Title: PALAY, INC. and ALBERT ONSTOTT petitioner vs. JACOBO C.

CLAVE,
Presidential Executive Assistant, NATIONAL HOUSING AUTHORITY and
NAZARIO DUMPIT respondents.

I. Citation: 124 SCRA 638; No. L-56076. September 21, 1983

II. Facts:

The resolution, dated May 20, 1980, issued by Presidential Executive

Assistant Jacobo Clave in O.P case No. 1459, directing petitioners Palay, Inc.
and Alberto Onstott, jointly and severally, to refund to private respondent,
Nazario Dumpit, the amount of P13,722.50 with 20% interest per annum, as
resolved by the National Housing Authority in its Resolution of July 10, 1979
in Case No. 2167, as well as the Resolution of Oct. 28, 1980 denying
petitioner’s’ Motion for
Reconsideration of said Resolution of May 2, 1980, are being assailed in this
petition.

On March 28, 1965, petioner PALAY, INC., through its President, Albert
Onstott, Executed in favor of private respondent, Nazaro Dumpit, a Contract
to Sell a parcel of Land ( Lot No. 8, Block IV) of the Crestview Heigth
Subdivision in Antipolo, Rizal, with an area of 1,165 sq. meters, covered by
TCT NO. 90454, and on by said corporation. The sale price was P23,300.00
with 9% interest per annum, payable with a dowmpayment of P4,660.00 and
monthly installments of P246.42 until fully paid. Paragraph 6 of the contract
provided for automatic extrajudicial rescission upon default in payment of any
monthly installment after the laps of 90 days from the expiration of the grace
period of one month, w/o need of notice and w/ forfeiture of all installments
paid.

Respondent Dumpit paid the downpayment and several installments

amounting to P13,722.50. The last payment was maid on Dec. 5, 1967 for
installments up to Sept. 1967.

On May 10, 1973, or almost six (6) years later, private respondent wrote
petitioner offering to update all his overdue accounts with interests, and
seeking its written consent to the assignment of his rights to a certain Lourdes
Dizon. He followed this up with another letter dated June 20, 1973 reiterating
the same request. Replying, petitioners informed respondents that his Contract
to Sell had long been rescinded pursuant to paragraph 6 of the contract, and
that the lot had already been resold.

Questioning the validity of the rescission of the contract, respondent filed

a letter complaint with the National Housing Authority (NHA) for
reconveyance with an alternative prayer for refund (Case No. 2167). In a
Resolution, dated July 10, 1979, the NHA, finding the rescission void in the
 absence of either judicial or notarial demand, ordered Palay Inc. and Alberto
Onstott, In his capacity as President of the corporation, jointly and severally,
to refund immediately to Nazario Dumpit the amount of P13,722.50 with 12%
interest from the filing of the complaint on November 8, 1974. Petitioners’
Motion for recosinderation of said Resolution was denied by the NHA in its
Order dated October 23,1979.

III. Issue:
On appeal to the Office of the President, upon the allegation that the NHA Resolution
was contrary to law (O.P Caese No. 1459), respodent Presidential Executive
Assistant, on May 2, 1980, affirmed the Resolution of the NHA Reconsideration
sougth by the petitioners was denied for lack of merit. Thus, the present petition
wherein the following issues are raised:

“ Whether notice or demand is not mandatory under the circumstances and therefore, may
be dispensed w/ by the stipulation in a contract to sell.

II.

Whether petioners may be held liable for the refund of the installment payments made
by the respondent Nazario M. Dumpit.

III.

Whether the doctrine of piercing the veil of corporate fiction has application to the
case at bar.

VI.

“Whether respondents Presidential Executive Assistant committed grave abuse of

discretion in upholding the decision of respondent NHA holding petitioners solidarily
liable for the refund of the installment of payments made by the respondents Nazario
Dumpit thereby denying substancial justice to the petitioners, particularly petitioner
Onstott.

We issued a Temporary Restraining Order on February 11, 1981 enjoining the

enforcement of the questioned Resolutions and of the Writ of Execution that had been
issued on December 2, 1980. On October 28, 1981, we dismissed the petiton but upon
petitioners’ motion, reconsidered the dismissal and gave due course to the petition on
March 15, 1982.
 IV. RULING:

In this case, petitioner Onstott was made liable because he was then the President of
the corporation and he appeared to be the controlling stockholder. No sufficient proof
exists on the record that said petitioner used the corporation to defraud private
respondent. He cannot, therefore, be made personally liable just because he “appears
to be the controlling stockholder”. Mere ownership by a single stockholder or by
another corporation is not of itself sufficient ground for disregarding the separate
corporate personality. In this respect then, a modification of the Resolution under
review is called for.

WHEREFORE, the questioned Resolution of respondent public official, dated May 2,

1980, is hereby modified. Petitioner Palay, Inc. is directed to refund to respondent
Nazario M. Dumpit the amount of P13,722.50, with interest at twelve (12%) percent
per annum from November 8, 1974, the date of the filing of the Complaint. The
temporary Restraining Order heretofore issued is hereby lifted.

No costs.
SO ORDERED.
I. Title: SOLOMON BOYSAW and ALFREDO M. YULO, JR.,
Plaintiffs-appelants, versus INTERPHIL PROMOTIONS, INC.,
LOPE SARREAL, SR., and MANUEL NIETO JR.,
Defendants-appellees.

I. Citation: 135 SCRA 323; No. L-42283. March 18, 1985.

II. Facts:

This is an appeal interpost by Solomon Boysaw and Alfredo Yulo, Jr., from the
decision dated July 25, 1963 and other rulings and orders of the then Court of First
Instance [CFI] of Rizal, QC. Branch V in Civil Case No. Q-5063, entitled “Solomon
Boysaw and Alfredo Yulo, Jr., Plaintiffs versus Interphil Promotions, Inc. Lope
Sarreal, Sr. and Manuel Nieto, Jr., Defendants,” which, among others, ordered them to
jointly and severally pay defendants-appellee Manuel Nieto, Jr., the total sum of
P25,000.00, broken down into P20,000.00 as moral damages and P5,000.00 as
attorney’s fees; the defendants-appellees Interphil Promotions, Inc. and Lope Sarreal,
Sr., P250,000.00 as unrealized profits, P33,369.72 as actual damages and P5,000.00
as attorney’s fees; and defendant-appellee and Lope Sarreal, Sr., the additional
amount of P20,000.00 as moral damages aside from costs.

The antecedent facts of the case are as follows:

On May 1, 1961, Solomon Boysaw and his then Manager, Willie Ketchum, signed
with Interphil Promotions, Inc. represented by Lope Sarreal, Sr., a contract to engage
Gabriel “Flash” Elorde in a boxing contest for a junior lightweight championship of
the world.

It was stipulated that the bout would be held at the Rizal Memorial Stadium in Manila
on September 30, 1961 or not later than [30] days thereafter should a postponement
be mutually agreed upon, and that Boysaw would not, prior to the date of the boxing
contest, engage in any other such contest without the written consent of Interphil
Promotion, Inc.

On May 3, 1961, a supplemental agreement on certain details not covered by the

principal contract was entered into by Ketchum and Interphil. Thereafter, Interphil
signed Gabriel “Flash” Elorde to a similar agreement, that is, to engage Boysaw in a
title fight at the Rizal Memorial Stadium on September 30, 1961.

On June 19, 1961, Boysaw fought and defeated Louis Avila in a ten round non-title
bout held in Las Vegas, Nevada, U.S.A.
On July 2, 1961, Ketchum on his own behalf and on behalf of his associate Frank
Ruskay, assigned to J. Amado Araneta the managerial rights over Solomon Boysaw.
Pressumably in preparation for his engagement with Interphil, Solomon Boysaw
arrived in the Philippines on July 31, 1961.

On September 1, 1961, J. Amado Araneta assigned to Alfredo J. Yulo, Jr. the

managerial rights over Boysaw that he earlier acquired from Ketchum and Ruskay.
The next day, September 2, 1961, Boysaw wrote Lope Sarreal, Sr. informing him of
his arrival and presence in the Philippines.

On September 5, 1961, Alfredo Yulo, Jr. wrote to Sarreal, informing him of his
acquisition of the managerial rights over Boysaw and indicating his and Boysaw’s
readiness to comply with the boxing contract of May 1, 1961. On the same date, on
behalf of Interphil, Sarreal wrote a letter to the Games And Amusement Board
expressing concern over reports that their had been a switch of managers in the case
of Boysaw, of which he had not been formally notified, and requesting that Boysaw
be called to an inquiry to clarify the situation.

The GAB called a series of conferences of the parties concerned culminating in the
issuance of its decition to schedule the Elorde-Boysaw fight for November 4, 1961.
The USA National Boxing Association which has supervisory control of all world
title fights approved the date set by the GAB.

Yulo, Jr. refused to accept the change in the fight date, maintaining his refusal even
after Sarreal on September 26, 1961, offered to advance the fight date to October 28,
1961 which was within the 30-day period of allowable postponements provided in the
principal boxing contract of May 1, 1961.

Early in October 1961, Yulo, Jr. exchanged communications with one Mamerto Besa,
a local boxing promoter, for a possible promotion of the projected Elorde-Boysaw
titled bout. In one of such communications dated October 6, 1961, Yulo Informed
Besa that he was willing to approve the fight date of November 4, 1961 provided the
same was promoted by Besa.
While an Elorde-Boysaw fight was eventually staged, the fight contemplated in the
May 1, 1961 boxing contract never materialized.

As a result of the forgoing occurences, on October 12, 1961, Boysaw and Yulo Jr.
sued Interphil, Sarreal Sr. and Manuel Nieto, Jr. in the CFI of Rizal [Quezon City
Branch] for damages allegedly occasioned by the refusal of Interphil and Sarreal,
aided and abetted by Nieto, Jr., then Gab Chairman, to honor their commitments
under the boxing contract of May 1, 1961.

On the first scheduled date of trial, Plaintiff moved to disqualified Solicitor Jorge
Coquia of the Solicitor General’s Office and Atty. Romeo Edu of the GAB legal
department from appearing from the defendant Nieto, Jr. on the ground that the latter
had been sued in his personal capacity and, therefore, was not entitled to be
represented by the government counsel. The motion was denied insofar as Solicitor
General Coquiao was concerned, but was granted as a regards the disqualification of
Atty. Edu.

The case dragged into 1963 when sometime in the early part of the said year, Plaintiff
Boysaw left the country without informing the court and, as alleged, his counsel. He
was still abroad when, on May 13,1963, he was scheduled to take the witness stand.
Thus, the lower court reset the trial for June 20, 1963. Since Boysaw was still abroad
on the later date, another postponement was granted by the lower court for July 23,
1963 upon assurance of Boysaw’s counsel that should Boysaw fail to appear on the
said date, Plaintiff’s case would be deemed submitted on the evidence thus far
presented.

On or about July 16, 1963, Plaintiffs represented by a new counsel, filed an urgent
motion for postponement of the July 23, 1963 trial, pleading anew Boysaw’s inability
to return to the country on time. The motion was denied; so was the motion for
reconsideration filed by Plaintiffs on July 22, 1963.

The trial proceeded as scheduled on July 23, 1963 with Plaintiffs case being deemed
submitted after the Plaintiffs declined to submit documentary evidence when they had
no other witnesses to present. When defendants counsel was about to present their
case, Plaintiffs counsel after asking the court’s permission, took no further part in the
proceedings.

After the lower court rendered its judgement dismissing the Plaintiffs complaint, the
plaintiffs moved for a new trial. The motion was denied, hence, this appeal taken
directly to this Court by reason of the amount involved.

III. Issue:

From the errors assigned by the Plaintiffs, as having been committed by the lower
court, the following principal can be deduced:

1. Whether or not there was a violation of the fight contract of May 1, 1961;
and if there was who was guilty of such violation.

2. Whether or not there was legal ground for the postponement of the fight
date from September 1, 1961, as stipulated in the May 1, 1961 boxing
contract to November 4, 1961.

3. Whether or not the lower court erred in the refusing a postponement of the
July 23, 1963 trial.
 4. Whether or not the lower court erred in denying the appellant’s motion for
a new trial.
5. Whether or not the lower court, on the basis of the evidence adduced,
erred in awarding the appelants damages of the character and amount
stated in the decision.

On the issue pertaining to the violence of May 1, 1961 fight contract, the evidence
established that the contract was violated by appellant Boysaw himself , when without the
approval or consent of Interphil, he fought Louis Avila on June 19, 1961 in Las Vegas,
Nevada. Appellant Yulo admitted this fact during the trial.

While the contract imposed no penalty for such violation, this dpes not grant any of the
parties the unbridled liberty to breach it with impunity. Our law on contracts recognizes
the principle that actionable injury inheres in every contractual breach.

IV. Ruling:

The award of moral damages in the instant case is not based on any of the cases
enumerated in Art. 2219 of the Civil Code. The action herein brought bt plaintiffs-
appellants is based on a perceived breach committed by the defendants-appellees of
the contract of May 1, 1961, and cannot, as such, be arbitrarily considered as a case of
malicious prosecution.
Moral damages cannot be imposed on a party litigant although such litigant exercises
it erroneously because if the action has been erroneously filed, such litigant maybe
penalized the costs.

WHEREFORE, except for the award of moral damages which is herein deleted, the
decision of the lower court is hereby affirmed.

SO ORDERED.
I.
I.Title: BUENAVENTURA ANGELES, ET AL., plaintiffs-appellees, vs. URSULA
TORRES CALASANZ, ET AL., defendants-appellants.

II.Citation: 135 SCRA 323; No. L-42283 March 18, 1985

III.Facts:

On December 19, 1957, defendants-appellants Ursula Torres Calasanz and Thomas

Calasanz and plaintiffs-appellees Buenaventura Angeles and Teofila Juani entered
into a contract to sell a piece of land located into Cainta, Rizal for the amount of
P3,920.00 plus 7% interest per annum.

The plaintiffs-appellees made a down payment of P392.00 upon the executionof the
contract. They promised to pay the balance in monthly installments of P41.20 until
fully paid, the installments being due and payable on the 19th day of each month. The
plaintiffs-appellees paid the monthly installments until July 1966, when their
aggregate payment already amounted to P4,533.38. On numerous occasions, the
defendants-appellants accepted and received delayed installment payments from the
plaintiffs-appellees.

On December 7, 1966, the defendants-appellants cancelled the said contract because

the plaintiff-appellees failed to meet subsequent payments. The plaintiffs’ letter with
their plea for reconsideration of the said cancellation was denied by the defendants-
appellants.

The plaintiffs-appellees filed Civil Case No. 8943 with the court of the instance of
Rizal, 7th Judicial District, Branch X to compell the defendants-appellants to execute
in their favor the final deed of sale alleging inter alia that after computing all
subsequent payments for the land question, they found out that they have already paid
the total amount of P4,533.38 including interests, realty taxes and incidental expenses
for the registration and transfer of the land.

The defendants-appellants alleged in their answer that the complaint states no cost of
action and that the plaintiffs-appellees violated paragraph 6 of the contract to sell
when they failed and refused to pay and/or to offer to pay the monthly installments
corresponding to the month of August, 1966 for more than 5 months, thereby
constraining the defendants-appellants to cancel the said contract.

A motion for reconsideration filed by the defendants-appellants was denied.

IV.Issue:

The main issue to be resolved is whether or not the contract to sell has been
automatically and validly cancelled by the defendants-appellants.
 V.Ruling:

Thus, since the principal obligation under the contract is only P3,920.00 and the
plaintiffs-appellees 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 as
provided in paragraph 12 of the contract. The Attorney’s fees are justified.

WHEREFORE, the instant petition is DENIED for lack of merit. The decision appealed
from is AFFIRMED with the modification that the plaintiffs-appellees should pay the
balance of SIX HUNDRED SEVENTY ONE PESOS AND SIXTY-SEVEN CENTAVOS
(P671.67) without any interests.

Costs against the defendants-appelants.

SO ORDERED.
Submitted by:
Mary Grace Mayores
BSBA-III

Submitted to:
Atty. Lourdes Barrientos

Submitted on:
Oct. 5, 2007