2. Rafael Reyes Trucking Corp. v.

PP
RTC found Dunca guilty and was sentenced to pay the family damages. The civil case against the
company was ordered dismissed. However, after a motion for reconsideration was filed by both
parties, the Court amended the decision and made Reyes Trucking subsidiarily liable.

CA dismissed the appeal of Reyes Trucking.

Issue:
Whether or not petitioner as owner may be held subsidiarily liable for the damages awarded to the
offended parties in the criminal action against the truck driver despite the filing of a separate civil
action by the offended parties against the employer of the truck driver; and

Held:
In negligence cases, the aggrieved party has the choice between (1) an action to enforce civil liability
arising from crime under Article 100 of the Revised Penal Code; and (2) a separate action for quasi
delict under Article 2176 of the Civil Code of the Philippines. Once the choice is made, the injured
party can not avail himself of any other remedy because he may not recover damages twice for the
same negligent act or omission of the accused. This is the rule against double recovery.

In the instant case, the offended parties elected to file a separate civil action for damages against
petitioner as employer of the accused, based on quasi delict, under Article 2176 of the Civil Code of
the Philippines. Petitioner, as employer of the accused who has been adjudged guilty in the criminal
case for reckless imprudence, cannot be held subsidiarily liable because of the filing of the separate
civil action based on quasi delict against it.
used.
5. Makati Stock Exchange v. Campos
Campos filed a petition with the Securities, Investigation and Clearing Department(SICD) of the
Securities and Exchange Commission (SEC) against the petitioners Makati Stock Exchange, Inc. (MKSE)
to nullify the Resolution which allegedly deprived him of his right to participate equally in the
allocation of Initial Public Offerings of corporations registered with MKSE and the delivery of the IPO
shares he was allegedly deprived of, for which he would pay IPO prices;

On March 11,1994, petitioners filed a motion to dismiss. One of the grounds invoked was failure to
state cause of action in the petition.

However, the SICD denied petitioner’s motion to dismiss.

ISSUE: Whether or not the petition failed to state a cause of action.

HELD:
The petition filed by respondent Miguel Campos should be dismissed for failure to state a cause of
action. A cause of action is the act or omission by which a party violates a right of another, containing
three essential elements: 1) the legal right of the plaintiff 2) the correlative obligation of the
defendant and 3) the act or omission of the defendant in violation of said legal right. If these elements
are absent,the complaint will be dismissed on the ground of failure to state a cause of action.

In the present case, the petition filed by respondent failed to lay down the source or basis of
respondent’s right and/or petitioner’s obligation. The mere assertion of a right and claim of an
obligation in an initiatory pleading, whether a Complaint or Petition, without identifying the basis or
source thereof, is merely a conclusion of fact and law. The Respondent merely quoted in his Petition
the MKSE Board Resolution, passed sometime in 1989,granting him the position of Chairman Emeritus
of MKSE for life. However, there is nothing in the said Petition from which the Court can deduce that
respondent, by virtue of his position as Chairman Emeritus of MKSE, was granted by law, contract, or
any other legal source, the right to subscribe to the IPOs of corporations listed in thestock market at
their offering price. An obligation imposed on a person and the corresponding right granted to
another, must be rooted in at least one of these five sources contemplated in Art. 1157 of the Civil
Code.
6. Diesel Construction Co. v. UPSI

9.Solar Harvest v. Davao Corrugated Carton

FACTS:
Solar Harvest, Inc., entered into an agreement with Davao Corrugated Carton Corp., for the purchase
of corrugated carton boxes designed for petitioner’s business of exporting fresh bananas. Petitioner
deposited their full payment but alleged that they did not receive any boxes from respondent,
hence, they wrote a demand letter for reimbursement.

Respondent, meanwhile, stated that the boxes had been completed and that petitioner failed to pick
them up from the former’s warehouse as agreed upon. Respondent also averred that petitioner even
placed an additional order of 24,000 boxes without any advanced payment from petitioner.
Respondent then demanded petitioner to remove the boxes from the factory and to pay the balance
for the additional boxes as well as for the storage fee.

ISSUE:
Whether petitioner’s claim for reimbursement is actually one for rescission of contract under Article
1191 of the Civil Code.

HELD:
The right to rescind a contract arises once the other party defaults in the performance of his
obligation. In determining when default occurs, Art. 1191 should be taken in conjunction with Art.
1169 of the same law, which provides hose 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.

Evident from the records was the lack of demand by petitioner upon respondent to fulfill its
obligation to manufacture and deliver the boxes. Without a previous demand for the fulfillment of the
obligation, petitioner would not have a cause of action for rescission against respondent as the latter
would not yet be considered in breach of its contractual obligation.
22. Citibank and Investors’ Finance Corp. v. CA
Citibank is a banking corporation authorized to do commercial banking activities in the Philippines.
One of it’s clients was Sabeniano who filed a complaint against petitioners averring the proceeds of
substantial deposits were supposedly deposited automatically and directly to respondent’s account
with the petitioner Citibank and that allegedly petitioner refused to despite repeated demands.

Petitioner contends it was exercising its right to set-off respondent’s outstanding loans with her
deposits and money after respondent’s default.
ISSUE: Whether petitioner may exercise its right to set-off respondent’s loans with her deposits and
money in Citibank

Ruling:

24. Pabugais v. Sahijiwani

Petitioner and respondent entered into an agreement to sell a lot with an option or reservation fee of P
600,000 which was paid by respondent Sahijwani leaving a balance to be paid within 60 days from the
execution of the contract. In their “Agreement and Undertaking”, both parties obligations are reciprocal
in nature wherein the simultaneous delivery of the object of the obligations are essential unless otherwise
stipulated that subject to specific date of delivery or performance. Petitioner was simultaneously asked
to deliver documents evidencing ownership and clearance of the property for sale with further agreement:
“that failure on the part of the respondent entitles petitioner to forfeit the P 600,000 option/reservation
fee while non-delivery by the latter of the necessary documents that form part as object of the obligation
obliges him to return to respondent the said option/reservation fee with interest at 18% per annum.

Pabugais failed to deliver necessary required documents in compliance to their agreement, thus returned
paid reservation fee plus interest in the form Manager’s Check. Counsel refused to accept payment the
check tendered by plaintiff through his messenger on his first attempt, then tried via DHL Worldwide
Services with Manager’s Check attached to and again, respondent’s side refused to accept. Thereafter,
petitioner wrote a letter to respondent saying that he is consigning the amount tendered with RTC of
Makati City. Petitioner filed a complaint of consignation wherein he deposited the said check.
Respondent counsel responded that he received the letter sent by petitioner but no check attached, refused
to accept since petitioner according to defendant’s counsel verbally promised 3% monthly interest and
25% attorney’s fee as penalty for default aside from 18% per annum for the reservation fee.

ISSUES:

1. Was there a valid consignation?

2. Can petitioner withdraw the amount consigned as a matter of right?

HELD:

1. There was a valid consignation. It was held that the manager’s check which was tendered but
refused by respondent, and thereafter consigned with the court, was enough to satisfy the
obligation and thus, there being a valid tender of payment in an amount sufficient to extinguish
the obligation, the consignation is valid
 2. There being a valid consignation, petitioner cannot withdraw the amount consigned. The
amount consigned with the trial court can no longer be withdrawn by petitioner because
respondent’s prayer in his answer that the amount consigned be awarded to him is equivalent to
an acceptance of the consignation, which has the effect of extinguishing petitioner’s obligation.
Moreover, petitioner failed to manifest his intention to comply with the “Agreement And
Undertaking” by delivering the necessary documents and the lot subject of the sale to
respondent in exchange for the amount deposited. Withdrawal of the money consigned would
enrich petitioner and unjustly prejudice respondent
25. Jespajo Realty v. CA
Jespajo Realty Corporation owned an apartment building and entered into separate contracts of lease
with Tan Te Gutierrez and Co Tong with the condition that the lease period shall continue for an
indefinite period provided the lessee is up-to-date in the payment of his monthly rentals. Since
the effectivity of the lease agreement the lessees paid their respective monthly rentals together with
the 20% yearly increased in the monthly rentals as stipulated in the contract. Thereafter, the lessor
corporation sent a written notice to the lessees informing them of the formers’ intention to increase
the monthly rentals on the occupied premises

The lessees opposed the increase claiming that it was in contravention of the terms of the contract of
lease as agreed upon. Due to the opposition and the failure of the lessees to pay the increased
monthly rentals, lessor demanded that the lessees vacate the premises and pay the missed rents

26. Allied Banking Co. v. CA

Allied Banking Corporation (ALLIED) leased a property owned by Spouses Tanqueco with a condition
stating that the term of the lease shall be fourteen (14) years and may be renewed for a like term at
the option of the lessee.”
A year before the expiration of the contract of lease, the heirs of Tanquecos notified petitioner ALLIED
that they were no longer interested in renewing the lease.
ALLIED, on the other hand, replied that it was exercising its option to renew their lease under the
same terms as was agreed with the original lease of contract with additional proposals, however,
petitioner rejected the proposal. When the lease contract expired in 1992, the heirs demanded that
ALLIED vacate the premises. An action for ejectment was commenced before the MeTC of Quezon
City.
ISSUE:
Whether a stipulation in a contract of lease stating “may be renewed for a like term at the option of
the lessee” is violative of the principle of mutuality of contract.
HELD:
The lease contract was mutually agreed upon hence valid and binding on both parties, and the
exercise by petitioner of its option to renew the contract was part of their agreement and in
pursuance thereof. This binding effect of a contract on both parties is based on the principle that the
obligations arising from the contracts have the force of law between the contracting parties, and
there must be mutuality between them based essentially on their equality under which it is
repugnant to have one party bound by the contract while leaving the other free therefrom. The
ultimate purpose is to render void a contract containing a condition which makes its fulfillment
dependent solely upon the uncontrolled will of one of the contracting parties.
27. MIAA v. Ding Velayo Sports Center

28. GF Equity Inc. v. Valenzona

Facts:
Valenzona was hired as Head Coach of the Alaska team in Philippine Basketball Association by the GF
Equity. Under the contract Valenzona will receive a monthly salary of P35,000, net of taxes, a service
vehicle with gasoline allowance. Despite the advise of his counsel of the one-sidedness of the
contract, he accepted the position. However, he was terminated on the ground that the management
believes he did not comply of all his duties as coach.

Valenzona filed a complaint against the GF Equity of breach of contract with damages. The RTC
dismissed the complaint stating that the contract was valid and that he is aware of the bad bargain. In
the CA, where he appealed, the appellate court reversed the RTC’s decision and thus ordered GF
Equity liable for damages.

Issue: Whether or not the contract violated the rules on mutuality of contract resulting from breach
of contract and therefore a recovery of damages can be awarded?

29. Heirs of Ayuste

Facts:
Rafael Ayuste was married to Christina. Thereafter, Rafael executed a deed of absolute sale without
Christina’s knowledge in favor or Malabonga with a forged signature of his spouse. After Rafael’s
death, Chirstina learned about the sale and filed a complaint for annulment of the sale and
cancellation of the title.

CA ruled that Christina’s petition was barred by laches because of her failure to file it during the
existence of their marriage.

ISSUE:
WON Heirs of Ayuste are entitled to the annulment of the contract of sale entered into by Rafael

HELD:
Art 173 of NCC states that “The wife may, during the marriage and within ten years from the
transaction questioned, ask the courts for the annulment of any contract of the husband entered into
without her consent. Should the wife fail to exercise this right, she or her heirs, after the dissolution
of the marriage may demand value of property fraudulently alienated by the husband. Although the
action was filed within ten years from the questioned transaction, it was not brought during the
existence of the marriage which was dissolved upon the death of Rafael Ayuste in 1989.
30. Heirs of Hernandez

31. Spouses Aggabao

Atanacio offered 2 lots located in Parañaque to the petitioners. On February 2, 1991, the petitioners
met up with Elena Parulan at the site of the property and showed them the following documents: (a.)
Owner’s original copy of the TCT of the 2 lots; (b.) tax declarations; (c.) a copy of the special power of
attorney dated January 7, 1991 executed by Dionisio authorizing Elena to sell the property. The
petitioners paid P200,000.00 as earnest money for which Elena executed a handwritten Receipt of
Earnest Money which stipulated that the peitioners would pay an additional payment of P130, 000.00
on February 4, 1991; P650,000.00 on or before February 15, 1991 and P700, 000.00 on March 31,
1991 once Elena turned over the property.
Upon checking with the Office of the Register of Deeds, petitioners that one of the lots had been
encumbered to Banco Filipino, but that the encumbrance had been cancelled due to the full payment
of the obligation. They noticed that the loan was effected through and SPA executed by Dionisio in
favor of Elena. The other lot on the other hand had an annotation of an existing mortgage in favor of
Los Baños Rural Bank, with the same SPA with a court order authorizing Elena to mortgage the lot to
secure the loan.
The petitioners and the broker next inquired about the mortgage and the court order at the Los
Baños Rural Bank. There, they met with Atty. Zarate, related that the bank had asked for the court
order because the lot involved was conjugal property.
Following their verification, the petitioners delivered P130,000.00 as additional down payment on
February 4, 1991; and P650,000.00 to the Los Baños Rural Bank on February 12, 1991, which then
released the owner’s duplicate copy of TCT to them.
On March 18, 1991, the petitioners delivered the final amount of P700,000.00 to Elena, who executed
a deed of absolute sale in their favor. However, Elena did not turn over the owner’s duplicate copy of
the TCT claiming that said copy was in the possession of a relative who was then in Hongkong. She
assured them that the owner’s duplicate copy of TCT would be turned over after a week.
On March 19, 1991, TCT was cancelled and a new one was issued in the name of the
petitioners. Elena did not turn over the duplicate owner’s copy of TCT as promised. In due time, the
petitioners learned that the duplicate owner’s copy of TCT had been all along in the custody of Atty.
Jeremy Z. Parulan, who appeared to hold an SPA executed by his brother Dionisio authorizing him to
sell both lots. At Atanacio’s instance, the petitioners met on March 25, 1991 with Atty. Parulan at the
Manila Peninsula. They were accompanied by one Atty. Olandesca. They recalled that Atty. Parulan
“smugly demanded P800,000.00” in exchange for the duplicate owner’s copy of TCT, because Atty.
Parulan represented the current value of the property to be P1.5 million. As a counter-offer, however,
they tendered P250,000.00, which Atty. Parulan declined, giving them only until April 5, 1991 to
decide. Hearing nothing more from the petitioners, Atty. Parulan decided to call them on April 5,
1991, but they informed him that they had already fully paid to Elena.
Thus, on April 15, 1991, Dionisio, through Atty. Parulan, commenced an action (Civil Case No. 91-1005
entitled Dionisio Z. Parulan, Jr., represented by Jeremy Z. Parulan, as attorney in fact, v. Ma. Elena
Parulan, Sps. Rex and Coney Aggabao), praying for the declaration of the nullity of the deed of
absolute sale executed by Ma. Elena, and the cancellation of the title issued to the petitioners by
virtue thereof. In turn, the petitioners filed on July 12, 1991 their own action for specific performance
with damages against the respondents. Both cases were consolidated for trial and judgment in the
RTC.
On July 26, 2000, the Regional Trial Court (RTC), Branch 136, in Makati City annulled the deed of
absolute sale executed in favor of the petitioners covering two parcels of registered land the
respondents owned for want of the written consent of respondent husband Dionisio Parulan, Jr. The
CA affirmed the RTC decision.
ISSUE:
Which between Article 173 of the Civil Code and Article 124 of the Family Code should apply to the
sale of the conjugal property executed without the consent of Dionisio?
RATIO:
The Family Code has expressly repealed several titles under the Civil Code, among them the entire
Title VI in which the provisions on the property relations between husband and wife. The sale was
made after the effectivity of the Family Code. The proper law to apply is, therefore, Article 124 of the
Family Code, for it is settled that any alienation or encumbrance of conjugal property made during the
effectivity of the Family Code is governed by Article 124 of the Family Code. Further, according to
Article 256 of the Family Code, the provisions of the Family Code may apply retroactively provided no
vested rights are impaired. In the case at bar, the petitioners did not show any vested right in the
property acquired prior to August 3, 1988 that exempted their situation from the retroactive
application of the Family Code.
Whether or not the sale of conjugal property made by Ma. Elena, by presenting a special power of att
orney to sell (SPA) purportedly executedby respondent husband in her favor was validly made to the v
endeesRULING: No, the Court ruled that the sale of conjugal property without the consent of the hus
band was not merely voidable but void; hence, it could notbe ratified. Spouses Aggabao also cannot u
se the defense that they are buyers in good faith because they did not exercise the necessary prudenc
e toinquire into the wife’s authority to sell.Spouses Aggabao also failed to substantiate their contentio
n that Dionisio, while holding the administration over the property, had delegatedto his brother, Atty.
Parulan, the administration of the property, considering that they did not present in court the SPA gr
anting to Atty. Parulan theauthority for the administration. Nonetheless, the Court would like to stres
s that the power of administration does not include acts of disposition orencumbrance, which are acts
of strict ownership. On the other hand, we agree with Dionisio that the void sale was a continuing off
er from the petitioners and Ma. Elena that Dionisio had theoption of accepting or rejecting before the
offer was withdrawn by either or both Ma. Elena and the petitioners. The last sentence of the second
paragraph of Article 124 of the Family Code makes this clear, stating that in the absence of the other s
pouse’s consent, the transaction should beconstrued as a continuing offer on the part of the consenti
ng spouse and the third person, and may be perfected as a binding contract upon theacceptance by t
he other spouse or upon authorization by the court before the offer is withdrawn by either or both of
ferors.Roberto and Venus Buado Vs. CAACTS:- Mr. and Mrs. Buado filed a civil case against Erlinda Nic
ol
32. Guiang
Gilda Corpuz and Judie Corpuz were legally married spouses. The couple, with plaintiff-wife Gilda
Corpuz as vendee, bought a lot located in South Cotabato which they later sold to spouses Guiang half
of the lot. The latter had since then occupied the one-half portion and built their house thereon. They
were, thus adjoining neighbors of the Corpuzes.

Gilda left for Manila to look for work abroad. After his wife’s departure for Manila, defendant Judie
seldom went home to the conjugal dwelling.

Sometime later, one of the child of the plaintiffs learned that her father intended to sell the remaining
one-half portion including their house, of their home lot to defendants Guiangs and wrote a letter to
her mother informing her. Gilda replied that she was objecting to the sale. However, the daughter
failed to inform her father of her mother’s objection but gave the letter to the female Guiang to
advise her father. However, over the objection of private respondent Gilda, her husband sold to the
petitioners-spouses Guiang the remaining half of property.

Upon her return to Cotabato, respondent gathered her children and went back to the subject
property. Petitioners filed a complaint for trespassing. Later, there was an amicable settlement
between the parties. Dissatisfied, respondent filed an Amended Complaint against her husband and
petitioners seeking a declaration of a certain deed of sale, which involved the conjugal property of
private respondent and her husband, null and void.

Issue:
Whether or not the contract without the consent of wife was void.

Held:
The said contract which was without the consent of the wife was void. It properly falls within the
ambit of Article 124 of the Family Code, which was correctly applied by the lower court. The sale of a
conjugal property requires the consent of both the husband and the wife. The absence of the consent
of one renders the sale null and void, while the vitiation thereof makes it merely voidable. Only in the
latter case can ratification cure the defect.

In this case, the respondent’s consent to the contract of sale of their conjugal property was totally
absent. Neither can the “amicable settlement” be considered a continuing offer that was accepted
and perfected by the parties. The settlement does not mention a continuing offer to sell the property
or an acceptance of such a continuing offer. Its tenor was to the effect that private respondent would
vacate the property. By no stretch of the imagination, can the Court interpret this document as the
acceptance mentioned in Article 124.
33. Homeowner Savings
Facts:
During the marriage the of spouses Dailo, they bought a house and lot which was registered in the
name of Marcelino Dailo to the exclusion of his wife. The husband, without the consent of his wife,
mortgaged to the petitioner. Marcelino made no payments for the said mortgage thus the petitioner
foreclosed the property. Marcelino eventually died, this was the only time that Miguela came to the
knowledge of the foreclosure.

Upon finding out, Miguela instituted with the court a Civil Case for Nullity of Real Estate Mortgage
and Certificate of Sale, Affidavit of Consolidation of Ownership, Deed of Sale, Reconveyance with
Prayer for Preliminary Injunction and Damages against petitioner which the RTC granted and affirmed
by the CA.

In its answer, the petitioner prayed for the dismissal of the complaint on the ground that the property
in question was the exclusive property of the late Marcelino Dailo, Jr.

Issues:
Whether or not the mortgage constituted by the late Marcelino Dailo, Jr. on the subject property as
co-owner thereof is valid as to his undivided share.
Whether or not the conjugal partnership is liable for the payment of the loan obtained by the late
Marcelino Dailo, Jr. the same having redounded to the benefit of the family

Held:
Applying Article 124 of the Family Code, this Court declared that the absence of the consent of one
renders the entire sale null and void, including the portion of the conjugal property pertaining to the
husband who contracted the sale.

To hold the conjugal partnership shall be liable, the obligation contracted by the late Marcelino Dailo,
Jr. must have redounded to the benefit of the conjugal partnership. There must be the requisite
showing then of some advantage which clearly accrued to the welfare of the spouses.The burden of
proof that the debt was contracted for the benefit of the conjugal partnership of gains lies with the
creditor-party litigant claiming as such. The petitioner failed to prove such claim.

34. Spouses Alinas

Petitioners (Onesiforo and wife) separated in 1982 leaving behind two lots. Petitioners entrusted both
properties to respondents with the agreement that any income from rentals should be remitted to
the SSS and to the Rural Bank of Oroquieta City (RBO) as the rentals would be for payment
of petitioners' loans.

Sometime later, the petitioners found out that both lots were titled in respondents' name after both
lots were foreclosed, and reacquired by respondents. Additionally, records show that Onesiforo
executed Absolute Deed of Sale one of the lots to the respondent. Records show a notarized
document whereby petitioner acknowledged that his brother used his own money to redeem one of
the lots mortgaged and foreclosed and thus his brother became the owner.

Petitioners filed a complaint for the recovery of possession and ownership of their
conjugal properties with damages against respondent spouses.

ISSUE: WON sale conducted by husband without consent of wife to whom he is separated with is void

HELD:
Art 124 of FC says that the absence of authority or consent of wife shall make the disposition or
encumberance void. Further, the respondent spouses are buyers in bad faith as (1) knew that it
was conjugal property (2)knew that the wife did not know of the selling since they were separated (3)
sale documents do not bear the wife‘s signature.