A condition which cannot be complied with except after giving effect to the donation is not a condition

precedent.

FACTS:

In 1910, Concepcion Cirer and James Hill donated parcels of land to the municipality of Tarlac on the
condition that it be used absolutely and exclusively for the erection of a central school and public parks,
the work to commence within six months. The president of the municipality of Tarlac accepted and
registered the donation.

In 1921, Cirer and Hill sold the same property to George L. Parks.

Later on the, the municipality of Tarlac transferred their rights in the property to the Province of Tarlac.

Parks filed a complaint seeking the annulment of the donation and asking that he be declared the
absolute owner of the property. Parks allege that the conditions of the donation were not complied
with.

ISSUE:

Whether or not the donation was coupled with a condition precedent? W/N the action to revoke has
prescribed?

HELD:

No. The condition to erect a school within six months is not a condition precedent. The characteristic of
a condition precedent is that the acquisiito of the right is not effected while said condition is mot
complied with or is not deemed complied with. Meanwhile nothing is acquired and there is only an
expectancy of a right. Consequently, when a condition is imposed, the compliance of which cannot be
effected except when the right is deemed acquired, such condition cannot be a condition precedent. In
the present case the condition that a public school be erected and a public park be made of the donated
land could not be complied with except after giving effect to the donation.

The action to revoke the donation has prescribed. The prescriptive periods are: 5 years for the
revocation by the subsequent birth of children, 1 year if by reason of ingratitude. If no special period is
prescribed, 10 years, for an onerous donation following the law of contracts and general rules on
prescriptions. The donation was made in 1910, the cause of action accrued in 1911, while the action to
revoke was filed 1924, twenty three years later.
When a person donates land to another on the condition that a construction be made, the condition is
akin to a resolutory (not suspensive) one. The non-compliance to the condition extinguishes the right to
the donation, but it need not occur first in order for the donation to be effected and validated.

FACTS:

In 1939, the late Don Ramon Lopez was a member of the board of trustees of Central Philippine
University when he executed a donation to the school, stating that the land must be for exclusive use of
a medical college. 50 years later, The heirs of Ramon Lopez filed an action to annul the donation, stating
the failure of the school to construct the medical college over the land. RTC ruled in favor of
respondents, which the CA affirmed.

ISSUE: Whether there is a resolutory condition

RULING:

The donation was an onerous one, where failure of the school to construct a medical college would give
the heirs the power to revoke the donation, reverting the property back to the heirs of the donor. It is
therefore a resolutory condition. Although, the period was not stated, and the courts should have fixed
a period, in this case, 50 years has lapsed since the donation was executed, thus fixing a period would
serve no purpose and the property must already be reverted back.

Dissenting Opinion:

Davide considered the donation as "modal" where the obligations are unconditional, and the fulfillment,
performance, existence or extinguishment is not dependent on any future and uncertain event. It is
more accurate to say that the condition stated is not a resolutory condition, rather a obligation itself,
being an onerous donation. Since this is an onerous donation, it has to comply with the rules on Oblicon,
and therefore the courts should have fixed a period.
SOLANTE vs. COMMISSION ON AUDIT G.R. No. 207348, August 20, 2014 VELASCO,

J. Doctrine:

If the period in the contract is merely an estimate, then the lapse of the said period will not make the
obligation immediately demandable because it cannot be deemed a “day certain” in the context of
Article 1193, the first paragraph of which provides that “Obligations for whose fulfillment a day certain
has been fixed, shall be demandable only when that day comes.”

Facts:

In 1989, the City of Mandaue (the City) and F.F. Cruz and Co., Inc. (F.F. Cruz) entered into a
Contract of Reclamation in which F.F. Cruz, in consideration of a defined land sharing formula thus
stipulated, agreed to undertake, at its own expense, the reclamation of foreshore and submerged lands
from the Cabahug Causeway in that city. The project was to be completed in six (6) years or until 1995.
In connection with the reclamation project, the parties also agreed, by way of a Memorandum of
Agreement, on the use of a parcel of land belonging to the city where, as a compensation for its use for
building housing facilities for F.F. Cruz’s employees, the improvements introduced thereto by F.F. Cruz
shall be owned by the City. The project was not completed by that date. Thereafter, in 1997, the
Department of Public Works and Highways entered into an agreement with F.F. Cruz to demolish the
said housing facilities because these improvements stand in the way of the Metro Cebu Development
Project II (MCDP II), which included the widening of the Plaridel Extension Mandaue Causeway.
Petitioner Rowena Solante, then the Human Resources Management Officer III, prepared disbursement
vouchers in favor of F.F. Cruz in the amount of PHP 1,084,836.42 for the cost of the housing facilities.
This was done with approval of Samuel Darza, Project Director of the MCDP II, who addressed the said
disbursement through a Letter-Complaint, alleging that F.F. Cruz was no longer the owner of the
property as the ownership thereof has passed to the City pursuant to the Contract of Reclamation. The
Commission on Audit (COA) disallowed the disbursement, ruling that the fact that the project was not
completed in 1995 did not negate the government’s ownership of the improvements. Also, it was the
intention of the parties that the government be compensated for the use of the land for the housing
facilities, and making the government pay for the use of the land would render such intention of the
parties inutile.

Issue:

Whether or not the ownership of the improvements built by F.F. Cruz on the land owned by the
City already passed to the government.

Held:
 The ownership of the improvements did not pass to the government and F.F. Cruz remained to
be the owner of the improvements, notwithstanding that project had not been completed. The COA
concluded that after the six (6)-year period, F.F. Cruz was automatically deemed to be in delay, the
contract considered as completed, and the ownership of the structures built in accordance with the
MOA transferred to the City of Mandaue. But this position was erroneous, because a reading of the
contract of reclation showed that the period of six (6) years was an estimate and not a “day certain” in
the context of Article 1193, the first paragraph of which provides that “Obligations for whose fulfillment
a day certain has been fixed, shall be demandable only when that day comes.” Thus, the lapse of six (6)
years from the perfection of the contract did not, by itself, make the obligation to finish the reclamation
project demandable, such as to put the obligor in a state of actionable delay for its inability to finish.
Thus, F.F. Cruz was not in delay. The lapse of six (6) years from the perfection of the subject reclamation
contract, without more, could not have automatically vested Mandaue City, under the MOA, with
ownership of the structures. Even if the allotted six (6) years within which F.F. Cruz was the completion
date of the reclamation project, the lapse thereof does not automatically mean that F.F. Cruz was in
delay. As may be noted, the City never made a demand for the fulfillment of its obligation under the
Contract of Reclamation. The first paragraph of Article 1169 provides: Those obliged to deliver or to do
something incur in delay from the time the obligee judicially or extrajudicially demands from them the
fulfillment of their obligation. Here, the records were bereft of any document whence to deduce that
the City of Mandaue exacted from F.F. Cruz the fulfillment of its obligation under the reclamation
contract. As it were, the Mandaue-F.F.Cruz MOA states that the structures built by F.F. Cruz on the
property of the city will belong to the latter only upon the completion of the project. Clearly, the
completion of the project is a suspensive condition that has yet to be fulfilled. Until the condition arises,
ownership of the structures properly pertains to F.F. Cruz
RADIOWEALTH v. DEL ROSARIO

Facts: On March 2, 1991, Spouses Vicente and Maria Sumilang del Rosario (defendants), jointly and
severally executed, signed and delivered in favor of Radiowealth Finance Company (plaintiff), a
Promissory Note (PN) for P138,948. The parties agreed that if default be made in the payment of any of
the installments or late payment charges thereon as and when the same becomes due and payable, the
total principal sum then remaining unpaid, together with the agreed late payment charges, shall at once
become due and payable without need of notice or demand.

Defendants defaulted on the monthly installments. Despite repeated demands, they failed to pay their
obligations under their PN. On June 7, 1993, plaintiff filed a Complaint for the collection of a sum of
money before the RTC Manila. During the trial, Jasmer Famatico, the credit and collection officer of
plaintiff, presented in evidence the defendants' check payments, the demand letter, the customer’s
ledger card, another demand letter and Metropolitan Bank dishonor slips. Famatico admitted that he
did not have personal knowledge of the transaction or the execution of any of these pieces of
documentary evidence, which had merely been endorsed to him.
plaintiff formally offered its evidence and exhibits and rested its case. defendants filed on a Demurrer to
Evidence for alleged lack of cause of action. The trial court dismissed the complaint for failure of
petitioner to substantiate its claims, the evidence it had presented being merely hearsay.

On appeal, the CA reversed the trial court and remanded the case for further proceedings. According to
the appellate court, the judicial admissions of respondents established their indebtedness to the
petitioner, on the grounds that they admitted the due execution of the PN, and that their only defense
was the absence of an agreement on when the installment payments were to begin. Indeed, during the
pretrial, they admitted the genuineness not only of the PN, but also of the demand letter. Even if
plaintiff's witness had no personal knowledge of these documents, they would still be admissible “if the
purpose for which they are produced is merely to establish the fact that the statement or document was
in fact made or to show its tenor, and such fact or tenor is of independent relevance.”

Besides, Articles 19 and 22 of the Civil Code require that every person must -- in the exercise of rights
and in the performance of duties -- act with justice, give all else their due, and observe honesty and
good faith. Further, the rules on evidence are to be liberally construed in order to promote their
objective and to assist the parties in obtaining just, speedy and inexpensive determination of an action.

Issue: W/N the CA patently erred in ordering the remand of this case to the trial court instead of
rendering judgment on the basis of petitioner’s evidence?

Held: Yes. While the CA correctly reversed the trial court, it erred in remanding the case "for further
proceedings."

Consequences of a Reversal, on Appeal, of a Demurrer to Evidence

The old Rule 35 of the Rules of Court was reworded under Rule 33 of the 1997 Rules, but the
consequence on appeal of a demurrer to evidence was not changed. Defendants who present a
demurrer to the plaintiff’s evidence retain the right to present their own evidence, if the trial court
disagrees with them; if the trial court agrees with them, but on appeal, the appellate court disagrees
with both of them and reverses the dismissal order, the defendants lose the right to present their own
evidence. The appellate court shall, in addition, resolve the case and render judgment on the merits,
inasmuch as a demurrer aims to discourage prolonged litigations.

In the case at bar, the trial court, acting on defendants' demurrer to evidence, dismissed the Complaint
on the ground that plaintiff had adduced mere hearsay evidence. However, on appeal, the appellate
court reversed the trial court because the genuineness and the due execution of the disputed pieces of
evidence had in fact been admitted by defendants.

Due and Demandable Obligation

The act of leaving blank the due date of the first installment did not necessarily mean that the debtors
were allowed to pay as and when they could. If this was the intention of the parties, they should have so
indicated in the PN. However, it did not reflect any such intention. The Note expressly stipulated that
the debt should be amortized monthly in installments of P11,579 for twelve consecutive months. While
the specific date on which each installment would be due was left blank, the Note clearly provided that
each installment should be payable each month. Furthermore, it also provided for an acceleration clause
and a late payment penalty, both of which showed the intention of the parties that the installments
should be paid at a definite date. Had they intended that the debtors could pay as and when they could,
there would have been no need for these two clauses.

Verily, the contemporaneous and subsequent acts of the parties manifest their intention and knowledge
that the monthly installments would be due and demandable each month. In this case, the conclusion
that the installments had already became due and demandable is bolstered by the fact that respondents
started paying installments on the PN, even if the checks were dishonored by their drawee bank.
Neither by their avowals that the obligation had not yet matured nor by their claim that a period for
payment should be fixed by a court.

Petitioner has established not only a cause of action against the respondents, but also a due and
demandable obligation. The obligation of the respondents had matured and they clearly defaulted when
their checks bounced. Per the acceleration clause, the whole debt became due one month after the date
of the PN because the check representing their first installment bounced.

The Note already stipulated a late payment penalty of 2.5 percent monthly to be added to each unpaid
installment until fully paid. Payment of interest was not expressly stipulated in the Note. Thus, it should
be deemed included in such penalty.

In addition, the Note also provided that the debtors would be liable for attorney’s fees equivalent to 25
percent of the amount due in case a legal action was instituted and 10 percent of the same amount as
liquidated damages. Liquidated damages, however, should no longer be imposed for being
unconscionable. Such damages should also be deemed included in the 2.5 percent monthly penalty.
Petitioner is entitled to attorney’s fees, but only in a sum equal to 10 percent of the amount due which
we deem reasonable under the proven facts.

The Court deems it improper to discuss respondents' claim for moral and other damages. Not having
appealed the CA Decision, they are not entitled to affirmative relief, as already explained earlier.
218 Phil. 303

RELOVA, J.:

Petitioner Lourdes Valerio Lim was found guilty of the crime of estafa and was sentenced "to suffer an
imprisonment of four (4) months and one (1) day as minimum to two (2) years and four (4) months as
maximum, to indemnify the offended party in the amount of P559.50, with subsidiary imprisonment in
case of insolvency, and to pay the costs." (p. 14, Rollo)

From this judgment, appeal was taken to the then Court of Appeals which affirmed the decision of the
lower court but modified the penalty imposed by sentencing her "to suffer an indeterminate penalty of
one (1) month and one (1) day of arresto mayor as minimum to one (1) year and one (1) day of prision
correccional as maximum, to indemnify the complainant in the amount of P550.50 without subsidiary
imprisonment, and to pay the costs of suit." (p. 24, Rollo)

The question involved in this case is whether the receipt, Exhibit "A", is a contract of agency to sell or a
contract of sale of the subject tobacco between petitioner and the complainant, Maria de Guzman Vda.
de Ayroso, thereby precluding criminal liability of petitioner for the crime charged.
The findings of fact of the appellate court are as follows:

"x x x The appellant is a businesswoman. On January 10,1966, the appellant went to the house of Maria
Ayroso and proposed to sell Ayroso's tobacco. Ayroso agreed to the proposition of the appellant to sell
her tobacco consisting of 615 kilos at P1.30 a kilo. The appellant was to receive the overprice for which
she could seU the tobacco. This agreement was made in the presence of plaintiffs sister, Salud G.
Bantug. Salvador Bantug drew the document, Exh. A, dated January 10, 1966, which reads:

'To Whom It May Concern:

This is to certify that I have received from Mrs. Maria de Guzman Vda. de Ayroso, of Gapan, Nueva Ecija,
six hundred fifteen kilos of leaf tobacco to be sold at P1.30 per kilo. The proceed in the amount of Seven
Hundred Ninety Nine Pesos and 50/100 (P 799.50) will be given to her as soon as it was sold.'

This was signed by the appellant and witnessed by the complainant's sister, Salud Bantug, and the
latter's maid, Genoveva Ruiz. The appellant at that time was bringing a jeep, and the tobacco was
loaded in the jeep and brought by the appellant. Of the total value of P799.50, the appellant had paid to
Ayroso only P240.00, and this was paid on three different times. Demands for the payment of the
balance of the value of the tobacco were made upon the appellant by Ayroso, and particularly by her
sister, Saiud Bantug. Salud Bantug further testified that she had gone to the house of the appellant
several times, but the appellant often eluded her; and that the 'camarin' of the appellant was empty.
Although the appellant denied that demands for payment were made upon her, it is a fact that on
October 19, 1966, she wrote a letter to Salud Bantug which reads as follows:

'Dear Salud,

'Hindi ako nakapunta dian noon a 17 nitong nakaraan, dabil kokonte pa ang nasisingil kong pera,
magintay ka hanggang dito sa linggo ito at tiak na ako ay magdadala sa iyo. Gosto ko Salud ay
makapagbigay man lang ako ng marami para hindi masiadong kahiyahiya sa iyo. Ngayon kung gosto mo
ay kahit konte muna ay bibigyan kita. Pupunta lang kami ni Mina sa Maynila ngayon. Salud kung talagang
kailangan mo ay bukas ay dadalhan kita ng pera.

'Medio mahirap ang maningil sa palengke ng Cabanatuan dahil nagsisilipat ang mga suki ko ng puesto.
Huwag kang mabahala , at tiyak na babayaran kita.

'Patnubayan tayo ng mahal na panginoon Dios. (Exh. B).

Ludy'

"Pursuant to this letter, the appellant sent a money order for P100.00 on October 24, 1967, Exh. 4, and
another for P50.00 on March 8, 1967; and she paid P90.00 on April 18, 1967 as evidenced by the receipt
Exh. 2, dated April 18, 1967, or a total of P240.00. As no further amount was paid, the complainant filed
a complaint against the appellant for estafa." (pp. 14, 15. 16, Rollo)

In this petition for review by certiorari, Lourdes Valerio Lim poses the following questions of law, to wit;

1. Whether or not the Honorable Court of Appeals was legally right in holding that the foregoing
document (Exhibit "A")
2. "fixed a period" and "the obligation was therefore, immediately demandable as soon as the tobacco
was sold" (Decision, p. 6) as against the theory of the petitioner that the obligation does not fix a period,
but from its nature and the circumstances it can be interred that a period was intended in which case
the only action that can be maintained is a petition to ask the court to fix the duration thereof;

3. Whether or not the Honorable Court of Appeals was legally right in holding that "Art. 1197 of the New
Civil Code does not apply" as against the alternative theory of the petitioner that the foregoing receipt
(Exhibit "A") gives rise to an obligation wherein the duration of the period depends upon the will of the
debtor in which case the only action that can be maintained is a petition to ask the court to fix the
duration of the period; and

4. Whether or not the Honorable Court of Appeals was legally right in holding that the foregoing receipt
is a contract of agency to sell as against the theory of the petitioner that it is a contract of sale. (pp. 3-4,
Rollo)

It is clear in the agreement, Exhibit "A", that the proceeds of the sale of the tobacco should be turned
over to the complainant as soon as the same was sold, or, that the obligation was immediately
demandable as soon as the tobacco was disposed 'of. Hence, Article 1197 of the New Civil Code, which
provides that the courts may fix the duration of the obligation if it does not fix a period, does not apply.

Anent the argument that petitioner was not an agent because Exhibit "A" does not say that she would
be paid the commission if the goods were sold, the Court of Appeals correctly resolved the matter as
follows:

"x x x Aside from the fact that Maria Ayroso testified that the appellant asked her to be her agent in
selling Ayroso's tobacco, the appellant herself admitted that there was an agreement that upon the sale
of the tobacco she would be given something. The appellant is a businesswoman, and it is unbelievable
that she would go to the extent of going to Ayroso's house and take the tobacco with a jeep which she
had brought if she did not intend to make a profit out of the transaction. Certainly, if she was doing a
favor to Maria Ayroso and it was Ayroso who had requested her to sell her tobacco, it would not have
been the appellant who would have gone to the house of Ayroso, but it would have been Ayroso who
would have gone to the house of the appellant and deliver the tobacco to the appellant." (p. 19, Rollo)

The fact that appellant received the tobacco to be sold at P1.30 per kilo and the proceeds to be given to
complainant as soon as it was sold, strongly negates transfer of ownership of the goods to the
petitioner. The agreement (Exhibit "A") constituted her as an agent with the obligation to return the
tobacco if the same was not sold.

ACCORDINGLY, the petition for review on certiorari is dismissed for lack of merit. With costs.

SO ORDERED.
Araneta vs. Phi. Sugar Estate Dev., Inc20 SCRA 330/GR L-22558Art. 1197ScopeArt. 1197

Facts

Petitioner and Respondent entered into a contract of purchase and sale with mortgage whereas Psold a
big tract of land to R subject to following conditions: 1) that buyer will build on said landthe Sto.
Domingo Church and Convent and 2) that seller will construct streets surrounding theland which shall be
named “Sto. Domingo Avenue”

R finished the construction of the church will P was unable to finish the construction of thestreets
because a third party, occupying the middle part thereof, refuse to vacate the same

R filed a complaint seeking P to comply with the obligation and/or pay damages in case of failure/refusal

RTC and CA decided in favor of R and gave P 2 years to comply with its obligation

Held

1.Art. 1197 involves two step processes: 1) the Court must first
determine that the obligationdoes not fix period (or that the period is made to depend upon the will of
the debtor), butfrom the nature and the circumstances it can be inferred that a period was intended
(Art1197 1&2)

and 2) the Court must proceed to second step and

decide what period wasprobably contemplated by parties.

Even on the assumption that the court should have found out that no reasonable time or periodat all
had been fixed, the

COMPLAINT NOT HAVING SOUGHT THE COURT SHOULDSET A PERIOD,

the court could not proceed to do so unless the complaint is amended

No basis to support the conclusion that period should be set at two years after finality of judgment,
considering that the land was occupied by squatters. Parties must comply with legal processes in
evicting the squatters.

Reasonable time: at the date all the squatters on affectedareas are finally evicted