Nov 29, 2009

Civil Law 2- ObliCon- Ernesto Ang and Rosalinda Ang vs. Court of Appeals and Lee Chuy Realty Corporation

This case is with regard to Art 1170 of the NCC- Damages

Ernesto Ang and Rosalinda Ang vs. C.A. and Lee Chuy Realty Corporation
GR No 80058 13February 1989

Facts:
On December 1979 Lee Chuy Realty Corporation (buyer) issued in favour of Ernesto and Rosalinda Ang (seller), MBTC check in the amount of 50,000.00 as initial down payment for the purchase of the property. In the receipt that was accompanied the payment it supposedly embodied the terms and conditions of their agreement. This accompanying receipt was not returned and instead the buyers where sent another receipt prepared and signed by the Angs. The first receipt indicated the purchase price of 1.6 million while the new receipt did not. On January 12, 1980 the seller informed the buyer that they only have until January 24,1980 to pay the balance of the purchase price, with which the failure to do so will result in the cancellation of their agreement.
In response the buyers duly informed the sellers that they have been ready to comply with the obligation, while the sellers have not yet complied with their obligation to clear the subject properties of the obstructions thereon. By March 3, 1980 the buyers through their counsel, demanded for the refund of the down payment on account of the failure of the sellers to comply with their obligations, and their subsequent withdrawal from the sale. After the failure of the sellers to return the 50,000.00 the buyers filed a complaint for the collection of a sum of money plus damages before the RTC. The RTC decided in favour of the sellers. On appeal, the Court of Appeals overturned the decision of the RTC and held that it was the sellers that committed the breach of agreement.

Issue:
Was the court of Appeals correct in holding the Angs liable for breach of the agreement?

- Yes, as was shown the sellers breached the agreement when they failed to fulfil the obligation incumbent upon them namely: (1) That seller will undertake to remove and clear the subject property of all occupants and obstructions within the month of December 1979 and (2) That when the subject property is cleared of all occupants and obstructions, the seller shall deliver a deed of absolute sale in favour of private respondent with all pertinent papers necessary for the issuance of a certificate of title in the name of the buyer.
- It was the failure of the seller to comply with aforementioned conditions of the agreement that caused the delay in the payment of the obligation of the buyer (which is to pay the balance of the total payment on or before January 24, 1980).  this was merely a slight breach of agreement and does not merit a rescission of the contract
- Furthermore, the seller refused to proceed with the sale unless the buyer agreed to the higher price of 2,340,000.00 the seller with this action committed a serious breach of agreement. There already existed a perfected contract of sale between the parties and the purchase price was set at 1,600,000.00. The seller cannot increase the price that was agreed upon, without the consent of the buyer.  the disagreement with the price due to the seller’s refusal to sell means that it is a serious breach of contract and that it grants the buyer the right to rescind the agreement

Held:
The decision of the Court of Appeals is Affirmed. (As a consequence of the resolution of the sale, the parties should be restored to their original situation. Seller should refund the down payment with legal interest from the date of the extra-judicial demand made on March 3, 1980.)

Obligations and Contracts terms:
Reciprocal Obligations- The power to rescind is implied and any of the contracting parties may, upon non-fulfilment by the other party of his part of the obligation, resolve the contract. It shall not be permitted for slight or casual breaches of contract. It may only be granted on breaches that are so substantial and fundamental as to defeat the object of the parties making the agreement.

I hope this helps.

Jeff David

Civil Law 2- Olivia Navoa and Ernesto Navoa vs. Court of Appeals, Teresita Domdoma and Eduardo Domdoma

This case is with regard to Art 1169 of the NCC - Delay

Olivia Navoa and Ernesto Navoa vs. C.A., Teresita Domdoma and Eduardo Domdoma
GR No 59255 20December1995
Facts:
On December 1977 Teresita Domdoma and Eduardo Domdoma filed a case with the RTC for collection of various sums of money based on loans given by them to Olivia Navoa. They cased was dismissed on the ground that there was no cause of action and that the Domdoma’s do not have no capacity to sue. They appealed to the C.A. and was granted a favourable decision.
There were 6 instances in which the Domdoma’s gave Olivia Navoa a loan. The first instance is when Teresita gave Olivia a diamond ring valued at 15,000.00 which was secured by a PCIB check under the condition that if the ring was not returned within 15 days from August 15, 1977 the ring is considered sold. Teresita attempted to deposit the check on November 1977 but the check was not honoured for lack of funds. After this instance, there were other loans of various amounts that were extended by Teresita to Olivia, loans which were secured by PCIB checks, which were all dated to 1 month after the loan. All these checks were not honoured under the same reason as the first loan.
Issue:
Was the decision of the RTC to dismiss the case due to having no cause of action valid?
- NO, A cause of action is the fact or combination of facts which affords a party a right to judicial interference in his behalf.
- For the first loan it is a fact, that the ring was considered sold to Olivia Navoa 15 days after August 15, 1977, and even then, Olivia Navoa failed to pay the price for the ring when the payment was due (check issued was not honoured. Thus it is confirmed that Teresita’s right under the agreement was violated.
- As for the other loans extended by Teresita to Olivia, they were all secured by PCIB checks. It can be inferred that since the checks were all dated to 1 month after the loan, it follows that the loans are then payable 1 month after they were contracted, and also these checks were dishonoured by the bank for lack of funds.
- Olivia and Ernesto Navoa failed to make good the checks that were issued as payment for their obligations. Art 1169 of the Civil Code is explicit: those obliged to deliver or to do something incur in delay from the time the obligee judicially or extra-judicially demands from them the fulfilment of the obligations, the continuing refusal of Olivia and Ernesto Navoa to comply with the demand of payment shows the existence of a cause of action.

Held:
The petition is DENIED and the decision of the C.A. remanding the case to the RTC for trial on the merits is affirmed.

Obligations and Contracts terms:
Security- A means of ensuring the enforcement of an obligation or of protecting some interest in property. It may be personal or property security.
Cause of Action- is the fact or combination of facts which affords a party a right to judicial interference in his behalf. The requisites for a cause of action are: (a) a right in favour of the plaintiff by whatever means and under whatever law it arises or created, (b) an obligation on the part of the defendant to respect and not to violate such right; and, (c) an act or omission on the part of the defendant constituting a violation of the plaintiff’s right or breach of the obligation of the defendant to the plaintiff.

I hope this helps.

Jeff David

Nov 25, 2009

Civil Law 2- ObliCon- MMTC and Apolinario Ajoc vs. C.A. and Col. Sabalburo et al

This case is with regard to Art 1162- Culpa Aquiliana


Case of Metro Manila Transport Corporation and Apolinario Ajoc vs. C.A. and Col. Sabalburo et al
G.R.No. 141089 01August2002

FACTS OF THE CASE:

Last December 24 1986 Florentina Sabalburo and her companions were making their way to Baclaran to buy foodstuffs for Noche Buena. Florentina Sabalburo and her companions waited for the traffic light to turn red so that they could cross the street to take a ride to Baclaran. Upon crossing the street during the red light, Florentina Sabalburo was hit by a fast moving MMTC bus, driven by Apolinario Ajoc.
Ms. Sabalburo was then taken by the driver and conductress of the MMTC bus to San Juan de Dios hospital. The victim was not able to regain consciousness and she succumbed to her injuries on January 03, 1987. The Trial court decided in favor of Sabalburo et. al and ordered MMTC to pay damages. MMTC then appealed the case to the Court of Appeals which affirmed the decision of the trial court.

ISSUES OF THE CASE:

Was the RTC and CA correct in ordering MTCC to pay damages to the plaintiff?

- Yes, According to the S.C. both courts are correct in awarding damages to the plaintiff.
- Even though MMTC argues that the proximate cause of the victim’s death is her negligence thus requesting the court to apply Art 2179 of the civil code, instead of Art 2176, the S.C upheld the findings of the trial courts that the driver and MMTC had been negligent in its duties and it is this negligence that led to the death of the victim thus showing that Art 2176 is the more applicable provision in this case.
- Also MMTC is liable for the death of the victim due to Art 2180 of the civil code, wherein the obligation imposed by Article 2176 is demandable not only for one’s own acts or omissions-, but also for those of persons for whom one is responsible.
- It should be shown that whenever an employee’s negligence causes damage or injury to another, there instantly arises a presumption juris tantum that there was negligence on the part of the employer, either in the selection of the employee (culpa in eligiendo) or the supervision over him after the selection (culpa in vigilando). Hence, to escape solidary liability for a quasi-delict committed by his employee, an employer must rebut the presumption by presenting convincing proof that in the selection and supervision of his employee, he has exercised the care and diligence of a good father of a family. In the present case, petitioner MMTC failed to rebut the presumption of negligence on its part.

HELD:

The Decision of the Court of Appeals is affirmed.

Obligations and Contracts Terms:

CULPA AQUILIANA-
refers to acts or omissions which cause damage to another, there being fault or negligence on the part of the defendant, who is obliged by law to pay for the damages done.

Art 2176 of the Civil Code is applied if there’s no pre-existing contractual relation between the parties. Although the Supreme Court has already held that a quasi- delict can occur even if there is a contractual relation, since the act that lead to the breaking a contract may also be a tort

I hope this helps.

Jeff David

Nov 24, 2009

Civil Law 2- ObliCon- F.F. Manacop Construction Co. Inc., vs. CA and MIAA

This case is with reference to Art 1160 of the New Civil Code- Quasi- Contracts

Case of FF. MAÑACOP CONSTRUCTION CO., INC. VS. C.A. and MIAA
G.R.No. 122196 15January1997


FACTS OF THE CASE:
Ff Mañacop Construction Company Inc, was contracted by MIAA to construct a perimeter fence from Asia Overseas Inc to Airscope Development Corp. for and in consideration of the quoted price of 307,440.00 Due to the urgency of the need, FFMCC proceeded with the fence construction even if the Notice to Proceed has not yet been signed by the General Manager.
After the Feb 1986 Revolution, the new general manager of MIAA stopped the construction of said fence, by the time of the halt in construction it is already 95% finished which was worth 282,068.00.
After making repeated demands to make MIAA pay for the constructed fence, FMCC filed a case against MIAA. During trial it has been found that MIAA is liable to pay 238,501.48 based upon quantum meruit since there is an absence of a written contract between parties. On appeal the Court agreed with MIAA with regard to the error of the trial court in the valuation of the obligation. According to the decision of the Appellate Court, the computation for the obligation owed by MIAA should be referred to the Commission on Audit, as was shown in the case of Eslao v. Commission on Audit.

ISSUES OF THE CASE:

Was the RTC correct in ordering MIAA to pay FMCC on the basis of Quantum Meuit?

- Yes. The S.C. basing its decision on the Eslao case, it was shown the contract was not fraudulent or mala in se, also it has been shown that the project was already covered by a specific appropriation.
- Property or benefit is not ultra vires (they can be a subject of an express contract and are within the contractual powers of the public body)
- It is shown as well that MIAA was reaping the benefits from the scallop fence and wire placed by the petitioner.
- It is also shown that the payment is limited to the actual cost of chargeable against funds authorized and certified for such purpose.
- Unliquidated claims present a justiciable question ripe for judicial determination which is beyond the powers of COA to adjudicate.

[ The difference between the Eslao case and this one, is that the matter was referred to the COA for the Eslao case because the matter on the exact amount was not at issue and the determination thereof involves a review of the factual findings and evidence in support thereof. For this case the Lower court has already determined the actual amount owed by MIAA to FMCC, so there was no need for referral to COA]

HELD:

The decision of the Court of Appeals is set aside and the decision of the RTC is reinstated.

Obligations and Contracts Terms:

Difference of Quantum Meruit from Quantum Valebant- Quantum Meruit allows recovery of the reasonable value regardless of any agreement as to value. It entitles the party to “as much as he, reasonable deserves”, as distinguished from Quantum Valebant or to “as much as what is reasonably worth.”



I hope this helps.

Jeff David

Nov 23, 2009

Civil Law 2- ObliCon- TRB Employees Union- Independent vs. NLRC and Emmanuel Noel A. Cruz

This case is with reference to Art 1160 of the New Civil Code- Quasi- Contracts
Case of Traders Royal Bank Employees Union- Independent vs NLRC and Emmanuel Noel A. Cruz
G.R.No. 120592 14March1997

FACTS OF THE CASE:
That TRB Employees Union, had a retainer agreement with Atty. Cruz, for 3,000.00 in consideration of the law firm’s undertaking to render the services enumerated in their contract. During the existence of the agreement the union referred to the private respondent the claims of its members for holiday, mid-year and year-end bonuses against their employer TRB.
The NLRC granted the petition of the union with regard to the demand for bonuses. After, the S.C. acting upon the challenge of TRBank of the NLRC decision in its decision on August 30, 1990 modified the decision of the NLRC by deleting the award of mid- year and year- end bonus differentials while affirming the award of holiday pay differential.

After TRB voluntarily complied with the decision, the respondent on September 18, 1990 notified the union, TRB management, and the NLRC of his right to exercise and enforce his attorney’s lien over the award of holiday pay differential through a letter dated October 8, 1990.

ISSUES OF THE CASE:

Was the lien made by the respondent attorney over the award as attorney’s fees valid?

- Yes, Because the contract between the Union and the attorney stipulates that the 3,000.00 paid as retainer fees is intended merely as a consideration for the law firm’s commitment to render the services enumerated on PART A and B of the retainer agreement.
- The retainer fee paid by the Union is not a payment for the firm’s execution or performance of the services listed in the contract, subject to the particular qualifications.
- Obligations do not emanate only from contracts. One of the sources of extra- contractual obligations found in our civil code is the quasi contract premised on the roman maxim that nemo alterius detrimento locupletari potest
- As early as 1903 the court has allowed the payment of reasonable professional fees to an interpreter, not withstanding the lack of understanding with his client as to his remuneration, on the basis a quasi-contract. It is not necessary that the parties agree on a definite fee for the special services rendered by the firm in order that the union may be obligated to pay compensation. Equity and fair play dictate that petitioner should pay the same after it accepted, availed itself of, and benefited from the firm’s services.
- The measure of compensation for private respondent’s services as against his client should be properly addressed by the rule of quantum meruit is used as the basis for determining the lawyer’s professional fees in the absence of a contract.
HELD:
The resolution of the NLRC with regard to the attorney’s fees is modified, and Union is hereby ordered to pay 10,000 for the firm’s rendered services.

Obligations and Contracts Terms:

• General Retaining Fee- is the fee paid to a lawyer to secure his future services as general counsel for any ordinary legal problem that may arise from routinary business of the client and referred to him for legal action. The reason for the remuneration is that the lawyer is deprived of the opportunity of rendering services for a fee to the opposing party or other parties. It is a compensation for lost opportunities.

I hope this helps.

Jeff David

Civil Law 2- ObliCon- Pichel vs. Alonzo

This case is with reference to Art 1157 of the New Civil Code- Sources of Contracts

Case of Luis Pichel vs. Prudencio Alonzo
G.R.No. L- 36902 30January1982

FACTS OF THE CASE:
That Prudencio Alonzo (VENDOR) executed a deed of sale for the coconut fruits of his land in Balactasan Plantation in Lamitan, Basilan, in favor of Luis Pichel (VENDEE). The land from which the subject coconut fruits are derived from was subjected to a cancellation of the award in 1965, due to the reason of violation of the law that disallows alienation of land (the vendor’s rights to the land were reinstated in 1972)
The vendor and his wife sold to the vendee the fruits of the coconut trees from 1968 to 1976 for consideration of 4,200. Even during the date of sale, the land was still leased to one Ramon Sua, and it was part of the agreement of the sale that the sum of 3,650.00 was to be paid by the vendor to Ramon Sua as to release the land.
The RTC decided in favor of the vendor, due to the fact that the deed of sale that was executed was invalid, due to its supposed violation of RA No. 477, in which they equated the deed of sale executed by the parties as a contract of lease.

ISSUES OF THE CASE:

Was the Deed of Sale valid?

- Yes, The RTC erred in constructing the deed of sale as a contract of lease.
- There was no need on the part of the RTC to interpret the contract, since there was no ambiguity, it merely contracts the sale of the fruits of the land, not the land itself.
- The S.C. relied upon ART 1370 of the Civil Code, regarding the rule on interpreting contracts.
- Its interpretation in express form is the preferred. Construction shall be employed when such literal interpretation is impossible.
- The possession of the coconut fruits for 7 years is different from possession of the land, since the coconut fruits are mere accessories and the land is the principal- a transfer of accessories does not necessarily mean a transfer of principal, it is the other way around.
- The vendor after having received the consideration for the sale of his coconut fruits cannot be allowed to impugn the validity of the contracts he entered into, to the prejudice of petitioner who contracted in good faith and consideration

HELD:
The Judgment of the lower court has been set aside, and another one entered in its place, dismissing the complaint.

Obligations and Contracts Terms:

• Difference between a contract of sale and a lease of things: that the delivery of the thing sold transfers ownership, while in a lease no such transfer of ownership results as the rights of the lessee are limited to the use and enjoyment of the thing leased.
• Contract of Lease- defined as giving or the concession of the enjoyment or use of a thing for a specified time and fixed price.

I hope this helps.

Jeff David

Nov 16, 2009

Civil Law 2- ObliCon- FGU Insurance vs. GPS Trucking

This case is with reference to Art 1159 of the New Civil Code

Case of FGU INSURANCE CORPORATION vs. G.P.S TRUCKING CORPORATION and LAMBERT M. EROLES
G.R.No. 141910 06August2002

FACTS OF THE CASE:
G.P. Sarmiento Trucking Corporation (GPS) undertook to deliver on 18 June 1994 thirty (30) units of Condura S.D. white refrigerators aboard one of its Isuzu truck, driven by Lambert Eroles. While the truck was traversing the north diversion road along McArthur highway in Barangay Anupol, Bamban, Tarlac, it collided with an unidentified truck, causing it to fall into a deep canal, resulting in damage to the cargoes.
FGU Insurance Corporation (FGU), an insurer of the shipment, paid to Concepcion Industries, Inc., the value of the covered cargoes: P204, 450.00. FGU, in turn, being the subrogee of the rights and interests of the insured sought reimbursement of the amount, from GPS. Since GPS failed to heed the claim, FGU filed a complaint for damages and breach of contract of carriage against GPS and its driver with the Regional Trial Court, Branch 66, of Makati City. In its answer, respondents asserted that GPS was the exclusive hauler only of Concepcion Industries, Inc., since 1988, and it was not so engaged in business as a common carrier. Respondents further claimed that the cause of damage was purely accidental. GPS, instead of submitting its evidence, filed with leave of court a motion to dismiss the complaint by way of demurrer to evidence on the ground that petitioner had failed to prove that it was a common carrier. The RTC and CA both ruled in favor of the Respondent.

ISSUES OF THE CASE:

WHETHER RESPONDENT GPS, EITHER AS A COMMON CARRIER OR A PRIVATE CARRIER, MAY BE PRESUMED TO HAVE BEEN NEGLIGENT WHEN THE GOODS IT UNDERTOOK TO TRANSPORT SAFELY WERE SUBSEQUENTLY DAMAGED WHILE IN ITS PROTECTIVE CUSTODY AND POSSESSION.

- In culpa contractual, upon which the action of petitioner rests as being the subrogee of Concepcion Industries, Inc., the mere proof of the existence of the contract and the failure of its compliance justify, prima facie, a corresponding right of relief. Thus, FGU has a claim for the amount paid out.
- The law, recognizing the obligatory force of contracts, will not permit a party to be set free from liability for any kind of misperformance of the contractual undertaking or a contravention of the tenor thereof
- GPS recognizes the existence of a contract of carriage between it and petitioner’s assured, and admits that the cargoes it has assumed to deliver have been lost or damaged while in its custody. In such a situation, a default on, or failure of compliance with, the obligation in this case, the delivery of the goods in its custody to the place of destination - gives rise to a presumption of lack of care and corresponding liability on the part of the contractual obligor the burden being on him to establish otherwise. GPS has failed to do so.

HELD:
The decision of the lower courts insofar as Lambert M. Eroles is concerned is affirmed but assailed decision with regard to GPS trucking is reversed. It, is hereby ordered to pay FGU Insurance Corporation the value of the damaged and lost cargoes in the amount of P204, 450.00

Obligations and Contracts Terms:

• expectation interest- the interest in having the benefit of his bargain by being put in as good a position as he would have been in had the contract been performed
• reliance interest- the interest in being reimbursed for loss caused by reliance on the contract by being put in as good a position as he would have been in had the contract not been made
• Restitution interest- which is his interest in having restored to him any benefit that he has conferred on the other party.
• Subrogee- the person or entity that assumes the legal right to attempt to collect a claim of another (subrogor) in return for paying the other's expenses or debts which the other claims against a third party. A subrogee is usually the insurance company which has insured the party whose expenses were paid.

I hope this helps.

Jeff David