HSBCL-SRP vs SPOUSES BIENVENIDO AND EDITHA BROQUEZA G.R. NO. 178610 NOV.

17, 2010

FACTS:

 Petitioners Gerong and Editha Broqueza are employees of Hongkong and Shanghai Banking Corporation (HSBC). They are also members
of HSBC, Ltd. Staff Retirement Plan.
 The Plan is a retirement plan established by HSBC through its BOT for the benefit of the employees.
 On Oct. 1, 1990, petitioner Broqueza obtained a car loan in the amount of P175,000.00.
 On Dec. 12, 1991, she again applied and was granted an appliance loan in the amount of P24,000.00.
 Petitioner Gerong, on the other hand applied and was granted an emergency loan in the amount of P35,780.00 on June 2, 1993.
 The loans were paid through automatic salary deductions.
 A labor dispute arose between HSBC and its employees.
 Majority of HSBCs employees were terminated among them the petitioners.
 The employees filed an illegal dismissal case before the NLRC against HSBC, which is now pending before the CA.
 Because of the dismissal, petitioners were not able to pay the monthly amortizations of their respective loans. They were considered
delinquent. Demands to pay were made.
 On July 31, 1996, HSBCL-SRP filed a civil case against the spouses.
 On Sept. 19, 1996, HSBCL-SRP filed another civil case. Both suits were civil actions for recovery and collection of sums of money.
 The MeTC ruled that the nature of HSBCs demands for payment is civil and has no connection to the ongoing labor dispute.
 The loans secured by their future retirement benefits to which they are no longer entitled are reduced to unsecured and pure civil
obligations. They are immediately demandable.
 The RTC reaffirmed the decision but the CA reversed it.
 On Aug. 6, 2007, HSBCL-SRP filed a manifestation withdrawing the petition against Gerong because she already settled her
obligations.

ISSUE:

W.O.N. the loans of the Sps. Broqueza is a pure obligation and demandable at once even if they were dismissed by HSBC.

HELD:

 The RTC is correct in ruling that since the Promissory Notes do not contain a period, HSBCL-SRP has the right to demand immediate
payment.
 Art. 1179 of the NCC applies.
 The spouses obligation to pay HSBCL-SRP is a pure obligation because they do not contain a period.
 Once Editha Broqueza defaulted in her monthly payment, HSBCL-SRP made a demand to enforce a pure obligation.
 Despite the spouses Broquezas protestations, the payroll deduction is merely a convenient mode of payment and not the sole source of
payment for the loans.
 HSBCL-SRP never agreed that the loans will be paid only though salary deductions.
 The same never agreed that if Editha Broqueza ceases to be an employee of HSBC, her obligation to pay the loans will be suspended.
 HSBCL-SRP can immediately demand payment of the loans anytime because the obligation to pay has no period.
 Moreover, the spouses Broqueza have already incurred in default in paying the monthly instalments.
 Finally, the enforcement of a loan agreement involves debtor-creditor relation founded on contract and does not in any way concern the
employee relations. As such it should be enforced through a separate civil action in the regular courts and not before the Labor Arbiter.

ay vs. Vda. de Palanca

No. L-29900

June 28, 1974

When Payable on Demand

FACTS: Petitioner George Pay is a creditor of the Late Justo

Palanca. Petitioner’s claim is based on a promissory note dated

January 30, 1952—where Justo Palanca and Rosa Gonzales

Vda. de Carlos Palanca promised to pay petitioner the amount go

26,900 PHP with interest at the rate of 12% per annum upon

receipt by either of the undersigned of cash payment from the

Estate of the late Don Carlos Palanca or upon demand. Petitioner

is now seeking his claim to Segundina Chua de Palanca—the

surviving spouse of the late Justo Palanca who he appointed as

administratrix of a certain piece of property. The surviving spouse

refused to be appointed as the administratrix; that the property

sought to be administered no longer belonged to the debtor and

that the right of petitioner has already prescribed.

ISSUE: Whether a creditor is barred by prescription to collect on a

promissory note executed more than fifteen (15) years earlier this

petition.

HELD: No, he is barred by prescription. Since the note was dated

on January 30, 1952 it is clear that more than ten (10) years has

already transpired from that time until this date. Thus, the action

of creditor has definitely prescribed.Even if the petitioner is

assailing the validity of the refusal of the surviving spouse, the

question of prescription need only to be answered. The obligation

being due and demandable, it would appear that the filing of the

suit after fifteen (15) years was much too late considering that

under the Civil Code the prescriptive period for a written contract

is that of ten (10) years.

KEY TAKE-AWAY OR DOCTRINE TO REMEMBER

Mixed - when the fulfillment of the condition depends partly upon the will of a party to the obligation and partly upon chance and/or will of a third person. (Th

FACTS

• [August 1918] Smith Bell and Mr. Vicente Sotelo Matti entered into contracts whereby the former obligated itself to sell, and the latter to purchase f

York and delivered within 3 months; two expellers for P25,000 coming from San Francisco to be delivered on September 1918 or as soon as possibl

• The delivery of the stipulation was worded as: “Approximate delivery within ninety days. – This is not guaranteed.” 


• The tanks arrived at Manila on the 27th of April, 1919; the expellers on the 26th of October, 1918; and the motors on 
 the 27th of February, 1919. 


• Smith Bell notified Matti of the arrival of the goods, but Mr. Matti refused to receive them and pay the price. 


• Smith Bell filed a suit against Matti based on four separate causes of action. 


• In his answer, Matti and the intervenor, Manila Oil Refining, denied the allegations and claimed that the goods never 
 arrived at Manila. Likewise,

manufacturing coconut oil, the intervenor 
 suffered damages for the non-delivery of tanks and the expellers. 


• The lower court absolved defendants as to the complaint of tanks and electric motors, but not for the expellers. 


• Both parties appealed to the SC. 


ARTICLES/LAWS INVOLVED

Art. 1193. Obligations for whose fulfillment a day

that day comes. Obligations with a resolutory perio
day certain.
1. WON Smith Bell fulfilled its obligation of delivering the goods in due time – YES.
A day certain is understood to be that which must n

If the uncertainty consists in whether the day will c

be regulated by the rules of the preceding Section.

HELD
 1. The SC held that to solve the question, it is necessary to determine the period fixed for the delivery of the goods.

As regards the tanks, the contracts A and B (pages 61 and 62 of the record) are similar, and in both of them we find this clause:
 "To be delivered within 3 or

carries with it absolutely no obligation on our part — Government regulations, railroad embargoes, lack of vessel space, the exigencies of the requirements of
may act to entirely vitiate the indication of shipment as stated. In other words, the order is accepted on the basis of shipment at Mill's convenience, time of ship
accomplish."

"The following articles, herein below more particularly described, to be shipped at San Francisco within the month of September /18, or as soon as possible. —

And in the contract relative to the motors (Exhibit D, page 64, rec.) the following appears:
 "Approximate delivery within ninety days. — This is not guarante

Priority Certificate, subject to the United States Government requirements and also subject to confirmation of manufactures."

In all these contracts, there is a final clause as follows:
 "The sellers are not responsible for delays caused by fires, riots on land or on the sea, strikes or other c

control of the sellers or their representatives."

Under the said stipulations, it cannot be said that there was a definite date fixed for the delivery of the goods. As to the tanks, the agreement was that the delive
period was subject to the contingencies referred to in a subsequent clause. With regard to the expellers, the contract says "within the month of September, 1918
with reference to the motors, the contract contains this expression, "Approximate delivery within ninety days," but right after this, it is noted that "this is not gu

Mixed Smith Bell vs Sotelo Matti I.E.B. Zapanta G.R. No. 16570, March 9, 1922, Romualdez, J.

And from the records, the contract was entered during the time of World War II when there existed rigid restrictions on the export from the United
States of articles like the machinery in question, and maritime, as well as railroad, transportation was difficult, which fact was known to the parties.

Considering these contracts in the light of the civil law, we cannot but conclude that the term which the parties attempted to fix is so uncertain that
one cannot tell just whether, as a matter of fact, those articles could be brought to Manila or not. If that is the case, as we think it is, the obligation
must be regarded as conditional.

It is sufficiently proven in the record that the plaintiff has made all the efforts it could possibly by expected to make under the circumstances, to bring
the goods in question to Manila, as soon as possible. And, as a matter of fact, through such efforts, it succeeded in importing them and placing them
at the disposal of the defendant, Mr. Sotelo, in April, 1919.

Therefore, the plaintiff has not been guilty of any delay in the fulfillment of its obligation, and, consequently, it could not have incurred any of the
liabilities mentioned by the intervenor in its counterclaim or set-off.

CHAVEZ vs GONZALES

NATURE: direct appeal by prevailing party in a suit for breach of oral contract and recovery of damages but was
unsatisfied with the rendered decision of the CFI

Facts

- July 1963- plaintiff Chavez asked defendant Gonzales to fix his typewriter. Gonzales was unable to finish the job
so Chavez asked for it repeatedly but Gonzales did not comply.
- Oct 1963- Gonzales asked Chavez for Php6 for materials to be used in fixing the typewriter. A few days later,
Chavez went to Gonzales’ house to claim the typewriter because he was tired of waiting. After claiming it and
returning home, he found out that his typewriter was missing some internal parts, the interior cover and some
 screws. So, he wrote a letter demanding for the return of the Php6 and the missing parts, which the defendant
did so willingly.
- Aug 1964- Chavez had Freixas Business fix his typewriter costing him Php89.85.
- Aug 1965- Chavez sued Gonzales for the costs he incurred in having his typewriter fixed and demanded
compensation.
- The CFI ruled Gonzales should not be held chargeable for the full amount because the invoice return shows that
the missing parts only cost Php31.10. so he should only pay the Php31.10
- Chavez states Gonzales should be liable not only for the thirty-one pesos but for the full costs he incurred
including the labor and the materials in fixing it. He invokes it under ART 1167 “if a person obliged to do
something fails to do it, the same shall be executed at his cost”
- Gonzales says he is not liable at all because in their contract, there was no fixed period. So, he says that under
Art 1197, Chavez should have first filed for the court to fix the period.

Issue

Can Gonzales be held chargeable for the full costs Chavez incurred in having his typewriter fixed?

Held

YES. Though Gonzales returned the typewriter to Chavez, he did so without compliance to their contract to fix it. this in
itself is considered a breach of contract on his obligation to fix it.

As to Gonzales’ contention that Chavez should have filed for a fixed period first because there was no period mentioned
in their contract, it is untenable. This is because he already practically admitted non-performance on his part of the
contract when he returned the typewriter, which was even in a worse state when he did. The fixing of period here as to
the contract would become a mere formality and would have no more purpose than to delay the case proceedings.

The court thus holds him liable under 1167 for failing to perform his obligation on their contract and as well as under
1170 for failing to return the typewriter in the same condition as it was when brought to him.

SINGSON ENCARNACION VS. BALDOMAR

77 PHIL 470

FACTS:
Vicente Singson Encarnacion leased his house to
Jacinta Baldomar and her son, Lefrando Fernando upon a
month-to-month basis. After Manila was liberated in the
last war, Singson Encarnacio notified Baldomar and her
son Fernando to vacate the house because he needed it for
his office as a result of the destruction of the building
where he had his office before. Despite the demand, the
Baldomar and Fernando continued their occupancy.

The defense of Baldomar and Fernando was that the

contract with Singson Encarnacion authorized them to
continue occupancy indefinitely while they should
faithfully fulfill their obligation with respect to payment of
rentals. Singson Encarnacion contended that the lease had
always and since the beginning been upon a month-tomonth
basis.

ISSUE:
Was it tenable for Singson Encarnacion to discontinue
the lease of Baldomar and her son?

RULING:
The continuance and fulfillment of the contract of lease
cannot be made to depend solely and exclusively upon the
free and uncontrolled choice of the lessees between
continuing paying the rentals or not, completely depriving
the owner of all say in the matter. The defense of Baldomar
and Fernando would leave to the sole and exclusive will of
one of the contracting parties the validity and fulfillment of
the contract of lease, within the meaning of Article 1256 of
the Civil Code. For if this were allowed, so long as the
lessee elected to continue the lease by continuing the
payment of the rentals the owner would never be able to
discontinue the lease; conversely, although the owner
should desire the lease to continue, the lessee could
effectively thwart his purpose if he should prefer to
terminate the contract by the simple expedient of stopping
payment of the rentals.

ELEIZEGUI VS MANILA LAWN TENNIS CLUB

G.R. 967

FACTS:

This suit concerns the lease of a piece of land for a fixed consideration and to endure at the will of the
lessee. By the contract of lease the lessee is expressly authorized to make improvements upon the land, by
erecting buildings of both permanent and temporary character, by making fills, laying pipes, and making such
other improvements as might be considered desirable for the comfort and amusement of the members.

With respect to the term of the lease the present question has arisen. In its decision three theories have been
presented: One which makes the duration depend upon the will of the lessor, who, upon one month's notice
given to the lessee, may terminate the lease so stipulated; another which, on the contrary, makes it dependent
upon the will of the lessee, as stipulated; and the third, in accordance with which the right is reversed to the
courts to fix the duration of the term.
The first theory is that which has prevailed in the judgment below, as appears from the language in which the
basis of the decision is expressed: "The court is of the opinion that the contract of lease was terminated by the
notice given by the plaintiff on August 28 of last year . . . ." And such is the theory maintained by the plaintiffs,
which expressly rests upon article 1581 of the Civil Code, the law which was in force at the time the contract
was entered into (January 25, 1890). The judge, in giving to this notice the effect of terminating the lease,
undoubtedly considers that it is governed by the article relied upon by the plaintiffs, which is of the following
tenor: "When the term has not been fixed for the lease, it is understood to be for years when an annual rental
has been fixed, for months when the rent is monthly. . . ." The second clause of the contract provides as
follows: "The rent of the said land is fixed at 25 pesos per month."

ISSUE:

Was there a conventional term, a duration, agreed upon in the contract in question?

RULING:

Yes. The obligations which, with the force of law, the lessors assumed by the contract entered into, so
far as pertaining to the issues, are the following: "First. . . . They lease the above-described land to Mr.
Williamson, who takes it on lease . . . for all the time the members of the said club may desire to use it . . .
Third. . . . the owners of the land undertake to maintain the club as tenant as long as the latter shall see fit,
without altering in the slightest degree the conditions of this contract, even though the estate be sold."

In view of these clauses, it can not be said that there is no stipulation with respect to the duration of the
lease, or that, notwithstanding these clauses, article 1581, in connection with article 1569, can be applied. If
this were so, it would be necessary to hold that the lessors spoke in vain that their words are to be disregarded
a claim which can not be advanced by the plaintiffs nor upheld by any court without citing the law which
detracts all legal force from such words or despoils them of their literal sense.