (1) the subject matter of a leasehold tenancy is limited to
agricultural land, but that of a civil law lease may be rural or urban property; (2) as to
attention and cultivation, the law requires the leasehold tenant to personally attend to
and cultivate the agricultural land; the civil law lessee need not personally cultivate or
work the thing leased; (3) as to purpose, the landholding in leasehold tenancy is devoted
to agriculture; in civil law lease, the purpose may be for any other lawful pursuits; and(4)
as to the law that governs, the civil law lease is governed by the Civil Code, but the
leasehold tenancy is governed by special laws.

In Teodoro v. Macaraeg, this Court has synthesized the elements of agricultural tenancy
to wit: (1) the object of the contract or the relationship is an agricultural land that is
leased or rented for the purpose of agricultural production; (2) the size of the landholding
is such that it is susceptible of personal cultivation by a single person with the assistance
of the members of his immediate farm household; (3) the tenant-lessee must actually
and personally till, cultivate or operate the land, solely or with the aid of labor from his
immediate farm household; and (4) the landlord-lessor, who is either the lawful owner or
the legal possessor of the land, leases the same to the tenant-lessee for a price certain
or ascertainable either in an amount of money or produce.

It can be gleaned that in both civil law lease of an agricultural land and agricultural lease,
the lessor gives to the lessee the use and possession of the land for a price certain.
Although the purpose of the civil law lease and the agricultural lease may be agricultural
cultivation and production, the distinctive attribute that sets a civil law lease apart from
an agricultural lease is the personal cultivation by the lessee. An agricultural lessee
cultivates by himself and with the aid of those of his immediate farm household.
Conversely, even when the lessee is in possession of the leased agricultural land and
paying a consideration for it but is not personally cultivating the land, he or she is a civil
law lessee.
 STRONGHOLD INSURANCE COMPANY, INC. vs. SPOUSES RUNE and LEA
STROEM
G.R. No. 204689 January 21, 2015

FACTS: Spouses Stroem entered into an Owners-Contractor Agreement with Asis-Leif

& Company, Inc. for the construction of a two-storey house on the lot owned by Spouses
Stroem.

On November 15, 1999, pursuant to the agreement, Asis-Leif secured Performance

Bond No. LP/G(13)83056 in the amount of P4,500,000.00 from Stronghold. Stronghold
and Asis-Leif, through Ms. Ma. Cynthia Asis-Leif, bound themselves jointly and severally
to pay the Spouses Stroem the agreed amount in the event that the construction project
is not completed.

Asis-Leif failed to finish the project on time despite repeated demands of the Spouses
Stroem. Spouses Stroem subsequently rescinded the agreement.

ISSUE: Whether petitioner Stronghold Insurance Company, Inc. is liable under

Performance Bond No. LP/G(13)83056.

HELD: A performance bond is a kind of suretyship agreement. A suretyship agreement

is an agreement "whereby a party, called the surety, guarantees the performance by
another party, called the principal or obligor, of an obligation or undertaking in favor of
another party, called the obligee." In the same vein, a performance bond is "designed to
afford the project owner security that the . . . contractor, will faithfully comply with the
requirements of the contract . . . and make good [on the] damages sustained by the
project owner in case of the contractors failure to so perform."

It is settled that the suretys solidary obligation for the performance of the principal
debtors obligation is indirect and merely secondary. Nevertheless, the suretys liability
tothe "creditor or promisee of the principal is said to be direct, primary and absolute; in
other words, he is directly and equally bound with the principal."

Verily, "[i]n enforcing a surety contract, the complementary contracts-construed-

together doctrine finds application. According to this principle, an accessory contract
must beread in its entirety and together with the principal agreement."
 RUKS KONSULT AND CONSTRUCTION VS. ADWORLD SIGN AND
ADVERTISING CORP.
G.R. NO. 204866 JANUARY 21, 2015

FACTS: The instant case arose from a complaint for damages filed by Adworld against
Transworld and Comark International Corporation (Comark) before the RTC. In the
complaint, Adworld alleged that it is the owner of a 75 ft. x 60 ft. billboard structure
located at EDSA Tulay, Guadalupe, Barangka Mandaluyong, which was misaligned and
its foundation impaired when, on August 11, 2003, the adjacent billboard structure
owned by Transworld and used by Comark collapsed and crashed against it.
Resultantly, on August 19, 2003, Adworld sent Transworld and Comark a letter
demanding payment for the repairs of its billboard as well as loss of rental income. On
August 29, 2003, Transworld sent its reply, admitting the damage caused by its billboard
structure on Adworld's billboard, but nevertheless, refused and failed to pay the amounts
demanded by Adworld.

ISSUE: Whether or not Ruks who constructed the upper portion of the billboard
structure, jointly and severally liable sustained by Adworld.
HELD: As joint tortfeasors, therefore, they are solidarily liable to Adworld. Verily, "[j]oint
tortfeasors are those who command, instigate, promote, encourage, advise,
countenance, cooperate in, aid or abet the commission of a tort, or approve of it after it is
done, if done for their benefit. They are also referred to as those who act together in
committing wrong or whose acts, if independent of each other, unite in causing a single
injury. Under Article 2194 of the Civil Code, joint tortfeasors are solidarily liable for the
resulting damage. In other words, joint tortfeasors are each liable as principals, to the
same extent and in the same manner as if they had performed the wrongful act
themselves."
FIRST OPTIMA REALTY CORPORATION vs. SECURITRON SECURITY SERVICES, INC.
G.R. No. 199648 January 28, 2015

FACTS: Petitioner is a domestic corporation who is the registered owner covered by

Transfer Certificate of Title No. 125318. Respondent, looking to expand its business and
add to its existing offices, respondent offered Petitioner to buy its property. Initially,
Respondent was not able to negotiate with petitioners Executive Vice President, or any
of its board of directors. Sometime thereafter, Eleazar, representative of Respondent
personally went to petitioners office offering to pay for the subject property in cash,
which he already brought with him. However, Young declined to accept payment, saying
that she still needed to secure her sisters advice on the matter. She likewise informed
Eleazar that prior approval of petitioners Board of Directors was required for the
transaction. On February 4, 2005, respondent sent a Letter of even date to petitioner. It
was accompanied by Philippine National Bank Check No. 24677 (the subject check),
issued for P100,000.00 and made payable to petitioner. Despite the delicate nature of
the matter and large amount involved, respondent did not deliver the letter and check
directly to Young or her office; instead, they were coursed through an ordinary receiving
clerk/receptionist of the petitioner, who thus received the same and therefor issued and
signed Provisional Receipt No. 33430. The check was eventually deposited with and
credited to petitioners bank account.

Thereafter, respondent through counsel demanded in writing that petitioner proceed with
the sale of the property.

ISSUE: Whether or not the money given by Petitioner is an earnest money given by
Petitioner is an earnest money and the respondent duly accepted the same.

HELD: The Court grants the Petition. The trial and appellate courts erred materially in
deciding the case; they overlooked important facts that should change the complexion
and outcome of the case.

The stages of a contract of sale are: (1) negotiation, starting from the time the
prospective contracting parties indicate interest in the contract to the time the contract is
perfected; (2) perfection, which takes place upon the concurrence of the essential
elements of the sale; and (3) consummation, which commences when the parties
perform their respective undertakings under the contract of sale, culminating in the
extinguishment of the contract.

In the present case, the parties never got past the negotiation stage. Nothing shows that
the parties had agreed on any final arrangement containing the essential elements of a
contract of sale, namely, (1) consent or the meeting of the minds of the parties; (2)
object or subject matter of the contract; and (3) price or consideration of the sale

Since there is no perfected sale between the parties, respondent had no obligation to
make payment through the check; nor did it possess the right to deliver earnest money
to petitioner in order to bind the latter to a sale. As contemplated under Art. 1482 of the
Civil Code, "there must first be a perfected contract of sale before we can speak of
earnest money. "Where the parties merely exchanged offers and counter-offers, no
contract is perfected since they did not yet give their consent to such offers. Earnest
money applies to a perfected sale."