Digests in civ rev2

Villaroel v. Estrada, G.R. No. L-47262, 19 December 1940.

19MAR

[AVANCEÑA, Pres.]

FACTS: On May 9, 1912, Alejandro F. Callao, the mother of the defendant Juan F. Villarroel, obtained
from the spouses Mariano Estrada and Severina a loan of P1,000 payable after seven years. Alejandra
died, leaving as sole heir to the defendant. The spouses Mariano Estrada and Severina also died, leaving
as sole heir the plaintiff Bernardino Estrada. On August 9, 1930, the defendant signed a document
(Exhibit B) by which it declares the applicant to owe the amount of P1,000, with an interest of 12
percent per year. This action deals with the collection of this amount.

ISSUE: Is the defendant Juan under obligation to pay the loan that already prescribed if he subsequently
declared that he owed it to plaintiff Bernardino?

HELD: YES.

Although the action to recover the original debt has already been prescribed when the claim was filed in
this case, the question that arises in this appeal is mainly whether, notwithstanding such a prescription,
the action (may be) brought. However, the present action is not based on the original obligation
contracted by the defendant’s mother, who has already been prescribed, but in which the defendant
contracted on August 9, 1930 upon assuming the fulfillment of that obligation, Already prescribed. Since
the defendant is the sole inheritor of the primitive debtor, with the right to succeed in his inheritance,
that debt, brought by his mother legally, although it has lost its effectiveness by prescription, is now,
however, for a moral obligation, which is consideration Sufficient to create and render effective and
enforceable its obligation voluntarily contracted on August 9, 1930 in Exhibit B.

The rule that a new promise to pay a pre-paid debt must be made by the same obligated person or by
another legally authorized by it, is not applicable to the present case in which it is not required to fulfill
the obligation of the obligee originally, but of which he voluntarily wanted to assume this obligation.

Ansay et al. v. National Development Company (NDC), G.R. No. L-13667, 29 April 1960.

19MAR

[PARAS, C.J.]

FACTS: Ansay et al. filed against NDC a complaint praying for a 20% Christmas bonus for the years 1954
and 1955. The trial court dismissed the complaint ratiocinating that a bonus is an act of liberality and the
court takes it that it is not within its judicial powers to command respondents to be liberal and that
Ansay et al. admitted that NDC is not under legal duty to give such bonus and that the court has no
power to compel a party to comply with a moral obligation (Art. 142, New Civil Code.). Ansay et al.
appealed and argued that there exists a cause of action in their complaint because their claim rests on
moral grounds or what in brief is defined by law as a natural obligation.
ISSUE: Is the grant of Christmas bonus for the years 1954 and 1955 demandable based on natural or
moral obligation?

HELD: NO.

Article 1423 of the New Civil Code classifies obligations into civil or natural. “Civil obligations are a right
of action to compel their performance. Natural obligations, not being based on positive law but on
equity and natural law, do not grant a right of action to enforce their performance, but after voluntary
fulfillment by the obligor, they authorize the retention of what has been delivered or rendered by
reason thereof”. It is thus readily seen that an element of natural obligation before it can be cognizable
by the court is voluntary fulfillment by the obligor. Certainly retention can be ordered but only after
there has been voluntary performance. But here there has been no voluntary performance. In fact, the
court cannot order the performance.

DBP VS CONFESOR G.R. No. 48889 May 11, 1988

FACTS:

On February 10, 1940, spouses Patricio Confesor and Jovita Villafuerte obtained an agricultural loan
from Agricultural and Industrial Bank, now Development Bank of the Philippines, in the sum of P2,000,
as evidenced by a promissory note of said date whereby they bound themselves jointly and severally to
pay the amount in ten equal yearly amortizations.

As the obligation remained unpaid even after the lapse if the ten-year period, Confesor, who was then a
member of the Congress of the Philippines, executed a second promissory note on April 11, 1961,
expressly acknowledging the said loan and promising to pay the same on or before June 15, 1961.

The spouses still failed to pay the obligation on the specified date. As a result, the DBP filed a complaint
on September 11, 1970 in the City Court of Iloilo City. The city court ordered payment from spouses. The
CFI of Iloilo reversed the decision. Hence, this petition.

ISSUE: Whether or not a promissory which was executed in consideration of a previous promissory note
which has already been barred by prescription is valid.

HELD: Yes, the second promissory note is valid because the said promissory note is not a mere
acknowledgement of the debt that has prescribed already. Rather, it is a new promise to pay the debt. A
new promise is a new cause of action. Although a debt barred by prescription is enforceable, a new
contract recognizing and assuming the prescribed debt would be valid and enforceable.

CRUZ vs TUASON & CO. G.R. No. L-23749 April 29, 1977

FACTS: As requested by the Deudors, the family of Telesforo Deudor who laid claim in question on the
strength of an informacion posesoria, Cruz made permanent improvements on the said land having an
area of more or less 20 quinones.

The improvements were valued at P30,400 and for which he incurred expenses amounting to P7,781.74
In 1952, Tuason & Co. availed of Cruz’ services as an intermediary with the Deudors, to work for the
amicable settlement in a civil case. The said case involved 50 quiones of land, of which the 20 quiones of
land mentioned formed part.

A compromise agreement between the Deudors and Tuason & Co. was entered into on 1963 which was
approved by court.

Cruz alleged that Tuason & Co. promised to convey him the 3,000 sq. meters of land occupied by him
which was part of the 20 quiones of land within 10 years from the date of signing of the compromise
agreement between the Deudors and the latter as consideration of his services. The said land was not
conveyed to him by Tuason & Co.

Cruz further alleged that Tuason & Co. was unjustly enriched at his expense since they enjoyed the
benefits of the improvements he made on the land acquired by the latter.

The trial court dismissed the case on the ground that there was no cause of action. Hence, this appeal.

ISSUE: Whether or not a presumed quasi-contract be emerged as against one part when the subject
matter thereof is already covered by a contract with another party.

HELD: From the very language of this provision, it is obvious that a presumed qauasi-contract cannot
emerge as against one party when the subject mater thereof is already covered by an existing contract
with another party. Predicated on the principle that no one should be allowed to unjustly enrich himself
at the expense of another, Article 2124 creates the legal fiction of a quasi-contract precisely because of
the absence of any actual agreement between the parties concerned. Corollarily, if the one who claims
having enriched somebody has done so pursuant to a contract with a third party, his cause of action
should be against the latter, who in turn may, if there is any ground therefor, seek relief against the
party benefited. It is essential that the act by which the defendant is benefited must have been
voluntary and unilateral on the part of the plaintiff. As one distinguished civilian puts it, "The act is
voluntary. because the actor in quasi-contracts is not bound by any pre-existing obligation to act. It is
unilateral, because it arises from the sole will of the actor who is not previously bound by any reciprocal
or bilateral agreement. The reason why the law creates a juridical relations and imposes certain
obligation is to prevent a situation where a person is able to benefit or take advantage of such lawful,
voluntary and unilateral acts at the expense of said actor." In the case at bar, since appellant has a
clearer and more direct recourse against the Deudors with whom he had entered into an agreement
regarding the improvements and expenditures made by him on the land of appellees. It Cannot be said,
in the sense contemplated in Article 2142, that appellees have been enriched at the expense of
appellant.

GUTIERREZ HERMANOS vs ORENSE G.R. No. 9188 December 4, 1914

FACTS:
On and before Februaru 14, 1907, Engracio Orense had been the owner of a parcel of land in
Guinobatan, Albay.

On February 14, 1907, Jose Duran, a nephew of Orense, sold the property for P1,500 to Gutierrez
Hermanos, with Orense’s knowledge and consent, executed before a notary a public instrument. The
said public instrument contained a provision giving Duran the right to repurchase it for the same price
within a period of four years from the date of the said instrument.

Orense continued occupying the land by virtue of a contract of lease.

After the lapse of four years, Gutierrez asked Orense to deliver the property to the company and to pay
rentals for the use of the property.

Orense refused to do so. He claimed that the sale was void because it was done without his authority
and that he did not authorize his nephew to enter into such contract.

During trial, Orense was presented as witness of the defense. He states that the sale was done with his
knowledge and consent. Because of such testimony, it was ascertained that he did give his nephew,
Duran, authority to convey the land. Duran was acquitted of criminal charges and the company
demanded that Orense execute the proper deed of conveyance of the property.

ISSUE: Whether or not Orense is bound by Duran’s act of selling the former’s property

HELD: Yes. It was proven during trial that he gave his consent to the sale. Such act of Orense impliedly
conferred to Duran the power of agency. The principal must therefore fulfill all the obligations
contracted by the agent, who acted within the scope of his jurisdiction.

Adille vs CA G.R. No. L-44546 January 29, 1988

FACTS:

The property in dispute was originally owned by Felisa Alzul who got married twice. Her child in the first
marriage was petitioner Rustico Adile and her children in the second marriage were respondents
Emetria Asejo et al.

During her lifetime, Felisa Alzul sodl the property in pacto de retro with a three-year repurchase period.

Felisa died before she could repurchase the property.

During the redemption period, Rustico Adille repurchased the property by himself alone at his own
expense, and after that, he executed a deed of extra-judicial partition representing himself to be the
only heir and child of his mother Felisa. Consequently, he was able to secure title in his name alone.

His half-siblings, herein respondents, filed a case for partition and accounting claiming that Rustico was
only a trustee on an implied trust when he redeemed the property, and thus, he cannot claim exclusive
ownership of the entire property.

ISSUE:

Whether or not a co-owner may acquire exclusive ownership over the property held in common.

Whether or nor Rustico had constituted himself a negotiorum gestor

HELD: No. The right to repurchase may be exercised by a co-owner with respect to his share alone.
Although Rustico Adille redeemed the property in its entirety, shouldering the expenses did not make
him the owner of all of it.

Yes. The petitioner, in taking over the property, did so on behalf of his co-heirs, in which event, he had
constituted himself a negotiorum gestor under Art 2144 of the Civil Code, or for his exclusive benefit, in
which case, he is guilty of fraud, and must act as trustee, the respondents being the beneficiaries,
pursuant to Art 1456.

ANDRES VS MANTRUST G.R. NO. 82670 SEPTEMBER 15, 1989

FACTS:

Andres, using the business name “Irene’s Wearing Apparel” was engaged in the manufacture of ladies
garments, children’s wear, men’s apparel and linens for local and foreign buyers. Among its foreign
buyers was Facts of the United States.

Sometime in August 1980, Facts instructed the First National State Bank (FNSB) of New Jersey to transfer
$10,000 to Irene’s Wearing Apparel via Philippine National Bank (PNB) Sta. Cruz, Manila branch. FNSB
instructed Manufacturers Hanover and Trust Corporation (Mantrust) to effect the transfer by charging
the amount to the account of FNSB with private respondent.

After Mantrust effected the transfer, the payment was not effected immediately because the payee
designated in the telex was only “Wearing Apparel.” Private respondent sent PNB another telex stating
that the payment was to be made to “Irene’s Wearing Apparel.”
On August 28, 1980, petitioner received the remittance of $10,000.

After learning about the delay, Facets informed FNSB about the situation. Facts, unaware that petitioner
had already received the remittance, informed private respondent and amended its instruction y asking
it to effect the payment to Philippine Commercial and Industrial Bank (PCIB) instead of PNB.

Private respondent, also unaware that petitioner had already received the remittance, instructed PCIB
to pay $10,000 to petitioner. Hence, petitioner received another $10,000 which was charged again to
the account of Facets with FNSB.

FNSB discovered that private respondent had made a duplication of remittance. Private respondent
asked petitioner to return the second remittance of $10,000 but the latter refused to do so contending
that the doctrine of solution indebiti does not apply because there was negligence on the part of the
respondents and that they were not unjustly enriched since Facets still has a balance of $49,324.

ISSUE: Whether or not the private respondent has the right to recover the second $10,000 remittance it
had delivered to petitioner

HELD: Yes. Art 2154 of the New Civil Code is applicable. For this article to apply, the following requisites
must concur: 1) that he who paid was not under obligation to do so; and 2) that payment was made by
reason of an essential mistake of fact.

There was a mistake, not negligence, in the second remittance. It was evident by the fact that both
remittances have the same reference invoice number.

PUYAT & SONS INC vs CITY OF MANILA G.R. No. L-17447 April 30, 1963

FACTS:

Plaintiff Gonzalo Puyat & Sons Inc is engaged in the business of manufacturing and selling all kinds of
furniture.

Acting pursuant to an ordinance, the defendant City Treasurer of Manila assessed from plaintiff retail
dealer’s tax the sales of furniture manufactured and sold by it and its factory site.
All assessments were paid by plaintiff without protest in the erroneous belief that it was liable thereof
not knowing that pursuant to an ordinance, it is exempt from the payment of taxes being a
manufacturer of various kinds of furniture.

After learning about the ordinance, plaintiff filed with defendant City Treasurer of Manila a formal
request for refund of the retail dealer’s taxes unduly paid.

The City Treasurer, however, denied the said request for refund.

ISSUE: Whether or not the defendant is obliged to refund the amount which the plaintiff paid

HELD: Yes. The plaintiff was actually exempted from paying the tax assessed, hence, it was clearly an
error or mistake which makes it fall under Art 2154 of solution indebiti. Art 2154 provides that if
something is received when there is no right to demand it, and it was unduly delivered through mistake,
the obligation to return it arises.

Alongside with this, Art 2156 is also applicable which states that if the payer was in doubt whether the
debt was due, he may recover if he proves that it was not due. Plaintiff had duly proved that taxes were
not lawfully due. Therefore, there is no doubt that the provisions of solution indebiti apply in this case.

SAGRADA ORDEN VS NACOCO G.R. NO. L-3756 JUNE 30, 1952

FACTS:

The land in question belongs to plaintiff Sagrada Orden in whose name the title was registered before
the war

On January 4, 1943, during the Japanese military occupation, the land was acquired by a Japanese
corporation by the name of Taiwan Tekkosho

After liberation on April 4, 1946, the Alien Property Custodian of the United States of America took
possession, control, and custody of the property pursuant to the Trading with the Enemy Act

The property was occupied by the Copra Export Management Company under a custodian agreement
with US Alien Property Custodian. When it vacated the property, it was occupied by defendant National
Coconut Corporation

The plaintiff made claim to the said property before the Alien Property Custodian. Alien Property
Custodian denied such claim

It bought an action in court which resulted to the cancellation of the title issued in the name of Taiwan
Tekkosho which was executed under threats, duress, and intimidation; reissuance of the title in favor of
the plaintiff; cancellation of the claims, rights, title, interest of the Alien property Custodian; and
occupant National Coconut Corporation’s ejection from the property. A right was also vested to the
plaintiff to recover from the defendants rentals for its occupation of the land from the date it vacated.

Defendant contests the rental claims on the defense that it occupied the property in good faith and
under no obligation to pay rentals.

ISSUE: Whether or not the defendant is obliged to pay rentals to the plaintiff
HELD: No. Nacoco is not liable to pay rentals prior the judgment. If defendant-appellant is liable at all, its
obligations, must arise from any of the four sources of obligations, namley, law, contract or quasi-
contract, crime, or negligence. (Article 1089, Spanish Civil Code.) Defendant-appellant is not guilty of any
offense at all, because it entered the premises and occupied it with the permission of the entity which
had the legal control and administration thereof, the Allien Property Administration. Neither was there
any negligence on its part.

OSEPH SALUDAGA, petitioner,vs.

FAR EASTERN UNIVERSITY and EDILBERTO C. DE JESUS in his capacity as President of
FEU, respondents.
G.R. No. 179337 April 30, 2008

Facts:
Petitioner Joseph Saludaga was a sophomore law student of respondent Far Eastern University (FEU)
when he was shot by Alejandro Rosete (Rosete), one of the security guards on duty at the school
premises.

Petitioner thereafter filed a complaint for damages against respondents on the ground that they
breached their obligation to provide students with a safe and secure environment and an atmosphere
conducive to learning. Respondents, in turn, filed a Third-Party Complaint against Galaxy Development
and Management Corporation (Galaxy), the agency contracted by respondent FEU to provide security
services within its premises to indemnify them for whatever would be adjudged in favor of petitioner.

RTC: FEU and its President was ordered to pay jointly and severally Saludaga damages. Galaxy and its
President was ordered to indemnify jointly and severally FEU for such amount.

CA: Dismissed, ruling that: a) the incident was a fortuitous event; b) that respondents are not liable for
damages for the injury suffered by the petitioner from the hands of their own security guard in violation
of their built-in contractual obligation to petitioner, being their law student at the time, to provide him
with a safe and secure educational environment; c) that Rosete, who shot petitioner, was not FEU’s
employee by virtue of the contract for security services between Galaxy and FEU, notwithstanding the
fact that petitioner, not being a party to it, is not bound by the same under the principle of relativity of
contracts; and, d) FEU exercised due diligence in selecting Galaxy as the agency which would provide
security services within the respondent FEU.

In his appeal, petitioner sued respondents for damages based on the alleged breach of student-school
contract for a safe learning environment. Respondents aver that the shooting incident was a fortuitous
event because they could not have reasonably foreseen nor avoided the accident caused by Rosete as
he was not their employee; and that they complied with their obligation to ensure a safe learning
environment for their students by having exercised due diligence in selecting the security services of
Galaxy.

Issue #1:
Whether or not there is a contractual obligation between Saludaga and FEU.

Held #1: YES.

It is undisputed that petitioner was enrolled as a sophomore law student in respondent FEU. As such,
there was created a contractual obligation between the two parties. On petitioner’s part, he was obliged
to comply with the rules and regulations of the school. On the other hand, respondent FEU, as a learning
institution is mandated to impart knowledge and equip its students with the necessary skills to pursue
higher education or a profession. At the same time, it is obliged to ensure and take adequate steps to
maintain peace and order within the campus.

Issue #2:
Whether or not FEU is guilty of culpa contractual.

Held #2: YES.

It is settled that in culpa contractual, the mere proof of the existence of the contract and the failure of
its compliance justify, prima facie, a corresponding right of relief.

Here, petitioner was shot inside the campus by no less the security guard who was hired to maintain
peace and secure the premises, there is a prima facie showing that respondents failed to comply with its
obligation to provide a safe and secure environment to its students. Also, respondents failed to prove
that they ensured that the guards assigned in the campus met the requirements stipulated in the
Security Service Agreement. No evidence as to the qualifications of Rosete as security guard was
presented. Respondents also failed to show that they undertook steps to ascertain and confirm that the
security guards assigned to them actually possess the qualifications required in the Security Service
Agreement.

Issue #3:
Whether or not the presence of force majeure may absolve FEU from liability.

Held #3: NO.

In order for force majeure to be considered, respondents must show that no negligence or misconduct
was committed that may have occasioned the loss. An act of God cannot be invoked to protect a person
who has failed to take steps to forestall the possible adverse consequences of such a loss. One’s
negligence may have concurred with an act of God in producing damage and injury to another;
nonetheless, showing that the immediate or proximate cause of the damage or injury was a fortuitous
event would not exempt one from liability. When the effect is found to be partly the result of a person’s
participation – whether by active intervention, neglect or failure to act – the whole occurrence is
humanized and removed from the rules applicable to acts of God.

Issue #4:
Whether or not the petitioner is entitled to indemnification for damages.

Held #4: YES. Petitioner is entitled to actual damages, moral damages, temperate damages, attorney’s
fees, and litigation expenses. The petitioner is not entitled to exemplary damages.

Article 1170 of the Civil Code provides that those who are negligent in the performance of their
obligations are liable for damages. Accordingly, for breach of contract due to negligence in providing a
safe learning environment, FEU is liable to petitioner for damages. It is essential in the award of
damages that the claimant must have satisfactorily proven during the trial the existence of the factual
basis of the damages and its causal connection to defendant’s acts.

Petitioner spent expenses for his hospitalization and medical expenses. Since the case involved an
obligation arising from a contract and not a loan or forbearance of money, the proper rate of legal
interest is 6% per annum of the amount demanded. The interest shall continue to run from the filing of
the complaint until the finality of the Decision. After the decision becomes final and executory, the
applicable rate shall be 12% per annum until its satisfaction. Also, transportation expenses and those
incurred in the hiring of a personal assistant while recuperating were not however supported by
receipts. In the absence thereof, no actual damages may be awarded.

Nonetheless, Art. 2224 of the Civil Code states that temperate damages may be recovered where it has
been shown that the claimant suffered some pecuniary loss but the amount thereof cannot be proved
with certainty.

SC awarded petitioner moral damages for the “physical suffering, mental anguish, fright, serious anxiety,
and moral shock resulting from the shooting incident”. SC stressed that the moral damages are in the
category of an award designed to compensate the claimant for actual injury suffered and not to impose
a penalty on the wrongdoer.

Attorney’s fees and litigation expenses were also reasonable in view of Art. 2208 of Civil Code.

However, the award of exemplary damages is deleted considering the absence of proof that the
respondents acted in a wanton, fraudulent, reckless, oppressive, or malevolent manner.

Issue #5:
Whether or not the FEU President himself is vicariously liable.

Held: NO.
FEU President cannot be held liable for damages under Art. 2180 of CC because respondents are not
employers of Rosete. The latter was employed by Galaxy. The instructions issued by respondents’
Security Consultant to Galaxy and its security guards are ordinarily no more than requests commonly
envisaged in the contract for services entered into by a principal and a security agency. They cannot be
construed as the element of control as to treat respondents as the employers of Rosete. Where the
security agency recruits, hires and assigns the works of its watchmen or security guards to a client, the
employer of such guards or watchmen is such agency, and not the client, since the latter has no hand in
selecting the security guards. Thus, the duty to observe the diligence of a good father of a family cannot
be demanded from the said client.

Issue #6:
Whether or not Galaxy and its President were liable for damages.

Held #6: YES.

For the acts of negligence and for having supplied respondent FEU with an unqualified security guard,
which resulted to the latter’s breach of obligation to petitioner, it is proper to hold Galaxy liable to
respondent FEU for such damages equivalent to the above-mentioned amounts awarded to petitioner.

Also, unlike the FEU President, SC deemed Galaxy President to be solidarily liable with Galaxy for being
grossly negligent in directing the affairs of the security agency. It was the Galaxy President who assured
petitioner that his medical expenses will be shouldered by Galaxy, but said representations were not
fulfilled because they presumed that petitioner and his family were no longer interested in filing a
formal complaint against them.
PEOPLE’S CAR VS COMMANDO SECURITY G.R. L-36840 MAY 22, 1973

FACTS:

People’s Car entered into a contract with Commando Security to safeguard and protect the business
premises of the plaintiff from theft, pilferage, robbery, vandalism, and all other unlawful acts of any
person/s prejudicial to the interest of the plaintiff.

On April 5, 1970, around 1:00am, defendant’s security guard on duty at plaintiff’s premises, without any
authority, consent, approval, or orders of the plaintiff and/or defendant brought out the compound of
the plaintiff a car belonging to its customer and drove said car to a place or places unknown, abandoning
his post and while driving the car lost control of it causing it to fall into a ditch.

As a result, the car of plaintiff’s customer, which had been left with plaintiff for servicing and
maintenance, suffered extensive damage besides the car rental value for a car that plaintiff had to rent
and make available to its customer, Joseph Luy, to enable him to pursue his business and occupation.

Plaintiff instituted a claim against defendant for the actual damages it incurred due to the unlawful act
of defendant’s personnel citing paragraph 5 of the contract wherein defendant accepts sole
responsibility for the acts done during their watch hours.

Defendant claimed that they may be liable but its liability is limited under paragraph 4 of the contract
which provides that its liability shall not exceed P1,000 per guard post for loss or damage through the
negligence of its guards during the watch hours provided that it is reported within 24 hours of the
incident.

ISSUE: Whether or not the defendant is obliged to indemnify the plaintiff for the entire costs as result of
the incident

HELD: Yes. Plaintiff was in law liable to its customer for the damages caused the customer’s car, which
had been entrusted into its custody. Plaintiff therefore was in law justified in making good such damages
and relying in turn on defendant to honor its contract and indemnify it for such undisputed damages,
which had been caused directly by the unlawful and wrongful acts of defendant’s security guard in
breach of their contract.

Plaintiff in law could not tell its customer that under the Guard Service Contract it was not liable for the
damage but the defendant since the customer could not hold defendant to account for the damages as
he had no privity of contract with defendant.
CANGCO VS MANILA RAILROAD COMPANY G.R. L-12191 OCTOBER 14, 1918

FACTS:

On January 20, 1915, Jose Cangco was riding the train of Manila Railroad Company where he was an
employee. As the train drew near to his destination, he arose from his seat. When he was about to alight
from the train, Cangco accidentally stepped on a sack of watermelons which he failed to notice because
it was already 7:00pm and it was dim when it happened. As a result, he slipped and fell violently on the
platform. His right arm was badly crushed and lacerated which was eventually amputated.

Cangco sued Manila Railroad Company on the ground of negligence of its employees placing the sacks of
melons upon the platform and in leaving them so placed as to be a menace to the security of passenger
alighting from the company’s trains.

The company’s defense was that granting that its employees were negligent in placing an obstruction
upon the platform, the direct and proximate cause of the injury suffered by plaintiff was his own
contributing negligence.

ISSUE: Whether or not there was a contributing negligence on the part of the plaintiff.

HELD: In determining the question of contributory negligence in performing such act – that is to say,
whether the passenger acted prudently or recklessly – the age, sex, and physical condition of the
passenger are circumstances necessarily affecting the safety of the passenger, and should be
considered.

The place was perfectly familiar to the plaintiff as it was his daily custom to get on and off the train at
the station. There could, therefore, be no uncertainty in his mind with regard either to the length of the
step which he was required to take or the character of the platform where he was alighting. The
Supreme Court’s conclusion was that the conduct of the plaintiff in undertaking to alight while the train
was yet slightly under way was not characterized by imprudence and that therefore he was not guilty of
contributory negligence.

GUTIERREZ VS GUTIERREZ G.R. NO. 34840 SEPTEMBER 23, 1931

FACTS:

On February 2, 1930, a passenger truck and an automobile of private ownership collided while
attempting to pass each other on a bridge. The truck was driven by the chauffeur Abelardo Velasco, and
was owned by saturnine Cortez. The automobile was being operated by Bonifacio Gutierrez, a lad 18
years of age, and was owned by Bonifacio’s father and mother, Mr. and Mrs. Manuel Gutierrez. At the
time of the collision, the father was not in the car, but the mother, together with several other members
of the Gutierrez family were accommodated therein.

The collision between the bus and the automobile resulted in Narciso Gutierrez suffering a fractured
right leg which required medical attendance for a considerable period of time.
ISSUE: Whether or not both the driver of the truck and automobile are liable for damages and
indemnification due to their negligence. What are the legal obligations of the defendants?

HELD: Bonifacio Gutierrez’s obligation arises from culpa aquiliana. On the other hand, Saturnino Cortez’s
and his chauffeur Abelardo Velasco’s obligation rise from culpa contractual.

The youth Bonifacio was na incompetent chauffeur, that he was driving at an excessive rate of speed,
and that, on approaching the bridge and the truck, he lost his head and so contributed by his negligence
to the accident. The guaranty given by the father at the time the son was granted a license to operate
motor vehicles made the father responsible for the acts of his son. Based on these facts, pursuant to the
provisions of Art. 1903 of the Civil Code, the father alone and not the minor or the mother would be
liable for the damages caused by the minor.

The liability of Saturnino Cortez, the owner of the truck, and his chauffeur Abelardo Velasco rests on a
different basis, namely, that of contract.

HSBC v. Spouses Broqueza

G.R. No. 178610, November 17, 2010

FACTS:

Petitioners Gerong and Broqueza are employees of Hongkong and Shanghai Banking Corporation
(HSBC). They are also members of respondent Hongkong Shanghai Banking Corporation, Ltd. Staff
Retirement Plan.
In October 1990, petitioner Broqueza obtained a car loan in the amount of Php 175,000.00. In December
1991, she again applied and was granted an appliance loan in the amount of Php 24,000.00.
In 1993, a labor dispute arose between HSBC and its employees. Majority of HSBCs employees were
terminated, among whom are petitioners Editha Broqueza and Fe Gerong.

ISSUE:

Whether or not the claim was premature as the loan obligations have not yet matured

RULING:

No. The Court affirms the findings of the lower courts that there is no date of payment indicated in the
Promissory Notes. The RTC is correct in ruling that since the Promissory Notes do not contain a period,
HSBCL-SRP has the right to demand immediate payment. Article 1179 of the Civil Code applies: Every
obligation whose performance does not depend upon a future or uncertain event, or upon a past event
unknown to the parties, is demandable at once. The spouses Broquezas obligation to pay HSBCL-SRP is a
pure obligation. The fact that HSBCL-SRP was content with the prior monthly check-off from Editha
Broquezas salary is of no moment. Once Editha Broqueza defaulted in her monthly payment, HSBCL-SRP
made a demand to enforce e a pure obligation.
Pay vs Palanca (Civil Law)

IN THE MATTER OF THE INTESTATE ESTATE OF JUSTO PALANCA, Deceased, GEORGE PAY, petitioner-
appellant, vs. SEGUNDINA CHUA VDA. DE PALANCA, oppositor-appellee.

G.R. No. L-29900 June 28, 1974 FERNANDO, J.:

FACTS: George Pay is a creditor of the Late Justo Palanca who died in Manila on July 3, 1963. The claim
of the petitioner is based on a promissory note dated January 30, 1952, whereby the late Justo Palanca
and Rosa Gonzales Vda. de Carlos Palanca promised to pay George Pay the amount of P26,900.00, with
interest thereon at the rate of 12% per annum.

Pay filed a petition to the trial court praying that respondent Segundina, the surviving spouse of the late
Justo Palanca, be appointed as administratrix of a residential dwelling at Taft Avenue, Manila, in the
name of Justo Palanca, and assessed at P41,800.00. The idea is that once said property is brought under
administration, George Pay, as creditor, can file his claim against the administratrix.

The lower court dismissed the petition due to the following:

1) Segundina refuses to be appointed as administratrix;

2) the property sought to be administered no longer belonged to the debtor, the late Justo Palanca; and

3) the rights of Pay had already prescribed considering that Pay himself admitted expressly that he was
relying on the wording "upon demand."; thus the 10-yr prescriptive period applies and has, by the time
of the filing of the petition, lapsed.

Furthermore, when the “lower court inquired whether any cash payment has been received by either of
the signers of this promissory note from the Estate of the late Carlos Palanca. Petitioner informed that
he does not insist on this provision but that petitioner is only claiming on his right under the promissory
note.”

The promissory note, dated January 30, 1952, is worded thus: " `For value received from time to time
since 1947, we [jointly and severally promise to] pay to Mr. [George Pay] at his office at the China
Banking Corporation the sum of (P26,900.00), with interest thereon at the rate of 12% per annum upon
receipt by either of the undersigned of cash payment from the Estate of the late Don Carlos Palanca
or upon demand'. . . .

As stated, this promissory note is signed by Rosa Gonzales Vda. de Carlos Palanca and Justo Palanca."

Pay appealed to the SC, assailing the correctness of the rulings of the lower court as to the effect of the
refusal of the surviving spouse of the late Justo Palanca to be appointed as administratrix, as to the
property sought to be administered no longer belonging to the debtor, the late Justo Palanca, and as to
the rights of petitioner-creditor having already prescribed.

ISSUE: Whether a creditor is barred by prescription in his attempt to collect on a promissory note
executed more than 15 years earlier with the debtor sued promising to pay either upon receipt by him
of his share from a certain estate or upon demand (the basis for the action being the latter alternative)

HELD: Yes
From the manner in which the promissory note was executed, it would appear that petitioner was
hopeful that the satisfaction of his credit could he realized either through the debtor sued receiving cash
payment from the estate of the late Carlos Palanca presumptively as one of the heirs, or, as expressed
therein, "upon demand." There is nothing in the record that would indicate whether or not the first
alternative was fulfilled. What is undeniable is that on August 26, 1967, more than 15 years after the
execution of the promissory note on January 30, 1952, this petition was filed. The defense interposed
was prescription. Its merit is rather obvious.

Article 1179 of the Civil Code provides: "Every obligation whose performance does not depend upon a
future or uncertain event, or upon a past event unknown to the parties, is demandable at once." This
used to be Article 1113 of the Spanish Civil Code of 1889. As far back as Floriano v. Delgado, 5 a 1908
decision, it has been applied according to its express language.

The obligation being due and demandable, it would appear that the filing of the suit after 15 years was
much too late. For again, according to the Civil Code, which is based on Section 43 of Act No. 190, the
prescriptive period for a written contract is that of 10 years. This is another instance where this Court
has consistently adhered to the express language of the applicable norm. There is no necessity therefore
of passing upon the other legal questions as to whether or not it did suffice for the petition to fail just
because the surviving spouse refuses to be made administratrix, or just because the estate was left with
no other property.

Smith Bell vs. Sotelo Matti (44 Phil. 874)

Smith Bell vs. Sotelo Matti (44 Phil. 874)

GR No. 16570, March 9, 1922

Romualdez, J.:

Facts:

Plaintiff corporation undertook to sell and deliver equipment for Mr. Sotelo but no definite dates were
fixed for the delivery. The periods were couched in ambiguous terms such as “within 3 or 4 months”, “in
the month of September or as soon as possible”, and “approximate delivery with 90 days-This is not
guaranteed.” When the goods arrived, Mr. Sotelo refused to receive them and to pay the prices. Mr.
Sotelo then sued for damages because of the delay suffered.

Issue:

Whether Smith Bell incurred delay in the delivery of goods to Sotelo

Held:

No, it did not incur delay.

From the record it appears that these contracts were executed at the time of the world war when there
existed connection with the tanks and "Priority Certificate, subject to the United -States Government
requirements," with respect to the motors. At the time of the execution of the contracts, the parties
were not unmindful of the contingency of the United States Government not allowing the export of the
goods, nor of the fact that the other foreseen circumstances therein stated might prevent it.

Considering these contracts in the light of the civil law, we cannot but conclude that the term which the
parties attempted to fix is so uncertain that one cannot tell just whether, as a matter of fact, those
articles could be brought to Manila or not. If that is the case, as we think it is, the obligation must be
regarded as conditional.

When the delivery was subject to a condition the fulfillment of which depended not only upon the effort
of the herein plaintiff, but upon the will of third persons who could in no way be compelled to fulfill .the
condition. In cases like this, which are not expressly provided for, but impliedly covered, by the Civil
Code, the obligor will be deemed to have sufficiently performed his part of the obligation, if he has done
all that was in his power, even if the condition has not been fulfilled in reality.

In connection with this obligation to deliver, occurring in a contract of sale like those in question, the
rule in North America is that when the time of delivery is not fixed in the contract, time is regarded
unessential.

When the contract provides for delivery 'as soon as possible' the seller is entitled to a reasonable time,
in view of all the circumstances, such as the necessities of manufacture, or of putting the goods in
condition for delivery. The term does not mean immediately or that the seller must stop all his other
work and devote himself to that particular order. But the seller must nevertheless act with all
reasonable diligence or without unreasonable delay. It has been held that a requirement that the
shipment of goods should be the 'earliest possible' must be construed as meaning that the goods should
be sent as soon as the seller could possibly send them, and that it signified rather more than that the
goods should be sent within a reasonable time.

"The question as to what is a reasonable time for the delivery of the goods by the seller is to be
determined by the circumstances attending the particular transaction, such as the character of the
goods, and the purpose for which they are intended, the ability of the seller to produce the goods if they
are to be manufactured, the facilities available for transportation, and the distance the goods must be
carried, and the usual course of business in the particular trade." (35 Cyc., 181-184.)
The record shows, as we have stated, that the plaintiff did all within its power to have the machinery
arrive at Manila as soon as possible, and immediately upon its arrival it notified the purchaser of the fact
and offered to deliver it to him. Taking these circumstances into account, we hold that the said
machinery was brought to Manila by the plaintiff within a reasonable time.

Therefore, the plaintiff has not been guilty of any delay in the fulfillment of its obligation, and,
consequently, it could not have incurred any of the liabilities mentioned by the intervenor in its
counterclaim or set-off.

G.R. No. L-27454 April 30, 1970

Rosendo O. Chavez, plaintiff-appellant vs. Fructuoso Gonzales, defendant-appellee

REYES, J.B.L., J.:

Facts: On July 1963, Rosendo Chavez brought his typewriter to Fructuoso Gonzales a typewriter
repairman for the cleaning and servicing of the said typewriter but the latter was not able to finish the
job. During October 1963, the plaintiff gave the amount of P6.00 to the defendant which the latter
asked from the plaintiff for the purchase of spare parts, because of the delay of the repair the plaintiff
decided to recover the typewriter to the defendant which he wrapped it like a package. When the
plaintiff reached their home he opened it and examined that some parts and screws was lost.

That on October 29, 1963 the plaintiff sent a letter to the defendant for the return of the missing parts,
the interior cover and the sum of P6.00 (Exhibit D). The following day, the defendant returned to the
plaintiff some of the missing parts, the interior cover and the P6.00. The plaintiff brought his typewriter
to Freixas Business Machines and the repair cost the amount of P89.85.

He commenced this action on August 23, 1965 in the City Court of Manila, demanding from the
defendant the payment of P90.00 as actual and compensatory damages, P100.00 for temperate
damages, P500.00 for moral damages, and P500.00 as attorney’s fees. The defendant made no denials
of the facts narrated above, except the claim of the plaintiff that the cost of the repair made by Freixas
Business Machines be fully chargeable against him.

Issue: Whether or not the defendant is liable for the total cost of the repair made by Freixas Business
Machines with the plaintiff typewriter?

Ruling: No, he is not liable for the total cost of the repair made by Freixas Business Machines instead he
is only liable for the cost of the missing parts and screws. The defendant contravened the tenor of his
obligation in repairing the typewriter of the plaintiff that he fails to repair it and returned it with the
missing parts, he is liable under “ART. 1167. If a person obliged to do something fails to do it, the same
shall be executed at his cost.

This same rule shall be observed if he does it in contravention of the tenor of the obligation.
Furthermore it may be decreed that what has been poorly done he undone.”
SINGSON ENCARNACION VS. BALDOMAR
77 PHIL 470

FACTS:
Vicente Singson Encarnacion leased his house to
Jacinta Baldomar and her son, Lefrando Fernando upon a
month-to-month basis. After Manila was liberated in the
last war, Singson Encarnacio notified Baldomar and her
son Fernando to vacate the house because he needed it for
his office as a result of the destruction of the building
where he had his office before. Despite the demand, the
Baldomar and Fernando continued their occupancy.

The defense of Baldomar and Fernando was that the

contract with Singson Encarnacion authorized them to
continue occupancy indefinitely while they should
faithfully fulfill their obligation with respect to payment of
rentals. Singson Encarnacion contended that the lease had
always and since the beginning been upon a month-tomonth
basis.

ISSUE:
Was it tenable for Singson Encarnacion to discontinue
the lease of Baldomar and her son?

RULING:
The continuance and fulfillment of the contract of lease
cannot be made to depend solely and exclusively upon the
free and uncontrolled choice of the lessees between
continuing paying the rentals or not, completely depriving
the owner of all say in the matter. The defense of Baldomar
and Fernando would leave to the sole and exclusive will of
one of the contracting parties the validity and fulfillment of
the contract of lease, within the meaning of Article 1256 of
the Civil Code. For if this were allowed, so long as the
lessee elected to continue the lease by continuing the
payment of the rentals the owner would never be able to
discontinue the lease; conversely, although the owner
should desire the lease to continue, the lessee could
effectively thwart his purpose if he should prefer to
terminate the contract by the simple expedient of stopping
payment of the rentals.

Ong vs. Century (kf)

The Court of First Instance of Iloilo rendered a judgment in favor of the plaintiff, sentencing the
defendant company to pay him the sum of P45,000, the value of certain policies of fire insurance, with
legal interest thereon from February 28, 1923, until payment, with the costs. The defendant company
appealed from this judgment, and now insists that the same must be modified and that it must be
permitted to rebuild the house burnt, subject to the alignment of the street where the building was
erected, and that the appellant be relieved from the payment of the sum in which said building was
insured.
The appellant contends that under clause 14 of the conditions of the policies, it may rebuild the house
burnt, and although the house may be smaller, yet it would be sufficient indemnity to the insured for
the actual loss suffered by him.
If this clause of the policies is valid, its effect is to make the obligation of the insurance company an
alternative one, that is to say, that it may either pay the insured value of house, or rebuild it. It must be
noted that in alternative obligations, the debtor, the insurance company in this case, must notify the
creditor of his election, stating which of the two prestations he is disposed to fulfill, in accordance with
article 1133 of the Civil Code. The object of this notice is to give the creditor, that is, the plaintiff in the
instant case, opportunity to express his consent, or to impugn the election made by the debtor, and only
after said notice shall the election take legal effect when consented by the creditor, or if impugned by
the latter, when declared proper by a competent court. In the instance case, the record shows that the
appellant company did not give a formal notice of its election to rebuild, and while the witnesses,
Cedrun and Cacho, speak of the proposed reconstruction of the house destroyed, yet the plaintiff did
not give his assent to the proposition, for the reason that the new house would be smaller and of
materials of lower kind than those employed in the construction of the house destroyed. Upon this
point the trial judge very aptly says in his decision: "It would be an imposition unequitable, as well as
unjust, to compel the plaintiff to accept the rebuilding of a smaller house than the one burnt, with a
lower kind of materials than those of said house, without offering him an additional indemnity for the
difference in size between the two house, which circumstances were taken into account when the
insurance applied for by the plaintiff was accepted by the defendant."
Election alleged by the appellant to rebuild the house burnt instead of paying the value of the insurance
is improper.

ELEIZEGUI VS MANILA LAWN TENNIS CLUB

G.R. 967
FACTS:

This suit concerns the lease of a piece of land for a

fixed consideration and to endure at the will of the lessee.
By the contract of lease the lessee is expressly authorized
to make improvements upon the land, by erecting
buildings of both permanent and temporary character, by
making fills, laying pipes, and making such other
improvements as might be considered desirable for the
comfort and amusement of the members.

With respect to the term of the lease the present

question has arisen. In its decision three theories have been presented: One which makes the duration
depend upon the will of the lessor, who, upon one month's notice
given to the lessee, may terminate the lease so stipulated;
another which, on the contrary, makes it dependent upon
the will of the lessee, as stipulated; and the third, in
accordance with which the right is reversed to the courts to
fix the duration of the term.

The first theory is that which has prevailed in the

judgment below, as appears from the language in which
the basis of the decision is expressed: "The court is of the
opinion that the contract of lease was terminated by the
notice given by the plaintiff on August 28 of last year . . . ."
And such is the theory maintained by the plaintiffs, which
expressly rests upon article 1581 of the Civil Code, the law
which was in force at the time the contract was entered
into (January 25, 1890). The judge, in giving to this notice
the effect of terminating the lease, undoubtedly considers
that it is governed by the article relied upon by the
plaintiffs, which is of the following tenor: "When the term
has not been fixed for the lease, it is understood to be for
years when an annual rental has been fixed, for months
when the rent is monthly. . . ." The second clause of the
contract provides as follows: "The rent of the said land is
fixed at 25 pesos per month."

ISSUE:
Was there a conventional term, a duration, agreed
upon in the contract in question?

RULING:
Yes. The obligations which, with the force of law,
the lessors assumed by the contract entered into, so far as
pertaining to the issues, are the following: "First. . . . They
lease the above-described land to Mr. Williamson, who
takes it on lease . . . for all the time the members of the
said club may desire to use it . . . Third. . . . the owners of
the land undertake to maintain the club as tenant as long
as the latter shall see fit, without altering in the slightest
degree the conditions of this contract, even though the
estate be sold."
In view of these clauses, it can not be said that
there is no stipulation with respect to the duration of the
lease, or that, notwithstanding these clauses, article 1581,
in connection with article 1569, can be applied. If this were
so, it would be necessary to hold that the lessors spoke in
vain that their words are to be disregarded a claim which
can not be advanced by the plaintiffs nor upheld by any
court without citing the law which detracts all legal force
from such words or despoils them of their literal sense.

PHILIPPINE BANKING CORPORATION v. LUI SHE

G.R. No. L-17587. September 12, 1967

Ponente: J. Castro

DOCTRINE:

Even if the contract appears to be valid, if the provisions is against a constitutional prohibition,
the same should be considered null and void.

FACTS:

Justina Santos executed on a contract of lease in favor of Wong, covering the portion then already
leased to him and another portion fronting Florentino Torres street. The lease was for 50 years,
although the lessee was given the right to withdraw at any time from the agreement.

On December 21 she executed another contract giving Wong the option to buy the leased premises for
P120,000, payable within ten years at a monthly installment of P1,000. The option, written in Tagalog,
imposed on him the obligation to pay for the food of the dogs and the salaries of the maids in her
household, the charge not to exceed P1,800 a month. The option was conditioned on his obtaining
Philippine citizenship, a petition for which was then pending in the Court of First Instance of Rizal.

It appears, however, that this application for naturalization was withdrawn when it was discovered that
he was not a resident of Rizal. On October 28, 1958 she filed a petition to adopt him and his children on
the erroneous belief that adoption would confer on them Philippine citizenship. The error was
discovered and the proceedings were abandoned.

In two wills executed on August 24 and 29, 1959, she bade her legatees to respect the contracts she had
entered into with Wong, but in a codicil of a later date (November 4, 1959) she appears to have a
change of heart. Claiming that the various contracts were made by her because of machinations and
inducements practiced by him, she now directed her executor to secure the annulment of the contracts.

ISSUE:

Whether the contracts involving Wong were valid

HELD:

No, the contracts show nothing that is necessarily illegal, but considered collectively, they reveal
an insidious pattern to subvert by indirection what the Constitution directly prohibits. To be sure, a lease
to an alien for a reasonable period is valid. So is an option giving an alien the right to buy real property
on condition that he is granted Philippine citizenship.

But if an alien is given not only a lease of, but also an option to buy, a piece of land, by virtue of
which the Filipino owner cannot sell or otherwise dispose of his property, this to last for 50 years, then it
becomes clear that the arrangement is a virtual transfer of ownership whereby the owner divests
himself in stages not only of the right to enjoy the land but also of the right to dispose of it— rights the
sum total of which make up ownership. If this can be done, then the Constitutional ban against alien
landholding in the Philippines, is indeed in grave peril.

GREGORIO ARANETA v. PHILIPPINE SUGAR ESTATES DEVELOPMENT CO., GR No. L-22558, 1967-05-31

Facts:

J.M. Tuason & Co., Inc. is the owner of a big tract of land situated in Quezon City, otherwise known as
the Sta. Mesa Heights Subdivision,... On July 28, 1950, through Gregorio

Araneta, Inc., it (Tuason & Co.) sold a portion thereof... to Philippine Sugar Estates Development Co.,
Ltd.

The parties stipulated... that the buyer will -

"Build on the said parcel of land the Sto Domingo Church and Convent;"... while the seller for its part will
-

"Construct streets on the NE and NW and SW sides of the land herein sold so that the latter will be a
block surrounded by streets on all four sides; and the street on the NE side shall be named 'Sto.
Domingo Avenue';"

The buyer, Philippine Sugar Estates Development Co., Ltd., finished the construction of Sto. Domingo
Church and Convent, but the seller, Gregorio Araneta, Inc., which began constructing the streets, is
unable to finish the construction of the street... in the Northeast side (named Sto. Domingo Avenue)
because a certain third party, by the name of Manuel Abundo, who has been physically occupying a
middle part thereof, refused to vacate the same;... hence, on May 7, 1958, Philippine Sugar Estates

Development Co., Ltd. filed its complaint against J.M. Tuason & Co., Inc. and Gregorio Araneta, Inc., in
the above stated court of first instance, seeking to compel the latter to comply with their obligation, as
stipulated in the above-mentioned... deed of sale, and/or to pay damages in the event they failed or
refused to perform said obligation.

Gregorio Araneta, Inc. answered the complaint,... setting up the principal defense that the action was
premature since its obligation to construct the streets in question was without a... definite period which
needs to be fixed first by the court in a proper suit for that purpose before a complaint for specific
performance will prosper.

the lower court... dismissed plaintiff's complaint (in a decision dated May 31, 1960), upholding the
defenses interposed by defendant Gregorio Araneta, Inc.

the lower court, after finding that "the proven facts precisely warrants the fixing of such a period",
issued an order granting plaintiff's motion for reconsideration and amending the dispositve portion of
the decision of May 31, 1960,... judgment is hereby rendered giving defendant Gregorio Araneta, Inc., a
period of Two (2) Years from notice hereof, within which to comply with its obligation under the
contract,... the appellate court declared that the fixing of a period was within the pleadings and that
there was no true change of theory after the submission of the case for decision since defendant-
appellant Gregorio Araneta, Inc. itself... squarely placed said issue by alleging in paragraph 7 of the
affirmative defenses contained in its answer

Issues:

whether or not the... parties agreed that the petitioner should have reasonable time to perform its part
of the bargain.

Ruling:

The fixing of a period by the courts under Article 1197 of the Civil Code of the Philippines is sought to
be... justified on the basis that petitioner (defendant below) placed the absence of a period in issue by
pleading in its answer that the contract with respondent Philippine Sugar Estates Development Co., Ltd.
gave petitioner Gregorio Araneta, Inc. "reasonable time... within which to comply with its obligation to
construct and complete the streets."

If the contract so provided, then there was a period fixed, a "reasonable time"; and all that the court
should have done was to determine if that reasonable time... had already elapsed when suit was filed. If
it had passed, then the court should declare that petitioner had breached the contract, as averred in the
complaint, and fix the resulting damages. On the other hand, if the reasonable time had not... yet
elapsed, the court perforce was bound to dismiss the action for being premature.

But in no case can it be logically held that under the plea above quoted, the intervention of the court to
fix the period for performance was warranted, for Article 1197 is... precisely predicated on the absence
of any period fixed by the parties.

the decision appealed from is reversed, and the time for the performance of the obligations of
petitioner Gregorio Araneta, Inc. is hereby fixed at the date that all the squatters on affected areas are
finally evicted... therefrom.

Millare vs. Hernando (151 SCRA 484) GR No. L-555480, 6/30/1987

Feliciano, J.:

Facts: A five-year Contract of Lease was executed between Millare as lessor and the Spouses Co as
lessee. They agreed on a monthly rental rate of P350 of the “People’s Restaurant” until May 31, 1980.

During the last week of May 1980, Millare informed the Co spouses that they could continue leasing the
property so long as they were amenable to paying P1,200 a month. The Spouses Co counter-offered
with P700 a month. At this point, Millare allegedly stated that the amount of monthly rentals could be
resolved at a later time since “the matter is simple among us”, which alleged remark was supposedly
taken by the spouses Co to mean that the Contract of Lease had been renewed, prompting them to
continue occupying the subject premises and to forego their search for a substitute place to rent. In
contrast, the lessor flatly denied ever having considered, much less offered, a renewal of the Contract of
Lease.
On July 22 and 28, 1980, Millare sent demand letters requesting them to vacate as she had no intention
of renewing the Contract of Lease, which had expired. The spouses Co signified their intention to deposit
the P700 monthly rental in court, in view of Mrs. Millare’s refusal to accept their counter-offer.

As the parties were filing suits against each other in court, the trial judge rendered a “Judgment by
Default” dated 26 November 1980 ordering the renewal of the lease contract for a term of 5 years
counted from the expiration date of the original lease contract, and fixing monthly rentals thereunder at
P700.00 a month, payable in arrears.

Issue: Whether the court may order the renewal of the Contract of Lease for another five-year term at
P700 a month

Held: No, it cannot order the renewal of the Contract of Lease.

The respondent judge cited Articles 1197 and 1670 of the Civil Code to sustain the “Judgment by
Default” by which he ordered the renewal of the lease for another term of five years and fixed monthly
rentals thereunder at P700.00 a month. Article 1197 of the Civil Code provides as follows:

“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.

The courts shall also fix the duration of the period when it depends upon the will of the debtor.

In every case, the courts shall determine such period as may, under the circumstances, have been
probably contemplated by the parties. Once fixed by the courts, the period cannot be changed by
them.” (Italics supplied.)

The first paragraph of Article 1197 is clearly inapplicable, since the Contract of Lease did in fact fix an
original period of five years, which had expired. It is also clear from paragraph 13 of the Contract of
Lease that the parties reserved to themselves the faculty of agreeing upon the period of the renewal
contract. The second paragraph of Article 1197 is equally clearly inapplicable since the duration of the
renewal period was not left to the will of the lessee alone, but rather to the will of both the lessor and
the lessee. Most importantly, Article 1197 applies only where a contract of lease clearly exists. Here, the
contract was not renewed at all, there was in fact no contract at all the period of which could have been
fixed.

Article 1670 of the Civil Code reads thus:

“If at the end of the contract the lessee should continue enjoying the thing left for 15 days with the
acquiescence of the lessor and unless a notice to the contrary by either party has previously been given.
It is understood that there is an implied new lease, not for the period of the original contract, but for the
time established in Articles 1682 and 1687. The other terms of the original contract shall be revived.”
(Italics supplied.)

The parties do not pretend that the continued occupancy of the leased premises after 31 May 1980, the
date of expiration of the contract, was with the acquiescence of the lessor. The implied new lease could
not possibly have a period of five years, but rather would have been a month-to-month lease since the
rentals (under the original contract) were payable on a monthly basis. At the latest, an implied new
lease (had one arisen) would have expired as of the end of July 1980 in view of the written demands
served by the petitioner upon the private respondents to vacate the previously leased premises,

It follows that the respondent judge’s decision requiring renewal of the lease has no basis in law or in
fact. Save in the limited and exceptional situations envisaged in Articles 1197 and 1670 of the Civil Code,
which do not obtain here, courts have no authority to prescribe the terms and conditions of a contract
for the parties. As pointed out by Mr. Justice J.B.L. Reyes in Republic vs. Philippine Long Distance
Telephone, Co.,

“[P]arties cannot be coerced to enter into a contract where no agreement is had between them as to
the principal terms and conditions of the contract. Freedom to stipulate such terms and conditions is of
the essence of our contractual system, and by express provision of the statute, a contract may be
annulled if tainted by violence, intimidation or undue influence (Article 1306, 1336, 1337, Civil Code of
the Philippines).

Ronquillo vs. CA

Joint/ Solidary Obligation

Facts

 Ronquillo was one of the four defendants of the Civil case filed by Antonio So (private
respondent) for collection of money amounting to 117M

 The amount sought to be collected represented the value of the checks issued by defendants in
payment for foodstuffs delivered to and received by them

 They entered into a compromise agreement. In said agreement both parties agree that failure of
either party to comply with the terms and conditions stipulated, the innocent party will be
entitled to an execution of the decision based on the compromise agreement and the defaulting
party agrees and hold themselves to reimburse the innocent party for attys fees and other
feesBecause of failure of the other two defendants to pay their obligation, private respondent
filed for the issuance of writ of execution

 A writ of execution was issued for the satisfaction for the claim against the properties of the
defendants including petitioner, single and jointly liable

 The decision of RTC based on the compromise agreement provides that “defendants individually
and agree to pay” within a periods of six months from January 1980 or before June 30, 1980

Issue

W/N Ronquillo is solidarily liable with the other defendants in the civil case

Ruling

 Yes. The term individually has the same meaning as collectively, separately, distinctively,
respectively or severally.

 An agreement to be individually liable undoubtedly creates a several obligation and a several

obligation is one which binds himself to perform the whole obligation
Malayan Insurance vs. CA (165 SCRA 536)

GR No. L-36413, 9/26/2016

Padilla, J.:

Facts:

Malayan Insurance issued a Private Car Policy in favor of Sio Choy covering a Willys jeep for third-party
liability for P20,000. The insured jeep, while being driven by Campollo, an employee of San Leon,
collided with a PANTRANCO passenger bus causing damage to the jeep and injuries to its driver and to
its passenger, Vallejos.

Vallejos filed an action for damages against Sio Choy, Malayan Insurance Co., Inc. and the PANTRANCO.

Sio Choy, however, later filed a separate answer with a cross-claim against Malayan wherein he alleged
that he had actually paid Vallejos the amount of P5,000.00 for hospitalization and other expenses, and,
in his cross-claim against Malayan, he alleged that the Malayan had issued in his favor a private car
comprehensive policy wherein the insurance company obligated itself to indemnify Sio Choy, as insured,
for the damage to his motor vehicle, as well as for any liability to third persons arising out of any
accident during the effectivity of such insurance contract. He prayed that he be reimbursed by the
insurance company for the amount that he may be ordered to pay.

Also later, Malayan sought, and was granted, leave to file a third-party complaint against the San Leon
because the person driving the jeep of Sio Choy, at the time of the accident, was an employee of San
Leon, performing his duties within the scope of his assigned task, and not an employee of Sio Choy; and
that, as San Leon is the employer of the deceased driver, Campollo, it should be liable for the acts of its
employee, pursuant to Art. 2180 of the Civil Code. Malayan prayed that judgment be rendered against
San Leon, making it liable for the amounts claimed by Vallejos and/or ordering said San Leon to
reimburse and indemnify the Malayan for any sum that it may be ordered to pay Vallejos.

Malayan prays that San Leon be ordered to reimburse Malayan any amount, in excess of one-half (1/2)
of the entire amount of damages, because it is jointly and severally liable with Sio Choy.

Issue:Whether Malayan was solidarily liable with Sio Choy and San Leon for damages to Vallejos
Held:No, Malayan is liable to Vallejos, but is NOT solidarily liable with Sio Choy and San Leon.Sio Choy is
made liable to said plaintiff as owner of the ill-fated Willys jeep, pursuant to Article 2184 of the Civil
Code which provides:

Art. 2184. In motor vehicle mishaps, the owner is solidarily liable with his driver, if the former, who was
in the vehicle, could have, by the use of due diligence, prevented the misfortune it is disputably
presumed that a driver was negligent, if he had been found guilty of reckless driving or violating traffic
regulations at least twice within the next preceding two months.

If the owner was not in the motor vehicle, the provisions of article 2180 are applicable.

On the other hand, the basis of liability of San Leon to Vallejos, the former being the employer of the
driver of the Willys jeep at the time of the motor vehicle mishap, is Article 2180 of the Civil Code:

Art. 2180. 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.

xxx xxx xxx

Employers shall be liable for the damages caused by their employees and household helpers acting
within the scope of their assigned tasks, even though the former are not engaged ill any business or
industry.

xxx xxx xxx

The responsibility treated in this article shall cease when the persons herein mentioned proved that
they observed all the diligence of a good father of a family to prevent damage.

It thus appears that respondents Sio Choy and San Leon Rice Mill, Inc. are the principal tortfeasors who
are primarily liable to respondent Vallejos. The law states that the responsibility of two or more persons
who are liable for a quasi-delict is solidarily.

On the other hand, the basis of Malayan's liability is its insurance contract with respondent Sio Choy. If
petitioner is adjudged to pay respondent Vallejos in the amount of not more than P20,000.00, this is on
account of its being the insurer of respondent Sio Choy under the third party liability clause included in
the private car comprehensive policy existing between petitioner and respondent Sio Choy at the time
of the complained vehicular accident.
While it is true that where the insurance contract provides for indemnity against liability to third
persons, such third persons can directly sue the insurer, however, the direct liability of the insurer under
indemnity contracts against third party liability does not mean that the insurer can be held solidarily
liable with the insured and/or the other parties found at fault. The liability of the insurer is based on
contract; that of the insured is based on tort.

In the case at bar, Malayan as insurer of Sio Choy, is liable to Vallejos, but it cannot be made "solidarily"
liable with the two principal tortfeasors namely Sio Choy and San Leon. For if Malayan were solidarily
liable with said two (2) respondents by reason of the indemnity contract against third party liability-
under which an insurer can be directly sued by a third party — this will result in a violation of the
principles underlying solidary obligation and insurance contracts.

In solidary obligation, the creditor may enforce the entire obligation against one of the solidary debtors.

In the case at bar, the trial court held Malayan, Sio Choy and San Leon solidarily liable to respondent
Vallejos for a total amount of P29,103.00, but Malayan's liability is only up to P20,000.00. In the context
of a solidary obligation, Malayan may be compelled by Vallejos to pay the entire obligation of
P29,013.00, notwithstanding the qualification made by the trial court. But Malayan cannot be obliged to
pay the entire obligation when the amount stated in its insurance policy with respondent Sio Choy for
indemnity against third party liability is only P20,000.00. Moreover, the qualification made in the
decision of the trial court to the effect that petitioner is sentenced to pay up to P20,000.00 only when
the obligation to pay P29,103.00 is made solidary, is an evident breach of the concept of a solidary
obligation. Thus, We hold that the trial court, as upheld by the Court of Appeals, erred in holding
Malayan as solidarily liable with respondents Sio Choy and San Leon to Vallejos.

PHILIPPINE NATIONAL BANK, plaintiff-appellant, vs.

INDEPENDENT PLANTERS ASSOCIATION, INC., ANTONIO DIMAYUGA, DELFIN FAJARDO, CEFERINO
VALENCIA, MOISES CARANDANG, LUCIANO CASTILLO, AURELIO VALENCIA, LAURO LEVISTE, GAVINO
GONZALES, LOPE GEVANA and BONIFACIO LAUREANA, defendants-appellees.

G.R. No. L-28046 May 16, 1983

PLANA, J.:

FACTS: PNB filed with a now defunct CFI in Manila a complaint for the collection of a sum of money
against several solidary debtors. After PNB had presented its evidence, one of the defendants, Ceferino
Valencia, died. Thus, the CFI dismissed the action, holding that the complaint, being a money claim
based on contract, should be prosecuted in the testate or intestate proceeding for the settlement of the
estate of the deceased defendant pursuant to Section 6 of Rule 86 of the Rules of Court which reads:

SEC. 6. Solidary obligation of decedent.— If the obligation of the decedent is solidary with another
debtor, the claim shall be filed against the decedent as if he were the only debtor, without prejudice to
the right of the estate to recover contribution from the other debtor. In a joint obligation of the
decedent, the claim shall be confined to the portion belonging to him.

The appellant assails the order of dismissal, invoking its right of recourse against one, some or all of its
solidary debtors under Article 1216 of the Civil Code —
ART. 1216. The creditor may proceed against any one of the solidary debtors or some or all of them
simultaneously. The demand made against one of them shall not be an obstacle to those which may
subsequently be directed against the others, so long as the debt has not been fully collected.

ISSUE: Whether in an action for collection of a sum of money based on contract against all the solidary
debtors, the death of one defendant deprives the court of jurisdiction to proceed with the case against
the surviving defendants

HELD: No

It is now settled that the quoted Article 1216 grants the creditor the substantive right to seek
satisfaction of his credit from one, some or all of his solidary debtors, as he deems fit or convenient for
the protection of his interests; and if, after instituting a collection suit based on contract against some or
all of them and, during its pendency, one of the defendants dies, the court retains jurisdiction to
continue the proceedings and decide the case in respect of the surviving defendants.

Manila Surety & Fidelity Co., Inc. vs. Villarama et al.,:

It is evident from the foregoing that Section 6 of Rule 87 (now Rule 86) provides the procedure should
the creditor desire to go against the deceased debtor, but there is certainly nothing in the said provision
making compliance with such procedure a condition precedent before an ordinary action against the
surviving solidary debtors, xxxx

Upon the other hand, the Civil Code expressly allows the creditor to proceed against any one of the
solidary debtors or some or all of them simultaneously. There is, therefore, nothing improper in the
creditor's filing of an action against the surviving solidary debtors alone, instead of instituting a
proceeding for the settlement of the estate of the deceased debtor wherein his claim could be filed.

In PNB vs. Asuncion, Justice Makasiar, reiterated the doctrine.

...........As correctly argued by petitioner, if Section 6, Rule 86 of the Revised Rules of Court were applied
literally, Art. 1216 of the New Civil Code would, in effect, be repealed since under the Rules of Court,
petitioner has no choice but to proceed against the estate of Manuel Barredo only. Obviously, this
provision diminishes the Bank's right under the New Civil Code to proceed against any one, some or all
of the solidary debtors. Such a construction is not sanctioned by the principle, which is too well settled
to require citation, that a substantive law cannot be amended by a procedural rule. Otherwise stated,
Section 6, Rule 86 of the Revised Rules of Court cannot be made to prevail over Article 1216 of the New
Civil Code, the former being merely procedural, while the latter, substantive.

Case is remanded to the corresponding RTC for proceedings. No costs.

G.R. No. L-28498 November 6, 1928

THE BACHRACH MOTOR CO., INC., plaintiff-appellee,

vs.

FAUSTINO ESPIRITU, defendant-appellant, and

ROSARIO ESPIRITU, intervenor-appellant.

Ernesto Zaragoza and Simeon Ramos for defendant-appellant.

Benito Soliven and Jose Varela Calderon for intervenor-appellant.

B. Francisco for appellee.

AVANCEÑA, C. J.:

These two cases, Nos. 28497 and 28948, were tried together.

It appears, in connection with case 28497; that on July 28, 1925 the defendant Faustino Espiritu
purchased of the plaintiff corporation a two-ton White truck for P11,983.50, paying P1,000 down to
apply on account of this price, and obligating himself to pay the remaining P10,983.50 within the
periods agreed upon. To secure the payment of this sum, the defendants mortgaged the said truck
purchased and, besides, three others, two of which are numbered 77197 and 92744 respectively, and all
of the White make (Exhibit A). These two trucks had been purchased from the same plaintiff and were
fully paid for by the defendant and his brother Rosario Espiritu. The defendant failed to pay P10,477.82
of the price secured by this mortgage.

In connection with case 28498, it appears that on February 18, 1925 the defendant bought a one-
ton White truck of the plaintiff corporation for the sum of P7,136.50, and after having deducted the
P500 cash payment and the 12 per cent annual interest on the unpaid principal, obligated himself to
make payment of this sum within the periods agreed upon. To secure this payment the defendant
mortgaged to the plaintiff corporation the said truck purchased and two others, numbered 77197 and
92744, respectively, the same that were mortgaged in the purchase of the other truck referred to in the
other case. The defendant failed to pay P4,208.28 of this sum.

In both sales it was agreed that 12 per cent interest would be paid upon the unpaid portion of the
price at the executon of the contracts, and in case of non-payment of the total debt upon its maturity,
25 per cent thereon, as penalty.

In addition to the mortagage deeds referred to, which the defendant executed in favor of the
plaintiff, the defendant at the same time also signed a promissory note solidarily with his brother
Rosario Espiritu for the several sums secured by the two mortgages (Exhibits B and D).
 Rosario Espiritu appeared in these two cases as intervenor, alleging to be the exclusive owner of
the two White trucks Nos. 77197 and 92744, which appear to have been mortgaged by the defendants
to the plaintiff. lawphi1.net

While these two cases were pending in the lower court the mortgaged trucks were sold by virtue
of the mortgage, all of them together bringing in, after deducting the sheriff's fees and transportation
charges to Manila, the net sum of P3,269.58.

The judgment appealed from ordered the defendants and the intervenor to pay plaintiff in case
28497 the sum of P7,732.09 with interest at the rate of 12 per cent per annum from May 1, 1926 until
fully paid, and 25 per cent thereof in addition as penalty. In case 28498, the trial court ordered the
defendant and the intervenor to pay plaintiff the sum of P4,208.28 with interest at 12 per cent per
annum from December 1, 1925 until fully paid, and 25 per cent thereon as penalty.

The appellants contend that trucks 77197 and 92744 were not mortgaged, because, when the
defendant signed the mortgage deeds these trucks were not included in those documents, and were
only put in later, without defendant's knowledge. But there is positive proof that they were included at
the time the defendant signed these documents. Besides, there were presented two of defendant's
letters to Hidalgo, an employee of the plaintiff's written a few days before the transaction, acquiescing
in the inclusion of all his White trucks already paid for, in the mortgage (Exhibit H-I).

Appellants also alleged that on February 4, 1925, the defendant sold his rights in said trucks Nos.
77197 and 92744 to the intervenor, and that as the latter did not sign the mortgage deeds, such trucks
cannot be considered as mortgaged. But the evidence shows that while the intervenor Rosario Espiritu
did not sign the two mortgage deeds (Exhibits A and C), yet, together with the defendants Faustino
Espiritu, he signed the two promissory notes (Exhibits B and D) secured by these two mortgages. All
these instruments were executed at the same time, and when the trucks 77197 and 92744 were
included in the mortgages, the intervenor Rosario Espiritu was aware of it and consented to such
inclusion. These facts are supported by the testimony of Bachrach, manager of the plaintiff corporation,
of Agustin Ramirez, who witnessed the execution of all these documents, and of Angel Hidalgo, who
witnessed the execution of Exhibits B and D.

We do not find the statement of the intervenor Rosario Espiritu that he did not sign promissory
notes Exhibits B and C to be sufficient to overthrow this evidence. A comparison of his genuine signature
on Exhibit AA with those appearing on promissory notes B and C, convinces us that the latter are his
signatures. And such is our conclusion, notwithstanding the evidence presented to establish that on the
date when Exhibits B appears to have been signed, that is July 25, 1925, the intervenor was in Batac,
Ilocos Norte, many miles away from Manila. And the fact that on the 24th of said month of July, the
plaintiff sent some truck accessory parts by rail to Ilocos for the intervenor does not necessarily prove
that the latter could not have been in Manila on the 25th of that month.

In view of his conclusion that the intervenor signed the promissory notes secured by trucks 77197
and 92744 and consented to the mortgage of the same, it is immaterial whether he was or was not the
exclusive owner thereof.

It is finally contended that the 25 per cent penalty upon the debt, in addition to the interest of 12
per cent per annum, makes the contract usurious. Such a contention is not well founded. Article 1152 of
the Civil Code permits the agreement upon a penalty apart from the interest. Should there be such an
agreemnet, the penalty, as was held in the case of Lopez vs. Hernaez (32 Phil., 631), does not include the
interest, and which may be demamded separetely. According to this, the penalty is not to be added to
the interest for the determination of whether the interest exceeds the rate fixed by the law, since said
rate was fixed only for the interest. But considering that the obligation was partly performed, and
making use of the power given to the court by article 1154 of the Civil Code, this penalty is reduced to
10 per cent of the unpaid debt.

With the sole modification that instead of 25 per cent upon the sum owed, the defendants need
pay only 10 per cent thereon as penalty, the judgment appealed from is affired in all other respects
without special pronouncement as to costs. So ordered.

Kauffman vs PNB, GR No. 16454 September 29, 1921, digested

Posted by Pius Morados on January 4, 2012

(Negotiable Instruments)

Facts: Plaintiff was entitled to the sum of P98,000 from the surplus earnings of Philippine Fiber &
Produce Company (PFPC) which was placed to his credit on the company’s books. The PFPC treasurer
requested from PNB Manila that a telegraphic transfer of S45,000 should be made to the plaintiff in NY
upon account of PFPC. The treasurer drew and delivered a check for the amount of P90,355 on the PNB
which is the total costs o said transfer. As evidence, a document was made out and delivered to the
PFPC treasurer which is referred to by the bank’s assistant cashier as it’s official receipt.

On the same day the Philippine National Bank dispatched to its New York agency a cablegram to the
following effect:

Pay George A. Kauffman, New York, account Philippine Fiber Produce Co., $45,000. (Sgd.) PHILIPPINE
NATIONAL BANK, Manila.

Upon receipt of the telegraphic message, the bank’s representative advised the withholding of the
money from Kauffman, in view of his reluctance to accept certain bills of the PFPC. The PNB agreed and
sent to its NY agency another message to withhold the payment as suggested.
Upon advice of the PFPC treasurer that S45,000 had been placed to his credit, he presented himself at
the PNB NY and demanded the money but was refused due to the direction of the withholding of
payment.

Issue: WON plaintiff has a right over the money withhold.

Held: No. Provisions of the NIL can come into operation there must be a document in existence of the
character described in section 1 of the Law; and no rights properly speaking arise in respect to said
instrument until it is delivered.

The order transmitted by PNB to its NY branch, for the payment of a specified sum of money to the
plaintiff was not made payable “to order” or “to bearer”, as required in subsection (d) of that Act; and
inasmuch as it never left he possession of the bank, or its representative in NY, there was no delivery in
the sense intended in section 16 of the same Law.

In connection, it is unnecessary to point out that the official receipt delivered by the bank to the
purchaser of the telegraphic order cannot itself be viewed in the light of a negotiable instrument,
although it affords complete proof of the obligation actually assumed by the bank.

Carbonnel v. Poncio, et al.

G.R. No. L-11231, 12 May 1958
FACTS:

Petitioner Rosario Carbonnel allegedly purchased a parcel of land from respondent Jose Poncio. Such
land was mortgage to a bank which respondent has an obligation to pay. It was alleged that petitioner
partially pay the respondent of the price of the land and to assume respondent`s responsibility to
recover the land. One of the conditions of the alleged sale was that Poncio would be allowed to
continue in staying in said land for one year. However, Poncio has conveyed the same land the other
respondents herein which are the spouses Mr. and Mrs. Infante. Respondents herein claims that the
previous sale between Poncio and petitioner was unenforceable due to a violation of the Statute of
Fraud as the alleged sale was never deduced to writing. Petitioner here claims ownership of the said
property.

ISSUE:

Whether or not the transaction falls under the Statute of Frauds.

RULING:

No. It is well settled in this jurisdiction that the Statute of Frauds is applicable only to executory
contracts. It is the accepted view that part performance of a parol contract for the sale of real estate
has the effect, subject to certain conditions concerning the nature and extent of the acts constituting
performance and the right to equitable relief generally, of taking such contract from the operation of
the statute of frauds, so that chancery may decree its specific performance or grant other equitable
relief. If a contract has been totally or partially performed, the exclusion of parol evidence would
promote fraud or bad faith, for it would enable the defendant to keep the benefits already denied by
him from the transaction in litigation, and, at the same time, evade the obligations, responsibilities or
liabilities assumed or contracted by him thereby.
The true basis of the doctrine of part performance according to the overwhelming weight of authority,
is that it would be a fraud upon the plaintiff if the defendant were permitted to escape performance of
his part of the oral agreement after he has permitted the plaintiff to perform in reliance upon the
agreement.

In the case at bar, it appears that Poncio still asked permission from petitioner to stay in the premises.
Aside from that, it was shown that the passbook of Poncio was in the hand of the Petitioner and it has
a credit account allegedly representing the amount partially paid by petitioner.

Wherefore, the order appealed from is hereby set aside, and let this case be remanded to the lower
court for further proceedings not inconsistent with this decision, with the costs of this instance against
defendants-appellees. It is so ordered.