digest2 obli april

8/20/2019 Digest2 Obli April

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OBLICON2

FLORENCIO DEUDOR, ET AL vs. J.M.

TUASON &CO., INC. ET AL

PONENTE: JUSTICE FERNANDEZ

FACTS: Plaintif claimed a parcel o land o about 50

"quiñones" or 225 !ectares located in atalon#ue$on Cit% o&er '!ic! () *) uason+ Co) Inc)asserted o'ners!ip under t!e Land,e-istration .ct b% &irtue o an ori-inalcerti/cate o title) !e eudors ac1no'led-edt!erein t!e title o () *) uason+ Co) Inc) and inconsideration t!ereo () *) uason+ Co) Inc)undertoo1 to pa% t!em to be paid in t!emanner and under t!e conditions set ort! int!e Compromise .-reement .pril 30 3456)7nder t!e Compromise .-reement and sub8ectto its ot!er terms and conditions t!e eudorsare obli-ated to deli&er t!e clear and peaceul

possession o t!e entire 50 quiñones to t!eo'ners) !e /rst pa%ment s!all beP300000)00 and s!all be made 'it!in si9t%:06 da%s rom t!e date t!e decision renderedappro&in- t!e Compromise .-reementbecomes /nal; Pro&ided t!at 'it!in said periodt!e eudors s!all !a&e efected t!e deli&er% tot!e O o at least 20 quiñones) !eportion o 20 "quiñones" 'as not deli&ered b%t!e eudors until (anuar% 3? 345: and t!is'as made possible onl% because t!e appellees!ad a-reed to and did ad&ance certain in sumsto dera% t!e e9penses necessar% t!ereor) On

.pril 2@ 345: t!e appellees /ledsupplemental motion and "maniestation"pra%in- t!at pa%ment o balance o P@4A00)00to t!e eudors "be 'it!!eld until ater t!eadditional 324 ille-al constructions t!e 0quiñones area s!all !a&e been remo&ed") Onebruar% 2A 345@ t!e Court t!ereore !ereb%sets a period o ? mont!s 'it!in '!ic! t!eeudors s!all deli&er possession o t!e entire0 quiñones to t!e o'ners) ailure o t!eeudors to do so 'ill !a&e t!e efect o reein-

t!e ()*) uason+ Co) Inc) and t!e Dre-orio.raneta Inc) rom all its obli-ations under t!eCompromise .-reement and 8ud-ment) !eeudors !ad not deli&ered t!e aorementionedportion o 0 "#uiñones" despite t!ee9piration o t!e period o ? mont!s and t!at

o'in- to t!e ailure o t!e eudors to ma1esaid deli&er% t!e construction o !ouses b%squatters 'it!in said area !ad continued sounabated t!at as o .u-ust 32 345@ t!ere'ere ?3 constructions t!erein) .ppellantsmaintain t!at t!e orders are erroneous)

ISSUE:

HELD:


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OBLICON2

t!e deendant as administrators o !is estates) !ere remainin- o t!e marria-e t!e ollo'in-le-itimate c!ildren Pedro rancisco eodoro*anuel Dre-orio *ariano CarmenConcepcion and (ose Julo % ,e-alado) Ot!ese c!ildren Concepcion and (ose 'ere

minors '!ile eodoro 'as mentall%incompetent) !e% !eld t!e propert% incommon and !a&e continued t!eir currentaccount 'it! t!e plaintif under t!e name Gi8osde ) Julo) On .u-ust 32 3404 t!e deendantin representation o !is brot!ers includin- !isbrot!er *anuel and t!eir o'n be!al Pedrorancisco Carmen and Concepcion t!e latterbein- o a-e rati/ed an instrument on t!eirindebtedness to'ards plaintif all t!edocuments e9ecuted b% t!em beore) In t!isdocument t!e% !a&e se&erall% and 8ointl%ac1no'led-ed and admitted t!eir indebtedness

to t!e plaintif at t!e amount o P25??5)?2'it! an interest o ten percent per annum andpa%able 'it!in /&e installments) Pa%mentbe-ins on (une 0 34 and ends on (une 0343?) .lso part o t!e stipulation t!at t!eabo&ementioned instrument s!all be rati/ed b%t!eir brot!er *ariano Ju1o ,e-alado but ailedto do so) *oreo&er t!e brot!ers and sisters didnot pa% t!e /rst installment o t!e obli-ation)Gence plaintif instituted an action at CI Iloiloa-ainst deendant or t!e pa%ment oP25??5)?2 plus interest) On *a% 32 3433rancisco *anuel and Carmen Julo % ,e-alado

e9ecuted in a&or o plaintif anot!erinstrument o indebtedness '!ereb% t!e debtis reduce to P225000 'it! an interest o : percentum per annum pa%able b% ei-!tinstallments startin- on (une 0 3433 andends at (une 0 3434) !e trial court ruled ina&or o deendant 'it!out pre8udice to t!eplaintifs brin-in- 'it!in t!e proper timeanot!er suit or !is proportional part o t!e

8oint debt) Gence plaintif appealed decision;one o t!e a&erments is t!at t!e court erred in

considerin- t!e contract o *a% 32 3433 asconstitutin- a no&ation o t!at o .u-ust 323404)

Issu* a6

ri-!t b% t!e second a-reement e9ecuted; andb6

.lt!ou-! t!e contract o *a% 32 3433 did notno&ate t!at o .u-ust 32 3404 it !as afectedt!e case /led b% plaintif 'it! respect to t!epa%ment or t!e sum o P25??5)?2) Genceb% &irtue o remission plaintif can onl% reco&ert!e amount stated in t!e second contract

-ranted to t!e -ranted to t!e t!ree o t!esolidar% debtors) .s re-ards to t!e pa%ment !ecan pa% onl% P332500 o '!ic! is due oralread% matured) Gence deendant cannotalle-e t!e prematurit% o debt since '!en t!ela'suit is instituted t!e obli-ation or t!e /rstinstallment o t!e contract i .u-ust 32 3404!as alread% matured and due to t!e solidarit%o t!e obli-ation !e is liable to pa% t!e '!oleobli-ation) .n e9ception 'ould be t!e s!ares o rancisco *anuel and Carmen Julo none ot!e installments pa%able under t!eir obli-ationcontracted later !ad %et matured) !e

personal deense o rancisco *anuel andCarmen Julo "as to t!e part o t!e debt or'!ic! t!e% 'ere responsible" can be used b%Dre-orio Julo as a deense or pa%in- t!e '!oleobli-ation) !e part o t!e debt or '!ic! t!eset!ree are responsible is t!reeKsi9t!s oP225000 or P332500 '!ic! is not %etdemandable due to t!e e9ecution o t!esecond contract) Gence deendant can onl%pa% t!e !al portion o t!e obli-ation t!at isdemandable at t!at time) !is is in consonance'it! .rt) 3??A '!ic! states t!at E!e solidar%debtor ma% utili$e a-ainst t!e claims o t!e

creditor o t!e deenses arisin- rom t!e natureo t!e obli-ation and t!ose '!ic! are personalto !im) !ose personall% pertainin- to t!eot!ers ma% be emplo%ed b% !im onl% 'it!re-ard to t!e s!are o t!e debt or '!ic! t!elatter ma% be liableF)

!ereore deendant cannot be made to pa%t!e '!ole obli-ation because !e !as beenbene/ted b% remission made b% t!e plaintif to

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OBLICON2

t!ree o !is co debtors) !e 8ud-ment appealed!as been re&ersed)

INCION - CA

/' SCRA /'(

R!0*1! J2 Jun* 3, 43

FACTS

KPetitioners liabilit% resulted rom t!epromissor% note in t!e amount o P50000)00'!ic! !e si-ned 'it! ,ene C) Na%be andDre-orio ) Pantanosas on ebruar% 34A!oldin- t!emsel&es 8ointl% and se&erall% liableto pri&ate respondent P!ilippine Ban1 oCommunications PBC6 Ca-a%an de Oro Cit%branc!) !e promissor% note 'as due on *a%

5 34A

Kue date came and obli-ation 'as letunul/lled) PBC sent tele-rams to Incion-demandin- pa%ment) It also sent a letter toNa%de) Bot! obli-ors did not respond) !us PBC/led a suit or t!e collection o 50000)

K Case 'as initiall% dismissed or ailure oplaintif to prosecute t!e case) Go'e&er t!elo'er court reconsidered t!e dismissal orderand required t!e s!erif to ser&e t!esummonses) Lo'er court also dismissed t!e

case a-ainst deendant Pantanosas as pra%edor b% t!e pri&ate respondent !erein)*ean'!ile onl% t!e summons addressed topetitioner 'as ser&ed as t!e s!erif learnedt!at deendant Na%be !ad -one to >audi.rabia)

KIncion- on !is part stated t!at !e 'asapproac!ed b% !is riend Campos '!o claimedt!at !e 'as a partner o t!e branc! mana-er o PBC in t!e alcata lo-s operation) Campos alsotold !im t!at ,ene C) Na%be 'as interested in

t!e business and 'ould contribute a c!ainsa'to t!e &enture) Campos t!en persuadedpetitioner to act as a "coKma1er" in t!e saidloan)

Petitioner alle-edl% acceded but 'it! t!e

understandin- t!at !e 'ould onl% be a coKma1er or t!e loan o P5000)00)

KPetitioner alle-ed urt!er t!at /&e 56 copies o a blan1 promissor% note 'ere brou-!t to !imb% Campos at !is oHce) Ge aH9ed !issi-nature t!ereto but in one cop% !e indicatedt!at !e bound !imsel onl% or t!e amount oP5 000)00) !us it 'as b% t1c5*16, 71au+an+ 0s1*81*s*ntat!n t!at !e 'as madeliable or t!e amount o P50 000)00)

KC and C. ordered Incion- to pa% amount)

Incion- appealed)

ISSUE


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OBLICON2

KIncion- claimed t!at since t!e complaint 'asdropped a-ainst Na%be !is coKdebtor andPantonasa t!e -uarantor !e s!ould also bereleased rom liabilit% citin- .rt 20A0 o CC)!o'e&er contention is in&alid)

Kt!e promissor% note in&ol&ed in t!is casee9pressl% states t!at t!e t!ree si-natoriest!erein are jointly and severally liable, an% onesome or all o t!em ma% be proceeded a-ainstor t!e entire obli-ation) !e c!oice is let tot!e solidar% creditor to determine a-ainst'!om !e 'ill enorce collection) Consequentl%t!e dismissal o t!e case a-ainst (ud-ePontanosas ma% not be deemed as !a&in-disc!ar-ed petitioner rom liabilit% as 'ell) .sre-ards Na%be suHce it to sa% t!at t!e courtne&er acquired 8urisdiction o&er !im)

Petitioner t!ereore ma% onl% !a&e recoursea-ainst !is coKma1ers as pro&ided b% la')

RC=C -S CA

PONENTE: JUSTICE MELENCIO9 HERRERA

FACTS: .>On ? *a% 34@4 .lredo C!in-si-ned a Compre!ensi&e >uret% .-reement'it! ,i$al Commercial Ban1in- Corporation,CBC6 bindin- !imsel to jointly andseverally -uarantee t!e prompt pa%ment o allPB* obli-ations o'in- ,CBC in t!e a--re-ate

sum o ort% *illion P?0000000)006 Pesos)

Bet'een A >eptember to 0 October 34A0PB* /led se&eral applications or letters ocredit 'it! ,CBC) !rou-! said applicationsPB* obli-ated itsel amon- ot!er t!in-s topa% on demand or all drats6 dra'n under orpurportin- to be dra'n under t!e credits)=&er%t!in- bein- in order ,CBC opened t!ecorrespondin- letters o credit and imported&arious -oods or PB*s account) In due timet!e imported -oods arri&ed and 'ere released

in trust to PB* '!o ac1no'led-ed receiptt!ereo t!rou-! &arious trust receipts) .ll in allPB*s obli-ations stood at P@4A2:?4)0A)

Less t!an a %ear later or on @ .u-ust 34A3,CBC /led a Complaint or collection o said

sum a-ainst respondents PB* and .lredoC!in- 'it! t!e t!en Court o irst Instance oPasi- doc1eted as CMK?2) 7pon /lin- o abond satisactor% to t!e Court a eptember 34A3 PB* and C!in- mo&edto disc!ar-e t!e attac!ment '!ic! ,CBCopposed) On ? ecember 34A3 t!e Courtissued an Order litin- t!e attac!ment upont!eir /lin- o a satisactor% counterKbond)

*ean'!ile on 3 .pril 34A2 PB* /led a Petitionor >uspension o Pa%ments 'it! t!e >ecuritiesand =9c!an-e Commission doc1eted as >=CCase No) 2250 see1in- at t!e same time itsre!abilitation)

In an in8uncti&e Order dated : (ul% 34A2 allactions or claims a-ainst PB* pendin- beorean% Court or tribunal in '!ate&er sta-e t!esame ma% !a&e been 'ere ordered suspendedb% t!e >=C in order to -i&e t!e Commission t!eopportunit% to pass upon t!e easibilit% o an%re!abilitation plans) .nd on 2: .pril 34AA >=Cappro&ed t!e re&ised re!abilitation plan andordered its implementation)

On 3? October 34A2 ,CBC pursued its claims'it! t!e rial Court and /led unopposed a*otion or >ummar% (ud-ment in CMK?2 amotion or e9tension to /le said opposition!a&in- been earlier 'it!dra'n) ,CBCcontended t!at respondents PB* and C!in-

!ad not denied t!eir indebtedness to ,CBCand t!ereore no -enuine issue 'as raised int!e pleadin-s)

On 25 No&ember 34A2 t!e CI rendered suc!summar% 8ud-ment>> in ,CBCs a&or)

On appeal respondent Court o.ppeals>>> rulin- t!at it 'as precipitate andimproper or t!e lo'er Court to !a&e continued'it! t!e proceedin-s despite t!e >=C Order osuspension set aside t!e lo'er Court ecisionand ordered it to !old in abe%ance t!e

determination o t!e merits in&o1ed in CMK?2 pendin- t!e outcome o >=C Case No)2250) On : October 34AA t!e .ppellate Courtdenied ,CBCs *otion or ,econsideration)

ISSUE: ?## a S*cu1t*s an+ E@chan;*

C!00ss!n SECB O1+*1 sus8*n+n;,

+u1n; th* 8*n+*nc6 !7 a 1*ha


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OBLICON2

PB* and C!in- is to depri&e ,CBC o its ri-!t toproceed a-ainst t!e >uret% based on t!elatters separate and independent underta1in-)

PB* and C!in- counter t!at t!e liabilitiesincurred b% PB* 'ere corporate in c!aracter

and !ence as a corporate oHcer .lredoC!in- cannot be !eld liable t!ereor; t!at t!ependenc% o >=C Case No) 2250 and t!erendition o an Order t!erein on 2: .pril 34AAimplementin- respondent PB*s re!abilitationplan must necessaril% bene/t t!e >uret%inasmuc! as pa%ment o PB* obli-ations mustbe made pursuant to t!at plan; and t!at t!eliabilit% o t!e >uret% can not be more t!an'!at 'ould remain ater pa%ment o all t!eobli-ations o t!e principal) *oreo&er t!e%continue it is usual or ma8orit% stoc1!olders toact as coKsi-nors 'it! t!eir respecti&e

corporations '!ere promissor% notescollaterals or -uarant% or securit% a-reementsare in&ol&ed) ,espondent C!in-s action ma% itis claimed be classi/ed as a corporate act)

7nder t!e attendant acts and circumstances'e ans'er t!e question earlier posed in t!ene-ati&e)

ormer !as a ri-!t to demand or t!at eac! oneo t!e latter is bound to render entirecompliance 'it! t!e prestation .rticle 320@Ci&il Code6) !e creditor ma% proceed a-ainstan% one o t!e solidar% debtors or some or allo t!em simultaneousl% .rticle 323: Ci&ilCode6)

!at t!ere e9ists a Compre!ensi&e >uret%.-reement bet'een ,CBC and respondentC!in- is admitted) !ere is no escapin- t!e

attendant liabilit% t!at binds respondent C!in-as >uret%) Ge is c!ar-ed as an ori-inalpromissor b% &irtue o !is primar% obli-ationunder t!e >uret%s!ip .-reement) !at.-reement is bare o 'ords imputin- torespondent C!inan% liabilit% ot!er t!an t!at

o a >uret% '!o binds !imsel to insure a debtin !is personal capacit% lac1in- considerationt!ereor not'it!standin- p) 4? Ori-inal,ecord6) !at respondent C!in- acted or andon be!al o respondent PB* as part o itsusual corporate procedure is not supported b%t!e e&idence nor t!e pleadin-s on record nort!e .-reement itsel )=C in8uncti&e Order can notefect a suspension o pa%ment o respondent>uret%s due and demandable obli-ation itbein- clear t!ererom t!at t!e re!abilitationrecei&ers 'ere limited "to ta1in-6 custod% andcontrol o&er all t!e e9istin- assets and propert%o PB*)" Not!in- in said Order puts respondentC!in- 'it!in its scope)

o urt!er a&oid pa%ment o t!eir obli-ationPB* and C!in- alle-e a customar% e9tension-i&en b% petitioner in PB*s a&or '!ic! it isa&erred must necessaril% bene/t t!e >uret%)>uHce it to sa% t!at t!e summar% 8ud-mentmade b% t!e lo'er Court ofers an acceptable

e9planation /ndin- respondents obli-ation asmatured and demandable) !us

!e trust receipts rom No) 20?2 to 2300 in t!esc!edule pa-es 2 and complaint6 s!o'st!at t!e maturit% dates t!ereo &ar% rom *a%32 34A3 at t!e latest and ebruar% 34 34A3 att!e earliest) !e alle-ed a-reement to e9tend-rantin- its e9istence ob&iousl% 'ould !a&e!ad a muc! earlier date t!an t!e maturit%dates o t!e trust receipts and considerin- t!att!e instant case 'as brou-!t on .u-ust @34A3 t!ere s!ould !a&e been to sa% t!e least

representation made prior to t!e maturit%dates or at least on t!e dates o maturit%t!ereo) But it !as not e&en been alle-ed b%deendants t!at suc! representations 'eremade b% deendants) It is too ar etc!ed torule t!at t!e Court 'ill -rant an e9tension otime to pa% '!en no suc! e9tension !as e&erbeen requested b% deendants) !e obli-ationt!ereore is co&ered b% .rticle 334 o t!e Ci&ilCode and !ence demandable '!en t!e da%comes pp) 344K200 Ori-inal ,ecord6)

!e lo'er Court correctl% ound t!e case to be

'it!out an% -enuine issue o act and ripe orsummar% 8ud-ment) ,espondents barealle-ation o customar% e9tensions is notcorroborated b% an% documentar% e&idence butremains plain selKser&in- assertions)

In /ne t!e >=C in8uncti&e Order is o no efectas ar as t!e respondent >uret% .lredo C!in-is concerned) Ge can be sued separatel% toenorce !is liabilit% as >uret% or PB* raders

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OBLICON2

,o%al Ban1 &s) Court o .ppeals et al) D),) No)@A?32 >eptember 2: 34A46)

= .>I=) !e 8ud-ment o t!e lo'er Court is !ereb%,=IN>.= and made e9ecutor% as ar asrespondent .lredo C!in- is concerned)

Costs a-ainst pri&ate respondents P!ilippineBloomin- *ills and .lredo C!in-)

La7a1;* C*0*nt Ph#88n*s, Inc. v.

C!ntn*nta# C*0*nt C!18!1at!n

%%$ SCRA / N!v*0P.6 and'ere 'ell a'are t!at Continental !ad a casependin- 'it! t!e >upreme Court)!e parties

under Clause 2 c6 o t!e >P. alle-edl% a-reedto retain rom t!e purc!ase price a portion ot!e contract price to be deposited or pa%mentto .P)

Go'e&er petitioners alle-edl% reused to appl%t!e sum to t!e pa%ment to .P despite t!esubsequent /nalit% o t!e ecision in D, No)334@32 in a&or o t!e latter and t!e repeatedinstructions o ,espondent Continental)

Continental /led a case a-ainst Laar-e statin-t!at petitioners be directed to pa% t!e E.P,etained .mountF reerred in Clause 2 c6 ot!e >P.) Petitioners mo&ed to dismiss t!ecomplaint on t!e -round o orum s!oppin-),C denied t!e *otion to ismiss Laar-e

ele&ated t!e matter to C.) Laar-e /led t!eir.ns'er and Compulsor% Counterclaims andpra%ed b% 'a% o compulsor% counterclaimsa-ainst ,espondent Continental its ma8orit%stoc1!older and president Lim and corporatesecretar% *ariano KK or t!e sums oa6 P2@00000 eac! as actual dama-esb6 P300000000 eac! as e9emplar% dama-esc6 P300000000 eac! as moral dama-es andd6 P5000000 eac! as attorne%Qs ees pluscosts o suit)

On *a% 22 2002 t!e ,e-ional rial Court o#ue$on Cit% Branc! A06 dismissed petitionersQcounterclaims or se&eral reasons amon-'!ic! 'ere t!e ollo'in- a6 t!e counterclaimsa-ainst ,espondents Lim and *ariano 'ere notcompulsor%; b6 t!e rulin- in !apugay 'as notapplicable; and c6 petitionersQ .ns'er 'it!Counterclaims &iolated procedural rules on t!eproper 8oinder o causes o action) In anamended order dated >eptember 2002)

Issu*:

to mo&e to dismiss petitionersQ compulsor%counterclaims on ,espondents Lim and*arianoQs be!al)

H*#+Ru#n;: "ES

Obli-ations ma% be classi/ed as eit!er 8oint or solidar%) E(ointF or E8ointl%F or Econ8ointFmeans mancumor mancomunadaor pro rataobli-ation; on t!e ot!er !and Esolidar%

obli-ationsF ma% be used interc!an-eabl% 'it!E8oint and se&eral)F !us petitionersQ use ot!e term E8oint and solidar%F is conusin- andambi-uous)

!e ambi-uit% in petitionersQ counterclaimsnot'it!standin- respondentsQ liabilit% ipro&en is solidar%) !is c!aracteri$ation /ndsbasis in .rticle 320@ o t!e Ci&il Code '!ic!pro&ides t!at obli-ations are -enerall%considered 8oint e9cept '!en ot!er'isee9pressl% stated or '!en t!e la' or t!e natureo t!e obli-ation requires solidarit%) Go'e&erobli-ations arisin- rom tort are b% t!eirnature al'a%s solidar%)


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OBLICON2

e9cept amon- t!emsel&es) !e% cannot insistupon an apportionment or t!e purpose oeac! pa%inan aliquot part) !e% are 8ointl%and se&erall% liable or t!e '!ole amount) 9 99

In a E8ointF obli-ation eac! obli-or ans'ers

onl% or a part o t!e '!ole liabilit%; in aEsolidar%F or E8oint and se&eralF obli-ation t!erelations!ip bet'een t!e acti&e and t!epassi&e sub8ects is so close t!at eac! o t!emmust compl% 'it! or demand t!e ul/llment ot!e '!ole obli-ation) !e act t!at t!e liabilit%sou-!t a-ainst t!e Continental is or speci/cperormance and tort '!ile t!at sou-!ta-ainst t!e indi&idual respondents is basedsolel% on tort does not ne-ate t!e solidar%nature o t!eir liabilit% o tortuous acts alle-edin t!e counterclaims) .rticle 3233 o t!e Ci&ilCode is e9plicit to t!is point E>olidarit% ma%

e9ist alt!ou-! t!e creditors and t!e debtorsma% not be bound in t!e same manner and b%t!e same periods and conditions)

P*tt!n s RANTED an+ th* assa#*+O1+*1s RE-ERSED. Th* c!u1t !7 !1;n s

h*1*CDranted &alidit% o claim

>eptember 3432 committee on t!e estateproceedin-s o ,o-ero made its report to passupon claims a-ainst t!e estate R *arc! 2?343? (aucian /led a claim a-ainst t!e estate o

,o-ero or pa%ment due to insol&enc% oa%adante

ISSUE: ) .s suret% ,o-eroQs liabilit% isabsolute R NO >7B>II.,J '!ere (aucians!ould /rst e9!aust t!e remed% a-ainstprincipal a%adante beore impu-nin- ,o-eroor a%adanteQs de/cienc% R >G= BO7NG=,>=L (OINLJ OL7= 7,=J BO7N (OINLJ .N >=M=,.LLJ

8uridical conceptions o liabilit% incident tomultiple obli-ations as embodied in t!e ci&il

la' and common la' respecti&el%; and t!e ci&illa' distinction is noted bet'een t!eapportionable 8oint obli-ation and t!e solidar%

8oint obli-ation) .t common la' eac! o t!edebtors in a multiple obli-ation is liable insolidum or t!e '!ole t!e obli-ation not bein-apportionable amon- t!e debtors)

.R. N!. L9'4(/ Au;ust $4, 4//

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OBLICON2

REHA=ILITATION FINANCE CORPORATION

v. COURT OF APPEALS an+ REALT"

IN-ESTMENTS, INC.

RE"ES, A., J.:

acts ,C solel% liable or t!e purc!ase pricedue to seller e&en i it is not t!e principaldebtor because it !ad assumed t!e obli-ationupon ul/lment o t!e condition t!at t!e title bemade in a&our o principal ree o liens andencumbrances and mort-a-e re-isteredt!ereon)

(une 3@ 34?A Contract o >ale R el/nomin-ue$ and ,ealt% In&estments Inc) '!ereormer 'ould purc!ase propert% o t!e latter

or dp o P4)4A and balance in 334 mont!l%instalments R Loan rom ,e!abilitation inanceCorporation 'ort! P301 to s!oulder !ousee9penses IN =TCG.ND= O, mort-a-e o t!e!ouse and lot R Pa%mentassumption b% ,C o t!e purc!ase price to ,II upon C in a&our oomin-ue$ and re-istration o mort-a-e titleto t!e lot be /rst con&e%ed to omin-ue$ and,Cs mort-a-e lien t!ereon re-istered6

R >eptember 20 34?A C to omin-ue$ andre-istration o mort-a-e in re-istr% o deeds R,elase o P:500 rom loan but remainder not

released U due to deault o omin-ue$ orpa%ment o '!at !e !ad alread% recei&ed Roreclosure o t!e mort-a-e b% ,C R >uit orpa%ment o t!e purc!ase price b% ,II a-ainst,C '!en latter reused

I>>7=

G=L Liabilit% o ,C R .bsolute and=9clusi&e R

purc!ase price due rom t!e purc!aser ater itsmort-a-e lien t!ereon !ad been re-istered

.R. N!. $4 Au;ust $, 4

NICENCIO TAN UIOM=IN v. COURT OF

APPEALS, an+ S8s. FRANCISCO an+

MANUELITA A. SALIO

CRUZ, J.:

acts >olidar% creditor #uiombin- can e9erciseaction or pa%ment a-ainst debtor e&en'it!out t!e ot!er solidar% creditor becauseeit!er one can mutuall% represent t!e ot!er to'!om t!e debtor are bot! liable

R .u-ust 0 34A Construction and >er&ice.-reement '!ere Nicencio an #uiombin- andante Biscoc!o 8ointl% and se&erall% boundt!emsel&es to construct a !ouse o >ps)rancisco and *anuelita >ali-o orP3@4?0)00

R October 30 34A? .-reement '!ere sps)ac1no'led-ed !ouse completion andundertoo1 to pa% t!e balance

R No&ember 34 34A? Promissor% note b%>ali-o or P325:)50

R October 4 34A: .ction or reco&er% oamount b% #uiombin- due to ailure o sps) topa% t!e balance

R Contention o >ps t!at Biscoc!o 'as anindispensable part% and s!ould !a&e beenincluded as coKplaintif

R .ppeal b% #uiombin- t!at as a solidar%creditor !e could act b% !imsel alone in t!e

enorcement o !is claim a-ainst t!e pri&aterespondents

I>>7= OLI.,IJ B=ps) to pa% and be concerned onl% 'it!#uiombin- R .rt) 323? t!at "t!e debtor ma%pa% an% o t!e solidar% creditors; but i an%demand 8udicial or e9tra8udicial !as been

made b% an% one o t!em pa%ment s!ould bemade to !im" R Biscoc!o ma% later claim !iss!are rom #uiombin- but t!at decision is or!im alone to ma1e R as ar as t!e debtors areconcerned pa%ment o t!e 8ud-ment debt tot!e complainant 'ill be considered pa%ment tot!e ot!er solidar% creditor e&en i t!e latter'as not a part% to t!e suit

. 8oint obli-ation is one in '!ic! eac! o t!edebtors is liable onl% or a proportionate part o t!e debt and eac! creditor is entitled onl% to a

A ) P a - e


9/50

OBLICON2

proportionate part o t!e credit) . solidar%obli-ation is one in '!ic! eac! debtor is liableor t!e entire obli-ation and eac! creditor isentitled to demand t!e '!ole obli-ation)Gence in t!e ormer eac! creditor can reco&eronl% !is s!are o t!e obli-ation and eac!

debtor can be made to pa% onl% !is part;'!ereas in t!e latter eac! creditor ma%enorce t!e entire obli-ation and eac! debtorma% be obli-ed to pa% it in ull)

.rt) 3232 =ac! one o t!e solidar% creditorsma% do '!ate&er ma% be useul to t!e ot!ersbut not an%t!in- '!ic! ma% be pre8udice to t!elatter)

Indispensable parties are t!ose 'it! suc! aninterest in t!e contro&ers% t!at a /nal decree'ould necessaril% afect t!eir ri-!ts so t!at

t!e court cannot proceed 'it!out t!eirpresence) Necessar% parties are t!ose '!osepresence is necessar% to ad8udicate t!e '!olecontro&ers% but '!ose interests are so arseparable t!at a /nal decree can be made int!eir absence 'it!out afectin- t!em)

.R. N!. 4$%4 S*8t*0ublease o&er ais!pond amon- ,omeo (arin- and >ps) Placidoand Purita .lipio and Bien&enido and ,emedios*anuel U bound t!emsel&es as spouses RO&er a 5K%earKleased /s!pond o (arin- R Maliduntil >eptember 32 3440 or t!e remainin-

period o !is lease R ,ent P?A5:00)00 P001upon si-nin- P.I; P3A5:00 on (une 034A4 P.,I.LLJ P.I uit b% (arin- a-ainst >ps)

or collection or rescission

R ,C ebruar% 2: 34436 and C. a&oured (arin- and ordered >ps) *anuel and *rs) .lipioto pa% t!e balance at t!e e9clusion o *r).lipio '!o !ad died

I>>7= !ould be solidar%liable

G=L No

>C 7PG=L ismissal due to deat! o !er

Gusband on ecember 3 34AA R t!at t!eobli-ation is c!ar-eable a-ainst t!e >ps) andnot t!e indi&idual NCC 3:3366 R must be !elda-ainst t!e con8u-al partners!ip '!ic! isprimaril% bound or its repa%ment t!rou-! anaction or settlement o estate U con8u-alpartners!ip 'as automaticall% dissol&ed anddebts c!ar-eable a-ainst it are to be paid int!e settlement o estate proceedin-s R !ences!e cannot be sued as an independent part% inan action or collection

R Calma &) añedo ater t!e deat! o eit!er o

t!e spouses no complaint or t!e collection oindebtedness c!ar-eable a-ainst t!e con8u-alpartners!ip can be brou-!t a-ainst t!esur&i&in- spouse R po'ers o administration ot!e sur&i&in- spouse ceases and is passed tot!e administrator R sur&i&in- spouse is note&en a de acto administrator R >ps) are bein-impleaded in t!eir capacit% as representati&eso t!e con8u-al partners!ip and not asindependent debtors

R ,=*=J O (.,IND .D.IN> .LIPIO>PO7>=>

R >ec) : ,ule @A o t!e ,e&ised ,ules o CourtCreditor ma% 36 /le a claim a-ainst t!e .lipiosin t!e proceedin- or t!e settlement o t!e

estate o petitioners !usband; 26 appl% incourt or letters o administration in !iscapacit% as a principal creditor; 6 t!eallo'ance o 'ill dependin- on '!et!erpetitioners !usband died intestate or testate)

R LI.BILIJ O >PO7>=> .N 4 ) P a - e


10/50

OBLICON2

not be dismissed but s!all instead be allo'edto continue until entr% o /nal 8ud-ment) .a&orable 8ud-ment obtained b% t!e plaintift!erein s!all be enorced in t!e mannerespeciall% pro&ided in t!ese ,ules orprosecutin- claims a-ainst t!e estate o a

deceased person)

.R. N!. L94'( Jun* $, 43'

MAATI DE-ELOPMENT CORPORATION v.

EMPIRE INSURANCE CO. an+ RODOLFO P.

ANDAL

C.>,O ()

Facts: oreiture o t!e P321 suret% bond ina&our o *C &endor6 upon ailure o &endeeto construct 50X o t!e !ouse on t!e

purc!ased lot as a special condition to sale olot is a P=N.L CL.7>= t!at is meant to compelt!e conditionQs perormance) ailure o t!e&endee to compl% -rants &endor t!e operationo suc! penalt% as a substitute or dama-esand interest) But t!e Court can miti-ate t!eliabilit% and because second &endee !asconstructed 50X o t!e !ouse 8ust a mont!ater t!e e9piration t!e bond 'as &alidl%reduced)

R eed o >ale *arc! 3 34546 R b% *a1atie&elopment Corporation to ,odolo P) .ndal

o&er a lot in 7rdaneta Milla-e *a1ati R>P=CI.L CONIION EM=N==> s!allcommence t!e construction and complete atleast 50X o !is!ert!eirits residence on t!epropert% 'it!in 2% rom *arc! 3 3454 to t!esatisaction o t!e M=NO, and in t!e e&ent o !is!ert!eirits ailure to do so t!e bond '!ic!t!e M=N==> !as deli&ered to t!e M=NO, int!e sum o P3332)00 and e&idenced b% acas! bond receipt dated .pril 30 3454 'ill beoreited in a&or o t!e M=NO, b% t!e mereact o ailure o t!e M=N==> to compl% 'it!

t!is special conditionF R >uret% bond 'ort!P321 .pril 30 34546 b% .ndal as principal 'it!=mpire Insurance Compan% as suret% 8ointl% orse&erall% R .ndal did not build !ouse and soldlot to (uan Carlos (anuar% 3A 34:06 R Noticeo Claim .pril 34:36 b% *C to =mpire re

.ndalQs ailure R ,eusal o =mpire to pa% R>uit or Collection a-ainst =mpire *a% 2234:36 R !ird part% complaint a-ainst .ndal R,C Geld =mpire liable *arc! 2A 34:6 to pa%*C EP3500 'it! interest at t!e rate o 32Xrom t!e time o t!e /lin- o t!e complaint untilt!e amount 'as ull% paidF R Once paid b%=mpire .ndal Es!ould in turn pa% Y=mpireZ t!esum o P3500 'it! interest at 32X rom t!etime o t!e /lin- o t!e complaint to t!e time o pa%mentF R .ppeal b% *C R ,eduction o.ndalQs liabilit% rom P321 to P3500

HELD: >pecial Condition is a P=N.L CL.7>=but not or indemnit% or dama-es t!at mi-!tresult rom a breac! o contract but orCO*P7L>ION O P=,O,*.NC= ,esolutor%Obli-ation6

R D=N=,.L ,7L= O, OBLID.ION> => R penalt% ta1es t!e place odama-es and t!e pa%ment o interest in case

o nonKcompliance R obli-ee is entitled toreco&er upon t!e breac! o t!e obli-ation'it!out t!e need o pro&indama-es B7Court can miti-ate liabilit% NCC 3224 U !e

8ud-e s!all equitabl% reduce t!e penalt% '!ent!e principal obli-ation !as been partl% orirre-ularl% complied 'it! b% t!e debtor) =&en it!ere !as been no perormance t!e penalt%ma% also be reduced b% t!e courts i it isiniquitous or unconscionable6 R PartialPerormance b% Carlos R t!at '!ere t!ere !as

been partial or irre-ular compliance 'it! t!epro&isions in a contract or specialindemni/cation in t!e e&ent o ailure tocompl% 'it! its terms courts 'ill ri-idl% appl%t!e doctrine o strict construction a-ainst t!eenorcement in its entiret% o t!e

indemni/cation '!ere it is clear rom t!econtract t!at t!e amount or c!aracter o t!eindemnit% is /9ed 'it!out re-ard to t!eprobable dama-es '!ic! mi-!t be anticipatedas a result o a breac! o t!e terms o t!econtract or in ot!er 'ords '!ere t!eindemnit% pro&ided or is essentiall% a merepenalt% !a&in- or its ob8ect t!e enorcement o compliance 'it! t!e contract

R ,eduction o .ndalQs liabilit% rom P321 to

P3500 due to little dela% in ul/lment oobli-ations U t!at area !as been encedbuildin- materials !as been stoc1ed in t!epremises R (uan Carlos 'as able to construct50X o t!e !ouse b% t!e end o .pril 34:3 U

8ust a mont! ater e9piration

R LI.BILIJ o .ndal cannot be construed as apersonal obli-ation R not to limit .ndals ri-!tto dispose o t!e lot '!ere t!ere is not!in- int!e deed o sale restrictin- .ndals ri-!t to sell

R CarlosQs construction as .ndalQs construction

Option o penalt% in lieu o perormance is 'it!creditor

I it is indemnit% or dama-es U tied to lossessufered b% creditor penalt% cannot be reducedR but i intended to insure perormance oobli-ation U court can reduce R

30 ) P a - e


11/50

OBLICON2

.ntonio an &s) Court o .ppeals + CCP

D, No) 33:2A5 October 34 2003

acts

On *a% 3? 34@A and (ul% : 34@A petitioner.ntonio an obtained 2 loans P2000000)00 ineac! loans or a total o P?000000)00 romrespondent Cultural Center o t!e P!ilippines'it! promissor% notes and maturit% dates atera %ear) Petitioner deaulted but ater a e'

partial pa%ments !e !ad t!e loans restructuredb% respondent CCP and petitioner accordin-l%e9ecuted a promissor% note t!at P?33?23)2is pa%able in /&e 56 installments) Petitioner

an ailed to pa% an% installment on t!e saidrestructured loan)

In a letter .N requested and proposed torespondent CCP a mode o pa%in- t!erestructured loan a6 20X o t!e principalamount o t!e loan upon t!e respondent -i&in-its conormit% to !is proposal b6Balance on t!e

principal obli-ation pa%able : mont!l%installments until ull% paid) .N alsorequested or a moratorium on !is loanobli-ation until t!e ollo'in- %ear alle-edl% dueto a substantial deduction in t!e &olume o !isbusiness and on account o t!e pesode&aluation) Go'e&er t!ereQs no a&orableresponse to t!e said letters) CCP demanded ullpa%ment 'it!in ten 306 da%s rom receipt o said letter P:0AA@5)0)

CCP t!en /led a CO*PL.IN to collect t!emone%) .N interposed t!e deense t!at !e

accommodated a riend '!o as1ed or !elp toobtain a loan rom CCP but !e claimed t!at t!eriend cannot /nd) .N /led a *aniestation'!erein !e proposed to settle !is indebtednessto CCP but t!e% didnQt reac! an amicablesettlement)

,I.L CO7, O,=,= .N O P.J CCPP@44:3?):@ representin- deendantQsoutstandin- account as o .u-ust 2A 34A:'it! t!e correspondin- stipulated interest andc!ar-es t!ereo until ull% paid plus attorne%Qsees in an amount equi&alent to 25X o saidoutstandin- account plus P50000)00 ase9emplar% dama-es plus costs) !is isbecause t!e reason o loan or accommodationo riend 'as not credible) .ssumin- arguendot!at .N did not personall% bene/t rom loan!e s!ould !a&e /led a rdKpart% complainta-ainst

In obli-ations 'it! a penal clause t!e penalt%s!all substitute t!e indemnit% or dama-es andt!e pa%ment o interests in case o nonKcompliance i t!ere is no stipulation to t!econtrar%) Ne&ert!eless dama-es s!all be paidi t!e obli-or reuses to pa% t!e penalt% or is-uilt% o raud in t!e ul/llment o t!eobli-ation)

!e penalt% ma% be enorced onl% '!en it isdemandable in accordance 'it! t!e pro&isionso t!is Code)

In t!e case at bar t!e promissor% notee9pressl% pro&ides or t!e imposition o bot!interest and penalties in case o deault on t!epart o t!e petitioner in t!e pa%ment o t!esub8ect restructured loan) Promissor% noteimposin- interest and penalties pro&ides t!ator &alue recei&ed I at its oHce in *anila t!esum o G,== *ILLION O7, G7N,==L=M=N GO7>.N O7, G7N,= [ P=>O>P?33?23)26 P!ilippine Currenc%

999)

G,== P=,C=N X6 >=,MIC=CG.,D=)In case o nonKpa%ment o t!is note atmaturit%on demand or upon deault opa%ment o an% portion o it '!en due I


12/50

OBLICON2

'!en due s!all render all ot!er installmentsand all e9istin- promissor% notes made b% us ina&or o t!e C7L7,.L C=N=, O G=PGILIPPIN=> immediatel% due and demandable)7nderscorin- supplied6

999 999 999

!e stipulated ourteen percent 3?X6 perannum interest c!ar-e until ull pa%ment o t!eloan constitutes t!e monetar% interest on t!enote and is allo'ed under .rticle 345: o t!eNe' Ci&il Code) On t!e ot!er !and t!estipulated t'o percent 2X6 per mont! penalt%is in t!e orm o penalt% c!ar-e '!ic! isseparate and distinct rom t!e monetar%interest on t!e principal o t!e loan)

Penalt% on delinquent loans ma% ta1e diferentorms) In #overnment !ervice Insurance!ystem v. Court of ppeals, t!is Court !asruled t!at t!e Ne' Ci&il Code permits an

a-reement upon a penalt% apart rom t!emonetar% interest) I t!e parties stipulate t!is1ind o a-reement t!e penalt% does notinclude t!e monetar% interest and as suc! t!et'o are diferent and distinct rom eac! ot!erand ma% be demanded separatel%) #uotin-$%uitable &an'ing Corp. v. (iwanag, t!e D>I>case 'ent on to state t!at suc! a stipulationabout pa%ment o an additional interest rateparta1es o t!e nature o a penalt% clause'!ic! is sanctioned b% la' more particularl%under .rticle 2204 o t!e Ne' Ci&il Code '!ic!pro&ides t!at

I t!e obli-ation consists in t!e pa%ment o asum o mone% and t!e debtor incurs in dela%t!e indemnit% or dama-es t!ere bein- nostipulation to t!e contrar% s!all be t!epa%ment o t!e interest a-reed upon and int!e absence o stipulation t!e le-al interest'!ic! is si9 per cent per annum)

!e penalt% c!ar-e o t'o percent 2X6 permont! in t!e case at bar be-an to accrue romt!e time o deault b% t!e petitioner) !ere isno doubt t!at t!e petitioner is liable or bot!t!e stipulated monetar% interest and t!estipulated penalt% c!ar-e) !e penalt% c!ar-e

is also called penalt% or compensator% interest)Ga&in- clari/ed t!e same t!e ne9t issue to beresol&ed is '!et!er interest ma% accrue on t!epenalt% or compensator% interest 'it!out&iolatin- t!e pro&isions o .rticle 3454 o t!eNe' Ci&il Code '!ic! pro&ides t!at


13/50

OBLICON2

conditions imposed b% t!e latter in asupplemental a-reement dated .u-ust 334@4)

In pursuance o t!eir latter a-reement >%sarrears in rental in t!e amount o P325?55)@:

as o (ul% 3 34@46 'as reduced toP@302A)43 as o ecember 3 34@4)Go'e&er t!e accrued amusement ta9 liabilit%o t!e t!ree 6 t!eaters to t!e Cit%Do&ernment o Cabanatuan Cit% !adaccumulated to PA?000)00 despite t!e actt!at >% !ad been deductin- t!e amount oP?000)00 rom !is mont!l% rental 'it! t!eobli-ation to remit t!e said deductions to t!ecit% -o&ernment) Gence letters o demanddated (anuar% @ 34A0 and ebruar% 34A0'ere sent to >% demandin- pa%ment o t!earrears in rentals and amusement ta9delinquenc%) !e latter demand 'as 'it!'arnin- t!at OM=C 'ill reKenter and repossess

t!e .&enue Broad'a% and Capital !eaters onebruar% 33 34A0 in pursuance o t!epertinent pro&isions o t!eir lease contract o

(une 33 34@@ and t!eir supplemental letterKa-reement o .u-ust 3 34@4) Butnot'it!standin- t!e said demands and'arnin-s >J ailed to pa% t!e abo&eKmentionedamounts in ull Consequentl% OM=C padloc1edt!e -ates o t!e t!ree t!eaters under lease andtoo1 possession t!ereo in t!e mornin- oebruar% 33 34A0 b% postin- its men aroundt!e premises o t!e Id mo&ie !ouses andpre&entin- t!e lessees emplo%ees romenterin- t!e same)

>% t!rou-! !is counsel /led t!e present actionor reormation o t!e lease a-reementdama-es and in8unction late in t!e aternoon o t!e same da%)

!e trial court !eld t!at >% is not entitled to t!ereormation o t!e lease a-reement; t!at t!erepossession o t!e leased premises b% OM=Cater t!e cancellation and termination o t!elease 'as in accordance 'it! t!e stipulation ot!e parties in t!e said a-reement and t!e la'applicable t!ereto and t!at t!e consequent

oreiture o >%s cas! deposit in a&or o OM=C'as clearl% a-reed upon b% t!em in t!e leasea-reement) !e trial court urt!er concludedt!at >% 'as not entitled to t!e 'rit opreliminar% in8unction issued in !is a&or atert!e commencement o t!e action and t!at t!ein8unction bond /led b% >% is liable or

'!ate&er dama-es OM=C ma% !a&e sufered b%reason o t!e in8unction)

Gence t!is appeal)

Issue

% andCBI>CO S contrar% to la' morals -oodcustoms public order or public polic%) .pro&ision '!ic! calls or t!e oreiture o t!eremainin- deposit still in t!e possession o t!elessor 'it!out pre8udice to an% ot!erobli-ation still o'in- in t!e e&ent o t!etermination or cancellation o t!e a-reementb% reason o t!e lessees &iolation o an% o t!eterms and conditions o t!e a-reement is apenal clause t!at ma% be &alidl% entered into)

. penal clause is an accessor% obli-ation '!ic!t!e parties attac! to a principal obli-ation ort!e purpose o insurin- t!e perormancet!ereo b% imposin- on t!e debtor a specialpresentation -enerall% consistin- in t!epa%ment o a sum o mone%6 in case t!eobli-ation is not ul/lled or is irre-ularl% orinadequatel% ul/lled) .s a -eneral rule inobli-ations 'it! a penal clause t!e penalt%s!all substitute t!e indemnit% or dama-es andt!e pa%ment o interests in case o nonKcompliance) !is is speci/call% pro&ided or in.rticle 322: par) 3 Ne' Ci&il Code) In suc!

case proo o actual dama-es sufered b% t!ecreditor is not necessar% in order t!at t!epenalt% ma% be demanded .rticle 322A Ne'Ci&il Code6) Go'e&er t!ere are e9ceptions tot!e rule t!at t!e penalt% s!all substitute t!eindemnit% or dama-es and t!e pa%ment ointerests in case o nonKcompliance 'it! t!e

principal obli-ation) !e% are /rst '!en t!ereis a stipulation to t!e contrar%; second '!ent!e obli-or is sued or reusal to pa% t!e a-reedpenalt%; and t!ird '!en t!e obli-or is -uilt% oraud .rticle 322: par) 3 Ne' Ci&il Code6) It ise&ident t!at in all said cases t!e purpose ot!e penalt% is to punis! t!e obli-or) !ereoret!e obli-ee can reco&er rom t!e obli-or notonl% t!e penalt% but also t!e dama-esresultin- rom t!e nonKul/llment or deecti&eperormance o t!e principal obli-ation)

In t!e case at bar inasmuc! as t!e oreitureclause pro&ides t!at t!e deposit s!all be

deemed oreited 'it!out pre8udice to an%ot!er obli-ation still o'in- b% t!e lessee to t!elessor t!e penalt% cannot substitute or t!eP300000)00 supposed dama-e resultin- romt!e issuance o t!e in8unction a-ainst t!eP240000)00 remainin- cas! deposit) !issupposed dama-e sufered b% OM=C 'as t!ealle-ed P30000)00 a mont! increase in rentalrom P50000)00 to P:0000006 '!ic! OM=Cailed to reali$e or ten mont!s rom ebruar%to No&ember 34A0 in t!e total sum oP300000)00) !is opportunit% cost '!ic! 'asdul% pro&en beore t!e trial court 'as correctl%made c!ar-eable b% t!e said court a-ainst t!ein8unction bond posted b% CBI>CO) !e

underta1in- assumed b% CBI>CO under sub8ectin8unction reers to "all such damages as such party may sustain by reason of the injunction i t!e Court s!ould /nall% decide t!at t!e Plaintif 'as'ere not entitled t!ereto)" )ollo p) 3036

!us t!e respondent Court correctl% sustainedt!e trial court in !oldin- t!at t!e bond s!alland ma% ans'er onl% or dama-es '!ic! OM=Cma% sufer as a result o t!e in8unction) !earrears in rental t!e unmeritted amounts ot!e amusement ta9 delinquenc% t!e amount o P300000)00 P30000)00 portions o eac!mont!l% rental '!ic! 'ere not deducted rom

3 ) P a - e


14/50

OBLICON2

plaintifs cas! deposit rom ebruar% toNo&ember 34A0 ater t!e oreiture o saidcas! deposit on ebruar% 33 34A06 andattorne%s ees '!ic! 'ere all c!ar-ed a-ainst>% 'ere correctl% considered b% t!e respondentCourt as dama-es '!ic! OM=C sustained notas a result o t!e in8unction)

OC.MIO .) \.L.LO &s) .L,=O () L7V

D),) No) LK2@@A2 (ul% 3 34@0

acts

On No&ember 3@ 3454 plaintifKappelleeOcta&io .) \alalo !ereinater reerred to asappellee6 a licensed ci&il en-ineer doin-

business under t!e /rm name o O) .) \alaloand .ssociates entered into an a-reement'it! deendantKappellant .lredo ( ) Lu$!ereinater reerred to as appellant 6 alicensed arc!itect doin- business under /rmname o .) () Lu$ and .ssociates '!ereb% t!eormer 'as to render en-ineerin- desi-nser&ices to t!e latter or ees as stipulated int!e a-reement) !e ser&ices included desi-ncomputation and s1etc!es contract dra'in-and tec!nical speci/cations o all en-ineerin-p!ases o t!e pro8ect desi-ned b% O) .) \alaloand .ssociates bill o quantities and costestimate and consultation and ad&ice durin-construction relati&e to t!e 'or1) !e eesa-reed upon 'ere percenta-es o t!earc!itects ee structural en-ineerin- 32K]X;electrical en-ineerin- 2K]X) !e a-reement'as subsequentl% supplemented b% a"clari/cation to letterKproposal" '!ic!pro&ided t!at "t!e sc!edule o en-ineerin-ees in t!is a-reement does not co&er t!eollo'in- ))) ) oundation soil e9plorationtestin- and e&aluation; =) Pro8ects t!at areprincipall% en-ineerin- 'or1s suc! as industrialplants )))" and "O) .) \alalo and .ssociatesreser&e t!e ri-!t to increase ees on pro8ects'!ic! cost less t!an P300000 ))))" Pursuant

to said a-reement appellee rendereden-ineerin- ser&ices to appellant in t!eollo'in- pro8ects

a6 ilK.merican LieInsurance Buildin- at Le-aspi

Cit%;

b6 ilK.merican LieInsurance Buildin- at IloiloCit%;

c6 Deneral *illin-Corporation lour *ill atOpon Cebu;

d6 *en$i Buildin- at .%alaBl&d) *a1ati ,i$al;

e6 International ,ice,esearc! Institute ,esearc!center Los Baños La-una;

6 .urelias Buildin- at*abini =rmita *anila;

-6 ar =ast Ban1s OHce atilK.merican Lie InsuranceBuildin- at Isaac Peral=rmita *anila;

!6 .rt!ur Joun-s residenceat orbes Par1 *a1ati ,i$al;

i6 L + > Buildin- at e'e%Bl&d) *anila; and

86 >tan&ac ,e/ner% >er&iceBuildin- at Lima% Bataan)

.ppellee sent to appellant a statement oaccount to '!ic! 'as attac!ed an itemi$edstatement o deendantKappellants accountaccordin- to '!ic! t!e total en-ineerin- ee

as1ed b% appellee or ser&ices renderedamounted to P33:5:5)00 rom '!ic! sum 'asto be deducted t!e pre&ious pa%ments made int!e amount o P5@000)00 t!us lea&in- abalance due in t!e amount o P545:5)00)

On *a% 3A 34:2 appellant sent appellee aresume o ees due to t!e latter) >aid eesaccordin- to appellant) amounted toP30A:3)0A instead o t!e amount claimed b%t!e appellee) On (une 3? 34:2 appellant sentappellee a c!ec1 or said amount '!ic!appellee reused to accept as ull pa%ment ot!e balance o t!e ees due !im)

On .u-ust 30 34:2 appellee /led a complainta-ainst appellant)

In !is ans'er appellant admitted t!at appelleerendered en-ineerin- ser&ices as alle-ed in

t!e /rst cause o action but a&erred t!at someo appellees ser&ices 'ere not in accordance'it! t!e a-reement and appellees claims 'erenot 8usti/ed b% t!e ser&ices actuall% renderedand t!at t!e a--re-ate amount actuall% due toappellee 'as onl% PA0:)24 o '!ic!P:4?@5)23 !ad alread% been paid t!uslea&in- a balance o onl% P30A:3)0A) .ppellantdenied liabilit% or an% dama-e claimed b%appellee to !a&e sufered as alle-ed in t!esecond t!ird and ourt! causes o action).ppellant also set up aHrmati&e and specialdeenses alle-in- t!at appellee !ad no causeo action t!at appellee 'as in estoppelbecause o certain acts representations

admissions andor silence '!ic! led appellantto belie&e certain acts to e9ist and to act uponsaid acts t!at appellees claim re-ardin- t!e*en$i pro8ect 'as premature becauseappellant !ad not %et been paid or saidpro8ect and t!at appellees ser&ices 'ere notcomplete or 'ere perormed in &iolation o t!ea-reement andor ot!er'ise unsatisactor%).ppellant also set up a counterclaim or actualand moral dama-es or suc! amount as t!ecourt ma% deem air to assess and orattorne%s ees o P30000)00)

3? ) P a - e


15/50

OBLICON2

Inasmuc! as t!e pleadin-s s!o'ed t!at t!eappellees ri-!t to certain ees or ser&icesrendered 'as not denied t!e onl% questionbein- t!e assessment o t!e proper ees andt!e balance due to appellee ater deductin- t!eadmitted pa%ments made b% appellant t!etrial court upon a-reement o t!e parties

aut!ori$ed t!e case to be !eard beore aCommissioner) !e Commissioner rendered areport '!ic! in resume states t!at t!eamount due to appellee 'as ^2A000)00 7)>)6as !is ee in t!e International ,esearc!Institute Pro8ect '!ic! 'as t'ent% percent20X6 o t!e ^3?0000)00 t!at 'as paid toappellant and P5354)43 or t!e ot!erpro8ects less t!e sum o P:4?@5)?: '!ic! 'asalread% paid b% t!e appellant) !eCommissioner also recommended t!e pa%mentto appellee o t!e sum o P5000)00 asattorne%s ees)

.t t!e !earin- on t!e ,eport o t!eCommissioner 8ud-ment is rendered in a&or o plaintif) Gence t!is appeal)

Issue

ection 32 o ,ule o t!e ,ules o Court on '!ic! t!e ourt!assi-nment o error is presumabl% basedpro&ides t!at '!en t!e parties stipulate t!at acommissioners /ndin-s o act s!all be /nalonl% questions o la' arisin- rom t!e actsmentioned in t!e report s!all t!ereater beconsidered) Consequentl% an a-reement b%t!e parties to abide b% t!e /ndin-s o act ot!e commissioner is equi&alent to an

a-reement o acts bindin- upon t!em '!ic!t!e court cannot disre-ard) !e questiont!ereore is '!et!er or not t!e estimate o t!ereasonable ees stated in t!e report o t!eCommissioner is a /ndin- o act)

!e report o t!e Commissioner on t!is matterreads as ollo's

.s re-ards attorne%s ees under t!epro&isions o .rt 220A par 336 t!e same ma%be a'arded and considerin- t!e number o!earin-s !eld in t!is case t!e nature o t!ecase ta1in- into account t!e tec!nical nature

o t!e case and t!e &oluminous e9!ibits oferedin e&idence6 as 'ell as t!e 'a% t!e case 'as!andled b% counsel it is belie&ed subject tothe Court*s appraisal of the matter, t!at t!esum o P5000)00 is 8ust and reasonable asattorne%s ees)" (

It is t!us seen t!at t!e estimate made b% t!eCommissioner 'as an e9pression o belie oran opinion) .n opinion is diferent rom a fact )

!e -enerall% reco-ni$ed distinction bet'een astatement o "act" and an e9pression o"opinion" is t!at '!ate&er is susceptible o

e9act 1no'led-e is a matter o act '!ile t!atnot susceptible o e9act 1no'led-e is -enerall%re-arded as an e9pression o opinion) It !asalso been said t!at t!e 'ord "act" asemplo%ed in t!e le-al sense includes "t!oseconclusions reac!ed b% t!e trior rom s!itin-testimon% 'ei-!in- e&idence and passin- on

t!e credit o t!e 'itnesses and it does notdenote t!ose inerences dra'n b% t!e trialcourt rom t!e acts ascertained and settled b%it) $ In t!e case at bar t!e estimate made b%t!e Commissioner o t!e attorne%s ees 'as aninerence rom t!e acts ascertained b% !imand is t!ereore not a /ndin- o acts) !etrial court 'as consequentl% not bound b%t!at estimate in spite o t!e maniestation ot!e parties t!at t!e% !ad no ob8ection to t!e/ndin-s o acts o t!e Commissioner in !isreport) *oreo&er under >ection 33 o ,ule o t!e ,ules o Court t!e court ma% adoptmodi% or re8ect t!e report o t!ecommissioner in '!ole or in part and !ence it

'as 'it!in t!e trial courts aut!orit% to increaset!e recommended attorne%s ees o P5000)00to PA000)00) It is a settled rule t!at t!eamount o attorne%s ees is addressed to t!esound discretion o t!e court) $ 4

It is true as appellant contends t!at t!e trialcourt did not state in t!e decision t!e reasonsor increasin- t!e attorne%s ees) !e trialcourt !o'e&er !ad adopted t!e report o t!eCommissioner and in adoptin- t!e report t!etrial court is deemed to !a&e adopted t!ereasons -i&en b% t!e Commissioner ina'ardin- attorne%s ees as stated in t!e

abo&eKquoted portion o t!e report) Based ont!e reasons stated in t!e report t!e trial courtmust !a&e considered t!at t!e reasonableattorne%s ees s!ould be PA000)00)Considerin- t!at t!e 8ud-ment a-ainst t!eappellant 'ould amount to more t!anP300000)00


16/50

OBLICON2

St. Pau# F1* & Ma1n* Insu1anc* C!. vs.Mac!n+1a6& C!., Inc.R. N!. L ''3Ma1ch /, 4'3

t) Paul ireand *arine Insurance Compan%`>> ai Pin- arri&ed at t!e Port o *anila anddisc!ar-ed t!es!ipment into t!e custod% o*anila Port >er&ice` !e s!ipment 'as disc!ar-ed complete andin -ood order 'it! t!e e9ception o 3 drum andse&eral cartons '!ic! 'ere in badordercondition`!e consi-nee /led a claim in t!e amount oP3304)?@representin- t!e C)I) &alue o t!edama-ed drum andcartons o medine 'it! t!ecarrier and *anila Port >er&ice`Bot! t!e carrier and *anila Port >er&icereused to pa% suc! claim` !e consi-nee t!en /led its claim 'it! t!einsurer) On t!e basis o suc! claimt!e insurance compan% paid to t!e consi-neet!einsured &alue o t!e lost and dama-ed-oods includin-ot!er e9penses in connectiont!ere'it! in t!e total amounto ^33?)?:

`.s subro-ee o t!e ri-!ts o t!e s!ipperandor cosi-nee t!einsurer instituted 'it! t!eCI an action a-ainst t!e deendants ort!ereco&er% o t!e amount o ^33?)?:`Contention o deendant *anila Port >er&ice

!e '!ole car-o 'as deli&ered to t!e

consi-nee in t!esame condition in '!ic! it 'asrecei&ed rom t!e carr%in-&essel

!eir liabilit% is limited to t!e in&oice&alue o t!e -oodsbut in no casemore t!an P500 per pac1a-e pursuanttot!eir *ana-ement Contract

`Contention o deendants *acondra%+ Co)Inc Barber >teams!ipLines Inc) and

'ere lost or dama-ed

G=L3)Jes) !e liabilities o t!e deendants 'it!respect to t!elost or dama-ed s!ipments aree9pressl% limited tot!e C)I)) &alue o t!e-oodsas per contract o sea carria-e embodiedin t!e bill o ladin- It reads

E!e limitation o liabilit% 999 s!all inure notonl% tot!e bene/t o t!e carrier 999 but also tot!e bene/to an% independent contractorperormin- ser&ices999F

!e s!ipper and consi-nee are t!ereore

bound b% suc!stipulations`It is or t!is reason t!at t!e consi-nee /led itsclaima-ainst t!e deendant on t!e basis o t!eC)I)) &alue o t!e lost or dama-ed -oods in t!ea--re-ate amount o P3304):@

PAPA -S AU -ALENCIA

acts *%ron Papa actin- as attorne%KinKact o.n-ela Butte alle-edl% sold a parcel o land inLa Loma #ue$on Cit% to eli9 Penarro%o)Go'e&er prior to t!e alle-ed sale t!e land'as mort-a-ed b% Butte to .ssociated Ban1in-Corporation alon- 'it! ot!er properties andater t!e alle-ed sale but prior to t!epropert%Qs release b% deli&er% Butte died) !eBan1 reused to release t!e propert% despitePenarro%oQs unless and until t!e ot!ermort-a-ed properties b% Butte !a&e beenredeemed and because o t!is Penarro%osettled to !a&in- t!e title o t!e propert%annotated)

It 'as later disco&ered t!at t!e mort-a-eri-!ts o t!e Ban1 'ere transerred to one

omas Parpana administrator o t!e estate o,amon Papa (r) and !is since t!en been

3: ) P a - e


17/50

OBLICON2

collectin- rents) espite repeated demands oPenarro%o and Malencia Papa reused to deli&ert!e propert% '!ic! led to a suit or speci/cperormance) !e trial court ruled in a&or oPenarro%o and Malencia)

On appeal to t!e C. and ultimatel% in relation

to ne-otiable instruments Papa a&erred t!att!e sale o t!e propert% 'as not consummatedsince t!e PCIB c!ec1 issued b% Penarro%o orpa%ment 'ort! ?0000 pesos 'as not encas!edb% !im) Go'e&er t!e C. sa' t!e contrar% andt!at Papa in act encas!ed t!e c!ec1 b% meanso a receipt)

inall% on appeal to t!e >C Papa cited t!ataccordin- to .rt 32?4 o t!e Ci&il Codepa%ment o c!ec1s onl% produce efect oncet!e% !a&e been encas!ed and !e insists t!at!e ne&er encas!ed t!e c!ec1) Ge urt!eralle-ed t!at i c!ec1 'as encas!ed it s!ould!a&e been stamped as suc! or at least a

micro/lm cop%) It must be noted t!at t!e c!ec1'as in possession o Papa or ten 306 %earsrom t!e time pa%ment 'as made to !im)

Issue

.ter more t!an ten 306 %ears rom t!epa%ment in part b% cas! and in part b% c!ec1t!e presumption is t!at t!e c!ec1 !ad beenencas!ed)

PHILIPPINES AIRLINES -S CA

G= .C>

.melia an commenced a complaint ordama-es beore t!e Court o irst Instancea-ainst P!ilippine .irlines Inc) P.L6) !e Courtrendered a 8ud-ment in a&or o t!e ormer anda-ainst t!e latter)

P.L /led its appeal 'it! t!e Court o .ppealsC.6 and t!e appellate court aHrmed t!e

8ud-ment o t!e lo'er court 'it! t!emodi/cation t!at P.L is condemned to pa% t!elatter t!e sum o P25 000)00 as dama-es andP5 000)00 as attorne%Qs ee)

(ud-ment became /nal and e9ecutor% and 'ascorrespondin-l% entered in t!e case '!ic! 'asremanded to t!e trial court or e9ecution) !etrial court upon t!e motion o .melia anissued an order o e9ecution 'it! t!ecorrespondin- 'rit in a&or o t!e respondent)>aid 'rit 'as dul% reerred to eput% >!erif,e%es or enorcement)

our mont!s later .melia an mo&ed or t!eissuance o an alias 'rit o e9ecution statin-t!at t!e 8ud-ment rendered b% t!e lo'er courtand aHrmed 'it! modi/cation b% t!e C.remained unsatis/ed) P.L opposed t!e motionstatin- t!at it !ad alread% ull% paid itsobli-ation to plaintif t!rou-! t!e issuance oc!ec1s pa%able to t!e deput% s!erif '!o laterdid not appear 'it! !is return and insteadabsconded)

!e C. denied t!e issuance o t!e alias 'rit orbein- premature) .ter t'o mont!s t!e C.-ranted !er an alias 'rit o e9ecution or t!eull satisaction o t!e 8ud-ment rendered'!en s!e /led anot!er motion) eput% >!erifdel ,osario is appointed special s!erif orenorcement t!ereo)

P.L /led an ur-ent motion to quas! t!e alias'rit o e9ecution statin- t!at no return o t!e'rit !ad as %et been made b% eput% >!erif,e%es and t!at 8ud-ment debt !ad alread%been ull% satis/ed b% t!e ormer as e&idencedb% t!e cas! &ouc!ers si-ned and recei&ed b%t!e e9ecutin- s!erif)

eput% >!erif del ,osario ser&ed a notice o-arnis!ment on t!e depositor% ban1 o P.Lt!rou-! its mana-er and -arnis!ed t!e latterQsdeposit) Gence P.L brou-!t t!e case to t!e>upreme Court and /led a petition orcertiorari)

G= I>>7=>


18/50

OBLICON2

) Ne-ati&e) .rticle 32?4 o t!e Ci&il Codepro&ides

E!e pa%ment o debts in mone% s!all be madein t!e currenc% stipulated and i it is notpossible to deli&er suc! currenc% t!en in t!e

currenc% '!ic! is le-al tender in t!eP!ilippinesF)

7nless aut!ori$ed to do so b% la' or b%consent o t!e obli-ee a public oHcer !as noaut!orit% to accept an%t!in- ot!er t!an mone%in pa%ment o an obli-ation under a 8ud-mentbein- e9ecuted) >trictl% spea1in- t!eacceptance b% t!e s!erif o t!e petitionerQsc!ec1s does not per se operate as a disc!ar-eo t!e 8ud-ment o debt)

. c!ec1 '!et!er mana-erQs c!ec1 or ordinar%c!ec1 is not le-al tender and an ofer o ac!ec1 in pa%ment o a debt is not a &alid

tender or pa%ment and ma% be reused receiptb% t!e obli-e or creditor) Gence t!e obli-ationis not e9tin-uis!ed)

G= Pa%ment in cas! is lo-ical but it'as not proper)

Pa%ment in cas! to t!e implementin- oHcerma% be deemed absolute pa%ment o 8ud-mentdebt but t!e Court !as ne&er in t!e least bitsu--ested t!at 8ud-ment debtors s!ould settlet!eir obli-ations b% turnin- o&er !u-e amountso cas! or le-al tender to t!e e9ecutin-oHcers) Pa%ment in cas! 'ould result indama-e or endless liti-ations eac! time as!erif 'it! !u-e amounts o cas! in !is !andsdecides to abscond)

.s a protecti&e measure t!e courts encoura-et!e practice o pa%ment o c!ec1 pro&idedadequate controls are instituted to pre&ent'ron-ul pa%ment and ille-al 'it!dra'al ordisbursement o unds)

Go'e&er in t!e case at bar it is out o t!eordinar% t!at c!ec1s intended or a particularpa%ee are made out in t!e name o anot!er)

!e issuance o t!e c!ec1s in t!e name o t!e

s!erif clearl% made possible t!emisappropriation o t!e unds t!at 'ere'it!dra'n)

!e Court o .ppeals e9plained

E\no'in- as it does t!at t!e intended pa%ment

'as or t!e respondent .melia an t!epetitioner corporation utili$in- t!e ser&ices oits personnel '!o are or s!ould be1no'led-eable about t!e accepted procedureand resultin- consequences o t!e c!ec1sdra'n ne&ert!eless in t!is instance 'it!outprudence departed rom '!at is -enerall%obser&ed and done and placed as pa%ee in t!ec!ec1s t!e name o t!e errant >!erif and nott!e name o t!e ri-!tul pa%ee) Petitionert!ereb% created a situation '!ic! permittedt!e said >!erif to personall% encas! saidc!ec1s and misappropriate t!e proceedst!ereo to !is e9clusi&e bene/t) or t!epre8udice t!at resulted t!e petitioner !imsel

must bear t!e aultF

Ga&in- ailed to emplo% t!e proper sae-uardsto protect itsel t!e 8ud-ment debtor '!oseact made possible t!e loss !ad but itsel toblame)

PACULDO -S. REALADO ?5 >C,. 3? .C>

On ecember 2@ 3440 petitioner Paculdo andrespondent ,e-alado entered into a contractoease o&er a parcel o land 'it! a 'et mar1etbuildin-) !e contract 'as or t'ent% /&e 256%earsbe-innin- on (anuar% 3 3443 and endin-on ecember 2@ 2035) or t!e /rst /&e 56%ears o t!econtract be-innin- ecember 2@3440 Paculdo 'ould pa% a mont!l% rental oP?50000 pa%able'it!in t!e /rst /&e 56 da%so eac! mont! 'it! a 2X penalt% ore&er% mont! o late pa%ment) .side rom t!e abo&e lease petitioner leasedele&en 336 ot!er propert% rom t!erespondentten 306 o '!ic! 'ere located

'it!in t!e air&ie' compound '!ile t!eele&ent! 'as locatedalon- #uirino Gi-!'a%#ue$on Cit%) Petitioner also purc!ased romrespondent ei-!t A6 units o!ea&% equipmentand &e!icles in t!e cumulati&e amount o P!p3 020000) !e respondent sent t'o demandletters to petitioner demandin- pa%ment o t!e

bac1 rentalson account o petitionerQs ailureto pa% P:3 A45)55 in rental or t!e mont! o*a% 3442 andt!e mont!l% rental o P?50 000)00 or t!emont!s o (une and (ul% 3442 and i nopa%ment 'asmade 'it!in /teen 356 da%srom t!e receipt o t!e letter it 'ould causet!e cancellation o t!elease contract) a&in-s Ban1 as a

securit% or a loan) On .u-ust 32 3442 andt!e subsequent dates t!ereater respondentreused to acceptpetitionerQs dail% rentalpa%ments) >ubsequentl% petitioner /led an action orin8unction and dama-es see1in- to en8oinrespondentsrom disturbin- !is possession ot!e propert% sub8ect o t!e lease contract) Ont!e same da%respondent also /led a complaintor e8ectment a-ainst petitioner) I>>7=


19/50

OBLICON2

!is account under t!e sub8ect lot as 'ell as tot!e real estate ta9es on t!e #uirino lot)Petitionerinterposed no ob8ection as e&idencedb% !is si-nature si-ni%in- !is conormit%t!ereto)*ean'!ile in an earlier letter dated

(ul% 35 3443 respondent inormed petitionert!at t!e pa%ment'as to be applied not onl% to

petitionerQs accounts under t!e sub8ect landand t!e #uirino lot but also to!ea&% equipmentbou-!t b% t!e latter rom respondent) 7nli1e int!e No&ember letter t!e (ul% letter didnotcontain t!e si-nature o petitioner)Petitionersubmits t!at !is silence is not consent but isin act a re8ection),ationale.s pro&ided in.rticle 3252 o t!e Ci&il Code t!e ri-!t tospeci% '!ic! amon- !is &arious obli-ationstot!e same creditor is to be satis/ed /rst rest'it! t!e debtor)In t!e case at bar at t!e timepetitioner made t!e pa%ment !e made it clearto respondent t!at t!e%'ere to be applied to!is rental obli-ations on t!e air&ie' 'etmar1et propert% ) !ou-! !e entered

into&arious contracts and obli-ations 'it!respondent all t!e pa%ments made aboutP33000000)00 'ereto be applied to rentaland securit% deposit on t!e air&ie' 'etmar1et propert%) Go'e&er respondentapplied abi- portion o t!e amount paid b% petitioner tot!e satisaction o an obli-ation '!ic! 'asnot%et due and demandableK t!e pa%ment o t!e ei-!t !ea&% equipment)7nder t!e la' i t!e debtor did not declare at t!e time !e madet!e pa%ment to '!ic! o !is debts 'it!t!ecreditor t!e pa%ment is to be applied t!e la'pro&ided t!e -uideline; i)e) no pa%ment is tobe appliedto a debt '!ic! is not %et due andt!e pa%ment !as to be applied /rst to t!e debt

'!ic! is most onerousto t!e debtor)!e leaseo&er t!e air&ie' 'et mar1et is t!e mostonerous to t!e petitioner in t!e case at bar)

D=P vs CA 1 N!. 44($% 4./.( Dav+*,

JR., J,:

L6+a P. Cuale o t!e Lease!old ,i-!ts in a&or o Cubao&er t!e same /s!pond in question;

In t!e ne-otiation or repurc!ase Cubaaddressed t'o letters to t!e *ana-er BPa-upan Cit%) BP t!ereater accepted t!eofer to repurc!ase in a letter addressed toCuba;

.ter t!e eed o Conditional >ale 'ase9ecuted in a&or o Cuba a ne' is!pondLease .-reement 'as issued b% t!e *inistr% o.-riculture and ood in a&or o Cuba onl%e9cludin- !er !usband;

Cuba ailed to pa% t!e amorti$ations stipulatedin t!e eed o Conditional >ale; .ter Cubaailed to pa% t!e amorti$ation as stated in eedo Conditional >ale s!e entered 'it! t!e BP atemporar% arran-ement '!ereb% inconsideration or t!e deerment o t!e Notarial

,escission o eed o Conditional >ale Cubapromised to ma1e certain pa%ments;

BP t!ereater sent a Notice o ,escission t!ruNotarial .ct and '!ic! 'as recei&ed b% Cuba;.ter t!e Notice o ,escission BP too1

possession o t!e Lease!old ,i-!ts o t!e/s!pond in question;

!at ater BP too1 possession o t!eLease!old ,i-!ts o&er t!e /s!pond in questiont!rou-! t!e >7N.J P7NCG ad&ertised publicbiddin- BP t!ereater e9ecuted a eed oConditional >ale in a&or o deendantA;18na Ca8*1a# t!rou-! a public sale;

!ereater Caperal 'as a'arded is!pondLease .-reement)

!e principal issue presented 'as '!et!er t!e

act o BP in appropriatin- to itsel C7B.slease!old ri-!ts o&er t!e /s!pond in question'it!out oreclosure proceedin-s 'as contrar%to .rticle 20AA o t!e Ci&il Code and t!ereorein&alid) C7B. insisted on an aHrmati&eresolution) BP stressed t!at it merel%e9ercised its contractual ri-!t under t!e.ssi-nments o Lease!old ,i-!ts '!ic! 'asnot a contract o mort-a-e) eendant Caperalsided 'it! BP)

I>>7=


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OBLICON2

In &ie' !o'e&er o BPs act o appropriatin-C7B.s lease!old ri-!ts '!ic! 'as contrar% tola' and public polic% as 'ell as its alserepresentation to t!e t!en *inistr% o.-riculture and Natural ,esources t!at it !ad"oreclosed t!e mort-a-e" an a'ard o moral

dama-es in t!e amount o P50000 is in orderconormabl% 'it! .rticle 2234306 in relationto .rticle 23 o t!e Ci&il Code) =9emplar% orcorrecti&e dama-es in t!e amount o P25000s!ould li1e'ise be a'arded b% 'a% o e9ampleor correction or t!e public -ood) !ere bein-an a'ard o e9emplar% dama-es attorne%sees are also reco&erable)

F#nv*st vs Ph#88n* Ac*t6#*n* C!. 1 L9

/%%2 D* Cast1! J

Facts: On October 0 34@3 t!e P!ilippine.cet%lene Co) Inc) purc!ased rom one.le9ander Lim as e&idenced b% a eed o >alea motor &e!icle described as C!e&orlet 34:4model 'it! >erial No) 3::44V0:52 orP552?@)A0 'it! a do'n pa%ment oP20000)00 and t!e balance o P52?@)A0pa%able under t!e terms and conditions o t!epromissor% note at a mont!l% installment oP30:)@0 or t!irt%Kour ?6 mont!s due andpa%able on t!e /rst da% o eac! mont! startin-ecember 34@3 t!rou-! and inclusi&e>eptember 3 34@? 'it! 32 X interest perannum on eac! unpaid installment andattorne%s ees in t!e amount equi&alent to25X o t!e total o t!e outstandin- unpaidamount) .s securit% or t!e pa%ment o saidpromissor% note P.C e9ecuted a c!attel

mort-a-e o&er t!e same motor &e!icle in a&oro said .le9ander Lim) Lim assi-ned to ilin&estinance Corp !is interests in t!e PN and C!attel*ort-a-e) .ter deaulin- in 4 installmentsilin&est sent a demand letter to P.C to pa%and return t!e &e!icle) P.C returned t!e car

but ilin&est cannot sell t!e car due to unpaidta9es t!eron incurred b% P.C) ilin&est oferedto deli&er bac1 t!e car to P.C t!e latterreused) ilin&est t!us /led a complaint orcollection o mone% 'it! dama-es in CI*anila) P.C .&erred t!at ilin&est !as no causeo action &s "P.C becuase t!e car 'as returnedater t!e demand letter t!e obli-ation 'ast!us e9tin-uis!ed)

Issu*:


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OBLICON2

. more solid basis o t!e true intention o t!eparties is urnis!ed b% t!e document e9ecutedb% appellant captioned "Moluntar% >urrender'it! >pecial Po'er o .ttorne% o >ell" dated*arc! 32 34@ attac!ed as .nne9 "C" o t!eappellants ans'er to t!e complaint)

Gad appellee intended to completel% releaseappellant o its mort-a-e obli-ation t!ere'ould be no necessit% o e9ecutin- t!edocument captioned "Moluntar% >urrender 'it!>pecial Po'er o .ttorne% o >ell)" No'!ere int!e said document can o on t!e ne9t 'or1in- da%*onda% (anuar% 0 34@A t!e pri&aterespondent deposited t!e amount oP0000)00 'it! t!e cas!ier o t!e OHce o t!e

Cler1 o t!e Court o irst Instance o ,i$alPasa% Cit% Branc! to complete t!e pa%ment ot!e purc!ase price o P250000)00)

On (anuar% 2A 34@A t!e petitioners /led amotion or t!e issuance o a 'rit o e9ecutionclaimin- t!at t!e pri&ate respondent !ad ailedto abide b% t!e terms o t!e compromisea-reement) !e pri&ate respondent opposedsa%in- t!at s!e !ad complied 'it! t!e termsand conditions o t!e compromise a-reementand as1ed t!e court to direct t!e petitioners tocompl% 'it! t!e courts decision and e9ecute

t!e necessar% documents to efect t!e transero o'ners!ip o t!e t'o parcels o land inquestion to !er)

.ctin- upon t!e motions t!e respondent 8ud-eissued an order on *arc! 2@ 34@A den%in-t!e petitioners motion or e9ecution andinstead directed t!e petitioners to immediatel%e9ecute t!e necessar% documents transerrin-to pri&ate respondent t!e title to t!eproperties) Ge also ordered t!e Cler1 o Court

23 ) P a - e


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OBLICON2

to release to t!e petitioners t!e amount oP250000)00 '!ic! !ad been deposited b% t!epri&ate respondent upon proper receiptt!ereor)

ISSUE:

,espondent ne&ert!eless insists t!at t!e Court!ad no aut!orit% to aut!ori$e its 'it!dra'alsince it "!as not ordered inter&enor to ma1e"t!e deposit) !is contention i-nores t!e actt!at t!e deposit 'as made b% petitioner as a

22 ) P a - e


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OBLICON2

consequence o t!e admission b% t!e Court oits "Complaint In Inter&ention") It must benoted t!at t!e aoresaid deposit 'as made'it! and oHciall% receipted b% t!e Cler1 oCourt) !e deposit 'as made pursuant to.rticle 325A o t!e ne' Ci&il Code '!ic! states

t!at "Consi-nation s!all be made b%depositin- t!e t!in-s due at t!e disposal o

8udicial aut!orit% beore '!om t!e tender opa%ment s!all be pro&ed in a proper case )))")It 'as t!ereore mone% recei&ed b% t!e Cler1 o Court pursuant to >ection : o t!e (udiciar% .ct),ep) .ct 24: as .mended6) rom t!e momentt!e deposit 'as made b% petitioner "t!emone% remained under t!e control and

8urisdiction o t!e court and t!e ormer couldnot reco&er it 'it!out an e9press order orestitution) In t!e li-!t o t!e aorecitedstatutor% pro&isions and 8urisprudence t!e >C

/nds no 8usti/cation or ,espondentsintransi-ent posture)

LUISA F. MCLAUHLIN -. C.A. & RAMON

FLORES .R. N!. L9/'// Oct!) It is si-ni/cant to note t!at onNo&ember 3@ 34A0 or 8ust 3@ da%s aterOctober 334A0 t!e deadline setb% *cLau-!lin lores tendered t!e certi/edmana-ers c!ec1) Considerin- t!at lores !adalread% paid P303550)00 under t!e contractto sell e9cludin- t!e mont!l% rentals paidcertainl% it 'ould be t!e !ei-!t o inequit% to!a&e t!is amount oreited in a&or *cLau-!lin)7nder t!e questioned orders *cLau-!lin 'ould-et bac1 t!e propert% and still 1eepP303550)00) *oreo&er section ? o ,epublic.ct No) :552 *aceda La'6 pro&ides as ollo's

EIn case '!ere less t!an t'o %earso installments 'ere paid t!e seller s!all -i&et!e bu%er a -race period o not less t!an si9t%da%s rom t!e date t!e installment becamedue) I t!e bu%er ails to pa% t!e installmentsdue at t!e e9piration o t!e -race period t!eseller ma% cancel t!e contract ater t!irt% da%srom receipt b% t!e bu%er o t!e notice o t!ecancellation or t!e demand or rescission o t!econtract b% a notarial act)

F >ection @ o said la' pro&ides as ollo's E.n%stipulation in an% contract !ereater entered

into contrar% to t!e pro&isions o >ections ?5 and : s!all be null and &oidE)

2 ) P a - e


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OBLICON2

Considerin- petitioners motion or e9ecution/led on No&ember @ 34A0 as a notice ocancellation petitioner could cancel t!econtract o conditional sale ater t!irt% da%srom receipt b% pri&ate respondent o saidmotion) Th* t*n+*1 0a+* oco leased !er commercial buildin- and lotsituated at *analili >treet Cebu Cit% torancisco or a mont!l% rental o P A00)00 or aperiod o 30 %ears rene'able or anot!er 30%ears at t!e option o t!e lessee) It can readil%be discerned rom =9!ibit E.F rom >OCO6 t!atpara-rap!s 30 and 33 appear to !a&e beencancelled '!ile in =9!ibit E2F rom,.NCI>CO6 onl% para-rap! 30 !as beencancelled) Claimin- t!at para-rap! 33 o t!eContract o Lease 'as in act not part o t!econtract because it 'as cancelled >oco /led

Ci&il Case No) ,K3:2:3 in t!e Court o irstInstance o Cebu see1in- t!e annulment andorreormation o t!e Contract o Lease)

>ometime beore t!e /lin- o Ci&il Case No) ,K3:2:3 rancisco noticed t!at >oco did notan%more send !er collector or t!e pa%ment o rentals and at times t!ere 'ere pa%mentsmade but no receipts 'ere issued) !issituation prompted rancisco to 'rite >oco t!eletter dated ebruar% @ 34@5 '!ic! t!e latter

recei&ed) .ter 'ritin- t!is letter ranciscosent !is pa%ment or rentals b% c!ec1s issuedb% t!e Commercial Ban1 and rust Compan%)

!e actual bac1-round settin- o t!is caseclearl% indicates t!at soon ater >oco learned

t!at rancisco subKleased a portion o t!ebuildin- to N.CI. at a mont!l% rental o moret!an P000)00 '!ic! is de/nitel% &er% muc!!i-!er t!an '!at rancisco 'as pa%in- to >ocounder t!e Contract o Lease t!e latter elt t!ats!e 'as on t!e losin- end o t!e leasea-reement so s!e tried to loo1 or 'a%s andmeans to terminate t!e contract)

In &ie' o t!is alle-ed nonKpa%ment o rental o t!e leased premises be-innin- *a% 34@@>oco t!rou-! !er la'%er sent a letter datedNo&ember 2 34@A to rancisco ser&in- notice

to t!e latter _to &acate t!e premises leased)Q Inans'er to t!is letter rancisco t!rou-! !isla'%er inormed >oco and !er la'%er t!at allpa%ments o rental due !er 'ere in act paid b%Commercial Ban1 and rust Compan% t!rou-!t!e Cler1 o Court o t!e Cit% Court o Cebu)espite t!is e9planation >oco /led t!is instantcase o Ille-al etainer)

*C and ,C !a&e conictin- /ndin-s) !eormer ound t!at t!e consi-nation 'as &alid),C re&ersed and ordered t!e e&iction o t!erancisco)

I>>7=


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OBLICON2

or because se&eral persons claimed to beentitled to recei&e t!e amount due .rt) 33@:Ci&il Code6; 6 t!at pre&ious notice o t!econsi-nation !ad been -i&en to t!e personinterested in t!e perormance o t!e obli-ation.rt) 33@@ Ci&il Code6; ?6 t!at t!e amount due

'as placed at t!e disposal o t!e court .rt)33@A Ci&il Code6; and 56 t!at ater t!econsi-nation !ad been made t!e personinterested 'as noti/ed t!ereo .rt) 33@A Ci&ilCode6) ailure in an% o t!ese requirements isenou-! -round to render a consi-nationinefecti&e) paran-'alanaman ton- m-a to sa33@: 33@@ and 33@A6


26/50

OBLICON2

!e% 'ould t!us premise t!eir 'illin-ness todeposit said amount upon t!e condition ")))t!at t!e plaintif 'ill cancel t!e mort-a-eabo&ementioned and t!at t!e plaintif beordered to return to t!e deendants ranserCerti/cate o itle No) 242: co&erin- Lot No)

2@ o Ponte&edra and ranser Certi/cate o itle No) 242@ co&erin- Lot No) AA2 o Gini-aranCadastre Ne-ros Occidental)"

On *arc! 20 34: t!e lo'er court resol&edbot! motions in efect den%in- t!em andreiteratin- its pre&ious order as ollo's

ince t!is case 'assubmitted upon t!e /lin- o t!e bries t!ere!as been no s!o'in- as to t!e outcome o t!emain case belo' or oreclosure o mort-a-e)

!e decision t!erein i one !as been renderedsince no in8unction 'as sou-!t in or -ranted b%

t!is Court must !a&e rendered t!is appealmoot and academic considerin- t!at t!edeendants admit t!eir indebtedness to t!eplaintif but ob8ect merel% to t!eir bein-compelled to deposit t!e amount t!ereo incourt durin- t!e pendenc% o t!e oreclosurecase) Go'e&er no maniestation !a&in- beenrecei&ed on t!e matter 'e s!all proceed to t!eissues raised b% t!e parties)

!e /rst o said issue is procedural and !asbeen set up b% t!e appellee as a roadbloc1 to

t!is appeal) >!e maintains t!at t!econtro&erted order is interlocutor% since itdoes not dispose o t!e case 'it! /nalit% butlea&es somet!in- still to be done and !ence isunappealable) !e remed% it is pointed outs!ould !a&e been b% petition or certiorari) !e

point strictl% spea1in- is 'ell ta1en; but t!isCourt sees /t to disre-ard tec!nicalities andtreat t!is appeal as suc! a petition andconsider it on t!e merits limitin- t!e issuenecessaril% to '!et!er or not t!e court belo'e9ceeded its 8urisdiction or committed a -ra&eabuse o discretion in issuin- t!e ordercomplained o)

!e deendants admit t!eir indebtedness tot!e plaintif but onl% in t!e sum o P530:)00)It seems t!at t!e contro&ers% reers to t!eplaintifs additional claim or interest

attorne%s ees and costs)

!e deendants e9pressed t!eir 'illin-ness todeposit t!e said amount in court sub8ect to t!econdition t!at t!e mort-a-e t!e% !ad e9ecutedas securit% be cancelled) !e question t!en isid t!e court act 'it! aut!orit% and in t!e

8udicious e9ercise o its discretion in orderin-t!e deendants to ma1e t!e deposit but 'it!outt!e condition t!e% !ad stated


27/50

OBLICON2

dated .u-ust 3 34AA '!erein !e stated interalia t!at "'it!out necessaril% admittin- t!ecorrectness o obli-ation o plaintif todeendant t!e latter !ereb% maniests toaccept t!e said amount o P33@50 '!ic! isconsi-ned b% plaintif pro&ided t!at t!e

present complaint be dismissed outri-!t 'it!cost a-ainst plaintif)" p) 3? C. ,ollo)6 !epetitioner opposed t!e maniestationrespondent *aile /led an .ns'er 'it! >pecialeenses and Counterclaim) On .u-ust 234AA petitioner /led !is .ns'er toCounterclaim) Pri&ate respondent /led are8oinderrepl% to t!e petitioners opposition)

!ereater on >eptember 2A 34AArespondent (ud-e issued t!e /rst questionedorder readin- in part as ollo's

.ter a t!orou-! e&aluation o t!e issuesin&ol&ed in t!e maniestation and t!eopposition t!ereto t!e Court is o t!e opiniont!at t!ere 'as a &alid consi-nation anddeendant could le-all% accept t!e pa%ment b%consi-nation 'it! reser&ation to pro&edama-es and ot!er claims as !eld b% t!e>upreme Court in t!e case o >in- (uco &s)Cua%con- ?: P!il) A3)

In rulin- t!at t!ere 'as a &alid consi-nationand t!at t!e respondent creditor could acceptt!e same 'it! a reser&ation o !is dama-esand ot!er claims t!e Court o .ppeals reliedon t!e 342? case o >in- (uco &s) Cua%con- ?:P!il) A3) In t!at case t!e deendants consi-nedin court t!e amount '!ic! t!e% !ad recei&edrom t!e plaintif as t!e price o su-ar t!e saleo '!ic! did not materiali$e) !e deendants'ere -i&en t!e alternati&e o deli&erin- t!esu-ar or returnin- t!e price per stipulation int!e contract) eptember 2A 34AA t!at t!ere 'as a &alidconsi-nation b% t!e petitioner t!e latter

cannot tenabl% ar-ue t!at !e is still t!e o'nero t!e amount consi-ned and t!at !e can still'it!dra' it)

!e consi-nation !as retroacti&e efect) !epa%ment is deemed to !a&e been made at t!etime o t!e deposit o t!e mone% in court or'!en it 'as placed at t!e disposal o t!e

8udicial aut!orit% supra) In t!is case pa%mentis considered made on (ul% 2@ 34AA '!enpetitioner consi-ned and deposited 'it! t!e

2@ ) P a - e


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OBLICON2

respondent court t!e sum o P33@50) instantpetition is !ereb% I>*I>>= or lac1 o merit)

D),) No) LK233: .pril 2l 34A3

,7,.L B.N\ O C.LOOC.N INC) and (O>= O)

=>I=,IO (,) petitioners&s) G= CO7, O .PP=.L> and *.TI*. C.>,O

respondents)

.C>

*a9ima Castro accompanied b% >e&erinoMalencia 'ent to t!e ,ural Ban1 o Caloocan toappl% or a loan) Malencia arran-ed e&er%t!in-about t!e loan 'it! t!e ban1) Ge supplied tot!e latter t!e personal data required orCastros loan application) .ter t!e ban1appro&ed t!e loan or t!e amount o P000)00Castro accompanied b% t!e Malencia spousessi-ned a promissor% note correspondin- to !erloan in a&or o t!e ban1) On t!e same da% t!eMalencia spouses obtained rom t!e ban1 anequal amount o loan or P000)00) !e%si-ned anot!er promissor% note =9!ibit "2"6correspondin- to t!eir loan in a&or o t!e ban1and !ad Castro aH9ed t!ereon !er si-nature ascoKma1er)

Bot! loans 'ere secured b% a realKestatemort-a-e on Castros !ouse and lot) Later t!es!erif o *anila sent a notice to Castro sa%in-t!at !er propert% 'ould be sold at publicauction to satis% t!e obli-ation co&erin- t!et'o promissor% notes plus interest andattorne%s ees) 7pon request b% Castro andt!e Malencias and 'it! conormit% o t!e ban1t!e auction sale 'as postponed but 'asne&ert!eless auctioned at a later date)

Castro claimed t!at s!e is a @0K%ear old 'ido''!o cannot read and 'rite in =n-lis!).ccordin- to !er s!e !as onl% /nis!ed second-rade) >!e needed mone% in t!e amount o P000)00 to in&est in t!e business o t!edeendant spouses Malencia '!o accompanied

!er to t!e ban1 to secure a loan o P000)00)

Castro /led a suit a-ainst petitionerscontendin- t!at t!ru mista1e on !er part orraud on t!e part o Malencias s!e 'as inducedto si-n as coKma1er o a promissor% note andto constitute a mort-a-e on !er !ouse and lotto secure t!e questioned note) .t t!e time o /lin- !er complaint respondent Castrodeposited t!e amount o PA)00 'it! t!ecourt a quo in ull pa%ment o !er personal loanplus interest)

Castro pra%ed or

t!e annulment as ar as s!e is concerned o t!epromissor% note =9!ibit "2"6 and mort-a-e=9!ibit ":"6 insoar as it e9ceeds P000)00;and

or t!e disc!ar-e o !er personal obli-ation'it! t!e ban1 b% reason o a deposit o PA)00 'it! t!e court a quo upon t!e /lin-o !er complaint)

I>>7=

.rt) 3?2) *isrepresentation b% a t!ird persondoes not &itiate consent unless suc!misrepresentation !as created substantialmista1e and t!e same is mutual)


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OBLICON2

participant t!ereto suc! ma% !o'e&er bein&alidated on t!e -round o substantialmista1e mutuall% committed b% t!em as aconsequence o t!e raud andmisrepresentation inicted b% t!e Malencias)

!us in t!e case o Gill &s) Meloso t!is Courtdeclared t!at a contract ma% be annulled ont!e -round o &itiated consent i deceit b% at!ird person e&en 'it!out conni&ance orcomplicit% 'it! one o t!e contractin- partiesresulted in mutual error on t!e part o t!eparties to t!e contract)

!e raud particularl% a&erred in t!e complaint!a&in- been pro&en is deemed suHcient basisor t!e declaration o t!e promissor% notein&alid insoar as it afects Castro &isKaK&is t!eban1 and t!e mort-a-e contract &alid onl% up

to t!e amount o P000)00)

D),) No) LK54A05 (ul% 23 34A4

L=ONIL. () LIC7.N.N petitioner &s) GON),IC.,O ) I.V (ud-e Branc! TTMII Court o

irst Instance o *anila and .I.PIN=.respondents)

P.,.> ()

.C>

!is is a petition or re&ie' on certiorari o t!eOctober 35 34A3 ecision o t!e t!en Court o irst Instance o *anila aHrmin- t!e .u-ust A34@4 ecision o t!e Cit% Court o *anila)

Gerein petitioner is t!e o'ner o an apartmentsituated at ?35 ) .-uilar >t) Bo) Obrero

ondo *anila bein- rented b% !erein pri&aterespondent since *arc! 34@) On (anuar% 2234@? t!e% e9ecuted a lease contract andstipulated t!erein amon- ot!ers t!at t!emont!l% rental is One Gundred =i-!t% Pesos

PlA0)006 to be paid 'it!in t!e /rst /&e 56da%s o e&er% mont!)

On .pril ? 34@A t!e la' oHce o .mado =)>alalon-os and .ssociates sent pri&aterespondent a letter t!e bod% o '!ic! reads

7pon arri&al o %our lessor *rs)LeonilaLicuanan rom t!e 7nited >tates s!eound out t!at %ou !a&e occupied !er -ara-esituated at ?35 ) .-uilar Bo) Obrero ondo*anila '!ic! portion is not included in %ourlease contract and t!at despite !er requestt!at %ou remo&e t!e aparador and ot!er t!in-s'!ic! %ou !a&e placed t!ere as %our stoc1pile%ou !a&e ailed and reused to do so andinstead s!o'ed arro-ance b% tellin- !er t!at it'ill need a court order beore s!e remo&es t!esame and restores possession to %ou in

&iolation o t!e terms o %our contract)

In &ie' t!ereo 'e are -i&in- %ou /&e 56 da%srom receipt !ereo 'it!in '!ic! to &acate t!epremises at ?35 ) .-uilar ot!er'ise 'e s!allbe constrained to /le an e8ectment suit a-ainst%ou)

Pri&ate respondent reactin- to t!e said letteron .pril 32 34@4 'rote t!e Ci&il ,elations>er&ice .P Camp .-uinaldo #ue$on Cit% or!elp) . portion o !er letter reads

*a% I !a&e t!e !onor to solicit t!e !elp o %our-ood oHce 'it! re-ard to t!e letter I recei&edrom t!e la' oHce o .mado C) >a-alon-os+.ssociates attac!ed !erein)

!e accusations implied t!erein are not trueand or %our inormation >ir I !a&e ait!ull%paid m% mont!l% rentals rom t!e time 'eoccupied our apartment on *arc! 34@ up to*arc! 34@A)

On .pril 2? 34@A bot! petitioner and pri&aterespondent appeared beore Lt) Col) .ntonioPenala Gearin- OHcer o t!e Ci&il ,elations>er&ice but since t!e parties ailed to reac!an% a-reement Lt) Col) Penala placed t!enotation "GOL" on t!e pertinent document;

and as precautionar% measure instructedpri&ate respondent to deposit t!e amount o rental due or t!at mont! so t!at s!e could notbe c!ar-ed 'it! nonKpa%ment '!ic! directi&epri&ate respondent readil% complied 'it! ands!e 'as issued t!e correspondin- receipt)

On .u-ust 034@A pri&ate respondentrecei&ed a letter rom .tt%) *anuel *elocounsel or petitioner demandin- pa%ment o t!e .pril to .u-ust 34@A rentals amountin- toP400)00)

On >eptember 3 34@A petitioner /led Ci&ilCase No) 0@22:KM 'it! t!e Cit% Court o *anila Branc! MII presided o&er b% Gon)Priscilla C) *i8ares a-ainst pri&ate respondentor unla'ul detainer 'it! dama-es ,ollo pp)33K36) In t!e same petitioner alle-ed amon-ot!ers t!at pri&ate respondent !ad ailed topa% !er mont!l% rentals rom .pril to>eptember 34@A amountin- to Pl0A0)00; t!ata demand letter dated .u-ust 2 34@A 'assent and recei&ed b% pri&ate respondent on.u-ust 0 34@A '!erein it is demanded t!ats!e pa% !er rentals in arrears and to &acate t!e

premises; and t!at despite repeated demands'ritten and &erbal s!e reuses to pa% !errentals in arrears and to &acate t!e premises)

On >eptember 2@34@A pri&ate respondent/led !er ans'er Ibid) pp) 3?K3@6) In t!e samepri&ate respondent amon- ot!ers denies t!ats!e ailed in pa%in- !er mont!l% rentalsclaimin- t!at petitioner !as reused t!e rentalbein- tendered and t!at upon ad&ice o t!eOHce o t!e Ci&il ,elations .P s!e deposited

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!er mont!l% rentals 'it! t!at oHce or t!emont!s o .pril to >eptember 34@A inclusi&eat PA0)00 a mont!; and t!at s!e admits !a&in-recei&ed t!e letter o demand dated .u-ust 234@A and claims t!at upon receipt o t!e saidletter s!e called up b% telep!one petitioners

counsel .tt%) *anuel *elo inormin- !im t!att!e rentals due or t!e mont!s o .pril to.u-ust 34@A !a&e been deposited 'it! t!eOHce o Ci&il ,elations .P and t!atpetitioner can 'it!dra' t!e said amount duerom t!e said oHce)

!e trial court in a ecision dated .u-ust A34@4 ruled in a&or o pri&ate respondentIbid) pp) @K?26) !e dispositi&e portion o t

digest2 obli april

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