Crisostomo v.

CA

G.R. No. 138334, August 25, 2003, 409 SCRA 528

FACTS:

Petitioner contracted the services of respondent Caravan Travel and Tours International, Inc. to arrange and facilitate
her booking, ticketing and accommodation in a tour dubbed Jewels of Europe. Pursuant to said contract, the travel
documents and plane tickets were delivered to the petitioner who in turn gave the full payment for the package tour
on June 12, 1991. Without checking her travel documents, petitioner went to NAIA on Saturday, June 15, 1991, to take
the flight for the first leg of her journey from Manila to Hongkong. To petitioner’s dismay, she discovered that the flight
she was supposed to take had already departed the previous day. She learned that her plane ticket was for the flight
scheduled on June 14, 1991. She thus called up Menor to complain. Subsequently, Menor prevailed upon petitioner to
take another tour- the British Pageant. Upon petitioner’s return from Europe, she demanded from respondent the
reimbursement of the difference between the sum she paid for Jewels of Europe and the amount she owed respondent
for the British Pageant tour.

Petitioner filed a complaint against respondent for breach of contract of carriage and damages alleging that her failure
to join Jewels of Europe was due to respondent’s fault since it did not clearly indicate the departure date on the plane,
failing to observe the standard of care required of a common carrier when it informed her wrongly of the flight
schedule. For its part, respondent company, denied responsibility for petitioner’s failure to join the first tour, insisting
that petitioner was informed of the correct departure date, which was clearly and legibly printed on the plane ticket.
The travel documents were given to petitioner two days ahead of the scheduled trip. Respondent further contend that
petitioner had only herself to blame for missing the flight, as she did not bother to read or confirm her flight schedule
as printed on the ticket.

ISSUE:

Whether or not Caravan Travel & Tours International Inc. is negligent in the fulfilment of its obligation to petitioner
Crisostomo thus granting to the petitioner the consequential damages due her as a result of breach of contract of
carriage.

RULING:

Contention of petitioner has no merit. A contract of carriage or transportation is one whereby a certain person or
association of persons obligate themselves to transport persons, things, or news from one place to another for a fixed
price. Such person or association of persons are regarded as carriers and are classified as private or special carriers
and common or public carriers. Respondent is not an entity engaged in the business of transporting either passengers
or goods and is therefore, neither a private nor a common carrier. Respondent did not undertake to transport
petitioner from one place to another since its covenant with its customers is simply to make travel arrangements in
their behalf. Respondent’s services as a travel agency include procuring tickets and facilitating travel permits or visas
as well as booking customers for tours.

The object of petitioner’s contractual relation with respondent is the service of arranging and facilitating petitioners
booking, ticketing and accommodation in the package tour. In contrast, the object of a contract of carriage is the
transportation of passengers or goods. It is in this sense that the contract between the parties in this case was an
ordinary one for services and not one of carriage. Since the contract between the parties is an ordinary one for
services, the standard of care required of respondent is that of a good father of a family under Article 1173 of the Civil
Code. The evidence on record shows that respondent exercised due diligence in performing its obligations under the
contract and followed standard procedure in rendering its services to petitioner. As correctly observed by the lower
court, the plane ticket issued to petitioner clearly reflected the departure date and time, contrary to petitioner’s
contention. The travel documents, consisting of the tour itinerary, vouchers and instructions, were likewise delivered
to petitioner two days prior to the trip. Respondent also properly booked petitioner for the tour, prepared the
necessary documents and procured the plane tickets. It arranged petitioner’s hotel accommodation as well as food,
land transfers and sightseeing excursions, in accordance with its avowed undertaking. The evidence on record shows
that respondent company performed its duty diligently and did not commit any contractual breach. Hence, petitioner
cannot recover and must bear her own damage.
Cetus Development, Inc. vs. Court of Appeals

G.R. No. 77648, August 7, 1989, 176 SCRA 72

FACTS:

The private respondents were the lessees of the premises originally owned by the Susana Realty. These individual
verbal leases were on a month-to-month basis and were paying to a collector of the Susana Realty who went to the
premises monthly. Sometime on March 1984, Susana Realty sold the leased premises to the petitioner, Cetus
Development, Inc. From April to June 1984, the respondents continued to pay their monthly rentals to a collector sent
by the petitioner, but in the succeeding months, they failed to pay as no collector came.

On October 9, 1984, the petitioner sent a letter to each of the private respondents demanding that they vacate the
subject premises and to pay the back rentals for the unpaid monthly rentals. Immediately upon receipt thereof, the
private respondents paid their respective arrearages in rent which were accepted by the petitioner. However, private
respondents did not vacate the leased premises. Hence, petitioner filed with the Metropolitan Trial Court of Manila
complaints for ejectment against the private respondents.

The private respondents, in their respective answers assailed that they were paying their monthly rental regularly
since they occupied such premises, that their non-payment of the rentals was due to the failure of the petitioner to
send its collector, that they were at a loss as to where they should pay their rentals, that one of them called the office
of the petitioner to inquire as to where they would make payment and was told that a collector would be sent to
receive the same, that no collector was subsequently sent, and that instead they received a uniform demand letter.

The trial court rendered its decision dismissing the six cases. It held that the plaintiff cannot eject the defendants from
the leased premises because at the time cases were instituted, there are no rentals in arrears. The alleged rental
arrearages were paid immediately after receipt of the demand letter and that the rentals of the tenants are relatively
small to which the ejectment may not lie on grounds of equity and for humanitarian reasons. Petitioner appealed to
the Regional Trial Court and the Court of Appeals, but both dismissed the appeal for lack of merit, affirming the
decision of the trial court. Hence, this case.

ISSUE:

Whether or not there exists a cause of action when the complaints for unlawful detainer were filed considering the fact
that upon demand by petitioner from private respondents for payment of their back rentals, the latter immediately
tendered payment which was accepted by petitioner.

RULING:

No, there is lack of cause of action. We held that the demand required and contemplated by law is a jurisdictional
requirement for the purpose of bringing an unlawful detainer suit for failure to pay rent or comply with the conditions
of the lease. It partakes of an extrajudicial remedy that must be pursued before resorting for judicial action so much so
that when there is full compliance with the demand, there arises no necessity for court action.

For the purpose of bringing an ejectment suit, two requisites must concur, namely: (1) there must be failure to pay
rent or comply with the conditions of the lease and (2) there must be demand both to pay or to comply and vacate
within the periods specified by law.

In the case at bar, it is very clear that no cause of action for ejectment has accrued. There was no failure yet on the
part of the private respondents to pay rents for three consecutive months. As the terms of the individual verbal leases
which were on a month-to- month basis were not alleged and proved, the general rule on necessity of demand applies,
to wit: there is default in the fulfillment of an obligation when the creditor demands payment at the maturity of the
obligation or at anytime thereafter.
GENERAL MILLING CORPORATION v. SPS. LIBRADO RAMOS and REMEDIOS RAMOS G.R. No. 193723, July
20, 2011, Velasco, Jr., J.

There are three requisites necessary for a finding of default. First, the obligation is demandable and liquidated;
second, the debtor delays performance; and third, the creditor judicially or extrajudicially requires the debtor’s
performance.

Facts:

General Milling Corporation (GMC) entered into a Growers Contract with spouses Librado and Remedios Ramos to
supply broiler chickens for the spouses to raise. The contract was accompanied by a Deed of Real Estate Mortgage
over a piece of real property. The spouses further agreed to put up a surety bond. Spouses Ramos eventually were
unable to settle their account with GMC. On March 31, 1997, GMC notified Spouses Ramos that GMC would institute
foreclosure proceedings. On May 7, 1997, GMC filed a Petition for Extrajudicial Foreclosure of Mortgage. The property
was subsequently sold. The Spouses Ramos filed a Complaint for Annulment and/or

Declaration of Nullity of the Extrajudicial Foreclosure Sale with Damages. It was alleged that the Deed of Real Estate
Mortgage had no fixed term. The RTC ruled in favor of Spouses Ramos stating that the action of GMC in moving for the
foreclosure was premature, because the latter’s obligation under their contract was not yet due. The CA found that
GMC’s action against Spouses Ramos was premature, as they were not in default when the action was filed on May 7,
1997. GMC claims that its March 31, 1997 letter is akin to a demand.

Issue: Whether or not a sufficient demand was made by GMC.

Ruling:

No. According to the CA, GMC did not make a demand on Spouses Ramos but merely requested them to go to GMC’s
office to discuss the settlement of their account. In spite of the lack of demand made on the spouses, however, GMC
proceeded with the foreclosure proceedings. We agree with the appellate court that GMC should have first made a
demand on the spouses before proceeding to foreclose the real estate mortgage. In the case of Development Bank of
the Philippines v. Licuanan, the court stated that the issue of whether demand was made before the foreclosure was
effected is essential. If demand was made and duly received by the respondents and the latter still did not pay, then
they were already in default and foreclosure was proper. However, if demand was not made, then the loans had not
yet become due and demandable. This meant that respondents had not defaulted in their payments and the
foreclosure by petitioner was premature. Foreclosure is valid only when the debtor is in default in the payment of his
obligation.
Abella v. Francisco

55 Phil. 447 (1931)

FACTS:

Defendant Guillermo B. Francisco purchased from the Government on installments, lots 937 to 945 of the Tala Estate
in Novaliches, Caloocan, Rizal. He was in arrears for some of these installments. On the 31st of October, 1928, he
signed a document acknowledging payment of P500 and the balance to be paid on or before December 15, 1928,
extendible fifteen days thereafter. On December 27th of the same year, the defendant, being in the Province of Cebu,
wrote to Roman Mabanta of this City of Manila, attaching a power of attorney authorizing him to sign in behalf of the
defendant all the documents required by the Bureau of Lands for the transfer of the lots to the plaintiff. Mabanta, as
attorney-in-fact, did what was instructed to him. The plaintiff, asked for an extension until January 9, 1929. However,
Mabanta, only extended it until January 5, 1929. When Abella was not able to pay of the said date, Mabanta refused to
accept the full payment on January 9, 1929 and already considered the contract rescinded. On the same day, Mabanta
returned by check the sum of P915.31 which the plaintiff had paid.

ISSUE:

Whether or not the defendant be compelled to accept the payment and the plaintiff be judicially declared as owner of
the land.

RULING:

The court relied on the fact that the plaintiff had failed to pay the price of the lots within the stipulated time; and that
since the contract between plaintiff and defendant was an option for the purchase of the lots,’ time was an essential
element in it. It is to be noted that in the document signed by the defendant, the 15th of December was fixed as the
date, extendible for fifteen days, for the payment by the plaintiff of the balance of the selling price. It has been
admitted that the plaintiff did not offer to complete the payment until January 9, 1929. He contends that Mabanta, as
attorney-in-fact for the defendant in this transaction, granted him an extension of time until the 9th of January. But
Mabanta has stated that he only extended the time until the 5th of that month. Mabanta’s testimony on this point is
corroborated by that of Paz Vicente and by the plaintiff’s own admission to Narciso Javier that his option to purchase
those lots expired on January 5, 1929. The defendant wanted to sell those lots to the plaintiff in order to pay off certain
obligations which fell due in the month of December, 1928. The time fixed for the payment of the price was therefore
essential for the defendant, and this view is borne out by his letter to his representative Mabanta instructing him to
consider the contract rescinded if the price was not completed in time. In accordance with article 1124 of the Civil
Code, the defendant is entitled to resolve the contract for failure to pay the price within the time specified.
Central Bank v. CA

G.R. No. L-45710, October 3, 1985, 139 SCRA 46

FACTS:

On April 28, 1965, Island Savings Bank, upon favorable recommendation of its legal department, approved the loan
application for P80,000.00 of Sulpicio M. Tolentino, who, as a security for the loan, executed on the same day a real
estate mortgage over his 100-hectare land located in Cubo, Las Nieves, Agusan, and covered by TCT No. T-305, and
which mortgage was annotated on the said title the next day. The approved loan application called for a lump sum
P80,000.00 loan, repayable in semi-annual installments for a period of 3 years, with 12% annual interest. It was
required that Sulpicio M. Tolentino shall use the loan proceeds solely as an additional capital to develop his other
property into a subdivision. The loan called for a lump sum of P80,000, repayable in semi-annual installments for 3 yrs,
with 12% annual interest. After the agreement, a mere P17,000 partial release of the loan was made by the bank and
Tolentino and his wife signed a promissory note for the P17,000 at 12% annual interest payable w/in 3 yrs. An advance
interest was deducted fr the partial release but this prededucted interest was refunded to Tolentino after being
informed that there was no fund yet for the release of the P63,000 balance.

On August 13, 1965, the Monetary Board of the Central Bank, after finding Island Savings Bank was suffering liquidity
problems, issued Resolution No. 1049, which provides the prohibition of the bank from making new loans and
investments [except investments in government securities] excluding extensions or renewals of already approved
loans, provided that such extensions or renewals shall be subject to review by the Superintendent of Banks, who may
impose such limitations as may be necessary to insure correction of the bank’s deficiency as soon as possible.

ISSUES:

Can the action of Sulpicio M. Tolentino for specific performance prosper?

RULING:

In reciprocal obligations, the obligation or promise of each party is the consideration for that of the other and when
one party has performed or is ready and willing to perform his part of the contract, the other party who has not
performed or is not ready and willing to perform incurs in delay (Art. 1169 of the Civil Code). The promise of Sulpicio
M. Tolentino to pay was the consideration for the obligation of Island Savings Bank to furnish the P80,000.00 loan.
When Sulpicio M. Tolentino executed a real estate mortgage on April 28, 1965, he signified his willingness to pay the
P80,000.00 loan. From such date, the obligation of Island Savings Bank to furnish the P80,000.00 loan accrued. Thus,
the Bank’s delay in furnishing the entire loan started on April 28, 1965, and lasted for a period of 3 years or when the
Monetary Board of the Central Bank issued Resolution No. 967 on June 14, 1968, which prohibited Island Savings Bank
from doing further business. Such prohibition made it legally impossible for Island Savings Bank to furnish the
P63,000.00 balance of the P80,000.00 loan. The power of the Monetary Board to take over insolvent banks for the
protection of the public is recognized by Section 29 of R.A. No. 265, which took effect on June 15, 1948, the validity of
which is not in question.
Chavez v. Gonzales

G.R. No. 27454, April 30, 1970, 32 SCRA 547

FACTS:

On July 1963, Rosendo Chavez brought his typewriter to Fructuoso Gonzales a typewriter repairman for the cleaning
and servicing of the said typewriter but the latter was not able to finish the job. During October 1963, the plaintiff gave
the amount of P6.00 to the defendant which the latter asked from the plaintiff for the purchase of spare parts, because
of the delay of the repair the plaintiff decided to recover the typewriter to the defendant which he wrapped it like a
package. When the plaintiff reached their home he opened it and examined that some parts and screws was lost. That
on October 29, 1963 the plaintiff sent a letter to the defendant for the return of the missing parts, the interior cover
and the sum of P6.00 (Exhibit D). The following day, the defendant returned to the plaintiff some of the missing parts,
the interior cover and the P6.00. The plaintiff brought his typewriter to Freixas Business Machines and the repair cost
the amount of P89.85. He commenced this action on August 23, 1965 in the City Court of Manila, demanding from the
defendant the payment of P90.00 as actual and compensatory damages, P100.00 for temperate damages, P500.00 for
moral damages, and P500.00 as attorney’s fees. The defendant made no denials of the facts narrated above, except
the claim of the plaintiff that the cost of the repair made by Freixas Business Machines be fully chargeable against
him.

ISSUE:

Whether or not the defendant is liable for the total cost of the repair made by Freixas Business Machines with the
plaintiff typewriter?

RULING:

No, he is not liable for the total cost of the repair made by Freixas Business Machines instead he is only liable for the
cost of the missing parts and screws. The defendant contravened the tenor of his obligation in repairing the typewriter
of the plaintiff that he fails to repair it and returned it with the missing parts.

Under Article 1167 of the Civil Code, a person who is obliged to do something and fails to do it shall be liable for the
cost of executing the obligation in a proper manner. The cost of execution of the obligation to repair a typewriter is the
cost of the labor or service expended in the repair of the typewriter. In addition, the obligor, under Article 1170 of the
Code, is liable for the cost of the missing parts because in his obligation to repair the typewriter he is bound to return
the typewriter in the same condition it was when he received it.

This same rule shall be observed if he does it in contravention of the tenor of the obligation. Furthermore it may be
decreed that what has been poorly done he undone.”
Telefast v. Castro

G.R. No. 73867, February 29, 1988, 158 SCRA 445

FACTS:

Sofia, one of the plaintiffs, sent a telegram thru Telefast to her father and other siblings in the USA to inform about the
death of their mother. Unfortunately, the deceased had already been interred but not one from the relatives abroad
was able to pay their last respects. Sofia found out upon her return in the US that the telegram was never received.
Hence the suit for damages on the ground of breach of contract. The defendant-petitioner argues that it should only
pay the actual amount paid to it.

The lower court ruled in favor of the plaintiffs and awarded compensatory, moral, exemplary damages to each of the
plaintiffs with 6% interest per annum plus attorney’s fees. The Court of Appeals affirmed this ruling but modified and
eliminated the compensatory damages to Sofia and exemplary damages to each plaintiff, it also reduced the moral
damages for each. The petitioner appealed contending that, it can only be held liable for P 31.92, the fee or charges
paid by Sofia for the telegram that was never sent to the addressee, and that the moral damages should be removed
since defendant’s negligent act was not motivated by “fraud, malice or recklessness.

ISSUE:

Whether or not the award of the moral, compensatory and exemplary damages is proper.

RULING:

Yes, award of moral, compensatory and exemplary damages is proper.

Art. 1170 of the Civil Code provides that “those who in the performance of their obligations are guilty of fraud,
negligence or delay, and those who in any manner contravene the tenor thereof, are liable for damages.” Art. 2176
also provides that “whoever by act or omission causes damage to another, there being fault or negligence, is obliged
to pay for the damage done.”

The petitioner’s act or omission, which amounted to gross negligence, was precisely the cause of the suffering private
respondents had to undergo. Art. 2217 of the Civil Code states: “Moral damages include physical suffering, mental
anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation, and similar
injury. Though incapable of pecuniary computation, moral damages may be recovered if they are the proximate
results of the defendant’s wrongful act or omission.”

Then, the award of P16,000.00 as compensatory damages to Sofia representing the expenses she incurred when she
came to the Philippines from the United States to testify before the trial court. Had petitioner not been remiss in
performing its obligation, there would have been no need for this suit or for her testimony. The award of exemplary
damages by the trial court is likewise justified for each of the private respondents, as a warning to all telegram
companies to observe due diligence in transmitting the messages of their customers.