Art 1179-1192

Angeles v Calasanz
G.R. No. L-42283 | March 18, 1985

TICKLER: Take it or leave it Land

DOCTRINE:

FACTS:

December 19, 1957

 Defendant-appellants Ursula Torres Calasanz and Tomas Calasanz
 Plaintiff-appellees Buenaventura Angeles and Teofila Juani
 Both entered a contract to sell land (Cainta, Rizal. Php3,920 plus 7% interest
per annum)

Plaintiffs
 Made down payment upon execution of contract (Php392)
 Promised to pay Php41.20 every 19th of the month until fully paid
 Paid until July 1966 (total payment already reached Php4,533.38)
 Defendants accepted and received delayed installment payments

December 7, 1966, Defendants requested Plaintiffs, via letter, the remittance of past
due accounts

January 28, 1967

 Defendants cancelled the contract because plaintiffs failed to pay later
payments
 Plea for reconsideration by the Plaintiffs to the Defendants was denied

Plaintiffs
 Filed Civil Case No. 8943 at CFI Rizal to compel Defendants to execute the
final deed in their favor, having known that they already paid Php4,533.38

Defendants
 Complaint of Plaintiffs had No cause of action
 Plaintiffs violated Contract to Sell when they failed and refused to pay on
August 1966 for more than 5 months

Lower Court:
 In favor of Plaintiffs. Contract was NOT VALIDLY cancelled by the defendants

Denied MR filed by Defendants

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CA: the appeal involves pure questions of law

Defendants (appeal. The court erred in:)

1. Not ordering Defendants that Contract to sell be legally and validly cancelled
2. Even if the contract has not been legally cancelled, the defendants had to
execute a final deed of sale
3. Ordering Defendants to pay attorney’s fees

NATURE OF THE CASE: Appeal from the decision of CFI Rizal declaring the contract to sell
as not having been validly cancelled and ordering the defendant-appellants to execute a final
deed of sale in favor of the plaintiff-appellees

ISSUE: Whether or not the contract to sell has been automatically and validly cancelled
by the defendants-appellants.

Plaintiffs have failed to pay the August 1966 installment despite demands for more than 4
months.
- Defendants’ argument: The contract between the two parties explicitly stated that there
is a 90-day grace period. And in case the other party has not paid, the other party has
the right to declare this contract cancelled and of no effect. Even in the absence of the
contract provision, Art 1191 must apply
- Plaintiffs’ argument: the contract provision is contrary to law because it grants the
sellers absolute and automatic rescission

RULING:

1. Art 1191. 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
injured party may choose between the fulfillment and the rescission of the
obligation, with the payment of damages in either case. He may also seek
rescission, even after he has chosen fulfillment, if the latter should become
impossible.
o In reciprocal obligations, either party the right to rescind the contract
upon the failure of the other to perform the obligation assumed
thereunder despite no court order.
o “A party who deems the contract violated may consider it resolved or
rescinded, and act accordingly, without previous court action, but it
proceeds at its own risk. For it is only the final judgment of the
corresponding court that will conclusively and finally settle whether the
action taken was or was not correct in law.”
o “Only the final award of the court of competent jurisdiction can
conclusively settle whether the resolution was proper or not. It is in this
sense that judicial action will be necessary, as without it, the extrajudicial
resolution will remain contestable and subject to judicial invalidation,

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 unless attack thereon should become barred by acquiescence, estoppel
or prescription.”
o The right to rescind the contract for non-performance is NOT
ABSOLUTE. It is not permitted for a slight or casual breach, but only for
substantial and fundamental breach that would affect the very object of
the parties in making the agreement
o In the case at bar, the breach of contract is casual. In fact, the Plaintiffs
already paid the monthly installments for almost nine (9) years.
Likewise, for having paid a total of Php4,533.38 (principal obligation was
only Php3,920, excluding interests), to sanction rescission will be unjust
to the Plaintiffs

Article 1234. If the obligation has been substantially performed in good faith,
the obligor may recover as though there had been a strict and complete
fulfillment, less damages suffered by the obligee.

2. The fact that the Defendants, instead of availing their alleged right to rescind,
they still accepted and received delayed payment of installments from the
Plaintiffs despite beyond the grace period. The defendants waived and are
estopped from their right of rescission
o The exceeded payments made by the Plaintiffs were a substantial
portion applied to the interests of the 7% per annum remaining balance
of the contract. Plaintiffs argued that Defendants must be compelled to
execute final deed of sale.

3. Contract is like a contract of adhesion (drafted and prepared by the Defendants

and immediately signed by the Plaintiffs eager to build a home without
opportunity to question nor change the terms [“take it or leave it”])
o “there are certain contracts almost all the provisions of which have been
drafted only by one party, usually a corporation. Such contracts are
called contracts of adhesion, because the only participation of the party
is the signing of his signature or his "adhesion" thereto.”

The contract to sell, being a contract of adhesion, must be construed against the party
causing it.

Since the principal obligation under the contract is only P3,920.00 and the plaintiffs
have already paid an aggregate amount of P4,533.38, the courts should only order
the payment of the few remaining installments but not uphold the cancellation of the
contract

Upon payment of the balance of P671.67 without any interest thereon, the
defendants-appellants must immediately execute the final deed of sale in favor of the
plaintiffs-appellees and execute the necessary transfer documents.

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DECISION: Petition DENIED for lack of merit. Decision appealed from is AFFIRMED with
modification (Plaintiffs to pay remaining Php671.67, without interests)

Roque v Lapuz

TICKLER: Drunk man in LRT boxed with Security Guard, fell on the tracks and died

DOCTRINE:

FACTS: on he night of Nicanor Navidad, then drunk

ISSUE: Whether A is guilty of Illegal possession of pens and ballpens

RULING: The Supreme Court ruled against A.

DECISION: Petition GRANTED.

Ayson-Simon v Adamos
G.R. No. L-39378 | August 28, 1984

TICKLER: 2 lots for Generosa

DOCTRINE:

Art 1191. xxx The injured party may choose between the fulfillment and the rescission
of the obligation, with the payment of damages in either case. He may also seek
rescission, even after he has chosen fulfillment, if the latter should become impossible.
xxx.

FACTS:

December 13, 1943

 Defendants-appellants Nicolas Adamos and Vicenta Feria bought 2 lots at the
Pierdad Estate in Quezon City (56,395sqm from Juan Porciuncula)

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  Later on, the successors-in-interest of the lot filed Civil Case No. 174 at CFI
QC for annulment of sale and cancellation of Transfer Certificate of Title No.
69475 issued to defendants

December 18, 1963, the Court:

 Annulled the sale
 Cancelled TCT 69475
 Authorized the issuance of a new title in favor of Porciuncula’s successors-in-
interest

Affirmed and attained finality by the Appellate Court

May 29, 1946

o During pendency of the case, defendants-appellant sold land to Plaintiff-
appellee, Generosa Ayson Simon, the 2 lots for Php3,800.00 plus Php800 for
facilitating issuance of new titles in Generosa’s name

September 4, 1963
o Defendants-appellant failed to deliver due to the decision of the court,
Generosa filed suit for specific performance before CFI QC (Civil Case No. Q-
7275)

January 20, 1964, Court:

o Plaintiff is declared entitled to a summary judgment. The defendants were
ordered to deliver the titles and possession thereof to plaintiff.

However, the Court Order was rendered impossible due to the judgment of Civil Case
No. 174 (declared Porciuncula’s lot sale to defendants-appellants null and void).

August 16, 1968

o Generosa filed another suit against in CFI Manila (Civil Case. 73942) for
rescission of the sale with damages

June 7, 1969, Court:

o In favor of plaintiff (Generosa). Defendants to jointly and severally pay lot
amount, legal rate of interest, attorney’s fees, and costs of suit

Appeal by defendants at the Appellate Court:

1. The fulfillment and the rescission of the obligation in reciprocal ones are
alternative remedies. Upon choosing fulfillment, cannot anymore choose
remedies. (Generosa’s complaint for specific performance may be deemed as
a waiver of her right to rescission since the fulfillment and rescission of an
obligation are alternative and not cumulative remedies)

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 2. But even if the plaintiff could seek rescission the action to rescind the obligation
has prescribed (Generosa only had 4 years from May 29, 1946 (date of sale) to
rescind transaction)
NATURE OF THE CASE: Appeal by defendants from the Decision of CFI Manila to the CA,
which Tribunal, certified the case to the SC because the issue is a pure question of law

ISSUE: Whether or not the court decision is with merit

RULING:

The appeal is without merit.

1. The rule that the injured party can only choose between fulfillment and rescission of
the obligation, and cannot have both, applies when the obligation is possible of
fulfillment. If, as in this case, the fulfillment has become impossible, Article 1191 allows
the injured party to seek rescission even after he has chosen fulfillment.
o Art 1191. xxx The injured party may choose between the fulfillment and
the rescission of the obligation, with the payment of damages in either
case. He may also seek rescission, even after he has chosen fulfillment, if
the latter should become impossible. xxx.
o Given the defendants-appellant cannot deliver the promise to plaintiff, the
obligation to do is without force and effect. Only the portion relative to damages
remain, and in either case (fulfillment and rescission), defendants may be
required to pay damages
2. Art 1191, the injured may also seek rescission, if the fulfillment is impossible. It
became impossible for plaintiff to have acted upon seeking rescission because she
had to wait for the finality of the decision in Civil Case No. 174. The action for
rescission must be done within 4 years of the entry of judgment dated May 3, 1967.
Given that complainant filed on August 16, 1968, the action had not prescribed.
o Defendants should return to plaintiff the purchase price of 2 lots, the price
given by plaintiff to expedite the issuance of titles, interest, and legal rates.

DECISION: Appealed judgment of the CFI Manila is affirmed in toto.

International Hotel Corp. v Suarez

TICKLER:

DOCTRINE:
The principle of quantum meruit justifies the payment of the reasonable value of the services
rendered by him

FACTS:

February 1, 1969
 Respondent Francisco B. Joaquin, Jr. submitted a proposal to Board of
Directors of the International Hotel Corporation (IHC) to render technical

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 assistance in securing a foreign loan for the construction of a hotel, to be
guaranteed by Development Bank of the Philippines (DBP)
 The proposal has 9 phases. IHC board of directors approved Phases 1-6 and
allotted P2M for the project
 IHC applied with DBO for foreign loan guaranty
 October 24, 1969 – DBP processed then approved the application

July 11, 1969

 After submitting application to DBP, Joaquin wrote to IHC to request the
payment of his fees (Php500k) for the services provided and will be providing
 He was willing to receive shares of stock instead of cash in view of IHC’s
financial situation

July 11, 1969

 Joaquin’s request was granted
 Payment for both Joaquin and Rafael Suarez

June 20, 1970

 Joaquin presented to the IHC Board of Directors the results of his negotiations
 Roger Dunn & Company
 Materials Handling Corporation (MHC) – recommended by Joaquin based on
more beneficial terms
 Recommendation was accepted

Negotiations with MHC and its principal Barnes International (Barnes) ensued.

Joaquin and Jose Valero (Executive Director of IHC) met another financier while
negotiations were ongoing – Weston International Corporation (Weston)

Barnes failed to deliver the needed loan. IHC informed DBP that it would submit
Weston for DBP’s consideration.

December 6, 1971: DCP cancelled its previous guaranty through a letter

December 13, 1971: IHC entered agreement with Weston
June 26, 1972: Informed DBP; DBP denied application for failure to comply with
conditions of November 12, 1971 letter

IHC cancelled the 17k shares of stock issued to Joaquin and Suarez as payment for
their services for failure to secure the needed loan. They requested for
reconsideration but was rejected

December 6, 1973 (Petitioners)

 Joaquin and Suarez commenced this action for specific performance,
annulment, damages and injunction (RTC)
o Alleging that the cancellation of shares had been illegal

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 o IHC deprived them of the right to participate in the meetings and
elections held by IHC
o Barned had been recommended by IHC President Bautista and not
Joaquin
o They failed to meet their obligation due to the intervention and
negotiation made with Barnes instead of Winston
o DBP cancelled guaranty due to Barnes’ failure to release loan
o IHC agreed to compensate their services with 17k shares of the
common stock plus Php1M.

Defendants:

ISSUE:

NATURE OF THE CASE: Petition for Review on certioriari

RTC: The Court hereby orders the defendant IHC to pay plaintiff Joaquin Php200k and to pay
Suarez Php50k; defendant IHC also to pay co-plaintiffs, attorney’s fees Php20k, and costs of
suit

CA: November 8, 2002: Wherefore, the decision dated August 26, 1993 of the RTC is
AFFIRMED with Modification as to the amounts awarded.

RULING:

DECISION: Wherefore, the Court DENIES the petition for review on certiorari, and
AFFIRMS the decision of the CA subject to Modifications, pay Joaquin Jr. and Suarez
PHp100k each as compensation for their services, and attorney’s fees award be
deleted

Mila Reyes v Victoria Tuparan

TICKLER: Drunk man in LRT boxed with Security Guard, fell on the tracks and died

DOCTRINE:

FACTS: on he night of Nicanor Navidad, then drunk

ISSUE: Whether A is guilty of Illegal possession of pens and ballpens

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 RULING: The Supreme Court ruled against A.

DECISION: Petition GRANTED.

Nobus v Joaqin & Julia Parson

TICKLER: Drunk man in LRT boxed with Security Guard, fell on the tracks and died

DOCTRINE:

FACTS: on he night of Nicanor Navidad, then drunk

ISSUE: Whether A is guilty of Illegal possession of pens and ballpens

RULING: The Supreme Court ruled against A.

DECISION: Petition GRANTED.

Art 1193-1206

Chavez v Gonzales
SEE DIGEST ABOVE
TICKLER:

DOCTRINE:

FACTS:

ISSUE:

RULING:

DECISION:

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Lim v People
G.R. No. L-34338 | November 21, 1984

TICKLER: Tobacco selling

DOCTRINE:

FACTS:

January 10, 1966

 Appellant (businesswoman) went to the house of Maria Ayroso and proposed to sell
Ayroso’s tobacco
 Ayroso agreed. Her tobacco is of 615 kg at Php1.30/kg
 Agreement was done in the presence of Salud G. Bantug (Plaintiff’s sister)
 Salvador Bantug drew the document (Exhibit A) indicating the agreement
 Appellant signed. Witnesses: Salud and Genoveva Ruiz (Salud’s maid)
 Appellant loaded the tobacco in his jeep
 Appellant paid Php240 (total value is Php799.50) 3 different times
 Demands were made by Ayroso and her sister, Salud
 Salud gone to the house of the appellant but appellant often eluded her, the house
was also empty

October 19, 1966

 Appellant wrote Salud a message (Exhibit B)
 The message contains the appellant’s reconsideration for extension of payment as she
has not yet obtained the target amount of money
 Appellant said that she would send Salud money if Salud needs it immediately

October 24, 1967: Appellant sent Php100 (Exhibit 4)

March 8, 1967: Php50.00
April 18, 1967: Php90.00 (Exhibit 2)
Total: Php240.00

No further payment. Complainant filed against appellant for estafa

Petition for review by certiorari filed by appellant Lim.

Petitioner Lourdes Valerio Lim (Lower Court)

 Guilty of estafa
 To suffer an imprisonment of 4m1d as min to 2y4m as max
 To indemnify the offended party in the amount of Php599.50
 With subsidize imprisonment in case of insolvency
 Pay costs

Appeal was taken to the CA

CA affirmed with modifications:

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  To suffer an indeterminate penalty of 1m1d of arresto mayor as min to 1y1d of
prision correccional as max
 To indemnify complaint in the amount of Php550.50
 Without subsidiary imprisonment
 Pay costs
NATURE OF THE CASE: Petition for review by Certiorari

ISSUE: Whether or not 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

RULING:

In the agreement (Exhibit A), the proceeds of the sale should be turned over to the
complainant as soon as the same was sold. The obligation was immediately demandable as
soon as the tobacco was disposed of.

Art 1197. xxx. If the obligation does not fix a period, but from its nature and the
circumstances it can be inferred that a period was intended, the courts may fix the
duration thereof. xxx.

The appellant admitted that there was an agreement that upon the sale of the tobacco
she would give 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

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.
DECISION: Petition for review on certiorari is dismissed for lack of merit.

Victorias Planters v Victorias Milling

TICKLER: Drunk man in LRT boxed with Security Guard, fell on the tracks and died

DOCTRINE:

FACTS: on he night of Nicanor Navidad, then drunk

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 ISSUE: Whether A is guilty of Illegal possession of pens and ballpens

RULING: The Supreme Court ruled against A.

DECISION: Petition GRANTED.

1231-1261

Saure v Pentecostes

TICKLER:

DOCTRINE:

FACTS:

Respondent Municipal Judge Prudencio S. Pentecostes of Tarlac

 Ejected Francisco Saure (petitioner) from building owned by Telesforo and Nieves
Galang (private respondents);
 Denied motion for relief from judgment

Citizens Legal Assistance Office of the Ministry of justice nullified and set aside a decision of
Judge
 Judge disregarded the plain command of PD No. 20 which suspended indefinitely the
filing of ejectment cases when the lease is for a definite period and which prohibited
the increase in rentals of dwelling units where the monthly rentals do not exceed
php300/month

 Saure has a small photography shop to supplement his income does not transform the
place into a commercial establishment
 No period of duration has been fixed for his occupancy
 Telesforo and Nieves wanted to eject him for the sole purpose of his refusal to submit
an increase in rentals (from php50 to php180)
 Judge jurisdiction was because the building was located in Camiling, Tarlac

NATURE OF THE CASE: Certiorari and prohibition proceeding

ISSUE: W/N respondent judge did not err in rendering his decision of ejecting Saure from the
building

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RULING:

1. Salaria v Buenviaje – all the private respondents were interested was is that
the rentals be increased, contrary to what is ordained by PD No. 20
2. Gutierrez v Cantada – PD No. 20 makes a period indefinite. When there is a
definite period, Article 1673 of the Civil Code of the Philippines shall apply
insofar as they refer to dwelling unit or land on which another's dwelling is
located shall be suspended until otherwise provided; but other provisions of the
Civil Code and the Rules of Court of the Philippines on lease contracts, insofar
as they are not in conflict with the provisions of this Act, shall apply.'

One of the grounds for judicially ejecting the lessee is the expiration of the period fixed
for the duration of the lease.
The legislation or decree of the above character is a police power measure intended
to alleviate the plight of lessees occupying premises with a monthly rental of less than
P300.00. The construction that should be given to it therefore should be of a liberal
character. Otherwise, its beneficent purpose could be frustrated. Nor could any doubt
be entertained that the decree applied to leases entered into prior to its issuance.

"The applicability thereof to existing contracts cannot be denied.”

Ongsiako v. Gamboa – a police power measure being remedial in character covers
existing situations; otherwise, it would be self-defeating

3. It is not the location but the use of the premises in question that is decisive.

Judge disregarded the evidence which showed that petitioner and his family had lived
in such place for the last ten years.

Whatever doubt there may be on that score is removed by this definition of a

residential unit in Batas Pambansa Blg. 25:
"A residential unit — refers to an apartment, house and/or land on which another's
dwelling is located used for residential purposes and shall include not only buildings,
parts or units thereof used solely as dwelling places, except motels, motel rooms,
hotels, hotel rooms, boarding houses, dormitories, rooms and bedspaces for rent, but
also those used for home industries, retail stores or other business purposes if the
owner thereof and his family actually live therein and use it principally for dwelling
purposes: Provided , That in the case of a retail store, home industry or business, the
capitalization thereof shall not exceed five thousand pesos (P5,000.00): and Provided,
further , That in the operation of the store, industry or business, the owner thereof
shall not require the services of any person other than the immediate members of his
family

Petitioner was occupying only one of the units in the building in question, all of which
served as the dwelling places of the lessees.

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 4. Petitioner did not deposit during the pendency of this litigation the monthly
rental of P50.00 agreed upon.

"The petitioner is, however, ordered to pay back rentals for the period of his stay on
the land at the rate of P10.00 a month, which is not covered by the deposit."

In this case, however, the failure of petitioner to deposit the rental is mitigated by the
fact that he did offer to pay the former rental, but private respondents made it clear
that they would not accept. Counsel for petitioner ought to have advised him to make
the necessary consignation

The action for ejectment not being allowable in law at all, and a clear case of
jurisdictional infirmity being apparent, such failure could be considered excusable.

Petitioner, however, must pay all the back rentals due and owing. In according him
justice through law, no injustice should be visited on private respondents.

5. Upon the effectivity of this Act and for a duration of five years thereafter the
monthly rentals of all residential units not exceeding three hundred pesos shall
not be increased, for any one year period, by more than ten percent (10%) of
the monthly rentals existing at the time of the approval of this Act. The yearly
increases authorized herein shall be cumulative
DECISION: WHEREFORE, the petition for certiorari is granted nullifying the decision of
respondent Judge dated November 17, 1976 and the writ of execution issued on December
15, 1976 by virtue thereof. The order of March 10, 1977 of respondent Judge denying the
petition for relief from the aforesaid decision is likewise declared of no force and effect. The
writ of prohibition is granted enjoining respondent Judge and respondent Deputy Sheriff
Vivencio Palancio or any person acting on their stead or behalf from taking any further action
in connection with Civil Case No. 3066 of the Municipal Court of Camiling between the
spouses Telesforo and Nieves Galang, now private respondents, as plaintiffs, and Francisco
Saure, now petitioner, as one of the defendants. The restraining order issued by this Court on
July 18,1977 is hereby made permanent. Petitioner Francisco Saure is granted a period of
ninety days within which to pay the back rentals. No costs.

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