Hongkong and Shanghai Banking Corp.
v Broqueza Article 1179 of the Civil Code applies, to wit: every obligation whose
Petitioner Broqueza both obtained a car and an appliance loan from
respondent HSBCL-SRP while petitioner Gerong obtained an emergency
loan from the same. Sometime in 1993, a labor dispute arose between HSBC
and its employees, and the petitioners, as employees, were terminated.
Because of their dismissal, petitioners were not able to pay the monthly
amortizations of their respective loans. Thus, respondent HSBCL-SRP
considered the accounts of petitioners delinquent. Demands to pay the
respective obligations were made upon petitioners, but they failed to pay.
HSBCL-SRP filed a civil case to both of them for recovery and collection of
sums of money. The court then ruled in favour of the HSBCL-SRP.
Issue: Whether or not the loans were pure obligations and can be
demandable anytime.
Held:
PROMISSORY NOTE
P_____ Makati, M.M. ____ 19__
FOR VALUE RECEIVED, I/WE _____ jointly and severally promise to pay to
THE HSBC RETIREMENT PLAN (hereinafter called the "PLAN") at its office
in the Municipality of Makati, Metro Manila, on or before until fully paid the
sum of PESOS ___ (P___) Philippine Currency without discount, with
interest from date hereof at the rate of Six per cent (6%) per annum, payable
monthly.
I/WE agree that the PLAN may, upon written notice, increase the interest rate
stipulated in this note at any time depending on prevailing conditions.
I/WE hereby expressly consent to any extensions or renewals hereof for a
portion or whole of the principal without notice to the other(s), and in such a
case our liability shall remain joint and several.1avvphi1
In case collection is made by or through an attorney, I/WE jointly and
severally agree to pay ten percent (10%) of the amount due on this note (but
in no case less than P200.00) as and for attorneys fees in addition to
expenses and costs of suit.
In case of judicial execution, I/WE hereby jointly and severally waive our
rights under the provisions of Rule 39, Section 12 of the Rules of Court.
performance does not depend upon a future or uncertain event, or upon a
past event unknown to the parties, is demandable at once. The spouses
Broquezas obligation to pay HSBCL-SRP is a pure obligation. The fact that
HSBCL-SRP was content with the prior monthly check-off from Editha
Broquezas salary is of no moment. Once Editha Broqueza defaulted in her
monthly payment, HSBCL-SRP made a demand to enforce a pure obligation.
Even though she paid for the loan amortization, which HSBC collected
through payroll check-off, 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 through salary deductions.
Reyes v. Tuparan
Mila A. Reyes (petitioner) filed a complaint for Rescission of Contract with
Damages against Victoria T. Tuparan (respondent) before the RTC.In her
Complaint, petitioner alleged, among others, that she was the registered
owner of a 1,274 square meter residential and commercial lot located in
Karuhatan, Valenzuela City, and covered by TCT No. V-4130.
Petitioner mortgaged the subject real properties to the Farmers Savings Bank
and Loan Bank, Inc. (FSL Bank) to secure a loan. Petitioner then decided to
sell her real properties so she could liquidate her bank loan and finance her
businesses. As a gesture of friendship, respondent verbally offered to
conditionally buy petitioner's real properties.
The parties and FSL Bank executed the corresponding Deed of Conditional
Sale of Real Properties with Assumption of Mortgage. Due to their close
personal friendship and business relationship, both parties chose not to
reduce into writing the other terms of their agreement mentioned in
paragraph 11 of the complaint.
Respondent, however, defaulted in the payment of her obligations on their
due dates. Instead of paying the amounts due in lump sum on their
respective maturity dates, respondent paid petitioner in small amounts from
time to time.
Respondent countered, among others, that the tripartite agreement
erroneously designated by the petitioner as a Deed of Conditional Sale of
Real Property with Assumption of Mortgage was actually a pure and absolute
contract of sale with a term period. It could not be considered a conditional
sale because the acquisition of contractual rights and the performance of the
obligation therein did not depend upon a future and uncertain event.
Respondent further averred that she successfully rescued the properties from
a definite foreclosure by paying the assumed mortgage plus interest and
other finance charges.
The RTC handed down its decision finding that respondent failed to pay in
full the total purchase price of the subject real properties. It stated that the
checks and receipts presented by respondent refer to her payments of the
mortgage obligation with FSL Bank. The RTC also considered the Deed of
Conditional Sale of Real Property with Assumption of Mortgage executed by
and among the two parties and FSL Bank a contract to sell, and not a
contract of sale.
The CA rendered its decision affirming with modification the RTC
Decision.The CA agreed with the RTC that the contract entered into by the
parties is a contract to sell but ruled that the remedy of rescission could not
apply because the respondent's failure to pay the petitioner the balance of
the purchase was not a breach of contract, but merely an event that
prevented the seller (petitioner) from conveying title to the purchaser
(respondent).
Issue:
the title and ownership of the subject properties remains with the petitioner
until the respondent fully pays the balance of the purchase price and the
assumed mortgage obligation. Thereafter, FSL Bank shall then issue the
corresponding deed of cancellation of mortgage and the petitioner shall
execute the corresponding deed of absolute sale in favor of the respondent.
Accordingly, the petitioners obligation to sell the subject properties becomes
demandable only upon the happening of the positive suspensive condition,
which is the respondents full payment of the purchase price. Without
respondents full payment, there can be no breach of contract to speak of
because petitioner has no obligation yet to turn over the title. Respondents
failure to pay in full the purchase price is not the breach of contract
contemplated under Article 1191 of the New Civil Code but rather just an
event that prevents the petitioner from being bound to convey title to the
respondent.
Thus, the Court fully agrees with the CA when it resolved: Considering,
however, that the Deed of Conditional Sale was not cancelled by Vendor
Reyes (petitioner) and that out of the total purchase price of the subject
property in the amount of 4,200,000.00, the remaining unpaid balance of
Tuparan (respondent) is only 805,000.00, a substantial amount of the
purchase price has already been paid. It is only right and just to allow
Tuparan to pay the said unpaid balance of the purchase price to Reyes.
Granting that a rescission can be permitted under Article 1191, the Court still
cannot allow it for the reason that, considering the circumstances, there was
only a slight or casual breach in the fulfillment of the obligation.
Heirs of Atienza v Espidol
Petitioners which are heirs of Paulino own a 21,959 square meters of
registered agricultural land at Valle Cruz, Cabanatuan City. They acquired the
land under an emancipation patent [3] through the governments land reform
program. On August 12, 2002 the Atienzas and respondent Domingo P.
Espidol entered into a contract called Kasunduan sa Pagbibili ng Lupa na
may Paunang-Bayad (contract to sell land with a down payment) covering
the property. They agreed on a price of P130.00 per square meter or a total
of P2,854,670.00, payable in three installments:P100,000.00 upon the
signing of the contract; P1,750,000.00 in December 2002, and the
remaining P974,670.00 in June 2003. Respondent Espidol paid the
Atienzas P100,000.00 upon the execution of the contract and paid
P30,000.00 in commission to the brokers. When the Atienzas demanded
payment of the second installment of P1,750,000.00 in December 2002,
however, respondent Espidol could not pay it. He offered to pay the
Atienzas P500.000.00 in the meantime,[6] which they did not accept. Claiming
that Espidol breached his obligation, on February 21, 2003 the Atienzas filed
a complaint[7] for the annulment of their agreement. Respondent Espidol
argued that, since their contract was one of sale on installment, his failure to
pay the installment due in December 2002 did not amount to a breach. It was
merely an event that justified the Atienzas not to convey the title to the
property to him. The non-payment of an installment is not a legal ground for
annulling a perfected contract of sale. Their remedy was to bring an action for
specific performance. Moreover, Espidol contended that the action was did not arise. Since the suspensive condition did not arise, the parties stood
premature since the last payment was not due until June 2003. as if the conditional obligation had never existed. [21]

Held: Regarding the right to cancel the contract for non-payment of an Secondly, it was not a pure suspensive condition in the sense that the
installment, there is need to initially determine if what the parties had was a Atienzas made no undertaking while the installments were not yet due. Mr.
contract of sale or a contract to sell. In a contract of sale, the title to the Justice Edgardo L. Paras gave a fitting example of suspensive condition: Ill
property passes to the buyer upon the delivery of the thing sold. In a contract buy your land for P1,000.00 if you pass the last bar examinations. This he
to sell, on the other hand, the ownership is, by agreement, retained by the said was suspensive for the bar examinations results will be
seller and is not to pass to the vendee until full payment of the purchase awaited. Meantime the buyer is placed under no immediate obligation to the
price. In the contract of sale, the buyers non-payment of the price is a person who took the examinations.[22]
negative resolutory condition; in the contract to sell, the buyers full payment
of the price is a positive suspensive condition to the coming into effect of the
agreement. In the first case, the seller has lost and cannot recover the
Here, however, although the Atienzas had no obligation as yet to turn over
ownership of the property unless he takes action to set aside the contract of
title pending the occurrence of the suspensive condition, it was implicit that
sale. In the second case, the title simply remains in the seller if the buyer
they were under immediate obligation not to sell the land to another in the
does not comply with the condition precedent of making payment at the time
meantime. When Espidol failed to pay within the period provided in their
specified in the contract.[19] Here, it is quite evident that the contract involved
agreement, the Atienzas were relieved of any obligation to hold the property
was one of a contract to sell since the Atienzas, as sellers, were to retain title
in reserve for him.
of ownership to the land until respondent Espidol, the buyer, has paid the
agreed price. Indeed, there seems no question that the parties understood
this to be the case.[20]
The ruling of the RTC and the CA that, despite the default in payment, the
Atienzas remained bound to this day to sell the property to Espidol once he is
able to raise the money and pay is quite unjustified. The total price
Admittedly, Espidol was unable to pay the second installment
was P2,854,670.00. The Atienzas decided to sell the land because petitioner
of P1,750,000.00 that fell due in December 2002.That payment, said both the
Paulino Atienza urgently needed money for the treatment of his daughter who
RTC and the CA, was a positive suspensive condition failure of which was
was suffering from leukemia.[23] Espidol paid a measly P100,000.00 in down
not regarded a breach in the sense that there can be no rescission of an
payment or about 3.5% of the total price, just about the minimum size of a
obligation (to turn over title) that did not yet exist since the suspensive
brokers commission. Espidol failed to pay the bulk of the
condition had not taken place. And this is correct so far. Unfortunately, the
price, P1,750,000.00, when it fell due four months later in December
RTC and the CA concluded that should Espidol eventually pay the price of
2002. Thus, it was not such a small default as to justify the RTC and the CAs
the land, though not on time, the Atienzas were bound to comply with their
decision to continue to tie up the Atienzas to the contract to sell upon the
obligation to sell the same to him.
excuse that Espidol tried his honest best to pay.

But this is error. In the first place, since Espidol failed to pay the installment
on a day certain fixed in their agreement, the Atienzas can afterwards validly
cancel and ignore the contract to sell because their obligation to sell under it
Wellex Group v U-Land Airlines
Wellex is a corporation established under Philippine law and it maintains
airline operations in the Philippines. U-Land Airlines Co. Ltd. (U-Land) is a
corporation duly organized and existing under the laws of Taiwan, registered
to do business . . . in the Philippines.10 It is engaged in the business of air
transportation in Taiwan and in other Asian countries. On May 16, 1998,
Wellex and U-Land entered into a Memorandum of Agreement 12 (First
Memorandum of Agreement) to expand their respective airline operations in
Asia. In the First Memorandum of Agreement, Wellex and U-Land agreed to
develop a long-term business relationship through the creation of joint
interest in airline operations and property development projects in the
Philippines. The First Memorandum of Agreement stated that within 40 days
from its execution date, Wellex and U-Land would execute a share purchase
agreement covering U-Lands acquisition of the shares of stock of both AIR
PHILIPPINES INTERNATIONAL CORPORATION (APIC shares) and
PHILIPPINE ESTATES CORPORATION (PEC shares).17 In this share
purchase agreement, U-Land would purchase from Wellex its APIC shares
and PEC shares. U-Land was entitled to a proportionate representation in
the Board of Directors of APIC and PEC in accordance with Philippine
law.22 Operational control of APIC and APC would be exercised jointly by
Wellex and U-Land on the basis of mutual agreement and
consultations.23 The parties intended that U-Land would gain primary control
and responsibility for the international operations of APC. 24 Wellex
manifested that APC is a subsidiary of APIC in the second preambular clause
of the First Memorandum of Agreement. Wellex and U-Land also agreed to
enter into a joint development agreement simultaneous with the execution of
the share purchase agreement. The joint development agreement shall cover
housing and other real estate development projects.
The 40-day period lapsed but Wellex and U-land were not able to enter into
any share purchase agreement although drafts were changed between the
two. However, despite the absence of a share purchase agreement, 0 2and
remitted to Wellex a total of US$7,499,945.00. Wellex acknowledged
the receipt of these remittances in a confirmation letter addressed to U-Land
and allegedly delivered stock certificates and TCTs of subject properties.
Despite these transactions Wellex and U-land still failed to enter into the
share purchase agreement and the joint development agreement. "Thus, U-
land filed a complaint praying for rescission of the First Memorandum of
Agreement and damages against Wellex and for
the issuance of a Writ of Preliminary Attachment.
Issue: Whether or not Wellexs obligation to deliver the totality of the shares
of stock would become demandable only upon remittance of the full purchase
price of US$17.5 million.
Held: In these cases, this court held that there can be no rescission for an
obligation that is non-existent, considering that the suspensive condition that
will give rise to the obligation has not yet happened. This is based on an
allegation that the contract involved is a contract to sell. In a contract to sell,
the failure of the buyer to pay renders the contract without effect. A
suspensive condition is one whose non-fulfillment prevents the existence of
the obligation.192 Payment of the purchase price, therefore, constitutes a
suspensive condition in a contract to sell. Thus, this court held that non-
remittance of the full price allowed the seller to withhold the transfer of the
thing to be sold.
In this case, the First Memorandum of Agreement is not a contract to sell.
Entering into the share purchase agreement or the joint development
agreement remained a stipulation that the parties themselves agreed to
pursue in the First Memorandum of Agreement.
Based on the First Memorandum of Agreement, the execution of the share
purchase agreement was necessary to put into effect respondent U-Lands
purchase of the shares of stock. This is the stipulation indicated in this
memorandum of agreement. There was no suspensive condition of full
payment of the purchase price needed to execute either the share purchase
agreement or the joint development agreement. Upon the execution of the
share purchase, the obligation of petitioner Wellex to transfer the shares of
stock and of respondent U-Land to pay the price of these shares would have
arisen.
Enforcement of Section 9 of the First Memorandum of Agreement has the
same effect as rescission or resolution under Article 1191 of the Civil Code.
The parties are obligated to return to each other all that they may have
received as a result of the breach by petitioner Wellex of the reciprocal
obligation. Therefore, the Court of Appeals did not err in affirming the
rescission granted by the trial court.
Hermosa v. Longara
LUZ HERMOSA APPEALS AGAINST CA DECISION TO APROVE
LONGARA CLAIMS ON ESTATE OF FERNANDO HERMOSA, SR. the
following:
P2,341.41 representing credit advances
P12,924.12 made to his son Francisco Hermosa
P3,772 made to his grandson, Fernando Hermosa, Jr.
The Court of Appeals found that payment should be made by Fernando
Hermosa, Sr. as soon as he receive funds derived from the sale of his
property in Spain."
LONGARA testified that credit advances were to be "payable as soon as
Fernando Hermosa, Sr.'s property in Spain was sold and he receive money
derived from the sale."
CA held payment did not become due until the administratrix received
P20,000 from the buyer of the property. It was paid October 1947. Claim was
filed October 1948.
Issue: Whether or not the obligation contracted by the intestate was subject
to a condition exclusively dependent upon the will of the debtor (a condicion
potestativa) and therefore null and void, in accordance with article 1115 of the
old Civil Code.
Held: A careful consideration of the condition upon which payment of the
sums advanced was made to depend, "as soon as he (intestate) receive
funds derived from the sale of his property in Spain," discloses the fact that
the condition in question does not depend exclusively upon the will of the
debtor, but also upon other circumstances beyond his power or control. If the
condition were "if he decides to sell his house." or "if he likes to pay the sums
advanced," or any other condition of similar import implying that upon him
(the debtor) alone payment would depend, the condition would
be protestativa, dependent exclusively upon his will or discretion. In the form
that the condition was found by the Court of Appeals however the condition
implies that the intestate had already decided to sell his house, or at least
that he had made his creditors believe that he had done so, and that all that
we needed to make his obligation (to pay his indebtedness) demandable is
that the sale be consummated and the price thereof remitted to the islands.
Note that if the intestate would prevent or would have prevented the
consummation of the sale voluntarily, the condition would be or would have
been deemed or considered complied with (article 1119, old Civil Code).The
will to sell on the part of the intestate was, therefore, present in fact, or
presumed legally to exist, although the price and other conditions thereof
were still within his discretion and final approval. But in addition of the sale to
him (the intestate-vendor), there were still other conditions that had no
concur to effect the sale, mainly that of the presence of a buyer, ready, able
and willing to purchase the property under the conditions demanded by the
intestate. Without such a buyer the sale could not be carried out or the
proceeds thereof sent to the islands. It is evident, therefore sent to the
islands. It is evident, therefore, that the condition of the obligation was not a
purely protestative one, depending exclusively upon the will of the intestate,
but a mixed one, depending partly upon the will of intestate and partly upon
chance, i.e., the presence of a buyer of the property for the price and under
the conditions desired by the intestate. The obligation is clearly governed by
the second sentence of article 1115 of the old Civil Code (8 Manresa, 126).
The condition is, besides, a suspensive condition, upon the happening of
which the obligation to pay is made dependent. And upon the happening of
the condition, the debt became immediately due and demandable. (Article
1114, old Civil Code; 8 Manresa, 119).
One other point needs to be considered, and this is the fact that the sale was
not effected in the lifetime of the debtor (the intestate), but after his death and
by his administrator, the very wife of the claimant. On this last circumstance
we must bear in mind that the Court of Appeals found no evidence to show
that the claim was the product of a collusion or connivance between the
administratrix and the claimant. That there was really a promise made by the
intestate to pay for the credit advances maybe implied from the fact that the
receipts thereof had been preserved. Had the advances been made without
intention of demanding their payment later, said receipts would not have
been preserved. Regularity of the advances and the close relationship
between the intestate and the claimant also support this conclusion.
As to the fact that the suspensive condition took place after the death of the
debtor, and that advances were made more than ten years before the sale,
we supported in our conclusion that the same is immaterial by Sanchez
Roman, who says, among other things, as to conditional obligations:
1a The contractual obligation affected by suspensive condition. It is not
demandable until the condition is fulfilled.
2a The fulfillment of the suspensive condition retroacts the effects of the legal
act originating from the obligation to which it affects, at the time of the
celebration of this
3a The said retroaction, not only takes place when the fulfillment of the
condition is verified in the life of the contracting parties.
As the obligation retroacts to the date when the contract was entered into, all
amounts advanced from the time of the agreement became due, upon the
happening of the suspensive condition. As the obligation to pay became due
and demandable only when the house was sold and the proceeds received in
the islands, the action to recover the same only accrued, within the meaning
of the statute of limitations, on date the money became available here hence
the action to recover the advances has not yet prescribed.
GSIS v Court of appeals
Abraham Cate complained of a mass on his left cheek which gradually
increased in size. The histopath report revealed that he was suffering from
Osteoblastic Osteosarcoma. He underwent an operation to remove the mass.
After several months, another biopsyrevealed the recurrence of the ailment.
He underwent debulking of the recurrent tumor.
Abraham filed a claim for income benefits with Government Service
Insurance System (GSIS). But GSIS denied the claim on the ground that
Osteosarcoma is not considered an occupational disease under PD No. 626
and there is no showing that his duties as SPO4 in the Philippine National
Police (PNP) had increased the risk of contracting said ailment.
When Abraham died, his heirs appealed the decision of GSIS to the
Employees Compensation Commission (ECC). The ECC affirmed the
decision of the GSIS. On appeal, the Court of Appeals reversed and set
aside the decision of the ECC.
Issue: whether or not the CA erred in ruling that the ailment of the late
Abraham is compensable under the present law on employees
compensation.
Held: In this case, Osteosarcoma is not listed as an occupational disease in
the Amended Rules on Employees Compensation. Hence, it is supposed to
be upon the claimant or private respondents to prove by substantial evidence
that the risk of contracting Osteosarcoma was increased by the working
conditions of the late Abraham. Substantial evidence means such relevant
evidence as a reasonable mind might accept as adequate to support a
conclusion. The records show that Abraham failed to present evidence to
establish that the development of his ailment was traceable to his working
conditions in the Philippine Navy, the now defunct Philippine Constabulary
and the PNP. Further, private respondents allegation in their petition for
review with the CA that Abraham, as a rifleman in the Philippine Navy, may
have been exposed to elements like a virus which could have contributed to
his ailment does not satisfy the requirement of substantial evidence. The rule
is that awards of compensation cannot rest on speculations and
presumptions as the claimant must prove a positive thing. The application of
the rules would mean that absent any proof that the risk of contracting the
ailment was increased by the working conditions of the late Abraham, private
respondents would not be entitled to compensation.
Considering, however, that it is practically undisputed that under the present
state of science, the proof referred by the law to be presented by the
deceased private respondent claimant was unavailable and impossible to
comply with, the condition must be deemed as not imposed. The CA held
that:
The present case at bench is no different. Petitioners failure to present
positive evidence of a causal relation of the illness and his working conditions
is due to the pure and simple lack of available proof to be offered in
evidence. Verily, to deny compensation to osteosarcoma victims who will
definitely be unable to produce a single piece of proof to that effect, is
unrealistic, illogical and unfair. At the very least, on a very exceptional
circumstance, the rule on compensability should be relaxed and be allowed
to apply to such situations. To disallow the benefit will even more add up to
the sufferings, this time, for the ignorance of the inability of mankind to
discover the real truth about cancer.
As earlier noted, however, in the specific case of respondent, the requirement
is impossible to comply with, given the present state of scientific
knowledge. The obligation to present such as an impossible evidence must,
therefore, be deemed void. Respondent, therefore, is entitled to
compensation, consistent with the social legislations intended beneficial
purpose.
Taylor vs Uy Tieng piao
G.R. No. L-16109
October 2, 1922
FACTS
Taylor contracted his services to Tan Liuan & Co as superintendent of an oil
factory which the latter contemplated establishing. The contract extended
over 2 years and the salary was P600/month during the first year and
P700/month during the second with electric, light and water for domestic
consumption or in lieu thereof, P60/month. At this time, the machinery for
contemplated factory had not been acquired, though ten expellers had been
ordered from the US. It was understood that should the machinery to be
installed fail, for any reason, to arrive in Manila within the period of 6 months,
the contract may be cancelled by the party of the second part at its option,
such cancellation not to occur before the expiration of such 6 months. The
machinery did not arrive in Manila within the 6 months; the reason does not
appear, but a preponderance of evidence show that the defendants seeing
that oil business no longer promised large returns, either cancelled the order
for machinery from choice or were unable to supply the capital necessary to
finance the project. Defendants communicated to Taylor that they had
decided to rescind the contract. Taylor instituted this action to recover
damages in the amount of P13k, covering salary and perks due and to
become due.
If it were apparent, or could be demonstrated, that the defendants were
under a positive obligation to cause the machinery to arrive in Manila, they
would of course be liable, in the absence of affirmative proof showing that the
nonarrival of the machinery was due to some cause not having its origin in
their own act or will. The contract, however, expresses no such positive
obligation, and its existence cannot be implied in the fact of stipulation,
defining the conditions under which the defendants can cancel the contract.
LEVISTE OBTAINED LOAN FROM GSIS P1,900,000.
Mortgaged 2 lots, the properties located at Paranaque and one located at
Buendia.. Leviste then Sold Buendia property to Herrera for P3,750,000.
CONDITIONS:
1. Pay Leviste P11,900,000.
2. Assume Levistes indebtedness P1,900,000 to GSIS
3. Substitute Paranaque property with his own in 6 months.
Leviste arranged conformity of GSIS to petitioners assumption of obligation.
CONTRACT TO SELL: failure to comply shall render contract automatically
cancelled, all payments forfeited, plus rental and damages.
HERRERA only remitted P300,000 to GSIS despite receiving rentals P21,000
monthly and P800,000 in 4 years. He then requested GSIS for restructuring
of the mortgage obligation because of his own arrarages in the payment of
the amortizations. GSIS replied that as a matter of policy, it could not act on
his request unless he first made proper substitution of property, updated the
account, and paid 20% thereof to the GSIS. GSIS sent notice to Leviste to
foreclose mortgage by reason of default in payment of amortizations.
Application for foreclosure filed, properties sold at public auction with
certificate in favor of GSIS. Leviste assigned its right to redeem both
foreclosed properties to respondent Jose Marcelo, Jr. (Marcelo for brevity).
Marcelo redeemed the properties from the GSIS by paying it the sum of
P3,232,766.94 for which he was issued a certificate of redemption.
Paranaque property turned over to Levisted for P250,000.00. Herrera
informed GSIS of his right to redeem the foreclosed properties and asking
that he be allowed to do so in installments.
1. GSIS had not favorably acted thereon.
Herrera instituted suit against Leviste for "Injunction, Damages, and
Cancellation of Annotation."
Trial Court rendered lack of basis in fact and in law: Ordered payments made
by petitioner to Leviste forfeited pursuant to their contract providing for
automatic forfeiture "in the event of failure to comply with any of the
conditions contained therein, particularly the payment of the scheduled
amortizations."
Issue: Whether or not Herrera has the right to redeem the foreclosed
property
Held: It is quite true that petitioner had lost the P 1,895,688.00 he had paid to
Leviste, plus P 300,000.00 he had paid to GSIS, less the rentals he had
received when in possession of the Buendia Property. That loss is
attributable to his fault in:
(a) Not having been able to submit collateral to GSIS in substitution of the
Paranaque Property;
(b) Not paying off the mortgage debt when GSIS decided to foreclose; and
(c) Not making an earnest effort to redeem the property as a possible
redemptioner.
3. It cannot be validly said that petitioner had fully complied with all the
conditions of his contract with Leviste. For one thing, he was not able to
substitute the Paraaque Property with another collateral for the GSIS loan.
Moreover, as stated by the Court of Appeals, "nowhere in the letter (of the
GSIS) was mentioned that a final deed of sale must first be executed and
presented before the assumption may be considered. For if it was really the
intention of GSIS, the requirement of Deed of Sale should have been stated
in its letter."
Tayag v. CA
The deed of conveyance executed by Juan Galicia, Sr and Celerina
Labuguin in favor of Albrigido Leyva involving the undivided one-half portion
of a piece of land with the following terms:
1. The sum of PESOS: THREE THOUSAND (P3,000.00) is HEREBY
acknowledged to have been paid upon the execution of this agreement;
2. The sum of PESOS: TEN THOUSAND (P10,000.00) shall be paid within
ten (10) days from and after the execution of this agreement;
3. The sum of PESOS: TEN THOUSAND (P10,000.00) represents the
VENDORS' indebtedness with the Philippine Veterans Bank which is hereby
assumed by the VENDEE; and
4. The balance of PESOS: TWENTY SEVEN THOUSAND (P27,000.00.)
shall be paid within one (1) year from and after the execution of this
instrument.
is the subject matter of the present litigation between the heirs of Juan
Galicia, Sr. who assert breach of the conditions as against private
respondent's claim anchored on full payment and compliance with the
stipulations thereof. There is no dispute that the sum of P3,000.00 listed as
first installment was received by Juan Galicia, Sr. According to petitioners, of
the P10,000.00 to be paid within ten days from execution of the instrument,
only P9,707.00 was tendered to, and received by, them on numerous
occasions. Concerning private respondent's assumption of the vendors'
obligation to the Philippine Veterans Bank, the vendee paid only the sum of
P6,926.41 while the difference the indebtedness came from Celerina
Labuguin. Petitioners asserted that not a single centavo of the P27,000.00
representing the remaining balance was paid to them.
Issue: whether or not the conditions of the instrument were performed by
herein private respondent as vendee.
Held: Insofar as the third item of the contract is concerned, it may be recalled
that respondent court applied Article 1186 of the Civil Code on constructive
fulfillment which petitioners claim should not have been appreciated because
they are the obligees while the proviso in point speaks of the obligor. But,
petitioners must concede that in a reciprocal obligation like a contract of
purchase, (Ang vs. Court of Appeals, 170 SCRA 286 [1989]; 4 Paras, supra,
at p. 201), both parties are mutually obligors and also obligees (4 Padilla,
supra, at p. 197), and any of the contracting parties may, upon non-fulfillment
by the other privy of his part of the prestation, rescind the contract or seek
fulfillment (Article 1191, Civil Code). In short, it is puerile for petitioners to say
that they are the only obligees under the contract since they are also bound
as obligors to respect the stipulation in permitting private respondent to
assume the loan with the Philippine Veterans Bank which petitioners
impeded when they paid the balance of said loan. As vendors, they are
supposed to execute the final deed of sale upon full payment of the balance
as determined hereafter.
American Home assurance Co. v. NLRC
Private respondent Romeo F. de Leon was a branch manager of petitioner
companys office. In their desire to streamline and restructure the companys
organization and rationalize its operations, petitioners offered a Special Early
Retirement Program (SERP). to all its regular employees. The said program
called for the voluntary separation/retirement of the employees in exchange
for cash payments consisting of two months basic salary for every year of
service and a lump sum of P50,000.00. The Company, however, reserved for
itself the sole discretion to approve or deny applications under the program.
The company then invited respondent to the said program and the
respondent submit its application for an early retirement but the same was
denied on March by the company on the ground that its operational
requirements needed his continuous employment. Sometime in 1989,
petitioner company and Philamgen entered into a merger resulting in the
absorption of some of the employees of the former by the latter. A
memorandum was again circulated to all employees of the company
announcing the last and final re-opening of the SERP because it was
determined that there still exists a limited number of redundancies in the
organization resulting from the recent restructuring of operations of American
Home, PhilHome (another sister company) and Philamgen. Private
respondent applied anew under the program on the ground that Carlos Valin,
had also been performing the functions of branch manager in the
office. Secondly, he believed that he could be more productive as an agent of
petitioner company if allowed to retire early. On the same day, petitioner
company again denied his application for the same reason that it gave in
denying his first application. It turned out that in an earlier letter, petitioners
had prepared a notice of termination of employment for private respondent
1991 based on the ground that his position as a branch manager had been
determined to be a duplication of another persons job, for which reason his
position was declared redundant. Upon his receipt on February 7, 199l of the
separation pay provided in the notice of termination amounting
to P331,896.61, private respondent executed a release, waiver and quitclaim
wherein, as therein stated, he acknowledged receipt of the above amount as
full settlement of any and all claims he may have against the company
arising from the companys retirement plan, agreement or contract relating to
or arising from any and all incidents of his employment with the company.
The respondent wrote a letter to petitioner saying that was entitled to the
additional benefits under the SERP because the ground for termination of his
services - redundancy of position - was precisely a ground for management
to accept his application for retirement under the SERP. However, the
company denied such claim.
Issue: whether or not the additional claim of private respondent is already
barred by his waiver and quitclaim under the principle of estoppel.
Held: A reading of the assailed resolution of the NLRC will show that public
respondent did not in any way grant the P50,000.00 bonus as an alternative
for the award of damages. Hence, petitioners objection on this ground is
without basis and does not deserve any consideration. It was the Solicitor
General who suggested that the award of P50,000.00 be sustained as an
alternative for moral and exemplary damages, but that was not made the
basis for the award by the NLRC of the bonus or its ratiocination for the grant
thereof.
The fact that private respondent signed a document of waiver and quitclaim
does not bar him from pursuing the P50,000.00 bonus under the SERP. His
receipt of the separation pay and the execution of the release documents
cannot militate against him. That acceptance of separation pay does not
amount to estoppel, and the satisfaction receipt does not result in a
waiver. The law does not consider as valid any agreement to receive less
compensation than what a worker is entitled to recover nor prevent him from
demanding benefits to which he is entitled. Quitclaims executed by
employees are thus commonly frowned upon as contrary to public policy and
ineffective to bar claims for the full measure of the workers legal
rights, considering the economic disadvantage of the employee and the
inevitable pressure upon him by financial necessity.
Sps. Bronostro v. Sps. Luna
Respondent Constancia Luna (Constancia), as buyer, entered into a Contract
to Sell with Bliss Development Corporation (Bliss) involving a house and lot.
Barely a year after, Constancia, this time as the seller, entered into another
Contract to Sell6with petitioner Lourdes Bonrostro (Lourdes) concerning the
same property under the following terms and conditions:
1. The stipulated price of P1,250,000.00 shall be paid by the VENDEE to the
VENDOR in the following manner:
(a) P200,000.00 upon signing x x x the Contract To Sell,
(b) P300,000.00 payable on or before April 30, 1993,
(c) P330,000.00 payable on or before July 31, 1993,
(d) P417,000.00 payable to the New Capitol Estate, for 15 years
at P6,867.12 a month,
Immediately after the execution of the said second contract, the spouses
Bonrostro took possession of the property. However, except for
the P200,000.00 down payment, Lourdes failed to pay any of the stipulated
subsequent amortization payments.
Constancia and her husband, respondent Juan Luna (spouses Luna), filed
before the RTC a Complaint for Rescission of Contract and Damages against
the spouses Bonrostro. In their Answer with Compulsory Counterclaim, the
spouses Bonrostro averred that they were willing to pay their total balance
of P630,000.00 to the spouses Luna after they sought from them a 60-day
extension to pay the same. However, during the time that they were ready to
pay the said amount in the last week of October 1993, Constancia and her
lawyer, Atty. Arlene Carbon (Atty. Carbon), did not show up at their
rendezvous. The spouses Bonrostro likewise belied that they were not paying
the monthly amortization to New Capitol Estates and asserted that on
November 18, 1993, they paid Bliss, the developer of New Capitol Estates,
the amount of P46,303.44. Later during trial, Lourdes testified that
Constancia instructed Bliss not to accept amortization payments from anyone
as evidenced by her March 4, 1993 letter to Bliss. The RTC ruled that the
delay could not be considered a substantial breach considering that Lourdes
(1) requested for an extension within which to pay; (2) was willing and ready
to pay as early as the last week of October 1993 and even wrote Atty. Carbon
about this on November 24, 1993; (3) gave Constancia a down payment
of P200,000.00; and, (4) made payment to Bliss. The CA ruled that in
Considering that Lourdes had incurred x x x delay in the performance of her
obligations, she should pay (i) interest at the rate of 2% per month on the
sum of P300,000.00 from May 1, 1993 until fully paid and (ii) interest at the
legal rate on the amounts of P330,000.00 and P214,492.62 from the date of
default (August 1, 1993 and April 4, 1997 date of the appealed decision,
respectively) until the same are fully paid.
Issue: Whether or not The spouses Bonrostro want be relieved from paying
interest on the amount of P214,492.62 which the spouses Luna paid to Bliss
as amortizations by asserting that they were prevented by the latter from
fulfilling such obligation.
the Court finds Art. 1186 inapplicable to this case. The said provision
explicitly speaks of a situation where it is the obligor who voluntarily prevents
fulfillment of the condition. Here, Constancia is not the obligor but the
obligee. Moreover, even if this significant detail is to be ignored, the mere
intention to prevent the happening of the condition or the mere placing of
ineffective obstacles to its compliance, without actually preventing fulfillment
is not sufficient for the application of Art. 1186. 37 Two requisites must concur
for its application, to wit: (1) intent to prevent fulfillment of the condition; and,
(2) actual prevention of compliance.38
In this case, while it is undisputed that Constancia indeed instructed Bliss on
March 4, 1994 not to accept payment from anyone but her, there is nothing
on record to show that Bliss heeded the instruction of Constancia as to
actually prevent the spouses Bonrostro from making payments to Bliss.
There is no showing that subsequent to the said letter, the spouses Bonrostro
attempted to make payment to and was refused by Bliss. Neither was there a
witness presented to prove that Bliss indeed gave effect to the instruction
contained in Constancias letter. While Bliss Project Development Officer, Mr.
Ariel Cordero, testified during trial, nothing could be gathered from his
testimony regarding this except for the fact that Bliss received the said
letter.39 In view of these, the spouses Luna could not be said to have placed
an effective obstacle as to actually prevent the spouses Bonrostro from
making amortization payments to Bliss.