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FTIvsDaway

THIRD DIVISION

[G.R. No. 157353. December 9, 2004]

FOOD TERMINAL, INC., petitioner, vs. HON. REYNALDO B. DAWAY, Presiding


Judge, Regional Trial Court, Branch 90, Quezon City and TAO
DEVELOPMENT, INC., respondents.

DECISION
GARCIA, J.:

Assailed and sought to be set aside in this petition for review on certiorari under Rule
45 of the Rules of Court are the following issuances of the Court of Appeals in its CA-G.R.
SP No. 45589, to wit:

1. Decision dated 28 June 2002[1], affirming an earlier Order of the Regional Trial Court at Quezon
City which granted the motion for execution thereat filed by herein private respondent against the
petitioner; and

2. Resolution dated 13 February 2003, denying petitioners motion for reconsideration of the first.

The factual milieu:


Sometime in early 1984, petitioner Food Terminal Inc. (FTI), a government-owned
corporation engaged in the business of providing warehousing and storage services to the
public for a fee, and private respondent Tao Development, Inc. (TAO), entered into a
contract of storage whereunder TAO deposited at FTIs cold storage export quality onions
consisting of 22,716 bags (approximately 567,900 kilos) of yellow granex onions and
2,853 bags (approximately 71,300 kilos) of red creole onions. Unfortunately, an ammonia
leak penetrated through FTIs storage facilities and caused damage to TAOs goods,
rendering the deposited onions unfit for export.
On November 3, 1998, in the Regional Trial Court of Quezon City, TAO instituted a
complaint for damages against FTI.
In a decision dated 16 December 1991, the trial court, finding FTI negligent in the
performance of its duties, rendered judgment in favor of TAO. Therefrom, FTI went on
appeal to the Court of Appeals. In a decision dated 28 April 1995, the appellate court
affirmed with modifications the appealed decision of the trial court, thus:

"WHEREFORE, in view of the foregoing, the decision appealed from is hereby AFFIRMED with
MODIFICATIONS. Accordingly, judgment is hereby rendered as follows:
a) Ordering the defendant Food Terminal, Inc. to pay appellee TAO Development, Inc. the amount of
P2,400,168.00 as actual damages representing the loss sustained by the appellee;
b) Ordering said appellant to pay said appellee the amount of P1,534,005.00 as unearned profits; and
c) Ordering said appellant to pay said appellee the amount of P100,000.00 as attorney's fees.
The above amounts shall earn interest at the rate of 12% per annum from May 15, 1984 until fully
satisfied.
No costs.
SO ORDERED.[2]

Undaunted, FTI sought further appellate recourse to this Court in G.R. No. 120097,
entitled Food Terminal, Inc. vs. Court of Appeals and Tao Development, Inc.[3] In
a Resolution dated 23 September 1996, this Court affirmed with modification the
challenged decision of the Court of Appeals:

ACCORDINGLY, the appealed decision is hereby AFFIRMED with the following modification:

a) Ordering petitioner Food Terminal, Inc. to pay private respondent TAO Development, Inc. the
amount of P2,400,168.00 as actual damages representing the loss sustained by the private
respondent;

b) Ordering petitioner to pay private respondent the amount of P1,534,005.00 as unearned profits;
and

c) Ordering petitioner to pay private respondent the amount of P100,000.00 as attorney's fees.

These amounts shall earn interest at the rate of SIX PER CENT (6%) per annum from May 15,
1984 until fully satisfied, but before judgment becomes final. From the date of finality of the
judgment until the obligation is totally paid, A TWELVE PER CENT (12%) interest, in lieu of the
SIX PER CENT (6%) interest, shall be imposed.

SO ORDERED.[4]

It is not disputed that the aforementioned Resolution of this Court in G.R. No.
120097 became final and executory on January 6, 1997 and a corresponding Entry of
Judgment made thereon.[5]
In a letter of February 12, 1997, TAO demanded from FTI payment in satisfaction of
the judgment in G.R. No. 120097 in the amount of P7,194,453.60, broken down, as
follows:
P2,400,168.00 - actual damages
1,534,005.00 - unearned profits
100,000.00 - attorneys fees
P4,034,173.00
3,063,282.03 - 6% interest from May 15, 1984 to Jan. 6, 1997
96,998.55 - 12% interest from Jan. 6, to Feb. 15, 1997
P7,194,453.60.[6]
In a reply letter of March 7, 1997,[7] FTI disagreed with TAOs foregoing computation
and informed the latter that per its (FTIs) own computation, its obligation is less by
P46,019.86 than that claimed by TAO. In effect, it is FTIs posture that its liability is only
for P7,148,433.72. Percentage wise, the variance is less than one percent or .64 percent.
A new phase of legal battle between the herein parties began when, on May 5, 1997,
TAO filed with the trial court a motion for execution, praying for the issuance of a writ of
execution against FTI for the total amount of P7,440,729.48.[8]
In an Order dated 27 May 1997,[9] the trial court, noting the absence of any opposition
from FTI, granted TAOs motion and accordingly ordered the issuance of the desired writ.
FTI filed a motion for reconsideration, contending that it was denied due process because
it allegedly did not receive any notice of hearing. [10] In its subsequent Order of 12 August
1997, the trial court denied the motion.[11]
Meanwhile, on August 22, 1997, FTI delivered to TAO a check for P7,148,433.72,
which check was admittedly encashed by TAO.
Thereafter, FTI filed with the Court of Appeals a petition for certiorari to nullify the trial
courts aforesaid orders. In its petition, docketed in said court as CA-G.R. SP NO. 45589,
FTI maintained that TAO had acceded to its computation, and presented, in support
thereof, an alleged letter dated March 13, 1997 of Alberto Malvar, president of TAO,
demanding payment for only P7,148,433.72.[12] On the basis of said letter and the fact that
TAO had encashed the FTI check for the same amount, FTI argued that it has satisfied
the judgment in G.R. No. 120097. Ergo, so it concludes, the writ of execution issued
against it by the trial court should be annulled and set aside.[13]
In the herein assailed Decision dated 28 June 2002 and Resolution dated 13
February 2003, the Court of Appeals respectively dismissed FTIs petition and denied its
motion for reconsideration, ruling, inter alia, that petitioner FTI failed to establish the
supposed accession of TAO to its computation, and holding that the letter dated March 13,
1997 of Alberto Malvar is a forgery.
Hence, FTIs present recourse on the following assigned errors:
I

THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR WHEN IT SUSTAINED


PUBLIC RESPONDENTS HOLDING THAT THE TOTAL OBLIGATION OF PETITIONER TO
PRIVATE RESPONDENT AS PER DECISION OF THE HONORABLE SUPREME COURT
DATED SEPTEMBER 23, 1996 EXCEEDS P7,148,433.72

II

THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN NOT HOLDING THAT


THE DELAY IN THE SATISFACTION OF THE JUDGMENT AWARD WAS CAUSED SOLELY
BY PRIVATE RESPONDENTS UNJUSTIFIED REFUSAL TO ACCEPT PETITIONERS
OFFER/TENDER OF PAYMENT.

III
THE COURT OF APPEALS COMMITTED SERIOUS ERROR IN NOT HOLDING THAT
PETITIONER IS NOT DELINQUENT IN ITS OBLIGATION AND THAT IT SHOULD BE
EXCUSED FROM PAYING THE NECESSARY INTEREST AFTER APRIL 2, 1997.

IV

THE COURT OF APPEALS COMMITTED SERIOUS ERROR IN NOT HOLDING THAT THE
JUDGMENT AWARD SOUGHT TO BE EXECUTED AGAINST PETITIONER, OR AT
LEAST P7,148,433.72 THEREOF, HAD LONG BEEN SETTLED. [14]

We dismiss.

Petitioner maintains that the motion for execution filed by TAO before the trial court
should have been denied by said court because it has satisfied the judgment award
in G.R. No. 120097. Elaborating thereon, petitioner claims that as early as April 2, 1997,
or fifteen (15) days prior to TAOs filing of the motion, it had already informed TAO that it
had computed the judgment award to be at only P7,148,433.72, an amount deemed
correct and acquiesced in by TAO. And since the latter had already encashed the check
issued by the petitioner for the same amount, its obligation in G.R. No. 120097 had thus
been complied with.
Simply put, the issue before us is whether or not petitioners payment of P7,148,433.72
had resulted into the extinguishment of its obligation to respondent under G.R. No.
120097.
Instructive on the issue thus formulated is Article 1248 of the Civil Code. It provides:

ART. 1248. Unless there is an express stipulation to that effect, the creditor cannot be compelled
partially to receive the prestations in which the obligation consists. Neither may the debtor be
required to make partial payments.

However, when the debt is in part liquidated and in part unliquidated, the creditor may demand and
the debtor may effect the payment of the former without waiting for the liquidation of the latter.

As borne by the records, petitioner FTI knew very well that respondent TAO was
demanding the sum of P7,194,453.60 as payment for its liability under this Courts
Resolution in G.R. No. 120097. Yet, despite such knowledge, petitioner proceeded to offer
a lesser amount. Under the aforequoted provision of the Civil Code, respondent TAO is
thus justified in its initial refusal to accept petitioners offer of only P7,148,433.72. We
cannot begrudge TAO for receiving the offered amount after it had filed its motion for
execution. As it were, FTIs offer of P7,148,433.72 opened an opportunity for TAO to
receive a huge portion of FTIs obligation to it. In any event, there was no showing that
respondent TAO has ever freed FTI from its obligation after receiving the partial payment.
What is more, it is too late in the day for petitioner to raise at this stage the issue of
whether or not respondent had acceded to its own computation of liability under G.R. No.
120097. It is a factual issue which this Court will not resolve, absent any compelling
reason therefor, of which we find none in this case. In any event, settled is the rule that
pure questions of fact may not be the proper subject of an appeal by certiorari under Rule
45.[15] For sure, even the conclusion of the Court of Appeals that the letter dated March 13,
1997 of TAOs president, Alberto Malvar, was a forgery may no longer be reexamined by
this Court.
WHEREFORE, this petition is DISMISSED and the impugned issuances of the Court
of Appeals AFFIRMED.
SO ORDERED.
Panganiban, (Chairman), Sandoval-Gutierrez and Carpio Morales, JJ., concur.
Corona, J., on leave
RepublicofthePhilippines
SUPREMECOURT
Manila

SECONDDIVISION

G.R.No.L52733 July23,1985

PILARDEGUZMAN,ROLANDOGESTUVO,andMINERVAGESTUVO,petitioners,
vs.
THE HON. COURT OF APPEALS, THE HON. JUDGE PEDRO JL. BAUTISTA, Presiding
JudgeoftheCourtofFirstInstanceofRizal,BranchIII,PasayCity,andLEONIDAP.SINGH,
respondents.

Barredo,Reyno&TomacruzLawOfficeforpetitioners.

AdrianoTBrunoforprivaterespondent.

CONCEPCION,JR.,J.:

Petitionforthereversalofthedecisionoftherespondentappealappellatecourtwhichdismissed
thepetitiontoannulandsetasidetheordersoftheCourtofFirstInstanceofRizal,PasayCity
Branch, dismissing the petitioners' appeal in Civil Case No. 5247 P and to restrain the
respondentsfromenforcingthesame.Actinguponthepetition,theCourtissuedatemporary
restrainingorderonMay16,1980,restrainingtherespondentsfromenforcingand/orcarrying
outthedecisioninquestion.1

ThefactsofrecordshowthatonFebruary17,1971,thepetitioners,asSELLER,andtheprivate
respondent,asBUYER,executedaContracttoSellcoveringtwo(2)parcelsoflandownedbythe
petitionerslocatedatCementinaStreet,PasayCityandcoveredbyTCTNos.11326and11327of
theRegisterofDeedsofPasayCity.Itwasstipulatedthereinthattheprivaterespondentshould
paythebalanceofthepurchasepriceofP133,640.00onorbeforeFebruary17,1975.Twodays
beforethesaiddate,oronFebruary15,1975,theprivaterespondentaskedthepetitionersto
furnishherwithastatement ofaccount ofthebalance due;copiesofthecertificatesoftitle
coveringthetwoparcelsoflandsubjectofthesale;andacopyofthepowerofattorneyexecuted
byRolandoGestuvoinfavorofPilardeGuzman.But,thepetitionersdeniedtherequest.Asa
result,theprivaterespondentfiledacomplaintforspecificperformancewithdamagesagainst
thepetitionersbeforetheCourtofFirstInstanceofRizal.Thecase,however,wasdismissedfor
failuretoprosecute.But,theprivaterespondentsubsequentlyrefiledthecase.Thecasewas
docketedincourtasCivilCaseNo.5247P.Inhercomplaint,theprivaterespondentcharged
that the petitioners, by refusing to furnish her with copies of the documents requested,
deliberatelyintendednottocomplywiththeirobligationsunderthecontracttosell,asaresultof
whichthesaidpetitionerscommittedabreachofcontract,andhadalsoactedunfairlyandin
manifestbadfaithforwhichtheyshouldbeheldliablefordamages.Answeringthecomplaint,
thepetitionersclaimedthatthecomplaintfailedtostateacauseofaction;thatthebalancedue
wasalreadypredeterminedinthecontract;thatthepetitionershavenoobligationtofurnishthe
privaterespondentwithcopiesofthedocumentsrequested;andthattheprivaterespondent's
failuretopaythebalanceofthepurchasepriceonthedatespecifiedhadcausedthecontractto
expireandbecomeineffectivewithoutnecessityofnoticeorofanyjudicialdeclarationtothat
effect.

OnNovember29,1977,thetrialcourtrenderedadecisionapprovingthecompromiseagreement
submittedbythepartieswhereintheyagreedonthefollowing:

1. That,notlaterthanDecember18,1977,plaintiffwillpaydefendantsthetotalamountof
TWOHUNDREDFORTYTHOUSAND(P240,000.00)PESOS,PhilippineCurrencyandincase
offailuretodoso,sheshallhaveonlyuntilJanuary27,1978withinwhichtopaythetotal
amountofTWOHUNDREDFIFTYTHOUSAND(P250,000.00)PESOS,PhilippineCurrency,
whichshallbetreatedascompleteandfinalpaymentoftheconsiderationinthecontracttosell,
datedFebruary17,1971.(Annex"A",Complaint);

2. That, immediately upon receipt ofeither amounts within theperiods socontemplated,


defendants undertake to immediately execute the necessary legal instruments to transfer to
plaintiffthetitletotheparcelsoflandsubjectoftheabovementionedContracttoSell,freefrom
liens and encumbrances but with the understanding that all the expenses necessary for the
issuance of a new Transfer Certificate of Title in favor of plaintiff or her assigns including
documentarystamptaxes,sciencestamptaxesandlegalresearchfundfeesshallbeforhersole
andexclusiveaccount;

3. Thatdefendantswouldtemporarilydesistfromenforcingtheirrightorpossessionoverthe
properties involved herein until January 27, 1978, but this shall not be construed as an
abandonmentorwaiverofitscausesofactionasembodiedinherComplaintinCivilCaseNo.
12446entitled"PilardeGuzmanvs.WilfredoC.Tan,etc."forEjectmentpendingbeforeBranch
IVofthePasayCityCourt;

4. Shouldplaintifffailtopayeitheroftheamountsabovestatedwithintheperiodherein
stipulated,theaforesaidContracttoSelldatedFebruary17,1971shallbedeemedrescindedand
defendantswouldimmediatelyenforceitsrightofpossessionofthepremisesandplaintiffagrees
tovoluntarilysurrenderandvacatethesamewithoutfurthernoticeordemand;

5. ThatpaymentofeitheramountsabovestatedshalltakeplacebeforetheHonorableJudge
PedroJl.BautistainthecourtroomoftheCourtofFirstInstanceofRizal,BranchIIIinPasay
Cityat10:00a.m.Friday,January27,1978unlesspaymenthasbeenearliermade,inwhich
caseplaintiffshallproducereceiptofthesameatthesametimeandplace,otherwisedefendants
shagimmediatelybeentitledtoaWritofExecutiononitsrightofpossessionoverthepremises;

6. Lastly,thatbothpartieswaiveandabandon,byreasonhereof,theirrespectiveclaimsand
counterclaimsasembodiedintheComplaintandAnswer.2
On January 28, 1978, the petitioners filed a motion for the issuance of a writ of execution,
claiming that the private respondent had failed to abide by the terms of the compromise
agreement and pay the amount specified in their compromise agreement within the period
stipulated.3Theprivaterespondentopposedthemotion,sayingthatshehadcompliedwiththe
termsandconditionsofthecompromiseagreementandaskedthecourttodirectthepetitioners
tocomplywiththecourt'sdecisionandexecutethenecessarydocumentstoeffectthetransferof
ownershipofthetwoparcelsoflandinquestiontoher.4

Actinguponthemotions,therespondentjudgeissuedanorderonMarch27,1978,denyingthe
petitioners'motionforexecution,andinstead,directedthepetitionerstoimmediatelyexecute
thenecessarydocuments,transferringtoprivaterespondentthetitletotheproperties.Healso
orderedtheClerkofCourttoreleasetothepetitionerstheamountofP250,000.00,whichhad
beendepositedbytheprivaterespondent,uponproperreceipttherefor.5

Thepetitionersfiledamotionforthereconsiderationoftheorder,6butthetrialcourtdeniedthe
sameinanorderdatedJuly24,1978.7

Whereupon,thepetitionersfiledanoticeofappeal,appealbond,8andamotionforextensionof
time(20days)withinwhichtosubmitarecordonappeal.9OnAugust21,1978,theyfileda
secondmotionforextensionoftime(5days)withinwhichtofiletheirrecordonappeal,10and
onAugust26,1978,theysubmittedtheirrecordonappeal.

On September 30, 1978, the private respondent filed a motion to dismiss the appeal on the
groundsthat:(1)theordersappealedfromareinappealable;and(2)thattherecordonappealis
defectiveasitdoesnotcontainthematerialdatashowingthattheappealwasperfectedontime.
11Thetrialcourtfoundmeritinthemotionanddismissedtheappealofthepetitioners.12Asa
result, the petitioners filed a petition for certiorari with the respondent Court of Appeals to
nullifytheorderofthetrialcourtwhichdismissedtheirappeal.OnFebruary5,1980,thesaid
appellate court rendered judgment sustaining the decision of the trial court. 13 Hence, the
presentrecourse.

Passingupontheproprietyofthepetitioners'appeal,theruleisthatajudgmentrenderedin
accordancewithacompromiseagreementisnotappealable.Itisimmediatelyexecutoryunlessa
motionisfiledtosetasidethecompromiseagreementonthegroundoffraud,mistakeorduress,
inwhichcaseanappealmaybetakenfromtheorderdenyingthemotion.14Itisalsoasettled
rulethatanorderofexecutionofjudgmentisnotappealable.However,wheresuchorderof
executionintheopinionofthedefeatedpartyvariesthetermsofthejudgmentanddoesnot
conformtotheessencethereof,orwhenthetermsofthejudgmentarenotclearandthereis
roomforinterpretationandtheinterpretationgivenbythetrialcourtascontainedinitsorderof
executioniswrongintheopinionofthedefeatedparty,thelattershouldbeallowedtoappeal
fromsaidordersothattheAppellateTribunalmaypassuponthelegalityandcorrectnessofthe
saidorder.15

Intheinstantcase,thelegalityorenforceabilityofthecompromiseagreementorthedecisionof
thetrialcourtapprovingthecompromiseagreementisnotdisputed.Thepartiesbothwantthe
saidcompromiseagreementtobeimplemented.Thepetitionersquestiontherulingofthetrial
courtthattheprivaterespondenthadcompliedwiththetermsofthecompromiseagreement.
Theissueraised,albeitoneoffact,isappealable.

As to the sufficiency of the record on appeal filed by the petitioners, the rule is that the
submissionofarecordonappeal,forpurposesofappeal,isnolongerrequiredastheoriginal
recordiselevatedtotheappellatecourt,exceptinappealsinspecialproceedingsinaccordance
withRule109oftheRulesofCourtandothercaseswhereinmultipleappealsareallowed.16
Since the appeal of the petitioners is not one of those mentioned above, the late filing or
insufficiencyoftherecordonappealfiledbythepetitionersisnolongeragroundfordismissing
theirappeal.

On the merits of the case, We agree with the findings of the trial court that the private
respondent had substantially complied with the terms and conditions of the compromise
agreement.HerfailuretodelivertothepetitionersthefullamountonJanuary27,1978wasnot
herfault.Theblamelieswiththepetitioners.Therecordshowsthattheprivaterespondentwent
tothesalaofJudgeBautistaontheappointeddaytomakepayment,asagreeduponintheir
compromiseagreement.But,thepetitionerswerenottheretoreceiveit.Onlythepetitioners'
counsel appearedlater,but,heinformedtheprivaterespondentthathehadnoauthorityto
receiveandacceptpayment.Instead,heinvitedtheprivaterespondentandhercompanionsto
thehouseofthepetitionerstoeffectpayment.But,thepetitionerswerenotthereeither.They
wereinformedthatthepetitionerPilardeGuzmanwouldarrivelateintheafternoon,possiblyat
around4:00o'clock.Theprivaterespondentwasassured,however,thatshewouldbeinformed
as soon as the petitioners arrived. The private respondent, in her eagerness to settle her
obligation,consentedandwaitedforthecallwhichdidnotcomeandunwittinglylettheperiod
lapse.Thenextday,January28,1978,theprivaterespondentwenttotheofficeoftheClerkof
theCourtofFirstInstanceofRizal,PasayCityBranch,todepositthebalanceofthepurchase
price.But,itbeingaSaturday,thecashierwasnottheretoreceiveit.So,onthenextworking
day,Monday,January30,1978,theprivaterespondentdepositedtheamountofP30,000.00with
thecashieroftheOfficeoftheClerkoftheCourtofFirstInstanceofRizal,PasayCityBranch,to
completethepaymentofthepurchasepriceofP250,000.00.Sincethedepositofthebalanceof
thepurchasepricewasmadeingoodfaithandthatthefailureoftheprivaterespondentto
depositthepurchasepriceonthedatespecifiedwasduetothepetitionerswhoalsomakeno
claimthattheyhadsustaineddamagesbecauseofthetwodaysdelay,therewassubstantial
compliancewiththetermsandconditionsofthecompromiseagreement.

WHEREFORE,thepetitionshouldbe,asitisherebyDISMISSED.Thetemporaryrestraining
orderheretoforeissuedisLIFTEDandSETASIDE.Withcostsagainstthepetitioners.

SOORDERED.

Makasiar(Chairman),AbadSantos,EscolinandCuevas,JJ.,concur.

SeparateOpinions

AQUINO,J.,dissenting:

Idissent.OnNovember29,1977thetrialcourtrenderedadecisionapprovingacompromise
betweenPilardeGuzman,RolandoGestuvoandMinervaGestuvo,assellers,andLeonidaP.
Singh,buyer.SinghagreedtopaydeGuzmanandtheGestuvos,nowpetitioners,P250,000for
twolotslocatedatCementinaStreet,PasayCityatteno'clockinthemorningofJanuary27,
1978inthecourtroomofJudgeBautistaofPasayCity.Incasenopaymentwasmade,thenthe
petitionerswouldbeimmediatelyentitledtoawritofexecutionforthepossessionofthesaid
lots.

Singh did not pay the P250,000. Ben Restrivera, in behalf of Singh, on January 24, 1978
depositedP220,000withtheclerkofcourt.RestriveraonJanuary27,1978triedtodeliverto
Antonio G. Barredo, petitioners' counsel, P5,000 cash and P25,000 in postdated checks, or
P30,000tocompletethepriceofP250,000.Barredorefusedtoacceptthatpayment.OnJanuary
30,1978(3daysafterthedeadline)SinghdepositedwiththeclerkofcourtcashofP30,000.

Onthatsameday,January30,thepetitionersfiledamotionforexecution.Itwasopposedby
Singh. Judge Bautista in his order of March 27, 1978 denied the motion and ordered the
petitionerstoexecutethecorrespondingdeedofsale.Heorderedtheclerkofcourttoreleasethe
P250,000tothem.

Thepetitionersfiledamotionforreconsiderationwhichthetrialcourtdeniedinanorderdated
July24,1978,acopyofwhichwasreceivedbythepetitionersonJuly31,1978.Thenextday,
August1,thepetitionersfiledanoticeofappealandanappealbondandaskedforanextension
oftwentydayswithinwhichtofiletheirrecordonappeal.Theyaskedforasecondextensionof
fivedays.TherecordonappealwasfiledonAugust26,1978.

The trial court did not give due course to the appeal. The petitioners filed a petition for
mandamuswiththeCourtofAppealstocompelthetrialcourttoelevatetheirappeal.TheCourt
of Appeals in its decision dated February 5, 1980 sustained the trial court. The petitioners
appealedtothisCourt.

Thetrialcourterredinorderingthepetitionerstoexecutethedeedofsale.Singhdidnotcomply
with the compromise agreement. She did not pay the P250,000 on January 27, 1978. The
petitionerswereentitledtoawritofexecution

Theappealshouldhavebeengivenduecourse.Itwasfiledontime.Thetechnicalitythatthe
petitionersdidnotcomplywiththe"materialdata"rulemaybedisregarded.Thatrulehasbeen
relaxedinlatercases.SeeBerkenkottervs.CourtofAppeals,L36629,September28,1973,53
SCRA228andlatercases.
Instead of ordering the Pasay court to elevate the record of the case to the Intermediate
AppellateCourt,weshouldnowresolvethecaseorthemeritsoftheappeal.

ItisindubitablethatSinghviolatedthecompromiseagreement.Shelosttherighttopurchase
thetwolots.Thepetitionersareentitledtopossessthem.

36.TELENGTANBROTHERSandSONSvs.UNITEDSTATESLINES
G.R.No.132284
February28,2006

FACTS:PetitionerisadomesticcorporationwhileUSLinesisaforeigncorporationengagedin
overseas shipping. It was made applicable that consignees who fail to take delivery of their
containerizedcargowithinthe10dayfreeperiodareliabletopaydemurragecharges.OnJune
22,1981,USLinesfiledasuitagainstpetitionerseekingpaymentofdemurragechargesplus
interest and damages. Petitioner incurred P94,000 which the latter refused to pay despite
repeateddemands.Petitionerdisclaimsliabilityallegingthatithasneverenteredintoacontract
norsignedanagreementtobeboundbyit.RTCruledthatpetitionerisliabletorespondentand
allbecomputedasofthedateofpaymentinaccordancewithArticle1250oftheCivilCode.CA
affirmedthedecision.

ISSUE:WhethertherecomputationofthejudgmentawardinaccordancewithArticle1250of
theCivilCodeproper

RULING:TheSupremeCourtfoundaserroneousthetrialcourtsdecisionasaffirmedythe
CourtofAppeals.TheCourtholdsthattherehasbeenanextraordinaryinflationwithinthe
meaningofArticle1250oftheCivilCode.Thereisnoreasonfororderingthepaymentofan
obligationinanamount differentfromwhathasbeenagreeduponbecauseofthepurported
superventionofanextraordinaryinflation.

Theassaileddecisionisaffirmedwithmodificationthattheorderforrecomputationasofthe
dateofpaymentinaccordancewiththeprovisionsofArticle1250ofNewCivilCodeisdeleted.

37.FILIPINOPIPEvs.NAWASA
G.R.No.L43446May3,1988

FACTS:NAWASAenteredintoacontractwiththeplaintiffFPFCforthelattertosupplyiron
pressurepipesworthP270,187.50tobeusedintheconstructionoftheAnonoyWaterworksin
Masbate and the Barrio San AndresVillareal Waterworks in Samar. NAWASA paid in
installmentsonvariousdates,atotalofP134,680.00leavingabalanceofP135,507.50excluding
interest. FPFC demanded payment from NAWASA of the unpaid balance of the price with
interestinaccordancewiththetermsoftheircontractNAWASAfailedtopay,plaintifffileda
collectionsuit.RTCrenderedjudgmentorderedNAWASAtopaytheunpaidbalanceinNAWASA
negotiablebonds.NAWASAdidnotdeliverthebondstothejudgmentcreditor
FPFCfiledanothercomplaintseekinganadjustmentoftheunpaidbalanceinaccordancewith
thevalueofthePhilippinepeso.FPFCpresentedvoluminousrecordsandstatisticsshowingthat
aspirallinginflationhasmarkedtheprogressofthecountryfrom1962uptothepresent.There
isnodenyingthatthepriceindexofcommodities,whichistheusualevidenceofthevalueofthe
currencyhasbeenrising.
ISSUE:W/Nthereexistsanextraordinaryinflationofthecurrencyjustifyinganadjustmentof
NAWASA'sunpaidjudgmentobligationtoFPFC.

RULING:Article1250oftheCivilCodeprovides:
Incaseanextraordinaryinflationordeflationofthecurrencystipulatedshouldsupervene,the
valueofthecurrencyatthetimeoftheestablishmentoftheobligationshallbethebasisof
payment,unlessthereisanagreementtothecontrary..
Extraordinaryinflationexists"whenthereisadecreaseorincreaseinthepurchasingpowerof
thePhilippinecurrencywhichisunusualorbeyondthecommonfluctuationinthevaluesaid
currency,andsuchdecreaseorincreasecouldnothavereasonablyforeseenorwasmanifestly
beyond contemplation the the parties at the time of the establishment of the obligation.
(TolentinoCommentariesandJurisprudenceontheCivilCodeVol.IV,p.284.)
Whileappellant'svoluminousrecordsandstatisticsprovedthattherehasbeenadeclineinthe
purchasingpowerofthePhilippinepeso,thisdownwardfallofthecurrencycannotbeconsidered
"extraordinary."Itissimplyauniversaltrendthathasnotsparedourcountry.

38.HABUVCA(CANNOTBEFOUND)

39.Serravs.CourtofAppeals,andRCBC
229SCRA60
January1994

FACTS:PetitionerFedericoSerra,whoistheownerofa374squaremeterparceloflandlocated
atMasbate,Masbate,andprivaterespondentRizalCommercialBankingCorporation(RCBC)
enteredintoa"ContractofLeasewithOptiontoBuy"inMay25,1975whichprovidedthatSerra
willleasethesubjectlandtoRCBCforaperiodof25yearsfromJune1,1975toJune1,2000,
thattheRCBChastheoptiontopurchasethesameatP210.00persquaremeterwithinaperiod
of10yearsfromMay25,1975,thedateofthesigningoftheContract,andthatSerrawillhave
toregistersaidlandundertheTorrensSystemtotheRegisterofDeedsofProvinceofMasbate
within the same 10year option period. Pursuant to said contract, RCBC constructed
improvements on the subject land to house its branch office, while the petitioner had the
property, within 3 years from 1975, duly registered with OCT No. 0232 under the Torrens
System.Later,petitionerallegedthatas soonas hehadthepropertyregistered,hekepton
pursuingthebranchmanagerforthesaleofthelotaspertheiragreement,butitwasnotuntil
September4,1984,thatRCBCdecidedtoexercisetheoption.

RCBCinformedpetitioner,throughaletter,ofitsintentiontobuythepropertyattheagreed
priceofnotgreaterthanP210.00persquaremeteroratotalofP78,430.00,butpetitionerreplied
thatheisnolongersellingtheproperty.RCBCthenfiledanactionforspecificperformanceand
damagesagainstSerrainMarch1985allegingthatduringthenegotiationsitmadeclearto
petitionerthatitintendstostaypermanentlyonpropertyonceitsbranchofficeisopenedunless
theexigenciesofthebusinessrequiresotherwise.

Althoughfindingthatthecontractwasvalid,thelowercourtruledthattheoptiontobuyis
unenforceable because it lacked a consideration distinct from the price and RCBC did not
exerciseitsoptionwithinthereasonabletime.Uponmotionforreconsideration,however,the
lowercourtreverseditselfonthe2ndissue,declaredthecontractasvalid,andorderedSerrato
delivertheproperdeedofsaletoRCBC.TheCourtofAppealslikewiseaffirmedsaiddecision.

ISSUE:Wasthereavalidcontractofleasewithoptiontobuybetweentheparties?Wastherea
considerationdistinctfromthepricetosupporttheoptiongiventoRCBC?

COURT RULING: The Supreme Court affirmed the appellate courts decision. A contract of
adhesionisonewhereinaparty,usuallyacorporation,preparesthestipulationsinthecontract,
while the other party merely affixes his signature or his "adhesion" thereto. These types of
contractsareasbindingasordinarycontractsbecauseinreality,thepartywhoadherestothe
contractisfreetorejectitentirely.

In the case at bar, the Supreme Court did not find the situation to be inequitable because
petitionerisahighlyeducatedman,who,atthetimeofthetrialwasalreadyaCPALawyer,and
whenheenteredintothecontract,wasalreadyaCPA,holdingarespectablepositionwiththe
MetropolitanManilaCommission.Itisevidentthatamanofhisstatureshouldhavebeenmore
cautiousintransactionsheentersinto,particularlywhereitconcernsvaluableproperties.Also,
inthepresentcase,theconsiderationisevenmoreonerousonthepartofthelesseesinceit
entailstransferringofthebuildingand/orimprovementsonthepropertytopetitioner,should
respondentbankfailtoexerciseitsoptionwithintheperiodstipulated.

40.CommissionerofPublicHighways,petitioner,vs.Hon.FranciscoP.Burgos,inhiscapacityas
JudgeoftheCourtofFirstInstanceofCebuCity,BranchII,andVictorAmigable,respondents.

March31,1980

DeCastro,J:
Facts:On1924,thegovernmenttookprivaterespondentVictorAmigable'slandforroadrightof
waypurpose.
On1959,AmigablefiledintheCourtofFirstInstanceacomplainttorecovertheownershipand
possession of the land and for damages for the alleged illegal occupation of the land by the
government(entitledVictorAmigablevs.NicolasCuenco,inhiscapacityasCommissionerof
PublicHighwaysandRepublicofthePhilippines).
Amigable'scomplaintwasdismissedonthegroundsthatthelandwaseitherdonatedorsoldby
itsownerstoenhanceitsvalue,andthatinanycase,therightoftheownertorecoverthevalue
ofsaidpropertywasalreadybarredbyestoppelandthestatuteoflimitations.Also,thenon
suabilityofthegovernmentwasinvoked.
Inthehearing,thegovernmentprovedthatthepriceofthepropertyatthetimeoftakingwas
P2.37persquaremeter.Amigable,ontheotherhand,presentedanewspapershowingthatthe
pricewasP6.775.
The public respondent Judge ruled in favor of Amigable and directed the Republic of the
Philippines to pay Amigable the value of the property taken with interest at 6% and the
attorney'sfees.

Issue: Whether or not the provision of Article 1250 of the New Civil Code is applicable in
determining the amount of compensation to be paid to private respondent Amigable for the
propertytaken.

Held:Notapplicable.Article1250oftheNCCprovidesthatthevalueofcurrencyatthetimeof
theestablishmentoftheobligationshallbethebasisofpaymentwhichwouldbethevalueof
pesoatthetimeoftakingofthepropertywhentheobligationofthegovernmenttopayarises.It
isonlywhenthereisanagreementthattheinflationwillmakethevalueofcurrencyatthetime
ofpayment,notatthetimeoftheestablishment,thebasisforpayment.
The correct amount of compensation would be P14,615.79 at P2.37 per square meter, not
P49,459.34,andtheinterestinthesumofP145,410.44attherateof6%from1924uptothe
timerespondentcourtrendereditsdecisionaswasawardedbythesaidcourtshouldaccordingly
bereduced.

41.VELASCOvs.MANILAELECTRICCO.Nuisance

Noisemayconstituteanuisancebutitmustbeofsuchcharacterastoproduceactualphysical
discomfortandannoyancetoapersonofordinarysensibilities.

FACTS: Velasco bought three (3) adjoining lots. He sold two (2) of these to Meralco and
maintainedthelastoneashisresidence.Meralcoconstructedontheirlotsasubstationata
distanceof1020metersawayfromappellantshouse.Thecompanyalsobuiltaconcretewallat
thesidesalongthestreetsbutputuponlyaninterlinkwirefence(previouslyasawaliwall)on
the boundary with appellant. An unceasing sound emanates from the substation, caused by
transformers.Such,appellentcontends,constituteanuisancewhichhasworsenedhishealth
condition and has lowered the value of his property. Several witnesses came forth but their
testimonieswerevagueandimprecise.Resortwasmadetoasoundlevelmeter.Theaudible
soundfromdifferentareasinVelasospropertywasmeasuredintermsofdecibels.Itwasfound
thatthesoundexceededtheaverageintensitylevelsofresidences.

ISSUE:Cantherebeanuisancecausedbynoiseorsound?

HELD:Yes.SeveralAmericandecisionsarecitedshowingthatnoiseisanactionablenuisance.
In fact, Kentucky v. Anderson dealt with noise emanating from electrical machinery and
appliances.Thedeterminingfactor,however,isnotjustintensityorvolume.Itmustbeofsuch
character as to produce actual physical discomfort and annoyance to a person of ordinary
sensibilities. However, appellants testimony is too plainly biased. Nor are the witnesses
testimoniesrevealingonaccountofdifferentperceptions.Consequently,soundlevelmeterswere
used.Asstatedabove,thesoundexceedsaverageresidentialdecibels.Also,thetestimoniesof
appellants physicians (which were more reliable since they actually treated him, unlike the
appellees)point to thenoiseas having caused appellant lossofsleep, irritationand tension
weakening his constitution. Notable lastly is the fact that in the Kentucky case, where the
nuisance was ordered abated, the average reading was 44 decibels while in the instant, the
readingsinclude52,54,and55.Thedecisiongoesontodiscusstheproperawardofdamages.
ButMeralcowasorderedeithertotransferthefacilitiesorreducetheproducedsoundtoaround.

42.ST.PAULFIRE&MARINEINSURANCECO.,plaintiffappellant,
vs.
MACONDRAY&CO.,INC.,BARBERSTEAMSHIPLINES,INC.,

FACTS;OnAugust7,1960,theSS"TaiPing"arrivedatthePortofManilaanddischargedits
aforesaidshipmentintothecustodyofManilaPortService,thearrastrecontractorforthePortof
Manila.Thesaidshipmentwasdischargedcompleteandingoodorderwiththeexceptionofone
(1)drumandseveralcartonswhichwereinbadordercondition.Becauseconsigneefailedto
receive the whole shipment and as several cartons of medicine were received in bad order
condition,theconsigneefiledthecorrespondingclaimintheamountofFl,109.67representing
the C.I.F. value of the damaged drum and cartons of medicine with the carrier, herein
defendantsappelleesandtheManilaPortService.However,bothrefusedtopaysuchclaim.
consequently,theconsigneefileditsclaimwiththeinsurer,St.PaulFire&Marineinsurance
Co.andtheinsurancecompany,onthebasisofsuchclaim,paidtotheconsigneetheinsured
valueofthelostanddamagedgoods,includingotherexpensesinconnectiontherewith,inthe
totalamountof$1,134.46U.S.currency.
OnAugust5,1961,assubrogeeoftherightsoftheshipperand/orconsignee,theinsurer,St.
PaulFire&MarineInsuranceCo.,institutedwiththeCourtofFirstInstanceofManilathe
presentaction2againstthedefendantsfortherecoveryofsaidamountof$1,134.46,pluscosts.
OnAugust23,1961,thedefendantsManilaPortServiceandManilaRailroadCompanyresisted
theaction,contending,amongothers,thatthewholecargowasdeliveredtotheconsigneeinthe
sameconditioninwhichitwasreceivedfromthecarryingvessel;thattheirrights,dutiesand
obligationsasarrastrecontractoratthePortofManilaaregovernedbyandsubjecttotheterms,
conditions and limitations contained in the Management Contract between the Bureau of
CustomsandManilaPortService,andtheirliabilityislimitedtotheinvoicevalueofthegoods,
but in no case more than P500.00 per package, pursuant to paragraph 15 of the said
ManagementContract;andthattheyarenottheagentsofthecarryingvesselinthereceiptand
deliveryofcargoesinthePortofManila.
OnSeptember7,1961,thedefendantsMacondray&Co.,Inc.,BarberSteamshipLines,Inc.and
WilhelmWilhelmsenalsocontestedtheclaimalleging,amongothers,thatthecarrier'sliability
fortheshipmentceasedupondischargethereoffromtheship'stackle;thattheyandtheirco
defendantManilaPortServicearenottheagentsofthevessel;thatthesaid218packageswere
dischargedfromthevesselSS"TaiPing"intothecustodyofdefendantManilaPortServiceas
operatorofthearrastreserviceforthePortofManila;thatifanydamagewassustainedbythe
shipmentwhileitwasunderthecontrolofthevessel,suchdamagewascausedbyinsufficiency
ofpacking,forcemajeureand/orperilsofthesea;andthatthey,ingoodfaithandforthepurpose
only of avoiding litigation without admitting liability to the consignee, offered to settle the
latter'sclaiminfullbypayingtheC.I.F.valueof27lbs.caramel4.13kilosmethylsalicylateand
12piecespharmaceuticalvialsoftheshipment,buttheirofferwasdeclinedbytheconsignee
and/ortheplaintiff.
After due trial, the lower court, on March 10, 1965 rendered judgment ordering defendants
Macondray&Co.,Inc.,BarberSteamshipLines,Inc.andWilhelmWilhelmsentopaytothe
plaintiff,jointlyandseverally,thesumofP300.00,withlegalinterestthereonfromthefilingof
the complaint until fully paid, and defendants Manila Railroad Company and Manila Port
Servicetopaytoplaintiff,jointlyandseverally,thesumofP809.67,withlegalinterestthereon
fromthefilingofthecomplaintuntilfullypaid,thecoststobebornebyallthesaiddefendants.3
OnApril12,1965,plaintiff,contendingthatitshouldrecovertheamountof$1,134.46,orits
equivalentinpesosattherateofP3.90,insteadofP2.00,foreveryUS$1.00,filedamotionfor
reconsideration, but this was deniedby thelower court onMay 5,1965. Hence, the present
appeal.
Plaintiffappellantarguesthat,assubrogeeoftheconsignee,itshouldbeentitledtorecoverfrom
thedefendantsappelleestheamountof$1,134.46whichitactuallypaidtotheconsigneeand
which represents the value of the lost and damaged shipment as well as other legitimate
expensessuchasthedutiesandcostofsurveyofsaidshipment,andthattheexchangerateon
thedateofthejudgment,whichwasP3.90foreveryUS$1.00,shouldhavebeenappliedbythe
lowercourt.

ISSUE:Isthecontentionproper?

RULING:Theappealiswithoutmerit.Thepurposeofthebillofladingistoprovideforthe
rightsandliabilitiesofthepartiesinreferencetothecontracttocarry.6\Thestipulationinthe
billofladinglimitingthecommoncarrier'sliabilitytothevalueofthegoodsappearinginthe
bill,unlesstheshipperorownerdeclaresagreatervalue,isvalidandbinding.7Thislimitation
ofthecarrier'sliabilityissanctionedbythefreedomofthecontractingpartiestoestablishsuch
stipulations,clauses,terms,orconditionsastheymaydeemconvenient,providedtheyarenot
contrarytolaw,morals,goodcustomsandpublicpolicy.8Astipulationfixingorlimitingthe
sumthatmayberecoveredfromthecarrieronthelossordeteriorationofthegoodsisvalid,
provideditis(a)reasonableandjustunderthecircumstances,9and(b)hasbeenfairlyand
freelyagreedupon.10Inthecaseatbar,theliabilitiesofthedefendantsappelleeswithrespect
tothelostordamagedshipmentsareexpresslylimitedtotheC.I.F.valueofthegoodsasper
contractofseacarriageembodiedinthebilloflading,whichreads:
Wheneverthevalueofthegoodsislessthan$500perpackageorotherfreightunit,theirvalue
inthecalculationandadjustmentofclaimsforwhichtheCarriermaybeliableshallforthe
purposeofavoidinguncertaintiesanddifficultiesinfixingvaluebedeemedtobetheinvoice
value,plusfrieghtandinsuranceifpaid,irrespectiveofwhetheranyothervalueisgreateror
less.
Thelimitationofliabilityandotherprovisionshereinshallinurenotonlytothebenefitofthe
carrier,itsagents,servantsandemployees,butalsotothebenefitofanyindependentcontractor
performingservicesincludingstevedoringinconnectionwiththegoodscoveredhereunder.Itis
notpretendedthatthoseconditionsareunreasonableorwerenotfreelyandfairlyagreedupon.
Theshipperandconsigneeare,therefore,boundbysuchstipulationssinceitisexpresslystated
inthebillofladingthatin"acceptingthisBillofLading,theshipper,ownerandconsigneeofthe
goods,andtheholderoftheBillofLadingagreetobeboundbyallitsstipulations,exceptions
andconditions,whetherwritten,stampedorprinted,asfullyasiftheywereallsignedbysuch
shipper,owner,consigneeorholder.Itisobviouslyforthisreasonthattheconsigneefiledits
claimagainstthedefendantsappelleesonthebasisoftheC.I.F.valueofthelostordamaged
goodsintheaggregateamountofPl,109.67
Theplaintiffappellant,asinsurer,afterpayingtheclaimoftheinsuredfordamagesunderthe
insurance,issubrogatedmerelytotherightsoftheassured.Assubrogee,itcanrecoveronlythe
amountthatisrecoverablebythelatter.Sincetherightoftheassured,incaseoflossordamage
tothegoods,islimitedorrestrictedbytheprovisionsinthebilloflading,asuitbytheinsureras
subrogeenecessarilyissubjecttolikelimitationsandrestrictions.
Theinsurerafterpayingtheclaimoftheinsuredfordamagesundertheinsuranceissubrogated
merelytotherightsoftheinsuredandthereforecannecessarilyrecoveronlythattowhatwas
recoverablebytheinsured.
Uponpaymentforatotallossofgoodsinsured,theinsuranceisonlysubrogatedtosuchrightsof
actionastheassuredhasagainst3rdpersonswhocausedorareresponsiblefortheloss.The
right ofactionagainstanotherperson,theequitableinterestinwhich passestotheinsurer,
beingonlythatwhichtheassuredhas,itfollowsthatiftheassuredhasnosuchrightofaction,
nonepassestotheinsurer,andiftheassured'srightofactionislimitedorrestrictedbylawful
contractbetweenhimandthepersonsoughttobemaderesponsiblefortheloss,asuitbythe
insurer,intheTightoftheassured,issubjecttolikelimitationsorrestrictions.

Equally untenable is the contention of the plaintiffappellant that because of extraordinary


inflation,itshouldbereimbursedforitsdollarpaymentsattherateofexchangeonthedateof
thejudgmentandnotonthedateofthelossordamage.Theobligationofthecarriertopayfor
thedamagecommencedonthedateitfailedtodelivertheshipmentingoodconditiontothe
consignee.
TheC.I.F.Manilavalueofthegoodswhichwerelostordamaged,accordingtotheclaimofthe
consignee dated September 26, 1960 is $226.37 and $324.33 or P456.14 and P653.53,
respectively,inPhilippineCurrency.Thepesoequivalentwasbasedbytheconsigneeonthe
exchangerateofP2.015to$1.00whichwastherateexistingatthattime.Wefind,therefore,
thatthetrialcourtcommittednoerrorinadoptingtheaforesaidrateofexchange.

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