Submitted by:

Nia Osleyver D. Cabucos

Kathleen D. Llerin
Schedule:
MWF ( 6:00PM - 7:00PM )

Submitted to :
Atty. Ma. Cassandra Teves

G.R. No. 166869

February 16, 2010
PHILIPPINE HAWK CORPORATION, Petitioner,
vs.
VIVIAN TAN LEE, Respondent.
FACTS:
On March 15, 2005, respondent Vivian Tan Lee filed before the RTC of Quezon City a
Complaint against petitioner Philippine Hawk Corporation and defendant Margarito Avila for
damages based on quasi-delict, arising from a vehicular accident that occurred on March 17,
1991 in Barangay Buensoceso, Gumaca, Quezon. The accident resulted in the death of
respondent's husband, Silvino Tan, and caused respondent physical injuries. The accident

involved a motorcycle, a passenger jeep, and a bus with Body No. 119. The bus was owned by
petitioner Philippine Hawk Corporation, and was then being driven by Margarito Avila.
On June 18, 1992, respondent filed an Amended Complaint, in her own behalf and in behalf
of her children, in the civil case for damages against petitioner. Respondent sought the payment
of indemnity for the death of Silvino Tan, moral and exemplary damages, funeral and interment
expenses, medical and hospitalization expenses, the cost of the motorcycle's repair, attorney's
fees, and other just and equitable reliefs.
In its Answer, petitioner denied liability for the vehicular accident, saying that the immediate
and proximate cause of the accident was the recklessness or lack of caution of Silvino Tan.
Petitioner asserted that it exercised the diligence of a good father of the family in the selection
and supervision of its employees, including Margarito Avila.
The trial court rendered judgment against petitioner and defendant Margarito Avila, wherein
it adjudged guilty of simple negligence. It further held petitioner bus company liable for failing
to exercise the diligence of a good father of the family in the selection and supervision of Avila,
having failed to sufficiently inculcate in him discipline and correct behavior on the road. The CA
affirmed the decision of the trial court with modification in the award of damages.
ISSUE:
Whether or not petitioner is liable to respondent for damages.
RULING OF THE COURT:
YES. The Court upholds the finding of the trial court and the Court of Appeals that
petitioner is liable to respondent, since it failed to exercise the diligence of a good father of the
family in the selection and supervision of its bus driver, Margarito Avila, for having failed to
sufficiently inculcate in him discipline and correct behavior on the road. Indeed, petitioner's tests
were concentrated on the ability to drive and physical fitness to do so. It also did not know that
Avila had been previously involved in sideswiping incidents. The Court also affirmed the CA's
decision in awarding civil indemnity for the death of respondent's husband, temperate damages,
and moral damages for the physical injuries sustained by respondent in addition to the damages
granted by the trial court to respondent.

G.R. No. 158768

February 12, 2008

TITAN-IKEDA CONSTRUCTION & DEVELOPMENT CORPORATION, petitioner,

vs.
PRIMETOWN PROPERTY GROUP, INC., respondent.
FACTS:
In 1992, respondent Primetown Property Group, Inc. awarded the contract for the structural
works of its 32-storey Makati Prime Tower (MPT) to petitioner Titan-Ikeda Construction and
Development Corporation. In September 1995, respondent engaged the services of Integratech,
Inc. (ITI), an engineering consultancy firm, to evaluate the progress of the project. In its report,
ITI informed respondent that petitioner, at that point, had only accomplished 31.89% of the

project (or was 11 months and six days behind schedule). Meanwhile, petitioner and respondent
were discussing the possibility of the latters take over of the projects supervision. Despite
ongoing negotiations, respondent did not obtain petitioners consent in hiring ITI as the projects
construction manager. Neither did it inform petitioner of ITIs September 7, 1995 report.
Subsequently, both parties agreed that Primetown will take over the project. Petitioner then
demanded for the payment due him in relation to its partial performance of its obligation. For
failure of Primetown to pay despite repeated demands, petitioner filed a case for specific
performance against Primetown. Meanwhile, Primetown demanded reimbursement for the
amount it spent in having the project completed.
ISSUE:
Whether or not TITAN-IKEDA is responsible for the projects delay.
RULING OF THE COURT:
It was found that because respondent modified the MPT's architectural design, petitioner had
to adjust the scope of work. Moreover, respondent belatedly informed petitioner of those
modifications. It also failed to deliver the concrete mix and rebars according to schedule. For this
reason, petitioner was not responsible for the project's delay. Mora or delay is the failure to
perform the obligation in due time because of dolo (malice) or culpa (negligence). A debtor is
deemed to have violated his obligation to the creditor from the time the latter makes a demand.
Once the creditor makes a demand, the debtor incurs mora or delay. Respondent never sent
petitioner a written demand asking it to accelerate work on the project and reduce, if not
eliminate, slippage. In view of the foregoing, we hold that petitioner did not incur delay in the
performance of its obligation.

G.R. No. 135657

January 17, 2001
JOSE V. LAGON, petitioner,
vs.
HOOVEN COMALCO INDUSTRIES, INC., respondent.
FACTS:
Petitioner Jose V. Lagon is a businessman and owner of a commercial building in Tacurong,
Sultan Kudarat. Respondent HOOVEN on the other hand is a domestic corporation known to be
the biggest manufacturer and installer of aluminum materials in the country with branch office at
E. Quirino Avenue, Davao City.Sometime in April 1981 Lagon, a businessman and HOOVEN
entered into two (2) contracts, denominated Proposal, whereby for a total consideration of
P104,870.00 HOOVEN agreed to sell and install various aluminum materials in Lagons
commercial building in Tacurong, Sultan Kudarat. HOOVEN filed an action against Lagon
claiming that the latter failed to pay his due despite HOOVENs performance of its obligation.
Lagon, in his answer, denied liability and averred that HOOVEN was the party guilty of breach
of contract by failing to deliver and install some of the materials specified in the proposals; that

as a consequence he was compelled to procure the undelivered materials from other sources; that
as regards the materials duly delivered and installed by HOOVEN, they were fully paid. Upon
request of both parties, the trial court conducted an ocular inspection of Lagon's commercial
building to determine whether the items alleged in the complaint and appearing in the invoices
and delivery receipts had been delivered and installed on the premises.
ISSUE:
Who among the parties is entitled to damages?
RULING OF THE COURT:
The trial court and resolved the case in favor of HOOVEN. It held that the trial court erred in
relying solely on the results of the ocular inspection since the delivery and installation of the
materials in question started as early as 1981, while the ocular inspection was conducted only in
1987 or six (6) years later, after the entire mezzanine was altered and the whole building
renovated. The appellate court also stressed that the testimonies of HOOVEN's witnesses were
straightforward, categorical and supported by documentary evidence of the disputed transactions,
and that all Lagon could offer was a mere denial, uncorroborated and self-serving statements
regarding his transactions with HOOVEN.HOOVEN's bad faith lies not so much on its breach of
contract - as there was no showing that its failure to comply with its part of the bargain was
motivated by ill will or done with fraudulent intent - but rather on its appalling temerity to sue
petitioner for payment of an alleged unpaid balance of the purchase price notwithstanding
knowledge of its failure to make complete delivery and installation of all the materials under
their contracts. Although petitioner was found to be liable to respondent to the extent of
P6,377.66, petitioner's right to withhold full payment of the purchase price prior to the delivery
and installation of all the merchandise cannot be denied since under the contracts the balance of
the purchase price became due and demandable only upon the completion of the project.
Consequently, the resulting social humiliation and damage to petitioner's reputation as a
respected businessman in the community, occasioned by the filing of this suit provide sufficient
grounds for the award of P50,000.00 as moral damages. On the part of Lagon, he is ordered by
the court to pay HOOVEN the amount corresponding to the value of the materials admittedly
delivered to him.
G.R. No. 129018
November 15, 2001

CARMELITA LEAO, assisted by her husband GREGORIO CUACHON, petitioner,

vs.
COURT OF APPEALS and HERMOGENES FERNANDO, respondents.
FACTS:
Hermogenes Fernando, as vendor and Carmelita Leao, as vendee executed a contract to sell
involving a piece of land. In the contract, Leao bound herself to pay Fernando P10,775.00 at the
signing of the contract with the balance of P96,975.00 to be paid within a period of TEN (10)
years at a monthly amortization of P1,747.30. The contract also provided for a grace period of
one month within which to make payments, together with the one corresponding to the month of
grace. Should the month of grace expire without the installments for both months having been
satisfied, an interest of 18% per annum will be charged on the unpaid installments.

ISSUE:
Whether or not petitioner was in delay in the payment of the monthly amortizations.

RULING OF THE COURT:

On the issue of whether petitioner Leao was in delay in paying the amortizations, we rule
that while the contract provided that the total purchase price was payable within a ten-year
period, the same contract specified that the purchase price shall be paid in monthly installments
for which the corresponding penalty shall be imposed in case of default. Petitioner Leao cannot
ignore the provision on the payment of monthly installments by claiming that the ten-year period
within which to pay has not elapsed.
Article 1169 of the Civil Code provides that in reciprocal obligations, neither party incurs in
delay if the other does not comply or is not ready to comply in a proper manner with what is
incumbent upon him. From the moment one of the parties fulfills his obligation, delay by the
other begins. In the case at bar, respondent Fernando performed his part of the obligation by
allowing petitioner Leao to continue in possession and use of the property. Clearly, when
petitioner Leao did not pay the monthly amortizations in accordance with the terms of the
contract, she was in delay and liable for damages. However, we agree with the trial court that the
default committed by petitioner Leao in respect of the obligation could be compensated by the
interest and surcharges imposed upon her under the contract in question.

G.R. No. 127695

December 3, 2001
HEIRS OF LUIS BACUS, namely: CLARA RESMA BACUS, ROQUE R. BACUS, SR.,
SATURNINO R. BACUS, PRISCILA VDA. DE CABANERO, CARMELITA B. SUQUIB,
BERNARDITA B. CARDENAS, RAUL R. BACUS, MEDARDO R. BACUS, ANSELMA B.
ALBAN, RICARDO R. BACUS, FELICISIMA B. JUDICO, and DOMINICIANA B.
TANGAL, petitioners,
vs.
HON. COURT OF APPEALS and SPOUSES FAUSTINO DURAY and VICTORIANA
DURAY, respondents.
FACTS:
Luis Bacus leased to private respondent Faustino Duray a parcel of agricultural land. The
contract contained an option to buy clause. Under said option, the lessee had the exclusive and
irrevocable right to buy 2,000 square meters of the property within five years from a year after
the effectivity of the contract. Close to the expiration of the contract, Luis Bacus died. Thereafter,
the Duray spouses informed one of the heirs of Luis Bacus, that they were willing and ready to
purchase the property under the option to buy clause. Due to the refusal of petitioners to sell the
property, Duray filed a complaint for specific performance against the heirs of Luis Bacus asking
that he be allowed to purchase the lot specifically referred to in the lease contract with option to
buy. On the other hand, petitioners alleged that before Luis Bacus death, private respondents

conveyed to them the formers lack of interest to exercise their option because of insufficiency of
funds. They further alleged that private respondents did not deposit the money as required by the
Lupon and instead presented a bank certification which cannot be deemed legal tender.
ISSUE:
Wether private respondents incur in delay when they did not deliver the purchase price or
consign it in court on or before the expiration of the contract.
RULING OF THE COURT:
Obligations under an option to buy are reciprocal obligations. The performance of one
obligation is conditioned on the simultaneous fulfillment of the other obligation. In other words,
in an option to buy, the payment of the purchase price by the creditor is contingent upon the
execution and delivery of a deed of sale by the debtor. In this case, when private respondents
opted to buy the property, their obligation was to advise petitioners of their decision and their
readiness to pay the price. They were not yet obliged to make actual payment. Only upon
petitioners actual execution and delivery of the deed of sale were they required to pay. Notice of
the creditors decision to exercise his option to buy need not be coupled with actual payment of
the price, so long as this is delivered to the owner of the property upon performance of his part of
the agreement. Consequently, since the obligation was not yet due, consignation in court of the
purchase price was not yet required.
Private respondents did not incur in delay when they did not yet deliver payment nor make a
consignation before the expiration of the contract. In reciprocal obligations, neither party incurs
in delay if the other does not comply or is not ready to comply in a proper manner with what is
incumbent upon him. Only from the moment one of the parties fulfills his obligation, does delay
by the other begin. In this case, as there was no compliance yet with what was incumbent upon
petitioners under the option to buy, private respondents had not incurred in delay when the
cashiers check was issued even after the contract expired.
G.R. No. 178902
April 21, 2010
MANUEL O. FUENTES and LETICIA L. FUENTES, Petitioners,
vs.
CONRADO G. ROCA, ANNABELLE R. JOSON, ROSE MARIE R. CRISTOBAL and
PILAR MALCAMPO,Respondents.
FACTS:
On October 11, 1982, Sabrina Taroza sold to her own son Tarciano T. Roca her
titled of 358 sq.m lot located at canelar, zamboanga under a deed of absolute sale. Six
years later, Tarciano T. Roca offered to the spouses Fuentes the same title of land
bought to her mother with stipulations that Fuentes should pay a downpayment of
60,000.00 php for the trnasfer of lot to them and within 6 months Tarciano would have to
vacate the lot of structures , occupants and secure the consent of his stranged wife.
upon compliance, Fuentes spouses must have to pay Tarciano the amount of
140,000.00 php.On January 11, 1989 a document of absolute sale as issued to the
Fuentes. One year after, Tarciano T. Roca died, which was followed by his wife 9
months after. the children of Roca filed for an action of annulment of sale and
reconveynace of the land against the Fuentes on the ground that tarciano's wife didn't
gave her consent upon her husband and that fraud and forgery. Spouses Fuentes
denied such allegations and claim that the forgery case is personal to Rosario the wife
of Tarciano and she alone could claim it besaides the 4-year prescriptive period for
nullifying the sale on the ground of fraud had already elapsed. The RTC ruled in favor
of the Fuentes, however the Court of Appelas reversed the decision of the RTC.

ISSUE :
Whether or not Rosario's signature was forged
Whether or not, Roca's action for declaration nullity of that sale to the spouses
Fuentes had alreadry prescribed.
RULE OF THE COURT:
Yes, the Supreme Court agrees with CA's observation that Rosario's signature
strokes on the affidavit apperas heavy, deliberate and forced. Her specimen signature
on the other hand are, consitently of a lighter stroke and more fluid. The way the letter
"R" and "S" were written is also remarkably different. The variance is obvious even to
the untrained eye.For the second issue, the SC held its decision based on Art. 173
which provides that inorder that the wife may bring an action for annulment of sale on
the ground of lack os spousal consent during the marriage within 10 years from the
transaction. Consequently, the action that the Rocas, her heirs, brought in 1997 fell
within ten years of the January 11, 1989 sale. Therefore it did not yet prescribe. Even if
the claim of the spouses for prescription was based on fraud and forgery and that the
prescriptive period to be applied is 4 years, the answer is still No, because the sale was
void from the beginning and thus the land remained the property of Tarciano and
Rosario despite that sale. When the two died, they passed on the ownership to their
heirs, namely the Rocas, and as lawful owners thaey had the right to exclude any
person from its enjoyment and disposal (Art 429 of the Civil Code). In fairness to the
Fuentes, the SC held that they should be entitled among other things, to be recovered
from the Tarciano's heirs the amount of 200, 000.00php with legal interest until fully paid
chargeable against his estate. They are also to be entitled to a reimbursement with the
improvements they inroduced with a right of retention until reimbursement is made (Art.
448).
G. R. No. 165548
June 13, 2011
PHILIPPINE REALTY and HOLDING CORP. VS. LEY CONST. and DEV. CORP.
FACTS:
Sometime between April 1988 and October 1989, the two corporations entered into
four major construction projects, as evidenced by four duly notarized "construction
agreements." These were the four construction projects the parties entered into
involving a Project 1, Project 2, Project 3 (all of which involve the Alexandra buildings)
and a Tektite Building. LCDC committed itself to the construction of the buildings
needed by PRHC, which in turn committed itself to pay the contract price agreed upon.
Both parties agreed to enter into another agreement. Abcede asked LCDC to advance
the amount necessary to complete construction. Its president acceded, on the absolute
condition that it be allowed to escalate the contract price. Abcede replied that he would
take this matter up with the board of directors of PRHC.The board of directors turned
down the request for an escalation agreement. However, On 9 August 1991 Abcede
sent a formal letter to LCDC, asking for its conformity, to the effect that should it infuse
P36 million into the project, a contract price escalation for the same amount would be
granted in its favor by PRHC.

ISSUE:
Whether or not there is a fortuitous event in the case at bar.

RULING OF THE COURT:

YES.Under Article 1174 of the Civil Code, to exempt the obligor from liability for a
breach of an obligation due to an "act of God" or force majeure, the following must
concur:(a) the cause of the breach of the obligation must be independent of the will of
the debtor; (b) the event must be either unforseeable or unavoidable; (c) the event must
be such as to render it impossible for the debtor to fulfill his obligation in a normal
manner; and (d) the debtor must be free from any participation in, or aggravation of the
injury to the creditor.The shortage in supplies and cement may be characterized as
force majeure.In the present case, hardware stores did not have enough cement
available in their supplies or stocks at the time of the construction in the 1990s.
Likewise, typhoons, power failures and interruptions of water supply all clearly fall under
force majeure. Since LCDC could not possibly continue constructing the building under
the circumstances prevailing, it cannot be held liable for any delay that resulted from the
causes aforementioned.

GR No. 139982
November 21, 2002
FRANCISCO VS. HERRERA

FACTS:
Eligio Herrera, Sr., father of the respondent, was the owner of two parcels of land.
At two incidents on 1991, petitioner bought the two parcels of land for Php1,000,000.00
and PhP750,000.00. Contending that the purchase price was inadequate, the children
of Eligio, Sr., namely, Josefina Cavettany, Eligio Herrera, Jr., and respondent Pastor
Herrera tried to negotiate for an increase of the purchase price. When petitioner refused
respondents then filed a complaint for annulment of sale on the ground that at the time
of sale, Eligio Sr., was already afflicted with senile dementia, characterized by
deteriorating mental and physical condition including loss of memory. Both the RTC and
CA decided in favor of respondent.

ISSUE:
Is the disputed contract void and therefore unenforceable?

RULING OF THE COURT:

In the present case, it was established that the vendor Eligio, Sr., entered into an
agreement with petitioner, but that the formers capacity to consent was vitiated by
senile dementia. Hence, the assailed contracts are not void or inexistent per se; rather,
these are contracts that are valid and binding unless annulled through a proper action
filed in court seasonably.
An annullable contract may be rendered perfectly valid by ratification which can be
express or implied. Implied ratification may take the form of accepting and retaining the
benefit of a contract. This is what happened in this case. Respondent negotiated for the
increase of the purchase price while receiving the installment payments.
One cannot negotiate for an increase in the price in one breath and in the same
breath contend that the contract of sale is void.

G.R. No. 190601

February 7, 2011

SPOUSES LUIGI M. GUANIO and ANNA HERNANDEZ-GUANIO, Petitioners, vs.

MAKATI SHANGRI-LA HOTEL and RESORT, INC., also doing business under the name
of SHANGRI-LA HOTEL MANILA, Respondent.
FACTS:
Petitioner spouses, Luigi M. Guanio and Anna Hernandez-Guanio, booked respondent
Makati Shangri-La Hotel for their reception. However, during the wedding itself and even during
the initial food tasting they encountered bad service from the employees of the hotel. Due to that,
the Guanio spouses sent a letter-complaint to Makati Shangri-La wherein the latter responded
with an apology. Despite that, the Guanio spouses still filed a Complaint for breach of contract to
the Regional Trial Court of Makati City. The Guanio spouses contend that the apology is an
admission of the bad service the hotel has rendered to them. On the other hand, Makati ShangriLa denies it stating that their apology is a only standard followed by their employees to express
empathy in reference to the inconvenience experienced by their dissatisfied customers.
ISSUE:
Whether or not the apology made by Makati Shagri-La is considered an admission of
breach of contract.

RULING OF THE COURT:

What applies in the present case is Article 1170 of the Civil. RCPI v. Verchez, et al.
enlightens: In culpa contractual the mere proof of the existence of the contract and the failure of
its compliance justify, prima facie, a corresponding right of relief. The law, recognizing the
obligatory force of contracts, will not permit a party to be set free from liability for any kind of
misperformance of the contractual undertaking or a contravention of the tenor thereof. A breach
upon the contract confers upon the injured party a valid cause for recovering that which may
have been lost or suffered. The remedy serves to preserve the interests of the promissee that may
include his "expectation interest ," which is his interest in having the benefit of his bargain by
being put in as good a position as he would have been in had the contract been performed, or his
"reliance interest ," which is his interest in being reimbursed for loss caused by reliance on the
contract by being put in as good a position as he would have been in had the contract not been
made; or his "restitution interest," which is his interest in having restored to him any benefit that
he has conferred on the other party. The effect of every infraction is to create a new duty, that is,
to make RECOMPENSE to the one who has been injured by the failure of another to observe his
contractual obligation unless he can show extenuating circumstances, like proof of his exercise
of due diligence or of the attendance of fortuitous event, to excuse him from his ensuing
liability.The Court notes that Makati Shangri-La could have managed the situation" better, it
being held in high esteem in the hotel and service industry. Given its vast experience, it is safe to
presume that this is not its first encounter with booked events exceeding the guaranteed cover. It
is not audacious to expect that certain measures have been placed in case this predicament crops
up. That regardless of these measures, respondent still received complaints as in the present case,
does not amuse.

G.R. No. 15838

January 27, 2004
MANSUETO CUATON, petitioner,
vs. REBECCA SALUD and COURT OF APPEALS (Special Fourteenth Division),
FACTS:
Respondent Rebecca Salud, joined by her husband Rolando Salud, instituted a suit for
foreclosure of real estate mortgage with damages against petitioner Mansueto Cuaton and his
mother, Conchita Cuaton. The trial court rendered a decision declaring the mortgage constituted
on October 31, 1991 as void, because it was executed by Mansueto Cuaton in favor of Rebecca
Salud without expressly stating that he was merely acting as a representative of Conchita Cuaton,
in whose name the mortgaged lot was titled.
The Court of Appeals rendered the assailed decision affirming the judgment of the trial court.
ISSUE:
Whether the 8% and 10% monthly interest rates imposed on the one-million-peso loan
obligation of petitioner to respondent Rebecca Salud are valid.
RULING OF THE COURT:
Stipulations authorizing iniquitous or unconscionable interests are contrary to morals
(contra bonos mores), if not against the law. Under Article 1409 of the Civil Code, these

contracts are inexistent and void from the beginning. They cannot be ratified nor the right to set
up their illegality as a defense be waived.Moreover, the contention regarding the excessive
interest rates cannot be considered as an issue presented for the first time on appeal. The records
show that petitioner raised the validity of the 10% monthly interest in his answer filed with the
trial court. To deprive him of his right to assail the imposition of excessive interests would be to
sacrifice justice to technicality. Furthermore, an appellate court is clothed with ample authority to
review rulings even if they are not assigned as errors. This is especially so if the court finds that
their consideration is necessary in arriving at a just decision of the case before it. We have
consistently held that an unassigned error closely related to an error properly assigned, or upon
which a determination of the question raised by the error properly assigned is dependent, will be
considered by the appellate court notwithstanding the failure to assign it as an error. Since
respondents pointed out the matter of interest in their Appellants Brief before the Court of
Appeals, the fairness of the imposition thereof was opened to further evaluation. The Court
therefore is empowered to review the same.

G.R. No. 171312

February 4, 2008

SPS. LINO FRANCISCO & GUIA FRANCISCO, petitioners,

vs.
DEAC CONSTRUCTION, INC. and GEOMAR A. DADULA, respondents.
FACTS:
Spouses Francisco obtained the services of DEAC Construction, Inc. to construct a 3-storey
residential building with mezzanine and roof deck on their lot for a contract price of 3.5M. as
agreed upon, a downpayment of 2M should be paid upon signing of the construct of
construction, and the remaining balance of 1.5M was to be paid in two equal installments. To
undertake the said project, DEAC engaged the services of a sub-contractor, Vigor Construction
and Development Corporation, but allegedly without the spouses knowledge and consent.Even
prior to the execution of the contract, spouses Francisco had paid the downpayment. However,
the said construction commenced although DEAC had not yet obtained the necessary building
permit for the proposed construction and that the contractor deviated from the approved
plans.Spouses Francisco demanded DEAC to comply with the approved plan, otherwise, they
would be compelled to invoke legal remedies. Work stoppage was issued against Lino Francisco
pursuant to the previous Notice of Violations. The plaintiffs then file civil case for Rescission of
Contract and Damages against DEAC.

ISSUE:
Whether or not spouses Francisco may rescind the contract.

RULING OF THE COURT:

Article 1191 of the Civil Code provides that the power to rescind obligations is implied in
reciprocal ones, in case one of the obligors should not comply with what is incumbent upon him.
The rescission referred to in this article, more appropriately referred to a resolution, is not
predicated on injury to economic interests on the part of the party plaintiff, but of breach of faith
by the defendant which is violative of the reciprocity between the parties.Given the fact that the
construction in this case is already 75% complete, that trial court was correct in ordering partial
rescission of the portion of the construction. Equitable considerations justify rescission of the
portion of the obligation which has not been delivered.

G.R. No. 176841

June 29, 2010
ANTHONY ORDUA, DENNIS ORDUA, and ANTONITA ORDUA, Petitioners, vs.
EDUARDO J. FUENTEBELLA, MARCOS S. CID, BENJAMIN F. CID, BERNARD G.
BANTA, and ARMANDO GABRIEL, JR., Respondents.
FACTS:
The subject of this case is a residential lot located at Fairview Subdivision, Baguio City,
which was firstly registered under Amando Gabriel, Sr. Around1996, Gabriel, Sr. sold the subject
lot to Antonita Ordua but there was no executed formal deed. The price of the lot was payable
in installments andGabriel, Sr. accepted the set-up. Antonita and her sons have long been
residingin the lot since 1979 and even had a house constructed therein. They also paidreal
property taxes and declared the lot for tax purposes.After the death of Gabriel, Sr., his son and
one of the respondents Gabriel, Jr. continued to accept installment payments from Antonita. Then
he wrote a letter to her ordering her to fence off the lot and to construct a road on the adjacent
lot. However, despite the payments made by Antonita, Gabriel, Jr. sold the subject lot to Bernard
Banta without the knowledge of Antonita and the rest of petitioners. Banta then sold the subject
lot to Marcos Cid and Benjamin Cid. The Cids thereafter ceded the subject lot to Eduardo
Fuentebilla, Jr. Eduardo, through his lawyer, sent a letter to the residence of Gabriel, Jr. ordering
those living therein to vacate the lot or else ejectment would commence. When Antonita, et. al.
went directly to Gabriel, Jr.s house after receiving the letter, they were informed by the wife of
Gabriel, Jr., Teresita Gabriel that she filed an affidavit-complaint against her husband and the
Cids for falsification of public documents, because according to her, her signature was forged in
the deed of sale between Gabriel, Jr. and Banta. Teresita accompanied Antonita to file a
Complaint for Annulment of Sale, Title, Reconveyance with Damages andalong with this a
prayer to acquire ownership over the subject lot upon payment of their remaining balance.
ISSUE:

Whether or not the Statute of Frauds is applicable to partially executed contracts

RULING OF THE COURT:
Petition GRANTED.The Statute of Frauds expressed in Article 1403, par. (2), of the Civil
Code applies only to executory contracts. The Statute of Frauds, in context, provides that a
contract for the sale of real property or of an interest therein shall be unenforceable unless the
sale or some note or memorandum thereof is in writing and subscribed by the party or his agent.
However, where the verbal contract of sale has been partially executed through the partial
payments made by one party duly received by the vendor, as in the present case, the contract is
taken out of the scope of the Statute. Evidently, Gabriel, Jr. ,as his father earlier, had benefited
from the partial payments made by the petitioners. Thus, neither Gabriel Jr. nor the other
respondentssuccessive purchasers of subject lotscould plausibly set up the Statute of Frauds
to thwart petitioners efforts towards establishing their lawful right over the subject lot and
removing any cloud in their title. As it were, petitioners need only to pay the outstanding balance
of the purchase price and that would complete the execution of the oral sale.

G.R. No. 157493

February 5, 2007
RIZALINO, substituted by his heirs, JOSEFINA, ROLANDO and FERNANDO,
ERNESTO, LEONORA, BIBIANO, JR., LIBRADO and ENRIQUETA, all surnamed
OESMER, Petitioners, vs. PARAISO DEVELOPMENT CORPORATION, Respondent.
FACTS:
Petitioner Ernesto to meet with a certain Sotero Lee, President of respondent Paraiso
Development Corporation, at Otani Hotel in Manila. The said meeting was for the purpose of
brokering the sale of petitioners properties to respondent corporation.A Contract to Sell was
drafted. A check in the amount of P100,000.00, payable to Ernesto, was given as option money.
Sometime thereafter, Rizalino, Leonora, Bibiano, Jr., and Librado also signed the said Contract
to Sell. However, two of the brothers, Adolfo and Jesus, did not sign the document. However
petitioners informed respondent corporation about their intention to rescind the Contract to Sell
and to return the amount of Php 100,000.00. respondent did not respond to the aforesaid letter.
Petitioners, therefore, filed a complaint for Declaration of Nullity or for Annulment of Option
Agreement or Contract to Sell with damages.The RTC rendered its decision in favor to
respondent. CA affirmed the decision of RTC with modification.
ISSUE:
Whether ot not Contract to Sell is void considering that on of the heirs did not sign it as
to indicate its consent to be bound by its terms.
RULING:
It is well-settled that contracts are perfected by mere consent, upon the acceptance by the
offeree of the offer made by the offeror. From that moment, the parties are bound not only to the
fulfillment of what has been expressly stipulated but also to all the consequences which,
according to their nature, may be in keeping with good faith, usage and law. To produce a
contract, the acceptance must not qualify the terms of the offer. However, the acceptance may be
express or implied. For a contract to arise, the acceptance must be made known to the offeror.
Accordingly, the acceptance can be withdrawn or revoked before it is made known to the offeror.

In the case at bar, the Contract to Sell was perfected when the petitioners consented to the sale to
the respondent of their shares in the subject parcels of land by affixing their signatures on the
said contract. Such signatures show their acceptance of what has been stipulated in the Contract
to Sell and such acceptance was made known to respondent corporation when the duplicate copy
of the Contract to Sell was returned to the latter bearing petitioners signatures

G.R. No. 171379, 171419

January 10, 2011
Insurance Company/Far East Bank and Trust Company and Makati Insurance Company,
v. Jose Marques and Maxilite Technologies, Inc.,
FACTS:
Maxilite Technologies, Inc. is engaged in the importation and trade of equipments for
energy-efficiency systems. On the other hand, Far East Bank and Trust Co. (FEBTC) is a local
bank entrusted in the financing and requirements of Maxilite and Maxilites president Jose N.
Marques. Far East Bank Insurance Brokers, Inc. (FEBIBI) and Makati Insurance Company are
insurance companies which are subsidiaries of FEBTC. When Maxilite and Marques entered into
a trust receipt transaction with FEBTC for the shipping of high-technology equipment from the
United States, they put the merchandise as collateral. Then around August 1993, FEBIBI was
advised by FEBTC to initiate and manage the procurement and processing from Makati
Insurance Company of four separate and independent fire insurance policies over the subject
merchandise. Maxilite did their part by paying the premiums through debit arrangement and
FEBTC would debit the paid amount evidenced by the statement of accounts sent to Maxilite.
Maxilite suffered losses amounting to at least P 2.1million when a fire destroyed their office in
Cebu City. They filed claims against the fire insurance company with Makati Insurance
Company. However, it denied the fire loss claim putting up as a defense that they have not paid
their premium. FEBTC and FEBIBI stated they have no responsibility for the denial of the claim.
ISSUE:
Whether or not there was an estoppels when Maxilite and Marques were led to believe
and they in fact believed that the settlement of Maxilite's trust receipt account included the
payment of the insurance premium
RULING OF THE COURT:
Petition GRANTED.In estoppel, a party creating an appearance of fact, which is false, is
bound by that appearance as against another person who acted in good faith. Both trial and
appellate courts basically agree that FEBTC is stopped from claiming that the insurance
premium has been unpaid. That FEBTC induced Maxilite and Marques to believe that the
insurance premium has in fact been debited from Maxilites account is grounded on the the
following facts:FEBTC represented and committed to handle Maxilites financing and capital
requirements, including the related transactions such as the insurance of the trust receipted
merchandise; prior to the subject Insurance Policy No.1024439, the premiums for the three
separate fire insurance policies had been paid through automatic debit arrangement; FEBIBI sent
FEBTC, not Maxiliten or Marques, written reminders dated 19 October 1994, 24 January 1995,
and 6March 1995 to debit Maxilites account, establishing FEBTCs obligation to automatically
debit Maxilites account for the premium amount; there was no written demand from FEBTC or
Makati Insurance Company for Maxilite or Marques to pay the insurance premium; (5) the
subject insurance policy was released to Maxilite on 19 August 1994; and (6) the subject
insurance policy remained uncancelled despite the alleged non-payment of the premium, making
it appear that the insurance policy remained in force and binding.

G.R. NO. 83974

DEC 21, 2011

RONGAVILLA VS. COURT OF APPEALS

FACTS:
The Dela Cruz sisters were the aunts of Dolores Rongavilla. They borrowed P2,000 from
the Rongavillas to have their rooftop repaired. Later, petitioners went back to their aunts to have
them sign a contract. Taking advantage of their lack of education, the sisters were made to
believe that such document, typewritten in English, was just for the acknowledgment of their
debt. After four years, petitioners asked their aunts to vacate the land subject to litigation
claiming that she and her husband were the new owners. After verifying with the Registry of
Deeds, the aunts were surprised that what they have signed was actually a deed of sale. Their
land title was cancelled and the ownership was transferred to their nephews. The land was
mortgaged with the Cavite Development Bank.

ISSUE:
Whether or not the deed of sale is void.

RULING OF THE COURT:

The deed of sale is void. While petitioners claimed they were regularly paying taxes on
the land in question, they had no second thoughts stating at the trial and on appeal that they had
resorted to doctoring the price stated in the disputed Deed of Sale, allegedly to save on taxes.
While it is true that public documents are presumed genuine and regular under the Rules of
Court, this presumption is a rebuttable presumption which may be overcome by clear, strong and
convincing evidence.

G.R. No. 127540.

October 17, 2001
DOMINGO V. COURT OF APPEALS

FACTS:
Paulina Rigonan owned three parcels of land including the house and warehouse on one
parcel. She allegedly sold them to private respondents, the spouses Felipe and Concepcion
Rigonan, who claim to be her relatives. In 1966, petitioners who claim to be her closest
surviving relatives, allegedly took possession of the properties by means of stealth, force and
intimidation, and refused to vacate the same. According to defendants, the alleged deed of
absolute sale was void for being spurious as well as lacking consideration. They said that
Paulina Rigonan did not sell her properties to anyone. As her nearest surviving kin within the
fifth degree of consanguinity, they inherited the three lots and the permanent improvements
thereon when Paulina died. They said they had been in possession of the contested properties for
more than 10 years.
ISSUE:
1.) Whether or not the consideration in Deed of Sale can be used to impugn the validity of the
Contract of Sale.
2.) Whether or not the alleged Deed of Sale executed by Paulina Rigonan in favor of the private
respondents is valid.
RULING OF THE COURT:
1.) Consideration is the why of a contract, the essential reason which moves the contracting
parties to enter into the contract. The Court had seen no apparent and compelling reason for her
to sell the subject 9 parcels of land with a house and warehouse at a meager price of P850 only.
On record, there is unrebutted testimony that Paulina as landowner was financially well off. She
loaned money to several people. Undisputably, the P850.00 consideration for the nine (9) parcels
of land including the house and bodega is grossly and shockingly inadequate, and the sale is null
and void ab initio.
2.) The Court ruled in the negative. Private respondents presented only a carbon copy of this
deed. When the Register of Deeds was subpoenaed to produce the deed, no original typewritten
deed but only a carbon copy was presented to the trial court. None of the witnesses directly
testified to prove positively and convincingly Paulinas execution of the original deed of sale.
The carbon copy did not bear her signature, but only her alleged thumbprint. Juan Franco
testified during the direct examination that he was an instrumental witness to the deed. However,
when cross-examined and shown a copy of the subject deed, he retracted and said that said deed
of sale was not the document he signed as witness.

G.R. No. 159617

August 8, 2007

ROBERTO C. SICAM and AGENCIA de R.C. SICAM, INC., petitioners,

vs.
LULU V. JORGE and CESAR JORGE, respondents.
FACTS:
Lulu Jorge pawned several pieces of jewelry with Agencia de R.C. Sicam to secure a loan
in the amount of P59,500.00. It was alleged that two armed men entered the pawnshop and took
away whatever cash and jewelry found inside the pawnshop vault. It was reported to the police.
She sued for damages but Sicam interposed the defense of fortuitous event, alleging that there
was robbery. The SC brushed aside the contention and said: Robbery per se, just like carnapping,
is not a fortuitous event. It does not foreclose the possibility of negligence on his part.
ISSUE:
Whether or not a Robbery per se is a fortuitous event
RULING OF THE COURT:
It is not a defense for a repaid shop of motor vehicles to escape liability simply because
the damage or loss of a thing lawfully placed in its possession was due to carnapping.
Carnapping per se cannot be considered as a fortuitous event. The fact that a thing was
unlawfully and forcefully taken from anothers rightful possession, as in cases of carnapping,
does not automatically give rise to a fortuitous event. To be considered as such, carnapping
entails more than the mere forceful taking of anothers property. It must be proved and
established that the event was an act of God or was done solely by third parties and that neither
the claimant nor the person alleged to be negligent has any participation. In accordance with the
Rules of Evidence, the burden of proving that the loss was due to a fortuitous event rests on him
who invokes it which in this case is the private respondent. However, other than the police
report of the alleged carnapping incident, no other evidence was presented by private respondent
to the effect that the incident was not due to its fault. A police report of an alleged crime, to
which only private respondent is privy, does not suffice to establish the carnapping. Neither does
it prove that there was no fault on the party of private respondent notwithstanding the parties
agreement at the pre-trial that the car was carnapped. Carnapping does not foreclose the
possibility of fault or negligence on the part of private respondent. (Co. v. CA, 353 Phil. 305
(1998); Sicam, et al. v. Jorge, et al., G.R. No. 159617, August 8, 2007).
In another case, it was held that to be relieved from civil liability of returning the pendant
under Article 1174 of the Civil Code, it would only be sufficient that the unforeseen event, the
robbery, took place without any concurrent fault on the debtors part, and this can be done by
preponderance of evidence; that o be free from liability for reason of fortuitous event, the debtor
must, in addition to the case itself, be free from any concurrent or contributory fault or
negligence. (Sicam, et al. v. Jorge, et al., supra.).

G.R. No. 172577

January 19,2011
Soledad Dalton VS FGR Realty and Development Corp., Felix Ng, Nenita Ng, and Florita
Dayrit or Florita Regner
FACTS:

A parcel of land owned by respondent Flora R. Dayrit was leased to petitioners Dalton,et.
al. Eventually, the land was sold to respondent FGR Realty and Development Corporation. FGR
Realty and Dayrit decided not to accept payments from Dalton,et. al. for the purpose of
terminating the lease agreements. Dalton ,et. al. filed a complaint with the Regional Trial Court
and attached was a consignation of the rental payments. However, they failed to notify the other
party of such action. FGR Realty and Dayrit withdrew the consigned amount with reservation to
question the validity of the consignation.
ISSUE:
Whether or not the consignation made by Dalton,et. al.is void
RULING OF THE COURT:
Petition DENIED.Compliance with the requisites of a valid consignation is mandatory.
Failure to comply strictly with any of the requisites will render the consignation void. Substantial
compliance is not enough. The giving of notice to the persons interested in the performance of
the obligation is mandatory. Failure to notify the persons interested in the performance of the
obligation will render the consignation void. Under Art. 1257 of our Civil Code, in order that
consignation of the thing due may release the obligor, it must first be announced to the persons
interested in the fulfillment of the obligation. The consignation shall be in effectual if it is not
made strictly in consonance with the provisions which regulate payment.
In said Article 1258, it is further stated that the consignation having been made, the interested
party shall also be notified thereof.
We hold that the essential requisites of a valid consignation must be complied with fully and
strictly in accordance with the law, Articles 1256 to1261, New Civil Code. That these Articles
must be accorded a mandatory construction is clearly evident and plain from the very language
of the codal provisions themselves which require absolute compliance with the essential
requisites therein provided. Substantial compliance is not enough for that would render only a
directory construction to the law. The use of the words "shall" and "must" which are imperative,
operating to impose a duty which may be enforced, positively indicate that all the essential
requisites of a valid consignation must be complied with.

G.R. NO. 159617

August 8, 2007
ROBERTO C. SICAM and AGENCIA de R.C. SICAM, INC. versus LULU V. JORGE and
CESAR JORGE
FACTS:
On different dates from September to October 1987, Lulu V. Jorge pawned several pieces of
jewelry with Agencia de R. C. Sicam located at No. 17 Aguirre Ave., BF Homes Paraaque,

Metro Manila, to secure a loan in the total amount of P59, 500.00. On October 19, 1987, two
armed men entered the pawnshop and took away whatever cash and jewelry were found inside
the pawnshop vault. Petitioner Sicam sent respondent Lulu a letter dated October 19, 1987
informing her of the loss of her jewelry due to the robbery incident in the pawnshop. On
November 2, 1987, respondent Lulu then wrote a letter to petitioner Sicam expressing disbelief
stating that when the robbery happened, all jewelry pawned were deposited with Far East Bank
near the pawnshop since it had been the practice that before they could withdraw, advance notice
must be given to the pawnshop so it could withdraw the jewelry from the bank. Respondent Lulu
then requested petitioner Sicam to prepare the pawned jewelry for withdrawal on November 6,
1987 but petitioner Sicam failed to return the jewelry.On September 28, 1988, respondent Lulu
joined by her husband, Cesar Jorge, filed a complaint against petitioner Sicam with the Regional
Trial Court of Makati seeking indemnification for the loss of pawned jewelry and payment of
actual, moral and exemplary damages as well as attorney's fees. However, petitioner Sicam
contends that he is not the real party-in-interest as the pawnshop was incorporated on April 20,
1987 and known as Agencia de R.C. Sicam, Inc; that petitioner corporation had exercised due
care and diligence in the safekeeping of the articles pledged with it and could not be made liable
for an event that is fortuitous.
ISSUE:
Whether petitioners are liable for the loss of the pawned articles in their possession.
RULING OF THE COURT:
After trial ,the RTC rendered its Decision dismissing respondents complaint as well as
petitioners counterclaim. The RTC held that robbery is a fortuitous event which exempts the
victim from liability for the loss and under Art. 1174 of the Civil Code. It further held that the
corresponding diligence required of a pawnshop is that it should take steps to secure and protect
the pledged items and should take steps to insure itself against the loss of articles which are
entrusted to its custody as it derives earnings from the pawnshop trade which petitioners failed to
do and that robberies and hold-ups are foreseeable risks in that those engaged in the pawnshop
business are expected to foresee. Fortuitous events by definition are extraordinary events not
foreseeable or avoidable. It is therefore, not enough that the event should not have been foreseen
or anticipated, as is commonly believed but it must be one impossible to foresee or to avoid. The
mere difficulty to foresee the happening is not impossibility to foresee the same.

G.R. No. 152168

December 10, 2004

HEIRS OF THE LATE SPOUSES AURELIO AND ESPERANZA BALITE petitioners,

vs RODRIGO N. LIM, respondent.
FACTS:
The spouses Aurelio and Esperanza Balite the owners of the disputed land, located
at Nothern Samar.
Aurelio died intestate, Esperanza and their children became co-owners of the said
property. The said property remained undivided.

Esperanza became ill and decided to sell the property without informing the other
children of the said sale to Rodrigo Lim, only Antonio and Cristeta knew of the said sale.
ISSUE:
When the other children knew about it, Esperanza signed a letter addressed to
Rodrigo informing the latter that her children did not agree to the sale of the property to
him and that she was withdrawing all her commitments until the validity of the sale is
finally resolved.
Whether or not Deed of Absolute Sale is null and void.
RULING OF THE COURT:
In the present case, the parties intended to be bound by the Contract, even if it did not
reflect the actual purchase price of the property. That the parties intended the
agreement to produce legal effect is revealed by the letter of Esperanza Balite to
respondent dated October 23, 1996 and petitioners? admission that there was a partial
payment of P320,000 made on the basis of the Deed of Absolute Sale. There was an
intention to transfer the ownership of over 10,000 square meters of the property . Clear
from the letter is the fact that the objections of her children prompted Esperanza to
unilaterally withdraw from the transaction.
Since the Deed of Absolute Sale was merely relatively simulated, it remains valid and
enforceable. All the essential requisites prescribed by law for the validity and perfection
of contracts are present. However, the parties shall be bound by their real agreement for
a consideration of P1,000,000 as reflected in their Joint Affidavit.
The juridical nature of the Contract remained the same. What was concealed was
merely the actual price. Where the essential requisites are present and the simulation
refers only to the content or terms of the contract, the agreement is absolutely binding
and enforceable between the parties and their successors in interest.