G.R. No.

L-21676

February 28, 1969

VICENTE ALDABA, ET AL., vs. CA, CESAR ALDABA, ET AL.

A.) The main controversy of this case is whether the deceased
Belen Aldaba executed a valid onerous donation during her
lifetime in favor of petitioners, Dr. Vicente Aldaba and his
daughter, Dr. Jane Aldaba.
B.) Belen Aldaba, a rich woman from Bulacan died in the year
1955. She was childless, and her presumptive heirs are her
husband, Estanislao Aldaba and her brother, Cesar Aldaba.
She owns several real properties, including the house and
lot occupied by the petitioners.
C.) Sometime after World War II, the petitioners house was
wrecked by a fire. Belen being a rich woman, offered the
petitioners to occupy one of her properties, that which is the
object of the controversy in this case. The petitioners
accepted the offer and as an act of gratitude, they took care
of Belens ailing health for several years.
D.) When Belen died, her presumptive heirs partitioned her
properties, including that occupied by the petitioners.
Further, Cesar Aldaba traded the disputed property to a
certain Emmanuel Aldaba, a grandson of Estanislao in his
first marriage.
E.) The lower courts declared Emmanuel as the absolute owner
of the disputed property. Thus, this petition went all the way
to the SC.
F.) The SC affirmed the decision of the lower courts. While it
was lucidly evinced through letters that Belen intended to
donate the property at question in favor of the petitioners, it
is dismal to note that the same have not transpired into a
reality. The mere expression of an intention is not a promise,
because a promise is an undertaking to carry the intention
into effect. Assuming there was an actual disposition of the
property, it cannot be considered that there was an
expressed agreement. Could it not be at least implied?
There could not be an implied contract for payment because
based on records; Jane did not expect to be paid for her
services. In the memorandum of counsel for the petitioners

in the trial court the SC found this statement: For all she
did to her aunt she expected not to be paid.
G.) When a person does not expect to be paid for his
services, there cannot be a contract implied in fact to
make compensation for said services. However, no
contract implied in fact to make compensation for personal
services performed for another arises unless the party
furnishing the services then expected or had reason to
expect the payment or compensation by the other party. To
give rise to an implied contract to pay for services,
they must have been rendered by one party in
expectation that the other party would pay for them,
and have been accepted by the other party with
knowledge of that expectation.
H.) In the same manner when the person rendering the services
has renounced his fees, the services are not demandable
obligations. Even if it be assumed for the sake of argument
that the services of petitioners constituted a demandable
debt, We still have to ask whether in the instant case this
was the consideration for which the deceased made the
(alleged) disposition of the property to the petitioners. As
we have adverted to, we have not come across in the record
even a claim that there was an express agreement between
petitioners and Belen Aldaba that the latter would give the
property in question in consideration of the services of
petitioners. All that petitioners could claim regarding this
matter was that "it was impliedly understood" between
them. 5 How said agreement was implied and from what
facts it was implied, petitioners did not make clear. The
question of whether or not what is relied upon as a
consideration had been knowingly accepted by the parties
as a consideration, is a question of fact, 6 and the Court of
Appeals has not found in the instant case that the lots in
question were given to petitioners in consideration of the
services rendered by them to Belen Aldaba.

PEOPLE versus Pedro Abungan

G.R. No. 136843, September 28, 2000

The death of the appellant pending appeal and prior to the finality of
conviction extinguished his criminal and civil liabilities arising from the
delict or crime. Hence, the criminal case against him, not the appeal,
should be dismissed.
A.) Pedro Abungan was found guilty of the crime of murder by the
lower courts. He was sentenced to jail and was ordered to
indemnify the heirs of the offended party. However, pending appeal
of the case and prior to the finality of conviction, Abungan died in
the New Bilibid Prison Hospital.
B.) The main issue at hand is the effect of death Abungan towards this
case. The SC applied article 89, number 1 of the RPC which states
that "Art. 89. How criminal liability is totally extinguished. Criminal liability is totally extinguished: 1. By the death of the
convict, as to the personal penalties; and as to pecuniary penalties,
liability therefor is extinguished only when the death of the
offender occurs before final judgment; Hence, the SC held that
Abungans criminal case must be dismissed.
C.) Thus, the SC ratiocinated that the order of the lower court in
sentencing him to jail and to indemnify the heirs of the offended
party became ineffectual. However, the SC noted that the death of
the accused only extinguishes the decedents civil liability based
on delict. This does not in any way affect the civil liability arising
from the other sources of obligation (Article 1157, CC). an action
for recovery therefor may be pursued but only by way of filing a
separate civil action and subject to Section 1, Rule 111 of the 1985
Rules on Criminal Procedure as amended. This separate civil action
may be enforced either against the executor/administrator or the
estate of the accused, depending on the source of obligation upon
which it is based.

G.R. No. 76965 March 11, 1994

LUIS TAN, et. al, vs. HON. NITAFAN, Presiding Judge, and
ROSITA B. LIM, in her behalf and as Guardian Ad Litem of
her minor children, JENNIFER, LYSANDER and BEVERLIE, all
surnamed LIMKETKAI, respondents.
Bitter rivalry in the movie theatre industry led to the slaying of one
of the more prominent citizens of Cagayan de Oro, Florentino Lim, a
scion of the wealthy Limketkai family of Cagayan de Oro City, was
shot dead in his office on 25 August 1973. Those charged for the
sensational manslaughter were either convinced or acquitted by a
military court. But the verdict did not put to rest the wounded
feelings spawned by the killing; it merely terminated the criminal
prosecution of those already haled to court.

The problem now concerns the civil aspect of the case. Petitioners
claim that the complaint filed against them in the trial court has
already prescribed, hence, should be, as it should have been,
dismissed by respondent Judge.
The SC ruled that the action for damages against the convicted
defendants was sanctioned by Art. 33 of the Civil Code which
allowed an independent civil action in case of physical injuries,
which include death. The complaint stated a cause of action against
those acquitted because the Military Commission did not explain
the grounds for their acquittal. After all, it was not under any
obligation to do so. Hence, it would be premature to dismiss the
civil action against them.
*Concurring opinions of justices stated that prescriptive periods of
civil cases is not coterminous with the prescriptive periods of
criminal cases as in the case where civil liability based on the crime
committed becomes a source of obligation. These are entirely
separate cases which operate on their own prescriptive periods.
Further, Civil liability arising from quasi-delicts is another source of
obligation apart from civil liabilities arising solely from the crime or
delict. Therefore, this becomes a right of an offended party to file
another civil action for damages different from the former.
EQUATORIAL REALTY DEVT INC. v. MAYFAIR THEATRE
[G.R. No. 106063. November 21, 1996]
FACTS:
Petitioner Carmelo and Bauermann Inc. leased its parcel of land
with 2-storey building to respondent Mayfair Theater Inc.
They entered a contract which provides that if the LESSOR should
desire to sell the leased premises, the LESSEE shall be given 30days exclusive option to purchase the same.
Carmelo informed Mayfair that it will sell the property to Equatorial.
Mayfair made known its interest to buy the property but only to the
extent of the leased premises.
Notwithstanding Mayfairs intention, Carmelo sold the property to
Equatorial.
ISSUE:

WON the sale of the property to Equatorial is valid.

HELD:
The sale of the property should be rescinded because Mayfair has
the right of first refusal. Both Equatorial and Carmelo are in bad
faith because they knew of the stipulation in the contract regarding
the right of first refusal.
The stipulation is a not an option contract but a right of first refusal
and as such the requirement of a separate consideration for the
option, has no applicability in the instant case. The consideration is
built in the reciprocal obligation of the parties.
In reciprocal contract, the obligation or promise of each party is the
consideration for that of the other. (Promise to lease in return of the
right to first refusal)
With regard to the impossibility of performance, only Carmelo can
be blamed for not including the entire property in the right of first
refusal. Court held that Mayfair may not have the option to buy the
property. Not only the leased area but the entire property.
*for an extensive discussion of doctrines in civil law, particularly
that of property, sales, and contracts, refer to the full text of this
jurisprudence. This digest only encapsulates the entire essence of
the case.

NORKIS DISTRIBUTORS INC. v. CA & ALBERTO NEPALES

G.R. No. 91029
February 7, 1991
FACTS:
Alberto Nepales bought from the Norkis Distributors, Inc. brand new
Yamaha motorcycle.The Branch Manager AvelinoLabajo agreed to
accept the P7,500.00 price payable by means of a Letter of
Guaranty from the Development Bank of the Philippines (DBP),
Kabankalan. Hence, credit was extended to Nepales, and as
security for the loan, he executed a chattel mortgage on the
motorcycle in favor of DBP. Labajo issued the Norkis Sales Invoice
perfecting the contract of sale, and Nepales signed the same to
conform to the terms of the sale, while the unit remained in Norkis'
possession. On November 6, 1979, it was registered under Alberto
Nepales name in the Land Transportation Commission.

The motorcycle was delivered to a certain Julian Nepales on January

22, 1980, who was allegedly the agent of Alberto Nepales but the
latter denies it.
On February 3, 1980, the motorcycle met an accident while being
driven by a certain ZacariasPayba. The unit was a total wreck, was
returned, and stored inside Norkis' warehouse.
On March 20, 1980, DBP released the proceeds of respondent's
motorcycle loan to Norkis in the total sum of P7,500. As the price of
the motorcycle later increased to P7,828, Nepales paid the
difference of P328 and demanded the delivery of the motorcycle.
Norkis failed to deliver the unit, and Nepales filed an action for
specific performance with damages. Norkis answered that the
motorcycle had already been delivered to private respondent
before the accident, hence, he should bear the risk of loss or
damage as owner of the unit.
ISSUE:
Who should bear the risk of loss?
COURT RULING:
The Supreme Court ruled that Article 1496 of the Civil Code which
provides that "in the absence of an express assumption of
risk by the buyer, the things sold remain at seller's risk
until the ownership thereof is transferred to the buyer," is
applicable in the case at bar for there was neither an actual nor
constructive delivery of the thing sold.
In this case, the purpose of the execution of the sales invoice and
the registration of the vehicle in the name of Alberto Nepales with
the Land Registration Commission was not to transfer the
ownership and dominion over the motorcycle to him, but only to
comply with the requirements of the DBP for processing private
respondent's motorcycle loan. On March 20, 1980, before private
respondent's loan was released and before he even paid Norkis, the
motorcycle had already figured in an accident while driven by one
ZacariasPayba. Payba was not shown by Norkis to be a
representative or relative of private respondent. The circumstances
in the case itself more than amply rebut the disputable
presumption of delivery upon which Norkis anchors its defense to
Nepales' action.
*doctrine of res perit domino. the thing is lost to the owner. This
phrase is used to express that when a thing is lost or destroyed, it
is lost to the person who was the owner of it at the time.

*disclaimer, this digest is used in the subject sales. For a detailed

discussion for oblicon, review lost of the thing due, delivery of a
determinate thing v. a generic thing, etc.

*note: the case discussed extensively the nature of debt and

gambling as a source of obligation. It also stated its history as to its
nature. Please refer to the full text for further info. It has a separate
and dissenting opinion.

LEUNG BEN v. P.J. OBRIEN

G.R. No. L-13602 | April 6, 1918
FACTS

OCCENA VS. JABSON, CA AND TROPICAL HOMES, INC

73 SCRA 637, G.R. No. L-44349, OCTOBER 29, 1976

An action was instituted in the Court of First Instance of the city of

Manila by P. J. O'Brien to recover the sum of P15,000 alleged to
have been lost by Leung Ben to P.J. OBrien in a series of gambling,
banking and percentage games conducted during the two or three
months prior to the institution of the suit. In Leung Bens verified
complaint, OBrien asked for an attachment against the property of
Leung Ben on the ground that the latter was about to depart from
the Philippine Islands with intent to defraud his creditors. This
attachment was issued, and acting under that authority, the sheriff
attached the sum of P15,000 which had been deposited by the
OBrien with the International Banking Corporation. Leung Bien filed
a motion to quash the attachment, which was dismissed by the
court. Hence this application for a writ of certiorari, the purpose of
which was to quash an attachment issued from the Court of First
Instance of the City of Manila.
ISSUE:
Was the statutory obligation to restore money won at gaming an
obligation arising from "contract, express or implied?"
RULING
Yes. Upon general principles, recognized both in the civil and
common law, money lost in gaming and voluntarily paid by the
loser to the winner cannot, in the absence of statute, be recovered
in a civil action. But Act No. 1757 of the Philippine Commission,
which defines and penalizes several forms of gambling, contains
numerous provisions recognizing the right to recover money lost in
gambling or in playing certain games. The original complaint filed
in the Court of First Instance was not clear as to the particular
section of Act No. 1757 under which the action was brought, but
was alleged that the money was lost at gambling, banking, and
percentage game in which the defendant was a banker. It must
therefore be assumed that the action was based upon the right of
recovery given in section 7 of said Act, which declared that an
action may be brought against the banker by any person losing
money at a banking or percentage game

FACTS: Private respondent Tropical Homes, Inc had a subdivision

contract with petitioners who are the owners of the land subject of
subdivision development by private respondent. The contract
stipulated that the petitioners fixed and sole share and
participation is the land which is equivalent to forty percent of all
cash receipts from the sale of the subdivision lots. When the
development costs increased to such level not anticipated during
the signing of the contract and which threatened the financial
viability of the project as assessed by the private respondent,
respondent filed at the lower court a complaint for the modification
of the terms and conditions of the contract by fixing the proper
shares that should pertain to the parties therein out of the gross
proceeds from the sales of the subdivision lots. Petitioners moved
for the dismissal of the complaint for lack of cause of action. The
lower court denied the motion for dismissal which was upheld by
the CA based on the civil code provision that when the service has
become so difficult as to be manifestly beyond the contemplation
of the parties, the obligor may also be released therefrom, in whole
or in part. Insisting that the worldwide increase in prices cited by
private respondent does not constitute a sufficient cause of action
for the modification of the terms and conditions of the contract,
petitioners filed the instant petition.
ISSUE: Whether or not private respondent may demand
modification of the terms of the contract on the ground that the
prestation has manifestly come beyond the contemplation of the
parties.
RULING: If the prayer of the private respondent is to be released
from its contractual obligations on account of the fact that the
prestation has become beyond the contemplation of the parties,
then private respondent can rely on said provision of the civil code.
But the prayer of the private respondent was for the modification of
their valid contract. The above-cited civil code provision does not
grant the court the power to remake, modify, or revise the contract
or to fix the division of the shares between the parties as
contractually stipulated with the force of law between the parties.
Therefore, private respondents complaint for modification of its

contract with petitioner must be dismissed. The decision of

respondent court is reversed.
*it is interesting to note that the court denies its power to modify
the contract as an aftermath of the insisted issue. Seemingly, Art.
1267 allows an obligor to be released from the obligation in whole
or in part

the part of the Leao Spouses, namely, the payment of the

P200,000.00 to them and the payment of themortgage
amortizations to the SSS and Apex. RespondentsLeao Spouses,
however, contend that they were only obliged toassume the
amortization payments of the Barredo Spouses with the SSS and
Apex, which they did upon signing the agreement.The contract
does not stipulate as a condition the full paymentof the SSS and
Apex mortgages.

SPOUSES BARREDO V. SPOUSES LEAO

[G.R. No. 156627. June 4, 2004]

ISSUE: CAN THE BARREDO SPOUSES RESCIND THE CONTRACT, ON

THE GROUND OF NON-FULFILLMENT OFTHE PRESTATIONS?

FACTS:
Barredo Spouses bought a house and lot with the proceedsof a
P50k loan from the SSS which was payable in 25 years andan P88k
loan from the Apex Mortgage and Loans Corporationwhich was
payable in 20 years. To secure the twin loans, theyexecuted a first
mortgage over the house and lot in favor of SSSand a second one
in favor of Apex.

HELD: NO A careful reading of the pertinent provisions of

theagreement readily shows that the principal object of the
contract wasthe sale of the Barredo house and lot, for which the
Leao Spousesgave a down payment of P100,000.00 as provided
for in par. 1 of thecontract, and thereafter ten (10) equal monthly
installmentsamounting to another P100,000.00, as stipulated in
par. 2 of thesame agreement.

Barredo Spouses later sold their house and lot torespondents

Spouses Leao by way of a Conditional Deed of Sale with
Assumption of Mortgage. The Leao Spouses would pay the
Barredo Spouses P200k, P100k of which would be payable on July
15, 1987, while the balance of P100k would be paid in 10 equal
monthly installments after the signing of thecontract. The Leao
Spouses would also assume the first andsecond mortgages and pay
the monthly amortizations to SSSand Apex beginning July 1987
until both obligations are fully paid.

The assumption of the mortgages by the LeaoSpouses over the

mortgaged property and their payment of amortizations are just
collateral matters which are naturalconsequences of the sale of the
said mortgaged property.To include the full payment of the
obligations with the SSS andApex as a condition would be to
unnecessarily stretch and put a newmeaning to the provisions of
the agreement. For, as a general rule,when the terms of an
agreement have been reduced to writing, suchwritten agreement is
deemed to contain all the terms agreed uponand there can be,
between the parties and their successors-in-interest,no evidence of
such terms other than the contents of the writtenagreement. And,
it is a familiar doctrine in obligations and contractsthat the parties
are bound by the stipulations, clauses, terms andconditions they
have agreed to, which is the law between them, theonly limitation
being that these stipulations, clauses, terms andconditions are not
contrary to law, morals, public order or public policy. Not being
repugnant to any legal proscription, the agreemententered into by
the parties must be respected and each is bound tofulfill what has
been expressly stipulated therein.

Two years later, Barredo Spouses initiated a complaint before

theRTC seeking the rescission of the contract on the ground thatthe
Leao Spouses despite repeated demands failed to pay
themortgage amortizations to the SSS and Apex, causing
theBarredo Spouses great and irreparable damage. The
LeaoSpouses, however, answered that they were up-to-date with
their amortization payments to Apex but were not able to pay the
SSSamortizations because their payments were refused upon
theinstructions of the Barredo Spouses. Meanwhile, allegedly in
order to save their good name,credit standing and reputation, the
Barredo Spouses took it uponthemselves to settle the mortgage
loans and paid the SSS. Theyalso settled the mortgage loan with
Apex. They also paid thereal estate property taxes for the 1987 up
to 1990.
Petitioners argue that the terms of the agreement called for the
strict compliance of 2 equally essential and materialobligations on

But even if we consider the payment of the mortgage

amortizationsto the SSS and Apex as a condition on which the sale
is based on,still rescission would not be available since noncompliance withsuch condition would just be a minor or casual
breach thereof as itdoes not defeat the very object of the parties in
entering into thecontract. A cursory reading of the agreement

easily reveals that themain consideration of the sale is the payment

of P200K to thevendors within the period agreed upon. The
assumption of mortgage by the Leao Spouses is a natural
consequence of their buying amortgaged property. In fact, the
Barredo Spouses do not stand to benefit from the payment of the
amortizations by the Leao Spousesdirectly to the SSS and Apex
simply because the Barredo Spouseshave already parted with their
property, for which they were alreadyfully compensated in the
amount of P200K.

*note: the case is relatively short. Refer to the full text for facts.

If the Barredo Spouses were really protective of their reputation

andcredit standing, they should have sought the consent, or at
leastnotified the SSS and Apex of the assumption by the Leao
Spousesof their indebtedness. Besides, in ordering rescission, the
trial courtshould have likewise ordered the Barredo Spouses to
return theP200K they received as purchase price plus interests. Art.
1385 of the Civil Code provides that [r]escission creates the
obligation toreturn the things which were the object of the contract,
together withtheir fruits, and the price with its interest. The vendor
is thereforeobliged to return the purchase price paid to him by the
buyer if thelatter rescinds the sale. Thus, where a contract is
rescinded, it is theduty of the court to require both parties to
surrender that which theyhave respectively received and place
each other as far as practicablein his original situation.
*note: this case also cited several cases where rescission of a
contract will not lie. This is consistent with the principle that
rescission is a subsidiary remedy. Thus, a person may avail this
only if exhaustion of other remedies were done first.

*note: this digest is best for the subject Credit Transactions.

However, it also touches Oblicon when it discussed delay.

SOLIDBANK CORP v. SPOUSES PETER AND SUSAN TAN

RULING:
1. Yes. The popular notion that credit card purchases are approved
within seconds, there really is no strict, legally determinative
point of demarcation on how long must it take for a credit card
company to approve or disapprove a customers purchase, much
less one specifically contracted upon by the parties. One hour
appears to be patently unreasonable length of time to approve or
disapprove a credit card purchase.

G.R. No. 167346, April 2, 2007

*Doctrine (as cited in the case): xxx the degree of diligence

required of banks is more than that of a good father of a family in
keeping with their responsibility to exercise the necessary care and
prudence in handling their clients money. xxx banking institutions
xxx have the duty to exercise the highest degree of diligence when
transacting with the public. By the nature of their business, they
are required to observe the highest standards of integrity and
performance, and utmost assiduousness as well.

PANTALEON VS AMERICAN EXPRESS

G.R. No. 174269, May 8 2009

FACTS:
After the Amsterdam incident that happened involving the delay of
American Express Card to approve his credit card purchases worth
US$13,826.00 at the Coster store, Pantaleon commenced a
complaint for moral and exemplary damages before the RTC
against American Express. He said that he and his family
experienced inconvenience and humiliation due to the delays in
credit authorization. RTC rendered a decision in favor of Pantaleon.
CA reversed the award of damages in favor of Pantaleon, holding
that AmEx had not breached its obligations to Pantaleon, as the
purchase at Coster deviated from Pantaleon's established charge
purchase pattern.
ISSUE:
1. Did AmEx committed a breach of its obligations to Pantaleon?
2. Is AmEx liable for damages?

The culpable failure of AmEx herein is not the failure to timely

approve petitioners purchase, but the more elemental failure to
timely act on the same, whether favorably or unfavorably. Even
assuming that AmExs credit authorizers did not have sufficient
basis on hand to make a judgment, we see no reason why it could
not have promptly informed Pantaleon the reason for the delay, and
duly advised him that resolving the same could take some time.

2. Yes. The reason why Pantaleon is entitled to damages is not

simply because AmEx incurred delay, but because the delay, for
which culpability lies under Article 1170, led to the particular
injuries under Article 2217 of the Civil Code for which moral
damages are remunerative. The somewhat unusual attending
circumstances to the purchase at Coster that there was a
deadline for the completion of that purchase by petitioner before
any delay would redound to the injury of his several traveling
companions gave rise to the moral shock, mental anguish, serious
anxiety, wounded feelings and social humiliation sustained by
Pantaleon, as concluded by the RTC.
SELEGNA MANAGEMENT AND DEVELOPMENT CORPORATION;
and Spouses EDGARDO and ZENAIDA ANGELES, vs. UNITED
COCONUT PLANTERS BANK
G.R. No. 165662, May 3, 2006
Mortgage Default Mora Solvendi Extrajudicial Foreclosure
Right of Creditor
On September 19, 1995, spouses Edgardo and Zenaida Angeles
and Selegna Mgmt. acquired a P70 Million loan from UCPB. As
security for the loan, Angeles executed a real estate mortgage of
their properties in Muntinlupa, Antipolo, Las Pias, Quezon and
some condo units in Makati. They also executed a promissory note
in favor of UCPB. Later, Angeles increased the loan amount to P103
Million with a 21% interest rate per annum which was to mature on
March 26, 1999.
UCPB and Angeles agreed in their Credit Agreement that failure to
pay any availment of the accommodation or interest or any sum
due constitutes a default in payment which would render the loan
amount immediately due in full (this is the Acceleration Clause).
Eventually, in 1999, Angeles went into default and their loan
ballooned to P132 M. UCPB sent them demand letters. In response,
Angeles paid about P10 M in interest at the same time they asked
for a 60 day period to restructure the loan.
UCPB accepted the P10 M payment but was unsatisfied hence they
filed for extrajudicial foreclosure. Angeles filed for a TRO to forestall
the foreclosure. It was not granted because they failed to show any
irreparable damage that may be caused them by reason of the
foreclosure. Upon Motion for Reconsideration, Angeles petition was
granted but was later lifted. The foreclosure went on on some of
the properties in Antipolo. Angeles claimed they were not given by
UCPB any clear accounting on these.

The case was re-raffled anew in another RTC which later reinstated
the injunction. UCPB filed an appeal with the CA. The CA affirmed
the RTC. UCPB filed for reconsideration which was eventually
granted.
In the main, Angeles averred that they have a clear right to
injunction based on the fact that UCPB never explained how the
loan went up to P132 M; that UCPB refused to give them a detailed
accounting of the partial foreclosure and that they gave a P10 M
payment which prevented the determination of the maturity of the
obligation.
ISSUE: Do the Spouses Angeles have a right to forestall the
foreclosure?
HELD: No. Angeles is clearly in default per provisions laid down in
their Credit Agreement with UCPB which is the binding law between
the parties. In fact, the parties stipulated in their credit
agreements, mortgage contracts and promissory notes that
respondent was authorized to foreclose on the mortgages, in case
of a default by petitioners. That this authority was granted is not
disputed.
There are three requisites necessary for a finding of default. First,
the obligation is demandable and liquidated; second, the debtor
delays performance; third, the creditor judicially or extrajudicially
requires the debtors performance. All three were present in this
case.
The 1st requisite is present notwithstanding a detailed accounting of
the partially foreclosed properties. A debt is liquidated when the
amount is known or is determinable by inspection of the terms and
conditions of the relevant promissory notes and related
documentation. Failure to furnish a debtor a detailed statement of
account does not ipso facto result in an unliquidated obligation.
It is in fact clear from the agreement of the parties that when the
payment is accelerated due to an event of default, the penalty
charge shall be based on the total principal amount outstanding, to
be computed from the date of acceleration until the obligation is
paid in full. Their Credit Agreement even provides for the
application of payments. It appears from the agreements that the
amount of total obligation is known or, at the very least,
determinable.
Further, in the Real Estate Mortgage agreement between the
parties (in the Event of Default clause), Angeles granted UCPB
the right to extrajudicially foreclose the properties mortgaged
which secured the loan/obligation.

JUAN PEREZ, ET. AL. V. CA

G.R. No. 107737 October 1, 1999

Here involves a violation of an obligation not to do. A contract of

lease was executed by the usufructuaries (The Perez) and the
petitioner Luis Keh of a parcel of land called the papaya fishpond.
The lessor was not suppose to sublease the property to another
person but He did so along with a partner, petitioner Charlie Lee.
They subleased the property to a businessman who only finished 5th
grade (Luis Crisostomo, private respondent)
The SC held that: Article 1168 of the Civil Code provides that when an
obligation consists in not doing and the obligor does what has been
forbidden him, it shall also be undone at his expense. The lease contract
prohibited petitioner Luis Keh, as lessee, from subleasing the fishpond. In
entering into the agreement for pakiao-buwis with private respondent, not
to mention the apparent artifice that was his written agreement with
petitioner Lee on January 9, 1978, petitioner Keh did exactly what was
prohibited of him under the contract to sublease the fishpond to a third
party. That the agreement for pakiao-buwis was actually a sublease is
borne out by the fact that private respondent paid petitioners Luis Keh and
Juan Perez, through petitioner Tansinsin the amount of annual rental
agreed upon in the lease contract between the usufructuaries and
petitioner Keh. Petitioner Keh led private respondent to unwittingly incur
expenses to improve the operation of the fishpond. By operation of law,
therefore, petitioner Keh shall be liable to private respondent for the value
of the improvements he had made in the fishpond or for P486,562.65 with
interest of six percent (6%) per annum from the rendition of the decision of
the trial court on September 6, 1989.

International Corporate Bank vs. Gueco

351 SCRA 516
Facts:
Respondent Gueco spouses obtained a loan from petitioner
International Corporate Bank (now Union Bank of Philippines) to
purchase a car Nissan Sentra 1989 model.
In consideration, spouses executed promissory note which were
payable in monthly installment & chattel mortgage over the car.
The spouses defaulted payment. Dr. Gueco had a meeting & the
unpaid installment of P184k was reduced to P150k. However, the
car was detained by the bank.

When Dr. Gueco delivered the mangers check of P150k, the car
was not released because of his refusal to sign the Joint Motion to
Dismiss. The bank insisted that the JMD is a standard operating
procedure to effect a compromise & to preclude future filing of
claims or suits for damages.
Gueco spouses filed an action against the bank for fraud, failing to
inform them regarding JMD during the meeting & for not releasing
the car if they do not sign the said motion.
Issue: Was the bank guilty of fraud?
Held:
No. Fraud has been defined as the deliberate intention to cause
damage or prejudice. It is the voluntary execution of a wrongful act,
or a willful omission, knowing and intending the effects which
naturally and necessarily arise from such act or omission. The fraud
referred to in Article 1170 of the Civil Code is the deliberate and
intentional evasion of the normal fulfillment of obligation.
We fail to see how the act of the petitioner bank in requiring the
respondent to sign the joint motion to dismiss could constitute as
fraud. The JMD cannot in any way have prejudiced Dr. Gueco. The
motion to dismiss was in fact also for the benefit of Dr. Gueco, as
the case filed by petitioner against it before the lower court would
be dismissed with prejudice. The whole point of the parties entering
into the compromise agreement was in order that Dr. Gueco would
pay his outstanding account and in return petitioner would return
the car and drop the case for money and replevin before the
Metropolitan Trial Court. The joint motion to dismiss was but a
natural consequence of the compromise agreement and simply
stated that Dr. Gueco had fully settled his obligation, hence, the
dismissal of the case. Petitioners act of requiring Dr. Gueco to sign
the joint motion to dismiss cannot be said to be a deliberate
attempt on the part of petitioner to renege on the compromise
agreement of the parties.
The law presumes good faith. Dr. Gueco failed to present an iota of
evidence to overcome this presumption. In fact, the act of
petitioner bank in lowering the debt of Dr. Gueco from P184,000.00
to P150,000.00 is indicative of its good faith and sincere desire to
settle the case. If respondent did suffer any damage, as a result of
the withholding of his car by petitioner, he has only himself to
blame. Necessarily, the claim for exemplary damages must fail. In

no way, may the conduct of petitioner be characterized as wanton,

fraudulent, reckless, oppressive or malevolent.
PRECILLANO NECESITO, ETC. vs. NATIVIDAD PARAS, ET AL.
G.R. No. L-10605, June 30, 1958

FACTS:
A mother and her son boarded a passenger auto-truck of the
Philippine Rabbit Bus Lines. While entering a wooden bridge, its
front wheels swerved to the right, the driver lost control and the
truck fell into a breast-deep creek. The mother drowned and the
son sustained injuries. These cases involve actions ex contractu
against the owners of PRBL filed by the son and the heirs of the
mother. Lower Court dismissed the actions, holding that the
accident was a fortuitous event.

While the carrier is not an insurer of the safety of the passengers,

the manufacturer of the defective appliance is considered in law
the agent of the carrier, and the good repute of the manufacturer
will not relieve the carrier from liability.

a passenger is entitled to recover damages from a carrier for an

injury resulting from a defect in an appliance purchased from a
manufacturer, whenever it appears that the defect could have been
discovered by the carrier if it had exercised the degree of care
which under the circumstances was incumbent upon it, with regard
to inspection and application of the necessary tests. In this
connection, the manufacturer of the defective appliance is
considered in law the agent of the carrier

ISSUE:
Whether or not the carrier is liable for the manufacturing defect of
the steering knuckle, and whether the evidence discloses that in
regard thereto the carrier exercised the diligence required by law
(Art. 1755, new Civil Code)
HELD:
Yes.

The rationale of the carriers liability is the fact that the passengers
has no privity with the manufacturer of the defective equipment;
hence, he has no remedy against him, while the carrier has. We
find that the defect could be detected. The periodical, usual
inspection of the steering knuckle did not measure up to the
utmost diligence of a very cautious person as far as human care
and foresight can provide and therefore the knuckles failure
cannot be considered a fortuitous event that exempts the carrier
from responsibility.