Dela Cruz v Concepcion (Civil Procedure)

FACTS:

On March 25, 1996, petitioners entered into a Contract to Sell with respondent
involving a house and lot in Antipolo City for a 2 million consideration.

Respondent made the following payments, to wit:

(1) 500,000 by way of downpayment;

(2) 500,000 on May 30, 1996;

(3) 500,000 paid on January 22, 1997; and

(4) 500,000 bounced check dated June 30, 1997 which was replaced.

Thus, Respondent was able to pay the 2 million total obligation.

Before respondent issued the 500,000 replacement check, she told petitioners that
based on the computation of her accountant as of July 6, 1997, her unpaid
obligation which includes interests and penalties was only 200,000. Petitioners
agreed with respondent. Despite repeated demands, petitioners failed to collect the
amounts they claimed. Hence, the complaint for sum of money with damages filed
with the RTC of Antipolo Rizal. In her answer with Compulsory counterclaim and
during the presentation of evidence, respondent presented a receipt purportedly
indicating payment of the remaining balance of 200,000 to Losloso who allegedly
received the same on behalf of petitioners.

On March 8, 2014, the RTC rendered a decision in favor of respondent. On appeal,

the CA affirmed the decision with modification by deleting the award of moral
damages and attorney's fees in favor of respondent. Aggrieved, petitioners come
before the Court in this petition for review on certiorari under Rule 45.

ISSUE:

Whether it was proper to dismiss the complaint based on the ground that the
defendant fully paid the claims of plaintif

HELD:

Yes.

When the issue is tried without the objection of the parties, it should be treated with
all respects as if it had been raised in the pleadings. On the other hand, when there
is an objection, the evidence may be admitted where its admission will not prejudice
him.
Thus, while respondent judicially admitted in her answer that she only paid 2 million
and that she still owed petitioners 200,000, respondent claimed later and in fact,
submitted an evidence to show that she already paid the whole amount of her
unpaid obligation. It is noteworthy what when respondent presented evidence of
payment, petitioners did not object thereto.

To be sure, petitioners were given ample opportunity to refute the fact of and
present evidence to prove payment.

Caltex v IAC

FACTS: On January 12, 1978, private respondent Asia Pacific Airways Inc. entered
into an agreement with petitioner Caltex (Philippines) Inc., whereby petitioner
agreed to supply private respondent's aviation fuel requirements for two (2) years,
covering the period from January 1, 1978 until December 31, 1979. Pursuant
thereto, petitioner supplied private respondent's fuel supply requirements.

As of June 30, 1980, private respondent had an outstanding obligation to petitioner

in the total amount of P4,072,682.13, representing the unpaid price of the fuel
supplied. To settle this outstanding obligation, private respondent executed a Deed
of Assignment dated July 31, 1980, wherein it assigned to petitioner its receivables
or refunds of Special Fund Import Payments from the National Treasury of the
Philippines to be applied as payment of the amount of P4,072,683.13 which private
respondent owed to petitioner. On February 12, 1981, pursuant to the Deed of
Assignment, Treasury Warrant No. B04708613 in the amount of P5,475,294.00
representing the refund to respondent of Special Fund Import Payment on its fuel
purchases was issued by the National Treasury in favor of petitioner. Four days later,
on February 16, 1981, private respondent, having learned that the amount remitted
to petitioner exceeded the amount covered by the Deed of Assignment, wrote a
letter to petitioner, requesting a refund of said excess.

Petitioner, acting on said request, made a refund in the amount of P900,000.00 plus
in favor of private respondent. The latter, believing that it was entitled to a larger
amount by way of refund, wrote petitioner anew, demanding the refund of the
remaining amount. In response thereto, petitioner informed private respondent that
the amount not returned (P510,550.63) represented interest and service charges at
the rate of 18% per annum on the unpaid and overdue account of respondent from
June 1, 1980 to July 31, 1981.

Thus, on September 13, 1982, private respondent filed a complaint against

petitioner in the Regional Trial Court of Manila, to collect the sum of P510,550.63.00.

Petitioner (defendant in the trial court) filed its answer, reiterating that the amount
not returned represented interest and service charges on the unpaid and overdue
account at the rate of 18% per annum. It was further alleged that the collection of
said interest and service charges is sanctioned by law, and is in accordance with the
terms and conditions of the sale of petroleum products to respondent, which was
made with the conformity of said private respondent who had accepted the validity
of said interest and service charges.

On November 7, 1983, the trial court rendered its decision dismissing the complaint,
as well as the counterclaim filed by defendant therein. Private respondent (plaintif)
appealed to the Intermediate Appellate Court (IAC). On August 27, 1985, a decision
was rendered by the said appellate court reversing the decision of the trial court,
and ordering petitioner to return the amount of P510,550.63 to private respondent.

ISSUE: Whether or not there is a valid dation in payment in this case.

RULING: The Supreme Court ruled that the Deed of Assignment executed by the
parties on July 31, 1980 is not a dation in payment and did not totally extinguish
respondent's obligations as stated therein.

The then Intermediate Appellate Court ruled that the three (3) requisites of dacion
en pago are all present in the instant case, and concluded that the Deed of
Assignment of July 31, 1980) constitutes a dacion in payment provided for in Article
1245 of the Civil Code which has the efect of extinguishing the obligation, thus
supporting the claim of private respondent for the return of the amount retained by
petitioner.

The Supreme Court, speaking of the concept of dation in payment, in the case of
Lopez vs. Court of Appeals, among others, stated: "'The dation in payment
extinguishes the obligation to the extent of the value of the thing delivered, either
as agreed upon by the parties or as may be proved, unless the parties by
agreement, express or implied, or by their silence, consider the thing as equivalent
to the obligation, in which case the obligation is totally extinguished."

From the above, it is clear that a dation in payment does not necessarily mean total
extinguishment of the obligation. The obligation is totally extinguished only when
the parties, by agreement, express or implied, or by their silence, consider the thing
as equivalent to the obligation. In the instant case, the then Intermediate Appellate
Court failed to take into account the express recitals of the Deed of Assignment.

"That Whereas, ASSIGNOR has an outstanding obligation with ASSIGNEE in the

amount of P4,072,682.13 as of June 30, 1980, plus any applicable interest on
overdue account. Now therefore in consideration of the foregoing premises,
ASSIGNOR by virtue of these presents, does hereby irrevocably assign and transfer
unto ASSIGNEE any and all funds and/or Refund of Special Fund Payments, including
all its rights and benefits accruing out of the same, that ASSIGNOR might be entitled
to, by virtue of and pursuant to the decision in BOE Case No. 80-123, in payment of
ASSIGNOR's outstanding obligation plus any applicable interest charges on overdue
account and other avturbo fuel lifting and deliveries that ASSIGNOR may from time
to time receive from the ASSIGNEE, and ASSIGNEE does hereby accepts such
assignment in its favor."

Hence, it could easily be seen that the Deed of Assignment speaks of three (3)
obligations (1) the outstanding obligation of P4,072,682.13 as of June 30, 1980; (2)
the applicable interest charges on overdue accounts; and (3) the other avturbo fuel
lifting and deliveries that assignor (private respondent) may from time to time
receive from assignee (Petitioner). As aptly argued by petitioner, if it were the
intention of the parties to limit or fix respondent's obligation to P4,072.682.13, they
should have so stated and there would have been no need for them to qualify the
statement of said amount with the clause "as of June 30, 1980 plus any applicable
interest charges on overdue account" and the clause "and other avturbo fuel lifting
and deliveries that ASSIGNOR may from time to time receive from the ASSIGNEE".

The terms of the Deed of Assignment being clear, the literal meaning of its
stipulations should control. In the construction of an instrument where there are
several provisions or particulars, such a construction is, if possible, to be adopted as
will give efect to all.

Likewise, the then Intermediate Appellate Court failed to take into consideration the
subsequent acts of the parties which clearly show that they did not intend the Deed
of Assignment to totally extinguish the obligation: (1) After the execution of the
Deed of Assignment on July 31, 1980, petitioner continued to charge respondent
with interest on its overdue account up to January 31, 1981. This was pursuant to
the Deed of Assignment which provides for respondent's obligation for "applicable
interest charges on overdue account". The charges for interest were made every
month and not once did respondent question or take exception to the interest; and
(2) In its letter of February 16, 1981, respondent addressed the following request to
petitioner:

In order to judge the intention of the contracting parties, their contemporaneous

and subsequent acts shall be principally considered (Art. 1253, Civil Code). The
foregoing subsequent acts of the parties clearly show that they did not intend the
Deed of Assignment to have the efect of totally extinguishing the obligations of
private respondent without payment of the applicable interest charges on the
overdue account.

Finally, the payment of applicable interest charges on overdue account, separate

from the principal obligation of P4,072,682.13 was expressly stipulated in the Deed
of Assignment. The law provides that "if the debt produces interest, payment of the
principal shall not be deemed to have been made until the interests have been
covered." (Art. 1253, Civil Code).
Filipino Pipe v Nawasa

FACTS

NAWASA entered into a contract with the plaintif FPFC for the latter to supply iron
pressure pipes worth P270,187.50 to be used in the construction of the Anonoy
Waterworks in Masbate and the Barrio San Andres-Villareal Waterworks in Samar.

NAWASA paid in installments on various dates, a total of P134,680.00 leaving a

balance of P135,507.50 excluding interest.

FPFC demanded payment from NAWASA of the unpaid balance of the price with
interest in accordance with the terms of their contract

NAWASA failed to pay, plaintif filed a collection suit

RTC rendered judgment orderedNAWASA to pay the unpaid balance in NAWASA

negotiable bonds

NAWASA did not deliver the bonds to the judgment creditor

FPFC filed another complaint seeking an adjustment of the unpaid balance in

accordance with the value of the Philippine peso

FPFC presented voluminous records and statistics showing that a spiralling inflation
has marked the progress of the country from 1962 up to the present. There is no
denying that the price index of commodities, which is the usual evidence of the
value of the currency has been rising.

ISSUE

W/N there exists an extraordinary inflation of the currency justifying an adjustment

of NAWASA's unpaid judgment obligation to FPFC.

RULING

Article 1250 of the Civil Code provides:

In case an extraordinary inflation or deflation of the currency stipulated should

supervene, the value of the currency at the time of the establishment of the
obligation shall be the basis of payment, unless there is an agreement to the
contrary..

Extraordinary inflation exists "when there is a decrease or increase in the

purchasing power of the Philippine currency which is unusual or beyond the
common fluctuation in the value said currency, and such decrease or increase could
not have reasonably foreseen or was manifestly beyond contemplation the the
parties at the time of the establishment of the obligation. (Tolentino Commentaries
and Jurisprudence on the Civil Code Vol. IV, p. 284.)
While appellant's voluminous records and statistics proved that there has been a
decline in the purchasing power of the Philippine peso, this downward fall of the
currency cannot be considered "extraordinary." It is simply a universal trend that
has not spared our country.

Cacayorin vs. AFPMBAI

Facts: Oscar Cacayorin filed an application with AFPMBAI to purchase a property

which the latter owned through a loan facility. Oscar and his wife, Thelma, and the
Rural Bank of San Teodoro executed a Loan and Mortgage Agreement with the
former as borrowers and the Rural Bank as lender, under the auspices of PAG-IBIG.
On the basis of the Rural Bank's letter of guaranty, AFPMBAI executed in petitioners'
favor a Deed of Absolute Sale, and a new title was issued in their name. Then, the
PAG-IBIG loan facility did not push through and the Rural Bank closed. Meanwhile,
AFPMBAI somehow was able to take possession of petitioners' loan documents and
the TCT, while petitioners were unable to pay the loan for the property. AFPMBAI
made written demands for petitioners to pay the loan for the property. Then,
petitioners filed with the RTC a complaint for consignation of loan payment,
recovery of title and cancellation of mortgage annotation against AFPMBAI, PDIC
and the Register of Deeds of Puerto Princesa City. AFPMBAI filed a motion to dismiss
claiming that petitioners' Complaint falls within the jurisdiction of the Housing and
Land Use Regulatory Board (HLURB), as it was filed by petitioners in their capacity
as buyers of a subdivision lot and it prays for specific performance of contractual
and legal obligations decreed under Presidential Decree No. 957(PD 957). It added
that since no prior valid tender of payment was made by petitioners, the
consignation case was fatally defective and susceptible to dismissal.

Issue: Whether or not the case falls within the exclusive jurisdiction of the HLURB.

Ruling: No. Unlike tender of payment which is extrajudicial, consignation is

necessarily judicial; hence, jurisdiction lies with the RTC, not with the HLURB. Under
Article 1256 of the Civil Code, the debtor shall be released from responsibility by the
consignation of the thing or sum due, without need of prior tender of payment,
when the creditor is absent or unknown, or when he is incapacitated to receive the
payment at the time it is due, or when two or more persons claim the same right to
collect, or when the title to the obligation has been lost. The said provision clearly
precludes consignation in venues other than the courts.