CASE NUMBER 1: PNB VS CA

PHILIPPINE NATIONAL BANK vs. COURT OF APPEALS

Posted on February 6, 2013 by winnieclaire

[G.R. No. 107508. April 25, 1996]

FACTS: A check with serial number 7-3666-223-3, dated August 7, 1981 in the amount
of P97,650.00 was issued by the Ministry of Education and Culture payable to F. Abante
Marketing. This check was drawn against Philippine National Bank (herein petitioner).

F. Abante Marketing, a client of Capitol City Development Bank (Capitol), deposited the
questioned check in its savings account with said bank. In turn, Capitol deposited the
same in its account with the Philippine Bank of Communications (PBCom) which, in
turn, sent the check to petitioner for clearing.

Petitioner cleared the check as good and, thereafter, PBCom credited Capitols account
for the amount stated in the check. However, petitioner PNB returned the check to
PBCom and debited PBComs account for the amount covered by the check, the reason
being that there was a material alteration of the check number.

PBCom, as collecting agent of Capitol, then proceeded to debit the latters account for
the same amount. On the other hand, Capitol could not, in turn, debit F. Abante
Marketings account since the latter had already withdrawn the amount of the check.

ISSUE: WHETHER OR NOT AN ALTERATION OF THE SERIAL NUMBER OF A

CHECK IS A MATERIAL ALTERATION UNDER THE NEGOTIABLE INSTRUMENTS
LAW.

HELD: No. An alteration is said to be material if it alters the effect of the instrument. It
means an unauthorized change in an instrument that purports to modify in any respect
the obligation of a party or an unauthorized addition of words or numbers or other
change to an incomplete instrument relating to the obligation of a party.In other words, a
material alteration is one which changes the items which are required to be stated under
Section 1 of the Negotiable Instrument Law
The case at the bench is unique in the sense that what was altered is the serial
number of the check in question, an item which, it can readily be observed, is not
an essential requisite for negotiability under Section 1 of the Negotiable
Instruments Law. The aforementioned alteration did not change the relations
between the parties. The name of the drawer and the drawee were not altered.
The intended payee was the same. The sum of money due to the payee remained
the same.
If the purpose of the serial number is merely to identify the issuing government office or
agency, its alteration in this case had no material effect whatsoever on the integrity of
the check. The identity of the issuing government office or agency was not changed
thereby and the amount of the check was not charged against the account of another
government office or agency which had no liability under the check.

Petitioner, thus cannot refuse to accept the check in question on the ground that the
serial number was altered, the same being an immaterial or innocent one.

CASE NUMBER 2: HEAIRS OF BACUS VS CA

Facts:
Luis Bacus leased to private respondent Faustino Duray a parcel of agricultural land
with an area of 3,002 square meters. The lease was for six years and the contract
contained an option to buy clause. Under said option, the lessee had the exclusive and
irrevocable right to buy 2,000 square meters of the property within five years from a
year after the effectivity of the contract, at P200 per square meter. That rate shall be
proportionately adjusted depending on the peso rate against the US dollar, which at the
time of the execution of the contract was P14.00.

Close to the expiration of the contract, Luis Bacus die. Thereafter, Duray informed the
heirs of Luis Bacus, that they were willing and ready to purchase the property under the
option to buy clause.

The heirs however refused to sell the same. Said refusal to sell prompted Duray to file a
complaint for specific performance against the heirs of Bacus. He showed that he is
ready and able to meet his obligations under the contract with Bacus.

Issue:
Whether or not the petitioner can be compelled to sell the portion of the lot under the
option to buy clause.

Held:
Obligations under an option to buy are reciprocal obligations. The performance of one
obligation is conditioned on the simultaneous fulfillment of the other obligation. In other
words, in an option to buy, the payment of the purchase price by the creditor is
contingent upon the execution and delivery of a deed of sale by the debtor.

When the Durays exercised their option to buy the property their obligation was to
advise the Bacus of their decision and readiness to pay the price, they were not yet
obliged to make the payment. Only upon the Bacus actual execution and delivery of the
deed of sale were they required to pay.

Durays did not incur in delay when they did not yet deliver payment nor make a
consignation before the expiration of the contract. In reciprocal obligations, neither party
incurs in delay if the other does not comply or is not ready to comply in a proper manner
with what is incumbent upon him. Only from the moment one of the parties fulfills his
obligation, does delay by the other begin.

Heirs of Luis Bacus Vs. CA

Facts: Bacus leased a parcel of land to Faustino Duray in Cebu. The lease was for 6
years ending in 1990, the contract contained an option to buy clause. Under such option
the lessee had the exclusive and irrevocable right to buy 2000 sq meters within 5 years
after the effectivity of the contract. Close to the expiration of the contract, Bacus died
after Duray informed the heirs of Bacus that they are willing to purchase the property
under the option to buy clause. The heirs refused to sell, thus Duray filed a complaint for
specific performance against the heirs of Bacus. RTC ruled in favor of Duray, CA
affirmed.

Issue: W/o the heirs of Bacus be compelled to sell the portion of the lot under the option
to buy clause.

Held: Yes. Obligation under an option to buy is a reciprocal obligation. The performance
of one obligation is conditioned on the simultaneous fulfillment of the other obligation.
The payment of the purchase price is contingent upon the execution and delivery of the
deed of sale by the debtor. When Duray exercised their option to buy, their obligation
was to advise the Bacus heirs of their decision and readiness to pay the price. Upon the
actual execution of Bacus were they required to pay. Duray did not incur delay when
they did not yet deliver the payment nor make a consignation before the expiration of
the contract.

CASE NUMBER 3: LEUNG BEN VS OBRIEN

Heirs of Luis Bacus Vs. CA

Facts: Bacus leased a parcel of land to Faustino Duray in Cebu. The lease was for 6
years ending in 1990, the contract contained an option to buy clause. Under such option
the lessee had the exclusive and irrevocable right to buy 2000 sq meters within 5 years
after the effectivity of the contract. Close to the expiration of the contract, Bacus died
after Duray informed the heirs of Bacus that they are willing to purchase the property
under the option to buy clause. The heirs refused to sell, thus Duray filed a complaint for
specific performance against the heirs of Bacus. RTC ruled in favor of Duray, CA
affirmed.

Issue: W/o the heirs of Bacus be compelled to sell the portion of the lot under the option
to buy clause.

Held: Yes. Obligation under an option to buy is a reciprocal obligation. The performance
of one obligation is conditioned on the simultaneous fulfillment of the other obligation.
The payment of the purchase price is contingent upon the execution and delivery of the
deed of sale by the debtor. When Duray exercised their option to buy, their obligation
was to advise the Bacus heirs of their decision and readiness to pay the price. Upon the
actual execution of Bacus were they required to pay. Duray did not incur delay when
they did not yet deliver the payment nor make a consignation before the expiration of
the contract.

Leung Ben vs. OBrien - Gambling

O Brien filed an action in the court of CFGI of
Manila to recover from Leung Ben the sum of
P15,000 alleged to have been lost by OBrien to
Leung Ben in a series of gambling, banking and
percentage games:

Issue: WON OBrien can recover the money from

Leung Ben.
Held: Yes. Upon general principles, recognized
both in the civil and common law, money lost in
gambling and voluntary paid by the loser to the
winner cannot, in the absence of statute, be
recovered in a civil action. But Act. No. 1757 of
the Phil. Comm, which defines and penalized
different forms of gambling contains numerous
provisions recognizing the right to recover money
lost in gambling. It must therefore be assumed
that the action of plaintiff was based upon the
right to recovery given by section 7 of said Act,
which declares that an action may be brought
against the banker by any person losing money at
a banking or percentage game.
CASE NUMBER 4: NAVALES VS RIAS

Navales vs. Rias et. al.

FACTS:

Vicente Navales constructed a house in the land owned by Eulogia Rias. By virtue of
the decision of the justice in the action instituted by Rias against Navales, the deputy
sheriff who carried the judgment into execution was obliged to destroy the house and
remove it from the land, according to the usual procedure in the action for ejectment.

Navales filed a complaint with the CFI of Cebu claiming for damages against the
defendants. The court rendered judgment declaring that the decision entered by the
justice of peace and the execution of the order by the sheriff were illegal, that the
defendants were thereby liable for damages.

ISSUE: Whether or not the defendants were liable for damages.

HELD: No. The judgment rendered by the justice of peace for the ejectment of the
house of Navales, not having been appealed from, had become final. There was no
reason why it should not be enforced when it had already become final and acquired by
the nature of res judicata.

When the illegality of the judgment rendered by the justice of peace and the acts
performed by the sheriff in compliance therewith has not been proven, it is presumed
that the official duty has been regularly performed.

No proof has been submitted that a contract had been entered into between the plaintiff
and the defendants, or that the latter had committed illegal acts or omissions or incurred
in any kind of fault or negligence, from any of which an obligation might have arisen on
the part of the defendants to indemnify the plaintiff. For this reason, the claim for
indemnity, on account of acts performed by the sheriff while enforcing a judgment,
cannot under any consideration be sustained.

CASE NUMBER 7: SERRANO VS CENTRAL BANK

CASE NUMBER 8: SANTOS VS CA

CASE NUMBER 9: GONZALES VS PNB

CASE NUMBER 11: QUIZANA VS REDUGERIO

CASE NUMBER 15: NAMARCO VS TAN

NATIONAL MARKETING CORPORATION VS.

FEDERATION OF UNITED NAMARCO
DISTRIBUTORS, INC.
49 SCRA 238

FACTS:
On November 16, 1959, the NAMARCO and the
FEDERATION entered into a Contract of Sale stipulating
among others that Two Hundred Thousand Pesos
(P200,000.00) be paid as part payment, and
FEDERATION deposits with the NAMARCO upon signing
of the items and/or merchandise a cash basis payment
upon delivery of the duly indorsed negotiable shipping
document covering the same. To insure payment of the
goods by the FEDERATION, the NAMARCO accepted
three domestic letters of credit which is an accepted draft
and duly executed trust receipt approved by the Philippine
National Bank.

Upon arrival of the goods in Manila in January,

1960, the NAMARCO billed FEDERATION Statement of
Account for P277,357.91, covering shipment of the 2,000
cartons of PK Chewing Gums, 1,000 cartons of Juicy Fruit
Chewing Gums, and 500 cartons of Adams Chicklets;
Statement of Account of P135,891.32, covering shipment of
the 168 cartons of Blue Denims; and Statement of Account
of P197,824.12, covering shipment of the 183 bales of
Khaki Twill, or a total of P611,053.35. Subsequently, it was
received by FEDERATION on January 29, 1960. However,
on March 2, 1960 FEDERATION filed a complaint against
Namarco for undelivery of some items contained in the
contract of sale. FEDERATION refuses to pay
acknowledge the domestic letters of credit until full
delivery is done by NAMARCO.

ISSUE:
Should FEDERATION be obliged to pay the
amount of the merchandise even if there was still
incomplete delivery of items by NAMARCO?

RULING:
Yes. The right of the NAMARCO to the cost of the
goods existed upon delivery of the said goods to the
FEDERATION which, under the Contract of Sale, had to
pay for them. Therefore, the claim of the NAMARCO for
the cost of the goods delivered arose out of the failure of
the FEDERATION to pay for the said goods, and not out of
the refusal of the NAMARCO to deliver the other goods to
the FEDERATION. Furthermore, FEDERATIONs nonpayment
would result to it being unjustly enriched.
However, the lower court erred in imposing interest at the
legal rate on the amount due, "from date of delivery of the
merchandise", and not from extra-judicial demand. In the
absence of any stipulations on the matter, the rule is that
the obligor is considered in default only from the time the
obligee judicially or extra-judicially demands fulfillment of
the obligation and interest is recoverable only from the
time such demand is made. There being no stipulation as
to when the aforesaid payments were to be made, the
FEDERATION is therefore liable to pay interest at the legal
rate only from June 7, 1960, the date when NAMARCO
made the extra-judicial demand upon said party.